VIDEO KILLED THE ANALOG SLOT MACHINE

The way the technological innovation works in most disciplines is completely linear. At some point, the technology advances to make a radical change in a product and it never looks back as it grows in complexity and popularity. Slot machines weren’t like that at all. In fact, the market actively resisted the new technology–for awhile. When you visit a casino in Las Vegas or play online it’s hard to imagine gambling without cutting edge technology. The slots player of the early 1970’s couldn’t even imagine the world of today where you can play slot machines without cash in casinos or even play while sitting in your home.

Bally Manufacturing made an extremely significant technological innovation for slot machines with the advent of the random number generator (RNG). Even in 2018, it’s hard to make a case that any technological innovation has ever had a bigger impact on casino gambling than the RNG. It opened the door not only to growth in real money slot machines but gave rise to a number of new game categories including video poker and video keno.

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FACING A SKEPTICAL PUBLIC

The public had no issue with the introduction of RNG based games. In fact, few even knew about it and only saw the new, more complex games with bigger jackpots. The first video slot machine wasn’t as warmly received. In 1975, Walt Fraley invented a game called Fortune Coin which was the first slot machine to eliminate the traditional reels for a video display to represent them. Casino owners were enthusiastic about the game but the public rejected it. Video display terminals weren’t commonplace like they are now and the public ‘didn’t trust the game’. In other words, they thought it was ‘crooked’ and preferred the traditional reel-based slots.

That didn’t stop International Gaming Technologies (IGT) from buying the manufacturer of ‘Fortune Coin’ and using the technology to develop and release a slew of games. The public perception hadn’t changed–the public still preferred the reel games–but IGT took the ‘long view’. IGT grew into one of the largest gambling equipment manufacturers in the world and is still an industry powerhouse today. Much of their initial success was due to their ‘bet’ on video slot machine technology.

VIDEO POKER PAVES THE WAY

It didn’t take long for the public to warm to video slot machines but it took the success of another game–video poker–to make it happen. Video poker was introduced in 1979 and began to gain popularity in the early 1980’s. In some ways, it was the worst thing ever for slot machines and the companies that make them. All of a sudden they had competition for casino floor space from an entirely new competitor. In every casino, a certain percentage of the floor is devoted to table games and the remaining floor space to slot machines. It wasn’t long until rows of Jacks or Better and ‘Draw Poker’ branded machines started to appear in Nevada casinos.

On the other hand, the success of video poker did what the slot machine manufacturers themselves couldn’t–it legitimized video-based gaming. It was an organic and incremental change but the players began to accept that if video poker was on the ‘up and up’ they could also trust video slot machines. It also helped that in the early 1980’s video screens were starting to become more common in other areas of life–the bank ATM machine, airport kiosks, etc.

Video slot machines haven’t *completely* killed off their electromagnetic counterparts. They’re a small and shrinking percentage of the casino floor but they’re still there. Within the next generation, however, they’ll likely be part of history. They really only remain to placate older gamblers who *still* don’t trust the newer technology. Video slot machines are now the norm but that’s not where the technological innovation of the industry end–it’s just the beginning.