Highlights

CD Projekt FQ3 2020 Earnings Update (link)

• CD Projekt traded down 1.3% over the two days following earnings release (Thursday & Friday), likely due to game delays, despite YoY growth and improvements in CD Projekt Red and GOG.com, their two reported operating segments
• For FQ3 2020 specifically, the company reported $28M in revenues, representing 13% YoY growth, though falling short of consensus ($33M)
  • Gross Profit: $18M (64% margin, increase of 24% YoY)
  • EBITDA: $9.9M (35% margin, increase of 51% YoY)
  • $0.10 Diluted EPS (vs. consensus of $0.09)
• Revenue growth was primarily attributable to licensing royalties associated with The Witcher 3: Wild Hunt, together with its expansions, Nintendo Switch game sales, and royalties related to digital sales in the framework of GWENT: The Witcher Card Game and Thronebreaker: The Witcher Tales
• Revenues from digital distribution of videogames licensed from external suppliers on GOG.com, CD Projekt’s digital distribution platform, grew 23% YoY compared to FQ3 2019

Epic Games launches Fortnite Crew subscription (link)

• Epic Games will launch its new Fortnite Crew subscription for $12/month on December 2, 2020
• With the subscription, players will get a Battle Pass for Season 5, 1,000 V-Bucks (~$8 worth of V-Bucks) each month to spend on items such as skins, and a Fortnite Crew Pack including an outfit bundle exclusive to subscribers
• The Battle Pass will exist independently and can be made as a one-time purchase

Roblox partners with Ernest Cline on Ready Player Two event (link)

• In partnership with Ready Player Two, Roblox is launching a themed treasure hunt with seven user-generated games based on the book inside the Roblox platform
• Players who complete the treasure hunt will be awarded virtual goods designed specifically for the Ready Player Two event
• The event will feature a virtual Q&A with author Ernest Cline and Roblox CEO David Baszucki, which will stream inside the event and contain clues for navigating the treasure hunt
• It’s another example of Roblox’s plans to bring about the metaverse, the universe of virtual worlds that are all interconnected

ByteDance launches mobile games store and publishing arm (link)

• ByteDance will hope to compete with fellow Chinese companies Tencent and NetEase
• Last month, ByteDance launched Danjuan Games, a storefront dedicated to mobile titles
• In November, the firm revealed a new publishing arm, dubbed Pixmain, which currently has five games in development
• All five titles under Pixmain are expected to be available on mobile devices, with one also available on the Nintendo Switch

M&A and Capital Raising

AppsFlyer raises funding from Salesforce Ventures at $2B valuation (link)

• Mobile measurement and marketing company AppsFlyer has raised an undisclosed amount in a new round of funding from Salesforce Ventures at a $2B valuation
• The Company previously raised $210M at a $1.6B valuation in January 2020
• The Company has ~1,000 employees globally and more than $200M in ARR
• AppFlyer’s goal is to accurately measure mobile ad spending and become a “democratizer” of mobile marketing

Kahoot has acquired language learning mobile game maker Drops for up to $50M (link)

• Norwegian learning platform company Kahoot has acquired Estonian language learning mobile game maker Drops for as much as $50M
• Kahoot is paying $31M in cash up front, and an additional $19M based on undisclosed performance metrics from 2020 to 2022
• Drops has seen an increase of 7.5M users in 2020 to a total of 25M users, and recently reached a revenue run rate of $10M
• The Drops acquisition is part of Kahoot’s strategy to expand into new areas of learning, whether at school, work, or home

TinyBuild invests $3M in Secret Neighbor developer Hologryph (link)

• The investment gives TinyBuild a majority stake in the studio, with the use of proceeds supporting soon-to-be-announced IP for the PS5 and Xbox Series X/S
• TinyBuild is driving towards a value-based subscription models with the Hello Neighbor franchise available on Xbox Game Pass

Supercell invests $2.8M in 2Up, a co-op mobile game studio (link)

• Supercell, developer of Clash Royale and Clash of Clans, is investing $2.8M in New Zealand game studio 2Up Games
• 2Up Games was created to develop co-op games, which the Company believes will make the world a better place as people struggle with isolation during the pandemic
• 2Up Games co-founder, Joe Raeburn, previously worked at Space Ape Games, maker of Samurai Siege, before Supercell acquired a majority stake of the company in May 2017

Others

Studio MDHR will delay Cuphead’s The Delicious Last Course DLC (link)

• Studio MDHR announced that it has delayed the release of its Cuphead downloadable content, named The Delicious Last Course, to an unspecified date
• The Studio said that the delay is due to challenges it has faced during the pandemic
• While not specifying a new release date, the Studio said, “[The Delicious Last Course will be released when] we are confident it will delight the Cuphead community the way we feel it should”

Small Giant Games names Jose Saarniniemi as its new CEO (link)

• Until now, Saarniniemi has been responsible for the finances and operational management of Small Giant Games
• Saarniniemi initially joined the studio’s management team in 2017 and previously worked for Rovio

Esports firm 100 Thieves teams up with Fortnite (link)

• The partnership will see Epic Games add 100 Thieves’ esports facility, the Cash App Compound, to its Fortnite Creative’s Welcome Hub

• Players will be able to explore the Compound and complete quests that are linked to members of 100 Thieves, which will unlock new areas of the facility to explore
• This is another of Fortnite’s many collaborations this year including those with Travis Scott, BTS, and J Balvin

Gaming Public Multiples