For slot operators, G2E 2012 offered future insights and enduring truths



Online gaming, bricks-to-clicks, those pesky regulations, networked gaming, new technologies, old technologies; there was something for everyone on the program at this year’s edition of the Global Gaming Expo (G2E) held last month in Las Vegas.

If there was a theme that kept coming up, it’s that the slot floor needs to keep pace both with technology and the broader world of consumer technology. That’s not new, but, whether it’s the prospect of more and more states legalizing online gaming or just the realization that the outside hurtles forth at breakneck speed while gaming adapts at its own measured pace, serious thought about the changing world was very much in the air this year, especially if you think back to the discussion three or four short years ago.

Here’s a review of some topics that were covered:



“We have to get the regulators to come very far very fast to be able to get a social gaming platform to react to regulated wagers. This is a non-trivial task that I think will happen over time, but I think people are underestimating how complicated it will be. ”
-Bryan Kelly, senior VP of technology, Bally Technologies

SOCIAL GAMES AND FREE PLAY SITES

Charles Harper, vice president of business development, DoubleDown Interactive, spelled out why many casinos are eager to partner up with online content providers. “Getting into social media isn’t just about having a Facebook page,” he said. “There has to be a community built around it; there has to be some dialogue between you and your community; and building that up takes a lot of time, effort and money. The best thing that a brick-and-mortar casino can do is find somebody to partner with. If you start from the ground up, you’re not going to have the liquidity that you need; the number of people playing. We bring a turnkey solution to operators while they learn how to do it. When real [Internet] gambling hits, it’s going to be the people with the largest communities online who are going to win. Getting out ahead of the curve right now is key and the only real way to do that is to partner.”

Of course, there is a bit of a schism between those who see an open door for non-licensed social game suppliers to get into the regulated for-money gaming industry and those who don’t. Regulation is at once seen as a barrier to innovation and a fact of life that must be part of any realistic assessment of how things will evolve.

“Many of these firms think they’re going to get right into online wagering and they’re going to get right down on the casino floor as wagering,” said Bryan Kelly, senior vice president of technology, Bally Technologies. “From our experience in regulated wagering equipment and the systems that go along with it, we know that process is extremely difficult. The authentication required, the operability, and the change controls processes that live in the regulated game space make it so that it takes six to 12 months or longer to get things out into the field. In the social games space, the sites are morphing in real time every day. We have to get the regulators to come very far very fast to be able to get a social gaming platform to react to regulated wagers. This is a non-trivial task that I think will happen over time, but I think people are underestimating how complicated it will be.”

For some, this is an industry-wide competitiveness issue that the casino industry ignores at its own peril. “When you think about it, regulators in Alderney and Isle of Man were entrepreneurial eight years ago,” said Paul Matthews, chief operating office, Playstudios. “They created a regulatory structure with a little more freedom of movement with changing code and game updates. You could do that without a testing lab in the middle; much better than brick-and-mortar in terms of speed. Social is a whole order of magnitude above that; you have to move with a lot of speed. There’s a huge regulatory educational project that has to take place.”

In the here and now, there are still plenty of opportunities worth pursuing, particularly on the marketing front. “There are unique groups that play social and land-based; we know that,” said Brenda Boudreaux, vice president sales and marketing, Joingo. “People who play Zynga or Farmville may not be the gamer who comes into the casino. Casinos today have very robust CRM systems; they know everything about the players. There’s a lot of data that enables them to do personalized marketing to players. On the social side such as Facebook, there’s not as much data. There’s a lot of data on which games are popular, virtual goods, but not as much on players. The big opportunity on the marketing front is to connect with players on social and, on the land-based side, bring some of those popular social games in. The real coup is, when you look at some of the brands that are popular on social sites, such as Monopoly, Wheel of Fortune…those brand identities resonate with some of those gamers who see those games in casinos. There are some platforms out there that give you the ability to connect in real time to those players and share experiences.”



WMS Gaming and its Player’s Life product helped pioneer the concept of persistence gaming-having customers extend their brick-and-mortar slot experience by offering free-play and other extras via a dedicated game website.

“I think there’s a significant crossover,” said Andrew Schurman, director and CEO, Phantom, the social media platform solution for WMS. “We’ve got games on Jackpot Party that are performing really well. There is a huge market of casino players who want to access our content in as many ways as possible. This is about acquisition and retention, that’s the best way for casinos to really engage with social.”

Kelly said Bally’s strategy on social games is really a CRM strategy; how to drive people back to the bricks-and-mortar. “We have products on the floor that are actually tied up with Facebook directly so that events that happen on the floor are broadcast out to a casino’s Facebook page,” he said. “Players at home can now do challenges and link their friends, create a team and drive them back to the bricks-and-mortars to increase their team score. We’re trying to take that viral nature of Facebook and use it as a tool to try to get people to play specific titles. When you play social games, be it Bally or DoubleDown, instead of playing for virtual goods and services, we’ll allow you to unlock prizes for redemption and come back down to the property to complete a mission, such as compete in a virtual race on one of our Display Manager games.”

Aristocrat pursues a similar strategy with its nLive product, which has scored an early success with Maryland Live! Casino and was recently adapted by Island Resort & Casino in Michigan. “The point of differentiation with nLive is we’re doing full integration back into Oasis and our clients are viewing this as not necessarily the next step for legalized online play,” said Kelly Shaw, vice president system sales and marketing, Aristocrat Technologies. “They know online is five or 10 years in the future, but what they’re really saying is how do we start testing this virtual space, and while we’re testing that let’s drive some repeat visitation back to the property, and let’s reward those players who are playing online with different amenities. They really see it as a whole rinse-and-repeat cycle from a marketing advantage perspective.”

Maryland Live! opened their nLive site 30 days before they went into the bricks-and-mortar build out and then used the online site as a promotional tool to introduce content that would be on their floor. “They wanted to expose what the slot content would be for their players in advance of signing up for their players’ card,” said Shaw. “What they wound up realizing is not only did they build a really strong database and familiarize their players with strong performing slot content, but those players who signed up in those 30 days wound up being some of their most highly valued bricks-and-mortar players. They’re seeing more time on the gaming floor, more value from those players; they’ve actually attributed VIP status of those players from the online offering. They’re also seeing their clients going home at night and playing on the site, asking when they’re going to see more of those (online) games on the floor, so it’s driving content awareness and brand awareness for Maryland Live!, and they’re learning a lot about search engine marketing and search engine optimization as well. And they’re really poised to go into the next phase which is how to monetize a free-play site, almost like a ‘freemium,’ which is going into virtual currency, building a subscription model of sorts to turn on exclusive content for some of their more premier players. They have viewed it all-in-all as a phenomenal marketing strategy of extending their brand.”



“The technology that is being created today, through server-based gaming, allows you to do peripheral firmware upgrades through a central source. You can do it seamlessly at night and then all your equipment is running on the optimized firmware package. ”
-Tom Nieman, senior VP of global marketing, JCM Global

GETTING IT RIGHT ON THE FLOOR

Back on the ground, the real-world challenge of managing a slot floor remains top-of-mind. For instance, how to maximize machine uptime, especially during peak hours and days?

“Most casinos still make 80 percent of their revenue on 20 percent of their shifts, so it’s critical to ensure that machines are available during that period of time and that when they go out of play for various reasons that they are recovered as quickly as possible,” said Bruce Rowe, senior vice president of strategy and customer consulting, Bally Technologies. “What we have today is the ability to use bi-directional communications to the game and to use very discreet transaction information that comes off from the game to proactively respond before a customer is put into a position where they need service and the game cannot earn revenue.”

Rowe offered two examples: Proactively monitor the cash cans to know when they need emergency drops and do partial drops in order to save labor and ensure that the game is not out of service. The second would be to do proactive fills on ticket printers which today are the equivalent of hoppers. And in the event the bill acceptor is not functioning or that printer cannot dispense, to be able to dispatch a person through messaging over hand-held devices to get somebody there as quickly as possible.

“The next way would be to use remote technology both in terms of the device as well as printing to do jackpots and hand pays at the game,” said Rowe. “We have technology available in the industry today where we can take what used to be a 5- to 13- minute transaction to do a W2G and take that down to under two minutes or even seconds at the game.”

New technology can also minimize disruptions on the equipment upgrade front. “Because components are driven by firmware packages and things are changing, things are coming into the market that weren’t there when the original design was done, firmware upgrades have to take place and they can be disruptive,” said Tom Nieman, senior vice president of global marketing, JCM Global. “Machines may have to be shut down, with each device opened for access by a handheld download tool. The technology that is being created today, through server-based gaming, allows you to do peripheral firmware upgrades through a central source. You can do it seamlessly at night and then all your equipment is running on the optimized firmware package.”

How to identify winning games? Rowe said the task isn’t getting any easier.



Server-based gaming and its increased bandwidth makes graphics-rich content, such as Inspired Gaming’s virtual racing product pictured here, economically viable for manufacturers, operators and players.



“You have to define the market segment you want to serve and match it to a product on the fl oor. There’s such a vast variety of product today that didn’t exist 20 years ago that requires a much deeper understanding of the consumer. ”
-Bruce Rowe, senior VP of strategy and customer consulting, Bally Technologies

GETTING NETWORKED

On the occasion of the tenth anniversary of networked server-based gaming sessions at G2E (all of which were packed), Luke Alvarez, chief executive officer of Inspired Gaming Group, had a message for attendees: Get on with it.

“To get good at server-based gaming, you just need to get started and do it,” he said. “There’s no magic; it’s just a learning process.”

Alvarez, whose firm operates about 35,000 machines in over 7,000 venues, acknowledged that Europe is way ahead of the U.S. on networked gaming for some basic reasons. “We cannot keep players engaged by buying a new $15-$20,000 slot; that’s way too capital- and logistical-intensive,” he said. “The structure of the industry has forced us to become really good at putting lots of complicated, graphically rich content over a huge network. Market economics and government mandates have driven it.”

Certain jurisdictions in Europe have mandated downloadable configuration and Inspired is on its the third and sometimes fourth generation versions of server-based devices that are fully downloadable and multi-game capable with content that can be personalized to player preferences. Game levels from previous sessions are remembered. “The end-point device, be it an upright or slant-top slot or tablet is constantly evolving,” said Alvarez. “Our players come to the venues weekly out of curiosity to see what will be new on the device.”

Originally seen as an operational solution that would enable operators to change game and denom mix on the fly, server-based gaming has grown more top-of-mind in the United States recently because of its marketing potential, which is real, said Alvarez.

“The data that you get out of a SAS machine is like Morse code compared with the richness of the data that you get out of a fully server-based device,” he said. “There’s G2S, which is relatively constrained, but there’s also G2S-plus, which is all the other data that tells us every element of every game and a player’s history. We know, for instance, that we make almost twice as much spend-per-session from players who play more than one game per session, but only 4 percent of our sessions are multi-game sessions. What we’ve done is assess what sort of game profile, what sort of volatility, denom they like and cross-sell them to the right kind of game. We’ve been able to take multi-game sessions this way from 4 to 5 percent of our players to 7 percent. It’s gritty, dirty, 1 percent here, 2 percent there kind of stuff, it’s not the type of transformation the way that ticket-in-ticket-out was, but still a great opportunity.”

As in the online gaming discussion, regulations have been part of the (lack of) progress report in the States, but proprietary vendor environments haven’t helped either. “You look at the U.S., some of the things that have gotten in the way are regulations,” said Chris Satchell, chief technology officer and executive vice president research & development, IGT. “Regulations have not really contemplated changing game and denom really quickly; you get procedures built in that make it hard to use servers. On the vendor side, we’ve made it too hard to implement and are working to make it easier to do downloadable configuration so that all of the hundreds of game options can be set. It’s very hard right now to use downloadable configuration and game libraries to the fullest of their ability. When you get it lined up, it’s a great way to get players back into a venue without constantly changing product.”



Innovations such as Bally Technologies’ iView and iDeck make possible floor-wide bonus events and tournaments.

Satchell added that the industry has focused a lot on infrastructure; getting it to support server-based gaming. “What’s happening now is getting the value out of that,” he said. “We all spoke ahead of where the technology was but it has caught up. Amazon-like things such as showing a player their top five games and saying if you like Game A maybe you’ll like Game B, we’re very close to that. There are applications in development right now where you can easily merchandise not only what that player might like but also other things on the floor. You’ve got games on the floor that are hot or they might think are good; push players towards them.  You’ll see that in the next year.”

Satchell also agreed with Alvarez on the data opportunity, and that additional server-based applications will offer operators new forms of ROI. “What we’re finding with floors that have a high percentage of G2S-enabled games is the data that you get from it,” he said. “One thing you don’t get from SAS is per denom, per session analytics. When you have that you see the richness of what you can do and there is a definite ROI attached to that. We’ve got markets outside the U.S. that have realized 10-20 percent increases in floor yield by changing themes and denoms based on stronger analytical data. We’re a very data rich industry; we can collect so much information. One of the missing pieces in server-based gaming is that strong analytics. The other opportunity is, if you have a server-based floor, you can have other applications that go beyond just marketing to give you a reason to play multiple games and actually introduce some of the game features that do so well and draw people into social. Themes of progressive game play that give people a reason to move around the floor, play multiple games. Those are two areas of ROI that we have been slow to push and that are beginning to see help with operator acceptance levels.”

Speakers agreed that it’s a lot of work for vendors to get everything 100 percent compatible, but the capabilities are already there to improve marketing, do tournaments, and engage players and patrons in new and exciting ways.

 “We ran a tournament on 1,000 games [at Pechanga] from five different manufacturers,” said Bally’s Rowe. “The ability to do that, to create a call to action where people will drive to a casino because of a slot event, is amazingly powerful. To create floorwide experiences where customers have a second chance to win, where you can have branded special marketing events that happen on every game, are where we see this transition on the floor. Everybody knows slot tournaments are popular and have in the past been confined to a very small number of games in a specific area of the floor. There has always been a compromise in terms of win-per-unit on those games; we don’t need to do that anymore. Those are the kinds of things that differentiate one casino versus another, or get them to come more often, or to attract people who have perhaps never been to a casino and get them to experience it.” SM