Welcome to the second instalment of NEXT INSiDE. In this edition, we delve deep into industry dynamics, offering insights from innovative start-ups and ambitious scale-ups.
We’ll explore captivating strategies that resonate with Gen Zs and some of the ingenious solutions game studios have adopted to tackle content challenges.
Meeting customer needs
The iGaming industry is no stranger to cutthroat competition.
But competition, as inherent as it is in all businesses, isn’t a drawback. It’s a driving force that significantly influences business strategies and has forced companies, including many start-ups, to put customer-centric approaches at the forefront of their agendas.
This isn’t without reason; as any economics textbook underscores, a pivotal strategy for standing out is tailoring your offerings to precisely match customer demands.
One striking example of a company leading the charge in this customer-focused paradigm shift is Kero Gaming.
Founder and CEO Tomash Devenishek firmly believes that Kero Gaming’s platform has the potential to reshape the industry by offering personalised in-game micro-betting experiences.
“Sports betting today is highly cognitive and testing. You have to think, you have to browse, calculate probabilities, and eventually find that one thing that you want to bet on. Twitter and Instagram are not like that. Because all you have to do is just scroll your thumb and things appear,” he said.
Recognising that betting should become more aligned with the instant gratification and social elements found in popular social media platforms, Kero Sports aims to transform sports betting into a seamless, more enjoyable experience.
Yet, the firm’s innovation extends beyond its customer-facing aspects.
Kero Gaming has developed a patent-pending single model pricing system which leverages generative AI for oddsmaking simulations.
Internally known as BetGPT, the model can produce thousands of coherent variations of a specific match when prompted.
Learning from operator partnerships
Elsewhere, emerging game studios are boldly taking on the challenge of revenue generation in an ever-evolving gaming market.
Fabíola Jaeger is CEO and co-founder of Caleta Games, a dynamic Brazilian game studio established in 2013. She champions the creation of robust partnerships with operators and aggregators, viewing the journey as an invaluable learning experience.
While some partners eagerly share insights into their audience’s preferences, helping Caleta Games identify customer-favourite games, Jaeger understands that every partnership is unique.
“We’ve embraced a fail-fast culture, and although some partners readily share insights on what resonates or doesn’t with their audience, others take a different approach,” Jaeger noted.
“However, for us, it’s an invaluable opportunity to pinpoint our successful games and identify areas for improvement,” she emphasised.
Differentiation and localisation remain the keys to unlocking success, and Caleta Games has celebrated remarkable achievements in the realm of bingo games — a genre that captures the hearts of enthusiastic Brazilians, as Jaeger pointed out.
“While there is a widespread interest in Brazil,” she stated, “navigating this vibrant landscape becomes an exciting challenge when you embrace and understand the culture.”
During an interview with iGaming NEXT, Thomas Wendt, co-founder and director of Apparat Gaming, certainly agreed.
He suggested that Apparat Gaming had come to be recognised as the embodiment of iGaming with a German accent, which involves a strong commitment to quality.
Wendt, who had substantial experience in the land-based industry before co-founding Apparat in 2020, acknowledged the current challenges faced by game studios.
“We currently have an excess of content, as several major studios are releasing new games on a weekly basis,” he said.
Blending old and new concepts
Apparat Gaming has released 19 titles to date and is affiliated with almost 150 operators and most aggregators.
“Our main focus is on finding the right mix of direct integrations and aggregators, taking platform fees into careful consideration,” he clarified.
“We’ve experimented with blending old and new concepts a few times. Although the initial outlook promised only mixed results, some have proved surprisingly satisfactory in the longer term.”
Apparat plans to release a total of 25 games by the end of the year, including captivating German-themed titles such as Oktoberfest and Autobahn.
“I expected swifter progress for Apparat. Yet, navigating the complexities of German regulations, with various operators still awaiting from Germany’s GGL approval for Apparat games that have long been approved elsewhere, posed its challenges.”
Nonetheless, Wendt maintains a strong sense of optimism when it comes to Apparat’s future prospects in the market.
Targeting Gen Zs and Millennials
Competition isn’t merely intensifying among game studios; operators, both big and small, are also undeniably feeling the pressure.
Workforce reductions and restructuring initiatives are making an impact across the board, affecting companies like Hero Gaming and Kindred Group, among others.
Nevertheless, a fresh wave of operators is emerging, aiming to secure their share of the market by specifically targeting Gen Z and Millennials.
Alongside Kero Gaming, another contender in the industry is Australian sports betting app Dabble, established in 2020 and currently embracing the scale-up journey.
“One of the significant differentiating factors for businesses that have successfully transitioned from start-up to scaling up is the presence of what we refer to as a ‘B-HAG,’ which stands for a big, hairy, audacious goal,” says Emilie Jirsch, CMO of Dabble.
Jirsch further noted that upon her arrival at Dabble, she encountered a remarkable pool of talented individuals. However, she emphasised they wouldn’t be tapping into their full potential if they didn’t have a shared goal to strive for, or “Northstar” as she describes it.
“With the help of our investment partner, Tabcorp, our exec team took a proactive approach by confining ourselves to a room within Tabcorp’s Melbourne offices for two days. Our purpose was clear: we wouldn’t be leaving without formulating both an ambitious vision and a strategy that unites everyone’s efforts,” Jirsch explained.
Dabble came up with the plan to be the social betting platform that through immersive and community-based experience wins market share of Gen Z. “And that’s a really, really bold goal in a competitive market like Australia,” said Jirsch.
Instead of relying on promotional offers, Dabble drew inspiration from platforms like TikTok.
“We asked ourselves: How can we sustain engagement by delivering exceptional experiences and a user-friendly interface?” she explained.
She added that Dabble’s goal is to create a platform that players want to share with their friends within the community they’re interacting with, instead of incurring costs for customer acquisition.
Affiliates in transition
This raises an important question: With more operators recognising the need to attract a younger demographic using new methods, how will this impact affiliates?
Raketech CEO Oskar Mühlbach recently pointed out a gradual but consistent shift towards higher quality.
This shift aligns with the consolidation efforts of operators, stricter regulations, and increasing competition within the marketing sector, Mühlbach explained.
He said that as a result, Raketech is now focusing on “fewer but better products than we did a few years ago”.
However, a change in strategy at times results in adverse consequences, and for example led to redundancies at Malta-based affiliate marketing company Game Lounge during the summer months.
Most of the layoffs impacted the company’s content division.
Game Lounge CEO and co-founder Jonas Cederholm said the company was adapting its strategy to align more closely with significant individual markets.
“This change aims to improve our responsiveness to local needs, strengthen our partnerships, and create brands that genuinely connect with users,” Cederholm stressed.
Change and opportunity
As the iGaming landscape continues to evolve, it’s evident that success hinges on a commitment to quality.
Yet, above all, it’s the ability to adapt to the times and experiment with new concepts that keeps these companies moving forward while capitalising on new opportunities.
Kero Gaming founder and CEO Tomash Devenishek has challenged the prevailing notion within the sports betting industry that betting is an entertainment product.
However, he believes that Kero Gaming’s AI-powered micro-betting platform could revolutionise the industry through personalised in-game micro-betting experiences, and a patent pending single model pricing system which leverages generative AI for oddsmaking simulations.
“In the industry, a lot of people talk about sports betting as entertainment, but it’s really not,” Devenishek said at a recent Yolo Partners event in Tallinn, Estonia.
“Sports betting today is highly cognitive and testing. You have to think, you have to browse, calculate probabilities, and eventually find that one thing that you want to bet on.
“Twitter and Instagram are not like that. Because all you have to do is just scroll your thumb and things appear,” he said.
Devenishek went on: “So, for betting to become an entertainment product we have to integrate the principles commonly found in mainstream digital entertainment products.”
By emulating the social and instant gratification elements characteristic of popular social media platforms like Twitter and Instagram, he said, Kero Sports aims to transform sports betting into a more seamless and enjoyable experience.
Founded in 2019, Kero Sports has garnered attention as one of the hottest start-ups in the iGaming industry.
The company has attracted investment from both Robin Reed’s HappyHour.io and Tim Heath’s Yolo Investments.
Using real-time play-by-play data and advanced AI algorithms, Kero recommends to users engaging betting markets to place bets effortlessly every 15 to 30 seconds, eliminating the need for extensive browsing and calculations that are typical of traditional sports betting.
Making it personal
Looking ahead, Kero Sports is not resting on its laurels. The company is currently working on incorporating personalisation into its platform.
By analysing users’ behavioural data, including their betting preferences and interests, Kero Sports intends to offer a tailored betting experience.
This will ensure that users are presented with a curated selection of markets that maximise their engagement.
“There are so many good markets that we are able to produce but we don’t want our customers to scroll. We don’t want to offer 600 different markets. We want it to be one that maximises the likelihood that one is betting,” he said.
The personalisation feature will be delivered through two methods: a full product that can be embedded as a web iframe or an SDK for casino-only clients, and an API that allows partners to inject real-time micro-markets into their existing platforms.
Single model pricing
Kero has also made an exciting announcement in the realm of generative AI.
The company recently filed a patent for a unique approach, which involves training generative AI models to generate coherent sequences of play-by-play events in sports games.
The company needed a solution to provide odds on highly complex micro markets, which do not lend themselves well to traditional oddsmaking methods.
A breakthrough was achieved by leveraging AI to simulate thousands of concurrent variations of matches, from which pricing for various betting opportunities can be computed.
“One of the key challenges that we as a company face is that most of our markets are unique.
“For a long time, this has been a constraint for us,” Devenishek said.
However, the rise of ChatGPT got him thinking: “Sports and sports games are kind of like a language, with a serious of events happening, such as corners, passes, crosses, counter attacks and goals,” he explained.
Kero built a model – internally called BetGPT – that when prompted generates thousands of coherent variations of a specific match.
“Based on these results, we can easily price any micro/macro event within a match. The output was quite consistent with the dedicated multi-model approach we and the industry use.”
In conversation with iGaming NEXT, Devenishek said he believes in the future this will become the predominant “pricing method” for the industry.