Pulse
Future expansion the EGT way
By William - 29 January 2020
The Sofia skyline is changing. The taxi window view of Bulgaria’s capital cityscape shows a rapidly expanding technology sector that advertises its presence from the rooftops.
Cisco, IBM and Intel logos are among hundreds of high- tech firms locating their brands in Sofia, capitalising upon two important differentiators in this EU country; the abundance of a highly-skilled technical workforce, and the fact that the Bulgarian lev remains the country’s currency of choice. In relation to its Euro- adopting neighbours, Bulgaria is a resource rich country for employers seeking to locate their tech- focused subsidiaries in a relatively inexpensive locale. Such has been the interest from foreign investors that the country is now facing a skilled labour crisis with head-hunters bombarding employees with requests from rival firms. It’s against this backdrop that G3 visited one of the gaming industry’s leading tech innovators and fastest growing companies, Euro Games Technology, and its subsidiaries, EGT Multiplayer and EGT Interactive.
A BUSINESS GOING PLACES
At the end of August 2019, EGT moved its slots production to new premises, combining three different facilities plus an additional warehousing space into one. The move was instigated to increase production capacity and streamline logistics across the gaming supplier’s Sofia-based locations. In the last three years, the slots developer has produced an average of 1,200 – 1,400 machines per month, but with the new facility expects this figure to reach 2,200 machines per month into 2020. The company has enjoyed 30 per cent growth in 2019, with new markets and new office openings expanding the company’s global footprint, which includes casino slots, AWPs, casino management systems and VLTs.
The home-grown Bulgarian company is a global powerhouse, comprised of offices spanning Spain, Ireland, Romania, Serbia, North Macedonia, Georgia, Kazakhstan, Armenia, Central America, The Caribbean and Mexico, Colombia, Argentina, Peru, Tanzania, Kenya, Uganda, Ghana, Zambia, Cameroon and Angola. The company has an additional network of international distributors covering every major regulated gaming market on the planet for sales and customer support. It’s a hugely impressive operation that’s been masterminded from the same premises since the company was founded in 2002. Such has been the scale of the change since then, new facilities have been top of EGT’s agenda to meet customer demand today and into the future.
FUTURE EXPANSION THE EGT WAY
“In 2008, EGT’s head office in Sofia oversaw a company comprised of 500 people creating 500 machines per month. The company has expanded its capacity and staff three-fold since this time,” explained Stanislav Stanev, Sales and Marketing Director at EGT. “The growth of the business meant that we needed to expand our facilities to meet customer demand with employee numbers now totalling 1,800. In 2002, we were 25 people, including R&D, mathematicians, sales, technicians and logistics. Since then, we have grown step-by-step. There wasn’t a school of slot developers from which we employed our team – we taught ourselves. We trained ourselves. We solved all the issues in-house. This is the EGT way.”
EGT is a young company in multiple senses, with the average age within the business below 30. It’s also a proud team, with the Bulgarian manufacturer selling its product around the world to 82 countries, making it one of the biggest exporters in Bulgaria. EGT is currently the 11th largest contributor to GDP in Bulgaria and the No.1 company in the gaming sector within the country. This places EGT ahead of Bulgaria’s petroleum, retailer sector and electricity generating industries, and on a par with mining and mobile phone companies. The strength of the economy in Bulgaria has played its part in the success of the company too, as the weakness of the economy has ensured that its exported goods not only perform strongly, but are competitively priced too.
EGT MANUFACTURING FACILITY
Visiting the new production facility in Sofia, Ivaylo Dimitrov, Deputy Head of Manufacturing and Logistics, is quick to point out that the company has only been in-situ for one week when G3 tours the new premises. However, progress has been incredibly swift. The 13,000sq.m facility houses 500 employees in its production department, with nine different productions rooms, in addition to the service, technicians and logistics departments, a small administrative team and warehousing facility, all housed under the same roof. Overall, the building, which is a relic from Bulgaria’s socialist era, has been completely renovated to accommodate the current 13,000sq.m facility, though the overall space is 25,000 sq.m, leaving plenty of room for further expansion. The renovation to the current space took just six months to complete with the parking area to the front of the building next in line for a make- over, while the building of a corporate leisure facility is actually taking precedence in what’s dubbed the “play space.”
The reason for the switch to the new facility is production capacity, with the aim to take the former 60 machines per day to 110-120 in the next year. The shift from the former 8,000sq.m divided between three different facilities spread across Sofia into a single space its already yielding 80 machines per day, a figure that Mr. Dimitrov is confident of smashing in the very near future. Housing both the production and warehouses for ready-goods and raw materials under one roof has saved time and energy in logistics, with immediate gains resulting in a doubling of capacity into 2020.
A DYNAMIC WORKFORCE
The average worker’s age at the production facility is noticeably young, 20-25 years old. And, as aforementioned, recruitment raises its head, with EGT seeking to increase production in line with a surge in the number of skilled employees the company needs to service customer demand. EGT is also pushing ahead with its own automation project, which will see robots used to string cables and wiring needed for modern slot electronics, a process that is currently labour intensive and repetitive. Mr. Dimitrov explains that using robots brings the advantage of 24 hour production and absolute consistency of work, while employees have been assured that their hands will be made busy elsewhere within the facility.
Giving an example of the sheer scale of the renovation, Mr. Dimitrov explained that the new facility laid 60 kilometres of cabling for the IT system alone, facilitating the continued use of EGT’s SAP system that has been streamlining machine production since 2011. The additional robotic help is expected to begin speeding through the wiring looms in February 2020, without reduction to the workforce, with the overall team expected to increase, not decrease as all other aspects of production feel the benefits of the improvements in efficiency.
“The main difference we’ve seen as we’ve moved to the new location is that we are all now under one roof,” outlined Mr. Dimitrov. “We wasted time in the past on logistics, moving products within our assembly from one location to the next. It’s now incredibly easy to manage the process. We utilise SAP to test our processes and make the necessary changes to improve efficiencies. Our biggest challenge to date has been the movement of all our equipment to the new location. We achieved this with just nine days downtime to switch from three separate production facilities into a single new location. To understand the undertaking, we hold at any one time €30m in total stock in our warehouse, with €7m in ready goods alone. This was a huge volume to relocate and a difficult process to break down and build up again. However, it was organised internally by our own logistics team from start to finish and we are very proud of their achievement.”
LOGICAL LOGISTICS
The new facility has two huge elevators to transfer goods and products within the facility, with purpose-built truck ramps for goods-in and out servicing EGT’s own fleet of trucks. “This is a great location too, emphasised Mr. Dimitrov, “as it’s in the heart of Sofia’s industrial belt. We are close to road links for transporting goods and rail and metro links for our employees. Parking facilities are being greatly expanded and we have on-site restaurants to cater directly for our employees.”
The reason to renovate as opposed to building a new facility from scratch was manifold, as EGT needed to very quickly escalate its machine output in a short space of time due to the scale of demand. Client orders were beginning to stack-up, and so it was necessary for EGT to move quickly to remedy the issue, though Mr. Dimitrov does not rule out the creation of a purpose-built facility in the future. “We endeavour to shorten the order to delivery time as much as possible,” commented Mr. Dimitrov. “The move to a single larger facility is the first step in halving the delivery time of our machines as customers want product in ever shorter timescales. Our view is that this facility will serve our needs for the next six years, but we do have an eye on the future beyond that.
“However, right now the focus is upon creating 110-120 machines per day in a single shift. We can add a further one or two shifts should demand increase further, as we have ensured that we have the space and capacity to meet demand. The current building has a capacity for 650-700 workers, but we have two additional buildings that after renovation could further increase our capacity.”
The Bulgarian labour crisis is ever present within the consciousness of the EGT team. Unemployment in the skilled labour market is currently 3-4 per cent. It is hard to find new employees and with head-hunting rife in the marketplace, it’s even harder to retain them. EGT trains its staff for a minimum of three months for their roles in the production facility, with apprenticeships seeking to deliver the skills needed in a workforce that is highly mobile. “Our main concern moving facilities was the loss of employees due to the new location,” stated Mr. Dimitrov. “Thankfully, we only had 10 staff leave out of a total 500 employees. We held multiple meetings with our team to discuss the move and ensured that we added playroom facilities, restaurants for catering and comfortable spaces for them with convenient travel links. We’ve gone to great lengths to retain our staff, which also extends to the culture within the teams.
ONE SYSTEM UNDER ONE ROOF
The relocation to the new facility has meant a switch to new processes, something that will put pressure on the staff as the company seeks to manage this new method of working. In the past, EGT operated a single line for the cabinets and another production line for the sheet metal. The new location brings both production lines into one, with the switchover expected to take a month to fully bed-in. Client orders are being serviced throughout the process, though Mr. Dimitrov expects to have caught up with outstanding orders within a month and for order to delivery times to fall thereafter.
“We create a Bulgarian product that’s recognised around the world and we’re all very proud of that,” underlined Mr. Dimitrov. “It’s a great motivator for a young team to be part of a business that’s recognised on such a global scale, exporting to over 82 countries around the globe. We have a very friendly and committed team, though we’re still working on knitting together and integrating our employees as one single unit, as we’ve been three separate entities for a long time. Now we’re all under the same roof we are engaged in team building exercises to unite us into one big team, which will also help with retention in the future.”
EGT MULTIPLAYER
EGT Multiplayer was established in 2017 and is housed in its own separate facility in Sofia. The company is focused upon roulette multi-player systems, with an integral jackpot solution titled Jackpot Cards. The company employees 220 staff across R&D, administration, production department sales and logistics, with the structure of the mother company replicated within the much more compact EGT Multiplayer.
The company is split between 20 per cent administration staff and the remaining 80 per cent focused on production, with an impressive production facility and warehousing within its dedicated facility.
EGT has long been associated with the creation of multi-player devices, building its first roulette product almost a decade ago, including hi-tech multiplayer terminals, with a second generation of terminals and roulettes following shortly afterwards. Such was the success and demand from customers, in 2017 EGT decided to create a separate subsidiary utilising the same business infrastructure as the parent company.
“EGT Multiplayer was created in order to focus on the specifics of multiplayer product development and production, building an independent business with its own resources supported by the parent company, but separate at the same time,” described Stanislav Stanev, Director Marketing and Sales, EGT. “EGT Multiplayer has its own team focused solely on this product and upon new multiplayer markets, which can overlap with slots and systems, but quite often are very different too. In the past we have shared the same R&D, warehousing and production resources, but for the good of the product and to stimulate growth, these are now separate entities. EGT Multiplayer fits into our philosophy that we need to offer a 360 degree solution, from slots, multi-player roulettes, ETGs, AWPs, casino management systems and VLTs.”
SEPARATE YET CONNECTED TO THE WHOLE
“Our primary focus is to satisfy our customers’ expectations and to meet their requirements,” underlined Sales and Marketing Director EGT Multiplayer, Borislav Marinov. “Our products are advanced hi-tech solutions and we strive to provide the best software, rich multi-games and 24/7 monitoring control system that guarantees better control on each gaming machine – an advantage highly appreciated by our customers.”
It’s a fact that there’s intense competition in the multiplayer segment and having focused on roulettes and terminals from the outset, EGT Multiplayer has diversified into adjacent products to introduce cards games such as Blackjack, Baccarat, Poker, Casino Battle and include Bingo and Sic Bo, with its major advantage being the innovative jackpot system that works across all its products
“We offer poker and slots from our parent company, including successful multi-game mixes that include 30 of the top performing slots from the parent company,” explained Mr. Marinov. “We make attractive and stylish hybrid products, including standalone ETGs, which all incorporate the jackpot solution, Jackpot Cards, all at a very competitive price point.”
DIVIDE AND CONQUER
There is obvious overlap between the markets targeted by EGT Multiplayer and its parent company (80 per cent of its customers are shared with the parent company), but there are also numerous individual markets that are multiplayer-only due to player preferences and market regulations. Asia has proved to be a very fertile market for electronic table games and EGT Multiplayer has secured a sizeable share of this marketplace. “We started working with a local distributor in Asia and found that the market is really receptive to our ETG product,” stated Mr. Marinov. “Mexico also continues to perform strongly and we’ve enjoyed success right across Europe and Africa.”
Multiplayers are seen as long-term purchases, but the sales process is a constant cycle of upgrades and value-added software solutions as multiplayer content is always evolving. “We offer the ultimate flexibility, from small-scale multiplayers to much larger configurations including standalone terminals that connect to live games,” described Mr. Marinov. “Our multiplayer terminals allow for the connection to automated RNGs (roulette, bingo, etc.) produced by our company, including links to live roulettes provided by other suppliers. We can connect up to 2,000 multiplayer terminals to our ETGs. We work with customers to configure their floor in the most flexible way possible.
“Our designs sit between the avant-garde and the traditional style of multiplayers, presenting a modern take on the sector. We have three different product lines – R, S and T lines, each with their own designs and functionalities. The R-line series represents the traditional automated roulette products with modern advantages, and the T-line represents our luxury roulette products. The newest S-line series is altogether a flexible and stylish solution that gives the optimal options for every casino or gaming hall, combining the latest technology within a comprehensive package.”
TAKING THE RIGHT LINE
Software and ergonomics are the most important individual elements in the success of a multiplayer product according to Mr. Marinov, both of which are constantly reviewed with the help of customer feedback from around the world. The latest version of the T-line is a result of such feedback, with better visualisation of the roulette wheel spawned directly from listening to customers.
“In Laos, Cambodia and Malaysia, we replaced a competitor product by taking into account the local requirements and responding directly to the marketplace,” stated Mr. Marinov. “We are currently working upon iterations of the R-line and T-line for our presentation at the ICE show in London 2020. We have three iterations of our R-line series in development and a new type of RNG-bingo, with a new baccarat table for the Asia market also set to be unveiled at ICE.”
Every product created by EGT Multiplayer is developed and produced onsite. Everything aside from the physical roulette wheel is built in-house, without sub-contractors. All software and cabinets are constructed and developed by EGT Multiplayer’s dedicated staff who are looking forward to the opening of a new relaxation and play facility due to open on the site, which again is a bid to recruit and retain the best staff in a city that demands better and more attractive workspaces.
EGT INTERACTIVE
A vertigo-inducing glass elevator whisks visitors to the open plan offices of EGT Interactive, where playing card style lounge cushions and vibrant office furniture emphasise the creative atmosphere of yet another Bulgarian hi-tech company nestled in the Sofia- skyline. EGT Interactive was established in 2010 as a sub-division of its parent, Euro Games Technology, with the original team of 35 involved in the development and transfer of the EGT portfolio from land-based to online games. EGT Interactive was spun out of the parent company in 2015, becoming its own entity and separate employer with in-sourced financing, accounts and project management, sales and game development, swelling the numbers employed to a figure of 140 staff (and growing) in 2019.
Starting out with just a handful of customers, EGT Interactive has enjoyed 100 per cent growth as the business has scaled, with existing land- based customers having formed the majority of the original customer base. Today, circumstances have changed according to Stanislav Stanev: “EGT Interactive is now a well-established business, with most of our new customers well-known operators who have joined us from our competitors. Many of our land-based customers have also opened their own online casinos, pushing into new markets, which has helped us to build a very strong image online. In multiple markets around the world EGT is installed in both the land- based sector and online, which is a natural extension for our games. Today, we have more than 200 customers in 82 countries worldwide, operating in 12 different languages.”
A SUCCESSFUL FORMULA
Porting the parent company’s games from land- based to online, EGT Interactive takes the key elements of the land-based slot and reproduces the animations, mathematics and game mechanics for mobile and online platforms. Todor Zahariev, CEO of EGT Interactive, added: “In Bulgaria we are No. 1 and market leader in both the land-based and online space, and the same is true in Georgia where our customers are very appreciative of our games.
“EGT Interactive has considerable market share in a number of countries too. The biggest difference we see between online and land- based is the regulatory environment in which we operate. We adhere strictly to all market regulations and grow our business only in regulated markets.”
EGT Interactive enters markets with well established compliance processes and strong relationships with the relevant institutions. Strict regulation also thins the competition and makes it easier for EGT Interactive to enter regulated markets.
CO-DEVELOPMENT OF PLAYER BASE
“The parent company offers help and experience wherever we can assist EGT Interactive in any given market, especially in terms of regulation and game performance,” underlined Mr. Stanev. “EGT Interactive ports games from our land- based games portfolio to mobile and online platforms, whereby we try to keep all the elements the same, aside from where regulation dictates that we must make changes to adapt to local requirements. We also see a great deal of cross-promotional activity as operators incentivise their players to play within their own online casino environments in addition to their land-based play. Such play is rewarded with redemption codes for play in both spaces encouraging cross-play and co-development of the player base.”
At one time there was concern that online play would cannibalise the land-based market, but as the industry has matured it’s become obvious that online and land-based complement each other. “We conduct market research across each of the viable markets and access the benefits of entry as opposed to the size of the market and potential for growth and expansion,” added Mr. Zahariev. “You need to be circumspect as regards to the benefits in terms of certification, approvals, regulation and the waste of resources and energy upon markets with marginal prospects for growth.”
“We have great Business Development and Account Management teams at EGT Interactive, helping to ensure we build the right partnerships and relationships with our customers and with all the moving parts within a market,” commented Mr. Zahariev. “EGT games are classical slots in the sense that they are less about entertainment/time on device, as opposed to players looking for the win. So many operators want to feature our games on their splash page, at top the of their menus, because they appreciate the performance of our games. Our games continually feature in the top 20 of our customers’ sites.”
JOIN, EVOLVE AND CHANGE THE GAME
EGT is expanding its online business very rapidly, which is helping to drive the growth of the whole company. To achieve this EGT Interactive rely on the skilled talent of its team, which is simply not growing as fast as the company would like due to the size of the talent pool in Bulgaria. “We are in constant communication with universities and take part in career fairs to educate those looking for work in this sector on the qualities needed for a role in a technology driven company,” described Mr. Zahariev.
“To this end, we are advertising in massive online and OOH campaigns, with video content, poster campaigns on the metro train line and PR media coverage to appeal to candidates to consider a role within EGT Interactive. We are also very active on social media with our “Join, Evolve and Change the Game” campaign message to attract candidates. Retention is also a very important part of the equation and we work extremely hard in this respect. We have a skilled labour crisis here in Bulgaria and it is a challenge to recruit and retain the right people. We work incredibly hard to employ and maintain our team-building programmes and we will continue to do so into the future.”
CONCLUSION
Pride in its products and workforce is evident across each of the divisions G3 visited during our time with EGT, EGT Multiplayer and EGT Interactive. The expansion of the company due to the changes made within its production facilities will mean that in 2020, EGT will be serving its global customers with faster responses than ever before. Its young teams are a hive of ideas, enthusiasm and creativity, both within the parent company and its subsidiaries, each with motivated employees with multiple options to head elsewhere should they so choose, but the talent-pool within the company remains strong due to its constant drive to innovate, evolve and meet the challenges operators face in both the land-based and online space. Expect the skyline to continue to change in Sofia as EGT shapes the technology landscape going forward.
