14
B 2 B
Essential Guide to... Second-hand machines
Sector Overview
SWOT ANALYSIS
SWOT ANALYSIS SECOND HAND MACHINES
STRENGTHS
• Second hand equipment is often familiar, well-known steady cashbox earners
• Cheaper to purchase than new equipment
• Second hand machines often include new features which had been overlooked in the original spec
WEAKNESSES
• Some end users may not realise the machine has had new content added
• The kudos value of buying new still underpins purchasing decisions for some
• Parts, peripherals and spares for the original machines may have become obsolete
OPPORTUNITIES
Coin-op sector has always had an eye for a bargain
• Particularly in the UK and US, equipment is built to last, with huge numbers of machines on site 10 years old or more
• Second hand machines in part exchange can stimulate new purchases
• Non-reclaimable VAT on new machines may see operators favour older product
THREATS
• Certain heavily-branded machines may be hard to move on
• Rise in finance deals for new products by specialist dealers
• Cheaply manufactured machines from Far East
Economic circumstances aside, the UK amusement and gaming sector simply wouldn’ t be where it is today without a steady stream of high-quality second hand machines.
W hile thrift is certainly in vogue at present, due to the after-effects of the credit crunch and the double dip recession, it’ s always been in fashion in UK coinop circles. Yes, the UK has a manufacturing sector that it can rightly be proud of and which deserves wholesale support, but regardless of what’ s going on in the inextricably linked worlds of retail and entertainment, the fact is that we’ re looking at ways in which to make our money go further. There are many reasons for increasing numbers of distributors and- in turn- operators turning to second hand stock equipment.
When some of the UK’ s leading distributors and suppliers openly advertise their reconditioned stock alongside new products, it is clear that the industry accepts that, while it is a delicate balancing act, new and used can coexist in the market without wholesale implosion.
To some, the existence of a thriving second hand market in the coin-op arena could be seen as a sign of desperation or an overall lack of willingness to invest in new equipment, the truth is actually a little more sophisticated.
Firstly, the fact that second hand equipment is freely bought and sold illustrates that, by definition, the products in question must have been well-built and proven popular. Secondly, the machine market reflects the current economic situation whereby all sectors of business are looking to squeeze the best value out of low-cost purchases. Thirdly, the second-hand market in the coin-op industry is so long established that there is no stigma in buying second hand, nor is there any suspicion that refurbished or rebuilt goods might be in any way substandard, due to the professionalism of the firms dealing most heavily in such items.
Moreover, faith in the second hand market breeds confidence and if good deals are on the table where machines look and play as good as new for a fraction of the price it is inevitable that operators will literally buy into the idea.
A machine that has found favour with customers in its halcyon days immediately after purchase, will undoubtedly entertain more players when it re-enters the market as a second hand model. While it could be argued that UK manufacturers are a victim of their own high standards, used machines are testament to their efforts and keep their brand name and qualities in the public domain for longer. Therefore, on the occasion that an operator feels the time is right to invest in new product, he knows immediately which manufacturer he can trust to give him a good ROI and a model which will hold its value when it comes to upgrade and update his stock in years to come.
UK-based used machine dealers rightly pride themselves on quality, therefore whether their equipment on sale is a rebuild, an upgrade or a straightforward refurbishment, there is no room for inferior service- especially in these cash-strapped times.
The overall cautious attitude to spending has further increased the opportunities available to experts in upgrades across the board, be it in cash handling peripherals, SWPs or even amusement-only products. Thankfully, by using firms such as those showcasing their wares in this issue, the essential prerequisites of any coin-op related equipment- quality, value for money and innovation – operators can make their budgets go further than ever before.
The 2011 change in B3 stake and numbers permitted, presented a welcome and significant opportunity for the traditional land-based gaming sector. The inevitable raft of high-quality, original B3 games have been manufactured since, but not every operator can afford such a luxury. This is where the UK’ s leading distribution firms come in.
Additionally, seaside operators who use redemption machines to lure families into their arcades and FECs, can rest assured that if they need a creative rebuild of a machine that originally didn’ t dispense tickets, there are firms out there that can meet this demand.
Furthermore, opportunities have arisen for single site operators and seaside operators who believe that SWP machines are an integral part of their product mix, with new content being placed in old cabinets. The list, it seems, is endless, and while it’ s a sign of the times that operators are looking to rebuilds in greater numbers nowadays, at least they can be assured that the machines they buy are fit for purpose, meet technical standards and are, effectively,‘ as new’.
A leading distributor, known equally for his firm’ s ability to shift new and second hand machines, recently told Coinslot:“ Operators are desperate for quality second hand Cat C, B3 and video product.”
The bottom line is that a never-ending stream of high quality refurbs, rebuilds and reconditioned used equipment is permeating the UK market nowadays- a sign of the times, yes, but also testament to the professionalism, variety and level of service underpinning the sector.
Coinslot JUNE 14- JUNE 20, 2013