The Downside of Themed Games

Let’s take a moment and discuss everyone’s favorite subject: Supply Chains!

In fairness, that might not be your favorite subject or one that you even think about that much, but supply chains can actually become quite relevant in the realm of casino gambling.

In many cases, slot machine games are themed based on a particular video game, movie, television show, game show or other form of entertainment.  Even board games might find themselves incorporated into the design of a slot machine such as, ‘The Game of Life,’ by WMS, or any of the variousMonopoly-themed games

The idea, of course, is to entice the player with a sense of familiarity via some pop culture icon that the player may already have interest in. Unfortunately, what many slot players do not realize is that they will often face lower returns-to-player (greater house edge) then they would if they selected a more generic slot machine. For anyone who gambles any serious money on machines, of course, my advice is to give up the slots entirely (unless advantage playing) and learn to love video poker which pays much better.

The reason for the difference in return is simply because the themed slot machine costs more for the casino to place on the floor, this is true for two reasons:

1.) The fact that it is a themed slot machine. To offer a theme, whether it be a video game or otherwise, the manufacturer of the slot game must pay licensing fees to whoever owns the copyright or trademark on any images or sound used for the game.  These fees can range pretty wildly and may include a flat fee, revenue-sharing or both.  Typically, the manufacturer and the owner of the trademark or copyright will come together and determine the appropriate cost for the licensing.

2.) Themed slots are generally more high-tech. In addition to the fact that themed slots tend to be newer, (and therefore have better graphics, by default than older machines) the manufacturers will also come up with additional means by which to entice players.  The first one might include shares or superior audio built directly into the gaming device.  Some devices also incorporate lengthy bonus games as well as screens that, in terms of overall height, can be as much as ten total feet from bottom to top.

On top of the licensing costs paid for by the manufacturer, (and therefore extended to the casino regarding costs for the casino to lease/buy individual units) these larger units cost the casinos more money in terms of both direct and opportunity costs.

1.) Direct Costs: When it comes to direct costs, we’re speaking in terms of the fact that these sorts of machines have all of the bells and whistles, even when not being played and use more electricity.

2.)  Opportunity Costs: These machines are often large and take up space that could theoretically be used to house two (or more) traditional gaming units.  In order for the casino to be doing as well on these games, the games must essentially perform twice as well as their theoretical replacements.  Even though the casino expects that the machines will be played more (individually) than others, that might not be enough to cover the loss in revenue that two machines might bring.

The result of both of these costs increases, as well as the licensing fees, is the fact that the casino will often set these machines to give a smaller (sometimes MUCH smaller) percentage of a player’s money back to him/her.  Penny denomination machines, more traditional, often range from 88-92%; these devices often pay 85%, or less, if the gaming jurisdiction allows such a low return.

When you are in a land-based casino and you see one of these licensed machines, it is important to take the high probability that they will return a lesser percentage of your money into consideration.  Just know that you may extend your time and fun on a more traditional unit.

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