Gaming Machines – UK – January 2010

Abstract

The gaming machines market grew by an estimated 19% between 2008 and 2009 to reach a total value of £2.42 billion. But this growth was entirely driven by the highly profitable B2 machines in betting shops, masking an estimated decline of around £100 million a year elsewhere in the market. Four times as many people currently play or are interested in playing traditional, reel-based gaming machines as the new generation of digital/touch screen products that are expected to replace them. Interest in digital machines is biased towards 20-24-year-olds, whereas it is over-35s who are attached to traditional reels. Tapping into the games console playing habits of the 'screenage' generation is one way in which operators could help to increase the consumer base at the younger end of the spectrum. Primarily seaside-based Family Entertainment Centres (FECs) have been the hardest hit sector of the market, reporting a 21% decline in annual revenue in 2008. With the lucrative B2/B3 sector reaching saturation point, innovation in lower-stake Category C product could benefit the market in 2010, helping out the struggling FECs that rely on these machines. The 'impulse' factor is crucial in this market, with six in ten players saying they play as and when they see them, rather than planning in advance. Men, under-25s and ABs are the most likely impulse players, reflecting the latent potential for new digital products in venues such as pubs and bars where these consumers spend much of their leisure time.

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