Machines & Gaming: What next for pub machines?

The following interviews were conducted before Inspired Gaming announced the sale of its pubs division to Gamestec.Adrian Ah-Chin-Kow

Commercial director of Gamestec, number two in the pub machines market

Fruit machines haven't changed for 20 or 30 years, games haven't evolved and machine take is declining eight per cent year-on-year. Added to that, pubs with our machines are closing at the rate of eight to 10 a week, double that of last year.

The industry needs digital. Our big job is moving machines every 12 weeks.

We have 3,500 in Punch Taverns pubs alone which comes to 14,000 moves a year - and that's just Punch! That's a hell of a waste - the future has to be the remote updating of games that digital gives us.

In the long term there will still be people going into pubs and looking for complementary leisure activities. For us, the future will be product-led and we want to work closely with pub operators to understand what that will look like.Andrew Ludlow

Managing director of Games Media, a newcomer committed to driving the digital alternative

It's fair to say that the revenues generated by the traditional analogue AWPs have been in steady decline for a number of years and on the face of it the drive to digital, certainly in the case of the UK's largest supplier, has come a little too late in the day. Inspired's withdrawal from the pub sector is a clear indication that the analogue legacy business must change and the current financial model for those involved in the supply of this type of product type is effectively 'bust'.

Digital offers the only opportunity to create a consumer offer that appeals to the huge consumer base that currently does not engage with traditional machines.

If change doesn't come we will be seeing more casualties and stories of suppliers withdrawing from the pub sector. Ken Turner

Chief executive of Sceptre Leisure, number three machines supplier to pubs

The market is over-supplied with machines and has started to rationalise. There have been some silly prices offered to pubcos as companies fought for market share. That has combined with a four-year decline in cashbox takings in pubs, plus the smoking ban, plus pub closures. Machine numbers are falling fast in industrial heartlands.

Unfortunately, the digital revolution is still some way off. It will only work when pubs can offer bigger prizes. Betting shops have digital, fast-running fixed odds betting terminals with a £500 jackpot compared to a £35 jackpot in pubs. Pub machines are AWPs - for amusement - and not true gaming machines.

For now it's about getting back to basics. We have to work massively hard and we have to change and adapt. At Sceptre we try to do this through attention to detail, flexibility and simply working hard to drive income.

John Powell

SE Leisure and chairman of independent machine operators organisation the IOA Group

The smoking ban was just the final straw for Inspired - although I suppose it was a bit more than a straw! There are too many machines chasing too few positions with the result that the majors have undercut each other offering cheap deals and causing them substantial losses.

This itself has had an impact on machine earnings. We are seeing machines that are out of order longer and cash is not being collected, meaning the break-ins level is high.

Independent operators are doing very nicely out of this situation. We are leaner and fitter and can make faster decisions and we are getting a steady stream of new business. In the past few weeks a substantial amount has come from pub groups.

Brian Merriman

Managing director of Recaf, the largest independent machine supplier in the Midlands and South West

With Inspired Gaming's withdrawal causing pubs across the UK to review their gaming machine requirements, we have been working hard to meet the increased demand.

Keeping abreast of new developments in gaming is the key. Machine manufacturers such as Games Warehouse have worked hard to develop new machines that will keep punters in the pub. This investment is paying off with takings slowly crawling their way back up.

We have worked closely with Games Warehouse to supply machines that publicans demand and we are expecting a growing trend towards networked tournaments in 2008.