Casinos contemplate social gaming future

Does social gaming be capable of positively transform the land-based casino gaming experience? Kevin Vonasek, chief product officer for NYX Gaming Corp., a provider of online gaming solutions, certainly believes it can, and recently witnessed a small-scale example of it doing so.

Early this year, Vonasek began hearing good stuff about MyVEGAS, a free-play social casino app developed by PLAYSTUDIOS, then hosted by MGM Resorts International, that gives players an opportunity to amass “loyalty currency” and earn valuable, real-world rewards from Las Vegas-based attractions and entertainment properties. Curious, he asked an organization receptionist to join, play and report to him at the experience. Two days later, this person approached him requesting a while off—apparently, she had won enough for a mid-week stay for 2 at Circus Circus Las Vegas and very desired to take them up at the offer.

“If [MGM Resorts] had just sent her a text message, e-mail or printed junk mail piece, I’m sure she wouldn't have responded,” Vonsek said. “But because she played the MyVEGAS games and felt like she earned the prize, she asked for 2 days off, bought a $300 plane ticket, flew to Las Vegas, and stayed at Circus Circus and had a good time. MGM Resorts evidently has had 80,000 people come through its properties to redeem various MyVEGAS offerings.”

“That is what social gaming and social casinos are all about—extending a property’s brand beyond the walls of the casino, and giving someone an absolutely different form of gaming experience,” Vonasek added.

NUMBERS GAME

Vonasek relayed the anecdote during a session on social gaming strategies that came about earlier this year on the Southern Gaming Summit conference and trade exhibition in Biloxi, Miss. The subject and timing of the session was apropos, given the extent of interest both social games and social casinos have garnered from the brick-and-mortar casino community. Indeed, given recent usage and revenue figures from both kinds of “free” play, it’s easy to know the excitement.

As a whole, the international social games market is anticipated to have a combined annual growth rate of 16 percent, and become a $17.4 billion market by 2019, in keeping with a report from Transparency Market Research. The outlook for the social casino games subset is equally rosy. Consistent with SuperData Research, there have been 205 million active social casino players in 2013, a bunch that may be expected to grow to 269 million by 2016. All told, the worldwide social casino market generated $2.35 billion in revenue for 2013, a 47 percent increase over the $1.6 billion it generated in 2012. It’s estimated that the social casino games market could hit $4.4 billion by 2015.

“Many consider social gaming to be the most recent and strongest prospect for the way forward for the gaming industry,” said Craig Border, vp of database marketing for Marketing Results Inc. “There are a variety of numbers to support this position, the prospective is huge.”

The size and potentially lucrative nature of this social casino market segment is definitely not lost at the terrestrial casino marketplace. Some large casino operators have already taken steps to become major players on this space, comparable to Caesars Interactive Entertainment, which has bought social game developers comparable to Playtika and Buffalo Studios. Casino game providers have also gotten in at the act. Slot machine giant International Game Technology entered the social casino market in 2012 with the acquisition of DoubleDown Casino; and Bally Technologies just this last summer with its acquisition of Dragonplay. Indeed, for slot providers in general, a stake within the social casino realm pays out in two ways—by developing games on the market as apps to mobile and Internet users, and by selling social casino games and systems to land-based operators for white-label applications on their websites.

STRATEGIC OPTIONS

And for probably the most part, that is how most brick-and-mortar gaming operations have handled the free-play phenomenon, by offering third-party social casino games to customers on their websites. Many operators view such systems as a hedge to the eventuality of for-pay online gaming, a technique that also has applies today.

“Ultimately, the casino is establishing an internet relationship, a mobile relationship with the buyer in order that they begin to interact with the valuables that way,” Vonasek said. “So if iGaming does happen, whether it is legalized within a casino’s jurisdiction, the valuables has already built up that online database and relationship with the client where they're willing to engage with the power outside of its walls.”

However, the promise of immediate revenue from online gaming for casinos inside the U.s. has declined somewhat of late, due partially to delayed legalization processes in lots of jurisdictions and the fewer than stellar performance of Internet wagering in states where it's allowed. Meanwhile, thanks largely to the growing acclaim for smartphones and tablets, mobile-device friendly social game use continues to skyrocket, which might result in business opportunities for operators with social casino systems in place. 

“Social gaming is a rapidly growing industry, without a doubt about it,” said Bob Hays vice chairman and head of North America for Williams Interactive. “If persons are not to your casino, we all know they're spending the vast majority of their time on mobile devices. After they are playing on their mobile devices, they're downloading apps, they don't seem to be browsing. For plenty of of the gamers, specifically casino slot players, the apps they're downloading are casino slot games.”

Indeed, in line with a contemporary active gambler report from Williams Interactive, 75 percent of land-based casino patrons actively play social games, up from 54 percent in 2010. The report also found that after it came to active social casino players visiting land-based gaming facilities, 33 percent had done so previously week, 45 percent within the last 90 days and 82 percent inside the last year.

“Your players which might be on your land-based operation are certainly spending time with social casino content and people who are available in the market spending time with social casino content are visiting your casinos very often,” Hays said.

The report also showed that social games have a broad demographic appeal and that almost 70 percent of social casino players are under the age of 50, and 50 percent are now 40 years of age or younger. These players access the social casino in multiple sessions each week, with each session lasting a regular of 20 minutes.

“As I DO KNOW from my land-based experience, operators are very focused at the moment on finding how one can bring more of this age group into the casino and feature them join the logo community,” Hays said. “If the player is new, you have got a chance to obtain them during the social games. If the individual is already a player within the property’s database, and in the event that they visit the social casino four times a week, that may be 80 minutes of engagement in a low-cost, mobile model with the goal of enticing them to visit the land-based casino.”

Tonya Roedell, director of digital and systems professional services for Aristocrat Technologies, has seen similar numbers and usage for the company’s nLive virtual casino solution. Aristocrat has found that there's a 57 percent higher casino visitation rate from customers who first play at a property’s social casino, and that these players provide 38 percent to 40 percent more ROI for the operator. “So not just are social casino players visiting a property’s online space and land-based casino, but also they are increasing their spend on the property whenever they become active within the online space,” she said.

These statistics, combined with the expansion of DoubleDown, Zynga and other gaming companies with strong social casino products, may entice brick-and-mortar operators to develop their very own social casino concepts and enter the distance as a for-pay social game competitor. Any such strategy could also be easier said than done, especially for smaller brick-and-mortar operators, warns Vonasek.

“The selection of social casino players who actually pay real money for site currency and other extras is within the low single-digits, 5 percent tops,” Vonasek said. “And it’s already an overly well-serviced industry competing for the players actually willing to open their wallets. You'll attempt to make millions from direct social casino gaming as everyone hoped when the technology first developed, but remember to invest properly because you’ll wish to compete against the DoubleDowns and Zyngas of the world.”

Instead, Vonasek recommends that regional land-based casino operators use social games and free-play casinos as a marketing tool. “A social casino is nothing as opposed to an extension of a property’s marketing campaign,” he said. “Operators can use social gaming to drive new players right into a players’ club and the brick-and-mortar casino experience. Additionally they provide a chance to engage with a customer every day, to get entangled with their lives beyond standard marketing practices. It’s an absolutely different roughly relationship.”

OBSTACLE COURSE

Operators seeking to create marketing-oriented social games and social casino sites face challenges besides. To start, the social game or social casino offering must be greater than only a few games hosted on a property’s homepage. Content is king relating to social gaming and key to making return traffic.

“Casino operators want to extend the land-based brand to the net space beyond just the website.” Hays said. “They need some form of compelling content or experience that may be going to drive the player to the logo around that online presence.”

MGM Resorts and MyVEGAS shows that such concepts do exist, it only a matter of finding and fine-tuning them.

Other items brick-and-mortar operators wish to take into accout when developing social casino concepts include:

• Targeting the best customer. Social casino patrons can also be loosely grouped into two categories, “gamers” and “gamblers.” Social casino gamers play primarily for entertainment value and are the purchasers possibly to transform into paying social casino customers. Brick-and-mortar operators trying to find new customers or boost return visitation are targeting social casino gamblers, customers who genuinely enjoy slot machine or table game play and are perhaps to transform to paying land-based customers. To draw social casino gamblers, operators wish to develop content that keeps existing casino game math models and minimizes friction points that block player access to favorite content.

• Offering enticing rewards. Social casino gamblers seek real-world prizes and standing versus advancements in game play often sought by social gamers. Social gamblers don’t mind coming to land-based operations to redeem these rewards.

• Integration with existing land-based customer management systems. Social casino sites aimed toward attracting social gamblers with the goal of increased brick-and–mortar attendance and play should be sure that their offerings synch with a property’s and loyalty club systems.

• Staff with marketing personnel. Sites geared toward growing revenue from social gamers often employ virtual economists, psychologists, monetization experts and other professionals. For sites trying to develop more brick-and-mortar trade from social casino gamblers, staffing with existing iGaming or land-based marketing experts makes more sense.

• Make sure the offering can function across all communications platforms.The social game or casino experience must function across all channels of communication with the customer, especially mobile.

“Mobile is the preferred entertainment device for social gamblers,” Vonasek said. “They have these devices of their hands on a daily basis in their lives. That is where the brick-and-mortar casino operator must be.”

Read More... [Source: Gaming Industry News]