Earnings Call: Q3 2018

Nov 14, 2018

All right. Good morning, everyone, and welcome to this Q3 2018 Interim Report. I'm happy to announce another stable quarter. We had strong growth in sales, up above 1400% to close to SEK1.3 billion, driven by the revenues from mainly Koch Media. We also had happy to announce that we also made more money. So EBIT was growing 278 percent to €91,000,000 During quarter, we had 14 releases in our business area games. We made 3 IP acquisitions and 1 studio acquisition. So looking again at the numbers. I have to remind you that we consolidated Koch Media on February 14 this year, and that is the main reason for the increase in the sales. The EBIT in actual percentage is down due to significantly higher earnings sorry, higher revenues in the Partner Publishing segment within Koch Media. That has a lower margin, but also a lower business risk. But I'm happy to say that both Tissue Nordic and Koch Media contributed to the EBIT in the quarter. Looking at the Games business area, it was a stable quarter without any major releases. The THQ Nordic Business Area grew 47% to SEK 124,000,000 driven by our own releases of Titan Quest on Switch, Red Faction, Guerrilla Re: Maastricht and the sequel, This is the Police 2. And also a good performance on the digital back catalog sales, mainly driven or partly driven by breakfast. Looking at Deep Silver, it was also a stable quarter with revenues of DKK252 1,000,000, driven by a range of titles, but new releases, including the rally game Dakar 18 as well as in the end of the quarter, the publishing product Pathfinder Kingmaker that had a stable performance on steam. At Tip Silver, we also decided to cease the mobile games development at Fish Labs, and that team are now working only on console and PC games, including the port of Saints Row 3 to Nintendo Switch. Sorry for flipping the slides here, but it's actually not me flipping. Looking at the KPIs, you can find in the end of the report, we have the share of the games business area, our own titles, our own IPs, represented 50% this quarter. It's up from the 39% in Q2. The digital sales are stable at 52%. The rest is physical. And the new releases, as stated, we didn't have any major releases, were only 31% in Q3. Cash flow, as you noted, it was some changes in the cash flow. And the cash flow from operating activities in the quarter before changes in working capital was SEK 224,000,000, but change in working capital was SEK 964,000,000, meaning that we had minus SEK 740,000,000 in cash flow from operating activities after changes in working capital. So this means that we made a decision during the quarter not to use forefighting at customer receivables at Kochmelia that we previously had used in Q1, Q2. And rather, we used the bank debt facilities at Kochi Media. So it was a proactive decision. All in all, cash flow for the period was minus SEK 167,000,000 compared to well, for the period. I'm happy to answer any questions on the cash flow later on from Oskar. Some more KPIs. The depreciations and investments. So the IP acquisitions depreciation were SEK2.8 million. The Games Development depreciation was down a bit to close to SEK86 1,000,000 in the quarter. The Partnered Publishing and the Film depreciation was SEK28 1,000,000. The goodwill minus or SEK2 1,000,000 Looking at the investments, we made external game development investments and advances for upcoming releases in the future of SEK 132,000,000. And the internal capitalized development was SEK 102,000,000 for not released products. The IP acquisitions driven by these 3 announced IP acquisitions was SEK 21,600,000. Investments in films was down a bit to SEK 17,300,000. Dollars and the finalized and completed games development in the quarter was SEK 50,000,000, meaning the titles we have invested into that we released during the quarter and then we started the amortization period. Looking at the balance sheet, just quickly, our intangibles are up a bit to close to SEK 2,200,000,000. The current receivables, mainly then driven by the customer receivables at Koch Media, was up from end of last quarter of SEK 600,000,000 to SEK1.4 billion. And I have to say that we have a credit insurance policy for all customer receivables in the group. The cash balance is SEK 1.346 billion. That is my notes really from this slide. The completed ongoing game development projects now ending in the quarter of close to SEK 1,600,000,000. Sorry. So the release activity, again, we had 14 releases. That is not including the rerelease at retail of Metro Redux we made across Europe in the quarter. So again, Red Faction, our own IP, that's where we put out on PC, PS4 and Xbox early in the quarter. We had Titan Quest on Switch. Both these games, I have to say, had some glitches and bugs, but we are continually working on them. And we I could recently, in the past week, see some great updates on these products. The Blob 2 on Switch, our own IP. Jana Sisters, acquired from Black Forest, it's now put out on Switch, published by Handy Games. This is the Police 2. And we published 5 PC titles from Microsoft in the end of the quarter on physical and certain digital channels. We had Botched Tail at Deep Silver from our friends at InExile or Microsoft in the end of the quarter on PC. We had Broken Sword 5 at Deep Silver on Switch. We have Dakar 18, as I mentioned. And Pathfinder, that was a strong release in the end of the quarter, a game made by Old Cat Games in Moscow. And releases after end of the quarter, we had 6 products releasing up until today. We have the Hunter from our friends, Avalanche, 2019 edition on physical formats now across the globe. We have 18th Glory on physical formats. We have Townsmen on Switch and own IP made it's a game made by Handy Games in Germany. The same Handy Games are also made, Aces of Luftwaffe. We published Bridge Constructor at Deep Silver and finally, we brought out Let's Sing 2019. And I guess we are competing to bring out the last Nintendo Wii original product globally. And mobile games, we continue the development. We are now during the quarter, Q4 expecting some major updates on especially Sniper versus Thieves. Pocket Cowboy, which is the development that game didn't have good enough data. At Partner Publishing, we had a long range of releases from our more than 50 business partners at Koch Media. More than 400 products lines was released during the quarter. Promise I will not tell you all 400 in this presentation. However, I have to note a few larger releases we had in the quarter and Q3 most likely was the most strong release list for Partner Publishing this year. We had F1 2018 from Codemasters. We had Shadow of the Tomb Raider from Square Enix, Dragon Quest from Square Enix, along with Shenmue 1 and 2 from SIEGA. This is just a pick of a range of releases during the quarter. And looking forward, we also have strong releases both in Q4 and Q1. In Q4, we will have Football Manager 2019 in physical across Europe, Ride by milestone, Just Cause 4 from our friends at Square Enix, but developed here in Stockholm at Avalanche and Persona 35 Dancing from Atlas. And acquisitions, we made 3 IP acquisitions. 1, we acquired Kingdom of Amalur, the game Reckoning, the assets and the IP from the estate of the developer. We're still not having the publishing rights for it, but we do have the full sequel rights or spin off rights for the product. And we are working on this to make this to an even more successful transaction. We acquired TimeSplitters, a well known IP created in the UK and with origins from our team at Free Radical Design that we have in the group, it's now called Dan Busters Studios in Nottingham that we own. We acquired Alone in the Dark and a very, very classic IP made by Infogrames in the early 1990s. And we made 1 studio acquisitionpublisher Handy Games. They're both a developer and a publisher for our smaller releases, both on mobile and on PC and console. In terms of acquisitions, well, you noted we had a few releases after publishing this report. So I'm happy to announce 2 acquisitions today. We will talk more about them very soon. But I think we have been very active the past 6 months since the racing in June to constantly engaging with various games developers and publishers across the world. And that is ongoing discussions. I prefer to have direct with cofounders and the management in these companies. And I how should I state this? I'm not done yet, but patiently. It needs to be the right team, the right transaction for us, and it needs to fit our strategy. And this is the work I'm doing with my team in the parent company, but also Clemens here today are working at Koch Media and Deep Silver as long as the management at TSU Nordic in Vienna. Pipeline, well, you've seen this slide before. So we have an extensive pipeline. Looking in the immediate future, we have Darksiders 3 coming up on November 27 at DSQ Nordic. I'm I like what I see. I think the game will please the fans very well. But stay tuned on November 27. Obviously, Wreckfest always been a big believer in now coming out next year on console, now being our own IP, along with a long range of more products, especially to point out Metro Exodus that I have to say, I don't like to use strong words, but it looks fantastic coming out in February 2019. In total, we are having 55 games that we are investing into under development, whereof 35 is not announced, but will come over the coming years. So I would like to welcome our new family members from Schvdde. Anton Westberg, the CEO, CompreFounder and Tim. Hello. Is there a time to talk? All right. I think well, you are free to say and introduce yourself, Anton and Tim, but I would like to introduce the transaction before you actually going into the deep details of this. Sure. Absolutely. Yes. So my name is Anton. I am the CEO of Koffe Steyn. I am also one of the original founders of Koffiefstein. I've been with the company since we started in 2010. And yes, that's pretty much I do. And I do pretty much a lot of things in Coffee Stain. I focused mostly on the business side. And here's Tim. Yes. I'm the CEO of Kopfstein Publishing. I've been around for 2 years in with Kofenstein. Previously, I have some experience in AAA development, developer, started as a developer. But yes, I think we can talk more. You will have the chance to talk a lot more very soon. Sorry to bring you a bit early up on stage, but you can have a table. No, no, no, it won't go back, but you can use the table here across the floor. So I'm really happy to have you here. I'm really happy making these transactions. We have been talking for quite some time. You came to Costa last year to have a coffee. Yes. Wanted to get to know you a bit and see who is this guy. Exactly. Yes. So it's been ongoing discussions, and I really believe this transaction adding a new fur leg into the group is a very valuable asset. So looking at the highlights, so what is Coffee Stain? It's a strong Nordic developer and publisher with a different profile from TSU Nordic and Deep Silver. More digital, younger, but smaller productions, very profitable, very good at creative side and creating new IPs, which is a bit different from Tissue Nordic acquiring IPs and building on them. You had a really strong track record, obviously driven by Goat Simulator and the success of it. And in total, you sold more than 16,000,000 units games. That's quite a good number. That is a good number. I've now been knowing you and the sellers are the company founders in the group. And I find you all very passionate about the company, about games and that's why I really like to see. And you're making I firmly believe you're making this transaction to stay and to grow this business within the wings of TESQ Nordic, but with a strong independence. The actual transaction, we are paying upfront consideration of SEK392,000,000 payable today, SEK392,000,000, equivalent of SEK317,000,000 on a cash and debt free basis, and that's because you already have a good amount in your balance sheet. And then we agreed an earn out, and it's 2 parts of it. 1, it's linked to operational goals regards to upcoming game releases over the coming 3 years. And that is a maximal of SEK 405 1,000,000 and that is paid. We are giving you the shares today. But if you're not delivering, we're having a clawback, but you are confident you will deliver. Yes. I would be happy to deliver. And then we have financial goals, and that is that you would make a profit of SEK 520,000,000 before tax, latest end of 2023, and that is accumulated number. I should not comment what I believe on that, but we just agree on that number. Absolutely. It's connected with an interesting future ahead. So yes, more on that. I have a given financial forecast today, and this is the first time in my life, and it's only linked to coffee stain. And the reason doing that is because I want to explain for the investors, shareholders and the market why we're making this transaction and paying this cash and how much I believe in the business. And the financial forecast is closed and only for the financial year 2019 and are giving you a range of net sales target of SEK 200,000,000 to SEK 250 1,000,000 with the earnings before tax of SEK 100,000,000 to SEK 150 1,000,000 just for that year. And then I believe looking out from today that you will have a strong growth in sales and profit over the years. As a publisher and developer, it's important to have releases. And obviously, next year, we can see you have a number of releases, but you will also have a number of releases coming past 2019. Absolutely. Unfortunately, we can't talk about all the releases today, but I enjoy looking at the products. There is synergies, as always. We know, we understand what you're doing. We will learn a lot from you're doing, but we do understand. You are we are in the same segment. You're doing premium games that people pay for. However, they are more digitally distributed, but there is potential synergies to do distribution on certain products. And I'm sure we'll find that distribution. I have a good contact here in the room across the globe. I'm sure we can discuss and evaluate operations about marketing, know how, development and many other things. However, I have to say, you will report rightly to me and you will have remained a strong independence as an own group. So that is really my overview of this transaction and why we're doing it. Yes. And now welcome, Anton. Thank you very much. So now we've had a lot of numbers here, which is obviously fun, but we tend to focus more maybe on the creative side, on the games, which I think is more fun. So let's talk a little bit about Kofenstein. I'm going to go through the first slides pretty quickly. This is just to give you an overview of the company as right now. We are a group of companies. We have our main studio called Kofstein Studios in Hovde, which is run by Johannes Aspovi. And then we have our Stockholm office run by Sebastian Ericsson. We have Kofstein Publishing, which is headed by Tim over here, who's going to talk a little bit later. And then also we have a small new studio in Gothenburg called Lava Potion, which is run by Magnus Alm. And this slide will give you a little bit an image of showing how our company has developed. I mean, we've been around for 8 years. And the 1st years, we were a very small team. We were focusing heavily on just focusing on one game at a time and stuff. And then in 2014, you could say that things started to change with the launch of Goat Simulator, which has been a really, really big success worldwide. And it's continuously doing very well even at this date, which is pretty amazing for a game that we maybe thought was just a joke that would die out quickly. But yes, as you can see here, a lot of things has happened in the latest years and this is kind of the direction we're going right now. We're doing more business. We're doing more investments in various all the companies that we have invested in and also the publishing side that we see that will be a bigger part of us as a group in the future. So let's go back a little bit and talk about where it all started. I think most of you maybe know coffee stain for Goat Simulator, but maybe you don't know that we actually started in a small town called Hovde 8 years ago. We were 9 friends in the university there and became straight out of school. We went into the incubator and brought our own furniture, our own computers and it was very like start up style. We I mean self funded. We've never had any investors really and like we were pretty, you could say, cocky. We were really sure that we would manage to do this in a pretty harsh and tough business. But there were a lot of like factors. I mean, we have always we still have we have a great team and we had that when we started and like some good timing with how the digital distribution kind of started to move with steam growing so much in those days. We were pretty successful with the sanctum, which was the first game that we launched on Steam. Let's see here. Yes. Yes. So right now, I mean, we're we do focus on a couple of different projects right now, which you see them here down here, which are code simulator, you really know. The one that we on the furthest right here called satisfactory is the our current biggest project that we've been working on for roughly 2 years in our main studio and a little bit more on that. So let me just give you a little brief overview of the previous games that we've launched as well. So sanctum was launched in 2011, and it was actually kind of the first game that we self published. And maybe you saw this little game here called I Love strawberries, which was actually our first game and it's a mobile game. And in the incubator, we were told by everyone that we needed to have a publisher. So obviously, we got the publisher. It was actually Atari, which probably a lot of people know here. Sadly, that didn't turn out too well. The game did it okay. We got like advanced payment and that was pretty much it. And I think that kind of led us to realize that, hey, we can do this on our own, so let's try self publishing. So that's what happened with sanctum. I think we were a bit lucky there with the first game and like those learnings were very important for us. Sanctum was very successful. As you can see here, I mean, sanctum has done great. The first game launched in 2011, and I we had something like 500,000 copies. And as a group of students, pretty much at that time, that was like crazy to get a success like that. And it kind of allowed us to keep building the company, keep running on our own, building sanctum 2, which was launched in 2013 and also really successful. So it's a very beloved IP, I would say, with a big audience. We have over 2,000,000 people buying the game on Steam and yes, very positive reviews. So but this is the thing that really, really accelerated things for us. In 2014, we made this game jam in the studio. And on 1st April, we launched Goat Simulator, and it was an instant success. We were the top grossing game for a week or so on Steam, which is pretty impressive of all titles. And it's I mean, it's been pretty crazy. Like pretty much every platform we put it on, it's been extremely successful. And we've kept on like developing spin offs and doing lots of various variations of this game for I mean, for a very long time. And that's made that's the reason why it's been for us as a company, we've been like really been able to make a lot of out of that. And we are a very creative driven team. For us, it's very important to create new IP. As Lars has mentioned already, I think that's our biggest strength. We always want to innovate and do new things. So for the last 2 years, we've been working on a new game called Satisfactory, which is currently in a pre alpha closed alpha state where we have testers in the game, but it's not like a public alpha or anything. And this is a really exciting project for us because it's it kind of aligns to a lot of the things that we believe strongly in. You have we like to have community driven kind of where we can develop together with the community and like get that kind of nice feedback loop. And here we have a really strong incentive going. So we are pretty excited about how this will turn out. So Don't be too excited. No, I'm not going to be too excited. Because the analysts will. But yes, I mentioned briefly that we have also the other studios. This is a little bit a little fact about those. Kofistain North is actually here in Stockholm, and it started in 2013. We actually was part of our publishing with our first game called The Story About Mankell that we published that we didn't develop ourselves. They developed at that time, they were called Gone North Games. And we've been working with them ever since. And that kind of great collaboration and with them also helping out a lot on the Goat Simulator games for us. We decided to acquire 60% of their company. So they're part of our group now and that's a really nice team and great to have on board. And then on the right, you have Lava Pulsion, which is our it's a small team created by some really also passionate people that the project that they're working on is still secret. But we say it's a turn based strategy game. That's pretty much it, get to know for now. And we it kind of resolved around us finding the right people. We kind of shared similar values, had even thought about same ideas when we met these people. And then so things kind of just clicked and that was turned into our little yes. All right. I'm going to hand over to Tim now and let him talk a little bit about the Publishing, which is the very exciting part of Kopstein that but I'll hand over to Tim. So yes, I'm going to reiterate what Lars and Anton has been saying kind of. Can you hear me? No? There we go. Perfect. So the publishing group or the publishing team is still the company is quite young. We've been around for 2 years. It kind of started as Anton's side activity and kind of grew more and more ambitious over time and then he decided to get some help. So currently, we are 5 people with quite nice range of experience. We have Daniel from Mojang being the 1st hire, I believe, And Albert from King has been working on Candy Crush and multiple titles. And Sebastian on the game incubator that's been helping a lot of companies like Kofistain start up. And then, of course, Anton being quite hands on in this. Minaslav from AAA, like I said before. We kind of we wanted to be the publisher that Coffee Stain wanted back in the days. So but a bit more refined on what we do is that we think that small teams can make quite like remarkable games these days. We think that if they do it right, they can stand out from both indie and AAA if they are similar to us and share our values, I think. So we want to find teams that focus on like a focused experience. They're creating a focused experience. They own their own creative vision, and they want to create something and they're really passionate about it and heavily incentivized as well to make something great. That is kind of why we like to go in as a minority shareholder in new companies. Yes. Our portfolio strategy is quite vague. We're not painting ourselves into a corner that we need to work on a specific game. The different we have different genres, different platforms that's been working out for us. But what you could say is that we tend to like to create new IPs, have gameplay as a focus, community driven, as you mentioned before, and usually a lot of co op and multiplayer in there. We like to play together when we build stuff. Moving forward, we're going to likely expand a little bit to be able to do more because we have see a lot of opportunities. Yes, the climate today is like you have this great tech available for everyone like Unreal and Unity. You have a bunch of students coming out of school. You have a bunch of veterans that will be working 10, 15 years that want to create their baby. So we want to help all of those people out that think that they're going to be a small, well synced team to create something great. Cool. Next. So Ghost Ship Games is one of those great examples. We met them at Dreamhack, kind of clicked straight away when we heard them talking about their game. These were veterans who's been working together on other companies and had different experience. They showed us their first game, Deep Pro Galactic, which we kind of signed straight away. Yes. Yes. And kind of invested in their company straight away. So yes. And that's been going pretty good. We have we had an early access launch this February this year with more than 400,000 sold copies, really strong reviews. And for an aerial access title, maybe more important, we have like regular updates, meaningful updates each month that kind of keeps the community going. So there's we have some indication that people will love the full release. I think that's it. And like I mentioned before, we have a couple of games that we want to release 2019 and then we have more games. So in summary, I think that Coffee Stain has never made more games than this. Like this is our peak right now, more internally and externally, and we think we really got something interesting going. I'm really happy to have you on board. I see you not only as great games makers because you definitely are, but I've also seen and especially now I experienced it that you're actually a very good businessman negotiating. So if you use that also to all externals, it will be fantastic. I don't know if we touched on that, but on the ghost ship side as well, it's kind of a thing that we think is interesting from the publishing aspect is to do this kind of investment as part of the publishing strategy, which is not very common, I would say. And really are really hands on and we want to add all the focus that we can do. So we are I think we are probably more hands on than most publishers. And then we also see that the partnership has to be really good. So the investment makes sense in that way. So we have to identify these teams that are really good, where we believe there's a chemistry and then we do like these very tight partnerships. And that's I think it's a very interesting business model and opportunity. And THQ Nordic had the strategy of not acquiring minority investments. Now having you on board, I'm fully supporting your strategy. I really believe it's right. And if you find a great team that has a very successful product, obviously, you would like to continue working with them and help them over the coming years. And that will be easier if you are in the same boat, rowing. Well said. Yes. So well, yes, this is my last slide here. A bit more boring. All right. Thank you. Thank you, Anton. Thank you, Tim. So Kofenstein's role within THQ Nordic post the deal. As stated, they will execute their business plan. There is no cost cutting, rather investments planned. It will operate as a separate entity under the parent company, so it's a 3rd leg and Anton will report related to me. And the first consolidated reporting will be next quarterly report, February 13. And the revenue recognition will be from closing that are scheduled for today. So that is the presentation about coffee stain. We have one more to go. Unfortunately, we don't have our friends from Finland here. So after announcing coffee stain at 6:30, we actually signed 629 8. We signed another deal in Helsinki. I had help from one of my management team to actually sign that close to 7 and announcing it and it's Bugbear Entertainment. So Bugbear is some crazy racing fins. They really are into racing games, and they've been making racing games for more than 20 years. And Janne, the CEO and Compre founder, is a genius creating some amazing experiences that they have proven by the release of breakfast. They have their own engine that he's been able to make some amazing physics that is very important for these games. So the highlights, not only Breakfast in the past, they made another series called Flat Out that had a number of releases that sold more than 3,000,000 units. We acquired this morning 90% of the shares and we have an option to acquire the remaining. The minority shareholder was Janne, the company founder. Included in the transaction were all the IP rights, including breakfast and Stuntfest, but not including FlatOut that is owned by the 3rd party. So Breakfast was released right under E3 at June 2014. We hoped that we were able to bring it out in Q4. Unfortunately, we had to delay the release until next year. We really want to make sure it's an amazing experience on console. It's multiplayer. It's a bit complex technically to bring it all together, but we're sure it will deliver as when it's released. And it also had positive reviews on both from consumers on Steam and from journalists at Metacritic. And we will continue working on Wreckfest as a product in the foreseeable future. Looking at the history of Bugbear, the first game they made was a game called Rally Trophy, published by a company called Jew Wood And JUVOD is owned by Tissue Nordic now because that was the foundation of Tissue Nordic. So now we have IP and the rights back in the family. I'm not saying we're making a rally game, but it's nice to have it in house again. And obviously, Flat Out was the big breakthrough. It's a very similar game to Wreckfest, I would say. And then they've been working with work for hire products such as Sigerale and Ridge Racer. And then they founded Wreckfest on early access and then we came along 2 years later to help them to bring it over the finishing line. They also made a smaller product called Stantfest that we are expecting to be released in the future. I have to say, it's an 18 man efficient team. We could see the potential to further in the future scale that up just a little bit hopefully together with Jan and his team. And Helsinki and Finland is an amazing environment for creating games and games development. So I'm sure with the support of the group and the financial backing and the publishing support and marketing, I'm confident we will be able to bring more talents on board at Pag beer. We didn't disclose the purchase price this morning, but what I disclosed was the purchase price was matching the management expectations of the royalty we were expecting to pay for Publishing Wreckfest over the coming or their products over the coming 3 years. So, Bugbear, thank you. And Oskar, I don't know if you have any questions for me today. I have a few questions, definitely. So if we start from the beginning a bit, just the Q3 report a little bit, and then we'll come to more about the acquisitions as well. But first of all, strong quarter both in terms of volumes, obviously, but also EBIT. So if you compare Q3 to Q2, what are the main differences? Obviously, much higher volumes in Partner Publishing. Is that the main difference? Yes. I would say that is the main driver of main driver that's one of the main drivers of the increase in revenues, obviously, but also EBIT contribution. And that's as I stated in absolute numbers, that's my target to increase the actual profit you're making, and we increased it. This quarter, it was driven by Partner Publishing. So it varies over the quarters what is driven, but part of Publishing in the quarter as a state was a bit perhaps lower in the past, but we took some lower business risk. And the margin is always balanced to the business risk you're taking on especially stock. Yes. And I mean you mentioned some quite large gains there at the beginning with the Towbrater and so on. Were there any projects where you actually took more risk? Or was it really more of a service business in this quarter specifically? No. We're always taking I wouldn't say we're having a pallet or a smorgasbord of services we're providing to our partners. I can't really comment on the partners, but so that is really my statement on this. Okay. And just going through the other business areas as well quickly. CHF Nordic, slightly lower sales in Q3, But I think that you had a quite successful publisher weekend, but not very many releases. Is that fair? No, it's a fair statement. Definitely we didn't have any major releases. It was 3 as a care and 1 sequel. I'm proud to work with Microsoft, but those titles doesn't bring in significant revenue. So it's a stable quarter, and I think the whole team has been working very, very hard on various trade shows such as Gamescom and PAX, but working on to bring out the upcoming releases of Darksiders, especially now and the releases for next year. And going to Drogsiders, closing in on the release now just in 2 weeks, is there anything new, any new sort of data points, preorders, more expectations? No. I think as I told you at the last quarter report, we announced the price and the SKUs in July, and we saw some strong preordering, especially on collector's editions. We're bringing out this huge $400 box. So I think now the marketing support are now being intensified, and you will see more activities other titles and there is a lot of other products that wants to be communicated in media. So you need to spend your money wise to get the payoff. So I think they have a great plan and I don't want to promise anything. In the end of the day, it's a consumer is deciding. And so let's see November 27. Yes. And what do you expect in terms of reviews and stuff, which is an important factor, I think, for longevity of sales. Yes. Well, I can't again, it's up to the journalists and the consumers to decide how what I hear and see please the fans, but I guess fans are different. I'm sure there will be fans not enjoying it and hopefully it will be a lot of fans, more fans really enjoying it. I think they've been creating it's the same team that made the previous two games. Obviously, they're delivering on that environment. And so let's see on November 27, Yes. And switching over to Deep Silver quickly. You obviously have a big, big release coming up in February, and you have less competition now than last we spoke, I believe. Days Gone has been delayed. How big of an impact can that have, do you think? Or is it not really competing? Well, I don't want to comment on that game, Patjane, specifically. But obviously, you will preferably be alone on the release date. However, I firmly believe that game looks fantastic, and we can see some good momentum from fans. So I'm confident that we whatever date we pick in a year, it would sell. And King and Come, I suppose, is given the sales in deep silver is performing strongly? Continuously? Yes. It's King and Cummins was a big not a big surprise, but it was a very valuable contribution at Kochmida when we made the acquisition. And they continue to deliver updates to the game. I think fans are pleased in general with updates and it continues to sell well on especially digital formats, but also as a physical product. So they're bringing out DLCs regularly. So Yes. And do you have any questions from the floor perhaps before I start on acquisitions? Lars, there's 2 announced DLCs for Darksiders. Is there any information about the time line or any stuff like that? No, nothing else than that's been communicated on the from the publishers. So I don't want to communicate a new release date for anything. No, no, no, no, no. So sorry, I don't have any new information here. Yes. And as I understand, I will hop to the Koff Steyn acquisition. They will continue with these types of minority investments that they have gone done mostly the last 2 years. Is that correct? Yes, minority or minority. They are taking positions that is not 100%, and that is the difference. And they will continue doing that. It's a strong business model that works for them. So I'm and I believe in it. I've been turning down over a number of years so many offers to invest into developers because we have our strategy not doing it and now we could doing this within the coffee stain. So you can see it's open up a possibility for more? I don't want to take it into the other groups yet, but let's see what how it works within Coffee Stain. But you obviously have a lot of deal flow coming in at GCU Nordic. It's been direct. It's a decent deal flow, yes. Okay. Great. Thank you a lot. Okay. And you mentioned some synergies also with Koffiefstein, the guys over there. So digital distribution is almost 100% now? Or how should we At Coffee Stain? Yes. Yes. Okay. Well, they have been physically publishing a few products through a great company called Koch Media in the past. So they helped them bring out Goat Simulator on various channels across Europe, and I'm sure they will work very relevant. But their bookings is either basically all digital sales and royalty reports from Kochi Media. Perhaps this question should be asked to Anton and Tim, but just wondering about the number of titles that you released. It seems to be quite a lot and relevant. I'll come up to on stage again, Anton and Tim. Sorry, the number of games? So yes, I mean, like we have more than I mean, it's been a growing pipeline for us and like the ambition is to kind of try to scale up slowly but steadily. I mean, we are really, really careful about growing because we think that kind of the creative aspect of things has to take priority and like finding the right teams and not doing rash decisions. So we're going to kind of as we find more things, we'll kind of add more stuff to the pipeline and we'll see. It's a great house for Alstom. And I must ask, which site are you most excited about, about the upcoming ones? That's very hard. We're obviously excited about all the titles. Okay. Fair enough. Good answer, Carlos. Thank you. And just quickly then on bag beer. Obviously, Wreckfest performing better and better on steam, you can say? Well, better and better. But it has a solid performance on a daily basis. And you can see when you do promotions, it definitely increases sales. And I think when we bring out more content also for PC, it will further engage new players and the community again and bringing that content as well on console. So I'm confident about the product. Okay. And how did the decision to do the acquisition come up? Because obviously, you helped them quite a lot in the game, but you saw good potential there. Yes. It's been an ongoing kind of discussion thinking about doing this. And obviously, the price increased a bit since June. So but the risk is lower. So you have to offset that risk with the price. So I think now Jan and his team, they know us very well. They know what they will get. They know that we are keeping our words to support them and to invest into them, and they will have stability and ability also to recruit new employees because they had some difficult times in the past. Yes. And I have to ask also about the overall pipeline going into 2019 and beyond that. Is there anything new to add regarding perhaps Shenmue or Dead Island? I've noticed that Shenmue 12 has sold really, really well, surprisingly well, I suppose, the relaunch. Well, Genmoo is a fantastic product. Again, I remember selling the original and actually distributing it in Sweden back in the days when releasing on Dreamcast. I'm confident about Genuity as an IP and what the team has shown the fans is it looks very promising. And they also announced it's coming next year, but rather referring to our websites about specific release dates. Okay. Do we have any last questions from the floor perhaps? Hi, Lars. Congrats on a great report. I'm just wondering regarding the EBIT margin of 7%, can you comment a bit more about Koch Media in specific? I mean THQ as a standalone company had EBIT margins of around 30%, 40%, And you said that both companies contributed? Yes. I understand you. We decided not to disclose specific EBIT margins at each division and business area for many reasons. And then but obviously, Koch Media are working with a lower much lower EBIT margin and now very much driven by the Partner Publishing segment. And you're right, Tissue Nordic has a higher EBIT reported a higher EBIT margin in the past. And but this is not the key KPI for me. The key KPI is to continue growing the how much money you're making in absolute numbers. Okay. And a follow-up on the release schedule for Metro Exodus in 27 or 22nd February. It seems that it's some other big games coming up that date as well. How do you see the release window there? I think as I told you before, I think Metro stands on its own feet. It has a strong fan base and community on the existing games. I'm confident it will sell whatever date we bring it out. So that is why I could really comment. I don't want to comment on our other peers and colleagues' products really. Okay. Thank you. Okay. And I think we have some more questions from the telephone. Our first question comes from the line of Pierre Malstrom of Handelsbanken. Please go ahead. Your line is open. Lars, Pierre here. I have another question on Dockside S3. You guys talked about 2 DLCs. Are they to be released in the Q4? Or are they more from 2019? Unfortunately, that is not communicated fully yet. So you need to stay patient and wait to see that announcement of these DLCs. All right. And speaking of waiting and seeing, how long do you maybe it's also too early to say, but how long do you think before you can see something on that between the Sovannenberg IP? I really like that IP. So I can just promise you that we're making working quite hard on to make something in the future. But it would most likely take you need to take a very long perspective on this. So don't expect anything on the short term basis in regards to Kingdom of Amalur. Okay. And apologies if anything has been asked already because I got disconnected a while, so I might have missed something. I was also wondering about the sort of the Tomb Raider sales. It seemed a bit weakish, at least in the UK, just the numbers I saw. Would you say that physical distribution is sort of shrinking faster than we expected? Or was this more game specific that you mentioned? Koch Media are delivering a very stable business. And according to the business plan we got when we acquired them, and there is no signs in the Q3 that is different. We know physical is a challenging market, but we also know that Koch Media is a consolidator in that market, one of the few that are really delivering a lot of value to business partners and retailers across Europe. And is that sort of something we can expect announcement on the coming year sort of? Or Update on On the consolidation part? Yes. It's a topic on the agenda to help more partners in the future to bring out their products. But obviously, it's a negotiation and discussion, and we need to make sure that we can take care of our current partner fully before bringing on new ones. So, I'm confident that Clemens and his management team will manage this business very well. This is his home territory since 20, more than 20 years. Okay. And then on coffee stain, the accumulated number, that's starting from today or Yes. For the earnouts, I mean? Yes. That's correct. Okay. And the Coffee 2, Soft Coffee Stain, how long do you guys expect the Satisfactory game to be in early access? Sorry, how long? Yes. Like under how long a period. I realize that's hard, but just a gut feeling sort of F and F. Well, that is I can't comment on that on satisfaction. But normally on early access, you make decisions along the way according to the feedback from fans. And so to be honest, I don't think they know that. They will make the decisions with their fans along the way. But as a note, the other Okay. Thank you very much. Okay. Then perhaps just a final question for me, then you're off the hook. Just Q4 2019, when looking from Q3, which was quite strong, What can we expect in Q4, first of all, and then 2020? A lot of great games and a strong release pipeline. But I suppose the results are going to be driven a lot by Darksiders 3. Is there anything else? Darkseidos III will be a driver in our own game segment in Q4. But we have a long range of releases, both Q4 and Q1 in all business segments. So as I stated, Q3 most likely was the strongest release list for the year at Partner Publishing. But we have more releases in our own game segments in Q4 and Q1. Diversification and quarters balance out. Perfect. I think we'll end on that note. Thank you. Thank you.