Managing director Matt Cole talks about the content developer’s recent acquisition of Games Warehouse, and puts forward some ideas on how the company is managing to punch above its weight when it comes to the placement of its games with big operators.
iGaming Business: You recently bought Games Warehouse – what was the thinking behind this and are there more acquisitions on the cards for Blueprint?
Matt Cole: The thinking behind Games Warehouse was it had a good pedigree — it was originally a land-based developer which then switched into online, which is pretty similar to the Blueprint story. The team was a tight team of 20 people, so it was the right kind of size in that it wasn’t too big to look at integrating into us but it wasn’t too small to make it too much effort for an acquisition.
If we can do similar acquisitions that beef up the amount of resource we’ve got and also give us that additional thinking in terms of game design then we will certainly look at that.
iGB: Do you expect more consolidation within the games industry generally?
MC: I think everyone expects ongoing consolidation on the operator side, which is still more fragmented than the supplier side. On the supplier side, the market we operate in is a bit more of a complex picture.
There are probably 40 credible suppliers at the moment making slot games but a lot of the revenues are still flowing through quite a small number of those suppliers. Probably in the UK there are really four or five that are generating 80% of the revenue, so it is quite concentrated and there has been less track record recently of people acquiring slot studios.
iGB: One of our iGaming Trackers reported recently on how challenger brands, including Blueprint, were increasing their presence on operators’ main casino pages, with Blueprint regularly achieving 12% market share of the tracked sites. What’s driving this strong positioning on operators’ home pages?
MC: In the UK it is probably fairly reflective of performance. We are about 10% of the UK market in terms of net gaming revenue for slot games, so we are probably marginally over index in terms of the positioning of games.
Hopefully good relationships and relevant games that perform give us decent positioning. We are quite careful in terms of what we release. Although we produce a reasonable volume of content we are really honest about which games we ask operators to position and push and also we are not frightened to drop games if they don’t perform.
iGB: People often describe the slots market as one which lacks differentiation and innovation. Would you agree with this?
MC: I don’t really agree with that. I think the quality of online games from lots of suppliers is really high at the moment; I actually think innovation is quite strong. But I think some of the innovation has been quite subtle. It is not a case that we are getting new games with a thousand reels that are 3D or using AR; innovation is subtle but that is the case in most industries.
If I compare it to the car industry – I don’t think innovation in the car industry is particularly rapid. Cars have still got four wheels, for example. I think people often look at slots and expect them to be changing every year and think we should be reinventing slots completely, but there is obviously a balance between giving players interest but also familiarity.
iGB: A number of suppliers have been focusing heavily on bonus features and tools of late. Why do you think this is and how do you see this trend developing in future?
MC: I think it is going to become an increasingly important battlefield. As a space it is becoming busier — there are lots of operators launching more games and as they look to differentiate and run different campaigns to compete with each other, I think offering tools beyond basic free spins is becoming more important.
I’m not sure anyone has really produced anything that is an absolute game-changer yet. Also, you can’t promote and use tools to make a bad game good. Fundamentally the player is more interested in the game than they are in the marketing tool.
iGB: Another of our iGaming Tracker reports outlined that Blueprint’s key areas of strength were the UK and Sweden. Are you worried about saturation in these mature markets? Does this put pressure on margins?
MC: We haven’t really got margin pressure and the way to avoid that is to keep making relevant games that perform for operators. Most operators are really just trying to focus on growth and looking at innovating in the space. Although we’ve got a strong market position in the UK we’ve definitely got a lot of room for growth.
The exciting thing about being on the supply side is that we know we could release one or two really good games in the next six months which could really move our position. As a longer term piece we are expanding outside the UK so we are developing different styles of games and putting the tech work into expanding into regulated markets.
iGB: Where are you looking at expanding to?
MC: In 2017 we certified in Denmark and Romania but the big opportunities really for us would be Italy, Spain and Portugal, where we are hoping to go live in 2018. We have experience in the Italian land-based market — we’ve got a strong position with VLTs in the Italian land-based market and also, through our parent company Gauselmann, we’ve got some good land-based content for the European markets and insight on the styles of games that work in those markets.
The approach is going to be a mix of taking our existing proven portfolio but also developing bespoke content that has more relevant game styles for the European markets.
iGB: What are the main challenges in entering new regulated markets?
MC: As well as the development effort and the tech work and the new ways of working, it is also how you cater for clients in that market. If you go to the Italian market it is a pretty mature market and we’ve got to service those clients in a slightly different way.
iGB: Blueprint has a bigger market share on sports sites than casino sites – are you hoping to change this in future and do you see potential for brands such as Blueprint to challenge the dominance of giant platforms that have exclusivity over many operators’ casino tabs in future?
MC: Sports sites have been where the majority of casino revenues have sat in the UK market, so historically we’ve worked with those operators. But, increasingly, as we’ve done more integrations with our RGS, either through partners or directly to casino operators, we are growing in that space quickly now.
I think increasingly people are moving away from the exclusivity model and the tabs that are doing better are the ones that have got a healthier mix of content and multiple suppliers. Then you’ve got lots of operators that run pure casino sites that don’t have a tab system, that just have all the content in a single place and they’ve often come into the UK from the Scandinavian market.
We are on the supply list for those clients so it is just a case of building a better reputation with their player base and with the businesses themselves. That is what 2017 was about and what 2018 is going to be about.
iGB: Given your recent growth, recruitment must be a key priority for you. What challenges do you face in hiring the right talent to keep up with the company’s growth?
MC: A lot of our growth has been organic and a lot of the talent that we’ve got here are people that we’ve taken on direct out of university and trained up. Games Warehouse is the first acquisition we’ve done and it is working out well to date and we think that is a good model to add additional people.
We work out of a single office near Nottingham, with Games Warehouse in Derby, so we’re not like other suppliers which have multiple offshore offices in Gibraltar or Malta or Eastern Europe. We’ve got the team in a tight-knit environment, which gives us the benefit of ease of communication and strong retention. It also helps with the quality of the product — when you’ve got designers and artists sat next to programmers, it means that everyone is working within one building on a product.
It helps with timelines but also really just helps get the product to the right level.