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So far, PlayStudios investors don’t seem too thrilled about the newly combined company that offers free-to-play game users rewards.
A week after its combination with Acies Acquisition Corp. debuted on Nasdaq, its MYPS and MYPSW stocks remain stagnant. MYPS traded at $7.93 on Tuesday and MYPSW reached $1.82. When PlayStudios debuted on Nasdaq on June 22, its stocks and warrants traded around the same. MYPS was valued at $8.40 and MYPSW was $1.79.
It’s a surprisingly underwhelming debut for a company that was valued at $1.1 billion in February, when news spread about the merger with “newly organized blank check company” Acies.
It’s especially brow-raising, considering PlayStudios is also expanding its loyalty program rewards partnerships with brands like MGM Resorts International and IHG Hotels + Resorts. Players of its free games that include myVEGAS and POP! brands can redeem points for real-world rewards from those partners.
Co-founder and CEO Andrew Pascal calls the PlayAwards loyalty program a key brand differentiator in the free-to-play mobile gaming space. In his company’s first day of Nasdaq trading, Pascal said of PlayAwards:
“Mobile gaming is a highly competitive industry, and long ago we recognized the need for something that is compelling and unique to rise above the noise, while also rewarding players for their time spent in the games.”
Founded by six people in 2011, with investments from Activision Blizzard and MGM, the company grew to 440 employees listed on LinkedIn on Tuesday. Going public will allow the company to expand even further.
In an announcement about the newly combined casual game developer’s debut on the Nasdaq, PlayStudios said last week that it is “now poised to make new investments that will expand its content portfolio and attract new brand partnerships for its playAWARDS loyalty marketing platform.”
As of June 22, that meant “$220 million in cash.” By June 25, PlayStudios had “a new $75 million, five-year secured revolving credit facility.” Some of that expansion is going to come in the form of acquiring companies–although PlayStudios hasn’t revealed the identities of those organizations.
Free-to-play games generally allow users to buy coins in order to play longer. Once games assign value to players’ time, they enter areas of the law that are still being decided.
For instance, a plethora of social casino players are suing Google Play and the App Store, alleging the middlemen are profiting from illegal gambling apps. Judge Edward J. Davila is presiding over the separate Google and Apple matters in the Northern District of California.
The Apple complaint even names POP! Slots and myVEGAS Slots.
However, the database of casual gamers remains attractive to PlayStudios’ loyalty club partners.
In its investor presentation, PlayStudios said it had 4.2 million monthly active users and more than 100 million downloads. Because it cross-promotes its new games to current players, each new product has more than 150,000 daily active users within three weeks.
As PlayStudios tells potential loyalty program partners on its site:
“Our nearly 5 million unique users begin unlocking their in-app awards during their first play sessions. When your promotions are among these coveted loyalty benefits, they are not seen as special offers or discounted giveaways that ultimately erode brand value. They are seen as something earned, which enhances their worth.”
PlayAwards partners are also promoting their brands to that database. It’s a concept that’s already appealed to 78 brands, including several US retail casinos. PlayStudios estimates gamers have redeemed rewards valued at at $500 million.
On June 3, PlayStudios announced MGM Northfield Park would become PlayAwards’ 18th MGM property. In that press release, David Tsai, president of the Midwest Group for MGM Resorts, said:
“Throughout the years, PLAYSTUDIOS apps have introduced millions of players to the virtual and real-world thrills of our resorts. With the addition of MGM Northfield Park to the playAWARDS portfolio, players and guests can experience the excitement of our resorts throughout the country.”