Where locking up your customers can lead to 800% revenue growth in one year
You and 10 other people are locked in a room. Words, numbers and pictures are scrawled on the walls, objects scattered. A disembodied voice announces there are 60 minutes remaining to escape. A frenzy sets in as people ransack the room, looking for clues leading to the key that will open the door that just locked behind you. Before you know it, the voice blares out: 10 minutes have passed
Part game, part theater, part team-building exercise, escape rooms are taking off around the world. And the growth has been explosive. The number of permanent rooms world-wide has gone from zero at the outset of 2010 to at least 2,800 today, according to MarketWatch calculations based on rooms registered to escape-room directories.
Nate Martin, co-founder and CEO of Puzzle Break, the first escape-room facility to open in the Pacific Northwest, invested $7,000 of his own money in 2013 to get the business off the ground. He recouped his initial investment within a month. Since then, the business has been profitable every month and, conservatively, is on track to gross over $600,000 in 2015. “Some months are record-breakingly fantastic,” he says. “Some are only very good.”
1. Door: You’re locked inside with about 10 other people and have to escape. Of course, in an emergency situation, players can get out without a key. Twenty-two percent of rooms say they don’t actually lock the door.
2. Clock: You generally have one hour to get out, and puzzles get more complex as the time ticks on. Some game operators play with the time – turning the last 10 minutes into 12 minutes, or the last minute into 90 seconds, to create the illusion of “almost escaping.”
3. Table, pens, pencils: You’ll need this to solve the puzzles. Some puzzles are presented individually, where each puzzle feeds into a larger meta-puzzle. Other puzzles are presented sequentially, where one puzzle leads to another puzzle.
4. Table (underneath): There’s probably a clue somewhere around this table. Most rooms require players to search for clues and puzzles before actually solving the puzzles.
5. Music: Music adds a level of suspense — and it likely gets louder and eerier as the timer counts down. Audio tracks also help the room match a certain theme, such as “Haunted House” or “Wild West.”
6. Person in lab coat: A staff member may be there for advice. They may be an actual clue. Who knows? Fifty-five percent of the staff at escape rooms are male, in contrast with the general gaming industry, which is known for having heavily male-dominated staffs. Female staff members may help make female players more welcome.
7. CCTV: Some rooms may film players to keep track of game play. Other operators of rooms targeted at corporate events say HR and managers sometimes review the footage as part of their team debrief – and sometimes even as a way to pick out natural leaders when considering promotions.
8. Lab coats: Check the pockets for clues, tools, and anything you can use to get out. Half of game designers say they use false clues and trails in the room to confound the players.
9. Lockbox: You’ll need to figure out how to open this box — the key is likely inside. The average success rate for rooms worldwide is 41%, but they vary widely across rooms. SCRAP’s most difficult room in the U.S., “Escape from the Mysterious Room,” had just a 2% success rate.
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In Dallas, Andrew McJannett-Smith and his wife, Traci, run Escape Expert, which opened in February 2015. “We started with negative income to now bringing in $70,000 a month,” he says.
The concept was born in Japan, spread through Asia, then arrived in the U.S. in 2012. As of Friday, the site Escape Room Directory listed 367 rooms at 138 facilities in the U.S., with more registering on that site every week. Business appears to be booming: At popular locations, tickets sell out weeks in advance.
And it is now making its way into mainstream entertainment: The studios behind Tom Cruise’s coming “Mission: Impossible” film erected escape rooms at AMC Theaters AMC, +1.77% this month for fans to “become IMF agents.” Free tickets for those rooms sold out in New York, San Francisco and Los Angeles in less than 24 hours. Later this month on July 25, the Science Channel is debuting an escape-room-themed game show called “Race to Escape.”
But many room owners and game enthusiasts are skeptical that the explosive growth can continue. And finding the key to success in this weird, new world may be the trickiest puzzle of all.
In most escape rooms, clues lead to a physical key. But the story of why you’re in the room — you’re trapped in a mysterious lab! You’re seeking lost treasure! You’re stuck in a New York City–sized apartment! — and the way in which action unfolds differs by room and location.… 20 minutes have passed, and, at this point, you’re likely knee-deep in puzzles, exchanging adrenaline-fueled shrieks with your room compatriots …
“People are looking for a new type of experience,” says Doc Preuss, a producer forReal Escape Games, which has rooms in San Francisco, New York and, soon, Los Angeles. It is run by SCRAP Entertainment Inc., which opened the first escape-game event in Japan in 2007. “It’s cerebral, [and] it’s exciting. The way we design [the games, there are these emotional highs. It’s like a roller coaster. It’s addicting.”
Most games cost $25 to $30 per person for a one-hour game, and typically allow 10 to 12 players at a time. For owners, the chief costs are payroll and rent, plus the one-time expense of building the room out. Some rooms comprise little more than a table with pens and paper. Others involve elaborate sets and technical wizardry. For instance, The Exit Game in Los Angeles has players navigating a laser room.
SCRAP is known for keeping costs low, eschewing traditional marketing costs in favor of organic growth and renting the smallest room possible to ensure tickets sell out. “They feel they have failed if they are not 100% booked out,” says Dan Egnor, an escape-game enthusiast and creator of the Escape Room Directory.
So far, the strategy appears to be paying off: SCRAP says revenues grew by 800% in its first year in the U.S. — a staggering figure even in light of today’s fast growth. The company has been profitable and seen revenue grow every year since then.
SCRAP now has more than 25 rooms across 12 cities in Japan and is opening its second San Francisco location with Escape From the Jail on Polk Street in August.
“They were the only game in town for years,” says Egnor. “Right now, a lot of local people equate the escape room with SCRAP.”
Source: Market Watch
