Wherever You Are: Match Offerings To Markets, Control Costs

by Frank "The Crank" Seninsky; Amusement Entertainment Management (AEM)
Posted On: 4/29/2019

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  Frank Seninsky
When Vending Times invited me to write more frequently, its editor and I discussed the direction I might take in this column. We covered a lot of ground, and I can't say that we nailed down a firm game plan. But we are interested in the same things – traditional and new methods for operators to succeed and prosper (and, if it doesn't work, to learn how to fail fast and try another approach) – always moving forward.

VT, which reported on the Foundations University presentation during the recent EAG International Expo in London, asked me to compare the leisure-amusements industry in the United States with its counterparts overseas. On the basis of my experience with setting up family entertainment centers in other countries, I'd say that, in general terms, the U.S. is in the lead, but we all can learn from one another.

Changes In Latitudes

The British industry doesn't lack imagination or creativity, but it has been struggling in a quagmire for decades because of the enduring popularity of two-pence coin pushers in pubs/arcades. I say that these low-stakes gaming machines are seriously constricting the progress of the business, and the more diversified operators know it.

Other countries have different problems and, often, important strengths; we might take lessons from them. For example, setting up the first western-style redemption game center in Da Nang (Vietnam) was a valuable experience for me.

In addition, I've tested and run redemption games in Chinese entertainment centers. In the U.S., a basketball arcade game is a one-player-at-a-time competitive game: I play and my score is recorded, and then you play. But in China, many players play the game at the same time as a highly skilled tactical team. Some feed the balls to the shooters, some bounce the ball off the side and into the basket. Their scores are maxed out. They play every game as a team, with much less scope for individuals.

For Chinese FECs I needed to put more balls in the game, deflate the balls a little, lower the points/basket, and delay the bonus feature until the end. What it means in general is you have to match each game to the culture of the people who are going to play it. This is worth keeping in mind at home as well as abroad; a rural market may well have different enthusiasms, likes and dislikes from those of an urban area, even if the two are close together – and urban areas differ from one to the next.

In the United States, I've learned about games from the "masters" of the New Jersey Shore boardwalk arcades (and I've been learning there for a long time). Those New Jersey boardwalk arcades were the birthplace of coin-op amusements, especially redemption and "diggers" (now called cranes), and they have their own special ways of doing things.

Wherever you are, the average per capita spending will be determined by the area you're operating in. Look at the movie theaters, bowling centers, their snack bars and so on and on; the pricing will be the same throughout a target market, all based on that same average per capita spend. Your individual game pricing/play must be based on how much money your average customer has to spend during their visit (to an FEC or even a street location). For example, a street operator has to look at his average cost per machine to service a location. If it's costing you $25 a week for the overhead, labor, car/truck, gas/tolls, parts…, then if your game is grossing $50 a week and you give the location 50% or $25, you're spinning your wheels – even if the game is paid for. You're not making any money, but at least you are covering the cost of your collector.

One difficulty is that operators often allow their pride in the number of pieces they have out to overcome their practical sense that too many of those games aren't contributing anything to income. I've seen the same thing in the bowling industry, where the number of lanes available determines bragging rights. You don't take bragging rights to the bank. If they take 6, 8, 10, or even 12 of the lanes out or a 40-lane center in a small market and put in a redemption arcade and one or two key attractions, they'll build traffic – and they can adjust their prices accordingly. There's a lot of similarity between bowling proprietors and game operators, both work their tails off and put in long hours. The good news is that each of these two key sectors is waking up to reality.

New Technology: Debit Card Systems

Many innovations have come along over the past five decades. Some have been transformational, others looked that way but fell by the wayside. One that has gained traction as a real step ahead is the debit card system, not only for payment to play but for redemption and general collection of important data. These systems are not new, although they continue to add features and functionality. At present, I estimate that about 20% of entertainment centers are using them, a level of acceptance at which a technology starts to gain traction. The new locations get them, but there are thousands of FECs, including bowling centers with more or less extensive games and other attractions, that still are using tokens – including thousands that still operate the games on quarters and have no discounting packages at all in place – how unfortunate!

Reducing dependence on cash and increasing the speed, accuracy and depth of transaction data has a lot of benefits. For best results, the POS system should be used not only for gameplay payment but also for other attractions on site, as well as for the foodservice. Doing this not only provides the most useful management reports, but also increases customers' participation in loyalty programs and gives them a reason to lengthen stay (spend more) and visit more often.

Our industry today faces many challenges, from increasing taxes, licenses and regulations to inflexible minimum-wage laws and new electronic competition for our patrons' leisure dollars. But the industry always has faced challenges. Flexible and open-minded operators find their way around those obstacles, and they'll continue to do so. And that, my friends, you can bank on!

» FRANK SENINSKY is a half-century veteran in the leisure entertainment industry. Known during (and after) the videogame revolution as "Frank the Crank" for his incisive, operator-focused game reviews. He went on to found the the Alpha-Omega Group of companies, of which he currently is president. This enterprise  includes a consulting agency, Amusement Entertainment Management (AEM), two nationwide revenue-sharing equipment suppliers, Alpha-Omega Amusements Inc. and Alpha-BET Entertainment, and Alpha-Omega Sales, a full-line game and related equipment distributor.

Seninsky has presented more than 400 seminars and penned more than 1,600 articles. He has served as president of the AMOA from 1990-2000 and was on its board of directors for 22 years. He also was a founding member of the International Association for the Leisure and Entertainment Industry (IALEI), and served as its president from 2005 to 2006 and as a board member for 11 years. His columns appear regularly in Tourist Attractions & Parks, RePlay, Vending Times, Bowling Center Management, Entertainment Center News, and previously in InterGame, ParkWorld, PlayMeter, CoinSlot, EuroSlot, Games & Leisure, Fun World, InterPark, Bowling Industry, and Star-Tech Journal.

Seninsky is the sole owner of Foundations Entertainment University education program for FEC operators in the U.S. and overseas, now entering its 17th year, and editor of The Redemption & FEC Report, an acclaimed e-newsletter sent to more than 25,000 readers worldwide. He is considered the leading industry expert in the design, layout, and operations of coin/debit card operated amusement game arcades and FEC attractions, and is often called upon as an expert witness in cases involving the amusement industry.

Please send comments and suggestions to Seninsky: email: fseninskyaem@gmail.com or call at (732) 616-5345.