I've been in love with video games since I was a kid and have been fascinated by entrepreneurship since my first year of college at Carnegie Mellon University. Now I want to turn those dual passions for games and entrepreneurship into an career through my work with cool new game concepts and ideas. I currently do Marketing and Customer Development for Betable, which has built the only platform in the world that legally lets you integrate gambling into your games.
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Advocacy / Business / Game Design /

Woman Playing Slot Machine in Casino

It almost seems like overnight, social gaming became a $2 billion industry with hundreds of millions of players worldwide. As we mentioned in our blog post, Exposing Social Gaming’s Hidden Lever, social gaming leverages the same game mechanics and psychological cues as slot machines to hook players. To us, it was no surprise when we found that social gaming is popular with the same demographics as slot machines.

 

Take a look at the audience that modern social games attracts. Much of the gigantic player base that the most popular social games has acquired was gained from demographics far outside the typical video gamer. An InsideNetwork study came to the conclusion that on average, almost 70% of social gamers were female:

average social game player gender distribution

This flies in the face of the typical “gamer”, but it’s quite similar to the typical slot machine player. Among women polled in a Harrah’s survey in 2003, 81% of women favored slots and electronic gaming. This shows that while women are not necessarily the majority of gamblers, when they do gamble they prefer slot machines. The correlation becomes even more apparent when you see social gaming’s demographics by age:

average social game player age demographics

While the sample size is limited in this study, the data paints a convincing picture: both Social City and FrontierVille see half of their player base come from players aged 26-45. More data was released supporting these findings when GigaOm reported that the average social gamer is a 43 year old woman. When you compare this with slot machine players surveyed in a University of Waterloo study, whose average age was found to be 39-45 years old, you see a clear overlap between slot machine players and social game players.

Before social gaming, women young and old were still a relatively untapped video game market, and one that had both time and money to spend on games that could capture their interest. Once they realized the potential opportunity, Zynga and other social game companies openly pursued this new market, with Zynga’s chief game designer Brian Reynolds’ stated goal being to make “mass-market entertainment everyone can play”. Reinforcing these demographic trends is the fact that female focused games like It Girl have become massive successes.

It Girl employs gambling mechanics

Social gaming’s use of gambling mechanics to engage and retain users also helped the industry unlock a massive new market of female players. It’s no surprise to us that these mechanics are effective with a similar group of users across different industries. And with women now playing more mobile games than men, we expect these mechanics to cross over as countless game companies try to recreate social gaming’s success on mobile.

But why do social game companies use gambling mechanics? Short answer: they work. Over 60 percent of social gamers say that they play for over half an hour at a time, and 28 percent of them have purchased virtual currency with real-world currency. However, this means that 72 percent of social game players have never purchased virtual currency.

virtual currency has no cash value

This is no surprise: unlike in a slot machine, when users purchase virtual currency they know that they are never getting their money out. While social gaming’s $2 billion market is nothing to scoff at, slot machines nationwide pull down $1 billion a day. Could more of those 72 percent never-purchasers  be converted into paying customers if they had a chance to win cash playing their favorite games?

This is why real-money play is such a great fit for social games. The social gaming market has the same demographics as slot machine players, and over 50% of social game players are outside of the US. This would be a win-win for social game companies and their players: social game companies could leverage their existing games and player base, while players would get the option to win cash when playing their favorite games. Real-money play is a compelling opportunity to innovate in the social game space in a way that boosts revenues. Social game companies should take note.