International Game Technology Plc. announced that it has signed a definitive agreement to sell its successful social gaming subsidiary, Double Down Interactive LLC, to South Korean company DoubleU Games Co., a leading global social casino operator headquartered in Seoul.
IGT is not leaving the social space, though. The transaction establishes a new multi-year strategic partnership between IGT and DoubleU Games to provide player experiences in the social casino market worldwide.
The deal represents a big win for IGT, which was subject to criticism in 2012 when it bought the social gaming company, which had 70 employees at the time, for what many thought was a vastly overinflated price of $450 million. But Double Down Interactive and its DoubleDown Facebook casino proved to be a cash cow for the company, and was largely responsible for the meteoric rise of social casinos in the U.S., which have flourished in the absence, in all but three states, of legalized for-money online gaming.
DoubleU Games will pay $825 million for Double Down.
Analysts are lauding the timing of the sale, which comes after the pioneering company’s initial surge has faded, and competition in the now-crowded social space has led to flat results. The sale will remove what is becoming a drag on IGT’s balance sheet.