GameWorks plexible

Sega-U venture entertains theater opportunity

An unexpected player has emerged to seize a perceived opportunity in the struggling movie exhibition market.

Sega GameWorks, an entertainment center partnership between Sega Enterprises and Universal Studios, is building a 14-screen theater with 2,800 seats in Oklahoma City as part of an entertainment complex that will include a 200-seat restaurant, two bars, arcade games and a bowling alley.

GameWorks also is in discussions with two exhibs in the Midwest about downsizing movie multiplexes that have too many screens and replacing some of the screens with GameWorks centers.

GameWorks has continually redefined itself and its target customer since it launched with Steven Spielberg as an enthusiastic consultant in 1997. In the past year, the company, with 15 locations, has shifted its focus away from videogames targeted at kids to modular entertainment aimed at young adults. In addition to bars and restaurants, GameWorks is building its first bowling alley as part of a new center in Minneapolis to be opened in fall 2002.

GameWorks prexy-CEO Ron Bension said that with most centers positioned near movie theaters, it has become clear that they represent ideal venues for people to visit before or after a movie. Bension said the idea is to encourage 18- to 35-year-old moviegoers to use the centers as the most convenient place to eat as part of their evening out at the movies, as a place to have a drink afterward or even to hang out to play games if they arrive early to get a ticket for a movie.

“We wanted to create different modules of modular entertainment that are compatible and add a tremendous value,” he said.

Bension said he believes the temporarily named “GameWorks Cinema” complexes will be “category killers” against traditional “plainly wrapped” movie theaters like the ones around downtown Oklahoma City. “Moviegoing hasn’t changed much since the talkies,” he said. “We want to change that experience so that it is based on what the venue and the whole entertainment experience is like.”

GameWorks does not have the capital to buy a lot of movie theaters or to build new ones from scratch. A good deal with the landlord in Oklahoma City will allow GameWorks to build the 14-screen complex as the anchor tenant in the Bricktown Entertainment Center for about the same price as a traditional GameWorks center. Construction begins this fall for an opening late next year.

Although Bension envisions the company eventually owning and operating multiple theater sites, he said the best immediate opportunity will be in overbuilt movie complexes that present opportunities for GameWorks to create a new location.