Replay Poker business model

Replay Poker business model.

Hello, everybody,

English is not my first language, and I am aware that I make some grammar mistakes, I hope you don’t (and/or won’t) mind.

I also hope that the owners of Replay Poker don’t (and/or won’t) mind that I will try to make some guesses about their business model.

I think that Replay Poker is really great page, very user friendly, some improvements probably could be made, but they are decidedly minor in my opinion.

Disclosure: Up to now I have not bought any chips from the RP and I don’t plan to.

I feel a tiny little bit of discomfort, that I am a (kind of) free rider, but … that is the owners choice.

Top ten players have 110 (american) billion chips.

110 000 000 000.

Top three have 62 billion chips.

A player logging everyday gets a 2 500 free chips daily, a million chips after 400 days.

Obviously, a lot of players lose their free chips, which subsequently, let’s say, trickle up (somehow against gravity), or they simply migrate to the stacks of better players.

Still it would take one hundred and ten thousand players logging every day for 400 days and losing every chip to built bankrolls of the top ten.

Therefore I believe that considerable part of the top ten stacks (and probably many other players in the top hundred, top five hundred, top thousand) are chips which were bought and lost by other players.

If it is 50% of the top ten stacks, it is an equivalent of ca 1 577 000 US dollars (assuming that chips were mostly bought in bulk - 3 500 000 chips for 100 dollars).

If it is (only) 20% of the top ten stacks it is an equivalent of ca 630 000 US dollars.

Let’s add (rather conservatively, I suppose) another 600 000 USD for the stacks of players ranked 11 to 1000.

Probably spread over some years.

So it’s probably at least 1,2 million USD spread over, say, five years.

20 thousand dollars per month for maintenance and maybe some profit.

Or maybe 50 thousand dollars per month, if stacks of the top one thousand players are 50% made of chips bought (mostly by other players).

So, I suppose that the owners are able to pay their bills and feed their families.
[;-)]

And I don’t have to feel morally obliged to support them by buying chips.
[;-)]

Any comments?

B.

It was nice to have met you.

3 Likes

Very interesting.

Like the lottery…

Guaranteed, someone/something has deeper pockets

'gotta be in it to win it.

As an “Online Poker Player”…

My gut says 80% or better Replay would eventually be bought out for big $$$$$
Just for competition sake

And if you’ve ever played against me…

You know how conservative I am…

Where can I invest a few $$$$$$

I think you’re aiming rather low with your projections of RP’s income. Based on their About Us page, I count 16 employees, many of whom have technical qualifications that don’t come cheap. If they average $35K per year - on the low end of the PayScale “Computer Programmers in London, UK” range - that alone would run $560K per year. Add in office costs, server maintenance, employee benefits & bonuses, and that some of those employees are manager-level and up, you’re probably looking at an excess of $1M per year to keep the site in the black.

While I also haven’t purchased chips and don’t intend to, I try to give back to the community in other ways - blogging, streaming (still in development), and of course contributing on the forums. This may not directly put cash in the pockets of the people who run the site, but my hope is that the stronger community will draw more people to the site and make it more likely for others to spend money here.

As for expecting Replay to get bought out… color me skeptical. The site’s been around for close to 15 years. Most PE ventures have a roughly 5-year time horizon. Startups might run a bit longer, but rarely more than 10 years. If their end goal was a pile of cash from an investor, it probably would have happened already.

3 Likes

Understood

You might be correct indeed

What the hell do I know?

I hereby swallow my words

LOL

I thought Golden Nugget had it back then.

It was all marketing

Here I am

? years later…

@ Replay

With a few others…

flawed logic…Would you be obliged if the site was losing money?

Yes, obviously employees have to be paid market salaries.

So your estimation is better.

I have checked bankrolls of around forty players with ranks 11 to 1000, and have done a better estimate of their combined bankrolls.

It is 250 billion chips, not another 110.

So the combined bankrolls of players ranked 1 to 1000 is ca 360 billion chips, not 220.

Also probably not all chips are bought in bulk - 3 500 000 for 100 dollars.

So I assumed some mix of chips bought for 5/10/20/50/100 dollars and estimated an average cost of ca 48.000 dollar per billion chips.

With these estimations, if 50% of combined bankrolls of players ranked 1 to 1000 were paid for, and income again spread over five years, it would be ca 1,7 million dollars per year.

If only 20% of combined bankrolls were paid for, it would be ca 700 thousand dollars per year, more/less enough to cover salaries of 16 people.

B.

Obviously it was a little tongue in cheek. (As evidenced by emoticons [;-)])
The owners can always choose to charge a flat monthly fee from every player.
Since they are not doing it, they apparently believe that current model suits them.

B.

I have seen 1-2 players drop 1-2000 $ in 2 days, so there has to be more I don’t see. Also @heyortin , Replay was sold… in 2006 to the current owners. Now @bertbakar , It was only recently that staff was add’d as they need’d more programmers to do thier HTML5 update. I can rember “staff” being in the 7-8 ppl range, not too long ago.

I know my 40m wasn’t bought. You also need to understand, (so I’ve been told) Replay used to be restricted BR, and they switched to unrestricted tables.

Its not like I lose chips to Ilovecat, but its a trickle up economy. the 1m player loses to a 10m player who then loses to a 100m player, who then loses to a 500m player who loses to a 5b player. Add to that , that 10 yrs ago 50$ might’ve bought the same 3.75m chip pkgs. ( don’t quote me on that, its only a guess )

Did you include all the promotional chips given away ? That too adds up over time, not to mention the “top off” chips just like the Daily bonus does.

I don’t see adverts here, so I guess enough is there to keep the lights on. What I haven’t seen over the last 3+ years is a measurable increase of players online. I would’ve expected by now, for there to be @least another 1-2000 players “online”.

Replay runs a pretty tight ship, and usually stays lean-mean. None of us know, unless we were here, how the growth from the beginning took place in # of chips. Sites like WSOP and others have launched after I joined ReplayPoker. Player retention is a huge deal, sure # of unique visits is important, but once they walk in the door you need to keep them around, and relatively happy.

Nowadays, “data” gets monitized and sold or shared for a profit. Noone reallly knows what data brokers charge, well not the general public doesn’t. Nothing is truly free. Companies like Google, will share or give away technology in return for “data”.

On the flip side is Replay. If there is 10,000 unique visits per day, and Replay earns $10 from 5% of them ( or equivilent ), thats 5k per day or 150k per month. I might believe that costs approach 100k per month, thats 50k profit or 600k per year. That doesn’t include any income for data.

Player aquisistion, player retention, unique visits per day, ave players “online”, ave % of players that buys chips, and inflation itself of the Replay economy… I’ll bet are the big metrics Replay cares about. Obviously they make enuff to keep the lights on. I hope they reinvest some profit back into Replay to aid in the above metrics.

100k per month is inline with WannabeCoder 's approximation of "in excess of 1m per year. ( its 1.2m per year @ 100k/month )

I for 1 don’t care if Mr. Replay and ChaseTheRiver are making $ hand over fist, I more worry about “players online” and “Chip inflation”. Even if there is 2000 players online and 1500 are “seated”, thats still over Rings, SnGs, and MTTs. Just like Skiing, if you aren’t going fast enough, the physics just don’t work… same goes for Replay, if you don’t have enough “players online/seated” then the playerbase is so splintered that none of it works @ its peak performance.

Judge’n by what tables are the most filled up, my guess is that Replay makes far more from selling 10-20$ chip pkgs ( and should ) than selling 100$ chip pkgs. Its another reason I think currently tables are un-restricted ( bankroll wise ). That allows higher players to drop levels and absorb alot of those bought/free chips and take them up the food chain. It also slows down the overall migration of players vertically… BUT
the better players will ALWAYS “hoover up” lower players’s chips. Who then in turn do the same thing to even lower players. I have seen and know of a few players who can either rebuild thier Bank quickly , or just rip thru levels on thier way up. Taking both bought/free chips up with them.

There is still huge potential for Replay to grow. If the HTML5 update goes well, and mobile users are not left out in the cold, I can see Replay double’n thier “players online” in the next 2 years. But they will not be able to retain all those players, if they don’t keep as many players Happy & Interested in playing daily. If that occurs they also would double thier profit margains.

It starts to get boring if you have to play against the same 'ole players all the time… or if the Promotions/offerings are basically the same thing. Replay has made great advances in the Leagues aspect. ( not the private leagues, the main ones ). This is 1 reason replay has expanded into the streaming aspect. Everyone wants thier 10 minutes of Fame. And if Private Leagues are marketed to Companies, then thats another huge market currently untapp’d.

Remember this is a UK company, but the US market unlike the European market… cannot play for real $$$ online and needs a free-chips environment the most. The biggest threat to Replay is if the US market all of a sudden could play online poker for real $$ easily with no stigma attached.

All-in-all ReplayPoker keeps the lights on, and is expanding, so thier Buisness Model must be working on some level, or we’d be barraged with Adverts.
Sassy

3 Likes

I occasionally throw something in the tip jar whenever I’m feeling a little guilty.
I, probably like most people, have subscriptions for other stuff I enjoy (ie Netflix, online magazines, etc) that total over $50/mo so why not try to support one of my funnest pastimes? :slightly_smiling_face:

@Sassy_Sarah

I suppose that if a player logs in with dedicated mailbox and dedicated password (preferably neither “QWERTY” nor “123456” [;-)]) it is a little more difficult to gather his/hers data than when he/she logs in via Facebook.

But managing passwords is such a pain …[;-)]

I can not evaluate how probable is that the owners of RP gather and sell the data and if they do it how big or small part of their income comes from that source.

At the risk of garnering the ire of the RP gods I will share the following.

IF, RPs long term goal is to remain a “free” site, then I commend them for the product offered for the price point.

If, RP’s long term goal is to eventually move over to a cash site (like in hoping it becomes legal again in the U.S.) I for one won’t be playing here, UNLESS between now and then (if there is a then) ALL the kinks get worked out. I’ve played here for years and rarely have I seen problems, but you can’t have ANY when people are playing for real money.

Example. I was playing a tourney, at the final table with only three other players, was the chip leader, got dealt the nuts and had all three players go all-in in front of me. Of course I pushed and was immediately kicked off the table. To get back I had to close the program, re-open it, and by the time I got back my NUT hand had been folded and rather that sweeping the table I doubled up two other players, who took out the third. I can’t see myself ever purchasing real money chips knowing such an outcome could occur again.

Since it was RP I was peeved for a few minutes and then went to change the oil in my truck. The point being, I don’t know, and don’t need to know, what RR’s long term business plans are, BUT…

1 Like

Have you ever heard of tracking cookies, data brokers, DoubleClick ( the entity ), IP adresses, or whats called “Big Data” ( like big pharma, and big oil, big brother ) ??
Have you watched @ bottom of your browser, to the left, as pages load… what sites are touched or where data comes from? I know 60 minutes, did a piece on “Data Brokers” and so has PBS done a few on a variety of related topics.

Take Google, what is the #1 reason thier search works better over time ? As they accumulate data, thier algorythms work better. Normally someone would say , well if you’re looking for a needle in a haystack , last thing you want is a bigger haystack. In Google’s world, its inverse, they want the biggest honk’n haystack they can get.

The US government has always monitored the public libraries, thru library cards, so they know what ppl are reading about or @least checking out.

Your local supermarket offers you a loyalty card, usually you have to sign up for it… but lets say you don’t… lets discount facial recognition, but you better pay for every purchase in cash, or you cannot remain annonymous. Pay just once with a debit card, or any other form of plastic, or even pay with your phone… and your info is now added into and cross referenced with your shopping habits.

Just like Splitt’n the atom… both nuclear power and atomic bombs were born. For every technology there is a good side and a bad side. As far as Data goes, it might be fine is someone knows everything you do… As Long as , they don’t know Who you are.

The more independant ways Big Data can touch you, the more ways they can know what you’re doing 24/7/365, by linking together everything you do. Don’t even get me started with anything IoT ( internet of things ).

I don’t know ReplayPoker’s data policy, and I don’t care. If I do anything other than come here to play poker, online… then before I do I clear my cache/cookies completely. I basically practice “safe internet” protocols. I can make assumptions on how Replay is connected, just cause of what I see “loading” when I switch pages or log-in. In the end they are my and my alone assumptions, and are here-say.

God bless all those ppl who do pay into Replay to keep the lights on, if there was a way to remain annonymous and still donate to Replay I would, just remember when any site offers “FREE” there’s always a catch. Personally I find it more challanging to start with nothing and build my bankroll from other players’s mistakes.
Sassy

2 Likes

@Sassy_Sarah

I should add in the previous post that obviously players who buy chips provide RP with their bank account number and a real name.

I am aware of all (or most) of the problems you mentioned.
And I do see google analytics being loaded when I log in.
In real life I pay cash whenever I can.
And I try to avoid providing any information about myself online unless absolutely necessary.

B.

2 Likes

I have never bought chips and do not intend to. Just feels wrong but I do leave the occasional tip to pay for my entertainment time. Not actually sure if the way I play is entertaining though.

Actually RP doesn’t see your personal info, a 3rd party company handles all money transactions.