Alt Tab Modern Arcade

Modern arcade venue in Alpharetta GA, with 80+ devices; full kitchen; bar; retail; and kids area.

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CONCEPT:
ALT-TAB Modern Arcade is loaded with entertainment options for geeks of all shapes, sizes, and ages. It offers the highest number of next-gen consoles, VR, high-performance PCs, and vintage arcade cabinets in the greater Atlanta area. Play live DnD with our professional storytellers, no experience necessary.  Little geeks own a dedicated section of the arcade, filled with soft play equipment, costumes for pretend play, and consoles of their own.  The full bar has all the geek-culture-themed cocktails, twelve taps for local craft brews, and a full kitchen offering global eats.  Retail is on-site for last-minute gifts, gaming equipment, and cosplay.

MISSION:
ALT-TAB Modern Arcade is the pre-eminent geek social destination.  We enable the affirmation and enjoyment of all geeks, nerds, techies, and those aspiring to become a member of the party. 
We are LGBTIA+ and woman-led.
We source from LGBTIA+, black, latino, aboriginal, local, and woman-led brands where possible.  
We care deeply about income equality, community, poverty, and social good.  
We provide above-market living wages to our staff including profit share and 100% covered benefits.
We are a tip optional culture and share with our customers our commitment to appropriate wages. 

FOUNDING TEAM:
The founding team has iterated on the ALT-TAB concept since 2012.
Renee Hopkins is a veteran businesswoman with 22 years of experience in strategy, planning, financial forecasting, P&L ownership, process improvement, and operations management.  She has launched eleven independent business units across her career working with companies such as; Google, Facebook/Meta, Amazon, Audible/Amazon, and The Home Depot.  At Amazon, she developed and launched new format concepts for Specialty Retail Services -  Amazon Pop-up, Amazon 4-star, and Amazon Salon. Her budgeted responsibilities ranged from $2.7M (Home Depot Home Warranty Services) though $936M (Facebook Global Trust & Safety). Owner. Avid Gamer. 1283 hours in her Steam Library in 2021.
Craig Hopkins is a technology guru with 16 years of experience in networking, infrastructure, and platform management. He’s also led live-action roleplay games (White Wolf, Dungeons & Dragons, Warhammer 40K) for 15 years. Owner. Avid Gamer. Found Renee in Stormwind in 2010, convinced her to marry him.

ORGANIZATIONAL STRUCTURE:
ALT TAB Modern Arcade LLC was formed in Georgia as a Limited Liability Corporation on Feb 24, 2022, with ownership divided 50/50 between Renee Hopkins and Craig Hopkins.

SUMMARY OF FINANCIALS: (ALPHARETTA STONEWOOD LOCATION):
FULL YEAR (2023+)
We project $4,070,000 Total Earnings in full-year 2023 on 228,000 customers or $17 per converted customer.
Gaming sales is projected at $1,230,000 (30.2%) ($737K Console, $222K VR, $181K PC, and $89K vintage arcade), food sales at $843,000 (20.7%), bar sales at $1,613,000, (39.6%), retail sales of $299,000, (7.4%), and party sales of $83,000 (2.0%) of total Earnings.

Combined Cost is 51.7% of total revenue and includes $156,000 for property (lease, CAM, property taxes), $861,000 for payroll (acquisition, retention and benefits), $931,000 for COGS, $49,000 for Utilities/Insurance/Systems, and $102,000 for Marketing.

Earnings before Interest and Taxes are projected at $2,105,000 (48.3% of Total Revenue).  
Net Profit is projected to be $1,428,000 (35.1% of Total Revenue).

Net Profit will be split into, Dividends (24%) paid quarterly, Profit Share Reserve (5%) paid bi-annually, Loan Repayment (28%) paid monthly, and Cash on Hand (43%).

TOTAL Rev | $ 4,070,327 |

TOTAL Cost | $ 2,105,039 | 51.7%
Rent | $ 151,700 | 3.7%
Property Tax | $ 4,510 | 0.1%
Insurance | $ 6,000 | 0.1%
Payroll | $ 773,000 | 19.0%
Benefits | $ 88,000 | 2.2%
COGS | $ 930,891 | 22.9%
Utilities | $ 37,180 | 0.9%
Systems | $ 12,000 | 0.3%
Marketing | $ 101,758 | 2.5%

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EBIT | $ 1,965,288 | 48.3%

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State | $ 113,004 | 5.75%
Fed | $ 424,502 | 21.6%

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Net Profit | $ 1,427,782 | 35.1%




DIV | $ 342,668 | 

Profit Share | $ 71,389 | 

Loan Repayment | $ 400,000 | 

Cash | $ 613,725 | 


PARTIAL YEAR (2022)
Results include a week-by-week launch calendar that influences customer count.  The calendar increases week by week from 50% of total expected traffic in June, increasing to 70% in August, 80% in late September, and 100% by late November.

We project $2,015,000 Total Earnings in the partial year 2022 on 126,000 customers, or $16 per converted customer.
Gaming sales is projected at $609,000 (30.0%), food sales at $418,000 (21.0%), bar sales at $799,000, (40.0%), retail sales of $148,000, (7.6%), and party sales of $41,000 (1.4%) of total Earnings.

Combined Cost is 60.6% of total revenue and includes $127,000 for property (lease, CAM, property taxes), $512,000 for payroll (labor, acquisition, retention and benefits), $474,000 for COGS, $32,000 for Utilities/Insurance/Systems, and $76,500 for Marketing.

Earnings before Interest and Taxes are projected at $798,000 (39.6% of Total Revenue).  
Net Profit is projected to be $579,000 (28.8% of Total Revenue).

Net Profit will be split into, Dividends (24%) paid quarterly, Profit Share Reserve (5%) paid bi-annually, Loan Repayment (35%) paid monthly, and Cash on Hand (36%).

OPPORTUNITY:
In 2022 we are still hip-deep in a global pandemic, reeling from geopolitical turbulence, and hiding from climate change.  All we want to do is escape, find a couple of moments of joy, interact with friends we haven’t seen in 2 years and be able to do it with our awesome kids in-tow.

The video game industry is hot and there is no sign of growth slowing. Time spent playing video games was 36 minutes per day in 2019, 49 minutes in 2020, and by the end of 2022 projected at 61 minutes.  That’s more time per day than spent on Facebook (33 minutes), Twitter or TikTok (31 minutes), and Instagram (28 minutes).  It’s even more than daily time spent watching and following the NFL (15 minutes).  There are 62,000 bars and taverns in the US, and it’s estimated at least 12,000 are self-defined as sports bars. If the NFL is the most popular US sport to watch by far, where are the ‘gaming bars’?  Since 2010 time spent streaming, watching streams (Twitch, YouTube, and FB Gaming), and watching e-sports have all increased.  Restaurants have seen a significant recovery to pre-COVID seat count, and a resumption of pre-2020 8-12% YoY growth in revenues.  Consumers are now spending more money on high-end peripherals than games, suggesting a shift to investment in gaming long term. The lack of availability in consoles is an obstacle for many gamers.

The overlap between gamers and families is in almost-perfect alignment.  Avid gamers, classified as playing/watching 180+ minutes daily, are most prevalent in the 18 - 44 year old demographic. This group includes pre-parents, young parents, and parents-of-teenagers. The first Baby Boom of digital gaming natives occurred in the late 1980s and 1990s.  They are now all grown up and have Zennials and Alphas of their own.

SOLUTION: 
ALT TAB Modern Arcade focuses on being a social hub for individual and group gaming, with families as a key customer type. The space will offer a wide selection of modern and retro game options and have a higher overall count than competitors in the Greater Atlanta area. The space will be 7,000 - 10,000 sq ft, and contain at least 20 individual seating areas for console gaming, at least 20 stations for PC gaming, at least 20 arcade cabinets, at least 25 seated options for spectators, 2 party spaces, and a dedicated play space for kids 3-10.  A multitude of TVs tuned to streams, live play, and e-sports supports ‘spectator mode’. Programs and events will promote trying new fandoms, from Superhero Speed Dating to ‘Looking for Group’ player pairings. Furniture will be modular, allowing for reconfiguration as needed for e-sports tournaments, workshops, clubs, and special events.

Also on-site will be a full bar serving local craft beer, geek-themed cocktails, and selected wines. The restaurant will offer global small plates and handheld foods. ALT TAB’s menu is not a typical dull standard, and deep-fried foods will not dominate the menu.

PRODUCT/SERVICES OFFERED

MACHINES
High-Performance PC | XBOX X | Playstation PS5 | Nintendo Switch
Vintage Arcade |  XBOX S | Playstation PS4 | Nintendo Classic
Bar-Top Arcade | Atari & Sega Emulator | Oculus VR | Nintendo SNES

SERVICES
Dungeons & Dragons | Library | E-Sports Tournaments | Launch Parties
Warhammer | Playground | Streaming Booths | Cosplay Theme Nights
Pathfinder | Board Games | Birthday/Celebration | Event Space

RETAIL CATEGORIES
Toys | Gaming Equipment | Tabletop Figures | Gifts
Children’s Apparel | Computer Equipment | Board Games | Adult Apparel
Pretend Play | Geek Merchandise | Cosplay Accessories | Cosplay Apparel

METRICS
ALT TAB Modern Arcade will share ownership of business success through all staff roles. Performance will be reviewed transparently with the team, weekly.  Staff will be incentivized to ensure success through a combination of spot cash awards, peer cash awards, and bi-annual profit sharing (5% of net revenue to be shared with staff according to start date).  We will measure success through the following primary metrics:
EXPERIENCE
  • Returning Guest %
  • Net Promotor Score
  • Reviews
  • Membership %
  • Employee Survey

REVENUE/SALES
  • Net Revenue %
  • Revenue per Available Seat Hour
  • Average Revenue per Customer
  • Average Revenue % of Catagory, compared to plan, goal
  • Customer LTV

COST
  • Cost Catagory % as a portion of Revenue, compared to plan and goal
  • Waste %, compared to plan and goal
  • Waste % per customer

Additionally, these Secondary Metrics will be used to manage and evaluate tactical performance
OCCUPANCY & PRODUCTIVITY
  • Customers per Available Seat
  • Customers per Hour
  • Dwell Time
  • Labor Cost per Customer 
  • Menu Item Ordered %
  • Margin per Menu Item
  • Retail Units per Customer
  • Retail $ per Unit
  • Staff NPS or CSAT

AVAILABILITY
  • Availability of Seat by Hour of Day, and Day of Week
  • Availability of Title
  • Availability of Console Type

COMPETITIVE ANALYSIS: 
While there are spaces in the Atlanta area that provide access to gaming, each tends to focus on a particular medium - VR, Vintage Arcade, etc.  Some competitors lack sufficient space for a high count of gaming peripherals, while others do not offer food, or bar.

COMPETITORS


VR1 Gaming, Cumming (9.5m / 21min) 
VR Only, 14 VR machines, 3500 sq ft, no hot food offered, no alcohol. Rate: $50-125/hr 
iSimu VR, Duluth (15.8m / 34min)
VR Only, 12 VR Booths, 3000 sq ft, no hot food offered, no alcohol. Rate: $30-40 /hr
Battle & Brew, Sandy Springs (17.3m / 27min) - MOST DIRECT COMPETITOR
Consoles, PC & Board/Card Games, 11 Console, 24 PC, 5000 sq ft, full kitchen, full bar.  Rate $7-20/hr
Flashback Games, Marietta (17.7m / 35 min)
Vintage Arcade, 47 cabinets, 5000 sq ft., light kitchen, beer only. Rate: $10/hr
Axis-Replay, Atlanta DT (26.4m / 37min )
Gaming Events Space, Consoles & PC, 10,000k sq ft., minimal drop-in play availability, no on-site food/beverage. Rate Unknown
Reverie VR, Atlanta DT (28.0m / 40 min)
Nightclub with VR Focus, Consoles, 5000 sq ft., no hot food offered, full bar, 21+ only. Rate: $40/hr
Joystiq Game Bar, Atlanta (28.5m / 38min)
Bar with Arcade Focus, 22 cabinets, 3000 sq ft, no food, full bar. Rate: $0.25/game
Controller Game Lounge, Loganville (33m / 65min)
Kid-Focused Drop-in, 8 Consoles, VR, Board Games, 3000 sq ft. no hot food, no bar.  Rate: $10-20/hr

ALT-TAB Modern Arcade ADVANTAGE
Our space will optimize a large footprint, providing equal focus to consoles, arcade and PCs, and other geeky pastimes.  Customers can easily switch their focus between each option, or choose to participate as a spectator.  Space will have at least 20 consoles, 24 PC stations, 4 VR, and 25 arcade cabinets, minimizing the chance that there is no availability for play.  Systems will be built to link groups of customers who may not know each other, either in a competitive or cooperative way, to complete games, trivia, or surveys. The space will be equally welcoming to adults, teens, and children.  Our design aesthetic will also drive the ambient vibe, combining lux, modern, and playful. A full kitchen and bar, along with a playspace and retail offering round out a balanced offering to keep bringing in customers. Customers will be provided with ample, lighted, free parking in a high traffic area.   

LOCATION STRATEGY: 
The following list of requirements will ensure ALT+TAB Modern Arcade findss the right home:
  • 7 - 10k sq ft inline or outparcel
  • Class A preferred, Class B acceptable with further review
  • Underserved suburban area, but within 5 mins of an available interstate (75, 85, 400, 20)
  • Average household income <$100,000 w/i 5 miles of 150K+, pop growth >7%
  • Near schools, residential, and anchor; near ‘old town’ centers preferred
  • High traffic intersection or roadway >30,000 VPD
  • Under $22 sq ft retail
  • Available dedicated and overflow parking (min. 50 stalls)

CURRENT CHOICE LOCATION
Stonewood Village, Alpharetta
8580 sq ft, 158K w/i 5 miles, $153K income, 34K VPD, 5 min to 400, 5 min to Alpharetta DT
$14/sqft + $4.5/sqft CAM

INVESTMENT OPTIONS:
ALT-TAB Modern Arcade needs $355,000 for equipment, furniture, fixtures, construction, and peripherals.  Cash flow needs for 6 months of operations (with no incoming revenue) would equal $1,271,000.  The founder's cash injection will be $150,000.

Valuation in the 1st year is expected at $1,869,000 and the 2nd year is expected at $4,300,000.
If financing through traditional loans (SBA), a $1,626,000 loan would require $243,900 in liquid seed capital.

MENTORSHIP

COOPERATIVE OPPORTUNITIES

SEED FOR FINANCING
Per SBA requirements, investors at these levels for seed capital need to be a guarantor of the loan.
1/ Investing $100,000 for the financing seed, we would offer 2x payout ($200,000) from net profits over 2 Years (on or before launch date anniversary of 2024).
2/ Investing $200,000 for the financing seed, we would offer 2x payout ($400,000) from net profits over 3 Years (on or before launch date anniversary of 2025).
3/ Investing the full capital requirement, ~$250,000, we would offer a 10% stake of ownership with a 10% dividend until buyout or expansion.  10% dividend is expected to pay $160,000 per year at full performance.
PARTNERSHIP WITH SIGNIFICANT STAKE OF OWNERSHIP 
If the investor wishes to forgo loans, and wants a significant stake, the Founders are open to discussing up to 49% of ownership.  Having no financing costs would increase the net profit share of dividends from 0.34 to 0.62.  A partner with 49% ownership could expect up to $433,000 per year at full performance.


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