Thursday, May 7, 2015

Want to Make Big Money? Engineer A Little Addiction Into Your Product

From The Verge:

Engineers of addiction 
Slot machines perfected addictive gaming. Now, tech wants their tricks

 Slots Devil
 You can play a slot machine in Las Vegas before you’ve even reached baggage claim: there are tiny slots parlors in every terminal of McCarran International Airport. Once you pick up your rental car, you can stop for gas and play slots at a convenience store. And that’s all before you’ve even reached your hotel-casino, which — if it follows the modern standard — dedicates roughly 80 percent of its gaming floor to slots, and only 20 percent to table games.

Bally Technologies, one of the world’s largest manufacturers of slot machines, is headquartered 3 miles south of the Strip. When I visited Bally in mid-March, Mike Trask, the company’s senior marketing manager, walked me into the company’s showroom to play some games. Compared to the cacophony of a casino floor, Bally’s showroom was practically monastic, the lights low and the room silent apart from the soothing hum of two dozen hibernating consoles.

Trask, a tall man in his 30s with dirty-blond hair, showed me the company’s new Friends-themed game, installed on Bally’s ProWave cabinet, a slick, 42-inch curved console. Friends celebrated its 20th anniversary last year, and the company hopes to tap some of that nostalgia. "That person, that girl who watched every episode of Friends when it came out, is our demographic," Trask said, standing alongside the cabinet.

I took a seat in front of the unit, and Trask touched a logo on the display’s upper corner, selected a box on the display that ensured I would get a bonus round, and told me to hit the spin button. I did, and a pared down version of the show’s theme song played, the NBC sextet smiled at me from the prime of their youth, and five reels of symbols — a Central Perk decal, a guitar, screenshots of characters — scrolled down the screen. The Wheel of Fortune-style bonus round featured a clip of Rachel saying, "Happy birthday, Grandma!" wearing a wedding dress.

Bally assembles all of its machines in a factory warehouse next to its game studios and tucked behind its Vegas corporate headquarters. Last year, Scientific Games, Bally’s parent company, shipped out more than 17,000 new units. On my visit, hundreds of freshly assembled slot machine shells, featuring the industry standard black exterior and jutting dashboards, lined the warehouse walls.

A tag attached to each cabinet indicated its destination: Oklahoma, Washington, Michigan, Canada. Only a handful were destined for Vegas casinos, a sign of gaming’s national and international expansion. Scientific Games acquired Bally last year for $5 billion. At the time, 23 states had legalized gambling, a heavily taxable industry, to quickly infuse deficient coffers.

But the expansion of gaming generally is the expansion of slot machines specifically — the modern casino typically earns 70 to 80 percent of its revenue from slots, a stratospheric rise from the 1970s when slots comprised 50 percent or less. New York, the latest state to introduce gaming, doesn’t even allow table games, and Pennsylvania, now the third-largest gaming state in the country after Nevada and New Jersey, only later allowed table games in an amendment to its legislation. And increasingly, the psychological and technical systems originally built for slot machines — including reward schedules and tracking systems — have found admirers in Silicon Valley.

In the factory, Trask and I passed a ProWave cabinet, a design released by Bally in mid-2014 that features a 32-inch concave screen, like an even more curved Samsung TV. Trask claimed that putting the same exact games on curved screens increased gameplay 30-80 percent. I asked him why that was. "It looks cool; it’s incredibly clear," he said in a tone suggesting a guess as good as any. Game designers are charged with somehow summoning the ineffable allure of electronic spectacle — developing a system that is both simple and endlessly engaging, a machine to pull and trap players into a finely tuned cycle of risk and reward that keeps them glued to the seat for hours, their pockets slowly but inevitably emptying. As we stood over the gaming cabinet, Trask told me about the floor of the MGM, home to 2,500 machines and hundreds of different games. Trask’s mission, as he saw it, was simple: "Our job is to get you to choose our game."

The prototypical slot machine was invented in Brooklyn in the mid-1800s — it was a cash register-sized contraption and used actual playing cards. Inserting a nickel and pressing a lever randomized the cards in the small display window, and depending on the poker hand that appeared, a player could win items from the establishment that housed the machine. In 1898, Charles Fey developed the poker machine into the Liberty Bell machine, the first true slot with three reels and a coin payout. Each reel had 10 symbols, giving players a 1-in-1,000 chance of hitting the 50-cent jackpot if three Liberty Bells lined up. The three-reel design was a hit in bars and became a casino standard, but for decades gaming houses considered them little more than a frivolity — distractions for the wives of table-game players. Accordingly, casinos were dense with table games, and slots were relegated to the periphery.

That began to change in the 1960s, when Bally introduced the electromechanical slot machine. The new rig let players insert multiple coins on a single bet, and machines could multiply jackpots as well as offer up smaller, but more frequent wins. Multi-line play was introduced: alongside the classic horizontal lineup, players could now win with diagonal and zig-zagged combinations. The new designs sped up gameplay and breathed life into the stagnating industry.

William "Si" Redd, the bolo tie-wearing Mississippi native who oversaw some of Bally’s new projects during the era, was instrumental to that renaissance. "The player came to win," he said, "he didn’t come to lose, [so] speed it up, give him more, be more liberal. Let him win more, but then [you make money] still with the speeding up, because it was extra liberal." In other words, the new machines lowered slots’ volatility — gaming parlance for the frequency at which a player experiences big wins and losses.

In the 1970s, Redd left Bally and founded another gaming manufacturer that was later renamed IGT. IGT specialized in video gambling machines, or video poker. Video poker machines could be designed to have even lower volatility, paying players back small amounts on more hands. And video poker’s interactive elements made them extra engrossing, turning them into an enormous success: people lined up to play the first machines, and the game’s ability to command a player’s complete concentration for hours gave it a reputation as the "crack cocaine" of gambling.

"If you were to take $100 and play slots, you’d get about an hour of play, but video poker was designed to give you two hours of play for that same $100," Redd said at the time, instructing game designers to lengthen the time it took a poker machine to consume a player’s money....MORE
Too little reward and the animal becomes frustrated and stops trying; 
too much and it won’t push the lever as often

As mentioned in 2012's "New research suggests link between genetics, Wall Street success":
We've been on the dopamine beat for a while:
Engineer -- Addicted to Day Trading -- Stole Nearly $750,000 Making False Securities Class-action Claims
Now that's obsessive.
Usually it's the little old lady bookkeeper embezzling from her employer of thirty years to cover her slot habit.
Understandable, in a dopaminergic sort of way.
She's triggering her reward pathways and going a little nuts from the neurotransmitters bathing her brain but she's not trying to rob the casino to keep playing the slot machine.

This guy, on the other hand is a) participating in a slower game, which in theory should trigger the dopamine cascades less frequently and b) he's ripping off Martha Stewart!?
Here's the headline story from the Contra Costa Times:
New research suggests link between genetics, Wall Street success
CLAREMONT - Stock traders whose genetic makeups can help them make healthy decisions about risk-taking may be better suited for a long career on Wall Street than others who may be predisposed to a "cowboy" way of doing business, new research suggests.

"I don't want the guy who is going to stay awake for four days and drink Red Bull and make trades across three markets in three time zones," Claremont Graduate University professor Paul Zak said....MORE 
Possibly also of interest:
Berlusconi Blames Stock Market Volatility On Cocaine (and a look at neurotransmitters)
"What Caffeine Actually Does to Your Brain"
Your Brain and Financial Bubbles
The Internet, Deflation and Depression
...Further, the newspapers likened the changes to those seen in cocaine abusers but went on to describe something quite different from my understanding of what blow does to the reward pathways, overexciting the dopamine cascade until the various D receptors no longer react to dopamine and eventually leading to anhedonia. The big A is often concurrent with and like anxiety, may even kindle for depression.
Don't worry, be happy.
See also:
"Pleasure Dissociative Orgasmic Disorder"
"Your genes affect your betting behavior"
New York Fed On "Anxiety, Overconfidence, and Excessive Risk Taking" (pathological gambling and self-manipulation with booze and blow)