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GGP Gaming Weekly – February 22

Highlights

AppLovin reported FQ4 2021 earnings (link)
AppLovin is a portfolio company of Griffin Gaming Partners

  • Financial Highlights
    • FQ4 2021
      • Reported revenue of $793M, representing a 56% increase YoY and exceeding consensus of $780M
        • Business Software Platform: $247M representing a 208% increase YoY
        • Apps Revenue: $547M representing a 27% increase YoY
          • Consumer Apps Revenue: $362M representing a 42% increase YoY
          • Business Apps Revenue: $185M representing a 5% increase YoY
      • Reported Adjusted EBITDA of $221M representing a 60% increase YoY and exceeding consensus of $218M
      • Reported GAAP Net Income of $31M, improving from a GAAP Net Loss of $19M in FQ4 2020
    • FY 2021
      • Reported revenue of $2,793M representing a 92% increase YoY and exceeding consensus of $2,784M
        • Business Software Platform: $674M representing a 225% increase YoY
        • Apps Revenue: $2.1B representing a 70% increase YoY
          • Consumer Apps Revenue: $1.5B representing a 97% increase YoY
          • Business Apps Revenue: $661M representing a 31% increase YoY
      • Reported Adjusted EBITDA of $727M representing a 110% increase YoY and exceeding consensus of $724M
      • Reported GAAP Net Income of $35M, improving from a GAAP Net Loss of $126M in FY 2020
  • KPIs
    • Enterprise clients ($125k+ of LTM revenue):
      • Reported 407 total enterprise clients representing a 137% increase YoY
    • Revenue Per Enterprise Client (RPEC):
      • Reported $3.1M of LTM RPEC representing a 23% decrease YoY
    • Total Software Transaction Value: Business Software Platform Revenue + Software Platform fee collected from AppLovin Apps
      • Reported $340M of Total Software Transaction Value representing a 165% increase YoY
    • Monthly Active Payers (MAPs):
      • 2.7M representing a 29% increase YoY
    • Average Revenue per Monthly Active Payer (ARPMAP):
      • $44 representing a 7% increase YoY


Embracer reported FQ3 2022 earnings (link)

  • Financial Highlights
    • Reported FQ3 2022 Net Sales of $545M, representing a 135% increase YoY and exceeding consensus of $439M
    • Reported FQ3 2022 Gaming Net Sales of $399M, representing a 175% increase YoY and exceeding consensus of $350M by 14%
      • Reported Gaming Net Sales organic growth of 16% YoY, assuming constant currency
    • Reported FQ3 2022 Partner Publishing / Film Net Sales of $146M, representing a 67% increase YoY and exceeding consensus of $107M by 37%
    • Reported FQ3 2022 EBITDA of $160M, representing a 70% increase YoY and exceeding consensus of $155M by 3%
    • Reported FQ3 2022 Operational EBIT of $120M, representing an 86% increase YoY and exceeding consensus of $111M by 8%
    • Reported total game development projects of 216, representing a 44% increase YoY
    • Reported total headcount of 9,524, representing a 66% increase YoY
      • Organic growth of internal headcount was 16%
  • Portfolio Performance and KPIs
    • The Company’s organic growth in the Gaming business was driven by strong performance from Koch Media Publishing and Coffee Stain
      • Milestone, a business within Koch Media Publishing, has steadily outperformed Embracer’s business plan since 2019
    • Milestone’s recent release Hot Wheels Unleashed is its most successful game yet
    • The Company’s Mobile Gaming business reported 292M MAUs and 34M DAUs
      • CrazyLabs reported key milestones including over 5B lifetime game downloads and more than 200M MAUs
      • Easybrain reported 73M MAUs and 14M DAUs
    • The Company plans to release 25 AAA projects March 2026
    • Upon closing its recent transactions, Embracer expects that no single title or IP will account for more than 5% of group revenues


Roblox reported FQ4 2021 earnings (link)

  • Financial Highlights
    • Reported FQ4 2021 Bookings of $770M, representing a 20% increase YoY
    • Reported FQ4 2021 Revenue of $569M, representing an 83% increase YoY
    • Reported FQ4 2021 Adj. EBITDA of $168M, representing a 26% decrease YoY and a 22% margin on bookings
    • Reported FQ4 2021 Net Cash Provided by Operating Activities of $122M, representing a 32% decrease YoY
  • Portfolio Performance and KPIs
    • FQ4 2021
      • FQ4 2021 DAUs of 50M, representing a 33% increase YoY
      • FQ4 2021 hours engaged of 11B, representing a 28% increase YoY
      • FQ4 2021 average Bookings per DAU (ABPDAU) of $15.57, representing a 10% decrease YoY
      • FQ4 2021 average monthly returning payers of 9.4M, representing a 31% increase YoY
      • FQ4 2021 average monthly new payers of 2.5M, representing a 6% increase YoY
      • FQ4 2021 average Bookings per monthly unique payer (ABPMUP) of $21.63, representing a 4% decrease YoY
    • FY 2021
      • FY 2021 DAUs of 46M, representing a 40% increase YoY
      • FY 2021 hours engaged of 41B, representing a 35% increase YoY
      • FY 2021 ABPDAU of $59.85, representing a 6% increase YoY
    • January 2022 Key Metric Estimates (January 2022 Only)
      • Bookings between $220M – $223M, representing a 2% – 3% increase YoY
      • Revenue between $203M – $206M, representing a 64% – 66% increase YoY
      • DAUs of 55M, representing a 32% increase YoY
      • Hours engaged of 4B, representing a 26% increase YoY
      • ABPDAU between $4.02 – $4.08, representing a 22% – 23% decrease YoY


Stillfront reported FQ4 2021 earnings (link)

  • Financial Highlights
    • Reported Q4 2021 Net Revenue of $156M, up 34% YoY and falling short of consensus of $201M by 23%
      • 39% of the Company’s Net Revenue growth is attributed to acquired users, while -5% is attributed to organic users
    • Reported Q4 2021 EBITDA of $57M, up 27% YoY and falling short of consensus of $77M by 25%
    • Reported Q4 2021 Operating Profit of $27M, up 2% YoY and falling short of consensus of $43M by 37%
    • Reported Q4 2021 Net Income of $18M, up 4% YoY and falling short of consensus of $25M by 28%
    • Reported a Q4 2021 Cash position of $122M and $269M in undrawn credit facilities
    • The Company’s board proposed no dividend for Full-Year 2021
  • Portfolio Performance and KPIs
    • Reported Q4 2021 ARPDAU of $0.13, up 9% QoQ driven by increased monetization in the Casual and Mash-up product area
    • Reported Q4 2021 MAUs of 64M, up 195% YoY driven primarily by new studio acquisitions
      • Reported Q4 2021 DAUs of 13M
    • MPUs increased by 64% YoY, driven primarily by new studio acquisitions
      • The Company’s discrepancy between MAU and MPU growth is driven by the acquisitions of Super Free Games and Moonfrog Labs, as these studios monetize their users primarily through advertising
    • The Company reported the following breakdown of Bookings by product area:
      • Casual and Mash-up: 47%
      • Simulation, Action, and RPG: 29%
      • Strategy: 24%
    • The Company launched BitLife DE as its first localized version of BitLife in collaboration with Candywriter and Goodgame
    • The Company continued expanding its platform with the launch of Storm8’s games on the Microsoft Store
    • The Company reported strong growth from Jawaker as it launches new games within the app, taking advantage of the Company’s single-app strategy


Ubisoft reported FQ3 2022 earnings (link)

  • Financial Highlights
    • Reported FQ3 2022 net bookings of €746M, representing a 25% decrease YoY and below consensus estimates of €798M
      • Digital net bookings of €530M, representing a 10% decrease YoY and 71% of total net bookings
      • Back-catalog net bookings of €341M, representing a 10% increase YoY
      • Player Recurring Investments (sales of digital items, DLC, season passes, subscriptions and advertising) of €187M, representing a 14% decrease YoY and 25% of total net bookings
    • Mobile net bookings of €52M, representing a 4% increase YoY
  • Portfolio Performance and KPIs
    • Ubisoft Bringing Ubisoft+ to Xbox and Tom Clancy’s Rainbow Six Extraction to Xbox Game Pass and PC Game Pass Members (link)
    • Assassin’s Creed Valhalla life-to-date net bookings and Player Recurring Investments were up respectively over 70% and over 80% vs. Assassin’s Creed Odyssey
    • Overall engagement in Assassin’s Creed Valhalla now up more than 30% compared to Assassin’s Creed Odyssey life-to-date
    • Tom Clancy’s Rainbow Six Siege reached 80M unique active players life-to-date, adding 10M players over the last twelve months
    • Far Cry 6 ranked in the Top 5 of 2021 calendar year new releases and saw playtime per player and Player Recurring Investments per player increase 45% and 30% respectively compared to Far Cry 5
    • Riders Republic playtime per player up 60% and Player Recurring Investments 4x that of Steep
    • Tom Clancy’s Rainbow Six Extraction reached 5M unique active players


2022 Gaming deal volume to exceed $150B (link)

  • In 2021, the total number of closed and announced deals in games reached $80B in value, according to InvestGame
  • 2022 YTD has already exceeded all of 2021, with more than $85B in announced deals in the first month
  • Some sources estimate the industry will exceed $150B in transaction value this year

M&A and Capital Raises

DeHorizon raises funding for metaverse game ecosystem (link)
DeHorizon is a portfolio company of Griffin Gaming Partners

  • DeHorizon is a blockchain game company that is making a metaverse game ecosystem
  • The Company is led by gaming veterans from Riot, Dungeons & Dragons, and Blizzard, as well as Web3 experts
  • The Company will use the proceeds to incubate a portfolio of games and increase the size of the team
  • DeHorizon’s upcoming game experiences include a team battle game titled DeVerse, an “extreme outer space” battle royale titled DeTournament, and a medieval fantasy game titled Effigy
  • The Company has created a decentralized autonomous organization (DAO) for governance and envisions the future DeHorizon metaverse as a virtual carnival open to all metaverse inhabitants across blockchains
  • The funding round was led by Griffin Gaming Partners and Circle Ventures


Tripledot Studios raises $116M for mobile games (link)

  • Tripledot is a London-based casual game maker with over 25M MAUs and hit titles including Woodoku and Solitaire
  • The Company tripled its revenue in 2021 and focuses on data-driven decision-making to create titles targeted at players over 30
  • The Company will use the proceeds to aggregate smaller studios as an active acquirer
  • The funding round values the Company at $1.4B, and was led by 20VC with additional participation from Access Industries, Lightspeed Venture Partners, and Eldridge


Nacon acquires Daedalic Entertainment for up to $60M (link)

  • Daedalic Entertainment was founded in 2007 and has published titles including Witch It!, Unrailed!, and Hidden Deep
  • The two companies are working together on the upcoming game Lord of the Rings: Gollum, expected to launch later this year on PlayStation, Xbox, and the Switch
  • The transaction includes $36M in up-front cash, with additional consideration of up to $24M based on certain performance metrics


Krafton acquires 5minlab for $20M (link)

  • 5minlab was founded in 2013 and has developed mobile titles including Smash Legends, Como in Adventure, and Brickscape
  • Krafton acquired 100% of 5minlab through an earn-out payment of $20M
  • The acquisition will expand Krafton’s mobile business operations


Play-to-earn blockchain game MixMob raises $7M (link)

  • The Company is applying a phased approach with a social game first before launching its planned MMO
  • The Company is leveraging the Solana blockchain to enable NFTs in the game, creating a play-to-earn experience
  • The funding round was led by Defiance Capital, with additional participation from Ascensive Assets, Not3lau Capital, and IOSG


Return Entertainment raises $6M to develop cloud-native games (link)

  • The Company will use the proceeds to continue developing two cloud-native games, one that is aimed towards a hardcore gaming audience while the other is more casual
  • The games will be fully cross-playable between browsers on mobile, tablet, and PC
  • The funding round was led by Bitkraft Ventures, with additional participation from Sisu Game Ventures, Vgames, 1Up Fund, and SMOK Ventures


Netmarble US to join Kabam (link)

  • Kabam, creator of Marvel Content of Champions, was acquired by Netmarble back in 2017
  • The President of Netmarble US, Simon Sim, will go on to join Kabam as its new COO, overseeing not only the Company’s operations but also its Montreal and Acadia studios
  • The merger will enhance Kabam’s capabilities and enable the Company to have the scale to better compete and excel in in-game publishing


Animoca Brands acquires indie game studio Grease Monkey Games (link)

  • Australia-based Grease Monkey Games makes mobile and PC racing games, including Torque Burnout and Torque Drift
  • The Company’s titles have more than 45M downloads around the world
  • Grease Monkey Games’ pipeline includes an unannounced major cross-platform racing game built on Unreal Engine 5
  • Animoca’s REVV Motorsport is an ecosystem of play-to-earn racing titles enabled by the REVV token on Polygon
  • The acquisition of Grease Monkey Games will add vehicle licensing to Animoca’s already successful Formula 1 and MotoGP licenses, enabling the companies to build unique digital experiences for the REVV ecosystem


Focus Home Interactive acquires Leikir Studio (link)

  • Paris-based Leikir Studio has approximately 20 employees and is currently working on Metal Slug Tactics, which will be published by Leikir and Focus subsidiary Dotemu in 2022
  • In September 2021, Leikir Studio released Rogue Lords, a rogue-like strategy RPG available on PC and Console devices
  • The acquisition is executing on Focus Home Interactive’s multi-production strategy
  • Leiker is the fifth studio that Focus has acquired, joining Dotemu, Douze-Dixiémes, and Streum On, all of which were acquired in 2021, as well as Deck 13, which was acquired in 2020

Other

Netflix partners with Take-Two to make BioShock feature film (link)

  • Netflix will work with Take-Two’s 2K label to produce a live-action film adaptation of the renowned video game franchise BioShock
  • BioShock is a retrofuturistic first-person shooter with RPG customization and the franchise has sold more than 39M copies worldwide
  • Take-Two announced that 2K’s Cloud Chamber studio is “deep in active development” on the next iteration of the BioShock series


India has banned 54 Chinese-linked apps, many of which were previously banned in 2020 (link)

  • 54 China-linked apps have been banned under Section 69A of the IT Act in India, according to TechCrunch (link)
  • Many of the apps named are considered clones of apps connected to Beijing, which have been prohibited in India since 2020 but have been since rebranded to circumvent regulations
  • Apps banned include Garena’s Free Fire, NetEase’s Onmyoji Arena and Astracraft, and Tencent’s Xriver


Epic Games’ The Matrix Awakens hits 6M downloads and Epic accounts cross 500M (link)

  • Since its release two months ago, Epic Games’ The Matrix Awakens demo has been exceeded 6M downloads across PlayStation 5 and Xbox Series X/S
  • The Company reported that, as of December 2021, total downloads of the Unreal Engine increased by nearly 40% YoY
  • Epic said that its Unreal Marketplace customers grew by more than 50% in 2021 and that gamers have registered more than 500M Epic Games accounts


Lost Ark hits 1.3M concurrent players in launch week (link)

  • Lost Ark, Smilegate and Amazon’s latest RPG, entered Steam’s top-three titles based on peak player count on February 14th, just three days following its release
  • Lost Ark initially launched in South Korea in 2019, before partnering with Amazon Games to expand into the western market
  • For Amazon, Lost Ark represents another hit alongside its premium MMO, New World, that was released in September and exceeded 913K in peak player count


Amazon Studios partners with dj2 Entertainment for more game-movie adaptations (link)

  • dj2 Entertainment specializes in adapting video game titles for television and film
  • dj2 Entertainment will create and produce content that will exclusively stream on Prime Video in more than 240 countries
  • The Company’s recent projects include the box-office hit Sonic The Hedgehog and Tomb Raiser: The Animated Series


Capcom announces Street Fighter 6 (link)

  • Street Fighter 6 will be the first new entry in the famous fighting game series since Street Fighter V was released in 2016
  • Capcom released a teaser trailer (link), and promises that more news will come in the summer of 2022
  • The Company also announced Capcom Fighting Collection, a new compilation of some of its classic fighting games, with a planned release on 6/24/22 for PlayStation, Xbox, PC, and the Switch

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