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The Rebirth Of The U.S. Arcade? Sega Entertainment's Plans For GameWorks
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The Rebirth Of The U.S. Arcade? Sega Entertainment's Plans For GameWorks

June 27, 2006 Article Start Page 1 of 2 Next

When one thinks of the traditional video game arcade, they may think of a narrow dimly lit neon room, crowded with an array of playable stand-up units, Skee-Ball, dollar-to-quarter changers, and an overall interior atmosphere that tries to look appealing so that younger audiences will be lured in. You'll occasionally see a crowd gather around a Dance Dance Revolution machine where experienced players will get a few minutes of fame in the shopping mall spotlight. A generic mix of aromas from the adjacent food court and sounds of pumped-in Kenny G mall muzak make their way into the arcade. A look at the arcade game selection makes a visitor ask, "Why aren't there any new games?" or "Can't I play this on my home console?"

Enter the revamped GameWorks, a chain of indoor amusement facilities that was originally founded by Sega, Dreamworks SKG and Universal Studios in 1996. However, the chain was wholly acquired last year by the Sega-Sammy Group, and the company is trying once again to take the stereotypical image of the U.S. arcade and completely change it. GameWorks has taken its seventeen facilities in the U.S. and added millions of dollars worth of new arcade games and expanded food and beverage offerings with its Arena Sports Bar & Grill concept.

GameWorks operates as a subsidiary of Sega Entertainment U.S.A. Inc. (SEUI), based in Glendale, California. Its sister company and content partner, Sega Amusements USA, is in a new facility located in Elk Grove Village, Illinois. Sega Amusements has partnered up with GameWorks to use its facilities as testing grounds for new games from Japan, (the trading-card Mushiking and Love & Berry games, as well as UFO Catcher machines, among many).

Gamasutra caught up with GameWorks vice-president of sales and marketing Clint Manny to find out what GameWorks has been up to, and how Sega has given the amusement chain a whole direction and breath of creative fresh air since its chapter 11 reorganization. Manny reveals how GameWorks caught the attention of Bill Gates at its Seattle location for a Microsoft company event, and how games such as Extreme Hunting 2 Tournament Edition will be utilizing Sega's new system starting this month.

Gamasutra first reported Sega's acquisition of GameWorks last November (, and how Sega was going to deploy their Mushiking and Derby Owners Club games into locations. So it seemed fitting to start off the interview asking Manny if the Mushiking game would generate any other new offerings:

Gamasutra: In Japan, the Mushiking franchise has been a merchandising boom for Sega, a Gameboy Advance game released, an animated TV series was aired on TV Tokyo, toys, trading cards, and even tournaments have been held. Has there been any Mushiking merchandising planned for North America? Or is the market for Mushiking still being tested?

Clint Manny: We actually have, through Sega Amusements USA (SAU), they have folks who are now dedicated to the card-playing games, and working on the selling of those which would include any of the merchending and the materials that go along with it.

We have through our redemption counters and for sale at our sites, we do have a limited number of Mushiking items: the neck-holder that carries the cards that you're playing, we do have portfolios that guests can purchase to store and hold their cards. So there are limited supplies, certainly not to the breadth of items you can find in Japan. It is certainly an area of focus for Sega and again through SAU, they have dedicated people there working on sales of Mushiking, and other card-playing games.

GS: One of Sega of Japan's other trading card games has been (Oshare Majo) Love & Berry. While Mushiking appears to be aimed at boys, Love & Berry appears to be aimed at young girls. The appeal of the game for young girls is the ability to win trading cards that will have a new outfit of clothing or hairstyle that the player can apply to the CG character on screen. Has Sega thought of bringing this Love & Berry game into GameWorks to test its reception?

CM: We have and we will be doing that in the coming months. As far as the manufacturing, distributing, and all the R&D that goes into converting, Sega Amusement will be handling that.

GS: Let's switch gears for a moment and talk about the present state of arcades here in the United States. In your opinion, has GameWorks been trying to change the declining arcade scene here in North America?

CM: I don't know if we're trying to single-handedly change the arcade business in the U.S. I think what GameWorks has done has recognized where our opportunities are, and through our relationship with Sega – hopefully we're starting to see innovations back on the arcade side that bring a new and different environment and experience that people can't get at home.

If you're familiar with House of the Dead 4 and the graphics that are a part of that, it's now starting to be back to having an appeal, starting to see some of that impact back on the arcade-side where you can't play in front of a 52-inch screen and have all of the very vibrant color and animation that's part of it – you can't just do that at home.

Then the socialization of what those game brings as more and more games (Derby Owners Club a few years ago) where it's a social environment and you're playing a horse racing game and you're sitting there and you can have cocktails and food, and really get into this game. It's bringing that social entertainment environment back to the users.

What we've questioned in recognizing that is how to create these games in a social environment, in a social setting, whether it be for kids, teens, adults and offer them something where it’s a constant changing of the programming that's available. That's where we started with the Arena Sports Bar & Grill (left).

The Arena Sports Bar & Grill has so much synergy between the gaming and the action and the environment that's created on the arcade side – taking that to a bar and grill environment where you've still got that energy and excitement – there's so much synergy between those two.

Regardless of what GameWorks does, or what you do, or what I do, I can tell you that the World Series and Major League Baseball playoffs, it's going to be in October, it does not matter what I do (laughs) it's going to happen. Super Bowl? End of January, beginning of February, somewhere in that time frame it's going to happen. What it does is, bringing those sports and that excitement and the enthusiasm that's behind all of that – that's built-in programming. People can come for different reasons. Now they're coming for NBA playoffs coming up, NHL playoffs coming up, we've got the Super Bowl and all these different things. (They) can now go out and play NFL Blitz, Major League Baseball, hey let's go compete at half-time, between innings.

There is that synergy between the game floor and back-and-forth in a social environment where you're not sitting at home in front of a screen with two friends playing a game. Now you can compete, be the star, really shine, but you can also be there watching the latest and greatest on the flat-screens that we have which works really well on the gaming side.

GS: What kind of people do you think visit arcades now?

CM: I think there are degrees of "arcades". There are certainly arcades that appeal to a younger demographic, and those primarily that don't have the food and beverage component. They don't have the bars - they don't have the restaurants. They probably have generic arcade games, no real special attractions, and then the other side of it where you do have more special attractions and bigger, new games in that entertainment setting.

It's probably much more diverse than what people would think from the outside, and I think once people experience it and can experience either a personal experience or an event experience at any of the locations that are more glorified than just the standard arcade. I think that they can see themselves in that experience, let me give you an example:

We do a huge focus in our group sale component. We do many parties, hundreds, thousands, of parties a year with corporations. Either for holiday parties, for the entire family of different businesses will bring all their employees and families for a great summer event. Or an incentive program: 'Hey, if we reach this target goal, we're all going to GameWorks, we're going to eat, we're going to play games, we're blowing the afternoon off.' Our corporate business is huge. It's anywhere from, depending on locations, over 20% of our overall business is through group sales. That continues to grow year over year.

We've created a great "team-building" program in corporate America now, where you can actually go and be with your boss to talk about your sales goals and initiatives for the year, and planning for the quarter – all of those things. Then you can go out on teams and compete against each other and it really brings the team together. We've built great team-building programs where some of the bigger corporations in the country, we deal with Microsoft, Toyota, Limited Brands in Ohio. We deal with tons of major corporations and they love that competitive and fun environment that gets you out of that mundane day-to-day conference room at the hotel having a quarterly meeting. You can blow some steam off and go have a great time and you can still accomplish what you need on the business side. We still have the internet access, the big screens for the presentations, then you can go out and have great food and go play games.

GS: GameWorks has introduced the Sports Bar & Grill concept across many of its locations, which allow a mix of patrons into its facility, from families looking to enjoy time together on the weekends by playing video games, to sports fans that'll want to watch a game in the sports bar. Overall, how does GameWorks market itself as a facility for both families who will want to play games and adults who will want to enjoy drinks after work?

CM: It's a very interesting question and continues to be, anyone that can answer that question deserves a lot of money (laughs).

That's the age old question: How do you know outdoor advertising or billboard advertising works to drive traffic to your store? You can tell me how many people drive by the board, and all I can tell if our traffic went up or did our sales go up. When you're looking at the product specific and GameWorks with the food/beverage component and the gaming component, and then take into account age policies and typical day-in-the-life of a family, versus day-in-the-life of a teen, versus day-in-the-life an adult and merge those together.

A lot of it is, is media has become so segmented, I can target specifically kids and families through internet, their cable advertising, through programming of what the majority of those audiences are watching at home. I can really segment that, where if that's a spot about "Host your best 12th birthday party at GameWorks", it's not going to be a cross-over with ESPN running "Hey come watch the NBA finals at GameWorks" - two completely separate audiences. We're not trying to be all to everyone, we're not Jim's local sports bar that's down in the neighborhood that every guy goes to because it's a tavern and they are serving just beer.

What we're trying to do is create an environment where physically within our locations there is enough segmentation that you can have a great sports bar audience that's controlled in being able to literally, at every seat regardless of which direction you've turned your head, is going to see flat-screen programming – and the kids can still be on the game floor having a great time in a safe, clean environment. Not many places can do that. We really look at segmenting that.

We understand that we're not trying to be all to everyone, but what we are is as the generation grows, you and I grew up where we could go to the convenience stores and play Pac-Man and Asteroids. Then later we started getting into other games and we understand gaming.

I'll still go in with my ten-year old girl and my seven-year old girl and my wife and I'll play the games. I'll also wander over and have a beer and check out the score of the college football games. That's a nice environment for me.

GS: Do you strategically place your GameWorks locations next to other key locations like movie theaters and shopping malls? Do you carefully choose those locations?

CM: Unfortunately, what we refer to as Old Co (the old GameWorks company and owner), it was not as strategic. The growth plan was very aggressive, and through that aggressiveness lost a little of the strategy. What we're doing now in any of our future locations, we want to grow that (The Arena Sports Bar & Grill franchise) into a stand-alone franchise and brand, where GameWorks is one brand that is Sega Entertainment USA Inc, and the Arena Sports Bar & Grill is another brand and have stand-alone locations as soon as the next twelve to eighteen months.

We just converted five locations to include the Arena Sports Bar & Grill and we've got plans for three more this year. We're making all of that happen. As far as strategically going forward where we're locating these you're absolutely right, these are entertainment districts where you've got great restaurants and we're not afraid of competing on the restaurant front. So we can go by nature of volume, if you've got five great restaurants that are all in one location you're all going to benefit from the traffic that's driven to five great locations, and we want to be one of those five, with either the GameWorks location for the entertainment, or the Arena Sports Bar & Grill concept for the enjoyment of sports viewing and entertainment.

GS: With Sega-Sammy's acquisition of GameWorks and because Sega is a well- known name in terms of video gaming and entertainment, has there been any thought of placing the Sega logo on GameWorks locations to lure in more people?

CM: Yeah, it's a pretty protected brand. We have certainly talked about it a lot. You'll see more and more as the year roles out, you'll see more and more included in that. It has (the Sega logo) started to be used in some of the advertising, with Sega logos and characters being included. We do have a focus to continue growing the Sega brand in the U.S., and we're working together to do that.

Article Start Page 1 of 2 Next

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