What Are “Family Entertainment Centers” & What Do They Have to Do with the Toy Industry?

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"In many ways we are retailers of toys, in a unique way with an entertainment experience wrapped in."

George McAuliffe, President, Pinnacle Entertainment Group

I was fortunate to have met George McAuliffe, Principle of the Pinnacle Entertainment Group. He has taught me a great deal about the Family Entertainment Center business and how it does and can align with the toy industry. 

DownloadHis company, Pinnacle Entertainment Group, LLC is a leading advisory firm in the family entertainment center industry. Since its founding in 1996, Pinnacle has operated entertainment centers with components including restaurants, arcades, virtual reality, tourist attractions, ice skating, rides, and laser tag, to name a few. Pinnacle’s consulting practice has served entertainment operators, with clients as diverse as Wal-Mart, Disney, ESPN Zone, Brunswick, and many independent facilities.

Mr. McAuliffe is a founding director and past president of the International Association of Family Entertainment Centers, which merged with the International Association of Amusement Parks and Attractions. He is a regular speaker at domestic industry conventions, including IAAPA, AMOA, Fun EXPO, and at worldwide assemblies including ATEI in London, the Gulf Leisure Expo in the Middle East, and the Asia Pacific Attractions Conferences in Singapore and Australia. Readers can visit www.grouppinnacle.com for more information or contact George at georgemc@grouppinnacle.com or 314-422-7197.

Here is my interview with George:

Richard:    George, you have spent your career in "Family Entertainment". Can you define for our readers what Family Entertainment is?

George:    Family Entertainment Centers (FECs) come in many formats. Most people know Chuck E. Cheese, for children, and Dave and Buster’s, largely for adults. In between there are all shapes and sizes. They are most often community based, trading in roughly 20 minute drive time markets. Common attractions include arcades, laser tag, rides, Virtual Reality simulators, mini golf and others. Birthday parties and group sales, including corporate groups, are typically important components of the FEC.

Richard:    How has Family Entertainment evolved over the last few years?

George:    Family Entertainment Center (FEC) growth has accelerated as compliments to other businesses. Almost as a backlash to online competition for time and attention, it seems folks are still in search of out of home social experiences. A central development is the marriage of FEC with bowling centers. As league play from serious bowlers has declined, bowling is an excellent centerpiece attraction for FEC’s. Other growth sectors are cinemas, casinos, restaurants, and resort hotels. All are adding arcades, laser tag and other traditional FEC attractions.

Richard:    Tell us about your company and what role you play in the Family Entertainment industry?

George:    I spent the first 17 of my 38 years in the family entertainment industry with a national arcade chain which morphed into big box family entertainment complexes. We founded Pinnacle in 1996 to assist developers and operators of FEC’s, in all their dimensions. We leverage our experience on behalf of those folks on a consulting basis. We also work with companies, our strategic clients, on strategy and tactics for penetrating the FEC market.

Richard:    Some readers may not know that toys play a role in Family Entertainment centers as prizes. Can you tell us how this works?

George:    Redemption games are games with merchandise (toys included) rewards for skillful play. That merchandise drives sales to the games. It is the leading category in FEC arcades today, capitalizing on its wide age and gender appeal. Arcades are now entertaining three generations and we are mainstream entertainment.

Toys are a big part of the merchandise mix. A lot of toys move through another category of games, “instant prize games.” Crane machines are the lead although there are other formats. A lot of plush, balls of all sizes, and even electronics are vended through direct prize machines.

In many ways we are retailers of toys, in a unique way with an entertainment experience wrapped in.

Richard:    Is there a possibility for Family Entertainment Centers to begin selling toys? And what other ways do you think the toy industry can synergize with the Family Entertainment business.

George:    The traffic counts in today’s FEC’s are pretty impressive and, for toys, it is a well- qualified audience. Traditionally we’ve shied away from offering a retail option at the redemption counter. We argue that direct retail there would interfere with what we call the magic of redemption, which has to do with the unique ticket currency. That said a separate retail component with distinct product selection could work.

In terms of other ideas, toy retailers are facing the pressures of online competition. I’ve often thought adding a little “experiential retailing” in the form of well executed and branded game rooms could improve their retail experience and help drive traffic back to the stores. 

Richard:    If someone wants to know more about the Family Entertainment with whom should they make contact?

George:    We're online at www.grouppinnacle.com or they can call me at 314-422-7197 or email at georgemc@grouppinnacle.com

One thought

  1. Thanks for recognizing this segment of the children’s entertainment business! Don’t forget the other side which is the games of skill and chance at theme parks, carnivals, state fairs and beach resorts! Basic Fun has a major division of our toy business, called Good Stuff, which is a leader in this field. We supply FEC’s as well as game operators with plush, balls and other product used s redemption prizes. By the way I started my career in toys working in a shore resort arcade many years ago! It’s a wonderful business full of great people.

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