By Michael F. Kastre
From the first coin operated machine in 1931, called Baffle Ball, and the 1933 pinball machine to the 1971 Galaxy Game, which was the first ever coin operated video game, and into the late 1990s when Multiple Arcade Machine Emulations enabled designers to put thousands of arcade games into one arcade, these marvels have been driven by technology. Over the decades, though, one common thread is that while they entertain players, they also generate revenue for businesses who host them.
Bowling alleys are the perfect venue for them and they can be a great way to create or enhance multiple streams of revenue. They also can help draw a crowd and create excitement; for example, they can foster competition when patrons try and beat friends’ high scores. They can reward visitors with prizes. They can entertain children if parents want to bowl longer. They are a great draw for those looking to host a birthday party or event. And, the list goes on.
Here is how some bowling alley operators are cashing in by capitalizing on today’s trend of limitless entertainment and the demand for it.
“Putting in arcade games is one of the things we decided to do when we bought the center 10 years ago,” said John Dodd who, along with his wife Diana, , own and operate the Big Spring Bowl-A-Rama in Big Spring, Texas. He added, “They definitely enhance revenue. When we came back from several expos we realized they were the way to go.”
Yet, making a decision and investment requires taking an honest and practical look at your space and its configuration. “We have a few games, but we are a small center with only eight lanes,” said Laverne Goodrich, who manages Adrian Lanes in Adrian, Mo. “So, it is not a big source of revenue for us.”
“They are a good revenue stream for us,” said Dusty Nelson, manager of Nelson’s Strike Zone in Waupaca, Wis. “We don’t have a lot of them because of space, but the ones we have get played quite a bit.”
Where possible, though, other operators have moved to maximize arcade use. “We currently have a game room, which is right at our entryway,” said Kayla Johnson, manager of the Cedar Rapids Bowling Center in Cedar Rapids, Iowa. “But we are currently moving it to the other side and putting in a window to increase exposure so people will see it when the walk by.”
Debbie Widmar, a manager at Heritage Lanes in Oklahoma City, added, “We remodeled about a year ago, adding more games and did the whole nine yards as far as putting in fun cards, redemption, and a lot of new games.”
“Our five year plan 10 years ago was to get as much into our space as possible to maximize its use, including adding games,” said Dodd. “Finally we are talking to finance people to pursue this.”
Beyond space, industry experts agree that one of your first decisions is how to acquire them – that is, buying them outright or leasing them. Each has pros and cons. As Ernie Simmons, who manages Frontier Lanes in Stillwater, Okla., said, “Although we don’t do our own—they are on an outside vendor contract—I believe many others do own them and do redemption games so they get everything in terms of profit.”
Simmons added, “So buying your equipment outright is one option. The other, as I mentioned, is to lease or rent. This reduces risk and gives you more flexibility. Either way, you need to consider available financing options and what works for you. This could be for your initial machines or to expand what you have.”
It is nice if you can buy in or expand with internal resources, but financing gives you flexibility, helps you meet changing technology needs quickly and easily, and may offer some tax advantages on an ongoing basis in the form of operating expense write-offs. After all, it can cost from $5,000 to $7,000 per game so if you are planning to buy them it can add up quickly.
One things is common, though, “You need a mix of games to appeal to all ages,” said Simmons. “I personally even like to have a couple of older machines that maybe an adult might have played as a kid to appeal to them.”
Johnson agreed, and added, “It is essential that you not only have a good variety, but also keep it fresh by changing out machines periodically.”
The key is setting goals and planning. If you have space then you can decide what you want to do. The approach you take will depend, of course, on your goals and your financial situation. If you want, for example, to preserve your working capital, you might find leasing the way to go. But if you want to maximize your profit then maybe buying is right.
As Widmar stated, “Some lanes use a vendor, but our owner chose to not do that. We have a person who takes care of our games as far as things like maintenance.”
Regardless, today’s technology can help make it simple. “We use a card system, rather than coins or tokens, that is very good,” said Widmar. “I was actually surprised because I did some of the book work when we were setting up and I was worried about it being complicated and it was not. It was very simple as far as keeping track of all the games.”
Having machines can help smooth out the slow periods. “Naturally the summer is not quite as busy as the winter months, but we have programs like kids bowl free that runs from April to the first part of September,” said Widmar. “It has been very successful for us and the games help sell getting people to sign up for the program. It is for two games a day for kids aged four or five up to fifteen. Plus, once they are here, they might play the arcade games, too.”
“If you only have bowling, things will drop off during the warmer months; unless you have things for kids, it can really hurt you,” said Dodd.
Beyond just the excitement and fun of the game, many are being drawn in by getting something extra. “Normally in the past, people would play games and only experience the entertainment value,” said Kelly Williams, owner of South Branch Potomac Lanes in Moorefield, W.V. “But with our games they can get rewards.”
“With redemption games patrons can get some cool rewards—things like computer memory sticks, blue tooth speakers, or Amazon gift cards,” noted Nelson.
You may be asking yourself, “Why should I go through all this hassle?” Because if done right it, can be a money maker for you.
It can even help you leverage events to increase revenue throughout the year, both during the peak and slow periods. As Dodd said, “We do a lot of birthday parties. So for our redemption games assume you have 10 guests and you give the birthday child $10 in game tokens as part of the package. And, of course, the other kids want to play as well. So it adds up and is sometimes a savior to us. For each party, for example, we can get an extra $100 out of the redemption machines—sometimes more.”
In addition to the lanes and food and drink, it can make dollars and sense to expand your revenue streams. Not to mention the social aspects of robust operations. “With bowling, kids and adults actually put down their cell phones for a few minutes and interact and talk and share a single activity,” noted Dodd. “And arcade games are part of the draw that may get them to come in and enjoy the company of friends, family, and co-workers.”