The Stinger Report returns to the opportunity of a 'legal' Pay-for-Time (Pay-to-Use) amusement system, to usher in the opportunity of Public-Space 'VenderTainment' - and reveals the 'Game Gate VU' hardware and a business model that could rock the foundations of the very amusement scene. The first 'none' amusement adaptation of console gaming that presents a business models familiar to the Digital Jukebox scene, as amusement could be sidestepped for an easier - and profitable variant of the public space gaming!
Building on the Stinger's last coverage on a new business model proposed to enter the amusement industry ("Xbox 360 Enters the Amusement Arena?" (#659)), we can exclusively report that the industry will be seeing a second attempt to establish the hardware into the amusement sector - and in the process looks to blast the conventional video amusement scene asunder!
This feature reports on a new way forward, now comprising legal backing from some of the most influential consumer gaming corporations, offering a platform for the public sector that could totally sidestep the conventional amusement industry as we know it, and create a new drive for gaming outside of the home! The aspects that hindered to the previous attempt to enter the market had now been addressed with a far reaching development that adds a major component to the makeup of the public-space game system, with a fundamental firmware agreement. The firmware deal involves the company iGames, known for "uniting game centers around the world!"
Founded in 1996, iGames currently offers a wide range of services for those operating LAN facilities, with over 900 standard and advantage member game centers supported by the operation, with an estimated 1.2 million players served per month. The company offers the ability for consumer games to be utilized in LAN and CyberCafe, supported by effective marketing and tournament services. iGames organizes 200 events a year including high price prized tournaments; venues based from the US, Canada to Brazil and other regions.
Those that have a really good memory of past Stinger coverage will remember the 2004 feature on "LAN Center Rocked by Legal Crackdown!" (#328), covering the legal action by Valve Corporation, sending out 'cease and desist' letters to illegal users of their PC game content. In this article the Stinger reported the formation of independent and franchised LAN site operators and their subscription to an organization called iGames, supporting a market then estimated to represent 100,000 Local Area Network (LAN) sites (Game and Online Cafes). iGames has worked with a number of hardware and software partners to license content and platforms. The company has signed licensing agreements with Microsoft Game Studios, Electronic Arts, Vivendi Universal Games, Activision/Blizzard Entertainment, Ubisoft, among others. And this is where the 'Game Gate VU' comes in!
In a brand new undertaking, the concept of the 'Game Gate VU' has been packaged and enhanced with the support of iGames, who will act as the legal bridge between the operators and content and hardware suppliers - using their software licensing agreements with these parties for application in the public-space to also encompass tournament application on the 'Game Gate VU'. Through operation supporter American Reload - the literature includes the statement that the 'Game Gate VU' will be shipped with iGames membership registration documents including the all important 'Public Use Licenses' for utilization in this market. This is based on those already supplied to iGames member LAN venues to be able to use games at their sites.
It was revealed to the Stinger that a proprietary interface board is an important part of the package proposed in the 'Game Gate VU', as the iGames agreement with the consumer companies to run their tournament environment must not have any alien components between the console and the tournament system; the Quasimoto hardware alleviating this issue through the board. We are told that there are a great deal of unique features that simplify game management, remote access, seamless consumer experience and more details to be revealed very soon.
The proposal is now that 'Game Gate VU' machines will be sold with a unique 'activation code' that will allow only account holders to run the system - rather than just buying the machine flat and getting unlimited access to home games, the operator will now have to subscribe to a monthly membership and activation to operate. These machines working only with an activation subscription, proposed to be packaged like the equivalent of individual CyberCafe (Internet Kiosk) units, rather than arcade machines. Licenses have to be maintained or the equipment will not function anymore.
It has to be remembered that when using a home game console the 'Game Gate VU' is only installed with one game at a time. Switching to a PC version of the system will allow the housing of multiple titles in one cabinet. Even with a game console the operator is able to update (swap-out) with new games as time and popularity demand. The list of available games is rapidly growing, with specific launch titles to be announced.
The latest graphical rendering of the game cabinet, used in new American Reload marketing literature, gave us a glimpse of the expansion plans of the concept, with a Playstation 3 and Joypads mounted in the machine - supporting the Xbox360 system that will be launched to the general trade first.
This ground breaking development represents a complete sea-change for the operation of video gaming in public-space application. Far more than just a means to offer console gaming in arcades, now retail, hospitality and leisure can consider an appropriate means to entertain their audience with a familiar and popular package; a system easily configurable to embrace different games, offering network (verses), and even prize tournament components through the Quasimoto/iGames infrastructure. Sources speak of 70 per cent of 'Game Gate VU' placement being in non-traditional amusement venues.
For Quasimoto, this relationship with iGames benefits from the company's ten years of experience and extensive due diligence carried out to build the best bridge to consumer gaming in the public-space. Those involved see their business purely in the 'Pay-to-Use' sector compared to the conventional amusement 'Pay-to-Play'. Already partners to help sell the system internationally have been selected. US distributor Deith Distribution (working with American Reload) has signed up to be part of the project.
Just as we went to the wire with this report, we were given permission to reveal that the European distribution of the 'Game Gate' (in that sector but for Italy) had been signed to SEGA Amusement Europe. This groundbreaking development will see a considerable presence of the new platform on the SEGA booth at ATEI'09 - a very public launch of the system to the amusement trade. In Italy a well placed representative has been signed, while the Asian, South Pacific, African and Middle East will be in the control of the new start-up 'Game Gate Asia' (operated by Highway Group).
Breaking Stinger News - iGames and Quasimotos mentioned due diligence requires some political 'smoothing ruffled feathers' - as previously reported in our last feature, Microsoft had already established an open-ended utilization of the original Xbox hardware in amusement. Sources in Japan suggest that SEGA perceives that any application of Microsoft technology in this sector is contractually linked to their involvement - though there is still no confirmation of there being an issue with the 'Game Gate VU' especially now with the partnership in Europe. However if the system is to house the PlayStation 3 - the whole aspect of Namco Bandia's agreement with SONY Entertainment (seen with the use of PS, PS2 and PS3 chipsets in arcade hardware) will have to be addressed - and this could prove very challenging!, even more so as the 'Game Gate VU' team sees Asia as a vast opportunity for machine sales. It should be noted that iGames LAN centers currently use PC, Xbox 360, and Playstation 3 consoles in a legal way, so this appears to have been addressed in some fashion - though the standing of these licenses outside of North American has not yet been revealed.
Though missed by many, the 'Game Gate VU' broke cover to the trade at IAAPA'08 in Orlando. Marketing material displayed along with extensive agreements with early adopters - however ATEI'09 is to mark the big presentation of the operation and infrastructure, big surprises expected regarding particular agreement to be revealed - momentous developments in the system's life.
Those that have been briefed on how the concept of the 'Game Gate VU' will work have likened it to the revolution in the US amusement industry that 'Pac-Man' ushered in to being during the 80's (the game filling a perceived vacuum for easily available quality hardware to meet demand). The ability for the venue owners to operate machines themselves - rather than needing to go through the complication of separate distributors and operators - the machine discarding the conventional 'amusement' model for a direct sales and subscription agreement. Content will be supplied from the leading consumer game houses packaged by iGames for legal application on the 'Game Gate VU'.
In discarding the amusement model for 'Pay-to-Use', video amusement industry could find itself totally left behind - there is no need for involvement from the conventional sources, even the trade associations and media services could be circumvented by the proposed American Reload business model (no PAS, no operations licenses, no arcade trade!) We have come full circle from seeing failed attempts in the past abandoned as an illegal dead-end - to now seeing the 'Game Gate VU' as the possible emissary to a whole new genre… if not a whole new industry!
What Could this all Mean:
Regarding the proposal of a ground breaking video games system using a subscription model - we have seen this proposed methodology successfully applied before!
The 'Digital Jukebox', evolved from systems launched in 1999 towards a connected (downloadable) broadband platform, with network connection, content could be piped directly to the operators' facility and so ended the need for 'loading' (manually filling the machine with the latest popular music). So was born the jukebox music subscription with its new pricing model of recurring revenue. To operate these systems, the venue operator has to create a special account that the service provider directly debits the 'subscription' fee on a regular basis - the new Digital Jukebox able to automatically disconnect from the service and shut down if the subscription is not paid.
This subscription can be made as a 20 per cent deduction from the machines generated revenue - the ability to be connected allowing access to the operated machines statistics (obvious discounts given to the number of units run by an account). This subscription fee comprising network connection, music properties and licensing agreements fees... and a healthy profit!
The old and established jukebox sector stretching back to 1927 was left adrift by the emergence of the connected Digital Jukebox. Breaking all the conventions, it completely reshaped the relationship between venue, operator and the new operators service providers (such as AMI, Ecast, Sound Leisure, TouchTunes etc.,). The digital service opening the door not only on vast libraries of music and video content, and new revenue models, but also the opportunity to open this platform to the opportunities of digital streamed advertising.
Obviously the amusement industry is not new to the idea of subscription charges for downloadable content, though it has not been fully endorsed as it breaks the distributor lynchpin of the current industry. Recently Merit Entertainment has proposed a $25 monthly fee for the support of the new 'Aurora' touchscreen terminal, and with a possible move towards more digital content download to game terminals a subscription model will grow in popularity from other factories.
The similarity between the 'Game Gate VU' and a CyberCafe is a view shared by many involved - a simple package appealing to the widest audience. Amusement companies such as Namco Bandai have already developed a CyberCafe packages for their home market with the 'LEDZONE' facility operation. Both Taito and Namco Bandai licensing the PC fps content used in these sites from publisher Valve to run in amusement (Valve are reported to have an iGames agreement, though its status with the 'Game Gate VU' is not yet known).
You will remember recent Stinger coverage that reported that retail store giant HMV acquired the 'Gamerbase' LAN operation, to be rolled out in their stores after the success of the London installation of 80 terminals in their store, (the first of the roll out following the acquisition scheduled for Manchester). This LAN venue housed in the famous Trocadero facility over shadowing their amusement neighbors, cyber gaming seen as a strong 'entertainment anchor' for a retail scene in transition.
So we now wait for the first major developments of the 'Game Gate VU' into the public-space scene, as well as an expected explosion of interest from the console game media! Having seen Raw Thrills, SEGA Amusement and Namco Bandai all embrace and license consumer game hardware or software for coin-op, this latest development could really start the ball rolling to reshape amusement business!
The real area of interest is companies such as Nintendo, Electronic Arts, Activision, Ubisoft and others that have developed more pedestrian methods of getting amusement representation of their brands, will now have to re-evaluate their market entry. Could the appearance of the 'Game Gate VU' see an abandonment of the traditional amusement licensing route of redeveloping a game for public play, replaced by this concept?
The kiosk and terminal sector have developed their pay-for-time (known as pay-for-use in the sector) game systems focusing on the lucrative market of hotel, truck-stop and family play centers, all this and the lucrative online gaming market scene valued at over $500m). The need to both license content and create a flexible platform has defined development. Companies that have made the public-space sector their home include Kiosk Information Systems (KIS) and their 'ZAZOOX' (PC Hardware) system, whose launch was broken by Vending Times and the Stinger Report last year. This system offering a turn-key application as a pay-to-use 'game cafe' for hotels, airports and even army bases, bringing online support, along with game content for verses and online competition.
Since last years launch, KIS has accelerated adoption of the platform adding the functionality of high-speed internet access, online multi-play and email - this supported by a new photo upload element. Along with encouraging casual user gaming, the infrastructure supports a new Cafe Manager software package for users to build an account they can return to, building repeat traffic, this reflecting the 60 percent of online use against 40 per cent of game use on the platform in the field. All this packaged in a High-end ('ZAZOOX') and Low-end ('NETZOOX') machine configuration cost-effective package seeing great success in military bases, airports, large retailer game rooms, and similar high traffic locations.
A company that has demonstrated this technology in the amusement scene is the Portuguese based Play Global, who in the end favored dealing directly with the leading PC game content provider Valve - the Stinger in its ATEI'08 coverage revealed the launch of their 'E.Spot' (PC Hardware) system. 2009 marks a new development launching the 'E.Spot Gaming Extreme' (PC Hardware), the hardware now focusing on a three-way electronic point of sale (ePoS) model that combines play, communication and surf.
The communication element includes the use of the Windows Live Messenger as well as conventional online support. The new cabinet itself has been developed in two versions - one with full keyboard and game joypads - while the other includes a cut-down keyboard and arcade game controls. The new system comprises the latest PC game licensed releases, such as new flag ship game titles are 'Left4Dead', 'Portal' and 'Half Life 2: Episode 2', just to name the first of a yet to be finalized list; all this continuing to build on the exclusive agreement with Valve software publishing powerhouse.
The biggest addition to the original concept is the inclusion of a new revenue stream of advertising; the system incorporates the capability for a remote slave display that is supplied uploaded advertisements. The whole of the E.Spot system builds on its connection to a Central Management Server. Operators paying a subscription to be connected to this service providing information about their machines and network. This compulsory monthly subscription covers Valve royalties, and the connectivity to the services mentioned.
Hoping to bestride amusement and public-space with console as well as PC content, the 'Game Gate VU' will now move towards market penetration with the support of its partners following its launch at ATEI'09, but as can be seen this is a emerging and profitable sector of the interactive public-space game scene - one sadly missed by the majority of the coin-operated amusement industry to their cost.
Finally, when many in the amusement sector claim the market is depressed and nearly dead there seems to be a large amount of new development going on - it would seem that there are two industries - one that represents old stale thinking on how the industry 'should' be. And a second industry representing new comers wanting to develop ideas on how the industry 'could' be! With this in mind the Stinger will be soon following this report with another revealing yet another new video amusement machine with a subscription model - this time for a Japanese manufacturer!
News Story with thanks to Kevin Williams. Please visit www.thestingerreport.com for others.