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DD: A big one right now is obviously global trade policy as that affects pretty much all of our members in ways which are unpredictable, hard to manage and disruptive. That’s something that everyone’s having to deal with no matter where they’re domiciled, as they are all working across borders with components and subcomponents sourced from all around the world. So top of mind is how they’re going to get through the next six months. So many are publicly traded companies that have to report to the markets and shareholders and that is very complex and difficult right now. Our members are gaming technology companies, meaning they are building or manufacturing a technology product that happens to be a gaming device. Over many years, the industry has evolved a complex global supply chain where, say, you get a touch screen from a company in one country, computer chips from a manufacturer in another, while another manufacturer uses the subcomponents from another vendor or facility somewhere else. Whether those sources are Taiwan, South Korea, China, or somewhere else, it is often different for each company. Look at the games today and you can see how different they are from 15 to 20 years ago. That’s the product of a huge amount of R&D to create machines that are highly sophisticated and that sophistication extends to the supply chain as well. Every component has been refined and integrated which takes a high degree of manufacturing capability. That can’t be switched out or changed overnight. One thing that COVID taught us was not to concentrate the supply chain around sole source providers. That means the supply chain is much more diverse and global than it was. Our members also work with long lead times. We can’t make products on just-in-time delivery cycles, meaning we may need to buy things a year in advance to have stock of these items. That brings in another area of uncertainty: cash flow. It’s not unusual for our members to expend millions of dollars in cash for boards, monitors, subcomponents, partially assembled cabinets or other parts. Those sit on the shelves as inventory
and they may not know exactly when they will be able to commercialize the completed product and for how much. So, when I talk about uncertainty, that’s why an extended timeline makes uncertainty so disruptive for gaming suppliers. Our members develop and produce a highly integrated product where all the components have to work together, so it’s very difficult to think about finding an alternate source for one component when it’s part of a much larger whole. It has to function properly and be supported within wider product plans and portfolios. Of course, we realize we’re no different than many other industries, but we are also highly regulated by hundreds of jurisdictions around the world, meaning all of our products have to go through a rigorous testing, certification and approval process from the independent test laboratories and then the regulatory authorities. A change in any one component can mean additional certification, testing and approval and that’s not something that happens overnight. It takes a long time and it’s very costly. To get a new game or a modified game through a testing and certification cycle in all of your regulated markers costs thousands of dollars. Any one of these global suppliers will have hundreds or even thousands of games in their library, so when you look at the exponential effect of changing a component, it’s not only the cost and inconvenience of sourcing an alternative, the cash flow implications of a lag to your supply chain, but also the cost of testing and certification. I think you can see that those things combined make it difficult to navigate. SP: You’ve mentioned uncertainty several times. Would you agree that uncertainty about tariffs is worse than, say, having 10 percent tariffs across the board? DD: Agreed. Uncertainty makes it much more difficult to plan. When we’re thinking 12-18 months ahead or longer, we are planning what our products going to look like, what new features are we going to bring to the market to satisfy the customers of tomorrow. When we have uncertainty, we’re
IMGL MAGAZINE | JUNE 2025
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