How do have the cake and eat it too? That is a question all people involved with player-vs-player skill games that feature a wagering element (such as online poker and daily fantasy sports) have to ask themselves.

The more skill the more appealing the game is to competitively inclined hardcore players. The less skill the more accommodating it is to players who predominately play recreationally and don’t want to or can do the upmost to maximize their chances of winning.
It’s fine balancing act made even more complex by factors like the need to stay within certain boundaries in order to avoid (or abide by) regulation.

In recent weeks DFS has come under fire in the US both for sharing so many characteristics with luck-based (from a regulatory perspective) and illegal sports betting and, at the same time, for offering too big an edge to a small minority of predatory players.This is an ugly little pincer trap. Veer to the left and you smash into the anti-gambling lobby. Veer to the right and you risk ruining the fundamentals of your business as disillusioned depositing players depart.

The way out? Don’t worry so much about how big the edge in your game might be. Worry about how it is served, presented and felt. In the past I have argued that concerns over a growing skill gap in online poker are largely misguided. I think the same is true for DFS.
You can keep the this-is-luck lobby benched while at the same time preventing vital depositing players from leaving the pitch. But in order to do so, you have to figure out how to craft what I call functional loss experiences. I say ”functional” because I want to avoid assumptions like ”oh, losses have to be made more pleasant” or ”players have to lose more slowly”. Even the most brutal of losses has its uses – if it’s dished out properly.

In an environment where it is possible to gain a considerable edge, a lot of players players will suffer continuous losses. Your job is to make those losses feel meaningful and to ensure that games and contests happen on terms that those players agree with.

LOSS MANUFACTURING

You’re in charge of a loss factory. An outlet for losers. People with other things on their shopping list may step through your doors, but they will leave with a can of whop-ass nonetheless. They are buying that thing they don’t like but understand they need. They’re replacing that expensive gadget that just broke for no reason. They thought they’d only have to pay half price but find out the discount is for VIPs only. On the way out another customer berates them for even entering the store.
Manufacturing losses is an uphill battle for customer satisfaction that you can never truly win. But you can get ahead of the store next door. If you learn how to shape and craft meaningful and functional losses.

Experiences aren’t formed squarely by facts and reality. Ultimately it is our perceptions of things that mould our experiences. In a world of math and data this notion sometimes gets lost. Recreational players of games and gamblers aren’t driven by rational thought. If they were they wouldn’t do it. Irrationality is what allows us to get something out of an activity that rationally does not make that much sense.
Poker offers the perfect example of the divide between perception and reality. Few players have not, at some point, felt that the game is intentionally rigged against them. The wrong board. A gut-wrenching turn card. A devastating one outer river. One after the other creating a seemingly unrealistic stream of bad luck. No T&C small print, rule clarification or certificate from an independent auditing house will do much to close that gap between perception and reality.
In order to craft functional loss experiences, you have to remember this. Always.

Ok, so what’s a functional loss experience then?
It is a loss that occurs as part of a motivating narrative which makes losing natural and contextually meaningful. Some examples:

The teaser loss. Oh, I was so close. I just need to play one more time to get over that last hurdle.
The informative loss. I may have lost, but boy did I learn from it. Now I want to apply my newfound knowledge.
The dead last loss. Ok. So that’s embarrassing. I need to prove I’m not THIS bad.
The quick loss. Ok whatever, it’s not like I really tried. See what happens when I do.
The progression loss. I may have lost but I gained loyalty rank; was awarded access to a new game or qualified for a new promotion.
The superstar loss. I took on the best of the best. Sure, I lost but it will obviously be much easier when I face weaker opposition now.
The unlucky loss. My lineup was great. Not in a million years will my quarterback pick fumble like that again. I just need to put together an equally good lineup again..

All of these losses happen in a context that provides motivation for why I should try again despite having lost.
On the other end of the spectra you find the dysfunctional losses that power churn. Finding out that you were at an information disadvantage (regardless of whether or not you took full advantage of the information you did have at your disposal). Feeling like a fool for not having understood the interface or the rules. Sensing that your not playing against humans. Thinking you’re good and not getting close. Watching the game and seeing your lineup’s score skyrocket just to find out you’re still miles behind. Having all your hard work spoiled by a cancelled contest. Finding out that it was essential to read the small print.

Losing $50 to a suck-out does not feel the same as losing $50 to a bluff or a call based on a computer generated prediction of what hand you are likely to have. Being busted by a bragging douchebag does not feel the same as being busted by some average Joe. Losing because your quarterback had a bad day does not feel the same as losing to a bunch of data miners exploiting weaknesses in the pricing algorithms.

Thinking. Feeling. Sensing.
Their perception is your reality.  Your hope of serving all players glorious winning experiences is their hope of of winning at least once.
You can’t control who wins. But you can control conditions under which most players will lose. I hope the above examples help show why and how to do it.

With sites recklessly racing to offer the biggest guarantees and juiciest games it is easy to think that the best site is the one that offers the best winning experiences. I happen to think it’s often the one that offers the best losing experiences.
Some players experience winning. All players experience losing.
Why gamble on the former?