Question

Make a financial plan for an arcade room with a initial investment of $150.000

Answer 1

Lets consider the costs involved in setting up an arcade room.

1. Gaming machines & their upkeep/ maintenance

2. Rent/ Lease payments of room

3. License Fees

4. Office equipment other than gaming machines

5. Marketing

6. Employee costs

You have $ 150000 and considering business loans are not required, the arcade room will have 12 -15 gaming machines which will take up $ 90-95K of the investment including their upkeep for a year.

You will need a commercial space to keep the machines and depending on the location the costs involved could go upto a minimum of $ 25K annually.

You need to get a game of chance license for setting up the arcade room if you want to avoid hefty fines and possibly closure of business. It will set you back by $10K.

Office equipments like furniture, electrical equipments, cash registers and computers will be required for the business and cost about $ 10K.

To bring in enough business, Arcade rooms require extensive marketing because virtual gaming has taken over the world of gamers however, there is still a market for physical gaming. Online Marketing costs around $5K per year based on the reach you want.

A small crew of 5 people would be more than enough to manage the show. Employee costs will be around $ 25-30K per year.

Only looking at costs will not help. A good revenue model is also required to successfully run a business. The best thing to do is not to make use of physical coins but instead use tokens (just like chips in a casino). It is said that buying tokens will make a gamer spend more since you can always encourage them to keep returning to the machines to “earn” more and also it saves the hassle of carrying coins. A good arcade business can make the owner richer by $ 25-30K per year.