As Macau undergoes a metamorphosis, the upcoming wave of Cotai resorts could potentially face a heretofore unimagined challenge—getting Chinese visitors interested in checking out the casino floor. That’s where the attention-grabbing products of SEGA SAMMY CREATION could serve a critical purpose
What a difference a year makes.
Macau’s casino revenue, on track to another hefty decline this month after a 39% year-on-year plunge in April, was still growing at the time of G2E Asia last May. Although the VIP sector had already started to falter under Beijing’s corruption crackdown, massmarket revenue seemed unassailable twelve months ago, continuing an unbroken run of heady growth since 2011. It didn’t seem likely then that mass revenue growth would even dip significantly below 30%, much less give way to double-digit contractions.
Underlying the newfound weakness in Macau’s mass market is a crackdown in illicit fund flows out of mainland China using state-backed UnionPay debit cards and a total smoking ban that came into effect on all main-floor casino areas from October. There’s more to it, however. The tastes of China’s swelling ranks of middle class consumers—a group that barely existed at the turn of the millennium—are evolving at an astounding pace. Last year, high-spending Chinese tourists made 107 million visits overseas. The more they travel, the more sophisticated they’re becoming in deciding where to go next, and Macau apparently isn’t living up to all their new expectations. In particular, China’s rising young generation of consumers—those born after the mid-80s in the era of economic reform and the country’s opening up to the world—are looking for more exotic locales and high-quality experiences, and it’s doubtful they’ll be as keen on old-style gambling as the generation they’re going to supplant.
The upcoming wave of resorts in Macau’s Cotai district promise to be among the most spectacular ever seen, replete with extensive world-class leisure offerings that should reignite interest among discerning Chinese travelers and, if Las Vegas is any guide, help elevate Macau into a regional entertainment hub.
If all goes to plan, in the very near future, Cotai’s sprawling new resorts will be full of guests who’ve come for the entertainment, dining, shopping and MICE—meetings, incentives, conferences and exhibitions—but aren’t necessarily keen on casinos.
The new casinos, meanwhile, will feature a radically different product mix to the prevailing norm in Macau. There’ll be a conspicuous dearth of gaming tables, with the government allocating only a fraction of the tables originally expected to each property. Machines, including e-tables, will have to fill the gap, and in the process will rise to prominence.
Within the machine mix, it would behoove operators to include some products of the sort developed by SEGA SAMMY CREATION in order to get Macau’s new breed of visitor interested in gambling, says Takashi Maekawa, vice president of the company’s Business Management & Development Department. “When the new generation of tourists comes to Macau, a lot of them might just walk straight through the casino floor. But our eye-catching machine might prompt them to stop to check it out, maybe give it a try. In that sense I think we’re very different from what’s out there,” he explains.
Mr Maekawa adds: “The situation that Macau is facing now is a big opportunity for us because we can help operators fill up their floor space with something that’s very different, very new, very appealing. And we believe we’re able to help support Macau in maturing its overall atmosphere as an entertainment destination.”
It was either prescience or luck that, well ahead of the unfolding of Macau’s current predicament, led SEGA SAMMY HOLDINGS to establish a new division in June 2013 with a mandate to produce revolutionary electronic gaming machines imbued with fun and excitement. Leading the charge is Hisao Oguchi, a legendary video and arcade game developer at SEGA, who, after that company was acquired by Japan’s largest pachinko manufacturer, Sammy Corporation, went on to serve as the chief creative officer of the new entity.
At Mr Oguchi’s disposal are many of the talented game developers he worked with at SEGA, who were instructed to throw out established game concepts and come up with entirely new ones while incorporating his basic development principles: “Game rules should be simple. In the simplicity of the games there should be a dream of winning big and also fun and excitement in the anticipation of the outcomes.”
At last year’s G2E Asia, SEGA SAMMY CREATION unveiled its first three products, which, beyond their sheer scale, also stood out with their elegant looks and high-quality finishes. They’re all also “designed specifically to appeal to players in Asian or Chinese countries, with dragons and other such elements,” notes Mr Maekawa.
On Sic Bo Bonus Jackpot, the dream of winning big is fueled by the four-level Cai Shen Progressive Jackpot, which all players are eligible to win without any side bet necessary. The crowd-pulling elements come in the form of dice floating on a cushion of air, along with massive signage and results displays.
The selection of female dealers on the video baccarat game ranges from a girl-next-door type to more exotic, risqué choices, with video images of the models from the wrist up seamlessly combined with a clever computer rendering of their hands and the cards they’re holding. The game allows the player to place bets on five different tables, and the main unit has separate screens enabling players to follow the action on their table of choice, along with their preferred dealers.
The massive big-wheel game consists of three concentric rings with numbered positions around which a ball spins. Unlike other big-wheel games, it features additional positions that allow the ball to progress to the next ring. Each successive ring features larger payouts and higher-level progressive awards to build excitement and anticipation. The play is easy. Simply place a wager on a single number. No side bet is necessary, but larger bets have a greater chance of qualifying for higher-level progressives.
The company recommends placing about 30 betting stations around the main unit of each game, though it provides operators the flexibility to scale that up to 100 stations. The stations have large screens equipped with handy features that help players follow the games and intuitively place bets.
“These machines are very important for our company, basically to show what we are capable of doing,” stresses Mr Maekawa. “Even if we go on to make slot machines, we will always make sure they have an entertainment aspect to them. We don’t know how long it will take for our products to gain traction in the market, but we’re sure that Macau is going to need these types of machines and I think that time will prove our games successful.”
There are obvious benefits to having a backer like SEGA SAMMY HOLDINGS. “It gives us access to a strong, experienced development team that provides considerable help in producing new games with new technology,” says Mr Maekawa. “Also, in terms of sales it helps because a lot of people are familiar with the games SEGA provided in the late ‘80s and ‘90s [through arcades and home consoles worldwide], so it’s easier for us to actually talk to these people because they’re usually interested in finding out what kind of products SEGA SAMMY is going to provide in the gaming industry. It’s certainly given us a chance to talk to operators directly. At least it gets our foot in the door.”
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Another benefit of having such a big, established parent company is it offers prospective customers an assurance of quality. “SEGA obviously needed to achieve a high standard of quality to become a global leader in amusement, and it’s also a requirement at Sammy because pachinko, like gaming, is a very strictly regulated industry. So we have that background of ensuring quality. The part that we were lacking was the knowledge of gaming compliance, so we made sure when we started this business that we had members on our team with knowledge and experience from the gaming industry. So while we set out to produce machines that look new, very different, they’re not just a bunch of crazy machines and operators can feel safe we make them based on quality and gaming compliance, and the machines have a solid and secure backbone.”
SEGA SAMMY CREATION’s pedigree does, however, come with a burden. “We have the challenge of wowing people every time we produce a new game. I think that’s what’s expected from us because of our brand name,” says Mr Maekawa.
The company knew it would take time to gain acceptance for its unconventional products. While operators are intrigued by the prospects, there’s a natural aversion to being the first to take the plunge and place a machine on the floor. Fortunately, that longawaited first installation at a major casino is finally moving ahead in the coming weeks.
Mr Maekawa is understandably pleased: “This is going to be a huge year for us. The goal up to last year was getting product ready to exhibit. But the goal ever since then has been putting it on the floor. We had the product last year at G2E Asia. Everyone’s seen it, but people are questioning how it will perform when it’s on the floor.
“Now, we’re going to have a machine on the floor. We’re going to benefit hugely from this experience because, for the first time, we’re actually going to get feedback from the market which is going to help us create new and better games.”
