It used to be that people came to a casino primarily to indulge in one primary entertainment activity—slot machine gambling. This dynamic is beginning to shift however, especially among the young for whom a trip to a gaming facility usually involves entertainment options other than wagering on machines.

“Being a Millennial, I love Vegas and going to casinos and clubs and shows—but never had an interest in slots or most table games,” said Darion Lowenstein, chief marketing officer at Gamblit Gaming. “I however play games on my phone daily and own every console game system.”

Companies such as Gamblit have been testing wagering solutions they believe will appeal to the next generation of casino goers—video/mobile gamers. Operators would like younger generations to gravitate back toward the slots and hope skill game concepts, such as those being developed by Gamblit, are just the golden ticket that accomplishes this goal.

Nevada and New Jersey, two states that benefit greatly from gaming taxation, would also like to see a spike in casino visitation and have liberalized slot regulations to allow for innovative, skill-based game play. Thanks to this impetus, the skill games slot industry, despite still being in its infancy, has made substantial progress over the past year in defining standards and regulations for a growing number of legalized markets.

“The regulations will continue to evolve as the market does. As more and more skill games come to market, those regulations will get solidified and the guidelines will get more and more defined,” said Phil Gelber, senior vice president, product development operations for Scientific Games. “Currently, the term ‘skill game’ can apply to everything from video poker to Candy Crush to Pop-a-Shot basketball, so the good thing right now is that the regulations are open to innovative ideas that can expand the market.”

Moving forward, the primary challenge for manufacturers in pioneering the skill-based space will be the need to balance skill with chance to meet regulations. There must be some element of chance to ensure profitability and provide the property with the necessary payout ranges to carry the product; but it also needs to appropriately reward skill so player expectations aren’t abused. “That’s what we’re looking to accomplish with this segment—new skill-based gaming entertainment that is fun, fair and rewarding for players, while providing operators a dependable avenue to diversify their gaming revenue,” said Steve Walther, senior director, marketing and product management for Konami Gaming.

“We’re barely on the first rung of a ten rung ladder in terms of the current state of skill-based games,” added Blaine Graboyes, co-founder and CEO of GameCo. “The market opportunity for skill-based games is substantial in scale and global in scope, and GameCo is the first mover and largest player in a sector expected to grow to $10 billion by 2021. Slot-based revenue at many casinos is in decline and casino operators are actively seeking to attract new players and incremental revenue to their properties, in addition to better engaging with their existing customer base.”

There is also a common belief that skill-based and video game gambling are primarily an attraction for Millennials, but it may be worth considering the much larger market of gamers or video game enthusiasts that can be targeted in this market. Gamers represent a very large, diverse and prosperous target market for casinos.

“Gamers are a massive and underserved market primarily because of outdated stereotypes,” Graboyes said. “Mention ‘gamers’ and many people conjure the image of a teenager in their parents’ basement. Nothing could be less true. Today, the average gamer is 35 years old. In fact, there are significantly more adult female gamers (31 percent) than male teenage gamers (17 percent). The most encouraging data points collected by exit interviews and performance metrics from more than 2,000 players in Atlantic City that played our games show the ability for our Video Gambling Machines (VGMs) to achieve a critical goal for casino operators—to attract a new, younger audience of gamers. To date, 60 percent of our VGM patrons have been under 40 years old. The largest group of players is between 25-34 years old; of these, 84 percent report playing video games often.”

While the ultimate customer makeup of the skill-games casino sector is still uncertain, slot developers see the value in the niche and are pushing unique prototypes into the marketplace. 

“In the coming months and years, we’ll see many different skill concepts from the industry,” Walther said. “Some will be successful and some will not, so manufacturers including Konami will work to refine and innovate this sector to help operators reach broader audiences. The market is hungry for these next generation product types and we’re excited to be a part of pioneering its development.”

Lowenstein agrees saying, “It’s a brand new market. Skill video games on a casino floor—again we don’t think of ourselves as slots—is in its infancy. We fully expect multiple creators to find hits, for some games to bomb and some games to be massive successes, much like any new game console launch. We, and most every study done, show massive growth opportunity.”

 Despite all the experimentation and high hopes for the future of skill-based slots, it is likely wise to pump the brakes a bit and better manage expectations.

“Everyone is looking and listening to see if the desire to have the skill-based product can meet the market expectations,” Gelber said. “The desire from the operators and suppliers for the market to grow is there, but in reality there aren’t any breakaway products that have shown they can earn their way onto the floor in a meaningful way. In the end, the skill product will be compared to the WPU (win per unit) of the slot product sitting in a bank nearby. Until a suite of games competes against the traditional games, or the operator adjusts the expectations on what the game will earn given the play cycle, it will be a challenge to meet the expectations based on the great slot products we have to compete against.”

When it comes to the future success and profitability of the skill-based sector, shared communication between operators and manufacturers will be pivotal. “Our focus on collative industry efforts began at the early stages of regulatory exploration,” Walther said. “As games begin arriving to market, casinos are now faced with the prospect of building and merchandizing these products for success and collaborative efforts continue as we work to optimize product delivery based on monitored results.”

Below is a list of suppliers continuing the push forward in the skill-game market and an update on what they have achieved thus far.

SCIENTIFIC GAMES

While Scientific Games markets several video poker games through their WMS brand, skill games continue to be a relatively small part of the company’s overall business. That said, the company continues to look at skill games with a measured approach and they are actively pursuing the development of new concepts. “Other than our video poker games, we anticipate that Space Invaders will be our best-selling skill-based slot,” Gelber said.

Space Invaders was developed to appeal to an existing audience of slot patrons who are already playing on the casino floor and also appeal to the non-slot player who is looking for a novel way to wager on their own abilities. There is a “Buy A Bonus” feature in the game that allows the player to skip the slot game and go directly to the skill-based portion of the game.

In Space Invaders, a customer plays a traditional slot game to collect shots to be used in the Space Invaders skill bonus. The bonus is a very faithful version of the classic Space Invaders video game, where players shoot the invaders in order to win credits. The more skillful a player is in the bonus, the more they will win. Less skillful players can simply leave the credits on the game to be won in subsequent bonuses.

The company is actively looking at skill games to incorporate into their existing cabinets and slot style games, as well as pursuing entirely new cabinets and fresh game approaches that have no similarity to any of its existing slot products.

“We’re taking several approaches to our skill games,” Gelber said. “Some of that involves gesture technology, 100-point multi-touch sensors, large format 4K displays, 3D technology, etc. Ultimately, the game design drives what types of technology we’ll use for our approach. New technologies are already impacting our products as a whole. From gesture technology, 4K displays, improved CPU and GPU performance, the pace of innovation overall is really moving our industry forward in ways we haven’t experienced in the past.  The skill game market will be able to take advantage of those innovations that are already making it into the products we are shipping today.”

KONAMI GAMING

For years, Konami’s popular Class III games and leading casino systems technology have provided ample support to global markets with the latest creative developments. Announced last fall, Konami is expanding its offerings to include skill-based games in order to deliver continued support for those jurisdictions moving toward legalized casino games with elements of skill. The concepts for skill games presented at G2E received outstanding response from visitors and Konami’s focus for 2017 is delivering the technology to market for players to enjoy.

“The skill-based sector is still an emerging category, with strong growth potential as a new incremental revenue source for operators,” Walther said. “Konami’s approach is to support the exploration of next generation skill-based product while maintaining a commitment to core slot product development to meet the demands of today’s market. We’re pleased to have brought the first skill-based product to market in Nevada, Frogger: Get Hoppin’. This for-wager twist on the arcade classic combines piano-style button melodies with the iconic road and river crossing course in a 15-second race to increasing scores and credit prizes.”

Earlier this year, Frogger: Get Hoppin’ made its world premiere at MGM Grand Hotel & Casino’s Level Up social gaming lounge as the first primary skill-based game available in the state of Nevada. Frogger: Get Hoppin’ continues its expansion to additional locations next month, and additional jurisdictions through the rest of the year.

Additionally, Konami’s award-winning Beat Square skill-based game is scheduled to arrive to the market before the end of the 2017. Beat Square is a rhythmic dexterity skill-based game that allows players to select song tracks and compete for top scores by tapping synchronized rhythmic patterns across a series of colorful touch buttons. 

“Konami has made significant progress on these particular products, and is actively exploring further concepts for continued development and exploration,” said Walther. “As the casino gaming division of KONAMI HOLDINGS CORPORATION in Japan, we come from a steep tradition of innovative game entertainment and decade-long proven popularity. Konami has tremendous mechanical, software and hardware engineering resources available through its parent company, with vast video game and arcade entertainment legacies spanning everything from Metal Gear Solid to Dance Dance Revolution. Our leading R&D team here in the U.S. maintains close collaboration with top developers and engineers in Japan to leverage that longstanding infrastructure and innovation for the gambling space and bring that technology to the casino properties around the world.”

“Konami is thrilled for the opportunity to help pioneer the future of next generation skill-based gaming product and support the market with a growing diversity of gaming entertainment,” Walther added.

GAMECO

GameCo changed history in November 2016 when it became the first skill-based gaming company in the world to debut its video game gambling machine on casino floors, launching in Atlantic City at all three Caesars Entertainment properties, followed by Tropicana. They are a pioneering company uniting the experience of playing video games with the excitement of gambling with the Video Game Gambling Machines (VGM).

GameCo’s VGM is one of the first platforms to bring the true skill elements of video games to the casino floor, engaging a new generation of casino customers. GameCo’s patented VGM proprietary arcade-style cabinets allow a player’s skill to determine the payout and winnings while maintaining the same casino-based economics as slot machines.

“The VGM utilizes GLI-approved hardware components similar to legacy slot machines, with a patented math algorithm that balances player skill, achievability and random ‘Power-Ups’ to manage a probable series of outcomes,” said Graboyes.

GameCo’s VGM features the first console-style video game controller approved for use in casinos. Games include popular titles from top entertainment companies and publishers featuring various genres and themes from first-person action, sports and racing to fighting, platformers, puzzle games and more.

To date, GameCo has released two VGM games: Danger Arena, a first-person action game in which the player is fighting Danger Bots; Yellow “Money” bots and Red “exploding” bots and wins money for each Money bot eliminated; and Pharaoh’s Secret Temple, a Match3 game, similar to Candy Crush where players must collect up to eight Treasures for the maximum payout.

GameCo develops VGM games under license from major game developers and entertainment IP companies, and is creating games based on popular movies such as  Mission: Impossible, Ferris Bueller’s Day Off and Terminator 2: Judgment Day. The company also works with third party developers on original game content including Pirates Gold Studios which developed a Match3 style game, Pharaoh’s Secret Temple, and Free Range Games, who developed the basketball skill game Nothin’ but Net.

Also, in collaboration with SuzoHapp, GameCo has designed a simplified and more rugged controller for the casino environment. The controller design, with and without its mounting system, is currently patent-pending. Graboyes considers the game controller a “beacon” to gamers that grew up playing Xbox and PC video games.

“We continually explore new product development and innovation, particularly driven by performance data from our deployed VGMs as well as player and casino feedback (and demand),” Graboyes said. “We plan to release 10-12 new games per year as well as updates and improvements to existing games to optimize performance. New games will continue to feature licensed brands with many major entertainment and video game properties being added with additional market data and financial resources. Currently, we are exploring two new cabinet designs. One will feature widescreen, ultra-HD resolution curved displays to provide greater engagement and to attract new gamers on ‘loud’ casino floors. This new cabinet is planned to be introduced early next year. The second new cabinet designed, planned to be introduced in several months, will be a ‘bartop’ VGM for installation in locations at bars and pubs worldwide. Our games are perfectly suited to this environment and there is strong market demand.”

But future plans do not stop there; GameCo is planning their next major development with a Tournament System, planned for late 2017 and a Leaderboard system, planned for early 2018. “These new hardware and software products will provide two key features for all VGMs,” Graboyes said. “The first is a tournament controller that allows multiple VGMs to be networked for real-time competition, similar to professional eSports. The second feature is a leaderboard technology to enables players to compete for prizes on an hourly, daily, weekly or yearly basis. Together the Tournament and Leaderboard system will provide key multiplayer and competitive features that leverage existing single player VGMs to provide deeper engagement.”

GameCo is undertaking a major nationwide rollout, with plans to be operational in most major U.S. gambling jurisdictions by the end of 2017.

IGT

International Game Technology PLC (IGT) has studio resources developing and testing skill-based game concepts as well as customers in all parts of the world excited to deploy IGT’s skill-based games on their casino floors.  As part of their development process, IGT is in regular communication with key customers to ensure that they are creating products that they believe will differentiate their casino floors, drive incremental play and engage a broader demographic of players.

In the skill category, IGT’s Video Reel Edge (VRE) themes Race Ace Video Slots and Atari Centipede can be enjoyed in casinos around the world. Both these themes offer players traditional base game play and then the option for either a free games bonus, or a skill-based bonus event where a player’s performance in the bonus event impacts his or her bonus reward.  These games are set on a cabinet that features a mini joystick and feature play elements inspired by widely celebrated arcade games.

“We anticipate that IGT skill-based games Texas Tea Pinball and Cleopatra Pinball will be on casino floors in the near future. These are also skill-chance hybrid games that give players the chance to play a skill-based virtual pinball game in the bonus events,” said Dallas Orchard, senior vice president for IGT.

 Incorporating elements of skill at IGT is done in a number of ways. In their Skillcade games such as Lucky’s Quest and Race Ace Arcade, a player’s skill has a significant impact on their performance in a game. Lucky’s Quest is a narrative-based matching-style game where players can unlock new levels and “tools” as they advance in the game. Race Ace Arcade is a racing-style game where players engage in a virtual road race while sitting in an immersive motion chair that mirrors the movements of the player’s in-game vehicle. With IGT’s VRE games, such as Texas Tea Pinball and Cleopatra Pinball, a player’s skill has less of an impact on the overall outcome of a game because players have the option to opt-in, or opt-out of the skill-based events. Finally, they deem video poker the archetype skill-based game; a patron who plays perfectly will have a better overall game outcome than a player who plays imperfectly.

“IGT is challenging our game developers and engineers to ‘think outside the cabinet’ when it comes to skill-based games,” Orchard said.  “We are proud of the many slot-hybrid skill games that we are bringing to market and will continue to invest in this segment, but we also exploring non-cabinet-based experiences such as the mobile version of Lucky’s Quest, Race Ace Arcade and our Siege VR product. For example, in Siege VR, participants wear HTC Vive googles and are transported to a competitive, virtual world where they engage in a bow-and-arrow battle to defend a castle from oncoming aggressors; a player’s skill directly impacts his or her score and ranking within the Siege VR tournament.”

GAMBLIT GAMING

Gamblit Gaming is the industry leader in bringing world class, AAA skill gaming onto the casino floor with a strong portfolio of hit titles from the video game industry. With Gamblit’s executive team having deep roots in gaming, tech and video games, they have created all new hardware focused on providing a new, social and fun gaming experience.

“We currently have a pretty large portfolio of games (we showed 18 playable games at G2E 2016) including major consumer hit video games like Jetpack Joyride, which had over 350 million downloads, to Game of Show award winning games like Gamblit Poker and Cannonbeard’s Treasure, both of which are live now in Las Vegas and other markets,” said Lowenstein. “We don’t really consider any of our games slots; we think of them as video games. All of our games feature skill rewarding gameplay, interactivity and an experience that no slot machine offers today.”

 Gamblit’s video games offer variation and range to appeal to a broad spectrum of casino goers with games like Gamblit Poker which has one button and a simple mechanic that’s easy to learn. And their upcoming games like mega popular zombie shooter Into The Dead, a single player experience on their TriStation which involves moving, firing and picking up weapons while working on challenges to win cash.

A lot of innovations in both in gameplay and hardware design are incorporated into Gamblit’s video games. “Our Model G gaming table is a 42-inch touchscreen interactive table that supports 2-4 players,” Lowenstein said. “It features consumer requests like multiple drink holders, a splash proof screen, USB charging ports for phones and purse hooks. Both the Model G and TriStation have high powered PC’s that run current hit games and both are multi game devices. So instead of being locked to one game, we can put all sorts of cool new games and content on them. On the TriStation a player can choose from a multitude of games that fit their taste.”

 “While our tech team is brilliant and constantly innovating—we put the user experience and the games first,” Lowenstein added. “Games sell hardware in the consumer world; casino is no different. We are bringing a world class library of massive hits, big brands and all fun skill gaming experiences. Stay tuned for some big brand and game announcements from us this year. The interest has been overwhelming from operators! In fact, the demand far outweighs the supply, which is such a great position to be in. We are currently in the process of putting our Model G onto the floors of over a dozen locations on the Las Vegas strip and numerous other locations throughout the U.S., with our TriStation to follow soon.”