An IGN Q & A: Tony McAuslan (Part 1)

14 February 2000
Next Generation Gaming, Australia's newest online casino game designer, appears to have all the necessary ingredients for success in the gaming software business. The company has equipped itself with the right personnel--including a pair of longtime game development execs and a staff of elite programmers--and has implemented a new approach toward designing Internet casino games that perhaps signifies the arrival of the "next generation" of online gaming. Cofounder Tony McAauslan recently shared the company's game plan as well their new philosophies with Interactive Gaming News.

IGN: Next Generation is obviously taking an entirely new approach toward gaming software development. Can you explain to our readers what you guys are doing and how its different from what everyone else is doing?

Tony McAuslan: Just to give you a bit of background, I've been a senior marketing executive for two of the biggest land-based gaming companies in the world--Aristocrat and IGT--and in between those two I had an Internet company. It had nothing to do with gaming, but I had a good understanding of the Internet. So, in my last position, where I was on the board at IGT in Australia as their marketing director, I had a lot of companies suddenly coming to us and saying: "We've spent millions of dollars on infrastructure, we've got computer equipment, we've spend money on licensing and going through probity, but the only thing we seem to have forgotten is content. Now, can you guys give us a couple of games?"

And of course, because of the licensing situation in Nevada, IGT had to say, "No, we can't give you games," and also because our games there were developed on a different, proprietary platform. So it wasn't easy to migrate them across.

So, we saw this as an opportunity. We put a plan to IGT to set up a separate game development company, but they weren't interested because they didn't want to jeopardize their license. So, myself and Mario Castellari, the director of game design at IGT, went out and formed Next Generation Gaming. We went to America to speak to some of the big film studios there because we saw an opportunity to take a lot of the IP they had developed in films and turn them into games. And while we were there in Hollywood, we secured backing from a very large venture capital fund who specialize in entertainment and media. They've taken a half share in the company.

And what we do is, we have an independent game design studio here in Australia. We have about 22 staff now, including game designers, graphic artists, static artists, video artists… all kinds of people like that. Essentially, what we do is develop games for the Internet that will run on various backend systems, rather than being tied to any one. So, we're the only independently aligned game design studio designing games specifically for the Internet anywhere in the world at the moment.

IGN: So you will be licensing your software to online casinos with backend systems already in place and your games would simply supplement that system along with games already residing there, correct?

TM: Yes, what there finding is that, in our discussions with a lot of these backend developers is that they all say, "Look, our background is developing databases and networking and developing a backend system. But, we're not a game designer. We've got a few games that run, but our specialty is really the back end. What we're looking for is expertise at the front end."

And what's happened? I believe the Australian player profile will mirror what happens on the Internet in that, in Las Vegas at the moment, people save up all year, they go to Las Vegas, they'll play on any kind of machine that's there for two weeks. They do their money; they go away happy. In Australia, we've had licensed slot machines since 1956. We have 185,000 slot machines; it's about the second biggest market in the world after Vegas. And our players play every day, every week, every month of every year. They're playing regularly, rather than the Las Vegas players, so to keep them interested, we've had to develop much more sophisticated games here. Australia's had video gaming for a long time; it's very hard to find a mechanical slot anywhere in Australia. Everything's video. So consequently, we've developed a much higher level of game designer here. Even American's acknowledge that Australia's probably got the best game designers in the world.

So, I believe that when players go onto the Internet, they'll mirror that Australian style of player in that they'll be playing regularly, they'll be easily bored, they'll be able to switch between sites... and they way to keep them interested is going to be having a very high level of content. If you have a look at the games that are currently on most of the Caribbean sites, they're very basic three-reel slot games, they usually are in a very small format--they're not a full screen format--and I believe that once players become sophisticated, they'll find these games won't keep their attention. They'll be looking for something that's more exciting. That's why we set up our company. And we've got some of the best game designers in the world--that we've taken from Aristocrat and IGT and other companies--working here for us now.

IGN: And who are you looking at right now in terms of clientele regionally? Is the entire world your market?

TM: The way we've approached it is that: Australian state governments have been probably the first anywhere in the world to embrace the Internet and start legalizing online gambling. And the reason Australia, I think, is going to be strong is that we have a very high record of probity. The Australian gaming industry is very similar to those in Nevada and New Jersey. In fact, they all work together. So, people who are getting licenses in Australia are having to undergo probity. They're having to spend millions of dollars, and consequently, they have a very high standard, which means people are going to be guaranteed of getting paid, etc.

So, our first level of client is really anyone operating in a legal, licensed jurisdiction rather than in the gray area in the Caribbean. As much as we'd like access those 600 other sites, our philosophy is to stick with the guys who are licensed. There are about six here in Australia, there are about three or four we're talking to in Europe and a couple coming out of South Africa now. We believe once that online gambling becomes legal in America, anyone who's dealt in the Caribbean will probably find it very hard to pass probity they'll need to operate in America. We're taking a longer-term approach rather than going for a quick profit.

Even the ones we've got here are some significant players. Pent House have announced that they're going to have a licensed casino. We've already done sort of a handshake deal. We'll be the independent game supplier to people like penthouse.

IGN: That brings us to another question I was going to ask. Next Generation has announced that it has a number of deals in the works. Can you disclose who some of these entities are at this point?

TM: We're in midst of doing deals with most of the people we're talking with at the moment. But, we'll be going out in press probably in the next two or three weeks.

IGN: Now, Penthouse is using GET Systems' software. GET systems makes the backend, but they make games as well. So, how do you go about integrating your games into their system?

TM: They make games, but they only have a limited library of games at the moment. So we're developing a game interface kit where we can develop games on our platform and load them up into a Get system, or an Access system.

IGN: And how do you work out the licensing arrangement?

TM: Essentially, we license the games to the site operator for a nominal fee and then we usually share in the net turnover.

IGN: Is developing an interface between your games and another companies backend system a complicated procedure?

TM: Not really. All our guys have gone through a pretty intensive training system with the Access system, and we're actually working with Access to help develop some more features into their game development kit. We've got some very good mathematicians working for us. So that's kind of well in hand, and we've already been producing games under their system. And we're doing the same with GET. It's not very complicated because both of those systems have been designed pretty well to integrate games.

IGN: With Next Generation concentrating on front-end development, creating software that's strides ahead of the rest and setting an example for a new way to do things, do you foresee other gaming software developers giving up creating the games and letting companies like yours handle the front-ends? In other words, will software developers become more specialized?

TM: I think so. I think that content is a very special art, especially in games. Our experience has been that a lot of these guys with sites have gone to multimedia houses with their first purchases. They developers at the multimedia house say, "We can do you a game. We can make nice pictures and we can make the reels spin." But what they're finding is that that's not really a game. To design a game you need the mathematics, you need the psychology of gaming, you need to understand all the elements that go into making a game. So, they've all tried with multimedia houses to various degrees of success. Then they've all come back to us and said, "What we really require is your game design skills." We're finding that that's what's really setting us apart from everybody else--having those land-based game design skills that we've now translated over onto the Internet.

I think that you're going to see more and more of the guys working on the backend saying, "Look, it's too hard to get into the content business. We're going to stick to the backend and just keep making it more efficient," because it's going to be a huge industry in itself--all the treasury functions, the tax requirements, the auditing trails. As that industry grows, it's going to be a bigger and bigger business. And I don't think you can do both well. I think you're either in content or your in infrastructure.

Click here for Part 2.

Mark Balestra

Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.