Game Selection Criteria (Part 3)

Next in this continuing series, we will look at the past and present of the multi-denomination phenomenon with a discussion on mixing denominations within a single gaming device and how it is changing the way we analyze our game performance.

When discussing game selection for a casino, you might think about commenting on a particular game theme that has gained customer popularity and is easily recognizable by title or theme. But let us look at another game type that continues to grow year after year and that is a virtual blur when discussed: The limited-to-no actual theme recognition. As you might have already guessed, it is the multi-game! Multi-game devices have been around for over 10 years but have gained little attention, mainly due to the complexity of the devices.

That complexity we are about to address, and why these games have not grown as fast as the primary leader in denomination growth (the penny denomination), is based on the capability of current slot tracking systems to report individual popularity and revenue for each denomination and game offered for public play.

We have addressed the need to accurately analyze each denomination in previous articles in this Game Selection Criteria series, but the multi-game and multi-denomination platform presents its own set of complex metering metrics. As an example, as to how complex the process might get, consider that the average multi-game device displays 12 games offered for play. Within these 12 games, each may offer up to eight denominations, with individual hold percentages assigned to each denomination. When you multiply the 12 games offered for play by the eight denominations assigned to each game, the device represents 96 different devices rolled up into one, which reports one coin-in, win and weighted hold percent.

What used to be a simple spreadsheet with each machine identified by a common denomination and hold percentage has evolved into a highly sophisticated series of spreadsheets that drill down into each gaming device, rooting out hidden numbers that represent popularity and revenue opportunities.

I bring up this point in our discussion on selecting the right mix of games and denominations for your casino floor so that we do not overlook the responsibility required for the care of this hybrid version of an electronic gaming device once it is purchased for your gaming floor. And, yes, I did say “care”! With all the capabilities this device offers a slot director (in being able to change game types with no conversion cost through a simple selection of a game library), without careful analysis and planning, the game is capable of under-achieving when denominations and game types are not carefully paired.

The pairing of denominations to game types is a critical function within the programming of the game library. An example of a poor pairing decision would be to allow penny play on a standard four-coin wager Keno game. The reasons for this are that the maximum bet was never engineered for a wager high enough to support penny play, and a customer could easily wager one penny at a time with no desire to increase the wager, as there is no offering of bonus pays based on increased wagering. This is a simple example of improper pairing that reduces the earning potential of a device destined to support server-based gaming in the not-so-distant future.

For the difficult task of game selection in the multi-game platform, it is best to take a logical approach to define which denominations and hold percentages are equivalent to a standalone device of the same model on the casino floor. For example, if you have a popular video Poker pay table in a standalone cabinet that generates above house average in a quarter-only denomination, you should include that same pay table in the multi-game library — but only allow quarter play and do not include the other denominations. Just because the other denominations exist does not mean you have to make them available.

With so many options, over-saturating game types in a multi-game platform is easy to do, making the average slot department unable to monitor the daily affect certain games have on the performance of the multi-game devices.

The original concept of the multi-game platform did not include multi-denomination, only multi-games, allowing customers to select their game of choice. This type of new gaming platform supported casinos’ attempts to provide a blend of all games for their customers, so they did not have to move from one machine to another.

Multi-denomination soon followed, allowing casinos to support the changing habits of customer wagering. What once may have been a dollar market changed to a quarter and nickel market without costly conversions. Though these offerings from the various manufacturers supported reduced cost of conversions, complications in game and revenue reviews surfaced, with operators unable to easily identify under-utilized games within multi-game devices.

With the introduction of multi-denomination came the need to recognize penny players, as these games reduced all meter counts down to pennies, instead of the actual denomination played by the customers. Dollar players were no longer recognized in the player tracking system for their dollar activity, as all meters on a multi-denomination machine were forced to increment as pennies. So began the great penny boom that continues to grow faster than any other denomination, due mainly to the fact that most games today have some multi-denomination feature added to them that reduces the meter count to pennies, giving the illusion of increased penny play.

Multi-games can provide a casino with the variety it needs at various times and can allow patrons to sit next to or near each other while playing the same or different games, which standalone games are restricted from providing. Multi-denomination devices also support a mass-marketing campaign tailored to all gaming wallet levels, allowing longer time on device and the capability to reduce the average wager when payouts are not as plentiful, but also motivating a gambler to increase his or her wager up to the next denomination when the machine is in a pay cycle.

Before over-saturating, your casino with multi-game/multi-denomination products, make sure your statistical infrastructure is situated in such a manner that analysis is available to report on the individual games in your multi-game devices. Limit the variety of games and denominations to a level you are comfortable analyzing. This will assist in supporting the growth of this product and increase your overall revenue through concentrated reviews in over-saturation or loss of popularity.

At the end of the day, and in the not-too-distant future, server-based gaming should take the sting out of this analysis, with comprehensive reporting tools designed to alleviate the burden of manually analyzing the various games’ performances in multi-game/multi-denomination/multi-confusing devices.

The game selection process is a complicated puzzle with an abundance of pieces from which an operator can choose. Besides the visible attributes of slot cabinets, manufacturers, game models, and video monitors versus reel spinners, there are other attributes that are not as visible to the gaming public, such as hold percent and hit frequencies.

While the hold percent of a game is typically chosen to fit within the denomination of the device (meaning that, typically, a casino would decide on a range of hold percent options for each of its denominations), hit frequency does not follow the same rule.

How can hit frequency have either a positive or negative affect on your slot floor? Why should we be concerned with the frequency of payouts on an electronic gaming device? To understand the answers to these questions, we need to step back in time to see how hit frequency has evolved.

Defining hit frequency simplistically, think about a coin — heads on one side and tails on the other. When we flip the coin in the air and let it fall to the ground, we expect to see either a heads or tails. With only two possible outcomes, we could calculate the hit frequency of the two-sided coin as 50 percent. Though we know that each flip resulting in heads will not automatically be followed by a flip resulting in tails, due to variations in the number of rotations the coin takes in midair and the impact of the coin as it hits the ground, but given enough flips, the count of heads results versus tails results will equal out.

While the hit frequency, or payback frequency, does not define the amount of the payout, it does provide the operator with an expectation of how often a gaming customer could realize a payout from the gaming device. This is an important component of the gaming device when casino operators are seeking an increased frequency in the payouts for their customers. Customers frequently recognize payouts as a form of defining whether a casino has loosened its machines or, on the flipside, tightened them.

A lower hit frequency supports increased frequency of the top jackpot, while a higher hit frequency decreases top jackpot hits, instead paying lower amounts more frequently. When selecting gaming devices for a casino, it is best to understand the marketing strategy designed for the facility and what the public perception of the gaming profile will be regarding slot machine payouts. If the casino intends to promote jackpot winners, the machines sporting a healthy payout frequency of 50 percent or better will probably not award enough top jackpots to your customers to make an impact on your Wall of Winners.

In the past, when slot machines were designed as single-line, 3-line or 5-line machines, hit frequencies ranged between 8 and 30 percent, with the 5-line machines operating in the 30 percent range. The average number of reel spins to complete a full cycle of all payouts in the game library was approximately 10,648, with 22 symbols on each of the three reels. With the current proliferation of lower-denomination and multi-denomination devices supporting the penny denomination, the number of wagering lines continues to increase and so does the payout frequency. With an increase in wagering lines, the machines begin providing increased payouts but in smaller increments.

Over the course of time, and with the casino industry asking for an increased frequency in payouts, manufacturers developed new slot games capable of extending the time on device through more frequent payouts.

Payback percentages have now reached the 100 percent range, offering gaming customers a payout on every spin. In order to provide the high frequency of payback offered on these new gaming devices, hold percent has increased and top jackpots have decreased. Average payouts of $1 to $10 have been replaced with average payouts of 4 cents to 40 cents.

Marketing tools designed to attract repeat visitation, such as player tracking systems and bonus points, take on another challenge to control, with increased payout frequencies that are nearly double that of a Video Poker machine. In the past, point systems attempted to make up the hit frequency difference between reel spinning machines and Video Poker machines by awarding reel slot players 2-to-1 over Video Poker players. For example, every $10 of coin-in played through a reel machine awarded the player 1 point, while the video machines required $20 in coin-in to receive 1 point. Those marketing departments that opted to award bonus points based on theoretical hold did not realize the same impact of higher payback percentages as those that based bonus point rewards on coin-in.

Imagine having a significant number of machines on a casino floor that host payout frequencies of 80, 90 or 100 percent, and watch the overall effect the coin-in from these machines creates on a marketing bonus point program tailored for machines having hit frequencies in the 20–40 percent range.

As you might note, payout frequency is a very important aspect of the design for the casino floor, with far-reaching impacts if not carefully selected when planning the initial denomination hold percentages and future game changes.

Adding to the development of games that offer increased time on device, manufacturers provide a wide variety of themed games with bonus features that offer gaming customers periodic opportunities to participate in bonus rounds to win additional payouts.

 

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