In the online gambling industry, big companies buying out small companies is part and parcel of the way the market operates. Acquisitions come and acquisitions go, but now and then we are left with a shocker.
The end of November saw the ‘King’ of Live Casino games, Evolution Gaming, buy up the ‘King’ of Slot games, NetEnt, for an enormous fee of £1.6 billion (AUS$ 2.78 billion). While it was expected that this massive move would bring about changes to the way NetEnt operated going forward, no one anticipated that the alterations would come so rapidly and with such dire consequences for the livelihoods of so many.
No Time Like the Present
It is obvious that a lot of time and planning went into Evolution Gaming’s move to acquire the casino juggernaut. The moment the sale was complete, the new owner set about changing the landscape of the company with calculated precision. Within 10 minutes, 300 jobs were made redundant, as NetEnt Live was immediately shutdown. Another 200 positions may be next on the chopping block.
According to reports, NetEnt’s Krakow operation has been closed, Stockholm’s staff numbers have been reduced, and the Qormi office in Malta ceased operation on the day of the take-over. Evolution Gaming issued a statement:
“Following the closure of Evolution’s acquisition of NetEnt, the process of closing the NetEnt offer for live casino services has been initiated. This includes its operations in the Qormi studio.”
The sudden closure of NetEnt Live represents an effort to implement immediate cost-saving strategies for the future, as it is set to save the company around €30 million in operational expenses.
While NetEnt is the benchmark for slot games and virtual RNG table titles, their live casino segment has never been able to rival that of the Evolution Gaming outfit. Cutting out the division will do nothing less than improving the amount of traffic that is funnelled to Evolution Gaming’s casinos. In short, the decision makes business sense.
The acquisition provides a massive display of power; one that will probably change the face of iGaming forever. To have the undisputed leaders of RNG casino games and live casino games under one umbrella means that competitors are in for a hard time when it comes to competing for prominence in the market.
Evolution Gaming has undoubtedly positioned itself as the force to be reckoned with in the industry and has shown its intent to dominate the global market already by making massive inroads into the US-marketplace on the Live Casino front. NetEnt’s premium may be just what they need to get a foot in the casino game segment of the same emerging market.
NetEnt fans needn’t be worried about their beloved brand though. Evolution has shown in the past that they are more interested in harnessing the strengths of existing businesses rather than changing them. At least, this was the case when they purchased Ezugi, which still operates with a degree of autonomy. While NetEnt Live had to go, it is unlikely that any other massive changes are set to take place soon.