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May 8th

Closing the gap between gambling and gaming

Posted by with 3 Comments

On March 24, during the GIGSE conference in San Francisco, Dean Takahasi published an article on Venturebeat titled “Real online gambling and social network casino games are on a collision course.”

While I was not able to attend GIGSE, the article, based on what I have heard and read from the event, seems to sum up one of the key takeaways from GIGSE.

The always readable betable blog followed up the article with one focusing on what social gaming companies can do to protect their turf as this foreseen clash between the gambling industry (RMG) and the social media gaming (SMG) industry intensifies.

As one who has been talking about the social games side of the poker industry as a force to be reckoned with for a long time and who has been publically advocating as well as criticizing various aspects and principles of their businesses – just as I have done with RMG poker – I’m obviously delighted to see the industry’s attention turning in this direction. And I agree that anyone content on only playing on one side of the court better arm up.
There is a lot potential in regarding RMG and SMG as separate business verticals based on the same game that can be leveraged by individually crafting the two to complement each other. But I think convergence  / fusing the two into one may pack an even more powerful punch – especially, but not exclusively – when considering a game like online poker.  That’s why I’ve spent the last twelve months or so trying to figure out how to do it.
Given that launch of one of those initiatives I’ve had the pleasure to work with is on the horizon (as in we’re in beta with a ton of releases ahead of us), this seems like a good time to share some of my thoughts.

 Mind the gaps!

For two things to collide there must be a gap between them. And there are a lot of gaps between online gambling providers and social games developers. A technology gap. An accessibility gap. A legality gap. A monetization gap. A social acceptance gap. And so on. Each one is worthy of an in-depth look. But the one gap, or potential gap, that intrigues me the most is the experience gap and the causality between it and the other gaps. Is the allure and experience of playing social casino or poker games fundamentally different from the real money gambling experience? Does it necessarily have to be this way? Is it merely a cause-and-effect result of other insurmountable gaps?

For poker, which is the focus of this piece, there is another gap that supports the view that the two experiences are fundamentally different – namely the demographics gap. The Zynga Poker demographic (dominated by middle aged women) is radically different from the young male dominated real money poker demographic.

This is a conundrum that the RMG poker industry is dealing with right now as it looks to social poker solutions to establish bridgeheads on US soil in preparation for whatever legislative RMG regime will ultimately emerge.

What’s the point of launching a social poker site when it will cater to the players least likely to convert to real money players?

I find it likely that this is one of the main reasons why merger activity has been much slower on the poker side of social gaming than on the casino side. Apart from iPoker’s expected grab at Viaden and Chili Gaming unexpected deal with Bally’s not much has happened. Yet.

But this will change. It will change when companies figure out how to create business symbiosis through offering  the two different, but complementary, experiences under one umbrella. And it will change when companies understand how the RMG experience can be adapted to an SMG mould.

Competing with competition

Once you understand what drives the young male group to real money poker play I believe it is perfectly possible to wrap that in social gaming context and get the best of both worlds. And one such aspect of play that you’re bound to find attracts this demographic is competition. Exploding e-sports industry anyone?

Competition is a cornerstone of poker’s success as a gambling game. With its almost uncanny blend of skill and fortune it is close to being the perfect casual as well as hardcore competition game. But the competitive elements of poker, while fundamental to the game’s mechanics, can’t be taken for granted. You have to nurture them. And this is one of the areas where I’ve argued for years that the RMG poker has failed. Instead of constantly evolving poker as a competitive game, it has just made it high on prize money.
And even staring at paint dry is somewhat rewarding if you can win a million bucks doing it.

At the other end of the gap it’s hard to claim that Zynga Poker derives much of its success from a fiercely competitive experience. Again, since poker is an inherently competitive game, even Zynga Poker players get a taste it, but their game play is predominately driven by easy access, a friendly and social presentation and… addiction generated by exploiting certain behavioral mechanisms in the brain.  SMG space simply lacks an alternative that retains more of that competitive drive.

When decoupled from the element of real money gambling, I believe poker as a game of competition – if given the attention it deserves – can stand on its own two feet, join the ranks of other competitive video games and be operated under the freer reigns that govern video games and sweepstakes. And that is what I hope to make happen through my involvement as acting Head of Poker for Playhem.

With Playhem Poker we intend to do everything we can to do poker justice on the e-sports scene. We want to take competitive poker to new level where players will be losing their egos left, right and center but no one will be running up any debt.

By utilizing a freemium business model but avoiding the increasingly popular pay-2-win monetization approach (which offers the game for free but permits players to pay for competitive advantages) we believe we have an unprecedented opportunity to establish a branch of poker in the business of crowning a new breed of online poker champions on a truly level playing field.

The path of competition however is not open exclusively to online poker.  I think a game like the recently launched PvP blackjack game vsjack.net could also utilize a similar business model in order to capitalize on the benefits of positioning your game outside the realm of gambling. And I’m sure there are plenty of other exciting initiatives out there trying to competitionify gambling.  If you know of one, I’d love to hear about it.

I see yours… 

One of the observations I have made as the SMG and RMG industries interact is that the two are excellently positioned to point out each other’s weaknesses. I’ve heard SMG folks balk at the scaling and flexibility limitations of RMG platforms and I’ve been part of smirking at SMG and video game companies as they desperately try to deal with what happens when you start to monetize core elements of gameplay or gamblifies your game. Goodbye devout fans. Hello money grabbing piranhas.

It is only good for the games that a certain touch of skepticism replaces the initial euphoria as the two industries get to know each other. But I certainly hope that such skepticism will not prevent either convergence or collision from taking place. It’s too early days to point out success stories, but surely it is just a matter of time. I obviously hope that Playhem will be one such example, but if so, it will certainly not be the only one.

In the mean time I wish everyone out there working hard to bridge all these gaps intent on innovating gaming and gambling the best of ehh… luck?

 

 

  1. Joakim Nilsson
    May 8, 2012 at 7:37 pm

    Looking fwd to hear more about your startup, keep us posted!

  2. Kim
    May 8, 2012 at 8:33 pm

    Thanks Joakim!

    There are links to it in the article but considering that the product is in beta and we are like five critical releases away from being out of that beta I don’t mind people missing them :-) Soon enough though. For someone used to working with cumbersome real money gaming platforms it’s amazing to work with something truly agile.

  3. Tyler York
    May 9, 2012 at 1:18 am

    Hey Kim,

    Thanks for linking to us in this article (I’m glad you find it readable :) ). You did a great job taking the points brought up by GiGse and presenting your own insight. I agree completely that the key difference between success and failure for companies looking to bridge this gap is how they “mind the gaps” between the SMG and RMG spaces. Mastering user perception and de-fanging “gambling” in player’s minds is going to be paramount to any brand’s success in this field.

    Tyler

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