Everyone from parents to President Putin is attacking the vending and amusement machine industry. As the key players gathered in Europe to launch a counter attack, we were there to see if all their cherries would come up in a row.
It’s the first day of IMA 2007, the trade fair for amusement and vending machines (IMA originally stood for International Messe von Automaten), with 138 exhibitors from 14 countries, including Germany, Austria, Taiwan and Britain. Pavel Blumel strides into the vast barn of the Düsseldorf Exhibition Centre. His company, Evona, is here to showcase what it calls its “complete equipment for electronic casinos”‚ the centrepiece of which is a giant eight-player electronic roulette machine called Octavia.
The fair attracts 7,000 visitors, mostly casino and arcade owners, scoping out the latest trends in gaming and vending. On the face of it, the industry looks as robust as Blumel suggests. The annual worldwide gross proceeds of the coin-operated game industry are just shy of €6bn, while the total sales of new games is approaching €400m. There are over six million vending machines in operation across Europe, bringing in annual gross proceeds of around €30bn.
But the figures mask a series of crises for the gamers and vendors. “Actually, we prefer to call them ‘challenges’,” says Lara Heiss, manager for Peaches, which is presenting a line of “new-generation telemetric vending machines. The vending and gaming market has taken a downturn in the face of changing legislation and evolving consumer patterns.” She offers a somewhat glassy smile. “It is up to us to offer something new.”
The gaming industry has been assailed on two fronts. The lack of any EU federal gaming or gambling laws, and the determination by some governments to regulate when and where and how much people can gamble, has led to confusion and uncertainty. In Germany last year, a law passed by the Bundesrat banned 60,000 “fun games”‚ (mostly gambling) and excessive jackpots, while specifying that maximum total gaming losses per hour in arcades should not exceed €33 per person, and wins per hour should peak at €500. This latter rule was widely regarded as being nearly impossible to regulate. The ensuing furore meant that last year’s IMA had to be abandoned.
Meanwhile, other countries are corralling gamers into gulags, metaphorically in the case of the UK’s planned series of “supercasinos”‚ but almost literally in the case of Russia. Once seen by industry insiders as a new gambling Eldorado, now President Putin has announced plans to sweep the country’s 5,000 casinos and 500,000 slot machines into four Las Vegas-style “colonies”‚ in “uninhabited and undeveloped areas”.
Across Europe, punters are also eschewing casinos and arcades in favour of interactive home-gaming and all-night TV gambling phone-ins. Meanwhile the vending industry has been caught up in the childhood obesity debate, with parents lobbying for healthier product selections and stricter safeguards on how much can be spent.
“It’s a very uncertain time,” mutters Blumel as he takes up his position beside a gleaming Octavia machine. “Everybody is watching and waiting.” Evona’s machines, like the Octavia, with its “combination of mahogany, leather and golden components”‚ and its “built-in ashtrays and cup holders”‚ or the BetX, a “fully automated online betting terminal”‚ were designed primarily with the Russian market in mind.
Almost immediately, however, his face brightens. “I heard that one of Putin’s colonies is going to be just south of Vladivostok,” he says, conspiratorially. “That means exposure to the Chinese market. And if we can get a foothold there, well…” The implications drift across the Octavia along with the smoke from Blumel’s Lucky Strike.
Marco Huter, of the Austrian gaming company Photo Play, is tackling the “challenges” from the opposite extreme. Photo Play markets its wares as “positive games”, which translates as ergonomically adjustable two-player consoles in approachable powder-blue colourways, with “socially responsible” games. “Photo Play games are all about competition, challenge and honour,” he says. “You cannot win money; only points and tournaments, so you advance in the rankings. We have no violence, no porn, and no gambling.” Instead, Photo Play offers music trivia quizzes in partnership with MTV, and a game called Revenge in partnership with the World Wide Fund for Nature. “This is a game where you throw tomatoes at poachers of endangered species,” enthuses Huter (Revenge did seem to be going down well, but not as well as a game on an adjacent stand called Extreme Hunting, where players shot at various hoofed and antlered fauna with a rifle, gaining points as they fell).
With Photo Play’s clout as the market leader in the “touch-screen sector” in Europe, and the worldwide number two, it hopes to change the typical gamer profile. “Most game-players are male, 35-plus, intense, on their own,” says Huter. “With Photo Play, a third of our players are female, and people play together. It’s more open and inviting. The only country where we have a weakness is the UK,” he concludes. “Because money-win machines are huge there.”
National preferences vary widely, and play a large part in target-marketing. “Trivia is very big in Scandinavian countries,” says Karin Scheidl, marketing manager for another Austrian company, TAB. “Germany is half cards, half skill, but Portugal is all cards. In eastern Europe, gambling is the highest priority. And in the uae, they love erotica.”
Given such national variations and the general miasma of uncertainty in the industry, it’s not surprising that various stands at IMA are testing out innovations, from arcade internet portals housed in giant private pods, to new-style old-school games like electronic darts and virtual bowling, where a real ball is bowled down a half-length alley before morphing into its on-screen electronic equivalent. “Eddie Murphy’s got one,” says Christina Schroer, the game’s marketing manager, by way of approbation.
But there is little room for innovation in the vending industry. The vendors claim that for them, flexibility is not an option. They speak wistfully of Japan and its 5.6 million machines, which sell everything from potted plants to toilet paper. “Japan is a special case, because of its high population density, limited space, and low rates of vandalism,” says Lara Heiss of Peaches. “In Europe, we’ve had to innovate in a different way. Heiss’s company is pioneering telemetry, or cashless vending; it has joined up with T-Mobile in Germany to produce machines that are activated by a pin-code from a mobile phone. “It’s already well-known in Scandinavian countries,” says Heiss. “In Finland, everything from gaming to parking is run on this system.”
Elsewhere, Sielaff’s Robimat employs a state-of-the-art robot arm that deposits your drink in a pocket at waist-height, because, says the company’s Timo Blanckertz fervently, “focus groups all said they disliked bending down to retrieve their product”. Many key players are putting their faith in DVDs. Dario Zatti of Easy DVD has a machine that stores 800 DVDs and broadcasts trailers of coming attractions. It is activated by fingerprint to ensure age-appropriate renting, and titles can be searched by actor, director, or genre (when “Porno” appears at the top of the genre search engine, Zatti shrugs: “It’s a very important category.” )
But the most radical vending machine at IMA isn’t really a vending machine at all. As well as being able to dispense 1,000 bills and 15,000 coins, the MCT “Multi-Cash Terminal” for casinos, from the German company Cash Management Innovation, boasts a “transponder-based stakes acceptance and winnings pad”‚ which, when activated with a key and debit card, will transfer jackpots into your account, or withdraw stakes as high as your account can bear, without any money having to be handled. “It’s the first step to the cashless casino,” says marketing director Birgit Bottcher.
Most exhibitors at IMA seem poised between the old, furtive world of mahogany cabinets and built-in ashtrays, and the brave, new world of welcoming consoles and telemetric transactions. The turbulence in the industry is real, but both camps seem sanguine about the future. It’s not only because they’re doing record business at the fair. “The Russians are here in strength,” says Blumel, “and they’re spending like crazy, despite it all.”
But it’s also because of the exhibitors’ faith in the eternal verities of human nature. As the fair is winding down, I go to say goodbye to Blumel. I find him on a Pirates Of The Caribbean pinball machine, his face a rictus of concentration, the lights flashing, the whole thing dinging and booming. Partitions are coming down around him, but he remains rapt.