Reflex Gaming’s MD, Quentin Stott, gives us his impression of the gaming machine market in 2017 and how his company is leading the charge for contactless technology.
Coinslot: How do you think the gaming machine sector fared during 2016? What are the key challenges facing it in the year ahead?
Quentin Stott: 2016 was witness to another year of a changing marketplace. Digital Cat C continued to gather market share through increased income levels for some products, the knock on effect being a reduced number of analogue machines produced.
There were further major acquisitions in the single site and AGC operational side of the business, and the year ended with the news that a major pub retailer may be acquired by an existing pub retailer in a move that could create one of the biggest pub owning businesses in the UK. These changes occurred alongside a backdrop of growth in the remote side of the industry, which now accounts for nearly a third of all gambling spend in the UK.
These changes have been big enough in their own right, but on a macro level, we are also seeing a complete shift away from cash spend amongst the key demographic of our machine player base. This trend is not just increasing, but spiralling, and although the National Lottery and remote gaming companies can take advantage of alternative payment methods, the land based machine sector is currently floundering in this regard. Our sector is having to look at how it will adapt to this social change, bearing in mind that legislation in this area is currently against us.
At Reflex, we’ve been one of the early champions in raising this issue, not only with our operator and retailer customers, but with trade associations and our regulator too. In fact, we have, together with a technology partner, started developing a concept which could facilitate contactless payments being used to facilitate machine play in pubs.
CS: Is there space for analogue and digital games to co-exist in the pub market?
QS: I’m sure that there’s space for both product variants in the pub market. I think the question is more, what percentage will digital settle at, and how will that affect the machine supply route politically.
It’s becoming increasingly clear that the supply of digital games is much more politically driven than the supply of analogue games. This is an evolving proposition and it will be interesting to see how far this develops, bearing in mind of course the pub retailers position in this.
At Reflex, we continue to develop analogue games and are investing heavily in this area. Equally, we are investing in new resource and new hardware to make sure that our digital proposition remains commercially competitive for our operational customers whilst driving increasingly healthy income for pub retailers.
CS: How does the uncertainty over the results of the Triennial affect your approach to EAG?
QS: It is always difficult working to an unknown, but sadly, the industry has been in the position of uncertainty all too often. As a manufacturing company, we are dependent not only on successful products, but also in the willingness of our customers to invest. The closer we get to the implementation of new stakes and prizes, the more likely it is that our customers will hold off investment pending new stake and prize levels.
Thankfully, we’re not in the camp of stakes and prizes being the “be all and end all” of gaming machine development. They are, of course, very important to the overall trajectory of product development, and something industry has relied upon to fend off stagnation. However, at Reflex, we very much feel that progressiveness in gaming machine technical standards and payment methods are as equally relevant in today’s marketplace.
When it comes to approaching EAG, we will do what we have always done – create the best products we can for today’s marketplace, using the current legislation. We have an eye on making sure our latest games can be updated to new stakes and prizes when introduced, but in the meantime, we’ll innovate for today and plan for tomorrow.
CS: How did Reflex’s forays into the FEC sector go in 2016 and is this something you’ll look to do more of in 2017?
QS: In 2016 we released our first three-player Category D game called “Lady Luck Moonstruck”. Not only did it look great, but it outperformed many of the best known games in this class. Having only launched the game last September, we go to EAG with great income results and repeat orders from early adopters of the product.
Looking to 2017, we’re showcasing our “Mortal Wombat” 3-player ticket redemption game. Again housed in our mini-cabinet and with a mind-blowing visual appearance. We’re acutely aware that redemption machines have continued to perform well over recent years and we’re having a focussed push at making Reflex a successful brand in this area.