Every Saturday night, all the slot players in San Diego’s Barona Valley Ranch casino go to the races. Anyone who has earned 100 points on a slot club card picks a horse at the top of each hour, on a display on the slot machine. As the horse race plays out on the screen, the place goes wild. Players who pick the winning horse split ,000 in free play.
What Barona customers are seeing is a slice of the future. The system represents the first of many casino-wide promotions that will be made possible by what slot and system manufacturer Bally Technologies calls its “Networked Floor of the Future.”
The Ethernet-equipped floor at Barona is the first showcase for Bally’s Server Based Solutions, or SBS, and according to company officials, it’s just the tip of the iceberg for the new technology. There will be several more applications released within the next few months for the iVIEW Display Manager, which allows a casino to channel promotions, messages, player communication or bonus games like this right to the game screen on a video slot, or to an LCD monitor placed on a reel-spinner.
For Las Vegas-based Bally, it is part of a one-two punch that probably gives headaches to executives of competing companies: the leading systems division in the business; and a renewed slot machine development effort that has carried the industry’s oldest slot manufacturer on a healthy ride over the economic downturn.
It’s a ride that began before Richard Haddrill took over as CEO in October 2004. The table was set when former
CEO Robert Miodunski
orchestrated the acquisition of several system companies, and of Reno-based Class II slot company Sierra Design Group. What Haddrill has done since taking over is to mold all of Bally’s varied assets into a cohesive and very effective business plan.
“Bally had certainly acquired some great technology in the preceding four years—some good systems companies and then SDG,” Haddrill says about the business when he arrived. “The most important priority was to integrate those acquisitions and make a coherent systems offering. On the game side, we were developing on seven different game platforms. We needed to consolidate to one.”
That one was Alpha, a platform that has transformed Bally’s slot products with a single operating system used for video and reel-spinning slots. Consolidating to one platform “immediately improved productivity on the game side,” Haddrill says. “Then, we reorganized the research and development into game studios, to create a little more entrepreneurism within the company, a little more espirit de corps.
“At the same time, it created good teamwork. Initially, there were different teams; it wasn’t all one company. Within a year and a half, the teams started working together on the game side, producing a much higher volume of content, and much better content.”
That content would ultimately return the legendary slot-maker to the kind of acclaim it had not enjoyed since the 1980s, when Bally ruled the market. High-earning new game franchises like Hot Shot and Monte Carlo joined new versions of legendary Bally slots like Blazing 7s to create a product synergy on the game side to match the company’s longstanding prowess on the system side.
As the company prepares to introduce the industry to Alpha II, a more high-powered version of its slot platform, those design studios are multiplying. The manufacturer’s latest acquisitions include prominent game design studios such as Games4You, the Scottsdale, Arizona-based game design group headed by longtime Atronic slot developer Jason Stage; and the San Diego studio of Michael Gottlieb, a veteran designer with a pedigree dating back to the pinball company made famous by his grandfather.
“We increased our number of studios by 50 percent over the past year,” Haddrill says. “Now, we have our processes working, the teams are on one consolidated platform, and the new studios’ games will be hitting the market over the next six months. We’re really excited about our innovation on the game side.”
Alpha II is Bally’s hedge to stay competitive as new slot platforms multiply across the industry, according to Bally Chief Operating Officer Gavin Isaacs. “For the last five years, Alpha I has been a big driver for our gaming business,” Isaacs says. “What we’ve found for the past few years was that all of our competitors released more up-to-date platforms than we had. Hence, we’ve just released Alpha II, which will get us to the cutting edge again.”
Many of the Alpha II games are “download-config ready,” which is to say they are ready for a server-based slot floor. Isaacs says this is going to be the standard going forward. “At G2E, we will release our Download and Config ProSeries II cabinets, which will have a library of around 100 games at launch, download-configurable,” Isaacs says.
Networked game systems like this are on the rise, along with the number of Ethernet-equipped slot floors where they can be placed. Ramesh Srinivasan, executive vice president of Bally’s systems division, says around 40 percent of the company’s system customers are already on high-speed floors. Srinivasan says it could be better. “In terms of hardware, the operators are on pace, but in terms of acceptance and adaptation of the new software products, and all the software strengths available today, that has been a little bit slower than any company would like.”
The culprit? The economy. “Captial expenditure is still being tightly controlled,” Srinivasan says, “and goes through multiple levels of approvals.” Still, even though casinos aren’t spending a lot of money just yet, the infrastructure for server-based gaming is beginning to grow.
Isaacs says he hopes as more Ethernet-based floors appear, more operators will take advantage of software applications like the Bally Command Center and Download Configuration Manager, which is in place for Barona’s interactive iVIEW network.
The Command Center is already in place for many Bally system customers. All casinos equipped with iVIEW systems use the Command Center to download content to the iVIEW displays on the slots. With a few changes, Isaacs says, content can be downloaded from the system directly to the ProSeries II cabinets, which, he notes, have no glass and effectively have three monitors—the dual game monitors and the iDeck, a touch-screen monitor which displays the button deck, but doubles as a monitor for bonus events.
Hardware advancements like the iDeck and iVIEW, though, are only as good as the software applications that make them come alive, notes Dan Savage, Bally’s vice president of marketing. Part of the manufacturer’s role in this case, he says, is to educate casino operators—including those who aren’t tech-savvy—on what is possible with the new technology.
“The skill sets at casino properties are different,” Savage says. “You have some highly skilled people who are early adopters, ready to take on the technology we offer. And then, you have the other end of the spectrum. So part of our challenge is not only explaining the technology and applications to customers, but helping to customize the applications to make them special for their casino.”
New hardware setups like iDeck and iVIEW are “much like an iPhone,” Savage says. “Without apps, it’s not very interesting and no one knows what to do with it. Now that we have the hardware platform on the iDeck, building those applications is what it’s all about.” Same thing with the iVIEW monitor, he says. “Without the applications, it’s just a display,” he says.
The path to education of new customers is bound to be boosted by projects like the Barona casino-wide horse race promotion. “Down at Barona, every Saturday night when they stop the floor and run a horse race for everyone to participate in, the excitement levels are astrononmical,” says Isaacs, who adds that Bally’s G2E booth will have its games linked to offer practical demonstrations of the applications possible with the iVIEW DM network.
The next development with the network? Wagers. According to Haddrill, the iVIEW network will soon be able to take wagers, opening up an entire new spectrum of possible side-bet activity on the casino floor. “You’ll have a floor-wide side bet for the racing game or any other game, across the floor regardless of machine,” Haddrill says.
“The network is not just about controlling costs, but it is about creating excitement on the casino floor,” adds Michael Rattner, director of system product marketing. “The server-based concept has been criticized in the past as not having return on investment to be realized right now. ‘Sure, I can download games, but there’s nothing compelling to keep my players there.’ With this floor-wide bonusing application we’re talking about you have where the real ROI is going to be realized.”
If server-based applications are the wave of the future, where does that leave the tried-and-true Bally slots that built the business?
Right there with the system advances, Haddrill says. “I think we are right at that point in the industry where games and systems really start to come together, and the new technology really creates experiences on the casino floor that are different, and which really increase the opportunity to draw entertainment dollars from other areas to gaming,” he says. “That’s what we’re trying to do with the iVIEW network, and that plays right into the Alpha II strategy, and the content and applications that Dan mentioned.”
The critical juncture between slots and systems means that more advanced play mechanics will be appearing in the stand-alone games as well. “We’ve got some new game mechanics like Hot Zone coming out, which really take advantage of our new platform,” says Isaacs. “Cabinets like the V32 (with the vertical portrait-style monitor), strong-performing video slots like Fireball, the wheel cabinet—part of our development efforts have involved keeping in touch with what the market needs, and moving toward it. It means not only expanding, but also fine-tuning the portfolio.”
And those tried-and-true Bally games? “There will always be a place on floors for great games like Blazing 7s,” says Isaacs. “It’s still a high-denomination game that’s very successful. Bonus Times, Black & White—we’ll continue to offer those great classics in all of our platforms. By the same token, in standard video, we have to change from the old Bally to be much more like the up-to-date, modern video companies.”
Haddrill says that means keeping up on the most up-to-date technologies, a task for which he has created a dedicated group. “We have an innovation lab in Silicon Valley,” he explains, “which is a team of people charged with seeking out new technologies and helping to quickly integrate those into our operating units. They’ll go to a number of trade shows and look at what’s happening with the latest technologies, and see how they can work with gaming. We’re doing a great job in bringing the iDeck and iVIEW technologies to the overall usability of our systems products, and a lot of that was brought in from outside the industry.”
Meanwhile, at Bally itself, Haddrill has ensured new slots and systems boast the latest technology by building the best possible staff.
“Perhaps the most important backdrop of all this is the team of people we brought in—people like Gavin Isaacs, Ramesh Srinivasan, Dan Savage, Laura Olson-Reyes, Mike Rattner,” Haddrill says, noting that all were industry veterans brought in during the past five years. “Also, other people who were further down in the organization were advanced. Doug Mack is now in charge of manufacturing, and you see a different attitude based on the leadership of that team. The people side of it has been the most rewarding for me.”
Bally, in fact, has kept bringing in new talent at a time when many companies were laying people off. The company has doubled its engineering staff during the past five years, and has brought on new sales and marketing people to staff offices as it has expanded to new jurisdictions in Europe, Asia and, most recently, Australia, where the company returned after being absent from the market for half a dozen years.
That expansion has been a hedge for the company against the worldwide recession, bringing in incremental revenue gains at low cost. That stands to continue as more new jurisdictions open up, says Haddrill. “There is new market expansion because of this downturn,” he says, “whether it’s Italy or Illinois or markets like Ohio or Kansas, or New York expanding with Aqueduct. We’re pretty positive about the next year or so, still knowing that the short term is pretty tough.”
That tough going is, of course, due to that ever-elusive replacement cycle, as operators are still reluctant to spend a lot of capital to renew their floors. “We do feel like our customers will start to spend more soon,” says Haddrill. “They’ve been spending at a very low level for almost three years, and that’s an unsustainable level based on any metric you look at for equipment—technology equipment in particular.”
If that replacement cycle does indeed gear up in 2011, Bally is in a sweet spot. “For us, the timing is somewhat fortuitous,” Haddrill says. “We’ve got Alpha II now building with a library of games, and that will be in full stride by the early part of next year. On the system side, we continue the launch of iVIEW DM with the very powerful applications.”
Srinivasan says more practical demonstrations of what those applications can do, revenue-wise, for a casino should boost system sales. “Practically everything we do is in partnership with customers, which increases the probability of our success,” he says. “Once we realize the customer has a need, our product development team works hand-in-hand with those customers.”
Haddrill says he realizes that tough competition exists, and that the other slot-makers are working with their own customers as well. However, he says, Bally will succeed based on what it does for its own customers, not on what others do.
“I’m fine with the competitive environment,” Haddrill says. “It’s all up to us. We win or fail based on our own performance, and we’re going to live by that.”