Editor's note: Slot Manager asked representatives from Bally Technologies and International Game Technology to share their views on server-based gaming to try to clarify where the technology is heading, its challenges, and their own companies' plans to get there. Later issues of Slot Manager will include perspectives on server-based gaming from other gaming suppliers.
Bruce Rowe is senior vice president for business development, Bally Technologies. Prior to joining Bally, he help positions with GTECH, where he served as a senior vice president of business strategy, gaming solutions, and at Harrah's Entertainment, where he was corporate vice president of slot operations, research and development. He also serves on the Gaming Standards Association Board of Directors.
Why should an operator make an investment in server- based gaming?
Our view at Bally is that server-based gaming is really a term that we don't use much because it really doesn't describe the future. We choose to use the term the networked floor of the future. Today when you talk about server-based gaming, many don't understand it. Many of them understand bidirectional communication to the game and IP-addressable devices. And so we think that first of all a good number of our customers are already doing things that will be value that will come in several different areas as we migrate to this networked floor of the future. I think an area where we see clear value is in marketing at the point of play. There will be things that will happen and can be enabled by this kind of technology that allow operators to create unique and differentiated experiences. At Bally, we have already started to do those things. Another aspect is the ability to download various types of things. And one of the things we could immediately start with that is the ability to start to download to peripherals. So for instance we'd have the ability to download new content to bill acceptors so say you know there?s going to be a new $100 bill next year and there are roughly 800,000 devices in North America. There are steps that we can take for downloading that add value quickly and are not necessarily downloading entire games on demand. So these are some of the things we think will evolve, and we use the word evolve because we think this is evolutionary more than revolutionary, and it is our model is to continue to add these applications.
What is the pricing model for operators?
There isn't one pricing model. The first thing that has to be considered is there has to be an evaluation of what the current infrastructure is. It's dependent on what the operator currently has versus what they want. The applications are all going to be priced differently and depending on the value that they add. There will be many different applications, and many people are asking what is the price, as if that's a singular answer and it's not. So it will depend on the applications, and I would suggest that they'll come in many different pricing models.
How does GSA fit into all of this?
Currently the standards that GSA has been developing for the last 10 years are to evolve with the technology as to how manufacturers work together, recognizing that we compete with each other. How would you characterize the implementation of server- based gaming? Will it follow a pattern similar to TITO?
TITO was a solution that solved multiple problems. It solved problems for manufacturers. It solved problems for operators, and it solved problems for the end users of the product. That's not the case for many of the things that are being described today. So for people to compare this to TITO, it's a very, very different business model. TITO was disruptive in the sense that it came into the industry very quickly, and it solved a problem very quickly. But the problems that it was solving had been there for years. We couldn't have has penny games without TITO, We were doing six hopper fills on a nickel game compared to a quarter game. Customers were waiting 25 minutes to get a hand pay for $3.75. They were furious. So you had this win-win-win situation that was created by TITO and the win-win-win situations have not been described for this [networked gaming]. There is not this huge pull for this technology from the operators.
Will there be an upgrade path for products operators have purchased recently?
One of the things that we're very sensitive to is protecting returns on previously invested capital. We have system customers that we've had for decades and people who have spent a lot of money with us recently that are not interested in writing off that investment. Also we have to evolve the technology, the employees, the applications and the customers all simultaneously so we have to ease into those things.
In the case of Bally, which product lines will be evolved?
Rowe: We clearly are going to evolve iView into this ubiquitous communication channel. To present up time concept, the second chance to win, dynamic revenue management, as well as downloading capabilities via that network. One thing we're going to do is we're clearly going to continue to evolve our management systems to allow operators to have one view of their accounting data. Alpha is a very solid platform, and we're going to continue to evolve that.
What's going to happen to the role of manufacturers in terms of being content providers? How will content change?
I think that content portability is going to continue to expand. It only makes sense that we should be able to move content into places where people want to enjoy it. And whether that's a hotel room or whether that's in different places, we'll figure that out. But content will become more portable because of the programming languages that are being used today, because of the number of digital devices that allow things to be displayed. So as technology improves and as gaming expands, I think you'll see content ported to various new channels.
How about where that content will come from?
Rowe: As you move toward more computing industry standards, that really broadens the ability to get content from other sources. That's one of the exciting things about moving toward computing industry standards.
What about the future role of three-reel mechanical slots? will they thrive in a server-based world?
Rowe: I think you're going to continue to see mechanical devices as a way of diversifying the floor. And now those games have the ability to have the same kind of flexibility in the button panel that we had on video for years and only on video for years. But now that you have the ability to give the player the control of their bets and their betting ranges on both types, you're just seeing a huge impact.
How will server-based gaming change the look and feel of the floor?
Customers have had choices on multigames for years, but yet in spite of that there's no casino that has a 1,000 square- top gaming devices that have 12 games on them. The success we've had in venue-based gaming has been by creating these very differentiated cabinets that allow you to dynamically change some of the content on these widely differentiated cabinets. We at Bally are doing that today, and we're proud of the fact that we have a very wide variety of cabinet choices to suit the gaming environment and that it isn't one box or one cabinet.
Signage has been a key factor on games and in casinos. How will the nature of signage change?
Signs are another example of where they're becoming more dynamic as well. Whether you look at outdoor billboards that are now electronic and show multiple messages every 15 seconds or whatever the timing is and as you look at the proliferation of plasma screens on end caps and over games, you're starting to see signage be more dynamic, more exciting and more linked both to the property overall and specifically to the games. So I think we will see more innovation in those areas. And in fact that's even an extension of that marketing discussion we had about differentiating the games. Now you can appeal to groups of players and in fact the entire casino.
What about operators' concerns about the skills necessary to run this networked floor of the future?
Rowe: Casinos are not used to running and having to manage the network on a casino floor. They've been purpose-built. If you think about 500 people hitting the download Blazing 7 button simultaneously or within the same half-hour, those networks are not designed to do those things today. Dynamic revenue management and dynamic yield management of a floor like this, that is like a pilot flying a Cessna with visual flight rules and a pilot flying an F-14 in the dark. There's a fundamental difference between a Cessna pilot and a F-14 pilot flying in the dark. You've got to have navigation systems. You have to have training, and when you make a mistake it could be very costly. Today if I make a mistake on the hold percentage of a game, it's not going to put me out of business. I might get fined. I might make a few customers upset. But if I push a button and do that on 50 percent of my floor on July 4th weekend, that's big. That's like Center for Disease Control big. I sent a virus out that had huge impact, and now what do I do.
So will there be a role for Bally or any other manufacturer as a consultant providing these services?
Rowe: I think there will be a market that will emerge for that. Whether it's the manufacturer, or whether it's something that involves some group of people who are either trained or endorsed by the manufacturers. It's not just the technology, but what do you do with it and what are the implications. When you think about the sophistication of running those networks and keeping them up 100 percent of the time, when that thing goes down you have no games. It's not like a game's out. It's not like a bank of games is out. You may have no games. There's just some real pragmatic stuff that has to happen.
Andy Ingram is senior vice president, IGT Network Systems, the division responsible for business and product strategy for all IGT systems products and initiatives. He joined IGT in October 2006 after 24 years in the computer industry, most recently with Sun Microsystems.
Why should an operator think about investing in server- based gaming?
Ingram: We see two areas of functionality. There's the area that's traditionally associated with server-based, which we think of as floor management, the ability to manage the configuration and yield of your floor. And the second area is really the ability to inject services across the new open G2S network that would enhance the experience of the players, driving up the revenues of the company. There's obviously a cost savings associated with using the network and automation to manage the floor. There's also the central cost savings in terms of how you deliver services to give a more automated network-based way to do this. Ultimately we believe that enhancing the game and the player's experience has much higher potential value to the operators than the other things.
What will be your pricing model for operators?
Ingram: We do have our pricing models, but until we publicly launch the product, we don't share prices.
Will there be an upgrade path for already purchased products?
Ingram: In the area of Advantage and Mariposa products, if you buy those products today, those products will evolve to the point where they are completely compatible with the G2S network, whether using our server-based technology or someone else's. On the machine side, most machines deployed out there today are not G2S compliant. In our cases, we have sort of two generations, and I think that's true of a lot of vendors. In our case, the AVP machine or the advanced video platform, that's the new generation. Any AVP machine out there today can be upgraded that would be completely compatible with everything we envision in the server-based space. Now with the legacy machines, most of them are not capable of having a disk drive connected to them, but there is a way to put those machines and support onto a G2S network and support them by having the concept of a translator. We're working very hard to be able to support the installed base. I come from a world where that's just a given. We don't want to force our customers to upgrade their machines, but obviously the newer technology will support certain functionality that the old technology will not. So over time I believe people will migrate in that direction, but they will do so at a point that makes sense for their business.
How can operators be assured that all the gaming manufacturers will play nicely together in the sandbox?
Ingram: Interoperability is where everybody says they're going to go to G2S, and now we have to make sure that not only has everybody gone to G2S but the implementations of the protocol are sufficiently consistent that things can operate together. And we've seen this occur many times over the history of technology but the classic example would be the propagation of Ethernet technology. We used to talk in terms of LAN, or local area network. And I could hook PCs or workstations up on a local area network and they could communicate with each other and share data and do messaging and so forth. In the early days, that would only work if the interface card that I bought that was connected to the network was from the same vendor. Over time the vendors got together and had a connectathon basically a plug fest where everybody brings their equipment, plugs it all together and makes sure it all works. And today, you don't even care or think about what the network interface is for your laptop. What we have today in the G2S world is we do have a common set of standards. And the nice thing is when we test these people's implementations, they work. Even so, I'm hoping that we'll get together have a connectathon,. This will probably be sponsored by an independent third- party because I'm not sure people would trust us to do it. Meanwhile, we have just spent $10 million dollars building our own lab so we can bring in the equipment of other vendors and make sure our equipment interoperates with theirs. Our goal is to have interoperability because that's the only way we believe that full value of the G2S plays out for operators. What role will GSA play in all of this?
Ingram: I think GSA will play the role that we've seen a lot of other standards committees play, which is primarily about driving the standard forward and having the cooperation between multiple vendors and multiple operators who will sit on GSA today to define those standards. I don't know that they will take an active role in driving interoperability. In the end it's really the operators who will require that.
How will the nature of content change in the server-based world?
Ingram: I think content happens in two levels. Of course there's the game content, and I don't think that changes. I still believe the better the game content, the better the game, and the more attractive to the player, the better experience they have and the more revenue-producing it is. That will remain the same. One of the things the G2S- enabled network will do is it will allow an operator to deploy new games sooner, and it will allow them to take risks with new technology. So, if you have sort of a library concept where you're subscribing to the content, then I can try new games out without actually having to pay incremental monies. I can then just choose to try that new game and if it's great I can deploy it across the floor, and if it's not, I can undeploy it and it goes away.
What happens to mechanical three reels that still have value on the floor? Ingram: As you get into things that have physical spinning reels, obviously you can't download physical spinning reels, but you can reconfigure those games. You can change the denom. You can change the lines. You can change the payables, so that aspect of floor management is still valid. We now have a very powerful player interface built into the main part of the machine so you can in fact communicate with the player across the network. You'll also see things like for us it's a multilevel display technology where we use video in a clever way to make it look at feel and act like a mechanical reel and you have all the benefits of video in terms of I can download new games, I can reconfigure them and I can have a very powerful service window to the player.
In terms of the look and feel of the slot floor environment itself, what kinds of changes will occur there?
Ingram: When I walk into the floor, is it going to look any different? The answer is not necessarily because I think that how you experience it at that aggregated level could be the same. But I think when you actually engage a single device, it will be a more powerful experience and a more personal experience. Also by the ability to remotely access the top glass on the new generation of slot machines, then the operators can in fact change the effect of the floor because they could be putting their own brands up there. And there are different ways they could now communicate with the player through that. Every player wants to be treated like a high roller, but not everybody spends enough to justify having a host and the kind of personal attention a high roller gets. By using the network, I can deliver a unique experience to the player without the cost of a host so now I can get that sort of personal touch to a much broader community of players.
Will the nature of signage change? Ingram: One of the things we are concerned about as people move to the new environment is that it doesn't begin to look sort of ubiquitous. We're in the process of introducing a number of new cabinets so the look of the floor can be varied. As to what signage is and how the actual machine displays itself in terms of the content of the top glass and the content of the service window, that's totally up to the operator, and I think they'll have more powerful tools to be able to not only put their own stamp on it but be able to change it. That will allow operators to have more coherence where that makes sense or diversity where that makes sense.
Talk about the future of the power of open.
Ingram: What we experience on the Internet is exactly what we're going to experience on the casino floor. How it manifests itself will be entirely different, but the major trends are exactly the same. The first trend is that with an open network, the operator has a choice, choice in the fact that they can decide on what pieces they want to hook up to the network. Today, when they buy a casino management system, they have to decide between vendors. If I pick IGT or I pick Bally or Aristocrat, I'm now buying into a proprietary network implementation, and about the only things that can be connected to those networks are things that come from those vendors. In a G2S world, they buy their network from Cisco, not from a system manufacturer, and they can decide what they plug into it. The second thing is because there's a dominant standard in the industry, all investment gets focused on this technology, and where there's a focus of investment, there's sort of an exponential increase in innovation. And all these new ideas come out that you never envisioned before. Now as an operator, I get very interesting things I can choose from, and what will happen is that the things that you can move across this network five years from now, we can't even envision today.
Any other thoughts?
Ingram: I believe IGT has the most powerful vision of what is possible here. And frankly I have only shared the tip of the iceberg because we have lots of ideas, and it's a little early to be public about those things. But we see the ability to tie all the systems together in a way to drive capabilities that the most sophisticated Internet users and Internet companies, like Google or Amazon, take advantage of to increase their sales. And by learning those lessons and using that technology and integrating in an open and effective manner we think we can drive the whole gaming world to a whole new space.