Arcade Origins

Today's post covers the early history of four of the more popular arcade chains of the 1970s and 1980s. It's a little short on details, but I hope to correct that in the future.

Time-Out Family Amusement Center

In 1970, Tico Bonomo opened the first Time-Out Family Amusement Center. Bonomo's grandfather Albert Bonomo had emigrated to the U.S. from Turkey. In 1897 he founded the Bonomo Company in Coney Island and began selling salt-water taffy and hard candy. Albert's son (and Tico's father) Victor invented a new confection called Turkish Taffy  Bonomo Turkish Taffy became one of the country's most popular candy treats (people loved to crack it to pieces before opening the wrapper), especially after Tico Bonomo created The Magic Clown, which ran on NBC from 1949 to 1954 (it continued on local networks until 1959). Created solely to sell taffy, it was one of the first sponsored children's programs.

In 1970 Bonomo sold his interest in Bonomo Turkish Taffy to Tootsie Roll Industries and was looking for a place to invest his money when he encountered some electromechanical arcade games and decided to open his own arcade (he apparently also opened an instant portrait studio around this time). His first location in Northway Mall in Colonie, New York, was a resounding success. The next year, he opened four more locations, including locations in Maryland, Pennsylvania, and Florida. Bonomo opened his business just in time to cash in on the first video game boom and by 1975 there were a dozen Time Outs. By 1978 there were 20. As video game arcades began to gain a reputation as a hangout for unruly teens, Time Out began to revamp its image by brightening up their arcades with brighter colors and more family-oriented design, resulting in more expansion. On December 30, 1986 Bonomo sold the entire chain (which at the time comprised 74 locations - including non-mall "Station-Break" locations - in 15 states, plus D.C. and Puerto Rico) to Sega, staying on as president and CEO. In the early 1990s, Time-Out was purchased by the Mall Entertainment Division of Edison Brothers' (a clothing and shoe maker from St. Louis and Tico retired to Virginia.  He died in Great Falls, Virginia on September 14, 1999.

Photo of a Time-Out - from the excellent Time-Out Tunnel website (http://timeouttunnel.com/)

Time Zone

A Time Zone in Detroit - from the Detroityes.com website

            The similarly named Time Zone was founded in 1974 by Ted Olson. At the time, Olson (who had majored in accounting at the University of Montana) was working as comptroller for Atari when he decided to purchase the company’s street route. After getting the okay from Nolan Bushnell, Olson took the route, along with the rights to the name Syzygy and went into the arcade business for himself. The first Time Zone was opened in a small San Jose shopping center on November 1, 1976. At only 700 square feet, however, the space was too small and after Olson experienced problems with loitering and disturbances from neighboring stores, he closed the location within 18 months. A second, 1,500-square-foot location at the much larger Mountain View Center mall proved much more successful. Like Time Out, Time Zone attempted to create a family atmosphere where adults as well as teens could enjoy the arcade experience. Olson spent $30,000 - $40,000 a year on radio advertising and promotions to push his message. By the end of 1977 Olson had six arcades in the Silicon Valley area and was still growing.

Malibu Grand Prix

In March of 1975, a group of overgrown kids from Orange County CA created the first Malibu Grand Prix near Angel Stadium in Anaheim.  The idea had come about when Ron Cameron, a Malibu investor, was visiting Detroit and came across a miniature speedway where people could drive cars around a dirty track. He took the idea home with him to California, made a few improvements, and started his own business. Initially, the only feature was a miniature race track with three-quarter scale, custom-designed, 28-horsepower, formula one racers powered by Sachs-Wankel rotary engines, which allowed anyone to play Mario Andretti for a dollar a lap. The cars, which were valued at $12,000-15,000 each, cruised along at speeds of up to 67 MPH. The "official fastest time" for each location was posted on a board outside the track. After three or four months, the location installed a half dozen pinball games and a handful of video games (operated by an outside vendor) outside the main building. When the games proved to be an easy source of extra income, the owners tore down some of the offices in the main building to make room for more. When the second location opened up in Fountain View, it included a small game room with about 25 games. The third location opened in Pasadena in July of 1976 with 67 games. The owners quickly realized that using an outside vendor to supply their games was costing them money and began operating their own games. While the race track remained the focal point of the centers, the video games became almost as well-known. By late 1976 the first Malibu Grand Prix's outside of California were opened in Tucson, Denver, and Houston.  As the video game explosion got into full swing, Malibu Grand Prix became one of the largest arcade chains in the country. In 1977, Cameron sold the chain to Warner Communications (owners of Atari) for $4 million. Under Warner, the chain soon expanded to over 100 locations nationwide. The Malibu Grand Prix idea eventually spawned imitators such as Funway Freeway, which had locations in 19 states when Warner sold it to Six Flags in 1980. On December 31, 1983 Warner sold Malibu Grand Prix to a holding company controlled by two Canadian businessmen for $19 million, who later merged it with a company called Castle Entertainment. In 1984 the chain lost $6.3 million on revenues of just $28.1 million. In the first quarter of 1985 they lost $2.4 million more. Ron Cameron fared much better. In 1988 he sold his five acre estate for a reported $7 million - at the time the second highest price ever paid for a home in Malibu (after Johnny Carson's $8.5 million purchase in 1984). In 2002, the last three remaining Malibu Grand Prix was purchased by Palace Entertainment.

Aladdin's Castle

The largest of the Golden Age arcade chains by far was Aladdin’s Castle, which had 450 locations at its peak. Founded by Jules Millman, the chain had its origins in a company known as American Amusements Inc. After graduating from the University of Miami, Millman went to work for World Wide Distributing, a coin-op distributor in Chicago, where he noticed that operators seemed to making money “in spite of themselves” (Millman 1975). Though the games were certainly popular, most operators did not follow sound business practices and had no idea how to promote their games. In addition, coin-op games at the time were mostly located in the “undesirable parts of the city” and had something of a seedy reputation. Millman wanted to change that, and thought he knew how. His idea was to put games in a well-maintained location with a fulltime attendant and to aggressively promote them. Doing so, however, would require large locations, but the only ones that came to mind - large airports and military bases - were already taken by existing operators. Meanwhile, Millman’s uncle, who owned a discount store, had let him put five games at the store’s entrance where they were making over $100 a week. Realizing that retail stores represented a potentially lucrative and untapped location for coin-op games, Millman wondered how much money the games might make in in a dedicated location in an enclosed shopping mall, which were becoming increasingly popular.  

Millman visited mall after mall, only to be turned down flat every time. Then he found one that was having trouble finding tenants and talked them into letting him give his idea a try (Millman 1975). Instead of the typical dark, dirty coin-op game location, however, Millman created a family-friendly arcade where parents could take their kids. He installed carpeting and lighting, banned smoking and eating, and hired fulltime attendants. It was an instant success. Millman established a company called American Amusements that appears to have run a chain of arcades called Carousel Time[2]. To promote the idea, he established a marketing department, which began scanning newspapers looking for announcements of new shopping mall openings and trying to convince the often-reluctant owners to add an amusement arcade. It was a hard sell. Many at the time felt that arcades were hangouts for troublesome teens and hoodlums. The Carousel Time people made a novel suggestion – “You already have kids hanging out here in the mall. Why not give them a nice, well-policed place to have fun rather than having them prowl the aisles and other stores?” (RePlay 11/79) Convincing the mall owners, however, was only half the battle. The company then had to make their new arcades comply with local zoning laws, which could be quite restrictive in the early seventies. Nonetheless, the chain had expanded to around 30 locations by April 1974, when American Amusements was purchased by Bally, which merged it with Carousel Time, then already a Bally subsidiary. Bally then changed the name of the chain to Aladdin’s Castle, allegedly after the Aladdin's Castle funhouse at Riverview Park - a Chicago amusement park that operated from 1904 to 1967. By the end of the year, Aladdin’s Castle had 50 locations and by the end of the next, it had 75.

In the post-Space Invaders boom, the company really began to take off, eventually becoming known as “the McDonald’s of the arcade business.” In 1980, it had 221 locations in 41 states that generated $38 million in revenue. By 1982, with fewer shopping malls being built, Aladdin’s Castle had peaked with 450 locations, counting its various subsidiaries (Pin Pan Alley, Pac-Man Palace, Bally’s Great Escape, and 55 Bally’s LeMans Fun Centers). After the video game industry crashed, Aladdin's Castle went into sharp decline. Bally closed 46 locations in 1984, 88 in 1985, and 47 in 1986 - though in terms of profitability, the chain had its best year yet in 1986. In 1989, Bally sold the chain and exited the arcade business entirely. In 1993, Aladdin’s Castle was sold to Namco, which merged it with Namco Operations to produce Namco Cybertainment.

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[1] Replay magazine, November 1979
[2] The relationship between American Amusements and Carousel Time is unclear. In 1982, William O’Donnell said that Bally had gone into the arcade business in 1972 when it bought Carousel Time, then changed the name to Aladdin’s Castle and merged it with American Amusements in 1974. (Games People 1/15/83). RePlay (11/79) noted at the time Bally acquired it in 1972, “Carousel Time mostly amounted to a route of amusement machine in discount stores in Illinois and across the country” and reported that, “In 1974, with about 30 arcades and minicades on the roster, the name was officially changed to Aladdin’s Castle.” In an interview with Bally’s Tom Nieman, Play Meter (5/77) noted that when Nieman joined Bally, Carousel Time was Bally’s “operating subsidiary” and that Bally later bought American Amusements and renamed it Aladdin’s Castle. Marketplace (8/30/74) reported “Carousel Time has a new name: Aladdin’s Castle Inc. due to the latest acquisition.” Finally, Vending Times (6/74) reported that Bally “recently completed the acquisition of a domestic coin-operated operator…Bally has acquired all the stock of American Amusements Inc. (Chicago). The acquisition will be merged with Carousel Time Inc., a wholly owned Bally subsidiary. The organizer and developer of American Amusements Inc., Jules Millman, will, as of the date of the acquisition, serve in the capacity of president of Carousel Times Inc. He will direct the expanded operations of the firm.” An entity search of the Delaware Secretary of State website shows that Aladdin’s Castle Inc. was incorporated on May 29, 1973. The Aladdin’s Castle v Mesquite decisions noted that Millman had founded Aladdin’s Castle in 1969. In John Britz’s July 1974 deposition in the Magnavox v. Bally case, he said that “Carousel Time” ‘was a subsidiary of Bally that operated amusement devices in malls, that the company had “just changed hands,” and that the chief executive was Jules Millman.