Posted in Industry August 9, 2019
NetEnt’s Q2 Revenue Drops
Starting and growing a business is tough, but the real challenge comes during the maintenance period. Companies often experience drops in revenue, which can be concerning. NetEnt, a leading online gambling company, saw a 4.1% decline in revenue in Q2 2019, amounting to just under 40 million euros. While this may seem significant, it is important to understand the impact of even small declines on a large scale.
What Caused the Drop?
Identifying the exact cause of a revenue drop can be difficult, even for companies with top experts. In NetEnt’s case, they had to take legal actions to protect the intellectual property rights of one of their major games. Although the dispute was resolved favorably in May, the costs incurred were substantial.
Despite the high costs, it was the right move for NetEnt to protect their rights. It sets a standard in the industry and shows that these cases can be won. As a large company, NetEnt can afford such actions, unlike smaller companies that struggle with high legal costs. Investors are there to support smaller companies in defending their rights, provided they are on the right side.
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The Nordic Countries
Apart from the legal battle, NetEnt has observed a decline in interest from people in the Nordic countries, particularly Sweden, where the company was founded in 1996. This decline in interest is unrelated to the lawsuit, making it more challenging to determine the exact reasons behind the drop.
NetEnt’s CEO, Therese Hillman, acknowledged the loss of traction in the Nordic countries, especially in Sweden. She mentioned lower average revenue per user (ARPU) and a decrease in the number of active players compared to previous results. However, NetEnt remains committed to improving technology, increasing productivity, and gaining market share in all markets.
NetEnt is Still Dominant
Despite the Q2 revenue decline, NetEnt continues to have a significant impact on the online gambling industry and remains relevant in the market. While the decline is unfortunate, NetEnt is actually performing well overall. In fact, they secured the top spot in iGaming’s Tracker for June!
Apart from Sweden (which experienced a decline), NetEnt operates in 23 other regulated markets where they saw a growth of 1.7% in Q2. Their recent entry into the US market has been particularly successful, contributing to their overall growth. As federal legislation becomes more uniform across all countries, companies like NetEnt will have the opportunity to dominate the entire market. NetEnt is well-positioned to offer their outstanding content to millions of people as they expand into new territories.
Should Players Be Concerned About the Revenue Decline?
Unless you are an investor in the online gambling industry, there is no need to worry about revenue drops. As a player, you want regular game releases, high-quality content, and fair play, and NetEnt guarantees all of that. The company is focused on establishing new subsidiaries, hiring talented individuals, resolving legal matters, and other necessary actions that may impact revenue. This should not affect your opinion of the quality of the casino you play at, as long as you are treated well and have an enjoyable experience. Profit fluctuations are subjective and do not determine the overall quality of a well-established company like NetEnt.
If there is a decline in the number of active players, the company will work hard to regain traction and attract more customers. They may even offer outstanding bonus deals that players can take advantage of. It is important to remember that reviews and statistics matter more for smaller, lesser-known operators. Established companies like NetEnt have earned their reputation by providing the best user experience possible.
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