Aristocrat Leisure recently snapped up social games developer Plarium for $500 million, but what exactly is the appeal of acquiring a studio that creates strategy/ role-playing game (RPG) titles for a very different player demographic to social casino gamers?Mergers and acquisitions in the social casino space have been rife since the turn of the decade, with blockbuster deals worth hundreds of millions – even billions – of dollars becoming commonplace. But not many industry observers foresaw Sydney-listed Aristocrat Leisure’s recent takeover of Israeli-headquartered strategy and role-playing games developer Plarium. The deal includes a US$500 million upfront payment plus an earn-out arrangement, which implies a multiple of 10x LTM EBITDA at year end.
A consortium led by one of China’s leading online games companies sent ripples through the online gaming community in July, announcing it would buy Israel’s Playtika for $4.4 billion in cash. The deal is the largest transaction in the social casino industry to date, and in fact one of the largest transactions in the entire gaming industry in 2016. It also served as a wake up call as to the industry’s potential and the growing interest in Asia.