Direct-To-Consumer Is Now 25% of Playtika’s Revenue
Playtika’s direct-to-consumer (DTC) platform has grown rapidly in the past two years and now makes up nearly a quarter of the company’s total revenue. The growth appears to come primarily from Playtika’s strategy of using VIP programs to offer exclusive perks and purchases to players who switch from Google Play and App Store versions of apps to Playtika’s independent platform, which consists of browser versions and direct Android downloads of select games. Current DTC titles include their top casual game (Bingo Blitz) and most of their social casino-themed games (Slotomania, House of Fun, Caesars Slots, and World Series of Poker). Playtika plans to release DTC versions of Solitaire Grand Harvest and June’s Journey in the second half of 2023.
DTC platforms share many advantages with external web stores, including lower fees, more freedom in IAP pricing, and the ability to tailor IAP bundles to each player. Web stores have boomed following the Epic v. Apple case, which we covered in our report. But DTC platforms also have unique advantages over web stores.
Once players make the switch to a DTC platform, they enjoy an uninterrupted experience just like app store versions. In DTC platforms, custom IAP bundles and offers can be integrated directly into gameplay, and purchases can be made without having to leave the game. In contrast, web stores create friction during gameplay because players must leave apps to make purchases, and they drive traffic outside of the app where players can get distracted.
DTC platforms also aren’t subject to Google and Apple’s data collection policies, allowing developers to collect more granular user data. This data helps developers offer more targeted bundles and better advertise other apps in their portfolios. Because of this, the successful expansion of Playtika’s DTC platform has enabled them to fare better than some of their competitors in the post-ATT landscape.
Platform Growth
Playtika’s DTC platform made up 23.2% of Playtika’s total revenue in 2022, up from 20.5% in 2021 and 13.6% in 2020. This relative increase comes from both growth in DTC revenue as well as contraction in non-DTC revenue. DTC platform revenue increased 14.7% from 2021–2022, ending the year at $607M. Total revenue only increased 1.3% in the same period, ending the year at $2.6B. This means non-DTC revenue actually decreased 2.2%.
The DTC platform has remained strong over the past year, despite total revenue falling. Their recent earnings report shows that Playtika generated $151.5M of revenue from their DTC platform in Q1 2023. This revenue is a 0.9% increase QoQ but a 0.6% decrease from Q1 2022. In contrast, Playtika generated $504.7M of revenue from third-party platforms in Q1 2023, which is a 4.9% increase QoQ but a 3.8% decrease from Q1 2022.
User Acquisition
Playtika appears to be driving big spenders to their DTC platform through VIP programs, which offer exclusive rewards, bonuses, and other perks that players can only access through the DTC platform. For some apps, such as Caesars Slots, VIPs are handpicked and personally invited by Playtika. For other apps, such as the company’s top casino app, Slotomania, any player can join once they earn enough Status Points.
In Playtika’s rewards program, players earn Status Points from purchases and other in-game activity across the company’s catalog of apps. Players who earn 250K Status Points unlock the Diamond Tier, the third highest of seven tiers, and gain access to the Slotomania Inner Circle VIP program. Slotomania’s Inner Circle can only be accessed from a web browser or an Android APK downloaded directly from Playtika. However, players can’t access the Inner Circle in the versions of Slotomania downloaded from the Apple App Store or Google Play. Instead, Android players are instructed to download and install an APK from Playtika’s website. Apple doesn’t allow third-party apps, so iOS users are instructed to update their OS and then create a shortcut to the web version.
Getting players to install an app directly from a developer is a big ask that is likely outside the bounds of what many mobile players are comfortable with, so Playtika only targets players who are heavily invested in the app and provides valuable incentives to get them to switch. Inner Circle includes a suite of enticing perks, including more premium currency from purchases, extra boosts, larger bonuses, more slot spins, and sneak peeks of new games.
Non-VIPs can also play browser versions of many titles. House of Fun incentivizes web players by giving them 15% more coins, free daily gifts, and extra prizes for Big Wins. However, due to the large growth of the DTC platform, it’s more likely that most revenue is coming from high-spending players switching over.
