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Entertainment Strategy - July 2016

Dave & Buster’s shifts entertainment strategy to meet guest demands

by Mike Bederka

Nothing beats a Dave & Buster’s at 8 p.m. on a Saturday night, says Kevin Bachus: “The place is packed, and there’s this energy. People are playing games, drinking and eating, and having fun.”

Bachus, admittedly, may be a little biased. In the four years since joining the powerhouse entertainment company, he has spent countless hours at various locations surveying the crowds and taking detailed mental notes on what they play.

“I’m the creepy guy in the corner watching everyone,” jokes Bachus, senior vice president of entertainment and games strategy—a new position for Dave & Buster’s.

With experience at Microsoft and the social networking site Bebo, Bachus came aboard to help the company take a more proactive stance with its games platform and work closer with manufacturers.

“There was a feeling that the entertainment landscape is becoming a lot more sophisticated,” he explains. “Our guests’ expectations were evolving. In order to keep pace with that, we needed to take a broader view.”

With 88 locations and counting (see sidebar), Dave & Buster’s continues to be a market driver in the family entertainment center (FEC) space. Bachus shares some areas of focus for the company and where he sees the industry heading.

Exclusive Agreements

Thanks to a strong relationship with vendors (Bachus frequently visits Japan), Dave & Buster’s has become the exclusive launch partner for select games, including “Star Wars: Battle Pod,” “Mario Kart Arcade GP DX,” and the redemption version of “Angry Birds.”

“For a short period of time, we were the only place in the country where you could play these games,” he says. “It’s a powerful message that gets people to think about us. They’re going to hear ‘limited availability,’ ‘exclusivity,’ ‘scarcity.’ It’s not about the competition. It’s to get them to think about us and take a visit.”

Expect Dave & Buster’s to continue with this marketing tool and lock in more exclusive game deals in the near future, Bachus says.

Game Selection

When Dave & Buster’s hunts for the best games to add to its mix, moneymaking capability doesn’t necessarily top the list of priorities. In fact, the company purposefully doesn’t seek machines that will garner the most swipes in the shortest amount of time. In other words, don’t look for rows of merchandisers at its locations any time soon.

“For us, we’re trying to create an overall experience so they want to return,” he says.

In that vein, Bachus promises guests will never see typical “kids’ games” at a Dave & Buster’s.

“Families are a large, important part of our audience,” he says, noting “play-together young adults” in their 20s and 30s make up its core demo. “However, we don’t need to put out games that look like they’re designed just for kids. Kids are absolutely capable of enjoying an ‘adult game’ as much as adults. They prefer to, and they don’t want to be talked down to. Also, nothing turns off a 25-year-old more quickly than seeing a bunch of games for kids.”

Mobile Connection

When Bachus started at Dave & Buster’s, the company’s leadership posed a couple important questions to him.

When a guest’s smartphone is as powerful—if not more—than many of the games on the floor, how does that impact the experience? And related, how does Dave & Buster’s connect with its customers when they’re beyond the four walls of its facilities?

Bachus’ answer came in the form of related mobile games. The company worked with its manufacturer partners to secure the rights to mobile app versions of three of the company’s most popular in-house games: “Big Bass Wheel,” “Speed of Light,” and “Tippin’ Bloks.”

“Our first objective was to make high-quality games that feel comfortable and familiar, and, second, we wanted something that felt like a native mobile game, not a conversion of an arcade game to mobile devices,” he says. “This involved integrating more elements of strategy and progression.”

These exclusive mobile games, released about a year ago, allow users to earn tickets that automatically load to their game card. So, if a person leaves a venue with 1,000 tickets on the card and wins another 1,000 through the app, the goal is for the player to return to a physical location to add to the balance.

“It’s an enticement for people to stay connected with the brand,” he says. “Our hope is they just won’t be satisfied with 2,000 tickets. They will come in, play some more, and buy a cheeseburger or have a cocktail.”

Bachus couldn’t disclose the number of downloads to date, but he says the company is “thrilled” by the interest and retention so far—an encouraging sign to the diversity of the Dave & Buster’s brand.

“It’s just indicative of the breadth we’re trying to undertake,” he says.

The Test Kitchen

Dave & Buster’s has its eye on two big industry trends: virtual reality (VR) and escape rooms. But don’t expect any massive rollout yet—or at all, for that matter.

“Virtual reality is a big buzzword, but our role is not to be the leading edge on this,” he stresses. “Our role is to discover emerging trends and bring them to the mainstream.”

The company is currently testing VR integration into the overall product mix, looking at issues of durability and reliability of the hardware, understanding consumer expectations regarding content and length of play, and examining price points and labor allocation.

“As an operator, we want to get our head around what it means to have a VR product,” Bachus says. “I predict a lot of people will rush into it because it’s hot right now, but they may be disappointed. I think the business model isn’t going to be conducive to high volume and high profitability.”

The 46-year-old follows a similar take-it-slow approach with escape rooms, a concept he believes may lean more toward a fad than the trend.

Typical escape rooms require a large footprint and have low volume, which runs at odds with the more casual Dave & Buster’s play model, he says. “How do we do something that’s compelling, cost-effective, and takes advantage of the real estate in a smart way? Yet, it also has the throughput to be valuable.”

He’s now trying out a concept at his San Jose, California, location that features shorter play and a meatier story compared to a typical escape room. “We hope it will resonant more with our customers,” Bachus says. 

All Under One Roof

Dave & Buster’s may not have a classic “garage story” about humble company origins (think Apple and Hewlett-Packard), but it’s pretty close.

James “Buster” Corley had a popular restaurant in the ’70s in Little Rock, Arkansas, and a few doors away, David Corriveau operated a billiards and game house for adults. The pair noticed guests would frequently move back and forth between the venues, so they figured combining their concepts under one roof would make smart business sense.

The first Dave & Buster’s opened in 1982 in Dallas, Texas. (Why not Buster & Dave’s? Corriveau won a coin toss.) The company now has 88 locations and intends to grow the system by about 10 percent every year going forward.

“We offer a comprehensive night out, and that’s really important,” says Kevin Bachus, Dave & Buster’s senior vice president of entertainment and games strategy. “You can go out with your friends, have a meal or some drinks, play games against them and win prizes, and then go home satisfied from the experience. The reason why we’re still here almost 35 years later is because of the idea that Dave and Buster came up with: People want to have that kind of comprehensive, full-rounded experience in one place.”

Going International

Dave & Buster’s’ focus on North American locations will shift in the years ahead. The company recently announced it has signed a master development agreement for the Middle East.

The franchise-based agreement provides Dubai-based Apparel Group FCZO with exclusive rights to develop the brand within the six-country region of the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia. Operators of more than 1,000 stores under more than 50 brands across the Middle East and India, Apparel Group will build seven Dave & Buster’s locations over a seven-year period, per the agreement.

“We have been actively searching for strong partners in targeted international markets,” said Dave & Buster’s CEO Steve King in a statement. “Their leadership, operating infrastructure, and demonstrated ability to develop brands throughout the Middle East has positioned them as an ideal fit for Dave & Buster’s.”