Flexibility and Creativity| Robert Antokol, Dean Takahashi

Okay, thank you. Good morning everyone. First, before we start speaking about myself and the company, for me this conference is something that I've been waiting for many years. I remember my first Casual Connect, it was like 10, 15 years ago. It was in, now Jessica told me it was Amsterdam. I remember Seattle, but after Amsterdam, you know, everything can happen. And for us, I never thought that we can bring such a big conference here to Tel Aviv. And for us, I think this is a game changer for our industry in Israel because we want to bring more talent and people from other industries in Israel to work in the gaming industry. I think if we can do it, we can be really a leader in the world. And for us, this is the first step. So I hope everybody will hear about it, people will hear about the gaming, will see that so many people coming from Facebook and Google and Apple, and it will become really traditional in Israel. So this is about the conference. About my background, I'm around games for more than 15 years. This is my third company. I always understood games, loved games. I don't understand any other kind of industries. This is very simple. And for me, this is something that I really was waiting for a long time to succeed. And I think Playtika came on the right time in the right way. We had an amazing opportunity. Ofer and Shahar were my partners establishing Playtika, and myself, and we grabbed the opportunity and we built an amazing company in this amazing country.

So the question is very simple. We have a history for our RMG games, real money gaming, and when all the trend of social games started, my partner and myself wanted to be in the industry. And the only product that we really understood how to develop was casino games because this is the history of this country. So we don't have any other channels in Israel, not now, maybe we have more, but five, six, seven years ago it was only casino games. So we started from the casino games, and this is why we've become such a... this is why we were first, and this is why we are such a big industry in the world. I think now it's changing. We see other amazing companies around us in different channels, not only in the casino channel. And I think in three, four years from now, we will be a big leader in other kinds of genres beyond social casino games.

Yes, yes. We see all kinds of genres with mythical games, match-3 games, and hidden object games. And we see amazing people because in the end of the day, we're making social casino, but we are like all other casual game companies. And the people are understanding this. And as I said in the beginning of the conversation, because people see that you can succeed in the gaming industry, they're moving to make games. So actually, when you're working in the internet or high-tech industry, actually it's much easier and much nicer to work in a gaming industry. So they see that they can make money, they see they can succeed, they see that there is opportunity, they see a conference like this, Casual Connect, coming to Tel Aviv. So they're saying to themselves, you know what, there is something interesting here. So let's make games. Let's stop working at other boring companies that your parents don't understand really what you are doing, and let's go to an industry that people understand games, it's fun, and so this is why we are so happy.

Ten years ago, even five years ago when we established Playtika, it took us eight months to raise funds for this company. Why? Because no one really believed in the games. No one. And the Israelis, it's like all other countries of the world, you see success, you go in there. You see somebody's doing well with the social networking business, you see another ten of them. So in Israel, really was looking to see who is the first one who will succeed. And after we did so well and other companies around us did amazing, so people looked and said to themselves, listen, it's working, it's working, it's amazing. The success is very fast. It can happen in two, three years. In our case, it happened less than a year. So why not try it? And again, don't forget that everyone in the world are gamers. Everyone is walking with a console in the pocket. Everyone is a gamer. Everyone thinks they understand games. This is another amazing thing. And for them, it's much easier to develop a game. They can do, you know, and actually this is very intuitively the thing they can do better than others all the time. But it's easy to understand what you're doing.

Speed is very important. Well, in this, actually we are in the industry five, six years ago and it looks like it's 20 years ago. So it's meaning speed is very important. And we see Zynga was the first poker in the industry and they're still the biggest one. They're losing market share but still they're big and strong. Why? Because they felt they were the first one in the world, very aggressive in the beginning. So when we started the business, we really believed that we must be the same aggressive Zynga and the first one. So we were the first one together with DoubleDown. We were very aggressive and we're still here. But it's not a magic formula to be the first one. It's not a magic formula. We see many other indices in the world that the first one lost. So we were the first one, we are the biggest one, but we have to spread all the time. We are worried all the time. We don't know from where the competition will come. We don't know from where the new stuff, the new material, the new company will come. And you know what? It will come. So this is, I think, our formula, that we are all the time looking and trying to learn from our competitors, even the smallest ones.

I'm not familiar with all the numbers that people are throwing in and all the results. And for me, sometimes I'm a little bit worried that people saying, okay, the social casino genre... For me, we are in the social games industry. So the social games industry is growing, we are growing together with them. As I said before, even we have 1,200 people, it's not the formula to keep being the number one. It's not only the formula, it can even hurt you. So I'm saying, till today, our advantage was that we built our games like this, that we can be the first one in every new platform in the world. And we did it. So I think if we keep looking and keep trying, keep doing new games, keep trying every new platform in the world, keep trying every new technology in the world, keep trying to be innovative, then we can stand number one. If we would think, yes, we're number one, we're the biggest one, nobody can beat us, we will not survive till next year. So we are doing a different approach. For us, every day is a new day, every month is a new month. We're not looking quarter after quarter, we're looking day after day. And I think this is the formula of our company. I cannot speak in other names of other companies.

This is a very good example. We thought that we're in a traditional market, we're making the same games that others, and everybody's happy and nothing will happen. But these guys came with a little bit different approach. They succeeded very fast. They're actually very strong on Facebook, on mobile they are still not so strong, but they came with a different approach. And this is what I like in these guys, this is what I like in this industry, and this is why I think new players will come to the market. I don't know if they can be number one after one year, after two years, but they come to the market, they can hurt other big companies, they can make us better. They can make us better. I know these guys made us better. We have now an app that's doing very well in this genre, competing with these guys. Well, we're excited because we want to beat them like always, and they fall for us. This kind of company makes Playtika better and makes others better and growing the industry.

So the final thing, I'm worried more about the small companies than the big companies. Because the big companies like us, we are big, it's hard to walk fast, it's hard to change things when you're big. When you're small, you're dangerous. When you are big, you're a target, you're walking slowly. So of course I'm worried from everyone and I want for these guys, but for me the smallest company that's coming around us that we don't see them, this is the company that can change the world. So we're doing two things. First, we are becoming, we're looking, we're learning. Second, we're acquiring other companies. So actually Playtika, if you look at the history of our company, we grew in two ways. First, our internal growth was amazing in the last five years, and we acquired three companies, we did very well with them. So I'm not saying that we can do everything by ourselves. I'm not saying that we can beat the world by ourselves. But if we look around us and we have good opportunities, I think, and we find good people that can join us and we can learn from them, this is the formula. So around the big guys, they're all five or six of us, we are playing and they're around us and fighting against each other, and it's very interesting and very nice. But the smallest companies, this is the dangerous, this is the really dangerous.

It's a big problem, but for them it's an advantage. Because if I'm a small company and I'm saying to myself, okay, I want to enter this industry, so what, I will raise $50 million now? It's a stupid way. I need to find ways to acquire players without big budget. So if I'm creative and finding the way, this is a big, big, big win for them. So I think because they have these problems of budget, every purpose of marketing, they will find ways to do it without the big budget. And it's possible. I don't know the way, yes, but it's possible. And we will see in a year from now that there will be new players, not only the same social casino, general game channels, that will come without big budget, smart people with smart web, with smart technology, and we will change things. So marketing is a big, big problem in our industry. Our budget is growing, that's why it's not as it was two, three years ago. The prices are very high because, as you said, 100 companies, 200 companies, 300 companies, everybody fighting again about the same audience. And the Google, Apple, Facebook, they're the big winners here. Good for them.

So this is a question that we ask to ourselves every day. And I think, maybe a year ago I would give you a different answer. But we built our companies, I can speak only about Playtika, we built our company in the way that we can build more games, we can go in different channels, we can do more aggressive. It's really dangerous to focus on one thing. It's really dangerous to focus on one game. Five years ago we had one game on one platform. Now we have six games on 14 different platforms. And we're growing. So to be with one game or two games, it's very dangerous because a competitor will come for sure, 100%, no, not a thousand percent. So we built our company in the way that we can grow, we can bring more games, we can bring more channels. We're going to show it next year in 2016, and we're going to have a big surprise for the market.

So this is the question that everybody's voting for, everyone asking me this question. So yes, we're part of Caesars and this is a fact. But there is no connection actually between their activities and our activities. I've been in Vegas three times in the last six years. Me personally, I never go to a casino, so it's not so interesting for me. But there is actually no... they are like holding our companies, they are like a holding company. Actually we don't have any real activities. We don't have... we see ourselves as a casual game company. This is how we see ourselves, not a gambling. Yes, we're making casino games, but next year we're going to make different games, and then two years from now we're going to make different games. So yes, we're owned by Caesars, but it's not connecting us to the real money operation.

Now this is very sad news, but it's a fact. And we all understand why it's happening. It's happened because in the end of the day, investors want to make money from the industry. And when they see the big companies struggling, when they see the IPO thing, kind of King and Glu and all the small other companies, they're really afraid to go to this direction. And the formula, I think, is going to change. Because first, the game company Zynga and King will perform very well. I believe that will perform very well, that will learn from their mistakes. They are very strong companies, very smart guys, they have amazing activities. And I think it will change. Today, yes, the numbers are not so well, so everybody's going to other industry. Next month, next year, Zynga will show amazing quarter, you will see how everyone fast running and going investing in game companies. This is how this world is, they're acting. I think it's not normal because the gaming industry is growing. You see the numbers, they're growing, and many companies doing so much money. So it's not really fair what's happening with the investors, but it's going to change.

Yes, it's hard to grow in Israel. It's hard to grow because, as I mentioned before, not everyone would want to work in the gaming industry. So this is why we're trying to change it. This is why we are trying to bring and to show that it's fun and nice to work in the gaming industry. And I think we will always go to other places too, to open offices, to bring smart people to go there, to go here. It's not going to change. Yes, I'm afraid that we will have a problem to find good people. You know, I really fear it. We are growing here dramatically, but not enough. We need to grow more. But it's not only our problem, everyone's problem. This is why we need everyone in this room, that our industry will grow. We need this for ourselves and for the industry and for the country, because we really believe this is amazingly dangerous to be there.

Well, I can tell you about ourselves that we are looking at this market. We are not strong there. It's a huge opportunity for us. It's a huge opportunity. We're doing some activities today in Asia, especially focusing in Japan, focusing other places. And I think the growth of Playtika in 2016, 2017 will come from this region. Because till now we are focusing in the U.S., focusing in Canada, in Europe. And there, I think, as you said, the growth will come from there, 100%.

I think it's going to change. For us, because we don't have so many new games, it's not obvious to get a free promotion. And usually the app stores are promoting new games and the new companies and helping new channels to grow. Yeah, I think it's changing. I think it's much better than it was a year or two years ago. And because everyone is growing, you know, the industry grows, the understanding that social casino is a simple game, is a Candy Crush or others, so will gamble, it will come better and better. I think I heard Google Play has changed its policy on that.

Everybody, give them a hand and thank you.