The American arcade industry is dying.

Sure, there are still some signs of life in the huge, multifaceted family entertainment centers like Dave & Busters, and your local mini-golf course or bowling alley might have a few antiquated games, but the conventional wisdom today maintains that the real action in American gaming can be found inside the home.

But what if I told you there was an arcade revolution going on right under your nose? What if I told you manufacturers were putting out svelte, flatscreen machines with dozens of games, flashing LED exteriors and 3-D graphics? What if I told you the top manufacturer of these machines currently has 250,000 units on the market, rivaling the imprint of mega-selling classics like Pac-Man and Donkey Kong in their heyday, and brings in over a billion dollars a year?

What if I told you there was probably one in your neighborhood?

The arcade isn’t dying. You just have to change your idea of what an arcade is.

To see what I mean, head down to your nearest bar. Sit down, order a drink and steal a glance over to the end of the bar. More than likely, there’ll be some sort of countertop touch screen unit sitting there with a name like Megatouch or iTouch emblazoned on the side. You may even remember sticking a dollar in one a few years back, when you had nothing better to do.

But these machines have plenty of devoted players that stick in more than just an errant dollar. Some sit there alone, feeding dollar after dollar into the machine and tapping at a simple card game in an effort to beat the high score of a stranger from across the country. Some will gather around the unit on Friday night with three or four of their closest friends, yelling out the answers to trivia questions that would be simple if they weren’t so drunk. Some hunch over the screen distractedly, killing time with a quick jigsaw puzzle as they chat with a co-worker and wash away the memory of the workday.

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This is the future of the arcade; beer-soaked, primarily social and extremely casual.

How did it come to this? “The arcade [videogames] got too complicated,” says Steve White, editor of coin-op industry magazine RePlay. “Designers were designing for themselves, for other designers, for top-end players. … They forgot that the vast majority of game players have and always will be casual players.”

White sees today’s touchscreen games partly as an attempt to capture the essence that made arcade games popular in the first place. “Look back at the glory days of video,” he says. “Pac-Man, Donkey Kong, Space Invaders … they’re all pretty simple games to play, but hard to master. I think you see that tradition living on in some of the software in the touchscreen games today.”

“When I was a kid, I used to love to go to the arcade to play Defender and Robotron,” says Colin Higbie, Director of Marketing for Merit Entertainment, which controls the lion’s share of the touchscreen countertop market. “But would I go there today when I can play Knights of the Old Republic at home on a giant screen with Surround Sound? No. But if I’m at a bar, I’ll throw a few dollars in the pool table, the jukebox or a Megatouch for a game of Photo Hunt or Dodge Bull.”

Since 1977, Merit has been focused on producing casual games for the bar and restaurant market. In 1981, they introduced Pit Boss, a six-in-one casino game and the first countertop arcade unit. In 1994, they introduced their first touchscreen game, the Super Touch 30. During its career, Merit has fended off challenges from many competitors, including Midway, whose now-defunct TouchMaster arcade game series was recently revived as a Nintendo DS game. Merit currently holds 70 to 85 percent of the coin-operated touchscreen market, with much of the remainder belonging to up-and-comer JVL Entertainment and its iTouch line.

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Higbie says Merit’s success has come from their simple game design mantra. “We … love games that we can play with one hand, while drinking a beer with the other.” On that score, Merit’s games succeed with flying colors. Not one of the dozens of games available on a single Megatouch unit requires more than one finger to play masterfully, and most have rules that can be summed up in a sentence or two. “As players, many of us love some of the more complex games, World of Warcraft, Oblivion and so on,” he says, “but as developers, we have a real talent for writing very simple games that play out well in just a few minutes of play.”

Some might call it a real talent for appropriation. Like many casual PC games, most Megatouch games can trace their lineage back to real-world analogues or classic hits like Breakout and Bejeweled. The “Strategy” selection on the Merit Megatouch Aurora, for instance, contains highly innovative titles like Battle Command (Battleship), Big Time Roller (Yahtzee) and Backjammin’ (you get three guesses).

What Merit’s games lack in originality, though, they make up for in execution. “They’ve consistently developed good software that has wide player appeal,” RePlay‘s White says. “What they’ve been able to do over time is develop games that are easy to play but have a compelling hook that kind of keeps you coming back.” These simple hooks, when combined with plenty of alcohol for lubrication, can lead to a deep connection between player and machine. “If you go into a bar and you talk to somebody, people won’t say, ‘I like to play the Megatouch,'” White says. “They’ll say, ‘I like to play the blah blah blah, [a specific game on the unit]. They really come to identify with the software.”

Indeed, on a recent research crawl of Laurel, MD area bars (during which I found five Megatouch machines and two JVL iTouch units), I ran into Brian, who was already on his sixth beer. Brian sat next to me in the middle of a particularly close Megatouch air hockey battle and promptly started cheering me on against my buxom computer-controlled opponent.

At first, Brian said he “never” played those games, then he admitted he sometimes played “when I’m waiting for someone.” After about five minutes, he finally owned up to a minor addiction to Conquest, a surprisingly complex contest of board control involving jumping and cloning adjacent octopuses on a hex-field. A challenge was quickly issued and accepted, and while the match itself wasn’t very interesting (owing mostly to our very different states of inebriation), the camaraderie we built over the game reminded me of similarly quick friendships forged over Street Fighter or DDR in old-school arcades.

Granted, any game is gonna seem interesting at a bar with lots of alcohol and little else to do. Could these touchscreen games succeed in massive location-based entertainment complexes, where they might have to compete with go karts, laser tag and flashy upright cabinets? Some think they could.

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“When a family comes in, it’s nice to have games for all ages,” says Jon W. Brady, Vice President of Brady Distributing and Chairman of the American Amusement Machine Association. “You have to find the content that will keep not only kids happy, but also mom and dad. Our biggest challenge is just convincing a location that they need a countertop product.” The touchscreen’s appeal to women is also a big selling point. “What you’ll notice more in a location that has a countertop, you’ll see a female warm up to that a lot quicker than she would a normal videogame,” he says.

Younger teens show the least interest in the touchscreen games, but Merit is also working on this problem. In 2005, the MegaTouch Ion Elite Edge kept the touchscreen but added a miniature joystick and two action buttons to the front of the unit. Games for the unit include a penguin-based Frogger clone, a basic 3-D racer (complete with first-person view option) and an R-Type style space shooter. “With almost 200 games currently on our system, we thought we could reach out to another segment of players who really wanted to play these action games, especially as the classic arcade games became harder to find elsewhere,” Higbie says.

Merit says there’s been a strong response to the joystick, but not everyone agrees. “The joystick games haven’t been received as well as they would have liked,” Brady said, “but I really think there’s some content there that’s needed.” So what’s next for these titans of the bar gaming scene? Online gaming is a key growth area, Higbie says, and Merit would like to expand beyond its 10,000 or so connected machines to allow more players to compete in head-to-head competitions and online high-score tournaments. “Tournaments really drive gameplay,” Brady says. “Patrons really like to compete, to have your name on that leaderboard, being king of the location or the region as the case may be. That’s just human nature.”

Kyle Orland is a videogame freelancer and co-author of The Videogame Style Guide and Reference Manual. He’s written for a variety of print and online outlets, as chronicled on his workblog.

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