MAG Interactive AB (publ)

Hello, welcome to the presentation of MAG's Q4. So here today in Present the Report is me, Daniel. I'm the CEO of MAG. And me, Magnus, the CFO. So as per usual, we're going to talk you through some of the highlights in the report. And then at the end of this presentation, we're going to have a Q&A. And also throughout the day, we're going to answer questions that come in online on our X account. So first to talk about the highlights of Q4. So this is the summer months, so June, July, August. And as our business is pretty dependent on season in terms of ad revenue. So during summer months, we have lower CPM, so the average amount people pay to show a thousand impressions of an ad that impacts our in-game economy. Also during summer, people tend to play slightly less. So a normal year for us, everything equal. We see a dip from Q3 to Q4 of about 10% measured in terms of revenues. What we've seen this summer is less than that, right? Like five, 6%. And I want to talk about why that is. So we over perform basically in the terms of product performance. Especially two big product updates. We had new things come out in Wordsy and also in Quistual that I'll come back to in a couple of minutes. So this helps obviously to keep the revenue levels up and the continued profitability of the company that's so important to us to be a profitable operation, even though we don't invest so much in UA at the moment. And then we have the Crossrail soft launch. So that's a game we talked about the last couple of quarters. that we really believe in. We're still in soft launch and I'm going to talk a bit about that soft launch development as well. So CrossL is a multiplayer crossword game. It's been out in the US market since late December. And what we're doing now is basically to verify that the product is strong in terms of retention and monetization. And we're now in soft launch also testing marketing. So can we get back the marketing money that we invest in the game in a short enough timeframe for us to see this as a scalable future product? So we're super optimistic about the game. We're doing a lot of A-B testing to see kind of what can be further improved and further out in time and so on. And as we talked about in the report, basically, when we see that if we have a good conviction of getting the money back within 180 days, we are in a state that we call global launch, and then we start ramping the game up. We're not there at this point in time, so we're continuously testing it. So it's coming new updates on a frequent basis in the US and just trying to learn from the data and get the game closer and closer to a place where we can launch. And I think important also for context, When we get a game out, historically, we're talking about hundreds of millions in future revenue. So this is a big thing for us, getting a game across the finish line and become an important part of our game portfolio. So it's a big goal we're after, and we're still very optimistic that we'll get Crossell to that place. But we don't want to get too early and burn through marketing money. Don't make money. Profitability is so important to us. So we want to get the product right before we get it out. So I mentioned important and efficient updates in QuizDuel that raised the performance this summer. So we have made a new game mode called Card King. So this is a new way to play QuizDuel, where you basically have packs of questions in specific categories. And you can pay to get your favorite categories, you bring them into the game, your opponent brings some other categories, and then you face off. But these are consumables, which means that you will run out of the questions in some of the categories and then you want to refill. And this has created kind of an interesting new in-game economy. So we ran this test for four weeks in Germany or the German speaking markets this summer. It looked really positive. So the team decided to go and make this a permanent feature of the game. As of a couple of weeks, this is a permanent part of Quiztual in those German speaking markets. So this is Germany, Austria and Switzerland. So we really look forward to continue running and optimizing this thing. And the more of these kind of really strong new event types and feature types we have in Quiztual, the richer the product becomes and the better the economy of the game becomes. This, together with Quest and Streak and the Match 3 stuff and so on, is really making this product a better, better game over time. And also, in addition to that, when the LTV goes up, we can also invest more and more in UA. So this is a very positive development for our biggest game.

Yeah, and with that we take a look at our product mix and our portfolio. And on the right hand side here we have the smaller and older games, generally speaking, as usual, turning around roughly 100 million sec per year. And speaking of seasonal effects, we see one here where we have 10% down from Q3 to Q4. We group the games in the smallest and the slightly bigger games on top where the LiveOps team take care of the bigger ones and making sure they're fun and relevant for our players for many years post-peak of the game life.

Yeah, and on the left side, we have the growth games. And as I mentioned, Quiztool and Word have had a really strong summer. So if you compare Q3 here, that was 46 million and now it's 45. So it's basically flat. I think that the shift here is basically just exchange rate of US dollar to Swedish krona. So it's super stable. And that's thanks to making the product stronger, especially on the in-app purchasing side. And then, of course, CrossL, that we're working hard to push up to become one of those growth games, and that's going to help us being able to invest more in UA and start growing the revenues again.