GPWA Times Magazine - Issue 29 - July 2014

The riseof the social gaming affiliate ByHarry Bienenstock “Diversification and globalization are the keys to the future,” advises Fujio Mitarai,who asCEOofCanonhas overseen the Japanesemultinational’s expan- sion intonewglobalmarkets andproducts.Mitarai’s advice is not onlyvalid for the camera andprinting industries – hiswords should also be heeded by iGam- ing affiliates, especially when they consider the opportunities available in the rapidlygrowingglobal business of social gaming. Until recently, affiliatescommonlyconsideredsocialgaming tobe theflashierbut less profitable younger brother of real-money iGaming. Affiliates that still hold this view should reassess. As real-money operators’ diversification into social gaming gathers momentum and becomes an important driver of their revenue growth, they are increasingly offering affiliates the opportunity tomarket their social brands. The rise of a new, diversified breed of affiliate is on the horizon: the social affiliate. Themythof “free” play and the lucrative reality A plethora of social gaming brands are vying for affiliates’ attention. However, whether the brand is a free-play poker site offering winners real-world prizes or freemium social bingo on Facebook, onemisconception appears to cover all social games: They’re free. Thishashad the tendency todeteraffiliatesbecauseof theperceived impact on their earningpotential. In fact, thewidespreadbelief that playersdon’t have topay toplay social games is illusory. Unlike iGaming, there are nowagers involved, but games almost al- ways feature elements that cost playersmoney. For a social poker brand, for in- stance, playersmaypurchase extra chips. These paying features, combinedwith large player volumes, have helped trans- formsocial casinogames intoan industryworth$1.7billion, according toMorgan Stanley. While the industrymay have begun with social gaming start-ups like Zynga, which launched its eponymous social poker brand back in 2007, its suc- cess has attracted some of the real-money gambling industry’s largest platform and content suppliers, includingNYXGamingGroup,Aristocrat and IGT,which acquired social gamingproductDoubleDownCasino for $500million in 2012. 10 The rise of the social gaming affiliate