TSR Newsletter | September 21, 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 4 | # 1038
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Redefining the new phase of immersive entertainment coverage in The Stinger Report; and in this fourth part of report we look closely at what just happened following the IAAPA Orlando trade event announcement. And then we undertake an autopsy on the BANDAI NAMCO Entertainment, MAZARIA facility and the reasons causing its sudden closure.
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The developments in the market came thick and fast as we entered the August and September period of the year and, for many corporations, the inevitable decision moment arrived regarding continuing with original plans, or having to adapt to the “new normal”.
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- The 2020 IAAPA Dilemma
Just days before the September announcement by the IAAPA convention committee on the fate of the 2020 event, and the UK was rocked by the latest major cancellation of another entertainment fixture. The organizers behind the well-loved Winter Wonderland, annual Christmas event, held in the capital’s Hyde Park location since 2007, made the hard decision to abandon plans to hold the 2020 event in December. The temporary winter fair, comprising shows, attractions, amusement, food stalls, and bars, would expect to attract some 2.5m attendees during its run. But under the current COVID-19 conditions, the team behind this mammoth undertaking felt it was best to postpone the event until 2021. At the same time, the organizers of the Autumn Coin-op Show (ACOS), Swan Events, announced the cancellation of the October amusement trade event (and this would not be the last amusement event they would have to make a difficult decision over).
It was in this light of constant announcements of major and minor trade conventions, exhibitions and mass gatherings, being cancelled in the face of international COVID-19 situation, imposed by State and Government, that the likelihood of being able to hold the IAAPA convention seemed doubtful. But even so, the organizing committee still tried frantic contact with sponsors and exhibitors to attempt to hold an adapted, condensed event compared to the previous plans. Attempts continued right up to the last minute before the inevitable and expected announcement was made, by the president and CEO of IAAPA, stating: “Together with input from members, exhibitors, the IAAPA Board of Directors and our team, we have decided to cancel this year’s Expo… While we are disappointed we are unable to meet in-person this year, we are already looking ahead to IAAPA Expo 2021 in Orlando.” At the same time, it was revealed that the organizers will be holding the “IAAPA Expo Virtual Education Conference”, taking place on November 16-18, the same week that the IAAPA Expo was originally planned for.
The writing had been on the wall since the cancellation of IAAPA Asia and IAAPA Europe, respectively. Attempts to replace the lost revenue were made with the IAAPA Virtual Expo and conferences but, since summer, the focus had been on the viability of the Orlando event. At the end of 2019, the prospects of IAAPA 2020 had been placed in concern, with the reveal that the Orlando County Convention Center (OCCC) facility was being renovated and the attraction convention would have to be split between two venues due to the building work. At the height of the COVID-19 lockdown in May, the first cracks appeared in the plans to continue to hold the Orlando event, with the abandonment of a two venue gathering in favour of a “reduced” event in the available space of the original OCCC site. However, a vocal majority of sponsors and exhibitors rose, demanding that the plans for the show were abandoned this year. They cited an inability for international and some State attendees to fly to Florida, the ongoing COVID risks in the State, and the impact of the 2020 American Elections and ongoing unrest surrounding this.
Obviously this decision was not taken lightly, with the whole IAAPA exhibition committee going up to the wire (and beyond) regarding the impact of taking this path. Many amusement trade exhibitors had publicly affirmed they had abandoned their plans to attend, no matter if the show were to go ahead, while key international sponsors had started the process to demand their money be returned. Sources had suggested that the exhibition side of IAAPA (a not-for-profit trade association), self-insured their conventions and, as with Asia and Europe, would be eating the cancellation fees. While other sources affirmed that the association had a considerable “War Chest” and would be able to weather the storm. Whatever the truth, this development will seriously impact bottom lines, with the loss of accommodation, transportation, printing, plant hire, refreshment, and entertainment business, for the whole Orlando area, and beyond.
Serious questions have been asked of the trade associations governing the international amusement and attractions sector. Their need for members’ fees countered against the support these operations have given in promoting the cause of the trade with government and legislators. Many individuals look at the estimated $26m spent in a new headquarters for one association, against the actual impact and influence they have had with US government via equally expensive previous lobbying. While other associations have been seriously criticized for bloated boards of directors and an inability to make quick decisions – some not even printing membership advisories to the COVID situation until at least three months after lockdown of business. What the membership renewal payments will look like for 2021 can only be guessed at, as an industry looks at new ways to do business.
The question for the amusement and trade business is can the industry go without a dedicated business showroom for some nine months, and if alternative (more regional) gatherings and possible virtual events can fill the vacuum. Already, in Europe, there has been talk of holding mini-trade gatherings to act as rallying points for the industry. The AAMA Gala, now reverting to a virtual agenda, has organized special video interviews with key industry and association figures to address this situation. But from the wreckage of an abandoned convention calendar, a new virtual trade event has emerged. ShowUp, taking place on October 27-29, is a brand new format of a virtual conference – an exhibition that talks directly to the FEC market. But unlike other attempts at virtual events, this will incorporate a social element with a face-to-face nature to the event, therefore filling the vacuum caused by recent cancelations. The Stinger Report owner, KWP, is one of the speakers invited to support this groundbreaking event, and more details on the lineup and sessions will follow. The event also announced that it had been added to the American Amusement Machine Association (AAMA) Location Trade Show lineup.
Following this latest IAAPA news, much will ride on the hope that the associations can galvanize an alternative to the loss of tradeshow business, and that the 2021 season can bounce back as the dates for EAG’21 and AEI’21 are discussed. But sadly, that initial hope was dashed for the UK/EU amusement trade when organizers Swan Events and BACTA UK amusement trade association announced the cancellation of plans to hold the 13th Entertainment, Attractions & Gaming International Expo (EAG) 2021. This is a trade event that could expect to attract some 5,000 attendees and was the launchpad for many of the year’s sales season. Attempts to be bullish by the chairman of the event fell flat with the news of its cancellation, and will place pressure on the sales window and other trade events, as the impact of COVID extends its grasp.
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- MAZARIA: Abandonment of a New Icon
While the COVID situation has seriously impacted all aspects of entertainment facility operation, the lockdown of business for over five months in many territories has shone a spotlight on operations that were already in difficulties or over-extended. This is accelerating the inevitable and, in many cases, forcing owners to admit the reality of their position and take stock. This has seen numerous attempts to restructure under Chapter 11 conditions for some, or the complete closure and pivot of business for others.
One of those reality checks in the immersive entertainment facility business was the news that, after only 12-months of operation, the much heralded MAZARIA entertainment facility in Ikebukuro, Tokyo was closing – shutting its doors permanently at the end of August. For those who may not be familiar, the site was the ambitious brainchild of BANDAI NAMCO Entertainment – part of their Project-i-Can investment into virtual reality entertainment centers. The facility had also been the alternate flagship location to the whole VR Zone initiative, after the equally premature closure of the VR Zone Shinjuku site.
MAZARIA represented the development of the VR attractions created by BANDAI NAMCO, housed in a stylish multi-level retail unit (an adjunct to the already existing Namjatown facility), with MAZARIA broken into zones that allowed for variety of experiences offered, including SF Zone, Panic Zone, Adventure Zone, and Festival Zone. Each Zone comprised several physical and VR attractions that allowed the presentation of “the gateway to anime and gaming worlds”, as the facility was branded. The site utilized a single ticket entry process, with day tickets costing ¥4,200 ($39) for adults and ¥2,700 yen ($25) for children. This was a site employing many of the same elements that had been seen at the original VR Zone locations (as well as their attractions).
The Stinger Report has already, over the last 12-months, covered the technology employed in the VR attractions displayed, ranging from the previously installed ‘Mario Kart VR’ installation, or the unique ‘VR PAC-MAN Challenge’ attraction (employing Oculus Quest hardware). But the reason for this special observation is the attempt to explain the reason for the premature closure and the lessons that can be taken away – as it is clear that, while MAZARIA was seen as a failed execution, the actual entertainment elements had pointed to the future of the location-based entertainment scene. What were the failings that drove this concept to an ignominious end?
Brand – One of the biggest hurdles, and an issue that has been repeated much too often by new Urban Entertainment Centers (UEC), is their inability to effectively describe their offering to their target audience, be that illustrate what is on offer, or entice players across the threshold and tempt them to part with their money. MAZARIA seemed to underline this with a difficult name that translated as “to blend”, but was also seen as “to mix up”. If a brand has a name that has more than one interpretation, then you are already starting down a path of confusion regarding the message. All this is reminiscent of the problem child of BANDAI NAMCO America and their abortive venue ‘Level 256’, in Chicago (recently re-branded to ‘PACMAN Entertainment’).
Away from that, the problem of imparting the high ideal of the designs of the site, to achieve their mission to offer a gateway to anime and a gaming worlds, may have been too esoteric for the audience that the site should have been attracting. Many that visited the site felt it was a confused mix of different entertainment attractions, but that the actual presentation proved confusing and, in many cases, rushed. Much of this could be linked to the hand-me-down nature of the facility, benefiting in many cases from the offcuts from the closed VR Zone Shinjuku site. Also, MAZARIA was also part of the Namjatown facility, so adding even more to the confusion of what was on offer.
For passing audiences, the large digital screen that represented the “storefront” of the site did offer a tantalizing display but did little to inform people of what was actually inside, and why they would be interested in paying for a ticket and crossing the threshold. There seemed to be a perception that the BANDAI NAMCO brand, iconography and licenses, would be enough to attract an audience and carry the site.
Attraction – The biggest problem for MAZARIA was its inability to monetize the effort and resources that were needed to not only to build the site, but also to build the unique attractions and operate them. In not being able to define the audience, the BANDAI NAMCO Project-i-Can team (part of the GM Division) had gone about creating what they felt were fun and innovative experiences, as well as dusting off many of the already created VR Zone experiences. Many were feeling this was a VR component to the already established Namjatown facility.
Along with the expense of development and operation, many of the attractions were based on original IP – not just the ones that BANDAI NAMCO retain themselves, but secondary properties such as Mario, Godzilla, and Dragon Quest. Along with this, the technological overheads were difficult to determine. The R&D effort alone to create the attractions, and the need to keep them fresh, was a problem that had not been fully calculated. But the impact of the experiences on offer and the suitability for the hoped target audience was an issue that seemed to spell disaster.
For some observers it felt like the development team were applying the method of “Throwing Spaghetti at the Wall” – with no real way to know what was sticking. A fundamental problem was not being a full pay-to-play model, and a one ticket fee approach had been broken in the first place. With a one ticket to play “nearly” everything, the ability for success or failure to be charted from the attractions was lost. And as many of the VR attractions were 10-minute extravaganzas, there seemed to be a danger that, no matter how popular, the obvious exception was that of the additional fee attractions. The audience could not consume all that was there, and did not have a clear idea of what was available; and then there was no incentive to generate a repeat visitation, so the enterprise has entered into a diminishing cycle of no return.
Overall – As with all projects of this kind, the big question: is did MAZARIA make money? After the expense of lavish theming externally, and the deployment of expensive and complicated VR and attraction hardware (and the supporting staffing), did the $42 ticket entry price adequately cover this site?
The answer was no – even including the additional revenue of refreshments and merchandising sales. The site, however, was struck by three difficult issues to overcome – most obviously that the shuttering of Japanese business during the global health crisis has not helped. A prevailing concern was that the operation was not making money, but also had an audience perception that it was not value for money. The curious way you had to pay for an entry ticket (Passport - ¥4,500 ($42)), but certain premium attractions had an additional fee, like the free roaming ‘Dragon Quest’ (¥3,300 ($31)), proved to be a deterrent for many.
But to be truthful, MAZARIA was already showing signs of a terminal spiral before the March lockdown. The other issue was the location, as the venue was a compromise site. Sources suggest that the shopping mall owners came to BANDAI NAMCO with an opportunity to populate the space next to the Namjatown facility, and it was rushed to address the need for a new extension. Adding to the confusion, the Namjatown entry price also allowed entry into MAZARIA. For BANDAO NAMCO, after the troubling situation with the VR Zone and VR Zone Portal deployment, the new concept was hoped to point to a new direction. And that much of the installation was treated as a “temporary” (popup) build.
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– What is next for BANDAI NAMCO’s Project-i-Can team and the vision of immersive amusement attractions, in general?
Much of what happens next has already been placed in motion. Across the globe the investment and property community has been considering what the audience emerging from lockdown will be looking for – and escapism is seen as playing a major part of the post-pandemic landscape. Entertainment will both have to change to support COVID-19 measures, and also adapt to a “stir crazy” audience that wants to enjoy experiences in a safe and fun environment.
Several brand new UEC projects have started to be developed by major corporations, looking to utilize newly available real estate, but also create a format of facility that offers a fun entertainment environment which equates to the needs and perceptions of the post-lockdown audience. For BANDAI NAMCO, the situation is more nuanced. They are undertaking a far-reaching internal review towards their future investment in the amusement and attractions space, by looking at their established facility business at home and abroad, and the future of VR attractions which they have developed.
Regarding new facility projects, the Japanese entertainment giant has looked beyond VR, and more at immersive play. Close behind the VR Zone investment, BANDAI NAMCO operations R&D has experimented with new mixed-use play environment, steering firmly away from VR. First off the block, was the ‘VR Park’ activity facility, offering “too dangerous” sports action, employing projection mapping and fun props to create a unique and compelling environment (two-hour Passport - ¥2,800 ($26)). Activities included those such as ‘Nigekiru’ – racing against various wild animals (as covered in our JAEPO’18 report). Most recently, another new concept has been revealed with the Asian division (NAMCO Enterprises Asia), who launching their ‘SPORTAINMENT ARENA’ (sports entertainment arena) amusement facility in Hong Kong. A unique blend of physical sports and amusement play, the concept was created as a retail-tainment property and is located at the Telford Plaza (HK).
With regards to the traditional amusement busines, following the news regarding MAZARIA, news broke that the company announced the permanent closure of other sites, including their Namco Hachioji Opa store, in the Tokyo prefecture. Opened in 2018, on the 6th floor of the mall, this was a model store of the traditional prize crane game, photosticker, and game machine venue, targeting the core young player audience. This was followed by the closure of NAMCO LAND Fukuyama. These are just two of the 250 amusement facilities nationwide which run by BANDAI NAMCO Amusement, as the corporation starts pruning back their operational liability. This news was mirrored by TAITO announcing the permanent closure of their Taito Station Soshigaya Okura Store – but at the same time we have seen new stores opening, such as the Taito Station Fuchu Kururu Store, with its stylish layout, including a Guinness World Records number of over 700 crane game cabinets in one location (that’s one way to clear out a warehouse of unsold stock!)
MAZARIA was not the only iconic Tokyo amusement site to shutter permanently, with SEGA also closing their iconic SEGA Akihabara facility, after some 17-years of operation (as previously reported). But MAZARIA’s departure is not the last of the LBE VR based brainchildren of the entertainment operation scene. We have also seen the closure of the VR Park Tokyo facility, conceived by the amusement venue operator ADORES. News reports suggest that the Japanese recession may be deeper than previously charted, and the question must be: what will the next phase of replacements to fill the inevitable vacuum look like? This must be creating many sleepless nights for an industry more vulnerable than most to the current climate.
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The Stinger Report has been charting the changes and restructuring in the LBE VR scene, and the recent upheavals in the Area-Scale (free-roaming) VR scene. Following this report on the UEC aspirations of BANDAI NAMCO, a special feature will be following in the next few reports that looks at how the current conditions are changing the landscape of this emerging genre of entertainment.
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The next part of this extensive coverage follows shortly.
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September 18-21
POSTPONED
September 2021
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Septemer 22-24
POSTPONED
September 2021
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September 22-23
Presenting
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October 28-30
POSTPONED
September 2021
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October 21-22
POSTPONED
October 2021
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November 16-20
POSTPONED
November 2021
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January 11-13
POSTPONED - Virtual
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