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Arcade, Food & Entertainment Complexes in the US Industry Market Research Report from IBISWorld has Been Updated

 

November 11, 2012 --

Los Angeles, CA (PRWEB) November 11, 2012

The video arcade has fallen far from the golden days of the early 1990s. According to IBISWorld analyst Matthew MacFarland, As the home console rose in prominence, coin-operated (coin-op) games fell in kind, and the Arcade, Food and Entertainment Complexes industry is now a fraction of the size it once was. Substitute products, including game consoles like the Nintendo Wii, Microsoft Xbox and Sony PlayStation, offer convenience and long-term cost savings, and online or mobile games can be played for a small fee or for free. While trends in per capita disposable income and leisure time also influence industry performance, competition from substitutes has written the industry's narrative for more than a decade. During the five years to 2012, revenue has grown at a low annualized rate of 1.6%, including 1.4% growth in 2012 to $2.3 billion.

To combat falling demand, arcades have adopted the strategies of successful family entertainment centers (FECs) like Chuck E. Cheese's and restaurant-arcades like Dave & Buster's Entertainment, which offer full meal service. FECs dominate the industry and account for more than three-quarters of overall revenue because food and beverage sales have higher margins than arcade games and are less directly influenced by the rise of home game consoles, says MacFarland. While many smaller firms have begun to include this secondary revenue stream, the strategy has not led to substantial revenue growth for the industry as a whole.

The Arcade, Food and Entertainment Complexes industry has a high level of competition. The industry is made up of a few large companies that operate hundreds of establishments and a large number of firms with fewer than 20 employees, which cater to local markets. The top four industry players, which include CEC Entertainment, Dave & Buster's Entertainment, GameWorks Entertainment and Namco Entertainment, hold a combined market share of about two-thirds of industry revenue. Thus, IBISWorld estimates that about 7,000 firms compete for the remainder of industry revenue in 2012. Industry concentration has decreased during the past five years; in 2007, the top four companies accounted for 73.6% of industry revenue. Major companies have experienced lackluster growth during that time, with both CEC Entertainment and Dave & Buster's growing at a slower annualized rate than the overall industry over the past five years. Neither firm has engaged in substantial acquisition activity or focused on opening large numbers of new locations. CEC Entertainment has focused on renovating and expanding its existing Chuck E. Cheese's locations, but this policy has not led to a higher market share.


During the next five years, the industry's woes will worsen. The Video Games industry (IBISWorld report NN003) is projected to grow at a brisk pace during this time, taking consumers' entertainment budgets with it. Game rooms are no longer the primary market for video game consumption, and as such, developers dedicate far less time and money to creating arcade games. This lack of resources will stifle innovation, making arcades less able to draw patrons in with state-of-the-art offerings. The growing prevalence of other entertainment sources, like high-speed internet and video-on-demand services, will also compete with the Arcade, Food and Entertainment Complexes industry for consumers' free time. In the face of such intense competition, the industry is not projected to expand substantially. The strong performance of industry-leading restaurant-arcades, though, is forecast to help revenue grow slowly during the five years to 2017.

For more information, visit IBISWorlds Arcade, Food and Entertainment Complexes in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes businesses that primarily operate video game arcades and game-focused family entertainment centers, which typically sell food and beverages. Industry operators rent or purchase debit card- or coin-operated arcade games that customers play for a fee. Establishments that primarily focus on gambling games, billiards, miniature golf and other larger-scale or outdoor amusements are not included in this industry.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nations most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

Read the full story at http://www.prweb.com/releases/2012/11/prweb10116526.htm.

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