Stinger Report - 3/08/2020

TSR Newsletter | August 3, 2020

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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’s Next Adventure

Part 3 | # 1031

Report Skinny

The Stinger Report continues our new chapter in its long history of reporting on the cutting edge in Out-of-Home Entertainment. In this latest part of the series we cover the Virtual Reality Bonanza of investment, Video Amusement’s Continuing Drive to the new normal, The Emergence of eSports, and a new investment opportunity while Gaming’s Ongoing Hold of audience interest continues. We also debate about The New Playing Experience, and what that means for the industry’s future!

Main Report

Moving from the recent developments, we now look at the continuing momentum driving the market back to full operation under the new conditions, and the successes and work in practice conditions that the industry is now experiencing.

- Virtual Reality Bonanza

Several major agreements were made while many of the corporations were under lockdown conditions. The momentum that VR hardware had achieved in the commercial entertainment sector was fought hard not to have been lost once the industry re-emerged from its self-imposed isolation.

The drive for Arena Scale VR experiences, as dedicated attractions, continues to gain momentum after lockdown, with news of a brand new partnership. DIVR Labs , the developers behind the successful ‘ Golem VR ’ at the Prague Hamleys, revealed to The Stinger Report that they had signed two major contracts. The latest is with shopping mall operators The Prague Outlet , with a contract to open a new VR attraction at their Premium Outlet Prague Airport venue. The attraction will be called ‘ Meet the Dinosaurs ’, and this franchise is based on DIVR ’s four-person PC backpack free-roaming experience, involving players in a 30-minute multisensory VR experience, traversing 80-million years into the past, to interact with virtual dinosaurs. The experience also includes a special motion component to simulate a glider ride deep inside the jungle. This attraction will open in August as part of the venue’s brand new dinosaur museum, completed next year. This was revealed to be one of two major franchise deals for the company’s Arena Scale VR system, with a UAE-based attraction scheduled to open later in the year.

Another new VR attraction that opened was inside Hershey’s Chocolatetown region, part of the famous Hersheypark amusement park in Hershey, Pennsylvania. In July, the park operators opened their new ‘ Hyperdeck ’ attraction to the public, which sees two of the four-player multi-sensory virtual experience theaters, located in their own unique permanent structure. The park promoted the reopening of the operation and the launch of the new VR attraction, all part of the $150 million transformational expansion of the historic acreage. On social media, videos of two-hour lines of eager players wanting to try the virtual experience were shared, with the operators happy with the level of interest and response by the returning audience, to this permanent placement, following a previous test installation. This marks the sixth major installation of the ‘ Hyperdeck ’ platform by MajorMega and will see following rollouts and a new game experience in the coming weeks.

Moving beyond just VR applications, and the surge in interest in Mixed Reality continues, with news of new AR investment. Creative company KAKUSIN revealed their plans to launch a magical attraction using Magic Leap AR headwear. A number of demonstrations were revealed of the concept and, in June, the company launched a crowdfunding campaign to develop the project. Called ‘ code name: WIZARD ’, the concept had guests puzzle solve, interacting with real world objects within magical steampunk themed rooms, supported by actors, and seeing the magical creatures and apparitions through their AR hardware. At the time of going to the wire, there was no confirmation that the project had reached its set goals in funding, but the developers have created a trial experience in Tokyo, with groups of two guests experiencing a part of the intended full attraction, including actors, and a themed space (called ‘ code name: WIZARD: Episode 0 ’). This is one of several AR based walk-through attractions that have been under development, such as the conceptual ‘Unreal Garden’ reported on during our visit to the short lived OneDome.

- Video Amusement’s Continuing Drive

Thanks to our friends over at Arcade Heroes for the latest new video amusement release news, and we see a blast from the past given a new coat of paint! WAHLAP Technology had previously trailed ‘ Jet Blaster VR ’, originally seen at the 2016 GTi convention in Asia as a VR concept, running on HTC VIVE headsets, and the jet ski four-player racer was proposed to be about to be released – and then the game vanished, with WAHLAP focusing on their driving VR release (‘ Overtake VR ’) instead. Now, some five years later, and WAHLAP has released ‘ Jet Blaster ’ – so far, the VR element has been removed for a full motion ride-on jet ski cabinet, employing an updated version of the original game (firing memories of the 1996 success from SEGA ‘ Wave Runner ’). Information is limited on the Western deployment plans, though it seems that, over the five years of development, the VR element of the game has been dropped.

Continuing the innovation in supporting the amusement trade in the face of the global health crisis, and veteran Japanese amusement factory TAITO released a range of facemasks and an antibacterial tool to be deployed in their TAITO Station amusement sites. The tool can be used as a door opener and offer the players the ability to touch buttons on machines, without using their hands. Both these items have been branded with TAITO ’s mascot ‘ Space Invaders ’ imagery.

This is not the only amusement manufacturer that has created a range of facemasks. Photobooth specialist Digital Center launched a brand new platform, called the ‘ Selfie Photo Mask ’ – the machine takes the user’s picture and superimposes the image of their face on a dispensed facemask, creating a unique representation. The user’s image, or other images and logos, can be printed on the dispensed facemasks, offering a level of customization and fun to the protective covering – that has now become necessary wearing in amusement parks, retail, and transport locations internationally.

- The Emergence of eSports

The investment towards developing more areas to promote eSports was underpinned with news that OverActive Media will build a 10,000-seater venue at the Toronto Exhibition Place. The new eSport arena will become the permanent home for several the area’s established leagues. These include the Overwatch League, Call of Duty League, which are owned by OverActive , the Toronto Defiant and Toronto Ultra . New investment has been placed into OverActive to build the venue.

The drive to create dedicated eSports venues continued with news from China regarding what is claimed to be the world’s largest eSports Stadium. Started by E-Blue Gaming , the plan revealed is to build a 700-seat stadium, with six full different streaming stages. The facility is part of a theme park resort, including 12 e-gaming attractions and a 160-bed hotel complex. The term “ World’s Largest ” is one that is bandied around freely in the eSports scene. Even during lockdown (and in some cases because of), the investment continued to see high profile development started in Japan, America and Europe, as well as numerous other countries. Attempting to cut a major slice of this pie has focused much more investment in recent months.

Investment into eSports and related content and leagues has mushroomed in recent months and, with the lockdown measures and suspension of live sports until recently, investment has also turned to secure control of the prominent elements of the eSports business (streaming, organizing and playing). This was illustrated with the news that Sony had invested some $250m into the developers of the phenomenally popular Battle Royale game ‘ Fortnite ’, owned by Epic Games . Streaming game experiences and competition will be vital to the success of the new Sony Playstation5 console to be launched this year.

Attempts to roll VR into the eSports revolution has been championed in LBE and Consumer VR deployment. One of those establishing a foothold is the League of International VR Esports (LIVE), with the operation announcing the launch of tournament events. The first is the ‘2 v 2 Skyfront Tournament’, which started in July. The continued developments in the eSports arena came further with the announcement that Italian sports car manufacturer Ferrari , had revealed the launch of a new simulation racing series that they intend to take internationally. Called ‘ The Ferrari Hublot Esports Series ’, the event will partner with Swiss watch manufacturer Hublot , towards being sponsor of the event, alongside computer peripheral manufacturer Thrustmaster . Ferrari will invite 24 eSports racers to the Pro series, and the 12 fastest players, in each category, will compete in four races in October of this year. This marks the second time that Ferrari has invested in eSports, having signed in 2019 as part of the ‘F1 eSports Series’.

Just as we went to the wire, a major announcement rocked the eSports community. Riot Games , developer of the massively popular ‘League of Legend’ and supporting LEC eSports competition, announced - and then the following day terminated - a partnership with the Saudi Arabian NEOM project. Due to a massive backlash from the LEC community in response to the announcement of partnering with the project, Riot Games decided to back out of the partnership. The community complaints were about the human right violations associated with the project. The NEOM project is seeing a multi-billion dollar investment by the Royalty and Government of the region, to develop a futuristic city. The Riot Games agreement was part of a major move by the developers of NEOM to turn the project into an eSports regional hub, already signing BLAST to manage and organize future eSports tournaments. The first segment of the ambitious NEOM project is scheduled for completion in 2025.

- Gaming’s Ongoing Hold

One aspect of the “new normal’ has been how much “ Frictionless ” communication between paying customer and interactive entertainment has become a thing. Where only a few months ago some executives of casinos, amusement and attraction venues were actively blocking and talking down the technology of NFC, RFID, or even attempting to remove smartcard payment elements from amusement releases, the industry has been turned on its head in a need to both offer a better-but-connected experience in these trying conditions.

One of those industries in the immersive entertainment landscape that had been caught in limbo by the “new normal” is that of “ Gaming ” – the casino and land-based gaming arena. Attempting to embrace technology on their own terms, the appearance of COVID and pressure on the bank balance of all the major casino chains, has seen an amazing reversal on previous entrenched opinions. As stated in previous coverage, with the dethroning of the previous “Gate Keepers”, new technology and applications are finally beginning given their chance.

This is best illustrated by the reveal that Japanese amusement and gaming giant’s casino division, KONAMI Gaming , had started the process of expanding their ‘ Synkros ’ casino management system to support cashless casino slot transactions on machines. Under the brand ‘ Marker Trax ’, KONAMI has signed an agreement with the Ellis Island Casino, to start field trials of cashless slot credit lines in the state of Nevada. The system works based on being able to manage and track cashless credit lines. The guest enrols onto the system, generating an account and unique PIN and, through that, the system authorizes a cashless wagering account; all this from a smartphone app. All managed and tracked (with detailed accounting), by the authorisation of the platform.

The system is being trialed towards wider deployment and is being monitored closely towards how it handles the simple day-to-day wagering and prize payment transactions – but more importantly, supports Anti-Money Laundering (AML) compliance, essential under Nevada (and most casino) laws. The casino operator commented on the need for a streamline process in interviews, the ability to remove trips to the ATM, and even physical currency from the playing experience. This system could be the start of a groundswell of change in this industry, and many other developers and operators are viewing this trial intently.

- The New Playing Experience!

For some time, The Stinger Report has championed the observation that the amusement and attraction experience has been undervalued by some in our industry. Those operators not sure of their customer offering have gone for a simple metric, that sees a “ Dollar-a-Minute ” equation on video amusement and some immersive entertainment, an equation that has not changed since the 1980s, and has become established as gospel by an industry that sees itself as only offering Pay-to-Play entertainment!

Using financials of what is being offered, based on calculations that are over forty years old, is not good – that the actual entertainment experience is also outdated has compounded a situation that was prevalent in the location-based entertainment sector leading up to the global health crisis. The industry seemed to sell two types of immersive entertainment offering. The first was a facility-based social entertainment placement, a carnival of different sights and sounds, offered in small bite size portions. Each play duration lasts a minimum of 60-seconds, to a maximum five-minutes, ranging across platforms from Videmption to video amusement, and even to VR (“ Snack Entertainment ”).

Then there was the second type of offering. Borrowing heavily from theme park attractions and visitor experiences, this was a more linear entertainment, with a start and a finish, tailored to groups, and towards a higher sticker price. This is best seen with the evolution of lasertag, 4D theaters, and with the inclusion of scaled down attractions placed into the venue. These offerings not only offered a better return and could deal with larger audiences, but also promoted the new way that players were consuming their play experience – the way they wanted to be “entertained” (“ Dining Entertainment ”).

For some time, the amusement sector has still thrived on the “ Walk-in ” traffic, individuals that happened on, or “ were just passing ”, and saw that an entertainment facility was close by. This also included the “ casual visit ”, people just walking round the game floor, gauging what is on offer at a location. This is totally different to the “ Reservation ” approach where, like with a theme park, the disposable income has been set aside to spend (dwell) at an entertainment venue for an allotted time and spend accordingly. This approach sees a dedicated effort to book the time, to want to consume hospitality, and to attend in a group. Best illustrated, on average, a “ Walk-in ” player will spend half-an-hour, compared to the average “ Reservation ” group who will spend over two-hours!

Along with the longer duration of dwell, there is a difference in expectations from the guest. Rather than hunting out their entertainment, the reservation visitor wants to be entertained, and so is expecting the venue to offer an “ experience ”. It is the difference in the experience that sees a much longer play time from each attraction or experience on offer. A four-player interactive dark ride may have many of the elements recognizable to an amusement site venue owner from their ‘ House of the Dead ’ or ‘ HALO ’ theater-enclosure cabinets, but will be much higher themed and last 15 to 20-minutes (and be priced accordingly). A different price model, linked to a dedicated secondary offering through high quality hospitality, has separated these venues apart.

Re-emerging from the lockdown of the pandemic, and suddenly now under new COVID measures, and all facilities now find themselves looking at “ Reservation ” business, with “ Walk-in ” becoming a thing of the past. And the question is, how many of them can up their game to offer an “experience” that will warrant the obvious increase in ticket price this will entail. As seen in Europe, the “amusement offering” is different in many territories, more a visitor attraction and location-based entertainment offering than an amusement site approach. This dining entertainment approach has seen a higher price able to be reasonably changed, and the adoption not of snack payment metrics like tokens and card swipes – but for ticket booking and longer player dwell time.

Another aspect of offering an experience is the inclusion of social inclusion – the ability for the guest to share information and images of their time at site, and what they have achieved. The often-mentioned ‘ FOMO ’ (Fear of Missing Out) is a factor in driving the use of social media. You will notice, in much of the latest developments we are covering in The Stinger Report, we are commenting on the inclusion of a social media app element to the latest attractions and platforms. That added “ takeaway ” is a special element, building repeat visitation, and drawing a higher experience price. These are all elements that are missed by the traditionalists in the amusement and attraction sector, but are not the future revenue drivers for those in the market who will survive.

The obstruction that many arcade operators felt to even considering adopting smart payment, is just one example of the reticence to moving from a snack entertainment model. As few really come to terms with the guests needs, they are just treating video amusement as a derivation of the coin-op vending industry. It is the need by the mature playing audience that saw longer stay entertainment offerings in the cast of the traditional arcade gain traction (examples such as ‘ Punch Bowl Social ’ and ‘ Dave & Busters ’). Still snacking – but to a high quality of experience. The amusement trade will now be faced with an impossible task, bringing some of its membership into the experience entertainment mindset – or realizing that we are about to see an industry fragment, as a new revolution of “ Experiential Entertainment ” drives the sector.

In conclusion, I do not think that any of us would argue that things are about to majorly change for our business. But not all change is bad, and not all situations need to be approached with an air of despondency and defeat. We are all going to have to look at our businesses afresh – but we must also understand to retain (and not abandon) the fundamentals that makes our industry a much loved and cherished entertainment medium.