Mobile & iTV gaming – the current picture

Gambit on Licensing (Brands/Formats)

12th Feb 2009

- Report compiled by Sergii Portnov and James Bagley, independent reporters for Gambit

Speakers on the night: (left to right), Tina Thakor-Rankin, Operations Director (Virgin Games), Gareth Wong (Gambit & GamBond® Founder), Jurian VanDerMeer, Head of Brand Exploitation (Endemol UK), Paul Kanareck, Head of FremantleMedia Ventures, and Tom Kenny, Commercial Director (Wagerworks/IGT).

With the convergence of entertainment and branding with gaming, it is vital to get the best the industry has to offer, and this is exactly what Gareth Wong indicates that we have tonight. Speakers tonight include Tom Kenny, the commercial director of Wagerworks/IGT, Jurian Van Der Meer of Endemol, Paul Kanarek of Freemantle and last but not least, to offer an opinion from the other side of the coin, Tina from Virgin Gaming.

Tom Kenny Commercial Director of IGT– The Rise and Rise of online branded games.

Tom immediately states that with the mix of audience present tonight it’s been a difficult presentation to pitch, so he has chosen to go fairly high level with questions at the end establishing any queries that may remain. IGT are the biggest and most successful land based slots provider, renowned for working with household brand names. They own some of the top performing content in the market today, and were one of the first to utilise monopoly, cluedo and other such now famous brands in the gaming industry.

Tom Kenny immediately established the question of “What is a brand?” A brand is a promise. Business is increasingly seen as competing for a customers time as well as his money. IGT wish to create a place and a deliberate experience where a customer wants to spend a measure of time. The focus is on the gaming product actually being relevant to that game, and the promise must be kept – a consumer will have expectations when he plays a machine of a brand he knows, and they must be matched. It makes intuitive sense that the best to work with in online gaming are relevant to the market (the brand features some form of gameplay), some sort of money or prize element must clearly be added and finally to make sure the promise/expectation has been kept. Features must be transparent from real game to slot machine. “Monopoly here and now” is one of their most successful machines and they have endeavoured to keep it as close as possible to the original, from the logo to Mr Monopoly to the use of the real board. A prime example of the strictness of the brand and producer is Hasbro’s unacceptance of an attractive model in a bikini being used to add sex appeal to their previously family orientated game. This feature was immediately rejected by the brand, who stated that the values it portrayed were not acceptable with the brand image that Monopoly has created.

Tom Kenny then spoke in detail of the benefits of branding;

Customer Recruitment
It offers a B2C marketing hook, as trusted brands attract players.

Turnover is higher
Spill over is created
Once recruited, they play non-branded content. The issue of acquisition is solved by the brand power, and conversion/internal marketing is far simpler once the consumer is on your website.

Customer retention – will stay when the experience is premium.

Costs of Branding

Premium brand owners demand a guarantee
Benefits may be trivial and over-worried on.
Management with brand owner ;
Brand owners are stereotyped by Tom as fundamentally greedy, always wanting to exploit you (luckily for Tom after the scathing review it transpired that there were no brand owners in the room); they may be inhibited by fear over the loss of control and distortion of imagery of their brand. They may be worried of legal issues in such a heavily legalised industry.

The information is available (brand bible) to maintain a healthy long term relationship however; make sure the deal you strike with the brand benefits both parties and the relationship should be a happy one.

Branded content is no longer a nice to have, it is a must have. Don’t overdo it, just maintain enough to get them in but enjoy the spill over. Finally Tom Kenny clarified the importance to actively manage the relationship with the brand owner.

Jurian Van Der Meer of Endemol

Gaming and gambling is a very important growth area for Endemol as it follows the logical extension of a product; taking one brand and exploiting it in every possible way is clearly the goal.

The strategy is simple – Act as just an IP rights holder. Requesting that the producer creates a game out of your brand is only the beginning, as to be successful and excel in the industry the options are in place to personally distribute and advertise a product, as well as sometimes producing it themselves; Jan recommends to rarely operate a game however, since the complications of such are vast. It is becoming increasingly common for a producer of games to sell other, personalised and individual games as “tag-ons” in bundles with the requested branded content.

Other products covered by Endemol include live video feeds to gambling occasions or to act as instructional videos; casual gaming too, giving a consumer the option to play for fun. These are easily accessible and of relatively low cost for developers with very broad demographic appeal. The growth industries of Mobile Gaming and Skill Gaming are to be exploited in the future too.

However, gambling remains one of the biggest areas with the vast amount of money in the industry. Endemol supply not only online gaming but also land based slots and arcade machines.

Jurian then again repeated the importance of a healthy relationship with the operators and the actively use portals, drive traffic, cross promote and maintain good customer relationship management. With the future, the potential for a partnership with Microsoft allowing them to exploit the X-Box as a new niche in the market gives interesting ideas for peer-to-peer skill games within the gambling market as being possibly the next big thing.

Freemantle Gaming – Paul Kanareck

Freemantle are the global leader in content production. The business divides into two – one produces television, creating brands around the world. The second half looks to exploit squeeze value, derive value out of whatever platforms they have. You don’t just sell the finished product, you sell the format.

Their vision combines gambling and entertainment. Their target market is growing with regulatory change and broadband penetration, giving new demographics to target. The growth of the female demographic too is fascinating, therefore consumers demand more excitement and quality products.

Essentially, they seek to produce the best game play and a consistent brand experience for your customers.

Brand ownership ensures full integration. They are experts in storytelling and creativity, and a partnership gives access to brand creators. Executive production agents are available from this company too.

The great thing about branding game shows is the relevancy, as they are games (fitting the relevancy discussed by Tom Kenny earlier). Even archived games, like Blankety Blank, can be utilised to achieve new demographics. The associations with winning and the family trust, makes them great tools for achieving consumers.

Interesting about the future is that as broadband rolls out and peoples expectations grow, slots will get more sophisticated (although there is a limit in how many “bells and whistles” the consumer wants); what comes next is more about live entertainment, replicating the TV success. Where did gameshows start? Televison. Whats the next generation of gameshows going to look like? The shift could instead by to online viewing.

Tina Thakor-Rankin – Virgin Games. The other side of the coin.

Virgin may not be the biggest company, but they have one of the biggest brand umbrellas. Tina clarifies her views on each of the speakers companies and explains what they offer to an operator such as Virgin Games. Wagerworks have a monopoly on trusted, comfort value brands. Freemantle exploits nostalgia. What’s interesting from Endemol is its appeal to a completely different demographic, as the audience for Big Brother is wholly different from that of Monopoly. The competition is excellent as it means something for everyone is offered. Where it becomes difficult for Virgin is a brand clash; Virgin is more precious about its brand in terms of what angle and how it comes across. This means they have to be incredibly careful in terms of what brands THEY are associated with. Their software provider, Wagerworks, is known for its trust and family value. This may seem to be a clash to the young and trendy Virgin, but the possibilities to take something flat and make it modern and mainstream – the action packed monopoly that was used as an example by Tom Kenny earlier for example – more than compensates for any possible distortion in imagery. The most contemporary game is transformers, as they continue to roll with the times. Tina finishes by clarifying that non-branded good games will probably be your biggest earners eventually, despite the initial popularity of branded content.

Questions and answers

Immediately Gareth pounces on a comment in Tina’s closing speech; “Transformers is for kids, could CSR not be questioned?”

The speakers acknowledge that it is a fair question as Transformers undeniably started out as a toy, with a whole generation of mainly boys having grown up with it. What will be done is to proactively work with ASA in their advertising campaign, player protections and ID verification will be utilised. They are doing a game about a film that is based on a toy. This industry is so good at re-inventing itself, at constantly re-energising. The people that grew up in the 90’s have a lot of nostalgic appeal, and this cycle will keep evolving.

“What is the trade off between price of the games and the brand its associated with?”

Assuming the question was associated with the costs paid to a brand to secure the rights to use their products, the speakers explain why the rates are so high. Third parties are often 4th or 5th parties, an accumulation over time of a lot of people’s rights. When they take their premium fee, it’s because their ownership structure is complex and money is distributed back.

The questioner re-articulates that it was not a criticism on charges from brand owners, yet someone has to pay for this and surely that’s the customer. What’s the sensitivity from the two games, can they not get the reputation that worse deals are available for branded games, or are customers naive enough to play a branded game despite having a less profitable success rate?

The speakers clarify that customers are not going to suffer on the return to payer as it is ludicrous to suggest the winrate would differ from branded to un-branded content . However after paying all the costs and lowering margins, it’s getting thinner on whether branded content is profitable; “too many snouts in the trough”. There is now a pressure on game licensing deals. A balanced portfolio of games is needed.

The key is, attracting with branded games, retain and maximise profit with unbranded.

From Tina’s experience, branded games outperform unbranded games by 2 or 3x, despite the greater margin for unbranded games. It comes down to the game as a gambling product; the good ones will excel once customers are attracted to your site. A combination of both is vital.

You need branded content but do it right, not just the shop window. Mission Impossible on Party Gaming, its terrible. “The game is a dog”. Tried to do branded content, didn’t work, now shopping around for other content.
The top performing game, Da Vinci Diamonds, is just a great game despite the lack of exposure and branded content
Discussion moved onto how heavily advertised brands are, with it being mentioned that few in the room have seen a Virgin Games commercial; Tina states that they rely more on brand awareness than anything else with the lack of a landbased legacy.

Gareth asks for a comparisons via show of hands of who have seen commercials for Jackpot Joy as opposed to Virgin games, before humorously asking if there were any Jackpot Joy People here.. before commenting jovially “ Their games look horrible don’t they!

The question was then raised of dealing with firms irritated at being used simply for the spill over?

Brand’s only get paid for the revenue on their games, however it makes intuitive sense that a brand would instead request some share of lifetime value too. While clearly the operators would not want this to come to light, it does raise some questions in terms of the potential future demands for brand owners.

Discussions are closed with a comment on just who is the boss in the production line? Is it the brand, the operator, the interlink? Who has the power of negotiation?

When this question is considered, all that can be looked at is the market; in such a highly developing and growing market, clearly the producer holds the power.

Some Networking photos:

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Speaker Profiles:

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Speaker Profiles:

Paul Kanareck is Head of Ventures at FremantleMedia, the global production business owned by RTL Group and Bertelsmann.

FM Ventures is responsible for driving business diversification beyond FremantleMedia's core business.

FM Ventures launched a new business unit, FM Gaming, in September 2008. FM Gaming has been established to expand Fremantle's presence in the online gaming industry through investment and new product development..

Paul started his career as an investment banker at NM Rothschild and then rode the dotcom wave as one of the first employees at boo.com. He subsequently built new businesses at Vizzavi (a Joint Venture between Vodafone and Vivendi) and Channel 4 Television. Most recently, Paul was founder and MD of TV Nation.

Paul is a graduate of Cambridge University

Tom Kenny, Commercial Director, WagerWorks

Tom Kenny is Commercial Director at WagerWorks, the online subsidiary of NYSE-listed IGT and the world’s most successful slot machine company. Tom’s role is to grow WagerWorks’ business by helping to maximize the performance of WagerWorks’ operator partners – including Sky (both internet & iTV), Virgin, Paddy Power, Blue Square and Cashcade - and developing new alliances and delivery channels.

Tom has worked in gambling since 2002, initially as a consultant to remote operators including:Bet365, Betfair, Betinternet, Global Bet Brokers, Victor Chandler, WBX

More recently Tom was Chief Operating Officer with Cantor Gaming. During this time Tom played a leading role in Cantor Gaming’s launch and rapid growth via corporate partners including Las Vegas Sands, Emap PLC, Punch Taverns PLC and Newcastle United Football Club.

Tom has chaired and presented at various international conferences on gambling, and given interviews to national newspapers, TV, radio and the trade press on a wide range of gaming related subjects.
Before entering the gambling industry, Kenny was Vice President eBusiness with Citibank. He has an MBA from ESADE (Barcelona), and undergraduate degrees in Philosophy Politics & Economics from Balliol College, University of Oxford. Married with 2 small children in his spare time Tom enjoys horseracing and jazz music.

Jurian VanDerMeer, Head of Brand Exploitation, Endemol UK

Jurian van der Meer is head of Brand Exploitation for Endemol UK, in this role he is responsible for licensing and product development of Endemol's intellectual property, for example Deal or No Deal and Big Brother.

In addition to his UK role, Jurian is also responsible for the international roll out of Endemol's gaming strategy.

Before joining Endemol, Jurian worked for Young & Rubicam and Lowe as MD of their digital unit.

This site is organised by Gareth Wong, you can email him to discuss any aspects relating to this site.