Making your family living area a game-friendly spot may be the way to go if you're big on fun but short on square footage. The elements of a game room can work almost anywhere if you're willing to blend functions. It's an effective way to make your home a casual and lighthearted place to hang out, too.
You may be in for some haggling over which activities take precedence, but one big advantage is that consolidating family and gaming activities will at least keep everyone together in the same space. Define furniture groupings for specific functions, and provide room dividers like shelves and screens for better functionality and fewer arguments.