Predictions 2016: Stuart Lewis-Smith

GSN Games’ VP of casino and slots Stuart Lewis-Smith gives his predictions for the social casino industry in 2016

With 2015 nearly in the books, I am eager to see what 2016 holds for the casino space. Following the recent mega-mergers and acquisitions events, including Scientific Games, Bally Technologies, WMS and Dragonplay, Churchill Downs and Big Fish Games, Amaya and PokerStars, and IGT and GTECH, I expect to see continued M&A consolidation, specifically with the established social publishers, egaming operators, machine manufacturers and suppliers and land-based establishments. The M&A landscape appears promising for any new companies with the right growth trajectory or innovation in product development. [private]

I also expect to see some adoption of trends from the land-based slots manufacturers, specifically with regards to licensing major entertainment brands for slots content. We will see more recognizable brands and IP as content within social casino games, as we’re already seeing this take place with Zynga’s Wizard of Oz Slots app and Product Madness’ Heart of Vegas. Taking it one step further, social casino publishers will further leverage established RMG slots IP and math within their apps.

At the same time, I anticipate that we will notice movement in the opposite direction, as social casino IP will move to land-based RMG. There’s a huge opportunity to take the brands and games that have proven to be successful in social casino games and introduce them to real-money players on the casino floor. The cost to develop and test game content with a large player base is relatively low for social casino developers. This content can be iterated on quickly and used to test the product on social platforms before investing in the real-money version.

We’re going to see a continued increase in user acquisition costs, which may unfortunately force several smaller, less stable social operators and publishers out of the market. This high barrier to entry will make it extremely difficult and expensive for new entrants to gain market share. In addition, the existing user acquisition sources will likely experience significant consolidation in 2016, leading growth teams to spend more with fewer partners.

The increase in ad network cost per installs (CPIs) may lead to marketing and growth teams across the industry to move more of their budget to non-traditional mobile marketing channels, like we’ve already begun to see with television. We will likely see an explosion of data aggregation, or companies looking to collect data, aggregate it, and resell it for marketing purposes. Finally, with the excitement of buzzwords like “retargeting”, “native” and “programmatic”, it’s likely that the 2016 buzzword will be “playable” with the new emergence of companies pushing ad units that give users a very immersive experience and opportunities to engage in the product before installing it. 

In a move away from the one-size-fits-all model, an increase in targeted apps will emerge, catering to specific player demographics or a certain niche in the market. By identifying a particular player need and addressing it, the industry has watched as apps like DGN Games’ Old Vegas Slots grew exponentially in 2015. In this particular case, DGN Games focused the product experience entirely around traditional 3-reel mechanical stepper slots. This approach of creating experiences that fill specific niches will enable social publishers to increase their overall footprint.

On a personal note, I hope to see true innovation in social casino and the gaming industry overall next year. Deeper social integrations, more sophisticated gamification of traditional casino game mechanics, and the introduction of skill in the core game experiences are just a few of the key opportunities to elevate the social casino player experience in 2016.