Industry News
How Does Generative AI Affect the Development of the iGaming Industry, and Why Is the Human Factor Still Important for These Technologies
![How Does Generative AI Affect the Development of the iGaming Industry, and Why Is the Human Factor Still Important for These Technologies](https://europeangaming.eu/portal/wp-content/uploads/2024/07/itai.webp)
AI can completely change how games are created and played catching up with increasing need for immersive gaming experiences. Itai Zak, Executive Director at Digicode iGaming division, believes that generative AI in iGaming holds boundless possibilities, offering transformative opportunities to enhance player experiences, drive innovation, and shape the future of the industry. In September 2024, Itai will take part at SBC Summit in Lisbon where AI`s impact on igaming will be discussed by industry as well.
How AI was introduced to iGaming
Recent years have seen tremendous changes in the iGaming sector due to technological breakthroughs such as AI. The industry aspires to adopt this technology to enhance the gaming experience and make it more vibrant and thrilling.
Businesses have numerous options to improve productivity and cut expenses by using AI technology. For example, AI chatbots for customer support decreased operating expenses by 30% in the iGaming sector. It is essential to embrace this technology evolution to remain competitive in the altering corporate world of today.
Exploring the impact of generative AI on iGaming development
Generative AI, with its capacity to simulate human-like creativity and generate content autonomously, has profoundly impacted the iGaming industry in several crucial ways. Here are the most significant impacts:
- Content generation and game development. With the ability to generate diverse and dynamic content, AI algorithms are reshaping the gaming landscape by providing developers with unprecedented creative freedom and efficiency.
- Personalized sports betting recommendations. Generative AI empowers iGaming platforms to deliver personalized sports betting recommendations tailored to each player’s preferences and interests.
- Enhanced fraud detection and security. By analyzing vast amounts of transactional data and player interactions, AI-powered fraud detection systems can identify suspicious patterns and behaviors in real time, thereby minimizing risks and safeguarding the integrity of online gambling operations.
In summary, AI has a significant and comprehensive influence on iGaming. To provide a safe and engaging gaming experience for all players, it is crucial to find a balance between innovation and responsible games.
How generative AI reshapes iGaming and why human involvement is still needed
The integration of AI in iGaming has become increasingly prevalent, offering operators and players alike the benefits ranging from enhanced personalization to improved security measures. However, alongside the technological advancements facilitated by AI, it is crucial to recognize the important significance of the human factor in the iGaming ecosystem.
Here are several reasons why the human factor remains indispensable in the utilization of AI in iGaming:
- Creativity and innovation. Human game developers possess the ability to conceptualize original ideas and craft immersive gaming experiences that resonate with players on a profound level.
- Player empathy and understanding. AI algorithms can analyze data to identify patterns and trends, but they lack the innate empathy and intuition of human operators who can empathize with players’ needs and desires on a deeper level.
- Ethical oversight and responsible gaming. Human oversight is extremely important in ensuring that AI algorithms are deployed responsibly and ethically, with safeguards to protect vulnerable players and mitigate potential harms associated with excessive gambling behavior.
While AI systems excel at processing structured data and performing predefined tasks, they may struggle to navigate complex scenarios or unforeseen contingencies that require human judgment and intuition. By combining the analytical prowess of AI with the adaptability of human operators, iGaming companies can achieve a synergistic balance that maximizes operational efficiency and responsiveness, driving sustainable growth and success in the dynamic iGaming landscape.
Ensuring ethical and responsible use of generative AI in iGaming
The integration of AI in the iGaming industry is marking a step in a new era of innovation, efficiency, and personalized experiences. However, along with its transformative potential, AI also presents a range of ethical challenges that warrant careful consideration and proactive mitigation strategies.
We can look into some of the key ethical challenges in the use of AI in iGaming:
- Responsible gaming and player protection. While AI algorithms can analyze vast amounts of player data to identify patterns indicative of problem gambling behavior, there is a risk of overreliance on AI-driven interventions without sufficient human oversight.
- Data privacy and security. AI algorithms rely on vast datasets to make informed decisions and deliver personalized experiences, raising questions about consent, transparency, and data protection practices.
- Algorithmic bias and fairness. AI algorithms are susceptible to bias, reflecting and perpetuating existing societal biases present in the data used for training and decision-making.
In conclusion, while AI technologies offer tremendous opportunities for innovation and advancement in the iGaming industry, they also present complex ethical challenges that require careful consideration and proactive mitigation strategies. By prioritizing responsible gaming practices, data privacy, security, and fairness, operators can harness the power of AI to deliver engaging, and ethical gaming experiences that prioritize player well-being and uphold ethical standards.
What is next for iGaming and generative AI?
The future of generative AI in iGaming holds immense promise and aims to keep revolutionizing the industry in unprecedented ways and reshape the gaming landscape as we know it.
As technological advancements continue to accelerate and AI capabilities evolve, we can anticipate several key trends and developments that will shape the future of iGaming:
- Hyper-personalized gaming experiences. Generative AI will enable iGaming operators to deliver hyper-personalized gaming experiences tailored to each player’s unique preferences, behaviors, and preferences.
- Procedural content generation. AI-powered content generation tools will streamline the game development process, allowing developers to generate endless variations of game content quickly and efficiently.
- AI-driven game design and balancing. AI algorithms will analyze player interactions, feedback, and gameplay telemetry data to fine-tune game parameters dynamically, ensuring optimal balance between challenge and reward.
By harnessing the power of generative AI, iGaming operators can unlock new levels of personalization and engagement, creating compelling gaming experiences that captivate players and propel the industry forward into a new era of gaming innovation and excitement.
About Digicode
Digicode is a leading global IT service provider with a worldwide presence and offices in the USA, UK, and EU countries. It specializes in delivering top-tier solutions in software development, cloud computing, artificial intelligence, big data, and automation across various industries, including iGaming, FinTech, healthcare, e-learning, and digital marketing. Working with top iGaming brands, operators, and suppliers, the company provides cutting-edge
technology, products, and solutions across all iGaming verticals—from game design and development to banking, cashier, and payment gateways, as well as comprehensive iGaming platforms and seamless integration with value-added providers. Trusted by clients in over 25 countries, Digicode is at the forefront of innovation and reliability in IT services.
Industry News
Playtika Reports Q2 2024 Financial Results
![](https://europeangaming.eu/portal/wp-content/uploads/2024/08/6-4.jpg)
Playtika Holding Corp. released financial results for its second quarter for the period ending June 30, 2024.
Financial Highlights
Revenue of $627.0 million decreased (3.7)% sequentially and (2.5)% year over year.
DTC platforms revenue of $173.7 million increased 1.3% sequentially and 5.1% year over year.
Net income of $86.6 million increased 63.4% sequentially and 14.4% year over year.
Credit Adjusted EBITDA of $191.0 million increased 2.9% sequentially and decreased (11.2)% year over year.
Cash, cash equivalents, and short-term investments totaled $1.1 billion as of June 30, 2024.
“We are focused on the resilience and potential of our leading games and our strategic initiatives aimed at revitalizing our portfolio. We are actively pursuing opportunities to broaden our game offerings through M&A. Our focus is on identifying studios that complement our existing games and drive long-term value,” said Robert Antokol, Chief Executive Officer.
“Our focus on our direct-to-consumer business and our highly disciplined approach to managing operating expenses has led to a notable improvement in our margins on a sequential basis. We are taking steps to ensure sustained growth and profitability and we remain committed to delivering long-term value to our players and shareholders, our focus on execution remains unwavering,” said Craig Abrahams, President and Chief Financial Officer.
Selected Operational Metrics and Business Highlights
Average Daily Paying Users of 298K decreased (3.6)% sequentially and (2.9)% year over year.
Average Payer Conversion of 3.7%, up from 3.5% in Q1 and 3.6% in Q2 2023.
Casual games revenue decreased (4.3)% sequentially and (1.7)% year over year.
Social casino-themed games revenue decreased (2.9)% sequentially and (3.4)% year over year.
Bingo Blitz revenue of $155.7 million decreased (1.2)% sequentially and (0.4)% year over year.
June’s Journey revenue of $74.6 million decreased (2.6)% sequentially and increased 1.9% year over year.
Slotomania revenue of $133.8 million decreased (1.2)% sequentially and (7.5)% year over year.
Playtika Announces Quarterly Dividend
Playtika’s Board of Directors declared a cash dividend of $0.10 per share of the outstanding common stock, payable on October 4, 2024 to stockholders of record as of the close of business on September 20, 2024. Future dividends are subject to market conditions and approval by the Board of Directors.
Financial Outlook
For the full year 2024 the company expects revenue to be toward the bottom end of the previously provided range of $2.52 – $2.62 billion, Credit Adjusted EBITDA to be in the middle of the previously provided range of $730 – $770 million and capital expenditures to be within a range $95 – $100 million.
Industry News
Navigating the iGaming Industry as a Start-Up
![Navigating the iGaming Industry as a Start-Up](https://europeangaming.eu/portal/wp-content/uploads/2024/08/Pierre-Mifsud-INT.jpg)
Pierre Mifsud, Chief Commercial Officer of the VentureMax Group, says the iGaming world presents plenty of opportunities for new companies bursting with rich ideas – so long as they can avoid its pitfalls.
The global online gambling industry has always attracted the brightest minds, creative talents and those with the strongest entrepreneurial spirit.
There is no end of success stories, from boutique studios being acquired for hundreds of millions to tier-one operators merging and consolidating to become undisputed international powerhouses. But where some businesses find success, others can and do fail.
This is because the online gambling industry is tough to navigate. It’s a minefield, and one wrong move can mean game over. You need more than just a great idea or smart product to make it to the top – and financial backing, no matter how much, will only get you so far.
Ultimately, start-ups must master all areas of business, from product quality and customer experience to regulation, differentiation, marketing and funding. And even then, success is not a given.
Let’s look at some of these key areas and see how start-ups can avoid the barriers they present.
Regulation, licensing and compliance
Vast swathes of the map turned from grey to white once the industry embraced regulation. This has opened up significant opportunities for organisations to explore, but it has also presented new challenges to overcome.
Operators, suppliers and other service providers must now secure licences and certifications to launch in regulated jurisdictions, with requirements differing from market to market – and this is easier said than done.
Most organisations have a dedicated department focused on securing the required approvals to enter markets, and then a compliance team to ensure requirements are being met at all times – the cost of non-compliance can be so high as to prove fatal for a start-up.
So think about having a specific team to handle all your regulatory needs, even if it’s just one person, because that’s how you’ll ensure your business can stick around for the long term.
Standing out from the crowd
Such are the opportunities available in this industry, it’s no surprise there are a lot of start-ups chasing after them. This means bringing something new to the table, as a means of standing out, is vital.
This can be something truly innovative – a never-seen-before game format, a fresh mechanic, a piece of technology that solves a problematic issue, or simply finding a better way of doing something already being done.
Technology is a great driver of innovation, and the start-ups that go on to achieve the most often have a proprietary platform, solution, mechanic, etc that takes the industry by storm.
Of course, this is not essential to success, and we have seen plenty of start-ups go on to do great things by improving what is already being done.
Either way, start-ups need to make an impact and won’t get far by copying those that have come before them, so embrace originality and look for a unique selling point that offers something fresh.
Engaging customers at scale:
Of the main challenges for any business – whether B2B or B2C – is engaging customers at scale. This requires a comprehensive marketing strategy that allows the business to engage customers in the right place at the right time via messaging that truly resonates.
With such high levels of competition, it’s important for businesses and brands to be authentic, and to have a clear voice through which they communicate with their audience.
This is why it’s so important for the business to have a well-defined identity and purpose as this is the only way to be heard above the noise made by rivals. It’s also crucial to identify the channels through which you can really connect with customers.
Digital marketing, when done right, is really cost-effective, highly trackable and easy to optimise in real-time so long as the right data is being gathered and analysed.
That’s why this type of marketing is an absolute must for B2B and B2C businesses.
Securing seed funding
The vast majority of start-ups find they need to secure funding to drive ahead with their plans. Organic growth is always possible, but it does take time, and this can mean the business misses a window of opportunity.
But finding the right investment partner can be easier said than done. Some investors are willing to front capital but don’t want to be overly involved in the day-to-day running of the business, while others can require more control and input than the founders want to relinquish.
Start-ups must also consider how they can make themselves attractive to the right investor. The VentureMax Group has an investment division and has clear criteria that businesses need before considering whether to get involved with them.
These include:
- Being early stage with significant growth potential
- Being a business that can disrupt
- Being a business with innovative technology
- Having a strong founding team
- Having scalable and defensible market opportunities
Our approach to investing is that it needs to be a true partnership.
Not only do we want to provide financial backing to the start-up, but we also want to share our extensive experience and help businesses successfully navigate this amazing industry.
So while there are plenty of challenges to overcome, the rewards are great for those who do manage to make their iGaming start-ups thrive.
Industry News
Maximising Game Success: The Advantages of Partnering with a Distribution Partner
![](https://europeangaming.eu/portal/wp-content/uploads/2024/08/Rokky-banner.png)
A video game will go through seven stages of development during its life cycle, including planning, pre-production, production, testing, pre-launch, launch and post-production. Once released, video games are competing for players’ attention and with so many games to choose from, it can be difficult to maintain interest. Working with a distribution partner during the latter stages of a game’s development life cycle instead of relying on a giant such as Steam will provide publishers with numerous strategic advantages and ensures their game remains relevant several months after its release.
Vadim Andreev, CEO and co-founder of Rokky, a global game distribution platform that connects publishers and stores worldwide, breaks down the first year of sales for a video game once it’s launched and discusses the benefits of working with a distribution partner such as Rokky.
How third party distribution platforms effectively compete against giants like Steam
On average, a game on pre-order sells approximately 1% of all sales for the entire year two months before release. This then increases to 4% of all sales for the year two-to-four weeks before release. The peak of pre-order sales starts a week before release and publishers can expect to sell 12% of all sales for a game’s first year during this period. During the pre-order period, Rokky makes an average of 16% of a game’s annual sales, highlighting the importance of making a game available to pre-order.
When looking at the release day, Rokky will make another 8% of all sales for the year. In comparison, VG Insights shows that, on average, 12% of all sales are activated on Steam during a game’s release, possibly because some sales flow into the first day after release due to VG Insights’ data recording features. Rokky then makes another 15% of all sales for the year in the first week after release, according to the company’s analysis. Concurrently, Steam accounts for 22% of all sales for the year in the first week.
Sales then gradually start to decline and in the first two-to-four weeks after release, they make up 7% to 4% per week for Rokky and 14% to 5% for Steam. During the pre-order period, release, and the first month of sales combined, Rokky sells 56% of a game’s copies for the entire year, while Steam sells approximately 61%.
In the remaining ten months of the year, almost half of all sales for the year are made, with Rokky making 43% and Steam 38%. At the same time, the trend line on the following graph shows that sales through the third party distribution platforms generally fade more slowly than through Steam.
Third party distribution platforms provide a more flexible and consumer-oriented approach
Working with a distribution partner like Rokky can provide a publisher with several strategic advantages as third party distribution platforms can expand market reach, adapt to changes in demand, minimise the risks associated with international sales, and much more:
- Market Restrictions: In some countries and regions, there are strict government restrictions on the sale of video games, making it difficult to sell directly through platforms like Steam. Distributors like Rokky who have experience in these markets can successfully overcome such barriers and provide access to new audiences.
- Less Flexible Pricing: Steam cannot always respond promptly to changes in demand for a game and offer timely discounts or special offers. Distributors, on the other hand, can adapt more quickly to market conditions and apply more flexible pricing strategies, helping to increase sales.
- Localization and Cultural Adaptation: Distributors working in specific regions better understand local cultural features and can offer adapted content, including game localization, marketing campaigns, and user support in the native language, which increases a game’s appeal to local players.
- Marketing Support: Distributors often provide additional marketing resources such as advertising, PR campaigns, and participation in local events and exhibitions. This can significantly increase a game’s visibility and attract more users than standard marketing efforts on Steam.
- Logistical Support: In the case of physical copies of games, distributors provide all the necessary logistical support, including production, warehousing, and delivery, relieving publishers of a significant portion of organisational tasks and allowing them to focus on content development.
- Legal and Financial Support: Working in international markets may require knowledge of local laws and financial requirements. Distributors with experience in various jurisdictions can provide legal and financial support, minimising risks and ensuring compliance with legal requirements.
- Broader Audience Reach: Distributors often have established connections and partnerships with local retail and online stores, allowing them to reach a wider audience and sell games through multiple channels, thereby increasing sales and brand recognition.
The benefits of working with a distribution partner is further evidenced by the fact that, in percentage terms, the share of sales through the distributor relative to total sales on Steam increases over time. The following graph shows the change in the percentage of sales through Rokky compared to total sales on Steam over the 12 months following the game’s release. However, it should be noted that the data presented in the graph represents aggregated values for the top-selling games in Rokky’s database. Individual cases indicate that the distribution of values for each game can vary significantly.
At the time of release, the percentage of sales through Rokky reached a peak of about 4%. During the first week after release, there is a sharp decline in the percentage of sales to just below 1%, which remains stable throughout the first month. When looking at the first month, the percentage of sales starts to gradually increase, reaching 0.78% at the end of the second month and 1.02% by the end of the third month.
From the third month, there is a noticeable fluctuation in the percentage of sales, with an overall upward trend, peaking in the sixth month. Usually, the first promotions for the game begin at this time. According to Geekyminded, it takes 70 days on average before a game’s first sale.
Starting from the sixth month, the percentage of sales shows even more significant growth, reaching new peaks in the ninth month at 2.87%. Sales rebound in the tenth month due to people taking advantage of significant discounts in previous periods. By the end of the twelfth month, the percentage of sales through Rokky stabilised at 1.55%.
Despite fluctuations in the percentage of sales, the overall trend indicates a growth in the share of sales through the distributor Rokky relative to total sales on the Steam platform during the first year after a game’s release. The growth in the share of sales through the distributor relative to total sales on the Steam platform is based on several factors:
- Price Competition: Stores through which the distributor sells a publisher’s games actively use their margins to compete on price. They can offer various discounts and promotions, making their offers more attractive to buyers compared to fixed prices on Steam.
- Promotions and Marketing Support: Distributors and their partner stores often run various promotions, sales, and special offers, drawing attention to products and stimulating sales growth.
- Localization and Adaptation to Regional Markets: Distributors can better adapt their offerings to the specific requirements and preferences of local markets, helping to increase sales in regions where Steam is not as popular or lacks sufficient marketing support.
- Variety of Payment Methods and Delivery Conditions: Distributor stores can offer more flexible and diverse payment methods, as well as more convenient delivery conditions, making purchases more accessible and convenient for various categories of consumers.
- Investing in Customer Service: Distributors often invest in improving the quality of customer service, providing better support, which helps retain customers and increase sales.
Thus, Rokky successfully competes with the Steam platform, increasing its share of sales in the overall structure through a more flexible and consumer-oriented approach. The demand for games through third party distribution platforms such as Rokky decreases much more slowly compared to Steam, thereby providing publishers with stable and long-term revenue. Stores, competing on price and offering various promotions, can maintain interest in a game several months after its release.
For more information on how to make the most of the digital distribution for your next game, visit https://rokky.io.
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