Amusement Parks & Arcades

The US amusement parks and arcades industry includes approximately 2,500 companies with total annual revenue of $10 billion. Major companies include Walt Disney, Six Flags, Paramount Parks, Busch Entertainment, and arcade operators Namco Cybertainment and Dave & Busters. The industry is highly concentrated: the 50 largest companies generate about 85 percent of revenue.

COMPETITIVE LANDSCAPE

Demand is closely linked to the health of the economy, especially consumer income. The profitability of individual companies depends on good marketing. Large companies can build expensive rides and have economies of scale in operations and advertising. Smaller companies can compete by serving smaller markets or offering special rides. The industry is labor-intensive: annual revenue per employee is about $90,000 for large parks, $50,000 for arcades.

PRODUCTS, OPERATIONS & TECHNOLOGY

Amusement park operators offer various types of rides such as roller coasters, tower and "kiddie" rides, and water slides. They also produce entertainment, and sell food and merchandise; arcade operators offer mainly video games. Six Flags operates 30 to 40 rides in each of its amusement parks, including several roller coaster and other "thrill" rides. Rides, shows, shops, and food outlets are generally intermingled to encourage cross-selling. A typical park is spread over 100 to 200 acres.

New rides may be developed internally (the norm for Disney) or bought from manufacturers like Premier Rides, Huss, S&S, and Verkoma. Some large rides are custom installations, but most can be disassembled and transported by truck. Many ...