Originally posted – Aug 26, 2014
For many self-service laundry owners, the coin-operated amusement industry may be an untapped business opportunity. Games and other arcade-style machines offer outstanding profit potential for store operators who are willing to pursue that particular opportunity.
After all, billions of dollars in gross sales are amassed annually by amusement machines based in locations across the U.S. Can you and your laundry business afford not to be a part of this multi-billion dollar industry?
“These machines can enhance the patron experience, increase customer loyalty and, of course, create additional income,” explained Chi Babich of Game Exchange of Colorado, based in Denver.
In fact, some laundry owners have reported that the percentage of revenue they receive is higher on their arcade games than it is on their traditional beverage and snack vending – reaching up to 60 percent on the arcade games.
Similar to the self-service laundry business, “location, location, location” is the key. What’s more, when choosing your gaming mix, be sure to offer the appropriate entertainment options for your specific customer base.
For example, at a family-oriented laundromat, it might prove most profitable to feature equipment that can be played and enjoyed by all family members, while excluding any violent or shooting games. Several laundry businesses have added to the value of their operations by including well-targeted amusement games to complement their vending options.
Typically, the amusement game operators will install and service the games and jukeboxes, as well as merchandise vending equipment. Of course, your income will be commensurate with your store traffic – and the profits generally are evenly split between you and the game company.
However, there is nothing for you to fix – all you need to supply are the floor space and the electricity to run the games. In addition, your amusement game supplier knows exactly what machines are currently popular and what games are seeing the most action – and they will want to get those games into locations where they’re going to produce.
Today’s Trends
The amusement and arcade game industry has continued to respond to the shifts in the economy and changes within the social environment by becoming more efficient in utilizing the latest technology.
For instance, the placement of products that use the internet to manage content and that offer “tournament play” has increased in recent years. In addition to game networking, what else is hot in the gaming industry?
There are a number of trends shaping the amusement industry these days, according to Jack Kelleher of the Amusement & Music Operators Association.
“One trend is an increase in ‘redemption-style’ equipment and games,” he noted. “In certain states, there are opportunities in adult redemption, where players can earn points or tickets that can be redeemed for merchandise prizes on-site.
“A second major trend is the renaissance in jukebox play. These days, the digital boxes – with access to hundreds of thousands of songs – are increasingly driven by patrons using mobile apps on their smartphones.”
A third trend Kelleher mentioned, although not likely something most self-service laundry owners would consider for their operations, is the continued expansion of legalized gaming.
“State treasuries are desperately searching for new sources of revenue,” he explained. “And, in some states, operator-run video gaming has arrived and is having an impact on the amusements industry.”
“Cranes games and instant prize redemption games are the best-earning machines for laundry facilities,” Babich added. “Many operators are placing a crane game with plush, a winner-every-time egg capsule game and a Side Box between them. The Side Box is an add-on for cranes, merchandisers and even bulk vending machines, which allow operators to vend keys that open a compartment. A strictly mechanical device, the Side Box can stock product sizes not supported by standard games and venders; keys that unlock a box permit redemption for high-end electronics, plush, sports equipment and ticket bundles. It adds a jackpot type of bonus to these games and greatly increases the revenue. The prize lockers are typically filled with prizes valued between $10 and $30 each.”
Babich continued that anything interactive that has a relatively small footprint is popular.
“Pinball machines and driving games probably lead the pack,” he said. “And the classics always seem to do well, as long as they are in good working order.”
Babich admitted that the vast improvement in home gaming equipment and even the proliferation of smartphones has impacted his industry.
“You don’t see as much in the line of traditional video games any more, since people can play a lot of those for free right on their devices,” he said. “Most games that work the best do not play well on a touchscreen or they are more interactive – like driving games, pinball machines, dance games, shooters and Skee-Ball, although some of those games have too large of a footprint for many laundry locations.”
Looking to the future, Babich thinks the next trend will be games that offer more of a social experience.
“Social interaction and competition are a natural combination,” he explained. “It will be fun to see what manufacturers can come up with in the next few years.”
To sum up, here’s a brief overview of the main amusement options today’s laundry owners have available to them:
• Redemption prize games, such as cranes, are very popular in self-service laundry locations. They’re simple to maintain and easy to play – and, because the player can receive a prize for playing, there is the perception of added value.
• Video games, especially golf games, have displayed tremendous staying power and have become somewhat of a pop culture phenomenon – specifically the tournament-style games discussed.
• Any of the touch-screen countertop games, which feature a sleek physical design and expanding content options, currently present one of the greatest opportunities in terms of customer and location bases.
• Pool and billiard tables also continue to grow in popularity year after year, affording a great, inexpensive medium for entertainment purposes. Of course, space limitations might be an issue with this option.
• Complementing these trends in the coin-operated game sector are the jukebox and the pinball machine, which are the foundation on which the industry was built. With home technology like Xbox and PlayStation, the arcade video games take somewhat of a backseat, because the graphics and technology are just so tremendous at home on your own television. Therefore, things like pinball become more popular – things that not a lot of people have at home.
• Children’s rides, similar to pinball machines, also have a retro appeal to today’s laundry customers. As much as they are vending machines and you can count the quarters once a week, they also are marketing tools. It’s a way to differentiate your business from the laundry down the street.
Best Practices
Clearly, to maximize your success, it’s important to keep your mix of games updated.
“Many operators make the mistake of putting in just any old games they have in the warehouse,” Babich said. “These games will not earn very well, since many of your customers can play similar games on their smartphones.”
Also, “winners make players” when it comes to your redemption games, Babich added.
“It’s important to make sure you are giving away prizes,” he noted. “When others see somebody win, they know that they too can win. In fact, it’s best to pay out 30 percent to 35 percent of the revenue generated in prizes.”
For instance, if the stuffed toys in your crane game cost 50 cents each and the game vends for 75 cents, you can pay out stuffed toys on a rather regular basis and still turn a decent profit. Plus, the winners will provide great public relations for your game and your overall business – let your customers’ kids do the advertising for you.
A common mistake many laundry owners make is positioning their arcade games toward the back of the store. Putting the games up front is a great way to get people into your laundromat. Again, it’s an effective advertisement.
Another pitfall to avoid, similar to your washers and dryers, is dirty or out-of-service equipment. You want to do some basic cleaning at least every night when you do the rest of your machines. You don’t want them to be sticky from kids’ fingers.
Also, be sure you’ve got plenty of room, so that your arcade games won’t interfere with people who are washing their clothes.
“Keep your machines clean and in good working order,” Babich advised. “Keep them in a place that is visible to the whole store – machines tucked away won’t get played as much and tend to get abused more often. And, lastly, rotate your non-redemption games with other ones at least twice a year so that they stay fresh; since many of your customers are in your store on a regular basis, it is important to keep them compelled to keep playing the machines every time they visit.”
Above all, keep it simple. Remember that you’re not an arcade operator, you’re a laundry owner.
As you can see, coin-operated arcade games and other amusement machines can offer a unique opportunity for laundry owners – with a wide variety of products, thus guaranteeing suitable options for virtually any self-service laundry location.
However, many operators within the laundry industry have yet to fully embrace this ancillary income niche market. Therefore, the potential for growth in this industry is strong.
A good way to touch base and begin networking with those in the amusement industry is to contact either the Amusement & Music Operators Association ( 800/937-2662 ; amoa.com) to find a professional amusement operator in your area, or to reach out to an industry state association to source one.
“Not all states have industry associations,” Kelleher admitted. “However, an alternative would be to contact other locations in your area – truck stops, bars, family entertainment centers, bowling alleys, etc. – to find out the name of their amusement company. These amusement operators can set up a laundry business with the right equipment and take care of any servicing issues.”
In addition, the amusement industry’s trade show is a great resource for learning about the business and finding operators.
“For those interested in learning first-hand about the trends in the coin-op games arena, the Amusement Expo is the ‘one-stop shop’ for the commercial amusement and games industry,” Kelleher said.
The next Amusement Expo will be held March 24-26, 2015 at the Las Vegas Convention Center. This annual event for the coin-operated and revenue-generating amusement, music and family entertainment industry features a three-day program – one day of education and two days of exhibits.
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