The gaming industry is undergoing a significant increase in the number of company partnerships taking place, primarily through company mergers and acquisitions. Gaming companies and their shareholders can cash in on these mergers while also improving gaming experiences for their consumers. Uncover why so many gaming partnerships are taking place and the latest examples here!
What Is a Company Merger and Company Acquisition?
A company merger and company acquisition are sometimes used interchangeably when they mean very different things. Before we dive into some of the latest gaming partnerships, it’s essential to recognize the difference. A company merger is when two companies come together to create a whole new entity. They may or may not leave their previous company and branding behind or create a new entity as well. A company acquisition is different; it is when one company buys another company. If the company they bought is successful, they usually keep the branding and run it as though nothing has changed.
Examples of Gaming Partnerships and Acquisitions
One of the most recent examples of an attempted company acquisition in the gaming industry is how MGM, a big player in the casino world and in Las Vegas, is trying to purchase the successful Entain from the UK, previously known as GVC Holdings. The US giant is trying to buy the UK group that own successful bookmakers and casinos, most notably the global casino service PartyCasino. Negotiations have been tough so far, with Entain rejecting MGM twice, but it might only be a matter of time before the acquisition takes place.
Here are some other examples of partnerships and acquisition in the gaming industry:
1. In the first quarter of 2021, Esports Entertainment Group has acquired the online casino brand Lucky Dino Limited for $30 million.
2. Paddy Power, Poker Stars and Betfair agreed to merge in the last quarter of 2020
3. Just this month, MegaRush Casino based in Malta has joined forces with game developer Red Lake Gaming to supply casino content.
The Benefits of Gaming Company Partnerships
Most gaming companies join forces and work together to improve their market share by reducing competition, or when international partnerships occur, to penetrate foreign markets. For example, the merger of Poker Stars, Paddy Power and Betfair will make them the largest online casino by revenue in the world. This will please the shareholders of these companies.
However, mergers and acquisitions don’t just take place to line the pockets of company owners. They are created to make the gaming space even better and to push the boundaries of innovation. Gaming companies typically have different areas of specialization, especially in technology. The proposed MGM acquisition of Entain is a good example. MGM have a successful land-based casino business, but Entain has more experience with online casinos and sports betting. With Entain on board, MGM could do a lot more in the online gaming niche – with fewer costs.
Some gaming company partnerships are neither mergers nor acquisitions. Just like in the third example above, the casino has struck a deal for the game developer to provide games to their casino website for so many years. It makes profitable sense for all parties.