The social gambling market is growing rapidly with the introduction of ‘commercial’ gambling on social media. Since the internet came along, the casino industry changed immeasurably and from the ability to play top class slots and table games at home to more recent developments like mobile gaming and live dealer streaming, there always seems to be something new going on.
One of the latest of these developments is social gaming which really came to the fore late in 2011 and early 2012 and, as you might have already guessed, it relied heavily on the success of Facebook. Pretty much everyone has a Facebook account and the surging popularity of social casino games reflects a small part of just how the entire gaming landscape has changed.
In addition, gambling companies have been buying games developers (like IGT’s purchase of Double Down) and social gaming companies are collaborating with regulated gambling businesses to offer real gambling (like Zynga’s deal with bwin.party).
Definition of ‘Social Gaming’
Social gaming is the shortcut term used to describe and encompass a diverse range of types of any activity on any platform. Sometimes, the term ‘social’ is inaccurate. The social element does not always mean a user ‘plays simultaneously with friends’, and could just mean as ‘playing the same game with friends’. Some games can also just mean ‘play alone in a website/platform’.
It has been suggested, and often repeated by the social gaming industry, that the average social gamer is 40 years old and female. However, there is no such thing as an average social gamer. Particular genres/games are targeted at, and appeal to, different demographics. The age and gender profile of players varies significantly depending on the type of game.
Data obtained from Superdata (a provider of market intelligence on digital games) suggests that nearly half (48%) of players playing casino-style social games are aged 21-34
Again, this figure is unlikely to be universal – different platforms and game types will appeal to different demographics.
Development of Gambling-Style Games
A number of game developers are providing gambling-style games that look and feel like traditional gambling products. These games include online slot style games, poker, roulette or bingo and are offered on a variety of social network platforms (such as Facebook, Apple App Store, Google Play Store and BlackBerry App World) or directly via the developer’s website.
Such games can be free or purchased in order to enter. For example, you can pay for extra spins, credits, life chips or tokens. With this, companies can earn money while escaping the offer of a cash prize to users.
As of this writing, winning additional turns, spins, or any other types of credits is equivalent to any prize or money or money’s worth. This makes a social casino game into a licensable gambling. However, it is still an unproven issue in terms of legality. Some companies and developers would sometimes try to push the boundaries of what they can do within social media, due to some countries not having concrete laws regarding internet gaming.
Potential Profit in Social Gaming
So, how do social games make money, if they are not gambling? Making a game free for anyone to enter does not mean that contestants are prohibited from spending money. Sweepstakes work because people do buy the product being promoted, perhaps thinking that subscribing to a magazine increases their chances of winning. Charities run “donation requested” raffles, knowing social pressure and guilt feelings make most individuals send in money, even though not required.
Subscription games, like “free” poker for money prizes, are profitable because most players prefer their credit cards being billed about $20 every month, rather than having to fill out and mail postcards for free entries.
Social casino games have millions of players, many spending as much as they do on real-money online gambling. Studies are beginning to show exactly how much people do pay to play supposedly free games online. The most common model is “Freemium.” Players can participate for free. They only have to pay to get additional goodies, like avatars. But the most common commodity sold is time.
Once players have lost the free chips given at the beginning of each hour, they can wait for more free chips. Or they can pay and get them right away. So, a social poker player who has lost all his chips can sit out a few dozen hands, or buy additional chips, for real money. The lure of the freemium is so great that people will pay for more time, even when they cannot win money or a prize that can be sold. And the games are good. Better than the best slot machine available on a casino floor.
Market reports have estimated that approximately 1-5% of players pay to play social games (for example, purchasing in game currency/tokens or virtual goods). A relatively small proportion of this sub-group (15%) accounts for an estimated 50% of all Freemium.
Studies have suggested that the gambling genre of social games is among the best monetising apps, with estimated 5-10 US Cents revenue per user. It should be noted this figure is so low because the number of total users also includes non-paying users (who are in the significant majority).
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