Social Gaming
Good Enough vs 10x
Providing a good enough version of a new and popular Social Gaming concept can provide a good return on the dollars invested in the short-term, but it’s unlikely to produce a strong, long-term profit.
Why won’t “good enough” work for the long-term?
Once a new out-of-home Social Gaming concept becomes popular, it sooner or later gets copied by multiple operators and the market becomes saturated with good enough options.
In fact, the pressure to build it cheaper becomes the priority and so does charging a lower price to play. Too much capacity and a cheaper price to play, accelerates the downward spiral of the new Social Gaming opportunity for out-of-home entertainment operators.
Eventually, or hopefully, someone raises the bar by building a dramatically better version of the concept. This happens when an operator, a new entrant, or a manufacturer figures out one or more ways to create a premium version of the new and popular entertainment experience.
Since most operators don’t have the ability to significantly recreate a new concept, they focus on the decor and using higher-end finishes, upgrading the seating and tables, as well as offering a higher quality food and beverage experience. Each one is important, but they are just pieces of a complex puzzle. Creating the best Social Gaming experiences isn’t easy and each attempt to make it better must be tested and tweaked in the real world.
It’s important to note that making something 50% better rarely gets noticed by most people, BUT, creating something that IS truly 10X BETTER is blatantly obvious to everyone!
It’s extremely difficult to create something that achieves the level of 10x better, but if we set the bar crazy high, it changes our mindset from developing something that is better to striving to create something that’s truly remarkable. Even if we only hit 3x better, it’s going to be a significant improvement over what has already been done.
The best operators invest more for one very important reason – it enables them to provide their guests with premium experiences, which helps their venues to stand out from what everyone else is doing in their market area. In addition, they can charge a premium price or charge the same price and generate more traffic. As we all know, each of us is willing to spend more and sometimes a lot more to get a better product, service, or experience that is worth the price.
The best operators continue to reinvest, because their goal is to make sure they continue to provide their guests with the very best out-of-home entertainment experiences as well as better food and beverage and guest service.
On the flip side, operators who fail to upgrade will see their revenue decline as the best existing operators and new Social Gaming venues enter the market and continue to raise the bar.
Is Social Gaming a NEW THING?
I believe it is a NEW thing – especially when the emphasis is put squarely on the SOCIAL part.
If we focus our efforts on providing our guests with “Competitive Gaming”, we are going to hurt our ability to attract the most profitable people to our venues – the most profitable target market is CASUAL Social Gaming players who just want to have fun and socialize with their friends, family, and coworkers.
This doesn’t mean the gaming part isn’t important – it certainly IS important! But, the “Gaming” part is only important based on its ability to maximize the “Social” part.
New Social Gaming Concepts will continue to POP-UP
Since Social Gaming is a new thing, we are going to see a variety of new and different types of Social Gaming. New concepts have a habit of evolving and often faster than we would like, which means we are going to be faced with lots of opportunities and challenges.
As a manufacturer and operator of Social Gaming experiences, one of our biggest challenges is figuring out how to successfully navigate a rapidly evolving marketplace. We have to identify which Social Gaming experiences are likely to produce the best results – then we have to figure out how to make them 10x or at least 3x better than what has already been done.
To be point blank, dealing with rapidly evolving Social Gaming experiences and new types of competitors can often be PAINFUL – Like a Brick in the Face!
The brick almost always has a note tied to it that says, “Hey, what you did yesterday is good, but here’s two, three, or ten ways that are likely to make your Social Gaming experiences significantly better – oh, and by the way – a new competitor with a new type of Social Gaming experience just opened down the road – what are you going to do about it!”
It’s important to remember that our guests are only as loyal as we are at providing them with the best out-of-home experiences, as well as great food and beverage and exceptional guest service.
If our competitors provide them with new and dramatically better Social Gaming experiences along with better food and beverage and better guest service, then why wouldn’t they spend all their money at those other venues?
Even worse, people can just stay HOME and order their favorite food from their favorite restaurant and watch their favorite NEW TV series or play their favorite low cost or FREE high quality video game! And to repeat, AT HOME!
It IS What It IS
As a manufacturer and operator, we understand the game we have chosen to play and we will continue to invest the time and money required to create and recreate the BEST out-of-home only Social Gaming experiences.
We don’t expect our clients to upgrade as fast as we do, however, our ongoing efforts enable us to provide our clients with the opportunity to upgrade their Social Gaming experiences, to purchase new ones when they are ready to upgrade, or to do both when the market tells them it’s time to raise the bar.
(Below is an updated version of Krazy Darts. Yes, Krazy Darts is not even a year old and we recently made several design updates. With every update, we observe if and how those changes are working in the real world and it allows us to discover if anything needs to be tweaked or eliminated.)
What about Leagues and Tournaments!?!
The target market for Social Gaming venues is 99.9% CASUAL players. The market opportunity for gamers or “Competitive Players” is VERY very tiny and not worth the effort. Spending time and money developing leagues or tournaments is a sign we failed to understand WHO our Social Gaming and Attraction experiences are designed for (i.e casual players who just want to have fun and socialize with their friends, families, and coworkers).
Casual guests are by far the biggest market opportunity – they are the ones who will ultimately pay the vast majority of ALL our bills and enable us to make a profit.
The key question is this,
“How are we going to make our out-of-home entertainment venues more welcoming and fun for Casual Guests so they can experience the very best Social Gaming with their friends, family, coworkers, and the people who live in their communities?!?
The Social Gaming market opportunity for out-of-home Entertainment Venues, Bars, Sports Bars, and Restaurants is HUGE. However, the focus has to be 100% on providing the Best Social Gaming experiences that focus on providing casual guests with the best FUN & EASY to PLAY games that are designed to fully enhance the Socializing part.
One Social Gaming Experience Is NOT Enough
One core Social Gaming experience isn’t enough to make a Social Gaming venue successful for the long-term.
Why? Because, it’s not going to be competitive with venues that have 3, 4 or 5+ high quality social gaming experiences. A variety of great Social Gaming experiences operated at a high level will always enable a venue to attract more walk-in guests as well as book more small, medium, and large groups and the variety will attract all of them back MORE FREQUENTLY.
A venue that has just one type or only one primary Social Gaming experience will not be able to attract a wide enough audience or get the frequency of repeat visits that is needed to be successful for the long-term.
Is THAT concept really Social?
Not all gaming experiences that use the word “Social” are actually Social.
We manufacture high-end LASERTRON laser tag experiences and I wouldn’t use the word “Social” to describe laser tag. It has some social elements – like playing on a team and discussing strategy with your friends before and after the game, but it’s not a highly Social Gaming experience – especially during game play.
Virtual Reality (VR) is also NOT social. In fact, it’s far less social than laser tag. An argument could be made that VR is actually designed to be anti-social. Not being social is a problem the VR companies want to fix, because “Social Gaming” is arguably the most important trend in our industry – especially if the goal is to attract more adults and adult groups. Unfortunately, this isn’t a fixable problem for VR and you can’t just slap the word “Social” on it to make it so.
There are other “Social” entertainment concepts currently operating and expanding in the United States. Unfortunately, the style or method of game play limits their ability to maximize the social part. I’m not going to go into specifics, but I’m sure most of us can identify which ones are socially limited.
A Little Bit of This and a Little Bit of That won’t work!
If you are going to add a Social Gaming experience that can be experienced by 2 to 8 guests, it’s not going to work very well if you can’t accommodate larger groups.
The revenue that can be generated from a Social Gaming experience will be significantly limited if medium and larger groups can’t participate in the same Social Gaming experience at the same time.
If you are going to add a Social Gaming experience, it needs to be able to handle larger groups of at least 30 guests. If you don’t have the room for it or you can’t figure out how to give it enough space to do it right, then DON’T add it.
Clustered Social Gaming Experiences
Each Social Gaming experience should be clustered in pods of 4 to 8 units so larger groups can play in the same social gathering area, which enables them to share in the same experiences at the same time.
If a Social Gaming experience is designed for up to 8 guests to participate, then a cluster of 4 will enable an adult group of up to 32 guests to play and socialize in the same area. This really is an important key to the long-term success of each Social Gaming experience we choose to operate.
If a Social Gaming experience is not a strong enough attraction to consistently draw larger groups, then it’s NOT the right attraction to be operating in a Social Gaming venue.
It’s important to note that the operator has to do their part when it comes to promoting and operating a Social Gaming experience. The reality is that ANY Social Gaming experience or attraction can FAIL if it’s not operated at a high enough level.
Gathering Space = Campfire
The Gathering Space for a Social Gaming experience needs to be like a campfire. A space that enables a group to hangout in their own designated area and socialize while playing games with their friends and family.
The seating area should be optimized for 6 to 8 guests per Social Gaming experience along with tables and seating to encourage eating and drinking (maybe 8 or even 10 is better – we are still figuring this out and it probably depends on the type of Social Gaming experience). The space still needs to work for 2 to 4 guests, but the goal is to average 6 or more guests per Social Gaming experience.
99.99% of Bowling and Axe Throwing venues do not provide a good social gathering space for each individual lane. We are currently working on a VIP version of Axe Throwing, which we believe will be Krazy better for socializing with friends and family.
By the way, it’s not the size of the space occupied that matters – it’s the revenue generated per square foot. If bigger ultimately provides our guests with a better Social Gaming experience and the revenue per square foot is the same or better with the bigger footprint, then bigger is better!
Think Farming NOT Instant Success
It will often take time to grow our new Social Gaming attractions revenues – especially when we add them to an existing venue. It’s also going to take more time if we weren’t one of the first to enter the market with the new Social Gaming concept.
When we added Axe Throwing to our Rochester and Buffalo, New York venues, it took time for our Axe revenue to grow. There were already several Axe Throwing places operating in Rochester and Buffalo – so we had to basically draw people away from the existing axe throwing places as well as attract first timers to give our Axe Throwing experience a try.
In addition, when we make a significant change, we are faced with an awareness challenge, which is ALWAYS difficult to overcome – especially when our venues are already known for being the x, y, or z place for a very long time.
The reality is that our two centers have been evolving for well over a decade. Until recently (approximately 2.8 years ago), we still weren’t sure what the hell we were trying to become. We knew we wanted to transform both of our locations into Adult Focused out-of-home entertainment venues, but we didn’t know exactly what would work best to achieve our goal.
Well, we do now – it‘s Social Gaming and Attractions designed for adults.
Unfortunately, becoming known for something new TAKES TIME and a lot of effort. In addition, we chose to create our own proprietary Social Gaming experiences.
In the last year, we have added multiple Krazy Darts to both of our venues (7 Krazy Darts in Rochester and 6 in Buffalo). Krazy Darts is proving to be complementary to our Axe Throwing experience and it’s popular with adult groups. Our Krazy Darts’ revenue continues to grow incrementally, which is similar to how our Axe Throwing revenue has grown.
With all the changes we have made over the last few years, we are definitely seeing an increase in Adult guests and especially those who have never been to our centers before.
Difficult to Operate CAN BE a Competitive Advantage
Some Social Gaming experiences are much more difficult and costly to operate than others. These difficult to operate attractions can lead to a competitive advantage, but only IF we consistently deliver a much higher quality gaming experience.
Axe Throwing is a good example of a Social Gaming experience that has to have a much higher level of staff supervision.
For example, well trained Axe-Perts are required. Each Axe-Pert has to be able to teach guests how to successfully stick an Axe. A well run Axe Throwing attraction enables a venue to stand out from the others in town – especially when competing venues don’t operate them at a high level or, and even better, they choose not to operate them at all.
We are currently developing another Social Gaming experience that will also require a higher level of supervision. In fact, I’ve mentioned it to a few operators and their reaction was “That sounds dangerous!?!” Or, “We would never put that in our center!” In other words, a good sign that we won’t have a lot of competitors, at least in the short-term.
Ultimately, we want to operate a number of Social Gaming experiences that other operators can’t operate at a high level or they are just too afraid to operate in their own centers.
Provide Guests with a Clear Path to the Optimal Amount of Socializing
At both of our venues, the goal is to provide our guests with three options that help guide them to the best one. The best Social Gaming option is our “Most Popular”, which enables our guests to participate in two Social Gaming experiences or attractions and provides them with 2 ½ to 3 hours of out-of-home entertainment with their friends, family, or coworkers.
(Below are the Three Options we offer at our Rochester, New York venue.)
In addition, we provide an extra bonus that is activated the very next day and expires within 20 days. The bonus is a FREE gift to come back and participate in the same or another Social Gaming experience or attraction. The goal is to always provide our guests with a STRONG reason to come back as soon as possible. When they do come back, they often bring someone new and that’s one of the goals of the FREE bonus.
It also helps that our Center Manager Pro software automatically emails a reminder to our guests 10 days after their visit to remind them that their FREE bonus is going to expire in 10 days.
Exclusives with Radius Protections
Why are exclusives with radius protections important?
Our Goal as a manufacturer and operator is to create unique and proprietary Social Gaming and Attraction experiences that can ONLY be experienced in our two venues, which means we won’t sell them to competitors operating in our market area.
What Operator wouldn’t want to provide their guests with unique and proprietary Social Gaming experiences and Attractions that are exclusive to their own venues within their market area???
It’s the reason why we are NOW offering this opportunity to both our existing and prospective clients.
Unfortunately, we can’t provide this opportunity to every operator. Once an operator secures their exclusive for the Social Gaming or Attraction experiences they choose to operate, we can’t sell them to any other operator in their protected area – see below for further details.
Up to 5+ Years
The goal of our LASERTRON manufacturing company is to work with the best operators and to provide their venues with an exclusive radius protection based on the number of Social Gaming and Attraction experiences they choose to operate. The more experiences they choose to operate the longer the term of their radius protection and the bigger the area protected.
Purchase 4 units of our new Krazy DartsTM or Axe Throwing 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 4 of each 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 multiple 5-year exclusive radius protections in the United States with more coming soon.
Purchase a turnkey LASERTRON Arena and Game System and receive up to a 5-year exclusive radius protection for up to 500,000 in population or 15 miles, whichever is reached first. Purchase 4 units of any combination of our Social Gaming experiences and double your radius protection to 10 years for both.
Radius protection extensions can occur when an Operator purchases (4) additional units of a newly released Social Gaming experience or the purchase of an existing Social Gaming experience (which is not already protected in their area) 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.
If a new Social Gaming experience is available and an operator decides to pass or hold off on the purchase, the new Social Gaming experience may be sold to another operator, which means it may no longer be available for purchase in the same market area for (x) months or (x) years.
If you have any questions, please reach out to me, Ann, or Greg.
Thanks for reading!
Jim Kessler