bwin.party and its great social experiment26th October 2012 7:09 am GMT
It seems the UK is becoming a real testing ground for all those blurring the boundaries between the virtual and the real. First there was Gamesys and Facebook. Now there is bwin.party and Zynga.
There’s an easy campaign for The Daily Mail to get all hot and flustered about. One of its columnists, a Dr Robert Lefever, wrote the following after the Gamesys deal was struck in August: “Probably 15 per cent of the population have addictive natures. They were born that way. That’s a fearful lot of potential gamblers or drinkers or druggers. And a fearful number of people to fill up the hospital beds, the prisons and the morgues. Compulsive gamblers, through their catastrophic losses or through crime, finish up in the same pits of despair as other addicts.”
According to his Bio, Dr Robert Lefever is regarded as “the pioneer of addiction treatment”. It is not quite clear who regards him as the pioneer of addiction treatment but it is certainly the specialist subject of his Daily Mail columns. Not the sole subject mind, he reserves a great deal of ire for the UK’s coalition government too, although not even his own website would claim him to know diddly squat about politics.
Lefever goes on to tell a woeful tale of how he himself is a compulsive gambler and ended up losing everything…. after he got ripped off by a fraudulent employee. His gamble, apparently, was “building up and running a rehab centre”. No, I didn’t get it either.
Sadly Lefever’s wife died, which was probably not that surprising given Lefever’s age, but he concluded: “Eventually, one way or another, we lose everything. This is what Facebook and Gamesys primarily depend upon for their profits.”
I have yet to read Lefever’s column on the evils of this tie-up between bwin.party and Zynga but presumably it will focus on the potential danger that he assumes millions of UK customers could face from this deal. However, it is not clear how many millions of UK customers will be affected by the deal.
Firstly, Zynga does not provide figures for the number of UK users of its games. Its annual report stated that 64 per cent of revenues came from the US but no other country accounted for more than 10 per cent.
Secondly, this real money gambling site will not go anywhere near Facebook. bwin.party is providing a white label Zynga-branded website. That means the real money website will not get direct access to Zynga’s customers through Facebook. Of course, you would expect Zynga to market to them but in all the discussion about converting virtual currency players to real money, there is (or should be if the theories are to be anywhere near accurate) an assumption that the real money play is going to take place on the Facebook platform, as is the case with Gamesys’ Bingo Friendzy.
As anyone who has tried to migrate players from one platform to another will know, players get lost in the migration. And that is when they are being forced to migrate to a game that they know and like. If you are asking them to migrate to a completely different game, where incidentally, they may lose real money, then that is a big ask.
I get the feeling that for all the excitement at bwin.party at a great deal struck there is a realisation that this is just a toe poked in the water – as Zynga CFO David Wehner alluded to when he said: “We view this as a first step into real money gaming, we believe it’s a good first step, but only a first step to what is a large opportunity.”
But hopefully this is the beginning of much bigger things to come. As proved by its deals with PMU in France and Danske Spil in Denmark, bwin.party is quite capable of delivering a perfectly good platform for Zynga. The added attraction of Farmville-branded and other Zynga-branded slots should be attractive to real money gamblers (particularly those with a soft spot for social games) regardless of whether they play Zynga Poker or not.
The website’s success might lie in how much of a Zynga flavour it has because, while Partycasino is good, there will be no revolution caused by Partycasino2 in red with a bulldog slapped on it.
Ultimately however, it is a long-term play. Much of the success of which will be governed by the speed of regulation in other markets. bwin.party would obviously like to get a crack at the Americans contributing 64 per cent of Zynga’s revenues.
However it is implemented and on whatever time scale, the success of this venture is no slam dunk – although it makes almost perfect sense for both parties. I say “almost” for the simple reason that it would have been far more exciting if Zynga had convinced Facebook to allow its new joint venture to run on its platform à la Gamesys. It’s interesting that Gamesys can do it but Zynga can’t but perhaps that will come too…
In the meantime, analysts (Stateside at least) seemed altogether more excited about the share buyback rather than the new business, which probably says a lot more about the analysts and share prices than it does about the new business.
Quote of the day goes to R.W. Baird analyst Colin Sebastian, who described bwin.party as “a legitimate player” – presumably as an explanation to all those gambling sceptics in the States. Well, it made me laugh.