Why Steven Spielberg's Nautically-Themed Dive! Restaurant Sunk

“Dive! Into a fleet of gourmet submarine sandwiches. SUBstantial salads, fresh pastas, wood oven-roasted entrees, and mouth-watering desserts. Enjoy SUBlime food in a playful SUBmerged environment, with bubbling porthole windows, gauges, an underwater video voyage, and working periscope with panoramic city views.”

—Ad for Dive!, August 1996

As a film director and producer, Steven Spielberg has been responsible for billions of dollars in box office receipts. That kind of success can sometimes prompt moguls to branch out into other arenas to see if their acumen translates. For Spielberg, the call came in 1993, when he and producing partner Jeffrey Katzenberg decided to enter the very tumultuous theme restaurant category.

For every major success in the industry—the Hard Rock Café, the early days of Planet Hollywood—there were several culinary missteps. Fashion Cafe, endorsed by supermodels like Christy Turlington, wobbled; Hulk Hogan’s Pastamania franchise did not meet even modest expectations. But Spielberg was Spielberg, someone who seemed capable of turning anything he touched into a success.

Dive! grew out of Spielberg’s love of undersea exploration, a fascination that began when he read 20,000 Leagues Under the Sea as a child, continued with 1975’s Jaws, and led to a short-lived aquatic series, Seaquest DSV, which aired on NBC from 1993 to 1996. While he didn’t speak publicly about his involvement with Dive!, his name was enough to get the eatery (which cost $7 million to construct and outfit) a significant amount of press coverage. He and his partners speculated that over 60 Dive! locations would open in the coming years around the world.

Noted chef Michael Northern was in charge of the menu, and the design leaned heavily into the restaurant-as-theatrical-experience. When patrons formed a line to enter the first Dive! location in Century City, California, in May 1994, a submarine conning tower and nose jutted out from the building. Inside was a complete stainless-steel aesthetic, with portholes, torpedo-shaped bar seats, and a periscope that could survey the affluent Los Angeles commercial district.

The climax to this simulated nautical submersion was timed to hit every 45 minutes: For 30 seconds, contained water would cover the portholes, lights would flash, and the groaning sounds of a submerged submarine would be piped in through speakers, giving diners the illusion of being lowered into the depths while gorging on $11.95 gourmet submarine sandwiches, the franchise’s signature dish.

"What the California Pizza Kitchen did for pizza, we want to do for the submarine sandwich," restaurant operator Larry Levy said, "but integrated into that is the entertainment function of being inside a submarine."

Dive!, however, sunk. And the reason why has to do with how theme restaurants attempt to make a profit.

When patrons—often tourists—make the trek to an immersive restaurant that offers an “experience,” they typically want a memento of their time there. That’s why Dive!, Planet Hollywood, and others typically devoted a lot of space to a retail shop offering hats, shirts, mugs, and other ephemera. Some restaurants were seeing 50 percent of their revenue from such sales, with the food being less of a profit-earner and more of a reason to get foot traffic in the door.

In its first year of operation in California, Dive! made just 15 percent of its gross sales on souvenirs. When they opened a Las Vegas location a year later, that number jumped to 40 percent as 3000 customers a day streamed into their hatch-like doors.

That profit managed to keep the Vegas arm of Dive! viable for years, but the Los Angeles location closed in 1999, a victim of both poor sales (tourists didn't invade Century City the way they do Vegas) and a mixed critical reception. The regular simulations either grew tiresome for adults, or made young children too anxious to finish their appetizers.

“So many bells and whistles, it's like eating in a pinball machine,” Zagat huffed.

Investors had apprehensions about expanding further, and the Vegas location closed in the early 2000s.