UP FRONT
The Rape of an Industry
For the first time in the history of the State of
the Industry report, we are not pleased to present
the results of the survey. This year's findings are
disappointing to say the least. With a few small
e xceptions, it was a very bad year all the way
around. For the operators it was a bad year, for the
distributors it was even worse, but for the video
game manufacturers it was devastating.
Operators will smile and think thoughts of
poetic justice after hearing that it was a disastrous
year for video game manufacturers . But the sad fact
of the matter is that it is some video game manu-
facturers who are doing all the smiling. And why
would some manufacturers be smiling at their own
demise? The answer is simple but also scary.
Some of the video game manufacturers are
licking their chops at the prospect of becoming the
nation's largest provider of video lottery games.
And a number of things had to be done in order to
accomplish this goal in the shortest amount of time.
Their main objective was to eliminate competition
at all levels of the industry so they could create a
path of least resistance to the legalization of video
lotteries.
To remain financially sound during this
transition, those video game manufacturers with
gambling interests took the millions of dollars made
during the video boom and invested them into non-
industry related enterprises such as gambling
casinos, health spas, and the like .
The next step was to eliminate all forms of
competition and potential resistance and opposi-
tion to the video lottery movement.
Although video lottery games will not be
operated or sold by today's operators and distribu-
tors , these businessmen can and will strongly
oppose and resist the video lottery movement.
Hence , the number of video game operators and
distributors had to be reduced in order to create
less resistance to the rise of video lottery games.
The best and easiest way of doing that, the
manufacturers reasoned, was to depress the video
game market entirely. Since these video game
manufacturers were no longer dependent on video
game revenues, they were in a position to sit back
comfortably and watch the video game market go
on the skids. They concluded that with a vast
number of operators and distributors heavily
dependent on video game revenues, a sour video
game market would result in hordes of operators
going out of business.
Hence, they made certain that they, and any of
their competitors they could persuade, would
manufacture nothing but inferior video games that
would cost too much and earn too little for only but
a few to survive. The tactic served two useful
purposes . Not only did it drastically reduce the
operator population, but it also reduced the
number of video game manufacturers (future video
lottery competition) due to poor sales and no
outside sources of revenue to fall back on.
To further erode the video game market and
clear the path for video lottery games, they
encouraged the spread of "gray area" games. This
also served a twofold purpose. Not only did it
reduce the operator population as a result of
seizures, confiscations, arrests, and convictions,
but gray area games also set the stage and opened
the doors for video lottery games.
After reading our State of the Industry report,
you will see why the video game manufacturers with
gambling interests are smiling. Their plan is working
and the industry is suffering indeed. But, thank
God, there is some hope. There are a number of
amusement only video game manufacturers who
are not blinded by visions of video lottery riches and
who still have faith in the future of this industry.
Those who read the pages of Play Meter know who
they are. For their sake, and for the sake of the
industry's future, let's hope that they now know
how this industry is being raped and what can be
done to stop it.
Ralph C. Lally II
Publisher and Editor