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BLUE OCEAN OPPORTUNITIES IN THE RED OCEAN OF SOCIAL CASINO
19 October 2015
Agenda
Background on me and Amaya
Blue Ocean Strategy Overview
Formulating a Blue Ocean Strategy
Tools
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LLOYD AND AMAYA
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Been there, done that
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• Merscom• Playdom• 519 Games
Start Up
• Merscom to Playdom• Playdom to Disney• Spooky Cool Labs to Zynga
3 exits
• Disney• Zynga• Amaya
Big Co
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WHAT IS AMAYA & POKERSTARS?
Canadian-based Amaya Inc. is a global gaming leader listed on the NASDAQ and Toronto Stock Exchange. Amaya owns and operates the world’s largest poker brands, PokerStars and Full Tilt. Amaya brands lead the market not only in the offline world, but also sponsor the most successful live tours around the globe.
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Amaya: Global Gaming Leader
$1.45-1.57B2015 PROJECTED REVENUE
OVER $400MANNUAL FREE CASH FLOW
95 MILLIONREGISTERED CUSTOMERS
AROUND 71%MARKET SHARE OF THE ONLINE POKER INDUSTRY
24/7/365ONLINE SUPPORT IN 26 LANGUAGES
MORE THAN 1,750STAFF GLOBALLY
“PokerStars is the dominant player in the industry due to a passion for delivering a high-quality, secure and authentic online poker experience to millions of poker players around the world. PokerStars has been the leader in establishing industry best practices in areas including e-commerce, security, game integrity player fund protection, customer service, responsible gaming and marketing.”
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PokerStars: The World’s Largest Poker Site
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140 BILLIONHANDS OF ONLINE POKER DEALT
12 LICENSESMOST IN THE POKER WORLD
2 MILLIONHANDS PER HOUR DEALT
$200M WONIN TOURNAMENTS EVERY MONTH
2.8 MILLIONS FANSAND FOLLOWERS OF POKERSTARS SOCIAL MEDIA
225,000 PLAYERSWORLD RECORD FOR ONLINE POKER TOURNAMENT
$1 MILLION GUARANTEEDWINNINGS IN THE SUNDAY MILLION TOURNAMENT
$10 MILLION GUARANTEEDWINNINGS IN THE WCOOP MAIN EVENT
$1.36 BILLION PAYOUTIN TOURNAMENT WINNINGS BY THE END OF 2015
WHY BLUE OCEAN
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Blue Ocean Strategy
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Creating uncontested market space and making the competition irrelevant
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Red Oceans vs. Blue Oceans
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Red Oceans vs. Blue Oceans
Critical for social casino
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Higher ROI competing in a Blue Ocean
High UA costsAnd getting higher
Very competitiveBloody red Billion dollar competitors
Lets start with an example
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Circus Industry
Declining industry Expensive “Star” performers
Competition not limited to other
circuses but other entertainment
options
Negative sentiment about use of animals
in circuses
2 large players setting the standard (Ringling Brothers
and Barnum & Bailey
14Very Unattractive!!!
Relevant Factors in the industry
PriceStar performersAnimal showsAisle concessionsMultiple Show arenasFun & HumorThrill and dangerUnique venueThemesRefined watchingMultiple ProductionsArtistic music and dance
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Redefining the circus
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Specific Actions
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Cirque du Soleil
Created a hybrid between the circus and the theatre
Retained the symbolic and glamorous aspects of circus, such as the tent and the more breathtaking
aspects, such as acrobats
Incorporated more comfort, sophistication, elegance and theatrical plots; this brought not only the richness of theatre but a whole new demographic of customers
It looked across market boundaries and created new ones
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FORMULATING A BLUE OCEAN STRATEGY
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You must begin by reorienting your strategic focus
from competitors to alternatives, and from customers to
noncustomers of the industry
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Formulating a Blue Ocean Strategy
Reconstruct Market Boundaries
Focus on the Big Picture, Not the Numbers
Reach beyond existing demand
Get the strategic sequence right
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RECONSTRUCT MARKET BOUNDARIES
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Look across……..
Alternative industries
Strategic groups within industries
The chain of buyers
Complementary products and service offerings
Functional or emotional appeal to buyers
Time
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Who are our alternative industries?
Console games Movies TV
Books Casinos iGaming
Blogs Travel Traditional Games
Sports eSports
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Strategic Groups in our Industry?
Console Gamers
Casino Visitors
Social Gamers
Real Money Online Players
Mobile Gamers
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Chain of Buyers
Who are the purchasers?• Players• Parents
Who are the influencers?• Friends• Partners
Who are the users?• Players They are NOT
necessarily the same
group
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4. Look Across Complementary Products
Products are not used in a vacuum
What is the total solution buyers seek?
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5. Look Across Functional or Emotional Appeal
• Some industries compete on price and functionRational
• Others compete on feelingsEmotional
• Functional companies over time become more functional
Rational to emotional
• Emotional companies become more emotionally oriented
Emotional to rational
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6. Look Across Time
Who has done it? Apple with itunes redefining access to music
This is the MOST difficult one
Compare value the market delivers today to the value that can be delivered tomorrow
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Insight into how a trend can change value to customers helps find new market spaces
FOCUS ON THE BIG PICTURE, NOT THE NUMBERS
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Strategic Planning
Most companies’ strategic planning
processes keeps them wedded to red oceans
The process drives companies to compete within existing market
space instead of looking for new market spaces
Typical Process:• Current Industry conditions and
competitive situation• Discussion on how to increase
market share, capture new segments or cut costs
• Outline of goals• Budgets and spreadsheets• Output: a large document
where people spent time filling in boxes and running numbers instead of thinking outside the box
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Alternative approach
Start by drawing a strategy canvas (value curve)
Unlock the creativity of a wide range of people within the organization
Open the company’s eyes to blue oceans
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Reach beyond existing demand
Key component of achieving value innovation. Move away from:• Focus on existing customers• Driving finer segmentation to
accommodate buyer differences (tailored offerings)
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Look to NONCUSTOMERS!!Focus on commonalities in what buyers value!
Reaching beyond existing demand
Noncustomers before
customers
Commonalities before
differences
Desegmentation before finer segmentation
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Four Actions Framework
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A New Value Curve
Reduce
Eliminate Create
Raise
Eliminate-Reduce-Raise-Create Grid(Example)
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EliminateIn-app purchases
RaiseSpeed
Fun
ReducePaid user acquisition
CreateProduct Placement
Subscriptions
Drawing a strategy canvas
It shows the strategic profile of an industry by highlighting the factors that affect competition among industry players
It shows the strategic profile of competitors identifying what they invest in strategically
It shows the company’s strategic profile
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Strategy canvas
Captures the current state in the known market space
Determine the important factors in the industry (examples)•Genre• In-app ads• In-app purchases•Social Calls•Real-World Elements•Cross-Promotion Bars•Product Placement•Fun•Platforms•Time Killing
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Reorient your strategic focus from:• Competitors to Alternatives• Customers to Noncustomers
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Potential canvas for social casino
3 characteristics of a good strategy
New Value Curve should have FOCUS
Divergence
Compelling tagline
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