InterGame brings you our annual report on the international redemption market. Over the next few pages you will find all the information on the countries currently providing the best opportunities, what’s trending at the prize counter and which games are really filling the cash box

US

The US remains one of the leading markets for redemption. Not only has the product type been operated up and down the country for at least the past two decades, making its operators some of the most knowledgeable in the industry, a large proportion of the leading redemption titles around the world come with the “Made in the US” tagline. While the pay-to-play industry in the US is now saturated with redemption titles there are still definite opportunities for new business and the more pro-active operators out there are constantly looking at new ways to diversify and move their business forward.

For Frank Seninsky, president/CEO of Amusement Entertainment Management, redemption in the US has accounted for the largest percentage of game revenue for the past 25 years and reached a high of 70 per cent a few years ago.

“Twenty five years ago redemption was at about 50 per cent,” he tells InterGame. “The transition of video from arcades to the home over the same time period opened the door for redemption to increase. However, with the strong earnings of the instant redemption sector over the past few years, ticket redemption has dropped to approximately 65 per cent in FEC game zones. If it wasn’t for redemption (ticket or instant) I believe that a significant percentage of FECs would be forced to close in the US.

RUSSIA

As noted in our special report last month, the amusement market in Russia has really started to come into its own of late and is considered one of the key areas of potential growth in the industry. Operators are moving away from second-hand equipment and are looking to offer their customers a more high-end entertainment experience, which is being reflected in the style and quality of the locations springing up across the major cities.

“Redemption games have had huge benefits on the development of the amusement industry in Russia,” BB&B’s Alexander Petrov tells InterGame. “It’s a segment of the entertainment market that continues to grow every year and they are also bringing in the majority of the profit within the entertainment centres.”

Redemption games account for around 60 per cent of total annual sales in Russia, of which there are around 2,000 and while all types of games are popular, sports games and sport simulators are proving particularly popular at present. “This is because of their compliance with the FEC conception,” says Petrov. “They are interesting for players of any age; children and adults together, they bring energy to a location. Russia tends to popularise active recreation and proper child development, that’s why sports games are becoming more and more popular.”

MIDDLE EAST

The redemption sector has always been a main area of focus in the Middle East, which combines all elements of entertainment under one roof in large-scale FECs and indoor theme parks.

For Middle East operator Fun City, redemption has always been in the “epicenter of growth” and it sees that moving forward, videmption will dominate the sector, changing the whole experience for the players.

“Redemption machines and the novelty of winning tickets and lots of them on players’ favourite games has kept the pay-to-play industry alive,” says Fun City’s Shreyes Menon. “The games that tend to perform well in the Middle East are those that offer high payouts, big jackpot values and are presented nicely. We have had particular success with Big Bass Wheel, Galactix, DOND, Stinky Feet, Space Ballz and Treasure Quest. These days, anything big, placed appropriately and presented gracefully tends to do well; add good game play/mechanics with good payout and it is going to be a success.

“Players in the Middle East like winning big and winning instantaneously,” continues Menon. “Higher quality products have created appreciation and brand loyalty as players tend to hold on to their tickets to redeem the higher end products. The redemption sector has been extremely strong in the Middle East and has been a major contributor in terms of sales. There has been quite a lot of growth in the area of instant redemption and merchandisers of late as well.”

ASIA-PACIFIC

Timezone is the largest operator of FECs in the Asia-Pacific region, dedicating around 55 per cent of its game space to redemption, with a 30/20 per cent split between ticket and instant win redemption pieces. Some of its top performers include Monster Drop, Demon Hunter, Big Bass Wheel, Fruit Ninja, Speed of Light and Frogger.

According to Greg Barclay the reason these games perform so well is because they are either quick cycle or engaging. “Big screens, big footprint, bright, colourful and they present a challenging fun and rewarding experience,” he tells InterGame. “The newer type of video redemption games are also starting to immerse the player into a challenging environment; they are well planned and executed by the manufacturers.

“Key components of these games include the visual nature of the cabinet, an immersive game play which was previously only available on arcade games, a large jackpot to entice players, a link to either television game shows or some sort of ‘real world’ experience.

EUROPE

The redemption market across Europe is still relatively new in areas and it experiences varying levels of success. The street market is mainly dominated by the AWP and more recently the VLT (low-payout machine) with amusement taking a back seat a lot of the time. Things are beginning to change, however, as operators get their head around the idea of redemption, with the UK currently providing the most promise. 

Gary Bond of UK operator Leisure 2000 first tried redemption 15 years ago and “got my fingers burnt.” He entered the fray again, however, four years ago and hasn’t looked back since. “Redemption has become a major part of our operation,” he tells InterGame. “Players now fully understand the concept and when they go to the seaside, they expect to see redemption games in the arcades.”

He thinks the key to it is the fact that the whole family can go into an FEC and play the games together – and they can walk away at the end with something to show for it. “It’s definitely family based,” he says. “There is something for everybody and everyone can get involved.”

However, Bond has one caveat. “When it comes to redemption, as an operator you have got to do it properly. The operators who are running redemption properly are doing much better than those who aren’t. It is time consuming but you get back what you put in. Redemption has certainly proved very worthwhile for us.

INDIA

India is still a relatively new area of growth for the pay-to-play industry and is a market that many have a keen eye on. As the number of shopping malls continues to increase so do the opportunities for high end entertainment.

Rohit Mathur of Indian operator CSML has seen redemption become the most important part of the amusement industry across the country in recent years and he tells InterGame: “It has grown to very big heights very quickly. Arcades in India used to comprise of 70 per cent video and 30 per cent redemption, however in just the past two years this has completely changed around.

Trending at the counter

Strong redemption titles are of course important in any location, but without strong prizes to go with them the desire to play the games would be drastically reduced

Customer expectations have increased dramatically over the years, forcing the pay-to-play industry to up their game and look for quality, desirable prizes that cover the full spectrum. Even the small novelty items that don’t require as many tickets need to have that ‘must have’ appeal, whether this is through the use of a licence or a generic item that still has the desirability factor.

Then there are the high-end items that have begun to make more of an appearance, used as ‘bait’ to draw the player in and get them spending; appealing to teenagers and adults.

There are plush and novelty specialists catering for every operator’s prize needs all over the world and every market has its individualities and tastes. Namco Europe launched its prize division just a few years ago and while still relatively new to the market, it has already enjoyed remarkable success with several of its product lines, most notably the Kyoto range of electronic goods, which includes a tablet computer, portable DVD player, HD video camera and Netbook computer.

This report can be read in full in the July 2012 issue of InterGame magazine