Product and technology are one of the most valuable parts of any Social Casino company. The real-money gaming industry competes with relatively similar products and different CPA offers. In contrast, the Social Casino industry mainly competes through their game quality. Studios constantly increase the production value of the market.
Production values must rise to meet player expectations as platforms and technologies mature. The rising cost of game development follows a common pattern. We have seen this trend before in many gaming verticals and across other industries.
Social casino market
Towards the end of 2012, social games production values skyrocketed. This made it much harder for a new game developer to enter the market. A similar pattern emerged in the mobile gaming world. Nowadays, we have access to the same graphics, art, sounds and game experience on a mobile device as we would have had on a gaming console.
In the last year we have seen how the social casino industry has matured and has become extremely competitive. Making it harder for a social casino company without a strong financial or casino background to enter the industry. Moreover, the social casino market consolidation is dominated by the three main biggest publishers. Furthermore, an increase in M&A deals and the fact that there are over 1,000 social casino games (slots, bingo and poker) that are spread across all of the social and mobile platforms have already saturated the market.
Consequently, established social casino publishers are facing new challenges to get their new games noticed. The main challenges are the rise of the user acquisition and development costs.
Competing in a crowded market
Social casino developers must compete with their direct competitors. In addition, they face successful online operators, land-based casinos and other social or mobile game developers entering the social casino vertical. One solution involves focusing on new markets such as Latin America or Asia. Another option is exploring distribution channels beyond Facebook, iOS and Google Play. Product innovation could also help studios stand out. Also, some developers now consider entering the real-money gaming industry as a new revenue stream.
The first social casino games had one big advantage: simplicity. They featured simple graphics and simple mechanics. A small team could develop these games with a modest budget in a short period of time. However, this is changing. Developers now produce more complex games and graphics to stand out. Meanwhile, players expect updated and unique content. They also demand advanced game features and social interactions.
Social casino game design
Developing social casino games is a double-edged sword. The upside is that these games are evergreen. People have played the basic game mechanics for more than 200 years, and they will keep playing them for 200 more. However, it’s difficult to stand out against competitors as you cannot change the basic game play. Social casino players want casino games they recognize. Therefore, it becomes difficult and risky to innovate in the game play. For example, if you change the basic game play of Blackjack, it stops being Blackjack. This means losing social casino players.
Innovation challenges in casino games
So how can one stand-out if it is not possible (or risky) to change the basic game play of a casino game? That’s where game designers and the production team prove their value. As a result, most leading social gaming studios place ‘product’ people in key positions.
In addition to better graphics, animations, sounds and music, game designers must focus on the entertainment surrounding the basic game play. By adding social features and game mechanics that can stand out against other casino games. Designers must create these features to retain the player and meet expectations of updated, fresh and unique content. Such as chats, leader boards, level system & points, achievements, tournaments, special power-ups, avatars, badges and stickers could be some of the renowned game mechanics that can be used to stand out.
It’s easy to come up with an idea for a social casino game. However, when you need to put all these possible game features together in a way that make sense for a player it can be overwhelming. Which consequently has a direct impact on team sizes and development budgets.
Technology costs also affect your budget when adding these features. Multi-player or synchronous games like Poker or Bingo demand a robust and scalable architecture. You also need a team with great tech skills to maintain it. They must handle common synchronous problems such as concurrency. A simple oversight can break down your business.
Social casino distribution platforms
Two years ago Facebook was the main focus for social casino development. Now however, you cannot enter the market without a mobile focused strategy.
Cross-platform development costs
Moreover, desktop and Facebook remain the main revenue platforms for the social casino industry. This forces publishers to follow a cross-platform strategy. Players are expecting to play from anywhere and from any device increasing the development costs. Consequently, players expect to use the same account everywhere. They want to share points and virtual currency across desktop and mobile devices. This forces developers to create and maintain a client/server integration. You may remember mobile games two years ago could be played offline. Nowadays, almost every social casino game requires a good and stable Internet connection. Developers must understand TCP/IP protocols. They also handle all connection and security issues regarding in-app purchases and virtual currency. It’s true that there are new technology solutions, tools and frameworks to aid the developers life. However, this comes at a cost. Different platforms require different skills and a specialized team, which increases development costs.
Social casino game retention
As games as a service, developers must update fresh content into their games to increase and maintain their player retention. Achieving this on mobile devices with a cross-platform strategy is technically complex. This may increase the maintenance costs even more than its production cost. A successful game demands resources focused on keeping players happy. This effort could increase their lifetime from 1 or 2 months to years.
In conclusion, the social casino industry consolidation keeps increasing user acquisition costs. It also inflates the production value of a simple game. This increase in the development costs are mainly due to improvements in the game. Not only from a graphic or art perspective, but also from the game design and updated content added to increase user retention. Additionally, the rise of smartphones raises player expectations for a multi-platform experience. This makes it difficult for a new developer to stand out with a small team and budget.