tracysarris, Author at Alpha-Omega Amusements and Sales, Inc.

OAMOA Annual Meeting

by tracysarris | May 8, 2013 | Uncategorized

Portland, Oregon
Colwood Golf Course
541-68888-1888

GTI Asia Taipei Expo

by tracysarris | May 8, 2013 | Uncategorized

Taipei, Taiwan
Taipei World Trade Center
www.taiwanslot.com.tw

ALLARA

by tracysarris | May 8, 2013 | Uncategorized

Queensland, Australia
Gold Coast Convention & Expo Center
www.aalara.com.au

RSA Convention and Trade Show

by tracysarris | May 8, 2013 | Uncategorized

Reno, Nevada
Silver Legacy Resort Casino
www.rollerskating.com

Volume 18 ~ April/May 2013

by tracysarris | May 7, 2013 | Uncategorized

Scroll Down for All the News Volume 18 ~April/May 2013

Acknowledging Industry Trends: Good and Bad…But Real

by tracysarris | May 7, 2013 | Uncategorized

Frank Seninsky – ‘I have always been interested in keeping a close eye on industry trends and trying to stay ahead of the curve when making decisions regarding game purchases, game updates/modifications, trade-ins/sales, including operational decisions about game mix, layout, pricing, and programming. Our industry has been fairly creative in adapting to market changes with games that players find fun, exciting and worth the price per play. However, we may be at a crossroad where eight current trends may be interconnected and leading us on a dangerous path.’

1. Prize Limit Laws. There are currently 19 states that have laws and regulations that limit prize per play value from 75 cents to $25 for redemption and merchandise dispensing games. Maryland and California may soon be added to this state list, with proposals of $10 prize limits. We recognize that these laws are intended to reign in sweepstakes games and not to hurt the amusement game industry, but we must acknowledge that these laws are on the books and will take decades to change.

2. Merchandiser Revenue. Merchandiser revenue has been slowly cannibalizing redemption revenue and video revenue over the past 5 years. There are several high earning merchandisers (I-CUBE, Mega Stacker, Key Master, X-Prize in the Top 13 Combined this month). The simple new FEC revenue model is 70% redemption, 25% merchandiser, and 5% video. With the prize limit laws trend looking like it will continue to other states, it would appear that the merchandiser revenue percentage has peaked and will start to reverse.

3. Game Mix Model. The latest game mix model based on the number of games is 55% redemption, 20% merchandiser, 20% video. The trend over the past five years is that the number of merchandisers has increased and the number of videos has decreased. The percentage of redemption games has remained fairly steady. This makes sense based mostly on Trend #2 above and the decline of video game revenues.

4. Size and Shape of Games. ‘Bigger is better’ has been the trend since Big Bass Wheel Dlx hit the market five years ago. Game manufacturers are producing not only larger footprint games in all categories, but also more multi-player games and games with increased height. The smaller games get lost among the giant games. The TRR test location, for example, used to have 96 games and as the larger games were brought in, the total number of games has been reduced to 83. It is now more of a challenge to place the large games and maintain adequate lines of sight. Let’s also not forget that the purchase prices of these larger games have increased resulting in increased price/play. We now have more games at $1/play and $2/play than ever before. This is a bad trend! We all acknowledge that per capita and family out-of-home leisure entertainment spending have been decreasing and with higher per play pricing, our player pool is decreasing and current players are now spending less ‘time’ playing our games.

5. Coin Pushers & Quick Coin Games. Coin pushers have been our single highest revenue group of games and when included in the quick coin redemption game category (also called token action games), have accounted for as much as one third of total redemption game revenue. Recently quick coin games have been getting some negative press because 1) it only takes a second or two to play; 2) tokens are required to play the games and when a debit card system is in place a card swipe token changer is needed (or a token/hopper dispenser is needed for each quick coin player position); and 3) in a ticketless location, pushers and some quick coin games lose a substantial part of their player appeal and require a card swipe at each player station so players can have points added to their debit card. The trend of operating fewer or even no quick coin games at all has slowly appeared. In my opinion this is a bad trend.

Quick coin games have provided us with the ability to maintain a low price/play (25 cents or lower) and provide the player with a 30% or slightly higher ticket payout percent. This now makes it possible to program all of the other games that have a higher entertainment value at lower ticket payout percentages and still be attractive and of play value to the payers. The combined result is an average 25% ticket payout percentage. It is my opinion that redemption game revenue potential will decrease when quick coin games are replaced with other redemption games. Increased average price/play will also contribute to lower redemption revenues. My companies will do what they can to operate a category of quick coin games, including installing token dispensing hoppers when necessary. (See New Products and Technologies Section that describes Speedy’s One Stop Token Dispensing Kit).

6. Videmption. Redemption games with video screens and new technology have been increasing over the past five years and a new category has been created known as video-redemption or videmption. Several games are generating high revenues and this is a good trend. At this year’s Amusement Expo, Adrenaline’s ‘Black Out’ won the AMOA Innovator Award. Coastal’s ‘Temple Run,’ Adrenaline’s ‘Fruit Ninja,’ ICE’s ‘Doodle Jump’, and SEGA’s’ ‘Bejeweled’ are all in TRR Top 25. This could be the category that carries the ball for redemption for the next several years.

See our TRR-FEC SPECIAL FEATURE to learn more about Videmption and How the Middle East is Redefining Family Entertainment

7. Cash/Tokens vs Cashless. The U.S. is on an upward trend towards cashless. Movie theaters are reporting more than 80% of movie ticket purchases are from credit and debit cards, with one major chain reporting 88%. Even with ATM’s in a large majority of locations and many game locations having credit card token dispensers, the day will soon arrive where our industry will no longer be using coins or bills. People will no longer carry any cash. Even now, people carry little cash and are getting use to using credit or debit cards. The other day I purchased a candy bar using a credit card because I needed the several singles I had for tips at the airport and hotel. New technologies are here currently that are easily installed on our games (See USA Technologies report in the New Products and Technologies Section). Those of us who have been using debit card systems have gotten use to cashless operations. This is a good trend and can only mean increased revenues and lower labor costs for our industry.

8. Tickets vs Ticketless. A small percentage of FEC’s with debit card systems have opted to go ticketless. They claim that they save money on by not having to purchase tickets and on labor to load and unjam tickets. They claim that revenue stays constant and some claim revenue even increases. TRR has had a ticket vs. ticketless debate covering the last dozen issues. Our latest test data where customers have been given the choice of e-tickets or paper tickets, shows 1/3rd have chosen e-tickets and 2/3rds have chosen tickets. This test has been going on for five months and I am currently a believer that if 2/3rds still want tickets, I should not go ticketless. The test also shows a slight decline in revenue of pusher and quick coin games since the ticketless option was started. I can see the day in the not too distant future when a player will be able to download a ticketless app to an iphone that will keep track of e-tickets won from redemption games in one location that can be tracked and redeemed at that location’s redemption prize center or at any appointed retail store (or on line).

To keep our businesses profitable we have to be aware of these trends and follow their progressions or reversals. This can help us manage our game portfolio and not make hasty buying/selling and operational decisions. TRR will continue to follow the above trends and look for others. Analyzing trends is one of the ways we can get an idea of what the amusement game industry might look like in the next five years. And we can react accordingly.

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