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GAMES & REDEMPTION

The Circleof

Profitability

George McAuliffe is a 30+ year family entertainment center operator and president of Pinnacle Entertainment Advisors by Redemption Plus, an industry consulting firm. He has operated public space entertainment centers from 2,000 to 150,000 square feet

with a wide variety of entertainment related businesses, including redemption and merchandise games since 1983. Pinnacle’s consulting practice has served new and established family and location based entertainment operators, with clients as diverse as Wal-Mart, Disney, ESPN Zone, Brunswick, Shakey’s

Pizza, and many independent owners and investor groups. Prior to Pinnacle, he served as the chief executive of Edison Brothers Entertainment, which was the third largest chain of family entertainment centers in its time, managing over 8,000 games, rides, and attractions in three countries. He is a founding director, past president, and Lifetime Member of IALEI,

the International Association of the Leisure and Entertainment Industries, recently merged with IAAPA.

Phone: 913-563-4370Email: gmcauliffe@redemptionplus.comwww.grouppinnacle.com

VIDEO →

REDEMPTION (MERCHANDISE GAMES)

parallelsparallels

ARCADES ARCADES →→

FECFEC’’SS

So…What Business Are We Really In?

05

10152025303540

Billions of Dollars

Coin OpGamesConsumerGames

Family orFamily or Out of HomeOut of Home

(OHE)(OHE) EntertainmentEntertainment

FacilitiesFacilities

ArcadesArcades

RestaurantsRestaurants

Go Kart Go Kart TracksTracks

Bowling Bowling CentersCenters

Mini GolfMini Golf

Amusement Amusement ParksParks

BoardwalksBoardwalksParty & Party &

Group SalesGroup Sales

Laser TagLaser Tag

CarnivalsCarnivals

INDIRECT REVENUE ENHANCED

•Increased Open Play

•Party and Group Sales

•Food & Beverage Sales

The Circleof

Profitability

Copyright 2008 Pinnacle Entertainment Group, Inc. All Rights Reserved

Definition of ‘Payout’

Ticket Value

COST MARK UP SHELF PRICE

TICKET VALUE

$1.00 1 100 TICKETS 0.01

$1.00 2 200 TICKETS 0.005

COST OF SALES COST OF SALES oror MARKETINGMARKETING??????

The Incentive BusinessThe Incentive Business

Promote Your Redemption Counter Within your Game Room

RemoteRemote--Merchandise DisplayMerchandise Display

Debit Card Systems

Controlling CashManaging Sales

Managing Game PayoutsComprehensive Reporting

Group Sales & PartiesCustomer Loyalty & Marketing

Redemption POS

Reduce wait time

Manage redemption inventory/shrinkage

Real time reports

Digital Packing Lists

Guests store redemption tickets on their card account

Cordless scanners

Redemption POSRedemption POS

George Smith19

George Smith has been in the entertainment/amusement business for 30 years,in

all facets of FEC facilities operation and management. He is President of Family Entertainment Group (FEG) which operates games, redemption, and FEC Attractions in 10 states. Its client list includes Kalahari Resorts, CoCo

Resorts, CiCi’s

Pizzas, Muvico

Theatres, AMF Bowling Centers, Bowl New England Centers and many more. FEG operates on a national and international scale and provides operating, consulting and design services. A recognized leader in the amusement and entertainment fields most manufacturers and distributors use FEG

as a test bed for new products and releases. FEG has seen double digit growth in each year it has operated. Most importantly FEG has witnessed it largest revenue and operating growth in 2008 and 2009 at a time where most companies are contracting.Mr. Smith is also Chief Operating Officer of IVC-Interactive Vending Corporation with new and patented machines and processes for the retail market. He is also involved with Animaland

Inc. a leader in interactive plush stuffing markets. Previously, Mr. Smith was COO Paradigm Entertainment Inc and Vice President of Business Development for

Namco Cybertainment

Inc., the largest operator of amusement facilities in the United States. He oversaw the expansion of new business development from inception to operation in over 1,100 facilities including close operating relationships with Disney, McDonalds, AMC theatres, MGM Casinos and over 50 Fortune 500 companies. Operations covered 48 states and Puerto Rico and

Mr. Smith oversaw the growth of the business into the largest subsidiary for Namco. Mr. Smith is also the past President of IALEI the International Association for Leisure and Entertainment Industries and during his term made alliances with

the Amusement and Music Operators of America (A.M.O.A.) and American Amusement Manufacturers Association (A.A.M.A.) culminating in the joint purchase of the FunExpo

amusement show. Mr. Smith was secretary for many years of the joint operating association L.E.T.S. (Leisure and Entertainment Trade Shows).

GAME CATEGORIES

VIDEO GAMES

NOVELTIES -

Air Hockey, Boxers, Darts, Kiddie

Rides

REDEMPTION GAMES -

Games that award tickets or points as a reward for skillful play

MERCHANDISERS -

Games that award a prize directly and immediately for skillful play

21

VIDEO GAMES

DRIVERS

MUSIC

TWISTED

SEGA OUTRUN 2P

H2OVERDRIVE

GUITAR HERO ARCADE DANCE DANCE

REVOLUTION

22

VIDEO GAMES

Big Buck Hunter Safari

Ghost Squad

Air HockeyKiddie

Ride

Typhoon

Boxer

23

REDEMPTION

1)

Video With Payout (Super Trivia, Derby Owners Club, Deal/No Deal)

2)

Fast Coin (Smokin

Token Extreme, Cyclone)3)

Pusher or Coin Fall (Elvis, Pacman, Monopoly)

4)

Interactive or Play games (Skeeball, Basketball, Two Minute Drill)

5)

Novelty (Big Bass Wheel, Red Hot, Slam A Winner)

24

REDEMPTIONGAMES

Interactive Novelty

Fast

Coin

Video with Payout

Pusher

25

MERCHANDISERS

26

Tickets, Tokens, Debit Cards

TICKETS

Paper, Plastic or Electronic

Size, Color, Print

Roll or Flat

Installation

TOKENS

Size, Color, Security

Cash

DEBIT CARDS

Sacoa

/ Playcard

AG

Embed

Intercard

Core Cashless

Ideal

27

28

29

30

REDEMPTION MERCHANDISE

Karyn

Gitler

is the proud owner of Kreative

sourcinG

–

her new company that designs merchandise and sources it direct from overseas! She has finally taken the big step to control her own

destiny and be able to spend more time on what is most important to her -

family! Karyn

is the mom of 4 children –

2 sets of twins! She has 19 years of experience in the FEC/CEC industry with the last being 13 years as the Director of Merchandise for CEC Entertainment, dba. Chuck E. Cheese’s.

Best Source of Information…

Is sitting right NEXT TO YOU

–Or you can find it on the Internet!

Safety Update

Ask your vendors for safety tests on ANYTHING you purchase –

read them!

Keep a copy of the report on location

A toy does not have to be a “toy”

–

it just has to look like one!

Know the approved lead levels in your state

Understand the phthalate laws

Safety Update Understand About…

Batteries

Jewelry

Necklaces –

break away

Bracelets –

cannot fit over head

Earrings –

posts should not be sharp

Jewels should not fall or break off easily

Small Parts –

Pull, drop, break or bite a piece off

Choke Tube

Who is Your Redemption Merchandise Target?

Are you an FEC, CEC, Game Room?

Is your guest…

A “Regular”

They will come back and save up for larger, better prizes

Value is EXTREMELY important

Transient

Most prizes should be able to be won on a single visit

Make A Merchandise “Plan”

Take a Large Piece of Paper and DRAW IT!

Write every category you need to service your guest

Toddler, Child, Teen, Parent & Grandparent!

Boy & Girl

Trendy & Basic

Toys & Candy

Ticket Levels –

high & low

Cheap vs. Expensive –

in look as well as cost!

Brand Name & Generic

Bring in The Hottest New Pieces

Have the newest Webkin

or ZhuZhu

Know the hottest sports team in your town

Learn the new technology the kids are using – b 4 u become a caveman –

lol

–

ok, btw!

Don’t worry about your margin –

it is PR!

What is Hot?

Not your average Superhero…

IronmanNoise Reduction

Headphones

Zhu Zhu PetCaptain

America

Thor

Wii – DS – PS3Video Games

R/C Mini UFO

BakuganMindflex

Game

iPod

MP3 Player

LIV Dolls

Love

what you do –

Life

is too short not to!

thank you!Karyn

GitlerKreative

soucinGkaryn@Kreativesourcing.com

847.383.6037