Simon Hammon’s Life’s Work in Slot Machines: A Look Ahead
Simon Hammon, recently named head of Relax Gaming, insists he’s not your average “product person.” But the games he’s launched during his time in charge, such as Starburst during his time at NetEnt, have had a huge effect on the industry. In the third and final part of this interview series, he talks about the future of the slot machine industry, which is likely to be shaped by a combination of stricter rules and new products.
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Simon Hammon’s Life’s Work in Slot Machines: A Look Ahead
Be Ready for Challenges: New Rules and Slot Machine Limits
In the second part of this series, Hammon outlined what a studio needs to do to become a well-known name in the industry, but the entire slot machine industry is facing a new set of challenges as gaming rules become increasingly restrictive on the features, bets, and even the speed of spins they can offer.
The biggest companies in the industry may face the biggest difficulties, to the point where strictly regulated markets may become less appealing to studios. “There are very few suppliers who can handle a large number of regulated markets and handle the amount of change required at a portfolio level,” Hammon believes.
“Imagine you have 50 games, and new regulatory conditions come out. It’s not a pick-and-choose [situation];
This is a difficulty,” “Will you adhere to the rules?” and “How do you manage this collection?”
Operators will be more cautious about which studios they collaborate with, more inclined to partner with those that can take accountability to avoid compliance problems. As a consequence, the development process itself will be restricted by rising demands from European authorities, such as wagering limits, speed durations, alerts, and expenditure reports.
“They will have a significant influence on game design,” he stated. “The way games are developed today is a far cry from what it was three years ago, or even two years ago, behind the scenes.
“I believe we shouldn’t avoid the truth. The European market is becoming increasingly challenging, with less capital being invested, which is also why many providers are expanding into new markets. Operators are pushing into new markets to obtain easier, more convenient revenue.”
Discovering Space to Expand: Why B2B is Now in Regulators’ Sights
This hints at a growing interest in gray markets, even black markets, in both the operator and supplier space. Some organizations, in both areas, are almost “publicly” reporting growth in these areas as massive triumphs.
Even companies that are highly regulated in the United States will brag of success in areas like Asia, which Hammon acknowledges “raises some queries,” even if it might depress stock prices or valuations.
Providers have a broader reach in both the white and gray marketplaces, signifying they have more potential for expansion. After all, governing bodies typically concentrate on the consumers, the operators, rather than the providers.
However, Harmon emphasizes that this is about to shift as governing bodies mature and recognize the significance of B2B in the industry’s value chain. “A few years ago, there was discussion about whether regulating the marketplace would suppress competition and provide long-term sustainable income.
“I believe those inquiries are being examined as conditions and tax obligations increase and the reality of return on investment begins to become evident, to the point that I’ve never witnessed so many press releases about operators relinquishing licenses,” he explained. “The financial reality is starting to catch up with the theory.”
For Relax, the focus appears to be on the regulatory space, more specifically, the way it is being marketed, rather than pursuing growth in various regions. Harmon explained that the selection of which opportunities to address is based on a number of factors. “How intricate is the entry? What are the business opportunities available? Do we have an empty spot? Do we have existing operators that can enter the marketplace, or are we discussing something entirely new, a fresh sale? Then there’s prioritization; which are the larger targets that can deliver more tangible outcomes in a shorter timeframe?”
This has impacted releases in Spain, Italy, and the upcoming Ontario release, but he emphasized the need to be practical and determine the feasibility of each market before entering. “Our aims are very clear and simple to define,” he added, “it’s about income potential and operational ease.”
Without a doubt, it won’t shy away from bigger obstacles. Take the US, for instance. Ontario has provided Relax a foothold in North America, and US expansion is in progress.
“We will certainly enter, and we’re taking steps,” Hammon stated. “No one knows Relax there. No one knows what Money Train and Temple Tumble are. It’s a position we’re very comfortable with.
“We were even a competitor in Europe, and now it’s time to adopt that mindset and lessons learned and attack a new market and explain why we’re superior.”
Don’t go for the obvious: what’s driving the progression of slots?
As someone clearly knowledgeable about his field, Hammon is often asked what will disrupt the slots industry, after all, he has a long history in it. After all, the slots industry, since Microgaming launched the first game in 1994, arguably has only two real milestones that have altered the industry.
So, after country-specific rules and mobile gaming, what’s the next game-changer for the industry?
Hammon acknowledges people expect him to say something insightful and visionary.
Conversely, he believes financial feasibility will be the main driver of transformation in the next three to four years.
“It may not be dazzling, but I believe it’s accurate,” he stated. “If you’re discussing brand metamorphosis, sales, perception, it all boils down to the basics of return on investment.
“I believe the pure economics of the enterprise, especially as a provider, will dictate the next wave of alteration. So, honestly, I think you’ll witness significant changes.” He stated this pattern is already beginning to appear, with leading slot brands now becoming part of larger organizations.
The industry is experiencing rapid transformations, with emerging brands competing for market share, intensifying competition across the board, coupled with stricter regulation and increasing costs, not to mention broader economic pressures. He said those who are able to remain, and how they evolve in the process, will be fascinating to observe.
It may not be as flashy as multi-player slots, but for Harmon, the business side is the most intriguing aspect of the industry. “If you don’t comprehend that, and you don’t recognize the risks involved, you won’t endure.”
This brings to mind the issue of volume entering the market every month; there’s so much content available, it’s difficult to stand out. “This situation can only persist for so long,” he continued. “So the [financial] issue arises.”
In the years to come, a large number of individuals will reach the natural conclusion of their lives and will alter the course of the game.
Never lose your inquisitiveness: Is this field becoming obsolete?
However, even in the face of this wave of transformation, Hanmon acknowledges that the field feels somewhat antiquated in certain aspects. He believes that the value of industry media is gradually “vanishing,” and the newly established award ceremonies are diminishing the significance of the concept.
He also yearns to witness a fresh generation of industry professionals emerge, breaking the established pattern of executives transitioning from one company to another. “I believe there are many individuals who are employed who claim to possess specific knowledge—the reality is they lack that experience,” he stated. “I believe this dynamic, and the nature of simply relying on a sufficient quantity of skilled, enthusiastic, seasoned individuals, rather than merely promoting individuals from within because they are present.
“I wish there were more aspiring competitors. I believe the field as a whole needs to recruit from outside the field. I am referring to energetic individuals from diverse fields who can bring a higher level of proficiency in specific areas.”
But he believes the most disheartening aspect is the lack of amazement for novel games. “There was a period when you would attend a game showcase, and you would be thrilled to do so. The operators in the room would inquire, ‘What are you launching? What is next?”
Reaching a state of calm, their aim is to recreate that incredible sensation. This will be accomplished through Magic Money Train 3, now accessible, alongside a host of new features, advancements, and market launches.
“However, that presents a challenge. I mean, how do you achieve it? How do you generate that excitement? How do you get people discussing you, saying, ‘Observe what they’ve done?'”
“[But] when you do, it might be even more significant.”
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