Analysis: Is there a future in poker networks?
With several recent high profile departures from poker networks, what does 2014 hold for a vertical that struggled last year?
It is no secret that poker, once the poster child of egaming, endured yet another tough year in 2013. With operators across the board showing declines in both player activity and earnings, many wondered if the vertical had much of a future to look forward to.
One perhaps overlooked victim of the vertical’s relative demise has been the suppliers, with B2B technology providers such as GTECH forced to re-evaluate and re-strategise in the face of diminishing interest.
Microgaming’s poker network was dealt a significant blow late last year when both Unibet and Ladbrokes announced their intention to leave in consecutive weeks. Although Ladbrokes’ migration to Playtech’s iPoker network was on the cards, Unibet’s decision to leave came as something of a surprise considering the supplier’s significant moves to improve both its product and ecology during 2013.
Losing its largest customer in Unibet was bad enough, but the operator’s conclusion that poker networks are unsustainable given the changing landscape of the online poker industry served as a damning indictment of what it was leaving behind.
Unibet is to instead develop its own standalone product, hoping to emulate the success 888 has achieved in doing the same. Operators have undoubtedly looked enviously on the success 888 has achieved since abandoning their Dragonfish B2B network to focus on its B2C offering.
Custom building a platform comes with inherent risks. Attracting the kind of liquidity that poker networks can provide is far from a perfect science, while the investment and expertise needed is substantial. In taking the decision to develop its own offering Unibet is undertaking a sizeable leap of faith, but its former head of poker Steve Cutler is convinced the operator has made the right decision.
“They have a great USP with the Unibet Open poker tournament, and I believe other operators will be watching what they do very closely,” Cutler said.
Despite Unibet’s summation that poker networks face an irrelevant future, Cutler considers that they are still important for the vertical, albeit with a bit more tinkering, and predicts Microgaming to bounce back from last year’s snub. “[Microgaming] are certainly one of the better options, especially for operators looking at other networks with an eye on entering the poker vertical,” he said.
Poker networks like Microgaming’s MPN, Ongame and iPoker will, however, need to adapt if they are to wrestle market share away from bespoke standalone products like that developed by 888. Playtech’s decision to effectively split its iPoker network in two and ringfence the more casual poker offerings maintained by sportsbook operators away from hardcore, poker-dedicated sites was controversial but was crucial to maintaining the network’s ecology.
But the networks will need to continue to invest in product as mobile will, much like it is across the entire egaming industry, prove to be a crucial driver of future growth. It is an area Microgaming and Playtech have invested in heavily, with iPoker beginning to roll out its mobile poker product across selected licensees and Microgaming live with both Android and iOS mobile poker products. 888’s most recent advertisement drives have focused heavily on its mobile poker capabilities and market leader PokerStars continues to place a strong focus on mobile platforms.
Further adaptation and innovation can be seen in Microgaming’s introduction of social features designed to not just attract customers, but retain them by giving them achievements to play towards. Such features could breathe fresh life into and revitalise the vertical, with Cutler believing such “socially-inspired” models to be the way forward.
And despite the growing popularity of standalone products, with firms hoping to mimic 888’s success, poker networks undoubtedly have a future in the vertical. For multi-product operators needing to maintain a presence in all four verticals but lacking in the finance or desire to go it alone they will continue provide a simple solution to a difficult problem.
They must, however, continue to adapt and innovate if they are to compete with the more agile bespoke products currently surging through the Pokerscout rankings. Unfortunately for the poker sector, with mobile rising in importance, 2014 is looking like being even tougher than the 12 months that came before.