Online Gaming: A License to Print Money?

Most people reading this have, at one time or another, heard fantastic stories of multi-millionaires, or better yet, billionaires, who made their fortunes online from a small amount of startup cash and turned it into a fortune. There is a relatively small group of organizations who, over the past 5 – 10 years, have reached the 100 Million Club through consistent business practices and solid marketing with an online gaming business. In all success stories, the “80/20” rule generally applies, which states that 80 percent of the wealth is earned by the top 20 percent of any given business, and 20 percent of the wealth is earned by the bottom 80 percent. For every success story there are dozens that fail miserably by taking investment dollars down the drain with them. Therefore, what do investors have to do to build their own successful online gaming empire? It’s easy if you follow these simple steps:

1. Experience:   You need to have one or more experienced people on board in the gaming space. These individuals are typically former employees of major companies who understand how the gaming industry works. If you don’t have this type of experience in your organization, then start out by being a gaming affiliate who drives traffic to gaming sites. As you grow and work with these organizations, you will be exposed to a virtual education of the gaming world.   Additionally, gaming companies are willing to offer white-label solutions to successful affiliates who receive high traffic volume. Through your affiliate site, you will be introduced to the special promotional offers and incentives that companies use to entice players. It is important to learn about promotions as some work but many do not. Cardinal Rule:  “You need to be able to solve analytical math problems to really understand if the bonus you are offering is going to make your month or break your bank.” 
2. Products:   Cardinal Rule:  “You need to have the best gaming software you can find.”  Most of the top software providers will not give you a second glance (or even a first meeting) unless you have a previous track record or an existing site generating at least 200K in monthly revenues. You will likely have to start out with a second tier supplier and make sure you keep the contract short enough to adjust and grow your product line. If you have strong software, there will be a better chance of converting customers to cash. This is what predominantly drives the ship.
3. Marketing:    I am assuming that you have already created your online brand image, logo, and layout, which is key. You need to have someone on your team who is highly skilled at online organic marketing. Build banners, update your website, create online marketing materials, and keep your site clean and simple, which is inviting and easy to do business with. Cardinal Rule:  “Do not spend one dime in off line marketing until you have done everything you can possibly do online.” Why? Because it is much easier to persuade people who are already online and interested in your product.  Don’t assume that buying TV or Print ads is going to be beneficial for your company in the first year or so.  You have to have already completed your organic building to be discovered by the tastemakers in this industry, and have great reviews in site forums and affiliate gaming review sites. Typically, most forum discussions will be about your payment processing, promotions, and customer service. If you are going to create TV products, make it internet TV or a Viral.   These can be part of your Organic Marketing Strategy because they are usually cheap, fun, and found online.  
4. Customer Service:   Cardinal Rule:   “Without great customer service you will fail.”  What most people don’t understand is that word of mouth is essential.  We are surrounded by word of mouth on forums, articles, Twitter, Facebook, etc. When someone receives great customer service it is treated as an anomaly and openly discussed. When people receive bad customer service, which is often the case, they either say nothing or they negatively describe your company. Customer Service is the trust behind your brand, and it is your best opportunity to sincerely engage your customers and create loyalty. 
5. Payment Processing:    Cardinal Rule:  “90 percent of customer Service questions are related to payment processing issues”.   How important is payment processing?  If the cash register in a shoe store is broken then no one can buy shoes, correct?  Alright then… Payment Processing is as important as anything listed in this article and they are all equally as important to finding success.   How do you go about payment processing?  Look at the payment options offered on other sites. This is the best place to start.   Next, attend some gaming conferences and pick up a directory. The payment processors always have booths at these events, and payment processors love the gaming industry as they make a lot of money with these organizations. 
6. Legal Jurisdictions:   Cardinal Rule:  “Only do business where it is legal to do so”.
7. Patience:   If you take a few million dollars and throw it into marketing in the first few months, and consider such options as sponsoring a few high priced poker pros or doing some celebrity branding right off the bat, you are probably going to get a lot of attention and convert players who hear about you, right? Absolutely not! You will just be throwing a significant amount of money out the window and then quietly disappearing into the sunset. You need to hold back every penny possible, dissecting every pitch, promotion, and online gaming proposal from every affiliate site trying to sell you CPA deals. You need your money in the bank so you can last into year two and three, and if you are jaded enough to be able to cut the really tight deals and hoard your bankroll then you may last long enough to be the next online gambling empire with a license to print money.   

Author: Peter Karroll is CEO of IAM Corp, a world leading independent online gaming marketing firm specializing in Online Marketing, Gaming Management, Social Media, Music, Television Production, Artist Management and Live Events.  IAM Corp’s customers have generated over $1 Billion in revenues internationally as a result of IAM Corp’s concepts and strategies.

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