Stinger Report - 10/05/2021

TSR Newsletter | May 10, 2021

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-- The Stinger Report: Service Message --

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)

Entertainment Facility Bonanza!

Part 1 # 1069

Report Skinny

In The Stinger Report #1069 – This issue covers in detail:

1. [BREAKING NEWS] One of the new owners of some PAC-MAN Entertainment sites is revealed, as well as how GENDA SEGA Entertainment undertakes business reforms to cement its position.

2. [TRENDING NEWS] Mixed Use Leisure Entertainment (MULE) venues gain momentum, along with some unique new concepts that look towards establishing themselves.

3. [TRENDING NEWS] Panasonic Business holds an important and influential virtual conference to reveal the next projection technology that points to the impact for the next generation of attractions in the industry.

4. [BREAKING NEWS] eSports and Sports Betting developments will be revealed, including news of a new re-branding at Dave & Busters, and changes at Chuck E. Cheese as they prepare for Summer.

….and much, much more!

To read the full Stinger Report, register for your subscription here.

- The Stinger Report, published by KWP and its director, Kevin Williams, is the leading interactive Out-of-Home Entertainment news-and-views resource, covering the immersive frontier and beyond.

Main Report

Fast development and investment is underway as Out-of-Home Entertainment is seen as hot, as the audience looks towards the ability to get out and about once again. This series of features looks at the key trends that are gaining momentum, and also the reappearance of a business model that has been seen before – hoping this time it is here to stay.

- Entertainment Invests in A New Future

There has been a lot of chatter in the lockdown market of investment being made towards opening new “Mixed-Use Leisure Entertainment” (MULE) operations. The owner of The Stinger Report, KWP, has been instrumental in its own moves in this direction, co-founding the retail entertainment facility operator and LBE developer Spider Entertainment. This is a new opportunity for a new generation of entertainment facility business, both making advantage of the available retail venues, and also looking at available properties towards creation of new larger entertainment spaces.

This is the logical progression from traditional ‘Street Route’ business to that of ‘mall arcades’, then to ‘Family Entertainment Centers’ (FEC), to the next generation of’ Mixed-Use Entertainment’ facilities and ‘Location-Based Entertainment’ sites. We are starting to see several new openings from new and established names that seem to illustrate a growing momentum towards opening new businesses in preparation of the expected influx of guests.

During the beginning of the year, we have charted varied examples, such as Cineplex Entertainment revisiting its ‘Playdium’ concept, and opening a brand new 30,000sq.ft. facility in Dartmouth Crossing mall, Canada (comprising bowling, amusement, and attractions – with F&B). We have also seen Scene75 Entertainment Center announcing its latest 135,000sq. ft. FEC opening in Chicago, Illinois (converting a former Romeoville Sam's Club). This is a venue that expects to attract more than 400,000 visitors per year. This continues the crossover into “retail-tainment”, embracing available retail space, as we also reported with the 100,000sq.ft. ‘Tilt Studio’ opening in South Carolina, by owners Nickels & Dime. This saw a FEC amusement and redemption site converting a recently abandoned JC Penney mall department store.

The popularity of entertainment space [Cincinnatiusa]

Speaking of the upheaval in the market, and the changing landscape, we have additional information based on the previous news of the shutting down of PAC-MAN Entertainment (previously NAMCO USA), by its Japanese parent. One of the three buyers of the operations assets was revealed, with the news that National Entertainment Network (NEN), amusement and bulk vending operation, had acquired 760 of the NAMCO sites, making them the largest game room operator in North America (according to their own information).

The NEN deal will see all 500 Walmart-based amusement sites, as well as cinema, mall, and arcade venues, retained in this acquisition. The company is not acquiring the non-revenue sharing mall locations. Further details on these remaining locations, and if they will undertake re-branding of the sites, was not revealed. Nor was any further detail on the remaining managed locations, including ‘Pac-Man Zone’, ‘Pace-Man Café’ and ‘Pac-Man Entertainment’, the flagship in Chicago – or the still unnamed two other new buyers.

While the operation was restructuring its America subsidiaries, and passing on its North American facility business, BANDAI NAMCO in Asia was expanding. Following on from the news The Stinger Report ran, concerning the active immersive entertainment facility concept ‘VS PARK’, the company had started to roll out in Japan with a third site of its new chain. News broke that the concept would now be seeing its first Chinese placement (first overseas store). ‘BANDAI NAMCO VS PARK’ will be opening at LaLaport Shanghai Jinbashi Store, in China. The ‘VS PARK’ concept will be deployed in the store with some 26 different dynamic and unique activities. The location is opening at the end of April, with news of other new opening expected to follow soon, as part of this aggressive rollout schedule.

Artist’s rending of the first Chinese VS PARK [BANDAI NAMCO]

This was not the only increased investment in a physical entertainment facility business from BANDAI NAMCO Amusement. In a mass rollout, the company announced they had opened 25 stores nationwide, with ‘Gashapon Department Store’. This is a retail-based “Vendertainment” offering – Gashapon being a capsule toy specialty store. These capsule vending experiences have proven popular internationally, with several examples in the West, predominantly treated as vended business. But with this big push by BANDIA NAMCO, they hope to establish a dedicated business operation based around their popularity. This is a growing popularity and other amusement venue operators are looking to diversify into this sector – just as news broke of this development, it was announced that CAPCOM would be rolling out its latest interpretation of this scene, with ‘Capsule Lab’, and a number of mall-based Gashapon venues.

Concerning the other side of the paradigm, and some information regarding the structure of the newly acquired SEGA Entertainment facility empire emerged. Now under the control of its new owner, the nearly 200 GENDA SEGA Entertainment facility operations in Japan revealed restructuring measures were underway. Described as “business reforms”, the facilities have started their rebranding and adoption of new infrastructure to bring the operation up to date,and this includes the use of a new online communication tool between the 3,800 employees and management (named ‘Hata Luck’). This electronic bulletin board supports an information portal for staff communication and problem solving. The system is able to be accessed by smartphone and tablet app, allowing GENDA to streamline the facility staffing and management process. This platform is part of what GENDA SEGA Entertainment sees as a “Digital Transformation” for the operation, shaking off the previous SEGA business style – with new social media contact with players (although still no word on ALL.Net). These reforms are examples of the modernization process that will be felt across all entertainment facilities moving forward. Several amusement customers facing information portals are expected to be fielded from other venues in the coming months.

For some of the larger Urban Entertainment facility brands, they entered the period of lockdown, so then carried the burden of extensive debt and the inability to use their operations, furloughed staff, and husbanded resources to survive at the other end. Meanwhile, new operations and those without accumulated debt (in many cases self-funded) can be more proactive, investing in the next generation of urban entertainment experiences, to deploy within facilities that also take frictionless payment seriously, alongside a strong F&B offering.

We have been here before! Anyone old enough to remember the industry of the 1990s, will have vague memories of the last time Location-Based Entertainment (LBE) was so prominent. With such incumbents as SONY with ‘METREON’, Walt Disney with ‘DisneyQuest’, ‘ESPNZone’ and ‘Club Disney’, and SEGA / DreamWorks / Universal with ‘GameWorks’. Not forgetting others such as ‘Q-CITY’, ‘Magic Edge’, ‘Cinetropolis’, ‘Block Party’, ‘XS Entertainment’, and ‘StarPort’ – to name just a few of the hopeful fallen during that phase of LBE. With this latest relaunch of interest in the deployment of a Mixed-Entertainment venues, the technology and investment in the latest deployments move the opportunity to new levels of engagement – a new generation of opportunities.

Regarding the establishment of other facility business and the LBE VR scene landscape started to restructure itself, partly from the impact of the Global Health Crisis and partly due to the 2019 upheavals. We have already covered the latest on The VOID and Sandbox VR situations in The Stinger Report, but we have only touched upon Dreamscape Immersive. The free-roaming hyper-reality concept had received investment of over $72m from the likes of MAF, AMC, WarnerMedia, Viacom, IMAX, and Bold Investment (to name a few). Dreamscape had also partnered with cinema chain AMC (a lead investor) to finance six VR centers over an eighteen-month period, announced in 2017. But the ambitious plans had only realised four owned and operated locations – Los Angeles, Dallas and Columbus, and one in the UAE (opened in partnership with MAF).

The operation, in 2020, revealed its additional focus towards educational applications of the virtual environment and storytelling abilities (an application that had always been part of the core strategy). Moving forward, Dreamscape undertook two initiatives, first announcing a partnership with Arizona State University, towards defining their remote and facility-based VR educational offering, named ‘Dreamscape Learn’ – extending their platform to students, researchers, and educators. Whether this will mean further facility openings, or a focus on remote learning tools, will be revealed shortly.

Conceptual rendering of the educational hub planned [Dreamscape Immersive]

And the second initiative, revealed in April, saw the announcement that Verizon had partnered with Dreamscape towards developing game and educational VR experiences on their innovative 5G network architecture, and mobile edge computing (MEC). This offers a backpack-free and tether-less VR solution for training, education and entertainment, and this partnership is hoped to promote the opportunities represented by the innovative low-cost VR streaming capabilities. Verizon also adding their name to a list of the company’s investors. This latest partnership marks the first move by the company in 2021 to start a major rollout through Dreamscape’s ‘ADEPT’ (Avatar Driven Educational and Practical Training) platform, creating vivid VR scenarios for this sector.

The popularity of free-roaming and hyper-reality experiences is a strong trend for the current LBE VR scene. Backpack PC, multiplayer, Arena-Scale experiences have seen considerable growth, and this looks to continue. VR location-smart game distribution, licensing, and management solution provider, Synthesis VR, expanded its offering by adding a dedicated range of next generation of premium free-roam content to its library. The company has been working with many of the independents in the VR LBE content scene and launched a dedicated library of platforms for LBE operators of varying requirements. The company offers standalone and full backpack PC VR systems, representing Holomia, Secret Location, The Park and other independent developers – a “one-stop-shop for independent free-roaming platforms” for operators looking for a cost-effective solution.

Following on from our coverage of the gyroscopic / dynamic 360' motion experience (that was personified with the anniversary of the SEGA R360), and it was pointed out that from the extensive list of developments one name was missing. To set the record straight, we need to mention innovative veteran developer Maxflight that has patented their unique 360' extreme motion system since 1994. The company has established a presence in the market offering their platform for FEC, museum and simulation training - with over 800 units sold into the international market. Maxflight's two-seater system offers both passive and interactive configurations, with the company recently debuting an open-top variant that uses VR headsets rather than an internal projection screen. The company is proud of the version of their system which is a pure flight simulator allowing budding pilots to select from 100 different airframes, flown from virtual representations of real-world airports, and able to take part in dog fights between connected machines - a capability that Maxflight has had on offer since 1998. A company proving our point in the previous coverage that dynamic motion experiences are a compelling platform.

The extreme dynamic motion platform [Maxflight]

- Advances in Audio Video for LBE

Speaking of technology innovation in the space, and while the ability to meet in person has been suspended, advancements in the Audio Video (AV) sector have continued at a pace. Panasonic Business held a unique online event at the end of March, to promote their efforts in the location-based entertainment (LBE) scene with their leading projection range – the webinar was called ‘reCreate, reLive, reLaunch – Attraction Industry Forum’.

The first guest on the virtual stage was the new start-up, Illuminarium. The ambitious immersive projection experience project (previously covered by The Stinger Report), is working with Panasonic as one of their technology partners of the venue. The operation adapted an ultra-short-throw lens for the latest ‘RQ50K’ Digital Laserlight Projection (DLP) system (in native 4k) to define the experience. The first Atlanta facility is now scheduled to open in July’21. The operation also confirmed signing its first pan-continent agreements for Spain and Mexico, to see the first sites in the countries. The company is scoping the top ten cities in the US to house a space and has a rollout plan for the first five (including the already revealed Las Vegas, and planned Miami openings). It was disclosed that Illuminarium will look towards a ticket price scale between $20 to $35, keeping this new experience affordable for families and groups.

Rendering of the kind of projection experience proposed [Illuminarium]

Moving on, Panasonic gave a technology overview of the needs their projection hardware addresses in this sector, including the needs of better contrast ratio, depth of field, and obviously good-looking image. This points to the needs for live events to compensate for ambient light, so needing a projector that can address the color imbalance. In an ‘AV technology overview’, Panasonic revealed a highspeed tracking system (low latency), bringing the fast refresh rates needed in video games to the theme park and attraction landscape. This will be seen in 3D systems and Dark Rides from the start, addressing the issues being seen with polarized 3D systems (with an internal depolarizing filter for passive 3D systems). The company is looking at a new filter approach for passive 3D, opening a new door to this kind of experience.

Moving away from the personal/isolated restrictions of VR – the technology overview from Panasonic focused on the needs of large audiences and built on their highspeed live tracking to create imagery mapped onto AR headsets, allowing for an audience-based experience. Their highspeed-tracking system allows the creation of seamless Projection Mapping on moving objects, opening a new world of opportunity for MR immersion with physical objects (tracking achieved through an IR light camera in real-time). This marks a moment in the creation of “Synthetic Environments” and is a technology that will play a pivotal role in future entertainment applications.

In a session called the ‘Themed Industry Forum’, Panasonic gathered on stage chief executives from Alterface Projects, Jora Vision, and their own LBE support team, to discuss the needs and impacts of the LBE sector going forward. Described was a desire by the audience to spend quality time, especially after the burdens of lockdown. It was felt that one of the impacts of the post-COVID landscape is how guest experiences manage the flow of the audience, which is a serious area of investigation by Alterface (the company celebrating its 20th Anniversary of providing fun).

Jora Vision pointed to the impact on capacity numbers for many parks that have reopened, and the acceptance of virtual queuing. The designers still want to create beautiful queue-lines, but their duration will be impacted by the migration to virtual queue-lines. These seem to be a part of the future of the business, although there is an issue of bringing the attraction to the people who are not travelling to the larger entertainment venues. This is a shift in development for a younger audience, searching for the unknow. Smaller but high-quality experiences are needed, that will be fed using this kind of immersive projection technology.

Visitor experiences need to offer a greater reason to entice the audience away from their digitally laden homes. They need to have a meaningful immersive experience. AV spectacles are being used to expand the physical world, as seen with large theme park attraction projects (employing never seen before effects). But the latest technology is now allowing much more flexibility for smaller attractions. Compact setups are based on the AV spectaculars, scaled down for a wider market. Sharing the experience with the guest’s social network, Jora Vision still does not feel that VR has a big part to play in this approach, although pointed to the use of VR to offer disabled guests a chance to experience the larger ride attraction experiences being employed at some parks.

Accessibility for disabled gamers being developed [WalkinVR]

Alterface focuses on four key elements when developing new attractions: “Having fun”, “Immersing people”, “Sharing in a group”, and finally “Offering a social experience”. This social experience was underlined regarding the need for interactivity. Both Alterface and Jora Vision focused on developing more of an engaging experience, which places the player into the environment that incorporates competitive interaction, and surrounds the audience so they feel completely involved in the narrative. The ability to allow the guest to change the course of this narrative, employing new technology on tracking and mapping, will drive this innovation.

In conclusion, Panasonic questioned what the next big thing for projection tech will be – agreeing that the market will always strive for higher resolution, tailored for specific user cases; and where the large parks were the focus, the ability of targeting versatility for mid-size entertainment venues is a new driving factor. But the future also now seems to be with easy interactivity, with the content driving investment and being encouraged by the market. The new high-speed tracking will open up this application, including interactive elements building on feedback from their customer-bases. There is a need for the adoption of new technology to offer a better shared experience, while Augmented Reality (AR) is seen as an inspiring new opportunity.

The collaboration of a technology provider and experience developers is the way forward. One of these new trends fuelled by this technology is “Art-Tainment” – art driven experiences such as the pop-up Amsterdam Museum “Van Gogh: The Immersive Experience” art installation (drawing 1.4 million visitors during its Paris run). This reveals an example of the drive in smaller but still impactive experiences for people to explore (a derivation of the growth in “Edutainment”). This is what some are describing as “experiential” entertainment, moving from restrictive headset immersion to socially inclusive, large projection venue concepts starting to be rolled out.

Immersive multisensory art installation [Exhibition Hub]

The webinar concluded with the familiar session areas after the main presentations. This provided a chance to meet and greet and included an expo with the Panasonic international support teams, for each region, discussing the latest tech for themed entertainment venues. The Stinger Report would like to thank all involved in this informative and insightful webinar. The information and applications discussed seemed to touch on the very future of the business and offered a tantalizing glimpse of the next phase in innovation for the themed entertainment space.

- eSports & Eating!

Momentum in eSports has continued, with investment in developing new facilities as well as those support services such as eSports betting (replacing the previous Sports Betting infrastructure). Research undertaken by NJGames.org speculated that the total amount bet on eSports competitions was expected to hit $12.9b by 2020 (this compared to $5.5b bet in 2016). This is a good rule of thumb of how eSports stands aside the previous Sports Betting busines and, for example, in Nevada, the sportsbook generated about $4.8b in 2017 alone. eSports is breaking into three distinctive businesses. The first being the organization and management of the teams (including sponsorship). Secondly the streaming, stadia, and event organization (including media syndication). And thirdly, the consumer player environment includes eSports facilities (including content and tournament support).

The need for a city to now include a major eSports facility project has been charted over the years. And during March, Chicago added its name to that list with the announcement of the development of the first facility. It was reported that a new project, called the ‘Surge Esports Stadium’, is a $30 million eSports venue planned for near the Stevenson Expressway. This 108,000-square-foot location at 2600 S. Wabash Ave., is planned to serve food and drinks from a large kitchen operation, and will be an arena that can accommodate some 800 spectators to watch competing top players. The stadium will also include attractions with a total of some 1,040 attendance. All these plans were approved by the Chicago Zoning Committee, in a full City Council session in March. Surge is planned to roll out additional venues after the Chicago build, which is looking at a 2022 opening.

Artist’s rendering of the planned eSports Arena [City of Chicago]

This is the latest example of eSports support by the State. The Illinois High School Association have recognized video gaming as an emerging sport, since 2018. The embracing of the ability to use curriculum-based eSports studies in teaching has become prevalent across academia. With the news of the new ‘Surge Esport Stadium’, it was reported that local schools in the Parks District had launched their first eSports tournaments, which had allowed 13-to-17-year-olds to compete in championships on the game ‘NBA2K21’. This created some $16m in eSports scholarships across the country during 2019.

There is an old adage that something only becomes real when it has to pay taxes, or you can go to jail for breaking it. This point was marked for eSports with the news that the U.S. Federal Bureau of Investigation (FBI) was working with the Esports Integrity Commission (ESIC) regarding alleged match-fixing in the North American ‘Counter-Strike’ scene. There is an ongoing investigation, started in September, carrying out interviews with alleged perpetrators, with serious criminal charges being levelled at those accused of bribery and match fixing. All with the possibility of fines and jail time for those found guilty. This investigation is being carried out by the FBI’s newly formed “Sports Betting Unit” and is expected to see the unit play a major role in investigations into all aspects of the sports and gaming industry.

Speaking of sports betting and the crossover of tournament play and eSports into the location-based entertainment scene, and a major development in the landscape was charted. Restaurant Business media revealed information that Dave & Buster’s was implanting a dedicated plan for a comeback in the Summer, which would include several major innovations to the 141-facility entertainment chain. One of the most unique of these plans was the inclusion of an onsite “Sports Betting” component to the operation (where applicable), supporting the restructuring of the “Eatertainment” model. It was suggested 30 locations are expected to offer this online sports betting component. New investment will also see in-store digital orderings, and new off-premises sales (under the new ‘Wings Out’ and ‘Buster’s American Kitchen’ brands). These “Virtual Brands” are proving a lifesaver for the operation, as a secondary revenue stream.

It was revealed that D&B will be re-branding the operation and adding new elements. The Midway area will now include what was called a “Wow Wall” – video screens that will be used to promote the new menu and special offers within the facility. The operation has also invested across the chain on new elements, including a digital channel, and making the offering more attractive in what was called an “Integrated Guest Experience”. This also includes using social media influencers in the positioning of the new brand. Continuing with the game room, D&B aims to be the first to roll out the new ‘Minecraft Dungeon Arcade’ piece from Raw Thrills. And has also supported the development of a new life-size ‘Hungry Hungry Hippo’ entertainment, based on the Hasbro license (following on from the previous life-size Mattel ‘Rock’em Sock’em Robots’ entertainment). We will have to wait until Summer (July) to see the reception from the returning audience to these additions.

Regarding the D&B exploration into adopting Sports Betting, this is not the first “Eatertainment” venue to venture down this path. There has been the 2019 partnership between the Buffalo Wild Wings operation and MGM Resorts International (BetMGM), leading to the creation of the ‘Roar Digital’ free-to-play sports-betting enterprise. This had been a collaboration on property, with the first site opening at Mandalay Bay in 2020, and across Buffalo Wild Wing sports bars in the US, beginning to showcase sports book content. Due to the current conditions, this plan has yet to be rolled out. Another example of this was recently reported on by The Stinger Report, with the agreement between Topgolf and BetMGM on a cross-promotional partnership – all roads leading to the popularity of sports betting.

Speaking of social media influencers and their growing involvement in promotion and crossover into the entertainment space, and Main Event Entertainment announced they had signed an agreement with social media influencer “The Shirley Temple King”. This seven-year-old YouTuber became a social media sensation with his food reviews, including growing his stature with an appearance on “Ellen”. In a signing with social entertainment chain, Main Event, he has launched a special range of beverages and deserts found on the menu of 44 Main Event Entertainment locations. This is one of the biggest examples of the use of social media influencers towards generating traffic, and an example of the impact of social media across the sector.

Also, while speaking of Virtual Brands and the ability for Eatertainment to pivot in this direction, another entertainment chain revealed their survival plans going forward (to FoodOnDemand media). ‘Chuck E. Cheese’ and ‘Peter Piper Pizza’ parent CEC Entertainment revealed that their virtual kitchen (Pasqually’s) had achieved, by June of 2020, some 10-percent of CEC sales. In an interview with the media service, the CMO of the operation commented on the media interest in this Virtual Brand and how they had been surprised by its impact and even the establishment of its business alongside the hibernated entertainment siblings. The company confirmed they have big plans to expand the virtual offering in support of their more conventional bricks and mortar business.