IGT-International Game Technology, a multinational giant in pokies and lottery, have recently announced that it has made a deal of $825 million. The deal was made through the sale of IGT’s social casino subsidiary “Double Down” to DoubleU Games, a South Korean games developer.
IGT initially acquired the “Double Down” game for $500 million in 2012. DoubleU was founded within the same year. Creating somewhat of an explosion within the social gaming sphere. In 2012, the Double Down casino game was said to be the most prevalent casino game on Facebook; it further held the overall title of the fourth most popular Facebook game.
This sale is said to have a great significance on the strategic partnership between IGT and DoubleU. The reason this is rumoured is because, the two companies have entered into an agreement of; game development, as well and distribution services. This agreement will ensure that the two companies work in collaboration with one another to enhance the gameplay as well as the experience of gamblers within the gambling and social gaming sphere.
IGT will also have on offer to them, DoubleU’s library of casino games on its combined social casino platforms. However, this comes with some give and take, as DoubleU Games will be receiving continuing royalties to IGT.
The Eruption of Social Gaming
The CEO of IGT, Marco Sala, stated while informing investors, that it was their time to maximise the asset value of the game for their shareholders. After multiple years of constantly improving valuation levels and growth. He further stated that IGT would participate continually in the growth of the social casino market, throughout the period of their DoubleU Game strategic partnership.
Not only is IGT smiling, but DoubleU Games CEO, Ga-Ram Kim, expressed their gratitude for the strategic partnership, by stating that it is a unique and value-accretive one. Exuding confidence, Kim voiced that he believes that DoubleU games will hold the title of global leader within social casinos.
Cash in by Caesars
In 2011, Caesars Interactive Entertainment acquired Playtika, which was an Israeli start-up with a mere ten employees. Playtika was purchased for $90 million, which aroused suspicion. Mitch Garber, head of Caesars Interactive Entertainment, confessed that their long-term goal was to place number one on Facebook in terms of casino and social games.
Under Garber’s watchful eye, Playtika, did just this as it upheaved Double Down from its position of world’s most popular social casino. Playtika was soon after sold by Caesars to a Chinese consortium, for a whopping additional $4.4 billion. Creating a return on investment that totalled $4.31 billion.
This return on investment assisted Caesars in moving the status of its chief operating unit out of bankruptcy. Within the same week, Garber received a pay package of $210 million as a reward.
Although the ROI, did not go so far due to the debts of Caesars, they are not the only ones with such debt. IGT is known to have debt of an astounding $7 billion. IGT stated that the profits received from the sale of Double Down, would go toward reducing their debt. IGT suspect that the transaction will finalise in the second quarter of 2017.