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spk06: Welcome to today's Motorsports Games Incorporated Third Quarter 2021 Earnings Call. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session. I'll now turn the call over to your host, Ashley DeSimone of ICR. You may begin.
spk07: Thank you, Operator. On today's call are Dimitri Kosko, Motorsport Games Executive Chairman and Chief Executive Officer, Stephen Hood, President, and John Liu, Chief Financial Officer. By now, everyone should have access to the company's third quarter earnings press release filed today after market close. 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 securities 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. Except as required by law, the company undertakes no obligation to update any forward-looking statements made on this call or to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to today's press release and the company's filings with the SEC including the company's most recent annual report on Form 10-K and the company's quarterly report on Form 10-Q for the period ended September 30, 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 certain non-GAAP financial measures, such as adjusted EBITDA, as we discuss the third quarter 2021 financial results. You will find a reconciliation of these non-GAAP measures to our actual GAAP results, as well as other related disclosures in the press release issued earlier today. And now I'd like to turn the call over to Dimitri Koskov, Chief Executive Officer of Motorsport Games. Dimitri?
spk13: Thank you, and hello, everyone. My name is Dimitri Koskov, Executive Chairman and Chief Executive Officer of Motorsport Games. It's a pleasure to discuss our third quarter results with you today, along with Stephen Hood, our president, and John Yoo, our chief financial officer. Please take a look at our Q3 highlights video and Q3 earnings slides posted on the landing page of our IR website. We'll share some visuals from our just-released NASCAR 21 Ignition Game and a glimpse of the first round of 2021-2022 Le Mans Virtual Series eSport event. We hope that these quarterly videos and now our quarterly earnings slide continue to give you a sense of Motorsport Games' progress towards our vision to become the household brand name for racing games and esports. I want to say thank you to our new and existing stockholders and racing fans who have been patiently waiting for the release of our new NASCAR 21 title. The wait is over. We choose to pull forward our normally scheduled quality earnings conference call to get you not only our Q3 results, but also the information related to the recent launch of our NASCAR 21 title. I'm excited and humbled to say that NASCAR 21 Ignition was launched on October 28th. This is a significant milestone for our young company, particularly because this is the first title that was built on our proprietary Motorsport Games internal development platform, leveraging Unreal Engine and our factory technologies. There has been a lot of excitement around NASCAR 21 Ignition. During the pre-release period, we experienced technical glitches. This is common whenever a new game is launched on a new engine, and I'm pleased to report that due to the flexibility of our new Motorsport Games engine, and the hard work of the internal development team, we were able to release patch updates very quickly. In fact, for the PlayStation and PC platform, we were able to get the patch out to users early in the morning of the official October 28th release in the U.S. and the Xbox users within 45 hours after the U.S. release, just ahead of the NASCAR Martinsville race weekend. where the game, in fact, was featured as the eNASCAR Village for fans to play on-site. We thank our community for your patience, understanding, and ongoing support. The work is not over, though, and it is our commitment to continue to update the game with patches as we learn more and implement feedback we are receiving. The game is the newest installment in the officially licensed NASCAR gaming franchise and is available physically or digitally for Sony PlayStation 4, Microsoft Xbox One, and PC through the Steam Store. The console versions come with a free upgrade pack for the Sony PlayStation 5 and Microsoft Xbox Series X app, with free downloadable upgrades available for those users. This year's game comes complete with new updates and additions built upon the foundations of the previous iteration of our NASCAR title. For example, we developed a brand new paint booth offering unparalleled level of customization to create NASCAR paint schemes complete with iconic race numbers, which we're already seeing fans praising while creating some amazing personalized paint schemes. When we first announced the pre-orders of NASCAR 21 Ignition on August 12, we immediately saw great demand in pre-orders, which carried through all the way through the launch date. Overall, pre-order revenue, including estimates for the launch date, were approximately 18% higher when compared to NASCAR E5 for the same period. This included one of our largest selling orders to date as much for games from GameStop, Walmart, Amazon, Best Buy, and more. Digital pre-order part of the revenue significantly increased year-over-year to approximately 157% when compared to NASCAR T5. We believe that our digital revenue would generally have a higher gross margin relative to the packaged goods will continue to increase during the remainder before 2021. Launch date was a very momentous occasion for us. It is clear to us how passionate our fans are about NASCAR 21 admission and racing games in general. We share that passion and have been capturing community feedback. We're actively working on addressing this feedback received from our community and hope to have our next We've got patches live soon that address quality of life and new feature requests. We're pleased to see all the passionate feedback pouring in across all our social channels. In particular, we stay transparent with our community and partners, and most importantly, showcase that we deliver on our promises and that we truly care. Shortly after the launch and implementation of the patches for our platforms, we saw positive community sentiment and appreciation. We're building our games for the future, and we believe it's important for us to invest in our community. The launch of NASCAR 21 Ignition is an example of a primary growth strategy, which is to create great racing games that we could scale by expanding our portfolio of brands into multiple franchises with multiple games each, paired with a dedicated esport offerings. Starting with our NASCAR partnership, we have officially announced we will be launching the first-ever NASCAR title for Nintendo Switch platform. This is the first time we're expanding to the Nintendo Switch and are excited to invite a whole new audience of gamers and fans. Our fans have long waited for the Nintendo Switch version of NASCAR, and we're excited to give them a portable version of such games. NASCAR Heat Ultimate Edition Plus for Nintendo Switch It's targeted to launch on November 19th with pre-orders currently live across retail and digital stores. Sell-in orders for this product have already exceeded our initial internal projections and will be ready to hit the shelves in time for this holiday season. NASCAR Seek Ultimate Edition Plus on Nintendo Switch includes everything found in NASCAR Seek 5 Ultimate Edition, the console, plus the 2021 NASCAR Cup Series cars, rosters, and primary paint teams. The previous 2020 official teams, drivers, cars, and schedules from the three NASCAR National Series and Extreme Third Tour races featuring 39 authentic tracks remain in this game as well. Further feature content includes 2020 throwback and playoff paint teams. and Tony Stewart as a playable character cross-form. We continue to make progress on development of our BTTC, Le Mans, and now IndyCar games, leveraging as much innovation from Motorsport Games Engine as possible and building on top of the learning and evolution of NASCAR 21 Ignition. Additionally, we continue to evolve our Early Access Car Craft game by releasing more upgrades and content while bringing the car factor closer to a full release for PC, which we expect will be before the end of this year. We also continue to integrate our R Factor 2 platform into our Motorsport Games Engine and add additional content as well as use R Factor 2 to run our official eSport events. Let's dive a little bit more into the details about our eSport initiatives. We continue to value the growing importance of eSports to our business, which has funneled new users across our product base and driven prior fan engagement and new potential revenue stream from sponsorships. We dedicate ourselves to being the leading player in the Wacom eSports team, and we believe that our combination of world-class events around unmatched iconic IP and effective user engagement with our fans will help us get there. We have officially launched the extended 2021-2022 Le Mans Virtual Series in the first quarter of 2021. The first two rounds have been completed with entertaining thrills for the fans, and we are anticipating a spectacular grand finale event for the 24-hour Le Mans Virtual as a live and televised event from the 2022 Autosport International Show on January 15th to 15th in 2022. We're incredibly proud of the level of the participants from famous drivers, world-class teams, manufacturers, and partners. We welcome Frostmaster as our official hardware partner, Rolex as our official timepiece partner, Polo Energy as our official energy partner, Goodyear as our official tire partner, Lego Technics as our official engineering partner, and Algorand as our official blockchain partner for this 2021-2022 Lamont virtual series. Official events like this continue to bring awareness to our product offering, such as R-Factor 2 and the rest of the motorsport games. This year, we plan to announce more official annual esport events and leverage our community platform, Traction.gg, as it continues to grow in audience and engagement. We continue to focus on developing and bringing capabilities to our community through Traction that will allow fans and friends to compete against each other, rank amongst others, and develop their virtual racing careers. Lastly, I would like to formally welcome Peter Moore to our Board of Directors. Peter is no stranger to the gaming industry, and brings us 30 years of gaming, board entertainment, and consumer industry experience. Formerly COO of Electronic Arts and a head of EA Sports, and currently he serves as the Senior Vice President and the General Manager of Sports and Live Entertainment at Unity Technologies. We're excited to have him on board to give us the opportunity to leverage his career experience as we continue to grow from a single-franchise company to a multi-franchise company in a racing game shop.
spk11: Now, Steven is going to say a few additional words about our product development. Thank you.
spk10: Thank you, Dimitri, and hello, everyone.
spk05: My name is Steven Hood, and I am the president of Motorsport Games. We are happy to bring NASCAR 21 Edition to an expectant fan base, and I would like to echo Dimitri's comments. While we're incredibly proud of the work by the development team, we acknowledge that there remain certain bugs that must be fixed. The initial day one and second patches have already been incorporated into the game, delivering over 300 improvements across all areas of the product. And our teams are currently working on patch three that will address other outstanding issues. Again, I'd like to give a big thank you to our development team for their continued efforts on NASCAR 21 ignition. As we see the rollout for NASCAR 21 Ignition and NASCAR Heat Ultimate Edition Plus for Nintendo Switch, I would like to give an update on the continued expansion of our capabilities and how our development teams are scaling to handle multiple franchises. Throughout the development process, we have worked hard to scale our capabilities through our acquisitions of Studio 397 and 704 games, as well as the core team behind the ever-impressive CarCraft product. These acquisitions give us strength in technologies and expertise that we will further leverage to elevate our own scalable development platform, the engine room of our product and development efforts. The experience of delivering our own product from start to finish is a major highlight for our growing business, building an all-new NASCAR gaming franchise with an all-new team, tools and technologies, it's an important step forward and one that proves we can deliver our own products. Next, we plan to improve our pipeline further by integrating the source code of our Factor 2. Integration of the preferred components into the Unreal Engine and the MSGM development platform under the guidance of our now complete technical management team will undoubtedly improve product stability. Furthermore, we will capitalize on the mature tool set offered by CartCraft, a native Unreal Engine product, to harness a more efficient product development pipeline, which will serve to level up our output going forwards. These are the familiar growth steps all software developers tread. The difference is that we're doing it at a much faster rate than typically found within organic game development. We are progressing along our roadmap as expected. As our tools and technologies evolve, so must our QA and testing team. Scaling from one project to multiple franchises requires additional expertise, and as guardians of product stability and quality, it makes sense to ensure this department has the resources necessary to play a major part in improving our output going forwards. Accommodating the growth of products is crucial to our ability to increase the number of product releases while simultaneously increasing product quality. With increasingly complex software products, user-generated content, integrated services, and the creation of a motorsport-focused ecosystem, we're going to be testing at a much larger scale than ever before. We are laser-focused on where we are going, and I believe more than ever that we have the right people, technologies, and tools to position ourselves at the front of the pack.
spk10: Now, let me hand over to John Hughes to give a review of our third quarter financial results.
spk02: Thank you, Stephen. My name is John Hughes, and I'm Chief Financial Officer of Motorsport Games. I'd like to welcome you to the third quarter earnings call, and I would now like to share a financial overview for the third quarter and year-to-date September 30th. Revenues were $2.1 million for the third quarter 2021 compared to $9 million in the prior year period. The gap between comparisons is primarily attributable to releasing NASCAR Heat 5 in the third quarter of 2020 versus releasing NASCAR Ignition 21 in the fourth quarter of 21. The revenues from NASCAR 21 ignition gain sales will primarily be recognized in the fourth quarter of 2021 and into the first part of 2022. So this timing difference will come up again and again as we go through this conversation. Net loss and net loss per share of Class A common stock were $6.6 million. Loss and $1.2 million gain, respectively, for the three months ended September 30th, 2021 and 2020. As mentioned, the quarterly comparisons are significantly affected considering the different release dates of NASCAR E5 during Q3 2020 versus NASCAR 21 ignition that was released in Q4 2021. Big picture for the third quarter. We exceeded analysts' consensus expectations on revenues and gross margin for the third quarter of 2021. While our adjusted EBITDA loss was higher than analysts expected, And that was primarily due to higher development expenses, due to more products in the pipeline, and to a lesser extent, some higher marketing costs. Net loss income was a loss of $6.7 million and income of $2.6 million for the three months ended September 30, 2021 and 2020, respectively, due to the timing of game releases. Adjusted EBITDA is one of our key performance measures given our IPO and acquisition activities during 2021, and adjusted EBITDA takes that out. Primarily due to the timing of the NASCAR game release, our adjusted EBITDA loss was $5.5 million for the three-month end of September 30th, 2021, as compared to an adjusted EBITDA gain of $3 million for the three-month end of September 30th, 2020. For the nine months ended September 30th, 2021 and 2020, total revenues were $6.9 million and $16.1 million, respectively. Again, you're seeing a $9.2 million decrease in revenues driven by the timing of our NASCAR game release, as I discussed above. For the nine months ended September 30th, 2021, revenues for our gaming segment decreased by $9.4 million, or 57%. to $6.7 million from $15.8 million for the nine months ended September 30, 2020. Net loss or income attributable to Motorsport Games Inc. was a loss of $26.2 million and income of $0.9 million respectively for the nine months ended September 30, 2021 and 2020. Adjusted EBITDA loss was $12 million for the nine months ended September 30, 2021 as compared to an adjusted EBIT gain of $3.3 million for the nine months ended September 30, 2020. The primary reason for the $15.3 million change was $12.4 million of IPO-related expenses and non-cash stock-based compensation resulting from our IPO in January. We also had an additional $2.1 million of acquisition-related expenses during the nine months ended September 30th, 2021 that did not exist in 2020. Looking ahead, as we move through the fourth quarter of 2021, expectations for full-year revenue remain at $20.5 million, with an updated adjusted EBITDA loss of $12 million. We are pleased to have gained the IndyCar license during the third quarter of 2021, And this will continue to increase our development costs as we work toward a 2023 release of new IndyCar game and other planned product releases. Thank you for joining us today. And now let's go to questions. Operator?
spk06: If you would like to ask a question, please press star 1 on your telephone keypad now. You will be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you would like to ask a question, please press star one on your phone now.
spk01: Our first question comes from Michael Graham from Canaccord. Please set your question.
spk04: Thank you and good evening, guys, and congrats on the big launch. It's an exciting time. Really happy to see the game get out there and it's also great to see you know, that you had such good momentum on pre-orders, uh, you know, up 18% versus your last game. It's pretty, pretty, pretty encouraging. I have a couple of questions about the game. One is, you know, there were some bugs, as you mentioned, and I'm just wondering if you saw much returns activity, um, and just maybe you could comment in general about sort of your overall level of exposure to returns at all. Um, and then I wanted to ask Steven, you know, maybe make a comment on, um, now that you have, uh, this first game out on the new engine, how much heavy lifting is sort of behind you at this point when it comes to releasing future games? And I'm just wondering if your experience with Ignition has led to any evaluation of sort of the future launch cadence and how you're thinking about that. And then I just have one more after that. Thanks.
spk12: Thank you, Mike, for that. I really appreciate it. It's Dimitri. I'll address the first question and then pass it on to Stephen. So as far as refunds and those are concerned, platforms like Steam, PlayStation, Xbox, they do offer different methods of refunds. And estimated revenue results for the pre-orders and launch date that we discussed on the call actually includes those refunds accounted for such periods. So without a doubt, there's some impact on our revenue. How much specifically for the quarter will be hard to estimate at this moment. But from what we're seeing so far, the buildup demand for the game is currently still putting us ahead of our last NASCAR Heat 5 release. And those are the numbers that we were able to bring to you guys as soon as those estimates became available.
spk05: Thanks, Dimitri. Hi, Michael. Good question. When we're talking about how much of the heavy lifting, as you put it, is behind us, it's a very good question. So I've always maintained, and I still do, that ultimately there's a significant difference in my mind between the opening self-created product in NASCAR ignition and our subsequent releases. Future releases will be built on top of not only the learnings, but the technology provided in Ignition. And let's not forget, Ignition is now a live product. As of last week, it's in the hands of gamers. A live product that's already been updated. We've already had over 300 fixes and improvements pushed into the live product, which is just over a week ago. And breaking ground with that kind of product, which was built from the ground up, has gone through multiple iterations of testing, both internally and with first party, the likes of Microsoft and Sony, that's now in the hands of thousands and thousands of gamers. I think there's a night and day difference between really breaking the seal with your first product, which is a huge challenge, and we're very proud of reaching this milestone, and where we go from here. Because the clock doesn't start over again. Nothing gets reset to zero. It's a continuation. So we're actually standing on the shoulders of ignition for the future projects. And the way that I'd probably describe it is you can kind of expect a hockey stick trajectory towards product improvement. So subsequent NASCAR products will be better off over the next two to three years. All future product releases are better. And I would suggest that ultimately we can expect probably significant improvements out of the gate product stability and quality because of what we've attained thus far is my brief summary.
spk04: Yeah, that's great. It's very helpful. My next quick one before I go back in the queue, guys, is just on the guidance for the full year, which implies around $13.6 or $7 million for Q4. Just make a high-level comment on, you know, within that expectation, how much are you expecting to get out of eSports and mobile, you know, and sort of like any high-level comments about the weighting between, you know, your console games and those other two revenue streams?
spk12: Sure, Michael. So you're right to obviously assess the 13.6. We are expecting and projecting internally that about two-thirds of that will be related to the NASCAR 21 ignition. The rest coming from the NASCAR Heat Ultimate Plus for Switch, which we're super excited about. And our esports and mobile will contribute to this overall number, but the main driver of this quarter revenue is obviously the release of the game.
spk11: Okay. Thanks a lot, and congrats again. Thank you.
spk01: Our next question comes from Franco Grande from DA Davidson. Please state your question.
spk00: Hi, everyone. I echo the congratulations on the launch. It's good to see the game's finally out there and making waves in the news cycle. And again, thanks for letting me ask you a couple questions here. So I guess for the next several patches for NASCAR 21, how do you feel or how do you think about the balance between ironing some of the current issues in the game versus potentially adding some features that some of the fan base might think that are missing.
spk05: Hi, Franco. It's Stephen. Yeah, good question. I think the landscape for games, as you probably well know, is a complex one. When we release these software products, they are inherently very complicated. And they cover many areas of kind of gameplay and entertainment, product stability, work for particular machines in particular fashions. And it's super, super important for us in order to deliver a stable experience that enables everybody to play wherever they're playing, you know, on a PlayStation, on an Xbox, on a PC, whatever their home internet setup is. It gets very complicated once you leave the four walls of not just developers and publishers, but first parties. And the most important thing for us is to really ensure that the entertainment experience is as required by gamers today. There's a certain standard where they're expecting to invest in something and play it routinely versus how many features that we can add in the future. People in our minds don't so much care about the features that will be added in the future. They want stability and enjoyment in the product that they have today. And as soon as they attain that, they start clamoring for, well, this game is great, and I wish you could add X, Y, Z. And that will be what we consider to be the second phase of NASCAR Ignition's life cycle. Right now, it's ensuring everything is as great as it can be. There's still some more work to be done there. And then we shift focus to What features can we add in order to improve the product further? And it's a long-term proposition and probably something that Dimitri could touch on as well.
spk12: Yeah, thanks, Stephen. And the only thing I'd like to add, which echoes what Stephen was saying, is that we have a live product out there. We have a very vocal and passionate community, which we're super proud of, that's actually helping us shape of what type of things go into improvement and evolution of ignition, of 21 ignition, and what type of things make it into what the future NASCAR 22 title would be. As we know, NASCAR next year is upgrading to next-gen cars, which is a very exciting content piece. So at the very minimum, there's going to be a big differentiation in terms of the type of content vehicles, et cetera, that are in the next version. But having the product at the hands of many, many fans now, it is helping to influence and shape and help us make better decisions. It is what our community is really desiring between the two titles. And NASCAR 22 is already in development, as you would expect.
spk00: I appreciate it. Thank you so much for the caller here. I guess you know that you have a game between now and the end of the year in the Switch title, but I wanted to really touch a little bit on the mobile opportunity. I may have missed it, but I'm not sure if you mentioned any updates on the soft launch of the Match 3 game for mobile, and then if you could update me on where your initiative around NASCAR mobile lies today.
spk05: Hi Franco, Stephen again. Yeah, I can probably take that. I think touching on the mobile piece, mobile I think we've always maintained is a key part of the kind of future product portfolio of motorsport games. It makes sense and in my mind it's kind of unsurprising given... the opportunity that we have to leverage the assets that we put into the console and PC products. The technology trickle and the reuse of assets is an advantage for us and actually, The team that we have in mobile, you know, demonstrated some great talent in putting together the NASCAR Switch product that we talk about. We're super excited about bringing that to the Nintendo platform. But mobile is their core priority. And we've already seen that they've been updating the existing Heat Mobile title, the NASCAR Heat Mobile game, with another update actually expected this month. So we're keeping that live and keep pushing that. And we're also looking to kind of... soft launch NASCAR mobile match three title early next year in Q1 2022. We continue to review plans around the British touring car and Indy car franchises that we have now on board, whether or not that's suitable for mobile. We've got some ambitious plans around ultimate team concepts, probably related to the NASCAR franchise because we think there's a great opportunity there. We could do very well. But the mobile market is quite mature these days. These aren't fire and forget products, so we can't overcommit to these. We need to get the right ingredients and setup in place so that once we're operating successfully, probably on the NASCAR side, we can more readily kind of scale the output to match the opportunity found with these other franchises. So we'll get it right with NASCAR, and then I think we can scale further.
spk00: Right, no, thank you for that. And I certainly imagine that as you start adding IP to your portfolio, it'd be easier to put out titles around this IP, and it would just not be a NASCAR experience. And then one very last one related to this. Are you planning on sticking with Unity for the next mobile titles, or are you making the switch to Unreal for whatever is not in the pipeline yet?
spk05: So the heat mobile title remains on Unity. There's no need for us to kind of reinvent the wheel there. You don't want to do that during the lifetime of a product. But what we do plan to do, where appropriate, is try to align the technologies. I mean, we want to actually get away from having to worry about the technology. Our mission is really to build the entertainment experiences and reach as many people as possible. The end user never really cares about the technology. We do, and I do as a developer, but really I'd like to simplify the whole thing. And that's one of the things that we've been working incredibly hard on for the last couple of years so that we can align the tech across the different products and opportunities that we have so that we have one very experienced team that has now shipped a product in NASCAR Ignition that's working together with our partners to deliver a new title to the NASCAR, to the Nintendo Switch platform. And if we can start to align these products over time with the same technology base, probably moving away from Unity where it makes sense to use Unreal, which we're spearheading NASCAR Ignition and other titles with, that would make our lives that much easier and would enable us to probably be more efficient and effective in the future. But we'll do it where it makes sense. And right now, we are split somewhat on existing legacy mobile titles using Unity. But the future for us is firmly centered around Unreal.
spk00: Right. I appreciate it. Extremely helpful. And congrats again.
spk01: Our next question comes from Mike Hickey from Benchmark Company. Please state your question.
spk03: Hey, Dimitri, John, Steven, I hope you guys are good. Congrats on your launch. Just a couple questions. I'm curious on the patches. It sounds like you've had a few and have been successful here in cleaning up some of the bugs. Have you noticed sort of an inflection and player response? Obviously, at launch, I think everyone was pretty critical of the bugs, but now that you've cleaned up a lot, are you starting to see a shift?
spk12: uh in uh you know your players do the game hi mike uh thanks for the question absolutely is a short answer uh we are monitoring uh the community sentiment very very closely as you would expect us to uh we have uh as expected a very robust support ticket to make sure that we're getting back to people and we did see numbers of those support tickets coming in drop significantly after the patch so-called 1.2.1 went out that addressed a lot of the stability things and what steven was mentioning i mean combined over 300 different somewhere which even could be considered as feature sets so because of that Community sentiment change to majority positive. And actually, we have started to see appreciation. and started to see some folks in the community defending those that might have a feel, Will, about the pre-release version of the game to start to defend us and say, no, no, check out the latest patch. It addressed the concerns you might have. So it's great to see the passion of the community starting to get behind us and starting to recognize the fact that we really truly do care of not just delivering them
spk03: The product that they expect but helping that a little so community sentiment has starting to look old Dimitri, are you looking to or have you extended your work with? Influencers or are you looking to maybe adjust your marketing strategy? Obviously you still got the holiday Window open here. So it seems like there's still a huge opportunity for you to get yourself. So are you still working with? actively with influencers to get them set on that process and how the game is performing better?
spk12: Absolutely. Our main part of that is to make sure that the influencer network that we are tapping into are aware of the patch release and they are installing and able to do updated content and so on. And we've been successful at that. There's definitely some that have been vocal in the beginning when they were in a pre-release phase, were able to even unveil the patch live on YouTube and Facebook and others. And it was great to see that reaction. So, yes, absolutely, we continue to inform the influences of everything that's going on. And not just them, just to the community in general. We want the fans to know that we're putting these things out. More importantly, we're hearing them and we're addressing some of their desires. So not just stability things, but feature sets and, you know, some things that hardcore NASCAR fans really want. We want them to know that one, we're either working on it or two, it's just been released. So for us, it's influencers and community all together.
spk03: Nice. I think you touched on this, Dimitri, but your QA process, it sounds like you're going to make some adjustments. How much of this is sort of internal versus external resources on sort of the QA process? It looks like a lot of this issue has been resolved really quickly, so I'm just sort of curious how they sort of slip through the cracks, I guess, at launch? And then, you know, broadly speaking, outside of the bugs, you know, is there other areas where you can sort of look on quality? I think you touched on that as well. But I guess how do you sort of think about, you know, bridging the current experience, you know, where it's going to be in a month or so? How do you sort of bridge that quality level to, That's sort of 80-90 that you can see from up towards F1. Thank you, guys.
spk05: Hi, it's Stephen. I can probably take that one. Multiple questions. So my answer to that is it's... I mean, these days on such complex products, you do work with internal and external development QA partners, and I think you made reference earlier to wanting to expand that internal capability because as we increase the number of franchises and active products that we're working on, we'll need to increase those skill sets and headcount slightly. But we do have a worldwide team that works across the QA process testing the titles, And that is a process that doesn't just happen at the end of titles. It happens for the duration, and they do give a great steer. But the QA team are part of the overall team, part of the machine that launches a product. And I think most gamers today are very technically savvy. We live in a very connected world. and gamers certainly expect any products. Even software in motor vehicles these days are kind of being patched and updated and improved over time, and it's kind of part and parcel of the live environment that we live in because everything is interconnected. So it's easy for us to appreciate the feedback that we do get with NASCAR Ignition because gamers want the very best out of the gate, but I think they're also savvy enough to understand that, There are issues that people can even read about today, even those that they're not encountering themselves, that years ago would have gone largely unnoticed. So people feed off what the community is saying, and they feel like they want to be current. And I get that. Our QA teams, in my mind, have done a fantastic job trying to steer this product from creation through to delivery. And they have wonderful input into what we should be doing, but there is really no substitute for a product going live into the hands of thousands and thousands of gamers. that have their own kind of bespoke setups. I mean, we encountered a couple of issues where we just didn't have the setups available internally or with first parties to recreate the same kind of home network setups that people had at home. But we got the feedback from the community. And I think within hours, we start patching to fix these things. And that's what the community expects. So I don't think ultimately anybody expects perfection out the door. There are lots of products that come out with known issues that developers are working on. As soon as a product is submitted, the next phase of product lifecycle starts, which is product improvement. Fixing issues, adding features, as Dimitri has previously referenced, that's part and parcel of it. And I think the challenge is always one of balance. What is the state of the opening product versus the timeliness and frequency and the measure of improvement that you can roll into software once it's live and in the hands of players? And I think when it comes to improving that gap in the Metacritic, we are understandably, by all parties, including the community and gamers, directly compared to franchises that have a long history that you know in case Forza is on one particular format is really the showpiece for you know the Microsoft Xbox and that's great and that's a huge advantage for those guys and we don't have that we're going as wide as possible because we're making games for gamers and for racing fans and they can be on the PC they can be on the PlayStation of which there are now different formats on the Xbox of which there are different formats it makes it inherently more complex it's not a challenge that i want us to shy away from and breaking the seal as i've said earlier is is all important in terms of improving that product so as long as we're able to keep stepping forwards you know what we're living through right now and what we're improving with nascar ignition with the help of the community i think ultimately we will win the hearts and minds of games you know we are still the new kid on the block There is a great deal of promise in NASCAR ignition, and we're rapidly improving that product, and I think people will recognize that. And then each and every release, not just subsequent yearly sports releases, but the patches, will improve the product, and I think ultimately bridge that gap on the Metacritic score. And there's no reason why we can't keep driving that up and eventually compete against the titans that have the advantage of operating on just one platform.
spk11: Thank you, Steven. That's great. Good luck, guys. Thank you.
spk09: At this time, we have no further questions. Would you like to give any closing remarks?
spk12: Sure. Always will take the opportunity. Just want to thank again, first of all, the community. which ultimately are our fans and who we're going after and we're building and cultivating this. Secondly, obviously, our team, who's creating and showcasing this passion of creating amazing and great racing games. I really want to make a dent in the racing genre altogether. And third, and in no particular order, obviously, the folks that are on this call and others that are backing us, and believing in this vision, we are here for the long run. We are putting something together that is really special. We're proud of that foundation. We have released the title of our own, built from scratch, put together by the components that were not put together before, and we released it on the consoles for the masses. That is a foundation that we were looking for and something that gives us a great opportunity to build sort of skyscrapers on top of. That is not something we had before. I'm really excited and humbled by a team being able to achieve this and just really thankful for the community, our internal team, and the investment group of seeing this through and continuing watching our progress.
spk11: So thank you.
spk09: This concludes today's conference call. Thank you for attending.
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