Indonesia is made up of 17,000 islands extending 5,150km east to west, between the Indian and Pacific Oceans in south-east Asia. The coin-op amusement industry has been established there for over 30 years. Helen Fletcher takes a look at what this exotic destination has to offer coin-op manufacturers...

Indonesia has a total population of over 221 million and the largest islands include Sumatra, Java, Kalimantan, Sulawesi and the Indonesian part of New Guinea. Islands are mountainous with dense rain forests, with some having active volcanoes.

Most of the smaller islands belong to larger groups, like the Moluccas (Spice Islands).

One of the countries hit hardest by the east Asian financial crisis of 1997- 98, the Indonesian currency dropped from about Rp.2,000 to Rp.18,000 against the US dollar and the economy shrunk by 13.7 per cent.

However, there has since been a slow but significant economical recovery.

Political instability since 1998, slow economic reform and corruption at all levels of government and business have contributed to the patchy nature of the country’s recovery.

However, there has not been a significant enough increase to make an impact on unemployment and stagnant wages growth, and increases in fuel and rice prices have worsened poverty levels in some regions, with 49 per cent of the population living on less than US$2 per day.

Game centre numbers escalate

In 2004 the number of game centres in Indonesia escalated to around 500 and mainly consisted of redemption games from Korea and China as well as second-hand simulators from Japan.

A new trade association was also being formed in Indonesia in order to lobby the government on entertainment tax and other legislative issues.

The government was proposing that the tax be increased from 10 per cent to 25 per cent.

At the time, according to Richard Koh, group president of Malaysian leisure company, World Equipment Group, this would have a devastating effect on the business.

Since then the coin-op market within Indonesia hasn’t experienced that many changes. Redemption is still popular, as are sports games, especially competition games such as street basketball, which according to Rachmat Sutiono of Funworld Prima, has an annual Asia Championship attached to it, which is organised by Saint Fun, Taiwan.

Most arcade and game centres can now be found in shopping centres in Indonesia and it would seem the trend for the country will concentrate on more upscale shopping centres since the development of new shopping centres and an increase in some of the nation’s disposable income.

Local government

According to Chaerul Kamal of Happy World, D Rachel International, in Jakarta, Indonesia, it all depends on which area of Indonesia a company operates in, as to whether it is currently enjoying success.

Kamal said: “Some areas are good, some are bad and some are doing OK, but it mostly depends on the regulation of the local government. The biggest operators are probably Timezone, Amazone and Funworld.

“Although redemption remains popular, it has been banned in some regions as either the police or government see it as a form of gambling, which of course has resulted in frustration among some operators.”

The government and its lack of support for the industry will be one of the contributing factors to ongoing problems for the coin-op industry.

This will of course result in an unwillingness from some operators to invest in new products.

However, Sutiono sees that as more and more products from China enter the country the industry will continue to grow, possibly by around 10-15 per cent over the next year and that many customers will start spending more time in outdoor recreation facilities.

“The next few years will be tough for the Indonesian coin-op market,” he said. “Revenue per sq.m will drop and space rental will increase. We also have to consider the recreation tax of 20-30 per cent from revenues, which is killing the industry.”