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Issue Date: Vol. 47, No. 9, September 2007, Posted On: 9/12/2007

EDITORIAL: Rumble, Rumble

Marcus Webb

If it feels like the ground is shifting under your feet, it is. Virtually everywhere you look in the coin-op amusements industry today, signs of significant change are becoming more and more obvious.

This year, we have heard more excitement from coin-op exhibitors at the restaurant, bowling and bar shows than we did from the past 12 months’ worth of national coin-op expositions. AAMA’s Location Trade Show program remains its most popular member benefit. These facts, among many others that could be mentioned, reflect the central reality of an industry that is looking beyond the traditional operator base and traditional locations for its next major growth phase.

Oddly enough, public, pay-for-play entertainment is arguably more popular than ever. It’s just that more and more competitors are providing it. Meanwhile, street operators say their traditional location base is shrinking for reasons that every reader of this magazine are all too familiar with. Then there’s the capriciousness of state governments, which may wake up any morning and decide to tax or regulate a section of the amusements business out of existence overnight. (Latest example: Ohio.)

So far, the industry’s response to all this has been puzzled, fragmented and frustrated. We’ve tried new technology and new alliances, with mixed success. Top manufacturers are exploring new markets, from slot machines to home theater products. We’ve seen outside investors with deep pockets ride to the rescue, both here and in Japan – also with mixed results. Associations have dabbled with industrywide marketing notions, but failed to find an approach resembling the successful campaigns that announced, “Beef: it’s what’s for dinner” or “Got Milk?”

Individual operators have either gone into “hunker-down” mode, or else have focused on buying competitors’ routes first, new machines second. Distributors increasingly reach out for vertical integration or diversification in various fields. This is very improvisational and reactive, not proactive. Not one of these responses counts as an industrywide strategic approach. I don’t have a magic solution for this industry, but if I were in charge of coming up with one, I’d draft a dozen of the trade’s smartest minds into a “Coin-Op Think Tank” and send them off for a week of brainstorming.

I would tell the Coin-Op Think Tank to come back with a plan that AMOA, AAMA and IALEI could support, one that would not tinker with the edges of the industry (such as merging associations or trade shows) but revamp the amusements trade from the ground up. I would charge them to include the following elements:

1. Find a way to “hide the cash transaction” on music and games so that in 10 years, customers won’t have to physically handle bills, coins or even credit cards to play most machines.

2. Agree on a simple, effective, $1 million yearly industry marketing program that will not yield “measurable metrics” (i.e., that certainly won’t boost machine sales in any direct, cause-and-effect fashion). Instead, the marketing campaign should simply offer a positive, “kinder-gentler” image of the industry as a whole.

3. Find a way for the amusements industry to become friendlier, and better integrated, with the Big G’s: government and gambling.

4. Recommend methods for the industry to jump on the runaway train of online communications and entertainment, rather than getting run over by it – which is what’s happening to many traditional industries now. (Newspapers, for example. Even The New York Times has been clobbered by the Internet.)

These four elements are the keys to this industry’s future. With them in hand, pay-for-play amusements can remain competitive, establish new locations and ally with powerful technology trends. Without them, we’ll just get more consolidated and depressed.

By the way, this Coin-Op Think Tank should hold its brainstorming session in one of two places. The Railroad Museum would be a stark reminder of what can go wrong. The Ringling Bros. Barnum & Bailey Circus would be an inspiring, fun reminder of how classic entertainment companies can survive changing times.

Topic: Editorial: Music and Games

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