The longtime chairman of IGT, Chuck Mathewson, was often spotted in Las Vegas casinos just observing slot customers. He would stand off to the side and watch how they played, who they played with, and note their reactions to various games and themes. He would use the knowledge he obtained on those excursions to determine which new IGT games might work well on the casino floor.
“If the players don’t like the machines, how can the operators expect them to succeed?” he once told a gaming reporter.
Maybe not so coincidentally, current IGT CEO North America Gaming & Interactive Renato Ascoli holds the same view.
“I managed, in the past, VLT operations in Italy, as an operator. So, I have the tendency to put myself in our customers’ shoes,” he says.
But don’t expect Ascoli to be wandering around the casinos observing customers. His method is a little more scientific.
“When I started working here, we thought it was important to prove to our customer that the content and the product we deliver have gone through a thorough marketing approach, including focus groups, market tests, field trials, and things like that. This is the kind of the culture that we have instilled, and we ask people to think of the players, first and foremost.”
When Ascoli describes the foundation of IGT, he says they focus on five touchpoints: being passionate, responsible, collaborative, authentic and pioneering. For Ascoli, however, one stands out.
“My personal one is really about being passionate,” he says. “This, I think, is what really characterizes IGT, as I see the people working here.
“I see them being constantly passionate about what we are doing, and always aligning our interest with our customers.”
When IGT was acquired by GTECH/Lottomatica, there were some natural synergies that spurred the interest. The $4.7 billion deal created a company that was a major player in slot manufacturing, lottery supply and operation, and social gaming. Because each side brought something different to the table, Ascoli says the transition has been almost seamless.
“I have never quite felt a major clash of cultures here, even from the very beginning,” he says. “I think ultimately, there was a nice blend. And you should remember, first and foremost, that the two companies were quite complementary to each other. GTECH was very strong in lottery, and IGT was the very strong brand in gaming—No. 1 in gaming, in fact. So, we were bringing B2B and B2C experience together under one roof.
“Clearly, the experience at IGT was mainly B2B, but there was also DoubleDown Casino that introduced some direct content to the players, not just our casino customers. Some people have used the term ‘smooth.’ I would use that, too.”
When IGT purchased DoubleDown Interactive for $500 million in 2012, the purchase was criticized as too rich for a small social casino company. But IGT was able to parlay its experience in gaming with a strong social casino brand, and DoubleDown soon was producing a respectable percentage of the company’s revenue. So when IGT announced it had sold DoubleDown to DoubleU Games Co. (DUG), a global social casino operator headquartered in Seoul, South Korea, there was almost an equal amount of surprise as when they bought it. Even though the company made a healthy profit—DoubleDown was sold for $850 million—there were some skeptics. But Ascoli says it made sense.
“The market had changed dramatically over the past two years,” he explains. “The sale of Playtika by Caesars got a lot of interest, and we began to receive a number of quite significant offers, actually, that we could not simply refuse.”
Ascoli says the market had gotten much more competitive and the pressure to maintain the revenues being created by DoubleDown was increased.
“We thought we had a credible and strong plan,” he says. “And actually, the player that ultimately bought DoubleDown, DUG, actually bought the plan that we were going to deliver.
“So, that was something like achieving a plan without taking the risk. That was something that we discussed with the board, and the board ultimately approved the idea to sell DoubleDown.”
IGT, however, is not leaving the digital space, according to Ascoli.
“Through the agreement that we cut with DUG, we are actually committed to deliver more games to them, and profitable, good games to them, through a mechanism that we have in place. And we’ve been enjoying the success of DUG through increased royalties. So we have a true vested interest in continuing to participate in this space, and supporting DUG to grow.”
The Big Show
For IGT, G2E 2017 is the culmination of what they’ve been promising over the past two years after the merger was completed.
“The market will be able to appreciate and assess all the things we are bringing to the table,” says Ascoli. “Stepper, premium. VLT, Class II, new systems, new technologies for the virtual reality. ETG, too, that we recently revamped quite a bit. And there will be our opportunity to assess market acceptance, and make potentially some decision, in terms of portfolios, immediately after. But we are quite confident about what we’ve done.”
“You’re going to see a lot of really new and exciting products,” adds Rachel Barber, chief technology officer for IGT. “Last year, we focused on creating more diversity in our cabinet offerings, and this year, we’re continuing to do that, but we’re also incorporating various integrative technologies into these cabinets, to push the envelope there.”
Barber says IGT has been pushing the technological envelope in a lot of ways that will be evident at G2E—“other technology innovations outside of in-cabinet technology innovation, such as PlaySpot, Cardless Connect, Resort Wallet, different mobile offerings,” she says. “We’ve got our Lucky’s Quest game, which is offered on the CrystalCore cabinet, that allows you to continue play on the mobile device. We’re investing more and more in systems innovations, and of course, we’re excited about our virtual reality Siege VR game, which we’re going to be showing at G2E as well.”
One of the truly advanced technologies for IGT has been the 3-D slot machines in the TRUE 3D series, and now the TRUE 4D haptic slots.
“I’m particularly keen on the new 4D technology that we’ll be showing at G2E, which, to me, is a really new player experience,” Ascoli says. “It’s something that the market has never seen before, and I’m looking forward to receiving customer feedback and player feedback about that. But what I can tell you is that the technology that we are using is mingling nicely with the content that we have designed. So, a nice blend of technology and player experience.”
Ascoli is a little surprised about the success of 3-D technology.
“A few years ago, when we elected as GTECH to invest in the 3-D technology, we thought that would be a niche, nothing more than that,” he explains. “But it has become much more than that.
“We are trending 3,000-plus units, as of now. And the number continues to improve. And so, it appears that players tend to like that kind of experience, and we will continue to invest in that space. The mid-air haptic technology is significant, in the game that we’ll be showing, which is Sphinx 4D. But we also have introduced eye recognition, gesture recognition, which makes the experience something new for players. So, again, technology itself is fine for all of us, but whenever it blends nicely and offers a seamless and simple player experience, that’s when technology becomes friendly.”
4D mid-air haptic technology—you point and gesture, and the game responds—is “not only new to gaming, but it’s being launched, by and large, ahead of the consumer electronics space as well,” comments Barber. “Any time you’re offering something brand new and different to players, you’re creating an environment that’s right for potentially capturing new players. And this is what we really want to do for our customers.”
IGT’s core products include stepper machines and video poker. Despite dominating these markets, Ascoli says the company isn’t resting on its laurels.
“When we came here, we thought that IGT was holding some major assets—some golden nuggets, if you will,” he says. “The poker presence is a big one, and the stepper, too, but even some specific brands, like Fort Knox. I encouraged the team to try to work with that. Find a way to facelift that brand, renew it, renew it to the new era, but be respectful, at the same time, to the original player experience. This is the kind of challenge they’ve been working with so far. And so, this is why I think that those brands still have a lot of potential.”
At one time, during the reign of Chuck Mathewson, IGT controlled almost 70 percent of the world market. While Ascoli recognizes that winning back that market share is impossible, he says the company is focused on growing market share.
“The ecosystem we are living in is completely different,” he says. “What we are committed to, and what we are striving to make happen, is a more significant recovery of our market share. We still have a significant position in the market. In some areas, we are leading, like poker and stepper, and in some others we are among many competitors. We are working very respectfully to watch what our competitors are doing, but I think we have put the right effort to improve our market share, in the near and long term.”
Skill and Beyond
A year ago, IGT produced several games that had an element of skill, including Texas Tea Pinball and Lucky’s Quest. Ascoli says that development has not halted, and IGT is actively exploring skill games. But will it become a serious industry trend?
“I honestly do not know,” he says. “What I can tell you is that IGT as a company decided to design some games, heavily dependent on the skill component, and we are showcasing them to customers. The appreciation is there, but the interest is not clear yet to me. Although, I have to say, we introduced skill component into more natural, traditional slot machine games, and the early feedback I’m getting from the market is very positive—encouraging. But I would not characterize that product to be a completely immersive skill game experience. But maybe that’s the way to bridge traditional slots with skill games.
“I see the market as quite polarized at the moment. In some areas, they will never accept anything like that. Some others are more keen on experimenting with that solution. But there’s not clear feedback from the market yet.”
If it has to do with technology, however, IGT is there. The company released Cardless Connect last year, which cuts the tether between the game and the cabinet; and PlaySpot, which enables for-money gaming on mobile phones where authorized.
“I think we’ve made significant progress with our mobile solutions, like PlaySpot and Cardless Connect,” says Barber. “They offer our operators the ability to enhance their land-based casino environment, which is an opportunity that has a lot of potential. Every consumer has a mobile device on them at all times, so giving the operators the opportunity to capitalize on this with these types of offerings really gives the players additional means of convenience, and provides them a new way to play the games.”
Barber adds that one of the carefully watched aspects of this year’s IGT display at G2E will involve the company’s virtual reality product, Siege VR. The product presents an elevated surface for two players wearing headsets to engage in any variety of virtual-reality battles in various virtual landscapes. Barber says it will be paired with IGT’s Tournament Manager solution to create competitive VR contests.
“It’s been exciting to work on the launch of a product using this VR technology,” Barber says, “which has such broad consumer appeal, finally with a monetization model in place that we really think is going to work.”
“We’re always interested in introducing new features by which you interact with the slot machine,” says Ascoli. “Everything we are doing in the mobile area is actually demonstrating that. Our Cardless Connect solution becomes a cashless solution, and potentially growing and offering operators the opportunity to have a direct communication to their patrons, through their mobile phones and devices.
“Another solution, PlaySpot, is an opportunity to allow a patron sitting at a bar, or at the club, or at the show, to place a bet or potentially play a game in a different environment—in his or her room, or at the pool. So, again, we are trying to create the condition by which a person that does not feel particularly attracted by the traditional slot machine, may experience the slot machine game in a different way or in a more confident environment for them.”
IGT built a mobile sports betting solution for MGM that allows players anywhere within the state of Nevada to place a sports bet.
“Player satisfaction is there,” says Ascoli. “There’s no cannibalization at all towards what the operators are doing in the normal land-based operations. On the contrary, whenever you have a big event, like March Madness, they can actually enjoy the opportunity to expand their wagers quite significantly.”
Ascoli says IGT is constantly evaluating the trends on the casino floor and wants to be out front of any development. But he also says those changes don’t happen overnight.
“I’m not a believer of major shocks in the market,” he says. “I’m a believer of a constant transformation. This is why we are working closely with our customers and we are supporting some solutions. Some of our customers are beginning to create new locations, combining more entertainment and gaming at the same time in the same space. We are open to investing, to supporting in that space, because that will be, I think, a good investment for all of us.”