“Chip enabled credit cards…mobile payment apps…How can we keep up?”
Every week there seems to be advances to payment technologies. From one direction we are being hit with chip enabled credit/debit cards that do not have to be swiped but just placed near a contactless payment reader. Worldwide there are already 1.65 billion of these new cards issued, with another 575 estimated for the U.S. by the end of 2015.  At that time 50% of all US credit/debit cards will have the EMV chip. Many will require a pin code before activation but others will feature fingerprint-activated security features that are embed in the EMV chip of each card. Next year a new law goes into effect placing fraud liability on the entity in the transaction chain that has the oldest technology. Where will this cycle end?

From another direction, mobile payment systems and apps are quickly becoming the payment of choice for the younger generations, where smartphones are the center of their world. We older folks notice the smartphones that have a scan code that is used in place of airline paper boarding passes and many have taken this first step and like it. The Starbucks mobile app was used for more than $1 billion of payments in 2013. BYNDL is a mobile wallet payment system that includes a customer engagement platform, and is aligned with almost all the majors including Visa, Master Card, American Express, Pay Pal, and Apple Pay. Yes, Apple is heavily moving forward with Apple Pay for iPhone 6 models and future models.

The vending industry is getting traction through USA Technologies that currently has over 150,000 NFC readers in place. PayRange uses a Blukey in vending machines (and is working with AMOA for amusement games) to link up and with smartphones that come within its wireless range. As reported by Vending Times, the Three Square app is being used in unattended micromarkets for payment checkout for Android and iOS mobile devices. The customer sets up an account, establishes a balance and then uses the smartphone’s camera to scan each barcoded item purchased. This is the entire system. Not even a kiosk is needed! 

What this could mean. If we agree that an endless cycle of new credit cards being forced upon us is not practical, then what?…
It is obvious that we are heading toward a cashless society. It also seems likely that the younger generations will continue to use their smartphones to make mobile payments and to individually interact through apps with their preferred service and product suppliers. Even the banking industry has noticed that more and more check deposits are being made through smartphones.  The mobile wallet concept should quickly gain traction and fewer and fewer people will carry credit cards.  Some will carry one credit card as a back-up in case their cell phone needs to be charged, breaks or is stolen. After a while even these problems will be minimized or eliminated so no one will need to carry a credit card.

The ‘street’ part of the amusement game industry (limited number of games per location) will most likely follow the vending industry and easily and rapidly move towards mobile payment systems. This will require one special contactless reader for each game or machine and a set of standards. This makes much more sense than trying to keep up with the endless upgrades necessary for any new technology credit card acceptance so the operator is not the weak link in the technology chain.  However, the FEC industry needs to take a more aggressive path.  While the rest of the U.S. is moving towards cashless, the FEC industry is slowly moving forward with debit card systems. Almost all of the new FEC’s utilize debit card systems and currently approximately 10% of FEC’s have them.  But as mobile payment grows, more and more people will not feel comfortable with carrying any type of loyalty card.  Even today, a growing number of registered FEC debit card customers ‘forget’ to bring their cards with them ‘sometimes.’ In the future ‘sometimes forget’ will turn to ‘often forget’ and then to ‘always naturally forget’.

What is needed is a method to include every game debit card into a mobile payment app so carrying a physical game debit card to a FEC is no longer necessary. Perhaps the first step is for a customer to scan their mobile wallet game card to a debit card kiosk or POS station that has the proper reader and have the kiosk or staff person issue a physical game card that has all of the customer’s information and current credit and ticket point balances on it.  If the customer wants to add value to the card, it could be done just before the card is issued or do it from their smartphone.  At the end of the visit a customer would return the game card and any value and points would then be wirelessly transferred to their smartphone and the returned game card would be cleared and voided.

Under this scenario, every debit card system supplier would need its own specific app.  Perhaps the AAMA Standardization Committee could look into creating some basic standards to make sure that each debit card system app would be compatible with as many smartphone mobile payment systems as possible and continue to upgrade the standards as future technologies dictate.

Party Center Software is Being Installed in All 15 Main Event Facilities

Here’s the Ticket!

Party Center Software, celebrating its 16th anniversary, is a reasonably priced software program that schedules and manages birthday parties and group events. It has built-in reporting features including customer database, revenue reporting, marketing tools, invoicing, waivers, checklists to monitor event progress, employee activity tracking, and-the big one, ‘on-line booking’. It is very easy to work with and you quickly learn how to build your own custom parties. Many of AEM’s clients use Party Center Software and are glad they got involved upon opening.

What this could mean. The big chains have realized that they need to book more parties and events, streamline the process and eliminate the huge amount of wasted labor. In many areas of the U.S. more than 50% of parties and group events are being booked on-line. In some FEC’s I have seen 70% of parties booked on-line. Party Center Software makes this process easy for moms and dads to do.

Competition among FEC’s and other leisure out-of-home competitors is reaching an all-time high and escalating. It is critical that if you don’t have Party Center Software, you need to at least take a look at it and discover how it can help you meet the competition head on or at least compete on a level playfield.

For more information click on the Party Center Software ad or visit www.partycentersoftware.com.

Alpha-Omega Launches a NEW Game Revenue Increase Program (GRIP)

Here’s the Ticket!

Alpha-Omega Amusements and AEM have been maximizing game revenues consistently for the past 45 years within our own revenue-share operations and for our consulting clients. (We have the highest revenue/game average in the U.S.) Now we can do this for you!

We know the challenges that face every FEC game operation to maximize profits. Know which games to trade-in, which ones to buy, and how to preserve the asset value of your portfolio. Get a GRIP to help you overcome these challenges!

The Alpha/AEM Team can manage your games like a financial expert manages your portfolio for a great return. For a small percentage fee, you get a team of hands-on-experts to assist you with the daily technical aspects of your operation, the weekly collections review, and ongoing marketing programs and operational issues. We can even help make your technicians’ jobs easier and more rewarding by assisting them directly with just a phone call to our experts. By anticipating issues that affect game revenue and implementing programs to lessen their impact, you can maximize your game profits.

Click this link to learn more about the services and how to ‘Get a GRIP’

Chuck E. Cheese Buys Peter Piper Pizza Chain

Here’s the Ticket!

CEC Entertainment, with 577 Chuck E. Cheese locations, has purchased Peter Piper Pizza that operates 32 corporate stores and 115 franchise locations, mainly in the southwest U.S. Just a few months ago CEC was acquired by Apollo Global Management for $1.3 billion.

What this could mean. This is a great purchase for Chuck E. Cheese. Peter Piper Pizza has been developed in primarily Hispanic communities in the southwest U.S. and Mexico. Hispanic families eat pizza on average 26 times per year or once every 2 weeks. This is the highest for any ethnic group and other groups are slowly catching up. The original PPP mission was to feed a family of 4 for under $20, including playing games. Many years ago I consulted for Peter Piper Pizza and the goal was to expand to other areas of the U.S., but the expansion funds were difficult to obtain. This is not a problem for Apollo and we can expect a large expansion over the next few years, especially with the economies of scale that Chuck E. Cheese has mastered and can now integrate with PPP.

Game suppliers will certainly benefit. PPP does a lot of birthday parties already and they will likely do more. PPP caters to a higher age group than CEC (up to 8 years old) with some overlap in the 6-8 age group. Actually, PPP caters to everyone. There will most likely be some PPP’s that are larger and include FEC attractions, but we will most likely see more stores in the 15,000-20,000 sq. ft. average range.

With all of the expertise and economies of CEC, and their focus on introducing new technologies, these new PPP’s should be very successful. The FEC industry will need to be on its toes to stay on top of this new competition as well as the new competition from trampoline parks, and new store expansions from large chains like Dave & Busters, Main Event, and Rounders. Every FEC needs to make sure that they are maximizing revenues in every category and cutting out all unnecessary costs. My advice is to make sure that the average per capita spend is in line with what it is for the target markets you operate in, or that it can be quickly adhered to when the time comes. Over the past few years, many FEC’s have focused on higher per caps to cover lower attendance and felt secure that they captured much of their higher end socio economic market. This is a difficult long term strategy to maintain. My strategy has always been to have a blended focus on capturing a higher attendance (including higher repeat visitations through loyalty programs) by providing value to a wider economic range of the target markets. So far, it has worked well for 45 years.

Foundations University Starts Off Its 12th Season January 20-23, 2015 in Phoenix, Arizona

Foundations Entertainment University, going into its 12th year, continues to be the entertainment industry’s resource for covering all aspects of market & financial feasibility, planning, design, financing, development, marketing and managing a location-based entertainment business for long term success. The class provides a complete blueprint for anyone developing and opening a new center or significantly expanding or renovating an existing location-based entertainment facility. Just as important – existing facilities can learn how to stay ahead of the competition and expanding markets.

    • January 20 – 22, 2015 – Phoenix, Arizona – REGISTER BEFORE DECEMBER 1st and SAVE $160
    • July 21 – 23, 2015 – Chicago, Illinois
    • October 13 – 15, 2015 – Dallas, Texas

For more information, visit www.foundationsuniversity.com.

Knock It Off Rotary with Ticket Bundle Formations: Last Week Ranks #5 Overall and is the #1 Merchandiser

Here’s the Ticket!

This is an amazing story and you won’t read about it anywhere else. The Knock If Off came within $3 of tying the Big Bass Wheel for the #4 Overall ranking out of 82 games. I never expected this when the Alpha-Omega Team went to work on using actual ticket bundle formations rather than barcoded ticket vouchers in the round dishes that we had been using on our Knock It Off Rotaries for the past 10 years, that kept the KIO around a 30-40 ranking overall.

For the past several months our Ticket Candy Crane held the #1 Merchandise ranking and got as high as #6 Overall with earnings in excess of $3200/week. It is only recently that the Knock It Off has surpassed the Ticket Candy Crane in rank, primarily because it is a 4 player game. The Ticket Candy Crane is set at $1/play and the Knock It Off is set at 50 cents/play. The good news is that there is interest among a few game manufacturers to make new rotary games! TRR will keep you informed.

Our staff is having fun coming up with new and attractive ticket bundle formations to show the customers something new each month. Check out the Test Games Spreadsheet and Top 60 Redemption and Merchandise Games Combined Sections for more details. These two ticket games show how important hit frequency and ticket putout % is and why simplicity is a major factor in creating a top redemption or merchandiser game. It also dramatically demonstrates that going completely ‘ticketless’ is not all it is cracked up to be. Even in a ticketless redemption operation, tickets can still be used in merchandisers.

The International Association of Trampoline Parks (IATP) 2nd Annual Conference & Trade Show

Here’s the Ticket!

The International Association of Trampoline Parks (IATP) 2nd Annual Conference & Trade Show took place October 14-16 in Scottsdale, AZ. Attendance counts totaled 235 comprised of 165 trampoline park owners, managers and affiliates, and 70 exhibitor attendees from 36 companies. Several well-known coin-op and FEC suppliers exhibited: AMOA, Bay Tek, Betson, Center Edge, Creative Works, Northeast Insurance Center, Embed, Party Center Software, Quik n’ Crispy, Rhode Island Novelty, Sureshot Redemption, TrainerTainment, Tricorp Amusements, and Zone Laser Tag. Well known FEC presenters (non-exhibiting) included Jerry Merola (Amusement Entertainment Management), Shery Bendelglass (SherylGolf), Wayne Pierce (Pierce Law Firm), and Frank Seninsky (Amusement Entertainment Management). I presented two seminars: ‘Enhancing Revenue through Added Attractions’ and ‘Games & Redemption’. I also attended 10 of the 51 seminars and learned a lot more about trampoline parks.

There are approximately 200 trampoline parks in the U.S. and another 100 worldwide. Another 100 are planned over the next year. The TP model has many similarities to the FEC model and some important differences. Many of the original TP’s are paying very high per sq. ft. rates but quickly learned that 15% of revenues is more in line. The time of stay is 1 hr to 1-1/2 hrs and the average per capita is around $14, but does not include non-jumpers. Birthday parties and groups are a big part of the business. Most do not focus on food but do sell beverages and ice cream products. Some have games but do not focus on them. The per capita spending of spectators (like parents and grandparents) is almost non-existent. Size ranges from 20,000 sq. ft. to 40,000 sq. ft. The children, teens and young adults actually jump for about 20 minutes of each hour. The main competitive focus for the future is to come up with different jumping attractions just as FEC’s look to change-out or upgrade their attractions.

FEC time of stay is longer (2 hrs to 2-1/2 hrs) and the per capita spending is slightly higher but also includes revenues from all visitors. FEC’s have multiple attractions and food and game revenue is a big part of the business. Birthday parties and groups are very important.

Pictured Right: (L to R) Armando Lanuti of Party Center Software pictured with Frank Seninsky at the IATP 2nd Annual Conference & Trade Show.

What this could mean. The trampoline park industry, began a slow growth period with the first park opening in 2004 until about 2010, when the industry exploded and is now seeing parks open at a rate of 5-6 per month. Most of the industry is driven by young entrepreneurs who are not aware of the ups and downs of the FEC industry over the past 30 years. They are not aware of the fate of single attraction facilities such as bowling and laser tag that had to add attractions in order to survive after the shine wore off. They are franchise driven and there are more than a dozen suppliers (4 main ones).

My financial analysis shows that each park is giving up as much as 50% of their potential revenues by not also including a full games zone, full snack bar, and other smaller footprint attractions and encouraging their customers to stay longer, spend additional money, and increase their frequency of visitation . All of the facilities have high ceilings and there is a great opportunity to fully utilize the existing overhead space. Many of these facilities could be designed properly to take advantage of these revenue opportunities currently and in the future. There are a few that can be considered as stage 1 trampoline-anchored FEC’s and I commend them.

Insurance costs are 2-3 times higher for TP’s than for traditional FEC’s and this is a major industry concern. However, the IATP is aggressively and proactively focusing on this issue. My research shows that insurance companies will soon offer a blended rate where food, games, and FEC attractions revenue will not be rated the same as the trampoline attractions revenue, but at much lower rates. The same will hopefully apply to FEC’s that add a trampoline attraction, rather than rating all of the FEC revenues at the higher trampoline rate.

There are already several market areas that have multiple trampoline parks and this saturating trend will continue until feasibility studies are taken more seriously. Some trampoline parks will close and others will see this and quickly transform. I predict that within 3 years, the majority of the trampoline park facilities will begin to focus on capturing the additional revenue that is required for long term profitability. In the meantime, the exhibitors and FEC consultants will continue to educate the IATP members (now about 110 facility members) and the franchisors to avoid failures and be successful. After all, we are all in the same leisure entertainment industry.

For more information about the Indoor Trampoline Park Association, visit www.indoortrampolineparks.org.

WHAT’S HOT – SHOWCASE IDEAS – GREAT REDEMPTION COUNTERS

HMS Monaco

Disney Frozen continues to be our hottest selling line of merchandise. In 2014, Frozen became the #1 grossing animated movie of all time, achieving a cult status. Kids have been clamoring for anything Frozen! HMS is continuing to add to our original line of licensed plush, dolls, backpacks, pop figures, and novelties. Among the new items we’re offering are necklaces, bracelets, lanyards, purses, earrings, etc. with excellent price points for redemption counters and prize machines. Place your orders now for upcoming deliveries.

With the start of NFL season, HMS is offering our seasonal line of licensed NFL plush and key chains. Choose from our “hot team” NFL plush packs in regular and jumbo sizes, or customize your own assortments. Our new NFL key chain program features team logo and bottle opener key chains, attractively priced. These key chains come packaged in see thru clamshells that make hanging easy. All NFL teams are available.

Other prizes that continue to sell briskly for us are Minecraft plush and novelties, Deluxe Sliderz Headphones, and Despicable Me plush and novelties.

For more information, please call us at 800-777-0901 or visit www.hmsmonaco.com.

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Rhode Island Novelty

1-800-435-3456
www.rinovelty.com

Continued Top Girl Sellers for Display Counter:

JR-ASTSP – 1″ Sparkle Ring Asst: $.04 ea
JB-BRASP – 4″ Sparkle Bracelets: $.08 ea
ZA-PAND2 – 2″ Plastic Panda: $.08 ea
PA-UNIC3 – 3″ Plastic Unicors: $.20 ea
DO-DOLL4 – 4″ Dolls: $.31 ea
AM-WPPNP – 5″ Animal Print Purse/Notepad: $.35 ea
MK-LIPGL – 3.25″ Scented Lip Gloss: $.35 ea

All prices are at Case price level.

If you are not receiving RINCO’s Montly Redemption Tips, be sure to email Frank Bejbl to be added to the mailing list. ([email protected])