Just the Ticket No End in Sight for Redemption’S Rise

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THE SPECIALIST GAMES AND GAMING BUSINESS MAGAZINE JULY 2013 Vol19 Issue11

Just the ticket No end in sight for redemption’s rise

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#*/(0t4065)".&3*$"t/&8130%6$54 Contents Editor’s Letter Simon Liddle - Editor JULY 2013 Full circle

07 30 FEW market segments inspire quite as Breaking news: Show calendar: much enthusiasm among members of the Ashdown takes on new LAI role, Amaya in $25m SALEX 2013, Brazil. pay-to-play amusement industry as loƩ ery move and Australian &E operator seƩ les redempƟ on͘ Yuite simply͕ it is one of its trademark dispute. 34 COVER STORY greatest success stories͘ Just the ticket: Speaking with both manufacturers and 09 Eǆploring the ever-eǆpanding world operators in preparaƟ on for InterGame’s annual In numbers: of redempƟ on. RedempƟ on Report for this month͛s issue Timeone͛s Į rst-quarter results. (p.34), one of the most striking points made by 48 many was that while redempƟ on has grown to 10 Lucky for some? arguably take the lion͛s share of the game Ň oor, Business news: Is land-based bingo sƟ ll a viable business͍ video, by contrast, has declined signiĮ cantly. Gauselmann and IKA sign at deal, Adrenaline thy video has suī ered is a compleǆ issue and acquires Sarbakan and ell-&ruit celebrates 50th 52 does not, it seems, have a great deal to do with anniversary. Latin beat: redempƟ on itself. The laƩ er has Į lled the gap onsidering the importance of the South created by the shrinking video market. Now, 16 American market. that isn͛t to say that there aren͛t terriĮ c video Middle East News: products out there – new, immersive gaming Landmark set to launch new &Es,

Visit us online at INTERNATIONAL Middle East CONTRIBUTORS Tani ,anna www.intergameonline.com Australia New Zealand iNTERGAME LTD - Now on Malcolm Steinberg Gary Walker Facebook, Twitter and YouTube India South-east Asia Wramod

TAsian amusement sector T‘Asia show ‘needs stability’

‘fast growing’ THE Asian AƩ racƟ ons Expo, held last month in ASIA is a “fast developing” Singapore, would beneĮ t amusement market, from staying in one claimed Andrea Bisi, locaƟ on each year, it has sales director at Embed been claimed͘ InternaƟ onal͘ Steven Tan of UNIS Embed was on hand told InterGame that to promote its systems although important, the technologies at the IAAPA-organised event has Asia AƩ racƟ ons Eǆpo in “lost some momentum” Singapore in June and Bisi when compared with the Steven Tan (leŌ ) and Simon >au suggested that the show Embed’s Andrea Bisi (right) local shows in China. had improved upon the and Pravin Bhagwat “The primary diī erence of this show compared with other internaƟ onal previous year when it was held in Hong Kong. There were a high number of shows is that it is hosted in diī erent countries,” he said. “Last year Hong eǆhibitors and the company enũoyed good meeƟ ngs with important clients Kong was successful and it was fairly busy this year in Singapore, both and contacts, he said. decent locaƟ ons to hold the show, and Beiũing in 201ϰ sounds promising “There is no doubt that Asia is fast developing in the amusement market, also. I understand why IAAPA moves the show around but stability of with parks and FECs under development,” Bisi told InterGame. “I feel locaƟ on would be more conducive I feel, as some years, such as when countries like Malaysia, Indonesia and India were well represented with a hosted in Thailand, it was not well aƩ ended.” good number of proũects.” UNIS showcased its current bestsellers at the show, which took place Arguably the market with the biggest potenƟ al, China, is hampered by at the Marina Bay Sands hotel. Alongside these was a new product called confusion over its laws and regulaƟ ons governing the sector. This is “limiƟ ng Jumping Fun, presently only on release in China and south-east Asia. the opƟ ons for operators,” said Bisi. RestricƟ ons on gaming and gambling in “te have been selling to Asia, primarily south-east Asia, for a long Ɵ me,” the region could potenƟ ally beneĮ t the FEC industry, however. conƟ nued Tan. “Kur distribuƟ on is well established there. The Philippines, “All in all, for me was a good and interesƟ ng show,” he concluded. Indonesia and Malaysia are core markets for UNIS Games and there are some noƟ ceably growing markets, such as sietnam, as well.” The company is planning to eǆhibit at the eǆpo when it moves to the China NaƟ onal ConvenƟ on Center in Beiũing neǆt year on June 1ϴ-20 and Tan TSacoa eyes potential in Asia is conĮ dent that the show will once again aƩ ract signiĮ cant visitors. “I believe IAAPA Asia will do well in Beiũing and that the number of visitors SACOA’S SebasƟ an SebasƟ an Mochkovsky to the show will increase in further years.” Mochkovsky reported In May, UNIS’ equipment was on show at the Chuck E. Cheese’s franchise idenƟ fying “huge conference in the US. The event saw all the franchise owners meet to potenƟ al” in the Asian eǆchange ideas and view the latest equipment from a host of suppliers. market while at the UNIS said it was proud to be one of the company’s game machine suppliers. Asia AƩ racƟ ons Expo in Singapore last month͘ Sacoa presented its Color Shot HD readers at the event, along with TQubica growing despite its online party booking and online sales modules, space restrictions and the rest of its soŌ ware porƞ olio. Mochkovsky praised the organisaƟ on of the show and noted that visitors from Australia, India, Malaysia and THE combinaƟ on of Singapore were aƩ endance. bowling and other family “The porƟ on of the market we focus on was not massive at this show, but entertainment centre we had some very good leads visit the booth with huge potenƟ al opƟ ons in aƩ racƟ ons is becoming the near future,” he said. “more and more The company’s HD readers “were the hit again,” he said, adding that the common” throughout maũor operators the company met with focused on its high-end opƟ ons, Asia, QubicaAMF’s Gian which suggests that the market oī ers “beƩ er potenƟ al” in terms of Avraam told InterGame͘ spending than some other regions in the world. “The countries in that part of the world are leading that change – Galvin Wong of ABS Bowling introducing bowling as INTERCARD’S Alberto part of mulƟ -aƩ racƟ on locaƟ ons,” he said. Borrero described the QubicaAMF eǆhibited at the Asia AƩ racƟ ons Eǆpo in Singapore last Asia AƩ racƟ ons Expo month, presenƟ ng a number of its latest innovaƟ ons. in Singapore as “very Although it is a strong market for the company, the current obstacle to posiƟ ve͘” He reported growth in the region is the relaƟ vely small siǌe of locaƟ ons there, Avraam that there were plenty said. “te partner with Timeone in the region but we can only Į t bowling of potenƟ al buyers into a few of their 200-plus locaƟ ons,” he said. “However, there are a in aƩ endance͘ number of new FECs opening and bowling is very much part of those.” “It was a well Singapore, Malaysia, Indonesia, Hong Kong, Macau and the Philippines organised show, a nice are all important markets for Qubica. In Thailand, however, bowling is being venue and deĮ nitely the pulled out of locaƟ ons, although India – which conƟ nues to eǆplore the FEC place to be at,” he said. concept – is introducing bowling into its centres there. Kverall, Avraam said, Asia is a growing market for the company.

22 JULY 2013 iNTERGAME www.intergameonline.com FEATURE

Just the ticket Simon Liddle explores the ever-expanding world of redemption

HE top earning machines in family entertainment This sense of providing entertainment to the broadest possible audience centres and game rooms are typically Ɵ cŬet redempƟ on is key to the success of redempƟ on and the way the games are typically now and priǌe merchandisers͘ dhe laƩ er is presently the the main revenue generators in family entertainment centres and arcades. subject of much debate in the US, largely due to the high “Families need an escape and family entertainment centres give them retail ǀalue of the priǌes on oī er͘ dicŬet redempƟ on, that,” said ,olly Deidl of Bay Tek 'ames, the company behind the Big Bass hoǁeǀer, is ǁidely regarded as the Ŭey driǀer ǁithin theel redempƟ on game. “ step out of reality to spend Ɵ me together for the industry and in the majority of territories has not a couple of hours and enjoy one another, puƫ ng the laptop, tablets and aTƩ racted any negaƟ ǀe publicity͘ smartphones down in turn for some family-friendly compeƟ Ɵ on, fun and For the amusement sector, it is a key driver – a great deal of investment memories that will last. s our digital and compeƟ Ɵ ve worlds conƟ nue to goes into developing new redempƟ on Ɵ tles and this investment is oŌ en grow, so will the need for great Fs to take the ever needed break.” rewarded with thousands of machines sold into locaƟ ons around the world ccording to JusƟ n Burke of ^ega, the redempƟ on sector is showing each year. There is some debate over whether redempƟ on has in some way growth year on year. “ach year it’s becoming a more and more important contributed to a decline in popularity of video games, which typically take part of the business,” he said, noƟ ng that there is something intrinsically up less of the gaming Ň oor that they once dominated, though it would seem familiar about the style of game play that appeals to all ages. less of factor than, say, home consoles. Instead, the explosion in popularity Way-to-play amusement markets around the world that were once of redempƟ on has come along at a Ɵ me when amusement operators were dominated by video games are now leaning more towards redempƟ on. looking for ͚the next big thing.’ It has revitalised many tradiƟ onal operaƟ ons, This is the industry’s main area of growth and, as other, less established helped others make the move from adult gaming to family entertainment, redempƟ on markets emerge, this momentum looks likely to conƟ nue. and generally given the industry a much-needed injecƟ on of opƟ mism. “learly you’ve got tradiƟ onal mature markets for redempƟ on games “ZedempƟ on aƩ racts a parƟ cularly wide audience because it is very – U^, obviously, the Diddle ast and Zussia. They would probably be key family-orientated,” said John Brennan of Bandai Namco, which is currently areas,” said ^teve Bryant of >I 'ames, the company responsible for games enjoying parƟ cular success with its Triple Turn and Wac-Dan Ticket Dania such as ^peed of >ight. “Up and coming locaƟ ons that are geƫ ng more into redempƟ on products. “veryone in the family, from grandparents down to it would include the UK. You have stable markets where you get good sales toddlers can enjoy the games together.” every year and then new ones beginning to contribute as well.”

ϯϰ JU>Y ϮϬϭϯ iNTZ'D www.intergameonline.com

FEATURE

“There must be a proper mix of variety for the players. It must be clean and A return to traditional redemption easy to navigate for both the player and the worker, otherwise it can be labour intensive and leave consumers with a negaƟ ve experience. The goal THEƌĞĐĞŶƚĞīŽƌƚƐďǇƐƚĂƚĞůĂǁŵĂŬĞƌƐƚŽĂĚĚƌĞƐƐƚŚĞƌŝƐŝŶŐǀĂůƵĞƐŽĨ is to have them leave with a posiƟ ve priǌe redempƟ on experience so they ŵĞƌĐŚĂŶĚŝƐĞŽŶŽīĞƌŝŶƉƌŝǌĞŵĞƌĐŚĂŶĚŝƐĞƌƐĐŽƵůĚƐŝŐŶĂůĂƌĞƚƵƌŶƚŽ desire to come back sooner.” ƚƌĂĚŝƟŽŶĂůƌĞĚĞŵƉƟŽŶŐĂŵĞƐ͕ƐĂŝĚh^ͲďĂƐĞĚ&EŽƉĞƌĂƚŽƌDŝĐŚĂĞů “I believe,” said AMG’s owman, “that iniƟ ally the player will be aƩ racted 'ĞƚůĂŶŽĨŵƵƐĞŵĞŶƚŽŶƐƵůƚĂŶƚƐ͘ to the game play but they then need a moƟ vaƟ on to keep playing. If the RegulaƟ ons are being amended in a number of states to crack down priǌes on show are not aƩ racƟ ve to the customer then the will to keep on the value of priǌes, with some deeming merchandisers to fall within playing for Ɵ ckets is obviously somewhat lower. Also the operator has to a legal grey area closer to gambling than to pay-to-play amusements. make sure that payout percentages are set correctly and that priǌes are Given this new trend, Getlan said he anƟ cipated changes in the types of marked up fairly. There needs to be a balance between the operator making games FECs and arcades oī er to their players with “old, standard-style” money and the customer having a percepƟ on of value for money.” redempƟ on games coming back into prominence. Understanding how the presentaƟ on of priǌes inŇ uences game play is “I see a shiŌ back to that,” he said. “What has happened over the vital, said âƟ nder hutani of Andamiro. “The display of decent priǌes takes last few years is that high-value priǌes in merchandisers has received a big part of the credit for the success of a game. Also, the player must feel all the aƩ enƟ on in the industry and eƋuipment has been designed to like they can win. oth of these factors contribute to the success of a priǌe operate within that trend - that has really been the focus. redempƟ on game.” “We’re seeing - certainly in our country - a legislaƟ ve backlash with Namco’s rennan suggested that with experience of maintaining a priǌe several states reducing the value of priǌes that can come directly out counter, operators are now “less daunted” by the process than they perhaps of a machine. There are a number of bills in progress that would stop were a few years ago. people using high value priǌes, which could see people go back to Nevertheless, priǌe counters are now viewed as an essenƟ al part of the old-style of redempƟ on where people play games to win Ɵ ckets, the business. or electronic Ɵ ckets if you’re using a debit card system, to take to “It can deĮ nitely be labour intensive and operators are increasingly the priǌe counter, where you can sƟ ll win high-value priǌes. I believe treaƟ ng it as a retail business,” said urke. “It is therefore important to there will be a trend back to the original style of redempƟ on. For manage their margins, the priǌe mix and their target audience. Kperators me, in terms of redempƟ on, that is one of the most signiĮ cant things need to get it right. We’re learning in the U<, for example, and geƫ ng much that will inŇ uence the design of machines. The next round of shows, beƩ er at it.” indeed the next IAAWA show in Krlando, should have some signiĮ cantly âid Lipkin͗ “When discussing locaƟ ons it’s about the total customer diī erent machines.” experience. Today that is reŇ ected in many diī erent elements, of which The way the outcomes of games are determined could also come games are just one, albeit an important one. Certainly the consumer has under closer scruƟ ny, both from the authoriƟ es and increasingly expectaƟ ons that are being raised constantly.” tech-savvy players, suggested Getlan. This, he said, may prompt a What of the future of redempƟ on, then͍ Are we to see a blurring of the return to less technology-driven games to more mechanical ones. lines between machine categories͍ There is undoubtedly a move by some “As the audience gets more sophisƟ cated, we will see a reversion to manufacturers towards introducing video touchscreen presentaƟ on to great the mechanical form of redempƟ on and the reason for that is the new success. However, the majority of those InterGame spoke with argued that generaƟ on of people coming up was raised on iWads and laptops and this will become just one element in the mix. know what computers are capable of,” he said. “While the industry has “New technologies are growing but they sƟ ll remain in the shadow of previously been able to uƟ lise new technologies to control game play classic mechanical games,” said Wojciechowski. “As for future concepts, we and payout levels, this new generaƟ on of people understands how this believe games that allow online compeƟ Ɵ on with other players worldwide works. They know that you can do anything with a computer program will appear.” to manipulate the data and manipulate the input, which does not ecause of the way redempƟ on is generaƟ ng money for operators, it is a reŇ ect reality. You may be able to score the perfect score on a machine less priceͲsensiƟ ve market. Instead, buyers are seeking Ƌuality, innovaƟ ve but the computer will tell you otherwise if the computer wants to. But games that will oī er their customers something unobtainable at home. with mechanical games, you clearly know that the ball went through “I think it is an area that will increase as the demand becomes higher,” the hoop. said ryant. “Wrice is important but not criƟ cal, there is a higher demand for “My advice to the industry would be, in order to reaĸ rm conĮ dence manufacturers like us to produce beƩ er Ƌuality games with more innovaƟ on among consumers, go back to a situaƟ on where someone can involved. Kn pure redempƟ on we’ve seen some very good appͲstyle games clearly tell whether they have won or have not. The basic concept of and I suspect that will be a trend that we might see for the next few years redempƟ on is ͚pracƟ ce more, win more.’ The beƩ er I do the more or so. Ɵ ckets I get and the more priǌes I win.” “RedempƟ on by deĮ niƟ on, if you look at the core player base which is typically younger children to early teens, tended to be very acƟ vity based. I think we’re seeing a shiŌ away from that based upon kind of priǌes that not think that this will supersede the mechanical redempƟ on games that are on oī er. ut whether we are going to see an increase in video and players love.” touchscreen technologies remains to be seen. Every company has a speciĮ c A great deal of investment is being channeled into the design and skillset and it depends on whether they decide to invest in new areas.” producƟ on of redempƟ on Ɵ tles, as manufacturers seek to develop the ͚next As discussed earlier, videoͲredempƟ on is one potenƟ al avenue for big thing.’ future exploraƟ on. “The success we are currently enjoying in the redempƟ on sector is due “We are seeing the emergence of a new category Ͳ videoͲredempƟ on, or to the work we have put in as a group in developing new products and vidempƟ on, that has endless potenƟ al,” said êninsky. “Currently the price supporƟ ng them with excellent priǌes and peripherals,” said andai Namco’s tag of vidempƟ on games is higher than tradiƟ onal redempƟ on games and John rennan. “A special team of parƟ cularly experienced game designers this limits their market penetraƟ on.” at andai Namco was tasked with designing a new range of redempƟ on, âid Tan͗ “We anƟ cipate seeing much more touchscreen technology which would oī er something new and exciƟ ng. The ͚overͲϱ0s club’ as we in the marketplace. The tablets/mobile games hardware such as the dubbed them, travelled all over the world looking for inspiraƟ on and seeing iWad completely uƟ lises both this technology and new cuƫ ng edge how redempƟ on was operated before they developed the Wlay to Win developments. In the same way that the home console brought new range. This, combined with our addiƟ onal development teams within the technology to the amusement games business, we will learn and take on group, has proved to be phenomenally successful for us as a group, with board the developments used on the tablet/mobile games revoluƟ on.” many more games in the pipeline. In addiƟ on we have joined forces with “Video games have been in decline for the last six years or more and I other game design companies such as Raw Thrills, who worked with us on expect the percentage share in a FEC is to stay between 20 per cent and WacͲMan Ticket Mania, in order to create innovaƟ ve redempƟ on games and 30 per cent,” said âƟ nder hutani of Andamiro. “InteracƟ ve video arcade concepts to bring to market.” games like driving and shooƟ ng games are here to stay. I have come across Another redempƟ on subͲcategory is kiddie rides that oī er Ɵ ckets. some new touchscreen video Ɵ cket redempƟ on games and their acceptance “JNC âles has led the way with kiddie rides redempƟ on,” said John with the current players. I am sure the trend will conƟ nue to grow, but I do Jennings of JNC âles. “The hugely popular interacƟ ve kiddie rides are now

38 JULY 2013 iNTERGAME www.intergameonline.com FEATURE

ďĞŝŶŐŽīĞƌĞĚǁŝƚŚĂƟĐŬĞƚŽƉƟŽŶ͘dŚĞŬŝĚĚŝĞƌŝĚĞƐ͕ǁŚŝĐŚĂƉƉĞĂůƚŽĂǁŝĚĞ ĐŽŵƉůĞǆĞƐŚĂƐĚƌŝǀĞŶƚŚĞŐƌŽǁƚŚŽĨĨĂŵŝůǇĞŶƚĞƌƚĂŝŶŵĞŶƚƐĞĐƚŽƌƐĂŶĚ͕ ĂŐĞƌĂŶŐĞ͕ŶŽǁƉĂǇŽƵƚƟĐŬĞƚƐĚĞƉĞŶĚŝŶŐŽŶƚŚĞƐĐŽƌĞĂĐŚŝĞǀĞĚŝŶƚŚĞ ĐƌƵĐŝĂůůǇ͕ƌĞĚĞŵƉƟŽŶ͘ZƵƐƐŝĂŚĂƐĂŶĞƐƟŵĂƚĞĚϭ͕ϬϬϬ&ƐĂŶĚĂƌŽƵŶĚϱϬƉĞƌ ďĂƐŝĐ͕ŝŶƚĞƌĂĐƟǀĞŽŶͲƐĐƌĞĞŶŐĂŵĞ͘͟ ĐĞŶƚŽĨƚŚĞŵĂƌŬĞƚʹƉŽƐƐŝďůǇŵŽƌĞʹŝƐƌĞĚĞŵƉƟŽŶ͘ tŚĂƚŝƐĐůĞĂƌŝƐƚŚĂƚƌĞĚĞŵƉƟŽŶ͕ŝŶŝƚƐŵĂŶǇĨŽƌŵƐ͕ŝƐŚĞƌĞƚŽƐƚĂǇ͘/ƚƐ ͞/ŶŵǇŽƉŝŶŝŽŶŐƌŽǁƚŚŝŶƵƐĞŽĨƌĞĚĞŵƉƟŽŶŐĂŵĞƐŝƐĐŽŶƐŝƐƚĞŶƚ ŝŵƉŽƌƚĂŶĐĞŐƌŽǁƐĂƐŝƚĞǀŽůǀĞƐĂƐĂĐŽŶĐĞƉƚďƵƚƚŚĞƌĞĐŽƵůĚďĞĂĚĂŶŐĞƌ ƚŚƌŽƵŐŚŽƵƚƚŚĞǁŽƌůĚ͕͟ƐĂŝĚ^ĂƟŶĚĞƌŚƵƚĂŶŝŽĨŶĚĂŵŝƌŽ͘͞ZƵƐƐŝĂŵĂǇďĞ ƚŚĂƚŝƚƐŝŵƉŽƌƚĂŶĐĞŝƐŽǀĞƌƐƚĂƚĞĚ͘zĞƐ͕ŝƚŶŽǁŐĞŶĞƌĂƚĞƐĂƐŝŐŶŝĮĐĂŶƚ ĂƚƚŚĞƚŽƉŽĨƚŚĞůŝƐƚ͘͟ ƉƌŽƉŽƌƟŽŶŽĨŝŶĐŽŵĞĨŽƌŽƉĞƌĂƚŽƌƐ͕ďƵƚǁŽƵůĚŝƚǁŽƌŬŽŶŝƚƐŽǁŶ͍ dŚĞƟĐŬĞƚƌĞĚĞŵƉƟŽŶĐŽŶĐĞƉƚŝƐŶŽǁƚĂŬŝŶŐŚŽůĚŝŶƚŚĞh<͕ǁŚĞƌĞ&Ɛ͕ ͞ZĞĚĞŵƉƟŽŶĂƉƉĞĂůƐƚŽĂǁŝĚĞĂƵĚŝĞŶĐĞ͕ĨƌŽŵǇŽƵŶŐĐŚŝůĚƌĞŶƚŽƚŚĞŝƌ ĂƌĐĂĚĞƐĂŶĚďŽǁůŝŶŐĐĞŶƚƌĞƐŚĂǀĞďĞĞŶŽīĞƌŝŶŐƐƵĐŚŐĂŵĞƐĨŽƌĂŶƵŵďĞƌ ŐƌĂŶĚƉĂƌĞŶƚƐ͕͟ƐĂŝĚ^ĞŐĂ͛ƐƵƌŬĞ͘͞,ŽǁĞǀĞƌ͕ǇŽƵĐĂŶ͛ƚƐƵƌǀŝǀĞǁŝƚŚũƵƐƚŽŶĞ ŽĨǇĞĂƌƐ͘ ĐĂƚĞŐŽƌǇŽĨĂŵƵƐĞŵĞŶƚƐʹǇŽƵŶĞĞĚĂƐƚƌŽŶŐŵŝǆ͘͟ ͞ZĞĚĞŵƉƟŽŶĂƌĞĂƐŝŶĂƌĐĂĚĞƐŚĂǀĞŐƌŽǁŶĚƌĂŵĂƟĐĂůůǇŽǀĞƌƚŚĞůĂƐƚ ĮǀĞǇĞĂƌƐĂŶĚŝƚŝƐŶŽƚĂĐŽŝŶĐŝĚĞŶĐĞƚŚĂƚƚŚĞƚĂŬŝŶŐƐŽĨƚŚĞƐĞĂƌĐĂĚĞƐŚĂǀĞ US ŝŶĐƌĞĂƐĞĚĂƐĂƌĞƐƵůƚ͕͟ƐĂŝĚ:ŽŚŶ:ĞŶŶŝŶŐƐŽĨ:E^ĂůĞƐ͘͞ƐƚŚĞĂŵŽƵŶƚŽĨ THE h^ is ǁiĚelǇ ĐŽnsiĚereĚ tŽ ďe tŚe mŽst mĂture reĚempƟ Žn mĂrŬet in ŵŽŶĞǇƚŚĂƚǀŝĚĞŽƐŚĂǀĞƚĂŬĞŶŚĂƐĚƌŽƉƉĞĚ͕ŝƚŚĂƐƉƌŽǀĞĚŵŽƌĞƉƌŽĮƚĂďůĞ tŚe ǁŽrlĚ. hnliŬe͕ sĂǇ tŚe h<͕ ǁŚere lŽǁͲstĂŬes ŐĂminŐ is ĐŽmmŽnplĂĐe ƚŽƌĞĚƵĐĞƚŚĞŶƵŵďĞƌŽĨǀŝĚĞŽƐĂŶĚŚĂǀĞĂƌĞĚĞŵƉƟŽŶĂƌĞĂĂƐǁĞůů͘ in ĂrĐĂĚes͕ tŚe h^ ŚĂs trĂĚiƟ ŽnĂllǇ sepĂrĂteĚ its Ămusements ĨrŽm ZĞĚĞŵƉƟŽŶŽīĞƌƐƚŚĞƉůĂǇĞƌĂŶĞǆƉĞƌŝĞŶĐĞƚŚĂƚƚŚĞǇĐĂŶ͛ƚŐĞƚĂƚŚŽŵĞ ŐĂminŐ. ZeĚempƟ Žn mĂĐŚines ŚĂǀe ďeĐŽme Ă pŽpulĂr ĨeĂture ǁŝƚŚŐĂŵĞƐĐŽŶƐŽůĞƐŽƌŽŶƚŚĞŝƌŵŽďŝůĞƉŚŽŶĞƐ͕ĂƚƚŚĞƐĂŵĞƟŵĞĂƐ ŽĨ ĂrĐĂĚes͕ ĨĂmilǇ entertĂinment Đentres ĂnĚ ďŽǁlinŐ ĐŽmpleǆes͕ ǁŝŶŶŝŶŐƉƌŝǌĞƐƚŚĂƚƚŚĞǇĐĂŶƚĂŬĞĂǁĂǇǁŝƚŚƚŚĞŵ͘͟ prŽǀiĚinŐ mĂnǇ ŽppŽrtuniƟ es ĨŽr ďŽtŚ ŚŽme ŐrŽǁn ĂnĚ internĂƟ ŽnĂl ^ĞĂƐŝĚĞůŽĐĂƟŽŶƐ͕ƐĂŝĚD'>ĞŝƐƵƌĞ͛ƐĂǀŝĚŽǁŵĂŶ͕ŚĂǀĞďĞĞŶƚŚĞ equipment suppliers. 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ƚŚĞǁĂǇŽĨƉƌŝǌĞƐĨŽƌƚŚĞƉůĂǇŝŶŐŽĨƚŚĞŐĂŵĞ͘/ŐƵĞƐƐƚŚĞƐĞŽƉĞƌĂƚŽƌƐŶĞǀĞƌ ŐĂŵĞƐŝŶƚŽƚŚĞƐĂŵĞďƌĂĐŬĞƚĂƐƐůŽƚŵĂĐŚŝŶĞƐ͕ǁŚŝůĞƚŚĞŽƚŚĞƌŝƐƚŚĂƚƚŚĞ ŚĞĂƌĚƚŚĞƉŚƌĂƐĞ͚ǁŝŶŶĞƌƐŵĂŬĞƉůĂǇĞƌƐ͛͘ ůĞǀĞůŽĨƌĞǀĞŶƵĞŝƐŶŽƚŚŝŐŚĞŶŽƵŐŚƚŽĐŽŵƉĞŶƐĂƚĞĨŽƌƚŚĞŝŶǀĞƐƚŵĞŶƚ ͞hŶůĞƐƐƚŚĞƌĞĚĞŵƉƟŽŶŽƉĞƌĂƚŽƌŝƐǁŝůůŝŶŐƚŽŐŝǀĞďĂĐŬƚŽƚŚĞƉůĂǇĞƌĂ ǁŝƚŚŝŶĂƌĞĂƐŽŶĂďůĞƟŵĞ͘dŚŝƐŵĂǇƉƌĞǀĞŶƚůŽĐĂƟŽŶŽǁŶĞƌƐĨƌŽŵŝŶǀĞƐƟŶŐ ŵŝŶŝŵƵŵŽĨĂϮϬƉĞƌĐĞŶƚƌĞƚƵƌŶŽŶƚŚĞŝƌŝŶǀĞƐƚŵĞŶƚŝŶƚŽƚŚĞƌĞĚĞŵƉƟŽŶ ŝŶŶĞǁĞƋƵŝƉŵĞŶƚ͘͟ ŐĂŵĞ͕ƚŚĞŶǁĞǁŝůůĂůǁĂǇƐĨĂĐĞƚŚĞƉƌŽďůĞŵ͘͟ EĞǀĞƌƚŚĞůĞƐƐ͕tŽũĐŝĞĐŚŽǁƐŬŝŝƐĐŽŶĮĚĞŶƚƚŚĂƚƟĐŬĞƚƌĞĚĞŵƉƟŽŶŝƐ ĚŵŝƩĞĚůǇŝƚŝƐĂĮŶĞďĂůĂŶĐĞďƵƚ͕ƵŶůŝŬĞƉƌŝǌĞŵĞƌĐŚĂŶĚŝƐĞƌƐ͕ŵƵĐŚŽĨ ĞŶƚĞƌŝŶŐƚŚĞŵĂƌŬĞƚĂůŽŶŐƐŝĚĞĞǆŝƐƟŶŐĂƌĐĂĚĞŐĂŵĞƐ͘͞tĞǁŽƵůĚƐĂǇƚŚĂƚ ƚŚĞĂƉƉĞĂůŝƐŝŶƚŚĞŐĂŵĞƉůĂǇŝƚƐĞůĨĂŶĚƚŚĞƚŚƌŝůůŽĨĐŽůůĞĐƟŶŐƟĐŬĞƚƐ͘dŽ ƚŚŝƐƚƌĞŶĚǁŝůůƉƌĞǀĂŝůŝŶWŽůĂŶĚ͘͟ ƐŽŵĞƉůĂǇĞƌƐ͕ƚŚĞƉƌŝǌĞŝƐŝŶĐŝĚĞŶƚĂůƚŽƚŚĞĂĐƚƵĂůĞǆƉĞƌŝĞŶĐĞŽĨƉůĂǇŝŶŐ͘ /Ŷ/ƚĂůǇ͕ǁŚĞƌĞƚŚĞĂŵƵƐĞŵĞŶƚďƵƐŝŶĞƐƐŚĂƐƐĞĞŶŝŶǀĞƐƚŵĞŶƚĐŚĂŶŶĞůĞĚ ĂǁĂǇĨƌŽŵĨĂŵŝůǇĞŶƚĞƌƚĂŝŶŵĞŶƚƚŽƚŚĞŶĞǁǀŝĚĞŽůŽƩĞƌǇŵĂĐŚŝŶĞƐ͕ƐĞĂƐŝĚĞ Europe ĂƌĐĂĚĞƐĂƌĞƉĞƌĨŽƌŵŝŶŐƚŚĞďĞƐƚ͕ƐĂŝĚdŝǌŝĂŶŽdƌĞĚĞƐĞŽĨůŵĂĐ͘KƉĞƌĂƚŽƌƐ WEZHW^ EurŽpe͛s ďriŐŚtest Ămusement ŚŽtspŽt is ZussiĂ͕ ǁŚiĐŚ͕ ďeĨŽre ĂƌĞƐƵĐĐĞƐƐĨƵůůǇĐŽŵďŝŶŝŶŐƟĐŬĞƚƌĞĚĞŵƉƟŽŶĂůŽŶŐƐŝĚĞĐƌĂŶĞƐĂŶĚŽƚŚĞƌ ϮϬϬϵ͕ ǁĂs ĂrŐuĂďlǇ tŚe ĐŽnƟ nent͛s ďriŐŚtest ŐĂmďlinŐ ŚŽtspŽt. TŚe ďĂn ƉƌŝǌĞŵĂĐŚŝŶĞƐ͘,ŽǁĞǀĞƌ͕ŚĂǀŝŶŐĞŶũŽǇĞĚŐƌŽǁƚŚŝŶϮϬϭϬͲϭϭ͕ƚŚĞƐĞĐƚŽƌŚĂƐ Žn ĐĂsinŽs ĂnĚ tŚe rise ŽĨ tŚe Ămusement seĐtŽr Ăre nŽ ĐŽinĐiĚenĐe. ƐĞĞŶŝŶĐŽŵĞƐůŽǁĚŽǁŶĚƵĞƚŽƚŚĞŽŶŐŽŝŶŐƵƌŽƉĞĂŶĞĐŽŶŽŵŝĐĐƌŝƐŝƐĂŶĚ &ŽllŽǁinŐ tŚe ŝŬĞŽƚŚĞƌĞŵĞƌŐŝŶŐŵĂƌŬĞƚƐ͕ƚŚĞĐƌĞĂƟŽŶŽĨŶĞǁƌĞƚĂŝů /ƚĂůǇ͛ƐƐƚƌŝĐƚƌĞŐƵůĂƟŽŶƐƉƌŽŚŝďŝƚƐƚŚĞƵƐĞŽĨǀŝĚĞŽƚŽƵĐŚƐĐƌĞĞŶƐŽŶ

ϰϬ :h>zϮϬϭϯŝEdZ'D ǁǁǁ͘ŝŶƚĞƌŐĂŵĞŽŶůŝŶĞ͘ĐŽŵ FEATURE

amusement games, meaning operators there are unable to use the latest FECs, LiedtŬe suggests that for a locaƟ on to truly be successful it must be priǌe merĐhanĚisers͘ ĐĐorĚing to dreĚese, /talǇ͛s top perĨorming Ɵ ĐŬet only one part of the oī ering. ͞If you ũust put an arcade someǁhere ǁith reĚempƟ on games are ^lamͲͲtinner, ig ass theel anĚ Wig Kut͘ ũust redempƟ on games, you ǁill not succeed. It is, in my humble vieǁ, all about a balanced approach. You have to have a very, very good product $VLD3DFLÀF that has everything Ͳ a proper FEC ǁith rides, aƩ racƟ ons, play areas, video, THE ƐŝĂͲWĂĐŝĮ Đ ŵĂƌŬĞƚ ŝƐ ĚĞǀĞůŽƉŝŶŐ ŵƵĐŚ ŝŶ ƚŚĞ ƐĂŵĞ ǁĂǇ ƚŚĂƚ ŽƚŚĞƌƐ redempƟ on, novelty, Ŭiddie rides and other aƩ racƟ ons.͟ ĂƌĞ ĂƌŽƵŶĚ ƚŚĞ ǁŽƌůĚ͕ ŶĂŵĞůǇ ŶĞǁ &EƐ ĂŶĚ ĂƌĐĂĚĞƐ Ɵ ĞĚ ƚŽ ƌĞƚĂŝů The maũority of operators in the region are aǁare of this, he said, ůŽĐĂƟ ŽŶƐ͘ tŚŝůĞ ůŽĐĂƟ ŽŶƐ ŝŶ ƚŚŝƐ ƌĞŐŝŽŶ ŚĂǀĞ ƚǇƉŝĐĂůůǇ ďĞĞŶ ŚĞĂǀŝůǇ though some are focusing too much on one area in parƟ cular, though it ŝŶŇ ƵĞŶĐĞĚ ďǇ ƚŚĞ ĂƌĐĂĚĞ ǀŝĚĞŽ ŐĂŵĞ ĐƵůƚƵƌĞ ĐŽŵŝŶŐ ŽƵƚ ŽĨ :ĂƉĂŶ͕ ƚŚĞƌĞ ŝƐ isn͛t redempƟ on. Ă ĐůĞĂƌ ƉƵƐŚ ƚŽǁĂƌĚƐ ŵŽƌĞ ĨĂŵŝůǇͲŽƌŝĞŶƚĂƚĞĚ ůŽĐĂƟ ŽŶƐ ƚŚĂƚ Žī Ğƌ Ă ǀĂƌŝĞƚǇ ͞I observe that some operators are overdoing it ǁith novelty and ŽĨ ŐĂŵĞƐ ĂŶĚ ĞŶƚĞƌƚĂŝŶŵĞŶƚ ĐŽŶĐĞƉƚƐ͘ ZĞĚĞŵƉƟ ŽŶ ŝƐ ƉůĂǇŝŶŐ Ă ŵĂũŽƌ ƌŽůĞ merchandisers,͟ he said. ͞ecause it is Ƌuite alluring and, parƟ cularly in the ǁŝƚŚŝŶ ƚŚŝƐ ƚƌĞŶĚ͘ Diddle East, you Į nd yourself ǁith the ability to put highͲvalue items liŬe For TimeZone, part of the LAI Group and the largest operator of FECs branded ǁatches or iWads and iWhones into machines. ôme operators, in in the AsiaͲWaciĮ c region, redempƟ on noǁ accounts for betǁeen ϱϱ per my vieǁ, have totally overdone this. It is more about arcade retailing than it cent and ϲϬ per cent of its total revenues. This Į gure, said TimeZone group is about entertaining families ǁith children.͟ CEK ônaal Chopra, is up from ϱϬ per cent Į ve years ago and is conƟ nuing LiedtŬe is someǁhat sŬepƟ cal of the suggesƟ on that elements of video to rise. gaming ǁill increasingly become part of redempƟ on machines. thile some ͞In Indonesia, Whilippines and îngapore, Ɵ cŬet redempƟ on is currently have been brought to marŬet that maŬe use of video touchscreens, many of our groǁth hotspot,͟ he said. ͞It is outperforming video games and even the marŬet leaders do not. vending games by a large margin. YuicŬͲcycle redempƟ on games do have ͞The most successful redempƟ on game in the marŬet right noǁ is ig the edge.͟ ass theel and that has nothing to do ǁith a digital plaƞ orm or a video Chopra aƩ ributed the groǁth in popularity of redempƟ on to that fact interacƟ on ʹ it is pure manual labour, so to speaŬ, and physical interacƟ on,͟ that the act of ǁinning Ɵ cŬets cannot be replicated by handͲheld devices, he said. ͞In the Diddle East ǁe are very Ŭeen to demonstrate that ǁe so TimeZone gives its customers a ͞uniƋue experience diī erent from other use machines that people can use their sŬill level to inŇ uence the payout entertainment opƟ ons.͟ ,e anƟ cipates redempƟ on conƟ nuing to groǁ at its of Ɵ cŬets. then you have a lot of iWad or iWhone apps converted into current rate as the company invests in neǁ eƋuipment. redempƟ on games, you could argue that they are potenƟ ally Ƌuite high sŬill That͛s not to say that Ɵ cŬet redempƟ on is going to be the only games but in my vieǁ it is also dangerous because people play those games entertainment on oī er in TimeZone outlets. thile games such as ^lamͲ on their iWads or on their home computers all the Ɵ me. If you overdo it, ǁhy AͲtinner and ig ass theel are proving maũor draǁs, ͞highͲend͟ video ǁould they come to your store͍ I combine my hope ǁith my convicƟ on that games, such as arŬ Escape and TeŬŬen Tag Ϯ are ͞holding the fort.͟ Zides, tradiƟ onal redempƟ on games ǁill have an important role to play.͟ boǁling, bumper cars and soŌ play areas are also signiĮ cant elements in the As ǁith many other marŬets, the physical act of collecƟ ng Ɵ cŬets is a Ŭey mix. The common theme here, said Chopra, is providing an experience that feature that is popular ǁith players of all ages. EoƟ ng that some players players cannot get at home. in the Diddle East can be ͞impaƟ ent,͟ LiedtŬe explained that although ͞te sƟ ll believe that there is sƟ ll a place for straight video in our games such as eal Kr Eo eal, ǁhich can last several minutes, have been outlets to complete our product oī ering but their numbers and role in successful, players are oŌ en Ŭeen to play games ǁhere they are reǁarded our stores shall be signiĮ cantly diminished in light of current trends. sideo ƋuicŬly. For some machines, LandmarŬ has Į Ʃ ed as many as four Ɵ cŬet incorporated into redempƟ on machines does have potenƟ al and may be a dispensers to add to the enũoyment of ǁinning. ǁay for video to remain relevant in our outlets,͟ he said. ͞that I have observed is that the theatre of it is alǁays Ƌuite important. Kther concepts, rides, aƩ racƟ ons and ͞uniƋue͟ video games ǁill conƟ nue The pride and ͚shoǁing oī mentality͛ is Ƌuite high in this part of the ǁorld, to be an integral part of the mix in the marŬets in ǁhich the company so a machine that gives you relaƟ vely ƋuicŬ saƟ sfacƟ on but also a good operates, he added. payout and is visually stunning are the machines that in the Diddle East, The priǌes on oī er at the priǌe counter to redempƟ on players is a India and northern Africa ǁill alǁays be ǁinners in the future.͟ Ŭey ingredient in the success of these machines, Chopra said. Although oŌ en labour intensive, operaƟ ng a successful priǌe counter is ͞not overǁhelmingly so.͟ ͞te have a dedicated team assigned to ũust buying priǌes and each 7KHGHFOLQHRIYLGHRDQGWKHDUULYDO outlet has experienced staī that are very ǁell trained in presenƟ ng these priǌes from various suppliers and distribuƟ ng these to our outlets in a RIYLGHPSWLRQ Ɵ mely manner.͟ TimeZone is conƟ nuing to expand and plans to open neǁ stores

ϰϮ :hLY ϮϬϭϯ iETEZGADE ǁǁǁ.intergameonline.com MARKET REPORT

Latin beat With its economies showing signs of strength, South America is emerging as a key market for the future

By Simon Liddle

REATING South America as a ŝƐƐƚƌŽŶŐĂŶĚŵŽƐƚǀŝďƌĂŶƚ͕͟ƐĂŝĚƚŚĞĐŽŵƉĂŶǇ͛Ɛ ŵĞƌŝĐĂŶŵĂƌŬĞƚŚĂƐďĞĞŶŬĞĞƉŝŶŐƐƚĞĂĚǇ͕ǁŝƚŚ single, homogenous marketplace ^ƚĞǀĞŶdĂŶ͘͞ůƚŚŽƵŐŚƐŽŵĞĐŽƵŶƚƌŝĞƐŝŶ^ŽƵƚŚ ƐĞǀĞƌĂůůŽŶŐͲƟŵĞƉůĂǇĞƌƐŝŶĐŽƵŶƚƌŝĞƐƐƵĐŚĂƐ is Ň aǁeĚ, oĨ course͘ It is a ŵĞƌŝĐĂŚĂǀĞƚƌĂĚĞƐŚŽǁƐƚŚĂƚƉƌŽŵŽƚĞƚŚĞ ŽůŽŵďŝĂ͕ƌĂǌŝů͕ƌŐĞŶƟŶĂ͕ŚŝůĞ͕ĐƵĂĚŽƌĂŶĚ group oĨ Ěiǀerse anĚ ĚisƟ nctlǇ ĂŵƵƐĞŵĞŶƚŝŶĚƵƐƚƌǇƉƌŽĚƵĐƚƐ͕ƚŚŝƐƉĂƌƚŽĨƚŚĞ sĞŶĞǌƵĞůĂ͘>ĂƚĞůǇhƌƵŐƵĂǇĂŶĚŽůŝǀŝĂŚĂǀĞ separate countries that each ǁŽƌůĚƌĞƋƵŝƌĞƐŵƵĐŚĂƩĞŶƟŽŶĂŶĚĐŽŶƐƚĂŶƚ ĞŶƚĞƌĞĚŝŶƚŚĞŵĂƌŬĞƚ͘ haǀe their oǁn characterisƟ cs͘ ƚƌĂǀĞůƚŽĞŶƐƵƌĞƚŚĂƚŽƵƌŐĂŵĞƐƐƵƐƚĂŝŶĂ ͞dŚĞ^ŽƵƚŚŵĞƌŝĐĂŶŵĂƌŬĞƚƌĞůŝĞƐŚĞĂǀŝůǇ TThere are some common trenĚs emerging ƐƵĐĐĞƐƐĨƵůĂŶĚƐƚƌŽŶŐƉƌĞƐĞŶĐĞƚŚĞƌĞ͘ ŽŶĂŵƵƐĞŵĞŶƚƉĂƌŬͲƚǇƉĞƌŝĚĞƐĂŶĚŵŝĚǁĂǇ ǁithin the amusement sector, hoǁeǀer͘ South ͞sĞŶĞǌƵĞůĂŝƐĂŐƌĞĂƚĞǆĂŵƉůĞ͕ƚŚĞƌĞŝƐ ŐĂŵĞƐŝŶůĂƌŐĞůŽĐĂƟŽŶƐĂŶĚŝƐǀĞƌǇŝŶĐůŝŶĞĚƚŽ America has ďeen heralĚeĚ as one oĨ the neǆt ƚƌĞŵĞŶĚŽƵƐƉŽƚĞŶƟĂůƚŚĞƌĞďƵƚƚŚĞƉŽůŝƟĐĂů ƌĞĚĞŵƉƟŽŶŐĂŵĞƐŝŶƐŵĂůůĞƌ&Ɛ͘͟ great gaming markets, seconĚ onlǇ to Asia ĐůŝŵĂƚĞƌĞĂůůǇƐƵƉƉƌĞƐƐĞƐƚŚĞĞŶƟƌĞŝŶĚƵƐƚƌǇ͘/ƚ dŚŝƐ͕ŚĞƐĂŝĚ͕ŚŝŐŚůŝŐŚƚƐƚŚĞĚĞƐŝƌĞĂŵŽŶŐ perhaps in its groǁth in gamďling͘ >ike Europe, ŝƐĚŝĸĐƵůƚƚŽĐŽŶǀĞƌƚƚŚĞŝƌůŽĐĂůĐƵƌƌĞŶĐǇƚŽh^ ůŽĐĂůƉůĂǇĞƌƐƚŽŐĞƚƐŽŵĞƚŚŝŶŐŽƵƚŽĨƚŚĞŝƌ then, manǇ countries haǀe ďoth the gamďling ĚŽůůĂƌƐƚŽƉƌŽĐƵƌĞĞƋƵŝƉŵĞŶƚ͘ĞƌƚĂŝŶĐŽƵŶƚƌŝĞƐ ŐĂŵĞƐĞǆƉĞƌŝĞŶĐĞďĞǇŽŶĚƚŚĞĞŶƚĞƌƚĂŝŶŵĞŶƚ anĚ amusement market running in tanĚem͘ ŝŶ^ŽƵƚŚŵĞƌŝĐĂŶĂůƐŽŚĂǀĞ͚ďĂƌƌŝĞƌƐ͛ƐƵĐŚĂƐ ǀĂůƵĞŝƚƐĞůĨ͘͞dŚƵƐ͕ƚŚĞŝŵƉŽƌƚĂŶĐĞŽĨŵŝĚǁĂǇ Kthers, such as raǌil, haǀe moǀeĚ to make ŚŝŐŚŝŵƉŽƌƚĚƵƚǇŽƌĐŽŶƐƚĂŶƚĐŚĂŶŐĞƐŝŶƚŚĞŝƌ ĂŶĚƌĞĚĞŵƉƟŽŶŐĂŵĞƐŝŶƚŚŝƐŵĂƌŬĞƚ͕ĂƐǁĞůů gamďling illegal anĚ so it is home to arguaďlǇ ĐƵƐƚŽŵƐƉƌŽĐĞĚƵƌĞƐǁŚŝĐŚŵĞĂŶƐƚƌĂĚĞĐĂŶ ĂƐŚĂǀŝŶŐƐƉĞĐŝĂůŽīĞƌƐĂŶĚƉƌŽŵŽƟŽŶƐǁŚĞƌĞ the conƟ nent͛s ďest knoǁn amusement eǆpo, ďĞĚŝĸĐƵůƚ͘ƌĂǌŝůŝƐĂŵĂƌŬĞƚƚŚĂƚĐŽŶƐƚĂŶƚůǇ ĐƵƐƚŽŵĞƌƐĨĞĞůƚŚĞǇŐĞƚƚŚĞďĞƐƚǀĂůƵĞƉŽƐƐŝďůĞ SA>Ey͘ There is unĚouďteĚlǇ a huge amount oĨ ĐŚĂŶŐĞƐŝŶƚĞƌŵƐŽĨƚŚĞŝƌŝŵƉŽƌƚƉŽůŝĐŝĞƐ͘ ĂŶĚƚĂŬĞĂĚǀĂŶƚĂŐĞŽĨǁŚĂƚĂĐŽŵƉĂŶǇŚĂƐ potenƟ al Ĩor the paǇͲtoͲplaǇ amusement market ͞WĞƌƵ͕ŽůŽŵďŝĂ͕ŚŝůĞĂŶĚƌĂǌŝůĂƌĞƚŚĞ ƚŽŽīĞƌ͘͟ to groǁ signiĮ cantlǇ across South America, ďĞƩĞƌƉĞƌĨŽƌŵŝŶŐŵĂƌŬĞƚƐŝŶ^ŽƵƚŚŵĞƌŝĐĂ͘ ͞^ŽƵƚŚŵĞƌŝĐĂŚĂƐƚƌĂŶƐĨŽƌŵĞĚŝƚƐĞůĨ parƟ cularlǇ as its economies strengthen ƌŐĞŶƟŶĂǁĂƐǀĞƌǇŐŽŽĚƵŶƟůƌĞĐĞŶƚůǇǁŚĞŶ ŽǀĞƌƚŚĞůĂƐƚĚĞĐĂĚĞŝŶƚŽĂŐůŽďĂůĞĐŽŶŽŵŝĐ anĚ improǀe͘ ƚŚĞƌĞǁĂƐĂĐŚĂŶŐĞŝŶůĂǁƐǁŚŝĐŚŚĂƐŶŽǁ ƉŽǁĞƌŚŽƵƐĞ͕͟ĞŶŝƐĞ&ĂďƌŝǌŝŽĨĨĞůůŽǁ ͞ƌĂǌŝůĚĞĮŶŝƚĞůǇŚĂƐƚŚĞďĞƐƚĞĐŽŶŽŵǇŝŶ ƐƵƉƉƌĞƐƐĞĚƚŚĞŵĂƌŬĞƚ͘͟ ƌŐĞŶƟŶĂͲďĂƐĞĚĐŽŵƉĂŶǇŽŝŶdĞĐŚƐĂŝĚ͘ ^ŽƵƚŚŵĞƌŝĐĂĂŶĚůŝŬĞůǇǁŝůůĨŽƌŵĂŶǇǇĞĂƌƐƚŽ ůĞĂƌůǇŝŶǀĞƐƚŵĞŶƚŝƐďĞŝŶŐŵĂĚĞŝŶŶĞǁ ͞ƵƌŝŶŐƚŚĂƚƉĞƌŝŽĚ͕ĐŽƵŶƚƌŝĞƐůŝŬĞƌĂǌŝů͕DĞǆŝĐŽ͕ ĐŽŵĞ͕͟ƐĂŝĚ>ŝŶŬWĞŶĚůĞǇŽĨƉŽŽů͕ĨŽŽƐďĂůůĂŶĚ ĞƋƵŝƉŵĞŶƚ͕ǁŚŝĐŚŝƐŝŶĐƌĞĂƐŝŶŐůǇďĞŝŶŐƉůĂĐĞĚ sĞŶĞǌƵĞůĂ͕WĞƌƵ͕ŚŝůĞĂŶĚƌŐĞŶƟŶĂŚĂǀĞ ĂŝƌŚŽĐŬĞǇƐƉĞĐŝĂůŝƐƚsĂůůĞǇǇŶĂŵŽ͘͞ƵƐŝŶĞƐƐŝƐ ŝŶĞǀĞƌͲŵŽƌĞƐŽƉŚŝƐƟĐĂƚĞĚůŽĐĂƟŽŶƐ͕ƐƵĐŚĂƐ ďĞĐŽŵĞƐŽŵĞŽĨƚŚĞƐƚƌŽŶŐĞƐƚŐƌŽǁŝŶŐƌĞŐŝŽŶƐŝŶ ĂůƐŽďƌŝƐŬŝŶŽůŽŵďŝĂ͕ŚŝůĞ͕WĞƌƵĂŶĚhƌƵŐƵĂǇ͘ ĚĞĚŝĐĂƚĞĚĨĂŵŝůǇĞŶƚĞƌƚĂŝŶŵĞŶƚĐĞŶƚƌĞƐĂŶĚ ƚŚĞĞŶƚĞƌƚĂŝŶŵĞŶƚďƵƐŝŶĞƐƐ͘͟ dŚĞƐĞĐŽƵŶƚƌŝĞƐĂƌĞĂůůƉŽŝƐĞĚĨŽƌƌĂƉŝĚŐƌŽǁƚŚ ďŽǁůŝŶŐĐŽŵƉůĞǆĞƐ͘>ƵŝƐ:ĂǀŝĞƌ/ƐĞƌƚĞ͕ŐĞŶĞƌĂů ŽŝŶdĞĐŚ͛ƐĐĂƌĚͲďĂƐĞĚƐǇƐƚĞŵ͕'ĂŵĞ ĂƐƚŚĞŽǀĞƌĂůů>ĂƟŶĞĐŽŶŽŵǇŝŵƉƌŽǀĞƐ͘ĞŶƚƌĂů ŵĂŶĂŐĞƌŽĨYƵďŝĐĂD&>ĂƟŶŵĞƌŝĐĂ͕ƐĂŝĚ ^ǇƐƚĞŵ͕ŚĂƐĂůƐŽĨŽƵŶĚƚƌĞŵĞŶĚŽƵƐƐƵĐĐĞƐƐ ŵĞƌŝĐĂĂůƐŽĐĂŶŶŽƚďĞŝŐŶŽƌĞĚǁŝƚŚŚŽƚƐƉŽƚƐŝŶ ƚŚĂƚĂƐƚŚĞ^ŽƵƚŚŵĞƌŝĐĂŶĞĐŽŶŽŵǇĚĞǀĞůŽƉƐ͕ ŝŶƚĞƌŶĂƟŽŶĂůůǇ͕ďĞŐŝŶŶŝŶŐǁŝƚŚŶĞŝŐŚďŽƵƌŝŶŐ ŽƐƚĂZŝĐĂ͕WĂŶĂŵĂ͕EŝĐĂƌĂŐƵĂĂŶĚů^ĂůǀĂĚŽƌ͘͟ ŝƚŝƐĂƩƌĂĐƟŶŐŝŵƉŽƌƚĂŶƚŝŶǀĞƐƚŵĞŶƚƚŽƚŚĞ ŵĂƌŬĞƚƐŝŶ>ĂƟŶŵĞƌŝĐĂ͘&ĂďƌŝǌŝĂƩƌŝďƵƚĞĚƚŚŝƐ /ƚŝƐĚŝĸĐƵůƚƚŽŬŶŽǁũƵƐƚŚŽǁďŝŐƚŚĞŵĂƌŬĞƚ ůĞŝƐƵƌĞƐĞĐƚŽƌ͘ ƚŽƚŚĞŐƌŽǁŝŶŐŶĞĞĚĂŵŽŶŐŽƉĞƌĂƚŽƌƐĨŽƌƚŚĞ ŝƐĂĐƌŽƐƐ^ŽƵƚŚŵĞƌŝĐĂ͕ŐŝǀĞŶŝƚƐƐŝǌĞĂŶĚ͕ĂƐ ͞dŚĞĞŶƚĞƌƚĂŝŶŵĞŶƚƐĞĐƚŽƌŝƐŐƌŽǁŝŶŐ͕͟ŚĞ ǀĞƌǇůĂƚĞƐƚŝŶŶŽǀĂƟŽŶƐ͘ WĞŶĚůĞǇĞǆƉůĂŝŶĞĚ͕ƚŚĞĂǀĂŝůĂďŝůŝƚǇŽĨƌĞůĂƟǀĞůǇ ƐĂŝĚ͘͞tĞŚĂǀĞƐĞĞŶĂůŽƚŽĨŶĞǁĐĞŶƚƌĞƐĂŶĚ ͞KŶĞŽĨƚŚĞƌĞĂƐŽŶƐĨŽƌƚŚŝƐĞǆƚƌĂŽƌĚŝŶĂƌǇ ŝŶĞǆƉĞŶƐŝǀĞĞƋƵŝƉŵĞŶƚĨƌŽŵƐŝĂ͘ ĐŽŵŵĞƌĐŝĂůŵĂůůƐďĞŝŶŐďƵŝůƚ͕ǁŚŝĐŚŝŶĐƌĞĂƐĞƐ ĞĐŽŶŽŵŝĐďŽŽŵŝƐƚŚĞĨĂĐƚƚŚĂƚŽƉĞƌĂƚŽƌƐĂƌĞ ͞/ƚŝƐǀĞƌǇĚŝĸĐƵůƚƚŽĞƐƟŵĂƚĞƚŚĞƐŝǌĞŽĨƚŚĞ ƚŚĞĚĞŵĂŶĚĨŽƌĞŶƚĞƌƚĂŝŶŵĞŶƚǀĞŶƵĞƐ͘dŚĞƌĞĂƌĞ ďĞĐŽŵŝŶŐŵŽƌĞĂŶĚŵŽƌĞĂǁĂƌĞƚŚĂƚƚĞĐŚŶŽůŽŐǇ ĐŽŝŶͲŽƉŵĂƌŬĞƚ͕ĂƐŵŽƐƚŽĨƚŚĞƐĞĐŽƵŶƚƌŝĞƐĚŽ ĂůŽƚŽĨŽƉƉŽƌƚƵŶŝƟĞƐŝŶĐŽƵŶƚƌŝĞƐůŝŬĞŽůŽŵďŝĂ͕ ƐŽůƵƟŽŶƐŚŽůĚƚŚĞŬĞǇƚŽŐƌŽǁƚŚĂŶĚƚŚĞ ŶŽƚŵĂŝŶƚĂŝŶƐƚĂƟƐƟĐƐ͕͟ŚĞƐĂŝĚ͘͞ůƐŽ͕ĂŌĞƌ ŚŝůĞ͕WĞƌƵ͕ƌĂǌŝůĂŶĚƌŐĞŶƟŶĂ͘ ƉƌŽŐƌĞƐƐŽĨƚŚĞŝŶĚƵƐƚƌǇ͕͟ƐŚĞƐĂŝĚ͘ ƚŚĞĐƌĂƐŚŽĨƚŚĞƌŐĞŶƟŶĞĞĐŽŶŽŵǇůŽǁĐŽƐƚ ͞/ŶĐŽƵŶƚƌŝĞƐǁŚĞƌĞĨƌĞĞƚƌĂĚĞĂŐƌĞĞŵĞŶƚƐ /ŶŬĞĞƉŝŶŐǁŝƚŚƚŚĞƚƌĞŶĚƐƐĞĞŶŝŶĞŵĞƌŐŝŶŐ ŝŵƉŽƌƚĞĚƉƌŽĚƵĐƚƐĨƌŽŵƐŝĂďĞŐĂŶŇŽŽĚŝŶŐ ŚĂǀĞďĞĞŶƐŝŐŶĞĚ͕ǁĞŚĂǀĞŵŽƌĞƉƌĞƐĞŶĐĞ ŵĂƌŬĞƚƐĞůƐĞǁŚĞƌĞĂƌŽƵŶĚƚŚĞŐůŽďĞ͕^ŽƵƚŚ ŝŶƚŽƚŚĞĐŽƵŶƚƌŝĞƐĂŶĚƐƟůůĚŽŵŝŶĂƚĞŝŶƐŽŵĞ ǁŝƚŚŐƌĞĂƚƌĞƐƵůƚƐ͘dŚĞƌĞĂƌĞƐĞǀĞƌĂůĐŽƵŶƚƌŝĞƐ ŵĞƌŝĐĂ͛ƐĂŵƵƐĞŵĞŶƚŵĂƌŬĞƚŝƐĐůŽƐĞůǇůŝŶŬĞĚƚŽ ĂƌĞĂƐ͘ĞƚǁĞĞŶϭϵϵϲĂŶĚϮϬϬϯǁĞƐŽůĚƐĞǀĞƌĂů ŝŶ^ŽƵƚŚŵĞƌŝĐĂǁŚĞƌĞĚƵƟĞƐĂƌĞƐƟůůǀĞƌǇ ƚŚĞĞǆƉĂŶĚŝŶŐƌĞƚĂŝůŵĂƌŬĞƚ͘ ƚŚŽƵƐĂŶĚsĂůůĞǇƉŽŽůƚĂďůĞƐŝŶƚŽƌŐĞŶƟŶĂĂŶĚ ŚŝŐŚ͕ŚŽǁĞǀĞƌ͕ŵĂŬŝŶŐƚŚĞĞƋƵŝƉŵĞŶƚŶŽƚĂƐ ͞tĞŚĂǀĞĨŽƵŶĚƚŚĂƚƚŚĞĐŽŝŶͲŽƉŝŶĚƵƐƚƌǇŝŶ hƌƵŐƵĂǇĂůŽŶĞĂŶĚ͕ĚƵĞƚŽƚŚĞůŽŶŐĞǀŝƚǇŽĨŽƵƌ ĂƩƌĂĐƟǀĞ͕ďƵƚĐĞƌƚĂŝŶůǇƚŚŽƐĞǁŚŽŚĂǀĞƚƌŝĞĚ ^ŽƵƚŚŵĞƌŝĐĂŝƐŵŽƐƚůǇďĂƐĞĚŝŶ&ƐƚŚĂƚĂƌĞ ƉƌŽĚƵĐƚ͕ǁĞĂƌĞƋƵŝƚĞĐĞƌƚĂŝŶƚŚĞǇĂƌĞƐƟůůŝŶƵƐĞ͘ ŝƚĂƌĞĞǆƚƌĞŵĞůǇŚĂƉƉǇǁŝƚŚŽƵƌƉƌŽĚƵĐƚƐĂŶĚ ƟĞĚŝŶƚŽƐŚŽƉƉŝŶŐŵĂůůĚĞǀĞůŽƉŵĞŶƚƐ͕͟ƐĂŝĚ ,ŽǁĞǀĞƌ͕/ǁŽƵůĚĞƐƟŵĂƚĞŵĂŶǇƟŵĞƐŵŽƌĞŽĨ ƐĞƌǀŝĐĞƐ͘KƵƌƉƌŽĚƵĐƚƐĂƌĞƐŬŝůůŐĂŵĞƐ͕ďĂƐŝĐĂůůǇ͕ dĂŶ͘͞dŚĞ&ƐĂƌĞĐŽŶƐŝĚĞƌĞĚĂǀĞƌǇĂƉƉĞĂůŝŶŐ ƐŝĂŶŽƌŝŐŝŶŚĂǀĞĞŶƚĞƌĞĚƐŝŶĐĞ͘͟ ǁŚŝĐŚĚŽŶ͛ƚƌĞƋƵŝƌĞĂůŽƚŽĨĐƵƐƚŽŵŝƐĂƟŽŶ͘͟ ƉƌŽĚƵĐƚĨŽƌƚŚĞŵĂůůŝŶƚĞƌŵƐŽĨĂďŝůŝƚǇƚŽĂƩƌĂĐƚ 'ĂŵĞƐŵĂŶƵĨĂĐƚƵƌĞƌhE/^ŚĂƐďĞĞŶĂĐƟǀĞŝŶ KŶĞĐŽŵƉĂŶǇƚŚĂƚŝƐǁĞůůƉůĂĐĞĚƚŽĂƐƐĞƐƐ ǀŝƐŝƚŽƌƐƚŽƚŚĞŵĂůůĂŶĚŝŶĐƌĞĂƐĞƚƌĂĸĐĂŶĚ ^ŽƵƚŚŵĞƌŝĐĂĨŽƌŽǀĞƌϭϬǇĞĂƌƐĂŶĚĐŽŽƌĚŝŶĂƚĞĚ ƚŚĞƐƚƌĞŶŐƚŚŽĨƚŚĞ^ŽƵƚŚŵĞƌŝĐĂŶŵĂƌŬĞƚŝƐ ĨŽŽƞĂůů͘dŚĞƐĞǀĞŶƵĞƐĂƌĞǀĞƌǇǁĞůůƌƵŶ͕ŽŌĞŶ ŝƚƐĞŶƚƌǇŝŶƚŽƚŚĞŵĂƌŬĞƚƚŚĞƌĞǁŝƚŚƚŚĞƐƚĂƌƚŽĨ ƌŐĞŶƟŶĂ͛Ɛ^ĂĐŽĂ͕ǁŚŝĐŚƐƚĂƌƚĞĚŽƵƚĂƐĂŶ& ŽƉĞƌĂƚĞĚďǇůĂƌŐĞĐŽƌƉŽƌĂƟŽŶƐŽƌĐŽŵƉĂŶŝĞƐ͘͟ ŝƚƐƐĂůĞƐŝŶƚŽEŽƌƚŚŵĞƌŝĐĂ͘ĐĐŽƌĚŝŶŐƚŽƚŚĞ ŽƉĞƌĂƚŽƌŝŶŝƚƐŚŽŵĞŵĂƌŬĞƚďĞĨŽƌĞĚĞǀĞůŽƉŝŶŐ ƋƵŝƉƉŝŶŐƚŚĞƐĞŶĞǁůŽĐĂƟŽŶƐǁŝƚŚƚŚĞǀĞƌǇ ĐŽŵƉĂŶǇ͛Ɛ^ƚĞǀĞŶdĂŶ͕ďƵŝůĚŝŶŐĂƉƌĞƐĞŶĐĞŝŶ ŝƚƐĚĞďŝƚĐĂƌĚƐǇƐƚĞŵƚŚĂƚŚĂƐďĞĞŶƐƵĐĐĞƐƐĨƵůůǇ ůĂƚĞƐƚŐĂŵĞƐŝƐĂƉƌŝŽƌŝƚǇĨŽƌŽƉĞƌĂƚŽƌƐ͕ŚĞƐĂŝĚ͘ ƚŚĞŵĂƌŬĞƚƌĞƋƵŝƌĞƐŶĂǀŝŐĂƟŶŐƚŚĞǁĞďŽĨůŽĐĂů ĞǆƉŽƌƚĞĚĂƌŽƵŶĚƚŚĞǁŽƌůĚ͘ ͞ƵǇĞƌƐĂŶĚƉůĂǇĞƌƐŝŶ^ŽƵƚŚŵĞƌŝĐĂĂƌĞƋƵŝƚĞ ƌĞŐƵůĂƟŽŶƐĂŶĚŝŵƉŽƌƚƉƌŽĐĞĚƵƌĞƐ͘ ͞ĞƐƉŝƚĞůŽĐĂůĐƌŝƐĞƐ͕͟ƐĂŝĚ^ĂĐŽĂ͛Ɛ^ĞďĂƐƟĂŶ ƐŽƉŚŝƐƟĐĂƚĞĚ͘dŚĞǇůŽŽŬƚŽƚŚĞh^ĨŽƌĚŝƌĞĐƟŽŶŝŶ ͞tĞŚĂǀĞƐĞůĞĐƚĞĚĐŽƵŶƚƌŝĞƐŝŶĚŝǀŝĚƵĂůůǇ DŽĐŚŬŽǀƐŬǇ͕ƌĞĨĞƌƌŝŶŐƚŽŽŶĞŽƌƚǁŽƚĞƌƌŝƚŽƌŝĞƐ ƚĞƌŵƐŽĨĞƋƵŝƉŵĞŶƚƌĞůĞĂƐĞƐ͘tŚŝůĞǀŝĚĞŽŐĂŵĞƐ ĂŶĚŵĂƌŬĞƚŽƵƌƉƌŽĚƵĐƚƐǁŚĞƌĞƚŚĞĞĐŽŶŽŵǇ ƚŚĂƚŚĂǀĞĞǆƉĞƌŝĞŶĐĞĚĚŝĸĐƵůƚǇ͕͞ƚŚĞ^ŽƵƚŚ ƵƐĞĚƚŽďĞƚŚĞĚŽŵŝŶĂŶƚĨĂĐƚŽƌϭϬǇĞĂƌƐĂŐŽ͕

ϱϮ :h>zϮϬϭϯŝEdZ'D ǁǁǁ͘ŝŶƚĞƌŐĂŵĞŽŶůŝŶĞ͘ĐŽŵ MARKET REPORT

ƚŚĞĚŝƌĞĐƟŽŶƌŝŐŚƚŶŽǁŝƐƚŽƚĂƌŐĞƚĨĂŵŝůŝĞƐ͕ǁŝƚŚ ƐƵƉƉŽƌƚďĞƩĞƌďƵƐŝŶĞƐƐĚĞĐŝƐŝŽŶͲŵĂŬŝŶŐ͕ďǇ ĞĂǀĞƌǀĞŶĚŝŶŐŵĂĐŚŝŶĞƐ͘ ƌĞĚĞŵƉƟŽŶŵĂĐŚŝŶĞƐ͕ƌŝĚĞƐ͕ŬŝĚĚǇƌŝĚĞƐĂŶĚƐŽŌ ĂůůŽǁŝŶŐƚŚĞŽƉĞƌĂƚŽƌƚŽŚĂǀĞĂŐůŽďĂůĐŽŵƉĂŶǇ ͞sĞŶĚŵĂŶŝĂŚĂƐďĞĞŶŽƉĞƌĂƟŶŐŝŶƚŚĞǀĞŶĚŝŶŐ ƉůĂǇŐƌŽǁŝŶŐŝŶĚĞŵĂŶĚ͘ ǀŝƐŝŽŶĂŶĚĂǀŽŝĚƌĞƉĞƟƟǀĞƚĂƐŬƐůŝŬĞĐŚĞĐŬŝŶŐ ŵĂĐŚŝŶĞƐƐĞĐƚŽƌĨŽƌŽǀĞƌϮϬǇĞĂƌƐĂŶĚ͕ŝŶƚŚĞ dŚĞhE/^ĨĂŵŝůǇŐĂŵĞƐƐĞƌŝĞƐŝƐƉĞƌĨŽƌŵŝŶŐ ƌĞƉŽƌƚƐŽƌĂĚŵŝŶŝƐƚƌĂƟǀĞƌŽƵƟŶĞĐŽŶƚƌŽůƐ͖ ůĂƐƚĨŽƵƌǇĞĂƌƐ͕ŝŶŝƟĂƚĞĚƐŽŵĞƉƌŽĐĞƐƐĞƐƚŽŵĂŬĞ ǁĞůůŝŶƚŚĞ^ŽƵƚŚŵĞƌŝĐĂŶŵĂƌŬĞƚ͕dĂŶƐĂŝĚ͕ ďǇŵĞĂŶƐŽĨƵƐŝŶŐƚŚĞůĂƚĞƐƚƐŵĂƌƚƉŚŽŶĞƐ ƚŚĞŵĂƌŬĞƚŵŽƌĞĂƩƌĂĐƟǀĞƚŽŶĞǁĂŶĚĞǆŝƐƟŶŐ ŶŽƟŶŐƉƌŽĚƵĐƚƐƐƵĐŚĂƐƵĐŬǇ^ƉůĂƐŚ͕ǁŚŝĐŚĮƚƐ ƚĞĐŚŶŽůŽŐǇĐŽŵŵƵŶŝĐĂƟŽŶ͕͟ƐĂŝĚ&Ăďƌŝǌŝ͘ ŽƉĞƌĂƚŽƌƐ͕͟ƐĂŝĚƚŚĞĐŽŵƉĂŶǇ͛Ɛ&ĞƌŶĂŶĚŽZĞŶƐŝ͘ ǁĞůůŝŶƚŽ&ƐĂŶĚŝƐƐĞůůŝŶŐĂĐƌŽƐƐƚŚĞƌĞŐŝŽŶ͕ &ŽƌYƵďŝĐĂD&͕ŽŶĞŽĨƚŚĞǁŽƌůĚ͛ƐůĂƌŐĞƐƚ ͞ŵŽŶŐƚŚĞŵĞĂƐƵƌĞƐƚĂŬĞŶǁĂƐƚŚĞ ĂůŽŶŐǁŝƚŚŬŝĚĚǇƌŝĚĞƐĂŶĚƐŵĂůůŝŶĚŽŽƌƌŝĚĞƐ͘ ŵĂŶƵĨĂĐƚƵƌĞƌƐŽĨďŽǁůŝŶŐĞƋƵŝƉŵĞŶƚ͕ŝŶĐůƵĚŝŶŐ ŵĂƌŬĞƟŶŐĂŶĚĂĚǀĞƌƟƐŝŶŐŽĨĞĂǀĞƌŵĂĐŚŝŶĞƐ͕ dŚĞŶĞǆƚƐƚĞƉŝŶĞǀŽůƵƟŽŶǁŚĞŶŝƚĐŽŵĞƐ ŝƚƐDŝŶŝŽǁůŝŶŐĐŽŶĐĞƉƚĚĞƐŝŐŶĞĚƐƉĞĐŝĮĐĂůůǇĨŽƌ ďĞĐĂƵƐĞǁĞŶŽƟĐĞĚƚŚĂƚƚŚĞŵĂƌŬĞƚǁĂƐďĞŝŶŐ ƚŽ&ƐŝƐŝŵƉůĞŵĞŶƟŶŐƐǇƐƚĞŵƐƚĞĐŚŶŽůŽŐǇ ƚŚĞĂŵƵƐĞŵĞŶƚŵĂƌŬĞƚ͕^ŽƵƚŚŵĞƌŝĐĂƐĞĞƐƚŚĞ ŇŽŽĚĞĚǁŝƚŚŝŶĨĞƌŝŽƌŵĂĐŚŝŶĞƐ͕ǁŚŝĐŚŽŌĞŶ ƚŽĞŶƐƵƌĞƚŚĞůŽĐĂƟŽŶŝƐƉĞƌĨŽƌŵŝŶŐĂƚŝƚƐ ĐŽŵƉĂŶǇǁŽƌŬǁŝƚŚĂŶĞƚǁŽƌŬŽĨĚŝƐƚƌŝďƵƚŽƌƐŝŶ ĚŝƐĐŽƵƌĂŐĞĚŶĞǁĞŶƚƌĂŶƚƐďĞĐĂƵƐĞƚŚĞŵĂĐŚŝŶĞƐ ŽƉƟŵƵŵůĞǀĞůĂŶĚĞĂƌŶŝŶŐƐĂƌĞŵĂǆŝŵŝƐĞĚ͘ ŵĂũŽƌŵĂƌŬĞƚƐĂĐƌŽƐƐƚŚĞƌĞŐŝŽŶ͘/ƚĂůƐŽŚĂƐĂŶ ďƌŽŬĞĚŽǁŶĂůŽƚĂŶĚƚŚĞǇŐĂǀĞƵƉƚŚĞďƵƐŝŶĞƐƐ͘͟ ^ĂĐŽĂĂŶĚŽŝŶdĞĐŚĂƌĞůĞĂĚŝŶŐƚŚĞǁĂǇŚĞƌĞ ŽĸĐĞŝŶDĞǆŝĐŽĨƌŽŵǁŚŝĐŚŝƚƐĞƌǀĞƐƚŚĞ>ĂƟŶ ĞŵŽŶƐƚƌĂƟŶŐƚŚĞŝŵƉŽƌƚĂŶĐĞŽĨŵĂŬŝŶŐ ĂŶĚŝŶƚĞƌŶĂƟŽŶĂůůǇ͘ ŵĞƌŝĐĂŶŵĂƌŬĞƚ͘ ƵƐĞŽĨƚŚĞǀĞƌǇďĞƐƚĞƋƵŝƉŵĞŶƚŚĂƐďĞĞŶĂŬĞǇ ͞KƵƌĐŽŵƉĂŶǇ͛ƐŚĞĂĚƋƵĂƌƚĞƌƐĂƌĞŝŶĨĂĐƚ ͞/ƚǀĂƌŝĞƐĐŽƵŶƚƌǇďǇĐŽƵŶƚƌǇ͕ďƵƚĐĞƌƚĂŝŶůǇ ƉƌŝŽƌŝƚǇĨŽƌƚŚĞĐŽŵƉĂŶǇ͕ZĞŶƐŝƐĂŝĚ͘ ďĂƐĞĚŝŶ^ŽƵƚŚŵĞƌŝĐĂ͕ŵŽƌĞƐƉĞĐŝĮĐĂůůǇŝŶ ƚŚĞŶĞĞĚĨŽƌĞŶƚĞƌƚĂŝŶŵĞŶƚŝƐĂůǁĂǇƐƚŚĞƌĞ͕͟ ͞dŚƌŽƵŐŚƚŚĞŵĞĚŝĂĂŶĚŝŶƚĞƌŶĂůƚƌĂŝŶŝŶŐ͕ ƌŐĞŶƟŶĂ͕ǁŚĞƌĞǁĞŚĂǀĞďĞĞŶ&ŽƉĞƌĂƚŽƌƐ ƐĂŝĚ/ƐĞƌƚĞ͘͞tŚĞŶǇŽƵĚĞǀĞůŽƉĂŶ&ƚŚĂƚŝƐ ǁĞƐŚŽǁƚŚĞĂĚǀĂŶƚĂŐĞŽĨǁŽƌŬŝŶŐǁŝƚŚƚŚĞ ĨŽƌŵŽƌĞƚŚĂŶϱϬǇĞĂƌƐ͕͟ĞǆƉůĂŝŶĞĚ^ĂĐŽĂ͛Ɛ ƌŝŐŚƚĨŽƌƚŚĞŵĂƌŬĞƚ͕ƉĞŽƉůĞŐŽƚŚĞƌĞĂŶĚƐƉĞŶĚ ďĞƐƚƋƵĂůŝƚǇŵĂĐŚŝŶĞƐ͕ƚŚĞƌĞďǇŝŶĐƌĞĂƐŝŶŐƚŚĞ 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ƚŚĞǁĂǇŝŶƌĂǌŝůŝƐsĞŶĚŵĂŶŝĂ͕ĂĚŝƐƚƌŝďƵƚŽƌĨŽƌ tĞĂƌĞǀĞƌǇĞǆĐŝƚĞĚĂďŽƵƚŝƚ͘͟

ϱϰ :h>zϮϬϭϯŝEdZ'D ǁǁǁ͘ŝŶƚĞƌŐĂŵĞŽŶůŝŶĞ͘ĐŽŵ IN DEVELOPMENT OR READY FOR MARKET MCT 1000 AND SMART MCT 2000 - HOPPER - CASH MANAGEMENT INNOVATIVE INTERNATIONAL TECHNOLOGY

THEŵŽŶĞǇĐŚĂŶŐŝŶŐŵĂĐŚŝŶĞĂŶĚ THE^DZTHŽƉƉĞƌŝƐƚŚĞŶĞǁŵƵůƟͲĐŽŝŶŚŽƉƉĞƌĂŶĚƌĞĐǇĐůĞƌĨƌŽŵ ƉĂǇŵĞŶƚƐǇƐƚĞŵƐŵĂŶƵĨĂĐƚƵƌĞƌ /ŶŶŽǀĂƟǀĞTĞĐŚŶŽůŽŐǇ͘dŚĞŵŝǆĞĚͲĐŽŝŶĐĂƉĂĐŝƚǇŽĨƚŚĞ^DZdŚŽƉƉĞƌ ĂƐŚDĂŶĂŐĞŵĞŶƚ/ŶƚĞƌŶĂƟŽŶĂů͕ ĞůŝŵŝŶĂƚĞƐƚŚĞŶĞĞĚĨŽƌŵƵůƟƉůĞŚŽƉƉĞƌƐĂŶĚƐŽƌƚĞƌƐ͕ƌĞĚƵĐŝŶŐƚŚĞĐŽƐƚ ŝŶƚƌŽĚƵĐĞƐƚǁŽŶĞǁTDƐ͘ ŽĨŚĂŶĚůŝŶŐĐŽŝŶƐŝŶƚĞƌŶĂůůǇ͘ĂƉĂďůĞŽĨƉĂǇŝŶŐŽƵƚϭϮĐŽŝŶƐƉĞƌƐĞĐŽŶĚ͕ŝƚ dŚĞDdϭϬϬϬŝƐĂĐŽŵƉĂĐƚ ƉƌŽǀĞƐĞĸĐŝĞŶƚĂƐǁĞůůĂƐǀĞƌƐĂƟůĞ͕ƚŚĞĐŽŵƉĂŶǇƐĂŝĚ͘dŚĞŚŽƐƚŵĂĐŚŝŶĞ ŵƵůƟͲĐĂƐŚƚĞƌŵŝŶĂůĨŽƌƚŚĞs>d ƐĞƚƐƚŚĞĚĞƐŝƌĞĚĐŽŝŶƐŶĞĞĚĞĚĨŽƌƉĂǇŽƵƚĂŶĚƚƌĂŶƐĨĞƌƐĂŶǇƵŶǁĂŶƚĞĚĐŽŝŶƐ ŵĂƌŬĞƚ͘ŽŶƚƌŽůůĞĚƵƐŝŶŐƚŚĞϭϬŝŶƐ ŝŶƚŽƚŚĞĐĂƐŚďŽǆ͘dŚĞĚĞƐŝƌĞĚŇŽĂƚůĞǀĞůŝƐƐĞƚďĞĨŽƌĞĐŽůůĞĐƟŽŶƐŽĂůůĞǆĐĞƐƐ ƚŽƵĐŚƐĐƌĞĞŶ͕ŝƚǁŝůůĂĐĐĞƉƚŶŽƚĞƐ ĐŽŝŶƐƚƌĂǀĞůƐƚƌĂŝŐŚƚƚŽƚŚĞĐĂƐŚďŽǆ͘dŚŝƐƐĞůĨͲƌĞŐƵůĂƟŶŐŇŽĂƚĞŶƐƵƌĞƐƚŚĞ ĨƌŽŵΦϱƚŽΦϱϬϬĂŶĚŝƚƐĐĂƐŚďŽǆŚĂƐ ŚŽƐƚŵĂĐŚŝŶĞŝƐĂďůĞƚŽƉĂǇŽƵƚĂƐŶĞĐĞƐƐĂƌǇ Ăϭ͕ϬϬϬŶŽƚĞƐĐĂƉĂĐŝƚǇ͘dŚĞDd ǁŚŝůĞĞĂƐŝŶŐŽƉĞƌĂƚŽƌƌĞĮůůĂŶĚĐŽůůĞĐƟŽŶ͘ ϮϬϬϬŝƐ^^ƟĐŬĞƟŶŐĐŽŵƉĂƟďůĞ ĂŶĚĂƉƉƌŽǀĞĚĨŽƌƵƐĞǁŝƚŚƚŚĞ ƉĞǆĐĂƐŝŶŽŵĂŶĂŐĞŵĞŶƚƐǇƐƚĞŵ͘ ůƐŽǁŝƚŚĂϭϬŝŶƐƚŽƵĐŚƐĐƌĞĞŶĨŽƌ MINI TRAIN - ĐŽŶƚƌŽůůŝŶŐ͕ƚŚŝƐŵƵůƟͲĐĂƐŚƚĞƌŵŝŶĂů ĐŽŵĞƐǁŝƚŚĂŶŽƉƟŽŶĂůƐĂĨĞƚǇ UNIS ƉĂĐŬĂŐĞ͕ǁŚŝĐŚŝŶĐůƵĚĞƐĂs^ĂůĂƌŵ ƐǇƐƚĞŵ͕ŐĂƐďƌĞĂŬͲŝŶƉƌŽƚĞĐƟŽŶĂŶĚ

ϭϭϮ :h>zϮϬϭϯŝEdZ'Dǁǁǁ͘ŝŶƚĞƌŐĂŵĞŽŶůŝŶĞ͘ĐŽŵ