Why Branded Slots Often Have Lower RTPs

Return to player (RTP) refers to the percentage of wagers a slot machine pays back to players over time. A slot with an RTP of 96%, for example, will pay back $0.96 for every $1.00 wagered, on average.

Branded slots based on movies, TV shows, musicians or celebrities tend to have lower RTPs than other slots. There are a few reasons for this:

High Licensing Fees Reduce Profits

To use branding and intellectual property from a movie studio, record label or celebrity, online casinos, including Robocat Casino, pay hefty licensing fees. These fees can reach millions of dollars upfront, plus a percentage of revenue generated by the slot.

With such high fixed costs, online casinos need to generate strong profits from branded slots to justify the expense. Lowering the RTP is an easy way to improve the profit margin.

Think of RTP as the cost of goods sold for a slot machine. Just like any business looks to control COGS, casinos want to reduce RTP to protect their bottom line.

Players Attracted to Branding Over RTP

Casinos bank on players getting drawn in by familiar branding rather than carefully checking the RTP. Big entertainment brands have devoted fan bases willing to play just because it features their favorite movie, band, etc.

Studios only allow their branding on slots with worldwide appeal. These global entertainment brands have incredible reach and drive higher traffic to casinos. Operators decide the extra visitors outweigh the costs of lower RTP slots.

Not All Branded Slots Have Low RTPs

While short-term profits motivate lowering RTPs on branded games, it’s not always the case. Some branded slots still offer 96% or higher RTPs.

Pop Culture Phenomenons

For entertainment properties that become hugely popular worldwide, their negotiating power increases substantially. Studios can demand fairer revenue sharing and player-friendly RTPs in exchange for the branded slot rights.

Games based on mega franchises like Game of Thrones, Star Wars and DC Comics often have competitive 96% RTP rates. Their universal popularity means they’ll generate profits even at higher payout rates.

Musicians

Recording artists with massive global fanbases can also negotiate slot deals with fair RTPs. Games like Guns N’ Roses, Jimi Hendrix and Motörhead slots have kept their RTPs at 96% and above.

Their widespread popularity reduces the risks of high licensing costs for online casinos. Even with RTPs near 96%, these musician-themed games earn substantial profits.

Spotting Lower RTP Branded Slots

While not always the case, checking the RTP should be part of your due diligence when selecting any new slot game. Branded slots based on movie flops, minor celebrities or aging bands are more likely to offer lower RTPs.

Here are some other signs a branded slot may have a reduced RTP compared to other games:

• Unknown Studio – Big studios can demand fair RTPs. Smaller entertainment brands have less negotiating power.
• Cluster Pays – These slots often have below 95% RTP rates, even without branding.
• Megaways – The expanding reels feature inherently has lower payout rates.
• New Release – Studios allow lower RTPs early to profit off hype. It may increase later.

While branded slots can seem more entertaining because of familiar intellectual property, you shouldn’t ignore the RTP rate. Check it first before playing any new slot game to ensure fair potential payouts.

Offering Better RTPs Over Time

Launching with a reduced RTP to quickly profit is common. But over a branded slot’s lifetime, some casinos gradually improve RTPs after the hype wears off.

Once licensing fees are covered, they can afford to be more generous. It also helps player retention after the initial rush.

Analytics Tracking

Detailed analytics provide insight into how much revenue slots generate as they age. Online casinos monitor performance to see when raising RTPs might spur higher wagers.

Player Demand

If enough players notice and complain about low RTP rates, it builds motivation to increase them. Keeping users happy with better potential payouts has long-term value.

Window Shopping

Some casinos adopt a “loss leader” approach. They offer exclusive branded slots with higher RTPs to attract players from competitors. Even taking a loss upfront, capturing more customers can pay off over time.

So while launching with reduced RTPs, branded slots may get more generous rates to promote loyalty and draw players from rivals later on.

Monitoring older branded slots for RTP changes provides opportunities once payout percentages improve.

Summary

Branded slots allow playing exciting games featuring your favorite entertainment brands. But due to high licensing costs, their RTP rates tend to be lower at launch for quick profits.

Checking for fair RTPs still applies to branded slots. Avoid potential losses by verifying rates first, especially on games with less popular intellectual property.

While you may get drawn in by familiar branding, pay attention to the RTP first. Over time, some branded slots increase rates – so keep an eye out for improved payout percentages too!