The gaming sector could lose up to 6,000 million dollars due to the Covid-19 crisis: SEE REPORT WITH THE RANKING OF THE MOST POWERFUL COMPANIES IN THE WORLD
Brand Finance, an international consultancy based in Spain that is responsible for assessing and executing brand strategies for companies in various sectors, has quantified the financial value of the impact of the health crisis in the gaming sector in the world. The closure of establishments due to confinement and the complete paralysis of sports competitions could lose up to 20% of their value to the most recognized brands in the industry.
The global gaming industry could lose up to $ 6 billion due to the health crisis, as indicated in a report by the consulting firm Brand Finance that is developed in the article published by MarketingDirecto that we summarize for our readers.
Without a doubt, the gaming sector has been one of the most negatively affected by the health crisis and confinement, to the point that the world's 25 most valuable betting industry brands could together lose 6 billion. of dollars (about 5.4 billion euros) in brand value as a result of the pandemic, according to Brand Finance's first brand valuation report on the gaming industry.
Brand Finance has introduced a ranking in the gaming industry for the first time this year, developing a ranking of the most valuable brands that is led by the American Wynn Resorts, with a valuation of 3.4 billion euros. Curiously, we did not find Spanish brands within the ranking.
This analysis shows that the gaming sector is one of the most impacted worldwide, and that it could face a loss of brand value of up to 20% across the board. This impact will have its echo both in the casinos themselves, in person, and in online sports betting, since the shortage of active sports and the reluctance to go to closed spaces will affect their success. However, there is a potential advantage to online casino and poker games as a result of the pursuit of home entertainment, and Brand Finance estimates that potential losses of brand value in this particular segment should not exceed 10%.
Teresa de Lemus, managing director of Brand Finance Spain, explained that "there is a great opportunity to diversify in the sector taking advantage of the situation but it is also necessary to protect the loyal player so that it is not difficult to recover". As we can imagine, the industry gaming in Spain faces several different challenges today, not only in the fight against the impact caused by the coronavirus, with the closure of establishments, but with its own product. Sports betting, in fact, accounts for 98% of the Total bets that are made in Spain, and with the competitions completely stopped, Spanish companies are being forced to look for other market niches to avoid technical bankruptcy.
The main Spanish operator in the gaming sector is the Catalan Cirsa (owned by Blackstone), which closed the first quarter of the year with a 14.1% drop in its operating profit, to 88.8 million euros, and a decrease 6.1% in operating income, which fell to 355.7 million.
The aforementioned US venture capital fund bought the Spanish company in April 2018 for almost 2,000 million euros from the Lao family in a context where the evolution of the company was very profitable and the IPO was prepared for 2020. However, the emergence of the coronavirus and the need to undertake a previous refinancing have truncated the plans of Blackstone, which has 3,000 betting centers, 148 casinos, 242 gaming rooms, 76 bingo halls, 69,700 slot machines and 14,900 employees in the nine countries in the That operates.
Furthermore, Cirsa's situation is similar to that of Madrid's Codere. The company, sponsor and partner of Real Madrid and owned by several venture capital funds, the second in the sector in Spain, seeks 100 million euros of financing that it has commissioned from Bank of America and Credit Suisse. Codere registered losses of 97.1 million euros in the first quarter of this year, which meant operating income during this period 21.3% below the previous year, as a result of the temporary closure of the face-to-face business due to restrictive measures against coronavirus imposed in all its markets.
Since the State of Alarm was decreed on March 14, the nearly 3,900 establishments between gambling halls, casinos and bingo in Spain have been closed. The gaming sector, specifically private operators, are still in limbo and unable to open, while public gaming administrations, such as State Lotteries and Gambling and ONCE, have already been able to do so from phases 1 and 2.
Despite the decline in sports betting during this period, participation in games such as poker, casinos and roulette, slots and online bingo increased considerably. These data led the Ministry of Consumer Affairs to promote a package of measures for the regulation of online game advertising during the State of Alarm, although they were already foreseen in its program.
In addition to Sportium, from the Cirsa group and Codere Online, there are three other Spanish brands that have excelled in the sec
Despite the decline in sports betting during this period, participation in games such as poker, casinos and roulette, slots and online bingo increased considerably. These data led the Ministry of Consumer Affairs to promote a package of measures for the regulation of online game advertising during the Alarm State, although they were already foreseen in its program.
In addition to Sportium, from the Cirsa group and Codere Online, there are three other Spanish brands that have excelled in the sector, such as Luckia, and the Basque companies Kirolbet and Retabet.
Full Report here: brandirectory.com
