Therefore there is mostly a mis-match for listed firms when they are treated as "Technology stock" like Betfair...
Logic dictates that most consumers would probably trust the brand they are most familiar with; for UK audiences they would trust the bookies brands like Ladbrokes, WilliamHill or PaddyPower etc.. However, have you visited any of these sites!?? All invariably are one stop shops and can provide everything. So how do players choose!?? Well, they generally choose by the offers available, hence the life time of players are very short, and cost to acquire them very high… but CPA (Cost per acquisition) in GG market is around half the cost for acquiring each depositor for High Net Worth wealth management industry… one is ultra short term, another much longer term and it is supposedly wealth preservation.. Both however are faced with similar challenge of how to bridge the “Trust & Confidence” gap.. These are for firms already "taking people's money"... how about social gaming!?
Sadly Mark Pincus did not see the email I sent him a couple of years back. His opportunity is now almost lost, I would say his success rate in being a full fledged gaming gambling conglomerate would be 30% (but to increase his chance, he need to delist the company yesterday!) (they are charting new ground here and his challenges is sadly not easily solved by buying best in class platform or sacking/re-tooling/hiring more developers, outsourcing would not work either, key is to know what needs to be done to be more than gaming gambling!!)
So, what might work? What are the key trends? Does your company have what it takes? If answer to all the followings are YES, then you have the good fundamentals for a seat at the likely success table:
E. Do you devise products and services in house by understanding your customers preferences and usage patterns!?
a good example is the likes of Gamesys (JackpotJoy, SunBingo, Caesars Casino etc.), who after CashCade’s success (with their TV spot promotion and creation of Foxy Bingo brand) are now pushing their own brand Jotpotjoy… and even just managed to buy Virgin games for an undisclosed sum! Must read article written by Dean on VentureBeat. One thing he missed was the key question I asked during the Q and A (reconfirmed my comments above) i.e. limited addressable market for gaming gambling consumers and very fierce competition for the players.
He answered after working as a partner of the “Red or Black” game on ITV with Simon Cowell (but did not comment specifically on this project as under NDA). They have learnt a lot and trying new formats on TV would be a great opportunity to try again in the future…
Key Catalyst for growth:
Following my suggestions above, with some hard work, elbow grease and some inventiveness, we might be able to create a real catalyst for growth and in turn bring some great enjoyment to all and make some decent but equitable money meanwhile.
BBC News - Facebook and Zynga to end close relationship:
Gambling Industry Bets Virtual Money Turns Real - WSJ.com: