#1110 – Competitive Edge for Entertainment

Those long-suffering readers of The Stinger Report will have begun to see a consolidation of the various elements of the immersive / interactive entertainment landscape that we have made our focus for over 28-years. In looking at immersive entertainment in the Out-of-Home Entertainment scene, we have seen competition evolve into eSports.

Competition in the Frame

An aspect of the competitive socializing landscape is the tournament and championship element of the business. This is personified by the overall term of eSports – a perception that all competition revolves around this term. The reality is that a true understanding of how Out-of-Home Entertainment can embrace and profit from this genre was recently discussed.

Amusement would seem to have already cut its teeth in the origination and adoption of competitive play, in an industry that established collection and promotion of players’ stats (first with TAITO’s ‘Space Invaders’ in 1978). It was first with the big gaming championships and prize league competitions (with the first Capcom ‘Street Fighter 2’ competitions in 1991), and then as the originator of the connected machine tournament, supporting international league and final championship live events (defined by Incredible Technologies’ ‘Golden Tee Tournament Edition’ in 1997). This is an industry that achieved so much in establishing the fundamentals, even tracing these roots back further to the pinball and bowling league engagements. Then why is it that eSports is not a major pillar of the amusement trade business?

In previous Stinger Report coverage, we have reported on the rare flashes of inspiration in the amusement trade towards embracing eSports. This is best illustrated by the KONAMI, ‘BEMANI PRO LEAGUE’, now in its second season, the televised tournament competition for prize pay-out at championship level between professional teams (described as eSports x music game).

The importance of arcade gaming towards the establishment of the modern tournament and championship community, that drives many of the most popular eSports tournaments, is illustrated in the likes of EVO (Evolution Championship series). This fight game tournament can trace its roots back to its start in 1996, where it was better known as the ‘Battle by the Bay’, seeing players competing on ‘Street Fighter Alpha 2’ cabinets for prize pots. EVO has evolved into a multi-format tournament, that has come on to generate streaming and live event status. Its success was such that, in 2021, the competition was acquired by a joint venture of Sony Interactive Entertainment and RTS (spun out of talent and media agency Endeavor Group). EVO reverted to an online championship that year, focusing on PlayStation console gaming competition during the lockdown, but plans to return to mass live events this year. 

Speaking of Capcom and continuing with the acquisition fever sweeping the videogame scene, it was revealed that minor stakes had been acquired in the Japanese amusement and videogame publisher and developer (estimated to be 5-percent), by Saudi Arabia’s Public Investment Fund (PIF). This fund has been created by the State towards stablizing major investments in technology and is calculated as totalling $500b. The PIF has already invested in publishers such as EA and Take-Two, as well as interests in eSports. It was revealed recently that Savvy Gaming Group, which is owned by the fund acquired ESL Gaming (now merging to become ESL FACEIT Group (EFG, is becoming the leading competitive gaming platform.

One of the big developments in the eSports scene this month was seen with the announcement that a new ‘Formula 1 Racing Experience’ would be developed and opened in London, that would see eSports as a major component. The development sees partnership with F1 organizers of Motorsport Games, and Kindred Concepts, with a start-up helmed be the co-founder of ‘Puttshack’, ‘Flight Club’, ‘Bounce’, ‘All Star Lanes’ and ‘Hijingo’ (all part of State of Play). The release of this new venture is focusing on the competitive socializing element of the concept. The racing facility will be opened in One New Change, a retail and hospitality mall next to St Paul’s Cathedral, in the City of London. Kindred Concepts will be working with Landsec on the development and operation for a Q4 2022 opening, of a site comprising some 60-motion race-rigs. Motorsport Games studios is working with F1 on the race experiences (based on their rFactor platform). This is hoped to be the first of a 30-facility rollout for the yet unbranded concept.

The announcement of this partnership, towards launching a F1 motorsports entertainment experience, comes a matter of months after the announcement of the ‘Ferrari Experience’. The sportscar manufacturer and Formula1 team have partnered with media attractions developer Simworx, and facility designer Katapult, to create an experience venue that will comprise an eSports hub, along with simulator rides and a hospitality component. Ferrari is partnering with the developers to design a concept that is focused on location-based installation – although following the IAAPA’21 reveal, no more information on the first location has been revealed. This will show competition to the companies already investment in the theme park scene. 

Motorsports and F1 have established strong associations with their own highly successful eSports championship (‘Formula 1 Esports Series’) and have seen several eSports venues play host to live competitions. The motorsports race-rig (simulators) scene has mushroomed in recent years, as covered by The Stinger Report. As with the earlier comments about amusement’s influence in originating and adopting competitive play, competitive motorsports gaming had its roots here. The first real multi-player amusement racing game can trace its crude start to ATARI’s ‘Gran Trak’ 1974 release, but it would not be until the 1987 NAMCO smash ‘Final Lap’ that multiple cabinets could be linked up in competitive racing (a maximum of eight racers, head-to-head). Network racing competition would be championed by the 1996 ‘San Francisco Rush – Extreme Racing’ by Atari Games, that would be one of the first to incorporate a true tournament mode. Sim-racing has blossomed, with race simulator centers opening, now infused by the eSports mantra. This latest investment will hope to place it firmly on the social entertainment map.

Consumer Entertainment Sees Impact

It was revealed by the research operation, NPD Group, that sales in consumer videogames had seen a decline in spending during January 2022. The data collected showed that sales had dropped by 2-percent to $4.7b, compared to the previous year, and that this continued a decline in sales charted for the third consecutive month. This was in comparison to consumer videogame hardware sales that increased by 22-percent to $390m. Under closer inspection, the hardware sales increase may be a reaction to the supply chain demands (as can be seen with the Sony PlayStation 5 being the highest selling console, even with its scarce supplies). Meanwhile, the decline in software sales is being attributed to a workforce returning from an arduous lockdown to more conventional spending habits, while incomes are stretched to inflation. 

While videogames software sales may be seeing an impact, the other entertainment mediums are seeing a rise in sales. The record achieved by the blockbuster movie ‘Spider-Man: No Way Home’, saw the Sony production surpassing $750m in domestic sales, looking to break records – with several other releases looking to see record box office numbers. These developments are feeding expectations of a return to business for cinemas as the audiences return. The theatre business has been hoping on a roster of new blockbuster releases to keep the momentum, as well as the deployment of Cinema Entertainment Center (CEC) deployment to retain longer dwell time. Things are still taking their time to improve, as Canadian film exhibitor Cineplex reported fourth quarter losses of $21.8m in the period ending Dec. 31 (against the lockdown losses of $230.4m a year earlier). 

This was matched by reports from research firm Deloitte, with their data revealing an expected 30-percent drop-in streaming service, as customers cancelled their subscriptions. This equated to a calculation of some 150m subscribers cancelling their paid services over 2022. The impact of the “churn” in audience was seen to have hit large streaming services such as Netflix and Disney+, although the exact numbers being seen in cancelled subscriptions are a closely guarded secret for these corporations, as they look to entice back customers and retain their market share. A confusing array of services, impact on spending, and a return to other entertainment activities are all charted as reasons behind this decline. 

Speaking of investments and acquisitions, the fast-moving pace of the acquisition and merger scene in the entertainment sector continues apace, this time with the rejection of the unsolicited $3b offer from SeaWorld Entertainment to buy the Cedar Fair operation. The parent company, Cedar Point, unanimously rejected the offer, in a statement from SeaWorld they said “Unfortunately, we do not see a path to a transaction”, which seems to reflect the comments from other sources that the offer had not been a welcome plan in the eyes of the Cedar Fair team. At this time, there was no word if the proposal would be increased, or if the complete abandonment of further discussions was to happen. There is also the possibility of another suitor waiting in the wings – we will have to wait and see how these things progress.

Mixed Reality Rocks the Roost

Augmented Reality (AR) has striven to be as vocal as its older sibling Virtual Reality. The drive, over recent years, has been for the crossover from creating a completely synthetic digital environment, towards the superimposing of synthetic elements within the user’s field of view of the real world. Several manufacturers have fielded AR glasses, and even one theme park attraction has employed AR glasses on their dark ride (Super Nintendo World’s ‘Mario Kart: Koopa’s Challenge’). But the mainstream adoption of AR hardware has been an even more tortuous process than that with consumer VR.

Attempts to gain traction with AR technology have seen poster boy Magic Leap totally pivot their business plan, after dropping original executives, and focus on a commercial healthcare business approach – abandoning the vast investment towards a consumer release. The company, at the same time, teased images and specs of their new ‘Magic Leap 2’ glasses system, promising a 30-percent reduction in weight and improved performance and FOV. While at the same time, media reported an internal feud within Microsoft’s own Mixed Reality development team, with high profile departures of plans to drop development of their indicated ‘HoloLens 3’ AR headset. Sources suggested that senior executives favored a software, rather than hardware, approach, ending their internal hardware build for a partnership with Samsung. This possible pivot follows MS debuting, with Niantic, their ‘Microsoft Mess’ MR platform last year, with a HoloLens 2 Pokemon demonstration, and promised consumer AR headset in the works.

When looking at AR and MR, and we have reported on ‘Live Play’ in previous issues, there is a focus on the use of a mobile app that can allow players to control UFO (crane) machines and even medal machines in Japan. The concept has been brought over to the West as an app for users to download, and we even reported on a Canadian company that was allowing players to control RC vehicles in team competitions. But now, others are making investment into Live Play to try and establish the concept for the Redemption machine scene.

In a February press announcement, National Entertainment Network (NEN) – controlling over 20,000 game machines across the USA in street route and amusement locations, many of which they operate, along with the bulk vending business – announced they had partnered with Playertainment, developer of live mobile apps. This enables the deployment of their unique game platform called ‘Winner Winner’, that sees players using real redemption and prize machines via the app, with prizes won shipped to the player. Through the partnership, machines in certain NEN venues will be connected to the platform for remote gaming.

NEN was last in the news following their acquisition of 760 of the surviving NAMCO USA facilities last year, as part of BANDAI NAMCO’s divesting of their Western facility business. With the launch of the partnership and new ‘Winner Winner’ app, the company hopes to revitalize their amusement and bulk vending businesses and look towards the new opportunities that remote and live play offer. Playertainment, the gaming start-up, who last year raised some $5m in investment funding and is led by SDV Holdings (this adding to a previous $3m raise), looks to expand its video streaming live game playing platform. The connection to actual machines within the NEN facility operation offers a unique showroom of connected platforms across their business and could be the start of a new form of cross-over between mobile players and actual machine locations.  

Omni Direction Competition 

The development of the latest VR technology has found more of a home in the commercial sector than in the consumer, because of the increased expense of this investment, against the need to create the cheapest platforms envisaged for consumer deployment. This has seen the location-based entertainment (LBE) VR sector installing some of the most cutting-edge elements to enthral their audiences.

One such example of this cutting-edge deployment was revealed, with the announcement of a new VR Arcade venue opening with the latest omni-directional treadmill technology at its heart. W5 Solutions AB revealed the launch of their ‘W5 Omnifinity’ – a treadmill system allowing complete free roaming of the virtual space, through unique rollers embedded into the floor of the platform. To date, the system has only been seen in military application, but in a partnership with Aaru Entertainment LLC, the company will launch the first deployment of the system in LBE in their VR arcade in Tulsa, Oklahoma. This is the most advanced omni-directional platform in the market, allowing the user to traverse the virtual space without encumbrance. The hardware is focused on commercial application, and this marks its first deployment into entertainment, with other expected venues deploying the technology to open in North America soon.

The owner of the other omi-directional VR platform in the market, Virtuix, also had major news of their own, reporting they had sold the 50th version of their ‘Omni Arena’ virtual reality eSports attraction. The company has seen a positive response in placing orders for the system and claimed, in the press announcement, they had secured orders for another 25 units for this year. Virtuix has seen much interest in their eSports competition on the platform, having paid out some $250,000 in prizes to winners of the built-in competition. The company secured, last year, some $35m from individual and institutional investors, and looks to expand their market position, as well as develop new consumer variants of their platform.

Industry loses Legend

The passing of the torch comes to all of us – and we also get to see our mentors and friends take their final bow. It is with heavy heart that we report the passing of industry legend Douglas Trumbull – a movie special effects genius, with his work defining films, such as ‘2001: A Space Odyssey ‘, ‘Star Trek: The Motion Picture’ and ‘Bladerunner’ (to name just three), while also showing incredible foresight in directing films such as ‘Brainstorm’ in 1983, a film which foretell the pitfalls in the adoption of immersive technology. 

For many, his motion picture work may be more recognizable than his work in the themed entertainment scene. He was involved in the development of the media-based attraction scene, first with his work at Showscan and IMAX (IMAX Ridefilms), leading to the creation of the first audience simulator attraction ‘Tour of the Universe’, which set the stage for Disney’s ‘Star Tours’. Leading from this, he would direct the attraction development, including for the ‘Back to the Future Ride’ for Universal. He went on to direct and produce media attractions, such as the famous ‘Secrets of the Luxor Pyramid’ attraction at the Luxor Resort in Las Vegas; along with start-up operation Entertainment Design Workshop (EDW), that worked on several concepts in the simulation theatre sector.

Even at the end he was still innovating, having set up a company to develop a new movie format for motion pictures, with a faster frame rate, and had created a ground-breaking film presentation environment, called the ‘MAGI’ cinematic format. He took the time to present the concept during the Future of Immersive Leisure (FOIL) conference in 2017, in a thought-provoking fireside chat with KWP owner. As always, a concept way ahead of its time, and will hopefully see adoption as more recognize the visionary behind the work. We wish his family and friends well as this time.

Now all eyes turn to the first of the major amusement, gaming, and attraction trade events (not forgetting the 9th International ATRAX event, in Turkey, during February). All pushed back their normal rosters at the start of the year, but March will see the full return of trade shows, starting with the Entertainment, Amusement & Gaming Expo (EAG) – and we look forward to bringing the latest developments from this show in the next coverage.