Player Appeal

The player appeal of a slot machine changes over time. A slot machine that once had a high degree of player appeal might lose this status, e.g. due to new competition of other player appealing slot machines, or because players becomes tired of the concept.

Despite some shifts over time regarding the relative importance of different competitive factors, player appeal has remained the most important. Online Casino managers base their slots location decision foremost on the perceived player appeal of the slot machines available. This has a clear rationale; casino operators is not so price sensitive regarding the costs of the equipment because of the relatively short payback period for slot machine purchases in relation to their lifespan of high win/unit in operation.

As a result, even minor differences in the player appeal (win/unit) of a slot machine have a relatively high impact for the casino’s bottom line in the long run. The empirical part of this article give examples of how certain innovative player appealing slot machines have been able to produce more than twice as high win/unit than average. Given the discrepancies in player appeal between different slot machines, there is a constant innovative search for more player appealing slot machines among games providers.

Pricing power, on behalf of games providers, is closely related to the player appeal of their machines. If a slot machine from a certain games provider has player appeal that allows it to produce a higher win/unit than its competitors, that machine can be sold/rented for a significantly higher price than other slot machines with average player appeal.

One condition for this pricing power is that the operators are aware of the potential player appeal of the slot machines that they install. For new slot machines, operators are uncertain of the player appeal for their investments both in the short and in the long run. In order to decrease this uncertainty, it is common practice in the industry that slot machines are provided for a trial period in operation among online casinos before a purchasing/location decision has to be made.

For slot machines with exceptionally high player appeal, games providers have instead introduced other business models than sales. Revenue-sharing agreements between the games provider and the casino operators are the common business model for these machines. Provided that the player appeal of these slot machines de facto is considerable higher than the average, this business model are able to gain more revenues for games providers, and come to grip with the pricing power inhibiting effect of uncertainties among casino operators.