Supplier News
US – MGT snaps up social gaming studio
By Phil - 18 November 2013
MGT Capital Investments is to buy Avcom, a New York City based gaming studio focused on building social casino games for mobile devices under the brand Mobile Vegas.
Along with the gaming studio, Avcom brings a proprietary software platform for secure gaming, mobile development, and sophisticated analytics, as well as expertise in the areas of digital marketing and real money gaming. Avcom also brings over 650,000 slot machine players from its existing instant win game offerings. Robert Ladd, Chief Executive Officer of MGT, said: “The acquisition of Avcom, including its leadership team, places MGT in a strong position to capitalize on the popularity of the social casino industry as well as adding tremendous value to our other gaming properties. We couldn’t be happier with the exceptional talent that we have added to our team.”
The social casino industry has emerged as a significant business in recent years, with Eilers Research estimating the current annual market size at $2bn as of 2013. A Morgan Stanley research report valued the market at $1.7bn with the potential to triple by 2015. Social casino has become one of the most profitable social gaming genres, comparing favourably to other types of games when measuring key revenue and retention metrics. The success of this genre has been validated by several high profile acquisitions including IGT’s purchase of DoubleDown Interactive for $500m and Caesars’ acquisition of Slotomania maker Playtika for a reported $100m. Social casino games have proven to be lucrative stand-alone businesses and are also pivotal as a top of the funnel strategy for acquiring new real money players. According to Superdata Research, an estimated 170 million people play social casino games worldwide.
Subject to customary closing conditions, including NYSE MKT approval, the Company expects to issue approximately 491,000 shares of MGT restricted common stock to acquire full ownership of Avcom. In addition, a contingent payment of up to an additional 330,000 shares of restricted common stock is payable if certain revenue metrics are attained within an 18-month period. Closing is expected within two weeks.
The Avcom team includes a former IGT lead artist who designed some of the most popular slot machines on the casino floor including Hexbreaker, and well-known themed machines based on American Idol, Sex and the City, and the Dark Knight. Avcom brings core technical talent, with special expertise in security and lead generation. Mr. Ladd added, “We are very pleased that MGT will introduce some truly unique slot machine content into the market; it also allows us to create expansion opportunities within this new channel and our other gaming ventures.”
Avcom will operate under the name MGT Studios and oversee the Company’s online and mobile gaming properties and digital marketing. Founder Jeremy Avin will be named General Manager of MGT Studios to lead the effort. Mr. Avin concluded, “We’re thrilled to be joining forces with MGT to focus on bringing the most innovative social casino games to players worldwide. We’re excited by the opportunities that MGT’s broad gaming efforts will create for our players, employees and investors.”
