The Big Picture Does Not Come Easy

Expanding the Industry World View & Studying History to Set the Stage for Growth

by Frank Seninsky, President/CEO Amusement Entertainment Management (AEM) & Alpha-Omega Amusements & Sales

Certainly what’s hot today is the bowling-achored entertainment center concept and nowhere has that been done better than at HeadPinz in Ft. Myers, Fla. It’s a modern, up-scale, 24-lane bowling entertainment center with four bars/restaurants that should be a must-visit for anyone looking for how to “do it right.”

I frequently go out on site visits, getting down in the trenches to rip into everything that’s going on in different entertainment centers. One thing I’m learning is that you have to go well beyond our industry in the U.S. and try to understand what’s going on in the whole world. You have to take a deep look at life under the many different economic conditions, governments and cultures across the globe. You have to look at different places with millions and billions of people and notice how different they are, especially from those of us “old timers” who still play a vital role this industry. It’s eye opening.

Here’s one example. Look at the recent Fortnite tournament and how many people played in it. There was $30 million in prizes. It makes good news and it’s all great for the top players, but what about the average and casual player? What about the young kids and teams with the moms and dads who go out and buy all these programs? What are these kids like? Where and how do they spend their time? How do they think? And the biggest question of all: How is our industry going to learn how to attract –– and earn revenue –– from these new generations of players? We want and need to get them into our FECs and game rooms.

With every new technology that comes along, there will be always be a number of people dabbling in it, but it takes years to develop into something that can grab traction and take the out-of-home industry to a new level. In that process, we watch companies come and go, but there is always something to be learned even from the companies that don’t make it. I believe the most open-minded people in our industry will pick up little slivers of success from each of them because they understand that even though those companies fail, they still might have a good idea that may come together and bring the industry to that next level.

Most people in the industry, however, keep their sights aimed forward, forgetting to take the time to review those unsuccessful ideas and looking for the takeaways in ideas and technology. We’re all guilty of it, including our media that keeps covering new stories and trends. Who really goes back to study what’s important from each of the past stories, companies and ideas that didn’t make it?

Part of the problem is that there doesn’t seem to be the proper emphasis on having students develop critical thinking skills or learn history and why history is so important. It worries me that we don’t have enough young people who want to do that or have the time for it. It all gets back to history, building the foundation and adding structured new supporting bricks one at a time.

In the August RePlay Retro, the magazine ran a great article written by Joe Robbins 40 years ago where he shared advice on the importance of tracking individual game revenues, costs and always working within a budget, knowing weekly cash flow. Most operators at that time ran their businesses by the seat of their pants. Joe’s look into the future showed now commonplace practices today. Joe was a visionary!

Boy, that really took me back because Joe was the first person I ever interviewed when I started my own newsletter back in the early ’80s. I don’t remember why I picked Joe out because I’m from the east coast, and he’s from Chicago, but chance or luck had a lot to do with it. I was reaching out and looking for someone special and he was making himself available so we connected.

I wish I could find that interview because at that time, I already had in the late 1970s a basic computer program that kept track of every game. All we had to do was input current coin and ticket meters; the last week’s current meter readings automatically became this week’s previous meter readings.

Here’s another example:. I was just listening to a news feature where they were discussing how creators of science fiction books, movies and comics have so often been right in their predictions for the future. Back when their work was created 50 or 60 years ago, it was all fun and crazy, but when you read their stuff now, you see how much they actually predicted. It’s all here and amazing! The point isn’t to say how cool sci-fi is, but that our industry needs to look for the people with this foresight and make note of the things they envision for the future. So, not only should history inform our path, but also some of the visions of the future.

Getting back to how we need to understand where players of different demographics spend their money and how much they spend, it’s pretty obvious that across the world, it’s consumer video games and related products. This is especially true in China, where they don’t have the big entertainment centers with lots of prizes like we do. There has to be ways to connect them to our out-of-home entertainment sectors. And I can see it happening. I can see ways to do it and what the future can look like. But I’m only one person.

What could take our industry to the next level is for somebody in an organization to facilitate a think tank at least once or twice a year. I think the industry associations are the only unbiased groups who could do it, because it can’t be political and it can’t end up being a big sales push. What we need in the group are the “crazy people,” the creative thinkers.

I was fortunate enough to be in some think tanks in my life. One was put together by Electronic Data Systems (EDS) for the AMOA NANI project. Our group spent two days in Plano, Texas, and answered questions about what could be the future of game tournament play and how to market it. I remember typing like crazy on a keyboard, just throwing ideas and random thoughts out there. Believe it or not, when that was done, we basically had outlined the way the whole tournament system works in our industry today, though many, many years before it actually happened.

This new think tank could be all volunteer –– I can’t see anyone getting paid for it except to possibly get reimbursed for travel –– and it would come from a place of motivation. It can’t be a for-profit group and it would have to be completely independent. Usually, it’s the associations that lead the way. I really can’t think of another group that would want to do this with the good intentions necessary.

Again, the people I think belong in this group are those in the industry with creative vision and the ideas. It might include engineers, architects, designers, builders and business founders and owners…people who understand people, know design and what attracts people. Maybe the creative people from debit card system companies would also be included. I’m thinking of them specifically because the last few days we were wondering, who’s going to write the app that ties entertainment centers to what people do every day on their phones? What is it going to be like? And, the bigger question looms: Are we going to be relevant? We are now, but it just doesn’t seem like there is going to be growth unless we broaden our thinking and our horizons.

Looking back at our industry’s history applies to what is happening currently. Virtual and augmented reality are getting better and better, and it seems like there’s something new to report on every day. Through data we’re collecting, we’re all trying to understand what content and format induces repeat play. Virtuix is very good at giving us the data they have which shows that about 40 percent of the players repeat. This statistic is still early, and is just initial play over a four-, five- or six-month period. But, here’s the thing: We have data going back a hundred years in our industry and we especially have a lot of data from the video game industry. This is what we should be studying. When a new game comes out, what is the repeat play percentage over time? This is different than just saying, “This game has legs.”
You might think cashless systems would be the key to accumulating useful data in this regard. In some locations, maybe they are, but what’s going on in most FECs today with their cashless systems really defeats the whole purpose of gathering data on individuals.

I hate to clue everybody in, but Murphy’s Law applies across the board when it comes to anything operational. I’ll give you an example. Most FECs sell packages where you get huge discounts by putting $20, $50 or $100 on a card. This is a great way to increase per capita spending, but there are always some negatives to all positives. What this practice induces is the opposite of what we need for accurate data collection. It gets Mom, who comes with a few kids or the whole family, to buy one card that everyone “shares.” When this happens, you don’t know individual preferences anymore, you just know groups (and you don’t even know how many people were in that group).

It gets even worse than that. One entertainment center lets a customer collect and use “donor cards.” Let’s say a customer, Joey, wants a particular prize that’s 1,000 points and he only has 300 points on his card. He can use cards from any or all of the people he’s with –– donors –– to get to the point level he needs. The staff takes each one of the “donor cards” and transfers the points onto one card so the customer can get the item.

In our example, those points are transferred to Joey’s card. Now, he gets the prize, and while the card system shows this, the data from the points earned by all the other players is just erased. We don’t get to know anything about the prize choices of any of the donors. The old saying, “garbage in, garbage out” applies.

Besides making all the information useless, it also incites donor points to go anywhere. You’re giving all the staff the authority to move points from card to card…or to fake cards. In our operations, we would know it immediately because management checks our card statistics reports, but how many owners/GMs actually do this?

Even though we feel like we’re data rich today, unless someone does a controlled study, it’s almost impossible to find out what the repeat play is on different games and attractions in our industry. We do not even have a good handle on how many unique individuals actually generate our total revenue. The best each facility can do is estimate.

However, I think we’re going to learn a lot from virtual reality because everybody is doing tests, checking out who plays, interviewing players and generating reports. They look at how far players drive to play and why. When esports is included, the reports show that these players come from further away. All of that data may prove to be unreliable when there are more “VR with esports” venues in those further out target markets, as history has shown regarding countless attractions.

I’m not going to comment on the pundits who believe we should forget about esports. In my opinion, anything that brings in revenue in a footprint that small is an attraction to be considered. It may not be “significant” to the total revenue of a large FEC, but it is part of it and every slice helps.

Out of the last 173 daily news posts I put up on my blog, I think about 15-20 of them are on esports. Within them, you can see how esports and VR tie together. While a lot of people are running these as separate attractions, some are trying to combine them. It’s all in marketing, and it’s putting a lot of pressure on the FEC to spend a great deal of time on marketing just one of its attractions. Right now, it’s usually the manufacturer that’s doing the heavy lifting with the marketing…and it’s to their advantage to do so. But, once they get past their initial breakout, I don’t see how they can devote that much time to individual facilities on a regular basis. The more that enter the marketplace, the more each FEC will need to market and promote its VR and esports attraction(s).

We’re spending time now trying to tie escape rooms to VR. We’re trying to learn as much as we can about developing and picking great content. As this continues to evolve, I see that we’re not going to ever rely on just one company to keep developing its own content. It almost has to be open platform.

Going back to our history lesson, is there any way you can relate that to previous times in this industry? The first thing that comes to my mind is video kits (control circuit board, wiring harness, buttons, joystick and graphic header). The kit mentality is what you now have with VR. Companies are looking at developing platforms that can bring in content from developers across the board. That opens up a world of possibility for everybody.

Technology moves forward in a predictable manner. Look at the JAMMA harness system that paved the way for buying kits over dedicated games, a practice that went on for years. With that system, each different game (content) could easily be installed into the same cabinet. That said, I don’t see now how we could even go a few months with an open-platform VR system today because of the accelerated rate of change in the introduction of new technologies.

Takeaways here are simple. We can’t limit our horizons on the current players (customers) we know and understand today. We need to look at the big picture of what’s going on in our culture, in the changing habits of players in and out of our industry. We should take the time to reflect and scheme, study and imagine. Individually and collectively, brainstorming about what we can do to evolve and grow can only help the longevity of out-of-home entertainment. Every challenge is an opportunity.

 

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Frank Seninsky is president of the Alpha-Omega Group of companies, which includes a consulting agency (Amusement Entertainment Manage­ment), two nationwide revenue-sharing equipment suppliers (Alpha-Omega Amuse­ments and Alpha-BET Entertainment), and Alpha-Omega Sales, a full-line game and related equipment distributor. During his 47 years in the leisure entertainment industry, Seninsky has presented nearly 400 seminars and continues to regularly write columns in numerous trade publications. He served as president of the AMOA (and was on the board for 22 years), and was president of IALEI (founding member and on the board for 11 years). Frank is the sole owner of Foundations Enter­tain­ment University, now in its 16th year. He is also considered a leading industry expert in the design, layout, and operations of coin-/debit card-operated arcades and FEC attractions, and is often called upon as an expert witness in cases involving the amusement industry. Frank edits The Redemp­tion & FEC Report e-newsletter (35,000+ readers worldwide) and also writes a blog at www. frank-thecrank.com. Frank can be reached by phone at 732- 616-5345 or by email at [email protected] (website: www.AEMLLC.com).