Slowing Growth in the Amusement Arcade Industry

Slowing growth is a challenge many amusement arcades face, especially in a competitive market with changing consumer preferences and external factors such as economic downturns. To turn around slowing growth, it’s essential to take a strategic approach that focuses on innovation, efficiency, customer experience, and new revenue opportunities.

Here are some strategies to combat slowing growth and boost your arcade business:

1. Diversify Your Offerings

Strategy: Introduce new games, entertainment options, and experiences to keep your arcade fresh and appealing to a broad audience.

Solutions:

• New Games & Experiences: Regularly update your game collection with the latest technology, like virtual reality (VR) or augmented reality (AR) games. This will attract tech-savvy customers and provide a unique offering that sets you apart from competitors.

• Interactive & Immersive Attractions: Create a more immersive experience with VR stations, escape rooms, or themed game areas. These types of attractions tend to attract both casual and serious gamers.

• E-Sports Tournaments: Tap into the growing interest in e-sports by hosting tournaments or competitions for popular games. This will attract competitive players and spectators, driving footfall and creating buzz.

2. Focus on Customer Experience

Strategy: Enhancing the overall customer experience can encourage repeat visits, positive reviews, and word-of-mouth promotion.

Solutions:

• Personalised Experiences: Use loyalty programs or customer accounts to offer personalised recommendations, rewards, and promotions. Tailoring experiences to individual preferences can help build customer loyalty.

• Engagement and Customer Interaction: Ensure your staff is friendly, approachable, and ready to assist. In-person interactions should be engaging, creating an environment where customers feel valued.

• In-Store Atmosphere: Revamp the arcade’s atmosphere with music, lighting, and clean, vibrant spaces. The overall vibe of your arcade should be welcoming and fun, enhancing the experience for both kids and adults.

3. Improve Marketing and Branding

Strategy: Strengthen your marketing efforts to increase visibility, reach new customers, and re-engage previous ones.

Solutions:

• Targeted Marketing Campaigns: Focus on digital marketing with social media ads, influencer collaborations, and local SEO to increase visibility among a targeted audience. Use compelling offers and promotions to attract new customers.

• Email Campaigns: Regularly send out email newsletters with updates, promotions, and upcoming events. Encourage sign-ups by offering a first-time visit discount or a freebie to increase your email list.

• Community Involvement: Engage with your local community through partnerships, sponsorships, or charity events. This not only increases footfall but also fosters goodwill and brand loyalty.

4. Maximise Revenue Streams

Strategy: Explore additional revenue opportunities to offset slower periods and increase profitability.

Solutions:

• Corporate Bookings: Offer corporate event packages for team-building or office parties. Many businesses are looking for unique ways to engage employees, and arcades can provide an excellent environment for this.

• Private Parties & Birthday Packages: Specialised birthday party packages can generate significant revenue, especially during off-peak times. Create bundles that include games, food, and exclusive access to certain areas.

• Food and Beverage: If your arcade doesn’t already have a café or snack bar, consider adding one. Offering food and drink will encourage customers to stay longer and generate additional income.

5. Enhance Customer Retention and Loyalty

Strategy: Focus on keeping existing customers loyal while attracting new ones. Customer retention is often more cost-effective than acquiring new clients.

Solutions:

• Loyalty Programs: Implement a loyalty program that rewards customers with points for every purchase or game played. This incentivises repeat visits and helps boost customer lifetime value.

• Referral Programs: Offer incentives for customers who refer friends or family. Word-of-mouth marketing can be incredibly effective, especially when the incentive is appealing.

• Exclusive Events: Host exclusive events or VIP nights for loyal customers. These can include early access to new games, special discounts, or members-only tournaments.

6. Use Data Analytics to Optimise Operations

Strategy: Leverage data to identify growth opportunities, streamline operations, and better understand customer preferences.

Solutions:

• Track Customer Behaviour: Use customer data to understand which games are the most popular, what times are busiest, and which customer segments frequent your arcade the most. Use this information to improve game selection and optimise staffing.

• Pricing Strategy: Implement dynamic pricing to adjust prices during peak and off-peak times. Offering discounts or promotions during slow hours can help balance footfall.

• Operational Efficiency: Use data to identify areas where you can cut costs, such as energy consumption, maintenance schedules, and staff efficiency. Streamlining these operations can boost overall profitability.

7. Explore Alternative Revenue Channels

Strategy: Expand your business beyond traditional gaming to tap into other sources of income.

Solutions:

• Online Store: Sell branded merchandise, gift cards, or game-related products on your website or in-store. This provides additional revenue while also helping with brand visibility.

• Game Rental: Consider offering game rentals or video game consoles for people to use at home. This can cater to a new customer segment who enjoys gaming but prefers staying in.

• Mobile App: Develop a mobile app where customers can track their points, access exclusive deals, and engage with your arcade virtually. The app can also offer a booking feature, encouraging pre-booked visits.

8. Keep an Eye on Industry Trends

Strategy: Stay ahead of industry trends to maintain relevance in the market.

Solutions:

• Technological Innovations: Implement the latest gaming technology, such as AR/VR, and interactive gaming stations. Offering cutting-edge entertainment can keep your arcade competitive.

• Sustainability: Consider eco-friendly initiatives, such as energy-efficient machines or waste reduction strategies. Many customers appreciate businesses that are environmentally conscious.

• Health & Safety Standards: Especially post-pandemic, ensuring high health and safety standards can be a key selling point for your customers. Cleanliness and safety protocols should be highlighted in your marketing.

9. Conduct Regular Market Research

Strategy: Continuously assess market trends, customer needs, and competitor activities to keep your arcade in line with current demands.

Solutions:

• Surveys and Feedback: Regularly ask your customers for feedback via surveys or in-person interactions. This will help you understand their preferences, identify areas for improvement, and discover new ways to attract them.

• Competitor Analysis: Monitor your competitors to stay aware of what they’re offering and how they’re performing. Use this information to differentiate your business and find opportunities that they may have overlooked.

Conclusion

Slowing growth in the amusement arcade industry can be tackled by diversifying your offerings, improving the customer experience, optimising operations, and exploring new revenue streams. By adapting to industry trends, using customer data, and continuously engaging with your audience, your arcade can overcome growth challenges and continue to thrive in a competitive environment.

To help control costs, Perfec360 includes a food inventory tool that tracks stock levels and best-before dates. If an item is nearing expiry, the system automatically runs a promotion—reducing waste and maximising profit.

With automated processes, personalised promotions, and seamless service, you can drive customer engagement, increase footfall, and accelerate growth—keeping your business thriving even in competitive conditions.