• Playtika is a Ukrainian-Israeli company that became a pioneer of developing games in the social casino genre. It was sold to the owner of Caesars Palace in Las Vegas for $250 million. And then to a consortium of Chinese companies led by GIANT for $4.4 billion. Two years ago, the company went public.
• In Ukraine, the company has offices in Kyiv, Dnipro, and Vinnytsia. By 2021, the number of employees in Ukrainian offices reached 1,000 people. In total, the company has 4,100 employees worldwide.
• The company is currently conducting large-scale downsizing. According to Globes, between 600 and 800 employees worldwide will leave Playtika next week.
• The reductions are due to a 3-fold drop in the price per share on the NASDAQ exchange compared to October 2021. And also because of the decision of the private firm Joffre Capital to withdraw from the deal of acquiring 25.7% in Playtika for $2.2 billion. It was discussed back in the summer.
• It is known that 180 people will be laid off at Playtika’s central office in Israel.
• As Playtika informed AIN.Capital, the company will cut 15% of its staff in Ukraine. According to information in the letter sent to all employees today by Playtika CEO Robert Antokol (the text of the letter is in AIN.Capital’s possession), the company plans to cut 15% of the global team, too. It will abandon a number of projects, focusing on key fast-growing games.

“Ukraine remains an important place for Playtika. We are parting ways with some exceptional team members and recognize the tremendous value and contributions they have made toward Playtika’s position as an industry leader in mobile entertainment. Through compensation, benefits and services, we are taking steps to make their transition easier,”

Shlomi Aizenberg, Chief Operating Officer of Playtika, comments.

• Back in 2021, the company’s plans to reduce the office in Dnipro became clear: some of the employees were offered to move to Bucharest to Playtika’s Romanian office, while some were to leave the company in the first quarter of 2022.
• These are not the first cuts in Ukrainian Playtika this year. In May, it was reported about the downsizing of the Kyiv studio House of Fun. Another reduction of the Ukrainian office took place in November 2021. But at the moment there is still no talk of a complete shutdown of the Ukrainian office.
• Earlier in its quarterly report in 2021, Playtika noted offices in Ukraine, Romania, and Belarus as “risk factors”. It is known that the largest state of these three countries is in Ukraine. Playtika has 600 people in Belarus, 500 in Romania.
• Interestingly, the Playtika office in Minsk is still open. And Playtika is probably the last one of the big companies that still hasn’t left the Republic of Belarus.

According to the description, Playtika arranged a movie night with catering, bar, disco, and other entertainment for its Belarusian employees. The video was noticed by Ukrainians indignant at the expensive party on the territory of the aggressor’s allied state.

Actually, this is not the only party to have been held in Belarus. While Ukrainian children are dying under fire, there have been parties in Minsk. The last post dedicated to Ukraine on the Playtika account is dated March 7, 2022.

Playtika’s stance on the war in Ukraine

Playtika is an Israeli company that makes $1 billion in net profit a year and has R&D offices in Ukraine (Kyiv, Dnipro, and Vinnytsia). There is also an office in Minsk. As of 2021, Playtika employed 1,000 people in its Ukrainian offices and 600 in Belarus. As the channel Konspekt reported, Playtika cut about 40% of its staff from its Ukrainian studio House of Fun in late May. In its comments to Globes, the company said that the 250 laid off employees were from offices in Montreal, London, and Los Angeles, and most of the Ukrainians were not fired but assigned to other projects or relocated to Romania.

The company claims to have supported Ukrainians in every way possible during the war:

“Ukraine has always been an integral part of our operation, and we have supported our employees throughout these tragic times,” Playtika representatives said in a commentary to AIN.Capital in June this year in response to the news about large-scale staff layoffs.

According to information sent to AIN.Capital by sources familiar with the situation, Playtika did not disclose details of its war response plan until the last moment. And after February 24, the company was unable to ensure the organized evacuation of employees who asked for it. Over time, when the situation stabilized somewhat, the Ukrainian workers received one-time financial aid and assistance with housing and employment in the cities of relocation. Playtika reported this on LinkedIn.

Playtika also reported donating $100,000 to the Red Cross Foundation for humanitarian aid during the war in Ukraine. It should be recalled that the Red Cross Foundation officially calls the war in Ukraine a “crisis,” and for almost six months, the organization has repeatedly provoked criticism from Ukrainians, in particular over its negotiations with Russian Foreign Minister Sergei Lavrov about opening a Red Cross center to help Ukrainian refugees… on Russian territory! That is the state that actually made them refugees. Also, we cannot ignore the case of water delivery to the city of Dnipro, which was not needed there. There is still the question of how effectively the money donated to the Red Cross Foundation is spent and whether it really helps anyone in Ukraine.

Playtika ignors the question in the comments whether it is going to close its office in Belarus. Currently, the site has seven job openings in Minsk and ten in Ukraine.

Playtika also did not explain its decision to keep the Belarusian office open to Ukrainians forced to keep working with its staff. According to AIN.Capital sources, the company simply does not talk about this, and the management evades direct questions.

AIN.Capital asked Playtika’s press office for a comment, but so far there has been no response.

• The cause was a tremendous decrease in stock price after its Q3 2021 financial statement was published. You can see it in this graph.

• The financial result appeared to be below the expectations: $635 million in revenue instead of $661 million, as the investors expected. Earnings per share were also below the expected: $0.05-$0.2 instead of $0.25.
• One of the possible causes here is a change in the Apple iOS privacy policy: it caused problems for dozens of companies, including large social media like Snapchat and Facebook. But the Playtika management assured any changes at Apple would not affect the company’s income.
• Moreover, it is not the first time the investors are not satisfied with the quarter results. According to the Q1 statement, the revenue was higher than expected by $57 million, but the earnings per share were below the expected: $0.09 instead of $0.13.
• The stock fell by 25%, down to $22 per share, and it is below the initial stock offering price of $27, so the investors got losses.

Playtika refused to comment on the situation.

Dnipro office

During the last ten years, Playtika, a social casino company, was sold twice — for $140 million and $4.4 billion. It even went public in January 2021 and raised an additional $1.88 billion. Playtika was founded by Israelis Gigi Levy-Weiss and Uri Shahak, but from almost the very beginning, it was built in Ukraine.

Playtika’s first R&D center in Ukraine was opened in Vinnytsia, the second — in Kyiv. The third office was launched in Dnipro in 2012 as a result of a successful acqui-hiring of the Dnipro-based studio Alawar Southpoint.

The Dnipro R&D center, like the rest of the Ukrainian ones, is now headed by Israeli Ofer Dar, who previously managed the Kyiv studio House of Fun, which Playtika acquired in 2014.

Layoffs

As AIN.UA learned from its own sources, Playtika’s office in Dnipro will see some changes: some employees were offered a move to Bucharest, while the rest will leave the company in the first quarter of 2022. Specifically, we are talking about the team that worked on graphics and slot machines at Caesar casino. However, no one is talking about complete closure — there are still three job openings in the Dnipro office as of October 29. The remaining team will work on new projects. Perhaps it will work on developments for the companies that Playtika acquired in recent years — the German company Wooga and Finnish Reworks.

AIN.UA asked the company about the reasons for layoffs and relocation of the Dnipro office and how it would affect other Ukrainian offices. But at the time of publication, we did not receive any comments.

Risk factor

Notably, in its Q1 2021 report, Playtika, as an IPO company, named its R&D offices as risk factors — so-called country risks. Among the named offices were Ukraine, Romania, and Belarus. It is not clear whether these risks are equal. Meanwhile, as of 2021, Playtika employs 1,000 people in Ukraine, 600 in Belarus, and 500 in Romania. And together with people from Dnipro, this number will soon grow.

• This deal has some conditions. Playtika has so far bought 80% of Reworks for $400 million in cash. The Israeli company will acquire the remaining 20% of the studio for another $200 million in 2023, but only if the Finnish company meets its EBITDA target for 2022.
• If Reworks fails to meet its KPI target, the remaining stake will go to Playtika for $1.
• Playtika expects the deal to contribute about $30 million more to the company’s 2021 revenue.
• This deal is Playtika’s eighth acquisition of mobile game studios or similar intellectual property since its founding in 2010.
• The Israeli company has another $1.4 billion for future M&A deals.

Playtika has developed Caesars Casino, Slotomania, House of Fun, Bingo Blitz, and other popular mobile games. In 2011, Playtika was acquired by Caesars Interactive Entertainment for $100 million. In August 2016, a consortium of Chinese companies, led by Giant, bought the company for $4.4 billion.

The company has offices in Ukraine, particularly in Kyiv, Vinnytsia, and Dnipro, with more than 600 employees. In 2019, the company opened the R&D center of the previously acquired German game company Wooga in Ukraine.

According to dev.by, citing Bloomberg, during trading, the price per share of Playtika reached $27.

Playtika’s IPO

Initially, the Israel-based publisher had marketed the shares for $22 to $24. However, during trading on the Nasdaq Global Select Market, the company sold 69.5 million shares for $27 apiece. The total offering amounted to about $1.88 billion at $27 per share.

According to Reuters, the company had planned to sell 21.7 million shares with a further 47.8 million sold by existing investors. However, 18.5 million shares were sold by Playtika while 50.98 came from the existing stockholder.

According to GamesIndustry.biz, Playtika will not receive any proceeds from the sale of shares by the investors.

The funds raised by Playtika will be used to cover general corporate expenses, repayment of loans, and future investments and acquisitions.

About Playtika

Playtika developed Caesars Casino, Slotomania, House of Fun, Bingo Blitz, and other popular mobile games. In 2011, Playtika was acquired by Caesars Interactive Entertainment for $100 million. And in August 2016, the company was acquired for $4.4 billion by a consortium of Chinese companies led by Giant. According to the company, it has about 500 million installations for all its applications and 11.5 million active users per day.

The company has offices in Ukraine, particularly in Kyiv, Vinnytsia, and Dnipro, with more than 600 employees. In 2019, the company opened an R&D center in Ukraine previously bought by the German mobile games developer Wooga.

More than 50% of companies create or plan to create games for VR/AR devices. According to the study, Unity remains the most popular game development platform (69%). The most popular genres in Ukrainian game development are Action (40%) and Adventure (42%).

Not all companies, on the basis of which Ukraine’s game development map was compiled, took part in the survey. There were 72 participants in the first edition. The next update of this study is planned to be published in the summer of 2019.

The graphic map of Ukrainian game development, showing the largest market participants, looks like this (click to enlarge):

Rating of game development companies in Ukraine basing on the size of the staff looks like this (we included the first 50 positions, all in all 97 positions):