GLENDALE CALIF. GameWorks chain is ratcheting up new food-and-beverage formats to better compete against such other games-and-dining specialists as Dave & Buster’s and Chuck E. Cheese’s. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
Sega Entertainment U.S.A. Inc., or SEUI, Sega Corp.’s Glendale-based North American operations arm, this month launched World Sports Grille, a new dining concept inside the GameWorks branch in Detroit. The sports-oriented concept is expected to eventually replace existing food-and-beverage operations within all the chain’s entertainment centers. A second unit is scheduled to open inside the Seattle GameWorks next month, and the company is planning to open two World Sports Grilles next year as restaurants that would not be connected to a GameWorks outlet. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
In addition, the GameWorks and World Sports Grille concepts will be joined by a third Sega dining-and-entertainment brand designed specifically for families with young children. Scheduled for launch next year, the yet-to-be-named concept will compete with long-established brands like the 529-unit Chuck E. Cheese’s chain, based in Irving, Texas. SEUI’s new concept, however, will offer a more adult-friendly menu, said Ben Kitay, SEUI’s president and chief operating officer. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
The goal of all its strategic changes, said Kitay, is to better position the Sega brands as dining destinations, not just places to play games. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
“We determined our stake in casual dining was not sharp enough,” Kitay said. “We needed to elevate the dining experience, let more people know about it, and deliver unmatched quality and guest service.” —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
GameWorks, however, is competing with segment leaders such as Dallas-based Dave & Buster’s, where food and beverage sales account for more than 55 percent of revenues. The 48-unit Dave & Buster’s chain was bought last year by New York private-equity firm Wellspring Capital Management LLC for an estimated $375 million. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
For the fiscal year ended Feb. 4, Dave & Buster’s reported revenues of $510.2 million, up 10.1 percent for the year, despite the closure of a unit in Minneapolis because of lease problems. Food and beverage sales systemwide were up 11.9 percent over the previous year, compared with a 7.9-percent year-over-year increase in amusement revenue. Same-store sales for the year rose 4.1 percent. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
GameWorks, on the other hand, wasn’t originally designed as a restaurant. The concept was first developed as a video game arcade in Seattle 10 years ago, with Sega Corp. as a founding partner, along with Steven Spielberg, his company DreamWorks SKG and Universal Studios. Various foodservice aspects were included later under such names as GameWorks Grill, Jax Grill, Hopscotch Grill and the Bowling Bar. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
The chain, however, fell into Chapter 11 bankruptcy in 2004. Sega Corp. spent roughly $10 million to buy out the other partners in 2005 with the goal of using GameWorks as a platform on which to build other dining-and-entertainment concepts. Sega has several such operations in Asia. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
However, even before the buyout, GameWorks had begun introducing a new concept called Arena Sports Bar & Grill to larger units with the goal of building food and beverage sales. Five GameWorks locations now include the Arena concept. Those units tend to have foodservice sales that account for about 50 percent of total volumes, while foodservice accounts for only about 25 percent of sales in older units, Kitay said. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
“People tend to think of us as a place for games, not where to go for lunch or dinner,” he said, noting that most business is generated on weekends. “In order to get business in on Monday through Thursday, we have got to be competitive in the casual-dining arena.” —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
Like Arena Sports Bar & Grill, World Sports Grille is more focused on food and beverages. It features a global menu, with such dishes as Eastern-spice grilled shrimp, spicy Thai fish cakes and Szechuan chicken wings, said Clint Manny, GameWorks’ senior vice president of marketing. Per-person dining tabs are expected to average about $12.75, slightly higher than the $12 average at GameWorks now. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
Beers from around the world, served in glassware appropriate to the type of beer, will be the centerpiece of the full bar. The Grilles also will have state-of-the-art viewing media to show not only the expected football, baseball, basketball and hockey, but also satellite feeds of World Cup soccer, cricket and other international sports many fans can’t watch at home. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
Next year, World Sports Grille units that aren’t based in GameWorks are scheduled to open in Tucson, Ariz., and Harrisburg, Pa. The 15,000-square-foot restaurants would have about 5,000 square feet dedicated to games, such as billiards and darts. By comparison, GameWorks units are typically about 32,000 square feet with three-quarters of the space dedicated to gaming. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
An existing GameWorks unit in Tucson, one of three that are simply arcades with no foodservice, will likely close when the World Sports Grille opens there, Kitay said. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
The new family-entertainment concept that SEUI is developing is expected to debut somewhere in the Southeast or Southwest in early 2008. The goal is to appeal to both children and their parents. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
“Chuck E. Cheese’s is not an adult experience,” said Kitay, who declined to offer details of the new concept. “We think there’s a niche to develop there.” —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
Company growth will focus on World Sports Grille and the new family concept, Kitay noted. There are no plans to open more GameWorks. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
“We think the brand hurts us a bit because it has ‘game’ in the name,” Kitay said. “People think it’s a place to buy games. We have some equity on that name, and we’re going to keep it for a while. But down the road we may see the need for some rebranding and repositioning.” —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
GameWorks has never really made money, Kitay added. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
“Two years ago, the company was losing about $10 million,” he said. However, though he wouldn’t release exact figures, he said the recent fiscal year ended in March showed a positive bottom line. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit
“I see that trend continuing,” he said. —With the parental support of Japanese-based video game giant Sega Corp., the struggling 19-unit