Andrey Kuznetsov

Andrey Kuznetsov: CEO of Social Casino Giant KamaGames

CEO, Innovator, Thought Leader

For the second installment of Blockference’s Thought Leaders, I had the pleasure of speaking with Andrey Kuznetsov, CEO of KamaGames, Europe’s largest online social casino, a platform with 10 games currently on offer that enjoy 500,000 daily users, and 100 million players worldwide. Andrey and I spoke about KamaGames’ meteoric rise to prominence, the KamaGames Token offering and the ins and outs of mobile and social casino gaming.

Exclusive interview

I caught Andrey in KamaGames headquarters in Dublin, Ireland, we first touched upon the recent completion of the KamaGames Token (KGT) offering. Andrey is quick to differentiate between the KGT offering and your standard ICO, Kama never intended to raise money via their token sale, instead, it was a strategy to acquire and retain players.

The KGT serves as a proxy for buying chips directly in-game but at a more lucrative rate for players, the beauty of the KGT is the tokenomics behind it. The longer a player holds their token, the higher the rate they can exchange it for. If left to fully ‘mature’, the tokens will eventually max out at eleven-fold growth.

“We haven’t yet finalized all the results, we haven’t brought them [the tokens] public, but we assume to see increased player retention for those who hold tokens.” The KGT design was twofold, one, to acquire and retain users, demand was already in place for individuals to be able to pay via crypto, and two, with the system rewarding HODLing tokens, the tokens keep players engaged with the games.

Previously, Andrey has stated that there are currently no blockchain technologies fast enough to support a platform like Kamagames, “At up to 1,500,000 transactions per minute, no blockchain is even close to these numbers, some will promise for sure, but we have not seen any,” I asked whether he and the team see this as a possibility in the future, as faster technologies are developed.

Short answer: no. “There is no benefit for us from it,” Andrey explains, “We are not a real money application, there is no difference for our players to enjoy the game, there is no need for any further transparency.” KamaGames already possesses a random number generator (RNG), certified by iTech Labs who found that "card and number sequences are unpredictable, non-repeatable and uniformly distributed.”

“Our RNG is fair, our certificate is known and recognizable… if we build a game on blockchain the question is what we do with our RNG?” Andrey raises the point, that if a game is built on blockchain technology, the RNG would have to sit there too, fully transparent, “basically if we put it fully on blockchain, we have a concern that it will become more predictable.”

While Andrey concedes there may be methods circumvent this, he doesn’t hugely see the point, a blockchain capable to process their throughputs a second, will more than likely come with commission, and even if Kama keep their RNG off the blockchain, “some people will definitely tell you, 'you’re not fully decentralized and it’s not truly transparent'”.

“Three or four years ago poker was competing with poker, we were not competing with Candy Crush, or Farmville, this year everybody competes with everybody… we compete with King products, with Supercell products, because we are all now competing for player’s time.

Andrey acknowledges the early progress of KamaGames for their more recent successes and hitting the milestone of 100 million players worldwide. Launched in 2010, Kama was able to set itself apart from Zynga and WSOP, the largest online social casinos, that KamaGames competes with up until today, “It happened that we designed quite a good game, launched it in the market in 2010, we had some money for user acquisition... and we were able to get our market share, that was when the main success was made at that time.”

Poker has been Kama’s evergreen game, while there are variations, poker is unique and “is rather a hardcore”, according to Andrey, “[Kama] have a rather narrow segment of users, but they stay with us for a longer period of time, some of our players are with us for six or seven years.”

In 2013 Roulette was launched, which introduced P2E (player-to-environment) elements that were successful in controlling in-game inflation. In poker a P2P (player-to-player) game, the number of chips is increasing as one loses their chips and subsequently buy more. To combat this inflation, most casinos have what is called a rake, a scaled commission fee taken by the operator of the poker game, KamaGames “have rake on very few tables”.

“Long story short, we achieved our goal very successfully, we introduced Roulette in 2013, and the game removed chips from the economy, and allowed us to control the economy a bit more.”

Next came Blackjack, which was launched in 2015, Kama was the first to have "3D multiplayer interactive Blackjack in 2016, since then we started to grow.” In 2017, KamaGames’ gross revenue increased by 63.4 percent from the previous year and continues to grow significantly in 2018.

Speaking at London’s CryptoBlockCon in September, Andrey noted that comparing the first halves of 2017 and 2018, there has been a 53 percent increase in revenue for Kama, and the number of daily active users grew by 36 percent with the average revenue per paying user growing by 30 percent in the same period.

“This year we will grow again, what we did was improve every piece of our gaming infrastructure, player support, business analytics, pro touring, user acquisition. We ensured all of these separate blocks are the best. All of these things allowed us to introduce more new products, more often. We currently have ten games, we will launch up to four or five more games next year. In 2019 we will have 14 to 15 games in total, while in 2015 we had only launched our third game.”

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Andrey acknowledges the huge effort of the customer relationship management (CRM) and content teams for KamaGames’ success at gaining and retaining players, “Three or four years ago poker was competing with poker, we were not competing with Candy Crush, or Farmville, this year everybody competes with everybody… we compete with King products, with Supercell products, because we are all now competing for player’s time. The games are such complicated products now, mechanisms to keep players engaged, to retain them, to make them pay.”

Whether it be party modes or multi-table tournaments, KamaGames is introducing new content every other week, “and that was one of the reasons for our success. We have all our games within one application, so we are constantly offering new quests for players to try and participate in, and that’s how we actually keep players constantly engaged every day with us, that’s how we grow.” In 2018 Kama has seen its user-base grow by over 1.5 million players per month, accordingly, in June this year, KamaGames won the ERG Marketing and Innovation Award for in the social casino genre.

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November saw the launch of TeenPatti, the newest game on offer from Kama. TeenPatti is a multiplayer card game designed to drive growth in the emerging Indian casual gaming market, prior to this was Poker Champions, the first product Kama launched in India. I asked Andrey what goes into integrating a new cultural and geographic region, “For games for a specific region, you need to understand their culture, you need to hire somebody locally to advise and help you with cultural issues, it’s a big project.”

Kama has been trying to expand into the Chinese market and have seen some success with games there, “but we’re still very far from what we could do there, there are a number of problems.” A problem Andrey notes is up-in-the-air regulation around social casino games in China, “they [Chinese authorities] introduced game certification methodologies a number of years ago, and it is still not quite clear how it works, and even local companies struggle with it... One day we hear that social poker is not allowed, then we hear that it’s allowed, it’s all rumors and there is no government solution there.”

Despite the regulatory headaches at times, Andrey admits to the fun of learning different regional games, “we’ve been thinking and I think we will launch Pai Gow, a well known Chinese game, we’ve also been thinking some other locally played and famous games like Rummy… we may introduce some of these games next year.”

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