Good move or shortsighted measure?
Harrah’s Entertainment recently pulled dozens of participation slot machines from some of its gaming floors, in an effort to reduce expenses.
Instead of sharing the revenue from participation games with slot makers, the casino operator chose to replace the games with less costly devices.
A Harrah’s spokesman told the Las Vegas Review-Journal that the casino company tries to offer players the games they like to play “which we determine through volume of play and regular surveys of our guests.”
The move has prompted some speculation that Harrah’s would put the games back on the floor if the revenue share portion was reduced. That would not be good news for slot makers, particularly IGT, whose machines - including what’s considered by many as the best performing game ever, Wheel of Fortune - were the ones removed from some Harrah’s slot floors.
For slot makers, these “recurring revenue” games are profitable to their bottom lines, and they’re also the ones that the companies have invested considerable R&D in or must pay significant licensing fees for the privilege of using an entertainment name or theme, such as the popular game show “Wheel of Fortune.”
If other casinos follow suit, manufacturers will feel the impact.
The cuts aren’t that surprising given the current economic climate. The mortgage crisis, high gas prices and climbing food costs have meant fewer discretionary dollars to visit casinos, and in turn casino companies have trimmed work forces, sliced employees’ hours, shelved projects and otherwise cut the fat. It’s only natural for them to look at slot machine costs and see how those may be better managed.
Many casino slot executives, however, believe removing participation slots is shortsighted.
“I think they’re nuts,” one casino executive told me. “Why would you take off the number one game? The only people who are going to benefit are probably their neighbors across the street. We just put in more of those games.”
The good news is slot developers and manufacturers continue to create great products that are making their way onto slot floors every day.
Witness just a few examples. WMS Gaming’s Star Trek Episodic game has added a new level of interactivity that keeps the player engaged. IGT’s REELdepth slot machines are literally adding new dimensions to the slot world and delivering new possibilities designed to appeal to traditional and new players alike.
Acres-Fiore Inc. is developing a new technology called Personalized Gaming, which automatically adapts the behavior of gaming machines to the physiographic profile of each player. (See John Acres’ Inside Edge column in this issue.)
This is groundbreaking stuff, and it’s this kind of innovation that is needed now and for the networked floor of the future.
And in the end, as always, the players will vote with their dollars and their feet. Which is why taking Wheel of Fortune off the slot floor might be good for Harrah’s bottom line in the short term but may not look quite like such a brilliant move in the long run.