In an article featured in
1UP magazine, author, Matt Leone discusses the current U.S. arcade industry and asks "why is the industry underperforming?"
Mr Leone said that although the problems facing the arcade industry are hardly new, now is the first time in the industry's history that all of the top amusement game companies - Sega, Namco, Midway, Capcom, Konami - have all shown tremendous signs of weakness.
He said that when 1UP posed the question of "why" to the industry, they found numerous reasons for the decline and also, some positive signs for the future.
Reasons for the decline included the suggestion that the quality and quantity of home games has surpassed that of arcade counterparts, the idea that some arcade games were not designed for the U.S. market and the proposal that some arcade games are now too complex.
Steve White, editor of trade-focused RePlay Magazine, reasons that the arcade industry "is much diminished in large part because the quality and quantity of home videos have equaled and then surpassed [that of their arcade counterparts]."
The quality issue is a subjective one; few would deny that games like F-Zero AX and Soul Calibur II are well made, but technologically, arcade games are now on an even playing field with their home counterparts. It used to be true that arcade games had more powerful hardware, and that conversions of games to home systems could never achieve "true arcade quality." These days, much of the hardware used in arcade games is based directly on the popular home systems, with minor alterations.
As home games make more and more money (seven billion in 2003, according to The ESA), arcades take the hit in a few ways. It's clear that developers that make games for both consoles and arcades are allotting more resources to where the money is. This, unfortunately, leaves fewer people to work on new arcade titles.
Milind Bharvirkhar, CEO of manufacturer Global VR, agrees that coin-op "didn't stay with the pace of the home industry," but also adds that part of the problems in the U.S. stem from the games being designed for a different market. "80 percent of coin-op has been Japanese, and the Japanese companies have designed for their marketplace," he says.
This opinion is not surprising coming from Bharvirkhar, as he heads a company focused on porting American PC games to arcades. Regardless, many big name titles do perform better in other markets. Virtua Fighter 4 was one of the biggest hits in Japan in 2001 and 2002, but the game made an insignificant impact on these shores. Others, like Guilty Gear XX and Virtua Striker, were also successful in Japan and went by more or less unnoticed in the U.S. With Midway out of the picture now, there are few titles in development specifically for the U.S. market -- most of the well-known developers are based out of Japan and really only develop for their home territory.
Games designed for the Japanese market tend to create player communities in Japan that the U.S. does not have the number of players to match. Avid Virtua Fighter player Eric Chung is disappointed that the U.S. doesn't have the same social scene surrounding games like Virtua Fighter. "The arcade culture in the States is almost non-existent," he says. "Few people will practice games at home and look for competition in the arcade."
The article goes on to discuss new trends in the industry that could have a positive impact in the future such as the formation of player communities, increasing player interactivity and placing the machines in different locations.
One of the most recent trends in the arcade industry manufacturers putting an emphasis on the social element of games. In the past, competitive and cooperative titles existed, but there wasn't anything included in the actual games to help form communities around them.
These days, Sega has titles like Initial D, a racing game that encourages competitive play by letting players save and upgrade their cars using special memory cards, and Derby Owners Club, which is set up for eight players to compete simultaneously in horse races. Derby Owners Club even has extra wide benches next to each of the eight game stations so players can sit next to their spectator friends, further extending the social element.
Sega Amusement's Director of Marketing, Pete Gustafson, says, "I've been in the business for 24 years and Derby Owners Club is the best game I've ever seen. It's still out there churning giant earnings wherever it goes. We've got over 50 installed right now and expect that number to grow dramatically in the very near future." That number may seem low, and it would be very low for a traditional game, but for a title that costs upwards of $100,000, that number of units makes it a strong cult success.
Beyond Sega's games, manufacturers Incredible Technologies and GlobalVR have had success in recent years focusing on a different type of social experience: online play. The two companies have competing arcade golf games - Golden Tee Golf and PGA Tour Golf - that both focus on online tournaments where players can win money and prizes on a national level.
"Online systems at home have some limitations," says GlobalVR CEO Milind Bharvirkar. "There's no social aspect A, and B, there are no money tournaments. We allow players to compete for money… We understand the value of a player community. They feel like gaming has now turned into a sport for them."
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