SILVER ANNIVERSARY SECTION: Thinking ahead
What will the gaming industry look like a quarter century from now? Will it be all robot blackjack dealers and digital service for ordering drinks? Will it be full of pajama-clad players competing from home against smartly dressed gamblers on the casino floor? Will casinos as we know them today look and feel the same? Will consumers weaned on Xbox and Wii be content to watch spinning reels turn or to win simple, no-skill video bonuses? How will gaming on mobile phones and tablets impact traditional gaming machines?
While no one knows exactly how the next 25 years will play out, Casino Journal asked a selection of industry insiders to give their predictions on ways the gaming industry may change over the next quarter century. Their answers ran the gamut; from positive and exhilarated about gaming’s future growth potential to negative and uncertain if certain industry trends continue as they expect. All the responders did agree on one fact, however-emerging communication and social media technologies are poised to change the gaming experience as we currently perceive it.
“Gaming will be everywhere. It will be in your room. It will be out at poolside. You’ll be able to get your gaming across the floor in completely different ways,” said Bryan Kelly, Bally Technologies’ senior vice president of technology and networked gaming. “I think you’re going to see more of the virtual world coming together competing on and off property.”
The industry will become more connected over the next quarter-century, according to Gaming Standards Association’s President Peter DeRaedt. “As the world becomes more interconnected, the boundaries between physical and virtual space will fade,” he said. “The Internet is how we interact socially, communicate, entertain, keep informed, meet, innovate, collaborate... It is the virtual air we breathe that allows us to manage our daily lives. We will all be connected and for the next generations it will be hard to imagine not being connected. Social behaviors will continue to shift and so will the gaming industry as a whole.”
The gaming industry had better evolve quickly or risk being left in the dust, according to John Acres, founder of Acres 4.0 and a gaming visionary known for industry innovations such as electronic player tracking, modern progressive jackpot systems and system bonusing.
“We have, as an industry, come from a position of control; everything we do seems to presume that consumers will come to us,” he said. “The rest of the world through the Internet has come from a ‘Hey, Mr. Consumer, whatever you want, we’ll give it to you.’”
“Consumer business is going the Internet way,” he said. “There are so many concepts that are so alien to our culture. We’re all so proprietary, and we build in our costs so high that we negate volume.”
Acres added that it is “troublesome” that just 7 percent of the adult population enjoys the gaming product. The industry needs to reinvent itself to be “more fun, more personalized, more affordable,” he said. “The bottom-line problem is too much regulation, too much proprietary design and not nearly enough concern for consumer satisfaction. As long as that recipe holds true, we don’t have a chance.”
The industry needs to create price points that a variety of consumers can afford, Acres insists. According to Acres, the average U.S. household income is about $47,000 a year with only $100 or so to spend on entertainment each week; a problem for casinos since an hour of gaming can costs upwards of $25. “If gambling was a $10 an hour activity, more consumers would undertake it more regularly than they would if it costs $25 an hour,” he said.
ARE YOU NOT ENTERTAINED?Cost of play is just one item that factors into the future of gaming. Equally important, at least when it comes to determining future business strategy, is determining the various components that will comprise a brick-and-mortar casino experience going forward. As you would expect, opinions vary.
“Some people say we won’t recognize the casinos of tomorrow, [but] we’ll certainly recognize the casino 25 years from now,” said James Maida, president and cofounder of Gaming Laboratories International. “Over the last 25 years, much of the product that was in the casino then is still in the casino today. If you just sort of step back a few hundred feet, the core business has really not changed.”
What has changed over the last 25 years is the advent of technologies, such as ticket-in, ticket-out (TITO), bill validators and networked gaming, he said. Maida expects the casino industry will continue to embrace new technologies and new frontiers, such as online gaming. It also will continue to enhance its bricks-and-mortar casino offerings, such as entertainment, shopping and restaurant experiences.
Marcus Prater, executive director of the Association of Gaming Equipment Manufacturers, concurs with Maida, at least when it comes to boosting entertainment options at land-based gaming properties. “It’s got to be a spectacular entertainment environment in order to give people a reason to leave their house and give people an experience they can’t get at home,” he said.
Going to a casino is an experience, added Larry Pacey, chief innovation officer and executive vice president, global products for WMS Gaming, “that just doesn’t get replaced by robots very easily. I think that even 25 years from today, we will find that there’s a need to fill a digital void that we have. You’re going to want human interaction.”
DeRaedt predicts land-based casinos will morph into resorts or themed ‘experience bubbles’ that promote social interaction. “They will bring people back together from physical separation instigated by the technology revolution,” he said. “These entertainment bubbles will stimulate the senses in various ways. They will offer variety of food experiences, music, movies, gaming, shopping, etc. Visitors will be able to interact with anyone anywhere and share their experiences.”
The gaming industry must take care not to strip the magic from the casino, said MotorCity Casino CEO Gregg Solomon. People visit casinos because they want to escape their workaday lives and step into a fantasy world; something patrons will likely be looking for in the next 25 years as well. “We used to build these gigantic boxes that were complete fantasy factories,” he said. “I think somebody’s going to come back with a wild 3-D environment. Whatever the next technology is-it could be holograms-they’re going to do something where you get put back into that fantasy mode.”
MotorCity Casino has invested high-tech and customer-centric features, such as lighting that moves to music, a social media team, a live deejay, cutting-edge server-based gaming, and an under-construction for-play online poker room being developed through International Game Technology and its DoubleDown Casino subsidiary.
But Solomon is looking to the future and how the Detroit casino might leverage the latest new technologies to reach out to players.
He said he can imagine the possibilities of enabling features that will allow a side wall in his MotorCity poker room to become a video display showing avatars of online players who are next to real players all playing against each other in real time. “I think that would be fun,” he said.
Like Solomon, Bally Technologies’ Kelly said he believes online players in the future will want the opportunity to have their avatars join players on the casino floor. “There’s something about the ability to come down and play next to a person adjacently,” he said. “You’re going to see some of that.”
This will be possible because display technology in general will be much more advanced in the next quarter-century, Kelly believes. “Someday your walls are going to be displays, video and touch interactive surfaces,” he said.
Kelly added that in 25 years the personal communication device for many people may not be a smartphone or tablet but glasses, such as ones under development by Google, designed to deliver information and gaming experiences in new ways. “‘Phone’ is the term we use today, but it could be Google glasses,” he said. This technology could lead to some interesting casino applications; for instance, players could pop on their Google glasses while sitting at a bar and virtually play a head-to-head casino game with a group of people somewhere else in the facility.
EVOLVING GAMESAs the casino experience evolves, so too must slots, tables and the other wagering components and systems found on the gaming floor. This may prove a challenge for some gaming segments such as traditional table game providers, which have already seen their percentage of casino floor space shrink alarmingly over the past quarter century. Going forward, this table game innovation gap may be filled by companies offering electronic facsimiles of traditional games, bonusing features and other technologies.
“We’ve [already] seen introduction of new technology in table game space, said Kent Young, president of Spin Games, a Reno, Nev.-based supplier of secondary bonusing products for casino games. “In the future, I predict we’ll see a lot more of that.”
Meanwhile, slot manufacturers are adapting to this brave new casino world-adding dramatic, innovative changes that offer more interactivity and personalization to their machines and games. “Clearly, there’s more opportunity for change when you get into the machine side of things, the system side of things and the casino itself,” said Prater, who expects a natural progression of technology at the machine level. “What that is and how it is going to be present is more difficult to say. Some of the buzz topics of today, such as player marketing and bonusing at the machine, system-driven events-all of that will be much more advanced.”
Prater believes recent innovations, such as casino-wide community-bonusing events, will become commonplace. “You’ll see more casino-wide events, where even if the action is taking place in the other end of the casino, you’re going to know about it.”
Young noted that such products create opportunity for the casino industry to differentiate the bricks-and-mortar space from the online space. “For casinos to diversify, we’ll see a lot more of the community/tournament products where it’s in a real environment with real human beings,” he said. “I think that will provide a real competitive advantage.”
Prater also envisions a convergence of traditional gaming, online social media gaming and for-play gaming such as EA Sports-type products. “There’s a good chance that, as this convergence happens, the casino will be a one-stop shop for all these different entertainment habits,” he said.
The physical appearance of slots will also evolve over the next 25 years as well. Young, for one, sees server-based gaming-style machines eventually taking over the entire slot floor. “I’d say it is probably going to be a lot different than it is today,” he said. “I think it will be a lot more open and a lot more thin client than it is today.”
Kelly predicted that gaming cabinets will employ more display technology. “The whole cabinet can be the display,” he said. “Every edge of the cabinet can be a display. Every side of the cabinet will be touch-sensitive. Cabinets [will be able to] reconfigure themselves to take on a different look, shrink and expand.”
Others see more radical change to physical game design as a new generation of slot player comes to the fore.
“Future generations will want instant gratification and expect a level of gaming sophistication and experience not yet offered anywhere,” DeRaedt said. “Over the next 25 years we will witness exciting new gaming experiences, across geographical boundaries with potentially global jackpots. A whole new world of gaming will emerge anytime, anywhere and the rewards will be substantial.”
To satisfy this need for anytime/anywhere gaming, traditional slot and table formats will be replaced by cutting-edge technologies, such as remote thin client devices “allowing you to play anything, anywhere, anytime,” DeRaedt said. “They will become multi-dimension gaming experiences spanning across multiple properties real or virtual. Gaming will be cloud-based and central regulatory servers will monitor access to games based on biometric characteristics of the user. Data will be shared across states, provinces, and countries.”
THINKING A LITTLE AHEADWhile preparing for this eventual transformation, slot manufacturers are still tinkering with slot products designed to entice more play from near-term casino customer. For WMS, this means improving the current crop of dedicated casino devices by offering differentiated game experiences players will not be able to get online or elsewhere. For example, the company’s new Aladdin sensory immersion game comes with 3D graphics, enhanced audio and a motion chair.
“It’s something you cannot get at home in front of a computer,” Pacey said. “We’re in pursuit of something better that will affect players in all senses, something visually exciting, with enhanced audio and immersion.”
Part of this overall immersion includes leveraging online elements into the brick-and-mortar-based games. WMS has been devoting significant resources along those lines, with products such as its Players Life games, including The Lord of the Rings and Clue.
“These are products that have Internet connectivity that add value back to the casino property, priming the pump with networked and online communication capabilities married with a land-based destination,” Pacey said. “I think with online and online gambling and even play-for-fun offerings, there is a wide range of opportunities to innovate new types of products and new types of player experiences that will ripple back to the casino.”
Skill-based slot games may play a bigger role in the next quarter century. “I think it makes a much more compelling game experience than watching reels spin and stop,” Kelly said, noting Bally has experimented with skill-based bonuses in games such as Pong and Breakout.
Not everyone is sold on the future of skill-based gaming. Pacey, for one, is still on the fence about the concept. “I’m sure there will be a category of skill-based products. To what degree they’re successful, I’m not sure,” he said. “At the end of the day, where is the gamble? The game has got to be volatile enough [to give you] a chance for a meaningful win.”
Pacey however does believe the slot industry will continue to push new game types for land-based properties. “What’s online and what’s at the property could be completely different,” he said. “There are probably going to be new categories of stuff that will fall in the middle.”
That said, expect future slot machines to borrow some play elements from the online games realm, such as the ability for players to customize tournaments and opt for one-on-one, head-to-head competition. “The casinos today manage tournaments. As you go forward, players will be able to manage tournaments,” Kelley said. “That whole concept of the social gaming machine is going to happen.”
Taking this concept a step further, Maida can envision third-party developers one day supplying gaming apps in similar fashion to developers today working on iPhone or iPad apps for Apple. “Maybe the player will choose which apps he wants to put on the screen, and the apps might not come from the box suppliers themselves,” Maida said. “I think the infrastructure is there. I think we just have to make the operating systems more open, moving the industry from proprietary this and proprietary that to something that’s more akin to open architecture that will allow lots of vendors working with the box supplier.”
SPINNING A NEW WEBAn open systems approach to slot game development may become even more vital as land-based properties search for ways to co-exist with online wagering, which will become more widespread as the industry overcomes legal and political hurdles.
“We absolutely are seeing slow and steady progress [in U.S. online gaming acceptance],” Pacey said, noting it will likely be a state-by-state process. “If you look at consumers, they have instant [Internet] access to information and content. If they’re interested in casino gaming, they’re going to want that same level of access, and over time, they’ll get there. It’s not a matter of ‘if’ but ‘when.’”
Despite the increased competition, the legalization of online wagering could prove a long-term gain for land-based properties. “The opportunity for growth will be for understanding the online landscape and enhanced tools to allow operators to communicate better with the consumer and grow the pie,” Pacey said.
At the end of the day, casinos will have to leverage what differentiates the bricks-and-mortar offerings while staking their own claim to the online and mobile gaming worlds. “People are still going to want to go out and gamble, or see a band and have fun. That’s not going to change,” Young said. “It’s just a matter of providing a product that’s competitive to someone sitting at home playing on the computer or mobile device.”
All of those interviewed believe that the casino industry will work hard to ensure a convergence of land-based and online gaming. “They will be so intertwined that there will no longer be delineation between them,” suggests DeRaedt.
Pacey noted that online gaming remains in its infancy, but WMS is preparing for the future with its Williams Interactive group established to put best-in-class tools together to help operators make the transition. “We’re building for the future,” he said. “We’re envisioning products that don’t exist. These are the things we do on a regular basis.”
Bally Technologies, International Game Technology (IGT) and a host of other slot/systems providers have also formed division offering online products and expertise.
Today’s networked gaming products offer a glimpse at what may be coming in the next 25 years. “We see this as a really powerful enabler,” Pacey said. He pointed to WMS’s Portal applications that enable casino operators to roll out new, interactive applications more easily on gaming banks on their floors. One of the first portal applications - Pirate Battle-creates excitement with a competitive bonus pitting players on one half of the bank’s machines against players on the other half.
The continuing integration of land-based and online gaming products provides ancillary advantages as well, such as the ability to better market customized experiences to casino patrons.
“[Marketing] will be completely tailored to a person, making the process much more human and much more powerful,” Pacey said.
Players will want and demand the same level of personalization and customization that they find in other aspects of their lives, Young added. “Some of the people who will be going into casinos are not even born yet. These people will be going into the casino with the expectation that their needs are met.”
DeRaedt believes players will be known, and marketers will go to great lengths to reach out to them. “Whenever you enter these experience bubbles, the environment knows everything about you and your preferences,” he said. ‘You will receive tailored experiences. Whatever your desires or dreams are, you will be pampered and able to interact with like-minded people in a safe environment. Interactive surfaces will allow you to continue your social dialogues, invite people to share or play games with you.” “We have lots of information about people today that we didn’t have years ago,” Maida said. He added that as casinos take advantage of new technologies, such as the cloud, and wireless availability of data, they will have real-time actionable data to use in making decisions and rewarding players.
THE PACE OF CHANGEIf today’s casinos are to evolve into the hyper-connected, futuristic environments envisioned by some experts, changes will have to occur in some of the processes that currently govern the pace of gaming growth, such as machine regulation and approval. Simply stated, some believe the regulation process for new games needs to noticeably quicken.
“If I’m making an entertainment game on the Internet, I can make a change to that a couple of times a week or even a day,” Acres said. “[On a slot game today] the fastest we can change is 90 days. If I can only make a change once every 90 days, your product is going to evolve way faster than mine.”
Add DeRaedt to the list of people looking for some sort of upgrade in the game machine regulatory process, an issue he believes can be partially solved though improved communications and teamwork. “For regulators it is becoming increasingly more challenging to stay up to speed with the fast changing world of technology allowing them to craft regulations to protect consumers,” he said. “Gaming is an intricate part of the fabric of people’s life and the technology revolution we are all experiencing will only accelerate. This reality will force the industry to create a far more collaborative environment between stakeholders of the policy domain and industry domain. As an industry we need to create common regulatory and technical standards across multiple jurisdictions.”
Maida noted that regulators must be measured and methodical as the gaming industry embraces new technology. “Regulators are definitely more open to technology, and I think the regulators have done a really good job with getting more open-minded with respect to technology,” Maida said. “Regulators are not standing in the way. What they’re saying is we’re not going to accept unlimited risk because you guys want to try something new.”
Acknowledging that regulators have been more open to change, Acres said it’s going to take even more willingness to let gaming developers experiment. “We have to practice the theory of evolution,” he said. “You put it out there, and let it try to thrive.”
Marian Green is a Las Vegas-based freelance writer and editor. She can be reached at firstname.lastname@example.org.