Photographer: Yael Malka for Bloomberg Businessweek
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This Startup Is Building Tiny Amusement Parks for Grown-Ups

“We are not your most typical nerds. We’re not pencil pads and lab coats, but games and lasers.”

Two Bit Circus Inc. co-founder and onetime clown Brent Bushnell spends his days playing games. In a converted warehouse in East Los Angeles, the 38-year-old races around a 10-foot-tall hexagonal tower, frantically pressing buttons in an attempt to beat the clock. He scores, high-fiving a guest who guesses, correctly, that it’s a giant, multiplayer version of Bop It!, the popular 1990s game that prompts players to twist, crank, spin, and pull knobs and levers.

(From left) Two Bit Circus founders Gradman and Bushnell.

(From left) Two Bit Circus founders Gradman and Bushnell.

Photographer: Yael Malka for Bloomberg Businessweek

“Most people are antisocial,” Bushnell says. “If you were brought together around games and entertainment, instantly the barriers blast away.” He and co-founder Eric Gradman are betting they can lure people away from TVs and phones and into tech-enhanced versions of the Fascination parlors that sprung up at every seaside resort from California to New Jersey in the 1920s. Their investors agree. In January, Two Bit closed a $15 million funding round to build a chain of “micro amusement parks,” with the first one scheduled to open in L.A. in early 2018.

You could say Bushnell was born to do this. His dad, Nolan Bushnell, who founded Atari and Chuck E. Cheese, is often called the father of electronic gaming. Nolan never missed a chance to school Brent on the ABCs of running a business. At an ice cream parlor, he’d say, “Let’s look at the shop floor economics of this place,” the younger Bushnell recalls, and ask him to guesstimate how much the cashiers got paid and how much the refrigerators cost.

Gradman and Bushnell started collaborating in 2008 after meeting through a mutual friend. They quickly bonded over their shared past in the circus and a love of tinkering. “We are not your most typical nerds,” Bushnell says. “We’re not pencil pads and lab coats, but games and lasers and robots.” The two began to meet regularly to build games and eventually started renting out their contraptions as attractions for corporate events. “We literally became a high-tech circus, dragging these games to parties and taking them down at the end,” Bushnell says.

“Fire’s so much more fun,” Bushnell says, “and you don’t die, because you’re wearing a fire suit.”

“Fire’s so much more fun,” Bushnell says, “and you don’t die, because you’re wearing a fire suit.”

Photographer: Yael Malka for Bloomberg Businessweek

After putting on a series of weekend carnivals in a handful of cities, the pair began raising money to open a permanent space. Intel Corp. invested in Two Bit Circus after Bushnell and Gradman provided the entertainment at a few of its events. The two companies also have a partnership to make interactive games and builder kits for kids. “With Two Bit, we saw this opportunity to basically disrupt the entertainment industry,” says Christine Herron, the director of Intel Capital, the chipmaker’s venture arm.

Out-of-home entertainment is a catchall category covering everything from movie theaters and bowling alleys to amusement parks. It’s an industry in flux: The Ringling Bros. circus announced it will be shutting down in May after a 146-year run, yet theme parks such as those of Six Flags Entertainment Corp. and Walt Disney Co. continue to thrive by doing things like marrying old-fashioned roller coasters with virtual-reality special effects. “I think the key is having something that is different and dynamic,” says Jefferies analyst Andy Barish. “A static entertainment experience tends to not be sustainable.”

Two Bit Circus has raised $21.5 million in venture capital since it incorporated in 2012. (Nolan Bushnell isn’t an investor, but he has a seat on the eight-person board.) For their first location, the founders have signed a lease on a 50,000-square-foot warehouse space in Downtown L.A. “Our audience is going to be the millennials,” says Kim Schaefer, who leads Two Bit’s location scouting. “As we look at rolling this out, we’ll be a little more open-minded.” That could mean opening outposts in malls and shopping centers, a move the company has also considered.

The plot lines in the VR games will vary, so visitors will have a reason to come back.

The plot lines in the VR games will vary, so visitors will have a reason to come back.

Photographer: Yael Malka for Bloomberg Businessweek

Among the attractions at Two Bit Circus’s Los Angeles space will be robot bartenders and a 30-minute “story room,” a variant of the popular type of adventure game in which players have to solve a series of puzzles to exit a locked room. There will also be a 1,000-square-foot virtual-reality arena where guests will compete against one another in video games. Unlike in regular arcade games, which have a limited set of outcomes, the plot lines in the VR games will vary, so visitors will have a reason to come back, Bushnell says. “In one of the episodes, we’re trying to get the ambassador home,” he says. “The next episode, we’re exploring the planet. The next episode, we’re in a dogfight with the bad guys. Freaking Star Trek did 10 seasons of that!”

The giant Bop It! stands in the entrance of the company’s workshop in East L.A., alongside what looks like a few slabs of wood with a screen on top. A few weeks later these will be transformed into an arcade-style game in which players must traverse a minefield.

Photos of inventions past and future line one wall. One showcases a dunk tank that uses fire instead of water. “Fire’s so much more fun,” Bushnell says, “and you don’t die, because you’re wearing a fire suit.”

The bottom line: With backing from Intel and guidance from Atari’s founder, a pair of former clowns are pitching micro amusement parks.

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