social casino 2.0 (deck from casual connect amsterdam 2014)
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Social Casino 2.0 How to Survive and Grow in a Hyper-competitive Market
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RAF KEUSTERMANS
Co-Founder, CEO Plumbee
Board Director ISGA
Board Director Bonza Gaming(Interim) VP Marketing Kobojo 2011
Independent Social Gaming Consultant 2010-2011
Global Marketing Director Playfish (EA) 2009-2010
Marketing Director EMEA Pogo.com (EA) 2008-2009
Head of Marketing Western Europe Unibet.com 2005-2008
Strategic Planner at BBDO, Grey and Publicis 1998-2005
[email protected]@raf_keustermans
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The Great Social Casino Gold Rush,
2010-2013
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What happened?
• M&A deals (Playtika, DoubleDown) and stories of high LTV created a ‘gold rush’ in the social casino vertical between 2010-2013.
• Many small (casual) game studios pivoting to casino genre, usually without fully understanding specific skills required (mathematician, slots producer)
• Today: 350+ slots/bingo/poker games on Fb, 1000+ on iOS and Android... – Mostly low quality, low production value – opportunistic products from
small studios without huge cash reserves.
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• Top 10 social casino companies account for 70% of revenue.
• Large companies dominate Top 5 (Caesars, Zynga, IGT, WMS/Scientific Games)
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Source: Superdata
• CPI rates keep increasing, while ARPU/LTV is flat, resulting in longer pay back period on ad spend.
• Which results in cash drain, squeezing companies with smaller cash reserves...
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Some solutions:• Regional focus• Product• Distribution • Real-Money Gaming
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Regional Focus
• Problem: everyone, including market leaders is focused on US, Australia, key European markets.
• Solution: focus on specific, underserved markets, with local content (e.g. local card games).
• Peak Games (Turkey, MENA) and Akamon (Spanish-speaking markets, LatAm) are successful examples.
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Product Focus
• Slots, Bingo are very mature/saturated verticals with high entry cost.• Poker: Zynga Poker still doing $120M/year, despite ‘stale’ product –
opportunity for new entrants with right product.– Liquidity is key for success!
• Other casino games: table games (Black Jack, Roulette, Baccarat…) or Videopoker: – Need a strong meta-game to offset ‘shallow’ gameplay.
• Social Betting.– Hard to find the right mechanic but potential $1B+ market.
• ‘New Games’.– An opportunity for ‘real’ game devs.
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Distribution Focus
• Find a Publisher/Distribution partner.
• Brands: IP licensing can be expensive, but there are creative solutions.– Use equity, rev share, ... Instead of upfront cash payments.– Structure brand licensing deal as JV or partnership.
• B2B/partnership: opportunities to work with large companies who don’t have f2p expertise.– Land-based casinos, lottery operators... looking to enter social casino vertical.– Media companies trying to leverage their audience.
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What About Real-Money Gaming?
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Real-Money Gaming is Hard
• Regulation: licenses are expensive, time-consuming process.• Compliance, Fraud Prevention, KYC, …• Payments! • Mature industry: several multi-billion dollar companies.• $200+ CPAs – big market budgets required to get market
share.• No proven overlap between social/free-to-play and RMG
casino games – no easy way to up-sell social players.
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Five Options in RMG for game devs
Three easy options:• IP licensing: e.g. Monopoly Slots.
– No Risk, no investment.– Only relevant/possible if you already have strong, recognisable IP, characters.
• Affiliate: send traffic to RMG operator, get paid CPA/rev share for converting users– No Risk, no investment.– Low conversion rates (<1%), not a great user experience, hard to scale.
• White Label/B2B Platform: re-skin existing gambling product or use B2B platform like Betable– Low risk, low investment.– Hard to convert f2p players, most social casino companies struggled so far to make this work.
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Two harder ones:
• Joint-Venture: do a deal with existing RMG operator, leverage skill sets for both partners, e.g. Bonza Gaming, JV between Plumbee and Unibet, or the Nordeus/bwin.party JV.– Takes time, money ($500K+)– Could be great win-win deal for both parties, but execution, talent is key for success.
• Become a gambling operator– Very expensive to build competitive new RMG operator from scratch ($10M+)– Not a lot of overlap (culture, skills, business model) with game studios.
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Key learnings from Plumbee/Bonza:• Timing is key: we got to 150K DAU (mostly US, AUS) with
$300K ad spend in early 2012.• Similar growth would cost $2M+ today...
• Making quality casino games is not easy, and not cheap.• At Plumbee: 1 slot = team of 7 for 3 months, including
mathematician and experienced slots producer• RMG is hard. Me-too products are not good enough,
unless you have a strong brand and millions to spend on marketing.
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@raf_keustermanswww.plumbee.com