The real money casino sector has seen a lot of merger and acquisition activity over the last 6 months or so. Even today you’ll be reading that NYX has acquired large provider OpenBet in a deal worth £270m. Frankly that was a bit out of the blue as 3 weeks ago you’d have bet your money on Playtech purchasing OpenBet. However it becomes more interesting when you read that William Hill and Sky are both involved in the deal. According to industry news, Playtech still acquired GECO last month, and are courting Odobo. Mediatech are being slowly swallowed by R Franco. Gaming Innovation Group seem to be buying most entities… Point being that the frequency of tier 1 and tier 2 acquisition or mergers has been significant and the trend seems to be continuing, which is not necessarily a good thing for casino players.

It is unfortunate that we’ve ended up in place in the industry where casino games are seen and treated as commodity items. As with any commodity if players want good, and really good casino content that include new and innovative aspects then the supply chain must be subject to standard market forces. Supply, demand, price, quality etc… Something that goes against the thinning out of the supply chain.

After today’s news there are essentially a few big players left for sources of casino content (including their subsidiaries):

1. Scientific Games;
2. Net Entertainment;
3. Playtech;
4. NYX;
5. Microgaming; and
6. Novomatic.

There are of course other smaller suppliers but focusing on the large tier 1 suppliers this is essentially the six key options for casino distribution in Europe. An independent consultant working in the sector was kind enough to provide an overview of how this looked earlier in the year:

Game Supply Chart

The unfortunate truth being that these big suppliers will typically favour their 1st party content over any third party content. NYX with NextGen, Playtech with Ash Gaming and Playtech casino, SG with WMS and so on. Even from these few options only 3 have an open API to integrate a new studio’s own game server, and then only 1 offers an integration stack to build content without a game server. There are smaller suppliers such as Odobo and GECO (ED – sorry, now Playtech) who also allow such services, but really if you’re a brand new entrant to the sector you need mass volume from day 1 to allow you to effectively build up your internal resources to gain economies. That presents a very thin distribution channel for any developer and along with the uncertainty of success actually puts up a very large barrier to entry.

Therefore if you’re reducing the opportunity for new developers to build content in the sector, you’re hitching your cart to the existing running horses already in the race. That’s not necessarily a bad thing when you have the likes of Quickspin, yggdrasil, Foxium, Big Time Gaming et al.. already running, but as I started this piece off, true market forces are the only thing that will sustain quality; Quality that over time can only come from new entrants with fresh ideas, younger ambitious development teams, and game mechanics that go against the regulatory status quo.

Image ©2013 Dawn available from Dragoart
Chart ©2013 available from Ashley Sykes Linkedin