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Industry veteran Gerorge Steiner opened the AGT Europe headquarters in Graz in November 2003 with the objective of opening up the European market for his company’s Australian- built slots.
An immediate market in Russia gave the company the impetus it needed to spread its influence into other neighboring countries and across all of western Europe.
“Thousands of machines have gone into Europe and Russia in that time”, said Steiner. “It was important to diversify into other countries as it is not wise to depend so much on one market. Events in Russia more recently have shown that this was sensible. While I believe that Russia will re-open and will be just as strong as before, it is vital that we have other markets too.”
This broad approach for the company’s Ambassador and Celebrity ranges of machines, is now entering a period of consolidation with Steiner sees as vital for the company’s firm foundation in Europe.
“At first it was all Russia,” he said. We quickly forged a relationship with Unicum, our distributors, who also look after the Ukraine Kazakhastan and the Baltics for us, and we build our machines in their factory in St Petersburg. We recently signed a new agreement with Unicum under which 2,000 games will be built using our games and branded as Unicum machines.”
It is interesting that outside of Russia, AGT Europe has launched machines for the street / arcade market. Using the Ambassador cabinet in Austria and Ambassador and Celebrity in neighboring Hungary, the company, is making limited payout machines for the first time. Its native Austria has only a limited street market in just three of the nine provinces, but there are whispers that more areas will open up. Similarly, Hungary is a substantial LPM market. “We are positioning ourselves for any eventuality in Austria,” said Steiner “and at the same time we are already into the Hungarian street market. It demonstrates how flexible our equipment is.”
Similarly, the very advanced nature of the Portuguese casino market meant that although it has only a handful of casino locations, they are highly organized. “it has one of the largest casinos in Europe (Estoril) and if your machines can operate successfully with over 1,000 other machines in competition, then you know that you have a good product.”
Germany and Portugal he regards as the most sophisticated of casino markets. ‘They both exhibit an acute awareness of player approach with their slots.” He said that Germany’s high taxation meant that unless a machine performed well it would be quickly rejected. The fact that our equipment has been welcomed there and has remained operating successfully, shows that it is capable of operating anywhere.”
France he views as a major business, not just because it has the most casinos of any western European nation, but because of the alliances AGT has forged there. “We have a distributor there (Caro Development) since before our European company was formed. Now that Caro has been acquired by Grouped Tranchant, one of the big four operators in France, it means that we have the benefit of the financial strength and detailed feedback which can only come from a major operator.”
Since AGT Europe was formed, the Australian parent appointed a distributor in the UK – Ainsworth UK, which is designed to take advantage of the opening market which should happen in the UK once the new legislation covering gambling is fully in place and operational “They are independent of us,” said Steiner, “but we work together on projects of mutual interest.”
Game Development and manufacturing is handled from the Australian head office. Based in Sydney, AGT has been able to bring a number of the outsourced functions in to its production facilities.
The distribution model established throughout Europe is to build a strong market presence using distributors in each sector, supported by himself and his team. “We will continue to work with national distributors in each country as it means that we have localized support.”
The company is now ready for a period of consolidation, he said. “You cannot ride into Europe with a shotgun approach. You have to build relationships, make sure that you have the right equipment and that you are able to tailor them to suit the individual tastes of a diverse network of closely-knit countries. It is not an easy task, but we have overcome the first hurdles and as such established ourselves firmly as a major player in this market. “We are ready now to move on to the next stage in our development.”
The Austrian company- the biggest name in touchscreen games, certainly in Europe if not the world- has seen its products caught up in some strange anti-video legislation over the past few years (Greece and Belgium are typical), but the company policy of keeping away from gambling and anything risque in its games, may now pay off.
“We have a very good, very clean and honorable reputation,” said sales and marketing director Marco Huter, “and in Italy the authorities will welcome that. They will be looking for people who are prepared to work within the law and without ‘black’ money. We have a good rapport with the authorities and we believe that they will welcome Funworld’s new Italian product software.”
He has referring to the decision by the Italian authorities to compel operators to switch to AWP machines which can be monitored. This, said Huter, will create a gap in the market for a product which is attractive to players and operators alike without attracting gambling machine taxes.
Funworld’s new software for Italy was due to reach the market at end of February and coupled with the system’s ability to run on broadband, Photo Play in its many facets is unchallengeable. “We now have 4,000 units connected to broadband,” he said. “Funworld is the only company which can put touchscreen games on broadband. Those games are spread mainly around Germany, Finland, Turkey, Switzerland and Spain , but the linked system of the Photo Play NET is now available in 22 countries. Anywhere that there is a broadband connection can take the game and it can therefore be played almost instantaneously, competitively, in different countries at the same time.”
The new System 2006, launched at the London show in January, represents a major update with an entirely new menu, features and has a new approach. It has taken two years to perfect but means that with two touches the player is into a game. “For the professional player – the Photo Play ‘freak’ – we wanted to create something special for him to make him part of his community. The professional wants something akin to a tailor made product. It can now set him on a career-path. For the everyday player there is a faster and more entertaining product offering greater options which will keep him or her involved.”
Funworld managing director Josef Ohlinger said that the statistics collected by the company showed that the new system had provided an uplift in incomes of 25 percent. “We analyze incomes 90 days after a new game goes into the location. In Finland, where the operator. Pelika Net Oy, is particularly professional, the uplift has been even better.”
Ohlinger said that the European market for touchscreen games has matured. Over the past 10 years Funworld has sold 150,000 – 160,000 and he estimated that the total market stood at around 250,000. “Of course, not all of the original terminals we sold are still in existence, so the overall figures reflect games from all manufacturers in varying numbers for each model.” He said that it is a replacement market at a rate of between five and 10 per cent annually, but in some markets which are particularly well run the average is much higher. “In Finland there has been a 100 per cent replacement over the past two years. It is rather like running a car. There is an optimum moment when it is cost-effective to trade it in.”
Pelika Net has 5,000 amusement games out on location in street markets and arcades, of street markets and arcades, of which 3,000 are Photo Play units and of those, 2,000 ar4e connected online “Pelika has shown just what can be done with Photo Play when it is run professionally and backed by strong marketing – they even run television advertising.”
Marco Huter said that with a replacement market Funworld faced a fresh challenge. “The life-cycle of the game is becoming more rapid with the increasing pace of technological advances. We have to work that much harder. Each country will have to be looked at individually to test what the demand is and what the player likes. We think we are a very professional company, but we have to become even more professional.”
Oddball situations such as that which arose in Greece present problems for all companies, but the ban on video games –which is being challenged in the European Court – unwittingly caught the Photo Play in its net. The intention of the Greek Government, as it saw it, was to keep violent video games out of the market, but a total ban swept Photo Play into its net as well. “We have to work with the law in each country, but we feel that the Greek situation will be solved and that market- which was once very good for us – will return.” Legislation changes in Belgium also unwittingly caught up Funworld, but that too will once more become a good Photo Play market.
The future remained bright for Funworld, said Huter. It was very much a case of broadening the company’s technological horizons and working more closely with its partners in each country. It was also essential to identify at an early stage potential openings for the company, such as are being presented in Italy, and capitalizing quickly. This is an area in which Funworld has traditionally shown itself to be supreme
Meanwhile, the company has its sucesses to report. It is increasingly stronger in eastern Europe and has opened an office in Krakow. Poland. Hungary, the Czech Republic are also significant markets. In Spain Carfama is representing Funworld well and in Germany, where the company is in a 50-50 partnership with Lowen Entertainment, there is a new distribution concept which is resulting in creased sales of between five and 10 per cent per annum.