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Issue Date: Vol. 50, No.1, January 2010, Posted On: 1/17/2010


How Operators Can Profit From Raw Thrills' Top 10 Success Secrets


by Kevin Williams
arcade videogame, videogame, video game, coin-op video game, Raw Thrills, Eugene Jarvis, Big Buck Hunter, Terminator, H2Overdrive, H20verdrive, Guitar Hero Aracade videogame creators, Play Mechanix, Betson Enterprises, Sega, Namco, Capcom, Atari, Midway, amusements, away-from-home entertainment, Kevin Williams, The Stinger Report

Coin-op videogame manufacturers, as a class, have come uncomfortably close to being put on the Endangered Species List in recent years. The number of videogame suppliers that are no longer with us is painfully long, from legendary U.S. giants like Midway and Atari to Japanese powerhouses like Capcom and Data East.

Many survivors, such as Sega Sammy and Namco Bandai, were forced to merge and expand far afield into non-amusement territory in order to survive (despite which, their annual profit and loss statements still don't look nearly as healthy as stockholders would like).

This rocky history makes it all the more impressive that a relative newcomer, Chicago-based Raw Thrills, founded in 2001, has succeeded in a tough industry during a very difficult decade of consolidation and retrenchment. The extent of the company's success is impressive. Not only did distributors vote Raw Thrills top honors as "Manufacturer of the Year" in 2007 and 2008, but leading operators have named Raw Thrills chief executive Eugene Jarvis as 2009's Man of the Year. The Amusement and Music Owners Association of New York will present this honor at a dinner on Feb. 8 in New York City.

The company's hit parade includes such titles as Target: Terror, The Fast and The Furious franchise (including the F&F Drift and F&F SuperBikes sequels), Big Buck Hunter Pro, Big Buck Safari, Big Buck Open Season (the latter in concert with sister company PlayMechanix), the recently previewed Terminator Salvation, and new hits like Guitar Hero Arcade and H2Overdrive.

It is clear that Raw Thrills embodies a new breed of amusement developer, steeped in industry history and tradition -- yet not afraid to try something different and new to generate player-driven revenues.

For operators, the two key questions are: "How did Raw Thrills do it?" and "What can aggressive operators learn from this manufacturer's success?" It turns out that -- although manufacturers and operators are very different types of business entities -- the strategy and tactics that have allowed Raw Thrills to prevail in this unique entertainment industry also hold valuable lessons for operators.

This column will outline 10 key lessons from the RT success story, and explain how these principles can be applied to the gritty reality of street operations as well as the daily challenge of FEC management.

Lesson 1: Learn your trade through years of hands-on experience.

Raw Thrills' founding executives Eugene Jarvis, Deepak Deo, and Andrew Eloff are all alumni of Midway. Jarvis is quick to say that he benefited from starting his industry career in 1977 with Atari as a game designer and from working with talented colleagues at Williams/Bally-Midway (where he not only designed videogames, but also pinballs). By the time RT was founded, Jarvis had already racked up 25 years of invaluable experience at his craft.

Most of today's operators can proudly say they are veterans who have also gotten their industry education at the School of Hard Knocks. Many operators grew up in the business, benefiting from generations of "institutional memory" in a family-owned company. Most operators are quick to say that wisdom gleaned from actual experience and from fellow operators has proved far more valuable than theories taught in classrooms.

Lesson 2: Build a great team.

The founding trio of Jarvis, Deo and Eloff gathered around them a tight-knit community of developers (some of whom have also come from the melting pot that was Midway). Starting with just seven key members, RT has gradually expanded to a roster of 25 as it has grown its portfolio from casino slot machines (designed for International Game Technology) to amusement video.

Successful operators also know the value of building a great team. While small operators necessarily do everything themselves, or with just one or two company members, they still realize that the fewer the people, the more essential that each one pull his weight. And whether in a large or small operation, the way to get the best out of each team member is to recognize what each person does best and let them have authority over (and responsibility for) that area.

Lesson 3: First be great at doing "just one thing."

(Remember, you can always be great at doing more things later.) Jarvis believes that Midway floundered in part because it lost focus -- attempting to triumph with pinball, arcade video, home video, and even a bit of redemption, and then casino games and more. Jarvis and his colleagues vowed not to repeat that mistake.

Although RT is active in slots and yes, its arcade hits are translated into popular consumer videogames, the passion and energy of the company remains squarely focused on coin-op video. RT is 100% committed to launch games only for arcade application, seeing "consumer-first" projects as unhelpful (at least for now) to their efforts to create great content for amusement.

This is more radical than it may sound. Today, "diversity" is the magic mantra for much of the corporate world. When Jarvis first floated the idea of an independent developer focused chiefly on amusement development, a horde of critics claimed he was crazy. Since then, RT's focus on the details and its dedicated approach have repeatedly proven the critics wrong.

Operators, too, benefit from "being great at one thing" at first. Even with a company that has diversified into street routes, FECs, and full line vending and owning bars and restaurants ... or perhaps selling security equipment, real estate or communications products on the side ... if they are successful with all this on their plate, it's because there remains a noticeable focus and discipline.

That may sound paradoxical. How can diverse operators combine breadth with focus? There are two ways: by setting up different divisions within a single operation, or by creating sister firms to the core operation. Don't let the dart league coordinator spend his mornings leasing commercial real estate, his afternoons stocking vending machines, and his evenings signing up dart players. He's liable to wind up putting darts in the soft drink column, and leasing buildings by using a vending contract. Instead, let the league coordinator run leagues; let vending pros handle vending; and let the real estate team sell real estate.

Lesson 4: Be an entertainer, and keep it simple.

When RT launched in 2001, the amusement trade could not foretell the staying power of its games. But from the very start, the company has worked to achieve a style of gameplay and graphics presentation that attracts the casual gamer and holds his interest. Rather than over-complicated simulations, simple yet fun gameplay has led to core playability that keeps cashboxes full. In short, RT always remembers that it's in the entertainment business, not the "super accurate simulator" business.

Operators, strange as it seems, sometimes forget they are in the entertainment business. Many street operators proudly say they are in the "moving" business. Some FEC operators brag that they are in the "marketing and promotion" business. That's fine, as long as it is clearly understood these are ancillary businesses. The real business of the amusement operator is to amuse -- to entertain. If the operator forgets to provide experiences and venues that are fun, all the moving and promotion in the world won't help.

Lesson 5: Respect the hits.

If you're in the entertainment business, then you are in a hit-driven business. The U.S. economy increasingly has no room for "mid-list" book titles, "fairly popular" TV shows, and "modest sleeper" films. Either it's a blockbuster or it's nothing. Raw Thrills embraced this principle through licensing hit properties such as The Fast and the Furious (remember, it was a hit film before it was a hit game) and the Terminator franchise. RT was an obvious choice when a safe pair of hands was needed to bring the million-selling Guitar Hero consumer videogame franchise to the arcades.

Successful operators also respect the hits. For example, it's no coincidence that play of Michael Jackson's music on digital jukeboxes peaked immediately after the singer's untimely demise, when he dominated the news for two solid weeks (at least). Redemption operators who stock prizes themed around current hit films also see profitable spikes in their businesses.

Lesson 6: Build your own brand.

Along with adapting hot movie properties and big consumer franchises, Raw Thrills has also worked to grow in-house amusement properties. When RT merged with Play Mechanix, they capitalized on the latter's popular Big Buck sports shooting titles. The line was expanded to include Big Buck Safari and Big Buck Hunter Pro, the latter featuring online tournament play.

For operators, building a brand is a more difficult task, but the best operators make it a conscious objective ... and a priority. Creating a recognizable identity in your market begins with company logos on staff shirts and jackets, to business cards, flyers and websites, but it does not end there.

Developing a reputation for great service is one of the most important brand-building tactics, but great service by itself is like a tree that falls in the forest with nobody to hear it. Successful operators also must capitalize on and promote strong customer awareness of great service. How? By bragging, directly and indirectly.

For example, have routemen and techs meet and greet location staff and owners every time they visit -- not just sneak in, clean and collect, then sneak out. If your company fixes down machines in record time, point out this fact by having the repair staff get a signature (with time stamp) from location personnel. Then remind the location of this record when it's time to collect.

Lesson 7: Remember the basics.

Raw Thrills keeps in mind that great software must be installed in solid, reliable hardware. RT continually evaluates cabinets to ensure the best mix of locally sourced components and custom-created firmware. Result: its IO-interface technology has become an industry standard.

The application of this lesson to the operating world is obvious: service, service, service. The latest and greatest equipment can't earn if it doesn't work. What's more, even a machine in perfect working order won't earn very well if it isn't clean and attractive. The male members of this male-dominated industry cannot be reminded too often that most of the women in the world look at a dirty machine these days and think, "Swine flu! I am not touching that!" (And they tell their kids to keep their hands off, too.)

Lesson 8: Teamwork.

Raw Thrills was founded with a unique relationship with their exclusive distributor, Betson. They split the marketing, manufacturing and development jobs; they share the expense ... and profits. This is one more huge difference from the management style at Midway, where executives tried to control every facet of the business in hopes of cornering all the revenues. Raw Thrills management knows "the laborer is worthy of his hire." Farming out marketing and distribution to the experts at Betson allows it to focus on designing great games.

Operators, for the most part, don't need to be told about the value of teaming up with a great distributor. But some operators do need to be reminded that the "right" distributor can be an invaluable ally.

Lesson 9: Market to your ultimate customer, the player ... not just to the next level down in the business chain.

Both audiences are important. Raw Thrills (and Betson) work hard to promote its games to the trade, but also to players. They aggressively apply social networking to broadcast their message. RT and Betson work with the consumer media as well as trade press, garnering international recognition for their product and methodology alike.

Operators should also take a "multi-market" communications approach. Those operators who only deal with locations are needlessly limiting their earnings. Today's professional street operators focus on music programming, league promotion, and videogame tournaments. Today's FEC professionals do couponing, newspaper advertising and website marketing ... to players.

Lesson 10: Get connected.

We live in the age of the digital network. Raw Thrills knows players spend their lives chatting on Facebook and texting on cellphones. Videogame connectivity -- and, in particular, online tournament applications -- keep videogames "connected" to today's generation of players.

The success of Big Buck Hunter (after Play Mechanix retained the original franchise from Incredible Technologies) taught RT that it needed more than a dedicated tournament with strong online content and support. It also needed a dedicated infrastructure. Their CoinUP is not the first of its kind in the industry, but it is becoming one of the trade's most ambitious tournament platforms. Eventually CoinUP will support a whole series of titles, not just one game.

Many operators seemingly have a love-hate relationship with networked equipment. They hug their digital jukeboxes while looking askance at networked videos, questioning whether tournament fees or technical hassles are worth it. But forward-thinking operators (such as AMOA past-president Howard Cole of Cole Vending, Weaverville, NC) are anticipating the day when videogame content may be streamed to a local terminal and never stored on a game's hard drive at all. Meanwhile, the members of Club Lucky and others have demonstrated that a determined operator can find a way to make online tournaments work on the operator's own terms.

Bonus lesson: Stay focused on the future.

Raw Thrills released Target: Terror six years ago, but this shooting game still makes handsome revenues for many operators. Yet Jarvis and company refuse to rest on their laurels. In 2010 they will bring shooting videogames to a new level with Terminator Salvation.

Operators who plan to remain leaders in the amusement industry don't have to be told to adapt themselves and their businesses to new technology. It's a daily challenge and they meet it conscientiously, even if they sometimes find it bewildering to try to keep up. The alternative, as current AMOA president Gary Brewer likes to point out, is becoming too "satisfied" (read: complacent) with current business ... which is a sure road to eventually not having any current business, because the times have passed you by. Just as Eugene Jarvis and RT clearly get a kick out of employing new technology, the best operators say they enjoy the challenge of an industry that's different every day.



KEVIN WILLIAMS is founder and director of the out-of-home leisure entertainment consultancy KWP Ltd. His nearly 20 years experience in global video amusements and high-tech attractions includes top management and design posts, with a focus on new technology development and applications. He is a well-known speaker on the industry lecture circuit, and has authored numerous articles. Williams is also editor and publisher of The Stinger Report, a leading industry e-newsletter and Web-based information service. Go to thestingerreport.com to sign up for a free subscription.


Topic: Guest Columns

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