Jonas Ödman: Balkanization Not Consolidation?

Jonas Odman
February 16, 2011
11 Comments

Jonas Ödman / BodogNetworkPlayer liquidity and consolidation have been two key words in the online poker industry for a number of years now. Player liquidity has been the ultimate goal and driving force for many companies, and it has been repeated so many times that is has become a “truth” nobody challenges. Another similar buzz word is consolidation. For how many years have we heard that consolidation of the online gaming industry is around the corner? In a way the two are related—consolidation is a very effective way to create big player liquidity quickly.

I think the industry is now heading in the opposite direction. We will have balkanization instead of consolidation, and player liquidity will no longer be viewed as the key to success.

The PWin merger is, of course, big news in the industry but I do not see that as the start of a consolidation phase. As Steven Stradbrooke pointed out in his analysis of the merger, there are a number of question marks around how successful this merger will be and the driving forces behind it. More recently, the stock market has given its verdict.

Striving for player liquidity has been a way of catering for the winning players. Remember, that before Bodog opened up the debate about depositing players versus winning ones, these winning players were considered “high rakers” and everyone was competing for them. It feels like a long time ago now but it was actually less than two years ago. Having a large pool of net depositing players was a way of competing for these winning players, but the user experience of the net depositing players was not seen as important.

As a natural consequence of the focus on player liquidity everyone has expected the online poker industry to enter a consolidation phase. However, Patrik Selin challenged the consolidation issue more than a year ago and did Kim Lund, an e-gaming analyst, wrote a series of articles on liquidity in October 2010.

Sure, to run a successful poker room you need a critical mass to keep the games going, but after you have achieved that level of players, liquidity is not key anymore. The battlefield of the future in my view is entertainment and since different players have different ideas of what is entertainment is we will for the first time in the short history of online poker start to see differentiation in poker rooms.

Some players may find it important to be able to chat in their own language, others may want a user experience close to what you can get playing a video game. Some players may find tournaments with huge fields more entertaining than small fields. For those players, player liquidity will continue to be an important entertainment factor, but for the majority of players, liquidity has a small part to play of the total entertainment package.

Jonas Ödman
Vice President, Bodog Network

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  • http://CalvinAyre.com Calvin Ayre

    Just read this:

    http://www.billrini.com/2011/0…/

    I love the spirited analysis, and love Bill's blog, but I usually disagree with 90% of his conclusions. If you cut his entire blog to its core, he is saying the future will look exactly like the past. When has that ever happened?

    Bottom line, is Jonas is actually doing what he is writing, Bill is just analyzing things from the distance as he does not run a poker room. I think there have been enough small wins in Bodog Poker since Patrik and Jonas took over, with many more coming, that there is actually empirical evidence of them being right and Bill is completely ignoring this.

    As always….history will write the last word on this so we don't have to wait long to see where this is going, but I can tell you that even Pokerstars is moving in the direction that Patrik and Jonas are advocating…nuff said.

    • Jamie Nevin

      When has the future looked like the past? See history.

      Liquidity never stops being important. MTT’s are the bread and butter of poker, big prize pools are what attract the fish – not the number of cash games or random promotions that an operator runs. Stars is evidence of this. 

      Nobody can run an MTT schedule that can compete with Stars. Every other network competes on some other level; Lower rake, better graphics, more deposit & withdrawal options, bigger promotions, faster customer service, but nobody else can compete. Is this not evidence that liquidity is indeed king?

      Not any of this other stuff.And yes, of course consolidation is coming. Look at the barriers to entry that regulation is already responsible for. I read a lot of this guys stuff, but honestly don’t get any of it.

      • Jonas Ödman

        Jamie,
        thanks for writing.

        Pokerstars
        is the most successful poker company and has been since Party Poker pulled out
        of the US after UIGEA. Before that Party Poker was number one and before that
        Paradise Poker was number one. Having the biggest player liquidity is a
        result/proof of success but it is not what is causing success. Pokerstars is a
        very well run company who has done a number of things right: they have the best
        software in the industry and their marketing is very successful. But the fact
        that they now can offer $1m tournaments when others only can offer $100k
        tournaments is not what is driving their success.

        I suggest
        that you read Kim Lund’s excellent article on this subject:

        http://www.infiniteedgegaming.com/business-development/liquidity-is-overrated-part-one/

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