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Millennial generation has different entertainment requirements
Wednesday May 11,2016 : MILLENNIALS ARE DIFFERENT, SAYS GAMING EXPERT
Online casinos need to develop a new business model based on how this key demographic likes to play.
Currently doing the rounds is an interesting article penned by Adam Sellke, founder and CEO of Evolve Labs, a company that develops and provides platforms and products that help gamers connect, coordinate, and play video games.
The company became involved in the burgeoning eSports vertical late last year in a deal with Riot Gaming that saw the introduction of BlackFlag, a new paid service that will charge League of Legends teams of five a $5 entry fee to compete with other teams of similar skills for cash prizes .
Evolve has around 2 million users and can therefore boast that it has some knowledge and experience in the field.
Sellke's point of departure is that land and online casino operators need to recognise that the key millennial generation has different entertainment requirements that call for a rethink on traditional marketing and product offers.
And he claims that the conventional wisdom that they still like to gamble is not necessarily correct, and their preferences are distinct and different.
Some operators have already picked up on this salient point, and hard land gambling numbers illustrate a dwindling interest and declining revenue, Sellke claims.
"In the 1990s, 58 percent of a Las Vegas resorts’ revenue came from gambling. In 2014 it was just 37 percent. What is needed is a new model for entertainment and engagement that is predicated on what Millennials value and how they interact with the world," he writes. "I would argue that “Millennial gambling” isn’t about gambling at all. It’s also not about casinos. It’s about eSports, or more specifically, skill-based competition."
Sellke goes on to claim that millennials are now the largest living generation in the US, and suggests that their typical values - all abundantly provided by eSports competitions and events - are around:
● Instant Gratification and Recognition
● Balance and Flexibility
Instant Gratification and Recognition – eSports offer a multitude of compelling ways to showcase achievements via channels like live streams, social media updates, player profiles and leaderboards. With eSports, your performance could reach a global audience of millions as a top player; or a small circle of your best friends, and these mechanisms offer a far larger and more impactful form of recognition.
Balance and Flexibility – the ability for an individual to play a diversity of games whenever and wherever he or she wants, with just an internet connection.
Collaboration – in eSports, individuals can play as part of a team and it’s the work of the team that determines the level of success with both the team and the spectators...quite the opposite of traditional gambling. However, the author does draw a distinction and notes differences with the other rising tide - daily fantasy sports.
Transparency – eSports fans demand that video games can be played competitively, where a common set of rules apply equally to all participants on a “reasonably level” playing field in a transparent and fair manner. They are games of skill, not chance, and may the best player win - no "the house always wins".
Advancement – advancement in eSports is a meritocracy. Success in eSports demonstrates mastery, whereas success in gambling demonstrates luck. The fact that advancement is a proportionate, self-deterministic outcome in eSports makes it particularly compelling over gambling...and eSports-playing Millennials can advance to the level that’s right for them. eSports’ flexible, but transparent paths are important factors when it comes to Millennial adoption and retention.
Sellke turns to the typical business reaction to the new, disruptive or unknown, defining it succinctly as "Ignore, Kill, or Control." He observes that this can be devastating for the status quo, pointing to the music industry and the rise of download music over physical CDs as an example, and the kill instinct illustrated by the actions against Napster when the competition began to heat up.
The traditional music business then moved into Control phase, trying to clumsily "...shoehorn what they knew and what they wanted to maintain using things like DRM, proprietary players and formats, and other tactics, rather than trying to embrace and extend the value these disruptors were creating. That is, until Apple eventually showed them how to make money in digital music with its launch of iTunes, which sold 500 million songs in its first two years. The industry had been changed forever, and the large, slow, and dumb incumbents took a drubbing."
The lesson is to evolve or suffer the consequences, the author suggests, noting that change is inevitable, as is the trend toward instant gratification and recognition; balance and flexibility; collaboration; transparency; and advancement.
"Rather than suing innovators, or attempting to create legislative barriers, or dropping buckets of money morphing casino tables and slots into mobile apps and video arcades of chance, operators should embrace eSports and run with it - as sport," Sellke recommends.
He suggests that hosting or sponsoring major eSport events is a start in order to draw attention and traffic.
"Side-betting on these games is also a natural fit. But the direct analogies of “do x, but with video games” quickly drop off from there. Shifting to an adjacency or an altogether different model is probably necessary," Sellke observes.
"It’s time to get creative. Act now, but take the right action: because missing the underlying drivers of Millennial behavior will only serve to undermine your objectives and further alienate your biggest potential customers. Get it right, and you’ll be around for Generation Z."
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