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November/December 2015 // PUBLIC GAMING INTERNATIONAL //
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buy more on sunny days. People see themselves
using things when the context is right.”
This understanding needs to be coupled
with an innovative workplace to attract the
best and brightest by offering the freedom
to create the products to meet the custom-
ers’ needs. This is the dynamic created at @
WalmartLabs which, rather than locat-
ing in its home city of Bentonville, AR,
established itself in Silicon Valley, home
to many of the world’s largest high-tech
corporations, as well as thousands of tech
start-up companies. That decision alone sets
the stage to identify @WalmartLabs as an
e-commerce venture, not just an arm of a
discount department store chain.
@WalmartLabs, and lotteries, are not
without their challenges in the e-commerce
world. @WalmartLabs and the Walmart
headquarters face the task of integrating
their efforts into one channel. Lotteries
have to retain existing customers, some of
whom may not be interested in embracing
technology, while at the same time attract-
ing the much-coveted younger demograph-
ic to its Internet offerings. And, lotteries
often face limits or restrictions imposed by
their legislatures, adding yet another layer
of complexity to their challenge.
side
-
bar
:
As of November 15, 2015, the
market capitalization of online retailer
AMAZON was $309 billion. Walmart’s
market Cap’ was $188 billion. Investors
have that much more confidence in the fu-
ture earnings potential of AMAZON than
Walmart. Further to that, while Walmart is
building out its digital strategies and online
consumer connection, AMAZON is build-
ing land-based stores. “Convergence” may
be a bit of a cliché, but the actions of these
industry leaders indicate that the “omni-
channel” model is becoming a reality.
YouTube Enters Gaming World
with Streamlined App
Gaming enthusiasts, including lottery
players, will have a new option in the
digital arena when YouTube makes its
move to launch YouTube Gaming, aimed
at meshing the gaming culture with the
YouTube culture.
Next summer, the media player giant is
expected to announce a series of updates to
its streaming capabilities, the most notable
of which is a shift to HTML5. After that,
users will see the gaming arm, which is ex-
pected to consolidate gaming news, reviews
and live videos into a single, streamlined
app and website. Users will see features like
high frame rate streaming at 60 frames per
second (fps), DVR and automatic conver-
sion of streams into YouTube videos.
With a $91.5 billion market, the global
gaming community is a next logical step for
YouTube. Currently, an estimated 15% of
all YouTube uploads are game related, and
You Tube is reportedly the third most vis-
ited website in the world. YouTube, which
has been around since 2005, will likely see
considerable growth once it launches its
gaming debut.
YouTube, however, isn’t alone in its pursuit
of the gaming crowd. Earlier this summer,
Twitch.tv, the live streaming video platform
owned by Amazon, also joined the ranks of
companies ditching Flash to explore newer
options with JavaScript and HTML5.
Twitch is still the leader in the game, account-
ing for over 43% of all live video streaming
traffic by volume, and is miles ahead of ESPN
and WWE. How YouTube Gaming will alter
the field remains to be seen.
Expect Mobile Gaming Success
and Profits to Take Time … and
Sometimes a Re-Boot
With the continued strategizing and
decision making on the part of lotteries
to incorporate mobile gaming into their
portfolios, they should realize that success,
and profits, don’t happen overnight.
That’s according to Mark Pincus, a co-
founder of social gaming giant Zynga in
2007. He stepped down as CEO of Zynga in
April 2014 and then returned a year later to
bring it out of a funk that resulted in a $7.6
million loss in just the last quarter. Pincus
recently acknowledged that “overnight”
successes actually takes two to three years
to achieve. But at some point, a business
does cross a line and word of mouth begins
to ignite growth, supplementing everything
else that is already being done. And this is
the growth that lotteries need; it is what will
allow them to gain a better understanding of
what their players want, and what products
they need to provide in order to keep them
playing. Each audience segment is going to
have different play patterns, behaviors and
interests and any business, including lottery,
that is trying to engage them will need to
apply an in-depth understanding of how
demographics, player profiles, and consumer
segmentation is changing.
Few people in the gaming world are
unaware of Zynga mega successes with
Farmville and Words with Friends, both
of which took the social gaming world by
storm just a few years ago. Despite enjoying
enormous popularity, the two games are
now on the downslope of their life cycle.
The only way to avoid the kind of dra-
matic slumps faced by Zynga is to evolve
the product by maintaining an interactive
relationship with the consumer that can be
used as the basis for development. Zynga
now has a very aggressive plan in which
it updates reels every two weeks. And it is
introducing new product lines on a consis-
tent schedule. For example, it has found an
overlap between the match three play and
slots audiences and is hoping to capitalize
on it with the launch of FarmVille: Harvest
Swap, in late May of this year. Lotteries too
can find their own overlap audiences and
look for games that will appeal to them.
Although all lotteries are charged with
generating funds for good causes and
are often under pressure from their state
legislatures to increase those contributions,
Pincus notes that profitability comes after
the value is delivered, not before or in the
early life-cycle stage. So while it takes time
to grow into success, it takes time to grow
into profitability as well. It is about
“playing
the long game,”
as Pincus puts it.
Pincus predicts that in the next 10
years, game-playing is going to occur in
conjunction with social media and social
networking. To optimize success, and
to compete with the explosion of new
gaming options, Lotteries will want to in-
tegrate social media and networking into
the overall player experience.
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