There is a popular prediction about online poker’s future that concludes tat this once smoky hot industry will slowly cool and eventually end in optimum strategy entropy. Heat Death. Too many players will become so good that there is no longer enough room to realistically outplay and outwit seasoned players. And on the other end of the scale, newcomers will quickly suffocate under the intense pressure of facing such superior players. The action will gradually deteriorate until nothing but digital shouts of “seat open” remain to break the stillness. I refer to the point at which this theory becomes reality as “peak fold”.
During the last five years, concerns over the increasing skill gap shows that this theory has lefs. The industry has been moving in that direction. Fast. There is genuine risk of market contraction due to reasons associated with it. We’ve probably seen it happen several markets already.
Lately I’ve even picked up some murmurs that amount to the equivalence of “peak fold” already being reached and the trend, thus, being close to impossible to reverse. Over the years I myself have certainly added fuel to that fire. But unlike my usually rather gloomy predictions I’d like to spend this post arguing for why we’re actually in slightly better shape than we used to be and that the trend line, while perhaps still not moving in the right direction, is at least levelling out.
In measurable terms “peak fold” is the point in time at which the “flops seen” percentage in an individual room or the market as a whole drops below where the current player liquidity is sustainable. Players are too bored. Games are too hard. Opportunities to rake are too scarce.
I use the “percentage of flops seen” variable for three reasons:
(a) it measures time waste and inaction
(b) it’s a good first indication of overall skill level*
(c) no flop no drop. Great pre-flop action may indeed be entertaining, but it will not generate revenue.
* I suspect that game theory applied to an environment where all the players are very good would conclude that lesser, not more, starting hands are actually folded. So the curve jolts at it closes in on heat death. Like a dying breath. I’m sure someone can deny or confirm this based on the toughest games played online or offline.
So at what actual overall “flops seen” percentage does entropy set in?
I don’t know. I’d love to be involved in trying to figure it out though – if possible to determine based on just this one variable. Generally I think people underestimate how insulated from changes in overall skill level (to use one example) the average player is due to perfectly understandable irrational decision making and due to having motives for playing that industry pundits tend to ignore.
On the other hand I think people also tend to underestimate how grave the situation was.
But this post is not about working out the true peak fold breaking point. All I’m claiming is that disaster has been averted, folds have, for the time being, possibly peaked and the temperature in online poker rooms is on the rise again.
Before proceeding it is important to note that that peak fold has nothing to do with overall market size. Peak fold deals with player liquidity quality not quantity. The closer to peak fold the market or any individual room is, the higher the risk of that market or business, regardless of size, grinding to a complete stand-still.
Insufficient liquidity can obviously kill a room even if noone ever folds.
Why this change of heart?
Mainly because I think fundamental peak fold conditions have changed. For a long time the fundamentals were scary. But the effects weren’t felt because of the rapid growth in new markets. Once the major, legally accessible markets, matured, the true effects – like high player churn and high retention costs – were felt. At first companies clawed and scrambled to re-enter, re-invent and re-focus markets in order to keep the burners going.
Lately, the have wisely turned to the fundamentals.
Less focus on promoting poker as a skill game
Poker’s unique skill aspect has been recklessly exploited. The natural arms race between players willing to try everything to gain an edge has not been stemmed and, even worse, the perception of who a real poker player is and how he or she should play the game has been bastardized into something that alienates many potential customers.
Introduction of fun-focused poker games and features
Recognizing the above has led companies to dare challenge industry norms and introduce fun-and-gamble injected play opportunities such as spin-to-win Sit & Go games first launched by Winamax (Expresso).
Sites have become better and optimizing player value chains by, for example, weeding out affiliate deals that no longer (or ever) justify the cost.
While many desktop software are still woefully poor at catering to a wider demographic (Unibet launched a product this year that is promising), online poker sites have done a good job of delivering on the mobile front. Pokerstars full-range mobile game is a tremendous standard bearer and Partypoker’s in beta fastforward:special edition game is an interesting example of fully customizing the online poker experience for the smartphone market.
For the trend to truly turn, suppliers need to find better ways of dealing with table scripting, data mining, HUD software, massive multi-tabling and bad player conduct and they need to step up innovation so that the decision to play a hand or not is governed by more information than can be find on a basic starting hand sheet. Lastly they also need to get the word out that things have in fact changed. The online poker world no longer belongs to an exclusive few.
But credit where credit is due. Progress has been made and average Joe can have a more fun playing a hand in 2014 than he could in 2011. And that, in the end, is what matters.
With new exciting markets on the horizon, I’d hate for the industry revert back to a coal shovelling strategy. This time maybe we can manage to set the temperature just so that dedicated players feel comfortable while new players avoid getting instantly burned.