Baby steps
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As one of the giants in the egaming industry, bwin.party’s move into social was expected to be announced with a bang, but the acquisition of a barely known Ukrainian developer felt to many like more of a whimper. Robin Harrison asks whether the €40m outlay on Orneon Limited will be enough to establish the operator in an increasingly vital sector
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n the social gaming industry, where operators are being snapped up for sums north of US$100m – IGT’s half-billion-dollar purchase of Double Down Interactive the most eyecatching – €18m ($22m) may seem like small change. €18m for a Ukrainian development studio, which helped to create Playtika’s ?agship product Slotomania, before the social operator was snapped up by a rival egaming operator for upwards of $100m, seems like a very good piece of business indeed. Bwin.party co-CEO Norbert Teufelberger’s assertions that the operator’s social gaming purchase would not be “an aggressive acquisition” proved to be right when the deal to take charge of Orneon was announced at the end of May, with the formation of social subsidiary Win Interactive under the dayto-day management of former Mytopia CEO Barak Rabinowitz, but ultimately under Teufelberger’s stewardship. Bwin.party has stressed that its social investment will not exceed €40m with costs of around €10m to hit the operator’s bottom line in 2012 and 2013. It is a remarkable turnaround, especially from Teufelberger, who previously admitted he “never believed [social] was something that’s going to materialise and … underestimated how powerful it would be.” For such a large egaming operator to take such a tentative step into the social gaming sector may appear cautious, but potentially safer, than IGT’s
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€40M
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bwin.party’s total investment in social gaming
$500m splurge on Double Down Interactive. While a major gaming supplier, IGT is not an operator, and while it can provide best-of-breed technology it does not have the customer acquisition and marketing experience, especially in social, where companies must constantly ?ght to acquire new customers and build up revenue with players shifting their attention – and wallets – between a vast range of competitors in order to make any sort of revenue from the vertical. Ivor Jones, analyst at Numis Securities believes this relatively small investment may be suf?cient to allow the company to establish itself in the social sector: “Time will tell, but the two components of success in social seem to be a great idea and the technical infrastructure to make this idea available to a wide range of players. “We have seen that great ideas can come from a handful of people – ‘Draw Something’ is the prime example – so thinking of something clever and making it work can be done without a huge team. “bwin.party have been clear that they’ve had their great idea, which is to monetise existing gambling products, that people know very well, in the social arena. They’re not going to reinvent roulette or slot machines or their other real-money products, but are going to launch social variants of those, so the idea bit is done, and now they need to ?nd the people with the technical capability to deliver that to a customer base. With the business they have bought, they have a lot of very skilled people, who understand how
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