Industry predictions for 2021: going green and M&A ramp up
CEGO chairman Jesper Karrbrink and Robert Lee of Realistic Games predict the big themes in online gaming next year
Jesper Karrbrink, chairman, CEGO
Here I see three trends, the first being new game concepts with more focus on entertainment. We have already seen a start to this, with Evolution introducing their game show series with titles like Monopoly, Deal or No Deal and Dream Catcher. GameCo has built arcade skill games for Las Vegas casinos for some time, and Green Jade Games has been doing the same for the igaming industry. I think we have only seen the beginning of this.
The second trend is the number of games. The trend the last couple of years has been clear, the more the merrier. I think we will soon see a reversal of this trend, starting with operators curating bespoke selections for their players. I’m not talking about the half-working algorithms we see today, but select, chosen content on offer to different player groups.
The third trend will be in-house produced content to increase retention (and margins). It is not the number of TV shows or the smart recommendation algos that make me renew my media subscriptions year after year, but the fact they have content I can’t find elsewhere.
We see how countries like Sweden and Germany are almost “over regulating”. I’m afraid this will be the start of a trend where the pendulum now swings all the way to the other side. There is no rationale for over regulating. The number of problematic gamblers, as a share of the population, is no higher today than it was 20 years ago, yet still gambling as we know it today is a totally different market compared to the nineties. The industry has never invested more in responsible gaming than now and still we see over regulation. For us, who have promoted regulation as a good thing, this is a disappointing development that risks forcing players, and even operators, to act outside of the regulatory frameworks, and then we as an industry are back to square one.
The Privacy Shield Act between US and Europe might stop the “move to AWS cloud hosting trend” we have seen during 2019/20 and instead open up for European hosting companies, like Internet Vikings or BMIT specialising in cloud hosting for igaming companies, especially if these also start offering CO2 neutral hosting helping operators reach their “Paris Agreement” CO2 targets.
If I were writing this for 2022, I would hope I could have this as my top trend. And with going green I don’t mean that everyone should be like Mr Green, but rather that the igaming industry has realised that leading the race towards zero CO2 emissions is a winning formula going forward. This industry has broken so many barriers through the years so why not break this one as well and really take a stand for the future of our planet!
Robert Lee, commercial director, Realistic Games
M&A ramp up
2020 has been a huge year for M&A activity and I expect the pace of consolidation to continue throughout the next 12 months, across both B2C and B2B. Operating conditions are only going to become tougher as regulatory frameworks tighten and competition intensifies, while at the same time, parts of the industry will still be reeling from the impact of the coronavirus pandemic. The size of recent deals in the B2B space will no doubt shift the landscape and it’ll be interesting to see what this means for boutique suppliers. Agility and size could play to our advantage, which is why we plan to sharpen our customer focus to stay ahead of the curve.
Regulated market openings will be a defining factor of 2021 and will spur a wave of new entrants into both white and grey jurisdictions. This trend will no doubt be influenced by tougher regulatory conditions in mature markets, with the impending UKGC review likely to push operators and suppliers to look at other markets. Although the review is necessary, the concern is that a lot of the restrictions currently mooted would require a huge amount of work for little obvious gain in terms of player protection. Having to adapt to some of these proposed rules will be extremely costly and restrict resources to develop new content. Identifying new and emerging markets will therefore be a key strategic part of 2021 for most in the industry.
From a game design perspective, we expect there will be greater focus on lower stake games. There are two reasons for this: responsible gambling and player trends. Games with lower minimum stakes are attractive to less experienced and casual players, helping to boost conversion of new players as acquisition becomes ever more important. They also help to promote safer play by offering the same entertainment without the end user being exposed to a potentially high spend. Given that the industry may well be forced to take this route via regulation, many suppliers are already looking to get on the front foot.