Q2 Launch for New PartyPoker Software Next Step in Group’s Recreational Refocus

... while the advent of social media and new technologies have revolutionized the way that consumers behave and entertain themselves, the online poker product has not really changed for a decade If there is one thing clear from last week’s 2012 financial report and subsequent interviews with bwin.party executives, the policy changes on PartyPoker in the last year—from cutting ties with PokerStrategy, to segregating players based on ability, to ending its top-tier VIP program—are all part of a long-term, network-wide strategy.

And the new PartyPoker software, which promises to meet “the expectations of the modern digital consumer” with a “revitalized” PartyPoker brand, its debut still slated for the first half of 2013, will be the concrete realization of the group’s goals.

Revitalization is certainly needed. While discussing lackluster 2012 performance, poker was singled out by the group as one it “was not happy with,” with daily revenue, new player signups and daily active player numbers all down. But the group promises bold new plans to rebuild.

“Having analysed the online poker market and conducted extensive customer research, it became clear that while the advent of social media and new technologies have revolutionized the way that consumers behave and entertain themselves, the online poker product has not really changed for a decade,” it was stated in its annual report.

The new software platform is described as both the “final stage” in its plans, and, by Martin Weigold, Chief Financial Officer of bwin.party, the “first part” of a “complete refresh” of the poker offering.

Regardless of the perspective taken, there is little doubt that the new platform will have the “recreational player” as its primary target, likely integrating social features more prominently.

... we also renegotiated a number of key affiliate agreements that prompted a number of higher stakes players to leave our sites “Our plan is to revitalise PartyPoker as a brand with broad appeal, centred around the recreational player. We are not only changing the way it looks and feels but also significantly improving the playing experience to one which meets the expectations of the modern digital consumer.”

Changes made in 2012 were highlighted as laying the groundwork for this brand revitalization, including removing high stakes cash games and the launch of its fast-fold product, which the group claims now accounts for 30% of its cash game activity.

Another highlighted move was the removal of the bad beat jackpot, which, according to the report, “tended to appeal to more experienced players”—a point many experienced players would certainly dispute.

Also trumpeted was renogations of certain unspecified affiliate agreements, “that prompted a number of higher stakes players to leave our sites, improving the balance of casual and experienced players and improving the ecology.”

In December 2012, PokerStrategy, the world’s largest online poker affiliate, announced it was ending its partnership with bwin.party’s brands.

Turning off the PokerStrategy faucet—known in the industry for creating a huge influx of strategy-minded poker players—certainly had an immediate effect. According to bwin.party, these contractual negotiations, along with the removal of high stakes tables, resulted in a staggering 46% reduction in new player signups and 23% reduction in “active player days” and daily average players.

However, the bwin.party financial statement argues, these large numbers of historic sign-ups were failing to generate positive ROI—in other words, many were not net-depositing players—and so falls inline with the group’s plan on refocusing on the poker ecology.

So far, this refocusing has not had the intended effect—while “player yields” are up 7%, net daily revenue is down 17%. But its a trend bwin.party “is determined to reverse.”