Social Casino Gaming: Casual Games Sector Report 2012

Social Casino Gaming 2012 C a sual G ame s Sec tor Rep or t

What are social casino games?

What makes social casino games special?

1. Easy transition from computer to mobile gaming: offering the same user experience as video slots and video poker.

2. Familiar game mechanics lead to short learning curve and easy adoption for social gamers.

3. Sub-genres poker, casino, and slots generate 1.6 to 2x the ARPPU of the overall social category.

4. Social casino games also thrive in key markets where real-money gambling is legal.

Social casino games are: Games that recreate popular casino games like poker, slots, table games, and bingo on a social platform.

800

700

0

0

30% May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012 Aug 2012

Fast growth of social casino segment drives social games growth.

May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012 Aug 2012

Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012 Aug 2012 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012 Aug 2012

300

200

100

Growth of the Genre 0 Asia

Europe

North America

Latin America

social casino Rest of the Games World

social casino audience vs. social gaming audience—worldwide (MUU) (millions)

social casino games social games

600

500

400

300

200

100

social casino percentage

30% 8

7

25% 6

20% 5

4

15% 3

10%

2

5%

1

Social Casino Gaming Report 2012 Ca s ua l G a m e s A s s o c i at i o n

xample oubleDown Casino exas HoldEm Poker otomania

The Players

overall social games

How does the average social casino gamer compare to the average social gamer?

Female ages

35-44

Demographics (Worldwide) casino games

average age

Demographics (Worldwide) Publisher Average Age IGT/DoubleDown Interactive Casino Games 37.8 years old Zynga Poker Games 27.3 years old Caesar’s/Playtika Slots Games 40.9 years old

Male 44.1% 71.0% 39.6%

Overall Social Games 35 to 44 years old

Female 55.9% 29.0% 60.3%

Example DoubleDown Casino Texas HoldEm Poker Slotomania

Publisher IGT/DoubleDown Interactive Zynga Caesar’s/Playtika

Female

37.8 Demographics (Worldwide) Average Age 37.8 years old 27.3 years old 40.9 years old

Casino Games Poker Games Slots Games

Overall Social Games 35 to 44 years old

Male 44.1% 71.0% 39.6%

Female 55.9% 29.0% 60.3%

Example DoubleDown Casino Texas HoldEm Poker Slotomania

poker games

average age

Demographics (Worldwide) Publisher Average Age IGT/DoubleDown Interactive Casino Games 37.8 years old Zynga Poker Games 27.3 years old Caesar’s/Playtika Slots Games 40.9 years old

Female

Overall Social Games 35 to 44 years old

Male 44.1% 71.0% 39.6%

Female 55.9% 29.0% 60.3%

Example DoubleDown Casino Texas HoldEm Poker Slotomania

Publisher IGT/DoubleDown Interactive Zynga Caesar’s/Playtika

Female

slots games

27.3 Demographics (Worldwide) Average Age 37.8 years old 27.3 years old 40.9 years old

Casino Games Poker Games Slots Games

Overall Social Games 35 to 44 years old

Male 44.1% 71.0% 39.6%

Female 55.9% 29.0% 60.3%

Example DoubleDown Casino Texas HoldEm Poker Slotomania

average age

Demographics (Worldwide) Publisher Average Age IGT/DoubleDown Interactive Casino Games 37.8 years old Zynga Poker Games 27.3 years old Caesar’s/Playtika Slots Games 40.9 years old

Female

Overall Social Games 35 to 44 years old

Male 44.1% 71.0% 39.6%

Female 55.9% 29.0% 60.3%

Example DoubleDown Casino Texas HoldEm Poker Slotomania

Publisher IGT/DoubleDown Interactive Zynga Caesar’s/Playtika

40.9

Female

44.1%

55.9%

71.0%

29.0%

39.6%

60.4%

Male

Female

Male

Female

Male

Female

example

example

DoubleDown Casino

Texas HoldEm Poker

publisher

publisher

IGT/DoubleDown Interactive

Zynga

Audience Size example Audience Size Worldwide 2012E 183.3 2013E 209.9 publisher 2014E 234.8 2015E 246.2

Slotomania Caesars/Playtika

Audience Size U.S.

(millions) Casino and Slots skew slightly older than overall social games, 2012E 25.85 but Poker is a young, male-dominated audience.

2013E 27.09 2014E 27.40 2015E 27.92

audience size (millions)

worldwide audience size (millions)

40

U.S.

35

250

200

30

U.K.

25

Australia

20 15

South Africa

10

Audience Size Australia (millions) 150 2012E 2.15 2013E 2.68 2014E 2.91 2015E 2.95 100 Audience Size South Africa (millions) 50 2012E 0.91 2013E 1.41 2014E 1.74 2015E 1.90

5 0

Audience Size U.K. (millions) 2012E 6.13 2013E 6.96 2014E 7.14 2015E 7.08

2012e

2013e

2014e

2015e

0

2012e 2013e 2014e 2015e

30

The Payers

social casino Games

How Social Casino Games are Monetized The U.S. is the largest market for social casino gaming even though real-money gambling is not legal. Instead, the U.S. monetizes by selling in-game currency that allows players enter tournaments, increase chances of winning, and extend gameplay.

U.S. ARPPU august 2012

$78.42

$38.56 $10.18 Slots

Overall Social Gaming

Social casino games average a conversion rate between 2% and 3.5% in the U.S. depending on the sub-genre.

Mobile Gaming

Revenue Models: 1. Slots Players purchase coins for additional and higher stakes spins. Slotomania by Playtika encourages players to risk more coins per spin by offering extra experience points for higher wagers.

2. P oker As a skill-based game, poker requires differentiation to accommodate all players. Texas HoldEm Poker by Zynga has several tables organized by skill level and stakes. Serious players by chips to play with other serious players without taking the time to earn money in the game, while less skilled players buy chips to extend game play.

3. Bingo In Bingo Bash by BitRhymes, players earn experience for each game they play, which unlocks bingo rooms, collectible items, and the ability to participate in tournaments. Players can also purchase game coins to buy in-game items like power ups and custom daubers.

Social Casino Gaming Report 2012  Ca s ua l G a m e s A s s o c i at i o n

Notable Developers and Publishers Zynga

Caesars/playtika

> Increased social casino gaming offerings this year with the releases of Zynga Slingo and Zynga Bingo. > Developing real-money poker game for release in the first half of 2013. > Currently owns three of the top four most popular social casino games on Facebook with Zynga Slingo, Texas HoldEm Poker, and Zynga Bingo. > Mobile social casino games Poker by Zynga and Slots by Zynga.

> Acquired by Caesars Interactive Entertainment in May 2011. > Known for its slots game Slotomania, which grossed over $13MM worldwide revenue in August on Facebook alone. > Slotomania reached #1 top grossing app on iPhone, iPad and Android.

IGT/DoubleDown Interactive > Acquired by IGT in January 2012. > Popular Facebook offering, DoubleDown Casino, generates $10.3MM worldwide revenue in August. > DoubleDown Slots on iOS, a top 25 grossing app.

wms industries > T eamed with Large Animal Games to release Lucky Cruise Slots in January 2012. > L aunched subsidy Williams Interactive to focus on the social casino market in June 2012. >W illiams Interactive independently released Jackpot Party Casino on Facebook and has 2MM monthly active users today. >R uns Jackpot Party Casino, a real-money online casino launched in 2010 in the UK.

Notable Developers and Publishers Zynga

http://company.zynga.com/

IGT/DoubleDown Interactive

http://doubledowninteractive.com/

Caesars/Playtika

http://www.playtika.com

WMS Industries

http://www.williamsinteractive.com/

social Social casino GAMES Games

Revenue

2012e 2013e 2014e 2015e

revenues by individual market (billions) $1.2 $1.2 $1.0 $1.0 $0.8 $0.8 $0.6 $0.6 $0.4 $0.4 $0.2 $0.2 0

Asia

0

Europe

Asia Europe $3.0 revenues by region (billions)

North America North America

Latin America Latin America

Rest of the World Rest of the World

$3.0 $2.5 $2.5 $2.0 $2.0 $1.5 $1.5 $1.0 $1.0 $0.5 $0.5 0 Worldwide

US

0 Worldwide

US

Social Casino Gaming Report 2012  Ca s ua l G a m e s A s s o c i at i o n

Key Terminology ARPPU

Poker Games

Average Revenue Per Paying User.

Social casino sub-genre that offers the popular card game poker in its many variations (e.g. Poker by Zynga).

ARPU Average Revenue per User.

Real-Money Game

Casino Games

Social casino game that wagers actual currency and gives the player the possibility of cashing out, similar to online gambling.

Social casino sub-genre that recreates the casino experience, including many casino games in one (e.g. DoubleDown Casino).

Conversion Rate The number or percentage of users that have shifted from nonpaying to a paying status.

Daily Active Users (DAU) The number of unique users that have used an application at least once over the course of a day.

Monthly Active Users (MAU) The number of unique users that have used an application at least once over the course of a month.

Slots Games Social casino sub-genre using a direct translation of video slots adapted for social gaming platforms (e.g. Slotomania).

Social Casino Games Games that simulate a casino experience like poker, slots, table games, and bingo. These games take place on a social platform like Facebook or a mobile device.

Other Table Card Games A sub-genre of other table card games within social casino gaming, such as baccarat and blackjack (e.g. Blackjack Madness).

About the Casual Games Association When it comes to the health of your business, the more things that work together, the better. Which is why the Casual Games Association is a critical portion of the success of your company and the industry as a whole. It means that you and your team have access to cutting edge educational resources and are connected to thousands of other game industry professionals, members of the press and service providers around the globe.

Learn more at http://www.casualgamesassociation.org/

For press inquiries, please email jessica@casualgamesassociation.org Learn more about the games industry with the best speakers, networking, lectures and data to help you succeed in a crowded market at Casual Connect Europe: Feb 12-14, 2013 Casual Connect Asia: May 21-23, 2013 Casual Connect USA: July 30-Aug 1, 2013 Casual Connect Kyiv: October 2013