Asian deliveries of slot machine hardware to the region’s biggest casinos has undergone a major slowdown in recent weeks as supply chain issues snag the efficiency. Many of these products are detinned for the North Americas, but in recent years a strengthening globalized gaming economy has led to increased diversity across the ecosystem. Now it appears the biggest operators are snapping up the supply of casino hardware and causing manufacturers to place caps on order quantities before their stocks run completely dry.
The issues are stemming entirely from the global shortage in semi-conductor chips. The industry to produce semi-conductors is concentrated in Asia. Given the high demand on semi-conductors from all types of technology companies in many industries, ranging from automobiles to medical devices, there is a major slowdown in the delivery of these semi-conductors to casino hardware manufacturers. With the shortened supply and availability the manufacturers are building up large backlogs of product.
This issue has been quietly discussed up until very recently, and what is clearly a problem that could drastically effect the ability of casinos to open their doors once again to the public is now being openly discussed to find a solution for the product launch. The complexity of the solution is not lost on anyone in this setup, there have been potential fixes brought forward but nothing concrete has so far been discovered.
Gaming machines use a large range of components that must be produced to an extremely specific specification, or else the final product will fail to function as required. One particular component that has become incredibly hard to source for the manufacturers has been the bill validator module – the device can verify that a legitimate bank not was inserted into the machine before assigning gambling credits to the user.
Pandemic Fatigue Still Slowing Down the Casino Business
One of the major concerns facing the gambling business right now is the availability of components to handle the verification of dollar bills. Yet, this is not the only shortfall in supplies needed for the smooth enablement of the business. There are a number of difficult obstacles that must be circumvented for this venture to prove successful. It would appear that all the issues currently encountered are completely manageable for now, but with operators and suppliers circling and looking for holes in their defence, the outcome is yet to be decided.
Today the issue is bill validator mechanisms, but what will the issue be in the next months. Gas prices are going through the roof, as our many other fixed costs – all of which is being exacerbated by inflation. One of the major suppliers of casino equipment has broken ranks with the digital media industry already, and labelled the macro-economic conditions in combination a poison that has cost his firm over $30 million.
The manufacturers in the industry factories and workshops are having to get creative in order to fulfil the immense demand they’re under. This includes recycling old components and prioritising orders that come from the premier clients on the roster. Despite this major drawdown in fortunes, there are still major concerns around the viability of the core business model. Given the shortfall in bill validator components, it may be a while until certain casino expansion projects are able to get under way.
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