Gambit Mobile Gaming event 4April06 report

Mobile Gaming

Specifically on "What Works", (with examples, numbers and case studies)

Panel of excellent speakers gathered for the Gambit evening on Mobile Gaming: (from left to right) Ian Milligan of Million-2-1, Charles Cohen of Probability Games Corporation, Andreas Piani of M:Metric, Michael Norton of Ukash, and Gareth Wong, founder of Gambit.

4th April 2006

Let's talk mobile numbers,

by Lorien Pilling

Ever since the 3G licences were won some six years ago, gambling via mobile `phones has been talked about excitedly as a market that is bubbling up; a sector just waiting to explode. But while it's good to talk, it's even better to examine some real numbers.

This was the aim of The Gambit's Mobile Gambling event in April, with its ever-enthusiastic founder Gareth Wong urging the guest speakers to focus on "what works" by using commercial examples and case studies.

Given that the evening had once again attracted a diverse audience that included representatives from mobile networks, gambling companies and trade publications, it was to all the speakers' credit that they were prepared to discuss their research and businesses so openly.

Andreas Piani from mobile market experts M:Metrics opened proceedings with a detailed comparison of the mobile `phone markets in the UK and Germany. He showed the top 10 devices for browsing and downloading content in the UK and also which game publishers the various UK operators are using.

Andreas highlighted three important trends in the current mobile market:

· In both Germany and the UK the male demographic is predominant in the use of mobile gaming services
· 3G devices are crucial for accessing content - 3G users are 2 - 4 times more likely to use gambling-style services
· Users are more likely to play games that are pre-installed on their handset rather than those they have to download

Gareth Wong comment: Their study were mainly limited to 'casino style' games, rather than real casino gaming content (payment for casino games for money as prizes), as its nearly impossible to measure the overall "mobile gambling market size". This is partly due to the proprietary nature of the sector (only the gaming gambling operator themselves has their turnover figures), and there is also no incentive for them to share the information given the nascent but competitive nature of the industry. Furthermore, their services are usually off-deck/off the operators' portal also,which means that there is no easy way of using 'proxy' to measure their business size, as one could not gain access to the payment trail either, due to myriad of way of paying for the mobile services.

Just as with gambling via the Internet, simple and secure payment methods will be essential to the widespread success of mobile gambling. It is perhaps the collapse of collaborative industry efforts such as Simpay that have held back mobile gambling growth to date.

There was, therefore, much interest in what Michael Norton, CEO of the event's co-sponsor Ukash, had to say.

Michael argued that there was nothing simpler than cash and this premise is at the heart of the Ukash payment method. An electronic payment system based on cash means that gambling companies are not excluding the 16% of UK adults who have no form of payment card from using their services.

His case study looked at Ukash's Quick Cash payment scheme which bookmaker William Hill has adopted to enable its punters to bet online with cash. Through its KYC procedures William Hill can also use Quick Cash to pay out cash via its betting shops.

In a similar fashion, m-gaming operators could use Ukash to gain access to the 50,000 PayPoint, ePay and Payzone terminals across the UK - exactly the same places where customers top up the credit on their mobile `phones.

The operators' view of the market was provided by Ian Milligan, MD of Million-2-1, and Charles Cohen, CEO of Probability Games.

Million-2-1 has pioneered the concept of the reverse auction and in his presentation Ian reminded the audience of the importance of protecting your intellectual property in a new and rapidly evolving market.

The focus of his talk was Million-2-1's biggest auction to date, giving away a Ferrari last Christmas in conjunction with talkSPORT radio. Ian revealed that, although the conversion of listeners actually entering was only 1%, the revenues generated were comparable to those that the radio station saw from its largest advertisers. The nature of a reverse auction encourages participants to have more than one attempt, more so perhaps than a conventional multiple choice quiz question.

Charles Cohen described how Probability Games has sought to increase the lifetime values of the users of its casino games. He gave details of Probability's recent promotional campaign of sending users free money to play with. Based on user information, each promotional message was sent to individual customers at the time they usually played games anyway. Although labour-intensive, this attention to personal detail was crucial to the high take-up of the offer.

Charles made the point that in advertising any mobile service timing is critical - you do not want to intrude upon, or annoy, your users. It is simply too easy to delete the message, which costs the operator money to send.

Probability Games believes there is a lot to be learned about people from the handsets they use and the type of mobile package they have (e.g. pre-pay vs. contract). Charles also stressed the importance of realising that, for most users, m-gaming is impulsive play rather than premeditated, in contrast to Internet gambling. But whilst m-gaming is impulsive, once a game is installed on a `phone, people are reluctant to take it off while there is still money in the account!

After the four presentations, the discussion was opened up to the audience and there was the chance to question the speakers in more detail. As all areas of the industry were represented in the audience and on the panel, it made for some keen arguments.

Topics included:
· Concerns about establishing a trusted brand for a fledgling mobile gambling company
· Who's responsible for holding up progress - the mobile networks for wanting too big a cut or the gaming companies for lacking technological solutions?

The final question before the evening moved on to drinks, networking and informal discussion was 'What needs to happen for the mobile gaming sector to really take off?'

There was some agreement that the whole-hearted adoption of m-gaming by a high-profile industry player would be a boost. But, equally, there was also support for the stance of 'Nothing specific needs to happen - just get on with it!'

Following on from the interactive television event in January, this was another very successful evening in The Gambit's short history. Rather than just theory and forecasts, the audience heard about the current state of the m-gaming market and saw examples of companies in the sector that are generating revenues and the marketing strategies they have employed to achieve them.

Gambit once again got an excellent line of market leading speakers, including:

• Ian Milligan, MD of Million-2-1, he will be sharing their experiences in the past few years of promoting their HowLo product via multiple channel, from online, print media to radio/TV, and yes, with specific numbers! Download Ian's presentation here.
• Charles Cohen, CEO of Probability Games Corporation, he will be sharing their experiences in not only the mobile gaming gambling demographics of their clients, but also 1.) their best practice and experiences learnt in promotion, 2.) and once clients acquired, what are the best way of 'Farming' existing clients. Yes, with numbers also!
• Paul Goode, VP & Senior Analyst, M:Metrics Ltd, he will be sharing independently collected market information on various games available on deck, subscribers/handset demographics, and overview of UK, Germany and US markets. Andreas Piani, Product + Client Services Manager spoke instead. Download Andreas' presentation here.
• Michael Norton, CEO, Ukash, * Opening up the massive cash market to online gaming * Cross promoting cash payments on gaming sites * Security offered by Ukash * The unique Ukash proposition
• Evening is chaired by
• Gareth Wong, Founder CEO, Gambit, GamBond and CXO Europe

Thanks to our sponsor of the evening to make the event happen:

Our thanks goes to the evening's co-sponsors:

and

Email us if you have any suggestions or indeed want to be kept informed about future Gambit event.

Representatives were registered from these companies (not a comprehensive list):

TwoWayTV, Imprint Plc., Heidrick & Struggles, Ovum, Globix, Victoria Real / Endemol, Sportsbusiness, iGaming Business, BSkyB, Betfair, William Hill, Imprimatur Capital, Betting Corp., JM Finn, Flytxt, William Reed Publishing, Remote Gambling Association, Responsible Gambling Solutions, Alderney Gambling Commission, ATE Clarion, Wireless World Forum, Million 2-1, the sports recruitment company, Gaming Corporation Plc, Goldsmiths College, Hakkasan, Adurion Capital, Chartwell Games, Minaxi Ventures Limited, AliQuantum Gaming Ltd, Pricejamieson, IGWB, Leisure Report, Adurion Capital, DataCash Group, Harbottle & Lewis, Gextech, Invoc plc, Ukash, Lyceum Publishing, Orange, ONE EARTH, ContoPronto - LUUP, plusCONNECT Telecom, Meridea, Global Cool, Mforma, Canaccord Adams, Pentasia Ltd, Juniper Research Ltd, PLAYER X, Chexx Inc, Vitesse Media Plc, Berwin Leighton Paisner LLP, Hutchison/ 3, Quebec Gov. Office in London, Hakkasan, Probability Games Corp., M:Metric, etc. etc.

Speaker Profiles:

Ian Milligan, Managing Director, Million-2-1

After graduating from Bradford University with a business degree, Ian has spent 20 years in consumer marketing initially at Smith & Nephew, then Reckitt Benkhiser and then Kellogg's.

Joining Camelot as Marketing Director of The National Lottery was a major challenge. Turning around scratchcards, developing successful new brands such as Thunderball and Hot Picks were highlights before leading Camelot's commercial team through the turbulent but successful second licence bid versus the Branson consortium. This led to a wider role as Sales and Marketing Director, taking on responsibility for retail relationships.

Ian then decided to join Million-2-1, the UK's leading mobile games business. As Managing Director, he is helping this start - up team achieve dynamic growth in the UK but also China, Australia, Europe . This is being achieved through a combination of innovative brands like it's How Lo? reverse auction along with media and brand partnerships.

Paul Goode, vice president, product development & senior analyst for
M:Metrics, has been at the forefront of enabling the mobile content and
applications market since the mid-nineties, as an innovator within
multinational mobile companies.

Most recently, Paul served as Director, Managed Developer Programs for
Metrowerks. Under his leadership, Metrowerks assisted the major mobile
operators and handset manufacturers to create and run their developer
and partner communities. Paul came to Metrowerks from Motorola, where
he oversaw the entertainment server group, which delivered Motorola's
hosted java and entertainment platforms. While in this capacity, Paul
was a founder of the Mobile Game Interoperability Forum, which he later
merged into the OMA. Prior to his work with in the mobile development
community, Paul co-founded Motorola's m-commerce venture,
PersonalOffer.com, which enhanced broadcast radio with real-time music
sales and interactive advertising using voiceXML. At De La Rue
(Oberthur), Paul worked with Motorola and the world's leading financial
institutions to create a two-slot mobile phone to reload electronic
cash, which seemed a good idea at the time.

Paul is a graduate of Oxford University, where he studied classical
literature, ancient history and philosophy - the perfect education for
the world of mobile content.

Michael Norton, CEO of Ukash

Michael Norton is CEO of Ukash, the globally-recognised e-commerce cash payment method, and is responsible for the company's business operations, international expansion and strategic direction.

Before joining Ukash Michael was the CEO of Eposs, the electronic product delivery and payments business, where, within 18 months, he grew turnover to over £250 million and oversaw the successful sale of the business to First Data Corporation. Prior to this Michael was Managing Director at The Caudwell Group where he established the company's mobile pre-pay business and grew sales to over £570m within two years.

Michael began his career in sales and marketing at Mars, and has gained a wealth of board level experience in FMCG and telecommunications since then. A successful entrepreneur in his own right, Michael founded The Pasta Company which he subsequently sold to leading food group Geest.

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