This time of year always makes me chuckle at the arrogance of some but more the desire of others to accept proclamations of what the new year will bring. I am not a big fan of predictions. First, regardless of experts’ success or intelligence, there are too many variables to predict accurately what will happen in 2018. As much as I respect Bill Gates, Warren Buffett, Mary Meeker, etc., they cannot predict the future. If they could, they would even be wealthier (who has not played the mental game of what you would invest in if you could go back in time five years). It’s the same underlying reason why the best and brightest mutual fund managers cannot regularly beat the market indexes they are targeting.
Second, and a little more sinister, most people who claim to predict what will happen in 2018 are little more than fortune tellers you would meet at a State Fair (or social gaming conference). The predictions are generally broad enough that regardless of what happens next year they will be able to pull some “victories” from their predictions. It may be things as simple as bitcoin will have a volatile 2018 to there will be at least one major acquisition in the video gaming space; these are either broad enough that you can always claim victory or predictable by anyone who looks at the past trends. The point is, they are not providing any information that is actionable unless they get lucky. Again, if they were so visionary, they would act on it rather than talk about it.
So with that said, it is time for my predictions. Seriously, rather than predictions, I do feel it is helpful to look at trends that have gained momentum in 2017 and are likely to have a disproportionate impact in 2018.
The convergence of micro-segmentation, AI and machine learning to create extreme personalization
The most important trend that is gaining momentum is personalization. Various related technologies are allowing game and technology companies to optimize experiences for every individual. From Amazon showing you products you are most interested in to Supercell pairing you with a player whose gameplay style best complements yours, everyone will have an experience personal to them in ecommerce, gaming and pretty much anywhere in 2018.
Three related technologies are driving this personalization: micro-segmentation, artificial intelligence and machine learning. Micro-segmentation allows companies to create hundreds or thousands of different clusters of customers and then provides the best experience for each of these segments. One segment may be players who have monetized 3-6 months ago and continue to play but not spend and are more open to free offers than sales; micro-segmentation will help create offers to optimize their experience and make them more likely to spend. Another segment might also have spent at some time 3-6 months ago and remain active but these players are more likely to spend if encouraged to play at higher stakes. Micro-segmentation allows companies to create the best path for each player.
Machine learning allows for more and better micro-segmentation, as it automatically creates hundreds, thousands or millions of segments. And artificial intelligence then determines what to offer each micro-segment.
The key takeaway is that customers will get very personal experiences on the successful sites, apps and games in 2018. They will then come to expect experiences and offers tailored to their needs, directing their money to those that deliver.
Voice recognition
I wrote in 2016 about the increasing importance of voice recognitionand this is likely to accelerate in 2018. Providing directions verbally is much more natural and simpler than having to type them. While the technology is still largely a novelty, everyone uses Alexa or Siri but primarily to listen to music or set a timer, in 2018 voice recognition will become more integrated on how you use/consume technology. In particular, I see it becoming a central part of the social/mobile game user interface, it will be much easier to play a game by speaking to it rather than typing or navigating with a mouse.
Big change in social casino
I have been in the social casino space (online free to play slot, poker, etc) for almost five years and have seen it mature and continue to grow revenue but it is still largely the same as it was in 2012. The interface, gameplay mechanics even art have changed very little. Companies have gotten better at monetizing their players but the games have not evolved. Even land-based casinos look more different now than they did five years ago than social casinos do.
While I do not expect an entirely new gaming mechanic to surface, one or two companies will innovate and create a very different product that not only steals existing market share but also brings new customers into the market. There is enough money in social casino that new entrants will try to innovate to build a competitive position and the company(ies) that is able to create a new market space will be the next Playtika.
Devices and platforms will become less important
When I first entered the game space, one of the biggest determinants of success was anticipating what platforms (Playstation, X-box, DS, etc.) would become big, getting on them early and not getting tied to a dying platform. Platforms (iOS, Android, Kindle, etc.), however, are becoming increasingly less important. Tools and underlying technology are allowing the best content to be used regardless of device. This trend should accelerate and companies that spend the bulk of their time trying to optimize for the next big thing will lose out to companies looking to create the next great content.
Privacy
I am one of those people who never really cares about privacy settings, have not read a Terms & Conditions in my life before clicking continue, and never worry about sharing my personal information. I am, however, in the minority. More and more people are concerned about privacy and products that either ignore this fact or try to trick customers and players into sharing information they do not want to share will fail in 2018. Successful products will empower customers to share the information they want to share, which will be different by individual (see first point on personalization). This is also the area where Blockchain can have the greatest impact, even more so than the crypto-currency space.
Dual devices
Not a 2018 trend (or even a 2015 trend) but more of a 2018 fact of life. People virtually never use only one screen. It is not only using your phone or tablet while watching television. It is using your phone while on your tablet. Using your tablet while on your work computer. Watching television while on your phone. Giving Alexa directions while watching television. You get the idea.
Your games and applications need to be sensitive both to people not focusing 100 percent and also provide a good experience as the second device your customer is focused on using. You also need to understand the different use cases and allow people to consume your product in different cases, whether they are also watching TV or working on their computer.
Big players will enter free to play, and fail
Remember how I said the hallmark of a good fortune teller is to include in their predictions something that definitely will happen (ie. there will be a lot of vitriol on Facebook about politics), here is my prediction that will come true in 2018. At least one major multi-billion company not currently in free to play will enter the space either through a new venture or acquisition because it just seems so easy to make money selling virtual goods; and they will fail miserably. It’s happened every year since social gaming took off and will probably happen for the next ten years.
Other trends
I would love to know what trends you are seeing and how they will help shape 2018. Let me know your thoughts on what we will be writing about this time next year.
Key Takeaways
- Personalization will dominate 2018. Successful games, sites and retailers will provide a hyper-personal experience to all customers with a combination of machine learning, artificial intelligence and micro-segmentation.
- Voice recognition will go from the domain of Alexa and Siri to become a primary and powerful user interface for people playing games, shopping or doing virtually anything.
- The social casino space will experience a disruptive product that not only takes significant existing market share but brings new customers to the market.
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The Business of Social Games and Casino 