Industry sector: Leisure

Amusement arcade: Market research

Estimating demand

If you're planning to set up your arcade from scratch - rather than buying an established arcade that already has a good level of income from its existing customers - it's very important to find out whether there is enough demand in your area. People only have a certain amount of money to spend on leisure activities such as playing machines so it's essential to think about why people will come to your arcade. It might be that you think there is a demand that is currently not being met. For example, a newly developed tourist facility might be attracting lots of holidaymakers but there are as yet few other leisure businesses operating in the area.

It's important to give some thought to who your customers are likely to be. In a seaside type of location it's likely there will be lots of families so you may choose to offer a range of low prize gaming machines, redemption machines, kiddie rides and video games that can be enjoyed by all age groups. On the other hand, if you were planning to set up an adult gaming centre you would need to install high prize-paying machines that would appeal to adults who are regular machine players. If your arcade will offer gaming machines mostly or exclusively, it's also very important to check out the overall level of demand for arcade machine gambling. In recent years the higher stake, higher prizes machines that betting shops and other gambling premises can offer (but not arcades) have become very popular, as has online gambling.

Have a good look at any existing arcades in your area to establish:

  • their opening hours
  • how busy they are at different times of the day
  • the types of customer they are targeting
  • the range and number of machines they have
  • the appearance of the premises - is it modern and bright?
  • any other services and attractions they offer

Check out future developments

The location of the arcade is very important and ideally there will be lots of passing trade (unless you're planning to add an arcade to an existing business such as a caravan site, in which case the majority of your customers will be on site already). If you are planning to locate in a seaside area, try to find out the local council's plans for the future - sadly many British seaside resorts have become less popular than they were previously and the viability of your business will be affected by how successful your council is in attracting holidaymakers. Think about the local wet weather attractions that might bring visitors to your area even during poor weather conditions. Your council or local tourist information office may be able to give you visitor statistics for your area and there are regional tourist statistics for the whole of Great Britain available to download from the Visit Britain website.

Planning permission

One of the first things to do is to approach your local authority planning department to find out as much as possible about successfully obtaining consent to open and operate your arcade. The British Amusement Catering Trade Association (BACTA) may be able to give you advice on setting up a family entertainment centre or an adult gaming centre.

Use the Record sheets to note down the results of your market research.