Posts Categorized: Social and Mobile Casinos

The Challenges in Turning Freemium Casino Players into Online Gamblers

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Social and Mobile Casino Games Laptop - KontagentDavid Gutierrez will be a speaker at Kontagent Konnect 2013 in San Francisco on May 20-21. Register now–space is limited.

There’s no doubt that there will be a lot of profit to be made in online real-money casino gambling. It’s a $30 billion industry set to grow to $40 billion by 2015. While this is definitely nothing to sneeze at, the problem for most online casinos is that the cost of acquiring new players is very high, at about $200 per customer.

On the other hand, social and mobile freemium casino players are much less expensive to acquire, taking only about $1 or $2 to hook new players. Of course, the caveat is that since real money isn’t wagered in freemium casino games, these players also generate less revenue for the industry ($1.6 billion in 2012). In general, their lifetime value ranges from $10 to $78 per customer compared to about $1,600 for the average online casino gambler.

From a business perspective, the obvious solution then would be to try and convert freemium players into real-money gamblers. This would allow online casinos to reduce acquisition expenses, while boosting revenue. And that’s exactly what some pioneers have been trying to do.

The problem is that it hasn’t been working very well, and it probably won’t—with good reason. Continue Reading…

Taking the Madness Out of March

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NCAA March MadnessMarch 2013 marks the 75th anniversary of the NCAA March Madness. It also signals the start of countless office guessing games, online pools, and a nationwide fan-fueled frenzy for all the latest tips and tools to build the best brackets.

Generally, people tend to base their picks on a wide array of (unreliable) variables, such as fan favorites, ill-informed “tips,” and other junk science (i.e. “always pick at least one team with a blue uniform to make it to the Final Four” or “Diaper dandies are beatable”). Building a bracket is easy, but creating a good one takes data science.

Let’s look at the stats. There are 147,573,952,589,676,412,928 different ways to fill out a bracket. That’s 68 possible teams, 64 that end up playing with 63 teams each with a possibility of losing once—or 2 to the 67th power.

That’s quite a small chance for building the perfect bracket. According to Jeff Bergen, a professor of mathematics at DePaul University, if you know a little bit about basketball you can improve your odds to roughly one out of 128 billion. While this may still seem pretty bad, there are a number of data scientists looking at ways to help you craft a winning bracket. Continue Reading…

It Isn’t Always About Making Money in Mobile

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In mobile, the definition of customer value isn’t always about revenue.

Money doesn’t always mean success in the mobile world.

But it’s definitely nice and it’s certainly a goal for every developer and enterprise. However, the way mobile companies measure success is dictated by their own specific definition of customer value. And for many, revenue is not always the biggest target.

This isn’t a mindset that’s just limited to startups either. From humble application developers and dot-coms to veteran technology players, revenue doesn’t always reign supreme. And nowhere is this fact of business more true than in the mobile industry.

If you’ve ventured into app land, you know that defining customer value early on is important. You also know that KPIs like user retention, loyalty and acquisition can be just as vital to your company’s health as profits. Furthermore, establishing the right KPIs to pursue early on can save you opportunity costs associated with development, marketing and every other expense tied to your mobile product or service.

But perhaps most important of all is that these other metrics for success allow you to devise mobile strategies that will help your company stand out in a crowded market and secure its future.

So what are these other customer value definitions and how can you leverage them into viable business plans to expand your industry profile and transform your organization into dominant mobile leader? There is a solution to the madness. Continue Reading…

App Developer Guide: How to Beat Those Who Can Outspend You

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Blitzoo Games is a 26-person Vancouver-based studio that creates original games for Facebook and mobile platforms (iPhone and Android), including SlotSpot Casino, one of the premier social casinos on Facebook.

We spoke with Blitzoo Games CEO Dave Bezahler on how his team is using data to optimize the monetization of their games; this allows them to compete with those who have deeper pockets. While Dave is speaking specifically about social casino games, many of these principles can be applied to non-gaming apps, too.

In the fast-changing world of games, and particularly social casino games, you launched SlotSpot within six weeks. How were you able to do that successfully?
We were able to do this by developing and maintaining a single-minded focus on Minimum Viable Product (MVP). We threw out all the assumptions around what features a Facebook game had to have to succeed, and focused on answering the two most important (and basic) questions: first, will people actually enjoy our game? Secondly, do we have a viable monetization model?

When we launched, we had no “friends bar,” no ability to invite friends, no leaderboard, no gifts, no quests, no achievements, etc. We launched with three slot machines. We had Levels and XP, but nothing was locked so it didn’t matter. Then each week we added new features based on data about how people were actually playing, as well as feedback from the community about what features were most important to them.

Give us an example of how data has helped you win and keep high-value players.
There are two types of players we consider especially valuable:

  • Those who spend money
  • Those who invite friends, actively post, serve as evangelists, etc. Continue Reading…

Who’s Gaining Market Share in the App Economy?

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We’re all dying to know what the next big market is going to be. In the social apps and games world, one can easily dive into AppData to try to pull out games that are increasing their respective monthly active users (MAU), or even just browse through VentureBeat and read up on the trend. But these sources only act as a proxy to what we really want to know, which is where money is being spent.

Here at Kontagent we have an inside look at who’s growing the fastest in revenue, and the results of asking the data itself to tell us where the market is going were somewhat surprising.

There’s been a lot of discussion around the sudden emergence of casino-style social games lately. I was particularly interested to see how much market share they were gaining. Consider the following trend:

The distribution of genres among apps identified as having fast growth in revenue in the 3-6 months leading up to October 2011 and June 2012, respectively. Click to enlarge

Continue Reading…

Winning the Social Gambling War

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by kScope guest contributor
Tyler York, Marketing and Customer Development, Betable

It’s becoming clear that casino games are the next big social game genre.

Take a look at the image above, provided by Kontagent. Casino games are surpassing farm games as the darlings of social networks: The growth of monthly active users (MAUs) for farm games is slowing, while that of social casino games is generating higher revenues–seven times, to be precise–than the casual games category.

Furthermore, with downward pressure on Facebook’s stock from its falling revenues, it’s become increasingly likely that it will soon allow real-money gambling on its platform. Couple that with evidence that legislation may open up parts of the U.S. market to online gambling, and you have a perfect storm forming that game developers would be foolish to ignore. Continue Reading…

Finding the “Whales” of Your Game

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Let’s say you’re developing a game and you want to see who your most profitable players are. Imagine you’ve got a power-law so heavy-tailed you don’t even have a mean. You want to estimate your shape parameter and your statistics are all over the place as expected (no pun intended). Looks like you’re going to have to chop off that long tail and treat it separately. Looks like you’re going whale hunting.

In the casino industry, so-called “high-rollers” are often referred to as whales. It’s easy to see why: while they might come in with an attitude of being able to beat the house by wagering enough money, ultimately they wind up providing the biggest payouts to the casino. A somewhat disparaging term, to be sure, but it’s easy to understand how casinos view their revenue stream: lots of small change with the occasional big kill. Continue Reading…

Casino Games are the New Battlefield. Choose Your Weapon

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Ready the troops
Even though online casino games have been around for a while, the social and mobile versions of these games have just started gaining traction recently; now, these social and mobile developers are fighting even harder to dominate these spaces and to cash in on the high-value players in the casino gaming genre.

Why? Because to further complicate things, there’s also a new competitor on the battlefield: traditional, land-based casinos.

Guys like Caesars Entertainment and MGM Resorts International have years of experience on slot machines, poker, blackjack, bingo and other games. And, they’re forming alliances with or acquiring game studios to get into the social and mobile spaces.

There’s a lot at stake–from creating new acquisition channels (via social and mobile games) to monetizing players to extending the experience of real-life casinos to the online world. There are only so many whales, and it’s a fight to get their mind and wallet share. Continue Reading…

The Colliding Worlds of Real and Virtual Casinos

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Click here to view our popular webinar, A Look at Building Irresistible Casino Social Games.

by kScope guest contributor
Andrew Hughes, CEO of AbZorba Games

My father once said to me, “Son, everything in life is a gamble. Just know the odds.”

Now that I’m an adult and working in the online casino games business, his words of wisdom are helping guide me (and those like me) through a fast-changing industry.

Gamers’ growing appetite for social and mobile casino app games
Social and mobile casino games are trending, and will continue to do so. Games such as blackjack, poker and bingo, to name a few, have become outrageously popular.

The mobile format in particular offers the “perfect storm” of smartphone penetration, network reliability and app popularity. Throw in live multiplayers, like we did with AbZorba’s Live Blackjack21, and it’s seriously a compelling format.

Its proper, grown-up gaming with proper in-app spending power. Average revenue per user (ARPU) can get in the double digits, and the lifespans are incredibly long! We’ve seen players spend up to $3,000 for virtual chips—chips that they cannot cash out!

Online gambling is a multibillion-dollar market, but what are the risks?
So, why should a perfectly good social or mobile casino game that is generating good revenue from virtual goods take risks by venturing into “real” gambling, as in gambling with real payouts? Continue Reading…

Up the Ante: Stay Ahead in Social and Mobile Casino Games

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“More social and mobile game developers [will] try to cash in on the slots and bingo craze and more land-based casino brands [will] look at social and mobile acquisitions and licenses.”
-Inside Social Games, March 2012

A new breed of gambler is emerging
The 20- and 30-somethings who grew up with Facebook and Twitter are social. They shop online. They use their mobile phones to “check in.” They share their lives with their friends worldwide, in real time. And, now, they expect their gambling experience to follow suit.

For social casino game developers, this trend represents enormous opportunity. Some of these new gamblers are whales, but most are minnows. Who’s going to catch the whales? The hunt is on. Continue Reading…