NetEnt has just revealed that its Quarter 3 revenue saw another decline, despite having acquired Red Tiger Gaming. In the three months up to September 30th, they reported revenue of £35.3 Million. This is down 1.3% on last year. However, it could have been worse. The purchase of Red Tiger and great exchange rates did offset the poor performance in the UK, Swedish and Norwegian markets.
Furthermore, NetEnt reported that most revenues came from royalties from games launched via clients. In fact, Royalties made up £35.1 Million of the total, down 2.7% from last year. As well as this, set up fees totalled £1.1 Million and the other £0.5 Million came from other sources.
However, without Red Tiger Gaming, it could have been a much different story. Overall, they contributed £2.5 Million to the revenue. So, without their contribution, NetEnt would have found themselves down 7.9%.
It was also clear that mobile games are the way forward. All and all, mobile game wins accounted for 65.3% of the total game wins. This is up from 61.8% last year. Plus, a massive 91% of game wins came from slots, with just 9% from table games.
Unfortunately, there are a few markets suffering. NetEnt had previously flagged the UK, Sweden and Norway as problem areas due to change in regulations. But, looking at the markets, without Red Tiger Gaming, only 14% of market share was the UK, 9% from Sweden, other Nordic countries 16%, Rest of Europe 50% and Rest of World 13%.
And yet, this changed significantly when Red Tiger Gaming was taken into account. Their games targeted 34% UK market, 4% Swedish market, and other Nordic countries 7%, Rest of Europe 29% and Rest of World 26%.
Clearly, there is cause for concern in these bigger markets. However, the US market is looking promising and good figures may be in the pipeline from New Jersey and Pennsylvania. It looks like there’s no need to panic yet as there is plenty of room in the US for NetEnt to grow.