Perhaps more so in tough times than good ones, industry leaders demonstrate an ability to separate themselves from the rest of the pack. That can certainly be said about Bally Technologies.

As a leading manufacturer of slot machines and systems developer, the company has continued to enjoy success despite the worldwide economic downturn. This is in no small part thanks to the guidance of Richard Haddrill, the company’s president and CEO.

Haddrill spoke with Casino Connection Editor Frank Legato late last year about the company’s top products and where he sees the industry heading in the next couple of years.

Casino Connection: Are you looking toward further international expansion in 2009?

Haddrill: We just opened in Holland, and we are opening an office in Eastern Europe as well. And, we just signed a new distributor arrangement for Peru. So, we’re probably good on offices for the next six to nine months. At some point, we’ll be re-entering Australia, and as we continue to grow in certain markets, open offices there. We recently opened an office in South Africa, as well.    

So, I think we’re pretty good for the next six months, but if we were here a year from now, I’d expect one or two more, at least.

Is the international still a profitable market in these worldwide economic times?

Absolutely. Our international as a percent of revenue is 15 percent now, up from 6 percent four years ago. We’re still behind our competitors, who range from 30 percent to 60 percent. So it’s a great growth opportunity for us. It’s important we do it profitably, so we have been doing it in a way that has allowed us to be profitable as we grow, and not just grow for growth’s sake.

On the game side, you seem to be perfecting and renewing game styles that have been profitable to you in the past. Can we expect brand new game groups in addition to Alpha versions of proven winners?

Yes. We’ve pioneered skill-based games with Pong, and now its follow-up Break-Out, so expect more of that, which is very unique and innovative. We had our Dual Vision game there at G2E, which is a community game. And, we continue to be great innovators in hardware. We innovated the wide-screen CineVision, and we came on this year with the brand-new Big Bertha and a great new bar-top. So, there’s been a lot of innovation at Bally on all fronts.    

On the system front, we’re doing fantastic things with business intelligence and iVIEW DM, the picture-in-picture technology for the customer communication network we call iVIEW. It’s a great innovation on that front.

Then on the core games content, we have completely enhanced our video product offering. We got a lot of great feedback at the show. We’ve always been great at steppers, but the new video looks particularly strong for us, to add to games that have been great, like Hot Shots and Quick Hits, that we already have in our video portfolio.

It took a long time to get Pong out on the market, and now you have Break-Out. Are you still running into regulatory challenges with these skills-based games?

Like a lot of games, the first launch, either in terms of working with the regulators you have to make changes, or getting the initial player feedback you have to make changes. So we have made some changes to Pong, and learned from that as we launched Break-Out. Both games are great games; they’re kind of niche games, so we don’t expect to sell as many of them as Hot Shot or Blazing 7s, but they are fun. They appeal to a broad demographic range, and from a regulatory point of view, we think we’re there for most jurisdictions.    

Pong has been approved in Nevada, and in some of the Native American jurisdictions. But as I said, when we first put it out, we put it in a couple of locations, and made some changes. We’re really just re-launching it with the revised mechanics, but we’re happy enough with the initial pilots to launch Break-Out as well.

Multiple progressives are a big trend and Hot Shots has been a killer for you. Could you talk about that product?

It’s been our most successful game ever, although Blazing 7s is right in there as well. We have more Hot Shot titles coming; it’s just that the original titles have done so well, we haven’t needed to have many follow-ons yet. So, we’re kind of staging the release of those.    

We’ve got about a dozen premium games ready for launch between now and May—a very full pipeline of great premium games—so we are trying to make sure we launch them correctly, so as not to overwhelm our sales force or the customer base. So, that’s a great opportunity for us in multi-level progressives. We had a lot of tower games at the show. On the innovation front, we also had the three-in-one stepper, which we think is great for people who have looked at steppers and said, ‘Gee, as we move toward a server-based or networked gaming environment, what are steppers going to do?’ We’ve got several ways of tackling that, and the first one is a multi-game stepper.

On the systems side, there has been a lot of discussion about incorporating customer relationship management features into the tracking systems. Is that a priority for you as the system leader?

Yes, clearly, our business intelligence tool is designed to manage the slot floor, but also to give you better data on your customers. For example, we can inform customers through maps as to which zip codes in an area have differing play characteristics, so you can target the mailings and promotions. In addition, as you build the player database, you can use the iVIEW network to give unique promotions to different classes of customers—platinum versus gold versus bronze players, who you will know more about; whether they like to eat in the steakhouse or cafeteria. You can give them a coupon for a free meal at the restaurant you know they like more.

There is all that kind of database-building that we’re seeing in the initial stages as our customers implement the high-speed floor networks as well, to do more with media management, and to do more with tournaments. For example, our tournaments product allows you to enter platinum players in preferred tournaments, across any gaming device on the floor, during specified times of day.    

So, there is much more customization to create that special player experience, to make the player want to spend their entertainment dollars in a casino, and do it in a cost-effective way. A lot of our innovations in systems centers around that.

You’ve fared better than some of your competitors in this economic crisis. What kinds of measures are you taking to make sure your stock price stays up, your revenues keep climbing, etc.?

As I tell our employees we should first take care of our customers, then take care of each other (meaning each employee continues to grow and thrive), and then focus on profitable growth. There’s only so much we can do about the stock price. We’re in a very negative investing environment right now, so all we can do is keep building a great long-term business. And we do that by building great products, recruiting great people and giving great customer service at a good value.    Our products are definitely designed to produce a strong return on investment for customers. We designed our cabinets to be modular—so you can change stepper to video, so you can add a top box or a second screen, so you can upgrade to server compatibility, and therefore preserve capital for the long term. We’ve made our design teams very efficient by also using one platform, Alpha, for both stepper and video.

So, we do continue to invest. In this slow economy, we’re hiring at a slower rate and being more careful. But we’re still hiring. We definitely are designing our products to be a great return for our customers. No system customer in 31 years of Bally’s history in systems has ever been left behind; they’ve always had an upgrade path. That makes customers confident investing with Bally. We’ve completely retooled our systems product line to state-of-the-art technologies now, so we enter this downturn as a pretty well-oiled machine. Pretty lean, growing nicely, good management team, retooled products on both the games and system sides. So, although we know it’s going to be challenging, and it has been, we are continuing to grow and improve our profitability through those basic blocking and tackling moves I talked about.

By Casino Connection Staff