Diversify to Accumulate

Providers of services for hard gaming are turning soft

An increasing number of gaming service providers in Asia are expanding their services and content to meet the demand for soft gaming coming from the China market. PacNet for example is developing role-playing games for delivery to PCs to complement its existing mobile value added services such as casual gaming and its online lottery software.

The advantage of subscription and soft gaming formats for companies that have traditionally offered casino or other gambling games is that although they typically offer smaller margins, they appear to attract less regulatory heat from governments than ‘hard’ gaming products.

Acceptance

Shailesh Naik, of CryptoLogic, makes this point explicitly.

“We have now the ability to deliver in China games that would be recognised as gambling games in Europe or elsewhere, but are actually legal in China,” Mr Naik told an industry audience at the Asian i-Gaming Conference & Expo in Macau last year.

His colleague Ken Crouse, Senior Director, Product Strategy, pointed out at the same event that there is also typically a distinction between margins on role playing games and games of chance, even when the latter is played in subscription format.

“Margins on games of chance are typically high,” says Mr Crouse.

“Margins on games of skill and role-playing are not so high, so we would like some of those skill game and RPG customers to come over to games of chance. That latter market in itself is so large that we think this will be as big, if not bigger from a revenue standpoint than our traditional online gaming markets.”