Jamie Odell of Aristocrat Leisure Is Number 3, But Hopes to Move Up
While IGT and Bally Technologies were being bought for several billion dollars apiece, the number 3 slot machine manufacturer continues to operate as an independent force in the gaming industry. Jamie Odell of Aristocrat Leisure Ltd. recently gave an interview in which he said his company won’t be satisfied simply being competitive, but wants to move up the list of gaming manufacturers.
New Competition: GTECH and Scientific Gaming
In the past 12 months, the #1 slots manufacturers, IGT, was purchased by GTECH, the multinational lottery corporation which seems to operate the lottery for dozens of countries in the world and over a dozen US states. Then Bally Technologies, the second-largest slot machine manufacturer, was purchased by Scientific Games Corporation. Scientific Games also made billions in the lottery industry, printing the Mega Millions and Powerball lottery tickets.
The July 2014 GTECH purchase cost of IGT cost $6.4 billion. The November 2014 purchase of Bally Technologies by Scientific Gaming cost $3.3 billion. Both purchases marked seismic shifts in the global slot machine industry. Amidst all the furur, Aristocrat Leisure’s moves did not receive much attention. But the Australian gaming company remains viable in a rapidly-changing industry.
Video Gaming Technologies
Around the time IGT was being bought, Aristocrat was buying Video Gaming Technologies for $1.3 billion. VGT is a Tennessee-based slot machine manufacturer which places machines in the Native American casinos around the United States. Because the Class II gaming machines do not appear in Las Vegas and Atlantic City, those machines do not seem to get as much press as their Class III counterparts.
The tribal gaming industry in the United States generates $30 billion in revenue each year, roughly the same amount generated by the much-ballyhooed Macau gaming industry in 2014. Buying the Video Gaming Technologies was a major move for Jamie Odell and Aristocrat Leisure, one with significant upside and not much downside. Unlike Macau, no one leader’s decisions are going to materially affect the 240 tribal casinos in the United States. Jamie Odell sees it that way. While he is reluctant to admit his company is #3 in the slot machine market, he will tell you Aristocrat is closing in on being the number one company in placing slot machines in tribal casinos.
As Odell recently was about to meet with Aristocrat Leisure managers from around the country at Encore, he told a reporter, “The big moves have been made. It’s now about being strategic in what we do to work with our customers.”
These days, gaming executives use words like “strategic” and “tactical”. When they use those terms, they tend to mean less-dramatic investments which give them an edge without burdening their company with too much debt. They mean tactical in the military sense, on a lower-level, with an eye to sensible expansion. For the third competitor in the industry, it’s almost always about making the smart choice and not the bold choice, essentially playing Moneyball.
Being Nimble in Business
Odell has another favorite catchword: “nimble”. He explained to the Las Vegas Journal-Times recently what it means to be nimble. He said, “We work hard to be nimble and that’s why it’s important to empower everyone to hold to that theme. We have to have speed to market. That way, we can bring our products out faster.”
One of the ways Aristocrat Leisure has become nimble is to make forward-thinking investments in emerging technologies and trendy new forms of gambling. In 2012, Aristocrat bought a San Francisco-based social gaming company. The purchase tripled the company’s revenues.
In doing so, Aristocrat became a global company. Though Jamie Odell continues to live in Australia, about half of the company’s executives live in the United States now. With the purchase of Video Gaming Technologies, Aristocrat Leisure Ltd. now has 3,000 worldwide employees.
Buffalo Poker Machines
With the tribal gaming and interactive gaming niches to penetrate, the company plans to convert its popular Australian pokies line into American and international products. Buffalo Pokies were debuted at least year’s Global Gaming Conference.
Licensed products like “The Walking Dead”, “Batman”, and “Tarzan” are also set to be marketed to a wider audience. Speaking of nimbleness, Aristocrat continues to add licensed products. In the next year, “Game of Thrones”, “Sons of Anarchy”, and “Big Bang Theory” will be released.
Though IGT and Bally Technologies might continue to be the giants dominating the US slot machine industry, Aristocrat Leisure remains a viable third option with its own niche.
About Aristocrat Leisure
Aristocrat Leisure was founded in Australia in the 1950s by the legendary Len Ainsworth. The company became the leading manufacturer of Australian slot machines–called poker machines or pokies. Over the decades, Aristcrat pokies were found in every corner of Australia, where Aussies love their pokies more than Americans love slots.
The industry changed. Len Ainsworth left the company he founded in the 1990s and founded a chief rival: Ainsworth Gaming Technologies. AGT is top Australian competitor, though restricted strictly to the Land Down Under. Meanwhile, IGT Australia became the major competition for Aristocrat. The Australian company eventually emulated its American rival and went international, so the 21st century should entail decades of global competition.
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