From: berger@atropa (Mike Berger)
Subject: Re: How to return games to active service...
Organization: University of Illinois at Urbana
Date: Thu, 17 Dec 1992 16:35:12 GMT

Gregg Woodcock <woodcock@bnr.ca> writes:
>I have started to collect some of my favorite old arcade games and
>have often wondered about returning them to active duty.  I did some
>calling and in Texas it seems that on top of registering your business
>(about $5) with the state, you have to register the company as a vending
>company with the comptroller in Austin ($500-$600) and you also have
>to register *EACH GAME* with both the county ($40) and the state
>($60).  This is ridiculous; no wonder arcades are dropping like S&L's!
>I have no info on how often you pay these fees (forgot to ask) but I
>assume the last 2 are annual fees.  I don't even think any of my games
>could pull $100 each in profit in a year!!!  What is the situation
>like for other states?  I had dreams about becoming a vending company
*----
It's similar in most localities in Illinois.  It's a highly regulated
industry because of its nature:  There's a lot of cash involved.
Some localities allow "floating licenses" - you need enough to cover
the games in actual operation at any given time.  Others require that
decals be affixed to the machines, so you need a separate license for
any machine that might be in service, even as a substitute, for just a day.

It's not cheap to start up.  But that's why most of the operators don't
mess with games more than a couple of years old (or relegate them to
7-11's).  The take falls drastically after the novelty has worn off.
And maintenance problems increase.  It's also why game rental has
become far more popular.  If your good games can't pull in $ 100 a
week, you have a problem with your location or choice of games.  If
you don't think they'll pull $ 100/year collectively, then it's a
hobby, not a business.

>Also, what is the arrangement of the vender and the proprietor who has
>the game on his property.  The few people I have asked have said they
>go 50/50 for videogames (which seems fair; the vendor pays for the
>wear-and-tear and the proprietor pays for the electricity and
>survailence).  Is that the case most places?
*----
The most common deal around here is a 50/50 split on the take.  The
operator supplies the machine and performs routine maintenance (parts
are split 50/50 too).  The location takes care of placement and
security (the incentive is provided by the parts cost split).  Repairs
are a hot issue.  If the machine is broken, both location and operator
suffer.  The operator might have other priorities besides the one
machine, but the location doesn't.  I've seen quite a few "if you
can't fix it by this afternoon, then get it out of here" threats.
So it can be a real headache.

Unless you're a big operation and can afford to keep the latest games
on hand along with an extra jukebox or two, you might not be in an
ideal location to operate games professionally.  The small time
operations that make money generally seem to require an owner with
a lot of time and expertise (if you can't fix the machines yourself,
you'll be seriously handicapped and raise your costs significantly).
You have to be able to go on location at short notice, and you'd
better have the equipment (dollies, truck) to haul the games!  You'll
need warehouse space (they can't ALL be in service, and you'll need
a spare or two) and shop space.

Finally, you'll face a lot of competition.  If you're lucky, you can
target the small locations that the big operators don't want to mess
with.  For the more prime locations, you just can't offer a better
deal.

Good luck.  I do know several people who have successfully added to their
income as small time operators.  If you know all the pitfalls, you might
be able to make it work.  Don't even think about operating unlicensed
machines.  You can lose your whole inventory that way!
--
	Mike Berger
	Internet    berger@atropa.stat.uiuc.edu
Newsgroups: alt.games.video.classic