Netmarble to Take over World's Third-largest Social Casino for 2.5 Tril. Won
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Mobile game company Netmarble has decided to acquire "SpinX," the world's third-largest social casino company, in an effort to boost the competitiveness in its overseas business. It has decided to buy a 100 percent stake in SpinX for 2.5 trillion won in cash. If realized, it will go down in history as the largest deal in the game industry.
Netmarble announced on Aug. 2 that it has decided to buy a 100 percent stake in Leonardo Interactive Holdings Limited for 2.513 trillion won to diversify its game portfolio and sharpen its global business competitiveness. Leonardo Interactive Holdings owns a 100 percent stake in Hong Kong's social casino game company Spin X.
Netmarble plans to take over SpinX in September by paying 80 percent of the acquisition value in cash and the remaining 20 percent on installment over the next four years. The Korean game giant is planning to borrow about 1.8 trillion won from financial institutions to finance the deal.
Founded in 2014, SpinX owns Cash Frenzy, Lotsa Slots and Jackpot World as its representative games. As of the second quarter of 2021, it ranked third in terms of global mobile social casino sales.
In 2020, its sales stood at 497 billion won. Its sales hit 162.2 billion won in the first quarter of this year. In the first half of this year, its sales climbed 46 percent from a year earlier, to 328.9 billion won.
Netmarble will be able to strengthen its overseas game business by buying another global game company after acquiring Kabam in the United States in 2017. At that time, Netmarble acquired a 100 percent stake in Kabam by investing nearly 900 billion won.
Social casinos refer to casinos online based on social network services (SNS) such as Facebook. They are characterized by enhanced social functions as they actively utilize relationships with acquaintances formed through SNS. SpinX offers diverse types of games including poker, slots, roulette and bingo.
Social casinos started on Facebook's PC online page in the second half of 2009 but its focus is gradually shifting from PCs to smartphones in the mobile era.
Unlike offline gambling centers, social casinos do not use real money, so there is no regulatory issue. In addition, as the growth of the existing offline market slows, the online market is highly likely to grow fast. There are a growing number of games that you can play with your phone without visiting a gambling place.
According to Samsung Securities, social casinos are classified as pure games, so they are free from government regulations in overseas countries. However, they are limitedly operated in Korea due to the government's regulations. The government is concerned about the negative side effects of gambling.
