Skill-based games are still in their infancy and just as with any new concept, it will take some time to see their true impact on the industry. Yet our own internal research suggests that casinos strongly believe these games could solve their relevance issues with emerging generations.
First off, the term “skill-based” is reportedly sparking a bit of confusion among folks both in and outside of the casino world, but that’s a topic for another time. For the purpose of this article, skill-based games are those that fuse gambling (such as slots) with entertainment elements and participatory features (similar to arcade and video games), allowing players to affect the outcome of the game with their skills.
Terminology aside, there’s been some recent press covering the slow adoption of skill-based games into the casino industry and, in truth, some of it makes a good point. High barriers of entry and lengthy regulatory processes, along with the risk of entering uncharted territory, have kept all but a handful of manufacturers from progressing in the space. In turn, not many skill-based games have been developed and very few have been placed on casino floors, where they can garner player and operator feedback — limiting available data and success metrics.
So what do we need for the industry to adopt skill more broadly? Time. Time to get through regulation, market test, develop, adjust and repeat. Time to turn the eagerness we’ve seen from casinos into placements and data that can inform future processes. Time to educate casinos and their patrons on skill games, how they work and what they can offer.
The former two points are being figured out by regulatory processes and manufacturers, but market education is our own hurdle, and it’s much higher. What is the best way to successfully incorporate skill games onto the casino floor, and how can we ensure that manufacturers, casinos and players all benefit from this evolution? To determine the best path forward, we took a look back.
The successful introduction of video slots, and the process through which they got to their prominent place on the casino floor, could help us determine the best path forward for skill-based games, and ensure that the casino industry effectively evolves with the players.
In the late 1990s, it took several years for ticket-in/ticket-out (TITO) printers to replace coin hoppers. With players reluctant to give up the feel of the coins, operators had to push the printers out over an extended period of time so that, eventually, they became commonplace. Industries take time to implement new concepts and processes, just as the public takes time to accept them, but the wheel (mechanical or virtual) doesn’t need to be reinvented.
Before the introduction of video reels, playing slots was like a historic experience—put the coins in, pull the handle, three mechanical reels are triggered and your outcome is revealed. But as technology advanced and the novelty of one-armed bandits wore thin, players sought a more engaging experience.
Video slots changed the industry by changing expectations. But just as before, those expectations didn’t change overnight. People were slow to give up the mechanical wheel and accept a virtual one in its place. But video slots did a number of things right, which we can learn from and apply to the current journey of skill-based games.
First, they were attractive. Even though there was a learning curve, the games enticed people with flashy displays and popular themes. Video reel technology provided flexibility to both players and operators through an increased number of lines and lower denomination wagers. With flexible math cycles, bonuses also came into existence. Operators could now offer life-changing wins from low denomination slots, providing new and exciting opportunities for players.
With wager flexibility and the potential of bonus spins, video slots took on more of an episodic style of play, allowing the games to engage players for longer periods of time than traditional slots. Players had more fun and operators saw increased earning potential even though the games offered lower denomination wagers.
Numerous manufacturers working in the space fueled innovation and pressured the industry to progress. During that time, the product offerings quickly evolved as well. By incorporating new technologies and processes, games gave players the sense that they had an effect on the outcome based on the choices they made—giving video slots the allure they needed to make a permanent mark on the industry. But experiences on a video reel, no matter the theme or bonus round, are all essentially the same, and the next generation of gambler brings different gaming preferences to the table.
ENGAGING A DIGITAL GENERATION
There is a very identifiable shift in the demographics of digital natives and previous generations, a fundamental shift that the casino industry hasn’t encountered before. Attracting new demographics is important, but even if the main demographics don’t change and the industry continues to serve the 55 to 75 year-old, the preferences of that person are already drastically different from even a few years ago. Many of these players enjoy mobile games and are now seeking an enhanced gambling experience that mimics some of these play mechanics.
The variety of games and directions we can go with skill is vast and 67 percent of casinos already agree that skill-based games could increase their appeal to new generations of gamblers. With skill, we elevate the entertainment value for the player, and the operator naturally benefits. We can offer players the ability to actually influence the outcome, with a variety of math variations (including exciting bonuses) and real episodic play. All of which increase engagement, player investment and time on device—creating a win/win situation for both the player and the operator.
If we follow the path that traditional and video slots pioneered, and implement the practices they used to succeed, we can progress casino offerings and create the new, engaging type of experiences that these generations seek.