PLAYSTUDIOS, Inc.

Thank you for standing by. Welcome to the Play Studios fourth quarter and year end 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, February 24, 2022. I will now turn the call over to Joel Achena, Corporate Security and General Counsel.

Thank you, Operator, and hello, everyone. By now, everyone should have access to our fourth quarter and year-end 2021 earnings release, which is available on the Play Studios website at www.playstudios.com in the Investor section. Some of management's comments today will be forward-looking statements about future events, expectations, and projections. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. You should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact future operating results and financial conditions. During the call, management will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our fourth quarter and year-end 2021 earnings release on the www.playstudios.com website and on our Form 8-K filed with the SEC today. Hosting the call today, we have Andrew Paschal, Play Studios' Chief Executive Officer, and Scott Peterson, Chief Financial Officer of the company. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Andrew.

Thank you, Joel. And good afternoon, everyone. Welcome to the Play Studios fourth quarter and year-end earnings call. Given that it's a new year, we're going to spend some time reaffirming our priorities, reviewing our recent results, along with providing our outlook and guidance for the current year. Let's start with some highlights from the past year. 2021 was incredibly eventful for our company, a year in which we positioned ourselves to advance our business and more fully capitalize on our unique model. More specifically, we went public and raised $250 million of primary capital. We expanded our game portfolio, adding MyVegas Bingo, MGM Slots Live, and Tetris to our existing collection of franchise products. We rebuilt our player network to pre-COVID levels, ending the fourth quarter with over 4.8 million monthly active users. We added nine loyalty partners and enriched the collection of real-world rewards, expanding the value of available benefits from nearly $300 million to $500 million. We advanced our Play Awards platform, tools, and capabilities, moving us closer to our ultimate goal of providing our program as a service for all game makers. We attracted some amazing new talent into the company, enhancing our product design, technology, and strategic capabilities. And we generated 287 million of revenue and 40 million of adjusted EBITDA. But turning to 2022, we're more convinced than ever that our focus and strategic approach are ideal for the times. Traditional leisure and retail businesses are becoming ever more dependent on digital platforms to attract their target audience. Most do it with conventional advertising, paying to display ads that promote a product or a discounted price. And there are those that invest in deeper digital presence, extending their brands into these channels in a way that's more experiential, engaging, and brand enhancing. As I shared on prior calls, this is where we've positioned our company. We use games to amass players, loyalty mechanics to intensify engagement, and rewards to convert them to real-world consumers. The result is a thriving marketplace where everyone benefits. Players get more entertainment and leisure value, game makers generate greater returns on their investments, and real-world brands acquire and engage more qualified consumers. This is what we've built. a virtuous marketplace that's tended to by incredibly skilled content creators and loyalty marketing specialists. And in doing so, we pioneered a unique model that's enabled hundreds of traditional businesses to cross the digital divide. It is our vision to fully exploit this model, and as we do, establish our company as the leading platform for rewarded play. With that as context, let's touch on our recent financial performance and other key operating metrics. We ended the year with a solid fourth quarter, posting revenues of $72 million, of 12.4% year-over-year, and adjusted EBITDA of $12 million, up 24% sequentially. When considering the social casino genre, our top-line results continue to outpace the broader market. According to the research firm Eilers and Trichic, the overall social casino market in the fourth quarter was down 1.1% sequentially compared to our 2% sequential growth and up 5.2% year-over-year compared to our 12.4% increase. In spite of the COVID headwinds, revenue for the full year was $287.4 million, an increase of 6.5% as we continue to grow profitably and generate cash flow. For the year, adjusted EBITDA was just under $40 million at the top end of our guidance range. Scott will be sharing and qualifying some of the more specific financial metrics later in the call, but I'd like to first offer some perspective on the overall state of our market. The overall market for games is approaching $200 billion, with mobile games accounting for nearly half the revenues. This is being driven by continued improvements in access, device quality, and game variety. And while these dynamics are driving growth, increases in competition and the recent disruption in UA practices have intensified the challenges of scaling new products as well as sustaining old ones. More specifically, the deprecation of IDFA, which has since resulted in most of the platforms revisiting and limiting their consumer targeting capabilities, has resulted in higher acquisition costs. This in turn has compressed the returns on ad spend, making it far more expensive to amass an audience. I believe these trends play to our strengths and unique capabilities. The industry is all consumed with how best to attract new players. However, by comparison, there's little innovation being applied to holding on to existing ones. Understandably, most game makers rely on the inherent entertainment value of a game, as well as ongoing feature and content releases to retain their audience. And while we also support all of our products with a dense lineup of fresh content, we leverage loyalty mechanics and real world rewards to deepen the connection with our players. We know this works for us and we expect it to work for others too. In short, the unique challenges of today's market are intensifying the problem that our model solves. For this reason, we remain so optimistic about our opportunity and so committed to our strategy. On the topic of strategy, ours consists of three key pillars. The first is developing and acquiring new games and new genres so that we can demonstrate our loyalty lift across a broader collection of products. As we've shared, we plan to do this through a variety of approaches, including joint development, publishing, and strategic M&A. The second is focused on developing the technologies, features, and tools needed to evolve our Play Awards program into a platform and suite of services that we can provide to the broader games industry. Making this transition will enable the company to accelerate its growth, minimize creative risk, improve margins, and ultimately drive substantial value. The third is diversifying our commercial model. Today, nearly all of our revenues are from in-app purchases. Going forward, we intend to leverage advertising, direct commerce with our players, and the emerging blockchain models to diversify our revenues and expand our business. Given this focus, it's worth touching on some of our primary initiatives. So let's start with games. As I highlight at the top of the call, we expanded our portfolio from four to seven games. Each one is uniquely positioned and ties directly to our strategic priorities. In the category of joint development, there's My Vegas Bingo, which marks our foray into the popular and growing casual bingo category. It leverages our marquee brand and our extensive library of unique game IP to deliver a fresh and innovative take on an old favorite. We launched the game back in late March and quickly scaled over 100,000 DAUs. As I share in our last call, a number of technical issues were revealed as we grew our audience. In response, we elected to moderate our UA investments and afford our development partners at Boss Fight Entertainment the time they needed to stabilize the product. We recently decided to take the game back from Boss Fight, a process that was completed just a few weeks ago, allowing us to lead and manage its ongoing development and operations more directly. We continue to believe in the potential of this game and look forward to stepping up the pace of new content employing more refined and proven monetization practices, and ramping up our investments in user acquisition. In the category of publishing, there's Kingdom Boss, a role-playing game that we distribute on behalf of Boss Fight Entertainment. As we've highlighted in the past, Boss Fight is a long history and a series of notable successes in the RPG genre. Unlike Bingo, Kingdom Boss was conceived of and based entirely on their own intellectual property. Our contributions to this franchise have been to underwrite its development, manage the UA activities, support the Play Awards integration, and generally provide insights gleaned from play testing. As I've shared, the game has struggled to achieve all the criteria that were established for a full-scale launch, even after making the game available in North America late in the fourth quarter. And while Boss Fight has consistently assured us that, based on their experience, the product is on a constructive path, currently we've elected to suspend development and reevaluate our options. As for strategic M&A, we recently acquired the rights to Tetris, one of the most widely played and beloved franchises in the history of consumer gaming. It's our belief that the Tetris game format has the potential to be its own casual game category, alongside Match 3, Solitaire, and Bingo. Each of these categories demonstrates the unique power of a universally appealing game format when complemented with progression mechanics, richer features, and more sophisticated live operations. Our plan is to optimize the existing games we've inherited while we craft an altogether new Tetris app that employs the playbook proven by Candy Crush, Tri-Peak Solitaire, and Bingo Blitz, among others. It's also worth highlighting that the existing game currently generates millions of organic installs, which we intend to introduce to our Play Awards program, and in doing so, look to improve retention, engagement, and network-wide value. Lastly, it's worth highlighting that we recently introduced a new slot app, MGM Slots Live. The game was conceived as a UA initiative, whereby we combine one of the most iconic brands in gambling with the best of our Pop Slots features to more efficiently acquire new players. By utilizing the Pop systems, tech, tools, and themes, we're able to efficiently leverage our resources and enter the market with a fresh and novel game. While we're still early in the cycle of qualifying the results, the strategy appears to be sound. The blended CPIs for MGM are below Pops, and the early returns are stronger as well. Assuming all goes well, we could utilize other brands in our portfolio, such as Bellagio, Mirage, Luxor, and Excalibur in a similar way. Turning to the second of our strategic pillars, we've made great strides with advancing our Play Awards platform. We've continued to generalize the systems, tools, and practices that will allow us to offer the service to third parties. And we've extended our Play Link SDK and feature set, enriching the framework to include a more expansive collection of digital real-world tie-ins. In addition, the team has been active in qualifying and onboarding reward partners. Over the past 90 days, we've added nine new outlets, including an expanded relationship with Intercontinental Hotels, along with a number of new local and affordable options. Lastly, the Play Awards team is excited to be working with a more diverse portfolio of games, as each provides a unique set of demands that will stress our teams and better prepare them for the longer-term business-to-business opportunities. Before moving on to some operational updates, I'd like to touch on the emerging market for blockchain-enabled gaming opportunities. NFTs and cryptocurrencies are dominating the narrative across many markets, but few have been as quick to embrace and exploit these opportunities as the games industry. Enabling players to verifiably own, trade, and sell their in-game characters, collectibles, and other content while having a voice in the overall application of these assets is adding an entirely new dimension of value. More than ever, players can now turn their in-game progress into real value allowing them to earn while they play. We understand the unique dynamics of play to earn as we've been doing it with our Play Awards program for nearly 10 years. Needless to say, we too are advancing our own plans for enhancing our model with the added dimension of blockchain-enabled features and capabilities, and we look forward to sharing our plans and progress in the coming quarters. On our last call, I highlighted some of the complexities and challenges of scaling our operations and executing in a post-COVID environment. If you recall, I spoke to the escalating costs in each of our primary tech hubs and our need to grow our teams in alternative markets. I'm pleased to share that we've made great strides in our Vietnam, Singapore, and Belgrade studios. All in, these studios now have 148 playmakers, accounting for 29% of our total development capacity. We'll continue to aggressively scale in these markets, understanding that it takes time to onboard, train, and integrate new team members. As such, we don't expect to see any meaningful benefits such as increased development output or improved margins until later this year. Before passing the mic to Scott, I want to briefly touch on our capital allocation. As mentioned during our last call, as a management team, we make decisions that we feel reinforce the enduring qualities of our business model and drive mid- and long-term growth. Notwithstanding the continued dislocation of our equity value today, we maintain our belief that the best use of our capital is to deploy it into strategic growth opportunities as opposed to purchasing our own stock. We have a rigorous approach to finding, qualifying, and pursuing strategic acquisitions and are actively engaged in a number of opportunities of varying scale. So as to not impair our ability to act on these opportunities, we elected not to purchase any stock during the fourth quarter under our previously authorized $50 million stock repurchase plan. We regularly assess the benefits of purchasing our own equity compared to external opportunities and remain poised to execute a buyback program should we deem it appropriate. I also want to reaffirm the conviction and optimism that's shared among our leadership team. As you may have seen, I've been actively purchasing stock to attend B5.1 plan and other non-reporting members of management have made purchases as well. We firmly believe in our strategy and with our buying shares in the open market, want to back up our position that our current price in no way reflects what we believe to be our fair value. I'll now turn the call over to Scott to provide more specifics on the financials. Thank you, Andrew. As Andrew mentioned, we reported $71.9 million of revenue during the fourth quarter of 2021, up 12.4% from the same quarter last year. As has been the case all year, when evaluating the year-over-year quarterly comparisons, consider the COVID restrictions that were in place during the same periods of 2020. For the full year ending December 31, 2021, revenue was $287.4 million versus $269.9 million in the prior year. We continue to strengthen the platform and invest in our game portfolio so that we can deliver engaged and loyal players to our brand partners. Yet we remain disciplined as we grow and grow profitably by generating tangible cash earnings. For the fourth quarter, we generated 12 million of adjusted EBITDA. For the full year, we recorded 39.5 million of adjusted EBITDA, which is down from 58 million during the prior year. The decrease reflects the ongoing investments in product development live operations, and user acquisitions we made during the year, which supported our bingo launch, plus the carrying costs associated with the Kingdom Boss effort. Looking at the fourth quarter's key operating metrics for our Play Awards platform, we saw an increase in activity as reward purchases returned to pre-COVID levels with 482,000 purchases in the quarter versus 269,000 for the same period last year, a 79% lift. This translated to a total retail value of $28.8 million, 137% increase over the $12.1 million for the same period last year. We also enjoyed a healthy expansion in the composition and amount of rewards inventory, which increased 58% over the prior year to 542 unique rewards, with a retail value of over $149 million, an increase of 140%. Additionally, fourth quarter DAU was $1.3 million, and MAU was $4.8 million, up 0.5% and 24.8% respectively year-over-year and up 10.1% and 35.4% sequentially. ARPDAU was $0.61, up 13% year-over-year and down 7.1% sequentially. Finally, daily payer conversion was 2.6%, up approximately 20 basis points year-over-year and down approximately 20 basis points sequentially. Turning to the balance sheet, we ended the quarter with approximately $214 million of cash and no debt. We have not drawn against our revolver, and thus we still maintain $75 million of additional liquidity. The revolver also provides an option to increase the credit facility for up to an additional $75 million. All in, this translates to nearly $365 million of liquidity. As of December 31st, we have 126.2 million shares of common stock outstanding. Given our strong balance sheet, we believe we are very well positioned to execute our multi-year plan of diversifying our game portfolio, advancing our loyalty platform model. We also maintain the share repurchase authorization to be able to execute a stock repurchase should we deem it appropriate. Next, we are initiating guidance for the full year 2022. We expect 2022 full year revenue to range between 305 and 325 million, representing year over year growth of roughly 9.6% at the midpoint. We expect 2022 full-year adjusted EBITDA to range between 40 and 50 million, representing a 14.3% margin at the midpoint, an improvement of 50 basis points compared to 2021. Regarding the underlying assumptions in revenue, some of the increases include a low single-digit growth rate in the core portfolio and continued progress in the MyVegasBingo, MGM Slots Live, and Tetris. On the adjusted EBITDA line, we will continue to invest in MyVegasBingo, but with a lower rate than compared to 2021, and we will be investing more in MGM slots. The level of investment in these two games will be partially offset by the suspension of the Kingdom Boss effort and related carrying costs. We have also added a profitable Tetris to the mix, but please understand we will invest additional resources as we enhance and roll out the game later this year. With that, I will pass it back to Andrew for some closing remarks. Thanks, Scott. Before we close our prepared remarks and open the call for questions, I'd like to reinforce some key points. Our revenue growth has generally outpaced the market. We're expanding our product portfolio with well-established and relevant franchise brands. We have an exciting opportunity to create a new category within the massive puzzle genre by leveraging the core Tetris mechanic. We're bringing our bingo product in-house and spending our investments in the RPG category. We're scaling our teams and expanding our global development capacity. We're advancing our Play Awards platform and preparing for future B2B opportunities. And the 10B51 plan that I alluded to earlier to purchase shares in the open market has been implemented. Lastly, I want to thank our dedicated teams across the globe for their continued commitment and contributions. Thank you all for joining us today, and we're happy to answer any questions. Operator, please open the line.

Thank you. 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 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 is from Ryan Seidel with Quay Holland Capital Group. Please go ahead.

Good afternoon, Andrew. Scott, thanks for taking our questions.

Hey, Ryan.

Curious to start, so MAUs saw a pretty big uplift in Q4. Monetization was the lowest of the year. I guess, is that Tetris in there? And then secondly, what else would be driving that?

That's correct. It is the impact of Tetris, which we incorporated into those numbers towards the very end of the quarter. So they don't reflect the full quarter, but that's what ultimately grossed up or impacted positively the MAU and Given the nature of that audience and the degree to which it's monetizing, it was diluted in terms of some of the unit metrics.

Good. And then anything to comment on January, February, kind of on DAUs and then ARPDEL?

Nothing specific. I mean, I think as we came out of and through the holidays, or excuse me, through the holidays and then out of them into the new year, You know, we carried some of that momentum, obviously, into this quarter. We'll have, obviously, in this quarter, the full impact of our absorbing Tetris in terms of user activity, both impacting NAU and DAU. Again, modest monetization, so not a really meaningful impact to revenue. But, you know, we're really thrilled because of the scale of the audience and the volume of organic installs that product generates and looking forward to improving the existing products and introducing some new ones that we think are going to allow us to retain more of that audience and obviously drive higher levels of monetization, which ultimately is what's factored into the guidance we've provided for the year.

Two more from me and then I'll turn it over to the others. Just on some of the rewards, historically how correlated is rewards usage to versus monetization to you guys in the period or future periods? I guess looking, is that a leading indicator or is it directly correlated in the period and then one follow-up?

It generally isn't so much a leading as a trailing indicator as people are accumulating and amassing loyalty currency and then ultimately shopping for the benefits which they then have to plan to consume because many of them are for destination hotels or cruises or events. So the consumption of the rewards typically tends to trail the other metrics and performance.

Makes sense. Last one. How are your newer rewards partners? I think you said you had seven, if I caught that right, in the quarter. How are your newer rewards partners, albeit early? How are their ROI metrics relative to your more established partners?

It's really early. Inside of one quarter, it's difficult to really qualify. I can tell you that reception generally is positive because they see the traffic increases and improvement, but Again, it takes a little while before we start to see those rewards not only get purchased in the various apps, but then ultimately consumed and fully redeemed. So we can provide maybe a bit more color in the future, but still a bit too early.

Good. Thanks, guys. Good luck.

Cool. Thank you, Brian.

Thank you. Our next question is from Mike Hickey with Benchmark Company. Please go ahead.

Hey, Andrew, Scott. Congrats on the quarter, guys. Thanks for taking my question. Hey, Mike. Yep. Kingdom Boss, I guess not a shocker here, but maybe a little suspending development on that game. Just sort of curious where you go from here. Obviously, you put a lot of resources in that direction, not just that game, but also sort of trying to prove out that, you can expand in new genres with your play award program. So just sort of curious with where you go from here and then how we should think about the capitalized debt expense associated with that project. If we should sort of just anticipate that would be written off in the future or, you know, I don't know if you can sell it or what you can do. That's my first question. Thanks, bud.

Okay, sure. I'll take the first part of that question and let Scott handle the second. So, you know, we obviously were deeply committed to Kingdom Boss and spent quite a bit of time and also a lot of money advancing it through our partnership with Boss Fight. As we've shared in the past, it was complicated because, you know, we really struggled to get all the metrics to a place where we felt like the product was healthy and investable and in a place where we could really commit the tens of millions of dollars that would be required in order to really scale its audience and get it to perform and contribute to the levels that we'd originally anticipated. And so we just finally got to a place where we felt like continuing to consume not only the money and resource that we were applying to it, but also the capacity for members of our team tending to it and doing all we could to support the boss fight group and trying to get it to a place where it was more performant, but we just got to a place where we felt like it's time to suspend this product and kind of regroup and assess what our other alternatives and options might be for it to the extent that we feel that it has the potential ultimately to be reconstituted at some point. We just aren't at a place where we can make that decision yet, but we'll be evaluating that in the coming weeks. So that's how and why we ultimately arrived at the decision, which we think is absolutely the right one to help us also bring some focus to the other new product initiatives that are getting some traction and we're pretty excited about and want to make sure that we're allocating both our attention and our UA capital and development subsidies to the efforts that we think are going to yield for us. As far as the the expense of it when the timing of it being written off. Scott, you want to address that? Yeah. I mean, we're evaluating that now. Um, it'll be, uh, written off in Q1, uh, and, um, we're, we're just, you know, evaluating the extent of it right now. At 1231, um, we had just over $8 million of, uh, capitalized software on the book. So that would be a non-cash charge, uh, But that's not the extent of it, but that will be pretty close. And I'm going to double back, Mike. I'm sorry. There was one other part to your question that I didn't answer, which is, you know, what implications does this have on our overall loyalty model and framework? And, look, we certainly were hopeful that fundamentally the game would perform and then we could show that the integration of our player awards proposition in the game would drive that incremental lift. that we've seen across the other games in our portfolio. The fact that the base and the core product in this case didn't perform to a level where we could really get it to the market and start to get some scale, and really then as we incorporate the loyalty program, prove out its impact, doesn't in any way invalidate our program. It just means that we won't be using this game to further validate and support it.

Thanks, Andrew. Scott, last question from me on Tetris. It seems like that's a great acquisition, and it seems like it could be sort of a case study here for the success of your player award program. I mean, any early learnings with the game, any sort of encouraging data on the development side, or maybe some new partners that you have associated with the game that you can share with us?

Yeah, I mean, first of all, we've not yet incorporated the loyalty program into the versions of the game that we've inherited. So that'll be coming shortly. We're seeing a great response from both our existing partners that obviously have an awareness and really a strong affinity for that brand and that franchise. And we're also seeing really great traction in and among new partners that are excited about our program, but we're waiting for a product they felt was more appropriate for their brands to be attached to or included as part of the loyalty benefits. So, you know, we're really optimistic about the impact that, you know, the presence of that brand is going to have in the program and its ability to attract new partners. And then I would just say overall, I mean, we're really, really excited about this game. Tetris undeniably is one of the most successful franchises in the history of consumer gaming. The fact that it's not yet been fully embraced or made the transition onto mobile as a platform, we think kind of represents an unrealized opportunity. And so I think there's a lot that we can learn from the existing games that are in the market, as well as I mentioned earlier, draw inspiration from other casual games that have gone through the cycle of taking kind of the base game format, the method of playing a game, which is really popular, and then complementing it with all kinds of meta features and progression mechanics and more sophisticated live operations and a bit more creative depth and kind of transition a great game into really a franchise that can drive significant value. So there's a lot of work to do, but we're working with what we believe is one of the strongest assets in gaming. So we're really excited about this opportunity. Thanks, guys.

Good luck.

Cool. Thanks, Mike.

Thank you. Our next question is from Greg Jibes with Northland Securities. Please go ahead.

Hey, good afternoon, Andrew and Scott. Thanks for taking the questions, and congrats on the nice results. I was just wondering, you know, implied within your guidance, if you could kind of talk about high-level assumptions related to, you know, where you're expecting ARPDAU growth versus maybe MAU growth, the dynamics there. And I guess, you know, along those lines, if your guidance relies on any new games or new loyalty partners to be added to the platform and kind of how you're thinking about that. Thanks.

Yeah, thank you. So as far as generally guidance, I know that Scott alluded to this in his remarks. We kind of expect that the core portfolio is going to grow on pace with where the market generally is expected to grow in the kind of mid-single digits. And then we're certainly expecting to scale and grow the overall size of our network. We already have with the addition of Tetris, the current versions of the products. And we've not yet fully scaled up our Bingo product early in the cycle with MGM Slots Live. So we think that there's obviously room to leverage each of those products to attract a broader audience. As far as the impact on kind of the monetization metrics, we believe that ARPDAUs are going to probably get compressed a little bit, but that's a function of Tetris. and its diluted impact on the continued strength of the conversion rates and RP proves or the monetization rates among the players of our core products. And then over time, we certainly hope that we'll optimize the monetization of the Tetris games and see better performance. But I guess to answer your question more directly, we would expect to see our DAOs get diluted a little bit, but we're going to scale up and grow our audience as we invest in and scale the new portfolio of products.

Perfect. Very helpful. And I guess, you know, regarding kind of your, I just wonder if you could talk about, I guess, the capital you have budgeted for some of those new titles or new developments. So MGM Slots, the new Tetris game that you guys are working on, and then, you know, just, I guess, kind of capital required or budgeted for that this year, you know, in tandem with, you know, pulling out of Kingdom Boss, just how you're thinking about that.

Historically, we haven't broken out the expenses that are specific to any one product, but directionally what I can tell you is that the MGM Slots Live product is really an extension of our Pop Slots franchise. It leverages a lot of the core content and the tools and features and the team that support and operates that franchise. It's relatively speaking, quite efficient. So the investments we'll be making are really more on the user acquisition side of that product. And we'll be allocating some of the UA budget that was otherwise allocated to Popslots, as I mentioned in my remarks. We really initiated this product as kind of a UA strategy where we felt we could leverage the strength of a really iconic gambling brand and the best of what we offer in our top slots product and then put it into the market and see more productive return or more productive UA investments and better returns. And so as I mentioned, we're encouraged by the early results. And so we're going to be continuing to invest in and scaling and growing that product. The bingo game As we talked about, we've now taken that on and internalized that effort as recently as just a few weeks ago. And so we're still in the process of fully assessing and resetting its development plan. There's a fair amount of work to be done to address some of the technical considerations or concerns that we've raised in the past. We're intensely focused on that right now. And then we'll be extending the product with more features and capabilities so that it can realize its full potential. As I've shared in prior calls, the engagement among the players that are still actively playing that game is very strong. We believe it has enormous potential. And so we look forward to also getting it to a place where we can start to ramp up the UA investments. And then from a Tetris perspective, we are going to continue to support the existing products that are in the market. and develop an altogether new version of the Tetris app. We expect that that's gonna take somewhere between six to nine months, and then we'll have it in the market alongside the existing products, and we're gonna use the existing games to really further qualify the impact of our loyalty program, its capacity to drive some increased retention and improve monetization among the existing games, but really, in an effort to optimize how we incorporate and leverage the loyalty program in the new version of the app that we'll be launching later in the year. But as I said, we're excited about its potential. So hopefully that addresses your question.

Yeah, certainly does. Appreciate it, Andrew, and I'll pass it on. Thanks again. Great. Thank you.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Martin Yang with OpenIMO. Please go ahead.

Hi, Andrew, Scott. Thanks for taking my question. My first question is, you know, the key learnings you have from Kingdom Boss. Does that change your view on genre expansion? Do you still have the intention to break into mid-core games?

Yeah, no, it doesn't change our view on the relevance of our model in the mid-core genres, in the RPG or strategy kind of game categories. We still think that there's a really great opportunity to employ our model. It just didn't work in this case. It's not that our model didn't work, it's just the core product just wasn't able to achieve the kind of baseline metrics that we felt we could then support, invest in, and then apply our loyalty program to and then scale and grow. So, you know, loyalty programs, we've never promoted our loyalty program as a solution for a game that inherently it doesn't have the capacity to captivate its audience. You still fundamentally need a really good game. But what we know is that when you've got a solid game and then you complement it with a loyalty program and real-world benefits as rich as ours, then it enhances its performance. So, you know, in short, we're still believers in those genres in our model and its applicability to those genres, and we'll continue to look for opportunities where we can prove that out.

Got it. Thanks. My next question is... During the fourth quarter, you discussed the growth for rewards purchased and retail value of the rewards. Both are up very strongly year-over-year, and the retail value was up more than the rewards purchased. Can you maybe help us, give us more context to interpret those numbers, what was driving the growth, and did that indicate a certain mixed change in your rewards?

Yeah, some of it is mixed change. Some of it is the continued emergence through COVID with partners kind of coming more fully online and ultimately allocating more inventory to the program. So those are the principal reasons.

Got it. My final question is on the updated version that's coming expected for Tetris. So aside from incorporating my Play Awards programs are you going to implement certain gameplay changes to make sure that maybe that will be a more organic integration of Play Awards?

Well, we're certainly going to integrate Play Awards. The effort and what's going to take the better part of the next six months to nine months is going to be we're going to create an entirely new version of the game we're going to be really respectful of the core gameplay, the mechanic of Tetris, so that we can preserve the game that so many people love, literally hundreds of millions of people have played and love. But we believe that there's an opportunity for us to add more depth to the experience. So a meta layer to the game that provides for progression loops, as well as a richer set of features They can then be leveraged in the way that we operate the game and conduct events and then also the degree to which we tailor the game based upon what we know about the players. The experience is more responsive to the way that they're engaging with the game. So those are the things that we'll be focused on. I think the team's converging on and has a ton of clarity around what it is that we're going to go implement and just looking forward to to getting the early version of that product in the market so that we can test and refine and get to a place where we can be prepared to launch it. So, but, you know, we fully expect that the Play Awards program with a broader collection of reward partners, many of which will be new and specific to the Tetris franchise, will be ready to roll and we'll have that product, as I said, in the market the latter part of the year.

Got it. Thank you.

Thank you, Martin.

Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to Andrew Pascal for closing remarks.

Thank you. I appreciate everybody taking the time to hear about our performance in the fourth quarter and the wrap-up for the year, and certainly looking forward to updating everyone on future calls. So thanks for your time today.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.