Pulse

Risk/reward: iteration versus innovation

By Lewis - 6 September 2019

Jesper Kärrbrink, Chairman Co-Founder of Green Jade Games, will be speaking at the CasinoBeats summit about the need for slot developers to push the boundaries and take more risks to meet changing player demands

Do you believe there is a lack of innovation in online casino and slot development? Why?

The global iGaming industry has undergone ten years of rapid development and what operators are offering players today is so much better than before. From the design and layout of online casino sites to the huge range of games available via localised payment options, innovative loyalty schemes and improved responsible gaming, the sector really has made strides over the past decade.

As a player and a customer, this makes me very happy. That being said, as a game developer I still think we lack true innovation especially when it comes to online slots. The games that players are playing today are very similar to the games they were playing ten years ago. Sure, we offer a more thrilling experience but this has been achieved through iteration rather than innovation. I think to continue to drive growth and engage and attract new demographics, developers need to be more innovative.

Are developers too focused on iteration and volume rather than value?

Yes, I think the focus has for a long time been on iterating slot games and launching them at scale. If you look at an average month there can be upwards of 70 game launches and on the whole these games look and feel very similar. That is not necessarily a bad thing; it ensures that operators can offer their players a constant stream of new content.

But I think the sector would benefit from some developers at least focusing on innovation and releasing fewer titles each year but titles that have the potential to completely change the game. This seems to be the approach adopted by Big Time Gaming and look at the success it has enjoyed.

Why do you think so many developers are taking this approach? Is it because innovation is expensive and risky?

I think it is important for me to first define what I mean by innovation. In my book, it is close to disruption. It is a new idea that breaks the status quo in a profound and lasting way. So, what I think we have a lot of at the moment is iterations being mislabelled as innovations.

So why are developers taking this approach?

True innovation is both expensive and risky and the current method of iterating games and launching several titles per month is working for most developers – studios can expect between 25-35 per cent EBITDA margin on games developed this way, so why change? Senior executives running game studios do not want to risk this, and the next few year’s financial results, on high-stakes development.

What impact is this lack of innovation having on operators and players?

We are seeing players move away from online casino and slot games to mobile games and apps because they offer a more engaging and entertaining experience. These games combine skill development, progression, rewards, narratives and more. Slots, on the other hand, can be fairly one dimensional.

In addition to this, we risk seeing fewer players come to online casinos and staying as customers. I think this has a lot to do with them having tried online casinos once or twice and found that their £30 deposit has vanished in a matter of minutes. Only by innovating will we be able to better engage and retain players and attract new customers to online casino.

What are the upsides to developers innovating and pushing the boundaries?

There are two ways of looking at the risk associated with innovative development – while some will see it potentially as a negative, there are tremendous positives, too. The biggest upside is that developers have the potential to create slots that change the game and tops the charts for months or even years on end.

We argue that the greater risk for a new independent studio is actually not driving innovation. With so many games launched each month, it is easy for a developer’s titles to get lost amongst the others going live. The market is so competitive and mature that innovation and offering something unique is really the only way to break through.

Can developers do anything to ensure their innovative games are a success?

That is the thing with innovation – you have no idea whether players will like what you have developed. The opposite is true of iteration where you can look at the data to learn what needs to be improved and then you can go and improve it. With innovation you are building something players want, they just don’t know they want it yet!

Is being a highly innovative developer a sustainable business model?

Only developing highly innovative games is a risky business strategy. That said, not pushing the boundaries can be just as risky if your games do not gain traction with operators and players. For Green Jade, we think a balance between the two is the best approach. We are trying to combine standard slots with iterated and innovative slots and arcade games to create something truly unique.

The difficulty, of course, is that innovation is more fun and exciting than building another standard slot. This is not a bad thing, but we have to push ourselves to maintain the right balance between bat-shit crazy and standard slots. But so far, so good!