Endgame – May 2021


What to Do When the Spring Bubble Bursts


Let’s Start the Dialog & Planning for If and When the Pendulum Swings


by Adam Pratt, Arcade Galactic & ArcadeHeroes.com

As I’ve been in touch with people in the industry this year, one comment has popped up with some frequency: “The FEC market is doing fantastic right now!” The “right now” comment is what gives me pause, but I’m not complaining about any good business that’s taking place, particularly when you consider how things were just a year ago. I’m also happy to report that things were solid at my own facilities this past March and April.
The factors that are giving us this “post-Covid bump” aren’t complicated and are what I think most of us expected would happen following the long period of lockdowns and restrictions:

#1: People have cabin fever like they’ve never had before. While it’s true that streaming/digital entertainment services have enjoyed massive earnings during the lockdown days, eventually people get channel-surfing fatigue and look for something new.

#2: With nicer weather, the vaccination rollout and subsequent lower infection/hospitalization/death numbers, the fear of going outside and into retail stores has diminished.

#3: The 2021 round of stimulus money plus tax returns are being spent

Now before I tackle my pause, understand that I am not presenting these negatives to be a doomsayer, but because I think it’s vital to get some discussion going out there as to how we’ll respond to changing market conditions in the future.

The main concern I have is that each of the factors contributing to the business bump are temporary. Cabin fever will pass, infection/hospitalization/death numbers can change for better or worse, and stimulus money/tax returns get spent.

Meanwhile, energy costs have been rising, many businesses have permanently closed (which affects employment and entertainment income), and after we’ve spent several trillion dollars since last year (quite possibly with much more spending to come), taxes will certainly be going up across the board, too.
So, what do we do when this “Spring Bubble” bursts?

Take Charge Where We Can

While we can’t control all of the factors affecting our businesses, we can always control the customer experience. That continues to be an important side of running any business where customers walk into a retail space, and it’s going to matter more than ever since many people have been afraid to go back out into retail. (Remember, anyone who has those fears will only find those reinforced if they have a negative experience when they’re back out shopping. This will hurt not just us, but others in the out-of-home economy.)

Let’s address manned locations first. One part of providing a good experience will be maintaining your cleanliness/hygiene measures. This is true regardless of recent scientific studies that have shown the chances of contracting Covid-19 via surface touch are “1 in 10,000” and that surface transmission is a rare and very unlikely way for the virus to propagate. Unfortunately, the media has done very little to tout these newer studies to the public, and after many months of believing otherwise, it’s going to be very difficult for public perception to change in that regard.

Since cleaning protocols will remain important, I’d like to tout one product I’ve been using to clean my machines: Microban by Proctor & Gamble. It claims to kill germs and viruses (including Covid-19) for up to 24 hours, and I haven’t noticed any issues like discoloration on any controls. That said, while there’s benefit to applying that on high-touch surfaces before you open, there is still value to having employees regularly clean controls while customers are in your location. When it comes to cultivating good customer perception, it’s much more effective to have them to see your team clean than it is for them to read signage claiming that you do.

Apart from that, ensuring that your customer service is top-notch is key. In the hiring process, try to separate the “wheat from the tares,” and try to find the best “people persons” you can. Even when you do this, there is always a risk that your hires won’t work out as you’d hope. What I have learned in managing people over the years is that the best employees come from 1) vetting new hires as best as you can; 2) managing expectations on both sides (yours and theirs) in regard to customer policy; and 3) solid and frequent team communication. It also doesn’t hurt to have internet-accessible cameras in your location(s) so that you can occasionally “drop-in” on your employees. You can also send in a friend or family member your employees don’t know who can “secret shop” at your location to see how your team is doing.

At locations like mine where there’s little to no interaction with staff (some people come in, use the change machine, play for a while and then leave without ever communicating with an employee), it’s still important that someone on your team interacts with guests whenever possible to ensure things are going smoothly.

Route locations are a different beast because your staff isn’t on site all the time. For street operators who lost accounts because people were afraid of Covid transmission by touching equipment controls, it might be worthwhile to track down the studies mentioned and take those to the clients to show that the risk was overblown in that regard. (This is, of course, assuming that account is still in business). To help put customers’ minds at ease, you can still offer hand sanitizer stations that you can place among the games and keep stocked.

The other side of our industry’s customer experience is, of course, the games and attractions whether you’re running an FEC or route operation. It’s the games and/or attractions that will get people to come out to have some fun and what keeps them there and coming back. I think it is important to change up your game selection if you can afford to do so. There are also many used equipment deals out there and almost everything I’ve bought since last year has been used instead of new. This “glut” of games won’t last forever and eventually players will want something new. This raises another concern for me at the moment: What kind of games are under development that will be attractive for me as an operator come late 2021/2022 (and not just big pieces for the FEC market but for smaller arcades and route locations, too)?

Don’t get me wrong, King Kong of Skull Island VR as well as Mission: Impossible Arcade are very cool and attractive pieces, and I hear they earn well. But with the initial price point, of course they’re not going to be for everyone. Even before Covid, I felt pricing was a cause for hesitation. Post-pandemic, they are that much more out of reach for someone like me. I do understand the development dollars that went into those and other big, FEC-targeted pieces, but I hope the manufacturers have also considered different new equipment options for the other locations that make up our industry.

One solution that I think would work well is the return of standard cabinet options along with deluxe or super deluxe versions. Perhaps I need to be schooled on the economics of the manufacturing side to learn why the industry started moving away from this standard class of cabinet, but I don’t see how it is a negative to offer at least two models of a game. I’ll also drop the dreaded “K-word” –– kits –– as another solution that works for the street. There is one company, exA-Arcadia, that we’ll see at Amusement Expo 2021 showing off its kit solution, but they don’t have to be the only ones offering a tried-and-true way to reinvigorate an existing cabinet.

At the end of the day, I’m happy that we’re finally seeing the light at the end of the tunnel. It’s still a difficult climb, but I’m confident that we’ll make it. One big problem that came out of this pandemic that will have ramifications for years to come, is how lonely people have been. An antidote to that is finding a social gathering spot, and arcades and amusement venues are exactly that –– places that can foster real human connections, as opposed to the hollow and often stressful “social media” alternatives. If we keep this in mind as we move forward, I think we’ll be in a better place when all of the dust settles.



Adam Pratt is the owner and operator of Arcade Galactic near Salt Lake City, Utah, and also publishes the Arcade Heroes blog site. He can be reached at [email protected].




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