Skill-based slots have been in the field for about a year now, and while they’re not lighting it up in terms of the win-per-unit-per-day metric that slot managers primarily live by when evaluating new games, they are hitting the mark on a more strategic goal: attracting new and younger players.
The two suppliers everyone keeps their eye on in this segment, GameCo and Gamblit Gaming, are reporting similar findings: The people playing their games skew younger, much younger when compared with the traditional 55-and-over demographic that accounts for the bulk of play on traditional games. For that reason alone, these suppliers caution against drawing early conclusions based on daily win data or six-month trials that end in the removal of machines, as was the case with GameCo’s Danger Arena product in four Atlantic City properties last year.
“People who are out there saying skill games aren’t going to work and they’ll probably fail, they’re just misinformed if I can be so blunt,” said Eric Meyerhoffer, CEO for Gamblit Gaming. “This thing just got started and I would challenge them to look at our current installations and who the player demographic is. There is nothing that anyone has been able to with slots that has been able to pull in players in their 30s and early 40s, not to mention players in their 20s, which is a third of all our players now. It’s going to work, it’s working and it has a bright future.”
Both companies have in the neighborhood of 40 to 50 games in jurisdictions around the country. Those machines are providing data based on tens of thousands of plays and the companies are comfortable in the quality of these samples. “We’re pleased,” said Meyerhoffer. “The biggest things is that we can engage GenX 40’s as we call them and Millennials as our number one group. We can engage them, they will play and they will gamble on these games. That’s a major proving point. And the earnings rates are acceptable at this point; we will be able to get results to where they are comfortably earning their way on any floor. In some ways it’s comparable to electronic table games (ETGs) when they first got going.”
Gamblit has two platforms in the field: Its Model G, a four-seater module which promotes social interaction, and the TriStation, a single-player game that was launched post-G2E. Both games are tracking about 15 to 20 years younger in terms of the player demographic, and that’s based on thousands of samples taken from all players. “We have pretty much an inverse curve to traditional slot players, which is great; that’s what we wanted,” said Meyerhoffer. “The largest single group of our players is under 30 years of age. Second is players aged 30 to 35 and the smallest group is aged 50 and older. Sixty-seven percent of our players are under the age of 50, and maybe higher in the case of the tri-station. That’s one major box we can check.”
In terms of results, The Model G, not surprisingly, fares better when more people sit at the game. When a couple plays, the session don’t run as long as when two couples or three or four different people are playing. Earnings range from 35 to 40 percent of a typical electronic gaming device to the 50 to 60 percent range. The TriStation is earning about 2.5 times better than the model G, simply because the on-boarding is a lot easier, according to Meyerhoffer. “In looking at the underlying analytics of the TriStation, we should be able to make that competitive with a typical standard slot machine,” he said. “Even though that’s not necessarily what we lay out as a goal, it’s important for the economics of the operator.”
TriStation games are banked; prizes are established before play starts and then players test their skill to win the prize. The units are a six-title multi-game platform. The games range from casual fun such as a word spelling game to more intense games like a zombie shooter. The games with slower game cycles end up with lower earnings rates; Gamblit is going to adjust those so the earnings rates pull higher, Meyerhoffer said.
THE RIGHT STUFF
GameCo reports similar findings from its first year out in the field. The company offers three game genres: Core games, typically played by younger males; casual games, typically played by older females; and mid-core games. “For us, 60 percent of our players are between 25 and 54 years old, and what’s great about that is the majority of our players are younger than the typical slot customer; the average is 35 to 40 years old,” said Blaine Graboyes, co-founder and CEO. “But we’ll absolutely have players, particularly on our casual games, like a Match 3 or a puzzle game, who are your typical slot customer, like a 55- to 65-year-old female who might play casual games on her tablet or smartphone and now sees similar games at the casino.”
GameCo was first-to-market with skill games, launching in Atlantic City in November of 2016. The company had machines at three Caesars properties plus Tropicana, and they were ultimately removed in May of 2017, a trial run that that Graboyes views as a valuable learning experience for all involved. “We’re a technology company and the key was learning,” he said. “In the tech space, you put a product out, you learn, you iterate, you improve and that was absolutely our intention with the trial in New Jersey. I think that we learned a lot about industry perspective and expectations.”
The key takeaway for GameCo was the need to right-size a deployment; having the right kinds of machines in the right place and the right marketing to support it. “We often today get orders of eight or 10 machines from a property,” said Graboyes. “We recommend three, four or six machines and having a mix of titles that appeal to different audiences. Our first game, Danger Arena, was very much oriented toward what we would call a core gamer. It was a first-person action game similar to things like Call of Duty with an Xbox-style controller and appealed to an audience that is very much at the casino but isn’t your typical slot or casino floor audience. Having a mix of games is critical where you have enough machines to attract an audience but not too many where you’re diluting the win-per-unit. Today we have casual games, mid-core sports games and core games, each appealing to a different audience.”
Marketing is critical in Graboyes’ opinion because, if the games are to attract new players, results will only be optimized through customer outreach. “We have not found a silver bullet, but I do think in 2018 we will find solutions that are repeatable and scalable,” he said. “We do know that we have to start with the basics: signage, in-room and on-property videos, social media. Another component is educating casino staff. It’s not just a new product, it’s an entirely new customer. Here’s what this new customer cares about, here’s what they’re thinking, here’s how to communicate about the game, get them onto it and answer their questions. One of the ways we support that is with brand ambassadors, Often for the first few weekends at launch, we will staff people who are both knowledgeable about the games and authentic gamers themselves directly at the casino. They look like the target audience and they play Xbox and PC games. They’re able to interact with the customer in ways the casino staff isn’t. We also bring in influencers, from eSports, the Twitch community, video gamers, partners like Steve Aoki; having people who are authentic is critical.”
WHERE THE GAMES ARE
Nevada and New Jersey are the only commercial jurisdictions with regulations covering skill-based slots at present. The other regime in place is GLI’s standard 11 3.0, which has opened the door to skill-based slots in as number of tribal markets. Gamblit has about 40 games in the field, including the Model G at individual properties in Oklahoma and New Mexico; five Caesars properties in Las Vegas; the MGM; and The Venetian. TriStation is at MGM, The Venetian and Planet Hollywood. Meyerhoffer expects the number of games to be in the “high hundreds” by the end of this year.
GameCo has just under 50 games on casino floors right now. The games are in New Jersey, Connecticut, Oklahoma and Chile. GameCo is also about to go into California, Florida and cruise lines and will be expanding into other U.S. jurisdictions, Canada and elsewhere internationally in 2018, Graboyes said. Long term, he said independent slot analysis places the size of U.S. skill market at anywhere from 25,000 to 50,000 machines in the next 10 years.
The regulatory piece will of course be a necessary prerequisite to growth. Pennsylvania is the next big jurisdiction to watch, according to Christian Fisher, a gaming attorney with Fox Rothschild. The state passed Act 42 last October, which amends the state’s Racehorse and Gaming Act, and in that amendment, they included a definition of a skill slot machine and a hybrid slot machine and essentially left the details to the Pennsylvania Gaming Control Board to govern their implementation and operation.
“It will be interesting to see whether they follow the Nevada/New Jersey framework and try and make it consistent with other jurisdictions, or the Massachusetts approach, which was to adopt the GLI 1 3.0 standard and then make revisions to that it sees fit,” said Fisher, who added that the pace of regulatory adaptation to skill games across the country will depend in part on how successful skill-based games are in casinos.