If I were to tell you that there is an existing casino slot machine game that has a wide following among players, is inexpensive to manufacture and contains a high yield for the operator (traditionally somewhere between 8 percent and 14 percent house hold), but that is being substantially ignored by both gaming manufacturers as well as casino operators, would you know to which game I am referring?
This game has been a staple of casinos for a very long time. It is a video game that is easy to play and commands a wide audience of players (numbering in the hundreds of thousands) but has always been treated mostly as an afterthought. This game is loved by casino players but has remained largely without innovation for a very long time.
While slot manufacturers have invested millions in new game acquisitions, design, manufacture and innovation, at G2E 2010, only one manufacturer actually showed this game—and only this manufacturer has shown an understanding of this game, its appeal, its profitability, and its wide applicability to a range of markets and adaptations. This is particularly significant in the light of the recent economic conditions and the devastation that has impacted the gaming industry nationwide as a result of the recession.
As of the second quarter of 2011, the gaming industry is finally emerging from that recession. Slowly but surely, all current and recognized economic indicators point to successful growth throughout 2011 and into 2012. While it is true that not all gaming jurisdictions will see equal growth, or equally sustained economic recovery, the fact nevertheless remains that both gaming equipment manufacturers and gaming operators can collectively look toward a much brighter future. Signs of this could already be seen at the 2010 Global Gaming Expo in Las Vegas. Nevertheless, there is still a way to go before complete confidence and security are restored.
Everyone, it seems, is looking for a way to recapture profitability at pre-recession levels and reduce operating costs and manufacturing costs, while at the same time maintaining the momentum of new casino and casino equipment innovation. To slot manufacturers, this means continued investment in new games, new technology and increasingly more complex gaming machines and options.
Such ongoing growth and innovation is always welcome in any business, including slot manufacturing and gaming and casino operations. Slot manufacturers, in particular, are finding competition fierce, not only in innovation and machine design and manufacture, but also in the battle for casino floor space. Many of the industry’s giants have seen significant erosion in the percentage of the casino floor that their products have traditionally commanded. While competition is not necessarily a bad thing, under the current economic conditions, ongoing capital investment in slot machine innovation and manufacturing does have a meaningfully significant impact on any manufacturer’s bottom line.
Therefore, it seems increasingly more puzzling that while manufacturers are investing so much time and capital in the manufacture of ever increasingly more complex slot machines, this one tried-and-true staple of casinos with an already established player following and a high profitability yield remains completely overlooked and forgotten.
So what is this forgotten game? Video keno.
If you’re not surprised at this, then my question to you is this: Why have you not invested in the development of video keno? If you’re an operator, my questions to you are these: Why do you not carry more video keno product on the casino floor, and why do you not ask your gaming supplier for new video keno innovations?
If you are surprised at this, how is it that your gaming research has missed this incredibly valuable game? And, if your research has not missed this game, then why are you allocating so much money, time and effort into investing for the creation of hugely complicated and expensive slot machines, many of which will not last on the casino floor beyond the trial period or will disappear shortly thereafter, while tens of thousands of enthusiastic video keno players continue to play a product that is essentially 20 years old? Why is everyone ignoring video keno?
The short answer to this last question is that, actually, not everyone is. While all of the major slot manufacturers have seemingly been ignoring video keno almost completely, and while many of the smaller manufacturers have simply never even bothered with this game, at the most recent G2E, one up-and-coming slot manufacturer has treated this game with the zeal and enthusiasm that it truly deserves, creating great innovative products based upon its time-tested and proven principle. That manufacturer is Incredible Technologies, and that product is a series of innovative video keno games based upon the Magic Touch® platform.
Not only has Incredible Technologies taken a giant leap forward as a slot machine manufacturer, but it has also understood that success in the broadest markets is not necessarily dependent upon increased complexity of the slot product or the seemingly endless overabundance of bonuses upon bonuses and ever-multiplying bells and whistles. Incredible Technologies has clearly understood that not all visitors to casinos go there to play mind-numbingly exhausting penny slots for merely a few pennies per line, but that many players go to casinos for the single reason for which casinos exist: They offer a safe place in which to gamble. On that note, “gambling” is not, and should not be, a dirty word. Not everyone is enthralled by calling our industry “gaming.” Most people do not go to casinos to “play games;” they go to casinos to gamble. And that is a fact.
Slot machine manufacturers and casino operators have been, in recent times, losing money, not only because of the economic conditions of the recession and the erosion of the financial stability of the middle class, but more so because they have forgotten what it means to “cater to the gambler.” And video keno is primarily a gambling game, first, last and foremost. Even in its barest and simplest treatment, video keno can be entertaining. And while there have been some innovations for this product in the past, there has been little change in the past decade.
In order to find out why Incredible Technologies has taken this step forward in investing in innovation for video keno, I recently spoke with Richard Ditton, executive vice president of product development at Incredible Technologies. The first, and most pressing, question: Why keno?
Victor H. Royer: At G2E 2010, Incredible Technologies (IT) was the only manufacturer to showcase video keno. Why does the company think it is worth the investment?
Richard Ditton: As a smaller company, IT has always looked for areas that larger companies are ignoring, and we explore the markets for growth. Leading keno products have not been updated in a very long time, and we see potential for growth in the sector by integrating some fresh ideas into the base game that players have grown accustomed to playing.
VHR: Why does IT think that other manufacturers are ignoring video keno as a viable game?
RD: It’s dominated by a very large company that has a virtual monopoly on keno. Most would say that they’re unbeatable or it’s not worth the risk in investing in its development. In our case, we were starting with a fresh slate in the development of Magic Touch—adding keno games to our collection was a logical addition to our overall plan.
VHR: How did IT come to focus on video keno as games viable for inclusion into the Magic Touch series of products?
RD: Keno is one part of our overall strategy in the Magic Touch brand. We’ve designed our collection of games to be versatile—meaning capable of offering outstanding stand-alone games in addition to compelling multi-game collections. Keno and our poker games are at the core of our multi-game strategy.
VHR: How did the idea for the new video keno games offered by IT come to be?
RD: Analysis showed that keno is a very popular game in particular markets, and our development team saw room for improvement with core technologies being built into our new Magic Touch casino games.
VHR: Who was chiefly responsible for bringing these video keno games to IT?
RD: All of our products are a group effort, drawing from our years of experience in the coin-operated video game market. I wouldn’t say there was one person responsible for the effort—it was a team initiative.
VHR: How were they developed?
RD: All development took place at Incredible Technologies’ headquarters in Arlington Heights, Ill. We have an extremely talented team of game designers, programmers, artists, sound engineers and mathematicians. [Editor’s Note: CEM took a trip to IT’s office. Watch our video online at www.aceme.org/video_library for a behind-the-scenes look at the company and how they develop games.]
VHR: When did these games begin to be developed?
RD: Development of these games—and the entire Magic Touch hardware, software and cabinet—began roughly five years ago.
VHR: In which jurisdictions are the new IT video keno games currently licensed?
RD: Portions of the collection have been approved by GLI for most Class III markets in the United States, excluding Nevada and New Jersey.
VHR: Why does IT think that now is the right time to release these new video keno games?
RD: Actually, it probably isn’t the best time to come out with new product. The country and the industry are in a bit of a slump, and we plan to be positioned correctly throughout the recovery. Keno helps add diversity to our product portfolio, and a diverse collection allows us to uniquely package and price Magic Touch games.
VHR: Why does IT think that operators will have interest in putting these new video keno games on the casino floor?
RD: We continue to sell them on why Magic Touch Keno is good, because most believe they are happy with the games they currently have. Our task is to prove how much better our solutions are and prove how we can add value and drive coin-in with innovative ideas.
VHR: What has been the operator’s response to IT’s introduction of these new video keno games?
RD: Varied. Most have experienced them only through trade shows and our www.itcasinogames.com website. We’re in the very early stages of product testing, which is the true measure of the success of the product.
VHR: Where are these new IT video keno games currently available?
RD: Again, we’re in the very early stages of product testing Magic Touch Keno and locations are continually changing.
VHR: If not yet fully released, or available in wide release, when does IT intend to release them to all the licensed jurisdictions?
RD: Various product testing will continue on all Magic Touch games throughout the year. We have an aggressive strategy in place that plans for the expansion of the Magic Touch brand of games throughout the summer and fall. Keno is a part of that strategy, though the slot games are at the pinnacle.
VHR: When will IT’s new video keno games be available in Nevada?
RD: We’re planning for fall of 2011.
VHR: Video keno is generally treated as an afterthought by manufacturers and operators. Why does IT think players will be interested in these new video keno games?
RD: Magic Touch Keno is built on the Magic Touch platform to give it better graphics, sounds and game play. We focused on player speed and sought to make the fastest keno games on the market. We packed in new features like Play Hot™ and Play Ready™ numbers. We created interesting alternatives to multi-card keno, such as our new Quad bet system. One option twists the classic game into a low-volatility option called Pop-Up 25™, targeting a different audience. We’ve added exciting new features and accentuated those classic features players have grown to love. We’ve made the game more relevant and fun than our competitors.
VHR: What does IT’s player research say specifically about players’ interest in video keno?
RD: We learned that there are many types of casino players and reasons that compel them to play. It was our goal to create a collection that’s broad enough to cover the genre, yet adaptable enough to target a specific niche. Overall it showed that the game is “old” and out of the psyche of the modern gambler. This is why many of our competitors haven’t risked the development investment to attract new keno players. Creating Magic Touch from the ground product allowed us to do so.
VHR: Who is the target player for IT’s new video keno games?
RD: Discriminating keno players who want a better keno experience than they have been offered in the past.
VHR: Does IT think these new video keno games will be confusing to players?
RD: We’ve been making arcade-style games for more than 25 years. They have to be approachable and understandable in seconds. Casino games are no different. Simply answered, no.
VHR: Does IT intend to create how-to-play information for each game?
RD: Every Magic Touch game has extensive help screens that show the player how to play.
VHR: How would IT interest a regular slot player in video keno?
RD: We plan on offering a well-rounded collection of game genres for this exact reason. Keno alone is not capable of penetrating a significant market for our company. But it adds depth to the scope of our offerings. We’re positioning Magic Touch as a household brand in the industry—a player who plays a Magic Touch-branded slot game and enjoys the experience will have an expectation when he/she plays a Magic Touch Keno game.
VHR: What does IT think players of casino slots should know about IT’s video keno games?
RD: They offer an experience that is more relevant to the slot experience they’re used to today.
VHR: How does IT intend to promote and market these new video keno games?
RD: Our company’s marketing team understands how to market games to a new generation of players—they manage our company’s assets in other channels, such as home console games, mobile gaming and of course, coin-op. Being a new manufacturer affords us the opportunity to take a new approach to marketing our products to the industry and to players.
All of these points certainly are quite valid reasons for investing in video keno as a viable casino product.
All of the video keno games in the Magic Touch series from Incredible Technologies have payback percentages ranging from the mid-80s to the upper 90s. Casino operators in all licensed jurisdictions, therefore, have an opportunity to select exactly the right product for their market and, at the same time, provide their players with an innovative experience on a proven game that already enjoys a wide following in casinos across the United States. As the success of these products will inevitably show, there truly is a market for simple gambling games for players who just want to experience the simple joy of gambling. And, after all, isn’t that why casinos were built in the first place?
Video keno games offered by Incredible Technologies:
• Traditional Keno
• Pop Up Keno
• Super Keno
• Super Pop Up™ Keno
• Pop Up 25™ Keno
• Quad Keno
• Quad Pop Up Keno
• Quad Super Keno
• Quad Super Pop Up Keno
• Winfinity 25 Keno
Victor H. Royer is the President of Gaming Research Services, a division of GSR Holdings Inc. He is a 26-year veteran of Las Vegas gaming, a 20-year consultant to the gaming industry, and the author of 22 books on casino games and gaming. He has also researched and authored more than 100 industry reports. He can be reached at DrVHR[at]aol.com.
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