CrowdGather posts revenue decline despite social gaming growth18th December 2014 7:41 am GMT
CrowdGather, owner of social casino operator Plaor, has reported a 4 per cent decline in revenue to $800,324 for the first half ended October 31st, with results impacted by the company’s decision to sell off a portion of its forum advertising assets.
Earlier this year, CrowdGather embarked on a process of transforming the company into the social gaming segment through a merger with Plaor, creators of the Mega Fame Casino, having faced a number of challenges of growing its forum advertising business without sufficient capital.
The company said that it generated revenue of approximately $415,000 from social gaming during the first half of its financial year, helping total revenue reach $800,324 during the period.
This was down 4 per cent compared to the same period last year however, due to reduced forum advertising revenue of approximately $452,000, primarily as a result of the sale of certain forum properties during the fourth quarter of its 2014 fiscal year and in Q1 of this year.
CrowdGather chairman and CEO Sanjay Sabnani said that the company believes it is already seeing positive results from the decision to sell off a portion of its forum assets in order to fund the merger.
“Record bookings for this past fiscal quarter ended October 31st and the continued momentum we are enjoying in this current fiscal quarter should result in a substantial replacement of the revenues we lost as a result of the asset sale by next quarter,” he said. “Additionally based upon the success of our Mega Fame Casino growth, we expect to close this fiscal year at a record revenue run rate thereby confirming our decision to enter into the social gaming sector.”
Cost of revenue for the six months period amounted to $254,914, up considerably compared to just $2,622 a year ago, due to the platform fees relating to social games and hosting and data center costs related to operating online games. As a result gross profit for the period fell by 35 per cent to $545,410.
The company also revealed that Mega Fame Casino had average daily active users (DAUs) of 24,154 during the second quarter, with average bookings per user (ABPU)climbing 26 per cent to $0.24, adding that it believes that the results are a strong sign the focus on quality slot content with established content partners is working.
“We are very excited to see our focus on quality content and the user experience result in such strong growth of our ABPU and average daily bookings,” said CrowdGather’s chief operating officer Richard Corredera. “With our strategy showing clear signs of success we are looking forward to expanding our content pipeline and continue the growth we have already realized in Mega Fame Casino further into the coming quarters.”