Has the entertainment complex figured out a way to take its business in the opposite direction of the declining arcade-industry trend? Photo: Dave & Buster's.

Dave & Buster's Entertainment (NASDAQ:PLAY) picked a heckuva time to go public as both the Dow Jones Industrial Average and S&P 500 have seen calmer days.

Although it's disappointing some by pricing its stock at the low end of its anticipated range of $16 to $18 per share, Dave & Buster's shares gained 8% on its first day of trading and are now trading around $19.

While shares are moving up since the IPO, some analysts think the company's union of food and entertainment may be the right combination to allow Dave & Buster's to succeed,but I've highlighted a few reasons why I don't agree.

1. It's a Chuck E. Cheese for adults
Mixing games with food is not a new idea, though it's usually geared toward kids, a la Chuck E. Cheese. Indeed, the arcade-house even considered making a bid for the company earlier this year when D&B's private equity owner Oak Hill Capital Partners was weighing its options.

Dave & Buster's wants to rev up their profits but its industry is on the decline. Photo: Flickr via saeru.

While the chain tries to mix in a hefty dose of sports to make its restaurants an amalgamation of food, sports, and entertainment, the latter niche faces a lot of competition that offsets the benefits of the other two segments.

If you want to combine your sports with food, consider Buffalo Wild Wings (NASDAQ:BWLD): it's got the right mix of the two in its new "stadia" design, but without the distraction of the bowling, billiards, or shuffleboard.

2. Arcade-style entertainment is a declining industry
According to the industry analysts at IBISWorld, arcade, food, and entertainment complexes saw revenues contract almost 1% between 2008 and 2013, and they forecast the segment will continue to shrink in the future as substitute forms of entertainment like home video game consoles and even mobile gaming grow.

Chuck E. Cheese and Dave & Buster's account for nearly three-quarters of the entire industry's revenues (73.6% in 2012, to be exact) with some 7,000 companies competing for the rest, but their rate of growth has been slower than the industry as a whole.

Some analysts think Dave & Buster's have the food and entertainment niche locked up. Photo: Flickr via Roy Niswanger.

While these companies, or similarly positioned operations like GameWorks, might provide more wholesome, family oriented entertainment for property development instead of a casino, the major players haven't shown a propensity for broad-based expansion and future growth will be challenging, particularly as rivals like B-Dubs grow out their own sports-centric model.

3. Restaurants, generally, are facing a tough market
The market researchers at NPD Group found there was little increase in consumer visits to U.S. restaurants during the early part of the year and unit growth barely budged higher, mostly as fast-food increased the number of restaurants they opened. Full-service restaurants saw their unit counts drop 1% year over year, but more telling is that traffic at casual dining and midscale restaurants fell 3% and 4%, respectively.

Things haven't improved as the year wore on, either, as the Black Box Intelligence & People Report showed third quarter traffic came in at 0.7% and the industry hasn't recorded a single quarter of positive comp growth since the recession.

The only spots that are really doing well are fast-casual chains like Chiptole Mexican Grille and fine dining establishments such as steakhouse chains Ruth's Chris Group and The Capital Grille.

Play it again
In short, the market that Dave & Buster's is touting as its strength and what sets it apart from the competition is actually weak, declining even. Amid an overall tough landscape for restaurants it will find it harder to swim against the tide even if its stock is currently buoyant.

Investor may be looking at the adult arcade complex as the next Buffalo Wild Wings, but they just might be better off buying the real thing. Dave & Buster's tried the public markets before, and there's little to indicate it will do any better the second time around.