Slot makers close gap

Oct 12, 2004 4:28 AM

Slot giant IGT may be feeling the pressure of more competition.

"Finally," a senior gaming industry executive was telling me, "We have some attractive options from companies other than IGT. Aristocrat is much stronger now in every category. WMS has done a good job."

The exec was referring to what’s new and very hot in the big, wide world of slot machines, everything from reel-spinning games to video creations. He was one of thousands from around the world who scouted the new products on display at last week’s Global Gaming Expo (G2E).

One of the highlights of the annual expo is that it offers the best chance to see all the latest in slot technology under one roof.

My friend, who did not want to be identified since he hopes to maintain good relations with as many companies as possible, was telling me that new games from companies such as Aristocrat and WMS are going to make long-time industry giant IGT feel the hot breath of competition. It’s a guarantee, he said, noting that Aristocrat and WMS are currently selling about 80 percent of their inventory whereas IGT is a number of points short of that.

"I don’t expect IGT to lose its No. 1 position in the business anytime soon, but IGT is being pressured. For instance, WMS’ hiatus has done the company a lot of good. It has some nice new developments."

WMS was effectively out of the new product business for a period of time as its research and development people regrouped after a number of software glitches.

Licensed games based on famous personalities or brands will continue to be produced by a number of companies — there are too many existing agreements for this not to be the case — but the shelf life of these games will continue to shrink.

There were also warnings about not straying too far from the basics. Slot companies are technologically capable of doing more than the market will accept.

Remember all those furrowed brows a few years ago about whether slot players would respond favorably to those new fangled ticket-in, ticket-out systems? Those systems are everywhere now. The old wisdom was that customers enjoyed handling the coins and toting buckets of them around a casino. But that proved to be false.

Game makers also be aware of how "innovative" new games need to be.

As another source explained, "There’s a lot of very attractive technology out there, but what it comes down to after you get past all the bells and whistles is that players want a good gamble."

Short Shots

The Rio is not for sale. It’s expected to generate some $120 million in cash flow this year, better than it has ever done. Harrah’s Chairman Gary Loveman heard the speculation about a rumored sale and put out a memo to Rio employees saying it is not going to happen (even though everything is for sale at the right price, as we all know). Harrah’s spokesman Gary Thompson says, "One thing we want in Las Vegas as we move forward is real estate, and the Rio has developable real estate."

It does not take much to distort history. Sometimes nothing more than a bad memory will do the job very nicely, thank you. A certain UNLV professor who was recently quoted in a Las Vegas newspaper giving the Hard Rock Hotel and Casino credit for turning the gaming industry toward a new direction, something thought of as the "total resort" concept, should do his homework a little more thoroughly. It was the 1989 opening of The Mirage that deserves credit for inventing the "total resort" concept, in other words, gambling and a lot more. The Hard Rock (opening several years after The Mirage) is indeed a fun place, a nice place. But what it should get credit for is showing that a well-known entertainment brand could successfully move into the casino business. The Mirage was the first to show the industry how significant non-casino revenue could be.

Minnie Madden’s Call Back, a local entertainment trade paper, hopes to emulate the success of what we now know as G2E. The Expo began some 17 years ago in Atlantic City as the World Gaming Congress. That first show had about a thousand attendees and that figure is probably stretching things. Madden notes the increasing importance of entertainment to the gaming industry and has scheduled the first "Entertainment Expo" Oct. 27 at the Golden Nugget. It’s already a sellout, as far as exhibit space is concerned.