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spk03: joining us today.
spk01: This program will begin momentarily. Please remain on the line. Thank you for your patience. Thanks for watching!
spk03: Thank you for standing by and welcome to the first quarter 2021 conference call and webcast for Motorsport Games, Inc. On today's call are Dimitri Kosko, Executive Chairman and Chief Executive Officer, Stephen Hood, President, and John New, Chief Financial Officer. By now, everyone should have access to the company's first quarter earnings press release filed today after market closed. This is available on the Investor Relations section of Motorsport Games' website at www.motorsportgames.com. During the course of this call, management may make forward-looking statements within the meaning of the federal security laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and the company's filings with the SEC, including the company's annual report on the Form 10-K for the year ended December 31, 2020, and the company's quarterly report on Form 10-Q for the period ended March 31, 2021, for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. In today's conference call, we will refer to the certain non-GAAP financial measures such as adjusted EBITDA as we discuss the first quarter 2021 financial results. You will find a historical reconciliation of these non-GAAP measures to our actual GAAP results included in the press release issued earlier today. We do not provide a reconciliation for adjusted EBITDA on a forward-looking basis because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is now available without unreasonable effort due to the inherent difficulty of forecasting the timing and amount of certain items such as but not limited to certain acquisition related expenses and stock based compensation expenses as such adjustments have not yet occurred are out of our control and cannot be reasonably predicted, and accordingly, we are unable to address the probable significance of the unavailable information. And now, I would like to turn this call over to Dimitri Kosko, Chief Executive Officer of Motorsport Games.
spk04: Hello, everyone. It's a pleasure to be speaking with you as we report another successful quarter for Motorsport Games. Please check out our investor video posted on our landing page of our RIR website. We hope this video gives you a sense of the energy and excitement inherent in everything that we do here at Motorsport Games, while quickly illustrating our key milestones in the quarter. Before I dive into details, I want to say a quick thank you to our shareholders, including many new investors we have met in the past few months. Thank you for taking the time to learn our story and to follow us on this amazing journey. To all of our new shareholders, let me quickly reiterate who we are and what drives us. We are an award-winning, leading racing game developer, publisher, and an esport ecosystem provider of official motorsport racing series throughout the world. Our mission at Motorsport Games is simple. We create and spread the joy through racing games, starting with our exclusive access to our parent company's 55 million monthly active users and beyond. We achieved this mission by developing and publishing great racing games and immersive esport experiences of the world's most iconic races and brands who trust us with their valuable IP and often in a long-term partnerships like we have with NASCAR. There are one of several iconic brands that we work with today, including ATO, which represents 24 hours of Le Mans and British Touring Car Championship. And we're just getting started. I'm proud of our team and the progress we're making towards the launch of NASCAR Next and building Motorsport Games into a world-class interactive entertainment company. And we're truly world-class as we're operating 24-7 across continents with more than 122 team members at the close of the quarter, expanding our development resources by nearly 30%, growing fast from where we were just months ago. And at any given time, our developers and programmers are innovating and collaborating across the United States, United Kingdom, Russia, Australia, and now the Netherlands. This global studio presence is differentiating as we seek additional IT opportunities to expand our fan base and become the market leader in virtual motorsport racing around the world. Our strategic initiatives are key here as we assemble the assets needed to elevate from one product company to a multi-product game publisher, developer, and an eSport provider. The combination of Studio 397 and R Factor 2, CarCraft, and the anticipated acquisition of Digital Tails is highly synergistic, and I'm very pleased with the progress we have been made year to date integrating these new assets which we believe ultimately will translate into the most compelling gaming experiences for our fans. This is particularly the case with NASCAR Next, where we anticipate the game to be released in the back half of the third quarter of this year, which we feel is the ideal time to launch this exciting new game. The quality of this game is said to be incredibly high, and the realistic experience it provides is what our fans have been asking for and what they expect from a world-class gaming company. We continue to strive towards our goal of achieving a triple A status where this game franchise truly belongs. The game brings high quality, realistic graphics, to consume the player in a real-world racing experience while showcasing the unique and fun characteristics of NASCAR. This is possible due to our recent strategic initiatives, and let me update you on those. Since completing the acquisition of Studio 397 and acquiring their hyper-realistic technology platform, R-Factor 2, we have been able to accelerate the integration of this technology into the new NASCAR game. Furthermore, we will now integrate the technologies with a complete understanding and security that it will, in the future, integrate at the source code level as part of the MSGM engine, further improving our development efficiencies across our racing game portfolio. As our core development team enhance the source code, any and all improvements are additionally folded back into our Factor 2 to improve that product as well. This efficiency was not possible before the acquisition. Motorsport Games and Studio 397 had a working relationship for the past two years, and this great relationship enabled us to seamlessly integrate talented developers, technology, and gaming expertise. We also completed the acquisition of CarCraft, or Motorsport Games Australia during the Q1. This acquisition allows us to further diversify our global presence and attract new fans to our community while adding another racing discipline to our gaming portfolio, and we look forward to pairing Car Craft with another notable IP. Motorsport Games Australia is continuing to enhance the Car Craft title to provide new content and updated physics. Our development teams have all the tools necessary to create games that are fun, immersive, and realistic. Completing these acquisitions has been great for our product pipeline and development capabilities already. We're also working towards completing the anticipated Digital Tales acquisition, which we're super excited about. As of now, we do not have any additional M&A plans to disclose. However, We're always exploring new opportunities to maximize our shareholder value and capital, but at this time, our core focus is finalizing NASCAR Next and getting it into the hands of our eager fans. And now an update on our eSport business, which funnels new users across our product base and drives higher fan engagement and new potential revenue streams from sponsorships. It is a highly compelling market opportunity and growing global phenomenon. Now a billion-dollar industry expected to grow at a CAGR of 10% over the next decade. In 2020, nearly half a billion people around the world watch an esport event, and that number is only trending upwards. We are participating in that growth, and we want to be the dominant player in the racing esport scene. We believe our combination of world-class events around iconic IP and effective user engagement with our fans will help us get there. A few of the events we showcased were finals of the DIRC Rally 2.0 World Series, World Rallycross Esports Series, and our Winter Heat events on our own NASCAR Heat 5 video game. And we just received an exciting validation. One week ago, we received a 2021 Sports Technology Award for the best use of esports by sports brand for our 24-hour Le Mans virtual event. This was a category formidable with competitors, including Formula One and ESL. The award is a leading global celebration of technology-led innovation across international sports sector, and we won the esports category. It's held annually as a competition to highlight outstanding advances in the industry, and the awards are judged by over 50 leading influences from the world of sport and technology. We're excited about this major validation of our esport capabilities and the success of our Le Mans virtual last summer, reflecting our team's hard work, creativity, and vision delivering awesome content and community to our global fans we're now working on our second annual lamont virtual event which will also benefit from our new ownership of r factor 2 and we're focused on having vast audience again like we did last year when we had record tv and digital viewership numbers other events will include btcc sports NASCAR Summer Heat Showdown, and eNASCAR Pro League Season 3 events. All are expected to raise awareness for the launch of NASCAR Next, and of course, we're starting to build audiences for product launches of other series coming later. Lastly, we're a launching traction platform to foster growth and allow our growing fan base to engage more deeply online and across our platforms. Traction plays a key role in our esport business, as all events will be featured and integrated with the user base there. We believe the future of this space relies heavily on innovation, and we expect to deliver the next phase of traction integration into our ecosystem later this year. Now, Steven is going to say a few words about our product development progress. Thank you.
spk00: Thank you, Dimitri. And hello, everyone. I'm Stephen Hood, president of Motorsport Games. We are pleased to announce the great development strides we are making this quarter, especially for our new flagship franchise game, NASCAR Next. Our major reworking of the NASCAR franchise enters closing stages of development as NASCAR Next enters beta. The game will then enter a final significant development period prior to product hardening and submission to platform holders for testing and certification. Due to our recent acquisition of Studio 397, NASCAR Next will include their leading racing simulation technology. R-Factor 2 brings real-life physics to our development toolbox that we can integrate into the game and develop in a much more efficient way. We are working around the clock and anticipate the launch of our new NASCAR franchise in the back half of the third quarter this year. But we are not stopping there. We are bringing NASCAR to the Nintendo Switch platform, which remains on track for a release later this year. A platform not yet reached by Motorsport Games will add useful exposure and revenues to our NASCAR franchise and pave the way for possible future franchise entries into the Nintendo market. We are also continuing to build on NASCAR Heat Mobile, using our expanded development team with ongoing quality of life improvements and our recently prioritized upcoming 2021 content update, which should broaden the appeal of the product and appease existing fans and new fans alike. Additional titles around the NASCAR license remain in development within our portfolio and include Match 3 and Nintendo Switch products. We continue to work at pace to grow our fan base across multiple consoles and platforms to drive the joy of racing games to our fans wherever they may play. As you know, we had our hands full seeking and completing strategic acquisitions to help bolster our development teams, technology platforms, and overall gaming experience. Both Motorsport Games Australia with Cartcraft and Studio 397 with R-Factor continue to integrate into Motorsport Games with all parties working together to harness and integrate staff, processes, and technologies. Both studios will be providing significant expertise and product capabilities to motorsport games over the coming months and years. For example, our Factor 2 from Studio 397 will be our go-to esports platform for those series we are yet to provide a motorsport games bespoke product for. British Touring Car and Le Mans will immediately benefit from this, and our in-house teams now have the confidence and control over a world-class esports platform. We are continuing to expand features and content of both CarCraft and rFactor 2. I want to shift to an update on our BTCC content. All British touring car environments have now been laser scanned ahead of track content creation. Laser scan data allows for highly accurate recreation of surfaces and environmental detail, which when combined with the MSGM physics engine in rFactor 2, provides the highest level of feedback for players, making every stretch of track as engrossing an experience as possible. British Touring Car, which will utilise the upcoming NASCAR Next Game platform, has recently undergone creative planning designed to differentiate the product versus other offerings from MSGM and appeal to a wide audience of touring car fans all over the world. Our products will each carry unique traits which can be selectively waterfalled into subsequent titles and in order to drive forward the motorsport games product ecosystem. This allows for tightly controlled development expense but with a focus on feature differentiation and technology reuse. In the end, our development teams can work more efficiently and still provide the highest quality product on the market. Lastly, high caliber recruits continue to arrive and strengthen our studio's capabilities. An experienced technical director joined the Silverstone UK studio in May as we continue to recruit the industry's best and brightest talent to turn the UK hub into a fully functioning development studio in its own right. Positioned alongside our internal esports team, Silverstone will ensure tight collaboration between the goals of our development and esports operations. Additional hires from world-class studios such as Electronic Arts and Playground Games continues the pace. The increased recognition of motorsport games activities has served to accelerate the reach of our company. Now let me hand over to John New to give some financial highlights.
spk02: Thank you, Steven. We're pleased to welcome everyone to our 2021 first quarter earnings conference call. For the first quarter of 2021, revenues were $2.5 million as compared to $3.2 million in the first quarter of 2020. The year-over-year decrease reflects lower sales on our console games and, to a lesser extent, a reduction in mobile revenues. The NASCAR Heat 4 game was released in September 2019. That was two months later in the respective calendar year compared to the release of NASCAR Heat 5 in July of 2020. This resulted in higher sales of NASCAR Heat 4 during the first quarter of 2020 as compared to sales of NASCAR Heat 5 during the first quarter of 2021, since the majority of sales from a new release occur closest to the release date. Gross profit was $1.7 million for the first quarter, which was a decrease of 22% compared to the prior year first quarter gross profit of $2.2 million. Gross profit margin was 68% of revenues in the first quarter of 2021 compared to 67% of revenues in the prior year period. The decrease in gross margin dollars is primarily due to the reduction in revenues, partially offset by the increased percentage of digital sales versus physical units. Digital has higher margins. Operating expenses were $17.1 million for the first quarter of 2021 compared to $2.3 million for the first quarter of 2020. The first quarter includes expenses of $2.9 million associated with our IPO, $9.1 million in non-cash stock-based compensation relating to the IPO, and $300,000 in expenses related to acquisition activity in the quarter. As a result, adjusted EBITDA was negative 2.8 million for the three months ended March 31, 2021, versus negative 0.07 million in the prior year period. The quarter-over-quarter change reflects the increase in staffing, marketing, and game development to support new brands and new platform options for our upcoming games. Let me finish by touching on our financial expectations looking ahead. We remain confident in our full-year guidance, which is $22.5 million in revenue and adjusted EBITDA, negative $7.3 million. With the anticipated release of NASCAR Next in the back half of third quarter this year, launch-related revenues are expected to spread over the third and fourth quarters. We remain comfortable with our full-year revenue forecast of $22.5 million and Thank you for joining us today, and now let's go to questions. Operator?
spk03: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from one of Michael Graham with Canaccord. You may proceed with your question.
spk07: Thank you, and thanks for all the updates, guys. Just wanted to start with one question on the NASCAR Next launch. You know, we've always expected it to come in Q3, so your comments are consistent with that. Just wondering if you can, you know, give us a little color on, you know, why the second half of the quarter makes the most sense for that launch. And also, you know, along with that, just wondering if maybe – Steven, appreciated your comments on some of the game qualities and features, but if there's anything you can share about the level of DLC that you expect this first launch to have would be interesting to us. Then I have a follow-up. Thanks.
spk04: Thank you, Mike, for the question, Dimitri. The reason is historically with NASCAR Heat 2, 3, and 4, We have seen great results from launching these annual NASCAR game releases in the month of September. So for the NASCAR Next, we are on target to launch in the second half of Q3. And as we continue to look at data points that will help us make this potentially the most successful NASCAR title yet in our company history. So we still remain very comfortable with our full year guidance of 22.5. and now are getting into more specific on the timing.
spk01: And Steven? Take the second part of the question.
spk00: Sure, I can pick up on the DLC. So yes, certainly the plan is to inject probably the easiest way to describe it is a greater variety of DLC content into NASCAR Next. So one of the key reasons for wanting to rebuild the technology platform and do all the work that we've been putting into NASCAR Next over the last couple of years is to prepare the platform for new DLC in the future instead of just paint schemes being injected into a product that we already know is incredibly popular amongst our audience. There are additional content opportunities around schemes and themes for UI, personalizing the product a little more, possibly adding additional cars into the package into the future. So these kind of drivable components are of even more value than what we have seen in the NASCAR Heat franchise prior. So I certainly believe that the door is opened for a greater variety, and we'll get a lot stronger than that over time. It's one of the key reasons for changing the framework in NASCAR Next. We own all of this technology. We know how it operates. and we can react to the market and the interests and demands of players and inject different types of DLC into NASCAR Next and the games of tomorrow.
spk07: Okay, that's helpful and good color. So thank you for that. And then the other one I just wanted to ask, Dimitri, is you're getting some good momentum in terms of esports viewership and events, and I just wonder if you can share a little bit regarding how you're thinking about the potential for eventually moving from sponsorship revenue to streaming rights? Is that something that is becoming a little more sort of in the near term as you're thinking about the evolution of the strategy for your esports business?
spk04: So there's a couple of things there, Mike. So first of all, we're super excited with the acquisition of Bar Factor 2 because that enables us an additional revenue stream in the esports sector as we create these bespoke opportunities with the rights holder. I'll give you one example. We have created eSport activities with Formula E last year, but we were only able to create a moderate amount of revenue from such because we did not have a dedicated game title, which will allow us to collect a game type of revenue stream. Now, with our Factor 2 platform being fully ours and under our control, we're able to create these events and look for more revenue streams than just sponsorship such as these esports as a service since it's now more of a platform play and we could derive game related revenue but to your other point absolutely as we continue to compound audience and we see as we go from season on season for example in our nascar esports activities We have grown our audience about fourfold from season one to season two, and we're here to engage on season three later this year. And similar results have been monitored as we did with the Lamont eSport. So as we continue to increase this overall viewership and aggregate these viewership between the different eSports series, that compounding effect becomes an attractable offering for a media rights opportunity. So, yes, we do believe that that is going to be something that we'll be able to derive opportunity sooner than we were perhaps discussing in the beginning of the year, but it's not something we are accounting for. Right now, we're just super excited about the fact that we could derive game revenue from these esport opportunities that we do not have a dedicated game title for yet.
spk07: Super. Okay, thanks so much. I'll go back in the queue. Thanks, guys.
spk03: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from the line of Mike Hickey with the Benchmark Company. You may proceed with your question.
spk06: Hey, Dimitri, John, Stephen. Congrats on the quarter, guys. Excited to hear the continued development of NASCAR Next. John, I guess just curious on 2Q, if you're comfortable with consensus. I think last quarter you gave a view not just on a year, but on the full quarter. So I'm not sure if you're going to give any more visibility on your current quarter or your comfort level consensus.
spk02: We're still comfortable with the Q2 as it's out there.
spk06: Nice. Good. Also, a lot of deals here. Obviously, your headcount's increasing. Curious what your total developer headcount is today after doing all these deals. Where do you think it will trend? And then broadly speaking, just I guess philosophically to meet you, how you think about the importance of culture, maintaining the culture, growing the culture within your development studios that are obviously spread out globally now, and how you think about managing the issues like crunch that are associated with sort of, you know, pretty ambitious games. Thanks, guys.
spk04: Thanks, Mike, for those questions. So we are, as of 3-31, at 122 headcount. Majority of that, to be more specific, 84 of that is our development resource, which is exciting because that nearly increased from our last quarter reported numbers our development capability by almost 30%. And we continue to organically attract high-level talent that are super passionate about creating and publishing racing games. And that helps speak to the culture, which I'll definitely give it to Stephen to touch on. And the fact that we're able to open more global presence allows us to have this growth in geographical areas where such high-level talent exists, being that we're now such a wide footprint. So no longer do we have to look in sort of restricted or smaller geographical areas like U.S., U.K., and let's say Eastern Europe, as we had present before, but now with Australia, that opens up another opportunity, and this talent is surfacing all across the globe. So we're already continuing to not only organically attract, but we're also excited about teams like DigitalTail coming in and the capabilities that they bring, especially in a highly growth area like mobile platform.
spk00: So, yes, I think Dimitri put it very well. I mean, mentioning that people are super passionate, that goes a very long way to impacting and reducing the need for crunch. People are putting their hearts and souls into these products because it's something that they enjoy to do. This is a hobby as much as their work for many of these specialists that we have engaged and employed around the world. And it's been incredibly exciting to watch the growth of NASCAR Next as the team has been built, as the effort has been put into the product. I think crunch, which is an industry-wide challenge for many large operations in this day and age I think is mitigated through very careful planning and the culture of the company which is one giant family that operates across multiple studios around the world. There are many new ideas and processes that are applied to most sport games outlook and when we talk about growing the development headcount people automatically imagine that we are hiring countless engineers to work on these projects but an important part of the headcount increase is the production team, the planning team that organize not only NASCAR Next but the other products like Le Mans, British Touring Car that are already in development. And appropriate planning does go a very long way to mitigating crunch. So I believe that we have the right culture, the right planning in place and the right headcount to comfortably manage the projects of today and tomorrow. And I'm very positive about that.
spk06: Nice. Thank you. Thank you. You also mentioned, Dimitri, in your prepared comments that you continue to seek additional racing IP. And it looks like you brought in Gerard to help you. And, of course, you have the Motorsport Network as well. But I'm just curious if you could double-click on, you know, how aggressive you'll be for additional IP. You already got a bunch of it. And then last question, when we look at the fiscal year of 22, can you give us any visibility on the amount of games and if we should expect a second game from a major racing IP. Thanks, guys.
spk04: Thanks, Mike. So as you rightfully noted and as we set out on our vision, from the very beginning of time, even pre-IPO, right, is we do want to hold a portfolio of racing games that are wide. as possible for a racing fan, regardless of where they are in the global footprint. That means we would have a portfolio that carries multiple racing disciplines. And that's why we're so excited with car craft, for example, adding an additional racing discipline. And as I was saying in my remarks is that we can't wait to pair that with one of the world class IPs. So you will see some organic growth coming from us taking these types of disciplines, pairing with IP as we continue to seek others. And a platform such as rFactor, too, not only gives us a leap forward with technological advances and the quality standards that our products carry, but also gives confidence to those IP holders of the level of quality product we're able to bring with essentially their name on it. So that does continue to help us. Gerard Ngu is somebody that helps us deliver that message as he understands deeply the industry as he has been there and developed similar global footprint with World Endurance Championship. And he was integral in our 24-hour Le Mans virtual event as well. And as we continue to talk to other race series, these IP holders, he helps us translate their needs into what we could create from our products and esport experiences. So we're super excited. And with additional access that Motorsport Network provides, sort of validation and audience access, we couldn't be more excited that the opportunity to scale our portfolio of racing games to a most notable one to cast sort of the widest possible net to any racing fan around the world is much nearer than it was before for us.
spk01: Nice.
spk06: Did you say what your 22 pipeline would look like if you'd have another major racing IP in that time period? Yes.
spk04: So on 2022, as we set out when we announced our British Touring Car Championship license that were obtained last year, that is the game that is slated to come out. So we look to create an e-sport opportunity with British Touring Car Championship later this year and a product would release in 2022. So everything is still on schedule. And as Stephen has reported in his remarks, we're super excited to have completed all the track's laser scans, which obviously adds sort of an insight of how detailed we approach each one of these race series and look forward to launching it next year on time. Nice.
spk06: Maybe one last one from you guys. Maybe on the last band, it's all dropped. When you look at CART, I guess when you add Mario to CART, you have arguably the biggest racing game in the world. And so when you look at your CART-based game tech, is there any sort of novel licensing opportunities you think you could add into the mix to expand the market potential of that game?
spk04: Thank you for highlighting the fact that karting is definitely very fun and accessible and understood across multiple generations. You might have heard me speak before when I highlight the fact that when kids, for example, go to theme parks, karting is one of those attractions that presents there. And that is because it's fun. And we believe those are some of the characteristics of the example like Mario Kart, that translate into this virtual world. We are evaluating multiple opportunities of the type of IP we would pair Cardcraft with. And we want to make sure that once we do, we continue to deliver the fun aspect of carding across the world, but also address another captive fan base as we like to do with each one of our licensed games. That captive fan base allows us to have a foundation audience that then helps us spread sort of the excitement around these products that we launch. So we look forward to pairing it with the right IP and sort of starting that snowball effect in carding as well, just as we have done with NASCAR and set out to do with other franchises in our portfolio.
spk06: That's great, guys. Thank you. Best of luck. Thank you.
spk03: Our next question comes from the line of Franco Granetta with DA Davidson. You may proceed with your question.
spk05: Yeah, good afternoon, everyone. Thanks for taking my questions. I've got two on mobile gaming. So you've been talking about creating new games in mobile that span different categories. You mentioned just Match 3. Do you think the current team is large enough to look to expand this portfolio?
spk04: Thank you, Franco, for the question. So short answer is yes, but we continue to expand that team capability. For example, we do have one mobile product in market today, that's NASCAR Heat Mobile, and that has its mobile team attached to it. However, we continue to attract high-level talent, high-level I mean by experience, And with this anticipated acquisition of Digital Tails, that expands that team not just organically, but through such sort of AccuHire, if you may. So once we pair our current team with Digital Tails, we do believe we would have capabilities to expand beyond NASCAR franchise. And we're happy that Digital Tails actually brings an additional racing discipline alongside with their mobile experience and capabilities. So it's another license and another captive fan base that we could expand and expand upon. But to your point of mobile development capabilities, we continue to grow that just as similarly as we have done for the console and PC side, which we're now able to expand from sort of a single franchise of NASCAR into multiple franchises. That's why you're able to see our progress in BTCC and others that are no pipeline.
spk05: Yeah, sorry enough. Thank you for the color. And then I guess on the similar line of questioning, obviously mobile market is, you know, you could call it, it's quite different from, you know, the console PC market. And, you know, it's, it could be affected by other headwinds, right? Right now we're seeing everyone talking about the effect that IDFA is having on the mobile gaming industry and So, you know, as you look at, you know, the different dynamics, do you think you're going to have a larger emphasis as you kind of build out that portfolio in terms of as it relates to M&A, really? Or I guess how much time are you spending looking at M&A opportunities for this space? I know you talked about some macro hires there.
spk04: So we are currently focused on launching NASCAR next. And we currently have two other exclusive licenses, the BTCC and the Lamont, that would go on alongside that, that we're developing console and PC products. That historically has been the core revenue driver for us. So we want to make sure that we expand that opportunity as much as possible. Mobile historically has been a smaller portion of our overall revenue. However, that proves to be the largest growth sector. So to answer your question in a slightly different way, our focus continues to be console and PC on these core franchises that we currently have, which means that we won't be spending as much time thinking about mobile M&A opportunities as we are on how to perfect and better our console and PC products just so that we're able to constantly create an exciting pipeline of content. And like Steven touched on, and I believe my great questions was something we could evolve into more of a live ops model, right or games as a service. So that would be a growth opportunity in more of a focus more so than seeking out additional mobile studios. But Let me not discount. Should the opportunity present itself and it makes sense and it expands our racing disciplines perhaps further, we will definitely explore such.
spk01: Good. Thanks, Mr. . Thank you.
spk03: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. One moment while we poll for questions.
spk01: Ladies and gentlemen, we have reached the end of today's question and answer session.
spk03: I would like to turn this call back over to Mr. Dimitri Kosko for closing remarks.
spk04: One more time, thank you everyone for joining us today. We're very excited about the rest of the year and launching the most anticipated NASCAR game title yet. in the history of our company and in addition to the several other priorities we have across our iconic ip esports and traction platform so thank you again for joining us this concludes today's conference you may disconnect your lines at this time thank you for your participation enjoy the rest of your evening
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