Stinger Report - 15/02/2021

TSR Newsletter | February 15, 2021

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The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .

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Amusement Eyes Competition

# 1057

Report Skinny

In The Stinger Report #1057 – This issue covers in detail:

1. Coming late to the party they invented, amusement trade increases investment in tournament gaming, with a new PGA partnership teased from Incredible Technologies, and new competition elements from BANDAI NAMCO and KONAMI.

2. The continuance of restructuring sweeps the Japanese factories, and developments at SEGA Sammy Holdings sees momentous shifts in business positioning and developments within their gaming businesses.

3. The real development impacts on deploying frictionless payment systems is revealed, with news of changes at Walt Disney regarding payment methods, and the impact of ePayment deployment on the international stage.

….and much, much more!

To read the full Stinger Report, register for your subscription here.

- The Stinger Report, published by KWP and its director, Kevin Williams, as the leading interactive Out-of-Home Entertainment news-and-views resource, covering the immersive frontier and beyond.

Main Report

The continuing momentum from the deployment of a tournament and competition element to the guest experience, personified by eSport, seems to borrow heavily from the high-score and tournament element of the amusement scene. The investment in new tournament competition elements has also seen greater investment from amusement developers, as the competition prize element of the market also gains momentum towards the rebirth of facility operation.

- Amusement eSports Originator

One of the legendary success stories of the conventional amusement trade has been ‘Golden Tee Golf’. The perennial amusement piece seems a concept from a bygone era, but is still one of the continually popular amusement releases – if receiving an unusually limited amount of coverage or analysis. The Stinger Report was one of the few to mark the 30th anniversary for the platform back in 2019; and still one of the fewer to cover creator Incredible Technologies’ continued development and investment into the franchise, so much so that the report has sold some 10,000 various iterations over its time. Although, the corporation has also been active in investing heavily in a casino gaming operation.

Under the surface, the ‘Golden Tee Golf’ platform has been the progenitor of the competitive video game scene and an early version of the eSports revolution. Since the late 1980s, IT has held World Championship competitions for its tournament enabled amusement pieces. Las Vegas has played host to numerous international events, which have seen thousands of audience attendees watching live competitions, by single and team players, for large cash prizes. The popularity of Golden Tee, and the other equipped tournament amusement pieces, is fuelled more by the hospitality scene (bars and club placement) than by amusement. This reason may explain the unusual relationship with the industry gatekeepers, while still attending the trade conventions.

Recently, IT has continued to invest in the popularity of the platform, seeing continued popularity with the World Championship (although, as with everything, it has been impacted by the Global Health Crisis). The beginning of 2021 was marked by the first major announcement in the amusement scene, with IT announcing they had signed a major licensing agreement and would be launching a new version of their trackball-based golf platform. Incredible Technologies announced a partnership with the PGA Tour to create a brand-new Golden Tee platform. PGA Tour represents the Professional Golfers’ Association of America and their organized golf tournament. The new game will be released in Spring 2021 and will continue to use the famous trackball controller, but will now employ the latest CGI graphics in a sleek new cabinet that will be at home in the bar and tavern market, as well as the social entertainment venues.

While we wait for the machine, we have the branding [Incredible Technologies]

This is not the first time that major licensees from the international golf sector have been enticed into the amusement scene. Back in 2006, the release of ‘PGA Tour Golf Team Challenge’ saw the PGA partner with amusement corporation GlobalVR to release an amusement tournament version of the EA Sport consumer release. The platform borrows heavily from the IT ‘Golden Tee Golf’ playbook, to create their own competition system. Due to numerous issues, the project received several edition updates after release; but it failed to implement a robust version of the tournament infrastructure and was eventually phased out in 2008.

With Incredible Technologies now officially partnering directly with PGA Tour for this new release, the might of the IT tournament infrastructure can be applied to driving players to the international competition, who may not already be aware of the platform – and it can be expected that a lavish eSports-style competition with unique prizes all linked to this highly recognizable property will follow. While mentioning the IT system, it would not be fair to ignore the other amusement tournament system from a similar mother – ‘Big Buck Hunter’. Under the Play Mechanix banner, the company announced that, in February, they would be launching two online leaderboards supporting latest updates; with the ‘Adventure Leaderboard’, and the ‘Hunter Hero Leaderboard’.

Speaking of amusement-based tournament competition, the video amusement scene saw the start of a second new tournament enabled program. BANDAI NAMCO Amusement America announced they would be holding a North American ‘Maximum Tune 5’ tournament. Called the “4th Nagoya Area Online Champion Match”, the month-long event was scheduled to start at the end of January for the end of February and was supported across all connected cabinets in this territory. Competitors awarded exclusive license plates for their in-game vehicles. The event had originally been scheduled for Summer of 2020 but has been shelved until now. It will reflect the state of the US and Canadian amusement scene, in how many competitors the event attracts.

The lacklustre way in which the amusement tournament scene has been serviced was illustrated in Japan, with the news of the closures of several iconic arcade halls, including ‘GAME SPOT 21 Shinjuku’ – one of the leading venues for the tournament fighting game scene in the 1990s. The venue had encouraged major tournaments on the leading “beat-‘em-up” titles of the day and gained a strong following from the gaming community. But due to the move away from this genre and the lack of strong support of this community by the Japanese factories, the venue has withered on the vine. The interest in tournament play is still strong in the market, seen by such competitions as the KONAMI Championship holding its 2021 season events, or TAITO and its championships, to name just two. For the traditional Japanese amusement operator sector, their intransigence to adapt to new opportunities and attempts to control the market have only resulted in accelerating their demise.

The shine may have tarnished slightly regarding conventional amusement tournament competition for the Japanese amusement factories, as they all try and position themselves towards entering the eSports arena. As already reported, eSports investment has been made by KONAMI, starting a dedicated division, and opening a new facility in the heart of Tokyo. Meanwhile, TAITO has invested in its own eSports aspirations, partnering with NTTe-Sports and with facility plans (also holding the ‘Fighting Gods Festival World Championship’ of arcade fighting games event). The popularity of eSports has inflated in Japan, with the build-up of the Tokyo Olympics and promotional eSports events planned to be held alongside, such as the ‘Intel World Open’ (all events are postponed at the current time as the world awaits the fate of the XXXII Olympiad.)

Speaking of KONAMI, it was reported in Japan that KONAM Holding Group had instigated a major internal restructuring of the operation, including the closing of several studios within KONAMI Digital Entertainment. The hoped result of this latest process was to see the consolidation of production divisions. This news from Japan caused some speculation from ill informed sources, jumping to the assumption that KONAMI was exiting the game development business. Corporate executives had to go on record as confirming that this restructuring was only to consolidate divisions – it will have to be seen if the amusement and gaming sub-divisions will be impacted by these moves, or if there will be a new structure to KONAMI moving forward.

Returning to another aspect of the amusement tournament scene and, from a Western perspective, the VR amusement attraction developer, Virtuix, continued its investment into the eSports scene with a brand-new VR eSports contest at Family Entertainment Centers. In this new Virtuix announcement, the corporation has established a cash prize pool of $100,000 for the 2021 event, launched as part of its ‘Omni Arena’ eSports series. The promotion was developed as part of the effort to attract guests back to entertainment venues, running these machines after the lockdown, to support the market #SpringBack.

We have also seen developments towards new facilities in the Chinese sector, that also look at both eSports and attractions as major elements in their design. Chinese property company, SuperGen Group, is the parent company of Chinese eSports organization Edward Gaming (EDG) and the operation announced at the beginning of the New Year that it has broken ground on what it calls the ‘Shanghai International Culture and Creative Esports Center', in the Shanghai’s Minhang District. The facility is being claimed as one of the largest eSports entertainment venues in the territory, including arenas, studios, and attractions.

The influence that eSports is having on investors in China was also seen with the announcement of the raising of some $60m in a Series B round of funding, in Versus Programming Network (VSPN). The corporation is a Chinese eSports solution provider who, along with innovative technology patents and venue operation, has plans to grow overseas eSport business. This is a major investment in eSports businesses looking to widen their business interests, and this round of investment was led by Prospect Avenue Capital (PAC), and supported by Nan Fung Group, Lighthouse Capital and Guotai Junan International. This additional investment is on top of the $100m invested in VSPN in October of last year, that was led by powerhouse Tencent Holdings.

Another large Chinese-based attraction space that is focused more on the indoor amusement park approach is Guangzhou SEGA JOYPOLIS. This project marks the third JOYPOLIS amusement theme park in the territory, alongside the Japanese original venue. SEGA has sold the operation, now operated by CA SEGA JOYPOLIS. This new venue will open at the end of 2021 in the south of the country, and will include some 40 attractions within the 180,000-sq.ft. facility – which will be located in the Junming Happy World urban gaming and tourism complex in the province. This will be the largest JOYPOLIS facility constructed so far and will include new specially developed immersive attractions in the lineup.

Talking of SEGA amusement venues in Japan, soon after The Stinger Report feature on the Crane Machines scene, and TAITO’s successful record facility award, it was announced that the reopening of the SEGA Shinjuku Kabukicho would be setting a challenge for their own Guinness World Records attempt. And it was announced, back during the beginning of January, that the venue became the new holder of the record for the "world's largest number of crane game machines installed" – with some 477 units (beating the previous 450 units). The new operation, GENDA SEGA Entertainment, was thus awarded the coveted plaque.

- The Next Shoe Drops at SEGA

The continuing restructuring in the market was reflected with SEGA announcing the retirement of its veteran Chief Creative Officer (CCO), famous for being behind previous successful titles such as ‘Virtua Fighter’ and ‘Virtua Racing’ in the 1990s. This adds to a list of recent departures from the company, which has seen voluntary redundancies in November of some 600 staffers. At the same time, the current CEO of SEGA announced his acceptance, moving to Group CEO of SEGA Sammy Holdings. The CEO, the previous founder of Sammy had, after the merger of the two brands in 2004, progressed on a process of assimilation and repositioning of the corporation, taking the helm of SEGA after the acquisition/merger. Gaming and interest in casino and land-based gaming interests are pushed to the forefront, along with major restructuring and cost-cutting. The former COO of SEGA will now step into the role of the new CEO of the operation and undertake major streamlining of the operation internally.

This news, however, was the opening salvos of a major upheaval in the structure of the Japanese corporation. Beginning in February and following the news, it was reported by well-placed sources that SEGA would now be separating out its last holdings of pachinko and pachislot business, as roughly outlined in November. The sentence “structural reform to transform the business structure to adapt to the external environment”, was made in an official corporation statement on the road ahead for the legendary Japanese amusement and game house. The actual structure of this new operation would see SEGA video games on one side, with the new return of the Sammy name to handle the gaming side (still based on initial speculation from informed sources).

Example of the once profitable pachinko business [SEGA]

At this time, the state of where amusement and resort business will fall into was still up in the air. Although, the writing had been on the wall following the purchase of a controlling share of SEGA Entertainment by GENDA, along with the previous offloading of attractions business into CA SEGA JOYPOLIS. It is suggested that more news regarding the continuation of amusement investment from the Japanese corporation will be made, although it is expected to have less of a focus on business, as the impact of COVID has decimated revenues, resulting in part to the offloading of the company’s amusement center business. The lessening of new amusement hardware manufacturing was also reflected in another development.

News regarding changes in how SEGA does business is reflected in the upheavals that are rocking the corporation. Just a few days after The Stinger Report undertook its extensive coverage of the UFO Catcher scene’s evolution, and changes impacted SEGA’s ambitious ‘SEGA Catcher Online’ app (and web portal) for remote prize game play, launched in 2017. It was announced by GENDA SEGA Entertainment that the app would be renamed ‘GOTON!’ – completely relaunching without the SEGA branding, and would renew its membership scheme. The brand derives its name from two meanings – that of the sound which falling prizes make, in Japanese (“Goton”), and also from the term “Get on” alluding to winning success. These are all traits of the GENDA marketing team making the app their own, including strong social media support.

Continuing these developments regarding SEGA’s amusement business, it was revealed that Korean manufacturer ANDAMIRO would be releasing an upright two-player shooter version of ‘House of the Dead: Scarlet Dawn’. To date, this fifth in the House of the Dead shooter franchise, launched in 2018, had only been available through SEGA in their Theater Enclosure system, and as ‘House of the Dead: Scarlet Dawn: The Attraction’, a mid-scale 12-player variant for Tokyo JOYPOLIS in 2020. This new, upright variant salvages code and construction from the original, and is exclusive too ANDAMIRO for the Korean market. And at the time of writing, there are no plans for the cabinet to be released in the West. Several operators, back at the launch, questioned the lack of a scalable option for operators unable to afford or house the Theater Enclosure.

Upright Korean version of SEGA Shooter [ANDAMIRO]

Speaking of new shooters, there is a strong reason why SEGA is not interested in an upright version of their three-year-old shooter. The company has been working on a new film license property, ‘Men In Black’. In this case, the shooter is available in a deluxe and small cabinet configuration, with the two-player shooter using mounted gun controls. As with the majority of SEGA amusement business in the West, the game has been developed under the direction of SEGA Amusement Europe. This latest release has been postponed from the previously planned 2020 scheduled release, and the game has only recently been seen on test at a Dave & Buster’s facility in Texas.

This indirectly links to another Japanese amusement factory with a surprise loc-test for new hardware. Dave & Buster’s also had at their Dallas facility reopening, a test for TAITO’s ‘DENSHA DE GO!’ (Let’s Go By Train DX). The popular Japanese train driver simulator has had a fleeting appearance in Western arcades, and long-term readers of The Stinger Report will remember the 1999 loc-test of ‘Let’s Go By Train! 2’. D&B, this time, has brought over the three-screen deluxe version of the Tokyo train driver simulator (which we spotted during our JAPEO’19 report). It will be interesting to see how audiences receive this quintessential Japanese sim-game. TAITO was kind enough to Tweet a picture of the game on loc-test and, by accident, was able to also snag an image of the new SEGA shooter in the far-right background!

Manufacturers share image of hardware on test in the US [TAITO]

- Wearables and the Frictionless Future

Other news continued in the crowded news cycle surrounding CES. The impact of pressured revenue and the need to streamline operations has seen the investment in frictionless and smart payment systems being reconsidered. This has also meant that extreme measures have been applied to some methodologies and restructuring, along with cutbacks being employed in a fight for survival.

The opportunity of wearables against smartphone tech was championed by theme park systems, such as the much-promoted ‘MagicBand’ which was employed at Walt Disney Theme Parks. The combination hotel key, smart ticket and ‘FastPass’, was pushed heavily as a must-have wearable that could be customised to the guest’s character choices. However, January brought the news of a full reversal on this concept – it was announced that Walt Disney would be officially retiring the complimentary ‘MagicBand’ program for resort guests, and would be reverting to a smartphone app system that would incorporate all the elements previously supported by the bands (supporting the MyMagic+ infrastructure). Disney would continue to deploy the ‘MagicBand’, but now as a general paid item that was being eventually phased out by the smartphone process.

Disney had reportedly spent over $1bn in developing the unique RFID-based plastic wristband system, creating a proprietary platform to support the combined smart wallet, registration and ‘FastPass’ system, with accompanying readers across the property. The aesthetics of the design for the wearable were farmed out to an outside design studio, adding to the expense of development. The system was first launched in 2016, only for Disney to launch a new ‘MagicBand 2’ system in 2017, which was claimed to offer improved design to fit all form-factors, and incorporated an accessory called the ‘MagicKeeper’ (for luggage tracking). It was also suggested that the new system addressed several teething issues with the original rollout. Disney would go on to promote the production of some 24m bands, though the actual adoption rate was kept a closely guarded secret. The phasing out of the platform speaks to the impact of tightened revenue on “glory projects”, reverting to a simpler smartphone solution. While ‘MagicBand’ is being side-lined, sources suggest that this may not be the last seen of a Disney wearable.

While Disney may be phasing out its current wearable aspirations, more news was revealed that the Universal Studio Japan ‘Super Nintendo World’ facility will be depending heavily on its wearable element. The importance of the ‘Power Up Band’ has already been covered in previous Stinger Report coverage on what is being called the most interactive theme park to date. The ability for the guests to use their wristband to interact and accumulate points and prizes has been paired with full support via a smartphone app, that also includes information on the lands’ activities. Combining a wearable with a smartphone app is a major leap forward, and many felt that the highly propriety Disney system had not incorporated a seamless implementation of this feature, or was truly fit for purpose. Rather, it was a confused application, based around the ‘Play Disney’ park app. It is expected that wearable, interactive elements will play a major part in the “frictionless” future of park experiences.

Press event presentation of the PowerBand pairing [NintnedoObserver]

Following on from this, another Disney park experience that was being phased out for adoption to a smartphone app was ‘Sorcerers of the Magic Kingdom’. This is a card-based interactive scavenger hunt, with guests in the Magic Kingdom of Walt Disney World having signed up to get their key card and map, and then taking part battling “Hades’ henchmen” at 20 (mystic) portals located throughout the park. First opened in 2012, the 70-collectable-card, interactive park attraction, follows on from what The Stinger Report recently covered in our feature on interactive park attractions. Walt Disney revealed that this experience will now be reverting to a more cost-effective smartphone approach, combined into the ‘Play Disney’ app.

Speaking of frictionless transitions, and it was revealed from various media that the contactless payment has cemented itself during last year, spurred by the Global Health Crisis. Corporations such as Mastercard stated that this kind of transaction doubled across their European business operation, seeing at the height of the lockdown about 78% of their European transactions being contactless (as covered by PaymentsSource). It was known that the retail and commerce industries had been dragging their feet regarding full adoption of contactless payment, but the COVID situation has forced full adoption in just under a year. This situation has seen cash payment pushed to poor second position, and shortages in some currency – doubly impacted by questions regarding transmissibility of the disease through handling notes.

Indirectly a shortage of currency could terminally impact those amusement operators (especially Street Route) which have avoided adoption of cashless pay-to-play infrastructures. On top of this, the need due to local regulations for amusement and entertainment businesses to adopt capacity limits and embrace pre-registration infrastructure, could prove the death knell for those businesses that have fought long and hard in the shadows of the amusement trade over the years, to hamstring the adoption of ePayment in the West. A benefit of this will be the ability for closer scrutiny of revenues, attendance and business, and will allow the industry to make an accurate assessment of the sector, and so allow us to voice the importance and value of the industry, which was so hard to achieve during the need for government recognition during the first lockdown.

Contactless payment is also establishing itself as a primary payment system in developing and growing markets. India has seen an incredible move towards ePayment over a short period of time. This has been reflected in the amusement and attraction scene in this territory, with one such example being Intercard as deployed by BANDAI NAMCO in their FEC venues in the capital. Other operations, such as the Smaaash FEC chain, with its 41 venues, are adopting similar card swipe payment infrastructures. As well as the recent opening of the first Indian Timezone FECs in Lucknow, India. India is a country that only saw its first FEC open some 15-years ago, with an audience that is familiar and happy with cashless pay-to-play.

The use of frictionless payment and service elements has been a long time coming in the entertainment sector and, in many cases, this has been forced on operations as a process of tightening their belts in the face of severe budget impacts. This was best illustrated by Dave & Busters’ – in reporting in Restaurant Business on D&B’s operational condition, it was revealed, entering January, that only 89 of their 139 stores were open and had seen, in Q3 of 2020, sales decline to 75-percent. The operation was instigating major restructuring, with the reveal of implementation of new customer touchscreen tablets, and kiosk services (supporting mobile web service), supporting a scaled-down, simpler menu, all freeing staff and reducing expenditure. The use of a touchscreen service option is a considerable departure for this Social Entertainment venue brand and marks another change in the market.