Press Release: 1984-01-20: VIDEO ARCADES' NEW HOPE

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Language: English
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JAN. 20, 1984

After a disappointing 1983, when revenues of video arcade games reached a three-year low, the industry is turning to laser technology as its newest hope for a recovery.

Arcade games that use laser disks are designed to make the player feel as if he or she is right in the action, flying the fighter plane, throwing the long pass for a touchdown, piloting a streaking spaceship through an asteroid belt. One such game just reaching arcades now, Mylstar's M.A.C.H. 3, in which the player flies a bomber over a photographed background, has started well, according to arcade owners.

And at the Consumer Electronics Show in Las Vegas, Nev., earlier this month, Paramount Pictures, Sega Enterprises and Bally Midway announced they were planning a laser disk game version of the upcoming Paramount movie ''Star Trek III: The Search for Spock'' that will use footage from the movie and will be released at the same time as the film next summer. Another game already being shipped is Bally's NFL Football, in which the player quarterbacks a team against a background of filmed professional football games.

Still, the picture is decidedly mixed. Arcade owners say, for example, that two laser disk games introduced last fall - Sega's Astron Belt and Stern's Cliffhanger - have been unsuccessful.

Coin-operated video arcade games were a $5 billion business in 1983, according to the ''best guess'' of the Amusement Games Manufacturers Association. If $5 billion cannot be considered a disaster, it was certainly a disappointment to arcade game manufacturers and the owners of America's noisy video pleasure palaces.

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In 1981, more than $8 billion worth of quarters was spent on Asteroids, Pac-Man, and dozens of other five-foot-high, garishly decorated boxes. In 1982, the machines took in $7 billion.

''Now we've fallen back down to the level of 1980,'' said Glenn Braswell, executive director of the amusement games association, the industry's trade group. ''The days when you could slap a coat of paint on an empty gas station, put in 50 machines and call it an arcade are over.''

Figures are hard to verify in a business of mom-and-pop entrepreneurs, but Mr. Braswell said there were probably 10,000 arcades by the end of 1982 and no more than 6,000 now. ''Nice arcades in shopping malls are surviving,'' he said, ''and more than 85 percent of the games have always been in what we call street locations - pizza parlors, bus stations and 7-Eleven stores.'' 'Too Much Repetitiveness'

According to Roger Sharpe, editor of Video Games magazine, ''The days when all you had to do was manufacture something with a coin slot and people would play are gone.'' He added: ''The media hype brought in 'phenomenon players' - older people who wanted to know what everyone was talking about. Those people have stopped playing, partly because there was too much repetitiveness in the games. And they won't come back.''

''Thank goodness the die-hard players are still with us,'' said Bill Gillam, director of marketing for Nintendo of America Inc., the manufacturer of such arcade hits as Donkey Kong and Popeye. ''We've lost the attorneys, doctors and women. What we have to do is find products that will lure them back.''

Change in Tastes

The first laser disk game, Dragon's Lair, was an instant success. During its first month, the game, an animated sword-and-sorcery adventure that cost 50 cents a play instead of the usual quarter, was taking in an exceptional $1,000 a week per machine.

At the Castle Park Arcade in Sherman Oaks, Calif., last July, for example, Dragon's Lair earned twice as much money as the second-place Pole Position, Atari's racing game.

Today, however, the lines around Dragon's Lair have disappeared, while Pole Position is now No. 1, as ranked by Replay magazine, an industry trade journal. ''Dragon's Lair simply did very well as a novelty for the first few weeks,'' Mr. Braswell said.

The feeling in the industry is that it is competing for the same entertainment dollar as records, movies, books, miniature golf, and even pinball. Although a few years ago it was thought that the electronic video game had killed pinball, Mr. Sharpe of Video Games magazine said that pinball was having a resurgence.

A Bally Manufacturing spokesman confirmed that sales of pinball machines ''are up significantly.''

The Best Sellers

Manufacturers and arcade owners, like movie studios, also pray for box-office hits. The best-selling arcade game in history, Ms. Pac- Man, sold more than 100,000 machines. Dragon's Lair sold about 8,500. Laser disk games, such as Dragon's Lair, cost operators about $4,000, while ordinary games such as Ms. Pac-Man sell for about $2,500.

In a June 1983 report, Christopher Kirby, an analyst with Sanford C. Bernstein & Company, estimated that 200,000 games machines would be shipped in 1983, less than half the 480,000 shipped in 1982.

''When the income of arcade operators fell off, they couldn't justify spending $2,500 for a new game,'' said Nintendo's Mr. Gillam. ''They began to defer their purchases. In addition, they were skeptical because a series of bad games had been thrown on the market.''

Mr. Gillam said Nintendo had responded by making conversion kits, which essentially give operators new games for $800.