#1168 – The Social Entertainment Explosion – Part 3

We have recently covered the explosion in investment in ‘Competitive Socializing’, ‘Family Entertainment Centers’ (FEC), and ‘Urban Entertainment’ properties. Many of these sites are seeing their embryonic rise from UK-based developers. In our previous coverage, we focused on the country’s capital as the incubator of this rise. But in this third part, we look at the growth beyond London across the country, thanks to new investment.

Northern Exposure

The monopoly of London opening new social entertainment venues has been broken, as new venues percolate outside of the metropolis. The Gravity Active Entertainment group announced plans to open ‘Gravity Liverpool’ before the end of the year. This £10m investment is part of the new entertainment venue within the new Liverpool ONE area. Once again, this mixed entertainment venue is placed within a previously closed Debenhams department store in the city and hopes to follow on the successful opening of the ‘Gravity Wandsworth’ operation back in 2020. 

Gravity confirmed recently a £30m investment from Sculptor Real Estate (the real estate business of Sculptor Capital Management). This new investment will support the new phase of business, beyond their 17 ‘Gravity Active’ brand venues, and now including the two new ‘Gravity Max’ brand sites. The operation saw, in 2022, their revenue exceed £27m and increase on 2021’s £17m.

The new kind of mixed-use entertainment venue that repopulates previous department store premises was seen recently with the opening in Hastings of ‘O.W.E.N.S Entertainment’. Repurposing a previously occupied Debenhams department store near the seafront, the 70,000-sq.ft. three floor location has been transformed into a FEC, incorporating some 20 different entertainment experiences, including VR, immersive simulation, soft play, amusement, escape rooms, and duck-pin bowling – all supported by a strong food and beverage offering. The department store closed its doors in 2021 and reopened as what the owners call a “family fun factory” at the end of last year. This is the latest example of the deployment of entertainment as a strong replacement for changing retail placement. 

Regarding the Manchester area, it was also announced they would be the recipients of the ‘Chaos Kart’ AR-based go-karting experience. First seen with the London venue in 2021, which was reported on in The Stinger Report, conceptualized by Little Lion Entertainment (also responsible for ‘The Crystal Maze Experience’ and ‘Tomb Raider Experience’), with content created by Make Real. Under The Ents Inc. operation, it has been announced that this digitally projected, augmented karting attraction will be coming in September to Manchester. 

The installation will see an eight-player, 90-minute attraction defined as a real-life videogame. The racers collect boosts and weapons to hurl at competitors as they race-battle around this immersive environment – aimed at nine-years-of-age and above. The Ents Inc. also revealed they will be looking at their first international location, with a ‘Chaos Kart’ opening in Dubai later in the year. 

Regarding the amusement scene in the UK, a leading distributor and manufacturer meetup will be taking place in London, on June 7th, with the Park Avenue Open Day. The gathering has become an important social and business event on the UK industry calendar – and offers an opportunity to visit the showrooms of leading distributors Electrocoin Sales and Unit Distributing Company (UDC) during the one-day event. Some 25 amusement suppliers and manufactures have signed up to show their latest product lines during the event – also offering the industry famous Greek BBQ to attendees.

The International Scene

Meanwhile, in the UK, the transformation of previously abandoned department stores, such as Debenhams and Topshop, gain momentum in the drive of social entertainment utilization. We are seeing a similar trend in the States, sweeping across abandoned Toys “R” Us, Sears, and JCPenney stores. Most recently it was announced that the entertainment chain, ‘Tilted 10’, would open their second store in a 103,000-sq.ft. former JCPenney store at Willow Grove Park, Pennsylvania. The new entertainment concept from Nickels and Dimes (the owners of the ‘Tilt Studio’ chain), incorporates in the first phase of development, amusement, VR, hyper-bowling and lasertag, with plans for bumper-cars, mini-golf, and other attractions.

Another ex-department store became an entertainment venue with news from Leominster in the States, regarding the opening of ‘Launches’ – in a previous 32,000-sq. ft. Toys “R” Us store, located in the ‘Mall at Whiney Field’. The Family Entertainment Center (FEC) features bowling, active entertainment, and amusement. The Launch Entertainment chain represents some 30-stores in the States. 

PrimeTime Amusements announced the opening of their second ‘Elev8’ location – a mixed-use entertainment venue that is also seated within a former store. The entertainment operation acquired the 125,000-sq. ft. former Sears department store in 2019 for $5m, according to local media coverage. The two-story space comprises an indoor go-kart track, lasertag arena, axe-throwing, and mini-golf – all supported by a hospitality offering, and planned to open in May. This is an example of an “Retail-tainment” proposition located within previously closed ‘Citrus Park Town Center’ mall in Florida. The entertainment offering is part of the redevelopment plans for the area.  

Moving beyond the States, Japan saw the 2022 opening of the ‘RED TOKYO TOWER’, a multi-level facility based in the iconic city tower. Launched by TEG (previously the Tokyo e-Sports Gate), the operation offers multi-sport and immersive entertainment under one roof, ranging from drone racing and eSports to the latest VR and MR simulators and entertainment platforms, with even a smattering of the latest amusement. The company, in March, announced the raising of some 4-billion yen ($29m) towards expanding their operation overseas, and investment in their ‘RED KIDS’ and ‘RED TOWER’ entertainment venues, along with their own eSports team. 

Acquisitions and mergers have come to single out the growth in the location-based entertainment scene – and the latest major developments surround Five Star Parks & Attractions. The operation has been involved in a serious growth spurt, as seen in March with the acquisition of five locations from ‘Duddy’s Attraction’, and the previous ‘Track Family Fun Park’ operation. This move was expanded with the news that the operation had purchased the Scene75 and their chain of locations, bringing the King Star operation up to 25 venues across some 12-States. 

Retro Return

The nostalgia for the halcyon days of classic video amusement plays an important part in drawing the audience. Arcade1Up, the manufacturer and seller of the line of video amusement home game emulations, has seen great success in selling its mini classic video game boxes. Recently, it was announced that the company was expanding its line to include a new line named “Deluxe Editions”. Echoing the look of the original classic amusement cabinets, the new range incudes larger machines that contain, rather than a single game, a selection of classic titles from the machine’s history. These larger machines are the closest we have seen to actual arcade style hardware from the company and come at a much higher price. Titles include ‘PAC-MAN Deluxe’, ‘Mortal Kombat Deluxe’, and ‘Classic of ’81 Deluxe’ – reminiscent of the BNAA arcade machine styling. The machines will include Wi-Fi support linked to the Arcade1Up smart app and leader-board competition, building a virtual arcade on the user’s smartphone via the app.

This love affair was cemented with the launch of a LEGO set, aimed at an older player base. Called the ‘PAC-MAN Arcade Machine’, the toy company released in Japan a recreation of the iconic platform as a LEGO kit. This is part of a range of sets aimed at their adult buyers – the set was priced at nearly $300. LEGO is cashing in on the nostalgia bug, but also looking at the success that Arcade1Up has seen in the market. It is expected that, based on the success of this set, other classic arcade cabinets will be getting the LEGO treatment. 

The continued influence of Retro-Arcade styling across the popular media circuit has not diminished but has only grown in recent years. There is a growing vein of consumerism, ranging across the popularity of movie-based classic video arcade properties (such as ‘Sonic’ and ‘Mario Bros.’ to name the latest). The spending power of “Retro” is not lost on the social entertainment landscape, as we have seen a profusion of investment in the retro “Beercade” social entertainment mix. Regarding Social Entertainment, the classic arcade and console gaming aesthetic has been applied to the Competitive Socializing vibe. Most recently we reported from the London opening of ‘NQ64: Arcade Bar’ – a dark light and neon, cellar-populated, arcade and console game drinking den, with its retro play area. 

The chain sports game-themed cocktails and craft beers, based on popular classic video arcade games – themed drinks include ‘PAC’s Punch’ and ‘Sweet Fighter’. It was revealed that, in Spring, the chain saw the tenth venue open in the Shoreditch area of London. Unlike many of the previous social entertainment chains we have reported on, NQ64 cut its teeth outside of the capital, with Manchester (acquiring the ‘Dogbowl’ location), and new sites in Birmingham, and Glasgow – up North. This development was followed in May by the announcement that private banking lender ThinCats has provided a £10m facility to NQ64. This new investment was revealed to help with plans to open five new locations before the end of 2023. This move also sees a share buyback from minority shareholder in the operation, Imbiba Private Equity.

Videogame Crossover

Speaking of the Nintendo and Universal ‘The Super Mario Bros. Movie’, it was reported that the film was breaking all box office records for an animated film, heading past a $1b global box office after its smash Easter holiday opening. The impact of “Mario fever” was also being seen reflected with Universal reporting a strong uptake of tickets to visit their ‘Super Nintendo World’ venues in Japan and America. 

The importance and value of videogame IP for movie properties was also illustrated from SEGA, with the successful ‘Sonic the Hedgehog’ series of movies. Or the Rovio Entertainment success in gaming with ‘Angry Birds’, along with their merch and movie series. So, it was no surprise that “Mergers and Acquisitions” were on the cards – reflecting the trends covered previously. It was revealed that SEGA Sammy Holdings had started negotiations with Rovio towards completing a $775m acquisition.  It was reported that the acquisition will be towards helping Rovio expand their successful IP’s potential across new formats. The current IP has been downloaded some 5m times since its launch in 2009 and has been turned into countless games, and into two movies.

The ‘Angry Birds’ IP has seen an extensive life in videogame, and even turned into theme attraction, redemption, and video amusement. Titles include the 2019 ‘Angry Birds Stomper’ and 2020 ‘Angry Birds Whacker’ (Harry Levy), ‘Angry Birds Arcade’ (ICE Games), or ‘Angry Birds Coin Crash’ (LAI Games). This along with the attraction scene licenses of the IP, with Immersive Gamebox, and by NeoXperience, or even the license of the IP into the VR scene by HOLOGATE (‘Angry Birds Movie’). All this and a successful series of movies and streamed TV shows. The move by SEGA will be the continued investment to secure their position in the face of the growing edifice that is Nintendo, and their success in theme park, movie, and video game properties. This is the latest major smartphone game app that has been acquired by a big publisher – ‘Farm Ville’ (Zynga) was acquired for $12m by Take-Two, and ‘CandyCrush’ (King) was acquired for $5m by Activision – in an ongoing landgrab across the sector.  

Disney Experiment to Shuttered!

The investment in new social entertainment experiences has proven a rocky road, and even the big names find it difficult o get the perfect mix. The ‘StarWars: Galactic Starcruiser’ hotel has been a highly criticized concept at Walt Disney World. The concept was originally presented as a highly immersive two-day hotel experience, including Live Actor Role Playing (LARPing), especially-themed food and mini-attractions, as well as a special trip to the Star Wars land at the park – all for pricing starting at an estimated $6,000. Debuting only just over a year ago (18-months), the concept was seen to under deliver on the original grandiose claims. 

Following a high-profile launch in March 2022, and claims of filled reservations, the reality was revealed when reservations started to dry-up, as occupancy collapsed – even after Disney started to discount reservations. Heavily criticised as being overpriced and poorly executed, sources revealed previously that cast members and cos-playing actors on the project were being let go, and rumors that the end was near for the $2b boutique hotel concept. 

With the announcement of the major layoffs and cost-cutting instigated by the corporation’s management, it was inevitable that the troubled project would fall under the axe. Walt Disney announced the plans to close the failed hotel concept, in a statement on social media. The statement revealed the low-capacity 100-room hotel, which was claimed to have risen the bar on innovation and immersive entertainment, would see its final voyage at the end of September (in time with their fiscal year end – as a cost saving). 

Critics of the concept pointed to a poorly executed idea, and a generic offering at an inflated high price – a failure of the management behind the project to understand the offering or execute it effectively. This marked the first immersive Walt Disney World Resort hotel, to be attempted by the corporation – and is expected not to be the last, after a review of what worked and what failed with the concept that seemed to be flawed from the start.