Introduction
Arcade gaming was born in the early 1970s, and it functioned as both entertainment and social interaction. Now that portable and at-home gaming systems have developed, video games can be a solitary or socially distant activity done almost anywhere. Although the arcade industry has not died out completely, its decline suggests a need for modern solutions that fit current demands.
Polycade is seeking to bring back the social benefits of arcade games with a modern twist. The company sells arcade machines with large selections of modern and classic games. Polycade also sells gaming consoles and free software. We reached out to co-founder and CEO Tyler Bushnell to learn more about the value of social experiences in the wake of COVID-19.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
In your own words, how would you describe Polycade?
Polycade is the gaming platform for social places like bars, restaurants, offices, and even your living room. We focus on games and features that improve social interaction and help build community.
What inspired you to take the leap and start this company?
Over the years, my father (creator of Atari and Chuck E. Cheese) has had hundreds of people tell him that they met their significant other playing Pong. To me, that’s a powerful and positive effect. Additionally, many studies cite real-world communities as the most powerful contributor to happiness. By leveraging modern technology and the right games, we believe we can improve people’s lives on a large scale while providing them with a core human need.
Who is on your team and how did you come together?
Our executive team consists of myself; Jake Galler, whom I’ve known for around 10 years and always intended to work with; and Chris Burns, who worked with Jake at Pluto.tv. We all share the same vision and get along well, so it was a natural fit! You can read more about each of our work histories on our SeedInvest campaign page.
How is Polycade transforming the gaming industry?
Today, the gaming industry is primarily focused on private and online play. (We’re not knocking that — we think that type of play is great, too.) There is no gaming platform that’s suitable for social environments and no platform focused on the types of games that play well in-person. Polycade aims to bring gaming out of the private space and into the places where we spend time with friends, family, and colleagues. We aim to improve and forge new real-life relationships with the power of fun.
How do you think the COVID-19 pandemic transformed the gaming or arcade industry? How does it affect Polycade?
The pandemic saw 500 million new gamers worldwide. It showed us how online socializing is not a replacement for in-person socializing. It permanently shifted many jobs to remote and standardized working from home. What does this mean for Polycade?
The influx of new players means more direct potential customers for Polycade and also implies that the barrier to entry of current platforms may be holding some players back. Because Polycade can be played in public environments for little or no cost, our barrier to entry is second only to mobile. The human need for in-person interaction directly supports the Polycade thesis that playing together in person is a unique and needed experience that is not fulfilled with online gaming.
Lastly, with so many people working from home now, the “third place” is more important than ever before, as it’s the only place to get the social interaction humans crave. If you’re unfamiliar with the “third place,” it’s the idea that people spend their time in three primary places: home (first), work (second), and some kind of social place like a bar, club, or similar (third).
How is Polycade different from traditional arcade gaming machines?
Traditional arcade machines are typically single-game, specialized units. They’re not upgradeable (or minimally upgradable) and don’t have any “connected” features.
Polycade takes a software-first, connected approach to the arcade machine, with features like online analytics, remote updates, live streaming, high-score tournaments with cash prizes, and more. Analytics enable us to continually improve the product, informed by data, such as leveraging machine learning to figure out which games drive the highest engagement in real time on a per-machine basis. Our ability to infinitely update means that our machines should never move, only improve, and remain relevant with the times.
Who are your target customers and how do you plan to market Polycade to them?
Our core target market is vending operators. For the past 10 years, they’ve been starved for a product that solves the needs of the side of the amusement industry known as “street,” which includes bars, restaurants, and any other place you’ve seen a vending or arcade machine. (“Street” excludes dedicated arcades like Dave & Busters.) By demonstrating minimal earnings in the Street market, we will reach vending operators via distributors like Betson, Schaffer, and Player One amusements as well as industry trade shows.
What does the competitive landscape look like, and how do you differentiate?
Since we have no direct competitors in the street market today, our primary competitors are devices that occupy the same physical space as our products. Venues and operators don’t like moving devices that customers use (this also works in our favor as a first mover in this space), so if the venue has only one space for a device, then we are competing for that physical space. The other devices that are successful in our target market today are the TouchTunes Jukebox and electronic dart boards (primarily popular in the midwest). It’s worth mentioning here that Polycade has much broader application (in terms of venues, verticals, and potential users) than jukeboxes and dart boards.
How do you intend to use the money you raise this round to scale the business?
We already have a solid network of machines in street-style locations across the US, so our test network is fully established. These units are seeing an average of 2.5 hours playtime per day in free-play mode. With this round of funding, we will iterate on our user experience until we can prove potential per-machine earnings of $10 a day or more in the average street location. This will enable us to activate industry distribution and scale our install base while we continue to add new monetization and engagement features.
What do you want potential investors to know about you and/or your company?
Because arcade machines have seen essentially zero business and tech innovation since their creation, some people are quick to associate the arcade machine with an antiquated behavior pattern — but we’re currently seeing the same behavior with e-sports centers: players pay hourly to play the same games they play at home but in a social environment. A question we get a lot is “Why would I pay to play a game in a bar that I could play at home?” Someone even asked us that while sitting at a bar, sipping on their $7 beer that would have cost $1 at home.
The social, community experience is different and uniquely valuable compared to the experience you get playing at home.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
As the only gaming platform for out of home, Polycade will have a broad range of exit possibilities. Large companies that currently lack a gaming platform, such as Comcast and Viacom (both of whom we have great relationships with), are natural fits, especially since our out-of-home aspect plays into their current businesses (out-of-home advertising for Viacom and business services for Comcast). Polycade’s potential to operate as a gig economy and community driver will also make us a good fit for IPO or similar.
We look forward to seeing where Tyler and his team take the company. Polycade is currently raising on SeedInvest.
