Stinger Report - 2/08/2021

TSR Newsletter | August 2, 2021

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The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .

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US Amusement Gets Physical (Again)

Part 1 | # 1081

Report Skinny

In The Stinger Report #1081 – This issue covers in detail:

1. [BREAKING NEWS] Bowling Expo reveals latest major acquisition, with Bowlero Corp merging with Isos Acquisition Corporation to achieve flotation and expand plans for future development.

2. [BREAKING NEWS] More information revealed about a California court filed lawsuit against the US division of SEGA Amusement International (SAI) and Komuse America over 2011 ‘Key Master’ prize machine.

3. [TRENDING NEWS] exA-Arcadia comes to Amusement Expo for first time and shows its platform aimed at re-invigorating the traditional video amusement scene.

4. [TRENDING NEWS] Electronic payment platforms and frictionless payment options dominant a major portion of the Amusement Expo 2021 show floor, as the market evolves towards the new normal.

….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

The exhibition season, much curtailed, saw a return of the amusement and leisure trade during the end of June. The amusement scene had actually seen the 2021 International Roller-Skating Industry Convention and Trade Show (RSA’21), seeing a much smaller show than previous years, taking place at the end of May in Reno and being the first physical gathering. But the main drive for the return of the big battalions now took place.

- America amusement trade returns to exhibitions

Taking place at the end of June was the BPAA International Bowl Expo 2021 (BE’21), organized by the Bowling Proprietors American Association (BPAA), and hosted in Louisville, Kentucky during the 20th to the 24th of June. This was only a matter of days before the Amusement Expo and the timing forced some companies to have to make difficult decisions about spreading themselves thin or banking on only one attendance. For example, Amusement Products took a booth space at BowlExpo’21, rather than a traditional space at Amusement Expo.

BE’21 played host to several new releases, and there were also some new partnerships announcements. Elaut Group, known through their amusement division for their claw machines and unique pushers, has also been branching out into new fields in amusement. With the build-up to the show, the company announced the signing of an agreement with TouchMagix, to represent the company’s unique range of “new-age” redemption and prize machines through the Elaut North and South American distribution and sales network (Elaut Group USA, also comprising Benchmark Games International and Coast to Coast Entertainment).

In additional Elaut Group news, Benchmark Games International announced a new partnership with TeamPlay, the video redemption (Videmption) and prize machine specialist, seeing the launch of a new joint project. It was confirmed that the two operations would be working on releasing new interactive ticket redemption machines into the market and, on the Bowlexpo booth, Elaut/Benchmark showed ‘Spacewarp’66’.

The announcements from Elaut have been coming thick and fast, with Benchmark Games International also announcing a collaboration with VR specialist BoxBlaster. In this latest development, the joint companies released what they called a ‘VRX-perience’ VR ticket redemption system – a one-player upright VR kiosk that offers a chance for players to use a tethered VR headset towards winning redemption tickets. This is the latest in several new VR self-service kiosks designs that have entered the market (The Stinger Report will have a special feature on this genre coming soon). We also hope to have more news on the new Benchmark/BoxBlaster collaboration following the show.

Caught out on location with new VR kiosk [Benchmark Games]

BowlExpo’21 was also the first opportunity for SEGA Amusement International (SAI), fresh from its Management Buy-Out (MBO), to show that business was running as normal. The company’s booth at the show included previously seen prize, video (‘ATV Slam’, and ‘Mario & Sonic at the Olympic Games Tokyo 2020: Arcade Edition’) and redemption pieces – but also present were the new structure and service and support deals on offer from SAI.

Overall, the two-day event reflected the return of the physical show, and the limitations of re-emerging from an aggressive lockdown period that, for some international visitors, is still in effect. Many exhibitors commented on the lack of any international attendance from, not just across the water, but also from Canada and Mexico. Even with this noted, the attendance on the first day was strong, with a qualified (and hungry) audience of attendees, and the seminars saw good turnouts.

One of the biggest developments impacting the international bowling industry would not take place until a few weeks after the trade expo. It was announced that Bowlero Corp, the world’s largest owner and operator of bowling centers, who also owns the Professional Bowlers Association (PBA), had agreed to merge with Isos Acquisition Corporation. This merger will see the newly combined company trading on the NYSE. Representing some 320 venues, the combined operation has been valued at $2.6b – the merger undertaken is to further the expansion of the facility business. This marked the latest in major “Mergers & Acquisitions” seen in the entertainment facility business and places this merger in the same league as the recent $2b acquisition of Topgolf by Callaway Golf.

- Amusement lands in Vegas

Next up was Amusement Expo 2021 (AEI’21), the conflagration of both the AAMA and AMOA, supported by NBVA and Laser Tag Convention. The show was an obviously much more restrained event compared to previous years – this was the first toe back in the water for the physical show trade and came at a difficult time for the coffers of associations, organizers, and exhibitors alike. Attendance was going to be compressed by the lack of any true international attendance, and by constraints on budgets for those operators and businesses still open, under capacity restrictions, and those still in lockdown.

Even with all these issues, the show represented a major coming together, after the last 15-months, for the American amusement trade. The associations held their conference and general meetings. As well as the fourth, annual location-based VR Summit, sponsored by the newly acquired SpringboardVR – with three presentations from Nomadic (about their work on the Lightsaber Dojo with VRsenal), and from Frontgrid (on their work for the new ‘ParadropVR’ platform). Also, via tele-presence, the event organizer appeared as “RoboBob”, presented remotely and navigated the show floor (using the ‘Double Robotics 2’ tele-presence robot).

RoboBob traversing virtually the show floor

The actual Las Vegas show floor saw some 132 exhibitors (according to the organizers) – this was in comparison to the 2020 New Orleans event with 142 exhibitors. The organizers spoke with trade media Replay, and stated they witnessed a 20-percent drop in the event. Stinger sources stated that the show floor was active, although far less than seen some 15-months prior. Attendance was claimed on the first day of being 1,438 registered buyers (this number was better than that achieved back in 2020 at New Orleans’ first day, with 1,303 registered).

The new landscape of the evolving amusement scene in the States was epitomized by the changes in the once Japanese-defined amusement satellites. Holding a much smaller space at the front of the hall, with limited hardware on display, was BANDAI NAMCO Amusement America (BNAA); and, holding an equally similar space, was the newly-restructured SEGA Amusement International (SAI), following its MBO from its Japanese owners. Acting as distributors and providing service and support for third-party sales represents the bulk of the company’s business, now more focused on distribution. Sources spoke of another shakeup on the horizon regarding the shape of this aspect of the market, and we will bring these developments when they break.

The US amusement trade was in the news during July, with the confirmation of a California court filed lawsuit against the US division of SEGA Amusement International (SAI) (Play It! Amusement). The suit also included Komuse America – all parties involved in the manufacture and sale of the 2011 ‘Key Master’ prize machine. The suit alleges that the amusement piece was intentionally rigged against players – as reported by Polygon. The lawsuit seeks damages of over $5m. This is a follow-on from the conclusion of the lawsuit by the State of Arizona against the distributor Betson Enterprises, eventually reaching a settlement of $1m in 2019. The authorities in Arizona had, in 2013, seized some 16 machines (as revealed by The Stinger Report at the time). SAI’s division and Komuse were accused of “misleading consumers” – the legitimacy of US amusement prize machines (and the trade) was brought into question by the backlash regarding publicity of this lawsuit.

Speaking of the distribution scene, it was represented at AEI’21 by Betson Enterprises, with one of the largest booths on the show floor (in competition with Touchtunes), as well as Shafer Distribution, Moss Distributing and Amusement Source International. As The Stinger Report has covered, the scope of distribution and the future landscape are under pressure from the current post-lockdown conditions. At the same time, new structurers are emerging – as we covered during Bowl Expo, Elaut Group emerged as a new force for the representation of third-party products with three new partnerships.

Regarding the new games on the show floor and, obviously, Betson Enterprises represented Raw Thrills and had the lion’s share of new titles. Taking the top billing were two examples of ‘Minecraft: Dungeons Arcade’, the amusement recreation of the one of the most populous video games of all time and offering a continuation of the unique card collection feature. Also on show was the production release version of ‘King Kong of Skull Island VR’ – although the production prototype was seen at AEI’20, this now represents the version being shipped. Issues with headset restraints and motion have been addressed and, already, strong earning numbers for the first shipped units are being touted (we look at the other considerable VR presence at the show in part two).

Regarding other developers who came to AEI’21, LAI Games brought their latest selection of amusement pieces, including the new two-player version of redemption game ‘Pearl Fishery’ – and space was given to the most populous VR amusement piece, ‘Virtual Rabbids’. One of the big developments on the booth was the debut of and AMOA Innovator Award win for ‘Angry Birds Coin Cash’ – the self-contained, tower-building coin-pusher is based on the internationally successful IP. The game has been launched across the Dave & Buster’s chain of locations and will have a September release for the rest of the trade.

Adrenaline Amusement took space at the show and, along with previously released titles, also showed their unique redemption based on the popular game ‘Twister’. The Canadian company had managed to have a presence at the show which had proven difficult for so many internationals. The company is known to have a considerable number of new concepts in the works, with many images leaked of loc-testing – we hope, by IAAPA’21, that we will be able to report on them.

Others who took space included Innovative Concepts in Entertainment (ICE) and, while a selection of the company’s previously seen redemption and prize systems were shown, one new addition to the lineup was the appearance of the latest in their new “Home Game” line of products. This is a range of games aimed at consumer use, a growing trend from other manufacturers such as STERN and BANDAI NAMCO. As we reported in the Bowl Expo coverage, Elaut Group/Benchmark Games had partnered with Touch Magix, and this was represented on the AEI’21 booth with their ‘Dicey Jump’ Videmption.

Taking a strong presence at AEI’21 was Baytech Entertainment – the company brought its large ‘Rock the Rim’ video hoops game, with a 55’ screen and extensive external LED theming, and this system hopes to draw players in by offering three game modes. One of the largest machines on the show floor was the new ‘Axe Master’, a physical throwing game riding the popularity of axe throwing, in a more amusement-controlled (darts-like) setting, with a dedicated enclosure and scoring. The game is fresh from its timed exclusive for Dave & Buster’s – now available for purchase. It is interesting that Baytech would run with the ‘Axe Master’ title, considering possible confusion with the 2014 SEGA Amusement prize machine of the same name.

Amusement jumps onto the axe throwing bandwagon [Baytech]

Off the AEI’21 and BowlExpo’21 show floors, and in the popular zeitgeist already, axe throwing also entered the Mixed Reality (MR) scene with a new product from LASERTRON. The new ‘Axe Throwing Experience’ takes the basic concept and adds the latest laser projection mapping technology to emphasize the social entertainment elements. The unique lane-style construction mirrors a bowling approach to the experience and includes LED illuminated accent lighting and an attract mode. The LASERTRON axe throwing proprietary software offers a seamless package to operate, including a touchscreen interface to select from the many game styles offered, while a large scoreboard displays players' photos. The system supports smartphone registration and electronic waiver support.

Coming back to the AEI’21 show floor, Incredible Technologies presented to the amusement trade the latest in their long golfing series, with ‘Golden Tee PGA TOUR Golf’. The new sleek design cabinet and omission of a coin-mech favouring e-payment support, underlined the juxtaposition of the amusement title more at home in the hospitality and bar sector. The popularity of the connected championship element of the platform is establishing its longevity, as an early originator of competition seen now through eSports.

Also on the booth was the previously released ‘indy’ style video amusement, ‘Retro Raccoons’. Developed independently by Glitchbit and represented by IT, the game has gone through some minor tweaking from the original drinking game (originally called ‘Tipsy Raccoons’) which we reported back on in 2019 – now the production release for sale is the four-player mini-game, with a distinctive drinks holder cabinet for younger players. The system comprises 40 such mini-game experiences for team action. As seen with Golden Tee, this game cabinet did not have a coin-box, but just a bill collector, or an ability to be used as free play, illustrating the hospitality focus.

Regarding the changing face of amusement, and one of the developers of an innovative (if familiar) approach to amusement took space for the first time on the AEI show floor. This was the first official appearance to the American trade from exA-Arcadia, now with a North American representative of the Japanese operation. The JAMMA-style approach to business follows the launch in late November 2019, and the company has been working for Japanese and now Western recognition. On display at AEI’21 were the new dedicated two-player and four-player cabinets (co-designed with Fun Company). The dedicated cabinets sport 4K 55’’ displays, and joystick and button panels, in a sleek design cabinet. The system presented an impressive roster of over 16-games on display within the cabinets, through their unique game loading feature, and 50 further titles are in development.

The unique slot-in-game system [exA-Arcadia]

In a milestone event for the company, 2021 sees the commencement of their efforts to establish the Western appeal of the hardware – operators are keenly reviewing revenue numbers from what can be seen as a niche hardware approach. exA-Arcadia promised several major announcements in the coming weeks.

The trying nature of the current Japanese amusement sector has seen unprecedented conditions for the leading factories and operators. These conditions, fuelling access to all manner of leaks and rumors. The Japanese trade is being shaken to its core by mergers, acquisitions, and internal restructuring. And with this, well-placed sources have revealed that classic amusement properties are not immune, with leaks surrounding the returning of the legendary SNK brand and popular brawler properties, (such as ‘The King of Fighters’). While another leak revealed that the veteran arcade publisher Universal Entertainment, with their classic ‘Mr. Do!’ property, were also in talks towards making a comeback. As stated, these are rumors, and we are working to get more substantiation towards their accuracy.

While many may not be familiar with Amusement Source International, they represent the Chinese manufacturer WAHLAP Technologies in North America, and on the AEI’21 booth was previously-released WAHLAP titles such as the two-player shooter enclosure ‘Monster Eye 2’ and the VR racer ‘Overtake VR’. This represented the only real Chinese product representation on the AEI’21 show floor. But soon after AEI’21, it was revealed that WAHLAP’s latest new release seen and reported on at AAA’21 (‘Jet Blaster’) will be represented in North America by SEGA Amusement International (SAI). The distributor’s web page broke the news of the move to sell the game through SAI, so side-stepping WAHLAP’s previous relationships on this new release.

Regarding some innovation represented at the show from newcomers – exhibitor Minigolf.io brought along its active floor mini-golf platform, offering a changeable floor system that can change the shape and undulation of the play-space via specially developed technology. This is a system that players can control via a special mobile app. The system came to the show looking to find buyers and establish the system in venues looking to jump on the mini-golf popularity train, and it managed to turn many heads.

- Amusement sees ePayment Grow

One of the biggest developments for the traditional amusement trade has been the decimation of old ways. Many “Street Route” sites are now on the endanger list, but it is also the enforced adoption of frictionless and social media methodology that is now driving operators. What had previously felt to be taking a lifetime to be adopted, was ushered in on the market in just 15-months, with all objections to ePayment and online reservation systems conveniently forgotten.

AEI’21 allowed the implementation of frictionless business to be illustrated in depth. Those providers exhibiting at the show included EMBED – with a crowded booth, the energy reflected was around the mobile wallet system supporting Google and Apple Pay platforms. Also, there was Intercard, offering its ‘iReader Impulse’ card reader platform – a unique platform also accepting credit cards along with the player cards. The latest card reader systems were also shown from Semnox Solutions, and from Sacoa Cashless Systems promoting a card reader system supporting both RFID and NFC applications.

Also on the show floor was Magnetic Cash with its cashless solution for operations. American Changer showed its cashless card system for amusement deployment which, using a RFID, can work with card and smartphone apps. Making a new appearance at the amusement trade event was Naya, represented on the show floor following its acquisition of Tigapo – the operation was pushing its entry into the FEC and amusement scene, offering a powerful card reader platform through its cloud-based management system.

The growing smart play infrastructure [Tigapo]

The importance of cashless systems was a major influence on the exhibitor lineup at AEI’21 – although many industry veterans chose to ignore this. Also taking space was KioSoft Technologies and Amusement Connect – representing the online connected amusement machine operation that will drive the future revenue of the business. The companies’ ‘SmartMech’ RFID card readers and their ‘SlideMech’ cashless systems are all supported by mobile connect systems to allow real-time facility operation from a smartphone. Smart Industries is now embracing a new mobile collection app on its platform.

A trend that The Stinger Report has charted in Asia, with the larger distributors promoting their own favored card reader systems as the market rushed to adopt the cashless approach, was seen on the AEI show floor with Betson promoting the Goldfinger PDS card reader. The platform offers a RFID-card enabled platform that supports a touchscreen management system. The company is representing the platform as a master distributor.

Along with the card and payment management systems, there were also customer relationship management (CRM) platforms and software architectures. These were represented by the likes of SMART Software, Hownd and Party Center Software, presenting their online and mobile approaches which also need to be supported by strong social media and connected marketing and promotion.

This concludes the first of our two-part report on the return of physical shows for the amusement trade. We will be looking at the launch of new amusement VR pieces, and the continued growth of the business within the industry. With commentary on the big developments that rocked the trade during the event. We return shortly.