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IN-DEPTH 19 December 2017
Roundtable Q&A: The Digital Slots Market
Gambling Insider sits down with representatives of the digital slots industry to discuss innovation, regulation and market trends
By Gambling Insider

THE PANEL

Peter Causley, Managing Director, Lightning Box Games
Erik Gullstrand, Vice President of Business Development, Quickspin
Fredrik Elmqvist, Chief Executive Officer, Yggdrasil Gaming
Tom Wood, Vice President and Chief Product Officer, Scientific Games Interactive

How has 2017 shaped up for the digital slots market compared to 2016?

FE: The market is more competitive than ever, and as a result, operators are looking for ways to gain an edge. It is clear now that delivering great games, while essential, is no longer enough to succeed. Instead, the games must also be supported by a promotional infrastructure and added functionality to improve the user experience. As a supplier, this means providing gamification features, such as our Missions tool, as well as other innovative concepts. The other trend to look out for in 2017 is the ever-increasing fragmentation of the value chain. This is an interesting development that presents both risks and opportunities.

EG: There is some great new content out there and there are lots of opportunities for innovative companies like Quickspin. We were purchased by Playtech last year and being within their network is opening up huge new opportunities for us. Not only that, we’re also adding new depths to our games through the likes of our Achievements Engine, which is engaging our players with great gamification features.

TW: The past few years have shown rapid growth in the mobile space. We think 2017 will be a banner year for innovation on mobile. Players are so familiar with their mobile devices that playing games on them has become second nature. That level of comfort with a platform allows game creators to push game development boundaries and create entirely new experiences that surprise players in a good way.

PC: It’s very exciting and there have already been some great releases to the market, both in terms of new games and new features within them. Speaking on a personal level at Lightning Box Games, we’ve debuted some new games including the latest title Panda Pow. As the name would suggest, it features a very amusing Kung-Fu fighting bear! We’ve got some great new games to come later in the year too like RedRoo, and hopefully they will be equally well-received by players.

How is the digital slots industry innovating and moving forward to meet consumer demands and technological change?

PC: HTML5 development is allowing suppliers like us to create much better content than Flash ever did. That is allowing online casinos to host more and more games on their sites and apps than ever before, giving the player greater choice than they’ve ever had. As a society, we tend to dip in and out of things more because we’re busy, playing slots on the daily commute on one device and on PCs in the evening after work. The ubiquitous nature of the 3G and 4G in the western world at least, has helped consumers to do their gaming on the go.

TW: Technology changes so rapidly, and game creators have to pivot to meet constantly evolving expectations. The industry is more poised than ever to quickly adapt to change. Our portrait mode technology is a great example. Vertical orientations – one seemingly minor change – opens up new art and animation opportunities and makes the game even easier for the players, allowing them to spin the reels with one hand. Small tweaks disrupt the industry and create positive change.

EG: Consumers are becoming more and more discerning and know what they do and don’t like. There is no shortage of choice these days so poor games will not survive for long. I think players are also asking for greater levels of entertainment and fulfilment from games. We’ve seen how successful gamification has been in the free-to-play world and we’ve definitely taken inspiration from that for our Achievements Engine, which provides rewards for players throughout the game, not just in monetary terms at the end.

FE: The primary driver is constantly conceptualising and investigating how technology can create solutions to the challenges operators face. That means an ongoing dialogue with operators, and then leveraging our technology expertise and creativity to come up with innovative answers. A major part of this process is manipulating existing technology to fully utilise its potential. On top of that, we are always trying to predict and forecast future developments.

Out of mobile and PC platforms, which has been showing the most potential for growth?

EG: It’s definitely mobile, which shows no sign of slowing down any time soon. So much of what we do in our daily lives is connected to mobile, be it our phones or other devices like tablets. We’re digesting our news on there, using social media, purchasing our goods and seeking entertainment with games like digital slots. We are now able to produce a much more immersive experience on there than ever before. It is a golden time for slots players.

TW: Desktop remains incredibly popular, so it’s important that we continue to innovate on the platform and constantly polish the gameplay experience. That said, mobile shows massive growth opportunity; when you can empower your players to enjoy their favourite games anytime and anywhere, that’s a huge win.

PC: The growth is definitely still very high in mobile, and probably will be for some time to come. I have a feeling it will plateau at some point, but when that is remains to be seen. That said, we’ve always been firm believers in desktop as a channel and talk of its decline is a little premature in my book. Although mobile technologies are improving all the time, there are still some things that work better on the bigger screen. The same can be said for the retail environment.

FE: Mobile continues to grow at the faster pace, and I expect that trend to continue for the foreseeable future. We now generate more than half of our total gross game win on the mobile channel; 52.3% to be exact, and this puts us ahead of most other casino suppliers in the sector.

How is the digital slots industry coping with changes in regulation around the world?

EG: I think it’s pretty robust. Regulations will always be a thorny subject, but it’s not something you can run away from. It is there to protect people at the end of the day so we just have to get on with it. It’s important that we’re compliant, fair to players, and transparent. It’s essential that we take our responsibilities seriously.

PC: As best it can, is the short answer! Regulation is there for a reason, but it is a daily struggle to make sure we’re compliant and up to date with everything we should be, particularly for an omni-channel company like ourselves who operate in multiple markets. It is great that so many places are opening up and de-regulating, but the patchwork quilt of legislation helps nobody, unfortunately.

TW: Meeting regulation requirements keeps our business running, so it’s a matter of careful planning to ensure our products are completely compliant. While vigilant monitoring of regulations is key, we also keep a keen eye out for newly regulated markets. Because we have teams in place to ensure our compliance, we’re poised to enter newly regulated markets quickly, expanding our audience and discovering new players. Just last year, we expanded our online presence to Romania; we were the first online content provider in the market.

FE: Our sector is dealing with the opportunities presented by new regulation in a mixed way. Generally, the larger, legacy suppliers are struggling to adapt when compared with agile newcomers, who tend to have more flexible technology that can meet the needs of new markets.

Has the promise of an omni-channel revolution been delivered in terms of linking digital play with land-based slots?

PC: Yes and no. I think a lot of companies pay lip-service to the phrase omni-channel and aren’t actually producing games across digital and land-based. Very few companies, particularly those who started in digital, have the capability to work across the different sectors. It’s really only the guys like us who started in retail and went digital that have been able to bridge the gap.

In some respects I’m not complaining as it’s great to be able to put the same game into a William Hill shop, a Mr Green app, LeoVegas website, and American land-based casino as we can. But it’s a massive missed opportunity for the rest of the industry, who are denying themselves audiences all over the world.

TW: Omni-channel offerings have become more common as the big players in the industry develop cohesive offerings across channels. There’s still a huge opportunity in the space, but a few notable launches have started to prove the concept. Our CIRQUE DU SOLEIL KOOZA™ launch is an excellent example: the game released with BCLC on mobile, land-based, and lottery simultaneously to fantastic results.

What are the biggest challenges the digital slots industry is facing, and how do you intend to overcome them?

TW: One challenge we face is increasing competition from rising boutique developers. As new game-makers enter the market, we must diligently work to improve our portfolio.

Another challenge for any business that produces content is keeping up with constant change in technology. When new devices launch, new versions change in size, or new functions are added, we have to adapt. Mobile operating systems update often, so those platforms require constant monitoring. The solution here is simply to be as flexible as possible and use development platforms that help us respond to these changes. Our teams continuously monitor the release of new operating systems ahead of time and are always ready to quickly roll out system updates to support those changes.

EG: It’s always a challenge to come up with fresh ideas, as it is in any creative industry. Whether that’s themes, characters, or sounds within games or the maths that lie below, you have to keep innovating. But it’s a challenge that gets us out of bed in the morning.

PC: I think consolidation on the operator side is a challenge as it is narrowing the opportunities for suppliers. It will doubtless lead to further consolidation on our side too. But the solution is to keep on producing good quality content that players want to play. There is huge competition among suppliers at the moment and it is survival of the fittest out there. But I’m a firm believer in the fact that the cream will rise to the top and quality content will stand the test of time. People will always want to play good quality games that entertain them.

FE: With thousands of slot games available, the biggest challenge is to create something fresh, new and engaging. That's why we place such a strong emphasis on innovation, and also take our time with new releases, rather than promising hundreds of games every year. While we are always looking to be innovative, we still need to create titles that resonate with players. And we are always looking for the next big game-changer. That may be a new piece of technology, a new concept, or a new position on the value chain.

Do you believe there are any new interesting emerging markets geographically for digital slots?

PC: Funnily enough, we were asked about Japan the other day. It’s not a market that I know an awful lot about, but if regulation comes and they take to slots like they’ve taken to video games then that could be massive. We’re all still waiting for more of America to grasp the online nettle, of course, and the two obvious ones are Eastern Europe and Latin America. If mobile adoption rates in the latter area in particular are anything to go by, then you have a huge ready-made digital slots audience waiting in the wings.

EG: There are always new markets opening up all the time. As a company that is well established in the Nordics, we’re also looking at opportunities in markets like the UK, where we know our games will be popular. The trick for operators is going to be making sure that they have the right content for those markets. There will always be regional variations, but I think they need to have a broad portfolio of games that offers something to everyone.

TW: We always keep close watch on emerging markets that show interest in the digital slots category. It’s a great space that provides a unique form of entertainment, so we stand ready to serve all markets as our audience grows.
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