#1135 – Videogaming Bonanza Points to Future

Bringing the latest coverage of the entertainment landscape and while America may have abandoned their physical consumer game event (for now), the European equivalent proves a massive success, and gives a glimpse at the changing consumer game landscape. Meanwhile, at the same time, we have more developments in social and attraction venue markets with further acquisitions and merger developments. 

European Consumer Gaming Festival Success

The end of August saw the holding of Gamescom – the German consumer gaming expo – returning to a physical event after three-years, in Cologne, Germany. The event attracted 265,000 visitors over the days of the convention, with some 1,100 exhibitors. This was down from the 373,000 attracted to the last physical show in 2019, but was still seen as a major successful gathering for the sector. The show was not just a chance for consumer videogame manufacturers and publishers to promote the latest releases – this is also an event for the players, with signings, merchandising, live performances, and cosplay competitions. 

The impact of VR on the show floor was felt, even with the Sony PSVR2 headset scheduled for a 2023 launch – while industry poster boy Meta made the decision not to have an official presence at the European consumer game event. The company has been in an ongoing feud with the European Union, threating to pull social media platforms Facebook and Instagram out of the territory if proposed transatlantic data transfer legislation is made law from the EU. Under the “Standard Contractual Clause” (SCC), the banning of data transfers between EU and US social media collection would be prohibited with fines imposed. Along with, for a period, Meta not selling their VR headsets in Germany.

This also had ramifications for the data capture from the corporation’s VR hardware (‘Meta Quest 2’) – Meta had implemented the abandonment of the need to have Facebook login to use the VR headset this month, reverting to a new Meta login requirement. This was seen as attempting to placate a community-wide backlash towards the social media-based data mining activity. However, some felt that the move was only cosmetic, replacing one forced account login with another similar process. At the same time as Meta was reeling from media blackeyes, the backlash against the ‘Horizon World’ online multiple user VR game environment had seen Meta CEO relaunch improved avatar images after being ridiculed by the industry regarding their quality. Meanwhile, it was revealed that the chief of the VR initiative and Horizon platform had left the company for an unspecified reason.

In this febrile atmosphere, other VR headset developers hope to benefit. During Gamescom’22, the absence of an official Meta booth (although some exhibitors did have ‘Quest 2’ demonstrations on hand), there was still a very strong showing for VR at the show – such as from new leading competitor PICO. The China-based VR specialist, owned by ByteDance (owners of TikTok), had a big booth showing their current ‘Pico Neo 3’ hardware, while at the same time promoting their entry into the Western market with their new ‘Pico Neo 4’ – a system that proposes to target Meta’s ‘Quest 2’ platform, offering a cheaper solution, with new hardware capabilities, and an architecture that will be more focused on social media promotion through dedicated streaming, and connected gaming. PICO is about to announce collaborations with several game studios in support of their new platform, which is to be launched later in September.

The social media facing approach of PICO’s platform offers a more practical process for YouTubers and social media influencers to promote their VR activities. The influence of ByteDance is shaping a strategy of simple streaming from their VR platform plans. Meanwhile, in comparison, Meta and the ‘Quest 2’ have found it less than easy to use their hardware as a social media streaming platform. It is this “TikTok-generation” that PICO will be looking to influence with their existing subscription base across their social media platforms. Meta has promised that subsequent software updates to the ‘Quest 2’ would make this process easier but has yet to make good on this promise.

Along with PICO, it has been revealed that previous Meta partner manufacturer, Lenovo, will be launching their own attack at the ‘Quest 2’ – with a new standalone VR headset to be called the ‘Legion VR700’. This will be, as with all the new standalone VR headsets, powered by the Qualcomm XR2 chipset. Previously, Lenovo had partnered with Meta on the development and manufacturer of the then ‘Oculus Rift-S’ – aimed at the PC VR scene as a replacement to their ‘CV1’ hardware. However, the system was discontinued by Meta nearly 12-months after its launch, leaving many new owners feeling abandoned as Meta focused on their Quest standalone VR aspirations. Lenovo had previously been a supporter of the Microsoft ‘Windows Mixed Reality’ initiative, launching their own ‘Explorer’ range of headsets. Following the collapse of the Meta partnership, they have focused on creating their own entry platform into the standalone VR scene – and have set their sights on the ‘Meta Quest 2’. 

One of the unique selling points for the standalone VR competition is their pricing – all aiming to try and come in at a price lower than the Quest 2, which recently raised its price in an unusual move by Meta. Many saw this as a reflection on the lost revenue from abandoning their Facebook login feature, closing access to users’ data collection, while others stated this reflected the increased cost in components under the current conditions. Meta is seeming also to align their current position, as if their VR headset were a console platform claiming equivalent market penetration. In the real console hardware market, a price hike was announced from Sony for their ‘Playstation 5’ outside of the US, blamed on inflation and the “global economic situation”. This news was met with concern, and assurances from Microsoft (Xbox) and Nintendo (Switch) that they had no intention to raise their console prices. Especially in the shadow of recent news of a slowing in consumer video game sales.

Meta’s CEO was also involved in a podcast interview, where he revealed the launch of their ‘Meta Quest Pro’ would be scheduled for October 2022. It was also revealed that the new VR headset, rather than being focused on games, would be focused on “social presence” – alluding to a more work-based approach, hoping to replace the laptop, and being aimed at ‘Horizon Workrooms’ applications, with a more Mixed Reality (MR) positioning with full color passthrough. How much this new strategy has been shaped by the possible competition to the VR/MR landscape from consumer products giant Apple was underlined, when leaks suggested that the new Apple MR headset would be named ‘Reality Pro’ – and was looking at an early 2023 announcement.

The concern regarding the appearance of Apple into this scene has not only seen the Meta positioning with their proposed ‘Quest Pro’, but also the announcement of a multi-year partnership with Qualcomm on a new series of chipsets to power future VR/AR headsets. Working on next generation Snapdragon XR processors to develop a series of new platforms was revealed, but rather than exclusive development, Qualcomm revealed these chips will be available non-exclusively. Already the majority of the standalone VR headsets, such as from Lenovo, Canon, DPVR, PICO and HTC, use the current XR2 chipset series. It has been suggested that this move is to position this architecture against the advancements by Apple, as they intend to reveal their own ‘Reality Processor’ as a more powerful alternative for their MR platform. 

Returning to the show floor, the Gamescom’22 event, however, reflected the continuing popularity of consumer videogaming – even in the face of changing financial conditions. A string showing of VR came from several studios on the show floor, including developers with LBE content pedigree, showing their latest wares. Meta4 was present at the event, promoting their ‘Transformer Beyond Reality’, to be launched on the Sony ‘Playstation VR’ platform, the current generation console. The company developed their VR arena platform originally, with the ‘Chaos Jump’, and ‘Transformer VR Battle Arena’ platform that employed the StrikerVR haptic feedback system. 

Another well-known developer with LBE credentials at the Gamescom’22 gathering, was nDreams Studio, promoting the soon-to-be launched ‘Ghostbusters VR’ – another eagerly awaited VR title with a strong movie franchise tie-in. The studio has a raft of strong consumer conventional and VR titles under its belt, also having developed the free-roaming game content deployed by Zero Latency based on the Ubisoft property, with ‘Far Cry VR: Dive into Insanity’. 

Along with VR making inroads into further consumer penetration, there was also other aspects of immersive entertainment on display. One such example was the appearance of the production version of the Tilt Five holographic display platform. Long-term readers of The Stinger Report will remember the first coverage of the reflective projection AR system back in 2013, when castAR, comprising former Valve engineers, presented their concept for a reflective surface and projector mounted glasses system. Jump forward to 2022 and now as Tilt Five, the company came to Gamescom’22 with the consumer-ready version of the system, offering a compelling AR representation of the virtual playing game board (tabletop), viewed through their unique system. Impressing many that saw the system, the move now is to establish the platform as a viable games platform and to start seeing considerable sales to pay back the investment.

The inclusion of a social entertainment element to the consumer games convention, saw a special promotion between show organizers and fast-food restaurant giant McDonald’s. On the show floor were special “Better M” Cubes – these were escape room activity spaces where attendees could take part in the escape game puzzles, while at the same time the message of the fast-food giant’s important sustainability measures were presented to the gaming audience.

These cubes were dubbed the first “official McDonald’s Escape Room”, with the enclosures created for this event by escape gaming specialists LOCKED Adventures, who developed the cubes to offer an entertaining experience. Players race against the clock to solve all the puzzles within the space, with winners awarded a ‘McDonald’s Golden Card’ as prizes. The rest of the booth included mini-games and AR-based experiences, continuing to promote the self-sustainable message. 

If this was just a one-off promotional experience, or if this was part of a greater plan to incorporate official McDonald’s escape rooms on premises, was not revealed during the event. But this would represent the latest example of the “Pop-Up” attraction and marketing promotion, married to a social entertainment experience placed to gather the largest awareness from an audience. 

Gamescom’22 was a fantastic lens on the current condition of the European consumer game scene, as well as the investment by the various publishers and game studios to establish a strong connection with their player-base. Just as one consumer event ended, another one gets ready, and the details of the exhibition list of the Tokyo Game Show (TGS) 2022 were revealed. The 2021 event was virtual, but the organizers have reverted for a physical show in 2022 – and several major announcements from the Japanese consumer game scene are expected, and possibly the first chance for hands-on trials of Sony’s PSVR2 platform before launch at the end of the year. 

Social Entertainment 

The movement in the social entertainment landscape continues, with news of rebranding, reinvestment and restructuring of existing chains, as well as the investment in brand-new operational concepts. 

It was announced that Callaway, owners of the “Eatertainment” golf shooting-range experience, would be rebranding their holding company to Topgolf Callaway Brands Corp., operating some 76-venues internationally of the food-and-golf concept. This marks the latest development since the acquisition of controlling ownership of the operation in 2020. The golfing goods manufacturer’s move into hospitality has seen the Topgolf chain moving to become the largest segment of the corporation by revenue generated. The operation has an extensive rollout plan, with 11-locations in development.   

The mixing of social entertainment, under the “Eatertainment” as well as the “Immersive Dining” definitions, sees Social Entertainment gathering a much wider demographic, and with that major investment. It was announced that Orlando would be seeing an immersive indoor and outdoor space that would comprise leading social entertainment venues. To be developed in partnership between Live! Hospitality & Entertainment, (a division of The Cordish Companies) and Brixmor Property Group, the space will see several leading entertainment and hospitality chains opening – including ‘Sports & Social’, ‘PBR Cowboy Bar’, and ‘Live! Plaza’. The entertainment hub, a stone’s throw from the convention center, and theme parks, at International Drive’s Pointe Orlando, is scheduled for a 2024 opening. 

The investment in social entertainment is one aspect of the feeding frenzy in the sector, with the larger amusement and attraction sector also seeing a shake-up. It was announced, at the end of August, that private equity firm PAG had signed an agreement to acquire ‘Huis Ten Bosch’, a Dutch-themed entertainment resort, one of the largest in Japan, for the sum of $720m. This acquisition comes from travel agency HIS. The resort sees a 2m visitation annually, and this acquisition marks a growth of investment into the Japanese entertainment sector.