Battletech, Virtual World, and the Failure of LBVR in the 90s, What It Means For Operators Today
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The document discusses the rise and fall of the Battletech center's virtual gaming concept in the 1990s, highlighting its ambitious initiatives, market challenges, and eventual restructuring. It covers operational failures related to high costs, underperformance, and competition with emerging internet gaming. Ultimately, the narrative reflects on lessons learned in real estate, marketing, and customer engagement that remain relevant in today's gaming landscape.
Battletech, Virtual World, and the Failure of LBVR in the 90s, What It Means For Operators Today
- 1. Battletech, Virtual World and the failure of LBVR in the 90s What It Means To Operators Today Charlie Fink COO, VWE 1992-1995
- 2. The Origins of the Battletech Center “For the love of the game.” • Jordan Weisman & Ross Babcock • If you found it, you belong here. • Books, Manuals, Miniatures, Collectibles • Big in Japan • Fan base • Flight Sims • IP and VR
- 5. 1992 Acquisition by Tim Disney, et. al. • Theme Park in a box • Grow the audience with gamers as base • Virtual World Uber Fiction • Explorer’s Club (Virtual Geographic League) • New Adventure: Red Planet • Utilization Strategies: Corp groups, training, education • Elaborate Hollywood pre-shows with movie stars • Two TV deals, Toy deal, Movie deal • Retail firepower (Simon Property Group, Edison Malls)
- 6. Virtual World Concept & Design • Victorian bric a brac from around the universe • Upscale food and beverage • New Game (not a shooter) Red Planet • Battletech Upgrades, ISDN Inter-city Networking, IRC Chat • Booming, popular local events & leagues • Monthly VWE Member Publication • “The World’s First Virtual Sport”: Deal with ESPN for the 2nd Virtual World Cup In Las Vegas
- 12. It Was Mad Expensive • New pods by Frog Design, with Silicon Graphics cards • Software development • Franchises, Real Estate, Investors • PR Agencies, Lawyers • Print and radio • Art from top designers • $500,000 pre-shows
- 13. And Not In a Good Way • Expenses that make no sense for a VRcade: • Food & Beverage • Logos on Food and Bev, Cups, Napkins, etc. • Merch • Elaborate theming that eats square footage • Arcade aversion • Work backwards from the customer, know their needs, solve their problems. • They didn’t want upscale, they wanted hot dogs & arcade games
- 14. San Diego, and 31 more • It’ all about real estate • Overseas, it’s about partners • Yokohama, Tokyo, Sydney, London, Montreal • Company owned: SD, Dallas, Chicago, Costa Mesa, Pasadena, Indianapolis • Franchises: Detroit, Walnut Ck CA
- 15. The Humble Battletech Outpost • Optimized for ONE operator • Minimal footprint • Edison Bros. • 8 Outposts, incl. SF, Houston, STL • Dave & Busters • 12, incl NYC, Philly, & Atlanta Battletech Outpost New York, 2000
- 16. Houston Outpost
- 17. How We Opened 32 Locations in 3 Years • We were in the real estate business. • Consultants, Agents, and build out staff • In the 90s, landlords were able to demand 5-10 yr lease guarantees • We raised a lot of money • 13 million dollars (23M today) • Four years is super fast in retail, and super slow in software • Time was of the essence because we need to amortize sw dev costs
- 18. The Passion of the Players Was Amazing • But it could not be sustained • People found it too costly • Natural attrition • Converting first time visitors into repeaters • Create the best possible first time experience • Separating players of different abilities • Rapid acquisition of advanced ability, long path to mastery • Churn: when the tide turns against you
- 19. The Decline • The Impact of the Internet • The world from home • Underperforming locations • Why Discounting does nothing • Loss of regulars (Internet, PC Games, Fatigue) • No new traffic on weekends • Reduction of hours, employees • Three Phases of Retail Death • People are starting to notice. • The Place is actually looking dingy. • No one goes there anymore.
- 20. Pivot or Die • Q4, 95 Tim Steps down as CEO, Denny Thorley, a video game exec, takes over • Breaks company in two: software and retail • I went to AOL in Dec 95 • Microsoft buys the software company for xBox • The retail company restructured around Battletech Outposts at Dave and Busters. Their last Outpost was retired in 2005. • VWE’s investors declared victory, happy to exit with anything • Post-acquisition, Jordan Weisman became xBox’s first creative director • Ross Babcock ran the Battletech RPG empire for ten years and retired. • Tim Disney is Chairman of CalArts. He has directed four movies.
- 21. Why Did It Fail? • Capital Costs • Equipment • Themeing • Software, New & Updates • Operating Costs • Marketing • Labor • Expensive location choices, leases • Churn
- 22. How Is Today Different • Technology • Quality & Quality of Software • Cost of hardware & software • Real Estate • Social Media • Ecosystem • Awareness
- 23. How It’s the Same • Marketing is a full time job • Local Marketing • The Kids Birthday Business • Utilization, Throughput • Employees, turnover • Utilization: The Rhythm of Life • Throughput • You can’t make it up on the weekend
- 24. Real Estate: The Most Important Decision • Cost, Lease Obligations, Build Out • The value of foot traffic • Diminishes over time • Street frontage, destination, malls • All malls are not equal • Square footage, number of stations • Our best locations were small, in FECs and AECs • Best location in the world: JFK Periscope Kiosk System • The worst locations in the world: IMAX AMC Kip’s Bay, Manhattan • The movie theater paradox
- 25. Pricing • Three models: minutes v day pass v membership • Can they be blended? • Discounting • How to reward heaviest users • What movie theaters do: Incent off peak, Seniors, Students, Military • Limit Groupon, Measure Conversions • Add value, don’t lower prices (e.g. 2 for 1)
- 26. Social Media Marketing • Patience, 12 month strategy • Investment • Instagram, Twitter, Snapchat • How Much and What To Post • Buffer • Facebook (ala Wastebook) • Engage, Be of service, Be the local expert • Curation and Content Marketing • Asking for the sale • Measuring results
- 27. Everything is local • Trials, Discounts • Rather than discounting, consider adding value • Group sales • Churches and youth groups • Charity auction • Schools • PTA • Sports, teams • Colleges • Events • Groupon
- 28. Final Advice • Real Estate: Destination vs. Casual Traffic • Theming, Signage, Build outs • Let them see the experience on outside monitors • Make every square inch count • Use social media like a pro. Curate. • The only merch you need is 25 t shirts. Ever. Period. • Refresh software as often as possible. Curate. • Update hardware often enough to know how it affects the business. • Account for this in your margins
- 31. For The Love Of The Game, It Continues @CharlieFink