Casinos: The New Gold Rush For Developers? | Darion Lowenstein

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Delivered at Casual Connect Tel Aviv 2016. Casinos have been fighting an age crisis: 21-45 year olds generally do not gamble. Gamblit Gaming has been leading the charge to bring mobile and arcade style games onto the floor with products that appeal to them. With announcements like Jetpack Joyride, Into The Dead, and Catapult King, Gamblit CMO and gaming industry vet Darion Lowenstein will discuss the benefits and difficulties of taking hit mobile games into the casino world in this honest, developer-targeted talk.

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Casinos: The New Gold Rush For Developers? | Darion Lowenstein

  1. 1. Casinos: The New Gold Rush For Developers? Darion Lowenstein Chief Marketing Officer Gamblit Gaming
  2. 2. Why this dude? • Currently Chief Marketing Officer at Gamblit Gaming, Publisher of casual and arcade style real money games for mobile & land based • Supernerd, graduated high school at 14 (#foreveralone) • Over 20 years in the game industry (scars to prove it) • Internal & External Producer/Director at Rockstar Games, Scopely, Electronic Arts, and Activision • 10 #1 mobile games, 14 top 5 console games including Tribes, Army Men, Red Dead Revolver, Midnight Club, Table Tennis, Transformers: War for Cybertron, and on mobile Simpsons Tapped Out, NBA Jam, & Mini Golf Match Up • Once played Mario Kart till 6am to get a gold on Rainbow Road 150CC “NOM NOM NOM”
  3. 3. THE GAMING INDUSTRY IS SUBSTANTIAL N. America $93 billion Europe $49 billion Rest of World $16 billion Asia $70 billion LatAm $6 billion Real Money Gaming Industry (Land-based and Online) The Real Money Gaming Industry is a ~$235 billion market N. America $28 billion Europe $37 billion Rest of World $3 billion Asia $43 billion LatAm $4 billion Lottery Industry N. America $1.5 billion Europe $0.6 billion Rest of World $0.2 billion Asia $0.6 billion LatAm $0.1 billion 2013 Social Casino Industry N. America $122.5 billion Europe $86.6 billion Rest of World $19.2 billion Asia $113.6 billion LatAm $10.1 billion Real Money, Lottery and Social Casino Gaming Industry The Lottery Industry is a ~$115 billion market (net win for lotteries) The Virtual Currency casino industry is a ~$3 billion market The combined industry is a ~$353 billion market Source: H2 Global Gaming Summary (excludes sports betting and online poker) Source: H2 Global Gaming Summary Source: SuperData Social Casino Metrics Note: Daily fantasy sports and online poker are not included
  4. 4. THERE IS NO INNOVATION TODAY 1 2 3 A B C X Y Z Slot machine innovation has been limited to cabinet and graphics only, but the fundamental game play is still the same– bet and watch.
  5. 5. THE DEMOGRAPHIC IS CHANGING Traditional Mainstream Casino Player…  Primary market is 50-65  Skews female  Grew up with typewriters  Learned computer skills as an adult  Experienced slots though physical reel games The New Market of Casino Visitors…  Grew up in the digital age  Mobile device centric  Plays some genre of computer/mobile/console games  Demands high-fidelity multimedia experiences  Highly tech-literate 39% 34% 36% 28% Age 21-35 Age 36-49 Age 50 -64 Age 65 & Over Casino Visitation (% of each age group) Source: 2013 State of the States AGA Survey of Casino Entertainment 21-34 35-44 45-54 55+ Slot Machine Play by Age Group – 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100+ U.S. Population Estimates Source: U.S. Census Bureau as of July 2013 Source: Segmenting slot machine players: a factor-cluster analysis
  6. 6. Casino Visitors Age 21+ Who Play Slots (“Classic Casino Population”) U.S. Casino Visitor Population Growth vs. Classic Casino Population Decline Casino visitors age 21-49 that do not play slots (“Next Gen Gamers”) (80%) (60%) (40%) (20%) – – 5 10 15 20 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 Cumulative%Change MMsofPeople Classic Casino Population Cumulative % Change – 20% 40% 60% 80% – 20 40 60 80 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 Cumulative%change MMsofPeople Next Gen Gamers Cumulative % Change – 20 40 60 80 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 MMsofPeople Classic Casino Population Next Gen Gamers Millennial and Gen-X 40 Casino Visitors That Do Not Play Slots (“Next Gen Gamers”) Are Supplanting the Classic Casino Population Next Gen Gamers Must Be Engaged In Order To Sustain the Existing Market … And They Represent a Tremendous Opportunity – $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 AnnualU.S.Revenue($B) Classic Casino Population Engaged Next Gen Gamers Residual Next Gen Gamers Annual United States Revenue Forecast vs. Classic Casino Decline Annual United States Revenue (assuming full monetization of Next Gen Population) 0% 5% 10% 15% 20% 25% 30% 35% – $5 $10 $15 $20 $25 $30 $35 $40 20142015201620172018201920202021202220232024202520262027202820292030203120322033 %NextGenEngagement AnnualU.S.Revenue($B) Classic Casino Population Engaged Next Gen Gamers Cumulative Next Gen Engagement Required THIS SHIFT PUTS THE CLASSIC CASINO MARKET AT RISK
  7. 7. • Of 21-35 year olds in the USA, 35% visit casinos. However, the wagering rate of that group is only 2%. • Barcades with classic arcade games are popular with 21-45 year olds • Arcade chains like Dave & Busters that combine games & booze are growing MO MONEY MO PROBLEMS
  8. 8. In summary - Globally, land based casinos are a $159 billion business (VS Mobile Games: $22 billion) • Nevada alone sees 42 million visitors to casinos per year • Slot machine revenue is down 12.5% from 2007-2015 • Casinos are desperate for new content and revenue streams • Your customer is already on the floor – UA is already done! CLEARLY, THERE’S A BIG A$$ MARKET
  9. 9. • Unproven market – what types of skill games will make it? • What companies attempting skill games will make it? • And will the slot companies come around? • Licenses per territory can cost $100,000-$1mm+ BUT WHAT ABOUT... PITFALLS?
  10. 10. • SLOW. 24 hour server side updates? Try 4 months • Regulatory reviews = the suck • Regulated hardware can be limiting • IP that’s too “kiddie” can be outright rejected • EVERY jurisdiction is different – per country, per state, and each requires individual game reviews • With Skill Gaming, can’t a pro just sit and #MakeItRain?!? BUT WHAT ABOUT... CONTENT?
  11. 11. SO WHAT ARE YOU DOING ABOUT IT? Obligatory stock photo usage
  12. 12. G-Sports™ • An e-Sports experience on the casino floor • New, hit PC & console games • Timed tournaments with cash entry • Based on Gamblit’s TriStationTM TriStation™ • Up to 3 players seated • Multiple game possibilities • Single player or networked game capabilities for tournaments • Appeals to players desiring longer time-on-device and involved game play Model G™ • Up to 4 players in bar or lounge heights • Multiple game possibilities • Multiplayer games available for either cooperative or competitive play • Appeals to social millennial and Gen X casual gamers WHAT’S GONNA WORK? OUR SHOTGUN LINE-UP Gamblit VRC™ • Immersive VR experience • Side betting for observers • Will first launch with the Brookhaven Experiment™ and HTC Vive™ technology Gamblit Poker™ • Up to 6 players compete against each other on a felt table • House-banked side bets & live buzzer provide additional excitement & profitability The Brookhaven Experiment is a trademark of Phosphor Games, LLC. HTC Vive is a trademark of HTC Corporation.
  13. 13. PARTNER CONTENT > PURE LICENSED CONTENT? © 2014-2016 Gamblit Gaming, LLC. All Rights Reserved. Gamblit and the “G” face are trademarks of Gamblit Gaming, LLC in the United States and/or other countries. Catapult King is a registered trademark of Wicked Witch Software Pty Ltd. Breakneck, Into the Dead, and PikPok are registered trademarks of Prodigy Design Limited. Jetpack Joyride and Halfbrick are registered trademarks of Halfbrick Studios Pty Ltd. The Brookhaven Experiment and Phosphor Games Studio are trademarks of Phosphor Games, LLC. • Known Games = Greater then brand slap • Primarily UI overhaul, core gameplay largely unchanged • Skill payouts on challenges, level goals, etc.
  14. 14. WHAT’S ALL THIS I HEAR ABOUT ESPORTS NOW, SONNY?
  15. 15. G-SPORTS CASE EXAMPLE ROAD REDEMPTION™ • An e-Sports experience on the casino floor • New, hit PC & console games • Timed tournaments with cash entry • Easy ramp up process for publishers/developers with hit games • Timing/Cost set by Casino G-Sports is a trademark of Gamblit Gaming, LLC in the United States and/or other countries. Road Redemption is a trademark of Paul Fisch in the United States and/or other countries.
  16. 16. IF IT WORKS IN AN ARCADE… YES! NO! Arcade gameplay! Fast & Easy to learn! Long to master! CONTROLS-SO-SIMPLE! Complicated! Saving progress! Difficult to learn! LONG tutorials needed! SO MANY BUTTONS
  17. 17. INTO THE DEAD™ CASE EXAMPLE Original Mobile Version Gamblit Gamblified TriStation™ Version Gamblit, the “G” face, TriStation, and the GBIT Skill Reward Points Box are trademarks of Gamblit Gaming, LLC in the United States and/or other countries. Into the Dead, PikPok are registered trademarks of Prodigy Design Limited.
  18. 18. + IN A PERFECT WORLD
  19. 19. Q & A Questions? darion.lowenstein@gamblitgaming.com

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