Total Cost of Product was the first conference at EY! 13

Total Cost of Ownership (TCO): Keys to making secure and reliable decisions when renovating the slots theme”, counted with the participation of Sabby Gill, IGT, Vice President, International Sales, John Connelly, Bally, Vice President Business Development, Sebastian Salat, WMS Gaming, President International and Eduardo Aching, Konami, Vice President International.
 
Moderator Cesar Augusto Dechat started introduced the issue of the increment of costs in slots manufacturing.
 
Eduardo Aching started saying that manufacturers have more variety, with more sophisticated products. “If the operator has winnings, he is not worried about the cost of the products. In times of crisis, the investment in equipment is revised,” he affirmed.
 
Among the main factors, he added, time of TCO should be considered, to evaluate additional costs, on top of the Price of the machine: spare parts, the cost of games that will be changed, costs in personnel training. There are no fixed rules, each operator has its own factor.
For Salat, there are two factors that raise the price of the game development: players are willing to accept more level of complexity in games. They seek for novelty. And it falls directly in the cost of the development. Besides, the commercial life of games is shorter than in the past. Expenses in design increase, and it increases the prices.”

Connelly then talked about the increased level of competition. "The revenue has decreased from 2008 to 2013 and the costs have increased. The replacement cycle has increased. Because of that, the suppliers, in order to remain competitive, must offset the “blockbuster” scenario." He added that operators must also consider how the asset of longevity of the product can benefit them for the future.
 
Then, Gill commented about the evolution of technology itself. "It is not only about a cheaper or expensive cabinet, but also about the competition between the manufacturers. Try to give the type of experience that customers and players demand. You have to understand the type of players and their needs." The second issue he considered had to do with hardware investment.

Aching pointed: “The operator has to stand out from the competence. It must make a balance between elaborated and basic products, and then apply the Total Cost of Product”.

Salat highlighted the importance of bringing the player not only an ergonomic confort but also a certain sensory enjoyment, an emotion.

Connelly remarked the effort in Research and Development, as manufacturers of equipment. "What percentage of your budget do you put into capital? How do you access those players, with technology (hardware) devices, into new players? Machines are very important. Players are evolving, demand is evolving. You have to make sure you understand the needs of the players and evolve. Bring them into the casino or access them outside the casin," he affirmed.
 
Sabby agreed with Salat: "You have to give the player an immersive experience. Understanding the individuals and offering them the solutions they need in order to increase revenues."

Aching assured that Konami spends between a 10% to 14% of the budget in R&D. Connelly said that  Bally spends a 10%, but added that this year the firm also invested in the purchase of Shuffle Entertainment in order to diversify its portfolio and expand the experience in the casino floor. To attract new players and integrate wireless, internet systems, handheld device, etc, we are focused on using similar content to generate additional revenues.
 
Aching and Salat agree on the fact that content is the key. "We develop content. Hardware is interesting but the player experience is given through software, said Aching. Salat added: “Game design is an art more than a science. Investing in software is more risky: you have to consider diverse tastes in different regions”.
 
Gill assured: “A large portion of our R&D goes in games, because content is king. We have one of the largest social gaming solutions, with the acquisition of DoubleDown. Develop a game and extend it into different platforms for your players community, as Connelly said. It is all about content. But it is important to ensure systems allow that content to be distributed”.
 
Trends
 
Aching remarked two points: Quality versus quantity. Each company has its own strategy. On the other hand, he remarked the need of a joint work between the supplier and the operator, who is the one who knows the player best, and who can bring more information for the development of the games.
 
Connelly affirmed: "What you need is good content. The evolution of game creation is becoming on what you can create on a PC, wireless, etc.at thesame time.". He gave an example: "Now you can launch the product online, and see the feedback and change it before launching it on a slot. The consumer tests the products online and gives the feedback."
 
Sabby agreed with Connelly: "We use the game in advance before a general release to change some elements before the launch. We do it with our operators." He explained that they develop the game once and then integrate it globally: social gaming, traditional land based casinos. “We don’t deliver volume, we deliver value.”
 
Training personnel
 
Aching talked about the importance of the training programs, both technical and related to the product. “The operator has to make a launching plan of the product”.Salat added that added that the operator has to assure that the product offered is feasible of being learnt and assimilated by the player. “It it does not happen this way, the product will not be accepted.”
 
Connelly added that customer service is essential for the use of machines. He also highlighted that, as technology evolves, customers spend millions in casino systems. "If you decide to invest in new technology, these things require a lot more training and understanding as industry evolves. You have to have more personnel to maximize the benefits."
 
"A key initiative: every new development is uploaded in Youtube, Using social media is important", Gill concluded.