How To Survive The Social Casino Gold Rush

°July 2011, London – founded by 3 ex EA/Playfish execs 60 staff today Top-15 social casino company in revenue and audience Raised $16.8M - last round ($14M) Dec-13 led by Endemol Key product: Mirrorball Slots (Facebook canvas, iOS and Android) Founding member of ISGA (International Social Games Association)

Social Casino today: a look at the market, trends & facts.

May-14: Top 10 social casino companies have 70% market share (revenue). (Source: Eilers Research). Top 5 has 53% share. Top-10 has 70%+ market share 4

Consolidation Ongoing 2010: 888.com buys Mytopia for $48M 2010: Fremantle buys Ludia (undisc) 2011: Caesars buys Playtika (Slotomania) for $100M+ 2012: IGT buys Double Down Interactive for $500M 2012: RockYou buys Ryzing (bingo, undisc) 2012: Aristocrat buys Product Madness (undisc) 2012: Novomatics buys Cervo Media (undisc) 2012: WMS buys Phantom EFX for $20M 2013: Caesars buys Buffalo Studios for $90M 2013: Caesars buys EA Montréal studio (WSOP, undisc) 2014: Caesars buys Pacific Interactive (House of Fun) for $96M 2014: GSN buys Bash Gaming (Bingo Bash) for $160M 2014: Bally buys DragonPlay for $100M 2014: Imperus Technologies buys Diwip (Best Casino) for $100M 2014: Churchill Downs buys Big Fish for $885M 2015: Intertain buys Gamesys for $700M+ 2015: Novomatic buys AbZorba (undisc) $2.7B+ in the last 4 years

The March To Mobile No more audience growth on web (Fb canvas). Mobile > Web audience since mid-13.

Over 1,000 social casino apps across all platforms social casino studios with over $10M annual revenues Audience remains relatively stable Slots/Casino: 20-25M addressable market Bingo: 12-15M Poker: 40-50M Saturated market

Slots category dominates social casino 8 Source: SuperData Research ‘Pure’ Slots account for 38% of social casino revenue and 32% of audience in total However, most of the ‘casino’ category revenue comes from Slots (e.g. DoubleDown generates 70%+ of revenue from Slots) Slots + Casino represents 76% of revenue and 55% of audience Bingo accounts for 13% of revenue and 14% of audience in the category

Rising user acquisition costs... In USA, Australia: CPI for social slots are $5+ (on iOS) That means absolute minimum product metrics required to pay back within 9 months are Retention: D1 35%+, D7 18%+, D30 8%+, month-on-month retention after D30 90%+ Monetization: ARPDAU $0.25

5 years of growth... And pain ‘Puppies and Rainbows’ $200 million market Good product = growth, success Lots of small studios Facebook canvas main platform ‘Happy days are over’ $3 billion market Very tough, saturated Large companies dominate Top-10 has 70%+ market share Rising production and marketing budgets Facebook canvas hit plateau, huge growth on mobile, tablets

6 possible ways to succeed

1. Build a world class team and raise a ton of money E.g. Playstudios, Plumbee: raise $15-30M, hire top industry experts to compete with Caesars, IGT,...

2. Go local E.g. Akamon (ES): focused only on Spanish-speaking/LatAM markets Local products, deeply localized (local card games, games with a ‘local flavor’)

3. Find an under-served audience E.g. Huuuge Games (PL), targeting younger, male social slots players Similar game mechanics, different themes

4. Go niche (away from slots, bingo, poker) E.g Come2Play (IS) with Backgammon Live

5. Go creative, invent a new game Find a new angle, new game mechanics, invent a game from scratch. This is what game studios used to do.

6. Get lucky