Previously identified with addictive gambling games, Playtica has made casual games its main growth engine. Now she is taking her first step in the blockchain world, although her customers are mostly older women. In an interview with Calcalist, the company’s VP of strategy, Eric Raps, says: “Opening a wallet is a headache, but we can’t stay behind”
In August, a turning point happened in the history of Playtica. The company published its financial reports for the second quarter of 2022, in which it stated that for the first time casual games became its main growth engine – that is, 53% of its revenue came from casual games. These are light games, with simple rules and short game cycles, such as ” Candy Crush” or “Angry Birds”. This change is at odds with the company’s image: over the years Playtica has been known primarily as a producer of social casino games. These are games of chance such as poker, bingo and slot machines, but without betting for real money.
This turnaround did not happen overnight. Through a series of business opportunities, Playtica has acquired casual makers and helped them grow their games. One of the people responsible for the change in the game mix of the company founded in Israel is Eric Raps, Playtica’s VP of strategy.
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“We expanded into the casual sector for two reasons,” he explains in an interview with Calcalist. “First, we reached the peak of our strength in the social casino field. We already held 35% of the global social casino market. Second, we felt that our professional knowledge was not necessarily only valid for this genre.”
Playtika was founded in 2010 by Robert Antokol and Uri Shahak, who left the company about ten years ago. A year later it was already purchased by the Caesars casino chain for 160 million dollars. Five years later, the company found a new buyer: a consortium of Chinese corporations. Now it is going to change hands again: in June it was reported that the company will be sold to the Joffre investment fund at a value of 8.5 billion dollars.
“After Sirzes, the new owner gave us a mandate to expand. We felt that it would be possible to apply our experience from the social casino field to the casual games.” Playtica’s first purchase in the casual sector was another Israeli company, Jelly Button, for tens of millions of dollars. “When we acquired Jelly Batten, we dipped our toes in the water. It was a small deal. The idea was, ‘OK, if we fail, we won’t lose that much money. It doesn’t have far-reaching consequences. If we succeed, we’ll prove our hypothesis.’ Then we could go on a more frequent buying spree.”
So have you actually implemented your monetization capabilities in Jelly Button games?
“‘Monetization’ (generating revenue from a game) is the easiest buzzword to use. But it doesn’t necessarily represent everything we specialize in. We specialize in game operations. There are several stages in games. First, there is the development stage, where Playtica is not the best in the world “, Raps admits.
“After the game goes live, there is the game operation stage. In this I think we are the best in the world. Game operation is not only related to monetization and sales management, but also includes managing the game’s economy, managing relationships with customers and customer service. These are all principles that we instilled in Jelly Button After the acquisition. When we saw that it worked, we became much more assertive in our attempts to acquire the next companies we bought. Once we saw that our formula was working, we said, ‘OK, let’s acquire as many companies as possible to put this formula to work.'”
You have now invested in an NFT game. Why is the gaming industry so in love with blockchain?
“I’ll give my opinion on why the industry as a whole supports it, but I don’t necessarily support it myself. There is a segment of the industry that is more geared towards hardcore gamers, who are interested in owning game assets. There are those who say: ‘This asset has real value that I have accumulated and built and I should own it. His’. And if you know anything about blockchain history, that’s how ethereum started. Its creator played World of Warcraft. He grinded game hours to get a certain reward and then the game creators changed the value of the reward overnight. He He was angry at this unilateral change, which spurred him to build the Ethereum blockchain.
“Another reason for this change has to do with gaming mechanics that are based on this technology. For example, until today you didn’t have the means to make digital collectibles and verify their uniqueness digitally. These are things that touch the core of our business. Our games have internal collectibles. The ability to embed them is very exciting for us”.
The goal is for people to play games to earn money (Play-to-Earn)? In the end, someone is going to lose their money.
“We don’t believe in the Play-to-Earn model. We don’t support it, we don’t think it’s the right business model, because at its heart, it’s speculation and profit. These two things are in opposition to products that can retain players for a long time – and that’s what we focus on. We have games that are 10-12 years old. Our goal is to turn them into games that are 30 years old. The only way to do that is to build a good entertainment experience. If the goal of the game is to make money, guess what? People won’t make money from it for 30 years. No Almost no investor has managed to do that.
“We don’t focus on that. Assuming that this technology becomes dominant, we are a technology company, and we cannot fall behind. At the same time, this technology makes it possible to create many types of entertainment. In some cases, it is also seen as more modern.”
How does this sit with the fact that using a crypto wallet today is complex for most people? It is not accessible.
“You’re right. Those are the things we focus on addressing. Anything we do from a consumer perspective. Opening a wallet and transferring funds is a serious pain. It’s not easy for our user base, which is mostly average American women. We can implement blockchain technology and disguise it to enrich the user experience. We will use our judgment regarding the best gaming experience and sacrifice, if we have to, some of the options that are important to crypto natives.”
Why is blockchain actually essential for creating collectibles?
“It’s not. The short answer is that we can choose to create a centralized collection enterprise. I think what we’re trying to convey is that this is a new, extremely powerful technology, and there’s a lot of adoption of it in the technology community. If we’re going to be the leader in mobile gaming, we have to be the leader in technology and whatever it is.” Impacting Mobile Games When the mobile industry was hurt,