Hello, welcome to this Q1 presentation for THQ Nordic. We have the CEO and Founder, Lars Wingefors, here as always, which is a pleasure. Solid Q1 numbers, I think, and I think a record amount of acquisitions as well. 6 total acquisitions, of which some I think are larger than others, but one of the more interesting ones, Milestone, of course, and I think we have someone presenting here today as well. Without further ado, I'll leave it over to you, Lars. Please go ahead.
Thank you, Oscar. Good morning, everyone. I'm happy to announce another stable quarter. Our revenues grew 36% to over SEK 1.1 billion. Our operations grew close to 200% to SEK 204 million. The cash flow was also stable with SEK 441 million in the quarter. Overall, the quarter was driven by very strong back catalog sales, with a high digital sales %. Titles that drove the back catalog sales was Metro Exodus and Satisfactory, amongst many others. Also in the quite extensive Q1 report, I'm happy to say that we had record investments into our game development pipeline with SEK 356 million in the quarter, and that will drive our organic growth in the coming year and years. In total, we currently have 81 pipeline projects, whereof 34 of them have been announced by end of the quarter.
Happy to confirm this morning that we got at least two AAA projects expected to be released in the next financial year. Happy to announce that we are continuing building also the parent company. This morning, I assigned the duty of Group CFO to Johan Ekström from Värmland, Arvika. Promoted my co-founder since 20 years, Erik Stenberg, to Deputy Group CEO, vice koncernchef. Looking more into the numbers. The net sales grew, as stated, 36% to SEK 1.142 billion. The EBITDA grew 88% to SEK 390 million in the quarter. Operational EBIT to SEK 204 million. The overall operational EBIT margin grew from 8%-18% in the quarter. We're also disclosing a new alternative KPI, adjusted EPS, earnings per share, that grew in the quarter to SEK 1.53. Looking at the depreciation and amortization in the quarter, the EBITDA were, as stated, SEK 390.
Our operational D&A were games development, SEK 162 million of released products. Furthermore, we had other intangibles, mainly films, SEK 17 million. That comes to the operational EBIT of SEK 204 million. Then we have the acquisition-related D&A. As you all remember, it's all written down on a straight five years basis. IP rights, SEK 69 million, surplus values, SEK 8 million, and furthermore, goodwill of SEK 46 million, coming to a reported EBIT of SEK 81 million in the quarter. Investments in total were SEK 378 million in intangible assets. External games development were SEK 225 million for our upcoming game pipeline, and our internal investments that were capitalized was SEK 131 million in the quarter. As you can see on this slide here, our investments continues to grow quarter by quarter, and that will drive the organic growth in the future. Cash flow remains stable.
Worth to notify that we did not use any forfeiting compared to the last quarter-end. The cash flow from operating activities after the change in working capital were SEK 441 million in the quarter, compared to SEK 165 million in the comparable period last year. The balance sheet. I always think it's good to run through the balance sheet because it's becoming bigger and bigger. As of end of June, we had intangible assets of SEK 3.8 billion, whereof SEK 427 million end of quarter was finished, completed games that are under the two years' amortization, two-thirds the first year. We have capitalized ongoing game development projects of close to SEK 1.3 billion. Other intangible assets, mainly films, SEK 163 million. We got the IP rights from acquisitions of exactly SEK 1 billion. The surplus values in the business areas of SEK 161 million and furthermore, or finally, the goodwill of SEK 787 million.
In the end of the quarter, we had over SEK 3.1 billion in cash, and available liquidity of more than SEK 4.5 billion. Digging into the business areas. First of all, the combined games business areas. Looking at the net sales, the combined net sales in the quarter was SEK 641 million. On a trailing 12 months basis, that's over SEK 2.5 billion. The quarter had a 33% growth both within THQ Nordic, Deep Silver, but also obviously by the addition of Coffee Stain compared to last year. The digital share of the revenues was in the quarter the record of 71%. I would say it's more relevant to look at the trailing 12 months basis, and that are now at 58%. Their own titles share are on a trailing 12 months basis continue to increase, currently at 75%.
In the quarter, we did not have any strong own new releases. The share of new releases in the quarter were 18% only compared to 75% in the previous quarter. Deep Silver. Looking at the KPIs to start with, we had net sales in the quarter of SEK 373 million compared to SEK 338 million in the same period last year. We had strong back catalog sales driven by a number of titles, Metro Exodus, Kingdom Come: Deliverance, Outward, and many others. We had a number of releases, seven in the quarter. For example, we had Saints Row the third, a port on Switch. That did fairly well. We had Kingdom Come: Deliverance, a Royal Collector's Edition, and the new and last DLC for that game. Also in the Q1 report this morning, I have given update of the Deep Silver business, and I think this is important.
At our own studio, Volition, in Champaign, I'm confirming that they are working on the new "Saints Row" game, and they're well into the development. Confirming that Dambuster Studios are now leading the development of "Dead Island 2." I'm also confirmed that Fishlabs is working on a new IP and a number of other unannounced projects out from their studio in Hamburg. Already last quarter, I confirmed that we have a new contract with 4A Games. I'm very happy to have them as external studio within Deep Silver, and they continue to work on the "Metro" franchise. Warhorse are into the development of the next coming project, as I previously have stated. Finally, I'm confirming that we had Steve Ellis, one of the co-creators of "TimeSplitters," and "TimeSplitters" is an IP that we acquired last year.
He's helping us to plot the future course of the IP. Stay tuned. Other than this update, they have a number of releases in the pipeline. Already confirmed earlier in the year, we have moved the Shenmue III release from this current quarter to November or our financial Q3. Looking at the Coffee Stain business area, they continue to over-perform according to our expectation at the time of the acquisition. Satisfactory is performing well. Such a steady daily sales, but as well, they had a successful promotion on the Epic Games Store in the quarter that also drove a lot of units. In the end of the quarter or early in July, they had a major content update called Trains & Nuclear. They did not have any other new releases from the Coffee Stain Publishing in the quarter.
The other products continues to perform well, notably Deep Rock Galactic. At E3, they announced two new PC titles, Songs of Conquest from our partly owned studio in Gothenburg, and Midnight Ghost Hunt from the external studio. Both was very well received, I'd say. Looking at the Partner Publishing business area. We had another stable quarter with SEK 501 million, compared to SEK 354 in the comparable period last year. The growth is mainly attributable to the earlier release of F1 this year than the previous year. This year it was released in June, and last year in August. Notable other releases were from our friends at Sega, the Team Sonic Racing, the Total War: Three Kingdoms, and from our friends at Solutions 2 Go, the World War Z.
Looking at releases in the current quarter, we have two products from our friends at Square Enix, Dragon Quest Builders 2 and Final Fantasy XIV, and from our friends at Bethesda, two Wolfenstein products. Also stating in the reporting this morning that we have signed two notable agreements with major independent games developers for their physical partner publishing business. One I mentioned this morning is Dying Light 2 from Techland. Also stating that we will have notably fewer releases in the current quarter than we had in the comparable period last year. Again, F1 was last year, but we also had Tomb Raider from Square Enix, for example, in the comparable period last year. The physical market in general has headwinds, but we see this as opportunity to drive market share growth. We increasingly see the outsourcing from other publishers or the need for that.
We are still committed to the physical market. On the M&A side, well, I was promising to have vacation, but things turns out that there were a job to do in the end of the vacation period, especially. We have, I would say in general, the M&A prospects looks solid. We have a solid pipeline of companies and talents that we want to bring into the family, both within the current three operating groups, but potentially also candidates to become the fourth operating groups in the future. This is everyday job that is taking place at the parent company as well as within the operating groups. We had three partner publishing acquisitions I'm proud of to announce this morning in the reporting. Two companies that I partly owned with my co-founder management that has been disclosed in the reporting.
The decision of these two acquisitions has been made by the independent part of the board. One of them being Gaya, a leading European manufacturer of gaming IP merchandise and collectibles. It fits well to the need for collector's editions and merchandise. We could obviously use all our IP portfolio against this business, as well as working with other leading IP holders across the world. It's an entrepreneurially driven business founded by the two founders, Andrea and Marco Schmidt, 29 employees, net sales of EUR 6 million last year, 2018. I sold it for the record price of EUR 1. It's not generating any goodwill or bad will. With synergies, for example, the consolidation of shipments, we expecting this business to have profitability in the future in line with the rest of the partner publishing business.
We are proud and happy to welcome Game Outlet Europe, the origin of actually THQ Nordic, into the group. This is the business I founded when I was very young, 1994 in Karlstad. Today it's a very stable business with about SEK 90 million in revenues and a healthy profit margin with SEK 9.5 million EBIT 2018. It's well-managed and well-run by the CEO, David, and along with the other team that has been in the business partly from the '90s. The price is SEK 10 million for 100% of the shares, equivalent to the unrestricted equity, which implies a 2.3 enterprise EBIT on a cash and debt-free basis. Their business is hardcore gaming, retro products, hardware, accessories, as well as value software business that are supplying e-commerce partners such as Amazon and [Azerion] and others across Europe.
They don't carry full price new releases, so they are not in a competition with our other business at Koch Media. They are a complement to the part of publishing business. Finally, we acquired within Koch Media in Germany, KSM Films, that are focused on anime films. Also stable business founded by entrepreneur, 45 employees, EUR 17.5 million in net sales with a closer to EUR 1 million profit last year. This will be a lot of synergies with the current film business. The management made a strategic review of the group's film business and concluded that we need to have a critical mass in order to stay relevant in the business and to improve the return of the capital. This transaction is not either generating any goodwill. We are actually paying the equity value of the film rights catalog.
It's a digital and physical business. They are very welcome into the group. That was the Q1 presentation. I know you probably have a few questions, Oscar, this morning, but my plan is that we are continuing presenting the acquisitions and then some other things, and then we do all the Q&A in order to have the time. What excites me the most this morning is to welcome Milestone to the group. I would like to welcome Luisa up on stage here. Hello.
Hello. Good morning, everybody.
Yeah, please.
I'm Luisa Bixio. I'm Milestone CEO, and I'm very happy about this deal, and thanks Lars for the opportunity to be here with all of you.
Yeah. Thank you, Luisa. I'm honored to have you here and to have you in the group. I would like to present the deal and the transaction with you and share the financial details, then I will let Luisa to present the actual business. In general, the business are impressive. Possessing impressive track record with more than 50 games developed, eight million games sold. It's a leading racing developer. It's very efficient, it's stable, it's recurring in the sense of the products are coming yearly or bi-yearly, and they have an attractive business model that increasingly are becoming digital. You have a strong pipeline. You will tell us more about that in the future. Looking at the transaction, we paid this morning, and it was a close call to sign this in Rome, this 6:30, but we made it. Our notaries and lawyers.
On the net cash basis, debt-free basis, we're paying EUR 44.3 million this morning, whereof EUR 11.5 million is by THQ Nordic B-shares. The company has a net cash as of yesterday of EUR 10.9 million. We have agreed a potential earn-out of the accumulated adjusted EBIT levels of the coming three years in the current financial years of Milestone, starting 1st of July. We have set a business plan and a target that we both believe in. If we are together hitting that business plan, the earn-out is EUR 28.9 million, whereof EUR 15 million are paid by shares as of this morning under lockup and clawback, which if you reach below 70%, there is no earn-out, and you can increase the earn-out up to 130%. It will have a financial contribution.
I'm giving a forecast of the period of 1st of July to end of June, to next year, of net revenues of EUR 27.5 million-EUR 32.25 million. With the EBITDA of EUR 15.5 million-EUR 18 million, with the operational EBIT contribution of EUR 10.75 million up to EUR 12.5 million. Milestone. Luisa, the stage is yours.
Thank you, Lars.
You can sit here.
Wow. It's this one?
Yes.
Milestone has a long history in racing game. It has been founded in 1994 by a small team of developers, very passion for games and for racing. They have been soon noticed by some of the major publisher at that time. In a few years, they produced Screamer for Virgin. Screamer is one of the game that made the history of racing game. They produced the Superbike series for EA, and they started to grow up. After, we work for Infogrames with Racing Evoluzione. We produce MotoGP for THQ and for Capcom. We produce the WRC series and SBK series for Black Bean, always in racing. Till around 2012, we decided that it was time to produce for Milestone, and we became, in 2013, developer and publisher of our title.
We started to publish the MotoGP series, we entered again in 2013 in the cross market with the MXGP series that we produce clearly even now. In 2015, we released what is the most important Milestone IPs, is Ride. Ride is considered the most complete bike game released. Till in 2018, when we, for the first time, we published Supercross, Monster Energy Supercross, from an agreement with Feld, till arrive to the current release. Today, we publish every years MotoGP, MXGP, and Supercross, and we publish every two years, Ride. Our goal for the future is for sure increase the value of our current IPs.
Switch this.
Oh, thank you very much. For sure increase the value of our current IPs, increasing the quality, the technology level. On the same time, we are already working on three not announced IP that I consider very important, and I think they will be a key for the growth of Milestone business for the future. Who we are? We are around 200 people. We are based in the very center of Milan, and in the same office there are developers and publisher team. I'm very glad and proud of my team. If you come to see Milestone, you will see all people that is very passion for racing, very passion for game.
On the same time, we are the most important developer in Italy, and people is very proud to be in Milestone and very committed on what we are doing and what we have to do for the future. Milestone, our culture is highly focused on process in a day by day. We give huge attention to process, to planning, and efficiency. It's a key because we produce three, four title every years. It's pretty complicated. On the same time, is very important the value of each person in Milestone. Our door is always open for new ideas, for new and there's a good atmosphere. I manage the team, not alone clearly.
Beside me, there are five managers. We have been working together for many years, and I'm very convinced they are the right people to manage with me the company through the goal we set in the THQ family. Our history, again, is racing games since 1994, four wheels and two wheels. Even if in the past couple of years, we decided to focalize our attention to bikes, two wheels, becoming the most important company worldwide in this segment, and I think that we can grow even more. Okay. Our current IPs are three annual franchises, as I told, "MotoGP," "MX," and "Supercross," and "Ride" every two years. The strategy for the future is, for sure, invest in the quality of current IPs with the goal of consolidate our position and increase our market share in this segment.
At the same time, we worked a lot to find other IPs that are near Milestone's D&A, but they are different, with a clear purpose to speak to a wider audience and to make Milestone business grow a lot. The result is that we are already working on these three not announced important IP that will be released all in 2021.
Okay, sure.
MotoGP." "MotoGP" is our historical franchise. We produced nine "MotoGP" till today, seven as a publisher. The last one has been launched June last year and has been very well-perceived from the critic. We received around eight Metacritic, but has been very well-received from the community with lots of enthusiasm. "MotoGP 19," I consider this game a step forward compared with all the previous one. The major highlight of the game were a completely new online, based on Amazon server, that really gave lots of enthusiasm in the community.
Even more important for me, because it's Milestone technology, for the very first time, we introduced in a game a new AI system for the single-player experience that was based on neural network and machine learning, on a technology we called internally ANNA, as Artificial Neural Network Agents, where in the single-player experience, the AI agent compete with the player like a human being. That's the big difference in a gameplay experience. Milestone has been the first company ever to implement a neural network AI in a game. MotoGP is a game, is esport. Since 2017, we started the official esport championship together with Dorna, and has been a big success. We have more than 15,000 participant. Last one has been broadcasted by more than 16 broadcaster. We have very relevant sponsor like Red Bull, BMW, Michelin, and many others.
MXGP." "MXGP" is our cross, has been the first cross title, is inspired to the official Motocross Championship licensed by Youthstream, and has always been highly appreciated from the community for the realism of the game. We are going to launch the new edition in a few days, the 26th of August, and this game will have many new feature inside. "Supercross." "Supercross" is quite a new entry in our lineup. The first one has been launched in 2018 and has been a huge success, mostly U.S. "Supercross" is the most viewed motocross sport in U.S., and we sold around 1 million units between the two edition, February 2018, February 2019, and the game has been appreciated U.S., but even Europe and Australia.
Ride. Ride is our IP. We like it very much, because it has been created from the studios with the desire to create the ultimate motorbike game. Ride has always been very appreciated since the beginning. The last one has been launched last year at the end of November and was featured with more than 300 official bikes, thousand of accessories, a very good livery editor. What is most important for me is that we will launch the next Ride 4, in 2020. Ride 4 will be a step forward, really. It will be featured with a new multiplayer system. It will have the new AI we use for MotoGP, but advanced. We are doing all the assets of the game, that is very big, in a very high quality level to be ready for the new generation console.
Thank you very much, Luisa.
Thank you very much.
Very welcome to the group. Excellent presentation. Thank you.
Thanks, Lars.
Okay. Next acquisition we announced this morning, also closed this night, were Gunfire Games from Austin, Texas. I kind of feeling that Gunfire Games kind of already has been a member of the family, however, not owned by us, but we have been working with them since 2014. They are the creators and developers behind a number of IPs, and I will come back to that in a minute. They are the team behind Darksiders III. That game was our first major release with the THQ Nordic in Vienna, released in November. Previously they've been working on Darksiders assets. They are a top development studio with a lot of talent, and we know, obviously, Dave and the management very well and been working very well with them.
They've not only been working with THQ Nordic, they have been a partner to Oculus Rift and to Perfect World. Together with Perfect World, they are releasing a new title next week called Remnant. We didn't disclose, as we normally don't do on acquisitions on developers, the purchase price, but we expect to recoup it within over the course of 3 to 4 years. It will financially contribute to THQ Nordic, mainly by the release of the content they are creating. The management and the founders, they are committed to stay on board for foreseeable future. We will leave them with a lot of independence to maintain their creative freedom. This is our first own studio in Austin. Austin is the third largest game industry hub in the U.S. with a lot of talents.
Looking at the team, David Adams, he was the founder and the head of Vigil Games. That was part of THQ Inc., the previous THQ. They have created a number of titles. For example, Chronos, that was very well received on Oculus Rift. In total, they are 70 full-time employees, whereof 63 are developers. In our organization, they will be in the family of the THQ Nordic in Vienna. Looking at the history of the studio in the past years, obviously, I mentioned Darksiders III. From other sources, they had their own IP, Deadbird, a licensed title, Oculus Rift. They made Chronos, released with a very well-received Metacritic, and then they worked with us on the current generation of Darksiders II. Next week they are releasing with Perfect World as stated, Remnant.
Finally, we announced the acquisition of Goodbye Kansas Game Invest this morning. Goodbye Kansas Game Invest is a team and a company we know very well since many years, and they are a very important part of the Nordic and especially Swedish ecosystem of games development and talents. We were able to purchase this for what we deemed to have an attractive transaction of SEK 42 million this morning compared to the historical invested capital. Foremost, we are building or acquiring a platform with four very talented people to both manage the current portfolio, including supporting and producing, but also building a platform for us to continue making investments into exciting smaller game development studios across Nordics, but also to support that established teams to set up their own company with the support of Goodbye Kansas Game Invest.
In the transaction, it was included some royalty rights for the game Biomutant that we own and are to be published by us, and Experiment 101 was a studio we acquired from Goodbye Kansas Game Invest. They have five exciting studios in their portfolio. In the respect of the studios, I will not go into the details of the studio, but I've been hearing and trusting the management of Goodbye Kansas about these companies. I would leave this. I'm sure, Oscar, you have a few questions. Time is running as usual.
I have the last thing to announce this morning. I stated already at the AGM and Capital Market Day last year in May that our intention is to change the name of the parent company. I will today announce a name, not a lot of details, but a name. There will be a proposal. The reasons and the background to change the name of the public listed parent company is that one of the three operating groups are also named THQ Nordic. That has been a bit confusing to a lot of people, the industry, employees, shareholders. Just to clarify, in order to avoid any misunderstanding, the three wholly owned operating subgroups we got today, Koch Media, Coffee Stain, and THQ Nordic, all will remain with the same current name. It's just the parent company that are changing the name.
The rationale behind the proposal is to clarify the group structure and strategy with the parent company as a holding company. On that account, the Board of Directors proposed the change of the parent company name to Embracer Group. Again, it's the THQ Nordic public that are changing to Embracer Group. The three subdivisions remains with the same name. This is a proposal by the Board of Directors to the AGM, so it's subject to approval of the AGM September 17 in Karlstad. You are very welcome as a shareholder. There is a few other proposals coming out on the press release at this moment. The new website, the visual identity, and a lot of other information to the Embracer Group name will be communicated September 17. Thank you.
All right. Let's start the Q&A. First off, I think a very fitting name for the group. Well done there. I'll start off with some questions regarding the Q1 results. Let's start with Deep Silver. You mentioned in the report that Metro continues to perform quite well. Can you say something about sort of digital and physical mix and potential contribution from other services and business models?
Well, as all products, the mix after release are becoming more and more digital because the back catalog sales are increasingly digital. I wouldn't say we have notable digital revenues on Metro Exodus. It has been performing stable in the quarter on all digital formats. I mentioned that Satisfactory had successful games, for example, on Epic Games Store as also Metro. There is a number of channels on that. That's the color I can give you.
All right. Perfect. Perhaps something about the Kingdom Come: Deliverance as well. You had two quite notable releases, DLC and also a combination pack. Are you happy with that release as well?
I'm very happy to have Warhorse and Kingdom Come within the group. The game is continuing to perform. It has been stable. My expectations is not this is a game that released last year. There is a fan base you sell this new content to, and I think it was well-received. I think the game continues to find new consumers, especially driven by discounts. For example, on the Steam summer sale.
Yeah. I want to touch upon THQ Nordic as well. It was quite few releases in the quarter, but still, I think it grew by 27% or so. What drove that reasonably strong performance?
We had a number of releases within the THQ Nordic. Fade to Silence, Monster Jam, Titan Quest expansion, a SpellForce 3 expansion, a Darksiders Warmastered Edition on Switch. There has been a number of new releases. None of them had any significant revenues. I would say, for example, Fade to Silence did underperform according to my expectations, unfortunately. They had stable back-catalog sales in the quarter. As I mentioned in the report, we had one licensed IP deal with one partner of a mid-sized game that we didn't do anything with. We have not done any similar deals before, but perhaps there is a market for this as well. We have a lot of IPs within the group. I think it was counting 138 IPs, and there is no way that we could develop and handle all these IPs at once.
We need to work with partners over the coming years.
Perfect. I have to ask a little bit more about Satisfactory, which is quite an important game, I think. You mentioned that it's performing well, it's exceeding your expectations. Can you say something about the effects from the large update now in June, I think it was? How that affected sales?
I think all content updates are well received with the community. The team are building a very long-term plan for this game. I let the team run and manage this. I'm more watching and learning, to be honest. They are happily surprising me.
All right. Finally, partner publishing, quite a solid quarter, I think, but perhaps some weakness in Q2 now compared to last year, at least, where you had strong releases. Is there something to be worried about there, that the market is getting tougher? Is it more-
I'm not worried.
question of sort of scheduling and so on?
I think key content is becoming increasingly important within the business. AAA titles, big titles are important to drive consumers to the retailers. Big titles will drive a lot of sales within a quarter. Overall, I'm not worried about the business. I remain committed. It's a stable business. It's an excellent team. We continue to consolidate. We are looking to add more content. In this specific quarter, we are working with partners, and we will support the partners bringing out the products. This quarter, there is not the comparable products to the last year.
Yeah. I've asked this question before, but perhaps an update on it. Obviously, we have a console shift now coming where both Sony and Microsoft are expected to release new consoles in 2020, in Q4 likely, calendar Q4. What are you sensing in the industry in terms of scheduling releases? Are people hesitant to schedule releases for this console or what's happening there?
I think it's very early for us to say anything about that. I would let the console partners say. In general, we are embracing the future technologies and platforms. I'm sure our teams are working hard to make this transition in the future as good as possible for the group. A console shift is always a lot of decisions to be made about release date and timing and investments. We will share more updates about this in the future with you.
Okay, great. Moving on to sort of releases, some interesting announcements today. Let's start with Volition and the announcement there. You mentioned also that you will release at least two AAA titles in the next fiscal year. Does that say anything about releases this year that there won't be any AAA?
I'm just saying that we are expecting two strong, or I didn't use the word strong, AAA titles next year.
Okay. I guess it's likely-
There is a lot of opportunities to communicate. We used this opportunity today to communicate this update from Deep Silver. There will be more updates, for example, on Gamescom next week on various things. I think that is the best answer.
Okay. You mentioned that Volition is quite far along with its development for its main game, upcoming title. Is that one that is likely for next-
I think we used the wording deep into development.
Yeah.
They are deep into the development of "Saints Row.
Fair enough. Moving on to Dead Island. That is quite a troubled franchise, with a lot of changes of development studios and so on. Now switching to internal studio, Dambuster. What is your comment there, and how does that affect the timing of the release?
I don't think we have used the word switching. I'm not worried about Dambuster and their abilities, and I'm not worried about the development of Dead Island 2. I'm excited, but I'm sure the team will share more details when they are ready.
Great. Finally, did you confirm that 4A is working on another "Metro" franchise, or did I hear wrong there?
I did confirm in the last quarterly result that we have signed a new agreement with 4A Games. They are working on "Metro" because we are launching more content for "Metro.
Okay, I see. Before moving on to the acquisition.
Important wording, isn't it, Oscar?
Very important. Before moving on to acquisitions, which I have a number of questions on, do we have any questions from the floor to start with here? Okay. I will switch over to the acquisitions, and let's start with the Milestone that was presented here earlier. I suppose you can answer most of the questions, if Luisa isn't here. First of all, quite active with new IPs. What is the strategy of Milestone there? I guess it's focus on what's called two-wheel racing, also going forward.
Well, I think Luisa played out her and her team's ambition, and I'm confident to execute. They also showed a pipeline here today. They have five games under development in various stages, where one is releasing next week, and definitely more in the future. We shared a plan for 10 games the coming three years. That's the ambition, and I think it's a very ambitious ambition. What I've seen, I'm excited. They are very efficient, very focused, very dedicated to this. Stable.
Compared to a similar company that you are cooperating with in the portal publishing business is, Codemasters, of course, with F1. Could you compare sort of the dependency on certain titles? Codemasters relies on F1 to a large extent. Is it similar with MotoGP for Milestone, or is it less?
I think all their products has a similar range of revenues. There is not one that are kind of standing out of all. There is difference. That's the color I can give you, is difference. All has its own business, and if it's less revenues, the investments into that product is also less. They make profit on these investments and products.
It's becoming a bit of a racing hub now, the group with also Rainbow Studios and Bugbear and now Milestone. Is there any possibilities for cooperation and synergies between these different studios?
I think we're always trying to find synergies, but we are embracing autonomy and independence and trying to avoid forcing synergies. I really believe in people and the people to make their own decisions. I feel that they are able to make their own decisions. There is a lot of synergies we can have in the group, including sharing assets, including sharing IPs. I'm sure the teams will find their ways to do this. I'm not overly concerned about having hard synergies. That is not our strategy. I let people run their business.
Perfect. Gunfire Games, "Remnant" coming up quite soon, in less than a week. Can you say something about the expectations for that game and the initial feedback? I guess you've tested it, or the company has tested it with the critics beforehand.
I'm in general excited for Gunfire, and I like what they do, but I would let the publisher Perfect World in respect of them now as a business partner to talk for the product.
Fair enough. The other IPs that comes with acquisitions, anything that stands out which are hopes for in the coming years?
I think Chronos is a very interesting game, for example. Obviously, Darksiders is an IP they know. They have the ability to create new IPs. They are very creative, efficient.
To sort of give some indication of the team, 63 employees, they worked on Darksiders III and now Remnant, I guess in parallel. What is the sort of relation there? How many was working on Darksiders and how many on Remnant? Just get a sense there.
Oscar, it's a lot of good questions here. I can't give you full color on that. I would say both game has sizable teams. They have been working on several products at the same time. That is making a studio, as you've been looking at Milestone, more efficient, that you have various stages of a product. That has been the case also with Gunfire. That is the answer to the question.
All right. Quickly on Goodbye Kansas, the investment arm that you acquired for quite a low sum. What was the main rationale there? Is it the team, but also perhaps the Biomutant royalties that come with the deal? That's an important game for you, and now you increase the margin, I suppose, of that as well.
On the long-term basis, I'm excited about the team and the ability to work with great talents in new companies to find upcoming great teams and products. I think it's important for us that we have this infrastructure. It needs to be kept a bit separate from our other businesses and publishers that are very focused on different things. That, I would say is one of the key reasons. Obviously, I believe a lot in the five companies. It's a mixture of things. The royalties are nice, but that is not the key reason for the transaction.
Okay. Great, finally, want to touch upon KSM as well, perhaps largest acquisition in the partner publishing business, which has some size and increases the scale of the film business, as you mentioned. I have to ask, did you consider also divesting the film business instead?
There has been a lot of tricky decisions about things. If you're having a business, you need to run it efficiently and profitable, and then you have all possibilities to continue to consolidate or not. In the respect of all businesses I have, we continue to invest in them. I have to say KSM are creating shareholder value because it's adding a contribution, it's a stable business. Its product are well-linked to our partner publishing business.
Perfect. Understood. Do we have any questions from the floor? Yeah, Pirag.
Thank you very much. One question on streaming. You announced partnerships with Google a couple months ago, and then also with Microsoft and the Xbox Game Pass, where we saw "Metro Exodus" being one of the included games among 10 others. Has any of this been booked or notably booked in the quarter?
There is no notable bookings.
The royalties for Biomutant that Goodbye Kansas has, can you let us know on the percentage?
It's not notable.
Nothing. Finally, on "Dead Island," follow up there when Dambuster takes over, they have not started this project now from scratch.
No
No. It's going according to plan. Super. That's all for me. Thanks.
Any other questions?
We're running over time. I can stand here all day.
Do you have anything on the phone? Nothing there. All right. I guess that's it. Thank you very much.
Thank you, Oscar. Thank you.