Spielo has new software, hardware in the pipeline
Pub Date: 1/1/2009
Spielo Gaming, out of Moncton, New Brunswick, Canada, may be stealthier than most. The company just keeps its head down and goes about its business of growing market share by selling reliable gaming machines that are popular with players and owners and generate good returns day in and day out.
Even the company's Montana manager, Blaine Bowman, is a relatively soft spoken man with a serious demeanor that sometimes seems all business.
Spielo Gaming entered the Montana market with a flourish, though, about five years ago. It sold its first batch of Power Station brand machines 200 of them at once to the Town Pump group of casinos.
Immediately there was a clamor from independents and route operators to acquire the brand, and they were able to do so after the Town Pump order was filled some time later.
A sophisticated, highly entertaining presentation meant the machine demonstrated exceptional earning power which sparked a whole new round of competitive development from Spielo's rivals.
As a result, today most manufacturers are offering an extensive array of game versions and options that allow owners and location operators to continually refine their machine and game mix to optimize play in a way ideally suited to a particular business model or clientele.
The Spielo machines are still counted among the industry's best performers but, as Bowman notes, "every product has some upper limit which the market defines" in terms of market share.
As of November 28, the major manufacturers in Montana are: Summit Gaming - 6,475 machines under permit, IGT/VLC - 4,808, Spielo - 2,867, Fleetwood - 1,566 and U-1 with 653. Together, they account for 16,369 machines or about 96 percent of the market.
With IGT's recent announcement that they are scaling back sales and service personnel in Montana, and given Spielo's 17 percent market share, Bowman says Spielo has got room to grow.
How far? He confesses that is uncertain.
"The next few years are going to be lean due to a slowing economy," Bowman says, noting gaming activity was flat in the first quarter and tailing down toward the end of it. "Traffic is holding up, but disposable income is down and people are sitting on their wallets."
Tightening in credit markets is also having an impact, Bowman says. "There are no more handshake deals with the bankers. Collateral means less and cash flows mean more" when it comes to securing loans, he says and this is putting downward pressure on liquor license values.
"There's just a lot of uncertainty," he says, "and a huge capital investment is required. It's very difficult for a new guy to get into the business."
Bowman sees the Montana manufacturing market edging toward a focus on upgrading software and hardware in machines that are already in service, as opposed to wholesale replacement of existing equipment.
And Spielo, though worldwide in scope (It's a subsidiary of international gaming powerhouse GTECH and sister to gaming systems and technology leader Atronic), is committed to continue developing Montana-specific machines and upgrades with several due for roll-out by early summer, Bowman says.
Innovation is key to a manufacturer staying healthy in today's ultra competitive markets, Bowman says, and Spielo is dedicated to innovation.
In tipping a bit of his hand, he says Montana machine buyers should be looking forward to a completely new "ultra" design from Spielo that incorporates dual wide-screens in an upright platform.
The lower screen features game displays while the top screen will function in an "attract" capacity, forever eliminating glass changes and affording the ultimate in location customization.
The next generation of Spielo games will also incorporate thermal printers and portable data storage devices which will mean more operator convenience, redesigned cabinets and doors and smaller machine footprints.
Aside from software and hardware upgrades and sales, Spielo continues to build its Montana business based out of a surprisingly extensive company suite on Billings' west end. It comprises a lobby/showroom, executive offices, expansive parts inventories and storage, refurbishing and repair shops and ample warehouse space for new and used equipment coming in and going out.
Bowman explains that repair and warehouse/distribution operations for South Dakota and the western U.S. have been consolidated in Billings. When the Montana Tavern Times stopped at the Spielo center December 2, it was a beehive of activity and housed an impressive inventory of cabinets, parts and machines, new and used.
As far as the gaming business in Montana goes, Bowman is matter-of-fact in his assessment: "It will remain highly competitive. You can't just run a 'plug 'em in and play 'em' operation anymore. There are better ways to run these businesses: better hardware, better software, more game options for different kinds of locations...
"There are tools in these machines to help you understand what's going on in terms of how they get played'; which game titles make you money and which don't ," but to use the tools takes time and some testing, he says. "You can increase their performance."
From Bowman's remarks, one could conclude the Spielo brand in Montana is here to stay, new upgrades and completely new machines are in the pipeline and competitors have left room in the Montana market for Spielo to grow...
And despite some economic uncertainty, that's a pretty upbeat outlook for a company that started at ground zero here just a few years ago and already appears to be homing in on at least the number two market share position.
Source: The Montana Tavern Times, January, 2009, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.