How do you make a 44-year-old animatronic rodent appeal to today’s kids?
Chuck E. Cheese has seen a lot in 44 years. The namesake rodent at America’s leading children’s entertainment center and pizza chain has watched generations grow up, playtime trends evolve and video games move from the arcade to the home. He’s even seen his own image change, from a rat in the company’s early days to a mouse after a rebranding campaign.
The fact he’s still here is a testament to his employer’s surprising perseverance.
Sitting in front of what appears to be an Impressionistic take on Chuck E. Cheese, complete with a bowler hat and bowtie, David McKillips, chief executive of Chuck E. Cheese parent company CEC Entertainment, credits the company’s longevity to its embrace of technology. It’s an ideology, he said, that stems from its founder, video game titan Nolan Bushnell, of Atari fame.
“We keep embracing innovation decade after decade,” McKillips said. “We don’t have ball pits anymore. But we have the greatest video games and arcade games and interactive dance parties.”
The path has not been easy for Chuck E. Cheese, especially recently. Just in the last year and a half, there were months of restaurant shutdowns during the pandemic, the permanent closure of more than 30 locations and a filing for bankruptcy protection. Yet its culture of adaptation has kept Chuck E. Cheese alive when some of its competitors have died young.
The first Chuck E. Cheese opened in 1977 in San Jose, California, and quickly proved a hit. The children’s game center and pizza parlor with the distinctive animatronic animal band expanded, thanks in part to the rising popularity of video games, according to a 2017 case study published in the Journal of Business Cases and Applications.
Chuck E. Cheese’s parent company went public in 1988 and by 2005, Chuck E. Cheese had grown to 500 locations.
But by the early 2010s, sales started to slow, leading to a revamp of the main character himself in 2012. Chuck E. Cheese lost his ’90s-chic fingerless gloves, the backward baseball cap and casual shorts and took on a more rocker appearance with jeans and an electric guitar.
A rebrand didn’t solve all the chain’s problems. In 2014, CEC Entertainment was acquired by
private equity firm Apollo Global Management in a leveraged buyout. The firm invested in an effort to make its 577 restaurants more palatable.
Over the years, Chuck E. Cheese has changed its menu to include new kinds of pizzas, such as pies with mushrooms and fresh spinach and kid-geared desserts such as multicolored unicorn churros. The chain also tried to better appeal to adults by serving alcohol, a move that could boost sales but also may have led to increased altercations at its restaurants, according to the 2017 case study. (“Consider the following description of the restaurant offered by an alderman in Milwaukee, he compares the local Chuck E. Cheese to ‘something out of a Quentin Tarantino film... there is alcohol and pistols being brandished,’ “the study said.)
Unlike some of its counterparts in the competitive and fast-evolving children’s entertainment sector, Chuck E. Cheese has worked to modernize its amusements and operations.
The company moved away from its traditional paper tickets — the paper stock of which cost $6 million to $7 million annually — to an e-ticket platform. It releases albums of Chuck E. Cheese songs on Spotify and is adding digital dance floors.
The company also started expanding its business beyond its physical play places. When the COVID-19 pandemic shut down locations and stay-at-home orders boosted demand for food delivery, Chuck E. Cheese opened a ghost kitchen called Pasqually’s Pizza & Wings (named for one of the members of the animatronic rodent’s band).
Frozen Chuck E. Cheese pizza can now be found at Kroger stores, and parents can buy birthday party packages of balloons, pizza, party bags and cake to celebrate at home. (Birthday parties at Chuck E. Cheese locations remain a big business — the company says it hosts 500,000 birthday parties a year in the U.S.)