NetEnt’s Q3 Revenues Fall Despite the Recent Acquisition of Red Tiger

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NetEnt’s Q3 Revenues Fall Despite the Recent Acquisition of Red Tiger

NetEnt is known to be one of the most popular and biggest software suppliers of casino games. It produces different varieties of online casino games like video slots, blackjack, roulette, scratch cards, and many more.

What sets this software provider apart from others is how the games that NetEnt produce are visually attractive, challenging, and realistic. NetEnt games are also known for high payout percentages.

Just last September, NetEnt agreed to a £220 million acquisition with Red Tiger Gaming. The deal basically allows NetEnt to take control of Red Tiger Gaming that mainly specializes in slot games.

It was an all-cash deal with an initial enterprise value of about £197 million. This will then be followed with up to £23 million worth of earnings that will be paid out by the year 2022.

Red Tiger is mainly known for its slot games. It was founded in 2014 by the team that is also behind the Cayetano Gaming. It is also known for its Daily Jackpots feature. The company operates in Malta, the Isle of Man, and Bulgaria.

NetEnt chief executive Therese Hillman expressed how NetEnt is pleased to have Red Tiger join the group. She said, “The acquisition combines two of the leading and most innovative companies in the online gaming industry.”

She added, “We look forward to working with Red Tiger’s fantastic team to enhance our combined global reach and to offer further value to operators and players. The transaction will provide significant revenue synergies across our markets worldwide.”

Red Tiger’s chief executive Gavin Hamilton also expressed how they are excited about the acquisition. “This is an exciting new stage of the Red Tiger story and we are delighted to become part of the NetEnt group. Accessing NetEnt’s unparalleled distribution network and geographic footprint will unlock new opportunities for Red Tiger and will further accelerate our growth,” he said.

Hamilton also said that Red Tiger will be focused on driving further innovation. They are simply looking forward to working with NetEnt to figure out how they could leverage their combined capabilities to be able to release new products that could amaze their customers.

After the acquisition, NetEnt was able to release new games like their latest horror slot game called The Wolf’s Bane. This could be played on the top NetEnt casinos listed on CasinoGuide along with other popular NetEnt games like The Invisible Man, Dead or Alive, and of course, Mega Fortune.

Now, the Q3 revenue of NetEnt was released. For Q3, NetEnt’s revenue was at $46 million and this means that there has been a 1 percent decrease and this has been happening on a year-on-year basis for NetEnt.

In fact, NetEnt’s revenue for the year-to-date is now at 1.3 billion Sweden Krona. This then means a 3 percent decrease from what they earned last year.

Red Tiger, meanwhile, has generated a revenue of around 30 million Sweden Krona since the acquisition in September. Without this contribution, NetEnt’s revenue would have been down to 7.9 percent year-on-year.

Hillman was actually quick to address that the revenue decrease has nothing to do with Red Tiger in the first place.

“We continue to see a challenging situation in some of our largest markets in the third quarter. The primary reason for the lower revenue was attributed to continued weak developments in the Swedish market.”

Hillman mainly said that the poor performances in Sweden, Norway, and the UK were the major reasons why they still continued to get a lower revenue. The difficulty that they have with Sweden and other Nordic countries has been the reason why they’ve had the decline since the first half of this year.

In fact, NetEnt is actually expecting the acquisition to have positive effects instead. “We expect our slot games, including Red Tiger’s portfolio together with live casino, will contribute to solid growth for NetEnt in 2020,” Hillman said.

Despite the challenges, Hillman still talked about the positive things that are happening for the company. “On the positive side, it’s worth highlighting the US, with continued strong growth in New Jersey and a great start in Pennsylvania during the quarter. Revenues from these two US states could continue to grow for many years to come to potentially account for a greater share of our total revenues in the future.”

Another thing that Hillman talked about is how the company is aiming to also prioritize live casino gaming. “Within the live casino, we continue to pursue our plan to make improvements to the product and organization. We rolled out an upgraded user interface for a better player experience as well as products such as Perfect Blackjack and Network Branded Casino to our customer network.”

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