As one of the most consistent and profitable areas of mobile gaming, social casino’s success has led to some complacency in the industry. By this, we see less innovation. In a talk at Casual Connect Europe called Lessons from Real Money Casino: How Game Developers Can Apply Best Practices from the Casino Industry to Maximize LTV in All Games, Lloyd Melnick (Director of StarsPlay at The Stars Group) provided strategies and tactics to help developers overcome and succeed in social casino and other genres of games.
Lloyd Melnick is the Director of StarsPlay at The Stars Group, the creators of PokerStars and the world’s largest real money publicly traded company. Lloyd leads the team responsible for free-to-play gaming and has been a central part of senior management at three exits: Merscom to Playdom, Playdom to Disney and Spooky Cool to Zynga. He is also the author of Understanding the Predictable, the definitive guide to LTV.
An Opportunity Too Good to Pass Up
Lloyd came to The Stars Group from Zynga because he couldn’t pass up the opportunity to help them achieve with free-to-play what they had already accomplished with real money gaming. His experience with Zynga has been extremely helpful in his present work. While there he learned the intricacies of product management and data driven design. He says, “Zynga effectively invented game product management and have made it into an art.” His first experience in the game industry, as founder of Merscom, has also been very useful. Working with a startup has helped him build the social gaming team at The Stars Group, even though it is within a large company. What he enjoys most about his work is “Hands down, my team. Great people, not only skill set but great character.”
Consumer behavior is Lloyd’s biggest passion so, despite spending his work in this area, he also spends most of his free time reading journals about it and about behavioral economics. At other times he enjoys food and restaurants and visiting interesting places while traveling.
When Lloyd was finishing his MBA, he realized he would rather spend his life building a business than working as a product manager in a consumer goods company, and the result was his career today. To anyone interested in pursuing this career, he emphasizes that you must understand the end state you want, not just what your next step should be. You need to ensure that every step moves you closer to that end state.
Competing in a Very Challenging Industry
Lloyd points out that the game industry is very, very challenging. Many different game companies are competing for the same player and all these companies have smart people who understand best practices. Since StarsPlay came late to the social casino space, although pioneers in real money gaming, the challenge is even greater. But they respond by leveraging what they do best and exploring the parts of the market where there is no competition.
After Lloyd had completed his MBA, he and a colleague started a company and originally focused on helping tech companies export, since both of them had extensive international experience. One of their first clients was a game company that they helped to distribute products in Europe. At this time the game industry was exploding with many opportunities to license European games to distribute in the US and US games to distribute in Europe. So Lloyd and his colleague turned their company into a game company. Initially they had the most fun seeing their products on the shelves of stores like Walmart and Best Buy in the US or Dixons and FNAC in Europe. But now his greatest enjoyment comes from knowing hundreds of thousands of people are playing their games every day.
The trends in the industry that Lloyd is currently most excited about are adoption of voice technology and new game mechanics that have been proven successful in real money gaming. StarsPlay is already planning products that incorporate both in the future.
RMG and Social Casino Complementing Each Other
Real money gaming and social casino are aspects of the game industry that Lloyd believes will continue to complement each other rather than one attempting to displace the other. While at Zynga, one of his tasks was to form partnerships with real money, land-based casinos. Initially the casinos were very worried about cannibalization. But when the numbers proved that customers playing online drove real money traffic and monetization, they all wanted a part of it.
The results from real money online gaming and social gaming are not as clear. Most research Lloyd has seen show that people gamble for different reasons and less than 25% do it for financial gain. The rest are just as happy with social gaming as with real money gaming; they receive the same benefits. The Stars Group is working on ways to create a more synergistic relationship between online real money and social gaming, but, as a minimum, they want to create a relationship that is not cannibalistic.
As far as skill-based casino gaming is concerned, Lloyd points out that it has been around for years yet has very little traction, so he is not convinced players want it. He is interested in wearables, such as Apple Watch, in general but not sure how social casino could find its way to that platform.
Opportunities in Social Casino
There are still definitely opportunities for emerging markets in social casino. Lloyd points out that there are several real money verticals within social casino that have not yet been leveraging in social. There are also huge opportunities in emerging territories.
When asked what his favorite social app is, other than those from StarsPlay, Lloyd said, “WSOP poker because of its brilliant execution and Hit It Rich! because I still love the team that created it.”
Lloyd believes there are certainly opportunities for land-based casinos and mobile social casinos to work together and learn from each other. But coordinating reward programs is important. Both programs are VIP driven, so giving VIPs a better, more comprehensive experience is huge. Social casino can still learn from casinos VIP management; it is probably the most sophisticated in the world. While at Zynga Lloyd structured their VIP host program on what is done in Vegas, but there is still a lot of room for all social casino to match what is done in land-based casinos.
Catherine Quinton is a staff writer for www.gamesauce.org. Catherine loves her hobby farm, long walks in the country and reading great novels.