sbtech2.jpg
sbtech2.jpg
sbtech2.jpg
CLOSE
× Gambling News In-Depth iGaming Calendar Connections GI Friday Trafficology GI Magazine
GGA 2019 AffiliateCon
IN-DEPTH 20 August 2018
The online gaming industry is going up, up and away
Due to the unprecedented growth in the online gaming sphere, Ben Jones, Marketing Executive at ICS-digital LLP, examines how this sector has the potential to shape the future of entertainment
By Ben Jones

RECENT GROWTH OF ONLINE GAMBLING

In the past decade, the world of online gaming has expanded massively. The industry was worth $41.78bn by the end of 2016 and that’s set to hit the $80bn mark by the end of 2020. Just to put it in perspective, 11% of total internet traffic now comes from online casino players. The UK’s remote gambling sector has seen a 300% increase since 2014’s new legislation, reaching nearly $6.7bn by the end of last year.

But it’s not just the remote-betting industry that has seen an increase, non-remote betting, which includes bookies and casinos, has also seen a strong improvement in recent years. Bingo halls being the only non-remote gambling sector to not see some form of increase.

You would assume that the huge increase in remote gambling is due to more and more punters favouring the online methods of gambling and making the shift away from traditional methods. But this isn’t the case; we can see that both industries have seen a strong increase in numbers, showing that online gambling appeals to more than just those who have never gambled as a new, convenient and engaging way to place wagers. Existing non-remote gamblers are also embracing the digital age, whilst still enjoying the experience of visiting non-remote betting outlets.

SO EXACTLY WHY HAS ONLINE GAMING BECOME SO POPULAR?

When we look at the global gaming industry as a whole, it’s no surprise that the online gaming industry has seen such huge growth. By the end of 2017, the global gaming industry hit a record breaking $107bn, which is more than we spent on film and music for the year combined.

The main reason for gaming’s huge increase in popularity is down to huge technology advancements in the last decade. It seems pretty straightforward, but the better the technology gets, the better the gaming experience gets. One huge factor to online gaming’s increase in popularity is the monumental advancements in mobile technology. As the technology improves, connectivity and accessibility also improve. This allows more players to take part in remote gambling from anywhere in the world, providing they have signal.

Gaming has very successfully made the migration from console to mobile in recent years, with mobile gaming becoming the fastest growing platform in the industry, making up nearly 45% of the global gaming market, which sat at a cool $47.5bn by the end of 2017. This is a huge increase of 20% in the previous year. If you think that the average person spends up to 40 hours a week on their mobile device, it is much easier for developers and remote gambling brands to market and attract attention from new players through a mobile device. Online gambling used to be perceived as a desktop-only way of gambling. However, developers are now creating mobile-only applications as we switch to a more mobile-focused world of online gaming. Players being able to place wagers whenever and wherever has played a huge part in the popularity; pundits can put a last-minute wager on their favourite team or even get given new odds and bets halfway through a game.

As mobile gambling becomes more and more popular, the saturation of the online gambling market also helps improve the industry. Essentially, as more and more people join the industry, we see player pools increase and payout rates improve. Another huge contributing factor is that you are now able to place a wager on more or less anything. Whether you’re a football fan, a royal family enthusiast or just really into politics, you can place a wager on practically any outcome in popular culture. It is no longer just sports fans who are taking part in online gambling with the premise of winning money while still following a genuine personal interest. Non-remote gambling sectors simply can’t offer this level of variety or convenience.

Another really important factor to consider is the increase in female online gamblers in recent years. Back in 2015, the female gambling population accounted for just shy of 50% of users in the UK. Many studies have shown that women not only prefer to gamble in private, but they also prefer a mobile device. So, they can play comfortably, confidently and feel they are less likely to be intimidated by male players. Some huge gambling brands have even created female orientated platforms such as 888Ladies and Pink Casino to help drive this continuously emerging market.

GAMBLING AS A FORM OF ENTERTAINMENT

Gambling, whether remote or non-remote has never been seen as such a genuine form of entertainment. This is heavily down to the strong emotional connection between the player and the game. You can’t interact with traditional forms of entertainment - for example, you can’t dictate the plot line of a movie or a piece of music.

But, when it comes to online gambling, players can place wagers on genuine interests and actually create their own narrative. The journey and experience are solely based on the players’ decisions and talent, with them becoming emotionally invested in the outcome and this is magnified the minute a wager is placed.

Online gambling also appeals to a wide range of demographics. About ten years ago, you would think that it was majority adult male sports fans that would place wagers. But, as mentioned earlier, not only can you place bets on practically anything, but remote gambling also appeals to a wide range of people. The older generations are becoming more and more comfortable with technology and are enjoying using mobile devices more and more, so the concept of online gambling is becoming less and less intimidating. This allows communities to build where people sometimes spend whole days with friends in online bingo halls and casinos. Gambling is also becoming more and more appealing to the younger generations. It’s an exciting premise being able to win money via your favourite sports team’s performance, whilst still being able to enjoy the match as a spectator. Younger audiences have always been known to be very understanding of new technologies, with most 11-year-olds now being able to navigate a modern smartphone very easily. So, it is no surprise more and more young adults are starting to get involved with online gaming.

It is these huge advancements in technology and a frankly huge variety of gambling that is allowing the online gambling industry to thrive. Thanks to new emerging markets and the mass appeal of online gaming, the industry will continue to grow and become a regular form of entertainment.
DISCUSS THIS ARTICLE
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.

READ MORE
PREMIUM CONNECTIONS