Motorsport Games Inc.

Q4 2021 Earnings Conference Call

3/30/2022

spk05: Greetings and welcome to Motorsport Games Inc. Fourth Quarter and Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ashley DeSimone from ICR. Please go ahead.
spk00: Thank you, and welcome to Motorsport Games' fourth quarter and full year 2021 earnings conference call and webcast. On today's call are Dimitri Kosko, Motorsport Games Executive Chairman and CEO, and John New, Chief Financial Officer. By now, everyone should have access to the company's fourth quarter and full year 2021 earnings press release, filed today after the market closed. This is available on the Investor Relations website 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 U.S. 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 statement made on this call or to update or alter its forward-looking statement, 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 its most recent annual report on Form 10-K for the year ended December 31, 2021, for a detailed discussion of certain 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 fourth quarter and full year 2021 financial results. You will find a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures, as well as other related disclosures in the press release issued today. And now I'd like to turn the call over to Dimitri Kosko, Chief Executive Officer of Motorsport Games. Dimitri.
spk03: Thank you. And hello, everyone. I'd like to start today by recognizing our development team, some of whom are in Moscow in the midst of this unexcusable and challenging situation. Our hearts are with the people in Ukraine and all those impacted by the war. This is a deeply personal issue for me as I'm half Ukrainian myself. I have been in constant communication with our Moscow team, and they share a concern and profound desire for peace and security. While it is challenging working through the complexity of the war, here's what we have done over the past month to assure that we continue to build out our product roadmap with minimal disruption. First, we have always been able to switch to remote work if need be. During the pandemic, especially during the peak COVID outbreaks where we saw lockdowns and other hurdles, We manage to scale our development capabilities and temporary transition to remote work. We do not foresee any issues if we need to transition some of our team members to remote work again because we have the infrastructure and process in place to be able to remain flexible. Second, we have great partnership with various outsourced developers and studios. Especially over the last year, we have built great relationship with several outsourced studios who are assisting us with the new product development. These development studios consist of professional and highly experienced teams that work with many different leading gaming companies. We're currently having conversations with additional development studios and we'll be ready to engage them if necessary to assure our development pipeline does not experience significant delay. Third, we have offered our Moscow staff a possibility to relocate if they choose and able to do so. As I mentioned earlier, we have the advantage of being flexible Earlier this month, when I had the conversation with that team, given the opportunity to relocate to one of our other global offices, while we acknowledge and appreciate the complexity of such relocation and corresponding immigration implications, our offices in Netherlands, UK, Australia, and the U.S. would welcome those folks with open arms. Now let's move on to our product roadmap and development. Our goal remains to build a portfolio of top racing games across world-class IP and across all platforms. We have a strong list of IP, being the official video game license folder of NASCAR, IndyCar, ATCC, WEC, and 24-Hour Le Mans. This list of IP gives us an opportunity to build official racing games and enables us to provide these captivating experiences to our audiences all over the world. Here's an update on where we are today. On Ignition, since the launch of NASCAR 21 Ignition in October 2021, we have been working diligently to provide patches and updates for continuous improvements. So far, we have released eight updates and continue to provide quality of life improvements to the game. We continue striving to make sure that the next NASCAR release and all future products be bringing excitement and satisfying gaming experiences to our customers. We also launched our NASCAR gaming franchise on Nintendo Switch platform for the first time on November 19th, and we named it NASCAR Heat Ultimate Edition Plus. We're happy to report that this game has met our expectations and delivered smiles to our fans, while currently being rated at about 4.6 out of 5 stars on Amazon. On CarCraft, we're happy to report that in January of this year, we released a full version of CarCraft, our realistic karting simulation game. On Steam, we're currently holds a rating of a very positive with over 1,700 reviews. CardCraft is a game that has the potential to generate meaningful revenue for us in the future. Let's touch on our R-Factor 2 game and eSport platform. We have been working to implement one of the most requested features by fans, which is the new user interface update. We were able to release this ahead of our internal release schedule in January of this year. as monitored through user feedback on various social networks, has been welcomed and very much appreciated by the community. And we were also able to reorganize our content release schedule on R Factor 2 and plan to offer our fans more content on a predictable quarterly release schedule. Our gaming and simulation platforms, such as R Factor 2, continue to be recognized by the motorsport industry as one of the leading go-to products of choice for drivers, leagues, and partners. One new partner of ours is Kindred Concepts. Formula One partnered with Kindred to create an immersive, state-of-the-art F1 racing simulation experience made accessible to the mass audience. And Kindred has chosen our R-Factor 2 as a simulation platform to help empower their F1 racing simulation experience. With this partnership, we'll be virtually recreating some of the world-famous Formula One tracks, cars, and most recent liveries. powering the authentic F1 experience to the visitors. Another example that earlier this week, we announced that R-Factor 2 is now an official sim racing platform of Formula E. As we switch gears in 2022, our focus remains on improving and expanding our NASCAR gaming franchise as we work to expand our portfolio of overall games. In 2022, we plan to update our NASCAR game for major consoles and PC, bringing the excitement of the next generation cars from the 2022 NASCAR season to the masses, as well as launching our new 2022 version of a NASCAR game for Nintendo Switch platform. Additionally, we're currently still intent to soft launch our first hyper-casual mobile category game with our NASCAR Match 3 title sometime in 2022. The NASCAR gaming franchise continues to be an important foundation to our gaming franchises that we have under license, which include BTC, IndyCar, and Le Mans. And our learnings from NASCAR 21 Ignition launch are already being integrated into a motorsport games engine that we continue to evolve internally to assure that our next gaming franchises, together with NASCAR, continue to improve as we build on top of our previous releases. Just as we set out on our mission from the beginning, we continue to move towards the goal where we have multiple franchises in market with multiple games on multiple platforms. And we believe we are on target for 2023 to be that year for us. On to development. With the help of our experienced leadership team, I've taken full responsibility for overseeing our production studios and development teams. Additionally standardized global process and tools we have implemented will allow greater clarity for my decision-making role. We have also promoted technical experts to leadership positions. We believe that this new development management structure will greatly benefit our future game and product releases, as together with management, we will continue to monitor the progress of all our studios while we scale our capabilities. We also reorganize our QA processes and departments to assure further checkpoints and efficiency in locating future issues within our products, which we believe will improve our QA process for future game releases. We continue to strive towards improving our processes and technology, building off the NASCAR 21 ignition launch as we scale our company further to offer our customer multiple racing franchises across a variety of platforms. I would like to touch on our esports segment. We believe our investments related to this area are really starting to pay off. Continuing to leverage our R-Factor 2 platform and building on the momentum we achieved with esports in 2020, where we replaced certain motorsport events with their virtual counterparts due to the COVID-19 pandemic. In 2021, we turned our 24-hour Le Mans virtual hit into an annual series, together with great partners such as Rolex, Goodyear, Total Energy, Lego Technics, Algorand, and others that came along for the ride. And our 2021 into 2022 24-hour Le Mans virtual series has been enjoyed by more than 81 million fans across digital and linear channels. These are the type of official esports series we look to replicate with all of our partners, such as BPCC, IndyCar, NASCAR, and others. And as we release our dedicated games for each one of these raid series, We believe our eSport program will serve as a great marketing tool, showcasing exciting competitions our games bring at the highest level. We have already started to scale our eSport program with inaugural IndyCar eSport Pro Challenge, featuring almost the entire official IndyCar grid. Allow me to quickly add a reminder that our business is organized in three important pillars, games, eSports, and community. and we're constantly making progress on each of these pillars and look forward to showcasing this progress in our upcoming quarterly material. Lastly, I'd like to address our liquidity. Currently, we're debt-free, and our 2021 year-end balance sheet illustrates that we had approximately $17.8 million in available cash on hand. As of today, we have nearly $12 million of available cash on hand. While our 2021 Form 10-K indicates a doubt about our ability to continue as a going concern, we're currently evaluating new sources of funding with different options on the table so that we have the resources to reach our goals. A year ago, we made a conscious decision to acquire assets to help us launch more products quicker. We have successfully utilized these acquisitions to get us closer to a portfolio that is diversified and that we believe is capable of achieving profitable revenues. And I remain committed to seeing this through and getting to 2023 when we plan to have multiple franchises with multiple games on multiple platforms in market, each at different stages in their life cycle, and many with long tail based on high quality IP rights. We also believe that we have a flexibility to hit the pause on some of those development initiatives in order to materially cut our cash burn if we decide that is in our best long-term interest. We expect that decisions will be made in the coming months after we finalize our financing decisions, and I intend to keep you all updated as we move through this process. Before I pass it on to John, I'd like to reinforce the fact that we have long-term licenses and partnerships to create great official racing games and esports over a long period of time, for captive audiences, and beyond, while we cultivate a community and become synonymous with virtual racing. With that, let me hand it over to John for a review of our financials.
spk01: Thank you, Dimitri. I'd like to share summary financial highlights for the fourth quarter and year-end of December 31, 2021. Revenues were $8.2 million for the fourth quarter and the December 31, 2021, compared to $2.9 million in the prior year period. The gap between quarterly comparisons is largely attributable to the launch of NASCAR 21 ignition in the fourth quarter of 2021 versus the launch of NASCAR heat five, which occurred in the third quarter of 2020. Our net loss was 7 million and 3.1 million respectively for the three months ended December 31st, 2021 and 2020. The quarterly comparisons are significantly affected by the upfront development and marketing costs associated with creating new products for our recently acquired game licenses. Our adjusted EBITDA loss was $5.4 million for the three months ended December 31, 2021, compared to an adjusted EBITDA loss of $2.4 million for the three months ended December 31, 2020. The $3 million increase in adjusted EBITDA loss was primarily due to $5.7 million increase in 4Q 2021 operating expenses that the company invested to build out our portfolio of games. This was partially offset by a $1.7 million increase in gross profit from higher game sales in Q4 2021 and operating expenses adjustments for expenses recorded for Q 2021, including 0.3 million for 2021 impairment of intangible assets, 0.3 million in depreciation and amortization, 0.2 million in 2021 acquisition-related expenses, and 0.2 million in 2021 stock-based compensation. For the year ended December 31, 2021, revenues from our gaming segment decreased by $4.5 million or 24% to $14.3 million from $18.8 million for the year end of December 31, 2020. The decrease in revenues compared to 2020 period was primarily due to a $4.4 million reduction in revenues from our NASCAR series game titles. This was primarily driven by a lower initial sales of NASCAR 21 Ignition as compared to NASCAR Heat 5 in the prior year, and the timing of our new product release schedule, as there were fewer months to generate revenues from our NASCAR 21 ignition game due to its being released in October 21 compared to our NASCAR Heat 5 video game that was released in July of 2020. For the year ended December 31st, 2021, revenues from our esports segment increased by 500,000 or 169% to 800,000 from 300,000 for the year ended December 31st, 2020. The increase was primarily due to sponsorship events revenues from Le Mans Esports Series Limited, which were consolidated into our results for the first time following our acquisition of a controlling interest in the company in early 2021. whereas in the prior period, it had been reflected as earnings from equity method investments. Adjusted EBITDA loss was $17.4 million for the year ended December 31, 2021, compared to an adjusted EBITDA income of $0.9 million for the year ended December 31, 2020, reflecting lower year-over-year revenues, higher costs to develop and market new game franchises, and the timings of new game releases. We expect to incur losses for the foreseeable future as we continue to incur expenses to develop new game franchises. Accordingly, we do not believe that our existing cash on hand will be sufficient to fund our operations for the next 12 months. At this time, we're not providing forward guidance. I would now like to turn the call back to Dimitri for closing remarks. Dimitri?
spk03: Thanks, John. Overall, 2021 was a significant year for us. We were built upon our groundwork for the future game releases by attracting development talent and people that share a passion for racing games, acquiring necessary technology components which will help our games stand out and scale, and allowing us to further develop our platform and processes as we look to build out multiple franchises with our long-term licenses and partnerships. As you will note in our Form 10-K, our 2021 Auditor Financial Statements received a going concern qualification. However, rest assured that we are working diligently to analyze all aspects of our business to achieve cost reductions and free up funds to bolster our near-term liquidity. Additionally, we are currently discussing funding options, including debt and equity financing, so we could continue our product roadmap with no significant changes or disruptions. and ultimately generate returns for shareholders. Thank you for joining us today, and now let's go to questions. Operator?
spk05: Thank you. At this time, we'll be conducting a question and answer session. If you'd 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 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Mike Hickey with The Benchmark. Please proceed with your question.
spk07: Hey, Demetri and John. Good afternoon, guys. Thanks for taking my questions. Demetri, just curious on your upcoming NASCAR 22, what you're thinking here in terms of timing, I know you've sort of experimented with different release days, but what you think you can hit and sort of your view on what I'm guessing will be a step up in quality with the backdrop that you've had some disruption on the development side.
spk03: Thanks, Mike. So you're absolutely right, definitely a step up. As you release one game and you build upon that one game, It only gets better from there, right, as you have more and more time to fine-tune things and improve upon. As far as timing, we do have now a significant amount of data of what it's like to launch a game all the way from beginning of July, which we've done with our Heat 5, all the way to the end of October, which we've done last year with Ignition. So essentially covering almost the second half of the NASCAR season all the way to its finale. One thing we'd like to do is continue to walk our NASCAR releases closer to the beginning of the season, which normally happens around February. But, of course, we cannot make those drastic changes right away as that takes a significant amount of time available for a certain annual product to have it available for sale before the new one comes out. So you could expect us to continue to walk it closer to the beginning of the season, but not take major steps like six-month jumps and so on. And last year, being released at the end of October, I think it's fair to assume that we would be somewhere between that July, August, September, those type of windows on time for the NASCAR playoffs.
spk07: Nice. I guess NASCAR 23 would be your next release in calendar 22. Should we sort of think about, I know you're not giving guidance, but should we sort of think about what you did in calendar year 20 off the success of Heat 5? I think you're around 19 million. Is that sort of your positive? Obviously, your OpEx profile has changed, but is that sort of on the revenue side, Dimitri, do you think that's an achievable goal? on revenues and you do step up in quality here, which I'm sure you will.
spk03: It's a milestone, Mike. So to us, I wouldn't say the goal. One of the goals on the NASCAR franchise alone is to get to the levels where EA was in early 2000s when they held the NASCAR license that we hold now. And they were averaging always in seven digits during the data that's available to us. with some years peaking around 2.5 million units. That is what I would say is the goal for the NASCAR console product. Not to mention there's more platforms available today, like Nintendo Switch, that was not available back then. And Nintendo Switch install base is very comparable to those install bases of the Xbox and PlayStation. So we could actually see that that real goal of the NASCAR console game could be past those numbers that they have. But as you also alluded, our milestone is really just to get to the levels to have the most successful title, more successful than previous year, every year as we continue on our journey with this license, all the way until 2030 when that particular NASCAR one is up for renewal.
spk07: Thanks, Dmitry. Last question. Obviously, Stephen Hood has departed here, your head of development. Just curious, you have resources in Moscow. Obviously, that's been extremely challenging for you. I can hear that in your voice. I guess overall, how do you think about your development teams? What are you doing to sort of retain and grow the talent that you have And I guess that's it, you know. And, you know, if you're looking to sort of, you sort of alluded to bringing in third party for some help, but just sort of curious if you can double click on the development side given everything that's happening. Thanks, guys.
spk03: Sure. And I would say the challenging part is just the situation that's happening in Ukraine. That's the one that takes my heart away. And as I mentioned, I'm half Ukrainian myself, so it's an emotional topic to say the least. As far as our development is concerned, we do not see any interruptions at this point to our processes, to connections to the teams, to funding the teams. We're not experiencing any disruptions. Now, should the geopolitical situation changes, which is what you would like me to sort of double-click on, we do have other five studios around the world which are constantly ramping up their technical capabilities, the R capabilities, and so on. And when I mention about outsource partners, there are partners that we have been using to help us enable multiple products being developed at the same time. Look, shortly put, we have these licenses for a long time. The sooner we can get the products out, and as many products as it makes commercial sense to do for each one of these licenses, the longer our monetization window for each one of those products is. So right now, we'd like to enable as many outsource partners as we can as we continue to scale our teams organically in all of these different global destinations. And should geopolitical situation changes with those that are in those affected regions, then we will start shifting some of those outsource partners more towards our, say, core pipeline products, not more the auxiliary ones like maybe you could say some of the hyper-casual mobile products for us. It's still currently an auxiliary one instead of the core one like our PlayStation, Xbox, PC, and now Nintendo Switch.
spk07: Thanks, Dimitri.
spk05: Our next question comes from Michael Graham with Canaccord. Please proceed with your question.
spk06: Yeah, thanks. Hi, Dimitri and John. On the next NASCAR game that you said is going to come out sort of in the late summer, fall time frame, in the first Ignition game, there was sort of like a roadmap of features around things like DLC and player versus player, a whole roadmap of things that you were planning on putting in future game releases. And I'm just wondering, you know, you sort of have kind of a reset here, you know, maybe some changes in the development staff, maybe some learnings from, you know, the process with the first ignition game. So I'm just wondering if you can, you know, give us any thoughts on what we should expect to see in the next ignition game, you know, that may be an improvement upon what we saw in the first edition.
spk03: Thanks, Michael. Look, one thing for sure that the focus started from is to the quality of the product, right, and the stability of it. So that is one thing that the initial foundation of our focus went to immediately. So you could foresee that we're constantly going to step up sort of the internal standard that we put ourselves, right? The QA department and our compliance team is the first one we went to to make sure that we bolster those capabilities. We restructure our processes there to make sure that we better identify and track and fix bugs and those type of things before products come out. But to your question as to what can we foresee from sort of the feature set in 22 and going forward, one thing that we're taking uh close look at is our community being extremely vocal as to what they really want to see you could track videos online now that are actually making uh for example top 10 suggestions of what the 2022 feature set should be and that is great so you could foresee that we will be more paying attention to the community taking their suggestions into what they would like to see in priority order features. And as much as we're able to include in these annual releases, we would. So number one, step up the quality. Number two, continue to listen to the community and take their priority and desires and integrate them into their products.
spk06: Okay, thank you. And then the other one I wanted to ask is just, you know, as it relates to the liquidity profile, you mentioned You know, wanting to bring in new sources of funding and also the ability to reduce expenses if necessary. And I just wanted to ask, does that really just equate to, you know, kind of delaying franchise, you know, and game launches? Or are there other things in your cost structure that you can, you know, lean on in order to, you know, reduce your cash burn?
spk03: The biggest buckets for us is development and market, right? And marketing is attached to development of those products that are in market already with slight investments before the product releases to market. So the very first thing is not necessarily to flip switches on franchises. It's the amount of products or the amount of platforms each one of those franchises could expand and under which speed. So like I previously mentioned, maybe not a correct label of saying some of the hyper-casual mobile product could be an auxiliary one for us. And again, that might not be the right label, but you could foresee that we could stop or pause some of those developments until better liquidity position. But as far as our main franchises that we hold licenses for, we want to make sure that the path to those products for core platforms like Xbox, PlayStation, PC, and Nintendo Switch and some of those franchises instances are hitting on full cylinders. It's the mobile, it's the other things that we could put pause on or talk to our external partners on and maybe reduce their speed to market on the amount of resources they're attaching to some of those products for us. That's where we would tap in first. Our infrastructure overall, we do run what we believe is a lean infrastructure, and our investment areas are in dev capabilities. So that's the one that we continue to bolster, whether it's internal with organic talent that we retain or it's leveraging externals and contractors in some regards. Okay.
spk06: All right. Thanks very much.
spk05: Our next question comes from Michael Kapinski with Noble Capital Markets. Please proceed with your question.
spk02: Thank you for taking my questions. Dimitri, you've done an amazing job in a very chaotic situation, and I just want to congratulate you for some very tough work. I know that the employees mostly in Russia were largely your engineers, and I was just wondering if you could just talk a little bit about the prospect of what they were working on directly that might be in correlation to whatever products that you had planned to release. I know this has been addressed slightly, but I was wondering if there's any specific products that may kind of push out a little bit given that. And secondly, have things settled down? I know in some cases you were trying to get some of your employees out of Russia, and I was just wondering if the situation has kind of improved to somewhat to where you can utilize some of those workers that you had in that market.
spk03: Thank you, Michael, for that comment. I think the management team has done a tremendous job being resilient through these situations that are unprecedented, right? It seems like when we start our business, you know, we're faced with COVID. and that was an interesting challenge to overcome. Now that there's this one, it seems like it's a new norm for us to just operate in some sort of situation. So I pass on your comment to our management team for doing a great job on stepping up to the plate and managing through these situations. But as far as our team and specifics on what the studio there does, We don't have a particular dedicated product to a studio. We have a more of a flat approach and more department type approach where there's art departments, there's a dev and engineering, there's physics and so on. And they find their talent across different studios of ours. So it's not like if one studio starts expanding, that means automatically more resources go to a specific franchise. That is not necessarily the case. So it's not like if we start bolstering our Netherlands studio, all of a sudden our physics engine starts to get more resources. So to answer your question specifically, in Russia we're working on... implementing Unreal Engine, pairing it with some of the physics. They do touch the NASCAR product to some extent, sometimes from the art perspective, sometimes from other perspectives. But that is true for all of our studios, right? Our NASCAR franchise is really spearheaded from our Orlando studio. And you could look at our team in Moscow are leveraging to expand the capabilities of the Orlando studio. So it's really hard to say that one particular studio is responsible for just one specific franchise. They all do all. They do share the knowledge. And the tracking and capabilities of all this is really in a cloud and really not attached to... particular location. So somebody from any one of our studios could continue to pick up a task and resume regardless of where that task was initially started.
spk02: Well, thanks for that clarification. I know in some instances where companies have had these, you know, missteps and issues and things like that that happen in the stock price drops that, you know, that there are companies out there that tend to be opportunistic. At this point, there's no interest in selling the company. It sounds like you had been very interested in seeing through, you know, navigating through the issues and seeing it through in terms of all these product launches. And I just wanted just to address that question because it's kind of hanging out there.
spk03: Michael, your question is particularly around would we sell the company? Just to make sure I understand the question.
spk02: Yeah, would you sell the company? Yes.
spk03: Look, we have a very clear growth trajectory, right? We have amazing portfolio of IP. I think to price something right now where we haven't had a chance to put out a product for these IP and really tie it all together, which I personally believe has not been done previously to our existence. Nobody had a portfolio of these kind of official IPs licenses and we're able to tie the games together in a in a kind of unified player first experience what does that work that's hard to price right now so i think we wouldn't necessarily do it justice by our shareholders if we're going to try to put a mark on it before we're able to showcase uh what this really means to the player when they could take their experience from one of our racing games into the next racing games, into the next racing game, and continue to build their individual sort of race profile, license, whatever you want to actually call it, and carry that on into multi-racing discipline. What does that look like in terms of value later on as we cultivate this community? That's hard to pinpoint, but I definitely would like to see us deliver on that vision growth trajectory before we start to entertain kind of price points.
spk02: Totally agree. Thanks for the color. I appreciate it. That's all I have.
spk03: Thank you.
spk05: Our next question comes from Franco Granda with DA Davidson. Please proceed with your question.
spk04: Hi. Good afternoon, everybody. Thanks for letting me ask a couple questions here. So earlier, John talked about a four and a half million decline in NASCAR games year over year. Can you perhaps give some details around the other individual non-NASCAR franchises?
spk03: Hey, Franco. Good to hear from you. So the other products that we have currently in market are besides the NASCAR franchise is CarCraft, right? Our simulation platform that we just recently launched. put out there as a full release. We also have our eSports platform and games that we call R Factor 2, which is what we use for eSports products to facilitate those events, as well as a standalone product. You could find that on Steam itself, and that's the one that I was saying we just did a major UI UX update and now reorganized our content delivery to be more predictable in a quarterly release schedule, those are our additional ones that we are currently monetizing, if we're talking about just the game segment, besides what we have inside the NASCAR franchise. And those are on the ramp up, both of those products. And we do have a pretty concrete plan, which is now found in our investor presentation on our roadmap of, for example, taking car craft into a console as well, because currently it's only available for PC. So each one of those, even though they're not stamped with an official license like NASCAR in the Le Mans, for example, but they are standalone products that are starting to contribute, and we are expanding them as well into multiple platforms, which allow them to generate more meaningful revenue contributions for us.
spk04: Right, okay, thanks. And so I acknowledge that obviously Card Craft is a new product, so comparing it to the early release, maybe not as fair. But when you look at R Factor 2, the game's just been out for a while. Can you give some of your numbers, perhaps, since you acquired the game, how it's done, and maybe if you've seen the recent uptick, given the recent news and the new partnerships that you have?
spk03: We haven't broken out our particular games into each one. perhaps soon when they start to generate meaningful kind of results, we could start doing that. It is a fair assumption that there are no growth trajectory, especially since we started to reorganize. Our daily active users are up there, reorganize our content delivery schedule. Our factor two is one that even though, like you mentioned, it seems like it's been out for a while, and that is true. It's been launched for some time, which has also allowed us over time for that product to evolve quite heavily. That's not one of those annual SQL games that normally support titles demand. This is a very serious simulation product that's actually a similar type of code base is still used in real driver training facilities. So you could just imagine the sophistication. And in order to get to that level of sophistication, that takes an enormous amount of time. So if anything, the fact that it's been launched some time ago and been evolved with real-world drivers giving real feedback on how the physics supposed to feel is a huge benefit to that product. so now it's more on releasing the proper packs like we just announced earlier this week that that platform is now the official sim platform of formula e another race series that we're now an official license holder for that particular category and what we did with that is we took that and launched a formula e pack so allow somebody on our factor to download uh the recent cars and recent tracks that are attached to their recent season so even though the core product in the beginning was launched some years ago, the evolution of it has grown in value so much that now it's really a content, kind of like almost a live ops opportunity. Right. Okay.
spk04: No, I appreciate all the call, Dimitri. Thanks. And then one more, really just following up on an earlier question about the development team. You know, given what is happening on the outside, you know, with the game relatively underperforming and, you know, perhaps some of the fan base not being as happy. Can you speak to the employee morale within motorsport games?
spk03: Well, the good part is that we have folks that are truly passionate about delivering great racing games. So when they deliver something that was short of their own individual expectations, there is a motive of proving themselves now that exists, right? So that those that are on engineering, on the marketing, on the art side, those that are clearly seeing what the community is calling out as, you know, where's this, where's our rearview mirror, for example, or something to this extent, right, the team is more stepping up in terms of their morale and saying, you know what, we're going to deliver something that we're extremely proud of, that is going to go beyond our own benchmark. And that's what we're noticing. It's not that, of course, it's tough to see your work being criticized shouted at something is not good. But look, we released the game with bugs. There's deserving elements. Our community is right at that, right? So we're now focused to make sure that those type of issues don't repeat themselves. But more importantly, the individuals themselves are now in their individual contribution levels are after proving that we are a collection of folks that are super passionate about creating great racing games. and we are going to deliver that to the market. And that's what everybody kind of has in their head, that we're here to prove something now.
spk04: Thanks, Dimitri.
spk03: Good luck for the rest of the year. Thank you.
spk05: Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Dimitri Kosko for closing remarks.
spk03: I'd like to thank everybody again for your questions, for your comments, And for your belief, we are still on our clear journey of what we set out to do from the very beginning. Yes, we face some hurdles. Yes, we face some geopolitical things, COVID things, and all types of sort of bumps on the road. But when the mission is clear, when the vision is clear, and when our purpose is clear, which to us is to make the thrill of motorsport accessible to everybody, that is in our veins internally here. So it doesn't matter what bumps we're facing on the road. We continue to go towards our vision and making sure that we deliver on what we set out to do from the beginning. So I just want to thank everybody for participating on the call, for tracking our progress, and just continue to look out for more. Every quarter we will continue to release materials that showcase our progress towards our goal. Thank you very much again.
spk05: This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.
Disclaimer

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