Gamer cashes in on hobby: Arcade cabinets combine old titles, new technology

Rick Barretto started filling his basement with arcade games soon after graduating from Indiana University. An avid gamer since his youth, he loved to play, but to get the games he wanted, he had to buy fullsized arcade cabinets-12 of them.

His basement was only so big, and his wife’s tolerance only so high.

“My wife was saying, ‘There’s got to be a better way,'” said Barretto, 39.

So he put his college computer-science classes to work and spent more than a year developing a way to combine all the games he loved-everything from Missile Command to Tron-into one arcade cabinet.

By 2000, he had a finished product and he started DreamAuthentics to sell it.

“I just wanted to build something I would buy,” he said.

That “something” is an arcade cabinet with a computer PC for a brain. The technology allows users to play thousands of old and new games.

Indianapolis-based DreamAuthentics offers four different cabinet models for home use. Each comes with 12 licensed classic games, like Centipede. Owners also can load off-the-shelf games like Halo into each unit through its computer.

The company made a profit in its first year, and Barretto said sales have increased every year since, although he won’t divulge annual revenue.

Today, DreamAuthentics has customers around the world, its product has been featured in Money magazine and sales are expected to grow tenfold in the next five years.

“We see tremendous possibilities,” Barretto said.

Industry watcher James McGovern agrees. Dream-Authentics has high growth potential, given arcade games’ place in history, according to the editor of online publication, a site devoted to arcade machines and video games of yore.

Arcades were a popular hangout when today’s 30-somethings were coming of age, McGovern said, and they may be looking to recapture their youth.

“Any type of pop-culture event, if it happens in these formative years, it leaves an indelible print,” he said. “The generation that [first] grew up on video games is just now getting settled and has disposable income to spend on hobbies.”

With this rising interest in reliving the arcade experience, Barretto has a solid market, McGovern said. Plus, “it’s just a hoot to have one,” he added.

Barretto also hopes to reach other demographics, though. Each cabinet is like a generation blender: Since it runs on a computer, it can be used to play DVDs, surf the Web and blast MP3 music files. Recent versions can also hook up to an Xbox or Playstation.

“If we’re using technology, we might as well use today’s,” Barretto said.

Before Barretto started DreamAuthentics, he ran a national business selling digital video technology over the Internet. He closed that firm shortly before starting DreamAuthentics, but drew from the experience to set up his new company online.

Until recently, he had not done any marketing and relied on word-of-mouth and the Web site to generate sales. Last month, Barretto hired Fishers-based BlastMedia to handle promotions.

Various suppliers provide parts for the arcade cabinets, which are then assembled at one of four manufacturing centers across the country, including one in Fishers.

Company employees also wire the computer to “talk to” the arcade’s control panel, Barretto said.

The control panels can accommodate two to four players, and through the company’s Web site, customers can choose from many options: what color buttons to put on the panel, whether to have controls that light up, or if they want spinners, joysticks, light guns, trackballs, fight sticks-even cup holders.

“We’re the first in the industry to have that level of customization,” Barretto said.

Customers can design the whole cabinet online and have it at their door, ready to play, two to three weeks later.

Prices range from about $3,000 to $6,000, much more than the $300-$1,000 an enthusiast might pay for a used machine at auction or through a dealer.

A company like DreamAuthentics probably sells about 100 units a year, said Bill Loguidice, editor of the online publication, but demand for such products is heavy enough that it could do even better.

Barretto isn’t worried about his product being too expensive, saying the quality justifies the cost.

Loguidice concurs. He spent two weeks checking out options before buying a DreamAuthentics arcade cabinet for his own home. He also plans to use it for a book he’s writing on the 35-year history of home video and computer entertainment systems.

“There are other competitors out there, but as far as the quality of components and the professionalism of the business, I think it is hard to find an equivalent,” Loguidice said.

Rich Hall, president of Indianapolisbased Ace Mortgage Funding LLC, has a similar story after buying a cabinet about a year ago.

“I checked out a high number of units and options, but this unit had so many more games and four controllers. None of the others were really a good option,” he said in an e-mail.

DreamAuthentics’ units expand to hold more than 4,000 games and can be made Linux- or Mac-compatible. Most other similar products come with a fixed number of games and are not as easily compatible with other technologies, Barretto said.

For now, Barretto’s focus is on increasing promotions through BlastMedia and scaling up production capacity.

In the meantime, his main concerns are finding venture capital to fund the expansion and deciding if the company can stay in Indiana if he can’t get the funding here.

And, of course, teaching his 5-year-old old how to play Pac-Man.

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