The online slots market might appear to be booming but Gamevy chief executive officer Paul Dolman-Darrall argues it’s the operators’ reach that’s growing not the appeal of the games, and that being overly focused on a narrow, niche product and player-base could see the market rapidly slip away
You would be forgiven for thinking that everyone plays slots and nothing else. Look around ICE or G2E and the flashing lights and endless jingling music of slot games take up most of the floor space.
Yet, in terms of popularity, slots is a niche market. The Gambling Commission’s 2015 survey, Gambling Behaviour in Great Britain, showed 7% of the UK adult population play slots machines and 4% play online. That compares with 46% playing the National Lottery, 23% playing scratch cards and 15% playing other lotteries.
A valuable niche, though, surely? Slots players are often the most valuable set of customers, with high repeat play numbers. Yet in Vegas – the home of ranked slots machines – slots revenues are dropping as millennials increasingly turn away from the game. For the first time, the casinos are making less money from gambling than from their other activities.
It’s a view that often prompts disbelief from online operators. After all revenues from online casino games are growing. What could be wrong with a rapidly expanding and profitable market?
As more people become comfortable gambling online across the world, of course the revenues will grow. There is a niche group of players who love slots, and the older demographic will become more accustomed to spending online. But the growth hides the underlying truth: the appeal of slots as a genre is not growing, merely the operators’ reach.
The trouble with slots
No-one’s suggesting you kill off a game that appeals to a high-spending group of loyal customers but the industry’s obsession with the genre blinds it to other opportunities and risks under-investment in alternatives.
In spite of enormous investment in brand licensing, hardware, software, art and technology, slots has changed little in terms of its underlying mechanics.
The beeps and flashing lights have turned into more sophisticated animations, while the maths has become more complicated to enable free spins and other bonus features, but it remains a passive game that players can only watch in a world where interactivity is king.
On mobile, where players touch and swipe and tilt their phones, a slots game simply plays out, requiring nothing more than a single button press per spin. Whenever critics wish to stereotype the ‘zombie’ gambler, hypnotised into a state of unthinking win and loss, it is to slots machines that they turn.
I feel the more strongly about this because I am a gambler to my core. I will happily bet on anything, snow at Christmas, the Scottish referendum, and any sports match there is – including e-sports – roulette, blackjack, and scratchcards.
In fact, I struggle to think of a game I won’t play… other than slots – a game so boring, I would rather fill out my tax return. And although, no decent entrepreneur or product manager should use their own anecdotal experience as evidence, I know that I am not alone.
There are plenty or sports bettors and lottery players happy to play more games when online, but for whom the existing slots focus is simply unappealing.
The evidence we have seen suggests that between one in two and one in three of these sports or lottery bettors are willing to play more (given the right product), but that only about one in eight is happy with the existing casino offering.
Gamification and its flawed appeal
Casino operators aren’t stupid. They know slots are lacking something, and so they set about trying to fix it. What could be better than borrowing from the games which are succeeding so well with a younger audience – social?
As an innovative young company, we have frequently been asked to add gamification layers to product: league tables, badges, awards, levels, points. Some companies have made an entire USP out of customer journeys that try to layer on a narrative of adventure and progress to the existing slots range.
By definition, we gamify things which are not much fun – fitness, answering surveys, doing the recycling. If you need to add gamification to a game, you are acknowledging a lack of fun in the existing product.
Most slots players aren’t willing to admit they play, let alone share on Facebook or Twitter their overall spend or wins. Where levels and awards are dependent on spend, games designers start to skate close to some very thin regulatory ice around chasing losses or encouraging more play.
Points, rewards and the unlocking of levels, may indeed offer interest to the most committed player – but almost by definition this is the player who least needs it. That is, most of these ideas have little to appeal to the player who only plays a couple of spins if offered a promo.
Rather than fretting about how to gamify slots – which works perfectly well as is for those who like them – I’d rather the industry looked at what products might appeal to those who don’t like slots.
Innovative suppliers are looking at several rich seams of innovation:
• Familiar, more broadly appealing existing game types such as scratch or instants
• Game types that borrow from popular genres such as esports and social gaming
• Games that enable greater interaction and sociability, such as multiplayer and competitive or collaborative games
• New game types that emphasise fun, progress, learning or community
Innovation is costly and frequently fails. Why bother appealing to millennials when the industry can grow by converting land-based players to online or reaching into new markets in Asia, Africa and South America. Millennials are not that rich.
In immediate cash terms they are not the most attractive of customer segments – but they are influential. As the early-adopters of new technologies, brands and ways of interacting with the world, they soon persuade their parents, bosses and social groups to follow suit. Finding types of games that appeal to them can unlock far bigger audiences than just the younger player alone.
They are also the audience that operators will continue to need as their existing player-base ages. As millennials become older and richer, they may well suddenly become convinced that they need to purchase life insurance or financial advice. But nothing indicates that they will suddenly perceive a need for or attraction to slots as a leisure activity.
Put bluntly, at some point somebody will come up with a new game type that works. I hope it’s Gamevy but it could be a completely different entertainment company, external to the traditional igaming industry.
Perhaps, something will emerge as a grass-roots craze, much as poker did. But when that happens, an industry overly-focused on a narrow, niche product and player-base will find their market slips away faster than they can respond.
Paul Dolman-Darrall started his first business at nine, selling ink cartridges to kids with fountain pens. Since then he’s worked as a senior business analyst at John Lewis, a business transformation manager at Gap and vice president of business change at Barclays. He co-founded Gamevy in 2013, where he is chief executive officer.
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