Skill-based gaming is a growing vertical in the iGaming world, but one that remains somewhat unclear when compared to similar verticals in the industry. The distinction that applies to skill-based gaming can be stated as a game where the outcome is determined by the player’s physical skills or mental skills, rather than pure chance.
Trying to determine whether a game can be put in either section can seem a bit daunting, but it can be typically looked at rather simply. If there’s chance involved in determining the outcome of the game, it can be considered gambling. If there is no chance, or immaterial amounts of chance, involved in the game, it can be considered skill-based gaming.
These are games where users play against real people (head-to-head or multiplayer) and where skill determines the outcome, leading to real money and prize winnings. Another important factor for these games is to have fair matchmaking, with players matched by skill level, in a fair environment.
With that in mind, our blog post breaks down the skill-based gaming market, its demographics, along with providing suggestions to brands interested in delivering these engaging games to their audience.
Skill-Based Gaming Market Overview
Skill-based gaming is rapidly increasing in popularity, with its gaming market share expected to reach $16 billion by 2024, according to Business Wire. They also point out that the compound annual growth rate (CAGR) rate is 31.9% from 2021-24, meaning that this market is growing six times faster than the overall global mobile games market!
There are a variety of game types for skill-based gaming, but these are the most common categories of games in the vertical:
- Arcade games
- Puzzle games
- Word games
- Trivia games
- Fantasy sports
- Card games
Skill-Based Gaming Demographics
Compared to traditional iGaming audiences, the demographics for skill-based gamers are a little bit different. A third of players are over 45 leading to a slightly older crowd, while 55% of players are women, making it a more diverse audience than other verticals.
While skill-based gaming is quickly generating interest globally, it’s currently most popular in the United States, where 42% of skill-based gaming resides today. Additionally, it’s also quite popular in India, who sees 21% of the market share in this vertical.
Within the United States, this kind of gaming is considered separate from gambling in most states, though it’ll be interesting to see how regulations evolve over the coming years.
In terms of their preferences, 75% of skill gamers also play scratch-offs, Powerball casino products, slot machines, and fantasy sports, making them an ideal audience to cross promote other iGaming products do.
Suggestions to Operators
- Diversity of Games
One area in which operators can differentiate themselves is with the diversity of games they can offer players. At the beginning of the skill-based gaming craze, most operators only offered games of solitaire in this category. Today, the audience is looking for greater variety in their games, as the mobile games they have become accustomed to are more sophisticated. Thus, those who can offer a strong variety of skill-based games may have an advantage.
- Social Elements
Additionally, retention can be a bit of a struggle with skill-based games, as users may get bored and move onto another game. With that in mind, operators need to try to provide an engaging social ecosystem around the game that will entice users to keep coming back.
- Cross promotion
As mentioned earlier, many skill-based gamers also like playing other iGaming products, so trying to cross sell them to others can help keep them engaged and as a member of your userbase. Providing them with offers to try other products on your platform can make players feel like they’re valued by your company.
- AR and VR
As with most areas of the iGaming industry, AR and the metaverse are becoming essential aspects for a brand’s content strategy. Gaming experiences are becoming more immersive and it’s natural that these elements will become a bigger part of the skill-based gaming landscape, meaning operators need to keep watch on this.
Looking Forward
The skill-based gaming vertical is growing at an astounding rate, making it one that operators should be sure to keep their eye on. As users try out these engaging, new products in the iGaming world, it’ll be imperative for brands to find ways to incorporate skill-based games into their platform and engage their audience within those games.
