Editor’s Note: In the print version of the feature article on “Gaming Technology” that appeared in the September 2012 edition of Casino Enterprise Management, on page 29, there was an error in the pull quote that was used. The quote was from Guenter Bluemel, SPIELO International’s VP of content management, but the headshot next to it was of Don Doucet, SPIELO International’s VP of business strategy and development. We sincerely regret the error and apologize for any inconvenience or confusion. The error is corrected in the article below.
Technology changes so quickly these days that it’s hard to keep up, and manufacturers continue to wow us with new innovations and features. On a mission to talk tech with many of the leading providers of it in the gaming sphere, CEM did Q&A with suppliers from various aspects of the industry. On a broad level, we discuss how gaming technology has evolved, what might be to come, why many manufacturers have moved from traditional land-based game offerings to interactive platforms and what some of their flagship services and products are behind it all.
CEM sat down with Joe Sigrist, VP of product management at IGT; Larry Pacey, EVP of global products and CIO at WMS Gaming; Julius Patta, CTO at Aristocrat Technologies Inc.; Kevin Parker, Project Manager at Acres 4.0; Louis Castle, chief strategy officer at Shuffle Master Inc.; Bryan Kelly, senior vice president of technology at Bally Technologies; and Guenter Bluemel, VP of content management and Don Doucet, VP of business strategy and development at SPIELO International.
The conversation was intriguing, so follow along below to see what they all had to share.
On a broad level, how has technology in the gaming industry advanced over the years?
Joe Sigrist: The No. 1 trend that’s occurred is that EGMs are now connected to one another and connected to the casino management and back-end systems in a real-time way.
Larry Pacey: All that really matters is the game experience. Technology is simply just the platform by which we deliver great games. We talk about technology because it allows us to communicate what’s different. What we’ve seen as advances are high-resolution displays, gaming devices that can run full-motion video, cashless solutions, community gaming and sensory immersion that take advantage of networked multiplayer or 3-D graphics and sound.
Julius Patta: I look at the underlying core technology, advances in networks and the advent of the Internet, or global connectivity.
The heart of gaming machines today is an advanced CPU/GPU assembly on par with the most leading consumer electronics trends. The raw horsepower of these devices is capable of presenting the play with rich multimedia experience of the quality they see in the most advanced consumer console games. When contrasted with the proprietary, in-house technology even a few years back, the gaming industry is finally catching up with the times and advances in computing hardware technology.
And finally, the Internet, Facebook, apps, smartphones and tablets have changed the way we consume entertainment and are causing an expansion in gaming technology. A game that was played on a regulated gaming device in a casino can now be enjoyed on your favorite smartphone—a non-regulated consumer electronics device—anywhere. Tremendous opportunities lie in bridging the regulated world of gaming with mobile gaming, all underpinned by new software and hardware technology.
Kevin Parker: Technology advancements in our industry have been very rapid, moving from mechanical machines to electro-mechanical and the server-based games of today. The games, however, have come full circle. Several of the major manufacturers started in the arcade business, and now we are realizing it may be necessary to go back to those roots to win the attention of the next generation of gamers. As an industry, we’ve begun to embrace the concept that leveraging the technological advancements produced by other industries is a positive, and that the utilization of these advancements and regulatory compliance are not mutually exclusive. We cannot build an open protocol system on proprietary technology if we want to compete with the Googles and Zyngas of the world, nor can we ignore the fact that our regulatory necessities have been slowing down our ability to adapt and innovate.
Louis Castle: Given the longevity, stability and security standards required of gaming technology, the industry has traditionally been behind the cutting edge. I’ve seen that gap narrow over the past few years as more technology has been introduced into the gaming industry, and technology as a whole has reached a point where anything even less than cutting-edge can be stunning when used efficiently. Standards, modularity and interoperability continue to help make the industry more efficient, even as those trends threaten to displace legacy systems with large installed bases.
Bryan Kelly: On a macro level, one thing I’ve seen is credit play, where you put money in every time you spin, and money comes out—coin in, coin out. Then we were able to convince the industry to move from coin in to credit meter. There was a huge technological switch. That’s kind of the first wave of people moving toward a currency meter, versus always seeing their win and the cash tray.
Then you move toward wide area progressives. That was a mega-trend thing that is happening now. Then the move toward bill acceptors instead of coin in, so we were able to accept more money. And moving toward TITO was a huge paradigm shift. Then we start looking at a move from stepper to video. Then, you start seeing the trend toward bringing player marketing right to the point of play.
Guenter Bluemel: In the slot machine world, we’ve all seen and heard the clink of coins hitting a hopper replaced with the whirl of an outgoing printed ticket. We’re leaving the world of tedious button panel foils for clean and easily-convertible digital button decks. Casino operator “Yesterday’s topic of server-based gambling is today’s iGaming.” — Guenter Bluemel, SPIELO VP of Content Mgmt
“Yesterday’s topic of server-based gambling is today’s iGaming.” — Guenter Bluemel, SPIELO VP of Content Mgmt
efficiencies and player entertainment have greatly increased with technology.
Generally speaking, what we’ve seen over the last years, and what we will continue seeing in upcoming years, is the establishment and usage of “outside-of-gaming” proven and accepted technology, especially when it comes to the improvement of play experience—increasing the entertainment value and/or improving operator efficiencies.
What was the first technological innovation that really wowed you that you can recall?
JS: Our MLD technology. The way the games operate based on our 3-D multi-layer display technology is really unique and excites players, and we get great feedback about the way games are interacted with from a player standpoint.
LP: Our original BLUEBIRD cabinet in 2003 was the first to offer full-screen animation and high-resolution, 3-D graphics. When you evolve that with Sensory Immersion and the Bose sound chair, as WMS did, it becomes a really magical product. A lot of people said, “that’s not really a gambling device.” Fast forward eight years, and almost every new product has a sound chair. It must have been pretty important.
JP: The mobile phone changed the world. When it did, we did not foresee it being more than a phone, but today, it is effectively a personal mobile existence device, where underlying smart technology, combined with networking and beautiful physical execution and aesthetics, have created new entertainment channel for a global connected community.
KP: Social media management tools. These innovations have revolutionized the way we communicate with our players and have allowed them to help guide us down the development path. We can come up with what we believe are the coolest, sleekest games our own minds can design and find that the end-user, the customer, is largely uninterested. If the goal is to grow our industry, we must ask patrons what they want and try to provide it for them. The addition of social media, and its ability to allow the player to offer immediate and timely advice on the products we are designing, will save our industry countless hours of engineering and many millions of dollars in research and development.
LC: At Shuffle Master, I was blown away by the speed and reliability of the newer shufflers. It’s a shame people can’t see the marvel of engineering that produces random cards. It is far beyond what most would expect. External to Shuffle Master, I was really impressed by the large clear displays, touchscreen interface and incredible sound of Bally’s Michael Jackson slot. It was not one specific technology, but how they all came together to create such an entertaining experience.
BK: You know the biggest one—and we worked really hard on this, so I kind of have a personal stake in it—is the iVIEW display manager technology, where we can take over the main screen of a slot machine and deliver this unbelievable marketing at the point of play in bonusing and customer loyalty. I really think that’s one of the biggest impact technologies that’s going to change the industry.
GB: What immediately springs to mind is the introduction of the bill acceptor. More recently, however, it’s the high-resolution art and game animations that really make me say “wow.” There is real beauty in some slot game art, and high-definition, color-saturation monitors have given this art a place to shine like never before.
How do you think the technology in our industry is most different than what is in other industries?
JS: Unlike a lot of industries, there’s a really important linkage between the back-end systems and the player. The need to excite the player, interest them, get them to be entertained and have a great experience with the technology that we bring. We all can get enamored by technology, but we can never lose sight that if a player is not excited and having a good time, the technology doesn’t matter.
Is there any difference in technological advances in different markets—say in the U.S. versus Europe or Asia?
LP: The markets have different requirements, but the basic components of technology have much in common. What differs is the rate at which markets adopt the technologies and the packaging. For example, lottery markets around the world have very sophisticated networking that integrates remote venues; the casino space, on the other hand, has an entirely different architectural requirement to network the EGMs.
For us, what’s most important is making sure our platform is adaptable and forward-looking so that we’re ready for a new market or new product or new technology.
JP: In Asia, video gaming is a narrow but growing segment of the gaming industry, with idiosyncrasies in player preferences local to their markets. Moreover, mobile games and their consumption are far more prevalent in Asia that in the U.S. This creates demand for very different gaming and systems solutions.
European markets are highly fragmented and regulations range from non-existent, through gray, to strict. There is a vast “street” market with more than a million devices, an aging technology pool of inexpensive equipment. The casino market is also highly fragmented, small and highly competitive. Europe is currently the global region that leads in the deployment of Internet gaming, owing thanks to several nations that created a regulatory framework and a licensing scheme.
KP: Certainly. The use of Internet-style gaming in Europe is a perfect example. The Europeans have realized that Internet gaming is a means to increase the tax base and have approached its use as an opportunity rather than a liability. There are regulatory necessities that must be provided to ensure the games offered are fair and above board, and they have provided a minimal framework for these needs. We as an industry need to work with both the regulators and our state and federal legislators to educate them on the security features that are available in technology today. This will lead to long-term gains and the regulatory nimbleness that we will require moving forward.
Where do you see the gaming industry headed in terms of technology down the road, either in the next five, 10 or 20 years?
JS: Trends like online gaming in the U.S. and social gaming are in their early stages, especially as it relates to casino wagering, but will be very important to the casino industry over time. I think there’s a great opportunity for IGT to help lead the industry in how it connects to and takes advantage of the growing trend toward social gaming and online gaming, especially with our background in online and mobile gaming.
LP: All you have to do is look at your TV and phone to realize that a slot machine needs to do the same thing. We’ll see continued convergence with online and casino gaming with more networked casinos and web connectivity.
JP: Casino floors and routes are going to continue their transformation to support networking and high bandwidth, to be able to download and configure content scheduled or on-demand. The business models are likely to evolve toward subscriptions, packages and channel pricing. The systems business will evolve and embrace modular, app-like architecture, allowing for best-of-breed implementation. Mobile consumption of gaming entertainment will become a regulated and social reality, and the advance in smartphones and tables will continue. Presence and game content, the player experience, however, will still be king, and the best products, regardless of channel or device, will prevail.
KP: Cloud-based technologies and better communication abilities will allow gaming opportunities to be offered to virtually any person on the planet. As an industry, we must actively provide the safeguards and monitoring tools that will allow this expansion in a safe and responsible fashion. Governments will need to have the ability to control the content and the tools to adequately track the play for taxation purposes.
It’s hard to imagine what technologies may change the game in 20 years. That said, for the impact to be real, the rewards will be based on our human desire to earn rewards. Games of chance will always have that in common. When I step into my hologram room and engage in strategy games with Einstein, beating him and Churchill over stogies and scotch, I’ll tip extra knowing the game was based on my personal preferences.
LC: I suspect the gap between cutting-edge hardware, software and development processes and the gaming industry will continue to shrink and, in time, the industry will have fully embraced new technologies such that worldwide innovations may first appear in gaming.
BK: I would say the convergence between online, mobile, social on the casino floor. Getting those technologies integrated so that you can both provide gaming content—regulated gaming, free play gaming—and marketing this content to the people across all those channels. I also see a huge amount of convergence between these online, offline, cloud, public and private cloud, integrated systems to allow the casinos to effectively extend their business off the casino floor.
GB: The gaming industry tends to mimic what works. If the current crop of games with arcade and console gaming elements succeed, we’ll likely see a portion of the slot floor resembling elements of those. Hardware-wise, manufacturers will likely continue to offer more video enhancements to the player. More and more monitors, with multi-touch, 3-D, and other visually immersive configurations will march onward, all targeted to improve the entertainment value of the products.
And even though the years-old promise of a server-based world is taking longer than anyone anticipated, that front will start to move faster. Yesterday’s topic of server-based gambling is today’s i-gaming. SPIELO International’s mission for our whole business is to have more people consistently playing our games than ever before, anytime, anywhere. The integration of the two businesses (land-based and interactive) is designed to make this future vision a reality and to deliver a superior gaming experience to all of our customers.
Let’s talk about new platforms that have recently evolved, such as social and interactive gaming. What are the biggest differences and what major points do we need to remember?
LP: When we look at what’s happening online in social, mobile and casual gaming, it’s like three different worlds, with diverse technology requirements and customer needs. [Our Williams Interactive division] was many years in the making, and today we can deploy a comprehensive range of leading solutions to meet our customers’ current and evolving needs. It’s about creating a connected product that integrates social, mobile casual and offers interoperability. I think connectivity/integration will be a big piece of the technology pie going forward.
JP: In social gaming, players are entertained, they seek interaction and recognition in a community, they seek accomplishment and status. And they are willing to pay for it. It is the “insert coin” business model, all cash in, no cash out. A player’s reward is the community, status and experience satisfaction. It is not regulated and does not need to be: A player’s willingness to pay for entertainment depends on quality of entertainment, not the promise of win money in a game of chance.
Interactive gaming is gaming, in its most convenient form, anytime, anywhere. The player seeks both gaming entertainment and financial reward. It is playing games of chance, and it will benefit from regulations to a) protect the player, b) protect tax revenue and c) keep the business free of criminal behavior.
Both areas present tremendous opportunities, but require different product interpretations. And of course it all rests on technology: software platforms and the creative talent of our game creators.
KP: Social and interactive gaming popularity is based on its very name. It offers us the ability to meet the basic human needs of social interaction through game playing and recreation in the security and comfort of our own homes. There are few limitations placed on the user, and they can play without significant cost or repercussions. There is also the element of “virtual rewards.” Offering the player rewards that are only relevant in the virtual space still has emotional value. It feels good to win, meet achievements and be recognized. That said, the live casino environment offers a different feeling of reward and risk. There is a different sense of urgency to play in person, along with social interaction and feelings that are impossible to achieve in your living room.
LC: The major point to remember is that new platforms are essentially new businesses. They don’t behave in the same way as the old business and will not be optimized for the gaming industry until they are embraced for their unique qualities. For example, simply placing a real money game for free online is not leveraging the medium and diminishes the core value of the physical game. When the interactive and networked nature of the medium is fully explored it can take that experience to an entirely new level. But first the platform and its consumers need to be considered for the unique values they offer.
BK: If we talk about social gaming in particular, I think the mechanics are proven to create very loyal players. Look at Farmville and those types of games. They help players bond with the game and have a more vested stake in continuing experience. This is great for skill games, and I think many of these mechanics would be helpful in the traditional gaming experience if regulators were to allow for more chance-based games. The trick is that with these types of technologies, you have to cast a wide marketing net to capture a very small percent of these players that will play these social games.
Is there a big market place for that in the long haul if Internet gaming happens? It’s debatable. Time will tell the viability of that marketplace, and it will be in large part dictated by which regulators approve as we move to wager-based gaming.
As this area continues to evolve, might there be any unforeseen challenges that come up in how we operate?
JS: As play continues to expand and players become more comfortable playing online, we can’t predict all the different ways players will want to play online versus in a casino. As an example today, the way someone plays casino-style games in a social environment, for instance with our Double Down subsidiary, is quite different than the way those same types of games are played in a casino. I think we have to be very mindful of monitoring how people want to play, how they want the games to be delivered to them, how games actually do, and how success is measured not just in a sense of dollars, but in communal leaderboards and other social elements. These things are going to have to be watched and we’re going to have to make adjustments as the industry expands.
LP: I think it’s the interoperability capability, which has not yet been perfected. However, over the last few years, WMS has made great strides in ensuring that what we provide does interact with other systems. That level of integration is going to be key in the future. We want to work with other [companies] to get our entire interactive and product portfolio to interact in the same manner.
What are some of unique challenges and opportunities with the various new forms of gaming?
JP: To avoid mixing apples and oranges, I’ll answer like this: the Internet connects you to all of this. Playing for fun, socially, can still involve money, because some games will ask you to pay for certain experiences, to purchase additional credits, bonus stages, virtual goods, etc. This is perfectly legal, provided you are not offered the ability to somehow take the outcome of your gaming experience and turn it into real money.
Opportunity for operators lies in the tremendous reach of social networks. In theory, the entire connected world could be your customer. If you know how to create a great social experience and convince people to pay you for it, you have a blockbuster business.
While I am bullish on social gaming, I have a mixed opinion on the opportunity of regulated Internet gaming. The revenue will be incremental, but marginal. The competition will be all the other operators’ brands, and their loyalty/player management techniques to protect their players. Moreover, some manufacturers will likely enter the B2C business of Internet gaming, and compete with their customers. Only those with the best content, offering the best experience, and the best player management will truly benefit.
KP: Over the past 18 months, we have seen numerous gaming manufacturers convert some of their most popular slot games into play-for-fun apps available for download on mobile devices. We’ve also seen a number of those same manufacturers enter the Facebook app space with virtual casino offerings.
Almost all of these new forms of gaming have social components, but they have yet to truly figure out a way to capitalize on the platform successfully. One of the greatest challenges we face with this new kind of gaming is monetization and creating a compelling enough story and rewards to get those online players actually into the casino.
What is your own company doing in the interactive or social gaming arena, and what have you done to get it operating functionally?
LC: We have built our own interactive platform that offers legal real money and free-to-play games on embedded web play, social media and mobile devices. Leveraging as much similarity as we can between the platforms while recognizing the substantial differences between them has been the biggest challenge.
JP: We are positioning to provide our customers with the tools to compete in both the regulated Internet gaming space, in and in the mobile social gaming space. We are already connecting our customers to the Internet. Using our nLink™ and nLive™ solutions, casino operators can immediately get an online presence and connect their existing customers to the internet. This gives them an immediate presence, a marketing advantage. We provide the tools and the technology infrastructure the customer provides the brand and marketing talent. We have also begun to bring our game brands to the mobile social space: We are increasing awareness in Aristocrat game brands, we are building the player desire for these games their favorite casino. Players can visit the Apple App Store and find over a dozen Aristocrat slot titles.
Don Doucet: We have a substantial interactive business. With G2, SPIELO International has the largest and most experienced i-gaming group of the major land-based providers. We’ve been offering interactive solutions since the mid-90s, and we have 800 dedicated i-gaming professionals.
Do you see this area expanding, and if so, how?
JS: The good news is that this area of online, social and interactive, is in its early days, and that’s going to continue as regulations change, the industry evolves and players become more interested in this type of gameplay. What’s really important though is there are some exciting things that are on the casino side that are just starting. The communal play aspect, for instance when I’m with my friends at a casino and we get on a bank of machines and these machines work together to provide a communal experience whether in bonusing or the overall success of how the team works, is a new, exciting way of expanding the industry.
The other way gaming is expanding is through bonusing applications and offers. If you think about picture-in-picture technology and our Service Window, and is very much about how to continue to excite the player while they’re playing. That’s the way these offers and bonusing applications can easily be presented to the player. All these things can contribute to new opportunities, expanding play and bringing new types of players to the casino.
JP: Both will grow as additional avenues for operator/player interaction. And they will be necessary, as no operator could be seen not offering services through these channels. However only through innovation will someone achieve a dramatic shift and expansion in this business. Think of the recent past: Through innovation, Zynga turned social gaming into a multi-billion dollar business. With regulation, the ability to run away from the field is a lot tougher. It is my main reason for believing that the unregulated global reach of social gaming is not yet exhausted of opportunities.
LP: Almost four years ago, we launched Player’s Life Web Services, a flexible, scalable, customizable solution that engages players, builds online communities and connects them to the casino brand. Today, WMS remains the only company offering that kind of social online web integration in the marketplace. I don’t even think we’ve seen the tip of the “convergence” iceberg yet.
BK: I see this is one of the big growth areas. Literally a year and a half ago there were these tiny little inklings in the industry—you’d hear customers saying, ’What are you guys going to do with Facebook.’ It turns out now that just about every casino company has to answer to their boss, CEO or board what their mobile, social, Internet strategy is.
What do you see as the next big growth area?
LP: Growth, the way we see it, is helping move the story forward, getting the convergence piece well-articulated and executed. When you look at what we’ve assembled with our Williams Interactive efforts, that’s a best-in-class portfolio that addresses everything from actual gambling to play-for-fun in social, mobile and casual products.
KP: We see this area expanding in the sense that our core efforts are focused on creating a new generation of gamers. This new generation is made up of those who currently don’t find casino offerings appealing and chose to instead spend their discretionary income on the hundreds of other options at their fingertips. We believe that in order for our industry to survive profitably into the next century, we need to capture new audiences. We’re doing that by offering experiences that mimic the entertainment they know and expect from the Internet and consumer devices.
LC: We have excellent growth opportunities in all four of our existing segments as well as our new online segment. The online segment should grow most as a percentage since it is new but I suspect that all segments will equally compete for year-over–year growth once we have an online installed base.
BK: I feel there’s growth in gaming around the world, not only in the interactive space. You need to look at VLTs, both the terminals and video lottery markets, both for the physical terminals and the Internet and mobile market. Lotteries are all trying to figure out how to make money in this virtual space as well as the brick-and-mortar. We see a lot of new market openings—Greece, Canada, Italy and U.S. state lotteries—so I see some large potential distribution channels for both our systems of interactive technology as well as our gaming content, through those lottery-type jurisdictions.
I also see video poker going to be a bigger and bigger thing over the next 12 months in the U.S. There may potentially be some federal legislation in that area. Also, Bally in particular is moving heavily into more gaming operations products. When we see about where we put product out on lease or some sort of revenue sharing deal with the casino, we’re really seeing large growth in that area of our business. There are also a lot of growth opportunities, not just in the online space. We have really creative development teams in our company, but when you add big brands like Michael Jackson on top of it and give those to our game developers, they can do magic.
DD: In addition to the obvious growth in interactive gaming, I predict mobile gaming, and leveraging game capabilities across all channels, will bring about new innovations that will stimulate play and introduce new players to the segment. Additionally, there will be a broadening of traditional offerings, with new game concepts as land-based and interactive gaming converge. These new technologies also provide an extensive array of productivity-enhancing tools for operators.
Is there anything else you would like to discuss, any parting thoughts?
JS: In terms of interoperability and the standards in these areas, all of this technology needs to be supported with exciting experiences for the player as we continue to make their experience even better.
KP: Above all else, the stability and reliability of our products are to our success. Without these seemingly simple features, no matter how exciting our solutions may be, we have no hope of achieving our goals.
LC: Only that the gaming industry is poised for great changes driven by technology and the processes required to harness the opportunities presented. Technology has been a disruptive yet dynamic force in all industries it has touched, and it will continue to be one in gaming.