When it comes to technological innovation and the casino gaming floor, operators seeking revenue growth, cost savings or a competitive edge have an ever growing list of products and systems from which to choose.

Recent manufacturer additions to the list of advanced offerings includes skill-based games, arcade-style slot machines, electronic table games (ETGs), volatility-specific game formats, merchandising packages with next generation signage and sound… the list is truly endless. The challenge for the operator is determining which of these innovations is best for their gaming floor, not an easy decision considering slot machines and table games remain the main economic engines for most casino properties, and a misguided decision could potentially cost both money and customers.

Fortunately, a session at Southern Gaming Summit (www.sgsummit.com), which was held last month in Biloxi, Miss., addressed the evolving game technology landscape, and a panel of casino operators and manufacturers touched upon tech-influenced products and trends and their impact on the gaming floor. This panel consisted of Warren Davidson, director of slots, Coushatta Casino Resort; Kathleen McLaughlin, president McLaughlin Gaming Group and head for marketing on behalf of NOVOMATIC Americas; Daniel Schrementi, vice president of gaming sales and marketing, Incredible Technologies; and Tarzan Treadway II, director of slots, Hard Rock Hotel & Casino Biloxi. Below are some edited excerpts from this session, organized by subject.

Impact of technology on slot development…

Schrementi: The expectation of players has become much higher as the pace of technological change has increased over the years. The first time a slot machine featured an interactive bonus, it was unique and novel to everybody. Now it is not. The first time a slot showcased an HD screen, people flocked to play it. Now that HD screens are commonplace, it’s no longer a primary attraction.

This puts a lot of onus on us as manufacturers to try figure out ways to give somebody a gaming experience that exceeds their expectations. Our response has been to create games that offer a total package of hardware and software innovation—large screen video formats with strong graphics and audio and games that feature math with legs to boost time on device. I think it has been this type of combo—unique technology combined with good math—that works. Today’s savvy players will accept nothing short of that at this point-in-time.

Davidson: What I’ve seen is that the cabinet is becoming more and more important to a game’s acceptance and success. Like most of my peers, I used to lament when a manufacturer would come out with a new cabinet since it meant I would need a new library of games and I would have to manage that process, thinking what can go into what box. But my attitude has changed… now I look forward to new cabinets. The reason is performance; you just don’t seem to be able to get that great performance off of an old cabinet after several years.  

The exciting cabinets manufacturers are coming out with… they really help liven up the casino floor. As we worry about people doing more gaming at home and online, we have to make sure the whole casino experience is exciting, and the gaming cabinet being big and bright with lighting is part of that. It’s something they can’t get at home.

Treadway: A lot of what is going on with cabinets has to do with society as a whole and our shrinking attention span. It is not just gaming, it is everything… nothing seems to last very long. There is a reason our iPhones are being upgraded every two years or so; it is not because they no longer function, but because we have a short attention span. We want to newest, coolest thing right now.

The growing popularity of electronic table games (ETGs)…

Davidson: ETGs are making a splash in live gaming floor areas. I would predict that in the next five years or so, most big casinos will be using dealer-aided or live dealer ETGs to help serve the low-end market better. We just haven’t been able to make a profit on the low-end table games with, say, one table and a dealer dealing $5 blackjack. But if you have a live dealer dealing to 30 or 40 players at stations with multiple game options, that changes the dynamic and makes low-end play economically viable.

Treadway: ETGs can help get some of those folks that don’t have the money to sink into a $10 minimum hand table game. You can attract this type of player a little less expensively with an ETG, the guests can get some of the experience and knowledge to play a game that maybe they would be uncomfortable with playing live. That is the balance we have been trying to strike and it has been working fairly well for us.

McLaughlin: What NOVOMATIC has found really interesting about the U.S. market is the constant demand for ETGs, which was not a company focus initially. But now NOVOMATIC is in the process of rolling out its line of ETGs to U.S. operators. ETGs are a great way to maximize revenue per square foot on the gaming floor. It is a pretty exciting concept.

The future of skill-based gaming…

Davidson: Some people believe skill-based games are the future for slot machines, but I think that really depends on your market and core customers. In the Las Vegas market, where a lot of younger people visit the resort but don’t make it to the gaming floor, skill games make sense, and I applaud the operators that have installed them to try bring more traffic to the slot area. But in our market, I can tell you that players are not asking for skill-based games. And the ones we have tried so far—the pseudo-skill concepts where it looks like skill is needed but really is not—have all failed miserably.

However, there may be a future with the skill-based games that feature communal pay and allow players to wager against each other. There may be some incremental revenue there, and when these games are approved I may give them a shot off the slot floor and let the players decide if they are worth it. But in our market, skill based will never compete with a slot, it is not the same play.

McLaughlin: Skill-based games still have significant limitations. At the end of the day, these games have to work within a hold percentage, and skill has no impact on that.

Schrementi: We have seen so many ups and downs in running tournaments for our video games to realize skill is a scary thing. That said, we hope it happens, but we will not be the ones doing it first… you need a large R&D budget to weather that storm on the manufacturers side.

Game volatility solutions…

Davidson: Players with smaller bankrolls often search for low-volatility games, machines where they can sit and play for a while. However, most of the time the volatility of a slot machine is not readily apparent to the player. So we now use a mathematical formula to divide our games into low, medium and high volatility. We have put this information into our slot search on our website and in our mobile app. Now our players can sort our games list by low, medium and high volatility. 

We also train our employees to use this tool. I think anyone who has worked in the business has had someone come up to them and say, ‘I don’t expect to win big, I just want to play for a while.’ That is someone who is crying out for a low-volatility game, so we make that a little easier for them to find.

Schrementi: When we first came to the casino gaming market, operators wanted high-volatility games because that had been what was most successful for them. But they’ve discovered it’s hard to transition the high-volatility player to something new—they have been playing the same machines for the past 10 years and that is what they will continue to play. Meanwhile, the lower-volatility player showed they were often willing to bet over $1 a spin on certain games, essentially making them high-volatility players. If you look at the most popular games over the last few years, they have all benefitted from this phenomenon.

So now operators look at low-volatility games in a new light… it’s now a sweet spot, and low-volatility players can generate high-volatility wins.  

McLaughlin: When NOVOMATIC came to the U.S. four years ago, they initially brought over games that were tried and true, extremely high-volatility European models of games. They have since added the low-volatility games everyone here is talking about to provide a more diverse product experience. But I think it was an eye-opening moment for the parent company… what worked elsewhere does not necessarily work in the U.S.

Merchandizing the gaming floor…

Davidson: Lighting is a big factor. I think one of the best cabinets on the market is the Scientific Games’ Pro Wave, and that is because the edge lighting is so vibrant. You can tell from 100 yards away that a person is in the bonus, which attracts other players. Lighting is big and it seems you can never get the games to be too bright. It attracts people like a floodlight.

Schrementi: We have adopted the theory that you need to view the casino as a retail environment. We view our products a retail package, and literally treat cabinets, hardware and software as if it is a packaged good on an aisle. The reality is operators really need to retail the hell out of their slot floors; it seems common sense in today’s gaming environment, but a lot of people still refuse to take this route.

Gaming floor innovation going forward….

Treadway: I really wish gaming manufacturers would devote more of their R&D budget to creating more games that appeal to core gamblers. My three-reel stepper products are getting old, and I am really not seeing what I want in a replacement.

Schrementi: We have an outlook on this that is probably very different to the rest of the gaming industry. For us, innovation in this business is going to be small tweaks over time. A great idea can be a very small thing in a new game that ends up changing the industry.

My best advice to the operator community searching for the latest slot innovation is to look at core games. The guys who are really trying to innovate treat the core banks, the for-sale games, as proving grounds. It is the track to try out new technology before putting it in the racecar. I recently told an analyst on a call that if you want to know which slot machine company to invest in, tell me how that little core game they just installed in a bank at a large casino is doing. What is the clever idea in that game?

Davidson: I think the cabinet wars are really heating up now, and I am excited to see it. Every time I put something new on the floor that looks markedly different from everything else, it really gets a lot of attention.

I would like to see slot manufacturers improve social marketing technology at the cabinet… imagine a cabinet that when a customer slides in a card, personally welcomes the player while reminding them of their last big win at the machine by showing a short video of that event. Player’s already assign personalities to their favorite machines, this would just be taking it a step further.