Entain to double in-house content investment as online Q2 revenue climbs 23%
FTSE 100 operator plots first VR product launch and commits to reaching headcount of 300 across three gaming studios in Italy, India and the UK
Entain has pledged to double its investment across its in-house games studios to strengthen the firm’s ability to provide customers with new and exclusive products.
Headcount will double to around 300 people across the FTSE 100 operator’s three in-house studios in the UK, Italy and India within a year, to help build new games for all markets, including the US.
Entain’s UK-based games studio near Manchester will initially create eight new roles, taking its overall headcount to nearly 50.
The promise falls in line with an industry-wide trend as gambling operators move to produce more proprietary content. Kindred Group (Relax Gaming) and LeoVegas (Blue Guru Games) have both purchased external slots studios via M&A to bring the sector’s hottest gaming content in-house, for example.
This trend was explored in detail by EGR Intel in June.
Entain has chosen to pursue a more organic strategy on this occasion and has committed to launch more free-to-play slots tournaments, which were played by more than 30,000 Coral customers in the UK last month following a domestic launch.
An international rollout of the tournaments is expected across Entain’s Gala, Party and bwin brands later in the year, as is the group’s first VR product for customers – a multi-activity sports club.
This content investment will also be focused on the US market. Entain’s Win Studios, which is based in Hyderabad, India, is developing 30 new products specifically for BetMGM customers.
“Developing more of our own games means we have complete control over what goes into them, not just in giving our customers a great experience, but also in keeping them safe,” said Entain gaming director Colin Cole-Johnson.
Elsewhere, Entain today reported its Q2 post-close trading update, where double-digit online growth continued for the 22nd consecutive quarter, climbing by 23% on a constant currency basis.
The operator reported strong performance in all major markets excluding Germany. Online NGR would have increased by 32% annually were in not for regulatory woes in the European nation.
Online sports betting NGR rose by 62%, reflecting limited sports events in the prior year due to Covid-19, while gaming NGR came in flat at 1% against a tough comparative pandemic period.
Entain also received a boost from retail reopening in the UK, albeit with volumes down 10% compared to pre-pandemic levels, as overall group NGR rose by 42%.
H1 NGR climbed by 11% year-on-year, with Italy and Brazil among the firm’s best-performing markets following respective first-half growth of 76% and 153%.
US brand BetMGM reported H1 NGR of approximately $350m.
Entain CEO Jette Nygaard-Andersen said: “Our diversified business model has enabled us to grow our business in all key markets while navigating channel and product mix changes as retail reopens and we annualise last year’s restricted sports calendar.
“Outside Germany, where the market is digesting regulatory changes, we saw excellent growth across all our major markets.
“Following our strong first half, we are upgrading our expectations for the full year, and we remain confident and excited by the breadth and scale of the long-term sustainable growth opportunities ahead of us,” she added.
Finally, Entain has agreed a five-year £590m Revolving Credit Facility (RCF) to replace the group’s existing £535m RCF, which was originally due to expire in March 2023.
Commenting on the financial results, Regulus Partners analyst Paul Leyland said: “Entain has demonstrated resilience and operational skill in dealing with a series of crises which could have fatally crippled any of its components.
“Further, by continuing both bolt-on and potential strategic M&A while also strengthening corporate sustainability, Entain is moving out of the danger zone most companies struggle with after a glut of M&A combined with senior management change.
“Nevertheless, there are plenty of challenges ahead as a global group copes with increasingly localised political-regulatory problems, potentially very challenging retail outlook in all exposed geographies, growing operational complexity and working out how to consolidate more than just losses from its most successful division,” he added.