Playtech to move into Social Gaming

Social Gaming ZyngaPlaytech, the leading online gaming software developer and supplier plans to move into the area of social gaming and a recent announcement of the agreement to buy several business to business assets could bring this plan nearer to becoming a reality. Having observed the social gaming market as operated through social networks and mobile platforms Playtech decided that the best way of breaking into this market was by purchasing the business to business social gaming assets. In this way the company which is listed on the London stock exchange will acquire the possibility of accessing a wide range of social gaming platforms so it can provide its clients with a broad choice of products which would include bingo, poker and casino games.
Playtech’s plan to buy the assets from Teddy Sagi who was a founder of Playtech and who is a major shareholder in the company has aroused controversy since Playtech is buying again from its own shareholder. Recently it was announced that Playtech had agreed to a deal involving 10.5 million pounds worth of office space with Gaming Technology Solutions Ltd, which is a developer and supplier of gaming solutions to online gaming operators. Teddy Sagi is also a shareholder in Gaming Technology Solutions Ltd.Playtech plans to spend 95 million euros to purchase the assets from Sagi which include three elements: a share in a business to consumer social gaming venture, business to business real money gaming assets including casino and mobile poker software and business to business social gaming assets. The social gaming products include interactive games where players can buy for real money “virtual” currency to use in games such as the credits used by players on Facebook.Social gaming is extremely popular and with the increased use of smartphones this is increasing even more. Initially social games were played on PCs and some games have millions of players.  Some of the most popular early social network games include Happy Farm, YoVille and Mob Wars. Zynga is a market leader in social network games, its Cityville game is extremely popular. While social gaming has some features of video gaming the main difference is the “social” aspect, one doesn’t play alone and one tends to belong to a network of players. Also the games tend not to have a final outcome, the players continue to carry out tasks or quests to move to a higher level. Players can spend real money to purchase virtual cash, tokens or accessories for the game.

At the moment Playtech has just signed an agreement to purchase the assets which would enable it to break into the social gaming market. It remains to be seen whether this will be a profitable area for the company.

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