Royal Reels Case Analysis

                       Danielle Erskine: Marketing Metrics-Case Analysis – April 26, 2016

Royal Reels: Enhancing the Customer Experience for Slot Machines and Beyond

1. What was the goal that Martin Gedman was trying to achieve in acquiring Digital Design Systems (DDS)?

By acquiring Digital Design Systems, Martin Gedman was trying to achieve a twofold goal. The first goal Gedman hoped to achieve with the acquisition was to gain a competitive advantage over not only Generation Games but other market leaders in the gaming industry as well.  He felt by understanding the customer experience, he could develop a customer-focused strategy of developing innovations that would help Royal Reels beat its competition (Reels pg. 6). To do this, he mainly focused on the customer experience of playing slot machines and providing the best experiences. Although Gedman realized he could develop a customer-focused strategy, delivering options and creating surprise without video technology was nearly impossible (Reels pg.6).

Secondly, Royal Reels simply did not have experience in developing these advanced technology based slots machines, but Digital Design did. The speed to market he would achieve through the acquisition of an established company was paramount because he knew it would take too long for Royal Reels to develop the technology in house.

1. Does it appear that Royal Reels achieved that goal, or is on its way to achieving that goal?

Three Digital Designed video-reel games launched in late 2005. Within the first full year of selling these slots, the sales of Royal Reels machines grew 12 percent, nearly four times the growth rate of any of the previous ten years. (Reels pg. 7). Based on these figures, it would appear that Royal Reels was well on its way to achieving its goal. However, the new legislation and smoking ban implemented in 2007 by the British government prevented Royal Reels reduced momentum with its new machines. Despite the world financial crisis that followed in 2008, demand for slot machines increased, prompting more establishments to lease them and a 10% increase in leased machines for Royal between 2008 and 2011 (Reels pg. 8). By 2011, Royal Reels was among 3 companies that generated 72 percent of the gaming industry revenues, proving that despite some setbacks, they were on the way to achieving their goals (Reels pg. 8).