After five years of purchasing the social casino application DoubleDown at the rate of $500 million, IGT has decided to sell it to DoubleU Games. Denying the apprehensions of the high proposed price, financiers celebrated the news that South Korea’s social casino gaming publisher DoubleUGames Co. chose to purchase U.S. social casino auxiliary of International Game Technology PLC (IGT), international chief in gaming systems technology.
DoubleDown Online Casino
It was the firm’s experiment into the online gaming industry, as IGT was approved by Nevada for real money online poker. Although, it never started that platform because of inadequacy of liquidity in an intra-state market with fewer than 3 million people.
In late 2012, IGT also chose to close its European online poker system because of lack of funds. Then, in 2015, IGT merged with Italy-based lottery company GTECH with a $6.4 billion deal. DoubleDown produced revenue of $280 million in 2016, down 11.7% from the previous year along with 14.3% reduction in average daily active consumers who preferred other games such as Starburst slots available at NetEnt gaming websites.
Why DoubleU Games?
It incorporates Vegas-like casino games which draw players by granting a genuine Vegas practice, including slots into social media platforms like Facebook which can be accessed on tablets and smartphones to win virtual money and also play games like Starburst slots. DoubleU Games does not offer offline slots.
The shares of DoubleU Games mentioned on the Korea’s technical Kosdaq market had strike a new 52-week intraday high of 62,200 won ($54.51) on Tuesday subsequent to the announcement of the partnership. On Wednesday, shares closed at 56,500 won, up to 7.01% higher from the closing on the previous day.
The shares commenced to rise following the official announcement made by the Korean company on Tuesday to purchase a full venture in DoubleDown Interactive LLC for 942.6 billion won ($826.8 million). The contract value is recorded as the biggest overseas possession of a Korean game publisher and it primarily triggered interests about how the Korean firm with cashable resources of less than 400 billion won would complete the arrangement.
Statistics Say it Clearly…
DoubleU Games powered 3.5% of global social casino market, whereas DoubleDown held 7.5% in the last year. DoubleDown collected 89.7 billion won in functioning profit on revenue of 316.2 billion won last year, whereas the Korean game publisher’s 2016 revenue was 155.6 billion won. The collaboration is hoped to boost DoubleU Games’ balance sheet.
DoubleU Games also appears to have forged with its U.S. takeover, wagering on the U.S. Company’s property containing a wide range of free online slots such as Starburst slots. IGT, which provides 40% of physical casino slots worldwide with games like Starburst slots, has improved DoubleDown’s brand recognition since its acquirement in 2012.
DoubleU Games will provide funds from trustworthy financial investors to purchase its U.S. competitor, lessening worries of its funding capability. Around two-thirds or 592.5 billion won of the contract’s value will be provided from outside investors, whereas the other portion of 350 billion won is funded by DoubleU Games. Stic Investment, a private equity company, will issue exchangeable bonds of value 210 billion won and bonds with warrant value 90 billion won and Samsung Securities Co. will offer senior debts of value 292.5 billion won. Kim, chief of DoubleU Games stated that possession finances will be ready by the end of April.
IGT will practice a multi-year collaboration with DoubleU Games. The firms are preparing a game development, dispersion as well as services agreement that will permit DoubleU Games’ merged social casino platform in trade for current royalties to IGT.