Qiiwi Games AB (publ)

Hello everyone and welcome to the QVGames presentation and the first quarter of 2025. My name is Erik Dahlrenberg, CEO and CEO of QVGames. We go through the quarter on a number of slides. We will also have participants from Daniel Svensson, Head of New Games, and Marcus Dahle, who is responsible for Live Operations and is CTO at Kiwi Games. And after that, we have a Q&A question time where it is possible to ask questions to the company where we answer what we have the opportunity to answer.

And we start.

If we look at the first quarter, we sum up that we have had a high efficiency in the organization, but that Backpacker Go does not really reach the whole way. During the quarter, we have Backpacker Go has been our main focus in connection with the fact that the global launch started at the end of December. I will talk more about the outcome of the launch so far and how we have worked with the game title. During the quarter, we have since allocated more resources to New Games. so that we can quickly develop more game ideas and so that it is possible to achieve greater scalability than what we have so far seen from the results of Backpacker Go. If we look at our EBITDA result, we achieve an improved EBITDA result compared to the previous year with about 1.4 million SEK. We still have a negative result of 1.6 million SEK. And we can see in the graph that we have a sequentially reduced EBITDA compared to Q3 and Q4 of 2024. And that we have a reduced GDP is mainly due to the fact that we have launched Backpacker Go, where we have increased the marketing investments and that these investments have not met the expectations that we had hoped for. We see A sequentially increased turnover from the gaming industry is also related to the launch of Backpacker Go. On the other hand, we have a turnover of 4.9 million SEK compared to 6.1 million SEK with the same amount in previous years. And if we look at the three biggest titles in the industry related to revenue, Backpacker Go has come up 54%. So that title itself has been very important for us to get out. It builds a lot of revenue for us. At the same time, we see that Worthington is at 17% and Extreme Makeover at 10%. It is a problem that we have also struggled with, that our live operations portfolio's turnover falls too quickly compared to what we have expected, which also affects the turnover itself. But it is positive that Backpacker Go has come up and stands for such a large part of the turnover. It is a new game title that will be important for us in the future and there are many more things to test with this game title and work with in the coming periods that we will talk more about. If we look at UA marketing, har vi legat på ungefär liknande nivå. Vi var i UA-investeringen som vi hade samma period för några år. Vid den perioden så jobbade vi fortsatt en del med Extreme Makeover och gjorde en hel del marknadsföringstester. Under den rapporterade perioden så är det Backpacker Go som har erhållit majoriteten av UA-investeringarna under perioden. In addition to Backpacker Go, we continue to do some UA for Worthington at a low level. But it is Backpacker Go and Worthington that we work with in the current UA work. If we look at the key word ARPDAU, it is at a record high level during the reported period. And we see an increase of 36% compared to the same period the previous year. And the increase is due to Backpacker Go, which has a significantly higher ARPA and a game portfolio average, which is positive. One should also mention here that The key word is positively influenced by the fact that we have bought in and invested in players who have a high ability to make purchases in mobile games. Which is the type of player that has proven to be the best throwback on the UA campaign for Backpacker Go. So the player base that Backpacker Go has generates a very high ARP down for us compared to other game titles in the portfolio, which is positive. We have also seen a positive effect about revenue per annum that seems to be positive. And part of this is the migration that we have worked with Apple from IronSource, which we have seen to have a positive effect on revenue per annum. And another part about the high value we see here is that The investment I mentioned about high value players for Backpacker GO also generates higher ad revenue from that type of player. So, positive development for ARKDAO. This is also a key word that will be a clue. It is worth mentioning that when our daily active player base decreases, we get a more concretized player base that is a very good player and active players. So you should also have in mind that when the DAO base decreases, it is quite so generally that ARP DAO will be positively affected by those players who are left. We definitely want to highlight that Backpacker Go has a significantly higher ARP DAO than our other game portfolios, and that is the game title that raises the ARP DAO on these levels. Summary of the financial results, Q1, we see here. I'm not going to rattle them up and down, but liquid funds of about 16.5 million SEK at the beginning of the first quarter is a bit of new information than what I mentioned before. If we look closer at the New Games business area, where we still have Backpacker Go listed, we started the global launch of Backpacker Go at the end of December. We got a very good start at the launch, where we reached ROAS levels significantly above our target levels. This was during a period under Q5, when there was a lot more engagement. Many are free, it's Christmas and weekends during December and even into January. So it's a good period for mobile games during the period when we also launched the game. But towards the end of January and February, we started to have difficulties to keep up with campaigns and add cheaper installations. fall our expected release of campaigns, which means that we have to hold back investments in marketing and thus not succeed in reaching the growth of Backpacker Go as we expected during the Q1. But we have continued to work very much with different types of marketing strategies for the game. We see more opportunities in the future to above all, to reach a stability level for the game. That it maintains a stable income level. And we will continue to work with more content and more functions. And right now, during the quarter, we have been working a lot on, considering that we see that the game as such will not be the game that leads us to the growth we want to have and the profitability we want to have, we are currently preparing the game for Lab Operations Stadium. So we are working on a lot of exciting functions right now, which we hope will be able to Activate players much more than what we do today with cities. We will add something that we call Star Destinations, which means that you will be able to travel to different types of destinations that are not cities but more exciting destinations with event functionality where you compete in teams against each other. So there are exciting things going on in Backpacker Go, but it's not the game that takes us to the growth we want and that takes us out of the problems we have with profitability. So that's why we have to focus on new games and there we have a great activity and great speed now, so I'll hand it over to you Daniel.

Thank you, Erik. My name is Daniel. I am the co-founder of Kiwi and the head of Kiwi's New Gains department. And as you can see at the bottom of the screen, you can see the current status for our MVP process, which we use to release new games. Where it is, apart from Backpacker Go, a Roader activity. And during the period, the New Games team has had a focus on exploring another trivia game, and also this in the category Board. and where we, during a period of six weeks, tested and evaluated a game concept. Unfortunately, we did not reach the key that we wanted to reach in order to motivate further development, but a post-mortem was carried out where we evaluated and took lessons from the project, and it is down to the right there. But to maximize the value of previous development efforts, we have another project in progress in the category Board. It is a game concept where we investigate the potential of combining the game modes Board and Word. And we are currently working on a market survey for testing on players to get data. And it is something we hope to get started here in the days. It is under market survey. Other than that, we also have a game project in the phase of an internal prototype. It's a category in Word, where we explore synergies between word games and a popular game format right now, where we've identified a potential opening in the market. It's an internal prototype, but we're trying to take it forward in the flow. As you can see with the PR process down, it's activity in the research for the next game title to be released globally. And we are following a systematic workflow now, where we can quickly get insights and challenge our assumptions about the ideas to get answers. And as soon as possible, without rushing ourselves, get answers to whether there is potential around the game idea when we test. And where we also use a post-mortem process for successful projects that will give us lessons to succeed with upcoming projects. Work quickly, take the lessons and move forward. That was all from New Games. I'll hand it over to you, Erik.

Thank you very much.

We will now move on to Live Operations, and we'll hand it over to you Marcus.

Thank you very much. My name is Marcus Dahle, I'm a co-founder and CTO at Cube Games. If we start with Extreme Makeover, we have during the period continued to launch more levels and content in the game. We have also launched the function we call Super Color Bomb during the first quarter. which is activated by clearing many levels in a row. This is something that is repeated in many, or almost all, modern matchmaking games, and something that the players really like. For Worthington, the same thing applies. We have launched new content, new functions, and above all, we have linked the bag around the story itself in the game. Something that the players have really appreciated, and that has taken a bit of time. But it's nice that they were able to link all the threads together. At Branded Games, together with Bandage, we have agreed to extend the agreement for Extreme Makeover and Masterchef by two years. This ensures that a part of the Live Operations portfolio's turnover can be secured in the future, and at the same time, we will have the opportunity to make further improvements in the game to get even more of the investments we have made on those fronts. The other game titles have also received minor updates and are using improvements. We have continued the migration to Apploving for the games that have not yet been made. And now the absolute majority of all ad revenue is generated via Apploving. So a lot of that work can be seen to be done. With that, I'll pass it back to Erik.

Yes, thanks so much. And then we'll move on to the next slide.

To sum up the quarter and where we are right now. We are really going to say that we would like to hope that we will be able to scale WPGO to higher levels. But we have a lot of positive things in our organization and within the company as well. We are a smaller organization, so when we see that something doesn't work, we can quickly change focus and try again and in that way have a good efficiency within the organization. We are also now seeing additional cost savings within our organization. And then it is worth underlining that we already work a lot with AI in our workflow. And we believe that there is a possibility to continue to be very effective by further implementing more AI in our workflow. Both related to game development, but also content management and also how we build upcoming new game titles. Where there are enormous opportunities for how much content you can create and what type of game titles you can create to simply build new streams of income in relatively simple ways. Vi kommer jobba med en betydligt snabbare itereringsprocess framöver. Vi kommer sätta högre krav på det. Vi kommer nu jobba med att utbilda prototyper på veckor istället för månader, vilket är något vi ser som ett måste för att Yes, simply be able to evaluate so many game ideas and prototypes that are needed to find one that can get powerful growth and profitability for. So we will increase our pace around that. And of course, our goal now is to find the next game that focuses on growth and profitability. Continuously engaged in a well-structured process where we have a systematic work in the work we do and where we also take experience and learning from game ideas that have not been succeeded. Prove to be something that we can scale and build growth and profitability on. Det var det vi hade i den generella presentationen. Det finns mer att läsa om i själva rapporten, gällande nyckeltal och så vidare. Men då går vi över på QA-frågestund. Jag går över till Zoom här och slutar dela min presentation nu.

Q&A.

The first question is from Kalle. ArpDAO seems to be record high. What does that have to do with it? Yes, as we talked about on the slide, ArpDAO in the presentation, it is mainly Backpacker Go that is the title that drives up ArpDAO during the quarter compared to earlier. The other titles are on relatively similar levels as they have been before. Backpacker Go, we have run these high-value UA campaigns where we aim to find players who are buyers. Most of the UA campaigns during the period have been focused on that type of player. And that type of player gives a high conversion rate, which can also be seen in the keys that are in the report, that the conversion rate has also increased and come up to levels as we were at the launch time of Extreme Makeover. But also that we have an Ads ARP DAO that has increased during the period. And that is partly due to Apple having seen a positive effect. But also that we have a relatively okay ads monetization in Backpacker Go. The problem with Backpacker Go is that we have a hard time reaching a very large player base that gives a very good retention to scale up the game. So there is a click, a player base, a relatively small base, a group of players who really love this. And there are many different countries that the players come from. But there may be another question here regarding Backpacker Go. But ArpDAO depends primarily on Backpacker Go's effect. It's a game that we have managed to get to a high ArpDAO. So we have en från Christian Östman Givet hur svårt det verkar vara att lyckas få spel med 180 dagars återbetalning att fungera har ni planerat att testa spel med andra strategier där det finns möjlighet till kortare återbetalningstider? Ja Jag skulle säga att det är a pretty clear trend shift that many are trying with that and with our competence and knowledge in food monetization, it is something that we definitely discuss and have in mind. 180 days is the maximum that we can tolerate when we do our UA in the current situation. Then there are many types of campaigns we run where we focus on Here we have to see 90 days, because those campaigns will not develop better after that date, for example. So we are already working today with some campaigns and campaign types with shorter repayment time. A lot of different networks have different ROAs, and you can set in ROAs goals based on what you want to optimize Based on how your game performs, the campaign itself will be able to market or spend capital and buy players for you. So if we have a well-functioning game, both monetization and retention-wise, we will definitely be able to optimize for shorter times than 180 days. So yes, there are thoughts about shorter repayment times and building that type of game as well, because I think AI Generated content and that type of mindset will be very important for us in the future. And then a faster repayment time for games can definitely be something that fits very well. Another question from Kristian. Switching from Iron Source to Apple of In mediation, do you think it will contribute new possibilities on the UAE side? For example, think of Apple of In's day 28 campaigns, which have shown good results for many studios in recent years. Yes, there is a big advantage there. If you have Apple Avin's Max Mediation, you can also do Adroas campaigns and ROAS campaigns in a more efficient way. We have also tested Backpacker Go on Apple Avin and unfortunately have not seen the positive effect for that game. But... Yes, now that we are on Applovin and all new games are coming to Applovin, we have that possibility much easier than with other games earlier. Then another question from Christian. Given that Backpack & Go did not succeed in that way, you hoped for Yes, it is common that CPI goes up from small levels. The problem with Backpacker Go is that it's very difficult to know in advance how big, for example, a soft landing period is, how big a goal and cohort is, or the type of players that you often get in early. a game, how big it is and how big you can scale up to the type of games that you have received information about during the soft launch and test phases. And that you also see very early in a global launch when you open up the game to more markets. But yes, we have taken a lot of learnings and above all in the big whole look more in the big perspective how Is there any other similar games out there? And how big is the turnover of those games? Can we come in and take a part of this cake in a relatively simple way or not? To do a better analysis early there is of course a very important part in the development of new games. And that's something we have now in our new processes and how we work today. to have a better structural process around building hypotheses and expectations. And are expectations, and are there any, proven games with similar game mechanics that have a reasonable success rate and reasonable level of turnover that we think is interesting, then it is not any type of game that we should focus on, because then it is too high a risk. When you test a prototype, which copies are you looking at first to decide if you can take it further? It was also from Christian there. There are different steps when we test a game, but in early prototypes it can be that the player completes a certain number of levels, but the most important key word is still the retention levels, see if players come back on day one, day three or day seven. Which is a very clear signal that a player likes the game and wants to spend their time there. If you have that number in place, there are very good conditions to be able to monetize the game well in the future. We have another question from Kalle. Are you working on more ideas for new games? Daniel, you mentioned some ideas that we are working on, but I don't know how much we can say.

There are two ideas that exist during development and research. As I mentioned earlier, we have an idea bank, which is actually a precursor to the MVP process, where we have our ideas collected. critically examine them early and ask questions about the ideas that we need to answer before we start production. So when an idea reaches an internal prototype, a basic work has already been laid out for an idea. With things, what do we have to find out about this idea? What are the key points that we have to prove work first? So it's an idea bank where we Thank you for that, Daniel.

Det var de frågorna vi hade här och nu.

Vi tackar för den här presentationen. Den kommer att göras tillgänglig på hemsidan i efterhand att ta del av, och på vår YouTube-kanal. Vi tackar ni som kom in här och lyssnade live. Tack för att ni följer Kiwi Games resa. Vi hörs snart igen.