In its most recent quarterly earnings call, PlayStudios indicated that it will be adapting its social casino loyalty rewards technology for use with sweepstakes casinos. The target date for the social games developer to be fully engaged in this new and booming market is just before mid-year 2025.
That move marks an expansion from the social gaming space where PlayStudios has built its reputation, despite a newly-announced workforce reduction at the centerpiece of a strategic reset plan expected to save the company $25 million to $30 million annually.
The call discussing the Nov. 5 earnings report release included a question about its move into sweeps, to which PlayStudios relayed,
The emergence of sweepstakes as a promotional mechanic is significant, with a $3 billion market. We see an opportunity to leverage our games and player network to drive engagement and monetization. We have constituted a formal team to advance our technology tools for sweepstakes, aiming to enhance our existing Play Awards capabilities.
A follow-up question revealed that PlayStudios anticipates it will “be in the market with sweepstakes capabilities in the first half of the coming year, with testing and validation by the end of the first quarter and active promotion in the second quarter.”
PlayStudios reaches deal with Pixode Games Limited
The quarterly report noted that in addition to the sweeps investment discussed in the call, the company also entered into an asset purchase agreement with Pixode Games Limited in July, expecting “this acquisition to further diversify revenues into the casual genre, and with a successful relaunch of the product with the Tetris brand, the acquisition will deepen the company’s portfolio of Tetris products.”
Tetris is one of eight brands housed under its myVip loyalty program, which also includes MGM Slots Live, My Vegas Slots, Blackjack, and Bingo, and My Konami Slots. PlayStudios boasts that its program “leverages the power of play to connect you with special offerings from an exclusive collection of real-world brand,” and it’s conceivable that the move into sweeps will incorporate a similar loyalty program to reward gamers.
Commenting on the potential in this space, PlayStudios CFO Scott Peterson noted,
The growth in the casual portfolio, particularly in the brand portfolio, is driven by new ad units incorporated into the games. We expect this lift in performance to continue as there are more ad products and opportunities yet to be exploited.
PlayStudios’ 2024 Q3 report indicated that while revenues and adjusted EBITDA outpaced expectations, with its adjusted EBITDA up 8% year-over-year. It also showed a year-over-year revenue downturn of 6%, attributed to challenges in the social games category. It also noted that on Oct. 29, just before the Q3 report release, PlayStudios initiated a global workforce reduction of about 30%, which it expects to fully implement by the end of 2024.
