November 26th, 2012
Via Kevin’s Corner, some commentary on the social casino/poker space:
We see and hear about all kinds of social gaming/casino conferences and meet-ups. Acquisition of social and freemium gaming properties are being scooped-up for millions of dollars. Alliances are being formed between conventional online gambling businesses and Facebook social game developers and operators. There are claims that companies are committing 10 to 20 million dollar marketing spend to attract social gamers. We also hear about declining revenue per social gaming player in Facebook and increasing cost of acquiring these players. Attention has now been placed on mobile as a way to attract and monetize social gamers outside of Facebook. However, mobile has no underlying social mechanics to assist in acquiring players for free and it it can be a challenge to get through the Google and Apple Application certification process if there is a hint of real gambling to a game. Also, there are dominant social game publishers on Android and in on iOS that are making it difficult for new entries in the market segment to get noticed.
With all of this attention and competition in the social /casino gaming marketplace is it too late to get into social gaming and be successful at it?
Facebook Social Casino Environment – Certainly the glory days are over for the Facebook platform as it relates to low cost of acquisition, retention of players, social K factor and healthy monetization per player. The social casino games and publishers that have successfully acquired players over the past two years are dominant in this space making it hard for new comers to break in. A publisher can certainly get the volume of play. However, revenue per player is dropping because the wallet size in the social casino space is one of the limiting factors in a social game environment. The overall population of social gamers is clearly being aggressively pursued by many game publishers.
However, new companies recently entering the social gaming space have been less then creative in their casino game offerings. In many cases the games and game design are me too offerings with little difference between the offerings of various publishers. Also, chip or token reward systems do not differ very much between publishers giving the players little reason to jump ship for another me too slot or bingo game offering or to spend money on more then a few different social gambling games.
Consequently, there is room in the social casino space for something that offers differentiation from the other social gambling games. Ironically, the social game publisher/developers may have to learn from the land based casino slot machine companies to determine how to add features and functions to slots that cause a newly introduced game to become popular in a crowded marketplace. Monetization in a social gaming world is another story. Social game publishers will have to device more clever ways to entice social gamers to pay for the social game experience. There is a secret sauce to monetizing in the social space that few new comers understand.
Mobile Social Casino Environment - Many social casino publishers have decided not to publish in Facebook. Instead they have gone right to mobile. Over the past two years they have experienced good growth and low cost of acquisition relative to the Facebook environment. That is beginning to change with this space also getting crowded. However, the adoption rate for people generally accessing content from their mobile devices continues to grow. This is helping to extent the opportunity horizon for social casino offerings within mobile even if there is not much differentiation between games. However, it is unclear how long this will last without significant investment in marketing to outpace existing mobile social casino offerings.
Social Poker – Poker is a much more difficult space to break into because it is naturally a social game leading to large communities forming quickly blocking out most late adopters to this category. Facebook as everyone knows, is primarily owned by Zynga poker with a few distant but successful publishers and operators still actively courting Facebook poker players. It is hard to unseat Zynga because of the nature of poker and Zynga’s long history in Facebook.
Mobile appears to have a few high profile poker sites already. However, it is unclear as to the extend of consolidation in mobile poker give the organic growth rate of mobile gamers. Social mobile poker could be a real opportunity for a couple of high profile mobile social providers. Also, the ability to combine social poker players on Facebook and on mobile devices is intriguing and perhaps the ultimate holy grail for the social gaming sector. If a publisher/operator can pull this off it would create a truly massive community of poker players.
Social Bingo – Much like poker bingo was originally devised as a social game played in community settings with players aware of the other player’s progress and winning. The social games in Facebook and mobile try to mimic this a bit by providing awareness of a players progress through a leader boards, notifications, etc. However, this really falls short of what bingo is all about. Bingo should be played as a community game with everyone in the community aware of the size of the community playing and the activity occurring in the bingo “hall”. The game should have start and end times for games and the size of the community of players should indicate the amount of possible winnings. I have not seen this to date and therefore assume it is not being done or it is not being promoted in a way that is resulting in the creation of large pools of Bingo players. I am not clear as to why such an obvious approach is not being taken. However, it will take some community building features to get Bingo to a level that it deserves. This is also a good way to leap frog the current crop of allegedly social bingo properties.
Essentially, the same old social casino slot game is not going to cut it in Facebook. You may get visitors to these properties but not much game play and sub par monetization. Mobile social may be different given the organic growth of mobile game play adopters . However, in both cases more thought has to be given to the design of slot games in these environments if a publishers want to be successful. Poker is owned by Zynga in Facebook however, mobile could still be an opportunity. Bingo is still the sleeper game in Facebook and mobile. Someone will figure that out. The mass adoption of social/freemium virtual currency gaming/gambling does make it very difficult for new entries in this space.
Also, traditional Internet gambling companies will really struggle in this market because they are not accustomed to the rapid development and iteration cycles required to launch and react to the social freemium marketplace and there is no regulatory protection stifling competition and innovation in the social gaming world. These companies should look to buy a social gaming company and not interfere with their development and launch processes after they are purchased.
The social gaming/gambling space is a busy place and in many cases over hyped and filled with me too game content. If someone wants to be successful they have to look ahead and not in the rear view mirror. Creativity and experimentation is absolutely necessary. An iteration mentality will have to be a big part of any organization’s culture getting involved in the social casino space. Be prepared for failure and have a process for reacting to early disappointments and perhaps success. This is a perpetual sprint to the elusive finish line.
This entry was posted on Monday, November 26th, 2012 at 4:18 pm and is filed under Blog. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
