I attended the ICE conference in London after a 4 year hiatus to determine what had changed in the online gambling world since my last visit. I was especially interested in how European operators had adjusted to the social gaming and social media phenomena that has taken hold in the US. The following is my assessment of what I believe are the differences, advantages, disadvantages and similarities between the gaming/gambling approaches in the US and Europe.
Social Gaming - Social gaming has taken the US by storm with all kinds of games appearing in Facebook, IPhone apps and other social networks. These games are light weight, easy to access and usually very easy to understand. They have changed the conventional view of what a game is with new approaches to game design, mobility, availability, community integration, social media marketing and content. These games are attracting millions of players on a regular and steadily increasing basis. At the conference I saw very little activity by European game developers or operators to match the social gaming environment. For the most part European gambling/gaming developers are sticking to the classics with some experimentation in "ball" and lotto style gaming. They are starting to build games for a web and mobile audience to facilitate fast download and easy access for online players. The games have improved from a graphics perspective. However, their lack of social media/network integration and "fun" factor still does not allow them to reach the player usage levels of social gaming operators in the US.
Game Monetization - The US and China are aggressively monetizing games through the sale of virtual currency and virtual goods. The popular Zynga poker game in Facebook is generating millions of dollars a month in the sale of virtual poker chips. US online game operators are also using targeted advertising within games to monetize their high number of free players. In some cases European operators do monetize free players through advertising. However, the concept of "micro-transaction" sales of virtual currency and virtual goods was noticeably absent.
European operators continue to monetize their players through wagering, pools, bets, etc. These methods yields a much higher revenue per player then the social gaming sites. However, the number of players participating on these sites is relatively low compared to social gaming numbers. The American gaming companies have still not figured out how to take traditional gambling bets on their properties despite the fact that many of their social gaming players reside in jurisdictions where online gambling is legal.
Age/Location/Identity - Determining age, location and identity is big business in the European gaming community with well established and respected mult-national companies offering services to gambling operators. This form of player "profiling" is noticeably absent in US based "alternative method of entry" (subscription), skill gaming and free play US gaming models.
The age, location and identity vendors are still using government or credit scoring databases as their source of profiling leading to limitations in the depth, breath and refresh rate of player profiles.
To counter these deficiencies companies are looking to promote "net identities" that encourage players to establish their identities for the purpose of facilitating online commerce and for safety purposes. They were also very receptive to new profiling techniques being developed by a cadre of startups in the US. These new companies are using the myriad of social networks combined with some sophisticated information capture and reasoning techniques to develop extremely rich and up to date player profiles.
Social Media Marketing - In the US traditional forms of marketing such as e-mail and advertising are being supplemented or replaced by social media marketing. US businesses are using social network sites such as Facebook, Twitter, Linkedin, MySpace, YouTube, etc. to reach out to consumers and players. It is no longer adequate to only have a Facebook application. All of the social media tools must be used in tandem to maintain constant contact with the ever growing social media audience. New companies such as Involver.com are helping businesses and individuals pull all of these services together to provide instant and viral exposure for individuals and companies.
The European gambling companies seem a bit beguiled and frustrated by this emerging wave of marketing and support products and services. They believe their "gambling" status prohibits them from using these tools. In fact, this is not true providing they understand their place in the gaming ecosystem.
Payment Processing - ICE demonstrated that the European gaming payment processing industry is well developed. They offer a range of products and services for gaming operators and have easy and well understood interfaces into their product offerings. These businesses have matured over time adding mobile payments and pre-paid cards. This is in stark contrast to US payment processors that are confused about the position of perfectly legal online gaming models in the US.
This does open the door for European payment processors to process legal micro-transaction, skill gaming and alternative method of entry (sweepstakes) transactions for legal US gaming operators.
Gaming Law - Ironically, European gaming law is starting to look very much like US gaming law. In the US gaming law is a state's rights issue and not a federal responsibility. The Wire Act is an exception crossing state boundaries. The 2006 federal gambling legislation is in place to support states that consider " online gambling" to be illegal.
The EU appears to be moving in the same direction allowing individual countries to establish their own gambling laws.
The one subtle difference is that the EU and US federal government have different overriding philosophies regarding online gambling. The US government is generally against allowing gambling in the US. The EU overriding mandate to allow free trade amongst member countries inherently supports gambling across country borders.
The Emerging Online Gaming Ecosystem - It appears that an online gaming ecosystem is beginning to take shape. This system combines free play, micro-transactions, traditional gambling transactions, net identity, payment processing, social medial, mobile gaming and social networks in a single interdependent system. Social networks and social media are greatly responsible for breaking down international barriers, creating large numbers of online players and offering a wide array of game and marketing choices. The European, US and Asian(China and Korea) gaming related operators and vendors are all potential very big beneficiaries of this phenomena providing access to large numbers of players leveraging a variety of monetization
options.
The ICE conference demonstrated that the European gaming community has some pieces of this ecosystem figured out but does not have the complete picture or the tools in place to take full advantage of it. In their defense the US operators and vendors do not have all the answers either making collaboration between US and European gaming vendors and operators a likely future direction. It will be interesting to see how much progress has been made when I attend next years conference.
Social Gaming - Social gaming has taken the US by storm with all kinds of games appearing in Facebook, IPhone apps and other social networks. These games are light weight, easy to access and usually very easy to understand. They have changed the conventional view of what a game is with new approaches to game design, mobility, availability, community integration, social media marketing and content. These games are attracting millions of players on a regular and steadily increasing basis. At the conference I saw very little activity by European game developers or operators to match the social gaming environment. For the most part European gambling/gaming developers are sticking to the classics with some experimentation in "ball" and lotto style gaming. They are starting to build games for a web and mobile audience to facilitate fast download and easy access for online players. The games have improved from a graphics perspective. However, their lack of social media/network integration and "fun" factor still does not allow them to reach the player usage levels of social gaming operators in the US.
Game Monetization - The US and China are aggressively monetizing games through the sale of virtual currency and virtual goods. The popular Zynga poker game in Facebook is generating millions of dollars a month in the sale of virtual poker chips. US online game operators are also using targeted advertising within games to monetize their high number of free players. In some cases European operators do monetize free players through advertising. However, the concept of "micro-transaction" sales of virtual currency and virtual goods was noticeably absent.
European operators continue to monetize their players through wagering, pools, bets, etc. These methods yields a much higher revenue per player then the social gaming sites. However, the number of players participating on these sites is relatively low compared to social gaming numbers. The American gaming companies have still not figured out how to take traditional gambling bets on their properties despite the fact that many of their social gaming players reside in jurisdictions where online gambling is legal.
Age/Location/Identity - Determining age, location and identity is big business in the European gaming community with well established and respected mult-national companies offering services to gambling operators. This form of player "profiling" is noticeably absent in US based "alternative method of entry" (subscription), skill gaming and free play US gaming models.
The age, location and identity vendors are still using government or credit scoring databases as their source of profiling leading to limitations in the depth, breath and refresh rate of player profiles.
To counter these deficiencies companies are looking to promote "net identities" that encourage players to establish their identities for the purpose of facilitating online commerce and for safety purposes. They were also very receptive to new profiling techniques being developed by a cadre of startups in the US. These new companies are using the myriad of social networks combined with some sophisticated information capture and reasoning techniques to develop extremely rich and up to date player profiles.
Social Media Marketing - In the US traditional forms of marketing such as e-mail and advertising are being supplemented or replaced by social media marketing. US businesses are using social network sites such as Facebook, Twitter, Linkedin, MySpace, YouTube, etc. to reach out to consumers and players. It is no longer adequate to only have a Facebook application. All of the social media tools must be used in tandem to maintain constant contact with the ever growing social media audience. New companies such as Involver.com are helping businesses and individuals pull all of these services together to provide instant and viral exposure for individuals and companies.
The European gambling companies seem a bit beguiled and frustrated by this emerging wave of marketing and support products and services. They believe their "gambling" status prohibits them from using these tools. In fact, this is not true providing they understand their place in the gaming ecosystem.
Payment Processing - ICE demonstrated that the European gaming payment processing industry is well developed. They offer a range of products and services for gaming operators and have easy and well understood interfaces into their product offerings. These businesses have matured over time adding mobile payments and pre-paid cards. This is in stark contrast to US payment processors that are confused about the position of perfectly legal online gaming models in the US.
This does open the door for European payment processors to process legal micro-transaction, skill gaming and alternative method of entry (sweepstakes) transactions for legal US gaming operators.
Gaming Law - Ironically, European gaming law is starting to look very much like US gaming law. In the US gaming law is a state's rights issue and not a federal responsibility. The Wire Act is an exception crossing state boundaries. The 2006 federal gambling legislation is in place to support states that consider " online gambling" to be illegal.
The EU appears to be moving in the same direction allowing individual countries to establish their own gambling laws.
The one subtle difference is that the EU and US federal government have different overriding philosophies regarding online gambling. The US government is generally against allowing gambling in the US. The EU overriding mandate to allow free trade amongst member countries inherently supports gambling across country borders.
The Emerging Online Gaming Ecosystem - It appears that an online gaming ecosystem is beginning to take shape. This system combines free play, micro-transactions, traditional gambling transactions, net identity, payment processing, social medial, mobile gaming and social networks in a single interdependent system. Social networks and social media are greatly responsible for breaking down international barriers, creating large numbers of online players and offering a wide array of game and marketing choices. The European, US and Asian(China and Korea) gaming related operators and vendors are all potential very big beneficiaries of this phenomena providing access to large numbers of players leveraging a variety of monetization
options.
The ICE conference demonstrated that the European gaming community has some pieces of this ecosystem figured out but does not have the complete picture or the tools in place to take full advantage of it. In their defense the US operators and vendors do not have all the answers either making collaboration between US and European gaming vendors and operators a likely future direction. It will be interesting to see how much progress has been made when I attend next years conference.
1 comment:
Great review of ICE/IGE 2010 - you must have spoken to a lot of people or spent 3 solid days there, or indeed both. It was certainly far busier than the last 2 years which gives us hope that there is renewed enthusiasm for pushing on with new innovation, thoughts and investment.
Gavin Chase
'The Betting Headhunter'
+44 (0)121 702 1481
gavin.chase@thebettingheadhunter.com
www.thebettingheadhunter.com
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