How Social Casinos are Changing the Online Gaming Landscape
Since almost the beginning of human time, people have been looking to the stars to find the answer to life’s everyday obstacles. From agriculture to love, it seems like the answers are always written in the night sky. The same holds true for people looking for lucky days to gamble! Your gambling horoscope and gambling luck calendar can make a big difference in boosting your confidence, helping improve your gambling luck, and helping you win big!
Well, you can play against people worldwide and use virtual currencies specific to the provider to play a few hands and not have to concern yourself with monetary loss. Although the game’s premises are the same, there are noticeable differences in the necessity to make deposits with real money, which helps to distinguish them. Today, we will be exploring how they’re making such a wide-scale impact on the casino sector, some of the reasons behind it, and what resulted in them becoming a multi-billion dollar idea.
What Are Social Casino Games?
Evolution of Real Money Online Casinos
Unless you lived through the monumental changes introduced by the internet, it’s hard to detail just how much the gaming world has changed. Analysts became increasingly confident that digital and online gaming would be the dawn of a brighter day.
Online gaming evolved throughout the mid-1990s, and as the internet continued to permeate other vital sectors of the economy, it became apparent that there would be significant possibilities for companies moving to a digital-first platform.
Buoyed by the trailblazing leading-edge smartphone technology that emerged throughout the 2000s, online gaming benefited boundlessly as a result. Smartphones with internet access became intrinsic to society, and online gaming rode the crest of this wave to go from the quiet corners of the industry to a multi-billion dollar global pillar, spearheading innovation and profit.
Social casinos began to follow the path that real money online casinos had created, starting off as a small part of the industry and quickly becoming a force to be reckoned with. The industry is now worth over $6 billion [1] due to a number of factors. Most notably, decreasing amounts of disposable income that bettors had available over the last few years, yet still wanting to play casino games. This financial squeeze has been the primary factor in the numbers expanding so rapidly from 2019 onwards.
The Boom of Social Casino Games
Of all the facets to emerge from the digital casino Big Bang in the 1990s, social casinos buzzed away in the background, reaching a sizeable, modest audience. It wasn’t until recently that social casinos reported a significant surge in gamers seeking their services. Although there’s still some debate about what drives this, a few significant variables undoubtedly play their part, with the absence of real money playing the chief role.
A social casino game appeals to a global audience, which has been fused thanks to the amalgamation of the internet and enhanced smartphone capability. By allowing users to increase their knowledge about casino games and remove the stress of losing money, social casinos have risen to attract millions of global users, which continues to grow.
Key Innovators and Market Leaders
- Caesars Entertainment Corporation: Arguably the most high-profile digital casino name to have made significant steps into changing how the industry operates ($9.81 billion). [2]
- Zynga: Over 15 years of global visibility and reputation in social gaming. Its market cap is worth $9.30 billion. [3]
- IGT: A similar, successful global operation that pioneered the design of social casino marketing (it has a market cap of $5.45 billion). [4]
- Playtika: The largest company in the industry by market cap ($2.99 billion). [5]
The market leaders, such as Caesars, are the most profitable, but this is also down to their wider offering of traditional casino games in addition to a social casino offering. Playtika is the biggest name that specializes solely in social casinos. Zynga, on the other hand, is a specialist company in social casino gaming that was established in 2007, when such platforms were nowhere near as widespread as they are today.
Zynga – A pioneering app
Zynga helped pioneer the model of using digital advertising and purchasing in-game tokens to legitimize the business model of social casinos. It was a blueprint that dozens of companies followed.
An app works like a real money alternative, but Zynga was the first to develop one that consistently made a profit. Their pivot toward this free-to-play model began in 2007, and by 2010, the company generated over $90 million in profit almost exclusively through its pioneering social casino gaming and marketing approach.
Zynga has retained its core structure after branching into video gaming. Following a rocky, turbulent period, gaming giant Take-Two acquired them for a multi-billion dollar figure in 2022. [5] Despite this slump in profitability, the company is one of the pioneers of social casino gaming.
Monetization in a Virtual Economy
Looking in from the outside, the most common question at social casinos revolves around their profitability. The scope of profit in the digital casino industry is enormous. There’s no disputing how significant their profit margins are. However, a social casino faces entirely different challenges. They need to think outside the box to sustain their business because they cannot legally offer a traditional casino betting market without it being classified as a wager.
As with any digital casino business, there’s been a significant focus on:
- The power of advertising revenue
- Exclusive perks for repeat customers
- Providing X amount of free in-play tokens before charging more for those gamers who wish to carry on playing
Despite not having the luxury of constant deposits like real money casinos, by effectively channeling and incentivizing the in-game purchases and allowing revenue to flow from key advertising partnerships, many social casinos have embodied a successful business model. These three components comprise the vast majority and are the most impactful forms of monetization in social casino gaming.
Competitive Dynamics
A monopoly in any industry isn’t healthy for long-term business or competition. Some analysts believed that land-based casinos held a monopoly over the sector, and many thought this sector wouldn’t be challenged in its supremacy. Once the emergence of digital casinos posed an existential threat, many chose to revise this opinion drastically and adjust their models accordingly. Boiling it down to the most crucial variables, social gaming offers free-to-play slot games and card games, offering a significant alternative to simply risking your money every time you place a bet. A social casino is ideal if you want to brush up on your poker rules and apply them effectively without worrying about losing cash at a real money online casino.
While the competition still exists, providing an avenue for people who want to experience the thrills and highs of poker and blackjack without being relieved of their cash is a huge factor to take on board.
As social casinos have generated billions in profit since the early 2010s, they’ve been able to focus on their gaming catalog, resulting in a much stronger and viable alternative. You can now play all the same games, which hasn’t always been the case. This has been a key reason for the surge of users making the switch.
Technological Integration
Virtual Reality (VR):
VR aims to bring the aura and atmosphere of a casino without having to leave your home. It is a bold move, and it may have a different, slower impact than other casino innovations, such as mobile app gaming, have had over the last decade. Still, analysts believe that, in time, this will become an increasingly influential part of the industry.
Artificial Intelligence (AI):
The same applies to AI, providing further, real-time updates to casino companies, allowing them to divulge their data more effectively and shape their business and marketing strategies as they move forward and provide human-like AI customer service, saving costs and not having to hire as many physical staff to do the same role.
Traditional and social casino games’ ultimate aim with fresh technology is to provide a more convenient customer experience and to increase their profit margins. Given that some of the world’s most prominent technology companies like Apple, Meta, Tesla, X, Alphabet, and Nvidia are all heavily invested in both AI and VR, it would be foolish to suspect they won’t permeate the casino industry significantly between now and the end of the decade.
User Experience & Community Building
Like any digital business, the user experience is at the epicenter of a social casino. A strong, organic community revolves around a positive user experience, and in social casino gaming, the positive user experience revolves around game selection and ease of use. Many social casino gamers will use the service as a free way to expand their knowledge and experience, whether they’re looking for social casino slots they most enjoy or sharpening up their poker or blackjack techniques. As this is a mutual quest amongst many in the social casino gaming community, it has resulted in organic community growth and enhanced user experience.
In addition, interface features that have helped social casinos obtain customers include point leaderboards on their site, which include in-game prizes ranging from free play coins to gift vouchers.
Impact on Traditional Gaming
Add the emergence of social casinos into the mix, and you have a varied and healthy set of competitive industries battling it out. Although initially, it might seem that traditional gaming is in jeopardy because of such convenient alternatives, the truth is that it has fuelled a much more competitive environment.
In turn, this has resulted in hundreds of companies trying to chisel out their own niche area of the market and galvanize the sector to embrace the cutting-edge, groundbreaking technology needed to become a success. Social casino games play a significant role in that and have helped to turn a monolithic land-based industry into a global, digital empire.
Legal & Regulatory Considerations
Another positive aspect social casinos have is that they do not fall under the same strict rules and regulations as traditional casinos. When a platform offers casino gaming or any other type of bet, they must ensure they can legally do so. They can be fined and prosecuted if they do not adhere to the legislation and laws of the country they’re operating in. The penalties are harsh because gambling needs to fall into a strict legal framework.
However, social casino games do not involve an exchange of wagers and operate entirely in their own framework. Due to the much lower financial stakes and implications, they’re largely permitted to operate across dozens of countries with no issues.
Many countries or individual areas have rigid gambling laws. However, their approach to social casino games is a lot more lenient. While we strongly recommend that you seek out information confirming the current gambling landscape in your country or jurisdiction, a social casino is generally a lot more permissible from a regulatory perspective than a real money casino game, which is another reason they’ve started to gain much traction.
Future Trends & Predictions
Although real money and social casinos attract different customers, the industry has more similarities than differences. Future trends will likely follow the predicted path of the overall gambling sector, with AI and VR set to play a more integral role in developing, structuring, and designing future business models and games. VR could be a decisive factor in strengthening the bond between communities of social casino players.
Virtual Reality casinos are still in their primitive stages, but allowing users to use VR headsets to play social casino games as though they are walking around an actual casino combines the best of VR. It will facilitate community building and engagement in the long term.
Mobile gaming continues to dominate the short and medium-term design models that social and traditional casinos implement. It’s hard to envisage any outcome other than mobile apps continuing their quest to take over the industry entirely, encompassing traditional and social casinos. So, while this might not be a new trend, it is something that will continue to have a more significant impact.
There will always be a market for land-based real money casinos, especially in popular tourist towns and cities. Still, economists are of the universal opinion that the online gambling industry and mobile casinos will continue to grow. Social casinos will follow the same path. Although payment systems and digital marketing approaches differ, the bedrock of these industries is primarily the same, and they often follow the same patterns and trends.
Conclusion
In addition to the convenience and enhanced cost-effectiveness, a social casino usually has interactive leaderboards or prizes whereby people can compete with each other. These positive additions help transform the online gaming landscape and push it toward more significant goals and achievements. The social casino industry will continue to play an integral role in that vision as we move further into this decade and beyond.
Serhii is an Data Scientist and SEO expert with over 11 years of experience. Since 2018, he has been the SEO Team Lead at an international marketing agency. He is also a professional poker player, specifically Texas No-Limit Hold’em, since 2019.
