Social Gaming and Real-Money Gambling
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5 Partial convergence Social gaming and real-money gambling Rebecca Cassidy Introduction Social games emerged on Facebook just weeks after it was launched in 2007. At first, the boundaries between games like Mob Wars or Yo Ville and gambling seemed relatively clear. The hugely popular Farmville, for example, allowed play- ers to create their own farms for free and rewarded them for returning regularly, inviting their Facebook friends to share in their experiences, or consuming adver- tising. If players wanted to progress more quickly through the game they could pur- chase virtual cash to spend on tractors and cows in the Farmville economy. Among the first games to gain traction on Facebook was Zynga Poker, which reached 36 million monthly users in 2010 and has continued to feature strongly in the top 10 most popular games.1 Like other Facebook games, Zynga Poker was free to play; although participants could purchase virtual currency to keep playing when they ran out of free play credit or to have a chance of winning higher jackpots, they could not cash out any credits they had built up.2 Other free-to-play casino games, including slot machines and roulette, have gradually increased in popularity, to the point that in 2012, ‘casino games surpass(ed) farm games as the darlings of social networks’ (Takahashi 2012b). As a result, the social gaming and online gambling industries have become increasingly interested in one another. This chapter focuses on this dubious romance, which both insiders and commentators have described as ‘convergence’ but is perhaps more tentative and uneven than this term implies. This chapter focuses on three questions. First, how does the gambling industry adopt or resist new ideas? As Gariban, Kingma and Zborowska remind us in their chapter in this volume, flexible, virtual and interfaced forms of gambling produce and are produced by material, social organisations. Furthermore, new gambling products do not emerge from, or enter, a vacuum. On the contrary, they develop in a crowded marketplace where business models, products, regulations and ways of working are already circulating. Will new forms of gambling preserve the insti- tutional and commercial logics that developed in traditional land-based environ- ments, including casinos, racecourses and betting shops? If not, how might they differ? Second, how do social games illustrate the iterative qualities of gambling products? In presentations at gambling industry conferences, social gaming com- panies claim to be able to ‘train’ their consumers to behave in certain ways. I use Partial convergence 75 Nigel Thrift’s notion of the ‘technological unconscious’ (2004) to explore how both social gaming and real-money gambling create new kinds of anticipations that are unevenly adopted and adapted by players. Third, I will use the coming together of social gaming and real-money gambling to reflect on the more general redrawing of the distinction between play and gambling (Goggin 2012). In this chapter I argue that gambling is being ‘gamified’3 by social gaming – falteringly, but with considerable momentum. The gambling industry is a complex global assemblage with diverse interests across regions and sectors. In this chapter I focus on European online casino and betting operators. Some companies operate solely online; others combine this channel with ‘bricks and mortar’ operations. Between 2010 and 2012 I attended 30 conferences in London, Barcelona, Dublin, Macau and Greece and listened to more than a hundred presentations, ranging from ‘The Real Social Economy and Making the Next Billion’ to ‘Inside the Mind of the Social Gamer’.4 I conducted multiple interviews with 20 newcomers to the gambling industry who had back- grounds in the media, console gaming, financial services and marketing. I also conducted semi-structured interviews with 50 individuals, including traditional gambling operators, gaming lawyers, investors, politicians, regulators, journal- ists, researchers and treatment providers.5 In this chapter I shall refer to ‘social gaming’ and (real-money) ‘gambling’ as the terms were used by my research participants, while acknowledging that the boundaries between them are contested and fluid. Definitions of ‘gambling’, ‘gaming’, ‘wagering’ and ‘betting’ also vary across jurisdictions and reflect diverse priorities and histories (see Miers, Chapter 3 in this volume). The gam- bling operators I work with use both ‘gaming’ and ‘gambling’ to describe their activities. ‘Gaming’ often has ‘softer’ connotations than ‘gambling’, though not always.6 ‘Social gaming’ is equally contested. In January 2011 journalist Nicholas Lovell asked 26 ‘gaming luminaries’: ‘What is a social game?’ The responses reflect the competing ideas of a heterodox community. Some do little to distin- guish social from other kinds of games, for example, ‘A social game is one that is most fun when you play with your friends.’ Others are more fine grained, such as: any game which uses the social graph7 to increase and improve the gaming experience, while utilising game theory and psychology to generate revenue from the active user base from a combination of virtual goods, advertising and offers. (Andy Rogers, quoted by Lovell 2011) Social games conventionally include those that are accessed via Facebook (although increasingly they are available through other platforms) and include poker and slot machines that are not obviously ‘social’, as I will show. In 2013 a social games marketing executive told me to ‘forget definitions’: ‘Social gaming is not what it was 18 months ago and it won’t be the same thing in 18 months’ time.’ Instead of producing a temporarily adequate definition which suggests a fixity that is not found in practice, I will reflect on a particular period, between 76 Rebecca Cassidy 2010 and 2012, when social gaming and gambling sought to come together. The outcome of their tryst remains uncertain, but their courtship reveals important aspects of both industries and of the potential for fusion between gambling and other kinds of play more generally. Prenuptials Clearly a convergence is occurring . where Facebook and mobile game companies will leverage their large audiences in partnership with licensed casino operators to develop a new gaming sector for the US and abroad. This market will emerge differently than traditional, online real-money gambling. (Lisa Marino, CEO of RockYou, quoted in The Global iGaming Expo and Summit Brochure 2013: 13) The courtship between social gaming and real-money online gambling is based on the reach of the former, its low costs and ‘fit’ with digital forms of distribu- tion and cloud technology, and the profitability of the latter. According to a 2012 report by Morgan Stanley, 799 million people play social games, and 170 million of those are active players of social casino games. This is more than three times the customer base of online gambling. However, only between 1 and 5 per cent of social games players purchase virtual items, including currency (Casual Games Association 2012). Social gaming can sustain a large number of nonpaying play- ers because it has relatively low costs and, unlike gambling, is unregulated. Gam- bling has fewer customers but they spend more: $35 billion in 2012, compared to the $6 billion spent on all of social gaming, including social casino games (Juni- per Research 2012, H2 Gambling Capital 2012). Lifetime values (the total spent by any one individual throughout their relationship with a company) is reported to be up to 900 times higher in gambling than in social gaming (York 2012). As one social games developer told me, ‘We have good products, but they have a far superior business model’. North America is the largest market for social gaming and accounts for approximately 40 per cent of global revenues (GamblingData 2012: 3). In the United States, social gaming provides a means for gambling operators to build brand awareness and loyalty in a closed market ahead of the predicted legalisa- tion of online gambling (Peters and Mukherjee 2013). In May 2011 US public gaming corporation Caesars bought 51 per cent of Playtika (creators of social video slots Slotomania) for $80–90 million, and in early 2012 US gaming machines manufacturer International Games Technology (IGT) paid $500 mil- lion for Double Down (a social gaming casino). At the Mobile and Tablet Gam- bling Summit in late 2012 the commercial director of IGT’s Interactive Business described three benefits of the acquisition. First, Double Down was a ‘very big vertical’ in its own right, with a ‘fantastically high growth rate’.8 Second, it brought expertise from social gaming into real-cash wagering, particularly new game mechanics, some of which had been built into highly successful new prod- ucts. Third, ‘the Double Down partner program . effectively allows (clients) Partial convergence 77 to participate in online wagering or real money wagering before the market regulates’.9 IGT management presented ‘convergence’ as the sharing of business insights and markets; however, intimacy can also take less symmetrical forms. In the United Kingdom, in contrast to the United States, online gambling is a legal, mature, well-established business. Some British betting and casino operators therefore regard social gaming as a threat to their business and see acquisitions of social game developers as a way of clearing the market. As one senior executive involved in the purchase of a social gaming studio explained during our fourth interview, in 2013, ‘Basically we didn’t want to have anyone cluttering up the market and distracting people from our brands. It was a search and destroy mis- sion.’ Also in 2012, gambling executives, journalists and regulators told me that ‘the industry’ was seeking to ‘level the playing field’ by suggesting that social gaming should be subject to the same regulation as gambling. Ralph Topping, CEO of William Hill, ‘the world’s biggest bookmaker’ and provider of online sports betting, poker, casino and bingo, has said in his blog that: the problem is that (social gaming) is not currently regulated as a product group and we think it should be .