QTech’s CCO Daniel Long looks at what the future holds for the company, and the industry, as operators evolve to try and satisfy ever-changing needs, combined with the rapid evolution in technology. While still leveraging their live dealer and slot products, Long looks towards crash games and eSports as future revenue drivers for the industry.
We’re joined today by Daniel Long from QTech. There’s a lot to unpack here today, we’re going to try and get into as many areas as we want, we always want to. But I want to start off with QTech itself. So looking at basically your main divisions that you have within the company, what do you see as being the most progressive at this point right now?
Hey, Kelsey, thank you for the interview today. And thank you for taking the time. Well, we look at different segments of our product category, I think the most progressive, and the highest growth has got to be in the general category of instant win games, this crash games, arcade style games company, we see great interest for this games in emerging markets in Africa and Latin America. So that is our fastest growing segment right now.
Within Asia, are those games having the same impact that you’re expecting that they would have. Once they’re released, obviously, there’s that little trial period, but within Asia are the crash games working up to the same standards as within the other markets?
Yes, surprisingly. So we’re not in the same sort of demographic as a lot of the other Asian aggregators. A lot of the Asian aggregators right now, still, traditionally, China, or East Asia focused, and Southeast Asia. And those are traditionally still live dealer and slot markets.
We are a force of reckoning in South Asia: in India, Bangladesh, Sri Lanka, Pakistan. And these markets, and Central Asia as well, love crash games. I think it’s a different sort of idea, because it’s not so much a game of luck, but sort of a game of skill for them. And they feel that because it’s a game of skill, the payout is far more fair. And that’s why there’s a great takeup of such sort of games.
Why have you focused specifically on those markets?
There’s a need. And where there’s a need, resource and energy goes to it. And and it’s good because QTech has always been one of the first movers in these markets. Bar none, we are the first major aggregator to enter the Indian subcontinent. And we are, I think, still the current market leader for the Indian subcontinent.
Obviously, there’s been a move to try and attract these younger players, how is that happening within online gaming? And how do you get these legally allowed players to come into your gaming sphere?
Back to my very first point, I think we’ve actually pivoted towards the crash games, the arcade style games, the game of skills, instant win games. Those games we feel, and we’ve seen, attract the younger demographics. I think live dealer and slots still has its marketplace. But, this new variety of arcade style games, instant win games, and crash games are really what attracts the new younger players.
Tto a certain degree, eSports as well. But we feel that eSports has to a few more years ago, before it reaches its potential. Right now, there’s a lot of hype around eSports. However, we don’t see it actually being translated to real dollars, not anywhere near the level of sports betting. However, that will change with more structured and organized tournaments. But more importantly, the trading of eSports matches has to be there to make sure that the odds on swing involve favors on either side.
So the operators right now are a bit concerned about eSports, because there is a high variable in there, the odds are not very steady right now, not very stable. But as the market gets larger, and as there’s more players, we’ll see that maybe eSports will be the next thing. It’s not going to replace sports anytime soon, in the next two decades. But it might grow to a comparable level. So with the arcade style games, crash games, and eSports, those are the things that we feel are what the next generation of punters will be looking for in the next one or two decades.
So how are these companies actually making money off eSports?
Oh they are making money. There is gameplay.
We do carry eSports providers on our platform. There is gameplay, there is wagering. And it’s not any different from sports betting. So there’s a trading desk involved to make sure there’s no collusion, there’s no fraud, that the right games are being played, etc. So there is actually no real difference from eSports and sports.
It’s just that we’ll be able to have collective eyeballs on that game. So an eSports tournament, unfortunately, doesn’t have enough visibility as compared to a EPL (English Premier League) match. But that will change as demographics age upwards and the younger adults now go into the prime earning years, and the younger adults now who are familiar with eSports tournaments, continue to watch Esports tournament and bet on those tournaments in their prime working years. I don’t think it’s a bad idea to be in eSports now, because that will be the future. But right now, at this particular point, they’re nowhere near the sports betting market.
So I mean, what is the most valuable demographic right now, at this point?
People my age. Between the 40s to 60s, that’s where they have the highest discretionary disposable income.
And what are they playing?
Live dealer and slots. So, if we’re talking about what is important right now, what’s the biggest category for QTech, it’s definitely slot games. Where will we be in 10 years time? I think will be crash games, arcade style games and maybe eSports.
How does AI factor into what you guys are trying to do? Obviously, you guys have implemented AI in different areas of your company? What are the main ones where it’s where it’s functioning best? And where do you hope to have it now be implemented?
So the AI portion where the players can see immediately is QTech’s game lobby. A large percentage of our operators actually use QTech game lobby to be the end lobby. So we have a predictive algorithm in the game lobby, so very similar to Netflix. If you and I both open a an account with a operator that has QTech lobby, and we continue playing for a few weeks, very soon, how our lobby layout is will be completely different.
The algorithm recommends based on your gameplay, the type of games, the category of games, the game providers. And so AI has helped us.
I mean, years ago, this was completely impossible and everybody had the same cookie stamp game lobby, no matter the place. Now, every game lobby is bespoke based on the player login, based on what the player has played in the past, we recommend games in the future.
And the AI also comes with a level of personalization. They know you’re bet setting, they know your risk appetite, they know your birthday, they know when to give you the bonus. So AI has actually taken away a lot of the need for customer service to interact.
Then the other thing is, we do predictive searches, we do predictive analytics in in our game, both for the players on the game lobby, as well as for the operators in the back office. So if the operator sees a certain type of games, for example the bonus buy in sort of features, and they do very well, we can actually recommend them a list of games that has this feature that might be plugged into their lobby. So it works both ways, both for the players, but for the operators. And this is the way to go. I think the traditional way of doing it manually is passed.
Do you envision that there’s going to be more of a shift? And also you guys as more of an aggregator, do you need to control whether they can use AI or not?
Yes, and no. We try not to. So what we do right now is we ask for an option: your base game and your game modified with predictive algorithm or all the bells and whistles of personalization. Because as an aggregator, we got to be all things to everyone. There will be operators who embrace this openly, and more traditional operators will say ‘no’. And as an aggregator, we will go to the provider and say: ‘Can you give us both versions, the one with and without?’ So we have to be all things to everyone. We give the operator a selection of: ‘Do you want the traditional style base game or the base game with a modified predictive AI?’
Let me delve real quick into just a bit more of the new tech parts, because you mentioned that. We’ve got AR, we’ve got VR, how much are these realistically on the horizon? How much can operators actually use them? And do you think that QTech will be venturing into anything which is going to be AR or VR based?
I think even further back behind eSports right now.
Alea used to have a VR casino, which then they shut down because, let’s be honest, if it’s a slot machine game, in a physical casino it’s still 2D, it’s still a screen.
The same thing.
Yes. So you just have a big monitor at home, it’s the same thing. Maybe the VR experience will be very different if you have a 3D live dealer environment where you can look around look at the dealer, look at other players. However, those will only be gimmicks; they might bring players in but they will not retain the players. So until the goggle is lighter and more convenient to wear, it will not be a main attraction for online gambling, for the time being. So I would place that after eSports have matured.
So I would put five to 10 years for eSports and right after that VR and AR gaming.
I think that we have to dive into more of this next time. So, let’s get back to it. Thank you again, Daniel Long from QTech.
Thank you so much, thanks for your time.