GUEST COLUMN: Zoning rules for your floor
September 23, 2011
When a slot executive decides which device to place where on her casino floor and how the layout should be configured, she should think of herself as a real estate mogul looking to maximize the yield from the space she controls. Approaching slot floor layout with this in mind, she needs to pay close attention to location rents by devoting every spot to its highest and best use: do not put a device in a spot where its expected win falls short of the “rent” that an alternative use would pay. Location is perhaps the largest single driver of game performance. Putting the right mix of games in appropriate locations is the key to maximizing slot floor yield. This is an easy concept to identify but terrible difficult to execute.
With this principle in mind, we address a number of frequently encountered floor layout issues in a general way. First, we need to take the whole of the casino floor and identify the level of traffic intensity, both in terms of density and flow. We also need to identify destinations that act as attractors and those that repel. In the diagram below, an area of the floor that has high traffic volume and high attractiveness is defined as a hot zone, while an area of the floor with low traffic volume and negative features is defined as a cold zone. Low traffic zones near attractive amenities, e.g., restaurants or high-end shops, are characterized as “comfort” zones while high traffic zones with no particular attraction of their own, e.g., bordering highly traversed paths or long queues, are characterized as “impulse” zones. Then we discuss ways to maximize performance within these zones.
Hot zone games should be high-priced: high effective wager per spin and high hold percentage.High volatility games will increase turnover in this zone and assure capacity during peak periods. A casino needs to earn as much as possible from the players in this area, particularly during peak periods. It is very much like buying hotels on Park Place or Boardwalk in the game of Monopoly, where you are maximizing rents. A broad mix of games is fine for this zone. Avoid placing too much of your latest product in this area which you can use to lure players into other parts of the casino that need help. In addition, be careful not to have many participation games in this hot area, as they may cost too much and not add enough value for their location on the floor.
Long player sessions should be encouraged and supported in cold zones. Effective denomination, hold percentage, and volatility can all be low. Look to leverage games that can anchor the zone and attract and keep players in the area. This is a good area to place participation games, particularly those with tall cabinets and/or signage packages that attract players into the zone, whether to play the participation games or house games. To the extent that participation games cannibalize house games, the surrounding games most affected will be of lowest yield. Moreover, the presence of popular participation games will increase zone attractiveness to the house’s advantage. Leverage signage and maximize sightlines in a cold zone to bring players deeper into the zone. Let players see the games in these areas. If the game selection and signage packages work, they will attract players into the zone, making up for the deficiency of the real estate.
Performance in high traffic zones that lack positive destination characteristics can be maximized with low-to-medium effective wager, medium volatility but high hold percentages.You want to capture the spontaneity of players’ decisions to gamble in this “impulse” zone. At the same time, you do not expect long player sessions in this zone. Potential players are just passing through. A high hold percentage may not be noticed and may even be expected by a player. This zone should offer a large variety of familiar games increasing the likelihood that a player sees a game she likes. Like in the other zones that have challenges, stagger sightlines to encourage players to venture deeper into the zone.
You want to encourage players who venture into a low traffic volume/positive destination “comfort” zone to stick around. Zone performance can be maximized with low-to-medium effective wager, volatility, and hold percentage games. Keep a wide variety of games in this zone to increase the chance that a player sees one that she likes. This means that there will be a small number of any one game in the zone, which should not be a problem since demand for play in this zone is expected to be low. Experimentation with new games (churn) is probably not the best use of limited resources in this section of the floor. Look to anchor the section with popular games, including participation games that will capture players’ attention and potentially lock them into the zone.
One issue that should arise in all layout decisions is cannibalization. While this issue gets lots of attention involving participation games, the decision regarding deployment of any game should include a thoughtful analysis of the impact of one game on other games, the impact of one zone on other zones. No matter how well a device performs in its assigned location, the slot executive must always ask whether it is simply siphoning winnings from the rest of the floor. No matter how well a zone of the floor is performing, the slot executive must ask whether it is detracting from other zones. A clear, dependable answer requires extensive historical data on floor performance, informed ideas on likely and important interdependencies over games and space, and statistical tools to mine the data and test the ideas. Casino information systems increasingly provide the needed data and off the shelf statistical tools are available. Methodologies to address these issues will be discussed in future articles. SM