The LONGEST article ever written about the Out-of-Home Entertainment Industry just got Longer!!!

Four years ago, I published an article entitled: 

Why Did the Out-of-Home (OOH) Entertainment Industry Apocalypse Happen?

Below is the entire article as it was published in 2019 with updates in purple on what I sort of got right, what I got wrong, what’s still too soon to call, and what I didn’t even see coming – like Covid! How did I miss that?  🤣

Just like I said in 2019, I don’t expect 1 out of 100 in our industry to read this from start to finish; however, on a positive note, I do expect these articles to help me (and whoever reads them) to better understand what’s happening now, what appears to be working, and what’s most likely to work well into the future. 

By the time you see this article, I will have reread and re-edited what I’m writing 15 to 20 times. To the 1 out of 100 who do read all of this, THANK YOU in Advance!!! Please let me know what YOU THINK of the article and the updates to it (i.e. the good, the bad, or “Jim, you’re totally freaking wrong about x, y, and z!”). Most importantly, explain why you think x, y, or z is wrong. 

By the way, the human default setting is to identify what’s wrong (at least in our own mind), not what’s right or could be right. Knowing what’s wrong (or might be wrong) is important, but knowing what the right things are for today and the future is how we survive the Apocalypse and ultimately thrive.

One of the goals of this Out-of-Home Industry Apocalypse article was and is to think more deeply about what has happened, what is happening now, what might happen next (both good and bad), and what, if anything, we can do about it.

We need to do a better job of “carving out time” to think about what is likely to succeed both today and for the long-term. Once we begin to really see and understand what is working, what could work, and what might work even better, we must begin the never ending process of inventing and constantly improving the best out-of-home attractions, the best social gaming experiences, and the best guest services – these are the critical things that will help us to succeed far into the future!

So, remembering that the purple text is updated information, let’s dive in…

Why Did the Out-of-Home (OOH) Entertainment Industry Apocalypse Happen?

Looking back from 20 years into the future (as of today, looking back from 16 years into the future)

(The current guesstimate is that less than 1 out of 10 who are in the OOH entertainment industry will start to read this article and less than 1 out of 100 will finish it. Why? Because I’ve been told that it’s simply too long – about 18 pages (now even longer). Unfortunately, this also means the odds of the OOH Entertainment Apocalypse happening is close to 100%.) 

Seeing is NOT Always Believing

I posted this (way too long) article on LinkedIn in 2039. It was basically an analysis of the different factors that contributed to the Out-of-Home Entertainment Industry’s dramatic decline, which started in the early 2020’s (I obviously had no idea Covid was going to hit, but Covid definitely accelerated parts of the out-of-home entertainment industry apocalypse). The truth is – I wish I could have posted it on LinkedIn back in 2019. After all, the warning signs were in full view for all to see, unfortunately seeing is NOT always believing. 

It’s not like we weren’t watching another industry in the middle of its implosion in 2019. As you may recall, the retail Apocalypse was well underway and retail stores were closing by the thousands every year. The reasons for the retail brick and mortar devastation were painfully obvious, but by the time the retailers fully acknowledged the size of the problem it was far too late to do much about it.  

We all watched successful malls go from almost fully occupied to nearly empty in less than 10 years. By 2025, more than half of the brick and mortar retail stores were gone. (Covid accelerated the closure of over 15,000 stores in 2020 and retail openings have recently outpaced closures due to lots of bargains on what used to be prime retail space; however, UBS is predicting another 50,000 stores will close by the end of 2026).

The early warning signs for the OOH Entertainment Industry were definitely flashing ominously back in 2019, but few in our industry were asking the difficult questions that needed to be asked and even less were doing something about it.   

If I did post this article back in 2019, this is what I would have written. And yes I know this article may be too long for 99 out of 100 to actually read it, but the target market for this article is the 1 out of 100 who will read it and take action to create their own unique 10x future.  

Ultimately, the 1 out of 100 will be the ones who create, evolve, and operate the entertainment venues that will not only survive, but thrive.  

What is coming is an Apocalypse – NOT an Extinction of the OOH Entertainment Industry. The key question is what part of the 50% are you going to be in?  

Open Letter from 2039

Dear Out-of-Home (OOH) Entertainment Industry, 

I’m writing this letter from the future with the hope that more than a few of you will do your part to minimize or even alter the future devastation of the OOH Entertainment Industry. 

What actually happened? Well, the number of OOH Entertainment Centers shrunk by over 50% in less than 20 years and the number of Movie Theaters declined by over 70%.  

Cineworld, owner of Regal Cinemas, has just emerged from bankruptcy and has so far closed 51 of its theaters just in the United States. 

AMC Theaters has been hanging on by a thread and it’s likely that they will need to file for bankruptcy at some point in the future. On a positive note, AMC posted a small profit in their last two quarters but the real threat to their stock (and not necessarily their business) is the amount of debt they are carrying. 

AMC has also been closing their underperforming theaters, but probably not fast enough. Bankruptcy would help them get out of a lot more leases and the debt could be restructured or even better converted to equity but this would wipe out the current stockholders. 

Many more theaters are likely to close. In addition, theaters are shrinking the number of screens within their existing buildings, which is likely to accelerate. This freed up space is being converted to other forms of out-of-home entertainment as well as more upscale fast casual Food & Bar offerings.

Will the number of screens shrink by 70%? The possibility that this could happen is higher than we might think – especially if the entertainment options that are added prove to be more profitable. 

I’ll start first by identifying a few of the core issues that accelerated the dramatic decline in the number of OOH Entertainment Centers and towards the middle and end of this article I’ll describe in more detail why 70% of all Movie Theaters closed.   

In 2019, opening big box OOH Entertainment Centers was the main focus of our industry. Almost everyone was spending the majority of their time and money on creating bigger centers with more attractions, upgraded food and beverage, which made it more complicated and costly to operate.  

Many operators spent a lot on the look and size of their centers, but not enough on creating truly remarkable 10x Attraction and Social Experiences – the kind of experiences that actually attracted large numbers of guests to their centers and not just one or two times per year but two or more times per month. 

I believed the Social part was an important factor, but I didn’t really understand what that was going to look like or how critical it was going to be to our industry’s survival. 

Coming out of Covid, we started working on our first Social Gaming experience, which was Axe Throwing. Once we installed our first (8) Axe Throwing lanes in our Rochester entertainment venue, we immediately saw how the Gaming part dramatically improved our guests’ ability to socialize and bond with their friends, family, and coworkers. 

It was very obvious that Social Gaming with integrated seating, tables, plus food and beverage along with other guest services was going to be the most important Key to making our out-of-home entertainment venues much stronger and far more resilient to the relentless pull of simply staying home to enjoy ALL the addictively designed forms of in-home entertainment!

By the way, we did (8) lanes of Axe Throwing out of the gate – Why? Because, you either go big or go home. Starting with less than eight Axe Throwing lanes means you’re leaving the ships in the harbor instead of burning them!

Important note: After completing our 6,500 square foot remodel, we added (8) more Axe lanes for a total of (16) in our Rochester venue. Is that too many? Maybe, but our goal is to own Axe Throwing in Rochester, New York. With (16) lanes, we can attract much larger adult groups and we can even serve multiple small, medium, and large groups at the same time. We can provide far more value to our guests than our competitors can offer theirs. The goal isn’t to get along with other axe throwing venues – it’s to OWN the Axe Throwing opportunity in Rochester and Buffalo, New York and the same goes for our newest Krazy Darts Social Gaming experience.  

Before I continue, let’s define what a ‘10x Out-of-Home Only Attraction and Social Experience’ actually is.  

Definition of 10x Out-of-Home (OOH) Only Attraction and Social Experience

A 10x OOH Only Attraction and Social Experience is 100% over the top. All by itself, a 10x OOH Experience attracts thousands of people per month. It can ONLY be experienced out of the home and is dramatically different and better than anything else that can be done in our city or town.  

A 10x OOH Only Attraction and Social Experience includes additional tools that help to significantly elevate each guest’s experience by creating a truly unique, highly positive, and unforgettable impression. The overall experience is so exceptional that a high percentage of our guests become obsessed with repeating the experience several times per month.  

Tools are created and integrated to enable our guests to easily schedule return visits before leaving our OOH entertainment centers. These tools enable our guests to promote and bring back friends and family to play and participate in our 10x OOH Only Attraction and Social experiences frequently.  

Developing a truly unique 10x OOH Only Attraction and Social Experience is all about creating a holistic environment that facilitates multiple opportunities for humans to interact with friends, family, guests, and even fans of the attraction experience and the players who play it.  

It’s important to note that there is a difference between an Attraction (i.e. Go-karts, Laser Tag, Mini-Golf, Bumper Cars, other Rides, etc.) and a Social Gaming experience. An attraction is certainly something our guests can do with other people, but it’s really NOT the same thing as reserving a Social Gaming experience where you can hangout with your friends, family, and coworkers in the same space while taking turns playing fun games while eating, drinking, socializing, and bonding. 

The goal is to create a healthy, social, and ongoing obsession with our OOH Only Attractions and Integrated Social Experiences which doesn’t end when our guests leave our OOH entertainment centers.

If more than a few of us had relentlessly focused on creating the above type of OOH Only Attractions and Social Experiences, the OOH Industry Apocalypse would have never happened. 

What I definitely got wrong is that I placed too much emphasis on the Attraction part and not enough on the Social part. BUT, that’s not exactly right either. The reality is that both the Social and the Attraction/Social Gaming part are very important, but they need to be combined in the best ways possible. Plus, it needs to be done a little bit differently for each type of Attraction or Social Gaming experience. 

It’s the integration of our Attractions, Social Gaming experiences, and other services like food and drinks that is critical to enabling our guests to socialize and bond at a much higher level with their friends, family and coworkers away from home and away from work. 

When I wrote this article prior to IAAPA in 2019, I had no freaking idea that the Social part was going to be as important as it IS to the survival of our out-of-home entertainment industry.

Less Than 2 Visits

In 2019, the industry average for guest visits to an entertainment center was less than 2 visits per year, which equaled approximately 5 hours per guest for the year. For comparison – Fortnite (a single video game) was released in September 2017 and by 2019 the game had 250 million active players and the average player was playing the game for 7 hours per week.

To put this in perspective, the average Fortnite player spent 365 hours per year playing Fortnite compared to the average time spent per guest of just 5 hours per year visiting one of our OOH entertainment venues.  

The core demographic of Fortnite players were males between the ages of 8 and 28 years old (females made up over 27% of players). This demographic, both male and female, were an important part of our target market back in 2019, but Fortnite and many other video games (plus Netflix, Amazon Prime, YouTube, Disney+, Apple TV) were winning the lion’s share of their attention and keeping them from even thinking about visiting our centers.  

Our OOH Only Attraction Experiences just weren’t good enough to get these players out of their gaming chairs or off the couch and into our OOH centers. This is where we should all get very sad and massively depressed by the mediocrity of what we were offering back in 2019… Okay that’s all we get – just three dot, dot, dots… Now – what the heck should we have done about it back in 2019???  

A key factor was that most operators spent zero time figuring out how they could work with manufacturers and suppliers to create truly unique 10x OOH Only Attraction and Social Experiences for their centers.  

Our industry overall just didn’t do enough to create attractions with integrated social experiences that dramatically increased the amount of time our guests spent playing our attractions and socializing in our centers with their friends and family. In addition, virtually no resources were spent on developing the tools required to significantly increase the frequency of guest visits to our centers.  

A big part of the problem was that operators were often more concerned with the price of a new attraction than the addictive and/or habit forming capabilities of a unique and dramatically better high-end attraction experience. 

Missed Opportunity: The focus should have been on creating and operating the very best 10x OOH Only Attractions with integrated Social Experiences – especially ones designed to attract dramatically more guests – and most importantly – ones that would get them back every month or even weekly instead of just one or two times per year.

Again, the big miss for me was not knowing how big a deal Social Gaming was going to be in 2023 and far into the future. Social Gaming is literally THE BIG THING that is going to enable our industry to more competitively compete with in-home and mobile entertainment. 

The number one reason Social Gaming is so important is because it’s the campfire that enables humans to gather together. Playing, socializing, and sitting together with other human beings is the one thing that MOST humans crave. Since Covid, far too many humans have gotten comfortable with just staying at home (by the way, the “campfire” idea is something I learned from Randy White – it’s something I think about frequently).  

There is literally an epidemic of loneliness happening and Social Gaming “when done right” can significantly reduce that feeling of loneliness by providing our guests with truly fun and engaging Social Gaming experiences. Experiences that make it easy and fun for friends, family, and coworkers to gather together to socialize out of the home or away from work. 

Social Gaming is a critical bridge that enables humans to more easily socialize through play and to ultimately bond with their fellow humans.

The reality was that most operators thought simple/average/mediocre attractions were better than investing in bigger, better, and more complicated attractions to operate – even if the bigger, better, and more complicated attractions would attract many more guests, more frequently, and generate significantly more revenue.  

It’s worth repeating a second time – what many operators didn’t realize was that the bigger, better, and more complicated attractions actually did something that the simple, average, and mediocre attractions could no longer do, which was to ATTRACT thousands of guests per month to their entertainment centers ‘on a regular basis’ to experience their 10x OOH Only Attractions.  

In 2019 and the early 2020s, simple/average/mediocre attractions with zero or very little integration of social elements were the norm. It’s not that these attractions didn’t get used or that they weren’t fun – they did get used and they were fun, but not fun enough. They were no longer attractions that actually attracted people – the attraction was the big box with a lot of stuff inside.  

Why is Jim (so far) only blaming the operators from 20 years ago?  

First, I was an operator back then as well. Our two entertainment centers had to deal with the same issues of too many OOH competitors. In addition, I did try to bring these issues up in 2019. I actually wrote an article about the “Bloody Red Ocean” and a few other articles that followed.  

The truth is that everyone should be tossed under the bus – including me. An Apocalyptic Industry Event means everyone in the industry is at least partly responsible. I truly wish it never happened, but it did. It’s not like we can go back to 2019 and actually do something about it and maybe even avoid the OOH Entertainment Industry Apocalypse in the first place. 

Anyways, if I could go back in time and publish this article on LinkedIn in the fall of 2019, I would. 

Who knows – maybe it would have started the serious conversations we needed to have about the future of OOH entertainment. Especially, HOW we needed to dramatically improve the quality of our OOH Only Attraction and Social experiences before it was too late (By the way, I’m still hoping that a few more than 1 out of 100 people in our industry reads this entire article). 

Cheap Mediocre Attractions 

Now back to blaming everyone…

The manufacturers and suppliers (including me) deserved a huge part of the blame for the Out-of-Home (OOH) Industry Apocalypse.  

Why? Because we (manufacturers and suppliers) spent most of our time and resources on creating smaller, simpler, cheaper, average, mediocre, boring, and similar attractions, because we knew our attractions would be much easier to sell and operate.  

The manufacturers and suppliers didn’t do the hard work of finding, convincing, and partnering with at least a few of the best Entertainment center operators to build truly unique 10x out-of-home Only Attractions with integrated Social Experiences.  

We ALL basically put our entire industry in a horrible catch-22 that made the Apocalypse a lot worse than it might have been. Operators didn’t want to spend more money than they had to on new attractions or to dramatically improve old ones and manufacturers/suppliers didn’t want to lose a sale – so almost everyone focused on lower price, which equals more average, mediocre, smaller, and boring, instead of building the very best out-of-home Only Attraction and Social Experiences possible. 

Ultimately, the focus should have been on creating truly amazing Out-of-Home Only Attractions with integrated Social Experiences that would have attracted a lot more people into our centers more frequently.  

For my part, I obviously didn’t scream loud enough back in 2019 and the early 2020s. Maybe I can find a Tardis and go back and do a better job or write a really freaking long article that almost nobody would read. (By the way, if you are the 1 out of 100 and you have the desire and ability to build a 10x OOH Only Attraction with integrated Social Experiences, please give me a call on my cell (716) 830-5086 or email me at jkessler@lasertron.us, because I would really like the opportunity to have a conversation about what is possible).  

As many of you know, we have been working diligently on creating, developing, and upgrading our Social Gaming experiences. 

Our first Social Gaming experience was our high-end version of Axe Throwing with laser projected targets that are about 3x larger than all the alternatives. 

We were late to the game for Axe Throwing and had some catching up to do. Most importantly, we continue to develop more games as well as improving the ones we already have. In fact, we are in the middle of developing a major software and hardware upgrade for our Axe Throwing experience that will be available in mid 2024. 

Going forward, Axe Throwing will continue to be one of our core Social Gaming experiences for our existing and future company owned venues. It’s not an easy attraction to operate for most operators and that’s one of the many reasons we like it. We are developing another Krazy Social Gaming experience that will have similar operating issues as Axe Throwing. It should be operational in our Rochester venue by the Fall of 2024. 

Our newest Social Gaming experience, which is called Krazy Darts, is a truly unique 10x Social Gaming experience. All you need to do is see it and play it and you will understand why.

The Death Star

(In-home and Mobile Entertainment)

For every Apocalypse, there is an evil and sinister Death Star and for retail – it was Amazon.  

For the OOH Entertainment Industry, it wasn’t just one company or Death Star, it was an entire industry. To be specific, the Death Star was the In-home and Mobile Entertainment Industry that dramatically accelerated the demise of over 50% of the our-of-home entertainment centers and over 70% of Movie Theaters. 

Starting in the early 2010s, the In-home and Mobile Entertainment Industry was investing tens of billions of dollars every single year to improve their offerings as well as building multiple direct to consumer entertainment platforms. Their biggest advantage was that once they created their digital entertainment content, it was basically free to replicate or stream. 

Since the In-home and Mobile Entertainment companies’ products and services were digital, the more customers they signed up for their monthly subscriptions the greater their return on invested capital. As more customers signed up for their monthly subscriptions, the more they reinvested in creating new and better entertainment content – so they could provide their customers with even more value. 

When Disney+ introduced its monthly streaming service in late 2019 they only charged $7 for 30-days of entertainment. Back then, if their customers only watched Disney+ for one hour per day, that worked out to only 23 cents per hour of entertainment. Streaming gaming platforms were even less expensive and some were even free.  

Obviously the out-of-home ‘Brick and Mortar’ entertainment industry couldn’t survive if it charged less than 25 cents per hour for entertainment. In order to survive, the out-of-home entertainment industry needed to create truly 10x out-of-home ONLY attraction and social experiences. Unfortunately, entertainment operators were mostly providing their guests with simple/average/mediocre attractions that were similar to what everyone else was offering.

Movie Theaters had even Bigger Problems  

A Movie Theater’s main attraction was movies and all the movies/content they featured were owned by the movie studios and movies were 100% digital. Movie Theater operators had to give up a significant portion of their ticket revenue to the Movie Studios who created and owned the content. However, the flip side of this arrangement meant that the Movie Studios had to give up a significant portion of the revenue (from the movies they created and owned) to the Movie Theaters.  

With the creation of their own digital streaming platforms, why would Movie Studios continue to give up 50% of the revenue for their best content when they could keep 100%?   

Well the Movie Studios eventually didn’t – and very quickly the Movie Studios and other content creators started to put their very best content on their own streaming platforms, which accelerated the number of people subscribing to their streaming service.     

The shift to using streaming platforms to deliver the best entertainment content made it almost impossible for Movie Theater operators to compete. Especially if a person already subscribed to one of the content creator’s streaming services. Subscribers to a streaming service like Netflix or Disney+ could watch a blockbuster first run movie or a movie quality TV series for basically zero additional cost.

In 2019, both Disney and Apple started spending between $15 to $25 million per episode for their new streaming TV series. A new Marvel TV series from Disney cost $25 million per episode far exceeding what was previously the most costly series, which was Game of Thrones at $15 million per episode. In 2019, Netflix, just one company, spent $15 Billion on creating new entertainment content. 

In 2023 Netflix is going to spend an estimated $17 billion. Netflix is now making a hefty profit while other streaming services including Disney are losing money, but are still working hard to catch up. For the year ending 2023, Netflix is expected to once again have its best year ever with a gross profit of $13 billion.

To reiterate, the biggest reason the in-home and mobile entertainment industries offerings were so affordable was because their entertainment was digital and easily viewable on already purchased TV screens, computer monitors, laptops, mobile viewing devices (tablets, cell phones, VR headsets, etc). 

By the way, all the above was also happening for the In-home and Mobile Video Gaming Industry (i.e. digital content being delivered over streaming platforms).

And it gets worse… Zero Free Time

By late 2019, human beings in the United States and most developed countries reached peak saturation of their available free time for all forms of entertainment. This was the turning point when the battle was no longer about filling a human’s free time with entertainment, because their free time was already full. Instead, it was ALL about stealing a person’s attention away from other entertainment providers – including out-of-home entertainment centers.

Even back in 2019, the in-home and mobile entertainment threat was almost completely ignored by all of us in the out-of-home Entertainment Industry. Why? Because we were too focused on what was going on inside our own industry to recognize the bigger existential threat.  

Many assumed the solution to too much out-of-home competition was building bigger centers with more stuff. However, the solution or focus should have been on building 10x out-of-home Only Attractions and integrated Social Experiences that could only be experienced out of the home and in a ‘real world’ environment. 10x out-of-home Only Attraction experiences also had to be highly ‘human-focused.’ In other words, the goal was to bring humans together to play and socialize before, during, and after their attraction experiences.  

Unfortunately, most out-of-home entertainment operators just focused on expanding the size of their centers and reconfiguring them so they could add more mediocre attractions, games, and services. This made their businesses exponentially more complicated and expensive to operate – so they worked hard to simplify the overall operation of their centers as well as their attraction experiences.  

The goal was to make everything easier to operate and manage. Unfortunately, this had an inverse effect on the enjoyment and quality of their attraction experiences. The simpler the operation of their attractions the more boring they were for the participants. The same was often true for other guest experiences.  

As many continued to add more attractions while looking for additional ways to simplify the complexity of their big box centers, something that wasn’t very noticeable started to happen. The overall revenue per square foot for their attractions started to decline.  

The decline in attraction revenue was an early warning sign that mediocre attractions had little to no ability to get people to leave their homes. Unfortunately, the mediocre attraction problem was never identified as an issue that needed to be fixed.  

Complexity often hides The Things We Need to Notice

In fact, too many big box operators didn’t believe the quality of their attractions mattered as long as they were comparable to what other centers were offering. They believed having more stuff was the key to their success along with providing a more complicated sit down dining experience which was also much more labor intensive.  

By the way, sit-down dining with a hostess and table service is probably the worst idea ever for an out-of-home entertainment venue – especially since Social Gaming requires a very different style of food and beverage service. Fast casual food and beverage service is really the only way to go. 

The continuation of skyrocketing labor costs, which was accelerated by Covid, is or should be the final nail in the coffin for restaurant style food & beverage service for out-of-home entertainment venues. 

Most sit-down dining spaces will be converted to Social Gaming spaces with bar height seating along with integrated fast casual eating and drinking service. If done right, these spaces will become much more profitable and actually sell more Food & Beverage than before the conversion. 

Unfortunately, many of their out-of-home competitors were doing the same exact thing.  These similar competitive efforts only succeeded in increasing the complexity and costs of operating their centers, which put even more pressure on them to figure out ways to simplify their operation even more. 

Early on, out-of-home entertainment center operators continued to assume they were on the right track, because as they built bigger centers and added more attractions their overall revenues went up and their arcade revenues often went up even faster – at least for a while. 

Back in 2019, the arcade was often the most profitable part of the business. Since the arcade often generated the most profit, operators focused more of their time on the arcade and even less on their attractions. The arcade got bigger and the space allocated to individual attractions often got smaller as they opened new centers or remodeled existing ones. Unfortunately, almost every new type of entertainment center that opened between 2015 and the early 2020s (i.e. bowling, movie theater, trampoline park, FEC, etc) added an arcade to their entertainment mix. The rapid increase in the number of arcades during this time period led to significant oversaturation and the profitability of the arcade dropped dramatically in just a few short years.

During this same time period (2015 thru early 2020s), the quality and quantity of in-home entertainment experiences, which were 99% digital, continued to increase rapidly. 

The Perfect Storm

In-home and mobile entertainment was getting better fast and the quantity of content was increasing rapidly while the cost to their customers was often going down. In fact, many companies were offering monthly subscriptions for under $7/month for unlimited content 24/7.  

This all started with Netflix and expanded to Amazon, Hulu, YouTube, Facebook, Disney+, Apple TV+, HBO Max, CBS All Access, BET+, Peacock and many others who entered the market around 2019 and 2020. It got so crazy that even a few large Movie Theater chains started their own streaming movie services. 

In addition, the In-home and Mobile Game Industry started offering their video games as a monthly subscription. In fact, Sony cut its streaming gaming platform in 2019 from $19.99 to $9.99 to compete with other companies offering even lower monthly subscriptions. And then FREE became a BIG Thing with the introduction of games like Fortnite and others, which were FREE to download and play!!!

Important note AGAIN

Humans no longer had any more FREE TIME – so every competitor was trying to steal time from each other including out-of-home entertainment. And out-of-home entertainment was already only getting a tiny fraction of a human’s free time to begin with.  

All of these rapidly increasing in-home and mobile entertainment options stole time away from out-of-home entertainment options. In-home and mobile focused entertainment companies continued to grow rapidly as they invested tens of billions per year to create more and more entertainment content and games that were 100% digital and virtually free to replicate and these games could be experienced in the home or on any portable device anytime and anywhere 24/7.  

Important facts: Netflix’s total revenue in 2019 was almost $20 billion compared to only $11 billion for the entire domestic Movie Theater industry. Approximately 50% or $10 billion of Netflix’s revenue was generated in the USA. The domestic movie theater industry was started over 100 years earlier in 1902. Netflix started its streaming service in 2007. By the end of 2020 (just 13 years), Netflix generated more revenue in the USA than all the domestic Movie Theaters combined! 

Netflix’s revenue continues to grow in the United States and globally. In 2023, it’s estimated that Netflix’s revenue will exceed $33 billion and approximately 44% of that revenue comes from the United States and Canada or $14.5 billion. 

Domestic Movie Theater revenue is estimated to reach $9.4 billion in 2023, but that’s far less than its peak year in 2002, which was $16.6 billion adjusted for inflation. That’s a 43% decline from the peak year. 

Covid hurt the movie theater industry badly, but the reality is that it simply accelerated the movement of more entertainment dollars being spent on direct to consumer streaming of movies as well as new TV series that are movie quality and far more addictive to watch. 

If you look at most of the movies being released on Netflix, Amazon, Disney+, HBO/Max, and others, we are seeing the same movie stars that used to be exclusively on the big screen. Talent will always go where the money is and the vast majority of the money is going to continue to flow into these entertainment streaming platforms.

By the way, if you operate an out-of-home entertainment venue, streaming is also sucking entertainment dollars away from your venue. For every dollar of entertainment revenue that streaming services and mobile entertainment companies pull into their coffers, those are dollars we are NOT going to get either. In fact, streaming is taking dollars away from all forms of out-of-home entertainment including restaurants. 

In addition, what happens when 50% of all the movie theaters that survive decide to convert 30% to 50% of the screen space to attractions and social gaming experiences as well as add arcades, in addition, to better fast casual food along with full bars??? Just to clarify, this is already happening. We are all competing for the same dollars with mostly the same forms of entertainment. The Bloody Red Ocean is just going to get Bloodier!?! 

 REAL vs Digital Experiences 

I often wonder if the out-of-home Entertainment Apocalypse would have been a lot less horrific or even mostly avoidable – especially if the out-of-home operators spent as much time and money creating unique and dramatically better out-of-home only Attraction and Social Experiences as they did on building bigger centers, adding more mediocre attractions, and expanding the size of their arcades. 

Of course, the manufacturers and suppliers of attractions would have needed to do their part as well, which is to create truly 10x out-of-home Only Attractions with integrated Social Experiences that the best operators could have purchased and operated in their centers. 

Again, what I DID NOT see in 2019 was that Social Gaming was going to become such a big deal. 

Right now in 2023, we are at the very beginning of a Social Gaming renaissance. Why did I use the word “renaissance” instead of the NEXT BIG THING? Well, because Social Gaming isn’t new. In fact, bowling is a great example of a Social Gaming experience and it’s been around for a very long time.

And during Covid, as certain states (NOT New York!!!) started to let businesses reopen, many Bowling entertainment centers took off and generated strong revenue and a significant number of those centers even outperformed their 2019 numbers. WHY? Most operators would probably agree that people just wanted to get the hell out of their homes. They wanted to socialize with their friends and family and reserving a bowling lane or two was a great way to go.

It’s important to note that the Bowling Industry has improved the bowling experience in many ways especially over the last 20 years. They added automatic scoring, bumpers, better seating, LED lighting effects, new games, etc. Bowling operators have also improved the look and feel of their venues as well as their food and beverage and overall service.  

There are other out-of-home Social Gaming experiences, but most haven’t significantly improved until recently. We are now seeing upscale Dart and Shuffleboard venues as well as upscale Axe Throwing and Table Tennis venues. They are basically doing the same thing many Bowling venues have already done, which is creating a high-end boutique style Social Gaming experience.

Arcade Apocalypse

As I mentioned earlier, far too many arcades opened between 2017 and the early 2020s. The significant increase in competition was not good for arcade operators, but the bigger problem was that video games weren’t the only thing that could be digitized and used by players in their homes or on their mobile devices. 

In the year 2021, the arcade redemption experience was digitally replicated and turned into a multi-billion-dollar online gaming business. This new online gaming and redemption experience was able to operate at very low cost, which allowed players to play digital redemption games at an extremely low cost at home or anywhere using their mobile devices.  

The first online redemption gaming platform started as a subscription for just $4.99/month and was free for the most basic option with ads. As the playing of online redemption games took off, Amazon and others entered the market with their own redemption game services. Amazon provided it as another FREE perk for their Amazon Prime members.

At this point, I’m not sure I got this right or wrong. Stuff is happening, but it’s just too early to call.

With the above being said, Amazon has entered the gaming industry in a pretty small way. They do offer lots of free games that you can play or download if you are a Prime member. Long-term Amazon may get more involved with gaming, but this hasn’t happened yet. 

Netflix has gotten into the video gaming industry and continues to grow their offerings. Netflix has stated publicly that they believe in-home and mobile gaming is a bigger threat to their success than Disney or the other streaming companies they are competing with. 

Again, it’s all about FREE time and humans don’t have any left. If we want to attract more humans to our out-of-home entertainment venues, we have to figure out how to steal their attention as well as their free time. The only way we successfully get humans out of their caves is by providing them with something they CRAVE, which is their need to Socialize and Bond with their fellow tribe, family, company, etc.  

Other online redemption companies used advertising to enable players to play for prizes for free. Since online and mobile redemption games were digital, it enabled game designers to create one game and stream it for almost no cost to millions and in some cases billions of players.  

Many online prize stores in 2039 offer over 100 million items for players to choose from when cashing in their tickets or points. Fulfillment of prizes is done using Amazon’s and Alibaba’s infrastructures as the backend for the global redemption prize store association, which is now controlled by the big 8 Redemption Game providers (Sony, Nintendo, Amazon, Google, Alibaba, Apple, Facebook, and Microsoft). 

(While the above was a prediction or guess, it is important to note that a little research revealed that several patents have already been filed to create something similar) 

Below is a link to Skillz, one of many online gaming platforms. This has been happening for a while now and will continue to grow rapidly because it’s all online, digital, mobile, and 24/7. Bowlero actually has a game on Skillz you can play. 

https://www.skillz.com/players/

Ok, back to 2019…

As many operators spent more and more of their resources on trying to improve their arcades, they failed to see their 10x opportunity, which was to build truly exceptional out-of-home only Attractions with integrated Social Experiences.

Most arcades were successful because there were several other attractions and/or experiences that attracted people to the out-of-home entertainment centers. The arcade was important in 2019 and it’s still important in 2039, but the type of games have evolved significantly.

In 2039, the arcade games that are successful are the ones that are very hands-on, highly interactive, fun, multiplayer, and highly social. ICE, BayTek, and others, did an amazing job rejuvenating the arcade over many years after the 1980s out of home video game bust. And from 2020 and beyond, they had to dig deeper into their creative tool boxes, because going forward Redemption Games needed to be truly amazing out-of-home only experiences.  

Note: Overall, redemption games have gotten very BIG (i.e. they take up a lot of floor space)! And, the cost to buy them has gone up dramatically as well. The increase in cost per game was accelerated by the games getting bigger as well as all the supply chain issues that were caused by Covid. These higher prices for games are not going to reverse course. Unfortunately, it is what it is. 

The VR Trojan Horse

Many thought VR was going to be the next big thing – maybe even the savior of OOH entertainment. But it wasn’t either of those things. 

The billion dollar plus direct to consumer companies who helped create VR headsets (i.e. HTC, Nintendo, Sony, Samsung, Oculus (Facebook), and others) and the direct to consumer video game developers who stood to gain the most from creating digital VR content had a big problem. Sales of direct to consumer VR headsets didn’t take off like they expected in 2017. 

In fact, VR headset sales were extremely disappointing. The in-home and mobile gaming industry had both a marketing problem and a lack of interest problem – so these companies had to figure out how to jump-start VR headset sales while simultaneously creating more and better digital VR gaming content.

So what happened? These big direct to consumer companies allowed the growth and the promotion of VR to happen everywhere and anywhere so VR could be experienced by their future consumers. The goal was to allow others to help jump start the VR opportunity by exposing more people to VR. 

More than a few out-of-home entertainment manufacturers, distributors, and operators raised their hands and said, “Hey Billion Dollar In-home and Mobile Entertainment providers, we will do some of the heavy lifting and promote your VR technology if we can make a little money operating your technology and content in our out of the home venues.”  

These billion dollar companies, who stood to gain the most from VR’s success, said, “Go for it!” They even provided one-sided licenses to OOH distributors and operators, which gave them limited use of their hardware and gaming content. Unfortunately, the OOH distributors and operators did not control or own the technology or the ultimate upside that they were helping to create. 

This VR Trojan Horse ultimately distracted many out-of-home operators from focusing their resources on developing and owning 10x out-of-home only Attractions with fully integrated Social Experiences that could only be experienced ‘Out of the Home’ and in their centers.  

What many out-of-home operators didn’t realize or weren’t concerned about in the short-term, was that the VR technology was not the end product – it was just another viewing device. What did matter most was the content and the content was digital (i.e. virtually free to replicate once the content was created). 

Significant profits from VR did eventually roll in, but almost all of the profits came from customers purchasing their own In-home and Mobile VR viewing devices as well as VR games and experiences. Once tens of millions of customers started buying their own VR gear, VR hardware got cheap really fast. As in-home and mobile VR demand began to grow dramatically, content creators started developing and releasing more and more VR content. 

Below is one of many branded VR game announcements by Sony and others back in late 2019 and 2020.

Iron Man VR will hit stores on February 28, 2020. Two versions are available: the standard edition, which costs $39.99, and a deluxe edition. The deluxe version retails for $49.99 and comes with a few bonus features, including four extra suits. Players can also obtain 12 Research Points (which can be used to craft upgrades), a digital deluxe soundtrack, and an exclusive PS4 theme. Anyone who pre-orders the game will receive four more alternate outfits and a different theme.

Eventually, new customers who signed up for long-term streaming subscriptions could get their new VR gear rolled into a monthly subscription plan.

To summarize, OOH entertainment centers had a brief opportunity to promote VR in their OOH centers, but the window was pretty short once the direct to consumer market took off, which started to happen by the end of 2019.   

The VR Story is not a new one: The same thing happened to operators who owned video arcades back in the early 80s. They made lots of money for a few short years. At least until, the hardware and content providers decided to maximize their opportunity by selling hardware and digital video games directly to hundreds of millions and eventually billions of consumers.  

The difference with the VR opportunity was that the in-home market opportunity was happening at the exact same time and the content was already just as good or even better for the in-home consumer. There would only be one winner and it wasn’t going to be OOH entertainment centers.  

Far too many operators got stuck with VR hardware and content that was not as good as what consumers could experience in their homes or even on their mobile VR devices. Even in the early 2020s, VR content could be experienced for less than 25 cents per hour of playing time or even FREE if a customer already subscribed to a streaming gaming platform that also had VR games.  

In fact, even in 2019 most VR games and experiences could be purchased for between $19 to $39 dollars. Once purchased every minute played reduced the cost per minute of fun. If a VR game was purchased for $39 dollars and played for 1.5 hours per week, which is low for a popular game, the cost would be less than 50 cents per hour or less than 1 cent per minute of game play. In 2019, OOH VR experiences were charging $1 dollar per minute or 100x more. 

Eventually there were VR content providers offering VR games for free. They made their money on secondary or add-on purchases within the game – similar to how Fortnite made their billions back in 2019 and the early 2020s. 

Distractions like VR continued to keep many operators from focusing on the things that mattered most to their guests, which were truly unique OOH Attractions with integrated Social Experiences.  

Ultimately, the most successful operators were those who focused their resources on working with manufacturers and suppliers who could provide them with Unique, Turnkey, and Proprietary 10x OOH ONLY Attractions with integrated Social Experiences that included Radius Protections that covered the entire attraction. Not only did these operators survive the OOH entertainment apocalypse, many thrived for the long-term and still exist in 2039.  

In fact, many of these operators continuously improved their Out-of-Home (OOH) ONLY Attractions and Social Experiences and by 2039 their experiences would be considered 20x compared to what they offered in the early 2020s.

What is actually happening with VR? 

Other than the arcade VR experiences like the Virtual Rabbids Ride, there have been very few VR successes. In fact, VR simulator rides are simply replacing a big monitor with individual VR goggles. 

The reality is that most VR concepts have failed to generate strong ongoing revenue in the majority of entertainment venues that have given it a try. There’s a ton of VR equipment out there that can be purchased for pennies on the dollar. VR systems that have earned well are typically in high traffic tourist areas or in very high traffic entertainment venues. 

One thing that has been surprising is how slowly VR has grown in the home and much slower than many expected. Most console gaming companies are now saying VR is just a niche market for in-home entertainment. This actually makes a lot of sense, because gamers are already deeply immersed into the games they currently play. There’s literally no need or desire to wear a headset or have it on our heads for hours at a time. 

Important note: The number of VR games available for in-home gaming and entertainment is already far exceeding the number of titles available for out-of-home gaming and this gap is going to continue to expand.

The reality is that we aren’t going to see VR adopted in any big way out of the home. VR will simply be a niche viewing device in a giant universe of in-home and mobile gaming. 

For decades, we have heard the same chant over and over “This time VR is going to be a BIG HIT and we are all going to be able to play in a Real (fake) World with our friends and family.” 

I 100% agree that VR is going to get better and it will continue to get better, but it’s still going to be second best by A LOT to REAL experiences with REAL HUMAN BEINGS gathered together Face To Face, Socializing, and Playing Together! 

From a humanity standpoint, VR is like Kryptonite to building real human relationships and it should also be thought of as Kryptonite to the health of our out-of-home entertainment industry. It’s just 100% STUPID to be using this type of anti-social technology in our out-of-home entertainment venues! If and when VR finally gets popular, it’s going to be mainly used in the home, which it already is, by the same humans who have lost their ability to socialize. Any operator who uses VR in their out-of-home entertainment venues will only get the scraps that are left over just like out-of-home arcades get the scraps from the best video games! 

Quick Deep Dive: Why REAL Human Experiences – REALLY Matter 

Sometimes the ‘HOW’ to be successful operating an out-of-home entertainment business is literally staring right back at us – especially when we are standing in front of a full length mirror.   

Technology can be a great enhancer to a Human Interactive Experience, but it’s never better than the opportunity to provide our guests with REAL Human Focused Attraction Experiences with integrated tools that help maximize Human Social interaction before, during, and after the attraction experience.

Important note: Human Face to Face Social Gaming IS the 800 pound gorilla that will help our out-of-home entertainment venues to thrive far into the future! BUT, only if we make them 10x better AND different than what can be experienced in the home. 

We keep looking for the new bright and shiny (often fake) object and don’t ‘see’ what is right in front of us and is already 10x and 100% REAL!

The key is fully understanding and ‘seeing’ what is already there – we must start by utilizing all the 10x capabilities that come built into the human body, for example:

• Human legs and feet that can be used for mobility in a ‘real’ environment (i.e. especially out of the home). Humans must use their legs and feet on a regular basis to stay in good physical condition. In fact, humans who regularly use their mobility devices (human legs and feet) are able to increase and/or maintain a higher level of physical and mental wellbeing. To be specific, exercise helps to release beta-endorphins and endocannabinoids, which help to reduce both stress and anxiety. Do you know of any human beings who have issues with too much stress or anxiety? Is this article causing stress and anxiety?  
• Human eyes to visualize the attraction environment in 3D (yes – human eyes see the world in 3D plus the human eye’s viewing angle is slightly more than 180 degrees (dramatically better than VR viewing devices). In addition, our built in viewing devices don’t make us sick when we move around using our human mobility devices (i.e. legs and feet))
• Shoulders, elbows, wrists, hands, and fingers as the controllers and mechanisms used to manipulate our REAL 10x Attraction’s environment (plus our REAL Social Gaming experiences).
• Ears to hear auditory attraction announcements, listen to communication from other human beings, hear noises, and sound effects that are important to maximizing the interactions between the humans playing or participating in our 10x out-of-home Only Attraction experiences (plus our REAL Social Gaming experiences). 
• Multiplayer/Multihuman attractions (plus our REAL Social Gaming experiences) that fully engage the players/humans with each other in our out-of-home Only Attraction experiences (plus our REAL Social Gaming experiences). Teammates, competitors, spies, allies, etc. And again, human eyes that enable us to detect and accurately position and see the other human beings on the playing field. REAL socially engaging human experiences trigger chemical reactions (serotonin) in the body that helps to manifest a feeling or sense of belonging and/or a feeling of contributing to our tribe’s/team’s success. Enabling the fulfillment of these human needs helps to reduce stress and anxiety. 
• Vocal cords and ears to communicate with other human beings playing the game or even socially when the game is over and the humans are just hanging out and bonding with each other.
• Human Touch Receptors (skin, etc.) to sense or feel things in our ‘real’ out-of-home Only attraction environment (i.e. walls, obstacles, doorways, railings, sensors, devices, vibrations, etc). 
• Ability to Detect and Decipher Human Expressions and Emotional Cues using Human Eyes and Ears (i.e. smiling, frowning, surprise, anger, laughing, frustration, happiness, sadness, tone of voice, wonder, friendly face, a familiar face, stranger, body language, and more). These facial, physical, and auditory cues are easily picked up using our unobstructed eyes and ears and can be quickly translated into useful feedback using our human CPU (i.e. brain).  
• Playing or Participating in ‘REAL’ Out of Home Only attractions (plus our REAL Social Gaming experiences) is all about sharing real human experiences with other human beings. Not playing in an artificially simulated world with artificially simulated avatars.  

Many forms of digital entertainment and social networks are trying to replicate social experiences, because they know that the ‘social experience’ is the ONE THING they are NOT very good at replicating and actually CAN’T be good at. Ultimately, their attempts at fake simulated social experiences are causing as much mental and physical damage to human beings as a crack dealer on a street corner – just more slowly.  

The above is what we NEEDED to understand and focus on back in 2019 and 2020, but instead many of us just kept copying what everyone else was doing. 

Bad Advice

As out-of-home entertainment center operators saw their competitors and fellow operators add more attractions, they thought maybe they should add more too – so they asked their fellow, non-competitive operators about the attractions they had or added and what they would build if they did it again.  

The operators being asked told them to build their attractions the same way they did (not bigger or better).  

After all, why would operators tell other operators to build their attractions bigger and/or better than what they did? 

If the other operators built dramatically better attraction experiences and they generated significantly more revenue, it would make their own attractions look mediocre by comparison.

In fact, a few operators would tell anyone who would listen, that it would be better if they made their attractions smaller, less complicated, and with less capacity so their attractions would be even more mediocre than theirs.  

Many operators unknowingly listened to the “don’t build it better or bigger than my attractions” advice and created attractions that were smaller and more mediocre.

Too many out-of-home operators failed to provide their guests with even one truly unique 10x out of home Only Attraction with integrated Social Experiences. Many also failed to create food & beverage experiences that were as good as well run restaurants and bars. 

Another critical failure was not investing enough resources into developing the software, hardware, and environment that would enable entertainment operators to create unbreakable bonds with their guests as well as their friends and family.  

All the above are examples of the critical missteps that caused the out-of-home entertainment industry to decline dramatically in just 20 years.

The above is 100% true in over 95% of all entertainment venues. The Race is almost NEVER to the TOP and virtually NEVER to have attractions or social gaming experiences that are 10x Better than what currently exists – it’s almost always “can you do it smaller, cheaper, good enough, etc.”, which means mediocre is the default standard 99% of the time! 

I can’t think of a single time when a client asked me, “Hey, can you make us an attraction or social gaming experience that is dramatically better, bigger, and more fun than anything you’ve ever done before if I pay you 50 to 100% more?” It’s sad, but true. 🙁 

It’s important to point out that our Rochester venue is the best, most detailed, and most expensive LASERTRON arena we have ever built. At 9,000 square feet including the second level, it’s slightly smaller than our Buffalo LASERTRON arena (9,200 sq. ft.) which is the biggest arena we have ever built – it’s also the longest operating laser tag arena in the United States at 35 years. 

By the way, I have never told a client they should build their LASERTRON arena as big as our two LASERTRON arenas. Oh Shit! I just realized after writing that sentence that I do the same freaking thing as other operators! I actually tell operators it would be good enough if they built one even half the size as ours, but not smaller than that. The reality is this – we all fear anyone doing anything better than what we did at each of our own venues, which means the mediocrity continues.

What was the main cause of the Out-of-Home Movie Theater Apocalypse?  

To fully understand what happened to the Motion Picture Industry, we have to go back to a final court decision that was made back in 1948. Way back in the early 1920s and 1930s Movie Studios (the content creators) also owned their own Movie Theaters or had partnerships with Theaters that agreed to exclusively show their movies. This combination was broken up in an antitrust lawsuit filed by the United States government. The lawsuit was known as the Hollywood Antitrust case and was eventually settled in 1948. 

After the 1948 decision and the rise of network TV, the movie theater industry went into a severe slump for many years; however, the Movie Theater industry began to improve significantly with the introduction of blockbuster movies in the early 1970s and 80s.  

Unfortunately, movie ticket sales once again began to flatten and even decline with the introduction of cable TV, Blockbuster Video, and other video rental stores. Theater attendance started to decline even further with the introduction of streaming video platforms and all the new entertainment content being created for those same streaming services. 

Netflix was the catalyst that changed the focus of what mattered most to the content creators. When Netflix started spending $10+ billion every year to create their own unique content to show on their company owned streaming platforms, other content creators and especially the big Movie Studios started to take notice. (Netflix is spending $17 billion in 2023)

Netflix was providing their subscribers with a ton of new content that could be accessed 24/7 on any device using Netflix’s streaming platform. It was Netflix’s rapid subscriber growth that ultimately caused everything to rapidly change in less than 10 years.  

What was so ironic about this dramatic change was that the content creators were once again putting themselves back in the position of both creating and controlling how their customers would consume their content.  

Their new platform of choice was creating and controlling their own streaming platforms, which would allow them to directly deliver their content to their subscribers. By the end of 2020, the largest content creators once again owned or controlled virtually all the streaming platforms.   

By the early 2020s, movie theater chains began to experience a significantly faster decline in movie attendance. The number one reason was that they had no control or ownership of the content that was projected onto their movie screens. It’s important to note that the cost of delivering a direct to consumer movie was virtually free, while the cost to promote a theatrical out-of-home movie was extremely high – often a third of what it cost to make the actual movie. 

The content creators (i.e. Netflix, Amazon, Disney+, HBO Max, Comcast’s Peacock, Apple TV+, YouTube, CBS All Access, BET+, Hulu, and many others) realized they could generate bigger and more consistent profits by rapidly growing the number of subscribers to their streaming platforms. The quickest way to grow their subscriber base was to include all their existing content as well as their newest and best content on their company owned streaming platforms.  

Ultimately, this meant a lot less high quality content was being made available to the out-of-home movie theater industry.  

It’s important to note that the most engaging and profitable types of content being watched by consumers had also changed by 2019. In the past, Movie Studios spent huge sums of money creating truly amazing 90-minute to 120-minute movies that were shown in theaters, but as the new digital subscription streaming platforms exploded the type of content and more specifically the stories that could be told changed almost everything.   

Netflix, HBO, Hulu, Amazon, and others started providing more and more funding to content creators (writers, directors, producers, and actors) to create and produce exclusive content for their streaming platforms. As the number of subscribers increased, the capital available to create even more content increased as well. 

The new ‘Hot’ content was often high-end movie quality TV shows that lasted for multiple years providing hours and hours of content. The creators could now spend much more time developing their stories, with more elaborate plot lines, as well as fully developing the characters within their stories over many years. In fact, many key characters often didn’t appear till years later or appeared to be only minor characters who eventually grew to become one of the leading ones. In fact, even many supposedly key characters in the first season or two or five were killed off as other characters rose to be the new leading characters.   

One of the hottest in-home creations was the TV series Game of Thrones, which was produced by HBO. It was a game changer, because it proved that a blockbuster story could be created that had just as much theatrical sophistication and special effects as those produced for movie theaters. HBO spent up to $15 million per episode on Game of Thrones.  

Again, these new TV series often proved to be far more engaging than what could be created in a time limited 90-minute to 120-minute movie. These long format storytelling models enabled writers, directors, and producers to create far more detailed stories and characters. These new highly successful and binge worthy TV shows were designed to keep in-home entertainment viewers engaged for very long periods of time.  

The shift in focus of the best content providers to develop multi-year Mega Hit Movie quality TV shows was also helped by the fact that the quality of watching these experiences at home became significantly better than watching a movie in a theater.  

Even as movie theaters introduced better food options, more comfortable seating, and the ability to reserve your seat, annual movie ticket sales continued to decline and eventually at an accelerated rate.  

The main reason for the slide was that the content creators refocused a significant portion of their resources to create more and better content for their company owned streaming platforms. They all followed Netflix’s lead and rapidly released almost all of their best content (including first run movies) directly to their subscribers. This enabled their subscribers to watch their best content from the comfort of their home or mobile viewing devices.  

In 2019, Netflix spent $15 Billion (Now $17 Billion) on creating new content and was releasing approximately one original movie per week plus many more new and original TV shows and new seasons of already successful TV shows as well as many new and original comedy specials. 

The convenience and variety of eating at home also changed dramatically when in-home food delivery exploded in 2019. Companies like GrubHub, DoorDash, Uber Eats and others provided, direct to your door, food delivery of your favorite food from your favorite restaurants or fast food place.

Watching a blockbuster Movie or TV series at home offered many more conveniences that movie theaters could not match. The dramatic reduction in price for large high resolution LED TVs with much better sound quality, no crying babies, or kids kicking the back of your seat, and no strangers talking during the movie were all factors that contributed to more and more people staying home to watch their favorite entertainment content.  

In addition, the ability to pause a movie to use your own clean bathroom or to enjoy your favorite meal that just showed up at the front door, which you ordered from the comfort of your couch using your favorite delivery app – all of these benefits were just too much for the brick and mortar theaters to compete with.  

In summary, the dramatic Movie Theater decline was caused by a series of events that occurred in 2019 and 2020. The old school or traditional content providers realized streaming service providers like Netflix and Amazon were not only becoming the most dominant streaming platforms – they were also becoming the most prolific creators and producers of very high quality and very popular digital entertainment content.  

In addition, non-industry players such as Apple, Google, and others saw the opportunity that Netflix and Amazon were exploiting and jumped into the market as well.  

Traditional content providers quickly realized they were in a war for the control of their customers’ entertainment viewing eyeballs. As far as content goes, Disney was the 800-pound gorilla, but Disney recognized there were several fast growing 500-pound gorillas in their market and others were jumping in as well.

Disney knew they had to make their move and in late 2019 Disney+ went live to compete directly with Netflix, Amazon, and all the others with their own direct to consumer streaming platform. Disney+ offered their customers direct access to all their digital entertainment content 24/7 for a monthly fee of just $7 dollars. A price that actually shocked many industry observers. 

By the end of 2020, the writing was on the wall for Movie Theaters. The average ticket price in 2019 was $9.11 to watch a movie. For a family of four, that equaled $36.44 plus more for food and beverage. Contrast those costs with a consumer’s ability to watch great theatrical first run movies from Disney+ as well as new TV shows based on their ownership of Star Wars, Marvel, and all their other content 24 hours a day for just $7/month and it’s easy to see why the number of Movie Theaters declined so dramatically.  

All of this was basically foreshadowed in Robert Iger’s book ‘The Ride of a Lifetime’ published in 2019. If you can still find a digital copy, go to chapter 12 and read it for yourself. He starts the chapter off by saying, 

“It was time for Disney to start delivering our content in new and modern ways and to do so without intermediaries and on our own technology platforms.”

By 2029, movie theater ticket sales had dropped by over 70%. The content available to Movie Theaters no longer matched the quality and convenience of what in-home and mobile entertainment providers were offering and at dramatically lower prices to the consumer.  

The number one cause of the swift decline was due to the biggest and best content creators, producers, and actors moving their skills to the digital in-home and mobile entertainment market, because that’s where all the big dollars were being spent and the highest salaries were being paid. 

I know this may be a really freaking depressing article. But, it doesn’t have to be…

Avoiding the Apocalypse 

To avoid the Out of Home (OOH) apocalypse, we must focus our resources on creating and providing our guests with truly unique 10x Attractions along with fully integrated Social Experiences that can ONLY be experienced outside the home.

What did LASERTRON DO to Prevent or Minimize the OOH Entertainment Apocalypse? 

I’d like to think LASERTRON did its part to help. Way back in 2016, we became painfully aware of the dramatic changes that needed to be made. The early warning signs of too much competition were already in the markets we operated and the competition continued to intensify. It became clear that our industry was entering an all out battle for survival.  

Starting in 2016, we began to continuously evolve our LASERTRON Attraction Experience as fast as we could. In fact, we introduced what we believed was our first 10x LASERTRON Attraction experience at the IAAPA trade show in 2019.  

To achieve 10x, we realized we had to create a 100% Turnkey, Truly Unique, Branded, 10x Out-of-Home Only LASERTRON Attraction with fully integrated Social enhancers. Our 10x Attraction Experience also came with a Radius Protection for both our 100% LED Illuminated Arena and our fully integrated Game System. 

Somehow, I’m going to figure out a way to post this article in 2019. If I am successful, please give me the opportunity to show you what a 10x Attraction Experience is all about and how we can help you survive the coming Apocalypse. 

What’s next?

It’s really weird rereading this article 4 years later. We knew we had to make a big change, but we didn’t exactly know how or what. 

Whatever it was, we knew it had to be dramatically different from what was or could be done in the home. It also had to be dramatically different from what our out-of-home competitors were doing.

For many years, we knew we wanted to rebrand both of our venues. Our focus going forward was to attract a higher percentage of casual adults between the ages of 21 to 55. The goal was to make our venues truly unique with 10x entertainment experiences that were exclusive to our venues along with a high-end look and feel. The only way to achieve this was by developing more of our own proprietary entertainment experiences. Ones that could only be experienced in our venues as well as our clients’ venues. 

From a manufacturing standpoint, creating multiple proprietary 10x Attractions and Social Gaming experiences that are exclusive to a limited number of operators is not exactly the best plan if the goal is to build a large manufacturing company. Fortunately, that’s not our goal.

Manufacturers and suppliers know that the vast majority of entertainment center operators aren’t going to pay 1.5x to 2x more for a 5x or 10x better Attraction or Social Gaming experience even if it is proprietary and exclusive to their venue (i.e. their competitors down the road from them wouldn’t be able to get it). Plus every manufacturer and supplier wants to be able to sell their products and services to everyone and anyone who can afford to buy them.  

Based on this fact, manufacturers and suppliers will continue to provide operators with entertainment experiences that seem to be reasonably priced, but are also not proprietary and exclusive to their client’s entertainment venue. 

Are these other types of attractions and social gaming experiences reasonably priced? Especially when the competitor across the street, the one 3 miles down the road, or the new big corporate venue that is opening in a month has the ability to purchase the exact same stuff for their guests?  

Adults! Adults! Adults! 

Demographics in the United States have changed and they will continue to change and probably more quickly. Based on that fact, we have changed our focus to attracting mostly casual Adults between the ages of 21 to 55.

Why Casual Adults between the ages of 21 to 55?

The Birth Rate in the USA in 1960 was 3.65. In 2022 it was only 1.2. A birth rate of 1.2 is far below the rate needed to maintain our population. Due to immigration the population in the United States is still growing, but very slowly. It’s expected that the United States population will soon be shrinking even if immigration stays high.

This isn’t just a USA thing. Japanese nationals fell by 800,000 in 2022, which was the 14th straight year that Japan’s population shrank. China shrank for the first time in 2022.

Adults with NO kids or Only 1 or 2 kids is the new reality. That’s why we are 100% focused on Attracting casual Adults. 

Adult entertainment spending can be much more significant if we are able to provide them with truly unique and proprietary experiences that they want to share with their friends and family. The reality is that all these Casual Adults, between the ages of 21 to 55, just want to have fun. 

If we want to attract the highest number of Casual Adults between the ages of 21 to 55, we need to provide them with 10x proprietary Attractions and especially Social Gaming experiences that can only be experienced at our venues. 

In other words, our competitors will NOT be able to get them from another manufacturer or supplier.  

Nothing Really New

For at least the last 10+ years, our industry has been going around in circles with the same old stuff. That’s one of the main reasons we didn’t see a viable path that would enable us to compete more successfully with in-home and mobile entertainment (VR is not new – it’s been around for 30 years and it’s already in the home). 

On the other hand, we had been keeping a close eye on Axe Throwing and a few other concepts that seemed to be working, but often not working very well in many entertainment venues. 

Axe Throwing is NOT an easy Social Gaming experience to operate – especially if the goal is to operate it at a high level. 

With that said, I personally think the complexity of operating Axe Throwing is a feature and not a bug, but only if your team has the skills to consistently operate it at a high level. If not, you should NOT add Axe Throwing to your center. 

Wait, why is the complexity of Axe Throwing a feature and not a bug? It’s because the more complicated an attraction is to operate the less competition you will have in the long run.

The thing that fascinated us the most about Axe Throwing was how much the dedicated Axe Throwing venues were charging per person (i.e. $40 per person for 2 hours). Again, you need at least one dedicated and well trained Axe-pert for every 4 targets/lanes that you operate. In other words, you need to have staff members who can successfully teach your guests how to throw and stick an Axe.

As we were coming out of Covid, we decided to invest a significant amount of resources into creating our own 10x Axe Throwing experience. 

At the very beginning, we were just going to copy the best of what everyone else was doing. Fortunately, we realized we were setting the bar far too low – so we decided to shoot for 10x better. We basically ended up designing a boutique style version of Axe Throwing – just like the best bowling operators have done.

We made our (8) lanes of Axe Throwing very high-end with a very unique look, along with comfortable booth height seating and tables. We used high quality laser projectors to project targets that are up to 3 times bigger than what anyone else was doing and we added LED lights and a sound system to each lane. 

When we opened up with our first (8) lanes of Axe Throwing it was a lightbulb moment. It felt different and yet familiar – a lot like bowling. 

Axe Throwing is definitely the “type” of Social Gaming experience we were looking for. It will continue to be a key component as we transform both of our entertainment venues. 

Most importantly, Axe Throwing has helped us to attract a lot more casual adults between the ages of 21 to 55. In fact, adult birthday parties and corporate groups have increased significantly since we added it to both of our venues. 

Social Gaming really isn’t new, but for some reason there really wasn’t a name for it. As of right now, the most common descriptions are Competitive Gaming, Social Entertainment, Competitive Socializing, but our personal preference is Social Gaming. Why Social Gaming? The “Social” part is first because that IS the GOAL! The “Gaming” part is what helps to maximize or heighten the Social part. Even better, but too long, is Social Gaming, Eating, and Drinking venues. 

If you are going to IAAPA, you will be able to play our newest Social Gaming attraction – Krazy Darts. It’s still too early to tell, but we think Krazy Darts is going to perform as well as Axe Throwing and possibly better. It’s important to note that it doesn’t require ongoing supervision like Axe Throwing. It also has a much wider age range of appeal including families with kids.

We currently have 17 unique Krazy Darts games and should have 20+ by the end of the year. 

We learned a lot from creating our Axe Throwing experience. In fact, it helped us to create Krazy Darts in less than 5 months. The prototype has now been operating in our Buffalo venue for over 7 months. On September 1st, we installed and are now operating 7 production model Krazy Darts in our Rochester, New York venue. 

Proprietary Attractions and Social Gaming Experiences 

One of the things I mentioned in my article in 2019 was the need to work more closely with the best Operators. The plan was to provide the best operators with unique and proprietary Attractions and Social Gaming experiences as well as other important services. 

Well that’s exactly what we are doing today. We already notified our existing LASERTRON operators about this opportunity and now we are offering it to new operators – see below for more details.  

6 Month to 5+ Year Exclusive Radius Protections

Purchase 4 units of our new Krazy DartsTM, Axe Throwing, or two of each and receive a 6-month exclusive radius protection for up to 150,000 in population or 5 miles, whichever is reached first.

Purchase 8 units of our new Krazy DartsTM, Axe Throwing, or any combination and receive a 12-month exclusive radius protection for up to 250,000 in population or 10 miles, whichever is reached first.

Purchase 12 or more units of LASERTRON’s Social Gaming experiences and receive a 5-year exclusive radius protection for up to 500,000 in population or 15 miles, whichever is reached first. We have already provided three 5-year exclusive radius protections in the United States with more in the works. 

Radius protection extensions can occur when an Operator purchases (4) additional units of a newly released or existing Social Gaming experience prior to the expiration of their current radius protection. The owner operator can do this every year, which will enable them to maintain their Radius Protection perpetually.

Portfolio of Social Gaming Experiences 

LASERTRON is developing a portfolio of unique and proprietary Social Gaming experiences. Our first portfolio product, Axe Throwing, is now joined by Krazy Darts. 

We also have eight additional Social Gaming experiences in various stages of development. It’s anticipated that we will be introducing one new Social Gaming experience every 6 months. Our third Social Gaming experience will be installed in our Buffalo, New York venue in April and our fourth will be installed in our Rochester venue in August. 

By the way, if you did manage to read this entire article and you see me at the IAAPA show, please give me a thumbs up sign when you pass by our booth or even better stop by for a chat. 

You’re also welcome to send me an email or just give me a call.  

Thanks for reading,

Jim