Great Acquisition, page-137

I've had a think about the push into mobile gaming.

I think the social casino side of things is ok, and let's face it the business model is amazing seeing people are gambling with no expectation of winning actual money, given that the apps are based on multiple slot games within them. So by that I mean it is inherently diversified and players are expecting to play multiple games and don't download it for one experience so to speak. Given ALL can leverage it's game library and those of the acquisitions I think that is enough of a competitive advantage. It would be hard for a new entrant to develop slots to the same standard and then , even after that, be left to grind out market share from other 'social' casinos.

However, the casual, RPG and strategy segments, Plarium in particular, rely on single titles that inevitably won't remain popular forever particularly when a new title takes the world by storm, and they haven't created it! There are very low barriers to entry for someone with an idea that can take off and quickly amass a big market share thus disrupting competitors, no matter the 'best in class monetisation' and teams of creators. Yes, having an established business with great talent gives you a leg up though ALL has paid a pretty penny for this. It's essentially a big gamble that the businesses that ALL paid while they are at the top, remain at the top via the most popular content.

I think paying top dollar for market share in the casual, RPG and strategy segments is crazy. No synergies and no cross over with ALL's core competencies. Popularity of these games may change on a dime and simply buying a couple of seats at the table of freemium gaming while pinning hopes at remaining relevant isn't responsible.

I'm holding for the 'other' Aristocrat. Let's face it, if half the value of these acquisitions are written off in a couple if years no one will be surprised.