Land-based vs Online Suppliers

This article was originally published in the October 2011 issue of iGaming Business.

We know there are a handful of games developers from the land-based market well established online, but there are still many key games suppliers and game titles that have yet to reach online players.

In my opinion, up until around 5 years ago the online market had a lack of quality games, especially in comparison to the games available to the land-based markets. The main reason is of course the maturing of internet technologies and bandwidth availabilities, but I also believe it was due to the lack of competition. This has now changed dramatically, and top online games suppliers have emerged, as well a massive increase in content quality from the casino software vendors. The content is king approach from many operators is clear, and with this demand the industry has seen some fascinating game developments, some of which go against all principles of game design. We’ve had an influx of brands, 3D, HD and some very innovative math models that both the online and land-based markets have not seen before.

Online games suppliers have been built and sold, while many land-based games suppliers continue to stay focused in their specialist market. The attention land-based suppliers are showing to the online market has never been more evident, with industry giants such as Aristocrat and Novomatic now establishing a presence online, other key players will no doubt be following sooner rather than later.

There’s a very clear divide between the way in which online and land-based games suppliers go about their business, in terms of marketing, technology and even fee structures, i.e cabinet and maintenance sales compared to revenue share. This divide is mainly due to the regulatory differences, with regional licenses, country specific game developments and approval typical processes to supply games to land-based venues. The new regulations being implemented across the online world and maybe even more relevant the continuous roll-out of VLT’s and server-based systems, land-based and online games suppliers will soon have a lot more in common.

I believe a lot of land-based games suppliers have been abiding their time for these changes, particularly those that work within the strict guidelines of the Nevada license. With country specific regulations, suppliers can now feel assured that putting their games online will not affect their current business, and most importantly their existing licenses.

Any land-based supplier entering the online space will need to appreciate the mature and highly competitive games supply market that now exists. There are over 40 games suppliers, a lot of which have established their network and integration methods, as well as tweaking their products for optimum performance online, making ground in this space now will certainly be a challenge for any  content supplier.

While this is all very well, the land-based market does have its own challenges and opportunities, with the frightening figures being reported in casinos in Macau and the newly opened casino in Singapore, as well as the continuous roll-out of many thousand VLT’s in Italy and soon to be opened VLT market in Greece. Some might question why so many big name titles from the online market haven’t found their way into land-based gaming venues.

One of the key differences in developments between online and land-based is the target audience. While integrating a game for a major European online operator, you are reaching out to an array of nationalities, cultures and player behaviours. This can make online games less targeted, as the designs in most cases are a one size fits all. In contrast, land-based developers are very experienced in designing games for a specific market. If you place a terminal in a bingo hall in Spain for example, you’ll have a good idea of the types of player’s that play it. Over time this has helped land-based games developers mature into regional experts.

As new online regulation starts to pick-up momentum, we’ll no doubt be seeing more and more land-based operators setup their online offerings. What will be interesting to see is how these operators start to differentiate themselves from the online focused operators, but more importantly how they align their offerings throughout both departments. The online and land-based product offerings will always have their differences, but aside from table games, there is still a substantial difference in the games available to each side of the industry.

Someone playing a slot game on a monitor in a gaming venue; will clearly have a very similar game experience to someone playing that same slot on a monitor at home.  If a game is popular in the land-based market, there’s almost no doubt it will be a success online. The key is its specific market success, and understanding which operators can really capitalise on the games market exposure.

Of course not all online players play in land-based venues and vice-versa, however,  there is clearly a significant cross-over in players and this cross-over is surely an area that operators with a land-based and online presence could take advantage of. All operators use games to attract and retain players in some shape or form, so I can only imagine the great upsell opportunities that land-based operators have by offering their players favourite games online.

Land-based suppliers have the freedom of almost unlimited processing speeds and hard-disk space whilst developing games. In contrast online games suppliers have to develop games to cater for the varied home computer speeds and internet band-width. This is certainly giving online developers a head start in the mobile space, which offers limited processor and download speeds. Above this, its only online gaming businesses that are really making waves in the mobile space, this makes it a natural progression to mobile for games developers already supplying to those platforms and operators.

I’m looking forward to the many new games suppliers that will be hitting the iGaming market from the land-based space. It will be interesting to see if the online specialist will hold off the competition, or if the land-based experience will start to rise to the top.