Online gaming industry

Online gaming industry

The phrase “online gaming” means different things to different people. If you ask anyone whose gaming is centred around a console then you can pretty much guarantee what their version is going to be. That side of the story is what we already know. But what about those other people taking our gaming name in vain? Who are they, and what do they have to do with us?

OK, let’s do what they taught us in college and start with a definition of our key term: According to Andrew Rollings, author of Fundamentals of Game Design, “Online gaming is a technology rather than a genre, a mechanism for connecting players together rather than a particular pattern of gameplay.”

On that basis online games are anything that people play over the internet. And people play in a lot of different ways. Most notably, and most significantly for present purposes, online gambling represents one of the fastest growing (and most profitable) industries anywhere on the planet right now. They talk about “online gaming” too.

The incredible proliferation of online casinos all around the world is drumming up numbers that can make your eyes water. The online casino gaming industry was reckoned to be worth over $30 billion last year and the figures are rising all the time. The figure for 2015 is predicted to be $40 billion.

There is more to the relationship between this sort of play and the console-based products we normally review here than a simple sharing of vocabulary. In fact, there is a growing movement to bring these two digital cousins into closer contact.

Here’s how it works.

There is a strand of the online casino games industry that doesn’t involve cash in any form. It’s known a ‘social gaming’ and it involves people – millions of people – playing poker, blackjack, roulette or whatever for virtual stakes and, in essence purely for fun. It’s pretty much the same buzz as you might get from any mainstream point and shoot, strategy or multi-user game. Maybe a bit slower and possibly a little less dramatic, but the intrinsic rewards are pretty much the same: you pass some time and you have some fun – end of story.

Because there is no money changing hands no formal gambling is taking place. And that, in turn, means these games are not subject to the same legal restrictions and regulations that apply to their more seriously monetised big brother. That’s significant.

There is a big debate going on that cash-gaming side of the industry as to whether social gaming should be seen as a way to ‘soft sell’ their products and services or whether it should be seen as a stand-alone sector that they leave to operate entirely on its own merits. There is no consensus on that. But they do have some interesting figures to help them make up their minds.

According to a review of interactive gambling commissioned by gaming firm Odobo in 2013 social gamers are worth between 30 and 40 times less than their cash-playing contemporaries (measured in terms of Average Revenue Per User – ARPU). To put that in more definitive terms, if a social gamer can be converted to a cash game those figures point to a 40 fold increase in returns for the games providers.

That means that there is a huge incentive to encourage social gamers to migrate to monetised games.

So far the world of casino games has remained largely a world unto itself. The social gaming we’ve been talking about here is little more than a sub-set of that bigger picture. But as the investors and the strategists in the companies start to look outwards, it is surely only a matter of time before they start to explore the overlap that exists between their world and the rest of the online gaming community.

Research published in Australia recently showed the demographics of online casino gamblers to have similar demographics to those of the stereotypical console gamer: young affluent males with time on their hands. On that basis it is easy to see why it is that social gamers – whether they are playing casino style games, League of Legends or GTA – are firmly in the sights of the casino’s marketing men.

We are not saying that this is a bad thing. There has to be scope to bring a bit of real life risk and reward into the gaming environment. There is bound to be an overlap at some point – the existence of social casino gaming is proof of that concept already. All we are talking about is the gaming format.

One final thing that is worth bearing in mind on this point is that all that money sloshing around offers the means to hire some really great designers. No-one is in a position to make that happen just yet. But it will be a real game-changer when they do. Remember, you heard it here first.

Image courtesy of Ruben Bos