Pokemon Go – Positive impact on End User Spend

A nuScreenshot_20160711-195444mber of investors have asked about the potential increase in End User Spend from Pokémon Go – the “fastest deploying mobile game of all time“.

Mobile has seen numerous waves of successful revenue generating entertainment products, each bigger than the last – Crazy Frog (tens of millions of dollars), Candy Crush (hundreds of millions of dollars), Clash of Clans (billions of dollars).  The last two have been very successful in using Direct Carrier billing to collect payment. They form a significant part of Bango End User Spend every day and show continued signs of growth.

The team at Bango think that Pokémon Go will probably be a “tens of billions of dollars” game. Bango does not normally predict the success of content or apps – but in this case makes an exception, this is one amazing phenomenon! Here’s why:

(1) Powerful, experienced, successful backers of the game: Nintendo, world leader in mass market gaming, along with Google, the world’s leading technology company. The game developers are seasoned experts and the implementation of the game is superb.

(2) Addictive and social game play: Clash of Clans leveraged peer pressure, Pokémon collecting takes this to an entirely new level, applicable to all ages and cultures.

(3) Reasons to spend money: Whether its buying new outfits to show off as you wander around, purchasing extra balls to hold the Pokémon, or investing in Lures to bring the Pokémon out into catchable range, everything makes sense.

Screenshot_20160712-091846(4) Phenomenal ecosystem and future: Retailers will be clamoring, and presumably paying top dollar, to get Pokestops in their premises. There is a Pokestop at the Bango UK local hostelry The Portland Arms, and even though the game is not officially available in the UK, crowds are already assembling outside.  Even more so for Pokémon Go Gyms which will presumably get thousands of visitors.

(5) Perfect fit to technology: Augmented reality is a compelling application of mobile technology, Pokémon Go plays into this perfectly and will drive uptake of 3D headsets / glasses. 4G/5G deployment around the world will be driven by Pokémon. Wearable tech like the Pokémon Go Plus wristband fits beautifully.

So that’s the theory, what about the evidence of spend?

In countries where Pokémon Go is deployed and where Bango powers the Direct Carrier Billing, Pokémon Go Coins are selling very well. The 1200 coin option ($10/£7.99) is a prime revenue generator.

Although it’s very early days, Bango has seen noticeable increases in overall spend, with no sign – yet – of declines in sales of the other top sellers. It seems like sales of other apps, mostly from their hardcore fans, are doing well, and music sales seem unaffected. At this stage Bango can be confident that Pokémon Go has the potential to really drive the spending of mobile users, supporting the Bango thesis that new forms of content and entertainment will drive End User Spend growth well ahead of underlying smartphone growth in the years to come.

Pokémon Go looks like it will be the next global mega-phenomenon, like a Hotmail, eBay, Google or Facebook.

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Announcement: End User Spend and Trading Update

Bango (AIM: BGO), the mobile payments company, provides a trading update for the six months ended 30 June 2016, ahead of announcing its interim results on 20 September 2016.

  • Annualized End User Spend (EUS) exiting June 2016 increased by 283% year-on-year to £159m
  • Margin remains in-line with Bango and market expectations
  • Excluding recently acquired BilltoMobile business, annualized EUS exiting June 2016 grew 143% year-on-year to £101m
  • Successful transition of BilltoMobile Direct Carrier Billing operations to Bango management following the acquisition on 6 May 2016
  • New app store billing routes launched in India, Hungary, Norway, Finland, Belgium, Australia, Indonesia and Malaysia, including a migration to Bango from another provider

During 1h2016, the rapid growth in EUS has been driven primarily from established activations as a result of growth in app and content sales, augmented by the increasing use of Bango Boost technology by existing Bango partners.  To drive future growth in EUS, multiple new routes have been activated across the major app stores including European launches for Microsoft’s cross-device Windows Store and the first launch for Google Play Direct Carrier Billing (DCB) in India.

Continue reading

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Impact of Brexit on Bango plc

Several investors have asked for a quick view from Bango management on the impact of a weaker pound on the Bango business.

Bango is a global business. Approximately 90% of Bango costs are in Sterling – primarily salaries for UK based staff and some datacentre expenses. More than 95% of Bango end user spend is from outside the EU, and the prices for Bango services are contracted generally in the currency of the country where end user spend is generated.

A weaker pound benefits Bango:

  • US$ acquisition of BilltoMobile from Danal. Acquired for cash – payment was made in May.
  • Future revenues generated from BilltoMobile in USA are in USD. For example, a 10% uplift when expressed in Sterling if sterling falls 9%.
  • Non US revenues change according to the relative currency exchange rate changes. At 12:00 on 24th June, for example, the overall end user spend and corresponding margin generated rose 6% expressed in Sterling.

Trading and Employment:

  • Bango has a Spain based subsidiary which could be used if appropriate.
  • Bango employs a mix of staff from a wide range of EU and non EU countries. Bango does not expect to lose any staff in the coming years due to introduction of new visa requirements for skilled staffs and the Bango HR team is well versed in visa process for non EU nationals.

Regulatory

  • Bango expects there will be no immediate change as we see moves towards global harmonization of the tax and regulatory environments
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Announcement: Acquisition of US Carrier Billing Service BilltoMobile

  • App stores and operators gain Bango Boost technology to accelerate End User Spend growth in US
  •  Acquisition adds $80m (£55m) annual US-based End User Spend to the Bango Payment Platform

Bango announces that it has acquired BilltoMobile, the US-based carrier billing services of Danal Inc. for an initial consideration of $3.5m (£2.4m), comprising $3m (£2.15m) in cash, to be paid immediately, and $500,000 (£345,000) in Bango shares at an issue price of 60 pence. Deferred consideration, which is expected to be $35,000 (£25,000), may become payable in cash in Q1 2017 depending on the performance of one revenue stream. In addition, Bango will pay certain fees in connection with the acquisition which are expected to be $215,000 (£150,000) and relate to the migration of services from Danal. BilltoMobile services processed approximately $80m (£55m) of End User Spend (EUS) in 2015, making it the largest carrier billed payments processor in the US by volume.

Read full announcement here

 

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PERL report: Key features of the Bango business model

A recent report, ‘Well positioned for future growth’, from Progressive Equity Research, describes key features of the Bango business model. Building on the previous report, ‘The Mobile App Store Marketplace: Direct Carrier Billing’, this focuses on the key strengths of the Bango business model.

The findings of this report, which outlines the underlying business model, include:

  • How Bango is strongly positioned in the market, through a rich product set and global partnerships
  • The Key Performance Indicators that demonstrate operational momentum
  • How high scalability and high operating leverage of the Bango Payment Platform provide good headroom for the growth
  • Key points that put Bango in a solid financial position to achieve profitability

Continue reading

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Edison TV Executive Interview – Bango

Ray on Edison

Bango CEO, Ray Anderson spoke to Edison TV about how the Bango Payments Platform provides a single integration point for mobile operators to activate a variety of app stores, with the target of making app store content universally available. He discusses Bango’s FY15 results which saw End User Spend doubling, while the cost base remained stable. Ray explains that the focus for 2016 is driving End User Spend via a combination of new route activations and growth in volumes from recently activated routes.

Watch the video here.

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2015 Annual Report and Notice of AGM

Click here to download the Bango Annual Report 2015, click here for the Notice of Annual General Meeting, here for the associated form of proxy and here for the explanatory notes.

Click here to order a printed copy of the Bango 2015 Annual Report.

The Bango AGM will be held at 2pm on Wednesday 25 May 2016 at the offices of Bango, 5 Westbrook Centre, Cambridge, CB4 1YG.

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Bango boosts Japanese operations with new office and senior executive hire

Bango has expanded its global footprint by strengthening its Japanese presence. A newly opened office in Tokyo for Bango Japan will be headed up by a senior Japanese executive, part of Bango’s continued commitment to support its partners in major mobile markets.

Bango boosts Japanese operations with new office and senior executive hireAtsuhisa (Andy) Suzuki, joins Bango as Japan Country Manager and regional VP for Asia Pacific. Andy brings 25 years of experience developing technology companies in partnership with Japanese customers. With a deep understanding of the telecommunication industries, Andy will collaborate with Bango’s app store partners to deploy carrier billing effectively throughout Japan and the Asia Pacific region. He will also ensure that Japanese operators are able to activate multiple app stores through the Bango Payment Platform and benefit from Bango Boost technology to maximize their success. Continue reading

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Google boosts app store success by installing apps without the store

Bango is obsessed with app store billing optimization – leveraging mobile innovations to simplify the payment experience, boost spend and increase customer engagement. We are therefore delighted to learn that Google is streamlining their Android app discovery and installation process.

Recent reports state that Google is rolling out the ability to install apps from search results on their Android smartphone – without requiring the user to go into the Google Play store. This immediately removes friction from the process to provide a better user experience. The payment mechanism remains unchanged, offering the exact same payment options and flow as the app store without the need to step outside of the search results.  Continue reading

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Bloomberg interview with Bango’s Ray Anderson

Ray Anderson on Bloomberg

Bango CEO, Ray Anderson sat down with Guy Johnson on Bloomberg Television’s “The Pulse” at the end of December for an interview titled, “Bringing Back ‘Crazy Frog’ Personalization in Tech”. Watch the video here.

Ray discusses how 2015 saw Bango grow end user spend by 100%, build momentum in emerging markets and pioneer the industry by launching Google Play in Africa.

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