Playtech Completes Online Social Gaming Deal

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The online gambling software developer Playtech has announced the completion of its software agreement with Skywind Holdings Limited, which will provide access to the rapidly growing social gaming market and also strengthen its position in certain real money wagering sectors.

Social gaming has become a multi-billion dollar market that allows for revenue generation in a number of ways, such as sale of social currency for real money. The software license agreement with Skywind Holdings provides Playtech with access to a broad range of social gaming platforms and products, giving Playtech a number of options of entering this market. Playtech believes that it has the strengths to exploit this market based on its wide distribution channels, expertise in content development, backend and online marketing capabilities and the broad range of products.

Playtech plans to enter the social gaming market as leading B2B provider. The Skywind Holdings platforms and products are already deployed in a fast growing B2C social gaming operation with over 1.5 million monthly active users through well known brands like Slotsfarm and Raminoz. Both social networks and Apple App Store are covered and the specific product categories include social poker software, social casino and casino content software, social rummy software and social bingo software. The statement issued by Playtech read, "The incorporation of such an offering into the Company's core B2B business model will provide the potential for building a significant new stream of additional earnings to Playtech."

In the real money gambling section of the agreement with Skywind Holdings the focus will be on strengthening Playtech's mobile gaming product range. The products will include mobile poker software and mobile casino software and also rummy software and poker software.

The license agreement allows Playtech to use the software in its core B2B business models and any future B2C business models. The real money gaming software is being licensed on a perpetual basis, whilst the social gaming and real money mobile software is being licensed for an initial three year term. Playtech will pay a license fee of €6 million per annum plus a royalty fee of 20% of revenue generated in social gaming. No royalties will be paid on revenues generated from the real money software. The agreement also allows for the use of Playtech's games content and gaming software by Skywind Holding on a royalty free basis. This excluded branded content developed by Playtech. Skywind Holding will have to obtain the consent of third party brand owners and make the payment of charges in respect of branded content.

The Playtech statement concluded with the expression of intent that the Company will immediately devote resources to launch a full B2B social gaming model in order to maximize the advantage created by this deal. "It is anticipated that such investment and overall licensing costs will produce tangible results for shareholders over the medium term."

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