#1113 – Continued Growth of Digital to Physical Entertainment

The build-up before the mad rush of American trade conferences and physical shows continued, with some momentous and important developments shaping the amusement and attraction landscape – and beyond into the immersive entertainment sphere. We cover news of major changes within the troubled London Resort planning, the developments at the vast Mobile World expo, and the continued mergers and acquisitions across the digital landscape.

Attractions & Resorts

While EAG previously had close affiliations to the attraction scene, this year’s event was more focused on amusement and gaming. But there were developments in the theme park sector in the UK, which impacted the market while the London show was taking place.

The latest major impact hit the troubled London Resort Company Holdings (LRCH) theme park project, just as February ended. It was first broken by the Daily Mail news group that the leading supporters of the resort project had removed themselves. BBC Studios and ITV Studios, who had leveraged their IP for the theme park, revealed they had decided to pull out. A corporation representative stated they now had no current plans to enter into agreement with LRCH and would only reconsider if the project could prove a net positive environment impact. This coincided with calls from a recent petition in 2021, from campaigners wanting to save the wildlife at the proposed venue location, and who called upon the BBC to remove support, based on their own Green Policy. This all culminated in the 73-hectares of land (the location of the first and second gate), receiving Site of Special Scientific Interest (SSSI) classification. A spokesperson for ITV Studios also confirmed they had no commercial agreement with LRCH either, blaming the rejection of the planning application extension.

The loss of these properties seems to be the latest in a series of calamities that have impacted the long-delayed project. This is a project that had once boasted an over $3b investment – but has recently been looking at additional investment raising through public subscription, while the management team revealed a pushback to a 2025 opening date. It must be remembered that Aardman Animation had also been a partner of the LRCH project but had pulled out their support in 2019 – only a few weeks after ITV Studio announced their involvement.

This leaves the remaining LRCH IP partner – associated with company CBSViacom (now rebranded Paramount Global), the owners of Paramount Pictures. The company was previously a partner of the London Resort project (then ‘Paramount London’), then pulled out in 2017, only to return! The continued status of their support is underpinning the project, and a loss of this backing would be catastrophic. The Chief Executive of LRCH had once stated, about Paramount Pictures, BBC, and ITV, [as essential] in creating an amazing and unique experience for the whole family. However, the involvement of Paramount Pictures has changed – relegated not to the first phase of the park but placed in the second gate element that was planned to not be opened until 2029 (according to previous plans). No word has been revealed if Paramount intends to continue this involvement with LRCH, or if they too have ended their agreement. If these three were to depart, then serious questions would have to be raised regarding the validity of this confused situation.

This news was followed by more European-centric theme park developments, with the announcement that Walt Disney intended to spend some €2b ($2.24b) on a massive expansion of ‘Walt Disney Studios Park’ in Paris. This would place the European resort in serious contention of stealing any of the expected 2025 audience that LRCH had hoped to attract. While the Disney news in this territory has been trailed extensively, more information on the actual plans for the European park’s expansion has been revealed. The market is about to see an explosion in investment, while the LRCH project seems to falter.

Just as we went to the wire, more news broke regarding LRCH, which saw a shakeup of the operation as the Kuwaiti businessman who was the first investor in the project back in 2013 stepped down from the board. This was followed by restructuring of the board with new entrants, including a former British ambassador to Iraq and Libya coming onboard to help with a new phase of capital raising. But news also broke that the member of Parliament for the area of the project has officially withdrawn his support for the plans, stating that he has “run out of patience” with the London Resort project. Expect more developments in the coming weeks. 

New Immersive Attractions

An aspect of the emerging consumer VR scene is the ability for the user to be transported from their mundane into a virtual environment. Recently there have been several concepts for the transforming of the conventional car journey into a near theme park experience. In what are defined as ‘Virtual Riding Experiences’, the passengers are able to don their virtual reality headsets and be transported into a virtual experience beyond the mundane drive home. Many of these concepts use the term “turning a car ride into a theme park experience”.

The first of these approaches that generated investment interest was from the company Holoride. Seen during 2019, taking journalists for a ride around the convention center at CES, the reveal offered an example of the proposed VR content for car journeys. The company was using, at that time, Oculus CV1 hardware to present the concept. The company would go on to raise some $12m in Series A investment for this concept looking for a home. And, with this, the company also deployed its first pop-up experience – ‘Universal Pictures: Bride of Frankenstein’, taking guests for a ride in the back of SUVs wearing VR HMDs and enjoying the scare experience (partnering with Ford, Rewind and Universal). 

Jump forwards to 2022, and Holoride has dropped association with the Meta team and looked at a more agnostic headset approach, culminating with the announcement of a new collaboration, now with HTC, during the Mobile World Congress (MWC) 2022 event in Spain in March. The team is planning to deploy their VR in-car entertainment on the lightweight VIVE Flow headset for a launch later in 2022. This follows a move by HTC to have their standalone VR platform adopted across a wide number of disciplines, including meditation and as a virtual viewing platform. Following the reveal of the HTC partnership, Holoride announced its association with auto-manufacturer Audi. Vehicles from the manufacturer are incorporating the new ‘Infotainment’ toolkit (only in Germany, US and the UK), will now be able to support VR headset experiences from Holoride – with plans to expand the rollout. 

During MWC’22, HTC also entered the fever for all things metaverse in tech, by teasing their own plans for this virtual commerce environment. The company launched a video that debuted their ‘Viveverse’ – that offers a cross-platform application of their technology, supporting their VR hardware, and aspirations for future commerce. Also at the MWC’22 – on the HTC booth and another promoting their HTC Focus 3 headset – was MackNeXT with their free-roaming ‘YULLBE GO’ platform. The system was running through a demonstration of the latest game experience for groups of five players at a time, able to interact within the map with each other. The system has now been converted from the previous headset to the new HTC Focus 3. HTC was keen to promote the location-based entertainment (LBE) application of their technology – offering a non-PC-backpack solution for free-roaming experiences.

Immersion For All

The Mobile World Congress (MWC) 2022 event threw up some other interesting new developments – returning to a physical event format for the first time since 2019. The trends, however, seemed to pivot round the already ongoing need to define the “Metaverse” (a term created some 30-years ago) – the ongoing discussion of ‘what is and what is not’ this constantly connected immersive commerce environment, promoted by operations like Meta. The latest developments in connectivity seen to offer a chance to benefit from the hype in a connected environment such as this. 

At best, Metaverse has become a nebulous term, hijacked by any corporation looking to seem relevant. This was best illustrated by MWC’22 exhibitor SK Telecom, who had on their booth a VR attraction called ‘4D Metaverse’, with four-riders sitting on a robot arm wearing Pico VR headsets, with immersive content synchronized to the motion of the arm. The ride experience was an interpretation of traveling through the space, although it seemed more of a flight of fancy.  

MWC’22 also saw the attempts to define the infrastructure and communication needs to achieve the consistently interoperative virtual environment. What some are dubbing the “Multiverse” is leaning towards the ability to interact not just via headset, but also smart device, building on the Web 3.0 aspirations of the concept. Statements were put out by Meta (who decided not to attend MWC) that there was a need for a drastic improvement in telecoms infrastructure if this vision was to be possible. This rallying call came just as Meta suffered another series of outages on its Quest 2 platform, with users complaining of failure to log onto accounts and content being inaccessible.

While Meta’s VR operation decided not to attend the mobile world’s leading event, other VR developers made major announcements. We have already touched upon HTC, and the new owner of Pico (VR headset manufacturer), ByteDance (one of the largest social media corporations, who also owns TikTok), revealed they have joined forces with chip manufacturer Qualcomm towards working closely together on the roadmap for XR (extended reality) and Web 3.0 technology. This announcement proves the greatest competition to Meta’s plans, as their hardware was powered also by the ‘Qualcomm XR2’ platform. The lead in Casual VR seeming to have evaporated under these new conditions.

To better understand the Web 3.0 multiverse: after the establishment of the internet, we migrated to web 1.0, marked by the ability to get the population online, using browsers (personified by the likes of Netscape); web 2.0 saw the creation of online communities and services, using mobile devices (the era of Facebook and Google); while the aspirations of web 3.0 are for persistent cross-platform, using immersive connectivity. The rollout of the next communication standard with 5G seemed to have regained momentum, partly fuelled by the rebound after the Global Health Crisis, and partly due to the need for a new level of connectivity. MWC pointed to the next generation of investment, while research revealed 6G (at 170 GHz), is breaking the current 5G 52.6 GHz limitations. This all goes towards creating a persistently connected virtual world! 

Mergers & Acquisitions 

The continued consolidation of the physical and digital entertainment space, towards preparation for the new connected economy, was seen with the announcement that Main Event Entertainment (part of Ardent Leisure) had acquired three Colorado locations to add to their 46-strong FEC operation. Previously operated in the State by Performance Entertainment LLC, ‘The Summit’ chain of FEC operations was acquired for a reported $26m price and will see the chain rebranded and incorporated in the Main Event operation.

While in the digital entertainment space, major acquisitions continued. Netflix showed their hand in the continuance of their aspirations in the game space, with a €65m ($72m) offer to acquire Finish mobile game developer Next Games – a developer that has worked on social entertainment content based on IP. This positioning strategy is a continuance of Netflix moves to create a game operation comparable to the success they have achieved in movie streaming.

News of this offer was followed a matter of days later, with the news that gaming giant Tencent had acquired Polish publisher and developer 1C Entertainment. The price of the acquisition was not disclosed at the time of going to the wire. The company is known for its popular library of simulation games, including the ‘IL-2 Sturmovik’, and ‘Men of War’ properties. The operation has been defining multi-player air and ground combat simulators, finding a strong following.

The Augmented Reality (AR) developer, famous for the ‘Pokémon Go’ billion Dollar success, and Global hit, Niantic, revealed they had recently acquired web-based AR app developer 8 Wall. The developer is known for its platforms created to support PC and mobile systems. 8 Wall will now support Niantic’s AR engineering organization towards work on the next generation development tools for the AR experiences. No information regarding the terms of the acquisition or the sums involved was revealed. 

Along with the success of the Pokémon AR phenomenon, Niantic has also had some difficulty, having to shutter the licensed Harry Potter AR game after it failed to attract interest from the audience. The company had also been supporting their own AR headset aspirations, working closely with Microsoft. Regarding ‘Pokémon Go’, Niantic announced, due to the Russian invasion of Ukraine, they would be shutting down the game in Russia and Belarus, with players unable to access their content.

Resurgence of an Old Favourite

As we have reported previously, there has been an explosion in adoption of “Live Play” amusement – online connected physical amusement pieces, remotely controlled by players through smart apps (live mobile gaming). This is personified by the growth of online UFO machines. During EAG’22 we saw an abundance of the latest crane machines, continuing to show their evergreen popularity in the West, but also, we are now seeing a more structured business plan towards maximizing the business.

As we reported, NEN (National Entertainment Network), the retail amusement game and bulk vending machine operator, has partnered with Playtainment, the mobile connected reality gaming company, towards creating what they call the “largest live arcade platform in the world”. The system will have NEN physical crane machines at selected locations, hocked to the Playtainment online network, allowing live play through the ‘Winner Winner’ game app. This marks a momentous move in the West to Live Play, while in Japan this market has grown exponentially – with the likes of TAITO partnering with Amazon Fire TV, with their ‘TAITO Online Crane’ app.  Along with the success of Netch and their ‘Netcatcher Netch’ app (the originator of the “Online Skill-Crane Game” genre – known as ‘Akiba Catcher’ in the West).

This investment has seen, in Japan, the formation of the JOCA (Japan Online Crane Game Industrialist Association). This new association comprises leading members from the crane machine manufacturers, services, and game app developers. March ‘22 sees SEGA joining the association, alongside BANDIA NAMCO Amusement, TAITO, GENDA, and most of the scene (although surprisingly, not Netch). JOCA states, in the manifesto, that they have predominantly established to protect the consumer and develop a healthy environment for the market to grow within, through cooperation with developers. In this atmosphere it was revealed that GENDA had rebranded their own Live Play app – now known as ‘GiGO Online Crane’, the system is based on the SEGA originated platform (‘GOTON’), and rebranded as per the rebranded Japanese amusement venues that threw their doors open this month.

In Conclusion 

As we prepare for the next in the physical trade events, the news broke that one troubled gathering was being abandoned. It was announced that the trade association behind IAAPA Asia 2022 had cancelled plans to hold their China show again. Originally scheduled to take place in Hong Kong SAR, China, this June, the organization blamed the ongoing impact of COVID-19 in Hong Kong for the reason to abandon holding the event later in the year. The association confirmed they were moving their focus towards planning IAAPA Expo Asia 2023. This marks the third cancellation of this Asian element of the international IAAPA show calendar – last year’s event was cancelled at the last minute, enforced by the Chinese government banning international attendance. 

This leaves the largest Chinese trade event scheduled to take place this year being the Asia Amusement & Attractions Expo (AAA), in May, filling the China Import & Export Fair Complex, in Guangdong. The event has continued to take place as a physical event, benefiting from its close association with the local trade and government; and has grown into an event that dwarfs many comprising multiple halls of amusement, attraction, redemption, cinema, leisure, and much more. For the IAAPA trade show team, they stated they will be placing their full focus the 2023 Asian show and, this year, in the IAAPA Europe event in London. All hope to return to a more normal show operation.

Another trade convention hit by uncertainty was the Russian Association of Amusement Parks and Attractions (RAAPA) Expo, scheduled to be held in Moscow during 16-18 of March. No official word was received on the status of the show, but following the February Russian invasion of Ukraine, and the following global outcry, with extensive sanctions and embargos placed on Russia, it would seem impossible for any Western amusement or attraction trade to be able to support the event. This is an exhibition floor predominately comprising Russian, and some Chinese, exhibitors. Likewise, there was no official statement on the position (at the time of writing) from any of the international amusement or attraction trade associations, although it is expected they will have to make one at some point. 

In other show developments, just as AEI’22 was about to open, news regarding the EAG London show was revealed. There had been some comments from sources at the end of the London show, that the BACTA trade association and show organizers Swan Events, were involved in discussions on the show’s future. It was officially announced that the Entertainment, Attractions & Gaming International Expo (EAG), planned to be held January 10-12, 2023, in London, will now be run with a new show organizing team, following the resignation of Swan Events. BACTA did not reveal the new event team at this point, or if this news will mean the structure of the amusement trade event will now be changing. 

The history of Swan Events can be traced back to the formation of the modern EAG show from the ruins of the ATEI show that had been held in partnership with Clarion Exhibitions. A lodestone event for the amusement and gaming trade, until its fragmentation, it created the separated amusement EAG and gaming ICE events. Swan had established, from the fracture, comprising previous executives of the event, the support of a new amusement trade event and has continued to do this sterling work for the last 14-years, having to weather industry upheaval and the Global Health Crisis, in putting together a difficult event for a trade enduring serious transition. How much of the resignation of organizers, to focus on their other event calendars, has been brought on by issues within the trade association, was unclear at this time. Swan is also the organizer of their wholly owned Autumn Coin-Op Show (ACOS), also in London, at the end of the amusement sales season – the company confirmed they still intend to run this event unchanged. Regarding EAG’23 – we will cover details of the new organizers and show structure when eventually revealed.

All eyes now turn to the continuation of the March physical trade event calendar which is underway. We will be rushing to the heart of Nevada, for what is seen as the most important gathering of events, for this phase of the trade’s year – with Amusement Expo International (AEI’22), comprising a VR Summit trade event. Meanwhile, the hospitality and social entertainment landscape will be charted at the following Bar & Restaurant (BR’22) – the rebranded event will be looking towards a greater place in the social entertainment landscape. And the month will be rounded off by the big Amusement360 bootcamp for FEC, LBE and amusement operators and investors – which will also see a presentation from Stinger Report owner and Spider Entertainment co-founder. Watch this space for the exclusive details.