Chuck E. Cheese

Chuck E. Cheese Files for Bankruptcy After 43 Years of Business, but Who’s Surprised?

COVID-19 delivers a harsh blow to the popular restaurant and entertainment center, but is it the only reason for the establishment's failure?

As a kid, I spent many Saturday afternoons at my local Chuck E. Cheese, combing the visibly dirty floors for game tokens and plucking pizza slices from a table or two. Most kids at the time would readily accept a coveted birthday party invitation that included sheet cake, pizza and, of course, face time with the iconic mouse.

The joint provided a lawless jamboree for 8-year-olds to cheat the Skee-Ball machine or learn curse words in the jungle gym tubes. Regardless of how Chuck E. Cheese punctuated our childhoods, a recent filing for bankruptcy indicates that it might be time to say goodbye.

The company’s business model spliced the nuclear family into two distinct customer bases, the parent and the child, while ensuring both parties remained satisfied and engaged. This strategy rang true for the children at least, but “fun” for parents at such a venue was certainly relative.

While kids dominated the 10,000-square foot space populated by token-activated arcade games, parents would sit idly and nurse a lukewarm glass of Diet Coke or order a salad. Though outwardly unimpressive, it did what fast food playgrounds offered on a larger scale: Parents found a moment to relax while their kids ran wildly in an enclosed, safe space.

Hundreds of locations remained open throughout the 2010s, but shifting demand has left Chuck E. Cheese culturally irrelevant. Dave & Busters, a competitor that appeals to a more mature demographic, offers a larger venue and a more diversified food menu. The COVID-19 pandemic rubbed salt in that wound and, as a result, CEC Entertainment, Inc., the parent company of Chuck E. Cheese, filed for Chapter 11 bankruptcy.

This form of bankruptcy works to reshape the company and its financial assets without assuming a total loss. Essentially, it sutures the holdings so that monetary weight redistributes and the company can bounce back successfully. However, given the context, it is hard to believe that the business will ever recover.

Technology killed the mouse

Chuck E. Cheese dominated the frontier of birthday party planning and entertainment meals in the early 2000s, but technology transformed the industry into a dated platform. At one point, parents shelled out a twenty in exchange for a handful of game tokens, but this willingness likely shifted when free smartphone applications and console gaming began to saturate the market. These new activities would impact not only how children wanted to spend their time, but also change where they chose to do these activities.

Chuck E. Cheese famously remarks that their venue is where “a kid can be a kid,” but an influx in social media usage and smartphone users complicates such a phrase. How does one interpret childhood these days? Only a fraction of children below the age of 12 owned a cellphone 15 years ago, but Common Sense Media mapped out how such a statistic has ballooned.

According to research gathered by National Public Radio, nearly half of adolescents now own a tablet device. The same article also cited that “98 percent of homes with children … have a mobile device such as a tablet or smartphone.”

This developmental risk serves to “[redefine] childhood experiences [with] enormous implications we have just begun to understand,” explained James Steyer, CEO and founder of Common Sense Media.

Though not the root cause of Chuck E. Cheese’s defeat, these statistics complement a larger conversation on where the American entertainment industry is headed.

In the 1990s and early 2000s, arcade games and crane machines appealed to kids’ extreme interest in object materiality: After completing whichever menial task the game demanded, children traded earned tickets for rubber bracelets, bouncy balls and pieces of candy.

Today, a quick search for “Chuck E. Cheese arcade games” yields images that feature familiar titles. “Doodle Jump,” “Fruit Ninja” and “Angry Birds” appear as pay-to-play on-site arcade booths when most of those titles — if not all of them — are readily available for free on any smartphone application store. Rather than fight the competition, CEC Entertainment, Inc., unknowingly brought it into their restaurants. The writing was on the wall long before the company reached its demise.

Looking back and then ahead

The franchise’s relationship with video games circles back to the creator of Chuck E. Cheese, Noland Bushnell, who was a co-founder of Atari in the early ’70s.

Kitty Jay writes that his “original concept was to combine dining with the feeling of being at a carnival.” Attendees could enjoy a slice of pizza while watching Mr. Munch’s Make Believe Band, an unsettling cast of animatronics, perform various sets.

Naming each character and tacking on canonical lore points to a larger attempt to bolster the company’s brand and legacy. Ideally, the customer base would then become cyclical, leading future parents to eventually share the same nostalgic love for the restaurant as their own children.

Although, given how rapidly the entertainment industry develops, such a concept is nearly impossible. CEC Entertainment, Inc., has consistently redesigned the titular mouse and shifted what their venues offer in attempt to, for a lack of better phrasing, keep up with the times.

Comparing an experience at Chuck E. Cheese today versus 20 years ago proves complicated because the franchise must continuously reconfigure their purpose and appeal. Food and Wine Magazine even flagged a recent instance in which Chuck E. Cheese sold food under the name “Pasqually’s Pizza and Wings” on Grubhub. Their side hustle is understandable given the circumstances, but it further challenges the company’s long-term viability.

In an official release that announced their bankruptcy filing, David McKillips, CEC Entertainnent, Inc. CEO, noted a strategy to “best position our company to delight families and kids for generations to come.”

Contextually, his optimism is hard to swallow and poses a crucial question: How can Chuck E. Cheese survive when their relevancy is comparable to a carnival prize? Toys stay shiny and new for only so long, and it’s always a matter of time before children move onto the next thing.

Luke Gair, Sewanee: The University of the South

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Luke Gair

Sewanee: The University of the South

Currently a senior at Sewanee: The University of the South, Luke Gair enjoys long days on the Cumberland Plateau and winding conversations with friends.

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