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EDITORIAL: The Great Temptation

Posted On: 8/13/2008

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News came recently that Betson Enterprises and Incredible Technologies are once again working together. This development underscores an important fact about the amusement machine industry in 2008. For all its wrenching changes, this is still an industry where operators, distributors and manufacturers need each other.

That principle may sound obvious as a diamond on a dinner plate, although much duller. However, to many industry members, "mutual interdependence" is a highly debatable and emotional subject.

Oh, sure, promoters of industry unity constantly quote the wise words of AMOA past-president Dick Hawkins, who memorably observed: "We all eat out of the same cashbox." However, these days it might seem many members would prefer to dine alone.

The Great Temptation of the U.S. amusements industry at any time -- and especially in tough times -- is to believe that "We don't need each other. We can get by without those other guys."

You can hear the Great Temptation being voiced by those operators who say, "To heck with distribution; I'll buy new equipment direct." You can hear this point of view being argued by those operators who ask, "Another manufacturer is going out of business? Who cares? I can get by on the staples I've got."

You can hear the "We can make it on our own" theme song playing in certain distributors' offices, with lyrics that include "We'll diversify" and "We'll build our own equipment" and "We'll operate our own routes first, and worry about selling to operators later -- if at all."

You can hear the go-it-alone mentality expressed by manufacturers who say: "We don't need distributors." Or: "We only need a tiny handful of distributors." Or: "We'll use distributors to sell to secondary market segments, but let's handle the most profitable markets ourselves." You can also hear the "Who needs you?" mentality expressed by those manufacturers who say: "We don't need American operators. We'll sell direct to locations. We'll sell to overseas operators. We'll sell to ourselves."

Trade members who say these things don't always mean it, but many of them sure do like to hear themselves say it. Quite a few are just blowing off steam, of course. But some are trying out the Great Temptation for size, seeing how it feels. They are wondering if they are really ready to make the big leap, and take the big risk, of abandoning the classic industry structure that has endured for more than 100 years.

Total independence of operators, distributors and manufacturers from each other is folly. Want proof? Just call the folks at Bally Manufacturing, Bally Distributing and the Bally's Aladdin's arcade chain, and ask them. Oh, that's right, you can't call them -- they went out of business years ago. (Today's Bally has returned to its slot machine roots.)

These days, perhaps the strangest variations on the Great Temptation are heard in the context of the "one show" debate. Some voices out there are grumbling:  "We don't need their show...We don't need their association...We don't need them, period." Fortunately, saner heads usually prevail, but often not before a lot of ill will -- and worse, a lot of lost business -- has plagued the trade.

How to avoid the Great Temptation? It's not easy. The first step, and also the second, third and fourth, is to keep talking, even when it seems pointless to go on. (As Winston Churchill once said, diplomacy can be a bore but "Jaw-jaw is better than war-war.") And so, AMOA and AAMA are to be commended for the unusual step of seeking out a mediator to jump-start their stalled "one show" negotiations. Whatever does or does not result from the negotiations, it's encouraging to see that the leaders of both associations are too smart to yield to the Great Temptation.

Meanwhile, congratulations to Betson and IT...a couple of smart companies that need each other, and that are very much needed by the U.S. amusements trade.