Gambling: Bet on Mobile Products and Services by Thomas Husson for Consumer Product Strategy Professionals
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September 21, 2011 Gambling: Bet On Mobile Products And Services by Thomas Husson for Consumer Product Strategy Professionals Making Leaders Successful Every Day For Consumer Product Strategy Professionals September 21, 2011 Gambling: Bet On Mobile Products And Services by Thomas Husson with J.P. Gownder, Seth Fowler, and Andia Vokshi EXECUTIVE SUmmaRY After so many years of unmet expectations, gambling is finally going mobile. Although it’s not yet the promised El Dorado, and despite the fact that competition is likely to be fiercer in a complex legal environment, several companies currently expect tens of millions of euros in revenues for 2011 via the mobile platform. Mobile is adding convenience and the ability to provide more immediate and contextual services. Product strategists at gaming, gambling, or lottery companies; at casinos; and at mobile operators should make a safe bet by developing new mobile products and services to differentiate the gambling experiences in a multiplatform environment. Moving forward, the opportunity will not be restricted to smartphones but will evolve to increasingly more social and connected devices, such as tablets and connected TVs. tabLE OF CONTENts NOTES & RESOURCES 2 Mobile Gambling Is Poised For Growth To understand consumers’ mobile usage, Gambling Aficionados Are More Likely To Use we analyzed data from Forrester’s range of Mobile Services Technographics® surveys conducted in 2010 and 2011 in North America and Europe. Conditions Are Ripe For Mobile Gambling To Take Off Related Research Documents 6 The $1 Billion Question: Is Mobile Gambling “Western European Mobile Games Forecast, 2010 The New El Dorado? To 2015” RecommeNDatIONS August 27, 2010 8 Bet On Mobile Services To Differentiate The “Uptake Of Online Gambling And Gaming In Gambling Experience Europe” September 4, 2007 © 2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please email clientsupport@ forrester.com. For additional reproduction and usage information, see Forrester’s Citation Policy located at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. 2 Gambling: Bet On Mobile Products And Services For Consumer Product Strategy Professionals MOBILE GAMBLING IS POISED FOR GROWTH “For at least five years the gambling industry has touted mobile gambling as the next big thing. It somehow never really took off. […] betting on mobiles has made only a tiny impact on the worldwide gambling industry.”1 This summary of the mobile gambling space was written . back in 2008. Three years later, have things evolved significantly? Well, mobile gambling has not yet met its high expectations — but now is the time for product strategists to place their bets on mobile gambling. Gambling Aficionados Are More Likely To Use Mobile Services To better assess the opportunity to engage via mobile devices with consumers who like to gamble, we have used our Forrester Technographics® data to analyze their current mobile behaviors in Europe and in the US. Here’s what we found: · European gamblers are more frequent users of mobile services. Among the 4% of European consumers ages 18 and older who enjoy gambling/betting in their spare time, 24% play games (e.g., Angry Birds and other traditional mobile games) at least weekly, versus only 14% for the average mobile user (see Figure 1).2 While traditional mobile games have inherently different dynamics than gambling games (e.g., poker or blackjack), it is clear that European gambling aficionados are more likely to use most mobile services more frequently than average European consumers with mobile phones. · In the US, only online gamblers show higher usage of mobile services. Probably because they skew more heavily toward older generations (37% are Older Boomers or Seniors, versus 32% for the average US population), US consumers who report betting or gambling in their spare time conform to average mobile usage patterns.3 However, among US consumers who place a bet or play poker online, the likelihood that they will use mobile services frequently is much higher. Among online poker players, 59% access the mobile Internet and 52% play games at least monthly, versus 36% and 27% of average US mobile consumers, respectively. This group makes a good target for mobile gambling. September 21, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited Gambling: Bet On Mobile Products And Services 3 For Consumer Product Strategy Professionals Figure 1 Gambling And Betting Aficionados Are Engaged Mobile Users “On average, how frequently do you do the following activities on your mobile phone?” (”At least weekly” responses shown) 26% Consumers who enjoy Listen to music 19% gambling/betting in their spare time Average mobile user 26% Mobile Internet 17% 24% Play mobile games 14% Access social networking 20% sites 11% 14% Watch video/TV 6% Base: 773 European consumers (18+) who enjoy gambling and betting in their spare time; 17,808 European consumers (18+) with mobile phones Source: European Technographics® Benchmark Survey, Q2 2011 58973 Source: Forrester Research, Inc. Conditions Are Ripe For Mobile Gambling To Take Off Mobile gambling usage will grow in the next two years — not only because it is starting from a low base today but also, primarily, because organic drivers for consumer usage uptake are in place: · Growing adoption of smartphones and tablets. Already, 10% of European consumers ages 18 and older who report betting or gambling in their spare time own an iPhone.4 The percentage is just 7% among US adults who enjoy betting or gambling in their free time — but no doubt the growing penetration of smartphones will help create much more convenient user experiences for consumers willing to gamble anywhere, anytime.5 Moving forward, tablets will play a key role — particularly for consumers willing to play on a more personal and ergonomic device at home, in either the living room or the bedroom.6 · Improved user experiences. Technological advances mean that latency is being reduced via 3.5G and 4G networks, allowing for the creation of mobile gambling experiences closer in performance to their online gambling equivalents. New user interfaces and application designs, when accessed on the latest smartphones, allow product strategists to offer great gambling © 2011, Forrester Research, Inc. Reproduction Prohibited September 21, 2011 4 Gambling: Bet On Mobile Products And Services For Consumer Product Strategy Professionals experiences. To facilitate sign-in while making sure the user is authorized to bet, some players, such as Sky Bet, have tried to streamline the process to a minimum number of steps by allowing users to manage mobile setup on their PCs (see Figure 2). · Market education efforts. Promotions and tutorials are key to educating consumers on the availability of these mobile offerings and teaching them how to access them. The PMU — the French horse-betting monopoly that is now expanding into sports betting, due to deregulation — is significantly marketing its numerous mobile initiatives (see Figure 3). For harder-to-learn games, product strategists are designing demonstrations to engage consumers. For example, Ladbrokes includes an effective free demo play on its Blackjack iPhone app (see Figure 4). Figure 2 Sky Bet Allows Mobile Setup On Its Website Source: Sky Bet website 58973 Source: Forrester Research, Inc. September 21, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited Gambling: Bet On Mobile Products And Services 5 For Consumer Product Strategy Professionals Figure 3 The PMU Is Heavily Promoting Multiple Mobile Initiatives Site mobile XHTML Site mobile web kitApps mobiles iPhone, Bada, Android Site tablets Source: The PMU website 58973 Source: Forrester Research, Inc. © 2011, Forrester Research, Inc. Reproduction Prohibited September 21, 2011 6 Gambling: Bet On Mobile Products And Services For Consumer Product Strategy Professionals Figure 4 Ladbrokes’ Blackjack iPhone App Offers Free Demo Play Source: Ladbrokes’ Blackjack iPhone app 58973 Source: Forrester Research, Inc. The $1 biLLion question: IS mobiLE gambLing the new EL dorado? Some industry analysts and people in the gaming industry answered this question positively several years ago, claiming that the mobile gambling market would be worth $23 billion this year.7 However, we believe the answer is no. The market is only taking off — attracting lots of new entrants. But the reality is that regulation issues are causing uncertainty, and, so far, the market is only generating millions of euros in gross win for the most advanced players. Product strategists working for mobile operators, lotteries, gaming operations, and gambling companies all have an opportunity to develop products here. But they should know that: · Launches of new products and services are highly dependent on regulation. The introduction of legislation permitting remote gambling in selected markets has been gradual. Little progress had been made in the potentially lucrative US market, where remote gambling services are still prohibited. The legislation implies that operators should block access to offshore gambling or foreign betting