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LBX Collective
Sound Off #64 - Large format location-based VR, Edutainment, and more!
Sponsored by Intercard!
An invigorating exploration of the evolving landscape of location-based virtual reality takes center stage today. We delve into whether larger audience VR experiences stand a chance in the highly competitive entertainment market.
• Discussing trends in large audience VR experiences
• Analyzing profitability vs audience engagement
• Evaluating shifts from small group to larger group VR setups
• Examining notable company pivots into edutainment
• Highlighting challenges in sustaining profitability in standalone VR venues
• Insights into cross-promotion among various entertainment options
• The significance of continuously refreshing content to entice repeat visits
• Looking ahead at upcoming industry events and future market projections
Are you on the edge of your seat? Because we're about to SoundOff with Kevin Williams, covering today's latest trends in location-based entertainment Brought to you by the LBX Collective, your community to connect, engage and inspire. Alright, everyone, let's buckle up, alright? Well, welcome everybody to Buckle up, all right? Well, welcome everybody to SoundOff number 64 with Kevin Williams. And I'm coming here remotely from Dubai, so just a little bit south out of the main city center, and I happen to be at Chaos Carts and it is getting a little bit more busy here. So when I first showed up to take my ride, there was only two others, uh, besides myself. That, uh, that went out onto the course so that they added a couple of staff in. But you know what? It's starting to fill in and there's uh, you know there's a lot of activity here, so it's uh, yeah, it's uh.
Speaker 1:You know, got a little bit of activity behind me, so we'll just have to ignore it Is that or have the blue wall behind me.
Speaker 2:No, nice to see some action.
Speaker 1:Yeah, exactly, exactly, and all right. So what do we got? How are you going to change my mind today?
Speaker 2:Oh well, I'm jumping into a discussion that we're going to talk about.
Speaker 2:But I'm starting by laying the foundation. Foundation by asking the question you know is the large audience VR adventure experience the new profitable way to operate VR or is it the only way to operate VR audiences? That we've seen free roaming VR deployed from a number of companies, but the maximum we've seen is about eight players moving through the experience where the new generation of immersive adventures are now offering audiences of up to 45 or even 50 to be able to migrate through a virtual experience and, from my point of view, the amount of money you can charge, as well as the throughput utilization and the ability to have a turnaround experience, seems to be a much more cost effective and profitable approach compared to maybe the onesies, twosies, foursies or the eightsies of the traditional free roaming experience.
Speaker 1:Yeah, I mean I, I definitely think that the onesies, twosies and maybe even the foursies we're going to use those terms are, uh, you know, we've seen them struggle, we've seen them struggle, and then people you know venue operators are sending them back, they're ripping them out of their facilities, especially the tether experiences. But at the same time, like I think there's still a fundamental difference between and maybe an eight person or six, that you know, 12 person, zero latency type experience versus the ones where I just strap on a headset and I wander around in a room for 40 minutes or 20 minutes or whatever that is, and, and you know, when I look at what those guys are doing, it's like okay, it's an interesting experience, but they look bored as shit walking through that space. So, like, I don't know, I mean profitable, sure, repeatable, I don't know.
Speaker 2:That's a big argument. Now, number one can you say apples for apples or are we talking apples and oranges? Are we talking that there is a new aspect of the business which is utilizing a large space with a virtual adventure which may not have a high repeat visitation, so it may be a temporary space, and as soon as the novelty wears out or the audience dries up, you just close it and turn it into something else. The novelty wears out or the audience dries up, you just close it and turn it into something else. Or are we now looking at this as a kind of cinema experience where you come up with new content regularly and you build a relationship with your audience? To be frank, I'm not seeing these large VR venture venues building that relationship with their audience, so that could be a very short-burned facility. Likewise, as you said, we're seeing people pulling out their amusement VR systems as they're beginning to see a drought in their sector, and we'll go into a little bit more detail about you know really where we are with that a little bit later on.
Speaker 1:Well, I had to unmute myself for a second there, All right. Well, we'll come back in just a short, brief minute. Intercard is the only cashless system designed, developed and manufactured all under one roof. They introduced cashless technology to the amusement industry and have been leading the way for over 30 years. Cashless systems from Intercard increase customer spending, guest satisfaction and boost revenues by up to 30%. Intercard is so proud to be serving the amusement industry, and if you aren't already part of their global family of customers, they hope you will become one soon. All right, Mr Kevin, let's dive right into it.
Speaker 2:Diving into the trends and following on from the meme and what we were talking about, one of the largest of the installed location-based entertainment VR free roaming experience providers is Sandbox. Not the largest of the number, but one of the largest, and the company recently announced that they had seen $200 million worth of ticket sales across their operation. It's an interesting number. You have to put it into context of how many facilities they have and the average price that they charge for their experiences. But when you look at it in the cold, hard light of day, it's an interesting number. But it is taking them some time to get to that number, even factoring in the COVID pause that they went through. But the other thing that was interesting to hear from the company was that they are now pivoting also into the development in-house of what they call cultural learning category, what I would call edutainment kinds of experiences. They're doing experiences that are going to be more focused on a theme that is museum or zoo or cultural learning based, and that kind of tells us that they're broadening the mix of the entertainment experience away from blasting zombies or playing a squint game and that they're trying now to be all things to all men by adding a virtual adventure or virtual learning component to them and when you take that into comparison with what's happening in the market. You know one of the largest providers of systems out there franchise systems is our friends at zero latency, with with over 100 facilities operating their unique VR experience, and that company is focused wholly on their game experiences developed in-house. Majority are their own properties, but they have done agreements. You know we recently had the chance to try out their Warhammer Space Marines experience and saw how that fits into it. Our friends at Sandbox VR we've just touched upon how they're doing the market and now they have decided that they're going to pivot into doing what I would call edutainment or educational kinds of experiences. And then we look at our friends at Dreamscape. Haven't heard a lot about Dreamscape, for various reasons, other than we reported on the closing down of their LA facility. They still have their Geneva facility and they also have one in the UAE, if I'm correct. Oh, no, in Saudi. I do apologize and you know they are an interesting company because they have seriously pivoted internally into the education market. They actually did a deal with the Arizona University and they use their virtual reality products as educational systems. It's an interesting mix. We haven't heard that much about how successful that has been, but it was a big rollout as they kind of divested themselves from focusing wholly on location-based entertainment facilities and was looking towards rolling out a suite of products for education.
Speaker 2:And now we also have the explosion in immersive journeys.
Speaker 2:It's one example, but from other companies creating the immersive adventure, which is more of a gallery or a zoological or an experiential adventure kind of approach rather than a competitive game approach.
Speaker 2:That kind of tells us that we're at that point in the virtual reality sector where it is trying to redefine itself and we're recording this particular session a couple of weeks before we have the vr summit in las vegas uh and um, you know, a partner event along with uhusement Expo.
Speaker 2:And the thing for me that's going to be very interesting about sitting down with all of the attendees at the VR Summit is going to be asking the hard question about how is business and how viable is the business going forward? And this is something that we're really going to need to nail down that where we are with virtual reality from a location-based entertainment standalone approach, such as what sandbox and serial latency and others are doing from where it is as a product as a drop-in amusement product for facilities. And then, finally, where we are towards the future. Where is the future investment going to be coming? Because I can tell already, from the research that I've been doing, that the number of vr products that we're going to be seeing presented at ialpa in november looking all the way into the distance not a big crystal ball, but just looking a little bit into the distance is not going to be the same number that we've seen in previous years.
Speaker 1:Brandon, yeah, I, if we just want to back up to the numbers that Sandbox was recently announcing. I was doing some quick math here, while you were talking about some of the other locations, or some of the other types of things.
Speaker 1:And you know, look, we've got 200 million spread across 35 venues currently. Granted, they weren't all open right out of the gate, so this sort of doesn't quite break down exactly. But let's just assume that all 35 venues have been open since they started in 2016 and taking two years out for COVID and so giving them a little two-year COVID break, that really works out to be just under a million dollars a year per location, per location. And look for some FECs, for some small square footage FECs, like an inflatable, a million bucks a year is great, but for the size and the technical build-out and the amount of staff required for sandbox VR, you know, basically throughput at a million dollars a year, that's not enough. That's not enough to even it would take them a decade or more to cover more way more than that, to cover their costs of, you know, the cost of actual development, because that's just their top line gross revenue. That's not taking into account any of their costs or any of their you know staffing and everything else licensing exactly.
Speaker 1:So anyway, obviously they're not making just a million dollars a year per location because they haven't all been open, so you know. But like let's, let's even double it, maybe triple it, and I still question whether or not it's a good, uh, viable franchise for people to go put in. It's just a standalone. I don't know, not when, I can do a zero latency as one additional, as an additional attraction alongside a mix of other attractions and have that repeatability really driven by the mix of attractions versus the attraction.
Speaker 2:And that kind of brings us to to the hard, the hard nosed facts of this market. Now we have left the honeymoon period and VR location-based entertainment, as well as immersive entertainment has to now prove itself as a strong revenue. We understand why our friends at Sandbox want to promote the 200 million number. It is a key number that I'm sure investors want to see being done, but it also kind of tells us that we're not seeing the kind of explosive numbers. And then, to start talking about pivoting into educational experiences, kind of tells us that you know, the company is looking at divesting and trying to offer more of a wider experience to its audience, to offer more of a wider experience to its audience. I would also point to one of the aspects about trying to make yourself available with different types of experiences is that maybe they're looking at the educational market of encouraging field trips to their facilities based on a STEM kind of approach. I don't, you know, they haven't made an official announcement about that. The information we have is that they are looking at creating this educational category and we will watch this space with interest. Anyway, moving on and continuing with VR and also underpinning what we were saying about the cost-effective nature and our friends at VEX Solutions has announced the VEX Arena Lite, which is a compact, smaller, more cost-effective version of their virtual arena system, built for venues of all pocket sizes. It still is able to operate with their vast library of content, but it is now a cheaper solution for those operators that are sitting on the fence about whether they should have a virtual reality element to their facility. Interesting to see this being announced this week. I was surprised. I would have hoped that they would have made this announcement at the eag show so they would have been able, uh to to promote it more. But they've decided now, uh, to make this throw their hat into the ring. So they have their vr vexer venture system, which is the full bells and whistles haptic feedback, physical effects. They now have the VEX Arena, which is their arena system using haptic guns and headsets, and now they have the light version of that arena, which is much pared down for operators of all sizes. Which is much pared down for operators of all sizes Talking about paring down your operation for all sizes? No, I'm only joking.
Speaker 2:Dave Buster's has opened their first, or in the process of opening, their first Australian venue. This is a big move for them part of a real expansion of the Dave Buster's brand into other territories. We know they're looking at a European opening soon. They've had their work with their franchisor in India. Now we can add Australia to that mix. They've sat down with Night Owl Entertainment Group out in Australia but they'll definitely have the shuffleboard system and I'm not sure if they're going to have the arena system. But they will have the darts. But again, I haven't got full details on that. This is quite a development for Dave Buster's moving into the Australian market. It is a crowded market. If you followed our openings and shots you've been hearing a lot of Australian developments. Perth and Adelaide are meccas for this type of target entertainment experience and we look forward to seeing how this one rolls out. Hopefully one of us will get a chance to go out there.
Speaker 1:Oh man, I would love to. We just missed the summer in Australia, but we'd love to get out there. This is a perfect use case for coming into a brand new market that doesn't have any preconceptions around Dave and Buster's brand and then implement the new Social Bay layout. And if they implement it in a way that is very similar to the location that I visited in Cincinnati, ohio, that I talked about a couple of a couple of LBX shows ago then, then I think it has potential to actually do very well. I really thought that that layout, starting from from the beginning, from the ground up, and then building around the social media concept, I think it's really the only way to make it happen and, again, you don't have the difficulty with the brand being shitty arcade or shitty bar food, sports bar and arcade that Dave Buster's is known for here in the US. Anyway, I do wish them luck down in Australia and I think they have a decent chance actually of being known for something more robust than just what we know of as here.
Speaker 2:It's a clean piece of paper from the point of view of the audience there. They have no preconceptions of what a Dave Buster's facility is other than that it's an entertainment venue or entertainment venue. And you know, opening this up with the new components the big screen, sports bar and the social bays people will take that as read and they hopefully will take it to their bosom and they will enjoy it, where what we were saying from the American point of view, is that you have the preconceptions to jump over of what a Dave Buster's is. We wish them a lot of luck. And this wouldn't be the first time that a brand has found success when it has launched its particular rebrand outside of its core market, as we saw happen with Chuck E Cheese when they opened their Chuck E Cheese facilities in the UAE.
Speaker 2:Interesting pivot We've talked about adding, shall we say, edutainment to your virtual reality experience. Well now, how about adding some wellness to your immersive adventure experience? And our friends at Electric Playhouse? The company uses projection systems and interactive game experiences more of a mission room activity experience. They have now announced that they're going to be adding yoga and health to the experiences available at their facilities. This immersive wellness experience will be rolled into the first of their facilities as an experience that you can sign up to. It's a pivot. It's an interesting pivot. It is utilizing of your space. Maybe it's being dropped in into dead times within your facility's operation, and it's a serious pivot. You know, moving away from entertainment and immersive gaming into immersive wellness shows that you're looking at other ways to make a buck, or so I'm not sure what your feelings are about immersive wellness, brandon, make a buck or so.
Speaker 1:I'm not sure what your feelings are about immersive wellness, brandon. Yeah, I mean so. I've been. I think there's a lot of applications for immersive wellness and we're seeing some really cool implementations of that. As long as they're being designed and developed for wellness from the ground up, from the beginning.
Speaker 1:First principles I think when you try to slap something like this into what is meant to be an entertainment venue, it just it is a pivot. It smells. It smells a little bit like they're grasping at straws, but they don't have a strong product market fit as it stands. At the same time, um, you know what like if you want to look at the, you're adding the sandbox, vr, adding in the edutainment component. Venues have been doing stem additions for a long time. Traditional venues like bowling or roller skating are adding STEM components, adding other things into their venues, as a way to just augment their revenue base for times that they're closed. So if that's what Electric Playhouse is trying to do, all right, we're just trying to add some additional revenue to it. But it does seem like to me they're struggling with the general product market fit issue if they're already looking at this kind of move to add in yoga into this entertainment space.
Speaker 2:I'm looking forward to. When we're in Vegas, we'll try and pop into the electric playhouse that's opened up there and see if they've added the wellness component.
Speaker 1:We're going to do some yoga together Is that what you're saying.
Speaker 2:No, we're not going to be doing yoga together. No, no, no, no. Moving on and our friends at Elevate have pivoted into the F&B very heavily. With their latest rollout they're actually adding a food hall component to their mix. That is, what we mean by a food hall is that they've dedicated an area to multiple providers of particular foods that can feed off of the venue audience that they've attracted to their entertainment, their sin-attainment offering Under the L8 Eats branding.
Speaker 2:I would like to get their marketing guy in a room with a sharpened object for a couple of minutes. The issue here is that they've actually partnered with some recognized food brands here. So you know their food hall will have the Californian Pizza Kitchen and the Beast Burgers and the American I haven't had the Great American Cookies yet, I'm looking forward to trying that brand and the Ballpark bites. All of these are going to be created into food environments that go into their spaces and we're hearing the phrase that this is going to be going across all of their venues. So I'm going to be looking forward to seeing how they incorporate this eats element into the mix of their facilities. Maybe allows them to move away from having to do the F&B component and handing that over to third parties. Very interesting offering.
Speaker 1:Yeah, I was wondering if they were getting rid of their own F&B and just adding this food hall, you know, replacing with a food hall, or if they're adding in the food halls in addition, and if so, then they're going to put it in all their locations and I assume that either they're going to have to take out some attractions for that space or they're going to have to find contiguous space nearby or whatever. Also, from a branding standpoint I just looked it up they could have done Elevate Food versus Elevate Eats, and I think that would have made a lot more sense. You have Elevate Fun, you have Elevate Food. Why wouldn't you have just done Elevate Fun and Food?
Speaker 2:I don't really understand, but you know, whatever Eats with a Z, sure that's going to be cute More cute than I think focused and it's not going to age well, but what do we know? We're not high paid marketing executives, we just work in the industry. But yes, I get the feeling that it is allowing Elevate to remove the onus of food operations and to pivot it through this. But we'll get a chance to see it in action, I'm sure, soon. My heart.
Speaker 2:Disney Springs is a hospitality and retail gulch close to the Orlando parks and it has an area unit set aside. That has been, you know, has quite a history behind it. The space at Disney Springs most recently has been the home of the short-lived NBA experience, which closed its doors in 2020. Don't blame COVID the facility was dying on its ass before then and what I think they officially revealed the close in 2021, but it died a horrible, painful death in 2021. And anyway, Disney has been mulling over for the last four plus years what to put into this very expensive building and they finally announced that they're going to be dropping in the Level 99 venue operation into the venue. Now, Level 99 is a kind of a physical active mission room kind of experience, very similar to activate that kind of approach, and you know they're going to have about 50 of these physical and mental challenged rooms dotted inside the facility. It's going to be totally rebranded, Part of a chain of about three facilities under the level 99, and this is going to be their largest installation. It's going to be interesting to see how quickly they can populate the empty MBA experience building and get the level 99 up and running. I'm looking forward, hopefully, that they can get it up and running before IALPA this year so we can get a chance to pop into it.
Speaker 2:The reason why Disney Springs is close to my heart is, for you guys that don't know, I used to be a Walt Disney Imagineer and we developed the Disney Quest facility and that Disney Quest site was actually on the same site of where they put the NBA experience and we were kind of seeing a bit of a curse with this space, because the Disney Quest facility was there for nearly 20 years at this space, very beloved by the audience there, and there was a big outcry when it was finally pulled down and turned into the NBA experience, which took five years to develop, threw its doors open in 2019 and closed its doors quite soon after, and it closed its doors quite soon after.
Speaker 2:Very badly laid out, it was clear that the individuals behind the NBA experience didn't have the same passion for location-based entertainment as the DisneyQuest guys have, and it is clear that Disney has had to parachute in the location-based entertainment experience to try and repopulate this building with something that will appeal to this audience, an audience that has been waiting a long time for some kind of interactive immersive entertainment to replace the original immersive entertainment experience that they had. Anyway, again, I'm looking forward to sticking our noses into Level 99's installation as soon as they throw the doors open there.
Speaker 1:Yeah, I will tell you as soon as I get to Orlando I will do the Level 99. I have yet to do a Level 99 experience, although I missed the opportunity when I was up in the Northeast and when I went and visited Time Mission and got a chance to check out them. I didn't do Level 99. But this is a massive get for them. This is huge for the fact that they only have three. This is their third location and it's in Disney Springs in Orlando. I really hope they succeed. They do well. I think they will do well. From what I've heard, level 99 is a phenomenal experience, if you like that mission adventure concept. I'm excited to see how they do and I'm excited to go and play it myself.
Speaker 2:When they're in the line of rest, it's theirs to lose. This site has been crying out for an immersive entertainment experience after they dropped the ball with the NBA experience. We wish them a lot of luck here. Some M&A business going on in our sector, as is the way Our friends at MediaMation Inc has had its assets acquired by MediaMation Entertainment. Just to be confusing, they've really done a reverse acquisition, pivoted all of their properties and activities back into the core mediumation entertainment operation, which is now going to use this group of technology to move forward into the market. If you're not familiar with mediumation, they're best known for their MX4D ride seats, which are used in cinema and attraction application, but they also have very strong planetarium and large theater experience. No numbers were quoted in this reverse acquisition, but it's kind of a way of securing the business going forwards. It's kind of way of securing the business going forwards, talking about the growth of the business and moving forwards.
Speaker 2:And we got some research information from a company looking at the bowling sector and you know they were turning around and saying that they felt that in 2024, that you know the bowling industry is worth about 20, sorry, worth about $18 billion. Now the bowling industry is quite a big beast. They're talking everything from the sports bowling sector to the boutique bowling and all of the peripherals that surround that, and they were talking that they're expecting that the market is going to be worth in 2034, 25 billion dollars, vast amount of money. And you know this moves along with the information that we're seeing. You know, just in the UK sector there are about five, over 5000 bowling facilities there and this is important to put this into perspective. This traditional bowling sector is not the one that's generating this perceived giant explosion, but it is now the new investment towards next generation competitive, socializing bowling and not just sports bowling with the gravity pin setting systems, but also looking towards the future with the duck pin and string bowling business finding its footing and rolling forwards. And I think you know for once this may be a conservative estimate by the number of new venues that we're seeing opening their doors and the number of these venues that are parachuting in a bowling component, a boutique bowling component.
Speaker 2:We look at Lane 7 as an example of a company that's received a massive investment towards rolling out new venues, and then you know an example of that massive rollout and the increased investment go back to our Cinetainment comment and the cinema chain, the laid-back boutique cinema chain that is the Light. They have announced that they are exploring options to work closely with our friends at All Star Lanes. All Star Lanes, one of the earliest of the boutique bowling entertainment facility brands, and now they're going to be having a relationship with the light. We're not sure if this means that the light will be dropping in, you know, removing maybe one of their sound stages and turning them into a bowling component, or if they're going to add a dedicated cinetainment facility on top of their existing sites or new sites, but they have stuck a flag in the ground to say that they're exploring this and they will be moving forward with this Very interesting but again proving the continued interest in the bowling entertainment market, as we can see.
Speaker 1:I'll just say real quick this seems to me like the merger that we should have. I'm going to say the merger, the merging together, the merger of attractions, the complement of attractions, that I'm glad to see that they're recognizing they need to do. It will be interesting to see how they end up working together productively, but I'm glad to see that they're thinking about that. If an all-star lane is on its own, again single attraction model with maybe some amusement component, and then a live big cinema chain, and you really need to bring those two things together. So yeah, this is good to see.
Speaker 2:That convergence we keep on talking about of standalones into multiple entertainment mix use seems to be pivoting along quite nicely. Interesting entrance into the market here, and one that you know kind of doesn't surprise me, but it's showing kind of a direction where we're going. Urban Fun, for those of you that aren't aware, is a entertainment chain or the beginning of an entertainment chain. This is the first facility in Reading in the UK through its doors open recently, and this is being developed by Funbox, which also has a partnership with our friends at Sega Amusement International. So this is kind of the vampire running the blood bank. We have the amusement company that now is looking heavily towards having an amusement facility operation mix to its chain. The first facility has opened and this will be followed by others.
Speaker 2:And in the same way we have the announcement in the US of Chuck's Arcade, which is Chuck E Cheese's development of their own mall-based mini amusement entertainment offering, not borrowing too heavily from the Chuck E Cheese original brand but trying to capture the main zeitgeist and creating an entertainment space, not to be confused with what CEC Entertainment has been doing with their Fun Spot arcade chain, which is what we see as a kind of a temporary blip direction for them and maybe it is better to say that the Fun Spot arcade chain was a learning process for them to develop, which is now going to be the Chucks Arcade.
Speaker 2:I'm interested about the branding that they're going for with the Chucks Arcade and from the initial pictures we've seen inside the site, they are really going for that retro nostalgia arcade venue mix, but they're also trying to go for a modern take on that. But this is an interesting aspect of our market now that we're seeing the amusement companies as well as the amusement venues looking at trying to reinvent themselves with a much more front and center brand mix and as well as a mix that can pivot into existing mall locations, into existing mall locations. One of the things about the press release from CEC was saying that the Chucks Arcade venue is aimed at mall locations and that they have other mall venues that they're particularly interested in rolling into.
Speaker 1:Yeah, I think this one is a couple of things that stick out to me here. First of all, I think there's a juxtaposition with Chucks Arcade and I talked a little bit about this on the LBX show last week but going to retro brand and going to retro theming inside, but yet not having retro games inside but having all the latest modern games, as they had also talked about in the press release, and actually that the CMO had also talked about in one of the online discussions that he had, and so I think there's a little bit of a weird juxtaposition there.
Speaker 1:I would see Chuck's Arcade with that branding and expect to go in and see all the games I used to play when I was a kid you know, the 80s and 90s at the original Chuck E Cheese. But I do get why they're doing that. I think the Fun Spot Arcade brand is just terrible, so I think it's good to know that they're phasing that brand out. And then Urban Fun to me just seems like it is Sega amusement I know it's not Sega, it's SAI, but Sega Amusement's attempt at doing like a Tato Station. I don't know if this is what they're trying to do is like they've got this potentially excess inventory or whatever, or they're just trying to go and operate their own brands. I don't know where they're trying to go with this, but it seems it smells a little bit like a Tato Station scenario.
Speaker 2:Very much so, very much so. It is a leverage for SAI to have a representation out-of-home entertainment brand, and I think this is the first steps towards achieving that. You know what we see with our friends at Gravity, with their mixed bag of entertainment venues. Others will be following, as we saw with the Gravity Arcade facility. It bears a number of similarities with what the Urban Fun venue has Surprise, surprise, both developed by Funbox.
Speaker 2:What goes forwards now is is our market capable of sustaining multiple, what I would call next generation arcades? Is that what our audience wants? Will these be able to be more than just warehouses of games or will they be able to be seen as dedicated entertainment venues? I think they will need to have an F&B component to be able to achieve that, and they will also need to have a narrative. What I mean by a narrative is that they will need to have a play experience which will be constantly updated to allow the audience to come back again and again and be enriched by the experience.
Speaker 2:Both of these brands are going to be under the microscope regarding how well they offer that social entertainment experience. Being located in malls also means that many of them will not have to have their own F&B component, but they will be feeding off of the food courts that already exist within the mall venues. That said, you can't really consume the food within the venues. You have to go off-site to these food courts, and so how much you entice these individuals to come back after they've consumed their food, or to come back a second, third and fourth time, is going to be very important. These brands are going to be under the microscope of success and they're now entering a very crowded market.
Speaker 1:Anyway, that's it.
Speaker 2:I know we're wrapping up, but I just want to entering a very crowded market.
Speaker 1:Anyway, that's it. I know we're wrapping up, but I just want to roll it around in my head here.
Speaker 1:I find it super fascinating that we're seeing a resurgence of the mall arcade and first of all, I just kind of get excited about the fact that I might be able to go and grab an Orange Julius and then go and play some arcade games again, like I did when I was a kid. Granted, I'm not using nickels or quarters anymore, but I think it's super interesting. I do wonder one I think it's speaking a little bit to the resurgence we're seeing in just mall attendance in general by the younger, gen Z generation. So the ones who are going out looking for that experience, you know millennial parents bringing their, dropping off their Gen Z kids, which I've done now multiple times with my daughter and her friends. They literally go to the mall at least once a week, twice a week, to just go hang out.
Speaker 1:And we saw that fade away for two decades, which is why we saw the mallpocalypses happen over, you know, as soon as the slow triple.
Speaker 1:And so we saw, you know, the big box stores, the Sears and the Dillard's, closing, which then drove closures across the rest of the mall landscape for all the smaller retail operators.
Speaker 1:And so we saw okay, we're going to drop a big round ones.
Speaker 1:Dave and Buster's made events as anchors for these large malls, or even the Scene 75s if you want to talk about smaller brands as anchors into these malls to then try to bring this retail back in and it's almost as if we've seen that begin to work, and then have these retailers that are more boutique retailers coming in or boutique F&B and snacks and other interesting retail components coming back into the malls to the point where now they're feeling like they need to add in some smaller entertainment components crane outlets, gashapon outlets, et cetera into these malls.
Speaker 1:And I do wonder if a round one that used to be the main driver of traffic is going to struggle in a scenario where the majority of the traffic is actually being spread throughout the rest of the retail components of the mall and I can go and I can play a truck's arcade while I'm also doing everything else and I never get to the round one in the end because I'm there for all the rest of retail now, and so the tail that once wagged the dog, the dog, is now potentially back in control of its tail, and so, anyway, we'll have to see how it all plays out.
Speaker 2:No, no, no, You've hit the nail on the head. I was reading a report about the mall market and it was actually saying that the mall is back. But, to be blunt, the mall never went away. It was just that certain mall operators didn't invest and reinvent themselves, and that's what allowed the factory malls to take off and the newer style of malls. And the same thing can be seen about the department stores. Many of the department stores never reinvented themselves when the online revolution took place. The ones that did survive, the ones that didn't, fell by the wayside.
Speaker 2:And now we're going to see exactly the same thing happening to the large mixed-use leisure entertainers. Dave and Buster's, the round ones of this sector, the know the main events, are all going to have to reinvent themselves because their competition has arrived, and many of the you know, dave and Buster's never really came up with a concept to defend themselves from a competition, because there was never competition. They just took it for granted that they were the alpha male in the space of entertainment. But now, with competitive, socializing and social entertainment venues and possibly the smaller boutique arcade venues, it could be the death by a thousand cuts.
Speaker 2:Wouldn't be surprised if more mall operators now look at not just populating their big department store empty spaces with a large chain entertainment or entertainment venue, but they will be looking at their smaller units as maybe having a shotgun approach of leisure entertainment they may put in. I think the best example we can go for is what we saw when we were walking around the O2 Center, where there wasn't just one big beast entertainment experience there, but there was a Hollywood Bowl and then there was an Activate, and then there was a trampoline experience and an iFly and all of that. So you offer a multitude of experiences for the footfall that you have in your venue and that makes that market a much more competitive environment and much more dangerous for operators.
Speaker 1:Yes, yes, completely agree, and it comes back down to that multi-attraction. But if you're thinking about it from the mall operator standpoint, they want multiple attractions to drive the visitation as well, and so I think that is going to begin to chip away and eat at the larger bookend venues that are going into these spaces, especially if they don't have non-compete components in their lease around certain types of experiences and attractions in their lease around certain types of experiences and attractions.
Speaker 2:But most of those non-compete clauses got torn up long ago when they renegotiated their their leases under the pressures of post COVID.
Speaker 1:Yeah, absolutely Well. All right, that was a an excellent sound off for number 64. And, kevin, it was great having you on here. It was great doing this live from Dubai chaos carts. So, as always, everybody, stay tuned and keep kicking ass.
Speaker 2:Have a good one.
