Startup cost
$15k–$50k
TRUiC Business Ideas
How to Start an Arcade Cabinet Business
Decision Snapshot
Arcade Cabinet
Idea Score
57
Profit margin
8%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Rising
5-yr failure rate
—
Capital intensity
High
Time commitment
Full time
Part 1 - How to start an Arcade Cabinet business - Background
If you are a product of the ‘70s or ‘80s, your hangout sessions with friends likely involved hours in front of a Galaga or PAC-MAN game. These arcade games fuel the nostalgic feelings for many of us, often leaving us reminiscing about simpler times. As modern video games have excelled in complexity, the indelible mark of video game culture on American culture has become both highly recognizable and profitable. Of particular interest is the melding of the classic styles, which birthed video games with the modern machines which take players into another universe.
An arcade cabinet business delivers that old arcade feeling with a variety of modern options. Consumers are able to purchase raw cabinets designed to fit HDTVs and modern gaming systems. Those with larger budgets are able to purchase classic, revamped video games or cabinets with modern gaming software already installed.
Our guide is in 3 parts:
- Part 1 - How to start an Arcade Cabinet business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening an arcade cabinet business?
While it is not necessary to invest in a storefront location, you will need enough space to work on several projects at one time. If you do not have enough square footage to create a home workspace, scouting out the right location will be your first order of business. Once a deposit has been put down, you will need to purchase all the materials needed to build the cabinets you plan to offer. Upon completion, photographs of completed works should be taken. These will be used for marketing materials and your website build. While your site doesn’t have to cost tens of thousands of dollars, it is important that it is informative and that customers are able to “build” their custom cabinet with ease.
Additionally, it is recommended that you meet with a licensed professional to identify your business insurance needs. Be sure to inform your agent that products will be shipped to customers, as many business policies exclude coverage for products once they have the establishment.
What are the ongoing expenses for an arcade cabinet business?
Ongoing business expenses include rent and utilities, materials, website maintenance, insurance, payroll expenses, and marketing. Businesses shipping nationally and internationally should carefully research shipping expenses and adjust prices accordingly.
The gaming industry is ever-evolving, making it important for business owners to remain abreast of new and emerging trends. Owners are encouraged to commit to continuous research and education, attending conferences, and networking events whenever possible.
Who is the target market?
For many years, arcade cabinet business owners had a small pool of people to cater to, serving older, wealthier consumers willing to pay top-dollar for the nostalgic factor. The rebirth of the arcade, however, has changed all that. Arcades are now popping up all over the country. Most now offer something for everyone, including a variety of gaming, food, and beverage options. This expanded target audience allows new business owners to choose a target market that best fits the goods and services they offer.
How does an arcade cabinet business make money?
Arcade cabinet businesses generate revenue through the sale of each cabinet sold. Money brought in from the sale of each cabinet varies depending upon the specifics of each order. Many have realized significant success in selling DIY arcade cabinet kits. The cabinets are sent in pieces, with instructions for the customer to follow, reducing the business’ time and cost.
How much can you charge customers?
Prices will vary from product to product. The average price for basic kits is $850. Upgraded kits that include joysticks, buttons, encoder options, trackballs, and LED inserts sell for approximately $1,100. Most cabinet companies offer additional options for custom and pre-printed artwork, adding up to $400 to the price tag. Arcade cabinets that include gaming software range in price from $1,500 to almost $30,000.
How much profit can an arcade cabinet business make?
If you sell one basic kit and two upgraded kits per month, this will generate a gross annual income of over $36,000.
How can you make your business more profitable?
Entrepreneurs looking to increase annual profits should consider expanding the goods and services they offer. In addition to selling full cabinets, your website should include basic parts and adapters, a variety of gaming software options, and downloadable cabinet plans that consumers can purchase and print at home. Repair services and cabinet installations would also help make your business more profitable.
Day-to-Day and Growth
What happens during a typical day at an arcade cabinet business?
Whether your focus is on modern video games, the classics, or a combination of both, you will need to balance a number of responsibilities each day:
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Address customer inquiries, tackle any issues that arise in a timely manner and follow up with customers once their order has been fulfilled
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Work with the customer to identify their needs, issue work orders, and prepare and ship orders
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Build cabinets or manage the production team
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Maintain relationships with vendors and network within the industry
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Research new and emerging trends
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Manage marketing strategy
To ensure long-term growth and success, business owners lacking the necessary skills to perform any of the above functions will want to hire experienced professionals.
What are some skills and experiences that will help you build a successful arcade cabinet business?
Your customers are investing a significant amount of money in your product and will expect a higher level of customer service. Business owners and their teams should be dedicated to ensuring a positive customer experience, answering all questions and concerns in a timely manner. The ability to communicate across various socioeconomic backgrounds will help connect with potential clients, ensuring a deeper level of customer service.
Whether you plan to complete the work yourself or hire a team of technicians, a sound understanding of both new and vintage games, cabinets, and their inner workings would prove beneficial. This will not only help the customer feel more at ease with their investment, it will assist you in the development of your business plan and projected financials.
If you do not possess the basic knowledge necessary to launch and manage a startup, industry leaders recommend taking a basic business course online or at your local college. Additionally, a marketing background would prove beneficial. If advertising and marketing aren’t your strong suit, consider hiring a marketing agency or an in-house marketing team to help you develop and manage a targeting marketing strategy.
What is the growth potential for an arcade cabinet business?
While many arcade cabinet businesses start out on a local level, the opportunity for growth is significant. Because arcade games are enjoyed across the globe, businesses can work with consumers from all backgrounds.
What are some insider tips for jump starting an arcade cabinet business?
When launching a business that targets a niche audience, it is critical that you develop a thorough business plan. A well-thought-out and developed business plan is a roadmap that defines short and long-term goals and provides a clear understanding of what is necessary to achieve those goals.
How and when to build a team
If you possess the necessary skills to fulfill each order, it may not be necessary to hire employees when first starting out. Once the business takes off, however, you will need to plan and hire accordingly. New employees should be hired to ensure you operate at a higher level of customer service. New hires should be knowledgeable, passionate about their work, and properly trained.
Part 2 - Is an Arcade Cabinet business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Arcade Cabinet business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Arcade Cabinet Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Arcade Cabinet business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.