This content was originally published in RePlay Magazine.
George McAuliffe was always at the forefront of the FEC business. In fact, he began writing a column in this magazine 30 years ago on the then-new sector of the trade. He and his son Howard, partners together at Pinnacle Entertainment Group, write columns for RePlay today (George with “Gameroom Guru” and Howard with “Now Trending”), Sharing their expertise and combined decades of experience with the industry.
For George, that experience started in 1979 with his late brother Tom McAuliffe, who at the time was COO of Time-Out Family Amusement Centers, one of the first mall arcade chains. George had just finished college and needed a job. The growing company was bringing an arcade to the Rye Town Hilton, a hotel in Rye, N.Y., and George was tapped to be its general manager.
“I was part of a great company that had a vision,” he said of Time-Out, where he worked his way up to regional manager. “I was fortunate to have the opportunity to manage the execution of the new ideas.” Time-Out was an early adopter of redemption in the early 1980s and cranes in the mid-1980s.
By the time SEGA purchased the company in 1987, George managed half of its stores. In 1989, he led the team that opened one of the first modern-day family entertainment centers in a 70,000-sq.-ft. shopping mall space.
In 1990, Time-Out was bought by the Edison Brother’s Stores, along with SpacePort Amusement Centers, to form Edison Brother’s Mall Entertainment (EBME). Edison also acquired Dave & Buster’s at that time. By 1995, McAuliffe was president of EBME which operated more than 8,000 cranes, video and redemption games, and other attractions in 135 locations over 38 states, Puerto Rico and Mexico.
Then in 1996, Time-Out was sold to Namco. “We had already moved our family to St. Louis from the East Coast and we didn’t want to uproot again,” he said. “I liked the idea of becoming an entrepreneur.”
So, the well-connected McAuliffe founded Pinnacle Entertainment Group, a boutique consulting firm, and Pinnacle Entertainment, an operating company. The family business started big, working with the likes of Disney and consulting on their DisneyQuest and ESPN Zone attractions. Shakey’s Pizza was another early consulting client, retaining Pinnacle to help them reinvent their entertainment component.
George’s wife Julie ran the administrative side of the business from its inception until 2012 and partnered in all the strategic decisions along the way. She still manages the accounting functions.
Howard also started on the new Pinnacle route at the outset, delivering the first cranes to the company’s Walmart locations. “In the beginning, I was in high school and we were setting up the route,” Howard recalled of the then-summer job. He said at the outset it was mostly a crane route with machines packing in the family’s garage and lots of time spent mixing plush in the living room.
Initially, the route had 12 Walmart stores. After just a month, George said, “We tripled the previous vendors’ sales. It was a result of taking our almost 20 years of experience in a professional arcade operating company and applying it to the route business.” At the six-month mark, they already had 50 Walmarts under contract.
“We already had one or two consulting clients – typically bigger companies,” George said. “The reason why we kept it just a few of the larger clients was because we had an operating business.”
The desire to expand the consulting side grew and in 2005, the operating company was sold to Coinstar (which is now National Entertainment Network, a Pinnacle client). Now, the company had 12-15 clients at a time and lots more projects to work on. In 2008, Pinnacle merged with Redemption Plus and in 2016, when Howard joined as a full partner, Pinnacle became independent again after a reverse merger.
After selling their operation, bowling became a big focus for the company – more specifically, consulting on turning traditional bowling centers into bowling entertainment centers.
“Some of the leaders in the bowling industry started to look into diversifying their offering as league sales went down,” Howard said, citing then-Bowl New England (now Spare Time Entertainment) as one of the companies they worked with to shift “Bowling Alleys” into “Bowling Entertainment Centers” or “BECs.” “That opened up a new avenue for the whole industry,” he said.
“We help clients understand the audience, how to appeal to that market and wrap that into an operating system that lets them hit the ground running and do well,” George said. Howard added, “One of our philosophies is that ‘if you think you know everything, you can’t learn anything.’ Our most successful projects are the result of collaboration with our clients and their teams.”
Over the years, Pinnacle has helped nearly 200 bowling entertainment clients, accounting for almost 50% of their business. They have been proud members of the Brunswick Business Alliance for 15 years and work closely with Brunswick’s customers to integrate the arcade and FEC attractions into their BECs.
Another big sector for the company is restaurant entertainment, for which they’ve done more than 100 projects. One of the most prominent is Pizza Ranch, which has worked with Pinnacle on their Fun Zone arcades.
“We believe the key to success is to integrate FECs into the existing business,” George explained. We worked on the first 15 Fun Zone additions at which point the franchisor established a team to support the Fun Zones. “At the moment, by number of locations, Pizza Ranch is the fastest-growing arcade chain in the country.” (The company’s end of 2022 target is 60 locations, and they’re at about 50 now.) We’re proud of being there at the beginning but love seeing the corporate team takes the business to new levels with arcade now a big part of the Pizza Ranch experience.
The theater industry is a growing example. “Just like bowling centers and pizza restaurants, theaters always had arcade games, but they never did it at the scale and with the understanding of integrating it into the greater business,” he said. “We expect growth in cinema entertainment centers will continue over the coming years.”
But these great experiences aren’t only built by the McAuliffes. “We couldn’t do it without our strategic partners,” Howard said, specifically mentioning Shaffer Distributing, Intercard, Rhode Island Novelty, Redemption Plus and Creative Works. “It takes a team to execute these projects. We manage it, coordinate, and tie the pieces together, but it only works because we have great partners and clients.”
Pinnacle is very data-oriented as well, George said: “We’re constantly examining the numbers.” More than 80 locations report sales information weekly to the firm.
Among the projects they’re working on now is a multi-attraction traditional FEC with a Native American tribe (the Three Affiliated Tribes of the Fort Berthold Reservation in North Dakota).
The 40,000-sq.-ft. facility will feature Brunswick’s Duckpin Social bowling, six holes of mini-golf, a laser tag arena by Creative Works and Delta Strike, a half-court basketball operation, eight movie-screening rooms with attached party rooms, sports simulators and a large arcade with a 6-player VEX Arena from Shaffer. There will also be an RCI ropes course over the arcade with a zipline, plus a full bar and restaurant.
A big recent project was the 10K arcade at JW Marriott Marco Island, which opened in 2019. They brought on Player One Amusement Group to operate the facility. Hotels are another sector that’s been changing Pinnacle’s business as of late in addition to cinema entertainment. Since 10K Alley opened, guest satisfaction at the hotel has gone up dramatically, George reported. Pinnacle is now working on its fifth “Hotel Resort Entertainment Center,” the Westin Maui in Hawaii, along with Family Entertainment Group, which will operate the entertainment center.
As their consulting business flourishes, Pinnacle is looking to return to operations once again. “We’ve been looking at it for the last year and a half,” Howard revealed. “At heart, I’m an operator. It will help us to be even better consultants.”