Inside Asian Gaming

Oct 2007 | INSIDE ASIAN GAMING able? Did they get offered tea? All those oth- er things make a good gaming venue. Was it easy to get into [the venue]? Was there a [free] shuttle bus service? I think it’s those fundamentals that make people go back to a venue, not that they have particular gam- ing machines.” Strong customer service is reinforced by loyalty schemes to bring people back, says Mr Jolly. “Typically, by getting a player to become a member of a particular club and then building his loyalty through extra giveaways or bonuses or free dinners or whatever, it ob- viously gives an opportunity to bring back a player to that particular venue.” Market shake up There’s no guarantee though that in the future, differentiation in the casinos’ slots offer will remain linked solely to customer service at the venue. When asked about his business philosophy during a recent inter- view with American network CNN, Las Vegas Sands Corp (LVS) Chairman Sheldon Adelson said: “You have to challenge the status quo, you have to change the status quo, and if you change it in any business, success will follow you like a shadow.” Science is already challenging the slots status quo. “The technology used in the industry is moving and most manufacturers are moving to downloadable or what we call server-based games and no doubt that technology will continue and slowly grab momentum and if successful it will grow quickly,” says Mr Jolly. “Ticket in-ticket out systems were slow in being adopted at first, but once people saw the value in it, it took off. “Server-based games will allow players to order downloadable games from their seat rather than walking to another terminal. As that develops, it will allow operators op- portunities to tailor their floors and manage their floors better,”he suggests. Content-based deals The advent of server-based casinogames that can be downloaded to standardised terminals also seems destined to turn slot makers increasingly from showmen produc- ing ornate, gaming-enabled hardware, to pure gaming software publishers. Then, the slot makers will be operating in parallel with the developers of PC-enabled virtual slot programs used by online casinos and home gaming enthusiasts. Ken Jolly says Aristo- crat already spends A$100 million a year on research and development, employing mathematicians, researchers and software programmers at its own facilities in Australia, Japan and the US. If the slots market becomes less about outward showmanship andmore about con- tent, the proprietary knowledge contained within each game will become ever more important. It may allow game designers to come up with probability-based games outside the framework of the traditional fruit machine format still seen so widely in the industry. It will also potentially create new challenges for the regulators in terms of approving and classifying new games. In this new cyber world though, the presence or absence of a player’s favourite game in a casino hall may become as important as whether player bonuses are on offer. Casino-exclusive games In this new world, casino operators could potentially behave like the rival games con- sole manufacturers in the home entertain- ment market—attempting to differentiate their product offer by doing exclusive con- tent deals with individual slot game com- panies. This is exactly the business model adopted by some games console brands. If a game is launched on the mass market and proves a big hit, the console-makers then try and sign exclusive deals with game software companies for the second or third generation of the game, or failing that, the right to launch the game first on their par- ticular platform. In October, for example, the games console maker Nintendo announced it had brokered an exclusive deal with Osa- ka-based game developer Capcom Co. Ltd for the third edition of the latter’s popular Monster Hunter action game. Out of the shadows These new market conditions could also lead to casino slot game branding becom- 27 leading supplier of slot machine prod- ucts, says game logic and graphic style rather than branding usually tell regular consumers everything they need to know about the product they’re using. They ei- ther like it or they don’t, and don’t care too much about who made it. As long as the casino operator understands who made the game and how it’s contributing to the property’s profits, says Mr Jolly, ev- eryone’s happy. He says: “If you went round and spoke to all the gaming machine players in Macau and asked them who Aristocrat is, they wouldn’t know. “But if you spoke to them and said: ‘Have you seen the train machine, or the machine with clowns on it?’, they’d certain- ly understand.” Programmed for success In the casino world, a machine’s artwork and game logic are as much of a branding signature to dedicated slot players as logos on consumer white goods, and Aristocrat’s approach certainly seems to be working. The parent company, Sydney-based Aris- tocrat Leisure Ltd, nearly doubled its sales in Macau, Europe and South Africa in the first half of 2007 to A$57.7 million from A$29.6 million in the first half of 2006. Aristocrat claims the mantle of second-largest slot ma- chine maker in the world. Its first-half profit rose 20% to A$126.1 million (US$102 mil- lion), or 27 cents a share, in the six months ended June 30, from A$105.3 million, or 22 cents, a year earlier. “This business is really about satisfying players,” explains Mr Jolly. “If the players are satisfied then the par- ticular machines they are playing will earn more money, and if the operators are satis- fied then I have a happy customer and am likely to get more sales,”he explains. Mr Jolly says:“Typically in this industry if it’s a good product, every operator will want it. If it’s good it will be good everywhere.” Service counts—for now “People like to play their favourite game. What makes them come back to a particular venue is not that the venue has their game, but that the venue has the customer service, the atmosphere and the experience while they are there. “There’s definitely a loyalty to operators and venues, and that’s all about the experi- ence on the first and second visit to the ven- ue.It isn’t necessarily related to whether they won on the gaming product during that early visit, whether it be table or machine. It’s more about business fundamentals.Were they treated nicely? Was the seat comfort- Slots Future

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