27 Aug 2008

Web 2.0 – show me the money!

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I met Lorien Pilling a few years ago at a Gambit session in London and since then have always enjoyed meeting and chatting about gaming developments. Lorien is a gaming industry consultant. He is the only one I know to spend a few months travelling around China in order to fully understand their gaming culture! He is a research analyst with Global Betting and Gaming Consultants, and currently resides on the Isle of Man. Prior to this, he spent three years at a leading United Kingdom gambling firm, providing regulatory and market research for its various international e-gaming ventures. He is always worth seeing if you see his name on a conference agenda.

Anyway, we chatted about web 2.0 a few weeks back and I mumbled incoherent statements that he turned into a great article on iGamingNews.com. I’m not sure I made sense and “anything 2.0” is too simplistic a label but what I do know is it’s a great time to be involved in online gaming and entertainment…

(The full article is published on iGamingNews. Reproduced here by kind permission)

Monday, August 18, 2008

Web Two-Point-Hype?

by Lorien Pilling

It is tempting to dismiss Web 2.0 as a fad dreamt up by an e-commerce community that has got some of its swagger back after a few contemplative years since the dot-com bubble burst. But the term has certainly found a receptive audience in the online gambling sector and a growing number of projects are being launched under its guise.

Brian MacSweeney, formerly of Endemol Gaming and founder of Boola-bus, a startup dedicated to live betting and gaming, suggests that, while Web 2.0 will diminish as a buzz word, the ideas behind it will continue to have an impact on the I-gaming industry in the longer term.

“Very simply, Web 2.0 should allow punters and operators to do things that were not possible before,” Mr. MacSweeney explained to IGamingNews.

Although social networking has come to symbolise Web 2.0, the broader themes behind the term are collaboration, the sharing of information and experiences and creativity. It also requires a change in thinking about the Internet, viewing it as a platform with individual Web sites as applications that allow people to do things, rather than simply as places where content is published.

Some of these ideas, however, are not new to the online gambling sector. One obvious example would be Betfair, the betting exchange; since its launch in 2000, Betfair has displayed many of the traits that are now being labeled as features of Web 2.0:

# Providing a Web site that allows people to “do things that were not possible before” — trading sports bets with each other

# Creating a community where ideas and opinions can be shared

# Allowing developers to create applications for use with the Betfair site

Betfair’s new TaiKai betting tournaments product also plays on the themes of a shared experience among a community of players and testing your opinion against others. While there are a number of companies (Bragster, Mates Bet, Pikum, Smarkets and others) that are trying to create new betting products with a strong community aspect, the more established online betting operators have, so far, been more tentative in their approach to Web 2.0.

Paddy Power has used its Over the LIne blog to unveil the new features on its football betting coupons. The use of blogs, of course, allows customers to express their opinions about a new idea or feature which they will ultimately have to use. Paddy Power’s new features include listing the top five football bets to show what bets other users are placing (shared experience) and the “my matches” option, which allows users to build their own individual betting coupons (customised experience). Ladbrokes has a similar “my saved coupon” feature on the beta version of its new sports book, whereby customers can save the betting coupons they use most frequently.

One operational concern that is often raised against allowing users to customise their experience and the content they see on a home page is that it prevents the betting operator from cross-selling other games and bets to the user. But operators do not necessarily need to give full customisation to their users and can still retain sections of a Web page for marketing activities. The two features mentioned above show the first signs that operators are willing to give more control to their customers.

At present, the level of customisation betting operators can offer is also heavily constrained by the current generation of sports betting technology platforms. Existing technology platforms can handle the core activities required for a sports book but are not flexible enough for the next generation of Web 2.0 betting activities.

Of all the I-gaming products, Mr. MacSweeney believes that sports betting will be the first to develop a true Web 2.0 offering. The nature of sports betting, especially with the growth of in-running betting and sportsbooks broadcasting live events, lends itself perfectly to the concepts of shared experiences and collaboration.

“If there are a few thousand users on your Web site at the same time watching a live event, it’s a missed opportunity if you don’t encourage even more participation,” he said. “Let them get involved and do more, and let them interact with each other and engage in the experience.

“Go to any existing sportsbook during any big event and with one or two exceptions, it’ll be a pretty lonely, silent, static experience,” he continued. “The excitement of the event needs to come through and it will drive up betting volumes — we’ve seen it from the work we’ve done in live betting.”

Mr. MacSweeney envisages the development of collective games based around sports fans’ allegiances to different teams and a community aspect with a focus on expressing opinions, pooling knowledge and interaction.

“I think the gaming sector has the vision but there are challenges with legacy platforms and business priorities,” he said.

In the gaming sphere of online gambling, bingo is often held up as an example of Web 2.0 in action with its community of players, player profiles and chat facility. But the actual gaming aspect of online bingo is still quite passive. Apart from buying the cards, an online bingo game can happily take place without the player being particularly involved.

888 Holdings is one company that has been a strong proponent of Web 2.0 in I-gaming and its announcement of 888 Debut in early 2008 shows how the theory of Web 2.0 can be put into practice. Through the 888 Debut initiative the company will be opening its technology platform for integration and third-party games developers will be able to add their games to the platform.

By allowing external developers to create games, 888 is trying to draw on the expertise of local developers to get the look and feel right for regionally specific games. It also hopes that this project will enable it to launch new games more quickly. There was also the suggestion that 888’s users will be able to try out new games and rate the ones they like best. The most popular games will then be put through further testing and development for a full launch on the website.

Gigi Levy, the company’s chief executive, has talked often of creating an online gaming “ecosystem” based around the company’s integration infrastructure.

Mr. MacSweeney argues that a Web 2.0 gambling platform should create a truly new format. Just as Betfair did eight years ago, I-gaming 2.0 should shake-up the sector’s existing business models and develop new ones. He wants Web 2.0 features to help create a sense of atmosphere on I-gaming Web sites, and believes that, if these features are packaged and presented correctly, players will be influenced by them, and, as a result, change their betting behavior and interaction patterns.

One major criticism of Web 2.0 is that, in many cases, it is not immediately obvious how the features directly contribute to the bottom line. Although Mr. MacSweeney admits that Web 2.0 is “less about transaction and more about interaction,” he thinks the criticism that it does not directly generate cash misses the point.

“Maybe some initiatives to date are not directly cash-generating but they are generating traffic, content and excitement,” he said. “It helps convert new visitors to become full cash players and it attracts a bigger audience to target in the first place. But the next wave of innovation has to be more focused on direct revenue generating initiatives”.

Web 2.0’s themes of collaboration, creativity, and shared experiences are certainly relevant to I-gaming and have a role to play in the sector’s development. But while a definite opportunity exists to exploit it, timing will be crucial. Expect it to be a central topic in many of the sessions at next month’s EiG Expo.

Full article is published here.

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