GPWA Times Magazine - Issue 39 - November 2017

OPINION The ongoing shift to mobile gaming – and more specifically, to gaming apps – presents a prime opportunity for affiliates and operators to adapt and cash in. But the time to act is now. BY VIN NARAYANAN T he last three years of my life have been an eye-opening experience. After nearly a decade in affiliatemarketing for online gaming sites, I’ve spent the last few years as either an operator or a consultant for operators and iGaming suppliers. I still do some affiliate and affiliate-relatedwork. But what I’ve seen frommy newperch in the industry – especially regardingmobile gaming –makesmeworry about the future of affiliatemarketing. The world looks completely different when you’re an operator. When you’re an operator, it feels like everyone has a hand in your pocket. The platformprovider takes a cut of your revenue. So do game developers and providers. Affiliates get their share, as do other marketing partners. Payment processors get their piece of the pie. You have to pay for KYC (know your customer) checks. The tax man shakes you down. Then come the regulatory costs andmaintaining the technical infrastructure needed to run the op- eration.And don’t forget about paying people towork for the site. By the time everyone is done extracting money from your wallet, you’re wondering where all your money went and whether you should go back to being an affiliate. Let’s say you want to operate in the U.K. with a standard 35% rev share for affiliates. A simple back-of-the-envelope calcula- tion shows that with the affiliate rev share, the 15% U.K. point of consumption tax and a 15% rev share with the platform provider, about 65% of your revenue is spoken for before you even get to other costs. As an operator, my job was to do two things: 1. Generate a high enough volume of business to overcome shrinking margins. 2. Reduce the amount of money we were paying out to suppliers, vendors and affiliates. Focusing on mobile gaming helped satisfy both of those ob- jectives. There are approximately two billion millennials in the world. Mobile gaming allows operators to access these customers in their 20s and 30s who spend the bulk of their time on smartphones and grew up playing social games. It’s a target-rich environment for potential customers – especially players who have never played for real money before. From a player acquisition standpoint, it’s also a big win for operators. In the app ecosystem (which is where everything is heading), the primary discovery tool isn’t search. It’s the The gaming app REVO W W W . G P W A T I M E S . O R G 32