History of Universal Company, Ltd.

In the early 1980s, two companies dominated the gaming machine trade in Nevada: Bally Manufacturing, Inc., and International Game technology (IGT). Bally controlled virtually all of the market for spinning reel slots, while IGT dominated the smaller, fledging video side.

In 1983, a young upstart corporation from Japan, Universal Company, Ltd., owned by wealthy business Kazuo Okada and his two brothers, opened an office in Las Vegas and soon revolutionized the slot machine industry. That year one of two sales managers of Universal's new Las Vegas-based subsidiary, Universal Distributing of Nevada, Inc., presented the company with a new marketing concept: award smaller jackpots instead of a single large one. Universal became the first gaming machine maker to run slot reels with computerized "stepper motors," technology used in auto manufacturing and appliances, instead of mechanical reels. The company then perfected a way of awarding a 1,000-coin jackpot about once every 4,000 games on a slot with 32 symbols per reel. The machine, called Magnificent 7s, used computer software programmed with more than 200 ways to hit three 7s, and also produced many 100-coin payouts. At first, Las Vegas casino operators did not accept the idea of awarding more money to slot players. Casino thought people wanted frequent small winners, like every three games. Universal said it was better to have a winner every 20 games with a higher pay out.

Universal's sales and marketing approach worked. Casinos tried out and bought the new machines. By the mid 1980s, play on Universal's computerized machines surpassed the action on Bally's machines, which, like other machine companies, also began using stepper motors. At one point, Universal's slots had 16 times higher the volume of coins wagered than Bally machines. Casino found that people were not leaving. It led to more traffic. People were in fact standing in line to play Universal's machine. People began winning more than ever. They were taking money home. Las Vegas became the most competitive slot market in the Western Hemisphere. A market that was the low end, Universal took the high end.

Universal's swift success coincided with a major change in the gaming industry. In mid 1983, revenues from slot machines for the first time surpassed revenues from table games in Nevada casinos. It took only three years that about 75 percent of reel slots sold in Nevada were made by Universal in 1986.

Universal virtually transformed casino gambling in the 1980s. Its innovative computerized slot machines became the most popular among players who thought Universal's were more fun and paid out more often. The higher volume of play translated into higher casino profits. The stepper motor machine used a "random-number generator" to run the reel strips instead of the less accurate timing schemes in other slots. With the new machine, the player activated the slot, and the computer determined the outcome of the game through the random-number generator. The new motors drove the reels to specific stops during a game, and the reels only displayed the results determined by the computer program inside the machine. Back To Universal