Breaking News - The Redemption & FEC Report

February 2016

In This Section

Breaking News

TRR-FEC Welcomes 23 NEW ADVERTISERS for 2016. Thanks for your support!
Online Gambling is the Hidden Feature in Some Popular Video Games
What is Causing the Closing of Traditional Bars in America?
Catching The Prize – ‘UFO Catchers’ Japan Style!
What Does the Public Expect from Loyalty Programs? Starbucks Customers Are Using Social Media to Tell Starbucks How They Really Feel.
Differences Between Successful & Unsuccessful People (Chart).
Foundations Entertainment University Just Announces 2016 Schedule.
Industry Events 2016.

Section 2

New Products & Technologies

Ask Frank the Crank

Top Redemption & Merchandiser Prizes

Section 3

Top 61 Ranked Revenue Generating Games Combined List & Test Games Spreadsheet Covering 4 Test Locations

Breaking News – TRR-FEC Welcomes 23 NEW ADVERTISERS for 2016. Thanks for your support!

A&A Global Industries
Amusement Products
Apple Industries
Bob’s Space Racers
Coastal Amusements
Coast to Coast Entertainment
Deltronic Labs
Dynamic Designs Architects
Fun Express
Incredible Technologies
LaserBlast
Laserforce
Northeast Insurance
Sacoa Debit Card Systems
Sheryl Golf
Smart Industries
Sterling Risk Insurance
Studio 41b
Team Play
The Toy Factory
TrainerTainment
Universal Space (UNIS)
U.S. Bowling

Online Gambling is the Hidden Feature in Some Popular Video Games

Here’s the Ticket!

On-Line Gambling is the Hidden Feature. What is really going on when people play group video games on-line? Why are these types of games so addictive?

It is estimated that 50% of people ages 10-50 that playing online group video games are also gambling. ‘This is not possible’ says the uninformed general public, including many in the amusement games industry. The fact is, that the gambling goes on ‘outside of the game’ but still on the Internet.

As an example, a player can play for 100 hours and their reward is to have their virtual sword glow. Their sword does not gain any more strength or powers but having a glowing sword makes them feel special (an ego thing). Now they can sell their virtual sword to another player for, say $1000 cash or for another form of payment. This is the same as working for something physical in the real world and then selling it. In essence the video game player has a job played a game for 100 hours and has the option of being paid $10/hr. or keeping the glowing sword. This is just an example and does not apply to Skylanders (our next example) where you cannot buy an enhanced weapon.

You can check out the above ‘smart toys’ on skylanders.com. Activision Blizzard (NASDAQATV) is the franchise owner of Skylanders ($3 billion alone in sales of ‘smart toys’ or ‘toys-to-life’), a company that is making a substantial proportion of their revenues selling real world physical toys that possess add-on digital content. Using scan codes, the video game players use these add-ons to ‘dress up’ and create their own virtual identity within the game or to obtain, for example, map codes that help them advance to new adventures. Activision Blizzard is the largest video game company in the world. Their major franchises include Cal of Duty, World of Warcraft, Skylanders, Candy Crash Saga, and Destiny. 2015 revenues of Activision were $4.6 Billion. 2016 revenues are projected at $6.25 Billion.

💡 What this Could Mean?

This topic is critical to the amusement game industry. We all know that home pc and mobile games have been a major reason why our industry has saw annual revenues decline from $20 Billion to $6 Billion. At the same time our industry has come under fire because some amusement games are less than 100% skill. [Note that I have gone on record that there is no such thing as 100% skill, at least not on Earth, as the Earth is in constant motion.] That is pretty ironic when actual gambling is taking place under everyone’s noses in the home video game industry. I leave it to your imagination as to how much revenue goes untaxed and the many ways that payments are made between players.

The online video game industry is expected to grow to $93 Billion by the close of 2019. Where does all of that money come from? A lot will come from the regular home game video game industry but logic tells us that some of it will certainly come from the amusement game and out of home leisure entertainment industry. 2009 amusement game total revenue was $5.3 M and 2010 was $4.8 B. I have seen more current figures of $3.8 B but the source was not confirmed. Even so, the question remains: What are we as an industry doing to grow our sector?

What is Causing the Closing of Traditional Bars in America?

Here’s the Ticket!

During the 10-year period 2004-2014 more than 12,000 neighborhood taverns across the U.S. have shut down permanently. According to Nielsen TDLinx there were 71,864 bars in 2004 and 59,555 in 2014, a 17% decrease. There were an average of 6 bar closing/day in 2014 (highest year) and 2015 saw an average of 3 bar closings/day. States hit the hardest are Arkansas, Indiana, Kansas, Michigan, and Virginia. However, more new style bars are opening than closing in Florida, Georgia, Louisiana, New Hampshire, and Washington D.C.

What is the reasons behind these patterns?

Growth in craft beer brew pubs and wine bars
Raising of the ‘bar’ (pun) in quality of food served
Decrease in heavy alcohol ‘shot’ bars.
Theming & design has become more important (think retro).
People want a full dining experience when they go out.

💡 What this Could Mean?

This means more demand for amusement games in more upscale high-trafficked locations. The old adage, ‘Put your games where the people are’ still applies. Opportunity is knocking for older classic video games, pinball machines, skee-balls, basketballs, merchandisers, shuffle alleys, air hockey, pool, juke boxes, boxing games, and even full redemption. Don’t forget the new style photo booths with smaller footprints. Yes, opportunity is certainly there, but there are not many of the old classic video games and pinball machines around in vendor’s warehouses (that can be reconditioned and revenue-shared or sold at a reasonable cost) to meet demand.

This opens the door for manufacturers who can cheaply manufacturer the old classic video games with a small footprint. One example is Tyler Bushnell’s Polycade-Retro-Arcade that will soon ship with 90 classic video games in a wall-mounted cabinet that sells for under $2000. Polycade uses open source emulator software so it is capable of being programmed for hundreds of more games from different popular platforms. Tyler is Atari founder, Nolan Bushnell’s son. For the record, Tyler has raised more than $125,000 from Kickstarter to get this project started.

Perhaps this is also an opportunity for video-redemption to take a giant step forward and bring back several classic redemption games in one cabinet. There are also now more companies making pinball machines, a couple that are working hard to sell at 2/3rds the price of the established manufacturers. Entrepreneurism is alive and well.

Polycade Retro Arcade

Catching The Prize –‘UFO Catchers’ Japan Style!

Here’s the Ticket!

Special feature for The Redemption & FEC Report, by Kevin Williams, publisher of The Stinger Report – following up their in-depth coverage of the Japanese Amusement Expo (JAEPO) held in February outside of Tokyo and attended by just over 17,000 people (down 3,600 from 2015). Kevin looks at the influence of UFO Catcher’s (known as cranes or claw machines), and what it could mean for the Western amusement scene.

The event was hosted, ironically, the same week Street Fighter V was released, though this marks the first title in the series that will not include an arcade release. Even without that video franchise in the mix, JAEPO still included plenty of new games, including fishing simulators, cutting-edge photo booths, cranes, Tekken 7 and the ever-popular rhythm games.

One constant was the many different versions of Japanese crane machines, known in the territory as UFO Catchers (or sometimes Claw Machines). They differ incredibly from their Western counterparts. These systems have two or four prongs (claws) jutting from a central unit that the player steers round the prize floor to grab their desired prize. The machines synonymous with being highly illuminated and filled with the latest ‘must have’ popular brand hard and soft good prizes

The systems name derives from the alien UFO shape of the central unit, hovering over prizes and seemingly trying to beam them up. Another name used to describe these machines is ‘Unidentified Furry Objects’ Catchers. UFO’s can trace its roots back to 1985, when SEGA launched their first UFO Catcher, revolutionizing the prize machine landscape, shrugging off the less expensive carnival approach of the mechanical crane machines with joystick controls made in the West at that time.

UFO Catcher

UFO Catcher 9

Marking some 30-years in operation and to recognize this influential milestone, at this year’s JAEPO, SEGA launched their ‘UFO Catcher 9’. This is the first in the series to have a player LCD touch-screen panel on the front control panel. All the action is controlled by pushing buttons. The wide open bays have no pillars blocking the two players’ views.

All the major Japanese factories have their take on the UFO Catcher model. The systems have become a beacon for the young male and female players. More importantly, these UFO Catchers have already embraced the digital horizon – many of the machines sport large flat screen displays at the rear supporting the game action and acting as an attract mode when not being played. Likewise, the latest systems are linked into the facility e-payment infrastructure, supporting smart card and smartphone payment, also alerting the staff when restocking of prizes is required to maintain a consistent win % and maximum player appeal.

The UFO Catcher has previously had mixed success in the West. The satellite operations of the Japanese factories report that in the past they have learned that Western players are uncomfortable with the bright lighting and unique playing style. However, recently some of the upscale FEC’s and dining entertainment chains have embraced the pulling power of these systems to their social mix. Dave & Busters’ have operated a number of the Japanese style systems at various of their venues, sources confirming that the company has recently ordered a number of the latest ‘UFO Catcher 8 and 9’ machines.

The tide is turning as new technologies are being added to the Western crane machines. Manufacturers like Elaut, Coast to Coast, ICE, Smart, S&B, and others are incorporating digital features, color changing LED light systems, and a more presentational style to their systems. How long it will be before we see technologies applying joined-up thinking to linking the prizes in the cranes to the latest trends? [Note that TRR had previously advocated incorporating video redemption into merchandisers and creating a game within a game within a game by adding challenges and digital add-ons to overcome some of those challenges. —Frank ‘the Crank’.]

What Does the Public Expect from Loyalty Programs? Starbucks Customers Are Using Social Media to Tell Starbucks.

Here’s the Ticket!

Loyalty programs are everywhere it seems. Twitter is the place where people communicate how they feel about brands and also follow celebrities and politicians. This past weekend Tiger Woods and Steph Curry dominated, but this week Starbucks is at the center of a tweeting controversy. Social media can be a blessing or it can be a curse.

For those of us who track and watch the social media landscape, Starbucks has one of the most popular and top-rated loyalty programs on the planet. Starbucks CFO Scott Maw, trying to get out in front of the visit vs spend issue, recently announced ‘changes’ to the Starbucks ‘My Reward’ loyalty program. “We did an extensive amount of research and focus groups and surveys around different changes to the program. We’re pretty confident this is the right thing to do. A very small minority will be negatively impacted by this.”

Before this announcement, the Starbuck’s loyalty rewards were based on the number of customer visits. Starting in April, the new ‘My Starbucks Rewards’ will award their ‘stars’ based on how much money a customer spends (light frequent flyer miles).

Maw went on to say, “We believe that customers, because they earn more, will spend more. It’s really that simple…and is an important part of what these changes mean for us.” To better understand why Starbucks is the center of the Twitter world, here are some of the key changes to their loyalty program:

*Mid-April-Any customer at Welcome or Green will be upgraded to Gold. Current Gold members will receive a year of gold membership.

Right after Starbuck’s announcement, Starbucks customers and the general public started tweeting how they really felt about the changes. Here are a sample of those tweets:

Dear @Starbucks: time to say, “good-bye.” Your new #StarbucksRewards program doesn’t work for me. It is you, not meDISLIKE new
DISLIKE new #StarbucksRewards. Used to feel like a loyal consumer, now I’m reminded I am only a dollar sign Old program: 12 visits for
Old program: 12 visits for freebie. New program: 32 visits. So much for being a 22-year customer. Thanks I will no longer be passing by other coffee shops in search of Starbucks. Time to give your competitors a try
I will no longer be passing by other coffee shops in search of Starbucks. Time to give your competitors a tryHey
Hey @Starbucks, your new #starbucksrewards is NOT about loyalty anymore, but gouging your loyal customers $62.50 for a free coffeeI’ve been a loyal customer for years. And this new star program is how you reward me?
I’ve been a loyal customer for years. And this new star program is how you reward me?Wow
Wow @Starbucks your new #StarbucksRewards isn’t very rewarding. 20 visits v 12 to unlock freebies?Time to give my
Time to give my @DunkinDonuts app a tryHave been a
Have been a #StarbucksRewards gold member since 2011. Not impressed w/new changes. Not wise to punish your breadnbutterWell
Well @Starbucks you just removed the only reason this gold member chose you over competitorsYour biggest mistake was trying to tell people they requested the change. No one
Your biggest mistake was trying to tell people they requested the change. No one believes that at all. LolI may not be a mathematician, but I know when I’m being screwed. Thanks, but no thanks
I may not be a mathematician, but I know when I’m being screwed. Thanks, but no thanks“We’re screwing you b/c we know you’re too lazy to do
“We’re screwing you b/c we know you’re too lazy to do math.” Before: $24/ reward. After: $62.50Making me spend more to earn loyalty rewards will not make me spend more. Or earn any
Making me spend more to earn loyalty rewards will not make me spend more. Or earn any #loyalty
Hate the new Starbucks rewards program. Am a gold member. Will go much less
New reward program = awful, not looking out for the customer at all, questioning my loyalty greatly as of late
New rewards program doesn’t seem consistent with Howard Schultz’ philosophy of taking care of the customer

💡 What This Could Mean?

It would appear that Starbucks has a public relations issue. The good news is that they are a big company and have the money to either wait out their ticked off customers, compromise and roll back the program, or come up with a new twist that will bring their disgruntled customers back. Our industry cannot afford to start a loyalty program and then roll it back to where our customers feel we have screwed them over.

Social media works well when we interact positively with our customers and get them to tweet about our facility or post pictures, live video (Periscope), and positive comments on other social media platforms such as Facebook, YouTube, Instagram, and others. The problems start when our attendance levels increase and we do not have the through put capacity or capability to properly handle the increased customer traffic. Maybe we do not have enough parking. Maybe we are understaffed or not ready for the onslaught.

It will only take a few disgruntled guests to rip you apart and not long before you have a public relations problem. Yes, social media can be a blessing or a curse. The old adage applies here: ‘Be careful what you wish for.”

Differences Between Successful & Unsuccessful People

I came across this chart (Below) on LinkedIn News and wanted to pass it along and perhaps you will pass it along (or post it in your employees break room) to your employees and maybe even your friends and family.

Foundations Entertainment University Just Announces 2016 Schedule

Instruction on the best FEC operational practices, not unlike the VIP customer strategy described in this issue, is available at Foundations Entertainment University, which assembles three times a year. This year’s first FEU, class No 38, will take place during June 14-16 in Chicago, IL. The next two sessions will be held on August 22-23 in Atlanta, GA and on October 18-20 in Phoenix, AZ. The $689 tuition fee includes 2-1/2 days of classroom instruction; lunch and dinner on Tuesday and Wednesday (the special hotel rate includes 3 breakfast coupons); a Tuesday-evening tour of local entertainment centers; and a comprehensive manuscript book and CD. Informal one-on-one consultations with instructors and attending sponsors greatly enhance the value of the program.

FEU, now in its 14th year, covers financial feasibility, planning, design, financing, development, marketing and managing a successful location-based entertainment business. Frank Seninsky is a founding member of the faculty, which also includes Randy White, White Hutchinson Leisure & Learning Group; Jerry Merola, Amusement Entertainment Management (AEM); Frank Price, FL Price; engineer Peter Olesen, Entertainment Concepts; and Kevin Williams, KWP Ltd. Frank Price’s Birthday University is held in conjunction with Foundations Entertainment University. All FEU attendees can attend Birthday University for $10.

Graduates of FEU’s class No. 37 came from a wide variety of entertainment facilities operating in North America and Puerto Rico. They included operators of indoor and outdoor FECs, children’s centers, trampoline parks, skating, water attractions, bowling centers and roller rinks, along with laser tag arenas, nature farms, and arcade game operations.

foundationsuniversity.com

Industry Events 2016

Dates	Name/Link	City/Country	Frank ‘the Crank’
March 2016
07 – 09	RSA Regional Convention	Indianapolis, IN, USA	💡 SPEAKING
07 – 10	Pizza Expo	Las Vegas, NV, USA
09 – 11	IAAPA Latin American Summit	Mexico City, Mexico	➡ ATTENDING
09 – 11	Asia Amusement & Attractions (AAA) Expo	Guangzhou, China
14 – 18	Game Developers Conference (GDC)	San Francisco, CA, USA
15 – 17	Amusement Expo International	Las Vegas, NV, USA	💡 SPEAKING
15 – 17	Laser Tag 1-Day Seminar Program at Amusement Expo	Las Vegas, NV, USA	💡 SPEAKING
15 – 17	NBVA Convention	Las Vegas, NV, USA
16 – 18	ENADA Spring	Rimini, Italy
April 2016
06 – 07	Birthday Univesity	Chicago, IL, USA
10 – 15	BPAA School for Entertainment Center Management	Arlington, TX, USA
11 – 14	CinemaCon, National Association of Teatre Owners Show	Las Vegas, NV, USA
13 – 15	NAMA OneShow	Chicago, IL, USA
19 – 21	DEAL	Dubai, UAE
May 2016
21 – 24	NRA Show	Chicago, IL, USA
25 – 26	Euromat Convention	Barcelona, Spain	💡 SPEAKING KEYNOTE
June 2016
08 – 09	Birthday Univesity	Raleigh, NC, USA
14 – 16	Foundations Entertainment University	Chicago, IL, USA	💡 SPEAKING
July 2016
14 – 16	League SMART is a biennial education conference	Milwaukee, WI, USA

Amusement Expo International, Las Vegas Convention Center. Frank Seninsky will be presenting a session for Laser Tag and part of a panel presentation for AMOA/AAMA, both on Tuesday, March 15. Jerry Merola will also be presenting a seminar for AMOA/AAMA on Tuesday, March 15.

FRANK ‘the Crank’ SENINSKY WILL BE PRESENTING
THE KEYNOTE ADDRESS TO THE 17 ATTENDING COUNTRIES
TRANSLATED INTO 17 LANGUAGES.

THE KEYNOTE WILL BE POSTED ON THE FRANK ‘THE CRANK’ BLOG

➡ FRANK WILL BE ATTENDING
💡 FRANK WILL BE PRESENTING A SEMINAR SESSION