Benjamin Carlotti, co-founder and Managing Director of DFS operator, Oulala, discusses the centrality of skill-based gaming to Asia’s discerning middle-income millennials.
How important is an event like G2E Asia for interactive gaming operators in 2017?
G2E Asia is a key event, especially for European companies because it is the door to Asia, a growing market offering numerous stimulating perspectives for the future. In Oulala’s case, it is even more important. We are the first company that successfully adapted Daily Fantasy Sports (DFS), an American concept, to meet the international demand. Our market studies clearly indicate that, because our game is specialized in European football (Oulala allows you to pick players from the English, Italian, Spanish and French leagues to form part of the same team), it will lead to great success in Asia, particularly in China. We are therefore very interested to come and speak at the G2E, and to meet local operators, because we think that our B2B solution fits their exact needs.
Appealing to millennials is perhaps the greatest challenge for Western gaming companies at the moment, how does this apply to Asian markets?
Millennials in Asia have different short term expectations because the two market realities diverge slightly. However, on the long term, the younger generations will expect the same type of games, because they have grown up playing the same skill games on their game consoles and having the same type of social interactions on social media. Millennials expect our sector to become a natural extension of the video gaming industry. They want us to offer monetized skilled games that are structurally social games. In both Asian and Western countries, millennials will soon represent the majority of the customer base. It is critical to adapt the existing offer to their real expectations.
Asia’s younger and tech savvy populations are armed with more disposable income every year. How can Asia-facing operators remain relevant to this dynamic demographic?
You are right to point out that the increase of income may become a game changer in Asia. Moreover, this is another reason why the skill game business model is far more adapted for the future. If people do not expect anything more from our sector to change their quality of life (because they can afford to have a good life with only their work), our sector needs to change its promise. Instead of selling the dream where you play the money that you need on luck games, because you will have a very small chance of majorly improving your quality of life, we can now tell them to use their skill to play for a cash reward. We say “beat your friend because you are the best, and brag because you took their money”. For our industry, the skill game business model (that we can also call “moneytainment”) is, on a mid/long term basis, a much more profitable one. The reason is simple; we are not playing against customers, that is, when they lose, their money does not come directly in our pockets, so they like us, and therefore they are loyal, meaning that they come back very regularly and for a long period of time (9.57 years on DFS according to the FSTA). Skill and DFS are therefore built exactly for young customers with a more disposable income.
Why are RNG slots finally gaining traction among Asian players, and can this popularity be sustained?
Slot machines represent around 70% of the casino’s income. They have been around for over a century and Random Number Generator is the last major evolution. By including a brain in the system (a microprocessor), it allows the slots to be impartial, accurate and therefore customers have the impression that their chances of winning will be improved. Nonetheless, it is critical to note that all over the world, the younger generations (millennials) now expect to play in a very different way from previous generations. Attempting to adapt the old success to their needs may seem like a suitable option, but we believe that we need to start from a blank page to develop games built around their exact needs.
What role do you foresee for skill-based products, or skill-based genres such as DFS, in the region, versus similar markets in the West?
Skill will, without a doubt, become a mainstream product in the near future in every part of the world, simply because it is what the younger generations everywhere are expecting. Most luck games will therefore see a serious decrease in volume. Taking the example of Sports Betting, it is clear that Big Data will seriously damage the business model. Why? Simply because the big companies already know how to correctly predict the outcome of a football match , thanks to Big Data (during the last world cup Baidu predicted 15/15 matches, Microsoft 15/15 and Google 14/15). Very soon, the iGaming sector will have access to the same kind of Data. Therefore, as a customer, would you be interested in playing against someone who picks the odds, knowing the results? Of course not! However, because Big Data is also offering new types of skill games it is easy to predict that sports betting customers will turn into DFS customers. This why we say that DFS is the sports betting of the new generations.