The incredible growth of the social gaming market has put this segment under the radar of online gambling operators hoping to tap into this trend. Comparatively, social gaming operators in the US are hoping that the multi-billion-dollar online casino market will find better ways to monetize their player base, considering that only 2% of social gamers pay real money.
In simple terms, online casinos have the money, while social games have the engagement and reach. However, there’s a huge opportunity for the two markets to boost each other’s growth despite their differences. Here’s a look at how online casinos differ from social gaming in the US and what implications these differences have.
Regulatory Landscape
As social gaming and online casinos in the US continue to evolve, operators and players must navigate the complex regulatory landscape governing both sectors. Online casino games that involve real-money stakes usually feature a complex patchwork of state regulations that may differ significantly. For instance, you can easily find the “Michigan casino sites” website, since the state has adopted a progressive approach towards regulating online casinos. However, there are other states with strict restrictions on gambling.
In contrast, social games work within an ambiguous regulatory landscape in the US. Since these games are designed with fun and social interaction in mind, often without exchanging any money, many US states allow publishers to legally offer them within their borders. However, some modern titles are blurring the line between online gambling and social gaming, posing a challenge for state regulators.
Most social gaming sites in the US operate under a freemium model, where players enjoy the experience for free and are encouraged to spend money on in-app purchases. The model raises many regulatory questions as to whether the virtual currency and items in social games have real-world value. That has prompted some US states to closely analyze social gaming platforms for potential betting elements.
Social Games Are More Engaging
Studies show that social gaming sites have a higher level of player engagement than online gambling sites. An active social gamer typically plays at least once within two days on average, unlike an active gambler who tends to play casino games once every four days. As such, social games show twice the engagement levels of online games.
Interestingly, 60% of all the single-payment social players continue playing for fun long after making their one-time payment. Compare that to the online casino space where only about 7% of the players that join a particular platform continue playing after spending their first deposit. That suggests that social players are more engaged than online gamblers as they keep playing although the activity doesn’t involve any real-money rewards.
Conversion Rates
Beyond the engagement rates, there’s a huge difference in the conversion rates of online gambling and social games. Social games have a 2% conversion rate on average, while online casino games stand at about 18%. The 9X difference is because there’s a huge database of non-paying social players, which results in a lower conversion rate.
In online casinos, the players visit the website for a certain purpose. As such, the player is aware that they need to spend their money, which leads to higher conversion rates. Additionally, games of chance are highly attractive to players hoping to win big after a lucky streak.
Strategic Implications
The fact that social games don’t feature withdrawal options has significantly distinguished this segment from online gambling. That’s a crucial factor as it influences the level of freedom that game publishers and marketers have when promoting their games and offers to players. For instance, CRM experts are free to go wild with their social media campaigns since there’s no fear of fraud or attempts to use the gaming system to trick the house.
Consequently, CRMs can be used more extensively in social games as they highly engage and increase their lifetime value. Additionally, social players tend to bring other gamers more than online gamblers introduce other people to their favorite casino games. That’s mainly because of the key social interaction factors like group competitions and the freedom marketers have in rewarding players for inviting their friends to join.
With that in mind, online casinos are hoping to discover exciting ways to add social gamification aspects to their games. These aspects are integral to social games and can lead to higher engagements if casino sites successfully incorporate them in their titles.
Conclusion
There’s a significant difference between playing social games for fun and betting on games of chance through online casinos.
While some social games require players to pay a one-time price to start playing, they differ from online casino games in terms of player engagement, conversion rates, and regulatory landscape. However, modern games are blurring the lines between social gaming and online gambling.
