Arcade Gaming Market to Grow by USD 1.99 Billion (2025-2029), Driven by Increased Physical Activities in Gaming, Report on AI-Driven Market Transformation - Technavio

NEW YORK, Jan. 24, 2025 /PRNewswire/ -- Report with the AI impact on market trends - The global arcade gaming market size is estimated to grow by USD 1.99 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of 1.9% during the forecast period. Increasing physical activities in arcade gaming is driving market growth, with a trend towards rising integration of VR in arcade games. However, high cost of arcade gaming machines poses a challenge. Key market players include Bandai Namco Holdings Inc., Bay Tek Entertainment Inc., Bowlero Corp., Capcom Co. Ltd., Chicago Gaming Co., CXC Simulations, D BOX Technologies Inc., Eleetus LLC, Helix Leisure USA Inc., Incredible Technologies Inc., Innovative Concepts in Entertainment Inc., International Games System Co. Ltd., Neofuns Amusement Equipment Co. Ltd., Nintendo Co., Ltd., PrimeTime Amusements, Sega Sammy Holdings Inc., Square Enix Holdings Co. Ltd., UNIS Technology Ltd., Valley Dynamo Inc., and Vesaro Ltd..

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Market Driver

Arcade gaming is experiencing in public spaces like malls and restaurants. Amusement arcades, offering a mix of arcade games, simulation games, mechanical games, and electrical display games, are becoming popular gathering spots. Racing, shooting, sports, action, and other genres attract consumers of all ages. The trend extends to residential and commercial gaming hubs, offering physical activity and potential health benefits. The online gambling sector, including remote betting on football wagers and horse racing, is growing. This lifestyle change brings new opportunities for arcade gaming, with carnival games, merchandiser games, pinball machines, slot machines, and coin machine games gaining popularity. Machines continue to evolve with advanced technology, levels, scoring features, and consumer engagement. The affordability and accessibility of arcade gaming, combined with the popularity of virtual reality, online streaming, competitions, e-sports, and increasing internet penetration, make it a vibrant and dynamic market. Whether in game parlors or amusement parks, anime or lifestyle-focused, arcade gaming continues to captivate consumers with its diverse offerings. 

Virtual Reality (VR) technology is gaining popularity in the gaming industry, particularly in the arcade market. VR solutions create a realistic virtual environment, immersing users in a lifelike experience. In recent years, VR-based arcade games have emerged, with companies like Vertigo expanding their portfolio in this area. The Alliance of Electronic Arts (AEA) convention in Las Vegas in March 2022 highlighted the growing trend of VR technology in arcades and location-based entertainment (LBE). This strategic alliance will lead to an increase in the availability of VR arcade games in the future. 

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Market Challenges

• Arcade gaming market encompasses various genres of games including simulation, mechanical, and electrical display in public spaces like malls, restaurants, and amusement arcades. Challenges for this industry include adapting to changing consumer preferences and lifestyle, incorporating technology like virtual reality and online streaming, and competing with residential and commercial gaming hubs. Public places such as game parlors offer physical activity and potential health benefits, but face competition from online gambling sector with remote betting on football wagers, horse racing, and other events. Consumers seek affordable and popular genres like racing, shooting, sports, and action games, while merchandiser games, pinball machines, and coin machine games continue to attract. Machines' technology evolves with levels and scoring features, and genres expand to include anime and e-sports. Toys, amusement parks, and electromechanical games add to the market's diversity. Despite challenges, the arcade gaming market remains a significant lifestyle choice for consumers, with popularity driven by affordability and the social experience.
• The cost of arcade gaming machines poses a significant challenge in the global market due to the specialized hardware and captivating gameplay experiences they offer. Operators and developers face substantial investments for machine development, purchase, and maintenance. Modern machines, such as those with VR and AR technologies, involve high research and development expenses. For instance, The Void's VR-based arcade gaming machines provide experiences, but their costly production affects market pricing and consumer accessibility.

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Segment Overview

This arcade gaming market report extensively covers market segmentation by

1. End-user
• 1.1 Gaming hubs
• 1.2 Semi-commercial
• 1.3 Residential
2. Genre
• 2.1 Racing
• 2.2 Shooting
• 2.3 Sports
• 2.4 Action
3. Type
• 3.1 Video games
• 3.2 Simulation games
• 3.3 Mechanical games
4. Geography
• 4.1 APAC
• 4.2 North America
• 4.3 Europe
• 4.4 Middle East and Africa
• 4.5 South America

1.1 Gaming hubs- The arcade gaming market's largest segment in 2024 and throughout the forecast period is gaming hubs. These establishments use expensive arcade gaming machines, which consumers cannot afford for home use. The market's maturity doesn't hinder innovation, with simulation-based games gaining popularity. Vendors like CXC Simulations offer products, such as Motion Pro II, to gaming hubs, attracting teenagers and millennials. This technological advancement is expected to boost demand for arcade gaming in hubs, fueling the segment's growth in the global market.

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Research Analysis

Arcade gaming refers to the use of coin-operated or free-play electronic games found in public spaces such as malls, restaurants, and amusement arcades. These games, which include video games, simulation games, mechanical games, and electromechanical games, provide hours of entertainment for consumers of all ages. Arcade games come in various genres like racing, shooting, sports, action, and more. Public places like gaming hubs, game parlors, and shopping centers have become popular destinations for arcade enthusiasts. The electromechanical games offer a blend of mechanical and electrical display, while slot machines and coin machine games add to the excitement. With multiple levels, scoring features, and a wide range of games, arcade gaming continues to be a favorite pastime in both residential and commercial settings.

Market Research Overview

Arcade gaming refers to the use of electronic games in public spaces such as malls, restaurants, and amusement arcades. Arcade games encompass various genres including simulation, racing, shooting, sports, action, and mechanical games. These games are often found in electromechanical machines, coin-operated machines, or video games. The arcade industry caters to both residential and commercial consumers, with gaming hubs offering physical activity and potential health benefits. The online gambling sector, including remote betting on football wagers, horse betting, and other games, has also emerged as a significant part of the arcade gaming market. The popularity of arcade gaming is driven by affordability, technology, and the lifestyle change it offers. Consumers can enjoy various genres, from racing and shooting to sports and action, in various public places such as game parlors and amusement parks. Virtual reality and online streaming have further expanded the reach of arcade gaming, leading to competitions and the rise of e-sports. The market includes various genres, from carnival games and merchandiser games to pinball machines, slot machines, and coin machine games. The technology behind these machines continues to evolve, with new features such as scoring systems and levels adding to the consumer experience. Toys, anime, and lifestyle trends also influence the arcade gaming market, making it a dynamic and exciting industry. With increasing internet penetration, the future of arcade gaming looks bright, offering endless possibilities for entertainment and engagement.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• End-user
• Gaming Hubs
• Semi-commercial
• Residential
• Genre
• Racing
• Shooting
• Sports
• Action
• Type
• Video Games
• Simulation Games
• Mechanical Games
• Geography
• APAC
• North America
• Europe
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio