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Poker Players Folding on PartyGaming?

SEO News asked 1 year ago
PartyGaming, the largest online gaming group in the world, has suffered a 33% tumble in its stock after the company made comments suggesting a slow-down in customer growth.

http://www.webpronews.com/news/ebusinessnews/wpn-45-20050906PokerPlayersFoldingonPartyGaming.html

6 Answers
aleph answered 1 year ago
Good move to allow them to pick up their own shares for cheap.

antoine answered 1 year ago
This drop is also probably due to an inside rumor that Empire Poker is planning on cutting off the relationship that they have with party gaming. Empire recently purchased noble poker and might migrate all of the players to that gaming platform.

derhammer answered 1 year ago
I think the main reason for the drop are to be found in the following sentence from the Q2 report:

“As expected, whilst the online gaming market and poker in particular continues to show strong year on year growth, the rate of growth is continuing to moderate. As it does so, the Group will continue to adapt its marketing strategy and infrastructure to provide greater focus on customer retention and player value.”

This means falling growth rate and probably higher costs to keep the market share (bonuses and advertisement). The market share fell from 54% to 51%.

The yield per active player day fell from $18,7 to $17.

From the q2 report:
“The rapid growth in new sign-ups, most of which are believed to have been more casual players, together with increasing competitive pressures which prompted an increase in the level of customer bonuses netted from revenue, meant that there was a consequent impact on yield per active player day which was down 7% compared with the same period in 2004 to $17.8 (2004: $19.2).”

The costs from customer acquisition increased 250% to 52 million dollar, and the costs to affiliates increased 131% to 45,1 million dollar.

“As mentioned above, the increasingly competitive nature of the poker market, which is now estimated to have over 300 poker rooms worldwide, meant that a substantial increase in the level of investment in a variety of marketing initiatives, in particular offline advertising campaigns and campaigns with our affiliates, were put in place during the first half. Whilst customer bad debts as well as other customer bonuses fell as a proportion of revenue, overall distribution costs increased to 29.9% of revenues (2004: 23.3%) in line with our expectations.
Overall, customer acquisition costs in poker (including bonuses which are netted from revenue) have continued to rise to $286 per new real money sign-up for non-affiliate sources which is 125% higher than during the same period last year.”

http://www.partygaming.com/images/interim_results_fy2005_06_09_05.pdf

derhammer answered 1 year ago
Sportingbet is trying to buy Empire Poker.

“The Board of Sportingbet, one of the world’s leading online betting and gaming groups, notes the recent press speculation following the announcement made by Empire Online Limited (“Empire”) on 2 September 2005 regarding an offer approach for the entire issued and to be issued share capital of Empire. Sportingbet announces that it is in discussions with Empire, which may or may not lead to an offer for the entire issued and to be issued share capital of Empire. These discussions are at a very preliminary stage, and there can be no certainty whatsoever that agreement will be reached and an offer will be forthcoming. The making of any offer is subject to the satisfaction of certain material pre-conditions and completion of appropriate due diligence. A further announcement will be made in due course.”

http://www.sportingbetplc.com/270

Dominique answered 1 year ago
Welcome to CAP, derhammer.

And thanks for your interesting posts!

Anonymous answered 1 year ago
well as to player retention:

I finally got tired of losing to inferior hands on such a consistent basis. After having moved (back) to cryptologic’s poker room I am doing much better and I see SO many fewer bad beats its amazing.

PP claims their software is random but I got to tell you that i am not the only person that believes there are way too many bad beats at PP. This will drive a lot of “play on regular basis” poker players away because eventually they all get smart and start just playing the premium hands, and once you do that it doesn’t take very long to come to the conclusion that the inferior hand wins on the turn or the river way too damn often at PP.

especially if you compare it to playing at home or for that matter many other online poker rooms as well.

so IMHO PP needs to fix the ‘bad beat” phenomenom if they’re truly dedicated to player retention.