TSR Newsletter | August 30, 2021
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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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The Competitive Entertainment Landscape
# 1085
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In The Stinger Report #1085 – This issue covers in detail:
1. [BREAKING NEWS] Considerable new investment in the eSports arena, with the announcement of amusement giant TAITO launching eSports team “ARCADER”; Cedar Fair Entertainment Company reveals to have started the process of exploring eSports arena at new property; and Esports Entertainment Group develops a platform to allow players instant deposit and withdrawal from eSports wagering on matches. All this, along with other developments in the international scene.
2. [TRENDING NEWS] New trends in the Asian entertainment sector revealed at ChinaJoy mega convention, taking place under strict COVID rules, with the latest console investment. Meanwhile, eSport developments in the territory include the announcement of the ‘2022 Asian Games’ in Hangzhou, China, along with new platform supporters. This physical event takes place while the 23rd IAAPA Expo Asia 2021 is abandoned, in the face of rising cases of the COVID Delta variant.
3. [BREAKING NEWS] Impact of COVID situation in Japan is brought into stark focus as more amusement sites close, with GENDA SEGA Entertainment permanently closing the famous ‘SEGA GiGO Ikebukuro’, and several other amusement sites are shuttered too. But not only amusement feels the grip of the pandemic, with information revealing the pachinko industry in Japan is seeing a massive drop in market size during 2020, to ¥14.6 trillion ($133b), along with reform across the sectors.
4. [BREAKING NEWS] The Social Entertainment scene continues to gather momentum in the West, as hospitality-fuelled mini-golf (“Puttainment”) sees PGA tour golf star join group of investors in ‘Puttery’ brand, owned by Drive Shack. Meanwhile, “Retro Arcades” gather momentum with the opening of new F&B social environments. We reveal the opening of multiple new venue brands, including Imbiba investing £1.4m ($1.9m) into the new retro-bar concept ‘NQ64’, which has opened its latest site in Scotland’s capital.
….and much, much more!
- 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.
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The momentum regarding the developments of the market continues, unabated by the continued choppy waters of the Global Health Crisis. Investment towards the next phase of development in the immersive entertainment sector also reveals some major new trends that hope to attract the new audience to the future of the industry, and its emerging trends.
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- eSports Continues to Take the Lead
The explosion in venue development of eSports Arenas has not been lost on anyone – fuelled by the meteoric rise of the competitive pastime during lockdown and continuing apace, as the latest chain of big venues was reported. Belong Gaming Arena (BGA), a UK-based chain of eSports venues, announced they were commencing plans to open 500 sites in US shopping malls across the country, over the next five years. The company announced the site of its first US venue in Houston, in a mall location. BGA has 25 locations in the UK, having recently moved into a new central London site. The operation is owned by Vindex, an eSports and technology company.
The deployment of eSports areas as an adjunct to shopping malls was also illustrated with the news that the mall complex in Shanghai’s Putuo District of China would be seeing an ESP eSports Experience Center. As reported by media service Shine, this installation will mark the creation of an eSports mall, offering items for players and the numerous eSports operations in this district. The venue is aimed at holding events as well as allowing players to compete – with the ‘King Pro League’ (KPL) holding their East China playoffs there.
The need to support the teams and create successful competitors has also been an area of the eSports explosion that has seen growing support. The Japanese amusement factories may have been initially slow to embrace the eSports revolution, but they have been working hard to make up lost time. Joining the ranks of other factories, TAITO announced the launch of its own eSports team called, appropriately enough, the “ARCADER”. Sporting specially designed uniforms, this is the latest team from the amusement community going up against teams supported by KONAMI and GENDA SEGA Entertainment (Lag Gaming), to name two.
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The new uniform of the ARCADER eSports team [TAITO]
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The importance of researching the deployment of eSports in the education sector as a barometer of developments shaping the future of the trend. It essential to understand that the STEM-based education system sees the enhanced learning taught through eSports as vital for the future workforce, along with representing a new offshoot of sports and athletic competition, with the global eSports market calculated to reach almost £1.2b ($1.6b) in 2021. One trend was covered by The Stinger Report, from our attendance of the education technology (“EdTech”) at the BETT (British Educational Training and Technology) show.
One example of an education system leading the way is seen with Kent State University, one of the first academic academies to incorporate eSports into their syllabus, with their first eSports program as far back as 1998. The university has grown its involvement into the competitive side of the sport, with over 400 students competing in several of the leading leagues and competitions based on the leading titles (taking part in ‘Overwatch’, ‘League of Legends’, ‘Rocket League’ and ‘Hearthstone’ competitions). Driving the application of the sport, the university has been looking at “Enhanced Streaming” to supply information and coverage of the leading players. This has seen with the Kent State University Tele-productions broadcast engineers turning to the latest remote camera technology in partnership with Marshall Electronics – that will allow the audiences to see reactions and interact with the team members, offering minimal distraction. The systems have been equipped in Kent State’s 12-seat V-style arena gaming space, as reported by AV Magazine. This is a system which is maximizing coverage, supporting enhanced live streams to Twitch, and it will be emulated by other arenas soon.
Speaking of eSports competitive events, after Amusement Expo 2021 more information was revealed of the two formative player international tournament competitions. First up, Raw Thrills / Play Mechanix announced the latest details of their 2021 event, the 14th annual Big Buck World Championship that will be starting in October, taking place in Chicago. This will be the first live event since lockdown hit the scene. The 2021 event will see qualifications with 128 players invited to the championship, with over $125,000 in total prizes available throughout. The other big event of the season has previously taken place with the returning to a live event for the 2020, 31st annual Golden Tee World Championship, organized by Incredible Technologies. The event was held at The Orleans Hotel and Casino in Las Vegas, with prizes of $15,000 last year. For both events, streaming of the competition plays a major part in promotion and sponsorship, with the Golden Tee World Championship represented by ESPN network. How much the traditional amusement trade will recognize the opportunity that eSports style championships can play in future business, however, has yet to be seen.
Speaking of casinos’ embracing of eSports, some very revealing commentary on the integration of eSports and casino operations was given during the Indian Gaming Tradeshow and Convention – expertly reported by Las Vegas Review-Journal. During a panel session represented by experts from both factions on adding eSports to the casino mix, it was revealed that there is still much to take into careful regard. The casino love affair with the competitive entertainment sport can trace back its roots to the first legal eSports bet taken in 2016, or the first eSports space in a Las Vegas casino, with the 2018 ‘HyperX Esports Arena’ (at the Luxor casino resort). But the love affair has reached a bend in the road, with operations such as Downtown Grand and The Linq Hotel having scaled back previous investment in this sector. The panel session revealed a new approach to deployment of eSport into casino, and how the future investment will shape a more robust business model riding off the new-found audience interest in the venture.
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Regarding the crowded VR scene in Las Vegas, we look at the opening of a new VR attraction within the critically acclaimed ‘AREA15’ entertainment hub. The venue opened with the ‘Birdly’ VR flying simulator from Somniacs, and the ‘OZ Immersion’ free-roaming experience by Backlight studios; and it was revealed that new start-up Virtualis opened (in July) their 7,000-sq.ft. venue, comprising of two 2,200 sq.ft. free-roaming VR arenas. The installation employs the TrueVR Systems free-roaming platform with 4D effects, supported by Optitack and a StrikerVR weapon system, offering a selection of five of the leading games on the platform, with more coming soon. This is now the third free-roaming VR attraction in the locality, with Sandbox VR recently opening their latest store, after replacing The VOID. As well as the appearance later in the month of the pop-up VR experience, ‘Army of the Dead - Viva Las Vengeance: A VR Experience’, in support of the Netflix promotion.
Viewing another aspect of the entertainment industry that is turning towards eSports as a new revenue stream and it was announced, in a July press release, that Cedar Fair Entertainment Company was starting the process of exploring the potential development of an eSports arena at a new property. The theme park and water park corporation stated it was looking at a 1,500-spectator stadium, with an eSports arena and over 200 gaming stations, to be built in Sandusky for an estimated $28m. This was reported as being the next phase of development in the $50m ‘Cedar Point Sports Center’ project, which involves a partnership with Esports Development Corporation. Further details on the proposed final design for the arena, facility and additional eSports space, will be made in the coming months but represents one of the largest investments in competitive gaming from a regional amusement-resort operation.
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Artist’s rending of plans for intended eSports Arena [Cedar Point Sports Center]
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The proximity to eSports and actual wagering and betting took a step closer, with news that Esports Entertainment Group, an online gambling corporation supporting eSports competitions, would be launching in Finland a “pay-and-play” platform. The company has developed a platform to circumvent the Finnish regulations, that will allow players to access instant deposit and withdrawal from an online casino platform which will support eSports wagering on matches. The brand, called ‘Lucky Dino’, will offer players a unique way to take park in gaming activities, bypassing strict local regulations. Based on the success of this service, other implementations of this approach are expected to follow.
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- China’s Big Entertainment Event
While missed by much of the Western media, one of the largest physical consumer and trade events in the entertainment sphere took place at the end of July. The 19th China Digital Entertainment Expo & Conference (known as ChinaJoy), and its new accompanying ChinaJoy Plus Online Carnival, were held during the end of July and beginning of September, in the Shanghai New International Expo Center. Organized and supported by the China Audio-Video and Digital Publishing Association (CADPA), the physical portion of the event was expected to attract some 300 exhibitors, across the spectrum of game developers and publishers, electronics manufacturers, and peripheral sales.
At the same time, the event attracted several secondary gatherings and conferences, promoting VR, comics and animation, and eSports. Hundreds of the event’s attendees also appearing in cosplay of their favourite characters, with this year’s event focused wholly on appealing to China’s Gen-Z consumer-base. The event was supported by a dedicated live streaming presence, to support virtual attendance to the event via social media, and kicked off with strong COVID prevention measures in evidence, including negative test results (Proof of Negative) needed to enter the halls. This came as China grappled with its third wave of infection, following the Delta variant’s appearance in the territory.
The crowded show floor included the latest anticipated video game releases for the territory, as well as the concerted push of the new SONY Playstation 5 console for the Chinese market. Some surprise appearances from the show included the first teaser trailer for the upcoming ‘King of Fighter’s 15’ – the latest in the brawler series from SNK. This came with more rumors circulating from the Chinese show, regarding the reappearance of the franchise in the amusement scene. XR trends were promoted on the floor with the latest consumer VR, with lots of 5G connectivity advantages on show. Regarding LBE products on display, there was a smattering of VR simulators, and even a large wingsuit robotic VR experience in the Samsung booth (a good example of a “Active Immersive” experience).
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Robotic VR experience [China Daily]
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ChinaJoy is seen to be a B2C event, with the players having a much stronger affinity with the event, supporting the exhibition stages and dressing like their favourite characters. This even has proven resilient to the current changing market conditions and supported the growth of video gaming in the territory. Meanwhile, in the US, the equivalent E3 convention has imploded, forced into two years of virtual events and, even before that, seeing flagging attendance and mismanaged operations. E3 is now looking to reinvent itself for the changed landscape.
One of the massive trends represented by ChinaJoy’21 was the continued growth of eSports, such as the launch of ‘JD E-sports’ (JDE). The multi-billion Dollar market in the territory will receive its own official event with the announcement of the ‘2022 Asian Games’ in Hangzhou, China. This is expected to be a massive boost to the Chinese eSports landscape and will have serious repercussions across the competitive gaming scene. It is also expected that this event will have its own impact on considerations by other organizations to increase their association with the emerging eSports scene (such as reported with the possibility of eSports being one of the demonstration games for the Paris Olympics).
Just as ChinaJoy was ending, news broke that the International Association of amusement Parks and attractions (IAAPA) had officially cancelled their plans to hold the previously-postponed Shanghai convention. This marked the third abandonment of plans for an Asian event, originally cancelled from 2020 (held as a virtual event), the physical show then moved from June to August of 2021, with the organizers eventually abandoning the event days into August. This was seen as incredibly short notification of the abandonment of the event, coming on the 4th for a show scheduled to open on the 10th. The 23rd IAAPA Expo Asia 2021 (formally known as the Asian Attraction Expo) had been expected to attract some 6,000 buyers, with an estimated 160 companies known to be exhibiting. This is in comparison to the 2019 event, seeing 8,100 buyers and some 429 exhibiting companies. Now all eyes turn to the 2022 Asian event, which has been scheduled for June of that year at the Venetian Macao Resort, in Macao.
At the time of writing, the IAAPA organizational team had not published an official statement for the reason for the cancellation. But well-placed sources stated that, at an organization committee meeting, executives claimed the sudden imposing of new travel restrictions on domestic and international visitors was the final blow – with the local government dictating the cancelation of the event. Many observers in the industry had expected this situation, based on the spread of the COVID Delta variant. That said, ChinaJoy proved that with the employment of a rigorous “Proof of Negative” testing policy, large audience events are workable – athough sadly the IAAPA organization is coming under criticism. Concerns about IAAPA organization’s ability to schedule events under the current conditions was illustrated by an open letter from the German Attractions Association, questioning the ability of the operation to effectively hold the planned Spanish IAAPA Europe event, scheduled for September, while show organizers place a ‘COVID-19 Insurance’ surcharge in place for all attendees.
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- Japanese Amusement Feels the Brunt
The situation regarding the traditional amusement and entertainment business in Japan seems to be one of the most impacted by both the global lockdown of business in affected areas, and also by the change in the business landscape overall. The traditional best practices have always been in question, but the harsh light of fiscal reality has forced questionable approaches into the open.
The key Japanese amusement factories continued to see changes in their business fortunes. Regarding the amusement venue operation side of the trade, the fallout continues from a mixture of the impact on business caused by enforced lockdown, and recent acquisitions shaking out the resulting deadwood. One of these was the reveal that GENDA SEGA Entertainment would be permanently closing the famous ‘SEGA GiGO Ikebukuro’. The venue, first opened in 1993, has been a hub for the playing-community, and GENDA SEGA will be holding a special event to mark the passing of the venue (dependent on local restrictions). GENDA, in a Tweet, stated that the decision was taken as the building lease was ending and the whole property was due to be redeveloped.
News of this move came after it was revealed that BANDAI NAMCO would be permanently shuttering its ‘Namco Youmetown Hakata Store’. Meanwhile, Japanese family entertainment center operator HALOS announced the permanent closure of its ‘Family Amusement Harahara Store’. These sites were just the tip of the iceberg regarding permanent closures across the Home Islands, a fact highlighted in a recent feature in Wired Magazine. While many of the independent amusement sites were impacted by the lockdown and loss of business, it was also clear that the larger chain operations were addressing their positions, restructuring, and dropping underperforming or difficult sites.
Concerning the decline in the traditional business in Japan, the impact of the downturn in audience interest was compounded by the issues of the Global Health Crisis. It was reported that the pachinko industry in Japan has seen its largest drop in market size during 2020, to ¥14.6 trillion ($133b), down by ¥5.4 trillion ($49.2b) from the previous year (as reported by Inside Asia Gaming). The pachinko sector has seen steep declines as the trends for gaming move away from the traditional steel-ball automated bagatelle platform, for more traditional Medal games and conventional gaming. The 27-percent drop in sales and gross profit speaks of a terminal condition that will only be accelerated by the decimation of business and the country-wide lockdown. This will be expected to worsen the condition of those Japanese amusement factories who have continued to keep an investment in this traditional gaming pastime.
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- Social Entertainment Gains Ground
The draw of Social Entertainment business for the investment community has been self-evident, especially regarding the new interpretation of hospitality-fuelled mini-golf (“Puttainment”) projects, such as the investment raising achieved by Puttshack ($60m), and Swingers ($20m), along with others (as was covered in detail in the previous Stinger Report exclusive feature).
The investment by golfing celebrities into the business was seen recently with Tiger Woods’ company, TGR Design, developing ‘PopStroke’ – the family-focused food-and-mini-golf chain just announced plans to open seven properties across North America. This news was followed by the announcement that PGA tour golf star Rory McIlroy’s company, Symphony Ventures, and a group of investors, have taken a 10-percent stake into the food-and-mini-golf brand ‘Puttery’ (owned and operated by Drive Shack). Amounting to a $10m investment by the group, this comes as the brand starts a rollout seven venues for the end of 2021.
As we reported (in our previous exclusive coverage of the mini-golf explosion in The Stinger Report), Drive Shack was following the line that Topgolf had followed, with their own mini-golf inclusion to their chains. However, only three of their ‘Putt Hut’ mini-golf courses have been opened across their 54 locations. The concept was designed by Burton Golf Design for Topgolf. In an interesting crossover, it was revealed that Topgolf had launched a new promotional VR game experience for the Oculus Quest 2 headset. Called ‘Topgolf: Pro Putt’, this is a virtual reality golf experience based on the chain’s brand of play and scoring.
The Social Entertainment scene also saw the addition of a new entrant – with the launch in June of TOCA Social. This is one of the latest entertainment venues taking residence at The O2 family leisure and retail destination, in London. This new offering brings immersive soccer game experiences, married to a food and drink social entertainment environment. The space, along with 17 immersive soccer simulators, uses tracked ball and projection, and there are private rooms, amusement, and a live event space, all within the 30,000-sq.ft. unit (full report on the venue coming soon). Reminiscent of what has been seen with Swing Suite and X-Golf in the States, soccer can now add its name to the list of “Social Entertainment” offerings in a hospitability mix. We expect to see other variants on this theme in the coming months. And, also, a Special Report in The Stinger on the growth in “Immersive Display Enclosure” (IDE) tech.
Another aspect of the growth of Social Entertainment is the employment of retro entertainment. Across the UK and US, a series of “Retro Arcades” have opened offering a F&B social environment, supported by classic arcade machines and memorabilia. Playing on the nostalgia and popularity of the classic video arcade experience, these sites are personified by examples such as recently-opened in the UK city of Norwich. Called ‘Retro Replay’, the facility offers a selection of some 80-video amusement machines for the classic period. The facility is an example of “retailtainment”, ensconced in a parade of shops in the city. The facility employs a wristband payment model, buying time on the free-play machines. Opening in London, ‘Four Quarters’ is another arcade bar concept that will offer 30-video amusement classics to play, supported by a bar atmosphere, and offering 16-craft beers on their menu.
Investment in the retro-revolution has encouraged serious interest, with the likes of Imbiba (a well-known hospitality investor) investing £1.4m ($1.9m) into the new retro-bar concept ‘NQ64’. With three locations in the UK (Manchester, Liverpool, and Birmingham), the venue offers a drinking den atmosphere, with a selection of cherished classic video games and retro video game consoles. The ‘NQ64’ operation, in June, added a fourth location in Edinburgh, as part of the rollout plans coming from this new investment, with a Newcastle site also in development. While this interest in classic amusement gains further momentum, however, sadly the current amusement trade seems not to be capitalizing from the revival in amusement interest.
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Social entertainment embraces amusement [NQ64]
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This concludes our latest Stinger Report, we thank all our subscribers and advertisers for their support, and the next report will follow shortly.
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November 30-2 December
Presenting
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