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Entertainment Social Arena #3 - Eatertainment Feeds the Market
The sector's turbulence amid rising costs and shifting consumer preferences. The hospitality industry faces revenue pressures, with companies like Dave & Buster’s reported a 10.8% revenue drop and reevaluating remodel strategies, signaling a shift back to core “Eatertainment” offerings. Competitors such as Elev8 Fun and Pinstripes are expanding or struggling, with Pinstripes facing potential bankruptcy due to declining sales and liquidity issues. Meanwhile, global operators like Round 1 in Japan are diversifying into themed dining, and UK brands like Fayre Play and Archie’s Atomic are innovating with immersive fairground and entertainment venues. Major players like Topgolf are experiencing same-site sales declines but are exploring new entertainment formats, including mini-golf and arcade partnerships. The social entertainment segment remains attractive but volatile, with recent bankruptcies and strategic shifts highlighting the need for agility. Overall, the sector exhibits opportunities amid significant restructuring and innovation driven by evolving consumer demands.
This is the Entertainment Social Arena, issue Number 3, eatertainment Feeds the Market. By Kevin Williams, eatertainment Under Review some of the developments in the market and fallout from the recent Bar and Restaurant Expo and 2025 National Restaurant Association Show supplies a sobering perspective of the turbulent developments in the hospitality and social entertainment sector. The new Hospitality Market Monitor from CGA by NIQ and Alex Partners offered a report that painted a picture of difficulties for the pubs, restaurants and hotels market, impacted by new costs impacting their revenue. While the entertainment aspect of the market proved a growth area, niq's market report on the success of the new era of experience-led venues promoted the concept of the third space business. The report outlined that between 18 and 35-year-old consumers, 35% of those surveyed visited at least once a week some form of competitive socializing, one of the fastest-growing aspects of the entertainment landscape, next to festivals, sports stadiums and live performance. But while the sector grows, it is also seeing serious growing pains In a major development.
Speaker 1:An indicator of the changing conditions for the e-tertainment sector, dave Buster's reports its fourth quarter financials, which saw revenue of $534.5 million decreased 10.8% from the fourth quarter of fiscal 2023. Same-site sales decreased 9.4% compared to the same calendar period of fiscal 2023. The interim CEO and a statement saying while we are disappointed by our results in the fourth quarter, we are very encouraged by the clear opportunities and revealed the company was acting to unwind mistakes made In defining what they saw for the decline. Dave and Busters reported the company, under the previous management, had not properly tested prototypes on remodels, didn't prioritize stores to remodel and spend and went well beyond budget on many stores. The interim CEO confirmed when speaking to investors that Anit the company is re-evaluating its prototype and is re-evaluating which stores should be remodeled first, going on to say the company de-emphasized new games and so the company has not introduced many new games into its stores in over two years, which is a departure from its historical practice. This was a major admission of failings blamed on the previous management, even if these moves had been agreed by all the senior board members at the time. In further statements the term rollback was presented, leading to expectations that many of the new initiatives activated by the previous management would be reviewed and eventually removed. As observed, it feels like the corporation would be returning to basics of e-tertainment and that their new social bay and watch party menu offerings would be falling under extreme scrutiny. The company would go on to say they were implementing a back-to-basics towards driving flagging top-line sales.
Speaker 1:The departure of the CEO and certain executives from D&B in November was forced upon the board in part by the decline in sales, with other corporations in the hospitality sector also undergoing purges of C-suite. Executives felt not able to weather the current storm in declining revenue, with McDonald's in May replacing their CEO, as TGI Fridays announced a new senior executive. At the same time, entertainment experience operator Skyzone announced the replacement of their current CEO. It is expected in the hospitality and e-tertainment sector that senior executive restructuring will be accelerated towards facing the new economic headwinds, as they report to investors declining revenues. The possible competition to D&B includes the likes of Elev8Fun, who have been working hard in turning vacant department stores into indoor adventure parks that offer everything from laser tag and arcade games to go-karts and bowling. The company has two locations open in Tampa and Orlando, florida, and four more in the pipeline that it expects to open within 12 months. In a recent statement, the operation described themselves as a 2.0 version of Dave and Buster's, underlining the focus of their efforts in a tempestuous market.
Speaker 1:While D&B saw a decline in revenue, their leading competitors saw success. It was announced in Japan that the bowling and amusement chain Round 1 saw a consolidation of their results for the period ending March 2025, announcing net income increasing by 2% from the previous period. The effect of collaborating with their singers and anime content has led to strong bowling and karaoke guest attendance. Sales increased by 11% to 177 billion yen and operating profit increased 12% to 27 billion yen. This across their over 100 facilities in Japan and China. The operation has some 50 sites in North America and no details at this time on their same-site sales were available. Announced rollout of new Round 1 delicious restaurants, with the first site opening in a 19,300-square-foot facility in the now a retail space opening in West Hollywood, los Angeles. The Round 1 component will offer eight bespoke Japanese food units, seating for seven guests experiencing the best of the country's delicacies. Plans for North America to see four of these venues opening in the next 18 months, with a wider international expansion. This is far removed from the core sports entertainment roots of the operation, but is an example of what the management feels is a good diversification for the brand. Only time will tell if this is a workable model for their core skills.
Speaker 1:The difficulties that some chains still find in the e-tertainment landscape continue. Pinstripes announced last in March, that senior lender Oaktree Capital Management will take over as majority owner 85%. After declining sales, rising debt and growing liquidity issues, the company reported a net loss of $8.1 million and an operating loss of $3.2 million in the third quarter, Same-store sales down by 7.7%. The chain, currently operating 18 facilities, the Pinstripes model of Bistro Bowling and Boche seriously underestimates the hunger for entertainment from the new audience. This is the latest indicator of financial troubles for the operation, which saw layoffs and declining sales last year, after raising $70 million and merging with the special purpose acquisition company Banyan Acquisition Corp, eventually warning of its shares being delisted from the New York Stock Exchange, then followed by the majority ownership. How the Pinstripes operation planned to turn round their fortunes seemed to pivot not just on their branding and dining options, but also on the reality of the entertainment offering. The management forced to bite the bullet regarding emulating what their competitors were doing. But on June 17th it was revealed that the board had decided to prepare to file for bankruptcy protection Chapter 11, which would impact their venues in the chain, the operation stating to media that if they took this path, they hoped to keep their sights open during the court proceedings. This situation had been forced upon the operation following the delisting of their stock, collapse of store sales and operational losses. All this after a $7.5 million loan to fund operation in March, after last year's $70 million raise.
Speaker 1:The bowling industry has been embracing the social entertainment explosion. This was reflected in the recent International Bowl Expo 2025 gathering in the US. New boutique and social bowling venues opening are putting pressure on existing sites, which has seen a spate of refurbishment and new investment into existing chain operations while at the same time seeing difficult conditions. Spinners, the social entertainment chain, raised £4 million £5.41 million in investment from Gresham House Ventures to grow the brand. The operation has three facilities in the UK comprising duckpin bowling, electric darts and indoor clays, shooting and full F&B. This is one of many new investment rounds reported across the sector.
Speaker 1:While other chains look to grow business, the impact of possible high-profile bankruptcies and sales declines in the entertainment sector are bound to send shockwaves through investors and developers, this also coinciding with other operations that have seen challenging business conditions. With their plans, it was revealed that Hollywood Bowl shares fell 8% recently after posting its latest results for the six months to 31st March. The group said the recent spell of warm weather had dented its sails as Britons headed out into the sunshine, rather than All this seeing the operation suffer a short-term hit to its British operations between March and May. This came as Lane 7 announced plans for launching the 5pm Club, a national initiative to bring back after-work relaxation with bowling, drinks and fun. This initiative launched to drive after-work visitations to their venues across the country. This was supported by Lane 7 offering offering office group games, bowling and a drinks package from 5pm on weekdays.
Speaker 1:Lane 7 has been doubling down on its expansion with its new ML7, level X and Gutterball chains, but has also accelerated the pivot from pure boutique bowling to a stronger social entertainment vibe. This best illustrated by the latest in their over-20 facility chain with Lane 7 Newcastle, the second site in the city that, along with the slick darts, karaoke and increased amusement placement, has become the latest Lane 7 facility to install Playground, a technology-infused immersive floor system using the latest LED displays offering an active entertainment social experience Offering six different games for single and multiple players. This new social entertainment experience has been developed by Moment Factory and has already drawn crowds at Birmingham and Milton-Kane Lane 7 installations. We have reported on the rise of interactive LED floor game systems in the recent virtual arena feature. Topgolf is defined as an unrivaled, tech-enabled, modern golf and active lifestyle and has been held up as a poster boy of the recent explosion in entertainment concepts with a sports element.
Speaker 1:But the recent financial reporting also reflected the growing difficulties seen in the sector. Reporting also reflected the growing difficulties seen in the sector. A projected decline in same site sales was seen, which is expected to be in the range of down 7% to down 12% at Topgolf. In startling news, the reporting also revealed that corporate event business was down 13%, while small group business one or two guests occupying a bay had dropped by 12%, reflected across an 8% drop in venue traffic. The company is working to enhance the balance sheet and liquidity ahead of planned separation from Callaway, seeing the implementation of more flexible reservation pricing Overall. This is a symptom of the e-tertainment sector reflected by one of the leaders, though known to be troubled, as reflected in their separation plans from Callaway, with well-placed sources confirming plans being drawn up for this to take place in the fourth quarter of 2025. They are also symptomatic of a greater concern that single entertainment offering F&B chains have an inherent problem. The situation is seeing a sell-off of less profitable operations, with it announced that the company had sold their Jack Wolfskin product line and business to Chinese apparel and footwear brand Anta Sports Products for a base price of $290 million in cash.
Speaker 1:Only now has the remaining management at Topgolf been evaluating adding new entertainment offerings on top of their gamified golf shooting range, going against previous hostility to change. In a partnership with Greenspan Projects, a nine-hole mini-golf course was installed at the new Topgolf in Ridgeland, mississippi, while in a partnership with Bandai Namco Amusement Europe, the Topgolf Watford UK location saw the inclusion of an amusement area with some 23 video and redemption units branded the Topgolf Arcade. These partnerships allow the executives to drop in and evaluate the audience reaction to these experiments towards looking at if they can be fielded across the operation's over 100 facilities and reverse the spending decline At the time of going to the wire there. 100 facilities and reversed the spending decline At the time of going to the wire, there was no news regarding the fate of the Topgolf Swing Suite chain of over 100 golf sim lounges, a possible lifeline sorely neglected by previous management. This decline is not just with single entertainment venues, regarding chains in this sector and Velocity Esports, a gaming-themed e-tertainment concept that originally comprised locations in Newport, kentucky, sventi, duimila, metri Quadrati, las Vegas, nevada, 35,000 square feet, and. Schaumburg, illinois, 50,000 square feet, filed for Chapter 11 bankruptcy during May. The operation had seen the closure on the Schaumburg site in March after just under a year of operation, leaving only two venues remaining open. We would like to thank National Restaurant News for the initial reporting of this story.
Speaker 1:Regarding the history of the Velocity eSport operation, the first facility opened in Newport in 2022. Under the tagline Next Level Gaming, next Level Fun, it would go on to open the Las Vegas facility in 2022 and would take over the former GameWorks location at Town Square in the city that had opened 2014 and then closed in 2021. Regarding the Schaumburg site, part of the Woodfield Mall, this would open in 2024 and close the following year. Just under a year of operation, the Velocity esports operation comprised several XC Suite Gameworks executives. New ownership and investment for this operation is expected to be revealed soon.
Speaker 1:Social entertainment development and investment has seen the UK become a crucible for many new developments, such as the launch of Fair Play, which opened in Newcastle, uk, the facility offering a fairground game experience operation with darts, skee-ball, shooting gallery and other fair games, supported with a cocktail bar and snacks menu. Part of a three-site operation with ambitious rollout plans. The fairground approach has been seen before with the fair game concept, and the development of fair play will see continued competition. Fair game recently announced plans for their own role out of their interactive fairground experience in the US, having secured multi-million growth capital, the one and only venue opened in Canary Wharf during 2022 after securing a £5 million £6.76 million investment. Another example of raising to enter the market, archies Atomic opened at Trafford Palazzo, uk. This was after a £3 million $4.06 million investment raise, taking on a 24,000 square foot venue which includes a 5,000 square foot roller rink themed to reflect the brand. The site also includes a 270 square foot private gaming vault, along with dedicated party spaces. Founded in 2010, the brand now has nine sites across four cities, with Archie's Atomic being its first venture into entertainment. A new addition to the social entertainment roster was the news that Conductor had entered the facility business, launching their rival social brand with a new 12,000-square-foot venue developed for social, competitive entertainment comprising interactive mini-golf, ar-enhanced bowling, immersive escape rooms, augmented reality darts and F&B, expected to open before the end of the year.
Speaker 1:The need to grow brands once established in the States has also seen increased investment. The trailblazing tech-infused mini-golf facility chain, pootshack, revealed the opening in Westfield, old Orchard, chicago Illinois, of their 30,000-square-foot facility a previous Lord Taylor department store that closed in 2018, comprising several mini-golf courses, all gamified using the trackable proprietary platform Games, on average lasting 90 minutes, supported by food and beverage services. This is part of a 20-facility chain which has seen increased investment made in securing their roll-out plans. Regarding the team behind the Puttshack and Topgolf operations concept, it was revealed that they have been involved in a brand new project, securing a raise of $35 million for this concept, called Pool House, opening its first site in London. The concept is based on projection-mapped pool tables incorporating augmented gameplay. The company is betting heavily that they can capture lightning in a bottle again regarding their gamification of a traditional bar game.
