Sound Off #109 - Inflection Point For LBE, Exec Leadership Resets, and more!

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On this week's show we examine the inflection point in location-based entertainment, from Disney’s leadership reset to retail game declines, and why competitive socializing and IP-led experiences are setting the pace. 

• Disney’s CEO transition and creative leadership realignment
• Videogame retail collapse as demand shifts to experiences
• Chuck E. Cheese leadership change and experience versus finance background
• Topgolf’s sim bay model and UAE flagship signals
• Genda’s consolidation into focused umbrellas
• Taito’s 55-year milestone amid rising competition
• Dave & Buster’s Super Bowl promo via Fever and brand clarity risk
• Boxpark’s identity gap and programming mismatch
• Dine-in cinema closures versus cinetainment growth
• Grand Prix Las Vegas as a transmedia blueprint
• Sally dark rides, Zero Latency’s Jumanji, and IP strategy
• Retro arcade IP on Apple and industry missed value
• Upcoming Amusement Expo and AWE LBE XR sessions

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Transcript

Setting The Stakes In LBE

SPEAKER_04 0:01

Are you on the edge of your seat? Because we're about to see the video. Covering today's latest trends in location-based entertainment. Brought to you by the LBX Collective, your community to collect and inspire. All right, everyone, let's buckle up.

SPEAKER_02 0:24

All right. Well, welcome everybody to Sound Off with Kevin Williams. This is number 109 for February 10th, 2026. Almost at the 110 mark. We've got to do something, maybe. I don't know, for that. I don't know why 110 feels like we did 100, but I don't know why 110 feels special for some reason. Maybe it's just the round number. It's the round number that'll do. All right. Well, Kevin, how are you going to change my mind today?

SPEAKER_01 0:52

Well, there's been a lot going on in the uh entertainment sector regarding the facility business. And I'm I'm just kind of in a reflective mood, but uh I'm also wondering if the industry can actually see the changes and the trends that we're charting. And I'm wondering if we have reached or even passed an inflection point in our industry uh that has left many behind without them knowing. You know, the dinosaur doesn't know he's dead until uh his brain tells him finally up the trunk of the tree. And we are at that point where an inflection has taken place. There is a major change uh in the way that our audience is consuming entertainment, dealing with uh our uh our operation, and those companies that are not going to be able to pivot are going to find out about it this year. And this could be quite a major uh change in our business structure.

SPEAKER_02 1:53

Yeah, I mean, I definitely think that we are at least at or very quickly reaching that inflection point this year. I think what will be interesting is um the vestigial, like long tail that will still drag out, right? So, like Blockbuster may have realized five years before their final store, I mean, their you know, their penultimate store because I know we had the one that stayed open forever, but their penultimate store uh closed down. Um, but it it was this long that, but they they may have known that, but it took many, many years still for the reality to truly set in and and truly impact their business model where they just had to close their doors because they still just couldn't get out of their way. It was too late to make the change. Um, the the things had moved already so far past them. So while I do think that they, you know, we maybe will find some brands reckoning, reckoning um that you know that they have reached this inflection point and they maybe missed it. Um, but I think we'll still it'll it'll take a number of years for some of them to drag on under their older business model without making the necessary changes.

SPEAKER_01 3:00

That inflection point is usually recognized by the C-suite management who usually jump ship uh early uh and take the good deals with them, leaving it for the follow-up uh management structure to pick up the pieces. We have an example of this with what's happened with GameStop, where many people saw the uh retail bricks and mortar physical games sale business was at uh had passed that inflection point. Um and I'm just wondering if we are at that point uh in location-based entertainment. But we can go into that in more detail as we see more uh indicators of this.

Retail Game Chains In Retreat

SPEAKER_02 3:43

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Disney’s Sudden Leadership Reset

SPEAKER_01 4:19

Well, straight into the uh trends in the economy, and an indicator of uh the failures in the bricks and mortar uh game, physical game sale business in the video game side of the consumer side of the business is the latest uh nail in the coffin for the game franchise in the UK. This used to be a 200-300 uh retail unit business. It uh went through quite a problematic uh few years. It got acquired by the House of Frazier, and now the last of its standalone facilities are being closed, sadly with the loss of staff, leaving a patchwork of attached facilities, uh i.e. uh. retail units within uh uh existing department stores and malls, uh, to remain. And I expect those to be expunged in the next couple of months. But this is the kind of the mirror picture to what we're seeing happening with GameStop in uh North America as well as in Australia. Yeah, I mean, unless GameStop pulls some sort of rabbit out of the hat to completely flip their business model, which I don't see happening, uh, they are going to go the same way as Game If if they can pull a rabbit out the hat, then A, it's going to be copied by everybody, so it will definitely be a multiplying rabbit, but B, it would be an amazing pivot in the current face of the oncoming steam train that they're facing. But hey, nothing's impossible. Uh at the Disney Investors Board meeting um and call, they went through the structure of their business. Uh, they uh explained a little bit of where their future thinking is amongst their successful ticket sales during the uh 2025 period or season, as it were. They then turned around in the middle of this call uh and they avoided mentioning one thing, which we're going to touch upon in a minute, but they then turn around and stated that they're expecting to see quite a major impact on ticket sales for all of their tourist-related business, as the US tourist scene will be going through a major upheaval and a drop-off in numbers. This is the canary in the coal mine moment for the tourist business in the USA.

SPEAKER_02 6:59

Yeah, I don't know if we're going to talk about the next major uh the next announcement. Uh so maybe I'll hold off on that one. Um, but uh yeah, I mean it's interesting given this news what their uh their subsequent announcement was.

SPEAKER_01 7:13

Yes. And uh well, the big story was surprise.

SPEAKER_00 7:20

We told you so.

SPEAKER_01 7:21

No.

SPEAKER_00 7:22

Um the or we hoped so anyway. We hoped so.

SPEAKER_01 7:25

We hoped so. We indicated it when we were talking about Lucasfilms uh and the changes there, and we were sort of saying that it was going to be uh obviously domino moment, and that domino happened a lot faster than people thought. Number one, uh, during the investors' call, it was surprised that no mention was made of the process to start finding uh of selecting, because usually you have uh the uh the prosper uh the no, let's say it the individual anointed by uh the top management, then presented to uh the board of directors who go through an interview process. We didn't see that with CPEC, uh uh, and we definitely have not seen Josh go through this process. Um, Josh comes from a parks background, but he also uh was CFO uh within their uh uh Brandon Entertainment Division. He was uh actually head of their experience operational Walt Disney Company. He he has a great pedigree, and I feel is a very interesting pick for what needs to be done with Disney going forward. It's just the process in which this happened, where uh you know Mr. Eisner uh came in and then was replaced by Iger in a boardroom process that you know was full of uh controversy, but also was a regulated process. Chepe came in kind of in a hurry. Um and you know, now to uh to see Iger leave before his December uh uh end, as it were, uh kind of feels rushed. And there was a lot of speculation on why this was rushed. Is there you know some skeleton in the cupboard about uh upcoming announcement of development? Was it pressure from the board? Was this a, as we were saying previously, the dominoes falling after the Kathleen Kennedy uh departure? Either way, Josh now comes in with uh at speed uh and with an interesting situation in front of him. Uh hopefully the uh the C-suite team that he will bring in, his supporters, will go through the books and go through the structure of the company and find it in a in a position that he can drive forward to success. Or are we going to be faced with in a couple of weeks' time a shock horror moment or a surprise that there was a hole in one of the particular businesses that we weren't made aware of? There still seems to be a little bit of uh the sort of Damocles hanging over uh the remainder of uh Bob Iger's uh tenure, which will uh end at the end of this month. Just as an example for uh our uh audience that's watching this uh uh podcast rather than falling asleep uh with it, the uh I kind of indicate underneath uh the period of when the uh CEOs have taken control and charge of Disney uh or the Walt Disney Company. And I've also indicated underneath them the acquisition, major acquisitions that they took uh took hold of during their tenure. And if you look at Bob Iger's uh Marvel, Lucas and Fox acquisitions against uh Michael Eisner's uh Mirimax EspN's own ABC uh Muppets or Henson Group uh Pixar, you kind of understand the the monster that has been created on top of uh the Walt Disney uh group. And then if you go back to the investors' call, you suddenly find out that the majority or a large percentage of the business is coming from the Disney Plus and the Parks Division, which also includes the cruise lines, kind of tells you how much those acquisitions helped the operation. And I'm sure one of the things that Josh is going to have to undertake coming on board is trying to slap the film operation back into touch so it equalizes uh its input into the uh the operation. Because that that stock number is a bumpy ride at the moment, it is a uh uh a peak that you wouldn't want to ski down.

SPEAKER_02 11:53

Yeah, uh certainly wouldn't want to ski down that peak, but uh, or at least not me anyway. Um, so I you know I would say the the other really interesting thing, you know, yes, Josh uh was made the CEO, but then they also appointed Dana Walden as president and chief creative officer, and she'll be leading all of their content, right? So she'll be leading Disney Plus and Hulu and uh you know potentially any other future uh uh brand um you know IP content acquisitions. Um I would I could see Bluey being a big acquisition potentially for them at some point here. I've been waiting for that one for a long time anyway, but um and since they're a major distributor and partner of Bluey, um, you know, we can see that happen and would obviously have a big impact on potential LBE. But the the fact that they've you're really going to be a pair working together to hopefully drive better alignment between what's happening in the parks and what's happening in their content. Um, and uh yeah, can we get back to the basics of what they, you know, Disney was good at?

Parks, Streaming, And Creative Control

SPEAKER_01 12:59

It's kind of what uh Michael Eisner had uh with his colleague that sadly was taken from us. Uh they they were going to be a double act where the financial, the structure, and the operation could be handled by the content uh and the direction. It is what was needed. Uh, many people have complained that we've gone through a period of uh uh you know dictatorship, as it were, in the uh direction of uh the Disney company. This will have major ramifications, not just across the theme park sector, not just across the film and IP sector, but the global entertainment market. And uh it will be fascinating to see how Josh starts out the gate. He's running, but which direction is he gonna run in? Moving on, and we have another major shakeup, lost by many in the Hurley Burley of the Disney announcement. But uh after six years, uh David at um uh Chuck E. Cheese or CEC Entertainment stepped down. Uh most of us found out the hard way through a LinkedIn uh announcement. Um and uh it was then a mad scramble. And I think some media services and some people haven't even caught up on this yet. And I noticed when we ran the story when it was fresh, uh that it's one of the largest hits that we ever had uh regarding this kind of uh inside baseball announcement. The issues are fascinating here, and there's so many unknowns that we don't know. Uh, number one, did David jump or was he pushed? Um from the sources that we're speaking to, it does sound like it was a surprise and fast-moving situation uh encouraged by the board. Uh, that his replacement, Scott, is coming in with uh only a few years under the belt of working for CEC, and interestingly enough, an executive that comes from a GameStop background. He is currently their CFO and now will be dropped directly into the CEC uh uh position, the uh top chair position with a number of things under his belt. You know, it is uh understandable that uh there is a concern. Please don't look at those stock numbers too closely. Remember that our friends at CEC Entertainment removed themselves from uh the uh stock market when they went through their chapter 11. They are meant to have come back at the end of last year, and that still hasn't happened yet. Again, maybe part of uh what is going forwards with the new change in management and focus will have something to do with this. There's also some speculation about did he jump or was he pushed? Uh and one, you know, the one thing that we've seen David do is a number of quite strident moves. He's been very forceful in pushing the brand of Chuck E. Cheese back into success, worked incredibly hard after the Chapter 11 to uh get the company back into contention and strength and moving forwards. We've seen a number of experiments and investments, we've seen the Chuck's arcade development, we have seen the Chuck's World, uh, adventure world uh uh component. And then it was pointed out to me by someone uh in one of our uh forums. There was also the contention over the fun pack uh membership system and how well that was executed, uh, as well as questions about other of the uh you know the way that the guest experience and the pay-for-play elements were being managed. And it is interesting to see that the new incumbent in the CEO role comes from a strong financial positioning rather than a creative positioning. I personally wish that CEC would consider having someone driving the business and someone driving the experience, uh, especially with the some of the faux pas that have been made over the period in what they've done regarding branding against what they've done for actual value for entertainment.

SPEAKER_02 17:33

Yeah, I think what we really need here at CEC is that dual partnership, like we've got with Josh and we've got with Dana over at the Disney uh company. And this is this would really, I think, impact the the their future growth and opportunities here. David had some, you know, he had an immense park and theme park background uh through his time at Six Flags, almost 14 years there. Um, and then even before that in DC Comics. And so he had lots and lots of time uh within the attractions industry. Scott, on the other hand, has fuck all time in the attractions industry, other than his one plus years as a CFO of CEC Entertainment after coming from Farmer Brothers, after coming from GameStop, which are not you know two really strong accolades in your resume necessarily, given um you know you've given GameStop's current issues here. And so for him to come in, lead the helm of arguably what uh you know was a string of hits to some extent, and obviously some missteps and mistakes along the way. I agree with you in your member in the membership scheme issues around CEC, talked about those quite a bit, the LBX show and sound-offs over the years. Um, but uh, you know, really good, solid you know, hits and growth over the David's time as CEO coming out of bankruptcy. And I am a little bit concerned about the new leadership and the fact that it was done, at least externally, so relatively quickly that they may have not even, you know, I'm just surprised that they didn't maybe set Scott as an interim CEO. And while they maybe did a search, and it could end up being Scott, right? But like go and do a formal search. Um, but obviously, as a private company, not a public company, this could have been done, you know, behind closed doors very quietly. And so that is uh, I think will be an issue for them going forward. I hope not. Uh, hope Scott proves to proves us all wrong. Um, but I do think somebody needs to be focused on their experience while somebody can be focused on operations and content and media partnerships and growth.

Chuck E. Cheese Leadership Shakeup

SPEAKER_01 19:38

You will see this as a common recurring pattern during the next few months when I'm talking about replacements and restructurings. The question always has to be asked, not who benefits, but who is driving the entertainment offering, because we are an entertainment industry. And if you don't have experience in that, you can't fake it. Look what happened to Dave and Busters. So again, the C-suite. So even if Scott doesn't have uh the skill set to understand the entertainment, he can surround himself with a C-suite. And I'm hoping that the term business development director is one that will return again to uh the uh the arguments. A lot of the stuff that I do as a consultant would be called uh in in another time business consultancy, business direction consultancy, because the first job that went in 2008 was the business development director when there was the purge of stuff, when uh there was a cutback on financing, and the CEOs usually turn around and said, Hey, I can do that. You know, I I've got my finger on the pulse, I understand the industry. When really it's one thing to steer a company, but it's another one to uh to be able to understand the trends and the directions and the player experience. As we saw with Michael Eisner uh during his tutelage at Disney, he understood it for a period of time, and then when he didn't, he didn't. Moving forward, our friends at Top Golf uh major partnership uh with Merrill, uh, and they are going to be opening uh what I would call a flagship topgolf uh location uh here. Uh, you know, Abu Dhabi is an affluent area already, dropping this in, it's going to have to be high quality, it's going into an area that has quite a consistent uh amount of entertainment. And surprise, surprise, for the first time ever, uh in recent memory, anyway, we now hear alongside the 82 uh hitting bays, they're going to have VR Golf Slim Bays included. Now I'm not sure how much of this is the franchisee applying uh the thumb screws to uh the team at Top Golf to make sure that they get the max out of their social entertainment offering from this particular facility. It does look a very high-level facility as it would need to be for this particular demographic of audience. But I'm wondering if this is the beginning of the future rollouts of Top Golf facilities, including those magic phrases via golf simbays.

SPEAKER_02 22:25

Yeah, interesting. I mean, okay. This kind of stuff can go into Dubai and Abu Dhabi and you know the UAE in general, and and you know, do okay even if it's half empty because they just have uh they have the ability to do that, right? Um, the you know, question for me is actually, yeah, the VR golf simbays, is this VR or is this top golf swing suites? This is actually this is this is not VR, it's just what they're they're calling VR. Okay, all right. So it's a golf simbe, but not a VR golf simbe necessarily. Okay.

SPEAKER_01 22:59

So uh what's happened is uh the PR team uh have spun it the way they felt it was uh necessary for their audience, and they called them VR Sinbays.

SPEAKER_02 23:10

Got it, yeah. Okay.

SPEAKER_01 23:12

We still don't know if they are um swing sweet based, so I would I would have a heart attack if they weren't. Um but it is interesting that this is the first time in quite some time that we've seen a Top Golf new facility in development that actually includes Sinbase. Yeah, we'll watch this with uh interest, and it's that Gender moment, it's that Gender moment that I promised. So are you sitting down? Have you got a drink in front of you? Because you're gonna need it. Here is for your deletation a list of all the companies that the Magic Gender Group has acquired in our sector over the last eight years, 60 operations. Some of those operations are peripheral to our entertainment industry, such as in the karaoke sector or in the uh the sports art sector. But many of those are operations and names that are familiar to us and we've touched upon. Well, that is an unwieldy mess, and it's going to need some wrangling. And so we have the announcement now of separational groups, which I touched upon previously, that we are now going to see uh the creation of umbrella groups under the Gender Entertainment Group brands that will now take control of certain aspects of that 60 plus uh operational org chart, as it were. The first one is Gaigo Edge, uh, which will be handling what I like to call their competitive socializing entry, their what they call their nighttime entertainment or night life entertainment, their billiards, their poker division. I wonder how many of you knew that they had a poker chain facility business. Uh they have darts. Uh, I'm not sure if this darts system is linked to the Sega Live Darts platform uh that they have association with. But anyway, this is going to be a competitive socializing uh focused uh operation, kind of pointing to the trend that we've seen in the international market for competitive socializing. And for all those companies that keep on claiming it's a flash in the pan, this is going to be a very uncomfortable moment to admit that this is happening. The next is uh Gaigo Solutions, and this feels to me very much like a distributor. Uh uh, this is an operation that is going to control uh over a hundred uh thousand mini locations. So those are the um the Kid Kade kind of uh facilities, the Gashi Po, the Claw, the uh the retail size units uh internationally, not yet, but Japan focused, as well as acting as an equipment and maintenance operation for the whole group.

SPEAKER_02 26:14

So just real quick to clarify, this does not mean then like the Kittleton locations here in the US or in other parts that this is just right now the consolidation of the thousand locations in Japan?

SPEAKER_00 26:27

Correct.

SPEAKER_02 26:28

Okay.

SPEAKER_01 26:29

We are waiting to hear about the uh Gaigo Solutions international operation that will deal with the Chinese, Vietnamese, uh, and European and American operations. But uh at the moment, the die is being cast regarding the structural changes. There will be another shoe dropping soon regarding uh their other business, but this is the beginning uh and the momentum continues. Moving on, and uh we're celebrating the 55th uh anniversary of Taito's uh entertainment division, uh Taito Station, both in the Taito F and the mini Taito Station facilities are well known in the Japanese market. They have over uh 160 of these venues. Uh, they are a mainstay uh of the amusement side of the business, even though most of them are crane heavy or UFO machine heavy. Uh, they still have a very strong amusement component, they're very eye-catching, they're you know, front and center within the Japanese market, and they seem to be going from strength to strength at the moment, but they also have some strong competition, and I think the uh slides beforehand kind of points to that competition.

SPEAKER_02 27:56

Yeah. I think that's an understatement, but uh but look, you know, they I'm sure Taito has their brand loyalists and the ones who you know prefer a Tato Station, for example, over maybe going into a Gaigo. So um but uh you know you've got your blue and you've got your red competing against each other.

Topgolf’s Sim Bays And UAE Flagship

SPEAKER_01 28:15

Yeah, and we have some other colors in that mix, but uh it is interesting that we're marking the 55th anniversary uh at this point. Uh will they continue along this path? Is very dependent if they understand that that inflection point maybe. Talking of inflection points, and our friends at Dave and Busters have been uh trying to write the ship of state, trying to talk to their core audience, trying to get back into profitability. Um they announced that they're doing the big game uh experience, which is you pay you know 30 bucks for the pleasure of uh a dedicated seat and discounted food to watch whatever big game is taking place. Obviously, the Super Bowl is one of those big games that is coming up uh with the uh FIFA football, with the Winter Olympics. I am sure that uh they're going to try and leverage off of the sports. At the same time, uh they announced that they were going to be doing a special Valentine's package where one of the claw machines in each of these facilities running this experience would have a diamond ring in uh hidden within it, and you may be the lucky person to pull it out of the machine. Talk about blackmail. Um, the the issue I'm having here is it doesn't smack of a focused business plan for their target audience. It kind of feels like trying to come up with a number of um discount deals that are going to attract. Uh again, we're waiting to see the Dave and Buster's marketing and the promotion associated with movies, which they were known for. And we're also hoping to see some more clarification on their numbers and how well their current uh business plans are rectifying the hole that was created by the previous management.

SPEAKER_02 30:23

Yeah. This is interesting, too, that they've chosen to partner with Fever for this. So Fever is actually the platform in which you will purchase the tickets in advance. And they have clarified you need to purchase the tickets in advance specifically for the Super Bowl. Uh, it does come with unlimited wings, um, you know, for the traditional or boneless wings, so you can eat as many wings as you want all day, uh all day long, unlimited games as well, and then premium seating. So you do have unlimited all-day arcade play. Obviously, that's not going to include merchandising, uh merchandisers, but uh, you know, for the the you're you're not going to get to play for free to get the ring. Um, but you know, you've got all you can eat wings, guaranteed premium seating, they say, all for the fair price of$24.99. So it's really interesting to see how this succeeds, but also very strange that they are doing it through fever, given the fact that they do have booking capabilities for their social base. They had. Well, okay, fair. That is true. They had, but that doesn't mean I mean that that technology infrastructure should still be sitting there, you know, underneath the hood that they just need to activate and turn on. I think here this is one of those where Fever is making a big play. I wouldn't be surprised if actually somebody at fever went to Dave and Busters and proposed this and and not the other way around, as Fever is really trying to be the driver of big experiences, like we talked about on uh the LBX show a few weeks back. Fever wants to be Ticketmaster for experiences, yep.

Genda’s Consolidation And Strategy

SPEAKER_01 31:58

Yeah, uh Ticketmaster for experiences, and they also want to own facilities and uh uh fever and Gender getting together, and I'll I'll leave the industry and uh become monk, I think, at that point in time. This is an interesting play, pardon the pun. Uh, but if it doesn't work, it'll be very obvious that it didn't work. And uh, we've just talked about the problems that Chuck E. Cheese went through with their membership scheme. This is a membership scheme through the back door, and we still haven't heard anything about what Dave and Busters did with their uh social play concept, and we still haven't heard of what Dave and Busters is doing with its social bay concept, and we haven't, you know, there's a still a lot of unknowns that uh will need to be admitted to when we see their next numbers, and those numbers are going to need to encourage the markets because at the moment that is an equally frightening ski run uh of a stock uh outing. And if you haven't checked those numbers, that is a concern.

SPEAKER_02 33:13

Yeah, I mean that was like the charts. No, the chart speaks for itself. So if you're listening to this, it's not pretty. So you can go and check out the uh the stock and um you know see the stock trend, and and it's not it's not a it's not a pretty thing.

SPEAKER_01 33:28

And we are not encouraging anyone to follow our advice on buying or selling uh stock numbers, we're just using public source data to prove the points that we have been making for over 100 episodes so far. Carrying on, and our friends at Box Park, not a million miles away from where I'm sitting right now, uh, they have uh admitted to the markets uh that they're now assessing a new format or an alternative format to their existing uh style. So the box parks are known for you know container units huddled together into a structure utilizing multiple food providers as well as a hospitality component. A few uh months ago, near over a year ago, they uh entered into developing their playbox concept, which is uh their social entertainment concept. And now the company has also had to admit that it's been seeing increased losses in its traditional business, and so now they're thinking very strongly of pivoting more towards offering a competitive socializing element uh as well as a live hospitality uh performance component to their venue model to uh increase uh their uh revenue. Very telling, very telling of what's going on within the box park operation.

SPEAKER_02 34:56

Yeah, I mean I think they they have maybe an identity struggle here because you know, when I watch the they have some videos playing, so you can go check out boxpark.co.uk um to you know see the video. I'm not gonna put it up here now. Um, but they even in their live entertainment choices, they're trying to do things that appeal to kids uh and families, and then they're also doing nightclub things, and not that you can't have both of those things coexist, um, but it definitely when I watch this, I'm like, is this for my families or am I gonna like go and watch a couple of they take my kids to not that this matters, but watch some trans uh people dance on stage and um you know it like it's it's just even gonna know what I'm gonna get when I walk in the door, I guess is my point. Um, and that is uh not exactly what you want when you are trying to attract a particular audience, um, both on either end of the spectrum. So I think this is the identity crisis that they need to solve. And while they're at it, they might as well pick a new tagline that doesn't exactly mirror Dave and Buster's.

Taito At 55 And Market Pressure

SPEAKER_01 36:02

Yeah, it would be good. Uh their inflection point, uh, as it were, is they need to work out what they want to be and how they're going to move forward with that. I sat in the test playbox uh location uh here in London uh and just watched for a period uh two hours of what their audience was uh and of the 20 people that were in the space that could easily handle a hundred. Uh only one of their shuffleboards was activated, none of their karaoke was in use, their arcade was a desert, and the darts were both being played, both uh bays of the darts, uh, and one group watching the football on the TVs. Now, if you take that as a dot average, it kind of points towards you've got a problem with your competitive socializing concept, even before you try to use it to sort out the hole that exists in your box park entertainment, uh box park hospitality venue. But uh we'll we'll do a little bit more research into that, and uh we'll I think in the next couple of months we'll have to uh address what's going to go forwards with this concert. We touched upon this in uh open and shuts, the cinema uh entertainment sector comes in three fruity flavors. There is um the traditional uh cinema layout that we all know, the AMC approach. Then there is the VIP cinema experience that can include dining and hospitality, and then there's the cinertainment model. The cinema model seems to be one that uh at least offers a secondary and tertiary business revenue stream and so can help you out of difficult times. Uh, our friends at Look Dine In Cinema sit in the middle grounds, they only offer the VIP seating and food approach, and they have gone through chapter protection uh uh regarding their business, and uh they have started a perch, and of their seven sites, they've just announced that they'll be closing three of those down in California. Uh and you know, I feel very strongly, as I said in the uh open and shut, that these guys needed to have embraced uh competitive socializing or at least some level of uh entertainment to support what they were trying to do with their food offering. They may not have the space or the capability to do that, so that kind of also points uh towards the difficulty that they find themselves in. But you know, this is a point where they now have to have their inflection about what they're going to do moving forwards to save the remaining three or four facilities.

Dave & Buster’s Promotions And Fever

SPEAKER_02 38:58

Yeah, these guys, as I mentioned on open and shut, uh they had a location in downtown Chandler, which is about 15 minutes from me here. And I mean, it was a beautiful facility that they built, um, you know, almost a ground-up facility, uh, you know, beautiful inside, um, massive bar, but so much empty space in the lobby area that could have been utilized for, as you said, any you know, sort of competitive socializing or you know, entertainment or even amusement uh components. Um, and they did completely nothing, is so much empty, wasted space. And every time that I went in, uh, which was rarely for a movie, frankly, because there's a closer dine-in cinema for me uh that I prefer. Um, but when I would go in there for different events that were hosted, it was the people in the event and then very few people walking in to see the movie. So I think you know, it was potentially the location, potentially their model, but certainly the lack of mixed entertainment inside a space that really could have utilized it.

SPEAKER_01 40:06

The cinema sector has fought tooth and nail to try and ignore cinottainment as a as a future opportunity for them. I I understand why some of them don't want to admit that they need saving. The drowning man uh analogy comes to mind. But what I would point to now is the more that we see these topper top-end uh VIP style cinema experiences uh hitting the wall, the more that the reality of business is going to face them, or they will be superseded. You know, we have the evos out there that are doing the business. We have other examples of the cinema approach that is generating revenue. You can't you can't hide from the rec rooms uh of this industry. You you're going to actually have to work out what your entertainment offering is beyond trying to add uh a stake to your cinema experience.

SPEAKER_02 41:09

Oh well. This is yeah, this is the location. And Chandler, for those of you listening, and you can see as it pans to the right how much space there absolutely was underutilized that could have absolutely been any other form of Dave and Buster's in there. Exactly, exactly. So that is, I think, one of their core issues is, and then they were right downtown Chandler, which was a you know prime location, so high rent. So when you're talking about revenue per square foot, you already are struggling with the cinema industry, and then you have all that other square footage with significant underutilization, and I think that is what has been driving this, uh, their their current issues. Dwell time.

SPEAKER_01 41:52

I I don't want to read too much into what's been happening at Look Dine In because they've you know gone through quite a difficult financial situation. But I keep on getting the feeling that maybe the hospitality heads rather than the entertainment heads uh had driven a lot of the initiative behind this, but that just a personal opinion. Moving on, and another element we touched upon in OpenShot was uh our friends F1, and how they're doubling down on their bricks and mortar components. Uh they closed down for a period of time their Las Vegas facility, uh, refitted it, expanded it, and now a hundred thousand square foot of racing experience, simulators, go-kart course under F1 Drive, an exhibition and an active entertainment component, all supported by merch, all supported by F. This is for me, F1 meets Netflix house, same similar size of venue, similar kind of audience. What our friends at F1 are using these venues for, though, especially this Las Vegas site, is that it is uh part of their uh when the uh when the circus comes to town and they have the F1 races there, this space is actually used as a VIP location uh as well as a social entertainment for some of the uh events and parties that go around it. But as a standalone, they've taken the original concept, brushed it down, relaunched it now, and uh we we're presented with quite an impressive entertainment venue, a transmedia sports entertainment facility, you'd catch me say.

SPEAKER_02 43:46

Yes, of course. Yeah, truly transmedia, and they've done a fun they've done a beautiful job, at least what we can tell here. I'm looking forward to as we're gonna need an extra day, I think, out in Vegas after Amusement Expo to go and see the Number of new venues that we just have already have opened in the last year since we were out there together. Um, and so uh looking forward to checking this one out for sure. Um, while I personally am not a massive F1 fan, I obviously am a fan of what they've been doing in the entertainment space, and so want to definitely check out what they are doing. And um, yeah, it looks like just a phenomenal built uh beautiful facility.

Boxpark’s Identity Crisis

SPEAKER_01 44:25

The retail component, the entertainment component, the uh the hospitality component, all very important glues. Uh, just for clarification, the simulations, uh simulator sector there, the F1 uh hub, I think they called it, or F1X. F1X, yeah. Yeah, F1X is not uh F1 arcade. There is already an F1 arcade uh in Las Vegas and uh they are different parts of the tree. Moving on, and our friends at Lucky Strike Entertainment revealed some of their numbers uh for us uh during the period of entering into February, and we get to see that their revenue has increased by 2%. Um that we also see that they have seen an increase by 0.3 uh in uh sales per venue uh across their 360 sites, um, and that they have now increased or are continuing to increase the uh upscaling or the rolling out of uh new venues as well as their existing venues uh receiving a rebranding being brought up to the standard that they're pushing forwards. I wouldn't be surprised that we'll see the last of the bolero sites either being marginalized or turned into lucky strike uh facilities. That said, positive numbers if you read the top paragraph of any press release, but when you dig into the minutiae, which is sadly my job, um 0.3 is not the type of thing that I'm going to be jumping up and down and shouting from the hilltops over. I am also not going to be shouting too loudly that it is 2.3% increase uh compared to when some of the other companies around me are seeing slightly larger increases. Now, how much of that is due to the retraining uh and the restructuring and the changes in the market, and you know, the the list of excuses go on for some time, but also how much of this is what they are offering is not being accepted by an audience that has a much wider selection of opportunities. The new openings they've opened in January, five brand new Lucky Strike facilities, and all of them are brought up to the boutique, bowling, uh, an amusement and FEC model that uh we've been seeing from the new openings. But I still wonder about all of those other venues that are still showing their age.

SPEAKER_02 47:14

Absolutely. I mean, you cannot go on the type of acquisition spree that they have gone on, especially buying up older locations and then be able to still leverage capital to deploy against the locations, especially when your same store revenue is uh, you know, growth is so completely anemic. And really, this is the first time in what I mean, how many years now at this point? Uh, we should we could look back, but certainly over the last two years, the first year that there's actually been an increase in same store sales versus a significant multiple percentage decrease. So I don't think this is a good positive sign. They're not out of the weeds yet. It's easy to drive top line revenue increases when you continue to buy new locations. Um, so that is the mask that they have been continually putting over the top of their organization for many, many years to show that top line growth for their stock, uh, for their for their board and their shareholders. And this is uh, you know, yeah, this may be hopefully a uh a trend upward for them to increase their same store revenue. Um, it also could be a flash in the pan.

SPEAKER_00 48:22

So, for those people listening, how would you describe the ski run in front of us here? Uh Mowgli. We'll call it Mowgli. Black snow all rounds.

SPEAKER_01 48:35

Now, the the issue is uh if you feel that you can just buy your way out by getting another facility or opening another facility and try and ignore the the overall prospects that you're offering, it will catch you in the long run. And and maybe this is now the time where it's going to catch. 0.3 to me is difficult to sell as a positive. Just for uh the audience that's watching this, uh you know, I whipped out the Taurus again and I created a shotgun, just so you can kind of see the clustering of where these companies that we've been talking about sit within the uh the Taurus or the Venn diagram that I've created that tries to define our sector and its future opportunities. And you can kind of see the companies that have been seeing a little bit of problem have been pushed out to some of the marginal areas of the uh Taurus compared to the companies that are transmediafying themselves and are going for the central components. You know, obviously Disney is the spider in the middle of the lair here, uh, with interest in the cruise line and parks and location-based entertainment and cinema and everything. But also, it is interesting to see really where uh the Gender Edge kind of operation would sit if you were adding them to this Taurus, as well as the positioning of Chuck E cheese, which I would say is finding themselves also being pushed to the marginalization because of that lack of um uh repositioning themselves. Though that said, if they open more of their uh Chuck's uh adventure world, then they would be pushed more towards the resort kind of targeting. But again, this is just a snapshot of the type of data that I'm playing with at the moment.

SPEAKER_02 50:36

Yeah, excellent. All right, well, coming up after a quick break, we will continue with some more trends. How are your game floor with arcades by Allen One? Whether it's perfectly foreign dreams in Dr. Pepper's Doctor Play, having official light on things pushes, or defending cities from attempts to miss the command reaching arcade. Alan One has something for every venue and arcade floor that will delight your guests. Each game is also enhanced to literally useful. Visit AllenDanx1.com to learn more. That's AlanDanaks1.com.

SPEAKER_01 51:10

Thank you, everyone. And into the tech trends. Not too many uh this time around. Uh some clarification. Uh, our friends at Sally sent the bouncers round, and after they finished pummeling me, I would like to confirm that uh the Nickelodeon play Dark Ride Attraction has been developed by Sally and it is uh incorporating their shooting and interactive trackless-based system that fits into quite a compact uh uh space compared to other kinds of dark ride attractions uh with specialist content created uh based on SpongeBob. It's interesting to see how many more venues are going to go through the process of adding this kind of mid-scale attraction to their mix to be able to handle their audience. You know, I know that the Sally Order book is quite packed at the moment, but also the company works very closely with very high-level IPs. You know, during IALPA, they were making the announcement of their latest installations uh based on some very popular IP.

Dine-In Cinemas Versus Cinertainment

SPEAKER_02 52:21

Yeah. Uh you know, got a chance to go on this in Vegas. Um, I don't know if it's the exact same experience, but it was very well done. I really enjoyed it. And um, you know, good to see that they're getting some additional play out of it, not uh you know, pun intended.

SPEAKER_01 52:34

Yes. Um, you know, from the universal point of view, uh it's it may be a package that when you you go for the Nickelodeon play, you also get uh access to this type of high quality, large throughput uh attraction that can eat up your audience numbers quite nicely in a venue like this. Big announcement from our friends at Zero Latency. Their arena VR experience operation is going to be adding their 11th title to the list of games that they have. And again, it's another IP and it's another uh big movie name here, Jumanji. It's uh interesting to see this particular game being parachuted into uh the zero latency eight-player uh game experience based upon its history, but I'll touch upon that in a minute.

SPEAKER_02 53:33

Well, look, I mean, I guess uh I'd zero latency is potentially a better partner for the Jumanji uh the Jumanji brand in IP than um HoloGate. Uh you know, so I don't know. Um they've yeah, we'll see because they've they've Sony has partnered obviously with HoloGate for their Ghostbusters franchise. Uh just um you know surprised to see. Well, there we are, uh, that they uh went with zero latency for this next brand of IP.

SPEAKER_01 54:02

As I zoomed in as uh Brandon jumps into what we were going to talk about, is now we have, you know, we have to dedicate part of this session to IP and Sony's previous, you know, here we have a movie uh uh operation, Sony Pictures, wanting to see their uh film uh properties get their transmedia time in the sun. They did this first with Ghostbusters quite heavily. They partnered with the original Void, uh, and then they partnered with HoloGate, and then they partnered with uh Immersive Game Box, each one of those offering a different opportunity for that IP to be presented. And they did the same with Jumanji, they partnered with the original uh uh Void, and then they partnered with uh the salvage of Void to ensure that they could have the Jumanji VR experience uh put into their Wonderverse. And it is interesting, a matter of weeks after the announcement of the closure of Wonderverse uh and the termination of all of that, we then now see another VR interpretation of Jumanji being developed with Zero Latency. I've reached out to Zero Latency to ask if any of the previous elements from the VR Jumanji experience are going to be incorporated into theirs. Uh, I haven't heard back from them yet. It is interesting to see uh how Sony's going to sort of move forwards from the Oneverse Black Eye and how they're going to try and ensure that they have a presence in location-based uh entertainment. And this kind of partnership uh allows them to keep relevant, though again, I am sure it isn't coming free to zero latency and that they're going to have to pay quite a considerable license fee to utilize such a well-known IP.

SPEAKER_02 56:02

Yeah, and you know, maybe in the interim, while Sony figures out what to do with their LBE experiences, this is the Netflix uh path, right? So we saw Netflix partner with Sandbox VR on a number of um IP, you know, uh VR-driven experiences. And, you know, while they were developing their own Netflix house. And so, you know, this could be Sony just saying, hey, look, we want to keep this IP relevant and out there in the world while we figure out what the hell we're going to do next for LBE.

SPEAKER_01 56:35

I agree. I I think it allows them to keep a toe in the water uh without having to make direct uh decisions. They they're going to have to have a place in this sector. You know, that there's no middle ground, there's no sitting on the sides. It's just how they do that. Are they going to compete with Netflix House or are they going to go into another direction? These are the decisions they need to make. As well as the technology is uh evolving and changing. We're going from the backpack VR cumbersome helmet that was used in the void uh in 2014, uh, 2018, uh, 2020 is not the same type of technology that zero latency are employing in their facilities, and it's much, much more of an organic uh virtual experience. I would be interested to find out how successful the immersive game box uh application of Ghostbusters was for them, but again, we'll get more information as uh as the year moves on. Another IP from our industry, uh now getting fame uh for the mobile state, Apple Arcade. I always drove me mad when Apple announced that that was the name of their game portal, but Apple Arcade is now going to add real arcade machines or uh interpretations of uh real arcade machines to them with Retrocade. God, their marketing team must have stayed up all night to come up with that name. And they are going to include uh playable versions of Gallagher and Put Man and Space Invaders and Asteroids and other classic games uh that can be played through your iPad or your iPhone or your Mac or your even on your Apple TV. So I'm gonna have to go up to our Apple TV at home and kick it and see if I can have a quick game of uh breakout on it. Either way, this is yet again an example of all of our lovely amusement properties and retro gold being used by someone else. You know, this is the arcade one-up moments now through the giant that is Apple. It drives me mad that our industry doesn't manage the utilization of RIP better, but hey, I'm just a voice in the wilderness, as it were.

SPEAKER_02 59:02

Yeah, and you know, I do wonder how much Apple paid for this, uh, you know, or if this was the other way around, right? If this was uh you know, these groups coming to Apple and looking for greater distribution. I can't imagine though that Arcade One Up is super excited about this news because now why have bigger they got bigger fish to fry now they've been acquired. Yeah, well that's uh that's fair. Um, you know, and you know, maybe this is one of the reasons why they're moving into home-based claw machines, which I still find odd. But anyway, um I don't I don't understand that one. But uh but anyway, that I can't imagine that this was at least welcome news for them.

F1X Las Vegas And Transmedia Venues

SPEAKER_01 59:41

I I'm sure this was just one of the many uh nails in their proverbial coffin, uh, and that they needed to reposition themselves. They had their inflection moment many years ago and they ignored it, and that led us to the situation that we find the newly acquired arcade one-up uh operation. And remember, the new buyers of that didn't buy all of the operation. Uh, I'm not even sure if they still offer the claw machines. I'll need to go off and check after this. What we are looking at is cheddar on the table that isn't ours. This is the amusement industry's history. This is at least an opportunity for our trade associations to put a logo in the corner saying sponsored by the arcade industry or whatever, uh, to show that these are reputable uh recreations of our past history's gold. You know, you don't see Matchbox making uh recreations of the Mustang from the 1960s without Ford's logo on the bottom of the vehicle and on the branding. Um I just feel that we're missing an opportunity and we will really come to see the the lost time and opportunity with just throwing these games out there as something that you can play on a mobile game and that's it, and don't come to the arcade and play the real thing kind of approach. But again, that's that's my rant over, as it were. Uh, as we touched upon uh previously, we've had the confirmation of our slots and what we're presenting. We're going to be going into the depths of the uh competitive socializing sector at Amusement Expo in March. A month away, time is flying. The there is the possibility of some further news about uh LBX involvement regarding uh Amusement Expo. Uh I'm not gonna go uh go into that until the I's have been dotted and the T's have been crossed, uh, but uh it looks like it's going to be a fun couple of days in Vegas for us, especially as we're gonna have to take some time off to visit all the new venues. Uh and then also we have in June, which is rushing also towards us at high speed, the augmented world expo that is going to have its LBEXR component. If you're in the uh XR space in location-based sector and you're not part of this, then you only have yourselves to blame for missing out. Anyway, please come around, beat me up, uh, like others are doing uh on LinkedIn for my inaccuracies and with uh information on changes and developments. We have some new stinger reports out. We have uh some soon to have some uh entertainment social arenas out there uh and all you know, all that goodness. But that's it from me, Brandon. Was it boring enough for you this week?

SPEAKER_02 1:03:01

No, not at all. It was uh it was a great, great conversation and uh so much movement happening, especially at the C-suite level at a number of these significant transmedia organizations that we need to be keeping an eye on. So thanks for everything you do, as always, Kevin, and uh we will see you on the next sound off. Have a good one.