This document summarizes the rise and challenges of the social casino market between 2010-2013. It describes how many small game studios entered the market during a "gold rush" period, but lacked the skills and funds to compete long-term. Today, the top 10 social casino companies control 70% of revenue, with large companies dominating. The document then provides suggestions for social casino companies to focus on regional markets, new game types, distribution partnerships, and options for entering real-money gaming, which is a very challenging space requiring large investments.

1. Social Casino 2.0
How to Survive and Grow in a
Hyper-competitive Market

2. RAF KEUSTERMANS
Co-Founder, CEO Plumbee
Board Director ISGA
Board Director Bonza Gaming
(Interim) VP Marketing Kobojo 2011
Independent Social Gaming Consultant 2010-2011
Global Marketing Director Playfish (EA) 2009-2010
Marketing Director EMEA Pogo.com (EA) 2008-2009
Head of Marketing Western Europe Unibet.com 2005-2008
Strategic Planner at BBDO, Grey and Publicis 1998-2005
www.plumbee.com
raf@plumbee.com
@raf_keustermans

3. The Great Social Casino Gold Rush,
2010-2013

4. What happened?
• M&A deals (Playtika, DoubleDown) and stories of high LTV
created a ‘gold rush’ in the social casino vertical between 20102013.
• Many small (casual) game studios pivoting to casino genre,
usually without fully understanding specific skills required
(mathematician, slots producer)
• Today: 350+ slots/bingo/poker games on Fb, 1000+ on iOS and
Android...
– Mostly low quality, low production value – opportunistic products from
small studios without huge cash reserves.

5. • Top 10 social casino companies account for 70% of
revenue.
• Large companies dominate Top 5 (Caesars, Zynga, IGT,
WMS/Scientific Games)

6. • CPI rates keep increasing, while ARPU/LTV is flat,
resulting in longer pay back period on ad spend.
• Which results in cash drain, squeezing companies
with smaller cash reserves...
Source: Superdata

8. Some solutions:
• Regional focus
• Product
• Distribution
• Real-Money Gaming

9. Regional Focus
• Problem: everyone, including market leaders is focused on
US, Australia, key European markets.
• Solution: focus on specific, underserved markets, with local
content (e.g. local card games).
• Peak Games (Turkey, MENA) and Akamon (Spanish-speaking
markets, LatAm) are successful examples.

12. Product Focus
• Slots, Bingo are very mature/saturated verticals with high entry cost.
• Poker: Zynga Poker still doing $120M/year, despite ‘stale’ product –
opportunity for new entrants with right product.
– Liquidity is key for success!
• Other casino games: table games (Black Jack, Roulette, Baccarat…) or
Videopoker:
– Need a strong meta-game to offset ‘shallow’ gameplay.
• Social Betting.
– Hard to find the right mechanic but potential $1B+ market.
• ‘New Games’.
– An opportunity for ‘real’ game devs.

15. Distribution Focus
• Find a Publisher/Distribution partner.
• Brands: IP licensing can be expensive, but there are creative solutions.
– Use equity, rev share, ... Instead of upfront cash payments.
– Structure brand licensing deal as JV or partnership.
• B2B/partnership: opportunities to work with large companies who don’t
have f2p expertise.
– Land-based casinos, lottery operators... looking to enter social casino vertical.
– Media companies trying to leverage their audience.

16. What About Real-Money Gaming?

17. Real-Money Gaming is Hard
•
•
•
•
•
Regulation: licenses are expensive, time-consuming process.
Compliance, Fraud Prevention, KYC, …
Payments!
Mature industry: several multi-billion dollar companies.
$200+ CPAs – big market budgets required to get market
share.
• No proven overlap between social/free-to-play and RMG
casino games – no easy way to up-sell social players.

18. Five Options in RMG for game devs
Three easy options:
• IP licensing: e.g. Monopoly Slots.
– No Risk, no investment.
– Only relevant/possible if you already have strong, recognisable IP, characters.
• Affiliate: send traffic to RMG operator, get paid CPA/rev share for converting users
– No Risk, no investment.
– Low conversion rates (<1%), not a great user experience, hard to scale.
• White Label/B2B Platform: re-skin existing gambling product or use B2B platform
like Betable
– Low risk, low investment.
– Hard to convert f2p players, most social casino companies struggled so far to make this work.

19. Two harder ones:
• Joint-Venture: do a deal with existing RMG operator, leverage skill sets
for both partners, e.g. Bonza Gaming, JV between Plumbee and
Unibet, or the Nordeus/bwin.party JV.
– Takes time, money ($500K+)
– Could be great win-win deal for both parties, but execution, talent is key for success.
• Become a gambling operator
– Very expensive to build competitive new RMG operator from scratch ($10M+)
– Not a lot of overlap (culture, skills, business model) with game studios.

21. Key learnings from Plumbee/Bonza:
•
Timing is key: we got to 150K DAU (mostly US, AUS) with
$300K ad spend in early 2012.
•
•
Making quality casino games is not easy, and not cheap.
•
•
Similar growth would cost $2M+ today...
At Plumbee: 1 slot = team of 7 for 3 months, including
mathematician and experienced slots producer
RMG is hard. Me-too products are not good enough,
unless you have a strong brand and millions to spend on
marketing.

22. @raf_keustermans
www.plumbee.com