Highlights

Embracer Published FQ3 Interim Report (October-December 2020) (link)

• The Company’s stock did not react materially following earnings, though has traded up nearly 30% YTD, and 18% in FQ3 2020
• Reported a 44% YoY increase in Net Sales to $262M, versus consensus of $251M
  • Net Sales includes the following reported games segments: Deep Silver (37%), THQ Nordic (28%), Saber Interactive (23%), Coffee Stain (7%), and DECA Games (5%)

• EBITDA increased by 70% YoY to $106M, versus consensus of $96M
• The Company reported Adj. EPS of $0.13, versus consensus of $0.14
• Year-over-year, total game development projects increased 56% to 150, and total headcount increased 93% to 5,730 (including 4,325 total game developers)
• Following the reported quarter, Embracer announced acquisitions of Gearbox Entertainment, Easybrain Limited, and Aspyr Media for a total day-one purchase price of $1.1B

Stillfront Reports 2020 Year-End Results (link)

• Stillfront reported strong growth, though the Company traded down ~5% after earnings-release, falling short of revenue consensus figures
  • Reported net revenue of $130M for FQ4 2020, representing an increase of 96% YoY and versus consensus of $144M
  • Reported Adj. EBITDA of $55M for FQ4 2020, representing a 42% margin and a 121% increase YoY

• Highlights
  • Reported 22M MAUs and 4M DAUs as of December 31st
  • Currently consists of 19 studios, including Candywriter, Moonfrog, Nanobit, Sandbox, Storm8, SuperFreeGames, and more
  • Portfolio consists of 42 games, with 20+ upcoming titles in pipeline for soft-launch in 2021, including Pet Clinic, Game of Nations, and Albion Online Mobile
  • Currently, Stillfront’s portfolio consists of 77% mobile

Netmarble Reports FQ4 2020 Results (link)

• Netmarble reported modest growth, and the Company traded down ~2% since earnings-release after falling short of Q4 2020 and FY consensus figures
  • Reported net revenue of $560M for Q4 2020, representing an increase of 12.4% YoY and versus consensus of $612M
  • Reported net revenue of $2.24B for FY 2020, representing an increase of 14% YoY and versus consensus of $2.28B
  • Operating profit of $250M, representing a margin of 11%, 34% YoY growth, and versus consensus of $247M
  • International revenue (outside of Korea) accounted for 72% of total revenue
  • Genre portfolio showed diversification across RPG (33%), MMORPG (31%), Casual (24%), and others (12%)

• Pipeline
  • Netmarble will launch numerous new titles in 2021, including Blade & Soul Revolution and NBA Ball Stars in Q1, Ni no Kuni in Q2, and Seven Knights Revolution and Marvel Future Revolution in 2H 2021

U.S. gamers spent $4.5B on PC hardware and accessories in 2020, according to The NPD Group (link)

• Hardware and accessories for the PC gaming space reached $4.5B in the United States last year, which is up 62% compared to 2019 and more than twice the sales in the same period in 2017
• NPD also noted that PC gaming content increased 19% to $7.5B

Zynga set to enter console market with Star Wars: Hunters (link)

• Zynga announced its first console title developed by Zynga subsidiary NaturalMotion Games in collaboration with LucasFilm Games
• Star Wars: Hunters is a free-to-play online shooter that is set to release on Nintendo Switch and mobile devices later this year

Twitch and Facebook Gaming break viewership records (link)

• Twitch experienced its best viewership month to date in January 2021 with more than 2B hours of viewership, and Facebook Gaming had 439M hours of viewership
• Combined, the two platforms experienced a 117% YoY increase in viewership

M&A and Capital Raising

Artie raises $10M as it pivots to make instant games (link)

• Artie has raised $10M to make instant Mobile games that can be played directly inside social media, video, and messaging platforms in a way that bypasses the app stores 30% tax
• Artie’s technology enables Mobile games to be played directly inside media platforms without any additional app downloads, applications programming interface (API) access, or integration needed, said CEO Ryan Horrigan in an interview with GamesBeat
• The Company is focused on making Mobile games easier to discover and play for consumers while improving the economics of mobile games for developers and creators

Colossi Games secures $2.5M in seed funding (link)

• Cyprus-based mobile games developer Colossi Games has raised $2.5M in a seed round led by EQT Ventures with additional participation from Play Ventures
• Colossi Games will use the funding to create a new Mobile social survival title set in the Roman Empire
• The game will feature multiplayer gameplay with users able to band together, and face off against opponents in the Colosseum

Lucid Sight acquires Colyseus open-source multiplayer game engine (link)

• Lucid Sight, a maker of blockchain games, has acquired the open-source multiplayer engine Colyseus for an undisclosed price
• Colyseus projects have seen millions of monthly active users and have processed billions of monthly requests
• The Los Angeles-based Lucid Sight makes blockchain games such as MLB Champions and CSC featuring Star Trek, and now it will be taking over the Colyseus brand, GitHub, and all social and support channels

Others

Amazon’s New World delayed to August 31 (link)

• Amazon announced that its online role-playing game New World is going to miss its spring release window, instead setting an August 31 release date

• Last year, Amazon Game Studios released Crucible, its first major title, but the multiplayer shooter only lasted a few months before dissolving

• The extra time will let Amazon add “substantial improvements while polishing and fine tuning the whole game.” It starts a closed beta July 20, which is available to anyone who preorders

Plants vs. Zombies: Battle for Neighborville hits Switch on March 19 (link)

• Developer PopCap Vancouver is launching the competitive shooter on the hybrid home/handheld console as a “Complete Edition” on March 19
• EA and PopCap worked with the port specialists at QLOC. This is the first Frostbite Engine game to come to Switch
• This is one of seven games that EA promised to release for Switch over the 12-month period starting in June. Others include Apex Legends launching March 9, Velan Studios’ new game, and EA Partners’ game Lost In Random

Velan Studios will launch Knockout City dodgeball game on May 21 (link)

• Velan Studios and Electronic Arts will launch the team dodgeball game Knockout City on PC and consoles on May 21
• Prior to that date, the companies will launch a closed beta on Origin and Steam on February 20-21
• Under the EA Originals label, this free-to-play game will debut on the Nintendo Switch, PlayStation 4, Xbox One, the PC via Origin and Steam
• The 3-on-3 or 4-on-4 multiplayer game will be available on the PlayStation 5 and Xbox Series X/S through backward compatibility with graphical and performance enhancements

Destiny developer Bungie is expanding as it preps for new games and more (link)

• The Company revealed that it has added new members to its board of directors, including media executives Trace Harris and ViacomCBS consumer products president Pamela Kaufman
• The addition of Harris and Kaufman is notable because Bungie is planning to push into other entertainment mediums. Harris spent 13 years at global multimedia conglomerate Vivendi. Kaufman, meanwhile, works on licensing and merchandising for Nickelodeon, MTV, and CBS properties
• The Company is also growing its offices and bringing in new production talent. This expansion is in preparation for the continued operation of Destiny as well as the release of a new Bungie product by 2025

Rovio confirms April launch for upcoming fantasy RPG Darkfire Heroes (link)

• Rovio confirmed that its upcoming title Darkfire Heroes will launch globally across Google Play and the App Store in April 2021
• Darkfire Heroes is a mid-core RPG strategy game with a single-layer campaign, as well as PVP arenas for players to team up and battle with friends
• Rovio acquired Danish mobile games developer Darkfire Games in 2020, and Darkfire Heroes will be the studio’s debut release

The N3twork Scale Platform partners with Emerald City Games (link)

• The N3twork Scale Platform is set to publish its 10th game after it formed a partnership with Emerald City Games
• The Canada-based studio, and its title Lionheart: Dark Moon, joins the likes of 99 Games, MeeWow Games and Two Hand Games, who have also joined the N3twork Scale Platform
• Lionheart: Dark Moon had D1 retention of 44% and strong monetization in its initial NSP test period

Gaming Public Multiples