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GGP Gaming Weekly – Week 07


Take-Two Reports FQ3 2021 Earnings (link)

  • TTWO reported FQ3 2021 Net Bookings that exceeded expectations, primarily driven by growth in its core franchises
    • Reported FQ3 2021 net bookings of $814M representing a 8% decrease YoY, but significantly exceeding prior outlook ($675M – $725M) and consensus ($757M)
    • Reported FQ3 2021 digitally-delivered net bookings of $664M, representing a 4% decrease YoY
    • Reported FQ3 2021 diluted EPS of $1.57 vs. $1.43 in FQ3 2020, representing a 10% increase YoY
  • Franchise highlights
    • Grand Theft Auto V has sold more than 140M units to date, and more units were sold in CY 2020 than in any other year except for 2013 when it was first launched
    • Grand Theft Auto Online outperformed internal forecasts and grew 28% YoY and is expected to achieve a new net bookings record in FY 2021
    • Red Dead Redemption 2 has sold over 36M units worldwide to date
    • Red Dead Online had more new players in December than any other month since its beta launch in 2018, and the game had more overall players in 2020 than in 2019
    • NBA 2K 2021 has sold 8M units across all platforms with net bookings for the NBA 2K franchise growing 48% YoY
    • Playdots title Two Dots introduced its biggest feature update of the year, including competitive leaderboards, which helped the game increase ARPDAU 12% QoQ, and the game now has its highest payer conversion rates ever
  • Development Pipeline
    • Take-Two reiterated its target of 93 new game releases in the next 5 years
      • 63 of the 93 are core gaming experiences, 17 are mid-core/arcade style experiences, and 13 are casual experiences
      • About half of them will come from existing IP and half will come from new IP
      • 72 of the 93 are planned for PC/Console/Streaming including 7 that will also be available on Mobile, and 21 that are Mobile-only
      • 67 of the 93 will need to be purchased, and 26 will be free-to-play

Ubisoft Reports FQ3 2021 Earnings (link)

  • Reported FQ3 net bookings of $1,212M representing a 142% increase YoY, and exceeding prior revenue outlook of $1,003M – $1,119M
    • FQ3 YTD digital net bookings increased 39.9% YoY to $1,506M, comprising 71% of total net bookings
    • FQ3 YTD back-catalog net bookings increased 33.3% YoY to $1,233M, comprising 58% of total net bookings (overlap exists between digital and back-catalog)
  • FQ3 Highlights
    • Ubisoft ranked as the second-highest publisher for new-generation consoles, including PlayStation 5 and Xbox Series X/S, with Assassin’s Creed Valhalla, Watch Dogs: Legion, and Immortals Fenyx Rising all in the top 7 best sellers
    • Ubisoft ranked as the top third-party publisher (CY2020, according to NPD for NCSA and GSD/Gfk for EMEA) in 2020 on Switch, with Just Dance 2020, the 8th best seller
    • Assassin’s Creed Valhalla achieved record revenues for the franchise
    • Just Dance 2021 net bookings rose sharply compared to Just Dance 2020
  • Strong Momentum in Back-Catalog
    • Ubisoft saw record growth for Brawlhalla, Mario + Rabbids Kingdom Battle, Far Cry 5, The Crew 2, and Anno 1800
    • Just Dance back-catalog experienced a 200%+ surge
    • Steep rise in engagement for Assassin’s Creed Odyssey and Origins
    • 70M players registered since launch of Tom Clancy’s Rainbow Six Siege
  • Breakdown of FQ3 net bookings
    • North America (48%), Europe (39%), RoW (13%)
    • PS4/PS5 (37%), Xbox One/Series X/S (23%), PC (21%), Switch (13%), Mobile (5%), Other (1%)
  • Game Delays and Developments
    • Ubisoft plans on releasing multiple games in FQ4 across PC, Console, Android, and iOS, including Anno 1800: Docklands, Immortals Fenyx Rising: Myths of the Eastern Realm, Tom Clancy’s Rainbow Six Siege: Year 6, Watch Dogs: Legion – Update 1, and more
    • Ubisoft’s Price of Persia remake has been postponed indefinitely
    • Ubisoft announced a collaboration with Lucasfilm Games on a new Star Wars game

Zynga Reports FQ4 2020 Earnings (link)

  • Reported strong FQ4 results, with record levels of engagement, highest ever quarterly revenue and bookings, as well as record DAUs and MAUs
    • Reported FQ4 2020 bookings of $699M, representing a 61.4% increase YoY, and exceeding prior revenue outlook of $670M
    • Reported FQ4 2020 international revenue of $236M, representing a 50% increase YoY, and international bookings of $280M, representing a 57% increase YoY
    • Reported FQ4 2020 operating cash flow of $206M vs. consensus of $128M, representing a 119% increase YoY
    • Reported all-time best advertising revenue of $117M, representing a 47% increase YoY
  • FQ4 Performance
    • Highest revenue and bookings performance in Zynga’s history, with record online game – or user pay – bookings of $582M, representing a 64% increase YoY
    • FQ4 represented the all-time best revenue and bookings quarter for Words With Friends, Empires & Puzzles, and CSR2, as well as Zynga’s Social Slots and Casual Cards portfolios
    • Record average mDAUs of 36M and mMAUs of 134M, representing a 77% and 103% YoY increase respectively
    • Bookings mix included: Forever Franchises (70%), Social Slots & Casual Cards (15%), and Other (15%). FY 2020 figures are comprised of a similar mix
  • FY 2020 Performance
    • Highest revenue and bookings performance in Zynga’s history, with record online game – or user pay – bookings of $1.96B, representing a 52% increase YoY
    • Record advertising revenue of $307M, representing an increase of 12% YoY
    • Executed two transformational acquisitions – Peak and Rollic – adding scale to the platform and expanding Zynga’s international audience base
    • Peak contributed two at-scale “Forever Franchises”, Toon Blast and Toy Blast, and Rollic added three of the top 50 downloaded US iPhone games in 2020
  • Capital Position
    • Issued $875M of convertible notes in FQ4, providing net cash proceeds of $794M after the cost of the capped call transactions and other issuance fees
    • Ended FY 2020 with cash and investments of ~$1.57B, putting the Company in a strong financial position in which to pursue additional M&A
  • Additional Key Performance Indicators
    • Daily Engagement, calculated as DAUs/MAUs, was 27% in FQ4 2020, down from 30% in FQ4 2019
    • Average Bookings per mDAU (ABPU), was $0.205 in FQ4 2020, representing an 8% decrease YoY

Game accessory sales set new January record at $222M (link)

  • According to The NPD Group, spending on video game accessories reached a January record of $222M a 73% increase YoY
  • The gamepad, headset/headphone, and steering wheel categories all set new January dollar-sales records

January 2021 NPD: Nintendo games and holiday hits lead surging sales (link)

  • According to The NPD Group, video game hardware sales grew 144% YoY and video game content sales grew 36% YoY
  • January’s top selling games were Call of Duty: Black Ops: Cold War, Assassin’s Creed: Valhalla, and Marvel’s Spider-Man: Miles Morales
  • We’re Five Games is developing an updated version of Totally Reliable Delivery Service, alongside a new game in the series that will be released in 2021
  • Hungry Couch will continue the development of upcoming RPG Black Skylands
  • Moon Moose will continue development of Cartel Tycoon, a management simulation game scheduled for release in 2021

M&A and Capital Raising

Electronic Arts to Acquire Glu Mobile (link)

  • Transaction Overview
    • EA will acquire Glu for an equity value of $2.4B, and a total enterprise value of $2.1B including Glu’s net cash of $364M (representing 3.5x 2021 revenue and 20.3x 2021 EBITDA); EA traded +1% in after-hours trading as a result of the announcement, Glu traded +34%
    • Glu stockholders will receive $12.50 in cash for each share of Glu stock, representing a 36% premium to Glu’s closing share price on February 5, 2021 (34% premium to Glu’s closing share price on February 8, 2021)
    • The board of directors of EA and Glu have approved the transaction and the Glu board recommends that Glu stockholders approve the transaction and adopt the merger agreement
    • The transaction is anticipated to close in the quarter ending June 30, 2021, subject to approval by the Glu stockholders, the receipt of required regulatory approvals, and other customary closing conditions
  • Transaction Rationale
    • The acquisition will be immediately accretive to EA’s total net bookings, and is expected to grow underlying profitability beginning in its first year
    • Glu will add scale to EA’s mobile games business – a combination of the two businesses generated a combined $1.32B in bookings over the last twelve months
    • The combined organization will build on EA’s network of 430M players, including more than 100M monthly active players in mobile
    • The combined organization will span many genres of mobile games, including sports, RPG, lifestyle, casual, and mid-core games
    • Glu’s franchises like Design Home, Covet Fashion, and MLB Tap Sports Baseball will benefit from Electronic Arts’ global licensing and distribution capabilities to bring them to new markets and more players

Homa Games raises $15M to make hypercasual mobile games (link)

  • Paris-based mobile publisher and developer Homa Games has raised $15M in a seed round from Idinvest, E.ventures, and angel investors
  • Since its founding, Homa Games has focused on hypercasual launching hits including Tower Color, Sky Roller, and Nerf: Epic Pranks
  • Homa Games quadrupled its team in the past year, expanding its reach to offices in Toulouse, Lisbon, and Skopje

Candivore raises $12M for match-three title Match Masters (link)

  • Israel-based Candivore has raised $12M in funding for its match-three title Match Masters, led by VGames
  • The proceeds from the raise will be used for user acquisition for Match Masters, which has attracted over 1M MAUs with more than 5M matches played each day

My.Games invests $1.5M in Pizza Club Games mobile studio (link)

  • My.Games has invested $1.5M in San Francisco-based mobile game studio Pizza Club Games
  • As part of the deal, My.Games Venture Capital is providing both money and support for scaling the business, including marketing, game design, employee recruitment, and product analytics
  • Pizza Club Games developed Raid Boss, a free-to-play mobile character collector that offers players the opportunity to take charge of their own guild and battle bosses
  • Raid Boss is currently available on Android, with the company planning to release an iOS version and add new game mechanics

Asmodee acquires Board Game Arena, a platform for playing tabletop games online (link)

  • Board Game Arena has been around since 2010 and experienced 600% growth in 2020
  • The Company has official virtual tabletop versions of 250 games, supports 40 languages, and has more than 5M users signed up
  • Board Game Arena will operate independently and remain focused on virtual tabletop development, not PC adaptations of Asmodee games

TinyBuild acquires three new studios (link)

  • TinyBuild has acquired three new studios; We’re Five Games, Hungry Couch, and Moon Moose


Tilting Point will invest up to $60M in user acquisition for Loop Games’ Match 3D game (link)

  • Tilting Point will spend as much as $60M on user acquisition for Match 3D, a promising puzzle game from Turkish developer Loop Games
  • Tilting Point is a free-to-play game publisher and provider of user acquisition services, that works with smaller developers, taking their hit games and making them more successful by spending money on advertising for the games

Gaming Public Multiples

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