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IN-DEPTH 30 May 2018
Matt Davey: Welcoming a new digital dawn
After one of the gaming industry’s biggest acquisitions in recent years, GI sits down with Scientific Games’ Chief Executive, Digital, Matt Davey to discuss the new division he will be spearheading and how this new gaming conglomerate will strive to dominate the digital market
By Gambling Insider

You have recently taken over as Group Chief Executive, Digital. How has your first month at the helm been?

It’s been an exciting journey so far. There is substantial potential for the new Digital division to drive the growth of the larger Scientific Games organisation.

Newly launched at ICE, SG Digital as a division is poised to lead the industry in online gaming and sports betting. Together, we are working collaboratively to enhance and fully capitalise on our complementary offerings to ensure we continue to support our customers’ business growth.

The acquisition of NYX was a landmark deal for the group. How will the combination affect both entities, both immediately and throughout 2018?

Starting now, the SGI B2B business and NYX have been combined to form a leader in digital gaming and sports: SG Digital.

Our customers will now benefit from the expansion of our product portfolio of real-money gaming platforms and content. Our library has expanded into a combined offering of player-favourite titles and an expansive library of amazing licensed brands. Customers and players can expect to see more world-class content from our nine game studios.

The NYX OpenBet platform is also an impactful proposition for existing SG customers. Its leading technology has incredible potential as more jurisdictions begin to legalise.

SG can now leverage the NYX third-party programme that makes 2000+ games available to operators for their players on our reliable, award-winning gaming platforms.

Our employee base has increased to over 1,300, empowering large-scale innovation, product improvement, better customer service and new content development.

SG just launched its first games in Italy at the end of 2017. How did this come about, and do you think Italy will become an important market for the business?

Italy was a natural extension of SG’s existing real-money business. NYX entered Italy in 2016 with the acquisition of Game 360, one of our nine gaming studios. It is an important market for the combined group and we are committed strategically to deliver our newly expanded portfolio to the Italian operators.

The SG Digital strategy team constantly seeks out new markets that align with our product offerings and monitor the status of where they are in the regulation process. It’s important to be one of the first, most trusted providers in any new digital jurisdiction.

Every new geographic demographic for us is an opportunity to learn about how players differ between regions, thus enabling us to create engaging games for the wider population. Italy is a great example of a market that will drive revenue and provide feedback to enhance our products for players globally.

Speaking of new markets, Colombia has recently legalised online gaming – is this a jurisdiction you think will bring benefits for SG?

As with Italy, we view any newly regulated market as a potential opportunity. Colombia is particularly intriguing as the Latin American market represents a new market to learn player preferences and to expand SG Digital’s global reach for our customers.

The popularity of social gaming has derived significant revenue for SGI; is this something you plan to build on in 2018?

Our SG Universe product suite, which includes the Play4Fun social casino, is a key pillar in our B2B product offering. The SGU suite brings our games to players whenever and wherever they please, and it is particularly popular in markets where real-money online gaming is not yet legalised.

The B2C social aspect of Scientific Games is now its own division, with SG Digital focusing on B2B interactive offerings. There will be a great deal of collaboration between digital and social, each contributing a wealth of knowledge to, contribute for our customers’ growth and player enjoyment.

How do you expect the world of sports betting to evolve over the next few years?

OpenBet is the leader and is well known for being one of the most stable and reliable sportsbook platforms in the industry. The market for sports-betting products is large, and we’re already a leader in the space. The sports-betting community is focused on the potential legalisation in the states, which would instantly expand opportunities and ignite innovation and growth within the existing sports product portfolio.

What do you think of the growing number of skill games now on the market? Will this form of gaming ever take off?

Skill-based gaming is an intriguing concept and will certainly become a subcategory in the gaming space. Overall, we see that digital distribution has surpassed the growth we’re seeing in comparison to distribution through land-based operations. Within the current spaces in which SG Digital operates, overall, there’s plenty of opportunity for skill-based games, and I expect that the skill game land-based and digital distribution channels will begin to merge going forward.

What do you think about the entry of traditional computer games companies, such as SEGA, into the market?

Traditional and console game creators have a distinct perspective on what makes a game fun to play. I’d be curious to see how their knowledge translates into the gambling industry. Companies like SEGA can jumpstart innovation on a massive scale.

As part of a longtime manufacturer in this space, SG Digital will continue to adapt to new player needs and view any new competitor as an opportunity to improve our portfolio.

Do you have any non-financial targets for the year?

Strategically speaking, the internal focus is a fully functional and integrated SG Digital team by the end of 2018. We look forward to leveraging the combined skill of these two companies to enhance and expand our product portfolio for our customers as SG Digital.
IN-DEPTH 4 September 2019
Virtual reality: Creating next-gen experiences for players

Singular CEO George Shamugia discusses a new revenue stream for casino operators

The competition in online gaming is intensifying, with players becoming more and more demanding. In some markets, single-customer acquisition costs can reach up to €400 ($440) alongside growing churn rates. Furthermore, the online gaming sector struggles to attract one of the most lucrative groups of players – millennials. The experience provided by casinos no longer appeals to the younger generation.

On  the other hand, the video gaming industry perfectly understands the needs of millennials and by introducing elements of luck in their games offers the best of both worlds. With the launch of loot box systems and Grand Theft Auto’s in-game casino, we have seen their first successful steps in targeting the online gaming sector. GTA V online, with 33 million active players, recently opened an in-game casino, where players gamble real money on games such as poker, roulette, slots, etc. As a result, churn users returned and GTA Online reached the highest number of active players since its launch in 2013.

The online gaming industry has almost fully utilised the potential of the mobile medium. The time has come to look for new, innovative ways of delivering a next-gen experience to customers.

The potential of VR

Could the next big thing for online gaming be a fully fledged virtual reality (VR) casino delivering an immersive experience and limitless new opportunities?

Although not widely adopted yet, VR has a sizable number of customers. Analysts predict it’s poised for explosive growth to become mainstream in about five years. According to market intelligence firms, the VR market will be worth $117bn by 2022, and according to Juniper Research bets made through VR will reach $520 billion by 2021. Upcoming 5G mobile network technology will propel VR’s mass adoption by allowing the development of fully portable untethered and affordable VR headsets.

Different level of social interaction

The captivating nature of gambling comes from its social aspect. Unfortunately, personal interaction is widely missing from online gambling sites. VR technology creates multiple opportunities to bring back and even enhance that social moment. The ability to connect with other players is one of the main reasons behind Fortnite’s popularity. This form of co-experience is the next generation of entertainment. Research conducted by Facebook has found participants spend more time on VR compared to any other medium. This directly translates into increased profits for casinos.

Pokerstars has made efforts in this direction by implementing Voice UI. Instead of using hand controllers to make a call, pass, or raise, players give voice commands.

Another opportunity for bringing in the social element are the players’ avatars. They enable players to build their identity reflected in the avatars’ appearance, but also the avatar's social, competitive and community status. For instance, players are willing to pay real money for virtual drinks at the bar. Operators can offer these social touchpoints for free to VIP customers as an act of appreciation.

VR also brings a new dimension to customer support. Customer support can also be represented with avatars to assist the player in person. The social moment increases the LTV of players and contributes towards lower churn rates.

Rethinking game design

VR is a way more capable medium than a 2D mobile or desktop screen. Instead of copying the existing online experience, games must be redesigned from the ground up for a competitive advantage with VR. For example, a VR slot game can become fully immersive by teleporting the user into the slots’ world of Ancient Egypt. Next, enrich the experience with high-fidelity graphics, realistic spatial sounds and animations. When betting on virtual race cars, the user can be teleported inside the car he/she made a bet on and experience the race firsthand.

New revenue streams

VR casino lobbies create new revenue stream opportunities: ad placement of brands on the venue walls, company logos decorating the bar etc. This kind of branding is not intrusive in the VR space and feels natural from the user's perspective. VR also gives users the ability to change venues from a Las Vegas casino today, to Macau or even Mars casino, the very next day. The dynamic and diverse experience increases retention rates.

The majority of profits for online gaming operators come from their high-roller players. Although they represent a small subset of active players, an operator can launch a separate VR casino brand for them. Providing exclusive VR gaming experiences to high rollers/VIPs, the operator can minimise churn and maximise VR efforts for these player demographics.

The catch with VR is to focus on quality, rather than scale. The target audience might be limited yet, once these players experience it, they will become ambassadors for your offering.

Surely, the opportunities and possibilities offered by the VR medium truly exceed anything offered by mobile and desktop. VR is a new frontier not just for gaming but for every industry, and it’s exciting to see where it takes the industry and what kind of innovation it brings upon us.