For some time now, the casino industry has been abuzz with discussions on the best ways to target millennials and drive new revenue opportunities. Much focus and public discussion have been placed on this topic, white papers have been written, and strategies have been taking shape that millennials have seemingly become the savior to overcome stagnant revenue.
But there’s another perspective the industry needs to consider—perhaps the casino industry should be focusing on “gamers” (video-game enthusiasts) in addition to, or more directly, instead of millennials. Skill-based games and video game gambling are often touted as a premier attraction for millennials, but it’s worth considering the significantly larger market of video-game enthusiasts.
Primarily because of outdated stereotypes and perceptions, gamers are a massive and underserved market. Mention “gamers” and many people conjure the image of a teenager playing video games in their parents’ basement. Nothing could be further from the truth.
Gamers represent a very large and lucrative market opportunity for casino operators. A simple four-part test can be applied to reaffirm the market opportunity. Gamers who are over 21 represent the top percentile of household income, play video games, and are already visiting casinos. This group represents 9 million millennials, 8 million Gen-Xers, and another 6 million boomers. (Source: Narus Advisors.)
The market size is even larger when you consider the remainder of household incomes, and those who are not currently frequenting casinos because there are few offerings that appeal to their interests.
The demographics that make gamers such an attractive target market for casino operators are undeniable. According to ESA’s 2016 “Essential Facts,” today’s average gamer is 35 years old. In fact, there are significantly more adult female gamers (31 percent) than male teenage gamers (17 percent), with female gamers comprising 41 percent of the market. The majority of U.S. households (65 percent) own a device to play video games.
Gamers are also very social, as proven time and again by the sellout crowds at eSports events around the globe. And 54 percent of gamers play with others, including with their friends, family members, parents, and spouse or partner.
Total U.S. consumer spend on video games in 2015 exceeded $23 billion, with the majority ($16.5 billion) allocated to content (games), and the balance going towards hardware and accessories. Gamers have considerable disposable income, but most of their spending is solely focused on video games. If casinos do not have a “gamer offering,” there’s little opportunity to capture any of this meaningful disposable income.
It’s true, gamers love to play video games. The most frequent multi-player and online gamers spend approximately 6.5 hours per week playing with others online and approximately 4.6 hours per week playing with others in person. For many gamers, playing video games is not just a hobby but a strong self-identifier. eSports have become a significant piece of the video game industry, with half of all frequent gamers increasingly familiar and active in eSports, propelling today’s audience for eSports viewers to over 335 million gamers worldwide.
One of things gamers are lacking—and seeking—is a place to meet with other gamers—outings that can offer the “VIP, sexy, cool” experience and atmosphere which casinos have successfully created and become known for in the nightclub space. Playing on a friend’s couch, at an arcade, or even attending an eSports event does not afford the level of excitement and service provided at casinos across North America and around the world.
Imagine a casino experience that finally allows a gamer to feel like the cool kid they have become with the treatment generally reserved for high rollers and nightclub patrons. From their first discovery of the gaming experience to their interaction on social media to travel and
check-in to gaming on the floor, dining, betting on eSports, and winning prizes—these types of experiences would be highly appealing to gamers hungry to be treated in an authentic manner that validates their enthusiasm for video games.
Gamers also have a high propensity for betting. This is evidenced by the huge (often unregulated and even invisible) eSports gambling markets of “skins” betting, eSports books, fantasy sports and other forms of wagering. In 2017, the “visible” market for eSports gambling is projected to be $3 billion and the “invisible” market is estimated to be 10 times that. (Source: ESIC.) This is a significant revenue stream that casino operators should look to bring into their regulated industry by increasing their outreach and initiatives geared towards attracting gamers.
So what can casinos do today, and in the near future, to attract, retain and monetize this still-growing market of gamers? Much of the current focus has been on casinos acting as venue rentals for professional eSports leagues and tournaments. But this represents a very small piece of the potential, and is focused only on the “top of the pyramid” while ignoring the majority of the wider audience of gamers. Casinos need to prioritize the development and implementation of comprehensive “gamer strategies.” These strategies should include a wide variety of activities, events, content production, brand integration, influencers and celebrities, targeted incentives and other initiatives.
Casinos can generate valuable new revenue, and attract an entirely new audience, by building dedicated, multi-purpose spaces to conduct 24/7/365 programs targeted specifically to gamers. While a few casinos are currently demonstrating their understanding of the gamer demographic and revenue opportunity and have become first-movers in implementing strategies to capture this market, there is still a lot of work to be done across the wider industry. This is likely due to the current disconnect between the discussion of millennials and the opportunity to appeal to the huge demand from gamers. The gamer market opportunity is real and actionable today.
The first gamer to earn a significant gaming win, bottle service or other meaningful prize will be the casino industry’s best ambassador ever.