If there has been one trend running throughout this year it is undoubtedly that of the continuing rise of social gaming.
The phenomenon has been on the online gambling industry’s radar for some time. But following some eye-wateringly priced IPOs and M&A activity, it is fair to say that interest in “social” is now running at fever pitch. It sometimes feels that if you don’t know the significance of your DAUs from your MAUs (daily active users and monthly active users), then you are in danger of being left behind.
But more reasoned voices are already making themselves heard when it comes to how the numbers for social might add up in the future, and we were intrigued when we noticed a note from the respected gambling analysts, on both sides of the pond, at Morgan Stanley that appeared in the middle of November.
The headline figures from the Morgan Stanley note Click Here to Play are those that suggest the social gambling market is worth up to $1.7bn at present – and could rise to be worth over $2.5bn by 2015.
But what we found most interesting was the analysis within the report about which operators would be the winners in social gambling, and why. As with our last posting, where US-based gaming analysts suggested that content would be the major battlefield in land-based and online gambling, the Morgan Stanley note also puts forward the argument that content in social is king.
“While the ‘half-life’ of gambling games appears to be somewhat longer, we still expect new content development to be a key factor for success,” they write. “With rapid developments in distribution (mobile, Facebook, proprietary platforms), content (new slots in particular), and regulation, we think winning operators will need to have the quality and depth of technological capability to react almost instantly to these changing dynamics. Robust technology/infrastructure is essential to scale applications up to support the millions of concurrent users necessary to succeed in this high-volume industry.”
What struck us about this analysis was that this is the same business case for online gambling. We offer our customers just that quality and depth of technological capability, particularly in sports betting. As a platform provider, flexibility is key and helping our customers to keep developing and adapting their offering to increasingly demanding players in an industry that continues to evolve.
In this sense, there really isn’t anything new under the sun. For all the excitement generated by social gaming, we agree with Morgan Stanley that although this is a high-growth and rapidly changing industry, it bears resemblance to online gambling - scale is important along with the ability to “react to changing customer preferences.”
The way to react is through content, and that is the same message for gambling in any area, whether it is social or not.
