Article published on November 25, 2013

MGT's Acquisition of Developer Avcom

By: Harper Whitefield

Social gaming isn't just a buzzword; it is a sign of the future.

When you can combine the gaming experience with a social experience, you have something that could be very a special. When you can, on top of that, also add the element of mobile gambling, then you have the makings of a real winner.

That is what the people at Avcom are endeavoring to do - become a major player in this area. This New York-based company is already on the cutting edge of much of this, and they have taken a major step toward getting a lot bigger this week when they were acquired by MGT Capital Investments, an outfit that is, in its own words, "engaged in the business of acquiring, developing and monetizing assets in the online and mobile gaming space "

Avcom builds social casino games that can be played on mobile devices, under the brand name of Mobile Vegas. It also has a software platform that can be used for secure gaming, along with mobile development of applications, with advanced analytics. There is also a database of players that exists - 600,000 strong - from instant win offerings they have made.

Avcom has on its payroll artists who have worked on creating great slot game themes, a list that includes brands like American Idol, The Dark Knight and Sex and the City. There are indeed some exciting things that are in the pipeline, and presumably the relationship with MGT is going to facilitate those things happening quicker.

According to the CEO of MGT Capital Investments, a gentleman named Robert Ladd, this acquisition "places MGT in a strong position to capitalize on the popularity of the social casino industry as well as adding tremendous value to our other gaming properties."

Ladd has expressed a desire to bring some slot game experiences into the market that will be, in his words, "truly unique." In a market that does not seem to lack for creative competition, that is indeed a tall order, but there is the expectation, or at least the hope, that this infusion coming from MGTwill help the company move to a new level.

And they would be in rich market when all of that happens. A study that was conducted by the research department at Morgan Stanley indicates that the social casino market could be as big as $5 million within two years' time. There have indeed been some very high-profile acquisitions of companies that have exhibited some expertise and/or success in this field, including the purchase of DoubleDown Interactive for $500 million by International Game Technology.

MGT issued a minimum of 491,000 shares of restricted common stick, with the possibility of 330,000 more being transferred, in exchange for the ownership interest in Avcom, which will be doing business from this point forward under the name MGT Studios. Jeremy Avin, the founder of Avcom, has been appointed to the position of General Manager of MGT Studios. He says he is "thrilled to be joining forces with MGT."

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