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The New Normal

The role of content suppliers shifts to match the new reality of a multi-channel world

The New Normal

When this magazine and others revisit the business of the major slot manufacturers as the annual Global Gaming Expo approaches, many of the executives likely will use one of these two terms:

“Omni-channel.” “Multi-channel.”

They are two of the latest buzzwords of the casino industry. They mean that even those companies whose business has always centered around the flashy boxes that populate any given slot floor must be ready with game content that also plays on the internet and on mobile devices, for real-money gambling and on free-to-play social sites.

No one expects the traditional slot machine to go away any time soon, but creating content designed for distribution to land-based, online and mobile channels is the new normal for content suppliers. And that new normal is not restricted to the traditional slot manufacturers. Today’s market has given a shot of adrenaline to pure content suppliers as well, from third-party game designers who work with the big slot-makers to content companies dealing strictly online through remote game servers, to everything in between.

Just ask Kent Young.

Young, the founder and president of Reno-based Spin Games, has seen the entire evolution of gaming content. He moved from Australia to join Aristocrat Technologies in Las Vegas during an era in which the multi-line video slot was still in its infancy in the U.S., having been imported only a few years earlier by Aristocrat itself.

Shortly after joining Aristocrat as vice president of R&D in 2001, Young would enable the slot-maker to keep pace in what was an intense three-way competition with IGT and WMS for the multi-line video space in the U.S. The way Aristocrat would distinguish its video products was by incorporating different kinds of content—namely, multiple progressives and various animated bonuses—into its basic video slot games. By the time Young moved to the marketing side at Aristocrat, first as marketing VP and ultimately as global general manager of marketing, progressive products like Hyperlink were nearly as popular as Aristocrat mainstays like Buffalo.

Young left Aristocrat in 2007 to form his own third-party content supplier, called True Blue Gaming, which supplied content to some of the traditional manufacturers. Following a subsequent two-year stint as general manager of Aruze Gaming America, Young founded Spin Games and quickly employed game developer Michael Halvorson in 2012. One of his goals was to expand beyond the brick-and-mortar gaming world, to deliver quality content to all the emerging online and mobile gaming channels.

Spin Games represents a model for 21st century content suppliers in the gaming industry. While the company supplied content to traditional manufacturers including IGT and others in its early days, Spin would instantly expand its horizons online through the late 2013 introduction of its remote gaming server, called the ROC, for Robust Online Content.

The ROC is an interactive HTML5 platform designed to quickly deliver content over a dedicated server to online channels. Spin launched it in the fledgling New Jersey online gaming market in 2014, forging partnerships with most of the new online casinos, which are licensed to the land-based operators. The company now has ROC servers feeding more than 50 games to some 90 percent of the state’s online casinos, as well as social sites throughout the world.

The HTML technology also allowed Spin to easily produce games for PC, smartphones or tablets, since players can access the games on any device without having to download an app. This led to contracts to supply social casinos—including more than 20 games currently on the millennial-friendly InteractivePro lounge tables at the MGM Grand and Mirage casinos in Las Vegas.

The ROC has flipped Spin Games’ business model to the point that the majority of the company’s content is now distributed online, according to Young.

“As a traditional third-party manufacturer of content in the old days, we did it very differently, in that we just did game assets,” Young recalls. “We would develop math and sound and graphics and animation, and then we’d put them on a disk and send them to a manufacturer.”

That’s because regulations in the traditional jurisdictions restricted the writing of software code to licensed manufacturers. “That’s changed now,” Young says. “Third parties can actually develop software to a certain degree. From a purely technical perspective, things have changed.”

He adds that the new emphasis on interactive content for real-money and free-to-play social distribution—including much content developed exclusively for online distribution—puts Spin Games in a unique position among content suppliers.

“We’re sort of an anomaly as a third-party supplier,” he says, “because we’ve really gone into the interactive space, whereas other third-party suppliers are still very land-based-centric. We’ve actually moved away from the land-based space, because of our technology. Our programs and developments are focused now on the interactive space.”

Volume and Speed

The addition of the interactive channels has required production of a lot more content than in the past—pumped out much more quickly than when content suppliers dealt exclusively in the land-based space.

“In social and in RMG interactive, the life cycle of the games is shorter, but there is a higher volume of product,” Young says, “so volume is definitely an area that changed considerably. But our ability to develop content a lot more quickly is significant. In the land-based space when I first started, it took more than a year to get a game done. Sometimes three. In the interactive space, you can get a game done in a couple of months. The time to market is much quicker.”

Young adds that it is much easier now to do entirely new game categories. “In the land-based space, to do a new category of games—like keno, for example—was a monumental effort within the organization, because you would have to build a new software base; you’d basically have to create a new team… In the interactive space, it’s a lot quicker and a lot easier to develop a new engine, that caters to different categories of products.”

Spin Games has developed a virtual assembly line of development engines—platforms with ready-made architecture for different product categories. Spin programmers can access a slot engine, a video poker engine, a bingo engine, a table-game engine—there are 12 in all, so far. There is even a Candy Crush-style engine for mobile games. The system permits development of a lot of games quickly, and in the social space, that speed is aided by the fact no regulatory approvals are required.

The New Paradigm

The model of multi-channel game development is now being pursued by the major land-based suppliers as well as other third-party content companies.

Like Spin Games, most of the top third-party suppliers have their roots firmly in the land-based industry. Also as with Young’s company, those land-based veterans have had to adapt to the new multi-channel world.

Perhaps most prominent among those is High 5 Games, a longtime partner of several traditional slot suppliers responsible for major hits for IGT, Bally and other major manufacturers. Longtime IGT and Bally game development executive Jean Venneman joined High 5 Games in January as senior vice president of land-based business.

Venneman is in a unique position to view the new game development paradigm—at IGT, she was on the team that developed the original Wheel of Fortune slot in the late 1990s, rising to senior VP of product development before moving to Bally Technologies in 2010. While Venneman conducts land-based business for High 5 Games, her role is now intertwined with production in the interactive area, where the New York-based content supplier was among the early entrants in the social space with the free-play High 5 Casino site.

“A couple of years ago, we started to really ramp up our art and game development resources so we could create a lot more content than we may have otherwise,” Venneman says, “just to make sure our social site was really robust.”

She says the company can place as many as 100 titles on the social site in a year. “The volume is definitely higher,” she says, “and because your play space is smaller, there’s still a real focus on what’s going on in the game, but less focus on the peripherals you have with land-based business.”

Venneman says that while supplying content to the traditional manufacturers is still in the “core DNA” of High 5 Games, the social sector is now the company’s largest. Last month, the company launched a real-money version of High 5 Casino in Europe. “Twenty years ago, the only real opportunity (for third-party suppliers) was to partner with land-based companies,” Venneman says. “Now, we have all sorts of angles, because the market has expanded so much.”

The content and speed to market in the interactive space has allowed High 5 Games to test ideas on the social site that would never be possible in the land-based space. “For example, we had a seasonal game based on St. Nick that did huge numbers,” Venneman says. “That’s not something that would easily translate to land-based, but because we were able to capture that market in real time, we saw some real success.”

Venneman says the variety of experiments in the social space allows her to sort out the content best suited for the land-based space. “We have some overlap between games that are successful on our social site and games that have been successful in land-based casinos.”

For casino-style games, though, one guiding principle in the social space, she says, is to stick with the same program math used in successful casino slots. “That was one of our points of pride and differentiation when the first social sites went live,” she says. “We were one of the only ones that used real casino math.”

Young at Spin Games agrees on the importance of using casino-style program math in the interactive space. “The traditional land-based games are some of the best-performing games in the social space,” Young says. “So, we do all math as land-based math. Even if we don’t get a game approved as a real-money game but still put it out on social, we still develop it within the parameters of a real-money product.”

One longtime third-party content developer who does not agree with this principle is Benny Sum, an award-winning game developer in the 1980s who started content firm Global Gaming Group (G3) in 1994 and still does major development work for traditional manufacturers.

Like other suppliers, the explosion of interactive channels has required G3 to significantly ramp up content output. “There is so much more content we have to do,” Sum says. “Back then, we had to make a suit custom-fitted for one person. Today, because the demographic is spread out so widely, it’s not just gauging the person who would walk into a casino. We’re now gauging whoever may launch the app on their phone. That’s why the demographic has expanded greatly.”

However, he says G3 approaches free-to-play social games as “almost a promotional item.” He says because there are no cabinets to pay for, no land-based infrastructure costs, etc., he makes the hold percentages much lower, to generate more excitement from frequent jackpots. “In the casino, the players are rewarded with money,” he says. “On the social side, you can’t win money. Psychologically, it’s a lot different.”

New Offerings

The gaming content business is still dominated by casino-style slot games. However, as millennials continue to rise to prominence in the marketing plans of gaming operators, many content providers are looking to new games.

“We’ve got a skill-based engine, and then we’ve got one ‘Candy Crush’ engine,” says Young. “Probably 25 percent of what we develop would be within the skill-based, or what we call the ‘drop-down’ product category.”

Spin Games is partnering with one of Europe’s veteran content suppliers, London-based Inspired Gaming, to bring another new wagering activity to North America—Virtual Sports.

Virtual Sports from Inspired, extremely popular in Britain’s betting shops and in real-money online gaming sites across Europe, uses high-definition graphics and animation to recreate popular sports on a video screen or smartphone. Two simulated teams play an imaginary game, and players bet on the outcomes. Because the games are virtual, it is not considered sports betting.

Spin Games signed a deal to become the first supplier to bring Inspired Virtual Sports to North America through its ROC server, integrating first into the Golden Nugget online gaming site in New Jersey.

While some have called it “Madden 16 on your computer screen,” simulated NFL games are still in the future. The first offerings will include Rush Football—the popular simulation of European football (soccer)—along with several racing games such as Rush Horse Racing and Rush Car Racing.

In many ways, Inspired Gaming, the world leader in server-based gaming technology, is a model of where the future of content supply lies. The company streams its products to land-based terminals in betting shops and casinos, but has an extensive European business supplying online, for-money games streamed for PC and mobile use as well.

“Just as we deploy a slot game on those VLTs in U.K. betting shops, we also can deploy the same game via our digital channels,” says Steve Rogers, chief commercial officer for digital games at Inspired Gaming. “So, an operator will have our games both on the video lottery terminals in their shops and exactly the same game, with the same or slightly different math, to deploy on their mobile platform so their players can play at home, on the bus or wherever else they like.”

It is the model being adapted by an increasing number of content suppliers, including the traditional slot manufacturers.

“To me, it’s kind of odd,” comments G3’s Sum. “You used to have the land-based guys and the online guys, but now, the land-based people are preparing all their games to go online. At the same time, you can also see that some of the online people are stepping into the heart of the land-based business.”

“It’s a new distribution model, a new commercial model,” says Young at Spin Games. “We’re not necessarily putting our content on a box anymore; we’re also putting our content on a phone, or on a laptop, or on an iPad.

“It’s a new world.”

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the books, How To Win Millions Playing Slot Machines... Or Lose Trying, and Atlantic City: In Living Color.