When examining the European instants market, there is no status quo. The market is constantly moving and evolving as players’ needs do. It’s important to recognize that growth factors vary from lottery to lottery, as jurisdictional legislative dictates range from conservative to less restrictive. There are many variables in play, and they need to work seamlessly to ensure success. These include price points, payouts, playstyles, and more—each must be considered in order to ensure a lottery’s product mix includes offerings for all types of players.
When it comes to price points—and the introduction of even higher ones—it’s important to consider all in a portfolio’s mix and balance the portfolio in a socially responsible way, so there is a game that appeals to every player. While higher price points are attractive to those players who seek a higher value—a number of whom were acquired during the casino shutdowns caused by the pandemic—lotteries cannot ignore their low and mid-tier price point games either. Low price points often serve as introductory offerings for new players, as they learn what they like. Similarly, mid-tier price point games, which is often where extended play games appear, cater to a very specific type of player. Some European lotteries do not offer extended play games, but these games can represent up to 30% of the portfolios of those who do.
Introducing this category offers a strong opportunity for growth and for acquiring a new player base. Of course, a strategy by price point for each specific market that evolves with the player is crucial.
Generally, most European lotteries offer games up to the 10 € or equivalent price point, though some jurisdictions have entered the arena of 20 € or higher, and it’s only a matter of time until the number of lotteries offering these higher price points increases as legislations evolve and become more accepting.
But it’s not always about top prize. Mid-tier prizes are sometimes even more important to players. Higher price points also require increased play value and higher reward—not necessarily higher prizes. This is where the heart of the game comes into play and the payout and prize structure will dictate the success of the games, even with lower top prizes than usually aspired to.
Development of the payout structure is a crucial component of a game’s value proposition, and jurisdictional regulations can have a significant impact here, especially in cases where we can’t reach all player segments because of strict regulations. Most important is the offering and value to the player. We should not be restricting ourselves. We must listen to the needs of the players across all segments, and remember that each game addresses different needs.
While European lotteries have created a lot of growth over the past ten years, there’s still lots of opportunity. While some growth drivers—price points, top prizes, and portfolio mix—are fairly straightforward, attention must be paid to the less obvious. Optimizing distribution to evolve along with retailer networks, ensures that retailers have the right games at the right time, and is something that all lotteries can do, regardless of other regulatory limitations.
The significance of research cannot be ignored either. A well-developed research program is tremendously useful in guiding robust long-term product design and marketing solutions which include new price points and playstyles, prize structure refinement, new product innovations, and more. A strong research program also addresses shorter-term needs such as game concept refinement, assessing the strongest game concepts, and crafting associated marketing messages. Using a blend of tactical and strategic research methodologies can provide compelling insights to influence a lottery’s future strategies. It is essential that the introduction of new, innovative playstyles and products be done relative to the market in which they’re being introduced.
At IGT, we’re committed to bringing analytics, insights, new ideas, products, and solutions to customers to help them capture the growth potential of instant games. It’s our duty to help our customers deliver value to their players, and the players are evolving at a rapid pace. Stay tuned here for more on this in the coming months, and contact your IGT Instants Account Representative for more information.