How to Start a Game Store

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Quick Reference

Are you a gamer?  If you love all things related to games of any kind, opening your own game store may be a great way to turn your passion for and knowledge of games into a business.  You can do what you love, talk about what you love, and make a living at the same time.

Business Overview

A retail game store sells games, usually video games, to customers.  A game store may also sell traditional board and card games such as Collectible Card Games (CCGs) or Role Playing Games (RPGs) and video game equipment and accessories.  Some game stores are franchises, and some are independently owned.

Industry Summary

According to Statista, the video game industry market size will be $65.49 billion in the United States.  That is down from $66.88 billion in 2020, which was an all-time high, probably due to people being home-bound during the pandemic and playing more games. According to IBIS World, the average growth rate of the video game industry from 2016 – 2021 was 14.7%.


Industry Trends

The industry will be impacted due to the increased availability of cloud-based streaming games, mobile gaming, and subscription-based online game services.  However, demand still exists for traditional video games, and new handheld consoles have come into the market.   Hologram gaming is also expected to come to the forefront in the future.

Target Market

Your target market will be video game and card game enthusiasts, which generally fall into the 18-35 age group.

Skills, Experience, and Education Useful in Running a Game Store

There are several specific skills that you will need to open a game store.

  • Experience.  You need to be able to talk knowledgeably to your customers about any genre of games, so experience working in a game store, or at least extensive gaming experience, is essential.
  • Retail experience. Working in a retail setting previously is valuable so that you know the basics of how a retail store operates.
  • Business knowledge and experience.  You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
  • People skills. You’ll need to build rapport with your customers so that you retain them as customers and keep them coming back.

Costs to Start a Game Store

Here are the typical costs you will face when you open a game store.

  • Setting up a business name and corporation costs approximately $200.
  • Business cards, brochures, postcards for marketing $200 – $300
  • Website setup $100 –$200 for a basic, do it yourself website, $1,000 – $2,000 for a professional site
  • Location rental $1,500 – $3,000 per month
  • Location setup (furniture, tables, shelving, display cabinets, fixtures, etc) $2,000 – $5,000
  • Location deposits (utilities, rent, phone, etc) $250 – $1,000
  • Initial inventory $20,000+
  • Insurance $200 – $600
  • Cash register or point of sale (POS) system – $200 – $1,000
  • Initial marketing such as Facebook ads or search engine optimization for your website $500 -$1,000

Steps to Starting a Game Store

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your game store should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.

How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect game store name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Related: Tips and ideas for naming a game store

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

You need to select a location that is convenient for customers with high visibility.  The purchase or rent costs in prime locations tend to be more expensive but are usually more desirable due to more traffic and visibility. You could start out leasing a location rather than buying or building outright to reduce the initial investment. Depending on your location, a mall can be an ideal location as well.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

While there aren’t specific licensing requirements for a game store, there are other general local, state, and federal registrations such as a sales tax permit and an Employer Identification Number.  

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a game store is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A game store will need to set aside a budget to cover marketing costs on a continuous basis. Common promotions for a game store include being active on social media platforms and online advertising, as gamers tend to be active on the internet. Developing a website is also necessary, and can help in selling games to customers outside your local area.  Good store signage is essential to ensuring people can notice the store.

Related: Low-cost ideas to market a new business

Step 9: Get Business Insurance

A game store needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You will need employees to help you run your game store.  Make sure that you select people with appropriate experience and game knowledge.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your game store is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business


How Much Can You Potentially Make Owning a Game Store?

If the average revenue for a video game is $60 and your cost is $50, you make revenue of $10 per game. If you sell 50 games per day, 7 days per week, your annual revenue would be $182,500 per year before expenses.   Your revenue will be higher if you sell equipment and accessories.

Things to Consider Before Starting a Game Store

Running a game store or any small business will have its challenges.  You need to be prepared, and make sure that you know what you’re getting into.

Before starting your business, consider attending the GAMA Trade Show, as most manufacturers and distributors of games attend to show their products and services.  Here you will be able to meet other game store business owners and really learn from the people who are doing what you want to do.

If you are thinking that just because there are no other game stores or a Gamestop in your area will make your business successful, be sure to look at indirect competitors as many hobby stores, comic book shops, and of course stores on the internet, Amazon, and eBay sell games too. Your competitive advantage is more likely going to be the community built around playing games, so be sure to have this strategy mapped out. Customers of game stores tend to be very loyal and not price-sensitive than other types of businesses.

The profit margins on new releases are very slim. Unless you are selling a high volume of new games, look to higher-margin items like used games, retro games, and refurbished hardware and consoles.

Marketing and acquiring customers will be your biggest challenge and an ongoing expense.  You will face a lot of competition, so your marketing will need to make you stand out.

Also, you are competing against online retailers. You should consider selling online as well as in your store, but there will be more expenses to consider.

You will be risking a large amount of money opening a game store. It will take time and hard work to see a profit.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other game stores to see what they offer and what prices they charge.



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