This analysis is written by Brett Nowak, CEO of Liquid and Grit, and Lloyd Melnick, General Manager at Chumba Casino.

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Post-COVID investment flows in

Social and mobile gaming emerged as one of the best performing sectors during coronavirus, and the ensuing influx of investment will likely impact companies large and small.

Among the most notable transactions was Playtika’s recent $14.6 billion IPO. Huuuge Games, another top-five operator, just announced plans to raise $400 million on the Warsaw Stock Exchange, and DoubleU Games reported in June that it intends to go public in the U.S.

To boost valuation, we expect companies to spend more on user acquisition to show growth pre-liquidity event, which would drive up costs, before returning back to more profitable levels after. Similarly, look for a wave of new titles from established companies—both in the casino and in other genres—as they strive to build growth.

Following liquidity events, adjustments to company structures will likely slow production momentarily and lead to higher employee churn, creating a pool of available talent. This emphasis on short-term numbers comes with risks, adding instability to the market and opening opportunities for smaller competitors to grow their market share.

As the casinos worldwide shut down the Casino games on touchscreen devices hit the jackpot with a nearly 50% increase of IAP spend year-over-year. The biggest winner was Coin Master that accounts for 90% of the Social Casino sub-genre revenues.

Casino gets even more competitive

Although casino downloads spiked during the peak of COVID lockdowns, the genre saw impressive +37% YoY download growth. We expect download growth will likely continue to contract in 2021 as life begins to return to normal, and that means apps are going to have to try even harder to pull away competitors’ players while holding onto their own.

An analysis of downloads shows that the Social Casino, which brought the biggest increase in revenue, was also the most significant contributor of downloads.

As the big companies diversify, small companies will innovate. The heightened competition will likely play out in two main ways:

The first is that the big publishers will continue to diversify into other genres, as seen in Playtika’s recent IPO that showed revenue driven largely by acquisitions (a tactic also adopted by Aristocrat in previous years). The potential for incoming regulations, foreshadowed by Big Fish Casino’s class action settlement, increases the incentive for companies to originate revenue outside of the casino genre. Likewise, states like Pennsylvania (edit: already allow real money gambling) and Michigan are moving to allow real money gaming (RMG), further squeezing the free-to-play casino audiences while also potentially creating new opportunities for social companies to expand into RMG.

The second is that smaller publishers will try out a lot of new approaches to grab players’ attention, while larger apps fast-follow those that seem to work. A good example of this is Huuuge, which focused on social features and was able to carve its spot in the highly competitive market to a point where they are now a big publisher diversifying into other genres.

Hub worlds are coming

In addition to trying to acquire properties in other genres, apps will likely try to appeal to players from other genres, particularly puzzle and casual, with popular features like explorable hub worlds, homes, and other custom design areas. These spaces remain somewhat novel in casinos and create an avenue for more meaningful collections, customizable avatars, and decorations.

We believe this will be a trend across genres, in no small part due to the ongoing success of Playrix’s puzzle apps Homescapes, Gardenscapes, and Fishdom. In fact, we may see some of the puzzle heavyweights like Playrix or AppLovin try to muscle into the casino category on the strength of their hub world features—most likely in the bingo subgenre due to the difficulties of making great slots designs.

Slots

Prediction 1: Greater integration of meta-features into slots play

Meta-features are merging more directly into core gameplay across genres. This is especially notable in slots design, where meta-features and slot machines are typically developed by separate teams. Traditionally, slots play creates outputs for meta-features, but meta-features have little to no impact on slots play.

Now, we are just beginning to see slots designs that incorporate feedback from meta-features. For example, Huuuge Casino’s Masquerade Ball included a bonus that sent an invitation to all club members that allowed them to also play the bonus. Creating a two-way relationship adds meaning to both the bonus and the club feature. We expect slot designers to explore this approach at greater depth in 2021.

Huuuge Casino’s Masquerade Ball included a bonus that sent an invitation to all club members that allowed them to also play the bonus. Creating a two-way relationship adds meaning to both the bonus and the club feature. source: Liquid and Grit — Huuuge Casino’s Masquerade Ball included a bonus that sent an invitation to all club members that allowed them to also play the bonus. Creating a two-way relationship adds meaning to both the bonus and the club feature.

source: Liquid and Grit

Prediction 2: Player-controlled bonuses and stories

Letting players make choices that affect outcomes will be one of the main ways that new machines try to distinguish themselves in 2021. Emphasizing player control has the twin benefits of helping machines stand out and broadening audiences to non-traditional slots players.

Look to see an increase in customizable bonuses that let players select specific perks and story mechanics that progress based on players’ choices. The latter is a particularly new approach and is something we expect to see grow across genres next year.

SlotoStories Get Me a Price in Slotomania allows the player to customize their machines and make the game look like theirs. Source: Liquid and Grit.

Prediction 3: Machine-specific currencies and progressions

Along with the rise of player choice, we also predict there will be a related increase in machines that have their own currencies or progression goals. Event- and content-specific currencies is a trend we’re across all the genres.

Collection progressions that are unique to each machine give established players fresh goals with every release, and currencies facilitate customizable bonuses and other compelling choices. Machines will effectively begin incorporating smaller, self-contained versions of many of the meta-features that have traditionally occurred within app lobbies.

More focused machines, less kitchen sink slots design

As slots try to stand out in an increasingly competitive market, they’ve begun using more novel marquee mechanics to draw players in. We expect slot designers to showcase these attention-grabbing mechanics by embracing more streamlined approaches without a lot of unrelated extras, ensuring that players can access the novel gameplay with relative ease. Along with this, there will likely be a corresponding decrease in machines that rely on stacking many conventional bonuses on top of each other.

Last Year’s Predictions for Slots

(correct) 2020 Prediction #1: Slots will continue to face downloads market size stagnation issues in 2020, but will maintain their steady revenue growth rate - just at a lower intensity.

(Unverified. Funtrio is a very secretive publisher that is hard to track on Sensor Tower)
2020 Prediction #2: Funtrio will end 2020 in the top 5 slots publishers by revenue market share, likely beating out Huuuge and probably Scientific Games.

(correct) 2020 Prediction #3: Playtika, Aristocrat, and Scientific Games will fight to maintain and/or gain market share with improved live-ops on existing slots titles, and 1-2 new slots title releases.

(correct) 2020 Prediction #4: If publishers choose to innovate on slots gameplay while still keeping it close to traditional slots design, it will be through sub-genre mashups that have a high audience overlap. Else, just more re-themed slots game incoming.

Bingo

Bingo Blitz dominates

Bingo continued to be the most asymmetrically dominated subgenre in 2020, with Bingo Blitz being over five times bigger than the second biggest title Bingo Bash.

The casino-wide download wall seems to be hitting bingo the hardest. Almost all top apps saw downloads shrink substantially this year, although Bingo Blitz saw the smallest decrease. So while Bingo Blitz may see some loss of revenue from long-time users looking for something new, don’t expect to see any big changes on the charts.

Prediction 1: Longer progressions and persistent leveling across multiple events

Bingo players tend to be more escapist than other casino player types, and this can be seen in the genre’s trend of long map and collection progressions. Now, the subgenre seems poised to embrace year-long seasons of events that maintain players’ progress throughout.

We first saw hints of multi-event progressions in 2019 with Bingo Blitz’s Euro Bites collection feature, which promised to carry ranks over to subsequent cooking events. This year, Bingo Party’s Card Album made persistent progression even more explicit with four events that maintained players’ levels throughout the whole year.

Escapism seems to be one of the key motivators of Bingo players. The Card Album progression in Bingo Party is a perfect example of a feature that plays into this player motivation. These longer calendars prioritize retention over user acquisition, w… — Escapism seems to be one of the key motivators of Bingo players. The Card Album progression in Bingo Party is a perfect example of a feature that plays into this player motivation. These longer calendars prioritize retention over user acquisition, which makes sense in a subgenre that is more or less stable.
source: Liquid and Grit.

Prediction 2: Mini-games that players control

In addition to their preference for escapism, bingo players also desire a higher degree of control. As a result, the subgenre is something of an incubator for puzzle or skill-based mini-games, which often take place of reward collection stages. In mini-game designs, look for apps to chase greater novelty as they compete for the attention of a fixed player base.

Feathers & Dragons Happy 2020! From Bingo Blitz is a great example of a minigame feature that offers novelty for the players.

Last Year Scorecard (3.5/4)

(bingo!) 2020 Prediction #1: Downloads and revenue will continue to grow in 2020, with heavy influence from Bingo Blitz — particularly if Playtika is pushing for an IPO. Hard-charging apps Bingo Showdown, Bingo Pop, and Bingo Scapes will also have a hand in this growth.

(half-point - Bingo Party kept its lead but Bingo Journey entered top 5)
2020 Prediction #2: Bingo Scapes (Bingo Journey) will likely surpass Bingo Party to become the fifth highest-grossing bingo app, while Bingo Showdown and Bingo Pop will duke it out for the third position.

(bingo!) 2020 Prediction #3: Product innovation in Bingo apps will be an even bigger factor than it was in 2019 as Bingo Scapes continues to prosper by implementing the latest trends in mobile games.

(bingo!) 2020 Prediction #4: Product teams of top-grossing casino apps will continue to shift their investments toward events over features. On average, these events will become longer and more complex, sometimes incorporating a save-progress mechanic that is already emerging in the market. Apps will continue to invest in collections and challenges, but mini-games and competitions will become staples of successful event calendars.

Poker

Prediction 1: Opening the lines of communication

Poker didn’t see much disruption in 2020, with one notable exception: Poker Face’s revenue grew +1,993% YoY, making it the fourth highest-grossing poker app on the App Store for the year compared to the 20th in 2019.

Why the bump? Simply put, they offer video chat and caught a big wave during COVID lockdowns. And while Poker Face’s revenue has declined substantially from its spring peak, monthly revenue remains roughly four times what it was prior to COVID.

Video chats are essential in lockdowns. But video chats with poker are even more essential - if you like playing poker with other people. This feature was a nice addition to Poker Face but it didn't drive long-term gains. Maybe this is partly becaus… — Video chats are essential in lockdowns. But video chats with poker are even more essential - if you like playing poker with other people. This feature was a nice addition to *Poker Face* but it didn't drive long-term gains. Maybe this is partly because in real life, you’ll only be looking at everyone’s chin due to the angle of your smartphone when playing.

Other apps will almost certainly follow suit with more expansive socialization options through voice and video chat. Ultimately, we think voice chat will win out as in-person socialization (hopefully) returns and reduces the demand for video chat. Competitive players might want to intermittently celebrate a win or gripe about a loss, but they don’t necessarily want to stare into each other’s eyes the whole time they’re playing.

Prediction 2: More visible customization to help monetize passes

For a subgenre devoted entirely to competition and a player base with strong social motivations, there’s still a lot of unexplored territories when it comes to avatar customization and rewards of social distinction.

Other mobile genres lean heavily into exclusive rewards like clothing, profile frames, badges, and even emojis for both event performance and purchases. These rewards are highly motivating and provide meaning for players besides just chip counts—allowing them to customize their experience and express themselves to others. As poker apps move to enable greater communication, we foresee a similar increase in publicly visible customization, likely as part of battle pass reward programs.

Last Year’s Scorecard

(Yes!) 2020 Prediction #1: WSOP will remain king by the end of 2020.

(Wrong!) Governor Poker holds 6th place)
2020 Prediction #2: Governor of Poker 3 will continue its growth and enter the top 3 in the sub-genre, but will not beat out WSOP and Zynga Poker.

(Draw! Spades Royale didn’t beat Governor Poker and holds 7th place)
2020 Prediction #3: Spades Royale will also continue its impressive growth and enter the top 5 in the sub-genre, but will not beat out Governor of Poker 3.

(Yes! Poker Face was the disruptor) 2020 Prediction #4: Given stagnating revenues and dropping downloads, the Poker/Cards market is primed for new entrants through directly competing products or massively disrupting ones. And if a disrupting product enters, it will have social gameplay at its core.

Social Casino

The fourth sub-genre in Casino Games is the Social Casino, which over doubled in size during 2020 reaching a whopping $830M in net revenues. And while this genre was responsible for the most significant growth in the category, it also became the most unappealing one due to the utter dominance of Moonactive’s Coin Master.

Coin Master grew net revenues from nearly $400M in 2019 to way over $800M in 2020. At the same time, the game’s share of the sub-genre increased to 95% from 90% in 2019. In other words, the market grew because of Coin Master and the growth of the ga… — Coin Master grew net revenues from nearly $400M in 2019 to way over $800M in 2020. At the same time, the game’s share of the sub-genre increased to 95% from 90% in 2019. In other words, the market grew because of Coin Master and the growth of the game didn’t lift up its competitors but took away from what little they had.

Coin Master’s growth is driven by ever improving monetization rather than the increasing volume of installs. Though of course, strong creatives and improved targeting as well as tolerance for longer payback times play an important role in also Coin … — Coin Master’s growth is driven by ever improving monetization rather than the increasing volume of installs. Though of course, strong creatives and improved targeting as well as tolerance for longer payback times play an important role in also Coin Master’s growth.

If you’re interested in understanding what made Coins Master such a beast of a game, please read How Coin Master Disrupted Social Casino and Pocketed $100M (we should update the $100M to a billion). And if you’re interested in making your own version of Coin Master, chances of huge success are very slim.

Prediction 1: Coin Master grows and suffocates all competition
Pirate Kings, Piggy Go, Thug Life, Island King… All similar games to Coin Master and all reaching a cap of around $1M in net revenue a month. Meanwhile, Coin Master gobbles up $100M a month…

edit: Board King’s from Playtika has kept its very solid +50M a year in net revenue run-rate establishing itself as the very distant by highly successful second largest in the sub-genre behind Coin Master.

Last Year Scorecard (2/3)

(Hit) 2020 Prediction #1: Coin Master will continue to dominate this sub-genre in 2020.

(Hit) 2020 Prediction #2: 2020 will see more clones entering the market and new concepts taking the stage with not just slots at their core.

(Miss) 2020 Prediction #3: Big Casino publishers will buy out successful Casual Casino titles and/or Coin Master clones, but likely not release their own.

Casino faces serious uncertainties

The social casino saw major unexpected growth in 2020 due in large part to COVID social distancing measures. However, this growth did little to address some of the underlying challenges facing casino apps—most notably, an ever-growing number of apps competing for a plateauing user base.

In 2021, we expect to see accelerated cycles of innovation and fast-follow as smaller publishers reach for new players and established publishers try to hold onto their territory. Additional outside influences—like an increased investment and new markets for real-money gaming—will create even greater pressure.

The biggest impact on the future of the genre will nevertheless come from IDFA depreciation. This impact will not cause a sweeping change. Instead, the effect will be gradual. Casino games on mobile are excellent at retaining and monetizing their audience not only via fantastic design and optimization but also due to unrivaled CRM, compared to other genres. This will allow them to hold on to their existing player base. The lack of advertiser identifier will nevertheless harm significantly new user acquisition making it nearly impossible for new mobile-first titles to burst through causing the market to slowly but surely decline on mobile — presuming a black swan event doesn’t significantly alter downloads.