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Why NetEnt acquired Red Tiger Gaming

by Sponsored Content
24th Mar 20 11:17 am

One of the most trending stories in the casino world last year was Red Tiger Gaming’s acquisition by NetEnt. There had been no prior rumours the merger would happen. But toward the end of September, the Swedish software giant splashed £197 million to own majority shares of RTG.

It’s been six months since the purchase happened. But many casino players have been asking, why Red Tiger Gaming? Wouldn’t a closer rival like Microgaming be a better idea?

Red Tigers’ explosive growth

Established in 2014 and registered in the Isle of Man, Red Tiger has been in the industry for less than a decade. Still, that didn’t stop NetEnt from spending nearly £200 million on the company.

Red Tiger Gaming has been of the fastest growing software providers in the past couple of years. Unsurprisingly, it enjoyed revenues worth £18 million in 2019, ranking it amongst the best performing software providers last year.

With such an incredible performance for a company launched six years ago, it’s not surprising NetEnt acquired it. Red Tiger’s mushrooming growth means NetEnt could profit from the new company further by bringing its resources onboard.

On-demand casino lobby

Casino games are what drives growth among software providers. NetEnt, for example, has a portfolio of over 500 slots and table games. Some of its slots are considered classics or pioneers other developers can only copy.

Red Tiger’s casino lobby consists of over 200 unique games. They include Mystery Reel Megaways, Dragon’s Fire Mystery, Plenty: Battle for Gold and Dragon’s Fire: Pirate. These games feature the latest in casino innovation: realistic graphics, high RTP rates, auto-play, bonus rounds and mobile gaming to name a few.

Red Tiger’s daily jackpots are however the company’s signature innovation, and one of the reasons for the company’s exponential growth. The jackpot network is designed in such a way that you can win the daily cash prize regardless of which casino you use.

All you need is to play Red Tiger’s jackpot games at your favourite online casino. Of course, that will soon also mean playing at NetEnt casinos. You can search through a casino’s lobby to find Red Tiger games. After that, bet as you watch out for daily jackpots.

  • A maturing business

Red Tiger’s ability to make £18 million per year after five years in the industry meant it was doing something right. And for a larger business like NetEnt, Red Tiger was a business ripe for acquisition.

Large companies generally favour upcoming startups over equally established corporations. That’s because the smaller businesses still have plenty of potential to increase their revenues and capture new markets.

With the introduction of more financial resources and the human resource from NetEnt, there’s only one direction for the merger: growth.

  • Eliminating competition

Red Tiger’s tremendous growth rate in the last several years must have frightened some of the industry’s heavyweights. It’s been partnering with dozens of casinos nearly every month, posing a lot of threat to NetEnt and similar businesses.

It wouldn’t be surprising that one of the reasons NetEnt bought Red Tiger was to turn a rival into a partner. And in doing so, the Swedish developer now also has a new target audience.

Of course, NetEnt wasn’t the only company Red Tiger has been competing with. But being a forward-thinking developer, purchasing the Isle of Man company solved two essential challenges: competition and expanding its market.

  • Robust management

As mentioned, Red Tiger was not a struggling business in need of a bailout at acquisition time. Quite the contrary, it was a business on the rise thanks to a talented team of managers, marketers and developers.

RTG has always had a reputation for being a model software developer. Precisely, it’s always prioritized quality when developing games and offering 24/7 customer support to casinos.

As a result, it’s been able to work with some of the most famous online casinos: Betfair, Betsson and Paddy Power to name a few. Unsurprisingly, NetEnt didn’t change the company’s management, including CEO Gavin Hamilton.

In the general business world, it’s not uncommon for large businesses to buy smaller companies just to change the existing management. In many cases, they usually have researched and realized they could turn around the company with better executives. Luckily, that was not the case with RTG.

  • Upcoming table games

Red Tiger’s success in an industry full of failing software providers is only the tip of its iceberg potential. The fact that that’s also been recording over £10 million in gross earnings through slots shows t could explode if it invests more in table games.

RTG had already announced it was considering to develop a comprehensive library of poker, blackjack, roulette and baccarat games. But when or if that will happen now that it has new owners is in limbo.

  • Two strong forces

Both NetEnt and Red Tiger Gaming are competing for the same market. But instead of competing, they now have a chance to work together to have an edge over other businesses.

NetEnt will bring its financial powers, talented team of developers and marketers to help improve things over at RTG. Of course, the Isle of Man won’t need much help being a futuristic provider.

The two companies tend to excel at slot machines. So, by combining, they are only going to introduce more innovative games to the industry.

  • Low risk, high reward acquisition

If NetEnt’s deal with RTG could be summed up in one sentence is that’s it’s a relatively low-risk high rewards investment. It’s not a low risk in the sense that nothing could go wrong with RTG.

However, Red Tiger is one of a few new software providers that have been performing exceptionally for the last several years. It’s annual income, the number of partnerships with casinos and proper management all say it could be a global brand in the next decade.

Of course, NetEnt will need to step up to steer Red Tiger is in the right direction. Whether it’s the introduction of table games or managing its existing portfolio, it will be up to the Swedish giant to determine how successful RTG becomes.

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