4 ms·

“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

“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?

dgfitz 2y ago
Selling shovels?
kmeisthax 2y ago
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.
- Shank 2y ago
  > 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. This is precisely why revenue share exists as a model. There are a lot of US operators who are still cold to the idea, but it isn't out of the question that operators would pay for updated, modern games. Rhythm games especially are difficult due to cross-border licensing issues. The times are changing though: There has been an ongoing maimai DX location test in the US (in California, Round1 PHM and in Texas, at Dave 'n Busters), and there was recently the successful completion of the location test for Taiko no Tatsujin, with a full scale launch starting in November. There are pains, but these games are slowly coming over. I assume you already know this stuff, but I think the average person would read your take as fairly cynical. The fact that SEGA Fave and Bandai Namco are even remotely considering operating online, networked rhythm games in the US is something to be thankful for. maimai's location test was online, with a large catalog of songs, on the international ALL.net service. Compared to the maimai PiNK loctest, which was offline with paltry songs, it's way, way more likely to be a long-term initiative.
  - kmeisthax 2y ago
    I don't just know about the maimai DX location test, I actually flew out to the Puente Hills Mall[0] just to play it. One other thing I left out (because I thought it was too inside-baseball) is that the way Japanese companies structure their overseas operations also harms the US rhythm game market. For example, the only reason why we got a maimai DX location test was that SEGA had completely upended their US arcade division. It used to be licensed out to a completely different company with zero interest in rhythm games. Presumably with the same assumption that they wouldn't sell well or that arcade operators wouldn't sign a revshare agreement. The best we could get was a bunch of offline'd Chunithm Paradise Lost machine with all the licenses stripped out[1]. Likewise, US players are also very cynical because of how poorly served we are for our given market size. When Taiko's US launch was announced a lot of people were worried that the cab quality would be shit because they were being assembled in the US (presumably for shipping or tariff reasons). The rhythm game community has a long memory; we remember what Raw Thrills did to DDR in the name of cost-cutting. The Taiko cabs that R1 USA got so far seem to be good, fortunately, but it's not irrational to worry about these sorts of things. I can absolutely see some independent operators outside of Round1 picking up Taiko (or maimai if SEGA FAVE decides to grant our wishes). But I would still be rather shocked if, say, Dave & Busters[3] wound up running either game, given that they basically pulled out of rhythm games. [0] Which is comically dead. Outside of the Round1 and the AMC basically half the shops are closed and the other half are going out of business. If PHM wasn't Round1's hero store the mall probably would have shut down by now. [1] Hope you like Jingle Bells [2] After Raw Thrills fucked DDR so hard it left the states, the reintroduction of DDR to the US (Hawaii exclusive) involved a special deal with Konami, Round1, and Dave & Busters. Because D&B was involved, they insisted on perpetual licensing, even though Konami had moved to revshare in every other region. Which meant having to buy upgrade kits. [3] Or, hell, Chuck E. Cheese; even though Taiko would slot in perfectly with their target demo.

dgfitz 2y ago

Selling shovels?

kmeisthax 2y ago

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.

Shank 2y ago
> 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. This is precisely why revenue share exists as a model. There are a lot of US operators who are still cold to the idea, but it isn't out of the question that operators would pay for updated, modern games. Rhythm games especially are difficult due to cross-border licensing issues. The times are changing though: There has been an ongoing maimai DX location test in the US (in California, Round1 PHM and in Texas, at Dave 'n Busters), and there was recently the successful completion of the location test for Taiko no Tatsujin, with a full scale launch starting in November. There are pains, but these games are slowly coming over. I assume you already know this stuff, but I think the average person would read your take as fairly cynical. The fact that SEGA Fave and Bandai Namco are even remotely considering operating online, networked rhythm games in the US is something to be thankful for. maimai's location test was online, with a large catalog of songs, on the international ALL.net service. Compared to the maimai PiNK loctest, which was offline with paltry songs, it's way, way more likely to be a long-term initiative.
- kmeisthax 2y ago
  I don't just know about the maimai DX location test, I actually flew out to the Puente Hills Mall[0] just to play it. One other thing I left out (because I thought it was too inside-baseball) is that the way Japanese companies structure their overseas operations also harms the US rhythm game market. For example, the only reason why we got a maimai DX location test was that SEGA had completely upended their US arcade division. It used to be licensed out to a completely different company with zero interest in rhythm games. Presumably with the same assumption that they wouldn't sell well or that arcade operators wouldn't sign a revshare agreement. The best we could get was a bunch of offline'd Chunithm Paradise Lost machine with all the licenses stripped out[1]. Likewise, US players are also very cynical because of how poorly served we are for our given market size. When Taiko's US launch was announced a lot of people were worried that the cab quality would be shit because they were being assembled in the US (presumably for shipping or tariff reasons). The rhythm game community has a long memory; we remember what Raw Thrills did to DDR in the name of cost-cutting. The Taiko cabs that R1 USA got so far seem to be good, fortunately, but it's not irrational to worry about these sorts of things. I can absolutely see some independent operators outside of Round1 picking up Taiko (or maimai if SEGA FAVE decides to grant our wishes). But I would still be rather shocked if, say, Dave & Busters[3] wound up running either game, given that they basically pulled out of rhythm games. [0] Which is comically dead. Outside of the Round1 and the AMC basically half the shops are closed and the other half are going out of business. If PHM wasn't Round1's hero store the mall probably would have shut down by now. [1] Hope you like Jingle Bells [2] After Raw Thrills fucked DDR so hard it left the states, the reintroduction of DDR to the US (Hawaii exclusive) involved a special deal with Konami, Round1, and Dave & Busters. Because D&B was involved, they insisted on perpetual licensing, even though Konami had moved to revshare in every other region. Which meant having to buy upgrade kits. [3] Or, hell, Chuck E. Cheese; even though Taiko would slot in perfectly with their target demo.