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Server gaming not quite ready for mass roll-out

Jul 29, 2008 7:02 PM

Gaming Insider by Phil Hevener | Think of it as a splat!

This imaginary sound representing IGTs server-based gaming machines hitting an unexpected brick wall. Soft business volumes everywhere have left casino officials in no mood to spend big money on the highly hyped games.

The situation will eventually change, insists IGT CEO T. J. Matthews, who has been talking up the possibilities associated with the games since 2005, but probably not for a year or two, a figure that represents his educated best guess.

Penn National CEO Peter Carlino whose company operates thousands of slot machines at casinos across the country, said, "I dont think any of us felt that softness would be what it has been pretty much across the board."

A middle level manager in another company with multiple casinos explained, "There is simply no compelling argument right now for a casino to rip up its slot floor to install large numbers of the server-based games at one time."

No one quarrels with the marketing possibilities offered by the technology. Imagine being able to make special offers to individual players as they sit at a game. MGM has already agreed to go to a 100 percent server-based slot floor at its CityCenter project opening late next year.

South Point also plans a large rollover.

"Its a heck of a game," South Point owner Michael Gaughan says.

He will probably begin to buy the new games, maybe two or three hundred at a time as he begins to replace the roughly 2,300 units at his South Point.

But thats just another way of saying the impact of server based gaming will not reach IGTs bottom line in a significant way before early 2010. Patience is the virtue hes pushing as IGT awaits the time when the operators of more than a half-million IGT games decide the time has come to replace them.

Whats needed to generate more buyer interest?

  "Tell them to lower the price of their machines," Gaughan growled. He guesses that a server game with all the "bells and whistles" that makes them interesting goes for something north of $15,000 a unit.

 Sona Gaming MIA

The new age of wireless gaming may have claimed its first victim late last week as Sona Mobile Holdings Corp. showed signs of sinking out of site, as far as a Las Vegas presence is concerned.

It was early this year that Sona made big news with the announcement it had an agreement to service Station Casinos with its wireless products in the Las Vegas area.

But Sona has yet to present the Gaming Control Board with anything for testing.

There was no sign of life at its Las Vegas office last week.