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LBX Collective
Sound Off #70 - Genda's Expansion is Reshaping North American Amusement
Sponsored by Intercard!
The arcade industry is experiencing major shifts with Genda's acquisition of Player One positioning them as a dominant North American player, while new competitive socializing concepts like Pool House emerge alongside the Minecraft Experience's success and increasing AR innovation.
• Rotation vs replacement - updating your game floor to refresh your venue
• Genda's strategic acquisition of Player One creates a new industry powerhouse with 20,000 potential operations
• New venues planting flags for 2026-2028 openings, creating a market land grab
• Puttshack founders raising $34M for Pool House, an AR-enhanced pool concept
• Minecraft Experience demonstrates how digital interactivity is transforming themed attractions
• Mr Beast's Resort World event disaster highlights risks of poor IP management
• Popular VR games pulling commercial licenses as publishers consolidate revenue streams
• AR glasses gaining momentum with Meta, Apple and Snap pushing development
• New tariffs will impact gaming hardware, parts, and merchandise with potential 20% increases
• Supply chain disruptions likely as Hong Kong halts US postal deliveries and shipping routes change
We'll continue monitoring the tariff situation as it evolves and impacts equipment, parts, and operations across the location-based entertainment industry.
Are you on the edge of your seat Because we're about to? Sound off with Kevin Williams covering today's latest trends in location-based entertainment Brought to you by the LBX.
Speaker 2:Collective, your community, to connect, engage and inspire.
Speaker 1:All right everyone let's buckle up All right. Well, welcome everybody to SoundOff number 70 with Kevin Williams man, look at that.
Speaker 2:Wow, lots happening, a lot to get through.
Speaker 1:So what do we got? First of all, how are you going to change my mind?
Speaker 2:Well, the first off is the most important one, which is the question about rotation and whether really the operator has the ability to make the decision to rotate their machines or even to replace their machines. How are they making those decisions? So that is my question, really, that I'm throwing out there.
Speaker 1:Oh man. Well, I mean, first of all, I feel like it should definitely be happening on a regular basis. I mean, I think that's maybe I would say like that's like established best practice, but then we also don't see it happen as much as we should. So maybe it isn't best practice, I don't know.
Speaker 2:We know that it is, but whether it's established or not, I think We've got we're entering a period in the market, especially under the financial conditions that we're going through, where people will hold off making the decisions to buy new machines, that's for sure. And the word rotation on many companies' lips is not really happening, because they sometimes make the assumption that rotation means replacement and really in many cases rotation just means moving stuff around and making it much more acceptable and accessible for their audience.
Speaker 1:Yeah, and a lot of it comes down to when they first are designing their game floor and thinking about where their power outlets are going to be or where their pillars are and what space they have for what types of machines, and so sometimes you're actually restricted based on what your infrastructure is, depending on what you're able to do with power drops, and you obviously don't want to do core drilling, but that does create restrictions for sure, and so thinking through that ahead of time will make a big difference.
Speaker 2:As one of my old bosses used to say, the whole reason why these machines are on wheels isn't just to deliver them, but to also move them about.
Speaker 1:Yes, exactly, exactly.
Speaker 2:I think, at the end of the day, we are looking at a market that is going to need to think about rotating, not replacing, not buying new equipment, but just using what they have well, especially as their audience is going to be expecting a higher level of engagement, no matter if they have deep pockets to buy new machines.
Speaker 1:Yeah, and sometimes it's like throwing a fresh paint of engagement, no matter if they have deep pockets to buy new machines. Yeah, and sometimes it's like throwing a fresh paint of coat, fresh coat of paint on. You know, in a place like it can feel rejuvenated. It can feel different if somebody walks in and oh wait, that wasn't there before, and maybe it's a piece you've had for a long time, but it was around the corner or back behind something else, and so now, by just moving things around, it can give people a fresh sense of um it gives them a new experience.
Speaker 2:they see things that they haven't seen before signage, color decoration, the rules of the interior decorator but also very important in the industry that has lots of machines that need to attract lots of attention.
Speaker 1:But anyway, All right, well, coming up, we will have our latest trends. We'll be right back. 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, well, let's dive into the latest trends in the biz.
Speaker 2:Well, the big one obviously was merger and acquisitions taking place. I keep on going on about Genda. Well, I prefer calling it Jenda, but anyway.
Speaker 1:Genda.
Speaker 2:And the announcement about Player One was quite earth shattering for the American amusement trade. They suddenly woke up to the sleeping giant that was one you know. Many of them's poo pooed our coverage of the previous acquisitions and then suddenly they all were running back to their stinger reports, having to look up the history of Genda and exactly what they represented. This traded company now is a major player in the US or the North American market and I've even seen some people surprised to find out that there's a Genda Europe operation out there. But just away from the information about the player one acquisition, we need to be mindful of really what Genda represents as a North American player. We've touched upon at the time their acquisition of the Bandai Namco amusement operations. They acquired what was Putman Arcade or Level 257 and turned it into their interim operation. They have their Kiddleton operation, both cranes as well as amusement machines. But now with the NEM acquisition last with their 10,000 facilities, they suddenly were a force to be dealt with, though I think a lot in our industry pooh-poohed that NEM was just really a street round business and it wasn't, you know, a non-operator based arcade machines in diners and in grocery stores. Now with the Player One acquisition. They're sort of seeing that this is a player that has entered the market from Japan with strong alliances and a strong focus on what they want to do.
Speaker 2:Some of the observers have also missed out on the close relationship that Genda has with Player One in the amusement side. But they also have relationship with round one bowling the chain in Japan, but also now the considerable chain in the US, and that relationship has been allowing Genda to get a lot of experience about what the North American market represents and the needs. And now we look at what fundamentally is going to be a, from my point of view, a 20,000 possibility operation. I don't just mean amusement, but they also have their karaoke business that they're going to be bringing over. They have their crane and their gashapo business that they're going to be consolidating. They're now going to be consolidating the NEN and, you could argue, with their warehousing and manufacturing capability in North America through Player One. We have a brand new distributor in town.
Speaker 1:Yeah yeah. This is well played by Genda absolutely to come in, especially to keep it so quiet. By the way, I think that the little emoji next to their logo is just like a little bit of a like a wink. It should be a wink like hey look, you know, look what we're doing. Guys, we're coming in here, and very quickly. A dominant player in the North American market.
Speaker 2:They surprised their Japanese brethren, their flotation, their acquisition of Sega and such like. I think now that they're going to be surprising the hell out of our industry, and this is the new logo. Their original logo just had a nice little star above the A. Now it's got that wink. I wonder what it's going to be next. Yeah, talking about, I wonder what it's going to be next. Yeah, talking about, I wonder what it's going to be next.
Speaker 2:One of the things that we're seeing in the trend in the business is people planting a flag in the ground to say that they've got plans coming. So I think Genda is one example of a flag planted in the ground, and it is now burgeoning and actually born fruit. We have now Synergy. We have other companies now making announcements that they've done deals, that they're going to be building groundwork, they're going to be building foundations, they're going to be starting.
Speaker 2:It's really interesting to see how these companies are positioning themselves for what will be 24 months down the road. For many of them, these plans are not going to reach fruition. They're not going to be throwing their doors open until the end of 2026, 2027, 2028. And again, that's something that we all need to be mindful in this industry of what is coming next and how these rollercoaster rides going to be reaching its next peak. We've got a trough coming, which is inevitable. We've had a lot of openings. We're going to have a pause, but then we have the next generation of rollouts, and those next generations are going to be built for the future market rather than the market we're experiencing now.
Speaker 1:Yeah, this is a big land grab. I mean, I think this is what some of these players are doing. They're not doing anything innovative in the sense that they're coming with their same big box model. So they can, because my point is they can make the announcements early because they're not trying to. There's nothing that they're afraid of revealing.
Speaker 1:A synergy is a synergy is a synergy, right, so they're not making a lot of changes there. But what they're trying to do, I think, is ultimately so what we used to call in sales when you've got a big bunch of leads, you lick the pizza, you grab all the leads and you basically lick the whole pizza. That's effectively what they're doing is they're trying to keep their competitors out of potential markets by making announcements early, even when they maybe wouldn't have made their announcements as early, you know, a couple of years before they even start construction, just a few years ago, because we're seeing so much saturation. And this is exactly what happens when you see markets that are dominated and dominated and filled and filled. Now they're having to get out ahead of the game just to make an announcement that there is something coming eventually, and so they're just trying to get it out early.
Speaker 2:Not innovation, but definitely deployment. Deployment, yes, exactly Moving on and talking about that deployment and our friends behind Puttshack. If you're not familiar, puttshack was born by the brothers that came up with the original idea of Topgolf and their operation, their competitive socializing operation, has been going great guns. If you pause the video here and look at all of the data that I've collected, you can see that they've really been seeing a successful market iteration of the putt check 20 units out there. It always feels like there's more than 20 putt checks, but they're seeing very strong AUV from the facilities that they have open and they have raised equity to be able to roll out a brand new selection of facilities.
Speaker 2:The brothers have pulled back from that because innovation within Parchak they feel is not needed Personal opinion, I think it still is but they feel that they've done as much as they can and that this chain is now going to be pulled and at the same time, they've just raised $34 million to be able to come up with their next concept, and their next concept is called Pool House and this is going to be augmented reality pool hall.
Speaker 2:So those projection systems we've seen tracking the balls on the pool tables from a couple of years ago, tracking the balls on the pool tables. From a couple of years ago, our friends at Pool House, the brand new brand, will be rolling out facilities that are competitive, socializing with this as the gimmick. It will be interesting to see what market they will be rolling into and for them to make. The announcement this month tells us that we're not that far away from the first test facility going live. They're getting ahead of the curve. They're saying that they have away from the first test facility going live. They're getting ahead of the curve. They're saying that they have money in the bank to roll it out. We live in interesting times.
Speaker 1:Yeah, this one I struggle with. We'll see. I talked a little bit about this on the LBX show just a couple of days ago, but it would be interesting to see what they actually ultimately develop. I'm going to hold my my comments. I mean, I think it's. It's going to struggle, but I do think that they're starting to find their naming schema. So you have put shack, you have pool house and I my prediction is that the next one that they come up with is polo mansion. So you know, we'll have uh polo mansion.
Speaker 1:You know, upgrading each time to a shack, to a house, to a mansion. So you know, that's the next one.
Speaker 2:I thought you were going to go with the obvious one of Pickleball Mansion.
Speaker 1:Yeah, well, I'm still hoping Pickleball dies.
Speaker 2:Yeah, yeah. Well, this will be a very interesting entry by these guys. Will they be able to get lightning in a bottle again? Entry by these guys will they be able to get lightning in a bottle again? Talking about lightning in a bottle, and we're living the phenomenal success of the Minecraft movie. At the same time we have a Minecraft experience doing the rounds, already open in the UK and the US.
Speaker 2:The Minecraft experience is, you know, the usual walk-around themed live environment very, very similar I would have said before the detail to what we saw with Monopoly Live. But what we have a big difference here is the gamification, the interactivity. The guests are given an orb which is their orb, which has their details on it and their playing style, and they use these orbs to interact. So these cubes I keep on calling them orbs they use these cubes to interact with the digital projection, mapping and the other interactive elements of this environment. It is the future of these live experiences where previously they would have been very passive, maybe, with live actors interacting with the guests as they go around a heavily themed environment. That was a pop-up. Now we're seeing that pop-up environment very heavily on the digital environment and we can expect to see a lot more of these, especially with the success of the movie. We're now hearing of other video games being turned into movies. We've just had the announcement about OutRun, the Sega arcade game, being turned into a movie. We've seen what happened with Angry Birds. We've seen what's happened with Minecraft. You're not going to be able to open one of these experiences without having that digital interactive component moving on. And we've had a wonka moment, as I've coined it. Uh, it's a very interesting one.
Speaker 2:This mr beast, if you're not familiar, very popular youtuber with a phenomenal following, has been moving into streaming with his television, uh, series based on the Mr Beast games, very Squid Game-esque. He's also been using his largesse, the money that he's accrued to give it out, and he likes his pranks. Well, he was involved with an experience that was taking place at the Las Vegas Resort World Hotel. The Resort World Hotel should ring a couple of bells with our audience because that is where the AEI show will be moving to next year. Anyway, the hotel was needing of some promotion to increase its attendance. They came up with a game show. They got people to buy tickets to come to the resort and that they were told that there were going to be multiple play experiences throughout the whole of the resort venue, all themed to Mr Beast, with a big cash prize at the end. Well, it turned out to be a big damn squid. People were stuck in their rooms with nothing to do because the planned experiences and all of the events never materialized.
Speaker 2:We're suffering from a little bit of scrubbing of the internet here. A lot of the pictures of what was there and what wasn't there, and a lot of the information about what the tickets were, what was expected, have been scrubbed from the Internet. I suppose you would expect a Internet sensation to have the ability to clean his mess. Anyway, an apology has been given by the out to the Mr Beast compound, eventually down the road, as a replacement gift. A lot of people are holding their breath to see exactly what is the comeuppance of this, but it has left a very sour taste and no matter how much scrubbing of the internet is taking place, the details are beginning to show that this was a really badly organized event on the level, if not sparsing, the wonka experience yeah, I would argue that this is probably surpassing the wonka experience.
Speaker 1:It's just in the sheer amount of money that these people spent to get there and the amount of time they spent locked in their hotel. Well, they weren't locked in their hotel room, their mystery bag, to be delivered to them, but this is uh, you know. I think there's a couple of problems here. One it just feels like resorts world totally missed, uh, missed the ball, like this was their pitch to mr beast group. They, it's like they forgot that they had planned an event.
Speaker 1:Um, and yes it does work to actually deliver it. It's like people started showing me like, oh fuck, what do we do, and so I think that's part of the I think the company they hired to do this let them down and they didn't have a plan B.
Speaker 1:Yeah, and so this is not the first time that Mr Beast has run into this type of issue with his own IP and licensing his name and his brand. His team was probably not very closely connected with the whole plan. They licensed it. It's like Mr Beast Burgers, right. So he had a list back when his restaurants they weren't his restaurants Somebody licensed his name, created a burger that people didn't really like, and then they complained and now his name gets hit right. And so I think, if anything on Mr Beast's side is, they really need to tighten up their IP controls, their creative control, when other people are licensing and running events using his name and his brand.
Speaker 2:He's being circled around regarding his involvement with a crypto pump and dump scam. Allegedly he's involved with a video game IP property usage that failed very badly and left people with a very bad taste in their mouth. Now with this, you know every high there is a low. I am wondering that maybe Mr Beast is too big to manage his IP and unless he gets some serious help in then he could disappear, like most internet stars seem to do recently. Anyway, moving on and looking at the tech trends from the virtual reality sector, we've seen the disappearance of some very strong VR games from the VR arcade scene. This is where the publishers of the product have decided that they have blocked the usage of the games in VR arcades.
Speaker 2:Space Pirates very strong game, has been blocked on one particular platform but is still available where Job Simulator and Vacation Simulator have been removed fully from VR commercial experience.
Speaker 2:And it kind of leads us to the bigger question of why someone would do that.
Speaker 2:You would think the free marketing of having your very successful VR game played in commercial entertainment, generating revenue, would be something that you'd want to encourage rather than block. And then we suddenly find out that the largest selling games on the consumer VR market are those games that we are seeing removed. Beat Saber has been named as the number one best-selling VR consumer game and that was removed from the VR arcade sector, pulled overnight by Meta back in 2020. Job Simulator now has been pulled from us, and I was originally led to believe that super hot VR had been pulled. Luckily, our friends at Synthesis VR corrected me and said yes, the consumer version has been pulled, but the developer has kept a very small presence in location-based entertainment with a commercial licensed version. So I'm thankful for the correction, but it does show a concerning situation that we're seeing in the market where, as the consumer VR market founders, they try and pull all of their opportunities back to the core mothership and they don't really want to see anybody else make any benefits I think this is good.
Speaker 1:I mean, ultimately, this is this is forces the location-based vr to innovate and to not just rely on letting kids come in and play the games that they could play at their house. Right, that's the lazy way out of v in the first place, and so I'm glad to see that this is actually happening.
Speaker 2:Frankly, tough love needs to happen, especially if we need to stay ahead of the curve.
Speaker 2:The last thing we can do is tie our boats to the consumer VR situation. Sorry, tie our anchor to the consumer VR boats, because I get the feeling that boat has a hold in it. But anyway, talking about VR, we have the first deployment of a pure VR go-karting game. We've had augmented reality and mixed reality karting with the projection systems we're using excuse me, the HoloLens glasses, superimposing obstacles and objects within the environment. Now you put a full virtual reality headset on and you drive blindfolded, or digitally blindfolded, as it were, and our friends at Big C in Brussels saw the first rollout of this VR karting system by all reports. It works, it's enjoyable, the game is unique and I'm wondering if this is going to be competition to what we've seen from the projection side. At least you don't have to put up 70 projectors in the ceiling to use this type of system.
Speaker 1:Yeah, yeah, so worry, anything about VR, especially something like go-kart carting, is your throughput issues that you're going to have to deal with. But this looks interesting and definitely want to give it a try.
Speaker 2:Definitely want to give it a try and I'm sure that they're definitely wanting to try and compete with the battle cart market and all of their 50 plus facilities dotted around would be a nice market to jump into. Talking about head mounted displays and technology trends, and we're now seeing in the consumer sector a pivot over to big push on augmented reality glasses. So virtual reality totally drops you into your own synthetic world. Mixed reality uses a synthetic world within the real world and really augmented reality is giving you a heads up display or presenting synthetic digital information about the world that you're living in. We've seen this tried before with the Google Glass, we've seen it with HoloLens, we've seen it with Magic Leap. All of those really became croppers, hindered by the laughing factor of how they made the individual look, hindered by the price, hindered by the quality of experience they offered. Well, our friends at Meta, with their Ray-Ban AR glasses, have seen a relatively large number of sales. They've seen over a million units deployed and they're treating that as a success and they're doubling down on that. At the same time, our friends from Apple are doubling down on that. They are going to release not just a replacement to their very expensive spatial computing headset, which was much more mixed reality. They're now going to come out with an augmented reality glasses system for the end of the year. And then, at the same time, we have our friends at Snap who have their augmented reality glasses and they were actually pushing quite heavily their interest in trying to get their Snap glasses into as many hands as possible, even turning to the location-based entertainment market as a possible home for that. All of this happening just as one of the leading companies in augmented reality, niantic, who came up with uh, the um pokemon go experience that was the fervor and the furore only uh over eight years ago uh, they're now laying off staff as they reposition themselves for what they see as the next uh sector or the next application of augmented reality. And we in the out-of-home entertainment sector already have augmented reality at home, as it were. We have the deployment of augmented reality game experiences not that many, not the profusion that we have in vr, but we have the highly successful uh mar experience that was at Super Nintendo World that uses augmented reality glasses built into a special hat. Just an interesting aside, the company that came up with the technology that was used in the successful experience was brought by Apple a couple of years ago. So I wouldn't be surprised that a lot of the applications we see used here may be appearing in the Apple augmented reality glasses. And then we also have Versa Immersive, the company that has been using HoloLens 2 headsets. They were at AEI a couple of months back and they've been deploying their system, which is kind of an augmented reality gallery, interactive gallery experience, with the synthetic sculptures and objects within the environment created through the headset and allowing the guests to navigate through that. They have about 15 plus facilities, mostly pop-up style facilities, using this, and it is assumed that the explosion in augmented reality glasses from the consumer sector will mean to see more of these applied in our sector.
Speaker 2:Moving on and quickly zipping through the last of this, sadly, a new aspect of this report now is the tariff situation and the impact in tariff watch. This month we were led to believe that for some reason, electronics, mobile phones and even vr headsets were not going to be impacted by the tariff. There was celebration and champagne corks are popping, but what a difference a day makes. We now find out that tariffs will be applied. The White House has made it clear that nobody is getting off scot-free in this scene and that mobile phones and virtual reality technology will see tariffs applied to imported products. You know suggestions of a 20% increase are being banded around. We live in times where everything changes every day, so I'm not going to speculate. I'm just saying those people that were telling you that it weren't going to happen were wrong, and we're already seeing the impacts in the consumer game sector.
Speaker 2:The prices of console game machines are going up already, as we would have expected. Retailers are pre-loading and pre-preparing themselves and so forcing it upon the consumer. Sony is raising the price of their PlayStation 5, which is now sunsetting. It's in the final phases of its operation, so they're trying to squeeze as much juice out of their orange, the new Nintendo Switch 2, they've already started the pre-ordering. They've already started to ship in units. They even flew in units from Japan to try and get ahead of the tariffs, and the talk on the street is that that is also going to see a major hike in the original price that they were talking about.
Speaker 2:One last aspect of the tariff implementation is Hong Kong made the announcement that they are now stopping all mail postal service deliveries to the US. Hong Kong was used as a port of exit by a lot of the Alibaba and a lot of the Chinese small goods delivery All of the good guys. So all of your merch spare parts and medium-sized items that you were expecting to have delivered same day or same week. It's not going to be happening. And if they are going to be happening, there's going to be a hefty buyer additional tariff price put upon that.
Speaker 2:At the same time, we're seeing the haulage business starting to report the first impacts of deliveries, something called blank sailings, which refers to container ship deliveries that were expected either being cancelled or rerouted. That means that if they're rerouted, then additional pricing is put on them having to import products into the place, or if they go blank, they're just not going to turn up. So be prepared for the situation of things that you were expecting to be delivered either being terminated or given extended dates. It impacts us in the service industry greatly, from the spare parts to the warehousing, to obvious delays, products that we're expecting to be dropped into the market. Anyway, I've zipped through that pretty quickly. Is there anything that I've missed that you want to touch on, brandon?
Speaker 1:No, I just think that we're going to have to do a tariff update every day, probably, unfortunately. Unfortunately it looks that once it's unfortunate, so but no, I think it's great and we will see everybody on the next SoundOff.
Speaker 2:Have a good one.
