acquisition hire, companies pay about a million dollars per person, and they have done it for around a tenth of that. “It’s quite an unusual approach in that there are lots of companies out there which can be acquired, that already have a strong portfolio of games, but [bwin.party] went for the development potential. Every single day we see companies which are struggling to ?nd good engineers, and this seems to have been purchased a whole studio of them for a small fee, so it’s really a good win for bwin.party,” Janssen said. Just as IGT CEO Patti Hart has taken a massive risk in spending half a billion on Double Down, it can be argued that bwin.party is taking an equally sizeable risk by spending just €40m to enter a sector which is already hugely competitive, with pure social operators being able to amass huge player volumes operating the same product variants that bwin.party is looking to launch. However, Rob Stevenson of Hooplo Media believes high spend is no guarantee for success, and though a higher outlay may disrupt the sector, this may not have the desired effect of quickly establishing a social company: “It really doesn’t matter about the money – it matters about the people and the technology. Clearly we’re at a watershed moment in social where mobile, Facebook and online are starting to evolve. Social is a ‘new’ channel of revenue and games – separate from other verticals, rather like 1993-4 when online gambling emerged.” As it is starting from scratch, bwin.party will need to rapidly build player volume if it is to work on the “freemium” model as it has pledged; drawing revenues from virtual currency sales supplemented by advertising revenues and brand partnerships. However, in order to acquire these players and deliver the “attractive returns in the medium term” as planned, it will have to invest heavily in advertising to bring them in. these products work, so they have essentially done that,” Jones explains. A good deal? Ryan Janssen of venture capital group M8 Capital, meanwhile, argues that the deal’s most striking aspect is not the acquisition itself, but how it was done: “I think it is of note, but the size of the deal means that the Double Down purchase will be getting most of ????????????????????????????????????????qQ????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????m=????t?????????U????????????????????)]????????????I???????????Q?????????((?((??((?()% P???????????????????????????????e??
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