Market Research and Demand Analysis
In your city, there are 10 claw machine and arcade game halls that have been operating for over three years. These include 5 located in shopping centers, 3 on busy commercial streets, and 2 in large amusement parks. Additionally, the average monthly revenue of these shops is around RMB 200,000 to 500,000, and a significant portion of customers are aged 15 to 35. The top two stores in the industry account for nearly 40% of the market share, mainly using high-standard Japanese imported equipment.
Through 1,000 offline surveys or online tools like Wenjuanxing and Google Forms, it was found that 60% of respondents visit a claw machine or athletic department at least once a month (peaking around 50-100 visits), while the rest visit every two months. The consumer group is mainly young people aged 18-25, accounting for 70%.
Using a data platform like Google Maps heat maps or conducting an in-person survey, you could learn that there is a shopping center with a daily circulation of 50,000 people, peaking at over 80,000 on weekends. Research shows that young people in the area have a high demand for entertainment, but there is currently only a small game hall with obsolete equipment and limited variety. A newly opened claw machine and arcade game hall in this area is expected to attract at least 15,000 visits per month in the first year, with an annual income exceeding RMB 3 million.
Purchasing Suitable Equipment
When buying claw machines or arcade game machines, the first thing to consider is the reliability and popularity of these types of equipment. According to market research, claw machines and racing games are currently top picks. Therefore, it is recommended that claw machines and racing games be of higher quality during purchase. Good claw machines can attract more customers and extend the life of the equipment, thereby reducing maintenance costs. The budget for one claw machine should be controlled at around RMB 20,000, and the budget for a racing game should be approximately RMB 50,000. This investment pays off relatively quickly and ensures initial profitability.
Choose low-failure, easy-to-maintain equipment where possible and make sure the supplier can back it up with full after-sales service, including regular servicing and warranties. This helps ensure uninterrupted long-term operation of the equipment and reduces unanticipated repair costs. Find reliable suppliers to cooperate with and ensure that you can get support promptly when the equipment is operating.
Lastly, purchase equipment from well-known suppliers. These providers usually offer quality pre- and post-sales services. The quality warranty of the equipment should be at least 2 years, and suppliers should provide maintenance services regularly. This guarantees the stability and long service life of the equipment. Make sure to check the services provided by the suppliers and understand what they will offer under which terms before considering them for future use to support daily operations.
Operating Model and Revenue Model
Choosing a self-operated mode requires an initial investment of about RMB 1.1 million, including RMB 600,000 for equipment purchase, RMB 260,000 per year for venue rental, and RMB 200,000 per year for staff salary and benefits. Based on market research data, monthly revenue can be RMB 250,000, and annual profit is about RMB 900,000. The investment can be recovered within approximately 1.5 years.
If you opt for a franchise of a well-known brand, the annual franchise fee is RMB 100,000, and equipment investment is slightly less than RMB 500,000, reducing the total investment to RMB 900,000. This model has brand effects and mature management systems, with an annual profit of RMB 800,000 and a payback period of about 1.2 years.
Initial investment can be reduced by renting venues and equipment with annual equipment rental fees of RMB 150,000 and venue rental fees of RMB 300,000, bringing the total investment to less than RMB 450,000. The income is slightly less than in the self-operated mode—monthly revenue is about RMB 150,000, and annual profit ranges from RMB 400,000 to 500,000; it can be recovered within one year. However, the long-term costs of renting equipment are too high to make this a viable model for continuous operation.
Cost Control and Revenue Management
If the annual maintenance cost of each device is RMB 3,000 (20 devices per year, each maintained by an economist at least once every two years), then the total annual cost for maintaining equipment should be RMB 60,000. Through preventive maintenance, the failure rate can be effectively reduced by establishing regular inspection and protection measures, saving about RMB 20,000 in repair costs each year.
Hiring 2 full-time employees with an annual salary and benefits totaling RMB 200,000. By reasonably arranging employee shifts and reducing unnecessary overtime and night shifts, labor costs can be controlled within RMB 180,000 per year, saving about RMB 20,000 in costs. Additionally, hiring part-time employees could save RMB 15,000 to 20,000 in labor costs per year.
