Aristocrat to expand its catalog of games significantly
Aristocrat has inarguably put itself in a very comfortable position in the gaming market. Last year, the company has achieved a profit of $752 million after-tax. However, it doesn’t seem to show any signs of slowing down. “It’s a significant business in its own right. I’m confident in our ability to grow the digital business,” – said the chief executive of Aristocrat, Trevor Croker. He also confirmed the reports that the developer has 19 new games in the works. This news in addition to the positive financial figures released last week drove the price of the company’s shares up to $33.62. Big Fish and Plarium, Aristocrat’s subsidiaries also are contributing strongly to these changes. “What we’ve been able to offer them is our capacity to grow and invest for growth in them for the longer term,” – Mr. Croker commented.
The CEO of the company also emphasized one of the products of Plarium titled RAID: Shadow Legends. It represents a turn-based role-playing game and has been very successful with the customers. “The game is already delivering very significant growth numbers and delivering considerable revenue to the business. It is still scaling quite well. What this has taught us is that we can go into adjacent genres within the digital business and be successful. It has shown us how to scale similar games quickly,” – Croker said about the game.
These comments and the latest decisions made by the company are indicative of a shift of the focus towards digital business, which offers an increasingly bigger potential. Chairman Net Chatfield is also a strong proponent of the shift. He served as the Seek chairman until the end of last year and is now a board member of Costa Group and Transurban Group. According to Chatfield, the digital market offers a huge opportunity. “Every company needs to be bold,” – said Chatfield about the potential difficulties that come with the merger of digital and legacy businesses.
In addition to going digital, there’s also a huge potential in going global. The company doesn’t have to stop developing its land-based gambling machine operations altogether. On the contrary, there is a huge room for expansion there as well. “We still have a long runaway on our land-based business. It continues to present opportunities, not just taking share against our competitors, but also entering new markets,” – Mr. Crocker commented. “I don’t see it as a trade-off at all. We’ve got a large addressable market in the digital world where we are only an emerging player, and we’re getting stronger and stronger in the land-based business,” – he added.
With a stronger balance sheet, Julie Cameron-Doe, the chief financial officer of the company, now believes that there is room for capital management, of which buybacks could be a great example. “Absent any significant M&A then we will certainly come back with more to talk about in terms of capital management,” – Ms. Cameron-Doe commented. Digital delivered a much better result than we had expected … and was the driver behind the beat,” – she added.
Aristocrat came out with its very first machine in 1953 and in 1996 it was listed on the Australian Stock Exchange. Over its history, the company has provided many high-quality gaming solutions to the market. The main activities of Aristocrat cover design, development, and distribution of the gaming content and systems. As of now, the major markets where the company operates are the Americas, Australia, and New Zealand. However, with the focus on expansion, this might very well change in the near future. Aristocrat paid $500 million to acquire Plarium in 2017 and later that year it also acquired Big Fish Games for $990 million. With the combined resources and the new opportunities presented by the digital market, there is still a lot of room for the $22 billion valued company to grow.