When Dickens wrote Tale of Two Cities in the Spring of 1859 and penned the classic line “it was the best of times, it was the worst of times,” it’s as though he was looking into the future and describing 2020? That’s certainly how Dean Ehrlich, the Executive Vice President and Games Business Leader at Everi must be feeling. Just a few years ago, Everi was under the radar except in the Class II world. Today, Everi slot products are now rated #1 in several categories of the national databases. The September 2020 Eilers-Fantini Performance Report says the company’s “Player Classic” is the top-rated mechanical reel in the industry, and their “Empire Flex” is the #1 portrait cabinet.
Everi EVP and Games Business Leader Dean Ehrlich
That’s the good news. Then there’s COVID-19. As we all know, it forced casinos worldwide to shut down. Like most suppliers, with no incoming revenue in the dark days following March and the need to keep their folks safe, Everi furloughed most of their team. However, with reopenings, they have recalled most of their employees and are optimistically looking ahead. We talked with Ehrlich this month about the difficulties of navigating this very unusual year:
Frank: How are things at Everi?
Ehrlich: We’re doing great, all things considered. As long as our casino customers continue to show progress, we’ll be right there with them with our new value-added product offerings. On a macro level, a delicate balance exists between being socially responsible and generating sufficient revenue to keep the doors open.
F.: Normally, in October you and your company would be absorbed with looking to G2E. But, the show went virtual and changed dramatically – how were preparations this year?
E.: The EGM suppliers have approached G2E 2020 completely different post-shutdown. We didn’t have the G2E “crunch time” of fast-tracking prototypes for the show which reduces the non-value burden on the development teams. There was also a larger focus on the “Pre-G2E” events which are mostly done virtually as there is obviously less travel with minimal non-locals coming into our showrooms, which we are adjusting to. Our casino customers are excited about our new product offerings, but of course, this is secondary to keeping their doors open and their employees and patrons safe. With respect to Everi’s product development rhythm, our long-term road map hasn’t changed, just extended out a few months. We are still committed to delivering on the strength of our pipeline of new game content across all our product categories.
F.: Will this forced move to virtual presentations stick around long after COVID is gone?
E.: We believe both casino operators and suppliers will be extra prudent putting people on planes as industry continues to recognize that with today’s technology organizations can get more accomplished than in years past. This virtual approach to conducting business may not be as impactful as face-to-face dealings, but it does guarantee increased diligence from a budgetary standpoint. In regards to G2E, the show is a platform we believe serves two purposes: first, the show allows us to build on our customer relationships and reinforce our “why” behind game development ; and second, there is an investment community component where that particular constituent can get a feel of our overall company strategy and experience our gaming offerings firsthand . We believe the show could be much smaller and more cost effective. Regardless, we believe most exhibitors going forward will look for ways to participate in the show more prudently.
F.: Many slot operators have told me that in past years, the Pre-G2E events have been better than G2E in terms of evaluating product, even though nothing beats G2E to talk to contacts and build relationships.
E.: I agree with you. Pre-G2E events are more focused and a 100% better use of time than the actual trade show. It’s a challenge trying to keep my voice for three days talking over loud music, etc., the overall environment is sensory overload for casino operators, and from the supplier side, it’s tough to sit in a booth for three full days.
F.: Do you think Road Shows will be part of the future. Konami hit the trail with a double-wide tractor-trailer this year that was impressive.
E.: Yes. Road shows are not a new concept as some of our competitors have been doing these for years. A road show may not be a smart fit for all suppliers largely because it is very expensive to execute effectively. To visit key markets not named Las Vegas, Atlantic City, or Biloxi, for example where you most likely have showrooms, the supplier must constantly be on the road to visit outlying locations. We believe if you have great product, you can get that product to resonate with your customers via other channels. However, it’s worth mentioning that road shows can be an ideal way to get casino customers comfortable with a new hardware offering that they haven’t seen before. It will be interesting to see if our competitors are seeing any meaningful ROI from their road show efforts this year.
F.: What do you think the sales environment and G2E will be like once COVID is over? Back to normal or forever changed?
E.: Once again, we believe the show will be simpler in the future whether it’s less days, smaller booths, etc. In terms of sales strategies concerning visits to casino properties, we believe this gets back to normal soon. Property visits are important and add significant value to the operators. You can’t walk a slot floor in a virtual meeting!
F.: There are several national performance indexes out there now like Reel Metrics and Eilers-Fantini. How do you view these broad-based analytic services? Good or bad for the manufacturers and operators?
E.: We’re one of the few industries that doesn’t have a single broad index of product performance so the numbers from Reels Metrics and Eilers are accretive in our opinion. We want, and need, this transparent feedback as we spend significant dollars on R&D. The challenge for both services is that they are good directionally as these reports show us some of the “must haves.” If a product is highly-ranked on the reports for a sustained period of time, the purchasing decision is logical and intuitive. But you must also look at your own local players and make sure you don’t write-off, or overlook, products that may not show well in those surveys, but still perform well in certain player demographics. For Everi, it took a long time to get the recognition that we are now receiving with multiple #1 cabinets along with significant game theme performance call outs.
This recognition adds additional credibility because it isn’t just our commercial team that touts performance. Especially with segments like high-denomination mechanical reels, it’s hard to get the recognition these products deserve. It’s great to show our customers an independent body recognizes our level of success with anywhere from 15-19 top 25 game themes in a given month. But we also must accept the results, take our lumps, and pivot our strategy when products are not working.
F.: Why have your mechanicals been so successful?
E.: We have built a tremendous amount of trust with the high denomination player who knows exactly what play experience they want, and we believe we deliver precisely that, giving them a great ride. We have differentiated play mechanics throughout the Everi portfolio without making it overly complex which throughout the years has created significant brand loyalty. In sum, it’s our measured approach to game design creating themes with simply game play, enticing upside, familiar mechanics, and clear pay tables, which we believe are core elements this loyal player base appreciates.
F.: How does you team approach game design? (Everi has design studios in Austin, TX; Reno; NV and Chicago, IL)
E.: We ask three things of our game studio teams: (1) Be independent; (2) Be original; (3) And finally, it’s acceptable to take chances and make mistakes, but don’t make the same mistake over and over again. Organizations always talk about a “culture of innovation” whereas at Everi, we refer to it as a “culture of originality.” If we want our designers to be original, we believe the least we can do is come up with a general term that’s not cliché but has substance behind it. In this context, “originality” is defined as either a new play mechanic and/or new math model, not just a variation of what’s been done multiple times in the past (i.e. repainting the same golf course a different color).
F.: At the last G2E, Everi was one of the only companies that introduced completely new branded products. Other were just reworking brands from years past. What are your feelings about branded products in the future?
E.: We believe brands will always be a part of the casino floor, and we are calculated in our approach in how we utilize brands to elevate the player experience from form factor to play mechanic to merchandising. It’s critical to have our studios connect with the brand versus associating a brand with a game where game development has no vested interest or attachment to that brand.
