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LBX Collective
The LBX Collective aims to inform and educate, create opportunities to connect with industry peers, and to spur collaboration, discourse, and cross-pollination of ideas in the location-based entertainment and experience industry.
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LBX Collective
The LBX Show #24 - A Tariff Deep Dive, Genda M&A, and more!
Sponsored by Intercard!
We dive into the seismic shifts happening in the location-based entertainment industry as tariffs create uncertainty and major acquisitions reshape the arcade and amusement landscape.
• Examination of a poorly designed mini-golf addition to a bowling alley, highlighting the importance of guest flow and experience design
• Kevin Williams details the latest openings in active entertainment facilities, including new SkyZone, Launch, and AirHop locations
• Chuck DeMonte outlines the six essential qualities to look for in a marketing agency, emphasizing industry experience and communication
• Adam Pratt breaks down Genda's acquisition of Player One Amusement Group and their strategy to manufacture in the US to avoid tariffs
• Deep dive into how the recent tariff implementation (up to 145% on Chinese goods) is affecting arcade operators and redemption prizes
• Justin Michaels from Intercard compares digital self-serve redemption machines to traditional prize counters, noting the merchandising limitations of automated systems
If you'd like to ask a question on a future episode, reach out to us through our social channels or website.
Well, welcome everybody to the LBX show for April 13th. This is number 24. I'm your host, brandon Wiley, and look, we have a great show. It's a packed show ready for you today.
Speaker 2:So we're going to start with the latest openings and closings with Kevin Williams and Open and Shut, and myself will also be joining. We'll have some commentary on some of the top 10 openings that we really liked. We'll have some commentary on some of the top 10 openings that we really liked. And then we'll have promo pro tips with Chuck DeMonte about the top six things that you should expect and look for in a marketing firm. And then we're going to hear from Adam Pratt on Arcane Quarter. He's actually going to break down the latest news about Genda and Player One. He'll also cover some other arcade news as well, but that's going to be the big topic. And then Kevin and I jam out on a special guest gab segment where we discuss the impact of tariffs on our industry and then believe it or not finally we actually wrap with a crowd question about self-serve redemption from our special guest, justin Michaels from.
Speaker 2:Intercard so all right, with that being said. So I recently came across I'm not going to talk about the venue, I'm going to see the venue's name or where it's located but I recently came across a bowling alley that decided that they wanted to add in some mini golf, and so, basically, the reason they landed on this is that they believe that bowling is obviously a great community activity it involves all age brackets and so he wanted to add something in, though, about something else besides his bowling, and so what he did is he went and Googled what goes well with bowling, and the number one thing that he came across was mini golf, and so the owner said they really wanted to create a facility that multiple groups of people can use on a regular basis throughout the entire year. You know, I'm just like curious, in general, what articles he would have come across. I've rarely actually see bowling mixed with mini golf. Frankly, typically, you'll see, you know, bowling in arcades, or bowling and laser tag or something else. I mean, yes, mini golf can be a part of that, but that's not typically like the number one thing that goes with bowling, other than the fact that, look, it is accessible and it is something that all ages can play typically, and so that's that's great.
Speaker 2:But this is the the, the instantiation of the mini golf that they did. Actually, I'll make it a little bit bigger here, so it looks like it was just in an extra room. It's. It's interesting. I don't know how a lot of groups are going to be in there all at once. It looks like there's a single door. It looks like this was put into like a church basement, classroom or something like that, and I think just the reason I'm showing this is not to just pick at it or make fun. I mean, that's the reason why I'm not actually giving the name of the facility.
Speaker 2:But a couple of things I just wanted to call out here. First of all, I do really like the idea of the bowling balls actually as the obstructions for the mini golf or for the actual golf ball. I thought that was actually really creative and I think that they maybe could have done that on a couple of holes or like every other few holes, and then try to add in a few other things instead of just all bowling balls as the main obstructions for the nine hole course. But but look, you know what they did? A great job, I mean. It looks clean, it looks nice and you know, the problem is like there's no place to put drinks, like these are all the standard things that you find in many, many golf places.
Speaker 2:You want a place for you to put drinks it doesn't have to be an alcoholic drink, it could be literally a soda but that people are going to put them on the floor and then they're going to kick them and knock them over and kids are going to be running around. And in a tight place like this, in a tight space like where's everybody queuing and standing and like, as you're moving through, are you going to let a couple of groups in at once? Like this is going to be a major problem with with guest flow. And my guess is they probably didn't put like 20 people in this room all playing mini golf, like four. You know five groups of four. They probably didn't run into that. And so, again, this is one of the things you want to test is what does your guest flow look like and are people going to be bumping into each other and running into each other? And then, just in general, I probably would have just tried to do some like colored lighting, maybe, do some paints or hang some things on the walls Like it's just stale white, and maybe they're going to do that down the line.
Speaker 2:But anyway, I just I wanted to bring this up because this is something that when you're looking to add additions, you want to look at things holistically, not just say, okay, we're going to put in mini golf and we have space, we have enough space to put in nine holes. Let's cram nine fucking holes in one room instead of actually thinking about what that flow looked like. Maybe they could have done six holes or seven holes. It still would have been a great experience. Maybe charge a dollar less for the experience instead of nine holes. But now you've got a better guest experience because you have room for people to move around and not bump into each other and trip over the balls that are all over the place. So, anyway, I wanted to bring this up just as something that I think is a good learning exercise for us to see sometimes. It's always good to see things that are done really well, and it's also time to see things where we could make improvements. So I wanted to bring that up. All right, it seems to be a mini golf theme as well today, so we have the mini masters. So I really liked this idea and this mini masters concept is actually done in it's in North.
Speaker 2:It's a place called Market Street in Linfield, in North Shore, and golf enthusiasts of all ages can basically play their own version of the mini Masters Tournament. Obviously, the Masters Tournament is coming up, and so they hold it like just a pop-up mini golf course. It is not like in a normal place. It's part of their putt and play experience at the Market Street in Linfield. Then do it during the April vacation week, so like their version of spring break. And so the first week is in honor of the masters tournament and it's what they would call a uh, one of a kind mini golf experience.
Speaker 2:There's nine holes, it has an iconic route, one uh orange dinosaur and a hole with the JP uh licks theme. I don't know who JP licks is, maybe he's a golfer, I don't watch golf, but anyway so. But what is cool is that they're doing this during, you know, obviously, a week. It goes from noon to 4 pm for the Little Tykes and it's April 21st to the 27th and the price is $7 to play the nine holes, but all proceeds go to the Boys and Girls Club of Metro North. And so you know, again, it's a charity thing, they're not trying to make money from it and it's obviously just a little pop-up thing, but they've done a good job tying it together with the masters. And so if you've got a mini golf course, one of the things you could do is have like a little mini masters tournament that you run. They actually have an adults only 21 and up for a fun night out and they have it. They call them mini masters after dark. There's a beer garden that they set up from a local brewery, from notch brewing, and they're doing that on April 24th from five to eight. So great time to come out. So again, all things that could be done if you've got a mini golf course, or even if you've got some space and you want to do a pop-up mini golf course just to drive that repeat visitation, right, this is what you're trying to do got that mini golf course to run different events and things, and you might as well tie into the Masters tournament and do a little mini Masters thing. So anyway, I just thought that was worth mentioning.
Speaker 2:That wraps up our News. You Should Know Coming up. Next we have Open and Shut with Kevin Williams. We'll see you on the other side. 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%. Inter card is so proud to be serving the amusement industry and if you aren't already part of the global family of customers, they hope you will become one soon hey, uh, big hello and uh open and shut to go into.
Speaker 5:How are you, brennan?
Speaker 2:I'm doing well. Yeah, ready to roll here.
Speaker 5:Well we got a lot of them about 21, 22, 23, 24 of these lovely openings. Of course we picked the best for discussion, not saying they are the ultimate best, but obviously they carry a point for us. But please argue with us in the comments if you think we should be dealing with any of the other ones and pause the video as I zoom through about the ones I don't mention. But anyway, jumping straight in, and we're seeing a major investment in what I call active entertainment facilities opening now. Now, of course, this is the build-up towards Easter and obviously these venues have targeted themselves to be open. I'm not sure if I have statistical data that tells me if Easter is a good time for active entertainment or is it just the period before the holidays, allowing them to get their facilities up and running and rolling. But our friends at Sky Zone threw up another venue in Texas. They have over 300 facilities dotted around the place. It is just an amazing operation now, especially with the news that they're going to be opening another 40 venues this year planned.
Speaker 2:Yeah, this is insane. These guys can't stop their growth and I mean they do at least continue to evolve a little bit their attraction mix as they open up new locations and some of the older franchisees are trying to revive their older. Skyzone has been around for nearly 20 years more or less, to help to define the trampoline park and adventure park industry. But yeah, these guys are on a just complete tear to just keep growing.
Speaker 5:It will be interesting to see at what point they're going to have to revisit their venues and upgrade them for the changes that have happened in active entertainment. Another major player, though not to the same number of facilities Launch thrown open their new Joy-Z site. I seem to be saying Joy-Z a lot recently. Regarding new venue openings, the catchment area there must be very choice. Interesting thing about launches that they are kind of an example of the modernization of the active entertainment environment where they're adding a lot more amusement, uh and ninja courses and virtual reality to their mix, rather than just being a pure active entertainment facility within their 26 chains.
Speaker 2:Yeah, this is another group that is really that we've seen begin to expand very quickly and they sat docile for quite some time and I don't know if you know what changed inside internally. I mean, they are a franchise right, so they're not opening these as corporate locations.
Speaker 5:They're all franchises. They did go through a management change and they also went through a branding change and they've just announced that they have another eight facilities that they're proposing to open this year Another one, airhop. The reason why I'm focusing on these active entertainment facilities is because of the crossover into what I would say is a more social engagement kind of experience and a more entertainment amusement. They're part of a larger operation that has about 68 different types of entertainment facility. The idea that you can roll these facilities out like cookie cutters is one thing, but trying to retain the audience, to build a loyal repeat visitation, is one of those things that stupefies me really about how it can be achieved effectively.
Speaker 2:Yeah, especially when you have what I thought was Activion but it's actually Activon. Activon, yeah, but they have multiple brands, like as you mentioned, but they're all in the trampoline park, adventure park space and the fact that they haven't created some sort of consistent, cohesive brand across them all is a bit of a head scratcher. They have six brands and some of those brands have just one park. So clearly they're going and acquiring multiple brands and bringing them together, but I think you'd want to at some point, create some cohesion in brands so to streamline your operations.
Speaker 5:This is true amongst all of the large operations that some level of cohesion and narrative is going to be needed if they're going to survive, or eaten piecemeal if they don't, or eaten piecemeal if they don't. Inflator Nation love the name. Again, another UK operation opening up in Hull, part of an 11-facility chain, and this one is also pivoting away from just the trampoline and the inflatables to also include entertainment. And then we have, interestingly, a ukrainian new opening, um, quite a large site for the area, aiming not just at the trampolines but also has the kid mazes and the ninja parks and console gaming. Those are console booths where they can play consumer games with some amusement. I am not sure if this is going to be the beginning of a chain for their operation, but we wish them a lot of luck in a very troubled location at the moment.
Speaker 2:Yeah, and I'm going to share my screen real quick, because this one was fascinating to me and you can't see Super Bowl. Maybe we can zoom in here, but some pretty heavy theming and styling in their venue.
Speaker 2:So here's like a little mini go-kart space. But yeah, I mean beyond just some trampolines and some carousels and everything else, they've done quite a bit to really draw in the theme, clearly still targeting the young kids. Like all the pictures have young kids, even in an arcade. They've got these mascots that are pretty unique as well. So, anyway, this is definitely taking it to the next level from an adventure park and action. You know active play environment, but you know it is good to see that they're at least really staying connected to the theme, even to the flowers up on the top for their lighting.
Speaker 5:It isn't just a black ceiling in hopes no one's looking up. No, and I think you touched the nail on the head. You know it is a themed environment, active entertainment and venture experience that they're going for, and venture experience that they're going for Again. I'm beginning to wonder the investment that's gone into this if they're not looking at a wider rollout across the country, if not wider aspects of Central Europe Moving on, and a surprise one here.
Speaker 5:The gamification and the technology is very low scale here, but bingo has been on my card pardon the pun for some time as being one of those social entertainment activities that is due to be brought into the competitive socializing mix. There are a couple of attempts that have been made over the years, but the most successful so far is bongo's bingo and the latest one is opening up in Derby in the UK. It's part of a 50 facility chain in the UK as well as the US. There are some examples of this in the US. It's more a live performance experience with a bingo game attached to it, and it's a lot more about the cocktails, the social engagement and the live stage performances than it is about the game of bingo. But it is an important exemplar, or exemplar of, uh, how bingo can be brought into, uh, this uh period of social amazement. Yeah, gotta keep the clean photos. Uh, it's, it looks like it gets a bit raucous, so yeah, it does.
Speaker 2:Definitely looks like it gets raucous. Yeah, this is. Uh, this is pretty incredible for those of you who are listening. We're watching a video just on their main website, bongosbingocouk. It's just their little bumper, their trailer. But yeah, this is different than I was recently just driving past a location. It's a restaurant, slash bar, and they have a bingo night, but they were very clear to say not your father's bingo. So my guess is they're trying to make it a little bit like this, but but no, this is a production.
Speaker 5:This is pretty insane for some bingo one of the competitive socializing companies out there has been experimenting with their interpretation of a bingo experience. But I think that this kind of raw curse, mamma mia dinner kind of experience is the only way to go for the market's needs anyway. Moving on and talking about cinetainment, only a couple of days since, uh, cinecom finished a lot of developments, uh, on the cinecom show floor, um, developments that have also had reverberations, which we'll be talking about, I'm sure, in the sound off. But one of the companies or cinema chains that is really ramping up their investments in the sector is roadhouse cinema and they've added a new entertainment component to complement the local cinema that they have there. Roadies is the name of this particular one. Their other venue goes under a different name, so they haven't really conjoined a dedicated brand. I think they've just come up with a formula that they feel comfortable with.
Speaker 5:But this has a bit of everything within the 30,000 square with. But this has a bit of everything within the 30 000 square. You know, the axe throwing the 14 lanes of uh. It looks string bowling to me when I was looking at the video crazy darts, interactive dart systems, uh. But they also have the live music which seems to be an aspect here at, along with the fmb and some amusement, and again we're seeing're seeing at this Arizona site is taking over a previous Bath Beyond department store. So, following on from some of the aspects that we were touching on previously, yeah, so it does look like.
Speaker 2:By the way, roadies is using the Brunswick Spark immersive bowling. Oh, I'm sorry. So I mean it may be obviously string pin, but it's going to be full lanes, right, it's not going to be the duck pin bowling. I mean it may be. I mean it may be obviously string, string pin, but it's it's going to be full lanes, right, it's not going to be the duck pin bowling no, it's not going to be done.
Speaker 5:It's going to be the social or it's going to be a higher level, but yeah, exactly, system but yeah, I mean, this is, this is great to see.
Speaker 2:They actually have the laser tron uh axe throwing as well, so it's the immersive axe throwing. This is good to see. I know the owners behind Roadhouse Cinemas. They've been talking about building or doing some adding some entertainment to their cinemas as well, and so it's good to see that this is actually happening. That they have to be right next door to a Bed Bath Beyond that went out. Some of their other locations don't have as convenient location that they could just go and build out separately. So I do like to play on words. You know Roadhouse Cinemas with roadies. You know roadies obviously being a drink that you can take with you from a bar, you know you can take a roadie to go. So you know I like what they've done here.
Speaker 5:Cinema Taman Moving on and interesting. In the Philadelphia area we're seeing the franchise attack of the franchises and this is something that you're going to be hearing me a lot talk about in future Opens and Shuts where the main corporation has started the ball rolling, but it is now the franchisees that are taking territories, they're taking specific areas and they're populating them with multiple entertainment offerings. So we have here in one part of the building, a sandbox VR setup. But our friends at LOL Entertainment have also acquired a time mission franchise deal, so they will be opening a mission room or escape room kind of experience within this area. This hub let's go with hub. That's part of the Philadelphia's reinvigoration. They're putting a lot of investment into urban renewal in that particular area and the attracted audience is hoping to be sucked into these two venues. No word yet if the Sandbox VR venue will have a robot.
Speaker 2:Yeah, this is you know. Congrats to the guys over at LL Entertainment, friends of mine as well. So apparently you know some of my friends have been busy this week. But, opening of Time Mission. This is one of their first locations and they're going to be opening many across the US here.
Speaker 5:The Time, mission experience isn't particular to the US. In Germany we have the opening of a 2,000 square meter facility, which is an interesting one. It is the Mission Room Experience, but it also has a 4D theater set up, vr attractions, some amusement and refreshments. It's based on the Kimber Jumper board game. I'm not familiar with it on the Kimber Jumper board game. I'm not familiar with it. I had to do some research in looking into this facility.
Speaker 5:But the KJ, what it stands for, is an adventure environment with entertainment as well as the mission rooms, and again, this looks to be a concept which is about to be rolled out. I'm not sure how much the board game owners are steering this or if this is just a brand utilizing the property and, again, escape rooming. An aspect of the business is that a lot of escape rooms are reinventing themselves, redeveloping themselves. After a period of expansion in the market, they're now trying to keep their audience, and some of those are pivoting towards adding secondary entertainment, as we've talked about before, and Escape Labs in Paris decided to parachute in a Delusions VR free roam arena setup there, so they have both the Escape game VR as well as some other VR game experiences alongside their escape rooms.
Speaker 2:Yeah, the Escape game VR. I've always struggled with VR. I've always struggled with. I like the, obviously, some of the free roam VR, but the escape room VR is something that I've struggled with. As far as an out-of-home thing. I feel like that's something you can do very much in-home. But anyway, this one. I've always struggled with this concept and wonder how long it can really drive repeat visitation.
Speaker 5:I've seen RVLA, who are one of those companies that has quite a library of VR escape games. The benefits from these are that they are multiplayer experiences where, if you do the escape gaming on the home systems, you're all on your lonesome. Here you have the social interaction, which adds a different level of engagement. I've heard good things from revenue generation using the VR escape gain experiences. They are one of the long stays of the sector but, as you say, how long they stay strong is very dependent on their operation. And then, finally, another mission room escape game experience, this one opening up in City Walk in Los Angeles, part of the Escapology chain Again, another large chain with over 470 facilities out there. That's a lot of escape games.
Speaker 5:I know they've acquired a number and have pivoted towards them. Escapology is also renowned for using IP in some of their escape rooms and going for as much automation as possible to create a seamless turnaround. But the CityWalk location is an interesting one for me. I used to live near there and have seen a lot of entertainment facilities come and go through CityWalk. So this is the latest, shall we say, social entertainment addition to the area, an area that is under evaluation for expansion by Universal as they look towards their next phase, following the work they've been doing in Orlando of the Epic Universe.
Speaker 5:And then we go to not shuts but layoffs, and quite an important one. We're beginning to see the first of the large entertainment chains you know undertaking quite considerable layoffs of their core management. We've already talked about in a sound off about. They've seen quite considerable departures from their top management. Well, the uh magic makers, merlin's equivalent to disney imagineers, uh, they in all uh in florida uh, have seen uh 31 of their team removed, just as they're now pivoting towards Coming up with an argument against epic universe. So it seems that it's a restructuring of the operation Towards how they're going to come up with the blue sky to defend themselves Against what is turning out to be quite an impressive New series of gates that Epic Universe has added. Well, that is it for me. Anything that I missed or you want to point out, brendan?
Speaker 2:No, I was just surprised that we didn't have any. I wasn't ready for no shuts. That kind of threw me off there. It kind of threw me off there.
Speaker 5:It is a very big surprise. I couldn't find any on our radar. It doesn't mean that it didn't happen. It just means that the companies in question have managed to hide it well.
Speaker 2:Yeah, yeah, that's a good point, fair point, all right. Yeah, no everything else is great.
Speaker 5:Well, I'd like to say to everyone have a good one and we'll see you in the next OpenShark.
Speaker 2:All right, well, coming up next, we've got Promo Pro Tips with Chuck DeMonte. Let's hear it from Chuck.
Speaker 1:Hello and welcome to Promo Pro Tips with Chuck DeMonte. That is me, and today I want to discuss as a marketing agency for location-based entertainment brands. I want to discuss the top six things you should be looking at and considering when potentially going to work with a marketing agency. Okay, so, first and foremost, I think it's important to have experience in location-based entertainment. So we niched down about two years ago to only serve location-based entertainment brands, and that does give us a leg up. Okay, we know the pain points of location-based entertainment brands. We know what strategies have worked the best. We know what you know. We continue to be able to optimize those strategies.
Speaker 1:Now, do you need somebody that only does you know location-based entertainment brands? Maybe not right, we could argue that maybe either way, uh, but they should have some experience in there. There is really important, and I give a good uh example of this. When we were working for different uh companies, we had a? Uh, we had a, a, a a personal injury attorney that we were trying to get leads for, okay, and we were doing Google and our Google ads and our, our, our Google ad team is is really really really good. They know Google ads extremely well. Okay, however, we just we're not producing the results for this. So we found somebody that came in to consult us that only did Google ads for personal injury attorneys. Within a couple of days it changed everything, right, we were getting leads at a good cost and all that. It's like he knew the exact structures to look like to work for this industry. Okay, so that in and of itself is why it's important to know the industry that they're working in.
Speaker 1:Okay, so that's number one. Number two they should have a proven track record. Right, They've worked in previous you know similar locations trampoline parks or, if you're a, you know a bar with an arcade or a go-kart, whatever. It is right. They have experience working with other brands and a proven track record with driving success for them. Okay, get a case study from them, get testimonials, whatever that might be. Contact clients right, get some references right. So proven track record. Number two. Number three they have some sort of method. Okay, there's a rhyme and a reason to what they do and why they do it. Right, they're not going to put out strategies for the sake of doing a strategy or doing email marketing for the sake of doing email marketing. They're doing automations in order for you to get birthday bookings and understand how that attaches to your waivers, right, there's a method to their madness and there's an objective that they're trying to reach. Right, they're not just, like I said, just doing strategies just for the sake of it and just seeing what works. Again, that goes back to sort of the experience thing, right, knowing what works, and they have a method that they use to improve your marketing.
Speaker 1:Four Now, this one's huge. It's crazy to me when I speak to current clients and potentially new clients and their current agency, it's like they barely speak to them, right, or they're not really communicating with them much. So number four is communication. You should be in pretty frequent and often communication with them and what's going on and what are your strategies doing and all that other stuff, right, it's like if you need something or if they need something, right, the communication is big. Well, I don't want we try and make our clients try and have strategies that could work autonomously, meaning I don't need a lot of back and forth with clients, right, I don't, I don't want to have to rely on them for us to do our job. There is a dance, so there is, there is, you know, a partnership that happens there. Ok, it's your business. You know what's going on there. You need to communicate those things to your market agency. They need to communicate things to you and back and forth, right? So communication is is absolutely gigantic, is absolutely gigantic, okay.
Speaker 1:So communication number four, number five reporting. You should know exactly what's going on. What are the results that are driving from your marketing. Okay, if they're just doing social media content for you, are they improving followers? What does you know? Are you getting more impressions, more engagement, right? What does that look like? If they're doing Google ads, how much are you spending? Are you getting conversions? Are you even tracking conversions? What does that look like? Right? Facebook ads, so on and so forth. You should have reporting.
Speaker 1:I like to go over that reporting with clients month in and month out, so they really understand what they're looking at and understand what we're trying to achieve and what the objective is. You know, there are times, for sure, I like to say most of the time we help clients and improve their marketing and get them more revenue, but there are some things there's more to the market, there's more to business success than just marketing. There are times when, yeah, things are not hitting the mark, for multiple reasons, right. But between reporting and communication, we could pinpoint what's going on and maybe what's not succeeding, and change, you know, and try and improve what we're doing, right? Which leads to my final and sixth point optimization. Right. If they are not constantly trying to improve or optimize or picking things out that we're working, that are not working or how to improve strategies, that's a problem. You can't just sort of set marketing strategies and forget them and never change them ever again, right. So optimization is super important, but again, you can't really have optimization without reporting.
Speaker 1:So just a quick recap, the six things experience, working with location entertainment brands really important, proven track record. They've done this before. They could do it for you, having a method, right. They're not just doing marketing just for the sake of doing marketing or making social media posts just for the sake of making social media posts. There's a reason behind why they do that. Number four communication. They're in constant communication with you when needed, right, and you're in communication with them Super important. Number five reporting. How do you know what's going on, how do you know what's working? Okay, and number six using that reporting to optimize. So hopefully that helps you, you know, improve, or you know any agency you're working with or hired agency, and if you want to reach out to us, we're always happy to have a conversation.
Speaker 2:All right, well, all good stuff. Thank you so much for that chuck. Uh, hopefully you guys were able to take away some good points and you know what? Next up we've got arcade corner with adam pratt and we're going to dig into that whole deal. Going on with agenda and player one.
Speaker 3:Greetings. It's Adam for the LBX Collective with ArcadeHeroescom and here at the Arcade Corner. I'm here to get you up to speed on what's going on in the arcade world. Now, of course, as discussed in last week's Arcade Corner, the talk of said world has mostly been about tariffs lately, as I believe I mentioned. I can't remember everything that I said last time, but I'm not one to panic and jump out the window the moment that things look like they'll be tough and at least from when I'm recording this, things were looking up on certain things, at least with the stock market. But of course, as somebody who's owned and operated an arcade for almost 18 years now, I guess I've been somewhat insulated from such fluctuations. As far as I don't own or operate a redemption desk, so I don't have to worry about importing toys and things of that nature, and so I'm just operating off of pure amusement experiences, then it doesn't really affect me. And of course, when it comes to purchasing new equipment, well, I mean that's where it could. Um does depend on what you're getting. And of course, yes, even with certain games that are made in the states, there can be effects from certain parts that they get and whatnot. But I mean. So far I haven't heard of any price jumps, but sometimes things like that can take a while to ripple through the supply chain, have the feeling that used sales could be become more important than perhaps they usually are, just depending on the game and and such like right now, or I've been hearing for a while that guitar hero arcade has been a super hot item, even though that game came out in 2009,. It's more valuable now than ever because everybody wants to play it, because it doesn't exist on consoles anymore. None of the modern consoles have Guitar Hero on them and so in that sense it's become kind of this classic game, but it's not the arcade version. It wouldn't be competing with the home version. But there still are some new games out there and this week there was a trailer for the new Soda Slam, which was seen at a Amusement Expo 2025.
Speaker 3:I'll play this without the sound so you can hear me what I'm saying, because otherwise it'll be a little overpowering. But it's got this kind of jazzy song. But you can find this on the Alan One YouTube channel if you want to hear it, with the fun music and such. But this is just a quick trailer to promote this game, which will begin shipping in June, and this one is being built in the United States in the same state where it is being made, and so I haven't been able to visit that factory with this in it, since, I mean, last time has there been a few months and they weren't working on it yet. But yeah, this one is a U S made game.
Speaker 3:Now, the cans on the sides, those actually come from a fiberglass manufacturer down in Las Vegas. However, alan1 has made clear that there will be a version without cans, and so that was something that I think came up a lot at the Amusement Expo event. But this, of course, will be competing with Baytek's Icy Slush Rush, which that one, as far as I know, that's beginning to ship out now. I could be incorrect about that, but Icy Slush Rush will be gaining a leg up on that, I would suppose. But let's see what else is out there. As far as new announcements goes, um pinball, there's some news on pinball right now. As far as uh, today, um, or this week, you had stern pinball announcing that they were doing a new vault edition for rush pinball. So if you had missed out on the rush game, then you can grab their vault edition, which will just. I didn't catch all the details on that, but generally speaking, the vault editions are essentially like a pro and just giving those a chance who had missed out on a previous game, the chance to add it to their collection or their game room again. Personally, I would really like them to do a tron legacy one again, but perhaps they're waiting, as there is the new tron movie coming along, had tron aries, which I guess I don't know. Maybe that would be worth watching. Here is, I mean, tron is what the original tron got me into this industry.
Speaker 3:But when tron legacy came out in 2011, 2012, somewhere around there, uh, they disney did a big, big collaboration with arcades. They even created this flynn's arcade replica at the san diego comic-con and they came up with a space paranoids game. Later on, when they did wreck itIt Ralph, they also did a Fix-It Felix game and created a bunch of working prop games for that. I haven't seen the Space Paranoids game anywhere around, but this time with the Neutron Ares, so far the marketing's pretty muted. They have their D23 event that they did, d23 events that they did, and that's where they did do something there with jeff the actor, jeff bridges, um, but there wasn't anything about arcades talked about then and so far, when the trailer came out, there's no showing whatsoever of any arcades or fl's in that trailer there, which is disappointing to me. And and like I said, when legacy came out there was a month long like two, three months long campaign about arcades and they they had all sorts of cool stuff going on. In this time Nothing. So I don't know, maybe we won't get any arcade action out of Tron Ares, but anyways, hopefully Stern is able to do a Tron Legacy Vault Edition, or maybe they're planning on doing a new Tron Ares pinball, who knows? But also the other big news I mean this hasn't been revealed yet is when I'm recording this. I mean this hasn't been revealed yet is when I'm recording this.
Speaker 3:But Jersey Jack Pinball has officially really announced the Harry Potter Pinball. Now, again, they've only announced that it exists, they've announced pricing on it, but they have not shown what the game looks like yet. There are three versions. Interestingly enough, that does break a little bit from what they've done the past couple or few times, like Toy Story 4 and, I think, godfather and Avatar. They only had two editions and it would start at $12,000. And the other edition, the collector's edition would be $15,000. And I know a few operators that had picked up a Toy Story and said that it was doing well. But to me it's really hard to justify a $12,000 pinball machine, because at $8,000, they're already very hard to justify as the ROI is just crazy on them and they're not always easy to sell. I've been trying to sell a Mandalorian pinball machine and I've not been getting many bites on that so far.
Speaker 3:Um, but the harry potter is coming, so stay tuned to news on that one. It has a still has a pretty big fan base and everything, and so looking forward to seeing what this can do in pinball. The other thing that is going to, or the other thing in the news, is not a product, it's something else that is of pretty good interest, pretty strong interest to our industry, and that would be this news that hit in this week of ginda acquires player one amusement group. Now, if you're watching this, chances are you are familiar with player one amusement group, as they are a distributor as well as an operator based out of Toronto, canada, and they're an conglomerate of six different companies. But, at least from what I've seen and interacted with them before, they've generally just been serving as a distributor, I wasn't aware until this news came along that they actually had been operating a bunch of locations out there. I know that they had been involved with Cineplex Starburst or that Cineplex Starburst still has some sort of share of the company, but I don't know all of the details. I don't really know anybody within Player One Amusement Group or Genda, but if you're not familiar with Genda, that's actually a Japanese company started in 2018 and they've been growing rapidly and in fact, when Sega decided to sell off all of their arcade operations in Japan back in 2021 or so, it was Genda that they sold them to and Genda rebranded the arcades. Now they did close down some of them.
Speaker 3:There was a very big story about this particular Sega arcade that was super famous in Tokyo, that they shut down or rebranded or there was a few things like that. But they've been expanding and if you go to their website, you can actually find that they have a ton of information as to all these acquisitions and they've been acquiring one place after the other, and so they've actually been doing acquisitions here in the States. In North America, pac-man Entertainment is one that they grabbed. They acquired National Entertainment Network, or NEN, and then, prior to that, nen had acquired namco or I think a third of namco usa's locations, and they they've acquired a bunch of other stuff. They've been developing their own games and so now they've acquired player one amusement group. Now I wasn't also aware of this until the story broke this week that Player One was also operating. It says 104 game centers and 2,000 mini locations, or NEN that I was aware of as far as them operating some of the little arcades out there in Walmart. But very interesting that they've made this move into the US market because it not only adds more locations to their repertoire but also the ability to distribute games into the States. Ability to distribute games into the states.
Speaker 3:And the ceo of genda did elaborate on axe as to what their strategy is here and, according to the translation from axe, he said in response to the current us tariff issue first of all, we believe the current environment is a great tailwind for genda, which has an m&a, has m&a as its growth strategy. As the valuations of potential M&A targets fall, we believe that we'll have more and more good opportunities in the future. And so it talks about some impacts on the tariffs and such. But the most interesting part to me is the end here, where it mentions that, however, we're not going to do nothing and we and will implement a number of measures to reduce the amount of the negative impact, such as producing game consoles in the us using factory functions of our us group company, nen, and procuring from countries other than china's or other than china where tariffs are relatively low.
Speaker 3:Now, I was not aware of any and having any sort of manufacturing capacity, but it's also possible that since they acquired them last year, that they were already starting to develop those capacities. Again, I had mentioned that they had already built their own games in Japan, as Genda had, but what is it that they're going to be building here in the US? I'm not 100% sure. Now, yenda, one of the big things that they do with their arcades in Japan are crane machines. I wouldn't be surprised that, since a lot of crane machines come out of China, and that's what they mean when they say producing game consoles, they don't mean, like Nintendo Switches or anything like that. They're talking about other things such as these arcade machines, particularly cranes, I would think, but also being a distributor, that also could mean that they could be bringing more Japanese games into the US and competing directly with Round 1 USA.
Speaker 3:As far as I know, genda has a pretty good relationship with Konami, and so Konami was making moves at IAPA 2024 looking for distribution networks, and so perhaps that's one of those things that is going to come to fruition, and so perhaps we could see DDR getting some official acknowledgement and sales here in the States again as opposed to imports. But that's the real big news of the week. Very, very interesting to see what, or will be interesting to see what comes out of that. Thanks for watching. We'll catch you on the next Arcade Corner.
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Speaker 2:All right. Well, adam says Genda, I say Genda. Adam is probably right, actually. So you know, this is like maybe the GIF and the GIF. You know the GIFI, the GIF, the GIF, the GIF whole thing, and I've always been a GIF guy. I know that's very been controversial. I know I think even the creator of GIF said that it's GIFs. So I but I've always said GIF. But you know what? Look, I'm going to say Genda from now on, because that's what Adam says, even though I said Genda earlier in the show. But we're going to go with Genda going forward. So thanks, adam, for that breakdown of everything going on right now in the arcade world.
Speaker 2:Next up, we got Guest Gab with Kevin Williams, who you know. But we're going to actually dig in and talk a little bit about tariffs and the impact it's having on this industry. So let's dig in, all right? Well, welcome, kevin. We're doing a little guest gab, even though you're not a guest here very often, but it is a standalone topic. So I figured we'd do a little segment on our favorite T word.
Speaker 5:Yes, tariffs. We find ourselves in an interesting position as an industry where, like many other industries, we're evaluating how much the current confusion in tariffs is going to impact us. In tariffs is going to impact us. I've created these slides which hopefully touch upon the six or seven key areas that we need to be mindful of as an industry.
Speaker 5:It is a shame that this is such a fast moving subject that things you know, things change per hour, let alone per day. When this slide deck was created, we were beginning the process of seeing it was the Wednesday, when the Independence Day had been written and we were feeling the effects only for under 24 hours to pass, and then we see a complete pivot and a change in that. But the fundamentals are still there. We are seeing a considerable tariff placed upon China, canada and Mexico, as well as Europe, with other countries' tariffs now in limbo for 90 days towards renegotiation and possible change. But we have seen the impact on the markets and, no matter which way you cut it, the confusion that this has caused has wiped off billions from the markets and will result, no matter what happens next, in impacts.
Speaker 2:Yeah, it is not so much even the tariffs themselves, but the way that they have been implemented and rolled out and pulled back. It completely removes the ability of any business to do any sort of meaningful planning whatsoever because they don't know what's coming around the corner, literally within hours of the next day, you know, or hours of the same day. They just do not know what is coming down the line and this has been one of the biggest damaging impacts to just one of you know businesses being able to plan, let alone to, obviously, the stock market, etc.
Speaker 5:Business is not confusion, and it is not 3D chess to keep people wrong footed, especially the money markets and, as we saw with the crashing of the bonds, the US bond market. It is very dangerous to do those type of things. Firing from the hip and using social media to make policy decisions for the global market can result in chaos and confusion. But from an amusement and theme park and entertainment industry point of view, we have seen companies and operations start to pivot towards embracing the tariff landscape which we inherit. The Made in America sticker has started to appear on certain products and on certain websites and certain sweetheart deals are now being offered by distributors in certain territories. Here we have round one. Interesting that it's round one Player one. Sorry, player one, I always do round one, I'm sorry that film and book is dented into my brain.
Speaker 5:The Player One operation themselves have experienced the tariff environment by a merger and acquisition with Agenda, but we will talk about that in greater detail in the coming sound off.
Speaker 5:But the point I wanted to make here is that they are promoting that for their Canadian customers. You know they have products in their warehouse that are tariff free because they have been populating their warehouse long before the new tariff taxation, as it were, was applied to them. That is also impacting the release and distribution of products. Certain products in the entertainment sector that were scheduled to be imported or exported to certain territories now are under evaluation and I've already seen in the consumer sector certain companies saying that certain products that they've been showing at toy shows or video game shows that they had intended to launch onto the market, the US market now looked at again because they have been rendered as uneconomic. The price that they would have to sell the product with the additions of the tariffs, no matter which variant they go with, would put them out of a price point that they feel that their customer base would want to purchase.
Speaker 2:Yeah, and PlayerOne isn't the only distributor to send out marketing information about the inventory that they have on hand. That is quote unquote, tariff free. All this means is this is they have big warehouses and now they're using this as a way to, uh, to basically clear out their warehouses. Um, it's a. Um, I mean, it's a, it's a. They have to do something right, because they can't bring in new stuff, but at least not not economically. But it also. I would caution an operator from going and buying you know, either buying or deploying a bunch of stuff just because they want to get it, because maybe they can get it on the cheap, but it's five years old, seven years old, and it's not one of the new machines as well, with some of the new IP, et cetera.
Speaker 5:There may be a reason why that particular product has been sitting at the back of the warehouse for the last five years, unsold. Yes, talking about the back of the warehouse. Once you've cleared the warehouse of your stock, you then need to repopulate, and so all of the products that are on the sea right now are going to be X tariff inclusions, but all of the new products that are going to be shipped going forward from this point will now have the new levels of tariff At the same time. That includes the spare parts for the existing products, as well as the services and supply and support that those products are going to need. And finally, the merch, the prizes, from the key chain to the fluffy toy. All of these will be impacted and, as we know, the majority of these are winging their way from China or from Asia. That 104% tariff addition is going to be eye-watering to the price of the products that we're putting into our facilities.
Speaker 2:Yeah, well, it's 125% now.
Speaker 5:Yes, of course.
Speaker 2:Which is unbelievable.
Speaker 5:And it's going to change again and again and again. Sadly, it looks that we have started a trade war with China and it's going to take level heads to try and de-escalate this where it doesn't get totally out of control and it makes it totally uneconomic to utilize products from Asia, and we as an industry are quite dependent on Asia. I have Wallap up there. They are a major manufacturer of amusement products in their own right, in their home territories, but they also make machines for and the list goes on Betson, raw, thrills, play Mechanics, sega Bandai, adrenaline and Amiro, and the list goes on and on. They are a major manufacturer of amusement products that are shipped from China to the North American market as well as the European market. How that can be rectified with a 120% tariff on top will be an interesting argument and one we are going to be hearing the results of very soon. At the same time, we have to be thinking about other manufacturers out there Ace Amusement, fantastic new developer of redemption and amusement pieces, who are distributed by the likes of UDC and Amusement Source and ASI, and they have sold. You know, right now the deal show in Dubai is taking place and a large number of Ace amusement products are there and I'm sure they're being sold avidly. All of this now will be impacted directly or indirectly by the TAF. The last company there that I've got if you zoom in you'll actually see it's Jenda. That's their head offices in Japan, and Japan has been hit also with tariffs. But it's interesting from Gender's point of view that they have been proactive regarding their positioning. They have now pivoted towards looking to manufacture product in the US. Gender hasn't been shipping out a lot of original amusement pieces lately. They have quite a large operation, but recently they acquired NEN National Network and they've just taken ownership. Well, the deal will be finalized in June, but it was announced this week that they've taken on Player One and that will give them access to the Canadian manufacturing and distribution as well as the North American operation, and the NEN side will give them access to the North American operation and the NEN side will give them access to the North American or the American warehousing and manufacturing capability. So I'm looking forward to seeing how gender leverages that new position in this current climate.
Speaker 5:Then we go really to the impacts on the markets. We've seen, as some people were saying on the BBC News, it's been like a roller coaster, one you wouldn't want to ride on because it would make you very sick. Incredible drops and incredible rises. And even with the announcement of the pivot to the 90-day stay of execution on some of these tariffs for some of these operations, the markets still seem to be fluctuating and trying to define themselves. That has an impact on the share market. I've already commented on the impact that it has on the bond market and, more importantly, it has an impact on investment, and we've seen the impact on investment that this has caused by Chuck E Cheese, who is trying to raise, I think, about $600 million for redevelopment and franchise build-out and growth of their business, finding it difficult to find investors to actually purchase the bonds that they were raising towards supporting this effort, and so for a lot of operations that have projects that were looking for investment moving forward, the conditions that we find ourselves in are going to be less advantageous towards that investment.
Speaker 2:Yeah, and it's not just investment by investment firms into attraction manufacturers or experiences like Chuck E Cheese. While it may be impacting some stock portfolios positively or negatively up and down and there's that roller coaster where it really is impacting is in consumer confidence and consumers just sitting out and saying, well, maybe I'm not going to go take my kid to Chuck E Cheese this week, we're just going to make a frozen pizza at home, right, or something like that, instead of going and doing the things that we want, because they're just going to wait. The same reason why businesses are just going to wait to place their inventory orders for Christmas or for wherever they need to they're going to just wait because of the volatility. And when you have too many people just waiting and spending, where do you end up?
Speaker 5:That wait and see can be the death knell for operations because you know, we expect our audiences to come, we expect a level of engagement and investment and support and if people are sitting on their hands on their couches, huddled around their TVs, watching the Dow Jones, then that is very bad. The phrase staycation I think we'll be seeing again where people, rather than taking that holiday, don't feel comfortable enough to spend that type of money, maybe traveling abroad so they will have their entertainment closer to home. That is a benefit for our industry but can have a knock-on indirectly. We're already seeing the politics of this being written in the Canadian market, where the Canadian audience who usually come to Florida and to other vacationing holiday areas of America have decided against it and we're hearing from some hoteliers in the Orlando area of the cancellation of expected visitors have dropped quite considerably. So that is a tertiary impact on top of the trade war, on top of the stock and impacted prices that we're going to see, and all of those impacted prices will affect the stuff that we can buy but also will impact our staff, because our staff will be exposed to these problems as well as our business.
Speaker 5:And that kind of leads us to the R word. I don't want to get involved in the speculation about whether we're going to be entering a recession. I'm trying to be bullish about this and feel that the last minute pivot away from the precipice may be enough to force the saner minds to try and pull the economic conditions away from that, but I do expect that we are going to be in at least a stagnation spiral for some time, and I do feel that it is up to all of us in the entertainment sector to make sure that the products that we're offering our guests is of a very high level of excellence, to ensure that even in troubled times we're seen as a safe environment and a welcoming environment to be involved with.
Speaker 2:Yeah, yeah, I definitely am also going to avoid the recession, given the fact that, well, I'm not an economist and I think there are people who are saying we're certainly pointing in that direction, but things can turn around, as we've already seen just the last few days. But I will say, to the point that you had about the staycations, I actually think that there's a possibility that we go the other direction, at least for those here in the US, the US market, where prices are going to go up here domestically for both experiences and products and everything else, and while the dollar remains relatively strong and other currencies are falling against the dollar, it may end up being that my dollar can go further in other countries and other places than it might actually within my hometown. So it would be interesting to see. I don't know how much we'll see people traveling domestically, but international travel might see a small kick up while the dollar remains a little bit strong. So it will be interesting to see how things play out.
Speaker 5:That would be a very interesting phenomenon if we actually see people leaving their expensive home markets to go to cheaper shores. It's funny enough. One of the original reasons why international tourism became so popular in the 60s and 70s was that your spending power was greater in other countries. I am mindful that every time we go through these kinds of financial upheavals, there's always a different trend and a different takeaway from them. I'm just hoping that we can weather the storms and come out as a better and stronger economy economy having weathered both 2008, covid and now the current trade war that we seem to have entered.
Speaker 2:Yeah Well, as always, kevin, great to have you on I mean, you're here every week with Open and Shut but great to have you be able to have a totally separate conversation on the LVX show for guest gab. So until the next one. 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.
Speaker 2:All right, well, that was a great discussion. So glad to have that and we're nearly done. But I want to end with a awesome little crowd question. We haven't had this segment in a long time. Actually, the last one we had was Luis Martinez, and so great to have this great crowd question come up, and the question is digital or self-serve redemption pros and cons, and we've got Justin Michaels here to talk a little bit about that from Intercard, so we're going to hear from him right now, maybe. Okay.
Speaker 4:Now we're going to hear from him. Hi, I, michaels, with intercard and on behalf of lbx. I want to touch on a question today quickly that I've been asked many times over the years, and that question is around digital or self-contained redemption machines versus your standard price counter or redemption store. The introduction of these machines into the industry was a great thing. It allowed redemption arcades to go into unattended spaces like cruise ships and resorts, and we've seen them do very, very well.
Speaker 4:The main benefit of the machine is going to revolve around the labor component, next to restocking or refilling the machine. There's very little labor involved and you're not required to staff it. Labor is always going to be a big concern of any operator. Where the challenge comes is with product mix and merchandising. You're limited on the size of the product and amount of product that you can put into the machine. With your standard prize counter, you are able to offer a more diverse mix of prizes at different sizes, which lends to better merchandising strategy.
Speaker 4:And then, based on customer feedback, distributor partner feedback, consultant partner feedback when we've seen similar sized footprints with a machine like this versus your standard price counter or store, the counter or store is always gonna outperform it and again, I think it comes down to better mix of product merchandise better, which is, in turn, is going to get the guest excited to spend a little bit more money, save and generate repeat business that any operator wants. With that being said, every situation is different. Every space is different, so these machines can be a great solution for you in the right situation, but if you are especially in a larger footprint arcade, allocating the space and budgeting the labor to put in the price counter or price store is always going to lead to revenue based on feedback I've received over the years from the customer and industry partners. Appreciate the viewership and I hope you have a great day.
Speaker 2:All right. Well, that was a great crowd question answer there, Justin. Thanks so much for doing that, and look, everybody. That is a wrap for this week's LBX show. Stay tuned for Sound off number 69, actually with Kevin Williams, on Tuesday April 15th. With that, this is Brandon Wiley signing off. Stay tuned and keep kicking ass.
