Good morning. I would like to welcome our investors and potential investors to our investor presentation this morning. Media and Games Invest, we're a gaming company, and we are gearing, and that's a very great event, for our first day of trading tomorrow on the Nasdaq First North Premier. We would like to run you through a presentation, but I should maybe start on page two, why we are doing this and what's going to happen tomorrow. We're coming to Sweden, to Stockholm, because we really like the ecosystem here. A lot of experienced game investors and a very strong cluster of game companies, some of the brands and names you see below. Tomorrow, sixth of October, will be our first day of trading.
We have completed, which was announced last week, a SEK 300 million capital increase, which means that we have 25 million new shares, and fully diluted, we'll be having 170 million shares. We're applying for the Swedish Corporate Governance Code and will also apply quarterly reporting according to IFRS, using IFRS already for many years. We'll be furthermore listed on the Frankfurt Stock Exchange. You see on the right bottom side of the slide, the reason we are coming to Sweden. We have a lot of peers here, as mentioned already before, and valuations of peers here are a lot better, which helps. We are also running a buy and build model like a few others here on the market. With buy and build, it's of course, very, very nice if you have a bit higher valuation than we currently have.
We have really seen that in Germany, there are not so many investors in gaming. We don't have any peers in that market. That's the reason we think we will be much more comfortable coming to Sweden and looking forward to tomorrow. We'd like to start on the next page, which quickly introducing ourselves. Paul, will you start?
Absolutely. Paul Echt, CFO of Media and Games Invest, studied law and finance, worked afterwards for a Silicon Valley startup company called Shopgetting, did some equity fundraising there. Was then hired by UniCredit Bank for their technology division, where I worked very closely with the ECM capital markets team as well as did quite some PIPE or debt financing, and also met Remco in 2017 and in 2018, then I joined the group as CFO.
Yeah. Remco Westermann, Dutch national, studied economics, started working in the oil industry, then consulting, strategy consulting, restructuring consulting, then worked quite a while for Sonera, the Finnish guys, which is now TeliaSonera, and founded Bob Mobile 2005, brought it public. It's listed still on the Cliq Digital in the German market. Sold my shares in 2012 and decided to buy Gamigo, which is actually the start of this whole story. On the right side, you see also a bit about shareholdings. I started at end of 2012 with acquiring Gamigo, a gaming company from Axel Springer, a media house in Germany. Company was distressed at that moment. Still holding, let's say, 37% of the shares, fully diluted, so after the new capital increase. We have early investors which came in in early stage, 15%, and 48% tier 1 investors.
Not yet allowed to announce names, but we have really cool new investors joining us, which will be announced tomorrow. Coming to a bit of who we are and what we're doing, page five. On the right bottom side, you see the principle. It's already in the name, Media and Games Invest. We are a gaming company. 63% of our revenues are gaming, but we also have a strong media arm, which is doing 37% of the revenues. We do this, or we decided to do this because for gaming, there are basically two success factors. The one is content, of course, new games, improving the games. Working on the games. The other thing is user acquisition. With more users, you make more revenues, and that's the reason we decided to get media companies as part of the group to really push our user acquisition faster.
On the right upper side, you see that this really works out pretty well. In 2014, we did EUR 15 million revenues. When I took over from Axel Springer, actually, we did EUR 12. Last 12 months, we did EUR 112 million revenue, this is all euros, with a EUR 22 million EBITDA. Strongly been able to increase the revenues and the EBITDA. We had a CAGR last five years of 40%+ on the revenues. You see some dotted points on the revenues. That's actually Gamigo. In 2018, Gamigo was acquired by Media and Games Invest, which was basically a vector listing, getting it listed on the Frankfurt Stock Exchange. Those are the normalized figures, taking all the two companies into account. Market cap is now over EUR 150 million.
Listed on two stock exchanges, Nasdaq First North Premier and the Frankfurt Stock Exchange, where we expect a lot from the Stockholm Stock Exchange and also for the future might move a bit more towards Sweden. We did over 30 M&A transactions, we're a buy and build story. Over 700 employees. Majority from our revenues is coming from great games. 25 massive multiplayer games where several people are playing at the same time. Multiplayer, mostly free-to-play. We're making the money mostly via item sale, costumes, weapons, whatever people buy, houses, pets. By that, really getting a little bit more in detail, but it's really great games. It's a nice segment in the total games market with very long-term sustainable revenues. We also have over 5,000 casual games, which we mostly sell in subscriptions or advertising based. Over 5 million monthly players.
As I said, a strong media arm with a lot of ad views, a lot of subscribers, and also a lot of external advertisers that also drive the volumes there. Coming to the next page. What you see here is basically that we run the company in two clusters. The one is the gaming under Gamigo and media under Verve Group. Revenue streams in gaming, as said, mostly in-game purchases, also game subscriptions and advertising revenues. Here you see some of the brands of the companies that we acquired, and this is a bit different than other buy and build stories because we are integrating the companies that we buy. We believe that by getting them all on the same billing platforms, on the same platforms where customers are treated makes us much more efficient. We will show some numbers on that. That has really been driving us forward.
Nevertheless, we work with different brands, so you'll find games under several brands in the internet. Only a few here are mentioned here. Gross margin, roughly 50%+. EBITDA margin 30%. You see below, we want to run gaming as the majority of our revenue, 60%-70% of total revenues, and with a sustainable EBITDA margin of 25%-30%. With our current 30%, we are within this ballpark. Verve, the media side. Make money via agency fees, SaaS fees, and ad commissions. Also here, you see companies that we have acquired. Also here we started to buy and build strategy. We started to buy and build on the gaming side already in 2012, end of 2012. We started on the media side only in 2016, so it's not such long record on that side, but also going pretty well.
Yeah, gross margins here, 30%+. EBITDA margin, currently 8%. That's where you see that we are not yet where we want to be, because below that, you see that we want to go to 15%-20%. We are not yet in the target range, we expect to come there pretty soon. Revenue share, I said before, 30%-40% of the total revenues. Coming to the next slide. You see on the left side, slide seven, you see the split of revenues. Roughly 50% of our revenues is done by our biggest MMOs. Trove, the largest massive multiplayer game we have. ArcheAge: Unchained, the second one. Fiesta, the third one. None of the games taking such a big share that it's omni-dominant, which is good. We have another 14% casual games and other MMOs. The 37% for media.
No single hit wonders, but still strong games. How do we grow? Buy and build on the right side. Mentioned already, we are doing M&A. We acquire companies three to five per year, roughly. We acquired over 30 companies now in the last years. We have a well-filled pipeline. We did three acquisitions already this year, and the year is not yet over. On the middle, you see the organic growth, which is of course, very important. User acquisition, as mentioned before by the media companies, but it's also about launching new games and game updates. We recently launched some big DLCs for Trove. It was Delves. For ArcheAge, we launched Garden of the Gods. Also we are launching quite some new games. Not all are successful. Those knowing the gaming market well, there's over 3,000 games being launched every month.
It's about being selective, being really, yeah, very picky which games you launch. We don't do new game developments because we think we are not big enough for that. New MMO costs EUR 5 million-EUR 50 million to develop. We would maybe have the money for two or three of those, which would be almost like going into a lottery. We wait till we're a bit bigger, and we rather trust games that are developed by third party developers and where we get the exclusive licenses or we acquire games as part of an M&A transaction. Going to the page nine. Yes. Quickly about the gaming market. Won't pay too much attention to it. Gaming, we see, is a very attractive growth market. EUR 160 billion altogether now with a CAGR of over 10%. It's a mega trend, more leisure, so more people playing games.
We have also seen that during COVID with social distancing, people being at home, gaming was very attractive. It's a mass market. It's larger than books, music, and movies. Over two billion players worldwide. Also to see it's not only kids' markets. Just as an example, in Germany, 42% of the Germans are playing. 41% of those are female and 29% over 50 years old. Fragmented, driven by hits, high growth, high margins, and market consolidation, which gives an opportunity for market consolidators. Next page, number 10. Very quickly, you see here our gaming revenues only. We have a CAGR on gaming without media part of over 30% per annum and 65% EBITDA. Paul will go into the financials later a bit more. Page 11.
We have an example of one of our games, Fiesta Online, a game that was already part of Gamigo when we acquired Gamigo in 2012. It's a role play game in anime style, 13 years old now. What you see in the middle is really extremely attractive. Over 60% of the revenue is coming from people more than five years in the game. This makes it an extremely sustainable revenue generator. If you treat those games well, doing updates, doing sequels, you really can grow the revenues well. Typical paying user is paying EUR 50- EUR 80 per month and has a lifetime of over five years, as I said. Yeah, the game altogether has made over EUR 50 million revenues. It's a strong revenue generator. Page 12. Already mentioned quickly before. COVID-19. Yeah, it was good for the whole gaming sector, also for us.
We have seen a strong increase in the revenues, a strong increase in the new players in Q2. Also after it, especially the new players are also adding a lot of revenues for the next quarters. On the media side, we had a little bit of a dip, but with our focus on gaming and e-commerce, went out pretty well and also Q3 looking very well. Page 13, a bit more details. Won't go into every detail. Presentation will be available. You see here on the right side, for example, the revenues of Fiesta Online comparing 2019- 2020. You saw very strong in May, which was, people were locked down in most of the countries in Europe and the U.S. Also after it, we are heavily above the numbers of last year, and also player activity, which you see below, is also strong.
After, let's say, the lockdown, we still see very strong numbers. Going to page 15. Our business model. On the right side you see it's really about getting new customers, new gamers, that love our games, that go into our games via user acquisition and making them happy in the games. Roughly 50% of the games are own IPs and the other 50% are licensed. On the left side you see what drives us. It's about fast growth, but profitable fast growth. Very strong tech focus. Technology is extremely important in these markets on the media side as well as on the gaming side. It's driving cost efficiency but also growth. Synergies. We are integrating acquisitions, as said already before, and also optimizing the value chain by getting media and gaming both as part of the company.
Low risk, no new game development, mentioned already, focus on ROI. Shareholder value. We have a strong cash flow from operations. Plus, we have the possibilities, as we showed, to raise equity as well as having also a bond listed in Germany under MGI and a bond listed in Sweden under Gamigo. Coming to page 17. On the right bottom side, you see that the share of mobile games is pretty small so far. Roughly 1% of our games is mobile. Majority of our games are client games, 10% is browser, 11% is console. The good thing about the client games is that we only pay a limited amount to, how to say it, to the third parties, because most of our distribution is done directly. Mobile, of course, is a strong growth segment, so we wanted to grow in mobile.
We expect towards the end of the year to get to 10% mobile. Why? First of all, because we did a larger acquisition, Trina Digital, which was just closed on the 30th of September. Secondly, invest in media companies that can also drive mobile growth under the Verve Group. The third one is also launching new mobile games or, and that's what you see here, getting our current games, our existing games, like Desert Operations, which is strategy and build game, onto mobile. Next page 18. Again, to emphasize why we believe in the combination of gaming and media. Just here is a mobile game example for an advertise-based game. Where you typically, as a gaming-only company, would pay EUR 0.15 per install and get EUR 2 per thousand ad views.
While as an integrated gaming and media company, you get the users for one-third cheaper, and you make double the money on the ad income, which means that you have a 200% higher efficiency running this as a combined company. There are more companies in the space that are doing this. Not many, but we really strongly believe in it and also see the positive effects of it. Other way of advertising the games is via influencers. That were actually the first acquisitions we did on the media side, influencer companies. Influencer is extremely important for game launches, for getting games under new players. Here you see an example of the cooperation between the gaming and media side doing influencer campaigns. Over 65 influencer campaigns for the launch of ArcheAge: Unchained in Q4 2019, with over 2.4 million views and driving most of the EUR 10 million organic revenue increase.
Coming to page 21. This is the one slide basically describing the strategy of the company. It's about buying, acquiring companies, integrating those companies. We mostly buy distressed companies, which means that first restructure them and then realize the synergies. We love distressed companies because people know already that something needs to happen, they're very open to changes. Of course, the return on investment is extremely good if you do the restructuring. With the companies integrated, it's focused on build and improve, which means organic sales growth, new products, new countries, internationalization, et cetera. Coming to page 22. This is about M&As. Won't go in every detail here. On the left side, you see the over 30, left upper side, over 30 M&A transactions we did.
If you buy distressed, we typically aim at earning back the purchase price plus restructuring cost, plus burn rate within 24 months. If you buy EBITDA positive, we like to buy below 6x EBITDA, that's already taken into account the synergies that we will get after the purchase. Typical deal size is EUR 5 million-EUR 30 million in revenues. Integration process is very well organized, as you see on the right upper side. Also integration, as already mentioned before, is really key. We integrate what we buy. Typically, the integration on the HR side, people side takes up to maximum six months, on the technology side, maximum 12 months, then the companies are integrated. On the right side, you see that we have a well-filled pipeline with new M&A targets. Coming to page 23.
The reason why we integrate companies or one of the main reasons why we integrate companies. Typically, when we buy gaming companies, 30%-40% of their revenues is spent for technology. They're typically in traditional data centers. We bring those games on a single platform. We bring into cloud. We're working with GCP, the Google Cloud at the moment. They are also showcasing us because it's not that easy to bring multiplayer games into the cloud. The reason we're doing it, you see on the right side. Trion Worlds company we acquired end of 2018. We were able to save over 70% on their technology cost on a monthly basis. Also Verve that we only acquired early this year in January.
We were already able to decrease the technology cost by over 50% on a monthly basis, and also expect here to be well over 70% in the next few months. Very attractive to integrate the companies. Yeah. Coming further to Trion, just as an example case, Trion Worlds we acquired, was a distressed company, heavily burning money before we acquired it. We acquired it via an ABC, an assignment for the benefit of the creditors, which is a kind of U.S. insolvency process. It's a U.S. company. We paid EUR 8.5 million for it, which we paid basically to the banks that had secured loans. We did all our basic steps. Restructuring, integrating, internationalizing the games, putting more effort on the games, on community management, for example, investing EUR 3.4 million in the games.
You see that it's really worthwhile because the first 12 months we already did EUR 90 million revenues with EUR 7 million EBITDA, even more important, we did already 24% organic growth on those games, in the last 12 months. Really showing a very nice progress. We come into the final section on page 26, and I would like to hand over to Paul.
Thank you, Remco. Starting with the revenue and EBITDA development. Here we see that we have shown very strong profitable growth in the last 5 and a half years with a CAGR of 43% compared to the 11% market growth which Remco mentioned in the beginning. We have grown 4 times faster than the market. Overall, very strong growth. Have actually accelerated growth again in 2019 with 85% for outperforming the 43 and increased also organic growth from 5% in 2018 to 10% in 2019 already. Have done this also due to more, further development of our IP on games, so more content updates and therefore have increased organic growth.
Since we now also launched bigger DLCs like for Trove, Delve, and also the ArcheAge: Unchained, Garden of the Gods, we have increased organic growth again, in Q2 by 35% and therefore, also increased our total growth to 98% outperforming CAGR of 43% again, also in the first half year of 2020. Therefore have now reached EUR 112 million revenues last 12 months with the EBITDA of EUR 22.4 million. What we also see here is that we have increased our EBITDA margin from 10% in 2014 to 30% in 2018. Then we have diluted our EBITDA a bit, in 2019 and first half year of 2020. This has been done because we acquired more media companies, which did not fully integrated yet, so we can realize much more synergies.
We come there to the 15%-20% EBITDA margin. We'll also increase our EBITDA margin again to 25%-30% which is in line with our financial targets going forward. Coming to the segment performance. Here we see that 63% of the group's revenues is contributed by the gaming vertical, 37% by media, and we also want to keep this revenue share going forward. Really, being a gaming company, but with a very strong media unit for user acquisition. Looking at the EBITDA side, here we see that 84% of the group's EBITDA is contributed by the gaming vertical with EUR 5.3 million in Q2, and 16% by media with EUR 1 million in Q2, both segments are very profitable already.
While on the media side, we have now 8% EBITDA margin and want to go to 10%-15% by second half-year when there we had a very good start into Q3 with very strong organic growth combined with a lot of cost savings which have been done in Q2 already, and therefore we will meet our targets already within the second half-year, going to the 10%-15% short term. Looking at the revenue by region. Here we see that with 55% of the revenues is coming from North America, which is by far our biggest market now, 34% from Europe, 4% South America, and 4% Asia. We're currently also expanding more to Asia, so we have signed the first bigger outline licensing deal for our biggest IP, Trove, which will be published soon also in Asia.
The Asian publisher will also do the localization and takes the investment risk and therefore the revenue share which we get there between 25% to 30% depending on the region where they sell the game, is in the end really big upside potential for us and is directly going to our bottom line because we don't have any costs allocated to the deal. Coming to the revenue diversification. Here on the left side, we see that approximately 50% of our revenues is coming from our top 10 MMO games, which means very steady cash flows, recurring revenues, while 14% is coming from casual games, so subscription-based and 37% from media.
On the media side, we are also well diversified with a lot of gaming companies also integrated, for example, into our software service solutions, where they then can offer their ad inventory, so the ad spaces in their games to other third-party advertisers. Therefore, also our media revenue has a very strong gaming vertical. Looking a bit more into the games revenue split by device and region on page 29. Here on the left side, we see what Remco mentioned already. 78% is from PC clients, 1% just from mobile. The 1% we expect to increase to 10% due to the Trina Digital acquisition with more than 1,500 mobile games have been acquired already. The deal was closed by end of September now, so really looking forward to integrating company, too, now into the group.
Looking at the customer acquisition source. Here we are very strong. 78% is coming from our own media companies, which means that we don't rely on third-party distributors like Steam and so on, and therefore can drive higher margins and don't have to give away the 30% cut which these platforms take. Looking a bit more at the top 10 countries by revenues. Here we see that United States was number one, our biggest market, followed by Germany and France. The three countries have been contributed to 64% to the revenues in Q2 2020. Looking at the recurring gaming revenues in the last five years, here we see our core games, which is also the core of MGI, so MMO games.
There we can see that more than 50% of the revenues is coming from players which are more than five years in the game, which means very predictable steady cash flows, low risk, and with content updates or also relaunches, what we did already with Desert Operations, for example, we can also bring these games to very good organic growth, and have shown this also within Q2, which also contributed to the 35% organic growth in the gaming segment. Coming to slide 31. The licensed versus own revenue, and here we see that we have based our launch strategy on licensed games. This is what Remco also mentioned, so we don't take the EUR 5 million-EUR 50 million investment risk to launch the games, so we take licensed games to launch them. They've been very successful in 2019 and increased our licensed revenue share based on this pretty strongly.
Based on game launches, which also increased our organic growth in 2019. In parallel, we have also put more work into our IP-owned games, like for the launch of Trove. Therefore, have released in the first half year of 2020 much more content updates now for our own games, and therefore the revenue share is now going back to the 50/50 again, which is also driving margins because we don't have to give away on our IP-owned games the 25%-30% revenue share. Coming to the cash flow statement, page 32. Here we see that our operating cash flow has been growing pretty strongly from EUR 310 in 2014 to more than EUR 21 million in last 12 months, which means very strong profitability of our operations. On the right side, on the CapEx side, we have two CapEx items.
There's maintenance CapEx for the further development of our IP-owned games, which we have grown from EUR 1.8 million to approximately EUR 4 million 2019, now keeping it on this level. The increase is mainly also due our organic growth ambitions, so more emphasis on our IP-owned games. Expansion CapEx is for the investments in IP rights as well as M&A, have also grown largely in last 12 months, also due to the Verve acquisition, which was mainly paid in cash. Looking at our adjusted free cash flow, which means operating cash flow with minus maintenance CapEx, we see that we have a very strong cash contribution, therefore can invest, going forward, approximately EUR 17 million in further M&A as well as IP rights, which means that we have also much more operating cash flow to invest in further growth.
Looking at the leverage development from 2014 to Q2 2020. Here we have started with 7x in 2014 and de-levered based on our free cash flow and increasing EBITDA to 2.2 by end of 2019. Have increased our net leverage now to 4.2 in Q2 2020 due to the buyout of our Gamigo minorities. We owned 53% by end of 2019 of Gamigo, and now we own 99.9%. Pay part of the purchase price also in cash, and therefore increased our net debt from EUR 35- EUR 72 million. Always knew that we will also de-lever pretty fast. Due to our free cash flow as well as increasing EBITDA, we have de-levered already to 3.6 in Q2 2020. Now after we concluded the capital increase of EUR 300 million, we have also put in place here illustrative kind of net leverage and de-levered already to 2.2.
Now we are within our target again, between 2 and 3, and even be on the lower side. Looking at adjusted EBITDA, even be below 2, so 1.9x. Very conservative trade metrics. Coming to our short-term financial targets, which is not as common for Sweden, but in Germany, you from time to time do it, and therefore, we put it also into a press release. We target EUR 150 million to EUR 125 million revenues for 2020, which is compared to the EUR 84 million revenues of 2019, a growth of 37%-49%. While on the EBITDA side, we target EUR 20 million to EUR 23 million, which is compared to the EUR 15.5 million reported EBITDA of 2019, a growth of 29%-48%. While again, we want to keep the kind of revenue share we currently have, 60%-70% from gaming, 34%-40% from media.
While on the gaming side, we are already within our EBITDA margin target of 25%-30%. On the media side, we want to go to 10%-15% short-term. For the first half year, we have the net at 8%, but already now, within Q3 most likely will be within our financial targets. Looking at the midterm financial targets. Here we want to grow with the 25%-30% CAGR going forward. Looking at our 43% of last year, so it's absolutely doable and we are feeling very comfortable also with these targets.
Looking at the EBITDA margin for the group of 25%-30%, currently we are at 20%. Due to the increase also on the media side, we will then go more to the 25%-30% midterm, while also the EBIT margin from currently +10% will go to the 15%-20% in line with the EBITDA margin increase. I would like to hand over to Remco for a short summary.
Yeah, we are coming to the final slide. Thanks, Paul. Yeah, to summarize, what is the future bringing? I think that is most important for the investors, as Paul already gave some outlook there. Also on the strategy side, we further want to execute what we have been doing in the last years, which is our buy and build growth story to continue that. It has been proven to be successful, and we think we can also drive it further forward successfully in the next years. What does it consist of? Just summarizing what we presented before. Low business risk focus. Which means no risky and capital-intense development of new games, predictable M&A, diversified revenue streams which are coming from our gaming as a service, MMOs and our SaaS services also mostly on the media side. Focus further on the markets, gaming and media. Both markets are growing.
Both segments are growing more than 10% per year. It's much easier to work in a segment where you're going with the flow as against it. It's nice to have growing markets which giving us a lot of M&A opportunities but also organic growth opportunities. further focus on synergies within gaming and media and between the two segments. Bringing further the games on a Unity Cloud platform, make sure that we have on the media side high volumes and purchasing power, which helps us very much on the user acquisition for the games and further organic growth, getting new users in the games, making great content, and also making advertising spaces available in the games for the media side. also very important, of course, for the investors, focus on the financial targets. Further growing EBITDA and revenues. Also focus on sustainability. Very important.
We also believe in those things very much. We also involve our players in there. Just a short, small example. We had a tree plant action, for example, in our games where people could plant virtual trees, but for each virtual tree, there was also a real tree planted. Those kind of actions we're also doing. It's not only about the money, it's also about making sure that we have a sustainable long-term company here. The financing done by a mix of debt and equity. Asset capital raised. Happy with that. We have a lot of M&A opportunities in futures and that we further can leverage. Looking forward to ringing the bell tomorrow. To be on a regular basis in Sweden. We're now in Sweden also to update our investors on a regular basis and to get you further involved in our story.
Thank you very much. I think we should hand over to the questions now.
Thank you. If you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Again, it's zero one on your telephone keypad if you wish to ask an audio question. There will be a brief pause whilst we wait for questions to be registered. Our first question comes from Lars-Ola Hellström from Pareto Securities. Please go ahead with your question.
Good morning, Remco and Paul. A great presentation. Maybe you can give some flavor about the financial targets. You say growth of 25%-35%. What share of that do you see is achievable in terms of organic growth?
Yeah. Let's say first maybe to make a remark. We try, of course, to be a bit careful on our growth targets, because we don't want to under achieve but rather to overachieve. Historically, we have had a CAGR of up to 40%, as you know, which making us happy. On the organic growth side, Paul already showed some numbers before we started with doing no organic growth the first years where we only put emphasis on buying companies and integrating them. 2018 on 2017, 5%, 2019 on 2018, 10% organic growth, now already in over 30% organic growth for the first half year. We expect much more organic growth in the future. It would of course be dull to only meet our growth target by organic growth. There will be also M&A.
We might overachieve, but we don't want to overpromise here, rather over deliver.
In terms of organic growth, as you grow larger now within the gaming vertical, will you increasingly start to make sequels of your own IP or how will it be built up? You need to have larger project to make a change as you grow.
Yeah. There are basically three ways, of course, to organically grow. The one is to get more users in. That's the reason that we have the media companies. The second one is to launch new games where we get licenses from third party game developers. The fourth one is indeed improving our current own games. What you see also, and Paul showed it in the numbers, that the investments in our games we have been increasing the last years. We are investing more and more. Of course the effects of those investments you will only see in the coming years because doing a big update on the game like we did now with Trove. Trove is a game where we have the full worldwide IP in-house. Trove was in very big update which was totally developed in-house.
To develop even an update like that takes a year or one and a half years. What we're now investing will only be seen next year or even the year after. There's a lot in the pipeline, a lot coming, but we believe in further building our own games because you have the community there. People love the game. The games are great, have a lot of content already, so it really makes sense to further invest in it. That's what we actually have seen also in the acquisitions. A lot of companies that we buy, they're always focusing on the new game and just neglecting that they have great games that you can further invest in. It's amazing game like Fiesta, 13 years old, that we did all time highs during the COVID period.
Yes. Maybe you can give a little bit more flavor on the IP licensing business. It is not super common for the listed companies we have here in the Nordics. Where are you sourcing the games from and what's the prospects going forward?
Yeah, we're sourcing the games worldwide. Maybe because it's not typical, we're also talking here about MMOs, so massive multiplayer games, which are really games that have a lot of invest. We're not talking about the smaller, the games that you play for a few months which are on a DVD or things like that. We're talking really about big games which also have a lot of invest. That's the reason, let's say, that we work with outside studios. There's a lot of those studios worldwide. Typically, just as an example, in Asia, there's a lot of game developers, but they only like to license the game within their own core markets, and they're looking for a partner to launch the game in Europe and North America. Same as we do actually now for "Trove," which Paul also referred to, getting a partner in the Chinese market.
With that, it really makes sense. We are very selective. There's tons of games being developed, so there's no shortage of games. Just to give an example, out of 1,000 games that we looked at over time period, we only signed six. It's really being extremely selective in what we launch. We also have a policy of not announcing games that we're going to launch. We have a well-filled pipeline, but as it is software and as we have seen too often in the past that people are promising to launch a game, then the game is not fully ready, then you're forced to launch it while it's not ready, and then it's a flop. We rather really make sure that with the developers, we finish the games and only then launch them.
There's more going to come and you'll see, let's say our main launch quarters are Q4 and Q1, so you didn't see game launches now in the second and third quarter, nothing, let's say, on new games at least. Q4, we will also most probably be showing something.
How far out in time have you already signed deals on the licensing side? Is it titles that will be released also in 2022, or how far out?
No, we only sign games that are, say, 90% ready, 95% ready, because then we can just give it the final twitch, what we think is needed. We don't sign games where they start developing it or which are only halfway ready because we think that's too high risk, because then we would also get into the development risk, basically, which we don't want to.
We are signing deals now for, let's say, for the next year still, for 2021, but not for 2022.
There are already some signed already, and there will most likely be a launch within Q4 or Q1.
No, there's more things coming up, but that's it for now.
On your own IPs, which of the games are we likely to see a sequel for? Is it all of them that is possible to do a sequel or?
Let's say all of the top 10 where we own the IP, which is six out of the top 10, we are working on sequels and larger updates. The licensed games in the top 10, not all of them, but let's say two out of the four are also working on a larger update, and also in some of the smaller under the top 10, we have some games where we think that there's good growth potential which we're also investing in.
Okay. In terms of M&A, what direction do you want to go? I know you like PC and you're having the lower distribution costs, but if you see the trends in the market, you now acquire Freenet, but there is a third-party distribution of the games. What direction do you want to go? Do you want to expand in terms of platform? Could you even consider premium games, or will you stay true to free-to-play? Yeah, a little bit of flavor would be good.
Let's say the first criterium, I think, is if you're looking at M&A, that we really get sustainable games in. Games that have a long-term revenue streams. Like gaming as a service, which are the MMOs or games which have a subscription behind it. Those are the things. We would not, let's say, do launches where people play the game for two or three months, and then you have to do user acquisition again. Second, if you look at M&A, there should be a certain critical minimum mass, because buying a company which has 20 games which are doing a bit of revenues is not really helpful. We like to have at least 1 target in there with over EUR 1 million revenues per year, because a game that's too small is difficult to maintain enough development on it, et cetera.
The third markets where we're mostly looking for acquisitions are U.S. and Middle, Northern, and Eastern Europe. It has also to do that we really like to integrate companies and countries like France and Spain, it's extremely difficult to restructure companies or to integrate teams. That's the reason that we are not primarily looking at those markets.
Yeah, that was my second question. Will it mainly be what you have in pipeline? Is it mainly inefficient or distressed asset, or is it even some great companies that is profitable already and that you can acquire that good business and even take on the management team and have it more like Embracer and Stillfront is doing, having a separate vertical of that business.
Yeah.
Could you consider that as well?
Yeah, of course. Historically, we have been doing more distressed. 80% was distressed, but 20% was EBITDA positive. Distressed has a big advantage that there's not so much competition in buying those companies, and secondly, there's a very good return on invest. EBITDA positive as Stillfront and Embracer that you're referring to have shown buying EBITDA positive, of course, has a lot of added value. The handicap that we have at the moment is that our valuations are far under our peer group's valuations. If you have valuations like Stillfront, Embracer have, it's very easy to buy with a good multiple EBITDA positive companies. We hope to get into that position also, and that's also the main reason that we're going to the stock exchange here because there's great investors that really believe those stories.
We have seen in Germany that it's a lot of, how do you say, groundwork has to happen, educational investors to really make them understand gaming. That's where we hope to, in the future, to get much more focus also on EBITDA positive acquisitions. We need a bit of help of the investor for that, I think.
To sum it up, in the future, with a better valuation, it can even be that you acquire good companies and pay them issuing kind in shares to have them on board?
Can be. Just looking at the cases Stillfront Embracer, they have, I think, shown really great growth stories where they do a good mix of equity but also payments with cash. We have a strong cash generation. We also have a well-filled cash register at the moment. It's not about now immediately issue equity again. We also like to drive shareholder value here, and we'll see that we always do a mix, or rather also prefer to have some non-equity. As you know, we have two bonds, which also help us to drive growth.
It's all about having a healthy mix for the investors.
Yeah. I don't think you answered my question there about the platform exposure and the business model. Will we mainly remain within free-to-play, or can you consider other things as well?
Yeah. Let's say we love free-to-play because user acquisition costs are relatively low, and it's very well scalable, and it's long-term games. I'm not ruling out that we will also do pay-to-play like ArcheAge: Unchained. We had already normal ArcheAge free-to-play version have now launched ArcheAge: Unchained in, what is it? In Q4 2019. It's a pay-to-play. It still has, of course, like Fortnite, also elements in there that you can buy costumes and those kind of things. There is items still in there, but it's mainly pay-to-play. We also believe in that, but always there must be a long-term player lifetime behind it.
It's really a buildup. Once you have acquired the user, that's the philosophy behind it. User acquisition is very expensive in this whole gaming field. Therefore, the longer you can tie a user and the longer he spends money in your games, the more efficient it is. That's the reason that we're focusing on that. If the games are on mobile or on online or console, we basically don't care. We believe actually in multi-platform. If you have a good game, it should be really distributed on as many platforms as it's suitable for, and on the other hand, also as globally as possible, because a good game is a good game basically everywhere.
Okay. A final question from me here. You've been in the M&A market now for a number of years, done 30 acquisitions. Have you built a reputation in the M&A market so that you're actually seeing an increased deal flow that it's flowing in extra deals every week that is passing by because they know you're really good at doing these kind of restructuring deals, et cetera?
Yeah, it's a good question. You are right. Your observation. Yes, we have now the image because we're doing it clean. A lot of larger companies don't want to do restructurings because they are afraid of the image. We're really very well trained on doing it in a proper way. We also keep our contracts. Also that's a very important point. What we see is that we really get a lot of deal flow because of being a trustworthy partner to do deals with. That's also something that we really rate very highly. If you do deals, we might be negotiating hard to get a low price for it. If there is a deal, we stand to it and really make it happen.
That's all from me. Thank you.
Thank you. Are there other questions? I think people have to unmute before they can ask them.
Yeah, I think the operator will help us, right?
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If you have any other questions, so by pressing zero one on your telephone keypad. Just wanted to confirm if there was any other questions, you may do so by pressing zero one on your telephone keypad. Okay. There appears to be no further questions, so I'll hand back to this.
Okay. There will be ample possibilities to ask for further questions in the future, and we will further present our company. Yeah, we hope to welcome more investors that like our story and see you all in the future. Thank you very much. Yeah. Looking forward for tomorrow for our first day of trading.
Thank you. Bye.