If you’ve never been inside a traditional arcade, it could be hard to distinguish one from a Dave & Buster’s. Authenticity is a hard nut to crack, but there are a few hallmarks of the video game arcade of days gone by: first, they have video games. Lots and lots of video games, and (usually) pinball machines. They’re dark (so that you can see the screens better), and they don’t sell food or alcohol. There’s no sign outside that says you “must be 21 to enter.” These are rarely family-friendly institutions, either. Your mom wouldn’t want to be there, and nobody would want her there, anyway. This is a place for kids to be with other kids, teens to be with other teens, and early-stage adults to serve as the ambassador badasses in residence for the younger generation. It’s noisy, with all the kids yelling and the video games on permanent demo mode, beckoning you to waste just one more quarter.
The first popular arcade games included early amusement-park midway games such as
shooting galleries, ball-toss games, and the earliest coin-operated machines, such as those that claimed to tell a person’s fortune or that played mechanical music. The old Midways of 1920s-era amusement parks provided the inspiration and atmosphere for later arcade games. In the 1930s the first coin-operated pinball machines emerged. These early amusement machines differed from their later electronic cousins in that they were made of wood. They lacked plungers or lit-up bonus surfaces on the playing field, and used mechanical instead of electronic scoring-readouts. By around 1977 most pinball machines in production switched to using solid-state electronics both for operation and for scoring
In 1971 students at Stanford University set up the Galaxy Game, a coin-operated version of the Spacewar video game. This ranks as the earliest known instance of a coin-operated video game. Later in the same year, Nolan Bushnell created the first mass-manufactured game, Computer Space, for Nutting Associates.
In 1972, Atari was formed by Nolan Bushnell and Ted Dabney. Atari essentially created the coin-operated video game industry with the game Pong, the first successful electronic ping pong video game. Pong proved to be popular, but imitators helped keep Atari from dominating the fledgling coin-operated video game market.
Taito’s Space Invaders, in 1978, proved to be the first blockbuster arcade video game. Its success marked the beginning of the golden age of arcade video games. Video game arcades sprang up in shopping malls, and small “corner arcades” appeared in restaurants, grocery stores, bars and movie theaters all over the United States, Japan and other countries during the late 1970s and early 1980s. Space Invaders (1978), Galaxian (1979), Pac-Man (1980), Battlezone (1980), Defender (1980), and Bosconian (1981) were especially popular. In 1981, the arcade video game industry was worth $8 billion. By the late 1980s, the arcade video game craze was beginning to fade due to advances in home video game console technology. By 1991, US arcade video game revenues had fallen to $2.1 billion.
Sega AM2’s Hang-On, designed by Yu Suzuki and running on the Sega Space Harrier hardware, was the first of Sega’s “Super Scaler” arcade system boards that allowed pseudo-3D sprite-scaling at high frame rates. The pseudo-3D sprite/tile scaling was handled in a similar manner to textures in later texture-mapped polygonal 3D games of the 1990s. Designed by Sega AM2’s Yu Suzuki, he stated that his “designs were always 3D from the beginning. All the calculations in the system were 3D, even from Hang-On. I calculated the position, scale, and zoom rate in 3D and converted it backwards to 2D. So I was always thinking in 3D.” It was controlled using a video game arcade cabinet resembling a motorbike, which the player moves with their body. This began the “Taikan” trend, the use of motion-controlled hydraulic arcade cabinets in many arcade games of the late 1980s, two decades before motion controls became popular on video game consoles.
In the early 1990s, the arcades experienced a major resurgence with the 1991 release of Capcom’s Street Fighter II, which popularized competitive fighting games and revived the arcade industry to a level of popularity not seen since the days of Pac-Man, setting off a renaissance for the arcade game industry in the early 1990s. Its success led to a wave of other popular games which mostly were in the fighting genre, such as Pit-Fighter (1990) by Atari, Mortal Kombat by Midway Games, Fatal Fury: King of Fighters (1992) by SNK, Virtua Fighter (1993) by SEGA, Killer Instinct (1994) by Rare, and The King of Fighters (1994–2005) by SNK. In 1993, Electronic Games noted that when “historians look back at the world of coin-op during the early 1990s, one of the defining highlights of the video game art form will undoubtedly focus on fighting/martial arts themes” which it described as “the backbone of the industry” at the time.
3D polygon graphics were popularized by the Sega Model 1 games Virtua Racing (1992) and Virtua Fighter (1993), followed by racing games like the Namco System 22 title Ridge Racer (1993) and Sega Model 2 title Daytona USA, and light gun shooters like Sega’s Virtua Cop (1994) and Mesa Logic’s Area 51 (1995), gaining considerable popularity in the arcades. By 1994, arcade games in the United States were generating revenues of $7 billion in quarters (equivalent to $11.6 billion in 2017), in comparison to home console game sales of $6 billion, with many of the best-selling home video games in the early 1990s often being arcade ports. Combined, total US arcade and console game revenues of $13 billion in 1994 ($21.5 billion in 2017) was nearly two and a half times the $5 billion revenue grossed by movies in the United States at the time.
Around the mid-1990s, the fifth-generation home consoles, Sega Saturn, PlayStation, and Nintendo 64, began offering true 3D graphics, improved sound, and better 2D graphics, than the previous generation. By 1995, personal computers followed, with 3D accelerator cards. While arcade systems such as the Sega Model 3 remained considerably more advanced than home systems in the late 1990s, the technological advantage that arcade games had, in their ability to customize and use the latest graphics and sound chips, slowly began narrowing, and the convenience of home games eventually caused a decline in arcade gaming. Sega’s sixth generation console, the Dreamcast, could produce 3D graphics comparable to the Sega NAOMI arcade system in 1998, after which Sega produced more powerful arcade systems such as the Sega NAOMI Multiboard and Sega Hikaru in 1999 and the Sega NAOMI 2 in 2000, before Sega eventually stopped manufacturing expensive proprietary arcade system boards, with their subsequent arcade boards being based on more affordable commercial console or PC components.
Arcade video games had declined in popularity so much by the late 1990s, that revenues in the United States dropped to $1.33 billion in 1999, and reached a low of $866 million in 2004.The gap in release dates and quality between console ports and the arcade games they were ported from dramatically narrowed, thus setting up home consoles as a major competitor with arcades. Furthermore, by the early 2000s, networked gaming via computers and then consoles across the Internet had also appeared, replacing the venue of head-to-head competition and social atmosphere once provided solely by arcades. The arcades also lost their status as the forefront of new game releases. Given the choice between playing a game at an arcade three or four times (perhaps 15 minutes of play for a typical arcade game), and renting, at about the same price, exactly the same game—for a video game console—the console became the preferred choice. Fighting games were the most attractive feature for arcades, since they offered the prospect of face-to-face competition and tournaments, which correspondingly led players to practice more (and spend more money in the arcade), but they could not support the business all by themselves.
In the 2000s and 2010s, arcades have found a niche market by providing games that use special controllers largely inaccessible to home users, such as dance games that have a floor that senses the user’s dancing. To remain viable, arcades also added other elements to complement the video games such as redemption games, merchandiser games, and food service, typically snacks and fast food. Referred to as “fun centers” or “family fun centers”, some of the longstanding chains such as Chuck E. Cheese’s and Gatti’s Pizza (“GattiTowns”) also changed to this format. Many 1980s-era video game arcades have long since closed, and classic coin-operated games have become largely the province of dedicated gamers and hobbyists. In the 2010s, some movie theaters and family fun centers still have small arcades.
Worldwide, arcade game revenues gradually increased from $1.8 billion in 1998 to $3.2 billion in 2002, rivalling PC game sales of $3.2 billion that same year. In particular, arcade video games are a thriving industry in China, where arcades are widespread across the country. The US market has also experienced a slight resurgence, with the number of video game arcades across the nation increasing from 2,500 in 2003 to 3,500 in 2008, though this is significantly less than the 10,000 arcades in the early 1980s. As of 2009, a successful arcade game usually sells around 4000 to 6000 units worldwide.
The relative simplicity yet solid gameplay of many of these early games has inspired a new generation of fans who can play them on mobile phones or with emulators such as MAME; Pac-Man in particular sold over 30 million mobile downloads in the United States by 2010. Some classic arcade games are reappearing in commercial settings, such as Namco’s Ms. Pac-Man 20 Year Reunion / Galaga Class of 1981 two-in-one game, or integrated directly into controller hardware (joysticks) with replaceable flash drives storing game ROMs.
In the Japanese gaming industry, arcades have remained popular through to the present day. As of 2009, out of Japan’s $20 billion gaming market, $6 billion of that amount is generated from arcades, which represent the largest sector of the Japanese video game market, followed by home console games and mobile games at $3.5 billion and $2 billion, respectively. Despite the global decline of arcades, Japanese companies hit record revenue for three consecutive years during this period. However, due to the country’s economic recession, the Japanese arcade industry has also been steadily declining, from ¥702.9 billion (US$8.7 billion) in 2007 to ¥504.3 billion ($6.2 billion) in 2010.
In the Japanese market, network and card features introduced by Virtua Fighter 4 and
World Club Champion Football, and novelty cabinets such as Gundam Pod machines have caused revitalization’s in arcade profitability in Japan. The reason for the continued popularity of arcades in comparison to the west, are heavy population density and an infrastructure similar to casino facilities. Former rivals in the Japanese arcade industry, Konami, Taito, Bandai Namco Entertainment and Sega, are now working together to keep the arcade industry vibrant. This is evidenced in the sharing of arcade networks, and venues having games from all major companies rather than only games from their own company.
In the US, excitement surrounding the traditional arcade remains strong today. Amusement centers and arcades have spread around the country, though they’re a different beast than they were 50, 30 or even 10 years ago.
Home console gaming and its massive surge in innovation changed the scene. You also can find games in cafes and coffee shops, giving gamers a space to play modern entertainment.
The video game industry is seeing a huge boom in consoles like the Nintendo Switch, PlayStation 4 and Xbox One introducing games that people also play at arcades. Next on the horizon for the future of arcade games, lie with vintage arcade games and the current state of the VR industry.
Virtual reality will deliver truly immersive experiences, allowing players to step into the shoes of an adventurer or race car driver. They’re not just looking at a screen simulation. They’re in the cockpit. We will see the technology deployed in arcades, too, an exciting next step for devoted gamers:
In 2014, Facebook bought the VR company Oculus for $400 million in cash and 23.1
million shares of the social network. This massive investment highlights the potential for the technology. With the likes of the PlayStation VR, Oculus Rift, HTC Vive and many others, virtual reality will soon enter a heyday..
While we can’t go and enjoy arcade games in a smokey dark room with all of our friends anymore; the arcade industry has adapted well over time. New technology will continue to push forward a love and excitement for games. Video games are widely enjoyed with at home consoles, the trend of ‘barcades’ and family-friendly centers like Chuck E. Cheese will keep the love of gaming with friends at an out-of-home establishment at all time highs. We might have already lived out the golden age and renaissance of arcades but we are here for the silver age.
For a timeline of arcade games check out the infographic below provided by M&P Amusement: