The big success story globally in FECs of recent years, redemption games continues to be a sector of growth. Jon Bruford asked key industry figures what lies behind the growth – and what the future holds…
Redemption continues to grow. In the UK, this has apparently been fuelled by late adopters, arcades and similar businesses that have finally given in to redemption’s allure and joined the winning team. Sam Coleman, Sales Executive, JNC Sales, says his team is certainly still seeing growth: “It certainly is [a growth area] for us. Many customers who operated on the arcade side are now moving into redemption as another way of keeping customers on-site. We’ve seen that trend extend into our new pusher machines, and in recent years we have had Justice League and Scooby Doo pushers, with ticket and cash payout, which do really well. It’s a growing market which we are heavily involved in.”
It’s been said that one of the strengths of redemption is its simplicity – rarely are instructions required for players.
John Brennan, director of business development at Jennison Entertainment Technology, explains: “It’s a very simplistic offer, it’s all the fun of the fair and someone can walk out clutching their prize. It’s a simple philosophy in terms of offering entertainment, and the games are more diverse.”
Within that, though, is the chance for an operator to carve their own niche and stamp their identity on their offering. Brennan adds: “You have the combination of amusement, tickets then redemption into worthwhile prizes; it gives an operator – though they have to think about it more than other genres of equipment – the chance to create a unique offer in terms of the prize mix, payout rate, and redemption value.”
The UK is a little behind the US in terms of its offering. Matthew Deith, commercial director for the Harry Levy Group, says the company is still selling redemption in big numbers, and it’s partly down to a reinvention by UK operators.
He tells GAP: “The sector is still very good; the recent EAG show was encouraging for us, customers were buying predominantly redemption machines. In the UK it’s growing year-on-year and operators are reinventing themselves, people who had resisted redemption have made the leap and are now operating redemption machines. Operators who have had it for a number of years are expanding or refurbishing their premises to try and up their game.
“If you look at redemption in America, we are behind because it’s been there for so many years, so there are a lot of good ideas that we can take from there. Customers that go to IAAPA can see other premises and try and adopt a similar approach to things.
“A lot of our entertainment centres are older buildings, but in America they are purpose built or are in leisure complexes. Dave & Buster’s has a food and beverage offer, all redemption; Main Event has bowling and also has redemption and food… Bowling alleys like Hollywood Bowl are getting closer to that kind of experience, but FECs and the old arcades are evolving – that’s why some of them are able to operate all year round now instead of closing for periods through the winter. People are coming back to collect tickets, playing in the winter.”
So redemption is not only providing added revenue for operators in widely-recognised ways, it’s also adding to the coffers by giving them year-round income. Everybody wins with redemption, it seems.
Licensing
The win can be sweetened with the addition of a good licensed game or two, but it’s not essential; in redemption, gameplay is usually the winner, but a license can give a venue walk-up business they might not otherwise enjoy.
Kevin Weir, business development director at Electrocoin Sales told us about its SpongeBob pusher, which, he says has done very well for the firm.
“It’s a good licensed product – a good product with the benefit of a good license on top, which always helps. Licensing is the cherry on the cake with redemption; you can have a good game without it and it will do very well, but the licensed game has that walk-up factor. Maybe not so important for operations where there are a lot of repeat customers, but for venues where there is infrequent or transient trade, I think there is a real benefit.”
Bay Tek Games’ director of marketing and Innovation, Holly Hampton, says Bay Tek has been cautious where licenses are concerned and they will only do it if it works for the game.
She says: “We’ve often been cautious about just licensing a game, we have done it though. We look at it from the perspective that the license has to make sense with the gameplay, and if it doesn’t, it probably doesn’t make sense to license that. I believe that if the license has a direct relation to the gameplay it makes for a better combination.”
Harry Levy’s Matthew Deith says the group mixes its licensed product with generic, to “give the market some variety rather than swamping everyone with licenses. This year we have gone for a generic pusher, Busy Bees, which has been very popular. There is a space for licensed product though, of course. We did very well with our Minions whacker, for example, and we are testing a Scooby Doo whacker right now.”
“Licensed products have revitalised redemption games and created a vibrant atmosphere within amusement centres. This is because families visit these locations and are excited to see the licensed redemption games such as Spongebob Pineapple Arcade, DC Comics 4 Player ticket Pusher, Crossy Road etc. The licensed games are easily recognised by all and this is making the arcades more entertaining and exciting for the players. The term ‘Fun Retailing’ has never been so relevant, playing exciting games, winning quality prizes, mixed in with a lot of fun for all the family,” says John Crompton UK & Ireland sales manager for Bandai Namco.
The point of a license within a venue is not just about getting someone to play the game – when it comes to actual redemption of tickets, a license can play a huge part in perceived value, which is key to repeat business. People want to leave feeling they have won a good prize and been entertained, that it’s been a fair transaction – as Ruth Leonard, Head of Brands & Licensing for PMS International, explains: “It’s nice to be able to win and take home a cuddly bear, but if you can win and take home a cuddly Batman that’s extra kudos for you.”
What have PMS noticed in what they are supplying to customers? Have they noticed any trends? Absolutely, Ruth says: “Technology and gifts you might not go out and buy on a daily basis, things like Bluetooth accessories, karaoke mics, sound bars – we’ve seen a real increase in ‘techy’ gifts.”
This fits in with the idea of perceived value in the prize, something PMS is acutely aware of. Ruth adds: “There’s an expression, ‘players make winners’; if we’re able to offer something that looks added value, something the consumer might not be able to instantly work out the RRP for, that’s when people are more likely to want to play and be much more excited about winning. What we try and do within our offering is to have impulse small items with what would be a low retail price right the way through so we can cover all the bases.”
It’s not all about the tech though – 2016 was a huge year for plush, and toys in general. Ruth says: “The toy market in the UK has had its best year ever, and within that plush as a category has had a huge year as well. Cuddly toys are really in demand, especially a cuddly toy or character that is widely recognised. For example, we have made plush toys of Masha and the Bear, it’s one of the biggest brands worldwide with over 16billion views of their webisodes on YouTube. That’s one of our top brands at the moment. E.T. and Paddington are also doing really well for us because parents recognise and love those brands too; if the parent and the child both want the toy, it’s a double whammy.
John Brennan likens the role of the FEC to retail in this instance; “A recognised license is a great tool to convey a sense of perceived value to the customer. They will play for particular goods – if you have a high value item there are people who will come back again and again for that. From the operator’s point of view, they’re retailers. They’re buying at wholesale and selling at retail, for all intents.”
Payment technology
Contactless payments are becoming increasingly popular in entertainment venues worldwide, with the UK gradually catching on to the benefits. Steve Short heads up BANDAI NAMCO Management Solutions, and he is a big fan: “Although the market for cashless systems in the UK and Ireland is still quite small relatively speaking, there is definitely a groundswell of interest in the concept. Where we have installed the Embed system, customers have been extremely positive about the experience and there is evidence that going cashless has given players the incentive to actually spend more money on-site than they would have done using cash.”
Steve feels that the time is ripe for cashless because the concept is gaining ground in our everyday lives. “Contactless payments are now the default on many public transport systems and the number of contactless cards has increased by almost 30 per cent since last year,” he says. In fact, according to the UK Cards Association the use of contactless cards in the UK increased by 239.7% in July 2016 compared to the previous year.
Sega’s general manager of sales, Justin Burke, is all too aware of a possible new trend evolving in US FECs: ticketless redemption.
He says: “Some locations in Europe, and many in the US, are contactless, and the next big stage in the US is not only paying with a card but collecting your tickets on that card. It’s quite controversial, some people think it is the way forward, some think it takes away the theatre of winning those streams of tickets; it’s a divided camp. Personally, I think the theatre of the tickets coming out and people walking around with buckets of tickets is part of the experience. In America they are trialling ticketless games, and it will save a lot of money for operators; and we have a generation growing up with mobile pay, with contactless, so for them it’s second nature.
“We are in the fun, entertainment business and that’s part of it, to me.”
Perhaps the adoption of ticketless might depend on the kind of customer that dominates your floor? Holly Hampton has a theory about players – though she ultimately agrees with Justin Burke about the pure enjoyment of tickets. “There are instant gratification players, and there are savers; for instant gratification, they come in and play and have a good time, and they’re going to redeem before they leave. It won’t be worth more than a few dollars but they’re happy with that.
“The savers are more of an aggressive player, they’re likely to be a regular, they’ve got their eyes on a prize and they play the game differently – they’re looking for the big payout. In the past, this player might scan the room and look for piles of tickets at their feet and think, that’s the game to play now, but with e-tickets the players don’t have that any more. I believe with e-tickets we miss something; there’s something about tickets that’s part of the experience.”
It promises business opportunities for Electrocoin’s business development director Kevin Weir, but he reassures Global Amusements & Play that there are systems that allow a venue to use contactless pre-paid cards – and to pay out from the machines in tickets, so the labour saving is still largely there, and the ‘theatre’ the customer enjoys is intact. “[Electrocoin] work with ticket handling and associated loyalty programs, so we supply games, ticket eaters, back office management system for handling tickets, and prizes. And that’s where we have seen the biggest growth, in the management system side. We supply the Elmac system, which is widely regarded as the best in the industry.
“We are also distributors for Intercard, which is the cashless system. You play with a card – buy the card for cash, and use that against the system; it interrelates with the back office redemption system. We’ve been running with that for about nine months now and we have been steadily doing more installations every month.
“The Intercard system is designed so it can be either entirely non-ticket, or it can be just for cashless payment so it still pays out tickets. The operator can choose how they want to do it for their customers. There’s still the advantage of no cash going into the machines, so cash boxes don’t need emptying, there’s a contactless reader and the machine still pays out in tickets – so the theatre end of the game is still there. Where there are families involved, they love that and the experience of putting tickets into the ticket eater, it’s just great fun.”
This has echoes of the casino industry’s conversion to TITO several years ago – there are still players on Las Vegas slot floors complaining that the atmosphere has gone now that you no longer hear coins hitting the payout tray with a win. But TITO compared to actual currency is a no-brainer for an operator, because it simply saves a huge amount of labour and therefore money. No more emptying machines, no more counting coins; you can use a kiosk or single counter for many services. But ultimately, it’s what the players want that should win out.
As Matthew Deith says: “Customers play the machines, at the end of the day; it’s got to be a fun, easy experience and you have to take away whatever barriers to that you can.”
Interestingly, with this in mind, Bay Tek’s Holly Hampton has heard of some venues retracing their steps. She reveals: “I’ve heard of a few game rooms that have reverted, and added tickets back having switched to e-tickets. I don’t think it’s a trend, but I’ve heard that it has happened in a couple of locations this past year.”