Chuck E Cheeses Agrees To a $950 Million Buyout Deal

arcadehero January 16, 2014 16
Chuck E Cheeses Agrees To a $950 Million Buyout Deal

(Above: Chuck in happier times)

Interesting news among locations lately – while chains like Dave & Busters and Round 1 USA expand, a more famous arcade chain looks to be in some trouble. Chuck E Cheeses is the largest chain of arcade/FEC entertainment in the world, sporting nearly 600 locations, with a near total majority most of those being found in the United States. I’ve seen more advertisements from them than anyone else and while they have been trying to re-target their brand to consumers, such as with a mascot redesign and neat smartphone AR app, it hasn’t been enough to turn things around as a whole. According to report via The AP, CEC has agreed to a buyout deal for almost $1 billion to Apollo Global Management, which bought up Hostess Inc. last year when that company went under.

So what does this all mean? In part it’s too early to tell and some things might still happen to change the situation. The principal factor is that CEC cannot continue doing the same thing that they have been doing. It certainly does not mean that all 580+ locations are going to close. As we saw with the buyer in the Hostess situation, Twinkies were saved from total doom and they are back on the shelves again; also recall that when the Gameworks chain ran into trouble they also came out of it with some locations just going independent.

I haven’t been to a CEC in a while, last time was about two years ago when I took my kids there to see how it had changed since I had last visited it (which was once back in the late 80s or early 90s, I have very vague memories of that visit). One thing that should be noted in any discussion about the chain is that despite the name, the locations are not exactly carbon copies of each other with the same game selection, floor layout, employees, managers, etc. For my visit it was ok and the kids had fun but I find it difficult for ticket redemption games to hold my interest for very long. That particular CEC had a mix of 98% redemption, 2% video so there wasn’t a whole lot to keep non-redemption fans entertained for long. The food, while it didn’t make me sick wasn’t notable. In fact in a discussion I was having with someone on Facebook about this news they used the term “cardboard” to describe the pizza. That’s not a term you want to be said when talking about your food; again I have no idea if their food is the same across the board but I have not heard anyone praise CEC’s food, which is supposed to be one of the reasons they are in business. I would think that a primary goal should be to totally revamp their food aspect as some restaurant chains have done.  Also it’s hard to gauge how negative PR such as constant parent fights have on a brand. I am not sure what locations have done to curb that problem, which is one you don’t really hear often from other arcade/family entertainment venues.

In your opinion, what should Chuck E Cheese do to turn things around?


  1. Sam January 16, 2014 at 12:57 pm - Reply

    The CEC where we test some of our games recently changed their pizza. I remember the manager telling me about getting a new oven along with a new pizza recipe. He wanted us to try it once it was up and running but I never did have a chance to try it out. So it looks like they are aware of the “quality” of their food.

    • arcadehero January 16, 2014 at 1:21 pm - Reply

      Certainly – in comments I’m seeing on FB so far about the story (not on the AH FB page but another game-related page) people are harping on the food first and the heavy reliance on ticket redemption as the culprits. I’ve been meaning to go to an Incredible Pizza here to see how they differ in food quality but one thing is certain, beer as a food item hasn’t been the savior that CEC might have been looking for.

      • SEC January 22, 2014 at 12:18 pm - Reply

        Wrote an OP-ED on the situation two years ago.

  2. Shanzenos January 17, 2014 at 5:40 am - Reply

    I recall going there in 09 or 08 to much of the same effect, if not worse. However back in the 90’s and 80’s it -was- an amazing arcade from what I recall. Always sad to see something like that fall.

  3. chaos January 18, 2014 at 2:00 am - Reply

    I feel that their pricing model for games probably needs to restructured. All of them charge only 1 token per game. I’ve seen deluxe simulators like the Initial D Cycraft (moving cabinet) for only 1 token! CEC always has deals like $40 for a large pizza, 4 sodas and 100 tokens. With deals like that and the 1 token per game, I can’t see how they track the earning per game to determine

    • chaos January 18, 2014 at 2:01 am - Reply

      if they break even or not.

  4. the7k January 18, 2014 at 8:16 pm - Reply

    Back in 2006-ish, I went there constantly because they were the only place in my state that had a King of Fighters XI machine. I played on it enough to see all the endings for every team of characters.

    Once they got rid of that machine, though, I had little reason to go back. I still checked it out every now and then, but all they had after that was Stern’s newer pinball machines.

    As for the food – I never tasted it, but you know how you can smell something that is so strong you can almost taste it? Yeah – that’s WHY I never tasted it. The smell was bad enough. It looked pretty bad too.

    • CD ageS January 18, 2014 at 10:37 pm - Reply

      A fighting game… at a CEC… in circa 2006!!!!???? In what state do you live in again?

      By the way. KOF XI is da shit 😀

      • the7k January 20, 2014 at 10:39 pm - Reply

        Florence, SC. Unfortunately, after KOFXI left, my city hasn’t seen a single fighter in our arcades.

        One of the arcades is even Mexican owned, and it doesn’t have a single Neo Geo. Sigh.

        • CD ageS January 21, 2014 at 2:27 pm -

          A Mexican owned arcade that doesn’t have a single Neo Geo!? Now i don’t even believe you lol!

          Have you spoke to the owners about maybe supporting the scene with a few fighters in your area?

        • arcadehero January 21, 2014 at 3:46 pm -

          I can believe it, that more arcades are not supporting those games as they are making less and less money. I have a NeoGeo with KOF2002 that I thought was supposed to do really well – this entire month so far it’s made a little over $50 (4-slot Neo with a soccer game, puzzle and a shmup too). For my busiest month ever (Dec 2013), it almost made $100 (woohoo I guess). But my SSFIVAE doesn’t fare much better. AE consistently makes less than Dariusburst or Rerave (two games that also aren’t exactly mainstream arcade these days) and its never been my #1 game again after the software was available on home consoles. Of course I don’t think that this is due to a lack of interest – its because there are no fresh games. A lot of the popular fighters are between 15-20 years old now, people just aren’t going to put that much money into a game after a certain point. And because the industry keeps the fighter genre locked into a death spiral (overprice every new game, release the kit charging more than you would for a dedicated cabinet, give it a month of timed exclusivity, complain that arcades aren’t interested in fighters; or just use the game as a prop at a small number of arcades for the “location test” to promote the console release; rinse repeat) I don’t think it’s going to change until someone decides to try selling them in a different, AKA reasonable, manner. The market doesn’t want the model they are using because it screws us over. So the model should change.

  5. CD ageS January 22, 2014 at 12:34 am - Reply

    @arcadehero: it was a half hearted joke when said I didn’t believe THAT particular establishment he mentioned didn’t house a Neo. The Neo Geo scene has quite a following among the latino community. There is a particular devotion for the KoF series in particular. As a matter of fact, some of the most renowned players in KoF 2002 come from Mexico. They seem to like that particular installement the most (and for good reason). I’m sorry to hear KoF 02 Neo 4 slot isn’t finding a crowd amongst your customers. Here in So Cal KoF 02 is fairly popular amoung other tried and true “old man fighters” like 3S, MvC2 and CvS2 as well as the new stuff of course. Fresh fighters have little to do with it. There is sitll interest in 15-20 year old fighters which is why people still play these gamez over GGPO, Supercade etc. Which bring me to… YES! People will indeed drop money on any of these fighters I’ve mentioned (and others) IF there is healthy competition and a scene to fuel that competitive spirit among a group in a paticular location. This doesn’t apply to every location of course BUT one can do their part and grow a scene in their area through tournaments, casual gatherings ans events to teach those with perhaps an interest for the genre. Fighters, any fighter, new,or old is centeralized in competition. No other genre in arcade culture wraps itself around the principle better (winner stays, loser pays). People enjoy competition. It’s in our nature 😉

  6. the7k January 22, 2014 at 2:27 am - Reply

    Have you tried Metal Slug in the Neo Geo? Metal Slug, Metal Slug X or Metal Slug 3? I’ve heard a lot of ops say those particular ones get TONS of quarters.

    Puzzle Bobble and Magical Drop are good ones too. If you wanna fighter that’ll likely do well, go with Garou.

    • arcadehero January 22, 2014 at 9:17 am - Reply

      I did but I got Metal Slug 6 last year and that is a standalone, so I just leave it to that. It gets played as much as the NG does currently.

      I have Magical Drop 2 in but it rarely gets played. In the past I had success with KOF98 but that cart went bad, everyone claimed they wanted something like 2002 so I got it but it gets played little. Some players complain they can’t do combos with one joystick but I check it and all the directions move just fine so I have no idea what they are on about.

      • the7k January 22, 2014 at 12:57 pm - Reply

        Yeah, unfortunately, even though I can’t tell much of a difference, a lot of people will ONLY play Magical Drop 3. I also have a MD2 and all I get are complaints when I bring it to conventions.

        Meanwhile another guy runs MD3 and has lines form for it. Sigh.

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