#1183 – Momentum in Entertainment Landscape

Leading up to the momentous 105th anniversary of IAAPA Expo in Orlando, in a matter of days, there are some developments and new trends to squeeze into our coverage before the mammoth task of reporting from the vast Orlando show floor and gathered exhibitors. This Report looks at the key operator-based trends and developments seen in the market. 

Competition and eSports

In the month of October, which saw the holding of the Global Game Expo (G2E) in Vegas, developments emanated from the event that mirrored other reporting. 

G2E attracted some 25,000 attendees to see over 350 exhibitors, with the impact of changing conditions in the eSports sector being felt with more developments. Thanks to the news-site Sharpr, a rundown of the vibrations rocking the market was able to be obtained. 

Lunchbox, (the subsidiary of Real Luck Group) announced the suspension of their real money eSports betting service and will be undertaking restructuring of their operation. Existing players will be able to withdraw their funds, but new player registration will be suspended, along with further betting and paying out of winnings. Reports suggest this was forced on the operation after it failed to secure new funding, and the restructuring is expected to see the operation now focus wholly on its B2B operations. 

Another eSports betting development saw owners Entain, of the Unikrn betting service, close operations immediately. Another example of an operation changing business after failing to secure additional funding (in this case through an acquisition). As such, the eSports betting and wagering service will now close business. This comes as a surprise for some in the sector, as it is only a few years since Entain acquired the eSports betting operation for some $50m in 2021.

Observers of the eSports betting sector feel these upheavals are inevitable and, while claims of eSports betting being dead in the water may be premature, it is obvious that a proper business model and extravagant spending will be curtailed as the sector undergoes major restructuring. Some feel that more closures are inevitable from other prominent players in the scene. The need for the playing (and paying) public to feel their accounts and funds are secure, will also be an aspect in how these services survive going forward. G2E’23 was also promoting the evolution of sports and casino betting, although it was the eSports element that cast a stir for some attendees – with the 2024 expo expected to see major reforms. 

Regarding eSports, major news broke of the most decisive move by the Kingdom of Saudia Arabia (KSA) to become the hub of eSports investment. It was announced that the Saudi sector will be hosting the 2024 ‘Esports World Cup’ – a new venture announced by the Saudi Arabian government. This will be the largest event of its kind and will be supported by the Esports World Cup foundation, a non-profit organization to build collaboration between stakeholders in eSports – all part of a $13b gaming investment push in the Kingdom with a calculated 39,000 new jobs created by 2030. This event will build off the work already achieved by events in Riyadh, such as the Gamer8 gaming festival (which the Stinger Report founders have supported in the past).

Merger and Acquisitions

The constant thread in much of our reporting from the “tainment” sector has been in covering the spate of mergers and acquisitions seen taking place. A factor in this is the disparity in accumulated assets following the privations of the Global Lockdown, favouring some operations over others regarding assets. As well as perception from investors towards attempting “landgrabs”, as some corporations are seen as vulnerable. 

November kicked off with news of the latest notch on the bedpost regarding mergers dropping, just before IAAPA’23, with the announcement of a deal to see Cedar Fairs merge with Six Flags Entertainment – creating what has been valued as a $8b corporation, comprising 42 parks and nine resorts. It was reported by the WSJ that this would be an all-stock deal amounting to some $2b. Exact details on the deal are still to be revealed, although it was stated that this merger was undertaken to create a more robust operating model and a stronger revenue and cash flow generation profile. This is the latest attempt at discussions to merge since 2019. Some observers are stating this was undertaken to fortify a slowdown in consumer spending. This move starts a new round of M&A throughout the sector. 

This continuing M&A spree is was illustrated with the news, soon after, that Topgolf Callaway Brands had acquired one of their competitors – with the $29m acquisition of the BigShots Golf (owned by Invite) chain of certain locations and brands. This move will see the BigShot single site and franchise holding rolled into the Topgolf operation, with plans to apply the BigShot brand as a selected offering within selected venues, such as employing their ‘Toptracer’ technology. Likewise Invite will promote the Topgolf brand across their traditional golf courses. A lot of traction has been witnessed in the “Golf-Tainment”, seeing Topgolf themselves being acquired by Callaway, which was. completed only a year ago. The explosion in social entertainment regarding golf sees several mini-golf, shooting range, and golf-simulator experiences receiving investment towards a new landgrab (also see Topgolf’s new venue development below).

The growth of the entertainment facility business has been reflected in both increased investments, as well as the inevitable acquisitions and mergers. Leading family entertainment franchise operator in the “Active Entertainment” sphere, Altitude Trampoline Park, announced their plans to add an additional 20 new parks across the US landscape. The company feels the interest in the trend for multi-unit expansion will continue into 2024, and the operation is looking at 100 venues under their chain – with the franchise leading the brand’s latest developments.

Developments in “Cinetainment”, along with social entertainment, have gained momentum – an example of this was seen with the announcement of the latest acquisitions and mergers, with news that EVO Entertainment Group had acquired Austin-based chain Violet Crown Cinemas. This will see the chain continuing under their brand, now as part of the group which, at the same time, will see EVO Entertainment Group rebranding itself as Elevate Entertainment Group (EEG). The group will operate a range of chains including ‘EVO Cinema’, ‘EVO Entertainment’, ‘Elevate Rewards’, ‘ShowBiz Cinema’, and ‘Times Square Grand Slam’ along with the new acquisition. 

Another social entertainment growth area has been the “Bowling Entertainment” scene. M&A was seen in this sector, with Hollywood Bowl announcing they had acquired Lincoln Bowl. This adds to the 71 Hollywood Bowl venues currently operational. The management team confirmed, with this new acquisition, that the Lincoln Bowl facility will be seeing reinvestment and refurbishment to the ten-pin bowling facility, to follow the branding and theming of the operation, at the price of some £500,000. One aspect of the new boutique approach to bowling will be refurbishing the bowling lanes to accept players using their own shoes without needing special footwear; along with enhancing the F&B offering of the location, as has been carried out across the chain’s large operation. 

Artainment and After Dark

Away from the pure entertainment game aspect, there is also the museum and art gallery (“edutainment” or “artainment”) approach to immersive gallery exhibits, all building off the popularity of this approach.

Recently, the London Science Museum revealed a new exhibition called ‘PowerUp’ – comprising retro videogames, the space was filled with arcade cabinets, computer games, and some 160 classic consoles to play on, with the exhibition charting five decades of the history of the videogame and the influence that British developers have had on this journey. Set up a selection of games to play, with a separate ticket price (£10-per-day), this exhibition is also a permanent exhibit. The museum is even running “Gaming Late”, an After Dark adults-only evening session – the museums approach to the watch party style after hours experience which can be a strong private revenue generator. This is the latest incarnation of the retro game exhibition, with a number of others seen across the museum and gallery scene, such as the London Barbican ‘GameOn’ touring exhibition from 2002, which recently announced it would be returning to the venue in 2024. With its return, a new After Dark element to the installation will be incorporated into the ticketing.  

While not always incorporating a F&B element, many of the new “Immersive Gallery and Art Exhibit” installations have a private hire and After Dark element that is being exploited. Examples include the new attraction inspired by the BBC’s Seven Worlds One Planet series, which will open in London, UK, in 2023. Called ‘BBC Earth Experience’, the immersive experience offers visitors the chance to experience the world and the diversity of its seven continents on an epic scale. Described as a “360-degree audio-visual spectacle”, the attraction combines footage and music from the beloved TV series with narration by Sir David Attenborough.

This is the latest of several such immersive installations including (as we recently reported on) “Watch Parties” – holding live events in entertainment venues for groups to attend with F&B, such as seen with live F1 race at F1 Arcade sites. The social entertainment focus of this sector also has an impact also on the “Artainment” scene, with the holding of “After Dark” events. This is illustrated by the likes of Frameless, now starting their run of “Late at Frameless” evenings for over 18s. We have also seen this with the Illuminarium immersive projection chain embracing the same opportunities seen in the cinema sector, including a music event to their mix. Several of the Illuminarium sites are holding ‘Taylor Vision’ viewing experiences – in celebration of the new album from the musician. 

Illuminarium has added a new element to their immersive experience center, with ‘Illuminarium After Dark’ themed movie nights. The first of these film theme nights was based round the ‘Twilight’ movie franchise, with a special movie screening and supporting hospitality for the guests who reserved to attend. This move is seen as turning the immersive venue into a glorified movie theatre, with added immersive elements added to the themed experience. Based on the reaction to this first “After Dark” screening, the company is planning to roll the concept out further. For some observers, this was reminiscent of the themed movie nights and secret cinema offerings seen in the market; and a means to try and drive attendance to the chain of sites – following behind the recent screening of American football games (‘Sport at Illuminarium’) at the venues.

Another example of Immersive Gallery and Art installations can be seen with the Pixel Artworks developed at ‘Outernet London’. This saw the first use of 8th Wall’s WebAR platform with Unreal animations, to create an MR experience. The developers having created ‘The Butterfly Trail’, a mixed reality experience with world-first technology features, that launched in September. Visitors travel through explorer Professor Peter Pelegrin’s Botanical Workshop and into his Glass House, where they can interact with the experience, without the need for a special device, AR headset or downloaded mobile app, all achieved through a browser on their smartphone. This is the latest immersive gallery installation to incorporate both an AR element and physical space and, in our coming IAAPA’23 coverage, we will be showcasing several other developments in this vein. 

Popup and Lifesize

Building on the After Dark element and underlining the investment in new competitive socializing trends and venues, we also see the appearance of popup businesses. Such as a new popup based on the travelling experience, ‘Pacman Lifesized Maze’, which is set to open in Melbourne, Australia, for a year-long installation. Throwing its doors open in March 2024, the Victoria shopping mall venue will be transformed into a mecca for all things Pac-Man, with the centerpiece being a life-size Pac-Man game, with physical maze and player ghosts, with one player taking on the role of the power-pill-chomper. Licensed from BANDAI NAMCO, the life-size maze concept is based on the 2015 Bud Light Superbowl promotion (called ‘Coin’). The life-size immersive experience has already popped up in Los Angeles and is now travelling to Melbourne, organized by Hidden. This “Life-Size” immersive experience is emulating what has also been seen in a permanent incarnation, with ‘Monopoly Lifesized’ from Hasbro.

Creating Life-Size experience is not just limited to video and board games. In California, the Main Place Mall installed what they called a ‘Human Claw Machine’. In a recreation of the iconic prize amusement machine built in Life-Size, the system uses a special harness that lifts and steers the “human claw”, controlled by the operator, to drop the player into the pit full of stuffed animals and merch – with the player grabbing items in this five-minute experience. First seen in 2021 at the location, the installation has been getting social media traction. The Crane Machine amusement piece is celebrating its 126th anniversary, charting its history back to the ‘Erie Digger’ style penny candy vendor system (history seems to repeat itself with the explosion in mini-crane vendors in the modern market). 

Speaking of popup, the Topgolf Callaway operation’s name was involved again. In a new development, the corporation revealed the development of mobile venue concept – the first of which will go into action at the ‘McGowan Park Shopping Center’ in Dallas. The ‘Topgolf Mobile’ venue will comprise 60 hitting bays, equipped with the ‘Toptracer’ technology (retained during the latest partnership), along with a nine-hole mini-golf course. This will be the first rollout of the concept, which is hoped to expand on the already established 95 Topgolf permanent venues business.