2022 Arcade Industry Year in Review

Arcade operators entered 2023 with a mixed but generally encouraging picture. New venues opened, game production recovered from pandemic disruption and many family entertainment centres (FECs) reported strong trading. Yet inflation, supply problems, rising energy costs and difficult location economics continued to challenge the industry.

This review examines the major arcade-business trends of 2022, notable new releases and the hard lessons from one operator’s decision to close a second venue.

Industry support also came from advertisers including TouchMagix, Raw Thrills and PrimeTime Amusements.

Arcade trading conditions entering 2023

Operator discussions suggested that 2022 was exceptionally strong for some FECs, with several reporting their best year yet, even ahead of 2019. Party-room activity also appeared particularly healthy. Redemption performed better than it had in previous years, while more venues moved from coins and tokens to cashless card systems, which operators associated with increased spending.

Those results need some qualification. Many venues raised prices during the year to counter inflation, so higher revenue does not necessarily mean more plays. Even with that caveat, available operator feedback pointed to a very positive year for much of the arcade sector.

The wider entertainment environment was less consistent. Cinema trading remained under pressure, affecting arcades located in or near theatre complexes, while technology layoffs and weak stock-market performance added to broader economic uncertainty.

More locations appeared to open in 2022 than in 2021, and the number of new arcade releases also increased as manufacturers worked through lockdown-related delays. However, production and freight costs pushed machine prices sharply higher. A racing cabinet that once cost approximately $7,500–$8,200 per unit could now be quoted at $10,000–$12,500. Super Deluxe models can perform extremely well in large FECs, but their price and footprint can make them impractical for smaller operators.

For anyone assessing equipment for a home or commercial space, the same pressures make careful planning essential. RETROCADE’s arcade machine buying guide covers the key decisions before committing to a cabinet.

New arcade locations around the world

New openings remain one of the clearest indicators of industry confidence, although some 2022 venues were completing investments that began in 2019. Growth was especially noticeable in India and the Middle East, with Timezone continuing an aggressive expansion programme.

Europe presented a more difficult picture. Closures, or possible closures, were reported in several markets, particularly the United Kingdom, where electricity bills reached unsustainable levels for some businesses. The year’s location reports covered new venues in January, March, May, July, September, October and December, including openings across North and South America, Europe, New Zealand, Japan, Australia and the United Kingdom.

Location remains just as important for a private collection as it is for a commercial arcade. RETROCADE’s upright arcade cabinets suit dedicated games rooms, while compact bartop arcades can work where floor space is limited.

Arcade releases gained momentum

The exA-Arcadia platform helped keep release lists moving during the leaner years of 2020 and 2021. In 2022, Bandai Namco and Raw Thrills made a stronger showing at Amusement Expo and IAAPA. Some IAAPA announcements were intended for 2023, but the improvement in production activity was still significant.

Inflation and supply-chain delays continued to affect delivery schedules and pricing. One late-year development was RaceCraft EVO, made by Tecnoplay and ICE, which was reported as shipping through distributors, including Betson.

Driving games remained a major part of the commercial pipeline. RETROCADE’s racing arcade range reflects the continuing appeal of car and simulator experiences for Australian game rooms and venues.

The ten biggest arcade stories of 2022

1. Adrenaline Amusements revealed Need for Speed Heat Takedown at IAAPA 2022.
2. Dave & Buster’s brought Top Gun: Maverick to its virtual-reality platform.
3. New details emerged about Fast & Furious Arcade from Raw Thrills.
4. New arcades opened in Japan, the United States, the United Kingdom and Australia.
5. Spooky Pinball announced Scooby-Doo! Where Are You?
6. exA-Arcadia presented a new cabinet and games at IAAPA 2022.
7. Arcade1Up Pro, Funhouse 2.0 and other assorted arcade developments drew attention.
8. Location reports documented openings across multiple regions.
9. IAAPA previews highlighted arcade games planned for 2023.
10. New businesses opened across North and South America, Europe and New Zealand.

Among the many racing announcements at IAAPA, Need for Speed Heat Takedown attracted particularly strong interest. The game was expected to launch in spring 2023.

A Deluxe prototype was photographed during location testing at In The Game–Icon Park in Orlando, Florida. It used a motion base originally developed by Adrenaline for the unreleased Drakons. Because the cabinet was a test unit, its final design could change. The photograph also showed one side out of service, although the fault message could not be read.

Second-location postmortem: what happened in Ogden?

The operator behind Arcade Galactic began sharing more business observations in 2022, including the performance of retro machines and pinball in a modern arcade. At the beginning of the year, the company had two Utah venues: the original in West Valley City, just outside Salt Lake City, and a second site in Ogden, north of the Great Salt Lake and close to Hill Air Force Base. The original opened in 2008 and had previously operated under another name.

Both arcades were in shopping malls. Ogden occupied a stronger mall position near the food court and recognised retailers such as Spencer’s and Hot Topic, but its rent was higher despite having less floor space. The West Valley City site faced a major competitor when a multi-million-dollar FEC opened at the opposite end of the mall in late 2019, immediately reducing monthly earnings by 25 percent.

After Utah’s relatively limited lockdown period, the original venue reopened in May 2020. A possible site visit to Twin Falls, Idaho, in August 2020 helped inspire the second-location plan. Used equipment was available at attractive prices, and some machines could be moved from the first arcade. Ogden’s Newgate Mall did not already have a major FEC such as Round1USA or Dave & Buster’s, although its Cinemark cinema included a smaller Starcade. Solid foot traffic and the quality of the mall made the site appear promising.

The opening was delayed by a business-licence problem. The city held the application for more than a month despite fees and inspections being completed. Mall management eventually contacted the mayor and discovered that someone had mistakenly believed the venue was a gambling operation. Gambling is illegal in Utah, but the licence was ultimately issued after the misunderstanding was escalated.

Foot traffic, trading hours and visibility

Ogden’s 2021 results were acceptable but below expectations. People passed the storefront without entering, even when general mall traffic was strong. Changes to lighting were tested, including leaving the room lights on, and the most visually striking machines were placed near the front. The layout later changed: the Daytonas were sold, House of the Dead Scarlet Dawn replaced Luigi’s Mansion, and a Raw Thrills Teenage Mutant Ninja Turtles machine was moved to Ogden.

Both venues began 2022 ahead of 2020, although neither matched the record performance of 2019. A noticeable decline began during summer, more severely in Ogden, and the site finished the year behind its 2021 earnings.

The lease was extended only to December after its October renewal point. A new bar-arcade opened in November and earned roughly twice as much from its games alone during that month. Ogden then earned less in December than it had in January, leading to the decision to close.

Why the location struggled

Marketing was not ignored. The venue had a party room, local magazine promotion, online support from the mall, introductions to nearby businesses, a temporary billboard and occasional tournaments with local pinball players. Nevertheless, the economic climate, record inflation and petrol prices affected discretionary spending. Both venues also relied partly on cinema traffic, with West Valley City more dependent on nearby movie releases.

Ogden competed with the cinema’s Starcade and had less flexible operating hours. The mall required opening at 10am or 11am and closing at 8pm, later extended to 9pm in October. Security enforced the closing time, and gates restricted access after hours. The mall was often quiet after 7pm, limiting the opportunity to capture late cinema customers.

The game mix may also have been unsuitable. Customer demographics in Ogden appeared to include more women and children, while the selection leaned towards hardcore and adult-oriented games. Pinball performed slightly better there because local competition was lighter, but that advantage disappeared when the new bar-arcade opened with a predominantly pinball offering.

Power management and the customer experience

To reduce electricity costs, not every machine was switched on at opening. Signs explained the policy, and staff offered to start a requested game. The approach saved several hundred dollars per month, but some reviews described the venue as broken or partly closed, while passers-by assumed the arcade was not operating. The operator questioned whether the saving was outweighed by lost visits and considered running every machine throughout the day.

Party bookings were another missed opportunity. Although Ogden hosted some events, the party room was not promoted as aggressively as it could have been, despite parties being major revenue generators for many arcades.

Tokens, cards and the business model

The venue operated as a straightforward token arcade, without food, drinks or ticket redemption, apart from an older crane machine in Ogden. Alternative models, including a bar-arcade, free play or redemption, may have matched local demand more closely. Redemption is not universally appealing to operators, but customers often respond strongly to it.

Cashless cards were another unresolved issue. Some visitors liked the token system, yet card systems appeared to align better with consumer behaviour and earnings. A suitable system could cost around $25,000, which was unaffordable at the time. After closing Ogden, installing one became a likely future investment.

The original West Valley City venue continued to perform substantially better, often twice as well and sometimes 2.5 times as well, as Ogden. That contrast reinforced the importance of location, surrounding businesses, customer demographics and operating conditions.

The personal cost of running an arcade

Operating the second site meant working six or seven days a week, often for 11–13 hours per day, alongside a second job and ongoing editorial and video work. Hiring help in Ogden was possible, but the business could not afford enough cover for the owner to step away regularly.

Machine damage and difficult customer behaviour added to the pressure. The operator was particularly tired of repeatedly asking people to treat the shifters on Maximum Tune machines carefully. The workload also meant missing family time with two teenagers and a younger child.

Closing Ogden was therefore not simply a financial decision. Once earnings declined, the time and effort required no longer justified continuing. The result should not be read as evidence that arcades cannot succeed. Business outcomes depend on location, game selection, hours, marketing, payment systems, customer mix, competition and the operator’s available resources.

What 2022 taught the arcade industry

• Strong revenue may partly reflect higher prices rather than increased play volume.
• Cashless payment systems and redemption remain important commercial considerations.
• Large Super Deluxe machines can suit FECs but may be unsuitable for smaller venues.
• Cinema traffic can support nearby arcades, making film-industry weakness a local concern.
• Opening hours, visibility and customer expectations matter as much as foot traffic.
• A venue’s game mix should reflect the people who actually pass its doors.
• Power-saving decisions can affect perceived availability and customer trust.
• Party rooms require active promotion rather than simply being available.
• Protecting the operator’s time and family life is part of responsible business planning.

For Australian collectors and operators, the lessons are practical: measure the local audience, budget for rising equipment and energy costs, understand the limits of a site and choose a machine mix that fits the space. RETROCADE’s arcade machines provide a starting point for building a suitable setup.

Despite the setbacks, 2022 showed that well-positioned arcades can still attract customers and generate strong results. The industry entered 2023 with more releases, new venues and plenty of challenges still to solve.