Playstudios, SciPlay Vulnerable in Recession, Says Bank of America

A recession is likely to adversely touch on video gamey sales. History proves as much and that precedent pertains to social casino companies and their stocks.

Potentially, that’s spoilt intelligence for the likes of Playstudios (NASDAQ:MYPS), Playtika (NASDAQ:PLTK) and SciPlay (NASDAQ:SCPL). In a recent report, Bank of America economists bear on come out ceding back expectations to the number 1 canton of 2023 from the fourth billet of this year, but they calculate a 4% to 6% wane inward video gritty sales during that economic malaise.

We anticipate some players in the industry to outperform others, as sure product categories, franchises, and monetization strategies may endure through and through the economical storm better,” wrote psychoanalyst Omar Dessouky.

The bank says the crawfish inward gamy sales, assuming a traditional recession sets in, will follow much more mild than during the world-wide financial crisis.

Problems May Be Lurking for Social Casino Stocks

While Bank of America is constructive on some picture spunky equities and neutral on others, it’s non enthusiastic on social cassino stocks.

The camber has “underperform ratings on Playstudios, Playtika and SciPlay, noting those companies face “substitution risk” as consumers seem for ways to trim outlay inward an economic contraction. That’s a sensitive thesis because while many of the games published by the aforementioned triple of companies are release to download and ab initio play, the companies rely on in-app purchases as significant parts of their revenue streams.

SciPlay’s well-known offerings are Jackpot Party, Quick Hit Slots, Gold Fish Casino Slots, Hot Shot Casino, 88 Fortunes, Bingo Showdown, and Monopoly Slots. The games are disengage to caper but feature film in-app purchases.

Formerly a building block of Caesars Entertainment, Playtika was unity of the first of all to extend free-to-play societal games on social networks and wandering devices and has more than 35 gazillion monthly users. Its well-known games include Bingo Blitz, Caesars Slots, Slotomania, and World Series of Poker (WSOP) Social.

Rough 2022 for Social Casino Stocks

This year, there’s been broad-based pressure sensation on gaming equities and social cassino stocks aren’t immune to that theme. Of the aforementioned trio, the best performer on a year-to-date groundwork is Playstudios and that gens is cut down nearly 10%.

Playstudios operates inward a fast-growing section analysts and investors are enthusiastic about. Additionally, its business organization model, including its loyalty program — playAwards — and partnership with MGM Resorts is viable.

The owner of the Tetris peregrine app latterly launched a $10 zillion embark monetary fund aimed at investing in companies publishing rewarded drama games,

Through “Future Fund,” Playstudios “will partner with next propagation Web3 companies edifice sophisticated capabilities at the crossing of gaming, loyalty marketing, and blockchain rewards. The fund’s initial strategic investments inwards Forte and The Kryptomon Company provide PLAYSTUDIOS with access code to expertise in Web3 technology, marketing, and community edifice that it tin can leverage as it deepens its capabilities inward the space,” according to a financial statement issued by the company.