Profile: Not going with the flow

FlowPlay CEO Derrick Morton on the rising costs of player acquisition, the challenges of mobile, and why social fantasy sports will be a game changer

FlowPlay is intent on not going with the flow. I met with CEO Derrick Morton at last month’s iGaming North America conference at the Planet Hollywood Hotel Casino in Las Vegas. But unlike the rest of my meetings, which took place over stale coffee in between panels and presentations, Morton invited me up to his suite on the 24^th floor. During our conversation it became apparent that Morton and FlowPlay like to do things differently. While the famous dancing fountains at the Bellagio erupted below, the chief exec laid out his firm’s plans for growth over the coming months, which include launching a social fantasy sports offering and adapting its massively multi-player game format for mobile. But before that, Morton briefly goes back to where it all began. [private]

FlowPlay started life as the creator of Massively Multiplayer Online Roleplaying Games (MMORG) back in 2007. It’ first product was called ourWorld and was aimed at teenage girls. It’s still live today, and according to Morton “makes enough money to pay the salaries of most people in the company”. FlowPlay got into the social casino space two years ago with the launch of Vegas World, a MMORG set in a casino. “So there is a nightclub, there is a restaurant, there is a swimming pool where you can go swimming, there is even a wedding chapel where you can get married. 30,000 people have got married in the game and dozens have gone on to get married in real life as a result of having met on the game,” Morton adds.

Attracting attention

FlowPlay offers a white-label of its Vegas World platform, which Morton says is a “single digit” part of the business at the moment. The firm took the decision to launch a B2B product after attending a number of trade shows and receiving several requests from potential customers. “Time and time again the question came up – can we white-label this, can I put my brand on this and launch it as my own freestanding social casino,” he says. At first Morton was reluctant to dip his toe into the B2B water, but after a while “caved” when he saw the opportunity for it to become a meaningful part of the business. “I realized there must be something here because so many people were interested in it,” he adds.

Morton says that while the white-label is a small portion of the business today, he sees that changing “in a big way” over the next 12 months and hopes it will account for 25%-35% of revenues by the end of the year. But FlowPlay isn’t the only firm looking to cash in on the market as more land-based operators, companies, and brands look to enter the lucrative social gaming sector. “I have seen more and more people be more and more active in making proactive pitches to companies to be a white-label solution,” he says. But the chief exec doesn’t fear the competition and believes FlowPlay can offer a different product to others trying their luck in the space.

“We do have this very social element, this real multiplayer take on how we present a social casino versus the more single player experience that everyone else has,” Morton says. “If you like the idea of reproducing the environment of your actual land-based casino online, with a nightclub that looks like your nightclub and a swimming pool that looks like your swimming pool, and a slots room that looks like your slots room, then we can do that for you. If you just want a single player experience, there are other companies that can do that for you as well.”

A sporting chance

 FlowPlay is brave in the social games that it offers players, in particular on Vegas World, and was one of the first operators to launch a social sportsbook. Players use virtual currency to wager on real-world sporting events from Premier League soccer and NBA basketball, to NFL, NCAA, NHL, and even US soccer games. Morton says “expectations were low” ahead of launch, but the product has performed well and accounts for “a little less” than 10% of revenues. Average session time on Vegas World are around 40 minutes, with five minutes spent placing sports bets before players move on to slots or engaging in social activity.

But it’s not just FlowPlay’s male customers that have embraced the product: “The surprising component was the ladies actually liked it as much as the men, and that was a great thing,” Morton says. “Even though we assumed it would be a male activity, it is 50/50 between males and females placing sporting bets”.

Off the back of its sportsbook success, FlowPlay is on track to enter the “white hot” fantasy sports sector in the coming months. The firm plans to launch a social version of the game on its newly acquired sportswold.com domain, and is currently in the process of building out a team of engineers, artists and product managers that will focus entirely on its fantasy sports product. “I really believe that to make it successful the team that builds it needs to live and breathe sports,” Morton says. “If we [the ourWorld and Vegas World team] did it, it would not have the authenticity and impact we think it can have. So we are hiring a separate team who are into sports and know what they are doing and really do it justice”.

FlowPlay took the decision to launch social daily fantasy sports on its own domain because the firm sees very limited crossover potential with its core slots and poker players, but huge value in it as a stand alone product embedded with the FlowPlay DNA. “There is some overlap, but the fantasy sports player is really in the most part a different player to what would normally come and play slots and poker at our social casino,” Morton adds.

Late to the party  

While FlowPlay undoubtedly takes an intrepid and innovative approach to its platforms and product offering, Morton readily admits the firm has been late to the party in terms of Facebook and mobile. Morton says that as a “scrappy start up” the firm was initially focused on launching B2B partnerships with the likes of Yahoo! and AOL because they “didn’t have the money to go out and spend on customer acquisition.” But as the company has become more profitable off the back of those distribution deals signed around 18 months ago, FlowPlay is now adjusting its strategy to directly acquire players of its own.

“The low hanging fruit is on the open web, that’s where the customers are cheaper and that’s where the customers are easier to get because nobody else but us was on the open web really – everybody was either on Facebook or mobile,” Morton says. “As we continue to spend more and more to acquire customers, we are reaching some scaling issues and some scaling limits on the number of players we can actually acquire online. So our next phase is to actually get into mobile, but we know it’s much more expensive, and you have to have a much more mobile-centric product”.

With that in mind, FlowPlay plans to launch two mobile-specific games in the coming months – Vegas World slots and Fringo. Vegas World is already available on iOS and Android for tablet devices, and is “exactly the same experience” as the desktop game. “So if you are playing on Facebook or you’re playing on VegasWorld.com or you’re playing on an iPad, it is exactly the same client,” Morton says. The problem, however, is that Vegas World is such an immersive and social experience, it simply doesn’t work on a mobile device – which FlowPlay defines as anything with a screen size of 6 inches or below.

“We can’t get the virtual world on a phone – it wouldn’t be practical for you to run around a nightclub with an avatar chatting with 20 other people on such a small device as that. So what we have chosen to do on mobile is an individualized experience. So we make a Vegas World slots, which is only a slots experience but still with multiplayer and chat and drinks you can buy for the room; you’re still interacting with customers that are playing on Facebook and tablet, but it is a much more slimmed down experience,” Morton adds.

The chief exec says there is “good data” to show that there are more players on Android, but that iOS players tend to spend more – “so you have to be in both places,” he says. FlowPlay will typically launch a mobile app on Android “just to get a sense of having done everything correctly” before “taking a risk” on iOS. “iOS is so competitive, and the customer acquisition costs are so high, so you really have to have your act together before you go there,” he adds.

The cost of doing business

FlowPlay undoubtedly needs to embrace the shift to mobile in order to remain a major player in the fiercely competitive social space. But as mobile adoption continues to rise, so does the cost of acquiring players through the channel. This is not a challenge unique to FlowPlay – it is difficult code that even social behemoths Playtika and DoubleDown are struggling to crack – but arguably it will hit FlowPlay even harder than most due to the scale of scope of its business. For that reason, Morton says the importance of having a best-in-class mobile product is paramount.

“We know it is going to be expensive for us, we know it’s not getting any cheaper day-to-day, and it’s going to be a challenge so we really have to have the most competitive app we can possibly put on the phones and with the smartest marketing campaigns we can possible get together so that we can compete. That is one of the reasons why we have been late to the party when it comes to mobile. We knew we would have to get there one day, but we wanted to exhaust the low hanging fruit of online and Facebook first,” he says.

The next 12 months will undoubtedly be critical in the laying the foundation for FlowPlay’s future. But if the operator can bring a solid mobile product to market, and successfully launch its social fantasy sports offering, the firm will be well placed to capitalize on the opportunities in front of them. And given their ‘Best Product Innovation of the Year Award’ at the inaugural eGaming Review North America Awards last month, it seems the industry will be keeping a close eye on their progress too.