Odobo’s Ashley Lang explains how games developers have a new opportunity to leverage their success in social and casual gaming by producing content for the regulated real-money gambling industry.
Social casino gaming has exploded in popularity in recent years and a recent Morgan Stanley report estimates the industry to grow from $1.7bn today to $2.5bn by 2015. The size of the opportunity has attracted more and more game developers and social casino operators to enter this competitive market. The positive side of this is that these new game development studios have introduced new game ideas and expressed creativity in ways that boost player engagement. New game mechanics such as narratives, achievements and levelling-up have been brought over from casual gaming to casino game models. The challenge here is that, with low average players values, it is increasingly difficult for social casino games developers to justify upfront investments in high-quality games content or marketing.
By contrast the regulated real-money online gambling industry generating over $35B in annual revenue from 50m players worldwide. This equates to average player values over 40 times higher than those of social casino gaming. Now consider the potential opportunities of convergence and for companies that have successfully proven the popularity of their brands and games in social gambling, to leverage their experience to produce content for the real-money gambling industry. The big opportunity before us is a model where game developers can focus on the production of great new games, and their marketing and monetization in social casino gambling, while leveraging the licensing infrastructure of a network of regulated gaming operators to release their content for real-money play to their eligible players.
In the past, producing content for the regulated gambling industry was an opportunity reserved only for a select few game development studios. This was a result of platform fragmentation, poor documentation of development protocols, tightly held specific knowledge of requirements and low transparency on distribution and revenue generation. Added to that has been the lack of understanding of the regulatory requirements and the sheer effort in business development terms to be noticed and engage with potential distribution channels.
This problem needed to be addressed by revisiting the way content is produced, licensed, distributed and monetised for the regulated gambling industry. Now, with companies like Odobo breaking down the barriers to entry, it is a real opportunity for more game developers. It means that companies which have built great content and audience in social casino gaming can now participate in the real-money gambling sector.
Core ‘commodity’ technologies which are not specific to any game concept, yet are required in the provision of every game, can now be standardised and provided to the developer at the platform level. These include a random number generator, network communications handling, localisation handling (currency and language), persistence (state handling), authentication and player account communications and more. Standardized here does not mean ‘standard’ – there is a sophisticated set of technology required that costs millions to develop – but Odobo is showing that it can be done in a way that enables multiple developers without having to be rebuilt and redesigned every time.
It is extremely expensive and inefficient for game developers to need to invest in core distribution technologies when they are not specific to their game concept. So by going through the content production process within the safety harness of an established environment designed to support the production of useable and compliant games, developers can focus more energy in the creative process – giving them greater competitive edge in a busy marketplace.
There is also a lot of positive momentum building behind HTML5 as a game development technology. This is particularly true for real-money gaming content where HTML5 enables developers to produce content that rivals the quality of Flash or native applications whilst being unrestricted by native app store distribution and fees, and allows play across all HTML5 supported devices.
By standardising the production and distribution of content it is also possible to bring developers and operators closer together. For instance, with Odobo, gaming operators integrate a single platform for the publication of content and enter into a single license agreement covering all content licensed from the Odobo marketplace, creating a single contractual relationships with developers. This model brings together the creative global games development community with the huge revenue opportunity presented by the online regulated gambling industry.
The efficiencies and opportunity created doesn’t stop there, as we will soon be launching Odobo Play, the consumer-facing side of the marketplace. This will showcase the greatest games, the developers that produced them, and the licensed and regulated online casinos that support their play in a discovery-friendly format for players worldwide – therefore reaching new markets has never been such a realistic prospect for developers. This can also dramatically increases the earning opportunity for game producers who have been successful in building an audience, to channel that success towards their games and the Operators serving them in real money space.
Social casino operators and games developers have proven that they can produce innovative new casino content with compelling game mechanics that engage players with virtual currency monetisation models. The new potential at hand is to bring these concepts to the real-money gaming industry via a network of licensed operators, and to reap the benefits of the lucrative revenue possibilities from exposure to their existing player bases.
According to Morgan Stanley, introducing only 10% of the existing social casino players in supported markets to online gambling could drive 30% growth in the online gambling industry. Is it any wonder everyone is talking about the huge potential of the convergence of social and real-money gambling? Companies like Odobo are leading the charge with development programs, distribution and monetization models that allow a new generation of content producers to take part.