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Issue Date: Vol. 43, No. 4 / April 25, 2003 - May 24, 2003 , Posted On: 4/25/2003


The Calm After The Storm


N. Montano
nick@vendingtimes.net

A colleague recently asked us a question that left us totally stumped. Where is the excitement in the industry today? By which he meant: what is the single topic that dominates all conversations? Which niche market is suddenly attracting every Tom, Dick, and Harry to build the same type of machine or offer the same sort of attraction?

After a bit of thought, we had to admit today's amusements trade doesn't generate that brand of excitement. But we add this qualification: after a long, tough decade, today's music and games industry is finally seeing a resurgence of quiet confidence in itself, and a new level of professionalism.

That may not sound like much, but it's pretty good news after the roller-coaster ride of 1992-2002. Ten years ago, this industry was booming and feverishly excited. "Street Fighter Champion Edition" was universally hailed as the greatest video game since "Pac-Man." Trade members nationwide were already counting the billions they would soon realize from legalization of operator-run video poker.

What followed was a crash course in reality. A mood of nervous anticipation dominated from 1993 to 1996 as the industry slowly began to sense that holograms, virtual reality, and 3D pinball would not compete successfully with the Internet and a new generation of home video consoles. It was the calm before the storm, because what came next was six straight years of consolidation, suffering, and outright fear. From 1996 to 2002, many people and businesses left the industry. All the relevant statistics plummeted: machine sales, R&D budgets, and trade show size and attendance.

Today the industry's mood is finally growing steadier, if laced with grim determination in some quarters. Call it "the calm after the storm." The core components of this industry are evidently going to survive after all, even if it requires several more mergers. We feel no alarm as consolidation continues from Tokyo (where Namco and Sammy are vying to merge with Sega) to Chicago (where AMOA and AAMA appear to be talking seriously about merging their trade shows at last). And yes, the larger and healthier operators are still steadily buying up smaller, weaker routes. But the industry has gone back to basics, and there has been a revival of confidence that the basics will suffice. Pool is once again the top earner on the street route. Novelties (in the guise of redemption) are once again king of the arcade. Shades of the 1950s'why, even the puck bowler is back!

Meanwhile, the home video game industry and the Internet - two white-hot explosions that singed this business so badly in the 1990s , are at last cooling down. We're even seeing signs that both technologies could be successfully integrated into the amusements business. More impressive is the fact that a growing number of manufacturers are putting their games and jukeboxes online with efficient programs for remote management and tournament promotion. More and more operators are embracing these programs, too.

It may be another decade before a new core technology comes along that creates the next mega-boom on the level of 1897's "Nickel in the Slot," 1928's Wurlitzer, 1947's "Ballyhoo" pinball, or 1981's "Pac-Man." But in the meantime, there is still plenty of incremental improvement left to achieve. The next frontier may be finding a creative way to integrate operator-owned amusement machines with the cell phone revolution. With that trick accomplished, we'll be able to look back and realize this industry has truly done a creditable job of adjusting to the technology revolution of the past decade.


Topic: Editorial: Music and Games

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