It is Showtime! It is G2E Time!

The time is near, the excitement is mounting and I can hardly wait. It is almost SHOWTIME; G2E 2015 is less than a week away. Next week, twenty plus thousand of the gaming industry’s top professionals will gather in Las Vegas for the biggest conference and trade show of the year. This year as every year, when people head off to G2E, they will be looking for a glimpse into the future of the gaming industry. G2E is the casino gaming industry’s most important trade show; thousands of people from around the world gather in Las Vegas because they want to know what to expect in the year to come. There have been two major developments that make this year particularly significant. First, in the past couple of years the slot manufacturing world has been radically realigned with major mergers and acquisitions. IGT and GTECH has become one giant entity and Williams and Bally have become part of Scientific Games. That puts most of the industry’s financial muscle into just two companies. That financial muscle will become increasingly significant to the industry. Those two companies will have very large research and development budgets, superior manufacturing capabilities and efficiencies and the ability to negotiate prices and terms that smaller companies will struggle to match. Last year, I speculated that by this year we would begin to see changes those mergers will eventually produce. Now, I am not so certain, but like everyone else I will have to walk the floors of the exhibit hall searching for signs of the impact of the mega-manufacturers.

We’re not a full year into the slot machine industry’s brave new world, and some members of the investment community have doubts about the future. After $16.8 billion was spent on mergers and acquisitions over an 18-month period, consolidation in the gaming equipment manufacturing has subsided. The buyouts created two slot machine monoliths — Scientific Games Corp. and International Game Technology. But they won’t control the market. Smaller companies increased their research and development capabilities, and the competition has impressed casino decision-makers. Howard Stutz, Las Vegas Review-Journal, 9-6-15

The second and probably the most important development that will shape this year’s G2E is Nevada’s newly released “skill-based” game regulations. It was welcome news for the casino industry. No one questions the need for something beyond the traditional slot machine, especially as Baby Boomers slide away and are replaced by Millennials. The next generation of players will demand games and activities that act like the devices they use to connect to the world; something none of today’s slot machines do. The manufacturers are always eager to explore new ground, but they need regulators’ approval and now they have it. Nevada has taken the first steps down the path into a brave new world. The journey is not going to be short or simple; compared to current slot technology and game characteristics, the products that are successful in the video gaming market are very advanced. It will be a long time for casino operators and regulators to catch up. But if the casino gaming industry is to make the transition from Baby Boomers to Millennials it is a necessary journey.

Nevada casinos will soon offer slot machines that could mix “Blazing 7s” with “Space invaders.” Regulation changes governing the use of skill-based and arcadelike features on slot machines was approved Thursday by the Nevada Gaming Commission in Las Vegas. The move opens the door for gaming equipment manufacturers to develop slot machines with a skill-based element. Manufacturing representatives said some of the new products will be on display at the Global Gaming Expo in Las Vegas later this month. Howard Stutz, 9-18-15

The stadium seating is full, the 500-strong audience lit fire red and ice blue. Gamescom, held annually in Cologne, Germany, is Europe’s largest video game fair…Professional eSports is growing exponentially. It’s worth an estimated $612 million a year…Twitch tells advertisers it has 100 million monthly viewers, who watch for an average of 106 minutes a day. Kamali Melbourne/ Matthew Campbell, Bloomberg, 9-8-15

So, walking around G2E, we will all be looking to see what new and exciting games are coming to our industry. Although we have been doing that for years, this year will be different. This year there is a promise of real change in the air; the skill based games represent that promise. Of course, people will flock to all of the slot booths as they do every year, eagerly trying each of the games being presented. And as always, casino operators will be looking for games their customers will like to play, games that make money for the casino and justify the ever-increasing prices. But, for most people, the skill games will be the main focus of the week. However, don’t get your hopes too high; it is too soon to get more than a fleeting glimpse of the possibilities. Maybe next year at G2E there will be some serious skill games on display and possibly by then the mega-manufacturers will have used their financial might to bring some other exciting and much needed developments to market. In the meantime, I am excitedly packing my bags and preparing to head to the airport – G2E here I come.


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