Shaun McCamley, managing partner at Euro Pacific Asia consultancy, describes the merits of gambling on the blockchain – and why building tokenised games linked to a loyalty rewards program is the best way to harness the technology.
Social Casino platforms continue to boom attracting even more players as a direct result of lockdowns and travel restrictions. Even when casino operators are in a position to begin ramping up, players will be reluctant to travel for some time to come. BlockChain has been touted as the next big thing in gaming circles, so just what are the benefits, if any, that this innovative technology can deliver.
In 2019 the global social gaming industry generated a whopping $110bn in revenues, with the social casino gaming segment generating $5.5bn in revenues. Not surprisingly China, Japan and Korea generate 90% of the games revenue in the Asia Pacific region. After North America, Asia is the second largest social casino market with revenues of around $90m, and that number is growing with an eye popping 250 percent YoY growth. Estimates in the coming year are predicted to be 12 percent – 15 percent revenue growth in the Asia pacific region alone.
Surprisingly for an industry in boom mode, over the past eight years there really hasn’t been any new innovations or additional game upgrades. In some respects that’s not surprising as the core basics of a slot, bingo, poker and standard casino games are already there. Slotomania although being the oldest social slot game on the market is today still the most popular offering with more than 20 million likes on FB. In terms of publishers, Playtika remains the largest social casino publisher and the most popular of the social casino portals with around 29 percent market share, closely followed by Double Down and Scientific Games at eight percent, with Zynga and Madfish coming in with around seven percent market share each.
So are there advantages of integrating BlockChain technology into a social gaming platform? To best answer this question, we need to take a step back and look at the basic modelling that social games platforms currently deliver as well as understand the psyche of players who love social and by the way, millions of them are playing every day.
The average social gamer regardless of what game they play will generally prefer a freemium game implementation over a fully licensed game, unless the game comes from a well-known publisher.
The freemium model has three basic approaches to monetize the platform namely:
In-App purchase of the games “token” (this could be additional credits, gold coins or some other “token” representation of in app value) The provision of revenue generating ads that the player can either watch to “earn” some of the in-app tokens or credits, or forced in front of the player before they can progress in some way or another Through a level of socializing the game by implementing “competitions” between multiple players for “token” prizes or the status of being a game “champion or expert.”
Tokens are also often used as a reward for returning back to the game on a regular basis (loyalty program) introducing new players to the game (referral) or for buying in-game tools that make progression to the next level easier. Simply put, all freemium style games have a common purpose of trying to monetize the product through some form of digital token that represents a given value.
When it comes to excitement levels players have differing needs they wish a game to provide. They want the ability to be entertained for a given period of time, at a cost commensurate with the level of gratification they are trying to achieve.
Most freemium models fail at this, often with players feeling they are being bombarded with adverts, unfairly charged for the cost of buying in-app tokens, or the value of the digital assets not being proportionate with the cost of the token In addition, some players are able to easily conquer certain game levels, and easily “earn” tokens in one game, but then feel deflated when trying other gaming systems. Currently there is no easy way to accumulate “in-app tokens” or points in one game and transfer them to another game, or even gaming profile within the same game or platform – this is one aspect where BlockChain technology delivers.
A player’s journey in most social gaming platforms is initial excitement, then the gaming “algorithm” tries to push the player to purchase “tokens” as part of its monetization process. This is usually done through certain triggers like urging to join a competition, giving some free tokens, yet not enough to succeed to the next level. Experienced players are well aware of this, and usually prefer freemium games that are less “in your face” about it, or are perceived to provide enough “stimuli benefit” for the costs involved. Most players are aware that their excitement levels start falling away when the cost to value ratio is no longer sustainable.
So armed with this information, what are the benefits of developing and integrating BlockChain technology into a social casino games platform. GameWorkz, a social casino games platform developer who is building a disruptive tokenised games platform, understands that the real benefits coming from this technology is when providers look more at their ecosystem than individual products. The end result being that companies like GameWorkz will be able to acquire more players at a higher ROI.
GameWorkz feels, and I agree, the way forward is building tokenised games linked to a loyalty rewards program all fuelled by BlockChain technology and these are the reasons why.
When using a GameWorkz BlockChain driven platform, a player signs up for a token enabled game (same as a normal freemium game) and downloads it. The player is informed that the game is tokenized, and may have items tracked through the BlockChain. It is made clear to the player that by using their BlockChain enhanced player login they will see increased player value. Not everyone is BlockChain savvy so the smart move is to make this optional, and the player can continue as per normal using a standard login.
As a part of the education process, the player is able to use a standard login based on their game wallet, or offered to download a token app (an enhanced game wallet for game tokens), if they haven’t got a game token wallet as yet.
After ensuring they have a token wallet (or logged in with their “tokenized game login”), the player gains “in-game” tokens through progressing through the game, which are shown as the games regular tokens. The tokens they accumulate appear as the standard game tokens (coins, gems, treasure items etc.) GameWorkz players are given the option of viewing ads and the type of ads they want to view.
Using BlockChain technology the game properties can be set either through the game, or through the token wallet app that a player downloads. This allows the data to be visible in one central place for all token games, or for the individual game in the game itself. It is important to ensure that the quantity of tokens accumulated, the ad settings, and the ability to trade will always be available from the wallet app. This means a player can open the wallet app, move the current value of the tokens they have to another game (trade the tokens for others), or they could buy more tokens. A player must be able to see the amount of tokens they have, what loyalty rewards they have accumulated for each game, the amount of ad time they have provided, the amount they have been paid for viewing those ads. As an added bonus players can see which games provide the best token value / add revenue / game fairness etc.
The wallet is a central place where all data for all tokenized games is held, it will be considered the same as a normal token wallet, with each game token representing a certain value for that particular player.
A BlockChain powered reward program like any other is incentive driven and is built directly into the wallet. This in turn means that game providers on an aggregate model can provide rewards in tokens back to the players. These token rewards are based on total ad time watched, the amount of times they return, and the amount of money (fiat) spent on tokens, the amount of people introduced.
To ensure that ad monetization mechanism is not being abused, a player verification system is engaged by creating social proof and a limited form of KYC to ensure basic AML regulations are abided by.
So for players signing onto a tokenised BlockChain fuelled social casino platform they have their game installed, and are given the option to also install a universal game wallet that contains all tokenized game data that the platform supports. Within that wallet, they would be able to set basic configuration data for the game such as ad repeats, monetization, game equipment, and the amount of tokens etc.
The wallet acts as both a game library for the supported tokenized games, a token wallet and a basic social platform, online store to swap / sell and trade game related goods like tokens, equipment and even game progress.
Disruptive and smart BlockChain compliant social platforms offering token enabled games delivering all the benefits the new technology delivers rings in a new era to an already hungry and impatient market.