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Defunctland: The Failure of Disney’s Chuck E. Cheese Ripoff, Club Disney


The year was 1996, and the Walt Disney Company was in a very peculiar place. Walt Disney Studios was riding high, as they were in the middle of the “Disney Renaissance”. A return to form had yielded a plethora of box-office success, while the rest of the company appeared to be in a state of disarray. Jeffrey Katzenberg, the president of Walt Disney Studios, was forced to resign by CEO Michael Eisner in 1994. This was because Katzenberg had demanded that Eisner appoint him to president after the death of Frank Wells had left the position vacant. Many prominent Disney shareholders and board members did not want Katzenberg as the president of the company. And Eisner, who saw Katzenberg as hungry for power and acclaim, did not feel comfortable promoting him. After he left, Katzenberg would form rival animation studio, DreamWorks SKG, and would sue Disney for promised royalties that he had never received. The lawsuit would be settled a year later in 1997, with the report saying that Disney paid Katzenberg almost $270 million. In 1995, Eisner had appointed Michael Ovitz, the founder of the world-renowned creative arts agency, to the position of president. For a variety of reasons, this did not work out. Eisner would dismiss him from the company just over a year later in 1996. Ovitz would walk away with a severance package of nearly $140 million. During all of this, Eisner himself would cash in stock options of nearly $600 million. Money was flying all over the place at the Walt Disney Company, but none of it was going to the company’s other major division… Disney Parks had gone on a roller coaster of its own during the preceding five years, and Eisner’s proclaimed “Disney decade” was not going as planned. Many ambitious and creative projects were scrapped by the mid-90s. Disney’s America was announced… and then cancelled. Disneyland’s elaborate Tomorrowland renovation, Tomorrowland 2055, was announced… and then cancelled. Disneyland’s second gate, Port Disney, was announced, and then cancelled (starting to see a pattern here), Disneyland’s *other* second gate, WestCOT, was announced and then cancelled, EPCOT’s new World Showcase pavilions and renovated Future World pavilions were announced and then cancelled. A bunch of Indiana Jones attractions, a bunch of Muppets attractions, and a bunch of ToonTown attractions all were announced and then cancelled because of one bad egg… Euro Disney. The resort just outside of Paris, France had gone way over budget and failed spectacularly, causing a domino effect throughout the company. Euro Disney was not the sole reason that all of these projects were cancelled. For some, there were many other causes, but the failure was always part of the decision. And more often than not it, was the deciding factor. Whether for financial reasons or personal hesitation, Eisner slammed the brakes on the Disney Decade. But he still felt pressure to capitalize on the strong brand that the studios had created. Plus, the United States was experiencing an economic boom during this time, allowing families more leisure spending. All signs were pointing Eisner to an expansion of the parks, but Euro Disney, Disney’s America, and the other failures were still on his mind. This led him to what seemed to be a brilliant compromise. In 1996, Eisner created a new subsidiary of the Walt Disney Company named Disney Regional Entertainmment. This division would plan and execute Disney Entertainment venues throughout the United States. With this, the company would be able to profit off of its successful properties in an interactive setting similar to the company’s parks in Anaheim and Orlando. However, what Eisner was planning was no Disneyland. He had something much cheaper in mind, and something much more 90s… ♪Music♪ ♪In the early 90’s♪ ♪Things were going good♪ ♪Disney was making money as♪ ♪Every company should♪ ♪Little Mermaid♪ ♪Aladdin♪ ♪Beauty and the Beast♪ ♪Hits so BIG♪ ♪They wanted to take them East♪ ♪They tried to expand♪ ♪With Euro Disneyland♪ ♪It fell real hard♪ ♪It did not go as planned♪ ♪They were, out of money♪ ♪They were, out of luck♪ ♪But Eisner had an idea♪ ♪To pick the company back up!♪ ♪Moving to the malls!♪ ♪Growing the brand!♪ ♪Cancel all your plans♪ ♪It’s Defunctland♪ ♪Cash in all your stock♪ ♪As quick as you can♪ ♪Close some more rides♪ ♪It’s Defunctlaaaaaaaand♪ *Defunctland is filmed in front of a live studio audience* The 1990s, the Wild West of themed entertainment. Apart from the recent developments of the theme park industry, local entertainment was booming throughout the United States. Shopping centers that had existed for decades were being transformed into miniature amusement parks, with niche stores and small attractions taking over. Themed restaurant chains were sprouting up all over the country, with the usual suspects being Rainforest Cafe, the Hard Rock Cafe, and Planet Hollywood. The most unexpected of the new developments might have been the rise in indoor children’s play places. These were a mix of tubes, slides, ball pits, nets, stairs with steps, taller than your body, socks, socks with holes in them, vomit, disinfectant, vomit, disinfectant, those net bridges that your feet would get stuck in, a kind of terrifying helicopter thing where the mean kids would jump up and down and it would shake a lot, the open slides with only like one hill, which was just a waste, I mean, I climbed all the way up there, I’m gonna take the tube slide, and rug burns… so many rug burns. McDonald’s opened its first indoor play place of this kind in 1987. This allowed parents to dine while their children played, and the concept was met with glowing reviews. McDonald’s would continue to add play places to their restaurants, and others would quickly take note and expand upon the idea. *Cartoonish noises* “Run and Swing Here?” *Brake sound* “I Don’t Think So!” *Bowling pin knocked sound and playing sounds* “Climb and Slide Here?” “I Don’t Think So!”
*Glass breaking* “Then Where?” ♪I’m going♪ ♪Dizzy at Discovery Zone♪ ♪Where I can cut loose and be on my own♪ “DZ is made just for me!” “A place where I can really cut loose!” “Its all here!” “Jump and Tumble Here?” “I Don’t Think So!” ♪I’m going♪ ♪DZ, where Kids wanna be!♪ Discovery Zone opened its first location in Kansas City, Missouri in 1989. The facility featured in elaborate play place, a ball pit, a rock wall, an arcade, a maze, and a variety of other activities for children. Discovery Zone was a popular venue for birthday parties and group day trips. It also advertised itself as a good place for kids to engage in fun fitness activities. The company would quickly expand, opening 39 more locations until being purchased in 1992 by wealthy Chicago businessman Donald Flynn. In less than three years, the chain would expand to 340 locations. McDonald’s had noticed the competition, and in 1991, had created their own chain of indoor amusement centers named Leaps and Bounds. McDonald’s would not be able to keep up with Discovery Zone, and would sell all 48 Leaps and Bounds locations to the company in 1994. Around this time, Blockbuster Video, who owned about 20% of Discovery Zone, would up it’s stake to 50.1% and would assume control of the company in 1995. In hindsight, this was akin to RadioShack investing in Toys “R” Us. *Boo!* What, too soon? The rapid expansion of Discovery Zone would prove unsustainable, and the company wouldn’t make it to the 21st century. They filed for chapter 11 bankruptcy protection in 1996, and would do the same in 1999, this time ceasing operations. Over 100 locations closed immediately. This brought a flood of horror stories of children showing up to the center for their birthday party, only to be greeted by a note on the door informing them of the closure. Some of the franchised locations remained open, and 13 fun centers, along with the Discovery Zone name and logo, were purchased by the company’s main competitor… … a powerful rat … … named Charles Entertainment Cheese. ♪Smile, America, say Chuck E. Cheese♪ ♪Smile, America, say Chuck E. Cheese♪ ♪Food and Games and all kinds of creatures♪ ♪More taste of Pizza Time Dinner♪ ♪You can, Smile, America♪ ♪Smile America♪ ♪Smile America, say Chuck E. Cheese♪ Started by Atari founder Nolan Bushnell, Chuck E. Cheese’s opened its first location in San Jose, California in 1977, Bushnell had always had a respect for the Walt Disney Company and their theme parks, and he wanted to create an elaborate entertainment experience of his own. He would combine video games, animatronics, and pizza into a restaurant called Chuck E. Cheese’s Pizza Time Theatre. Bushnell would expand this restaurant into a chain, and by 1984, the company had over 250 locations. Unfortunately, this same year, Pizza Time Theatre would declare bankruptcy due to debts acquired through expansion, the declining interest in arcades, and in some cases, multiple restaurants that were located too close to each other, virtually splitting the potential profit of an area. The remaining locations would be quickly bought by rival chain Showbiz Pizza Place, which was started by Chuck E. Cheese franchisee in 1980. Showbiz Pizza did not rebrand any of the Chuck E. Cheese restaurants, and the two chains would eventually be merged in 1990, with Showbiz Pizza Time incorporated choosing to go all in on the Chuck E. Cheese brand, abandoning Showbiz Pizza’s animatronic band, The RockaFire Explosion, in the process. Throughout all the financial issues and restructurings, there were still over 250 operating locations in 1992, with all of them being renamed to Chuck E. Cheese’s Pizza, before dropping the “pizza” from its title in 1995. On top of their arcades, animatronic shows, and pizza, Chuck E. Cheese’s began investing more in indoor play places to compete with McDonald’s and Discovery Zone, it was around this time that the Walt Disney Company took note of the success of these companies. While they might have been late to the game, they expected to fit right in. After all, Discovery Zone had been described as an indoor Disney World, and Chuck E. Cheese’s used Disney as a major inspiration during its development. If Disney utilized the same concept, implementing their attention to detail and intellectual properties, they could dominate the new market. In 1996, Eisner appointed Art Levitt to the president of Disney Regional Entertainment. Levitt was the perfect person for the job, and it wasn’t the first time that he and Eisner had done business. At 28, he was a salesman at a Los Angeles furniture store. One day, Michael Eisner himself walked in looking to purchase some items for Disney. The fact that the CEO of one of the world’s largest corporations was concerned with something as small as furniture was a true testament to Eisner’s micromanagement. Levitt and Eisner apparently hit it off, and he was quickly named Director of Corporate Projects and Executive Assistant to Eisner. During his first tenure with Disney, he would also become an executive in charge of overseeing Walt Disney World’s on-property resort and entertainment locations, including the Disney Village Marketplace and its Pleasure Island nightclub district. Levitt came up with the idea for an ESPN-themed restaurant to be placed on Pleasure Island. In 1993, Levitt left Disney to head Rank Leisure USA, a company that operated multiple Hard Rock Cafe locations. Just two years later, he would return to Disney, equipped with new expertise on location-based themed entertainment. After becoming the president of Disney Regional Entertainment, he would head the creation of three national chains for the Walt Disney Company. The first was their attempt at a children’s indoor amusement center, to be named, Club Disney. Club Disney is a now little known project of the Walt Disney Company. Disney intended to build the amusement centers in suburban malls throughout the country. The spaces were designed for weekend visits, school field trips and birthday parties. It would also house family workshops, such as “Poohrobics”, which was described as a ten-week parent and child stretching and exercise program, led by the beloved and befuddled honey bear. The complexes featured play places, educational demonstrations, animation tutorials, karaoke, and kid friendly computer games in a lab called “The Mousepad”. The e-ticket attraction of Club Disney was, of course, the play place. These varied from location to location, with some being themed to a specific franchise, such as The Lion King or Hercules, while others were not themed at all. The play places had varying names, such as “The Jungle Climber”, “The Colorageous Climber”, and “The Supercali Toontastic Watch-A-Ma Climb It Time Toaster”. Other attractions were a room themed to Peter Pan where guests could see their shadow, a swing themed to Tarzan an activities area called “Herc’s Gym”, motion detected musical instruments on the Aristocat music wall, which sounds very similar to an attraction that used to be in EPCOT’s ImageWorks, an area for children under three called “The Pooh and You Corner”, a storybook time, and a variety of arcade games. At some locations, there was a little Mermaid themed area, where kids could “peek through the portholes of a sunken pirate ship and find a treasure, or chat with a friend on a shellular telephone.” There would also be periodic dance parties themed to different Disney properties, these included “The Lion King Limbo”, “The Mickey Macarena” and “The Roger Rabbit Bunny Hop”, some locations had a room called “The Applaudeville Theater”, where guests could dress as Disney characters and participate in a fashion show. There were also education activities… called “Ed-Ventures” and monthly activities, such as science demonstrations themed to Flubber. As with Chuck E. Cheese and Discovery Zone, a major focus of Club Disney was its elaborate birthday parties, with children getting to pick from a few options, such as “Disney Princess Tea”, “Toy Story Search Party, “Poohrific”, “Hercules Hero Hurrah” and “101 Dalmatians Bow Wow Bash”. Some locations has a magician performing tricks as Merlin, and the cake for the parties was catered by The Cheesecake Factory. A child could only enter Club Disney with an adult, and both were given a special wristband with a bar code, so no child could leave with a different adult than the one they came in with. This was to ease the minds of parents, to allow the kids to roam free within the complex, and to ensure that no parents treated Club Disney as a daycare center. The clubs also served Mickey Mouse shaped pizza, admission was $8 for kids and $4 for adults, which would be about $12 and $6 respectively when adjusted for inflation. There was also a large gift store called “The Clubhouse Shop”. One mother reacted to Club Disney’s announcement by proclaiming… “Disney has invaded our lives. But I think the children enjoy all of it.” The opening day of the first location, which was part of a new mall in Thousand Oaks, California, began with a ceremony featuring Michael Eisner, Mickey Mouse and Goofy. The head of attendance calculating that the Walt Disney Company estimated that over 10,000 visitors would show up on opening day, and surprise, he was a little off.
*canned laughter* When Club Disney opened its doors on February 21, 1997… only 1000 visitors showed. Proving that no one had learned anything from Euro Disneyland’s opening. One Sheriff was quoted saying, “We were expecting a lot more people. Maybe because Disney advertised that tens of thousands were going to be here, it scared people away.” Of the opening day crowd. Ten, or so, were protesters accusing Disney of paying Haitian workers ¢28 an hour to make Pocahontas themed pyjamas. The demonstrators were probably also disappointed that more people did not show up. Still, parents and children seemed to love the new complex, and four more would be built. Another in California, two in Arizona, and one in Colorado. Disney representatives had been enthusiastic of the chain’s success, claiming that they were going to open another 100 clubs “as fast as we can build them.” While reviews were positive, Club Disney was not without its critics. One of the higher end malls that Club Disney had moved into accused Disney of ignoring the complex’s theming standards by implementing their cheesy design. Also, parents complained about the price of admission, especially the necessity for a separate adult ticket, as they were not participating in the club’s activities and were required to be there. Club Disney also proved that Disney was best off not teaching anything, ever, as the “Ed-Ventures” activities were the most highly criticized of the complex. With many accusing them of being a mere tactic to convince schools to sign off on field trips. In the end, Disney did not follow through with the plans for expansion, but not for these small complaints. The company was impatient with the investment, and less than three years after the opening of the first location… Disney decided to cancel the expansion and shut down the complexes. Club Disney was not the cash-cow that the company had hoped for, and being the late-90’s, Eisner was not in the mood to play the long game. The company was cutting costs across the board and Club Disney became another casualty of the financial issues. The chain was closed on November 1, 1999, having never expanded past its original five locations. This was around the same time that Discovery Zone ceased its operations leading many to believe that indoor play centers were just a fad of the 90’s. As Chuck E. Cheese’s would prove, there is some longevity to the concept, so long as you innovate or evolve. As for Disney Regional Entertainment, Club Disney would be the smallest of their three projects. Another regional chain Levitt would create was based off his original idea for an ESPN-themed restaurant, now possible thanks to Disney’s 1996 acquisition of ABC. *Upbeat music*
*Cell phone ringing* “It’s your mother.” “Hi!” “Hi. How are you guys holding up without me?” “Oh we’re okay, we were just watching a little TV.”
*Cheering* “Have the kids driven you nuts yet?” “No, we’ve been keeping ourselves entertained.”
*More cheering* “Jess said she’d help you with the dishes tonight.” “Well the kitchen is spotless and dinner was great.” “Wow, you should reward yourself, take them somewhere fun.” “…that it would have a huge impact on the lead.” *Speaking Spanish* The complexes were part bar, part restaurant, part arcade, part gift shop and part broadcast studio. It was such a hit among sports fans that there were apparently points where guests would have to be dragged out for staying in excessive amount of time. The ESPN Zone would also put on “The Ultimate Couch Potato Competition”, a sitting competition that challenged participants to watch TV without falling asleep or getting up, only allowing a bathroom break every eight hours. One year, the winner watched TV for three straight days.
*Clapping* ESPN Zone would debut in Baltimore on July 11, 1998, the brand would grow to a total of nine locations, many of which would close in the mid-to-late-2000’s mostly due to the recession, and the only remaining location, at Downtown Disney in Anaheim, closed June 2, 2018 to make room for the Disneyland Resort’s new hotel. In between Club Disney and ESPN Zone, would be Disney Regional Entertainment’s most ambitious project. It was the main reason that the subsidiary had been created, it was the Imagineer’s most puzzling concoction, it was… DisneyQuest. *People cheering* ♪Music♪

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Comments
  • Oh goodness not the Rock-a-Fire Explosion…
    When I was a kid I used to frequent a place called Fun Station USA. It was a pretty sweet arcade and had some indoor rides. They had a Rock-a-Fire explosion show there, and as I got older (around 11) the animatronics began to break down. But instead of, I dunno, getting rid of them, they just placed the broken and old animatronics in random places in the arcade.
    My day camp was at Fun Station, and one of my counselors asked me to get something from a big utility closet. I walked in to get paper towels or whatever, and BOOM the fucking cheerleader mouse robot was towering over me. I was traumatized.

  • That feeling you get as a early 90s kid from DZ and Chuckie Cheeses was amazing! the world felt so different before the internet! i can still remember how cool the roller slides felt at DZ and the wierd smells in the ballpit! such glorious days!!!

  • hearing about this sort of stuff, i remember there was this really interesting and great indoor place like this sort of thing(but done well) that was maybe a 10 minute walk from the house i grew up in.
    it was called hollywood connections, most of the building was a movie theater(which is probably where most of its income came from honestly), but the other half of it was a "indoor amusement center" that did birthday party stuff, but also just had a bunch of indoor rides and things like a carosel, bumber cars, a children's indoor playground with all the classic staples you'd expect at a McDonalds, these two rides flat rides that i don't even know what they were called cause everyone just called them "the balloons" and "the bus", a mini-golf course, an indoor mini-rollercoaster that i swear was broken down half the time, a pretty nice arcade, a laser tag area, some food shops, and a roller skating rink. it was a great place, but then it got closed down in the early 2010s, only about 6 years ago, for some really stupid reasons involving the city buying the land hoping that a nearby building would use it instead of taking their business elsewhere (that business left anyways a few years later).
    it wasn't even doing badly financially, and was still getting good reviews, but nope, the city bought the building and land to sell, leaving just an abandoned building for a little while that wasn't even torn down or remolded from the outside, they just eventually changed its purpose into an office or call center or something. i can still look at it and see the section of the wall that was inset for movie posters. hell, the side of the building with massive windows formerly showing off the mini golf course and some of the rides now just has cubicles in it.

    its honestly super depressing to look at that place. because i know internally the layout is no different, but its an office building now, could i go upstairs to what use to be the arcade, look threw the windows to the areas below and instead of seeing the roller skating rink see a sea of cubicles in the exact same shape?

  • 4:19 That reminds me of Charlestown mall in St. Charles, Illinois. I grew up in St. Charles. I used to go to that mall. I'm sure there were a lot of reused elements in malls built in the 90's. Maybe it was developed by the same people. The mall in the video is not all that far from St. Charles, IL.

    Charlestown mall is pretty pathetic today. Most of the shops are vacant and the windows of the vacant ones are now used to advertise the shops that are still there.

  • I would love to see you tackle Discovery Zone and Leaps & Bounds in full someday. I was lucky enough to go to both those places more than once in my youth. The coolest element I recall at DZ was a zipline/monkey bar thing that apparently had an electromagnet to return the handlebars to the top. And the L&B in my area (Scottsdale, I believe) had an elaborate hi-tech network of ball washing tubes (for the ball pit balls, mind you) that I spent a great deal watching and being mesmerized by. It really was a McDonald's Playplace on steroids.

    It's too bad DZ suffered at the hands of higher-ups lacking foresight at their sudden success and expanding too fast at the expense of being unable to focus on the existing locations, making EVERYONE suffer as a result. And McD's apparently got bored with the idea of promoting physical activity among the youth with L&B.

  • 13 Fun Centers- along with the Discover Zone name and logo- were purchased by the company’s main competitor: a powerful rat named Charles “Entertainment” Cheese.

  • Dude the church daycare my parents put me in during the summer and from last bell at school till they got off work used to go to Discovery Zone every Wednesday. The caretakers were strict and it was a church so we weren't allowed to spend quarters to play the arcade plus there were games like MK or street fighter which could make an old church lady shit her granny panties.
    The pizza always gave me awful diarrhea.
    The other kids for the most part were annoying nerds with religious nutcases for parents whom they'd often qoute.
    "Mom said I'm going to heaven and you're a sinner!!" Lol was enough to make me sacreligious and hate Discovery Zone.

  • I had some Disney parks/resorts/cruise promtional VHS tapes as a little kid and I think I remember a segment on Club Disney, if not something similar

  • Defuncland, if Im your lecturer and this video is your thesis I would give you a C-. It's so boring and long winded, and youre not getting into your point fast enough. Especially since youre covering a topic that no one cares about anyway. Please do better or just get a decent job like anyone else

  • Holy crap, that DZ commercial.
    The first part sounded familiar, and then the title popped up and bam, nostalgia trip.
    Wish I had more videos of that place.
    Amazing quality on that video too.

    I dont think so

  • Honestly, this isn't a bad business idea for Disney. Creating opportunities for children to form attachments to Disney properties when their families can't afford a full on Disney vacation is genius. It's a shame that the execution didn't live up to the dream. I know they'll probably never try something like this again, but I think it could be extremely successful if they did.

  • For God's sake people. I got it the 70th time you wrote A Powerful Rat…
    Was he talking about the 80's band Ratt?

  • I can’t believe how many times I rewinded this video to listen to “a powerful rat named Charles Entertainment Cheese.”

  • Oh man. All the cool kids would have their parties there. The Tempe/Phoenix location is still there as Makutu’s Island

  • Katzenberg is the cunt who dangled Treasure Planet (easily Disney's best animated feature) in front of Clements & Musker for years, promising them complete creative freedom, then buried the film upon release. He is a bully, and it's a shame he was ever at Disney.

  • Okay, that song was AMAZING! I love the work you put into these and must echo everyone else; why aren't you bigger?! Your content could definitely be a series on a streaming service.

  • Charles Entertainment Cheese.

    I'm moving to North Korea, it's better to starve to death in a slave labor camp then continue to live in this cold corporate America

  • "In hindsight, this was akin to Radioshack investing in Toys "r" Us"
    cue booing noises
    "What? Too soon?”
    Lost it the second I heard the booing noises.

  • It’s only recently I’ve found your videos (love them by the way) and it’s so surreal to have been to Club Disney in Denver as a kid, and also to Disney Quest in Downtown Disney maybe 10 years later.

  • Haha holy shit, I've seen the portion of this video where Charles Entertainment cheese is revealed a long time ago and have been recently watching all of these videos so this was an amazing realization for me.

  • Haha trip I remember going to club Disney in West Covina my would take me and my brother but was to expensive my mom would say …discovery zone in Rancho Cucamonga to haha good times

  • what do you mean when you say a second gate? i take it as them opening another way into the theme park, but i feel like thats wrong lol

  • As a kid. Chuck-E-Cheeses was like the bottom of the barrel for places to go. Gross food, nasty play places, and a rip off gambling set up.

  • I hate the fact that chucky e cheeses bought Peter piper pizza a few years back. They're just ruining it 😡 Bring back the old wings and ranch lol

  • funny thing, I was driving by the old first Chuck E cheese building just yesterday and wondering if that place was still in business.

  • Still have a couple Chuck E Cheese's running here in Calgary, AB. Used to be popular in the 80/90s but not so much now.

  • Right around 2010 chuckie cheeses had the best pizza. Then they changed their recipe and it wasn't the same. When my mom was pregnant with my little brother and had cravings we would always go to chuckie cheeses. We were there at least once a week for a span of about 6 months for the pizza alone, the games were just a bonus. Man what I would give to have some of that old recipe pizza from them…

  • You know, places for kids to "let loose and be themselves" sound really good on paper. But, having worked at one myself, I can tell you it is hell for every single minimum wage worker who has to handle it.

  • People suck. Heaven forbid Disney have ANYTHING educational in there. And "cheesy designs"? It's Disney. They make cartoon movies and market to kids. You're not getting the Olive Garden. And parents complaining that they have to pay for a ticket can chill out. They shouldn't let anyone in for free.

  • These guys are asking for a lawsuit using music that they don’t have the right to for this video. Welcome to the future!

    Also, ESPN ZONE is still operating in Orlando.

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