Q&A: Gaming Realms CEO on prioritising profit over revenues
Patrick Southon chats to EGR Intel about the company’s recent return to profitability
EGR Intel: Do you feel that the upsurge in profitability has vindicated your decision to move away from social gaming?
Patrick Southon (PS): We’ve not totally pivoted away from social gaming, instead we have just got rid of a loss-making business and we’ve tried to produce a team who can better supply our offering. That certainly comes across in our numbers that we are profitable, but that has come at a cost to our real money business, where we’ve been able to invest in it less and consequently we’ve seen a reduction in revenues.
For me I think it’s more a case that looking at the UK market and the opportunities on offer there, we just felt on balance with what’s happening in the UK and considering the opportunity to have our own bingo game in Slingo. We felt that there was more opportunity for us as a smaller operator in licencing content rather than producing small scale real money gaming content.
EGR Intel: How does having licencing partnerships with big media properties like Love Island aid Gaming Realms?
PS: Our background is primarily in bingo, namely in Foxy Bingo, where a lot of our guys used to work in the past. For me it’s very much the softer part of the market, with a demographically more female centric base. Love Island as a brand fits our technology very well as our platform is nearly 90% mobile driven and that drives a younger audience to us which is around the age of 30.
Love Island is obviously very much in the news, and by doing a licencing deal with them we can obviously build a game around that which we can licence. For Gaming Realms, its more about having ITV as a commercial partner, we’ve got loveislandgames as a partnership site that we co-market and that really enables us to generate more revenue as a business because we are co-funding it with ITV than we would if we were on our own.
This for me is logical, because at the beginning process of launching a new game if we don’t have the investment or marketing bucks to spend, its perhaps better to do a partnership deal.
Love Island is a fantastic brand of the moment, but we also have Britain’s got Talent, which has good ratings, so these TV shows resonate with the audience who like to gamble a bit and are infrequent gamblers rather than compulsive ones and that’s a good business for the UK case going forward I think.
EGR Intel: You have launched a live version of your Slingo online game in the US state of New Jersey, do you have any plans to roll this out in any other states?
PS: We will roll Slingo out where we can, based on the legalising nature of the US environment at the moment. We’ve only been in New Jersey for less than 12 months but we think we have more than 3% of market share just in terms of the nine games that we have launched in the state, which are doing fantastically well.
It’s partly because Slingo originates in the east coast of the US as an online casino game but we are planning on moving into Pennsylvania, if we can get a licence and anywhere else where its possible, we have quite high expectations of the US as it regulates. However, just because of sports betting has become legal in the last month, doesn’t mean that online casino gaming will follow suit, it will take its sweet time like anything.
EGR Intel: Does the company plan to use any of the revenue generated from the sale of its Affiliate business to fund new M&A?
PS: Not really, we don’t really have the funds for this as we’ve only just become profitable. We have been criticised in the past as a business for trying to do too much too quickly, so we are just trying to focus on making more games and having a stable UK RMG business considering what is going on in the UK at present. I think the world is moving very quickly and we are positioning ourselves to take advantage of that, but M&A for us is not one of the things we will focus on.
EGR Intel: Despite the changes made, the company’s revenue has still decreased, how do you plan to return the company to positive revenue growth?
PS: We want to move more towards being a licencing business, because it’s a lower revenue higher bottom line product. It may well be that our revenue continues to decrease as we move more into licencing, but our bottom line profit should continue to increase. While we get less total money overall, licencing is a higher margin business, so that’s what we are trying to focus on rather than top line revenue.