November 21, 2006

Game Terminals - Vegas and IGT go Multiplayer

Slot machine makers, keen to find a new selling point for a traditional game, are trying to increase the social aspect of slots by linking up machines so players can share payouts and the thrill of winning. The pace of U.S. slot machine sales has slowed in the past few years, after a period of strong growth when most casinos switched from older coin-based slots to machines that issue paper tickets. In Nevada alone, slot machines generate about $8 billion in annual revenue for machine makers, according to the Association of Gaming Equipment Manufacturers.

In Nevada alone, slot machines generate about $8 billion in annual revenue for machine makers, according to the Association of Gaming Equipment Manufacturers.

"I think the whole industry has to look at ways of making the industry more interactive. I think there will be much more communal playing—it adds to the overall excitement," Paul Oneile, CEO of Aristocrat Technologies, said at the gambling industry's annual trade show held last week in Las Vegas.

The trend began last year with the latest edition of the popular "Wheel of Fortune" slot game from International Game Technology, which allows up to nine players to sit around a large spinning wheel and share in the winnings.

"The interest was incredible," said Ed Rogich, vice president of marketing at IGT. "The spectator value really makes it a fun draw."

Slot machine manufacturers are moving toward "technology that will allow operators to reward customers more easily and increase the communal nature of slots," Goldman Sachs analyst Steven Kent said in a research note.

IGT now offers an Indiana Jones-themed multiplayer game, Rogich said, while rival WMS Industries Inc. is marketing its Monopoly Big Event communal slot product.

"A powerful and developing trend over the next two years will be the movement toward multi-station, communal play gaming devices," Merrill Lynch analyst David Anders said in a note.

Aristocrat's Oneile said multiplayer slots could eventually integrate into a network environment, known as server-based gaming, which is heralded as the next big advance in gambling technology and would allow casinos to download the latest games from a central server onto individual machines.

"Server-based gaming will expand the potential of these types of games," Rogich said, but the technology is still being tested in casinos and the pace of regulatory approval for it is "difficult to predict."

IGT Chief Executive T.J. Matthews described server-based technology as an "on-going question."

J.P. Morgan analyst Harry Curtis said its adoption was "inevitable" but would not begin in earnest for another three to five years. "Or until operators are more comfortable with the return on investment proposition," he added.

New technology is also changing table-based games, by allowing players to play them electronically, according to Mark Yoseloff, chairman, president and CEO of Shuffle Master Inc. Though not yet popular in the United States, Yoseloff said Australian and Asian casinos have embraced them.

Rogich said new technology being launched in Macau, where gamblers stand two or three deep and bet on those at the table, can allow for an unlimited number of players at tables.

Posted by staff at November 21, 2006 07:32 AM