Testing, testing, 1, 2, 3

Getting the basics right is just as important for a real-money game as it is for a free-to-play game. Players have low tolerance for a glitchy or error-filled experience. Getting this wrong can kill your game and result in valuable marketing dollars being washed down the drain. Srinivasan says a soft launch can be very important for mobile games in the real-money industry.

“First impressions are important with any game, so targeting a soft launch for specific areas can help show how well the app works and provide data on conversion and retention of players. You can use this info to smooth out issues before trying to distribute the game to a wider audience.”

Scale versus focus

Once confident that your game is up to standard, the launch and accompanying marketing can take either of two strategies, depending on your budget. Burst campaigns, for those with bigger budget, and precision marketing for smaller developers.

“For bigger companies, with bigger budgets, a burst campaign can be very effective. This essentially involves paying for a high volume of lower quality downloads that can be purchased for relatively cheaply and will boost the game’s standing in the App store. As a result your game will be easier to discover for those high-quality players that will eventually drive revenue. An added bonus is getting your game into top 10 on the App store provides a good press hook and will generate more organic coverage and reviews,” Srinivasan said.

Getting your game into the charts can result in around 50% extra organic installs and downloads due to higher visibility of the app. Players driven by organic discovery also demonstrate higher lifetime value. Serious bang for your buck, but an expensive route.

For the smaller developer, or anyone on a budget, precision marketing is key.

“Figure out the niche audiences that your game might appeal to and really focus your marketing just on them. The key to this strategy working is optimizing every marketing dollar and ensuring that you react to data you are getting. Then, as your game gains traction, you can scale up and target a wider audience. This ensures marketing remains cost effective.”

It’s a numbers game

For any campaign, and particularly with precision marketing, collecting and analysing data makes all the difference. Srinivasan tells developers to set aside a “large amount of time” for tracking and analyzing in the first weeks of a launch. She recommends breaking down your player base into categories such as date-of-install or gender and carefully tracking how these group use your game.

“Cohorting and tracking each cohort is highly critical. Many developers make the mistake of cohorting only by date of install but if you have the data, cohorting by other dimensions such as demographic data, traffic source and platform type can be highly insightful and actionable.”

The most important metric for any game is lifetime Value (LTV) versus cost-per-acquisition (CPA). If your CPA is more than LTV, then your game is losing money.  Srinivasan explains:

“Most companies focus on the value of a customer to-date and forget to take lifetime value into account. Once you have a few weeks of data, there are many forecasting mechanics you can use to project the lifetime value. But, be aware that your real-money customer might spend in a different way to a social gamer.”

Know your goals

For a game launch to be successful, you have to know what you are measuring success by. Whether trying to drive ROI, or running an exploratory campaign to test market assumptions – knowing exactly what you are aiming to achieve, and focusing on how best to achieve that, ensures that marketing dollars are not wasted.

The most important metric for real-money mobile games, Srinivasan says, is how many players make a deposit. While it is nice for players to download your game, unless they make a cash deposit, they won’t actually be playing. So, when measuring the value of a marketing campaign, the cost-per-deposit is a key metric to focus on.

“By spending where it counts, optimizing your marketing to access the right audience, and focusing on conversion and retention you create the recipe for a successful real-money mobile game,” Srinivasan said.

–

Before joining Betable, Kady Srinivasan was Head of Analytics and User Acquisition at Booyah and Ubisoft where she drove substantial improvements in analytics sophistication and ROI driven user acquisition. Prior to that she was a Director of Marketing Analytics at Symphony IRI working with big CPG companies to drive top-line growth and profit.

Developers working with Betable benefit from our expertise in the Real Money gaming space. For more information visit developers.betable.com.

There is one major reason for that—monetization is a problem for everyone and online real-money games make a lot more money than social games. While the social games industry is young, it will never reach the scale of the still-growing gambling industry, despite the latter existing under much stricter controls.

At one point the speakers did their best to outdo each other in demonstrating how big the real-money market actually is. Betable’s Chu started the bidding with $30bn, the estimated size of the global online gambling market. Viki Zabala, VP Marketing for Fiksu, then pointed out that the global casino industry—combined land-based and online—is worth around $400bn. And for those that still were not impressed, Brock Pierce, Executive Chairman of Playsino, added his own estimate that, when taking the unregulated black market into account, the number at least doubles to $800bn.

To the listening game developer, the market opportunity just exploded from $40bn to $800bn. Now, if you are anything like me, you treat huge numbers with a healthy dose of skepticism. So what is actually known about the size of the real-money online gaming market?

Unless an industry is made up solely of publicly listed companies, an accurate market size figure is hard to come by. As a result, most global figures can best be described as educated guesstimates.

One good number, the same that Betable’s own head of product quoted, is that the online real-money gaming market was worth $30bn in 2012. That figure, which comes from research firm H2 Gambling Capital, is an estimate for global gambling revenue (sometimes referred to as gross profit), which means money staked by players after winnings are paid out. That is important distinction from turnover, which in the real-money sector means the total amount of bets placed and fails to show actual return to the operator.

But while the global picture is interesting, it is notoriously hard for market estimates to take into account unregulated gambling or companies which do not publicly publish financial results. As a result, this blog thinks it is most informative to look at existing regulated markets, where companies such as Betable’s developer partners are doing business now.

Sometimes it is forgotten, in talking about slow regulatory progress in the U.S., that the vast majority of Western Europe already regulates online real-money gaming. Looking at these markets can provide some hard numbers on the value of real-money gaming.

In U.K., where Betable is licensed and headquartered, the Gambling Commission said it taxed £680m ($1.06bn) of revenue in 2011, but due to a large number of licensees paying tax overseas, the actual market size is much bigger. According to two separate research papers from Deloitte and Gambling Data online gambling revenue in the U.K was around £1.7bn ($2.65bn) in 2011. In 2012, the Gambling Commission quoted H2 Gambling Capital estimates that the market had grown to £2bn ($3.13bn).

Italy, the second most mature E.U. online gambling market, is the largest market in Europe in terms of turnover, according to H2 Gambling Capital. The regulator, AAMS reported 2012 online gross gambling revenue of €749m ($997m), a number that is expected to increase on the back of the launch of online slots in December 2012.

In France, online licensees generated revenue of €696m ($924m) in 2012 according to the gambling regulator ARJEL.

Denmark, a country with a population smaller than New Jersey, recently reported online gambling revenue of DKK2bn ($356m) in 2012. It was the first full year of operation as a regulated market.

The Spanish online real-money market, which has just been regulated, is expected to generate first-year annual revenue of around €250m ($332m). With the market launch hampered by heavy recession and a limited range of products, it is expected to grow rapidly over the next few years as new game types are allowed and consumer spending rebounds.

In Sweden, the state gambling company, Svenska Spel, estimates that foreign internet companies made revenue of around SEK2.7bn ($417m) in 2012. The state-owned operator says that these companies have a 49% share of the online market, placing the total online real money market value at around SEK5.51bn ($841m).

Meanwhile, in Germany, where online gambling is currently unregulated, the market is estimated to be worth anywhere from €760m and €1bn ($1.01bn – $1.33bn) in annual online gambling revenue.

This post is only looking online real-money markets. Revenue from land-based casinos and the lottery industry dwarf the online market. And as more and more customers turn to internet and mobile devices, crossover between the two consumer bases is expected to increase.

H2 Gambling Capital projects that the online real-money market will grow to $40bn by 2015.

By comparison the global social games industry was expected to generate $8.2bn in revenue by 2012, according to Thinkequity—a figure includes advertising revenue— and could grow to around $14.2bn by 2015. SuperData Research projected that the social casino market would be was worth $1.7bn in revenue in 2012.

And it is important to note that while gambling has been around forever, the online real-money market is still emerging. In its 2012 look at trends in the gambling industry, banking group KPMG said that H2’s estimate “may be just a drop in the ocean, considering that some of the biggest potential markets—such as the U.S., China, Japan, and South Korea—still prohibit many forms of gambling over the Internet.”

With growing numbers of countries regulating their gambling markets and allowing wider types of games, that overall size of the pie can only increase. Betable is helping social games developers turn on real-money now, because we believe now is the time to start sizing up your slice. From what we heard at Inside Social Apps, an increasing number of social game developers share this view. 

Anyone who follows real-money gaming regulation knows that publishing a bill is a long way from actually getting it passed. In most cases, the bill will end up dead or amended beyond the point of recognition. It is telling that one of the most important laws addressing real-money gaming in the U.S. – the Unlawful Internet Gambling Enforcement Act (U.I.G.E.A.) – was only passed as a last-minute addition to the SAFE Ports Act, a piece of legislation aimed to increasing security at american ports. Not exactly an obvious connection, but an effective strategy, as the law changed the market literally overnight.

So, and but, we are back in gambling bill season.

According to those who follow this issue closely, the King bill, and the soon-to-be-published bill from Rep. Joe Barton (R – Texas), are highly unlikely to progress. These laws are more likely aimed at maintaining public interest in online gambling regulation and keeping those who support the issue on-board. So why should anyone in the wider games space pay any attention to yet another round of political posturing on internet gaming?

Shape of things to come

These bills will help determine what types of real-money games will be allowed in the future. Most legislation to-date have focused on poker. While this is a massively popular past-time in the U.S., it is just one of a number of product verticals that make up a fully-regulated online real-money gaming market. For example, in the U.K., revenues from both internet sports betting and online casino games (roulette, blackjack etc…) are double the revenue made from internet poker. And bingo revenue is on a near-parity. For the U.S. market to be interesting to social game developers, there will need to be more than just poker.

The really interesting thing about King’s bill is that it would regulate games beyond poker. Of the states that have already regulated, N.J. will allow both casino and poker games, while Nevada regulations are limited to poker – these are positive signs.

For the record: “skill games” such as fantasy sports are already legal in 37 states across the U.S., internet horserace wagering is legal across the majority of the country, and an increasing number of states are allowing their lotteries to offer products online. However, excluding lottery, these very specific types of gaming that cater to niche audiences.

Size matters

As we explored in a previous post, states that are leading the way real-money gaming regulation in the U.S. However, these intra-state regulation are creating ring-fenced markets with small consumer bases. Player liquidity is important in the real-money market. A federal-level (interstate) regulation would be an instant solution. As an added bonus a single country-wide law would make licensing and taxation infinitely easier to navigate and more business friendly.

The precedent will be set Now

How well this new batch of federal bills fare will inform the shape of regulation in the future, even if they are not passed into law. Each failure over the last six years (and there have been a lot) has informed the next attempt.

If bills that support the aforementioned points of large player liquidity and a wide range of games do well, it is arguable that these elements are more likely to be included in a future law. The content of the bills, and who signs on to support them, will indicate how things progress in the future.

An alignment of interests…

There are many disparate voices in the real-money gaming debate: consumer protection groups, multinational casino companies, tribal gaming interests, sports leagues, foreign Internet operators, tech companies, social games companies, horse racing, lotteries, religious groups, to name just a few. But these groups are closer in opinion than in the past.

As the traditional land-based elements of the industry have learned more about internet gambling, they have become more comfortable with the idea that it could actually benefit their businesses.

And from a player protection point of view, there is growing consensus that regulation is needed. It has been repeatedly acknowledged that payment blocking and ad bans fail to stop players turning to black market offerings. Even interests that have been historically concerned about legalizing real-money gaming, may be convinced to support regulation on the player protection issue.

Means it might just work

With growing consensus that regulation is needed, the chances of a federal law emerging is steadily increasing.

There is a very different tone around gambling regulation in the U.S. than there was even a couple of years ago. As noted by Rep. Pete King’s legislation, re-interpretation of the Wire Act of 1961 by the Department of Justice (D.O.J.) has created a much more positive environment regard internet gambling regulation.

For reference: In December 2011, the D.O.J. revised its long standing opinion to say that the Wire Act’s prohibition of wagers via telecommunications crossing state lines or international borders refers only to bets on a “sporting event or contest”. This change in stance has significantly improved the prospects of federal regulation and galvanized states to take the matter into their own hands.

Any company interested in the real-money gaming space should sit up and pay attention this summer, because now is the time to figure out how you want to approach the space. Legislative progress is slow, but as U.I.G.E.A. taught us, it sometimes pays to prepare for the unexpected.

Some social game developers are already trying to get out ahead of the curve in markets where real-money gaming is legal. Betable is licensed by the U.K. gambling commission, so our partners are already gaining traction overseas. Just yesterday Big Fish announced the launch of the world’s first real-money multiplayer roulette game on mobile powered by Betable in the U.K.

Four years ago every conversation regarding real-money gaming in the U.S. would be prefaced with, “if regulation happens”. Two years ago that changed to, “when regulation happens”. Now, nearly halfway through 2013, we can talk about “where” regulation is happening.

Already this year, more tangible progress has been made than in the preceding six years since the 2006 Unlawful Internet Gaming Enforcement Act (UIGEA) banned online gambling in the U.S.

The level of regulatory progress by states is impressive, according to Chris Krafcik, North America research director at Gambling Compliance and long-time watcher of gambling legislation in the U.S. He told this blog:

“In recent years, the number of states considering Internet gambling has risen markedly. Just two states considered such legislation in 2008, but this year, 10 states (and counting) have considered it. Clearly, states are beginning to move toward Internet gambling regulation with increasing interest and in decidedly increasing numbers.”

Who, What, When, Where

In December 2011, a reinterpretation of the Wire Act by the Department of Justice (narrowing the law’s scope to only apply to prohibiting online sports wagering) opened the door for states to regulate real-money games. Fast-forward 18 months and we are seeing some real results.

In April 2013, Nevada made history by approving the first company to offer licensed real-money online poker in the U.S. It took a long 16 months from the approval of regulations to the first licence being issued, but Ultimate Poker is now taking online bets from players within the Nevada state border.

Anxious to not be left behind, New Jersey ended a 12 year campaign to legalize real-money gaming in February, after Governor Chris Christie signed online gambling bill into force. According to draft regulations (a mere 78 pages long) published earlier this month, N.J. hopes to approve its first licensees as soon as the Fall. What makes this market particularly interesting is that licensees will be able to offer casino games as well as poker.

Elsewhere, Delaware hopes to start offering keno and casino games online via its state lottery before the end of the year. Illinois, Kentucky and Georgia have already given the go-ahead for their lotteries to move online, but they will be limited to offering a narrow selection of existing lottery products.

Early Days, But More to Come

Currently opportunities in the U.S. are largely theoretical. States like Delaware and Georgia intend to operate as closed markets with only the state lottery allowed to offer games. Nevada and N.J., on the other hand, will offer a competitive licensing process to companies with a land-based presence within the state. Still, but there are questions as to how viable these markets will be.

Estimates place annual online poker revenue in the Nevada market at somewhere between $35m to $60m. N.J. has the potential to be somewhat more lucrative. Areport from Gambling Data predicts casino gross gaming yield of $158.9m and poker GGY of $103.1m in the first year of operation. By comparison the U.K., which is one of the oldest regulated online real-money gaming markets, is thought to be worth around ₤1.7bn ($2.58bn) in net revenue, according to accounting firm Deloitte.

Given the limited size of these markets, companies currently applying for licences may be doing so more to win good will of authorities and learn the business of regulated online gaming, than to make any serious money. But this will change, if more states join these first trailblazers.

In California, there are three pieces of legislation on the table looking to bring online poker to the state’s 38 million residents. David Quintana, a tribal lobbyist, told reporters he believes there is a 50-50 chance of laws changing in 2013, up from a zero percent chance in prior years. Other Tribal representatives have put the odds of success as high as 75 percent. If an agreement can be reached between diverse interests – tribal casinos, card rooms, and racetracks – the state has said it would work quickly to legalize online gambling.

Elsewhere, just a few weeks ago Illinois published draft language, which if passed into law would legalize: “fee-based [i.e. games in which a fee or rake is charged, such as peer-to-peer poker] or non-fee based games [i.e. house banked games] of skill or chance…”

Laws are also pending in Massachusetts and Pennsylvania, while Louisiana has just commissioned a study into the feasibility of legalizing internet gaming. A further 8 states have recently considered legislation on online gambling which failed to progress, but as others forge ahead, many are expected to re-introduce laws.

Interestingly, there are also signs that politicians in Washington D.C. may be reconsidering the issue. According to reports, Senators Harry Reid and Dean Heller may team up again to introduce a bill, while New York State congressman Peter King and Texas congressman Joe Barton may also introduce legislation.

Historical attempts to take federal action on gambling regulation have all failed. So, it will be interesting to see if progress by states does anything to move the conversation on, or whether any forthcoming bill will be as doomed as its predecessors.

The Future for the U.S. Market

One danger is that state-by-state regulation could lead to a fractured landscape, where, like in Europe, laws differ from region to region and companies cannot pool players from one jurisdiction to the next. The theory goes that if the liquidity of a market is too small, players will not be interested and companies who have invested in licences will be unable to recoup their costs.

A solution is the potential for states to sign compacts, which would allow sharing of information and pooling of players between jurisdictions.This would transform a small market like N.J., into a base from which to access the larger ecosystem of customers from states like California and Illinois. In their laws, both Nevada and N.J. have left the door open to signing compacts at a future date.

While there are many kinks to still work out, it seems to only be a matter of time before a regulated U.S. real-money online gaming market is a reality. And in the meantime all parties should support regulation, because whether on state-by-state or federal level, these laws will help steer consumers away from the black market.

Additionally, from the industry’s point of view, each new state passing legislation represents a new market opportunity for responsible operators. As should be the case with a real-money gaming, there will be high barriers to entry, with a growing trend of states requiring companies to have a land-based presence.

Over the coming years, it will be very interesting to see who will rise to the top in these new markets. For example, what will happen to the traditional real-money landscape when really innovative games developers get their foot in the door?

Over the past few years, I have covered the global spread of gambling regulation, the emergence of social gaming and mobile gambling, key court cases across the E.U. and in the Court of Justice of the European Union, the FBI crackdown on Full Tilt Poker and Poker Stars, the emergence of online gambling regulation in the U.S., and I have interviewed executives at nearly every major online gambling operator, as well as regulators in the U.S., U.K., Ireland, Denmark, Sweden, France, Italy, Spain, and South Africa to name just a few.

During time I have covered gambling, regulation has been the defining driver of change. I have been lucky enough to travel across the vast majority of Europe, to the U.S., to Russia, to South Africa, watching first-hand as nations have forced an unregulated – at times unruly – industry to adjust to a world of national-level regulation and corporate responsibility. As an objective observer, I would argue this has been change for the best, particularly for consumers.

However, I think the next five years will be defined by change of a different sort. The world of real-money online gaming is set for a more stable future, as regulation spreads from region to region. But as the sector matures, the need for real innovation will increase. The industries that could introduce such innovation, such as social gaming, face high barriers for entry, but for those than can make the transition, there is a potentially large reward.

Make no mistake, the macro picture is changing. Unlike just a couple of years ago, smartphones are a must-have for consumers. Tablets – which five years ago we did not even know we wanted – have become a norm. Across the globe, broadband and mobile penetration is increasing. More and more of our everyday pastimes – TV, music, gaming, interacting with friends, and gambling – are now mobile and online-first activities.

In a conversation with a fellow journalist, not so long ago, we talked about innovation in the multi-billion dollar gambling industry. It is strangely absent in such a lucrative sector. We realized that the number of really disruptive new products introduced in the last few years could be counted on less than the fingers of one hand. Exchange betting changed the sports betting landscape in the mid-2000s, but beyond that examples become rapidly less impressive.

In the vast majority of cases, online gambling games are direct ports from the casino floor. A few companies try to differentiate by slapping on a fresh brand or introducing a 3D element to a poker room, but in reality there is little to distinguish one game from the next. Traditional gambling, in entertainment terms, it is a pale shadow of the colorful and constantly changing gaming industry.

I came to San Francisco just a few months ago looking for a new sector to cover, a new tech to learn, something exciting to shake up my writing. I found what I was looking for in a place much more familiar than expected – the real-money social gaming industry.

Betable is trying to do something that excites me. It plans to marry the great unrealized love of the last few years – social gaming and gambling. Billions of dollars in mergers and at least a few billion words of speculation have been spent on real-money social gaming and, for many industry watchers, the verdict is still out on whether these two industries are the greatest match of the decade, or just the greatest flirts.

I took a position as Research Director at Betable, because there is a lack of knowledge about where, and how, these two industries will intersect. When someone successfully combines elements of both, I know the business will be changed forever. Betable is making that happen. And when the eureka moment comes, I intend on having a front row seat.

–

William Chambers will be posting insights about real-money gaming and lessons learned about convergence between social gaming and real-money gaming here on the gaming monetization blog. He is a journalist by trade and has written about global gambling regulation for Gambling Compliance and other industry publications for the last four years. If you have any questions on real-money gaming or how Betable can help you visit Betable.com.

We’re eager to see how their answers vary- especially for the 5th question. While I don’t wear as much makeup as James Lipton, I hope you’ll agree the questions give developers a chance to share why real-money and a partnership with Betable is important to their strategy moving forward.

First up is Digital Chocolate’s COO Jason Loia. As you’ll recall, Digital Chocolate recently launched their first Betable-powered game SLOTS! Pocket UK on iOS.

1)    Why did Digital Chocolate become interested in offering real-money play in its games? 

RMG is by far the single-most transformative phenomena developing in the games sector. In short, RMG is Monetization D-Day.  It may not hit like a tidal wave all at once, but it’s absolutely coming and it will absolutely shake up the entire landscape.  We want to be riding the front of the wave and deliver great RMG content as it unfolds.

2)    What excites Digital Chocolate most about the industry’s move into real-money gaming?

“Moving the metrics” in a games-as-a-service business, especially social games, is an art as much as it is science.  New content, new flow, new plumbing, tweaks, optimizations can all create the desired lift, but nothing can create such massive jumps in metrics as layering in RMG.  It represents a remarkable step-function opportunity for game companies like Digital Chocolate and others, we know it can revolutionize the way the industry thinks about game development, distribution, and monetization.

3)    Why did a partnership with Betable make sense for Digital Chocolate?

Unless you have the luxury of massive resources and lead time to go wrangle your own gambling license, then the only logical option is to partner with a platform provider who can enable the RMG piece for you overnight.  Digital Chocolate at its core is a veteran game crafter, and taking on RMG on our own would be a tedious, time-consuming, distracting, and potentially highly-risky endeavor.  Betable knows RMG, they are a professional, talented, and focused team that delivers, and that allows us to focus on pure game-making.

4)    What are Digital Chocolate’s real-money gaming product plans? 

We are very excited to see our first RMG social slots mobile game, “Slots! Pocket UK”, having launched in the UK.  We also have plans to expand our RMG offering to include our innovative BlackJack Buzz game, as well as other titles in development. We strongly believe RMG can be a significant revenue stream for us, especially as new territories open up and the audience expands.

5)    What game other than one of your own would you love to see include real-money play? How would it work? 

The lowest hanging fruit target for RMG will be the casino genre, that’s clear as day, but what’s next?  We think that the bigger opportunity could very well be the convergence of true social games and RMG.  And by this I mean games for gamers, racing games, fighting games, strategy games, sports games.  Not everyone’s a gambler, but everyone plays games (whether they admit it or not) so the audience size could be much, much greater than that of the classic casino genre.  Digital Chocolate’s sweet spot is high quality, social, competitive gaming for mobile and web, so we think we’ll be in good position to pioneer this space with partners like Betable.

By the numbers we had:

• More than 80 participants
• 14 submissions
• 7 prize winners
• 4 judges from a combination of Betable, Big Fish Casino and Corona Labs
• 3 amazing sponsors: aarki, Corona Labs and TapJoy
• 3 bottles of Bulleit Bourbon

Our Grand Prize winner, Nathan Whitehead the developer of the winning submission Gem Miner, took home an impressive prize package- a team trip to Las Vegas, $10,000 in Betable credit, $5,000 in aarki distribution, a Corona SDK Pro seat and 10,000 free installs from TapJoy. Nathan, you’re going to have to find someone other than Lady Luck to join you in Las Vegas!

Betable Hackathon 2.0 winner Nathan Whitehead accepts his prize from Betable’s CPO Ya-Bing Chu

An indie developer and the founder of Nathan’s University, Nathan develops software and teaches online classes. Most recently he developed and launched Gem Girl on Roku- check it out if you have one.

As for the winning submission Nathan says, “Gem Miner is a simple game that is a cross between Dig Dug and a slot machine. You move left and right to choose where to dig, then dig down in hopes of unearthing valuable gems. Blocks and lesser gems tend to be near the surface while more valuable gems hide deeper down.” I’d add that Gem Miner is a solid example of a slot machine mechanic that doesn’t look like a traditional slot machine. This is exactly the kind of innovation we at Betable get excited about.

As for real-money play and the Betable platform, Nathan shares, “I see real-money gambling as a huge opportunity. Betable promises to cut out the legal and regulatory headaches so that I can focus on creating fun games that people want to play. Making games – FUN; dealing with regulations and compliance – NOT FUN.”

In the coming weeks we will post more information about our winners, but in the meantime a huge thanks to all of those who attended and made the event a success.

And who knows, maybe if you ask him nicely Nathan will take you to Las Vegas?

Betable is excited to announce that Jonathan Flesher has joined the team as Executive Vice President of Business Development. Jonathan brings a wealth of diverse experience in games, digital entertainment, and finance having previously worked at JP Morgan, Electronic Arts, and Kohlberg Kravis Roberts & Co. Jonathan was most recently Vice President and General Manager of Business Development at Zynga, where he oversaw Zynga’s deal to enter the real-money gambling space.

“Finding an early stage startup with such huge potential isn’t easy, but making the decision to join it is,” said Flesher. “Real-money gaming has been a major focus for me over the past couple of years- I understand its barriers to entry as well as its potential to disrupt. Betable is a frictionless way for developers to enter the real-money gaming market and I’m ready to play a part in the massive opportunity this team is creating.”

The Betable team can’t wait to work with Jonathan to realize that potential. “Jonathan is well known in the industry for both his vision and ability to execute, we couldn’t be happier to have him join the Betable team,” said Christopher Griffin, Founder & CEO of Betable. “I’m confident that he will help grow our business and more importantly help our partners grow theirs.” I couldn’t have said it better myself. Welcome Jonathan!

Last week, SGN announced a new partnership with Betable, with plans to roll out Betable-powered games overseas beginning in Q1 2013. As the real-money gambling market heats up, we couldn’t be more excited to add SGN to our growing list of premier game developer partners. With 35 million monthly active users, 12 top-10 titles on the Apple App Store, and a strong cross-platform portfolio including hit games like “Panda Jam” and “Bingo Blingo”, we look forward to what the future holds.

“We are excited to offer our users who love our games the ability to ‘up the ante’ and play for real money,” said SGN co-founder and CEO Chris DeWolfe. “Real money mobile gaming is in the future.” Indeed, real-money gambling on mobile is already expected to be a massive market, and that’s without including the potentially huge market awaiting regulation in the US.

BusinessWeek included this announcement in a print piece about SGN, Betable, and the social gambling market. To read it online, click here.

Photo Credit: Giacomo Balli (@bigballi)

On November 15th, over 100 game developers attended our latest SF Game Monetization meetup, “New Opportunities in Mobile Monetization”. With three outstanding speakers, we packed the house at IGN’s San Francisco office on 2nd Street. Those who attended were lucky to receive the presentations from the speakers directly, but Brian Sapp of Tapjoy graciously agreed to share his presentation online. With great data and new ideas for monetizing mobile games and apps, enjoy our summary of each talk below.

Brian Sapp, Director of Developer Partnerships, Tapjoy

Brian’s presentation set the stage with a great overview of key mobile ARM features and a few you might have missed. For acquisition, he gave detailed information on what kind of volume you can expect for each channel:

Clearly, getting Featured Placement in an app store is the best marketing you can get. It combines massive free exposure with the social proof that the store itself found your game exceptional. Brian has great tips in his presentation for getting Featured on the Google Play Store, and we have tips for iOS in our ASO Guide (coming soon).

Brian then went on to cover Retention. First and foremost, nailing the new user flow is key for capturing that first time user. Next, social systems, daily battles, and push notifications all served to improve retention significantly. Retention is incredibly important because it gets players invested in your game, which helps tremendously with Monetization.

For Monetization, focus on making your store available at each point where a user would need it, such as when they run out of money or cannot afford a new item. Next, a well designed store with clear images and tiled design leads to more purchases. Lastly, Brian shared some good data on what types of ads work best for each audience:

Brian capped off his great presentation with a checklist of things to consider before you launch, including key metrics to aim for when testing your app in another English-speaking country:

Dynamics of Mobile Game Monetization
Marco DeMiroz, CEO, Playfirst

Marco talked about the mobile game monetization landscape and the ways that Playfirst tackles its monetization challenges. In laying out the landscape, Marco showed that while Arcade games dominate the Free chart, they don’t monetize well, while Simulation games and Casino games monetize significantly better. However, the Arcade apps that dominate the Top Free rankings can serve as acquisition tools for big game companies with a network of games, which can then use internal advertising to promote better-monetizing games within its own ecosystem. This is partly why Zynga’s mobile division has shifted focus from Simulation to Arcade games in the past 8 months, and Disney’s Arcade-filled catalogue is now starting to build more Simulation games to establish a balance between volume and ARPDAU. They are at different stages of the mobile empire lifecycle: build Arcade games to get users, then Simulation games to retain and monetize them.

When it comes to Playfirst’s own success, Marco shared a lot of the processes that made their Dash franchise a consistent hit over two years, with over 40% of players retained from over 120 days ago. They have a closed-loop core live ops model that starts by identifying a key problem or metric they want to improve, and then modeling it out. They compare Actual data to their Model to understand what assumptions about their model were wrong and improve the model. Then, with the improved model, they’re able to test a bunch of scenarios ahead of time before A/B Testing the best scenarios in the wild. This process is fascinating because they can gauge ahead of time what are winning ideas and what aren’t, helping narrow down the amount of A/B tests to those with the highest impact. Being data-driven before testing even begins is huge.

My favorite takeaway from this presentation was Marco’s advice on conversion. Once a player converts for the first time, they are more likely to convert again. This means that nailing that first conversion point is hugely important. Rather than throwing out offers from the get-go, you should do everything you can to make that first conversion point compelling.

Offline Meets Apps: Monetization and Distribution Opportunities
Alex Rampell, CEO, Trialpay

Alex spoke to what he believes is the largest untapped advertising opportunity to-date: mobile to offline. Right now, mobile advertising spending is only 1% of worldwide advertising budgets, while users spend almost 10% of their time in a mobile device. The primary reason, he said, for this lack of capitalization is the fact that most mobile advertising is for other mobile apps or services. The value of users in these services is low, so their advertising pockets remain shallow. But the average value of a Starbucks customer, for instance, is far higher. People take their phones everywhere, and yet mobile advertising has yet to connect the dots and advertise offline services effectively.

The primary challenge with mobile-to-offline advertising is tracking: how can you get a user to make an offline purchase in a way that can be tracked and you can get credit for it? That’s what he says TrialPay and other companies are working on.

Want to see more talks like this?
Join the SF Game Monetization meetup! We meet monthly for networking, speaker sessions, panels and more.