Originally printed in the Wall Street Journal - Mar. 22, 2015
Videogame arcades, a mainstay of 1980s pop culture, are few and far between these days—but for Vic Parise, opening one was a lifelong dream.
“I grew up in Long Island and I was always in an arcade,” he said. “Something mesmerized me.”
The 38-year-old and his wife put $250,000 into Nanuet Arcade, which opened earlier this year in a strip mall in Nanuet, N.Y., about an hour north of Manhattan.
From the road, the only signal of the business’s existence is the word “Arcade” in plain block letters perched atop a sign for a neighboring carwash.
Inside, pulsing techno music and black lights evoke an old-school vibe. Customers can choose from more than 60 coin-operated games, from classic pinball to the latest Japanese imports, spanning several decades of videogame history.
“ ‘I can’t believe this is here,’ is what people think,” said Mr. Parise, who previously worked in information technology.
Video arcades are still hanging on, partly thanks to Gen X nostalgia and the pairing of videogames with other activities, like bowling—or simply hanging out at a bar.
Some 35 years after it released the Pac-Man videogame, Japan-based Namco Entertainment Inc., is investing in huge entertainment centers. Earlier this month, it opened a 40,000-square-foot Pac-Man-themed prototype in a Chicago mall. Called Level 257, it includes a restaurant, multiple bars, retro bowling lanes, ping-pong, pinball and a videogame lounge with old and new arcade fodder.
“Games are part of our DNA, but they’re evolving,” said Namco Executive Vice President David Bishop, “and going forward it’s all about the social and entertainment experience for us.”
Nanuet Arcade opened earlier this year in a strip mall in Nanuet, N.Y., about an hour north of Manhattan. Photo: Alexander Eriksen for The Wall Street Journal
The number of arcades in the U.S. has steadily declined since the early 1990s, when home-gaming consoles took off. In 1982, during arcade gaming’s heyday, there were about 24,000 full arcades and 400,000 so-called street arcades, typically located in amusement parks, according to Steven L. Kent’s “The Ultimate History of Video Games.” By 2008, the number of arcades nationwide had plummeted to just 3,500.
Nolan Bushnell, who co-founded Atari , the first major producer of arcade games and home consoles, said he sees potential in places like the bar chain Barcade, which has three locations in New York City, one in Jersey City and one in Philadelphia. “I think there’s definitely an opportunity to get niche players,” he said.
A broader comeback for the arcade business is unlikely, Mr. Bushnell said, pointing to the prevalence of home gaming and the loss of arcades’ monopoly on cutting-edge technology. Still, he said: “I think there are always businesses that can do well so long as they don’t dilute the core fan. Could there be 100 Barcades? No. Four? Definitely.”
When Barcade opened its first location in the Williamsburg neighborhood of Brooklyn in 2004, its owners were surprised by its success. “We didn’t expect this marriage of a bar and games would take off the way it has,” said Paul Kermizian, one of Barcade’s founders. “I think we’re successful because there isn’t an arcade market. We’re an outlier.”
The games are more of a way to get people in the door: They generate just 10% of revenue, while craft beer is the moneymaker, Mr. Kermizian said.
At Nanuet Arcade, Mr. Parise is adding a kitchen and has applied for a license to sell beer in hopes of attracting more adults. To further diversify his revenue stream, he plans to regularly host live music there. But a big part of his target market is middle schoolers and high schoolers, he said. “I’d love to get all the local people, all the kids.”
Mr. Parise said he considered locating his arcade in New York City, but was turned off by factors like high rents and the necessary permits.
The city’s rules on amusement licenses are tricky, partly due to a fraught history. A would-be arcade owner must get approval from the city’s Department of Consumer Affairs, the Department of Buildings and the local community board—bureaucratic remnants of an era when arcades were seen as magnets for unsavory characters and fronts for organized crime.
In 1942, Mayor Fiorello La Guardia ordered city police to raid arcades and seize thousands of pinball machines. Pinball operators were nothing more than “slimy crews of tinhorns, well dressed and living in luxury on penny thievery,” La Guardia famously said. A ban on pinball stayed in place until 1976.
Department of Consumer Affairs Commissioner Julie Menin said the laws around amusement arcades have been modified over the years “to change with our communities” and ensure that families using them are protected.
Jessie Tubito, 19, plays a game at Nanuet Arcade. Photo: Alexander Eriksen for The Wall Street Journal
Equipping an arcade also presents practical challenges. Few manufacturers are building new machines as development costs far exceed demand. With many arcade machines in use practically antiques at this point, spare parts—and skilled maintenance technicians—can be scarce.
Jersey Jack, a pinball manufacturer in New Jersey, has invested $2 million to produce a new game, the Wizard of Oz. It has an LCD screen, LED lights and stereo sound, but the company took a risk in trying to update pinball technology. “People in the industry thought I was nuts,” said Jersey Jack President Jack Guarnieri. “They’re not sure the industry will be around.”
Back in Nanuet, Mr. Parise hopes his arcade will stand the test of time, saying he is willing to spend several years building the fledgling business.
Jessie Tubito, 19 years old, stopped by the arcade recently to play a few games and apply for a job. “People my age are getting into the ’80s, and arcades were a big part of that era,” said Ms. Tubito, a fan of the 1980s space- shooter game Galaga.
“I love arcades. It’s more social,” she said. “I hate just being around my house all the time.”