For decades, arcade game manufacturers have relied on a blend of classic and modern revenue models to generate profit. The most common strategies have evolved from purely physical transactions to incorporating digital monetization.
The traditional and most iconic model is the Coin-Operated/Credit-Based Model. Players insert physical coins or purchase credits/tokens to play a game for a set amount of time or a number of lives. The manufacturer or operator profits directly from each play session. This pay-per-play system is the foundation of the arcade industry.
With the rise of home consoles and mobile gaming, manufacturers adapted. Many modern arcade cabinets, especially those with elaborate setups like racing simulators or rhythm games, utilize a Session-Based or Time-Based Model. Instead of one credit for one game, players pay a higher fee for a longer, uninterrupted experience, such as a full race or a set of songs.
The Free-to-Play (F2P) Model has been successfully translated from mobile to arcades. Here, the base game is free to attract players, but revenue is generated through in-game purchases. Players can spend money to buy virtual currency, power-ups, extra lives, or cosmetic items directly on the cabinet or via a linked mobile app.
For family entertainment centers (FECs), the Ticket Redemption Model is crucial. Games are designed to dispense tickets based on a player's skill or score. These tickets are then exchanged for prizes. Manufacturers profit by selling the specialized redemption games and the accompanying prize management systems to venue operators.
Finally, the Initial Sale and Licensing Model remains a core revenue stream. Manufacturers sell or lease hardware (the cabinet itself) and software licenses to arcade operators, theme parks, and other location-based entertainment (LBE) venues. They may also earn ongoing revenue through licensing their popular IPs for use in other mediums or through content updates and season passes for modern arcade games.
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