In late May 2012, the announcement of BWIN.party to create a dedicated social gaming unit, Win, created ripple effects in various gaming entertainment board rooms.
Of course, social networking sites have already been used for over a decade to mobilize customers around a brand (Muniz & O’Guinn, 2001). And Facebook, the latest social network hit with over 900 million active users (March 2012), has found its advertising revenue coming from numerous companies, worldwide, taking this network for granted in their media exposure plans.
Also, networked virtual games like MMORPGs (massively multi-player online role-playing game) have been around for over a decade, and virtual social worlds, with their own currencies and virtual goods, have offered companies and organizations various marketing opportunities (Kaplan & Haenlein, 2009c) for a while already. We might still remember how the Chinese government had to step in halfway 2000 when the virtual QQ coins, massively used to purchase off-line goods, started to affect the Renminbi exchange rate.
Despite we can be aware of such fertile combination of online gaming and social networks, what is different about the BWIN + social gaming combination is the heralding of what seems a natural evolution from entertainment to gaming into gambling as an online lifestyle.
BWIN, namely, is not an incidental isolated case. Zynga, the online gaming company now arguably more famous for its Poker game than its FarmVille hit which took Facebook by storm in 2009, increased its user base to 292 million in April 2012 from just 30 million two years earlier. Also brick and mortar giants like Caesars Entertainment Corp and MGM have already entered the scene through acquisition of mobile gaming businesses or by developing a virtual world/currency ecosystem of their own.
These social gaming ecosystems typically resemble a freemium model, that is, users can play the game in a free plain vanilla version, but have to pay to access premium features or content. These payments in social gambling games are small such that it could be easy for users to associate these expenses with the entertainment of buying a virtual carrot for a virtual horse on FarmVille. Zynga reportedly makes 40% of its revenue from those in-game sales.
Interestingly, according to a study on the state of the social gaming industry by Crowdpark in February 2012, 58% of virtual goods purchased in social games are done by females. And among the top spenders 70% are women. This finding might be an even more compelling reason for gambling entertainment companies to enter this realm. Not on the race courses, nor in betting branches or around casino poker tables, but it is here where the on average 40-year old woman is actively gaming and spending and ready to be transformed into a previously untapped new revenue stream.
Below a ppt dump of bits and pieces about what is going with social gaming in the gambling industry.