Machines & gaming: game over for AWPs?

Fruit machines have for many decades been an integral part of the pub scene - and a vital source of extra income for many publicans, too. But now the licensed trade is facing a crisis which could see the end of the AWP machine as we know it.

The smoking ban introduced in Scotland earlier this year has accelerated and highlighted an underlying decline in pub machine take.

Norman Crowley, chief executive of Inspired Gaming Group, believes the downward trend is running at between five and eight per cent. And because the core player tends to be a smoker, a ban on smoking could double that.

"Fruit machines used to contribute as much as 30 per cent of a pub's profits," he says. "So the declining take is a real problem for pubs."

Norman is clear about blaming a lack of innovation by machine suppliers and a failure to address growing competition for the gaming pound.

"In 1985 households had four TV channels, a phone and a stereo. In 2006 they've got broadband, goodness knows how many TV channels, wi-fi and an i-Pod which plays thousands of tracks. There is a digital experience in every home - and people are spending a lot of money on it, money that they aren't spending in the pub.

"And if you look at fruit machines in pubs in 1985 and today, there's no difference! It's no wonder there's a decline in take."

In contrast, the fixed odds gaming machines that have emerged in betting shops over the past couple of years - which have themselves stolen a large proportion of pub AWP income - have seen bookmakers' take soar by 40 per cent.

"You can map the increase in take in bookies against the declining take in pubs and it matches exactly," says Norman. "Then there's the explosion in poker to which there's been no response at all from the machine market."

Pubs can, and have, turned to other profit streams, in particular food, to address the problem. But Norman believes that the machine industry itself also has a solution to hand - what Inspired has come to call server-based gaming (SBG).

This is not new. You might already be enjoying the benefits of internet-linked machines such as Inspired's Itbox or Gamestec Leisure's Gamesnet. Those fixed odds machines also count as SBG. But the technology still has a long way to go in pubs, in particular in applying it to AWPs.

There is a cultural resistance to doing away with the mechanical spinning reels, which a change to SBG would entail. But Norman thinks the objection is unfounded.

"People say that players like to see spinning reels. But they don't have them in betting offices and you have to ask why SWPs, which don't have reels, do so well in pubs."

Reels have also disappeared in Australia, where machines have seen a staggering 300 per cent uplift in take since SBG replaced traditional fruit machines.

And Inspired has recently carried out an experiment with one major pub group which demonstrated that a switch to SBG can give an average increase in machine take of 172 per cent.

Norman also points to the success of digital jukeboxes to show that perhaps the pub-goer is a little less conservative than we sometimes imagine.

"Our server-based digital jukebox has 2.4 million tracks as against 700 in a CD machine. The trade said they didn't want it and the consumer said they didn't want it but it works - they take four times as much money!

"There is an element here of these figures being too good to be true," he admits. "But we're trying to get everyone to realise the potential here. To be fair, the pub operators are saying bring it on - it's the lack of innovation in the industry that's been the problem."

To help get the message across Inspired is organising a seminar in November at which pub operators can hear about the experiences of other sectors - and get a chance to see for the first time a server-based fruit machine that Inspired has designed specifically to address the industry's problems.

"It's time for makeover, as they say on TV, and now we're doing something it's very exciting," concludes Norman.