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New slots on the block: The newcomers, part 2

| By iGB Editorial Team | Reading Time: 4 minutes
In the second part of iGB’s roundtable with slot studios in the early stage of their fight for market share, we discuss M&A, innovation and content aggregation

In the second part of iGB’s roundtable with slot studios in the early stage of their fight for market share, we discuss M&A, innovation and content aggregation. Read part one here.

Do you feel there is still scope for suppliers to be acquired by larger peers, or would you say the larger studios and service providers are less keen on consolidation today?
Alexander Levchenko, CEO, Evoplay Entertainment (AL): M&A is an organic byproduct of industry growth, so it's only natural that companies get acquired.

Larger companies have years of experience, established processes, market coverage, licences and proven ‘go to market’ strategies – which their smaller peers lack. Thus, it’s a win-win consolidation to combine the two: larger suppliers are able to diversify their offering and smaller ones save time on grinding their way through the industry.

The film industry is a good example of the future of our industry many years down the line. Currently there are about six big studios that acquired the smaller players. The same will be true for our industry as we’re at the beginning of that same cycle, with a decreasing number of game suppliers as they unite or eliminate in the years to come.

Piotr Szpoton, CEO, BF Games (PS): I think consolidation will occur more on the operator side than with game developers. There is currently a huge number of suppliers and games are released on a monthly basis, making the lifetime of a single game very short. There are only a couple of titles we could name that perform well for longer periods. One of the most vital things that each game studio should have are existing integrations with casinos and a good relationship with their team. However, in a huge number of cases, studios rely heavily on aggregation platforms.

Steve Cutler, CEO, Kalamba Games (SC): There is always a market for quality and delivering results. The relative keenness of acquisition I couldn’t say, but the enthusiasm is certainly there as much as ever if we gauge by calls received.

Of your products, which has proved most successful to date and why do you feel it has performed so well?
In general terms we are observing increasing success with every release. Developing Kalamba Games has been and continues to be an iterative process and we continually strive to raise the bar. Building great titles that players love to play is at our core but all aspects of the organisation must be aligned to deliver increasing success.

PS: We have a top 10 of best performing games and the reason why these games are successful is knowing the specifics of a chosen market. Years ago, when we started creating games, we chose to make them for the markets that we knew very well, such as Germany and Poland.

Knowing your future customer is part of the market research that is an essential part of creating a successful product. Last year, we redesigned 10 of our games to suit the Belgian market, a very specific market, and gladly our games are performing very well there.

How important are content aggregation platforms to smaller games developers? Have these helped you gain access to larger operators?
To put it simply, collaborating with aggregators is similar to placing your product in the supermarket. The product is seen by more potential clients that can choose from a variety of products from each aisle, but you have to pay extra commission along the way to have your product placed there.

The reality is that there are clients who prefer to shop only from supermarkets and some who prefer the local small stores with fewer, but still good, products. It is a battle between keeping the initial standard rates and having less volume of games from a small shop or lowering the rates while hoping for higher volumes from a supermarket.

AL: It’s an important type of partnership for small developers and even for larger companies. Aggregators have expansive networks and market exposure and sell much faster than the direct in-house sales of a game studio.

SC: Yes, it comes at a cost but content aggregation platforms provide a valuable service for both operators and suppliers: breadth of distribution via a single integration for suppliers; and reduced points of contact for operators when sourcing content. This also means we can focus our energies on what we do best and build great games that players love to play.

Would you say you’re limited in how you can innovate with your products?
We don’t limit ourselves when it comes to innovation. We focus a large proportion of our resources on creating titles that offer industry firsts (3D, VR and the like) – and yes, it comes with no forecast or guarantees where these innovations will lead us. But we do know that if we do not innovate today, we will certainly fall flat tomorrow.

PS: The current market situation involves taking a lot of risk with new titles. Otherwise it is absolutely impossible to stand out in the crowd. It is very challenging to concentrate only on such titles though as it takes a lot of time to educate the players. This industry requires more evolution rather than revolution. However, being innovative helps a lot when trying to grab the attention of operators. Therefore, you need both traditional titles and very risky but creative ones.

SC: Bringing innovative ideas to market is core to our philosophy and is supported by strong financial backing from our investors. Everything is calculated risk when it comes to innovation and fortunately we can draw on a great deal of industry and startup experience from within our organisation, which we will continue to leverage as we push the envelope. Players can try plenty of new features in our upcoming releases.

Read parts one and two of the first installment in the 'New slots on the block' series, and come back tomorrow for second of the newcomers roundtable.

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