infinity magazine july/august edition
DESCRIPTION
Gaming, MagazineTRANSCRIPT
Andrew TottenhamConsultant at Las Vegas Sands
Britt BoeskovCOO of Unibet
David YeoCEO/Founder of iSBN (iSportbet.net)
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“Outstanding Contribution to Gaming” Awarded to Bertil Knutsson at the 5th International Gaming Awards in January 2012 - the following was used for the pre-sentation
Bertil Knutsson was Born on March 1, 1932, and brought up in Göte-borg, Sweden, as the youngest of four siblings.
In his teens he developed a keen interest in Boxing. Among his friends and boxing mates was the late World Champion of Heavy Weight Boxing, Inge-mar Johansson, who later became Bertil’s partner as promoter of profes-sional boxing events such as with Sonny Liston. Bertil was also an interna-tional boxing referee, for example the European Championship for Amateur Boxing at the age of only 29. He was the Chairman of the Swedish Amateur Boxing Federation 1985 – 1989. During his Chairmanship he introduced Boxing for women in Sweden.
Bertil also promoted other first class events in Sweden. Harlem Globetrot-ters and Professional Tennis – World Championship Tennis (WCT) - with the world leading tennis players at the time (in the 70s) such as Björn Borg, Stan Smith, John Newcombe and Arthur Ashe.
Bertil started his entrepreneurship with Knutsson Casino in 1959, operating Restaurant type Casinos in Sweden to eventually become one of the leading privately held gaming companies in Sweden.
Sweden soon became too small for his visions and went International in early 80’s with the introduction of the revolutionary invention of a chip sort-ing machine, the “Chipper Champ”. With the aid of magnificent manage-ment he developed TCSJOHNHUXLEY to become the supreme global sup-plier of turn-key Casino solutions. Several acquisitions were made globally throughout the years, such as John Huxley Ltd in 2003.
In 2001, Bertil with partners formed a company introducing Ladbrokes eGaming in the Nordic Countries. In five years the company recruited over 300 000 new members who stood for approximately 40 % of Ladbrokes eGamings’ total Poker revenues.
Michael and Tristan, two of Bertil’s three sons, are active in the Family Busi-ness which today consists of investments made in various public and non-public companies throughout the world. Among some of the renowned interest are Betsson AB and Net Entertainment.
Apart from the Gaming Sector, the family business also has interest in IT Security, Tire recycling, Wind Power and Media.
Last but certainly not the least; Bertil has a huge passion for Trotting. For decades he has supported the Industry and is owner of more than 50 trot-ting horses. One of the top career heights was when Sebastian K came 2nd in The European Derby at Lille (France) in 2010.
Among his friends were the World Champion of Heavy Weight Boxing, Ingemar Johansson, who later became Bertil’s partner as promoter of pro-fessional boxing events such as with Sonny Lis-ton. Bertil was also an international boxing ref-eree, for example the European Championship for Amateur Boxing at the age of only 29. He was the Chairman of the Swedish Amateur Boxing Federation 1985 – 1989. During his Chairman-ship he introduced Boxing for women in Sweden.
Bertil Knutsson - A look back on his life
“Bertil was a very special man, driven, single minded and without doubt a pioneer in the gaming World, we were delighted to award Ber-til the Outstanding Contribution Award for 2012. He will always be remembered for many things, a businessman, a father, a leader and also for ever more a legend a the International Gaming Awards (IGA)”. Lana Thompson Co-Founder IGA
Remembering the man, the boss and the legend
Bertil Knutsson making his acceptance speech at the 5th International Gaming Awards, January 2012
iGaming News FEATURED
PokerStars seal historic deal for the assets of Full Tilt Poker Agree to pay back all FTP players and seal deal with US DOJ
The news that every on-line poker player had been waiting for was announced on the 31st July in a press statement from Full Tilt Poker.
After more than 15 months of wondering if their ac-count balances at Full Tilt Poker would ever be worth more than monopoly money, the site’s online player base may breathe easier now that, an agreement has been finalized that will allow them to be reunited with their online bankrolls.
The agreement, approved by the U.S. Attorney’s Office, allows Full Tilt to voluntarily forfeit all assets to the US government. Such forfeiture is con-tingent that the USAO then transfer certain of those assets to PokerStars. In return for the forfeiture, the government agrees that all civil forfeiture claims and money laundering charges against the Full Tilt companies, as documented in the amended civil complaint, be dismissed with prejudice. There are absolutely no conditions that require any civil or criminal charges lodged against any Full Tilt related individuals to be dismissed or otherwise resolved, in whole or in part, as part of this agreement.
Provided for in the deal, PokerStars agrees to forfeit the amount of $ 547,000,000. to the US government over three years. By doing so, all civil forfeiture and money laundering claims, as specified in the amended civil complaint against all named PokerStars companies shall be dismissed with prejudice. No criminal charges currently facing PokerStars related individu-als are in any way resolved as part of the agreement, and these charges were never a part of the negotiation for this settlement. Once the asset transfer has been completed, and within a period not to exceed 90 days, PokerStars committed to make available for immediate withdrawal, without limitation or restriction, other than required by applicable law, the online poker account balances of non USA Full Tilt Poker players. Such an amount is expected to equal approximately $ 184 million in total. While compen-sating Full Tilt’s non US players for any other assets, like FTP points, etc., over their balances is not a part of the agreement, I was told by PokerStars sources that the company plans to have fair resolution for these assets. The settlement was negotiated by Anand Raman, John Caroll and David Zornow of Skadden,Arps, Slate, Meagher & Flom for the PokerStars companies.
US players with account balances outstanding, will be compensated sepa-rately. U.S. victims of the offenses allegedly committed by the FTP compa-nies or other members of the FTP group as put forth in the amended civil complaint, shall have the opportunity to file a petition for remission with the U.S. Department of Justice, Asset Forfeiture Money Laundering Service (AFMLS), taking into regard the PokerStars forfeited funds, to seek compen-sation for their losses. The value of the remission applications is expected to be approximately $ 150 million. For clarity of compensation purposes, US players and “rest of world” players shall be categorized based on their veri-fied and approved locations on the Full Tilt site as of April 14, 2011. In order to effectuate the purchase of assets alongside the corporate civil settlement, Isai Scheinberg will, within 45 days of closing, withdraw from and not serve in any managerial or director role at any PokerStars company, including any entity that may own or operate any of the forfeited Full Tilt assets or their present or future affiliates. This part of the agreement may be revisited by the parties, without order of the court, upon resolution of the Black Friday criminal case.
Further part of the agreement, neither the Full Tilt Poker companies or Pok-erStars companies admit to any wrongdoing, nor do either of the compa-nies, or the government, affirm or deny the merits of any charges. Once the forfeiture is completed, the domain name use agreement of both compa-nies will be terminated and the in rem arrest warrants will no longer ap-ply. The government agrees to petition that the restraining orders be lifted. Both Full Tilt Poker companies and PokerStars companies, or any present or future entities controlled by those companies or their principals, can-not offer online poker for real money play in the USA until and unless it is permissible under relevant law. Neither company can ever make any claim vs the USA, the FBI or the USAO SDNY resulting from the forfeiture or any properties seized relative to the civil charges. Full Tilt agrees to withdraw all claims against any seized or otherwise restrained assets. PokerStars agreed to release any claims to accounts of non-PokerStars entities. The value of PokerStars accounts restrained as a result of the civil action will be released by the DOJ.
The Full Tilt Companies forfeiting their assets include: B.T. Management, Dromane Limited, Filco (Holdings) Limited, Filco Limited, Fitzroche Limited, Graybel Limited, Irolo (Italy) Limited, Kolyma Corporation AVV, Ludus Lim-ited, Cyprus, Media Management GmbH, My West Nook Limited ,Oxalic Limited, Orinic Limited, Pocket Kings Consulting Limited, Pocket Kings Lim-ited, Ranston Limited, Real Media Limited, Rekop Limited, Rosbull Limited, Rullan Joyce Limited, Tiltproof Limited, Tiltware LLC., Tiltware Merchandise Services LLC. and Vantage Limited. The settlement was negotiated by Jeff Ifrah of Ifrah Law, Barry Boss and Anne Madonia of Cozen O’Connor for the Full Tilt Companies.
At this time, a specific date for relaunch of the former Full Tilt Poker site is unclear, but PokerStars sources confirm that it’s a priority to see this hap-pen as soon as possible, certainly within the prescribed 90 day time frame as set forth in the agreement.
In a statement from Eric Hollreiser, Communications Director at PokerStars in response to the deal has stated that part of the agreement includes both PokerStars & Full Tilt Poker being allowed back in the US when and if the US allows online poker again, whether Federal or state by state.
“Our settlement acknowledges that both PokerStars and Full Tilt are eligible to apply for a license in the U.S. to offer real money poker when states or the federal government offer such an opportunity. We look for-ward to this opportunity and are confident that we bring tremendous value, regulatory experience, market credibility and financial integrity to the marketplace.”
“We have admitted to no wrong-doing with regard to our past U.S. operations and can now focus all of our energy and resources on advancing our global business, which now includes operating Full Tilt Poker.”
More details on the PS/FTP deal & what it means for players
In what has been a remarkable period for the online poker industry and even more so for all involved in the Full Tilt Poker, PokerStars affair over the last 15 months, one piece of news that has been confirmed by the US DOJ. That is that as part of the deal and much speculated prior to the deal, Poker-Stars founder and the architect of the agreement, Isai Scheinberg is to step down from the company.
In the Press Released announcement today by Preet Bharara, the United States Attorney for the Southern District of New York, said that;
Within 45 days of the acquisition of the Forfeited Full Tilt Assets, Isai Scheinberg, who is presently under indictment in a related criminal case, shall not serve in any management or director role at PokerStars. This pro-vision is subject to re-evaluation by the parties upon the resolution of the criminal case.
Other parts of the agreement which has been announced are;
PokerStars is also prohibited from employing, or otherwise hiring, Full Tilt Poker insiders Raymond Bitar, Howard Lederer, Rafael Furst, Chris Fergu-son, and Nelson Burtnick. Bitar and Burtnick are also named as defen-dants in a related criminal Indictment. Bitar, Lederer, Furst, and Ferguson are named as civil money-laundering defendants in this complaint.
This part of the agreement will certainly not be a problem for PokerStars, they certainly do not want any senior executives from the old FTP to be involved in the new launch.
PokerStars is prohibited from offering online poker in the U.S. for real mon-
ey unless and until it is legal to do so under U.S. law.
This part is very good news for the online poker company, basically allow-ing PokerStars back in to the US once is is legalised again, either by State by State or Federal level. However do not forget PokerStars would need to find a land based Gaming Operator to work with to make this happen (opening up a whole new chapter of speculation on whom that could be).
The Government will maintain a portion of the $547 mil-lion forfeited by PokerStars as a substitute for the for-feited Full Tilt assets to cover the litigation of claims by other parties asserting interests in the Forfeited Full Tilt Assets.
It is the ultimate sacrifice for Isai Scheinberg to step down from PokerStars, now with a bright future for the company after the settlement with the US DOJ. Whom will be able to replace the man, that most of the online poker players would now looked on as an icon after organising the return of hun-dreds of millions of dollars to the poker community? Parts of the settlement not covered is the criminal case against Isai Schein-berg, however this seems a formality now the settlement has been con-cluded and the poker players saviour will at least be able to leave the Isle of Man without concern of arrest. There is a long way to go with this story, but one person who will be missing in the long future of PokerStars will be its founder.
Finally as exclusively revealed on the 31st July by the iGaming Post, but then forgotten about amidst the excitement of the PokerStars agreement with the US DOJ to purchase the assets and debts of the discraced Full Tilt Poker site, was that Nelson Burtnik, Head of Payment Processing did indeed catch a plane to the US. On arrival at Newark ariport Burtnik was arrested by US FBI agents, whether this was the catalyst for the deal with FTP, it is not known at present, but now the US DOJ has two major players within the FTP business. With previ-ously Ray Bitar CEO of FTP and now Nelson Burtnik, on arrest Mr Burtnik was then up in front of court where he made bail for $500,000, payment was arranged and Burtnik is already out on bail. Trial dates are yet to be confirmed for either men from FTP, but it seems the US DOJ are happy with the two men to stand trial and the deal for FTP assets went ahead.
Agreement reached on paying back players & entering the US again
iGaming News
Mark Blandford sets up new investment company
Mark Blandford the well known founder of Sportingbet has set up a new venture capital company with some £100 million war chest named Burly-wood Capital. Neil Goulden, the former Gala Coral Group chief executive officer & Pan-mure Gordon investment banker Andrew Burnett are understood also to be involved in the private equity venture, that will be chaired by Sir David Michels who was the former Hilton Group executive.
The fund is looking to invest in a multiple range of businesses that includes online poker, social gaming and pay-to-play entertainment, the venutre will start the launch at the end of August with an initial £50 million, then raising to the full £100 million early in 2013.
William Hill to fight Governments “point of consumption tax”
William Hill, Britain’s big-gest bookmaker is preparing a legal challenge against the UK governments plans to tax online gambling in this country from the end of 2014. The Gibraltar based bookmaker has asked its lawyers to build a case against the UK’s proposed “point of consumption tax”, which will impose a 15% duty on online gam-bling profits generated in this country. Almost all UK bookmakers, including Ladbrokes, have shifted their online businesses to Gibraltar and the Isle of Man over the past decade, where tax is less restrictive.
But earlier this year the UK Chancellor announced he wanted to impose a 15% duty on bookmakers that offer online betting in this country in an effort to raise about £200m a year.
Lawyers for the gambling industry warn the proposed tax is “illegal” under
European law as it is an attempt to restrict the free movement of goods and services for tax purposes. Ralph Topping, chief executive of William Hill, said he had received “en-couraging noises” from lawyers that the betting giant would have a solid case against the 15% point of consumption tax. William Hill’s digital profits reached £68.9m in the first half of the year.
Legal experts warned the Government was trying to shut the stable door after the horse had bolted after it liberalised online gambling in 2007. Jason Chess, betting and gaming partner at law firm Wiggin, said: “You cannot restrict the free movement of goods and services in order to raise your own national tax. We can’t stop BMW from selling BMWs in this country be-cause the tax is paid in Germany.” Betting authorities in Gibraltar are also considering taking the UK to court over the tax amid fears it could encourage bookies to shift their online busi-nesses back to Britain.
Cantor reaches deal to provide online poker
Cantor Gaming have announced that it has reached an agreement with the California horse racing tracks to provide online poker technology and infra-structure, should it be legalized in California. It’s unclear when, or if, intrastate poker will be legalized in California, how-ever Cantor is ready if it does. Cantor said its deal was reached with a group called Horse Racing United, which it says is a not-for-profit organization representing the interests of substantially all thoroughbred racing and breeding in California. The agreement is subject to Horse Racing United being selected as poten-tially one of a limited number of licensees to operate intrastate Internet gam-bling websites, Cantor said.
Macau NewsMacau Police raid CasinosMacau police raided casinos and hotels in an operation with Chinese and Hong Kong authorities after a series of murders and attacks targeting guests, it has been reported. Police questioned nearly 1,300 people and detained 149 of them for further investigation as part of an operation codenamed “Thunderbolt,” according to a statement from the Unitary Police Service. The crackdown is a reminder of the deadly gang wars the plagued Macau in the late 1990s, but over the last couple of decades has been totally cleaned up. In the early 90′s criminal groups known as triads fought for control of casino VIP rooms and loan-sharking operations resulting in the deaths of 40 people in shootouts. The jailed leader of the 14K triad, ’Broken Tooth’ Wan Kuok-koi, is near the end of his prison term after being sentenced to 15 years in 1999. His release is not known to be the cause of this recent police activity or whether gangs are positioning themselves for his imminent release.
Macau police arrested 17 people on Aug. 2 for cheating in three of the city’s casinos. Those detained were involved in a scheme where casino dealers took bribes and used tiny cameras to take images of cards on baccarat tables, Macau’s Judiciary Police spokesman Chan Kin-hong said. The case involved $11.6 million and took place at three casinos in Macau city and Cotai Strip, including those run by U.S. casino operators, Chan said, without specifying the names of the casinos. Hong Kong police arrested 130 people and seized millions on Hong Kong Dollars in cash and property in anti-triad raids to combat money launder-ing on Aug. 2, as part of the “Thunderbolt” operation with the Macau and Guangdong law enforcement agencies.
Macau revenue slowest since 2009Gambling revenue in Macau, inched up just 1.5% in July from a year ear-lier, the slowest growth since the financial crisis in 2009 as a tropical storm reduced visitor numbers, compounding subdued demand from Chinese gam-blers.
July’s revenue was $3.08 billion dollars, though still ahead of analyst expectations, government data showed on Wednes-day, that Analysts had forecast July growth to be flat or down 1% year-on-year. Macau’s once turbo-
charged gambling industry has seen demand falter as the enclave’s key cus-tomers, super-rich VIP gamblers, have increasingly felt the impact of a slow-ing Chinese economy and rising credit difficulties. Typhoon Vicente, one of the most severe tropical storms to hit Hong Kong and Macau in more than a decade, struck in the third week of July, halting ferry services and transport for more than 24 hours and resulted in a loss of at least $87 million for Macau’s casinos, analysts estimate. Heavy rainstorms and flooding in Beijing and large areas of China also weighed on travel numbers in the region. Macau, seen by many investors as a play on China’s macro-economy, was one of the world’s fastest-growing economies last year with gaming revenue reaching $33.5 billion, more than five times that of Las Vegas. Analysts are mostly cautious on the outlook for future growth and have been revising down their estimates. Gambling revenue growth this year was projected to reach 20 percent but more recent estimates have put the figure below 10%. Fitch Ratings recently said it had revised its 2012 Macau industry revenue growth forecast to 10-12% from 15%, “reflecting our more cautious view with respect to the near-term impact of the slowdown in China. This is our second downward revision over the last couple of months.” Second-quarter earnings for Las Vegas titans Steve Wynn of Wynn Macau Ltd and Sheldon Adelson’s Sands China Ltd came in worse than expected. Adelson remarked in a recent conference call that a single quarter of bad earnings did not indicate a trend, and that Asia’s gamblers were not changing their gaming habits. Grant Govertsen, an analyst at Union Gaming in Macau, said he expected the market to register low-single-digit growth in August before jumping back to double digit growth in September due to a more favorable compari-son base year-on-year. “All in, we are expecting third-quarter gross gaming revenue growth in the mid-single-digits. Looking further out, we expect full-year 2012 GGR growth to reach the teens.”
Richard Ames Product Director at Ladbrokes is dismissedRichard Ames product director at Lad-brokes has left the company it is report-ed, Britain’s second largest bookmaker, which is set to announce further costly delays to its beleaguered technology platform in early August.
The company has already issued a profit warning about its technology division. But the half-year results will show delays have eaten even further into the £15m of profits expected from digital- which are less than half the £31m achieved in the same period last year.
Richard Glynn, Ladbrokes’ chief executive, has overseen a series of manage-ment changes since joining the company in April 2010. Insiders say morale has fallen to an all-time low, with very little hope of devising a winning strat-egy that can compete with William Hill, the UK’s leading bookmaker. Last week, William Hill was able to ramp up pressure on its long-time rival by announcing a 23% increase in online operating profits to £68.9m.
Ladbrokes decided to spend £50m developing its own in-house digital tech-nology, a move many in the industry say was its undoing. Almost all other traditional bookmakers team up with industry respected supliers, such as the done between William Hill and Playtech.
Ladbrokes, however, pushed forward with its own project, which has come up short against rivals and diverted much-needed capital from the advertis-ing budget. Mr Ames is the last of the old guard who served under Chris Bell, the former chief executive. Last year, he earned in the region of £380,000. But his re-moval is really designed to appease shareholders who have started to lose their patience with Ladbrokes’ online strategy. Some insiders suggest Mr Ames’ departure is simply designed to offer up a scapegoat to protect Mr Glynn. Meanwhile, Nick Rust, who was hired by Mr Glynn, will take over online operations, as well as retail and trading.
The 6th International Gaming Awards
Nominations out now
Absolute Poker co-founder
Brent Beckley gets 14 months
Absolute Poker co-founder Brent Beckley was handed a 14-month prison sentence on for his involve-ment with the online poker site. Beckley was one of 11 people, and three online poker sites that were indicted on April 15, 2011, with bank fraud, money laundering, and illegal gambling. Beckley pleaded guilty to criminal charges, including conspiracy to commit bank fraud and wire fraud, in December. While in the U.S. District Court in Manhattan, Beckley admitted he knowingly broke the law when Absolute Poker disguised deposits and withdrawals to banks to facilitate gambling funds. According to Reuters, Beckley told U.S. District Judge Lewis Kaplan, “I fooled myself into thinking that what I was doing was OK.” Even though Beckley cooperated with prosecutors, Kaplan handed down the 14-month sentence “to make clear that the government of the United States means business in these types of cases.” Beckley was facing a maximum sentence of 30 years, but his cooperation landed him a reduced sentence. He is the second Black Friday defendant who has been sentenced by Judge Kaplan. Last month, Kaplan sentenced former bank executive John Campos to three months in prison.
Entries open till 18th OctoberFree to enter
iGaming News
Sara & Kirsty The IGA Hostesses nudge you
“Remember the date, 18th October for Nominations Close”
As summer is here many people for-get that the 6th International Gaming Awards has already launched and in-deed nominations are open till, as the twins say the 18th October 2012. Now there are many things you can forget, indeed as you lie on the beach much can pass you happily by, but you cer-tainly do not want to forget to enter and miss the chance to meet our IGA Host-esses do you!
The 6th IGA will have a new date, the ceremony will be on the 4th Febraury 2013 and of course in an amazing ven-ue as always in London.
Landbased News FEATURED
Parliamentary report on gambling – gives good news to industryGood news came for Casino operators in July in the form of the parliamentary report on gambling, with MP’s recom-mending that the location of casinos and slot machines should be more re-laxed. Local councils should be allowed to permit betting shops to operate more than four high-stake gambling ma-chines, which can accept stakes of up to £100 and offer prizes of £500, the Commons Culture, Media and Sport Select Committee said. Casinos should be allowed up to 20 of the machines, the MPs said, adding operators across the sector should be charged lower fees by the industry regulator, the Gambling Commission.
The Gambling Act 2005 originally set out to allow the introduction of Las Vegas-style super casinos across the country, with slot machines offering linked and unlimited jackpots. However, the plans, proposed by then culture secretary Tessa Jowell, were watered down significantly in the face of fierce public opposition conducted fiercely by the Mail newspaper, with super casinos cast aside and the cre-ation of the Gambling Commission to regulate the industry. The MPs say the commission was too bureaucratic and expensive, adding it was not for Whitehall to decide on the location of casinos in the UK but local councils instead. John Whittingdale, Tory chairman of the committee, said: “Gambling is now widely accepted in the UK as a legitimate entertainment activity. “We took a lot of evidence in this inquiry, from all sides, and while we rec-ognise the need to be aware of the harm caused by problem gambling, we believe that there is considerable scope to reduce and simplify the current burden of regulation and to devolve decision-making to a more local level. “The ‘reluctantly permissive’ tone of gambling legislation over the last 50 years now looks outdated.”
The committee of MPs, from across the main parties, said the Government also needed to make it more attractive for online operators to base them-selves in the UK. Taxes on the industry were too high, pushing most internet-based operations abroad, their research found. And the MPs say that by allowing high street betting shops to operate more than four high-stake machines, it would prevent them clustering together in town centres.
Malcolm Moss, chairman of the National Casino Industry Forum, said: ‘We are very pleased the committee has recognised the value, integrity and achievements of the British casino industry. ‘We are pleased that the committee has identified the failings of the 2005 Act in creating a twin-track industry which puts British businesses at a disadvan-tage and costs jobs and investment. ‘Harmonising the rules on the number and type of gambling products all ca-sinos can have will prevent customer confusion and make it clear what to expect from a UK casino.’ The news is very welcomefor both casino operators and bookmakers, the next step is to see if leglislation will be implemented to al-low the recommendations. One thing is for sure the Mail newspaper will have a few things to say over the parliamentary report, however with many ca-sino operators struggling with the recession and much needed new income streams, the opportunity to open in once restricted areas is good news. Also for online operators outside the UK mainland, what the new propsed tax will be, is still important on their decision on whether to relocate back to the mainland. One thing is for sure it is good news for the gambling industry, now the ques-tions is when will the reccomendations happen.
Caesars to build World’s tallest observation wheel
News from the USA
Caesars Entertainment says it has now obtained a key county permit allow-ing it to build the world’s tallest observation wheel in a planned retail, dining and entertainment complex on the Las Vegas Strip. The proposed wheel would stand 550 feet tall. It would be higher than the nearly 443-foot London Eye and the 541-foot Singapore Flyer, and taller than a 500-foot wheel being built across the Strip from the Mandalay Bay resort. That one is called SkyVue. Caesars officials on Tuesday called the amusement and transportation sys-tem permit a crucial step toward opening the so-called “High Roller” attrac-tion next year. The Ferris-style wheel is part of a planned $550 million development on the Strip near the company’s Harrah’s Las Vegas, Imperial Palace and Flamingo Las Vegas casinos.
Harmon Tower to be blown up
Nevada District Court Judge Elizabeth Gonzalez has given the go-ahead in mid July for casino giant MGM Resorts International to implode a flawed hotel tower that was partially built but never opened as the centerpiece of the glittering $8.5 billion CityCenter project on the Las Vegas Strip. The iGam-ing Post previously covered this story earlier this week (see article) The Judges pre-trial ruling sounded a death knell for the 26-story Harmon Hotel before trial next year in a massive construction defect case involv-ing project general contractor Tutor Perini Corp. and resort owner MGM Resorts. But it doesn’t mean immediate demolition. Attorney George Ogilvie, rep-resenting Perini, said outside court that he’ll appeal to the state Supreme Court. The high court is the only ap-pellate court in the state, and it could take months to rule. Meanwhile, Gonzalez sched-uled additional pretrial hear-ings next week. “Essentially, your honor, MGM wants a do-over at Perini’s ex-pense,” Ogilvie protested prior to Gonzalez’s order. The ruling came after the judge said she’d heard enough after three days of testimony to decide from the bench whether the building should stand or fall. Ogilvie argued that demolishing the tower will forever prevent a civil court jury expected to hear a nearly $500 million construction defect case next summer from viewing work that was completed. Ogilvie also said it would leave the impression that the building was demolished because it was unsafe. “Allowing MGM to demolish that building is allowing MGM to bury its mistakes,” he said. The judge said she’ll tell jurors that the demolition was a business decision by MGM Resorts, not an acknowledgement that the building was badly built. MGM Resorts officials point to a determination by Clark County officials last year that the building as it stands is an earthquake safety risk. The company issued a statement Thursday saying approval to demolish the structure only means spending another $30 million “to demolish a defect-riddled building that we spent $275 million to construct.” The building today sits empty and festooned with massive advertisements at the Las Vegas Strip entrance of the master-planned complex, which opened in December 2009.
USA News
iGaming NewsPamela Anderson launches Bampoker
Pamela Anderson, the lady of the red swimsuit among other things has just launched the Bampoker Facebook application in New York. Canadian entrepreneurs Elton Pereira and Jeremy Nichele founded the free to play application, claiming to have developed the online gaming industry’s most exciting virtual Facebook poker experience to date.
“BamPoker encourages active user engagement and strong community spirit, something we feel has been missing from the online poker world,” said BamPoker co-founder and CEO Elton Pereira. As well as being the creative consultant and spokesperson for BamPoker, Pamela Anderson is an active member of the Bampoker Facebook com-munity. She plays Facebook poker, maintains a fan page and even chats to members occasionally. “When I first met Elton and Jeremy, I knew they were on to something spe-cial,” – they wanted to take the social elements of online poker in a bold
new direction says Pamela Anderson. ‘’There is nothing like BamPoker out there today, and I am excited to be a part of such an innovative plat-form!”
Most recently, BamPoker unveiled their first choice in a series of Non-Profit organizations as part of their commitment to social responsibility. The first will be Free The Children, a long time favorite of BamPoker Founders Elton Pereira and Jeremy Nichele, who over the past year, have together built four schools in India and Africa through the power of social media. The focus of BamPoker is to build a community while having fun and the Founders saw the importance of supporting a non-profit as a meaningful way to do just that, as did BamPoker spokeswoman Pamela Anderson, a noted philanthro-
pist in her own right.
The BamPoker Facebook App boasts thrilling game play, a lead-ing-edge online community and is the only place online where mem-bers can play Texas Hold’em poker with Pamela Anderson herself.
BamPoker selected Free The Children thanks to the Founders’ long standing support of the or-ganization. Free The Children was founded in 1995 by leading Ca-nadian child rights activist Craig Kielburger. It has since grown into the largest network of children helping children through educa-tion, with more than one million youth involved in domestic and international programming in 45 countries.
A long time supporter of PETA, Anderson has also lent her time and resources to causes such as JP/HRO, Waves For Water, USO, Cool Earth (to save the Rainfor-est), Sea Shepard Conservation Society (Pamela recently flew to Germany defended Captain Paul Watson for his wrongful imprison-
ment), The MAC Viva Glam 5 campaign to raise awareness for AIDS testing around the world, as well as encouraging countries to cease the importa-tion of seal products, which is a step towards stopping the barbaric baby seal hunt once and for all. Anderson regularly pleads with governments and has had a part in changing several animal and environmental welfare laws worldwide. Anderson is also producing a documentary series with activist Paul Manley in Canada called “Whatever It Takes,” showcasing people who dedicate their lives to a cause at all costs.
“BamPoker’s passion for helping those less fortunate was a big part of why I joined their team,” said Pamela Anderson. “Throughout my career I have made it a priority to be an advocate for a variety of causes and BamPoker’s commitment to social responsibility is admirable. Free The Children is the first of many collaborations and we are delighted to be able to help support such a wonderful organization.”
This shared passion laid the groundwork for the trio’s working relationship and serves as one of the core principals of BamPoker’s mission. Pereira and Nichele wanted BamPoker to have a “personal touch” like no other site, so who better to bring on board than international celebrity and poker fan Pa-mela Anderson? Pamela is much more than BamPoker’s spokesperson and creative consultant — she is an active member of the BamPoker commu-nity where she maintains a Facebook fan page, plays poker, and periodically chats with members via the BamPoker Facebook App.
The growth of Macau’s gaming market, VIP in particular, has so far appeared unstoppable. This is buoyed by an increase in the number of players – mostly Chinese. These players contributed US$3.4 bil-lion in gross gaming revenue in the month of October (2011) alone. Such explosive growth over a short period of time will inevitably lead to some negative externalities that, hopefully, are reversible. Perhaps more interestingly is how the growth of Macau’s gaming market has helped spur the growth of other sectors, particularly the luxury industry.
It is interesting how the growth of Macau’s gaming market has sig-nificant changed the scenes on Macau’s streets. An apparent change is the number of Chinese-speaking ‘outsiders’ who patron shops selling luxury apparel and other accessories. You also see them on streets near to VIP-only entrances to hotel properties and in res-taurants late at night. Macau has been experiencing a retail boom in the last few years, in support of the expanded gaming market. Luxury retail shops here are among the most lucrative retail busi-nesses in the world today. Macau now has many shops selling all sorts of luxury products and brands to cater to its visitors.
While one would expect many of the casino players to keep a low profile during their stay here, there are some who are not afraid to flaunt their wealth. There is almost a dress code for this ‘new generation’ of younger male Chinese players, who actively patron-ize Macau’s casino properties and retail malls. You don’t have to try very hard to identify them on the streets and in restaurants. A short-sleeve polo shirt from Versace, straight pants from Armani, a gold watch from Rolex, a gold/silver necklace from Cartier, shining shoes from Prada, and more importantly, a Louis Vuitton leather man-bag or ‘murse’ that he cross-slings over his shoulders. A man-bag not only has functional uses for a typical Chinese player (guess where they put their credit cards, cash, chips, and lucky talisman) but also social ones. They carry with them a social status and are a sign of how successful one is. Louis Vuitton, Chanel, Gucci, Armani, and Burberry are some of the popular brands carried by some of these players.
Despite the financial problems in the US and Europe, we are now approaching the one million millionaires mark in China. The super-rich Chinese male consumers now represent a formidable force in Mainland China’s luxury industry. According to one report that I read, China’s luxury market has now grown to an annual sale of around US$10 billion. Another report states that more than 40% of purchases in the US$1.2 billion luxury handbag segment come from men. Luxury brands are increasingly bought as gifts. Many Mainland Chinese actually like to buy these brands from overseas where vari-ety is wider and prices are lower.
As the number of casino players and luxury products increases, so does the business for some pawn shops downtown. Macau’s pawn shops offer loans to individuals using personal items as collateral. Often open 24 hours a day, these shops are often found on streets next to casinos. The typical symbol of a pawn shop in Macau is a bat grabbing a round coin. Inside these pawnshops you can find brand-
ed watches, jewellery and other accessories left behind by those who just can’t beat the house. This is an easy way to get credits – just pawn away the luxury items that you had just bought.
An expanded gaming market has also injected some excitement in the luxury car market. There are now many different types of super-luxury cars on the streets of Macau - Rolls-Royce, Bentley, Porsche, Ferrari, Maserati and Lamborghini. The number of luxury MPV (multiple-purpose vehicle) is also on the rise. These cars are often bought by companies to service the VIP guests. They are also bought by individuals who have profited from the impressive growth of the gaming market (VIP in particular).
Precious casino players play a huge part in the growth of Macau and its marketplace – not just in gaming but also in other economical-ly-related areas. Undeniably, they have become a part of Macau’s bloodline and a formidable element (both in positive and negative ways) to the sustainability of Macau’s economic and social develop-ment.
* Desmond Lam is an associate professor of marketing at the Uni-versity of Macau. He can be contacted by [email protected].
Precious Players By Desmond Lam
iGaming NewsBetfair news for JulyBetfair have had a busy month with news and all. So here we go with a review of what Betfair has been up to for July;
Betfair get snookered Betfair, has signed a deal to sponsor the World Snooker’s new European Tour this season. The European Tour is a series of six events over the next few months, capi-talising on the sport’s burgeoning popularity across the continent. It will be known as the Betfair European Tour with each event broadcast on Euros-port. The six events, which form part of the Players Tour Championship series, are: 1.Paul Hunter Classic, Furth, Germany August 23-26 2.Gydnia Open, Gdynia, Poland, October 5-7 3.Belgian Open, Antwerp, Belgium, October 19-21 4.Bulgarian Open, Sofia, Bulgaria, November 16-18 5.Scottish Open, Ravenscraig, Scotland, December 14-16 6.Munich Open, Munich, Germany, January 4-6 World Snooker Chairman Barry Hearn said: “We are delighted to bring in Betfair as the sponsor of the European Tour. Just like us, they are targeting emerging markets in many areas of Europe, and this tour will provide tre-mendous exposure for their brand. “Each of these events will receive extensive television coverage from Eu-rosport and the viewing figures are phenomenal. We are extremely excit-ed about the potential snooker has on the continent in the coming years. These events will attract the best professionals and amateurs, providing great opportunities for the players. And for the passionate fans in places like Bulgaria and Poland it’s a chance to see the world’s leading stars compete.” Matt Robinson, International Director at Betfair, said: “We are delighted to add World Snooker’s new European Tour to our sponsorship portfolio. The tour visits some key European markets so it’s a great way to raise awareness for our brand. We’re excited to support a game which attracts fans both old and new.”
Betfair considers legal action against Cyprus rulingBetfair is reported to be considering legal action against the ruling to ban online gambling in Cyprus. After the country’s parlia-ment banned online casinos and poker, Betfair believes the legislation contains serious flaws and, in certain areas, is inconsistent with European Union law. Core Betfair generated approxi-mately 4% of revenue from Cyprus in its last financial year and this revenue made a contribution of approximately £9m before allocation of central costs. Betfair says it working with advisors to understand the potential implica-tions on its business and will be taking all necessary steps to reduce the impact on profitability through both legal action and cost management.
Betfair & Horseracing industry sign deal worth £40 million
Betfair and British Racing, have signed a landmark five-year commercial agreement worth at least £40 million to the racing indus-try providing a template to help secure the long term funding of British Racing. Over that period, Betfair has agreed to pay British Racing 10.75% of all revenues on the sport from its UK customers. The agreement also contains substantial guaranteed minimum payments reflecting both parties’ confidence in the strength and growth potential of British Racing. British Racing has made commitments linked with these minimum pay-ments that ensure a minimum number of fixtures per year. Betfair’s betting data will be used to help construct a fixture list that will optimise British Racing’s attractiveness as a betting product for punters, the racing industry and betting operators. The agreement therefore aligns Betfair’s interests with those of British Racing in seeking to increase revenues derived from a thriving horseracing industry. The five-year agreement will replace Betfair’s current annual voluntary Horserace Betting Levy payments, with the agreement taking effect from the 51st Levy Scheme covering 2012-13. Betfair has already made upfront Levy payments of £6.5 million for 2012-13 which will be offset against pay-ments due under the new commercial agreement. The agreement is the first of what could become standard practice for both industries. The Department for Culture, Media and Sport (DCMS) has indi-cated that it intends to consult in 2012 on proposals to reform or replace the Levy, which could include options to require all betting operators li-censed in Great Britain that take bets from British customers to enter into their own commercial deals with British Racing.
Betfair pick a winner in Beach Volley BallBetfair had sponsored them previously and the betting company obviously knew a good thing when they saw it, as the UK womens Beach Volley Ball Team won their first match at the Olympic games, when Duo Zara Damp-ney and Shauna Mullin won their opening match against Canada at Horse Guards Parade.
Betfair who clinched an advertis-ing deal with the British female beach volleyball team that will see QR codes placed on players’ behinds. A QR code was printed on the back of the sportswomen’s bikini bottoms that will direct users to a Betfair website when photo-graphed on a smartphone.
Zynga CEO Mark Pincus on the future of the companyWith social gaming giant Zynga perched on a seeming preci-pice, we talk to the company’s chief executive about the birth of his business and the future of mass entertainment Zynga is in trouble; at least, that’s what the markets tell us. The dominant western force in so-cial gaming, the company that brought us the all-conquering agricultural sim Farmville and its many spin-offs, has just de-livered second quarter financial results that fell far short of ana-lyst expectations.
The result: an almost 40% drop in share value, and many leer-ing, gleeful predictions of disaster and decline. For its own part, Zynga has come out and attacked Facebook, which still houses most of the software developer’s key games. John Schappert, the company’s chief operating of-ficer, claimed to analysts that changes to the social network favoured newer titles, leading to a drop in user engagement for legacy brands such as Zyn-ga’s Ville titles. Others argue that the Facebook gaming fad is losing traction, with players swarming to mobile.
At the centre of the maelstrom is Zynga’s compellingly contradictory found-er and chief executive, Mark Pincus. This 46-year-old Harvard MBA gradu-ate is a serial entrepreneur in the Silicon Valley tradition, launching a string of digital start-ups from early web service FreeLoader to formative social network, Tribe.net.
He would also like us to see him as a keen gamer, in both the classical and digital senses. When he gave a speech to introduce the Zynga Unleashed press event in June, he spoke about his childhood in which regular and vi-ciously competitive family charades sessions would often terrify guests with their intensity. Later, at high school, his friends wrote the message “Anyone want to play Atari?” under his yearbook photo because he was obsessed with console games.
He claims, however, to have fallen out of love with the medium in the 90s when the emphasis turned to single-player adventures and anonymous on-line competitions. He liked the social element, he liked playing with friends. Besides, he was too busy launching businesses.And eventually, that’s where Zynga came in.
Formed in 2007, and originally housed in an old potato crisp factory in an industrial quarter of San Francisco, Zynga was one of the first developers to understand the commercial possibilities of Facebook. With less than 30 staff and a handful of venture capital investors and partners, Pincus started working on very basic casual titles that could run within the social network; a poker game and versions of classics such as Boggle and Risk.
At the time, there were plenty of other developers doing the same sort of thing, but Zynga understood better than most of its rivals the importance of social connectivity within this environment. Its titles allowed players to invite their friends into competitions, and to meet up and chat online.Plus, Pincus built in an ad model that encouraged its users to visit advertiser
sites by offering in-game currencies as a sweetener. In short, Zynga perfectly combined three potent driving forces: casual gaming, social networking and online advertising. Business boomed.
“There were two reasons I’d never pursued gaming before,” confirms Pin-cus. “One was that I’d assumed it was done – kind of like search in 1999. Before Google, everyone thought that search was finished, it was a mature business. And in 2007, web gaming was mature – the download business wasn’t growing. The second reason was, the product experience of gaming, from consoles to web, wasn’t anything that appealed to me.”
But then, along came Facebook and Pincus had a revelation – he started to think about games in a mainstream social context again. It all clicked. “Things came perfectly together,” he says. “I had a career interest in creat-ing branded consumer internet services that would matter in people’s lives.“I got involved early on in social media – I created one of the first social networks – and for me, social gaming was a natural evolution of that. Peo-ple were hanging out in these places, and just like at cocktail parties, they needed something to do together. I thought, ‘how can we fit games into someone’s life?’
“We came at it with, initially, very basic games that we all know and love. We put the social and the casual games together and all of a sudden it made sense. I think we live in a unique time – the verbs that make up our online and mobile lives haven’t been completely invented or imagined for us. That was kind of a life path I was on.”
Does he think it took someone outside of the traditional games industry to see this potential? “I don’t know,” he shrugs. “But that’s how it happened. There were other players that were doing games when I started, but they were treating Facebook and eventually smartphones as a marketing chan-nel, they weren’t building experiences that were organic to these platforms. We were approaching it as social media from the get-go, and we started everything from scratch with a dedicated focus – for other companies, this was just another business line.
“Also, our approach was so different from the traditional games industry’s in terms of how we made games. We wanted to build as we went, we wanted to lever-age analytics. Your engineering days are like shots on goal – they’re finite, and we use data and ana-lytics to inform our feature and design choices so we don’t over-build something before we know that people want it. We built only 20% of each game before we launched and the rest afterwards, while the traditional approach was build 100% and rely on staff who had world-class instincts and intuition. We didn’t have those people – we had to take a different approach.”In July 2008, Zynga raised $29m in funding and bought YoVille, a cute, mod-
Zynga CEO Mark Pincus on the future of the company (cont)approach.”In July 2008, Zynga raised $29m in funding and bought YoVille, a cute, moderately successful virtual world app for Facebook with 150,000 daily users – it would be the beginning of the company’s defining brand. From here, Pincus and his team developed their concept of simple socially connected construc-tion games, which would allow players to design and improve their own custom environments through the collection of experience points or more immediately via “in app” purchase of new objects.
A year after the YoVille acquisition, Zynga launched FarmVille, its defining title. From the outset it cleverly combined sweet visuals, compulsive activ-ity loops, and regular XP and virtual cash rewards, but the company just kept iterating and iterating until the dynamics of play and progression were perfectly tuned. Critics called it a glorified skinner box, a compulsive trap of clicks and rewards, but fans loved creating and sharing their farms. By Janu-ary 2010, the game had 70 million monthly users.
And yet, as Zynga’s detractors are only too eager to point out, the developer wasn’t the only operator in this sector. FarmVille was highly reminiscent of, among others, SlashKey’s Farm Town, another visually quaint casual farm-ing game released earlier in 2009. This would be the beginning of the de-veloper’s reputation as a serial plagiarist, happy to benefit from the innova-tion of other studios in order to boost its portfolio. Perhaps not surprisingly, Pincus sees the early success of Zynga differently.
“I think you’re defined as a company by what you choose to do and what you choose not to do,” he says. “At every juncture, we’ve doubled down on social – our fundamental belief is, our games have to be fun, but they re-ally have to be social. The unique sauce in what we do is that we hope our experiences are always the most social versions. I believe that matters more than if we have the best art or best design.”
But even in itself, this is a controversial viewpoint. FarmVille is social in that players can share their achievements with friends, but the interactions are basic and are mostly about building and reaffirming the user-base. It’s social engagement as viral marketing. Isn’t that right? Pincus pauses, then comes at it from a different angle. “You have to let people have differentiated re-lationships,” he says. “If I visit your farm, are there things that I can do with you and for you that are unique to our relationship? It can’t all be about many-to-many relationships”.
I’m not sure what he means, so he explains further. “At one end of the spec-trum, maybe a friend comes over and helps you move, or picks you up at the airport – and that’s very differentiated because they’ve given you a lot of time, in an altruistic way. At the other end of the spectrum is somebody including you on an e-invite to a party with 300 other people. Being on that invite will make you feel like more of a friend than if you weren’t invited, but you don’t feel differentiated. As people, there’s an amount of attention that we offer, an amount of thoughtfulness, and games are trying to create this other canvas for you to do that.”
And then it becomes clear. He’s talking about the exploitation, not of wide-scale social networks, but of individual relationships. FarmVille and its suc-cessors offer a huge range of virtual goods, from essential equipment to purely decorative items, and in sharing these, players are saying to their friends, I know you and I know your tastes. Zynga is positioning itself through its games as a conduit for rich interpersonal activity. Pincus’s use of language in this respect is fascinating – especially in relation
to the company’s hugely successful Pictionary-style title, Draw Something. “The more you express yourself through a game, the more I get to know you,” he says. “If you draw a picture, that’s a lot of self-expression, you’re kinda vulnerable – these are all vectors in the way we get to know each other and change our relationship status.”
This is the Facebook mindset, the Mark Zuckerberg mindset – that relation-ships are a commodity as rigidly definable as any other other business facet. The question facing Zynga is whether it’s a commodity that the company can still rely on when the focus shifts from Facebook to mobile.
If the Zynga story were a Hollywood movie, this would be the close of the second act; the point at which everything goes wrong for the protagonist.
The recent second-quarter financials, labeled a disaster by Sterne Agee & Leach analyst Arvind Bhatia, pointed to growing fallibilities in the Facebook gaming sector; and now several law firms in the US are reportedly planning to investigate the company’s upper management for insider trading after a large amount of stock was sold months before the financial results were announced.
Can Zynga survive? Of course it can. But recovery depends on the company retuning itself to the realities of free-to-play and digital gaming in the con-temporary market.
So where is this whole idea of social games heading?
In the next five years, I think you’re going to see these games evolve on two different fronts. There are the snackable titles – the Facebook poke with a purpose; being able to share a brief moment together. And at the other end there is the deeply engaged experience where players are investing a lot and sharing a hobby or a passion.
The things we do for each other in that experience might involve a fewer number of friends, but there’s more depth. There are people who have formed guilds in World of Warcraft who may have played together for years before actually meeting, but because of the adventures they had together, they formed really deep-rooted friendships.
You seem to be going along with the idea that social games are moving into a new “mid-core” era, where they’re still intuitive but much deeper and more challenging. Is this what led to more complicated titles like Em-pires & Allies?
Yeah, I think that’s it. The art of it is, the more we can bring complex game mechanics to a mass market, the more engaging the games will be. But at the same time, we have to simplify everything: the mass market has a lower attention span, they’re not seeking that experience from the outset. When I think about what would appeal to my mum – I think she’d love crafting, she’d love guilds, but I think if I called it crafting or guilds, she wouldn’t click
Zynga CEO Mark Pincus on the future of the company (cont)on it.
However, say she’s playing FarmVille and she’s really into strawberry farm-ing and some cute character pops up and invites her to join the strawberry growers’ association – now she gets connected to everyone else in the game who likes strawberries and she may think that’s awesome. It’s all to do with how we package the experience and the complexity. I think all gaming will become free and social and more accessible, and it will all grow. Currently, so many great gaming experiences are behind these large barriers.
You’ve just announced Zynga with Friends, your own cross-platform so-cial gaming service. Is this all about moving away from your reliance on Facebook?
(Pause) I don’t think we’re at a particular stage where we have to move be-yond Facebook. We’re committed to providing consumers with the best so-cial gaming experience and innovating on it, and we think that in addition to trying to make great games with great mechanics, there are opportunities to build network effects around our games that make them socially inter-esting. So, the idea is of building a single-branded interface to our network. Brands let all of us move faster – once you get to know and understand the rules of engagement, when you see that brand again, you know what to expect and how to interact. So if we can have a brand at the network level, where you get to know what a turn-based lobby is like, and all the kinds of features we want to provide, that can be powerful.
It’s strange though, that you talk mostly about the mass market and about family gaming, but all the while, the reputation of Zynga, in the wider gaming and development community, is of a ferocious and ruthless op-erator. Well, the thing we care most about is what consumers think about us. And if you talk to the people who play FarmVille or Words with Friends, their per-ception of us is closer to our own – it’s of games that bring people together and help them have a few sweet moments. I mean, you’ve seen the stats
about Words with Friends’ players – 90% like people better after they’ve played with them.If you look back at what we’ve said and done over the last five years, we’ve always said and done the same thing – what’s changed is how the industry talks about us and perceives us. I think we’ve been a disruptive presence – for a while they were saying that FarmVille wasn’t a game. We’ve just never defined ourselves by the way we’re written about or by how the industry talks about us. It’s okay to be misunderstood – as long as you’re not misun-derstood by your consumers.
But in some ways, did you consciously play that game with the industry? I mean, we’ve seen that famous quotation from a talk you gave at UC Berkeley where you said: “I did every horrible thing in the book, just to get revenues right away.” Were you going out deliberately to be a disruptive presence?
I think that … I think that people see what they want to see. People who wanted to see us in a certain light were able to build their case. But here’s what’s ironic: we really have helped define and build an industry – we’ve made it bigger for every-body. It’s bigger for EA, it’s bigger for other publishers … we’re proud that we’ve helped expand the audience for gaming. We really take a blue ocean view – we don’t think anyone else has to lose for us to do better.
So you don’t look at competitors at all then? That will be a huge surprise to some people.
There are two answers to that. We spend a majority of our time talking to our players, trying to figure out what they’re excited about and want next. We definitely look at the industry and at competitors to try to find more cat-egories of gaming that there’s heat around, and that we have overlooked. Everyone in the games industry looks at each other to see if there are hip categories they’ve missed – that’s normal. But when we look at a new op-portunity, it’s really much more about ‘is this great for our market, for so-cial?’, rather than ‘is that where our competitor is?’
Can this be true? There has been such a disparity between the way the development community views Zynga and the way it views itself – or would at least have itself viewed. In 2010, SF Weekly ran a damning feature on the company, interviewing ex-staff about its allegedly highly competitive work-ing environment and brutal business practices. An unnamed senior staff member recalls a meeting in which Pincus is alleged to have raged: “I don’t fucking want innovation. You’re not smarter than your competitor. Just copy what they do and do it until you get their numbers.”
Zynga has also been sued for copyright violation (most notably by Social-Apps, the developer of FarmVille predecessor, MyFarm, and Psycho Mon-key, creator of Mob Wars, a game not entirely dissimilar to Zynga’s hit Mafia Wars), and when the company bought de-veloper OMGPop in March, one member of the team left, sacri-ficing a huge income boost because he was uncomfortable with being a Zynga employee.
There’s an interest-ing disconnect at the heart of this, though. Pincus, despite his overtures to the gaming community, is not a games industry player – when it comes down to it, he sees
Zynga CEO Mark Pincus on the future of the company (cont)Zynga as a web services company rather than a game developer, and he plays by the rules of that more drily competitive industry.
Later in the day, during an informal group interview with the European press, Pincus is challenged once again about Zynga’s reputation for copying ideas.
“That’s a topic that goes way back in the game industry,” he responds. “But it hasn’t been as much of an issue in the web industry as there’s less art involved. If Amazon created a better buyer flow or conversion page or shop-ping cart, it’s generally assumed that eBay and everybody else will copy it.“On the web side, it’s more product management driven, it’s more clicks and flows, it hasn’t been an issue. When you get into games you have unique art work, it becomes an issue. We don’t believe companies should appropriate other people’s artwork. But we don’t believe that companies have any ownership on a category or a genre just because they were first or more popular.”
Soon, all this may be consigned to history. The company is determined to reinvent itself as an attractive place to work (it was named as one of the top employers in the Bay Area by the San Francisco Business Times – an achievement Zynga has celebrated on a vast billboard job advert that you can’t miss as you drive into the city from the airport). And right now it is also entering a new phase of its business.
A couple of years ago the appropriation of ideas became the appropriation of studios as the company purchased its way to dominance, snapping up cool studios like Area/Code and Wild Needle. But, as the Facebook games model has begun to strain, and as the popularity of smartphone gaming has risen, Zynga has had to re-invent itself. It is now concentrating heavily on its mobile business, porting over its Facebook brands and building an audience of 33 million monthly users.
And importantly, it has announced the Zynga partners programme, in which it will work with independent developers to promote their titles across its network in a revenue share model. The idea is to expand into mobile games and new genres without having to develop everything in-house and without simply buying more studios. (Given its last set of results, it may have had lit-tle choice.) So far, reports from the developers involved in the programme, including UK outfits Crash Lab and Fat Pebble, are positive, and Zynga has brought in Rob Dyer, who ran third-party relations for Sony Computer Enter-tainment America, to oversee the business.
Amid the conjecture surrounding Zynga’s financial state, and the barely concealed pleasure with which detractors have reacted to the company’s troubles, Pincus (quite naturally) is still talking about growth and ambition…
There are 290 million Zynga players in the world – is there a chance you’ve peaked? We’ve seen how shares dropped after the IPO … I mean, do you have a vision of where you want to be on the company’s 10th anniversary?
We’d like to get to 1bn monthly active users on our network – we think the opportunity is that big and if we want to be the leader in social gaming, that’s the kind of size we’re going to need to get to. Then we look at the opportunity in terms of the kind of value we deliver into peoples’ lives – we want to get to a certain size of audience, but we want to deliver something of substance.Looking backwards, movies and TV shows are virtual products, too – you can’t wear them, you can’t eat them, but if you own the disc, even if you never watch it again, you feel as though you have something of real value,
because it holds a memory. I’d like that model for us in the future – I’d like people to feel that the virtual property they own in our games has real value, and I think that’s going to be really important in the future.
But can any sort of game really take on that sort of nostalgic cache?
I don’t know … I don’t know if you’re ever going to look back on that one awesome game of, say, Settlers of Catan – but you might. Here’s what’s dif-ferent. This isn’t a single consumer experience. When you think nostalgical-ly about a movie, it’s more about the film itself rather than the person you were sitting next to when you saw it. With what we’re doing, there’s more a three-way relationship – it’s more about, did you enhance a relationship through playing these games?
For some people these are hobbies, it’s about ownership – people send us pictures of their farms. But, in general, it may be more about nostalgia. My memories of playing charades with my family have a smattering of game experiences, but they’re more about the gestalt of: “Oh we used to do that together and I miss that.” And I think that’s the sort of place social games can be in for people.
Elsewhere, Zynga has an eye not only on smartphone games, but also on the rapidly evolving concept of the second screen – this whole idea that people are always on their tablets or phones while they’re watching TV, and the notion of how this can be harnessed in new entertainment formats.In June, CBS announced that it would be running a pilot of a Draw Some-thing TV show, produced and hosted by Ryan Seacrest, in which viewers at home will be able to participate against celebrities on screen. “We’re busy people, we need media that’s multitask-able,” says Pincus. “I want games I can play while I’m watching television. 70% of Americans are on the in-ternet while they watch TV. We all multitask now and we need media to reflect that.”
At the same time, he is not content to see Zynga as a casual gaming pres-ence, he wants the dedicated gaming audience too, and he thinks he can get it. The last couple of Ville games – CityVille and FrontierVille – have added more complex simulation elements, and May saw the release of Em-pires & Allies, the company’s first social combat game.
Furthermore, one of the mobile developers in the Partners programme, Phosphor Games, is creating an action fantasy title named Horn, clearly aimed at the dedicated gaming audience. Hardcore means a more engaged user-base, which means greater income from fewer, more committed fans.“I’m bullish on hardcore gaming,” says Pincus. “As it gets more free and so-cial, it’s only going to grow. It’s already the case in Asia that hardcore games are free and much more social than here – it’s a huge growth opportunity. Our technology, our network effects, could be just as valuable to hardcore games as casual games.“And in the wide net that we cast with our titles, we do have hardcore gam-
Zynga CEO Mark Pincus on the future of the company (cont)
“And in the wide net that we cast with our titles, we do have hardcore gam-ers already – my nephews play everything from CityVille to World of War-craft to Halo 3. They love CityVille because they couldn’t believe there was a game their mum would play – they can’t get their parents to play World of Warcraft.”
Pincus remains a contradictory character; in person, he’s perfectly pleas-ant, but difficult to read or decipher. This is the guy who reminisces over charades and the classic board game Settlers of Catan, but also the guy who just sold 16.5m Zynga shares in the period before those worrying Q2 finan-cials were revealed.
If this is really the man who once stood in a meeting and yelled, “fuck in-novation”, it’s also the man who is desperate to be seen like other Silicon Valley characters, as a philanthropist and a dreamer. His script is watertight, delivered in quiet sometimes punctuated sentences. When I ask about his ambitions in this industry, the reply is earnest but also riven with the famil-iar sound bites of the smiling man-of-the-people Valley CEO.
“Oh, it’s definitely not about the money,” he says. “I think about the legacy, I talk to new hires about this when they come in. I say, decades from now, when you look back on the work you did, the sacrifices you made, what you’ll remember most is the impact it had on people’s lives – the first aero-plane journey you took when you saw someone playing one of your games, you’ll remember being talked about on Conan. Hopefully, you’ll be able to point to things that you either created or were there at the beginning, when they were built. That’s immensely more fulfilling than what profit your com-pany made.”
As Zynga faces its current storm we’ll see how true these words are – and how prepared the company’s huge but stalling audience is to follow on this slickly sentimental journey.
(Courtesy of the Guardian publication for use of this article)
