Highlights

Embracer reported FQ2 2022 earnings (link)

• Embracer’s stock traded up 4% the following day
• Embracer reported strong YoY growth driven by its Games business and acquisitions
  • Reported FQ2 2022 overall net sales of $370M, representing a 38% increase YoY and exceeding the consensus of $350M by 5%
  • Reported FQ2 2022 Games business net sales of $310M, representing an 89% increase YoY
  • Reported FQ2 2022 EBITDA of $180M, representing an EBITDA margin of 50% and a 69% increase YoY
  • Reported total game development projects of 197, representing a 46% increase YoY
• Portfolio Performance & KPIs
  • Delayed the releases of two AAA titles from FY 21/22 to FY 22/23, including Saints Row and another unannounced but previously expected title
  • Reported Mobile Daily Active Users (DAUs) of 32M and Mobile Monthly Active Users (MAUs) of 271M
  • Premium PC/Console/VR businesses sales relied primarily on the back catalog, with only a few new releases that contributed to sales
  • Reported the successful release of Hot Wheels Unleashed, Insurgency Sandstorm (console) and World War Z Aftermath
• Guidance
  • Management expects stronger profitability over the coming years, driven by a greater pipeline of new products, a strong back catalogue and live ops business, and healthy growth within the free-to-play mobile segment
  • Reported FY 21/22 Operational EBIT forecasts of $480M – $520M; FY 22/23 Operational EBIT forecasts of $780M – $950M; FY 23/24 Operational EBIT forecasts of $830M – $1.1B
• M&A Strategy
  • The Company suggests that growth through acquisition has been and will remain a strategic pillar
  • Embracer has made 37 acquisitions in the last twelve months and expects a similar number of acquisitions in the next twelve months
  • The Company’s most likely transactions surround talent and IP acquisitions with the purpose of strengthening existing operating groups
  • The Company believes additional scale and diversification across premium and free-to-play is beneficial
  • The Company is also looking to develop IP that can be used across various forms of media

Nexters reported FQ3 2021 earnings (link)

• Nexters’ stock traded up 2% during the day
• Nexters reported strong YoY growth driven by its Desktop platform business and increased market share in Asia
  • Reported total bookings of $151M, representing a 29% increase YoY
    • Asia bookings now represent 26% of total bookings
    • Advertisement sales of $9M, representing 6% of total bookings
  • Reported record FQ3 2021 revenue of $115M, representing a 77% increase YoY
  • Reported adjusted net profit of $8M, compared to ($11M) in the same period of the previous year
  • Desktop platform bookings of $45M, representing a 55% increase YoY
• Portfolio Performance & KPIs
  • Monthly paying users of 371K, representing a 30% increase YoY
  • Average Bookings per Paying User of $128, in line with $132 in the same period of the previous year
  • Launched Throne Rush, a strategy-based game, on Web platforms
  • Celebrated the 5^th anniversary of Hero Wars mobile, which surpassed lifetime bookings of $1B

Blockchain game companies raised over $2B in the past nine months, according to Quantum Tech Partners (link)

• Q3 game company M&A volume reached $16B, bringing the nine-month total to $34B, representing more than double the full-year 2020 M&A volume
• Game startup financing volume reached $9B in Q3, bringing the nine-month total to $26B, exceeding the full-year 2020 financing volumes
• The $2B figure does not include blockchain game platform Forte’s recent $725M Series B financing round

Cloud gaming to surpass $13.5B by 2026, according to DFC Intelligence (link)

• This year’s cloud gaming market generated $1.2B and is expected to grow at a 62% CAGR until 2026
• The report explains that existing gaming consumers that own high-end PC and consoles are expected to generate nearly $10B of the expected forecast
• A majority of the growth will be driven by products and services that are not tied to a specific subscription service, including live-service games, user-generated content, and increased monetization of video game viewership

M&A and Capital Raises

• Overwolf’s game modification platform enables game developers and publishers to take advantage of user-created content based on popular games
• The Company has more than 87K creators and 20M MAUs
• The Company will use the proceeds to strengthen and grow its in-game creator ecosystem through CurseForge Core
• The round was led by Andreessen Horowitz, with additional participation from Griffin Gaming Partners, Insight Partners, Intel Capital, Liberty Technology Venture Capital, and Marker
• Overwolf previously raised $52.5M in March 2021, bringing this year’s total to $127.5M

Million Victories raises $3M in Series A funding (link)
Million Victories is a portfolio company of Griffin Gaming Partners

• Million Victories is best known as the maker of Million Lords, an online multiplayer strategy title for mobile that has over 500K downloads
• The Company will use the proceeds to fuel its growth, recruit more talent, and develop more titles to add to its portfolio of strategy titles
• The round was led by Griffin Gaming Partners

Leaf Mobile to join London Stock Exchange at a £130M ($175M) valuation (link)

• Leaf Mobile is a free-to-play mobile game group that develops and publishes games in-house through IP partnerships
• The Company expects to raise CAD $10M ($7.9M), and will use the proceeds to further scale the business
• Leaf’s common shares will continue to trade on the Toronto Stock Exchange, as well as the OTC Market Group’s OTCQB Marketplace in the US

DreamCraft raises $10M to enhance game creation platform (link)

• The Company will use the proceeds to build its game development platform and editor for those who lack the programming and development experience to more complex tools
• The round was led by March Gaming, with additional participation from Makers Fund, Dune Ventures, and Hiro Capital

Dubit raises $8M in funding round (link)

• Dubit is a professional gaming association that is currently in beta on the Roblox platform
• The Company will use the proceeds to launch the Metaverse Gaming League, which they state is the world’s first live esports league in the metaverse
• The Company aims to expand the league to Minecraft and Core in the future
• The funding round was led by Metaventures

Irreverent Labs raises $5M to build games with AI characters (link)

• The Company will use the proceeds to build on an accessible play-to-earn game with artificially intelligent characters living on the blockchain as NFTs
• The game will be designed to evolve over time with machine learning and decentralized player ownership via NFTs
• The round was led by Andreessen Horowitz, with additional participation from Mantis Fund, Keen Crypto, Unlock Ventures, and AdvancIt Capital

IndieBI raises $3M in funding round (link)

• IndieBI is an analytics company that plans to develop an easy-to-use platform that provides understandable sales and marketing analysis to game developers and producers
• The round included Humble Bundle, Mountaintop, Innersloth, Absurd: Joy, and Redhill, with additional participation from Timberline, Thunderful Group, Superhot, A44, Coatsink, Seed Studio, Hinterland, Kowloon Nights, and Kepler Interactive

Thunderful acquires Early Morning Studio (link)

• Based in Stockholm, Sweden, Thunderful is best known for mobile RPG Vampire’s Fall: Origins, which has over 10M players, as well as Champions of Avan and the upcoming Vendir: Plague of Lies
• The Company recently announced it will publish Super Meat Boy Forever for mobile devices, though the group’s development and publishing operations focus on PC / Console

Nordisk Games takes majority stake in Star Stable (link)

• Star Stable is known for its horse adventure game Star Stable Online, which has 1.4M monthly users
• Nordisk Games now owns 57% of the Star Stable Online developer, after having previously purchased a “substantial minority” share back in May 2018

Other

Now.gg gives 95% cut to mobile game developers and launches NFT monetization (link)

• Now.gg, a sister company to Android-PC gaming firm BlueStacks, has launched a mobile cloud platform with low fees and NFT monetization for the developers
• The platform introduces a cloud payment and NFT-based monetization model for mobile games on the cloud, as well as the Apple and Google app stores
• The Company offers monetization via an NFT marketplace, NFT gift cards, and NFT game fan art

How Apple’s privacy changes affected mobile game revenues in Q3 (link)

• Apple’s IDFA deprecation has resulted in an iOS revenue loss of 15% to 35% across mobile app advertisers, according to Consumer Acquisition
• Ad rates and impressions are higher, and impression quality is likely down due to less effective audience targeting and measurement
• The loss of precision advertising has made iOS user acquisition less effective and less profitable

Game Awards 2021 has revealed its nominees (link)

• This year’s game nominees include Deathloop, It Takes Two, Metroid Dread, Resident Evil Village, Ratchet & Clank: Rift Apart, and Psychonauts 2
• Deathloop leads with eight nominations, including Game of the Year, Best Narrative, and Best Performance
• The event is being held live
• for the first time since 2019, and fans can vote via the Game Awards website, Twitter, and Discord

Nikeland debuts on Roblox as its latest persistent gaming space (link)

• Nike announced the opening of Nikeland, an immersive world experience, on Roblox
• This custom world was inspired by Nike’s headquarters and holds detailed arenas for the Roblox community to play various mini-games, including tag, the floor is lava and dodgeball
• Users can also use the Nikeland tool kit to design their own mini-games from interactive sports materials

RiotX Arcane and Magic: The Gathering are teaming up (link)

• RiotX Arcane is a month-long event from Riot Games to promote its animated series Arcane
• Arcane was recently renewed by Netflix and holds the title as the highest-rated Netflix original series on IMDB ever
• The event has cross-promotions from a number of other products, including Among Us and Fortnite
• This collaboration will have two different groups of cards that will feature characters, locations, and key moments taken from Arcane

Halo Infinite’s free multiplayer surprise launches (link)

• Microsoft announced the surprise open beta launch of Halo Infinite’s free-to-play multiplayer version during its Xbox 20^th anniversary stream
• Halo Infinite’s single-player campaign is set to be released on December 8^th for Xbox Series X/S, Xbox One, and PC
• The Halo Infinite campaign will be released on Game Pass day one or can be purchased to play

Riot Forge launches two League of Legends games with others on the way (link)

• Riot Forge, a publishing label within Riot Games, announced the launch of its first two games, including Ruined King: A League of Legends Story and Hextech Mayhem: A League of Legends Story
• The Company plans to publish several games based on League of Legends developed by third-party studios
• Ruined King, first announced in 2019, is a single-player turn-based RPG developed by Airship Syndicate
• Hextech Mayhem is a rhythm runner from Choice Provisions, the developers of the Bit.trip games

FaZe Clan partners with DraftKings on sports betting (link)

• DraftKings will become the official sports betting, internet gambling, daily fantasy, and free-to-play partner of FaZe Clan
• DraftKings will be integrated into FaZe Clan’s digital content ecosystem through custom content, livestreams, tournament events, and new IP, including an original series and a new planned podcast

Mytaverse launches a metaverse for business travelers (link)

• Mytaverse plans to develop a 3D metaverse where businesspeople can create their own avatars and stage meetings, events, showrooms, and training sessions virtually
• The Company is using the Unreal Engine to develop high-quality graphics for a more realistic virtual experience
• The Company plans to host these environments in a web-based world, without requiring users to wear VR or AR gear

Nintendo partners with Panda Global for Super Smash Bros. Melee and Ultimate events (link)

• These events will be the first-ever officially licensed championship tournament in North America for Super Smash Bros. Ultimate and Super Smash Bros. Melee
• Panda Global, a professional gaming organization, will coordinate and host the events
• Qualifying rounds will be held online for Super Smash Bros. Ultimate, while in-person qualifiers for both titles will take place once large events return
• Winners of both qualifying rounds will then be eligible to participate in the grand finals

Twitch viewership increases 19% YoY in October, according to Rainmaker.gg (link)

• Viewers watched 1.9B hours of video on Twitch in October, representing a 19% increase YoY
• Facebook Gaming viewership reached 512M hours in October, representing a 61% increase YoY
• League of Legends was the most-watched game reaching 205M hours driven by the League of Legends World Championship, followed by Dota 2 which reached 97M hours driven by The International

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