In this episode, host Niko Vuori and guest Danny Moy, Chief Strategy Officer at SciPlay, delve into the highly competitive category of social casino. 

They discuss the evolution of SciPlay, the demographics of social casino players, and the integration of casino mechanics into mainstream games. The conversation also touches on the importance of live operations, the role of AI in game design, and the cross-pollination between real money gaming and social casino. 

With insights from Danny's extensive experience in the gaming industry, this episode provides a comprehensive overview of the current landscape and future trends in social casino gaming. The discussion also covers the challenges of user acquisition in a post-IDFA landscape, highlighting the importance of community engagement through live ops and partnerships.

Check out SciPlay on the web. You can find Danny Moy on LinkedIn. 

We’d also like to thank Heroic Labs for making this episode possible! Thousands of studios have trusted Heroic Labs to help them focus on their games and not worry about gametech or scaling for success. To learn more and reach out, make sure to visit https://heroiclabs.com/?utm_source=Naavik&utm_medium=CPC&utm_campaign=Podcast

This transcript is machine-generated, and we apologize for any errors.

Niko: Hello and welcome to the Naavik Gaming Podcast. I'm your host, Niko Vuori. Today, we have a very special episode for you. We are delving into a category of gaming that is very near and dear to my heart, having worked in it for a long time, and that is, and always has been a major driver of revenue for the industry, but it often gets overlooked and misunderstood by mainstream analysts and commentators and that category is social casino, the games that mimic land based casino games, but aren't encumbered by the regulations that govern actual games of chance. And as a result are much more free to experiment with novel game mechanics and new designs. Social casino as a category generated almost 8 billion in annual revenue last year, and is still growing at a very healthy clip around 8 percent Kager.

So to go deeper into the world of social casino, we have a great guest. It's another former colleague of mine from the Zynga days. And that is Danny Moy. He's the chief strategy officer at SciPlay. SciPlay is the social arm of scientific games, which is one of the largest land based real money gaming operators that's been around since 1973.

Play the social arm was spun out as its own company in 2019, but then it was reacquired back in 2023 and taken private again. Danny will tell us a little bit more about those dynamics as well. SciPlay generate somewhere in the region of 700 million by my industry search in annual revenue, they've got a team of about 800 across six global studios and they operate at least 11 games, mostly in the slots category. Without further ado today, I'm very excited to welcome Danny Moy, the chief strategy officer of SciPlay to the show. Danny, welcome to the pod.

Danny: Thank you. Thank you, Niko, for having me on the podcast. I think we've talked about this for a while, but I'm finally glad we can get together this morning.

Niko: Exactly. Well, I'm so glad that we made this happen. It's been a while in the making, but, uh, yeah, this is going to be a great episode. And like I said, I'm, I'm extremely close to the social casino. The company I co-founded after Zynga, where I was on poker, uh, which of course is a casino game was all in the slots category, so this is a category I know and love dearly.

And I'm really excited that we finally get to make an episode and go deep with one of the industry giants SciPlay. And of course, Danny, who's been in the weeds for a good long time. So Danny, I always like to start with the background of our guests. So tell us a little bit more about who you are, your journey through the games industry.

Obviously we worked together at Zynga, but since then you've worked at some very major names in very senior roles over the years. So you've been around and seen a lot. So tell us a bit more about yourself.

Danny: Yeah, definitely. I think I've had an interesting journey in games. So I was born and raised in New York city.

I actually started my professional career in investment banking and private equity after college. I went to NYU for college. So if there are any, uh, alumni listening here, or watching this podcast, you know, definitely give a, give a shout out or reach out. After a few years of financial services and being in New York city my whole life I was open to a change of scenery.

I moved to the Bay Area to work in tech at Yahoo and was there for almost six years. Then a former colleague from Yahoo, who was at Zynga at the time, contacted me to come meet some folks at Zynga. I joined Zynga in 2019 and that was the start of my journey in games. This is where you and I first met and worked together.

And we were at the birth of free to play and social games on Facebook, and then the start of mobile games. After Zynga, I joined King, and that was another wild ride with launching Candy Crush and other titles on the emerging mobile platform. At the time, we took King public in the equity markets and then got acquired by Activision Blizzard.

 Then we educated and supported different Activision and Blizzard franchises on how to develop and operate on mobile. So you see some of them coming to life now over the last two, three years after Activision Blizzard, King, I moved to Play Studios, which was my first true hands on experience in social casino.

 And then four years ago, I joined SciPlay as chief strategy officer and have been expanding my experience and knowledge of the social casino space.

Niko: Nice. Yeah, I think, uh, so you, you said 2019 at Zynga. I think that's, you probably meant 2009.

Danny: Oh, sorry. Yeah. Yeah, that's right.

Niko: That’s fine. I just wanted to make sure. We get the, we get the, yeah, the facts on the, on the record here. Yeah. So, yeah. So, so 2009. Yes, that's right. Long ago.

Danny: A lot of that experience is, uh, still feels, still, still feels fresh, right? So

Niko: Feels, feels fresh. Yeah. We did call, we didn't call them, you know, dog ears for nothing. You know, like the, every year at Zynga was like seven years in the real world.

Yeah, it was a, definitely a trial by fire and, and an amazing experience. Okay. Great experience obviously in the industry. Tell us more about SciPlay. So those of us who, you know, have followed social casino or have worked in social casino, we obviously know SciPlay extremely well. It's one of the biggest players, you know, by both by revenue and also by reputation and by, by impact.

But for our listeners and viewers who are not following this category as closely, who is SciPlay? Where do you come from as a company? And what have you been doing in the industry?

Danny: Yeah. So SciPlay is an industry leading developer, publisher and operator of free-to-play, social casino, and casual games.

 Our current games portfolio is heavily skewed on the social casino side, specifically towards slot games and apps. While SciPlay originally started out making CD ROM games 25 years ago, We've adapted to the different platform shifts over the last three decades from PC gaming to console to Facebook and web, and of course, to mobile now, and for the most part, SciPlay has been making social casino games this whole time, and we have a lot of people here that are super passionate about slots and video games.

And, you know, doing a creative job and bringing these two together to life.

Niko: Yeah. So I think, what's interesting about SciPlay in my opinion is that, uh, you know, you've, you've been around and you've been part of this much larger organization. It's, it's quite rare, in my opinion, to have kind of a, a legacy, of course, I don't mean this in a, in a derogatory manner at all, but like a legacy developer of, of real money, um, games or, or really any game.

Particular category of legacy product, be as able to be successful as a SciPlay has been, you know, you've obviously grown both. I think organically, but also through acquisition. I know a lot of your leadership team, , is from phantom effects, which of course was one of the early, , players in the social casino space, especially in slots.

So tell us a bit more about how SciPlay has grown. Come to be as a, an organization, where do you draw your talent from and how have you grown both organically and through acquisition to where you are today, which is, you know, as I mentioned in the intro, 800 employees, six studios, 11 titles, you know, that's a lot going on.

Danny: Yeah, so it's a good question. So even though you haven't been in the social casino space in a while, so it sounds like you, you know, you still follow a bit and. And they're up to date on what's going on. So I'll, I'll walk about, I'll talk about like the SciPlay and the journey. Like SciPlay, I mean, the origins is like Phantom, uh, EFX of what you've mentioned.

And for the most part, we have grown organically. We probably made a couple of small tuck in like acquisitions, but everything that we have, most of our products are actually homegrown and they were actually not acquired. But I'll walk you through the history of like, a SciPlay. Like for several years, I play was a publicly traded company, but was majority owned by the company.

Now it's called light and wonder. It was formerly known as scientific games. And then it was they divested a several businesses and then they renamed the, the company to light and wonder. , so as I mentioned, it was a publicly traded, we were publicly traded company, but it was majority owned by light and wonder.

And then SciPlay was fully acquired last year by Light and Wonder, and they are now. So for those who are unfamiliar with Light and Wonder, it's one of the largest global cross platform gaming companies in the world. For this audience, gaming at Light and Wonder is largely the regulated real money gaming space.

, at Light and Wonder, we are comprised of three business units. First is the gaming business unit that they And they are one of the top players that makes the slot machines that are in the real world casinos. Then there is the iGaming business unit that is producing both the slot games and the technology for online gambling where it's legal around the world.

And now Light and Wonder has us, SciPlay, as the third business unit and we are the social casino arm, as you mentioned. It's a very synergistic collaboration we have with all the Light and W Business units. In fact, approximately 80 percent of our slots inside our social casino games ported from the light and wonder gaming land business.

So players that experienced the slot game in the real casinos can also play that same slot game in a free non gambling environment inside our social casino apps. This is one of our competitive advantages, competitive advantages, you know, having popular real world gaming content inside of social casino games.

Niko: Yeah, when I was working in social casino, you know, 2013 is when we founded Rocket Games and sold it in 2016 relatively early, but not as early as like play to go or, you know, phantom effects back in back in the day, you know. 2010, basically as, as early as the, the, the app stores were around, you know, the casino games arrived, uh, the biggest driver back in those days.

And I, it sounds like still to this day was real life casino players who have their favorite machines, who know the brands, who know the machines, who know the odds, who know the return to player, you know, calculations, they either like the highly volatile ones, the classic style slot games, like that was our thing at rocket games, that was our specialty, or.

they like the more casual video slots games that have, you know, a higher return to player, but, but less volatility. Is that still true to this day in terms of who the audience is? Who are you catering to primarily, uh, as a player base, not necessarily the machines and the kind of strategic abandoned, but who's your player base?

Is it still to this day, the real life players in the casinos, or is it more, uh, Has it evolved over time into a more casual audience who has perhaps never been to a casino or doesn't even know that these are real life machines, but are attracted to them in the free to play environment on mobile?

Danny: I would say social casino players run the gamut from real life casino fans to casual gamers now, but I have seen studies and surveys that show.

60 percent of social casino players have also played in a real life casino over the last year. With Social Casino, these players get to play and enjoy real life casino content at home or on the go right on their phone. So as I said earlier, that's one of the key advantages for SciPlay. Like our players, like when we talk to them all the, we talk to them regularly.

And, you know, they always mention like, Oh, wow, I saw this like, uh, slot machine that was made by Light and Wonder in the casino. And now that you guys have it here and I can just enjoy that same experience. I could get the look, the feel, the sound. And even if it's volatility that's behind the slot machine, you know, that's what they enjoy and they want to be able to play it wherever they can, so I play, uh, players have an affinity for their favorite slots in the real world casino, and they can. You know, further develop it by playing those same slot games in our sci fi games. They know they can't win real money, but they can still enjoy that, again, that similar feeling of playing a slot machine inside it.

But I would say that the thing that where it's evolved these days is because we have so much integrated meta and live ops feature, features in our games today, we also attract the casual player that's looking for a quick and bite sized experience where they can feel like they are winning, uh, or progressing on a meta feature to chase an even larger, virtual jackpot or prize.

When we talk to some of these players, they don't necessarily identify themselves as real life casino players. They enjoy, you know, outSciPlay games for the quest, the task, the collection sets that they can gather and complete, and that sense of winning.

Niko: Yeah, this is what Slotted Mania did so well back in the day.

I mean, you know, everybody in the early days of social casino was looking at Slotted Mania. They had, I mean, if you look at it, Even actually haven't opened the app for a while, I'll be honest with you. But, but certainly when I was last looked at slot of mania by today's standards, you'd look at it and you'd say, you know, like, that's not, I mean, no knock on them, like they, the game launched in like 2010, right?

So like, you know, we're talking a long time ago, and you'd look at it today and you're like, well, it's not quite up to the, you know, the level that we'd expect, but, but what they did so well was the live ops piece. , and they did the, the meta progression piece. So, so, so well, so people who've been playing slot of mania, a lot of them have planks and.

And, you know, that loss aversion of not wanting to lose that unbelievable collection and like all the different, you know, features that you've, you know, you've gained over time, earned over time, won over time, you don't want to lose those. Right? And so I think that's, that's a big driver, in these games.

And that's actually something you can't really do in a real life casino. so I'm curious to hear how. You guys think about that live ops. I know you alluded to it just now, but like, how are you guys thinking about the live ops? Cause I think some of your games. Actually, let's talk about that now.

Let's talk about some of the, what is your oldest game right now? And talk a little bit about how that game has evolved over time. Is it continuing to grow? Is it the same player base? Are you attracting new players? Very curious to hear, because some of these games, like I said, with play to go like slot of mania has been around since 2010.

So we're talking, you know, 14 years, 15 years up. Am I doing my math right? Yes, I am. I was going to say 25 years, but it's no, it's not quite 25 years yet. No 14, 14, 14, 15 years, that's a really long time and they're continuing to go from strength to strength. So curious to hear how your guys portfolio looks at the moment and, what your oldest games are doing.

We'll talk about newer games in a second, but I want to talk about the old games first and see how they're holding up.

Danny: Yeah. So I'll, I'll oldest games and are really our largest, are really our largest and most established like franchises. So which are jackpot party, casino, quick hit slots and goldfish casino, a large majority of those names.

Niko: All right. Sorry to interrupt. But like, I know those names so well, like those were around back in the, when we were doing a Rocky games, we looked at those games for inspiration and, , I'm glad to hear that they're, they're still, still going strong, but sorry to interrupt.

Danny: And that's exactly the point. Like some of these titles are well over 20 years old. Just on mobile and even longer on Facebook. So as you, you know, as you've alluded to, have you seen social casino? It is, is very evergreen and can be very sticky. So we have player cohorts that have been with us from the launch of the game.

So these are, you know, remember the game launched well over a decade, right. And we still had the, those same players still playing. And in fact, each year they're playing, you know, if not the same, a little bit more, and also the lifetime value that we're driving them continues to increase. Yeah. And what I always find fascinating is that all of our social casinos started out as that real life casino brand that players loved.

And we have evolved that single title experience to a full social casino and casual game experience. So what I mean is, So if you think about it, like social casino back in the early days was just about, was just about the, the core slot machine, right? It was just about, you know, playing and spinning slot machines and trying to win and build your virtual chip balance.

But over the last decade in the social casino games, and especially in, in the SciPlay games, we have evolved that to, you know, what we see in, in other, I would say, free to play social games in general, where all this meta And LiveOps is now built around a core loop and these in game economies are derived and need constant balancing.

So, so what this means is a player is still spinning the slot machines, but in doing so, they are trying to progress or complete in a leaderboard, a tournament, a collection set, a time limited task, maybe a community like, , social competitive event. So, so social casino games are, are now much more than the original core loop of like slots.

Like we've built a bunch of like game loops on top of game loops and top of game loops But all of it is, you know still driven by the core, you know, slot, uh spinning

Niko: Yeah. And if we'd look at the industry more broadly, like that, the casino mechanic, even though I think a lot of industry observers look at casino games and always have looked at casino games, I alluded to this in my intro and, and kind of, you know, they're kind of a little bit snobbish even about it, which is like, well, why would anybody want to play those games?

But it's like, it's entertainment, just like anything else. Like, why would anybody want to watch Bravo shows? You know, reality shows like. Well, there are, you know, a lot of people's dirty little secret. You know, they, they really like that stuff. Right. , and I think what's interesting is that a lot of those features that, that make casino games, social casino, or, you know, real life casino games, or just call it casino games, make them so sticky.

, they're making their way into a lot of other products. And I think no better story and no more relevant story than monopoly go right now, which of course. Is at its core, a slot machine, right? Like that is actually a slot machine. If you look at that game, that is nothing more than coin master coin dozer game, like elevated through IP and a lot of razzle dazzle, a lot of wonderful and animations, the sounds like those are so important in real life.

Cause you know, as you go there, like everything is sounds around you, right? Like that auditory experience is incredibly powerful. So let's talk about monopoly go, because that is to me like an unbelievable success story of. What is a casino game, right? Like it's hidden quite well to the casual observer, but it is actually a casino game.

So talk to a little bit more about what those trends are that you're seeing of casino mechanics, casino games, essentially making their way into the mainstream and becoming much more accessible to a much larger group of people who would never consider themselves actually a slots player or a casino goer, but they will absolutely play Monopoly go because.

It's fun. It's really good. It's really engaging.

Danny: Yeah. So, you know, I personally don't think, uh, a monopoly go as a traditional social casino game, like what you and I talked about in like, trying to simulate that casino experience. But with that said, it does leverage social casino mechanics to engage and, and, and monetize their players.

Obviously, you know, for example, the core dice rolling, right. It's supposed to be a chance based outcome and no skin, , sorry, no skill similar to, you know, a slot machine. And they do a good job playing on the, I would call it the high risk, high rewards, uh, player psychology. Right. Uh, especially with the multipliers.

So, you know, if you're using the multipliers and monopoly go, you know, it gives, it's supposed to give the player the anticipation of winning or earning a big jackpot, like when you use bet multipliers in social casino. so Monopoly Go is, is definitely a good game, you know, especially if you want that monopoly, like big money.

board game feeling going through the ups and downs of, you know, building property and collecting rent. , but I don't think of it as a traditional social casino game, but yes, it does utilize different social casino mechanics, , in psychology and in those mechanics, like, you know, like what you just mentioned, you know, it's not just in Monopoly go, like it's starting to, it has been right in other like social games too.

Like, Where it's trying to get you to, it's not wagering, you know, money, , or virtual currency a lot of time. It's like, okay, I'm going to, you know, wager my, my characters in an RPG game. I'm going to wager my lives or I'm going to wager my boosters. And. It's trying to, you know, get a player to be more engaged and saying, okay, if I wager more of this, or I play more of this, I have a potential, you know, bigger, bigger loot, you know, that I can find or a bigger, you know, dungeon raid that I can go and try to tackle and find.

Niko: Yeah, I, I mean, I obviously agree with you that it's not a AirQuest traditional, social casino game or casino game more broadly, but, but, I'm going to push back a little bit on on what you just said there, which is I really do. I mean, it is essentially Coin Master, which again, Coin Master is also not a traditional social casino game.

It's an evolution of chance-based gameplay, but has been able to attract, through You know, what are essentially games of chance mechanics slot game mechanics, multiplier mechanics, like you said, they're, a broader audience that wouldn't consider themselves a slots player and wouldn't actually even play a slots game.

Probably wouldn't enjoy a slots game, but will enjoy something like coin master or, or, or a monopoly go, um, it from your perspective at SciPlay and putting aside the, like, obviously you guys operate a portfolio of mostly Classic air quotes, classic slots games, because you have the IP, you have the actual real life machines, but putting that aside for one second, is that a broader trend you're seeing?

Is that something you guys are tapping into as well, expanding beyond your traditional slots, games, and the slots IP into more casual. More hybrid type games of chance gameplay, such as a coin master or monopoly go now, of course, with the IP that they've been able to layer on top of that mechanic.

Danny: Yeah. It's something that we always, keep an eye on, but you know, one of our biggest, strategies and focuses to really, you know, focus on the existing games because what we find is the existing game and social casino is so evergreen. And also the data is also telling us that. There's still a lot of headroom for growth.

So, you know, we're doing everything that we can to continue to innovate in the existing games, so we're constantly releasing new content every couple of weeks. We're offering like new slot machines, to the players, and we're also innovating, constantly on the live ops and the meta features that we put into our games every month or every quarter or so, and trying to integrate that with the live ops.

So, so I think right now, right now, like the big focus is still on, on, on the slot portfolio and, and continuing to grow that because, you know, we've been able to show that, Hey, we can continue to grow this, you know, double digits, uh, every year. So let's, and we're in, in, we're a very player focused company.

So that's what we talk about a lot inside this company. So don't forget about servicing these players that you've had, that been with you for so long. And also go and try to reactivate some of the prior highly engaged players and, and really focus on growing that at the same time, you know, we're still trying to find like new players.

Yeah. We don't focus like on the old strategy, which was in social casino, which was. Okay. Try to bring in the player, monetize them, you know, um, you know, user acquisition is different these days, right? As you know, so that strategy is, is, is not going to work in, you know, you're probably not gonna be able to drive long term profitability, over time.

So, so our strategy is really like focusing on the existing games, continue to sort of try to grow that, but, you know, you know, keep moderating and see where, you know, these emerging, I would call it, you know, like you said, chance based simple core loops are coming on. And seeing, Hey, can we apply the, the engine that we have, like that product and, knowledge and engine that we have in terms of meta and live ops on top of that, what we think is a simple chance based core loop and, you know, see if we can develop a new game out of that.

Niko: Yeah. Yeah. So that's, that's actually interesting. What you say there, it makes sense, obviously your background as a company is, is in the real money world. , and if you're continuing to grow at double digits, then why not, why not focus on your existing player base? , and of course it's shows respect for your, existing players, you know, people who have been playing in the casinos on a certain machine, you know, for decades who want to continue to play on, on mobile.

Yes, obviously you should make sure that that player has, has a satisfactory and enjoyable journey and continues to, to engage.Wwhich brings me to, another question, which some. Social casino companies, a lot of social casinos start, let's, let's start with us, a lot of social casino startups that were, had nothing to do with real money.

Gaming didn't come from land-based casinos. Didn't have the IP didn't license the IP, you know, like, like us rocket games, like we would make games that were close to real life games, but not so close that they were actually infringing on the IP. Um, and that was kind of air quotes good enough back in those days.

Right. And then a lot of those companies were acquired. By either play Tika that, you know, obviously didn't come from that world, but, but decided that they were going to make that their thing. And they did very well out of that. Or by real money gaming operators, which were either casino adjacent or they were, uh, they, they were the owners of the IP, the actual slot machines themselves, and they were acquiring, you know, nimble mobile talent who were able to move fast and operate in this new world, the app stores, and then they basically layered Their I. P. With the team and did very well out of that. And I think a lot of that has happened by now. This would be very difficult. I think today to launch a social casino slots based start up from scratch. I think it would be virtually impossible. I would not even think about trying to do so myself now. , so long intro here.

But I think the question I'm getting at here is how much are you leveraging your real money slash land based Operations, in terms of trying to do cross pollination, right? Like, are you promoting the free to play products in casinos or adjacent to your actual real life IP, wherever that might appear?

That's really what I'm getting at here is like, how much are you doing of that cross pollination? You said you've got a lot of synergies across the three different groups that you operate. How much of this is that being leveraged in both directions? I think is what I'm thinking about here is like from the real money to the free to play and then vice versa from the free to play to the real money.

Danny: Yeah. So we're starting to lean into that a lot more. So I already gave you the example of where, okay, the real life casino content, you know, from light and wonder, we get to have that inSciPlay. Right. So that's a, that's a competitive advantage that we have already.

Niko: Just huge. I was so jealous of anybody back in those days when we were doing Rocket Games, who could actually use real life kind of give me like, Oh my God, that is so much better.

Like that is, that's the real deal. That's the real thing. Right. So that is huge. People who don't understand this. This space who don't, you know, people who are in gaming, but don't necessarily understand social casino, like the power of IP, you know, we talk about IP and gaming all the time, whether it's like game of thrones or Harry Potter or whatever, like it is powerful, but in casino, it's almost even more powerful because the players who know quick hit slots, they love.

Quick hit slots, they absolutely gravitate towards that IP and it is unbelievably powerful as a motivator. And as a driver, when you see that and you hear the sounds that you associate with that game, boom, it's like, it works. It works really, really well.

Danny: So the second thing that we're trying to like, um, going back to your question, like college cross pollinate, it kind of reminds me of like the days when we were at Zinger trying to do all this, like, uh, you know, cross.

What we call cross promotion, right? Whenever we like launch a new game, um, so here's like another, , kind of light example of it. So in, in the, in the real casino floor, you can play quick hit slots. Like you said, now today. We have sort of like a, uh, a side quest that's with it now saying, okay, if you go and achieve or do X amount of spins in the real life casino, and if you go and, , go play the, the soul, the same game, the same IP call it like huff and puff as well, uh, which is one of our popular, like, , slot machines in the, in the social casino side of quick hit.

If you complete that task, then as a player, you can earn like a raffle, you know, for, for like a new car or for some other like big prize. So we're starting to explore more of those like real life, and kind of digital, like free to play, like integration. , another example of how, where it's the other way around where social is, you know, cause we talk a lot about how like real life casino, real life IP is helping us on the social side.

Right. But now. We also have a partnership where we're helping the real life casino, um, or the real life gaming business that's developing the content and how we're helping them is that we're leveraging the, we'll, we'll test things in our social casino apps first. So we'll, we'll do like designs of like new slots.

New slot machines and potentially new math. And we'll test that on our players because, you know, as you know, on mobile, we can test a lot quicker, get the data a lot quicker and iterate to find out what potentially, will stick. And then we'll inform the gaming side and saying like, Hey, we think this type of design.

It's actually, you know, has a high probability of success. So you may want to go and try to design, you know, this type of a slot machine with either this type of theme, you know, with this type of art, maybe with this type of math and volatility or this type of like animation or sound, because as you know, on the, on the real gaming side or the land based side, they can't really do AB testing, right?

They got to, they have this kind of like the console world, right? They're going to design the game, put it out there and hopefully it sells. Bye. You know, after you put it out there, you can't really go and AB test anymore. Especially in the regulated market.

Niko: Yeah. I mean, I was going to say on the, on the land-based side, it's even harder than on console.

I mean, on console, at least you can kind of mess around a little bit on the back end.

Danny: And, you know, you might be able to do a patch, right. Or maybe, okay.

Niko: Right. Exactly. But once you put them, exactly. Once you put the machine out there and it's regulated, like you can't make any changes to it. So, which is, I mean, that, that, that was what, It's a both a blessing and a curse, I think, because everybody is impacted the same way.

And so if you're, you know, you're competing essentially in a level playing field with all the other operators and, you know, mathematicians designing the machines and the volatility. But at the same time, as a free to play designer and a mobile app developer, it's. To me, it was, you know, it would be frustrating, I think, not being able to do some A B tests or, or try to, , you know, tweak things on the back end, , to, to make them more effective.

, so, okay, so understood. So that's interesting. So you've got kind of a, you do have a two way street going on here, where both sides, you know, you benefit on the free to play side from the IP, of course, which I've now been, we've both mentioned multiple times, it is incredibly powerful. I'll see you.

Huge motivator for players in the casino world. And then on the free to play side, you're offering essentially kind of a, almost like an AB testing factory, if you will, where you can kind of give the, the, the real money side, some insights into what might work. So that's interesting. Okay. All right, well, let's, you talked about math and math is one of the biggest things, most important things.

I mean, math is important in all game design, different games, of course, you know, different, you know, things. Level of importance, depending on what kind of genre you're in. But math is, is obviously very important for unbelievably important for, for slots, and casino games, it's all about the odds.

It's all about that experience of, you know, feeling the near misses and the, you know, the big wins. Right, so one of the things that I think is really interesting, I haven't seen much talk about this in the industry. And I'm curious to hear your thoughts. AI, right? Like AI is everywhere. AI to me, if at least having worked in casino and having had to balance slot machines and try to figure out what makes a fun slot machine, what makes the math work, right?

I think AI has the potential to be a massive, massive accelerant in terms of Being able to do some of these iterations how are you guys thinking about AI what are you doing on the front and what do you think the industry is going to be doing regarding AI as they incorporate I mean they have to write like I think the bigger you know if you're not using AI in your.

Your designs in your, in your iterations, like you're going to be left behind. Right? So that's what I'm curious to hear. How are you guys thinking about it? And how do you think the industry is thinking about it more broadly?

Danny: Yeah, so that's a great question. It's a, it's a big question that we, we have, um, that we discuss a lot here internally too.

So yes, AI is becoming more and more important in, in, in gaming in general, I would say in the social casino category is, is no exception. We are certainly using AI in our business. With respect to using AI to generate, pay tables and math models, or more broadly to just to build the math, behind the slots, I would, I would say we're not completely there yet.

Slot math is very complicated, and then in Social Casino, you have to account for the fact that while slots are a core gameplay loop, and you know, and that has a model and math in itself. Now, because of the evolution of social casino, there's a lot of other mad going on behind the scenes to integrate the features, the meta and the live ops events into the player experience and the overall economy.

So this is the one thing that I discovered, like every game, you know, obviously has its own economy and sub economy, but I find that in social casino, it's, it can get, you know, pretty like complex, , especially as you have a lot of, , player cohorts that are just, you know, with you for so long. And you have to now do a lot of segmentation and each segment, you know, has a different behavior and different response and different economy behind it.

So, so, you know, AI definitely, you know, we're starting to look at it to help us like kind of get a head start, but you still, you still, you still need that human, right? To make sure that the slots gameplay has to be fun and engaging, right? Because when you talk to the players, this is why they come and play like.

Hey, I get that. I get that fun in that experience. I don't think a machine today yet can necessarily help, you know, help decipher that or help you determine sort of that fun factor and all that like volatility. , but the math, you know, you know, there are models out there that we're starting to see that could potentially help you get a head start, but it's definitely still a balancing act.

You know, I would say that requires a human today. I think it's possible that it will get there at some point, but today, at least this is an area that, you know, while it's on our radar, like, you know, we haven't completely like, um, tackled yet, but we definitely have used AI in like other areas. .

That I can go into if you want on the art side, the development side and QA.

Niko: Yeah, we can talk about it in a second, but I, I, I'm just, I'm super curious because if, if I were just to do a startup, , in the social casino space, starting today, that's where I would start, right? Like whether it works or not, I don't know, but I would start with, with the AI piece and be like, okay, could I give.

Chat GPT or whatever, Jeb and I, Claude, could I give them the designs? Because you can, the pay tables are out there. Like everybody knows what the page now it can't do the audio. It can't do the, like all of that has to work together. Right. And that's, that's what makes slots. So interesting. It's like, it's, it's as auditory as it is visual.

As it is the math, right? And all of those things have to work in harmony, but nonetheless, you could feed all the pay tables of all the top machines in a certain category. If you want it to go, let's say classic slots, which is what, what we did, which is the kind of old one armed bandit type type style of gameplay, you could feed all the top games into that and ask it to generate a new pay table that is.

Different and taps into a different motivator than those. And that's where I would start. So I'm just, I'm just super curious. I'm going to peel this onion, you know, one more layer, like in terms of trying something like that, like, have you guys tried anything in that vein? It sounds like you're, you're aware, obviously, and you're playing around with AI in different areas.

And we can talk about those areas in a second, but I really want to dig into this just a little bit deeper because the math side of things, it's something that just, I have to believe that AI is going to be. Better at least at the initial phase. And then of course you plug in the human and you make sure that it works in the real world.

But, but gosh, to me, it feels like such a powerful opportunity , for a game that is so math based, like,

Danny: I agree, there definitely should be opportunities to help you get that headstart, and then see what the, what the output is, is with AI. But I just don't know if the AI can, you know, it could, it could reproduce like some type of math model.

But what you don't know potentially is, is that math model going to necessarily work, right? Is it going to be that feel that the player is going to get? I don't think has gotten there. It can't help. It can't help you truly decipher that or create that yet. That's where you need the human.

Niko: Yeah, but, but you could, I mean, again, pushing back on this a little bit, like you could do a thousand math models very, very quickly using AI, and then you could put them into kind of an existing machine existing art style that, you know, is like, you know, close enough to this, and you could essentially prototype the hell out of, out of the math models until you land on one that works.

The way at least used to work back when we were working on these is a human would have to do the math from scratch and it would take a long time. Like you would actually have to sit there like you would have to tweak all the numbers and it would be ginormous spreadsheets and it would be like slow processing.

Danny: Would you like go and watch other scenes or the videos? Yeah, go online.

Niko: Yeah. We would, we would literally, yeah, that's exactly what we did. Yeah. We would literally go, we would look at YouTube videos of machines. We would go to casinos and like, we would actually look at machines and like, see how they're playing.

The pay tables are all public because it's a regulated business. Like that, that was one of the benefits as a free to play developer. Like you could look at the pay tables and you could be like, okay, we can reverse engineer essentially what's going on, which is what all the industry does. Anyway, like you guys all look at each other's pay tables to understand what's going on and why something's working and why something's not.

And then what we would do is we would build. Big ass spreadsheets, where we would essentially put the numbers in and the variables and, you know, Microsoft Excel, like this is actually, I think, pre Google sheets even. So yeah, we were doing everything in Excel and we would have these monster models with macros and all kinds of like, you know, functions going on that would essentially spit out, , what we would then need to.

Program and code into the product itself that was very time consuming and that's why I'm like harping on this AI piece. Because if you could fast forward that process, you could have 1000 models in the time it takes you to do, you know, like before your morning coffee, no, I totally agree to

Danny: What we see, like on the art side, like with that. You should be able to say, I don't want to buy a percentage, but we'll call it like he's halfway. Right. You can at least get halfway, maybe 75 percent of the way there so that, you know, now you can free up time to do, to do other things. , that's what we see like on the art side, you know, on, on the development side and even on the QA side, it's like, okay, you know, With AI, you should be able to get, you know, hopefully a very strong headstart.

And then now with the human, you know, go and apply, you know, your sort of like review your polish and your finish and then, you know, get it to the finish line. So, you know, we have accelerated, you know, how we, , we, we try to continue to accelerate, you know, how we develop slots, , we were already on a good cadence where, , we're able to like launch something every, every couple of weeks, I think, we're always looking for ways.

And it'll probably be with, AI to help us, even accelerate that time cycle.

Niko: Yeah. Okay. Alright, well, mo moving on from ai. So you just mentioned new products and I actually did wanna talk about that anyway. You have 11 BA based on the information that I have, you have 11 products live in, in market.

 You have an 800 person team that's a lot of great resources doing somewhere around 700 million plus, I think the latest numbers in terms of annual revenue. Big numbers. How are you thinking about new product development versus maintaining and supporting the live ops for the existing products?

What? Let's start with this. When was the last product that you launched? And what are you doing right now? Do you have lots of prototypes? You know that you're working on and you kill the ones that don't look promising and you Put resources into the ones that are how often do you want to be launching new products?

Do you have a cadence that you're looking towards? I'm very curious to hear how you're balancing the older products like quick hit slots, which, like I said, was around way back when we were doing rocket games with like new products that could potentially be game changers. For the future.

Danny: Yeah. Okay. So there's a lot to unpack there.

I like to do that. Yeah. So let me say, so I think it was, so we haven't really, we haven't, I'm trying to think back when was the last time we launched and started scaling a new title. It's been, it's probably been more than five years ago, to be honest. Again, it just goes back to our strategies to continue growing the existing titles every year.

, because again, when we look at the data, there's just still a lot of runway like ahead of us, like in terms of number of players that, you know, haven't touched our games yet or players that did touch it. And for some reason they have churned. So, you know, we spend a lot of time trying to reactivate those players.

Cause we find that, hey, the LTV on a prior, you know, highly engaged player, You know, it's going to be a lot higher than trying to chase that new player, and then the data is also showing like, Hey, wow, these people have really high engagement, but you know, they still haven't potentially monetized yet.

Right. So, and there's still room for them to convert them into payers. And, and then the data has shown, Hey, even if we do convert them into payers, this is, you know, how much they're potentially spending on a, on a monthly or yearly basis. And again, we know that the way, you know, we, the way we run our games, we're not out there to necessarily squeeze as much out of the players as soon as possible.

Like, we literally just, like, try to focus on getting them to play every day and, play more, um, each, every day. And kind of indirectly that will lead to like, more opportunities. So we're really like focused on that. So it's just, and so as a result, we, we're constantly focusing on adding new content to our games and innovating on the live ops that we run our game.

So it's all, as you know, it's all about servicing that players and motivating them to come play every day. But so with that said, you know, we are, we have been experimenting with, with some new games, like new games that are, Either in the social casino category, the traditional social casino category that you and I've been talking about, or casual games that have a very simple core loop that is very analogous, right.

To social casino or like this kind of chance based core mechanic. And then saying, okay, we have all this like meta and live ops knowledge about how to incorporate that, you know, around the core loop. Again, let's make some like discipline bets, right. To see where we can find some heat and go and design and launch a new game.

We have a couple of games out there and testing, Like most developers, the first thing we test for is like engagement and retention. So, you know, we're constantly testing for that and we're seeing some good heat on that. We want to make sure that's scalable. If it's scalable, then we start, you know, working on the modernization side.

And if we can, if we can get that monetization, it's still balanced with this high engagement and retention that we see, it's going to lead to this, um, high LTV, right. That is required to cover the cost of user acquisition that it, that is just continues to increase every year. So I would say some at all, like a lot of it's just really focusing on the core games to continue to basically grow that.

But, making some, I would call it like discipline, like bets on, on some of the new games and, and, and they'll go do like the traditional kind of, , what I call like new, , new game green light, you know, phases, , that we all, that we're all familiar with in this space.

Niko: Yeah. Okay. And how do you, how do you think about staffing these, these new, new bets that you're taking? And I would love to learn a bit more about it. Sounds like if I'm reading between the lines here, and you know, if you're able to tell me that would be great that they may not actually be kind of core slots slash.

Casino, they might be something a bit more adjacent, something more on the casual gaming side, which, of course, has always been the case. Like there, there is overlap between casual gamers who want just that kind of dopamine hit of just, you know, Candy Crush or Match-3s or whatever, which, lots of things happen.

I mean, they were similar to slot machines, but obviously not the same thing. , there's always been a lot of overlap between the category of social casino and it. That type of casual match three razzle dazzle things happening on the screen type of type of gameplay. So are you, are you saying that that's, that's the direction you're, you're heading in, or that's where your bets are, or is it more, Hey, we're going to do more of the, the classic style social casino type of thing.

Bread and butter stuff that we know so well.

Danny: Yeah, I would say the large majority is going to be that the bread and butter that we know. And then again, I'm just throwing a percentage out there. It's not the exact, but another call it, you know, 10 to 15 percent of our business will be on things that are more casual, maybe casual puzzle in nature.

Again, that kind of like what you just alluded to, like things that we feel are very like. Simple core loop that can be very evergreen and could be played at a very, like, you know, fast pace, right? Like I'm not, we're not doing anything like with a dice roll or like a coin master, but you'll think of a type of mechanic where, okay, it's kind of like a, like a, like a slot machine, right?

You, the whole point is like getting people to spin, right. As, as fast as possible and as much as they can in a given day. , because that will lead to them, , progressing in other like, meta and live ops features where, you know, we drive, , a lot of the engagement for the players. , so I would say that's where the focus is, but, we, but to answer your question in a different way is, , we're, we're constantly talking to our players, so we're constantly, , running surveys, , even do like a, , a VIP program, we're constantly talking to the players to understand not only their behavior inside our games, but what else are they doing?

Right. Cause I think that they. Social casino is another form of entertainment. We're just competing for timeshare, like right on their phone or whatever screen. So we, we try to understand what else are they, what else are they watching? What else are they listening? And then to games, what else are they playing?

And as you said, a lot of social casino players do also play other casual games. And we try to understand, okay, what is it fun about those casual games that you like, And then what we find is that, okay, a lot of things that you like, those same elements, , are also apparent in either traditional social casino games or in some of these new games that we're kind of thinking about.

That play to that same player behavior and motivations. And so those are the ones that we try to, we try to go after.

Niko: Yeah. Okay. Well, that brings us to a topic that's very important, I think, for all developers, not just Solicitor Casino developers, but that's UA, user acquisition and distribution and growth.

Obviously, post IDFA, everyone's talked about this. It is very much more difficult. To do targeting now, it used to be, I mean, the way we scaled Viva Las Vegas, which was our big hit game, , back in the day was, , we did the LTV cat calculation and we did the payback periods and it was very easy to go and identify, , players, exactly the right people, literally the exact right people who would absolutely, , resonate with our game based on, , lookalike targeting on competitors and things like that.

That's, that's very much. More difficult now, obviously the costs have gone up anyway, and now post IDFA, it's even harder. So how are you guys doing UA? How has that changed this is a casino world? How has it changed your world? What is, what does use profit? What is profitable user acquisition look like now?

If I'm hearing some of what you're saying correctly, it's, you're not necessarily doing a huge amount of new user acquisition. I'm not gonna correct me if I'm wrong here, but you're maybe doing more remarketing and retargeting for laps players but tell me more in your own words about what are you guys doing?

How does it look now versus how it used to look back in the day?

Danny: So the analogy that I like to use is, free to play mobile games has always been about continuous like product innovation, testing, and optimization. And we apply that same mentality in, in marketing and user acquisition. So we're, you know, social casino did really start on, on Facebook UA, like as you mentioned, but everyone in the industry, including us, we test them by everywhere and it's just, it's just not online, we, we've been spreading with a lot with offline marketing these days.

You may have seen, seeing some of the SciPlay games on TV and out of home advertising, such as the partnership or celebrity tie in we did with Jerry O'Connell for Quick Hit Slots and Joe McHale for Jackpot Party. So again, we do a ton of research to understand where our players are spending their time when not playing our games, but also when they could be more likely to pick up a game.

Or, or reactivate in one of our games. So then we go and make an informed strategy to advertise there and measure for the returns that we're expecting there. So, so we're constantly innovating on how we, how we do marketing, just like how we're always innovating in the product to provide that player with the best entertainment experience.

 So back to your question examples, you know, we had definitely, us and the industry have definitely broadened out from the traditional Facebook UA and it's just, it's just everywhere now. Like I would say wherever you think your players are, or even if you don't think your players are, go and try to experiment with it.

And that's what we've done a lot with TV and offline and, and You know, we're seeing really good results there.

Niko: Can you share any more about kind of what percentage of your overall, you know, I mentioned that a couple of times now, you know, about 700 million in revenue, 800 person team, , any, can you share any insight on what percentage of that is, is marketing and, , you know, payback periods, , things like that.

Danny: Yeah, I would say, and if you can, yeah, you go back and look at our last, last time, you know, like actually, no, we're part of lightning one, the public company, they do this. They do disclose the, uh, the, um, publicly the segment, uh, revenue. So for, for a SciPlay, I think if you go over the last quarter, you know, we're, we're up to about a 200 million revenue per quarter.

So if you, if you just do the simple run rate out we're. We're, we're closer to 800 million. Right. I don't think we, uh, I don't, we necessarily disclose like how much we, uh, spend publicly in UA. But again, if you go back and look at third party reports, or even you look at the last time we were still doing public filings, like, , you'll see that our UA percentage is, is, is still like in the twenties, I would say in the, in the low twenties of revenue.

 And no, and I know we talk a lot about like, , reactivation and then like remarketing, but you know, there's a lot of that, , a lot of the UA that, you know, I would say, , I don't know the exact, you know, I can't disclose the exact percentage, but we're still out there, , trying to, grab new players and also reactivate the players.

So it's just a balancing act. And the way we think about it is like, we, we, we track and monitor closely every single dollar that we spend and wherever it's driving the best returns, , we'll lean into it. Like the way we, the marketing team always talks about, they're like portfolio managers.

So like investment portfolio managers, right? They're managing a portfolio of not only games, but they're managing a portfolio of, of user acquisition and retargeting channels. And, you know, our job is to basically drive the highest return that we can see.

Niko: Got it. Got it. Yep. It makes, makes total sense.

I would actually say 20 percent ish of revenue is actually, in my opinion, fairly low compared to what I used to see. And I think it's still the case, especially in the casino category. It used to be that you would spend quite, but again, it's changed. Probably quite a bit now. Cause there was a, it was a land grab back in those days.

Like you were spending as much as fast as you could to get all those new players in there. And I think it sounds like, it's, it's a much more, I mean, understandably so it's a much more mature market now where most of the land grab has happened. And most of the players are probably in the ecosystem already.

And it's mostly about making sure that they stay in the ecosystem and that if they churned the laps, you retarget them and bring them back, which, which is If I were to editorialize, that sounds like that's where the industry is right now, which makes total sense. A final question on the UA side or kind of the targeting side you said you were everywhere and you're doing celebrity partnerships with, , Joe McHale.

And the one thing that caught my eye is that you're, you're partnered with, , Austin FC, uh, football club, soccer club, and major league soccer. , how is that working? How did that come about? I'm just curious to hear how a social casino company and a You know, Texas soccer team go together in, in harmony. Tell us a little bit about how that happened and how it's working.

Danny: Did you follow soccer or football?

Niko: I do. I mean, I don't follow major league soccer, but I'm a European. And so I, I followed, I lived in the UK for many years. And so I follow premier league soccer. So I watched, on Peacock mostly, streaming on the weekends and in the mornings, I usually watch like two or three games back to back if I have the time.

So that's my, yes, yes, I do. I follow soccer. Yeah.

Danny: So the Austin FC partnership is actually an interesting one. , that partnership is actually not about player acquisition or game branding. , the Austin FC partnership is about connecting with the Austin community, , as one of the, as we're one of the top employers in Austin.

So Austin is actually one of our largest studio locations, and we want to continue to grow there and bring in best in class talent. Uh, Austin FC is actually the second most recognized and celebrated brand in Austin. And, you know, we had the opportunity and became super excited to be affiliated with that brand and, and use that, um, as a way to try to reach more potential of talent in, in the Austin area.

 But trust me as a business person, when I was working with a PR group, I was like, okay, You know, let's my, my first brain was like, okay, let me, okay. Is this about, you know, user acquisition? Okay. Let's let me model this out. Like, okay, how much is this going to cost? And how many installs are we going to bring? And what's the lifetime value on that install?

Niko: So Iwas thinking that's where my head went immediately. I was like, how do you, how on earth is our ROI? I like that cannot possibly be, you know, LTV versus CAC positive, like sponsoring a soccer team. Okay. But that makes a lot more sense. It's more about the way, right?

Danny: The ROI comes in

Niko: Different ways.

Danny: Exactly. It comes in like. You know, the talent, right, where we're all about like talent here. Um, so, you know, we look at the, the ROI, the way measure it is about, okay. How many, um, inbounds or even like the success of the outbound candidates when we go and recruit the quality of that, you know, the version of that.

So. Typical funnel way of looking at it. But, you know, this is more about like, I would say talent acquisition and retention, you know, versus typical user acquisition market.

Niko: That, that makes a ton of sense. Yeah. I mean, because of the lens I had was major league, not sort of major league soccer, it was the premier league, you know, in the UK, uh, uh, sponsorships, which if you watch it at all, you'll notice that like nine out of 10 of the ads in the stadium is sports betting ads, right.

Or gambling ads, um, both for. The UK market, but also for the Chinese market, as well. So it very, um, yeah, so that, that was the lens I had. It was like, okay, those are probably doing that too.

Danny: I would say those are,

Niko: I, I, yes, I'm pretty sure a premier league soccer sponsoring and the Emirates stadium is going to be a little bit more than, than Austin's, I don't even know what the Austin stadium is called.

So. But okay, cool. It makes a lot of sense. All right. Well, we're coming up to time here, but I always ask all of our guests. One final question, because we are a gaming podcast after all. And so that question is what three games are you currently playing or are you most excited about, and you can't use your own, your own companies?

Danny: Ah, well, okay. I don't know if I can rule it out. Three games, but I don't know if I can keep it through the game. So I do have to do them, but there is, you know, once I play a game, I'm going to quickly mention that I, that I play the most is probably quick hit slots. Okay. And then outside of our games, I do love, I do love sports and stats naturally.

So I continue to play Madden football, MLB, the show NBA 2k, , on console. , and then, you know, and I, you know, I have experience in like, the casual and match three, , category. So, and I play a lot of those games with my two daughters. So Candy Crush, Royal Match, Gardenscapes, because my daughter loves the narrative in Gardenscapes. And then my personal, like,

Niko: By the way so do I, by the way, I, I'm a Gardenscapes player and I love the narrative too. And I, I, it's, I, you know, I've never admitted that before, but I'm admitting it on this show now.

Danny: Yeah, like I see my daughter more engaged with the narrative and it's like, she's telling me like, Hey, can you help me pass some of these levels so I can unlock the keys.

Niko: Me and your daughter have a lot in common.

Danny: Okay, and then my, to be honest with you, my guilty pleasure is, and I played a lot of what I call action RPGs. So like survivor. io, I still play that. And literally last week I just preregistered for Archero 2 and I'm waiting for that to come out in the U S so I can start playing that.

Niko: All right. Well, good. I'm glad, I'm glad you're still playing games as am I, and I think all of our guests, I was, you know, if you're working in the industry, you got to keep playing games, you got to keep fresh, you got to stay on top of things. So I really appreciate that, all right. Well, that's all we have time for today.

We're right on time actually, and so Danny, I just want to say a big thank you for coming on the Nava gaming podcast. It's been a really. Fun trip down memory lane for me, at least, going back through some of the social casino, titles that I, I used to know so well, I deconstructed the crap out of them, including quick head slots, which was one of our inspirations back in the day.

So, it's been a real pleasure and I'm, I'm so glad we made this happen. And it's been great catching up with you again as well. So thank you.

Danny: Same. Thank you. Thank you for, for doing this. I'm finally glad we got together and, hopefully we can talk soon again.

Niko: Absolutely. Welcome back anytime. And if you do have any new game launches, especially if they're outside of the casino genre, I want to, I want to definitely have you back and talking about those and how they're doing and how you're leveraging your existing player base with maybe a different genre.

So definitely. Perfect. And then of course, as always a big thank you to all of our listeners. We will be back next week with more interviews, more insights and more analysis from the weird and wonderful world of gaming. So until next time, friends, feel free to send questions, guest recommendations, and comments to me.

My email [email protected].

If you enjoyed today's episode, whether on YouTube or your favorite podcast app, make sure to like, subscribe, comment, or give a five-star review. And if you wanna reach out or provide feedback, shoot us a note at [email protected] or find us on Twitter and LinkedIn. Plus, if you wanna learn more about what Naavik has to offer, make sure to check out our website www.naavik.co there. You can sign up for the number one games industry newsletter, Naavik Digest, or contact us to learn about our wide-ranging consulting and advisory services.

Again, that is www.naavik.co. Thanks for listening and we'll catch you in the next episode.