GGRAsia – Konami eyes millennials to boost growth: Sutherland

Konami eyes millennials to boost growth: Sutherland

Jan 27, 2017 Newsdesk Interviews, Latest News

The millennial player segment is one of the areas Konami Gaming Inc is keen to explore in order to promote business growth, says the company’s new president and chief executive, Steve Sutherland (pictured).

“The biggest potential for growth is likely with new player demographics, particularly millennial audiences,” Mr Sutherland told GGRAsia in a written interview. “Across our industry, operators and suppliers are trying to find the right products to resonate with millennials’ entertainment preferences.”

Millennials is a term used to describe people who came to young adulthood after the year 2000. Now in their 20s and early 30s, they typically have more disposable income than did their predecessors.

Spectrum Gaming Group LLC, a research and consulting firm covering the casino gaming industry, said in December it expected one of the top industry trends for 2017 to be casinos leveraging their “under-utilised square footage to create special attractions for millennials, including lounges, entertainment and skill-based gaming options”.

Research firm Technavio recently suggested that equipment sales in the land-based casino industry would be increasingly influenced by the tastes of millennials. “The increasing digitalisation in most entertainment segments such as gaming and movies has been a major factor attracting the younger age group (18-35),” said the firm in research published in December.

“At Konami, we’re targeting new creative product types that appeal to broader audiences,” Mr Sutherland told GGRAsia. He added: “We see a lot of opportunity in the multi-station sector to reach a diverse spectrum of player types, which has led to the development of our new Fortune Cup horse racing game and [multi-station progressive] Crystal Cyclone with its colorful roulette-style bonus.”

The new multi-station horse racing game “Fortune Cup” was unveiled during last year’s Global Gaming Expo Asia trade show in Macau. The product combines a traditional horse racing-themed mechanical game with digital betting stations.

Konami Gaming is also introducing skill-based gaming products to its portfolio, some of which feature musical-rhythmic elements. Mr Sutherland said these concepts “carry strong potential in reaching millennial audiences”.

Skill-based games in the casino context are typically electronic gaming machines (EGMs) – often but not exclusively slot machines – where a percentage of the return to player (RTP) is reserved for a skill element during a game feature. The RTP is the theoretical percentage of all stake money that is returned over time in the form of prizes to players of an EGM, with a minimum RTP typically mandated by jurisdictional regulators.

2017 a ‘building year’

Konami Gaming is a U.S.-based maker of slot machines and casino management systems for the global gaming market. The firm is a subsidiary of Konami Holdings Corp, a Japanese-based conglomerate. While Konami Gaming focuses on the North America casino sector, sister firm Konami Australia Pty Ltd is in-charge of the Asia Pacific region excluding Japan.

Mr Sutherland is a long-time executive of Konami Gaming, having joined the company in 2000 as senior vice president for sales. He was appointed president and CEO at the start of 2017.

The executive said that, in the immediate term, Konami Gaming would be focusing on the launch of its Concerto series of slot machine cabinets.

“The standard upright machine, slant and SeleXion multi-game are currently released and achieving strong international expansion,” Mr Sutherland noted. “Over the next six months, our 43-inch single screen machines – Concerto Stack and curved Concerto Crescent – will also arrive to market and provide global operators with a complete array of Konami video slot options to optimise their casino floor.”

Konami Gaming announced earlier this week the release of its new Concerto Slant slot cabinet, which will be available in markets across North America and overseas.

Mr Sutherland said 2017 was likely to be a “building year” for the company. “Looking at industry replacement cycle and new casino growth, the market is unlikely to see significant growth. We’ll be leveraging our expanding product portfolio to drive new business,” he told GGRAsia.

The Konami Gaming CEO stressed that research and development remained one of the main priorities for the firm. “We’ve identified specific opportunities to drive growth for Konami’s core business as well as new product segments, and those opportunities will help shape our direction through the coming year and beyond.”

Mr Sutherland additionally said that Konami Gaming also planned to introduce assets from parent Konami Holdings – namely innovations from the amusement and consumer entertainment space – into the casino market to help drive future gaming product.

Konami Holdings’ gaming and systems division reported profit of approximately JPY1.59 billion (US$13.8 million) for the six months ended September 30, which it said was down 8.3 percent from a year earlier.

“The North American market environment saw harsh conditions due to the entry of European manufacturers and the resulting intensified competition, and increasingly prudent investments by casino operators when purchasing machines,” stated the group in its earnings announcement, released in October.