26
// Public Gaming International // March/April 2015
Product Development
vs
.
Operational Execution
—Which Way to Growth?
The recent collapse of the Monopoly Millionaires
Club game has caused great soul-searching in the lot-
tery industry, as lottery executives sift through the
implications of game design, ancillary products and
marketing, industry collaboration and ultimately, the
lack of consumer acceptance. Lottery professionals
have been searching for the “next best thing” in lot-
tery play for several years, looking for a unique con-
cept in a game design that would drive the next cycle
of lottery revenue growth.
We’ve heard all the business jargon clichés: “content
is king;” “think outside the box;” “be more like Apple
or Google or Amazon;” “embrace change;” and “re-
invent our product line.” We’ve become so obsessed
with not becoming “our father’s Oldsmobile” that we
have misinterpreted market research and have failed
to focus on the totality of our customers’ experience.
First, a little background: when the industry came
together a few years ago to cross-sell Powerball and
Mega Millions, it was actually the first phase of a
three-phase strategy for future growth. The second
phase was to take one or both of the games to a $2
price point, which was also successfully implemented
a couple years ago when Powerball became a $2 game.
These first two phases of the strategy, laid out years
before, produced a very nice run of revenue growth
in the big jackpot games for a lottery industry still
recovering from the 2008 economic crisis.
Phase three of that original strategy would prove
to be much tougher; the development of another na-
tional game, hopefully at a $5 price point. (One of
the driving concepts was to create revenue growth in
the draw game category by pushing the price point of
games, much like the success seen in the instant game
category for many years.) An intensive game develop-
ment effort was launched, initially led by Margaret
Defrancisco, and a wide cross section of the industry,
including lottery directors, the vendor community,
market researchers and outside consultants, conduct-
ed countless meetings, focus groups, research studies,
brainstorming sessions and concept testing. After al-
most two years of this intense effort, no compelling
product idea had emerged. Frustration ensued; where
was our breakthrough game concept?
This moment was probably the first significant
misreading of our consumer. After all the work that
had been put in, perhaps what we should have real-
ized was that there simply was no breakthrough $5
game opportunity. Maybe the research was telling us
our strategy was flawed. But instead, we decided we
needed a different game development process. So a
decision was made to conduct a competition among
the vendor community, select the most promising
game and launch with tremendous national support
and marketing. Unfortunately, much to our chagrin,
that effort failed as well.
However, at the same time as the industry was feel-
ing frustrated over the lack of a definitive game con-
cept coming out of the national game development
effort, six states in New England quietly launched a
regional game called Lucky for Life, similar to instant
games that offered top prizes that paid out over a win-
ner’s lifetime. Maybe this was the model for future
national game development. Rather than the top-
down, all-in, herd-the-cats, simultaneous big launch,
perhaps we should allow for a more organic approach
to product development, seeing which ideas captured
the imagination of our players, with what was essen-
tially market research via a real-world, small-scale test.
Two other examples come to mind. A few years
back, the New York Lottery created and launched an
instant ticket called New York Lottery Black, which
was intentionally designed as a real-world market test,
on the theory that a lottery that launches 40 or 50
B
y
G
ordon
M
edenica
,
F
ormer
D
irector
of
the
N
ew
Y
ork
L
ottery
and
F
ormer
P
resident
of
the
N
orth
A
merican
A
ssociation
of
S
tate
and
P
rovincial
L
otteries
(NASPL)
