t was in 2004 that they recognized the critical mistake they had committed and attempted to reposition themselves on the digicam market, but by then it was already too late and by 2012 Kodak had gone bankrupt.
Their main competitor, Fuji, on the other hand, found the courage that Kodak could not summon and fully reinvented themselves when it was required of them, thus enabling them to survive.
It seems unprecedented that such a dominant multinational enterprise that employed up to 145,000 people could shoot from paradise to hell in just under 15 years.
Thus be cautious, as the gambling industry is presently in the exact same situation. The only difference is that the revolution is not a technological one but a customer based one; customers that were born around the same period as digital cameras.
Nevertheless, you are already cognizant of this since the demographics of your customer database unmistakably indicate that these young generations are no longer willing to play the same way that their parents and grandparents did.
The reason for this is simply due to the fact that they were raised playing fantastic skill games on their consoles while also maintaining constant social interaction on their cell phones.
Therefore, the notion that they are looking to play games of luck against the house is completely off the mark.
They are anticipating skill games, games that are structurally social games, with graphic designs that are up to the standards of the video gaming industry and not the recycled experience that we are currently providing for them.
The gambling industry is faced with two choices: the Kodak way or the Fuji way.
Through discussions with most gambling leaders, Kodak’s exact analysis and excuse appears to be prominently used. One can easily recall the argument stating that all the new trends will remain niche markets.
They are well aware that they have been facing numerous problems attracting young customers, but they have conjured up a solution. It is called gamification.
The intention is to keep the traditional individual games that are played against the house and simply transform them into social games that will supposedly attract a large number of young customers. This is a typical Kodak solution.
It is time to face reality.
By the year 2020, youngsters, millennials, the Y generation, whatever name they may go by, will represent 50% of the work force, that is, more or less 50% of our market. Therefore, it is crucial to start listening to them and acknowledging what they have to say.
Yet how can an industry listen to its own customers when it has been playing against these very customers for so many years? Most customers have developed an aversion towards operators, knowing that their loss means your direct gain of their money.
Thus, attempting to become customer centred with this kind of business model feels like something right out of a Kafka novel.
Fortunately, many young B2B companies have already begun to offer products that are customized for them: Daily Fantasy Sport is, of course, one of them, and this is why we launched Oulala.com four years ago. Other options include eSports, Virtual Reality, monetized video games and so on. There are several choices available, but until you truly acknowledge that the market reality has indeed changed, you will only look at them as nothing more than exotic offers.
Gambling operators musts eize the courage to fully reorganize their offer, their business model and their own structure in order to flourish successfully within the next decade.
It is time to embrace the Fuji way and start from a blank page. We must offer customers games that will be centred on taking their real expectations into account.
We should become the natural extension of the video game industry and offer the same type of quality games, with the added monetized feature.
Not doing so will only mean that other companies will most definitely colonize this growing empty space. In DFS, DraftKings has already transformed a noteworthy number of sports betting customers into DFS players in 2016 alone, which only spells out the beginning for them, since other players in gambling have yet to take this threat seriously.
Since the gambling industry has not yet fully embraced the future the Fuji way thus far, the repercussions on our market will certainly prove be massive. My predictions include that:
- Within the next decade, pure players, particularly in sports betting and casinos, will suffer greatly and most minor ones will have disappeared.
- Games that involve playing against the house itself will become niche markets.
- Skill games will grow into a much bigger market than games of luck.
- The dominant networks will survive, however they will suffer a great blow from a loss of income. They will resort to spending their financial reserve on purchasing young companies that are steadily gaining traction. This will be done at a very high cost for them as a result of not investing at the most opportune moment.
- Numerous new operators, arriving either from the video gaming industry, or from start-ups will pierce right into our industry and will go on to invent the innovative kind of games that we have been reluctant to invent ourselves, and they will thus assume leading positions.
History has clearly indicated that if you wish to be heard, you must make positive predictions. For that reason, I will end on a more positive note: DFS is about to become a driver of growth for the gambling industry quite simply because it:
- is a real skill game,
- is a structurally social game,
- is a game that is not played against the house (DFS is a market place),
- will allow you to be customer centred and develop loyalty.
Loyalty undeniably means more profitability which is precisely the kind of prediction we all want to hear.
Certainly, radical changes are brutal and, indeed, the new paradigm must be looked upon as a threat, but only for those who are letting themselves remain at a standstill. For the rest, the next 10 years will definitely bring along a stimulating period where countless opportunities will arise.