Why aren’t Slots Big in Macau?

Macau has the world’s largest gambling market, earning $28 billion in 2016. This is much larger than Las Vegas’ haul of $11.1 billion in the same year. But despite Macau’s dominance in overall gaming, their slot machines lag behind Las Vegas. Why is this the case? Find out as we cover Macau’s slot struggles and […]

macau-casino-tripMacau has the world’s largest gambling market, earning $28 billion in 2016. This is much larger than Las Vegas’ haul of $11.1 billion in the same year.

But despite Macau’s dominance in overall gaming, their slot machines lag behind Las Vegas. Why is this the case? Find out as we cover Macau’s slot struggles and what they’re doing about it.

Games Need to Meet Local Market

Tony Payne, who’s been in the US slot machine niche for years, told Nikkei that one reason why Macau’s slots struggle is because they don’t cater to the local market.

“We thought that we could do better,” he said regarding the themes.

A decade ago, Payne and American software engineer Justin Nguyen set out to change this by designing and building slot machines specifically for Asian players.

“The goal was to start developing games specifically for the Chinese players in Macau,” he said.

Their company, Aspect, set up a facility in Shanghai, where they could quickly visit Macau and get inspiration for the kinds of games they should make.

“So far, that’s worked,” Payne explained. “We have gotten a lot of great ideas.”

Overcoming Barriers

Galaxy Macau Grand OpeningAspect is far from the largest company in the Macau slots market. In fact, they’ve only developed 100 of the 13,826 games found in the Asian casino mecca.

Most casinos choose games from well-established providers like Australia’s Aristocrat. And this has proved a major barrier for Aspect so far.

“Understandably a lot of casino operators want to go with something that they know will work,” said Payne. “That’s been a challenge for us.”

Asian Pioneer, another smaller slots developer, noted that bigger companies get more business because of their ability to mass produce.

“It is especially difficult for new entrants to enter into the business without sufficient cash flow to build production capacity,” Asia Pioneer wrote in a draft prospectus.

They also pointed out that the average price of slot machines sold in Macau is around $2,500.

Dilemma between Mass Production & Catering to Locals

The toughest thing for Macau slots right now appears to be that the market is caught up in mass production, rather than looking for specific games that’ll work for their market.

“Getting a new slot product on the floor from an untested and unproven manufacturer is difficult,” said Andrew Klebanow, a consultant at the Las Vegas-based Global Market Advisors.

A revenue-sharing model could help, where companies share revenue with the developers. But until that happens, smaller companies like Aspect and Asian Pioneer may have a tough time catching on with their Asian-inspired games.

 

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