New heights for Merkur

There has been a shift in recent times which has seen management and executive level recruitment from outside the casino industry. It makes a lot of sense – coming industries with complementary or desirable facets means fresh ideas and a new perspective. Ralf Markmann, Merkur Gaming’s new Managing Director, came into the industry via Siemens, initially working as an advisor to Paul Gauselmann on the slot business outside of its domestic market, Germany. Casino International: How did you get the MD position after such a short time in gaming? Ralf Markmann: When I met Paul [Gauselmann] in August 2013 he was looking for someone who not necessarily came from the gaming industry, but somebody who knows international business. He got my CV, we had a short discussion, perhaps 15 minutes, then we agreed – I would start to have a look into his business and advise him where required on how to progress and what is necessary and how a systematic structured market research and rollout process for products in new markets should look in this industry. So that’s what I did. At the end, maybe nine months later, he asked if I wanted to carry on giving him advice or if I wanted to start putting my advice and proposals into operation – to just do it. I told him, I have been in operational business my whole life in other industries and yes, I would like to do that and show him and the company that in the short term, 12-24 months, we would see similar success to what the company has achieved in Germany in the last 50 years. Not in terms of revenue, that’s impossible – but to make progress in the sense of, how can we focus on markets where we see success in the future? It doesn’t make sense to go to markets with trial and error, sending machines and seeing what happens then deciding what to do. CI: How did you go about starting this change? RM: The first thing I said was we had to focus: every organisation has limited resources and with these resources, you have to get the best out of them. When I analysed the company, I found we were in markets where we shouldn’t actually be because they are too small, too complicated, overly regulated and more. 2014 could be a good year for consolidation, to strengthen in the markets where we want to be successful in the future. That’s besides Europe, it’s Latin America (Peru, Colombia, Mexico) which is growing for us, especially Mexico. North America is still complicated, though we are active there in a special part of the market. I’m very optimistic we will be making an entry into certain fields of that market very soon. And Africa; we have a joint venture in South Africa, with a branch there, and we are at the end of a test phase for a product in the street market there, it’s a big market. We are also testing machines with all three big players in the casino market there, and they are responding very positively. They like the slant top, and the games are performing. There are two main sales channels in South Africa, it is dominated by two companies and we have a joint venture with Grand Parade Investments [GPI] there. We are also in the process of signing contracts with the other major player in the territory too. From there we will try to work with our partners into countries outside South Africa. Many of these countries are mineral rich and that brings a level of infrastructure investment and a rise in the middle class, so gaming would be a good fit and will emerge and possibly follow the South Africa model, as that is a mature market. CI: Is it difficult to come from another industry into one as fast-moving as gaming? RM: If you enter an industry like gaming from another industry, like telecommunications for example, you are coming from an industry where you know what the customer wants and there are clear channels to sell, everything is quite clear and defined. In gaming you have an anonymous market: I don’t know – and I would love to know – why the guy in an arcade or a casino sits in front of our machine or any machine over any other. He doesn’t tell us. We don’t know why people like or dislike the games, none of the manufacturers know this. I want somebody to stay a decent time on our machine. With this in mind we are doing some interesting work: whenever I go to visit our people, I enter the arcade and look around, and see the machines; what I think is important regardless of the game mechanics is that you need an eye-catcher, you need the machine to appeal to the player coming in. Unless that player has been playing your machines for 15 years, you have to draw them in. The street market is different from casinos, of course. Many people are saying the hardware is not a decisive factor but I believe it is – you need an attractive machine with good animation, good sound, and you need a good attractive game. CI: So how are you going about capturing those players? RM: We are working intensively on two things: we are developing further our hardware. We have machines in the pipeline which we will bring out in 2015. Secondly, we need to optimise our games. That means you cannot expect a Latin American player to have the same playing mentality as a German. We cannot export from Europe and expect those games to have the same success in other continents, so we are adjusting the games to different mentalities. With this in mind, I have hired game scouts, people who just go to casinos ands ask the players what they like, who observe how people play. This feedback helps us adjust the content to these different mentalities. The average age of players in casinos is very high. The players are very conservative, generally; it makes sense to think about bringing fresh young ideas and adapting games with them. Just a couple of ideas – not change things entirely, just bring some interesting new features to attract players between 18 and 25. We don’t see these players in our arcades and casinos, why is this? We know they like to play. New, innovative, adjusted content for this targeted group, under 25 or 30 years, is something we are very interested in. These are just a few of the positive things we are working on as a company.