Extract from - 'The Stinger Report' - ''Amusement Trade Continues Restructuring! (Part 1.)''
Main REPORT:
As the new generation of amusement industries have come to the fore, so the traditional market leaders have had to adjust to some of the seismic tremors re-shaping the way business can and will be done. This feature looks at some of those new international methodologies, as well as the trade structures required to support them, and makes some surprising observations.
~ Direct Sales Events
A few years ago, it was frowned upon to even mention clandestine private meetings between distributors and manufacturers. Suggestions of price fixing and protective practices would result in the commentator receiving censure for even suggesting such practices. Now in 2010, a new attitude prevails, no holds barred activities to try and generate sales and maintain industry status are the order of the day.
~ United Kingdom
The trade in this market has worked hard to move beyond the tired, old publicity methods that had once been the norm. Criticisms that the trade was failing in representing itself, and its members, were met by various project launches, while in the UK a new trade event took place. The Skegness Event was held at the Lincolnshire seaside venue in the north of the country, with major distributors such as Electrocoin Sales, Crown Direct and UDC (United Distributing Company) joining forces to present new sales opportunities to the territory's buyers. Sadly this new event saw a poor attendance, and there were complaints of poor marketing support by the trade association and its executives. Attempts to brush this quite galling failure under the carpet to spare the blushes of those involved did little to encourage hope in trade association's ability to move forward.
However, while the new trade event concept floundered, a more tradition gathering still held firm.
Park Avenue Open Day ~ Overheated and overcast seemed a fair description of both the UK amusement scene and the weather that greeted visitors to its annual trade gathering. Hosted at the Electrocoin Sales and UDC offices, over the years the event has become a beacon, allowing operators, manufacturers and support to gather together in an otherwise diverse selling landscape, as well as providing a valuable barometer on the state of the market.
At the main gathering point of the Electrocoin warehouse a champagne reception, sponsored by Games Warehouse, greeted guests, while inside at the Openday the big news was the first appearance outside of Japan of the Taito release 'Elevator Action ~ Deathparade'. The Stinger representative was able to put the game through its paces, and also speak to the Taito international team in attendance, some of whom revealed that coverage in the Stinger Report had helped encouraged the decision to present and test the game outside of Japan. The game was impressive, and the play was very strong, with moves having been clearly made to ensure that the physical sliding 'elevator' doors had special sensors to avoid things being trapped.
Taito had a major presence in video representation at the event. Along with the new shooter the company also presented the first showing of the specially constructed Electrocoin standard cabinet for 'Panic Museum', with the UK small cabinet configuration offering a larger screen display than the ICE (US small cabinet) launched at Amuse Expo back in March. Making another appearance at Openday was the popular pogo-stick game 'Hopping Road', while the more traditional driving genre was represented by one cabinet of 'D1 Grand Prix Arcade' (D1GP Arcade). Electrocoin also had one of their unique mini cabinet configurations of the 'Chase HQ' series on display.
Electrocoin's unique relationship with the Japanese factories was underlined by the fact that Taito came to the UK with a launch title, while the exclusive sales relationship with Konami Digital Entertainment was also clearly evidenced by the presence of two 'GTi Club: SuperMini Festival' cabinets, hot from their recent EAG appearance. One of the big pushes was the International configuration of 'The Bishi Bashi!', following its EAG launch and with the machine now fully incorporating redemption ticket payouts for the three players. Clearly, the plan is to build on a successful Loctesting to jump on the bandwagon of growing popularity for redemption on the European scene.
Others supporting the Openday with attendances included SEGA Amusement Europe, who decided to bring two cabinets of 'SEGA Classic Racing', despite the game's continued difficulty in gaining popularity with buyers. Sega also took the opportunity to announce intentions to wow the industry at the end of the year with a new racing title, designed and developed in the UK (more information on this is due to be revealed soon). Meanwhile another supporter of the event was Namco Bandai's UK representative and distributor Brent Sales, who brought 'Tank! Tank! Tank!'
NOTE ~ Bandai Namco had announced only a matter of weeks previously the formation of a new international Prize Merchandise division based in London. Now the new division revealed that they had taken on an executive with extensive experience working across the toy, licensing and leisure sectors - most recently with Sega Prize Europe where he was central to the launch of the Sega Kids Division - to run the Namco project.
Other video amusements on display at Openday included Korean manufacturer VOGO's release of the ball throwing game 'Star Ball'. Meanwhile, and as usual, pride of place as given in the special display room at Electrocoin to three of the distributor's closest allies. First among these equals was Incredible Technologies with 'Golden Tee LIVE 2010' and 'Power Putt Golf', the latter being shown in one of Electrocoin's unique cabinet configurations. Next along was FunWorld with two examples of their popular touchscreen hospitality 'PhotoPlay' systems: one being a bar top design, while the other was an example of their upright touchscreen terminal. The last partner crammed into the room was STERN Pinball with its latest pins 'Iron Man' and 'Big Buck Hunter Pro'.
Crowds gathered in the main area to talk over the latest market developments and share the open bar and excellent signature Greek barbecue of the event, as sponsored by Crown Direct, Bell-Fruit Games, Konami and Coinslot journal. The remainder of the space in the Electrocoin warehouse was set aside for the latest Amusement With Prizes (AWP) and Skill With Prizes (SWP) gaming machines, as well as a strong smattering of the latest ticket redemption machines. Electrocoin chose this event to preview a joint venture with Lordsvale with an Elvis themed change-pusher that can be operated on a two pence or 10 pence (coin) basis.
Breaking Stinger News ~ Just as this feature went to the wire, Electrocoin / Lordsvale announced their intention to present a range of new products at the Preview 2011 exhibition, which was scheduled for October. However it would seem that the executives at both companies were unaware of the major developments regarding Preview ~ see below.
The adjacent United Distributing Company (UDC) also opened their offices and warehouse, offering hospitality with a warm welcome. The company, representing their exclusive partnership with Global VR, showed 'Twisted – Nitro Stunt Racing' in four cabinets (two DX and two Standards), while the company's relationship with PM Studios was also on display with a presentation of 'DJ Max Technika'. Along with these videos the company showed a horde of redemption and refurbished amusement titles. UDC also had a bar and refreshments, and the Stinger Report would like to thank all involved in the hospitality at both Electrocoin and UDC and their sponsors, for the good times that were clearly had by all.
Breaking Stinger News ~ Some UK industry sources stated consternation recently when an email was received from Cosmic Video Amusement (CVA) days before Openday that stated CVA was ''Global VR Product Experts for Repair & Spares'' ~ pointing interested inquires to a web page and a list of GVR related in-house solutions. The Stinger representative managed to speak to the attending GVR sales representative at the London event to question the email claims which was refuted. Following this CVA sent an email to the Stinger Report reaffirming their position as ''…primary past catalogue GVR spares and repairs company in the UK and Europe…'' On receiving this TSR contacted GVR who responding stating ''Not true...UDC is Global VR's primary & only authorized UK distributor...for game purchases & service.''
TSR was able to speak to CVA who clarified that they are selling spares and support only for GVR machines outside of their warranty with a extensive spares operation dating back to when they represented the line ~ they have no interest however in selling new hardware, but confirmed they have, had written proof of authorization on the representation of this role. CVA stated ''…what we happily do each and every day is repair and provide parts for GVR machines prior to Twisted (GVR's latest product). To the best of our knowledge UDC do not hold spare parts for the GVR back catalogue'' Why this confusion should even exist is a testament to the fragmented situation of the distribution scene in the UK, as well as internationally ~ and some of the horse trading being done behind the scene in fight to survive in imploding market conditions!
Back at Openday; and while the hospitality flowed, private cliques intent on intense conversation ~ and some gossip ~ gathered in earnest, with some serious conversations on the state of the market.
Cancellation of Preview 2011 ~ In its own right, what had become a Mecca for the amusement and gaming trade for over 31 years ~ the Howard & Wikberg Promotion organized event annually held in October-November, offers a convivial London hotel style exhibition. Harking back to a less overt exhibition but meeting and network style; its popularity as a gathering point for the trade to mix has been compounded by questions raised at the expense of exhibiting for some companies hard stretched under trying conditions.
Initially the organizers had addressed veiled criticism to embrace the needs of the amusement sector, and announced in May that they would continue to use the London Novotel hotel as their hub, but would moved to the ground floor Chablis Suite concentrating all the activities to this location, working to reduce the exhibitors expenses ~ offering a cost-effective solution at a reported £165 ($249) per sq., m., for a Central London Location, during October this year; cheaper than the EAG show and most importantly retaining the continuity of the established independent brand.
There had been accusations that executives of the UK trade association buoyed by their first successful EAG exhibition had then turned their sites to hijacking the Preview pitch ~ secretly floating the idea of running an October show of their own. After these rumors BACTA's executives were quick to dismiss any interest in running a second event, stating 'off the record' that those that claimed to be looking into this opportunity had not been sanctioned by BACTA, and would not receive their support.
But recently the show organizers had found it impossible to get significant commitment from exhibitors ~ the need for the new show floor layout had proven difficult, a seriously depressed amusement trade unable to commit to advertising and exhibition marketing making it impossible to seriously see the show as viable. It was under this shortfall that the organizers had to unfortunately bite the bullet and abandon plans for the show. In a press statement H&W executives commented that after careful consideration were forced to take the difficult decision to cancel this years' exhibition ~ to allow H&K to work on a re-structured 2011 approach.
One distributor spoke off the record to the Stinger that with the loss of Preview, the pressure to generate off season sales will quadruple ~ the situation already exists that certain key accounts demand private showings of games, separate to exhibition attendance. With the situation that forced Preview to remove itself from the scene the pressure will move more to hold 'private' presentations and with that the danger that an open and accountable industry ~ free of price fixing ~ will prove difficult to police.
Breaking Stinger News ~ Just as we went to the wire it was revealed that certain major distributors were moving forward towards holding private factory events ~ similar to small scale Opendays (just like the US scene ~ to be covered in our next report) ~ in the run up to the fourth quarter of the year, to fill the vacuum now left by the loss of the independent Preview! Response from overseas to the news of the cancellation has been very strong with executives stating ''…that elements of the UK trade press along with certain executives have taken their pieces of silver and have now taken the industry over the waterfall'' ~ strong language mirroring the level of consternation felt.
The loss in the matter of 18-months of the 60-yearold Amusement Trade Exhibition International (now replaced by the smaller EAG), and now the 31-year-old Preview exhibition ~ speaks seriously of the implosion of the traditional European amusement structure and with it the traditional market ~ one source suggested that what Preview use to generate in size is seen as only achievable by EAG. The inability for the trade association to solidify the situation has been reflected by news of attempts to oust certain executives of BACTA to address major shortfalls.
With the loss of such an important event as Preview the rift between those operating amusement and those trying to sell the products for this market grows. A hoard of operators that would normally populate the bar of the Novotel hotel, crest-fallen at a loss of a vital element in their decision process; with its loss a vital rallying point for the UK (and International) trade – a need for a positive move as the trade associations seem to undergo a major upheaval of their own!
~ UK Trade association change
BACTA ~ Having sustained crippling debts following an abandonment in subscription fee payment, and unexpected expenses incurred in supporting a challenge to proposed government tax legislation on SWP machines (see Stinger #747), the trade association has instigated a major reform of its operational structure. Questionnaires have been circulated asking for members' help in planning a new structure.
Attempts to address growing complaints, and membership abandonment, have seen new structures in which Category machines are supported as well as attempts to be inclusive ~ rather than exclusive ~ to membership, with plans to open up positions to all. But even at this early stage there were concerns when it was also revealed that there a new, unelected, top table of executives will orchestrate these new structures from the shadows. The industry is naturally nervous over the prospect that promises of accountability will not stretching as far as to these ''shadows'', especially after concerned voices raised the issue of vested interests 'redacting' previously agreed committee statements in circulated minutes!
Some reforms to the association have inevitably been forced onto the operation, with consideration that the elected chairmanship now to be reappraised and turned into a paid position. In the UK, new pressures have weighed heavily on the operational limitations of BACTA. With a new coalition government in office, previous issues of the FOBT, SWP taxation and under-representation of some sector have to be weighed against dwindling revenue and membership (and calls against certain offers activities).
One area of revenue generation for the association is the newly created trade exhibition. The EAG 2011 event has gained support with an early rush of exhibitor signings. Meanwhile the organizers have moved to a new larger hall of the expansive ExCel London Docklands exhibition center. Sources suggest that the 2011 event was moving towards sharing its podium with another trade group, although a decision on this move was steeped in secrecy. BACTA's decision to operate its own show last year resulted in a profit of over £200,000. However, with the need now to reduce the special exhibitor deals and focus instead on broadening the event's scope, discussions are under way to form alliances to achieve this goal.
As for the 'other' London show, efforts have been doubled to secure its footing beyond amusement support. The news that ATEI (now restructured under the IGE umbrella) has agreed to stay at the traditional Earls Court venue until 2015 in a five-year contract with the venue owners indicates that Clarion Events and EC&O to keeping their focus firmly on continuing to develop IGE as the leading international exhibition for the gaming industry (announcing new sales director hiring's).
Breaking Stinger News ~ As we went to the wire with this feature, sources revealed growing developments affecting the exclusive hold BACTA has on the UK amusement trade. A number of prominent Northern members and executives have raised concerns over the ability of the current structure to support their needs and have talked of a breakaway association. Just as the Openday was winding down information was revealed that the Scottish and Northern components of BACTA were working on separating themselves from the main body and going it alone!
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News Story with thanks to Kevin Williams.
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