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  • 1. Social Gaming in EuropeGünter SchmidSocial Gaming 2013, May 23 I Central LondonCommercial andLegal Analysis
  • 2. Action Adventure Arcade GamblingCard Family Hidden Object PuzzleSimulation Sports Strategy Trivia & WordGamblingSocial Game Genres2(c) Kapsner & Schmid, Brandl & TalosSource: Facebook App Centre (2012)© Pictures from Facebook App Centre (2013)
  • 3. Definition of Social Games• Games accessed via a social network account• Games– with symbolic rewards and– freemium access– via an established distribution network account– that require the player‘s permission and the use ofplayer links to a social graph for promotion,retention and gameplay3(c) Kapsner & Schmid, Brandl & Talos
  • 4. Who plays?© Picture: 123RF4(c) Kapsner & Schmid, Brandl & Talos
  • 5. The Average Social Game Player Is• female …• 40 years old …• US-American …• spends less than nickel a day …• in an hour of play …• … so what? Well, it depends …(c) Kapsner & Schmid, Brandl & Talos 5Source: Casual Games Association (2012); Morgan Stanley (2012); Lightspeed (2010)© Picture from 123RF (2013)
  • 6. Social Game Player GenderSource: Data from www.appdata.com (1 November 2012); own analysis6(c) Kapsner & Schmid, Brandl & Talos10%37% 41%63% 67% 68%74%81%95%90%63% 59%37% 33% 32%26%19%5%0%20%40%60%80%100%Top 11 - Bea FootballManagerTexasHoldEmPokerOkey CityVille Slotomania Words withFriendsBejeweledBlitzBubbleIslandMall World%ofAudienceMaleFemale
  • 7. Social Game Player Age7(c) Kapsner & Schmid, Brandl & TalosSource: Data from www.appdata.com (1 November 2012); own analysis35% 34%26%13%18%9% 12%7% 3%30%27%27%21%20%18%16%12%9%25%23%25%28% 23%27% 22%22%20%7%10%12%19% 18%21%21%25%24%2%4%6%12% 13%15%17%20%24%1% 2% 4% 7% 8% 10% 12% 14%20%0%20%40%60%80%100%Top 11 - Bea FootballManagerMall World Okey TexasHoldEmPokerCityVille Words withFriendsBubbleIslandBejeweledBlitzSlotomania%ofAudienceOver 5546 to 5536 to 4526 to 3518 to 25Under 18
  • 8. Social Game Player Location8(c) Kapsner & Schmid, Brandl & TalosSource: Data from www.appdata.com (1 November 2012); own analysis85%46% 43%20% 18% 17%10%15%54% 57%80% 82% 83%90%100% 100%0%20%40%60%80%100%Words withFriendsBejeweledBlitzSlotomania Mall World CityVille TexasHoldEmPokerBubbleIslandTop 11 - Bea FootballManagerOkey%ofAudienceOtherUS
  • 9. Social Game Player Profile by App(c) Kapsner & Schmid, Brandl & Talos 9* Reach measured as MAU (App) / MAU (App with highest reach); Texas HoldEm Poker with MAU of 33 m.** Stickiness measured as DAU/MAUSource: www.appdata.com (November 2012); own analysis0%25%50%75%100%% Female% >35 yrs.% US% Reach*% Stickiness**Mall WorldTop 11 - Be a FootballManagerTexas HoldEm PokerSlotomania
  • 10. Who pays?© Picture: Freewalls.net10(c) Kapsner & Schmid, Brandl & Talos
  • 11. Monetization by GenreSocial Gaming GenresRPG,Gambling,PokerHidden Object,Adventure,TournamentsPuzzle,Arcade,Caretaking,SimulationsDaily Average Revenue per User (US Cent)*1 2 3 4 5 6 7 8 9 10* Expected average daily revenue per daily active userSource: Social Gaming Report 2012, The Casual Games Association11(c) Kapsner & Schmid, Brandl & Talos
  • 12. Monetization by Player Segment>50 %25 %<25%% ofRevenuesARPUp.m.USD 1-5USD 5-10> USD 25% of AllPlayers95%-99%Free Players1% – 5%Paying PlayersSource: Social Gaming Report 2012, The Casual Games Association© Picture: 123RF12(c) Kapsner & Schmid, Brandl & Talos15 %25%-40 %45%-60%% of PayingPlayersModeratesIntenseOthersPlayerSegment(„Whales“)
  • 13. Monetization vs. Gambling* Source I: Values for average paying players for QIV 2011 taken from Zynga Inc. and bwin.party digital entertainment plc. Illustrative only.** Source II: Values for intense users estimated with ratios of 50% of revenues / 15% of paying players for Social Gaming and 80% of revenues / 10% of paying players foronline gambling. Values taken across all products and genres.0.5 m 243 US$ Intense Paying Players**Online Gambling Operator160 US$1.8 mAverage1,280 US$0.2 mIntenseSocial Gaming Operator3.5 m 73 US$ Average Paying Players*# of Paying Players in a Quarter Average Revenue Per Paying Player13(c) Kapsner & Schmid, Brandl & Talos
  • 14. Obvious issues© Picture: Andre Bolten14(c) Kapsner & Schmid, Brandl & Talos
  • 15. Who Needs Protection?• The vulnerable– Minors– Problem players• The consumer• The fair competition(c) Kapsner & Schmid, Brandl & Talos 15
  • 16. Potentially Problematic Apps• Targeting vulnerable players– Gambling Genre Social Games– Funnels towards real money gambling– “Always on” – mobile devices• Offering “payouts” of more than 100%• “Rigged” games and equipment• … but: what are the issues specificallyadhering to the social gaming versions?(c) Kapsner & Schmid, Brandl & Talos 16
  • 17. Gambling Genre Games …Slots Poker BingoBlackjack Craps KenoBetting Gammon Other17(c) Kapsner & Schmid, Brandl & Talos
  • 18. … Are Not Gambling …County /CriteriaElement ofChanceConsider-ation*Prize*Entrepren.ActivityPublicOfferAustria   X  n.a.France   X n.a. n.a.Germany   X n.a. Italy   X n.a. n.a.Spain   X n.a. n.a.Great Britain  n.a. X n.a. n.a.Malta   X n.a. n.a.18(c) Kapsner & Schmid, Brandl & Talos* Consideration and Prize in the sense of being money or money’s worth
  • 19. Game XYZ… As Prizes Are Not Money’s Worth!(c) Kapsner & Schmid, Brandl & Talos 19In-Game AccountVirtual GoodsIn-GameCurrencyPlayer BIn-Game AccountVirtual GoodsIn-GameCurrencyPlayer AOther Games,Goods orServices thatare Money’sWorthMoneyO.k.???K.o.
  • 20. Social Gaming as Funnel to Gambling?SocialGamingGamblingGenreSocialGamblingOnlineGamblingGenres Non-Gambling Gambling Gambling GamblingInformation Social Graph Social Graph Social Graph + SettingsUser Group Open Open Permeable ClosedUser acquisition Viral Viral Viral “Classical”Player Identification Yes Yes Yes YesIdentity Verification No No Yes YesAge Verification No No Yes YesMonetization Freemium Freemium Stake to Lose Stake to Lose20(c) Kapsner & Schmid, Brandl & Talos
  • 21. So ... Is This a Good Idea?(c) Kapsner & Schmid, Brandl & Talos 21* Pictures taken from Farmville (Zynga Inc., 2013) and screenshots of Zynga Plus Casino (Zynga Inc., Elektraworks Ltd. 2013); available only to players older than 18 in the UK.= Gambling Genre Social Gaming = Gambling= Simulation Genre Social Gaming• Redirect• Download• Registration• Pay-in
  • 22. But: “Licensing” Isn’t Everything(c) Kapsner & Schmid, Brandl & Talos 22© Cartoon taken from “The Far Side Gallery” (Gary Larson, 1984)
  • 23. Who must lead?© Picture: Andre BoltenIt s the industry,stupid!
  • 24. Five Steps to Self-Regulation• Disclaimers and warnings• Transparent information• Certification• Voluntary industry standards• Mandatory industry standards• … backed by empirical evidence!24(c) Kapsner & Schmid, Brandl & Talos
  • 25. Typical Protection Measures• Age limits• Time limits / clocks• Spending / staking limits• Self blocking• Dedicated help lines• Separate sign-on• Know your customer requirements• Third party verification(c) Kapsner & Schmid, Brandl & Talos 25
  • 26. Cautious Approach Advisable(c) Kapsner & Schmid, Brandl & Talos 26© Cartoon taken from “The Far Side Gallery” (Gary Larson, 1984)RegulatorOperator
  • 27. Thank you!27(c) Kapsner & Schmid, Brandl & Talos