Is innovation slowing down for online casino?

By Gambling Insider

Gambling Insider assesses whether online casino innovation may be slowing down after more than two decades of sector development.  

Every industry is defined by moments of creativity. For the automobile industry, it was the first production of a Model T Ford in 1908; for the computer tech industry, it was the moment Steve Jobs presented the Macintosh computer in 1984; and for the TV industry, it was the launch of a little streaming service called Netflix in 2007. All of these products are not only innovative, but they have shaped the way their industries have developedAfter first breaking the mould, they became the mould for years to come 

The notion of gambling has been around since society began, but the sector has seen its own fair share of game-changing ideas. This was particularly true following the advent of the internet. The first real money hand in online poker was dealt in 1998 on Planet Poker, and since then the vertical has seen countless companies attempt to capitalise on this virtual world with new tournaments and social features. The same can be said for online sports betting since its first development in the early 2000s. The vertical has seen a long list of innovative additions to improve the customer’s journey, including cash out and bet builders.  

Of course, online casino isn’t exempt from the necessity of creativity. In fact, for an industry which relies on its customers continued excitement for profitability, developing new and interesting products is an absolute must for acquisition and retention As a result of this need for invention, the sector has come a long way since the first real-money wager was placed in an online casino in 1996. Countless companies now aim to gain market share in what’s a booming industry in regulated markets across the globe  

Up until now, this creativity has been clear to see. The sector first emerged with the ingenuity of companies such as Microgaming and CryptoLogic. Demonstrating the clear progress of the industry, early online casino websites were simplistic in contrast to the online casino sites we encounter today. The pioneers of this online casino space played a key role in developing software for games and powering customer transactions. Shortly, that technology was commonplace in websites across the world. 

Since then, there have been a number of bursts of creativity in the industry. Progressive jackpots, themed slots and multiplayer games have all made their way onto the scene. In addition, live casino now offers players a human aspect to their online play, with players able to place bets in the comfort of their own home through live streams. 

Despite the significant development of the space up to this point, as online casino markets begin to mature in certain areas of the world, is it possible that creativity could be drying up?  

This is something argued by Cristiano Blanco, head of gaming at Kindred, owner of 32-Red, Unibet and a number of online casino brands in various marketsSpeaking on an ‘Operators and Innovation’ panel during the CasinoBeats Malta Digital summit in late June, Blanco passionately voiced his concerns about decreasing levels of innovation in his industry.  

“We are reducing the line of innovation to fulfil our need to innovate, even if we are not being innovative,” commented Blanco. “In my opinion, taking a concept and refreshing it can be a different thing, or a unique thing, but the industry needs a wake-up call because we need to raise the bar of innovation a bit more.  What I am seeing in B2C at the moment is not a good picture.” 

The Kindred executive’s argument is not a new one. In fact, it’s one you’ll often hear confronted at industry events, both in pre-arranged panels and on the tradeshow floor. Although online casino has seen a significant level of development since its simplistic beginnings, that development seems to be slowing down in terms of creativity. There are a number of reasons that could be to blame for this, including both the saturation of gaming content and the industry’s consolidation as larger companies take a stronger grip of markets 

Blanco’s argument stems around a B2C reliance on gaming suppliers. Of course, when the online casino space first emerged, B2C companies would often employ in-house design teams to create their content. This allowed operators to create content directly catered to their own customers. While this might have been a more immediate source of innovation, in-house design is considerably more expensive than outsourcing games from suppliers - as a result, partnerships with suppliers soon became the norm. 

There are many new, passionate studios that are trying to break through with more creative concepts and aggregators that are committed to getting their games to market. The aggregation model provides an opportunity for independent studios to accelerate the rate at which they can launch content and reach critical mass. By leveraging existing commercial relationships and minimising the cost of trialling new concepts, it’s easier to test innovative ideas in a way that wouldn’t otherwise be cost-effective.

 

Now, suppliers regularly form content deals with operators to save them the trouble and cost of designing and producing their own games. Just this year, Red Tiger went live with 888 Casino in Spain and partnered with 32Red in the UK. Evolution Gaming recently sealed an agreement with operator Intralot to provide its live casino services across the globe. In the US, Scientific Games has signed countless supply deals with state lotteries and gaming operators, including Caesars Entertainment and the Montana Lottery in the past few months 

A reliance on gaming suppliers may have reduced the costs inherent in the design of games, but has this come at a greater cost to creativity? Blanco argues that B2C companies are reducing their expectations for innovation. In turn, this is allowing suppliers to label products as innovative when they are not so. He gives the example of a slot offering 23 pay-lines in contrast to the traditional 20 pay-lines offered by other slots. “That is not innovation,” Blanco said. “It might work better or not but it is just something different.” 

So what can the online gaming industry do to counter this apparent drop in innovation? 

For the larger operators who can afford to return to in-house design, B2C innovation could still be another way to counter this creative slump. Contacted for comment after his CasinoBeats Malta Digital event, Blanco told Gambling Insider that “times have changed.” While outsourcing games might once have been considered necessary to increase the number of games, Blanco believes game lobbies are now overcrowded with similar games. For him, in-house creation is the best way to cater games towards specific audiences while being truly innovative.  

Despite this, Simon Hammon, Relax Gaming chief product officeris still very confident in the creativity of gaming suppliers. Speaking with Gambling Insiderhe agreed that big suppliers may be contributing to market saturation by using tried-and-tested formulas for game design. However, he believes that plenty of smaller studios have the desire and ability to be innovative, they just need the opportunity. This requires financial backing and operator support.  

Hammon believes aggregators can offer a great way for new studios to achieve this support, effectively providing a cost-effective foot in the door. “There are many new, passionate studios that are trying to break through with more creative concepts and aggregators that are committed to getting their games to market.” he explained. “The aggregation model provides an opportunity for independent studios to accelerate the rate at which they can launch content and reach critical mass. By leveraging existing commercial relationships and minimising the cost of trialling new concepts, it’s easier to test innovative ideas in a way that wouldn’t otherwise be cost-effective.”  

As Hammon argued, aggregators can provide new studios an opportunity to launch original content effectively while expanding their customer base. But whatever the strategy, it’s clear that assistance is needed for innovative studios to avoid falling in with the mainstream. If they are not able to make ground with new designs, then suppliers will look towards game formats that have already proven successful, thus continuing the process of saturation. Hammon believes that for those daring to be creative, there are “massive returns for their investment in innovation. 

Red Tiger’s journey from small business to big industry player demonstrates an example of how investment in innovation can ultimately turn a large profit.  The gaming supplier’s name is often associated with true innovation in the gambling industry. At last year’s Global Gaming Awards, the supplier won the Casino Product of the Year category with its Daily Drop Jackpots Network. With this in mind, Red Tiger could certainly be considered to adhere to Blanco’s high expectations for creativity.  

It’s interesting to note that although Red Tiger is now a well-known and respected brand, it started out as a small studio in just 2014. The supplier has since climbed towards the top of the ladder. In 2019, games developer NetEnt agreed to acquire the company in a deal worth up to £220m ($288.2). Now, Evolution Gaming is looking to acquire NetEnt for a total of SEK 19.6bn ($2.1bn) after making an offer in June this year.  It can be assumed that Red Tiger’s 2019 merger with NetEnt had a large role to play in such a lucrative deal, proving Hammon’s theory that true innovation is still a profitable tool in the sector. 

Whatever the solution is to the industry’s innovation woes, now more than ever the creativity of the industry needs to shine as it moves forward from the debilitating effects of the pandemic. Undoubtedly, it will bring global financial consequences, but for a number of operators, the online casino space has provided a small semblance of hope amid global lockdowns. Rather than slow down, online casino has seen growth for the majority of companies over the first six months of 2020. Those who have been able to capitalise on this increase in activity have been able to mitigate the losses imposed on other verticals, such as sports betting.  

Now that online casino has been able to generate an increased audience, retention has never been so important. Operators are hoping to retain the growth in their online casino business as other verticals return, and there is no better way to do that than by introducing innovative and exciting products into the online casino space, the likes of which will keep the interest of players who might not be traditional casino fans.  It may be an overused cliché, but now is the time for the industry to start thinking outside the box.   

TAGS:

Share This Post



NEWS SPONSOR

More News

Tipico Group, the international sports betting and casino games operator, is one of the few fronters in line to buy William Hill’s European betting shops...





Helmet Guy of PlayAttack Affiliates discusses the decision to make third-party cookies a thing of the past in 2022, with major browsers set to drop them entirely. What ramifications will this...