How to start your own arcade and retro-gaming bar

Gaming and social interaction is starting to come back into trend.

With the death of the British pub, drinking venues are starting to adapt their focus to a younger crowd.

Unlike the pubs of yesteryear, these new pubs are not focusing on the selling of alcohol or food as a main attraction; the millennial crowd see pubs as a social gathering and place to interact. Alcohol is more of a complimentary factor when socialising, not the defining one.

These new bars, mainly centered on larger cities, merge both of these propositions to their target market. These bars are aligned towards young city professionals, with a high disposable income who want something different from their weekend/weeknight entertainment with their group of friends.

With the creation of high-demand bars such as table tennis-themed Bounce, crazy golf for adults from Swingers and Flight Club – the Startups-100 top ten darts bar – the time to get involved in the retro-gaming bar craze is now.

If you want to start our own retro-arcade bar, properly assessing the start-up costs, location, licensing requirements (if you are starting a new bar), and marketing strategy right from the start can set you up for success.

Below are five top tips on how to achieve your vision for a retro gaming bar:

1. Setting up an arcade bar

Assuming you do not have a bar or premises selected, you will need to create your bar offering as the first part of your business strategy. Although not a primary factor, it is still part of the core offering to your target market.

When setting up a bar you need to focus on physical assets such as: high footfall premises, shop fitting, alcohol license, gambling license, staff, brewery, and suppliers to name but a few.

Read our five simple steps to starting a bar here. 

Once you have covered (and costed) all of the above, you should have a good idea of how much it would cost to setup your bar. One of the key success drivers would be location, as you need to ensure your bar is setup in an area of high demand for your target market with a high enough disposable income and appetite for what you offer.

You also need to decide on what your bar will serve drink-wise. This is key to enticing your customer base to try your new bar. A lot of this will fall to research and align around your core demographic and socio-economic factors – fresh cocktails, craft beer or non-alcoholic drink selections.

To understand the above therefore it is essential as part of your business planning to carry out market research to understand if there is a demand for your product within your chosen location.

2. Arcade bar market research and competitor analysis

If you build it, they will come. This unfortunately is not the case; you could create the best bar in a city location but if the product is not aligned correctly with your target market or you have setup your bar in an area of low demand then success will be harder to achieve.

Therefore, it is essential to understand who your target market are and who are your main competitors.

What are they offering as part of their value proposition, do you target the same customer base? These are points that you need to explore before setting up a bar.

Like the bar setup, location is key. You want to set up in an area where there is demand and a healthy base of similar/competitor offerings aligned to your core target market. Setting up in an area where there is no competition can sound like a great idea, but usually there is no offering as there is no demand for the product or service that you offer. Therefore, for new start-ups in this industry it is better to follow the crowd and set up in an area where there is already an established demand.

A lot of this research can be desk-based, but if you get out into the field you can start holding focus groups and surveying your potential customer base in shortlisted locations, getting primary data to be able to craft a product offering around your target market.

It is also a great way to target competitor’s customer base and find out what about the current providers they do not like, what stops them from going back or annoys them. This can be a great way to define a value proposition that provides an enhanced customer experience.

3. Arcade bar focus and theme

Unless you had preconceived notions and a passion related to your bar theme, a lot of the analysis above will formulate your theme of your bar.

This is your primary revenue driver and want will contribute to success, by differentiating you within the industry and giving you a unique selling point (USP) over your competitors, this could be a tweak, reframe or refocus on another successful USP aligned towards your bar.

A primary factor is to decide what gaming you want your bar to focus on – do you want to be a niche focused bar offering only one entertainment option or would you want your bar to focus on a wide range of games around a particular theme?

By following a trend and analysing successful competitors operating in the space, you may decide on installing traditional bar games such as pool tables and snooker, or even air hockey or shuffleboard tables. This would create a different proposition to your core target market.

Or you may decide on creating a retro gaming arcade bar as they are popular in cities nationwide, with a mix of modern and retro gaming systems for your customers to enjoy while on their night out.

Once you decide on your bar focus you need to ensure that the bar is themed correctly. This is key for your clientele as they will expect the whole experience to be aligned correctly. So if you focus on retro arcade gaming your bar needs to be retro themed and so on.

This may seem like a bit of an esoteric point to bring up, but having a consistent theme and atmosphere throughout your bar ensures that your customers both feel welcome and are interactive throughout all your premises, which causes customers to return.

There is no right or wrong answer when deciding on what gaming focus you want your bar to portray and many times it is down to personal preference, passion and market research to pick the correct focus.

4. Arcade bar supplier selection

After you have chosen the gaming focus for your bar you need to locate trust worthy and reputable suppliers to fit out your premises.

Dependent on your theme, you may find that there are not a wide range of suppliers available to provide the products you need for your gaming bar. Products such as dartboards are readily available from a variety of sellers online and on the high-street, whereas pool tables, pinball and retro gaming machines are more specialist.

When choosing a specialist gaming product supplier there are a few things to pay close attention to:

• Are they credible and trust worthy?
• Are they UK based?
• Can they deliver and install in my location?
• Are their arcade machines up-scaled – not just pre-owned?
• What is their customer support like?
• Do they have a showroom?
• Can I lease the equipment?
• Do they just stock one type of equipment?
• Do they offer a repair service or after-care?

5. Arcade bar finance and start-up costs

Setting up a gaming bar, dependent on your theme, location and target market can be costly, so it is key to keep costs as low as possible until the business is capable of generating revenue after 12 months of trading.

Specialist gaming equipment such as arcade machines, shuffleboard tables and pinball machines can be an unwanted high upfront cost so one thing to keep in mind is: could you benefit from leasing the machinery required to be able to deliver your value proposition?

These fixed assets are required to be able to create your product and therefore are essential to your bars success. However, as a new business, it is always a good idea to lower your initial capital cost as much as possible.

It is also worth investigating whether a small business loan will help cover these costs as well as some of the bar setup requirements, as this can often help raise capital for your fledgling business and ease some of the cash problems often encountered during the start-up phase.

Finally, insurance for your specialist equipment will need to be considered as well, especially depending on what condition you acquire your machines in. Whilst vintage machines from the 80s will bring back fond memories for punters, these may also cost more to insure due to their age, condition and rarity as well. So this is something that you’ll need to add to your costs in your business plan to ensure that everything is properly costed out before you make any purchases and get started with running your arcade bar.

As you can see, as with any other business start-ups there are key things to note when going through this process. A lot of the above points would be developed further in your business plan, which is why it is essential to create a business plan before you even start to think about a new venture.

Business planning is not only important to define your business strategy, processes and objectives, it is also a key document laying out your entire business model, which again is key in attracting investors or securing bank finance to be able to make your new start-up a reality.