In any look at today’s online social media realm, the numbers are staggering. Facebook alone has more than 1 billion active members. It’s estimated that Twitter now has over 500 million registered users, 200 million of whom use the service each month. An astounding 340 million tweets are sent each day. LinkedIn and Pinterest are two other social networking sites with memberships that number in the millions. These sites are proving so popular and indispensable that a growing number of consumers are linking to them through multiple devices and channels, including mobile products such as cell phones and iPads.
And while improved communication may be the raison d’être for most of these social sites, it’s quickly becoming apparent that visitors are willing to use these networks for more than just sharing photos and gossip on the run. For example, the Internet news blog Mashable reported last September that more than 235 million Facebook members now use the network to play games, a number that is predicted to grow over the upcoming years.
With the opportunity to reach that many potential players, it’s no surprise that slot machine developers want a piece of the online social gaming action.
“Social gaming refers to any games that are played socially, and more recently social gaming has become synonymous with games played socially across the Facebook platform or on mobile devices,” said Carrie Peters, spokeswoman for DoubleDown Interactive where International Game Technology (IGT) slot games such as Wolf Run and Cleopatra sit alongside virtual table and video poker games. “Most truly social games can be played in small chunks of time and tend to have shorter story lines with straightforward, simple, play and game mechanics.”
And those already offering social gaming products are reaping heady rewards, at least when it comes to audience development. DoubleDown Casino, affiliated with IGT since IGT’s acquisition of parent Double Down Interactive for $500 million early in 2012, has more than 5 million Facebook “likes.” Williams Interactive’s Jackpot Party Social Casino, introduced in mid-2012, quickly gained more than 1 million likes and 500,000 daily active users. Aristocrat Technologies’ Product Madness has more than 3.5 million monthly active users and 500,000 daily active users. And among slots-only apps, Playtika’s Slotomania is a giant, with more than 10 million registered users.
Slot suppliers with an established social gaming presence and the ability to easily create online concepts actually have a chance to double up on their Internet investment as well. Even with a successful social gaming site, Orrin Edidin, president of WMS Industries and CEO of its subsidiary Williams Interactive, sees a large market in the business-to-business (B-to-B) segment of the trade-creating online-adaptable content for casinos willing to offer WMS games for social play on their own branded sites, Facebook pages and apps for mobile devices. Indeed, a number of slot manufacturers including Bally Technologies have decided to focus solely on the B-to-B market; initially forgoing the temptation to develop their own social gaming casino on Facebook or mobile apps.
SOCIAL ADAPTATIONOn paper, it appears online slot concepts face an uphill battle in the social gaming realm, which is filled with non-wagering products such as FarmVille and CityVille, popular building games that have captured huge audiences. But slot-type games have shown they fit quite comfortably into this space, primarily by adopting the trappings of other online games. Players can play for free at the start, though they may buy credits to advance in a game’s story line, unlock a new slot machine or just to continue playing when they’re out of free credits. There are successive levels of play, and players earn achievements as they go along, which they can have posted to their Facebook pages so friends can see their accomplishments.
This model is called “freemium” play. Users can play for free, but there’s premium value for those who buy extra credits.
“Those [slot] games actually monetize better than the traditional Angry Birds kind of game,” said Bryan Kelly, senior vice president of technology for Bally Technologies. “Maybe the whole reason the casino exists, the reason the whole three-second or six-second slot experience exists, is because it’s been optimized for the consumer. That’s what the consumer wanted, so the supplier built it. So it’s the perfect entertaining, engaging experience that now also translates into this freemium social game model.”
There’s also an element of being prepared and laying groundwork for potential online wagering games should they be legalized in markets such as the United States that do not currently permit online play for money. But some in the industry have confidence in the freemium model as a profitable one in and of itself.
“It’s viable on a standalone basis.” Edidin said. “I think there are cross-marketing opportunities in markets where wagering is legal. The U.S. is the highest earning social market, perhaps because there is no legal online wagering here-that’s one theory. But I think they can co-exist. There is some cross-over between casino players and online social players. But even on a standalone basis, freemium, because it’s free to play but you can also pay to accelerate your progress, is a good model.”
At Jackpot Party casino, for example, players can claim free credits every four hours as well as purchase extra credits anytime. A target credit total is posted at the top of the screen, and players whose virtual bet totals reach that amount move up a level. Moving up brings more free credits, higher maximum bets so they can move up faster, and unlocks a new slot game. Games at Jackpot Party are WMS classics including Zeus II, Invaders From the Planet Moolah and, of course, Super Jackpot Party, that look and play like the casino versions, with realistic math models. Beyond the unlockable slots are premium slots, including I Love Lucy, available for an extra fee.
“The well-run casino sites are played both by land-based casino patrons and those who just like playing for fun,” said Edidin. “They love the casino genre, they love playing the slots. A lot of these are slot players who are looking for an authentic experience because they’ve seen the games before or they’ve heard about them from their friends. They can play for free because we’ll give them free coins to play with every day, but there’s also something called a virtual economy by which if they want to accelerate their progress or skip ahead and unlock new games without having to work their way to achieve those, they can purchase coins, they can purchase ways to unlock games, but the coins they’re buying have no redemptive value. They’re purely for amusement.”
Williams Interactive, which also encompasses online wagering initiatives in legal markets, and the company’s Players Life site that serves as a bridge between online interaction and play in brick-and-mortar casinos, first tested freemium play on Facebook with Lucky Cruise casino, in partnership with the New York-based development firm Large Animal. Lucky Cruise is still available on Facebook, along with Jackpot Party.
JUMPING IN THE POOLWMS is not the only company looking to expand its social gaming footprint. Spielo International, for one, has been watching the social gaming space with interest. The company has an established free-play poker site and is contemplating further online/mobile offerings, according to Spielo officials.
“Through Lottomatica, we have launched the Free Play Poker Club in Italy on Facebook,” said Olivia Gillibrand, head of marketing for Spielo International. “Over 220,000 people have installed the application, it now has over 60,000 unique monthly users and these numbers are growing daily.”
“Many of today’s players are used to running their whole lives from the palms of their hands,” Gillibrand added. “They can do their banking, pay bills, watch television and buy groceries [through their mobile devices]. These are people and players for whom social networks such as Facebook and Twitter are a way of life. For us to be true to our corporate goal of having more players playing our games than ever before, we want to ensure that we are keeping up with players’ needs and demands.”
With its acquisition of Product Madness, Aristocrat Technologies is bullish on social, too. The company is assembling an integrated soup-to-nuts digital wagering package for gaming operators looking to exploit the online gaming space.
“In addition to our highly scalable, proven, feature-rich technology platform with unique CRM functionality, we have acquired a top-notch team with the ability to acquire and monetize a huge number of players, allowing us to get significant in-depth data on our games, player trends and feature preferences,” said Atul Bali, president, Aristocrat Americas. “Together with our recent acquisition of a proven Internet wagering platform with a game server, we now have the ability to provide our customers an integrated suite of digital wagering and social games, player management and data products and services alongside our land-based game and system platforms.”
Bally Technologies is also emphasizing a B-to-B approach with online and social gaming, offering product and content aimed at driving more business to brick-and-mortar casinos.“We’re taking all the great stuff that’s happening in the brick-and-mortar casino and broadcasting it out to Facebook to let people in that world know there are all these great things happening at the property they should be a part of,” Kelly said. “Progressive feeds, tournament feeds, great game events… those types of things.”
“We’re also linking our core systems into the online process,” Kelly added. “Let’s say our casino partner wants to do something on their Facebook site that attracts people to the property. We give them interfaces that say, ‘the first 50 people that come to our Facebook site get a free entry in a tournament down on the casino floor.’ We give them the hook and register those things into the land-based system. We call it cross-channel CRM, or digital marketing.”
Market strategies aside, chances are a number of other slot suppliers are either considering or finalizing forays into the social gaming sphere to avoid missing out on what could be wagering’s next golden age.
“Social Gaming has enormous potential to grow,” Aristocrat’s Bali said. “Growth can take place in a number of ways-through a higher proportion of active players actually starting to spend money on games (about 98 percent don’t spend anything today), or by those who have started to spend, wagering larger amounts of money. Due to the social nature of these games and venues, the time spent playing and the need to pay to remain engaged are likely to drive the size of this high-growth industry.”
“Played by millions and estimated to be worth billions of dollars in revenue, there is just no ignoring social gaming,” Spielo’s Gillibrand added. “The growth has been phenomenal, leading to some serious investment and a number of attention-grabbing deals and buyouts in our industry. Everyone concurs that it is big business, and as we continue to find new and more developed ways of monetizing social, it will only continue to expand.”
SIDEBAR: Social Gaming Association seeks proactive approach to player protectionDespite the potential for player acquisition and increased earnings, there is a risk for both slot suppliers and land-based operators in taking casino-style games into the currently unregulated social/freemium environment where anyone may play. The recently established Social Gaming Association (SGA), of which Bally Technologies and other suppliers are members, is working to set standards and practices to ward off criticisms of the market.
“Player protection is the primary concern raised by industry detractors worried about what social harm may be done if this industry continues to operate in an unregulated environment,” said Stuart Tilly, SGA chairman. “In relation to casino-style social games specifically, the common concern in this regard is that these types of games pose a risk to the young and vulnerable in society being lured by the glitz and glamour into a pastime they might not have otherwise been exposed to. There is, some claim, an inherent risk posed by trivializing gambling within a playful environment, of the young and vulnerable in society falling victim to some form of gambling addiction.”
“In relation to social games more generally, industry detractors will also cite a lack of transparency in the games, i.e., a lack of information on game mechanics, how users may be encouraged to part with cash, how their data is stored, where to go if they want to make a complaint, etc.,” Tilly added. “Other concerns relate to more general consumer protection principles such as fraud prevention, security of personal information, etc.”
The potential for fraud and underage gaming are only two of the hurdles the SGA will need to overcome to avoid unwanted or drastic government interference, according to Tilly.
“The SGA was established to protect and further the legal, regulatory and commercial interests of the social gaming industry in response to this increased level of criticism and scrutiny and to try and temper any knee-jerk calls for formal legislation to be introduced,” Tilly said. “The SGA’s key aim at the outset therefore is to develop a socially responsible code of conduct for its members to adhere to, addressing key concerns such as those outlined above.”