GBG Millennials:
The Digital Natives
Gaming or gambling: operators should react now. So says Nigel Clark,
M
illennials have been blamed for the deaths of everything from cereal and napkins to motorcycles and diamonds. The truth is that these markets have been slow to react (or haven’t reacted at all) to the needs of their millennial customers and have paid the price. However, gaming is an industry that thrives on millennials’ appetite for this form of online entertainment.
Fortnite, a free video game from developer Epic Games, is the latest phenomenon and is generating billions of pounds as an obsession for gamers of all ages. Eager eSports gamers buy loot boxes, the content of which is unknown until after the purchase. Critics of loot boxes say this is the exact same mechanism that’s used in gambling – essentially, it encourages gamers to spend money and keep opening boxes until they get what they want.
In the UK, loot boxes currently do not come under the 2005 Gambling Act, as the rewards they hold are not considered to have value outside the games themselves. There’s a heated debate, but regardless of the verdict there’s a clear need for more control and measures to protect vulnerable people. The online gaming sector has two unique challenges with millennials that operators have to address sooner rather than later.
IDENTITY CRISIS
Having grown up and come of age alongside the internet, millennials are digital natives. Millennials expect interactions with
businesses to be quick, slick and intuitive. So, operators need to avoid introducing unnecessary friction that could sour the customer experience for them. The problem is, however, that millennials’ identities are uniquely hard to verify.
Many are as much as a decade ‘behind’ their parents in terms of typical ‘adult’ behaviour – such as buying a home. This makes it harder to verify their identities using traditional credit files. Millennials are also far less likely to have a strong relationship with a traditional bank than generations before them. Some estimates say more than 30% of millennials are ‘underbanked’ or ‘unbanked’. With less banking data to go on, risk evaluation is more challenging.
Soaring house prices are a barrier to home ownership for millennials. Many are trapped in a cycle of short-term lets, moving frequently and not updating the electoral roll. Meanwhile, landline telephone usage is in serious decline – particularly among generation Z. The combination of these generational changes mean that the traditional datasets used for identity verification can often miss out millennials and generation Z customers. There’s also a tangential challenge for the sector surrounding their expectations.
PROBLEM GAMBLING
As participation in online gaming increases, millennials appear to have issues with problem gambling. In June this year, the NHS opened the National Problem Gambling Clinic in London. It offers specialist help for
addicts aged 13 to 25. NHS England chief executive Simon Stevens said the new clinic shows how seriously the NHS takes gambling addiction in young people. According to the survey by the UK Gambling Commission (UKGC), last year 31% of children aged 11-16 had paid for loot boxes. What’s more, in the UK 99 percent of 12-15 year olds spend over 20 hours online 15-year-olds are “extreme internet users” who spend at least six hours a day online. The UKGC chief executive has even floated the possibility of levying taxes on the sector to fund treatment for addiction. Legislators are already forcing the sector to act. Changes to Licence Conditions and Codes of Practice (LCCP) will help to protect underage users from being able to play by mandating that operators carry out ID checks at the start of their journeys. However, it assumes operators have robust enough checks in place to spot forged documents and falsified data.
ADAPT OR IT’S GAME OVER Whether or not the UK government will
classify loot boxes as a form of gambling, the industry should do more to help tackle mental health caused by addiction. The gaming operators are perceived to be main contributors to the problem and more than anyone else, they should contribute to the solution.
If operators are to capitalise on millennials’ appetite for gaming and avoid punitive action from the government, then they must find ways to adapt. This means adopting new technologies and datasets that can address the shortcomings of traditional identity verification data sources. Applying more effective age verification tools to prevent children playing titles that are unsuitable as well as preventing gamers of all ages being lured into excessive play-time.
It doesn’t have to be done at the cost of slick and intuitive onboarding. With the right processes, operators can create an onboarding experience that meets their millennial customers’ high expectations, while enabling identity verification and monitoring transactions for signs of problem gambling.
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