21 May SciPlay Corporation is stepping up its Game! Is it Enough?
A premier developer and publisher of digital games, SciPlay Corporation (NASDAQ: SCPL) offers free-to-play casino, casual and bingo games to millions of users across the world. The Company is using advanced analytics and data-driven approaches to create authentic, highly thrilling gaming experiences for its users.
SciPlay, formerly known as SG Social Games Corporation, is a subsidiary of Scientific Games Corporation. The Company was previously the social division within Scientific games and became an independent entity in 2019.
The Company’s portfolio of games includes Jackpot Party Casino, Gold Fish Casino slots, Quick Hit Slots, Hot Shot Casino, Bingo Showdown, 88 Fortunes Slots, Monopoly Slots and Diving Ball 3D among others. SciPlay stives to provide authentic gaming experiences modelled on well-known casino slot machines such as WMS, Bally, Barcrest, and SHFL. The platform also takes into account user feedback through its social channels and offers multi-player tournaments, mini-games and challenges with the opportunity to win free spins, coins and bonus rounds.
SciPlay Corporation (NASDAQ: SCPL)
Market Cap: $ 408.19M; Current Share Price: 16.74 USD
Data by YCharts
Industry
The Advent of the Smartphone has revolutionized the gaming industry. There is an exponential rise in the number of gamers, which now stands at about 2.3 billion gamers worldwide. According to a report by Newzoo, the global games market which was valued at $137.9 billion in 2018 is likely to reach $180.1 billion in 2021, growing at a CAGR of 11%. Mobile games will contribute to 59 percent of the total or over $106.4 billion by 2021. Mobile and Tablet gaming alone contributed to over $70.3 billion in 2018.
The Second-Largest segment is Console gaming with revenues of $34.6 billion in 2018. The report points out that the industry grew at a CAGR of 11 percent between 2012-2021, which in itself is a major accomplishment, as maintaining a double-digit growth rate for over a decade, is no mean feat. The segment will have grown from an inconsequential sector in 2012 to a 100-billion-dollar industry by 2021.
Asia-Pacific regions will drive the growth in the market, with a steadily increasing smartphone user population, generating $71.4 billion or 52 percent of total global game revenues. Countries such as China, which is the number one gaming market, and Japan are the largest spenders on mobile games, with average spend per payer in Japan being 1.5 times higher than in North America and more than 2.5 times higher than in Western Europe. In addition, China alone will contribute to more than 25% of all global game revenues, with over $37.9 billion revenues in 2018.
North America is the second-largest market for games with a year-on-year growth rate of 10% and nearly $32.7 billion in 2018. There were similar trends in the Europe, Africa and the Middle East Market, which generated combined revenues of $28.7 billion in 2018. Though lacking in average spends per payer, this segment will witness a steady growth in the Smartphone population, making up for the revenues.
User retention is the underlying goal of any game development company. Creating engaging content along with a user-friendly interface, providing constant upgrades in the form of features, characters or design elements are likely to retain the user for longer, but also involve a lot of strategy and planning. Another key element is the optimal use of advertising and marketing promotions to attract new users and build a large subscriber base.
Company
SciPlay achieved record player conversion of 8.1 percent for the fifth consecutive quarter. In addition, the Company reported a 28 percent increase in revenue, which outperformed the social casino market and an impressive 22 percent increase in net income. The Average Monthly Revenue per paying user stood at $92.80, an increase of 11 percent over the prior year, while its Average Revenue Per Daily Active User (ARPDAU) grew by 36.7% to $0.67. The Company’s Mobile penetration jumped by 88 percent to 300 bps from the prior year as well.
Image Source: Company
Speaking on the performance during Q1,2021, Josh Wilson Chief Executive Officer of SciPlay, commented
“Our teams continued to execute at a high level this quarter delivering strong top and bottom-line results with broad based strength across the portfolio. Our payer focus and live-ops strategy delivered sequential growth in key monetization metrics and we achieved record player conversion for the 5th consecutive quarter. The soft launch of Solitaire Pets Adventure in April is an important step in our path to diversification in the $20B+ casual genre. This is an exciting time in SciPlay’s journey as we invest to build our pipeline of games to drive long-term growth and shareholder value.”
The Company launched two new games in April namely Quick Hit and Solitaire pets and will be focusing on Project X aimed at introducing more casual games targeting the $20B+ casual game genre, expanding and diversifying its game pipeline through mergers and acquisitions, revenues and delivering long-term shareholder value. Furthermore, SciPlay is focusing on monetization through payer focus and live ops strategy
SciPlay is using a combination of leading-edge data analytics, product management, performance marketing and monetization to make a mark on the casual games landscape.
Key Takeaways
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References
https://investors.sciplay.com/static-files/72ebac45-c1c3-45a5-91e9-773fb686255f
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