Australia’s Aristocrat Leisure Limited is realigning and fine-tuning its staff, including a realignment that will cut 15 percent of its workforce, in an effort to maximize the return on its growing digital gaming division.
A report from JP Morgan Securities LLC cited the digital division, including social gaming arm Big Fish Games, is a big reason for its prediction of improving results in 2019 and 2020.
The brokerage noted that since a restructuring of the Aristocrat Leisure business following the appointment in 2009 of Jamie Odell as chief executive, there had been greater focus on business segments offering recurring revenue—including online platforms such as social casino games. Trevor Croker, who succeeded Odell as CEO last year, has continued to develop Aristocrat’s digital business, including a US$500-million deal for social gaming company Plarium Global Ltd., completed in October 2017, and the agreement to acquire social casino firm Big Fish Games Inc. in January for $990 million in cash.
“Aristocrat Leisure has generated over 30 percent return on invested capital through acquiring early-stage and mid-tier business such as Product Madness, VGT, Plarium, and Big Fish,” noted the JP Morgan report, which added that the company has been “successful in transforming acquisitions via game designers and increased design investment.”
The company’s strategy to maximize that potential is to reorganize Big Fish Games, beginning with a realignment that will cut around 15 percent of its workforce, according to GeekWire.
GeekWire cited a staff memo sent to employees by Big Fish President and Managing Director Jeff Karp, who said the cuts are part of its “leaner” strategy, which involves re-aiming the company to focus on only casino and casual games moving forward.
“We’re doing fewer things better, to be bigger,” wrote Karp in the memo. “We are sharpening our focus to only develop social casino and casual games—genres where we have earned the right to lead the market.”
