What happened to the coin-op videogame industry?

January 26, 2006 11:42 AM

What exactly happened to the coin-op videogame industry?

I've been doing some research, and can find a lot of interesting first-person accounts of the video game crash of the 80s. But all these accounts focus on the dynamics of console and PC games, with no clear explanation of why coin-op videogames went away.

I'm wondering if anyone has any personal insight as to what happened, or where to turn to, for research. Ideally, I'm looking for actual numbers ... how many quarters did we spend back then?

posted by cloudscratcher to media & arts (25 comments total)

G4's Icon series had an episode about Arcade games. I saw it a while ago so I don't remember specifics, but if you can get your hands on a copy of that episode, it gives a pretty good narrative of the rise and fall of arcade gaming.
posted by camcgee at 12:00 PM on January 26, 2006

There are the beginnings of a timeline of video game history here. It contains some information on amounts of revenue.
posted by ND¢ at 12:04 PM on January 26, 2006

Some numbers:

North America revenue from video games was estimated at $5million at the peak of 1981, but by 1983 it had plummeted to $3million. It was a market that quickly lost business and consumer confidence.

“Williams suffered greatly in the crash. Floods of cheap videogames were dumped on the market, and the much heralded laser disc revolution of prerecorded track-switching games bombed."

By contrast, note from your link that Ataris sales in 1982 were $2billion.
posted by smackfu at 12:04 PM on January 26, 2006

Consoles started to rock instead of suck, basically. After which point the economics of the system (which had been shaky to begin with) ceased to make any sense.

I still think fighting games belong in the arcade, but wishes and horses and all that.
posted by selfnoise at 12:05 PM on January 26, 2006

Oops, I think I read something wrong there. It's still an interesting read but I'm not sure what exactly those revenue figures represent. They are vastly too low to be industry totals.
posted by smackfu at 12:07 PM on January 26, 2006

get on over to rec.games.video.arcade.collecting and read up. Do a search on history or crash and you'll see lots of posts talking about several factors that contributed.
posted by cosmicbandito at 12:08 PM on January 26, 2006

I actually wrote a term paper on this topic based around a case study of Midway (the class was called The History of Video Game Design - awesome, I know). Midway built its empire with coin-op success with games like NBA Jam and what-not, but their business dynamics have changed. Some scattered points I remember from interviews I conducted with execs at EA and Midway:

-Successful arcade games are generally "couch multiplayer games", games that are mainly fun to play with your friends in the room so you can beat each other, trash talk, show off, etc. This style of gaming has declined because gaming in general has become a more solitary experience - more people own a new system than did in the earlier days, so there's less need to gather at one person's house just because he's the cool kid on the street who has the system. The console technology spreads as the prices drop (the Neo-Geo was like $700 at release) and social acceptance of gamers grows.

-This also means that a (much) bigger share of the market goes to home games, so studios have incentive to design games that cater to the solitary armchair-bound experience.

-The growth of PC gaming has also contributed to this, particularly online multiplayer gaming (which also applies to X-Box Live et al). Playing PC games in person with friends is a pain in the ass, requiring you to either share a keyboard or bring a second tower over and hook everything up. People prefer to just play online, and the market has shown that NBA Jam, Street Fighter type games (high-octane, short, simple, throwaway fun), don't play as well in this environment. Additionally, PC games are generally more sophisticated, if not in graphics than certainly in control scheme, and as gamers get acclimated to that, they demand more complexity from their console games (have you played Madden lately? It's insanely complicated). Complicated games don't make good arcade games. They have a steep learning curve, require a big time investment, and are not fun for others to watch. With the exception of graphics, realism is the enemy of a good arcade experience.

-In the old days, home console technology was way worse, so you could get a better game experience in the arcade, whether it was the controls (joystick, more buttons, etc.) or the processing power (better graphics). Same phenomenon as how the drop in price of nice TVs coupled with the advent of DVDs has coincided with a box office slump. The home experience is catching up.

-The average age of gamers is increasing. Arcades are targeted at pre-adolescent and young adolescent types, and don't suit older gamers well. Older gamers are more likely to have lots of homework, a full-time job, a girlfriend, an infant child, and all sorts of other lifestyle differences that make them less able to go play Street Fighter II at the local pizza place after school.

-There's a certain mission creep in the video game industry. As technology continuously improves, game studios feel pressure to pack in new feature and complexity to make use of it, so games move further and further from being arcade-ready. People would feel cheated if Midway just kept releasing a new, more colorful Tecmo Bowl with the same basic controls. The result is games like Madden that require hours and hours of practice and study to get good at. They can't justify spending more to buy what is essentially the same game they already have, with very few exceptions - this applies to arcade owners as well as console gamers.

To summarize: more people have consoles, fewer people play games in person with their friends, consoles are better, people have their attitudes changed by PC games, and, for a number of reasons, games have become less fun to play in the arcade.

When I get home (at work now... :) ), I'll try to dig up my old notes to get you some statistics and quotes from folks in the industry who can explain it more succinctly than I can. I think it's a fascinating phenomenon, glad you asked the question.
posted by TunnelArmr at 12:12 PM on January 26, 2006

Also, it turns out the course website for that class is still up, and it has a Library section that might have some useful resources.
posted by TunnelArmr at 12:13 PM on January 26, 2006

Coin-op videogames didn't exactly go away; you can still find them, but they're nearly all of the racing/shooting variety and involve special equipment you can't easily reproduce in a home setting (you can't exactly buy a jetski replica for use on a home console jetski racing game). A trip to a nearby Dave & Busters will confirm this.
posted by chrominance at 12:25 PM on January 26, 2006

I remember reading a book on the history of video games, I apologize for not remembering which one, but the author's claim was that video game arcades acquired the reputation of being seedy time wasters where juvenile delinquents hung out. Apparently this reputation gained traction and parents began to refuse to fund their kid's arcade trips. At the same time, arcades began disappearing from malls as they were perceived as undesirable tenants. This moral aspect, combined with other economic factors, was the death knell for the arcade. Some googling on the subject turns up a paper titled, "Moral Panics Over Youth Culture and Video Games," which might be of interest to you.

(By the way, there's a great "Retro Arcade" photoset on Flickr).
posted by Otis at 12:36 PM on January 26, 2006

It's all about the quarter.

The cost of buying arcade cabinets has increased as technology became more complex over the years, as has the cost of electricity and floor space to keep them running, but that cost was never accurately reflected in increase in cost for playing them with either quarters or tokens. People were and still are reluctant to put a dollar in an arcade game.

The only thing that stopped it from happening sooner was the Street Fighter II phenomenon, which achieved the optimal formula for maintaining a steady pace of quarters being dumped into the machine since at least one of the two players was eliminated in no more than 4.5 minutes and usually considerably less. Since then most other games (racing for example) have been sure to follow that model. Gone are the days when someone could play a game for 10-15 minutes on one quarter.

There is also the factor that arcades were forced to shut down when they were near schools, the rise of the Nintendo and other home entertainment systems and the improvements in videocards for computers that made a huge difference.

I wish I had links to back this all up, but I'm not pulling it out of my ass, these things are well known in the industry.
posted by furtive at 1:07 PM on January 26, 2006

I kind of thought that it was part of the "family friendly" revolution. Several local pizza joints used to have fairly decent sized arcade sections set up. They were dimly lit, and were great for spending afterschool hours.
They were the first things to go in the "Let's make everything big & bright and family friendly" revolution. Pizza joints became brightly lit places.
Chuck E Cheese used to have an entire floor with nothing but video games. Those days are gone.

(At least, that was my experience.)
posted by drstein at 2:08 PM on January 26, 2006

I think furtive is on to something. Games that can be played for a quarter just aren't made anymore. Outdoing home systems isn't possible on a software level anymore- it requires hardware "chrome" like seats, speakers, life-size controls, big screens, etc. All of those require much more capital to produce.

I remember when my local mall arcade (in the late 80's- oh yeah, baby) had ONE "big" game that cost maybe a buck to play. It was typically something that moved you around in your cockpit a bit. Now, a dollar is the norm, and some games (at least here in Manhattan) cost several dollars to play.
posted by mkultra at 2:22 PM on January 26, 2006

To summarize what several other posters have said:
1. Inflation. People think games should only cost a quarter, but when the price for a new game goes from $2000 to $5000, you have to start charging more per game.

2. Home consoles. When parents realized they could spend $100 once rather than $10 every weekend on junior's pacman habit, they jumped at the chance.

3. Societal backlash against arcades. They were a big draw for the annoying teenage demographic. Nobody wanted an arcade near their home or business or school. Once arcades started dying off, it was harder to get liscenses, because city councils saw them as short term businesses that were likely to fail. Also, we all know how games like "Death Race 2000" affect our youth.

4. Stagnation. Games prior to about 1984 usually had their own unique controls and fresh theme. With the introduction of the JAMMA standard as a cost saving measure, games started having similar controls and themes. Once you've played one vertical shooter with 2 buttons and an 8 way stick, you're pretty much played them all.

5. Overall changes in game design. Games like Legend of Zelda, which took hours of gameplay to beat and let you save your progress, allowed people to get much more immersed in the story of a game. Your average 2.5 minute game of "asteroids", not so much.

6. Bootlegging and pirated games. This one is hard to data on, but there were a HUGE number of bootleg game boards floating around. It's hard to compete with somebody who has no R&D costs. Somewhere on the web is an interesting story about how Atari engineers designed one of their boards to interact with an AM radio at a certain frequency so they could test the legitimacy of boards from outside the cabinet. Genuine boards played some sort of noise on the radio, bootlegs didn't.
posted by cosmicbandito at 2:30 PM on January 26, 2006

Man, I miss the arcade. It was like the bar, but for kids. It was dark, it had seedy characters, and it even had happy hour. Triple Token Day on Thursday was the highlight of my week. Then the Nintendo Entertainment System came along and started screwing everything up.
posted by jasondigitized at 3:01 PM on January 26, 2006

mefi, I love you. These are insightful and interesting answers.

If anyone else has any additional numbers, I'd be interested, but thanks much to everyone above.
posted by cloudscratcher at 3:31 PM on January 26, 2006

It seems to me that most of the causes that have been cited here (better consoles, PC gaming, older gamers, more expensive or standardized arcade equipment) came long after the crash, not before it. The big contraction in the arcade business was around 1984, at which time none of these things had happened yet.
posted by jjg at 3:33 PM on January 26, 2006

as a followup to my post about the game that broadcast signals to a radio as a form of copyright protection, here's a brief write up on it from the engineer who designed it.
Look under the heading
dsk board
posted by cosmicbandito at 4:51 PM on January 26, 2006

Once arcades started dying off, it was harder to get liscenses, because city councils saw them as short term businesses that were likely to fail.

Around 1990 I used to hang out in a comic store in Toronto (North York, technically, I think it was called Shooting Star) that would literally unplug cabinets so that they wouldn't be violating a two machine limit put on by some authority or other - invariably, Friday afternoon when the new comics came, they would all be turned on - it was very silly.
posted by Chuckles at 5:00 PM on January 26, 2006

There are several video game history books that I would reccomend reading if you would really like to know about the numerous death knells and revivals in video game history. I dont have specific titles because I've read most all I could get my hands on and they are all interesting, some are more in depth with the behind the scenes drama. The best ones start out around the turn of the century with the midways. Anything at the library and sometime the stray book at EB for $5.
posted by psychobum at 5:07 PM on January 26, 2006

Walking around downtown Kyoto last year, I found four 6-story arcades. Each of them had a floor of pachinko, a floor of purikura "Print Club" machines (you stand in front of a blue screen, have your picture superimposed in front of Pikachu or some boy band du jour, and printed out on stickers), and a floor of grab-the-toy-with-the-claw machines, but that still leaves buttloads of cool new games. In short, arcade games aren't gone gone, they're just gone from the US.


What input devices did I see in these four arcades?
-- Kettle drum game
-- Conga drum game
-- Full drum set game (which I've now seen in the US)
-- Firehose (you're a firefighter)
-- keyboard, in a typing version of House of the Damned, I shit you not
-- leash + treadmill, in a dog-walking game !!!

The weirdest, though, was a "two comedians on stage at a county fair" game. You watch them on screen, while standing next to a mannequin. Periodically, you chastise the mannequin by punching him in the face or bashing him upside the head; these actions are reflected on-screen. If I knew Japanese I could tell you more about it.
posted by Aknaton at 5:18 PM on January 26, 2006

Video game arcades have all but fallen off the map in the States, but they're still quite popular in Japan.
posted by zardoz at 5:22 PM on January 26, 2006

furtive writes "Gone are the days when someone could play a game for 10-15 minutes on one quarter. "

Or hours, I can't remember how long it took to roll over Pac-Man but it was a long, long time.
posted by Mitheral at 6:32 PM on January 26, 2006

I'll admit that the arcade landscape in the United States is mighty bleak, but they aren't quite extinct.
posted by John Smallberries at 7:01 PM on January 26, 2006

Yeah in the U.S., you can still find a Centipede or Galaga machine tucked away in the corner of a laundromat somewhere (here's a good list of locations). And places like Gameworks and Dave & Busters will have a "greatest hits" cabinet out on the floor to cater to us aging 30 somethings. The classic arcade mecca seems to be Fun Spot in New Hampshire (you can see their game list here). I hope to make it there someday.

During the heyday of the arcade, even the tiny podunk town where I grew up had TWO arcades, where a buck or two could keep you out of the house all night.

And Mitheral, the world record time for a 'perfect' Pac Man game (according to Twin Galaxies) is three hours and forty two minutes.

sorry for coming off all Grampa Simpson here. This is a topic that is near and dear to me.
posted by Otis at 6:14 AM on January 27, 2006