Bash/GSN deal shows enthusiasm for social remains undiminished

27th February 2014 9:45 am GMT

With GSN Games’ acquisition of Bash Gaming marking the second major social casino purchase of the year, and gaming solutions giant Playtech launching into the sector, reports of social casino’s demise seem to have been greatly exaggerated.

After talk of social casino dominated last year’s ICE conference, in 2014 it was conspicuous by its absence. People may have been forgiven for thinking that the sector had just not proved to be as lucrative as many had predicted.

Yet the conference has been followed by three high-profile, significant moves by companies that are either market-leaders or those gunning for market-leading positions.

First we saw Pacific Interactive snapped up by Caesars Interactive’s social casino subsidiary Playtika. Possibly the worst-kept secret in the industry – rumours of the deal emerged in October last year – it nevertheless puts the already wildly successful Playtika in an even more dominant position.

Alongside its core Slotomania app, bingo developer Buffalo Studios and social poker product WSOP, it has added one of the most highly-regarded slots studios to its social casino roster. It’s hard to see its position slipping.

This was followed by Playtech entering the space. While the company seemed set to attack the sector back in May 2012 through a licensing agreement for use of the social gaming assets owned by Teddy Sagi’s Skywind Holdings, it failed to make any headway.

While the strategy had originally seemed a little slapdash, the appointment of former Diwip chief executive Dan Wiegenfeld in March last year showed the supplier was serious about establishing itself as a social casino operator by bringing in an executive with a proven track record. 

Out went the talk of B2B deals with major gambling operators for the time being, with the company focused on establishing a viable B2C business.

Wild Spins Casino is yet to take off – it has under a thousand monthly actives according to Facebook – but the marketing and technological capabilities of Playtech give it a huge chance of success.

Yet perhaps the deal with the most potential is this week’s acquisition of Bash Gaming by GSN Games.

The Sony-owned business has acquired Bash for a sum rumoured to be as high as $170m, and in one fell swoop has doubled its daily active users. What’s more, Bash has consistently maintained its position as a mobile market-leader. When others were focused on building a presence on Facebook, Bash trained its attention on mobile.

There is also huge potential for synergies between the companies. While GSN has a strong Facebook presence it now has access to a team of developers capable of taking its product to mobile and tablet devices, just as Bash will be able to build its presence on the social network.

“We are gaining access to Bash’s multiplayer engine and their ability to attract talent all over the world,” GSN’s executive vice president of mobile and social games Jeff Karp explained. “We do great as an aggregation site across multiple platforms whereas bash is number one in bingo. Our goal is to keep two really great brands and work very hard to acquire players.”

Karp will work closely with Bash Gaming’s chief executive Sumit Gupta, with the pair jointly managing the combined businesses.

“By adding the two teams together the whole portfolio that we now have is such a great icing on the cake,” Gupta adds. “Each organisation has complementary strengths – we going to learn from them, they are going to learn from us, and we’ll collaborate on new, long-term projects.”

Yet despite the talk of unity and the excitement from both camps – Gupta is particularly keen to credit the hard work of the Bash Gaming team in helping the company reach this point – it had previously looked as if the ending would be less than happy.

Rumours of GSN parent Sony bringing a lawsuit against Bash Gaming and its advisors emerged in October last year, suggesting an eleventh-hour bid had been launched by a rival company and accepted.

Neither Karp nor Gupta will comment on this, though Gupta admits the company had to evaluate a number of options, including private equity acquirers.

Yet what this shows is that the mergers and acquisitions space in social casino is still fiercely competitive. There are still a number of excellent acquisition targets in the market, and the company that failed to snap up Bash is likely to now be considering these alternatives.

Ultimately what this shows is that far from being exhausted, there is still huge potential in social casino. With two of the hottest properties on the market already snapped up in a maturing sector, the flurry of activity first predicted after IGT’s acquisition of DoubleDown in 2012 may finally be set to occur.



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