NetEnt Take £223milloin gamble on Red Tiger
NetEnt is a name that every slots player knows. The Swedish-based company is one of the giants of the online casino world. News that it has gobbled up the Red Tiger studio makes it an even bigger beast.
The deal was announced on 5th September, and NetEnt, who are listed on the Stockholm stock exchange.
This is a big-money deal. The first payment is a £197million “all-cash” payment for Red Tiger. That will get them 100% of Red Tiger’s shares, with another 23 million quid on the way in three years’ time, depending on subsequent earnings.
This is the first company that NetEnt has bought, and it’s a big start to a shopping spree, with €245.3m or $271.4m the value.
NetEnt’s boss, Therese Hillman said: “I am very pleased to welcome Red Tiger into the NetEnt Group. The acquisition combines two of the leading and most innovative companies in the online gaming industry. We look forward to working with Red Tiger’s fantastic team to enhance our combined global reach and to offer further value to operators and players. The transaction will provide significant revenue synergies across our markets worldwide.”
Who are NetEnt?
NetEnt was born in Sweden in 1996, from the Cherryföretagen company, which had roots, via several mergers, back to the 1960s. That means a long history in the offline gambling world.
NetEnt was in very early on the online gambling world. When Pontus Lindwall founded the company it was really a pioneer. By 2000 NetEnt had launched its first online casino. It was listed first in 2007 and made the main Stockholm Stock Exchange in 2009.
Among its biggest hits are 2010s Gonzo’s Quest, which is still going strong in 2019.
NetEnt added mobile functionality to its offering in 2011.
While NetEnt is an enormous name, you may know it through other brands to which the company provides backroom services and software as well as games. Among the huge names using NetEnt systems are Bwin. party, Betfair and Rational Group.
The company has been licensed in the UK since 2015 (and has a number of other licenses), and also works in New Jersey, the USA’s pioneering licensed gaming jurisdiction.
You can play NetEnt slots, instant wins, casino games, and live casino games. Soon you might well be enjoying VR NetEnt casino games and social games.
In the UK we’ve found listings for nearly 300 slots. The company’s games are on offer at 862 casinos in 24 countries according to industry audit sites.
Their current top game is Starburst, which is a massive hit, and a favourite for free spins giveaways. Gonzo’s Quest is their second most popular title, with Dead or Alive 2 (a sequel), Butterfly Stax 2, and Twin Spin rounding out their top five titles in UK casinos.
Who are Red Tiger?
Red Tiger are much younger. They were founded in 2014, out of the Cayetano Gaming company.
The company has premises in Malta, the Isle of Man, and Bulgaria and employs nearly 200 employees.
Their chief exec, Gavin Hamilton, said: “This is an exciting new stage of the Red Tiger story and we are delighted to become part of the NetEnt group. Accessing NetEnt’s unparalleled distribution network and geographic footprint will unlock new opportunities for Red Tiger and will further accelerate our growth.”
Red Tiger Games
Red Tiger’s big hits are: the Pirates’ Plenty series, Dragon’s Luck (an East Asian-themed game), the Irish game, Rainbow Jackpots, and Reel King Mega, a classic slot.
They have 120 slots in nearly 500 casinos and are listed in 22 countries according to the industry audit site we favour.
What Does This Mean For Players?
Initially, fans of NetEnt games and Red Tiger games will not notice very much.
In time, however, things will change.
The online gambling industry undergoes a lot of what is called consolidation. That’s when big companies take over smaller companies. There are a load of reasons for this: it may be that NetEnt simply has a lot of money in its accounts and wants to spend it rather than have it sitting around earning not very much interest (the fact that this is an all-cash purchase rather supports that view).
For Red Tiger, the advantages include a load of cash for the owners/shareholders, and the chance to hitch up with a company that is a massive player in the market.
NetEnt makes the machinery on which casino sites run; it’d be naïve to imagine that this doesn’t play in the favour of the games that the company – and now Red Tiger – produce.
For players, the long-term effects of this are – in theory – bad. The theory of capitalism (the theories of capitalism, when compared to actual capitalism in action are often hilarious) tells us that competition is what gives customers lots of choices and produces fantastic quality products for them to choose between. “Why are nearly all slots games exactly the same, except for the badges?” you ask. Well, there’s the problem. The industry is highly regulated, and a lot of the companies that are apparently competing against each other are working together in some way.
This purchase also gives NetEnt even more power in the market, adding 120 very popular game titles to their roster with a click of their fingers.
These are long-term gambles, and it’s rather early to know exactly what will happen, but that’s our view. Our experience is that most slots players won’t really care all that much and will continue to play games from both companies if they like them.
That seems a fair enough response.
However, this is an industry trend, and industries that end up (as they all probably will) with just a few enormous companies or even as virtual monopolies, like Facebook, can see customers losing out and suffering abuse.
Our advice to you is to always play games you enjoy and always play for fun: try to ignore as much of the marketing rubbish as you can.
It’ll be worth keeping your eyes open for the next new releases from Red Tiger and NetEnt to see if they show any effects of this merger. Watch this space – the reels are still in a spin!