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Sound Off #89 - Gen Z abandons gaming, Genda & Hero Zone acquisitions, and more!
Sponsored by Intercard!
On this week's Sound Off with Kevin Williams we discuss how the location-based entertainment landscape is transforming as Gen Z abandons video games for social experiences, driving significant industry shifts and strategic acquisitions. Economic pressures, including tariffs and shipping challenges, force companies to adapt while major players like Genda expand globally and shopping malls embrace entertainment as anchors.
• 13% drop in video game sales among Gen Z, representing a shift toward location-based social entertainment
• Tariffs on Chinese imports after November 10th creating additional costs and supply chain challenges
• Six Flags closing Great America location in Santa Clara by end of 2026 season despite previous assurances
• Genda acquiring ~225 UK entertainment facilities for $25 million, expanding their global footprint
• Shopping malls increasingly incorporating entertainment venues as retail anchors
• Netflix accelerating Netflix House rollout with Philadelphia opening in November, followed by Dallas
• Significant consolidation in VR industry with HeroZone acquiring Spree Interactive
• F1 Box opening at Westfield Stratford City as minimalist racing simulator experience
• McWally's opening purpose-built entertainment facility in small North Carolina town
• Recurring revenue and competitions becoming essential strategy for location-based venues
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. All right, everyone, let's buckle up. Buckle up, all right? Well, welcome everybody to the latest sound off with kevin williams. This is number 89 for september 9th 2025. Kevin, how you doing, man?
Speaker 2:I'm doing fine as we zip into autumn. Oh my whoa.
Speaker 1:Yeah, well, slow down I wish it would feel a little bit more like autumn here. We don't really get autumn in Phoenix I'm sure you do in London and so it's just beautiful right now.
Speaker 2:Just finished raining. Hopefully it'll stop raining from my visit to the local pub.
Speaker 1:It's that time, isn't it that time, right? What are you going to do to change my mind? I'm a little bit nervous about this one.
Speaker 2:Yes, normally I allow Brandon to see what the meme is, but I wanted his honest opinion this time. Please don't go on vacation anymore.
Speaker 1:Yeah, yeah, man, it certainly felt that way. I came back from being in the Havasupai, you know the bottom of the Grand Canyon, and I had no cell phone for four days, nothing, and I came back to just a tirade of news. So I definitely missed a lot.
Speaker 2:We didn't miss anything you caused it.
Speaker 1:That is my fault because I was gone.
Speaker 2:Yes, yeah, I really think. I think we removed the pressure safety valve off the pressure cooker and as soon as the pressure built up, it exploded all over the place. But we will touch upon that because this is a crowded episode today.
Speaker 1:All right, awesome. Well, looking forward to get into it. Coming right after the break, we will dive right into the trends. 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:Well, straight into this high speed, and we've had some interesting data. It usually comes around August time that we get uh reportings from various surveys and corporations that monitor this type of thing, and we are seeing a 13 drop in video game sales in the gen z sector. And it's interesting because gen z is the audience that we're fighting for to acquire in the location-based and social entertainment market. So I think that the video game industry is going to work out quite soon where some of that percentage has disappeared to. Just for those that are listening to this presentation, I have the diagram up showing the percentage of where Gen Z fits into the US population. It's at 24%, quite a large percentage of the disposable income sector there.
Speaker 2:The second largest is a toss-up between the baby boomers and the millennials Let them fight it out and of course, the silent generation is moving on to play games in another realm. But anyway, it is interesting to see that we are actually visibly impacting the video game sector, the video game sector. That could do no wrong. Also in other news, of course, is that the impacts of the tariffs have now started to be felt. It was inevitable and in the video game side we have seen the impact that Sony has decided not to eat the additional money that they're going to be forced to take on for importing their console into the market, and that they're going to be putting their prices up.
Speaker 1:Yeah, we saw the same thing happening, or at least threatened to happen, with the Nintendo Switch 2. They've not confirmed that it's going to happen yet. They're still holding off on it. But I wouldn't be surprised if we see it actually begin to raise their prices as well, especially if PlayStation is doing it.
Speaker 2:I think Nintendo has an announcement to make about its restructuring of its online service and I wouldn't be surprised if subscriptions change their personal opinion We've already talked about in the previous SoundOff the McDonald's and the Burger Kings being at the bottom of the popularity for the service menu business. They were seeing some pounding from their stock being dropped as people were putting their monies into the longer stay menu service environment. Longer stay menu service environment. But also, it would seem, if you peel back the curtain, you would have also found out that McDonald's and Burger King were suffering a dwindling audience.
Speaker 2:They'd actually seen a downturn in audience. I wasn't aware of that, but it was made very aware when McDonald's decided to throw the lighted match into the room full of gasoline by starting a food war. They have discounted their combo meals and they have jumpstarted a massive argument amongst all of the fast food venues, as they now either scrabble to compete or to change their pricing accordingly to compete. So McDonald's, which is usually used as a gold standard for the pricing model, has decided to start a thumb war.
Speaker 1:I'm not sure that we need another race to the bottom the fast food industry, especially here in the US. I mean, put aside health benefits or not benefits, but some of the health impacts, because now this food is cheaper and now you can buy more of it and now you can eat more of it and everything else. This is not necessarily the direction we want to see things going.
Speaker 2:I had a fast food recently for the first time in a long time and, yes, I wholeheartedly agree that we don't need the food to come any cheaper.
Speaker 2:And yes, I wholeheartedly agree that we don't need the food to come any cheaper. The impact of the tariffs has come to our shores. In the industry, I was informed by a number of companies that they're seeing individuals trying to make large purchases of Chinese amusement equipment before November the 10th, when the tariff impacts will be hit, only for me to have to explain to these people that these products will not turn up in time and that they will be hit with the tariff extra payment as soon as they receive them from their port of shipping. It is sad to see those type of schoolboy errors being made in trying to cut corners. But I am also informed from other sources that you know we're seeing an additional charge of about $200 being put on containers coming from China. So I can understand that it's China containers coming from China. So I can understand that's China, but predominantly from China, that I can see why some people are going for desperate means to try and avoid that.
Speaker 1:Yeah, this will be interesting. I think we will see a handful of empty booths at IAAPA Expo in Orlando, certainly, where they decided it didn't make sense to ship out some other stuff and they just vacated their booths instead, which is always disappointing for the vendors who were on waiting lists.
Speaker 2:That could have been in those spots as well, and it just creates a little bit of chaos and uncertainty for everybody involved, and it's something that we know is happening, something that we have prior involvement with, and I hope IALPA has put a task force in place to address this situation and to help its members and also to help its exhibitors. I look forward to seeing that task force in action in November. And then the final of the impacts. No, it isn't the final, it's just the last in this particular coverage. Well, we saw the Domenis removed, or the Domenis. Apologies for my crap.
Speaker 1:Domenis.
Speaker 2:Domenis yes, so anything under $80 that was posted from a selection of now 26, at the time of writing it was 25, I'm now told it is 26 countries have decided to stop shipping. So if you were using this process to get your merch or your spare parts or your advertising material, or even your business cards delivered to you, then it's not going to be turning up unless you make special arrangements. This is going to have a considerable impact across all industries, and especially ours.
Speaker 1:Oh gosh, yeah, I mean all industries, especially, and even just consumers, who've been getting small shipments for years now because of the de minimis exception, exactly. And this is, yeah, the chaos involved and the difficulties of just tracking every single one of these. That's why they've decided to suspend delivery of services instead of just trying to try to track everything, because they can't.
Speaker 2:And it will be interesting to see how this is spun as positive. Anyway, moving on, we talk about the biz away from the economy, and we touched upon this in the open and shut. We had charted that Six Flags had claimed that they weren't going to be making any more closings, but they had some financial numbers that kind of underlined that they have seen a downturn in their attendance and they can't blame just the weather. It is a serious situation that they've experienced, and so they are cutting their cloth. They're also receiving a lot of complaints from people about how long it has taken them to merge the two operations together. So I think they're going for some red meat to the investors to show that they're going to be proactive rather than reactive to the investors to show that they're going to be proactive rather than reactive. But sadly, the Californian Great American location in Santa Clara is closing down at the end of its 2027 season, or at the end of the 2026 season, going into 2027.
Speaker 1:Yeah, and doing a little bit more research between the time that we recorded open and shut and here it looks like the land was actually sold by the underlying land was sold to a different company in 2022 and you know, a term left on the lease and oh just, there are logistics and an industrial real estate company and they plan to redevelop the land.
Speaker 1:So it does sound like this will not be sold to some other buyer to then go and take it and make it into an amusement park again, but instead will be raised to the ground and redeveloped into something else logistics or industrial related.
Speaker 2:To be blunt, I tried to keep it open during the opening shot that it could be any of these, but, to be honest, who would really want to operate this facility next door, well, within telescope vision of the bigger park? I know you have to go across the bridge to get to it, but I can see the benefits of this land being utilized, hopefully for affordable housing. Moving on and our friends at lucky strike, through their numbers, uh, into the mix and we could see positivity spun large, with revenue up by six percent and we've taken on these new facilities. In july and june we saw great increases in our business and then you had to dig a little bit and then you came to the same store. Sales leading up to that period had seen a 4.1% decline in revenue, which kind of reveals a trend that we'd seen across entertainment facilities.
Speaker 2:Seen across entertainment facilities and a number of the Lucky Strike Bowlerama locations are booze, bar snacks and bowling, and so you can kind of see that they would have been impacted by all of this. They're making clear statements of serious doubling down in investments. They have 55 facilities in their operation currently and they're going to be expanding to 100 facilities by the end of next year. That said, in the announcement they said that they'd made acquisitions or were in the process of making acquisitions for another 54 facilities, and my maths may be very bad, but I think that's slightly more than 100 facilities they'll end up with. But again, I expect some changes in numbers and even maybe an increase in the number of facilities they will actually end up acquiring.
Speaker 1:Yeah, I mean, look, this is not surprising. I mean, they had this issue with Bolero when they were, when they were branded as Bolero, before they rebranded everything to Lucky Strike, right? So this is, you know, the same issue. They see the same store venue, the same store sales decline year over year. The only way they continue to show growth as a corporation is by acquiring new venues and adding that to their top line revenue. So, yes, obviously you keep acquiring or you keep building, and then that's how you show your top line revenue growth. They still have a fundamental operational and value proposition issue and this is why they continue to decline in their same store sales. We see this in other brands as well that we've talked about on SoundOff and in others, and Lucky Strike has still not figured out how to operate their venues in a way that is both profitable but also is growing in revenue.
Speaker 2:And it was explained to me recently, speaking to corporates, the C-suite brigade, that it takes a change in management structure and it takes a fundamental change in management perception to be able to look at your bottom line offering and change it where really the management structures that are in place at most of the large entertainment operations, as well as the FEC operations, are for acquisition and growth. They're not for navel-gazing and redeveloping their concept and at some point in time the board of directors will understand that they need to go back to what their offering is and there will be management changes and then a new group of individuals with that mindset will be parachuted in. But at the moment, while the sun is out, acquire, acquire, acquire. Moving on, and it's that gender moment yeah, who would have thought it? Brandon goes on vacation and one of the largest developments from Genda takes place, and I had to sit here and chew my tongue waiting for this section. Anyway, for all of you throwing stuff at your screens or throwing your mobile phones into the bin, yes, it's that Genda moment.
Speaker 2:And Genda has finally I can talk about it finally made their big move into Europe and they decided to do that by acquiring 200 entertainment facilities in the UK. They partnered with a company that I have followed since they merged into the operation known as Inspired Entertainment. I knew them as Inspired Gaming previously and if you read your Stinger report covering this acquisition, you'll go into a little bit the history of where inspired came from. They actually came from the amusement industry and pivoted into the gaming and gambling industry while retaining as a hangover their service station motorway freeway service station business, as well as some leisure entertainment facilities under the PlayNation brand. Anyway, those 225 facilities odd are going to be now under the Genda Europe operation.
Speaker 2:I expect to hear a rebranding of the whole Genda in Europe facility operation and this will be combined with their Geico crane business. And they're also in talks with Inspired to have some of their adult gaming what would be called touch gaming terminal systems incorporated into their mix with Genda branding some of the IP that they have. So this is a fundamental partnership on multiple levels. It caught the whole of the traditional amusement industry off balance. I have never had so many people banging at my doors asking questions about who the hell is this gender company?
Speaker 2:uh and I was very yeah, and I was very rude to them. I said watch your stinger report, read your stinger reports and watch your sound ops we've been talking about this for how long?
Speaker 2:uh, but no one likes a smart ass. So the issue is here this is a major move, this is gender now with strong presence north now with a strong presence in North America, a strong presence in Europe. Or should we say the launch head of UK towards a European positioning. Watch this space for an announcement with a European, central European Corporation or Mainland European Corporation, their business in Japan and China, and we have some more announcements coming in the next couple of months regarding what they're doing in Japan, which, again, I'm sure will blow our socks off.
Speaker 1:Yeah, this is also really interesting, just given the economics behind this. So this is, let's say it's roughly 200 locations At least the research I've done here is about 11,000 amusement and gaming machines across these locations roughly, and for really what is only 18.6 million pounds, right, so 25 million US. I mean this is an amazing get for.
Speaker 2:Genda 225, facilities for 25 million.
Speaker 1:It's remarkable to me, right? And so this is really. I don't know how distressed some of these locations are, if Inspired was just overburdened and needed to get out from under them, but Genda certainly came away, the winner here, for sure.
Speaker 2:Pardon my French, but they were the redheaded stepchild of the Inspired Entertainment Corporation. They are a slick, very focused. They are one of the first companies to get into virtual gaming, which is you have a game engine running a randomizer. Get into virtual gaming, which is you have a game engine running a randomizer and you bet on what the digital basketball player or dog or horse is going to go across the line first. That is literally, for me, the definition of insanity. But it is a very strong business, uh, for them, and their entertainment facility motorway service business was, you know, a bottom line rider left over and I use the phrase offloaded uh, fully understanding how much they uh, they treated, uh, their, their operation, the play nation, if the brand keeps, I'm not sure, but I'm sure the team that have been running these facilities will be celebrating that now they're going to be able to stretch their legs with serious investment, because I can't believe that they're not going to put some money in after getting a steal like this Moving on, and it just doesn't end.
Speaker 2:We have one of the major department store operations in the UK, fraser Group. They also have operations in North America and internationally, but they are known for the Sports Direct and House of Fraser department store and retail store chains and they've decided they're getting into the competitive, socializing social entertainment business. So they take a minority stake in we Do Play. Now, where do you know we Do Play from. Well, they own the Flipout IP or franchise property. They also do Putt-Putt Social Rumble Rooms and Activate. They also do Putt-Putt Social Rumble Rooms and Activate. They are the company that has the Activate franchise in the UK. They originally said that they were going to be opening 30 facilities up in the UK in the next two years. We actually visited their first opening at the o2 uh center, their first of the activates brought to the uk. Well, now with uh fraser group, uh investment, they've now increased that number to 40 facilities of active activate will be opened in the uk. I I look forward to seeing how Fraser Group will be leveraging its unique mall retail links to get these venues into these retail spaces.
Speaker 2:And again, I go into a little bit more detail in the coming entertainment social arena feature, entertainment social arena feature. We do a special one on retail attainment and I actually touch upon how this Fraser Group acquisition or minor acquisition could help the locating of venues to put these facilities Moving on and our friends at Super park uh, the finnish active entertainment group. They have about 26 facilities. They've now decided that they're going to be investing heavily into their operation. They're looking at new openings in the uk so they're going to be competing with activate uh.
Speaker 2:They're also rolling out in the uE. That's going to be interesting. They've already opened a facility in India and I'm led to believe that they already opened a super park in Saudi Arabia. I think either about to or have done that. I'm sorry for that, but the interesting thing for me is that they are defining their investment and their rollout as part of their increased investment to focus on competitive socializing their venues. Now to go from an active entertainment facility to calling yourself a social entertainment or competitive social venue means either you're redefining what competitive socializing means or you'd better start adding some kitchens and bars to your active entertainment facilities. We will have to wait and see if it was lost in translation.
Speaker 1:Yeah, I mean otherwise it's just an active play type location or something like that. I mean, yeah, I totally agree with you, there's the need to have F&B involved here.
Speaker 2:Some people want to hijack competitive socializing because it's a trending term in the investment community to mean whatever they say it is. But I think that our Finnish friends may have come at it from a different direction. And then we now have a group of ex-department stores being turned into major entertainment venues. You see the trend here. Part of the reason in compiling the retail attainment feature for the entertainment social arena, I really got into the weeds and came across some interesting stories, such as our friends at Malibu Jacks who are moving into a Kentucky facility. They're dropping. They get a lovely tax rebate for incentive from the local council or government there for about two mil and they're going to be plowing about 10 to 15 mil into the development of this pre-existing shopping mall. They're working with TS Entertainment to develop this.
Speaker 2:This is 109,000 square facility. So you know no slouch. It's got a big karting, it's got a big laser tag, it's got 12 lanes of bowling, it's got 18 holes of mini golf, it's going to even have a spinning coaster inside here, bumper cars, soft play, active entertainment attractions and over 100 arcade machines. So Malibu Jacks can rightly call this one of their flagship facilities and Kentucky is an interesting place to open a flagship it is definitely interesting.
Speaker 1:I'm not sure, did they really say they're going to call it their flagship? Because some of the malibu jacks locations are definitely larger than this one? Oh, kentucky flagship, thank you okay. Um, yeah, because what they typically do is they. They will often come in and acquire other facilities and then convert them into malibu jacks as well as then fill out their own uh, you know, build their own, like they're obviously doing here. But uh, yeah, this is a five-star attractions brand and they're taking that Malibu Jacks and really trying to leverage it across other states as well.
Speaker 2:Yes, I think this is the beginning of a major rollout by Malibu Jacks to cut their path in this crowded market. And then we have NRG Adventure Park. Now I have problems with this. Whenever I'm researching NRG, when you're reading their information, the press releases or their corporate information, it always feels like this is a facility operation or chain that has multiple sites. A facility operation or chain that has multiple sites. They only have one site but they have aspirations in the next couple of months to be opening at least another seven facilities and their full aspiration is to have about 10 to 15 facilities open by the end of 2026. The end of 2026. Anyway, this is an active play facility that will have some amusement For me.
Speaker 2:52,000 Square is a mid-range active entertainment facility. We have seen larger trampoline sites. We have seen smaller. Obviously it is a brand new chain brand. So they have to prove that their business model is effective for the market they're going for and they've decided to go into a Cons previous department store. I'm not familiar with the Cons department store. Maybe I don't hang around the right places in San Antonio.
Speaker 1:Yes, cons have been around for a while. They were a you know kind of like home furniture homes, that type of feel to it.
Speaker 2:I've driven past it a thousand times and didn't recognize it. Okay, I understand. Interesting for me going into Texas, especially San Antonio. It is not an empty market. So let's hope that they've really nailed down their business model and their aspirations for grandeur are well worth it. Wally's, now we're going to take an interesting spin here. Mcwally's McWally's sorry, I keep on calling it Wally's is a slang term. Here in England you call a person of my mental attributes a wall-e at times. So when I mix up 500 for 5, I was acting a bit of a wall-e. But anyway, mcwall-e's from the Scottish brand of wall-e's.
Speaker 2:I was given some transparency to the operational process and I actually treated the information I was given as if it was a consultancy project of trying to work out what they decided to build against their competition, against what they've actually done. So three years ago this process started. This is a purpose-built facility from the architectural drawings that you're looking at and it is 37,000 square. So it's not a massive facility, but it is a large facility for the neck of the woods. That is, 60 arcade machines, it has bowling, 20 lanes of bowling, two lanes in VIP areas. So they've done their homework. They've nailed down what they're trying to offer their catchment, their locality. They've stuck a pin at where their facility is and they've drawn a line around and they say there's no one offering laser tag, bowling and arcade machines at F&B at this price point. They're going to be offering 100 jobs for the locality, so they get the pat on the back from the local government as an incentive. This time it's only 250,000, but nothing to sneeze at, obviously. And then we look at their catchment.
Speaker 2:Now I use a tool, part of our database, of looking at where a facility is and what entertainment facilities of a similar stripe want to go into this. We usually do this at the beginning of the process when someone comes to you and says, hey, we want to build a facility. Um, you know we go. Well, you're mad because you've got all of these facilities or entertainment sites, uh, dotted around you. But if you look through, uh, the document, you can kind of see that they are one of the few that is offering bowling and they are also one of the few that's offering laser tag. And where the dots meet up they're at the bottom of Rally, away from the crowd, and that's fantastic.
Speaker 2:I would have said that Hooky would have been their biggest surprise one of the latest openings in Raleigh and kind of close, well-presented. It is a very target-rich environment. If you look at that. If you want to enter into that market, you're going to have to really work hard to make sure that your unique brand is going to survive rather than opening up a chain, and you're going to have to cross your fingers that Dave Buster's or one of the other large corporations doesn't decide to open up next. Oh dear, oh well, we wake up to the news that our friends at PIN Mechanicals will be opening up one of their facilities. Oh, yes, they're including bowling, classic arcade machines no laser tag though. Uh, classic arcade machines uh, no laser tag though. So, and they are just on the gdp of the local populace there.
Speaker 2:We would have seen reasons why there's so many entertainment facilities of this kind. You would argue that rally is not a million miles away from an airport and that normally people would uh, with this type of disposable income would jump on a plane and go to regional or jump in a car and go to regional. But there aren't that many North Carolina major regional theme parks. There are some, but this particular catchment is out of that circle and so they weren't included in this, but at the end of the day, it is interesting to see how a brand new operator this is a family that has decided to break in to the location-based entertainment market have jumped into a very, very crowded water but hope to survive this, and we can use this as the model to chart how they survive going forward.
Speaker 1:Yeah, and I'll add a little bit more, maybe context or some additional thoughts here. If you go back to the previous slide you have all of these other locations are either in Raleigh or in Cary, north Carolina, and, to be clear, there's actually an altitude trampoline park opening up in Cary, north Carolina here in just a few weeks. I know that because IntelliPlay is going into that location and so that's another trampoline park being added into the Cary North Carolina region. But both Cary and Raleigh are in two, about 30 minutes away from the Fuquay, the Fuquay-Varina area of North Carolina, so they're both 30-minute drives and so my assumption here is that if people so far, if they've wanted to do anything in entertainment, they've loaded up their kids in the car and they've driven them from the Fuquay-Varina suburbs and driven them into either Raleigh or Cary to go and to do one of these things.
Speaker 1:There is no other entertainment, really, at least any significant entertainment in this actual township. The issue is that the township itself is only 46,000 people strong and that is very few people to support a facility of this size, even if it is something that is new and now people no longer have to drive necessarily to one of these other locations, they can come here. The only, I think, silver lining here for me is that the population has grown from 34,000 at the 2020 census to what is estimated to be around 46,000 now, and so it's a 35% population growth over the course of what's the ABC on that?
Speaker 2:What's that? Do you have the ABC on that? What's that? Do you have the ABC on that?
Speaker 1:The spend per cap, I don't have the details just right from what I've been able to do, the research here on this session but it is showing at least a 35% growth, which tells me that people are moving from the Raleigh, cary regions to some maybe a little bit more quainter town and so hopefully they're able to draft off of a little bit of that. But this does seem to be. You always get nervous when a facility of this size and of this quality and of this build goes into a population area that has a very limited population to draw from.
Speaker 2:Yeah, if you're depending on drawing from the other areas to come down, literally come down to you. They won't.
Speaker 1:It's zero reason to go down to McWally's when they could go to hooky or they could go to Frankie's or they could go to any of these others in the Raleigh or Gary or soon to go to pin yeah or soon to go to D and B.
Speaker 2:I wouldn't be surprised that the franchise agent at Dave Buster's ears are burning at this moment in time. He's got this urge to type in North Carolina into his search engine. No, I hope, I really do hope. I don't think I've had a chance to meet the family behind McWally's at one of my conferences, but I hope that they have a secret in their back pocket about why they've gone for such a high quality spend in such an area. Because, again, purpose-built facility, not just utilizing one of the available brownfield sites but going in purpose-built facility to a specific style and then rolling it out. But we will wait and see. We'll definitely we'll try and stick a pin in this and come back to this in 12 months' time to see the progress has been. We'll have visited hopefully by then.
Speaker 2:One of the things that I had on my radar and was surprised by was the announcement that our friends at Playground have expanded. They have grown their facility. So, along with their social entertainment, competitive play environment with cocktails, they have taken a ballroom in the Luxor Hotel adjacent to them and turned that into a new environment which contains a DuckDuckBoom. Duckduckboom is an inflatable rotational game system. You know the type, the ninja, where you have to jump to go over the rotating unit in the middle. This is an inflatable environment. It also has some other inflatable elements inside this ballroom space. You know it is playing for the what we would call the stag party or the Gen Xers on the lash time. So I hope everything is wipeable in that environment and I hope they've got the right fragrance settings to get around the smell of heated inflatable neoprene relatable neoprene.
Speaker 1:Yeah, I mean, I gave. I gave a pretty significant thoughts on the open and shut in the last show a couple of days ago. So I'll probably just say, if you want to hear any of my feedback on on this, you go listen to the open and shut because, yeah, we don't need to reiterate my lack of excitement or enthusiasm around this add on.
Speaker 2:When we're in Vegas, we're doing it, no excuse.
Speaker 1:Well, we don't have to have an excuse. It's $12 and we get a free cocktail and $5 off the Play Playground thing. So it's basically free.
Speaker 2:I have a very low tolerance for poor cocktails. While you were away, the news broke that we're going to see a faster than expected rollout for Netflix house, as we've already covered in previous sound offs, infinite term, the, the Dallas facility and the Philadelphia sorry, I've got Chicago down there, my apologies, it should be Dallas and Philadelphia. Maybe I'm getting ahead of myself a little bit. There have announced the Philadelphia facility opens first in November, end of then, followed a month later by the Dallas facility and then next year. Of course, we have the Las Vegas facility that is scheduled for, I think, q3 2026. And other venues I'm sure will follow.
Speaker 1:I'm sure they will do fast rollouts, but I hope that you take a pause and see what works in some of these early locations before moving too quickly into others. I mean, I think four open in a year should be already. That's moving really quickly, but that should be more than enough time to see what works and what doesn't and what attractions they should add to future houses. But four does seem like a lot in one year. So I really do hope that they take a pause and take a little bit of a breath. That being said, not surprising that they're trying to rush an opening in november, given the fact that you've got the final season of stranger things coming out and they absolutely want to be able to draft off of that popularity yeah, which is to be understandable if they can ride the coattails of their properties.
Speaker 2:But why the hell are they developing this if it isn't to be a transmedia operation and feed off of it in all directions possible merch, entertainment and downloads? I agree. I just hope the mindset of the C-suite is less on opening up quickly and more about creating a foundation to build upon. It would be really uncomfortable to try and relive the LBE apocalypse that we suffered in the 90s due to acceleration rather than entertainment. But again, I hope SANA minds are in play at the moment, talking of the problems of opening up new facilities.
Speaker 2:Lumos, we've been waiting and waiting and waiting on this one. They have talked a very big game. They have promised that they're going to be rolling out multiples of this mule mixed use leisure entertainment, which comprises a bit of everything bowling, laser tag, billiards. It's got food dining in it. It's going to have vr attractions in it. They pushed it very heavily. Um, it was meant to have opened in august in the sweet spots. They've now pushed that to october. It happens to us all when we're trying to roll out a facility something goes wrong. A delivery doesn't turn up, a tariff is added to a bill and suddenly you have to push forward into October. Let's hope it doesn't move further than that.
Speaker 1:Yeah, I'm nervous about this facility in general. This Lumos facility feels very much like Albatross in its level of development, like just overdevelopment. I'll say so. We'll have to wait and see how it does once it gets open.
Speaker 2:Uh, if it gets open you don't have to cover everything in gold to make it good. Um, you know it is essential to, you know, feel the quality is not really something that people are doing when they're at an entertainment facility. They're there to have an experience. You have the the honor of their, their spare time, their free time, their disposable income to relax and enjoy. Now, if you make a fantastic palace to uh, to enjoy, great. But you also have to run this as a business and the last thing we wanted to do is to see, you know, overbuilt facilities popping up all over the place that then plow into the ground, unable to sustain their business. Moving on, and we're being attacked now by recurring revenue and repeat visitation.
Speaker 2:Certain companies are working out that they need to get people to come back again and again to their facilities.
Speaker 2:They are not a one, and people to come back again and again to their facilities. They are not a one-and-done industry, as many companies learn, to their chagrin, thinking that they're a theme park when really they're in the location-based entertainment business. And part of causing extended stay in this business is by competition. Competition gives you three bites of the cherries. It brings back players to play again and improve their scores. It brings audiences to watch the competition the families, the friends, those that are interested and it also, if you're smart, generates revenue through the extra food, the sponsorship deals you do and the promotions that you do for your facility indirectly through the competitions. So our friends across the K1 international empire of karting venues have started their competition, their world championship, with 29,000 up for grabs nothing to cry about there and it's, you know, over 105 facilities. It's going to be interesting competition. I wonder if they've missed a trick here and they're not going to stream the competitions so we can watch this, but again, early days at this point in the promotion.
Speaker 1:This is good to see. I'm surprised it actually hasn't happened sooner. They've had hundreds of well, not hundreds but they've had tens and tens of facilities for many, many years. It's one of the largest carting franchises that exists, and so I'm glad to see that they're actually doing something here. This should be really interesting and should drive additional traffic and interest into the brand.
Speaker 2:And when they're in a high competition area where there's other areas running karting systems, this will make them stand out. For now anyway, Our friends at Activate we've been talking a lot about them today. Well, they have their global league, their competition, international competition across their facilities. I forget how many facilities they have now. Must be in the 60s. The magic box tell us, brandon.
Speaker 1:What does the chat say? There are over 40 locations that Activate currently has 40.
Speaker 2:So they'll soon, next year, with the additional UK facilities. That's quite a haul, but anyway they are running a global league through their mission room experiences. I don't know how much is up for grabs, but I'm sure they're going to be pushing that very heavily Again with social media capture as well as normal promotion, because the one thing that you have to remember that if you're going to be running a competition you've got to capture a lot of those people competing so you can share that across their social medias, build up the interest in the competition. Anyway, rushing through the tech trends, our friends at Disney have decided to bin the 3D on their Ratatouille experience that's going into Paris. This is unusual.
Speaker 2:You're announcing a year before you open an attraction that you're taking something away, kind of tells you that they've been having problems with the 3D capability. I may sound a little bitter about this because, as an ex-imagineer, I used to work on the immersive attraction side as well as the 3D side. It is a very difficult and tricky technology to master and, by the sounds of it, the current incumbents in Imagineering have found it incredibly difficult. It the current incumbents in Imagineering, found it incredibly difficult. Even so, much a black eye is that we're already celebrating this year the anniversary of the Spider-Man attraction that actually set the gold standard for digital 3D motion ride experiences in the sector. But again it shows that all technology doesn't glisten.
Speaker 1:Yeah, well, this is one of my favorite attractions, by the way.
Speaker 2:It is a beautiful attraction.
Speaker 1:It's a beautiful, beautiful attraction. The storyline is great as well, and I think it isn't surprising that they're removing the 3D projection capabilities only because it is just one more thing to deal with when you're bringing guests on and off a ride vehicle and you know it's just, it slows things down and makes things a little bit confusing, and if you're not wearing it, then if you can't, or for whatever reason you can't wear it or it's not seated correctly, then your experience is diminished as well. So you know, it's not surprising, but I do think that we'll continue to see this trend. Actually.
Speaker 2:We will continue to see this trend. As you said, it's one less thing. It's also one less projector. That's part of the process, and that projector can now be pushed up in brightness because of the issues of creating 3D imagery. The big question is will Disney bite the bullet and bow to customer complaint and remove the 3D from the Epcot Disney World iteration of the system? I could spend hours talking about this, but we won't. We have the changing of the guard.
Speaker 2:I have touched upon this many times that we would be seeing this at this point that the VR industry in the location-based entertainment sector would start to M&A, merger and acquisition calm down. I am not saying that VR is going to go away. I'm now going to say that the people that have products that make money will blossom and the people that have products that are still waiting to generate that important ROI will either be acquired or move on to other things. Soundoff announced that they were putting money into developing a mixed reality, non-vr ball throwing and hand gesture tracking experience. Friends at HeroZone, turning HeroZone into one of the largest free roaming arena amusement employers in our industry. Over 500 venue installations will fall under their operation and, of course, we will see the Spree interactive VR enclosures in the market, now pivoting over to becoming HeroZones.
Speaker 1:This one is really surprising to me just the fact that it was HeroZone making the acquisition. Not that Spree was looking to divest their VR elements that actually is less surprising but the fact that it was HeroZone that actually made the acquisition. So congratulations to HeroZone for that. I hope that you can continue to see growth. I really like those guys over there and excited to see where they go with this.
Speaker 2:I think we're about to hear many things about HeroZone. They have been going through some restructuring. I can't go into too much detail. I used to do some consultancy for them. I'm not involved at the moment, but they've been kind enough to share a little bit of information about what's going on. We've already reported on their Terminator Salvation IP, which will be rolling across their facilities.
Speaker 2:I used an analogy and I hope our friends at Hollagate will take this the right way. But where Holligate was seen for a period of time as the, you know, the gold standard of the tethered vr uh sector, I think we're going to be seeing hero zone steal that mantle for the arena side. But again, things can change. Things can change another arena vr system that has made some announcements our friends uh phenomena, phenomena VR, with their VR esports arena, well-known for their big esports arena installations, and they've been rolling out their arena. They've thrown their hat into the ring some time ago with their unique take on a turnkey solution for arena VR and they've now produced three versions of this system the pro system, all bells and whistles. The light version without all of the enclosure, and they also do a software only version for facilities to upgrade. But again, this is an interesting one to keep an eye on.
Speaker 2:Moving on, and uh, typhonia, uh, the japanese facility that received funding at the same time as the void from disney. I have to be very careful with this. The funding came from the incubator uh group that disney has, a uh, a kind of investment group that puts money into projects that they think, if they receive certain amounts of support and investment, would grow. They saw that in the Void, they saw that in Typhoonio at the point of when VR was hot back in 2017 and 2018. Well, we know what happened to the Void.
Speaker 2:Typhonia has succeeded or continued to operate in the Japanese market. They offer a very unique two-player semi-free roaming experience. They were one of the first to actually do this. They aim to the couples and group mentality, building very much off the Japanese entertainment experience. And they've now bit the bullet and they've upgraded their, their Tokyo facility, to now include eight player free roaming experiences rather than the two player adventures that they were doing.
Speaker 2:And you know I am from the videos that we have available to us of the experience I'm still a little bit cold to this, but maybe that's my cold heart speaking there and I'll get warmed up as soon as I get into a group of seven other people travelling through a fairy-filled environment, he said, looking desperately for a gin and tonic. A fairy-filled environment, he said looking desperately for a gin and tonic. The experience seems to be aimed at a certain audience and we wish them the best of luck riding the new phase of VR adoption, which is shared reality, where you're not doing it on your own, you're not doing it in groups of twos or threes or fours, but you're up to the eights now people within the virtual environment. The choppiness is due to the online video and not the game experience.
Speaker 1:Yeah, yeah, I mean it's whatever your streaming bandwidth is. It's obviously going to be a little bit choppier for you, but yeah, I mean, I'm not a massive fan of this new attraction or this new version of what they've got. A lot of other things that they do have are really impressive, and this one seems to be just to be. Maybe they rushed it, Maybe they were trying to again, like you said, target a different audience compared to some of the other experiences that they do have.
Speaker 2:There is already a shared reality experience that we've talked about on Open and Shut that has just recently opened in Tokyo. That has about 24 people traversing through that experience. So I'm sure that they are mindful that they have to stay relevant, as all VR entertainment facilities have to do. You can't sit on your laurels for five, six, seven, eight years without updates coming year. You've touched upon this in one of the LBX show reports, so I'll just add my 10 cents. It is great to see Creative Works and VeloMotion work together to come up with a package that now takes the successful Vallo Arena concept and scale it down so more companies and venues can now have it fit their venue requirements. I'm looking forward to seeing this when I'm at Amusement 360 in a couple of days' time and we can talk maybe about what it's like in the flesh after that event. And we can talk maybe about what it's like in the flesh after that event.
Speaker 2:Moving on very quickly and while some people were enjoying fresh air and wandering up hills, I was stuck in shopping malls having to evaluate gin and tonic no, no, evaluate new facilities. And I went to westfields. Some of you will remember I went to the other westfields in london, in white city. Uh, well, at the other end of the metropolis there is white westfields, stratford city. Um, it is one of the larger and it's claimed to be one of the most popular shopping malls in the uk with about 54 million visitors annually. It was crowded when I was there doing business even during the holidays, um, and it has, as the Westfield operation seems to be doing, as many shopping mall operations seem to be doing, really embraced competitive, socializing and active entertainment as anchors. So this facility kind of mirrors what we saw at the White City location. Go back, I forget which number sound off it was, but anyway, they have a gravity max there, vast facility, you know, 85,000 square, claiming to be London's largest urban theme park. I take umbrage with that. I do a report in the coming entertainment social arena that looks into this particular facility or this shopping mall in general and go into much more detail than I'm going into now.
Speaker 2:Interesting thing about this Gravity Max it is a pure mule mixed-use leisure entertainment facility. It has the karting, it has the mini golf, it has the arcadesades, it has the virtual reality attractions, it has the xr attractions and it also has its own unique um bar which is, uh, themed or licensed. Uh, with the heineken brand. It has the ar darts, it has the bowling, it has the beer pong. It has the beer pong, it has the karaoke. Funny enough, the karaoke is also licensed through a television series called the Voice. The virtual reality was very telling here, compared to the other venues that I've been to, shopping malls that have entertainment mix, they usually have quite a large mix of virtual reality.
Speaker 2:As you'll remember, the White City facility had opened a sandbox vr with their talker social and they also had the dive lab here. Uh, at the stratford facility, this was the only vr that was in the facility and, to be blunt, the hollow gate attraction wasn't being used. It was dead empty. A member of staff was desperately trying to attract people to try it out. Only one of the four immersive game box booths was actually being used, but the active floor system, brand new installation, was really being put through its paces as well, as were, in their arcade area, their uh arcade vr. So, uh, our friends at triotech, our friends at raw thrills and our friends at lai games, uh, wall app, all of their vr systems were being played. So that was kind of an interesting. You know my my reservations about uh attendant less vr aside, it was clear that uh vr hasn't lost its luster. It's just how it's presented and what the players are getting out of it there. That said, it could have been due to the time that I was there it was, uh, about 2 o'clock-ish and maybe the pile of people wanting to play the immersive game box and to try out the VR had not turned up yet, but I'll leave that to you to make the decision on that.
Speaker 2:Also, in the area next door, funny enough, to the Gravity Max, is Bat and Ball. This is an example of a hospitality facility super gluing in a competitive socializing elements. There are two bat and balls in London. This is really a bar with restaurant capability, but upstairs here you have ping pong. You have interactive darts. You have pool. You have beer pop, interactive darts, you have pool. You have beer pop. Next door to where I was visiting, inside the mall rather than outside, in the periphery of the mall, we have an all-star lanes. We also had an all-star lanes at the other Westfield facility that I went to Again.
Speaker 2:popular, crowded people playing, people waiting for lanes that they had booked. It seems to be the go-to entertainment, especially with the boutique element that gives the minders and the parents and the guardians a little bit more leeway on what they can do and eat. There were entertainment machines as part of their layout. They didn't have a Cubix like we saw at the other facility. The one thing I was a little bit concerned about is they had some homegrown retro arcade machines that looked a little bit like they were not true blues, but I'm going to do a little bit more research into that and maybe talk about that at a later date. Research into that and maybe talk about that at a later date.
Speaker 2:And then the real reason why I was at Stratford was to attend the opening of F1 Box. Now we've already talked about it, I'm not going to repeat it. Go back and watch the previous video. But hey, kevin from the past, I can answer your questions now. I managed to have a conversation with the team behind this, and so question one will there be merch here? They say it's coming.
Speaker 2:There was no merch at the opening. There was no merch now, a couple of days in for the facility's opening, and the way the question was answered makes me think that they had been thinking about doing merch, but they were waiting for some sucker from the industry to give them free consultancy and push them over the edge. So, of time of recording, there is no merch, but there is plans to include merch Tournaments. They're using, or will be using, the same tournaments, uh, they're using or will be using the same, uh, arcadian token or point system that the f1 arcade facility has. Surprise, surprise, they haven't integrated it into the system yet opening, but it will be a part of the operation.
Speaker 2:They are looking at this as a parachuting in opportunity. This is, as they say, to allow people who've never done race sims or have only been on the periphery of F1 to get wrapped up in the magic of it without having to be an expert driver. Four settings you can either go in novice or uh, to play arcade, and then you. And then you can go all the way up to elite, where you have wheel spins and you have to use the flappy paddles and you can crash the car quite literally, you know I I had a number of games on it.
Speaker 2:I was there to have two games, but they were kind enough to uh throw me on whenever they had free space going. It was very appealing, it was timed perfectly. The theatrics of how you were entered into the game, race the game and then came out of the game and, you know, had the pat on the back if you were in the top three, was well done. The last question I was to ask was you know, really, where does this system or this entertainment fit in? It is kind of a temporary. It is very minimalist, the layout. It is easy to drop in and pull out. I get the feeling that, you know, once it's proven itself, then a F1 arcade will be turning up in that environment, but at the moment it is being dropped in as a kind of marketing, promotion and entertainment element and I look forward to seeing their second opening, which will be coming soon, to see how that mirrors how much has been learned from the first.
Speaker 2:And for some people who are asking me some questions online about you know what's this private event about? You know why are you going to this one? These private events are used as soft openings, you know they. They get uh, warm monkeys in that can be used for three things give advice and direction and to point out any problems, uh, to help promote the brands through influencers and such like, and also to utilize this time to record the videos and the marketing and the promotion that you need for the website as well as for your social media feeds. So these private events and these soft openings are vital if you are operating a business and you want to rub off all of the sharp edges and work out that there's a problem in the kitchen or that your broadband connection has got a problem or that one of the monitors on the simulator is about to pop off, before you throw open the doors for the full balloon opening and I will be attending tomorrow another soft opening for a brand that I hope to report back on.
Speaker 1:Well, love that you were able to get to all those different locations. You know, f1 Box is still a bit of a mystery to me, a mystery box, the F1 Arcade and you know they could have just scaled the F1 Arcade down to a smaller facility to have less simulators. Obviously, the F1 box only has the six or eight simulators and nothing else. So it just is really interesting to me. There's no excuse not to have merch. The F1 Arcade has merch. They have that whole merch. They very easily could have had merch. It was just a decision that somebody made not to have it.
Speaker 2:There's no reason not to and that is the only way that they're going to increase the per cap for a visit to F1 Box because they don't have anything else to offer. They're pointing people to the food venues around the space. Oh, fuck me. They're now saying that they are going to re-evaluate that. The email that I received from the marketing team where I gave the answers to and they sent back I'm sure they removed all of the expletives from the team to my questions, they said that at the moment they are evaluating whether they're going to have food and beverage available, but at the moment, the people that have visited the experience feel that they don't need it.
Speaker 2:As they were giving me drinks uh, there was no food, but there was a beverage available at the soft opening private event. I think they're going to have to. I I. It's one of those things where a success has many fathers and a failure is an orphan, where I'm sure that there are many concepts that they quite understand could have been or should have been added, but the executive team made a hard decision to go in one path and whoever comes next will make a decision, maybe in another direction. Anyway, please, please, god, don't go on in vacation again, will you?
Speaker 1:I will, I will do my best. I will do my best, at least I'll do my best to do it with with cell, with cell phone service yeah, well, do it with cell phone service or do it in a less than a week bite-sized chunk yeah uh, I'm just very scared of what's going to happen during the IALPA period, when we're all off, out of communication.
Speaker 2:Is Gender going to buy the whole industry up, or something?
Speaker 1:Anyway, Probably they're already doing it.
Speaker 2:They seem to be doing it by itself Again. Please follow for more detail the Stinger Report and the Entertainment Social Arena.
Speaker 2:We have more issues coming out, as I've just alluded to that go into details about what I've just been touching upon. You can listen to it rather than have to read through it. We have audio capability. The emails you send me and the comments in social media are valuable. Thank you very much to everyone. Capability, the emails you send me and the comments in social media are valuable. Thank you very much to everyone. Uh oh, one thing I didn't touch upon which I can just quickly touch upon um, uh, regarding the food at uh uh, the F1, um, even if they do decide to put food in, it will only be snacks and light, uh, light drinks. They won't put anything permanent. And it will only be snacks and light drinks. They won't put anything permanent in, anyway, anything I've missed?
Speaker 1:No, I think we've caught up for the last two weeks so robust. Sound off, kevin, and already I am truly looking forward to the next one.
Speaker 2:Have a safe one.
