– Restructuring the Facility Dynamic
We seem to be in another period of major redevelopment and upheaval within entertainment facility property – not just fuelled by the investment towards the post-COVID landscape, but also with the impact of the “Retail Apocalypse”, fuelled by the massive upheaval in the market. Continuing to underpin our evaluation of trends in the market regarding “Mergers, Acquisitions and Restructuring”, some major developments were charted recently.
Those who have been following recent Stinger Reports will be aware of the saga of the retail entertainment corporation, Toys “R” Us. The operation had entered into the voluntarily closure of some 800 toy stores in August of 2018. Soon after, an operation emerged from bankruptcy, called Tru Kids, that attempted once again to open a retail store operation based on the brand. In 2019, two locations were opened in Houston and New Jersey, operating under new management. (This is separate to the reopening of the brand in Australia, under an agreement with Hobby Warehouse.) These new, scaled-down 6,500sq.ft. locations, were more open-planned toy showroom venues, looking at adding “retail-tainment” elements (such as a Nerf shooting range), towards creating a new interactive exhibiiont-style business approach.
Well, with the full impact of the Global Health Crisis and the lockdown of businesses, this new concept was off to an incredibly rocky start – and so it was no real surprise when the news came, in February, that Tru Kids confirmed the permanent closure of the two initial retail stores, along with the suspension of plans for licensed partner business. This news shows that another high-profile retail brand (even under new management) is finding the landscape impossible under the current conditions. However, it is expected that dedicated children’s entertainment center business will be applied from new developers in the coming months (see our recent report on the new ‘Mission: Play! – by Mattel’ development).
Rending of short-lived interactive exhibit store approach [Tru Kids]
Talking about adapting to current market needs and our readers will remember our reporting, in November of last year, on the closing of the original Playdium entertainment facility in Mississauga (first opened in 1996). This was not the abandonment by owner Cineplex, but the continuation of restructuring and development of the ongoing “Cinema Entertainment Center” (CEC) initiative. The next stage was revealed in February, with the opening of a new facility Playdium venue in Dartmouth Crossing, Canada. The new 30,000sq,ft. location comprises a bowling alley and amusement zone, and also includes ‘VRcade ATOM’ eight-player immersive virtual reality games, developed by partner VRstudios. The site also includes its own hospitality offering and sits adjacent to a 12-screen Cineplex Cinema. This marks the third Playdium venue, sitting alongside the eight Rec Room entertainment brand, also run by Cineplex. These moves come as the company redefines the balance between its theaters and location-based entertainment offerings.
This redefining of theater and CEC balance will be fuelled by new investment in the operation and it was announced, at the end of February, that Cinepelex had been holding a private placement note offering of investment and had successfully raised around $200m in capital. This indicates a strong level of support in the current and future plans presented by the executive team to investors. It will be interesting to see how many other cinema chains will be looking at this initiative towards driving their needs to raise new investment capital, with hopes to stay relevant in the changed entertainment landscape going forward.
Talking about how the international cinema chain business is attempting to restructure itself towards the new dynamics of the post-COVID landscape, a new development was reported from Asia. Missed by most of the media, CJ CGV, the largest multiplex cinema chain in South Korea, revealed a massive restructuring of its business that include the launch of a brand-new business vertical. It was announced that CJ CGV would now allow guests to bring game consoles into the movie theaters, with the ability to rent the screens to play the games on the giant screens. Stinger Report readers will be familiar with our previous coverage on the offering by key cinema chains to rent out screening rooms to watch selected movies in bubbles of friends. This move mirrors much of the “Crossover” business developments iterated previously in The Stinger Report. This latest development allows the reservation of the screen currently in venues within Seoul area, hocked up to the users’ console and playing their own games free of charge.
Big screen console gaming in a Seoul cinema theater [CJ CGV]
The iconic seaside venue [Dreamland]
The adoption of eSports venues to dedicated VR experiences has been a continuing element in the emergence of both genres. Most recently, VRstudios Sports announced the launch of its ‘Hoops Madness’ basketball tournament sports experience. Following this, ePLEX, the South East California eSports venue with its sponsored and purpose-built stage and arena, revealed it will be hosting events which incorporate the VRstudios VR eSports competition across thei two venues.
The need for a strong tournament capability, emulating what has been seen in the bowling community, is a factor that drives much of the new investment in what is generally ladled as eSports, even if the definition is not exact. Other VR developers employing a dedicated eSports component to their releases include Virtuix, celebrating surpassing some 2-million plays on its platform, supporting five dedicated eSports games. Another VR manufacturer, VEX Solutions, represented by Shaffer Distribution in the States, has also promoted its competition credentials with an eSports model that is available for its ‘VEX Arena’ platform. Oher developers are following suit.
– Augmented Reality vs Mixed Reality
Interest in AR/MR tech has continued to gather momentum since CES’21 and this latest wave of interest in the tech has percolated across a number of sectors. Most recently, following on from the Toy Fair, news broke of a new joint development between toy giant LEGO and music content publisher Universal Music Group. The companies are partnering towards creating the ‘LEGO Vidiyo’, a music video streaming toy to allow children to express their creative side and create streaming videos of their interactions with the AR-based toy and selected music tracks. This is the latest AR-based incarnation employing the LEGO toy brand, but this is the latest to focus on a social media centric streaming platform.
The support of facility business using Augmented Reality was illustrated in a unique crossover (following on from the previous Stinger Report coverage). It was reported that a Castleton arcade called ‘Boss Battle Games’, a local arcade which was struggling with reopening, saw an increase in attendance achieved by AR. The company was one of the 1,000 global small businesses selected by Niantic to be able to become a venue for ‘Pokémon GO Gyms’. This allows players of Pokemon to come to the site and train and compete with their collected characters virtually. The gym’s physical locations act as gathering points. This follows on from the sponsorship deal carried out in 2016 with Starbucks, that saw some 7,800 stores across the US, turned into pokéstops, or gyms, as part of a promotion. Or as seen in Japan, with the 3,000 McDonald’s restaurants. Initially, Niantic had proposed this kind of sponsorship as a major business to create sponsored locations, supporting the scavenger hunt app, although the current conditions have paused this development until recently, with the free offer to small businesses – expected as a promotion towards a full rollout later in the year.