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Issue Date: Vol. 45, No. 10, October 2005, Posted On: 10/27/2005

Counting Blessings, Sounding Alarms

Marcus Webb

The 2005 AMOA International Expo and Fun Expo was a once-in-a-blue-moon event. It took place against a backdrop of challenging business conditions, and in the aftermath of “the biggest natural disaster in U.S. history.” But rather than functioning as a barometer of tough times, AMOA/Fun Expo generated a surprisingly happy, optimistic mood.

AMOA director Steve Bodenstein of Game Exchange LLC (Marietta, GA), summed up the paradoxical situation. “Business is terrible,” he said flatly. “But there are some deals at this show that you’d have to be crazy not to take.” (Bodenstein also said an unprecedented booklet of AMOA coupons and show specials more than paid for his trip to Las Vegas.)

Good product and good deals explain the industry’s happiness only in part. Quite a few industry members simply appeared grateful to have survived – not just Katrina, but a decade-long shakeout that has taken a heavy toll on manufacturers, distributors and operators alike.

In addition, many of today’s surviving operators have eliminated both their debt and their local or regional competition. Consequently, a good number of these operators enjoy a very healthy cash flow. They were walking around Las Vegas exuding a clear sense of wellbeing.

Behind the scenes at AMOA/Fun Expo, however, some of the most successful manufacturers rang the alarm bells. One leading manufacturer said, not for attribution: “Confidence about the future is down among operators due to many factors including high gas prices, smoking bans, the spread of legalized gambling and even the threat of SARS. So operators are reluctant to make a large capital investment. The result is a customer who buys slowly, sometimes reluctantly, and in much smaller quantities than he did five years ago.”

This manufacturer pointed to an operator who used to routinely purchase 100 units of a major new product from his company. This year, however, that same operator has purchased just five of the signature new machines from the same source. If this trend continues, said the executive, the company will be forced to shift its focus to new markets beyond the coin-op industry.

An even stronger version of the same message came from another (absolutely top) manufacturer’s representative. For years their sales have been the envy of the factory set. Recently the company has hit a brick wall when it comes to moving new product. “We have got to do something to turn this around,” said the worried rep. “This industry cannot continue spiraling down, or in five years there won’t be an industry. In other industries throughout the economy, a long ongoing series of mergers and buyouts have signaled the demise of that segment.” Admitting that he was unnerved by parallel trends in the amusements trade, this longtime industry pro admitted: “I am doing all I can to get a niche in the consumer market.”

It’s not the purpose of this column to pour cold water on a successful trade show. AMOA International Expo and Fun Expo were both fine, well-organized, profitable events. Show organizers and participants are to be congratulated. As for that feeling of optimism and gratitude that seemed so widespread at the show…well, it’s always wise to count your blessings. This industry has plenty of good news, advantages and assets today – both in terms of this season’s solid product, and in terms of a wonderful group of several thousand core people who have come to know and appreciate each other through the course of their long years in the business.

Beyond that, I agree with AMOA’s new president Jim Pietrangelo, who said: “The folks who make up the coin-op business are an imaginative bunch and I’m confident we’ll… get our share of the entertainment dollars.” A lot of heart and a lot of that imagination Jim talked about were on display at AMOA International Expo and Fun Expo.

Topic: Editorial: Music and Games

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