U.S.video game developer eyes online gambling possibilities

Majesco Entertainment, a US video game developer famous for products like Zumba Fitness, clearly sees possibilities in the emerging American online gambling market and is becoming increasingly noticeable in the industry through media initiatives, conference appearances and some interesting acquisitions.

The company has taken over social casino game developer Orid Media and the Isle of Man online gambling operator Pariplay , giving it slot and scratchcard additions to its games inventory as it moves into the sector with a particular eye on the social gaming opportunity.

This week Majesco’s CFO Michael Vesey told the Star-Ledger newspaper that his company is going after a New Jersey online gambling service provider licence, saying:

“We’re going to register for a license and if someone was licensed in New Jersey and operated a casino, we could provide content services to them.

“The big players in the casino business and lottery business, you could try to muscle it out with them and take their position. The other way to go about it is that now they’re facing this transition for internet gaming, they need partners with expertise. That’s where we see possibilities.”

Majesco will be making its online gambling bid through its new subsidiary GMS Entertainment Limited, Vesey revealed.

That title has not yet appeared on official New Jersey gambling enforcement publications yet.

Majesco appears to need the new business; the publication NJ.com reports that during the second quarter in 2012, Majesco Entertainment earned $27 million, or 89 percent of its net revenue, from games sold for the Nintendo Wii and Xbox 360 consoles.

Just a year later, the company’s second quarter report showed a dramatic decline – $7 million from games sold for both systems, or 72 percent of the company’s net revenue for the second quarter.

CEO Jesse Sutton has made no secret of his new direction for the company, saying:

“I am incredibly excited about this opportunity in the fast growing online gaming market. During this transition year in console gaming, we have been actively exploring emerging growth opportunities in the social media and online casino gaming industry to supplement our existing business.”

Some social gaming industry observers do not quite share his optimism. Consultant Scott Steinberg told NJ.com that Majesco previously tried to enter the social and casual game space without success, opening a studio in Massachusetts.

It sent a team there to develop games for the social network Facebook, but shut the operation down in January 2013 and laid off 14 employees.

However, this time it has Orid and Pariplay on the books, both respected and experienced companies in which Majesco plans to invest up to $4.5 million in its new push into the sector.

Steinberg says that’s a good bet as the popularity of console gaming is being overtaken by the growing use of apps that are flexible, easily accessible, always available and can be quickly and continually augmented with new games.

“In terms of video games, what they’re investing for this new venture would cover only a percentage of what they would pay to develop another console game,” he said.

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