Aristocrat Shakes Up Social Casino Games with Big Fish Deal

Last week, in a rare twist of events, Australian gambling machine manufacturers Aristocrat Leisure announced its intent to buy social casino games development company Big Fish Games in Seattle. The $990 million game deal is a rare occurrence hence it did not draw a lot of attention but from the looks of it, the results will definitely be headliners in social casino circles.

Apparently, this deal with Aristocrat Leisure is Big Fish Games’ second major dealer – in 2014, Big Fish Games was bought by Kentucky Derby owner Churchill Downs for $885 million. Now, Aristocrat also seems to be toying with the idea of incorporating a business model that mixes their gambling expertise through their slot machine business and non-gambling social casino games where players get to play on virtual slot machines but without the perks of being able to win real money.

“The surprise announcement to acquire Big Fish for nearly $1 billion combined with its recent acquisition of Plarium for $500 million will transform Aristocrat’s digital business into a business that should generate in excess of $1.1 billion in revenues and $250 million in [EBITDA, or profit before taxes etc.] next year,”Eilers &Krejcik analyst Adam Krejcik said. “Following the acquisition of Big Fish, we expect Aristocrat will be the No. 2 social casino publisher worldwide. Additionally, Big Fish (along with Plarium) will help expand the company’s addressable market opportunities as it relates to social games.”

Aristocrat Leisure’s stakeholders are anticipating that the deal will be closed within the first quarter of 2018 pending regulatory approval which should follow shortly after. If things go as well as
Aristocrat hopes and the company effectively executes on the revenue expectations, Aristocrat is set to outgrow rival game company Zynga whose current market value is $2.5 billion.

“Big Fish’s digital-first social casino content and industry-leading meta-game capability and applications are highly complementary to Aristocrat’s existing and industry-leading land-based digital content business. The acquisition of Big Fish will immediately provide scale across our entire digital platform” said Trevor Croker, Aristocrat’s chief executive officer. “The strategic and financial benefits from the acquisition are highly compelling”

After the acquisition, Big Fish Games will continue to operate independently as a stand-alone business and this will be alongside two other Aristocrat-owned digital businesses, Plarium, and Product Madness. Furthermore, players will still get to enjoy fan-favorite Big Fish titles like Fairway Solitaire and Gummy Drop! as well as amazing titles from Big Fish’s globally top-ranked social casino app, Big Fish Casino.