Special report: eGR NA Power 25 (Part 3)

Who will top the inaugural eGR North America Power 25 rankings with Caesars Interactive, IGT and Big Fish Games all in the running?

The Power 25 is eGR NA’s rankings of the most powerful and influential companies in the RMG, social casino and daily fantasy sports sectors. To compile the list, we have collaborated with independent research company Eilers Research, data partner dystillr, and an independent panel of experts to assess the relative strengths and weaknesses of the industry’s power players. Each company is ranked based on revenues, scale, influence and product offering, and on financial data and input from our judging panel. [private]

And while industry behemoths from the social sector locked out the top three, daily fantasy sports and RMG operators, have all made the top ten and reflect the ever more blurred lines between the three industries. In a three-part serialization of the rankings, today we countdown from number 4 to 1.

4: Zynga

Revenues: $310.2m in H1 2015

Key products: Texas HoldEm Poker, Hit it Rich, Wizard of Oz Slots

It’s been a challenging 12 months for Zynga, during which founder and former CEO Mark Pincus jumped back into the hot seat to oversee a massive $100m cost reduction program. Part of that plan saw the firm axe 18% of its global workforce, with Pincus saying the cull would allow Zynga to become more nimble, creative and innovative by working in smaller teams. And the firm’s latest numbers suggest that strategy may be starting to pay off after reporting online game revenues were up 18% YoY in H1 to $310.2m. Growth was driven by the launch of Hit it Rich! and Wizard of Oz Slots, generating $48.1m and $21.4m respectively during the period. Zynga Texas HoldEm Poker still remains the largest game on Facebook with more than 10 million monthly active users.

The San Francisco-based developer has previously been criticised for its failure to adapt to the shift from desktop to mobile, but with the channel now accounting for 66% of total revenues, it has certainly made ground on its competitors. And with mobile revenues of $46.6m in Q2 it was the third largest publisher on the platform. But challenges still remain, particularly when it comes to arresting continued decline in player numbers, with MAUs down 31% in H1 to 83 million. Zynga will also need to improve on monetization and paying player conversion rates if it is to climb higher in next year’s rankings.

3: Churchill Downs/ Big Fish Games

Revenues: $196.4m in H1 2015

Key products: Big Fish Casino, TwinSpires.com

Churchill Downs became a major player in the social casino sector almost overnight after completing its $885m acquisition of Big Fish Games back in November 2014. Post acquisition, Big Fish has gone from strength-to-strength reporting H1 2015 revenues of $196.4m with bookings up 40% to $217.5m year-on-year. Judges praised Big Fish for its solid performance on mobile, with 93% of revenues coming through the channel in Q2. Unsurprisingly, iOS remains the company’s primary distribution channel, with Android accounting for less than 30% of revenues. Facebook still remains a small part of the business with revenues of just $3.5m, a slight mark against it with the social network still an important part of any social gaming business.

Churchill Down’s real-money online horse race wagering business has had a good start to the year, with revenues of $106m in H1 leading to a 16% increase in EBITDA to $28m. But the Kentucky-based operator has much bigger ambitions for the online game sector, and has already secured its route into the California online poker market if and when it opens up through a partnership with the Oceans 11 Casino and Crystal Casino. Whether Churchill Downs will build its own platform in-house, white-label or look to get the cheque book out once again remains to be seen. But bolstering its real-money gaming division will certainly help gain ground on the likes of Caesars Interactive.

2: IGT/ DoubleDown Interactive 

Revenues: $153.7m in H1 2015 (DoubleDown only)

Key products: DoubleDown Casino

While many of its rivals have looked to diversify their product portfolios, International Game Technology (IGT) has remained focused on driving growth via DoubleDown Casino. And despite offering just the single app, its strategy continues to pay dividends with revenues increasing 13.5% YoY in Q2 to $81.5m and $153.7m in H1. Mobile has been the driving force behind its impressive performance of late, with the channel accounting for 44% of total revenues in the second quarter, up from 33% last year.

DoubleDown still derives the majority of its revenues from Facebook, which is starting to become an issue for the developer. And although IGT remains the second largest publisher on the social network with the biggest standalone app, revenues dipped 2.7% YoY to $46.5m in Q2 off the back of continued decline in MAUs, which dystillr estimates fell 18% to 4.7 million. IGT has been able to partially off-set the decline by achieving higher bookings per daily active user, which increased 7% to $0.46.

IGT also has a fairly chunky RMG business, supplying a raft of operators with its platform and game content. But the firm’s strength lies in its scale and backing, particularly after its $6.4bn acquisition by Italian lotto giant GTEVH earlier this year. Post acquisition, IGT is one of the largest gaming companies on the planet, and when it comes to its interactive division has the cash to enter and by a meaningful player in any sector it chooses. But whether IGT will look to enter the B2C RMG sector, or stake its claim to the nascent DFS market, remains to be seen.

1: Caesars Interactive 

Revenues: $361m in H1 2015

Key products: Slotomania, Bingo Blitz, Caesars Casino, WSOP, Harrah’s Casino

It should be no surprise that Caesars Interactive Entertainment (CIE) has topped the inaugural eGR North America Power 25 list. The Las Vegas-based operator is the industry’s ultimate power player, particularly in social casino where three key acquisitions – Playtika, Buffalo Studios and Pacific Interactive – have allowed it to build unrivalled scale and scope in a very short space of time. But its success is not only down to acquiring the right firms at the right time; it has a visionary leader in CEO Mitch Garber and one of the most intelligent, innovative, boundary-pushing teams in the sector.

Based on financial numbers alone CIE deserves its place at the top of the table, reporting H1 revenues of $363m leading to EBITDA of $77m. The operator continues to excel in converting paying users, with monthly unique players up almost 80% YoY to 960,000 in the second quarter and average revenues per user per day increasing from $0.26 to $0.31 over the same period. On mobile, Caesars is a force to be reckoned with, boasting quarterly revenues of $97.8m, with a pretty even split between Android and iOS.

And while the bulk of CIE’s revenues come from its social casino division, its real-money gaming business continues to perform well in tough RMG markets in Nevada and New Jersey. After Ultimate Gaming fell by the wayside in the Silver State, the WSOP.com did a fantastic job of swallowing up its player base and denying market rivals Real Gaming a chance to claw back share. In New Jersey, they are just one of two operators to offer both poker and casino, generating total revenues of $15.8m in the first half of the year alone.

Caesars undoubtedly defines what it means to be a successful online egaming operator in 2015, and given just how far the gaming giant is ahead of its rivals, will certainly take some catching over the next 12 months.

To read Part one of the rankings, click here

To read Part two of the rankings, click here