The strangest of years!
Statistics out of the window as gaming industry goes to sleep.
by David Snook
It is a peculiar assignment to assess the state of the international amusement machine market in 2020. There has, of course, never been a year like it. The Covid- 19 pandemic has played havoc with the market and the usual comparisons of established base numbers in any one country are rendered meaningless. The only conclusion has been that the market has contracted rapidly and that the effect has been universal.
Whether it is games in arcades, family entertainment centres, leisure complexes, pubs, bars, truck stops, cafes, or any other type of leisure-based venue, they have uniformly been severely impacted. From kiddie rides at supermarkets to AWP machines in bars or in adult gaming centres, the pandemic has been equally devastating.
In every case, jurisdictions have been closed down to the industry – and virtually every other commercial activity – to some degree. It has ranged from total closure for months at a time, to inhibited opening hours or capacity limits.
In essence, incomes have fallen disastrously, by as little as 20 percent and as much as 80 percent. Some locations have stayed shut – even after the local lockdown has been eased, as owners failed to weather the storm.
Inevitably, it has meant that there has been an impact on the suppliers too. Sales of new amusement games and of new Awp machines, plummeted in the year. As high a fall-back as 70 percent is quoted in confidence by our contacts. Again, without naming names, they also report that once the full impact of the pandemic began to be felt in March, all development – or most of it – was moved to the back burner. With the cancellation of trade shows globally, there was no shop window, no meeting place, to market them.
It is also worth noting, however, that some of that markets that have come out of lockdown have bounced back more quickly than anyone expected. Some operators report that their business recovered to levels of 80-100 percent of pre-Covid days, which is outstanding news. It illustrates that some of the independent operators, while their confidence may have taken a knock bringing on degrees of uncertainty, applied themselves diligently to resurrecting their business and succeeded.
But sales are without doubt down. We asked Martin Riley, international sales manager at Sega for his view: “ We have seen many of the pre-Covid projects going ahead with their planned investments for a new year opening and where the products supplied is a mix of manufacturing and price considerations.”
That is probably something of an understatement. With locations locked down for months and operators looking at the very real prospect of their companies no longer being viable, there is a knock-on effect. Trade shows cancelling left no ‘shop window’ for new products and those products were in any case shoved to the back burner by developers with little prospect of marketing them and a lack of funds for R&D.
It has all be a vicious circle, leading inevitably to stagnation. Trade shows are currently unlikely to recommence until mid-year 2021.
Riley doesn’t agree. “I don’t believe that technology has been shoved on the back burner. If anything, this pandemic has given time for even more focus by R&D houses.” The natural optimism of a salesman? Maybe… he also doesn’t think that the pandemic has placed pressure on the Vr sector, given the heightened focus on sanitisation. “Yes of course there is a massive focus on hygiene and cleanliness of locations and products. Vr, however, has always provoked long-standing discussions and as an industry it is important that we talk about these issues from a product and location point of view and constantly manage these issues. “To be honest, I don’t feel that the long-term future hygiene issues will be much different from the understanding and standards that we operate now. People will do what they want when their own perception is that it is OK and safe for them, whether it is hygiene with VR or other safety issues. This has always differed from person to person and will continue to do so. We as an industry have to continue to offer the best and safest environments.”
And other games? Redemption, of course, continues to rule, but there are worrying reports from one or two countries about tickets and the over-sensitive in some jurisdictions are questioning whether they should be freely available to children. To the industry, of course, this is appalling and nonsensical, but where you have politicians keen to make a name for themselves, gambling is a ready target and ticket redemption the softest target of them all.
Italy and the Netherlands are now to some degree in focus on this issue, while France has always been. Otherwise, redemption rules and still accounts for 60 percent-plus of most Fecs’ floor income. Variety, of course, is the name of that game. So where has the disaster been most disastrous and where is it less so and where will recovery come first? Those in the know, like Riley and others, will have to concede that 2020 was awful for the US, Europe, Australasia and Africa, while Asia less so overall. China, Japan and Korea handled the pandemic well and came out of it first, although India continued at the end of the year to be in a pretty bad place. Other parts of Asia had different degrees of impact. And first out of it all will certainly be the Middle East. The word is, pray for the vaccine and with it renewed confidence. When will it be back to 2019 levels? We think four years – Riley believes sooner. We’ll see.