Social climbers

With social casino predicted to be worth $4.4bn by 2017, Melanie Dayasena-Lowe finds out how the rising stars in the sector have found success

Eilers & Krejcik Gaming estimates the US social casino market will reach $3.7bn in revenues this year, a growth of 12% year-on-year, and a major factor in that has been operators reinventing themselves for the world of mobile.

The mobile channel is playing a big role in the success of social casino. Three-quarters of the social casino audience now plays on a smartphone, according to SuperData Research and smartphones have overtaken desktop as the most popular social casino device among US players. But this has meant operators have had to change their products to fully capitalise on the new opportunity.

“Data shows that social casino play is a second screen activity for most, with 58% watching TV at the same time.  Therefore social casino games have had to adjust with a move to slots to ensure that they were keeping aligned with the manner in which their audience played,” Carter Rogers, research manager for SuperData Research, says.

Much as in the real-money world slots are the most played social casino genre on every platform and as slots games are playable in short bursts, it makes them even more appealing to mobile players. In turn, developers are targeting mobile first and foremost with slots comprising the bulk of newer games. And mobile means mobile, with tablets more an afterthought despite tablet players 17% more likely to spend than those on smartphones.

Despite this Rogers says publishers should be wary of only trying to reach tablet players as just 4% of the social casino audience exclusively plays on tablets. Instead, games that work well on all screen sizes are more likely to be the stickiest. But what worked on desktop didn’t always work on mobile and operators have also had to contend with the broader omni-channel trend.

The shift in cross-platform play is evident as 49% of people play the same social casino game on both PC and mobile. Players are more likely to start on mobile and continue on PC due to the convenience of the bigger screen. A SuperData report points out that as PC players – who play for longer settings – favour games with greater variety, so new slots games need to also keep this core player base entertained.

Rising up the ladder

For both social casino and real-money operators it’s fascinating to see the impact this mobile revolution is having on the make-up of the power structure. The big names such as Caesars Interactive Entertainment (CIE) still hold on to significant market share across mobile and web, but the rising stars are creeping up behind.

In Q1 2016, Eilers & Krejcik Gaming reported another strong quarter for CIE with revenues up an estimated 7% quarter-on-quarter and up 27% year-on-year. CIE also tops the chart grabbing 23.2% of the social casino market share in Q1 2016 across mobile and web, according to Eilers & Krejcik Gaming. Meanwhile the other category makes up 26.9% of the market share where Rocket Games and Super Lucky were highlighted as two notable market share gainers.

Rocket Games was up an estimated 589% year-on-year driven by Viva Slots Vegas while Super Lucky broke into the top 15 list with revenues up an estimated 578% year-on-year due to its launch of DoubleUp Slots. Eilers & Krejcik Gaming also commended Murka as the fastest growing social casino publisher during the quarter with revenues up 44% quarter-on-quarter and 559% year-on-year.

Although these rising stars are still fairly new to the scene they’ve managed to hit on a winning formula and achieve impressive growth. Rocket Games, Murka and Super Lucky are all examples of firms that have broken through on mobile in a competitive landscape. So how did they do it?

For online, social and mobile developer Rocket Games, founded in 2013, it wasn’t an overnight success, admits co-founder and COO Niko Vuori. “We launched close to 30 titles over two years until we figured out something that worked,” he explains.

Early mover advantage

Now boasting over 40 slots titles and nearly a million daily active players, Rocket Games has taken a multi-product approach to its portfolio of games. Vuori likened its approach to slots to Coca-Cola’s strategy comprising different flavours, sizes and packaging. “It’s pretty much the same stuff but appeals to slightly different consumers. We try out different things to unlock different consumer tastes.”

In Europe, taking the local approach is paramount and understanding how players in specific regions and countries enjoy different games and themes should be an essential part of product development.

Vuori notes that one of the keys to success for Rocket Games was being early to market in a sub-genre of slots that had largely been overlooked by others – classic style three reel mechanicals.

“Video slots had dominated the social and mobile market up until summer 2015 when we launched on mobile with Viva Slots Vegas,” he explains. “We were able to put a really good mobile optimised classic three reel mechanical experience out into the market. We were there first and able to capture some of those people who hadn’t had the experience they had been looking for. The key is to get that player conversion by offering the players something they haven’t seen before.”

In terms of UA strategy, Vuori says it’s all about casting a wide net. “It’s about adding new channels, new targets, lookalikes, partnerships and direct deals. Then understanding what the characteristics of those channels are and adjusting your bidding accordingly.” It’s a lesson many in the real-money sector would be wise to take on board.

Thinking outside the box

Mobile-first developer Murka, which has offices in the Ukraine and California, started out in 2011 with its game Slots Journey. CEO Anton Krasny explains that in the early days his firm struggled to find its focus but in 2014 decided to concentrate on social casino only. Its main product is Scatter Slots, which ranked 14^th in Eilers & Krejcik Gaming’s Q4 2015 social casino tracker.

Krasny cites innovation as the firm’s key to success rather than copying what was already in the market. “We tried to use our understanding and experience on how slot games can be,” he remarks.

While many other social casino firms are located in San Francisco, Murka is European based and with that brings its own pros and cons. “We do everything in-house,” explains Krasny. “We can be cost effective and get talented people. Our average age in the company is 25 years old so we have a lot of young talented engineers. The disadvantage is the culture as we’re developing games for the North America market so that is a challenge. But Playtika is also in Ukraine so it is becoming a social casino hub,” he adds.

It’s a problem that’s analogous to that facing many egaming operators with development teams in Eastern Europe creating games for UK players. While there is a wealth of talent available in Europe it’s crucial that resource is focused on a strong user experience that resonates with the home audience. But the key lesson from the social casino sector is not to be afraid to experiment, particularly when it comes to capturing the attention of mobile users.

Let’s experiment

Mobile only firm Super Lucky, which has offices in San Francisco and Singapore, has experimented a great deal since the company was founded in 2011. “We didn’t have any casino or slots DNA in our company,” remarks Nick Talarico, founder and CEO of Super Lucky Casino. At the end of last year the firm found success with the launch of DoubleUp Slots, although he admits that learning about slots was a lot trickier than he had imagined.

“Five years ago we decided to pursue slots as there is more money in it. There are so many different variables and so many different things that go into it so it took forever to learn even the beginnings of what makes a slot machine successful.” The firm has had the luxury of being able to use some of its smaller games to experiment on to find out what works well and what doesn’t work.

“We’ve all built our companies with experimentation as part of it,” remarks Talarico. “We have products that we don’t really care about that don’t generate the user base and revenues we want. So we can change that economy and see how it has an impact.” And this move to releasing minimum viable products that tests the boundaries of what consumers want from a game is becoming more of a feature in both the social and egaming sectors.

The online gambling industry has been keen to test out new features such as voice activated betting, new Apple TV apps and experimenting with virtual reality casino. Some of the smaller social casino operators have the luxury of experimenting and testing out new ideas on their less popular titles without damaging the success of their flagship products.

But the smaller scale also brings the importance of efficient mobile acquisition starkly into focus, and Adam Krejcik quite rightly highlights the need for a detailed user acquisition (UA) strategy to be in place. “Having an expert and dedicated UA team is not a luxury but a requirement especially at a smaller company where you don’t have the flexibility to just spend,” he says.

Super Lucky has begun to invest heavily in its UA with its team growing from one to 10 people. “I come from an affiliate background so it’s definitely been part of the company culture,” says Talarico. “If we put the right processes in place and are very clear on spend goals and return on ad spend goals we can plug a lot of passionate and intelligent people into it.”

The future is bright

With a bright future ahead for these up and coming social casino firms, what’s in store for the next 12-18 months? Talarico at Super Lucky has his eye on further growth. “We’re optimising now for DAU and revenue growth. We’re continuing to grow DoubleUp and probably after some tweaks Slots Favorites. We’ll be focusing on product improvements, improving retention and getting more money out of the users that enjoy spending.”

Murka’s Krasny says his aim is for the firm to scale horizontally and vertically. “So we will continue to grow and develop our existing games. We will also develop Scatter as a brand itself so we’ll launch titles that will be sharing the Scatter name this year,” he reveals.

Meanwhile, for Rocket Games the future is all about focusing on continued investment in existing products, marketing, UA and experimentation with new products. “We will continue to invest in Viva and classic slots in general,” explains Vuori. “We’re going to grow our existing games by making sure players have fresh levels and fresh machines to play.”

Beyond that Rocket Games is set to experiment with new ideas. “We’ll be launching a new Popeye themed slots game soon so we’ll be experimenting with brands and intellectual property. That will give us an insight into what is possible with a strong brand both from a marketing and product perspective.”

Branded offerings are nothing new to the online gambling industry, with the likes of Playtech, Microgaming and NetEnt offering a range of major brand slots. But the differing approach taken to these brand tie-ins in social will continue to throw up new potential avenues for developers looking first and foremost for engaging content that players want to return to. Not least in the new world of mobile gaming.

Social casino has responded to the mobile shift by changing its view of what makes a great gaming experience, and this new environment has created opportunities for firms such as Murka, Rocket Games and Super Lucky to quickly gain market share. For these social casino rising stars, an innovative product-led approach is at the heart of their growth and something that all real-money operators should pay close attention to.