One of a Kind

Konami Gaming continues to distinguish itself from the rest of the slot market by drawing on the resources that make the company unique

If competing in today’s market increasingly means being everything to everybody, Konami Gaming is on its way.

The supplier continues to grow its business in new ways, from innovative betting schemes that naturally lead to higher wagers to groundbreaking new ways to utilize smartphones as player’s club cards.

Konami Gaming, Inc., based in Las Vegas, always had the advantage of tapping the resources of the other divisions of parent Konami Holdings Corporation of Japan, but the company has really hit its stride in this respect in recent years, after building out its Las Vegas corporate campus in 2015, when it added 200,000 square feet of integrated research, development and assembly operations.

The company has put that space—as well as the integral 160,000 square feet of the original facility—to good use, steadily gaining market share by evolving its product library with a parade of new cabinets, new game styles and unique products that utilize the expertise of its sister companies—legendary video-game producer Konami Digital Entertainment Co.; and Konami Amusement Co., producer of the most well-known arcade games in history.

Konami has remained one of the top slot manufacturers in the business by constantly evolving its product line, crafting cabinet styles to meet the preferences not only of its casino customers, but their customers, the people who play Konami games. Unique cabinet and game styles like Advantage Revolution were followed by the Podium series and the current Concerto series, which is still evolving.

“It’s all about innovation in driving additional product families,” says Steve Sutherland, president and CEO of Konami Gaming. “And the ultimate determination of how well those products are doing is, of course, customer play.”

Konami has continued to capture new customers for its main slot groups not through elaborate multi-level bonus sequences, but by sticking to two main credos: give players value for their dollar, and keep things simple.

That means innovative game mechanics like Strike Zone, which identifies an area within the reel array in which symbol-driven bonus events occur frequently. The Strike Zone grows as the player increases the bet, and at a minimum bet, it’s easy to see what you’re missing out on.

“Value is our key driver,” says Tom Jingoli, executive vice president and chief commercial officer of Konami. “We’re using unique incentives to bet higher, and adequately showing the value of those incentives. It’s clearly communicated to the player, and that helps drive incremental revenue.

“That’s really what it’s all about. These features are designed not to move money from one end of the floor to the other, but to tell players, ‘If you invest a bit more in this casino’s operations, we’re going to give you a little bit more.’ In the past, it was ‘Bet more, win more.’ That’s an intangible message. But when players watch the win area grow, and seeing the values they can win actively grow, that’s tangible. And we’re finding that’s resonating with the players who are engaging with our product.”

“(Strike Zone) products are performing really well in the field,” adds Jingoli. “We’re already starting to see some other manufacturers trying to copy that. Usually, when that happens, you know you’ve done something right.”

“Our focus is on producing games for gamblers,” says Sutherland. “Typically, those people understand how to go into the pay table and determine how they’re winning. Ultimately, though, there are a lot of new players coming onto the casino floor. We have to be able to communicate to them, as well as the serious gambler. The sooner you can educate them, the better.”

 

R&D Power

Strike Zone is one result of Konami’s extensive research and development efforts centered on the end user of its products. “A significant amount of research goes into playing, and building the next hit game,” says Jingoli. “I’ve been playing the games, and then making games people want to play, and want to have fun on—because we’re really competing in the entertainment space. We’re competing with video games, movies, television, Netflix… even mobile phone devices.

“When you see the demographics on people playing entertainment games on their mobile phones, they’re getting older and older, crossing into what you would say is our core demographic. So, we have to see what types of fun mechanics are performing. We have a very robust research team that sees what’s happening in the market, and what’s working—and how we need to be building our games.”

“We want to ensure our R&D group has the appropriate infrastructure to develop highly competitive games,” adds Sutherland.

Konami’s growing game library utilizes the latest technology that reaches that closely watched and growing core demographic, a fact that is reflected in the new cabinets the company rolls out this year—the giant-sized Concerto Opus, which was previewed at last year’s Global Gaming Expo and is ready for launch; and the KX 43, to be debuted at this year’s show.

The KX 43 premium cabinet—so named for its 43-inch portrait monitor—is a microcosm of everything the R&D team has found players want in a modern slot machine, from attractive edge lighting to features like dual spin buttons, an LED button deck and a built-in charger for smartphones. The Concerto Opus, with its massive 65-inch high-definition flat monitor, is designed to wow the player and give game designers a vast palette on which to create new features.

“Our industry is rapidly changing,” says Sutherland, “and cabinet design is evolving as 4K (video) technology is now coming down in price. So, we have our game engines aligned to put future game content on that 4K component. It’s almost like the fashion industry—things change rapidly, so we’ve got to be at the forefront.”

Jingoli adds that the new KX43 cabinet package is a result of feedback from operators at last year’s G2E show. “I just grabbed the slot directors and said, let’s take a walk around the floor,” he says. “What do you guys like? And everybody kept coming back to that clean-looking cabinet. And we got on it right away, and turned it around in one year. I’ve been with the company 15 years, and I believe this is the fastest we’ve turned a cabinet package around. It was really good to see the entire organization working together. This wasn’t just R&D; it wasn’t just mechanical engineering, it wasn’t compliance—it was everybody. It was our whole organization that took ownership of this project.”

The same attention has been paid to Konami’s new lineup of multiple-progressive slots. Jingoli notes that player preferences have evolved over the past 10 years, noting that at the height of the recession, players wanted frequent moderate jackpots to keep them in the game, to which Konami responded with the Quick Strike series. “Now that the economy has gotten better,” he explains, “we’ve seen a shift in trends away from the achievable daily jackpots to the aspirational-style jackpots. People believe in chasing that award, because it’s going to make a difference to their month or year, versus needing to fund their daily play.”

Jingoli adds that a balancing act by game developers is required to make those big-jackpot games more suitable for long-term play. “The ability to hit that top award certainly gets people to the game initially, but then it’s all about the game play mechanic,” he says. “If the entertainment value is there, it will keep the consumer on the box longer.

“Hitting the top award doesn’t happen every day, so the player has to feel the value in the game.”

 

Unique Resources

Konami’s R&D prowess, of course, extends beyond progressives and compelling new game mechanics. The company’s unique position of being able to tap the unique resources of the amusement and arcade divisions of its parent company sets it apart in creating games that go beyond the traditional reel-spinning genres.

For instance, the company has seen great success with its Fortune Cup arcade-style horse-race game, which has packed customers in at the D Las Vegas and several other locations, through a combination of mechanical and digital technologies. At the D, it is offered side-by-side with the Sigma Derby mechanical horse-race machine, the legendary game on which the modernized version was based.

Other unique games to come from collaboration with Konami Amusement Company are Crystal Cyclone and the skill-based music game Beat Square. And at the MGM’s Level Up Lounge, a skill-based version of the legendary Konami arcade game Frogger has been bringing in new customers.

“We’ll continue to leverage those resources,” says Sutherland. “There’s a long history, and a lot of experience in game design, and there’s a huge library of games over there. Based on what we learned with Fortune Cup, Crystal Cyclone and Beat Square, we will draw further into that library and bring more games to market.

“Our industry’s changing rapidly, so we have to start provisioning alternative forms or entertainment on the casino floor. The patron of today is not the patron or tomorrow, so I think we have a great opportunity there.”

Jingoli adds that the games are bringing new customers into the casinos. “Fortune Cup is definitely driving incremental play,” he says. “In a number of the locations, we’re getting 60 percent to 80 percent of the play from uncarded players, when the venue itself has around an 80 percent carded player base. These are brand-new players, and it’s driving that incremental revenue for the venues.”

He adds that the focus on Beat Square, a musical rhythmic challenge based on a popular Konami arcade game, has been to use what has been learned from the Frogger game. “We are in an evolutionary state in creating this market segment,” Jingoli says. “The learnings we obtained from Frogger, we rolled into Beat Square. The learnings we get from Beat Square, we will roll into the next version of the game.”

 

Synkros Evolves

Evolution is not restricted to Konami’s game divisions. The popular Synkros casino management system is in a constant state of evolution as player preferences evolve, and as new technologies crop up that will make play more convenient for customers and more efficient for operators.

The latest of such efficiencies is SynkConnect.

SynkConnect is a near-field communications (NFC) feature built into Synkros that can allow players to dispense with plastic loyalty club cards. Instead of placing a card in the reader, the player can simply tap his or her smartphone at or near the card reader, causing the bezel to turn green to indicate the loyalty card is active and ready to track play. After play, the customer can either tap again to disengage or the system will do it after there is no activity for a set time.

For players still using flip phones, the NFC system works with fobs, room keys and other devices.

SynkConnect will debut at G2E, but Konami already is planning to introduce it in cruise-ship casinos for Carnival and Norwegian Cruise Lines. Jingoli says the next step could be to sell or license the technology to third parties.

The other big advancement for Synkros is a new technology for issuing a credit line to players to seamlessly use at at slot machines, patented by Ellis Island Casino owner Gary Ellis, called MarkerTrax. The technology allows a player who is issued credit by a casino to download credits from that amount directly to a slot through Synkros cashless wagering accounts for completely cashless slot play. “You would go into a casino and be issued a credit line, just like if you were on a table game,” Jingoli explains.

“Then, Synkros creates a credit line account for you. If I’m sitting at a slot machine, I can draw off the credit line, and play. When I cash out, Synkros automatically funds back the amount owed on your credit line. Of course, you can walk away without any winnings above your credit line. We’re really excited about this. We’ll be showing this at G2E this year, and targeting to go live in a beta environment by December 2018.”

Jingoli says Konami entered into a licensing agreement with Ellis and MarkerTrax LLC, and the next steps will be for the two entities to sell or license the technology to third parties.

“The Synkros system now has the recognition it’s deserved for a long time,” says Jingoli. “Our relationship with Golden Entertainment is outstanding—over the next six to 12 months, for the first time, we will install it in a property on the Las Vegas Strip (the Stratosphere). With Carnival Cruise Lines, we’re expanding our relationship. Over the past five years, every major operator has taken a look at the Synkros platform.”

The Synkros advancements are accompanied by a move for Konami into the interactive space. The company has partnered with Reno-based Spin Games to place Konami content for online and social casino play via Spin Games’ remote game server. “We’ve started expanding in that area,” Jingoli says. “It’s been a nice business for us. We certainly like to partner with our land-based casino partners. We don’t have our own site or server. We don’t compete against our customers, but we provide content to them. It’s worked very well, and we’re starting to increase our footprint.”

“We also have a strategic relationship with an entity called Playstudios, which started through MGM, with myVEGAS, and it’s been very successful,” adds Sutherland. “Most recently, we started entering the real-money gaming space, last year in New Jersey. We’re enhancing that and moving forward in Europe. We have a number of our operators that operate their own social sites. So, we provision content through our remote game server to them. We’re not in competition with them; we’re just placing the product, so they have the same assets online that they have on their land-based casino floors.”

 

New Horizons

While Konami forges ahead on all cylinders with its current product groups, the company is looking to expand into other markets, beginning with video lottery terminals. The company is moving into the Canadian VLT market, later this year or early next year, according to Sutherland. Then, next on the horizon, Konami will look at moving into the Class II Native American markets.

“We’ve been very successful in the Class III marketplace, so we’re leveraging those technologies into other areas,” Sutherland says. “We’ve had a very significant effort under way up in Canada. From there, we can leverage those same technologies, if we wish, into the Class II marketplace.”

He adds that there also are growth opportunities in the VLT market in the U.S., in Oregon and Illinois, as well as huge markets in Europe.

For the future, count on Konami to leverage all its resources on an international basis. “The key right now is, how do we leverage our four major design groups?” says Sutherland. “We have Konami Gaming in Las Vegas, we have Konami Australia just outside of Sydney. We have Konami in Japan, and we have a group in India. How do we utilize those assets to target core segments in the market? Because there are a lot of different segments, there’s a lot of opportunity there.”

Asked what his goal is for the company five years out, Sutherland returns to an Olympic metaphor he used five years ago, which became the name of a major game group—to be on the “podium,” which means among the top three slot-makers in the business.

“Five years from now, I’d like to see us on the podium—truly on the podium, and recognized as one of the top three,” Sutherland says. “It’s a huge challenge, but we will continue to develop on the game and systems sides of our business with highly innovative products. I’d like to bring in some alternative form factors true to Konami to get there. I don’t want to sacrifice the core business, but let’s pull from that entertainment library, and start driving it to differentiate ourselves from the competition.”

Being different from the competition has gotten Konami to where it is today. Expect more of the same as the company strives to be on that podium.