Simon Hammon’s Long Journey of Slot Machine Knowledge: The Times Ahead
Simon Hammon, newly appointed head of Relax Gaming, states he’s not a standard “product person.” However, the games he released during his time in charge, such as Starburst during his time at NetEnt, have had a significant effect on the field. In the third and final part of his conversation with iGB, he discusses the future of the slot machine industry, an industry that may be shaped by both strict rules and creative products.
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Simon Hammon’s Long Journey of Slot Machine Knowledge: The Times Ahead
Be Ready for Challenges: New Rules and Slot Machine Limitations
In the second part of this series, Hammon described what a studio must do to become a well-known name in the field, but the entire slot machine industry is facing a new set of challenges as gaming rules become more restrictive, limiting the features, bets, and even spin speeds they can offer.
The largest companies may face the biggest difficulties, to the point where strictly regulated markets may become less appealing to studios. “Very few providers can handle the number of regulated markets that exist and the number of changes that need to be made at the portfolio level,” Hammon believes.
“Imagine you have 50 games, and new regulatory conditions come out. It’s not an option [situation];
Is this an inquiry,” regarding your willingness to comply, and “how will you manage this collection of assets?”
In response, operators will be more cautious about which production companies they collaborate with, and are more inclined to work with studios that can assume accountability to prevent compliance problems. Subsequently, the development process itself will be altered due to the escalating wagering limits, expedited timelines, notifications, and expenditure reports mandated by European regulatory bodies.
“These regulations will have a significant impact on game design,” he added. “The manner in which games are designed today is entirely different internally compared to three years ago or even two years ago.
“I believe we should not embellish the situation. The European market is becoming increasingly challenging, with reduced financial resources available, which is why numerous suppliers are expanding into new territories. Operators are exploring fresh markets to obtain easier revenue.”
Identifying Space for Expansion: Why Business-to-Business is Now Under Regulatory Scrutiny
This indicates a growing interest in unregulated and even illicit markets in both the operator and supplier sectors. Certain businesses, in either area, have almost “openly” reported growth in these areas as a remarkable achievement.
Even strictly regulated businesses in the United States are boasting about their achievements in regions like Asia, Hammon acknowledges “this raises some concerns,” even if it could potentially diminish share prices or valuations.
For vendors, having a wider scope across both the legal and informal markets arguably gives more leeway. After all, authorities tend to concentrate on the point of use – the operators – rather than the supply side.
However, Hammon points out that this situation is about to change as authorities mature and acknowledge the significance of B2B to the industry’s value chain. “There was a whole discussion point a few years ago about regulating the market, [and whether they] would suppress competition and provide long-term sustainable income.
“I believe those truths are being tested as the conditions and tax burdens increase, and the reality of the return on investment starts to become clear, to the point where I’ve never seen so many press releases about operators relinquishing licenses,” he explained. “The financial reality is starting to come to the forefront.”
For Relax, the focus appears to be on the regulated space, more specifically, a market-by-market approach, rather than pursuing expansion across regions. Hammon explains that the choice of which opportunities to tackle is based on a number of factors. “How intricate is the entry? What are the business opportunities on the table? Do we have a blank spot? Do we have existing operators that can enter that market, or are we talking about something completely new, a fresh start? Then there’s prioritization; which are the bigger targets that can deliver more tangible outcomes in a shorter time frame?”
This has already affected releases in Spain, Italy, and the upcoming release in Ontario, but he stressed the importance of being realistic and determining the practicality of each market before entering. “Our objectives are very clear and easily defined,” he added. “It’s about income potential and operational ease.”
Without a doubt, it won’t shy away from bigger obstacles. Take the US, for instance. Ontario is setting Relax up for a position in North America, and US growth is in the works.
“We’re definitely going to go in, and we’re working on it,” Hammon stated. “No one there knows Relax. No one knows what Money Train and Temple Tumble are. It’s a position we’re very comfortable in.
“We’re even a competitor in Europe, and it’s time to take that attitude and lessons learned into new markets and explain why we’re superior.”
Don’t pursue the obvious: What’s driving the advancement of slot machines?
As someone who clearly understands his subject, Hammon is often asked what will disrupt the slot machine industry. After all, the slot machine industry has arguably only seen two real game-changers since Microgaming launched the first online game in 1994.
So, after country-specific rules and mobile gaming, what’s the next earth-shattering change that will disrupt the industry?
Hammon acknowledges that people expect him to say something motivating and visionary.
Conversely, he believes financial soundness will be the main driver of transformation in the next three to four years.
“It may not be as flashy, but I think it’s accurate,” he stated. “If you’re discussing rebranding, sales, and recognition, it boils down to the basics of profitability.
“I believe the sheer economics of the business, particularly as a provider, will determine the next wave of change. Therefore, I personally believe you’ll witness a significant shift.” He mentioned this is already occurring, with leading slot brands now becoming part of larger organizations.
The industry is evolving quickly, with new brands competing for market share, resulting in intense competition, coupled with stricter regulations, increasing costs, not to mention broader economic pressures. He stated those who remain, and what their businesses resemble after doing so, will be worth observing.
This may not be as popular as multi-player slots, but for Harmon, the commercial aspect is the most captivating part of the industry. “You can’t endure if you don’t comprehend that, and the risks involved.”
This brings to mind the matter of products entering the market each month; there’s so much content available, it’s difficult to stand out. “This scenario can only persist for so long,” he continued. “So the [financial] issues are coming to the forefront.”
In the coming years, a significant number of individuals will reach the end of their lives, which will completely alter the landscape.
Never lose your sense of wonder: Is this sector outdated?
However, even amidst this wave of change, Han Mong acknowledges that the industry feels somewhat antiquated in certain aspects. He believes that the worth of industry media is gradually diminishing, while the constant award ceremonies are depreciating the concept.
He also desires to witness a new generation of industry experts joining, breaking the existing pattern of executive transitions. “I believe there are numerous individuals who are hired claiming to possess specific knowledge – they actually lack that experience,” he stated. “I think this current state, and simply relying on sufficient high-quality, enthusiastic, experienced talent, instead of merely promoting from within because they’re present, that nature.
“I hope there are more contenders who are eager to triumph. I believe the industry generally needs to recruit from outside sources. I’m referring to energetic individuals from diverse industries who can bring a higher level of expertise in specific areas.”
But what disheartens him most is the loss of the sense of awe for new games. “There was a period when you’d go to showcase a game, you’d be so thrilled to do it. The operators in the room would inquire, ‘What are you going to launch? What’s next?”
Take it easy, his objective is to reproduce that incredible sensation. He’ll accomplish this through the recently introduced Magic Money Train 3, in addition to a collection of new features, advancements, and market introductions.
“However, this also presents its own obstacles. I mean, how do you achieve it? How do you generate this excitement? How do you get people discussing you, saying ‘look at what they’ve done?’
“[But] when you succeed, the benefits can be even more substantial.”
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