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How to Open a Game Store

How to Open a Game Store

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How to Open a Game Store

How to Open a Game Store

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 games 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.

If you are thinking that just because there are no other gaming 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.

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.

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.

Checklist for Openting a Game Store

Starting a game store can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.

Step 1: Write a 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.

Related: How to write a business plan

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 the 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.

When deciding on which business entity is best for a game store, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 4: Select your Location

If you plan to have a physical store, 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. To lower the initial outlay, you could start out leasing a location rather than buying or building outright.

Depending on your city, 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 general business registrations you need to research, such as a local business license, sales tax permit, Employer Identification Number, and others.

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 small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your 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

Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a game store. A couple of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– 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.

The cost to insure a game store will vary depending on several factors. 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: Hire 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 the accounting for your business


How much does it cost to open a game store?

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

– Store lease deposit $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

How much does a game store owner make?

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.

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.

Are there grants to start a game store?

It’s extremely rare to find a grant to start a game store. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a game store?

The NAICS code for a game store is 451120, which is classified under Hoppy, Toy, and Game Stores.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

How to Open a Game Store

How to Open a Game Store

Greg Bouhl

Greg Bouhl

Welcome! My name is Greg Bouhl, and I have am a serial entrepreneur, educator, business advisor, and investor.

StartingYourBusiness.com is here because of the many clients I worked with who made decisions based on inaccurate and outdated information.

Starting a business is hard, but here you will find the practical tools, resources, and insider tips to help you successfully start a business.

If there is a question about starting a business or help finding a resource, I'm here to help!

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2 Responses

  1. To begin with, my name is Ann Marie, and I am wondering how to find investors. We are looking to get around $75k. I am a 61 year old, disabled, widow. My son Domenick has 10+ years experience in video game retail, retro game sales, and arcade work. He has extensive knowledge on games, systems, services, and repairs. He has organized, advertised, and executed gaming tournaments that have brought in a large amount of customers. We will also offer a rewards program to ensure repeat customers. Due to the Covid pandemic many companies have implemented a contactless delivery option. The video game industry, especially the retro video game stores that are privately owned, have fallen behind other companies in that aspect. We plan to offer a contactless delivery service option to local customers. Doing this, as well as having a website, social media, and physical location will give customers more opportunities to get the products that they want versus any of our potential competition.

    The name we have chosen for the store is something easily recognizable to all gamers. We plan on calling the store D-Pad Video Games. Every video game controller has a d-pad, thus this will be an easily recognizable and relatable name to all of our customers.

    We will host events such as birthday parties where customers can rent out the arcade area. We will also offer a gaming area where people will have the option to pay to play or test games by the hour. It will be monitored by employees and management. No other game store has these options. There is a large number of people in town and tourists who prefer playing on an arcade cabinet as opposed to on a video game system. They range everywhere from adventure games to fighting games to driving games. People will come in and spend large amounts of money to play on an arcade cabinet. All machines will be coin operated and for sale as well. Arcade cabinets can also be rented out by other businesses as well as conventions and trade shows.Through Domenick’s years of experience in this industry he has discovered that an in-store museum of video games/systems not only educates the general public but also increases the likelihood the customers will impulse buy the products we have that they had not intended on buying when they had first walked into the store. ESports is a rising industry and game stores can obtain certification and sponsorships to host a Las Vegas biased team that could procure national and even worldwide recognition. We plan on going through the proper channels to receive certification. The way we will replenish our inventory of video games and video game systems will be entirely through trade-ins/buying-in. We will offer both cash and store credit to customers who want to sell or trade in items to us and we will go through the proper channels to the licensing to do this. Once a customer sells/trades in to us we will clean up the items and add it into our inventory so that the next customer receives a high quality item just like the customer before them. We will also have a disk cleaning service for a small fee. D-Pad Video Games will always put quality and customer service as the top priority to service every customers’ wants and needs. All of these services on top of fair prices will make D-Pad Video Games a valuable addition to the videogame industry.

    Despite cloud based and mobile gaming affecting the industry there is still an overwhelming majority of customers that will never stop buying physical copies. Not to mention the collectors and completionists who want to acquire the entire library(ies) of their favorite video gaming system(s). Through personal retro video games experience Domenick has concluded that an arcade is a treasured experience for an entire family, retro games are better for all ages, and an older demographic purchases large quantities of these games for nostalgic purposes as well as to recapture their youth.

    Las Vegas being a tourist city we get customers from all over the world and our store having extensive knowledge and inventory will ensure customers will even shop through a website as well as when they visit.

    One of the main complaints Domenick has received from customers through his many years of experience has been that most stores have employees that don’t have comprehensive knowledge of video games and systems. Domenick will ensure that the current employees as well as all future ones will be able to answer any questions or concerns that customers have extending further than the employees current knowledge allows them to. The goal is to not only be the best quality retro video game store but also the most knowledgeable. To begin with it will be a family business and no matter the size of the company we will keep that same energy at all times.

    We are looking for a centrally located area with good foot traffic with a minimum of 1,500 sq feet and have found several locations that fit these requirements. We will be open a minimum 12 hours a day (depending upon shopping center rules). Within the same area there will be non-video game stores that will help draw in more of the initial target audience as well as new customers. We will have locked cases for more expensive systems and games and an alarm system. We will strategically organize the store to enhance aesthetic pleasure and sales between the appearance of the store, the lighting, the music and the decorations.

    Advertising would be done through social media and businesses we have made contact with. Any convention/trade shows that it would be appropriate to obtain a booth there selling and advertising our products and services as well.

    According to STATISTA “The retro video game industry market size will be $65.49 Billion in the United States in 2023”. According to IBISWORLD “The average growth rate in the retro video game industry from 2017-2022 was 14.7%. Targeting market age according to STATISTA is 18-35. That will not be our only demographic.

    In conclusion, as a result, our marketing and strategic outlines prove to us that D-Pad Video Games will rise above any competition. D-Pad Video Games has the potential to change the video game industry by holding itself to the highest of standards

    1. Hi Ann Marie

      Getting investment is never easy, but I have a few suggestions. If you haven’t seen this article, it may be helpful too – https://startingyourbusiness.com/finding-the-money-to-start-a-business/.

      Whichever route you go, a strong business plan is going to be required and be very detailed on how the funds will be used. A few places to find investment include:

      Your network: Your personal and professional network can be a valuable source of potential investors. Reach out to friends, family, and colleagues who may be interested in investing in your business. This group of investors is typically not as concerned about a return on their investment (they will still want to get their money back, however) as they are in seeing Domenick succeed.

      Gamers: Probably the most likely group of people to invest. People in this group typically have busy jobs and higher incomes but love games and want a place to hang out. While they will be looking for an upside to their investment, consider offering special insider perks to provide an incentive they will really be interested in.

      Angel Investors: When most people think of getting investment for their business, images of Shark Tank usually come to mind. Since it’s on TV, it’s a little overly dramatic, but if you haven’t, you may want to watch a few episodes as many of the questions are what an investor is going to ask.

      From my experience, though, it’s going to be hard to find an investor in this group because they are looking for a large return on their investment.

      Crowdfunding: Crowdfunding platforms such as Kickstarter and Indiegogo can help you raise capital from a wide range of investors. These platforms allow you to showcase your business idea and attract investment from people who are interested in your business. You probably won’t get much interest unless you promote this to gamers in your network that wouldn’t mind putting in $100 or so to see the business get started.

      Before talking to any investors, I would suggest getting some local advice. I’m sure there are other sources, but I would recommend starting with any of the following:
      StartupNV – Local resources, training, and access to investors
      gener8tor – Startup accelerator
      Small Business Development Center – Free assistance such as business planning, finding local funding, training, etc.

      I hope this helps. Let me know if you have any other questions!

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