The enhanced ReelHot Index of top slot performers, debuting today on CDC Gaming, provides a first in publicly available slot analytics.
ReelMetrics has refined its monthly compilation by combining its list of the top-performing slot titles with details of their use by players grouped according to their gambling bankrolls and playing frequency. The new index reports spins per hour, theoretical win, and average bet for top-performing titles in each of three player segments.
Nick Hogan, co-founder and CEO of Netherlands-based ReelMetrics, said the blending of those data points helps correct a “critical industrial deficiency.”
“We do not have in gaming what’s known as a unified segmentation model,” he said, referring to the longstanding retail practice of categorizing customers by behavioral tendencies, while also categorizing products by segment-specific appeal.
“If a given product resonates super strongly and fortifies loyalty with high-value customers, it gets high scores,” Hogan explained. “If it doesn’t, it gets low scores.”
Hogan, ReelMetrics Chief Financial Officer William Schoofs, and former Casesars executive and ReelMetrics Chairman John Boushy started their company 10 years ago and it has grown into the world’s largest aggregator of gaming data. About five years ago, the company pivoted to gathering data on player behavior.
“We began by aggregating configs and indexed performance data, but realized that, from an insight perspective, this model runs aground pretty quickly,” Hogan said. “The more data we ingested and analyzed, the more questions we had. As soon as we injected behavior, everything began to pop.”
He explained that the new index is based on data from hundreds of thousands of slot machines, tens of millions of player profiles, billions of gaming sessions, and approaching $1 trillion worth of bets. Throughout the year, the monthly indexes will focus on premium slot titles, core games, physical reels, and video poker. The revamped premium and core indexes will appear six times a year each, starting today; indexes for physical reels and video poker will appear quarterly.
The index is based on ReelMetrics’s Cupid Segmentation Model, which places players in one of three tiers, with each segment subdivided:
- Segment A: This group comprises the industry’s most valuable slot players, who play frequently, rapidly, and at highly aggressive bet levels. While representing only 3 to 5 percent of the overall player population, this segment routinely generates 25 to 40 percent of total slot revenue.
- Segment B: The model’s middle tier is made up of medium-value players who play frequently at reasonably rapid rates and with higher-than-average bets. This segment encompasses 25 to 30 percent of players and 55 to 60 percent of slot revenue.
- Segment C: This segment covers everyone else: lower-value players who visit infrequently and play at low-intensity levels. The segment covers 65 to 75 percent of players, but typically generates less than 20 percent of slot revenue.
Hogan said one indication of the need for a gaming-industry segmentation model is the nearly 80 percent failure rate for slot titles coming to market. When operators see the ease of aligning their slot offerings with customer preferences, “the bang-per-buck calculations become increasingly clear,” he said.
The index’s modeling is heavily informed by formal Assortment and Merchandizing practices that have been at the heart of retail product marketing for decades. ReelMetrics encourages operators to look at their slot offerings with a retailer’s “category-management” perspective, rather than getting mired in subjective evaluations of game design, hardware, or artwork.
The company advocates a demand-driven approach with a “Staple Inventory” of high-performing core and premium titles proven to attract Segment A and B players; a smaller “Test Inventory” of new core and premium titles offering novel mechanics or other innovations; and an “Excess Inventory” or “Boneyard” of core inventory still being depreciated and basically reserved for C-segment players. Operators might target 85 to 90 percent of their capital expense and operating budget toward the Staple Inventory, Hogan said, with the Test Inventory getting the balance. The Excess Inventory should be as performative as possible, although it consists of games being phased out over time.
“There’s a reason these frameworks have existed elsewhere for decades,” he said. “Once you start conceiving of your inventory this way, that demand-based prioritization quickly grabs center stage. That’s the beauty of it.”
The new index introduces the concept of “Inner-Segment Resonance,” or ISR, which rates a game’s appeal to Segment A and B players on a scale of “very high” to “low.” An ISR of “very high” means a title has strong appeal to both segments, indicating the floor should have enough machines to serve the broader demand.
CDC Gaming has published the monthly ReelHot Index since November 2018. The refined index published today covers the industry’s Top 40 core titles ranked by pan-industrial theoretical-win performance in February, with additional performance measurements for each of the three Cupid segments.
Hogan acknowledged the new format is narrower and “less forgiving” than previous versions, but added that the new data better reflect the economic realities of slot floors. “Product interests within the top segments are shockingly narrow and, particularly on the core side, performance durability is a gigantic problem, because productive lifespans rarely exceed 18 months,” he said. “So we shifted the focus to long-term durability to players who matter, and fulfilling those underlying charting criteria is harder and takes more time.” The index doesn’t purport to list the only titles worthy of purchase or lease. “However, it is a ranking of everything that needs to be present within that Staple Inventory and balanced carefully against evidentiary demand.”
Hogan said ReelMetrics’s troves of player and slot machine data extend far beyond the reconstituted monthly index, enabling clients to harvest insights that are “orders of magnitude” deeper. He said multiple ReelMetrics subscribers have achieved 40 to 120 percent increases in average daily theoretical win among Segment A players, simply by “demand balancing” just 3 to 5 percent of slot inventory. Surveys showed players were happier about their visits, despite spending more money, because they could get on the machines they wanted to play.
“A ton of money is being left on the table and a lot of that boils down to ranking noise and insufficient focus on segment demand,” Hogan said. “This is what we’re attacking.”
