In Brooklyn's warehouse-turned-artist district of Williamsburg, young hipsters flock to Barcade to sample its roster of microbrews and mingle with the likes of "Pac-Man," the Mario brothers and "Frogger."
Walls of the bar, which runs on wind power and has its own MySpace profile, are lined with dozens of bulky, old-school arcade games that decades ago lured coin-clutching teens to crowded, dark rooms with deceptively addicting game play.
Barcade's popularity among Williamsburg's 20- and 30-somethings reflects a wider trend in the video game industry — "retro" games are back as parents introduce their offspring to the beloved games of their youth.
• Click here to visit FOXNews.com's Video Gaming Center.
Few segments of the $30 billion global video game market needed it more than the U.S. arcade business, which has shrunk to about a quarter of its peak size.
In the heyday of the mid-1980s, there were more than 10,000 arcades in the United States and about 1.4 million games placed in myriad locations, from teen-mobbed mall arcades to convenience stores, said Michael Rudowicz, president of the American Amusement Machine Association.
The number of arcades shriveled to about 2,500 during the industry's nadir roughly four years ago on the heels of skyrocketing shopping mall rents and competition from console gaming.
The count of U.S. arcades now stands at about 3,500 as "Pac-Man," "Asteroids," "Tron," "Centipede" and other stars of the golden age of arcade gaming ride a comeback wave unseen since the start of Sony's PlayStation home console era.
"It's quite a resurgence," said Rudowicz.
MORE THAN NOSTALGIA
Nostalgia is not alone in fueling the rebound, which is also getting a lift from corporate layoffs that forced some middle managers to reinvent themselves as operators of family-entertainment centers.
Talented game makers, who were wooed by big-budget console-game studios, are also returning to their roots — having grown weary of hulking, high-risk projects and assembly-line specialization.
Among them is former Midway Games Inc. (MWY) designer Eugene Jarvis, who founded game maker Raw Thrills in 2001 and has since turned out coin-operated hits like "The Fast and the Furious" driving game and "Big Buck Hunter Pro" — a game that introduced trendy urbanites to hunting.
"Big Buck" was last year's top arcade game, selling 7,000 units, said Ryan Cravens, marketing manager for Betson Enterprises, which distributes arcade games and has a partnership with Raw Thrills.
National chains like AMC Theaters, child-focused U.S. restaurant franchise Chuck E. Cheese (CEC) and bowling alley operator Brunswick offer a steady rotation of arcade games, including Japan's popular import "Dance Dance Revolution."
Nolan Bushnell, founder of the original Atari game company and Chuck E. Cheese, last year opened a swanky restaurant with video-game equipped tables in a suburban Los Angeles shopping mall. His new target audience is the adult dating set.
Bushnell and other seasoned arcade industry players say Generation Y, which includes individuals as old as their late 20s, is discovering arcade gaming's mix and mingle mode.
"The Y generation communicates by word of mouse," said Rudowicz said. "It's cool to get out to play with your peers."