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GGP Gaming Weekly – Week 20

Highlights

AppLovin Reports FQ1 2021 Earnings (link)

  • FQ1 2021 Results
    • Reported FQ1 2021 total revenue of $604M, representing a 132% increase YoY, and exceeding consensus of $557M
    • Reported FQ1 2021 adj. EBITDA $131M, representing a 110% increase YoY, and exceeding consensus of $125M
  • FY 2020 Outlook
    • FY 2020 total revenue of $2,650M – $2,700M, exceeding consensus of $2,509M
    • FY 2020 adj. EBITDA $680M – $700M, exceeding consensus of $665M
  • Acquisition Strategy
    • AppLovin completed its acquisition of Adjust, a global mobile app measurement and marketing company, during FQ1 2021
    • The Company also acquired Mobile games West Game and Cash Tornado Slots during the quarter
    • After its Mobile game acquisitions this quarter, the Company now has games in every major Mobile genre
    • On additional acquisition targets, AppLovin noted that almost all of its acquisitions were initially clients and that the Company will be content-focused in acquisitions going forward, in Gaming or other verticals
    • “As we continue to grow our content portfolio, gain access to data, and improve the efficacy of our marketing software, we see a path to outsized growth for years to come.” – AppLovin CEO and Co-Founder, Adam Foroughi

EA Reports FQ4 2021 Earnings (link)

  • FQ4 2021 Results
    • Reported FQ4 2021 net bookings of $1,490M, representing a 19% increase YoY, and exceeding prior outlook of $1,375M 
      • Reported FQ4 2021 Live Services & Other net bookings of $1,303M, representing a 32% increase YoY
      • Reported FQ4 2021 Full Game net bookings of $187M, representing a 30% decrease YoY
      • EA repurchased 2.4M shares for $325M during FQ4 2021
  • FY 2021 Results
    • Reported FY 2021 net bookings of $6,190M, representing a 15% increase YoY, and exceeding prior outlook of $6,075M
      • FY 2021 net bookings of $6,190M is more than $600M above original expectations
      • Reported FY 2021 Live Services & Other net bookings of $4,592M, representing a 28% increase YoY
      • Reported FY 2021 Full Game net bookings of $1,598M, representing a 10% decrease YoY
      • The Company repurchased a total of 5.6M shares for $729M during FY 2021
  • Business Highlights
    • Delivered 13 new games and had more than 42M new players join the EA network during FY 2021
    • FIFA 21 has more than 25M LTD PC/Console players
    • FIFA Ultimate Team players grew 16% YoY and matches were up 180% in FY 2021
    • Apex Legends has more than 100M LTD players on PC/Console
    • The Sims 4 has almost 36M LTD players and delivered its sixth consecutive year of franchise growth

Playtika Reports FQ1 2021 Earnings (link)

  • FQ1 2021 Results
    • Reported FQ1 2021 revenue of $639M, representing a 20% increase YoY, and exceeding consensus of $585M
    • Reported Adj. EBITDA of $258M (40% margin), representing a 39% increase YoY, and exceeding consensus of $210M
    • Reported net income of $36M (6% margin), which in-line with FQ1 2020, but below consensus of $42M
    • Playtika has available liquidity, defined as cash and cash equivalents and its undrawn revolving credit facility, of over $1.5B
  • Portfolio Highlights
    • Casual portfolio grew revenue 30% YoY
    • Casino-themed portfolio grew revenue 12% YoY
    • Geographic revenue mix: US (71%), Europe (14%), APAC (8%), RoW (7%)
    • Six of Playtika’s top nine games grew revenue over 20% YoY
    • Bingo Blitz, which is now 10 years old and Playtika’s second largest game by revenue, grew revenue 40% YoY (like that the title has legs this long into its lifespan)
  • Key Performance Indicators
    • DAUs of 10.4M, down 10% YoY
    • MAUs of 31.4M, down 15% YoY
    • Average DPUs of 296k, up 9% YoY
    • Average daily payer conversion of 2.8%, up from 2.3% in FQ1 2020
    • ARPDAU of $0.68, up 36% YoY

Roblox Reports FQ1 2021 Earnings (link)

  • FQ1 2021 Results
    • Reported FQ1 2021 bookings of $652M, representing a 161% increase YoY, and exceeding consensus of $573M
    • Reported FQ1 2021 revenue of $387M, representing a 140% increase YoY
    • Reported FQ1 2021 operating cash flow of $165M, growing nearly 4x YoY
  • Key Performance Indicators
    • DAUs grew 79% YoY to 42.1M
      • 87% growth in DAUs outside of the US/Canada
      • 111% growth in DAUs over the age of 13
    • DAUs composition by region: US & Canada (12.6M), Europe (12.5M), RoW (10.6M), APAC (6.5M)
    • DAUs composition by age group: U13 (21.3M), O13 (20.5M), Unknown (0.3M)
    • Hours engaged grew 98% YoY to 9,674M hours
      • 104% growth in engagement in markets outside of the US/Canada
      • 128% growth from users over the age of 13
    • Average Bookings per DAU (ABPDAU) grew 46% YoY to $15.48

SciPlay Reports FQ1 2021 Earnings (link)

  • SciPlay reported significant growth in YoY revenue and AEBITDA with modest increases QoQ, but lower than expected diluted EPS
    • Reported FQ1 2021 revenue of $151M representing a 28% increase YoY and 3% increase QoQ, exceeding consensus of $145M
    • Reported FQ1 2021 AEBITDA of $46M representing a 32% increase YoY and 2% increase QoQ, exceeding consensus of $45M
    • Reported diluted EPS of $0.21 vs consensus of $0.24
  • Monetization KPIs improved YoY in FQ1 2021, but MAUs and DAUs declined YoY
    • FQ1 2021 ARPDAU of $0.67 vs FQ1 2020 ARPDAU of $0.49, representing a 37% increase YoY
    • FQ1 2021 AMRPPU of $92.80 vs FQ1 2020 AMRPPU of $83.58, representing an 11% increase YoY
    • FQ1 2021 Payer Conversion of 8.1% vs FQ1 2020 Payer Conversion of 6.3%
    • FQ1 2021 MAUs of 6.7M vs FQ1 2020 MAUs of 7.5M, representing a 11% decrease YoY
    • FQ1 2021 DAUs of 2.5M vs FQ1 2020 MAUs of 2.6M, representing a 4% decrease YoY

Ubisoft Reports FY 2020-21 Earnings (link)

  • Financial Performance
    • Reported FY 2020-21 Net Bookings of $2,723M (+46% YoY) versus guidance of $2,693M-$2,766M and consensus of $2,771M
    • Reported FY 2020-21 Operating Income of $575M versus guidance of $546M-$607M and consensus of $559M
    • Reported FY 2020-21 Net Income of $381M versus consensus of $322M
    • Digital Net Bookings grew 28% YoY to $1,955M and comprised 72% of total Net Bookings
  • Business Highlights
    • All time high activity with 141M unique players on PC and Console (up 20% YoY)
    • Assassin’s Creed franchise set a yearly record and Rainbow Six became one of the top 10 most played games in 2020 among premium and F2P console titles, with double-digit player acquisition growth
    • The Division reached 40M unique players
    • Ubisoft Connect was rolled out, an ecosystem of player services for all Ubisoft games across all platforms

Unity Reports FQ1 2021 Earnings (link)

  • FQ1 2021 Results
    • Reported FQ1 2021 Revenue of $235M, representing a 41% increase YoY and exceeding consensus of $217M
    • Reported FQ1 2021 Gross Profit of $176M (75% margin), representing a 30% increase YoY and exceeding consensus of $170M
    • Reported FQ1 2021 Operating Profit (Loss) of ($111M), compared to ($27M) in FQ1 2020 and consensus of ($94M)
    • Reported FQ1 2021 EPS of ($0.39), compared to ($0.21) in FQ1 2020 and consensus of ($0.31)
    • Unity’s first quarter 2021 results were impacted by an increase in stock-based compensation expense primarily related to the satisfaction of the performance vesting condition on outstanding RSUs upon completion of its IPO
  • Business Unit Performance
    • Create Solutions
      • Revenue: $70M (increase of 51% YoY)
    • Operate Solutions
      • Revenue: $147M (increase of 40% YoY)
    • Strategic Partnerships & Other
      • Revenue: $18M (increase of 12% YoY)
    • 837 customers each generated more than $100,000 of revenue in the trailing 12 months as of March 31, 2021, compared to 668 as of March 31, 2020
    • Dollar-based net expansion rate as of March 31, 2021 was 140% as compared to 133% as of March 31, 2020

M&A and Capital Raising

Animoca Brands raises $88M at $1B valuation to capitalize on game NFTs (link)

  • Investors in the round included Kingsway Capital, RIT Capital Partners, HashKey Fintech Investment, AppWorks, LCV, Perennial, Axia Infinity Ventures, SNZ, and Liberty City Ventures among others
  • Animoca Brands has had strong initial results with blockchain games including F1 Delta Time, The Sandbox, and MotoGP Ignition; and has launched associated tokens including Revv and Sand
  • The Company has made investments in Dapper Labs, Opensea, Bitski, Axie Infinity, and many others

Big Time Studios is raising $21M to bring NFTs to game economies (link)

  • The funding comes in two parts: $10M in a round led by FBG Capital with additional participation from North Island Ventures, Digital Currency Group, OKEx Blockdream Ventures, Alameda Research, Circle Financial, and Sound Ventures; and $11M from the Company’s fund that it will use to invest in game companies that adopt its technology
  • The Company’s flagship game is Big Time, an adventure across space and time that puts the player in the driver’s seat of their own time machine, allowing them to collect legendary items from amazing historical battles
  • Development on Big Time is underway for PC, with an announcement for the beta coming later this year; the studio expects to launch the game in 2022

Sky Mavis raises $7.5M for NFT-based Axie Infinity game (link)

  • Investors in the round include Blocktower Capital, Konvoy Ventures, Libertus, Collab + Currency’s Derek Schloss and Stephen McKeon, and Mark Cuban
  • Axie has grown in recent months to 36,000 daily active users and $12M in monthly NFT volume traded
  • The Company is hiring traditional game developers to make the game more fun and is lowering the barriers of entry to allow all gamers to play

Hiro Capital invests $6.4M in Twin Suns and FRVR game startups (link)

  • London-based Hiro Capital is investing in game creators in video games, esports, gamified fitness, and the metaverse
  • Twin Suns is building an unannounced triple-A cross-platform title that will debut with an original game franchise
  • The Twin Suns team has 13 people and plans on hiring more people over the summer
  • FRVR is an instant games ecosystem platform for gameplay on any device and has games including FRVR Basketball
  • FRVR has been in business for five years, and it has a team of 45 people

Former Blizzard and Epic veterans raise $5M for Lightforge Games (link)

  • Investors in the round included Galaxy Interactive, NetEase Games, Dreamhaven, Maveron, 1UP Ventures, and angel investors
  • North Carolina-based Lightforge Games is working on a cross-platform social RPG where players have the power to create worlds and tell stories with freedom
  • Lightforge is a team of 11 people and with immediate plans of hiring three more

Allstar raises $3.9M so gamers can share snackable game highlights (link)

  • Members of the New York Angels led the round with additional participation from Studio.vc, Emerging Ventures, and J-Ventures among others
  • The platform helps casual gamers and rising competitive esports players alike share their biggest highlights with a growing network of supportive users, as well as organizations or coaching staffs
  • The funding will help Allstar enhance the company’s current product offering, integrate new titles onto its growing platform, and expand its hiring and partnership efforts
  • Beyond its own network, Allstar’s creative automation technology integrates with platforms like Discord; and the Company recently announced a partnership with TikTok

Hidden Leaf Games raises $3.2M on a MOBA gambit called Fangs (link)

  • The round was led by Lightspeed Venture Partners with additional participation from Vermillion Ventures and angel investors
  • The team is focused on making a PC game first, and then it will extend it to mobile devices as well, with the ultimate goal being a cross-platform game
  • Hidden Leaf chose a 3-on-3 MOBA instead of 5-on-5 as in League of Legends because it makes for a less chaotic and more accessible game, with a chance for shorter matches
  • The team of 32 has been working for 18 months and the game is entering its alpha testing now with plans to go into beta testing and subsequently launching later this year

Wilder World raises $3M for a metaverse built around NFT art (link)

  • The $3M round was led by Spartan Group, with additional participation from DCG, Animoca Brands, Republic Realm, and Signum Capital
  • In the past three months, Wilder World has launched its $WILD token and recruited more than 250 crypto artists and collectors to the platform
  • The Company has more than 15,000 subscribers and secured partnerships with more than 80 influencers in the crypto ecosystem

Krafton snaps up mobile games studio Dreamotion (link)

  • South Korean gaming company Krafton has announced its acquisition of mobile gaming studio Dreamotion for an undisclosed sum
  • Established in July 2016, Dreamotion has developed and published three games: Samurai, Road to Valor: World War II, Gun Strider: Tap Strike
  • After the acquisition, Dreamotion will continue to work as an independent studio alongside Krafton’s other studios, Blue Hole Studio, Rising Wings, and Strike Distance Studio

Others

Nintendo willing to utilize $9B war chest for acquisitions – when needed (link)

  • Nintendo has confirmed that it would be open to making more acquisitions to keep up with “rapidly advancing technological innovation”
  • In January, Nintendo announced that it would purchase Luigi’s Mansion 3 developer Next Level Games – marking its first acquisition in over a decade

Gaming Public Multiples

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