From Las Vegas Review Journal
The Empire put a hit on the Mafia and buried the farm.
Two years after Caesars Entertainment Corp. perplexed Wall Street by acquiring social gaming operation Playtika, the casino giant has moved past rival Zynga Inc. to the top of the business model.
Social casino games are free to play on the Internet, through Facebook and other platforms. Customers have the option of paying a nominal fee — often less than $1 — to acquire thousands of gaming tokens to increase their virtual bankroll.
Apparently, those pennies add up.
One Wall Street analyst estimated social gaming is now worth $1.2 billion worldwide in annual revenues.
Caesars Interactive Entertainment, a subsidiary of the casino company that controls Playtika and the World Series of Poker, now owns a large chunk of that market.
Playtika’s Slotomania brand — slot machine and bingo-like games — is fueling the effort, which sent Zynga, owners of Farmville, Mafia Wars, Words with Friends, and a platform of casino games, including Zynga Poker, into second place.
“Social casino gaming has essentially gone from being a nonexistent sector a few years ago to one of the most popular gaming genres on desktop and mobile (devices),” Adam Krejcik, managing director of Eilers Research, recently wrote.
Eilers Research is a Southern California-based independent firm focused on the gaming equipment, technology and interactive gaming sectors.
Wall Street analyst Todd Eilers founded the company in 2012.
Krejcik estimates the total social gaming market could top $2 billion by the time 2013 is in the books, a 67 percent increase over 2012.
Social gaming has seen “significant growth” thanks to Facebook and mobile devices, such as iPhones and tablet computers. Several high-profile acquisitions of social gaming companies attracted media attention and financial world curiosity.
The gaming industry, however, views social gaming as a “potentially lucrative customer base that could be converted to real-money gambling,” Krejcik said.
Caesars gained attention in May 2011 when it acquired 51 percent of Playtika, a small social game developer based in Israel that didn’t have a positive cash flow at the time, but was building an audience through Slotomania. Caesars bought the remainder of the company seven months later.
