“These positions might appear to be contrasting, but in fact they complement each other,” says Michael Bauer of his two roles at Greentube. As chief financial officer of Novomatic’s digital gaming and entertainment arm since 2015, Bauer oversees all finance matters from accounting to M&A.
In 2017, he took on a second C-level role as chief games officer, where he steers the strategic direction of the games portfolio, including production, sales and operations.
The two positions tend to sit separately in Greentube’s peers. But there’s a strategic thread connecting the pair, Bauer says.
“While my career background is in finance, I have focused on strategic rather than day-to-day aspects of operations,” he explains. “This means I have typically been dealing with M&A activity, or entering new markets, from a financial perspective.
“These skills and experiences complement the requirements of the CGO role.”
Since 2017, the supplier has been expanding into different markets around the world. “Whenever this process takes place, there is always a lot of structural groundwork in terms of finding out the size and potential of the market, the operator landscape and obtaining licences,” he adds.
For each market, Bauer must devise a business plan, assess the competitive landscape and set targets for revenue and client wins.
The product side of his role requires that same level of data-driven expertise. “I have always been very interested in looking at each game and analysing its performance,” he says. “Certain game types work better in some markets than others and it’s a very numbers-driven process.
“We can very quickly see which mechanics players in particular markets enjoy by learning to read the statistics and this is where my expertise comes in.”
Innovate or die
In 2022, Gil Rotem of IGT told iGB that “content is king” when it comes to games development today, but “data is the queen”. Bauer adopts that same perspective: closely studying and interpreting data helps slot providers design games for different player cohorts.
But it’s not a case of only playing the hits. Greentube dedicates a percentage of its new game and platform development budgets to innovation. The new concepts it brings to market “can flop completely”, he admits. Or they can offer an excellent player experience that disrupts the market and draws in consumers.
There is joy to be found in simple titles and Bauer is fond of the slots in Las Vegas’ downtown casinos. “I find it interesting how much entertainment you can have with just a few reels and a few paylines,” he says. “These games can still be every bit as exciting as a video slot. While they don’t have slick animations, what they do have is that repeat play appeal because the mechanic is really strong.”
Equally, he’s also impressed by video slots such as Light & Wonder’s Rich Little Piggies Meal Ticket or Invaders from Planet Moolah also impress him.
And looking at competitors’ successful games and copying them can be a safe bet, provided they’re supported by proven mechanics which appeal to players across multiple markets. It could even generate decent revenue. “But at the same time, you will never have a hit game,” Bauer warns.
Greentube isn’t interested in playing it safe, he continues. Instead, it wants to define how the market develops. “This means investing in innovation and new games and new mechanics. This approach must be balanced and only encompass a certain percentage of new releases, otherwise the financial risk becomes too high.”
So how does Bauer inspire his team to build market-defining content?
Building a cooperative working culture at Greentube
Bauer’s career spans multiple industries. He started out at one of the Big Four audit firms working on consulting across multiple sectors before moving into the construction industry. A short period working for the German Stock Exchange was followed by a brief stint in the automotive industry – “although ironically, this was less fast-moving” – before he moved into gaming.
His career has taught him the importance of working hard. Gaming is a results-driven business after all. Equally, though, he wants people to enjoy their work.
“We make sure that we strive to meet objectives that have been set and if we don’t manage this, then we need to make sure we come up with a plan to rectify the situation,” he says. “We always want to grow and collective hard work enables us to make sure we are performing better than the competition.
“This is a key element because if you just sit down and do nothing and rely on past successes, your rivals will take over.”
But having a fun job is just as important as work-life balance, he argues. A boring or unsatisfying role can weigh on someone’s mind and, in turn, eat into free time.
Does he feel he’s achieved a successful balance? “I have three kids and they all want a piece of me, so of course, I try to be there for my family and limit work-related travel to what is strictly necessary,” he says.
“Let’s say I’m not travelling just for fun. It is still a lot of work and probably doesn’t leave quite as much time as it might for family and bedtime, but at least at the moment the balance is a good one.”
Balancing the best and the worst of game development
While Bauer sees his roles as fun and fulfilling, he’s equally aware that he has a responsibility to the player as well as the balance sheet. Gambling can be perceived as predatory, he says.
Greentube is a slot developer, so he works one step removed from the end consumer. But he’s aware Greentube sits within a much larger business in Novomatic. As such, Bauer sees the effort taken to set out clear and strict rules for responsible gaming, affordability and marketing promotions.
“Over the years, we have built up not only a big team but also efficient processes,” he explains. “We ensure we are not targeting players who might have a gambling problem, or players who cannot afford to play. We do go that extra mile so that problem gambling is kept to a minimum.”
The industry has come a long way since the dot.com days. Affordability checks and new ways of detecting problematic behaviours put operators and suppliers “light years” ahead of what came previously.
Greentube’s global expansion drive
The shrinking of dot.com gambling also opens up significant new opportunities for suppliers such as Greentube. North America, since the repeal of PASPA in 2018, is now a key strategic market for suppliers.
Canada is also becoming a key battleground. Ontario launched the country’s only open, competitive market on 4 April 2022. Greentube is already live in the province with a range of partners, with Entain the first client to go live.
Through partnerships with British Columbia Lottery Corporation and Loto-Québec Greentube is expanding its reach. Bauer is confident of its future prospects. “The key to success in this region is local content, local networks and local relationship building,” he says.
South of the border, where only six states enjoy legal igaming (with Rhode Island set to follow), Bauer preaches patience. Processes take much longer in the US, he stresses, from licensing through to signing contracts with clients.
“When things take longer, of course it means you need more money in the interim period,” he adds. “The upside in the US is the scale of the opportunity that makes getting through the pain points worthwhile.
“The potential within the country is also amplified by public opinion on gambling, which is very different compared to in Europe. Over there, it is seen as entertainment first and foremost.”
Looking ahead: Disruption, consolidation and surprises
If the US opportunity requires some patience, how does Bauer see the wider market developing? He admits it’s difficult to predict its future, as technological advancements can prompt a sudden change in direction.
What could be even more disruptive is new competition. “Imagine the impact if companies like Microsoft, Google and Amazon decided to enter this space,” he says.
These mega brands could move into gaming through building an entirely new product offering, or snapping up some of the market leaders. Even if they continue sitting on the sidelines, in Bauer’s opinion consolidation is unlikely to stop. The biggest industry brands will continue to get bigger through M&A activity.
This won’t simply leave fewer players on the field, however. “Whenever this happens, people will start to leave such companies, creating spinoffs and new challenges and ventures, be it as a game supplier or other operation,” he says.
“If they successfully create a USP, then they will again be successful. There will always be a certain level of competition, even if consolidation is ongoing. From a supplier perspective, this puts pressure on margins and the challenge is to counter this through innovation.”
But there could be another sudden development, in Europe, the US or Latin America where Brazil’s betting and igaming regulation will shift the industry’s focus. Or even new markets or regions opening up – after all, few in the industry expected the United Arab Emirates to become a regulated proposition.
In his position, straddling Greentube’s finances and games strategy, Bauer is ready for the upheaval.
“New market dynamics are forming all the time,” he adds. “It’s up to suppliers like Greentube to meet the challenges presented.”
Original article: https://igamingbusiness.com/casino-games/slots/greentube-michael-bauer/
