The extent to which free-to-play (F2P) games have changed in recent years cannot be overstated. When operators first began to roll these games out, they were seen purely as an acquisition tool for new customers who had not previously made a deposit. While this proved to be successful, this was not necessarily seen as a must-have product at the time.
In 2023, while F2P games are still an important acquisition tool, they are now also seen as a hygiene-factor retention tool, with operators using them more interactively within their online sportsbooks and casinos. Daily spin games in casinos have become synonymous with the vertical.
Lessons from Europe
When the US began to open up to regulated sports betting following the overturning of the Professional and Amateur Sports Protection Act (PASPA) in 2018, operators of course budgeted vast amounts for marketing, and this included F2P games, with well-known ambassadors advertising hefty jackpots.
Even now, you may still see March Madness jackpots of $50 million or $100 million, but it’s just a race to the bottom. People are now realizing you need to be smarter and more targeted rather than shouting about how you have the biggest checkbook.
The problem at that time was that the price of player acquisition was sent through the roof, when operators were doing things the wrong way round. U.S. operators slowly learned, just like European operators did before them, that after so much marketing spend, players needed to be retained. Games offering smaller rewards but on a more frequent basis have proved to be more successful, and that is now the preferred long-term strategy.
Segmentation is key
Another standout change we have seen in this space is the shift in player demographics being targeted. At first, the focus was very much on the young adult male who was a more casual player, placing weekend accumulator bets on football. The difference now is the games can be targeted to a much more active user base.
This ties in with how the next stage for F2P games could hinge on clever segmentation. Different players could see different jackpots and games to suit their tastes and, of course, bankrolls. They could be a VIP or a non-depositing casual bettor. We are seeing this more in casinos at the moment, where players are being segmented based on their value, so why should we not also see that in sports betting?
When I worked in a similar capacity for leading F2P games provider SportCaller (acquired by Bally’s in early 2021), some of the games had 20 percent of their player base made up of VIPs, because they were engaging and rewarding. The rewards could be ringfenced for VIPs, and that ultimately leads to greater engagement and retention across the board.
F2P teams as standard
One of the other trends we are seeing in F2P games is a desire for operators to develop their own technology for these games or build extremely close relationships with trusted suppliers. Previously, you had situations where operators decided at the last minute they wanted a game for the World Cup, so they would look at the roller decks and ask how quickly a supplier could make a game, because they needed it right now.
More recently in the space, we’ve seen some interesting innovations and advancements, such as F2P aggregation platforms. The idea is there could be one flexible gateway, ultimately to the entire F2P market, via one integration.
No matter how they want to play it though, operators typically have a core team that needs reliable tech which allows them to roll out games in a short amount of time. This is where the value of an experienced supplier comes into play, because integrations between an operator and a supplier are vital when it comes to segmentation.
Changes have been made to the backend of games to improve performance, and we would expect that to continue. The sophistication should be under the hood, but the game concept itself must be simple for enduring success. The inclination at times can be to run the most interesting game idea, but in fact it’s the games with the best execution that prove to be the most successful.
This could include tight-knit integrations with the sportsbook and casino, strong CRM campaigns, a well-managed player lifecycle journey and effective customer segmentation. These are the things that will take a poorly-performing game achieving 40-50 percent week-on week player retention to 80-plus percent each week. Similarly, the conversion to real-money betting might be as low as 2 percent, but with some of these key changes, this can improve to 15-plus percent.
The next steps
Going forward, with regulations getting tighter, operators will need to define their F2P roadmaps and strategies in a very clear way. People need to rigidly define what the games and teams need to do and they will have to show value, rather than deciding on a whim to make a game around a certain event just because it’s what all their competitors are doing.
In the next five years, F2P games will be cemented as a must-have vertical across all operators. Within an operator’s app or website, we will expect to see separate tabs for Sports, Casino, and Free-to-Play. There is a graveyard of F2P games that were overthought in the early years, but as the industry now continues to demonstrate, keeping it simple is the correct approach.
