Feature by Frank Legato

New Kids
Two longtime amusement game manufacturers break into the U.S. slot market

Next year, slot players will see something that is rarely seen these days, particularly in the U.S.-new manufacturer names on slot machines. Breaking into this country's slot market is no small task. A startup company needs much more than a good idea; it needs a huge chunk of capital to market, manufacture and distribute its machines. Precious few manufacturers have the recurring revenue, profitability and R&D money to accomplish this and consistently make money without the aid of alliances forged with outside companies.

There are, however, two new companies now selling slots in major markets that are equipped with everything needed to establish themselves as significant competitors for Americans' gaming dollars. Within the next year, you're likely to begin seeing new slots bearing the previously unfamiliar names of "Unidesa" and "Konami."

Both are the names of manufacturers with parent companies overseas. Both names are well known in foreign markets-not for slot machines, but for home and arcade amusement games.

And both have the kind of capital-via successful parent companies-that it takes to compete in today's U.S. casinos.

Unidesa USA is a subsidiary of Universal de Desarrolos Electronicos S.A. of Barcelona, Spain. Its parent company, also based in Barcelona, is the international conglomerate CIRSA, which is an umbrella company for a variety of manufacturing, entertainment and gaming concerns.

Unidesa established its success in Europe in the Amusement With Prizes (AWP) market, a network of arcades in several countries featuring amusement games-which are really slot machines-that pay out tickets redeemable for prizes.

Unidesa USA was established in Hollywood, FL, in 1997, and began selling slots to Florida cruise markets and Latin American casinos. This was followed by sales in Native American and riverboat markets, and finally, in 1998, by its licensing in Mississippi.

This year, however, Unidesa is poised to become one of the better-known slot makers. The company has secured licensing in New Jersey, and its first slots will soon reach Atlantic City casinos-meaning players in all major markets outside of Nevada will soon be able to sample its games.

For a company with its roots in the AWP markets, the timing could not be better, comments David Orrick, communication director for Unidesa. "Our parent company is one of the leaders in entertainment games-'street' games that concentrate on amusement for modest prizes," Orrick says. "In the past, manufacturers of these games tried to make them look like gaming machines. Now, the trend is totally reversed, with gaming machine manufacturers trying to make games that look like amusement games."

For Unidesa, this inherent advantage is enhanced by the fact that a few of its existing games happened, by coincidence, to be perfectly themed for the casino locations in which they were placed.

Perhaps the best example of this is the game "Swamp Land," which is wildly popular in Mississippi. Orrick says its popularity is due not only to its great bonus game, but also to the fact that its theme is tailor-made for the Mississippi Delta. "Customers, partic-ularly people from out of state, identify the game with Mississippi," he says.

Swamp Land features fantastically sharp graphics in a second-screen bonus game that depicts a swamp with lily pads all over the surface. A frog sits on a pad at one end of the screen. Using but-tons on the panel, the player selects lily pads onto which the frog will jump for bonus payments, all the while avoiding an alligator that keeps popping up. It plays a bit like the famous "Frogger" amusement game. The bonus round ends when the alligator catches the frog.

According to Orrick, people in Mississippi casinos are increasingly asking slot hosts for the "frog game."

Another hit has been "Southern Draw," a specialty video poker game-again, coincidentally themed to appeal to Mississippi players. This is a great video poker game that allows the player to up the ante after the initial deal-in other words, it plays like live draw poker.

The first Unidesa game to be introduced in Atlantic City will be "Neptune's Pearls," a nine-line, multi-coin video slot with a pearl-catching second-screen bonus game. What distinguishes this game-apart from the graphics, which truly are beautiful-is the frequency of the bonus round. The second screen occurs every 32 spins on average, which is twice as frequent as the bonus rounds on most multiline video slots.

Orrick comments that the immediate success of games like Swamp Land has focused the manufacturer's U.S. game development efforts on creating new games that are tailored to the markets in which they will be introduced. "In our process of game design, we are no longer just asking how to apply new technologies to make a game work," he says. "We're concentrating on giving the players what they want. For instance, we have a game that we are tailoring to New Jersey players, who are different from Las Vegas or Mississippi players.

"We are selling time on the machine to players. There is no shortage of ideas, but we are determining which idea is right for the time and situation in which it will be introduced."

Konami Arrives

Konami Gaming is the newly established Nevada subsidiary of Konami Corporation of Japan, a giant in the international amusement game industry. It's a parent company that is the envy of all slot manufacturers-market capitalization of over $10 billion; a 30-year history in the global arcade game business; a well-established consumer video game software line dotted with famous brand names like Nintendo and Sony Play Station.

The Tokyo-based parent company has already achieved great success selling slots in the Australia market, where it has captured 20 percent of the market from home-grown slot maker Aristocrat.

When Konami decided to enter the U.S. casino market, the company used its financial muscle to attract veteran talent. The first order of business was to bring in 14-year slot manufacturing veteran Dean McClain as president of the Las Vegas subsidiary. McClain had been president of Aristocrat, Inc., the U.S. subsidiary of the Australian slot giant.

"I was approached with the understanding that it would be a startup operation, and that I would be given the opportunity to hire the executives and employees of my choice," recalls McClain. "Having been in the business since 1986, I've met a lot of people, and I've kept in touch with several of those people who have stood out in their areas of expertise. When I had the opportunity, I went after the best people-and we developed a team of gaming professionals."

Konami Gaming will be given free reign to tap the enormous resources of its parent firm-from its proprietary video slot platform and its research and development might to its library of Japanese and Australian games.

McClain notes that those resources include a wealth of experience in the entertainment industry as well, including joint ventures in the consumer video business with Disney, Universal, Sony, ESPN, Microsoft, the NBA and Major League Baseball. "We will have the ability to tap this experience in many future opportunities," he says.

According to McClain, initial slots from Konami will fall into four general categories:

n The "Thunder" group of multiline video slots from Australia will be released in an Americanized format. These include titles such as "Money In The Bank," its first slot in the Australian market, and two games that have eclipsed the first one in popularity-"Loaded Dice," introduced here as a nine-line video slot with a main re-spin bonus feature; and "Lost Treasure," another nine-line game with 20 special features, including inner reel re-spins and "lost treasure" re-spin bonus events.

n The "Lightning" category includes contemporary video slots with unique, on-screen bonus games. Among the first introductions will be "Hold 7s," a three-reel, "7-way" (seven paylines) video slot with a tic-tac-toe-style trigger for a progressive bonus game.

n The "ICE" category is a video poker series, including several traditional games and "Squillion-Dollar Poker," a video poker game with a special feature that lets the player ascend a "bonus ladder" up to a "squillion." (A "squillion" is defined as however high the operator decides to set the top bonus prize.)

n Finally, the "X-Fire" line involves a new type of video slot geared for the "Generation X" market of young, mature adults (ages 25-35), "but with a broad-based appeal as well," says McClain.

McClain says the company's plan does not call for a full frontal assault with high-profile products. "Konami means 'small wave' in Japanese," he says. "Our intent is not to make a big splash, but to enter the market quietly and carefully. Our first function is to build a sound organization, and design a sound platform that will allow us to do more with our game content in the future as we grow."