CHART DU JOUR: ASP ANALYSIS YIELDS A SURPRISINGLY INCONCLUSIVE CONCLUSION

The pundits have been predicting slot price declines yet after some pressure, slot ASPs remain resilient

There are a number of factors that should be pressuring slot ASPs.  Yet as the chart shows, ASPs are climbing again after 2 ½ years of flattish pricing.  We’re not ready yet to call an end to pricing pressure for the following reasons: 

  • Over the last 4 years, there has been a convergence movement between the best and worst performing products.  Even the smaller fish are producing decent products (Ainsworth, MGAM, Aruze, Speilo).  In 2008, we estimate the top 5 manufacturers accounted for 97% of shipments vs. 94% in 2011 and it continues to slip.  We think that in 2012, the top 5's share will fall to below 90%, due to Spielo's large share of the Canadian replacements.
  • Large new openings mean bigger discounts.  New markets that are opening are lower priced markets.
    • IL:  mid $12k
    • Canada:  better than IL but likely below $14k
  • Given the poor macro environment, there is some trading down for product that has less bells and whistles, unless the game is really a hit

CHART DU JOUR:  ASP ANALYSIS YIELDS A SURPRISINGLY INCONCLUSIVE CONCLUSION - slot supplier2