When you think about it, the primary difference between a Dave & Buster’s and a Las Vegas casino is that patrons of Dave & Buster’s walk out with headphones, sweatshirts or playing cards instead of cash.
And Dave & Buster’s sees a need to balance gaming with food and beverage revenues.
So it kind of made sense that Dave & Buster’s CEO Stephen King would have thoughts running parallel to the gaming industry to share with G2E patrons, which he did Wednesday morning during a discussion with business expert Carol Roth.
And many argue that Dave and Buster’s serves as a model for the integrated resort experience where guests eat, drink and play.
“They’re all games of skill,” King joked after a questioner warmly said that Dave & Buster’s is ‘a casino for 15-year-olds.’
King took over the company in 2006 after spending 22 years with Carlson Restaurants Worldwide, the parent of TGI Friday’s.
As Roth said in the opening, entertainment is the epicenter of driving new revenue streams.
Relevant thoughts included:
Quick fixes: “There were a number of things I saw on the food and beverage side that were no-brainers, such as kitchen display systems, theoretical food costs and other mundane things,” King said.
Money, content and pricing: “There were three things that were absolutely clear to me. 1.) We had people lining up to give us their money to get the card; we should cut down the time people have to wait to give us their money. You want that as fast as possible. So we employed kiosks. 2.) Content was really important, so we continued to buy content. 3.) We looked at the rate card – the top buyer, if you will was $25 and it was second most popular and $20 was most popular. We figured, another side to that bell curve.” So the company offered $35 and $50 cards. Those moves bought him some time and improved EBITDA.
Entryway is vital: King said he walked into stores and saw maybe 12 billiard tables right away. “I thought that was low-energy, and also low revenue – a bad combination – so we changed everything,” he said. They tried to make it look more like a Vegas sports book. “Changing that really transformed the brand and made us relevant to our target audience,” he said.
Balance: Dave & Buster’s views the integrated experiences as being critical to the success of the brand. “Across time there have been a lot of straight up arcades that have really failed,” he said. Customers now spend about half the time on the gaming side, and the other half on food and beverage or watching games. About 56 percent of revenues is on the amusement side, he said.
“That’s been a pretty conscious shift, to say we’re going to invest in entertainment,” he said. “The shift when we started from ‘We’re a restaurant, with some other stuff’ to ‘We’re really an entertainment brand that has great food and beverages.’”
Eyeing what’s next: King said if you walk around the G2E floor you see there are all kinds of new products. “New, new, new is what people want to see,” he said.
Unique content: Patrons want attractions they can’t experience at home. “As we think about content. what has to flash through your mind is ‘I think that’s interesting and I couldn’t do that in my living room,’” he said.
The next generation is more chill: King points to the research differential that suggests Gen Z is less outgoing and a little more chill than some of their older counterparts. “There’s a whole new element of entertainment… bars and restaurants with a different chill activity, such as bocce or cornhole, and some are garnering real success,” he said. “It will be interesting to see if we can bring that into the Dave & Buster’s brand.”
And they like proprietary content: Dave & Buster’s content includes games that everybody can buy, items that they can get a 30- to 60-day exclusive on, and proprietary games that will be at Dave & Buster’s forever, such as Star Trek and Rock ‘em Sock ‘em Robots. “I really think the future for us will be in the proprietary exclusive games, rather than what everybody can buy,” he said.
Advice: “I think what I got out of D&B was to shoot bigger,” he said. “Shoot big, and skate to where you think the puck is going.”
