• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

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