Coin-op game arcades struggle to find appeal beyond nostalgia

Seated in front of bright screens, teenage boys deftly maneuver chunky joysticks, surrounded by others who eagerly watch them.

Inside the windowless, video screen-lit arcade, there is only one rule: Crush as many enemies as you can. 

This may be a typical childhood scene, but in an era when even coins may soon become relics, the future of coin-operated video games looks bleak.

“It seems things could never be worse,” Park Sang-hyuk, owner of Game Land, an underground game arcade in Imun-dong, eastern Seoul, told The Korea Herald.

It was Wednesday afternoon and the place was nearly empty.

Park sighed deeply at a question about the prospects of the coin-op game industry.

“Monthly income has come down more than half compared to a decade ago. I don’t know how long I can keep doing this,” he said.

There used to be two more arcade malls in the neighborhood, but they all shut down, the 62-year-old added.

He still gets some nostalgic visitors, but not enough to think about the future.

Coin-op game arcades thrived in the 1980s and ‘90s, giving young Koreans a new option in the art of idling.

Now, their popularity is increasingly in retreat: South Korea’s game arcades had combined revenues of 47.4 billion won ($41.4 million) in 2015, 36 percent down from 73.6 billion won in 2011. Last year, the number of coin-op video game arcades stood at 450, an 89 percent decrease from 3,877 in 2009, according to government data. The figure does not include claw game arcades.

Not surprisingly, mobile games and other high-tech pastimes have dealt a heavy blow to the arcade cabinets.

According to the 2016 White Paper on Korean Games released by the Korea Creative Content Agency, which handles the country’s game policy, in the country’s video gaming market of 10.7 trillion won, PC and mobile games accounted for 49.2 percent and 32.5 percent, respectively, in terms of revenue. Arcade malls generated only 0.4 percent of the total.

“Penny arcade games no longer attract younger customers because there is no fun in them anymore,” said Park Sung-gyu, 49, head of the Korea Amusement Industry Association and director of a local game machine developer.

“And there is no fun in them because we have so many regulations to deal with, which makes it utterly impossible for developers to keep up with the trends.”

In 2005, sometime after game arcades began their long, slow decline, South Korea’s arcade industry had a brief rebound with the introduction of Sea Story cabinets, similar to Japan’s Pachinko gambling devices or Western slot machines.

After several addicted players committed suicide, the government launched a clampdown on arcades for adults, which had illegally reprogramed the games to change the odds of winning the jackpot.

The incident brought about the formation of an independent body, the Game Rating and Administration Committee. It strictly bans gambling content it sees as addictive and has clamped down on adult arcades that operate past midnight.

To find a way out, attention is now turning to claw machine shops, which have grown 24-fold over the last two years. The claw machines too, however, face yet another set of regulations, blocking the newly emerging market from becoming the real deal.

“The authority now bans using dolls that cost more than 5,000 won as prizes in a claw machine to remove gambling quality. Authentic Pikachu dolls cost around 20,000 won each, so people use fake ones instead. If you both run video games and claw machines, you have to close the store before midnight,” said Park of the amusement industry association.

The restricted business hours also apply to claw machine shop owners.

The rules may have been successful in stopping coin-op arcades from turning into gambling dens, but they also effectively killed innovation and creativity, industry insiders have said.

In fact, the global coin-op amusement industry is having a revival with the arrival of new networked, multiplayer arcade games and a breakthrough in virtual reality technology.

According to the game watchdog, the world market grew 12.8 percent in 2015.

“If we are not prepared, we will fail to gain a foothold in the global arcades market, where so many leading game makers are already pouring resources into developing new products,” said Han Jae-suk of Hanmax Entertainment, which sells imported coin-op cabinets.

The game rating and administration panel, in a short response to The Korea Herald, revealed an outdated approach.

Asked about claims that excessive regulations are hindering development of the industry, the committee’s deputy manager Kang Suk-ha said the committee “has difficulty in applying the same approach” to the arcade industry as other sectors.

The committee’s website says its mandate is to foster a “sound game culture” for teenagers and adults, classify game contents that are produced and distributed here and “protect the public from negative influences.”

Han of Hanmax Entertainment called for a paradigm shift in the industry as well as the regulatory authorities in order to allow coin-op arcades to find new appeal that goes beyond nostalgia.

The global popularity of augmented reality mobile game “Pokemon Go” shows how explosive it can be when nostalgia meets new technology, other experts said.

“Honestly, I understand why kids like to play games on their iPhones or computers more,” said Kim Ki-soo, a 31-year-old businessman who said he traveled several blocks to visit Game Land from time to time.

Playing “Tekken” at a lunch break, the nostalgic gamer said it felt like traveling back in time to his boyhood years when things were simpler. In Tekken, a few good punches and kicks is all you need to feel proud of yourself.

“Look at this game, still as amusing as anything else to kill some time,” said Kim, watching the “KO” sign blazing across the screen. He adds, “Why not continue the fun, or even make it better?”

By Bak Se-hwan (sh@heraldcorp.com)