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It figures
Sep. 7th, 2006 01:18 pmYou 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.
