bwin.party enters social games market

31May 2012

bwin

The world's largest listed online gambling operator, bwin.party digital entertainment, has announced that it intends to spend up to $50 million over the next two years to fund its expansion into the social games sector.

Gibraltar-based bwin.party has already agreed to purchase ‘a number of assets' from Velasco Services Incorporated and Orneon Limited for $23 million, of which $17.25 million has already been paid, that should speed its entry into this market.

Bwin.party declared that these acquisitions include ‘a number of existing business-to-business social gaming contracts' along with ‘significant software engineering resources' that will form the foundation of its new Win social games studio complete with its own dedicated development teams.

"We have chosen a ‘build and partner' strategy, one that provides us with both the resources and additional management expertise to execute our planned extension into social gaming, which is an exciting and fast growing area of digital entertainment that is the latest addition to our business strategy," read a statement from Jim Ryan and Norbert Teufelberger, Co-Chief Executive Officers for bwin.party.

"We are focused on building a meaningful stand-alone enterprise that will operate outside our core real-money gaming business but which will benefit from the group's significant resources and assets.

"Our investment will enable us to launch Win, our dedicated social gaming studio, with its own development centre that will increase our speed to market both for social as well as mobile games.

"Intent on securing a meaningful position in the marketplace, we expect a €5-€10m impact to clean earnings before interest, tax, depreciation and amortisation in 2012 and 2013. However, we are excited by the potential of this new market and believe we can deliver attractive returns in the medium-term through relatively modest investment funded from operating cashflow over the next 18 months."

Bwin.party revealed that the former Chief Executive Officer for Myopia, Barak Rabinowitz, has been recruited to lead a specialist management team for its new Win social games subsidiary that is also set to include Alex Usach, Dennis Hettema, Dan Matkowski and Tilli Kalisky.