MAG Interactive AB (publ)

Hello and welcome to the presentation of MAG's Q2 report. It's December to February we're going to talk about today. And here to present is me, Daniel Hasselberg. I'm the CEO of MAG. And me, Magnus Eklander. I'm the CFO of MAG. So the highlights of this quarter that we really want to talk about today is the positive soft launch we've seen for Crossell so far. So this is a game that we soft launched in December, so just before Christmas break. So we're going to talk about that today, how that's going and the future of that soft launch. And also the fact that we have a strong underlying profitability in the business. We're generating cash similar to the same pace as last quarter. So we're going to get to those highlights and then after the presentation we have a Q&A session here and also online during the day you can ask any questions and we'll do our best to answer everything. But yeah, a few words about Crosshole. So this newly soft launched game is a multiplayer crossword game. So you play against an opponent on the same crossword board and you try to score the best and win the game and the rewards you get you use to progress in a kind of visual meta game, go to different locations and when you complete locations you get more rewards and so on. basically to keep you engaged over a long period of time. And this combination of a multiplayer crossword game with a decoration meta is something that doesn't exist in the market. And we think it's a really exciting thing to get through to players. We also see super high engagement in terms of daily playtime and all the early metrics you want to see from a game. But I want to talk also about what's happening now during the soft launch. We've been out for a few months now, so what have we been doing? It's a lot about, obviously, getting more content out of players. We are optimizing the events in the game and adding new functionality. But it's also a lot about the marketing optimization, so testing different ad creatives and messaging and see what really resonates with different types of audiences. and also on a more technical level optimizing for different marketing algorithms so you can have something that targets purchasers or ad revenues or a certain action happening in the game after x number of days and so on all these needs to be tested and optimized and so on it takes a while And what we're sharing today is basically that so far so good. We see good performance of the product and good performance of the marketing for the first part of the game. So what we need now is basically more time. We'll add more content, fine tune the events, and also follow the performance of the traffic that we're getting into the game so we can build these. long-term lifetime value curves that we use and for the kind of predictive modeling of return on advertising spend. So what we need to see before we get to full on launch is how do these cohorts of players kind of develop and behave over a longer period of time so you can build confidence in marketing spend. So the next couple of months is going to be super exciting and see if the game continues to perform well and that the tests we're doing, that they work out well, or if we need to go back and kind of retune things and so on. But it's super exciting time in the new games department.

And looking at the product mix, on the right-hand side, as always, we have our 100 million or so annual run rate of the older part of the portfolio. And our focus work-wise is mostly on the upper half here, where we have the evergreen type titles and the LiveOps team focusing on maximizing the value out of the existing audience we have there, usually without support from marketing, and to bring out the value over time of that part of the portfolio.

Yeah, and that's the steady part. We talked about these 100 million of yearly revenue run rate. The left part is where we have more of the fluctuations. So if you compare it to a year ago, the top line revenues is down quite a bit. And it's very much related to where we spent much more user acquisition a year ago, and unfortunately, not as much this quarter. So it's very helpful for the profitability, but it's not helpful for growth, obviously. So that's where we see the kind of the ups and downs and revenue is happening in the growth part of the portfolio. So it's a lot about Wordsy and a lot of focus right now is to get Wordsy back on a growth track, to invest more in marketing and make that game grow again. And there's stuff we can control, optimizing LTV and so on, optimizing ad creatives, finding new channels. And there's also some stuff that it's out of our control, which is basically how much is the competition spending to reach the same audience and so on. And as we mentioned in the report, the key thing for us here is to stay disciplined. So we'll always look at, is this campaign profitable right now? We need to optimize for that profitability. That means kind of volumes go up and down. But the exciting part here in this picture is, of course, CrossL, that we have a new game that we can talk about, that we know what it is, and that we can kind of really work on getting up to that upper left corner in this picture to be the next growth game that can help MAG grow the UA investments and overall revenue and long-term profitability. So that's a lot of focus here, getting WordC up to growth again and getting CrossL up to being a fully launched game.