Inside Asian Gaming

INSIDE ASIAN GAMING JUNE 2018 28 COLUMNISTS 8%. Zynga and Madfish come in next with around 7% market share each. Regulation is non-existent because social casino gaming with no prize or payout schedule is not considered to be gambling. Also, very few people understand the difference between gambling and social games. Interestingly, we recently saw China move to ban all forms of social Texas Hold’em Poker. In the US, gambling requires the presence of three elements: consideration, chance and some sort of prize. Players bet on the outcome of an uncertain event to win a larger amount. Social games are not gambling if they eliminate one of the three elements. Because the games are not regulated, operators are free to set the odds at any level they want. In fact, these games are almost never truly random. Game developers do not want players to get bored so the game becomes easier if a player is stuck on a certain level, or alternatively gets harder if the player is winning too quickly. This Dynamic Game Balancing (DGB) is automatic, because game designers want players to stay engaged and these games become very entertaining as a result. So if it is not considered gambling, how do social casino game providers generate the large revenues we see today? There are three main revenue models: 1. Free with in-app purchases (IAPs) – the most common and lucrative model. Distributing a free, entirely open-access game attracts players to download the app. Once players are engaged, IAPs offer additional credits, discounts and incentive chances to skip ahead or enhance the playing experience. 2. Freemium apps – Freemium apps involve some form of “upgrade”, perhaps to unlock exclusive levels. Non-game apps, Slotomania, although the oldest social slot game on the market, is still the most popular offering today with more than 20 million likes on Facebook. Clash Royale is one of the world’s most popular examples of an IAP – free to play but with the option for in-app purchases.