Sound Off #123 - The Closure Logjam, Staytainment, Licensing Expo, & More!

Sponsored by Intercard!

On this week's show we zoom out on why location-based entertainment keeps announcing openings while closures suddenly go quiet, and why that silence can signal bigger risk than bad news. We also track how "staytainment," IP licensing, and next-gen active play are reshaping what guests expect and what operators must execute. 

• lack of announced closures creating an unhealthy logjam 
• consumer trade-offs squeezing travel and discretionary spend 
• staytainment positioning as a local-growth strategy 
• active entertainment shifting toward digital sports amusement 
• Lucky Strike facing legal pressure and association conflicts 
• nostalgia-driven hospitality and arcade hybrids gaining momentum 
• single-attraction competitive socializing depending on strong food and beverage 
• private equity entering cashless payments and venue tech 
• interactive dark rides and VR adventures pushing repeatable formats 
• Licensing Expo signals bigger IP and transmedia competition 

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Transcript

Welcome And The Closures Silence

SPEAKER_01 0:02

Are you on the edge of your seat? Because we're about to stay with Kevin William, covering today's latest trends in location-based entertainment. Brought to you by the LBX Collective, your community to connect, aid, and inspire. All right, everyone, let's buckle up.

SPEAKER_00 0:24

All right. Well, welcome everybody to Sound Off with Kevin Williams. This is episode number one, two, three, one hundred and twenty for June 2nd, 2026. Kevin, my friend, how are you doing?

SPEAKER_02 0:37

I'm doing fine, thank you. How are you doing, more importantly?

SPEAKER_00 0:40

Doing well. Doing well. Yeah, absolutely. But um, it is that time to change my mind.

SPEAKER_02 0:48

Well, we've been touching upon this subject in a couple of open and shots, and uh, I suppose we better deal with the uh elephant in the room. Um, we are in a challenging situation for our sector. Uh, it is swings and roundabouts, really. We have a very successful number of openings of brand new venues. If you look at our sound-offs for the last couple of years, as it were, um, you can see that we have had uh every week we are able to populate, on average, uh, about 20 uh new facility openings of various chains and new entrants into the market. And normally we would also be reporting the usual churn of acquisitions, mergers, and closures, as any healthy industry would reflect. But currently, we've been going through constipation. We have not seen a rollout of information regarding uh closures of facilities or even churns and mergers. And what we are kind of uh disseminating from the information, the limited information that we have available to us is that there is something going on. There is either a situation where operators that would normally be closing down and readdressing their business and moving on to something else feel that if they hang on for that little bit extra, using their fingernails, leveraging debt, whatever, that they will be able to get over the speed bump of the current economic conditions, and there will be greener pastures next door. From my point of view, that is unhealthy. That is a log jam. That is a beaver coming along, finding a healthy river, dumping a whole load of logs in and damming up the river. And the river ain't going away. The river will just build up and build up and build up, and the dam will burst eventually. And I am concerned that we are now at that point where companies that are pretending to be healthy aren't. Uh, we've already reported on the 8 and 10% same-site sales decline. Uh, and that dam buildup could hit at the same time as we're expecting the price hikes in the economic conditions from the Middle East war to hit us fully in the face uh come uh August and September. So I, you know, I am I hope I'm not appearing to be a chicken little, but uh I am pointing out that this is an unusual state of affairs and a most challenging condition that we're facing.

SPEAKER_00 3:27

Well, whether you're considering, you know, whether you're considered a chicken little or not, I think it is the it's the what we're what we're experiencing, what we're seeing is the fact that there have been at least announced, um, there have been zero announced closures, or very few. I don't want to say zero, but very few uh announced closures in the last several months. And that is unusual. We have been tracking these for years now, um publicly on our podcasts, but also you've been tracking them for much longer before then, and never seen anything really like this, where there's been this type of either withholding of information and announcements, or the fact that they are just not closing and doing everything you said, which is trying to uh build up that dam to try to stop the river from flowing and ultimately it is going to break.

SPEAKER_02 4:25

There's there's a double whammy here. Uh, certain corporations will not want to report failure, obviously, that is commonplace. We have much more large corporations running competitive entertainment as well as location-based entertainment venues, and they are adverse to uh to report negativity, uh, but they're focused on uh positivity. All that said, um, if this dam breaks quickly and loudly, then the investment community will think of us as a uh uh an unviable business model, and that is not true. You know, as you follow the open charts, you can see that we are a growing and uh very active uh operation. Whether we need to be better policed and better structured is another question. But again, this is a topic I'm sure we'll be uh touching upon in September.

SPEAKER_00 5:18

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SPEAKER_02 5:57

Well, thank

Travel Cutbacks Hit Local Fun

SPEAKER_02 5:58

you for that. And straight into the economy situation. And you know, we uh are kind of seeing the travel plans for the normal tour vacation uh apparatus impacted incredibly. Um we're hearing reports about uh individuals having to make the trade-off, as it says uh in the slide here. That trade-off being can we afford uh to uh go on holiday as we were originally planning, or are we going to have to cut back? Uh are we going to have to go to a cheaper hotel? Can we afford that airfare? Are these gas prices making it impossible for us to consider what we want to do? This trade-off has a domino effect. They're making uh the audience out there are making trade-offs on how much they put fuel into their vehicles because of the cost. They're also making decisions about the groceries that they're purchasing, uh, about updating, even down to the subscriptions that they have for internet and streaming services are all being impacted by this. I would love to reuse the phrase staycation and pull out all of the metrics that we have regarding what stacation means for our industry, but I know that I would be lynched uh and burnt at the stake if I started making these statements. I am sure by the time of September the uh uh the brand uh the brand of staycation may have changed a little bit, or as I usually expect, uh some uh fantastic economists will come up with a brand new term that is much more trendy and will be using that as a replacement for what is obviously uh individuals making very hard decisions about their future entertainment plans, which impact us.

SPEAKER_00 7:47

I think when I think of a staycation, I'm thinking of I'm instead of me traveling to San Diego with my family to go to a Great Wolf Lodge in San Diego and driving there, you know, five and a half hours from Phoenix, I'm gonna go up to the Great Wolf Lodge in Scottsdale that's 40 minutes away. Uh and so I think when you think of staycation, um, but I think where we're going to uh where smart operators, smart venues will lean into this idea of staytainment. And I just made that up now. Um, but uh, you know, staytainment, which is instead of traveling to a regional park or something, you know, that's going to require a little bit more travel and planning and hotel stays, et cetera, they still want to go and have great experiences with their family, with their kids, with their friends on weekends or you know, even on evenings, and they're going to look for the type of entertainment that's within their local community. And I think if those smart venues can really lean into that messaging and this idea of people staying and pursuing entertainment locally versus traveling regionally, those those venues will think be able to make hay during this period of time while people are avoiding making big travel plans.

SPEAKER_02 9:03

The the staycation concept is a little bit broader, which is uh I'm in California and I'm going to take the family to Florida. No, I'm not going to take them to Florida. Now I'm going to stay uh at uh six flags closer uh uh to our home in California. Staytainment, trademark LBX collective, um, is a fantastic term to really uh let's be honest. Staycation has a cloud above it, it you know, it ushers memories uh of uh the previous financial uh upturns in uh 2008, and so they don't really like those memories re-excised in front of them. So staytainment it is, Brandon, and I will be pushing that in the uh Stinger report and uh uh uh other writing now. Uh, and let's hope that the industry can find that much more palatable.

SPEAKER_00 9:58

Yeah, absolutely.

Staytainment As The Survival Play

SPEAKER_02 10:00

Moving on and into the beers, welcoming the continual movements within the C-suites, our friends at Sky Zone uh welcome an individual that is going to be taking on quite an interesting position. Sumi will be not just the vice president, but she will also uh be helping to kind of steer the global positioning for Sky Zone going forward. Sky Zone is at that kind of point where they need uh you know, need to take a close look at their operation, the guest experience, uh, their plans for uh future rollouts and how they compete in the active entertainment market as it goes through changes. So this is a very smart change, especially when you look at the experience that this individual brings to the position.

SPEAKER_00 10:52

It is interesting that her focus will be on brand transformation and then driving growth across live entertainment. Uh, obviously, Sky Zone being a sports, uh, you know, obviously uh an adventure park brand. You know, one active play exactly. I wonder what type of live entertainment, hospitality components that uh that they're looking to bring into their venues potentially, um, given her background in that type of brand transformation.

SPEAKER_02 11:22

Every active entertainment facility that I monitor has now started to look at a live experience component to that, be that a stage and a DJ on a Friday night, to uh actually having VACTOR or actor-based uh uh entertainment with real people dealing with uh real guests. The active entertainment market's going through a major change. Uh we reported uh what we saw at the AAA Expo a few sound offs ago. That will mean that I think we're going to see a lot more active entertainment venues opening up, more competition for Sky Zone, so they have to position themselves accordingly. Moving on, and an interesting one here. We don't often see the federals getting involved, but a federal court has uh started uh an investigation into Lucky Stripes Entertainment as a plaintiff uh complains that they have uh attempted to establish a monopoly position. The argument goes, and I'm not going to go into the depth of this, we touch upon this in um the Stinger report, but uh fundamentally a group of individuals put a case uh out there that says that as bowlers, uh they feel that uh Lucky Stripes and the Bowlero chains have uh kind of monopolized the market. They've been entering into competitive pricing, making it difficult for these individuals uh uh to find cost-effective bowling for their sports bowling. And I would argue that this is kind of the boutique bowling entertainment model pushing out the more traditional bowling uh uh audience, as it were. There's also a lot more things that could be added to this case. Uh, protective practice on price fixing amongst uh groups of uh operations is a very serious thing, and it wouldn't help our industry to have an operation such as uh Lucky Strikes Entertainment hauled over the coals by a federal uh government. Again, I'm waiting to hear how the AAMA will be positioning themselves regarding uh this uh particular uh legal challenge.

SPEAKER_00 13:32

Yeah, I also wonder where BPE, the BPAA's uh position is on something like this, given the fact that they have to they have to probably walk a very fine line between not upsetting their PBA bowlers, uh, you know, and and you know league bowlers, but also recognizing that a large portion of their membership has uh is not only Lucky Strike locations, but a large portion of the membership has these types of boutique bowling, um, family entertainment venues with bowling in them. And uh and look, this you're probably right. This has a lot more to do with the fact that when Lucky Strike takes over Bolero, you probably see league bowling get impacted, and the regular bowlers, the avid bowlers are the ones that get the hit while they go through rebrands and try to make them into more uh broader family entertainment-based entertainment. So um this I don't know how you could argue that they have a monopoly. They only own 300 of like 6,000 bowling locations in the United States. So they own a lot, right? They uh a significant portion of them, but it's certainly not a monopoly.

SPEAKER_02 14:38

It is a monopoly in a small town if uh they're the only game in uh game in town, uh, as it were. I I I I bang my head against the brick wall talking about what the association should be doing and shouldn't be doing. They are large corporations that are uh are meant to be not for profit uh and they're meant to look after all of their membership. I would argue that boutique and competitive socializing bowling is an anathema to sports bowling. So if your association supports sports bowling and those people that play and those uh people that operate sports bowling, it is very difficult to then also include string bowling uh and uh boutique bowling. It is the the you know the definition of the vampire running the blood bank. I would argue that it is time for a separation of competitive socializing, boutique bowling from the more core bowling association. But of course, I'm sure the bowling association would rather burn me alive than uh accept that as a uh as a model. But you can't hold this back. You know, at some point in time you're going to be put into an awkward position as we are now, where you can't defend both sides of the coin. You're going to have to pick a side. And if the Trade Association for the bowling sector supports this side of the coin, the uh the legal challenge, the complaint about uh the monopoly and the pricing, then uh it would be logical for Lucky Strikes to say we'll take our toys somewhere else. And that could start a domino effect that would be better to address now, openly, rather than in a feud in a few months or years' time.

Sky Zone Leadership And Live Experiences

SPEAKER_02 16:27

Moving on, and an interesting one here uh Pizza Hut going through some quite radical changes. Uh, you know, they run about uh, let's see, the last count I had is that they have about 93, 94 normal, and I use I'll explain what I mean by normal Pizza Hut venues. Go in, order your Pizza Hut, sit down, eat it. But out of those 93, they have 38, what are called classic locations, or as I like to call them, old school venues. And these old school venues have amusement machines in them. And it was interesting. I was reading a report kind of saying that these old school venues offer a nostalgia and an audience appeal that is very strong, and that uh Pizza Hut is actually considering changing more of their uh venues or uh restaurants, uh normal restaurants, into classic restaurants. And that also kind of means that we in the amusement sector have yet again another hospitality amusement mix uh that plays off of our historic, you know, our retro history uh kind of uh uh approach to uh business. We are a um uh Jekyll and Hyde industry. We have an industry that is trying to look futuristric and uh applying the latest technology and the biggest screens and uh largest LEDs, uh, but then also we have uh part of our industry that feeds a nostalgic classic arcade model. And again, like with the bowling sector, we in the amusement trade industry need to come to terms with that and maybe need to have demarcation between the two so they can better support the customer base.

SPEAKER_00 18:15

Yeah. I I love everything about this transition that Pizza Hut is going through right now. Um, I mean, not only does uh does the 80s and nostalgia sell, um, you know, we've we've talked about uh nostalgia um it infused in entertainment uh in the past, um, but we but but this is uh you know it is they're they're even bringing back some of the what I thought was very successful campaigns like the Book It campaign. So you go and you read uh X number of books. This is something I participated in as a child in the 80s, uh, and you you go and you read X number of books, you come in, you get a free personal pan pizza. Now, whether or not it's free personal pan pizza anymore, or it'll be something different, um, it's encouraging kids to read. And it was a highly, very, very successful program at the time that they you know ended up shutting down over the course of the 90s. So anyway, I'm excited to see Pizza Hut revisiting their roots, both from an aesthetic standpoint to all the way down to the tableclaws, to the red cups, and uh and even the salad bar. So we'll see what this uh, you know, how they how they do uh with this transition, but I think that they've got the right read on the current culture.

SPEAKER_02 19:20

I think they've got the right read. They need to be very careful how they roll this out, that they don't throw the baby out with the bath water. I have very happy memories of the Pizza Hut approach from you know what they would call the uh classic location, and that worked. It was a community model, and again, you need to build upon the community as much as the brand. Moving on, and Put Shack. Uh, I had alluded to a couple of sound-offs ago that we were going to be hearing some numbers from Put Shack that would curl my hair, and these numbers came in uh not reported by as many people as I well, uh, my old phrase uh success has many fathers, blah, blah, blah. Well, uh, this poor old orphan was uh left uh uh left alone. We saw a 15% drop, decline uh in the uh the revenue

Boutique Bowling Faces Federal Scrutiny

SPEAKER_02 20:15

that they were generating. That is a serious decline. We can't sugarcoat it. Um I am looking at UK venue numbers here uh that are being reported, though at closer examination of those numbers, it looked like that there were some American facility uh revenue numbers added to that. So again, a confusing model not helped by a company that didn't really want to shout too loudly that they had seen this kind of impact in business. Uh, of course, the C-suite were quick to uh, you know, sort of say that they were looking at these uh number drops as uh part of the impact as they're restructuring themselves and that they will be uh undertaking major developments to uh you know reinvigorate their audience and revenue numbers. And surprise, surprise, a couple of days later we got news for the for the first time in five years. So this chain's been going for a period of time and they haven't changed their core menu structure in five years. Well, that's a slap on the wrist for a member of the C-suite automatically, but uh they're now talking about 50 new food and beverage brands across their uh 20 facilities, they're streamlining, so this isn't just an improvement, but they're streamlining uh the food options and the drink options uh to allow them to uh kind of utilize the same um ingredients and preparational process across multiple food uh offerings. So, you know, again, making it easier to do, shall we say, the sliders at the same time as doing the chili dogs, those type of things. Um They are also removing the number of uh individual uh items that you can select from SKUs. I hate that terminology. Um, you know, their menu is now going to shrink down on average to about 170 food selectable items uh from their menu. I know we're getting into the uh secret baseball kind of you know uh minuti here, but this is important. The food component of uh a competitive socializing venue like Put Shack is usually in the 40 to 50 percent of the revenue generation model originally when Put Shack was first concept. We've seen it move to 40 and we've seen it move to 60 uh with uh their uh changing in their uh their food pricing model and their package pricing model. It's also important to understand that I've focused more on the food there than I have on the beverages, the uh the drink side there. And I wouldn't be surprised that if we did a little bit more research, we would see that the drinks and cocktails menu hasn't languished for five years unchanged, uh, and that that has seen more churn and change and investment from the C-suite than the food, which has been taken, I think, a little bit for granted.

SPEAKER_00 23:26

Well, when you deal with a single attraction cus uh competitive socializing model like Put Shack or like Flight Club or uh the like Pool House or F1 Arcade or any of these that have single attractions, your food has to be the secondary, if not the primary, attraction. Um, you know, you have in your food and drinks, I should say. So that menu has to be refreshed, it has to be on point, the price points have to be right, the packaging has to be done right, you have to experiment continually because that is your only other thing you have available besides your core attraction. And in a place like Put Shack, once I've done those three courses, unless I really fucking like mini golf, I'm not going back again. And so the food better be damn good if I'm gonna go back with my other friend to go play the first time they've done Put Shack. And so I'm gonna go again, knowing that at least I'm gonna get some good food, some good drinks while I'm there and hang out with my friends. So this is a real issue for them and for any competitive socializing venue that has a single attraction. And frankly, really any social entertainment venue should have a strong food and beverage program no matter what. But if you have a single attraction, this cannot be overlooked like they have uh the last five years. And, you know, I think of the group, the emerging fund group, and they are loaded up with these uh with Put Shack and all of these single attraction models. And when we talk about the lack of closures, I get really nervous when I see these types of numbers coming from somebody or a group that's been around for five years and has four locations to focus on in the UK, and you're seeing a 15% decline across those four locations over the course of a over the course of the year. That's really serious. And if I'm a merging fund who's been investing in these types of attractions and venues, I'm getting a little nervous and they need to have some real strong conversations with their founders and CEOs of these uh and C-suites of these groups.

SPEAKER_02 25:27

Well, their founders have uh taken their time to open our pool house, so which is also now an investment from emerging fund. So the uh vampire running the blood bank kind of syndrome writ large, and uh I can tell you now that uh our friend, the new CEO uh at Top Golf, the other components to all of this, uh, because Top Golf's uh founders then went on to do Put Check and then created the uh operation uh that we see in front of us, uh, that they're also re-evaluating their menu and food offering. I am expecting heads to roll over this, so watch this space. Uh we will see, we will see. Uh an operation that uh has uh kept a very close eye. I would say the gold standard of the food uh menu in competitive socializing single sites is uh Flight Club celebrating 10 years. Uh and uh they've made a big play of their one billionth dart throw uh that took place during May. Um, you know, they've had 15 million guests go through their UK venues. Uh they still seem, you know, whenever I'm doing evaluation checks on both UK as well as American flight club venues, they always seem to have a very strong social venue vibe, not just based upon private hire, but on uh work groups prepare to go in, uh group that plays together, stays together kind of mentality. Uh, I am I am aware that now Flight Club is looking at the next 10 years very closely and how they're going to redress their model

Pizza Hut Bets On Nostalgia Arcades

SPEAKER_02 27:10

uh and improve and build upon their one billionth dart throw. But uh again, this is an example of a company that really can survive within the single entertainment offering uh competitive socializing market without the swings and roundabouts that we see from others.

SPEAKER_00 27:30

I mean, it's certainly true. Um, but I also get a little bit nervous. Um now, you know, darts is at least something that you can come and play, you know, various various games over and over, and you know, that kind of thing, maybe, but uh, you know, especially if you're a Dart player, you know, Dart lover like myself. Uh, but it's still a single attraction model, and I just don't know how long that is sustainable.

SPEAKER_02 27:57

And remember the competition that they're now going up with uh post 10 years, when they first started the first five years, they were the only game in town, pardon the pun. But now they are going up against venues that are installing in not gamified darts, but augmented darts. And many people make the mistake of thinking Flight Club is augmented darts, uh kind, it's gamified darts. It's still uh a normal traditional dartboard, just with a tracking system that does the scoring and creates unique gamification so that you can play. It is not projecting onto the dartboard, it is not creating unique gamified uh elements, it is not marrying the competitive socializing with the gamified with the tournament side. And those maybe are the areas that they're going to have to look at to stay relevant, or as you say, uh they're going to end up being a one and done no matter how popular their uh cheesy nachos are. We touched upon this in open and shut, uh, our friends at CA Sega Droipolis. Um, even though Sega is in the name Sega Japan or Sega Amusement are not really directly involved anymore with uh the operation, they run the Dryopolis uh Mitch Use Leisure Entertainment facility chain in China and Japan, and they also run their Dryopolis sports brand, which is active entertainment, uh, very similar to what our friends at Bandai Namco and Round One do. Uh Active Entertainment. Well, surprise, surprise, we had the opening of a brand new component, uh Dryopolis Sports X, and that X stands for digital sports amusement. This is much more of what I call immersive active entertainment uh components rather than just the physical uh trampoline and uh dodgeball uh elements. They have really doubled down illuminated floors, uh uh systems. Uh you know, our friends at uh Valo Arena, uh sorry, uh Valo Motion have got a Valo Arena in there as well as some other entertainment, much more digital, much more interactive, and a departure from the original three uh Jropolis sports venues, as in being uh really pivoting towards what I call the next generation of active entertainment. I would argue that what is being encapsulated here is the future of active entertainment and the trampoline business going forwards internationally. And if you're in the active entertainment and you're not taking a close look at what our friends at Round One are doing, at what our friends at Bandai Namco have done with uh their uh active entertainment interactive experience. And now, with this digital sports amusement environment, then you're going to be very unhappy when it turns up in your back garden. You look archaic.

SPEAKER_00 30:51

Exactly. They have uh very few traditional active play elements, they have ninja course and you know a few other things like that, but they're gamified aspects of those, even those more traditional, uh traditional components. So not everything is quote unquote digital, like a Valor Arena or Pixel Floor or even Rugged's uh football, uh you know, soccer slash you know, football um experience. But uh they they have a good mix and uh completely agree with you. This is the future of active play. It doesn't mean that kids still don't want to jump on some trampolines here and there, but the days of uh large floors coated in trampolines and uh and then maybe a climbing wall are over. This is what kids are looking for from the active entertainment standpoint.

SPEAKER_02 31:38

Yes, uh the next generation, Gen Alpha, as we've touched upon before, uh they don't just want to consume, they want to create and they want to be active. Uh and again, be prepared that active entertainment is going to be the big rollout trend in the next couple of months, let alone years, but it won't be your traditional trampoline approach. One aspect, if you're doing your research, also look at how they're doing their scoring and their uh uh wristband operation in these venues. Again, another example of the gamification and the hook to bring the people back again to play rather than a one-and-done approach. Uh Australia, we talked about uh our friends at CHE Group uh and uh various uh licenses that they had acquired for their ever-expanding competitive socializing, hospitality, cinematainment uh operation. They've added a new partnership, strategic partnership to that. Uh and it's our friends at Escape. Escape Entertainment is a company that we've had involvements with for the sake of transparency. Uh they do uh competitive socializing racing, sim racing systems that they set up uh both at corporate level

Put Shack Revenue Drop And Menu Reset

SPEAKER_02 32:55

for corporate parties and brand launches, uh, but they also do these installations for uh mixed-use ledger entertainment venues to what want to have uh sim racing component, mainly in Japan. Now they're going to be bringing that expertise to the Australian market, and I wouldn't be surprised that uh CHE isn't sitting on a master plan of bringing all of these IPs that they've got. Remember, they own the top golf uh property, uh uh the use of the top golf property in Australia. That also includes Batfast, uh, Kidzania, Rec Room, uh, Intens City. They they have quite a uh a hand on popular, competitive, uh, mixed-use leisure uh and LBE entertainment. Just think of what they could roll all of this into and spit out a brand new brand into the Australian market, which is incredibly hungry for uh social entertainment at the moment.

SPEAKER_00 33:56

If they could really find a way to blend things, like you said, like the rec room, Bathfast, Top Golf into a multi-attraction, competitive socializing environment uh would be very, very compelling, I think, would be compelling for the US market, let alone the Australian market, that star for this type of uh this type of entertainment. So it would be interesting to see what Excape does, given the fact that you know, given their current experience in basically VR and sims and experiential marketing.

SPEAKER_02 34:26

You know, the the team at Escape have uh you know a lot of experience just beyond running sim racing, as you've touched upon. It is also that that brand. Uh whatever you would build from this mix, and I've played on the back of uh uh a wet napkin, what you could do with the best bits from all of those brands, especially IntenCity and the Rec Room. There are elements there that could be put into a new kind of operation that would be extremely compelling, even beyond what our friends uh to Gravity Max have achieved. It is the next generation of the competitive socializing venue, and you need to have these brands brought together under one roof. We will wait and see what they build. Uh I was toying with uh actually including this uh one. I I don't normally uh focus on uh you know when private equity jumps in and invests in a corporation. I don't really, it doesn't feel to me like a merger or an acquisition. It just feels like private equity doing what private equity does. But I think it's important that we touch upon this. You know, our friends at Periscope Equity uh have uh invested, or so we say, according to the uh uh uh announcement, formed a strategic partnership with Amusement Connect, Amusement Connect, a uh established uh smart payment system uh provider, card payment system, how they're going to grow their business, how they're going to compete in a very crowded, shark-filled water. I am sure that equity money is going to allow them to uh at least position themselves strategically.

SPEAKER_00 36:11

This is an interesting one, not what I expected to see come out of the news, uh, certainly from Amusement Connect. Uh, you know, they've uh obviously uh famously been uh bootstrapped for for most of their lifetime and uh to see this type of uh infusion of equity capital come into them when you know there had been questions around what uh what they were going to do next. Um, you know, as Frank you know was looking around at uh what the next opportunity was. Um well, this certainly now has locked them into a certain trajectory. Uh they're not going to uh pursue some sort of MA or anything else like at this point. Well, now that they've got uh some private equity behind them, the private equity is going to want to see a significant upside and return, and they're gonna want to see it pretty quickly. Um, but uh I think we're gonna see Amusement Connect in uh evolve pretty pretty quickly over the next few years as a result of this infusion.

SPEAKER_02 37:08

We have two directions that it can go in. They can use this infusion of uh capital, which will come with a whole load of strings attached, painful strings attached, as we know, with uh equity investment. Uh they they will have a period of four years maximum to uh leverage uh their growth in the markets. Is that going to be the acquisition of other companies uh that are looking vulnerable? Interesting direction to go? Is this uh coming up with a brand new platform that dominates the market? Or is this to take the money and run, wait a certain period of time, and then the operation goes through a major change? We will watch this with interest, though again, I you know I have a particular perspective regarding private equity investment into companies, and they usually follow a similar trajectory as I think we're going to see with this one. Anyway, the Taurus of Pain for those that follow of where uh these announcements fall into that sector. And moving on, we jump into the tech and IP. Uh Kings Island has dropped in a uh brand new dark ride, an interactive dark ride experience, and the press release comes out to promote those involved with it. It is the Sally Dark Ride uh uh ride system at animatronics and femality, but our friends at Altface have supplied the interactive torch system that gives the gamification to this dark ride. Uh it is it is what it is. Uh, and if you're interested in how the dark ride business is now pivoted towards being an interactive entertainment attraction, it kind of you know underpins that you're not going to see many passive dark rides going around. And then, surprise, surprise, we have an announcement from uh the other big dog uh in the uh dark ride uh and 4D theatre market, our friends at Bull Move, and they have uh come up with a brand new, well, they've been come up with a brand new IP that fits into their model again, uh, this Wild West cartoon experience built upon what they did with their popcorn uh experience, and you know, it's 2.0 interactive dark ride. Uh, is it really, you know, is it a major development or is it just par for the course of this is what the dark ride market is? These are attractions that take a reasonable-sized audience, can fit into mid-scale and large-scale venue locations and offer an interactive entertainment experience that hopefully has a repeat value that the traditional dark ride doesn't have. Does what it says on the table.

SPEAKER_00 39:54

Yeah, I mean, look, the the original interactive dark ride was, I would argue, pioneered by Disney in the Buzz Lightyear attraction and also the Toy Story attraction to California Adventure. Um, and uh, you know, we could argue where the, you know, what level of interactivity, but like, you know, shooting things at a screen or shooting lasers at uh things, you know, while you move through a dark ride experience has been around for a long time. I think the difference is you have a Sally Dark Rides or you have a Triotech who you know partnered with bold move, you know, bold move nation here for this particular uh attraction, you know, has their smash and reload attraction. This is like bringing that type of technology to a smaller form factor. Um and and so you know, they have the smash and reload is really interesting in that they can be in a pretty small square footage space in order to deliver uh a pretty fun and engaging uh interactive dark ride. And that's not the traditional dark ride, it requires lots of lots of space to move around and move from you know screen to screen, scene to scene, etc. So anyway, I would maybe call this a the the dark ride 2.0. Um, but I think what's more unique about both this this new uh the Smash Reload installation as well as the Phantom uh the uh I'm forgetting the name of the the Sally Dark Ride one. I should know it because it was all over LinkedIn for like weeks and months. Um, but uh the Phantom Theater opening nightmare attraction is their compact nature, and I think that's what's uh unique because smaller venues can think about putting in this type of attraction.

SPEAKER_02 41:28

Mid-scale. I would argue that it was the Men in Black um uh Svalley uh Dark Ride attraction that really nailed down the interactive uh one. I I noticed around the same time that uh Buzz Light Year, Midway, uh Extravaganza came out, but you know one is screen, one isn't screen. Uh, and we're really heading towards a screen-based where the phantom theatre is uh physical uh light shooting uh experience, uh, and the Cactus Valley is a digital screen experience. We're now converging where we have to just look at this 2.0 interactive dark experience as a digital environment. Moving on, and we touched upon this uh a little bit in Open and Shots, the opening of uh the first Black Mirror virtual uh experience, you know, adventure, what we've talked about before, uh IP-based uh theater or traveling experience, put headset on, move around immersive uh experience in groups, and in this particular case with the Black Mirror experience, you also have some sit-down uh navigational uh components to this. Anyway, the first chances to see this before the venue opened in Montreal uh this uh last month. Uh we saw the uh appearance at the Cannes Festival, where it uh received great plaudits for its narrative and story, you know, universe who've worked very hard with Banjay Live Studios. There's you know, really put together something based very compellingly uh on the TV series universe. All that

Flight Club At Ten And New Rivals

SPEAKER_02 43:20

said, all that said, this is one of many of the VR adventure systems that I've been harping on about for the last few months, if not years, and it's a kind of underpinning, a very important component that doesn't sit well with the consumer VR narrative, which is we have a strong business model here in the location based entertainment market using head mounted display VR technology. And I know a lot of investors are going to start to ask the questions how come these guys are so successful? What happened in consumer VR? Why we're not successful? Though I know that there's a lot of astro technology. Turfing going on, trying to paint what we're doing in location-based entertainment is brand new and has never been seen before to try and cover the blushes of uh 80 billion down the drain.

SPEAKER_00 44:14

Apologies, I was muted there for a second. Um, the I think what's interesting about the Black Mirror experience is it's not something we see very often for these VR adventures, is the fact that you can join up with a group of up to six people and have a unified, cohesive, uh, you know, collaborative experience um ultimately going through. And that this is a little bit of like a choose your own adventure model. It's not a passive experience, it's not a traditional escape room that has a yes-no type of uh situation, but uh you do get to make your way, come guide your way. And and to that end, you know, you potentially could have multiple rounds where you can go through this experience and uh and make different choices and see if you have a different experience or outcome.

SPEAKER_02 45:01

Yes. Uh and you know, I'm old enough in this sector to remember when uh Backlight uh did their uh Chanel uh theater experience, the dancing VR, where again it was groups being able to pick the direction of where the narrative went, and then you had a different outcome at the end of that. That has been taken on by Felix and Paul and uh by Universe and by We VR and other companies to create these kinds of virtual adventures. And sooner that the industry recognizes this is a money-generating entertainment experience, as compelling as an interactive dark ride, uh, then uh our industry will be able to benefit from the revenue that this generates. Um, an interesting report. If you go to the Stinger, uh Friends of the Stinger report on Facebook or our LinkedIn page, uh you'll be able to uh click and get the report. But it talks about how exagaming, the use of fitness, uh fitness technology uh married with gamification, be that screen-based gaming or a game model to the fitness, uh is very useful and very supportive of adolescence and uh can deal with depression and motivation. As we're dealing with what some people like to call a lost generation, the COVID victims who are now trying to re-engage uh, the audience is trying to re-engage with society, as it were, then I get the feeling that exagaming, maybe married to active entertainment, is going to take uh a much greater lead. I've been talking about exagaming since the first applications when a dance-dance floor was used in the school uh to help with uh schoolroom obesity. This this technology is waiting for its time to shine. And you know, if you jump back to the Joyopolis Sport X coverage we're just talking about, you kind of see how all these strings are connected.

SPEAKER_00 47:08

It's not surprising at all that it shows positive effects for adolescents, uh, anything I think fitness-based, so you know, active play in general. But I think what is unique about the fitness-based gamification or or you know, gamified active play is that not only is it engaging the physical body and activity, but also really engaging the mind and motor skills and eye tracking and everything else that you do when playing a video game or playing some other type of uh entertainment attraction, but now combining that with the fitness aspect. And so I think, of course, we're going to see positive effects for adolescents. And I think this is why we are going to see more active play venues like Joy Paulis in uh, you know, in in you know, other markets.

SPEAKER_02 47:53

The consumer games industry is concerned that the audience is changing. I don't believe the audience has changed, it's just that they focused on one particular genre. We have to remember how popular the Wii game system was, active uh simple play. It didn't disappear, it's just that the corporations decided to go for what they thought was a much more lucrative uh game as a service kind of approach. We are the beneficiaries of this, really, because we can apply active entertainment. We have the space. You know, maybe most households don't have that space to get that active as they were when the uh Wiimote and the Nintendo and the Sony systems had those uh uh computer tracking systems. If we don't build upon this, we will lose out. There's an audience out there that benefits from this, and the scientific studies prove that it is beneficial, and the one thing I want our

Joypolis Sport X Signals Active Play 2.0

SPEAKER_02 48:55

industry to be is beneficial to our audience. Uh interesting one. Uh a Japanese press release translated badly and took a lot of uh brain power to uh to this uh to dissemble. Um, and I noticed that we ran this uh uh announcement first, and it took uh the rest of the uh the media about a couple of days to catch up, as they had to go through the same process of hunting down the press release and translating it. Pokemon is big, so having a story saying that a couple of companies are joining together to develop location-based entertainment venues based on uh the Pokemon IP causes people to spray tea or coffee across their laptop keyboards. That is to be expected. Uh Mitsui uh is known for its uh you know its uh operations out there. It has uh location-based credentials as well as IP. And we know Moment Factory, well known uh in location-based entertainment and brand uh positioning. So we're going to have to wait for Japan to have the first of these Pokemon location-based entertainment facilities. I get the feeling that these will be very similar to what we've seen with the Cryola or the um the NERF or the Transformer kind of venues, a mixture of IP product placement uh with mid-scale interactive entertainment uh attractions within uh set space. But again, we will wait and see this. And just to be clear, this is a Japanese-focused launch uh initially with uh the plans after the first venue opening up in 2027. We will then see a rollout across Europe. So, again, we're still trying to dissemble what was actually meant by the Japanese press release directly, and I think it'd be better just to wait for the first venue to open and make the judgment there.

SPEAKER_00 50:54

I think that's probably true, but what stands out to me is that is the fact, and in I you know, I didn't know this until fairly recently, you know, meaning the last uh six months or so, is that Pokemon is a joint-owned venture, jointly owned venture, the Pokemon group anyway, between Nintendo Game Freak and Creatures Inc. and Nintendo holding a uh a not a majority stake, but a significant stake, about 35% or so. Uh maybe it's a little higher. Okay, uh, but uh pretty significant stake in the joint venture of Pokemon. Um, and uh this is uh not this is this is really a signal to me, anyway, that Nintendo is beginning to think significantly more about location-based entertainment. Obviously, they've done, they have their partnership with NBC Universal for the Super Nintendo worlds at their different locations, but this is really putting their toe in the water from a location-based entertainment side. And uh, you know, this this has this has some some notes of uh some hints of Netflix, a future Netflix house, but Nintendo house uh to some extent. And so, you know, we'll see where this goes, but uh could be another growing uh transmedia brand that is moving into LBE.

SPEAKER_02 52:07

I've always understood it when doing the research into Pokemon that the Pokemon group that was created between Nintendo uh and the owners of the IP that then expanded to a three-way position that Nintendo's always had a veto vote. So that would be in the 35 to 45 uh percent uh control rate. That's as far as I understand it. Please correct me if I'm wrong there. Uh and I totally agree with you, this is one of the latest shoes to drop that has a Nintendo uh soul to it, shall we say. Um, we've uh also seen um Nintendo investing in some location-based entertainment uh projects using their IP. I will not be surprised when I have the press release, hopefully in better English, come across my table telling me that Nintendo will be opening up Nintendo House in Tokyo. Uh there will be a hundred thousand square, multiple floors, and we'll have a Pokemon uh component to it. This is that toe in the water that gives them the information that at some point in time we will see an executive business card from Nintendo that says Nintendo president of experiences, and that will be the beginning. And that will be across all of the sectors, and we'll touch upon that a little later on.

Australia Partnerships And The Next Mega Venue

SPEAKER_02 53:28

Hasbro, we touched upon this in Sound Off that uh they had a flurry of uh Qatar openings. The Play-Doh facility and the NERF facilities open. We already have a Nerf facility in Singapore as well as in Europe, if I remember rightly. This is the first Play-Doh venue, I think, and you describe it very well as a kind of a Crayola approach to uh the experience venue. Again, this is Hasbro's experience team uh actually seeing uh the venues or the fruit of their activities as venues open. And again, I think seven is involved with this, who are very strong in the Middle East market. Again, linking in a major rollout of these kinds of IP-laden location-based venues. Moving on, and IP uh borrowing from amusement or amusement borrowing from IP, and our friends at Lego have rolled out uh their Tetris arcade machine. Not really, it's playable. You can actually play it. Uh, it's a pretty impressive piece of kit. I'm sure it's going to end up on your mantle at some point in time.

SPEAKER_00 54:42

I'm like, I'm like, oh man, I gotta find this one. Yeah, yeah.

SPEAKER_02 54:45

It's uh it's more aimed at a younger audience. You know, you can pull the open the backup and there's a play environment inside the back of it, so it's it's a twofold, but again, it is IP. Um, I forget who owns the Tetris IP at the moment. I think Nintendo has the largest stake in that.

SPEAKER_00 55:04

Yes, and also Nintendo. This is exactly.

SPEAKER_02 55:08

Uh, you know, uh for sake of transparency, I was actually involved with uh bringing uh Tetris over from uh Hungary, uh Budapest, uh, or Russia Hungary uh into the West. I was an employee of Andromeda Software. Watch the film if you want the whole story.

SPEAKER_00 55:25

Um very compelling film.

SPEAKER_02 55:29

Yes, a lot of people involved with it sadly were airbrushed out to try and make it a story that could be uh uh relayed comparable, but you know, it had the Maxwells involved with it and it had governments and secrecy and stuff like that. Nintendo's involvement with Tetro has been, you know, it is the most successful selling video game because of the number of sales across multiple platforms. Uh for Lego to do, this is a recognizable IP that can be dropped uh into their universe of transmedia uh dominance. And that kind of leads us to the talking point today, which was the holding of uh the licensing expo in America a couple of weeks ago from the time of recording. It didn't get the coverage I think it deserved. Uh, it is difficult, I know, for some in the amusement and the attractions industry to understand the separations between various industries and the impact that they have until it's too late, and then suddenly it's shock horror and large features trying to explain to their readership why they've omitted to talk about it. Those that suffer the Stinger Report and my sound-offs understand that you know I like those balls of string to connect everything together. Licensing Expo is the big one uh for the North American market. It it brings the brands and those that are licensing and those that uh are looking to acquire IP. You know, a lot of the arcade machines we will see next year that have IP will have been signed at this event. And I know a number of corporations, the raw thrills of this world, that were involved in high-level discussions on what their next rollouts will be. Um, you know, 12,000 attendees can't be wrong. This is powerhouse uh for the industry, and an industry that is valued at you know through over nearly 400 billion dollars. You know, it causes a lot of people to sit up and listen from the film industry, the toy, the brand, uh, the apparel industry, and the location-based entertainment industry. Sega were pushing themselves heavy there. They were celebrating the anniversary of Sonic and what they're intending to do with the brand. They were also pushing very heavily what they're doing with Angry Birds and their brands. And a lot of this push was to try and brush under the carpet the losses that they had uh experienced last year, as we uh reported on in a recent sound off. Uh, they really want to brush themselves off and refocus with Rovio as part of Sega's operation and with the uh the Angry Birds brand still out there and appearing in multiple properties, uh, IP platforms and brand ins. They want that to happen to Sonic as well. So they shared the stage. Uh, and it is clear that Sega are working very heavily on their transmedia persona uh in the international market, as we've seen at ILP

Private Equity Fuels Cashless Platform Battles

SPEAKER_02 58:32

over the last couple of years, and now as uh is being seen in the licensing sector.

SPEAKER_00 58:40

I was just I was just gonna comment uh how how old is that uh 35th year, uh 35th anniversary of Sana makes me feel. So anyway, that's all.

SPEAKER_02 58:49

Yeah. I was uh yeah, I I was uh having to point out the first time I saw Sonic the Hedgehog as a an air freshener dangling in a uh video game 35 years ago at that launch when the representatives of Sega Japan had come over with uh the their new racing game to show to the uh Western market, were pointing out that that little logo in the corner was going to be a very important factor because at that point in time Sega Amusement was the only Sega, uh the only Japanese amusement company that didn't have a mascot, uh dedicated mascot. And this was an engineered mascot that then became got a life of its own. Now we're seeing Sonic again injected into Sega's future to help drive the corporation. Another corporation with a very powerful mascot uh selling uh uh celebrating multiple anniversaries, but also its own dedicated day. And I wonder how many of you in May celebrated Put-Man Day. Uh yeah, whatever. Uh it's uh it is a uh it is a dedicated day and it is a dedicated opportunity for Bandai Namco to uh push their brand and their mascot. And uh during licensing expo, it was revealed that Put-Man now has a brand new animated short, which is going to expand into a series depending on audience reaction. Again, transmedia writ large, an uh over 40-year-old uh uh Japanese amusement mascot, still has uh the power to draw major brand recognition. One of the uh conference, there were two conference sessions that directly talked to us. Uh not many members from our industry attended, but we had uh representation there. One of those conference sessions was how location-based entertainment is captivating an older audience, and they had speakers from Paramount Global there and from the themed uh entertainment association. So at least the flag was waved from uh our industry direct, and it was kind of pointing towards the licensed entertainment venues that depend on IP. The picture I picked was uh Monopoly Live, but you could have also had Monopoly Steakhouse if you wanted to take it to extremes. Uh, or you you know you could have had the uh the Minecraft experience. These are a mixed audience, not just families, but also social entertainment groups, which obviously, if they're drinking, consuming, and dining, the hospitality components are a much older audience than, say, the previous target audience. And that target audience is also being wowed uh because they're game players. The target audience for the licensing and branding industry do not just uh buy coffee and drive cars and have mortgages and go on holidays and buy buy the latest fashions, but they're also gamers. And it is hard, I know, for the older members of uh the uh certain of the industries to admit, but a large percentage of the audience that plays these games are active gamers, not casual gamers. Uh, and so now using high-level IP uh to wrap around your products is essential. Uh, on stage, representatives from uh CD Project Red, behind the cyberpunk phenomena, and of course, from Ubisoft uh and you know, we in the uh amusement industry have seen those two IP brands writ large uh in recent launches. Uh again, the cyberpunk uh racing experience from Ubisoft, sorry, from UNIS has yet to uh uh actually be sold into the market, so we can't talk about how popular that is going to be. But uh LAI has proven that uh it had uh had legs with their shooting game based on that IP. And LAI, of course, also has a relationship with Ubisoft, uh, and they have rolled out at least two products, uh as well as redemption products that have been based on Ubisoft IP. It is what it is. The Transmedia Impact really

Dark Rides Shrink And Go Interactive

SPEAKER_02 1:03:13

I didn't hear the term transmedia mentioned that much at licensing expo from the information that we uh collected, but it it was there lurking in the background, uh, and one of those that best uh presents that is Netflix. And Netflix was showing a lot of crossover of uh collectible toys, apparel, and all of that based upon IP that they have in the marketplace uh that is built off of their streaming TV series, and they have now doubled down on this, and uh I think all of the other streaming services are waking up to the fact that if they sit on their laurels any longer and not join this battle, then they're going to be run over by the you know the steamroller that is the Netflix system. And again, Netflix has the benefit of three positionings: streaming service, its uh you know, product IP placement, and its location-based entertainment digital environment. And all of these components are all joined together and generating vast amounts of revenue, which others, such as Paramount, uh, will be uh trying to emulate and catch up with. That's a quick rush through what was a uh licensing expo. We'll go into a little bit more detail in the Stinger report uh on particular IPs that were revealed that will be coming into our sector. The next big bash will be the London Brown licensing expo in October. Uh again, we will be attending that. That will be a very important event. It is just before the uh the major event in Orlando, uh ILPA, and it is just after the London uh uh IEALPA Europe Expo, you know, a month after this. And I think some of the IP that we will be seeing revealed at the September show will be double down at the branding and licensing expo, and then will be really released uh uh at IALPA. It is interesting how this works for the IALPA end of year uh operation, you know, to have the September European event, then the uh the branding event, and then the big show. These feel all connected, though it is just how things have formulated themselves.

The Trade Show Calendar Dominoes

SPEAKER_00 1:05:36

Yeah, I mean, I don't know if there's anything they can do about it, although it would have been been a lot better had this one been uh given given that the IAPA uh expo Europe is in London this year, uh, to have those two co located or at least closer together.

SPEAKER_02 1:05:52

Same location. So literally they pull everything down, count a week, and then build everything up. And I wouldn't be surprised like last. Year's uh London brand licensing expo that there'll be a lot of amusement product on the show floor. Uh there's a lot happening regarding uh the London uh event for IALPA. We will touch upon that in later sound offs as we get closer uh to the September event. Uh currently, obviously, we have the Asian IALPA uh event in Hong Kong taking place or having taken place at the time of uh recording, which will also show a lot of impact from what we touched upon at uh uh the AAA expo in China.

AWE LBEXR Awards And How To Join

SPEAKER_02 1:06:36

Anyway, just to end, and of course we're getting closer and closer, a matter of days away from AWE and the LB LBEXR uh zone that's a component of that. I am involved in the judging of uh the if you're not familiar with the Orgy Awards, it's one of the oldest awards for augmented uh uh reality or extended reality technology. It covers every aspect from consumer to AI, uh AR applications, smart glasses, commercial enterprise, all of that good stuff. And they've added a dedicated award for um location-based entertainment this year, which is going to be very prestigious. And uh, you know, if you click on the link, you can go and uh see the uh nominees that we're going to have to pick from, the finalists that we're gonna be picking from. I'm honored to be asked to be one of their judges. This carries on the judging duties that I used to do for the VR uh association and uh their awards. So it's nice to get back into the saddle, as it were, and uh judge. Put your money where your mouth is, really. Uh and then we have uh Synthesis VR making their announcement that they're going to be taking a major part of uh the show floor, promoting the success that they've established with uh being the largest of the distributors of VR content into the location-based entertainment market. That will be very interesting. We have some conference sessions set up around that. Uh, we also have a conference session which will include uh our friends at Dave and Busters, who will be talking about the application of XR into their business models going forward. So this is turning into an event which uh uh must attend if you're serious about being in this uh this market. We also have some private mixers taking place, and again, go onto the website. I think the location-based entertainment mixer may be already sold out at this stage. Uh it's been so popular. But again, uh hit us up if you have any questions uh uh regarding the event and how you can be involved in it, even at this late stage. That's it for me. The uh, of course, you've got the LinkedIn uh means of attack, the our email. We have some Stinger reports coming out, and uh we also will be looking at trying to cover a little bit more in detail the brand and licensing

Final Wrap And Next Week

SPEAKER_02 1:09:08

side uh in coverage across our services. So everything is connected.

SPEAKER_00 1:09:13

Perfect. Awesome. All right, Kevin. Well, it was a great sound off, and we will see you for number one hundred and twenty-four next week.

SPEAKER_02 1:09:21

Have a good one.