#1118 – Blockchain’s Entertainment Impact

Following on the previous coverage of the Las Vegas entertainment investment, This latest part looks more at the wider implications for the business, along with the inclusion of crypto-currency investment and the use of new payments and investments in the next phase of industry growth.

NFT and Blockchain in Entertainment

The investment into eSports regarding gaming and blockchain interest is another facet that sees great movement. It was announced that Community Gaming had raised some $16m in a series A round of investment, led by SoftBank (through their ‘SB Opportunity Fund’). This investment is intended to see Community Gaming expand their eSports tournament gaming platform, looking to expand into markets in Latin America – the company is also looking to grow its business with a blockchain-based subscription model which includes prize payments through this platform, already comprising some 100,000 registered users. Investment into other eSports operations that are attempting to incorporate crypto and NFT business into eSports, have also been seen in recent months.

The hype surrounding the utilization of blockchain and NFTs in the metaverse, eSports and entertainment venue business, continued. The Japanese SEGA Corporation saw several interviews with key executives expressing that they were still actively working on what they called their “SuperGame” (previously reported to be developed in collaboration with Microsoft). And this would involve multiple titles which would include NFTs. It was stated that the company saw the future of gaming as including NFTs and cloud streaming, as reported by media site Kotaku. The streaming capability of the new “SuperGame” will see eSports and competitive tournament elements shared across all of the titles in development, hoping to establish a “Metaverse” of their own for their IP. In a similar move seen from BANDAI NAMCO Entertainment, they recently announced their own plans to spend $130m on a “Gundam Metaverse”, based around their profitable flagship IP. Meanwhile, SEGA has abandoned entertainment facility operations but continues to have investments in some sites through IP and continues to develop (for the time being) amusement hardware.

The “Metaverse” has an association towards blockchain and NFT investment, as well as some also linking activities through streaming and, with that, eSports. Investment in establishing a place in this new techno-goldrush continues apace with the latest news. To establish their place in this goldrush, it was announced that Epic Games had raised some $2b in funding from SONY, and the LEGO family investment operation (Kirkbi). This investment follows previous news that Epic and LEGO, a week previously, had partnered towards developing a “family-friendly” Metaverse for children based on their properties. Epic is well known for their social environment, generated around their popular ‘Fortnite’ PvP game series, which has expanded to include a large community element (live performances, movie screenings and world building). It is expected that the new developments between LEGO and Epic will build on this, and the digital toy brands. Kirkbi is the same operation that, as part of a consortium, controlled the Merlin Entertainment operation in 2019 for $7.5b.  

Continued investment fuelled the interest in the hard-to-nail-down term that is Metaverse, with the latest news that avatar creation tool developer, Genies, had secured a $150m raise of investment. This was led by Silver Lake, with participation from other funds Tamarack, Bond and NEA. Genies has invested already in blockchain for their platform and will use this new investment to increase their presence in the Metaverse, hoping to create a strategy to guarantee their position. Avatars have become a much-discussed element of the growth of Web 3 conversations, with the virtual representation of the user in the virtual environment. The creation of digital good, such as NFTs and celebrity endorsement creating their own avatars, is driving much of the interest. The need for full body representation demanded, against Meta’s claim that legs are not needed, defending their removal of them from their Horizon World Metaverse.

Another Metaverse-inspired investment round saw Infinite Reality, a creative operation, sign an agreement to acquire ReKTGlobal, an eSports company – acquiring them in a stock purchase valued at $470m. This move will allow the combined group to merge with Universal Security Instruments – allowing the combined operation to go public. At the same time, the operation has started the process to raise some $150m through private investment in public equity. The combined operation is looking to develop content and tools to create entertainment, social media, and educational properties. And will look to expand its own Metaverse, which will include eSports support.  

Augmenting the Play Space

Regarding entertainment venues embracing eSports, there has been some movement in the Augmented Reality (AR) scene. April saw news of further permanent AR sports center openings in Japan. ‘HADO Arena: Toyohashi’ takes the Japanese-developed player-vs-player (PVP) AR experience, developed by meleap, and places it in its own permanent venue on the second floor of the Toyohashi store, in Tokyo. meleap are establishing their AR platform in the market, having even looked at Western representation. The AR PVP platform has generated interest through the holding of eSports style championships, with cash prizes, and new teams will be encouraged to compete at this new location.

This news was followed by the announcement from meleap that they would be opening a new site, which will act as a flagship location. ‘HADO Arena: Odaiba’ will be a large, dedicated space for AR competition, comprising four 1,400-sq.m. full-size courts for players in groups of up-to-six to compete in 80-minute AR sports experiences. These spaces will also accommodate spectators and be configured for live streaming of the competition. Location in the Aqa City Odaiba mall in the district, the venue will be a flagship site for the establishment of leagues based on the PVP experience, and the promotion of championship competition – the game is already seeing international adoption, following the success of the ‘HADO World Cup’ in 2019.

In moving forward with their AR sports center brand, meleap also announced they had signed an agreement with Tsutaya Bookstores (Japanese largest supplier) to open one of several ‘HADO Fields’ AR experiences within their stores. These installations are promoting both the AR sports and 5G connectivity. This accelerated round of investment comes following last year’s agreement between entertainment enterprise Horipro, and developers of the AR platform, meleap, towards a capital and business alliance. The operation is looking to grow the number of venues of what they describe as their “Techno Sport”, with 500 stores in the next five years. The agreement will see the development of the HADO brand and player base, creation of new content to promote franchising, and the hosting of new leagues. 

AR was in the news following the revealing of the next augmented mobile game property from Niantic – hoping to strike gold again, following the billion downloaded ‘Pokémon Go’ title. The company revealed ‘Peridot’ – a mixture of animal collecting game and Tamagotchi, with players raising their virtual pets and sharing their offspring with friends. The company has been working on this unique property for some time, following the ignominious failure of the Harry Potter AR title (‘Harry Potter: Wizards Unite’), that saw the Warner Bros. licensed game shut down in January last year after only 18 months. This was followed by an even shorter run for their game ‘Catan: World Explorer’. The hope is that this new AR title will rekindle the magic they saw with the Nintendo license. This will be a very important game for Niantic, as it is important to prove that the location-based Pokemon AR phenomenon was not a one hit wonder. 

VR’s Current Impact on Entertainment

The deployment of immersive entertainment into the entertainment mix has continued apace. One of those who has been forging a path in this application in Europe has been Mack Rides’ operations – Mack Animation and MackNeXT. The corporation announced their latest implementation of their passive VR experiences for existing ride attractions, developed in conjunction with their partners, VRcoaster. First off was the launch of ‘Amber Blake – The Chase’ – a rollercoaster VR experience on the Europa-Park Alpenexpress coaster. This was an in-house developed VR experience, created by Mack Animation and based on the popular property, Amber Blake, supporting the ‘Coastiality’ app.  This was also followed by the announcement that Gothenburg’s Liseberg amusement park would see their 116-meter-high free-fall tower supported by a unique immersive experience called ‘AtmosFear VR’, with this content developed in collaboration between VRcoaster and Quarry Fold Studio. 

Both these attractions employ ruggedized Pico VR headsets, supporting the VR app that marries the movement of the physical attractions with the virtual experience rendered within the standalone mobileVR headset. Following on from this, MacKNeXT has been developing their free-roam VR experience brand ‘YULLBE’. The operation has already launched at their Europa-Park permanent location and the company announced the opening of their second venue in Hamburg, at the ‘Miniatur Wunderland’ location. Both sites will be running the ‘YULLBE PRO’ and ‘YULLBE GO’ systems, offering a selection of content including use of the property with ‘Amber Blake: Operation Dragonfly’ on the’ YULLBE PRO’. The ‘PRO’ system had previously employed the Pimax headset with backpack, but that has now been replaced, for both the ‘GO’ and ‘PRO’ attractions moving to a new standalone VR headset. The operation is moving forward with plans to deploy their free-roaming VR platform as a pop-up store in several European locations this year.

The Return to Physical Gaming Shows

In one of the many show dates impacted by the rise of the COVID variant at the beginning of the year, the International Casino Exhibition (ICE) show was held over three days in April. The event had weathered numerous conditions, from the Global Health Crisis placing the show on hiatus until this return to a physical event (with hybrid elements) some 26-months since the last gathering. With the impact of Brexit, and the issues of the new date’s proximity to Easter, there was compacted timing between the following Global Gaming Expo in America and continuing international travel and shipping restrictions. Each one of these issues resulted in a much-reduced show floor, and the absence of several important exhibitors (and international attendees), although the show organizers, Clarion Events, moved mountains to ensure that ICE’22 was still a well-attended and vibrant show, reflecting the returning casino and gaming industry.

Although not exhibiting, several key gaming companies had private meeting rooms off the show floor, and in hotels during the event – and many developments were reported. One of these was the announcement that International Game Technology (IGT) and Aristocrat had signed a far reaching 10-year cross-licensing patent agreement, which would include patents related to game features, as well as their Remote Game Server (RGS) technologies. The sharing of this valuable resource between major competitors shows the restructuring gaming market’s drive for market dominance. IGT had also signed an agreement to acquire, for $174m, iSoftBet – a mobile casino games supplier. 

News was broken during ICE’22 that iGaming developer and supplier, Storm Gaming, had been acquired by Primero Games for an undisclosed sum. The skill-based game operation is adding the library of content to their extensive range, Primero Games, having seen a restructuring in management and having recently exhibited at AEI’22.

The ICE’22 show seemed more to have attracted online gaming (iGaming), online sports book, and payment facilitation services, with a smattering of service providers. eSports was represented in the ICE eSport arena area (supported by Allied Esports), with a mobile trailer eSports Arena stage, and a $33,000 prize pool tournament on ‘Rocket League’, and other games during the show. One victim of the progress of development was VR – in previous years the ICE hall had been littered with various developers showing their interpretation of VR in the gaming scene. Jump forwards to 2022 and only two booths had any VR, and one of those was as a competition piece for attendees. The love affair with VR in gaming seems to have run its course. Likewise, there were no clear examples of Skill Gaming at the show, or any amusement and game machine elements.

There was a lack of a presence of exhibitors such as Inspired Entertainment, WMS Gaming, IGT, KONAMI, and Merkur Gaming, to mention a few, on the show floor. The absence of the usually vast Novomatic booth was a telling omission. Empty spaces filled with ICE bar and seating areas, unable to diminish the absence. The show has confirmed it will be returning to its first week of February format for the 2023 gathering, but there were rumors of a possible competitor. Well-placed sources suggested that certain of the absent European exhibitors were working on plans to launch a new European casino and iGaming trade event, that would take place in Amsterdam, for early 2023. Attempts to get official confirmation of these developments are ongoing. But the new UK Brexit position was said to have reignited a move for a European home for the casino industry’s leading trade event (that has festered with some exhibitors for some time). We will keep our readers updated on confirming these rumors. 

For the UK amusement trade, the start of the Easter holidays marked an important business cycle for the industry. Some operators and manufacturers have not seen unimpacted business during this period for over two-years, and sales during this period will mark and important barometer in the overall health of the industry post-lockdown. As covered in our EAG’22 coverage, rumblings of some amusement operations in trouble had been revealed, and news from Coin-Op Community broke with the closing of Northern-based JM Amusement, appointing liquidators. We would also like to thank those who pointed us to the news that industry media service Amusement Resources had also ceased operation. These are just the tip of the iceberg we can expect in the coming weeks, as the international industry readjusts to the “new normal”!