Gaming Machines
| Electronic gaming machines – a profile on game selection and placement. By Andrew MacDonald Senior Executive Casino Operations, Adelaide Casino, 1996 |
Casino Analyser Reference Slot |
Introduction | Utility of Games | Price Sensitivity | Denomination and Placement | Conclusion |
To explore this further on a gaming machine basis it may be of interest to consider a hypothetical $1 spinning reel slot machine with a high hold percentage. The characteristics of this hypothetical game are:-
Denomination : $1
Hold Percentage : 15.0%
Game Speed : 400 to 600 decisions per hour
For the moment we will exclude hit frequency and game variance and just concentrate upon theoretical loss rates.
Theoretical player loss = $1 x 400 x 15.0% = $60
Theoretical player loss = $1 x 600 x 15.0% = $90
Thus we have a theoretical loss of between $60 to $90 per hour played with only one “coin” bet per game. If our hypothetical game has a hit frequency of 15% and a variance for a single play of 35 then 95% of a player’s results would fall within the following approximate range after one hours play at 400 decisions.
95% confidence interval : + $180 to -$300
Quite clearly the level of expected loss and the players likely actual experience at this hypothetical game is not overly appealing and it would be unlikely to stimulate much play.
However, it is important not to over-generalise and make a broad statement that a $1 gaming machine with a 15% hold would never work. Certain gaming machines like Sega’s “Royal Ascot” may produce reasonable returns at high hold percentages due to the fact that game speeds are much lower (30 decisions per hour).
Another factor which is important to realise is that the gaming machine player market is reasonably well segmented. This allows our look at pricing to be extended (firstly holding the game hold % as a constant).
Game Type S.R.M (Spinning Reel Slot Machine)
Table One
| Min.Denom. |
$0.02
|
$0.05
|
$0.1
|
$0.2
|
$1.0
|
| Hold % |
15%
|
15%
|
15%
|
15%
|
15%
|
| Decision/ hour |
400
|
400
|
400
|
400
|
400
|
| Theo. Loss Rate/ hour |
$1.20
|
$3
|
$6
|
$12
|
$60
|
Note:
Min. Denom. = Minimum Denomination
Theo = Theoretical
If the average coins (credits) played per game is increased and the number of lines is increased then the theoretical loss rates will increase proportionately. If for example a player were to play two credits per line and three lines on average then their expected loss rate would increase by a factor of six.
Thus we would have:-
Table Two
| Min.Denom. |
$0.02
|
$0.05
|
$0.1
|
$0.2
|
$1.0
|
| Factor |
6
|
6
|
6
|
6
|
6
|
| Theo. Loss Rate/ hour |
$7.20
|
$18
|
$36
|
$72
|
$360
|
Clearly unless the relative value of a $1 wager was very low it would be difficult to stimulate play at much more than a 10 cent unit under the conditions cited. Yet generally not everyone wants to play a five cent machine (for ego reasons, return, gambling to win or perception) thus several factors may be altered on higher denomination machines to improve appeal.
Firstly, the game speed on these machines may be reduced. Secondly, the number of lines played may be restricted (often $1 plus Spinning Reel Machines are single line multiplier games). Thirdly and often used in conjunction with point two, the hold percentage for a $1 game may be significantly reduced in order to improve player return.
For Spinning Reel Machines in Australia the following breakdown of hold and denomination provides a general approximation of the market and produces the following loss rates at 400 decisions per hour.
Table Three
| Min.Denom. |
$0.02
|
$0.05
|
$0.1
|
$0.2
|
$1.0
|
| Hold % * |
15%
|
12%
|
10%
|
8%
|
5%
|
| Factor |
9
|
7
|
5
|
4
|
2
|
| Theo. Loss Rate/ hour |
$10.80
|
$16.80
|
$20.00
|
$25.60
|
$40.00
|
* +/- 3%
The use of a factor, which essentially is at the control of the player, has merely been used to demonstrate a “likely” actual rate of loss. In this case, the factor used has been based upon the average number of credits wagered per game. Eliminating this we have:-
Table Four
| Min.Denom. |
$0.02
|
$0.05
|
$0.1
|
$0.2
|
$1.0
|
| Hold % |
15%
|
12%
|
10%
|
8%
|
5%
|
| Theo. Loss Rate/ hour |
$1.20
|
$2.40
|
$4.00
|
$6.40
|
$20.00
|
This illustrates the fact that much of the success of “tokenised” one cent, two cent and five cent machines to Australia can be traced not only to their low price but also to the ability the player has to either increase or decrease the number of lines and credits played per game when winning or losing. Also having a large number of credits for a small stake massages the player’s ego and provides good value for money. Often these lower denomination games are designed for the player seeking to “buy time” and thus also incorporate interesting and novel feature games to amuse the player (on certain winning games free spins are awarded, or second screens appear with treasure chests to be picked etc).
On higher denomination games the same may not be true as these players are more likely to be gamblers who prefer double-up options, jackpots or increased standard prizes.
Another point of difference between low and high denomination machines may be hit frequency and variance. For lower denomination machines where players are “buying” time the average machine configuration appears to consist of a hit frequency of around 5% to 15% and variance of around 30 to 150 may be used. Higher denomination games may be configured with a hit frequency of around 12% to 20% and variance of 10 to 50.
Thus a chart looking at these factors for each game denomination may look something like this.
Table Five
| Min.Denom. |
$0.05
|
$0.01
|
$0.2
|
$1.0 +
|
| Hold % * |
12%
|
10%
|
8%
|
5%
|
| Hit Frequency ** |
5-15%
|
15%
|
15%
|
12-20%
|
| Variance *** |
30-150
|
50-160
|
10-50
|
10-50
|
| Other |
Multiline |
Multiline
Multiplier Features |
Multiplier
D/Up Jackpots |
Multiplier
D/Up Jackpots |
Note D/Up = Double Up
* +/- 3%
** +/- 5%
** approximate only
Does this provide a “magic formula” for game design? Probably not, but it does provide some guidelines as to game choice by denomination.
