What can Chuck E. Cheese teach us about NFTs?

What can the rise and fall of the Chuck E. Cheese empire teach us about non-fungible tokens (NFTs)?

What can Chuck E. Cheese teach us about NFTs?

Nothing flashes Millennials back to childhood nostalgia quite like the distinct aroma of greasy cheese pizza, plastic ball pits and neon-lit video games within the world of Chuck E Cheese.

Chuck E. Cheese is an American family entertainment center and restaurant pizza chain founded in 1977 by Atari co-founder Nolan Bushnell. Bushnell has been inducted into the Video Game Hall of Fame and the Consumer Electronics Association Hall of Fame.

As we enter Web 3.0, brands have the unique opportunity to leverage non-fungible tokens (NFTs) in similar ways Chuck E. Cheese used their iconic gold tokens to create amazing worlds for kids.

The national family restaurant chain legacy is also a master class in branding and entertainment. The children’s play center, separate from the restaurant, is its own universe, and within that universe, exists a legitimate currency. If you want to play and immerse yourself in their world, you have to buy their coins. Outside this world, the coins have very little utility.

The play rooms featured over 75 games and a heaven of prizes on display to allure kids to compete for tickets. The revenue event for Chuck E. Cheese occurs when you walk in the door at the exchange machines. If you want to do anything, or win anything, you had to buy Chuck E Cheese tokens. Here's a few takeaways from the Chuck E. Cheese rise and fall.

On December 30, 2020, Chuck E. Cheese emerged from Chapter 11 protection.

1. Create your own currency

If your world has perceived value to users, then, just like any other economy in the world, it can have value. But there needs to be a means of tracking and exchanging the items efficiently. Video game designers like EA Sports realize the importance of in-game currency. In FIFA Ultimate Team you can earn or buy tokens and trade players using digital currencies, and there are many other examples in e-sports.

2. Leverage assets with intrinsic value

Chuck E. Cheese only accepts U.S. Dollars, and their revenue is reported in dollars. But their closed-loop monetary system within its U.S. storefronts operates with similar characteristics as digital currencies. Most fungible tokens and NFTs in the future will have a physical "twin" that exists in the real world.

3. Build an engaging environment

Let’s say a company wants to create an NFT marketplace for digital sports cards. While that’s specific and interesting, settling on one or two sports could get stale after some time. When kids walk into Chuck E. Cheese, there are so many dynamic stimuli to keep them excited and engaged, and it's different every trip. Chuck E Cheese relied on simplicity and seamless UX within their play rooms, and this micro-variety was a contributing factor to their success.

4. Gamify the best outcomes

The anticipation of opening an NBA Top Shot pack is fun, but sharing this event with friends on a live stream is a lot more exciting. Games are more fun when they are public. Every game at Chuck E. Cheese was a public stage, making it public when people won prizes. Always default to transparency.

5. Keep users energized

Each Chuck E. Cheese location featured a wide array of arcade games, amusement rides and animatronic stage shows, but more importantly, they served pizza, soft drinks and other food items at affordable prices. No one wants to play games on an empty stomach and low gas tank... and pizza and sugar usually did the trick. In the metaverse, brands can energize their fan base in others ways—like memes, podcast episodes, blog articles, TV shows, charity events, giveaways, and more.

After filing for Chapter 11 bankruptcy in June 2020, Chuck E. Cheese parent company CEC Entertainment announced on December 30 that the company emerged from Chapter 11 protection with $705 million of debt obligations paid off under new ownership and new leadership. The franchise has reopened since the pandemic.

Pizza business aside, the Chuck E. Cheese model teaches us how to build a world, make tokens that are cheap and easy to exchange, and make the tokens fun, engaging and a little bit spontaneous. And always work to keep your community energized.

Who would have guessed the mecca of greasy pizza, ball pits and arcade games would teach us so much about the new world of NFTs?