#1130 – Party Time for Entertainment

The new investment in social entertainment is supported by a trade gathering that reflects the secondary spend in the scene for private event hire. Meanwhile, at the same time, a Japanese concept looks to establish a footing in the Western market with capsule toy vending’s appearance in the States. The need to establish a brand sees the return of some previously closed entertainment venue operations under new management, while the investment and acquisition fever continues across the trade. 

The Hidden Business of Social

The move by the amusement and entertainment sector to a cashless model brings more benefits than just a convenient spending infrastructure. The ability of the latest ePayment platforms includes their companion elements of online registration, allowing a greater private hire component to the entertainment venue business – be this the hiring of party rooms, or group hires for birthday parties and corporate gatherings. 

The more modern FEC businesses, long before being forced by the post-COVID business landscape, have been adopting reservation platforms towards building party room and private hire business. Many UEC and FEC operations looking at this business are seeing representation of up to 40-per-cent of their revenue, along with the food and drink sales generated by this approach. And it is not just the amusement sector that looks at this opportunity – along with the venue hire industry, the social entertainment business has looked to fully embrace the opportunity of private event revenue. 

This was well illustrated with the holding in July of the uniquely named ‘London Christmas Party Show 2022’. The event is a unique annual gathering of venues and service providers supporting private hire, and the party planning scene for the capital and beyond. The event focused on the very lucrative Christmas holiday season, as well as other seasonal party occasions. The event attracted large venues which hire their space for corporate gatherings during the period. Also presenting were food and beverage suppliers, along with those operations which supply the staffing and organizational services. But from a UK perspective, there was a growing inclusion of Competitive Socializing venues looking at private events as a core element of their business.   

Social Entertainment chains which took space to promote their venues at the show, as new corporate and social party venues, were the likes of ‘Bounce’ – the ping-pong and cocktails venue; ‘Gravity Active Entertainment’ – owners of the mixed-use entertainment operation; and ‘Hijingo’ – the social entertainment recreation of bingo. Also presenting was ‘War of the Worlds: The Immersive Experience’ & ‘The Gunpowder Plot: VR Experience’, created by Layered Reality. Meanwhile, the explosion in social mini-golf was represented by exhibitors ‘Junk Yard Golf Club’, ‘Puttshack’, and ‘Swingers’. Other offerings included ‘TOCA Social’ – with their interactive soccer entertainment; and XP Factory, operators of ‘Escape Front’ – the escape room chain operation, who have increased their coverage by acquiring the ‘Boom Battle Bar’ chain.   

Along with established venues, several new concepts exclusively revealed their plans to open in the coming months, with announcements made during the event. One of those is ‘Fairgames’ – a immersive experience based on a funfair concept. To open in Canary Wharf in September, taking over a previous pub venue, the new site will include adult-themed carnival games such as ‘Whac-A-Mole’ and ‘Skeeball’, and the venue will also include street food vendors and cocktails. However, the latest concept is throwing its hat into a crowded ring. The London Canary Wharf location represents one of the financial hubs of the capital and is already home to the ‘Electric Shuffle’ chain, with the location also a stone’s throw from the ‘O2 Arena’ entertainment amenities.

One aspect of the private hire space is the importance of the social element, and the use of music and entertainment. One of the unsung heroes of this sector is karaoke, with several venues specializing in karaoke booths and cocktail environments. Those at the show included ‘Lucky Voice’ and ‘Simmons Bar’ to name a few. Along with party rooms, karaoke lounges have established themselves as strong elements to support an overall entertainment mix. The Competitive Socializing aspect of the market is expected to get more crowded in the coming months, with new concepts about to be launched onto the market. Major investment is being made in defining the landscape, using London to hone the concepts toward launching internationally, as a new aspect of the leisure entertainment sector is defined.

The inclusion of a strong private hire and after-dark components work together for these kinds of venues. Having a strong nightlife element, to incentivize the social entertainment experience for the key audiences, has driven many new developments in the scene. Illuminarium at Las Vegas, part of the AREA15 entertainment hub, announced they would be adding a nightlife program to their lineup. Different to their current immersive experience program, the new “Ultra-Lounge” offers a live DJ and synchronized visuals to the beats, along with the lounge’s full bar, all aimed at a 21-and-over aged audience. The lounge experience is seen as attracting date nights and party crowds to an adults-only escape. It is not known when the other Illuminarium sites will look to roll out this experience. We have already reported on the news that operators Illuminarium Experiences have partnered with Secret Location to create a new experience for their original Atlanta site, called ‘Walking Wonderland’, adding to the types of audience attractions available at the venue. 

Returning Brands, Investment and Mergers

As many of our readers will have noticed, once popular brands which close down usually come back for a second, or even third, attempt. Far beyond the travails of bankruptcy protection (Chapter 11), we have seen many brands completely closed and their assets sold, only to return under new management and investment. The new booming post-lockdown climate for location-based entertainment is fuelling the resurgence.

Recently, we have seen several previously closed brands start the process of returning to the market. As covered in our AWE’22 coverage, The VOID LLC had its assets acquired by a holding company and was in the final stages of opening its first facility, as it attempted to bring its hyper-reality experience back to the mainstream. While using the original branding, the operation has still not been able to conclude negotiations with Walt Disney or Sony Pictures to be able to use the previous VR game content and IP.

Another name making a reappearance is GameWorks – what must represent a record-breaking entertainment facility, going from ‘SEGA GameWorks’ in 1996, to ‘GameWorks LLC’ in 2011, and now GameWorks Inc. The operation has closed, opened, closed, and now reopened again, with the process started to open ‘GameWorks Seattle’ in July. The return of the operation to the Seattle area is a bit of history repeating, being the launch site for the original chain (back in 1997). Now, under changed management, the operation hopes to build on the successful eSports events and amusement sports bar aspects, while also addressing many of the factors the caused the failure of the last operation in 2021. The venture is reopening and re-designed, although keeping much of the branding, with a management team that has experience working for the previous owners of the chain (ExWorks Capital). 

The closure of the previous GameWorks chain of operations was blamed publicly on the conditions of the slow economic recovery following the Global Health Crisis, although the chain had seen difficult management conditions, and questions regarding its operational viability. This was at a time when the industry also lost ‘Punchbowl Social’ and ‘TheVOID’. It is hoped that this first new GameWorks operation will pave the way for a rollout of more chains, attempting to return to the operational numbers of seven stores the chain had seen in its heyday, and then beyond. The market will be watching closely to see if this latest management team is prepared to learn the lessons from the troubled past of the brand. 

Speaking of the growth of eSports and VR in facilities, it was announced in July that EVA (Esports Virtual Arenas) had secured $5.05m in investment. This came from several houses, including the French investment bank BPI, and follows the 2019 investment of $1.5m made in the operation. Combined, the company will use this new capital towards establishing a presence in the USA for their eSports VR arena platform and to grow the operation. Since being founded in 2018, the company has installed over 40-arenas across France and plans to use the new funding to open another 30 for the beginning of 2023, focused on USA sites.

Speaking of the French market, and along with VR, amusement seems to be seeing considerable investment. It was revealed that the latest entrant to the “CinemaTainment” scene was Pathé – the veteran film production and cinema chain. It was announced that the operation had launched, in May, its first FEC concept called ‘Pathé Games’ – a video game arcade. The first site is opening in Seine-et-Marne, France, with a second to follow. The concept is developed internally, with support from an architectural agency to create a family orientated entertainment space. This is the second concept in development from the corporation, who announced, last year, their partnership with H20 Esports Campus to bring eSports to their cinemas with the ‘Go!Gaming’ concept – now opened in four venues.

The merger and acquisition interests in the entertainment operation scene continued apace, even during the summer heat, with the news that the Five Star Parks & Attractions operation, comprising 16 FEC locations, had moved to acquire three Malibu Jack’s Indoor Theme Parks – bringing Five Star up to 19 locations in eight States. Details were limited on the move, with no terms or final amounts revealed at this time. Also in question will be the status of the now remaining Malibu Jack’s venue planned to open in Lafayette, Indianapolis.

The completion of previous acquisition agreements also concluded. Global equity and investment firm, H.I.G. Capital, having acquired Family Entertainment Group (FEG) Holdings for $50b of equity capital, confirmed in July that this agreement had been completed. This will see the nearly-60 location-based entertainment properties owned by FEG, including their own ‘In The Game’, ‘Max Action’, and ‘Bonkers’ brands, falling under the new management team of H.I.G. FEG had been founded in 2004, focused on the development of game rooms and entertainment center development, coming to own and operate its own facilities. 

The growth and development of FEC operations in support of mall and retail business has continued, and investment has grown. It was revealed that Abdullah Al-Othaim Markets Co. (AOMC) a large shopping mall and FEC operator in the Middle East, had seen their board approve the acquisition of Abdulla Al-Othaim Investment Co. (AOIC), by taking an entire stake in the operation amounting to 846.54m Saudi Riyal’s ($225,31m). This move will see the investment capability used to define (AOMC) businesses – this includes their FEC division (Al-Othaim Leisure), comprising brands such as the ‘Action Zone’, ‘Saffori Land’ and ‘Fabyland’, running 25 entertainment venues in the Middle East.

As previously covered, the Japanese amusement facility business continues to be impacted by restructuring, and again the name of GENDA GiGO Entertainment is in the news. It was revealed that a business transfer agreement between GENDA GiGO Entertainment and Sugai Dinos will see the 26 Japanese amusement facilities – comprising game centers (‘DinoPark’) and bowling business (‘DinoBowl’), operated by the division Sugai Kokou Co., Ltd. – now being migrated into the GENDA business. Further negotiations with Sugai Dinos will be taking place regarding their Sugai Cinema (‘Cinema Sunshine’) operation, and possible further acquisitions are to be revealed later.

Capsule Vending on Test in West

Continuing from our previous coverage of the Asian amusement scene, and there is one aspect of the remaining Japanese amusement sector that has seen success. Readers of our service will be familiar with our coverage of the growth in “Gashapon” – capsule toy vending machines. Companies such as BANDAI NAMCO Amusement in Japan are reverting much of their facility business to a growing chain of toy vending machine stores – most famous for their record breaking ‘Gashapon Bandai Official Shop’ in Ikebukuro, Tokyo, containing some 3,000 vending machines.

The simplistic vended toy, and the collectable nature of the vending system, have seen this approach flourish in Japanese post-lockdown – also supported by the inexpensive items vended in a time of financial pressures. Department stores and malls have been the target for these toy vending emporia. While capsule vending has been tried in the West, it has obviously not reached the heights of popularity seen in Japan, with BANDAI NAMCO having sold some 3m capsule toys in 2021. But sources have revealed there are plans to try, once again, to establish capsule toy vending in the West.

Sources confirmed that BANDAI NAMCO was testing a range of toy capsule machines based on the Japanese format under the ‘Capsule Station’ brand. The company has launched an official webpage to promote what they call the “Bandai official capsule toy”! On offer is a selection of the most popular of the collectable capsule toys from the Japanese range, along with some special Western IP toys such as ‘Minecraft’ and ‘Space Jam’. Most importantly, the webpage includes a means to locate the nearest capsule vending venue to you in the States.

BANDAI NAMCO Amusement has seen their Gashapon operation provide the lion’s share of their business returns, with the division running some numerous stores across Japan after first starting in 1977. The current design of store offers a component to amusement sites, or a single retail unit inclusion. Their ability to appeal to the family, children, and even the toy collector scene offers a broad church of business in difficult times. Even though this is squarely a vending item, its appeal in Japan is on a similar level to collectible merch found in the many UFO catcher (crane game) outlets, building on the same audience appeal.

The corporation has also seen how online retailers such as Amazon have been selling to Western collectors and fans Gashapon products. This fired BANDAI NAMCO into action to test a Western presence for this Japanese approach, supported with the official webpage. As seen on that webpage, there has been a considerable number of ‘Capsule Station’ machines deployed at various retail and entertainment venues across the States. Systems reported by Arcade Heroes, lined up like traditional Japanese installations at a ‘Round 1 USA’ stores. And it was revealed that two UK-based BANDAI NAMCO ‘Funscape’ locations have seen pop-up Gashapon ‘Capsule Station’ machines installed. This deployment emulates the supportive nature of installations in Japan. In Japan, the new ‘Gashapon Bandai Official Shop’, augmenting the existing operations, acts as a marketing tool for branded IP across amusement, videogames and movies (with new toys and figurines added each month) – building on BANDAI’s strong toy manufacturing roots.

Whether this move towards supporting a capsule toy vending business in the West will supersede the company’s focus on more traditional amusement will have to be seen. Possibly, we could be at the “PhotoSticker” machine moment in the US for this collectable “Vendertainment” genre. But we will have to wait on the public’s acceptance of this new genre, based on the results of this initial test rollout – and can expect other Japanese (and Western) operations to follow suit if the initial reaction is positive. 

Speaking of the Japanese amusement trade and following on from our previous coverage of the ‘Japan Event Week’ and ‘Events & Amusement Expo’ that took place in June – just as we completed the reporting on the ninth event, the organizers RX Japan revealed their plans to re-structure the show for its tenth anniversary in 2023. This part of the show will now be split into two, with the ‘Event Expo’ focusing on live and leisure events, and ‘Amusement Expo’ focusing on the amusement trade and hoping to fill the vacuum left by the abandonment of the JAEPO trade convention, with more exhibitors. The 2023 Japan Event Week show will now be split into 35 areas, and still plans to take place at its current location in the Makuhari Messe, Tokyo, from June 28-30 next year.