Weakness in the Nordic countries, and primarily Sweden, has resulted in casino content developer NetEnt reporting declining revenues for the second quarter on the year.
Also issuing a H1 update, NetEnt’s report shows that 4.1 revenue decline in Q2 from SEK 437m (£37.1m) to SEK 419m (£35.6m) contributed to a 3.4 percent drop during the year’s first half, with figures falling from SEK 867m (£73.7m) to SEK 837m (£71.2m).
Driven by fewer players and lower ARPU since the new regulation was introduced at the beginning of the year, outside of the Swedish market, in the 23 jurisdictions that the firm has a presence, revenue grew 1.7 per cent, primarily due to a strong performance in New Jersey, Eastern Europe, Spain and Portugal.
Therese Hillman, group CEO of NetEnt, explained: “The weak development in the Nordic countries continued in the second quarter, particularly in Sweden, where we have seen fewer players and lower ARPU since the new regulation was introduced at the beginning of the year.
“Looking ahead, we continue to invest in increased game production, a technical platform featuring more functionality, and live casino, in order to defend, and over the longer term increase our market shares in all our markets.”
Operating profit for the first half of the year came in at SEK 256m (£21.7m), an almost ten per cent drop from SEK 283m (£24m), with its second quarter 12.7 per cent dip, to SEK 130m (£11m) from SEK 149m (£11.4), said to be impacted by legal costs as the company “took action to defend the IP rights of one of its most important games”.
The number of game transactions amounted to 10.6bn in the second quarter, representing a decrease of 1.3 percent as compared to the same quarter last year, with mobile games accounted for 64 per cent of game win in the period, up from 58.2 per cent.
Slot games accounts for the majority of the figure with 91.8 per cent, table games made up 7.8 per cent, with the rest accounting for the remaining 0.4 per cent.
Taking a peek at long-term growth strategies, Hillman stressed that live casino is very much falling on the radar: “Now we take the next step in developing our technical platform as we are creating an open platform with new types of functionality and aggregation of third-party content for operators, services that will be launched on a broader scale during 2020.
“The transformation of live casino continues at full speed and we added several new functions during the quarter to make our product more competitive. The customer response is positive, and we expect growth in the coming quarters from this segment, but it will take a few more quarters before we can see more meaningful revenues.”