_770.jpg)
Traditional casino games attract players driven to win money and afraid of losing it. The games offered by social casinos allow players to avoid worrying about money. On the contrary, users find social casino games relaxing and visit social casinos for entertainment.
Interestingly, this trend is not limited to online casino games. Casinos of Las Vegas admit that a new generation of visitors is less interested in traditional games of chance, and its members prefer alternative, more astonishing forms of entertainment. In recent years, it has become popular to use extra entertainment offered by resort casinos: restaurants, bars, and nightclubs. Therefore, Sin City should learn a few lessons from the social casino operators who have learned to profit from free entertainment.
The New Way to Win
Social casino games are virtually indistinguishable from demo games "for chips" offered by all online casinos. However, players at online casinos treat games "for chips" as a teaching step before playing for real money. The players of social casinos perceive the game "for chips" as just a game to play and have fun.
What is necessary for a good game? Of course, it must offer an exciting gameplay. Perhaps most readers have played Farm Frenzy or something like that. Such social games draw players' attention by:
- daily bonuses,
- passing levels,
- becoming better in the game,
- demonstrating success to buddies,
- playing with friends
- bonuses for the invitation of companions.
If you add this social gameplay to demo games of online casinos, social casino games can be formed in the resulting mixture. Moreover, the high level of social gameplay often affects the fact that players make such games a significant part of their real lives.
After all, social game developers add more bells and whistles for the players: daily tournaments, weekly leader races, promotions, and more prizes and awards. New goals appear constantly, and they are catchy enough to force gamers to keep playing.
The well-known cultural anthropologist Natasha Dow Schull describes how some players enter the "pleasure zone." They are somewhat similar to D'Artagnan, who said: "I'm fighting because I'm fighting." So these gamers play the game just because they like to do it. Players in the "zone" do not care whether they win or not as long as they enjoy playing. Neuroimaging of players at that moment showed that the losses, which had been programmed and had been part of any casino game, stimulated the same brain regions as winnings. The brain's pleasure centers do not care whether you win or lose real money or just virtual chips.
Social casino games are entertainment, but the players are still profoundly motivated to keep playing.
Research has shown that novice gamers rapidly become very motivated, try to accumulate virtual currency, and tend to return to the game every day. Many players visit chats and forums to discuss the game's strategy in detail or purchase virtual chips and coins. Players of social casinos have different motives to play, but they are associated with gambling rather than with gaming. They want to make progress in the game and win it. And they are willing to pay money for this.
Gambling vs. Social Games
Few people understand the difference between gambling and social gaming. In fact, there are direct differences between them, based on the fact that different forms of games create various risks.
Nowadays, "gambling" has the following economic definition: betting money or any material value on events with an uncertain outcome with the primary intention of making a profit or getting a material value. In other words, a game of chance is a game in which three elements are present:
- Winning. The goal of the participation is to win.
- Chance. Both wins and losses depend on the fortune rather than on the skills of participants.
- Bet. The opportunity to participate in the game is provided by making the bet, which is lost in case of the loss, in any possible way.
Let's imagine the definition of a gambling game in the form of a scheme:
If at least one element is absent, the game does not belong to the gambling category. Thus, social casino games will not be considered gambling games if they lose at least one of these three elements.
Social casino games, which are spread through social networks and mobile platforms, have elements of gambling, but they lack cash payouts. Players of social casinos buy virtual goods or pay money for virtual chips, but it is just impossible to win real money.
In addition, the business model of free social casino games allows operators to make profits via banners with advertisements, which can be seen on the screen during the gameplay.
Unlike online casino companies, which are very hierarchical due to their corporate structure, social casino operators can rapidly change their offers and adapt to the changing needs of users. Their data analysis methods differ significantly: whereas gambling is mainly focused on returning investments and generating income, social casino operators invest in complicated analytical tools to understand and predict the behavior of gamers to improve the playability and uniqueness of their games and improve the profitability of advertisements.
Thus, social casinos react quickly and implement changes according to consumers' needs. So, now they focus on mobile gamers, who prefer playing on smartphones and tablets rather than social networks.
Social casino games are not always social. There is a big difference between games in which players interact and play against each other and games in which the gamer competes for victory with a casino. The legislation has admitted that banked games are more dangerous than non-banked games. Therefore, blackjack, baccarat, and roulette are regulated more strictly than poker. A free slot machine on your iPad is closer to the traditional slot than Angry Birds.
If you prefer conventional online casinos, here are a few good ones.
| Casino | Deposit methods | Withdrawal methods | Accepted currencies | |
|
+7
|
+6
|
$, €, ₽, ₴ | |
|
+11
|
+10
|
$, €, ₽, C$, ¥, kr | |
|
+4
|
+3
|
$, €, ₽, KZT | |
|
+6
|
+6
|
$, €, ₽, KZT, C$, kr, zł, ₴ | |
|
+9
|
+8
|
$, €, ₽ | |
|
+9
|
+7
|
$, €, ₽ | |
|
+6
|
+5
|
$, €, ₽ | |
|
+11
|
+7
|
$, €, ₽, KZT, kr, zł | |
|
+1
|
+1
|
$, €, ₽, KZT, kr, zł, ₴, YTL | |
|
+6
|
+7
|
$, €, ₽, ₴ |
The Market of Social Casinos
The market for social casinos is flourishing. After the rapid development of social games on social networks in 2013, their explosive growth on mobile platforms began in 2014. The total revenue in 2013 was $2 billion; last year, it was $3 billion.
Casino social games are considered one of the most profitable segments of the mobile gaming market in particular and mobile applications in general. They entered the "super league" of gambling. The industry of social casinos has reached billions of dollars in the last two years. This can be explained by the rapid growth of Facebook and other social networks and the widespread mobile technologies. This has led to numerous mergers and acquisitions and the establishment of dozens of startups. But as you can see from the chart, large companies are dominating the market.
Distribution of Revenues of Social Casinos in 2014:
Licensed companies that own offline and online casinos are spending hundreds of millions to enter this business. For example, Caesars Interactive Entertainment Corp bought half a dozen social gaming companies in the last few years. By the middle of February, it was purchased by the Israeli company Pacific Interactive, whose main feature was a great set of slot-machine-style games.
A little earlier, Caesars acquired House of Fun, which reached 700,000 users daily in less than three years. Caesars Entertainment's very first purchase was Playtika, a company based in Israel. It was estimated in 2010 that it would cost approximately $1 million.
_770.jpg)
Playtika was independent for 11 months, and during that time, it could not succeed in making money. However, Caesars Entertainment paid between $80 and $90 million for 51% of its shares. Why did it happen? It happened because Playtika created Slotomania, the number one social casino game on Facebook. Slotomania is still one of the most popular social games and now has 13 million "likes" on Facebook.
Why did Caesar need to purchase companies offering social casino games? They contributed to the brand's promotion and helped create lists of potential customers. But even more important is that they bring profits to their owners.
Top Five Industry Leaders
- Caesars Interactive Entertainment is still the leader, with 21.2 percent of the market share, thanks to its assets, such as Playtika, Buffalo Studios, and Pacific Interactive. Their share is more than two times higher than that of its nearest competitor, IGT, the world's largest manufacturer of shot machines. This company owns DoubleDown Casino.
- IGT entered the social casino market after purchasing DoubleDown in 2012 for $600 million, and currently, it has an 11 percent market share.
- Zynga is in third place with a market share of 8.8 percent. The company's primary application is Texas Hold'Em Poker, which brings 74 percent of gaming revenues on Facebook.
- GSN/Bash Gaming is the fourth-largest social casino, with an estimated market share of 7.4 percent.
- Big Fish Games, owned by Big Fish Casino, is among the top five social casinos with a 6 percent market share. Maybe it's not too much, but the company received about $36 million from social casino games last quarter.
Where Does Money Come from?
So, how do social casinos earn money if they don't have gambling games? Most social casinos offer players the opportunity to play for free using chips. A certain number is provided for the first visit, and users get them each hour or day after reaching the next level or inviting friends. Operators sell extra chips for real money, but nobody forces users to buy them.
Thus, social casinos profit from players who have lost everything and do not have enough patience to wait for the next free chip. In the photo, you can see how many chips are available at Caesar Casino. The number is similar at other social casinos.
The most common way for social casinos to avoid the ban on gambling is to refuse to offer valuable prizes. But who will play in this case?! Here's a simple case where the winner can win chips, which can be sold for cash. If the rules allow transferring gaming chips to other players, it leads to a secondary market on which the virtual currency can be converted into real money.
Social casinos have found that some players will spend real money on buying unique avatars or virtual gifts, which can not be sold but can be used to stand out. In this regard, critics of social games state that these games have all three gambling elements because these prizes are valuable for players. However, the legislation neither supports them nor agrees that the intangible element can be considered a "valuable prize" if it can not be sold for money.
The standard monetization model allows gamers to play for free anytime and anywhere. They only need to pay when they want extra things, such as exclusive avatars. However, the most common scheme for monetizing social games is selling time. As soon as the player loses free chips given at the beginning of each hour (or day), he or she can wait to receive the following free chips or pay and get them right now.
For example, the poker player who has lost all his chips faces a choice: he can sit a few dozen hands waiting for free chips or buy additional chips for real money. Research has shown that the temptation to save time is so great that people often pay, even if they understand they can not return their money.
Millions of gamers play social casino games and spend as much money as players who gamble for real money at online casinos. At the recent meeting of the International Masters of Gaming Law in Oslo, an Internet gaming expert, Melissa Blau, created a stir when she said that "whales" (gamers who spend a lot of time playing social casino games) spent, on average, $550 monthly. The news that people might spend up to $7,000 per year to play with no hope to win was fantastic. But when Blau reported that those who play for real money at online casinos spent on average the same $550 each month, the experts at the meeting sank into a reverie. It was astonishing. Players say that the best thing in the world is winning. But it turns out that the loss of money can bring the same pleasure...
Profit is generated, although the majority of people who play social casino games never buy chips. Caesars Interactive spokeswoman Seth Palansky said that about 96 percent of players of Caesars Interactive Casino, which dominated the market, did not pay a cent. But millions of people play at casinos! And even if only 4 percent of the players spend money, this 4 percent includes hundreds of thousands of people.
Revenue of Social Casinos
Social casino games occupy a unique segment of the gambling market, have a unique audience, and have diverse game mechanics. Of course, this growing market segment is facing its own set of problems, opportunities, and challenges.
The Lack of Transparency
Social games do not belong to the gambling category, and until recently, the authorities were not interested in them. Still, they are starting to attract the attention of regulators. Real casino games always have elements of a random number generator. The legislation establishes the minimum and maximum payout percentage.
For example, the payout percentage of a slot machine in Las Vegas should be at least 85%. At online casinos, this percentage is 95-98%. Social casino games may look like slot machines, but their mechanics are completely different. These games are never entirely random.
The payout percentage may vary even in the middle of the game session, i.e., you can start with 125% and finish with 75%. For these purposes, dynamic game balancing, which is used in social games, is used.
Social casino games can deceive players. Since these games are not regulated, they can easily choose any payout percentage. Indeed, events in social games rarely occur randomly. Social casinos do not want players to get bored and stop playing, so developers make games easier if the player is stuck at the same level or more complicated if the player wins too much. This is called dynamic game balancing. It is done automatically and aims at "hooking" players. Chances can not be changed in the middle of the game at real online casinos, but this happens very often in social games.
Of course, developers of popular social gaming casinos understand the importance of keeping the gameplay similar to real casinos with the same mathematical dynamics of odds to avoid distorting people's perceptions. However, the interests of owners of social casinos are slightly different because they need playability. So, one of the problems of social games is the "efflux" of players from social casinos to online casinos. Imagine how players "for chips" play games at social casinos, which look like a slot machine but pay 125% out.
It is clear that they win, like it, and finally, they try games for real money. What do you think? How much money do they lose until they realize the chances of real slot machines are lower? People have the impression that everything they have to do to win money is to visit real casinos and feed a slot machine with cash.
Therefore, this is a problem of a lack of transparency. Nowadays, social casinos do not inform their players that their games are not random. Now, the European Union will demand that social casino operators tell players that their games are not quite what they seem.
The Gamers' Age
Another problem is the inability to verify the age of those who play at social casinos. Facebook set the minimum age of 13 years for those who wanted to register, but it was not checked: people just needed to indicate how old they were.
Some reputable social casinos indicate a minimum age of 18, even though most online casinos for real money require that players be at least 21. But this is almost not verified. Technically, social casino games are not gambling.
Addiction
The nature of the game can lure unscrupulous operators to gain an extra advantage over players since operators of social casinos have an excellent knowledge of their players' psychology. When a player pays money once to continue playing after losing all his chips, it is easy to create the same situation again.
They make the game extremely attractive to this player so that he is always close to victory, but he will have to pay more and more to keep playing.
Demography and Other Statistics
The potential for the growth of social casinos is fantastic. About a quarter of all Internet users regularly play social games nowadays, and nobody laughs when experts predict that the number of such users will be one billion within three years.
IGT has studied the demography of six million users who play social games at DoubleDown Casino on Facebook or mobile devices.
"Being the world's largest online casino, we pay attention to the trends and inform the public that poker is becoming more attractive to a wider audience,"- said John Clelland, a global marketing vice president of Interactive Group. -" Poker is traditionally considered to be male game, but our data suggest that the number of female players is increasing at social casinos".
Poker is still one of the most popular games among the forty casino games offered by DoubleDown Casino. Research has shown that female poker players increased by 22 percent last year compared to a year earlier, and females spent about as much time playing free online poker as males. In addition, females made larger bets than males, and their average size for the game session was 25% higher than males.
Raf Keustermans, CEO of Plumbee, a manufacturer of social casino games, said that the average cost of developing a social casino game was about two million dollars, and the $10 million marketing budget is necessary to launch it.
Research on social game distribution in the United States has shown that about six million Americans, or approximately 2% of the population, play at social casinos.
The breakdown of visitors into groups depending on age is fascinating :
- Users from 50 to 59 years old.
- Users from 60 to 69 years old.
- Users from 40 to 49 years old.
For comparison, the average age of customers of brick-and-mortar casinos is 44 years.
The most popular gambling time is from 4 p.m. to 6 p.m., immediately after returning from work.
Conclusion
Social casino games occupy a complex space within the broader landscape of entertainment and potential risk. While they offer the allure of casino-style experiences without directly exchanging real money, their similarities to traditional gambling raise valid concerns. Key takeaways include:
The blurred lines:
- The design and mechanics of social casino games closely mimic those of real-money gambling, which can normalize and familiarize users with gambling behaviors.
- The potential for these games to act as a gateway to real-money gambling remains a subject of ongoing research and debate.
Potential risks:
- Despite the absence of direct financial losses, social casino games can still lead to excessive spending on in-app purchases.
- There are also concerns about the potential for these games to contribute to the development of problematic gambling behaviors, particularly among vulnerable populations.
The need for awareness:
- Increased awareness of the potential risks associated with social casino games is crucial for consumers and policymakers.
- Further research is needed to fully understand these games' long-term effects and develop effective strategies for mitigating potential harm.
Ultimately, social casino games present a nuanced issue that requires careful consideration. While they may provide entertainment for some, it's essential to acknowledge and address the potential risks they pose.
