If you've been following game development-related news, you must've seen that the games industry was caught off-guard recently with the sudden layoffs of hundreds of game developers who saw the lights go out behind them along with a cold "goodbye" note. Former employees are even taking the case to court. Ok, so what does that have to do with online casinos? Well, keep reading.
Amidst this controversy, the notorious Big Fish Games studio also laid off 15% of its staff to concentrate their main activity in making social casino games and other casual genres. As developers take a step back and shake it off to get a better picture of what's going on, it's interesting to notice how these so-called casino games alone are often at the center of some sort of never-ending controversy. A few months ago, Big Fish games were considered illegal under the law of the US state of Washington. In other states, regulations are still slowly adapting to the increasing and complex demands of that niche. Back into 2015, a news report by CNBC explored the increasing online gambling business in the US and brought up an interesting aspect of that studio's business. Even without a unified online gambling legislation in place for the country as a whole, Big Fish Casino was making millions of dollars with microtransactions in their free-to-play games. According to that CNBC article, they could take payments but couldn't reward their players to prevent a possible lawsuit. Not that they cared since their profits just skyrocketed in the meantime. They just needed to get people engaged long enough so they can keep on paying.
Fast forward to the present time. If I'm not being way too naive, Big Fish's decision to focus on social casino games development can only mean that they have a good business model in place. And they're not alone. Huuuge, a publisher and mobile games developer company, opened its doors in 2015 and had already accumulated around $18.9 million in revenue by the end of 2016. I don't want to be the devil on your left shoulder here and force you to look the other way, but when I think of the struggles faced by indie game developers to even survive in this industry these days, I can't help but wonder why casino games are so financially successful. What's happening in this niche that players are playing a free game to eventually spend their money so willingly? How could developers take a bite of that cake?
The drill is a no-brainer for how free-to-play games are made into moneymaker machines: you offer a game for free, make it addictive enough as early as possible and monetize it by adding paying-walls here and there in exchange for an enhanced gameplay or by setting up ads. As players keep coming, its multiplayer beauty shows up. By word of mouth, more people will learn about the game and eventually download it just to try it out. A friend's leading position on the leaderboard becomes a thing you might start hating and willing to beat. Still, that doesn't mean you'll achieve the Flappy Bird overnight success that made his developer something around $50,000 a day from in-game ads revenue.
It just feels like when no one was looking, online gambling businesses figured out player acquisition, engagement, and retention and are now simply replicating this model ad infinitum because they can. We're talking about the relatively low cost of making mobile games that will find a vast number of consumers when released without overloading developers with the extra time-consuming task of creating console-compatible versions. It might be too simplistic to say that, but millions of gamers worldwide are already equipped to play casino games if they have a smartphone and an Internet connection. But so is the case for any mobile game, you must be thinking.
That's right, but online casinos are just a modern take on the well established Las Vegas casinos that will find nearly no problem to tap into human psychology to keep players coming back for more. It's just the Skinner box principle with flashy lights. So maybe you should just go ahead and set up an online casino business, lean back, and watch the coins come pouring in, right?
Ok, you can try that! However, the hardest part lies in the overwhelming sea of bureaucracy involved in setting up an online gambling business. If you're willing to do that, you'll have to overcome challenges such as international laws, country-specific laws, countries with no regulations, countries with regulations and monopolies, countries that banned gambling activities etc. Once you manage to get all of that figured out, you'll still have to fill out an application for a license on the country where your business will be based and wait for months or years before it is accepted and you're good to launch. Don't forget the costs and taxes. They won't be cheap.
The other available option for developers interested in getting into the online casino games is to create free-to-play games monetized by online casinos' ads. Basically, you create something like a slot game, for instance, that will be available for free somewhere showing an ad for a real online casino game. If the player clicks on that ad, they will have to spend their real money to play and win. Have you noticed the blurred ethical boundaries there? You create bait games to lure people into playing online casino games. I don't don't to suggest anything. I just want to say that people are doing it and making money.