Seattle gaming company Big Fish Games has kept growing ever since it was acquired by Churchill Downs in December — just not as quickly as before.
The business counted $104.5 million in revenue for Q2, up nearly 14 percent from Q1 of this year. But revenue from Big Fish’s largest app category, casino games, declined by about $1 million to $48.3 million over that same time period.
Churchill Downs CEO Bill Carstanjen told investors during the company’s quarterly earnings call last week that some of the decline may be seasonal. The numbers are up year-over-year, but Carstanjen added there’s also a been some growth slowdown.
“I think also you just have to expect over time, you’ll see deceleration in growth,” Carstanjen said. “The social casino space isn’t going to grow forever at the rate it has been. So, from the very beginning, you have to be cognizant and expect that.”
According to Churchill Downs’ earnings report from last week, the business’ premium game category is also shrinking due to declines in the PC market. The only app category that grew from the previous quarter was Big Fish’s free-to-play apps, led by Gummy Drop. That segment climbed 35 percent to $36.4 million in revenue.
Churchill Downs is best known for operating the legendary Kentucky Derby horse race, but it also owns casinos and video poker business. It was a strange fit when the company acquired Big Fish for $885 million in December 2014, but the company has lauded the business ever since.
Even as Big Fish’s growth slows, the company went out of its way to point out Big Fish is still leading Churchill Downs to record high revenue numbers.
“We may find next quarter, [the social casino segment] bounces back again. I wouldn’t be surprised,” Carstanjen said. “But we don’t want to predict something like that and we don’t want to take it for granted. We want to make sure that we’re performing best in class.”
In the meantime, he said Big Fish is busy improving its casino game offerings and is working on extra features, especially around social engagement.