If you’ve ever played online casino games, then chances are you would have come across the developer known as NetEnt. Focussing on the software development side of the equation, NetEnt is easily one of the biggest names in the industry. Initially centring on slot software, NetEnt has recently made strides in the newer world of live casino gaming and, as their quarterly report shows, business is promising.
Revenue Growth
The business reported third-quarter revenue of 449 SEK m, or £36.36 million, with an EBITDA of £18.38 m, and EBIT of £13.93 m giving margins of 50.6% and 38.3%, respectively. These continue the upward trend which NetEnt has been on the entire fiscal year, with earnings per share seeing solid continual growth.
Despite this growth, there were fears that the overall revenue stream of the business would decrease, as it saw a definite downturn from the rates of growth seen in previous years. A significant contributor to this was difficulty in Sweden’s market, though this was somewhat offset by growth within the US’s Pennsylvania and New Jersey.
This might seem a cause for worry, and it might have been, save for one very important move.
Acquisition of Red Tiger
Red Tiger Gaming quickly established themselves as a competitor to NetEnt in many of NetEnt’s major marketplaces. By acquiring the business, the goal from NetEnt has been to take this competitor out of the game and to add their similarly considerable experience into the fold.
While these advantages might seem basic, there is a depth to this decision which many unfamiliar with the casino market might overlook.
The first of these aspects is the favouritism which many players show to certain developers, series, and even particular games. Players are, after all, often creatures of habit. Luck on certain games or love of certain series is a strong driver of continual engagement, and the purchase of Red Tiger will bring hordes of these fans over to NetEnt’s side.The second aspect which cannot be ignored is the growing importance of the live casino market, which was reflected in NetEnt’s last report. In effect, these are a form of streaming service, which combines in-person games with the convenience of at-home play.
For years, this type of home gambling had its obstacles. However, recent developments with home and mobile internet speeds have opened this new avenue up like never before. Again, Red Tiger were some of the best in this regard, so by adding their technology to NetEnt’s, experience cornering this explosive market should be all the easier.
In terms of forward-thinking, this move also takes into account shifts within the mobile market. Folding phones and the coming of 5G both show great promise in expanding on mobile potentials in new and exciting ways, so getting ahead of these technologies is key.
With a continual release of new products, a streamlining of programming techniques, and the added expertise of Red Tiger, this report shows what appears to be a very future-focussed attitude on NetEnt’s part. Whether or not it will pay off remains to be seen, but indications are good that the fourth quarter should be a strong one for one of online casino’s biggest and brightest.
