Ever since Star Trek: The Next Generation imagined the “Holodeck” two decades ago, fascination has grown with the idea of virtual reality.
The Holodeck, you’ll recall, was a room on the starship Enterprise that would be transformed into any computer-generated environment to which the crew wished to be transported for recreation. They would interact in an authentic setting as the captain of a 19th century warship at sea, joust with one of King Arthur’s knights, or engage in any number of other scenarios, physically interacting with three-dimensional, computer-generated objects and characters.
Granted, virtual-reality technology since the 1990s has not advanced to the point of the Holodeck, but it may well be on the way. And as the casino-resort industry searches for ways to attract new customers without relying on its longtime cash-cow, the slot machine, virtual reality has become one of gaming’s hottest new buzzwords.
Both established and startup gaming manufacturers have been busy working on products that use virtual reality (VR), augmented reality (AR) or some combination of the two, and the first VR products are expected to reach casino floors within the next year. Industry giants like International Game Technology and Scientific Games displayed VR technology at the Global Gaming Expo and ICE Totally Gaming, as did recent startup Gamblit Gaming.
Meanwhile, operators across the industry are considering the best ways to monetize VR and AR for the long term—and these efforts promise to gain steam as advancements in the technology speed up.
VR hardware, for instance, has been steadily improving, with home video gamers snatching up PlayStation VR, Oculus Rift or HTC Vive headsets to sample an increasing library of interactive experiences that place them inside their games.
Next fall, Dreamscape Immersive will launch its flagship VR Multiplex at Westfield Century City Mall in Los Angeles. Billed as a Location-Based Experience (LBE) virtual-reality venture, it will be among the first VR experiences to allow audience members to roam a space untethered, “stepping inside the story” to interact with others in a virtual world.
At “The Void,” a VR attraction with locations in New York and London, groups of four can touch and feel objects in real time within a virtual world. (Imagine shooting a “Slimer” in a simulation of Ghostbusters, feeling the rumble of your proton pack as you shoot.) And Disney’s research team in Los Angeles recently perfected physical interaction within a virtual environment, allowing a user to catch a physical ball based on the movement of its virtual counterpart.
Yes, just like in the Holodeck.
Gaming manufacturers are watching these rapid developments closely, but the big question remains to be answered:
How can casinos translate this gee-whiz technology into incremental revenue on the casino floor?
Monetizing VR
Suppliers and operators currently exploring how to crack the code of monetizing VR in the casino industry are following a methodical approach, and a vision that begins with a pay-to-play attraction in a dedicated area of a resort.
“Virtual reality is very much a land-based product today, and it can be monetized through various models,” says Darion Lowenstein, chief marketing officer for Gamblit Gaming. “The first one is a traditional arcade model—pay and play—where basically visitors to the casinos, not necessarily gamblers, can actually pay a fee or a token to participate in the experience.”
At G2E last fall, Gamblit demonstrated its Virtual Reality Cube—updated for release by the end of this year as the Virtual Reality Sphere, or VRS—with the game Brookhaven Experiment, a title from Phosphor Games that has the player navigating a spooky world killing zombies with various weapons.
Meanwhile, IGT’s booth at G2E was crowded with attendees trying out Siege VR, a competition-driven virtual reality experience that leverages HTC Vive technology to transport players to a virtual world where they engage in a bow-and-arrows battle to defend a castle from oncoming aggressors.
Matteo Monteverdi, IGT’s senior vice president of global product marketing, interactive, agrees that the first step for monetization of VR in casinos will be as a paid attraction, but he says IGT is viewing this as the first of three possible avenues for casinos to profit from VR technology.
“The interesting aspect comes when we move into the gamblification of the experience, which means we basically take this product and transform it into a gambling product,” Monteverdi says. “There are two ways you can do this. The first one we’ve done is integrating virtual reality with the tournament platform. You will be able to buy a ticket and participate in a tournament. The winner of the tournament will get the prize, and the house will take a rake of the tournament amount collected. That obviously is a model very similar to the slot tournament model widely known in the casino industry.”
The third potential way to monetize VR, he says, follows the “vSports” model (for virtual-reality sports). In this option, says Monteverdi, “casinos do not plan to monetize only the players, but the viewers of the player experience. Two contestants will play a virtual reality game, and you will be able to bet on who is going to win the skill game—exactly as today you can bet on who is going to win the World Series of Poker.
“We want to bring virtual reality into the eSports segment. It will be a vSports event, very much like any other sports event you are able to bet on in any of the biggest Nevada casinos.”
This VR model is among many being examined by Scientific Games in its Innovation Lab. Headed by Bryan Kelly, senior vice president of technology, Scientific Games’ Innovation Lab explores technology as it emerges in general consumer markets and determines whether it can be adapted to the casino business—if it can, Kelly hands it over to Scientific Games’ R&D staff for development into a product.
Kelly, like other gaming researchers, says VR will initially be a resort attraction, but other potential paths to monetization are likely to develop quickly as companies like Disney and the home-use video game suppliers improve both the hardware and the capabilities of the experience itself.
“I don’t feel comfortable yet that VR has a path toward a repetitive play akin to slots or table games,” Kelly says. “I really think it’s not a technology that’s ready for prime-time, for mass market and mass monetization, at the LBE locations.”
However, Kelly notes that commercial VR technology is advancing quickly, and as hardware and experiences improve outside of the casino industry, the possibilities multiply within the industry. “Everyone was expecting the VR headsets to take off,” he says. “They were a little bit short of expectations. However, we are starting to see them being bundled in with your cellphone—when you get a new cellphone, sometimes they include the headset that you can pop your phone in. So, as the mass market advances, more people are going to want to experience (VR).”
First Products
Lowenstein says this goal is what is driving Gamblit’s Virtual Reality Sphere, which he estimates will launch in casinos late in 2017. “We had a huge amount of success with the Virtual Reality Cube, or VRC, we showed at G2E,” he says. “We found that while everybody loved the VRC, it was a bit too big and cumbersome for the amount of space that it took on a floor.
“So, we went back to the drawing board, and tried to bring a lot of the same elements that made the VRC popular—elevating the player on a stage, showcasing their viewpoint to the people around them.”
The new Virtual Reality Sphere features a sleek, futuristic dome with tethered VR goggles. Lowenstein says there will be a variety of games, with input devices modeled to fit the activity.
“The first version that we’ll be putting out will be entertainment, which means they basically pay a set amount of cash, and you’ll have an entertainment experience for a set amount of time, in probably a couple of different games,” Lowenstein explains. “And then the next version of it, which we expect to be on floors also in markets like Las Vegas by the end of this year, will be actually a wagering version. You’ll be putting money down, and you’ll be betting on your skill level. You’ll either lose or win cash or awards, based on how well you play.”
The VRS uses the HTC Vive VR headset, which Lowenstein says is a “room-based VR”—meaning there are integral cameras that track the player’s movements in roughly an 8-by-8-foot play area. Players can move around within the sphere, which he says adds to the experience of a game like Brookhaven Experiment, where “monsters are coming at you from 360 degrees.”
Lowenstein says Gamblit is currently looking at a wide variety of content for new VRS games. “We’ve been speaking to multiple developers throughout the gaming industry, and we’ve been looking at a couple games that are a lot more fun, light-hearted and simple.”
IGT’s Siege VR, previewed at G2E, also uses HTC Vive technology to create the experience of defending a castle from invaders.
“The company first presented Siege VR as a technology application demo,” explains Monteverdi. “The intent was to gauge operator interest, collect feedback and fortify IGT’s position as a leader in innovation. The feedback was astoundingly positive, but there were questions about how casinos could monetize the solution within the context of gaming.”
By the time of the February ICE Totally Gaming trade show, the company had developed its second route to monetization by pairing the Siege VR content with IGT’s tournament platform and Tournament Manager systems solution. “Two players work cooperatively to defend the castle, while scoring is based on hit targets, and is shared by both players,” Monteverdi says. Siege VR is equipped with a customizable state-of-the-art VR stage, he adds, “giving players a fully immersive experience and providing casino properties with an attention-gaining mechanism for highlighting the VR product.”
The Siege VR game was created in IGT’s San Francisco game studio in collaboration with external VR experts.
Monteverdi comments that Siege VR’s castle-defending game is only the beginning for its VR offerings, and the company’s mission in using the technology is to create new experiences that will appeal not only to younger gamers, but to a broad range of casino customers of all ages.
“We are not only exploring the traditional shooting games that are very popular with millennials, but we are exploring games that are more traditional to demographics that visit the casinos,” Monteverdi says. “For example, the Siege VR game, being a shooting game, is considered a game capable of appealing to a wider demographic than only the millennials. But we are very much focused on sports, and we have significant titles and significant content that will be designed to a specific segment that is not the pure millennial.”
Scientific Games’ Kelly says his team has been working on virtual-reality applications for some time, and has filed for several patents on products to be commercialized soon. Scientific Games’ Innovation Lab typically works on products around two years from commercialization, so there have been no product announcements. At G2E, customers viewed some of the company’s VR technology in private areas, with no details to be released to the public (or the media) until the R&D team perfects them.
However, Kelly is quick to point out several developments in the commercial VR world that have sparked his team’s interest—generally products that will be viable in casinos after a few advancements in technology.
“I think there will be some people that do some great innovation to get VR off the ground, show something different, and then add some creative content—something that’s unique,” he says. “Maybe new game mechanics that have never been visualized. I think that’s where there will be an area of opportunity for newcomers to try to penetrate the market.
“The big boys and girls, they really just want to have a friction-free, fast-play, fast-monetization product, and I think VR’s a little bit slower. I think it’s niche today.”
However, he says advancements in the commercial VR market mean VR will eventually become more than a niche product. And, he says, one area on which to focus will be sports—eSports or virtual sports. With
eSports, the viewer drops in on the virtual universe experienced by the player. With virtual sports, VR can place the viewer right on the field, or on the track for a horse race, or at the wheel in a car race.
“With virtual sports now, you sit and spectate; you watch a horse race, for example,” says Kelly. “And you spectate with the director’s view of the race. With VR, you could literally pop into the track, and be anywhere on the track. So, I can have my own camera view, my world view, from wherever I want to be. Say I want to sit on top of the fastest rider’s horse. I can now be on that horse.”
He adds that the concept can also apply to any shooting-style video game, “so when the shots are flying past, they literally fly right past your head and kill the guy right behind you. The bullets fly right through you—because you’re not in the world; you’re just a spectator standing there in the world, watching like the battle’s going on around you.”
AR and Online
Of course, the emerging technology of virtual reality comes with a first cousin—augmented reality. AR technology allows the viewer to navigate the real world with virtual elements added in. Casinos are considering multiple uses for the technology, from wayfinding—imagine seeing the path to the restroom marked in front of you with a bright yellow, winding arrow—to games in which objects pop up in real time to grab for level-ups or other gains.
AR went mainstream, big-time, last year with the Pokémon Go craze, which had people walking around glued to their smartphones, their on-board GPS ability used to locate, capture and battle creatures that would pop up on the screen as if in the same real-world location as the player.
Many casino operators and suppliers see unlimited potential for AR, and the fact that no cumbersome hardware is required—cellphones or Microsoft HoloLens-style glasses work fine—means the technology could find its stride much more quickly than VR.
“It’s not that I’m bearish on VR; I’m bearish for its use cases for LBE at this state,” comments Scientific Games’ Kelly. “That doesn’t mean that firms like ours won’t come up with a use that works for LBE. But AR, on the other hand, I’m fully bullish on. Part of the reason is it can actually operate on your own cellphone—the existing device you have on your hip.
“That picks up a lot of the benefit of VR, and helps customers and employees in the brick-and-mortar casino give more information, do more things. It’s basically your own personal visual signage and personal engagement device, but laid on top of everything you see with your own eyes. And when you see what happened with Pokémon Go when adding gamification to it, we think we can leverage that in a powerful way.”
IGT’s Monteverdi is similarly optimistic on AR.
“AR is part of our roadmap,” he says. “In fact, in Europe, we just launched interactive augmented reality solutions in the lottery segment. At this point, we are looking at augmented reality in casinos as an extension of our PlaySpot technology.”
PlaySpot is IGT’s mobile on-premise product that allows players in a land-based casino to play games through their smartphones while connected to the casino Wi-Fi. “The idea is to add additional content on that slot that includes virtual reality—for example, the ability to have a treasure hunt in the casino, and instead of looking for Pokémon, you’re looking for other objects with which you can collect money or loyalty points.”
Of course, VR and AR offer countless other possibilities going forward, not the least of which is in the online gaming arena. The general consensus among experts, though, is that full implementation of virtual reality in an online casino—for instance, walking through a virtual casino, stopping at a table game or slot, etc.—will need to wait for technological advances, particularly in the coordination between software and headsets.
Monteverdi comments that one challenge in applying VR to iGaming is latency—the delay between the time a player moves his head and the time he sees a new, corrected version of the scene. “Interactive gaming relies heavily on remote connectivity, with everything being done over the air,” he says. “I can see a future potential that games will be developed in a way that latency won’t be an issue, and we’ll be able to monetize them in the interactive gaming space.”
Exploring the Possibilities
Over the next year or two, operators across the casino industry will be exploring how best to marshal virtual-reality technology that is already blossoming in the commercial world.
They will have lots of help, from outside consultants to their own customers—as evidenced by some pioneering efforts in Canada. In Toronto, consultancy Research Strategy Group has set up a fully functioning virtual-reality lab. According to Managing Director Jim Peterson, RSG has been doing market research and planning in a number of industries, including more than 20 years working with gaming industry clients that include Ontario Lottery and Gaming and Alberta Lottery and Gaming.
Peterson says the VR lab—the technology is portable; the company recently set up a lab in its Las Vegas office for operators there—is looking at more than the gamification/monetization of the technology. “We are currently in talks with operators about establishing a responsible gambling room within a casino that, if it works well, would be rolled out across 25 casinos,” he says. “The more we can create environments before people invest in the environment, the better off we will be. In the case of this responsible-gaming site, they’re trying to make it look more friendly.”
He says working with VR to help design responsible-gaming areas has applications well beyond this particular function. “The idea is to look at a variety of options in terms of peak colors, the look, the design… We can do that in a way it’s never been done before. Formerly, you would have to look at printouts or color Xerox or boards—quite complicated, and you couldn’t change them out immediately. Now, with the push of a button, we can change the color of the paint, or move furniture in or out.
“It could be used to determine where we want to place signage in the casino. It could be used for the redesign of a bar, looking at layouts for where the slots should be, or the number of products in slot selection.”
Meanwhile, in Vancouver, British Columbia Lottery Corporation recently called on its customers to help in monetizing VR in game form. BCLC held a “hackathon” at one of its Vancouver-area casinos, in which a contest was held to see who could come up with the best game utilizing virtual-reality technology.
“We sponsored a weekend hackathon and offered a prize to the team or person that came up with the best idea for a new game,” says BCLC CEO Jim Lightbody. “It started on a Friday evening at 6 p.m., and there were more than 200 people there. Five people that had never met before joined up, and by 3 p.m. on Sunday they came up with a virtual reality game.
“And not only did they win a cash prize for winning the contest, but also we gave them the opportunity to refine the game and work with us. So they formed a company, and we’re currently working with them.”
The winning game, called Gold Smash, is a group game in which one member defends a pot of gold while others are throwing objects at him. “We see the game actually being played in a land-based environment, where people would join in to play as a group,” Lightbody says.
Another game coming out of the hackathon has players trying to escape from a room amid several gambling-themed elements. Lightbody says it’s part of an effort to expand beyond the traditional vendors when considering virtual reality. “We’re not against working with any of the traditional vendors, but virtual-reality technology is actually a booming business here in Vancouver,” he says. “So, we’re challenging them to come up with some concepts for us.”
Virtual reality may have taken decades to arrive in the gaming-industry lexicon, but all agree that its rise from here will be rapid, particularly as technology advances and hardware is refined. “I would suspect that within 12 months, we will see much more portability, more easy-to-use glasses, lots of people investing,” comments Peterson. “Once there is consumer acceptance and ease of use, the casinos will no doubt be, if not leading, right there. I think within one year we may see a very different casino world.”
“Miniaturization of everything, improving the latency—meaning that there’s zero perceived latency when you move your head—they’re making huge strides in that,” comments Scientific Games’ Kelly. “What we’re focused on here is the design process—that we’re creating games that people actually want to play, and we’re creating environments people actually want to be in.”
Kelly adds that wireless headsets, and the creation of environments that do not require human operation, will speed VR’s implementation on a wider scale. Headsets that are used by a parade of customers, he says, must be replaced by a system that allows customers to use their own devices. “Let’s say you use hair gel,” he says. “I’m not going to want to use that headset right after you.”
“I think it’s going to take partnerships between the gaming developers and the operators themselves” to develop the technology, says Gamblit’s Lowenstein.
“The only limits are what we put on it,” says BCLC’s Lightbody, “and I think that’s why it will be interesting for the industry to really open our eyes to new perspectives on how we can bring new entertainment to the players we currently have, while attracting new players into our sphere.”
