Music & Games

Family entertainment centers set to surge through 2026

FECs catering to younger audiences seeking both physical and social entertainment have superseded the traditional amusement arcade.

Image provided by Technavio.

August 14, 2023 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

Family entertainment centers have experienced significant growth worldwide since consumers have become more confident about treating themselves to more leisure opportunities since the pandemic.

The growth, however, precedes the pandemic, as amusement machine manufacturers have introduced more immersive experiences along with more contactless and cashless payment methods that cater to today's audience.

The family entertainment center market estimates a market value of $21.05 billion per the latest market report by Technavio, a market researcher.

In addition, the research projects the market to progress at a combined annual growth rate of 12.29% through 2026.

Audiences seek new experiences

The growth of FECs has been largely driven by an increase in the number of teen and adult customers who are shifting from playing videos games at home toward collectible action strategy and war-based arcade gaming, according to the research report.

The FECs catering to younger audiences seeking both physical and social entertainment has superseded the traditional amusement arcade, Kevin Williams, a Vending Times contributing editor based in the U.K., said in a recent interview. Other venues catering to this audience include mixed use leisure entertainment centers with karting and bowling, as well as boutique bowling venues, mini-golf and "cinetainment" — venues that add social entertainment to the theater scene.

"The traditional arcade did not decline, it failed to adapt, and was superseded by what a video-console savvy new audience wanted. They wanted mini theme park style approaches, and they wanted a high level of engagement and fun," said Williams. "The FEC and MULE (mixed use leisure entertainment centers) have evolved to offer this and are evolving again to entertain the new 'kidult' market with social entertainment venues and competitive socializing."

Game technology evolves

Innovations in game technology have changed gaming from 2D gameplay on a screen, which only requires gamers to use their hands, to virtual reality, in which the gamer can experience the virtual world of gaming, the Technavio report noted.

The rising integration of VR in games is one of the key FEC market trends that is expected to impact the industry positively in the forecast period. The main goal of VR is to stimulate the user's physical presence in a virtual environment.

For example, in 2021, Sega Corp. introduced a "VR Agent," which is an action game where players travel around several scenes as an agent sniper and eliminate terrorists with a pistol, shotgun and machine gun.

To enhance the customer experience, gaming technology vendors have also developed games where gamers can stand up and move around naturally instead of playing games on a screen using gaming peripherals. One recently introduced VR laser tech arcade game offers a platform where players can move around and play.

"Video amusement has been supported by VR amusement pieces and mid-scale amusement such as simulators and 4D theaters," said Williams, who has reported extensively on the introduction of VR, along with artificial intelligence and machine learning technologies that enhance FEC games' immersion experiences.

Valo Motion's recently introduced ValoArena platform offers an immersive enclosure for up to six players to share various game experiences. The "motion capture" captures their physical movements and places its representation into the action, steering the outcome of the game.

"Motion capture" has also been deployed in VR attractions from the likes of VEX Solutions, Hero Zone, Lightning VR, Creative Works, Dreamscape and SandboxVR with environments created virtually where multiple players compete. Tracking systems capture their physical movements.

In addition, "FEC has seen an explosion in redemption and 'videmption' machines, with prize centers," said Williams.

Global trend

FEC growth has been global, according to the Technavio report

More than one third (36%) of the FEC market's growth will originate from North America during the forecast period as the U.S. and Canada are the key markets for family entertainment centers in North America. Market growth in this region will be faster than the growth in South America and Middle East and Africa.

While traditional amusement arcades have declined, Williams pointed out they have not disappeared. Through consolidation, large chains like National Entertainment Network continue to operate traditional arcades in malls and truck stops.

The traditional amusement sector has been replaced by a new dynamic young industry.

"However, this growth is not from the traditional industry, but from a new infusion of smart investors," he said. The new players are using the latest frictionless technology to engage with their audience, employing new immersive entertainment offerings and updating their offerings based on guests' data capture and looking at new engagement models.

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