Do you want to start an arcade business and want to know the cost? If YES, here is a cost breakdown to open an arcade and the profit margin / ROI.
An arcade game or coin-op game is a coin-operated entertainment machine typically installed in public businesses such as restaurants, bars and amusement arcades. Most arcade games are video games, pinball machines, electro-mechanical games, redemption games or merchandisers.
Arcade game lounges are part of the Arcade, Food & Entertainment Complexes industry and players in this industry include businesses that primarily operate video game arcades and game-focused family entertainment centers, which typically sell food and beverages.
Estimated Cost Breakdown to Open an Arcade Game Lounge
When it comes to opening an arcade game lounge, the major areas that you should look towards spending the bulk of your cash is in renting or leasing a standard facility and converting it into an arcade game lounge, and equipping the lounge with the needed games.
Please note that Arcade game machines can vary in cost from $1,500 for small table top models to over $29,000 for larger games that fully immerse the player.
Aside from that, you are not expected to spend much except for paying of your employees and utility bills and stocking up with inventory if you also run a food court and bar. These are the key areas where you are expected to spend your startup capital on;
- The total fee for registering the business in the united states of America – 0.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the arcade game lounge in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for renting or leasing a space or warehouse that will be converted into the arcade game lounge and that can accommodate the number of customers per time (Re – construction of the facility inclusive) will cost – $80,000.
- Other start-up expenses including, commercial satellite TV subscriptions, stationery ($500) and phone and utility deposits ($2,800).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for start-up inventory (stocking with a wide range of drinks and food) – $15,000
- The cost for the purchase of storage hardware (bins, rack, shelves, food case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- The cost for serving area equipment (plates, ash trays, glasses, flatware) – $3,000
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
- The cost of purchase and installation of CCTVs: $2,000
- Equipping the arcade game lounge (different sizes and types of arcade game machines, Flat Screen TVs, sound system, DVD players, Satellite dish and decoder, furniture (table, stools and sofas), telephones, filing cabinets) will cost – $80,000
- The cost of launching a website: $600
- The cost for our opening party: $3,000
- Miscellaneous: $2,000
From the rough estimate as listed above, you would need a minimum of two hundred and ninety – eight thousand nine hundred USD ($298,900) to establish a medium – scale but standard arcade game lounge business in any city in the United States of America. Please note that this amount includes the salaries of all the staff for the first three months of operation.
In Conclusion,
Please note that this is a rough estimate and we usually advise our readers who are interested in opening an arcade game lounge to go to the market or directly contact wholesalers and suppliers of the types of arcade game machines, flat screen TVs, sound system and related gadgets they want to have in their arcade game lounge in order to get the real time prices of these items.
The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.