I'm Confused - Please Help!

I am honestly trying to figure out if I am missing something here. Can someone please help me understand why so many of you feel that, as a result of this move by Party, any of the following will be true?

Party will lose players
Party will lose money
A mass exodus of Party players will happen
A mass amount of Party players are looking for somewhere else to play
Pokerstars is super exited about this move
Pokerstars could gain 2 million players if they offered something good right now

This is how I see it (the actual numbers might not be right, but the example should be).

Prior to the split there were about 70,000 players a night, 55,000 from Party and 15,000 from skins.

After the split those 55,000 players on Party log in and see everything the same, nothing has changed. 99% of them will never know anything happened except the games got better. Those 55,000 players are happy as can be. Party loses no players and no revenue from their core player base.
The 15,000 that log onto the skins see changes; fewer games and the game quality reduced. If those players stay on the skins, Party receives the same revenue from them that they did previously. If those players move from the skins to Party, then Party makes 100% of that player’s revenue. If those players move to another site then Party loses out on the revenue they got when they were on the skin. The end result should be that Party picks up a % of the players from the skins, and that % will be enough to actually increase their revenue right now.

How is what they have done going to have a negative effect on Party’s player base, their short term revenue or their long term success?

[Sciolist]

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Party will lose players

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Party may lose high volume players who break even but win via rakeback. I doubt they'll lose many players over all though.


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Party will lose money

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If the skins lose players due to the games suddenly getting a lot tougher/less ubiquitous (there's a critical mass of players, though I suspect the skins have a lot more than that RIGHT NOW, but that number is pretty high when you're looking at 4-8 tablers), Party lose out on that revenue stream.

If the majority of those players move to Party from the skins, then Party aren't going to lose money, they'll infact make more due to getting all the rake instead of whatever percentage deal they have with the skins.

The breakeven players mentioned above are high volume, and Party makes 90% of its revenue from 10% of its high volume players. They'll be disproportionally hurt by these players not playing as much/anymore/losing.


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A mass amount of Party players are looking for somewhere else to play

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Certainly the players on skins for rakeback are going to be looking elsewhere, but that may well be Party with rakeback, if that happens. The highstakes games on the skins don't really exist at the moment too, they've lost their critical mass of players. Likely the same for other niche areas, like non holdem games.


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Pokerstars is super exited about this move

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If the high volume players on rakeback deals from the skins move to PS, we make more money. Lots of people play Party purely because of rakeback. If any game loses out due to lack of critical mass, the players will likely end up on PS too.

Party's tagline as the most popular site is also in doubt now, but we'll see how that shakes down in the next week or so. Good for PS to be able to deny Party one of their slogans.


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Pokerstars could gain 2 million players if they offered something good right now

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Well, could gain some of those top 10% that provide 90% of revenue, which is always good. If I were in charge, I'd be offering a deposit bonus for Monday. I'm not in charge though :]

[Arnfinn Madsen]

I think your analysis is close to correct. Their direct income will probably increase. They still have critical mass for many games which the skins will not be able to have, attracting players towards Party. They have more fish than the skins (I assume) and that will also draw some people over. I think however their income from the skins will drop since a lot of players think rakeback is free money (although it is only a discount) and I think a lot of them will stop playing.

[Sciolist]

Oh, I forgot - they just upset a lot of those 10% players. That can't be a good thing, even if they were only getting a percentage of their rake.

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Oh, I forgot - they just upset a lot of those 10% players. That can't be a good thing, even if they were only getting a percentage of their rake.

[/ QUOTE ]

Where did you read that they make 90% of their revenue from 10% of their players? That seems incredibly high.

Also you are assuming that the 10% are all on other skins. I would guess that a majoirty of the 10% are in fact on party, which skews the numbers in partys favor.

[Sciolist]

It was in their financial prospectus with their quarterly results. You're right, not all 10% are going to be on the skins, but I would say that a higher proportion of that 10% were on the skins vs. party compared to any other segment of the player population.

[gergery]

i may have missed something in all the threads....
why is rakeback going away? Can't you just continue to play on Empire/Eurobet/etc. and get your normal rakeback?
or did affiliates say Empire etc. will not pay rakeback now that they're separated from Party?

-g

[ QUOTE ]
i may have missed something in all the threads....
why is rakeback going away? Can't you just continue to play on Empire/Eurobet/etc. and get your normal rakeback?
or did affiliates say Empire etc. will not pay rakeback now that they're separated from Party?

-g

[/ QUOTE ]

Yes, you can... but you can't play on the same tables that you can over at Party anymore. So the skins will have about 5,000 players and only a few hundred tables, making game selection awful.

[Lafortezza]

[ QUOTE ]
i may have missed something in all the threads....
why is rakeback going away? Can't you just continue to play on Empire/Eurobet/etc. and get your normal rakeback?
or did affiliates say Empire etc. will not pay rakeback now that they're separated from Party?

-g

[/ QUOTE ]I don't think rakeback is going at all. If you play Empire or similar skins you'll still ave your current rakeback deal. But you're only going to be playing against other players on skins/affiliates, not against the bulk of the pure Party Poker fish.

Therefore your games on Empire will be alot tougher. Your rakeback might stay the same but your BB/100 will probably suffer.

I was playing Omaha last night, average pots on a saturday evening are usually $12-$20, last night on Empire they were $4-$10, and zero tables running above the PL$200 level.

[theben]

i dont think stars offers RB and i wouldnt expect them to start doing so.

i think this move may decimate the other party skins unless they all re-merge. i dont expect very many people who played full time through the party skin to leave party. the people who will leave the PP network are the players on the other skins like EP and EB

[pzhon]

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The breakeven players mentioned above are high volume, and Party makes 90% of its revenue from 10% of its high volume players.

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Your definition of "high volume" is wrong. 90% of Party's players play 3 hours a week or less (my rough guess). More than half don't play in each month (Party's data). The majority of the 10% of players counted as high volume are losing, 1-tabling fish. Very few are winning multitablers with rakeback. The percentage of Party's revenue generated by players with rakeback is microscopic, nothing close to 90%.
<ul type="square">"During the first six months of 2005, income from 'skins', or third party websites which utilise on of the Group's gaming platforms in return for a fee, represented approximately 3.6% of the Groups's poker revenue (2004: 2.3%)." (http://www.partygaming.com/images/interim_results_fy2005_06_09_05.pdf)[/list]
That 3.6% includes many fish. The amount attributable to players with rakeback is, of course, even smaller.