Nitro Games Oyj (NITRO) Earnings Call Transcript & Summary

Good morning.

[Foreign Language]

[Foreign Language], and welcome to our webcast.

I'm back.

Yes, yes.

First time you had a great guest here.

Actually, last time I was alone. That was in July.

Yes. But before that, you had mystery -- I'm talking about the exciting game launch that we had on our hands on a spring time, and now we are seeing the first initial results of the launch.

Yes. And today, we're going to talk a lot about Autogun Heroes because based on the questions we have received, I think that's most interesting. But of course, we're going to go to everything else as well. So without further ado, I'm Jussi Tahtinen, CEO and Co-Founder of Nitro Games. And joining me today, we have...

Antti Villanen, Co-Founder, together with Jussi, partner in crime.

Yes. So for those of you who might be familiar with Nitro, this is your first time joining our webcast, we are a Finnish mobile gaming powerhouse, one of the oldest game companies coming from Finland. And our background, when we started, we used to be a PC games company. Then we expanded a little bit the console. In roughly 2013, 2015, we started to focus exclusively on mobile. And now during the last, I would say, 2 years maybe, we've been, again, expanding to other our platforms in the...

Into the old world. But we're following the trend of the -- on a market, though -- more and more games and companies are steering towards the cross-play and cross-platform, and more and more games are serving the customers in all of the platforms.

Indeed, indeed. And we focus on the category action and shooter games. So we do games where things go boom. We specifically do games for mid-core audience...

Yes, for real players and people who are really committed to play the games and spending in the games.

Exactly, exactly. And our business is twofold. We have our Games business, where we focus on investing in our own games and are seeking those hockey sticks. Since we do free-to-play, everybody understands that it's all about finding the winners and the hockey stick curves.

And then we have a Service business where we are serving -- selling the services to the Tier 1 companies from the industry, learning from those projects, gaining the reputation and getting lots of expertise and experience while working with the best ones from the industry, while we are claiming ourselves amongst those.

Yes. And that's something we've been doing for a long, long, long time.

15 years, I think. Yes. And it's a quite steady and reliable business. Did a lot tackling the hockey stick risk that you mentioned.

Indeed. Okay. And since this is the webcast for the H1 results, let's go through some of the recent highlights. So in terms of our revenue and EBITDA, those are the 2 key KPIs for us on a company level. Now during the first half, we again saw growth in revenues and improvement in EBITDA, but we also want to underline that, that's not where we want to stand at the end of the day. So the big thing for this year is that we're focusing on steering our business towards profitability step by step. So this first half so far has been laying down a solid foundation for that and especially towards the end of the year and the years to come after that. And the other notable events that kind of like started during the first half but that we concluded just recently, includes the fundraise. So at this point, we would like to thank all the shareholders who showed their support in the fundraise. The results were moderate. That's how we label them. So we raised roughly EUR 3.9 million in connection with the fundraise. And that is what we need for our most important needs now to continue our work towards profitability. And obviously, the bonds will be mostly steered towards the ongoing launch base of Autogun Heroes. And within that launch phase, most of the funds will go in the user acquisition where we invest in acquiring new users or new paying customers to the game so that we can get the revenues growing and ongoing.

Other significant events from the period and second quarter, definitely, the most exciting event from the game business was the launch of the Autogun Heroes.

Yes.

We started slowly, test launch, soft launch and then into the so-called launch period where we are now testing and validating and measuring all the marketing funnel activities, KPIs, return of advertising spend and looking for what is the level of the scale that will drive the game in which time frame.

Yes. And this launch phase is roughly 6 months in length. We haven't set a specific length, but roughly 6 months is what we have said. And even though we're nowhere near the end. As of today, we're still happy to share some of the initial findings we have seen so far.

Yes.

And then we also signed a new agreement outside the period in our B2B Service business.

Yes. From the Service business, we are very happy to deepen our collaboration with the Digital Extremes, and we signed an expansion with the unannounced title that we've been working for quite a while and hopeful that some day we will announce the title also. But that's a good sign of client trusting our expertise and deepening the collaboration, and we are steadily going through to step-by-step towards, hopefully, some fruitful long-term live operation collaboration with the client and the game. And I think a good sign of the trust between the partners in this partnership is that we also signed another deal with Digital Extremes, and we were capable of entering to work with one of the most famous title on their portfolio, Warframe as a game has been there for 10 years, yes. And now we are happy that we are part of the Warframe Mobile team and seeing also how this kind of evergreen franchise is coming on the small screens and being part of that journey is very good for the company, and especially the team is very excited about the opportunity.

Yes. And it's a good fit for our vision because this is something that we have seen coming for quite some time now, a lot of these big IPs from other platforms, companies and console, expanding the mobile one way or another, introducing the mobile component in the media platforms. And that's where our expertise is a good match because, like I said in the beginning, even though we've been focusing on mobile games with our own titles for last few years, we still have the background and knowledge from working with the other platforms. So we can technically pull it off.

Exactly.

Okay. Then let's see where do we actually stand this year. So as a reminder, this is our ongoing strategy, which we started back in 2017. And one of the first steps in our current strategy period was to get the company listed in the Nasdaq First North Growth Market in Sweden and start to build a team and technology on the portfolio required to build our game portfolio, not just in development but...

Publishing...

Publishing, marketing, all the analytics [indiscernible], yes. And during the last few years in our strategy, we've been building our shooter games and launching those, getting all the learnings and so on. The first one was called Heroes of Warland, which we launched towards the end of 2018. That game never made it commercially. So we get a lot of good learnings. We made some sustainable business case in the long run. Then we approached -- last year, when towards the end of the year, we launched NERF: Superblast, which then, again with that game, we have already gained some very good commercial results as well and tons of visibility and good boost for Nitro. And now -- this year, we are busily going through the launch pace with Autogun Heroes, which by any measurable means, seems to be definitely the winner that we have been seeking through all these years when we've been going through tens and tens of MVPs in our process and trying out different games.

We've been evaluating tens of games from the other studios. And now it's time to focus for the winners and carve out the best possible outcome from the winning horses. But the focus is -- focus on those -- of the resources on those and do the best possible business from the winners that we have finally in our hands.

Yes. and therefore, this year is super special for us inside here in Nitro because of the previous years in our strategy, we've been seeking the best possible avenues with our own games, trying to figure out what works, what doesn't, gaining learnings and finding those winners. But now we have that, so we can focus on that. But also, in the Service business, we've been trying a lot of different things throughout the last few years, that what works and what type of deal combinations, what type of projects we are good at and what provides the best results. And also on that front, getting closer and closer to our vision of working with mostly larger scale action and shooter games, then we could maybe pull off on our own.

Yes, and focusing on our technical delivery on those and providing the customer the critical needs that they have on the resources and the expertise that we have is really good to match what market and our clients are looking at exactly now.

Yes. And this now means that on a very high level, we're now able to continue step by step towards profitability because we no longer need to invest in seeking those winners, but actually making the most out of the ones that we now have. How we are structured here in Nitro is that we're based here in Finland. We have 2 studios in Finland and are quite a few people working remotely from different locations. But in addition to that, we have our global network of not just developers, but people working in business development and in other areas. And most of those are either studios we've worked with for many years who we contracted with or then hand-selected individuals working on a contracting basis.

We'll be building this network and this model of work in more than 10 years, and it's giving us long-term sustainable way of scaling up, even scaling down and picking the best parts from the different expertise areas that there are around the globe and also giving benefit of serving our clients in different time zones and being present where our client is, even we are in the Finland.

Yes, yes. And as of far, right now, out of the roughly 150 heads that we have in the pool that we've used in the recent years in total, we are currently staffing close to 85 people, out of which 55-ish is here in Finland and the rest are international talents. And that's how we go up and down depending on the amount of needs that we have in the different projects. And a little bit about the mobile games market positioning that we have and how that kind of like combines our Games business and also the B2B Service business where we operate on other platforms as well. So we focus very heavily on the category of action and shooter games, which is within the mid-core. So we have a very specific segment. And that segment is characterized by shooter games tend to be evergreen category...

In all the platforms it's been evolving so that it's -- they become first evergreens in the PC, then they came on the console evergreens. And now it seems that the shooter are becoming evergreen on the mobile also.

Definitely. And then another aspect that characterizes that category, it's very technically heavy, both in terms of the production value like high-end graphics and all that sort of things, but also technically because they tend to squeeze the juice out of the devices, whether we're talking about the console or mobile. These are typically the category of games that...

They are also promoting the kind of capabilities of the devices. So device manufacturer also tend to like the shooter games on their [ development devices ] since they are giving the best out of the device for the customers...

Yes. NERF: Superblast, this week we learned that again at the end of the day in the App Store in the U.S., which is a good signal of that type of thing because it's a very high-end, very good looking, run super smoothly. So it's very...

Promoting the platform and the devices as well as our game.

Yes, yes. And what we can see from the pie chart is that overall in the shooter category, if we look at how the revenue comes from different platforms. Our mobile games are already there, very firmly in the pie, not just as mobile stand-alone but also IPs that have expanded to mobile one way or another. Everybody is aware of Fortnite, [indiscernible]. What have you [indiscernible] all those games. But what we're seeing is more and more other IPs seeking to have a mobile component as well.

Yes. And kind of change in the market is also serving our strategy and our offering quite well since we are now in a growing trend. And even we saw some decline in the industry few years back, now it seems that pretty much all of the big players in the industry are preparing for the new growth phase and on our development and B2B efforts, there are more and more signals that now. Everything is starting to grow again and more and more requests coming towards us and we are in a very good position on this high trend and also in the momentum that is happening on the market.

Yes. And it's very -- things are not returning to how they were, but kind into the next evolution where -- what -- how we are seeing things is that our track record on delivering data-driven games and the whole -- all mobile games, marketing and the free-to-play analytics side, that's becoming more and more relevant on the other platforms as well. And it looks like moving forward, we can expect maybe more and more of these bigger players having the mobile game component in the platform mix to help promote -- bring awareness because mobile games marketing is so much ahead of the more traditional ways of marketing often seen on PCs and console.

And it's not only the gaming IPs, but it's also kind of IPs and brands outside of the gaming sector, and NERF being a very good example of our expertise of being capable of working with world-class IP with one of the biggest toy manufacturer in the world. And that's also creating trust and the credibility of the market towards us.

Yes. And how we're now going about this, both ongoing and future opportunities on the market is our project portfolio. So we have a portfolio strategy. And what that has meant for us so far is that obviously, during the last few years, we've in some cases, expanded the portfolio and some cases are then focused more and so on. And right now, we're at a point where we have definitely a focus moment ongoing when we focus on the winners that we have, while at the same time, especially in the B2B Service business, we are looking on building the next phase of the project portfolio and how we expand from where we stand today. But right now, for this year, in our Games business we definitely focus very heavily on the ongoing launch phase of Autogun Heroes to monetize on the opportunity that we have. And as a result, we're also reducing our investments on the NERF: Superblast, where despite some of the great results we have seen so far, it's not at par with what we have seen with Autogun Heroes. So it definitely makes sense to steer our efforts towards that.

Kind of focus on the winners, I think it's always a good way of building the business.

And in the longer run, within our Games business, we still definitely plan to keep the portfolio mindset. So like we have discussed sometimes earlier, we're still scanning out for new titles and looking into the opportunities that how will the portfolio look like when Autogun Heroes is steadily climbing for years to come. What are the next things. But as of now, we're not investing that heavily in building those new things, but...

Something improving within the team, but those are normal. Some didn't take -- take some time that forms out to be our next candidate.

Yes. And then on the Service business side...

On the Service business, as said, we signed a new project with the Digital Extremes and with one of the best IPs available in the world. And the company and the team is very, very excited about the opportunity and be working with such evergreen IP and such a good company. The collaboration with the Supermassive Games is approaching in the conclusion point, so to speak. So we are going towards the momentum where we see how the game is performing on a market and how much we are and they are willing to invest into the game and -- but that is something that we are going closer to the conclusion of the current agreement stage.

Yes. And in addition to the things that we have at the moment, like we said earlier, we have a very strong outlook in our business development funnel, which means things for the coming years. And that's something where, like we discussed earlier, we are very happy to see more and more of these opportunities, which are exactly the action and shooter games, larger projects, bigger opportunities for Nitro. So we see nothing but good things ahead of us when it comes to growing our B2B Service business moving forward. And this week, we're going to Germany.

We're going to the Gamescom, that is one of the biggest industry event. There is full of meetings with the partners, a lot of B2B discussions, lots of discussions around Autogun Heroes. And naturally, meeting and greeting all the industry friends. But I think you see people are eager to hear about Autogun Heroes.

Yes, yes. So let's have a look in Autogun Heroes. So firstly, let's recap where we come from. So this is a slide that you have all -- who have been following us already seen earlier. But what Autogun Heroes is? It is the game that we believe now is the winner that we have been seeking during the strategy phase all this previous year. So we believe that we have found a winner in our validation process. We will, again, in the coming slides, go through the road map that we have for the game. What has happened? What are we doing now? What's happening next? We will go through some initial findings. But the key thing is that what we believe that we have in our hands here is definitely a winning game. And often, you can put free-to-play mobile games in 3 different type of categories. This is a rough -- simplifying things, but first category is games which typically don't make it or what are the reason most of the games in this business fail.

They are making some [ EUR 100,000 ] or something in a lifetime, pretty much failure on anybody's game.

Yes, doesn't return the investments and things like this. This is what happened, for example, with Heroes of Warland, even though we made more money than that. But still commercially, it's not successful by any stretch. That said, we are still using a lot of the technology and tools that we developed when doing that game. So a lot of -- in many ways, the investment is still kind of...

Yes, yes. And NERF has been utilizing a lot of that.

Yes, which is a game that pretty much belongs to the second category of games that our games were, for one reason or another, we have had struggles in scaling up the game. And with NERF nor what we've seen is a great game, great reviews. It's also retaining players, how we're able to monetize. But it's also a percent very complex. It's a real-time synchronous multiplayer game, where the user acquisition pushes needed to get the impact that we want are beyond what we have been able to do so far, which conveniently gives us a segue to Autogun Heroes, which is a single-player game, which means that we can have a very different looking user acquisition strategy when we don't need to worry about concurrent users and things like this that much. And with Autogun, then again, what we have seen is definitely again, that's in the third category where...

Where it starts from some tens of millions [indiscernible], that's how...

Yes. With Autogun, we don't yet know -- we will get -- but we definitely not on our way there. And that's something that it's again that we will play, so to speak, for years to come now and step by step, go through first the launch phase, then moving the ramp up phase and then they'll keep operating and growing.

And actually, these categories are -- there are some great scale -- between and -- but these are the kind of 3 main categories where the free-to-play mobile games tend to be following, if you are looking at the bigger [indiscernible].

Yes. And where do we stand now with the game and on our way towards the bright future with the game is displayed on this slide. So again, an old slide, a little bit updated. But our -- long story short, last year, we acquired the game, pretty much 1 year ago from this Danish developer, Doomsday. Before that, we have been testing the game for quite some time, we have seen super great retention curves for the initial 1 month-ish because the game didn't have too much of content. Then we acquired the game. We developed the meta game layer, the monetization mechanics, the...

Analytics data...

Yes, [indiscernible] assembled a team inside Nitro to work on the game in addition to the core team from Denmark that we still have. Then we took the game to soft launch. Earlier this year, we saw great results that exceeded our expectations. We saw that based on the initial data we gathered, we can see the return on ad spend window between 60 and 90 days. So we saw that this looks strong enough to the actual launch phase.

And the first signals of scalability was already visible at that point. Even though the data set and user cohorts were limited, but still we saw that there is a scalability within this game, that should really created the kind of trust and credibility towards investing more into the game.

Yes. And therefore, we went into the launch phase, which is now ongoing. We started launch with the game at the beginning of June. During the first month, we grew the game very moderately, but still in a much, much, much larger scale than what we saw in soft launch and validated that everything works. Because in soft launch, we're focused mostly into the United States because that's one of the biggest target markets we have. And now we expanded again globally, excluding China and Russia. We made sure that everything works in line with our expectations. And we were happy to see that, that was definitely the case. So then in the month of July, we started expanding the user acquisition. We started to roll out with bigger budgets and so on to validate that the game actually can take that user acquisition. This is something that is usually the biggest concerns during the soft launch of the game. These are my results in a limited scale, what happens when we start to grow money, do the numbers hold up or are they diminishing and for one reason or another, not holding up? What we saw was quite the opposite. The numbers have actually improved like we're about to see on the following slide. So we have been very happy with that. And what we're now going through in the launch phase is exactly what it is there. So we continue the game scale up. We continue to see the revenues growing moving forward, and we continue the further development of the game.

Yes. But on top of that, I think the platforms have been welcoming us very well into the game. So Apple and Google have been generously giving us some figure and slots and also the industry have been kind of noticing this game and -- us alongside that. And we are in a very good position with the game. And naturally, all the success we have in our Game business is reflecting into our Service business as well. Still, we are 1 company when comes to the outside world.

Yes. So even though we are only going through the launch phase, so far, we're already very happy with what we have seen and also what we have heard from the others. And the whole point of this launch phase is to make sure that we go through all these things and expand the game and map out different type of UA campaigns, different type of ROAS windows and identify what's the best way to operate the game moving forward, taking into consideration that as a company, we want to reach profitability step by step.

And it's good to remember that on a launch phase, game is not ready. Naturally, the free-to-play Games As a Service is never ready. But still, there are lots of social features and monetization features that we are including in the game during the launch phase and then seeing the effect of those at later stages of the launch phase.

Yes. Speaking of which, we have 2 slides coming up about Autogun Heroes. First one, we will briefly summarize some highlights we have seen so far, and then we focus about talking about what happens next. So -- but what we have seen so far is improvement compared to what we have seen earlier, so both in terms of comparing against what we saw during the soft launch but also what we saw at the beginning of the launch phase. And this is something that's super important for us when we look at things and evaluate what we have seen so far, how does that reflect not just for this year but for years to come. And the ability to keep improving the game is always one of the most important things to pay attention to.

Alongside with the velocity and improvement in [ APIs ], as those are the kind of 2 critical things. And this far, it seems that we've been succeeding on both.

Yes, definitely. And the best-performing countries seem to be United States, South Korea, Japan, Germany, Canada. But again, these are initial findings and things are subject to change moving forward. But that's what we have seen now after the sort of first push. And of course, we are further exploring those best-performing countries and best-performing campaigns and cohorts, while then again, decreasing investment on the ones that are not performing as well. And this is part of the activities in the launch phase.

Bit of a surprise even for ourselves was the Japan and South Korea, how well they are performing and cohort sizes are big enough that the data is more reliable.

Yes. And on the retention side, which is displayed on this slide on the right side, what we have seen is that, as expected, iOS is obviously performing better, but Android is not far behind. And on both platforms as we start to measure towards the day 28 or day 30, so the 1-month retention and, of course, more and more beyond that as we speak. It seems that, that's where things start to stabilize. So the beginning of the retention funnel, that's where we see a little bit of difference. But towards the end of the retention funnel, things look pretty stable regardless of the platform because that's your players who you wanted to get and stay in the game.

And in the long game, anyway, those who are stuck in the game for the long time, those are the ones that really matter and turns into the paying customers also.

Indeed, indeed. And obviously, in different countries, there's quite a lot of volatility with the retention curves and this is something that's part of the whole thing, it's completely natural. And something that are sometimes explained by the type of audience that is in that country. But sometimes there's something that we haven't yet really figured out that why the numbers are there so good or so bad. And these are things that we keep learning.

Have to be honest, there are bad countries...

Yes, like we can see the [indiscernible]. And on the monetization side, something that we are extremely happy with is that the strong monetization performance has not just continued, but continued to improve. What we usually have seen is that when we soft launch the game, then of course, you...

You have [indiscernible] cohort...

Yes. You tend to get the best users and then the quality metrics start to decrease step by step as you expand. But what we have seen is actually the opposite in many ways. So we are looking at very strong IP monetization, good conversions happening, still very early, which is good for us because we start to see a return on ad spend quickly. But we have also seen very considerable improvement on the [indiscernible]. And this is super good because it means that also those players who are not purchasing any IPs, which are always going to be a minority, are generating revenues for us. And ad revenues are good for Nitro because there is no store fee associated with that. So this is a development that we have been very happy seeing with the game. And as a result, the ROAS curves have been developing pretty down well in line with our expectations, even though now we're more and more continuing to expand and explore different type of campaigns with different type of ROAS targets and so on. But what we...

Maybe not so familiar to everybody, but what do you mean when saying ROAS.

Yes, let's bring that up. So ROAS stands for return on advertisement spend. So I invest today in user acquisition and then I invest tomorrow and the day after and so on, and let's say, 1 week invest now in user acquisition, and this builds my weekly cohort. So out of this investments are done today and during this week, how much of the money am I getting back in 7 days? In our case, that's roughly 20%. And then how much of this money am I getting back after 30 days? That's in our guess roughly 50%. And so we get half of the investment back during the first 30 days of the players life cycle.

So basically, it means how quickly you can circulate the cash inside of the game and...

Yes. Yes, which for Autogun Heroes is, compared to any industry standards, it seems that it's returning very fast. So oftentimes, when you expand the game for years to come and you start to get closer and closer to the top grossing and stuff, then companies might operate the games with beyond 1 year return. But we're still looking at very short...

So public companies referring to 12 to 18 months [indiscernible] time.

Yes. And this is something that we don't expect to last for a lifetime. But as of now, doing the launch phase and getting the game lifted up, it's very important for us because it allows to have a relatively quick circulation in cash as we keep exploring the opportunities to expand beyond these ROAS windows in the long run to continue exploring and expanding the game. So long story short, what we have seen so far looks very promising, but still the launch phase is not done yet. We're still looking at initial findings. But we are very happy with what we're seeing so far. Then in terms of what we can expect to see happening next is that we will continue the launch phase as planned. So there will be new features. There will be new content based on what we're seeing in the data, but also based on the existing roadmap that we have.

So I think we are focusing on serving the long-term players more, so bringing more content, more activities, events for those who are sticking in the game for 1 to 3 months or even longer.

Yes. Parallel to that, we are continuing to grow the game, both with user acquisition, but also this organic growth which somewhat goes hand-in-hand with what we do on the user acquisition side, but it's also dependent on how the store placement and things like this happen. And the whole beef is, of course, the long term. So...

Yes, it seems that the initial finding is that we now have that we have a third category game with our hands with the long-term scaling potential to be several years of solid and growing business. How high? That is still unknown. But still it looks very, very good.

Yes. And during this remaining part of the launch phase, we're not doing things so that we invest the same amount every day. It goes up and down depending on what we're measuring at any given time. And then sometimes we; do a push and they we let the cohorts mature, so to speak, to collect data and make sure that we're actually seeing what we wanted to see and then again, investing more. So we can expect a little bit of volatility during this launch phase, but that's exactly as planned, yes. Then Autogun Heroes, let's move on to the financial part. So this is the webcast of the report that we just released this morning, so the first half of the year. And what we're seeing in the numbers is nothing to brag about, but again we're seeing growth in revenues, step-by-step improvements in EBITDA. And something that characterizes, especially the second quarter is definitely the increasing investments in the ongoing launch phase of the game, which we are, of course, continuing now after the period. That goes without saying. And that's how we then, through the return on ad spend, see to start returning to revenues. Of course, we're already seeing returning revenues as we speak, but that's how things will go from here moving forward. Parallel to this, we're busy focusing our investments in the winners, so to speak. So we're decreasing investment on areas where we're not seeing return and focusing those to areas where the return. We are carefully going through our other operating expenses and everything as we streamline our business towards profitability step by step to make sure that we get there in the best possible fashion. And as we can see from the -- next slide, if we switch to the 12 trailing months view, is that basically the EBITDA improvements we've been doing before, we now started this launch phase in the background. And now as we go to the beginning of this year, we were still pretty good on the EBITDA levels. But now during the second quarter and moving forward, we keep investing in the launch phase, which obviously has an impact short term. But then again, the whole point is that moving forward, we can expect to see larger revenue growth and again, our step by step getting to the -- towards profitability.

Exactly.

And now let's go forward to the next slide, which is about questions because this time we have received quite a lot of those, which is something that we are very happy to see.

So let's start to take questions from the chat first. So the first one is that, even though it's great continuing with Digital Extremes and Supermassive, from a risk point of view, wouldn't it be good to get projects from new customers too? Anything on the horizon?

Well, yes, it's busy, and there are always lots of those in the horizon. And what we have seen, the trend from the market is that if there has been a bit of a slowdown on the market for a year or 2, back now it seems that the market is picking up. The companies are evaluating the new investments towards the future and market outlook is much brighter than 1 year ago or even 2 years ago. And it seems that there are lots of activities on the market. So definitely, there are lots of things on the horizon and then it's just a question how far the horizon is.

Yes, yes. But overall, from the big picture point of view, our focus is not on what happens right now, but how do we build this in a sustainable fashion in the long run. And like I said earlier on this call, sometimes that means that we are sort of focusing the amount of projects more and sometimes then again expanding. And now we've been doing the focusing on the best performing ones. So we are preparing, obviously, to expanding that mix moving forward. But what stage of time line with all of these, those things you can never predict. So we will let you know when there's news to share. Then there's a question that, when will you be cash flow positive? This is something that we don't give an answer to directly because we don't give any financial guidance moving forward. So we will report how we have delivered so far, but we don't give any forward-looking guidance. at least not as of now. Any chance of launching the game in China? He's more likely referring to Autogun Heroes. And I guess the short answer is, yes, of course. China is very unique marketing in so many ways. So the way that we approach China and many other markets outside of the so-called Western market is that we seek opportunities with different partners. It's heavily a timing question. It's also a question of scale question, yes.

Scale question. Right now -- going into some specific, far out market. But China is definitely possible, and there has been some initial discussions around the topic, but I wouldn't -- I will hold my breath. It will anyway take some time even to negotiate.

Yes, yes. We still need to remember that with Autogun Heroes, we're still very early, where it is going through the launch phase and so on. So making the most out of the game is our strategy for many years, not something that we're seeking to do right now.

And especially China being just a special market. That it's not just going into China, but there are governmental approvals and [indiscernible].

Yes. Then there's a question, which is a more critical, which we love. So you've been doing this for many years with poor results. Why should people invest in Nitro now? Of course, we don't give any investment advice here. But what we can say is that our strategy and way of working is all about learning and constant improvement. So if anybody would consider investing in Nitro, I would encourage them to check through our past track record. Check what we said 1 year ago, what we said 2 years ago, 3 years. Have we delivered that? Have we shown ability to improve? Which if the answer is yes, it should reflect in our financials. It should reflect in our projects that we signed, the games becoming better and better. And if you come to the conclusion that we have actually improved, taken those learnings and step by step made our way towards the big success, then you can make the conclusions based on that. We are big believers and optimistic that we, of course, have taken tons of learnings and improvement.

And the whole setup that we have, it hasn't been grown over 1 night. We've been building the development capabilities and publishing capabilities, marketing capabilities. And those tend to take some time, sometimes more than we want and anticipate.

Yes. Then let's see there were some questions in e-mail. Question is about the U.S. spending during the launch phase for Autogun Heroes. Are we gradually going throughout the period? Or are we tilting more towards the end and the fourth quarter? Are we considering leveraging likely decreased ad prices in the seasonality, softer period and things like this? So the main focus in the user acquisition spending during the launch phase is basically validating and exploring that what we're seeing is actually materializing. That's why there is this volatile nature and pushes in the spending. In addition to that, we're, of course, operating the game with the long-term mindset, so steadily increasing the player base, which we have done and we have seen so far, and increasing the revenues of step by step which is also what we've done. So in the grand scheme of things, you can expect things to increase actually in this direction for the company. The goal is -- but smaller scale might look something like this as we do things and try out different things. Please give some color on the Autogun Heroes metrics. What metrics are important in your view, more about the retention or monetization? This, I believe, we already went through.

We already covered. I think at the moment, ROAS is the -- now the key metric, but it's not going to be forever. At the moment, what we are measuring is how quickly the spend will return.

Yes. And when we estimate that until we actually get the results is, of course, based on the retention and monetization that we're seeing. Then there's a question about the B2B Service business that with some of our previous projects, we have seen that the projects tend to be expanded during the project phase. Is this also likely with the new project with Digital Extremes? This must refer to the fact that when we have signed deals in our B2B Service business with [indiscernible] and expanded sometimes in very many expansion agreements, which tends to be the direction we like to do this in the B2B Service business because it means that we always focus on a specific time frame and have that agreed and then we deliver. If both parties are happy, then we discuss about the next one.

Yes. And it's good to remember that all of the mobile games have some sort of gait in the very, very end of the production, whether to launch the game or not. And those are naturally also important and interesting points for us that whether the final conclusion from the development and testing of soft launch will result in the real launch. And it happened now with Autogun Heroes, that we went all the way into the launch.

Then there's, I guess, a follow-up question to the previous one about the B2B project, which refers to the Warframe Mobile with Digital Extremes. So how is that different? Well, I guess the one obvious thing is that game that is already liked [indiscernible].

[indiscernible] been there millions of fans and followers already with the franchise. Or it's more than a game. It's already like a franchise They are organizing big events around it and there is a kind of -- it's small phenomenon already. That's the bigger difference. Then I think we are part of the team. We are not solely developing the game, but we are part of the group. I think other than that, it's quite traditional on our side.

Yes, every process is, of course, always -- we have created. We have worked on some [ live ] games in the past, but different...

Different technologies or [indiscernible].

Yes, yes. But on a grand scheme of things, everything in the Service business tends to be pretty much the same. So that's what we call the industry standard agreements in our press release, for example, because they tend to be very much the same on a high level. Then there's a question about the -- how the overall weaker economy has impacted the B2B business in general? And some follow-ups on that. I think overall, what everybody has seen who has been looking into this industry is that a lot of projects over the recent, let's say, 12 to 18 months have been canceled or postponed, and these things. How that has reflected in Nitro? For example, last year, we did throw down the whole instant games side of things because we have decided not to continue and things like this. So we've had impacts, nothing too major considering our strategy, but there's been impact. I would say that the biggest impacts have probably been all sorts of delays in discussing about new project opportunities. We've seen cases where we have been pretty far in discussing something, and then for financial reasons on the other end, they have decided to put the project on hold, for example. So these type of things happen, which means that...

I think quite a few components are kind of -- have been on a waiting stage how the market is evolving. And now it seems during this summer, already in spring that started to be a signal that market is starting to start to open again, so to speak, and more and more companies are activating with their [indiscernible].

But as we like to say, in-house like predicting future has always been impossible. Now it's maybe a little bit more difficult than that. So it's -- that's the way it is. But for us, still the outlook looks very strong. So we want to highlight that. Then a question about the financials that aside from the cost of goods sold related to user acquisition spending, how should we think regarding underlying OpEx, so other operating expense are short to midterm? Well, I think, short term, you can expect us to focus our investments more and more in the user acquisition of Autogun Heroes, which on the flip side of the coin, means decreasing OpEx from everything else. And then midterm, I would say that you can expect us to be very careful with the overall cost control in Nitro because we want to make sure that we get to our goal, which is to reach profitability step by step. So while at the same time, we are increasing spending on one end. On the user acquisition, we are very careful about spending on somewhere -- something where we're not seeing the returns. So it's going to be a mix of both. And then what I believe is the last question is that, could you refresh our memory on the usual user acquisition pattern when it comes to the [ LIBOR ] pricing space? So that's usually a phase when we are not doing that much testing and exploring, but it's based on...

[indiscernible] what kind of user cohorts and what kind of channels and what kind of media and what kind of advertising setups. And those are all that we are now testing and finding the best possible combination of all the moving parts that there are in performance-based marketing on the mobile.

Yes. And the biggest thing that defines the characteristics in the upcoming [ LIBOR ] pricing space, is of course, are sort of strategic level guidance between growth and profit and how much we want to drive growth versus how much we're going to drive profits and what's the best balance there. And that's, of course, something that we haven't decided yet. It doesn't make any sense to decide that yet. But overall, what we have said is that we're seeking to take Nitro as a whole step by step towards profitability. So obviously, that will play a heavy mix in there. But what we're now doing during the launch phase, of course, building in terms of estimations about how it could go and what makes the most sense.

[indiscernible] all the data predictions towards the future on a live operational stage, they are much more credible then still in this stage.

Yes, yes. Because, of course, every day, we are seeing more and more cohorts mature first day 30 days, 60 day 90 and beyond. Let me just -- there's nothing more. That seems to be it. There's 1 more. Somebody says, I want a T-shirt. I guess they must be referring to...

[indiscernible] it's, excess slim-fit.

Yes, I think you should be bugging our social media channels because they might have something ongoing when it comes to the [ swag ]. We've been receiving quite a lot of compliments about the [ swag ], so thank you. And what we do want to make sure is that we don't want to spread these things too far because they are supposed to be unique. So if you never get one, it's going to be a unique.

Precious.

Yes, precious. That's all for this time. So thank you all for joining.

Thank you very much. We are heading to Gamescom. I hope to bring some news to you.

Yes. And we will tune in again in October, when we delivered the results from the third quarter. And between now and then, thank you for your support. Take care, and have a good day. Bye-bye.

Bye.