Once relatively niche, the skill games market has become increasingly mainstream. Jenni Shuttleworth discovers how the sector's growth has helped to attract a wider customer base and recruit players to other genres of online games
THE online skill games sector has recently enjoyed extraordinary growth rates. This growth has been driven by an online poker and gaming boom and also by an increase in awareness for skill games. Skill-based talent and quiz game shows have come to dominate TV ratings over the last decade, raising popular awareness that is being leveraged through brand licensing deals online.
"Huge operators wouldn’t have bothered much with skill games a couple of years ago," Alfred Hofer, head of marketing and sales at Greentube, told iNTERGAMINGi. He added: "Nowadays, the situation is becoming different. Increasingly tough competition and consolidation of the market have hit a spoiled industry. Customer aquisition costs have increased dramatically and new target groups are not flooding in by themselves."
With this in mind, skill games are an ideal line extension for existing operators who are seeking new opportunities and revenue streams, and for those looking to obtain a customer base they have never reached before. Hofer believes that operators should be looking at cross-selling the other platform services to this additional customer base.
A developer and provider of gaming solutions, Greentube specialises in 3D download games, casino, poker, bingo and skill games, and was recently awarded the title of Skill Games Developer of the Year. The company’s most popular games are an international mix of backgammon, solitaire, snooker and national specials like skat for Germany and chinchon or brisca for Spain. "People generally like to play the games online that they already know," said Hofer.
Although the popularity of online skill gaming is global, there is a higher penetration rate within the US and Europe where cash player ratios are traditionally higher because online payments are more familiar and operators have mature and trusted payment platforms. When it comes to the demographics of players of online skill games, Greentube has found that the majority of their players are between 25 and 40 years old, with approximately 35 per cent being female, a figure that is "dramatically increasing" according to Hofer.
Speaking to iNTERGAMINGi, Amuso CEO Barak Rabinowitz reported that 80 per cent of its skill game players are female, over 35 years old and enjoy quizzes and celebriy content. It may come as no surprise then that the most popular skill game in the company’s portfolio is The Weakest Link, which appears in a TV game show format and, according to Rabinowitz, "combines a recognised brand with an authentic and unique game play experience and stimulating content to resonate with players." Rabinowitz believes that although the majority of Amuso’s skill games players are females, the company could expand its appeal to a male demographic by tweaking the content to sports.
Another factor that helps attract a wider demographic is social networking sites. "Networking sites help smaller developers to quickly get in touch with a larger public for the price of a complete dependency on the network sites as they do not grant access to the end-user data," said Greentube’s Hofer. "In the meantime, most network sites (including Facebook) generate relevant growth on the back of these developers. For middle-sized and larger companies, it is no strategy for the long term to help others grow and lose contact with the end consumer," he added.
Rabinowitz believes that the biggest change to the online skill gaming market has been the onset of social games on popular social networks. "These games leverage many core skill game dynamics but integrate the social graph of the users to reach a much broader audience. In this context, social interaction, achievement and virtual goods replace cash payouts for unrivalled profitability." He continued: "Networking sites can help new entrants break through the market because in theory they make it easier to reach a critical mass of players without major marketing spend. At the same time, major operators can exploit social network APIs to acquire new viral traffic, leveraging the engagement of their existing player bases."
However, despite social networking sites helping new or smaller entrants, and despite the growing popularity of the skill gaming sector, there are still just a handful of operators who dominate the market. Rabinowitz told iNTERGAMINGi: "The single most important factor for multiplayer skill games is liquidity. Even the best game in the world will not take off without a base of players available to challenge on demand."
For Hofer, the overall quality of a game is what makes it successful, but more specifically he told iNTERGAMINGi that other factors contributing to a successful online skill game include: "The ability of emotionally grabbing people, a well-balanced community featureset, usability and design." He continued: "Skill games must have the ability of grabbing people’s attention and keeping it over quite a remarkable amount of time."
A successful skill game can also help to recruit players to other online products. Hofer told iNTERGAMINGi: "If talking about browser-based multiplayer skill games, the seamless integration technology and the level of customisation as well as the ability of connecting cash versions of skill games to an existing wallet system, make it very easy for players to seamlessly change between the full offering of operators."
Rabinowitz agreed, saying: "Skill games can definitely be used to acquire and upsell players to harder gaming, especially if a brand can be ‘franchised’ across a portfolio of games, or integrated deeply into gambling products. In this manner, skill games overlap closely with bingo, which monetises especially well with side games."
For this reason, an increasing number of decision-makers on the operator side are realising the importance of skill games for their future growth, but Rabinowitz told iNTERGAMINGi that he doesn’t expect there to be a huge increase in skill games on operator sites because of the risk of product cannibalisation. "Operators will lose money if users spend more time on skill games than higher revenue generating gambling products." He continued: "However, I expect operators will embrace skill games to penetrate social networks and the US market where their other growth options are extremely restricted."
Rabinowitz also expects skill games to converge with social games that live on social networks or on operator sites with a high degree of social network integration. "I think brands will play a greater role in distinguishing the winners from the losers in the market going forward," he added.
According to Hofer, the future looks bright for Greentube as the company negotiates with an increasing number of big players in the market: "We see ourselves as having a major future role on the supplier side in the future. The combined growth rate of existing partners and future partners to come will sustain Greentube´s past years´ annual growth rates of between 20 per cent and 40 per cent within the skill games sector."
