IGT, a leading gaming (and by gaming, I really mean, gambling) company, has placed a huge bet that social games is the next frontier to the gaming business by acquiring Double Down Interactive for $500 million.
Double Down Interactive is the developer of hugely successful DoubleDown Casino, which attracts 1.4 million daily active users (DAUs) and 4.7 million monthly active users (MAUs) month playing in their virtual slot machines for virtual money.
This seems to be a huge amount of money for a company that only has one game, considering that EA bought PopCap for $700 mm (to over $1 billion with earn-outs) and they have more than one big hit game.
On the other hand, IGT is the leading maker of slot machines in the world, so $500 million is a drop in the bucket for this company. And there are huge synergies between virtual slots in a social gaming environment and in the real world, especially if online gambling is made legal as yours truly predicts will happen this year.
Double Down Interactive plans to hire more people and create more games for Facebook and mobile with this money as well as probably go to Vegas for a weekend or two to celebrate.