A few of my 'video game industry' friends have asked me, "what is the online casino industry like?" so it seemed like a good topic for a blog post.
As someone with 20 years video games and only 5 years 'igaming' (online gambling), my data-points for comparison are admittedly lopsided. My experiences on the video game side, for example, include many thoughts and ideas generated by the experience of being both a founder and an employee. On the igaming side, I really have only been a founder/ceo/biz dev person for Asylum Labs (www.asylumlabsinc.com) , although perhaps this imbalance is slightly mitigated by the external-facing aspect of the ceo role and the opportunities to meet/interact/negotiate with a wide range of folks.
Both industries have much in common; they are almost like cousins or siblings with 10-years between them. Content development (making games) for both is quite similar; both have genre's with genre conventions, best practices and tools/pipelines are remarkably similar. There are more things similar than different so for this post i'll focus on the biggest differences.
These impact us the most:
1) Regulation - did you know online gambling is the most heavily regulated industry in the world? More than pharmaceuticals, arms sales or healthcare industries. This fact means significant extra costs in the area of compliance, certification and distribution. Europe has no 'one size fits all' solution so often we end up doing multiple versions of features on a per-territory basis (this is quite apart from normal localization challenges). Games (and the company) must pay for and maintain 'certifications' that allow us to legally develop gambling content. New regulation for all data-collecting businesses in Europe (GDPR) adds an additional cost burden.
2) Illegal in US - related to #1, but since we are a US company, this is worth mentioning specifically. Developing games for international markets but NOT domestic presents certain unique challenges. It is more difficult to look at the competitive landscape for example. Biz dev. is more difficult since most of the companies we would like to partner with are in UK/Europe. Raising capital has additional headwinds here in US due to investors not wanting to invest in something they dont understand, as well as some bias/vilification/elitism against the industry as a whole.
3) Distribution pipeline - unlike F2P mobile games, where you put your game on the app store and thats it....the online gambling space requires a more complicated relationship with our partners that includes a 'platform provider' or 'RGS' (Remote Gaming Server) that functions as a content aggregator who then will push our games to their customers, the actual online casinos. This means significant additional cost, patchwork solutions for maximum distribution and redundant Live Ops efforts, all which effect the bottom line. Finally, more companies in the 'supply chain' means less revenue for those at the end (us) on a per-euro spent basis. There are ways of solving these problems as your business grows and you move up the supply chain, but for a smalls startup there are some significant initial headwinds totally absent from the app-store model.
4) Lack of Innovation - One of the things i have always loved about video games is the creativity, innovation and 'blue sky' nature of the endeavor. This has changed a lot over the last 2 decades with a well-known creative 'stagnation' of AAA games and the birth of a vibrant and important 'indie' scene. The KINDS of experiences encompass a vast range in video games and it continues to expand rapidly. On the casino side, things are more conservative. This is for a few reasons. Historically, online casino players tend to be older, and set in their ways...they often reject anything too novel/unique and go back to their favorites. Also, due to regulation, (until recently) it wasn't even POSSIBLE to launch a gambling game that didn't conform to the classic structures (especially related to the odds/math). Finally, it's always easier to repeat what you've done than innovate w/ something new. New stuff means risk and execs are going to be less likely to take risks vs. reskinning successful games of the past. This is similar to the AAA problem on the video game side. This last point is actually a major opportunity and the reason we started Asylum Labs; to bring some fresh thinking into the space.
Here at Asylum Labs we are tackling each of these issues with constantly evolving strategies. If folks find this interesting, i can elaborate further in future posts.