Betting On Facebook Social Casino Games

Increased mobile gaming, better and more networking platforms and refined in-game currencies are boding well for 'social games' on leading social networking sites such as Facebook.

Eager to find new revenue streams, Zynga has confirmed that it is considering developing both virtual payout and real money social casino games. Indeed, social casino and betting games are likely to be stars in the growing social games market. Gambling operators, who are after new users and reach, are hurriedly formulating social games strategies, partnering with social games developers. The $500M acquisition of Double Down Interactive by International Game Technology shows the extent of the hopes that gambling operators have for converting some of the 845M Facebook users to high lifetime value real money gamblers.

Social Games Differ from Traditional Online Games

Social casino and betting games differ from traditional online games in that they leverage a social network in order to drive games. Users play with their network in an environment of friendly competition motivating them to play more, better, faster and longer. Achievement, progress and one-upmanship all contribute to successful social games. As the number of social games grows, social casino games are becoming increasingly popular and now include slots, bingo, blackjack, roulette and poker on Facebook.

Social games offer an opportunity for gambling operators to tap into the huge potential of the real money gaming customer base. In 2010, the online gambling industry was measured at $30.3B and the social games industry was estimated at $3.65B. By marrying the reach of social games with the customer lifetime value of real money gamblers, gambling operators and social games developers can accelerate their growth.

Online gamblers are relatively few in number but have a high lifetime value, so online games monetise well on a per-player basis. Social games players, on the other hand, are very large in number with a relatively low lifetime value. Both online gambling and social games have their strengths for building a strong business, so can complement each other when used wisely and in synergy. Gambling operators' foremost hope from expansion into social games is to convert social gamers into real money gamblers. While this is the 'holy grail' of their social games strategies, social games can also provide other strategic benefits for gambling operators.

Conversion of social gamers into online gamblers is uncertain, but extremely alluring in its potential. No one quite knows to what extent the social games and gambling demographics overlap. Despite this uncertainty, there are other reasons for gambling operators to go into social games. Social games offer gambling operators the opportunity to enter markets in which online gambling is illegal. Gambling operators can also broaden their reach using social games, monetising their virtual currency social games as traditional social games companies would. Gambling operators may also choose to use their games to strengthen their brands and offer an education tool for existing online gamblers who wish to strengthen their skills in a virtual currency environment.

Investing in Social Games Has Many Advantages

While there are many advantages to investing in social games for gambling operators, the way that such a strategy is implemented requires expertise. The number of social gamers who will convert to real money gamblers is uncertain. How much are players driven by the specific game genre, and how much are they driven by game mechanics that are specifically tailored to making the game a virtual payout social game or a real money payout single-player game? A close understanding of player behavior can help a developer to create the most successful games.

Time will tell regarding the conversion of social gamers to online gambling. Regardless, gambling operators are hopeful that the reach opportunity offered by social games will itself strengthen their business development strategies. Gambling operators must now decide whether it is wiser for them to build social games themselves or to invest in social games developers.

 Posted by Martin Frindt, MD of Crowdpark at 08:45 on 13 April 2012