The long-term performance strength and popularity among players of hold and spin style games over the last 3 years is forcing many clubs these days to rethink their gaming floor strategy. All managers have to purchase based on game performance because the players are voting directly on the games they prefer and you ignore the customer’s preferences at your peril. By doing this we are not really considering the types of games we are buying and replacing, so maybe there is an opportunity to think a little differently about how these preferences are managed?
It is a fact that the 88-89% return to player games in our industry are done, with 91-93% games now the norm. From the players perspective, this change is positive. Their extra wins become higher turnover as they play their winnings back through the game, and their original investment lasts for much longer. Added to this are the more exciting and interesting features that the higher percentages allow, and it is no surprise that the players are voting for more of these games. They are a reality of the market-driven aspect of our industry.
Hotels are being very aggressive in moving to a 7-6% hold as long as the turnover is there to support it, and for many clubs the need to compete with that is vital. However, the two venue types have very different business models. Hotels are happy to take a smaller percentage of net as long as the turnover increases by a large margin and with a max of 30 machines, this is what has been happening, as hotels move to almost a total floor full of hold n spin style games. In clubs, with larger numbers of machines and occupancy at much lower levels these increases are harder to come by, and more difficult to maintain.
Segmenting the gaming product can be completed in two ways:
This is the easiest, and just compares like-for-like product. For example, if you analyse your data so that you are just looking at a comparison of premium links only, or SAPs only, to see where performance levels are at within that game type, you can convert poorer performing games that sometimes escape notice because they are not among the bottom few games on your ranking charts. If you can no longer convert them because games aren’t available you can trade the same type of product out that you are bringing in. This has the added benefit of protecting your hold percentage. For example, if a premium link is in the bottom 25-35%, and at a higher percentage because of the jackpot, it’s probably earning around the same net as a lower ranked standalone game.
This form of segmentation is more difficult and requires a good knowledge of your gamers. Different types of players favour different product types (i.e. grannies on old Hyperlinks, or men on high denom games), and also prefer to play in different spots on the gaming floor (i.e. smaller day players like to see who’s coming into the club and tend to sit around the door or in high traffic areas of the floor – they are there for social reasons). Taking advantage of these preferences, and building spaces on your gaming floor to suit, can promote different types of games and add to the players comfort when visiting on a very subtle but effective level.
Larger clubs have been segmenting their gaming products for many years because they have larger spaces that almost require it in order to succeed. And all clubs have been segmenting their high and low denomination games, but we don’t tend to treat other aspects of our floor in the same way. Often we will purchase a new SAP game and trade out an old standalone game based on the fact that the game is just at the bottom of the rankings. We certainly don’t think much about where we place it on the floor, often pulling out an old game and putting the new one in the same position to save having to move machines around.
Purchasing on performance is great, but considering who is playing a game and where we place it is a much more nuanced way of dealing with games that feeds into a player’s needs as well. It provides a more individual experience for the players that might give your club a point of difference in a very competitive environment. We wouldn’t put a $1 game in the middle of a bank of 1c games because we understand the players are different, but we don’t tend to consider the differences as gamers between a 20-year-old male, and a 70-year-old woman when it comes to situating games or providing comfortable spaces on gaming floors to suit.
Some important advantages to product segmentation:
- It forces you to look for game variety when purchasing.
- Every club has the same games available so segmenting the game types on the floor allows you to feature the differences more effectively.
- It ensures you are thinking about what types of players you have during your different trade periods. Smaller day players prefer games that give them a longer period of play with smaller wins, so standalone or entertainment style games should be placed in high traffic areas favoured by these players (e.g. bingo players, pensioners, older players)
- It stops you from scattering different types of games around the club where players don’t find them as easily. If you have a standalone game among a group of SAPs, performance of the standalone game won’t be strong, but banking them up together in an appropriate spot on the floor, should see improved performance results
- It makes you consider your bank set up. Many groups of players prefer to play together and will favour similar types of games. The bigger players, particularly the 50+ female group that come in at night, prefer mid denom games and SAPs with good mid-range pays, so placing a mix of these games in the one area means these players get to chat to each other while playing, enjoying the social aspect of their visit to the club.
It’s not always easy to do, but segmenting the gaming floor provides an interesting point of difference from a player perspective, and protects your net hold a little when considering future game purchases by only comparing like-for-like games.
Article by Justine Channing, The Drop