Real money gaming - A safe bet?

Real money gaming - A safe bet?
Will Freeman

By Will Freeman

April 3rd 2013 at 3:02PM

Could business opportunities in the gambling sector pay off? Develop investigates

The relationship between the video game industry and gambling sector has long been fraught with tension.

Since arcade cabinets and slot machines first began jostling for public space in the 1970s, game developers have been understandably cautious about attention from the world of ‘real money gaming’.

And while it’s easy to draw parallels between the industries – both center on mathematically constructed gameplay, and to a lesser or greater extent each typically demands financial input from the consumer – defining what separates them in a meaningful way is less simple.

Ultimately, the distinction is a cultural one, and something abstract, framed by individual opinion. To many artistically motivated video games developers gambling is a cynical business, conceived to exploit the player, where creativity of games design languishes, itself a victim of the need to turn profits.

They see gambling – quite possibly rightly – as an industry dominated by those that wear suits, where the need for underdressed female booth attendants at trade shows remains a standard.

To others, real money gaming is a place of iconic, even ancient games mechanics, where systems like poker’s are the subject of much academic study and cultural impact.

Whatever your opinion, one thing is certain. A new wave of traditional video games developers and service companies are penetrating the gambling sector, and they are being greeted with open arms.

The assumption is that real games developers don’t do gambling, but could it be that there’s an opportunity not just to make money, but to establish a new creative frontier for studios that warm to a challenge?

YOU AND WHO’S KONAMI?

The first wave of game companies to embrace gambling were the giants of the once glorious arcade industry – and currently outfits like Konami boast divisions devoted to crafting slot machine titles.

But today’s generation of studios heading to the other side come from somewhere else; namely the creators of the once moneyless casino games seen most commonly on social networks.

Gambling laws are famously complex and vary from nation to nation, but in countries like the UK new deals have let real money gaming take place on communities like Facebook.

That means that those already building games for social networks now have a chance to embrace an industry that sees per-player values come in an average of 15 times higher than the numbers seen in the casual and social space. 

Similarly, as physical casino owners increasingly replicate their business in digital form on websites, browser developers are seeing an increased demand for their skills and methods from the gambling business.

As a result, a range of services to support developers now exist, taking creations – via intricate APIs – to gambling operators across the globe and handling the gameplay, bet resolution, licences, regulation, fraud protection and transactions across their servers.

YOU BET

Ya-Bing Chu, former Zynga vice president, and one-time member of the early Xbox Live team, serves as chief product officer of one of those platforms, Betable.

“I know where some game developers are coming from with how they perceive the gambling and real money gaming space,” admits Chu, recoginsing that to some developers there exists a stigma associated with working in the real money gaming industry, simply because of its explicit focus on money.

“The traditional console-based games business saw studios starting to compete on the polish and finish of triple-A games a long time ago. So now you see these cinematics and all those things, and arguably those are very important to story-based games, and they are very entertaining, but ultimately most games still come down to mechanics of risk and reward; that’s what makes it a game – it’s all about chance and results,” offers Chu.

“The core of any game, as much as the art of it, is the mathematics of it – the spreadsheets behind the games. That’s where the game designers are thinking, and that’s not so different from real money gaming.”

And, argues Chu, within much of the video games industry real money remains core to ‘success’, be it through in-app purchases or full payment upfront. The players, he highlights, still invest their hard-earned cash; it is just the kind of reward that distinguishes real money gaming.

While video games players see entertainment, achievements and high score rankings as their reward for spending money on a video game, gamblers have a more clear cut compensation in mind. Quite simply, they want more money.

“In that context, it’s not selling out for developers to move into this space. It’s just a different business model to satisfy different player aspirations,” offers Chu.

One developer already working with Betable is social giant Big Fish, which in March last year acquired mobile social game developer Self Aware Games and its parent company, Social Concepts.

Since then Big Fish has taken Self Aware’s mobile moneyless gambling game Card Ace: Casino, rebranded it as Big Fish Casino, introduced the option for real money gaming and hooked the game into the Betable platform.

The prospect with projects of that ilk, says Big Fish’s GM of Big Fish Casino Carey DiJulio, is that of creating games that see the player invest money both for entertainment and winning real money.

“It’s definitely true that players are now investing money for entertainment and for a real money gaming experience,” she says.

“You see people spend long periods of time in our games, enjoying the playing experience as much as the possible financial outcome.”

If that really is the case, then developers put off making gambling games by the idea that they will lose their claim to being creators of creatively worthy titles may have to reconsider.

BRIDGING THE GAP

Another platform conceived to link developers with gambling operators is Odobo, which centers around HTML5, a distinct GDK and a marketplace designed to take the pain out of distributing real money gaming titles.

And Odobo’s CEO and founder Ashley Lang is equally convinced that making gambling games and titles of creative worth can be the same act. His logic is that the gambling space has long been dominated by homogenous titles, meaning the doors are wide open for innovative games design.

“This real money gaming industry, because it has been a bit of a black box for the game development community, has had to put up with a fairly narrow channel of content production from a very small group of studios,” says Lang.

“There’s a need for creativity and entertaining consumers, and to compete with other digital entertainment forms, so its necessary for the [gambling] industry to streamline the processes and for more developers to participate without having to become operators themselves. That means its now a time of huge opportunity.”

And for game developers who like a game design challenge, suggests Lang, the process of making something creatively distinct that is exercised on top of a mathematical model that is commercially viable could prove very interesting.

Developers may also be concerned that the gambling business is one that has to address issues like addiction and irresponsible play, but on that matter Lang is reassuringly frank.

“There do have to be boundaries for developers,” says Lang.

“With the opportunity comes the reality that it is the regulated gaming industry, and we need to protect the players and ensure responsible gaming and everything like that – that has to come first. But those boundaries leave a lot of room for creativity and commercial opportunity.”

Boundaries certainly work to foster creativity over on the far side of the game development sector, where indies tackle game jams that are largely defined by working within restrictions of time and brief, so Lang’s point is not without parallels.

A FLASH IN THE PAN?

But as the game industry increasingly becomes fascinated with small studios and independents, and unusual and commercially unconcerned works increasingly stand as champions of the development business’ moral worth and creative potential, there will always be companies that refuse to accept gambling as something games developers should consider.

“My gut instinct is that it’s a flash in the pan,” says consultant and former game developer Will Luton of the trend that sees studios embracing gambling.

“Maybe that’s because I don’t want the crossover between gaming and real money gambling to happen on a personal moral basis. But also I think existing, long-established gambling companies, casinos, live betting and bingo, have the edge. They know the markets, they have the tech and the set up – they’ve been doing it for years.”

Luton does predict that we will see more of those established outfits snap up social and mobile developers as they look for new content with which to charm gamblers, but he is clearly less than sure of how many studios are eager to embrace real money gaming.

And he isn’t alone in questioning the reality of game makers of every kind rushing to place a bet on gambling.

“In theory, I love the idea of game developers applying their skills to the problem of designing games for gambling,” explains game developer Scott Jon Siegel. “But I don’t think that’s what’s actually happening right now.

“It’s not about game designers solving interesting problems in the gambling space – which I’m all for. It’s more about games developers capitalising on impending online gambling legalisation with an inevitable deluge of poker, blackjack and slot machine apps. That’s what I’m dreading. More ‘flavour of the week’ trends and a lot of samey products.”

Regardless, some are clearly making the move, and as Develop met with Odobo’s Lang at the UK’s ICE gambling trade show, the variety of big name studios of every kind making enquiries at the company’s stall was clear for all to see.

CASTLE BUILDERS

If this trend is a reality, then ‘opportunity’ is its buzzword. And that opportunity does not stop at developers.

Rabcat started out as a video games art outsourcer in 2001, and continues to offer that service. But in 2003, the largest Austrian gambling platform, Win2Day, approached Rabcat about providing assets. 

Ultimately, as that deal progressed Rabcat started making complete games for Win2Day, handling the entire development process, changing the company’s business model to the point that it formed an entire new wing, Rabcat Gambling.

For Rabcat, open mindedness to real money gaming has seen the company expand and assume a full developer status.

And yet it continues to outsource art for the video game industry; a point which Rabcat CEO and founder Thomas Schleischitz says demonstrates why work in video games makes for the perfect foundation for success with gambling work.

“Working in the video games space is definitely a good foundation for working in the gambling space,” states Schleischitz.

“If I look back to 2004, we had a huge advantage over the existing gambling companies in what we could offer. We brought fresh ideas and a completely different understanding of what quality means. Being experienced in video games is a hugely important door opener, and our continuing to do that work for games means we continue to exceed meeting the expectation of quality.”

As a result Rabcat has made Castle Builder, a real money gaming title that, while built on a slot machine base, offers players a simple civilisation maintenance mechanic.

Like many of the first wave of gambling games to move away from the long-established models, it is still clearly rooted in the slot gaming arena. But as a starting point for what is possible, it has become something of a poster child for what developers may be able to do to refresh the gambling business.

Moving the medium beyond that is a challenge, says DiJulio, but tackling that challenge early could thrust developers as yet unfamiliar with the spotlight to the forefront of the industries’ conscience.

“The first developer that comes out with a non-traditional casino game that works as a real money game is going to learn some really interesting lessons about how that translates,” she says. “Being the first to do that will be a very big deal.”

Many will remain sceptical of regulated gambling as an opportunity for developers and steer well clear of the entire industry, while others will happily embrace a business opportunity of such momentous size. 

And just maybe a few will seize on what they see as an opportunity to shake up and redefine one of gaming’s most long-standing forms, armed with creativity, a desire to innovate and experience. And perhaps a few will even realign the suit-to-utility-kilt ratio at future gambling trade shows.