How to Start an Arcade Business: Equipment, Setup and ROI Tips

Dreaming of turning your passion for gaming into profit? You are not alone. Arcades have grown far beyond retro nostalgia and now play a meaningful role in today’s experience driven entertainment market. Families want activities they can enjoy together, adults appreciate relaxed social spaces, and younger players are drawn to modern interactive games. An arcade can meet all of those needs in a single place.

With the right approach, this business can be both enjoyable and financially rewarding. It all starts with understanding how the industry works and what drives customer interest. Once you have a clear sense of your equipment options, location strategy, and long term revenue potential, the path forward becomes much easier to visualize.

Key Takeaways:

• Most arcade businesses start with a budget between 50,000 and 250,000 dollars.

• Your equipment choices have a major impact on customer satisfaction and revenue.

• Successful arcades blend classic video games with redemption machines and group friendly attractions.

• Many arcades reach payback within 12 to 24 months.

• Working with a reliable arcade machine supplier supports long term performance and lower maintenance costs.

This guide will walk you through the essentials of how to start an arcade business so you can move confidently. You will learn about costs, the types of arcade business equipment available, supplier considerations, ROI expectations, and ways to grow once your arcade gains momentum.

Step 1: Understanding the Modern Arcade Business Model

Why the Arcade Industry Is Thriving Again

The arcade industry has made a noticeable comeback, and it is not just because people love nostalgia. Modern players want real, shared experiences, and arcades deliver exactly that. I have seen so many people walk into an arcade and instantly feel excited. The lights, the sounds, the energy. It creates a feeling that phones and consoles simply cannot replace.

Several factors are fueling this new wave of interest:

• Many customers want social activities they can enjoy with friends or family.

• Arcade bars bring together gaming and casual nightlife, which attracts adults who want something fun after work.

• Families look for easy outings, and an arcade often becomes a weekly routine.

• New tech like motion based games and VR keeps the experience fresh and exciting.

This blend of nostalgia, social interaction, and modern gameplay has created a strong foundation for new arcade businesses. It also means owners have more ways to stand out and keep customers coming back.

Key Business Types to Consider

When you think about starting an arcade, it is helpful to explore the different formats available. Not every owner chooses a big, traditional space. Some start small. Others build hybrid concepts. I always encourage people to choose a model that fits their budget, audience, and long term goals.

Here are the main options:

• Traditional coin operated arcades: These are the classic setups with video games, pinball, and racing cabinets. They work well in malls, plazas, or standalone locations with steady foot traffic.

• Barcades and hybrid venues: Great for adults who want a casual night out. These businesses mix arcade machines with drinks or light food, which often increases revenue per visitor.

• Game room installations: Some owners build custom arcade rooms for offices, hotels, or residential buildings. It is a lower risk approach with consistent demand.

• Mobile or pop up arcades: Ideal for events, birthdays, corporate parties, or festivals. They require less overhead and can be expanded over time.

Each type comes with unique advantages, so the best choice depends on your resources and the kind of customer experience you want to create. Once you understand the model that fits you best, the rest of the planning process becomes much easier.

Step 2: Calculating Startup Costs and Budget

How Much Does It Cost to Start an Arcade Business?

Most new arcade owners invest between 50,000 and 250,000 US dollars to get their business off the ground. Some start on the lower end by opening a smaller venue or focusing on a curated set of high performing machines. Others aim for a larger family entertainment layout, which naturally increases costs. I always recommend starting with a number that feels comfortable, then scaling once you see consistent traction.

Your actual budget depends on a few core elements that affect almost every arcade:

• The number of arcade machines you want to launch with

• The size and location of your space

• Interior setup such as flooring, lighting, and décor

• Licensing, permits, and insurance

These factors shape the foundation of your budget. Once you have a rough idea of your desired setup, you can estimate how much to allocate and where to prioritize spending. Many new owners are surprised to learn that the initial investment can be managed with strategic planning and smart equipment choices.

One Time vs. Ongoing Expenses

Understanding the difference between one time and ongoing expenses is essential because it helps you plan for long term sustainability rather than just the opening day. I like to break these into two simple categories.

One time costs:

• Purchasing or leasing your first set of arcade machines

• Renovation, paint, lighting, and the physical setup of your space

• Payment systems or tap to play readers

• Networking and basic tech setup

These are upfront investments that create the foundation of your business.

Ongoing costs:

• Routine maintenance and occasional repair work

• Staff wages if you plan to hire attendants

• Marketing, local advertising, and event promotion

• Electricity, cleaning, and software updates for certain machines

These expenses continue month after month, so it helps to plan for them early. Some owners create a monthly budget specifically for maintenance and marketing because those two areas have the biggest impact on customer experience and repeat visits.

Cost Saving Tips for New Arcade Owners

When you are just getting started, it is completely normal to look for ways to save money without hurting quality. I have seen many owners reduce their launch expenses simply by making smarter choices during the planning phase.

Here are a few practical tips that genuinely help:

• Lease machines instead of buying them outright. This keeps startup costs lower and lets you rotate games more easily.

• Consider high quality refurbished arcade machines. Many look and perform like new but cost significantly less.

• Build relationships with a reliable arcade machine supplier. Good suppliers often offer bundle pricing, financing, or technical support.

• Start with a smaller selection of machines, then expand as your foot traffic grows and cashflow becomes more predictable.

These strategies help you stay flexible during your early months while still offering a great experience to customers.

Step 3: Choosing the Right Arcade Equipment

Essential Arcade Machine Categories

Choosing the right mix of machines is one of the most exciting parts of starting an arcade. It sets the tone for your entire business. Some owners focus on nostalgia. Others lean into fast paced modern games. I like to think of it as building a menu that offers something for everyone.

Here are the core categories most arcade owners work with:

• Video arcade games: These include the classics people grew up with, along with modern shooters, rhythm games, and digital cabinets. They draw attention quickly and spark instant nostalgia.

• Redemption machines: These are the ticket based games that reward players with points they can redeem for prizes. Families love them, and they often become top earners because people tend to play multiple rounds.

• Sports and racing machines: Think air hockey, basketball hoops, racing simulators, and even compact VR setups. These games bring energy to your space and keep players coming back to beat their own scores.

• Multiplayer games: Larger party style games encourage groups to play together. They create buzz, fill your space with excitement, and boost revenue because people enjoy competing side by side.

A balanced mix helps you attract different age groups and different play styles. It also encourages customers to spend more time in your arcade because there is always another station to try.

Best Selling Arcade Machines for ROI

Some machines consistently deliver stronger returns than others. I always tell new owners not to fall for hype right away. Instead, look at what actually performs well on the floor.

High earning machines usually share a few simple traits:

• They allow quick rounds, which means more plays per hour

• They stand out visually and draw attention even from across the room

• They are reliable and do not require frequent repairs

• They offer a unique experience or have a brand name that people instantly recognize

Redemption games often lead in repeat plays because the prize motivation keeps customers engaged. Racing and sports machines also perform incredibly well thanks to their competitive nature. People love trying to beat their friends, and that naturally increases play volume.

If you ever feel unsure about which games to choose, it helps to look at what similar venues in your area are running. Pay attention to customer behavior. That alone can teach you a lot.

Where to Buy Arcade Machines for Business

Finding the right arcade machine supplier is one of the most important decisions you will make. A good supplier does more than sell you equipment. They support your business with guidance, repairs, and long term reliability. I always feel more confident working with suppliers who treat the relationship like a partnership rather than a transaction.

When comparing suppliers, look for:

• Clear warranty coverage so you know your machines are protected

• Responsive technical support in case something goes wrong

• Delivery, installation, or setup options that save you time

• Financing or leasing programs if you prefer to manage cashflow carefully

The right supplier helps you avoid costly setbacks and keeps your machines running smoothly. This matters a lot, especially in your first year when every customer experience counts.

If you need an extra layer of certainty, many owners like to visit the supplier’s showroom or request a video demo. It lets you see how the game performs in a real setting.

Step 4: Setting Up Your Arcade Space

Choosing a Location That Attracts Traffic

Finding the right location can make or break your arcade. I always encourage owners to think of location as more than just a physical address. It is the place where your customers decide if they want to walk in, stay, and come back. Some spots naturally bring people in, while others need a little extra work.

Spaces with strong potential usually offer:

• High population density

• Steady foot traffic throughout the week

• Nearby complementary businesses such as malls, theaters, bowling alleys, or food spots

These areas attract people who are already in the mood to have fun. That alone gives your arcade a huge advantage.

Before signing any lease, check your local zoning rules. Some cities require special permits for arcade operations or specific noise control measures. It only takes a few minutes to confirm, and it can save you from costly surprises later. I always feel more confident when I verify these details early.

Designing for Experience and Efficiency

Once you have your location, it is time to shape the experience. A great layout keeps the energy flowing. People should walk in and instantly feel excited. At the same time, the space must be easy to navigate so customers do not feel cramped or confused.

A few simple layout principles really help:

• Place eye catching or high traffic machines near the entrance

• Space machines far enough apart so groups can play comfortably

• Use lighting to set the tone whether you want a family friendly feel or a more vibrant nightlife atmosphere

• Keep walkways clear so players and spectators can move easily

Small details matter. Even something like placing a racing game next to a quieter redemption game can change the vibe. I always walk the floor as if I am a customer. It helps me spot anything that feels awkward or cluttered.

Technical Setup Essentials

Every arcade needs a reliable technical foundation. It does not have to be complicated. It just has to work. A smooth setup keeps machines running, customers happy, and your stress low.

Make sure you have:

• Enough electrical capacity to handle your machines

• Surge protection to prevent damage during power fluctuations

• Internet or network access for digital payments and software updates

• A basic maintenance routine to keep everything clean and working properly

• Safety features like clear exits, adequate lighting, and non slip flooring

• Noise control measures that keep your space loud enough to feel lively but comfortable for families and groups

I always suggest planning these elements early. It is much easier to install wiring, sound panels, or extra outlets before your machines arrive. Once everything is in place, you will feel a sense of relief knowing your arcade is ready for action.

Step 5: Marketing Your Arcade and Building Foot Traffic

Branding and Local Marketing Strategies

Marketing your arcade is more than putting up signs. It is about creating a personality for your space and letting people know why they should come in! I always tell new owners to think about how their arcade makes people feel the moment they walk in. That feeling should carry into everything you do online and in the community.

Some effective local marketing strategies include:

• Grand opening events: Make your first day special! Offer free plays, small prizes, or a mini tournament to draw in curious visitors. A memorable opening can generate word of mouth that lasts for months.

• Themed nights and tournaments: Hosting events like retro game nights or competitive leaderboards gives people a reason to return. These events also create a buzz on social media.

• Membership or loyalty programs: I have seen repeat visitors double when owners offer punch cards, monthly memberships, or reward programs. Small incentives keep customers coming back and increase revenue per player.

• Nostalgia campaigns: Highlight classic games and iconic experiences from older generations. People love reliving their childhood and sharing it with friends and family.

Even simple strategies, like naming events after popular games or offering photo opportunities with machines, can make your arcade memorable. I always suggest trying one or two ideas first, then building a consistent schedule that customers can rely on.

Digital Marketing for Arcades

A strong online presence is essential today. Most people search for activities near them, so if your arcade is invisible online, you are missing a huge portion of potential visitors! I always start with the basics and then layer in content that engages your audience.

Ways to boost digital visibility:

• Optimize your Google Business Profile: Ensure your address, hours, photos, and menu of attractions are up to date. This helps your arcade appear in local searches instantly.

• Use local SEO: Focus on terms people might search for in your area, such as “starting an arcade,” “arcade machines near me,” or “family entertainment center.” It improves your chances of showing up when someone is ready to visit.

• Engaging social media content: Post top scores, highlight tournaments, showcase behind the scenes moments, and introduce new machines. Short, punchy videos work exceptionally well to grab attention.

I like to think of social media as a way to invite people in before they even step through the door. Even a single viral post can drive a lot of foot traffic in a short time!

Partnerships and Community Events

Local connections can have a massive impact. I always tell arcade owners that their business is stronger when it becomes part of the community. Partnerships provide exposure and can generate repeat visitors who might not find you otherwise.

Consider building relationships with:

• Schools and youth groups: Offer field trips or discounted group packages. Students are often your best ambassadors.

• Bars and breweries: Cross promotions, combo events, or co-hosted game nights can bring in adult visitors.

• Event planners and corporate teams: Birthday parties, corporate team building, or private events can become a steady source of revenue.

• Local eSports organizations: Host small competitions or friendly matches. It attracts competitive players who spend more time and money at your arcade.

Community engagement is more than marketing; it is about making your arcade a hub where people want to be. I always recommend attending local fairs, sponsoring small events, or offering your space for charity events. Every connection helps build credibility and foot traffic.

Step 6: Measuring Profitability and ROI

Average Arcade ROI Benchmarks

Understanding how profitable your arcade can be is crucial. From my experience, well managed arcades often recover their initial investments within 12 to 24 months. The exact timeline depends on several factors including location, machine selection, and marketing efforts. Some arcade owners see faster payback when they carefully match games to their target audience, while others take longer if they focus on higher-end setups that attract fewer but bigger spending visits.

Revenue per machine can vary widely. Redemption machines often generate consistent returns because they encourage repeat plays. Racing and sports games can also produce high earnings, especially in social or competitive settings. Tracking which games perform best early on helps you optimize your setup and maximize profitability.

How to Track Performance Metrics

I always tell new arcade owners that numbers are your best friend. They tell you what works, what needs improvement, and where to focus your energy. Some of the key metrics to track include:

• Cashflow per machine: Understand which machines bring in the most money and which might need to be rotated or upgraded.

• Redemption ratios: Measure how often customers earn tickets versus how often they play. This can help you adjust prize offerings to balance excitement with cost.

• Attendance and footfall patterns: Note peak hours, slow days, and seasonal fluctuations. You can use this information to plan events or promotions.

• Membership activity: Loyalty programs help track repeat visits and reward your most engaged customers.

• Repeat play statistics: Identify which games encourage players to come back multiple times in a single visit or over several visits.

Even simple tools like spreadsheets or point-of-sale software can make tracking these metrics much easier. I always recommend reviewing these numbers weekly at first, then monthly once you get a stable pattern.

Maximizing Arcade Profitability Over Time

Profitability is not static. Your arcade will perform best if you keep your offerings fresh, flexible, and aligned with customer interests. Here are some practical ways to increase revenue over time:

• Rotate machines seasonally: Swap in new or popular games to keep visitors engaged. People love discovering something new.

• Offer birthday packages or private party rentals: These events can generate higher revenue per visitor and introduce your arcade to new audiences.

• Add merchandise or branded apparel: T-shirts, hats, or small collectibles allow fans to take a piece of your arcade home and provide an additional revenue stream.

• Introduce food and beverage options if zoning allows: Snacks, drinks, or themed treats can increase the time customers stay and the amount they spend.

I always tell owners that small adjustments can lead to big results. Even rearranging machines or hosting a simple tournament can make a noticeable difference in engagement and revenue.

Step 7: Scaling Your Arcade Business

When to Expand or Franchise

Growing your arcade is exciting, but it also requires careful planning. I always tell owners to be patient. Expansion is most successful when your current location is running smoothly, and your systems are proven to work. Signs that you are ready to scale include:

• Consistent monthly profits: If you are regularly covering costs and seeing extra revenue, that means your model is working.

• High repeat visitor volume: Loyal customers who come back week after week show that your arcade has staying power.

• Proven staffing and operational systems: You need a team you trust and processes that keep the arcade running efficiently even when you are not on the floor.

• Strong local demand that exceeds your current space: If you often have crowded days or waiting lines, that could signal an opportunity to expand into a larger venue or a second location.

Once these indicators align, expansion becomes less risky. Some owners choose to open a second location. Others explore franchising to grow faster with less personal oversight.

Adding New Revenue Streams

Scaling is not just about adding more locations. Increasing how much each visitor spends can be just as powerful. Over time, I have seen small tweaks create big results! Consider these options:

• VIP memberships: Offer exclusive benefits like early access to new games, reserved spots for events, or bonus redemption points.

• Tournaments and competitive leagues: Hosting local competitions encourages repeat visits and creates excitement in your community.

• Exclusive game licensing: Partner with brands or developers to offer games or experiences unique to your arcade.

• Influencer collaborations and sponsored events: Invite local gaming influencers or businesses to host events. It attracts new visitors and adds credibility.

Even adding one or two new streams at a time can significantly increase profitability without overcomplicating operations.

Partnering with Reliable Arcade Suppliers for Growth

When scaling, your relationship with suppliers becomes even more important. I have learned that a dependable supplier can save you time, money, and stress. A strong partnership ensures you get high-quality equipment, timely support, and consistent pricing. Key benefits include:

• Faster delivery times: Scaling means you need machines ready quickly to fill new spaces.

• Access to the latest commercial arcade machines: Being first to offer new experiences keeps customers coming back.

• Better warranty support: When machines need repair, quick and reliable service prevents downtime.

• Consistent quality and innovation: Your arcade’s reputation depends on reliable and exciting experiences.

Before committing to a long-term relationship, use a supplier checklist to evaluate them. Make sure they offer:

• Reliability in delivery and service

• Maintenance and technical support options

• Financing or leasing opportunities

• Variety and quality of machines

Building strong supplier partnerships early allows your arcade to scale smoothly. When you know your machines and support are dependable, you can focus on growth, customer experience, and profitability.

FAQs About Starting an Arcade Game Business

Game Room Shop’s Final Thoughts:

Start Building Your Arcade Empire

Starting an arcade business today is more than just a fun idea. It is a real opportunity to tap into the growing experience economy and create a space where people want to spend time, celebrate, and make memories! I have seen firsthand how a well-planned arcade can become the heart of a community. Families, friends, and gamers of all ages come together to enjoy experiences that no phone or console can replicate.

Success in this industry comes down to a few key elements:

• The right equipment mix: Choose machines that appeal to your audience, balance classic favorites with modern experiences, and keep customers coming back for more.

• A strong location strategy: Visibility, foot traffic, and nearby attractions can make a huge difference in your arcade’s initial and ongoing success.

• ROI-focused planning: Tracking revenue, understanding which machines perform best, and introducing smart revenue streams ensures long-term profitability.

Once you have these foundations, your arcade can grow, evolve, and even expand into multiple locations or add new revenue streams. The key is starting with a plan, staying flexible, and paying attention to your customers’ experiences.

Are you ready to take the leap?

Explore our full selection of Arcade Games, and start building your entertainment business today! Every successful arcade began with a single step—why not make today yours?

Meryam Shakoor

Meryam is the Sales & Service Manager of Game Room Shop. She isn't just passionate about happy customers & game rooms – she's an expert at transforming visions into reality. Her deep knowledge of game tables & arcade machines allows her to recommend the best selections for our residential and commercial customers. Meryam helps craft unique and engaging experiences tailored to each client’s vision.

Want to discuss your dream game room? For a limited time, Meryam is offering Free 30-Minute Game Room Consultations. Book yours today!