PLAYSTUDIOS to go public via SPAC, valued at $1.1B

Jim Murren, Acies Chairman, former Chairman and CEO of MGM Resorts International and Andrew Pascal, PLAYSTUDIOS CEO, joined Yahoo Finance Live to discuss PLAYSTUDIOS' SPAC and their outlook for the social gaming sector.

Video Transcript

ADAM SHAPIRO: 2020 saw something like $82 billion in SPAC mergers, SPAC deals. And in 2020, we spoke with Jim Murren. He is the Acies chairman, former chairman and CEO of MGM Resorts International. He had formed a SPAC. And now he is going into a deal, a merger, with Andrew Pascal, the CEO of PLAYSTUDIOS.

So we bring them both into the stream because as Jim promised, there would be something to say six months ago when we spoke to him. And here we are. And to put it very simple, PLAYSTUDIOS, it's kind of like Las Vegas gambling online, but you don't gamble yet for money. You're gambling for points that you can use to shop. Jim, why did you choose this? And we'll follow up with you, Andrew.

JIM MURREN: Well, Adam, what we were looking for is a company in a vast industry that's rapidly growing, a company that has a dominant position in that marketplace that's differentiated, a company that had a great management team because SPACs need to bet on management, and a company that had something we can bring to the table from Acies, which is our M&A experience.

And that you get in spades with PLAYSTUDIOS. Rapidly growing company with great seasoned management, with an opportunity through an M&A strategy to propel the growth vastly above its peer set. And I think we got it at an attractive valuation with a great partner.

SEANA SMITH: So Andrew, I'm going to put the same question to you. Why does this make sense for PLAYSTUDIOS? And what are some of those growth initiatives that you think this deal will help facilitate?

ANDREW PASCAL: Yeah, look, we've spent the last nine years proving out this really unique proposition of integrating loyalty mechanics and real world rewards into free-to-play games. And we focus primarily on our core genre, which is the free-to-play casino space. And we're ready to now apply that to all these new genres.

And so, by becoming public via SPAC and partnering up with Jim, we're now going to have the currencies we need, both the capital and the liquid equity, so that we can get out into the market and acquire companies with really compelling games and existing networks of players that we can then integrate into our platform and really accelerate our growth.

ADAM SHAPIRO: Andrew, I was reading in "The Wall Street Journal" when the deal closes, it's going to have a valuation of $1.1 billion. But it was your literature that caught my eye, that the global market for social casino games grew 24% from the previous year to nearly $7 billion. And that was faster than the overall mobile gaming growth rate of 18%. So with that in mind, is there a day coming when I might be able to play one of the games for actual cash as opposed to points, Andrew?

ANDREW PASCAL: Not from us. Certainly, there are companies that are focused on the real money gambling opportunities. But we're excited about all these new genres of gaming outside of free-to-play casino that, combined, are well over $50 billion. So, you know, we're excited with the far bigger market and diversifying into these new genres. We think our model is absolutely going to have the same impact as we branch into these new categories.

SEANA SMITH: Jim, I'm curious when you're talking about this is a huge deal, but when we look forward to future deals, I guess, how has the last 10 months changed maybe your strategy or what you were initially thinking? And what do you think could be future opportunities, then, going forward?

JIM MURREN: So when we formed Acies, we had three verticals we were looking at to potentially partner with a company. And one was the social casual gaming space. Of course, here we are today. And the other was the sports betting space, the iGaming space, both B2B and B2C. And the third was live entertainment.

What's so compelling about this is that PLAYSTUDIOS is literally the intersection between digital entertainment, social casual gaming for free, and mobile gaming, and live entertainment. You can earn all this great value within PLAYSTUDIOS games and redeem that value for real stuff, like a trip to Bellagio or a cruise on Royal Caribbean. And so, this is the future of entertainment, in my view, is convergence of live and digital entertainment.

And so, I'm going to continue to focus on this as a market to look at. I'm hopeful that Andrew will allow me to help him grow his company over the many years to come. I'll become a nice-sized shareholder of PLAYSTUDIOS, which I'm thrilled about. And looking forward to seeing this grow in the future.

ADAM SHAPIRO: I want to let everybody know that when you are listed, it's going to be on the NASDAQ under the ticker, MYPS-- I would assume My PLAYSTUDIOS. Andrew, I'm going to give you the final question, but we look forward to having both of you come back. When Jim talks about and you talk about growing in future, perhaps, acquisition, would it be more targeted to perhaps some kind of live entertainment that you could then put into the social gaming atmosphere that you've created?

ANDREW PASCAL: Look, that's an interesting opportunity, but our focus will be on finding complimentary mobile games. There are a lot of really great game companies with existing games that, while they've gone through their lifecycle, could really benefit from our loyalty program and platform to reinvigorate their audience and drive yet even more engagement and growth. That's what we think is just so compelling about our approach as we get out there and look for these new companies and existing games that we'll be looking to integrate into our overall framework.

ADAM SHAPIRO: Andrew Pascal is PLAYSTUDIOS CEO. Jim Murren is the Acies chairman and former chairman and CEO of MGM Resorts International. And we should point out, you did great service to the people of the state of Nevada when you led them at the beginning through the COVID crisis and the response to that. Gentlemen, thank you both for joining us.