Bally Technologies Interview: Future Slots Developments

In 1932, Raymond Moloney founded what is today known as Bally Technologies. Since its conception, Bally has grown from strength to strength and is considered as one of the world’s leading slot machine and systems manufacturers. In January 2010, Barrons.com published a report on Bally, suggesting that the billion dollar company may “outpace” its competitors, namely International Game Technology (IGT) and WMS Gaming. Eager to see what the future holds for the developers of slots such as Hot Shot, Casino Online spoke to Dan Savage, vice-president of marketing at the company.

As Savage makes clear, Bally Technologies has certainly turned around his fortunes over the past ten years. Savage observes that in 2005, the company was failing, but since the appointment of CEO Dick Hadrill, Bally has “retooled” and their systems business is now worth an estimated $50 million dollars. Savage explains that now, Bally is recording “good top line growth” in all aspects of their business and are hopeful for the future. Of particular interest to the company is Italy’s decision to open up the gambling market and Bally believe it’s likely they’ll become “a big player there”.

On the topic of Macau, it’s possible to note Bally Technologies’ attitude to the growing market, with Savage suggesting that “it took Macau seven years to beat what Vegas took forty years to build”. As Las Vegas is still financially burdened and beaten by the economic problems of late, it would be fair to assume that Bally and presumably other casino-related companies are focusing their efforts in the region; but as Savage points out, it’s still a relatively small market for the North-American based company. Discussing Bally’s market share in Macau, Savage suggests that the majority of the revenue is “table intensive” and, as most of Bally’s “business is in the systems or slot manufacturing”, their share represents “a very small percentage of what’s going on in Macau”. While the company managed to win “25% of the City of Dreams floor”, one of the largest casinos in Macau, Savage is quick to point out that they won’t become solely focused on cracking the lucrative Asian market, observing that

“(Table games) aren’t really our market; the closest place we get to that is video poker and…we have to stick to what we know well. We have so much more development to do with communitive gaming and skill-based gaming that getting into…table games – it’s not really what we do.”

While the international market clearly interests Bally, Savage observes that just 17% of Bally’s business interests are international and, while that aspect of the company has grown at a rate of 25% over the past five years, it’s still a small section of the company. When it comes to developing slot machines which will appeal to an international audience, Savage admits that global marketability is a prerequisite of any good slot, but “it’s not the most important” aspect of a game. Budding slots developers should take note of Savage’s advice when developing a new game:

“The key is, get the math right first and then (with regards to a regional audience)…You’re talking about the symbols, the look and feel of the game, the artwork. Many math models will work globally, but you can compel or offend players just based on the artwork you put on there. We’ll re-skin (change the artwork on) games with good math, just to appeal to the regional audience.”

The main slots development Savage is most keen to discuss is Bally’s new U-Spin technology, which is incorporated in the new SpinNation range of slots. Discussing the development, Savage suggests that it’s “very interactive, compelling technology” and explains how a U-Spin slot works:

“Obviously, one of the best games manufactured in the world is Wheel of Fortune and when you get into the bonus round (on this slot) and trigger the wheel, the interaction with the wheel has typically been done with a button – so you smash a button and that triggers the wheel. We’ve taken that, we think, to the next level and instead of using a button to trigger the wheel, we let you spin the wheel with your hand…It’s a very interactive, very intuitive type feel (which) we think gives a different play dynamic.”

At the moment, Bally have two “credited U-Spin games”, in the form of Cash Spin and Vegas Hits, but the company is also planning to refresh popular brands such as Hot Shots by adding the U-Spin technology. While the development process was interrupted due to a litigation battle with IGT, who alleged that Bally had infringed on their wheel case designs, the company is keen to launch an estimated nine different wheel games, which will make their way onto casino floors in the next 12 months.

On the topic of litigation, we wanted to find out how Bally felt about certain casino software developers creating derivatives of Bally brands. Using the example of Chinese Kitchen, which was a slot developed by Bally and launched in 2008 – around the same time a Playtech slot by the same name appeared in online casinos, we asked Savage whether Bally would be concerned about online gaming companies replicating Bally’s slots. Savage explains that “unless it’s a primary brand of Bally” the company isn’t “worried” about “similarities (or) knock offs”. However, the marketing executive makes clear that “if somebody tries to get a little too close” to slots such as Blazing Sevens, Hot Shots or the company’s Playboy brands then they’ll “defend that all day long”. When it comes to protecting their core brands, Bally doesn’t differentiate between online and offline casino software providers, suggesting that they would be willing to take action if a high-profile slot such as Hot Shots was replicated elsewhere.

Of course, the flipside of this argument is that if Bally Technologies began licensing their games to online casinos, they could reap the financial rewards of entering into the online gambling market. Savage remained notably tight-lipped when we discussed IGT’s venture into the online casino market (in the form of their WagerWorks brand) with him and asked whether Bally are planning anything similar for this year, but he did reveal the following:

“We (Bally) have specific areas in place, but we don’t talk publicly about that. It’s much like what happened when Amazon came out; if you’re a book company and you’re not looking at doing that stuff, you can lose your whole share. We’re definitely looking at (going online), but we’ve done no specific deals and we’re not talking about it publicly.”

With websites such as Barrons.com pinpointing Bally Technologies as a possible industry leader, we were eager to find out what Savage and his colleagues thought of their current position in the market. Savage admits that there’s “no question about it”, IGT is “the leader in the market place” when it comes to market share, but observes that the strength of the company comes from their intellectual property; specifically by buying brands such as Sex and the City and American Idol. While Savage is keen to point out that Bally is “by no means a small company”, they favour home-grown brands, whereas IGT “and those with the deeper pockets (that) can afford more than others” can develop relationships with the likes of HBO and FreMantleMedia (who respectively own the rights for Sex and the City and American Idol).

Looking to the future, Savage believed that Bally could once again prove a wise investment in 2010 and while he didn’t wish to be drawn into who would come out top in the battle between Bally and IGT, he did coyly note that “it’s a good competition every year”. Indeed it is, and one which will be closely watched by the gambling industry and stockholders alike.