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Casinos> 2007
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More Asian Moves For Cryptologic
568 Network deal strengthens Asian strategy
Turnkey provider and gambling software developer CryptoLogic Limited
has inked an agreement to acquire a financial interest in 568 Network
Inc., a developer and distributor of online casual games to the
Chinese market.
The agreement - valued at $1.2 million - strengthens CryptoLogic's
position in Asia, widely seen as the next growth market for Internet
gaming.
Under the terms of the agreement, CryptoLogic has the option of
taking a controlling interest in 568 Inc. in the future.
"Just as CryptoLogic is an e-gaming industry leader in Europe
today, we aim to be a leader in Asia tomorrow," said Javaid
Aziz, CryptoLogic's president and CEO. "The stakes are rising
in Asia, which has a population of almost four billion, a deep-rooted
gaming culture and a fast-growing rate of Internet adoption. CryptoLogic
is already a player in Asia - and this investment strengthens our
hand considerably for the years to come."
The agreement enables 568 Inc. and CryptoLogic to establish a new
China-based venture that will develop and distribute casual, skill-based
games for the local and overseas Chinese-language markets. Games
will include single- and multi-player mahjong, poker, online pool,
puzzle challenges and approved card games including Chinese poker
variants.
568 Inc. has a Chinese subsidiary that is already creating games
for that market. Its titles include card games such as "Fight
Landlord" and "Za Jin Hua," and skill-based casual
games such as "Lian Lian Kan" and "Dragon Ball."
"With CryptoLogic as a partner, we gain two things that are
critical to success in China: the scalability to support thousands
of concurrent players, and the expertise to deliver a superior entertainment
experience," said George Chen, CEO of 568 Inc. "We are
seeing early signs that we are on the right track: since June, we
have generated more than 350 000 new registered players and are
averaging more than 4 000 concurrent online players. Together, CryptoLogic
and 568 Inc. have vast potential for profitable growth."
In addition to its experience in casual games, 568 Inc. brings
proven experience and assets in massively-multiplayer-online-role-paying
games (MMORPG), another rapidly growing segment of online gaming.
Through its wholly-owned subsidiary, G4Box, based in Canada, 568
Inc. operates high quality MMORPG games developed for the North
American online multiplayer games market.
"Casual games represent one of the fastest-growing segments
of approved online gaming in China - and in markets around the world,"
said Shailesh Naik, Managing Director of CryptoLogic Asia-Pacific.
"Experts have positioned online casual games as the major source
of revenue for the next three to five years. With 568 Inc's proven
experience in this market, and CryptoLogic's award-winning game
offering, we are in a strong position to capture our share of this
exciting market."
Cryptologic spokesmen said that Asia is quickly becoming the next
major growth region for Internet gaming. Industry forecasts suggest
the continent will ultimately become the largest online gaming market
in the world. China alone has more than 135 million Internet users,
ranking second only to the United States, and can also claim the
world's largest mobile phone market, with more than 400 million
subscribers. Many are expected to switch to high-speed 3G networks
over the next few years, creating an explosive growth opportunity
for game and content developers.
CryptoLogic's Asia strategy is consistent with the company's global
focus on integrity and innovation. For example:
- CryptoLogic only offers game experiences and payment methods
that are approved by local regulators. The company aims to develop
long-term partnerships with governments and regulatory authorities
that enable citizens to enjoy online digital entertainment in a
safe, structured and regulated environment.
- CryptoLogic's new Asian games will reflect local cultures and
languages, while leveraging the company's proven ability to produce
highly popular, award-winning titles. While Asia's adoption rate
for broadband and mobile technologies is among the highest in the
world, local gamers have unique preferences for content and presentation.
By working with local partners - via licensing arrangements or acquisitions
- CryptoLogic will better understand players and produce games they
want and are willing to pay to play, rather than merely exporting
titles designed for other regions.
- CryptoLogic's exceptional capabilities in developing games of
chance will benefit the company as it moves into single-and multi-layer
casual games, along with MMORPG. These segments of the e-gaming
market have massive revenue potential in all of Asia's largest economies,
including China, Japan, Korea, Singapore and India. Through partnerships,
acquisitions and strategic alliances, CryptoLogic will offer a complete
spectrum of profitable game types (chance, skill, casual and role-playing
games), across key technology platforms including PC, online, mobile
and console.
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