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LBX Collective
Sound Off #79 - Phygital fusion, Netflix House details, and much more!
Sponsored by Intercard!
On this week's Sound Off, Kevin Williams and Brandon Willey discuss the latest trends shaping location-based entertainment, from Netflix's ambitious physical venues to the return of augmented reality glasses in LBE spaces.
• Digital crossover technologies like Capcom's MonsterGate experience using AR headsets to create immersive environments
• Economic indicators showing operators stockpiling high-ticket items ahead of expected price increases
• Surprising decreases in hotel occupancy following Epic Universe's opening, suggesting shifting travel patterns
• Genda's continued expansion in North America with over 13,000 venue acquisitions and more expected soon
• Netflix House details revealed for Philadelphia, Dallas, and Las Vegas locations featuring IP-based experiences
• Augmented reality making a third attempt at mainstream adoption with Meta selling over 1M Ray-Ban glasses
• Meow Wolf partnering with Niantic to develop AR experiences for their immersive art installations
• Konami returning to the North American amusement market after a 20-year absence
• Unis introducing a "Trade-Up Crane Store" concept for crane games with a collect-and-trade prize system
• Industry projections showing the amusement sector growing from $52.6B to $71.2B by 2032
Join us next time as we continue to track the rapidly evolving landscape of location-based entertainment and the technologies shaping its future.
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 Collective your community to connect, engage and inspire.
Speaker 2:All right, everyone. Let's buckle up.
Speaker 1:All right, well, welcome everybody to another SoundOff with Kevin Williams. This is number 79 for June 24th, and we've got to stop doing this. We've got to stop meeting remotely. Kevin, you're in a different hotel, I'm in another airport. I don't know what's going on here week after week.
Speaker 2:Well, sadly for me, this is going to be the way of things now regarding certain things that have been happening with projects and development that I'm on. So the road is where I'm going to be.
Speaker 1:Yeah, yeah, for sure, for sure. Well, it is what it is, so why don't we dive in and get going with something? That changed my mind?
Speaker 2:and get going with something that changed my mind Well with recording this after AWE and AWE Amusement, sorry. Augmented World Expo had a lot of technology on display that was more applicable to us in location-based entertainment, and one of those arguments was regarding the digital crossover of technology. In particular, our friends at Capcom revealed more details about their MonsterGate experience to supply the digital environment with augmented reality headsets to supply the virtual representations of the creatures from that universe that you could interact with, and that physical element is really where I'm thinking the future lies, but also, I think it is something that we need to now be taking on board, that we incorporate into our mix that we need to now be taking on board, that we incorporate into our mix.
Speaker 1:So I don't know if I'm convinced about that yet.
Speaker 1:I think that digital will definitely play a role in some forms or some factors of location-based entertainment, but I don't know if it's the future of all LBE right. I mean, I know we didn't have the word all in there, so I'm adding that in there, maybe just to try to be hyperbolic, but I do think that there will be some elements of augmented reality against some experiences. I also do wonder like I've been mulling this over, obviously working on developing a, an attraction as well, you know in a venue, you know beside, and really been thinking through okay, what is that experience going to be like? And I do wonder if the digital component, like the, the augmented reality uh, little creatures moving around me throwing glasses if that's the easy way out of really delivering an immersive experience. Like, hey, if I could just put up a digital LED screen and put on some glasses and create something digital and they just walk around in a big empty room and have an experience. Is that the easy way out versus really trying to create a physical immersive environment experience?
Speaker 2:You've hit the nail on the head. This is what Capcom created was an expo installation, so it isn't a permanent facility. And I would agree with you. It is the low effort, low hanging fruit approach to creating a physical environment digital walls, augmented reality glasses bish bash bosh, no physical items. Digital walls, augmented reality glasses bish bash bosh no physical items.
Speaker 2:You're right, physical is physical and if you don't have the Harry Potter moment where I wave the wand and, through my digital interaction, a physical prop opens or moves or does something, then you're really sitting on the bench, as it were. Regarding a proper digital environment, do you say that me hitting the block in the Super Nintendo World Mario environment and then being able to play a digital game is the digital moment, or is that again low-hanging fruit? It is until we have more interaction with our immersion that I think, and that's why I didn't use the word all purposely, because I'm a chicken and I wouldn't ever use the word all. I'll always hedge my bets. But also the issue I feel is this is the beginning. So you know, maybe paraphrase what I'm saying is obvious future. Is this the beginning of the obvious future, as we see more and more examples, as you will hear later on in this sound off.
Speaker 1:Yeah, perfect, perfect. Yeah, totally agree with that. And yeah, let's have that conversation as we get into some more of those trends. But we will take a quick break and come 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 some trends in the economy.
Speaker 2:Well, thank you, intercard, as always, and let's look at the economy first. Thank you, intercard, as always, and let's look at the economy first. And stockpiling is a new term that we can use. We are now seeing from numerous reports across the industry that we have operators of facilities that have started to stockpile certain high ticket price items that they're concerned will rise in price going forward in the next couple of months. We're seeing warehouses within these facilities, or storerooms, I should say, within these facilities, being crammed with spares for certain attractions and the ride parts. We're seeing a lot of prize material and merch that is being stockpiled because fundamentally, it looks like we're not going to see the price hikes now, but they are definitely going to be felt in the next couple of months, and certain operations that have the capability in the deep pockets to protect themselves against this have started to go through this process Moving on and some of the impacts regarding the appearances in the economy are also being seen or indicated.
Speaker 2:One of the biggest surprises was the availability of hotel space during the build-up to the Epic Universe launch and, following its doors being thrown open in May, the continuation of availability.
Speaker 2:We're seeing occupancy rates very, very much down where it's unusual to expect that with the launch of a new park, especially a universal park, you would have expected to see an increase in occupancy rather than a decrease, and to see a 7% to nearly 8% decrease is a concerning indicator of what we can expect going forward into the key summer period.
Speaker 2:That said, I also have information regarding regional and smaller venues that have seen an increase recently in attendance. Going back to my argument about staycation, now, all of this is surrounding the three core elements concern about the economy, concern about the world situation and also concern about the localities where some of these theme parks are placed and the ease of getting to them. These are all factors. The situation in the Middle East has obviously impacted many people's considerations regarding their international travel plans for 2025 and will have an impact on 2026 considerations, no matter which way the Doves or the Warhawks win in this particular situation. But also, a lot of this planning is made six to nine months before the families, the groups, go on holiday. So, again, a lot of this impact that we're seeing now from the mood on the news won't be reflected until maybe the end of the year in actual attendance at the entertainment facilities in question.
Speaker 1:Yeah, I mean, I've even begun to consider where I'm traveling in the next few months. I travel, just like you, for various reasons. One of them actually is Bowl Expo coming up at the end of June, beginning of July, right, it leads right up to the July 4th holiday and it happens to be in Washington DC. And so you know, I'm still planning to go, I'm planning to go for the second or the third, I was going to stay for the fourth, but I decided I'm not going to and I'm going to come back home.
Speaker 1:And so you know, definitely not just economic turmoil but political turmoil and geopolitical turmoil was certainly having an impact even on my own considerations, and I think the biggest surprise for me was seeing the decline in hotel occupancy in Orlando Three weeks, within three weeks, of opening at the Universe. It was expected to, like you said, go in the other direction by at least another 7% to 10% and it hasn't. So there's clearly some other factors weighing on people's minds as they're considering where they're going to be going and spending their money and their time.
Speaker 2:The economic situation we had been dealing with at the beginning of the year, the political situation likewise. It's now the geopolitical situation regarding world tension that is now adding the extra components to people's considerations. Staycation and also the preciousness of vacation time will also have factors to play on this and I know we're going to be touching on this in later. Sound loss. But anyway, moving from the geopolitical situations to the biz in general and it's our usual gender moment Now no, don't worry, they haven't brought anyone else yet. That I know of.
Speaker 2:The clock is ticking and I haven't checked my Japanese feed yet, but I really wanted to share this Japanese slide from a private presentation that was made. That gives a much better snapshot of how much gender has acquired from the North American perspective, not just America but also including Canada, and it shows the four key acquisitions that we have been reporting on. I noticed that at least one of our news media has now cottoned on to the Barbary acquisition. I'm not sure if I was pronouncing their name right. I'm sorry, but you can kind of see the 10,000 acquisition from NEN. You can see the 2,000 acquisition of facilities, active facilities from the Player One acquisition, and then the 89 and the 1,000 acquisitions.
Speaker 2:Of the recent purchases, the new ones, and that is a considerable market representation for a company that wouldn't have been on many people's lips just two years ago. And this isn't it. We have more to come. Our sources have made it very clear that both Europe and additional North American facility operations are under the crosshairs of Genda and we may have, before the end of this month, another announcement to make of a considerable acquisition.
Speaker 1:Genda, genda, genda all day long. I mean, they just keep going. So it's yeah, it's remarkable, frankly, that they've been able to do's. Yeah, it's remarkable, frankly, that they've been able to do this, as we talked about before, that they've been able to do this, you know, under the radar, more or less, from any sort of regulatory bodies.
Speaker 2:I would argue that most of those regularity sorry, regularity, get my tongue sorted out bodies don't have their radars on at the moment. The regulations and the focus that some of these companies and associations have is elsewhere at the moment. Moving on, and some interesting financial figures. As Brendan was saying, we're recording this in the build-up towards International Bowl Expo and one of the bowling media services has released some interesting data. You know saying, you know sticking the arm into the blender and saying that the amusement games industry is, you know, at a 52.6 billion points is one thing, but then to turn around and say that they expect in 2032 for it to be at a 71.2 billion valuation is a considerable rise. I mean, what will it take to take this industry and inject a 35% increase in business is, you know, is going to plow on a lot of people's minds. Where will that injection of cash come from? You know it isn't trivial. Over that period of time from. You know it isn't trivial. Over that period of time. You know, over eight years, we will see this growth in business and I would argue that that growth of business is already happening, and I'm not just pointing to our friends at Genda, but I'm also pointing to our friends more closer to home in the film and the streaming industry, and, of course, we've already talked about this in a number of sound offs. But, surprise, surprise, the rest of the media seems to have caught up with us. I'll put my ego back in the box, if you don't mind.
Speaker 2:The issue is that we have now been given a much clearer picture of what the netflix house operation is going to be. Netflix now doubling down and entering the location-based entertainment market, and tripling down. They have just recently announced not only will they be opening a Philadelphia and a Dallas facility, but they will now also, in 2027, be opening a Las Vegas facility on the Strip. Las Vegas is becoming a very important location-based entertainment property territory than many of us expected. We're lucky that we have some transparency now to what the Netflix concept is for their facilities and, though the images are very arty and very laid back, they give us a closer perception of what is being produced here. We are now seeing with the Philadelphia facility that the Wednesday property, the One Piece properties, as well as the Squid Games properties will all play a part In addition to the inclusion of Netflix Bites. I don't know how many of you are familiar with the F&B food and beverage property that Netflix has been trialing in Los Angeles and has also opened in Las Vegas. Surprise, surprise, tadam is their screening room, their mini cinema concept, and these are core components that will be part of all of the Netflix house rollouts, while the rest of the space is supported by mini golf, by the inclusion of escape rooms or mission rooms, I would prefer to call them as well as other active entertainment properties and some amusement. We're told that Netflix replay will be a component of these facilities, which is fundamentally an arcade on steroids. This is the Philadelphia facility, and we've also been given a snapshot of the Dallas facility, with the addition of the removal of the Wednesday IP property and replaced with Stranger Things.
Speaker 2:This is not unusual. You know, for the last few years, our friends at Netflix have been rolling out pop-up live experiences based on their brand as marketing promotions. I've gone on about the Army of the Dead VR experience, which has now made a permanent home, currently in Las Vegas at the Area 15 locality. I've already touched upon our friends at Netflix Bites and we've also seen Stranger Day live experiences. We've seen Squid Game's live experiences.
Speaker 2:Another addition to the mix of what's going into Netflix House is a partnership with our friends at Sandbox VR. Sandbox VR will be parachuting into each one of these facilities what they like to call Netflix virtuals, which are really fundamentally little VR enclosures where you can play the modified versions of the by a streaming company towards having a rolled out bricks and mortar physical environment. I can use all of the phrases here. They will soon be joined obviously by Paramount, with the Top Gun venues. They will be joining, obviously Sony, that has had their rollout of their first interpretation of this with Wondiverse, and there will be others following quickly behind this 100,000 square foot Netflix interactive immersive IP entertainment venue looks like.
Speaker 1:I'm super excited and encouraged by this latest news that's come out here about these drawings, these renderings and what they have here. This is definitely, at least from what they're showing here. Uh, if they execute which I assume they will, right, they would be putting this kind of artwork out if they were to execute in this level, but this looks like it's going to be significantly different than a sony reverse. Uh, you know totally this and whatever. So I'm really excited for this and you know what I like about this as well is they could have easily just said all right, we're going to take the same Netflix house in Philadelphia, the same Netflix house in Dallas, and it would have been a lot easier, a lot cheaper. They would have been able to reproduce those a lot more quickly.
Speaker 1:But they decided we're going to make different attractions for each one, different experiences for each one as well, and so very, very excited, very, very excited. I just made a baby. I've sat next to me, so there you go. Um, anyway, very excited about this and uh, uh, my, my son, I know, will be super excited to go and check out one piece in Philadelphia, so I'm gonna have to get the, the, the one piece is actually one of those experiences that will be in, uh, at least more than one of these localities.
Speaker 2:I, you know this. This, this speaks the, the language that I've been trying to present quite heavily about a mixed use, leisure entertainment. They haven't doubled down on one interpretation and they've also made a flexible space where you know that as soon as the luster falls off of the branding on maybe their One Piece escape room aspects, they will be able to close it off and rebrand it to whatever the latest hotness from their catalog of movies will be. This will raise the bar, and we're hoping to raise the bar positively. But no matter how well it is received, other operations cannot now sit on the fence and say that they will wait and see. They will now have to start coming in.
Speaker 2:We will have to see Sony taking a serious perspective on how successful their Wandaverse has been and what they can do to address the shortcomings that they have there. We know that our friends at Skydance have already invested in location-based entertainment projects in the past, as well as Lionsgate projects in the past, as well as Lionsgate. All of those corporations, movie and streaming operations are now looking at experiences and I think to achieve that 35% increase in amusement business positioning, this is the kind of business that will maybe push it beyond 35% in the next eight years.
Speaker 1:Totally agree. Last thing I'll say, before we move on to the tech trends, is that they also are doing what I believe is the one other aspect of the future of location-based entertainment is the multi-gates within the single gate, as you alluded to. The fact that they can close up one section, replace one piece is no longer interesting for whatever reason, or maybe they just want to change it while the other piece is working on the next season for the next three years and they want something else in there. They can very easily do that if you have a multi-gauge environment here and they don't have to have one big area and then worry about changing something while they still are running a business for those of you listening or watching, you know the definition of a multi-gate comes from the theme park industry Walt Disney.
Speaker 2:I use the hub and spoke analogy when I am talking about multiple entertainment venues, but it is the ability to have segments around a central core. So in this case the Netflix Bites, as well as the Tadam Cinema, would be the central spoke elements and then all of the attractions are resulting from or emanating from the central hub and that gives us the ability to close off the gates. But let's wait until I don't think we'll have that much further to wait. I think we're about four months away from the first facility, philadelphia opening up, and then hopefully we'll be standing outside doing our report from the Lions Gate. It'd be easier if it was Philadelphia was the first one to open, or else Dallas beats it, because we could then go straight over to Wandaverse and do a core comparison, that's true.
Speaker 1:Well, whichever one it is, I will be there in the first week. I've been looking forward to Netflix House since they announced it years ago, so very, very excited we will be we will be.
Speaker 2:We will be Perfect. We'll make sure that we do it together. Turning to the tech trends, and as I touched upon at the beginning, awe, one of the larger of the conventions in North America that handles the developments in augmented world development, from the metaverse and VR all the way to augmented reality and mixed reality applications on the show floor. Just again, to help everybody that isn't born with a silver internet connection in their mouth to understand what we're deriding here, virtual reality is putting a box on your head and placing you in a completely synthetic environment, a virtual environment, turning off all of your senses and then turning them onto the immersive technology supplied from the head-mounted display. Augmented reality is allowing you to see the world around you and superimposing information and data and statistical information about what's doing. So you put the glasses on, usually see-through glasses, and superimposed on your field of view will be the direction in which you're heading or the name of the person you're speaking to, or live translations, those type of things. Those are the Ray-Ban glasses kind of approach or the Snap kind of systems that we've been hearing about. And then we have mixed reality, which is placing synthetic virtual items into the real world in which you're viewing as if they are really there, and we've seen that through virtual reality, laser tag experiences such as MeLeap, and as well as the new generation of mixed reality carting systems.
Speaker 2:Anyway, that is the elevator pitch of the technologies that we're dealing with and, fundamentally, the sector is banking very heavily that, with the slowdown in consumer adoption of virtual reality the box on your head they are hoping that the audience will now pivot towards augmented reality, the glasses system, hoping that the specters of the previous attempts to roll this technology out have been brushed aside and that the market is now ready for this. We have seen Meta champion that they have sold over a million units of their augmented reality Ray-Ban glasses, and we are now seeing other companies talking about entering the fray with their interpretations of glasses. We have to be mindful, of course, that back in 2012, the Google Glass appearance put everybody off this concept. Privacy and looking like a total burk were the issues that drove a lot of the people's perceptions of this.
Speaker 1:I believe the term was glasshole.
Speaker 2:Yeah, I always like the glasshole comment, but we have to be nice to Google now. So, yes, moving on. And then, of course, in 2018, we had the fury of people throwing money at our friends at Magic Leap towards getting them to roll out what they promised would be the second coming of the technology the ability to have an elephant in the palm of your hands or whales swimming around your gymnasiums. Obviously, that never materialized and the corporation's executives disappeared after trousering vast amounts of money, and the debts were acquired by a Saudi arrangement. So that kind of was a second black eye for the aspirations and hopes for AR. Now we're at that third stage. We've run out of eyes. This is the make or break.
Speaker 2:A lot of investment has been put in and people want to see that augmented reality is ready for prime time, as it were. It is a consumer object that consumers will want and will supply activities. Apple has now pivoted away from their spatial computing aspirations towards focusing on developing an AR-based glasses system, which they're going to launch next year. Our friends at Meta have also doubled down on a new version of their augmented reality glasses concept, and even Samsung, who have cut a mixed reality headset coming out this year have also revealed that they're working on an AW, so AR system that will fit into the market, and we're seeing the partnerships and the agreements now being established. Our friends at Mia Wolf have turned around and signed a partnership with Niantic. For you that are not familiar with Niantic, they are the company that was responsible for the Pokemon Go augmented reality platform for smartphones that went viral, became the phenomena that is still popular even to this day. That said, our friends at Niantic have sold off that division that created the Pokemon Go operation to a Saudi-backed game development house, and they have now pivoted 100% on creating not game content for their future perceptions of what augmented reality environments will be, but actually in creating the landscape.
Speaker 2:And so Niantic Spatial is a tool that creates the ability to pin items and objects and create game experiences and other elements within the real world through digital representation through the usage of Niantic spatial empowered hardware, and Mia Wolf would like to use this technology in creating experiences and exhibits for their facilities that will be based on this augmented reality technology. They are currently doing a test a closed beta test of this type of technology using glasses at their Denver space, and they're now looking at rolling that out into a public demonstration and maybe incorporating this in their new New York facility. So starting off with location-based and then looking at the consumer application going forward, niantic has also partnered with our friends at Snap to incorporate their spatial technology into the glasses that Snap are working the Spectacle range of systems which, during AWE, was announced will be rolled out next year as a full consumer released product. Snap feels that there is about 400,000 AR developers out there that will need to have a developer platform to get the most out of what can be achieved with their augmented reality glasses, and it will be interesting to see some of the content that will be created for this and other platforms.
Speaker 2:The other interesting thing about this, of course, is that Snap isn't just partnering with Niantic Spatial. They've actually invested money into Niantic towards achieving this. And then, going on about what I've been talking about previously from the China shows, we're seeing further companies now launching attractions that incorporate some level of augmented reality or mixed reality technology in them and the well-known Chinese karting system. They have gone through and released their MR chariot concept, which is electric go-karts or electric karts using see-through augmented reality game experience. This now brings up seven different mixed reality and virtual reality karting systems that I've been following now in the sector, not including, obviously, the projection-based karting experiences. I think this is a trend that we'll be seeing a lot more of your feelings about the AR revolution in our sector, yeah.
Speaker 1:So, excuse me, I think that the Meow Wolf experience is actually a perfect experience to add an augmented reality element Again, depending on what the experience is, what the experience is, I'm putting on just Ray-Ban glasses. That is the most that you really want a guest to have to do. If I have to load on a full reality headset and wander around Meow Wolf for two hours, I'm not going to want to do that and this is one of my biggest issues that I've had with First Immersive and I've spoken with them about this and they know this. They're working towards moving away from the full-size headsets anyway. So obviously they know this and you know 45-minute experience even with that headset, is a lot. But Meow Wolf overall, their whole concept, it's really unique and bizarre and it's ethereal.
Speaker 1:Adding in this type of augmented creatures that can now be crawling around in the ground, things that can augment each of the art installations and try to draw cohesion. Again, one of my issues with Meow Wolf has been that some of their rooms are just art rooms and there's really lack of story cohesion from room to room in some cases. Well, this could potentially help with that. Now, you could potentially draw a storyline of room in some cases. Well, this could potentially help with that. Now you could potentially draw a storyline of characters in some of these other art spaces that normally wouldn't have a level of cohesion, and so I am excited about that. I'm also, you know, we talked about on the lbx show last week about their new uh, their beta, what I'll call their beta test the phenomenomaly uh concept, which is, you know, live actors and live performers and artists doing work during certain periods of time in the Vegas and Denver locations as well. So, again, glad to see that they're experimenting and throwing a number of picks at the wall, and I do think that AR in a meow world context is really good.
Speaker 1:When we talk about carding, again comes down to the type of guest experience. And do I want to ride around in a cart with a heavy thing on my head, or would I rather have projection mapped or LED flooring that I'm interacting with? Those are more physical things. I definitely think carting is moving in a digital direction. It's just what is that guest experience? How am I interacting with digital elements? Through a headset, through glasses, or through just projection mapping or LED flooring?
Speaker 2:It is essential that it's the correct system to achieve the most simple engagement with the immersive environment. The days of being able to stick a cumbersome head-mounted display such as the outdated Vive headset have gone, and now they're being superseded by the lightweight pancake vision systems narrative that this technology could be a bookend or an index. As you walk around wearing lightweight snap spectacles, being able to then have information and maybe introduction and even explanation of what you're looking at and what you're experiencing, as well as a game or interactive element being supported by a physical component, would be a godsend to them. And this isn't the first time that Mia Wolf has experimented with mixed reality and augmented reality. Funny enough, I was speaking to one of their previous R&D people who now is working on other projects away from the company, so it was giving us a snapshot of how much Meow Wolf experiments. The problem will be that you can experiment forever, but you're going to have to deliver at some point. So whatever this beta that they've been working on actually feels like is going to be important for them to secure their position, or else other people will walk into that space Moving on, and if you're interested to know more about some of the development in the mixed reality and augmented reality scenes.
Speaker 2:As it pertains to location-based entertainment, I would throw you to the latest feature that's just come out in our Virtual Arena series. Enough of a plug there. Okay, it's a shame. This is a video that doesn't work because we're doing a stream. I wanted to do an experiment to see if it would work and it doesn't. But you know, c'est la vie. If you go over to the friends of the Stinger reports on Facebook, you'll be able to see this video. It alludes to or it doesn't allude, it defines about how history is repeating itself and how a technology concept from 1993 for a six-person multi-user simulator experience is suddenly hot again, with a Chinese company this year releasing a six-person multi-game experience simulator for the market. But you know, as my father would say, nothing changes, they just change the wrapper. But again, I would point you to our video coverage at that page.
Speaker 2:Moving on to developments in the market and going back to the increased investment and increased worth of the amusement sector, we have news of Konami's return to the North American market. Now, for you that are not familiar, konami is one of the larger of the video game developers from Japan, along with our friends at Bandai, namco and Sega and Tato and others. Konami, like those companies, has a very strong amusement presence and they decided in 2003 that they'd had enough of the North American amusement market for various reasons and they took their toys, closed down their American offices and went away, never to return. Very popular B-Mani machines based on the Beatmania, dance, dance Revolution and other rhythm music game systems through the Dave Busters in small numbers and through quite large numbers through Round One USA facilities. So they haven't had a presence in the US, but they have had a presence because these machines are so popular with their core audience. Now they've bitten the bullet.
Speaker 2:Konami has gone through restructuring and they've decided that they will return to having products represented into the North American market. They have been through private discussions, talking to operators of facilities finding out if they are interested in having their access to the latest of the Bimini machines, and they've also been talking to distributors in confidence to see if they can align themselves with relationships to have these machines imported directly over. At the same time, they have been working on developing new hardware that is based exclusively for Western application. Our friends at Arcade Heroes has gone into much more depth about this, but we've had a redemption version of the music rhythm game created with Dance Dance Revolution, stomp, that is currently on test at a Round One USA facility. And they've also developed a two-player shooting game based on the very popular classic video game property, contra, which is currently on test at a Round One USA facility.
Speaker 2:You're seeing a pattern here, just for the uninitiated. Konami in Japan has a very close relationship with Round 1 Japan, which is the Japanese bowling facility operation chain, which has seen some very strong, successful business over the years and has been expanding their Western representation. Funny enough, our friends at Round One have had a very close relationship with Genda, going forward through the Kiddleton chain and also the acquisition of the Bandai Namco Entertainment Puckman entertainment facility in Chicago. So all of these, you know, I feel like that guy in the meme with all of these pictures on the wall and all these pieces of string connecting them together. You're not paranoid, they are out to get you. The issues here with Konami returning to the market shows that the water now is much more applicable to having a North American representation. I don't know if that is encouraged by Genda's developments in this market or just the general appetite now of the international audience to have an out-of-home entertainment representation.
Speaker 2:The reason why Konami really has been very wary of releasing their B-Main E machines into the Western market officially, rather than these casual grey imports, is broken down into two components, the first component being licensing of the music.
Speaker 2:That is a difficult and complicated and expensive process.
Speaker 2:And number two dealing with the distributors.
Speaker 2:The feeling was at the time that Konami was badly treated by its representation through its distributed products, that they were led down some dead ends and that they were saddled with some considerable debts and unsold products by 2003.
Speaker 2:And they just felt that that was unacceptable and they pulled themselves out of the market. Konami still has a presence in the US through their gaming and casino machine operation as well as through their consumer games operation. But regarding amusement, till now they have not had that presence. Regarding amusement, till now they have not had that presence and it will be fascinating to see if they will decide to come to the trade shows themselves or if they will partner with a distributor, a new distributor, towards having their products represented. But at this point in time all bets are off and they are literally starting the re-engagement with the North American market, which has been very fascinating, not just because of the availability of a new range of products for operators, but the knock-on effects that that will have for Andomero and for Step Revolution, who have had the rhythm game market to themselves for a period of time.
Speaker 1:Yeah, this will be. It has the inklings of the beginning of a trend that we've talked about, whether it was on the show or just offline. Is this shift or beginning?
Speaker 1:shift to see some of these manufacturers selling direct to the market, not through distributors, having a presence where they are forming direct-to-type partnerships with the Dave Buster. It's sort of a wrap-on, but then as a result they get some visibility into that market and the consumers see them in other venues than have a motivation to go direct to these partners. Right, it's one of the reasons why we've seen success like in Allen 1, being able to go direct at some level to the market with their concepts. So the indie operators are getting more success going direct. Will we see more of these manufacturers finding success going direct versus through extraordinary?
Speaker 2:I think we will see manufacturers going direct more and more. Perfect example of using Alan Wong. One of the points I didn't bring up regarding the initial conversations that Konami has been having with independent facility operators in North America has been the possibility of doing revenue sharing with these machines being deployed and speaking of operations, looking at offering unique direct sales kinds of relationships. We've just heard the news that our friends at Unis have come up with a brand new concept. Our friends at Eunice have come up with a brand new concept, a plug and play arcade facility concept that builds upon the popularity of the train. Now this is the latest plug and play installation opportunity that Eunice has done. We've already touched upon their emoji arcade concept, which has been rolled out in a number of locations in North America as well as in Asia. Now they are promoting the Trade Up Train Store catchy name concept, which will fundamentally build itself on the trend that we've been charting in Open and Chart, trend that we've been charting in Open and Shutter and also touched upon, which is the new way of crane machines and the new way for the audience to play these new way of crane machines. One of those is trade-up, where you collect multiple items of a certain prize while you're playing these machines and then you're able to go to the prize center and hand in X number of smaller items for a larger item of merch or prizeware that you want. This trading is a brand new concept.
Speaker 2:Some of the new crane new wave crane chain facilities have been employing this approach. It moves away from the traditional crane machine luck and flaw that we've seen, where traditional crane machines have had little skill and a lot of deviation in them. Now we're seeing the crane machines going back to being skill based, but also skill based with a level of engagement with the playing audience that is much older than the traditional uses of these crane systems. Not much information about where the first of these facilities will be rolled out from Unis. I think we're at an early stage of discussions here.
Speaker 2:It's also going to be interesting to see if they're going to do anything unique to the Unis crane machines that they're going to be putting into these facilities or if they're going to be doing licensing deals for the merchant properties that go into this. But if you're in thinking about having one of these new wave crane stores in your facility or adding this to your retinue locations, be prepared that there's going to be a new sheriff in town throwing their hat into the ring, and I wouldn't be surprised if some of the other manufacturers don't go down the path of trying to offer this plug and play solution. So, going back to what we were saying about Konami and the dealing direct and having a direct contact, even a revenue share, in the operation of the machines in these facilities, this seems to be the future that we're going to be looking at, especially for an industry that is looking to increase its value by 35 percent.
Speaker 1:Yeah, yeah, we've got to make up that 20 billion dollars somewhere, so anyway, but yeah, this is what we talk about. In fact, this is a new concept for amusement. It's a new concept for location-based entertainment. This is not a new concept of trading up. This is what we've seen in midways for years. Right, you win the smaller prize and you win the smaller prize, you get three smaller prizes.
Speaker 2:You can trade it for a larger prize in both midways and carnivals and at different places, and so you know, know it is certainly redemption, redemption, redemption has worked on that fundamental model, but once you remove the ticket from the facility as in this case, there is no redemption tickets it is now using the merch as the leveling up rather than the tickets yes, yeah, exactly that was my point about the midway right, the midways carnivals.
Speaker 1:You go to your county fair and you're playing and you win. You pop one balloon, you get a little thing. You pop another balloon, you get a little thing. But then if you get enough little things, you can then take all those together and trade them up for a larger one. So, anyway, I'm going to go back to you because this kid is moving.
Speaker 2:Yes, the audience that we're targeting is proving very noisy. Anyway, just to wind up now, if you need more information about this, we have both the Entertainment Social Arena and the Stinger Report out there, if you're not already subscribed. And again, if you have any questions about what I've been touching upon here, please drop me an email and we'll make the time to try and answer your questions within reason, but I will just throw this out to a very noisy. Brandon, is there anything else you want to touch on at the moment?
Speaker 1:No, I think we're all good. It's another great sound remote.
Speaker 2:I'll send over a good hit man for you later on. All right, perfect, all right. See you on the next one Thank you.
