It figures
Sep. 7th, 2006 01:18 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksYou can learn a lot from interim reports. The PartyGaming statement this morning was a veritable hive of useful information on the future of, if not the online poker industry, then at least the PartyGaming industry.
Firstly, the old PartyPoker marketing style is clearly coming to the end of its useful life. And muchos credit to Party for spotting that you can't flog a dead horse forever. It says in its report:
To date the Group's marketing approach has been focused almost exclusively on driving new poker sign-ups through a series of highly targeted and effective campaigns. As the Group's product portfolio and international reach has expanded, there is a need to establish a more integrated and multi-dimensional brand strategy. This is likely to include a number of strategic branding partnerships that will aim to cross-promote the Group's games to new and existing customers as well as build brand equity for each of the key product brands.
This kind of links in with the only areas where whole new shoals have recently been introduced to the world of online poker, only for the population to be annihilated by players who are only capable of taking money of players who do not have a clue. Betfair, Virgin and Paradise have all seen influxes of players new to poker (in the first and the last cases from the world of sports betting) who made the games veritable free money - for a while. This kind of game is never sustainable and, if it were a local game, metagaming would require that you win a little less largely. I shall return to this point at a later date, with particular reference to Bad Blood's observation that the local games in his town are being destroyed by the better online players.
So, Party moves away from affiliates and looks to brand-linking.
2) More focused marketing. I think that I mentioned that I wasn't getting any reload offers. hardly surprising, really. Read on:
Player retention remains a key element of the marketing function. Improving our understanding of the playing desires and behaviour of our players is at the very heart of our strategy. The investment made in 2005 in developing a highly sophisticated player analytics tool through an extensive data mining project is now beginning to bear fruit. Embedding this knowledge into our systems will enable us to ensure that our players receive the right offer, through the right channel, at the right time, therefore maximising their lifetime value to the Group. One example of the benefit we are starting to see from this initiative is that we have been able to improve the appeal of our 'reload' campaigns and increase the response rates from players. This has helped to improve the trends in player attrition increasing overall player activity.
Well, I'm all for player retention. Even Party must have realized that a business model can't survive on finding ever-new shoals of fish. Look at the cod industry for proof of that.
Mergers and acquisitions are likely to form a key part of the Group's strategic development.
Self-explanatory, really, but nice to know. A wave of consolidation awaits. I doubt that you'll be able to make any money out of this, unless you are, say, a Scandinavian operation with lots of locally based players. Because that will make you a prime target. And if you can set up an operation in the far east, well, even better.
I print the following on "customer service" because the first part will probably give you a laugh, while the second part seems to indicate that Party realizes there is a big difference between your typical query from a fish and your typical query from a long-term regular player.
The Group's customer service teams in Gibraltar and India are available 24/7, helping customers to resolve any issues they may have with the games that they are playing as well as issues regarding payments to and from their PartyAccount. The Group has a wholly-owned and exclusive business process outsourcing ('BPO') operation based in Hyderabad, India called IVY Comptech ('IVY'). Maintaining high service levels is a key priority and IVY prides itself on meeting the standards set by PartyGaming.
Hah!
The customer service teams are now split so as to allow a more focused approach on individual customer segments, identified by different playing patterns and by value. The nature of queries tends to vary by segment and so we have improved the alignment of our customer service operation with the structure of our customer base which should help to improve the effectiveness of our customer service operations. In addition, our higher value customers are now able to get much faster resolution of any issues they may have which should improve retention among this important player group.
Unfortunately, I've yet to see any evidence of this, with our friends in Hyderabad mainly being good at lying to you, but not being any use for anything else. But if Party actually implement a system whereby regular players get a different set of customer service workers, well, it couldn't be any worse.
The Future:
Any player out there who depends on idiots losing to make his or her money might as well start looking for a new hobby now. I think that within 18 months the online No Limit and Limit games will have only a smattering of fish, with the sharks chasing after them harder and harder, meaning that they go broke more quickly. Eventually the position will stabilize, but at what level I don't know. My guess would be that a system not dissimilar to that which was operating in the second-tier LV casinos (pre-2004) will come into play. During weekdays you will have hardcore weak-tight regulars, sitting around, breaking even, waiting for the occasional fish and living off poker site promotions and rakeback.
Weekday evenings (US time) will have a few more recreational players, willing to lose $50 or so, perhaps in a ratio of one-to-five compared with the weak-tights. Provided these players can be kept happy, you have a sustainable system with the marginal players winning just enough not to quit, and the losing players losing little enough not to get fed up.
Weekend evenings will produce more recreational players, perhaps twice as many. And these players will be willing to lose more, perhaps $200.
Then there will be new money such as bad beat winnings, tournament winnings, and, with the cross branding with the sports book, gambling winnings. All will be just enough to keep the online poker economy sustainable, but with the marginal players making far less than they did two or three years ago.
At the higher levels, there are different economics involved. There are weak(ish) players with a lot of money who have enough ability to win and lose big sums. Eventually they get fed up, probably having lost a few tens of thousands, but new rich people come in to take their place. Think "The Hustler" and the rich guy who loses to Paul Newman at French Billiards, eventually. The good players with "gamble" in them will take these guys on. Sometimes the good players might get put into poker hospital for a while, but these rich guys will lose a large amount, and all of this enters the poker economy. Indirectly, by various means, it sustains even the lower-level games. There is "trickle-down" as well as "trickle-up". The theory that the only winners in online poker are the winners in the biggest games is a myth.
Firstly, the old PartyPoker marketing style is clearly coming to the end of its useful life. And muchos credit to Party for spotting that you can't flog a dead horse forever. It says in its report:
To date the Group's marketing approach has been focused almost exclusively on driving new poker sign-ups through a series of highly targeted and effective campaigns. As the Group's product portfolio and international reach has expanded, there is a need to establish a more integrated and multi-dimensional brand strategy. This is likely to include a number of strategic branding partnerships that will aim to cross-promote the Group's games to new and existing customers as well as build brand equity for each of the key product brands.
This kind of links in with the only areas where whole new shoals have recently been introduced to the world of online poker, only for the population to be annihilated by players who are only capable of taking money of players who do not have a clue. Betfair, Virgin and Paradise have all seen influxes of players new to poker (in the first and the last cases from the world of sports betting) who made the games veritable free money - for a while. This kind of game is never sustainable and, if it were a local game, metagaming would require that you win a little less largely. I shall return to this point at a later date, with particular reference to Bad Blood's observation that the local games in his town are being destroyed by the better online players.
So, Party moves away from affiliates and looks to brand-linking.
2) More focused marketing. I think that I mentioned that I wasn't getting any reload offers. hardly surprising, really. Read on:
Player retention remains a key element of the marketing function. Improving our understanding of the playing desires and behaviour of our players is at the very heart of our strategy. The investment made in 2005 in developing a highly sophisticated player analytics tool through an extensive data mining project is now beginning to bear fruit. Embedding this knowledge into our systems will enable us to ensure that our players receive the right offer, through the right channel, at the right time, therefore maximising their lifetime value to the Group. One example of the benefit we are starting to see from this initiative is that we have been able to improve the appeal of our 'reload' campaigns and increase the response rates from players. This has helped to improve the trends in player attrition increasing overall player activity.
Well, I'm all for player retention. Even Party must have realized that a business model can't survive on finding ever-new shoals of fish. Look at the cod industry for proof of that.
Mergers and acquisitions are likely to form a key part of the Group's strategic development.
Self-explanatory, really, but nice to know. A wave of consolidation awaits. I doubt that you'll be able to make any money out of this, unless you are, say, a Scandinavian operation with lots of locally based players. Because that will make you a prime target. And if you can set up an operation in the far east, well, even better.
I print the following on "customer service" because the first part will probably give you a laugh, while the second part seems to indicate that Party realizes there is a big difference between your typical query from a fish and your typical query from a long-term regular player.
The Group's customer service teams in Gibraltar and India are available 24/7, helping customers to resolve any issues they may have with the games that they are playing as well as issues regarding payments to and from their PartyAccount. The Group has a wholly-owned and exclusive business process outsourcing ('BPO') operation based in Hyderabad, India called IVY Comptech ('IVY'). Maintaining high service levels is a key priority and IVY prides itself on meeting the standards set by PartyGaming.
Hah!
The customer service teams are now split so as to allow a more focused approach on individual customer segments, identified by different playing patterns and by value. The nature of queries tends to vary by segment and so we have improved the alignment of our customer service operation with the structure of our customer base which should help to improve the effectiveness of our customer service operations. In addition, our higher value customers are now able to get much faster resolution of any issues they may have which should improve retention among this important player group.
Unfortunately, I've yet to see any evidence of this, with our friends in Hyderabad mainly being good at lying to you, but not being any use for anything else. But if Party actually implement a system whereby regular players get a different set of customer service workers, well, it couldn't be any worse.
The Future:
Any player out there who depends on idiots losing to make his or her money might as well start looking for a new hobby now. I think that within 18 months the online No Limit and Limit games will have only a smattering of fish, with the sharks chasing after them harder and harder, meaning that they go broke more quickly. Eventually the position will stabilize, but at what level I don't know. My guess would be that a system not dissimilar to that which was operating in the second-tier LV casinos (pre-2004) will come into play. During weekdays you will have hardcore weak-tight regulars, sitting around, breaking even, waiting for the occasional fish and living off poker site promotions and rakeback.
Weekday evenings (US time) will have a few more recreational players, willing to lose $50 or so, perhaps in a ratio of one-to-five compared with the weak-tights. Provided these players can be kept happy, you have a sustainable system with the marginal players winning just enough not to quit, and the losing players losing little enough not to get fed up.
Weekend evenings will produce more recreational players, perhaps twice as many. And these players will be willing to lose more, perhaps $200.
Then there will be new money such as bad beat winnings, tournament winnings, and, with the cross branding with the sports book, gambling winnings. All will be just enough to keep the online poker economy sustainable, but with the marginal players making far less than they did two or three years ago.
At the higher levels, there are different economics involved. There are weak(ish) players with a lot of money who have enough ability to win and lose big sums. Eventually they get fed up, probably having lost a few tens of thousands, but new rich people come in to take their place. Think "The Hustler" and the rich guy who loses to Paul Newman at French Billiards, eventually. The good players with "gamble" in them will take these guys on. Sometimes the good players might get put into poker hospital for a while, but these rich guys will lose a large amount, and all of this enters the poker economy. Indirectly, by various means, it sustains even the lower-level games. There is "trickle-down" as well as "trickle-up". The theory that the only winners in online poker are the winners in the biggest games is a myth.
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2006-09-07 02:25 pm (UTC)I have thought recently that the state of online poker is well into the evolution that you describe here. The games are becoming less and less soft. The recreational player supply is diminishing, I believe.
It's not an online poker apocalypse, in my opinion. A very good player can still walk away with a playing profit, though his expectation of the magnitude of the profit will have to be decreased. For the serious player, it can be more mentally stimulating to play in tougher games than in games where you rely on truly fishy play to bring home the money.
That said, I still spend a significant amount of time playing at Paradise (around 1/3 to 1/2 of my play is there). I enjoy playing in loose games and a few extra dollars never hurts. Of course, now that Sportingbet's CEO was detained here in the States, a la Bet On Sports, that fish pond may dry up for us Yanks.
Just curious, but I noticed that you do not have a Party banner here anymore. Was that an LJ issue or an issue you have with Party?
Michael
Doing it for fun?
Date: 2006-09-07 05:54 pm (UTC)So is there a point and a style in playing poker where you'd wish to keep playing if you were having an enjoyable game, but breaking even or, perish the thought, consistently but slowly losing? It's obviously from lots of what you've written that this is what the fish are doing - having a bit of fun at the cost of $50 or whatever. But could you and your fellow semi-pros do that?
Re: Doing it for fun?
Date: 2006-09-07 06:47 pm (UTC)Once each trip to Vegas I deliberately play stupidly, a kind of LAGGY style that usually costs me a hundred bucks or so. I do it to try to get into the heads of losing players. And, guess what, it IS fun. But afterwards, you feel bad. So, it's immediate gratification, it's easy, and afterwards you suffer regret. Think of it like eating a nice big ice-cream when you are a kid. Pleasurable at the time, but afterwards you wish that you hadn't done it.
Now, playing properly isn't much fun at the time. It's about focus, keeping control. It's a bit like going to the gym. It has a certain zen-like aspect to it. But, at the end of the session, or the end of the month, when there is a nice plus sign sitting there, you say "yes, that was worth it".
However, many winning players need the thrill as well as the profit. The trouble with always winning at the same stakes is that the very certainty of the eventual win takes away the enjoyment while you are playing. Now, it doesn't for me. I still get remnants of pleasure playing at any stakes, even for pennies. I will still play "properly". But for many players, they need the immediate thrill of the gamble as well as the long-term gain. So they move up in stakes. Some carry on winning, some don't. But all of them eventually reach a level either where they are winning but get no thrill, or they are getting the thrill, but not winning.
I guess there are people who don't really care about anything but passing the time chatting to dealers and other players, who will lose $50 and be content. But, no, I couldn't be like that, even if I deliberately played in a way that required no thought. However, when I play the $2-$4 at the Flamingo, I don't really feel any different if I walk away winning $100 or losing $100, provided I have played properly. But if I walk away losing $100 when I've played badly, then I feel bad.
PJ
Re: Doing it for fun?
Date: 2006-09-07 06:52 pm (UTC)I have been fortunate so far as to not find myself in the situation of breaking even or consistently but slowly losing, so I have not been confronted with the though of this. However, that will not stop me from the following speculation.
I doubt that most semi-professional poker players would be able to casually lose $50 or so every time, on average, when they sit down and play as a fishy poker player can. I think that the difference is how a serious player views or places importance on winning or losing versus how a non-serious player does. It's about the motivation behind playing poker, in my opinion.
For the non-serious player, the money lost is just the cost of a good time and there is no true motivation to win. That $50 could be spent playing poker, dining out, seeing a movie with your significant other, etc. If the non-serious player wins in any given day, after the initial thrill, the money is viewed as money that can spent in the future to play again for the sake of a good time or spent on some other pursuit.
On the other hand, a serious (semi-pro) player has the motivation to win. Winning validates his/her abilities and justifies the time and effort put towards the playing poker. If a serious player found that he/she was consistently but slowing losing and honestly could not see that they could improve, I believe that he/she would likely pursue other activities and give up poker as a pursuit.
Re: Doing it for fun?
Date: 2006-09-07 07:15 pm (UTC)I guess it's a little like soccer. As a total amateur I might well want to kick a ball around and even play matches just for fun and it doesn't matter if I'm knackered and beaten at the end so long as I have a good time. This is a game. Semi-pros want to train, participate, compete and WIN, but they are never going to get rich. For them it's a sport and they're still having fun.
For professionals this is their entire life and they aspire to nothing but winning - enjoying the thing is entirely secondary to the win and the wage packet. For them it's a job.
At least with poker you can be a semi-pro and still be a fat slob.
And I think it sums up very accurately why I will never be a poker player other than in some drunken £20 Midcon buy-in. If I want to take part in a sport I'll stick to 5-a-side. I could never handle the training when I'd rather be having fun.
Re: Doing it for fun?
Date: 2006-09-07 07:25 pm (UTC)Michael
no subject
Date: 2006-09-07 06:50 pm (UTC)It wasn't an LJ issue, although the fact that I couldn't see the banner when I logged into the site from work was a minor factor, I admit!
PJ
no subject
Date: 2006-09-07 07:09 pm (UTC)I see that you often refer to the $2-$4 game at the Flamingo in Las Vegas. I have played in that game a few times and generally enjoy it. Is playing there a staple of every Las Vegas trip you make or is the Flamingo where you generally stay? For me, the Bellagio $4-$8 has become the usual staple. For what it is worth, you may want to check out what many consider the best low limit game on the Strip, the $6-$12 limit Hold'em game at the Mirage.
Michael
no subject
Date: 2006-09-07 08:18 pm (UTC)Last time I was there I focused on 4-8 in MGM, 8-16 and 4-8 in Bellagio, 4-8 in Wynn, and I didn't play that much in Flamingo. But it passes the time niceley, especially when the friendlier dealers are playing.
The room has deteriorated a bit since JC went to Bally's as day supervisor and Patti went to the Wynn, but I still know Earl and Dave, and a few others. There used to be a coterie of reulars, but they gave up when the 4-8 game died and the rake went up to 10% to $4.
PJ
no subject
Date: 2006-09-07 08:19 pm (UTC)Also, I've NEVER played in the Mirage. I sat there and waited half an hour to get in the 10-20 game once, and then gave up. Maybe this time...
PJ
no subject
Date: 2006-09-08 10:47 am (UTC)I would also recommend the 15/30 at the Wynn and the Bellagio. By and large, people do what they are supposed to do, without being too smart. So, lots of your 2/4 analysis would probably hold true(er) at 15/30 - you just have to take enough bankroll with you to be comfortable with +/- $1k each session. Which seems fair enough - the best way of re-couping the cost of turning left when you get on the plane....
no subject
Date: 2006-09-08 12:27 pm (UTC)I've watched the games at Bellagio and, although playing is different from watching, the game at which I felt I could most accurately place what the players were doing was the 30-60. The 15-30 I watched happened to be occupied by a couple of female Asian LAGS, which would have made for very high volatility/potentially very high profit. These were typical "semi-colluders", throwing in raises and reraises with shit and then making sure that, if they got opposition after the flop, only the best of the pair went up against the person taking a stand.
30-60 was much dourer, but I saw no signs of genius - kind of steady, competent, good 3-6 players were the rule. some weak-tights, some tight-ags, but not many LAGS. The problem with being laggy on your own, rather than having company, is that you get shot down very very quickly, unless you are incredibly lucky.
However, as you say, if you can cope with four figure swings, the 15-30 is the place to be, I think.
PJ
no subject
Date: 2006-09-08 11:11 am (UTC)What mechanics cause "trickle-down"? Loosing money at lower tables to blow off steam is something I have done before - is there anything else? I wouldn't think that would be substantial enough to count.
skills
no subject
Date: 2006-09-08 12:21 pm (UTC)Now, suppose you are that same player, but when you take your shot at the 100-200 there is a rich recreational player there, slowly and with much volatility losing $100,000 over a year. No longer do you do your bollox. In fact, you do quite well. So you don't return to the 30-60 game.
This has the effect of "promoting" the rest of the 30-60 players. Modest winners become bigger winners, break-even players become modest winners, and losers become break-even. The net result is that a number of players who would otherwise have dropped back down to 20-40, where they know they can win, can now stay at 30-60.
This means that all the players at 20-40 do relatively better, and so the effect continues, reducing in impact, right the way down to $2-$4 and beyond, even as far as 1cent-2cents, although I doubt whether the impact that far down would be statistically measurable. However, the $100,000 that the rich recreational player brings into the poker economy benefits every level as well as the level at which he is playing.
This is true at all levels. The main beneficiary of a sum of money brought into the game (say, $3m as a result of a Party marketing campaign), benefits mainly the players at the levels where the new money arrives and at the site where the new money arrives. But it also trickles up (as winners move up a level) and down (as those who would be losers, cease to be losers, and so stay at the same level), and sideways (as people move to other sites at the same level).
PJ
Yes India customer service srewed up coz they are..
Date: 2006-09-13 04:43 am (UTC)