Dave & Buster’s Future: Virtual Reality and Faster Food
After getting stuck in a slump for the better part of a year, shares of Dave & Buster's Entertainment (NASDAQ:PLAY) have been showing signs of life once again. A slide in foot traffic persists but is slowing down, and new locations are performing well.
Operating costs remain elevated as D&B opens more stores, particularly in new markets. For example, Dave & Buster's debuted its first location in Utah last quarter. A total of 14 to 15 new stores will have opened by year's end, representing 13% to 14% unit growth. Eleven of these openings will still utilize D&B's large-square-footage format rather than the newer small-format footprint. Management said that its batch of new locations from 2017 -- which are not included in the comparable-store figures yet -- are performing well.
VR and better food is the way of the future
Operating expenses are also rising due to new developments in gaming and food. The company's first foray into the world of virtual reality (VR) occurred in the second quarter with the release of Jurassic World VR Expedition. Jenkins said the game is a big hit and helped with the sequential improvement in traffic and comp sales relative to the first quarter. D&B's second VR title will be released later this year. The goal is to build an extensive VR portfolio in the coming years, with a focus on proprietary content.
The next VR title and two other non-VR marquee games are in the works, but management isn't ready to release any names. The initial success with Jurassic World was enough to go ahead with a pipeline of development to keep D&B's arcades cutting edge. At about $5 per play on Jurassic World, the new game is crowding out spending on some older arcade titles, but it's still driving a net gain in revenue.
For example, the company will use a room in a D&B store in Dallas to test a new food truck-style experience called TNT Tacos. Since many guests are all about gaming and don't want the casual dining experience, the hope is that gaming outings will be paired with a quick bite to eat, helping to offset the slide in foot traffic.
See the full story here: https://www.fool.com/investing/2018/09/17/dave-busters-future-virtual-reality-faster-food.aspx
CEO Brian Jenkins, who recently assumed his post from longtime leader Steve King, called the midquarter addition of “Jurassic World VR Expedition” “the biggest game launch in our history.”
And another story here: https://www.restaurantbusinessonline.com/financing/virtual-reality-no-escape-dave-busters