It’s been around, but skill gaming is just getting started

History - a snapshot of offline skill gaming

Skill gaming, or competitive gaming, has had a long established legal, social and commercial history. Games of skill (whether be it in sports, board games or card games) date back centuries and have offered players opportunities to compete with each other based on their abilities. Indian and Persian kings often played chaturanga (chess) and chaupar (ludo) betting riches and land with each other. While cards were invented in China, poker became a nationwide phenomenon in the U.S. in the 19th century as a skill game, where considerable coin was bet on. Once the internet became widespread at the turn of the century, it was natural to translate this phenomenon to the online world.

Online gaming: Strong demand, poor business

At the turn of the millennium, a multitude of companies tried their hand at skill gaming. Disney invested millions in skillgames.com, which ultimately shut shop quickly. King.com, launched in 2003, recorded 350M games played in 2009, making it the largest skill gaming platform for years. MSN & Yahoo were involved as third-party distributors of games back then. Worldwinner and Skilljam, launched back in 2001, ended up merging with FUN Technologies and later with Liberty Media’s Game Show Network. With the exception of Worldwinner, which changed hands multiple times, none of the above forays survived. In recent times, Tripledot Studios attempted to enter this market only to retract.

Yet, interestingly, almost all the companies saw massive early success. This is indicative of the high global market need for people to play fair games where their ability defines victory. Retaining players and building a long-term business, though, was a completely different ball game. No company embodies this high rise to success and subsequent fall due to unstable core metrics than Skillz, which peaked at a $3.5 billion valuation in 2022.

The common denominator amongst all of these companies is → they ran asynchronous games & tournaments.

Demand for synchronization

Most innovation in this space lies largely in the realm of payout structures, UI/UX design, brand partnerships or efficient marketing. While these are great problems to solve for, the big shift in skill gaming happened when people started getting instant results. The two companies that have been roaringly successful - Avia Games and Papaya Gaming - figured out the fix within asynchronous games. Both ensured that games had fairly instantaneous results. The flip side was that Skillz has accused them of allegedly relying on bots or historical gameplays - not on instantaneously live players. While the courts will decide the truth and legality of this, these two companies have built close to $1B annual revenue empires.

Poker, probably the only pan-global successful online skill game, is always played live and synchronous. This solidified the hypothesis that synchronization is what drives retention.

Interestingly and recently, the Indian skill gaming ecosystem exploded, growing at a rapid pace. This was fuelled by a multiplayer synchronous turn-by-turn game - Rummy. India has seen multiple billion-dollar companies rise at the back of this game. With the number of skill gamers in India almost 20 times that of the US, getting liquidity was not that challenging. Like in Poker, third-party rummy exchanges emerged that managed to pool liquidity at higher entry fees. On the back of Rummy’s growth, locally popular synchronous games, such as Ludo and Snakes & Ladders also saw resounding success.

It became abundantly clear that a solution for liquidity would make the industry boom, and skill gaming could turn out to be the land that was promised.

Future of skill gaming

There is enough evidence to confidently predict that the future of skill gaming, and perhaps all real money gaming, is live multiplayer. Imagine nostalgic, age-old games with high player recall like Uno, Dominoes and Monopoly, tweaked with skill mechanics, become a reality in real-money gaming. Popular free-to-play game mechanics deployed in 1v1 titles can also be now implemented in competitive gaming.

Live multiplayer skill games are set to catapult the industry to new heights—an industry long established, but only now truly beginning to unlock its full potential. At toast, we build turn-by-turn synchronous games that are liquidity solved from day zero for our partners.