Arcade operators face the challenge of managing the depreciation of arcade machine assets, which can significantly impact profitability. To mitigate this, they employ several strategies:

1. Regular Maintenance and Upgrades: Keeping machines in top condition through routine maintenance and occasional hardware or software upgrades can slow depreciation and extend lifespan.

2. Diversification of Game Portfolio: Rotating or adding newer, popular games helps maintain customer interest and reduces the risk of rapid obsolescence.

3. Leasing Instead of Buying: Some operators lease machines to avoid bearing the full brunt of depreciation, transferring the risk to leasing companies.

4. Resale and Trade-In Programs: Selling older machines to smaller venues or collectors can recoup some value before depreciation hits its lowest point.

5. Tax Benefits: Operators often leverage tax deductions for depreciation, treating it as a business expense to offset losses.

By combining these approaches, arcade operators can effectively manage asset depreciation and sustain a profitable business in the competitive gaming industry.