Social and real-money gaming: Getting the best of both

The legend says that when Alexander the Great arrived in Gordium, he was presented with a complicated knot—which the local oracle had claimed could be untangled only by the “future ruler of all Asia.” Our Sasha observed the problem, stepped back, and cut the Gordian knot in a single stroke of his sword.

In a similar manner, when my CEO once complained about the high withdrawal rates we were experiencing, I answered: “why don’t we simply remove the CASH OUT button?” As it seems, someone actually listened, and this is how social gaming apps were born. Imagine a world in which players can ONLY deposit… Yes, go clean yourself before continuing to read.

So how does this even work? Are there any noticeable differences between executing a marketing strategy when it comes to a social casino vs. another Gamescale brand? (Hint: one of them won’t pay both the players AND the affiliates).

Being one, I know that when you don’t know something—hire a (very expensive) consultant. So I took these questions to Yulia Jeshinko, probably the busiest Social Gaming expert out there. After being quite shocked that she actually agreed to talk to me (I mean, her picture is here below; you do the math), I remembered we are both experts, and started a session of professional Q & A with her:

Shahar: I love you.

Yulia: Good morning to you too; how have you been?

Shahar: Just got back from ICE in London; you know this new Corona masks trend? Been to a party at “The Reign” in which everybody had them on.

Yulia: That sounds cool.

Shahar: Very cool—that was the ONLY thing they were wearing... Anyway, we are here to talk about social gaming apps and what we, the old and unfashionable Real-Money Gambling people, can learn from you kids.

Yulia: OK, let’s start with the basics; what’s the business model & KPIs in online casinos?

Shahar: HEY—I am the one asking questions here! What’s the business model & KPIs in social gaming apps?

Yulia: Excellent question… how creative of you. Social gaming app operators wish to create the best player experience that pushes users into making in-app purchases. The engine that drives this activity is called Game Economy, and together with the Meta-Game Features, they ensure that players will experience the excitement and big wins but over time, as they progress in the game, they have to make further in-app purchases to maintain the same experience, feel, and playtime. As players reach higher levels, their bets increase, alongside the value of their additional Free Bonuses, BUT not at the same pace, and this is done to create the demand to purchase. Much like with regular economics, it’s all about demand & supply.

Shahar: Got it. So basically you drive engagement by the product? Real-Money casinos are mostly the same, with a nearly identical portfolio of games, and if there are any differences, they are mostly in the front-end interface and the way the “experience” is wrapped and presented to the player.

Yulia: Exactly, and that’s a major difference between the two industries; my successful clients have everything done under one roof, without any third-party vendors, and with the main focus on the product player experience. So, the operator develops the product itself (aka casino games) and is also responsible for the experience around it. On one hand, you have the companies competing on the product level, trying to create the best enticing games to attract players’ attention, knowing that on the other hand, eventually, the Game Economy consumption rate will bring them to a point in which they will have to conduct in-app purchases at an increasing rate, in order to keep enjoying such a rich experience.  

Shahar: I see. We aim to make the players deposit and consume their own balance, based on the given house advantage, while you develop unique and exciting products to make them want to experience more levels and unlock additional functionalities, knowing the Game Economy ensures that they can’t reach these without the in-app purchases. So what about bonuses? BTW: I have a dog named Bonus.  

Yulia: Hilarious. Eyes up here, please. Yes, bonuses fuel the activity also for our CRM. In a social gaming app, players begin their gameplay with a certain amount of coins that they receive for free using integral in-game functionalities such as daily rewards, gifts, coupons, etc. Players can play for free every day, BUT they will reach a point within the gameplay in which to continue, they will HAVE to make an in-app purchase. As such, our most important KPI is high DAU (Daily Active Users); this means that players are engaged in the game and spend time playing it; Game Economy takes care of the rest :)  

Shahar: Amazing—retention kicks ass everywhere; is it also important for your traffic sources (AKA affiliates) to dig into the metrics besides conversion?  

Yulia: Conversion is a very important indicator, but follow-up retention stats such as prolonged activity on the 2nd, 7th, and 30th day after installation are equally crucial. As well, as how much money is deposited…  

Shahar: Earned; you don’t have any withdrawals, so any dollar deposited is a dollar earned!

Yulia: …how much money is deposited, or ARPDAU. Affiliates invest money, time, and energy into sending traffic to the operators, their business partners; the same way as anyone who’s sending traffic to real-money gambling websites should care about the CRM techniques these brands perform in order to monetize their leads; otherwise, all efforts were done for nothing. Understanding more on how the operation works and what its USPs (Unique Selling Points) are will help to better understand how high the ROI will be by working together.

Shahar: That does make sense, and I even wrote about it in a previous article. Speaking of other amazing articles I wrote, how do you guys identify and treat VIPs?

Yulia: Right from the beginning! To us, knowing that the average deposit… OK, OK, revenue, is of several dollars per active user, those super players are in fact the economical basis below the entire industry. In fact, our top single percentile of “Big Whales” generates nearly a third of all profits, while together with the top 5% they make slightly more than half of all earnings.

Shahar: I am not too impressed; our 0.5% top VIPs tend to leave half of all revenue.

Yulia: But we are talking about much larger volumes. Remember that our database is usually of millions of users.

Shahar: True that; then how do you segment them to begin with? I mean, you can’t assign an account manager to any good looking face. Unless… all of your users are Swedish affiliate account managers??

Yulia: Hardly. But we kind of look at initial deposit size, and those who manage to place on the table $50 or more on their first day ever are definitely worth a closer look; and that’s before meeting the previously mentioned retention, engagement, and CRM parameters.

Shahar: And how do you incentivize such VIPs, if your experience is product-driven? We are used to simply throw money at people (a habit that got me quite popular at my Pilates class).

Yulia: Correct, our “extra mile” comes in the form of offering sneak previews of upcoming features, exclusive in-game content that can only be obtained as a VIP member, or an option to speak directly to someone on the executive team (instead of simply a support agent).

Shahar: We need to wrap up, as much as I would like to keep you chained to this chair. No, no—of course I was joking! These handcuffs are here purely for artistic reasons. To conclude, any interesting personal stories from your consulting career to social gaming operators?

Yulia: The loveliest thing you get to experience working with such companies is the strong communities behind these games; on annual celebrations of the games’ launch dates, the players throw parties, create videos with birthday wishes, bake cakes for the main game characters, and even write creative poems. I even know of couples who met on a social bingo chat and now they are married.  

Shahar: That’s terrible!  

Yulia: To showcase how intense these players can get when it comes to their favorite game, I even have one personal story to share; back in the day when I moved from real-money to social casinos, I joined one of the players’ groups and started to chat with them. In less than 24 hours, they searched my name (I made the mistake and used my real Facebook account), found that I worked with the game developer, and they ambushed me. When I woke up in the morning, I had more than 300 notifications and 200 new friend requests. They even took my LinkedIn profile image and marked me as the enemy in the group’s posts.

Shahar: Well, the editors here at Trafficology have already indicated that this is becoming a longer-than-expected piece about 650 words ago, so I will have to say goodbye for now. Live long and don’t abuse bonus terms.

Yulia: Do you have alco-gel? Like, lots of it?