Stop trying to convert a social gamer into a real money gambler, its not going to happen. There, I said it. At least that’s my opinion.
To be fair, there is a little bit of wiggle room here, for example, some say until the US online gambling market is fully “liberated”, people may dabble in social gaming to quench their gambling thirst. But lets be real- Americans can gamble online with sites regulated outside the US right now if they wish. A hard core American online gambler is not going to bother with social, but who knows, maybe the more recreational player will.
It is true big gambling companies such as IGT have acquired social gaming companies such as DoubleDown, but believe me, its not because the gambling companies wants to convert the social gamers to real money gamblers- its simply another revenue stream for the gambling companies. Not to mention it’s a natural fit for land based gambling companies to acquire social as they are both wired for entertainment, much more so than online gambling companies are.
Before going into last week’s Social Gambling Conference my opinions on the above had already been formed and were reinforced at the event. I also learned that it’s not so much about crossover of player pools, but more about what the social gaming and real money gambling industries can learn from each other. For more on this and a few other what I hope are useful tidbits, here are my main Social Gambling Conference takeaways from last week.
Socialize gambling style games so they appeal to the social gamer
“Gamifying” casino games is where a lot of the innovation and investment is happening right now and its for good reason- gambling style games produce the most amount of revenue and social gaming companies want a piece of the pie.
I had a chat with Michael Caselli about gambling style games vs. other social games and he pointed out that gambling style games have been developed over hundreds of years and have stood the test of time. This means the social gamer will know what to expect when they download a gambling style game vs. not knowing what to expect when the download a new type of social game. Knowing what you want and knowing what you will get is probably a reason why these gambling style games are driving revenue.
Socialize a real money experience for the real money player
Social retention hooks or “social rewards” are a great way to increase player loyalty.
Probability has recently launched its new “Daily Bonus Bonanza” promotion allowing players to win a variety of prizes by logging into their account and through random selection. This bonus strategy has been highly successful in the world of free virtual currency, so why not give it a whirl in real money gambling.
Another lesson learned from social is that people are much more responsive to personal recommendations than a promotion, so encouraging players to share their positive experiences through social media is a good marketing strategy.
People are also every receptive to corporate recognition for things such as big wins and birthdays, so interacting with customers on a personal level could lead to a small army of authentic (and free!) brand ambassadors.
LatAm & Asia (Brazil & China) are where it’s at
Despite popular belief, Latin America and Asia, especially Brazil and China, are the geographical regions with the real growth and opportunity in social gaming, not the US. The fierce competition and abundance of large companies with big budgets are driving up the CPA and CPIs in the US, therefore the growth opportunity for smaller companies and start ups are much greater in the more virgin and developing markets such as Latin America, Asia and even Africa.
2014 to be the year of social betting
When I think of social gaming I think of people playing Candy Crush, I don’t think of people betting on sports. However, fantasy football and peer-to-peer betting is all about social and mobile, so it really is a natural fit.
There are several start up companies that spoke during the Social Gambling Conference, all with a focus on social betting, all who have been preparing for the last few years and all in agreement that 2014 will be the year of social betting. And lets hope it is for their sake.
Lack of regulation->More innovation
We’ve heard it before and we heard it again at the Social Gambling Conference- too much regulation stifles innovation.
Its true that there is a lack of strict regulation throughout the social gaming industry and its also true that innovation is more likely to come from startups, something that the social gaming industry has plenty of. Real money gaming companies have a lot to learn about entertainment and they should start by looking at what the innovative social gaming world is doing.
Social Gaming and Virtual Currency
The online gambling industry’s interest in Bitcoin (and vice versa) has already been piqued, but it seems to me that the social gaming world is even a better fit for Bitcoin and virtual currencies in general.
First of all, the lack of regulation in the social gaming industry makes it possible for social gaming companies to adopt Bitcoin as a payment solution without having to beg permission from authorities. Second of all, social gamers are likely to spend in small bursts and will not appreciate a hefty transaction fee each time they spend. It just so happens that unlike more traditional payment solutions, the fees associated with Bitcoin and other virtual currencies are close to zero, making them an ideal fit for the social gamer who would like to make small and frequent purchases along the way.
