Last September, Konami Gaming, Inc. launched a new game in its popular “Stuffed Coin” series of slots, this one as the launch game for a new cabinet.
The original Stuffed Coins slot was nine months into a run as one of the Top 25 Indexing New Games in the Eilers & Krejcik Gaming/Fantini Research monthly performance report. This latest version, which adds new art, sounds and animation to the original, is presented on the new Dimension 43×3 cabinet, a dynamic display presented on three stacked 43-inch monitors.
That same month, Konami Digital Entertainment B.V. launched the video game Contra: Operation Galuga, a new entry in the “Contra Run-n-Gun” video game series, with versions for several different PlayStation, Xbox, Nintendo and other game consoles, with a plan to release digital versions in 2024.
The events of these sister companies, both subsidiaries of Japan’s Konami Group Corporation, are tied to their common legacy as purveyors of video entertainment. The company that is now Konami Group Corp. can be traced back to 1969, when company founder Kagemasa Kozuki began manufacturing and selling arcade games in Japan through Konami Industry Co., Ltd. Over the ensuing decade, Konami launched arcade classics from Frogger to Super Contra to Dance Dance Revolution and more. Many of those classics are now available online.
In 1997, Kozuki established the company that would draw on this heritage in the realm of casino slots in U.S. markets, establishing Konami Gaming, Inc. in Las Vegas—a new entry to what was then a market dominated by a few entrenched suppliers. Konami’s games would draw on the entertainment heritage, in the form of high-performing slots for U.S. casinos. Today, Konami is among an elite handful of top slot suppliers—not to mention one of the industry’s top suppliers of casino management systems with the SYNKROS system.
Kozuki, 83, remains chairman of Konami Group Corp.—the top example of Konami’s reputation for stability in the C-suite, extending to Konami Gaming Inc., which has itself been a hallmark of that leadership stability. President and CEO Steve Sutherland has been with Konami Gaming nearly 24 years, having started as senior vice president of sales in 2000.
Similar long service can be found throughout the Konami Gaming C-suite. Tom Soukup, senior vice president and chief systems product officer, joined Konami in 2001 after a 20-year career in computer science. Gerard Crosby, senior VP and chief games product officer, joined that same year, and subsequently led the Australia-based game studio. Tom Jingoli, executive vice president and chief operating officer, joined the company in 2003 as director of compliance. Jay Bertsch, senior vice president and chief commercial officer, joined in 2006, and came up through the sales ranks, particularly system sales.
This variety of backgrounds works well in the management team. “To enter this market, it really requires a diverse group of people that are committed to the mission of success, and we all have a very diverse background,” Sutherland says. “We work well together. We don’t always agree, but the mission and the focus of the organization is driven by this team, and there’s a multitude of other people here that are in this organization who are committed to that activity.”
Just as important as the seasoned executive staff is Konami Gaming’s connection to sister companies Konami Amusement and Konami Digital Entertainment, and their respective gold mines of amusement-based intellectual property and technology.
“Collaboration with Konami’s amusement and digital entertainment divisions has always been there, and we’ve benefited tremendously from the technology perspective, in such things as platforms and graphic engines,” says Crosby. “That’s a core of our business. We have a development studio in Japan, which is located near Yokohama. They’ve always had close ties to the amusement division; many of our studio personnel comes from the amusement division.”
“It’s in our DNA,” Jingoli comments on the amusement/arcade connection. “That’s who we are, and that’s where we we’ve come from. If you look at some of the more successful products that we’ve created—Fortune Cup, which is still out there running, and Titan 360 on the hardware side—they took that amusement-style game and brought it into the gaming space. Also, we had games like Frogger and Silent Hill that were successful, and some of those are still successful in our iGaming space.”
“Konami has the unique, rich history as a leading supplier of amusement games,” says Crosby. “All along, we’ve seen gaming games as no different than amusement games—they’re designed to entertain players, which is pretty much core to how we develop a game. So, to be able to tap into that expertise and the resources of Konami globally, as we’ve done since the start, has enabled us to focus on an entertainment-centric product, and I believe that’s where our successes come from.”
Sutherland adds that the generation that grew up with Konami arcade and console games is now entering the casino market with more discretionary income—another unique advantage for Konami Gaming.
The Common Threads
The entertainment connection has certainly led to many hit games for Konami—the highest-earning games, including the Stuffed Coins series, Dragons Law Fortune, All Aboard and more, have common threads not only in entertainment value, but in strong game mechanics, solid math and brand recognition.
“Look at Dragons Law Fortune as an example,” says Bertsch. “It obviously has strong mechanics and great math. But it also has historical brand recognition with a lot of players who played it on the Podium cabinet line, and it’s a brand that we continue to weave into our new products.”
Key to keeping the brands fresh, he adds, is to preserve the familiar aspects and add the most popular game mechanics of the day, like metamorphic pots and hold-and-re-spin features.
“It’s fun to take some of those products that were very successful in the Podium era, 10-15 years ago, and modernize them to bring them forward,” Bertsch says.
“It has become an incredible success story for us. These brands also include some unique concepts. All Aboard, a global brand that has been introduced into the U.S. market over the last three to four years, has really been a pillar for our participation business. It’s a new brand, but one that is generating a tremendous amount of traction and success.”
In addition to incorporating game mechanics that are popular with modern players, Konami’s success in game development has yielded original features that have become popular across the slot spectrum.
“If you look at the 15 independent reel strips (in games like Bull Blitz), we’ve been doing that for over a decade,” says Bertsch, “and everybody’s jumping on the bandwagon now. And if you look at Unwooly Riches as an example, everyone’s jumping on the bandwagon of these playful characters—the interaction, the sound mechanics—and again, those are concepts that we’ve been able to bring forward, given some of the success that we’ve had on the amusement side.”
Unwooly Riches—now releasing—also is a model of collaboration among Konami studios in Japan, Australia and the U.S. “It’s the first time in Konami’s history when we released a product the three studios have worked on together,” Bertsch says. “Japan was able to interact with our U.S. branch, and the Australia branch also had some had some impact. It’s a really important product for us, because of the diversity of the product and the newness of it, but also some of the historical content that’s being brought in. We’re very optimistic about it.”
Another common thread is the player and customer research Konami includes in its R&D process. “A big part of how we develop the games is the research element,” says Crosby. “We put a lot of effort into understanding what players like—what they get enjoyment out of in games—and it goes from there.
“We also put a lot of care into the branding of those games. It’s just like any video game or movie—the theming, visual sounds and the merchandising. It’s all critical to getting players engaged and making the games enjoyable.”
Konami’s research goes beyond player preferences. The company invites its operator customers to regular meetings, in which Konami collects operator feedback on what they need to be successful. “That part’s critical,” says Crosby. “We have a product management team that spends a lot of time with our customers. It comes down to placing the games in the appropriate places, how our games work, whether it’s configurable in options that suit operators… When we design a game, that is part of the research that comes into play.”
The Hardware Factor
Another crucial element to Konami’s success has been the development of hardware, including specific games designed to exploit the features of each cabinet. For the past few years, the company has developed and added to the Dimension series of cabinets, each new version a unique form factor designed for a specific style of game play.
With the introduction last fall of the Dimension 43×3, the series now includes five cabinets, with styles to fit any player preference—the 43×3 joins the Dimension 27, with three stacked 27-inch monitors; the Dimension 49, with its vertical flat-screen portrait monitor; the Dimension 49J, a twist on the 49 with a J-curved monitor for an improved player viewing angle; and the massive Dimension 75C, its 75-inch mega-display curved into a slight C shape for great ergonomics in a format that includes dual jumbo spin buttons, dual cup holders and dual wireless chargers.
“It’s all about performance when it comes to cabinets, and we feel the Dimension series can compete across all different form factors in the business,” says Jingoli.
He adds that the Dimension series is now hitting its stride, after a rough debut at the height of the Covid-19 pandemic. “It was a difficult time to be launching a new cabinet; it was very hard to try and convince people to put new hardware on their floor during that time,” Jingoli says.
“But it’s really stood the test of time. If you look at the performance of the product across all the different form factors, it’s continued to rise. And as a result of that, we will continue to support that product for the foreseeable future, just because of the return on investment that operators are getting. We’re really excited about a lot of the content that’s going to be coming across all the five different form factors.”
“For the design for the Dimension Series cabinet, the aim from the start was to design a cabinet that suited us for a global market,” adds Crosby. “For worldwide distribution, it needed to be reliable, it needed to be ergonomic. Also, one of the key things we wanted to achieve was to be flexible so we could build on a range of styles in the cabinets.”
With the new Dimension 43×3, the cabinet series now touches all bases. “The 43×3 is something that the engineering team and product management developed,” Jingoli explains. “We merchandised that a little bit differently. It’s a for-sale cabinet, or we can do participation, and the early results that we’ve seen have been very encouraging.”
SYNKing with Systems
For the past decade, Konami’s game development has shared accolades with its system development. The company’s SYNKROS casino management system, launched in 2012 as a flexible alternative to legacy mainframe CMS products from the big U.S. manufacturers, has grown into a must-have system for casinos of all sizes.
Today, SYNKROS is deployed in 142 casinos, mostly in North America, including commercial and tribal properties, 45 cruise ships and 541 individual slot route locations.
When he joined Konami in 2001, Soukup brought a suitcase full of computer-science patents from his career, and as head of the systems division, he has continued to oversee innovation in SYNKROS.
“SYNKROS was developed from the ground up,” Soukup says. “We didn’t buy another casino management system; we took what was in the industry—Oracle, using Linux and an Ethernet floor—and developed the system from scratch.
“The one thing we do quite differently from legacy systems is that we implement a centralized database and single sign-on, which allows operators to perform slot and table tracking and accounting, as well as player tracking, marketing, and bonusing using an integrated, single database—slots and tables, as well as player information. Additionally, from ground zero, SYNKROS was multi-site-capable, so operators that run multiple casinos can offer one card and global points across those properties to their players.”
SYNKROS also was designed to capture more granular slot data than the legacy CMS products. “We designed the system from the beginning to feature game-level accounting and player tracking,” Soukup says. “As a person plays multiple games and/or multiple different denominations on a slot machine, each game/denomination may have a different hold percentage. We’re tracking that at the game level, so that you really know what the theoretical win for that player is, by the games and denominations they play. SYNKROS is implemented as a single code base; the same code base is installed whether it’s a 15-slot route location or an 8,000-slot casino.”
In refining the SYNKROS system, Soukup has added a number of patented features.
“Years ago, we had a lot of patents in the player mobile technology,” he says. “Instead of the staff member sitting behind a computer screen or having to go back to the club desk to service a customer, we’ve launched the Konetic employee mobile application based on some of those patents, which basically allows slot techs to be face-to-face with a customer to handle their jackpots, print their W2Gs directly from that mobile phone, and have that mobile phone integrate with the jackpot-dispensing kiosk.
“It took us a while to develop a product for that patent, but one of the other big features we patented early was facial recognition—the ability to use your face to log into your player tracking account at a slot machine. We’re starting to see some interest in Australasia for that to be used, to basically validate that I am the person sitting in front of the slot machine playing this amount.”
In practice, a hole is drilled into the existing player tracking bracket and a smart camera is mounted, connected to an artificial intelligence facial recognition engine. The player can opt in for facial recognition, and can choose that option to sign in, versus having to card in with their loyalty card. The AI engine then reviews the player database for a match.
Other refinements to SYNKROS include system-based mystery and must-hit-by progressives that can be run on a variety of machines, progressives and bonuses tailored to different player tiers, and one of the newest additions, called SYNK 31.
The latter is a compliance and anti-money laundering tool. “Since we are collecting all the cash transaction data in SYNKROS, we developed the SYNK 31 package to keep track of suspicious activity, possible money laundering, actually even do TINChecks to make sure that someone is not using someone else’s Social Security Number,” Soukup explains.
SYNK 31 is one of the system developments that came directly from operator feedback. Konami regularly holds Advisory Board meetings with customers, who suggest the topics. “We ask them what their needs are, and then based on their input, we’ll put a project on the roadmap,” says Soukup.
As Konami moves forward, the company is spreading into several new product categories, including more recurring-revenue products, internet gaming, VLTs, Class II and historical horse racing.
“When we were in the design phase of the Dimension Series product pre-pandemic,” recalls Sutherland, “there was a recognition that the company’s focus has been on the Class III gaming direct sale market for most years, since the foundation of the company. But around 2018, there was a recognition that we are now a global company, and we needed to enter five additional product market segments—to truly invest in the recurring revenue market, the iGaming market, the historical horse racing market, VLTs and Class II.
“Our first entry into the recurring revenue/participation market was on the Dimension series, and it was after our first install of the Dimension product line where we were at dinner at Barona casino.” He says Dimension was operational about 12 hours before it was turned off in the first of the Covid-19 shutdowns.
“I’m happy to report that we’ve now successfully entered that market, and we’ve achieved a very strong base,” Sutherland says. “The key question today is: How do we continue to invest in that market and take greater market share?
“We’ve entered the iGaming business. We don’t advertise it a lot, but we do very well there. Likewise, we have successfully entered the historical horse racing market. How do we take greater market share going forward? We’re taking those actions. We also made the decision during the pandemic to make a soft entry into the video lottery market. So, we have entered the VLT market in New York state. How do we continue to grow our business in that market? Those actions are under way. It requires investment.”
He adds that Konami has made a soft entry into the Class II market. “We need to make the investment to take advantage of that, and we’re committed to do that, but in a very methodical manner,” he says. “We’re focused on the customers, and growing this business going forward by providing reliable products that provide value to the customer base.”
“Our core effort is still on Class III,” adds Crosby. “Our primary focus is to make sure we’re making the greatest content we can. But expansion is obviously important. Konami’s iGaming business is growing significantly, and there are a lot of opportunities there. We’re in the early stages of VLT and Class II, and we’ve successfully entered HHR. Then, there are new markets—in Europe, there’s a lot of opportunity for growth, and there’s opportunity for growth in Asia and South America.”
In the end, “it’s all about content,” Jingoli says. “We’re driving the company forward in both games and systems. We’re excited about where the company is today, and where we’re going to be in the short, mid and long term.”