Driving Engagement: F1 Arcade Opens First US-Based Venue 🏎
Competitive socialization has become one of the fastest growing trends in global hospitality over the last 10 years and Formula 1 is cashing in.
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Formula One recently announced plans to open a US-based F1 Arcade at Boston Seaport in early '24. The venue, the first of more than 20 expected across the country over the next half decade, will combine an immersive gameplay experience with premium food and drink offerings in a social setting.
Competitive socialization has become one of the fastest growing trends in global hospitality over the last 10 years.
"When Bounce launched in 2012, it was the first time [a sport that was not a pure leisure game like bowling or pool] was brought to life,” Adam Breeden (CEO and founder, F1 Arcade) said. "Soon after, we saw a whole array of new concepts and brands come to market.
Breeden has been a pioneer in the space having also co-founded All Star Lanes (bowling), Puttshack (golf), Flight Club (darts) and Hijingo (bingo). F1 Arcade is a joint-venture between his company, Kindred Concepts, and the global motorsports property.
As more and more of these concepts have emerged, those competing for market share have been forced to find new and/or additional ways to standout–and pro sports IP is an effective way to do it.
F1 Arcade has developed a "completely unique and bespoke [simulator based] racing experience for people of all levels,” Breeden said.
But it is the Formula One IP that he sees as the greatest differentiator and the likely driver of its long-term success (pun intended).
“The F1 brand takes the concept to a whole other level with 700 million fans worldwide,” Breeden said.
Toca Football, a technology enabled soccer experience company and operator of indoor training centers, has come to a similar conclusion. It sold an equity stake to Major League Soccer back in October '22. MLS will host various activities at Toca Social venues as part of that deal. There will also be Toca-branded fan engagement activations at select MLS stadiums.
While competitive socialization venues benefit from their association with pro sports properties, rights owners like F1 and MLS have plenty of upside in these deals too.
“We are seeing an increasing number of rights holders commercializing their intellectual property rights with [these types of] venues," Rob Mills (CEO,Turnstile) said. "This trend [has been] further exaggerated by venues currently being developed in the Middle East" (see: Ferrari World Abu Dhabi or Real Madrid’s partnership with Dubai Parks and Resorts).
Rights owners are often able to monetize venue deals beyond the sale of their IP too.
“Typically, 60% to 80% of these sorts of venue deals are composed of IP rights, meaning that rights holders can commercialize finite assets such as signage and hospitality with more traditional partners,” Mills said.
Of course, the benefits to these licensing deals are not limited to the top line. Competitive social experiences like F1 Arcade can be an effective way for a rights owner to engage with existing fans. And given that these venues tend to appeal to 18–35-year-olds, they can also help said rights owner to reach new and/or casual fans.
“Just like Netflix’s Drive to Survive has encouraged millions of new fans into the sport, we will have a similar effect as we get to scale,” Breeden said.
While that remains to be seen, F1 Arcade expects to have 12 million fans passing through its doors within five years. Its flagship location will draw 350,000 people this year. The company plans to open 36 venues over the next half decade.
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