Intro – Stefan Kovach, CEO
Before diving into the quarter ahead, I wanted to quickly reflect on the first half of 2020 which, despite the terrible onset of COVID-19, has fortunately remained a productive one for the FunFair team, who became fully remote from early March. We have been well placed to manage this change given we were partially remote pre-pandemic and were therefore well set up to work in this way.
At the beginning of the year we were committed to further improving the onboarding and deposit processes, as well as improving and increasing the scope of our marketing activity. We have had plenty of learnings along the way but I am proud of what the team has achieved in this time.
Here’s a quick summary of some of the bigger tasks completed and objectives achieved:
- Streamlined and improved the onboarding journey
- Improved KYC via the introduction of document scan, by adding provider fallbacks, manual checks, more markets, and improved UI
- Revised wallet and website UI, including the integration of fiat-to-crypto payments via MoonPay, and crypto-to-crypto via Uniswap
- Session opening and closing improvements through the removal of session limits, gas abstraction, and more efficient opening and closing of fate channels
- Added gaming history, and cool down and self-exclusion functionality as part of our responsible gaming package
- Introduction of seven more games, many of which are a new genre of gamer-led titles: Fun Mountain, Shamrock Riches, Pirate Dice, Five Fruits (third party), Banana Blast, Getaways and a mobile-friendly version of Roulette
- Significant increases in staking levels across the majority of titles
- Introduction of new marketing tools and features including improvements to the marketing opt-in, the launch of the blog, geo-targeted banners, the affiliate stats portal, and improvements to tracking and analytics
- Restructuring and hiring of marketing and operational teams with a new head of marketing and head of operations
- Japan localisation
On the whole, we’re pleased with what we have delivered and that it is largely in line with what we had set out to achieve. That is not to say everything has gone exactly as we would have hoped as issues and challenges have continued to arise.
These have included an ongoing cat and mouse game to try and prevent significant outbreaks of fraudulent and abusive activity, which is not only time consuming but also very frustrating, especially whilst we are trying to simplify and improve the onboarding process for genuine customers. I am confident we have now gotten over the worst of this.
With regards to KYC challenges we’ve had, and specifically related to the Japanese localised site, we are frustrated and are aware of your frustration around the delay in marketing activity in this territory. We accept responsibility for this, despite the failure of our KYC partner stating they did accept driving licenses for Japan when they did not, and we are working hard to get this rectified soon.
More recently, and of more concern is the ongoing state of the Ethereum network’s gas prices which has impacted dapp activity across the board. Needless to say, this is a major problem for us because as a top tier casino we need to deliver universal uptime to our players.
Last week, we outlined and implemented the first steps we are taking to try and help mitigate this, and are continuing to monitor the situation and look for other ways to help our genuine players play. It is worth noting that unlike most other dapps, we are shouldering the cost of the gas required for our customers to play on our network casinos, but we cannot do this at any cost. This is why we have to have a cut off in terms of gas prices.
Despite these issues, we have some exciting opportunities ahead of us that we fully intend to exploit.
Most immediately, Q3 remains focused on improving the platform and focusing heavily on continuing to optimise our marketing efforts to find the right players who resonate with our use case, and whom we can turn into loyal players.
Tom, our Head of Marketing, will go into some detail below on how the Adobe stack will transform our marketing efforts later in the quarter, and Fred, our Chief Product Officer, outlines other marketing initiatives from a product and games perspective. We continue to believe there is considerable upside to be gained in our player metrics despite the challenging gas environment.
As announced a few weeks back, we are also looking to expand our horizons into the defi space with our wallet being made available for 3rd party dapps to integrate. Not only will this benefit the platform through enabling us to work with better on and off-ramp providers, but will also open up longer-term revenues streams back into the Group.
On a similar note, Lloyd, our Chief Operating Officer, talks below about a potential new initiative we are going to start this quarter around distributing a selection of our single-player games through content aggregators into traditional gaming operators, we have been asked for our games by Operators for some time now and feel this could be an opportunistic means to monetise assets in the short term, in order to further bolster our treasury.
Finally, and with an eye to the future, we are doing extensive research into what’s next for the blockchain space, gambling within it, and for FunFair itself, in order to help overcome underlying points of friction which are hampering current adoption with the platform and the FUN token, as well as looking for new opportunities to expand our offering.
Marketing – Tom Leadbetter, Head of Marketing, B2C
Last quarter, we saw the success of one of our biggest MoonRacer (MR8) promotions to date. Wagering was 298% higher than MoonRacer 6 earlier in the year. We also had the highest number of opted-in players ever to partake in the promo.
We have continued to optimise our channels with CPA’s falling by 48.2% as we doubled the number of acquisition partners we have been working, thanks to a rigorous testing methodology.
These actions have resulted in an increase of 340% users wagering within the casino from Q1 to Q2.
Furthermore, user deposits have risen, with a quarter-on-quarter growth of 171% matched with an increase in the amount deposited of 518% over the same period.
This quarter coming, we want to really focus the attention not just on getting players into the casino at a reasonable price, but also by an increased optimisation of our retention policy to further increase depositing users, the true value of success.
This will be done so in a number of ways:
- Adobe Marketing Stack – The introduction of this martech stack will provide the team with further insight to power marketing decisions. This allows for improvements to acquisition, retention, reporting, and automation. It will also provide us with the ability to talk to our players in real-time, ensuring the correct messaging is being made. Further usage will ensure that retargeting campaigns can be implemented from day one, encouraging users at the bottom of the marketing funnel to convert to players. This platform is used by operators such as Paddy Power, Betfair, and Bwin.
- Continued Acquisition Testing – While we are confident with our acquisition strategy and partners, we want to continue to make gains via further testing and adding partners where CPAs warrant it.
- Refreshed database cohorts – We want to make sure players are falling within the correct conversation points. Are they a user that has only played with the welcome bonus? Are they a player who has tried to deposit and failed? Have they not visited the site in one month, five months etc.? By segmenting better, we can encourage the right behaviours by speaking to them in a more personal manner.
- Communication Refresh – Coupled with the new cohorts will be a new email refresh from our early-life program to brand new mailers for users that we want to entice back. We have learned a lot about language and what encourages engagement with our newsletter since the start of the year. Terminology like “claim your tickets” and countdown timers in emails have received great open and CTR rates. By refreshing these, with all the learnings that we have gained from our newsletters this year, we are confident of improved performance metrics.
- Promotion Review – We saw a major interest in the progressive pot element of Moon Racer. While Moon Racer has worked very well for our core players, we want to offer an ”always-on” element to our promotions. While doing so, we are reviewing the success of our welcome offer and other elements. Much like the segmentation strategy above, this will ensure we have the right promotions for our existing, new, and whale players.
On Japanese and wider east Asian localisation, the above will all contribute to an easier onboarding of players from those jurisdictions. With better marketing tools, a new regional consultant, and a more consistent promotional strategy across our different language versions, we’re well set to kick-off when the new KYC provider is integrated.
We also have digital display opportunities ready to switch on across a number of Asian territories, as well as more tangible affiliate options which will considerably boost our marketing reach in the region.
Product – Fred Kessler, CPO
Q3 promises big things for the FunFair platform on a variety of levels. Let’s kick off with how it’s set to better service our marketing arm and how players can benefit from it:
As Tom and Stef have previously touched on, the Adobe integration will be a major benefit to the wider platform. First up, the tool with all its capabilities needs to be scoped and integrated by the product and tech teams, before being passed onto our marketing team, who can then configure and go live with it in line with the marketing strategy and specific campaigns.
Player profiles are coming! You may have seen our Twitter post the other day. This will allow players to generate nicknames, as opposed to wallet addresses, as well as pick from predefined avatars. This will add a beneficial social element to the platform which should engage players more and boost retention in the long run. This is the first step in a series of improvements that will for example allow us to run promotions without the need to opt-in as well as other personalised features and game functionalities that we have been looking at for some time and are already in development.
Long-awaited leaderboards will also be facilitated on the back of these profiles, alongside a new cloud-based data system which we’re bringing in shortly. We’re looking forward to the competitive edge this will bring to our promos, such as CasinoFair’s Moon Racer promotions.
Further improvements to our FairChecker tool will also become apparent in the coming weeks. This will be part of a wider look at how we holistically push our Guaranteed Fair message, so expect to see its value propositions feel more integrated into the wider gaming experience.
Other miscellaneous features going live this quarter include new tile functionality in the homepage and games lobby, live exchange information on-site, more wagering and P/L stats for individual players, and generally more dynamic content to make the platform more engaging and dynamic.
Blog improvements are also coming, with the integration of a different video platform set to be introduced, and we’ll be generally sharpening up imagery and video content across the site.
On the games front, we’ve got a few titles in various stages of development, including a ninja-style ‘rock, paper, scissors’ game, a concept inspired by and targeting crypto traders, and a tower defense-inspired game.
Expect the unique ninja game first in the next couple of weeks, and then we expect to share another of these titles towards the end of the quarter.
As well as releasing our own games we’ll soon be publishing the documentation for our third-party game developer program on the FunFair platform.
We’re also exploring the distribution of selected games into more traditional gambling operators which Lloyd will go into more detail on below.
We’re excited about a number of wallet initiatives to come in Q3. A ‘wallet connect’ function will be added, allowing players to seamlessly link with a multitude of external wallets to make deposits to the FunFair platform easier.
A new KYC provider is also set to be onboarded and the next couple of months will see the first stages of this integration. This should allow for more flexibility when it comes to taking different identity documentation from different countries, while also being able to localise the form itself, thus reducing registration failures. This will complete the missing piece in terms of our Japanese product localisation.
As per the wallet release last quarter, we have substantially overhauled the wallets UI, but never ones to rest on our laurels, we are undertaking extensive usability research in order to further improve the experience. On top of this, we are soon to roll out a whole raft of wallet help features including an updated FAQ and video materials.
And hopefully, you’ve seen our recent announcement about our wallet going public to third party dapps! Well, we’re in the process of integrating our first partner so expect to hear more on this in the coming weeks.
B2B and Operations – Lloyd Purser, COO
We’ve made a conscious decision to stop pursuing smaller white-label partners as per Q2, but we are continuing dialogue with larger partner integrations to the platform into Q3. It’s probably no surprise that COVID-19 has hampered some of our activity, particularly in the networking space.
We missed exhibiting at SIGMA in Manila, which was a major event to push our East Asian leads, but we will continue to attend and speak at various virtual events both in the gaming and crypto space. It seems as though the industry is now slowly returning back to normal, and we’re ready to move on the back of this.
On the B2B marketing front, as well as the usual product and games updates, the next quarter will see a renewed impetus into social channels through a more committed, fluid approach engaging with more trusted spokespeople and influencers.
We’ve announced previously that we are looking for a handful of initial “non-FunFair” partners to integrate the white-label FunFair Wallet. Technically, it’s a light lift, it also significantly benefits the platform through the potential for better supplier relationships and commercially, we’re ready to go.
We’d hope to have most of these initial integrations done in Q3. Following that we can then further evaluate the strategy from both a product and a commercial point of view with a more significant sales push into Q4 and throughout H1 2021.
As mentioned by Stef, we’re also exploring the distribution of selected games into traditional online gambling operators through content aggregators’ remote gaming servers. The key reason for this exploration is that we’ve often been approached by web 2.0 operators and content distributors with regards to licensing our content, which as you know, we think is world-class.
Recent changes in the market make these types of deals possible with very limited licensing and technology overheads on our side. Our initial thoughts are that the additional revenue source would help us extend our runway even further in turn building strong working relationships with operators who can then ultimately adopt the entire platform. We are continuing these discussions and will determine what is in the best interest of the group.
Operations-wise, all focus has been on onboarding users and will remain as such into the next quarter. As mentioned by Fred, we’re currently integrating a new KYC supplier, which will enable Japan to “restart”. The ops and marketing teams are also continuing to work closely with our white-label partners to assist with growth across all brands.
Finance – Michael O’Connor, Group Financial Controller
Our treasury position remains strong after crypto markets rebounded from the COVID-19 outbreak and we continue to keep tight checks on costs. Operationally, FunFair hasn’t been affected by the COVID-19 outbreak and, if anything, productivity has improved with a keener focus on objectives so we can bounce back from it.
We’ve also chosen not to renew the lease on our London office space and will reconsider options later in the year. The team should be congratulated on their flexibility and efficiency in recent, testing times and because of this, the office space cost is now one that we can look at from a different, more cost-effective viewpoint.
As the blockchain space evolves and we continue our learnings at the bleeding edge of this space, we’re also focusing on what is likely to come next. As such, we are undertaking extensive research into different areas we could take the business and the FUN token into, in order to drive further adoption.
It’s clear to see that we continue to be hit with significant hurdles that limit our ability to scale and right now Ethereum gas prices are one of those. This means we have to have a broader outlook. Our wallet rollout reflects this, as does our investigation into games distribution. Both of these should be cost-effective ways to leverage already-developed products, diversifying our revenue streams and in turn, extending our runway.
We also continue to review the latest blockchain technology out there. Our co-founders, Jeremy and Oli are looking into new and developing blockchain technologies that could provide the means to enhance our current platform through both providing solutions to underlying points of friction which are hampering adoption, as well as opening up new opportunities that are not currently accessible to us. These include but are not exclusive to initiatives like; staking, the addition of multi-player games, and reducing gas fees.
In conjunction with this we are also undertaking research into our wider business model and how we can optimise it to help us with the heavily regulated environment we are in, as well as potentially providing new and innovative reasons for users to engage with FUN and the FunFair ecosystem.
We’re excited for Q3, we hope you are too, so stay tuned for more updates to the platform, games, wallet, and our ongoing research into new initiatives across the business.