How To Survive The

Social Casino Gold

Rush

• °July 2011, London – founded by 3 ex EA/Playfish execs• 60 staff today• Top-15 social casino company in revenue and audience• Raised $16.8M - last round ($14M) Dec-13 led by Endemol• Key product: Mirrorball Slots (Facebook canvas, iOS and

Android) • Founding member of ISGA (International Social Games

Association)

Social Casino today: a look at the market, trends & facts.

• May-14: Top 10 social casino companies have 70% market share (revenue). (Source: Eilers Research). Top 5 has 53% share.

Top-10 has 70%+ market share

4

Consolidation Ongoing

• 2010: 888.com buys Mytopia for $48M• 2010: Fremantle buys Ludia (undisc)• 2011: Caesars buys Playtika (Slotomania) for $100M+• 2012: IGT buys Double Down Interactive for $500M• 2012: RockYou buys Ryzing (bingo, undisc)• 2012: Aristocrat buys Product Madness (undisc)• 2012: Novomatics buys Cervo Media (undisc)• 2012: WMS buys Phantom EFX for $20M• 2013: Caesars buys Buffalo Studios for $90M• 2013: Caesars buys EA Montréal studio (WSOP, undisc)• 2014: Caesars buys Pacific Interactive (House of Fun) for $96M• 2014: GSN buys Bash Gaming (Bingo Bash) for $160M• 2014: Bally buys DragonPlay for $100M• 2014: Imperus Technologies buys Diwip (Best Casino) for $100M• 2014: Churchill Downs buys Big Fish for $885M• 2015: Intertain buys Gamesys for $700M+• 2015: Novomatic buys AbZorba (undisc)

$2.7B+ in the last 4 years

The March To Mobile

• No more audience growth on web (Fb canvas).• Mobile > Web audience since mid-13.

• Over 1,000 social casino apps across all platforms

• 25-30 social casino studios with over $10M annual revenues

• Audience remains relatively stable• Slots/Casino: 20-25M addressable market• Bingo: 12-15M • Poker: 40-50M

Saturated market

Slots category dominates social casino

8Source: SuperData Research

• ‘Pure’ Slots account for 38% of social casino revenue and 32% of audience in total

• However, most of the ‘casino’ category revenue comes from Slots (e.g. DoubleDown generates 70%+ of revenue from Slots)

• Slots + Casino represents 76% of revenue and 55% of audience

• Bingo accounts for 13% of revenue and 14% of audience in the category

Rising user acquisition costs...

• In USA, Australia: CPI for social slots are $5+ (on iOS)

• That means absolute minimum product metrics required to pay back within 9 months are• Retention:

• D1 35%+, • D7 18%+, • D30 8%+, • month-on-month retention after D30 90%+

• Monetization: ARPDAU $0.25

5 years of growth... And pain.

2010 2015

• ‘Puppies and Rainbows’• $200 million market• Good product = growth, success• Lots of small studios• Facebook canvas main platform

• ‘Happy days are over’• $3 billion market• Very tough, saturated• Large companies dominate• Top-10 has 70%+ market share• Rising production and marketing

budgets • Facebook canvas hit plateau, huge

growth on mobile, tablets

6 possible ways to succeed

1. Build a world class team and raise a ton of money• E.g. Playstudios, Plumbee: raise $15-30M, hire top industry experts to

compete with Caesars, IGT, ...

2. Go local

• E.g. Akamon (ES): focused only on Spanish-speaking/LatAM markets• Local products, deeply localized (local card games, games with a ‘local

flavor’)

3. Find an under-served audience• E.g. Huuuge Games (PL), targeting younger, male social slots players• Similar game mechanics, different themes

4. Go niche (away from slots, bingo, poker)• E.g Come2Play (IS) with Backgammon Live

5. Go creative, invent a new game• Find a new angle, new game mechanics, invent a game from scratch.

This is what game studios used to do.

6. Get lucky

Q&A@raf_keustermanswww.plumbee.com