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Validation of Success

JCM Global moves to new levels as the gaming industry changes

Validation of Success

The “golden age” of Japanese entrepreneurialism occurred during the 1950s. Companies like Sony, Honda, Hitachi, Mitsubishi, Toyota and many others were formed in the decade following World War II, changing forever how the world shopped for goods and services. The explosion of new technology ushered in by these companies quickly surpassed more established American and European companies.

One smaller company started in 1955 may not have had the worldwide impact of those Japanese giants, but its importance to the gaming industry could be measured in similar increments.

Japan Cash Machine began its life in Osaka producing cash registers, and little changed for the first 20 years, except for the development of electronic cash registers. It wasn’t until 1981, when JCM developed one of the first bill validators for the Japanese yen, that the future of JCM Global began to form. In 1986, the company developed a validator for U.S. currency, as well as the Deutsche mark, expanding its reach internationally.

Aki Isoi was a young executive ready to change the face of his company. He spent a few years in the U.S. researching different industries where JCM products could play a role, when he stumbled upon Las Vegas.

“We didn’t know where to market it,” says Isoi, who everyone calls Aki. “I went around the world, and traveled with a suitcase with a sample bill validator inside. I landed in Las Vegas, and met the right people at the right time. I was very fortunate.”

But success was not immediate in the United States. It actually began at home in Japan, where a pachinko manufacturer produced a change machine using a JCM bill validator.

“This pachinko parlor was making a lot of change from a separate kiosk, but there was no bill validator used inside of a pachinko machine,” explains Isoi. “So I took the same bill validator to IGT in July 1990 and met the key people there. Together, we designed the first bill validator precisely for use inside slot machines, and two years later, the product became available. It revolutionized the industry, and the rest of it is history.”

Gaming Validation

Unlike other manufacturers of bill validators, JCM’s primary business is in the gaming industry. The company was born in the industry and hopes to maintain its dominant position there. But that’s not to say that JCM is not looking to expand.

“Diversification is a key word for JCM,” says Isoi. “We are always looking for new opportunities inside and outside of gaming, such as kiosks, banking, transportation—parking—wherever we can sell our products. Wherever we can see the need for bill validators, that’s where we’ll go.”

Isoi says JCM would never have become successful if it wasn’t for the cooperation of the governments in being able to recognize the currency. At the same time, the process is long and complicated.

“It’s been challenging,” he admits. “But we’re always on top of it. We work very closely with government agencies such as Secret Service or the Department of Engraving and Printing. And nowadays, government agencies are very cooperative in helping us to make sure that our products are performing at the optimum level.”

To serve the market, Isoi says the company has opened regional offices in Germany, England, Australia, Macau and Thailand, in addition to its hubs in Japan and Nevada.

The proliferation of new currency seems to be speeding up in recent years, but Isoi says the governments are always willing to help keep the bill acceptors up to date.

“They show us the new currency well in advance before it’s ready,” he says. “So by the time the new currency hits the street, we have already developed software to handle it. So there’s very minimal disruption to operators.”

And that’s part of the deal when a casino or a manufacturer buys a JCM bill acceptor. It’s good for the lifetime of the device complete with updates about new currencies being issued, at no additional cost to the customers.

“Software support is a major part of our costs,” he says. “But that’s the promise we give to our clients.”

And JCM is very good at what they do. Tom Nieman, senior vice president of marketing for JCM, says the company has always stood by all four generations of bill validators in the gaming industry. “We have gained the trust of customers because they know we will go to any length to keep them satisfied, and… our products work! As counterfeiters deploy the latest attempt to cheat casinos, JCM is working arm in arm with all the critical stakeholders to secure the gaming operators’ revenue.”

As a vendor to the casino industry, JCM is in a unique position in having the casino operators as customers, as well as the slot manufacturers (OEMs). It’s a delicate balance, according to Isoi.

“Whenever the manufacturer sells their new slot machines, we bring our bill validator to the slot machine manufacturers,” he says. “But the casinos are ones who specify our components. So, more than 50 percent of our sales and marketing efforts are directed toward casino operators, making sure that both parties are happy with our products. So, if you ask me who my customers are, it is both OEM as well as the casino operator.”

Nieman says that dynamic has changed in recent years.

“The paradigm shifted some years back,” he explains. “It used to be, if you were in communication with three of the big OEMs, your day was done. You didn’t need a lot of marketing. You didn’t need a big sales staff. Today, the OEM side has now expanded with many more manufacturers. At the same time, literally every casino is our customer as well. So, our message has to be delivered to that end user, the casino operator. We want them happy; we want them excited to get the JCM technology on the floor, at the same time, staying close to being part of our marketing efforts with the OEMs.”

That’s the Ticket

The fourth generation of bill acceptors released by JCM, the iVIZION series, is the most sophisticated yet. The technology—which now must scan tickets, as well as currency—provides the utmost in security to the operators, as well as recording an acceptance rate north of 99 percent, an important milestone for operators.

“That’s what they’re most concerned with,” says Isoi. “They want to make sure that currency the player puts into the slot machine is accepted, and we’ve achieved that rate.”

In addition to validating the bills, the iVIZION captures images of bills and tickets and will allow the images to be sent to a central server if the operator chooses to implement the required infrastructure, allowing operators to archive that information for as long as they want it—or regulators want it.

Almost as soon as the industry began to accept bill validators, the need to scan bar codes became apparent. An experiment with tickets at MGM Grand in the 1990s was a failure, but the lessons learned during that period were valuable and form the basis for the ticket/bill acceptor industry today.

“Whenever we design a bill validator,” says Isoi, “we always are sure that we incorporate the right sensor to read the bar code coupons.”

In addition to the iVIZION bill acceptor, JCM has recently introduced Dynamic Network Applications (DNA) that provides operators with a wide range of analytical tools.

“We’re always looking to bring more value to operators,” says Isoi. “And DNA provides a tool for us to monitor the health of the bill validator, to download software, to—on a real-time basis—see what’s going on within the bill validators. And it provides better service to operators. So, DNA is a big differentiator for JCM product to bring the technology to a next level.”

Nieman says there’s more to it than that.

“And it’s not only the bill validator; it’s really a component management device,” he says. “So any component that’s in the machine, whether it’s the printer, a card reader, or another sub component inside, the bill validator almost becomes a communication hub to do that. And DNA provides this real-time communication.

“In addition, DNA has the ability to gather information via SAS and directly from the peripheral. So DNA knows whose machine it is. DNA knows what peripheral firmware version they’re using; DNA knows what model it is. DNA also knows details that SAS does not provide including detailed peripherals status and information that is not provided via SAS.”

Branching Out

While JCM bill acceptors work with all ticket printers, even their own for a while, the company has formed a partnership with Canadian-based Nanoptix. Isoi says printers were never JCM’s core business.

“Our first printers were successful,” he says. “Many casinos purchased JCM printers. But just like bill validator business, unless you keep investing money in new R&D, you can’t be a long-term player.”

Nieman says Nanoptix provides the technology and flexibility needed in today’s printers.

“Nanoptix gives us some of the new features that are part of all modern printers: color, branding, instant messaging, things like that; those elements were not part of our original printer,” he says.

Isoi says the relationship is growing.

“When the opportunity came to JCM to work with Nanoptix, we jumped at it,” he says, “and today we are not just a distributor of Nanoptix printers; we are a partner with Nanoptix, and we are working just like one business unit today.”

Another new division of JCM is digital signage. While JCM does not produce the digital signs, it has reached distribution deals with some of the major manufacturers: Samsung, LG, NEC, Sharp and others.

The advantage of working with JCM is its gaming-centric culture. JCM understands the needs of casino operators as well as anyone in the business, according to Isoi.

“JCM provides the digital media segment of the market because of our relationship with suppliers and with casinos, with our long-term experience,” he says. “We would be able to find the right partner for the right customer. So it’s been a good business for us, and we have a lot of plans to do more within that segment of business.”

Nieman says it’s an opportunity for the company to get in on the ground floor of this expanding market.

“The technology in that industry is just starting to explode,” he says. “It goes so far beyond what we think of today as a digital display. We’ve been fortunate to strike these relationships with some of the biggest brand names in the world. They realize that the best way into the gaming industry is with someone who knows where the front door, the back door, and the side door. And that’s JCM.”

Giving Back

Isoi recognizes that the gaming industry has been largely responsible for the success of JCM, and that’s why he decided to help organize the annual AGEM/AGA Golf Classic Presented by JCM Global. The 15th edition has just been completed, and during those years, more than $1 million has been raised for the benefit of the National Center for Responsible Gaming, the premier research organization on problem gambling in the nation.

“To me, that’s the way for me to show my personal appreciation to the industry,” he says, “to give something back to our industry. When I was trying to sell the first bill validator by traveling throughout the United States, this was the first business that welcomed JCM, creating the first opportunities for us. And JCM has grown along with these businesses. And we know that there may be some players who cannot gamble responsibly, and I want to be able to help them. So the JCM/AGA golf tournament is something I’m very proud of. And now with AGEM involved, I’m sure we can sustain it for many years.”

Nieman says the superior commitment to the tournament from everyone involved continues to make it a success.

“In any event like this, it’s tough to maintain interest and to keep it fresh with everybody involved after 15 years,” he says. “But I think with Aki’s commitment, and JCM’s commitment, to make this a priority, along with the AGA and AGEM, it’s going to continue to be important. Remember everybody is welcome into it; our friends, our competitors; everybody’s welcome. I think that’s made a big difference and kept it compelling for everyone to say, ‘I have to be there because the cause is important.'”

Service Feature

Because JCM’s products are so hardware-oriented, and as such, are subject to malfunctions, Isoi stresses the service component of the company. He says that’s because he was so intimately connected with the start of the business.

“I was JCM,” he says. “I did everything when the bill validator was first introduced. And to me, customer satisfaction was always the No. 1 priority. I did whatever it takes to keep the customer happy. When the bill validator first hit in the market, people didn’t understand how to use it. I used to receive a phone call at 2 a.m. or 3 a.m., and I assembled a team to come to the casino or OEM just to coach them how to use the bill validator and prove that there was nothing wrong with the product.”

This helped to establish the reputation for JCM service, he says.

“But by showing that kind of response,” he says, “you gain credibility from the OEM, credibility from the operators. Today, that is still the most important thing. And I would be very upset if my team doesn’t take care of the customers the way I used to take care of the customers. The customer is king. We will do whatever it takes. We view the bill validator as the most important component in any machine. That’s where the money goes in, that’s where the game starts. And if that product is down, then nobody is making money. So we take customer service very seriously. We’re not always 100 percent right. We make our mistakes, but how we correct those mistakes is a differentiator from the other companies.”

Like all gaming companies—operators and suppliers alike—JCM went through some tough times during the recent recession. Isoi says that the company has spent the time refining its products for when the hard times are over.

“JCM has a very strong balance sheet,” he says. “So the cash position we had kept us going. There is a time when the economy will come back, and we just have to be patient. During the tough times, we continued to invest money in new products and new technology. In fact, it was during this time that we began planning on how to grow our business to the next level when the economy comes back, and it seems to be coming back. And with the right product like iVIZION and the new partnerships we have created, it seems to me we are building momentum.”

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.