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The Path to Game Innovation

Nikki Orcutt,

Director of Marketing & Game Development at IGT

Innovation can be defined in many ways, but simply stated, innovation

is widely accepted as something “new.” The term has surfaced as one

of the most important drivers of future business growth in just about

every consumer industry and serves as an ongoing topic for lotteries

today – primarily because the execution of how we innovate is often

new, but not always different.

Since 1964, when the first official U.S. state lottery was established

in New Hampshire, lotteries across the country have based their

business model on carrying two dominant product lines through the

retail sales channel – Instant Scratch-offs and Draw Games. Although

technological advancements have helped propel our industry forward,

we have been fortunate to maintain our profitability by producing many

of the same games in new ways. According to a recent article in


magazine, most companies should consider four primary objectives for

new Research & Development (R&D) projects:


Maximize the long-term return on investment.


Make optimum use of the available human and physical resources.


Maintain a balanced R&D portfolio and control risk.


Foster a favorable climate for creativity and innovation.

Based on these four objectives, the lottery industry has been very

successful. This success could leave many questioning if doing

something different from the textbook style of growth even makes

sense. While most could arguably agree that the lottery industry has

masterfully accomplished three of these objectives, the fourth objective

provides an open door of opportunity.

In recent years, the U.S. lottery industry has effectively changed the

matrix of the most popular multi-state jackpot games, added multipliers

and bonus features to draw-based games, improved prize structures,

increased the appeal and modernized the print technology of instant

tickets, introduced many fresh concepts, opened new sales channels,

and tip-toed our way into the interactive world – all yielding profitable

results. While these innovations serve as impressive milestones,

the issues we face have not drastically changed. Lotteries are still

experiencing stagnant portfolios, the lottery player base continues to

age, the challenge of attracting new players increases, jackpots are

unpredictable (and growing at a much slower pace), and the rate of

innovation remains conservative. As consumer expectations, attitudes,

and ultimately buying behaviors change, there is one thing for sure –

the next generation consumer will likely define the future of how we do

business, forcing the industry down a more unstable path of innovation.



Engineering the Next Generation of Lottery Experiences