Eilers & Krejcik: Why a Gambling Company Should Buy Marvel Snap
Sharpr is a weekly newsletter covering the intersection of esports, betting, and Gen Z
Hi everyone, Cody here – and happy (late) new year.
Much of what I owe my success to in this field and with this newsletter are the great relationships I’ve built with people in this industry.
Today, that meant getting my hands on a copy of Eilers & Krejcik Gaming’s latest report “Why We Think a Gambling Company Should Buy Marvel Snap,” to share with my readers. And trust me, it’s a banger.
Let’s jump right into it.
Eilers & Krejcik: Why a Gambling Company Should Buy Marvel Snap
When gambling research firm Eilers & Krejcik Gaming published its latest report “Why We Think a Gambling Company Should Buy Marvel Snap,” I knew it was going to be a must-cover.
The report offers an in-depth look at the hit mobile game Marvel Snap, taking into account its performance, gameplay mechanics, monetization strategy—and importantly—its proximity to gambling. This also broaches a larger subject of why betting companies should consider expanding into gaming in general, or at a minimum, taking a page out of its book.
“Many gambling companies could benefit from repositioning themselves as digital entertainment companies –and some are arguably running out of room for core product expansion,” the report reads.
“In our view, gambling companies have a lot to learn from gaming, and ownership of a stable and successful gaming asset could help shrink the innovation gap in areas where gaming has outpaced gambling in recent years.”
According to the report, those learnings came in abundance. And in my view, most points could be applied to video games broadly versus just Marvel Snap specifically.
Whether it’s multiple-currency systems, engagement loops, embracing cosmetics as a monetization strategy, or simply leveling up on basic game design, innovation in this sector has significantly outpaced gambling, EKG says. The firm suggests that venturing into gaming could help shrink that innovation gap.
The report also notes that opportunities for core product expansion are beginning to thin out, while an expansion into casual gaming could open up a new avenue for top-line growth.
Escalating margin pressures associated with regulated online gambling markets (such as higher taxes, increased customer KYC, and greater compliance requirements) will put more tension on operators; casual gaming may provide a relief from the cost of doing business in white markets.
Marvel Snap, which is part of the card battler genre of games, has substantial overlap with poker. That resemblance makes the card battler a more organic entry point for an online gambling operator to reasonably participate in, EKG insists.
The card battler genre is also said to have “complimentary demographics” for a gambling operator, where users tend to skew male with an average age in the low 30s. EKG says Marvel Snap can provide access to an audience that is “meaningfully younger than the existing user base of a global gambling operator,” while not skewing so young that it’s deemed inappropriate.
Also of note, Marvel Snap boasts very high retention rates. EKG says its retention figures are owed to the game’s exceptional onboarding, engaging gameplay, and the incorporation of internationally recognized IP.
For Marvel Snap, the 7-day and 30-day retention rates are 66% and 18%, respectively, while the average across the four next most-popular card battler games that EKG sampled are 21% and 8%. By comparison, mobile casino games have an average retention rate of 9.85% and 4.10% across D7 and D30, respectively, according to research from AppsFlyer.
The report covers all the above topics and plenty more in extensive detail, including an in-depth SWOT analysis, player archetype assessment, and revenue breakdown that is well worth the time of any gambling operator looking for ways to engage its existing audience, or acquire new ones.
You can purchase and read the full report here.
🔎 Between the lines: I have a few takeaways here, one of which is the oncoming convergence of gambling and video games. Depending on your view, it has already been happening in different forms across the last handful of years.
Skin gambling, an illicit form of betting where users wager video game items with real-money value, had an estimated handle of $2.3B in 2015.
Loot boxes are a popularized mechanic in the games industry where players spend money in exchange for a randomized reward, however its likeness to gambling has stirred up international legal scrutiny.
Gambling content has become widely popular on livestreaming platforms over the last several years – so much so that Twitch has made multiple policy changes to combat the spread of unregulated crypto casinos such as Stake, Duelbits, and others.
This includes gaming creators becoming an increasingly important piece of the puzzle in operators’ pursuit of reaching an emerging demographic of users with noticeably different entertainment preferences. Recent examples include Stake snapping up a swathe of A-list streamers such as Amouranth and Nickmercs or Dr. Disrespect’s long-standing partnership with FanDuel.
The common thread in these examples is using gaming as a bridge to the next generation of consumers — a well-worn strategy in other industries that has arguably not yet been explored to its fullest potential in the regulated gambling industry.
As far as Marvel Snap goes from a product perspective, it feels pretty clear what operators can glean from this on a game design level, notwithstanding the opportunity EKG outlined to bring video games under an operator’s umbrella as standalone offerings.
As a 30-year old Millennial that grew up playing video games online with my friends, there are clear differences in the motivators between gambling and gaming. To distill down the core purpose of these two things at a very rudimentary level:
Most people gamble to win money, while most people play video games to have fun.
But let me put it this way: if players never won money betting on sports or playing casino games, would they continue to spend their time doing it? Is the act of sports betting or playing casino games fundamentally enjoyable when you strip away the ability to win money from the experience?
That’s something worth thinking about as we head toward an inflection point in the industry where, to EKG’s point, the latitude for new betting products is tapering off.
On the other hand, video games are built to be intrinsically entertaining. The starting point for video games, and certainly the most successful ones, is to build a deeply engaging product that people want to play first-and-foremost and using the most-advanced technology at their disposal to achieve that.
The monetization strategy goes hand-in-hand, but if the base product isn’t fundamentally entertaining to play and isn’t able to keep users engaged over a considerable period of time, monetization doesn’t occur on a meaningful level.
To the many points made in EKG’s report however, leveling up gambling products to match the depth of modern video games isn’t a small task, nor may it always be in the best interest to do so, but there’s definitely something that the betting industry can take away here.
Most video games now operate under a game-as-a-service model — meaning in many cases they are free-to-play and generate revenue through in-game transactions versus unit sales.
As a result, game publishers have set the gold standard for how to drive long-term player engagement and satisfaction using tactics like sophisticated reward systems, frequent content updates, building organic communities, organized competitions, and so much more.
Together, it makes a strong business case for looking at gambling products through the lens of entertainment and in some cases, taking inspiration from the games industry of how to properly capture that.
In November, Acies Investments Partner Chris Grove spoke to some of the downstream benefits of doing so in the (excellent) JohnWallStreet newsletter.
“When you start making sports betting [look] more like a casual mobile game, or position it closer to entertainment than betting, maybe you can start drawing more from the non-gambling wallet of a typical consumer.”
Beyond tapping into a customer’s “non-gambling wallet,” making betting products more game-like can also help acquire and retain a video game-obsessed generation of players who are now coming into the online gambling fold.
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*Disclaimer: I am a full-time employee of Rivalry.
I play Marvel Snap and I get the logic of the idea here, but a gambling company taking over sounds like a recipe for ruining the core game. Also the list of companies who might have the interest, ability and creativity to pull this off is basically DraftKings?