By Owain Flanders
Over the last few years the industry has seen a rise in the number of content aggregation platforms available and several new ones have been launched over the last few months. But what are the benefits and disadvantages of aggregators and will it be the future of the industry? Gambling Insider spoke to a selection of providers.
RF - Rob Fell, Director of NetEnt Connect
DS - Dylan Slaney, SVP Casino for SG Digital
MP - Michael Probert, Chief Commercial Officer at iSoftBet
SH - Simon Hammon, CPO at Relax Gaming
Why are we seeing so many aggregation platforms if the main purpose is to provide a one-stop-shop for operators?
RF: Given the amount of content in the online casino sector, the regulatory landscape and the fact that player preference is getting more and more sophisticated, no content aggregator can truly be a one-stop-shop. Operators - at least the larger ones - are typically spread across many markets, with new and changing regulatory regimes in place, which take up a vast proportion of development effort.
DS: The benefits are huge. Operators can offer thousands of games through a content aggregation platform via a single integration. Content aggregation streamlines the process of offering games to players and eliminates a massive tech lift on the operator side. We know how quickly handling multiple integrations can be in the fast-moving online gaming world – aggregation platforms can take away this complexity and let operators focus on their fundamentals of player experience (including responsible gaming initiatives) and player marketing.
MP: No one can provide a 100% ‘one-stop-shop’ solution because of the insatiable appetite for new content, and this isn’t something that’s showing signs of slowing down. There is now an emphasis and relevance on market specific content.
Some suppliers offer an ‘aggregation lite’ solution, acting almost as middleware. They may offer a certain amount of content, however, they don’t provide the levels and quality of support of true value-added aggregators such as iSoftBet, which is needed to offer operators a 360-aggregation platform.
SH: The boom in aggregation is a response to how the market has developed, especially in the past couple of years. New high-quality providers have emerged with attractive offerings that ultimately challenge the pocket of dominance which ‘Tier 1’ suppliers have enjoyed for too long. Operators are keen to diversify their product offering for reasons ranging from restricted market spend and bonus capabilities to greater demand for localised content.
What is the advantage of working with several aggregation platforms?
RF: Not all aggregators offer the same thing, so from an operator side it’s about mix and matching and using the differentiating factors to your advantage. Having a sound strategy when working with several content aggregators can achieve a better mix of content, improve market access and build a good portfolio of bonus tools available to players.
DS: The sheer volume of games available to them is the number-one advantage. The more games operators can offer, the more players they can reach. These platforms aren’t just about games anymore, as supporting features have ramped up the content aggregation game. Just look at the entertainment industry, where companies like Netflix, Hulu and HBO are all vying for the best content. The model works best when you can offer a huge selection of games to a large audience of players.
MP: There’s no benefit if you can get all that you want from a single aggregation platform. Fewer contacts, fewer systems and so on. Multiple aggregation potentially offers choice of content, choice of commercials, and choice of market. The more partners you have the more you can control your access to market and control your pricing and performance.
SH: For multiple reasons, it’s unlikely that an operator would put itself in a position where it became overly dependent on a single content supplier. Working with several, however, expands choice and provides options for online casinos to tailor their offering while also ensuring they have backups if technical or price-point challenges arise.
From Relax’s standpoint, there is mutual strategic benefit in us working with other aggregation platforms as it provides both parties with an efficient route to add new content and increase distribution. Ultimately, how easy that partner is to work with, how fast they can deliver and how well they balance their portfolio will dictate whether they are retained.
With more aggregation platforms on the market, is there a risk of creating a situation where we focus on quantity rather than quality?
RF: A lot of platforms and operators have already done this and focused on pure quantity. It’s fair to say that multiple aggregation platforms enable this trend to speed up but at the end of the day it’s up to the operator to integrate, test and on board the games. Even without the number of platforms, they could still hire more developers and integrate every studio directly, but content aggregation platforms certainly make it easier for operators wanting to take that route.
DS: There’s a distinct possibility of this, particularly those looking to ramp up the games they offer quickly in order to compete. But stakeholders on all sides need to consider the key reason for choosing a content aggregation platform. Volume is obviously a huge factor, but the seamless integration of hundreds, even thousands of games is tough to beat.
MP: That ship has already sailed, but it doesn’t have to be about quantity and can, and arguably should, be about the right content for the right market. Our partners in Belgium or Portugal or Italy, for example, have access to many local suppliers via our solution, all creating games specifically for those markets and this can set us apart. Other aggregation platforms have exclusivity with providers for other territories such as Germany, and that sets them apart.
SH: Since operators today have over 100+ supplier deals releasing anywhere between 50-100 games a month, quantity would exist irrespective of the growth of the aggregation market. Aggregators can service both smaller and larger studios by giving air to new concepts, ideas and innovations, which in turn helps to stop the race to the bottom where volume is the primary focus.
Are we likely to see the aggregator bubble burst soon or are they here to stay?
RF: As we have seen on the operator side over the past three to five years and on the supplier side over the past few years, increased competition, regulatory headwinds and operational hurdles to new market entries will likely instigate further consolidation. This is also likely to happen on the aggregator side soon. A lot of existing platforms are run in very labour intensive and manual ways across many of their processes, and these will not be able to compete in a tightening regulated landscape without throwing people at the problem or refactoring or rebuilding from the ground up. Aggregators will buy aggregators. Does this mean the bubble will burst? No. It will simply mean a reduced number of aggregators offering more of the above.
DS: Content aggregation is on the rise and will be here for some time yet. It’s similar to the current trajectory of the entertainment industry, where offering as much quality content as possible on a single platform will see operators and their players respond positively. Use the learnings from your content to constantly evolve your strategy and offer responsible gaming tools and it’s a winning outlook.
MP: I don’t see how or why this would happen. Aggregation is there to serve a need and has done a great job of doing so for many years, however those aggregators that don’t create additional value will soon fall away.
If we didn’t add value, then no one would use us. We aim to not just save integration time, but also add value on top of our GAP platform. If you don’t do that and offer the appropriate support, then you run the risk of operators going direct and bypassing aggregators altogether. You have to offer suppliers and operators what they want in the markets they’re targeting, as well as go one step further by adding value with proprietary tools that make a big difference to player acquisition and retention levels.
SH: Since aggregation is not a new vertical it’s unlikely that the bubble will burst especially as it offers cost and speed benefits to all parties in the supply chain. What I can see happening, however, is new entrants coming to the realisation that the aggregation market is not an easy business with low margins, especially in the current landscape.
Aggregation itself is a robust business model, but it takes experience to provide the service level and reliable operation required for long-term success. Managing multiple parties, especially when the stakes are high for new studios, and the responsibility of an aggregator’s reputation for quality and delivery is on the line, means that the pressure is on. It’s a resource-heavy business and all parties need to pull in the same direction to succeed. Those that are bolting on platforms as a perceived ‘nice’ extension could be in for a reality check.