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State of the Social Casino Industry Q2/Q3 2016

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Delivered at Casual Connect Tel Aviv 2016. Elad Kushnir, SVP Business Development at Playtika, provides an update on the social casino industry for Q2/Q3 in 2016 – along with key insights.

State of the Social Casino Industry Q2/Q3 2016

  1. 1. State of the Social Casino Industry Q2/Q3 2016 Elad Kushnir SVP Business Development, Playtika eladk@playtika.com Nov 1 2016
  2. 2. Social Casino global market leader PLAYTIKA OVERVIEW Founded in 2010 6 Games 13 Platforms 1350 Employees
  3. 3. 14 Global offices; Head Quartered in Herzeliya, Israel PLAYTIKA OVERVIEW
  4. 4. PLAYTIKAS EVOLUTION 2016 Acquired by Giant Interactive
  5. 5. PLAYTIKA IN NUMBERS $725M Revenues in 2015 12 Platforms 20M MAU 60% Rev from Mobile 6M DAU
  6. 6. Market Overview 7 SOCIAL CASINO CASUAL CONNECT TEL AVIV, OCTOBER 19-21 2015
  7. 7. 8 = Social Casino Free 2 Play Business Model CASUAL CONNECT TEL AVIV, OCTOBER 19-21 2015 SOCIAL CASINO IN CONTEXT
  8. 8. SOCIAL CASINO MARKET SIZE 0.98 1.20 1.26 1.21 1.09 0.90 0.72 0.35 0.83 1.52 2.10 2.63 3.08 3.45 1.33 BN$ 2.03 BN$ 2.78 BN$ 3.31… 3.72 BN$ 3.98 BN$ 4.17 BN$ 2012 2013 2014 2015 2016E 2017E 2018E 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 FB Mobile Gross Revenues Source: Eilers Research
  9. 9. INDUSTRY OVERVIEW: MARKET LEADERSHIP Q3 2016 + hundreds more Playtika 25.1% Scientific Games 8.4% Zynga 8.4% IGT 6.7% Aristocrat 6.3% Tier 1 54.9% Tier 2 28.1 % Tier 3 17% Source: Eilers Research
  10. 10. SOCIAL CASINO GENRES SHARE OF TOTAL MARKET 11 79% 13% 7% 1% Slots Poker Bingo Other Game Category Leading Product Leading Company Slots Slotomania Poker Zynga Poker Bingo Bingo Blitz Other NA NA
  11. 11. Source: Eilers Research TOP 10 GAMES BY $ IS SOCIAL CASINO Q3 2016 # Game Publisher Q3 $ 1 Slotomania $105M 2 Double Down $63M 3 Heart of Vegas $55M 4 House of Fun $45M 5 Big Fish Casino $43M 6 Jackpot Party Casino $40M 7 Caesars Casino $33M 8 DoubleU Casino $31M 9 Texas Holdem Poker $28M 10 Bingo Blitz $26M
  12. 12. 13 TRENDS AND REALITIES CASUAL CONNECT TEL AVIV, OCTOBER 19-21 2015
  13. 13. MARKET PLAYERS Casino Suppliers Games Companies Casino Operators Proven Content Platform Experience Brand and Cross Promo
  14. 14. 3 market entry strategies have emerged. SLOT SUPPLIERS ARE “ALL IN” 15 M&A Strategic Partnerships Licensing
  15. 15. Growth from Niche Products 16 TotalPotentialUserBase Total Potential Revenue • Male Oriented • Classic Content • Truly Social Slots • Regional Content Niche Markets Mass Markets
  16. 16. Focusing on growth within the game Shift in Focus for Mature games 17 Loyalty Programs Meta Game Features Monetization Optimization Slots Content Game Economy Optimization Out of the Box Marketing Tactics FTD Conversion Optimization Customer Support One of the biggest upsides is in existing user base. Only a fraction of users have ever paid.
  17. 17. CPI / ROI / WTF? 18 Many More Clear Competitive Advantage / Data and Scale Lacking performance sustainability at scale
  18. 18. 19 MERGERS AND ACQUISITIONS CASUAL CONNECT TEL AVIV, OCTOBER 19-21 2015
  19. 19. M&A Update Q2 / Q3 20 Scene 53 $4.4B $120M$3-10M (Estimated)
  20. 20. Source: Eilers Research M&A TRANSACTIONS 2010-2016 Year Target Acquirer Price Jun-10 $18M-$48M May-11 ~$130M Nov-12 $40M Dec-12 $500M Dec-12 ~$100M Feb-14 $165M Feb-14 ~$85M Jun-14 $100M Oct -14 $100M Nov-14 $885M
  21. 21. Source: Eilers Research M&A TRANSACTIONS 2010-2016 Year Target Acquirer Price March-15 ~$5M March-15 $10M Jun-15 $7.5M July-15 $18M Aug-15 $39.2M Aug-15 DGN Games $27.5M Sep-15 $60M-$110M Nov-15 $26M Feb-16 ~$2M July-16 $4.4 BN Aug-16 Scene53 ~$3M-$10M Aug-16 $170M
  22. 22. TOTAL M&A TRANSACTIONS IN SOCIAL CASINO TO DATE 23 ~$7 BN
  23. 23. THANK YOU! Elad Kushnir SVP Business Development E: eladk@playtika.com

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