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Issue Date: Vol. 50, No. 6, June 2010, Posted On: 7/7/2010


FIGHTING FIRE WITH FIRE: Pay-For-Play Is Best Defense Against Free-Play Temptations


by Kevin Williams
interactive entertainment, public space entertainment, arcade videogame, videogame, video game, coin-op video game, away-from-home entertainment, Kevin Williams, The Stinger Report, TouchLife, NTN Buzztime, AMI Entertainment Network, Namco Bandai, Pac-Man, TouchTunes, jukebox, videogame, bar games, taverns, coin news, IF New Media International, Peavey

Games and music are highly valued by the hospitality sector - represented by bars, taverns, clubs, pubs, restaurants, fraternal organizations, lounges, and even movie theater lobbies and hotels. Although this market loves games and music, it does not always love music and game operators. Therein lies the source of eternal tension between the two.

As usual in business conflicts, it all comes down to money. "Unenlightened" location owners tend to regard every dollar in the pocket of every customer who walks in their doors as "my money."

Never mind that the operator’s league may be the main reason the customer showed up in the first place. Never mind that the operator’s games and music are responsible for the customer staying three hours instead of just one hour. Never mind that the operator’s cashbox is why the customer spent $25 on games and music over those three hours (instead of just $10 nursing a couple of beers for one hour).

The amusement and music industry knows better, of course. Industry professionals are keenly aware that their hard work and substantial investments in marketing, promotions and attractions (i.e., the operator’s leagues, tournaments, contests, and above all, a careful selection of well-serviced and well-maintained machines) are responsible for $15 in incremental profits whenever the customer spends that $25 in total instead of just $10 on drinks.

Of course, some location owners intellectually agree that the operator deserves his cut. But emotionally, it’s a different story. Deep down, many still "feel" that the whole $25 tab is really "my money" - and they resent every penny that they are forced to give to the operator as a commission split.

This mentality - "Don’t get between me and my money, Mr. Operator" - on the part of so many clients makes them especially vulnerable to the appeal of location-owned equipment. This mentality also makes location owners especially vulnerable to slick pitches for all sorts of rental deals and subscription programs from national entertainment companies whose equipment is not pay-for-play, and who do not, in the traditional sense of the term, "operate."

Location owners don’t have to go very far to be subjected to these temptations, either. Such offers fall into their laps all the time – in the pages of location magazines; in the exhibit booths of location trade shows; in the direct mail that floods their mailboxes every day; and the in-person solicitations that walk through their doors every week.

Through all these channels, location owners are constantly reminded that new technology is exploding in all directions: satellite networks, cable, broadband, closed-circuit high-def TV networks, digital signage companies that are increasingly merging into entertainment providers, and so on. What’s more, as more companies and products spring up to leverage such technologies, more and more locations are subjected to more and more forms of this "temptation" with each passing year.

WHAT’S THE BUZZ?

To cite just a few examples: Most operators are vaguely aware that a company called NTN Buzztime has established a U.S. network of 4,000 bar and restaurant locations that utilize NTN’s wireless terminal game system, offering trivia and simple game narratives over its special television channel.

NTN is not standing still. Last fall, in the latest of its ongoing upgrades and improvements, the company announced the launch of a new sports network (including fantasy football, a huge hit with young men online these days). This product is aimed at a younger audience, with the hope of drawing a broader demographic into NTN’s customer base. In addition, NTN now offers weekly prizes that can be promoted by any venues that permit their equipment to be installed.

Obviously, every moment a bar or restaurant customer is playing an NTN game, he or she is not playing a pool table, dart game, videogame, crane, merchandiser or pinball. In all likelihood, that customer probably isn’t playing the jukebox either.

INTEGRATED MENUS

Another example: The growth in wireless entertainment terminals for hospitality venues also sees these systems connecting with other digital entertainment within the sites. Some new entertainment systems link to the venue’s food ordering systems, allowing patrons to select food and drinks, as well as music and video, from the site’s platform. "Menu" terminals thus become an extension of the jukebox and gameplay environment.

Operators should expect to see locations become more and more tempted by this form factor, driven by innovative consumer technologies and products such as the new Apple iPad (which sold two million units in its first 45 days on the U.S. market).

Gesture recognition and motion-tracking technology are also becoming more popular for bar and restaurant applications, removing the need for a terminal – with the imagery projected directly onto a convenient surface. For example, such systems as the TouchLife table package from Touch Taste Technologies offer an impressive interactive touchscreen table system supported by a comprehensive firmware environment. But despite the somewhat misleading name, digital content is not confined to a touchscreen monitor; it can also project onto tabletops and other surfaces.

Another newcomer to this emerging sector is IF New Media International Ltd. The company’s e-Bar offers compelling game content that embraces gambling themes and games (roulette, blackjack, etc.) as well as traditional amusements (video air hockey, plus proprietary games like Magic Flash, and Fish Pond). An image of game content is projected off the screen, while customer interaction is supported by motion-tracking so the player’s hand movement can be represented within a game. IF New Media claims their system is "the world’s first interactive game specifically designed for nightclubs and bars." (That will come as news to many in the amusements industry.)

Music game publisher MTV Games debuted a breakthrough product for the hospitality sector earlier this year with its Rock Band: Bar Nights. The product builds on the billion-dollar selling multi-player music console game now presented as a new wave of in-bar entertainment system. Harmonix and MTV Games have developed an official program designed to provide the necessary tools to make Rock Band bar nights a turnkey event-driven entertainment system. MTV Games claims it can drive a 36% increase in venue traffic with the system, resulting in 30% higher sales in test locations.

Another new entrant into this space is Peavey Electronics, makers of music and sound systems for everything from concert stadiums to churches (and speaker suppliers to Rock-Ola jukeboxes). Peavey’s new Game Audio System is able to offer the consumer a music-based videogame experience in a public performance setting … but it is not coin-operated. By removing the "pay-for-play" element, Peavey has turned the gaming experience into a promotional platform. This has significant competitive implications for the music and game machine industry because it could represent the beginning of a brand-new marriage between an industry already familiar with high-level customer promotion and marketing, and an industry able to present compelling game experiences to a burgeoning and game-savvy audience.

The hospitality industry is also starting to be offered entertainment that piggybacks on the hot new trend of social networking. Indeed, specialty venues are popping up that mix social networking with food and beverages in one environment. For example, last year the restaurant chain Chickie’s & Pete’s debuted its Play2 location, billed as "the world’s first interactive sports bar." Play2 has 18 semiprivate customer booths equipped with 58" plasma TVs and lighting systems. Some booths have consoles for Xbox, Wii and PlayStation games; others come with musical instruments so that customers’ performances can be shown on screens.

A final example of the hospitality environment aiming for both younger players and the older audience has reared its head in the Holiday Inn Select in Atlanta. They offer customers an experience called Wii Play with the tagline "Relax! Drink! Dance! Play!" A $10 entry fee offers admittance into a venue with DJs, dance floor, drinks and consumer game decks set in a nightclub atmosphere. Again, operators should expect to see much, much more of this kind of thing in the months and years to come.

How can operators fight back against sophisticated, integrated "technology-plus-content" platforms of this type? The challenge can be particularly difficult (and annoying) when the sales pitch is: "Listen up, Mr. Location Owner! Now you can get rid of your grumpy old operator and his annoying 50% cashbox split! With our flashy new XYZ Gizmo Digital Entertainment System, you only pay a low monthly flat fee. You can attract all the hip kids who have lots of money to spend. Best of all, you get to keep all the incremental profits for yourself!"

The pitch may sound like baloney to most traditional music and games operators. But it is music to the ears of many location owners (and we don’t mean jukebox music, unfortunately). What’s more, as technology and business savvy of hospitality vendors continues to grow ever more sophisticated, the ratio of baloney to truth in this sales pitch will become more and more unfavorable to traditional music and games operators.

FIGHTING BACK

But make no mistake, operators can fight back. Their first line of defense, of course, is traditional music and games. In a great bar or tavern, or any other highly trafficked hospitality venue, the latest videogame and the hottest merchandisers – and sometimes even a traditional pool table or jukebox – can earn $1,000 a week.

It is the second line of defense that is becoming more important, however. We must never forget that the music and amusements trade is a "novelty" industry. Like it or not, operators and location owners are in a "business marriage"... and every marriage is in danger of going a little stale over time, if the partners begin to take each other’s virtues for granted.

The solution is for operators to be zealous about staying on top of the latest and greatest technology that their own sector has to offer, and to be equally zealous about presenting those products and technologies to the locations they already have. Just as every husband must continually court his wife to keep the romance alive, every operator must continually market to his best locations to keep them excited about what he has to offer.

And, make no mistake, this industry has some compelling and moneymaking new technologies and products that go well beyond the "same old, same old" music and games. (No disrespect intended; see below for how even traditional music and games can remain fresh and exciting.)

ADAPT TO COMPETE

A good example of pay-for-play high-tech that can compete with anything else being offered to hospitality venues is available from TouchTunes. Its PlayPorTT handheld tablet is a wireless, interactive multiplayer unit featuring a 15.4" laptop touchscreen. With over six hours of battery life, the unit links to a library of 40 games. PlayPorTT tablets are rented out by the venue owner, with the appropriate security technology to avoid the theft.

In a similar vein, AMI Entertainment Network has a dynamic touchscreen product with its Megatouch Rx terminal. But now with its latest production version of the wireless Megatouch (FireFly), the company also offers a wireless gaming terminal that takes the versatility of the gamedeck to a new level. This product networks games, music and food-and-drink ordering functionality into a single, totally integrated, wireless package. To make it even more compelling, the product is supported by the BarFly television network (already supporting 40,000 screens in the hospitality scene).

VT readers don’t need to be reminded that networked dart games, networked videogames, tournaments, leagues and other classic forms of marketing, and "new" technologies are available from their traditional manufacturer suppliers. These products can compete with, and win against, anything the hospitality industry has available today.

In addition, the music and games industry does not always have to go to the trouble and expense of opting for wireless networks and elaborate league marketing to provide compelling novelty. Sometimes, all it takes to make a location owner’s eyes light up is a simple nod to his role in the entertainment offering.

For example, Namco Bandai made a point of including cup and glass holders in the cabinet of Pac-Man: Battle Royale, the 30th anniversary edition of its classic coin-op videogame. High-tech? Not at all ... but it embodies the integration of food, drink and fun that are the essence of winning the battle for the loyalty of the hospitality sector.


KEVIN WILLIAMS is founder and director of the out-of-home leisure entertainment consultancy KWP Ltd. His nearly 20 years experience in global video amusements and high-tech attractions includes top management and design posts, with a focus on new technology development and applications. He is a well-known speaker on the industry lecture circuit, and has authored numerous articles. Williams is also editor and publisher of The Stinger Report, a leading industry e-newsletter and Web-based information service. Go to thestingerreport.com to sign up for a free subscription.


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