Cryptologic Cuts Costs, Regains ProfitabilityPosted on: August 13th, 2009 8:00 am | By: Jeremy Schrute
Cryptologic had a novel idea. Their revenues were down so they did something about it. The online game designer has seen a long-term fall in its revenue so they decided to restructure the company and cut costs. By slashing operating expenses by 25% each year and expanding their gaming licenses, Cryptologic has stopped the free fall and has put themselves in a position for a more profitable future. The company reported a 40% drop in total revenue, due in part to long-term Asian investments and William Hill heading to Playtech’s iPoker, prompting the cost-cutting measures.
Profits have been slowed by a slower than expected release of their new games, but by cutting operating costs and signing those new contracts, seemingly one a week for a while, Cryptologic has dug themselves out of a hole and leveled out their revenue. The new licensing resulted in a 21% growth in revenue over the last quarter over its casino licensing business.
Cryptologic can stand as an example for other companies. They did what companies used to do before they started asking the government to save them. They looked at their situation and determined what needed to be done to become profitable. If only GM had been capable of that.