By Dan Schrementi, VP of Gaming Sales & Marketing, Incredible Technologies
How’s that for a headline that should never be written?
Yet here we are – the COVID-19 pandemic shook the gaming industry’s most time-tested conventions of slot operations to the core. What we buy, how we use it, where we put it – it’s all different. Like coming out of any major crisis, how we react and adapt will define us. While the pandemic isn’t over yet, 2021 is the year that we need to set the solid foundation to prepare for what’s next.
As head of sales and marketing for a slot manufacturer, I have the benefit of hearing industry trends from customers around the world in brutally honest truth. My job is to listen to that feedback and react by adapting or creating products that add value to the effort. Here are highlights of trends that I’ve heard and how we can adapt our thinking while managing slot floors both during and after a pandemic.
1. Software Is Everything. Convert the Games and Convert the Brains.
If you’ve ever seen a contract to purchase slot games, you’ll notice that the industry norm is to separate the hardware price from the software. The hardware typically accounts for roughly 80 percent of the price of the cabinet, yet it’s the software and all-important game mathematics that generate the revenue. The industry is obsessed with hardware – it drives stock value, tradeshow hype, awards and more. Yet the secret has been, and always will be, that software is the star of the show.
COVID-19 drove hardware sales down almost 60 percent industrywide. Until the rebound, it is finally software’s time to shine in the form of game conversions. What’s your conversion plan? Less is more, and be ready to pay if it proves to be worth it.
2. Convert Less, but Demand More.
Our data shows that conversion shipments were down 20 percent in this past year. Additionally, industry reports show that “active games” in North America fell an average of 12 percent, with some casinos as much as 50 percent for needs of social distancing. This leaves manufacturers with less opportunity to lift performance with conversions, making it critical to be a good game.
When ordering a conversion, ask “why?” If it’s a game with proven results, or a game with a feature popular on your floor – take it. If it’s good, be ready to buy more. But if it’s just a “free conversion” or “filler” – wait. The mindset of “filler” content isn’t helping the casino or the manufacturer, and that effect is worse during the pandemic.
3. Market the Software and Feature the Feature.
Operators and manufacturers know what games work and we think we know why. “Players here like progressives at any bet …” or “This game features a lock and hold free spin …” Decoding statements like this is what game developers do for a living. Why are we not marketing to players in this same way? Netflix markets to us by connecting content we like, and it’s no accident. iGaming is doing it as well.
Challenge manufacturers to explain why a game might work and to what type of player is it targeted. Look for opportunities to market that feature in plain English to your players.
4. Software Conversions May Go Big on Hardware.
One of the challenges that we’ve asked ourselves at Incredible Technologies since the onset of the pandemic is how we can offer economical ways to give the appearance of a new game without actually selling a new cabinet. We came up with software and hardware bundle kits, pairing compatible and performing software with hardware components to build new banks of games. The early days of the pandemic gave our engineers the time and motivation to create these, and the results have shown a meaningful boost in performance with an economical investment.
As you order conversions, determine how they might be used for a total bank refresh. Moving the games, changing the shape to be social distance compliant, adding signage, seating or other hardware like our Infinity Edge or Universal Jumbo Edge – has proven to boost performance over 20 percent in our experience, with a longer lasting impact.
5. Prepare for the Hardware Renaissance.
The pandemic has knocked hardware release cycles off-kilter. By the time G2E 2021 hits, manufacturers will have had an extra year to develop their newest hardware innovations. Incredible Technologies is working on big things, and fully expecting the same from the competition. The pandemic has given us all new perspectives on the future of slot floors, and motivated ideas and innovations to respond.
Capital expenditure spending is down markedly in 2021, and we’ve adapted. Our job today is about optimizing the slot floor to get ready for the next chapter. It’s a pivotal moment in time for our industry, and it’s a moment where I am certain we will rise to the challenge.