Published On: Wed, Mar 18th, 2020

What the Crazy Labs Deal with Sony Means for Israel

By Contributing Author

Sony Pictures has signed an agreement with Israeli mobile game developer Crazy Labs to develop mobile gaming versions of two of their recent and upcoming releases, Jumanji: The Next Level and a reboot of Charlie’s Angels.

This is not the first time Crazy Labs has collaborated with Sony Pictures: it had previously worked on a mobile game version of the TV series Hotel Transylvania after it was released in 2018. It is, however, the first time they are working on a movie, as CEO and co-founder Sagi Schliesser says.

What the Deal Means for Crazy Labs

So what does this mean for Crazy Labs, which is considered the biggest gaming startup in Israel? Quite a lot, actually, despite the huge standing that the company has in the industry. For starters this will mean continuous work and a huge challenge.

“We’re now in a business where there’s no such thing as delays – we have to come out when the film does. Sony’s two movies are coming out one right after the other, which is a real challenge for us,” Schliesser said. “Sony is talking about the character constantly. The Rock even called us recently from a tattoo parlor and sent a picture of his latest tattoos so that we can add them to his character in the game.”

In a telephonic interview to NoCamels, Schliesser also said that players would get to fight for survival and get to do adrenalin-pumping moves like free falling off a waterfall and climbing improbably steep cliffs when they play Jumanji: The Next Level. Both the new games come with innovative features that the industry hasn’t seen so far. Unlike the single-directional running in ‘runner’ games, Jumanji, for instance has incorporated four-directional running.

Crazy Labs is following the growth path of prominent gaming and i-gaming companies that were established in Israel. By providing a world class product and using online marking channels such as online and mobile advertising platforms, affiliate marketing and social media, they have been able to scale rapidly. You will find more on them later in this article. Affiliates have always played an important role in driving hundreds of thousands of players to operators.

What the Deal Means for Israel

The deal between Crazy Labs and Sony Pictures is big news for Israel as it puts the country’s mobile gaming industry firmly on the map. The gaming industry in the country is considered one that is young and growing. The deal will only help accelerate that growth and encourage others to pick up the gauntlet.

Companies coming out of Israel like 888 and Playtika used to focus exclusively on developing games for the online casino industry. Once the mobile industry emerged that all changed; research has showed a steep spurt in mobile gaming companies in the country. A report prepared by Startup Nation Central for TheMarker highlighted this fact: the numbers have risen to 270 in 2019, from 170 just 2 years ago. Social gaming companies forms a big chunk of the business, standing at an impressive 28% of the market. These are companies that develop casino games as well.  For example NoDepositKings.

The Impact is Not Just Revenue for the Israeli Government

A direct impact for the Israeli government of deals like this one is a rise in tax revenues. For instance, the acquisition of Israeli gaming company Plarium by Aristocrat Leisure Limited, an Australian company, for $500 million would not only make the people backing Plarium quite rich but also result in tax revenues to the tune of $130 million.

This was not an isolated instance; in 2018 Playtika was sold by Caesars Interactive Entertainment to Giant Network Group for $4.4 billion. Caesars had bought out Playtika in 2011 for $160 million and while that doesn’t make Playtika a solely Israeli entity anymore, the company is still based in Israel and continues to be under Israeli management.

Deals like the one between Crazy Labs and Sony underline one fact the world is waking up to: Israel is a big player in the global gaming industry, and is steadily cementing that position with the emergence of mobile gaming companies with the ability to deliver high-end gaming.

However, the impact is not just financial. Israel has learned important lessons from deals like the Playtika acquisition: that buyers are looking not only to acquire the company but also base operations within the country. This automatically means employment possibilities for those with the right skillsets.

The institutes of higher education in Israel are doing their bit as well to ensure they have in place the people with the right skillsets for these companies. In recent times universities have introduced as many as 12 academic curriculum in the fields of game design and content development.

Other Companies that Have Made their Mark in the Mobile Gaming Industry

There are quite a few other companies that have made a mark in the mobile gaming industry. One name that comes to mind immediately is Ilyon Games. The company is 4 years old and has a portfolio of 40+ games with a combined count of 100 million plus downloads. Its most popular game is Bubble Shooter.

Another popular company is Funtactix. This Israeli gaming startup is behind some impressive games, like the one based on Narcos, a popular and cutting edge series on Netflix. Funtactix was bought out last year by Playtech for an undisclosed sum of money.

A Brief Outline about Crazy Labs

Crazy Labs was established in 2010 as TabTales and initially started off by creating a studio to develop gaming apps and interactive books for kids. Its first big ticket game came about 4 years later when it launched Baby Heroes, which ended up garnering over 50 million downloads.

The company was by then launching 10 applications each week; this was critical because of the short attention span that young users had for content in that specific segment. By the time the company decided to exit that segment it had over 500 applications in its portfolio. The move out of that segment was driven by lack of revenues from the impressive number of applications.

The company shifted focus to an area that would have a big impact on its profitability and make it what it is today: casual gaming. It got down to developing hyper-casual games for older users. The move was completed about a month ago, and that is when the company officially changed its name from TabTales to Crazy Labs.

The revenue model at Crazy Labs is simple – the freemium model. This means you download the games free, but will need to pay to get new equipment and characters. The company is now 10th in the world when it came to apps companies according to Sensor Tower. This year it is expected to touch the magic number of 500 million in terms of downloads.

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