Market Overview

Four Ways Social Gaming Has Changed

The evolution of social gaming has begun.

But are the changes what we expected? Ingo Hinterding, the Co-Founder and Chief Product Officer of Crowdpark, recently weighed in on the matter.

First and foremost, he spoke about the influx of challengers to the Zynga (NASDAQ: ZNGA) throne. “New competitors have arisen with a specific focus that challenge big American social gaming companies like Zynga and Playfish in specific regions like Peak Games for the Middle East and Wooga for Western Europe,” said Hinterding. “Casino games have become a hot growth category, and are thus a logical addition to Crowdpark's games portfolio.”

Second, Hinterding believes that Facebook Credits (which were launched last year) “have allowed social games developers to monetize well.”

“Also, gambling companies are now allowed to advertise on Facebook in jurisdictions in which online gambling is legal,” he said.

Third, Hinterding believes that “social gaming has matured and it has become more difficult to enter the market and develop great games that find instant success.”

Finally, Hinterding said that he feels that Facebook is now focusing on quality – not quantity – “in the discovery features on their Facebook ecosystem.”

“There were growing pains for a while from a developer's point of view, because it was hard to adapt to changes in virality possibilities,” said Hinterding. “However, developers are now adapting to the new system.”

The Big Gamble

As a company that develops legal betting games that are just for fun (not for profit), Crowdpark's strategy is much different from the one that Zynga is expected to take. But if the rules for online gambling were to change, I wondered if Crowdpark would make some adjustments as well.

“Social games are strong standalone businesses, and our DNA is in social games,” Hinterding explained. “We first and foremost create well-designed games that allow players to have fun with their friends, to enjoy a feeling of progress and achievement, and to show off their success on social platforms. We are an entertainment company, and do not currently plan to become a real money gaming company.”

Hinterding said that “real money betting” requires gambling industry expertise. “Double Down Interactive has indicated that they are considering doing real money gambling on Facebook,” he said. “Their new partnership with IGT (NYSE: IGT) makes this a logical exploration for them. Without specific gambling expertise, we do not plan on developing real money social games. We are, however, exploring potential partnerships with gambling operators to develop or license social games.”

Crowdpark is also “closely monitoring changing regulation and strategic opportunities for gambling operators and ourselves, like Facebook`s expected move to allow gambling in the UK.”

“It is important to note that regardless of changes in online gambling regulation, many gambling operators consider the development of virtual payout social games to be strategic,” said Hinterding.

Is It Enough to be Fun?

Finally, I asked Hinterding what would become of social betting games if online gambling (with real money) began to rise up in America.

“Virtual payout and real money social games are complementary products,” Hinterding clarified. “Social betting games are primarily about the fun of betting with or against your friends in an environment of friendly competition. A real money offer is always about the thrill of winning or losing money. These two focuses are not mutually exclusive, so it is possible to marry the two concepts.”

Further, Hinterding believes that social games and online gambling can accelerate each other's growth. “However, both types of games require different play incentives,” he said. “Gamblers play for the chance to win big. Social gamers play to show off achievement and to experience progress, as well as to enjoy a social gaming experience.”

Further, Hinterding said that “virtual payout social casino and betting products have been bringing in high revenues in many geographies, some of which allow real money online gaming (for example, the UK).”

“There is space in the market for virtual payout and real money social games to coexist,” Hinterding continued. “Gambling operators currently do offer free-to-play versions of their games with no payout, but most of these existing games are not social games. Gambling operators are beginning to see the strategic value in developing free-to-play, virtual payout social games, and are looking to social games developers for expertise.”

Additionally, Hinterding said that gambling operators are interested in using social games to educate users about their brands and games, “and to use the reach of social networks for providing additional liquidity for their operations.”

Follow me @LouisBedigian

Posted-In: Crowdpark Ingo Hinterding Peak Games Playfish ZyngaSuccess Stories Startups Tech Best of Benzinga

 

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