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Monday, May 20, 2013

Has The Social Casino Market Peaked?

For the past three years we have seen significant attention paid to the social casino games market and the creation of a very large and successful business sector. However, the space now seems to be stagnating with little new game content or meaningful changes to the way the games are marketed or monetized. Late adopters are still flowing into the space seeing it as a way to potentially drive traffic to traditional land based business and as an  adjunct to existing online gambling models.  It is also clear that the social casino is going to be a  standalone mainstay for the mobile and Facebook audience for some time to come.  However, if you take a close look at the current crop of games in any of the target markets the games themselves are strikingly similar with little differentiation between them. Essentially, we are in a mature market stage where existing businesses/games that have successfully acquired players over the past three years continue to work to retain these players. These companies appear to be perfectly happy grinding it out with the same game content perhaps making minor changes to the games to slightly change the monetization of these games. More advertising and targeted advertising is also being thrown at the games.
So where do we go from here and will anyone breakout of the current doldrums to entice current social casino players to migrate to their properties or perhaps grow the number of players that will play this style of gaming?

Converging Gaming Models - Recently, we have heard a lot of hype about the possibility of meshing social casino  with other gaming business models. The most common and currently legal mash-up has been the combination of virtual worlds with  casino games. The goal is to include the gamer in a larger context exposing them to a number of social casino games and allowing the player to navigate through some kind of virtual land based casino experience. This is an interesting model, however, within this model the social casino games are no different then the ones you would see as standalone in Facebook or on mobile devices.  Essentially, the games themselves lack any innovation. 

Another hot topic is the quest to somehow merge "real" Internet gambling with social games for the purpose of increasing revenue per player. However, once again, most of the games themselves are the standard casino floor games we have seen offered online for decades. A possible innovation in this case may result in modifications to both the social and Internet games to provide  a smoother ramp into the gambling experience and a convenient backdoor migration for gambling players that need a break from the real deal. Just plopping an existing social  game into a platform that can legally take wagers is interesting. However, not very interesting if the game is yet another standard social casino game.

There is some exploration of generic freemium games being inserted into "gambling" platforms. However, it is difficult to determine if these games represent a true introduction of  social casino game  or an attempt to make an classic free to play game a mechanism to convert players to a gambling venue.

Sports Related Games - Sports related freemium/social  games have  been offered in various forms for sometime and for various reasons have been unsuccessful in capturing a broad audience. The ones that have been successful from a  traffic perspective have had a hard time monetizing social game players and the ones that have taken a traditional sports book approach have been perceived as being too complicated for the average social game player. The perplexing enigma has been the popularity of fantasy sports. This game format is successful during  times of the year when certain sports are underway. However, the profile of these players is rather narrow with males between 25 and 35 dominating the space.  The social casino audience is a broader audience with people of all ages playing these games. Pools wagering which  engage many people that are not regular sports fans has been tried as well with BetFair's investment in Watercolor.  You would think that this form a social wagering would attract a broad audience. However, this business was quickly disassembled and reorganized as Kabam as a traditional RPG centric social game experience. Kabam has been successful offering traditional RPG style games. However, these games are hard to morph into social gambling style games. This may be the reason they have not tried it.   WGT is also an interesting social sports game company that has launched a close approximation to a video game for web and Facebook access. However, they have never contemplated entering the social casino space?

In conclusion, the social casino market is maturing in terms of the availability of innovative and new social casino game content and possibly the number of players concurrently playing these games. Interesting and unique ways to monetize the current crop of games is remarkable uninteresting and essentially the brute force method of bombarding players with more encouragement to by virtual coins. This is all leading to a stagnate  experience for the consumer and in some cases can be irritating(have you played a Zynga game lately?) when they players are exposed to overly zealous demands for them to buy more coins.  Certainly, consumers of social casino game content will continue to play the existing bingo and slot content.    However,  we are seeing a tapering of growth in this sector. We may currently  be in a mature market scenario where we will see consolidation in the sector, static revenue per player  and little game innovation.

Optimistically this challenge should entice entrepreneurs to innovate and provide consumers with new alternative social casino gaming models.  Social casino game companies are not constrained by highly restrictive gambling laws that impede innovation and risk taking.  The social casino world has the ability to innovative and to take risks to determine what  new game content consumers will gravitate too. The question is when will social game developers  break-out of the current game content with new offerings that are popular with consumers of social casino game content?  Hopefully, the new content will  emerge giving this sector a second life  leading to more player adoption and revenue per player and per game.

Kevin Flood is the CEO of Gameinlane, Inc. Gameinlane works with companies in the social, Internet gambling and land based casino sectors developing game content and online gaming strategies. Kevin is a frequent speaker at social game, Internet gambling and casino events and conferences in Asia, Europe and the US. Kevin is currently working with organizations to determine their acquisition and merger strategy as it relates to the growing interdependence of the various game content and delivery platforms.



Andrew Pearlman said...

"We may currently be in a mature market scenario where we will see consolidation in the sector, static revenue per player and little game innovation."

The only reason this is happening is because most game studios are making derivative products and are afraid to take any chances. Social Casino? One hasn't even been effectively created yet. When developers take a moment to think outside the box and put out some truly innovative products, let's talk.

class jee said...

These companies appear to be perfectly happy grinding it out with the same game content perhaps making minor changes to the games to slightly change the monetization of these games. Agen Judi