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Next Games Corp. Half-year Review 2019 – Revenue grew 83%, profitability improved significantly
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Next Games Corp. Half-year Review 2019
Revenue grew 83%, profitability improved significantly
April-June 2019 in short
- Revenue was EUR 9.4 million, an increase of 65% compared to Q2 2018 (EUR 5.7 million)
- Gross profit % increased by 3 percentage points and was EUR 5.7 million, 60% of revenue (EUR 3.3 million, 58% of revenue)
- Adjusted operating profit improved 75% and was EUR -0.5 million (EUR -2.0 million)
- EBITDA improved 96% and was EUR -0.1 million (EUR -2.4 million)
- EBIT improved 55% and was EUR -1.1 million ( EUR -2.4 million)
- Product development costs were EUR 2.0 million euros (EUR 1.8 million).
- Number of employees was 108 at the end of the quarter (132)
- At the end of the review period, the company’s cash balance was EUR 4.7 million. The company’s longer term goal to consistently remain cash flow neutral has proceeded according to plan as the cash balance was EUR 4.8. million at the end of Q1
- The company successfully renewed its credit limit guarantee during the review period. As a part of the full assessment of additional financing, the company is negotiating with credit providers about new terms for the credit limit.
- The company announced a collaboration agreement with Netflix to develop a mobile game based on Stranger Things series for 2020
January-June 2019 in short
- Revenue was EUR 19.2 million, an increase of 83% compared to H1 2018 (EUR 10.5 million)
- Gross profit % increased by 1 percentage point and was EUR 11.2 million, 59% of revenue (EUR 6.0 million, 58% of revenue)
- Adjusted operating profit improved 56% and was EUR -1.8 million (EUR -4.1 million)
- EBITDA improved 69% and was EUR -1.5 million (EUR -4.8 million)
- EBIT improved 29% and was EUR -3.5 million (EUR -5.0 million)
- Product development costs were EUR 4.7 million (EUR 3.6M).
(Numbers in brackets refer to the corresponding year-on-year period unless otherwise mentioned)
Key Figures
| 2019 | 2018 | 2019 | 2018 | 2018 | |||||||
| EUR thousand | 04-06/2019 | 04-06/2018 | Change | 01-06/2019 | 01-06/2018 | Change | Full year | ||||
| Revenue | 9,395 | 5,689 | 65% | 19,224 | 10,477 | 83% | 35,245 | ||||
| Gross Profit | 5,670 | 3,273 | 73% | 11,250 | 6,034 | 86% | 21,294 | ||||
| Gross profit margin % | 60% | 58% | 3ppt | 59% | 58% | 1ppt | 60% | ||||
| Operating Result (EBIT) | -1,100 | -2,448 | n/a | -3,495 | -4,954 | n/a | -16,915 | ||||
| Operating result margin % | -12% | -43% | 31ppt | -18% | -47% | 29ppt | -48% | ||||
| Adjusted Operating Result* | -497 | -2,007 | n/a | -1,809 | -4,072 | n/a | -13,777 | ||||
| Adjusted operating result margin % | -5% | -35% | 30ppt | -9% | -39% | 29ppt | -39% | ||||
| Depreciations and Amortizations total | 993 | 70 | 1,985 | 140 | 2,165 | ||||||
| IFRS 16 | 256 | – | 512 | – | 512 | ||||||
| Amortizations of R&D & Licenses | 579 | 30 | 1,157 | 60 | 1,248 | ||||||
| Other | 159 | 40 | 316 | 80 | 405 | ||||||
| Earnings per share, EUR | -0.08 | -0.12 | -0.22 | -0.30 | -0.99 | ||||||
| Earnings per share, dilluted EUR | -0.08 | -0.12 | -0.22 | -0.30 | -0.99 | ||||||
| Current Ratio | 1.15 | 3.92 | 1.15 | 3.92 | 1.53 | ||||||
| Employees (end of period) | 108 | 132 | 108 | 132 | 143 | ||||||
*Adjusted operating result is an non-GAAP measure and differs from EBITDA as it excludes IFRS 16 depreciations and include IFRS 2 adjustments for share based payments. Management uses this Non-GAAP measure as an alternative to EBITDA to analyze the profitability of the business. Please see reconciliation of Non-GAAP measurements
Current ratio is an alternative measure which is calculated by dividing current assets such as cash and short-term receivables to current liabilities. Current ratio measures the liquidity of the company.
Reconciliation of Non-GAAP Measurements
Adjusted Operating Result and EBITDA
| 2019 | 2018 | 2019 | 2018 | 2018 | ||||||
| EUR thousand | 04-06/2019 | 04-06/2018 | 01-06/2019 | 01-06/2018 | Full year | |||||
| Operating Result (EBIT) | -1,100 | -2,448 | -3,495 | -4,954 | -16,915 | |||||
| Depreciations total | 993 | 70 | 1,985 | 140 | 2,165 | |||||
| EBITDA | -107 | -2,378 | -1,510 | -4,814 | -14,749 | |||||
| IFRS 16 | -256 | – | -512 | – | -512 | |||||
| IFRS 2 share based payments | -134 | 371 | 213 | 742 | 1,483 | |||||
| Adjusted Operating Result | -497 | -2,007 | -1,809 | -4,072 | -13,777 | |||||
Current Ratio
| EUR thousand | 30.6.2019 | 30.6.2018 | |
| Current assets | 10,598 | 23,300 | |
| Current liabilities | 9,247 | 5,937 | |
| Current Ratio | 1.15 | 3.92 |
Chief Executive Officer Teemu Huuhtanen
Next Games continued to strongly focus on renewing its operations during the first half. We successfully completed the first step of the three-step turnaround project; balancing and stabilizing the company’s cost structure to a new level.
The company previously communicated that it aims to achieve a monthly fixed cost level of approximately 1.1 – 1.2 million euros. The cost savings program was successfully implemented and we achieved a 1.2 million euro fixed cost level during the second quarter. The company’s profitability continued to improve during the second quarter. Adjusted EBITDA was -0.5 million euros during Q2 2019, whereas it was still -1.3. million euros in Q1 2019. The company’s long term goal towards remaining consistently cash flow neutral has therefore proceeded as planned.
Next Games revenue grew 83% compared to January-June 2018 and 65% compared to April-June 2018 period. Our World achieved another record-breaking in-app purchase ARPDAU of 0.34 Euros in June. The game still experienced challenges with retention however, and thus the marketing investment level was on a higher level than the company’s objectives. The team now focuses on improving the game’s retention and further developing the product.
In order to achieve revenue growth, the company has actively developed it advertisement revenue model. The company implemented video ads, similar to No Man’s Land, to Our World mid-June 2019. Additionally, the company has piloted an innovative location-based ad solution for Our World with a significant global partner with promising preliminary results during the first half of 2019.
The second step of the turnaround plan, rebuilding the company’s product development pipeline according to its new focus, has started off well. Our new operating model focuses on reusing existing technology and code, which has the potential to significantly reduce product development times. The collaboration with Netflix on a mobile game based on the Stranger Things series, that received significant international media attention after its announcement in July, has been built utilizing the new practices. The company has continued active discussions over potential collaboration with other significant international license holders.
Thanks to the renewed game development process, the company has initiated multiple new projects in the prototyping and concepting phase. It’s important to have a robust early development pipeline, as it’s typical for the mobile games industry that only a portion of the games in development are published to the market. At the moment, 46% of the company’s personnel works on live games and 42% on new projects.
Third, and the final step of our turnaround project, is to secure additional funding for future investments such as new product development and marketing. Thanks to the stabilized business operations, the company is in a good place to continue assessing alternatives to strengthen its financial position.
I would like to warmly thank our staff and our board of directors for the extraordinary contribution to achieve the turnaround this far. I am especially pleased about the enthusiasm surrounding the building of our new product portfolio.
Business Outlook 2019
The company seeks moderate revenue growth during 2019 compared to 2018 and, as a result from the changes in its cost structure as a first step, strives towards remaining cash flow neutral in the longer term. As part of cost restructuring, the company estimates it will achieve monthly savings of approximately € 550 thousand in salaries, administrative costs and product development costs, totalling approximately € 6.5M on a yearly basis as compared to the second half of 2018.
Basis for Outlook 2019
The company’s estimates are based on the assumption that The Walking Dead: No Man’s Land and The Walking Dead: Our World maintain their current revenue levels. In addition, the outlook is based on game development staying on schedule and on target of launching one game per year.
January-June 2019 Audiocast
Next Games holds an English audiocast and phone conference on July 26 2019 at 10.30 EEST. You can join the audiocast by using the following link: https://nxtg.ms/2XVv9LU. More information about the audiocast and phone conference: https://nxtg.ms/2JFGXZU.
Next Games in Short
Next Games is the first publicly listed mobile game developer and publisher in Finland, specializing in games based on entertainment franchises, such as movies, TV series or books. The developers of the critically acclaimed The Walking Dead games redefines the way franchise entertainment transforms into highly engaging service-based mobile games. In summer 2018, Next Games launched The Walking Dead: Our World, which utilizes cutting edge AR technology and is powered by Google Maps. Currently Next Games is working on multiple new games based on popular entertainment franchises including, Blade Runner Nexus, for the popular Blade Runner franchise and a mobile game based on Netflix’s Stranger Things.
Additional information:
Saara Bergström
CMO
[email protected]
+358 (0)50 483 3896
Certified Adviser: Danske Bank A/S, Finland branch, tel. +358 10 546 7938
Attachment
Source: European Gaming Media
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: Next Games Corp. Half-year Review 2019 – Revenue grew 83%, profitability improved significantly
The iGaming industry is advancing at breakneck speed, driven by technological innovation and evolving player expectations. Itai Zak, Executive Director of iGaming at Digicode, emphasizes the importance of bridging client aspirations with customized business solutions. Key trends shaping the future of iGaming include live dealer games, blockchain integration, artificial intelligence (AI) and machine learning (ML), enhanced personalization, and shifting regulatory environments. Let’s delve into how these trends influence the industry, presenting new opportunities while paving the way for future growth.
A Closer Look at Emerging Trends
- Live Dealer Games
Live dealer games are revolutionizing the online gaming experience, blending the best aspects of land-based casinos with the convenience of virtual gaming. Players can now engage with real-life dealers via high-definition video streams, enhancing the social component of online gambling. This bridge between physical and virtual casinos introduces interactive features like live chat and immersive gameplay. Industry leaders like Evolution Gaming and NetEnt are setting new standards in player engagement with innovative game formats and top-tier studio setups, redefining the realism and appeal of live gaming.
- Blockchain and Cryptocurrency Integration
Blockchain technology is transforming iGaming by offering unparalleled transparency and security. With blockchain’s ability to enable provably fair gaming, players can verify that each round is fair via an immutable ledger. Cryptocurrencies like Bitcoin and Ethereum facilitate faster, more secure transactions, catering to tech-savvy players who value privacy. Platforms like Bitcasino.io are leading the way, leveraging blockchain to ensure fairness and seamless payments. However, the rise of blockchain also attracts regulatory attention, requiring operators to balance innovation with compliance as governments navigate this new technology.
- Artificial Intelligence and Machine Learning
AI and ML are instrumental in enhancing player experience and operational efficiency. AI algorithms analyze player behavior in real-time, offering personalized game recommendations and promotions. Additionally, AI-powered chatbots provide instant customer support, improving user satisfaction. AI-driven predictive analytics also help operators fine-tune marketing strategies based on player preferences. Companies like Bet365 are already using these technologies to stay ahead of the competition, offering more personalized and efficient gaming experiences.
- Richer Personalization and Engagement
Personalization has become crucial for iGaming operators looking to boost player satisfaction and retention. By leveraging data analytics, companies can offer tailored game recommendations, dynamic bonuses, and individualized promotional offers. This level of engagement enhances the player experience and strengthens loyalty. Industry pioneers like DraftKings and FanDuel push the envelope by offering highly customized features, such as personalized fantasy sports leagues and bespoke betting options.
- Regulatory Changes and Market Expansion
The constantly evolving regulatory landscape offers both challenges and opportunities for iGaming operators. As more regions legalize various forms of online gambling, companies gain access to new markets. With their large populations and increasing internet penetration, emerging markets like Brazil and Nigeria represent lucrative opportunities. However, navigating the diverse regulations in these markets requires agility and strict compliance with local laws to succeed.
- Enhanced Payment Solutions
With digital transactions becoming the norm, the demand for fast, secure, and flexible payment methods is skyrocketing. From digital wallets to instant banking and cryptocurrencies, players expect payment solutions that offer convenience and security. This growing demand is driving innovation in payment processing, giving operators more opportunities to streamline the transaction process while building trust with users.
Future Implications
The Expanding Role of AI and Blockchain
AI and blockchain are not just current trends, but they are poised to play an even more significant role in iGaming’s future. As AI technology evolves, more sophisticated algorithms will emerge, enabling real-time adaptation to player behavior and preferences. Blockchain’s application may extend beyond transparency and security, transforming game mechanics and player interactions potentially redefining how games are designed and played.
Shifting Player Preferences
Player expectations will continue to evolve toward immersive, interactive experiences. As Virtual Reality (VR) and Augmented Reality (AR) become more mainstream, they will significantly influence the future of iGaming. Players will demand more engaging, lifelike environments, pushing the industry to create innovative game formats and features that offer deeper immersion and entertainment value.
Regulatory Developments
The regulatory environment will continue to evolve, and iGaming operators must stay agile to navigate future changes. New regulations may increasingly emphasize responsible gaming and player protection, influencing platform design and operational practices. A more harmonized regulatory framework across jurisdictions could provide stability while requiring operators to prioritize compliance.
Integrating Emerging Technologies
Technologies like 5G and edge computing are set to revolutionize iGaming by enabling faster, more reliable connectivity. This will allow for more complex game designs and real-time player interactions, opening new avenues for innovative gaming experiences. As these technologies mature, operators will have greater opportunities to differentiate their offerings. The potential of these emerging technologies to revolutionize iGaming is truly exciting and promising for the industry’s future.
Final Thoughts
The iGaming industry is on the cusp of significant transformations, driven by technological advancements and shifting player demands. Innovations like live dealer games, blockchain integration, AI, ML, and enhanced personalization are just the beginning. As the industry evolves, staying ahead of these trends will be critical for operators looking to thrive in an increasingly dynamic environment.
At Digicode, we are constantly exploring new technologies and refining our solutions to meet the evolving needs of our clients. Our focus on adaptability and foresight ensures that our clients are not just keeping pace with the industry—they’re leading it.
The post Innovations Redefining iGaming: What Operators Need to Know appeared first on European Gaming Industry News.
A partnership between game developer Turbo Games and iGaming solution provider and aggregator Slotegrator began in November 2022 via the APIgrator game integration solution. Since then, the collaboration has been developing successfully — and now it’s time to analyze what made it successful.
Turbo Games has noticed how the new technologies spreading throughout the industry can work for the good of brand transparency and player loyalty: “We can already see how blockchain technology has made it possible to make betting checks more accessible to players. All you need is a blockchain-hash and a decoder service. We think we will continue to move in this direction. Many traditional online casinos do not offer the possibility to check the bet. Sooner or later we all have to come to this. Perhaps the development of artificial intelligence will help here, because we are already seeing its involvement in all spheres of human life.”
Turbo Games specializes in provably fair games. Provable fairness is a concept where players can verify their wins or losses using blockchain technology — the outcome of the game is dictated by a smart contract and is absolutely random, barring the possibility of any human involvement. Using cryptographic hashing algorithms, the gambling site and the player’s device both generate seeds (random strings of numbers). Players receive a key that allows them to check the results; if the results are the same as the game round they witnessed, it proves that there was no foul play.
According to statistics from Turbo Games, the audience for provably fair games is mostly between 18 and 25 years old. However, there are also players aged 35-40 who prefer traditional games but would like to try something new, and have turned their attention to provably fair games.
There are good odds that the technology of provably fair games will become more popular, if not even commonplace, because it gives players a feeling of transparency and proves that the business is trustworthy without the need to search through dozens of reviews. Whereas many innovations in iGaming simply add entertainment, provable fairness addresses security concerns and reassures players that they’re not being exploited, which is invaluable.
Provably fair games are beneficial for both players and online casinos. Vadim Potapenko, Head of Sales at Turbo Games, comments: “It often happens that the users are not satisfied with the result, because gambling is not only about big wins, but also possible losses. By allowing them to check the fairness of a bet, we make life easier for platforms and players. Of course, this allows us to communicate with partners and users that we work honestly and that’s why they should trust our games.”
Ayvar Gabidullin, Business Development Manager at Slotegrator, adds that “this type of game is now becoming more and more popular and has great potential for both players and game providers in the future. On the part of the player, the advantage is that the player can always be sure that his game is fair and he can independently check any of his bets. And for the game provider, this also simplifies the process of implementing casino games, since now it will not be necessary to obtain the appropriate certificates from independent laboratories before launching new games, they can immediately enter the market with these games and where anyone can check the result and make sure that that there is no cheating with players. Many game providers are starting to look towards this type of game. And as far as I see, many operators are starting to think about adding these games.”
What do players in 2023 need? The iGaming industry is all about reputation and trust. Players have a huge number of platforms to choose from, making them pickier and pickier. There’s an abundance of forums where players leave reviews, so if players view a brand as untrustworthy, there are plenty of places they can share their opinion. Provable fairness not only stops that from happening, it provides evidence to the contrary, giving players something else to talk about.
Slotegrator also recommends investing time and effort into localization and creating an effective and detailed marketing strategy — before trying provably fair technology players need to get to the platform, and there is no acquisition without marketing.
ABOUT SLOTEGRATOR
Since 2012, Slotegrator has been one of the iGaming industry’s leading software and business solution providers for online casino and sportsbook operators.
The company’s main focus is software development and support for online casino platforms, as well as the integration of game content and payment systems.
The company works with licensed game developers and offers a vast portfolio of casino content: slots, live casino games, poker, virtual sports, table games, lotteries, casual games, and data feeds for betting.
Slotegrator also provides consulting services in gambling license acquisition and business incorporation.
More information: https://slotegrator.pro/
ABOUT TURBO GAMES
Turbo Games — a provably fair games provider that belongs to Turbo Stars company — has an ambitious goal to establish widespread recognition throughout the iGaming world. Even though it is young, the company consists of professionals who have been working on the brand for over five years and are even planning to introduce a new brand for a wider audience soon.
Turbo Games also works in Europe, India, and South Africa, where the company sees the most potential and expects the same “hype” as in Brazil.
The portfolio of Turbo Games consists of 21 titles, including well-known games like Mines, Crash X, DoubleRoll, Hi-Lo, and Plinko. The studio releases a game every month. However, not all games are developed from scratch. Wicket Blast and Spin Strike, the last two releases, are based on cricket and the Indian Premier League. Crash X remains the most popular fast game in the Turbo Games portfolio, and the studio reports that crash games enjoy stable levels of popularity. Overall, the main focus of the brand is provably fair games.
More information: https://turbogames.io/
Looking to take your career to the next level in the games industry? Then, Nordic Game Talents is the place to be! Games Factory Talents has teamed up with Nordic Game to bring you Nordic Game Talents.
From Oct 27-29, the online and interactive event is dedicated to recruitment and career building in the creative & games industry within the Nordic region. The event empowers participants to be part of a bigger community and motivates them to explore new paths in achieving their career goals.
Hiring creative & games studios – Supercell, Funcom, Panzerdog, Tactile Games, Gamecan, Fingersoft, Dazzle Rocks, Redhill Games to name a few from the Nordic region will be participating in the event. These studios will share information on their latest projects, work culture and what it takes to be part of their team. The individual games associations from Finland, Denmark, Sweden, Norway and Estonia will share insights through live sessions on the booming games industry in their respective countries. Career development topics pertinent to job seekers like – How to have a successful first interview, Creative Portfolio reviews will also be discussed.
Experienced game industry professionals and individuals beginning their careers from around the world are welcome to join the event. One-to-one interviews with the hiring studios can be scheduled through the event platform. A great opportunity to get to know the studios and network with game professionals from around the world.
Participating in the event
As a job seeker attending Nordic Game Talents, take a few minutes to fill out a simple registration form. After filling the registration form you will receive a link to the online event platform – PINE, to join the event on 27th October. Participants joining Nordic Game Talents will also receive a free-of-charge pass to the Nordic Game Conference.
To view the complete agenda, please click here and to learn more about the event please visit Games Job Fair
About Games Factory Talents
A Helsinki-based talent attraction agency dedicated to the games & creative industry. Our services include direct recruitment, organizing game job fairs and managing a community of game industry professionals through our GameDev Talent Board.
To learn more about Games Factory Talents visit – Games Factory Talents
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