1) Adam Krejcik of Eilers & Krejcik Gaming gave a presentation on the social casino industry. 2) The social casino market has grown from $1.3 billion in 2012 to $4.5 billion in 2017, driven by the shift to mobile. 3) Playtika has increased its market share and remains the largest social casino publisher. Conversion rates and monetization are expected to be key drivers of future growth.

1. Casual Connect USA 2018 Presentation
Adam Krejcik, Principal, Eilers & Krejcik Gaming, LLC
January 16, 2018
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of Eilers & Krejcik Gaming is strictly prohibited
Social Casino Industry Review & Outlook

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Eilers & Krejcik Gaming, LLC is a boutique research & advisory firm focused on servicing the gaming equipment,
technology, and interactive gaming sectors within the global gaming industry. Products and services include market research,
company research, and advisory services designed specifically for traditional land based & online casino companies, gaming
technology providers, digital & interactive gaming companies, and institutional investors.
• Market Research - proprietary market research offering includes multiple surveys and internally developed reports that are
designed specifically to track key industry and product demand drivers, operating metrics, market share trends, and
technology adoption rates.
• Company Research - company research offering includes the active coverage of all major gaming equipment and
technology providers, as well as social gaming companies.
• Consulting & Advisory Services - consulting & advisory services division provides a wide range of customized research
products and advisory services for both gaming companies and investors including, but not limited to, M&A advisory,
customized surveys, new market analysis, asset valuation, and competitive landscape analysis.
About Us

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Social Casino Market - History
Five key trends over the past 5-years:
1. Shift to mobile
2. Playtika’s dominance
3. Gaming suppliers & land-based slot content
4. M&A wave
5. Steady as she goes…
Social Casino Market – Review
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
2012 2013 2014 2015 2016 2017
Social Casino Market Size ($Bln)
Desktop Mobile
$1.3bln
$4.5bln
5-year CAGR = +28%
Source: Eilers & Krejcik Gaming, LLC

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Social Casino Market - History
Shift to mobile in retrospect is one of the most obvious trends, BUT it’s easy to forget that in 2012 & 2013
Facebook was the dominant platform and a lot of companies were making a lot of money. Those who
pivoted too late or did not properly allocate resources to mobile have now mostly been forgotten...
1. Shift to Mobile
Source: Company reports, Eilers & Krejcik Gaming, LLC
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2013 2017
Social Casino Market Size
$ in millions
Facebook Mobile
CY13: FB = 59% of market
CY17: FB = 23% of market
Missed opportunities:
Publisher Mrkt Sh. CY13 Mrkt Sh. CY17
Blue Shell Games 1.3% 0%
Diwip 0.8% NM
Plumbee 1.2% NM
High 5 Games 2.7% 1.2%
Gamesys 2.0% NM
NM = Not meaningful
Diwip was acquired and now owned by Tangelo Games
Plumbee was acquired by GSN Games

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Social Casino Market - History
• Playtika’s market share has increased from 15% in CY13 to 26% in CY17
• Revenues have grown at CAGR of +41% past 4-years vs. industry average of
+22%
• #1 grossing slot game (Slotomania), #1 grossing bingo game (Bingo Blitz), #2
grossing poker game in (WSOP)
• EBITDA margins in excess of 40% (making it category leader)
• $4.4bln exit in CY16 (largest social casino exit to date)
2. Playtika’s Dominance
* Pro-forma includes Double Down Interactive
Source: Company reports, Eilers & Krejcik Gaming, LLC
Playtika
15%
Double Down
12%
Zynga Inc.
(social casino
only)
11%
SciGames
Interactive
5%
GSN Games
4%
Other
53%
Social Casino Mrkt Share - 2013
Playtika
27%
Scientific
Games
9%
DoubleU
Games*
9%
Zynga
7%
Product
Madness
7%
Other
41%
Social Casino Mrkt Share - 2017

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Social Casino Market - History
Key theme: Land-based content serves a key competitive advantage due to superior monetization
(better Math), retention (familiarity with certain slot titles).
3. Gaming suppliers & land-based content
Source: Eilers & Krejcik Gaming, LLC
M&A Strategic Partnerships & Other Licensing
Publisher
ARPDAU
(CY13)
ARPDAU
(CY17)
% uplift
Aristocrat /
Product Madness
$0.16 $0.56 250%
SciGames
Interactive
$0.29 $0.42 45%
Double Down
(formerly owned
by IGT)
$0.40 $0.52 30%
High 5 Games $0.45 $0.65 44%
Gaming Suppliers ARPDAU Lift
Screenshot: Cashman Casino Featuring “Lightning Link”

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2011
2012
2013
2014
2015
2016
2017
4. M&A Wave
Over $8bln worth of M&A transactions in the social casino sector over the past 6-years.

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Social Casino Market - History
Perhaps biggest surprise over past 5-years is how little things have actually changed:
• The oldest social slot game (Slotomania) still remains the biggest and most popular today
• Zynga’s oldest game (Zynga Poker) still remains its most popular/biggest title and the largest poker game in the
market
• Playtika’s remains the largest social casino publishers and most of the top-10 publishers remain familiar (albeit there
has been considerable consolidation)
• Growth has been amazingly consistent (5-year CAGR of +28%) and industry has never seen revenues decline on a
sequential basis (per our tracking)
• Industry has largely avoided any meaningful regulation and or negative Press (in fact media coverage of this sector
remains nascent)
• Despite some early attempts and predictions, social casino never converged with RMG and remains an independent
category with no signs of cannibalization
• Land-based casino operators have increased their exposure (largely through B2B/white-label and few
investments/M&A), but are not major players in this industry. And land-based slot content still remains “exclusive” for
social casino.
5. Steady as she goes…
M&A

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Social Casino Market - History
Three key trends to watch over the next 5-years:
1. It’s all about conversion and monetization
2. Small changes (lots of them), but big rewards
3. Crossing over or morphing into other sectors
Social Casino Market – Outlook
$3.0
$3.5
$4.0
$4.5
$5.0
$5.5
$6.0
$6.5
$7.0
2017 2018E 2019E 2020E 2021E 2022E
Social Casino Market Size ($Bln)
$6.5bln
$4.5bln
5-year CAGR = +7%
Source: Eilers & Krejcik Gaming, LLC

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Recent growth in the social casino market has largely been driven by higher monetization rates as user levels have largely
remained steady. Looking ahead we don’t believe this dynamic will change as the social casino market becomes increasingly
saturated.
User levels (LEFT CHART) among top-publishers have been steady, BUT monetization (RIGHT CHART) has been rapidly increasing…
Paying player conversion rates for F2P MMO’s in Asia:
• China = 7-10%
• Japan = 10-12%
• Korea = 12-15%
• World of Tanks (popular F2P MMO Tank game) is rumored to convert 25%+ of its active users to payers.
We estimate social casino industry has average paying player conversion rate of approx. 3%. By our calculation, increasing
the paying player conversion rate by 100bps (ex. from 3% to 4%) would drive a 30-35% increase in total revenues (assuming a
constant monetization level).
Outlook – Conversion & Monetization
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
DAU Trends
Playtika DoubleDown
SciGames Interactive Aristocrat/Product Madness
Zynga (social casino only)
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
ARPDAU Trends
Playtika DoubleDown
SciGames Interactive Aristocrat/Product Madness
Zynga (social casino only)

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Social Casino Market - History
Improving conversion rates and driving higher monetization is “easy” to say in principle, but much harder to execute. While we
do not profess to be product experts, our discussions and analysis leads us to the following conclusions:
• Rising tide should help lift all boats. Our thesis is that consumers and especially younger generations are becoming
increasingly comfortable with the ‘freemium’ model (i.e. making in-app purchases for entertainment experiences they deem
as valuable). In our opinion, all forms of entertainment should see a gradual rise in paying conversion rates as mobile users
become more accustomed to consuming content in this fashion.
• Small changes can lead to big rewards. One notable observation from following the social casino industry over the last 5-
years is that you don’t need to be disruptive to be successful. In other words, the companies that are growing or even
successful new incumbents are largely making lots of small tweaks to products and features. We are not dismissing the
importance of having good content, but rather we believe the key is constant optimization. In terms of specifics, we believe
companies that can excel at live operations, predictive analytics and machine learning for A/B testing and user acquisition
will be well positioned for future growth.
Outlook – Small Changes Can Lead to Big Rewards

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Social Casino Market - HistoryOutlook – Crossing Over into Other Sectors
Social casino companies expanding beyond “casino” the genre as evidence by Aristocrat’s recent acquisitions of
Plarium and Big Fish, Playtika’s Vegas Words (slots + Puzzle game), Playstudios & King Digital partnership.
Additionally, companies like Murka have begun to explore “cross-over” appeal by incorporating RPG type elements into classic
slot games e.g. Scatter Slots has quests & missions, and dark/gothic feel to the game, which has helped it appeal to a
younger/male audience.
Finally, non-social casino companies have also been incorporating “gambling” like features into various game genres, most
notably “loot boxes” which is essentially just a simple slot machine. Unsurprisingly, this feature has proven to be a highly
effective monetization tool, but also attracted a lot of controversy.

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Questions?
Contact info:
Adam Krejcik
Eilers & Krejcik Gaming, LLC
714.619.9330
akrejcik@ekgamingllc.com

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