BLUE OCEAN OPPORTUNITIES IN THE RED
OCEAN OF SOCIAL CASINO
19 October 2015
Agenda
Background on me and Amaya
Blue Ocean Strategy Overview
Formulating a Blue Ocean Strategy
Tools
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LLOYD AND AMAYA
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Been there, done that
Start Up
• Merscom
• Playdom
• 519 Games
3 exits
• Merscom to Playdom
• Playdom to Disney
• Spooky Cool Labs to Zynga
Big Co
• Disney
• Zynga
• Amaya
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WHAT IS AMAYA & POKERSTARS?
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Amaya: Global Gaming Leader
Canadian-based Amaya Inc. is a global gaming leader listed
on the NASDAQ and Toronto Stock Exchange. Amaya owns
and operates the world’s largest poker brands, PokerStars
and Full Tilt. Amaya brands lead the market not only in the
offline world, but also sponsor the most successful live tours
around the globe.
$1.45-1.57B
2015 PROJECTED REVENUE
AROUND 71%
MARKET SHARE OF THE ONLINE POKER INDUSTRY
OVER $400M 24/7/365
ANNUAL FREE CASH FLOW
ONLINE SUPPORT IN 26 LANGUAGES
95 MILLION
MORE THAN 1,750
REGISTERED CUSTOMERS
STAFF GLOBALLY
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PokerStars: The World’s Largest Poker Site
“PokerStars is the dominant player in the industry due to a passion for
delivering a high-quality, secure and authentic online poker experience to
millions of poker players around the world. PokerStars has been the leader
in establishing industry best practices in areas including e-commerce,
security, game integrity player fund protection, customer service,
responsible gaming and marketing.”
140 BILLION
225,000 PLAYERS
12 LICENSES
$1 MILLION GUARANTEED
2 MILLION
$10 MILLION GUARANTEED
$200M WON
$1.36 BILLION PAYOUT
HANDS OF ONLINE POKER DEALT
MOST IN THE POKER WORLD
HANDS PER HOUR DEALT
IN TOURNAMENTS EVERY MONTH
WORLD RECORD FOR ONLINE POKER TOURNAMENT
WINNINGS IN THE SUNDAY MILLION TOURNAMENT
WINNINGS IN THE WCOOP MAIN EVENT
IN TOURNAMENT WINNINGS BY THE END OF 2015
2.8 MILLIONS FANS
AND FOLLOWERS OF POKERSTARS SOCIAL MEDIA
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WHY BLUE OCEAN
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Blue Ocean Strategy
Creating uncontested market space and
making the competition irrelevant
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Red Oceans vs. Blue Oceans
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Red Oceans vs. Blue Oceans
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Critical for social casino
Very competitive
Bloody red
Billion dollar competitors
High UA costs
And getting higher
Higher ROI competing in a Blue Ocean
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Lets start with an example
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Circus Industry
Declining industry
Expensive “Star”
performers
Competition not
limited to other
circuses but other
entertainment
options
Negative sentiment
about use of animals
in circuses
2 large players
setting the standard
(Ringling Brothers
and Barnum & Bailey
Very Unattractive!!!
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Relevant Factors in the industry
Price
Star performers
Animal shows
Aisle concessions
Multiple Show arenas
Fun & Humor
Thrill and danger
Unique venue
Themes
Refined watching
Multiple Productions
Artistic music and dance
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Redefining the circus
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Specific Actions
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Cirque du Soleil
Created a hybrid between the circus and the theatre
Retained the symbolic and glamorous aspects of
circus, such as the tent and the more breathtaking
aspects, such as acrobats
Incorporated more comfort, sophistication, elegance
and theatrical plots; this brought not only the richness
of theatre but a whole new demographic of customers
It looked across market boundaries and created new
ones
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FORMULATING A BLUE
OCEAN STRATEGY
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You must begin by reorienting
your strategic focus
from competitors to alternatives,
and from customers to
noncustomers of the industry
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Formulating a Blue Ocean Strategy
Reconstruct Market
Boundaries
Focus on the Big Picture,
Not the Numbers
Reach beyond existing
demand
Get the strategic
sequence right
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RECONSTRUCT MARKET
BOUNDARIES
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Look across……..
Alternative industries
Strategic groups within industries
The chain of buyers
Complementary products and service offerings
Functional or emotional appeal to buyers
Time
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Who are our alternative industries?
Console
games
Movies
TV
Books
Casinos
iGaming
Travel
Traditional
Games
Blogs
Sports
eSports
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Strategic Groups in our Industry?
Console Gamers
Casino Visitors
Social Gamers
Real Money Online Players
Mobile Gamers
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Chain of Buyers
Who are the
purchasers?
Who are the
influencers?
Who are the
users?
• Players
• Parents
• Friends
• Partners
• Players
They are
NOT
necessarily
the same
group
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4. Look Across Complementary Products
Products are not used
in a vacuum
What is the total
solution buyers seek?
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5. Look Across Functional or Emotional Appeal
Rational
Emotional
• Some industries compete on
price and function
• Others compete on feelings
Rational to
emotional
• Functional companies over
time become more functional
Emotional to
rational
• Emotional companies become
more emotionally oriented
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6. Look Across Time
Compare value the market delivers today to
the value that can be delivered tomorrow
This is the MOST difficult one
Who has done it? Apple with itunes
redefining access to music
Insight into how a trend can change value to
customers helps find new market spaces
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FOCUS ON THE BIG PICTURE,
NOT THE NUMBERS
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Strategic Planning
Typical Process:
Most companies’
strategic planning
processes keeps them
wedded to red oceans
The process drives
companies to compete
within existing market
space instead of
looking for new market
spaces
• Current Industry conditions
and competitive situation
• Discussion on how to
increase market share,
capture new segments or cut
costs
• Outline of goals
• Budgets and spreadsheets
• Output: a large document
where people spent time
filling in boxes and running
numbers instead of thinking
outside the box
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Alternative approach
Start by drawing a strategy canvas (value curve)
Unlock the creativity of a wide range of people within the organization
Open the company’s eyes to blue
oceans
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Reach beyond existing demand
Key component of
achieving value innovation.
Move away from:
• Focus on existing customers
• Driving finer segmentation to
accommodate buyer differences
(tailored offerings)
Look to NONCUSTOMERS!!
Focus on commonalities in what buyers value!
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Reaching beyond existing demand
Noncustomers
before
customers
Commonalities
before
differences
Desegmentation
before finer
segmentation
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Four Actions Framework
Reduce
Eliminate
A
New
Value
Curve
Create
Raise
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Eliminate-Reduce-Raise-Create Grid
(Example)
Eliminate
In-app purchases
Reduce
Paid user
acquisition
Raise
Speed
Fun
Create
Product Placement
Subscriptions
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Drawing a strategy canvas
It shows the strategic profile of an industry by
highlighting the factors that affect competition
among industry players
It shows the strategic profile of competitors
identifying what they invest in strategically
It shows the company’s strategic profile
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Strategy canvas
Determine the important factors in the industry
(examples)
Captures the current state in the known market space
• Genre
• In-app ads
• In-app purchases
• Social Calls
• Real-World Elements
• Cross-Promotion Bars
• Product Placement
• Fun
• Platforms
• Time Killing
Reorient your strategic focus from:
• Competitors to Alternatives
• Customers to Noncustomers
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Potential canvas for social casino
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3 characteristics of a good strategy
New Value Curve
should have FOCUS
Divergence
Compelling tagline
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Thank you
Lloyd Melnick
lloydm@pokerstars.com
@lloydmelnick
Lloydmelnick.com
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