It wouldn’t be fair to say that anyone enquiring about the Asian gaming scene faces a wall of silence when it comes to the specifics of the market but there is an element of the-first-rule-of-fight-club about it all.
As one experienced gaming executive living and working in Asia says, given the regulatory profile in most Asian jurisdictions, it doesn’t pay to say too much in public. “It’s stupid to be high-profile in Asia,” the source adds.
Or as another European-based gaming executive says, “there are so many wheels within wheels and people saying one thing and doing another.”
Still, solid information about what is happening across the region does occasionally leak out. In particular, Playtech’s recent comments about its travails in Asia provide some insight into a clearly competitive landscape for suppliers.
In its profit warning in July last year, the company said its revenue run rate in Asia was “materially below” average. The company blamed the “sudden” deterioration on an “aggressive pricing environment from new entrants.”
“Microgaming, Playtech and NetEnt were the first into the market and they dominated by size,” says our seasoned executive. “But they didn’t dominate on innovation. And arguably now they are being dominated by innovation and by price pressures because the market is so competitive and the B2Cs are more powerful and they can drive down the price.”
One such new entrant is QTech Games, a developer and supplier of slot games which claims to be the fastest-growing in Asia. Global chief executive Markus Nasholm says one look at the “crude numbers” for Asia point to why the sector has become so competitive and why there has been a “transformation” within the past three years.
“Just in population alone there are 4.5 billion (people) in Asia versus 741 million in Europe,” he says. “You don’t need to be an accountant to interpret those figures for each continent’s respective potential.”
Another company targeting Asia is Kalamba Games which itself is based in Malta and Krakow, Poland. Chief operating officer Alex Cohen says the key to success is content. “To be successful, a new supplier must be very efficient at producing high-quality content, while providing innovations that players and operators respond well to.”
Kings of content
Whatever the nature of a given market, whether regulated, grey or black, the same commercial dynamics will determine whether the product is a hit with the end consumer. “Trite as it may sound, content remains king,” says Nasholm.
But what will be crucial is whether the product is tailored, not just for Asia but at an individual territory level.
“It is definitely not a homogeneous region, and that is reflected in terms of styles of graphics, math, and betting activity,” says Cohen.
Indeed, Nasholm makes the point that the Asian market is as fragmented as Europe, making it vital that the games portfolio is targeted. “Such is the ever-expanding breadth of taste and sheer volume or games, it’s a matter not only balancing quality with quantity in any given region, but also sifting through that quality to define the desirable games.”
Cohen says that at Kalamba the aim is to understand the nuances of the various Asian audiences. “We attempt through several of our designs to make culturally relevant games for the Asian market,” he says. “We see many other suppliers trying to do Asian-style games through a very European lens, but it's a different matter to make a game that appeals to the audience on its own terms.”
Still, the differences between game preferences shouldn’t be overstated. Cultural differences have to be taken into account – mah-jong is, in Nasholm’s words, “distinctly China’s game of choice” for instance – but baccarat works across the continent. So with games, as Cohen says, most cultures will have been exposed to Chinese and Japanese-style content.
Technology is definitely a driver in Asia as elsewhere. “Smartphone-adoption rates continue to rise rapidly over this great continent, and this tide is only running one way,” says Nasholm.
Further developments are also set to drive the market forward. A particular success across the continent is live casino, and while Nasholm says that both RNG game sand live casino “happily co-exist” at present, he foresees changes as games become ever more immersive.
“Ultimately, as the RNG trend becomes more seamless and convincing, overcoming ingrained player biases in, for instance, India, live casino will likely concede any ground it holds for reasons of cultural trust alone,” he predicts.
This might be the next step change in Asia and what can be guaranteed is that the next phase of development within the market will be just as crowded as it is currently.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
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