A brief analysis of Evolution Gaming’s €450M bid on Big Time Gaming

Evolution is by no means a slow train and they are picking up speed like no other in the gaming space.

Evolution has been in the online gambling scene since 2006. Back then, the live product wasn’t at all as popular as it is today. They’ve kept on improving their live offering and haven’t focused much on video slot games. Well, Evolution actually launched a live slot (in 2012?), Mermaid’s Fortune, but it wasn’t too long-lived.

It took Evolution 14 years before they got serious about the video slot market and acquired NetEnt in 2020 (€1,8bn). With the NetEnt deal, they also got Red Tiger that NetEnt had acquired in 2019 for £200M + £23M.

There were unconfirmed rumours that Evolution was interested in Red Tiger back in 2019. If you think about that it makes you think about the shark, are Evolution the apex predator of the online gambling ecosystem?

We are gambling enthusiasts at Live Casino Plaza. In the back of the news of Evolution Gaming’s bid, we have made a brief analysis of where things could head for them.

Disclaimer: We are not professionals that analyse companies for a living. Fact-check everything you read to get a better picture of Evolution.

The 450 million EUR deal signed by Evolution Gaming Group

On the 12th of April 2021, Evolution announced the intention and agreement to acquire Big Time Gaming. If Evolution gets the regulatory approvals, which they expect to get in Q2 2021, the deal will go ahead.

Evolution and Big Time Gaming

The total consideration of the deal amounting up to €450 million will be paid in 3 instalments.

  • Upfront consideration: €220 million, €80 million in cash and the rest in shares.
  • First earn-out period: 70% cash and 30% in shares, payable 2023 for the years 2022/23.
  • Second earn-out period: 70% cash and 30% in shares, payable 2024 for the years 2023/24.

About Big Time Gaming

What could have triggered the move for Evolution to bid on Big Time Gaming? Big Time Gaming is a well-known slot developer in the gaming industry and their games are very popular among their players. Moreover, Big Time gaming secret sauce, Megaways is also a licensed product that many game providers use.

In 2020 Big Time Gaming generated €33 million in revenues with an EBITDA of €29 million.

Founded in 2011 by CEO Nik Robinson, the Australian company has only existed for about 10 years and managed to make a big dent in the gambling industry. Big Time gaming set out to create high volatility slots with big wins without the need for jackpots.

The game changer for Big Time Gaming happened when they introduced their new game mechanic Megaways in 2016. Their first game with the new mechanic was Dragon Born. But the release of Bonanza was the event that really made them take off and made them well known in the gaming scene.

Today, Big Time Gaming has several popular games without or with Megaways, like Extra Chilli. More important, their Megaways trademark and asset is active with a handful of game developers in over 200 games. The use of the game mechanic generates revenue share from all game providers using it on their games.

More recently, Big Time Gaming have released two new game mechanics, Megaclusters and Megapays. Only time will tell where the future will take these trademarks.

Big Time Gaming has a quite “small” game portfolio compared with the big studios. Despite this, they have a quite high share of turnover on their games on most of the online casinos. They are providing their games to over 350 operators.

Where does this acquisition put Evolution Gaming on the map?

It’s hard to speculate on where Evolution is heading. Let’s have a look at where they are now and their position after this acquisition.

Evolution Gaming is one of the biggest live casinos online with their Evolution brand. They are continuing their expansion through new markets and through locally land-based casinos.

The game portfolio is getting bigger and more diverse to cater for all new markets. Craps is one of the first games of many aimed at the American market. They have also created several softer live games like Crazy Time, MONOPOLY LIVE and Gonzo’s Treasure Hunt lately.

Ezugi is another live studio provider that Evolution acquired beginning of 2019 from a bid in 2018. Ezugi live studio has a strong foothold in the Indian market as well as some game studios in Latin America. Ezugi also has some presence in the Asian Market.

With the NetEnt and Red Tiger studios, Evolution has around 300+ slot games. Netent has 2 of the biggest progressive jackpot slots online, Mega Fortune and Hall of Gods. Red tiger has a hugely popular daily drop jackpot mechanism and network.

Big Time Gaming has a game portfolio with over 40 games and several trademarks that are licensed and used on over 200 games.

What are Evolution’s possibilities?

Naturally, it happens to be that both NetEnt and Red Tiger are using the Megaways trademark for a handful of their games. These revenues will now stay within the Evolution family. It’s pure speculation, but it only makes sense that we’ll see some more Megaways titles from both NetEnt and Red Tiger. Both for new releases but also revamps of older classics that might be losing their shine. The latter will probably also mean cheaper production costs.

Evolution has a very big contact and operator network now with Big Time Gaming, NetEnt and Red Tiger. Moreover, Evolution has its own gaming platform. One can only assume that all future integrations for operators will be via this platform. This should mean a great expansion opportunity for Big Time Gaming as well as the whole group.

With the evolution platform, one can only speculate on other moves such as creating a dominating jackpot network with all studios.

Evolution Gaming has launched its live game shows with big success. We can assume that they will continue with this genre of games. The assets and the talent pool of the slot studios will also be of great help when they want to produce high-quality live games of the “softer” kind.

What Evolution Gaming doesn’t have

There are still a lot of successful game studios in the industry that are open for sale. The question is if Evolution is happy with these game studios or not. Or are they looking at other verticals?

Sports betting could be an exciting venture for Evolution. Although it still is gambling, sports betting is another monster and another vertical. But if you are going for world domination it would only make sense to have another piece of the ecosystem.

If a live casino player wins money, they have the opportunity to play one of their slot games. What if one of their players win on slots, shouldn’t they get the opportunity to play on another vertical? Be that sportsbetting or on lotteries.

Just like the casinos in Las Vegas who don’t only make money from their casino activity, Evolution could be generating revenues from the whole gambling ecosystem.

Final words

We got excited when we read the news about Evolution’s bid to acquire Big Time Gaming. This article started as a small news flash but we got carried away about the potential future of Evolution Gaming. The fact is that we have seen Evolution from its cradle and they have always impressed us. Both as a company and game provider, throughout the years. Whatever path they take in the future, we are hoping that they focus on making great games for us players.