Unlike their parents and grandparents, millennials heading to Las Vegas aren’t necessarily there to play the slots. And that poses a problem for casino owners.
Consumed with games played on their handheld devices, younger people have been hard to reach for gaming interests. That may be about to change, as Gamblit Gaming of Glendale last week closed a deal with mobile game developer PikPok to transform two of that company’s popular mobile games into gambling machines to be played on large touch screens in casinos.
As part of the arrangement, PikPok’s spaceship combat title “Breakneck” and zombie first-person shooter “Into the Dead” are expected to hit casino floors in Nevada and New Jersey early next year. The value of the deal was undisclosed.
“Young people aren’t interested in slots at all. They leave them cold,” said Eric Meyerhofer, Gamblit’s chief executive, noting the need for casinos to appeal to younger people. “If you’ve got a significant chunk of your visitors (in casinos) and they aren’t using your products, you have a floor-mix problem.”
Case in point: Slot revenues in Nevada declined to $105 billion in 2014, down 23 percent from an all-time high of $138 billion in 2006, according to a report from PricewaterhouseCoopers.
Gamblit and casino operators are hoping that PikPok’s titles will help fill that hole. “Into the Dead,” for instance, has been downloaded tens of millions of times by iPhone and Android users.
“The older generation was that 67-year-old woman who played slot machines with a cigarette hanging out her mouth and a whiskey in her hand,” said Christopher Jones, a senior research analyst in New York for Buckingham Research Group who tracks the global casino industry. “But the younger generation was brought up on mobile games.”
Gamblit, which has raised more than $20 million since its founding in 2010, produces game properties in-house in addition to licensing titles owned by other firms.
Its platform allows developers to add wagering elements to events within their free-to-play games, with regulator-approved gambling controls that allow various levels of monetary returns to players based on chance or on points skillfully scored within a game. For example, the zombie first-person shooter game “Into the Dead” has mission-based wagering, said Meyerhofer.
“Players are given challenges to complete and are rewarded for things like how long they can survive, number of zombies they can kill, etc.,” he said.
The company hasn’t started generating revenue in the United States, but will sell its gambling machines and, depending on agreements with casino owners, will earn a cut of the device’s revenue. It now generates revenue from a portfolio of mobile gambling games in the United Kingdom, where online gambling is legal.
“The U.K. is a proving ground for us,” he said. “We will take a look at those prospects to find out what people like.”
Meyerhofer declined to say if that business was profitable, insisting that part of the venture is an experiment in adding gambling to digital games.
Despite sagging slot figures, convincing casinos to overhaul their facilities and add touchscreen games familiar to millennials may be a hard sell, said Jones, noting Gamblit’s products are still part of a niche market.
“It’s very unlikely that a casino would fill their casino floor with games like this,” he said. “You bring them into areas where the millennial customer might hang out. It’s early days and it’s very unlikely that operators would lean into it.”
Meyerhofer, however, said his company is helping to usher in a new era in casino gambling. And the practice of licensing entertainment brands for gambling machines is not uncommon, he added, citing “The Flintstones” and “Sex and the City” games as examples.
“These things resonate,” said Meyerhofer. “They typically do better than an unbranded slot machine.”
While adding a wagering feature to a mobile game might seem simple on the surface, it requires a complex regulatory approval process to assure that the mechanics are not rigged.
“It’s by far the most complicated endeavor I’ve taken on,” said Meyerhofer, who previously served as chief executive of Glendale’s FutureLogic Inc., which manufactures thermal printers for the gaming industry. “You have a lot of machinery behind this stuff to control because of the regulatory factors.”
After walking various gaming trade shows for FutureLogic, Meyerhofer said he was convinced that the younger demographic would not grow into liking slots and formed Gamblit in an effort to fill the void.
He declined to disclose which casinos have purchased the company’s products.
In addition to the games licensed from New Zealand-based PikPok, the company has struck a deal to add gambling to Wicked Witch Software’s mobile title “Catapult King.”
PikPok Chief Executive Mario Wynands said his company’s deal with Gamblit represents an alternative revenue stream.
“We see it as a great opportunity to enter a whole new market,” he said, noting he’s worked with Gamblit to ensure that game play on PikPok’s titles isn’t affected too much by the gambling mechanics. “This seems like an interesting way to get the game out there in a physical way and in a way that controls the experience on our terms.”
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