Family entertainment centers going to the pits

For decades, the neighborhood strip mall has likely been home to a family entertainment center.

These are where families bring rambunctious children for two hours of indoor amusement, usually involving inflatable-ball pits, plastic climbing structures and party areas. The more popular sites include the now-defunct Discovery Zone, Sky Zone and the ubiquitous Chuck E. Cheese’s.

The family entertainment center first served as a quick playtime antidote for under-stimulated latchkey millennials living in the suburbs. But the trend peaked in the late 1990s and early 2000s, as helicopter parents shoved their children into these facilities because they feared giving the kids any quiet time. Make the kid run around, feed him sugar, then wonder why he’s diagnosed with attention deficit disorder a year later.

In recent years, however, development in the family-entertainment-center industry has slowed. Chuck E. Cheese’s, the industry leader, opened 200 stores between 2000 and 2005. But it opened only 77 from 2005 to 2014, before its parent company was purchased by Apollo Global Management.

So how are Chuck E. Cheese’s and other family entertainment centers attempting to stay afloat in a modern children’s consumer market dominated by handheld technology and immersive video games?

By advertising to their millennial parents — those who used to visit as kids.

Chuck E. Cheese’s is adding more “adventurous” menu items, like whole-wheat wraps and macaroni-and-cheese pizza. It also may add edamame to its salad bar. And recently, the chain announced it was enhancing its alcohol options with craft beer and additional wine varieties. It’s also hoping to draw parents by featuring games that all generations can play, together.

The strategy is nothing new for archaic business models of the 1980s and 1990s. Only now are those entrepreneurs starting to understand that millennials comprise the largest target demographic in America.