TSR Newsletter | November 2, 2020
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-- The Stinger Report: Service Message --
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The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .
Wishing all our subscribers, famlies, loved ones, (and those serving) stay safe and well.
Kevin Williams
Publisher, The Stinger Report (TSR)
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Reinvesting in the Entertainment Landscape
Part 10 | # 1044
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Redefining the new phase of Immersive Entertainment coverage in The Stinger Report; and in this tenth part we look at the “Facility Business”, including more developments in the ongoing “Cinema Dilemma”. Then we look at the impact on the 2021 trade Exhibition Front and the cascade of cancellations. And finally, we look at the new thinking behind amusement “Crossing Over” into offering home entertainment verticals.
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Looking at the greater picture that is impacting the international amusement and attractions trade, and we start to see some patterns regarding the effects and developments in the business. As the 2021 sales season is impacted, the ramifications on operations business, as well as new machine sales, looks to be changing in ways that will totally alter the business landscape for the industry long before any possibility of returning to a “normal” strategy.
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- Impact on Facility Business
The impact of the lockdown on facility operation continued to leave its mark on the landscape – the latest news was revealed by RePlay Magazine, concerning the permanent shuttering of some 10 Laser Quest facilities. Owner, Versent Corp., took the move to close these facilities, part of the Threshold Electronics group and their electronics product operation. The North American Laser Quest facility chain offered destination-based laser tag arenas, which first opened in 1993 and, at its heyday, operated some 36 locations. Several sites over the years have been sold off to independent owners, and it is expected that a process of evaluation will be taking place on the viability of the now closed remaining sites. No official statement had been made at the time of writing, but suggestions indicate the operation had been hit hard by the needs of physical distancing with regards to their entertainment offering, and outstanding debts were impacted by the COVID situation.
The constant impact of the lockdown on facility business seemed to be accelerated on those in the laser tag scene (a sector that has been under pressure before the pandemic). Again, revealed by Replay, the latest victim of the current conditions was a 25-year veteran location in San Diego announcing its permanent shuttering. UltraZone Laser Tag has been a prominent laser tag exponent of the competitive entertainment medium since 1995, comprising an over-5,000sq.ft. multi-level arena. In a statement to local media, the operators of the venue said, “…state of California COVID-19 guidelines specific for laser tag would make it impossible for us to continue…” And this is a concern for many destination entertainment offerings that are focused on a style of entertainment that is difficult to operate under restricted capacity measures or have already been impacted by financial difficulties. Commenting on the situation, well respected industry specialist and curator of the Laser Tag Museum & Convention, Erik Guthrie, stated “The industry loses when quality operators such as the team at UltraZone and so many others are forced to close to due to COVID-19, as well as the overburdening of small businesses by governments that do not understand the family entertainment center industry. However, the FEC industry and laser tag is a resilient creature and we are already starting to see a turnaround that bodes well for the overall industry.”
It is not just the smaller venues feeling the extreme pressures. In September, it was revealed that Walt Disney Company was planning to lay off some 28,000 members of its staff – this would include a significant number from their Walt Disney World and Disney Park business units. While 67-percent of these were reported to be part-time members of staff, a significant number of full-time positions were also ended. This a percentage of the 100,000 employed by the company to work at Disney World and Disneyland. These announcements were only focused on the US side of the operation, with no word on the impact on positions being considered regarding the international business, including the cruise line division. Later it was revealed that 411 of these redundancies will hit Walt Disney Imagineering, the design and development division of the theme park operator.
Following on from The Stinger Report’s September coverage of the closure of the MAZARIA entertainment facility in Ikebukuro (the BANDAI NAMCO Entertainment flagship location of the Project-i-Can investment into VR LBE sector); and the suggestion in that coverage that BANDAI NAMCO would be undertaking a more extensive restructuring of this investment was underpinned with the news in October that VR ZONE OSAKA, in Osaka City, would be permanently shuttering at the end of that month. This facility was the first established location in the VR ZONE brand, opened in September 2018. While this latest development seems to spell the end of the rollout of any future VR ZONE facilities in the home island, let alone internationally, there are some elements of the operation that will continue to receive corporation support. One of these is the ‘CG STAR LIVE’ facility tournament competition that seems to have generated a strong following and is being reviewed to be applied in other BANDAI NAMCO amusement locations.
But new entertainment projects continue to open.
The name ‘The Arcade by Hub Zero’ is that of a brand new facility located in Al Khawaneej Walk, Dubai – created in partnership with D&B Venues – and also sharing space with Roxy Cinemas Al Khawaneej, located next door to the first arcade venue. The operation comprises a mix of 50 stimulating games, including what are described as artificial intelligence, virtual reality, or motion capture systems. Along with comprising a conventional arcade space with the latest video amusement and a redemption prize area, the site also includes a sports area for a unique football experience. This new facility opened in September as one of the many UAE mall-based entertainment properties that emerged from lockdown. This facility is not to be mistaken with the larger Hub Zero futuristic immersive attraction facility in Dubai that closed its doors at the beginning of 2020. This new operation is attempting to salvage some of the brand and available hardware, towards offering some compensation for the need of a strong FEC in the location, described in marketing as “same great experience at a new location”.
Motion simulation and attraction developer Brogent Technologies was revealed to have signed a non-exclusive patent license agreement to be able to manufacture the ‘Voyager VR’ motion chair. Brogent (known for its ‘I-Ride’ attraction simulator) received the license from the platform developers, Positron, under their new global intellectual licensing program. The company will be manufacturing its own version of the ‘Voyager VR’ for release for location-based cinematic VR. This is what Positron calls new XR cinemas – based on their semi-enclosed individualized pods using VR immersion. There is currently no word on the first installation of this XR cinema from Brogent.
The cinema sector saw news that one of the latest chains was looking at a complete suspension of business, abandoning plans to reopen their sites till 2021. Cineworld is the world's second-biggest cinema operator (owner of the Regal Entertainment Group), with locations in the United States, Britain, and Ireland, and employs some 37,482 staff across 787 venues (with 546 sites in America). The company revealed to the media that, barring major injections of support from respective governments, they would be forced to mothball their operation until 2021. The operation closed all its cinema screens in March, but stated to the media that it blamed the COVID impact as being seen more heavily with the latest announcement of a tentpole movie release being moved back to 2021, with the new James Bond movie, "No Time To Die". Other such news has now helped with movies "Black Widow" and Steven Spielberg's "West Side Story" adding to the 2020 desert. The operation is reporting a $1.64 billion first-half loss, with its shares falling 82-percent this year. The difficulties of the corporation were seen in the collapse of the Cineplex Entertainment $2.1b acquisition bid, later terminated by Cineworld due to claims of “material adverse effect and breaches" – that would lead to a legal dispute. Without a governmental handout, they felt it was best to mothball their plans to reopen their theaters until a more favourable 2021 timeframe. How many other movie theater chains will follow this lead is unclear, as is the status of Cineworld’s staff? Another cinema chain that reflected the desert of tentpole movies, and the loss of Bond, was Odeon. The chain announced that they would be reverting to an opening plan that would see, in the UK and Ireland, a weekend-only schedule until the start of next year.
While this move will impact some 120 theaters in this territory, employing some 5,500 staff of the UK/EU team of Odeon, on top of those at Cineworld – it is obvious that this will not be the only theater business that will be taking drastic measures to address the lack of tentpole revenue generators. It is expected that several other cinema chains will be making major restructuring announcements in the coming weeks, linked to this initial development.
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- Upheaval Continues for Trade Exhibition Plans
The cascade of cancellation that has struck the exhibition and conference scene internationally, following continuing COIVD measures, has continued to be felt. We have already charted the issues that impacted IAAPA, and the European amusement trade events – but the service and technology providers have also felt the lack of a sales platform. The Consumer Electronics Show (CES) event had reverted to a virtual event for their 2021 season, but some organizers were unable to pivot to a virtual approach. September saw the announcement that event organizer Exponation LLC had filed for Chapter 7 bankruptcy. As the organizer of the major Digital Signage Expo (DSE) taking place in Las Vegas during November, the news of the bankruptcy came while it was revealed that DSE 2020 had been abandoned. This was an event that expected to attract some 150 exhibitors and 4,000 industry professionals – in support of the Digital Signage Federation (DEF), started in 2010. The Expo organizers were unable to look at an alternative approach to presenting its wares and so illuminated the stresses within the operation. The DEF revealed the closure of the organizers and that they were working on plans for the future of the event.
Another major event, and for many the last of the 2020 season notably still undecided for the year, was MAPIC 2020. And at the beginning of October, it was announced that this international retail property market would revert to taking place entirely online via the new ‘MAPIC Digital platform’. The trade event had become a growing area of interest for the entertainment and attraction market, as the retail and mall sector rushed to embrace “Entertainment Anchors” to address a decline in their business. This was supported by the LeisurUP conference session that had invited numerous members of the amusement and attraction scene to present on opportunities for the retail and mall industry. The Stinger Report has reported on the show and conference for several years, and its unfortunate clash with the IAAPA Orlando event had caused some friction, but management changes at MAPIC had striven to address the gulf with a move to cancel the physical event and revert to an online presence. Sessions are still planned to cover the amusement and attraction adoption into this scene, and we will arrange to cover them, and possibly take part. The organizers (Reed MIDEM) were also bullish to look towards the next physical event, with MAPIC and LeisurUp planned to take place in Cannes in November 2021.
The impact of the show upheavals and pivoting continued its creep into 2021 – along with the fallout of the cancellation of EAG International Expo until a 2022 gathering, (show organizers (Swan Events) and UK trade association BACTA reported they are exploring virtual conference plans for 2021). The next largest beginning of year trade event in London revealed the impact of COVID on its plans. The International Casino Expo (ICE) held in London, and one of the largest events to take place at the London ExCel exhibition center, saw the organizers (Clarion Gaming) take the bold step and move the event to June 29th to July 1st of 2021.Originally considering an April date, the organizers now hope projecting the show some six months into the year will see a better environment for holding a physical convention. And at the same time, they announced the colocation of their iGB Affiliate London (dedicated casino and gaming conference). In support of the ICE events, Clarion will be organizing several digital conferences called “The Road to ICE”, hoping to impart useful information up to the physical event in June (starting February 2021).
Following hot on the heels of EAG and ICE, the next 2021 amusement and attraction trade event to be impacted by the COVID situation came with the February 2021 schedule, and the announcement that the Japan Amusement Expo (JAEPO) had been cancelled. The decision was announced by the Japan Amusement Industry Association (JAIA) – it was revealed the association was considering holding an online business meeting instead of an physical exhibition, although information was still being formulated and would be announced soon. This was then followed with news of Indian Association of Amusement Parks and Industries (IAAPI), the region’s largest trade expo, also postponing. Previously schedule for March, the event organizers and local trade association took the decision to cancel the event and move to a February 2022 date, as revealed by Intergame. The Dubai Entertainment Amusement & Leisure (DEAL) exhibition, scheduled for March, was also announced to have been cancelled by its organizers, marking a hard decision for the organizers and local trade.
All eyes then turned to association/organizers of Amusement Expo (AEI). It was revealed, only a matter of days after the news of ICE, IAAPI, JAEPO and DEAL, that AEI would be moving its dates. In a decisive move, the operation decided not to abandon its event, but to move it three months later than the March date, and hold AEI 2020 on May 5-to-7th, still at the Las Vegas Convention Center in Las Vegas. This move from the usual “Spring Cycle” (based on buying habits for amusement operations) was inevitable under the current climate, and one of the two trade associations controlling AEI stated that, although a bit later, the show was not out of this traditional cycle. The show continues its usual format, with support from the National Bulk Vendors Association and Laser Tag Museum, as well as the AMOA and AAMA. AEI is shaping to be the first real physical Western amusement trade event for the last 15-months (fingers crossed)!
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- Cross-Over Explosion
The latest company from the amusement trade to embrace a new vertical in offering consumer grade variants of their proven amusement entertainment (“Home Arcade”), is ICE Games. The company launched its ‘Home Arcade Games’ sales operation, with a selection of the most popular amusement pieces reconfigured for rec-room and den placement. New cabinet configurations will be on offer from a dedicated website that went live in September and will be updated soon with the full range on offer. We had already seen UNIS Technology launch its Elite range, and obviously we have had the STERN Pinball range of rec-room cabinets.
The “Cross-Over” between the “Before COVID” (BC) market and the “After COVID” (AC) markets has gained momentum. We have reported before on those corporations that have pivoted to include a consumer variant to their commercial entertainment offering – seen in the VR scene. SPACES pivoted to a VR-based video conferencing platform, resulting in its acquisition by Apple; or the recent announcement that Dreamscape Immersive would be including an immense VR “laboratory” capability to its offering. VRstudios has been working hard on its own new vertical, and recently announced its ‘VRstudios Sports’ platform, offering the ability to link in-home VR players with those taking part at Out-of-Home venues. This is the most ambitious development of the “Cross-Over” approach to the business, driving interest to the venues, and creating a competitive environment perfect to feed the needs of eSports competition. Supported by a persistent player profile, that includes leader-boards, the platform has been developed to create repeat visitation, as the company has labelled this “Connecting the player experience @Home and @LBE”.
Another example of the pivot that is reshaping the VR development sector, and the embracing of new “Cross-Over” business verticals, comes with UK-based IMMOTION announcing the launch of its first consumer product, 'Let's Explore Oceans'. The VR experience encompasses ten different adventures which transport the player into an ocean full of fish and sharks – an “edutainment” experience all within the comfort of the player’s home. IMMOTION is selling this as a complete experience, with a VR headset and “magical holographic cube” that is used by the customer to launch the experiences (both AR and VR). This new vertical is building on the accumulated experience and resources for the ‘Undersea Explorer Virtual Reality Theater’ at the Mandalay Bay Resort and Casino in the city, as well as other location-based installations IMMOTION has developed. This new operation will focus on new consumer experiences and the corporation has retained an ex-Sony consumer game executive to steer the endeavour.
Social fun has grown in the “Cross-Over” environment of the post lockdown business. A venue operator that has embraced a social but remote strategy, adding this vertical to the mix, is Two Bit Circus. The LA-based UEC concept has been impacted, as all venues, by the COVID measures but has still continued to innovate. Recently the company launched its ‘Two Bit Circus Remote’ – a video conference platform-based channel to offer entertainment to those visitors remotely. The “Play-from-Home” themed games can be booked, and the users have a live representative – themes include Halloween, birthday parties and holidays, with a gameshow style presentation, offering social fun at home.
Concerning continued investment and innovation in the LBE VR scene, and it was announced that VR studio Secret Location has partnered with content providers such as Escape VR, HOLOGATE, SynthesisVR, and VRstudios, to launch three new VR arcade experiences, including ‘Blasters of the Universe: VR Bullet Hell’, ‘Blasters of the Universe: Infinity Forever’, and ‘Paranormal Pest Patrol’. These games are specifically created for location-based VR application and will be available across the platforms of the partners.
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The Stinger Report will now move forward with the next instalment of this detailed retrospective of the factors impacting the industry and the way they are being addressed in the next report.
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November 16-17
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November 16-20
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November 2021
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January 6-9
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January 2022
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January 11-13
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January 2022
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January
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June 29 - July 1, 2021
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