Playtika has paused its search for a sale or merger, and now plans to spend up to $1.2bn on M&A in the next three years.
In its Q4 23 earnings report, Playtika also stated that direct to consumer revenue increased 7.6% year over year to $161.6m, and is now 25% of overall revenue. Revenue was up 1.1% year over year to $638m and credit adjusted EBITDA was $189m, down 6.8% year over year.
The company said it decided to pause its search for a sale or merger “due to ongoing uncertainty in Israel and Ukraine,” and framed 2024 as a year of reinvestment.
$600m-$1.2bn has been earmarked for M&A over the next three years because the company believes it is “well positioned to lead consolidation in the mobile gaming industry,” said Playtika president and CFO Craig Abrahams. Later on the earnings call, Abrahams said the firm is likely to make “one to two transactions a year, depending on what’s available in the marketplace.”
“We do see this environment as one that is a great setup for consolidation,” he continued. “The maturing of the market, the difficulty a lot of the smaller companies have with the advertising market…we think we’re well positioned. We have a billion dollars in cash and we have a $600m credit facility.”
There was also an update on Playtika’s decision to halt new game development until the marketing landscape improves, announced in February 2023. The pause will continue, said CEO and founder Robert Antokol, who noted that Playtika “never had a good history of developing new games”
“It’s never been our DNA,” he continued. “Our DNA was always M&A, and we did very well with M&As in the last 10 years. I’m not saying that we’re not going to have any kind of experience with new games, but it’s not the main focus. Our main focus, again, is M&A.”
Playtika added that it plans to increase performance marketing spend for its established titles in the next year.
Playtika announced it was exploring ‘strategic alternatives’ in February 2022, and launched a bid to buy Rovio in January 2023, which ultimately failed. It has also made several rounds of layoffs since then, most notably in December 2022 and January of this year.
Playtika snapped up Governor of Poker maker Youda Games for an initial ~$90m in August 2023, and Animals & Coins maker Innplay Labs for around $80m, though that may rise to a “maximum consideration” of $300m. It also invested $25m in Turkish start-up Ace Games.
