As a kid, Paul Kermizian was younger than most everyone else at the local arcade. He got pushed aside. He had to wait in line. 

Not anymore. Today he can play whenever he wants—and he doesn't even have to keep a pocketful of quarters. Kermizian, now 36, is the owner of Barcade, a hybrid craft beer bar and—yep, you called it—video arcade. With four partners, his longtime friends Jon Miller, Scott Beard, Kevin Beard, and Pete Langway, he launched the bar in two locations: Williamsburg, Brooklyn, and Jersey City. And their retro empire is growing: a third Barcade is scheduled to open next month in Philadelphia.

For five guys who love craft beer and 80s arcade games, the business has been extremely engaging. Kermizian, Miller and the Beards—who are twin brothers—met in college at Syracuse University; Langway is a friend from Brooklyn. All former art or film students, they were working in fields ranging from advertising to graphic design. Their plan was to open one bar and eventually quit their day jobs, then maybe get more choosy about their freelance work if the money allowed.

Fast-forward seven years: Each of the managing directors, as they call themselves, has not only quit his full-time job to focus on the company, but also most of the guys have stopped freelancing altogether. Barcade, the ultimate do-what-you-love small business, has survived the economic downturn that claimed bars, restaurants and some of the old-school arcades left standing around the country—and it is growing.

"The die-hard fans didn't really stop coming," says Kermizian, who explains it this way: "You may cut out the places you go to once in a while, but you're probably not going to cut out your favorite place. Hopefully we're a lot of people's favorite place."

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Gamers at the new Philadelphia location will appreciate the collection of more than 30 titles, including Rampage, Tetris, Arkenoid, Gauntlet, Galaga, and a version of Asteroids that uses a mirror to create 3-D effect. At 25 cents a play, the games are certainly cheap—especially for would-be pros who can play for two hours on a single quarter.

The five friends opened the original Barcade in 2004. The location they chose, on Union Avenue near the Brooklyn-Queens Expressway, was on a gritty block a little out of the way—two subway stops from Manhattan. Moreover, these guys had no experience running a bar, unless you count hosting keg parties in Syracuse. They did research and asked local bar owners for advice. The first person they hired was an experienced bartender and friend who still works at the original Barcade.

"We started talking about this and decided to go for it, pool our resources and take a chance," says Scott Beard, 36.

That first bar cost about two and a half times more than they had estimated, Kermizian says. When they ran out of money, they put the rest on their credit cards.

They owe some of their success to the timely growth of the neighborhood. The building boom of the mid-2000s added scores of high-end condos to Williamsburg, and with them came an influx of new bar patrons. Barcade has long attracted out-of-towners from other boroughs and Jersey. And tourists, too—especially after the bar made a cameo on Sex and the City. They often say, "hey, you should open one of these in my town," Kermizian says.

Before expanding to the two new locations, Kermizian and Miller tried out another concept, with help from other investors and some involvement from their Barcade partners: beer and bowling. Their 2007 opus The Gutter, a Williamsburg bar with an in-house bowling alley, still draws crowds. But because the Barcade model requires fewer staffers and less-regular maintenance, it is cheaper, simpler, and seemed to make more sense for a further expansion. The guys took the first step in expanding the Barcade brand in 2007 by registering the name.

While the recession may not have curbed the crowds at the Williamsburg Barcade, it did cause some problems at the bank. Kermizian says they applied to two banks for financing to open the new locations and were turned down. "We have good numbers, show a good profit and have been in business a number of years," he says. "They said no, it's too risky."

The partners ended up cobbling together the money from family members and close friends. This had a double benefit of bringing in some relatives and friends who had always wished they were a part of creating the establishment, Kermizian says. Barcade Jersey City opened in April, and the guys expect to be able to pay back initial investments within the first year at both of the new locations. They plan to open Barcade Philadelphia in early September.

They are a hands-on team, doing a good portion of the construction and other work at the new bars themselves. In the early years, they would take shifts managing and tending bar, something Scott Beard says he will continue to do at the new location in Philadelphia, where he moved recently with his wife. (The rest of the guys still live in Brooklyn.)

Realizing they couldn't continue to operate in several states alone, they hired someone to oversee some of the day-to-day operations. Kermizian says they have discussed the possibility of opening more locations in the future through franchising.

In the weeks leading up to the Philadelphia opening, the guys spent long days cleaning out the building, a former electrical warehouse that had been full of shelves packed with switches, wires, and lights. Plants were growing through the walls, says Langway, who took great pains to add matching corrugated sheet metal to the walls where they were bare in spots. Together, they built a curving bar that spans what seems like a natural divide between game room and drinking area. The long, winding stretch of wood looks pretty impressive.

Opening up in Philly wasn't an easy decision. When the group first scouted out the warehouse—which is set in a classic, working-class area of Fishtown—they thought the building looked like trouble. "It was a disaster," says Langway. They kept looking. But a year later, the rent had dropped and the deal now included a side yard—perfect for a garden. They signed a lease and got the keys last fall. 

While Kevin and Scott Beard sanded wood to build tables from scratch on a recent day, Collin Thompson, the soon-to-be general manager, painted a half-dozen wooden drawer fronts. Kermizian and Andrew Furmanik of Long Island, the company's trusted game repairman, spent hours scrutinizing the inner components of video games such as Crystal Castles and Frogger. They cleaned track balls, inspected joysticks and even adding a speed chip to Ms. Pac Man that made it run twice as fast.

Of all the partners, Kermizian is perhaps the most tempted by Barcade Philadelphia's new blank high-score board. (Barcade Jersey City's scoreboard was quickly filled, with scores by such patrons as Hank Chien, a New York plastic surgeon who holds the world record for Donkey Kong.)

Kermizian held the high score for Tapper, a game centered on pouring beer, for years in Brooklyn until someone reached 4 million, nearly doubling his score. It takes about an hour to earn 500,000 points, he says, so by his estimation the guy who beat him spent more than eight hours on the game.

With all the work left to do before Barcade Philadelphia opens, Kermizian isn't sure when he'll get the chance to play Tapper for nine to 10 hours and reclaim his high score. But at some point, make no mistake—he will.


Video Transcript

00:09 Paul Kermizian: Barcade is a seven-year-old company. We opened our first location in Brooklyn in 2004. It's owned by five friends; four of us went to college together, and we decided to open a bar that features American Craft Beer and classic video games from the 1980s. We opened our second location in Jersey City, and now, we are preparing to open our third location in Philadelphia.

00:34 Kermizian: Today we are repairing joysticks and buttons and monitor problems. We bought all of these games some time ago; they've been in storage for a while. So once you get to this point where we're about to open; it's like you take the games out of storage, plug them in and find all kinds of problems. These are games that were out when I was from seven to 12 years old, so I was like one of the little guys in the arcade that had to wait to take my turn. But I played most of these when I was a little kid. It's fun to have them back as an adult.

01:14 Kermizian: We had opened our original location in 2004 so by the time we decided to expand and open other locations we were kind of in the midst of that down turn, so the banks weren't too willing to lend money, so we weren't able to find the financing that we thought we would, especially with a successful business; so we had to kinda scrape these two together with loans and family investors and credit cards and such. People are definitely cutting back on spending and going out and things like that, but I think they're more... Maybe are cutting out the going out every night. I mean, people are still responding to Barcade if it's one of their favorite places. You may cut out the places that you go to once in a while, but you're probably not cutting out your favorite place. So, I think, hopefully we're a lot of people's favorite place.

02:02 Kermizian: My partners and I were basically tired of our day jobs and wanted to be a little more choosy about our freelancing and the idea was to make a bar that gave us a little bit of a steady income; so we weren't really thinking of, hey let's open multiple locations, let's make this a chain of any kind. We like classic arcade games and we liked Craft beer and we liked the warehouse environment, and loud rock music, metal and rush; so that's what it became. We just needed a place that we wanted to hang out, and it turned out that a lot of other people wanted to hang out there too.