Social casino market turns its first chapter

When “social” became a key industry buzzword, social and mobile casino markets flooded with titles from established and new developers. After exploding into the gaming industry, operators are now seeing a market downturn, with the number of monthly players shrinking by 22pc since last year.

According to market analysis firm SuperData Research, the social casino market declined to 85 million players from 109 million during the year. Market acceleration has slowed as the sector shows its first signs of maturity and moves into its next stage of growth. Fewer developers and operators are now able to compete with players already established in the innovative sector.

Initial market growth, augmented by advancements in social networking and mobile technologies, couldn’t sustain indefinitely. A mere three years ago, Zynga dominated the space with a few casino titles. Then came IGT’s $500m acquisition of DoubleDown in January 2012, which turned industry heads and led to a wealth of companies trying to get in on the action. A flurry of social casinos, virtual worlds, as well as new divisions and companies have since appeared.

A new spring of innovation continues to flow into the gaming industry, with companies focusing on convergence between platforms and a new breed of player. Casinos have new abilities to expand marketing reach, as well as deliver games directly on social networks. Players can practice a game before heading to an online, mobile or land-based casino; engage in new social content that combines gaming and gambling in exciting ways, and share results with peers.

With so many new offerings, players tried their hand at various social casinos and games. Social gamers experienced casino games for the first time; gamblers experienced social for the first time; casual players starting becoming more loyal, and as time went by, more willing to purchase virtual currency. Casino themes continue to outshine the social market in terms of in-game revenue spend.

Operators quickly adapted to shifting market trends, refocusing from acquisition to sustaining existing customer relationships. New loyalty and reward programs are being introduced, more updates released for proven titles, and new partnerships are forming to further enhance player experience. And these incentives seem to be working. Despite fewer players, SuperData Research recorded a record month in April, with revenues topping $175m in the US alone.

“Publishers in this category face an important transitional moment,” commented SuperData Research CEO Joost van Dreunen. “The current market landscape forces publishers to consider a strategy centred on player retention. No longer is it enough to merely acquire new users. For one, because it is becoming increasingly expensive.”

Companies are adopting the model used by Zynga, which has enabled its games to remain at the top of the pack for so long. Developing real casino experiences rather than acquisition-orientated experiences has been a key to its success. Zynga Poker has been the world’s largest online poker room since the dawn of social gaming and according to online sources, has been played by about 350 million, on either Facebook, mySpace, Google+ Tagged, Android or iOS devices.

“We looked into the psychology of casinos,” explained Nick Giovanello, the creative director for Poker Mobile at Zynga, who led last year’s revamp of Zynga Poker. “Poker is a 200-year-old game. How do you reinvent that experience? We had to think about what matters, about how we want our players to feel. It’s more social, with an emphasis on quality, immersive, and personal.”

With mobile accounting for almost half social casino revenues, according to market analysis firm Eilers Research, creating the same experience across social, mobile, and in some cases, online and land-based platforms, has become increasingly important. After testing various titles and features, developers have acquired knowledge that helps them adapt to evolving market dynamics.

A current trend is deploying proven casino content in the social environment and the top-grossing social casino apps all have incorporated Las Vegas-style slots. Online division of casino powerhouse Caesars Entertainment currently holds the leading social casino titles on both Facebook and mobile. It has been able to tap into market experience in the land-based sector and apply it to social.

“Dedicated players show a distinct preference for games that emulate the 
pay-out rates of real-life casino games,” 
added van Dreunen, “opening a new arena in the social and mobile casino market. 
Building a truly cross-platform strategy that connects with players digitally and in the real world is proving successful…to build a 
deeper, richer experience both on- and off-line with customers.”