Müge and I are talking to you again this morning from our Stockholm office. We have, as ever, a short presentation to cover the main beats for our operating segments, and we'll take a look at our financial performance and then close with a look ahead before turning over to Q&A. So with that, let's get going. And let's just take a moment to set the scene on the performance, today, but really the performance of Kingdom Come: Deliverance II, which five million copies sold. That was announced today, but actually achieved within the first year from launch.
Now, we've talked a lot about core IP at our recent conferences, and I think this is a great example of a core IP, an owned IP, created by our studio, Warhorse, based in Prague, and a studio sitting at the center of our future strategy as we build out games, delighting millions of players around the world. Keeping on the game theme, last night, European time, the press embargo lifted for Reanimal. We're now one day from launch. We have a strong set of reviews from critics. The most important steps, of course, are ahead, and this is getting the game into the hands of gamers. It really does bode well for horror adventure fans for Friday the 13th. But now we'll come to look at our highlights for Q3. Overall, our Group's Q3 results reflect delivery above plan on both revenue and Adjusted EBIT.
Total net sales were SEK 5.2 billion, an 8% organic drop year-over-year, which we'll see today, comes across from all of our segments, but mainly in Entertainment & Services, which had some tough comps against Q3, fiscal 2024-25. Important to note that all the numbers shown here are now fully excluding Coffee Stain, which, as a spin-out, is treated as a discontinued operation. From a business perspective, our Q3 results were driven by our core IPs within PC/console and seasonal strength within Entertainment & Services and Mobile. Kingdom Come: Deliverance was the main driver, and it's great to see again the team's strong execution, aligning marketing and seasonal promotions, delivering another solid quarter of gamer engagement. Our Adjusted EBIT was SEK 528 million.
Now, this is down from SEK 696 million, excluding divested invest assets, primarily Easybrain in Q3 last year. At SEK 528 million, our Adjusted EBIT was ahead of our plans and shows clear improvement compared to Q1 and Q2. Our free cash flow generation over the trailing twelve months, or TTM, was slightly negative. Again, this is now shown without Coffee Stain and is an improvement against the negative SEK 399 million one year ago. Excluding divested assets, the free cash flow improvement is even greater, and Müge will talk more on this shortly. We're taking positivity into Q4, and this allows us today to increase our underlying FY 2025-2026 Adjusted EBIT forecast. It's important to note we continue to see and work hard to achieve potential upside.
Now, I've said this before, but this is a transformative time for our group. Coffee Stain successfully completed its separate listing in December, and this allows us to now concentrate on our core strategies and growth opportunities. In a nutshell, we hold one of the most exciting IP portfolios in the industry, with globally recognized franchises including Lord of the Rings, Tomb Raider, Kingdom Come: Deliverance, Metro, Darksiders, Remnant, Dead Island. We're building an IP-first organization, one where we will operate with greater sharing and alignment. And to me, this quarter shows progress. Of course, it shows also where focus is needed, and we're committed to strengthening profitability and unlocking long-term value. Now we'll dive into the operating segments and first take a look at PC console.
Our Q3 net sales for PC console were just about SEK 2 billion, shy of SEK 2 billion, a 3% organic decline, and we covered already that our core IPs and catalog really delivered strongly in our third quarter, ahead of expectations. New releases were somewhat soft. SpongeBob SquarePants: Titans of the Tide was our biggest new release, with solid reviews from critics and gamers alike, but it did come up short in digital sales against our plan. Our team at THQ is working hard on this. They have a plan to deliver through our fourth quarter. With news of five billion copies sold, Kingdom Come: Deliverance II, of course, gets a mention. The third DLC, Mysteria Ecclesia, was released in Q3, and this helped drive the game to ever greater heights. Dead Island and Tomb Raider also had a strong quarter and contributed to catalog performance.
Now, our Adjusted EBIT margin trend shows the challenges we face and the opportunities we have. Again, important to note, all this data is now completely without Coffee Stain. We have a strong catalog, and with a more focused pipeline and a more focused organization, we will drive better margins. 13% shows clear improvement over Q1 and Q2. 13% isn't our ambition.... Now let's have a look at ROI, and we share this slide again for consistency, and we share this data. Important to note now, this is also without Coffee Stain and of course, other divested assets from the past. As ever, this quarter's releases are shown on the far left of this graph at zero quarters since release.
Now, without Coffee Stain, the weighted average ROI for all titles has decreased from one point nine to one point eight across all titles, and you see that there in the top right-hand box. Now, bear with me a little bit on this, but I want to find a way to explain where we feel our potential can be. So for this, let's think back to Kingdom Come: Deliverance Two, which, as I said earlier, launched one year ago, which on this chart would be three quarters since release. It's been a successful game launch, you've seen that, and you can see the game at around the 3x level.
This is what we believe is more indicative as an ROI for our core IP after the first year, and this again shows the importance of our three key priorities: investing in our core IP, operational discipline, and targeted cost initiatives. On to pipeline. As of today, we've got 30 announced titles. Reanimal is out tomorrow, and it's fantastic that it's Friday 13th . Milestone's high-speed arcade racing game, Screamer, is also now slated for March 26th. A call out that Tomb Raider fans were excited on news of the Tomb Raider game reveal, together with our partners, Amazon, at December's Game Awards show. It was great to see that Crystal Dynamics and Flying Wild Hog Studio collaboration announced Tomb Raider. Legacy Atlantis, shown here, is the first up, followed by Tomb Raider: Catalyst, the next major chapter in the series.
Now, we're excited by our near-term and our longer-term pipeline, with a range of major projects based on our core IPs launching over the coming 3 years. For our next fiscal year, we look forward to one long-awaited, currently unannounced, major, in-house developed and in-house published title, together with a range of important mid-size titles. Execution discipline will be critical to converting this pipeline into significantly higher profitability and cash generation. Now we'll look at mobile. In mobile, we delivered SEK 566 million in net sales, a 15% organic drop year-over-year, impacted by lower UAC, so user acquisition cost, growth investments. Overall growth numbers include foreign exchange and the divestment of Easybrain. When we look sequentially, it's another positive revenue and margin growth, Q2 to Q3. The team has balanced UAC well, and we're seeing growth begin to scale.
Sled Surfers launched in quarter two and has scaled well so far, delivering revenues ahead of plan. Overall, we're confident on the development ahead. Let's take a look at entertainment and services now. Well, revenue in our entertainment and services segment achieved SEK 2.6 billion, a 10% organic decline year-over-year. And again, as I said earlier, this is really due to the high comps in Q3 last year for PLAION. What's clear to see is that the seasonal revenue and margin uptick for the segment was delivered to plan. When we look at the mix in the segment, Middle-earth's strategic partnership with Asmodee helped drive margin improvement. Our team is excited about the potential for this category partnership. As we look forward, we're also excited about Magic: The Gathering's introduction of The Hobbit into its trading card roster.
As a follow-up to the highly successful Tales of Middle-earth, The Hobbit launch is set for August. With that, I'll hand over to Müge.
Thanks, Phil. Good morning, everyone. Before I start, as we go through the following slides, please keep in mind that following their spin-off, Coffee Stain Group has been reclassified to discontinued operations, so all figures presented exclude Coffee Stain. The year-on-year comparisons also continue to be impacted by divestments. As I take you through the results, I'll also provide some clarity on the underlying trends and performance on a like-for-like basis. Looking at net sales, net sales for the quarter of SEK 5.2 billion were above management expectations and compared to prior year, were impacted by both divestments and FX translation effects. The negative year-on-year divestment impact, primarily from Easybrain, was approximately SEK 900 million, while the FX impact was just over SEK 400 million. If we exclude these impacts, our organic and pro forma growth stands at -8%.
Now, if we break this down on a segment basis, entertainment services was down 10%, primarily due to a strong comparator, with several strong releases from PLAION Partners in Q3 last year. For mobile, organic and pro forma growth amounted to -15%, resulting from lower user acquisition costs in the current and recent quarters. PC console games was down 3% in the quarter, mainly due to decreased work for higher revenue. New releases had higher contribution compared to last year, while on catalog, as Phil also mentioned, Kingdom Come: Deliverance still performed well ahead of our expectations. Gross profit percentage for the quarter was 55%, down three points year-on-year. The impact of divestments was the primary driver, accounting for a reduction of 6 points. Excluding the impact of divestments, the gross profit percentage improved by three points year-on-year.
This was the result of an improved margin in PC console, as well as a slightly favorable segment mix, with a lower contribution from entertainment and services in total net sales. Looking at marketing, total marketing spend was SEK 419 million, or 8% of net sales, down 7 points year on year, largely driven by the impact of divestments, which accounted for a five-point reduction. The non-user acquisition cost marketing of SEK 165 million decreased slightly by SEK 42 million year on year, while user acquisition cost investments dropped by SEK 586 million to SEK 254 million, driven by the Easybrain divestment. The user acquisition cost in the prior year included SEK 471 million related to Easybrain.
Excluding Easybrain, user acquisition costs decreased year-over-year by SEK 115 million, and represented 45% of mobile net sales, down 5 points year-over-year, but largely stable sequentially compared to Q2. Operating expenses, excluding marketing, were SEK 1.2 billion, down SEK 65 million year-over-year and representing 24% of net sales. Divestments impact the year-over-year OpEx evolution by SEK 168 million, and on a like-for-like basis, OpEx increased by around SEK 100 million compared to last year. While this was largely related to timing effects, and we expect a sequential decrease in Q4. Overall, timing impacts aside, the cost base remains relatively stable and continues to be a key focus area for tight control.
This all delivers an Adjusted EBIT for the quarter of 528 million SEK, a clear improvement over Q1 and Q2 and ahead of management expectations. Last year's Q3 included around 300 million SEK from divested entities. Aside from the divestments effect, Adjusted EBIT was impacted by the lower net sales across the segments. Effects also had a negative effect of around 60 million SEK in the quarter. Combined with the timing effect I mentioned previously in OpEx, this led to a minus four-point impact in Adjusted EBIT margin or minus two points when we exclude the impact of divestments. Turning now to cash. Free cash flow after working capital amounted to -75 million SEK for the quarter. This compares to 719 million SEK in Q3 last year. The year-on-year evolution is driven primarily by changes in working capital.
The working capital of SEK -437 million for the quarter is mainly driven by increased receivables arising from seasonal sales close to the calendar year-end. Compared to the prior year, the difference in trend is mainly timing related, and we expect this to unwind in Q4. As you can see in the TTM, which eliminates the timing impacts, the working capital movements on a 12-month basis are largely comparable. If you look at the TTM free cash flow after working capital, we see a significant improvement. This improvement is even greater when we take into account that the comparator included around SEK 700 million net positive contribution from divested entities. In the TTM, we can see the benefit of our efforts to reduce and refocus our investments with a significant reduction in CapEx spend year-on-year.
It's also worth noting that the current year TTM was negatively impacted by around SEK 270 million of FX differences. Looking below free cash flow, the cash outflow from financing activities of SEK -766 million includes SEK -428 million in Q3, related to the repurchase of own shares under the SEK 500 million share buyback program. The net cash flow from acquired or divested companies of SEK 297 million relates to the payment of earn-outs from past acquisitions, partly offset by the net proceeds of divestments of non-core assets. In TTM, the significant inflow of SEK 12 billion relates to the net proceeds from the divestments, with Easybrain representing the largest portion.
At the end of December, this results in a net cash position of SEK 2.9 billion, and available funds of SEK 5.8 billion. I want to take a few minutes to look in a bit more detail at the evolution of our net cash position over the quarter. Net cash at the beginning of the quarter of SEK 4.2 billion, comprised SEK 6.1 billion of cash and SEK 1.9 billion of liabilities to credit institutions. As I covered on the previous slide, we had a limited outflow in free cash flow after working capital of SEK 75 million. The largest part of the net cash evolution was driven by a number of key strategic and corporate actions.
These include the cash return to shareholders via our share buyback program, amounting to SEK 428 million in the quarter, the net cash impact of the Coffee Stain spin-off of SEK -495 million, the net cash proceeds of SEK 219 million from divestments of non-core assets, and the payment of earn-outs in the period amounting to SEK 516 million. It is worth noting that we have now relatively limited earn-out obligations of SEK 730 million spread over the coming of six financial years, just under half of which are due in fiscal year 2026, 2027. Net cash at the end of the quarter of SEK 2.9 billion comprised SEK four point nine billion of cash and SEK two billion of liabilities to credit institutions.
After the completion of the key strategic and corporate actions I've just mentioned, we thus maintain a strong financial position. Looking ahead, we expect to deliver at least SEK 750 million Adjusted EBIT for the full financial year. I want to reiterate once again that this fully excludes Coffee Stain Group, following their spin-off and reclassification to discontinued operations in our results. As a reminder, our previous expectation of at least SEK 1 billion announced in Q2 included a full year's contribution from Coffee Stain Group. As we have stated here, we do see some upside potential from underlying business performance. I will hand back now to Phil for some closing remarks.
Thanks, Müge. So again, a great screenshot here from Tomb Raider, and this really brings us onto our last slide today for some closing remarks. Now, as we talked about, core IPs continued to outperform this past quarter. This goes for both games based on core IPs released one year ago, but also three and eight years ago. And this is an important signal for our future direction. That said, we're not satisfied or happy with the profitability within PC console, and there are a few important levers that we expect to have an impact on partly different timeframes. First, as mentioned, how we execute with discipline on our pipeline will be key to drive higher profitability and cash generation. Second, we're committed to strengthening profitability and unlocking long-term value, and how we do that is captured in our three key priorities, which we've talked about since August.
IP first, IP led, we are rapidly shifting our investments towards higher return core IP. This group of IPs have had an ROI of 3x historically, versus one point eight across all titles. In this past year, the share of CapEx allocated to core IP has increased from 20% to 40%. Longer term, we see it moving towards 80%. This will not drive profitability in the next quarter, but it will drive lower CapEx, and we're confident that it will drive stronger profitability in the coming years. Additionally, we are continuously targeting a reduction in not just CapEx, but also OpEx, as we complete consolidation initiatives and as we continue simplifying and adapting our organization's size and shape around a more focused portfolio. This will be key to making better decisions quicker and to improving profitability.
We have more work to do here, but we see it as a strong profitability driver. Now, during the quarter, we divested several non-strategic and unprofitable businesses in third-party publishing and work for hire. This improves our focus, and it improves our capital efficiency. These assets jointly had a negative Adjusted EBIT of around negative SEK 180 million on a TTM basis. The impact of this is quite immediate, and so these achievements in Q3 are important. As part of this closing, of course, we touch on AI. AI, well, it's certainly accelerating both its technological advancement, but also as a topic of conversations in our sector. As discussed at our AGM in September, we see significant potential in AI-driven tools. It can meaningfully enhance development, production, and operations for us.
As an industry that has always embraced innovation, we actively explore and adopt AI, where it strengthens our products and improves efficiency. Now, we view AI as a tool to support and empower our teams. World-building, storytelling, and creative direction will remain firmly human-led, ensuring that creativity and originality continue to define our experiences.... Phil, our long-term direction is now taking shape, and we're building towards a disciplined IP-first group. We remain committed to continuing the distribution of any excess cash to our shareholders, and we will provide further updates on our strategy and structure as we make progress and as soon as we have more news to share. And that really brings us to the end of our slides and notes this morning.
Before we hand over to Q&A, I'd just like to express my thanks to all our teams across the group for their hard work, dedication, and passion. With that, I'll leave it to the moderator and the Q&A session. Thank you.
If you wish to ask a question, please press pound key five on your telephone keypad. Please limit yourself to two questions at a time and then return to the queue. The first question comes from the line of Nicolas Langlet from BNP Paribas. Please go ahead.
Yes. Hello, Phil. Hi, Müge. So I've got two questions, please. The first one on the full year 2027 pipeline. So you mentioned the long-awaited internally developed title. When do you expect to make the official reveal? And can you update as well on the Marvel game? Should we expect it for full year 2027 or not? Secondly, on asset disposal, so you divested non-strategic asset in Q3 for SEK 180 million Adjusted EBIT loss. How much further scope is there for pruning loss-making assets? And what's the aggregate negative EBIT still embedded in the remaining portfolio that you could address in the coming quarters?
Thanks, Nicolas. Good morning. Thanks for your question. I'll take the first one, certainly, and then we'll see how we combine with Müge on the divestment and scope. The reveal is fast approaching. We'll blink, and we'll practically get there, but it's not something today on a corporate thing that we're going to date. But we're excited about it. The team is excited about it. And I promise we haven't got too long now to wait. For Marvel, we really leave that for our partners at Skydance to comment on. And I think that's the best way that we approach it right now. As for divestments, you know, there is further scope.
I don't know if we've got a range right now that we're prepared to, or would be sensible actually, to offer up. But I think it remains one of our core initiatives today, as we really continue to sort of focus and sharpen our execution.
Good morning, Nicolas. Maybe one thing to add to that is that, as we've mentioned, the impact of the divestment of non-core assets represent 178 million SEK on a trailing twelve months basis. So it gives you an idea of the annual impact. And as Phil mentioned, it is part of the normal course of business that we assess depending on the criteria, which is a part of the business steering process.
Okay. Okay, great. I will go back in the queue. Thank you.
The next question is from Jakob Edler, from Danske Bank. Please go ahead. Your line is open.
Hi, Phil and Müge, and thanks for taking my questions. I have one follow-up on the own published Triple-A pipeline that we just talked about. A couple of quarters ago, you discussed 9 Triple-As in the medium-term slate for 2026, 2027 and 2027, 2028. You haven't reiterated this message since, I believe, Q1, but can you add any more flavor on how we should look at the midterm slate here, given that you're talking about one own published major title for 2026, 2027?
Yeah, I mean, we pipeline's obviously building. It's a living thing. We're very excited about it. We've got a range of major projects based on core IPs that are scheduled to launch over the next three years. I think there's other color. We talk about sort of release cadence historically also, and when we think about release cadence in the past versus the future, we definitely see that sort of quickening up. I think the past five years, we've had just over one Triple-A game per year, and we certainly see that as we plan forward now for multiple years, we see that increasing. But I think, you know, all the games are there. Our focus now is really on fiscal 2027.
We're not talking yet about forecasts for next year. We're still deep in planning, you know, for fiscal 2027. And as I say, today, we're excited to feel and know that, you know, we've got one major in-house developed, in-house published, you know, and as today, unannounced title that, you know, we're excited to get in front of the world pretty soon.
Yep. Very clear. Just a second question. I mean, the catalog in this quarter was quite strong and probably a bit better, I would assume, than what you expected in Q2 when you said, you know, limited profitability within the PC console segment. Just a question, the main outperformer here versus your expectations, is that, you know, Kingdom Come: Deliverance, would you say? And also, are you able to add any flavor on how big, eventual, you know, platform deals were here in Q3? And was Killing Floor 3 the biggest one?
I'll certainly take the first one, and then Müge can pick up the, the platform deals, I mean, catalog, I really see as a, as a fantastic asset for us. You know, we used to talk about back catalog and, and, and whatnot, frontline, backline, et cetera, et cetera. But, you know, these are games we've seen that through the DLCs that we've offered and continuous sort of, you know, community management and engagement, we see more and more players coming in. So KCD certainly was the standout. You're absolutely right. You know, if you think about that game in Q1, we reported some softness really, you know, lower than expectations against the sales, and then we saw competitive pressures for that, and we saw that coming back into Q2.
And we're really pleased that it continued to drive Q3 through Q3. I think operationally, there's a much tighter group now, you know, commercially and marketing and studio-wise, that is really on that execution. And we're delighted that with a game like Kingdom Come, high scoring, you know, the review user comments are fantastic, that there's more and more players out there, and it's our role to find the players. I mean, 5 million is not the bar now, right? It's how we find more players. The player base is ever growing. So I think we're really I like to think we're finding a good approach now to how we, you know, we work at an IP level versus thinking it's, you know, catalog and it's always gonna decline.
But it was definitely the biggest one with other examples as well, that just came through. We mentioned Dead Island, and Tomb Raider had an uptick with the announcement. You know, that always drives more activity into you know, beloved games.
Right. And, hi, Jakob. Maybe on the platform deals, well, you know, we always expect something on a quarterly basis and in Q4 as well, but nothing really major is expected. And, looking into Q3, the amount which is being pulled from Q4 represents a very minor portion, so the real underlying performance is really coming from the PC console part. You know, the KCD, Dead Island, as Phil also mentioned. So, this part, this platform deal, doesn't represent an important portion, I would say.
Okay. Thank you so much for your answers.
Thanks, Jacob.
The next question is from Amar Galijasevic from Carnegie. Please go ahead, Ammar.
Good morning, guys. With only two questions, I have to be smart about which I pick here. Starting off with one, it's a near-term question. You guided for at least SEK 750 million of Adjusted EBIT for the full year, which implies, I guess, some SEK 200 million in Q4. Can you share some more color on how we should think about that buildup? Is the majority of it related to Reanimal? Is it related to some platform deals, or how should we think about that?
Good morning, Ammar. Thanks for the question. Well, I'd like to first reiterate that we feel comfortable with our latest view, where we see some further upside. So I think we need to bear that in mind when thinking around Q4. We're, of course, very excited by Reanimal, but as Q3 has also shown us, the underlying business, the catalog is also delivering good results. So when we work on our forecast, we do factor different ops and risks, which, as a net assessment, makes us believe that there's upside to that minimum, SEK 750 million full-year outlook.
That's crystal clear. Next question on a completely different topic. You mentioned here a couple of quarters that you look to distribute excess cash, but nothing concrete. How should we think about what is, you know, a minimum liquidity buffer for you? Or, you know, how much cash do you want to hold on balance? And why no capital allocation plans announced yet?
Thanks, Ammar. As previously indicated, we up until already January, as you know, we had been fully focused on the recently share buyback program and some other corporate and strategic initiatives, as I've also earlier presented the bridge on, including the portion of cash to Coffee Stain. We've always said that we are in a sequentially assessing all ways the balance sheet needs in the right fit of business needs. So, if as a result of that, any excess cash is to be always considered to be returned to shareholders. So, it is part of the thinking process.
Now we got our Q4 to focus on, and we'll be working on next year in parallel, and you can take that as a general direction, I would say.
Okay. Thank you very much, guys. I'll jump back into the queue then.
Thanks, Ammar.
Next questions is from Simon Jönsson, from ABG Sundal Collier. Please go ahead, Simon.
Thank you, and good morning, everyone. First of all, I have a follow-up question on Jacob's question on the backlog. You said that platform deals represented a minor part, if I understand correctly, of the back catalog, but I wonder if the contribution in total from platform deals was it still bigger than last quarter?
Thank you for the question. In comparison to Q2, I think in absolute terms, I would expect something very similar. So, we haven't been exposed to something bigger in this quarter, particularly.
All right. Thank you. Then my second question is on the CapEx. And you're saying that you're moving towards a higher allocation towards the core IPs. You talked about 80%, but if we looked at what you're spending right now, what is the current split of core versus non-core, would you say?
I think we indicated it will be sort of 40% of that CapEx this year is really allocated against core IP. Eighty percent certainly is a sort of, I'm gonna use the word longer term, but you know, it takes time to get production lines, production teams up and running. Obviously, you have to find the right opportunities, et cetera, so that's probably more of a longer-term thing. But 40% today is where we, where we're allocating.
Okay. So 40% is still for, for the sort of upcoming, upcoming year, you would say?
It's more now. I mean, I think even this quarter, we're at that level. You know, it might have been 37%-38% this quarter and moves to 40% next quarter, I believe. So, you know, and as we step forward, you know, that's probably a 20% shift over the last 18 months or so, and obviously, we're quickening pace now, so we'll probably get to, you know, another 20% within the next year, I'd say, as a rough guide. But, you know, it's a very, again, we tried to talk to this point about some things take time to come through in numbers, and that's one of them, right? It's a longer-term thing.
But, you know, we've taken those deliberate steps already starting last August, where you think about that allocation to which IPs and which teams. So we'll see that coming through quite strongly, I think, over that timeframe.
All right. Thanks for that.
The next question from Erik Larsson from SEB. Please go ahead, Erik.
Thank you, and good morning. I'll start with a follow-up on the back catalog, and I mean, obviously, you've been clear on your ambitions with core IP, but I've gotten the impression that you've been more sort of active and opportunistic in terms of campaigns and discounts, et cetera, on some of these titles you mentioned. So is that a fair observation, or is it kind of too early to see it in the numbers? If you understand my question.
Yeah, I mean, I think we've got to recognize there's a commercial side of gaming today as well, and you know, opportunistic is I think we've got to be smart traders with that as well. We've got ever-growing number of platforms to offer. Gamers are never been more gamers coming to these platforms. They've never had greater choice. So how we combine, you know, marketing, influencer, cultural events, you know, price as well, of course, these are the levers that our commercial teams are actively looking to optimize and do well in. You know, discovery of games today is tough. It's a real challenge. So, you know, we've got to work that, you know, in many, many ways. You know, I like the way that it felt last quarter.
I think that we're seeing that quickening up, you know, proactive decision making, and that comes through in the numbers. You know, we're a trading company in that respect, and we have to work in that way.
Okay, great. And then, second question on Middle-earth, with the deal with Asmodee. So just first, please clarify if there's any sort of one-off items affecting the numbers we should be aware of during this quarter, and then just, of course, outline how, how you see the, which primary benefits, on your end with this agreement.
Hi, Erik. I'll just maybe start with the technical part of it. There isn't anything weird or items affecting comparability on this, on this regards. I'll let maybe Phil elaborate on the deal itself.
Yeah, I mean, it's... So we announced it, I think already in October first, so it's towards the start of our quarter. Obviously, we know the team at Asmodee fantastically well, and it really falls greatly in line with our strategy around, you know, working with experts, with people in the top of their game. So with an IP like Lord of the Rings to, you know, strengthen now the partnership, formalize the partnership, we talked about being, you know, they're gonna manage the tabletop games and accessories category, you know, for us, for the Lord of the Rings and The Hobbit. So it's a long-term relationship we're really excited to push into.
We really see their ability for reach and engagement, you know, delighting fans with the very best tabletop game experiences, you know, set in the world of Middle-earth is very exciting for us as overall sort of guardians, and, and, yeah, we've got the advantage of having, you know, being part of the same group and still being, feeling very closely aligned, and, especially strategically. So that's how we see the partnership, a lot of excitement and, and, and certainly, you know, partnerships that we'd like to extend and, and, and replicate in other categories as well.
Perfect. Thank you so much.
Next question from Rasmus Engberg, from Kepler Cheuvreux. Please go ahead, Rasmus. Your line is open.
Yes, hi, good morning. Thanks for taking my question. Super curious about that announcement you're going to make about your new big game that you flagged. ... would it be possible to say that this is an existing IP based on, on it’s not a new IP, right?
I think it's fair to say that I'm happy firstly to get your excitement. I love it. The game we sort of play on events like this is fun, but if you just hold, you know, for a little bit longer, all will be revealed. But I think that's a fair assessment, yes.
All right. Thank you. And then on your structural deals and adjustments to the company, you know, you have sold a couple of assets that are loss-making. I'm sure there are plenty more, but would you consider selling assets that are profitable but doesn't necessarily bring anything to the party, as in terms of being a PC console company?
I think Phil reiterated the three focus areas as we look ahead, in terms of, you know, operational discipline, the core IP focus, and the strategic alignment. So, these are the really key areas that we focus on. So, we are very much committed and engaged to working with what works extremely well, trying to see how we can make things even better. So, focus is definitely a priority for us, and that comes with the things that work already very well, and how we can replicate and roll them out further.
Yeah, and I think, I'd just add to that, I mean, we spend a lot of time on PC console because that's where the bulk of our CapEx, that's where the bulk of our operations have been. But, you know, we, we report widely about our segments. We're, we're broader than that. We are a, you know, we have a broader entertainment offering.
So I know we focus a lot on PC console, and therefore you might conclude anything outside that is non-core, but we are a broader play, but our focus is on PC console because that's where we see the best scope for margin improvement and alignment around, you know, the strategic priorities we talked about, which is really getting in line with our core IPs, and, you know, find those simplicities and simplifications that say in our business.
I think it's worth mentioning that, and you have seen, we're really, really also looking at the shareholder value. So, you have seen that if it does make sense, and if it is unstrategic or if it is unprofitable, it is really optimizing and maximizing shareholder value that we incorporate in the thinking process, too. So that will be the guiding principle.
Thank you. Fair enough.
The next question is from Nicolas Langlet from BNP Paribas. Please go ahead, Nicolas.
Yes. Hi again. I've got two follow-up questions, please. First of all, on the full year 2027 profitability inflection you mentioned, in the press release, can you give us a directional framework regarding the kind of inflection you are expecting? Is it fair to assume a return to double-digit Adjusted EBIT margin at group level? That would be the first question. And secondly, on the GenAI tool comment, how long do you think it will take for those tools to make an important contribution in your development process? And for example, do you expect any GenAI impact to be material in the nine AAA game you have in the pipeline? Thank you.
Hi again, Nicolas. So I'll, I'll maybe start first and then, Phil, I'll let you take over. As you've seen already, year to date, Q3, we have divested unprofitable businesses that contribute to improvement of the profitability. We've already shared that, we've got next year, at least one major title together with a bunch of mid-sized titles planned for next year. If you were to compare that to this year, where, as you know, Killing Floor's performance has been below the expectations, and the underlying business performance that we have in Q3 and what we foresee in Q4, I think just that comparison gives you enough room for a confident earnings inflection for next year.
I think to the—I mean, GenAI, it's a really, it's a really great question. I'd say right now, where we're seeing. And it is really common. I mean, I'm fortunate if I can travel around and walk around lots of studios and talk to a lot of lead animators, designers, engineers, and it's fascinating to see how, you know, our, you know, I'd say brightest minds, but lots of minds in our, in our group are really inquiring and leaning into AI. If there's a trend there, I'd say that we're seeing it in more concept work and pre-prototyping. I think we're generally getting ideas off paper, you know, into 3D models, as we talked about this at the AGM, way quicker than a year ago.
You know, the advancement has been that fast, and then, you know, from 3D models into game, into 3D worlds, you know, again, way faster. And this is really as a design, as a concepting tool, as a prototyping tool, being really helpful to see what we think is gonna work. And we talked about things like AI voice, how we don't see that in the final games, of course, but we see it, you know, as a design tool. So, you know, with that, perhaps as logic, you know, the 9 games, you know, they're deep into production now, and probably at the... They're at their stages of the concept in pre-production. The GenAI tools were just less pervasive and strong.
So I think we'll really see it coming through sort of over the next wave. And it's, you know, and we're excited by it.
Superb. Thank you, Phil. Thank you, Müge.
There are no more questions from the telco at this time, so I hand the word back to you, Phil and Müge, for closing comments.
Thank you. Well, thank you again, everyone, for attending our conference and for your questions as ever. That's all from us today, and with that, we will close the conference.