Q&A: Phantom EFX's Thompson On Card/Casino Gaming's Big Stakes

Windows and Linux-based card and casino game company Phantom EFX first launched in 1998, and has since gone on to become the number one publisher in its field, as well as the number three publisher in terms of revenue in the family entertainment field for the first quarter of this year. A new edition of the company’s Reel Deal Slots slot machine franchise is released for download each month, though the company also commands an impressive retail presence, with president Jim Thompson estimating that Phantom EFX games appear on over the shelves of 12,000 stores in the U.S. and Canada. The company offers a simplistic free online service, but supplements this with a more community-based online model which Thompson describes as being like a “full-fledged MMO”. Additionally, the company has been hosting a meet-up in Las Vegas for the past two years, with around 150 players attending last year’s “Phanfare”. More recently, Phantom EFX announced its first move into the hardcore PC game market with Darkest of Days, a time-traveling historical war-based FPS developed by upstart 8Monkey Labs for both PC and Mac. We asked Thompson about the company, and the casino and card gaming market and how it has changed over the past nine years. When was Phantom EFX founded, and what were your goals at the time? Phantom EFX was founded in 1998 with the intentions of making a simulation casino game based on the Tycoon style games. The goals were revamped a year later to first produce quality casino genre titles before building the full simulation game. So, we set off to focus on one thing at a time - to make the best slot machine the world had ever seen on the PC, then move onto casino games and now we are even doing sports books and race tracks. After our genre games were mastered and we knew the quality was where it needed to be, we launched into full simulation mode. How big was the market for casino and card games in the late '90s, and which companies were your major competitors at the time? In terms of dollars, the retail market was slightly larger in the late ‘90s because the price points were higher - more $29.99 offerings. The market is much larger now in terms of units sold and because of the online and digital download offerings. The major competitors at the time were the Hoyle Family from Sierra Vivendi – now Encore - Avery Cordoza Family and the slot and casino games from Masque. How did you establish the company as a market leader? As we looked at the available titles, we felt there were some good games out there, but believed that there was room for a brand that offered better quality and that could offer an ultra-realistic gaming experience. Rather than just providing the player another game to play, we made the player feel as if they were actually in the casino. That is a standard that we still work with today – changing the casino and offerings to make for the most realistic casino experience possible. What is the state of the casino and card game market these days? As technology has advanced, the category is stronger than ever and the number of potential customers has exploded. With that being said, the amount of money and expertise you must have as a publisher to compete at this level is staggering. Just one slot machine takes thousands of hours to complete from beginning to end, with everyone involved from mathematicians, design, art, programming, and QA. However, a lot of new potential customers are slightly older than the typical gamer and they all grew up playing card and casino games, so playing the games on a computer is just a new way to play an old pastime. The landscape has shifted a little with the internet (the ability to digital download, online play and quick casual sessions), the poker phenomena and for the first time ever - slot products are out-selling other category offerings. Our Reel Deal Slots: Mystic Forest actually set gaming history last October, becoming the 8th best selling PC game in America for one week that month – all categories combined! That’s amazing for a slot game. How difficult was it for your company to establish a noticeable retail presence? This took a lot of patience. When we released our first title in August of 2000, we were able to solidify a shelf presence in about 1300 stores; three chain accounts. While at the time we had hoped for a lot more stores initially, looking back it was a good start – one retailer sold out opening weekend! The retail environment initially did not believe that a new offering was needed, plus we had a very limited marketing budget. Over the years we were able to use our successes to penetrate new accounts and now are on over 12,000 store shelves in the United States and Canada plus a large online retail market. How do you feel about the state of your retail presence currently, and how important is the retail presence to your overall profitability? In general we are happy and retail is a major part of our revenue. It is a very competitive environment and something that we work quite hard at in keeping up with the market trends and our competition. We have been able to hold steady as the number one publisher in our retail category and in March, our titles were the number one and three best-selling titles in the card/casino category with Reel Deal Slots: Mystic Forest and Reel Deal Casino: High Roller. We have also made great strides in the past year in the family entertainment category, finishing as the number three publisher in that category in terms of dollar volume in the first quarter of ’07. At what point did you begin your push into online gaming? Discussion began in 2003 and we released a peer to peer version of online poker in our 2004 release of Reel Deal Casino: Championship Edition. When did you begin working with the current online structure, and how effective a business model do you feel it is? We released our current structure in 2005, where you can play casually online, or subscribe to the game to make it a full-fledged MMO. A total of six titles now tie into the MMO if the player subscribes and they can all be played simultaneously – it’s incredibly fun and engaging. We’ve had this structure running for one and a half years now and are doing a lot of things to keep it growing. The business model has worked well, but because the landscape of the online models is always changing, we are continuously evaluating what model serves our community best. What percentage of your customers upgrade to the paid online service? For competitive reasons, we prefer not to give an exact number, but I can tell you that our number of paid subscribers is increasing faster than it ever has. When did you start offering a monthly slot download, and how successful has this been? We started the download program in June of 2005. It has been a tremendous success in a couple of ways. First, it provides our customers a way to add content to their games between releases – something for which they had been asking. Secondly, it has opened up new business opportunities as the individual slots attracted a lot of attention from slot machine manufacturers. By the end of 2007, there will be over 20 Phantom-designed titles on casino floors worldwide. Our machines will be coming soon to the United States through a U.S. based company, but we can’t announce which one just yet. How important is community to your business, and what are you doing online to foster this? The community is everything to us, as that is our customer base and word of mouth is still our most valuable advertising tool. We originally started with forums in 2003 to gather valuable feedback and a way for the customers to communicate with one another. Today in our online world, we use actual players as ‘Pit Bosses’ to handle in-game customer service and our development team spends a significant amount of time posting in our forums and online. ‘Shurm’s Daily Update’ is written by the CEO and is one of the most popular posts. We feel that people really gravitate towards games where they can feel a part of something and also where there voice can be heard – our community offers our players both of these things. Why are you offering offline events like the Vegas Fan Fest? How many people generally turn up? ‘Phanfare’ was actually an idea that came from the community and we said, ‘Why not?’ The first year we had 75 ‘phans’ plus 30 of our people in Las Vegas, the next year it doubled and people are already scheduling their vacations around this year’s event. Because our Phantom community is such a dedicated and passionate group of people, many of our players chat with the same people every day in the Phantom casino and were looking for a way to all meet in person. It was so cool to see how excited our players were when they finally met their virtual friend in person. It’s also fun for them because they get to meet our Pit Bosses, tech support and management – all of with whom they are familiar through the forums. Do you have any plans regarding a console push? Yes, we are finalizing the details and expect to announce something in the near future. It will be a really exciting addition and open us up to even greater popularity. Where do you see the casino and card market heading in the future? Card and casino games are a favorite American pastime. The only thing that really changes is how they are played. With the genre being as strong as ever, I believe it will keep growing and it is our job to continue to grow with it. For all future titles, we will keep our guarantee to make the players feel a part of the casino experience - with the quality they’ve come to expect and playing them on the technology they demand.