Gambling software giant Playtech has offloaded its casual gaming operations to a U.S. games publisher. Investors in Playtech reacted with positivity and the share price rose almost 9.5% after the news broke.
Playtech was always a gambling-focussed company. It’s how it turned from a small outfit into one of the world’s major players. Its senior management team wanted to diversify its portfolio, which is an intelligent thing to do, but they went too far.
Financial betting was Playtech’s first target, then bingo, and casual games. New acquisitions were announced on a seemingly monthly basis, including that of Funtactix.
The London Stock Exchange listed company launched its Plamee casual games studio in 2014. This followed the US$20 million acquisition of YoYo Games. Playtech acquired Funtacix, the founding company of FTX Games, which is a casual games publisher.
Bosses at the firm strongly believed casual games sector was about to embark on a boom of popularity. This never happened and while the casual games business was making money, Playtech has let it go.
Playtech Dumps Casual Game Division On Tilting Point
Playtech has sold FTX and Plamee to U.S. firm Tilting Point for an undisclosed sum. The actual sale price should become apparent when Playtech issues its next financial figures.
Tilting Point is a free-to-play game publisher based in the United States. It now controls FTX out of San Diego and Russia’s St. Petersburg and Florida-based Plamee. FTX is the publisher behind titles including The Walking Dead: Free Casino Slots.
This marks the third Tilting Point acquisition in the space of eight months. Tilting Point got its hands on Gondola, a startup specialising in in-game offers and adverts. It also purchased the mobile role-playing game Star Trek Timelines.
Kevin Segalla, the CEO of Tilting Point didn’t rule out further acquisitions.
“We were built ultimately to be in a position where we could acquire some of the studios that we’re working with. We truly value the developers’ independence and was to continue operating their business and help them accelerate growth. A lot of development studios are recognising that scale is becoming more and more important.”
Segalla continued: “This has been an exciting time as momentum continues to build for Tilting Point. FTX, Plamee, and the great games they’ve made are an excellent addition to the growing Tilting Point family. For us, acquisitions of strong studios are the natural progression as we continue to grow our publishing business.”
Playtech Returning to Its Gambling Roots
Playtech’s share price has been in free-fall since late 2017. Shares traded at 988 pence per share on November 1, 2017. They hit an all-time low of 138.50 pence per share on March 18, 2020.
Investors in the company have essentially demanded the company returns to doing what it does best: gambling products. Shareholders revolted for the third successive year at Playtech’s Annual General Meeting, angry about directors’ pay.
CEO Mor Weizer received €2,055,437 in 2018 and an additional €2,930,588. He has collected €19,528,000 ($32,008,344) over the past 10 years.
Shares in Playtech traded at 543.00 pence per share when Weizer first arrived. They peaked at 995.00 in June 2017 but traded at only 230.10 pence per share when the AGM took place.
Shareholders Happy With Casual Games Sale
Shares in Playtech continue to rise after bottoming out on March 18. The huge drop happened because of a COVID-19 trading update. Playtech announced it is not paying its final dividend of 2019.
Those shares are now worth 312.10 pence per share as investors gain more confidence in the company. It also helps Weizer purchased 19,000 shares on June 1; investors like it when directors invest in their own company.
It will take some time for Playtech to return to its former glory. Focussing on casino games, pokies, and sports betting will help it get there faster.