Executive Q & A: Aruze Gaming America investing in people, products to establish firm toehold in global gaming market

Las Vegas-based Aruze Gaming America is an affiliate of Aruze Corporation, owned by Japanese billionaire Kazuo Okada. The company develops and manufactures hybrid LCD high-resolution, video and stepper slots, multiterminal gaming devices, systems and other products. Until recently the company has kept a low profile, but with the February acquisition of True Blue Gaming Group and the hiring of some key personnel, the company has been making inroads into new North American markets and appears poised to make a statement at the Global Gaming Expo this month. Slot Manager Editor Marian Green talked recently with Aruze Gaming General Manager and Executive Vice President Kent Young, who came aboard as part of the acquisition of True Blue Gaming of which he was president and CEO , about the company’s strides and goals for expansion.

Could you start off with a brief history about the company?

Aruze as a company has had an interesting past both here and in the international markets. Aruze Gaming America is now a private company that came from a company called Aruze Corp., which was listed on the JASDAQ [Securities Exchange] and still is listed on the JASDAQ, but which is now called Universal – they just announced a new name. That company developed pachinko and pachislot and also traditional casino slots and multiterminals. We pulled the traditional casino slots and multiterminals and other technology out of Aruze Corp. into what’s now Aruze Gaming America. Aruze Corp. in this market was also known as Universal and in Australia as Pacific. At one point in the mid-’90s, Universal was actually obtaining the highest new unit market share in North America. That was the Gary Harris, Randy Adams’ Magnificent Seven days.

Talk about what happened with that game?

It was a new concept to the North American market at the time, and Magnificent Sevens was highly successful, and it used a concept which was referred to as “near miss,” which was deemed by Nevada gaming, not against the standards as such, but it was seen to be not in the right spirit. It was around that time that Mr. Okada saw the opportunity back in Japan in particular in the pachislot segment of the market where throughout the ’90s and the majority of this decade, he’s obtained the highest level of market share in the Japanese domestic market. That was his focus because he saw that as a huge opportunity. Now this year, with the acquisition of True Blue and the team that we’re building, Mr. Okada’s vision is really to build Aruze Gaming America in the traditional casino market globally, with the view to eventually do an IPO with this segment of the business so he’s really moved from a domestic Japanese focus to more of a global, traditional casino gaming approach, based on a few things that are happening in Japan, and also seeing the global traditional casino market as a big opportunity in the future.

What does the acquisition of True Blue bring to the table?

First and foremost I think it’ll allow another flow of content, a separate brand from the Japanese Aruze content. So we now have two flows of content, one from Japan and one from Australia. And then we also have software development in The Philippines, which helps to integrate the games. Really we see it strategically as more entertainment-style content coming out of Japan and more gambling-style content coming out of Australia so we’re confident in terms of slot content that we will have a very broad range of product covering multiple end users’ requirements. And you’ll be able to see at the show this year that within those two brands are very different styles of products.

Aruze's Rock You Queen game features music clips of the iconic rock band and a "bicycle race" bonus.

How is your strategy in the North American market working out?

Good. We’re very aggressively trying to get licensed in multiple jurisdictions. In our existing jurdisctions, we’re being very flexible in terms of the way we place our product. We’re doing trials, and we’re getting excellent performance out there. We’ve got a few games that are helping us to drive into the existing market. Shen-Long and Legends of the Qin Dynasty are two games in particular that are doing very well. So we’re going bank by bank, property by property, targeting key properties so that strategy’s working very well. We’re doing very well in both Southern Nevada and Northern Nevada. And in Southern and Northern California, we’re doing well, and we’ve also had our first install in Oregon. Those are the three markets we’re in currently, and then we’re very aggressively moving into other jurisdictions such as New Mexico, Mississippi, Pennsylvania, New Jersey, Florida and Oklahoma.

At the same time, we’re building a very comprehensive product portfolio. As I just mentioned from the game side we’ve got two flows of content; we’re broadening our depth of product within the slot range, so we’re doing video. We’re doing stepper; we’re doing hybrid. We’re also doing some licensed products. We’re doing some jackpot products, and we’re doing some communal products. So that’s on the slot side.

We’re also investing very heavily in the multiterminal segment, taking from where we’ve had great success in Asia for our multiterminal, and we’ll have multiterminals approved in this market this year, so we’re doing roulette, black jack, Sic bo, baccarat, craps. So our strategy is we build a very broad, strong portfolio of products, but products that will stand out from the crowd a bit, and we want to really create a point of difference. The other area we probably utilize with our products is the technology that stems from our Japanese origins, so for example the Transmissive Reels. We were the first ones to bring that to market in North America. We’re obviously going to utilize that a little more moving forward.

Our actual hardware that drives our games from a technology perspective, without being biased, I think really sets us apart. We have very few service calls on our products. It’s excellent Japanese engineering and technology so we have very little downtime, which we really see that as a competitive advantage.

In this recession-weary world, how difficult is it to break into these markets?

It’s tough out there, but one of the beautiful things about our industry is once you get through the barriers to entry and you’re in, most operators will give you a go because they’re always looking for something else to offer their customers. That, combined with our existing relationships in the market, helps us get product on the floor. We’re being very flexible in terms of trials and terms, due to the nature of the economy right now. But at the end of the day, because we’ve got a good platform, because we’ve got some games that are performing well, because we’ve got good relationships, we’re getting our product on the floor. And once you get product on the floor, you’ve got to prove it through performance, and new games that come out. So although times are tough, if you look at where we’ve come from in the last six months, we’ve had great growth.

One of the things that sets us apart right now is we’re investing. Everyone else is retracting. And compared to some of our competitors, our philosophy is we believe in the value of the industry knowledge and industry people, whereas a lot of our competitors see the value of bringing people in from outside the industry. And I think probably both have merit, but we really think that it’s good timing to get good industry people now and utilize that strength, so that’s definitely part of our strategy.

What is it about your games that make them attractive?

I think there are a few things. The math itself is excellent. The graphics and animations and the presentation of the graphics and animations truly do give the games a point of difference on the floor. In particular in the bonus and in the feature, there’s a lot of action, a lot of noise. We have symbols that get thrown on to the reel strips when you win, extra symbols when you’re in the bonus, so it’s very active. There’s a lot of action, There’s a lot of excitement; there’s a lot of anticipation. Without question when you’re on the casino floor, our games stand out. They are just very good packages.

So you’ve got to just make sure they keep earning.

We certainly believe in the philosophy that the customer now buys a box to put in software, they don’t buy a box to put in that particular game. We’ve just got to keep coming out with good games. We’ve got a very aggressive development schedule for next year for that exact reason – that we want to keep putting our games into boxes, and obviously we want to have legs, we want to have games that have good staying power. But when they do fall off, which [all games eventually] do, we want to have something else to go in.

Aruze's Linked Craps offers a communal bonus.

Can you talk about some of the other products you will have at G2E?

We’ve got a few ranges of products. [Among them are] our G-Deluxe range, which is really high-end top-box feature-oriented product; our G-Series product standalone, which offers highly entertainment-style games through more hardcore gaming style. We’ve also got some communal products, Jackpot Battle Royale, which is basically a tournament-style product, that utilizes high-performing video-based games, and lets actually play against each other and compete to win the tournament by adding up points they win throughout a specified period of time. And it’s also got a mystery jackpot component to it. We’ve got another concept called Linked Craps, which again uses popular base games, but once you go into the communal bonus you actually play craps. There’s one person that’s chosen as the shooter and everybody’s outcome is dependent on how that shooter is. It’s a new style of community play where everyone’s dependent on the same outcome, as opposed to competing against each other on that outcome, so you share in the win.

What is the thinking behind the multiterminal games, and why are they important for this market?

There are a few reasons. One is we’ve seen great success in where we’ve put it in in Asia. In particular, Angels Blackjack has been one of our best multiterminal products and baccarat has been very profitable there also. And then we recently put out Lucky Sic Bo at the Venetian Macao, and “smoking” is probably the best word to describe how it’s doing. We have the ability for the player to actually hit a button that allows the dice to be thrown up within a cylinder so it’s got a lot more interaction. One of the unique features of our game is there’s an RNG that determines when and how much force this bottom board that the dice sit on will move. When you hit the button, it determines how long from when you hit the button it will move, and it determines how high it will go up.

Is North America ready to adopt these kinds of products?

We think so. We’ve had a lot of customers come to us asking when we will have the multiterminal available, for a few reasons, one of which is because they’re all trying to reduce costs as much as they can, and labor costs is one area. And I think on top of that, Stargames has done a very good job of enhancing the segment and IGT recently has done a good job in enhancing the segment, so I think there’s definite growth in the segment. And thirdly, in particular areas where they’ve got an Asian clientele, we’ve had a lot of interest in particular in Sic Bo and craps, and I see that as a large opportunity. Outside of North America, we have a very good presence of multiterminals, especially in Asia, and our product has performed exceptionally well over there, so we think that will transfer well over here.