All Aboard” is a premium slot game launched by Konami Gaming at last month’s Global Gaming Expo, but it also could be an overall slogan for the near future of the Las Vegas-based supplier.
Konami Gaming, the U.S. subsidiary of Japanese video game giant Konami Holdings Corporation, has remained near the top of the worldwide slot market for years, thanks to an R&D staff that has the unique advantage of tapping into the resources of its famous parent company, which is celebrating its 50th anniversary this year.
But what has remained elusive for Konami Gaming is President and CEO Steve Sutherland’s stated goal of cracking the slot market’s top three—of stepping onto the “podium,” as he calls it, as one of the top three slot manufacturers in the business.
Around a year ago, Konami’s top management launched a plan to zero in on that goal. The company assembled a veritable dream team of North American slot supply veterans, tasked with the common goal of taking Konami’s market share to the next level.
“We felt it was time to make a change,” comments Tom Jingoli, Konami Gaming’s executive vice president and chief commercial officer. “We really wanted to bring in a team that had a full understanding of the North American gaming market.”
“The global industry is challenged by the need to appeal, attract and engage a broader segment of the marketplace,” comments Sutherland. “The slot floor landscape is shifting at an incredible rate, and there are a number of things needed with game play, user interaction, and innovative components to reach the next-generation gamer.
“At the same time, operators want slot entertainment that makes sense for their business, which is why Konami is set on delivering superior results, reliability, and return on investment for our customers.”
To deliver that return on investment, Konami has made investments of its own, in some of the top talent in the business.
The first addition was 20-year slot supply veteran Victor Duarte, brought in as senior vice president and chief product and strategy officer. Duarte has a distinguished resume in gaming, both on the casino and lottery sides, having led gaming and content efforts for GTECH, Spielo and IGT, where he was global chief product officer, gaming.
Appropriately, Duarte was hired the Monday after G2E last year. “We asked Victor to look at our entire game side—R&D, and what we were doing internally and externally,” Jingoli says. “But we knew this was not going to be a one-person hire. We had to bring in a team.”
Next to join the team was Greg Colella, another 20-year veteran on the supply side, from Shuffle Master to Mikohn to Bally and Scientific Games. Colella, now Konami’s vice president of games product management, had been in charge of product management for 14 years at Bally before being named vice president of product marketing when Bally was acquired by Scientific Games.
Next came Sina Miri, who had been a product management and R&D vice president at both IGT and Scientific Games, hired as vice president of innovation and strategic R&D; and Sathish Anantharaman, another longtime Scientific Games product development veteran, as vice president of systems software development and services.
“It’s taken us a little while to put the team together, but we’re really happy with the individuals that we brought in,” says Jingoli, “along with the people we had, who have put a lot of time and effort in to get Konami where we are today. We’re very proud of where we’ve gotten organically, and we felt it was time to really invest in resources to take the company to the next level.”
Finally, as the company prepared for this year’s G2E in late summer, Konami’s board made a commitment to invest record resources on R&D, including additional game design studios.
“As a board, we decided to make a significant investment in both games and systems R&D,” Jingoli says. “Everything we’re doing is incremental—none of that investment will detract from what we’re doing today.”
“Konami’s a company I’ve always admired,” comments Duarte. “It’s part of a big, profitable, strong entity, so I thought that this organization always had the potential to grow. And at this phase in my career, that’s what I really got motivated by—trying to grow something. We’re willing to invest, we have the capacity to invest, we’ve got a balance sheet that has plenty of room to invest, so let’s grow this company.”
Duarte, like Jingoli, stresses that this growth is all incremental. “As you begin to bring new elements into the company, you try to understand what is working and how you can optimize that a little better,” he says. “And I was very fortunate. Team members like Steve Walther (senior director of games product marketing), the studio heads that we have in Japan and Australia, and here in Las Vegas, all are very talented, creative people. So, I had a good baseline to begin with.”
Over the past year, Konami has concentrated on maximizing the current product library and working on technology—“on the overall platform, which we’re going to leverage over the next three to five years,” says Duarte. “We’re really setting the table for growth, and I believe at G2E, we showed, very significantly, that we’ve made those investments. We are listening to our customers.”
The next few years will see the company act on operator feedback with product areas where Konami has not focused in the past, Duarte says—areas like premium recurring-revenue product and the VLT/VGT market.
The All Aboard game launched at G2E is the first in a new class of Konami premium recurring-revenue video product. “All Aboard was developed by our sister company, Konami Australia, and achieved very strong success there in the casino and club and pub market,” Jingoli says. “So, we’re expecting big things—it’s really our first entrée in a while into the premium market. The team has done a great job of commercializing that product, and it was very well-received at G2E this year.”
But premium for-lease product is only the beginning of the new verticals the company will explore. “We have a plan in place for the next 18 months, to three years, to five years,” Jingoli says. “When you look at the different verticals that we are in, we are not in a lot of space where we need to be—whether that’s Class II, or VLTs, or wide-area progressives.”
On the front lines of this effort will be Colella. “One of the first things on the plate is to build out the product plan,” Colella says. “We’re making sure we have a strategic five-year plan, and a more tactical kind of 18-month plan. Then, we’ll start to build out some of the new platforms.
“While supporting our new product lines, we’re making sure we’re still focused in on what made us successful in the first place, because as we talk to our customers, it’s obvious there is still a lot of passion on part of the players for our core games. We have three different development centers right now—in Las Vegas, in Japan, and in Australia—making sure that we pull all of those ideas into a roadmap that is going to be commercialized throughout North America, Europe and South America.”
New product groups like VLTs, premium games and multi-site progressives could even be joined by a return to the stepper market, where the company has been dormant the past few years as far as new product entries. According to Jingoli, the market for steppers has declined in the Western U.S. and Canada, while in the East, it’s not unusual to see steppers making up a larger share of the floor.
“Are we going to jump back into the deep end and start developing a ton of stepper product? Probably not,” Jingoli says. “But I think we’re going to look at some key initiatives, and some core things that we could do in that space, because one of the things Steve and I had tasked the group with is, ‘Let’s get into some of the verticals that we’re not in right now.’ We need to do that in order to grow our footprint, whether it’s Class II, VLT, or back in the stepper market.”
“Konami is where it is, without a full complement of some of these other business segments,” adds Colella. “That’s something important to keep in mind. Just getting into the premium space will be a big advantage for us, and I think there is some runway there. Customers are looking for something that may be at a little bit different price point, a little bit more affordable, and I think some of the things that we’re doing right now will really fit into that category.
“The whole thing we’re trying to do is add those layers into the business, so we can grow the business the way that we want to. You’re going to see a lot of ‘stay-and-spins,’ a lot of linked progressives—which are really the types of games that players are playing right now—and we’re going to have a unique Konami twist, with some of our own brands that are going to be part of that.”
This year’s G2E was the public starting point of Konami’s expanded product portfolio. “You certainly saw a different look to our booth than you’ve seen from Konami in the last five or six years, and it’s fairly remarkable what we’ve done as a team—not just Victor and his group, but our entire team,” Jingoli says. “It’s really changed the look and feel of what we’re going to do today and in the future.”
The new premium product line comes with its own new cabinet—“a fully merchandised offering that will announce our entry into the premium space,” says Duarte. “It was designed to create a contemporary player experience that is different from Konami of the past. And the integrated merchandising—the sign packages, the chair, the cabinet, in one full system, with a lot of flexibility—is really what the vision led us to.
“And we have a launch library that we have a lot of confidence in, because there’s some depth to it, in terms of performance. We’ve taken our top-performing game from Australia, which is a highly competitive market, but you also have a game coming from the Japanese studio, a game family coming from the Las Vegas studio, and another one in the reserve.
“So, we have a number of game families built by a diversified studio base that I think is going to be a real good testimonial for our capability. Obviously, as we grow and invest in incremental studios and creative resources, we’re going to be able to do even more of that.”
“It’s important we have a roadmap,” adds Jingoli. “In talking to customers, they want to see us in that space, but they don’t want to see a new cabinet and one or two titles. We like to think every game we develop is going to work, but customers want to see a pipeline. It’s not going to be one title; there’s going to be six or seven titles that are going to roll out over an incremental period.”
One thing that won’t change is the healthy interaction between Konami Gaming and its parent company. “Our parent company is always in our DNA, and it’s always going to be there,” Jingoli says. “And it’s a great asset for us to have. We don’t want to detract or deter from our core development and what we’re doing, whether it’s our video product, or exploring these new verticals to get in. But we are certainly going to always have a team that looks at the parent company’s products.
“Silent Hill is a good example of a game that came out of the Konami Holdings IP portfolio that was very well-received at G2E this year. We’re always going to look to leverage our parent company to our advantage.”
The new efforts will not leave behind one of Konami’s strong points, the popular SYNKROS casino management system. “It’s really an exciting time in our systems group,” Jingoli says. “We’ve had some significant wins, from RFPs to new installations. One of the reasons we brought Sathish in is that he has the experience to really look at the way the market and business segment is shifting on the systems side.
“We made significant changes to the system architecture, that allowed us to win a Carnival or a Golden Entertainment, and we feel we’re in a position now that we can service any operator in the world with our SYNKROS system.”
Konami has rolled out a suite of system-delivered bonusing and mobile capabilities that are being incorporated into SYNKROS. “One of the key pieces of functionality displayed at the show was our SYNK Vision product,” says Walther. “That has the ability to capture biometric player tracking at the machine.”
Konami’s advanced SYNKROS marketing toolkit offers SuperSeries, BonuStream, and True-Time Tournaments—all system-delivered bonusing solutions designed to reward loyal players directly at the machine. One innovation allows carded guests to be entered to win a mystery progressive jackpot at any equipped point-of-sale on the property—from slots to restaurants. There also are modules designed to reward good play, even if it is uncarded.
“The systems business has never been better for us,” says Jingoli. “We’re really excited about where that group is.”
“The convergence between systems and games and hardware is coming quicker now than in the past,” adds Duarte. “It wasn’t the revolution that people expected five or seven years ago, but it is happening now. That’s one of the reasons we brought on Sathish—to really understand the intersection between games, hardware and the systems, and how we can optimize that overall experience.”
For the next several years, established products such as SYNKROS, core video groups built around cabinets like the new KX43 and Concerto Opus, and specialty products like the Fortune Cup and the new Fortune Cup Derby Deluxe will be augmented by the new face of Konami—all the new talent, all the new product groups.
“Konami is dedicating record resources to advancing industry innovation, through investment in technology, talent, research and design,” says Sutherland. “Our latest games product line, which premiered last month at G2E Las Vegas, has been developed from the ground up with a focus on the player. It explores new avenues of hardware innovation, specifically aimed at creating more value for operators, and is the first step toward a significant expansion in our gaming entertainment offering.”
“It’s a great time to be at Konami,” says Duarte. “There’s something going on in this company that’s exciting, and it perpetuates itself.”
“Our organization is highly focused on changes to help pioneer new slot entertainment and technology,” Sutherland says, “to cater to today’s players in the best ways possible. For 50 years, Konami Holdings Corporation has been in business, and has built a legacy in gaming entertainment across diverse platforms and genres.
“Konami Gaming is extending that expertise and heritage to support the casino gaming industry in ways that only Konami can deliver. Across games and systems R&D, we are doubling down on investment to serve changing market needs at an unprecedented pace.”
The Next Generation
Konami Gaming’s partnership with the University of Nevada, Las Vegas is preparing the next generation of industry innovators
In 2014, Konami Gaming bought a game called Domino Dragon, a Chinese domino video wagering game involving a new method of determining slot outcomes using elements of pai gow tiles.
It’s the kind of innovation Konami regularly pursues, but there was one unique aspect of this game: It was created, and patented, by a college student.
Domino Dragon was the first casino game patented by a student-inventor as part of an innovative gaming course at the University of Nevada, Las Vegas that was created by Dr. Mark Yoseloff, the former Shuffle Master chairman who now heads the Gaming Innovation Program at UNLV’s William F. Harrah College of Hospitality. The program was developed in partnership with Konami Gaming.
Konami’s fingerprints are all over the hospitality college, from the gaming lab at the Stan Fulton Building—a mock casino stocked with donated Konami games—to the college itself, which has received $2.5 million in donations from the supplier over the past five years, all dedicated to improving the success of the next generation of casino industry professionals.
“One of the amazing things about the Konami Gaming Lab is that it’s the most productive lab on campus for patent activity,” says Dr. Marta Meana, president of UNLV. “Just last year alone, six patents were issued through the work that occurs in that lab, which is pretty amazing.”
Konami’s philanthropic relationship with UNLV dates back to 2000, but was ramped up in 2010, when the supplier donated $1 million to help build the hotel school, the Harrah College of Hospitality. The Konami Gaming Lab was established the following year.
The supplier’s ongoing support of UNLV and the Innovation Program has been driven largely by Tom Jingoli, Konami’s executive VP and chief commercial officer—and a UNLV alum, having earned his master’s degree there in 1996.
“Konami has been instrumental in the success of our Hospitality and Gaming Innovation programs,” says Meana. “It certainly has been a very rich partnership for us.”
After Konami received its Nevada gaming license in 2000, Konami Holdings founder and Chairman Kagemasa Kozuki directed that as Konami Gaming grew, the supplier should be involved in local philanthropic ventures as part of being a good corporate citizen. That same year, the company made it first large contribution to UNLV’s Harrah College of Hotel Administration.
“There are certainly a lot of worthy initiatives and causes throughout the Las Vegas Valley, but the one that we felt was most important was a partnership with the university,” Jingoli says. “And not just a partnership with the hotel school, but with the entire university. If you look at our company, we have mathematicians, we have engineers, we have bilingual professionals. It’s not just about people that graduated from the hotel school who have an understanding of the gaming industry.
“We hire a significant amount of resources and team members from the university, so we felt a partnership with them was great, and it was an easy sell internally. Japan felt it was a great thing for us to do. So, we’ve always been very active in giving.”
He adds that it’s not just money Konami gives the university. “We helped rebuild their gaming lab, we put product in there, we helped secure product in there,” Jingoli says. “We have engineers from (Chief Product Officer Victor Duarte’s) team that sit on the advisory committee for the engineering school, and provide help with curriculum. It’s not just about the hotel school—it’s about the engineering school; now there’s also a law school. We can fill the fruits of our labor.”
Jingoli says it comes back to the company in the creation of graduates that will succeed in the business—hopefully, at Konami. “It’s nice to be able to hire somebody coming out of the university, which is literally across the runway, who is ready to be employed,” he says. “We have to recruit talent, but sometimes it’s hard to get talent to move here.”
Jingoli estimates the most important partnership was the one that helped build the physical hotel college. “It’s an absolutely fabulous building,” he says. “It opened last year, and it is now the No. 1 hotel school in the country. We were happy to put our name on that, with seven other key donors.”
“Konami has also helped us out in another very important way,” says Meana. “They’ve started to open doors for us internationally. In the recent past, the Japanese government has been considering introduction of integrated resorts, and our researchers at the International Gaming Institute have been a resource for the government and business leaders in Japan who are considering this.
“And Konami, which is headquartered in Japan, was really instrumental in introducing us to these leaders. So, that’s another really creative way in which UNLV and Konami have been partnering.”
“It’s been a really good partnership for us,” says Jingoli. “I know we’ve done significant internships throughout the company, and it’s always great to keep homegrown talent at home. I think it’s important for a vibrant city like Las Vegas to have a university that contributes to its well-being. If you go up and down the Strip, on the casino side, the number of graduates that went to the hotel school and to UNLV is pretty significant.”
“UNLV is very invested in being integrated into this community—the business community and community overall,” says Meana, “and the kind of partnership we have with Konami is really exemplary. The innovation that can happen when industry and a university collaborate, to me, is a perfect example of something that we value very much as a university in the 21st century that wants to be part of everything that goes on in this city.”