Charles Cohen podcast transcript
Interview with Charles Cohen
Speaker Key:
RT: Ronan Tighe
CC: Charles Cohen
Hello. I’m Ronan Tighe from Foviance, and welcome to our podcast on ‘Innovations in eGaming’. This podcast was recorded on Friday 3rd April 2009. Today I’m joined by my guest, Charles Cohen, CEO of Probability. First of all, I’d like you to tell us a little bit about your background at Probability.
CC: Well, my background’s probably not that interesting, I’m a technology entrepreneur. I suppose my first big hit was a dot.com business in the boom of ’98 to 2000 called Beans.com, which was an idea to create a web currency, and that was sold in 2001. I’ve co-founded Probability with a friend of mine in about 2004.
RT: The focus of this podcast is on innovation, and I’d like you to tell us a little bit about how you feel it’s important to Probability?
CC: Well, this is an innovation business; nothing that we’re doing is a repeat of anything that anybody’s done before. At one level, a roulette game is a roulette game, and a slot machine is a slot machine, but that’s at a very thin level, it doesn’t really tell you very much at all. We are having to innovate and solve new problems on an almost daily basis, so this is an innovation business.
RT: For innovation, how do you ongoingly encourage it within your organisation?
CC: Well, sometimes we don’t really have a choice actually, the need to innovate is forced on us, because we’re working in an area, the mobile world, where change is a constant. We, for example, every week we come across on average seven and a half mobile phones that we didn’t know existed, and we have to accommodate those phones, because once our customers start using those phones, if we don’t support them, we’re in trouble, and then you get something out of the blue comes along, like the iPhone or the Android platform, and which completely changes all of your assumptions about the environment that you’re operating in, so that in itself is a huge challenge. We also generate our own innovation, because we are still not happy that we’ve found the right format, or the right formula, for gambling on a mobile phone. Everybody who’s doing this sort of thing has taken the obvious route of starting in very familiar territory with games which you could just as easily play on the internet. I don’t believe that that is really the whole story with what mobile can do, I think that there are gaming formats out there which simply make perfect sense on a phone, and make very little sense on the web, and that’s what we’re looking for. We have about half a million customers at the moment, they’re all registered, they’re all living in the UK. We are about to start marketing internationally. Who are they? – well, they are actually people who are not really gamblers, but they’re people who play games on their mobile phone already, so our competition is not somebody else’s roulette game, or somebody else’s slot machine, it’s the latest title from EA, it’s Cooking Mama, and Pacman. Tetris is still in the top five downloads across all mobile networks after, what, ten years, it’s quite extraordinary – that’s our competition. So our customers are gamers first, and gamblers second.
RT: And that does affect your proposition in terms of you don’t have an online proposition? Is that one of the reasons?
CC: Hugely, yes.
RT: Because you’re going after these type of volumes?
CC: OK, so it affects it in two quite fundamental ways, the first is that we don’t have an online offering, Lady Luck’s, which is our consumer brand, is a mobile offering. There are lots and lots of reasons for that, but basically we want to do one thing only, and we’re going to do it better than anybody else, and that’s quite enough for one day. The other effect that it has is that the expectations and the usability language that our customers are used to is something that they’ve learnt from playing games like Tetris or Pacman; it’s not something that they’ve learnt from using a PC, and so the fundamental user interface language and what they expect to see when they play an application is completely different, and understanding that is one of the most important aspects to being successful.
RT: Which brings me to my next question around the biggest challenge of trying to offer a good experience – is that it?
CC: No, the biggest challenge – actually, no, that helps enormously – because the biggest challenge is the device. The device itself is firstly unpredictable, you don’t know what size screen your customer’s going to have until they take the phone out; it’s got a very very limited user interface; it’s got a small screen; it’s cantankerous, the light keeps going off, phone keeps ringing, text messages come in; it’s got a very short battery life; a game that look fabulous on your new Nokia might be, with the same user interface, might be incredibly difficult to use on a Motorola, because the keyboard is laid out differently, you simply don’t have to deal with that when you’re looking at the web, and so the usability problem is exponentially more complicated.
RT: When you are designing the game, do you then design for a certain phone, for a certain standard of phone?
CC: No, that is a strategy that some people follow – you can tell, for example, if you boot up a mobile game, if it uses things like sound, if it uses the full screen that’s available rather than keeping, for the top of the screen, if you can still see the little thing that tells you what your battery is, they’re not using full screen – those are features that you have to code specifically for each device, so each manufacturer will have a different way of doing that, you can’t put code, that for example that would use sound on a Nokia onto a Motorola, because it won’t run the Java, and it will crash. So the risk of introducing those manufacturer-specific features is extremely high.
What we do, and it’s a principle here which we don’t compromise on, is we only use standard, if you like, plain vanilla features, so an application which is written for a Motorola will always work on a Nokia and vice-versa, which means that we sacrifice things like full screen and sound, but we gain the ability to very very quickly port our applications to new devices, and we gain significantly in reliability, because we don’t have to worry about quite a large proportion of the things that could go wrong, if you were doing it the other way round.
RT: Do you see that changing with the introduction of Apple, the iPhone or the Android?
CC: No, I just see that getting worse.
RT: Why?
CC: Well, because for starters you’re talking about a proliferation of operating systems, and there’s competition, so you’ve now got competition between – you used to have competition between essentially the Java platform, and a Symbian, and Windows. Well nearly all Symbian devices accepted standard Java. What Apple has done is introduce a completely new operating system, and on top of that of course they’ve got two platforms for applications: you’ve got WebKit, which means you can write an application that works in a browser; and then you’ve got the App Concept, but of course you can only distribute that through the Apps Store, and they don’t like gambling, so we can ignore that for the time being. Then you’ve got Android applications, and the whole thing has just actually taken a turn for the worse, in my opinion, and I expect that we’re going to see a period of destandardisation for the next couple of years on mobile, and eventually it will be whittled down to something that probably I suspect will be either an open platform, of Android plus Standard Java, or Android will probably win, and everybody, Nokia, Sony Ericsson, will stop trying to push their own operating systems, and they’ll focus on the fact that they just make better phones.
RT: And in the meantime, how do you see that affecting what you will be doing?
CC: Well unfortunately, it means having to make choices about which devices you want to support, and we start from the very simple principle which is, are there enough people using it for us to make money out of it – it’s that simple, we know that we can port to any platform we want, we can port to Blackberry if we wanted, and the fact that nobody, well not enough people, would use the application, means that it’s not commercially viable. We don’t do vanity development here just to make ourselves feel good, we’re in business. Lots of people do like to do that, and it makes them feel good, but unfortunately that’s not the way the world works from where I’m sitting.
RT: And do you do that by measuring your current users and what devices they’re currently using, or looking at your target audience if you want to?
CC: Both, but we actually have, obviously we monitor the devices our current customers are using very closely indeed, actually on a daily basis we get a report of the top 100 devices, and we get a daily report of the devices that we’re missing, and we keep a close eye on trends upwards, so we monitor devices hitting our mobile site and also our website, and we profile them, and if it looks like something’s coming up fast, then we’ll start thinking about porting and accommodating it, so before it becomes a big deal and we’re losing customers.
RT: Are you seeing at the moment more and more people coming in with iPhones, their own Androids?
CC: No, less than 2% of people hitting our site are using either Android or iPhone.
RT: Why do you think that is?
CC: Well, with iPhone, because essentially the iPhone user pretty much surfs either the normal internet, the regular internet, or they are operating within this close, this walled garden known as the Apps Store, and for all the ra-ra-ra about how marvellous the iPhone is opening up mobile internet, it’s not at all. What it’s actually done is create a large volume of traffic to a small number of websites, all of which are there to exploit the features of the iPhone. I’m fully confident that what will happen is that people will start to get very bored with that very quickly, and the Apps Store is already becoming quite unwieldy, and that Apple will eventually evolve to a much more open policy, I think it has to happen really, it couldn’t be otherwise.
With Android, it’s too soon to say, nobody really knows, but they’re all going for this Apps Store concept, I mean Nokia are about to launch one, there’s a Windows apps store, and I think ultimately the consumer will decide whether or not the content is compelling enough. Apple have made a very brave decision by refusing to allow their customers to buy applications from anybody other than themselves, and I suspect that that model will come under a great deal of pressure, because nobody else will do that.
RT: Why, you mentioned earlier that Apple aren’t very open to gaming sites – do you think that will change in the future?
CC: Yeah, well Google had the same policy, you couldn’t advertise gambling on Google, and they realised that they could make a lot of money out of it, and suddenly their moral objections went out the window, Apple will be the same. The problem for Apple, of course, is that they’re very, even the European version of the Apps Store’s not really managed here, it’s managed in the States, and so I suspect that they’re just basically concerned about the regulatory side, but I think they’re probably also concerned about brand. The gambling is the biggest risk to people’s brands, rather than their legal position, because they don’t want to be seen to be encouraging it, but I mean that’s a load of hokum if that is the case, because there’s dozens of play for fun casino games on the Apps Store. Apple even have their own poker game, so it would be hypocritical for them to stop it for any reason other than the fact that they’re concerned about the legality of it.
RT: Going back to what you’re doing at the moment, and Probability, you’ve just launched your first player-to-player game called Head to Head Poker – do you see that as being one of the next big things in mobile gaming?
CC: I hope so, because we’ve spent a lot of money on it. I just have a gut feeling that, one thing that mobile will be fantastic at, which you just wouldn’t do on a PC, is real time turn-based head-to-head games. Nobody would have predicted that, when the Xbox was launched, that the most important feature was its network connectivity. When the games consoles came out initially, they were just about people playing a game that was on the disk in isolation, but now it’s almost impossible to buy a game for your Xbox that doesn’t have a multi-player feature, and that’s what drives sales. I believe exactly the same phenomenon could occur for mobile gambling, and we spent an awful lot of time testing different formats, trialling different concepts, until we came up with the realisation that actually what we should do is develop a platform for head-to-head gaming, which could accommodate a very unlimited variety of game types, and start building games on top of it, and then each subsequent game gets cheaper and cheaper to develop, because you’re only really doing the top rules layout and the visuals, and then you keep doing that, and you’ll find out what customers really want, and of course that will change.
So we started with poker, because that’s the most obvious, and also because it was the hardest to do, and that’s actually going very well, head-to-head Texas Hold’Em, and we’ve also got rights from Hasbro for Connect4 and Battleship, which we can also do as head-to-head games. We’ve got Top Trumps, which we can do as head-to-head, and there’s all sorts of other games out there that you could do, so it’s actually a pretty exciting opportunity for us, and we’re going to really push this year on the multi-player.
RT: Do you think getting the rights for those well-known brand names in terms of gaming is key to driving people to wanting to play them?
CC: Yes, brands, in any context, not just gambling, games in general, branded content outdoes, well properly branded content, outdoes unbranded content by a significant margin. The business of licensing is an industry in itself, and it’s almost impossible now to find a really successful game that isn’t branded in some way or other. I mean, there’s lots of rubbish out there, you can buy a really bad movie game that’s been churned out using somebody’s platform gaming engine in about five minutes flat, where they’ve taken a film title and stuck some characters in – that’s not really what it’s all about, it’s about finding something that people are already familiar with, and understanding what the brand value is, what that game actually means to people, not just the original format, but psychologically what it means to play that game, and games are about messing with your head, they’re a psychological activity, a mental activity, they’re not a physical activity, and the enjoyment and the pleasure that you get and the reason why you keep coming back to play any kind of game, whether it’s sudoko or chess, is that it does something for you psychologically, and to do a successful brand extension taking a gameshow format or a board game format, and making a gambling game out of that, you need to reproduce the same psychological effects in the game, and that’s not always easy.
RT: What innovations do you see in your area that’s going to really change the experience?
CC: Well, the first and most obvious thing I can really see happening is interface, the advent of the touch screen mobile phone has created some fantastic opportunities for making a really tactile, intuitive interface. Innovation in game play, in game design, is key, and I can see a lot of that, there are lots of companies now coming into this space and everybody is trying to offer a better experience for the player.
RT: Just about these current kind of gaming sites and the industry, and those both online and in mobile sites – do you think they currently are competing against each other? Do you see, what innovations do you see them bring forward? So rather than the phones developing, do you think the actual gaming sites are going to proactively change the space?
CC: Well, the problem with gaming sites have is that most of them don’t control their own technology, what they do is they go and buy it from somebody else, and in the last few years the only real innovation that I’ve seen, I mean there’s always new games being tried, if you like, round the edges, but the really interesting stuff are things like live dealer casinos, and people trying to do 3D gaming. Obviously PKR was an exceptional piece of innovation which tried to bring the poker room into the era of the Xbox, and I think have done it very well. There’s a new one, Barriere have done a 3D casino, which was launched just recently that I’m hoping to have a go at later today actually, just to see what people are up to, but I think that’s kind of playing round the edges. Real innovation in gambling has always been, and I’m not talking about just e-gambling, but just ever since the beginning, has always been about using technology to deliver a new type of game to people, and if you look at the really significant technological advances in gambling throughout history, you could point at the roulette wheel as being an extraordinary innovation, because it created an entire industry, and I think that for every ten innovations, maybe one of them will last.
And the industry – I don’t know, disappointed, I’m actually quite disappointed at the lack of innovation, the lack of risk taking in the industry, especially when people are under so much pressure, and markets are so saturated, poker – every poker site basically looks the same, plays the same; the Poker Lobby is a case study in poor usability, it’s designed to confuse the hell out of anybody, it’s just unbelievable to me that these sites could have been so successful with such a lack of consideration for the customer, and it needs somebody to come in and look at it at that level, and revolutionise it, and I think you’ll find what happens is, somebody will do it, and everybody else will follow, and it can be done quite quickly.
RT: Do you find that it’s one of the challenges with innovation and kind of linking innovation to commercial success, because why put the money up front to innovate if everybody’s going to follow straight away?
CC: Well, the industry is structured to accommodate that, because the innovation, these sorts of innovations are not, don’t come from the operators, they come from the technology providers, so you get a technology provider, say Orbis, or at the other end, a slots designer, like NextGen Gaming, the Australian guys, they can come up with a brand new concept, gaming concept, and they can sell it to every single operator on the plant, and they’ll start probably with somebody like Paddy Power, who is up for innovation, and as soon as it becomes successful, everybody will follow suit, and that’s the way it goes, and in fact the gambling is not unusual in that respect, most industries work that way, but it’s important that the industry is structured to allow that kind of innovation.
RT: Is that why Probability not only has your own casino, with Lady Luck’s, but also offers the kind of b to b?
CC: Yeah, absolutely, because the cost of doing your own mobile solution is prohibitive, it’s not just developing the applications, it’s keeping them up to date, and so the economics just simply don’t stack up for a do-it-yourself solution, so unless you are a major provider of software to other companies, you really couldn’t justify it, so it’s no surprise that the other two significant market players in mobile are now, or at least are going to be, Microgaming and Playtech, because they can develop once, and then they can distribute that product throughout their whole network.
RT: Finally, who do you think offers the great user experiences, and great innovations, in your opinion at the moment?
CC: I’m a massive fan of Jackpot Joy, and I can say that despite the fact that they are obviously competitors of ours, because they’ve got a mobile offering, but boy, do they know how to, they come up with the goods regularly. I’m also a big admirer of the extremely subtle and very very clever innovation that is practised by NextGen Gaming in Australia, because they understand how slots work as an experience better than anybody, amazing; and the other people who I really think are, some of the bigger organisations, G-Tech particularly, and Orbis, are actually pretty open-minded about innovation, and are actually on the look out for new things, despite being very large corporates with big infrastructures and big responsibilities, and that’s kind of refreshing.
RT: Charles Cohen, thanks for giving up your time to participate in this interview, it’s really appreciated and I’m sure your advice and insight will be well received by our listeners.
Thank you to you all for listening, please come back to Foviance.com so that you can download the next podcast in our Innovations series.