Social Games Market Dominated by Real Money Gambling Operators
Once a very different business not dominated by gambling firms, the social casino game space latest changes on the business leader board is a sign of the changing social games landscape.
Can indy and small studios compete?
Three of the top four social casino market leaders are real gambling operators (Caesars – Playtika, IGT – Double Down, WMS – Jackpot Party) which only makes the space more expensive for social game developers who do not have the same financial deep pockets. The one that is not real money gambling, is the social games giant Zynga (who has leveraged the early viral Facebook channels for massive growth). Anyone who knows the social games & casino space knows that they have been in some major internal company troubles for some time now battling talks about going real money or not. Zynga seems unsure of it’s future direction but as of late has been cleaning up their high-level management team.
Caesars Entertainment, which entered the social gaming space through its $90m acquisition of Playtika, maker of social slots game Slotomania, now is the market leader with an a 18.6% combined Facebook and mobile market share. Zynga, the former number one, now has a 15% share. Slot giants IGT, owner of Double Down Casino, and WMS were in third and fourth position respectively, with 14% and 6% shares of the market.
Social free-to-play slots games seem to be the driving force of social casinos.
The CPI (cost per install) of social games is a big concern, with estimates of customer acquisitions hitting the $8-$10 price tag. Mobile however seems to be more fragmented with mobile user acquisition significantly lower. Mobile revenue is up for social game companies, but as traditional gambling companies go after this market, it is unknown how competitive the mobile landscape will also get.
“When cost-per-acquisition rise out of proportion with increases in revenue-per-player, there is a structural issue throughout the industry.”
Many social gamers are exploring real-money games because they know these players will monetize and generate an instant ROI. Though cost per acquisition is significantly higher, the numbers over long term lean towards real-money as you don’t need 10’s of million of players to monetize enough ROI because 100% of the real money players are paying players and the life time values are 20x that of a social gamer.
As the economics of social games market change, expect to see more developers look for better ways to monetize.
Re-posted from: http://www.luckyladygames.com