Saturday, February 16, 2008

Felt tables and MMOs, and Match-3's of a different kind

One of the sessions at DICE that I found particularly interesting, if only because it was from a another 'games industry' all together, was one from Roger Snow, a VP at ShuffleMaster, a company supplying the casino industry with all kinds of game products. Among them, licensed table games, which is what this session was about.

The market for table games is $50M worldwide. Small compared to our industry, but then I'm not sure how it would compare to, say, the licensing of IP in the casual games industry, which is perhaps something it's more comparable to.

Snow explained how the bulk of table games on casino floors are public domain games (Blackjack, Poker, etc). In an effort to make games more interesting, people have come up with variants that are more engaging. Things like side-bets, progressive pots, etc, and cross-cultural game mashups are added to come up with things like Ultimate Draw Poker, Four Card Poker, Pai Gow Poker, Carribean Stud, etc.

These games are then, provided the IP is properly protected, licensed to casinos for a flat fee. They then operate them hoping they'll yield more revenue than the public domain fare they are replacing.

I was surprised a little that the flat-fee licensing model was the only model used (at least that he discussed). Wouldn't a royalty make more sense? Pay for performance and all that. I'm guessing that the casinos aren't enthused about sharing revenue numbers with partners and making themselves auditable, etc, and that's likely the reason.

Anyhow. He went on to speak a little about the games in this business and made the following points:

- The business is relatively young. The first licensed game only emerged in the 80's.

- About 50 new games are introduced every year. Only ONE will be successful, and when it does, it will last a long time.

- Acheiving critical mass is important. People need to recognize the game when going from one casion to the other.

- In the past 15 years or so, there have been 10 hits. That's it.

So the epiphany that I had was that this sounded an awful lot like MMOs. How many successful MMOs has our industry seen in the past decade? Maybe a dozen? The critical mass element applies too.

Contrast that to the points Snow made about the slot machine business:

- There's a glut of content, with hundreds or even thousands of games introduced every year.

- Games are given at best a couple months to succeed, and if they don't perform they are pulled from the floor.

- In cases where they do succeed, imitators soon follow, copying whatever the latest twist is on the match-3 mechanic.

- While there's a little technical innovation (bigger screens, better graphics, etc), a far surer path to money is to license a piece of well known IP and wrap a traditional game mechanic around it. Plenty of Wheel of Fortune, Tabasco, Alien, Adams Family, Price is Right, Beverly Hillbillies are just a few examples.

Sounds just a little like the casual games business doesn't it? Right down to the oft-seen match-3 mechanic.

There are of course many differences. Development budgets between felt table games ("some rules and a piece of felt with some circles on it" was how Snow put it) and MMOs, are just one example.

Still, I feel there must be some lessons to be learned here.

Maybe that's why EA's Louis Castle is on Shufflemaster's board?

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