Letter #263: Todd Haushalter and Drew Cohen (2025)
Evolution Chief Product Officer and Speedwell Research Founder | Evolution's Todd Haushalter on Gaming, Moats, and Why It's So Hard to Catch Them
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Todd Haushalter is the Chief Product Officer of Evolution, which he joined in 2015 right after the company IPOed. Prior to joining Evolution, Todd was the Vice President of Gaming Operations at MGM Resorts International. Before joining MGM, Todd was the Vice President of Business Strategy at Bally Technologies, which he joined via Bally’s acquisition of Shuffle Master, where he was a Director of Product Development and Product Director of Asia. He joined Shuffle Master after half a decade as a Gaming Analyst at Wynn Las Vegas, which he joined after a year as a Research Analyst at the American Gaming Association. Todd started his career as a Casino Dealer at London Clubs International (however, he created his first dice game when he was just 10 years old). Over his career, Todd has been a driving force behind the invention and development of games such as Dream Catcher, Lightning Roulette, MONOPOLY Live, and Crazy Time, as well as issued numerous patents spanning card handling devices to electric gaming displays to methods and systems for managing play of wagering games.
Drew Cohen is a Founder of Speedwell Research. Prior to founding Speedwell Research, Drew was at Capital Group, where he helped manage $5bn+ of AUM. Before joining Capital, Drew worked at Goldman Sachs in the Global Investment Research division.
*Note: Speedwell Research is my research company, where we publish highly in-depth, fundamental research on great companies, and have clients at half of the top 25 asset managers and are read by thousands of professional investors. About one year prior to this interview, we published a ~75 page report on Evolution that found it’s way to Evolution’s management, and eventually led to this podcast. Additionally, our report on RH received a call-out by Gary Friedman on one of RH’s earnings calls for the depth of our research.
Today’s letter is a transcript of an interview Drew conducted with Todd. This was a particularly fun interview not only because Todd is one of my favorite (and vastly underappreciated) operators, but also because rather than a one-sided interview where the interview asks the guest a number of pre-planned questions about how the guest thinks about his business, Drew and Todd have an in-depth discussion around all things product and business model, from the subtleties of camera angle switches and the timing of ball drops to cultivating a culture and process of innovation and developing a great product vs obsessing over competitors. And so much more!
I hope you enjoy this conversation as much as I do! It’s a rare chance to sit in a conversation between an investor and an operator actually talking shop, and an illustration of how investors can best engage and partner with operators.
[Transcript and any errors are mine.]
Related Resources:
Speedwell Research Memos
Business Philosophy
Evolution Content
Evolution: Brining the Casino Online [Free 2 hour podcast]
Evolution Deep Dive [Paywalled - 75 page report]
Transcript
Drew: Hello, and welcome to The Synopsis, a Speedwell Research podcast. My name is Drew Cohen, and today we have a really exciting guest. This has been over a year in the making. We are really excited to welcome Todd Haushalter to the podcast. And for those that don't know, first of all, shame on you. He has been instrumental to growing Evolution.
He created an entire new category of game shows, which are one of the most popular live casino games, and has also really helped extend Evolution's advantages as well as really helped differentiate them versus the competition. He has been at Evolution leading product development for just about a decade now.
And Todd, really excited and happy to have you on the podcast.
Todd: Thanks for having me. I'm a big fan of your guys work, and I'm excited for our conversation today.
Drew: Yeah, I really am excited for this one, too. And we have a lot of questions around product, competitive moats, all sorts of things dealing with Evolution. But just before we get into that, I'm curious, how did you get into this business? Because last time we talked, you had a lot of interesting stories. And so I kind of want to just take it back a little bit. How did you end up at Evolution?
Todd: Yeah, so I was at MGM Resorts. I had first become aware of Evolution when I was at Shuffle Master in 2013, 2012. And that's when I met the management. And at that time, they said, Oh, we really like your product sensibilities, you should come join Evolution. They were private at the time and too small for me.
I've always seen myself as kind of a big company guy. And I like being in big companies with lots of departments to do everything and all that. And so we kept contact and I would call them and ask them questions about, like, roulette wheels. I then went to MGM Resorts where I was VP of Gaming for all the properties, so I had slots and tables.
And I wanted to replace all the roulette wheels because we had problems with roulette. So I would call Evolution, I'd be like, Hey, you guys probably analyzed the roulette wheels pretty thoroughly. What have you found? And you just would get a sermon from them. It was incredible. And they would talk about the way the ball scatters on different wheels.
And they would talk about--I was talking to Richard Hadida, one of the founders at the time, and, he was sort of the original Chief Product Officer, and I would just get this wealth of knowledge. And then they would call me and say, Hey, look, we're getting ready to take baccarat more seriously.
What do we need to know? I'm like, There is so much. Here's all the things you need to know. So we had a dialogue and they had a sense for my love of all things product. But I was at MGM Resorts at the time. And shortly after the company went public, Jens von Barr reached out and he's like, Hey, Todd, we just went public.
You ought to join. I'm like, Oh, your timing is like perfectly bad. I've been at MGM now for a year and a half. I'm never leaving. This is my dream job. Offices at the Bellagio. It has all this prestige of a casino. And I love it. And he's like, Well, just come to London and talk to us.
So, I'm like, Let me think about that. And I'm like, Okay, here's the deal. I'll come to London, but just so you know, there's probably only a 5% chance I'm gonna join. And I just want to play with an open hand. I don't want pressure on myself. And he's like, That's fine. 5% is good. So I went out there. I met Martin Carlson, who had just joined the company a couple months prior.
We had a great day, great couple days I spent with Richard Hadida and then also Martin Carlson. And Martin and I sat in a room, and he's like, you should join. And by this time, I was really into it. I think I am going to join. And he's like, Then you should sign a contract now.
And I'm like, Well, pens and paperwork's back in Las Vegas too. I'll wait until I'm calmed down. It's a huge life decision. And he goes, Okay, what if I make it so that you can back out--if you sign, you can back out, but Evolution can't for the next ten days.
He's like, You have no risk then. And then you've signed. I'm like, Well, Martin, if I do that, then it puts pressure on me. If I sign my name to something, that means something. He says, and in a typical Martin fashion, he says, Yes, I know. That's why I want you to sign. And I'm like, Okay, respect. And we kind of go back and forth.
I'm like, you just need to know, I might seriously--I might back out. I don't know. He's like, I understand. No problem. He goes, Plus this will give you comfort that if you go and you--if you quit MGM, you won't have that window where you're like, did Evolution change their mind? And so you'll have the comfort of knowing.
So that's how I ended up at Evolution. I had to Google Malta. See what it looked like. It looked pretty good. Beautiful little island. One one hundredth the size of Sicily. So very, very small. And that was almost a decade ago.
Drew: And when we were last talking, you seemed to be very interested in casino games from even a young age. I remember you talking about all sorts of things I didn't know about, like volatility and game tension. What is it about these sorts of casino games that really drew your interest?
Todd: I don't exactly know. We had two slot machines in the house growing up. Casino was hardly the family business. My dad was 31 years in the Navy. My mom stayed home with us boys. I had--one of my older brothers was a hustler. And he would hustle me on different things, and I was always on the wrong side of it because he's older than me--I was eight and he was 18.
So he was always getting the best of me. And so then I would kind of take those tricks and use them in the neighborhood. But the idea that the math, the game, the excitement, the energy--it always did it for me. And I'm not a huge gambler. I don't like if I lose. I don't have some crazy proclivity to gamble, but running the games has always been super intriguing to me, which is almost like a superpower.
If you're of average intelligence and have endless passion in a space that's very uncrowded, you can go a long way.
Drew: And that kind of brings me to my first question. There's many ways you could develop a game and develop a product, and there seems to kind of be these two opposite ways. One is you build something that you really think people are going to like, and you're kind of building it for yourself.
And another way is more like the minimum viable product route, where you're really not sure what people want, and you're kind of just testing it to get product feedback.
How would you design these games at Evolution? And maybe we could think about the first game show, Dreamcatchers, and what really led you to come up with that idea.
Todd: Yeah, so, we were sort of running out of games to bring from the casino floor to Evolution. We had done roulette, blackjack, baccarat, we had licensed some other stuff like three card poker and casino hold'em. And I was asking the question, Who are the players that don't want to play any of our stuff?
Who are they and why aren't they playing? And the simplest answer is they don't like table games. Alright, well, we weren't ready to go into the slots business at that time, so I said, Okay, how do you build a game that those that don't like table games will like? And what are the elements of that?
So how do we get, in other words, slot players? You could go after sportsbook players, or you could go after slot players, but sportsbook players and live casinos already got enough overlap. They tend to like blackjack and roulette. So I said, Okay, well, let's first of all get rid of the table.
Then we're going to create a game that has big wins, big win potential. We're going to create a game that has near misses. It has drama. And then I need a familiar form factor. So I don't want to use anything like cards or dice. Because that is exactly what they don't like. And it needs to be different enough. So enter the jumbo wheel.
And so now it's just a question of how are we going to make it so that you can win slot level money? And that's where we came up with multipliers, for the wheel. So we dropped multipliers on it, and the original thought, thinking from the first order of thinking is like, We'll call it Big Money Wheel or Big Six.
I'm like, No. I want to ban all of that language. I don't want it to feel anything like the game in the casino. Because that game, the Big Six Wheel, has a negative, reputation. It's famously the highest house edge game in the casino. So I'm like, I want to call it Dreamcatcher. Then everybody comes, and every time we name a game, you have this--they're like, Oh, you can't do that. People are-- it's rude to certain groups. Native Americans are going to say you're co-opting the word dreamcatcher, and this and that. You can't do it. It's like, Relax. It'll be fine. It'll be okay. It's a fun name. I want it to be like Willy Wonka-ish, very playful, very light, very much like a game show.
We looked at a lot of Price is Right type stuff, and I said, I don't know if anybody's going to want to play this thing. It certainly is trying to solve the problem, How do you get people that don't like any of our stuff now to play our stuff? We went to ICE that year. It was met with very lackluster--people were downright rude and saying, I don't like it.
But some people were telling us, This isn't what I need. What I need is Speed Roulette. I told them, You're going to get Speed Roulette too. We can do four or five games this year. But this is a conversion tool. This is something you can put in your slots tab to bring people over to Live Casino.
And that was where it came from. That was the original game show. We didn't realize we were creating a game show category at the time. We didn't even call it a game show. That seemed like an awkward term. But we were trying to bring people from slots over to live.
Drew: And it's interesting because even as you described that, you could kind of see your business acumen shining through because the question you were asking was basically, What can I do for these customers that we are missing? How do I do something for them? Whereas it sounds like at ICE that year people were saying, This is what I need. They were thinking very much from their own business prerogatives as opposed to from the customer satisfaction standpoint.
Todd: Yeah. I remember hearing that the boss at Nintendo was talking about the Nintendo Switch. No, not the switch, the Wii. The one where you wave a tennis racket around in your hand, you wave the remote and it's like a tennis racket or a ping pong paddle or whatever.
And he said, If we had listened to our customers, we would have done a more advanced game console with a more advanced remote control. And we would have never done this. This is how we got 60 year old women buying Nintendos. And I thought that was super cool. And there's a lot of examples like that.
But yeah, a lot of it is. I'm still asking that question. On the 2025 roadmap, I'm asking, why--who are the players that don't play Crazy Time, Funky Time, Lightning Storm, Dreamcatcher, or Monopoly Live? They would play a game show, but they don't play any of those. How come we only have millions of players on those games?
Why don't we have triple? What's missing? I have answers to that question, but--and it's reflected in the 2025 roadmap.
Drew: Okay, well, we're going to definitely get to that in a little bit. And it's also interesting that Nintendo quote, because it mirrors the Henry Ford quote where he talks about, “If I would ask my customers what they would want, they would say faster horses.” Of course, what instead they got was the Model T.
And so there is kind of this pull between giving customers what they want and kind of showing what customers want--or maybe they don't even know ahead of time. And the game show is kind of an example of that, because that's something that people would not know that they would want until you kind of show it to them.
And so my question is, How important is it when you are introducing these new games to really make sure they're polished and everything kind of just works very well on a first impression versus kind of just showing something, testing it out, and iterating on it and improving it as it goes along?
Todd: For us, it's incredibly important. The nature of the way we launch products is such that you have maximal eyeballs on it in the first few days. So our commercial team will go out to all of our partners. They'll talk, they'll create a big buzz around a game launch. Everybody gets excited.
They might put marketing dollars behind it. That might do email campaigns. They might offer free games to their players. And you have this window of like the first week, we're promoting it hard in our own lobby, and so you have maximal eyeballs on it in the beginning, and you just can't keep operators attention for a long period of time.
So you really need to come with a super polished product from the beginning, because you won't get a second chance to make that impression. And we're generally like, to do the game, we would always be left wondering if we did the game 95 percent complete--which is about half of the work.
The last 5 percent is the other half. And it didn't work. We would still be wondering, Did it not work because we didn't finish the game? And then we'd probably try to finish it. So now with us it's always designed to perfection and and launch the best product you can.
Drew: Yeah. And I think that's why you always get the Steve Jobs comparisons, because Steve Jobs, of course, is someone who would put out a very polished product--the iPhone most notoriously. And the idea is that people may not necessarily know they want this, but once they see it, it just works. It's perfect. And you're not in the background trying to fix it and convince them later on that this is something they want.
Todd: Yeah. And the other side of that, there's everybody, like it's very easy to say like, Oh yes, we want to only ship products when they're finished and it's that sort of stuff, but there's a very dark side to that, and that's like late in the development cycle, you have a better idea and you're going to delay the launch or it's going to add money to the budget and it's spirit killing, like it's, You re-tell the stories, maybe, like, Oh, and then we had this idea to put a red door on Crazy Time, and it would bring you into this world.
But when you bring it to the team, they're like, Really? We're adding this, like, another bonus round, and it's the biggest bonus round? Monopoly had one bonus round. We've already got three, now we're adding a fourth to Crazy Time? And it's super late? Or, the game is like pretty polished but it's not perfect and now you have to go to the commercial team which is 100 people big and there's a thousand customers behind them and you've got to say, I know we said June 3rd--we're pushing that back to July 15th.
And it's like, Todd, we got all the marketing dollars. We've got the positioning. There's a campaign set. And you take the fire. Now at a more mature state, we've had some--we've gotten hit some home runs and so people have a little bit more forgiveness, but in the early days, we weren't the company that makes the great game shows or whatever, so it's dark when you do that stuff. It's fun to say ship to perfection, but it's hard to do.
Drew: I'm always curious when people talk about culture. It seems like very amorphous what that actually means is what you're describing right? They're kind of an example that sets Evolution apart from the competitor that sort of we're in the last stage of development. And we're willing to really rip something apart to improve it.
Todd: Yeah. It runs the gamut. It's everything to perfection. I tell the story of one of our founders, Richard Hadida, the original Chief Product Officer. And they did a game VIP Roulette and he bought this clock to go in the background and it was like an original piece that he bought for like $10,000.
And you could have done a fake for 200 euros. It's just on camera in the background. No one would know. I wouldn't do that today, by the way. But he did. And I talk about that as being like, That's who Evolution came up as. And it's like, No, I want the real clock. I want the actual one from 1880.
And that is so cool, but it runs throughout the entire company. Everything is to perfection. We have a machine shop because we couldn't get others to build things the way we wanted, so we built our own machine shop. We'll buy bingo machines and then we Frankenstein them. We take them apart, we reinforce everything.
We're like, a three second ball draw is worthless. We draw 20 balls, three seconds apiece, that's 60 seconds. That's too long of a game round. The game is dead on arrival. So then you say, Oh, we can design a game where there's 10 ball draws. Now you gotta hack up the game and it doesn't achieve what we want and you got other problems.
So, I'll go to the engineering team and I'll say, Can you figure out a way to get this down, cut in half? And so we do 1.5 second ball draws, which--it's a huge thing. You're buying these things from the factory and you got to read the balls in real time and you're moving a lot of balls through, and it's got to be random, and then the balls want to-- they want to self destruct because they're perishable items and then that means you're banging them harder against the glass so the glass dome that they're in gets destroyed, and it's just problems after problems after problems.
But yes, that culture of excellence is Evolution. That's why people will take someone from our games team, or a designer, or mathematicians, or some operational people, or a cluster of all of them, but they can't recreate it, because our culture is just--it runs through everything we do. And it is a culture of excellence.
Drew: You are very much the lead sort of innovator on a lot of these games. Is there kind of a downside to having such a centralized, large figure who's leading a lot of the innovation? Does that not give enough opportunities to other people on the team to kind of run with their own ideas that maybe are ideas that you wouldn't be able to see at the outset?
Todd: I make it a mission to--I'm the one on your podcast, and I might talk about a given idea or a given game. And someone would inaccurately think that every idea belongs to me, but it doesn't. What am I better at than others? Well, not many things. But one of them would be: I bet I can lead a brainstorming session better than others.
And there's a dance, because obviously I'm a senior person in the company, and I got to voice my own ideas because I want to steer the conversation. I have ideas, but then others will let my idea become their idea. So having a culture of disagreement and having a culture of spinning up a lot of ideas.
And then rejecting those. And when nine out of 10 ideas is rejected, people tend to not want to give ideas. And so extracting the last best idea--I think that's our culture. I say it all the time. What we call a product review, other companies would call a mugging, but it's loving--it really is loving.
And so it needs to be my mission, as one of the central figures, to get all the best ideas out there. But with that said, not every idea gets to see the light of day. And you can bet that when ideas get rejected, people are bothered by that. And they might feel so strongly about those that they just say like, I've given four cherry ideas and none of them got through.
Or I'm leading the roulette team and it seems like I've got a lot of cooks in this kitchen, or I'm leading a game show team and there's a lot of cooks in this kitchen--and there is. That's our system. And you might say, I want to run it my way. And that's not the Evolution way.
Our way is very, very collaborative. And good ideas can come from anyone, anywhere, at any time.
Drew: I'm curious, when you're thinking about designing all of these games, you would think they're gambling games. It's easy to get someone who likes gambling to continue to play a game, but it turns out that's not really the case. And it's actually very hard. And there's a lot of elements involved in that.
And you talk about one of them, RTP and volatility. How do you arrive at the right balance? And maybe if you could explain to people who don't know what we're talking about what that is.
Todd: Yeah, so RTP--return to player--is the opposite of the house edge. In a game like baccarat, you bet a dollar, and in the long run, you'll get back 99 cents. On this hand, you're either gonna win or lose. So it's gonna be quite binary. But over the long arc of time, you're gonna get back 99 cents on single zero roulette.
The house edge is 2.7%, the inverse of that, 1 minus the 2.7, is the RTP. So, the RTP is how much you're giving back to the player. And so you say, Okay, well, the end, when you're inventing a game, it has to be something like the player gives you a dollar and now you're going to give them back 97, 98, 99 cents.
And that has to be fun enough. That they want to do it again and again and again and hopefully tell their friends about it. And, of course, there will be losing sessions, and they still have to find it to have been amusing enough that they come back again and again. It's almost impossible to make that product.
You don't even give them a drink, or a cookie, or anything. It's the entertainment value. And it's not for free in the long run. It's also the only form of entertainment in the world that might pay you to do it. So that's a pretty good upside. And so the dance of RTP, this subject is--there's no one answer. So, if we're talking about baccarat players, or game show players, or Americans, or Latin Americans, it's different for everybody—but the trend, and we've been at the forefront of this, is trying to take games that people know and like, and then give them the chance for some punch.
So take Lightning Roulette, the game where we combined RNG, random number generated elements with the physical wheel. So now you think, Okay, well, how do I preserve the best parts of roulette? And so that, we start with that as a premise. So I want all the even money bets to be the same as normal roulette.
Red and black, even and odd. I want all the first dozen, second dozen, same, same, same. I want the splits and the corners in the middle to be the same. But if you bet straight up, we will offer you, instead of the usual 35 to 1, we will take that down to 29 to 1. Or what we call 30X. And in exchange for that, we will give you lightning strikes every round.
And that is the entire dance. Is the trade offs. I've got to give you something that you say it feels like more than what you're taking away. Because you're always taking something away. First order of thinking is, Why don't we give players this? That's great. Now let's focus on what you're taking away.
And it's so easy to lie to yourself and say, They won't miss that. Oh, on Blackjack, we'll just say ties lose. That's a violent experience. What are you gonna give them in exchange? Well, you could give them some things that would be acceptable and some things that wouldn't. But that is the dance, and it's a very tricky dance.
And for baccarat players, it's different. And for every kind of player, it's different. But you tell me the player type, and we can go deep.
Drew: And you're kind of alluding to it. I just want to ask you a little bit more straightforward. What happens when you make the RTP too low?
Todd: Yeah. So, the first thing is RTP and volatility. And the two subjects, even people that have been in gaming their whole life, mix the two up. So, a low RTP means players lose a lot of money over the long run. Okay? A high RTP is players like--but I could offer you a game right now with a thousand percent RTP, okay?
Sounds pretty good, right? So every dollar you bet, you're gonna make ten. In the long run. And if I said to you, How much of your life savings would you like to bet if I give you one round? You only get one round. You don't get to play forever. The unsophisticated answer is, I would bet a big portion of my net worth.
The sophisticated answer is, You gotta tell me how the game works. Well, the way this game would work is, there's a thousand marbles in a drum, and they're all white, and there's one red one. And if you can reach your hand in and pull out the red one, I'll give you 10,000 to 1 odds. Well, you should only be getting like 1,000 to 1.
But I'm gonna give you 10,000 to 1. Well, what's gonna happen if I let you play one round? You're gonna lose. Cause you have a 1 in 1,000 chance of winning. So, I use that as an illustration to say that in that game, you've got the best RTP of any game you could ever imagine. But so what? The volatility is so heavy that you're going to--all you're going to feel is that it's the world's worst game.
If you play five, six, seven, 10 rounds, if you play 20,000 or a hundred thousand rounds, you'll like it. And most players are going to go away saying it's the worst game ever. So volatility is more important than RTP. Lotteries can run at a 50 percent RTP, because who cares? The top prize is $600mn dollars.
Sure, it should be 1.2 billion, but who cares? You're fine. So, big prizes allow you to do things with RTP, that a game like Blackjack, where you're winning 42% of the hands, doesn't allow you to do. Okay, so, RTP too low, coupled with a reasonable volatility--not these extreme cases--the game will crash into the ground.
At the end of the day, the wager goes down, people play less rounds. If they're playing less rounds, you're violating the central principle of the product, which is, It's an entertainment product. And so you're losing your money faster. And the game will die. Now in land-based, they're--maybe in Las Vegas, they're a bit more relaxed about that, because they have an objective.
They're trying to get that seat free. So the faster they can get your money, the better. So like a six to five pay on a blackjack, or three zeros on the roulette wheel, or four zeros on the roulette wheel, you'll lose your money faster, and it frees up seats. And on Saturday night, there's only so many seats to go around.
Now at Evolution, we don't have that dynamic. We have unlimited seats. Not on some of the blackjack games, but by and large on most of the games, we can support an unlimited number of players. I want the sessions to last as long as possible. I design games--I talk about holding players hands and bringing them on a long journey that that lets them have fun until they have a chance to make big money and maybe they will today and maybe they won't, but give them maximal entertainment value. And if you want to make great games, just ask yourself what's the most fun possible game you can make.
And again, a little bit like saying, Only ship products that are perfect. Same thing here. It's easy to talk that way, and say that. But then what happens is operators come to you and they say, We want lower RTP. And because they want to maybe give back more bonuses to players, and so with a lower RGP, they have more room to give back bonuses.
Or something like that. They have their own objectives. But it's kind of interesting. If you say, What's the world's biggest game? What's the world's biggest gambling game? It's baccarat. 1%, 1.05% edge on the banker. 1.2% on the player. What's the next biggest game? Probably Blackjack.
Mmm, okay. Sub 1%. Slots is interesting. Slots is a huge space. I don't know if it's bigger than Blackjack or not. Maybe it is. Slots is huge. They've been pushing the RTP down on Slots. And maybe that will push them into the loving arms of live casino and table game players, but we'll see.
Drew: And that's really interesting, too, because it kind of also reminds me a little bit of old school wrestling where wrestling used to be a very boring thing to watch, but then it was characterized by very sudden and violent movements that would lead to people often dying or getting seriously hurt.
And so it was an hour ordeal of boredom with two minutes of excitement. And that was the wrong mix of volatility, if you will. And so that's why wrestling eventually became staged. So it could be a more steady entertainment experience. And it sounds very similar to the thing that you're trying to construct with a good game.
And I'm wondering though, you're talking about like max entertainment value and I've heard you talk about this before, but how do you make an honest game?
Todd: Yeah, it's a lot of things. And some of this information belongs to Evolution, but I'll answer your question in a thoughtful way. This is the fine, fine art of game making, and like I said, a lot of the information does belong to Evo. How do you make an honest game? The question is sophisticated by itself.
Because I will look at other companies’ games, and I'll say, Oh my god, it's disrespectful. It's just utterly disrespectful of baccarat players. And it's asking yourself, Okay, let's remember, these are financial transactions. Financial transactions. If you went to your bank's site, maybe you have a checking account and a savings account, and you were trying to move money between two accounts, and you saw advertisements for Red Bull--you don't know why you'd be turned off.
You don't know why you'd suddenly trust your bank less. Maybe you do. I don't know why I would trust my bank less if I suddenly saw Red Bull ads inside a logged in area where I'm trying to--let me just move money between accounts. I would feel like, I don't like these guys anymore. I don't know what they're up to.
They're not up to anything. They're just up to trying to make a couple bucks advertising. But that would be completely disrespectful. It would be like, dishonest in a way. It'd violate a contract that I never knew I had with my bank. Now if I go onto, I don't know, Yahoo! Finance or something, I fully expect it. I'm getting a product for free, and I can sort of look at different pieces of information about companies, and I have to endure some advertisements. So, understanding that fine, fine subtlety--that's an example outside of gaming. Now you move over to gaming, and these are financial transactions.
People at the end of a round--some of them have won, but some of them have lost money. That's money that they work for. And yeah, it's entertaining, but that's the least entertaining part of it. And are you thinking about celebrating for the winners at that moment in time? Making wins feel like wins?
Are you thinking about giving a pat on the back to the losers that round? Are you showing the right things on the screen at the right time? Do you have the right camera angles? Who are you optimizing for at a given moment in time? New players, who are first timers, who are trying to get oriented, or totally mature players?
If I'm a new player, I might need a long betting time to try to figure things out. But if I'm a repeat player, I might just use rebet every time, I only need a few seconds. But they're both on the same table together. So how do I think about that? And so, there's just layers and layers and layers of subtlety.
I've invented card shuffling machines, automatic card shuffling machines--I have patents on it. I worked at a company called Shuffle Master. When I was at MGM, we brought in card shuffling machines. And I've largely banned them at Evolution. And we have hundreds and hundreds of people that do nothing but manually shuffle cards.
Because it's a more honest way to offer a game. People don't want to play against a machine. Obviously it's labor intensive to have people manually shuffling cards. And then we load those cards into what? A see through, clear, plastic shoe. We would never do that in a real casino. Those cards could be marked.
There could be all sorts of issues. But in a physical casino, you're forgiving. You're like, I can reach out and grab that shoe with my own hands. I'm not supposed to, but you're more forgiving. Whereas online, we're doing everything we can to ensure maximal honesty, maximal trust, and maximal transparency, maximal respect.
Drew: I remember when I was researching Evolution, I'd go to all these videos and watch people play. And if you're looking at a competitor's game, they show the wrong angle. You'll hear them go apolyptic that they're really frustrated that they're not looking at that right angle. And so you could see how that really is very important. These small, little things to that full experience that you're alluding to and hitting on.
Todd: Absolutely. Yeah. And then there's superstitions perfectly normal in the gambling world. You need to consider that people are superstitious or when they lose they want to blame anybody but the bad luck and they're gonna say Oh, it's a scam. It's this, it's that. How much do you want to cater to that?
How much do you want to address those concerns? On some level, you need to, and you should, but how much is too much? There's answers to those questions, but you're living like deep, deep, deep into the--that's why I say the last 5% takes half the time. And you play a game and you're just like, No, no, no, no. This doesn't work for a variety of different reasons.
Drew: When you're sensing that this doesn't work, is that just your own intuition you're relying on? Because I can't picture you doing market research.
Todd: Yeah, it's intuition. I wish there was great market research out there, but we've done it. And when players win, they like the game. And when they lose, they don't like the game. The best thing to do is just see how they act on the game. And see what they do with their thumbs or their mouse.
Or see the way they click, see the way they engage. You can draw whatever conclusions you want about how great your game is, but if you're getting nine rounds per player, that speaks for itself.
Drew: How important is the sort of data history that you've accumulated on these games? Does that help you build new games or tweak old games? Or is there kind of limited insight there?
Todd: It's directionally useful. Of course, a game that has tons of players and makes tons of money--that's the most useful insight. But it’s--I think it's useful to us. Not because of the data itself, but we'll go deep into rounds per player and, Oh, look at the rounds per player in this country versus that country.
What do you think that is? Or why do you think this game blew up in this country, which we didn't even expect it to? But then the country that we thought it would be great in, it's not great. And so you get that from data, but then it spurs discussion. And particularly around our misses, people would be really shocked by how little time we spend on why games work, and how much we spend on games that don't work.
And the day, it starts with the data, which I'd say maybe is 30% of the value. The other 70% is brainstorming it. And you don't know if you've landed on the answer at the end. There's no answer key that you get to look it up and see if you're right. You're just left thinking, Well, geez. Maybe this didn't work because of XYZ. But I'm terrible at trying to figure out why games don't work, because I've tried to fix a collection of games, and been wrong. We did a game called Gonzo's Treasure Hunt, and we changed it to Gonzo's Treasure Map. And we added a bonus round. I thought, What's missing?
Why isn't the game working that well? Well, what's missing is the bonus round. Wrong! Didn't work. We've tried to save other games. And generally, we've got a poor track record of trying to save them. And so it's wasting roadmap resources. You never think you're wasting roadmap resources. You just do it accidentally.
Drew: It's no surprise that a lot of competitors copy a lot of your games, but as we talk about a lot of these subtleties that make the game really stand out, how often are you looking at a competitor's game that's trying to copy you and you're able to just see they mess this up? They mess this up? They didn't copy this right. And their problem is almost--they didn't copy everything enough.
Todd: We look at everything that's out there. But I think people would be surprised how little we look at what else is out there. We don't find it too instructive. We do it because we're human beings, and it's interesting to see on YouTube, a new game or something like that. But it happens almost immediately.
Like you look at it and you'll just see a dozen things and it's so funny, like, things that seem so blatantly obvious, they just pop right away. And you'll see they copied that, but they copied it for the wrong reason. The reason to do that isn't because of XYZ, it's to support this other thing. But they didn't do the other thing.
And so now they have it in the game, and it's just useless. Or they tried to outdo us by adding this, this, and that element, but they're going to destroy players in this, this, and that way. Or you could only do that if you do it in combination with another thing or with a certain frequency or--again, I gotta answer the question without giving away the secrets. It happens very, very fast.
Drew, if you and me sat together and wrote a song, and we agonized over it for a year and we refined it and we studied what makes a--what is the right rhythm and what's the right beats, and then we took it to Max Martin, famous songwriter, and we said, Hey Max, what do you think about it? Immediately he would notice 22 things that are wrong.
He'd be like, Okay, all right. You learned that you needed to do bop, bop, chorus, dot, dot, beat or whatever it would be. But that only works in this environment or that only works with this genre of music or that's yesterday's music. That's not where the market's going. It's the same thing with what we do.
Drew: Yeah. And it's funny because it reminds me of this book I read called Secrets of Our Success. And these explorers encountered this native tribe that figured out this very complicated way to eat this poisonous tubular and they had to soak it in water, they had to bury it, and they did all sorts of other things that these explorers thought were superfluous.
But it turned out that if you missed just even one of those steps and you eat this thing, it kills you. And that's what ended up happening to them. And it's very similar where a competitor sees something and they think they get it, but they don't actually understand why all of these elements exist. And so they end up shooting themselves in the foot when they copy it.
Todd: Oh, that's a good one. I'll have to find that one. But I've said before, maybe people think that making a casino game, it's like 1 + 1 + 1 + 1 + 1 + 1 + 1 equals a game. But it's not. It's more like times each other. So it's 1 * 2 * 2 * 3 * 1 * 3 * 2.
And if there's any negative number in there, the whole answer is negative and you've wrecked it. And any one element can do that.
Drew: Yeah. And we're talking about the elements within the game that make it successful. But we could take a step back and talk about all of the elements that exist within Evolution itself that makes you guys successful. And there's everything involved in making a live casino provider from not just the actual games, but you have all of this kind of support.
And so my question to you is, If I were to give you 10bn euros and I were to say, Go ahead and set up a competitor--what would you do? Would you give me the money back?
Todd: I have a rule--Never refuse 10bn. But it would be very difficult. First of all, I'd never be so arrogant to say that what we do, nobody else can do it if we did it. And we've done it over time, and there's a lot of institutional knowledge and all that sort of stuff.
But it can be done. So be paranoid, run fast, try to constantly widen the gap. But you need 50 of me or a hundred of me, in all around the company. What allows us to do what we do is that when we're developing a game, I get with math and risk team very early at the conceptual stages, and they'll say okay.
Well, this game is very countable. I'm like, Okay, well, can we just shuffle after three decks out of eight like what does that do? And I know that doesn't fix it I don't want to do it. But what about two decks after eight out of eight? That's getting kind of silly now, but if we wanted to do it, could we do it? And You could--I'm like, Okay, well, I changed my mind.
I don't want to do that. And then, like, okay, what if we put a continuous shuffler on the table? Alright, well, players aren't going to like that, and it's pretty loud, but it solves all problems. Okay, well what if we changed the math to make it more aggressive so that the counters can't overcome the house edge because we run a lower RTP?
Well that would definitely help. So what if I did that, but now you're punishing all the rest of the players for the 1% of the players that are gonna beat you. That's just with risk. And Then they're gonna develop risk tools for every single game that we make because there's different ways to try to beat the game. And so they have to write a whole support structure just to address the countability of that game. When I say countability, I'm talking like counting cards and blackjack, but you can do it for side bets and baccarat and you can do it for everything. Anything where you don't shuffle every round. You're removing cards from the deck and you can kind of predict what cards are left and it helps you. And that runs across the entirety of the company.
The training of the dealers, the hiring, the training, the way you advertise, what we've learned about how to advertise and how to get people in and all this sort of stuff. How to pick which countries to go into when you're doing it at scale, and you're trying to hire four, five, six thousand people.
And understanding there're proclivities to working in a casino and how you advertise and how you position it. There's just--it goes in every direction so far and so wide. And the sound engineers, the integrations teams, it's just--it's so vast. And you're doing all of that to be the 45th live casino provider.
And even with unlimited money, finally at the finish line, you've got a product you offer to operators and they're like, Well, we have Evolution. Our players know it and like it. And you say, Well, we've got a new game that's just as good as Crazy Time. But my players like Crazy Time. And you can't do anything for my players that Evolution's not doing.
And that's the hardest part of all is you're going to run the game at 100% RTP. The players would like that, but the casino won't take the game. And so, we leave very little room to get inside of us.
And the last one to get to switch over is the player. And why are they going to? They've won money at Evolution. They've built trust with Evolution. They've had fun with Evolution. They might have dealers that they like. They might like the variety of different games. And so, it's a very, very, very difficult exercise. Just like it is to create a soft drink or something.
Drew: I think of all of these different kinds of interlocking moats almost that exist within Evolution's model, because it's not just the very popular games that you have. It's not just understanding all these small nuances from the RTP, the camera angles, the volatility. It's also having the actual physical studios.
You need to have the studios and all these different geographies. There's all sorts of regulation that you have to deal with. That's interplayed with that. Then you need employees there. You need to have an employee training studio. I hear turnover is sometimes pretty high because there's a lot of college students.
And so you need to be able to train 1,000+ people a month to be able to put them into all these studios. They need to act professionally. On top of that, you have players that get used to certain games. Then you have the whole distribution within all of these different operators. And then now you also have one stop shop.
You have the platform, everything's being integrated, so you're not just competing on live casino. You're also interplaying that with slots. On top of that, you also have all these risk elements that you're talking about. All the anti cheating stuff that when people copy a game, they totally forget that if a neural network can catch certain things that many people can't otherwise.
And then all of a sudden the operator is losing money. And then it's also the whole flow of the game. It's making sure it works on an old android and also a safari browser, all sorts of different things that you could just keep going and going and going and then it's like, even if you do all that, okay, congratulations, now you're maybe on parity with Evolution. But why would someone pick you over them?
Todd: Yeah, and it's gonna be very difficult to get to parity, because there, we have brands. Oh, we have roulette with multiplier. That's great. I like Lightning Roulette. And I like Extreme Lightning Roulette. And I like Red Door Roulette. And I like Gold Bar Roulette. And the new Fireball Roulette.
Like, the brands themselves. And Evolution--Evolution is a brand. You probably don't want to switch banks because you like your bank. You have no reason to. There's no value in you switching banks. And it's the same way here. You did a great job articulating all the complexities and the difficulties.
And and then remember there's the operator as well. The operator, maybe they can get a cheaper revenue share from another live provider. I suspect they can, it'd be very difficult for any other live provider to ask for the same rates. And so they come in with a cheaper product, a cheaper price.
But then you wonder, why does our blackjack hold? Run 30% lower and remember the difference in 30% like 1% percent to 0.7%. That's 30% right, so why does that happen? Well because you're getting eaten alive by card counters, you're getting eaten alive by false shuffles, you're getting eaten alive by dealers that might be on the take.
You're getting eaten alive by bad shuffles, and people that have software where they can locate where the aces are going in the deck after the shuffle, because they've got an algorithm that tracks your shuffle, and you're not tracking your own shuffle. And it's an endless supply of ways to mess the business up.
And remember you talked about optimizing for like every single device. That takes a team. And then behind that is bug fixing. So someone creates a ticket to fix a bug on an iPhone 7, someone is gonna smartly say, That's only like a couple thousand dollars a month in GGR, and we're only getting a fraction of that.
I don't want to spend two days fixing that bug. And at Evolution scale, we can support it again with your 10bn example. You can do it, but you're just doing it to run a charity or something. You're not doing it to make a profit.
Drew: Yeah, yeah. And this is also before we even get to one stop shop, or OSS, which is kind of the new competitive differentiator you guys have. And maybe if you could kind of just explain what that is and why it's so important in really improving the integration with operators and also players.
Todd: Yeah. So, we have a pipeline that goes into casinos. And so a new casino that signs up with us, integrations are a lot of effort. All of our partners all have these integration calendars. And if you're a small supplier, you're going to be a year away from it. Evolution can always get on the integration calendar cause we're an important supplier.
So we might have some new feature or something that we're rolling. So with one stop shop through that one single pipeline, we push Evolution, Ezugi, another live casino brand that we own, No Limit City Slots, NetEnt Slots, Red Tiger Slots, Big Time Gaming Slots, we're doing a new brand called Tapperoo. So, we spin up a new brand, we just pump it through the Evolution pipeline, the One Stop Shop pipeline.
Never will a new brand have had better distribution than Tapperoo will have on day one. And that's an amazing pipeline. Adjacent to that, scale is if we do a licensing deal for intellectual property, we can spread it across all of those brands and then push it through the same pipeline.
Additionally, we create bonusing tools. So free games, we have something called in-game rewards where maybe you're trying to drive traffic to your site from whatever, 3pm to 5pm, and so you'll say, if you bet at least 10 on a roulette spin, and it lands on number 8, during that 2 hour window, we'll give you an extra 10. And so it'll kind of help drive traffic, and we support that sort of stuff, and you can do it.
In-game rewards on any of our games as well as other bonus tools. And then it's a single backend for our partners. So it makes it easier and easier to do business with Evolution, to promote Evolution games and so on and so forth.
Drew: Are operators fighting OSS because they don't want to lose that direct connection with the customer and they feel like maybe they're being commoditized or modularized with this push?
Todd: No, no. To them, it's seven integrations or one integration. And they're not going to--nobody's sitting around saying, Geeze, we would never have taken NetEnt games. If they don't want them, they can just turn them off anyway. They have all the control there. No, it just--it's purely value added.
Drew: It’s value added maybe for the operator, but then I could see a new operator coming in saying instead of doing seven integrations, I only have to do one now. Now maybe it's easier for all these other operators to be more competitive at a lower cost with less friction.
Todd: Oh, interesting. I suppose if you're an incumbent, anything that makes it harder on the new guys. And there're a lot--there is a lot of benefits to the big operators too, because we're always shipping new stuff through OSS. So they're beneficiaries on that level too. Inevitably, the operators, it's possible, it's possible is the answer to the question.
Inevitably the dogfight in operations is getting players to sign up at your casino at a reasonable cost per acquisition. And then delighting your players so much that you keep them for a very long time. That's the whole business. And there's a lot of ways to approach that challenge. And it is a challenge.
And back to Evolution. If you're trying to do the dance of delighting your players and to keep them as long as possible, and now you're taking a second tier provider and saying, You should try this roulette, not Evolution’s, because it's cheaper, or you should try this blackjack, even though we talked about the risk of some such things.
But it's a little bit like you're running a nice restaurant and you're saying, can you get away with putting a little less chicken in the chicken pot pie or can you get away with using a second tier, just an okay coffee at the end of the meal instead of that big fancy coffee machine and do like proper Americanos or whatever and the airline can take a couple tomatoes out of the salad and and they can--everybody can play that game. But that's a dangerous dance instead of just trying to put the best product in front of the players and delight them at all times.
Drew: Right. Cause that sort of thing, you can increase profits in the short run by cutting costs, but then people figure it out and they're ultimately going to leave.
Todd: Yeah, yeah. I mean, if you're running a casino, and you have someone who comes in, and they're going to--it's the biggest player you've ever had. And you're very excited. You've done a lot of marketing effort to get them and that player asks you, I want to play live casino, what should I play? You will probably say, Play Evolution.
If you're the operator, even though you have a cheaper solution that you might offer in that moment in time, you're like, Well, I got to make sure that this player is super happy, even though I might have to pay a little bit more. I must make sure that they have a great experience. I got to get them into Evolution Salon privy or into that top tier product.
Plus they're playing huge money. So I want to make sure that it's maximally protected and best possible game protection and so okay, so it's kind of an easy decision in that theoretical scenario but it should be that answer with every single player
Drew: Right. And so let's think from the operator’s perspective. They have a bunch of games on their platform. They don't want any one supplier to have so much importance or leverage over them because then they feel like they're in an unbalanced position when it comes to negotiations. And ideally, players would be kind of agnostic as to what game they're playing.
Of course, in reality, players tend to prefer Evolution games. Now, with the kind of push with OSS and now also these more bonus tools and kind of these other marketing tools, I see it as you're encroaching a little bit on taking more functionality from the operator that used to give them some control as to what games to direct people into, and now it's pushing more kind of the Evolution ecosystem.
Has there been any pushback in that regard that they don't want to take these bonus tools because they still want to try to keep it more balanced in terms of what games the players will play?
Todd: The great operators are generally trying to put the best games in front of the players at all times. I would love to say that that means it's all Evolution, but it's not. There's lots of other companies that have phenomenally good games, and in terms of being too set, too centered, or too focused, or too concentrated in one supplier, I think it's something that more is a conversational thing that people say than something that's an actual concern in reality. And so, you mentioned they might have less leverage in negotiations or something, but if someone wants to do a 10 year deal with us, just tell us. We can do a 10 year deal, and you'll be protected. You want to do a 25 year deal? We can do that. It's unusual. People don't necessarily come and ask for that. But we're open for business and we don't have--there's no historical precedent for. Evolution raising its prices to clients. As clients get bigger, they generally enjoy better pricing. So I understand the conversation. But it's not something that really plays out in practice.
Drew: Mm hmm. Would you ever consider having third party suppliers join OSS? Just so it's kind of easy for them to also benefit from these tools and maybe you take a take rate and the operator benefits with a simple integration.
Todd: Yeah, we've got this wonderful pipeline that's the world's best distribution for online casino. And we want to serve the best games in the world to our partners, and so if there's someone out there who has great games and they wanted to benefit from that distribution, there's probably a conversation to be had there.
We've sort of accidentally gotten good at that, out of necessity. We've gotten good at that through, because we've acquired these lot companies, and we had to create a pipeline to integrate them. And now I told you we're going to do Tapperoo, and that'll be pushed through OSS.
It's not inconceivable to think that there's some company that's making great games that we're intrigued by, and an acquisition isn't the natural path, but we would like to offer them and make our offering stronger. Yeah, I could, I think that's a reasonable thought.
Drew: And since you're mentioning slots, I'm curious on two things. 1) Why is slots such a more competitive industry than live casino? And 2) Slots, in terms of revenue, has been kind of meandering for a while. And then more recently, growth just inflected up. How much of that was really an improvement in the games or really just kind of help with a push from OSS being able to integrate slots with all your other offerings?
Todd: Mmhmm. Slots is more competitive because they're [easier?] to make. You don't have to train dealers. You don't have--you basically don't have the concept of cheating. It's infinitely--you build it, you plug in the servers, and you go away.
That's the business. Anybody who ever quit a slots company could grab a couple friends, a couple designers, a QA, a few developers, and they can start making slots. And then the distribution of those slots has been made easy through--you just talked about using OSS as a means of distribution, but there's other companies that do that as a core business.
And so if you just build the front end, they've got the backend and the integrations and they'll take a piece of the revenue and they'll distribute your games for you. So it's never been easier to make and distribute games. And for a modest amount of money, you can build games. So it's a recipe for lots and lots of slots to be released. And during 2022, money was really cheap. There's a lot of it around. There was acquisitions. People would see us buying companies, for a few hundred million dollars or even to the billions. Slot companies. And it's probably quite tantalizing to say, Let's go start a slots company.
Well, everybody did that at the same time. And, and it's very, very difficult. I heard there was 2,500 slots released in December. That’s the number that was given to me. So Evolution releases 10, and there's 2,500, so it's just about--and there's only so much room at the top portion of the phone and it's just about impossible.
So I suspect you'll see lots of companies sort of burn through their initial funding and there won't be a second round and it'll thin out, but it'll stay hyper competitive. About where it has. Evolution's journey in slots—yeah. It’s a little bit of everything. And the race is long.
So NetEnt, each business kind of has its own things going on. NetEnt had old technology, old platforms. And so, some of our best games look very old and have an old interface. Like Starburst and Gonzo's Quest. So we've had to overhaul the architecture of the games so that we can then refresh the interfaces because we get great positioning with those games, but a modern player clicks on it and it just feels very old. So that's been one thing.
And going through the games, then layering in, finding our footing as a company. What is NetEnt? What is Red Tiger? What is No Limit City? No Limit City has always had a great identity, and they've always had their niche. And then same thing for BTG. And adding in more and more features, finding our footing, understanding where the market is, at a time when the space was getting hyper competitive.
But then, one stop shop. So we have clients that just--some of them don't have Big Time Gaming, or they don't have No Limit City. And so now we can push those games through one stop shop, which gives us opportunity. It also ensures that we can get kind of every game to every market quite quickly. So it's all-- it's a little bit of everything, all happening against the backdrop of just a very difficult, competitive, market. So, lots of different forces pulling in different directions.
Drew: Yeah, when we think of Apple and Google, there's a big fight over the search bar and kind of being the first point of customer contact and controlling that customer journey. One stop shop gives you the ability to control the lobby, right? And then also control recommendations within that.
And if someone wants to switch to a slot after playing roulette, they can go now to an evolution slot as opposed to being pushed out into the general slot lobby. How important has all that been for you guys in seeing different consumer behavior and directing them to your games?
Todd: So we're pretty familiar with that as a concept in live, because that's how we grew up, with a live lobby. And that's the nature of live casino players. They don't like this dealer, they want to switch to another blackjack table. And so it makes sense to bring them into a live only area, where they can quickly find another live game.
And rather than all the way back to the operator's lobby, then they have to click on the live tab, then they have to kind of scroll down to blackjack, and then they gotta find another table. So it's a convenience to players and it serves operators too, to get them on the fastest possible journey to finding a game that delights them.
But there's no doubt as we get increasingly more games and game types, the player of today it doesn't want to have to, well, forget about not wanting to have to, they're not willing to go and look through all the games and see what they're all about. They just want great recommendations.
And those recommendations can kind of come from anywhere. They can come from the lobby, or they can come from a dropdown menu, or they can--or maybe you should even be able to play slots while you're playing live. And we can see, across the whole of OSS, what games you like, which fuels better algorithms.
So we can see all your Evolution branded slot play and all your live play. And so, the algorithm is just as important to Amazon and Google. It's very important to us as well. And that's a partnership with our operators. We're trying to serve their players on their behalf.
Sometimes it does come up. They'll say, Hey, we don't like, we want to control the algorithms. And I think that's generally born out of us not doing a good job telling the story about how we're serving the players. It's not about domain control or anything like that.
The operator shouldn't necessarily have too much of an opinion about if they play another Evolution game or if they play another company's game. and they're huge beneficiaries of the algorithm. Helping players find games that delight them.
For example, we can introduce somebody to Crazy Time. Well, a player who's on Instagram and decides, You know what? I'm gonna go do a little--I'm gonna go to the casino. They have a game in mind. What is that game? Maybe it's Crazy Time. For many, many players, it is Crazy Time. And so, if we've introduced them to that game, a game that they didn't even know that they would love, but they do, then we've really helped the operator drive additional sessions.
And so, over the long arc of time, it's very much their friend.
Drew: And Meta talks about how a lot of their AI led recommendations have improved overall usage on their platform, in particular with Reels. Have you guys seen something similar that your recommendations are leading to more player engagement and more time spent gambling?
Todd: I don't think so. I look at the rounds per player and all that sort of stuff. And it's very hard, because you can drown in data. And Evolution's a growing network, and a player could switch from DraftKings to FanDuel to MGM, and it's the same one player, but we don't know it.
And so, it's kind of hard to keep a good tab on players, or they might have money and so it might look like we're getting a little less action from both of them from these quote two players, but it's actually one player. So you don't want to try to draw too many conclusions from it.
You just have to know that in the big picture, you're introducing more players to these games. The rounds per player is sort of my favorite metric, because you can't fake it. Wagr can be manipulated by one big player coming in, or maybe the game lights up in a country that has a small average bet.
But the thing is, people aren't gonna give you their time for free. They have to enjoy it. But I think the algorithm largely just helps people find a game that they like a little more. Makes the product a little more sticky, and you'll see it in more returned visits rather than playing to a different bank roll or something like that.
Drew: And I want to ask about the product roadmap, and I'm going to weave in a couple questions we got from online. So you guys announced that you have this big product roadmap, 110 games coming out, and correct me if I'm wrong, but you also are working on a game show that you believe is going to be bigger than crazy time. Can you maybe talk a little bit about that without saying anything about it?
Todd: Mm hmm. So the game that I think could, will be potentially bigger than Crazy Time, we'll release at the beginning of 2026. So we've got some time on that one, and it's become a familiar thing that I've said many times now. It's the biggest game, it's the most expensive game, it's the most grand.
We've got a spectacular brand for it. A brand idea that we're going to bring. And it incorporates all of our learnings. And one of the things that I'm proud of about Evolution is our timing has been really good on things. We've not been too early with stuff, and we're innovative, and so it's easy to be too early on things.
But you introduce a concept, and then another concept, and another concept. I've got an idea that I think is a great idea right now. But I think it's a couple of years too early still. And we gotta--I don't know how we're gonna get players on a journey over to that, but we will, in baby steps. And then I think we'll have a game that they're gonna really love.
But it requires new backend architecture and some stuff like that. So yeah, it'll be everything a game show can be. I gotta save--keep some powder dry. But that's coming in 2026. We've got a whole 2025 roadmap in front of that.
Drew: Okay. And do you guys ever think about making the game show host a little bit of a celebrity? Because I know in a lot of ads you see the same woman for Crazy Time, but then you maybe don't want to make someone so big that they come to associate the game with that person. But if they do see that person, then maybe it's a little bit more fun to play along with them. But then you also don't want them to gain that much leverage over your franchise. Is that something you guys think about? Or is it mostly just the focus is on the game, not the presenter?
Todd: It's not something we think a lot about. We know that they become celebrities. We love that. We think it's super cool. I think it helps us recruit better people. And some of them probably go on to be--it gets their YouTube channel going in their own right or whatever, and that's cool. But the game runs 24/7.
It runs on three shifts. There's relief dealers. The dealers turn over with time. In the early days on Dreamcatcher, I remember thinking, we talked a lot about that. And the thing is, you and I will look at the game and be like, That dealer's great. When I talk to players, they'll say like, Oh, this dealer is spectacular, and it's interesting that you see different things--different players like different things.
Sometimes people think that, Oh, you must want all female dealers. No, we're about half and half. The game shows we intentionally do half and half. Half male, half female, I mean. And what makes a great dealer is different to different people. So, yeah, you could agonize over that subject.
We have a new product called Live Spins, and the host is playing slots. And then you're playing along with the host and you're betting behind. In that arena, we are thinking more about them as a celebrity, and them carrying the game. Because thing is about talking with the host. That is the experience. It's like slots with friends. But broadly across Evo, we just want to give them a ton of freedom, let them be themselves, bring the energy, bring the fun. But no, if someone got really big, and we're not worried about it, nor are we trying to make them into celebrities. It just happens naturally.
Drew: Mm hmm. And as you kind of mentioned, betting alongside people on slots. I know there's live spins and kind of a little bit more of a focus on this idea of betting with friends, some social overlays. I feel like at the same time, though, this has been something that's been talked about for a long time, and I don't know how real it is, how much people are actually do this. Is there any sort of development here you guys are seeing, or is it still kind of early experimental phases?
Todd: It's early. Gambling is an inherently individual activity. If you go into a casino floor in Las Vegas, you'll see that they configure the banks of slot machines in odd numbers. And that's so that everyone can always have a seat open next to them. And it's an efficient way. If you have five machines, or if you have six machines, and you have a seat open next to you, either way you can only seat three players.
So you might as well do five, because people don't want to sit next to people in the slots. You'll also see that these days, they do a lot of round banks. So you don't really see anybody to your left or to your right. And the casino floors are designed so that you can kind of go and get lost in a corner.
So it's an inherently individual activity. Now, there is something to be said about being around the other people. A little bit like you can go to a bar and have a drink. But you could have that exact same drink at home, so why not just stay home and have it? You're not going to talk to people at the bar, perhaps.
So why are you going to the bar? Because I want to be around other people. And that, I think, is probably the value. It's not so much that they're all going to become besties online and, Hey, Drew, where are you from? Oh, we ought to get together. I don't think it's that. I think it's just, like, we can commiserate together and say this game is rigged.
We can win together and say, Here we go. And maybe it brings an element of trust or a third party certification. And I think that's the value. Live streaming is huge. E-commerce in Asia where you're buying from streamers is huge. We'll see if playing slots with streamers can become huge.
Drew: And on that note, would you ever allow players to turn their own cameras on and kind of join the game that way?
Todd: We've talked about this subject, and it creates all kinds of challenges. The first is the bottom 1% ruins it for everybody. You can imagine what that looks like. The second is you start getting into the actual playing experience. So 70% of the business happens on the phone.
And we need to stream the video of the game. We need to have an interface for your betting, and that just doesn't leave a lot of room for other stuff. There's 20,000 people on Crazy Time at any given moment. And so, just slicing and dicing that makes it tough. Our sister live company, Ezugi, did this.
They did it on Blackjack, where you can show your faces and stuff like that. I didn't think it was gonna work, and it didn't. It's just not where the market is. Of course, there's some market for it somewhere. But it's a bit of a myth that gambling is this social experience.
It's social in a way. Like, probably people would call going to Disneyland a social experience. But is it? How many people do you interact with? You interact with the people you went with, but you would call it a social experience. And so, I think, because you're in a casino, or you're at a table, or people will think about a craps table, and they'll think about it as a social experience, that--or they've started a company, and their mission is to combine social media with online casino, they so badly want to believe that it's going to be.
But, product isn't just--I don't believe it's where the market is. But of course, if that's where the market is, we'll go there. If VR becomes the next big thing, we'll go there. We'll stop the whole roadmap and we'll convert all of our games to VR. If people want to play on their watch, we'll go there. So we're open for business.
Drew: Yeah, there's been a little bit of a push to bring your games into actual casinos, physical versions of your games with your IP. I'm wondering, Is there any way you could make that a sort of customer acquisition tool to later have those players play online so the experience in the casino may be good on itself, but it's really more about getting them to download the operators app and then play somewhere else.
Todd: I'm not sophisticated enough to think in terms of like how exactly that journey works. But yeah, we want to have our games. I want people to be able to play Lightning Roulette in their local casino, and then they can find it online. And online will always be the mothership. But yeah, we want to be everywhere that the players are.
And right now, we've been busy with online. But it would be great to be everywhere that the players are. And it's inevitable, and it's pretty cool for me personally, because I came from land based to online, and that has always been the journey. So the great land based companies will make something and then we bring that online.
So bring roulette online, bring blackjack online, and we've even licensed content. But now for the first time ever, content is coming from online to land based, which is kind of an interesting moment in time. If you're thinking about where are we in the landscape of online gaming, the answer is that we're actually late in the transition to online.
And that's because of regulation. Who goes to travel agencies anymore? You just log on to Expedia, right? And there's lots and lots of examples of that sort of stuff. You don't go to bookstores anymore, you don't rent videos anymore, and so on and so forth. Well, probably you'd be going to casinos less if online gaming was more widely available.
Drew: Yeah, and I'm a little over this question, but I've been asked it enough that I have to ask you: AI.
Todd: Ha, AI. Yeah. This is the part where I'm supposed to talk about all of the H100 NVIDIA product that we've been hoarding and acquiring, and supposed to look sophisticated. Of course we incorporate AI into elements of our work. We're very much powered by AI. For now though, human intelligence.
But it's wonderful. I mean, we use AI in the lobby. We use AI for risk tools. We use AI for optical recognition. We use AI for creativity on the design side, and for ideation, as well as design itself. We use it to come up with interesting ideas. We use it for moderate math. We're constantly kind of consulting it. So it's a partner in the room. But I think it would be overstating it to suggest like--we're still 22,000 people. If I could have dealers smile and like delight players 10% more or in exchange to get rid of all of the AI, I think I'd take the more pleasant dealing experience. But AI is great. We like it. We embrace it. But I don't want to overstate its value.
Drew: Is there anything interesting happening with VR or is that also too early?
Todd: Too early. We did a game that was 100% VR native. Of course you can just go onto any of our clients. You can go to a web browser, you can open betmgm.com and, from the browser, and you can click on our games and you can play. But it's just a flat screen, it's not a truly immersive experience.
We did a truly immersive experience. and the game was getting maybe 20,000 players a day. And the VR number of VR players was 3, 1, 5, 0, 0, 2, 5, 1. Okay, we did it, we learned about it, but it's just not there.
Drew: Why do you think people like live casino?
Todd: It's a good question because it's slower, and there's a number of things. Number one, it's the most trustworthy possible gambling experience. And these are financial transactions. And if, even as a non gambler, let's say you had to bet half of your life savings--or just some big amount of number--no, no need for me to be overly dramatic, but you had to bet an uncomfortable amount of money, and I said, You can go online and you can do it on an RNG blackjack game, or you can go to a live dealer game. What would you choose? Probably, most people would say, I want to go to the live dealer game.
And I'd say, But you're a sophisticated person. Both of them are regulated. You know that there's no funny business. Yeah, I still feel more comfortable in the live. I want to see the cards come out of the shoe. I just trust it more. So I think trust is absolutely central to the offering.
Then, for some players more than others, there's a social element. But for all players, there's a social element. You might not type in the chat, but you still like that the dealer's there, sharing interesting tidbits, calling the action, and it gives you a--to use the term loosely--it gives you a friend. It's a real person, and there's still something very intriguing about that.
Third. Video is all the rage in 2025. It was all the rage in 2023 as well. And so like Instagram, TikTok, Reels, YouTube shorts, the whole of YouTube--everything has become video. That's just where it's at. People want video, and live video is still very intriguing.
If you're on X and they're doing like a Spaces, or you're on YouTube and you see something's happening live--you could watch the pre recorded version, you could even watch it at 2x speed, but you might click on it because you're like, Oh, what's happening now?
Are you gonna participate in the chat? No, I just want to know right now what Elon Musk is saying in this big group of people. And you might skip over a pre recorded interview, but there's just still something very intriguing about live. It makes you feel more a part of the action. So those are some of my best guesses as to why live is so important.
Drew: Live casino is relative to the entire gambling TAM, which off the top of my head, I believe it's around 400-500bn. Live casino is less than 10% of that. And do you think going forward in the future, the real sort of gains are going to come from cannibalizing other gambling activities, or is it going to come from growing the market kind of like what you did with game shows?
Todd: I think you'll have kind of dual tail wins, not to opt out of it, but if you had asked that as an open ended question, Where's the growth going to come from? I would have said those two. Putting it on the phone makes it more accessible to everybody in America. You can't flip through the channels without seeing Jamie Foxx or other celebrities talking about BetMGM or different apps or whatever.
So it's being pushed into the mainstream so it will become an increasingly acceptable form of entertainment for people and with that increased adoption and the younger generation growing up with it on the phone, you'll just have more people playing. Then, that will hurt land based.
So, still, most of the gambling on table games in the world is happening in casinos, in physical casinos. And soon enough, you'll be asking, Is the 45 minute drive to a casino that still allows smoking in the casino worth it? And then you start saying, Okay, well, online I can get a single zero.
With a 50c minimum bet, and I can't get anywhere near that online, so I can get better RTPs, I can get better games, I can have games that many people will find more engaging, like game shows, which are not in land based casinos. And so I think, over time, you'll see land based feed online, plus greater adoption rates.
And additionally, phones are still terrible. We'll look back on now as an era where, Remember back in 2025 when you'd be talking to someone on the phone and the call would just drop mid call? I mean, this is 2025. We're putting people on Mars, but we can't hold a phone call without it cutting out or internet skips or it buffers.
And as all of that gets better, as we move to more of a 5G network, that's an additional tailwind that helps the product. So it's kind of going to come from everywhere, I believe.
Drew: As I read into your answer there, I'm thinking of one of the original thoughts behind Evolution back in 2006 was how do we extend sort of the roulette wheel in Monte Carlo online so that people who are playing in casinos and like playing in casinos can play elsewhere too. And very much a part of that idea was building loyalty to the casino.
It sounds like though, at this time, now you're saying kind of the opposite that, if anything online and digital is going to continue to disrupt and stand in between people going to physical land based casinos, it no longer is really about driving loyalty to the brand. It's now this separate channel that is, if anything, going to become more popular over time.
Todd: This is my two cents. So, if you just have a box of slots 45 minutes from the center of town, then that business will be vulnerable to online taking business from you. But if you have, well, Las Vegas isn't going anywhere, because it's long been more than just gambling. It has long been that, and lots of local casinos are more than just gambling.
They have Jerry Seinfeld coming and doing shows. They have spectacular buffets. They are sort of the coolest buildings within a 50 mile radius. And so they're creating entertainment destinations, and then gambling is part of that entertainment. And so a player who goes to those places that are sort of inspiring venues, they will probably have their gambling appetite satisfied simply by going to their local casino.
And their local casino probably has an app. So if you wanna bet on the Super Bowl, you'll just do it through theirs because they're gonna have a good enough loyalty program that's gonna hold you. And by the way, Evolution's here to help you do that. We're happy to put cameras in front of some of your roulette tables and baccarat tables so that players can play those same tables from their phone if they'd like to, with their favorite dealers.
And all of that sort of stuff. But yeah, if you're just offering gambling in a smoky environment, then you've always been only as good as the next closest casino. So someone builds something that's 20 minutes from the house, you're in big trouble. Huge trouble. And then if someone builds something that's 10 minutes from the house, then that casino's in trouble.
Unless you come with something super inspiring to get people to drive a little further. Steve Wynn used to say, The business of a casino is you gotta get people from over there to come over here. And that's the same thing. Well, now you're competing with it being on your phone, and that's tough.
Drew: And I have to ask this question just because I got it so much, but what reasons, if any, would Todd leave Evolution and how deep is the talent bench at Evolution?
Todd: I don't know. I mean, the thing about Evolution is that--But I love the business. For me, the real value that I get from Evolution is that it's a platform for me to have our work seen. And you're impacting the industry. It's a big industry. There's no game shows before us. There's no RNG mixed with live gaming or with physical games before us.
Now, you mentioned us bringing our stuff into land based. That's awesome. I want to do that. We've announced that we're acquiring Galaxy. It's a small provider of land based games. They're licensed in all over the place. They have relationships with, I don't know, hundreds or even thousands of casinos.
And that creates a potential pipeline for us to bring our content in. It's a long, long journey. So even if someone brings a wheelbarrow full of money or whatever, offers me something that seems like it would be really fun, what's fun is launching games and seeing 20,000 players on them right now and seeing millions of players on your games is to shake the industry that when you were 10 years old, all you wanted to ever do was work in it and being at the center of it, to go somewhere else, remember also I'll have huge success risk if I went somewhere else.
Because I'm not going to have a machine shop, and I'm not going to have the standards of excellence. And we're not going to have the culture, and I'm going to go do a product review, and they're going to be like, they're going to file a complaint with HR because they're going to say all I did was criticize my work.
And I'm like, no, it's actually quite loving. And that's what you do when you care about people, and you're going to get better. But the first meeting, remember, we've been on a ten year journey with this stuff. And so there's going to be success risk. And even then we're going to, if we do manage to make some great game, I don't know that I can go back to watching hundreds of players play our games.
I'll be bored to death. Great. I can buy another car, buy fancy clothes with a fancy label. I wear an Apple watch. I'm a simple guy. So what would it take? Like there's nothing in gaming. There's absolutely nothing in gaming. But the second part of your question was about depth.
Let's just say I get hit by a bus. And now, it's just the rest of the gang. Maybe they'll be better. Who knows what kind of shadow I'm casting, with all the branches off of my tree. You got a lot of people. We're basically the same team that brought together Dreamcatcher.
Pretty much us still at the core core. And there's a lot of institutional knowledge across Evolution. And the other thing is, we have to stay humble and remember if I never show up to work again, people are still going to log in tomorrow and play Crazy Time. And that game is going to have more players in six months from now than it has today.
And no one cares about Todd. And Lightning Storm is getting its feet under it. Our biggest, most recent game launch. And it's going to do nothing but grow. And Funky Time is going to do nothing but grow. And Lightning is going to do nothing but grow. And all those tailwinds I talked about are all going to continue to occur, with or without me around.
So the USS Evolution will keep on sailing no matter what. But in terms of roadmap and stuff like that, I'm one less voice in the room. I think that I think the company does great. It would be really fun to watch. I don't want to do that. I don't want to watch. I want to watch from the inside, not the outside. But I think everything would be just fine.
Drew: As we think about this deep talent bench, how important is that to localization? And you guys have talked a little bit more about localizing some of these games. And I know for a lot of other businesses, that has kind of been a point where they kind of fail. Because they maybe know they're in their DNA, they know their own markets very well, but it's very hard to localize a game to all the idiosyncrasies of Indonesia, Thailand, all of these different countries. And so how have you guys really approached that? And how is the push to localization really gone so far?
Todd: It's kind of a funny thing. You get a lot of feedback from the outside saying, This is what this culture does. You need to infuse that into your games. And you listen, because it's some new important market or something like that. But people are wrong constantly on this subject. Including me. Evolution.
A team of me, some Latvians, some Brits, some other people, some people from other places. We're the ones doing pretty much all of the innovation in Asian gaming right now and have been for the last seven years. Basically all of the Asian innovation is happening from a building--well, a couple, a collection of buildings--one building in Latvia, one in Estonia, and so on and so forth, one in Poland.
Not a very likely place. And not a very likely group. We'll make a game that we think we've hyperlocalized. We did this with a game, I don't want to say which one, but we did this with a game where we hyperlocalized it, and where it blew up was a whole different country that we, and that's because streamers started playing it, and then the game kind of caught fire, and, And we're like, Wow, this game, which is very much designed for people in a different part of the world, blew up in another part.
Does that mean they like that theme? And you're kind of always left guessing. The kind of localization that's obvious is just putting a native speaking dealer on the table. And we run our games in, I think, 21 spoken languages. So, people like to just have a game. We run Lightning Roulette. If you look at Lightning Roulette in the lobby, you might just see, like, see the one.
But there's probably a dozen others where we're running it in all these different languages because people like to have it in their local language. So there's localization. It's a dance that we love to act more sophisticated than we are because we, even when we think we're localizing, you're localizing it.
You are, but you're doing it for the country that you didn't know you were doing it for. And so, I think it's less about localizing for countries and more about localizing for player types. And a game show player in India is about the same as a game show player in the UK.
Drew: And as we're kind of just talking about some of the differences between countries, one of the bigger differences that characterizes Asia is this kind of aggregator layer that stands in between the suppliers such as yourself and the operators. Do you understand why that developed in Asia and nowhere else?
Todd: I don't know if it's not--I don't know if it's nowhere else. But, why--I do know that it's not an only Asia thing.
Drew: But primarily Asia?
Todd: I don't know. I don't know. No. I think it's pretty big in Europe though. And if you and me want to start our own casino, DrewAndToddCasino.com, and we have our limited budget, and a really good way for us to get started is to go to a white label who can do our customer support. They'll give us a website. They've already integrated with Evolution. They've integrated with all the other suppliers. They've got 50 different suppliers. They've integrated with--they've got payment solutions, they've got support structure, and we say, Great, we secured the URL Drewandtoddcasino.com and we'll go to them and they'll say, Great, we'll take 18 percent of your GGR and then you guys, all you got to do is go get the players. Like, this is easy. This is easy. We're going to put flyers on cars. We're going to do, we've got our rogue marketing tactics. And so it's a really good way for us to get started on a shoestring budget.
And lots and lots and lots and lots and lots of casinos do it that way. And so, what happens then is this: we get bigger and bigger and bigger and then what we eventually want to do is maybe kind of go direct and live on our own because we want to do things our way. We won't have our own platforms and stuff like that.
So, I guess basically where there's a lot of small casinos, you'll probably see that model a bit more popular. That'd be my guess.
Drew: Does OSS change that equation? Cause I can imagine if I'm a small operator and I could say, Well, I'm getting all of the Evolution brands. Maybe I don't even need to bother with an aggregator and their fees that they're going to layer on. And I could just work with you guys.
Todd: That's an interesting question. I never thought about it. I don't know. I don't live that close to the operators and that close to this world, because I just kind of think about players most of the time. But it's a fair question. But I don't know. I'd be guessing.
Drew: You have a lot of hit games. Crazy Time is obviously one of your biggest hits. How do you balance refreshing the game without messing it up? So players continue to love the game, but at the same time, they don't feel like it gets stale.
Todd: Yeah, we do that through new games. We largely don't touch games once they're live. We make sure they're optimized for different devices, things like that. I have all kinds of things I would do to Crazy Time right now, and Lightning Roulette right now. We're smarter now. But you just don't mess with it.
These are businesses--they're not games. These are franchises that give birth to other games. Crazy Time has given birth to Funky Time, and Crazy Coin Flip, and Crazy Pachinko, and so on and so forth. Same thing with Lightning. Lightning is a franchise. If these were publicly traded companies, they would be the most successful companies in the world.
On margin, I mean, you run the game with a few dealers and you stream to the world and they're wildly popular. So you don't touch--we largely don't touch them once they're alive. The way we do it is we say, What what do you wish Crazy Time did that it doesn't do? What are its shortcomings?
How do we give you the next experience? If you've tired of Crazy Time, maybe you've had too many unlucky sessions. How do we provide you something that you'll enjoy? So Funky Time is a softer version of Crazy Time. It holds your hand, it's less volatile, and has longer bonuses, so it serves a purpose.
Lightning Storm, the game, the next big game show after that, kinda does the opposite. It's intentionally volatile. It'll be too volatile for some people, but it is the game of its generation. It has the most bonuses--literally every other round on the wheel is a bonus, and it has the biggest pays.
So the most bonuses with the biggest pays. Well, the dark side is it's volatile. And so it's the right--so they serve different purposes. I'll always say like, I have no interest in just moving people from one side of the lobby to the other. I want to get people that say, I don't like Crazy Time. I don't like Funky Time. I don't like Lightning Storm.
Okay, well, what will you like? And unless you're a gambler, unless you've played these games, unless you've felt the action, that subtlety will be lost. But that would be like to a non-soda drinker saying, Well, I mean, Dr. Pepper, Sprite, 7 Up, Coca Cola, Pepsi--it's all the same, right?
No, no, no, no. There's subtle differences, and people that drink Coca Cola would say, I never want to drink Pepsi, or whatever, but they might have switched from Coke to Coke Zero seven years ago and never looked back. So that's kind of some of the dance is, making it a little bit different, but similar enough, and bringing players on a journey, and not going, not jumping too far ahead. Not adding too much complexity. Because that's another trap. If you make something too complex, which all of us game developers want to do, you want, Ooh, add this, add that, add that. Then the first-time player doesn't know what they're looking at.
And you've got to develop it not just for the player that you have, but for the player that's coming in today and seeing that game for the first time. This is going to be their Crazy Time. And so you've got to stay pretty pure. And that's another thing I'm proud about at Evolution, is the things that we don't do, or the things that we take away.
If you put a feature into a game, and it's used by 58 percent of the players, give yourself a pat on the back. But if it's used by 7 percent of the players, do you remove it? What if it's used by 3 percent of the players? 13%? At some point, everything costs you. Everything you put on the game is a visual tax and it adds a degree of complexity.
You don't think of it in those terms, but it does. And so everything creates a visual tax, a visual cost, a complexity cost. The good people at Tinder had great design restraint, where they just said swipe left and swipe right and that's the whole thing. And you're not going to get a lot of information about the person you're looking at.
And that became a really big, dominant way that people wanted to engage in dating, or whatever you'd call it. Tinder, but design restraint. Anyway, I'm drifting in the question, but it's creating the next thing that will delight the player. It's not modifying the existing.
Drew: I think that was a great answer. And it also kind of loops back to what we were talking about initially, which is, How much iteration do you do versus how polished of a product do you put out first? And I think that the way you answered that also, again, shows parallels to the way Steve Jobs thought of the way they're creating products for Apple, where they were very much focused on simplicity, intuition, the first time user experience and removing things from the experience to make sure it was intuitive for someone rather than just shoving in as much features as possible.
Todd: You're right, Drew. And when you're having success, it's easy to sort of stand tall on and say, we've gotten it right. But the journey there is hard. You're constantly having partners, good partners come to you and ask for features. Oh, you should have a button for print screen so that you could do this. Or you could, you should have a button where you can upload big wins to social media right away. Oh, you should have a button that it's like, Yeah! And then you have a polluted interface. And now the first time player comes in and is like, I just wanted to play roulette. I don't need to upload it to social media.
And you lie to yourself through each of these product additions that, Oh yeah, well, sure we can get the free advertising cause people will upload it to their Instagram page and all these things. And so you say, Okay, well maybe we'll add it, but we're going to hide it behind the menu, behind something else.
Well, now nobody's going to find it. And so, it's a dance. But it's so easy to lie to yourself. And it's hard to stand tall and say, We will not be adding this feature because we don't want to pollute the interface. Or no, We won't. We get asked all the time about, Can you add a feature that just lets players push a button and it seats them at a random blackjack table?
It's faster, so it gets them into action. It might be what the players want. Maybe it's a good idea, and maybe someday we'll do it, but for now I've always had the feeling that no, it's important for the player to choose the blackjack table they want to play on. I want them to think about which seat they're going to sit in.
Maybe they like seat one. Maybe they like seat seven. And they're very different experiences. Maybe they want to sit at a full table. Maybe they want to play with a male dealer. Maybe they want to play with a female dealer. I want them to be able to look at the number of cards in the discard rack to see how deep into the shoe we are.
And above all, I want them to make the decision. Because if they run unlucky, I don't want them to have a little part of their mind thinking Evolution sat me in a seat where I lost money. And so I'm happy to slow down the experience there. And people don't talk about--everyone talks about removing friction in product, like a religion, but I'm happy to add friction--as long as it's good. So having them scroll through a lobby to make an informed decision about which blackjack table they want is an example of adding friction. Having manual shuffles adds friction, explaining the way things work in the interface adds friction, elongating games is adding friction.
I know as a good product person I'm supposed to remove friction at every turn, but it works both ways.
Drew: And I just want to point out for listeners: I just love the way you're answering all these questions because you could really see how you've stood apart as a great operator and why you are so successful building these games. You're not doing the things that necessarily people might prescribe in a playbook, but rather what really feels right to you.
And you're talking about adding, letting people make decisions, and you could explain that as, Oh, there's an endowment effect to my side bias. We know that people value things more when they're making an individual decision, but you didn't need to know that you just kind of felt that it arrived at the same answer and it was the same thing with shuffling.
There's an easier and quicker way we could do this, but that's not the point. In all of your answers, there's a million of these gems and insights where it's the ultimate reason and the purpose why we're here is not to make the game quicker and it's not even to make the most money necessarily.
It's to provide, first and foremost, the best experience for the player. And once we do that, everything else will fall in line thereafter. And I just wanted to highlight that because it's very clear the way you're answering all these questions how much you're really focusing on that actual experience and not getting lost in all of these secondary and tertiary superfluous sort of factors that I think kind of conflate a lot of other companies and we don't need to name any names, but people can get lost in that and lose their purpose.
Todd: Thank you for acknowledging that. It's something we take a lot of pride in. And you can also sort of--you're always trying to outdo yourself, and so having design restraint in a lot of areas, some is like the best innovation, and you end up with something pure and simple, and that's like the most possible innovative solution.
The first order thinking of this, even the second order thinking is like, Do this and then give them a little bit more. Back to the Nintendo Wii example. And it just gets increasingly more complex and more complex and, and because that's what you hear, you hear it from players, you hear it from your fellow colleagues and you also have vanity. I have vanity, and my co-workers--we all have vanity. And if someone says like, Oh, let me guess, you're going to do another big wheel game, right? And like, if we could try to prove to the world how smart we are by saying, No, actually, we're going to come up with a dart throwing game instead of a big wheel game.
Well, we're going to do a big wheel game, and it's going to--that's where the market is right now, but we've also acquired a company called DigiWheel, so we make our own hardware, and it has a visual display in the whole middle of the wheel with an accelerometer that holds images constant while the wheel's spinning around, and we can do a lot with that, and we can add in other elements, and you'll be delighted, don't you worry. But it's tempting to sort of prove to the world that we can break into some new area and we will, but it's a journey and it's slow and there's still plenty to do in this space. And I'm proud of the fact that we don't get too hung up on some of this stuff. We did a game called Crazy Balls, which is effectively Crazy Time with a ball machine in front of it and it gives you a new way to engage in the base game.
And a lot of people like that format. And someone--I know people will look at that and roll their eyes and be like, Really? You just put a ball machine in front of Crazy Time? Yes. Yes, because there's a lot of players that want that. You can log into the lobby right now and see thousands of people enjoying that game. So there's all kinds of traps that you can fall into in the product world. not just in our business, but in all of them.
Drew: And speaking of traps, I'm just curious, what do you fear, and what is maybe kind of talked about or a little bit in public perception that you do not fear right now that you think is a little bit too much of a narrative that is not a real fear of yours? If you could kind of get my drift for that question is going.
Todd: Maybe it's not that much that the thing I'm running from is that we make a string of bad games, we like lose a whole road map or a road map and a half or something like that. That's the fear that I think about. And we're looking at the wrong things or we get overly innovative or not innovative enough or this idea that we've been thinking about forever.
We're going to divert. It's going to be like the size of three or four games to make it. And we just want to jam it forward now because maybe we think someone else might do it before us, but we still think it's too early, so we jam it forward. Just making mistakes internally and just making bad games is the actual answer. So, actual thing that I worry about, it isn't, like if everything shifts to VR, we'll be there first still. People, even if we're late, people will wait, and once Crazy Time shows up, they'll run to it and all that sort of stuff.
Things that people might think that we worry about that we're not is: That you'll be able to have dealers that are all beautiful and handsome and they're all AI and you can talk with them and it's perfect audio and it looks everything like live casino, but it's all RNG generated and that you're going to be able to basically run the whole of Evolution with just some developers and no live dealers and no mistakes and none of that. You asked me why live dealers popular, the first thing I said was trust. So that I don't worry about. And those products have been around for a long time, pre-recorded dealers and stuff like that. I don't worry about a well funded company getting into live casino, and changing the landscape. I don't, I don't worry about other companies doing some, some great new game, even, first of all, eventually someone will, but maybe that'll help us. I like being the most innovative provider. We go to our trade shows and we show nothing but new content and, and others--others don't really show any new content.
I liked that we widened the gap to the competition. But if we wanted to run an experiment and say, Well, what would happen if others had a roadmap that was as good as Evolution's? I don't know. Maybe it would increase the adoption of live. And maybe, that would come at the expense of slots, or maybe it would come at the expense of sports, or maybe it would come at the expense of land based, or maybe it would just get more people telling their friends, Hey, you ought to try online gaming.
I'm not so sure McDonald's suffers when a Burger King and a Taco Bell go next door. I think that probably they do better. And when Mirage got built in Las Vegas, it made all the other casinos better, even though they probably worried. And then when Bellagio got built, it made all the casinos better. And so I don't worry about that sort of stuff. I worry about us making bad games.
Drew: Well, thank you for that. And just one more time to just reiterate how impressive it is the way you've answered all these questions and you've hit on a lot of the things that at Speedwell Research we kind of look for in these great operators, a focus on the customers, not the competition, creating consumer surplus, experimentation, trying new things, not afraid to fail, not afraid to admit when you're wrong. And all of these things really just kind of show how you are really focusing on the right elements. And it's really been just an honor to be able to talk with you for these last couple hours now.
Todd: Time flew. Yeah. Thanks. Your questions are spectacular. I love talking shop, particularly when you have such sophisticated questions, cause you feel like, it's--we don't put ourselves out there that much. So when you kind of peel back the layers of the onion, it's fun to talk product like this. This is a different kind of interview. I really appreciate it.
Drew: Yeah. And thank you again, Todd. And it's just one final question. The question everyone wants to know: Is the stock a buy?
Todd: Is this stock a buy? Whenever I watch YouTube stuff, everybody always says, This is not financial advice. So, yeah. Every day we wake up and we make the best new games in the world. Every day, there are new players trying online gaming for the first time. Most of the gambling happening in the world right now, the kind of gambling that we provide slots and tables, is happening in land based that will transition to online.
We have game shows. And they don't--we're launching all the new content in live. The competition is copying games from five, six, seven years ago, or just trying to build roulette or stop people from cheating and blackjack.
You asked if you come with billions, what happens? We talked about that. It's unique in that regard. If you come with billions, and you want to build the best restaurant in town, you can do it. You can absolutely do it. And there's a promiscuity to restaurant goers that they'll give you a shot and they'll come over and if you discount your menu items and you charge a little less and give a little more, you're gonna get the business.
Our business isn't like that. We have brands that are bordering on indestructible. Every day someone comes in and 20,000 people will be playing on Crazy Time and it pays out 300x on a pachinko win. That's 20,000 players for life. And that happens every day on our games. That's happening on Lightning Storm today.
That's happening on lots of games. Players are having a good run on a blackjack game and the dealer's smiling. Our moat gets a little bit wider. And this is happening all over the company in ways you can't see. So back to your question, is the stock a buy? I don't know what the market's going to do tomorrow.
More buyers are going to show up than sellers, or if they're going to understand our story, or if bond rates go up, then people maybe want to buy bonds instead of stocks, or something like that. But if you say, Is Evolution's future extremely bright? I think absolutely.
Drew: Yeah. And for compliance listening in, that was meant as a joke. This is not financial advice and Todd is not giving any sort of stock advice. But thank you again, Todd. Again, this was just an awesome interview. Really insightful. Really enjoyed having you on. And until next time!
Todd: Thank you, Drew.
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Wrap-up
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