Booming social gaming market prepares for next generation

Booming social gaming market prepares for next generation

Friday, October 28, 2016 Posted by Andy McCarron
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Lloyd Melnick, director of social gaming at PokerStars, emphasised that ‘social gaming is not necessarily marketing to millennials, and marketing to millennials is not solved by social gaming’.

Speaking at the EiG Expo in Berlin, Melnick acknowledged that social gaming is a key part of the gaming industry aligning itself to the highly social world we operate in, but said that real money companies rushing into the social place must keep strategies and tactics between the two areas distinct, or at least carefully monitored, to avoid issues with a mixed user base.

Moderating the session, director at H2 Gambling Capital David Henwood highlighted the International Social Games Association (ISGA) definition for social gaming, as a ‘recreational activity, characterised by organised play, competition, two or more players versus the house or a device'.

The global market for social gaming has a total value of €7.4 billion, and accounts for 17% of all online activity, which is forecasted to rise to 23% over the next five years. A big part of this growth will be focused on the millennial customer, which Henwood described as the next generation coming through, and a generation that is ‘highly tech savvy and highly familiar with social media’.

Aman Kumra, industry manager of social gaming at Google, works with casino, bingo, poker and social gaming clients to help them get the most out of the web and Google products. He highlighted the level of globalisation as the biggest stand-out this year, with social gaming in countries such as Australia and Canada, Italy and Germany doubling in growth, and resulting in America’s market share being reduced to 55% from 76% early in Q1.

The size of this market, and the money involved, was emphasised by the Caesars sale of Playtika. The company was acquired in the US for between $80 and $90 million in 2011, and sold in August this year to Shanghai Giant Network Technology Co. for $4.4 billion.

Aman also spoke about the acquisition costs being ten-fold lower for social gaming, with the concept still in a relative infancy compared with real money gaming. However, as the industry matures, player quality will become increasingly important because competition will increase acquisition cost. This competition will also force social gaming companies to learn from real money counterparts in terms of branding, and building a brand to be competitive in the long term.

Totally Gaming says: Lots of the things being used in social gaming do apply more to millennials, a generation that is key to penetrating the market, but just creating a social game comes with no guarantee that you will appeal to a millennial. The key is getting the technology right, packaging and delivering the product in the best way, and utilising marketing techniques to develop a brand.

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