Public Gaming July/August 2016

// PUBLIC GAMING INTERNATIONAL // July/August 2016

Who and what defines Innovation?

The long and short answer to this question is simple – not us. Companies

no longer control what new product innovations are successful in the

marketplace. The foundation of most new growth strategies is designed

around consumer desires and emotions versus needs, with a constant

challenge of working to balance quality versus convenience. The most

pioneering companies in the world continue to invest millions of dollars

in R&D every year for new product development focused specifically

on innovation and, on average, 25% of sales are coming from products

that have been launched in the latest 36 months. Lottery barely reaches

5%. This focus has not only created a continuous pipeline of different

products to market but also produced a greater demand and higher

expectations from consumers for even more new products. IGT

is committed to innovation and meeting consumers’ expectations,

spending more than $300 million in R&D annually, more than any

company in the gaming industry. “IGT is accelerating innovation.

We are building a structured process to routinely ideate, evaluate,

and test the right products and shorten the time to market. This is our

commitment to the industry and a pillar of IGT’s Strategic Plan for the

next five years,” said Marco Tasso, SVP, Product Marketing, Lottery.

Today, in many industries innovation is also largely shaped by social

media, which continues to define and rapidly change the consumer

landscape. The social arena not only places the power of a lottery’s

brand at the fingertips of any customer, but it also gives one person

the ability to influence hundreds or even thousands of people through

“real-time,” “all-the-time” opinions about products and services. The

power of uncontrolled consumer feedback open to the world at

large has directed companies to shift their primary focus on making

the customer the foundation of their “service” platform. The social

paradigm has also created a renewed commitment to innovation

within the lottery industry. However, listening and responding to our

customers, and designing products to meet their needs in the future,

also means that we must be willing to take some calculated

risks along the way.

The Challenge and Search for Value

As the industry continues to find its way into becoming a

relevant part of the social conversation – and not just when

record-level jackpots are achieved – finding our space in the

new “on demand” and “visually-stimulated” era of consumer

expectations will be critical in changing the regulatory

landscape. In a world overcrowded with information in which

new products continuously try to squeeze their way into the

retail spotlight, sustaining long-term consumer interest in

lottery as it exists today may be an even greater challenge.

Looking through the lens of the consumer could paint a much different

picture of innovation for U.S. lotteries and ultimately change the way

we develop, make, and execute product decisions. Finding ways to get

valid information from consumers when we can’t keep their attention,

controlling the consumer experience with our products when they

are sold through others, and placing lottery products in the hands of

customers instead of relying on them to run to the store to buy them

are crucial next steps in our journey for innovation.

The average customer’s search for value in retail today begins with

the expectation of reward and, unfortunately, often comes with a

much lesser exchange of loyalty. Why? Because it has become clear

to consumers that they not only have more choices than ever before,

but there are always other companies, brands, or people willing to give

them a superior value proposition.

This quest for superior value has both lotteries and vendors working

around the clock for the “feel good” factor that sets them apart from

the competition. But the real ticket to innovation for many will be a

favorable regulatory environment that often determines their fate. In

many jurisdictions this could be the very issue that stands between the

desires of consumers’ and the industry’s need for sustained profits to

good causes.

Fortunately, much of the value in our industry stands on the proposition

of selling a chance at a lifelong dream and actually giving hundreds

of thousands of consumers the chance to live it. While our industry

has been largely successful with few failures, this has created an

environment that makes creativity and innovation difficult because

there is no margin for error. Put very simply – we are not allowed to

make mistakes.

IGT’s Roadmap to Innovation

Lotteries are under increasing pressure to innovate and their vendor

partners should help enable the roadmap to the next big idea. IGT

has refined its commitment to and focus on innovation through the

implementation of a new game development system, FutureGame™.

Most vendors know exactly “what” the industry needs in the future, but

defining a path to determine “how” we get there is just as important.

FutureGame provides a disciplined eight-step process, beginning with

diagnostics, to understand the real consumer needs of the future. From

brainstorming to testing, we refined the process to bring the best ideas

to the customer.

“IGT is accelerating innovation. We are building a

structured process to routinely ideate, evaluate, and test

the right products and shorten the time to market.”

– Marco Tasso, SVP, Product Marketing, Lottery

Customer

Context

Ideation

Operational

Check

Evaluation

& Shortlisting

Game

Funneling

Prototying

& Market

Test

Final

Production

Diagnostics

Engineering theNextGeneration

ofLotteryExperiences

Future

Game

™