When should an independent decide to partner with a distributor?

I am currently developing a table game, and am trying to learn the ins-and-outs of how distributor partnerships work...

Do they purchase the game outright? Do they take a percentage of royalty? Who owns the IP rights? Is there an industry standard for these questions, or is it deal to deal different?

Any thoughts on standard percentage splits, etc, are greatly appreciated. Additionally, any pros and cons of staying independent are also appreciated.

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There are game distributors on this website but they are looking for a nearly finished game. If you want to maximize your money do everything you can to get some games in the casinos without a distributor. If you can get a few successful placements and the games are performing well, that is the time to find a distributor to take it to the next level. If they see the game doing well, they will offer you much more than if they have to take the risk.

I'm sure a distributor is as much interested in a "sure winner" as any casino would be, but even an independent does have a chance.

Distributors usually have a mix of products they can offer and usually have no problem getting in to see the Director of Table Games, an independent will be lucky to be able to make a thirty second "elevator pitch" to the DTG.

Often a distributor does not buy a game from an independent but merely "options it"... saying I'll diligently promote it for X months and after that I can either buy it from you at an agreed price or I can give the game back to you and we shake hands and go our separate ways. That way the distributor is not at risk for a large sum of money unless the game does really well its trials.

Whatever your game is, my advice is always the same: Go Get Drunk! Half the people in a casino are drunkenly looking for some sort of new activity. Make sure the game can be explained to them while drunk and they will become interested before they sober up.

In almost all cases I would recommend a small operator to go with a distributor, assuming one of them is interested in taking the game. It usually takes 50-100K and good industry connections to get a game to stand on its own two feet. Unless you've got that, my "basic strategy" for game inventors would be to take a deal with a major distributor.

Wizard is correct in his statement that it takes $$$ along with time & energy to get a game on a casino floor as and independent. There are geographic proximity issues, licensing issues, salesmanship, personal skills, etc. required to go the independent route.

That being said, the days of bringing a game with no history of performance to a distributor and getting any interest may be over. Recently I have heard more than one tell me to get it out there and let them know how the first trial(s) are performing. Bally/SHFL did have one game with zero installs to date in their G2E booth and another that had a single placement (albeit the game had been placed and performing for over a year).

AGS is adding games with a proven track record (War BJ, Criss Cross Poker/In Bet (Ron DeLuca Portfolio) along with internally developed games. Galaxy has all kinds of recently created internal game content.

It is extremely tough to be out there on your own trying to get a game on a floor, but it has also become extremely tough to get a distributor to bite on a new game that has no track record. Where does that leave a game developer with a bright new game idea? In a world with a chance of 1 out of 1000 of getting any farther than having a nice new game to show your friends......this is a brutal business with a very small chance of commercial success for an independent developer.

I'm very much new to this and far from an authority, so take this however you wish... We're going to try to get a field trial through contacts in the casino world, then approach a distributor. It's just not practical for us to go it alone, so we'll definitely be looking to work with a distributor.

There is also an excellent evening hosted by Grosvenor in Coventry, U.K, where you can showcase your game.

Quote: FleaStiff

...an independent will be lucky to be able to make a thirty second "elevator pitch" to the DTG.

I disagree.

In the last couple years, I have spoken to a couple dozen managers or DTGs about my Poker For Roulette idea. All I did was hand my business card to a floor person, give the 10 second pitch, and ask if there is someone in management that I should talk to.

In every case the floor person would make a phone call. Sometimes the response was that I should leave marketing materials and/or be given a name & number to call at a later date. (OK. A brush-off.) But most of the time I was told to wait a few minutes, and casino manager or DTG met me on the casino floor. Those impromptu meetings usually lasted about 5 to 10 minutes.

Mind you, I was not attempting to sell the game or get them to agree to be a field trial guinea pig. All I wanted was to present my idea, and get feedback. And get practice presenting my idea.


That said, here's some advice: If you have a game that is ready to go (I.E. approved by the local gaming people etc.), and you get a casino to give you a green light, be prepared to provide the casino new felts, rule cards, signs, any equipment needed, and possibly other stuff, for free. If they do the field trial and it's successful, you'll also have to allow then to keep the game, for an extended period (or perhaps permanently) for free.

But in exchange, you'll get valuable data about your game, data that can be used when selling it to other casinos.

Note that this can get expensive, particularly when you add licensing fees in each jurisdiction, travel to the casinos that aren't in your area, time off from your day job, etc. For these reasons, it's probably best just to keep pitching the idea, looking for feedback, until you get a perfect game, and a perfect sales pitch. Then go pitch it to a game distributor, and let the distributor do their job.

Quote: Wizard

In almost all cases I would recommend a small operator to go with a distributor, assuming one of them is interested in taking the game. It usually takes 50-100K and good industry connections to get a game to stand on its own two feet. Unless you've got that, my "basic strategy" for game inventors would be to take a deal with a major distributor.

The incredible Mr. Shackleford!

Thank you for your reply. I have been a fan of your site(s) many years.

My situation is a bit different - I have been in gaming as a dealer, supervisor, and manager for 12 years. And I knew I couldn't afford to do all the financial side of it, so I went and got a financial backer by pitching my game to angel groups. I did do the ethical thing, and explain how incredibly difficult it is to make a successful game. Fortunately for me, he is willing to accept the financial risk, and we have an agreement in place in the event my game succeeds.

Pending a successful upcoming field trial, promoting my game will be my full-time job. I will have the backing to pay myself a small stipend and cover all expenses, so the financial side is covered.

My thoughts with a distributor partnership is the contacts and marketing. Can an independent make waves in the industry? I plan to do Southern Gaming Summit, Raving's, and potentially G2E. Additionally, I intend to have a full demo mode on a website, and knock on doors full time using contacts in the gaming industry I have developed over my career in table games.

I have seen numbers that show 70-90% fees by distributors. If that's the case, then the answer is immediately clear.

I am wondering what kind of agreements have existed for games that already have traction.

Quote: 21Flip

so I went and got a financial backer by pitching my game to angel groups. I did do the ethical thing, and explain how incredibly difficult it is to make a successful game. Fortunately for me, he is willing to accept the financial risk

Wow, seriously, well done on that!

Quote: Paradigm

Wizard is correct in his statement that it takes $$$ along with time & energy to get a game on a casino floor as and independent. There are geographic proximity issues, licensing issues, salesmanship, personal skills, etc. required to go the independent route.

That being said, the days of bringing a game with no history of performance to a distributor and getting any interest may be over. Recently I have heard more than one tell me to get it out there and let them know how the first trial(s) are performing. Bally/SHFL did have one game with zero installs to date in their G2E booth and another that had a single placement (albeit the game had been placed and performing for over a year).

AGS is adding games with a proven track record (War BJ, Criss Cross Poker/In Bet (Ron DeLuca Portfolio) along with internally developed games. Galaxy has all kinds of recently created internal game content.

It is extremely tough to be out there on your own trying to get a game on a floor, but it has also become extremely tough to get a distributor to bite on a new game that has no track record. Where does that leave a game developer with a bright new game idea? In a world with a chance of 1 out of 1000 of getting any farther than having a nice new game to show your friends......this is a brutal business with a very small chance of commercial success for an independent developer.

Thank you for your very honest words regarding the challenges facing a new game. I understand the significant risk.

And I know that every single developer out there is sure his/her game is the next big thing - but that said, I designed my game specifically to fill a significant niche that seems to have been "missed". (I know this sounds very vague and pie-in-the-sky, but there is a psychological barrier to a particular table game that seems to have never been addressed.) I have tried to be objective as possible in analyzing the concept behind it, and not let "It's-My-Baby!" biases cloud my viewpoint on it. The core idea is to take something that is complex and intimidating, and simplify it. I think I have done well in meeting that objective, and have gotten consistently positive feedback from experienced, directly frank, and trusted critics.

The only reason I have considered a distributor agreement is the marketing power they would have. They have the ability to get the concept in front of eyes much faster than I individually can, and in doing so, can maximize profitability over the life of the patent.

Quote: 21Flip

My situation is a bit different - I have been in gaming as a dealer, supervisor, and manager for 12 years. And I knew I couldn't afford to do all the financial side of it, so I went and got a financial backer by pitching my game to angel groups. I did do the ethical thing, and explain how incredibly difficult it is to make a successful game. Fortunately for me, he is willing to accept the financial risk, and we have an agreement in place in the event my game succeeds.

It is always nice to have a silent partner with deep pockets, especially in this business.

Given your situation, I would try to get a placement at your own casino. The first placement is always the hardest. Hopefully you can pull strings to get it in a good location and staffed by the better dealers. The opposite, which is usually the case, often kills games on field trial. If it comes back with decent numbers it will be a lot easier to get more placements and your bargaining power before a distributor, if you change your mind on that, will be significantly more.

Quote: ShineyShine

Wow, seriously, well done on that!

Thank you.

It was not an easy process, but I acknowledge the fact that my salary as a table games supervisor would never be sufficient to pursue this in a manner that this game deserves. The basic expenses of my family life consume a large portion of available income, and the few hundred dollars a month I could spend wasn't going to cut it.

My only options were to a) effectively "give it away", or b) find someone who understands the vision behind the game, and able to accept the financial risk to try to make the idea into a reality.

Quote: Wizard

It is always nice to have a silent partner with deep pockets, especially in this business.

Given your situation, I would try to get a placement at your own casino. The first placement is always the hardest. Hopefully you can pull strings to get it in a good location and staffed by the better dealers. The opposite, which is usually the case, often kills games on field trial. If it comes back with decent numbers it will be a lot easier to get more placements and your bargaining power before a distributor, if you change your mind on that, will be significantly more.

That is the upcoming field trial previously mentioned.

My table games director is has been a HUGE asset for me, and I simply can not thank him enough.

He has given me a wealth of information regarding how decisions are made from the casino business perspective, from cost and benefit analysis, to marketing niches that my game will uniquely fill, to the politics and key decision makers.

Quote: 21Flip

Thank you.

It was not an easy process, but I acknowledge the fact that my salary as a table games supervisor would never be sufficient to pursue this in a manner that this game deserves. The basic expenses of my family life consume a large portion of available income, and the few hundred dollars a month I could spend wasn't going to cut it.

My only options were to a) effectively "give it away", or b) find someone who understands the vision behind the game, and able to accept the financial risk to try to make the idea into a reality.

We're fairly similar then, i'm also a dealer/supervisor. Except i don't have a silent, rich backer though unfortunately :-)

Best of luck, look forward to seeing your game, sounds intriguing.

Quote: ShineyShine

We're fairly similar then, i'm also a dealer/supervisor. Except i don't have a silent, rich backer though unfortunately :-)

Best of luck, look forward to seeing your game, sounds intriguing.

Depending on where you are, Google Search for "angel investors". Also, contact local business orginizations, such as your Chamber of Commerce, your State Economic Development Office, etc.

There is money out there - you just have to find it.

Be prepared to essentially offer your business to them for "free" to start - you have to protect their investment. My agreement is that my investor gets 100% of the profit until his investment is recovered, then we go to an agreed percentage split.

I want to make it a win/win/win/win situation. The players get a great new fun option, the casino gets a great new offering, my investor earns a strong return, and I get the independence of doing what I truly love, and hopefully making a good income doing it.


Edit: Also, watch Shark Tank and Google the hell out of "entrepreneurship". Read everything you can about what investors are looking for in a start-up business.

Quote: 21Flip

Depending on where you are, Google Search for "angel investors". Also, contact local business orginizations, such as your Chamber of Commerce, your State Economic Development Office, etc.

There is money out there - you just have to find it.

Be prepared to essentially offer your business to them for "free" to start - you have to protect their investment. My agreement is that my investor gets 100% of the profit until his investment is recovered, then we go to an agreed percentage split.

I want to make it a win/win/win/win situation. The players get a great new fun option, the casino gets a great new offering, my investor earns a strong return, and I get the independence of doing what I truly love, and hopefully making a good income doing it.


Edit: Also, watch Shark Tank and Google the hell out of "entrepreneurship". Read everything you can about what investors are looking for in a start-up business.

We're in the process of applying for a government grant for funding at the moment. Angel investment is something we discussed as a possible option, and looked into superficially. I kind of assumed the angel investment route would be about as much of a long shot as actually having a successful game. Obviously not in your case :)

I'm an avid watcher of Dragon's Den, the European equivalent of Shark Tank.

I'm not inserting all the quotes, but it sounds to me like you've got the right experience and done the requisite research to know what you're doing, 21Flip. Plus, given your situation, you've acted to take exactly the right steps to finance your endeavor and give your new game the best chance make it to the floor. I wish I had been as smart as you when I began my journey in this business.

There are lots of good comments here, but I specifically agree with DJTeddyBear's remarks about what you can expect out in the real world, which are no doubt more optimistic than the general consensus but netherless line up with my own experience. It's tough but doable. In the end, your success will be product-driven, but you've already avoided most of the common front-end startup problems of a new inventor.

Best of luck to you!

Quote: 21Flip

I am wondering what kind of agreements have existed for games that already have traction.

I don't think that is applicable because every game is different. It will all depend on the number of placements already established and the amount you are able to charge the casinos. Some side-bets get as little as $1 a day per table. Some games have got $50 a day per table. Just too many variables until you see how much you can charge. If you can charge $10 a day per table and are able to get 20 or so tables out in a short time I think the distributors will start coming to you after six months or so.

How about asking this: "When would (should) a distributor decide to partner with an independent?" If you could answer this question, you would know the answer for the original question.

Quote: 21Flip

That is the upcoming field trial previously mentioned.

Focus all your attention on this trial and attempts to get a 2nd trial location. Game performance numbers trump everything else I mentioned when it comes to new games. If you have it on trial and it does well over a 90 - 180 day period, everything else will fall into place.

I mention getting a second trial location as "variance" and specific property idiosyncrasies can also spell trouble for a game when in fact the game is fine. You may have a bad run of luck and the game doesn't perform in the first 45 days despite the math, it happens. Or you may place it in a property with an older clientele that doesn't like or try new games. There are all kinds of things that unfortunately can go wrong with a single table install/trial.

But since you have industry contacts and experience, see if you can get a 2nd trial and focus on ensuring the first trial goes smoothly.......the game numbers are your key to opening doors to other properties and installations down the road. Let the Forum know when the game goes live, I am sure there will be some members that are close geographically that will give the game some drop support and provide you honest player feedback. Best of luck!!

Quote: 21Flip

My thoughts with a distributor partnership is the contacts and marketing. Can an independent make waves in the industry? I plan to do Southern Gaming Summit, Raving's, and potentially G2E. Additionally, I intend to have a full demo mode on a website, and knock on doors full time using contacts in the gaming industry I have developed over my career in table games.

I'd skip G2E and focus on your presentation for Raving. A nice booth, quality supplies, a good dealer and most importantly a clear, understandable, enthusiastic 20 second description of how to play the game. The risk versus reward at G2E is too high for a new inventor in my opinion.


ZCore13

Quote: Zcore13

I'd skip G2E and focus on your presentation for Raving. A nice booth, quality supplies, a good dealer and most importantly a clear, understandable, enthusiastic 20 second description of how to play the game. The risk versus reward at G2E is too high for a new inventor in my opinion.
ZCore13

+100

Quote: Zcore13

I'd skip G2E and focus on your presentation for Raving ...

ZCore13

Take this advice.

Ditto prior comments. Attend G2E, but show at Raving.

If it's a side bet, make sure it's on every table that has that game. If it's a new game, make sure it's in a prominent location in the primary pit. You don't want it to be closed most of the day/week…

Thank each of you for your commentary and advice. It is greatly appreciated.

The reason I am considering G2E is simply the number of eyeballs-on-product. 10-15k is a ton of money, but EVERYONE goes. Raving and others are indeed significantly less expensive, but the number of attendees are smaller. If I get 5-10 placements out of G2E leads, it makes the expense worthwhile. It seems like a huge opportunity to overlook.

I guess the question is: Why is G2E a "bad" thing? Is it expense/return concerns? I see the comment about risk versus reward; I take it that means a financial risk, versus some other concern?

You are right that everyone goes, but you don't want everyone, you want Table Game Directors that are looking for new games. Those targets are at Raving, at least the US targets are there, and while they may also be at G2E, you will be outgunned by larger table games distributors, furniture, gaming suppliers, surveillance systems, electronic table game product suppliers, table games software systems vendors, etc. Those vendors will get the eyeballs of table game directors & GM's and they will walk right passed your 10X10 booth without even stopping.......because they have someone going to Raving in 6 weeks to look specifically at new table game product if they are in that market.

Your best advice on this will come from the Luck Brothers, they invented Riverboat Roulette and have exhibited at both shows over the last several years......I believe they just do Raving on an annual basis at this point. You should PM them for some insight on why Raving vs. G2E for the indie game inventor.

G2E was ideal around 10/12 years ago but it is so large now that you will barely get noticed at the event.

100% foot traffic at a small event is better than 1% of the foot traffic at a large event.

G2E is good if you wanna see what the big distributors are offering. It's also good if you want to introduce yourself and your game to game distributor. And that includes regular table game, electronic game and Internet casinos.

But that's done by just visiting their booths with literature. Don't expect more than a few minutes of their time. After all, they're not there for you, but to sell their games to the real attendees.

On a plus side, it's fairly easy to get a free ticket to the expo.

Quote: Paradigm

Your best advice on this will come from the Luck Brothers, they invented Riverboat Roulette and have exhibited at both shows over the last several years......I believe they just do Raving on an annual basis at this point. You should PM them for some insight on why Raving vs. G2E for the indie game inventor.

The advice that most of those in the forum is absolutely spot-on when it comes to deciding whether or not to exhibit at G2E or Ravings. When we decided to exhibit in 2012, G2E was truly the only option because Ravings had postponed their event for a few years. However, shortly after we entered into the agreement with G2E, Ravings then revived their Table Games Conference. However, even then, had Ravings promoted that they were going to hold the conference then, we would've bypassed G2E because Ravings is THE niche market we were looking for and G2E was nearly triple the price.

Sure, an independent inventor can get a cheap space near the back of the floor space for less than the price we paid at G2E, however, if the whole reason for going is for the sheer volume of traffic, be prepared to spend the $12,000 - $15,000 range to get placed in the high visibility areas. Over the course of our time there, we did get lots of "attention", but attention isn't what you're looking for, you're looking for people willing to make placements of your game. We also got lots of interest from those attendees in areas where you can't even protect your intellectual rights. We literally had people at our booth blatantly telling us if they wanted to use our game back in their home country, there was nothing we could do about it -- which is true, but disheartening, nonetheless. We garnered a good amount of leads from the G2E, but the problem was they were from everywhere. There we LOTS of "pats on the back" and "attaboys" but neither of those things pay the rent! All in all, we got 3 what we thought hot leads from G2E - none of which equated to installations in the end.

When we decided to exhibit at Ravings later that year, we paid the $3500 and got to actually speak and interact with the niche market we were looking for. Over the 3 day period, we got the same level of interest but actually got our game placed by attending the Ravings event but got 2 installations. The next year, we got another placement (in Las Vegas) as a result of the event, and this year we got 3 more hot leads with as well as a business proposal from another distributor by attending.

In hindsight, I'd say we were "too early" in attending G2E in 2012. But again, at the time, that was the only option. Today, I wouldn't say that we would NEVER attend G2E, but I think it's an event that you should attend ONLY after getting a good number of actual placements and statistical data. Bottom line, invest or waste your money in any manner you please.....after all,it's YOUR money. However, if you're looking for actual installations and return on investment, attend Ravings first to gain placements and traction. So many inventors, believe its all about their game and that everyone will beat down the door to have the "privilege" of placing YOUR game on THEIR floor.....NEVER forget -- this is a business and it all comes down to ROI. In closing, I think if you're estimating you'll get 5 placements from attending G2E, I think you're over significantly OVER estimating. It's a risk averse industry and , at best, you should estimate for only 1 installation as it's always best to estimate on the conservative side rather than "if all goes well' or what you would think is a "reasonable" amount of installations based on the sheer number of attendees.

Quote: Switch

G2E was ideal around 10/12 years ago but it is so large now that you will barely get noticed at the event.

100% foot traffic at a small event is better than 1% of the foot traffic at a large event.

AMEN!!!!

Thank you for the experience-based advice.

A major part of the appeal of G2E is the volume - your comments on quality over quantity are greatly appreciated.

Quote: 21Flip

... quality over quantity ...

Quality vs quantity is an issue for the attendees as well.

Raving is in a banquet room, big enough for about 20 10'x10' booths. I.E. Big enough a typical large wedding reception. The only exhibitors are new table games.

G2E is in a large convention center, so large that when you pick up your badge, you get a variety of materials, one of which is a printed map of the booths. Note that the map is helpful, but it's still very easy to get turned-around and lost in that room.

G2E attracts all varieties of casino/resort management, including hotel and restaurant people - and has exhibitors from all varieties of vendors. And all attendees are invited to visit any booth they like, And many will. That means the hotel and restaurant people will stop at your booth, taking up time that you'd rather devote to your target audience. Even if you manage to talk to your target audience, they will want to keep it short so they can visit more booths, and will be suffering from information overload.

Raving attracts only your target audience. And with only 20 or so booths, and 3 days to visit them all (as well as attending informational classes in the adjoining room), there is plenty of time to not only visit each booth, but to think about what was presented, and re-visit the booths.

So I'll repeat myself: GO to G2E, but get a booth at Raving.

I will pile on the GO GET A BOOTH A RAVING comment.

Everyone that has replied to this thread that attended Raving was along with me at the 2012 Raving event. I completely agree with everything that has already been said about Raving. Get placed in the top 3 is not the goal at Raving, the goal is to find a DTG at a casino(s) that is interested in the game to consider placing it on their floor.

On the distribution route, in my opinion and experience, get the game on the floor first. If it is a successful game, the distributors will see it in action as their salesmen generally visit their properties frequently. If the distributor sees that the game is performing well regarding 'head count' at the table, they will inquire more to the DTG to get the drop and hold numbers.

It is always easier when there is a placement and you have numbers to show the distributor.