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> The problem is that in 2024, kids can play video games and watch stupid videos in the comfort of their own home

I always thought of Chuck E. Cheese as being aimed at hosting larger children’s gatherings, freeing parents from concerns about space or catering. The video games would just be an extension of things they already want to do, but the draw is no cleanup/planning.

Considering how curated children’s activities have become (no more "free range" children), and how expensive housing is (more renters, less likely to host a big bash), it could actually address a growing need.

Whether it’s more attractive than booking a dedicated kids venue and just ordering pizza is open to debate.

Anecdotal, but all the 2-9 year olds who's party's we attend are at similar places to what you describe, but specifically NOT ever Chuck E. Cheese. It's usually a bouncy place, or dave and busters, or a special rental party place of some type.

>Radio Shack. Stop selling electronics components, and start targeting to the bigger market of cell phones. Have no competitive advantage over Best Buy or cell phones stores. Keel over.

I was a radio shack employee as a teen in the 90s, right before the pivot to cellphones started. I joined the Army and got the hell out of there right before the 1998 catalog came out, the one with the Sprint PCS partnership on the cover. I helped install and stock the Sprint furniture and signage.

At my store and every single store I was aware of, if they had not pivoted to cellphones they would have gone out of business in 2000.

By 1998 people no longer purchased computers at electronics stores. They either bought them from Gateway, out of PC Magazine or Computer Shopper, or from Walmart.

By 1998 people no longer bought CB radios from electronics stores. They no longer saw Optimus or Realistic scanners/AV receivers as desirable products. Throughout the 80s and early 90s the Japanese brands snuffed out the cheap Radio Shack brands.

By 1998 people hadn't purchased electronic components in volumes high enough to turn a profit (needed to pay wages, rent, and buy inventory) in 10-20 years.

Even in the late 90s, components were a vestigial organ, a money pit, a revenue black hole.

"But I used to buy capacito.." You were the exception.

You were the atypical customer.

You literally lost Radio Shack money and hastened the transformation every time you walked past the CD players and plasma spheres towards the back of the store where the components lived.

> At my store and every single store I was aware of, if they had not pivoted to cellphones they would have gone out of business in 2000.

Let's shorten this: "if they had not pivoted, they would have gone out of business in 2000." A pivot was needed, and a long time earlier. They key question is which pivot.

Identifying a big market, with a lot of competition and no competitive advantage, was better than nothing, but worse than identifying a market with some competitive advantage.

> You literally lost Radio Shack money and hastened the transformation every time you walked past the CD players and plasma spheres towards the back of the store where the components lived.

True.

To make money, they would have needed to monetize me for a lot more than the price of a component. Have a quick look to see what Russian School of Math charges for afterschool math classes, what summer STEM camps cost, or tuition at a university. More critically, look at the derivative -- which prices are going up and which are going down.

If you earn 50 cents selling me a resistor, I'm losing them money.

If you earn $1000 teaching my kid something about electronics. All of a sudden you need far fewer of me, and you broaden the appeal to anyone educated with money and a child.

They had everything in place to do that, right down to wonderful educators like Forrest Mims.

And if they had done that well, there would have been many more of me around now too.

>Have a quick look to see what Russian School of Math charges for afterschool math classes, what summer STEM camps cost, or tuition at a university.

None of those are geographically distributed physical locations that need to be staffed and operated constantly. They're monolithic institutions, pop-up restaurants of learning, or virtual.

I would have used Kumon as an example except the comparison breaks down when you realize parents pay Kumon a lot of money to increase their children's test scores, and very few schools test for hobby electronics.

Pivoting to your plan would have achieved the same result: the death of Radio Shack.

Preserving a brand for the sake of preserving a brand doesn't make sense.

Customers don't exist for after-school hobby electronics classes for teens at over 8,000 locations across the US. So you pivot anyways (to a sector you have no practical or institutional knowledge in, which doesn't exist already), close down 7,000 stores (to roughly match the number of Kumon locations), get rid of all of your inventory because you don't have the scale at 1,000 small locations to make competing with big-box or online make any sense and then-- bam!

Radio Shack's dead anyways.

> Customers don't exist for after-school hobby electronics classes for teens at over 8,000 locations across the US.

I'm not sure that's obvious, at least if you don't completely restrict yourself only to specific kinds of electronics, eg. have computer assembly, troubleshooting, phone and other device repair classes/workshops, etc. The most successful pivots create a market where there previously was none.

> None of those are geographically distributed physical locations that need to be staffed and operated constantly. They're monolithic institutions, pop-up restaurants of learning, or virtual.

I think you're misunderstanding how these operate. Almost all of these are staffed and operated for at least the same number of hours as a typical Radio Shack location.

> to a sector you have no practical or institutional knowledge in, which doesn't exist already

No, Radio Shack had more institutional knowledge here than just about anyone else. They made electronics kits, wonderful books, etc. A better example is AoPS opening up physical tutoring center (which they did, and which has been very successful).

> close down 7,000 stores (to roughly match the number of Kumon locations), get rid of all of your inventory

If you do this, you're managing the pivot like an idiot. Here is how you pivot:

1) Start a summer camp at one location. Iterate on the program until it's efficient and turnkey.

2) Start a small number of afterschool programs in a similar fashion

3) See what it takes to be successful. Perhaps grant some kind of certificate for those, and ideally, frame it so it can go on a college application, or if you're really ambitious, so amount of college credit. I can name a dozen other places this could go, but critically, it takes a bit of financial elbowroom to have time to explore and pivot like this.

Once this is going, expand reach to more and more stores. And do this in 1990, so you have time and elbowroom, rather than in 2000.

For big institutions, pivots almost never work wholesale.

> close down 7,000 stores

Scaling down was probably necessary at some point, but bankruptcy was not.

Scaling down can be followed by scaling back up.

> The problem is that in 2024, kids can play video games and watch stupid videos in the comfort of their own home

With that thinking, why do restaurants exist when you could just eat from the comfort of your own home (or going to a sports game in-person, etc).

What’s being sold is the experience and/or convenience.

In the case of Chuck E Cheese, it’s a bit of both. Parents get to buy an experience for their kids, and if it’s for a birthday party - they are buying the convenience of not having to host/cook/cleanup a party.

Cooking food on par with a restaurant can take literal hours.

Turning on a TV/Home console takes seconds. The convenience factor is not there.

I think that the more important factor is that home console games are genuinely a better play experience than what's in arcades nowadays. The graphics are better, the game quality is better, etc.

Minecraft Dungeons vs. Minecraft Dungeons Arcade is an interesting case study. Introducing arcade mechanics designed to prompt kids to put more money into the machine legitimately makes the game less fun. Every few minutes you're interrupted and taken out of the game and back into meatspace so that you can put another couple dollars in the slot. And some of the more interesting elements of the game had to be removed because there's no saving your progress in the arcade. And you and your friends are crammed in around the cabinet, either constantly bumping each other with your elbows or playing in a mildly uncomfortable position to try and keep your elbows in. At home you can spread out on the couch or floor.

Back in the 80s and early 90s I put up with a poorer gameplay experience because arcade machines still had noticeably better graphics. (Dragon's Lair might be the poster child for this phenomenon.) But that just isn't the case anymore.

>Back in the 80s and early 90s I put up with a poorer gameplay experience because arcade machines still had noticeably better graphics. (Dragon's Lair might be the poster child for this phenomenon.) But that just isn't the case anymore.

Yeah, I mean even with games that had perfectly equivalent gameplay with debatably better controls like Street Fighter 2 arcade vs home, you still got 90% of the experience with the home version. Nowadays the best reasons to play at arcades are prohibitively expensive hardware-specific games like DDR, other more advanced Japanese rhythm games like BeatMania, racing games, and mecha piloting simulators.

The only other thing that could work well in an arcade model nowadays would be a high end VR setup, but ideally you'd have your own sealed booth for that with an omnidirectional treadmill. They were starting to take off before COVID shut most of them down for good. Here's hoping VRcades do eventually become more of a thing again.

Well when you host a kids party at your home you now have to bring food and clean up. And chuck e cheese can handle a lot more screaming children than your home ever could.

Bookstores do have upside over pure online stores though, they can lay out their shop with interesting books and the like, personalised recommendations from staff, organise events, rebrand as a coffee shop, etc etc etc. Sure, pure book shops that sell books are at a disadvantage, but in my country there's still plenty of local book shops that at least for now keep their head above water.

Radio Shack could've had a field day when the Raspberry Pi and co came around and made electronics and programming a hobby for the masses, especially if they rebranded into a hacker space of sorts and organised events and classes and the like. Whether that would've saved them is another matter though, as the Raspberry revolution also came with very cheap and affordable electronics, which only works if sold en masse.

That's exactly my point. Many of those bookstores survived.

The ones that died were the ones who tried to lower prices to compete with online, had commercial books selling shelf space (rather than curated selections), and minimum-wage employees who didn't know what they were selling.

I don't mind paying for good books, and what I'll pay for is having a person who has read a lot of books and can recommend what I'll enjoy.

I take my kids there a few times a year. They are both under 10 and love it.

The price also isn't too bad: $20 for unlimited plays on any game for an hour.

I've noticed the similar pattern and always wondered how Micro Center seems to manage to do OK.

They're not over expanded and are generally fun to visit. They basically have the right number of stores to interest ratio in an area and they're competitive on pricing.

That's most of it, but there's also MAP. A lot of products Microcenter cells have minimum advertised pricing. That means brick-and-mortar can compete with online and make decent margins.

If Amazon / Walmart sells something for $149, and Microcenter does as well, I might go with Amazon / Walmart for convenience of having it shipped, or Microcenter for speed of having it now.

MAP can give pretty high margins too, in some industries.