Interview with Héctor Fernández, CEO

"Investing in innovation drives Aristocrat into 2023 and beyond"

Héctor Fernández, Aristocrat Gaming CEO.
2022-10-26
Reading time 5:09 min
During the recent edition of the Global Gaming Expo in Las Vegas, Yogonet had the opportunity to exclusively interview Héctor Fernández, CEO of Aristocrat Gaming, who detailed his vision of the post-pandemic market for the gaming sector, discussed the company's investment strategy in relation to the development of new games, and communicated his excitement for the arrival of NFL slots, both in the United States and regionally.

How was your experience at G2E?
 
The show has been very successful, and as a company, we are excited about our performance at the Las Vegas show. We had great customer conversations, and the level of engagement with our customers and our games was exceptional.

The reason for this is that, during the pandemic, we never stopped investing in innovation within our product portfolio.
 
We invest between 11% and 12% of revenue back into the business in R&D. And during the pandemic, even though our revenue went to zero, we kept investing. Therefore, 100% of the games present at our booth at G2E are new titles, and 70% of Premium Games are developments that make their debut at the Global Gaming Expo. We've been so busy because our customers want to come and see all the new titles we are bringing to market.
 
Since operations resumed, the budgets of casinos to renew their fleet of gaming machines and equipment have been recovered and increased in some cases. Have you noticed significant differences between the investments of operators in the United States, with what an operator in Latin America might require, for example?

Yes, there have been differences in demand from US operators. When the activity closed around the world, and then reopened, it did faster in the United States than in Latin America.

In South America, they were closed for a long period of time. I am from Guatemala, and most of my family that was there had more restrictions and for longer than in the United States.

Another thing that happened is that, when the United States reopened, it never closed the arcades again. In Latin America they had to close intermittently, so we noticed differences in casinos when it comes to recovering their cash flow and analyzing investments in equipment.

It should be noted that we have seen that the demand for Premium games in Latin America has grown in recent times. Then they are more willing to bet on this type of game development.

This year we are starting to see activity rise again in Latin America, and part of our strategy is to follow these markets closely. We never stop investing in our customers’ markets.
 
 

As for the games offering, you told us that the company had a lot of development during the pandemic, allowing it to offer a wider range of products today. What kind of games are casino operators most interested in at the moment? Which are the most attractive?

Premium games, which were mainly what have been leased by operators, have had the most success in recent months.

We have developed games that have had strong results, and we have continued to invest in these high-performing games. For example, we have combined successful games for us into a single title. Buffalo Link is a title we released 18 months ago, and it was the game that grew the most in the history of the company. The game is a combination of Lightning Link and Buffalo, which generated a real point of attraction in our stand at G2E.

We've also developed games like Jackpot Carnival, which is a game originally released seven to ten years ago, and we brought it back with new functions and features. Cash Express is another game that has also been successful in the market in previous years, and we have a new version available to operators.

And another of the company's development strategies is in the Class II market in the United States. The Class II player is different than the Class III player, and we have approached these players both with original content created specifically for Class II as well as bringing successful Class III titles and converting them for the Class III market. This strategy has performed well for our customers.

Historically, Aristocrat has had games closely related to Intellectual Property, and always bet on developing games based on renowned franchises. Does the company's offering follow that line this year, or have you changed this strategy?

It is always an important part of our market and our business, the development of games based on large international franchises. For example, one of our new licensed games is NFL Slots, and we expect these games to reach casino floors in Fall 2023. We are excited to bring this premium brand to our customers and their players.

The company has officially announced the arrival of Anaxi, a new online game development brand. This is a segment that has grown a lot in both the United States and Latin America in the last 24 months.

That's right, a week before G2E we launched our new Anaxi brand, which is the third pillar of our business: we have the digital segment, we also have the land-based casino business, and now we have Anaxi, which will be responsible for bringing our successful casino games to regulated markets that can offer those same titles online.

While the vertical of physical casinos has always been important for the company, I believe that Anaxi is an exciting new venture because it fulfills the concept convergence between land-based and online.

Finally, you have had a positive year in 2022 due to the international recovery of the gaming market. Do you expect this to continue in 2023?

Every year, we evaluate our gaming portfolio and reinvest 11% or 12% of revenue in product development. The reality of this business is that it’s necessary to continue to invest in our people, in innovation, and game development. Every day we think about how to continue to be the partner of choice for our customers and bring new gaming experiences to their floors.

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