With marketing budgets facing pressure across the gaming landscape, some industry analysts are concerned that social casinos – at least some of the lot – could be crippled irreparably as a result.
“With acquisition costs rising, studios are being forced to invest more in marketing budgets to compete in a crowded sector,” Gaming Intelligence reports. “Will this slow down innovation, and how are operators and suppliers dealing with it?”
With innovation the lifeblood of the social gaming industry, these pressures could be fateful if they continue. And several recent case studies have now emerged to offer a look into what the future may hold.
With revenues for DoubleDown Casino soaring 151 per cent to $218.5m in IGT’s full-year results for 2013, helping to offset an 18 per cent drop in iGaming revenues, it is fair to say that those who doubted the wisdom of the $500m acquisition have been proved wrong. It is hard to tell, however, whether this dominance will last.
“For a company with the financial firepower of IGT,” the report continues, “and with an app as resilient as DoubleDown, this might not be a problem. However, for the wider industry it might have a more damaging effect. In a relatively new sector where start-ups are already struggling to maintain investor confidence, the huge outlay required to acquire a viable customer base will further erode faith in the industry.”
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