Social casino is one of the bloodiest of red oceans, with excellent well-financed companies competing ferociously. The best path to success is to take a Blue Ocean approach. Blue Ocean is all about turning non-customers into customers, rather than competing for the same customer. You do this by looking at what you can remove from the existing product offering, what you can add, what you can increase and what you can reduce. This leads to a new offering that appeals to new users.

1. BLUE OCEAN OPPORTUNITIES IN THE RED
OCEAN OF SOCIAL CASINO
19 October 2015

2. Agenda
Background on me and Amaya
Blue Ocean Strategy Overview
Formulating a Blue Ocean Strategy
Tools
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3. LLOYD AND AMAYA
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4. Been there, done that
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• Merscom
• Playdom
• 519 Games
Start Up
• Merscom to Playdom
• Playdom to Disney
• Spooky Cool Labs to Zynga
3 exits
• Disney
• Zynga
• Amaya
Big Co

5. WHAT IS AMAYA & POKERSTARS?
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6. Canadian-based Amaya Inc. is a global gaming leader listed
on the NASDAQ and Toronto Stock Exchange. Amaya owns
and operates the world’s largest poker brands, PokerStars
and Full Tilt. Amaya brands lead the market not only in the
offline world, but also sponsor the most successful live tours
around the globe.
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Amaya: Global Gaming Leader
$1.45-1.57B2015 PROJECTED REVENUE
OVER $400MANNUAL FREE CASH FLOW
95 MILLIONREGISTERED CUSTOMERS
AROUND 71%MARKET SHARE OF THE ONLINE POKER INDUSTRY
24/7/365ONLINE SUPPORT IN 26 LANGUAGES
MORE THAN 1,750STAFF GLOBALLY

7. “PokerStars is the dominant player in the industry due to a passion for
delivering a high-quality, secure and authentic online poker experience to
millions of poker players around the world. PokerStars has been the leader
in establishing industry best practices in areas including e-commerce,
security, game integrity player fund protection, customer service,
responsible gaming and marketing.”
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PokerStars: The World’s Largest Poker Site
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140 BILLION
HANDS OF ONLINE POKER DEALT
12 LICENSESMOST IN THE POKER WORLD
2 MILLION
HANDS PER HOUR DEALT
$200M WONIN TOURNAMENTS EVERY MONTH
2.8 MILLIONS FANSAND FOLLOWERS OF POKERSTARS SOCIAL MEDIA
225,000 PLAYERS
WORLD RECORD FOR ONLINE POKER TOURNAMENT
$1 MILLION GUARANTEEDWINNINGS IN THE SUNDAY MILLION TOURNAMENT
$10 MILLION GUARANTEED
WINNINGS IN THE WCOOP MAIN EVENT
$1.36 BILLION PAYOUTIN TOURNAMENT WINNINGS BY THE END OF 2015

8. WHY BLUE OCEAN
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9. Blue Ocean Strategy
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Creating uncontested market space and
making the competition irrelevant

10. 9
Red Oceans vs. Blue Oceans

11. 10
Red Oceans vs. Blue Oceans

12. Critical for social casino
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Higher ROI competing in a Blue Ocean
High UA costs
And getting higher
Very competitive
Bloody red Billion dollar competitors

13. Lets start with an example
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14. Circus Industry
Declining industry
Expensive “Star”
performers
Competition not
limited to other
circuses but other
entertainment
options
Negative sentiment
about use of animals
in circuses
2 large players
setting the standard
(Ringling Brothers
and Barnum & Bailey
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Very Unattractive!!!

15. Relevant Factors in the industry
Price
Star performers
Animal shows
Aisle concessions
Multiple Show arenas
Fun & Humor
Thrill and danger
Unique venue
Themes
Refined watching
Multiple Productions
Artistic music and dance
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16. Redefining the circus
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17. Specific Actions
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18. Cirque du Soleil
Created a hybrid between the circus and the theatre
Retained the symbolic and glamorous aspects of
circus, such as the tent and the more breathtaking
aspects, such as acrobats
Incorporated more comfort, sophistication, elegance
and theatrical plots; this brought not only the richness
of theatre but a whole new demographic of customers
It looked across market boundaries and created new
ones
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19. FORMULATING A BLUE
OCEAN STRATEGY
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20. You must begin by reorienting
your strategic focus
from competitors to alternatives,
and from customers to
noncustomers of the industry
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21. Formulating a Blue Ocean Strategy
Reconstruct Market
Boundaries
Focus on the Big Picture,
Not the Numbers
Reach beyond existing
demand
Get the strategic
sequence right
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22. RECONSTRUCT MARKET
BOUNDARIES
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23. Look across……..
Alternative industries
Strategic groups within industries
The chain of buyers
Complementary products and service offerings
Functional or emotional appeal to buyers
Time
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24. Who are our alternative industries?
Console
games
Movies TV
Books Casinos iGaming
Blogs Travel
Traditional
Games
Sports eSports
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25. Strategic Groups in our Industry?
Console Gamers
Casino Visitors
Social Gamers
Real Money Online Players
Mobile Gamers
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26. Chain of Buyers
Who are the
purchasers?
• Players
• Parents
Who are the
influencers?
• Friends
• Partners
Who are the
users?
• Players They are
NOT
necessarily
the same
group
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27. 4. Look Across Complementary Products
Products are not used
in a vacuum
What is the total
solution buyers seek?
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28. 5. Look Across Functional or Emotional Appeal
• Some industries compete on
price and functionRational
• Others compete on feelings
Emotional
• Functional companies over
time become more functional
Rational to
emotional
• Emotional companies become
more emotionally oriented
Emotional to
rational
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29. 6. Look Across Time
Who has done it? Apple with itunes
redefining access to music
This is the MOST difficult one
Compare value the market delivers today to
the value that can be delivered tomorrow
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Insight into how a trend can change value to
customers helps find new market spaces

30. FOCUS ON THE BIG PICTURE,
NOT THE NUMBERS
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31. Strategic Planning
Most companies’
strategic planning
processes keeps them
wedded to red oceans
The process drives
companies to compete
within existing market
space instead of
looking for new market
spaces
Typical Process:
• Current Industry conditions
and competitive situation
• Discussion on how to
increase market share,
capture new segments or cut
costs
• Outline of goals
• Budgets and spreadsheets
• Output: a large document
where people spent time
filling in boxes and running
numbers instead of thinking
outside the box
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32. Alternative approach
Start by drawing a strategy canvas (value curve)
Unlock the creativity of a wide range of people within the organization
Open the company’s eyes to blue
oceans
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33. Reach beyond existing demand
Key component of
achieving value innovation.
Move away from:
• Focus on existing customers
• Driving finer segmentation to
accommodate buyer differences
(tailored offerings)
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Look to NONCUSTOMERS!!
Focus on commonalities in what buyers value!

34. Reaching beyond existing demand
Noncustomers
before
customers
Commonalities
before
differences
Desegmentation
before finer
segmentation
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35. Four Actions Framework
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A
New
Value
Curve
Reduce
Eliminate Create
Raise

36. Eliminate-Reduce-Raise-Create Grid
(Example)
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Eliminate
In-app purchases
Raise
Speed
Fun
Reduce
Paid user
acquisition
Create
Product Placement
Subscriptions

37. Drawing a strategy canvas
It shows the strategic profile of an industry by
highlighting the factors that affect competition
among industry players
It shows the strategic profile of competitors
identifying what they invest in strategically
It shows the company’s strategic profile
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38. Strategy canvas
Captures the current state in the known market space
Determine the important factors in the industry
(examples)
• Genre
• In-app ads
• In-app purchases
• Social Calls
• Real-World Elements
• Cross-Promotion Bars
• Product Placement
• Fun
• Platforms
• Time Killing
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Reorient your strategic focus from:
• Competitors to Alternatives
• Customers to Noncustomers

39. Potential canvas for social casino
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40. 3 characteristics of a good strategy
New Value Curve
should have FOCUS
Divergence
Compelling tagline
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41. Thank you
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Lloyd Melnick
lloydm@pokerstars.com @lloydmelnick Lloydmelnick.com