This latest survey shows the economy has had some impact, in some cases a significant impact, on slot executives’ decision-making



The tanking economy’s effects are making themselves felt in the slot industry, according to a survey of slot executives conducted by Clear Seas Research/BNP Media Gaming Group.

It’s not much of a surprise, since casino operators are hurting, slot executives’ capital budgets are being slashed, and layoffs are occurring.

And slot manufacturers, some also suffering from the downturn, are going to great lengths to offer special deals and financing models that will allow cash-strapped casinos to get new games onto their slot floors. (See story, Page 18)

That’s a good sign, because not investing in the gaming machines that exist only to drive revenue and entertain guests is not a good strategy in a poor economy. The players still coming to the casinos want to gamble on the latest, coolest games, and have shown they will venture to your neighbor’s casino if yours doesn’t have them.

It should be a no-brainer, but marketing is another area that should be sheltered from deep budget slashing and still often falls victim.

But back to the survey results. They show that many slot executives believe the game replacement cycle is slowing and widespread adoption of server-based gaming remains more than two years away.

Cost and necessary technology remain the biggest hurdles toward widespread adoption of server-based gaming, according to the second annual Gaming Ad Hoc Slot Manager Survey, conducted prior to the Global Gaming Expo. The survey revealed executives’ views on slot trends and products and this year also tackled the impact of the faltering economy.

Twenty-two percent of respondents said the slot replacement cycle was growing longer, while 28 percent said it was shortening, with the rest predicting no change.

Of those who said the cycle was lengthening, 28 percent said it was doing so by more than six months, 33 percent said by four to six months, and 38 percent said by three months or less.

The economy has had some impact or a significant impact on slot executives’ decisions to include licensed [or revenue-sharing] games on their slot floors, according to 63 percent of respondents, while 36 percent said there had been no impact or neutral impact.

Fifty percent of respondents said server-based gaming would enjoy widespread adoption within the next two to four years, while 38 percent said the technology would take hold within the next five to nine years, and 7 percent said it would take 10 years or more. Only 4 percent said server-based gaming would take widespread root within a year.

In 2007, 59 percent of respondents said the trend would have widespread adoption between two and four years, while a further 18 percent said server-based adoption was still five to 10 years from happening. Some 21 percent thought server-based gaming would be adopted in a two-year time frame.

Fewer respondents than in 2007 said server-based gaming would be an important component to the future success of a casino’s slot floor. Some 54 percent took that view in 2008, while 71 percent judged that to be the case in 2007’s survey.

Some 38 percent of respondents agreed or strongly agreed that the implementation of server-based gaming has slowed because of the current state of the economy.

But the good news is gaming professionals responded favorably to the concept of small-scale server-based gaming areas on their slot floors - a new survey question in 2008. Forty-five percent said they were either likely or very likely to consider such an option. So even though the survey shows the poor economy is causing slot executives to tread more cautiously with their capital investments, they're not about to sit on their hands and give their competitors an edge.