Qiiwi Games AB (publ)

Då hälsar vi er som är här välkomna till Kiwi Games webcast och presentation för det tredje kvartalet 2024. På agendan har vi genomgång av kvartalet och perioden som har varit och efter det en frågestund, Q&A, där det är som möjligt att ställa frågor to ATKV Games and the management group that is in this webcast. The webcast is represented by myself, Erik Dahl-Rundberg, CEO, and then we have Marcus Dahle who works as CTO and will talk about live operations parts, and Daniel Svensson who works as Head of New Games and will talk about New Games parts. So let's get started. So the first part, or rather the third part, is now finished and during the period we have had a big focus on our new game title, Backpacker Go, which is starting to take shape at the global launch stage. We gave the game title during the third quarter a financial approval and it is the first game title that we give a financial approval according to our new MVP process that we now use in the New Games unit. And I really think that Backpacker Go is a game title that falls very well within our vision The strategy is to be nuanced, to create unique mobile games in the future and something that falls well within our Where Minds Thrive slogan and the feeling we want to have according to our new strategy that we established at the beginning of this year in our reorganization and strategy change. So cool to be able to give a game a financial approval. And financial approval is when we see that the game with A very high probability is that we will have to pay the lowest amount of development costs that the game has had and will have. Of course, we want a lot more than that, but that's the least we think is required to be able to give a game title in New Games a financial approval instead of being put down. So it's great that Backpacker Go has shown Somba's promising keys during the soft launch and tests. During this period, we reached a negative cash flow of about minus 1.1 million SEK. Given that we are working towards achieving a positive cash flow during the year, it is worth highlighting that we are in the third quarter at minus 1.1 million SEK in cash flow. We will talk more about that later in the presentation. We see a challenge in our Live Operations portfolio, that it has reduced revenues a bit faster than we initially expected during the year. But we believe that we will be able to move up this stage with successful launches of upcoming games in the future. Backpacker Go is the closest. We have created a much lower cost base. We see a clear way to profitability if we succeed in these external income flows from new game titles. That is of course very important. And if we look at EBITDA results are significantly improved, landing at about minus 0.3 million SEK compared to minus 4.6 million SEK in the same period the previous year. This is mainly due to lower costs related to UA marketing, but also related to OMA and the lower cost base, of course. We see that our turnover is decreasing while waiting for new titles. That's what I'm talking about, that the turnover of the gaming industry is decreasing. No new title has been released globally during this period, so it is an expectation. Under samma period föregående år så hade vi ju Extreme Makeover som gick ut i lanseringen i augusti som påverkade omsättningen positivt. Och som sagt ingen ny speltitel lanserat under denna perioden det här året. If we look at our games titles, Midsommar Murders is the one that contributes the most, but it is quite evenly distributed between the three biggest, and that is Midsommar Murders, Worthington and Extreme Makeover. If we take a closer look at marketing and user acquisition, we have seen in recent years that it has become a much more difficult UA landscape. It has become more difficult with traceability and analysis. And of course, it has also affected us, like all other mobile game players. During this period, we have chosen to strictly reduce our goal of reaching 100% ROI on the campaign to 180 days instead of 365 that we have worked with for a number of years earlier. This is mainly because we want to focus on achieving significantly better profitability. and further improve the control of UA campaigns in the long run. The stricter goals that we have implemented during the period have given the effect that we have significantly lower UA investments which is an effect of the fact that the games we market, especially live operations, we have not been able to market in the same way as we could before when we worked towards 365-day goals. So now we have much tighter ROI goals and we require a faster release if we are going to market our games. And that's to achieve better profitability within the company. The UAE investment fell on a total of about SEK 1.7 million compared to SEK 4.7 million that was made last year. It is good to keep in mind that last year XG Makeover was also launched during that period. So that drove up the UAE investments a bit then. A positive part of the UA results during the period is that we see that Backpacker Go has exceeded expectations around ROI on campaigns and where we see an improvement all the time when we do updates around monetization and features that are added. So positive results from Backpacker Go's campaigns during the soft launch. Our revenue distribution during the period is 41% through in-app purchases, purchases in the game, and 59% through announcement revenues. We are quite stable around the same level as the previous quarter. What we see is a big difference compared to the same period. Last year we had significantly more in-app purchases And a big reason for that was that Extreme Makeover was launched completely without announcements and no announcement revenue generation in August. We have worked with that during the year or later part of 2023 and into 2024 and implemented an announcement generation also in that game, which has made the distribution more even again. So if we look at the financial results in terms of figures, we have a turnover of about 4.4 million SEK. We reach an EBITDA of about minus 300,000 SEK. An EBITDA result of about minus 1 million SEK. We reach a result after tax Yes, it says wrong here, but the result per share we see here is minus 0.11 SEK compared to minus 0.66 SEK. We have liquid funds of about 18 million SEK at the start of the third quarter. So we now jump on to New Games and I'll leave the floor to you, Daniel.

Thank you, Erik. My name is Daniel Svensson. I'm a co-founder and head of the New Games team at Kivi. I'm working on finding the next growth driver for the company. The main focus of the New Games team during this quarter is to continue working with Backpacker Go. Backpacker Go is a game concept that combines question sport, curiosity about the world and with a training-based game engine in a board game environment. So the player learns and proves their knowledge of cities and places in the world. The game is currently in a new release and as Erik mentioned, it has We have received a financial approval, so we are currently working on a global launch. The key words show potential. Right now, the team is working on setting up the game according to a roadmap. It actually involves three parts of the game. It is the content that involves the game mechanics, The goal is to improve the keyphrase, and that is ArpDAO, but more. And it's actually features, events in the game for the player to do, offers, and a general improvement and balancing of the game is constantly ongoing, where we get a change in the game, take in data, analyze, and see how we should act in the future, as well as a roadmap with We want to have the game at a certain point in time. We also work a lot with the localization of content. Our goal is to have 10 languages ​​for global management. English, French, Italian, German, Spanish and Nordic countries such as Danish, Norwegian and Swedish, Portuguese and Dutch. A trivia game worth having it localized to the language and the effects it gives. At the same time, we also work with scaling up content in the game to support a longer lifespan. And the content in this case is cities with all the relevant content for the cities. And we currently have 39 cities active in the game. and aim to successfully work up the city base where we have a target of 80 cities in the game and then be able to ensure that we have a certain lifespan on the players and content to do. And we have found a very good cost-effective way to create cities for the game. So we feel safe to be able to meet the needs of the city. As I said, we are working towards a global launch. We estimate that this will happen at the end of December, or early Q1 2025, depending on the last pieces we work with in the game Falle på plats. We also have during the period, as you can see in our MBP flow here, where we see that BPGO is in a new release, we also have a game that is post-mortem. It's another DICE game we tested during the period. It was under an internal prototype, where we tested it internally and drew the conclusion that there was nothing to work on further, so we did a post-mortem, analyzed varför det här spelkonceptet inte fungerar och tagit lärdomar av det. Men det är en naturlig process i vår MVP-process att testa, identifiera eventuell potential eller inte. Funkar det inte, jag tror inte att det funkar, så jobbar vi med något annat. Det var från New Game, så jag gjorde tillbaka till dig Erik.

Thank you Daniel.