Ready Player None: SF Arcades Hang On

It's not game over for pinball and arcade-lovers in San Francisco.

Venture a block from the Upper Haight into a quiet residential neighborhood on Waller Street, and you’ll find one of the largest collections of pinball machines in the Bay Area.

In the back room of Free Gold Watch — past its assortment of meticulously maintained classic arcade video games like Ms. Pac-Man and Tempest — you’ll also find a silk screen printing business. Opened in 2006, this unique print shop-arcade hybrid also churns out custom T-shirts, hoodies, and more for clients in San Francisco and beyond.

It’s an unconventional combination, but a multi-pronged income model is what it takes for an arcade to survive a government-mandated indefinite closure.

Not all arcades in the Bay Area were fortunate enough to have an income stream capable of withstanding the pandemic. Coin-Op Game Room on 4th Street recently shut its doors for good, High Scores Arcade in Hayward is on its last legs, and even the historic Musée Mécanique — a Fisherman’s Wharf staple since 1933 — has turned to crowdfunding in an attempt to weather the storm.

“It’s a labor of love,” says Free Gold Watch owner Matthew Henri. “It’s mainly the screenprinting side that pays the bills. Because it’s not like these games are these giant cash cows that keep everything afloat.”

That’s partially because the price to play classic arcade games hasn’t adjusted for inflation. Forty years later, most arcades will only charge you the original cost of 25 or 50 cents to play a game like Space Invaders or Pac-Man. According to a 2015 industry report by Play Meter Magazine, the average weekly gross of an arcade video game in 2015 was only $94. 

A worker makes shirts at Free Gold Watch on Wednesday Sept. 28, 2016. Photo by Aleah Fajardo/S.F. Examiner

While arcades were wildly popular during the early 1980s — when an estimated peak of 13,000 locations existed across North America — they were already on their way out by the mid-to-late 1980s. Powerful home gaming systems like the Nintendo Entertainment System (NES) were hitting the market, and American cities were simply too saturated with arcades as demand for them decreased. 

Today, only around 2,500 arcades exist in the United States, according to the 2015 survey by Play Meter. Another 3,500 locations are “family entertainment centers” that include an arcade section alongside other attractions like bowling alleys, mini golf, and laser tag.

In a sea of Dave & Busters and Chuck E. Cheeses, traditional arcades that specialize in retro video games and pinball machines have become increasingly rare due to slim profit margins. But enthusiasts are still hanging on, no matter how many quarters it takes. 

Labor of Love

“I think what drives this to still be a thing is that you have people that love it so much that they want to make sure it happens, even if they’re not becoming millionaires off of it,” says Matthew Sengbusch, who runs an arcade game rental business called Small Change Arcade in San Francisco. 

Today, the issues that led to the downfall of arcades in the 1980s have become even more exacerbated. Handheld and home consoles have dominated the market for decades, and the advent of online distribution platforms like Steam means that players can access a near-infinite collection of games at any given moment, from wherever they are.

But in an era so defined by the convenience of digital services, there’s something about the physicality of the classic arcade — with its clicky buttons, neon lights, and cacophony of beeps and bloops — that continues to captivate curious teenagers and nostalgic adults alike. 

On weekends prior to the pandemic, Free Gold Watch regularly attracted 30-75 guests at a time. The arcade’s reputation as a premier spot for pinball led to the formation of the city’s only pinball league, the San Francisco Pinball Department (SFPD), which boasts over 80 players and a running waitlist of more than 50 prospective members. Nearly every weekend, the space was booked for private parties, corporate events, and even a few weddings. 

Stock photo courtesy of Julian Lozano/Unsplash

Part of that success can be attributed to Henri’s efforts to maintain a fresh selection of games. At any given time, players can take their pick from 57 pinball machines and 25 arcade games. He and his operators have cycled through over 150 different vintage and modern pinball machines since 2009, all of which require frequent and meticulous upkeep to maintain.

Given the fact that brand new pinball machines can run anywhere from $5,000 to $12,000, depending on the manufacturer, it’s been quite the investment. (The newest machines feature Wi-Fi connectivity for regular software updates, and some even come with cameras to insert pictures of players within the playfield.)

“But then the lockdown hit, and it went from 100 miles an hour to zero overnight,” Henri says. “It was like they just turned the lights off on us. … We didn’t know if we were going to be closed for a year, or two, or more.”

Requests for home rentals of machines started trickling in, but Henri decided it wasn’t worth the effort. Each game weighs around 250 pounds, and in San Francisco, no one happens to conveniently live on the first floor. Instead, he trudged on with the screenprinting side of the business and hoped for the best.

False Starts

It took over 200 days of closure, but a sign finally came. On Oct. 7, San Francisco entered the yellow tier for reopening and released guidelines for arcades to open at a limited capacity. 

Free Gold Watch returned for business with strict guidelines: limited capacity, mandatory face coverings, 6-foot distances, and no multiplayer games with those outside of your household. Games were sanitized regularly throughout the day. For the biggest pinball enthusiasts, Henri even added a few new novelty titles to his rotation.

But just as soon as players started trickling in again, on Oct. 30, the city of San Francisco announced a pause on reopening efforts due to increasing COVID-19 cases. On Nov. 16, Governor Newsom moved nearly all California counties back to more restrictive reopening tiers in an attempt to curb the spread of the virus.

“It was a bummer. It’s like, Disneyland with no people isn’t really Disneyland, right? Everything’s still here — but it’s the people that make this place what it is,” Henri says. “But if the powers that be say that everybody’s got to close, then we all got to close.”

With looming restrictions and constant policy changes, Henri says that there’s no indication as to when Free Gold Watch and other arcades will be able to open again. Luckily, there are no concerns about being able to keep his staff employed, and his landlord has offered him deferred rent payments. But for now, it’s back to printing T-shirts and anxiously checking state and county updates.

The worst part, he says, is breaking the news of the indefinite closure to players who’ve been waiting over seven months to return.

Pinball machines seen Free Gold Watch on Wednesday Sept. 28, 2016. Photo by Aleah Fajardo/ S.F. Examiner

After all, pinball isn’t something that you can easily play at home. The machines are heavy, expensive, and difficult to maintain. There’s also an inherent physicality to the pinball experience that is impossible to replicate virtually — the reflexive motion of slamming the flippers, the sensory overload of flashing lights and loud beeps, the nervous anticipation as your eye follows the ball. That all adds up to an experience that represents more than just nostalgia to players. 

Every machine has a unique set of rules and objectives, which means that players must master different techniques to get their coveted high scores. Some games are long and in-depth, while others are short and fast. “It’s almost like music. There’s something for every mood,” Henri tells me.

He’s never been worried about the longevity of the pinball scene, even so many years past its original heyday and even with this year’s pause on play.

“That’s the funny thing I’ve learned about pinball — there’ve been many waves of pinball throughout the years,” says Henri of its historic spikes in popularity between the 1960s and 1990s. “So I think they’ll always find a way. I think people always will crave games that are real, versus on a screen.”

For other arcades, however, the prospect of reopening wasn’t even a viable option.

On Pause

The Detour, which opened in 2014 as San Francisco’s first arcade bar and later restaurant, found itself in a particularly difficult situation when the pandemic hit.

When the arcade bar trend spread across the United States in the early 2010s, it seemed like the perfect way to make a traditionally unprofitable business model tenable. But co-owners Shawn Vergara and Tiffny Vergara Chung had no way of predicting that a global pandemic would shut down both major sides of their business.

“The Detour really survives on the food and bar program,” Shawn Vergara says, adding that the barcade’s weekly event programming (which included Monday “Super Trash Bros” tournaments and “Drag Bingo”) was also key to attracting crowds.

The Detour opened for patio and take-out dining in July and limited indoor dining in October. But by Oct. 11, it was clear the revenue wasn’t enough to break even amid staff, supply, and utility expenses. 

“We made the tough decision to shift The Detour into hibernation mode for the next few months until a vaccine is released, knowing that this date is a moving target,” Vergara wrote in an email. “This is the most logical plan for The Detour’s survival through the pandemic and winter season.”

While their landlord has been supportive through the recent challenges, Vergara says that “there is only so much they can offer when they also have a mortgage payment.” With only a limited amount of outdoor and indoor seating, it just wasn’t worth it to stay open during the pandemic. 

Although he and his co-owner are nervous, they’re also optimistic about the future of their barcade. “We have what we think is a good financial plan to ride this out,” Vergara says. Meanwhile, they’re also looking to reach out to investors who are passionate about supporting the local gaming community. 

The arcade side of the business is deeply personal to Vergara, who grew up spending his allowance on arcade games like Pac-Man and Donkey Kong on his walks home from elementary school.

“What I love about the concept is that we are able to bring these old school arcade games to a younger crowd, but at the same time see the 40-plus crowd coming in to play games from their childhood,” he tells me. “Watching the old dogs drop a quarter in the slot, hear the sound of it drop into the bin with all the other quarters, tap the start button, and then touch the joystick is truly like warping back in time and feeling like a kid again.”

A handful of arcade bars have come and gone in San Francisco, but Vergara wants to assure customers that the original is here to stay. As for the games? They’ve faithfully survived for over 40 years, through the rise and death and modern resurgence of the arcade scene. Another year or so is child’s play. 

“Stay tuned. We’ll be back. Come support us when we reopen,” he says.

Respawn

For arcade operators — individuals who own and maintain their own machines at local businesses — the pandemic has posed similar challenges.

At his arcade game rental service Small Change Arcade, Matthew Sengbusch has built dozens of meticulously scaled miniatures of classic arcade games. It’s a one man operation, which means that he handles every single step of constructing his machines almost entirely from scratch. That includes sourcing and repairing the original circuit boards, physically woodworking the exterior cabinets, hand painting their original colorful graphics, and more.

The machines are 40 percent the size of classic arcade games, making them ideal for event rentals all over the city. During his busiest seasons, he was booked for up to 12 events a month. 

“I could set up pop-up arcades for various events, corporate events, birthday parties, you name it. That demand was increasing, and that was my biggest revenue source,” Sengbusch says. “But it got shut down completely, which was the biggest hit for me.”

Another source of his income was cut off when the businesses where he was operating his machines closed, some permanently. He’s since shifted to an enterprising home rental system where $200 can buy enthusiasts one month of unlimited play, personally delivered right to their doorstep.

Musée Mécanique. Photo courtesy of Karina Peralta/Shutterstock

The job of an arcade technician isn’t easy. Sengbusch salvages original licensed circuit boards from broken machines on sites like eBay and Craigslist, and even buys old TVs to custom build the CRT monitors needed to produce the precise gameplay and aesthetics intended by the original developers. For games that use custom components that are no longer being produced, he tracks down multiple broken circuit boards from the same game to piece together one that works. Each machine takes hundreds of hours to build.

Many classic arcade games are over 40 years old, so maintenance on non-restored machines is a Herculean task of its own. “There’s always something broken. I would say for the typical game, you’re going to have to fix half a dozen things with it every year,” he says. 

The niche nature of the work also means that it isn’t the most lucrative job, especially in an urban area with a high cost of living like San Francisco. After all, as he often says, it takes a lot of quarters to pay rent. But in spite of the recent challenges and constant fear of being priced out of the city, Sengbusch doesn’t ever see himself leaving the arcade business. 

He was never in it for the money, anyways. “The most rewarding part is just seeing people have fun directly because of something I made,” Sengbusch tells me. “Whether that’s fixing their game, or getting a ball unstuck on a pinball game — when you’re making someone’s day, that just makes your day.”

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