In 2008, lottery giant GTECH Corporation, a division of Italian lottery conglomerate Lottomatica, completed its purchase of the former Atronic Group. Atronic was the second slot manufacturer purchased by GTECH, which had earlier purchased Canadian VLT manufacturer Spielo. This year, the integration of the two former manufacturers into Lottomatica’s slot-manufacturing division was completed with the official launch of Spielo International, a single new slot-manufacturing entity. Global Gaming Business Editor Frank Legato talked to Walter Bugno, president and CEO of the integrated slot supplier, about the strengths of the newly merged supplier. To hear a full podcast of this interview, visit www.ggbnews.com/podcasts.
GGB: Spielo and the Atronic Group were very different companies in product style and in the markets they were serving. How big a task was it to merge these into one corporate entity.
Bugno: I think the fact that Atronic concentrated primarily on the casino segment, and Spielo concentrated primarily on the distributed segment, took a lot of the walls away. So it became more about trying to find where the efficiencies were. And so I would say, no more challenging than anything similar that you’ve seen in the industry.
What do you feel were the strongest attributes of each of the former companies, and how do they survive in Spielo International?
The original Spielo had edged itself into a very strong position, in the distributed gaming space—and with it, built a strong reputation of being a reliable, innovative, integrated supplier of systems, product and content. And it was a very solid business in a market that today is growing internationally. Atronic, on the other hand, had focused primarily internationally, rather than in the United States. Of course we have a presence in the United States, but it’s not a significant presence. Our strong points are primarily Europe and Latin America. And what we’ve done is take the opportunity of consolidating and removing duplication, primarily in the areas of technology and content development, so we can reinvest to create growth opportunities in markets where we were weaker.
And you’ve just completed one more bit of integration, quite recently, in the interactive division. Please explain that.
Within Lottomatica Group, we had four divisions. Of course, the gaming division was one, but we also had an interactive business, G2, which is a business-to-business solution provider. And with the trend of convergence that’s happening now around the world between land-based and online, and the level of opportunity that the change in regulations is having on the online space, and the common outcome, it made a lot of sense for us to actually bring all the businesses together. So the new Spielo International, along with its interactive business G2, is able to offer to all of its clients an integrated solution of product technology, systems and services, whether it’s a land-based or an online environment.
The Atronic brand has been a fixture for years on the international gaming scene. Do you plan to phase that brand out, and if so, how do you phase it out in markets such as Austria, where it’s been extremely popular?
It’s not our intention to phase out the brand from a product perspective. Let’s use an example, the Coca Cola Company, which has brands underneath like Coca Cola and Fanta and Sprite. We will do exactly the same thing. We will have a range of products, which are targeted at different markets or segments, be they geography or product type, some of which will carry the Spielo brand as a product, and some that will carry the Atronic brand. So, the real integration has happened as a trading entity. Spielo International is our umbrella corporate identity, and we will just carry different products, just like now we intend to carry an interactive product line as well.
You have merged the gaming platforms as well. What is your primary game platform going forward?
We’re still in the process of bringing everyone onto a common platform, which is actually the platform that we had operating out of the North American distributed market, as a starting point. So the Sensys EP platform will be able to customize and adapt to different segments around the world. But our idea now, having done hardware, is to move the software component to some form of commonality as well. It’s a journey; it doesn’t happen overnight. We need to do it step by step, and bring everyone onto a common set of guidelines. But we’re on our way, and we’re feeling pretty good about it.
You’ve had international hits with Sphinx and Deal or No Deal. What’s the next big hit for Spielo?
We’re not ready to show it to the market yet, in its entirety. Our view is quite simple. If we are going to make a difference in the North American commercial market, we know we can’t just bring another game. It needs to be exciting, it needs to be new, it needs to be different, if we want to move the needle. We’re keeping it under wraps at the moment, but in early 2012 we’ll start sharing that with our customers.
The big question: Do you get a sense that your customers are ready to spend some money again, finally?
The focus for us this year has not been very much on the sale of product in North America. The focus of G2E 2011 has been more on breadth of business and breadth of market globally. And it’s been quite positive. My sense is different parts of the world are responding differently. There are markets which are showing good recovery. Latin America is a great example. The Latin America business at the moment is going very, very strong. The customers are eager, they’re buying, they’re refreshing their floors. And that’s a good sign. Markets of Europe and markets of North America are a little bit more tentative. That’s what we’re seeing and experiencing.