Merger Madness
The sign of the amusement sector in transition could not be better illustrated by the merger madness that affected the video arcade scene during 2004-5. Those with a taste for historical perspective will welcome the observation that during the rebirth of the coin-op scene after the 1984-5 crash saw a breakneck merge and acquisition process that created SEGA from their relationship with Gremlin, while acquisitions ate Cinematronics, Centuri, Takumi, Greyhound, Hudson, Universal and the realignment of Nintendo, Tengen, Data East Jaleco and others.

For the current market the reality of the SEGA merger with Sammy came home, with the pairing down of the management internationally and over 30 individuals were relocated. The movement has not ended and 2006 will mark the announcement of the next phase of transition. Only seen so far in Japan other mergers such as Namco with Bandai started to take hold after last minute agreement. Some new surprises also includes’ Taito with Square Enix - turning out recently to be an acquisition rather than a previously announced merger - the Taito name possibly the only element retained.

Other agreements wait in the wings; Konami has been linked with Capcom and or third party but the reality did not materialize during 2005. But news of one merger did break at the end of the year and changed the North American scene forever. The announcement that UltraCade will merge with Global VR proposes a powerhouse unlike any other. The international scene guarding its loins to protect itself over an emergence of a new sector with increased investment and development; newly renamed Merit Entertainment acquiring GamesWarehouse to be ready for what could be the launch of something big.

Younger Audience
While the industry attempts to chart its future, with an eye toward the need to encourage a new generation of players, game developers have attempted to capture their future opportunities. 2005 saw the launch of the Kid Vending (Card Game) systems internationally after popular success with the ‘BeetleKing’ concept in the Asian market. New products from SEGA followed their initial success, while new competition to this market came from Australia via LAI and from Korea from D-Gate (later licensed to Taito).

Other child-centered concepts included redemption video games that offered rudimentary playability to suit the requirements of a younger playing audience - UltraCade, Tsunami and BugEye; all releasing such games during the year. American facility operators proving to be hard nosed in buying new hardware other than for the redemption scene. The Stinger Report will be running a special feature on the younger machine market next month.

Gaming Business
Sticking our neck out - TSR feels that from what has been witnessed in the Gaming Business (especially at G2E - see Stinger #425) that the casino and gaming sector will be looking to apply their big bucks at removing the independent nature of the SWP, AWP and amusement scene and incorporate them into the larger and profitable all-encompassing embrace of gaming.

The encroachment of the gaming scene was seen in tournament prize environment development, the creation of closer alliances with certain distributors and the beginning of financial exercises into the viability of direct investment into amusement. In Japan the reemergence of pachinko was supported by a changing player appetite for token gaming and new GM development; Konami and Sammy looking towards a new gaming future to their core business.

e-Payment
The reality that cash-box could be superseded by casual credit card usage became a fact in 2005. Ecast, Incredible Technologies, and Pepsis-Cola became American corporations that invested time and energy into e-payment enabled machines for the public sector. Though the rest of the industry still sits on the sidelines waiting to see the success of the installation the revolution had started.

In Asia Taito and Namco both invested considerable sums in to the application of e-payment. The Taito NetCash system offered a new scope for pay-for-play, while Namco through their ALL.Net agreements with SEGA increased the use of e-payment opportunities by allowing in the LAN game site EDY accreditation. The development of further applications of contact-less payment recognition such as RadioWare are expected to follow the initial SEGA experiments at selected facilities seen previously.

Theme Park
In the theme parks sector, safety was still as prevalent as what was the latest ride. The spectre of the past Disney deaths put into sharp relief the media scrutiny, next to market incompetence.

Adding to the pain, 2005 saw amusement theme parks enter the hall of shame regarding accidents at site. SEGA's fatality at Joypolis resulted in Japanese police investigation and search, contrition from chief executives and behind the scenes settlement. The ripples of which would impact all areas of the motion simulation scene; the ramifications still reverberating through the market.

Viacom Inc., decided to move for the end of the year to make it known that they were planning to sell their theme park operation owned by its Paramount Pictures division. The dispersing of the operation will place the majority of the interests in their own independent operational control - though it was unlikely that all of the parks would revert to a new ownership as the theme park sector experiences a decline in attendance figures.

In other business the Paramount film division acquired for $1.6 billion the DreamWorks film operation, library of released products and interest to other properties. An admittance of failure of the high expectations that the gathering of film, animation and music giants (including Steven Spielberg). Despite high profile success such as Saving Private Ryan and Shrek, the DreamWorks stable failed to achieve most of its promise.

DreamWorks had been linked to at least two proposals to develop theme park attractions and full-blown park interest. A Shrek 4D ride had been launched in 2004, but the operations original proposal to develop next generation attractions had floundered after they had to pull out of the SEGA, Universal GameWorks concept.

Meanwhile, one prominent expert on theme parks has privately predicted that the very existence of theme parks is under threat…from insurance companies! “They are making rates so sky-high that many of the regional parks and local ‘pocket’ parks cannot afford to pay,” he said. “Some are ‘going bare,’ operating without insurance and without informing the public that any ride they take is at their own risk. But some will choose to shut down, and many will be forced to shut down. The giants, such as Disney, will self-insure if they don’t already.”

Perhaps we are straining to see a silver lining in this cloud, but The Stinger does not share this gloomy view of the future of theme parks. We believe it is quite possible that thrill rides may have a very limited future, given the insurance situation. But that will only put more pressure on park owners to create bigger, better illusions in safe, hi-tech rides. A whole host of technologies - from motion platforms to big screens, 3D, and new generations of digital magic - have already blurred the line between “real” reality and “virtual” reality. The next few years should see this line disappear entirely. The only question is whether designers will bring a level of creativity and content to the table that matches the sophistication of technology and hardware. See our following report “Seat Of Your Pants,” soon.

Changing Venues and Attractions
As the theme park sector pondered its changeable attendance profile and explored fresh means to attract new interest, the popularity of new configurable attractions found growing favor with park owners. 4D effects theatres proved a more interesting area of investment during 2005, beating inflatable sales as the new investment for a wide selection of venues.

Not just the theme park, but the scientific centre, museum and heritage scene looked at the application of the 4D effects environment within their environment, the ability to utilize the foot traffic through their sites helping to focus the mind. At the same time the technology behind this was developed and already up to 12 effects in one seat are being touted as a new level of experience. As the digital movie industry looks at 3D as a means to address a shortfall in audiences 4D hopes to place clear blue water between attraction and cinema.

Along with the museum and heritage scene, the casino and retail sector came forward as another new home for scaleable attractions. At the same time the first glimpse of new style entertainment venues for the retail environment were displayed. Nolan Bushnell attempted to salvage his position in the industry as a visionary by revealing his ‘uWink Media Bistro’ venue concept. Some twenty years since Atari launched the first PizzaTime Theatre concept site in 1986, the company proposes that the mix of touchscreen service, downloadable content an intense hospitality within the uWink venues will enliven the market - we wait to be amazed. So does everyone else. The grand opening of the prototype Media Bistro store in Los Angeles, originally planned for fall 2005, was delayed until winter or spring 2006.

Atari also broke new ground in 1976 with ‘Night Driver’; the first person driver marked a new era, taking video amusement into a genre that would become a valuable and pivotal element in its success. This first representation of the driving experience offered a rudimentary black and white driving simulator but offered a level of play, and cabinet (driving cockpit) presentation that would enthuse many to what arcade gaming at the dawn of video amusement had to offer.

Jumping forward to 1986 and the market, though defined, was still trying to establish itself for the future, leading Japanese factory presented the three screen ‘Darius’ - a pivotal shoot-em-up that has a strong following to this day and establish brand identity fundamental to our sector. Like wise Irem with the launch of ‘Ikari Warrior’ created a brand that would define the company. However 1986 became the definitive year for the Deluxe cabinet, with full function driving cabinets taking the lead. SEGA released to great success ‘Out Run’ (at that point not a Ferrari license) the sports car racer set new standards, and sadly overshadowed what many feel was the equally technically innovative ‘WEC Le Mans 24’ from Konami. Both offered deluxe motion cabinets and a compelling game experience - direct successors to what ‘Night Driver’ had started ten years previously.

Fast forward to 1996 and the big cabinet and full display graphics system has taken hold - a defense against the erosion at fever pitch of the console gaming scene. Namco released their latest full-body motion game ‘Alpine Surfer’ - building on the innovative success of Alpine Skier. The establishment of series had been a factor in amusement but for SEGA 1996 launched the ‘House of the Dead, The’ brand for the company - a brand that will see a fifth release in 2006. Back in 1996 however the difficulties of future amusement support started to tell ‘Scud Racer’ proved an expensive failure for SEGA, their 3D graphics from the Model 3 architecture unable to save a poor game (a lesson worth remembering). Cheaper 3D hardware allowed Tecmo to stay in the battle with ‘Dead Or Alive’, but it was the last of the big investment the company could make in a sector that did not offer the returns of a consumer release.

The changes in the Japanese amusement scene saw the leading lights either investing in expensive 3D hardware, or attempting to establish a cheap delivery system. SNK’s pivotal Neo-Geo MVS system continued to produce technically popular games ‘Metal Slug’ allowed the independent studio Nazca to create a highly successful brand using skills from their ex-Irem developers on the cartridge based MVS so profiting also SNK. Sadly this lead would be squandered and fragment the independent studios that supported the system, now in 2006, the brand has spawned six titles, the latest being ‘Metal Slug 6’ released on Sammy’s own hoped multi-game cartridge system the A-Wave - the repeating of history seems all too obvious as this looks to be the last SNK-P game on this platform. Data East saved in 1986 by SEGA would fall in this year after being acquired just for their back catalogue and Pinball interest.

In North America in 1996 the collapse of the market was much more advanced with great games unable to save failing management structures with their eye on consumer opportunities of salvation. Atari Games, the embittered warhorse, was on its last legs with only a few more amusement release left in it - but what titles. ‘San Francisco RUSH’ would prove to be the pivotal final blast, with innovative hardware and graphics and a network tournament capability (WaveNET) that would only prove its worth in the hands of other in the early 2000. Midway now in transition from parent WMS continued to foster amusement projects with ‘Cruis’n World’ proving a success (though the Deluxe motion version proved a dead-end that would be repeated); Midway management would go on to buy Atari and then fail to manage both - though 2006 will still depend on content from the creators of Cruis’n.

It was the management failures and poor project development that hurt the 1996 market, if it was SEGA trying to hide poor content with 3D graphics, or Atari hemorrhaging finances living off of past success or pure greed. The ‘emperors new clothes’ mentality of Virtual Reality finally imploding in on itself with the excremental final release from the problematic Virtuality VR company, banking everything on using a popular brand to try and salvage respect in what they were peddling - ‘Pac-Man VR’ - proved far too little and far too late, the company would be dead before the title hit the streets; VR in 2006 only remaining in the name of Global VR and their evergreen Vorkex platform.

From the vantage point of 2006, the industry’s 1996-97 rebound holds important lessons. Will today’s amusement industry rebound based on the arrival of new manufacturers, or based on new efforts by established names (even if some are newly merged)?