Server-based gaming is expected to take off this year, bringing a string of benefits to casinos and their customers
It has been over a century since Charles Fey invented the first slot machine in his basement. Slot machines have come a long way since Frey’s invention, which was made from cast iron weighing over 100 pounds. Technological advances such as the microchip; ticket in-ticket out (TITO) and random number generator (RNG) have dramatically changed the slot industry for both operators and players. We now await the much-anticipated roll out of the next generation of slot machines that looks set to revolutionize the industry with server-based gaming.
Slot machines have traditionally been stand-alone devices with a single game hard-wired into their circuitry. This is all set to change with the new server-based slot machines in which the games will be stored on a central server, ready to be downloaded in seconds. Terminals will be nothing more than generic or dumb terminals that look like traditional slot cabinets. The devices will have digital screens, graphics and sounds we have come to expect from slot machines. The difference is, when you make a bet the real gaming would take place on a central sever located in a back room or even another country.
Impetus for software investment
So why has this latest technological wave got slot machine manufacturers investing millions in software development? Server-based gaming opens up a world of possibilities for both gamblers and casino operators. We are only beginning to touch on the advantages of this gaming technology. Technology associated with server-based slot machines may even have more potential than the slot machine manufactures are willing to disclose. With the endless opportunities for both slot player and operator, manufacturers want to protect the special features they are planning to install into their particular brand of server-based slot machine.
Server-based slot machines would allow gamblers to select different games, denominations, wagering limits and payouts. This could all be done at one location – no more moving from machine to machine. The ability to choose the most popular games would not only maximize the life cycle of a slot machine cabinet but also significantly increase revenues.
Due to the multitude of themed games in today’s competitive market, games have much shorter lifespans. What is considered to be popular today may lose its attraction after six months. Server-based gaming will reduce lost revenue opportunity from older slot games. Operators will be able replace older games by a click of a button with the most popular up-to-date games. The casino would not only benefit from the increased revenue but also reduce downtime of machines. Staff would no longer be required to open up every single slot machine and change the components; new games will simply be downloaded and peripheral software can be updated for bill validators or ticket printers.
Floor management
Savvy gaming operators have always understood the importance of managing the gaming floor. Having the right layout and selection of machines is essential to maximizing revenues. During certain times of the day, the player demographics may change. Early in the day, a casino may attract gamblers who prefer classic slot games or bingo, while at night, it could switch to gamblers who enjoy high stakes table games or slots with large progressive jackpots.
The advantage of server-based gaming is casino managers can monitor the performance of each machine with up-to-the minute customized reporting identifying “hot” and “cold” zones. Within minutes, the gaming floor could be remotely configured down to each terminal for optimized performance. The time-consuming days of changing the layout of slot machines on a weekly or monthly basis would be gone. The casino manager could change the layout several times a day in a matter of minutes and put in the more in-demand games when and where players want them.
As well as controlling the layout of the gaming floor, casino managers can also control the hold percentage within regulations. During a special event or busy period, casino managers could increase the hold percentage on the fly to boost profits. To attract players to the gaming floor, the payout of certain slots could be increased to create excitement by the presence of ‘loose’ slot machines. The appearance of ‘loose slots’ may produce more volume and more revenue than a higher hold percentage.
Whatever the casinos decide, the entire gaming floor benefits from a dynamic centralized management system.
Customer retention
Maintaining market share through customer retention by rewarding loyal players is important for all sectors of gaming. Customer retention programs have evolved in the slot industry since the introduction of electronic loyalty card programs. Information on players can be stored on loyalty cards, from simple demographics to average bet size or favorite games. A centralized sever-based slot management system could track every spin of the reel as it happens for each player no matter what slot machine they choose to play on. When inserting their loyalty card into a slot machine, a menu of their most liked games would be displayed in their preferred language. The ability to tie player preferences to the content will significantly enhance the player experience.
Frequent player rewards such as complimentary rooms or meals can be communicated via real-time player marketing by a message displayed on the machine. The ability to communicate via your slot machine is not limited to the operator – it can also be utilized by the player with a direct link to the bar. Players would be able to order a drink or something to eat without even speaking to a waitress.
Large progressive jackpots have always been a big draw card for casinos. An example of this is IGT’s Megabucks®. Introduced to Nevada in 1986, it is still pulling in the crowds. The Megabucks® game links machines from various casinos to one progressive jackpot and offers casinos a larger jackpot than they can offer on their own. Sever-based technology would give the ability to link slots from different casinos around the world to progressive jackpots. This would provide an additional incentive for gamblers to play progressive jackpots by giving them the chance to win multi-million dollar prizes that were not available outside of the United States.
New ways to gamble
Not only will a server-based system change the slot machine market it will also create new ways to gamble. Remote handheld devices could be used by gamblers throughout the casino property, from karaoke bars to hotel lobbies. Wherever there is a secure wireless network, guests could use portable remote devices to play their favorite games. Another possibility from the new technology is playing live table games from a slot machine. With live streaming from a remote location, gamblers that become tired of slots will have a full suite of options of live table games – from live baccarat to roulette – without having to leave their seats.
Perhaps the most attractive feature for operators is server-based gaming’s cross-platform networking. Casinos could leverage off their land-based slot machines by offering players their favorite games at home on the internet or on their mobile phones. When players register, they would be given the option to use the same account to play from a PC at home and/or on their mobiles. Cross-platform networking would generate multiple revenue streams, even when players are outside the gaming room.
Floor change
The floor of gaming establishments will change dramatically with the integration of server-based technology. One of the biggest challenges with this new technology is not to overwhelm the player with options. Server-based technology may alienate current players by the myriad games on offer. How casino operators manage the integration of this technology while maintaining the look and feel of a traditional slot machines will be integral to maintaining a base of loyal players.
We are just beginning to understand the benefits of server-based gaming. Gaming machine manufacturers expect to see an explosion in player benefits as this technology is established over time. Analysts have touted 2007 to be the year casinos roll out server-based slots. They expect investment in the new generation of slot machines to drive profits of gaming equipment suppliers for the next five years.
The transformation will not occur overnight. Software upgrades that take a few months to implement in other industries can take at least two or three years for casinos. While there is still some speculation as to what features will be adopted, over the next 12 months one thing is certain – the sever-based revolution will becoming to a casino near you.
