Aristocrat Entertainment CEO Trevor Croker said the company plans to “significantly escalate” its focus on convergence products and services, which may involve mergers and acquisitions.
In his annual address to shareholders, Croker said the group had undertaken a strategic review of its business over the past year in response to the Covid-19 crisis.
While the overall strategy of the company won’t change, there may be changes in emphasis, he said.
“In the context of COVID, and with the encouragement of our customers, we will continue to significantly escalate our focus on convergence products and services as part of our strategy,” he told the meeting. “We remain ready to invest to accelerate our strategy.”
In the 2020 financial year, the group’s digital arm far outpaced its land-based business as the pandemic shuttered casinos and caused significant disruption to travel. Overall group revenue in the year fell 5.9 percent to $4.1 billion, with 29 percent growth in digital going a long way to offset a 35 percent drop in land-based.
Aristocrat at present does not have real-money online gaming. Its digital businesses include London-based Product Madness. The unit offers social casino games, which echo Aristocrat’s real-money content, such as Heart of Vegas, which incorporates Dragon Link from the company’s Lightning Link slot games. It also owns Plarium which owns highly popular role play games, such as RAID: Shadow Legends.
Given the strength in its digital business, analysts have questioned why it has not yet ventured into real-money gaming.
J.P. Morgan analyst Don Carducci wrote after the company released its annual results in November that a move in this direction remains a matter of “when, not if.”
“ALL is most likely to buy (not build) into this segment,” he wrote. “We assume multiple acquisitions of small-to-medium size.”
In his Friday address, Croker confirmed that expansion would likely be through acquisitions, but other than mentioning convergence products, did not give any indication this would include real money games.
“We have the balance sheet strength to support bold moves as well as incremental ones, and to take advantage of opportunities and disruption,” he said. “We also have a track record of leveraging M&A to accelerate our growth, first into attractive Gaming product segments and more recently to scale in Digital.”
Analysts are watching for the company’s next move.