Saturday, January 20, 2018 | Today's Vending Industry News
The Way Forward

Posted On: 12/26/2010

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The amusement industry is keeping up a good front. In public, most operators, distributors and manufacturers talk gamely about grinding it out until the next economic recovery, new technology, hit game or industry upturn comes along. Privately, there's plenty to be gloomy about ... no need to recount the reasons here.

But look beyond the bad news. You'll find a solid list of upbeat developments that are beginning to transform the coin-op industry. Put these positive indicators together and you get an eye-opening picture of an amazingly robust and profitable amusement machine business a decade from now. Key trends include:

The fourth screen. That's what The Nielsen Co. calls live monitors in public venues. The first three screens are (1) televisions in homes; (2) desktop and laptop computers; and (3) mobile phones. The fourth screen is found in public venues like bars and restaurants ... and it's one of the most exciting advertising platforms of tomorrow. Nielsen's latest survey has TouchTunes leading today's fourth-screen providers. By 2020, every new public-play videogame, dart machine, jukebox, redemption game, merchandiser, pinball and even pool table will be linked to this type of advertising network. Profits will be staggering.

The multiverse. In 2020, home and arcade videogames will not be competitors. They will be complementary media ... two equally viable portals, along with mobile phones, among other devices, that invite players to access the Internet, where hot new videogames will reside, replete with compelling nationwide or worldwide tournaments -- and the option for massively multiplayer online gameplay, or MMOG. This future can already be seen in Japan, where Sega's hottest arcade videogame is a Net-connected MMOG. This future is on view globally with a Namco arcade videogame that offers social networking. The amusement industry will rediscover a core truth: It doesn't need exclusive content. As with jukebox music, it simply needs equal access to universal content.

Sweepstakes. Operators of North Carolina, supported by the state's superior courts, have pointed the way to legally give players the risk-reward entertainment they crave ... and give the amusements industry a way to compete with legalized gambling. With all due respect to redemption, skill games will never be as popular as games of chance. People will always be thrilled by the idea that Lady Luck is about to smile on them. Sweepstakes games don't have to emulate casino games in their reveal phase to offer this appeal. The "McDonald's Defense" argues for simple fairness (i.e., sweepstakes games are legal because they are basically the same as a fast-food restaurant sweepstakes). And, the non-gambling nature of the equipment bares the amusement industry's great strength in its competition with slot machines. Legitimate amusement devices can go anywhere. Slot machines can't.

Telemetry. Today's vending machines can allow routemen to drive past locations and detect restocking needs from the curb. Even more advanced venders use cellphone networks to report these facts 24/7 in real time to the home office. Digital jukeboxes have equivalent capabilities for real-time remote reporting and management. By 2020 virtually every machine on amusement routes will be capable of linking to a universal remote management network. A huge percentage will be linked.

Noncash payment. It doesn't take a crystal ball to see this coming. Coin mechanisms and banknote acceptors are preferred by operators, who like dealing with cash. Readers for smart, debit and credit cards are preferred by the public, which prefers dealing with plastic (or up-and-coming contactless mobile phone payment apps). The customer is going to win this argument. Holdout operators will be forced to convert to cashless payment, like it or not. And -- surprise -- they're going to like it, especially when they see system prices come down and per-machine revenues go up.

Now combine all this together, squint hard and you can see, 10 years from now, the outlines of a vibrant, growing, vigorous market. You can see a market with $15 or $20 billion in annual revenues (double or triple its current size). You can see an industry that has recaptured its reason for being. You can see a restructured industry that has achieved undreamed-of efficiency.

Most of all, you can see an industry that has rebounded to attract new blood and bright young minds -- as well as major outside funding -- on an ongoing basis. Now, how do we get from today's industry to this shining future? The way forward is no secret. It requires hard work, open minds and willingness to invest and experiment. This industry has those strengths in abundance.