If you need an example of how quickly the world is changing, and yet how much it remains the same, look at the latest Eilers-Fantini Quarterly Slot Survey.
The survey shows two very familiar names are at the top of list of companies shipping the greatest number of slot machines in North America—IGT and Scientific Games at 28 percent ship share each.
But it also shows some perhaps surprising upstarts making gains, including little guys like AGS and Incredible Technologies.
Further, small competitors all together sold 15 percent of the slot machines in North America in the second quarter, a figure that would have been unheard of just a few years ago when a handful of companies—IGT, Bally, WMS, Aristocrat—dominated.
This rise of the small manufacturer flies in the face of the conventional wisdom that big companies will dominate, that the costs of supporting a sufficiently adequate corporate and maintenance infrastructure and licensing in enough jurisdictions is just too great for small companies to sustain.
Indeed, synergies—the euphemism mostly for cost cutting—was a main reason for Scientific Games to buy Bally and WMS and for GTECH to buy IGT.
Yet, here are AGS and Incredible gaining 1 percent and 2 percent ship share, growing their base of leased games by 144 and 18 units each. More interesting, their machines are seen as outperforming. Among owned games, Incredible ranks first and AGS in performance. Among leased games, Incredible is first and AGS third with Aristocrat in between.
AGS and Incredible are just the newest upstarts. Ainsworth before them is now up to 6 percent ship share in the latest survey and the company is aiming for 10 percent. Konami has been in double digits. Both companies have built huge new facilities in Las Vegas as statements of their confidence and ambitions.
Another way to look at it is how much dominance has been lost. Not all that many years ago, IGT was around 70 percent market share, followed by Bally, WMS an Aristocrat, which gave precious little room for the small fry. Now IGT and Sci Games lead with just 28 percent each.
That cycle has been played out before. Before IGT, Bally once had 80 percent share. And Universal (now Aruze) was there, too, at one time.
Now, the dominance of the big companies might still prove itself in a future round of consolidations, though several of the small competitors have deep pocketed parents that can keep them in the game—Novomatic soon for Ainsworth, Apollo Global Management for AGS, Universal Entertainment for Aruze, Konami’s eponymous parent.
Finally, the survey might show that focus pays off.
While IGT and Scientific Games have become conglomerates providing lotteries and, in Sci Games’ case table games Aristocrat has stuck with its emphasis on slot machines and game design.
That, and a new emphasis by the Australian company on making decisions in the US, might explain Aristocrat’s stunning rise, as it achieved 21 percent North American ship share in the latest survey, up 5 points.
And why survey respondents credited Aristocrat with having the two top casino-owned games cited for top performance—Buffalo and Wonder 4—and the first and third best among leased games—Lightning Link and Buffalo Grand.
