July 18, 2012
Lotteries go social
With social gaming proving to be one of the most exciting and dynamic sector of the egaming industry, Vicky Velitsou of INTRALOT Interactive, explains how lotteries can benefit from this growing segment.
INTRALOT Group has been active in combining the most successful concepts that make up social gaming's DNA in order to design and develop the next generation of lottery gaming content; this new content is designed to address the players accustomed to social interaction.
Riding the wave of social gaming
Online gaming operators around the world are moving towards the social space, where casual gaming is king. This social gaming space offers online gaming operators the opportunity to make a big and important push in terms of player acquisition, new revenue sources and advertising opportunities.
Recent statistics regarding the social gaming world justify why industry players have been motivated to enter this exciting sector. One interesting statistic is that 35% of social gamers have never gambled online before, meaning there is great untouched potential of new demographics for the online gaming market. Although the industry cannot yet predict the exact conversion rate of players who move from casual gaming to real-money gaming, first indications paint social as a promising market.
There are still many who doubt the value of social gaming, with the matter of monetisation their main argument. Truth be told, even social gaming evangelists acknowledge that it is a rigid task monetising social gamers compared to the usual punters. However, the considerably higher volume of players means even if there is a lower income per player, the critical mass of players can make the difference.
Facebook alone counts for more than 80% of all social gaming activity taking place at the moment and under current circumstances (30% of all gaming transactions on the platform are held as a transaction fee) it is the major beneficiary. However, the current trend is that players prefer to play along with their friends, which is proven by the 240 million Facebook subscribers worldwide that play social games within the network.
Finally, social gaming can spread to every market, since existing egaming regulations are largely unconnected to social gaming companies. Even though the UK Gambling Commission has started investigating whether to regulate social gaming like the real money gaming industry, there is still great potential especially in the US, where a huge pool of social players already exists (currently estimated to be 60 million players).
So, what are the incentives that drive lotteries to go social?
Current worldwide trend towards social. Lotteries would like to follow the evident trend that has arisen regarding the convergence between social games and real money gaming. Online gaming operators are currently riding the wave of social gaming by investing big in social gaming companies, while lotteries are examining how to best adapt their unique knowledge of lottery products and players into the social and online gaming world.
Wider audience with greater play-for-money potential. Relevant statistics show that 8% of the US social networking population pays for virtual goods in social games, with the top 3% of users spending on average US$20 per month. This data suggest that there will be convergence, even in the near future, and major industry players worldwide are keen to bank on it. The beauty of social gaming lies in the sheer volume of players
these types of games are attracting. While monetisation will continue to be a growing theme in this sector, money can already be gained from the army of players. For example, if a social game attracts 50 million monthly active users (MAU) and only 5% decide to purchase credits or chips on a regular basis, that’s a monetised stream of more than 2.5 million players. What if each of those 2.5 million spends $5 each time?
Already this sector’s wide audience can prove priceless.
Decreased cost per acquisition. Reduced cost per acquisition is the real convergence point between play-forfun and play-for-money games. Online gambling operators pay large amounts depending on the game vertical and the advertising vehicle compared to the significantly cheaper cost per acquisition on Facebook. However, we should always bear in mind that most games on Facebook are designed with the aim of attracting the broadest possible player base, while the promotional activities of online gaming operators are targeted to those players who want to play for real money, which is already an over-competitive and saturated market.
Additional revenue-generating vehicle via virtual goods. Traditionally, social games monetise through the selling of virtual goods. Analysts project $6bn will be spent on buying virtual goods and currency in 2013, meaning that social games are able to make profits on their own. A ‘social lottery’ product could practically be a self-funded marketing tool that can ease the transition of players from the play-for-fun site to a playfor- money lottery site.
Social brand. Lotteries are willing to freshen up their brands by introducing a social dimension into their games portfolio and prepare for the opening of the online gaming markets.
New games ahead
INTRALOT, along with its lottery partners around the world, is already working on how social games can fit into its lottery agenda. Social games are built around existing user bases and their social interactions, rather than existing games trying to attract new players; social games’ core functionalities such as progressive jackpots, tournaments, top player lists and levelling system can be used by lotteries to increase players’ loyalty, enhance user engagement and players’ stickiness and emotional attachment with a lottery brand. Also, the liquidity and user diversity of social players can be optimally leveraged by a lottery brand, allowing a lottery to enhance its core game operations (either land based or interactive).
The longstanding experience of lotteries in the gaming industry in combination with the social gaming trends can lead to new game concepts that can either revitalise and enhance the already existing lottery concepts or generate entirely new ones aligned with the online gaming best practices. However, lotteries’ ultimate challenge will be how to balance new social networks that will co-exist with their traditional business as well as how to introduce real money play in an established social environment when legislation permits it.
INTRALOT Group has been active in combining the most successful concepts that make up social gaming's DNA in order to design and develop the next generation of lottery gaming content; this new content is designed to address the players accustomed to social interaction.
Riding the wave of social gaming
Online gaming operators around the world are moving towards the social space, where casual gaming is king. This social gaming space offers online gaming operators the opportunity to make a big and important push in terms of player acquisition, new revenue sources and advertising opportunities.
Recent statistics regarding the social gaming world justify why industry players have been motivated to enter this exciting sector. One interesting statistic is that 35% of social gamers have never gambled online before, meaning there is great untouched potential of new demographics for the online gaming market. Although the industry cannot yet predict the exact conversion rate of players who move from casual gaming to real-money gaming, first indications paint social as a promising market.
There are still many who doubt the value of social gaming, with the matter of monetisation their main argument. Truth be told, even social gaming evangelists acknowledge that it is a rigid task monetising social gamers compared to the usual punters. However, the considerably higher volume of players means even if there is a lower income per player, the critical mass of players can make the difference.
Facebook alone counts for more than 80% of all social gaming activity taking place at the moment and under current circumstances (30% of all gaming transactions on the platform are held as a transaction fee) it is the major beneficiary. However, the current trend is that players prefer to play along with their friends, which is proven by the 240 million Facebook subscribers worldwide that play social games within the network.
Finally, social gaming can spread to every market, since existing egaming regulations are largely unconnected to social gaming companies. Even though the UK Gambling Commission has started investigating whether to regulate social gaming like the real money gaming industry, there is still great potential especially in the US, where a huge pool of social players already exists (currently estimated to be 60 million players).
So, what are the incentives that drive lotteries to go social?
Current worldwide trend towards social. Lotteries would like to follow the evident trend that has arisen regarding the convergence between social games and real money gaming. Online gaming operators are currently riding the wave of social gaming by investing big in social gaming companies, while lotteries are examining how to best adapt their unique knowledge of lottery products and players into the social and online gaming world.
Wider audience with greater play-for-money potential. Relevant statistics show that 8% of the US social networking population pays for virtual goods in social games, with the top 3% of users spending on average US$20 per month. This data suggest that there will be convergence, even in the near future, and major industry players worldwide are keen to bank on it. The beauty of social gaming lies in the sheer volume of players
these types of games are attracting. While monetisation will continue to be a growing theme in this sector, money can already be gained from the army of players. For example, if a social game attracts 50 million monthly active users (MAU) and only 5% decide to purchase credits or chips on a regular basis, that’s a monetised stream of more than 2.5 million players. What if each of those 2.5 million spends $5 each time?
Already this sector’s wide audience can prove priceless.
Decreased cost per acquisition. Reduced cost per acquisition is the real convergence point between play-forfun and play-for-money games. Online gambling operators pay large amounts depending on the game vertical and the advertising vehicle compared to the significantly cheaper cost per acquisition on Facebook. However, we should always bear in mind that most games on Facebook are designed with the aim of attracting the broadest possible player base, while the promotional activities of online gaming operators are targeted to those players who want to play for real money, which is already an over-competitive and saturated market.
Additional revenue-generating vehicle via virtual goods. Traditionally, social games monetise through the selling of virtual goods. Analysts project $6bn will be spent on buying virtual goods and currency in 2013, meaning that social games are able to make profits on their own. A ‘social lottery’ product could practically be a self-funded marketing tool that can ease the transition of players from the play-for-fun site to a playfor- money lottery site.
Social brand. Lotteries are willing to freshen up their brands by introducing a social dimension into their games portfolio and prepare for the opening of the online gaming markets.
New games ahead
INTRALOT, along with its lottery partners around the world, is already working on how social games can fit into its lottery agenda. Social games are built around existing user bases and their social interactions, rather than existing games trying to attract new players; social games’ core functionalities such as progressive jackpots, tournaments, top player lists and levelling system can be used by lotteries to increase players’ loyalty, enhance user engagement and players’ stickiness and emotional attachment with a lottery brand. Also, the liquidity and user diversity of social players can be optimally leveraged by a lottery brand, allowing a lottery to enhance its core game operations (either land based or interactive).
The longstanding experience of lotteries in the gaming industry in combination with the social gaming trends can lead to new game concepts that can either revitalise and enhance the already existing lottery concepts or generate entirely new ones aligned with the online gaming best practices. However, lotteries’ ultimate challenge will be how to balance new social networks that will co-exist with their traditional business as well as how to introduce real money play in an established social environment when legislation permits it.
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|---|---|---|
I2_Lottery Focus@EGR Magazine |
Vicky Velitsou of INTRALOT Interactive, explains how lotteries can benefit from this growing segment. |
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