Recently, the CryptoLogic Network, whose online poker sites include InterPoker and, until January 29th, Playboy Poker, announced that the move of all of its rooms to Boss Media will occur by the end of March. Poker News Daily spoke with Justin Thouin, Vice President of Product Development for CryptoLogic, to discuss the future of the mammoth software development company, which is traded on the NASDAQ under the symbol “CRYP.”
Thouin told Poker News Daily why the decision was made for CryptoLogic to shed its online poker network. He explained, “If you look at the online gaming industry, it’s becoming more difficult to be a generalist. The companies that are succeeding now and will succeed in the future are those who can specialize. We saw an opportunity to differentiate ourselves in the online casino space.” Currently, the company offers more than 200 casino games, including 60 that can be played within a customer’s web browser. Among the latest rollouts is European Blackjack, which does not give the dealer a down card as in the traditional version of the game.
Celeb Poker and Paradise Poker are two rooms that make their homes on the Boss Network. Soon, the survivors from CryptoLogic will join them. Thouin describes the challenges of competing in the online poker industry in today’s economy: “In the online poker industry, it is hard to differentiate yourself. Players cared about liquidity. It was difficult to have the requisite liquidity given how much competition there was. We’ve cut $12 million in costs.” The company is aiming for $9 to $10 million in net profits during 2009 and plans to cut its server and office rental costs by 75%. Its worldwide headquarters are in Dublin, Ireland.
Since the company was founded 14 years ago, CryptoLogic has had to adapt to a market that was constantly in flux. It partnered with leading brands such as Marvel and Activision for its casino suite. Recently, it has allowed internet gambling companies to select which games to incorporate, rather than insist that new customers adopt the entire CryptoLogic catalog. On the industry’s future, Thouin predicts, “You’ll see more specialization. This is still a very attractive industry. Online gaming is still growing quickly. You’ll see it become a much more competitive space. Partnerships will form in ways there haven’t been before.” For example, this month, CryptoLogic forged a partnership with Gaming Technology Solutions, whose clients include 888 and bwin. Party Gaming has already incorporated 30 of CryptoLogic’s cutting edge games.
When most players sign onto an online poker room, they may assume that, from the site’s standpoint, very little staff and resources are required. Customer interactions are mostly automated. However, Thouin describes the requirements needed to operate a profitable online poker room: “You need poker room managers to set up tournaments. You need to interact with land-based events in order to have feeder systems. You have to have full fraud and collusion teams. The barriers to entry are fairly high. However, the rewards are also there.” Other publicly traded companies besides CryptoLogic include Party Gaming, 888, and Ladbrokes, all of which can be found on the London Stock Exchange. Playtech, William Hill, and Neovia (formerly Neteller) are traded in London as well.
CryptoLogic’s restructuring efforts are expected to cost the company $3.5 million in cash and up to $20 million in “non-cash charges,” according to a press statement released last week. Playboy Poker, which makes its home on the network, has announced that it will cease operations on January 29th. Customers will be encouraged to deposit on InterPoker and InterCasino. Betsafe is moving to the Ongame Network from CryptoLogic, although the timing for the departure is not yet known. Sun Poker and Poker Plex both packed up shop and headed to Playtech’s iPoker Network from CryptoLogic. Thouin told Poker News Daily that each licensee was given the option to join to the Boss Network.
Poker News Daily will keep you posted as the 2009 calendar year continues. We would like to thank Justin Thouin, Vice President of Product Development for CryptoLogic, for talking with us.