How SciPlay Wins in Social Casino, Post-IDFA

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After nearly 10 years of operation, thousands of studios trust Heroic Labs to help them focus on their games and not worry about game tech or scaling for success. To learn more and reach out, make sure to visit heroiclabs.com or check out the link in the show notes. Now, let's jump into the episode. Hello, and welcome to the Novic Gaming Podcast. I'm your host, Nico Vori.

Today we have a very special episode for you. We are delving into a category of gaming that is very near and dear to my heart, having worked in it for a long time, and that is and always has been a major driver of revenue for the industry. But it often gets overlooked and misunderstood by mainstream analysts and commentators. And that category is social casino.

The games that mimic land based casino games, but aren't encumbered by the regulations that govern actual games of chance, and as a result, are much more free to experiment with novel game mechanics and new design. Social Casino as a category generated almost eight billion in annual revenue last year and is still growing at a very healthy clip, around eight percent KG.

So to go deeper into the world of social casino, we have a great guest. It's another former colleague of mine from the Zinga Days, and that is Danny Moy. He's the chief strategy officer at SciPlay. Uh Sideplay, the social arm, was spun out as its own company in twenty nineteen, but then it was reacquired back in twenty twenty three and taken private again. Danny will tell us a little bit more about those dynamics as well.

I play generates somewhere in the region of seven hundred million by my industry search uh in annual revenue. It they've got a team of about eight hundred across six global studios, and they operate at least eleven games, mostly in the slots category. So, without further ado, today I'm very excited to welcome Danny Mori, the Chief Strategy Officer of SidePlay, to the show. Danny, welcome to the pod.

Thank you. Thank you, Nico, for having me on the podcast. I think we've talked about this for a while, but I'm finally glad we can uh get together this morning. Exactly. Well, I'm so glad that we made this happen. It's been a while in the making, but uh yeah, this is gonna be a a great episode. And like I said, I'm I'm extremely close to the social casino.

The company I co-founded after Zynga, where I was on poker, uh which of course is a casino game, was all in the slots category. So this is a category I know and love dearly, and I'm really excited that we finally get to make it an episode and go deep with one of the industry giants side play and of course uh Danny who's been in the weeds for for a good long time. So Danny

I always like to start with the background of our guests. So tell us a little bit more about who you are, your journey through the games industry. Obviously, we worked together at Zynga, but since then you've worked at some very major names in very senior roles over the years. So you've been around and seen a lot. So tell us a bit more about yourself.

Definitely. I think I've had an interesting journey in games. So I was born and raised in New York City. I actually started my professional career in investment banking and private equity after college. I went to NYU for college. So if there are any uh alumni listening here or watching this podcast, you know, definitely give a give a shout out or reach out.

After a few years in financial services and being in New York City my whole life, I was open to a change of scenery. I moved to the Bay Area to work in tech at Yahoo and was there for almost six years. Then a former colleague from Yahoo, who was at Zynga at the time, contacted me to come meet some folks at Zinger. I joined Zynga in twenty nineteen and that was the start of my journey in games.

This is where you and I first met and worked together and we were at the birth of free to play and social games on Facebook and then the start of mobile games. After Zynga, I joined King, and that was another wild ride with launching Candy Crush and other titles on the emerging mobile platform at the We took King Public in the equity markets and then got acquired by Activision Blizzard.

Then we educated and supported different Activision and Blizzard franchises on how to develop and operate on mobile. So you see some of them coming to to life now over the last two, three years. After Activision Blizzard King, I moved to Play Studios, which was my first true hands-on experience in social casino. And then four years ago I joined SidePlay as chief strategy officer and have been expanding my experience and knowledge of the social casino space.

Nice. Yeah, I think uh so you you said twenty nineteen at Zynga. I think that's you probably meant two thousand and nine, uh which is Oh sorry, yeah, two yeah, that's right. No, that's wanted to make sure we get

We get the we get the the facts on the on the record here. So yeah, so so two thousand one ago. But a lot of that experience is uh still feels still free still feels fresh, right? So feels feels fresh. Yeah. We did call we didn't call them, you know, dog ears for nothing. Uh you know, like the Every year at Zinga was like seven years in the real world. Uh was uh definitely a trial by fire and and an amazing experience. Okay.

A great experience obviously in the industry. Tell us more about side play. So uh those of us who uh you know have followed Social Casino or have worked in Social Casino, we obviously know side play extremely well. It's one of the biggest players, you know, by both by revenue and also by reputation and by by impact.

But for our listeners and uh viewers who are not following this category as closely, who is who is SciPlay? Where do you come from as a company and uh what have you been doing in in the industry? Yeah, so SyPlay is an industry-leading developer, publisher, and operator of free-to-play, social casino, and casual games. Our current games portfolio is heavily skewed on the social casino side, specifically towards slot games and apps.

While SidePlay originally started out making C D ROM games twenty five years ago. We've adapted to the different platform shifts over the last three decades, from PC gaming to console to Facebook and web, and of course to mobile now. And for the most part, SciFlay has been making social casino games this whole time. But we have a lot of people here that are super passionate about slots and video games and you know uh and you know doing a creative job and bringing these two together to life.

Yeah, so I I think what's interesting about SidePlay in my opinion is that uh you know, you've you've been around and you've been part of this much larger organization. It's it's quite rare in my opinion to have kind of a a a legacy uh I I don't mean this in a in a derogatory manner at all, but like a legacy developer of of real money um games or or really any you know particular category of legacy product.

be as able to be successful as as SidePlay has been. I you know, you've obviously grown both I think organically, but also through acquisition. I know a lot of your leadership team is from Phantomy Effect. which of course was one of the early players in the uh social casino space, especially in slots.

So tell us a bit more about how SciPlay has come to be as a an organization. Where do you draw your talent from? And how have you grown both organically and through acquisition to where you are today, which is, you know, as I mentioned in the intro, 800 employees.

six studios, eleven titles. You know, that's a lot going on. Yeah. So it's a good question. So even though you haven't been in the social casino space in a while, it sounds sounds like you, you know, you still follow a bit and and are up to date on what's going on. So I'll I'll walk about I'll talk about like the side play and the journey. Like side play, I mean the origins is like Phantom uh EFX uh of what you mentioned and For the most part, we have grown organically. We've probably made

a couple of small tuck-in like acquisitions, but everything that we have, most of our products, are actually homegrown and they were actually not acquired. But I'll I'll walk you through the history of like a SidePlay. Like for several years a SidePlay was a publicly traded company

But was majority owned by the company now is called Light and Wonder. It was formerly known as Scientific Games. And then it was uh they divested of several businesses and then they renamed the uh the company to Light and Wonder.

So as I mentioned, it was a publicly traded comp we were a publicly traded company, but it was majority owned by Light and Wonder. And then SidePlay was fully acquired last year by Light and Wonder and they are So for those who are unfamiliar with Light and Wonder, it's one of the largest global cross-platform gaming companies in the world. For this audience, gaming at Light and Wonder is largely the regulated real money gaming space.

at Line Wonder, we are comprised of three business units. First is the gaming business unit that they and they are one of the top players that makes the slot machines that are in the real world casinos. Then there is the iGaming Business Unit that is producing both the slot games and the technology for online gambling where it's legal around the world. And now Light and Wonder has us, Sideplay, as the third business unit, and we are the social casino arm, as you mentioned.

It's a very synergistic collaboration we have with all the Light and W business units. In fact, approximately 80% of our slots inside our social casino games are ported from the Light and Wonder gaming land business. So players that experience the slot game in the real casinos can also play that same slot game in a free non-gambling environment inside our social casino.

This is one of our competitive advantages. Competitive advantages, you know, having popular real world gaming content inside our social casino games. Yeah. I when when I was working in Social Casino, you know, twenty thirteen is when we founded Rocket Games and uh we sold it in twenty sixteen.

relatively early, but not as early as like Platica or, you know, Phantom E FX back in back in the day, you know, 2010 basically as as early as the the the app stores were around, you know, the casino games uh arrived. Uh The biggest driver

back in those days, and I sounds like still to this day, was real life casino players. who have their favorite machines, who know the brands, who know the machines, who know the odds who know the return to player, you know, calculations. They either like the highly volatile ones, the classic style sloth games, like that was our thing at Rocket Games, that was our specialty. Or they like the more casual video slots games that have, you know, a higher return to player but but less volatility.

Is that still true to this day in terms of who the audience is? Who are you catering to primarily uh as a player base? Not necessarily the the machines and the kind of strategic abandonment, but who's your player base? Is it still to this day

The real-life players in the casinos, or is it more has it evolved over time into a more casual audience who has perhaps never been to a casino or or doesn't even know that these are real life machines, but are attracted to them in the free to play environment on on mobile or yeah. I would say social casino players run the gamut from real life casino fans to to casual gamers now.

Uh, but I have seen studies and surveys that show sixty percent of social casino players have also played in a real life casino over the last year. W with social casino, these players get to play and enjoy real life casino content at home or on the go right on their phone. So as I said earlier, that's one of the key advantages for side play. Like our players, like when we talk to them all the we talk to them regularly.

And, you know, they always mention like, oh wow, I saw this like uh slot machine that was made by Light and Wonder in the casino. And now that you guys have it here and I can just enjoy that same experience. I could get the look, the feel, the sound. And even if it's the the math or the volatility that's behind the slot machine, you know, that's what they enjoy. And

They want to be able to play it wherever they they they can. So our play f our players have an affinity for their favorite slot in the real world casino and they can, you know, further develop it by playing those same slot games and outside play games. They know they can't win real money, but they can still enjoy that again, that similar feeling of playing a slot machine inside it.

But I would say the the dating that where it's evolved these days is Because we have so much integrated meta and live ops feature features in our games today, we also attract the casual player that's looking for a quick and bite-sized experience where they can feel like they are winning. uh or progressing on a meta feature to chase an even larger virtual jackpot or or prize.

When we talk to some of these players, they don't necessarily identify themselves as real life casino players. They enjoy, you know, outside play games for the quests, the task, the collection sets that they can gather and complete and and that sense of winning.

Yeah, this is what Slotomania did so well back in the day. I mean, you know, everybody in the early days of Social Casino was looking at Slotomania. They had I mean, if you look at it even actually I haven't opened the app for a while, I'll be honest with you. But but certainly when I was last looked at Slotomania, by today's standards you'd look at it and you'd say, Mm, you know, like that's not I mean and

No no knock on them. Like they the game launched in like 2010, right? So like you know, we're talking a long time ago. And you look at it today and you're like, oh, it's not quite up to the, you know, the level that we'd expect. But but what they did so well was the live ops piece and they did the the meta progression piece. So so so well.

So people who have been playing Slotomania, a lot of them have been playing since the very early days. And you know, you know, that loss aversion of not wanting to lose that unbelievable collection and like all the different, you know, features that you've called you know, you've gained over time, earned over time.

one over time, you don't want to lose those, right? And so I think that's that's a big driver in these games. And that's actually something you can't really do in a real life casino. So I'm curious to hear how You guys think about that live ops? I know you alluded to it just now, but like, how are you guys thinking about the live ops? Because I think some of your games. Actually let's talk about that now. Let's talk about some of the so what is your oldest game right now? And talk us.

a little bit about how that game has evolved over time. Is it continuing to grow? Is it the same player base? Are you attracting new players? Very curious to hear because some of these games, like I said, with Platica like Slotomania has been around since two thousand ten. So we're talking, you know, Fourteen years. F fifteen yeah's that?

Am I doing my math right? Yes, I am. I was gonna say twenty five years, but it's no, it's not quite twenty five years yet. No, fourteen, fourteen, fourteen, fifteen years. Yeah. That's a really long time and and they're continuing to go from strength to strength. So curious to hear how your guys' portfolio looks. at the moment and what your oldest games are doing. We'll talk about newer games in a second, but I want to talk about the old games first and see how they're holding up.

Yeah. So our our oldest games and are really our largest are really our largest and most established like franchises, uh which are Jackpot Party Casino, Quick Hit Slots and and Goldfish Casino. A large majority of those names so well. Sorry, sorry to interrupt, but like I know those names so well. Like those were around back in the when we were doing Iraqi games, we looked at those games for inspiration and I'm glad to hear that they're there's still

Still going strong. So but sorry to interrupt. That's exactly the point. Like some of these titles are well over twenty years old just on mobile and even longer on Facebook. So as you you know, as you've alluded to, you've seen social casino is is very evergreen and can be very sticky. So we have player cohorts that have been with us from the launch of the game. So these are you know, remember the game launched well over a decade, right? And we still had the

Though those same players still playing. And in fact, each year they're playing, you know, if not the same, a little bit more. And also the lifetime value that we're driving them continues to increase. And what I always find fascinating is that all of our social casinos started out as that real life casino brand that players loved. And we have evolved that single title experience to a full social casino and casual game experience.

So what I mean is so if you think about it, like social casino back in the early days was just about was just about the the core slot machine, right? It was just about, you know, playing and spinning slot machines and trying to win and build your virtual chip ballot.

But over the last decade in the social casino games and especially in in the side play games we have evolved that to, you know, what we see in in other, I would say, free-to-play social games in general, where all this meta in live ops is now built around the core loop and these in-game economies are derived and need constant balancing. So so what this means is a player is still spinning the slot machines.

But in doing so, they are trying to progress or complete in a leaderboard, a tournament, a collection set, a time limited task, maybe a community like social competitive event. So so social casino games are are now much more than the original core loop of like slots. Like we've built a bunch of like game loops on top of game loops and top of game loops.

But all of it is, you know, still driven by the the core, you know, slot uh spinning experience. Yeah. And I i i i if we'd look at the industry more broadly, like that The casino mechanic, even though I think a lot of industry observers look at casino games and always have looked at casino games, I alluded to this in my intro and kind of

you know, they're kind of a little bit snobbish even about it, which is like, well, why would anybody want to play those games? But it's like, it's entertainment, just like anything else. Like, why would anybody want to watch Bravo shows, you know, reality shows? Like, well, they're uh, you know, a lot of people's dirty little secret, you know, they they really like that stuff, right?

And I think what's interesting is that a lot of those features that that make casino games, social casino, or you know, real life casino games, you just call it casino games, make them so sticky, they're making their way into a lot of other products. And I think no

better story and no more relevant story than Monopoly Go right now, which of course is at its core a slot machine, right? Like that is actually a slot machine. If you look at that game, that is nothing more than Coinmaster, CoinDozer game, like

elevated through IP and a lot of razzle bazzle, a lot of wonderful um animations, the sounds, like those are so important in real life casinos. You go there, like everything is sounds around you, right? Like that auditory experience is incredibly powerful. So let's talk about Monopoly Go, because that is to me like an unbelievable success story of what is a casino game, right? Like it's hidden quite well to the casual observer.

But it is actually a a casino game. So talk to a little bit more about what those trends are that you're seeing of casino mechanics, casino games essentially making their way into the mainstream. and becoming much more accessible to a much larger group of people who would never consider themselves actually a slots player or a casino goer, but they will absolutely play Monopoly Go because it's fun, it's really good, it's really engaging.

Yeah, so though you know, I personally don't think uh a Monopoly Go as a traditional social casino game like what you and I talked about in like trying to simulate that casino experience. But with that said, it it does leverage social casino mechanics to engage and and and monetize their players, obviously. You know, for example, the the core dice rolling, right, is supposed to be a chance based outcome in and no skin uh sorry, no skill, similar to, you know, a slot machine.

And they do a good job playing on the I would call it that the high risk, high rewards uh player psychology, right? Uh, especially with the multipliers. So, you know, if you're using the multipliers in Monopoly Go, you know, it gives it's supposed to give the player the anticipation of winning or earning a big jackpot, like when you use bet multipliers in social casino.

Well Monopoly Go is is definitely a good game, you know, especially if you want that Monopoly like board game feeling, going through the ups and downs of, you know, building property and collecting rent. But I don't think of it as a traditional social cino game.

But yes, it does utilize different social casino mechanics and psychology. And in those mechanics, like you know, like what you just mentioned, you know, it's not just in Monopoly Go. Like it's starting to it has been, right? In other like social games too, like where it's trying to get you to it's not wagering, you know, money or or virtual currency. A lot of time it's like, okay, I'm gonna, you know, wager my my characters in a RPG game. I'm gonna wager my lives.

Or I'm gonna wager my boosters and it's trying to, you know, get a player to be more engaged and saying, Okay, if I wager more of this or I play more of this, I have a potential, you know, bigger bigger loot, you know, that I can find or bigger, you know, dungeon raid that I can go and try to uh tackle and find. Yeah, I I mean I obviously agree with you that it's not a air quotes traditional social casino game or casino game more broadly, but

But I'm gonna push back a little bit on on what you just said there, which is I I really do I mean, it is essentially Coinmaster, which again, Coinmaster is also not a traditional social casino game. It's an evolution of chance based. um gameplay but uh has been able to attract You know, what are essentially games of chance mechanics, slot game?

mechanics, multiplier mechanics, like you said there, a broader audience that wouldn't consider themselves a slots player and wouldn't actually even play a slots game, probably wouldn't enjoy a slots game, but will enjoy something like a Coinmaster or or a or a Monopoly Go. Um it From your perspective at SciPlay and putting aside the like obviously you guys operate a portfolio mostly.

classic air quotes classic slots games because you have the IP, you have the actual real life machines. But putting that aside for one second, Is that a broader trend you're seeing? Is that something you guys are tapping into as well? Expanding beyond your traditional slots games and the slots IP. into more casual, more hybrid type games of chance gameplay, such as a Coinmaster or Monopoly Go now, of course, with with the IP that they've been able to layer on top of that mechanic.

Yeah, it's something that we always uh keep an eye on, but You know, one of our biggest strategies and focuses to really, you know, focus on the existing games because what we find is the existing game and social casino is so evergreen. And also the data is also telling us that there's still a lot of headroom for for growth. So

You know, we're doing everything that we can to continue to innovate in the existing games. So we're constantly releasing new content. Every couple of weeks we're offering like new slot machines to the players. And we're also innovating constantly on the live ops and the meta features that we put into our games every month or every quarter or so and trying to integrate that with the live ops. So

So I think right now right now like the big focus is still on on on the slot portfolio and and continuing to grow that because, you know, we've been able to show that hey, we can continue to grow this, you know, double digits uh every year. So let's

And we're in and we're a very player focused company. So that's what we talk about a lot inside the this company. So Don't forget about servicing these players that you've had that been with you for so long. And also go and try to reactivate some of the prior highly engaged players and and really focus on on growing that. At the same time, you know, we're still trying to find like new players, but Yeah, we don't focus like on the old strategy which wa in social casino which was

Okay, try to bring in the player, monetize them, you know, as um, you know, user acquisition is different these days, right? As you know. So that strategy is is is not gonna work and you know, you're probably not gonna be able to drive long term profitability over time. So so our strategy is really like focusing on the existing games, continues to try to grow that.

But, you know, you know, keep moderating and see where, you know, these emerging, I would call it, you know, like you said, chance based. simple core loops are coming on and seeing, hey, can we apply the the engine that we have, like that product and knowledge and engine that we have in terms of meta and live ops on top of that, what we think is a simple chance-based core loop. And you know, see if we can develop a new game out of that.

Yeah. Yeah, that's so that's uh that's actually interesting what you say there. It makes sense. Obviously, you your background as a company is is in the real money world. And if you're continuing to grow at double digits, then why not? Why why not focus on your existing player base? And of course, it's shows respect for your your existing players, you know, people who've been playing in the casinos on a certain machine f you know, for decades who want to continue to play on

on mobile, yes, obviously you should make sure that that player has a has a satisfactory and enjoyable journey and continues to to engage. Which brings me to another question which Some social casino companies. A lot of social casinos start. Let's start with this. A lot of social casinos startups. that were n had nothing to do with real money gaming, right? Didn't come from land-based casinos, didn't have the IP, didn't license the IP, you know.

like like us, rocket games, like we would make games that were close to real life games, but not so close that they were actually infringing on the IP. Um and that was kind of air quotes good enough back in those days, right? And then a lot of those companies were acquired.

by either Platica, that, you know, obviously didn't come from that world, but but decided that they were gonna make that their thing, and they did very well out of that, or by real money gaming operators, which were either Casino adjacent or they were uh They o they were the owners of the IP, the actual slot machines themselves, and they were acquiring, you know, nimble mobile talent who were able to move fast and operate in this new world of the app stores.

And then they basically layered their IP with the team and did very well out of that. And I think a lot of that has h happened by now. This is would be very difficult, I think, today to launch a social casino slots based. A startup from scratch, um, I think it would be virtually impossible. I would not even think about trying to do so myself now. So long intro here, but I think the question I'm getting at here is how much are you leveraging your real money slash land based operations?

in terms of trying to do cross-pollination, right? Like are you promoting the free-to-play products in casinos or adjacent to your actual real life IP, wherever that might appear? That's really what I'm getting at here is like how much are you doing of that cross pollination? You said you've got a lot of synergies across the three different groups that you operate.

How much of this is that being leveraged in both directions, I think, is what I'm thinking about here, is like from the real money to the free to play and then vice versa from the free to play to the real money. Yeah. So we're starting to lean into that a lot more. So I already gave you the example of where Okay. The real life casino content, you know, from Light and Wonder, we get to have that in side play, right? So that's a that's a competitive advantage that we have already.

Which is huge. I was so jealous of anybody back in those days when we were doing rocket games who could actually use real life content. We were like, oh my God, that is so much better. Like that is that's the real deal. That's the real thing. Right. Um, so that is huge. Like people who don't understand this this space. We don't you know who people who are in gaming but don't necessarily understand social casino like

The power of IP, you know, we talk about IP in gaming all the time, whether it's like Game of Thrones or Harry Potter or whatever. Like it is powerful. But in K Casino, it's almost even more powerful because the players who know quick hit slots. They love quick hit slots. They absolutely gravitate towards that IP and

It is unbelievably powerful as a motivator and as a driver. When you see that and you hear the sounds that you associate with that game, boom, it's like it works. It works really, really well. Yeah. So the second thing that we're trying to like um going back to your question, like call it cross pollinate. It kinda reminds me like the days when we were at Zinger trying to do all this like uh you know, cross

what we call a c cross promotion, right? Whenever we like launched a new game. Um, so here's like another kind of light example of it. So In in the in the real casino floor, you can play quick hit slots, like you said.

Now today we have sort of like a uh a side quest that's with it now, saying, Okay, if you go and achieve or do X amount of spins in the real life casino And if you go and go play the the so the same game, the same IP, call it like Huff and Puff, is w uh, which is one of our popular like slot machines in the in the social casino side of quick hit, if you complete that task

then as a player you can earn like a raffle, you know, for for like a new car or for some other like big prize. So We're starting to explore more of those like real life and kind of digital, like free to play like integration. Another example of how where it's the other way around where social is, you know,'cause we talk a lot about how like real life c casino, real life IP is helping us on the social side, right? But now

We also have a partnership where we're helping the real life casino or the real life uh gaming business that's developing the content. And how we're helping them is that we're leveraging the we'll we'll test things in in in our social casino apps first. So we'll we'll do like designs of like new slots. new slot machines and potentially new maths.

And we'll test it on our players if we Because, you know, as you know on mobile, we can test a lot quicker, get the data a lot quicker and and and iterate to find out what potentially will stick. And then we'll inform the gaming side and saying like, Hey, we think this type of design is actually, you know, has a high probability of success. So you may want to go and

and try to design, you know, this type of uh slot machine with either this type of theme, you know, with this type of art, maybe with this type of math and volatility or this type of like animation or sound. Because as you know, on the real on the real gaming side, on the land based side, They can't really do A B testing, right? They gotta they have this kind of like the console world, right? They're gonna design the game, put it out there.

And hopefully it it sells, but you know, after you put it out there, you can't really go and A B test anymore. Especially in a re regulated arcade. Yeah. I mean, I I was gonna say on the on the land based side, it's even harder than on console. I mean, on console at least you can kind of mess around a little bit on the back end and you know, you might be able to do a patch, right? Or maybe okay. Right, exactly. But but yeah, once you put a

Exactly. Once you put the machine out there and it's regulated, like you can't make any changes to it. So which is I mean that that that was what It's a both a blessing and a curse, I think, because

Everybody is is impacted the same way. Right. And so if you're you know you're competing essentially in a level playing field um with all the other operators and and uh you know mathematicians designing the machines and the volatility, but at the same time, as a free to play designer and a mobile app developer, it's To me it it was you know, it would be frustrating, I think, not being able to do some A B tests or or try to

you know, tweak things on the back end to to make them more effective. So okay, so understood. So that's interesting. So you've got kind of a you do have a two-way streak going on here where both sides, you know, you benefit on the free to play side from the IP, of course, which

I've now been we've both mentioned it multiple times now it is incredibly powerful, is a huge motivator for players in in the casino world. And then on the free-to-play side, you're offering essentially kind of a almost like an A B testing factory, if you will, where you can kind of give the the

the real money side, some insights into what might work. So that's interesting. Okay. All right. Well let's so you talked about math. And math is one of the biggest things, most important things. I mean, math is important in all game design. Different games, of course, you know, different level of importance depending on what kind of genre you're in. But math is is obviously very important for unbelievably important for for slots and and casino games.

It's all about the odds. It's all about that experience of, you know, feeling the near misses and the, you know, the big wins, right? So one of the things that I think is really interesting, and I haven't seen much talk about this in the industry. And I'm curious to hear your thoughts.

AI, right? Like AI is everywhere. AI, to me, if at least having worked in casino and having had to balance slot machines and try to figure out what the what makes a fun slot machine, what makes the math work, right? I think AI. has the potential to to be a massive, massive accelerant in terms of

being able to do some of these iterations. How are you guys thinking about AI? What are you doing on the AI front? And what do you think the industry is going to be uh doing regarding AI as they incorporate

I mean they have to, right? Like I think the bigger, you know, if you're not using AI in your your designs, in your in your iterations, like you're gonna be left behind, right? So that's what I'm curious to hear. How are you guys thinking about it and how do you think the industry is thinking about it more broadly?

Yeah, so that's a great question. It's a it's a big question that we we have um that we discuss a lot here internally too. So yes, AI is becoming more and more important in in in gaming in general, I would say, and the social casino category is is no exception. We are certainly using AI in our business. With respect to using AI to generate pay tables and math models or more broadly to just to build the math behind the slots.

I I wouldn't I would say we're not completely there yet. Slot math is very complicated and then in social casino you have to account for the fact that while slots are a core gameplay loop and you know and that has a model and math in itself now because of the evolution of social casino, there's a lot of other mad going on behind the scenes to integrate the features, the meta and the live ops events into the player experience and the overall economy. So

This is the one thing that I discovered. Like every game, you know, obviously has its own economy and sub economy, but I find that in social casino, it's it it can get, you know, pretty like complex, especially as you have a lot of player cohorts that are just, you know, with you for so long.

And you have to now do a lot of segmentation and each segment, you know, has a different behavior and different response and different economy behind it. So So, you know, AI definitely, you know, we're starting to look at it to to help us like kind of get a head start, but you still You still you you still need that human, right? To make sure that the slots gameplay has to be fun and engaging, right? Because when you talk to the players, this is why they come and play.

Hey, I get that I got that fun and that experience. I don't think a machine today yet can necessarily help, you know help decipher that or help you determine sort of that fun factor and all that like volatility. But the Mac you know, you know, there there are models out there that we're starting to see that could potentially help you get a a head start, but it's definitely still a balancing act. You know, I would say that requires a human today.

I think it's possible that it will get there at some point, but today at least this is an area that, you know, while it's on our radar, like, you know, we haven't completely like um tackled yet. But we definitely have used AI in like other areas that I can go into if you want on the art side, the development side and QA. Yeah, we can talk about it in a second, but I I I I'm I'm just I'm super curious because I if if I were to s to do a startup in the social casino space starting today.

That's where I would start, right? Like whether it works or not, I don't know. But I would start with with the AI piece and be like, okay, could I give Chat GBT or whatever, Gemini, Claude, Could I give them the designs? Because you can. The pay tables are out there. Like everybody knows what the pay table now it can't do the audio, it can't do the the like

All of that has to work together, right? And that's that's what makes slots so interesting. It's like it's it's as auditory as it is visual as it is the math, right? And all of those things have to work in harmony. But Nonetheless, you could feed all the pay tables of all the top machines in a certain category if you wanted to go, let's say, classic slots, which is what what we did, which is the kind of old, you know, one armed bandit type type style of gameplay.

You could feed all the top games into that and ask it to generate a new pay table that is different. and taps into a different motivator than those. And that's where I would start. So I'm just I'm just cu super curious. So I'm gonna peel this onion, you know, one more layer. Like in terms of trying something like that, like have you guys tried anything in in that vein? It sounds like you're you're aware, obviously, and you're playing around with AI in different

areas and we can talk about those areas in a second, but I really want to dig into this just a little bit deeper because the math side of things, it's something that just I have to believe that AI is going to be Better. at least at the initials phase. And then of course you plug in the human and you make sure that it works in the real world. But but gosh, to me it feels like such a powerful opportunity for a game that is so math based. Like

I agree. There definitely should be opportunities to help you get that head start and then see what the what the output is is with AI. But I just don't know if the AI can you know, it could it it could reproduce like some type of math model, but what you don't know potentially is is that math model

you know, going to necessarily work, right? Is it gonna be that feel that the player is gonna get? I don't think it has gotten there yet. It can't help it can't help you truly decipher that or or create that yet. That's where you need the human.

Um yeah, but but you could I mean again, pushing back on this a little bit, like you could do a thousand math models very, very quickly using AI, and then you could put them into kind of an existing machine, existing art style that you know is like, you know, close enough to this, and you could essentially prototype the hell out of out of the math models until you land on one that works because

The way it at least used to work back when we were working on these is a human would have to do the math model from scratch and it would take a long time. Like you would actually have to sit there and like you would have to tweak all the numbers and it would be ginormous spreadsheets and it would be What did you guys start back then? Would you like go and watch other machines or the videos? Yeah. Go online. Yeah.

We would literally yeah, y that's exactly what we did. Yeah. We would literally go, we would look at YouTube videos of machines. We would go to casinos and like we would actually look at machines and like see how they're playing. the pay tables are all public because it's a regulated business, like that that was one of the benefits as a free to play

developer, like you could look at the pay tables and you could be like, okay, we can reverse engineer essentially what's going on, which is what all the industry does anyway. Like you guys all look at each other's pay tables to understand what's going on and why something's working and why something's not. And then what we would do is we would build big ass spreadsheets.

where we would essentially put the numbers in and the variables and you know, Microsoft Excel, like this is actually, I think, pre-Google Sheets even. So yeah, we were doing everything in Excel. And we would have these monster models with macros and all kinds of like

you know, functions going on that would essentially spit out what we would then need to program and code into the product itself. That was very time consuming. And that's why I'm like harping on this AI piece, because if you could fast forward that process, you could have a thousand models in the time it takes you to do, you know, like before your morning coffee. No, I I totally agree. I think it's similar to what we see like on the art side. Like with that, you should be able to

I d I don't want to buy a percentage, but uh call it at least halfway, right? You can at least get halfway, maybe seventy five percent of the weight there. So that, you know, now you can free up time to do to do other things. That's what we see like on the art side, you know, on on the development side and even on the QA side. It's like, okay. You know, you sh with AI you should be able to get, you know, hopefully a a r a very strong head start.

And then now with the human, you know, go and apply, you know, your sort of like review, your polish, your finish, and then, you know, get it to the the finish line. So You know, we have accelerated, you know, how we we we try to continue to accelerate, you know, how we develop slots. We were already on a good cadence where we're able to like

launch something every every couple of weeks. I think we're always looking for ways and it it'll probably be with AI to help us even accelerate that time cycle. Yeah, yeah. Okay. All right. Well, m moving on from AI. So you just mentioned new products and I actually did want to talk about that anyway. You have eleven uh b based on the information that I have, you have eleven products live in in market.

You have an eight hundred person team. That's a lot of great resources, doing somewhere around seven hundred million plus, I think the latest numbers in terms of annual revenue. Big numbers. How are you thinking about new product development versus maintaining and and supporting the live ops for the existing products? What let's start with this. When was the last

product that you launched and what are you doing right now? Do you have lots of prototypes, you know, that you're working on and you kill the ones that don't look promising and you put resources into the ones that are? uh how often do you want to be launching new products? Do you have a cadence that you you're looking towards? Um very curious to hear how you're balancing the older products like quick hit slots, which like I said, was around way back when we were doing Rocket Games.

with like new products that could potentially be game changers for the future. Yeah. Okay. So there's a lot to unpack there. I like to do that. Yeah. So let me say so I think was So we haven't really we haven't I th I'm trying to think back when was the last The last time we launched and started scaling a new title, it's been it's probably been more than five years ago, to be honest.

Again, it it just goes back to our strategies to continue growing the existing titles every year because again, when we look at the data, there's just still a lot of runway like ahead of us, like in terms of number of players that, you know, haven't touched our games yet or players that did touch it and for some reason they have churned. So, you know, we spend a lot of time trying to reactivate those players because we find that, hey, the L T V on a prior

you know, highly engaged player is you know, is gonna be a lot higher than trying to chase that new player. And then the data's also showing like, hey, Wow, these people have really high engagement, but you know, they still haven't potentially monetized yet, right? So and there's still room for them to convert them into payers.

And and then the data showed, hey, even if we do convert them into payers, this is, you know, how much they're potentially spending on a on a monthly or yearly basis. And again, we know that the way, you know, we the way we run our games We're not out there to necessarily squeeze as much out of the players as soon as possible. Like we literally just like try to focus and getting them to play every day and play more um each every day.

And kind of indirectly that will lead to like more opportunities to Right. So we're really like focus on that. So it's just And so as a result, we we're constantly focusing on adding new content to our games and innovating on the live ops that we run in a game. So it's all as you know, it's all about servicing that players and motivating them to come play every day.

But so with that said, you know, we are we have been experimenting with with some new games, like new games that are either in the social casino category, the traditional social c casino category that you and I have been talking about. or casual games that have a very simple core loop that is very analogous, right, to social casino or like this kind of chance based core m mechanic.

And then saying, okay, we have all this like meta and live ops knowledge about how to, you know, incorporate that, you know, around around the core loop. Again, let's make some m make some like discipline bets, right? To see where we can find some heat and go and design and launch a new game. We have a couple of games out there in in in testing.

Like most developers, the first thing we test for is like engagement and retention. So, you know, we're constantly testing for that and we're sit we're see uh seeing some good heat on that. We want to make sure that's scalable. If it's scalable, then we start, you know, working on the monetization side. of the game and if we can if we can get that monetization, it's still bounds for this high engagement and retention that we see.

it's gonna lead to this um high L T V right that is required to cover the cost of user acquisition that it that is just continues to increase every year. So I would say some it all. Like a lot of it's just really focusing on the core games to continue to basically grow that.

but making some I would call it like discipline like bets on on some of the new games and and they're and they'll go do like the traditional kind of what I call like new new game green light, you know, phases that we all that we're all familiar with in the space. Yeah, yeah. Okay. And how do how do you think about staffing these these new new bets that you're taking? Uh and and I would love to learn a bit more about it. So sounds like if if I'm reading between the lines here and

You know, if you're able to tell me that that would be great. That they may not actually be kind of core slots slash casino. They might be something a bit more adjacent, something more on the casual gaming side, which of course

has always been the case. Like there there is overlap between casual gamers who want just that kind of dopamine hit of just, you know, Candy Crush or Match Threes or whatever, which lots of things happen. I mean, there is similar to to slot machines, but obviously not the same thing. There's always been a lot of overlap between the category of social casino and that type of casual match three razzle dazzle things happening on the screen type of type of gameplay. So are you

Are you saying that that's that's the direction you're you're heading in or that's where your bets are? Or is it more, hey, we're gonna do more of the the the classic style social casino bread and butter stuff that we know so well?

Yeah, I would say the mu the large majority is gonna be that, the bread and butter that we know. And then again, I'm just throwing a percentage out there. It's not the exact, but another call it, you know, ten to fifteen percent uh of of our business will be on things that are uh more casual, maybe casual puzzle in nature. Again, that kind of like what you just alluded to, like things that we felt are very like

simple core loop that can be very evergreen and could be played at a very like, you know, fast pace, right? Like I'm not we're not doing anything like with a dice roll or like a coin master, but you know, think of a type of mechanic where okay, it's kind of like a like a like a slot machine, right? You the the whole point is like getting people to spin, right?

as fast as possible and as much as they can in a given day because that will lead to them progressing in other like meta and and live ops features where, you know, we drive a lot of the engagement for the players. So that I I would say that's where the focus is. But we

But to answer your question in a different way is we're c we're constantly talking to our players. So we're constantly running surveys even do like a a V I P program, we're constantly talking to the players to understand not only their behavior inside our games, but what else are they doing, right?'Cause I think they

Social casino is another form of entertainment. We're just competing for for for timeshare, like right on their phone or on whatever screen. So we we try to understand what else are they What else are they watching? What else are they listening? And then to games, what else are they playing? And as you said, a lot of social casino players do also play other casual games. And we try to understand, okay, what is the fun about those casual games that you like?

And then what we find is that okay, the lot of things that you like, those same elements are also apparent in either traditional social casino games. or in some of these new games that we're kinda thinking about that play to that same player behavior and and motivations. And and so those are the ones that we try to we try to go after.

Yeah, yeah. Okay. Well that brings us to uh a topic that's very important, I think, for all developers, not just those casino developers, but uh that's UA, user acquisition and and distribution and growth. Uh obviously post-IDFA, everyone's talked about this. it is very much more difficult.

to do targeting now. It used to be, I mean, the way we scaled Vivas Las Vegas, which was our big hit game back in the day, was we did the L T V CAT calculation and we did the payback periods and it was very easy to go and identify players exactly

the right people, literally the exact right people who would absolutely resonate with our game based on lookalike targeting on competitors and things like that. That's that's very much m more difficult now. Obviously the costs have gone up anyway, and now post IDFA it's even harder. So how are you guys doing UA? How has that changed this casino world? How has it changed your world? What is what is use profit what is profitable user acquisition look like now?

If I'm hearing some of what you're saying correctly, it's you're not necessarily doing a huge amount of new user acquisition. I'm not gonna correct me if I'm wrong here, but you're maybe doing more remarketing and retargeting for laps players. But tell me more in your own words about w what are you guys doing? How does it look now versus how it used to look back in the day?

So though the the the analogy that I like to use is free to play mobile games has has always been about continuous like product innovation, testing and optimization. And we apply that same mentality in in marketing and user acquisition. So we're, you know, social casino did really start on on Facebook UA, like as you mentioned. But everyone in the industry, including us, we we test and buy everywhere.

And it's just and it's just not online. We we've been spreading with a lot with offline marketing these days. You may have se seen some of the side play games on TV and out of home advertising, such as the uh partnership or celebrity tie in we did with Jerry O'Connell for quick hit slots and and Joe McHale for for Jackpot Party.

Um, so again, we do a ton of research to understand where our players are spending their time when not playing our games, uh, but also when they could be more likely to pick up a game. or or reactivate in one of our games. So then we go and make an informed strategy to advertise there.

and measure for the returns that we're expecting there. So so we're constantly innovating on how we how we do marketing, just like how we're always innovating in the product to provide that player with the the best entertainment experience. So back to your question, examples, you know, we have definitely the the us and the industry have definitely broadened out from the traditional uh Facebook UA.

And it's just it's just everywhere now. Like I would say wherever you think your players are, or even if you don't think your players are, go and try to experiment with it. And that's what we've done a lot with uh T V and offline and you know, we're seeing really good results there. Okay. Can you share any more about kind of what percentage of your overall? You know, I mentioned that a couple of times now, you know, about seven hundred million dollars in revenue, eight hundred person team.

A any can you share any insight on what percentage of that is is marketing and, you know, payback periods, things like that? Yeah. I I would say and if you can't. Yeah, if you can't. you know, like actually no, we're part of Light and Run a public company. They do disp they do disclose their the um publicly the segment uh revenue. So for for a side play, I think if you go over the last quarter

You know, we're we're up to about a two hundred million revenue per quarter. So if you if you just do the simple run rate out, we're we're we're closer to eight hundred million, right? I don't think we uh I don't we necessarily disclose like how much we s uh spend publicly in UA. But again, if you go back and look at

third party reports or even you look at the last time we were still doing public filings, like you'll see that our UA percentage is is is is still like in the twenties, I would say, in the in the low twenties of of revenue. And no, we And I know we talk a lot about like reactivation and then like remarketing, but You know, there's a lot of that. A lot of the UA that

I would say I don't know the exact you know, I can't disclose the exact percentage, but we're still out there trying to grab new players and also reactivate the players. So it's just a balancing act and the way we think about it is like We we we track and monitor closely every single dollar that we spend and wherever it's driving the best returns will lean into it. Like the way we

the marketing team always talks about they're like portfolio managers, like investment portfolio managers, right? They're managing a portfolio of not only games, but they're managing a portfolio of of user acquisition and retargeting channels. And, you know, our job is to basically drive the uh the the the highest return that we can see. Got it, got it. Yep, makes makes makes total sense. I I would actually say

twenty percent ish of revenue is actually, in my opinion, fairly low compared to what I used to see and I think is still the case, especially in the casino category. It used to be that you would spend quite but again, it's changed probably quite a bit now'cause there was a it was a land grab back in those days. Like you were spending as much and as fast as you could to get all those new players in there. And I think it sounds like it's it's a much more I mean

Understandably so. It's a much more mature market now where yeah most of the land grab has happened and most of the players are probably in the ecosystem already and it's m mostly about Making sure that they stay in the ecosystem and that if they churn, they lapse, you you retarget them and bring them back, which

If I were to editorialize, that sounds like that's where the the industry is right now. Which makes total sense. A final question on the UA side or kind of the the targeting side. You said you're everywhere and you're doing Celebrity partnerships with Joe McHale. And the one thing that caught my eye is that you're you're partnered with Austin FC, uh, football club, soccer club. and major league soccer. How is that working? How did that come about? I'm just curious to hear how a

social casino company and a, you know, Texas soccer team go together in in harmony. Tell us a little bit about uh how that happened and how it's working. Yeah. So do you follow soccer or football?

I do. I mean, I don't follow major league soccer, but I'm a European and so I f I follow Pri I lived in the UK for many years and so I follow Premier League soccer. So I watch on Peacock mostly. On the weekends and the in the mornings I usually watch like two or three games back to back if I have the time. So that's my Yes. Yes I do. I follow soccer. Yeah. So the uh the Austin F C partnership is actually an interesting one.

That partnership is actually not about player acquisition or game branding. The Austin FC partnership is about connecting with the Austin community as one of the as we're one of the top employers in Austin. So Austin is actually one of our largest studio locations. And we wanna continue to grow there and bring in best in class talent. Uh Austin FC is actually the second most recognized and celebrated brand in Austin.

And, you know, we had the opportunity and became super excited to be affiliated with that brand and and use that um as a way to try to reach more potential uh talent in in the Austin area. But trust me, as a business person when I was working with a a a PR group, I was like, Okay you know, let's my my first brain was like, okay, let me okay, is this about, you know, user acquisition?

Okay, like let me model this out. Like, okay, how much is this gonna cost? And how many installs are we gonna bring and what's the lifetime value on that install? So I was thinking that's where my head went immediately. I was like, how do you how on earth is there ROI? Like that cannot possibly be

You know, L T V versus CAC positive, like sponsoring a soccer team. Okay. But that makes a lot more sense. If it's more about the either way, right? The R I It comes in different ways, exactly. It comes in like, you know, the talent, right? We're we're all about like talent here. Um, so you know, we look at the The the ROI, the way measure it is about okay, how many um

inbounds or even like the success of the outbound, you know, candidates when we go and recruit, the quality of that, you know, the conversion of that. So typical like funnel way of looking at it, but You know, this is more about like, I would say talent acquisition and retention, you know, versus typical user acquisition market.

That that makes a ton of sense. Yeah, I mean uh because the lens I had was major league uh not sorry, Major League Soccer, it was the Premier League, you know, in the UK uh uh sponsorships which uh i if you watch it at all, you'll notice that like nine out of ten of the ads in the stadium is sports betting ads, right? Or gambling ads. Um both for the UK market, but also for the Chinese market as well. So a very um

Yeah, so that that was the lens I had was like, Okay, too, I would say. Those are I I yeah, yes, I'm pretty sure Premier League soccer sponsoring in uh Emirates Stadium is gonna be a little bit more than than Austin's I don't even know what the Austin Stadium is called, so

But okay, cool. Makes a lot of sense. All right. Well, we're coming up to time here, but I always ask uh all of our guests one final question because we are a gaming podcast after all. And so that question is, what three games are you currently playing or are you most excited about? And you can't use your own? your own companies ah well

Okay, I don't know if I can give it out three games, but I don't know if I can keep it three games. So I do have to do the but there is, you know, one side play game. I I'm I'm gonna quickly mention that that I that I play the most is probably quick hit slots. Okay. And then outside of our games, I do love I do love sport and stats naturally. So I continue to play Madden football, MLB the show, NBA two K on console. And then

You know, and I you know, I have experience in like uh the casual and match three categories. So and I play a lot of those games with my two daughters. So Candy Crush, Royal Match, um, Gardenscapes, because my daughter loves the narrative in in in in Garden Scapes. And then my personal like

So do I by the way. I I'm a Gardenscapes player and I love the narrative too. And I I'd say you know, I've never admitted that before, but I'm admitting it on this show now. So Yeah, like I see my daughter more engaged with the narrative and it's like she's telling me, like, Hey, can you help me pass some of these levels and I can unlock the keys to And then my to be honest, my guilty pleasure is

And I played a lot of what I call action RPGs. So like Survivor.io. I still play that. And literally last week I just pre registered for Archero two and I'm waiting for that to come out in the US so I can start playing that. Nice, nice, all right. Well good. I'm glad uh I'm glad you're still playing games, as am I, and I think all all of our guests

I was, you know, if you're working in the industry, you gotta keep playing games. You gotta keep fresh. You gotta stay on top of things. So great. I really appreciate that. All right. Well, that's all we have time for today. We're right on time, actually. And so Danny, I just wanna say big thank you for coming on the Novic Gaming Podcast. It's been a really fun trip down memory lane for me at least, going back through so some of the social casino.

titles that I I used to know so well. I deconstructed the crap out of them, including quick head slots, which was one of one of our inspirations back in the day. So it's been a real pleasure and I'm I'm so glad we made this happen and it's been great catching up with you again as well. So thank you. Same. Thank you. Thank you for for doing this. I'm finally uh glad we got together and hopefully we can uh talk soon again.

Absolutely. Welcome back anytime. And uh if you do have any new game launches, especially if they're outside of the casino genre, I wanna I wanna definitely have you back and talking about those and how they're doing and how you're leveraging your existing player base with with a maybe a different genre. So definitely interesting.

Perfect. And then of course, as always, a big thank you to all of our listeners. We will be back next week with more interviews, more insights, and more analysis from the weird and wonderful world of gaming. So until next time, friends, feel free to send questions, guest recommendations, and comments to me. My email is nico at novic.co.

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