Qiiwi Games AB (publ)

presentation of bokslutskommunikén for 2024. Vi kommer att köra en genomgång av den rapport vi släppt här nu på morgonen och med efterföljande Q&A-frågestund som vanligt. Finns det några frågor så kan de skickas in via Zoom-klienten under Q&A-verktyget. So we will go through and answer what we think we can answer right now. I think we'll get started and go through the presentation here. Warmly welcome. My name is Erik Dahl-Rundberg, CEO and co-founder of Kiwi Games. Summarizing Boxerskommunikén 2024, we have reached a positive cash flow during the fourth quarter and we have also launched Backpacker Go globally. We have started the global release of the game title, which is the game title that we have focused very much on during 2024 in the New Games business area. Backpacker Go started its global launch towards the end of December and we also reach a positive cash flow under Q4 at about 0.4 million SEK and this positive cash flow is partly due to the cost savings and reorganization we have done in 2024, as well as a realized profit from the sale of a fund placement, which is a way we are working on to maximize the spending on liquid funds. It is also something that we continue to work with to maximize our cash as much as we can. Our goal is of course to create enough play surplus to generate positive cash flow from our gaming business. And this is something that we will continue to work hard on under 2025. So it's a mix of different parts that makes us reach this positive cash flow under Q4, which has been a goal for us under 2024, to reach the later part of the year. The global launch of Backpack Go started in late December and under During this period, we also reached a positive EBITDA result and also profit after tax. The positive EBITDA result ended up at 0.4 million SEK. We have improved the EBITDA result by about 7 million SEK compared to the previous year. under den perioden föregående år så gjorde vi ju mycket investeringar och lanseringar av Extreme Makeover som drev på mycket marknadsförings- investeringskostnader. Så det är en sak som skiljer sig mycket åt plus att vi hade en betydligt större organisation och kostnader relaterat till den. Vi når också vinst efter skatt på cirka 800 000 SEK och det är något som skedde senast Q1 2021. If we look at the turnover during the fourth quarter, it fell to about 4 million SEK compared to 7.9 million SEK during Q4 2023. And then it was mainly Extreme Makeover that drew in revenue, considering the launch and the big UA investments we made to really invest in the launch of the game that we had invested a lot of resources and over a long time. During this period, Backpacker Go is the highest contributor to the turnover. Despite the fact that the global launch started at the end of December. With global launch, we mean that we have increased the UA-investments for the game title. Before that, we have carried out a number of soft launch tests on different markets. This has also driven turnover from the game title. But the large increase in revenue from the gaming industry took place towards the end of December. We see a lower contribution to the revenue from the live operations business. And the three largest gaming viewers related to revenue are Backpacker Go 29%, Wordington 24% and Extreme Makeover 15%. If we look at UA and marketing, during the period we invested about 1.4 million SEK, compared to 6.3 million SEK during the comparison period. And as I said, Extreme Makeovers is the company that made a lot of UA investments during the whole Q4 2023. We started the global analysis of Backpacker Go towards the end of Q4 2024. That means that we still see a relatively low UA investment in marketing. But we also work very... controlled and analyzed the ROAS levels. And we see for Backpacker Go that we had a very good development around reaching the ROAS goals we wanted to achieve for the game. We reached that under Q4 and also at the beginning of the global launch, as well as a bit into Q1, but something where we have seen a more difficult UA climate towards the later part of January and during February. Where we are working hard to turn that trend, to achieve a better performance in our UA results. But it depends on how much we can invest in UA for our games and we are working towards a 180-day goal. max level for us that within 180 days we want to reach 100% ROI and preferably much earlier than that as well. So we work very strictly with our UA-analysis and the investments we make and act when we see that something does not hold, that we cannot start campaigns over longer periods of time because we can clearly see that this will not be canceled. One thing we are also working very clearly with now is that we control our resource allocation. It means faster if we notice that a project does not reach the ROAS goals we want, then we move our resources to other projects, such as new games, for some part, depending on what levels of ROAS goals we reach. If we look at the revenue distribution, it is very similar to the previous quarter under 2024. 38% from in-app purchases and 62% from ad revenue. During the 2023 Q4, we were significantly higher on the In-App Purchase side. This is due to the fact that Extreme Makeover at that time only had In-App Purchase revenue. There were no ad revenue or advertising revenue in the game at that time. Summing up the financial results for Q4, we reached a turnover of about 4 million SEK. We reached an EBITDA result of about 374,000 SEK. An EBITDA result of minus 348,000 SEK. The result for the tax on about 800,000 SEK. We reached a result per share of plus 0.09 SEK. Vi har likvida medel vid utgången av det fjärde kvartalet på cirka 18 miljoner SEK. Jag lämnar över till dig Daniel här för att prata med dig om New Games affärsområdet.

Tack så mycket Erik. My name is Daniel and I am a co-founder of Kiwi and I lead the work with our New Games team. During the reported quarter, like most of 2024, the main focus has been on Backpacker Go and on December 27 we reached the stage of a global launch, which is a milestone for us as we see here in the MVP process is the last stage. The game is in a stadium where we have 65 cities for the players to visit. It's translated into 12 languages. And in the development of the game, we have worked out a process to quickly create more content in the form of cities, questions and that kind of content. And we have also found methods where we can use AI tools to create the content more effectively. an important lesson for us during the process of making the game work. Another lesson we've learned is that BPKV is a game where we have more social functions than before and where we try to integrate it in our games and we see the benefit of it, so it's something we take with us in the future as well. And that's more how we work with teams, players collaborate, collaborate in events and benefit from each other to get ahead in the game and what positive effects it has for game design. As we can see here at the bottom, we have another title in our MVP process. It is a game title that is currently being prepared for a market survey. It is an early test against a selected group of players. And it is something we will have to deal with here in the future. You will be able to follow the results there. I would also like to mention that in our MVP process we have a pre-stage that we call the idea phase, which we do not see here. But it is a phase where we process the ideas we have internally. signals we pick up from the market. So it takes a pre-work before titles come into the MVP process. And in our work with Backpacker Go, we have got the interest for the board game mechanics, as we call it, and the synergies we see with our game segment, where minds thrive, tankenötter, ordpussel, and all those pieces with a board game. So that's something we're going to explore more about here in the future. But that was all from New Games. I'll send it back to you, Erik. Thank you.

Thank you so much, Daniel. So I'm going to unmute myself there. It seems like Ekar is a bit... But we'll move on to the next slide. And there we have the progress of Lab Operations. And I'll hand it over to you, Marcus.

Yes, thank you very much. My name is Marcus Dahle. I'm a co-founder and CTO at TV Games. As we write, during the period we have had a general focus on our games Wordington and Extreme Makeover. Extreme Makeover has now under Q1 passed over 1 million installations and gets continuous updates, new levels, new functions. For example, this week we have launched the function Super Color Bomb in the game, something that you can see in many other match 3 games and something that we have started developing under Q4. We have also, during the Q4 period, changed to the announcement media platform Apploving, which has had a good effect on the announcement revenue in our games. It also opens up a potential new marketing channel through their UA networks and gives us access to even more advertising networks to integrate into our game. At Worthington, we have carried out the partner test that we talked about and wrote in the previous report. It did not give any deeper collaboration right now, but we got very valuable insights about the potential for improvement. We continue to work very effectively. We have a minimal amount of resources and make the changes where we see that we can actually get output and improve the performance of the game. And so we will continue to work in live operations, dedicated and focused. Thank you for me and send back to Erik.

Yes, thank you very much.

And to summarize the bookkeeping communication and focus in the future, there is a continued focus on profitability and on new gains. Looking back at 2024, so har det varit stora förändringar inom vår organisation, inom Kiwi Games. Vi har genomfört kostnadsbesparingar, applicerat och antagit en nyanserad strategi som jag anser ska och är vägen mot lönsamhet för Kiwi Games och tillväxt, givetvis. Och väldigt kul att vi har något ut med en Ny speltidare enligt den här nya strategin i form av Backpacker Go, det är en bit på vägen. Vi ser också att vi behöver mer nya spel som behöver adderas till vårt spelportfölj. Det är där vi fortsätter att lägga fokus. Ledord vi arbetar med är att fortsätta utmana oss själva, våga vara innovativa och and follow the strategy we have assumed and embarked on. We continue with good cost control. We make very data-driven investments, both in the UAE and how we allocate our resources. And we continue with a lot of creativity. Och med de orden så tänker jag att vi går över på Q&A.

Jag slutar att dela här tänker jag. Går vi in på Q&A.

I'll start with a question from Fredrik. Does Backpacker go better or worse than your estimates before the launch? You could say that the title went significantly better initially in its global release than we had expected and estimated. We saw Roa's results a good bit above them. expected values that we thought we would have in order to scale it. And it's also a little mix within the mobile gaming industry and also within the gaming industry in general. The period when we started the launch series of Backpacker Go, which was at the end of December, is usually called the Q5 period, where there is a lot more player engagement and activity in relation to wheel and lead. So we may have been a bit boosted by an effect from that Q5 period. At the same time, when you launch a game on new markets, it is often easier in the beginning when you reach a core audience of players. who loves the game. Then there is always an uncertainty about how much scalability you can get and how long you can keep costs per installation on different advertising networks and how good your advertising material performs. Towards the end of January, mid-January and forward, we have seen a change in how expensive it is to buy in players. And it directly affects the ROAS level of players who come in. So, yes, initially it went much better than we thought, but in terms of sustainability, here under the Q1 so far, we have been on obstacles that do not follow the plan we had, which we are now working hard to try to turn and optimize and test new ways to market game titles. And then over time, when you learn more about marketing campaigns, we will also be able to optimize and find the right players and get better and better throws. But what is an insecurity factor for all the games you launch, and even for Backpacker Go, is how much scalability we can get on that type of optimization, how big the audience is who like this type of game. And we also constantly complain about how how players behave in the game, what they think is good and what they think is bad. We also have a new game prepared for market research, where we bring a lot of that feedback in an upcoming game to come to terms with and test new ways to get more We have another question from Fredrik. Which games contribute the most to the turnover? Which individual games contribute the most to the positive cash flow? Which games generate surplus? I can say that the games that are in the LAB operations are the games that generate the most overshoot, since they don't have the same amount of UA-investments in a global launch phase as Backpacker Go for example, when we try to scale up the game's daily active players. But in Backpacker Go's launch compared to Extreme Makeover's launch, we have had a significant better control of the game under fire that we can tolerate when we launch new games. Backpacker Go has significantly improved than other games we have launched with regard to game over fire. But if you look at the other game titles, it is above all Worthington that is the game title that we market least, but that contributes the most to the number of players. And that's because we have a good player base there that keeps themselves active in the game. The game also contributes to a lot of organic installations, given that it is relatively high ranked on search tools that are available on the different game stores, App Store, Google Play. It's an interesting question that I hope I have answered correctly. Another question from Fredrik. You wrote that most of the U1s go to Backpacker GO, while Worthington contributes with almost the same amount of turnover. This should indicate that Worthington generates a lot more turnover and perhaps your most successful game should not be more focused on Worthington. What is worth mentioning is that we started the global release of Backpacker GO towards the end of December. The UA investments we made during Q4 also had an effect during Q1 and so on. So it's not much of Backpacker Go's turnover that is included in Q4, compared to what we can hopefully produce in the future for the game title. But I understand the question, that it looks similar when we produce it per game title in that way. Under Q4, Worthington has generated a significantly higher number of players than Backpacker Go, but Backpacker Go has invested in growing its player base, similar to what we did for Worthington when we launched that game, which was many years ago. That's how it is for all games that are released, that you, during a period, reach a lower game surplus to be able to scale up and invest in marketing, which you then determine to get back over time. I have a question here, I don't know if it can be something for Marcus or Daniel to jump on from a bass instrument, Invest. Can you tell us more about what you see as so interesting with the board game format?

Well, there are a few different factors, but we have seen that it is popular among the players. It is a format that has attracted interest. Tabletop, as it is also called, is something that many can relate to. It fits the DICE progress mechanism that we are also researching now, which we find interesting. And as we mentioned earlier, it fits well with our direction with Where Minds Thrive, logical puzzles, word puzzles, that kind of game in that format. Samt även att vi i arbetet med Backpacker Go har fått fram en brädspelsmodell som vi är väldigt nöjda med och tycker har en bra kvalitet. Och att de här sammanvägt gör att brädspelsformatet blir intressant.

Thank you, Daniel. Another question from Bastu Tresk in the west. You seem to have another title in the trivia in the MVP process. Can you tell us more about it? Yes. We don't say much about it in the MVP process and in the new game pieces in the report, but it's We continue to dig further into the trivia concept and we have gotten a lot of insights in Backpacker Go now that we have launched that game. We know and believe very much that there is much more to do with the trivia concept connected to board game mechanics. If you look at BP Go, as we call it Backpacker Go, so Yes, there is a lot more to explore about trivia format on questions, to get a more dynamic gaming experience, and also try to focus on a specific player group. So that's what we can say right now. But with the thought that within Trivia and within the concept that we have worked on before with BP Go, there is an expectation in this game title that this will probably go quite quickly with the evaluation of this game title. Then we have a question here that maybe you, Markus, can answer. Can you tell why the partnership with Worthington was cancelled?

Yes, we can absolutely do that. It's not that we have ended up on bad terms with our partner. We agreed that there were a few different ways to improve the game in order to take it to the next level and be a potentially scalable product. Vi kände då själva att vi ville jobba vidare på den här feedbacken själva och utvärdera den och se effekten av den på vår egen kammare tills vidare. Men det är inte sagt att vi inte försöker igen med samma partner. Men vi har flera features på vägen som vi tror kan förbättra det ytterligare. Men för nu ligger spelet i våra händer. Det har vi gjort då också. But we'll take it further in the meantime.

Exactly, and if you look at Worthington, it has actually happened a lot lately. There are some new features there, and we're also testing some new onboarding, I know. We have also added a new feature that is a form of Tamagotchi experience with a house animal in the game that the character has, which is interesting. Plus we are testing a new onboarding where the player comes directly into the crossroad instead of focusing more on the inventory meta. So it's an exciting test for Worthington. So har vi en fråga till och från Adam. Om Backpacker går sämre nu än förväntat, om ni inte lyckas vända den trenden, vad var då konsekvensen av det? And in short, the consequence of that is that we then have to go out and find a new game to launch that will cover up what we haven't gotten from Backpacker Go in that case. according to our expectations. So back to the MVP process, work further with the insights we have received and get new game titles out in soft launch and tests and evaluate further. We have, as we have mentioned, and will have a great focus on the board game platform we have built up. We have a very effective It is effectively used by AI, both in trivia content generation and in visual generation. So we can now scale up the whole travel theme and travel world much faster than we could before with any other game. And then evaluate other types of game mechanics on this format. It doesn't always have to be trivia. We also have other game mechanics that we work with and have experience with. So I think it's very exciting and a niche of game titles that I think we can stand out on the market with. But at the same time, of course, we are working on turning this ROAS trend, Return on Ad Spend trend, that we see in Backpacker Go now in the last period, to get better and better in the future. And we continue to work with Backpacker Go. We still have resources allocated to that game title to optimize and create new features and add more content. Good. Those were the questions we received. I think we will end here and thank you for participating in the webcast. I hope you will continue to follow the journey with KiwiGains. A lot is going on and we have taken big steps during 2024 and now så satsar vi stenhårt för 2025 och fortsätter på vår inslagna väg. Webcasten kommer att göras tillgänglig på vår hemsida för att se på efterhand om man önskar. Tack för ert deltagande.