Verve Group SE (VRV) Earnings Call Transcript & Summary

Ladies and gentlemen, hello, and welcome to Media and Games Invest press conference. [Operator Instructions] Today, I am pleased to present CEO, Remco Westermann; CFO, Paul Echt; and COO, Jens Knauber. Dear speakers, please go ahead with your meeting.

Good morning, everybody, and welcome. I would like to welcome our investors, analysts and all other stakeholders in this call. And yes, we're proud and happy to present a very exciting M&A transaction that has great synergies and a perfect fit to the company, and it's called AxesInMotion. So that's what today's financial hearing is about. I would like to go to Page 4 and quickly introduce the presenters for today. First of all, Jens Knauber, our COO. He's responsible for gaming -- for the gaming studios. And he has also executed this transaction from the start, which is quite a while ago and yes, also brought it to the finish yesterday. Then we have Paul Echt, our CFO, who's responsible for Finance and Investor Relations and who has also executed yesterday, the capital increase that we did together with this transaction, where we will elaborate in more detail. And yes, and my myself, CEO, heading the company for quite a while and really extremely happy with this transaction. On the right side of the slide, we see the shareholdings. They will be updated after the transaction because we're also very happy that our key shareholders, most of them also really participated very well in the capital increase, but also there -- we'll get to a bit more details later. Then I would like to move to the next slides and get to a few headlines of the transaction. So the company is called AxesInMotion. It's a Spanish company. And it's a mobile racing game developer. So it's really -- yes, you have different segments, of course, for the games, and they are really specialized in the racing games with over 700 million downloads, that's really very substantial. And why did we do this transaction? First of all, there's a very good strategic fit to MGI's Vision 2025, where we are, get back to that later in the presentation. You'll see the flywheel also on the bottom of the left side where we're combining ad tech first-party content and data, and that really drives revenue substantially and gives us a lot of organic growth. Where is the synergy potential? Synergy potential is -- yes, it's a company that has 87% of its revenues via in-game advertisements. And as you can imagine, with our media part, we can sell those ads better. And also, we can, of course, help the company a lot with user acquisition, but the company is already growing substantial by itself. So it's a very, very cool combination. Purchase price, and also more details later in the presentation, EUR 55 million fixed and up to EUR 110 maximum earn-out depending also on the performance in the next years up to the full year 2024. It's a highly accretive acquisition, adding 20% EBITDA to MGI taking our synergies into account in the coming years. And yes, we financed the acquisition also partly by a capital increase because we don't want to get our leverage higher. Current capital markets, of course, yes, I would say it's not ideal. And also there, we have to choose between not diluting our equity holders too much. On the other hand, also not increasing deleverage because that's also what the market doesn't want to see at the moment and also here we want to stay within a certain risk profile. So those are a few of the headlines. On the right bottom side, we see a bit more. Revenue 2022 expected EUR 9.2 million, with a EUR 6 million EBITDA, so a very substantial EBITDA percentage. The company has been growing very well through 36% organic growth. And we paid a 9.1x EV/EBITDA multiple. Paul will go in a bit more details when it's also about the earn-outs. Purchased price, EUR 55 million, I mentioned already, and also the 700 million downloads. Then I would hand over to Jens to go to a bit more detail in the presentation.

Yes, thank you very much, Remco, and good morning, everyone. Yes, today, I'm going to show you a little bit the -- or tell you a little bit about AxesInMotion and guide you a little bit through the key facts and the KPIs. And as Remco already said, we are all -- the whole team, everyone is super excited to have done that acquisition, and we are looking forward to work with the team over there in Spain, Seville. So AxesInMotion, at the glance, it's a leading mobile developer and publisher based in Seville, Spain. Some key facts, they are coming with more than 700 million total downloads and adding with this really massive owned as applied to our portfolio at MGI, which also enabling us to use the synergies and leverage each other. The company has above 30 employees, all based in Seville, Spain. And also the employees when we announced the news yesterday evening to them, all reacted very, very extremely positive and are also looking forward to work with our teams at MGI. Company, last year 2021, it generated EUR 7.9 million in revenues and has really outstanding EBITDA with EUR 5.1 million and 64% EBITDA margin. The headquarter is in Spain, as mentioned already. The company has 3 mobile racing games, all own developed. So it's an own IP, comes with 36% organic revenue growth and 87% of the monetization is done via in-game advertisement. Next slide, please. Here, you can see -- the company is showing growth since 2014 until today, 64% annual growth. It's very strong in the U.S. In 2019, some highlights. Maybe in 2019, there was a new strategy adopted. Yes, we leased quick prototypes to unlock full commercial potential, and you also can see in the numbers that is even pushed the whole company and also the KPIs extreme. They have still a strong focus on strong operation, and that's why the company has shown those good results. In 2021, they also released Extreme Car Driving Simulator, remake of it and also pushing the numbers again. Next slide, please. Now I give you an overview over the current portfolio of the company. Extreme Car Driving Simulator launched in 2014, the flagship title and main revenue driver of the company. Consistently delivered strong results and continued growth since 2014. It has a global appeal while U.S. is being the strongest market, has generated 480 million downloads since release so really a massive amount. Has an 88% revenue share of the company, and 87% of the revenues are generated via ad monetization. That's really the flagship title, and there's also a strong launch pipeline for further adding content and continuing with the game. Car Stunt Races: Mega Ramps launched in 2019. It's the newest game of the company. It's a stunt racing game, identified as an attractive market opportunity for a global audience. The prototype also very interesting was developed in only 2 months. That also shows how fast the team can react on new market -- new market trends and everything. There's a high interest in game in emerging markets gradually spilling over to developed markets. The game has generated already in less than 3 years, 30 million downloads, still rising. It's a 5% rev share, but also rising and monetization, 84% ad revenues. Last one I'm going to show you in the last game is Extreme SUV Driving Simulator, also launched in 2014. Yes, it's recognized as one of the best off-road simulator based advanced off-road real physics. It's only available on Google Play porting to iOS is possible. We are looking into this opportunity. And we have successfully or they have successfully refloated the game, growing daily downloads from 25,000 to 100,000. So the game also has -- the game is still worked on, and we are also looking at the opportunity to bring into iOS. It generated 50 million downloads since release, 3% rev share of the company and 97% ad -- monetized by ad revenues. The next slide, please. Here, you can see the revenue split of the top 10 countries, which is accounting for 66% of the total revenues. And also you see a split of the monetization model in ad purchases versus ad revenues and also the platform mix from Google Play to iOS. There you can see U.S. is the largest market, accounting for 31% of ad revenues and 46% of in-app purchases, then followed by Germany, Brazil, India, U.K. But it just shows how strong the U.S. market is and it's -- it also gives us the opportunity to further grow the U.S. market, but to also internationalize more and grow the other markets, especially in Europe. Yes, next slide. But -- for the next slide, I thank you all together, and I would like to hand over to Remco again. And again, we are all really excited to work together with the 2 founders of the team and really looking forward. It's a really nice acquisition we have done here. Thanks a lot.

Yes. Then I'll take over here and put it in the strategic perspective of the company. This is -- on this slide, you'll see the flywheel that we have presented already in earlier presentations. This company is growing very well by combining the platform -- the Ad Platform with own content and with data. And each of those parts enforces the other part and accelerates the whole growth of this company. There's more companies in the market doing this, but not that many, and we really see that it's driving organic growth, making us stronger and also driving profitability very well. So going into, yes, where does AxesInMotion strengthen our flywheel? It's, of course, on the own content side. So it's adding 3 great games, which -- yes, first-party content and with a lot of ad space, of course, and also need for user acquisition, which we can cater via the Ad Platform. Then also, it adds a lot of data. On the bottom, so 700 million downloaded games, of course, with the players behind it, it gives us a lot of data and those data drive our AI, artificial intelligence routines and also, again, help us to target ads better. And why that makes more money for the games itself, but also help our advertisers and more advertisers again also gets more publishers, of course. So this is the flywheel that really works well. And yes, we were looking for a great mobile game company. And with AxesInMotion, we have found that. Then I will go to the next slide. I'll go in a bit more in detail also regarding the elements of the flywheel. It's a company with a very significant organic growth opportunities. The company has been showing growth already in the last years, substantial growth. We think or we are convinced that we will be able to accelerate that. And we go through the main elements, user acquisition very important. So far, the company has not really invested a lot of money in user acquisition, which means that all user growth basically came organically. This is something that we can speed up where we can with our media part really grow the users faster and more and also in territories where they're not so strong yet. So that's a huge possibility. So our DSP coming into place, demand side platform. Then another big synergy space is the in-game ad monetization. They are, at the moment, selling their ads via various intermediaries. Yes, with our platform, we can get better CPMs. We cut the middleman basically so the whole margin stays within the company. But also by the data parts that we have, we are able to further raise the CPMs so the prices that they get for the ads and also to increase the fill rate of the advertising. So here substantial growth potential as well. Then the company itself has, of course, a very substantial growth in the games, but also with new game launches. 2 new game launches coming up. I have another slide on that coming up after this slide. We have an in-game item sales. And they are doing a certain percentage, as you saw on the previous slide, but that's below 20% basically on item sales that can be approved. We can also do more. We have a lot of experience in-house in doing item sales, of course, from our MMO side. So also here, we see potential. And then, let's say, the usual, but still very important to be mentioned. Content updates, it's really adding fresh content in the games. And yes, bringing it out and we saw in one of the previous slides also they have also upgraded the game practically in all these things. So those things are very important to keep the revenues growing. Then I will go to the next slide, which is selling games pipeline. Yes, there are 2 other races -- or, let's say, games in the same genre. And I think that's important to say, we like companies that really are masters in what they are good at or let's say, that are really focused. And this company is really very focused on this car and the racing genre, which we they do very well, which, of course, also has the advantage that if you launch a new game with the same genre, you already have players or you now have the player base. For these kind of games, you have the image in the market. Yes, 2 games coming up, Nitro Clash, which is quite far already in its development, will also be soft-launch within the next 12 months. Big expectations, it's a card game. Also again, the same topic, but a bit different game, of course, going to be launched for iOS and for Android. And then a bit further in the pipeline, so let's say, it takes a bit longer to get it launched, but also a very cool game. Multiplayer game, Drift Master. So also that one will be coming up. So really, yes, as said, company is strong already itself, has really good things in the pipeline, and we can leverage a bit with our synergies. And that brings me to the financial part, which -- where I would hand over to Paul to go into the financial details. Paul.

Thank you, Remco. So yes, starting here right away was the combined financials based on 2021 performers. So we see on the left side, MGI stand-alone 2021. And in the middle, AxesInMotion was EUR 8 million revenues and EUR 5 million EBITDA. Very strong underlying EBITDA margin of 64%, which would, on a combined basis, have increased the revenues by 3% and 7% EBITDA. But this is actually not the beauty about this transaction. So on the next slide, we see how it looks like taking the buyer-specific synergies into account. And here, we expect that we can increase the revenues on a mid-term basis to EUR 24 million and the EBITDA to EUR 17 million and increase also the EBITDA margin to 68%. And this would already on a 2021 basis, would have increased the revenues by 10% and the EBITDA of the group by 23%. And this is in the end what also Remco has mentioned as part of flywheel. We are really investing more into user acquisition on a very efficient way through our Ad-Software-Platform and at the same point in time also monetizing the in-game advertising space in a better way and also the -- yes, up to 50% margin fully stays in-house. So that is something where we can leverage the company quite nicely. And we have proven that actually with other games internally, especially with our casual games portfolio, so therefore, it's very concrete things and actions which we can take into account to really drive these synergies in the coming years. And this is also what we see here on this page and slides. So we expect for 2022 a revenue of EUR 9 million, with a very strong underlying EBITDA of EUR 6 million. Nevertheless, already taking synergies for the coming years also into account, we expect to increase the revenues by 165% and the EBITDA up by 176%. And also here, we have been quite conservative. So we have also normalized the numbers for an IDFA effect, where the identifiers going out of the market and also have taken into account further certain licensing costs, which might come up. And therefore, yes, there's a lot of potential in this company, and it's very concrete. And therefore, yes, we're looking really forward to now get our hands on and realizing them together with the founders. Looking now into the transaction structure on the next page. And here, we see what we have discussed at the beginning of the presentation already. So we have a fixed purchase price of EUR 55 million. EUR 5 million of it is actually deferred after 12 months. And here, we would come on a fixed consideration to 9.1x EV/EBITDA based on EUR 6 million EBITDA for 2022. And then we have 3 different earn-out layers for the next 3 years. So for '22, '23 and '24, where we just pay a kind of multiple of 5x for the EBITDA overachievements, which starts with EUR 7 million in '22. And this EBITDA overall achievements will then be multiplied by 5, but also been kept at EUR 20 million max earn-out for '22, EUR 35 million earn-out for '23 and '24 -- and EUR 55 million for '24. And based on this kind of revenue and earn-out multiples, we actually come to a very aligned move going forward because the synergies which we can realize together with the founders, also partly getting paid to them. But at the same point in time, we also align interest. And if you look at the multiples, they always stay below 8.3x because we also have this kind of maximum earn-out in place here. And therefore, yes, it's a great acquisition. A lot of synergies which we can realize together with the founders and therefore, also driving a lot of long-term shareholder value for our MGI shareholders. And that brings us actually already to the Vision 2025. Before that actually go into the guidance 2022, which we have updated. So we have updated the guidance 2022, obviously, also for the AxesInMotion part. So here, we expect to go now to EUR 295 million revenues and up to EUR 350 million (sic) [ EUR 315 million ] which means revenue growth of 17% to 25%. Also a very strong EBITDA of EUR 83 million to EUR 93 million, which is a strong EBITDA growth compared to 2021 of [ EUR 71 million ] [Technical Difficulty] into account the first-time consolidation [Technical Difficulty] 1st of June 2022. And now I would like to hand over actually to Remco for our Vision 2025.

Yes, I would like to show how this fits in the total, but I'm also just realizing that we didn't talk too much about capital increase. I would like to say a few words on that, and thank Paul and his team and the [ banks ], of course, and everybody who supported us here. It's a difficult capital markets at the moment. And as said before, we don't want to increase our leverage in this kind of market. And on the other hand, also not to dilute our shareholders too much. So we chose the middle way. We placed SEK 300 million, roughly EUR 30 million yesterday. We're well auto-subscribed which is very good in this market. Also, we're able to place it with a very limited rebate, which was much less than we expected in this market. So really happy with that, and that's, of course, also driving further and make also sure that there is still enough money in the bank account for also further M&A. So basically, this brings me really to this last slide. Yes, we have presented our strategic Vision 2025 a few months ago. And this is -- this transaction, AxesInMotion, is especially bringing us further with the flywheel with becoming 1 of the 5 worldwide leading Ad-Software-Platforms. It really helps us more on content that drives more advertisers because of the great ads we can also take who is looking at those ads. So there's a lot of data available. And yes, having those own ads has great support, advertisers on our platform and more advertisers bring also more out of publishers. So it makes me the flywheel go around, accelerate and go faster and get bigger. So that's, yes, how it fits in the strategy. Then I would like to get to the end of this and come to the questions, but not before saying a few words, I would like to thank all the investors, of course, for the trust, also participating in the capital increase. And I would like to welcome the team of AxesInMotion to the group. It's a great game studio where we will support them in their growth and see where we get the synergies as much as possible and thank, of course, the teams because these processes -- these M&A processes are very intense. And I know that Jens and his team has been working on this for quite long. Then I will hand over to the moderator for the questions. Thank you very much.

[Operator Instructions] Our first question comes from Ken Rumph, Jefferies.

I wanted to just make sure I understood which part -- because clearly, some of the benefits of this kind of accrue, as you say, to the buyer, to your sales MGI and some accrue to AxesInMotion as its defined and therefore, would affect the earn-out. I wanted to just make sure I understood kind of on, for instance, I think, 21 maybe the slide, you talk about where you think you might be in the medium term -- yes, 20, actually. And I'm wondering kind of how much of -- how does that divide between the part that would generate earn-out payments and the part that kind of is all yours? Second question, and apologies if I missed it, who are actually the vendors? Is the money all going to the founders, to the team, to some other party? It's quite a significant amount of money, are the founder is going to stick around? Is there a backer who's cashing out? I was just curious about that.

Thank you, Ken. I can take the answers or start with it, and maybe Paul will also fill it and Jens. Yes, we're buying this company at a low multiple and maybe because, let's say, what's the reasons for that. First of all, the markets have come more under pressure. So the multiples that were paid for mobile game company have come down. But also, we are paying this low multiple because there is -- there are these big synergies in the transaction. There's usually more people interested in a company like this, but we've got very fast exclusivity in this process because they saw that we would -- again, we have a very unique position that we can really let them grow faster on the user acquisition side, can make more money with their ads. And catering these synergies into also their multiple made really very quickly decide that even if it go to low multiple that they are really extremely keen of doing this deal with us. So that helped a lot on doing the deal. Not all the synergies that we see with the transaction will be only on the AxesInMotion side because the synergies in the AxesInMotion side will need to be better ad sales, more user acquisition. But we will see a lot of synergies also outside of that, which is, let's say, getting more advertised in the data advantage so [ the part that ] drives really our medial companies. So altogether, tons of synergies. But indeed part of it, we give to the sellers, which makes the sellers very happy and this transaction also very motivated, of course, to generate those synergies because if you would take the synergies only on our side, it's always more difficult also from our experience to get a team to really work on them. Now they will be super motivated to get the synergies going. So that's the reason and the background for that. So lower multiple, but therefore, giving -- yes, let's say, part of the upside, part of the synergies also to the sellers. Paul, I don't know if you want to add something to this. Otherwise, it would come to the sellers.

Ken, was everything answered on that end? Or did we forgot something?

Yes, I think so. Perhaps just to expand on one point. If you increase UA spend, obviously, that detracts from the profitability of the business at least over some period until you get a return on that through more players. How does that work from a kind of incentive point of view? Because, I mean, if I was going to be extreme, I could say you could hold down the earn-out by ramping up the UA spend enormously for the next 3 years. The company makes no more money. It get loads more users. And then at the end of the earn-out period, you say, right, okay, we'll stop the UA spend and capture all the money. I'm sure that's not the plan. But sort of what's the expected path of UA spend? Because clearly, you're going to do more. I'm just wondering what kind of percentage it has been and what will it be in the future?

Yes, I can answer that one as well. Let's say, usually, UA spend should have a return on investment -- [Technical Difficulty] There's some echo. It should usually have a return on investment of 3 to 6 months. So if you do UA, you see the revenues coming in very quickly or let's say, the profitability also coming in very quickly. But we have, of course, also in this case, to also protect the sellers, governance structures in place that is not us robbing them basically and doing this. On the other hand, they have also the interest to grow this as much as possible. And that's also the reason that we chose a longer earn-out period -- certain earn-out period of almost 3 years, which, of course, yes, makes us together and drive the user acquisition part. So there's a joint interest also here. And it's -- with this kind of deals really to get an alignment of interest. And that brings me, I think, to the second question that was asked who are the sellers. The sellers are the founders mostly, plus the team also gets a good share of it. So there will be a lot of people very happy, including the investments done in the company. And yes, we have, let's say, a lot of motivation, yes, that's also what you saw on the price. There's EUR 55 million fixed, but also a very strong earn-out component of EUR 100 million -- up to EUR 100 million. So we have also catered that into the deal, and there is, of course, all kind of government structures in place to, yes, let's say, stay with us for this period and also, hopefully, after that period. And that's what we have seen with other acquisitions we did that we are really good in keeping founders in the company also after they made a lot of money because the company is cool, it's cool to work together with people that are really energetic and growing in this company. So we have from other M&A cases already shown that also after earn-out periods, we're really good in keeping the founders on board. And I hope that, that will be the case here as well, including the team, of course.

[Operator Instructions] Our next question comes from Richard Williamson, Edison.

Congratulations. It looks like a very interesting deal. I've got a couple of questions as well, if I may. Firstly, I suppose, racing has not been your genre to date and the dynamics of the game. Again, just to understand the dynamics of the game a little bit better. A lot of your sort of previous titles have been very long -- sort of not long in the tooth, but nevertheless long-lived games and very sticky. Do you see the same dynamics in these sort of racing titles? And how long do people play the racing games for? And I suppose, does it also -- so second question then, does it also indicate a direct travel? So are we going to expect other acquisitions or game titles in specific genres of outside your historic expertise? And the third question, if I may, just around the guidance, the uplifted guidance is, if I can comment relatively modest, and given the revenues and EBITDA you're talking about and particularly when you look at the synergies, how long do you expect it to take for those synergies to flow through and to really impact the performance of the business?

Thank you, Richard. I would like to start with the guidance. As you know from us from the past, we are always extremely conservative with our guidances and rather overachieved than overpromised. And so in that sense, I agree with you there is synergy in the case. And we are also convinced that part of the synergies we can start to get big and fast. So for example, selling the advertising spaces at higher amount, higher CPMs, getting better fill rates. That's not something like you just put on a switch, but things that are really in 1 or 2 quarters normally work -- started to work and then scaling up. User acquisition normally takes a bit longer because we first have to have your UA teams, getting trained and these kind of things. But also there, we're not talking about years, but rather about quarters. So in that sense, yes, there will be synergy, and we might indeed also here overachieve, but we are -- don't want to promise it too fast. And we also shouldn't forget it's already -- May coming up. So a part of the year is already done. So in that sense, time flies, and we are a bit more conservative on that. Then for the other question -- I hope that answers your question as much as I can. Go to the longevity of the games, I mean that we work on the move more into mobile games. We have [indiscernible] quite time ago, and it fits also very good to the flywheel to have those games with more advertising spaces, which MMOs traditionally do not have. So moving into mobile games that are bit more casual also for definition then makes sense. But also here, we have a lot of longevity. But Jens, I think you can say a bit more about the games and how you see that.

Yes, sure. Also exactly the term longevity is something which we see in this portfolio. And that's also for mobile game, by the way, really outstanding when you consider the game has been the main game or the flagship title has been launched in 2014. And it still has such a strong performance and still growing exceptionally. So the longevity of the users, also the ad spends we see and also now the inner purchases is also coming from users who we just hasn't locked in the game quite some time ago, which is very comparable to our current portfolio. And I agree with you that we have never been in these genres of racing games. But on the other side, we also -- we have the full team at place in Seville and also our marketing team and also our people at MGI are used to work in different genres. So I don't see any issues with that. And yes, the longevity of the players, it's just really, really nice to see. So this also enables then the UA and the marketing team to bring in users at a really good price and with a really nice return of investment. And also, as Remco mentioned, for sure, ramping up marketing takes a while, but we expect to be able to further grow the game by our internal activities. And just to mention it again, the longevity of the users already being in the game as also for mobile really outstanding. I hope this answers the question.

Perfect. Thank you.

Yes. I would get to your second question. Yes, I would say, we will also get into other genres because what we see is if you have more genres, also here, again, we can train our AI better and also support other companies in these markets better. Criteria that we look at -- if you look at game studios, is that they have a lot of U.S. traffic and ads and also customers, of course. That ideally, the revenues are coming from ads but also a bit of in-app purchase because they can also judge if people are really spending money. And of course, that it's a good game and that games are growing. And that's -- sorry, the company studio has proven that they can also do multiple game launches. So that is not one-game company or one-trick pony, I should say, but that they really have proven that in the same genre they can do more launches. So those things we are looking at. And yes, there is, as said, the tension on M&A has gone down a bit because of also the capital markets. So there are good targets around, but we will also be very careful, of course, with what we buy. And there's also not so much time pressure anymore on deals. So that's also good. So I hope that answers your question and basically...

Wonderful. Yes. That covers it nicely. Thank you very much, Remco.

Thank you, Richard.

Our next question comes from Sven Sauer, Kepler Cheuvreux.

Just two quick questions from my side. The first one, probably fairly trivial. Regarding the number of downloads, I think you wrote somewhere in the slide, 700 million downloads. But then on another slide where you kind of introduced the 3 portfolio games. When I add up those 3 numbers, I only get to 560 million downloads. So I was just wondering -- yes, if you could provide some color on that.

So yes, that's considered as a plus [ doubtful ] notes. So that's the difference on that end. Plus 480 million on the Extreme Car Driving, plus 30 million on the middle one and plus 50 million on the other one. So it's a plus downloads.

Okay. Yes. Okay. And the second question is regarding also the games. But rather, you mentioned that they are developed by the company, the 3 portfolio games. So should we assume that MGI now will pursue the development of new games? And if yes, I mean, how can we expect this to change the capital expenditure structure of the group due to development costs being a lot higher than your previous strategy of buying or licensing games?

Yes, that's a very good question. Thanks for that. We have so far indeed always said that we will not get into game development because of the -- how to say it, the huge investments that are coming with that and also the launch risk that's tied to it. So what I always took, I think, as an example, is that to develop an MMO game, you need something like 10 million, 20 million. You should really develop like -- or be able to launch 10 per year and then you have a 2-year development cycle. So you're coming to what is it 10 x 10 x 3 (sic) [ 10 million x 10 x 3 ] to at least EUR 300 million invest, if not EUR 600 million if the games cost EUR 20 million per game. That is for the MMO genre that we traditionally board in. If you talk about this type of games, the development costs are a lot lower. So we don't talk about this kind of huge expenditures. And we have here a studio that in its genre, therefore, the genre is so important, has already proven that it can launch new games. What we don't see here is that they also do a lot of prototyping. I think it was mentioned in the text on one of the slides. So they do very lot of prototyping. And most of those prototypes test if there's market demand and things like that, and they don't even launch them. And that's, of course, a lot cheaper than with an MMO where you already need to do a lot more development work. So straight answer to your question, yes, we are getting into game development, but in a totally different way than it would have been for an MMO. So I hope that answers the question. I also gave the rationale behind it.

[Operator Instructions] We have no further questions. Dear speakers, back to you.

Then I would like to thank everybody. And of course, I mean, if there's more questions coming in the later stage, we're happy to answer them. We're also happy to present, of course, the case again. And yes, let me to thank everybody for participating here. And again, to thank the investors for also participating in the capital increase and thanking the company to be willing to get into this transaction together with us. Thank you all very much, and have a good weekend.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for attending. You may now disconnect.