G3 Interview NOVOMATIC GROUP OF COMPANIES
the effects of M&A activity and consolidation in the telecoms business and seen just how many of those businesses went on to be successful in the future. It’s certainly something to watch very carefully.”
“Our feedback from the market is that customers are looking for alternatives,” adds Mr. Graf. “Many are looking at the changes from a security perspective, as some of the newly formed groups are carrying significant debt and will need to service that debt for the foreseeable future. It’s an important consideration, especially when strategic views for most of those businesses are measured in the very short-term. When your goals are determined by the needs to service huge debt it changes your objectives too.”
Novomatic, for all its colossal size and scale, is a family- owned business. The company has 23,000 employees, but a single shareholder. It’s for this reason that Novomatic has a different perspective. “We are focused on long-term results,” qualifies Mr. Neumann. “We are not driven by short-term profitability, something that is very important as stability in the gaming industry is a fundamental requirement for our customers.”
As a gaming business, Novomatic has been a major player in the acquisitions and consolidations process
Harald Neumann, Novomatic CEO
“When you enter a major market as a newcomer you have to define where you’re going to achieve the greatest impact. You must also take account of local market legislation, where, for example, in most of the states in America a developer of machines can’t also be licensed as an operator. The reason this dual model is so successful elsewhere is that it provides important feedback as to the interests and habits of the players, which we incorporate in the development of new products. In the US, we have to take a different approach.”
taking place in the gaming industry, but where Novomatic differs is in the type of acquisitions made, and the fact that it’s always Novomatic making them. “When we acquire a business it’s either to invest in a local producer and benefit from their market knowledge; or we buy into an international business with synergistic technologies that broaden our portfolio,” underlines Mr. Graf. “It’s the secret of our success in markets such as Germany, where we acquired businesses that provided both local and global expertise to the Novomatic Group.”
“We have also helped those local businesses to survive,” adds Mr. Neumann. “Small businesses very often simply cannot afford the requirements that today’s industry demands in terms of R&D. Novomatic has over 1,000 software developers working for the company, which have helped each of those businesses to remain at the forefront of product development, while keeping their local market connections.”
INTERACTIVE BY DESIGN
It was indicative of the broad reach of Novomatic’s business that the biggest announcements at the G2E show in Las Vegas centred not upon the Group’s land- based business, but its interactive division. Greentube, a developer of Internet, mobile, PC and iTV content for
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