alt Hacker News“At the time, Atari was selling its arcade games for US $1,500 to $2,000 each, but the real money was in the $50,000 in coins that a game would take in over its lifetime”
Has business changed since then? Surely Nvidia isn’t selling GPUs with such a low fixed up front price only for the hyperscalers to turn around and rent them out for all the profits. Am i missing something?
Replies
dgfitz • 12/09/2024
Selling shovels?
If you mean the arcade business, absolutely, operators have gone through several boom and bust cycles and the business is basically unrecognizable from what it was in the 80s and 90s. To bring this back to your analogy, imagine if Nvidia decided they were going to charge a $10/hr license fee on the driver software for datacenter-licensed GPUs. This business model is called revenue share licensing[0] and all the Japanese rhythm and fighting games (i.e. the ones that are actually games) moved to revshare over the last decade and change.
Naturally, American operators[1] hate this, both because it makes the network a single point of failure and because they can't hold onto old versions of games during lean times. When DDR came back to US arcades, Dave & Busters (back when Round1 was a lot smaller than it is today) specifically demanded a perpetually licensed version of the game, which made upgrade kits a pain in the ass. A lot of Japanese arcade games don't actually get official US releases because of this, or they're just Round1 exclusives[2], despite the fact that there's a fairly big and dedicated American player base for rhythm games[3].
The irony is, revshare licensing would fix one of the other biggest fears American operators have about running rhythm games: ASCAP. When Guitar Hero got an arcade port, the collection societies started going after arcade operators that had bought the machines. I suppose the entire perpetual licensing business model that arcade machines used to use is not actually legally coherent[4], at least for games with licensed music in them. But having actual per-credit licensing attached to the machines would be an easy way to tell collection societies to fuck off, because they already got paid when you paid your revshare to the arcade manufacturer, and they can't sue you if you paid for your license.
There's two other big metas in American arcades:
- Redemption arcades, or the "child-friendly casino". Chuck E. Cheese was a pioneer in this particular kind of arcade brain rot and most American operators just run these kinds of games exclusively. Actually, Japan does this way worse than America does; pretty much every arcade in Japan will have an insanely large section of crane games, gamble-able horse racing simulators, or literal slot machines. It's just that Japan also isn't horribly underserved like the US market is.
- Retro arcades, which run older perpetually licensed games, typically on a "pay for entry" basis. Problem is keeping all these old games in order; they don't make new parts for old games. You basically have to be an electronics restoration expert to run a retro arcade well; I suppose this is why 8-Bit Guy got into the business with Time Rift Arcade.
[0] The arcade cabs are always-online; they will fail to start if they cannot connect to their central server. Alongside buying the cab, you also have to buy a VPN box for the manufacturer's online service and pay a monthly fee, per cab, for access to that service. The online service then tracks each credit played on the machine and charges you some fraction of a dollar per credit.
[1] There's two exceptions: Hawaiian arcade operators (which have a steady stream of Japanese tourists) and Round1 (which is a Japanese arcade chain with US operations)
[2] Round1 has an exclusive rhythm game called Music Diver which they operate in both their US and Japanese locations. In the US, Music Diver's right up front and gets a lot of casuals playing. In Japan, it's hidden in the back and there's no one playing.
[3] EU/UK is somehow even worse, even though they have the urban infrastructure for arcades and we don't. Best they have is DDR A20 PLUS with eAmuse stripped out - reheated leftovers from the Dave & Busters / Round1 deal that fell through two years ago.
[4] It's one thing for ActiVision to license a bunch of rock music and stick it in an arcade machine, but buying the cab doesn't exactly give you a license to publicly perform the game and the music attached to it. Sort of like how game streaming is technically illegal, even though everyone does it, and the game industry wants you to do it.