Welcome everyone to THQ Nordic's Capital Market Day, our first ever. I would like to just run through today's agenda. I will be starting with a recap of where we are with THQ Nordic since the IPO, followed by Koch Media transaction and synergies. I will welcome the team from Koch Media on site, having a coffee break, and we'll have a lineup presentations of part of our lineup of games. I will end the day with where we're going in the future with the growth strategy, a bit more asset care, M&A, and financing. The reason having this day mainly is because of the Koch Media transaction. I think it was relevant to give a deeper understanding for all shareholders and market to understand the business. Why did we acquire them? Why are they adding value to the group?
Giving you a general picture of where we are today and where we're heading, and of course, why you should be a shareholder of THQ Nordic. I would like to state after the whole day today, you're all welcome here to hang around in the area and eat some buffet from lunch and speak to the management and everyone in the company. Today, presenters are the team from Koch Media, led by Klemens Kundratitz, the CEO, Reinhard Gratl, the CFO, Eugenio Vitale, Craig McNicol, and Mario Gerhold. From THQ Nordic in Vienna, we're having Reinhard Pollice. Also in the room here, we're having not only these people, but we're also having the chairmen, Kiki, my CFO, Erik, Klemens Kreuzer from Vienna. Please feel free to speak to them as well. Just give you a bit of recap of the THQ Nordic.
What did we really say during the IPO? What should we do over the coming years and what was the strategy? We told the market that we will accelerate the asset care and development and the launch of sequels. I think we have executed that soft promise quite well by a long range of asset care releases. We started a lot of new development, and we executed our first sequel releases in Q3 and Q4 last year. We have made a considerable amount of acquisitions of further IPs. We have acquired three game development studios within THQ Nordic. We made a soft promise on exploring licensing of IPs into other business areas as long as exploring the IPs on mobile games. Those two areas we haven't been able to deliver as strong with this promise. This is a complex market, and it will take years.
I will give you a bit of more update on that later on. Looking at the journey from THQ Nordic, I think it's important for you to understand that right now we increased in terms of revenues and market cap and number of employees, especially now having Koch Media on board. We really started out very small, SEK 8 million turnover 2011. I think we are learning and adapting every day. The ride being on the stock market has further fueled the expansion, obviously, not only in the share price, but also for most at the company, we've been able to grow and invest into new businesses and invest into new development projects. Going forward, we will continue having the same strategy, we will have a larger platform to provide that on.
We will have a much more diversified revenue streams now having Koch Media on board. I stated on the IPO that we might acquire smaller publishers. I wouldn't say Koch Media were a smaller publisher, but I think it's a great fit, and I will talk a bit more about that very soon. Really, what I would like to state also today is creating shareholder value. It's something I'm really working on, and obviously I have a bit of incentive myself to build this. Finding the right valuable investments, whether that is invest into further development or to acquire more companies within the industry. I think there is a long range of transactions you can have in this industry, and it's not really consolidated.
Hopefully you have been seeing as a shareholder how we have been executing on this ride as a public company, been adding shareholder value. Again, this is a growing, booming market. It has been for 30 years, and it will continue to be over the future. However, depending how we are calculating the number, we are still just from 0.2%-0.8% of the global gaming market. We are still, I would say, compared to the really big guys, a very small player. I think we should be humbled. THQ Nordic. Here is the picture of today. We're having a group structure led out from a small mother company, which is the public listed, led by myself and Erik and a few other key people.
Really the daily operations are led out from Klemens in Vienna and Klemens in Munich along with their teams. We're having 10 internal development studios. We're working with 30 external development studios, and we have 13 sales offices. 54 projects in pipeline in development, everything from smaller asset care projects up to the Eugenio's AAA development that he will talk more about soon. We have a diversified revenue base. Based on the pro forma numbers nine months 2017, we have 64% coming from partner publishing now in film. Obviously, with a lower gross margin, but still profitable. We're having our own games, 36%. I think why are we building this? What value are we creating? I think there is a big value being a content provider in this industry, owning the IPs, owning the ability to create new content.
Not only for the current generations, but I could see from my view, there is new players entering the market. Perhaps they are small today, but how will this market look in 10, 15, 20 years? This is really big elephants entering, partly. There is already big elephants in this market, but there is new elephants that are really sniffing the money in this market and would like to take part of this pie. What do they need? Yes, they need content and the ability to create content, and they need IPs that has a fan base that could drag consumers to their platforms. I think as a group, being able to provide that content and ability will create not only value for them, but also a financial value for us in the future.
I think when you are investing in content, looking at the big peers in this industry, you need to be able to maximize the return of investment by having a strong distribution power. That's one of the reasons Koch Media has been a really relevant transaction, because the console market today is still 70% physical. Having this partner publishing, not only contributing as a profitable business alone, but it's also adding gross margins to our content development. Also believing in really having diversified revenues. That's a lower risk. Having a wide catalog of products. By acquiring Koch Media, having all this AAA, not all, but having "Saints Row," the "Dead Island," exclusive license of "Metro," true AAA development products, being number one publishing partner in Europe with 50 companies as business partners, and having Koch Media's platform for further acquisitions and investments.
It's been, I think a great fit. Klemens look at me, "You're running out of time, Lars." I know I am. I also want to talk a bit of the synergies. Before I'm stating the synergies, you need to understand, we made this transaction on the base of the business plan we made together with Koch Media. I really trust them, and I could see they're delivering on this. Delivering that business plan, the development, execution, partner publishing and everything. There is no need to start a hard cost-cutting process, because that is also adding a business risk, merging different organizations or business cultures. There is a long range of synergies potential, soft synergies. One being soft/hard being we could add, and we are adding now, THQ Nordic in Vienna, physical distribution across Europe in various territories.
Some territories has been done, some territories are under evaluation in the respect of the business partner, obviously, we're having so many years. That is an ongoing process this year. Then implementing the asset care strategy. Koch Media has a long range of titles developed and IPs. There is asset care potential that we can execute on over the coming years. There is synergies within development and knowledge, adding perhaps just an outside view on development sometimes, sharing the knowledge on this. You have in your Games Lab. There's a long range of things that could be used. We talked about earlier the IP usage. One example could be, this is a bit. I don't want to say too much, but Red Faction obviously being developed previously on Volition.
There is a share tech potential in engines, agreements, middlewares, a pool of assets in you, and also back catalog assets to be reused. Obviously, what I'm on a daily basis now working with Klemens and his team is business intelligence, business development approach to large, new and old players, the elephants, market research data. There is lots of introductions going on across the group to various key people in the industry. There is knowledge between and sharing of finance. I know as analysts, you want to see hard facts, Lars. Please, it's only, I don't know how many weeks is it? Not too many weeks. Please give us some time to deliver on this over the coming years. By that, I would like to introduce Dr. Klemens Kundratitz, the Co-founder and CEO of Koch Media. Welcome.
Hello, everyone. It's a pleasure to be here. I'm the new one, yeah? It's hard after Lars' speech to follow his footsteps, but I will try. I have been building Koch Media for 24 years. I started it back in 1994, and I wanted to build a global publishing house. Over the years, I've been fortunate enough to find a good management team, strong leaders around me that followed me for many years, sometimes decades, to build this company. We are very proud of where we have arrived. When we did this transaction, my vision was, here is two European players that really share a lot of values together. We are both very much IP-driven. We are publishing-driven. We are content-driven. We love the games business, but we also generally like intellectual properties, digital entertainment, and we operate as independent players.
I think putting those two together has really created an enormous value for all of us. When we started talking with Klemens Kreuzer, we started a distribution relationship in a very standard way. I got to know Lars a little bit better over the summer when we went to Volition to talk about a common project. I found this is really right for both of us. It's certainly right for Koch. I think we need to unlock our potential, and I think being a part of a publicly listed company, that potential is huge. I think it's also right for the other side, Klemens Kreuzer's publishing entity, because we can add really global publishing infrastructure. Together, I think hopefully investors see that too. I would like to talk in the next 40 minutes about six things. First of all, about our footprint.
Second, about Deep Silver. What is Deep Silver? I want to talk to you about AAA development. This is new to you, and for that, I brought Eugenio. I want to talk to you about the importance of partner business. What do we mean by partner business? It is many things. I want to talk about also film and non-games business, obviously. What is publishing? What is our operation like? Why are we unique? Finally, Mario will give you a glimpse of our lineup. Six things. Stay with us. Our global footprint has grown over the last 24 years from very humble beginnings, but from the outset, we were an international company. I was based in London when we started Koch Media. We started Germany and U.K. in the first year. Over the years, we added publishing territories.
I always felt we need to first establish ourselves as a marketeer, as a sales organization before we can enter into investing in own content. That we have done over the years. We have added territories. In 2008, we entered the U.S. with Deep Silver, Inc. in California. Over the years, we have built out our European publishing infrastructure, added the film business back in 2003. Only in 2013, we added our own studios. Publishing all the way through, organically grown. Some of the companies we bought, but most of them we built from the outset. As you can see, we are not really a German company. We are very much a global company with a very strong European base in nine territories and in the U.S. We have lots of partners in the rest of the world.
As far as size goes, as you saw, 783 internal staff. This is a different number to the one that you saw earlier, because the earlier number included external studio partners as well. As far as staff goes, roughly half of the staff is content creators, and half of the staff are publishing related. Secondly, let's talk about Deep Silver now. Deep Silver, we have built over 20 years, but really our first global hit was 2011 when we launched Dead Island. I don't know whether you guys, anybody followed that. We did an amazing trailer, and that trailer was downloaded over 10 million times. Later on, the game launched, and it has really excited the zombie liking fan community. Since then we have launched a number of further Dead Island games, a big success, over 10 million units.
That was our first own IP and our first entry as a global publisher. Secondly, two years later, we were at the THQ auction, where Lars also said he would have liked to be, but it wasn't right on the timeline. We quite surprisingly for most, managed to buy two main assets, Volition, the studio behind Saints Row, Saints Row the IP alongside with it, and the product that was in development Saints Row IV. Secondly, we acquired Metro, the license and the project Metro: Last Light, which was also in final stages of development. 2013 was an exciting year for us, two major IPs, global launches. At the end of 2013, we also bought Fishlabs, our second studio, and we had already made our THQ investment back within 12 months. At that point, we were really established.
As you can see here, our publishing activities are built around own IP. First and foremost, Saints Row, Metro, Dead Island, Sacred, Risen, Homefront, and so on. Secondly, we have partner IPs that we are publishing, but in a very integrated way. Then we are working with internal studios and external studios. The weight in revenue terms of our Deep Silver business is about one third of the entire Koch Media Group business. Inside that one third, about half of it is digital and half of it is physical. It's truly globally distributed. Our brands are global brands, and our ambition is obviously to build out that roster and that portfolio of games. As I said, this is the sort of timeline, and not every product has been a success.
As with every publisher, you have successes and failures, but we have managed in the combination of our own content business and our partner business over 23 years to be profitable every single year. We're very proud about that. As a private company it was a requirement for us, and we were dependent on banks, obviously, all the time to really show that continuity, to show that stability and risk conscience management. This is Deep Silver. I didn't mention Ravenscourt. Ravenscourt is our second games label that we have established for more niche titles, for more casual products which don't fit our ambition for Deep Silver as a global AAA brand. What drives Deep Silver to a large extent is now our own internal studios.
For that reason, I would now like to hand over to Eugenio, our Director of Game Development, to tell you a little bit about our internal and external studio development.
Hello, good afternoon. I'm Eugenio Vitale, thank you Klemens for the introduction. I've been joining Koch Media, Deep Silver in 2015, coming from Ubisoft. Primarily the mission was to create a set of processes to allow our AAA title to steadily reach quality and also be able to share across projects continuously best practices. This is what I would like to show you today a little bit, what is our landscape in terms of development, also give a high-level overview of maybe some of the more fundamental processes that we have today and we are applying today in every AAA game that we develop. This includes also Metro Exodus that you recall. If we look at the portfolio of development, we divide roughly into two ends.
On one end, we have what we call the fully managed development, which is a set of processes that are the foundation of how we build upon AAA titles. This applies to internal IPs and to licensed IPs. This is, for example, for Metro also for other games like Saints Row, Dead Island, etc., just to name a few. On the other side of the spectrum, you find the publishing where it sits instead the relationship with companies like Ys Net, Shenmue, and Warhorse with Kingdom Come: Deliverance. Talking about the studios, as you can see here, we have a collaboration with 7 studios in our portfolio today. 3 of those are those that we already heard are internal ones like Volition in the U.S., Dambuster in Nottingham, U.K., and Fishlabs in Germany.
With these, 2 other studios are also part of this fully managed development, specifically are 4A Games in Malta and Kyiv, which are developing Metro Exodus, and Sumo Digital that is working on Dead Island 2. All the studios have a long history and pedigree of high successful IPs. Obviously, Volition is known for the Saints Row, for Red Faction, even more going down the path of history, there is The Punisher, Freelancer, Descent. Really a long history. On the Dambuster side also, they are specialized in first-person shooter. They were the former Crytek UK, highly technical expertise.
They collaborated on "Crysis." They are the guys also from "TimeSplitters," Of course, they work also on "Homefront." Fishlabs, on the other hand, is our smaller studio, is a studio that we are growing into a major role still, especially maybe supporting the other in terms of co-development, which is very important today in multi-site productions. Their expertise is handheld console primarily, but they are now working on a title which is for major platform. Maybe you know them as for their "Galaxy on Fire" that was really successful on IP on mobile. When it comes to 4A, no need to say, these guys have a lot of experience in first-person shooters.
These are the guys coming from "S.T.A.L.K.E.R." They developed all the "Metro" saga. Also, they're working on "Metro Exodus." Sumo Digital is one of the biggest developer in the U.K., with a lot of developer, work both with Microsoft and Sony. Is currently the primary developer for "Dead Island 2." As Deep Silver, I think Klemens already gave you an overview. We develop and publish globally AAA digital games on PC and console platform. The mission that we give ourselves is to excite players with innovative and immersive gameplay at the best possible quality. To do that, of course, we have different pillars.
One of those is technology. Our products use best-in-breed and middleware, also proprietary tools and platforms like the Deep Ark that is a proprietary architecture for all the back ends when it comes to telemetry, collecting player data, behaviors, but also game services. On the engine side, our philosophy is that there is no one size that fit all. We try to use what is the most appropriate tech for the game that we want to develop. That's the case why you see over the slide Unreal Engine, CryEngine, Unity. Also, we think that if you want to be a meaningful long-term player, you need to be technology independent. This is also to de-risk your position in the future, because market is changing like history teach us.
This is why we developed the third generation of the Volition engine during the development of "Agents of Mayhem." This is the current engine that Volition is using on their next AAA title. It's an unannounced one based on a major IP. It's an engine that is specialized in open world and give us competitive advantage compared to off-the-shelf solutions like Unreal Engine or CryEngine, specifically when it comes to scale, number of entity on screen, visual effects, dynamic illumination in the open world. Most above all, the benefit it brings us is in terms of productivity, building an open world with procedural-based spline modeling. Before going further, I would like to just spend one minute more over the difference between what is a large-scale AAA title versus a regular or an indie game.
I think if you look at the characteristics, these games are made for mass audience. You have to address many player types, and you have to have a high-quality production value, a good variety of features to cater all the different interests, high accessibility, and obviously, these are executed by a very large team. Most of the cases, we have to combine them multi-site. At the backbone, at the very backbone, you need solid processes that allow this to work, coordinate efficiently, and work efficiently in this regard. On the flip side, regular titles come in about a more lower and a mid-budget range that can be executed by a smaller team, that can focus more on innovation sometimes, and they can be more hardcore gamers maybe. Obviously, also from a process standpoint, they can also be a little bit more informal than a large production.
We've been talking about the consolidated processes and the strong processes backed up by project management that can somehow warrant predictability, but at the same time, the constraint of a project like time, quality, cost, and scope. What we introduced is a stage gate process. This is not the only process that we have, but is one of the fundamental ones. It is a business process envelope that contains tools and methodologies to build games. The essential part of it is that it partitions the development to the risk, to burn down risks at every stage. Every stage or phase, as you can see in the slide, has at the beginning a set of objectives that the product and the development team is given. These are measured at the relevant gate.
The key element is that the whole organization, especially top management executives, are coming together at the gate and reevaluate and assess the product, whether the product effectively has achieved those objectives that have been given. Obviously, a gate can have three different outcomes. On one side, best case scenario, it gets a green, it gets a go, so the product can move further into the next phase. Or it is not, it is somehow allowed additional time to correct and course-correct some of the deficiencies that are showcased, or it is canceled. It is also important to have a healthy portfolio management so that we can make decisions early enough in development. From the advantage standpoint, I think there are three fundamental pillars: quality, focus, and time. From a quality standpoint, it definitely helps us reduce the unsuccessful projects.
From a focus standpoint, it allows us to identify very early enough what is the minimum marketable product, what is the minimum viable product. What is the scope where we really have to put our focus on that is bringing us much more value. From a time point of view, it is also giving the team constantly objectives which are months away, not years away, to ensure that we have a more efficient time to market overall. It also allows us, the larger organization, to activate at the proper amount and the proper time and place. Allow me from the top part, maybe some of you already read, but from the top part, allow me to mention there is a strong consumer focus. Throughout development, the products are constantly exposed not only to the internal organization, but also to players at different stages.
This is done through user experience research. Which brings me to the last part of my contribution, the Games Lab. We said accessibility is super important. We are talking to millions of players on one side. What do we mean by accessibility? It is not only about having a nice interface. What we speak about is being able to prove that the assumption that we made when we concepted the game and we had in the game in terms of mechanics, how it works, generates the right player experience. Effectively, the players are experiencing what we originally envisaged. To do that, we created this special department, which is called the Games Lab, and it is operating in three different sites, in the U.K., U.S., and in Germany. It has thousands of players in their databases.
These players are participating in what is called qualitative user experience research, which means going through play tests, focus groups, paper prototyping, surveying at different points in time. They also provide us what is called quantitative user experience research, which is also integrated with telemetry, and which encompasses biometrics, for example, eye tracking and galvanic skin response or electric skin activity as well. This allows us to also numerically read what is the behavior and translate in an objective format what the people express in a qualitative form as well. Last on this, I close on my side, the knowledge sharing and knowledge exchange. This is one of the big parts and mission for the Games Lab is as well ensuring that what we learn on one project is translated onto the other as well. Thank you very much.
Thanks, Eugenio. Thank you, Eugenio. Our expertise in AAA development, I hope we can apply it to more and more products on the Deep Silver side, but certainly also with our friends in Vienna. Completely different element of our business is our partner business. This is made up by a wide range of partners, a very wide range of products. It is stabilizing. It gives us relevance on the global marketplace. First and foremost, as you can see here, these are the categories of products, but first and foremost, we are talking about games publishers being strategic partners of Koch Media for already a very long time. We are number one European publishing partner for a reason. That is our partners, in order to truly reach the entire European market, need local publishing expertise and help.
Rather than employing their own companies everywhere, they use us. That publishing expertise, what that means on a local basis, I will get to later. We are quite unique. Nobody else is really doing that. Because our partners like Bethesda or Square Enix or so on, they find themselves in the situation with bigger and bigger products, but fewer of them. If you have 2 or 3 products a year, maintaining a European publishing infrastructure makes no sense for them. Therefore, our contribution being their publishing partner in the territory, their extended arm in the territory is a very mutually solid business for us as well as for them. Coupled with that, we are also in distributing and publishing non-games business, game accessories, gaming headsets. Turtle Beach is an important partner in some of the territories.
We are, as Lars already mentioned entering into the retro gaming sector very successfully with our C64. We are also having some consumer software products, productivity and so on. Just to add to the kaleidoscope of our activities, our film business has been close to our hearts now since 15 years. The size is about EUR 30 million. It is very stable business, and it comes along with about 50% digital and 50% or non-physical, maybe better to say, and 50% digital business. Home entertainment is the physical side, but we are also launching films in the theaters as well as exploiting our film properties through Amazon Prime, Netflix and so on. We are operating that business, as you can see in the German-speaking Europe and in Italy. It kind of adds stability. It is very sort of a content, but a stable and a margin-rich business.
Now I would like to add Craig here to the stage. Craig is our managing director of Northern Europe and running U.K., the Benelux and the Nordic territories. He would like to enter a little bit closer into our European partner business.
Good afternoon. I just want to bring to life a little bit this console publishing business that we're doing for our partners. As you see, it is a sizable business in the direct markets that we are operating in Europe. It is a marketplace that is worth over EUR 3.8 billion at retail. That figure doesn't include PC software, that is just console. With the colored bars you see at the top, whilst the digital transition is clearly underway, it is by far away from the majority of the business currently. As Lars said earlier, overall it is around a 70/30 split between console physical and console digital. You see, of course, the Nordic number, a figure that you probably feel closely here, that it is 50/50, but the major markets are way off. Just to sort of join some dots.
Earlier you saw from Klemens that Deep Silver digital revenues were 50/50. Of course, those Deep Silver revenues include PC, which largely is exclusively downloaded. That is the difference there. Digital sales are, of course, a byproduct of the local efforts that we put in as a business when we're launching a physical product. Without the physical, you have to question, would the digital be as successful as it is? The complexity of the work that our teams do across Europe to deliver for the physical certainly drives that digital part. The term digital discoverability is probably not a new one for you as well.
Of course, I do think that still the retail shop window of walking into a physical store and seeing games continues to be the premier marketing asset that we've got in our industry to remind people that the big blockbuster games are coming. For the future, I think this is a very relevant thing to bear in mind. For that reason, as a business, we believe that physical is here to stay. We believe that retailers will continue to support it. Through our own offices, we want to continue to exploit that as perhaps the publishers themselves question, as Klemens has said, do they want to be directly servicing that themselves? If I can just click onto the next slide. A lot of data here, but I try and bring it to life for you.
I'd like to explain our approach to business development in this area. Bottom left, you see the ring. The blue is the value share that the top 10 publishers in the market represent, 87%. You've got the next 11 to 20 positions, then you've got the 21 to 30. You've got everybody else, and everybody else is about 50 publishers making up about 2%. If I take you then to the top three graphs. On the top right, you see this segment, 21 to 30. Just to explain a little bit, the colored bars that you see across those nine points, they add up together with the other, the EUR 3.8 billion that I referenced earlier. The top right one, this 21 to 30, you can see that this is the one that own offices of publishers don't really play a part in.
They've already made that decision to outsource to companies like ourselves and competitors. You can see by the green color how dominant we are across Europe in that segment. We have a share that's close to 80%, taking more than EUR 50 million at retail. If you look then at the 11 to 20, this is an area that's in transition. Here, the own office is still the dominant factor, but publishers have begun to outsource the business. Actually, we've become the preferred partner, compared to the competitors. Those competitors tend to be local distributor publishers, and therefore for us, we also think that as time plays out, we, with our strengths, will take that business as well. The crucial thing to look here, though, is the top 10. 7% of the marketplace is dominated by publishers being direct.
This is obviously a highly lucrative area for us to look at, and obviously, we're very keen to talk to those companies, which is what we spend a lot of our time doing. To bring what's in their mind to life somewhat, if you look at the bottom two graphs, this brings to life a little bit that in different countries, publishers have different views on being direct or indirect. You find that countries such as Italy, Spain, and Nordic have the highest propensity of top 10 publishers working with us already. In the bottom right, I've overlaid the digital yellow line. How digitally advanced that market is. Nordic, you remember the 50%, and there's no surprise that the least amount of publishers are direct in Nordic.
As a business, we believe that there's a direct link between the % share of digital, or better said, the size of the physical revenue in each of the countries, and the likelihood of a publisher deciding to exit that market and work through someone like Koch Media. This presents us with a significant opportunity in coming years in physical. Just on a final slide before I hand back to Klemens. Here's a slide that showcases our three publishing office regions to whom we rely on to execute this strategy. Northern Europe, my region operates from three sales offices. We've got finance and operations consolidated in the U.K. for efficiency.
Our market share overall gives us a vendor position in the regions of between six and seven, so it makes us very relevant to retailers who are also looking to cut back on the number of vendors that they deal with. In Benelux, as Clemens mentioned, we have this Turtle Beach relationship, the leading headset brand. A physical product, not one that can be digitally downloaded, one that's benefiting very well at the moment from some of the great games out there, and a sector that we'd like to expand on because we are doing extremely well there. The U.K. has got its own logistics center. We've also developed a very powerful reporting tool, KM Hub, that delivers internal commercial insights.
It also has some very great risk management tools because we want to keep across all the unsold inventory at retail and make sure that we're dynamically moving it through. It's a tool that we're in the process of rolling out across the group. In Central Europe, which is the German-speaking countries, we've got the largest sales force compared to our competitors with 30 sales staff. These staff are based, as you see, in four offices. We benefit in Germany from a very wide product portfolio. It's one of the more decentralized buying markets, and for that reason, we find great success in the consumer software, games, and films that Clemens has referenced. Market share, it's the best in the group, either fifth or sixth as the largest vendor in the German market, so makes us very relevant for the retailers in Central Europe.
Finally, in Southern Europe, we've got three territorial publishing offices with their own direct sales team. Italy benefits from the film business that they've got. They've also got a very strong gaming business, as you saw with some of those top 10 publishers working with them. Some of the market shares that you see for Italy and Spain, it's the strongest in our group. They're very over-indexing there. What is common in all our offices is our deeply experienced management and those people's personal relationship with all of these top 30 publishers that I'm referencing. This leads to a network of trust that's core to our business. Clemens
As you can sort of hear through the lines and between the lines, we are very solidly established in Europe, we really believe what I share with Lars as well, the belief that the physical part of the business is here for a very long time. Even as digital grows, we as a company can benefit in two ways. In the one hand side, our own content will benefit through an increased level of digital business, which is obviously the more profitable side. We are also going to grow our partner publishing side. We are firmly of the belief that both sides of the business will have a great growth potential in the future for us. What does publishing mean?
We obviously publish first and foremost our own products, but through the wealth and the diversity of our publishing partners, we are using our publishing expertise and contacts and facilities and infrastructure for partners in various degrees of depth. Now, when we look at our partners, these can be affiliated development studios, they can be independent developers, they can be co-publishers that use us. We are teaming up with global digital publishers that utilize us as their publisher on the physical side. There's many different ways how we operate. The services and tasks that we conduct for our own portfolio of products as well as for our partners is very multifaceted. We are also integrating our publishing activities very early on in projects. As you can see in development, we are already starting with production management, with development support.
We are obviously helping on the We're doing localization of our own and some partner products. We are taking care of age ratings. Manufacturing is a complex task with sometimes big AAA global releases. We're talking about over 100 different SKUs that we are launching at once on a global scale. To manage that manufacturing process from Australia back over to America and Japan and everywhere is a task which a company needs to master on the right day for everybody. Here is just a more deeper explanation. This sort of bunch of flowers of publishing tasks or activities that we perform for our own products, but also for others. I think this is a scalable setup that we can use as we go along and add more content, we can utilize that for everybody involved.
Last but not least, I would like to shed some light on our digital part of our publishing. Clearly as a true global publisher, Deep Silver is very ambitious in selling our products through the digital channels. For that, we are leveraging our strong relationships with first parties that we have maintained now for many years. When you are one product, an independent company, you may have success maybe on Steam, but to really leverage the digital potential of products, you have to have size, you have to have relationships, and that we have. Also our marketing activities for our digital customers are very different and very much tailored around their needs, very much community-based, social media based. Combining marketing for both sides of the market is a true strength of ours. Overall, our publishing setup is very scalable.
It's there, it's global, but it's ready for growth. Ready for growth is also our whole company structure. For that, I would like to now have Reinhard join me here to talk a little bit about our operation and finance setup. Reinhard?
Yeah. Hello, everybody. My name is Reinhard. I'm the CFO of Koch Media, and I am responsible for finance and operations. It's really hard after speeches of Lars, Clemens, Craig, and Eugenio, and in front of the coffee break, to talk about finance and operations. I think it's important to tell you something about our organization and what is the way, and what is the reason why we are what we are here. Only to give you an introduction why we had these three different segments, the Deep Silver business, the publishing partner business, and the film business, is because we always believe that you are more stable on three pillars than staying on one feet. That is the reason why we built these three segments. We also thought that it's important to be a European publisher, having local offices everywhere.
You can see there we have two different ways of thinking. We are really supporting local entrepreneurship. Like Craig created an organization in Northern Europe, that is what we need. We need local people, a local management team, which are supporting the needs of the French market, the Spanish market, the Italian market. They are all different. These are functions, what we have in every single country, PR, marketing, and all needs for the market. Then on the other hand, we also have shared service centers where we believe that we have to centralize and be more efficient if we are keeping things together. When we were building companies in different companies or making acquisitions in the past in France and in Spain, 10 years ago, we find ourself with six different accounting systems.
For reporting requirement, you can't fulfill really quick reporting needs, therefore, we decided to change all companies, also the local territories, as the development studios to SAP. I think that's one of our biggest advantages. We also have centralized and shared services on legal. We have a legal department in Munich, and we internally have also four-eye principle. That means, I would say 99% of our contracts are signed by Clemens and me together because they are different standpoints on the product side, on the commercial side, on the risk side. It's good to have a different point of view, also on the contracts. Accounting team, they are mainly accounts receivables, and accounts payable are also mainly based in Höfen, because there is also the credit control and risk control.
We have all our receivables, so customers and also vendors are credit insured by 95%, so there is only a remaining risk for us of 5%. That's also reason why we implemented this forfaiting process and that we can sell our receivables. We are using on SAP, the finance and controlling on operations. We have also this treasury and financing tool in Höfen centralized. If local companies, if they need internal loans, then we have intercompany loans, but we centralized all the bank relationships. We have six different banks, and feel independent. By the way, they all supported the acquisition, and all the credit lines are still available at the same terms. On the right-hand side, you see our logistic. We have the main European logistic center in Höfen, that we are supporting from Nordics to Italy, out of Höfen and also exports.
We have an external warehouse in the U.K., Kühne + Nagel. We have our own warehouse in Spain and an external warehouse, Technicolor in the U.S. There are some figures here. You see last calendar year, we shipped 4,900 different addresses only in Europe. We had 330,000 delivery customer orders. In last calendar year, 2017, we shipped 18.5 million units during the whole year. That means on an average per day, it's between 75,000 and 80,000 units per day. During we started this Capital Market Day, the last hour, as an average, our colleagues in Höfen and U.K. shipped roughly 10,000 units now.
That's good.
That's good. Hopefully, it happens. Lars.
Thank you, Reinhard.
Yeah.
Sorry for rushing you out from this day. Great presentations. Thank you very much. This is, I wouldn't say boring, I like it. I know a few of you like some action and games, and that is actually coming right after the coffee break now.
Hello, everybody. Dear Lars, dear Clemens, dear THQ Nordic AB team, campaigners, colleagues, and friends, good afternoon, ladies and gentlemen. Today, I'm delighted to be here to talk to you about our latest catch in Deep Silver news for about 15-ish minutes. I'll do my best. My name is Mario Gerhold, Lars asked me to introduce myself, but in just one minute. Let's go. It's me, Mario. Born in 1971 in Germany, married and father of a great daughter. She recently entered the new boss level in the game of life called the teenager zone. I can tell you, great sound effects, really entertaining. Entertainment is what was and is my passion. My first game levels were running on the famous C64 back in the 1980s. I worked in the music industry in an advertising agency, studied marketing and communications.
On top, I switched from marketing to development and used to work as an external producer with external game development studios. At that time, in 2002, Koch founded the first in-house games label. The year after, Koch went searching for someone to establish and grow Deep Silver, the new label, and product marketing. Here it all started. Today, 2018, I'm celebrating my 15th anniversary with Koch, heading a team of 30 people and the international marketing department. You could have seen some of the projects I have been working on. Now it's time to share a secret with you. We are not selling boxes. We are not selling games. What are we selling? We are selling journeys. Journeys to the land of immersion, where our customers are the hero of a thousand tales.
Just recently, we released the best-seller, "Kingdom Come: Deliverance," which I had the honor to work on alongside the Prague-based Czech developer, Warhorse Studios. The game, set in 1403 medieval Bohemia, creates one of the most immersive role-play experiences of today with an authentic story of love, intrigue, and treachery for the players. Here is how it looks.
Brothers in Christ, we have gathered here today to welcome a new novice into our midst. Dear brother, forget your former life and embrace your new vocation in the community of the monks of Saint Benedict. The service of God obedience and endurance of all discomfort. These are the cornerstones and succor of our order which on this day shall become your own. Accept your new name and wear it with honor. Welcome, brother.
Last week, we opened the gates to Funcom's land of "Conan Exiles," where bare survival is the brutal world, and this is the norm. Funcom from Oslo has created the largest Conan video game so far, combining the worldwide known franchise with builders creativity and action-packed fun. In single and multiplayer, players must survive, build and dominate. Please enjoy this very unique, cool clip about builders. Just a short snippet. The German city Hamburg is well known for the big harbor and traditional ships, and from now on, it will also be known for spaceships. Thanks to Manticore: Galaxy on Fire for Nintendo Switch. The game was developed by our internal studio, Deep Silver Fishlabs in Hamburg. You know the guys from their technology leadership in mobile games, which led to them being promoted in Apple's keynote, for example.
The studio is evolving and has established a proper setup for the development of future console and handheld games. Manticore is a sci-fi action game in a rich and handcrafted universe waiting to be explored, where players fly and control mercenary spaceships during the intense dog fights against deadly alien enemies. The magazine Nintendo Life wrote, "Manticore: Galaxy on Fire is an outstanding example of mobile to Switch done right. Gorgeous looking, content-heavy space action with a deep plot." Yes, it's an urban legend that alien criminals were named by the developers' cats running wild on their keyboards. No cat video, please.
Fasten your seatbelts. We're about to experience some turbulence. Hey there, beautiful. Okay, sharp right ahead. Hold on to your drinks, guys. Damn, that was close. Okay, there we go. Ka-boom. Yeah, baby.
Manticore was recently released on the Nintendo eShop. From Germany to the U.S. of A. I'm pleased to talk about one of the greatest games industry talents, Brian Fargo. Brian and his team from inXile, California, will continue to work with Koch for the new installment in a game series that created the foundation of today's post-apocalyptic games like Fallout and Wasteland. Here is a personal word from Brian.
Hi, my name is Brian Fargo. I've been doing business with Koch Media now for over a decade. I'm very pleased to announce that we're going to continue working with them on two of our biggest franchises, with The Bard's Tale IV and Wasteland 3. I've had nothing but positive experiences working with everybody within Koch Media. I find Clemens to be of the highest integrity of anybody in the industry. I'm happy to be working with you all again. Thank you.
Thanks, Brian. 2014 brought back Wasteland 2 with 87% Metacritic score. Now it is time for Wasteland 3, which is being developed for PC, PlayStation 4, and Xbox One. The party-based role-playing game takes place in the savage lands of frozen Colorado, where survival is difficult and a happy outcome is never guaranteed. The game will offer difficult choices, unique characters, and a vast and wild game world. Let's have a look at this cool game.
Am I talking to the Desert Rangers? This is some call me the Patriarch.
Who the fuck are you? This is Hard Head turf. What the fuck are you doing in our territory?
Hard Heads, it's dinner time.
Wasteland 3 is a title I'm looking forward to. This leads to my next point, which is after the 30th anniversary of the original inXile release in 2018, the long-awaited true sequel, "The Bard's Tale IV: Barrows Deep." Utilizing Unreal Engine, it represents a graphical leap forward in the RPG dungeon crawler genre, immersing the player in first-person view in a highly detailed and lush world and in the winding streets of Skara Brae. With the bard leading the way, the game has a strong focus on design and music inspired by Scottish culture. The Bard's Tale IV is built breathing life into this iconic series for fans old and new. As inXile CEO Brian Fargo notes, "When we originally created the first Bard's Tale in 1985, the visuals were such that we had to rely solely on our imagination.
Seeing Bard's Tale IV in the Unreal Engine is something we could only dream about back in the day. Here is a video. Czech Republic, Germany, Norway, USA. Now let's travel to Japan, where it all began with the games industry culture. Tokyo is the home of another industry veteran, and he is as legendary as the games he created. I'm talking about Yu Suzuki from Ys Net, creator of the legendary Shenmue franchise, published first for Sega Dreamcast back in 1999. The original Shenmue set many standards that we take for granted in today's gaming landscape. It truly can be seen as the ancestor of what we call open-world games today.
A world in which interactive non-player characters are following their lives in accordance with game progression, quick time events, and complex narratives packed with emotions are just some keywords that come in mind when talking about the heritage for our industry. This is topped with cool martial arts kung fu fighting. The story continues. Shenmue III is the long-awaited sequel and the continuation of this epic story-driven saga created with the Unreal Engine for PC and PS4. Despite the real passing of many years, Shenmue III continues with the events almost seamlessly from the last installment. This JRPG gives players full control of a teenage martial artist, Ryo Hazuki, as he investigates his father's murder, exploring the beautiful games world and searching for clues. Ryo is not alone. The girl at his side, as you already noticed, is Shenhua.
The interaction between both will deepen their relation and affecting her mood and behavior towards Ryo. Deep Silver informs that the upcoming release of "Shenmue III" has been moved and will now release in 2019. The extra time will be used to polish the quality of the game even further to the high standards it deserves and release the product in the best possible timeframe. For now, we will say coming in 2019 and will update you at a later stage with an exact release date. We hope that when players get hands on it, they will ultimately think the extra time was well spent. Here's a word from our man in Tokyo.
Hi, everyone. I'm Robert, and I'm working for Koch Media in Tokyo on "Shenmue III." Together with Ys Net and Yu Suzuki, we are trying to create a great game for all the fans of Shenmue, okay?
Now this is my personal pleasure to talk about Metro. Our Metro games have been developed by 4A Games, founded in Kiev, Ukraine, and headquartered since 2014 in Malta. Based and inspired by Dmitry Glukhovsky's book series. Metro Exodus is the third and most ambitious entry yet in the critically acclaimed Metro series, with over 10 million copies sold. Metro Exodus was announced in the 2017 Xbox briefing with a stunning trailer, delivering one of the most powerful and memorable reveals of E3. Please enjoy. Metro Exodus is a highly anticipated sequel with a very passionate fan base that we intend to satisfy with the highest possible quality product. The development of Metro Exodus is progressing well. We are all very excited by what we are seeing.
We have been constantly reviewing the game's progress to ensure that we deliver a product that gamers and fans of the Metro series want and deserve. We want everyone to be able to experience what is the most ambitious Metro game to date at its absolute best. Therefore, we have taken the decision to move the release date to Q1 2019. We know that this will be disappointing news for the fans that hope to play the game this year already. We also know you will appreciate the results that this additional development time and new release date will bring. You will see new gameplay footage at E3. Before I will pass you over to the next speaker, let's now close my presentation with a show reel of key brands from portfolio of own IP and partner publishing games. Please enjoy.
Can you see the blood course through our veins? Can you feel the thrill that's in the chase? Can you see the blood course through our veins? Can you feel the thrill that's in the chase? We're the kings of adrenaline. Take you higher than you've ever been. Get a taste of our medicine. Whoa. Whoa. We're the kings of adrenaline. We're the kings. Take you higher than you've ever been. We're the kings. Find the fire that's from up within. Don't stop to think, baby. We're gonna win. We're the kings of adrenaline.
Thank you all for listening. It was a pleasure being here today. Now I will hand you over to Reinhard Pollice. Thank you. Are you changing?
Yes.
Okay, cool. Should I wait?
Yeah.
Okay.
Hello, everybody. Glad to be here. Thanks for showing up in such a good quantity and listening to all the interesting content my colleagues already showed you. I'm here to first introduce myself because I've been with the company since a very long time, but I've never been actually here because I was focusing on the games, and Lars does such an amazing job of doing all these presentations here for you guys. Yeah, I'm going to start with that. I'm the director of business and product development at THQ Nordic, which is headquartered in Vienna. I started with the company when it was called Nordic Games, when we started operations in 2011, to take care about the franchises we acquired from JoWooD and DreamCatcher.
Among these franchises were such hits as "Painkiller," "SpellForce," "The Guild," "AquaNox," among others, that we are now carrying forward with THQ Nordic, and doing awesome asset care and new products. My main focus is that I oversee our both internal and external development projects. I have a great team here that's worldwide operating with the majority and the base in Vienna. As Lars already mentioned, we are continuing to grow and expand the team to make sure to further deliver on the promise and grow the company further and bring it to new heights. The other part of my business, or my job, involves that I onboard new projects. I go out, meet developers all around the world, scout them, scout projects, see if they are fit for our IPs or if there's a great new IP out there that's perfect for our core game strategy.
That's also part of it. Today, I will show you a fraction of our lineup, namely "Red Faction: Guerrilla Re-Mars-tered," "This is the Police 2," "Darksiders III," "Aquanox Deep Descent ." I'll talk a little bit about "The Guild 3." We have some cool "Biomutant" stuff to show, and then we'll close it with my favorite racing game, "Wreckfest." I will mainly concentrate on showing you gameplay footage of our games, and then do a little summary of where we are and what we're doing with these games. I'll start with "Red Faction: Guerrilla Re-Mars-tered," which is a classic asset care strategy title that we're doing based on the popular "Red Faction: Guerrilla" title that came out in 2009, developed actually by Deep Silver Volition, or back then it was Volition. Yeah, let's have a look.
In 2125, I was on a mining colony on Mars. Just a quiet backwater facility among the stars. Then one day, I was minding my own business. I was mining my own ore. There he was, Goat Simulator. In a truck flying off a bridge. Goat Simulator. Mashing through a bridge. As he landed, out came his hammer. Smashed my boss right in the face.
Red Faction: Guerrilla is a third-person action shooter that focuses on destruction. It's playable out there, so if you have the time, just go and check it out. I saw already a few of you did it already. Really the unique thing is being able to destroy everything you see and seeing that in a visually very stunning way. That's a really pleasing feeling, because you cannot do that in the real world, and that's what games are all about, right? Red Faction: Guerrilla was always the fan favorite in the series because it not only was featuring stunning destruction effects and capabilities, but also it had an open world which plays very well to the strengths of the original developers' Volition. With this remastered edition, we're bringing the franchise back on the radar.
When we acquired the franchise from THQ, we did a small upgrade asset care in form of the Steam edition to bring back for the Steam edition, the multiplayer mode. We saw that there was a huge positive reception. From that point on, that was in 2014, we knew we have to do some great care with that product. We're working on the remastered edition with a German dev team called Kaiko, who we have also worked on since many years. They did for us Darksiders Warmastered Edition and 2014 also Legend of Kay Anniversary. The next title is the sequel. It's called This Is the Police 2. The original came out in 2016 to great success because it has such a unique style. Let's just check it out.
This Is the Police 2 features a very unique art style that drives the narrative focus of the game and gives it more depth, which is one of the key pillars, the story and narrative focus. The other two key pillars for This Is the Police 2 are management. You manage a squad of police officers, and you actually take the decision because you're the head of the police chief. The third one is actually the addition for the sequel. It's this top-down tactical mode, much in the vein of Jagged Alliance and XCOM. We added this to the game because we felt through that we can expand the gameplay and give it more depth and make it more enjoyable for the players. The next title I'm going to show you is Darksiders III. This was a little short gameplay segment of Darksiders III.
Darksiders III is the third in the series, and it's the third that features a distinct and unique main character. We are playing now the third of four horsemen, Fury, and she is per archetype a mage. All her attacks and movements are tied to her magic. You could see the whip that she was swinging, and that's all mage part. The game is currently in the finalization phase. We are wrapping up the whole content and adding polish, and we are also doing a lot of focus group tests to make sure the core mechanics of the game deliver. The next title I'm going to show you is "AquaNox," and for this title, I'm going to show you some really unstaged in-game gameplay presentation that's very fresh.
Nanofauna. Watch out, we've got company.
More of them inbound. Protect the Tupolock. Just a few of those things could take down the whole ship.
Whatever happens, you must survive. What are you waiting for?
Hold your aim. There is a rust phase. Attention, lone craft. I am Tupolox Six, Adjunct of the Pilot. You will power down your engines and surrender.
AquaNox" is an underwater vehicle-based shooting game with a very deep RPG system behind it, where your main character is actually the ship. While in a traditional RPG you upgrade your human-like hero, here you upgrade your ship. You can trade and buy new parts, you can buy new weapons, or you can craft them or salvage, in the deep-sea worlds, materials to forge new interesting stuff that you could put on your ship. The game is single-player and multiplayer. We have a co-op mode with up to four players, which makes it quite a challenge to develop, but we are progressing really well. The thing about this whole AquaNox franchise is that it goes back to the mid-'90s, when Blue Byte released a title called "Archimedean Dynasty," which is considered to be a cult classic in terms of underwater shooting games.
The "Aquanox Deep Descent" is actually taking a lot of inspiration from that title, because that's a fan favorite. Good. Let's say a few words about "The Guild 3," which is still an ongoing project for us. As some of you know, we've released "The Guild 3" in early access in September 2017. We had really good sales. We were in the top sellers of Steam, which is the thriving platform for PC titles. The game is a very complex game, in essence, it's a medieval life and economy simulation with a lot of RPG elements, and we're also doing single-player and multiplayer. It's such a complex game, we unfortunately, at the early access release, had some issues, and we couldn't keep up with the pace of polishing and fixing it.
We are now about to reorganize the development setup of this project to make sure we can actually deliver on the fans' and everybody's expectations. The potential of the title is huge. Please give this title some more time, and you will see that we can actually deliver some nice results here. Okay. Next one is "Biomutant," developed here in Sweden, Stockholm, by Studio Experiment 101 that we acquired in November 2017. I'll also start here with a video. Biomutant is an open world RPG. At the core of it, is an anthropomorphical creature that you're playing. It's this raccoon-like creature. The cool thing about it is that player, you can customize it in many different ways. Everybody will have a main character that just fits their visual needs. This will make it very cool.
The core of it is also very deep RPG systems, where you can mutate your creature, can learn new stuff, and also can craft weapons. There's a huge open world to explore with tons of possibilities to do that, as you saw in the video. There are mechs to mount. You can go underwater. There is other possibilities to fast travel and explore new heights of the world. I think this is something that will give players very long time to play. Biomutant. Here's a little image of what we're doing in terms of collector's editions. Because we have such a big and broad fan base, we also want to make sure they are properly served. There's a premium edition with a figurine, poster, and of course, the game inside. Last but not least, we have Wreckfest, which is a racing title, but a very unusual one.
Let's start with the video because then you get a good idea.
You can't move, can't hide, can't speak. I can smell your fear. You're feeling weak. Now, try running, you'll just hit the wall. Because that will make you feel your heartbeat. All you did was raise the beast in me. I used to hide my ways before, but you made me go to war. Time heals, but I will make you feel. All the pain that's in the world, and tonight we're going to war. Someday, we'll be in harmony. Swear I've always wanted peace, but tonight we're going to war. You know this game is not worth that kingdom. Because I am more than you can handle. I will find you wherever you go. Whoa. I'll destroy you in a heartbeat. I'm not a slave to all the words you speak. It was fun and games before. You made me go to war.
Time heals, but I will make you feel. All the pain that's in the world, and tonight we're going to war. Someday, we'll be in harmony. Swear I've always wanted peace, but tonight we're going to war. Swear I've always wanted peace, but tonight we're going to war.
Yeah. Wreckfest. The unique thing is really also destruction and the way physics plays a role in the game. It has a really fun and interesting driving model. You can run into other cars, and you can see the damage on it. This is really unmatched soft body physics, as we call it. The game actually has been in early access since 2014. Since December last year, we made huge steps towards polish and adding content to the game to please the community and get positive word out on it. We are right now in final stages to make sure the driving and everything feels great and polished. Yeah. That was my part. I hope you liked our lineup as well. Thank you for your attention.
Hello. Thank you very much, Reinhard. You are so humble. You were one of the co-founders, 2011, and I would say without you, we wouldn't have been sitting here. I'm not a game maker, neither a game developer. Together with Clemens in here, yeah. I would like to finish this day off with a bit about the future. I'm sorry we're running just a bit late. I'm trying to wrap up this part as soon as possible. I'd like to update you on our growth strategy going forward and coming back to the organic growth pillars we're having.
First of all, the asset care, the high margin, what you call in Swedish, "många bäckar små." I don't know the word in English, but just the return on investments of taking old code that is written off and porting to new platform, it is just a very good financial model. There is still a large amount of assets and IPs that we could provide asset care on. There is new platforms arising such as the Switch in the past year that there is a lot of asset care possibilities on. According to, as well as new deals such as the Nickelodeon. We have the partnership agenda. Obviously, that is another thing that could drive our growth.
Everything that goes from partner up with Asian partners to bring out our IPs in local markets such as China, Korea, Japan, on various formats, or placing our catalog and pipeline, as told you before, on this new platform that's arising on the market. Obviously, as Clemens and his team told you, it continue consolidating through partnership, the partner publishing market. For most, climb in the value chain of co-publishing together with Koch Media to get a bit of more owner economics in the publishing to invest more on a long-term basis with partners and to bring out their products. Obviously, we have the backbone of the business is to execute on our pipeline. Everything from the AAA to the sequel, to the asset care releases, and obviously all the publishing opportunities.
I know that Koch Media or Deep Silver, sorry, are looking at getting more than 700 products a year, and you're looking at 400 products a year. There is just a large number of publishing opportunities that could drive the organic growth, as long as Reinhard and his team, I know also are having their inboxes full of too many opportunities. Coming back to this development, I think that is still a bottleneck internally to find the right developers, especially linked to certain IPs. There sometimes is just one or just a few developers that are the best in the world, and sometimes you need to wait years, five, 10 years even, until they are ready to start developing a sequel or a spin-off or something.
I think finding the right devs and the teams to execute on this is one of the key missions for the teams. Putting on top of this, obviously, now integrating Koch Media, but there is a large amount of acquisitions opportunities both within THQ Nordic, Koch Media or from Central. I will come back to that on a separate slide, but that goes for IP, studios and publishers. I want to just give you a bit of more detail on the asset care strategy. I know most of you have seen this slide so many times, but again, it's a three-step process. We are acquiring the IP for X amount. We're expanding the distribution through either digital channels or physical channels where it's relevant.
Next step being doing some kind of upgrade to the code or doing portings into new platforms, taking a PlayStation 3 to PlayStation 4, doing a remastering or adding more content if it's relevant for the IP or product. Third, the last step that takes the most time, but also the most rewarding if you execute well, is obviously to create a sequel. I want to share you some deeper numbers of three of our key IPs within THQ Nordic. One being Darksiders that we acquired back in 2013 for a bit more than EUR 2 million. We invested EUR 33 million in develop or asset care amortization during the period up until 2017. The sales has been EUR 22 million with a gross profit of where net contribution after the amortization of EUR 16 million during the period. We still have the sequel to go or other potential projects.
MX, again, we acquired for EUR 600,000. The sales has been EUR 31 million during this four and a half years, and the net contribution on this has been EUR 20 million during these years. Finally, Titan Quest that we acquired also from THQ in the same transaction. I didn't have the money to be with the big guys as Klemens conducted, but in the second auction. We spent EUR 400,000 on this. So far We weren't able to pull up a lot of asset care in the beginning. 2016, we brought out the anniversary edition, which very improved Steam edition. Also through external parties, we have been doing mobile games. 2017, we made the DLC for the base game, the DLC called "Ragnarok," releasing in November 2017. During the whole process, we have had sales of EUR 4.3 million and net contribution after amortization of EUR 3.7 million.
Obviously, this is 99.6% margin because the physical part in this is lower. However, that is changing now in Q1 when we're having the console port out. Those numbers are not included here. This is just a bit brief of the asset care and the financials about it. Obviously, this is three good examples. I'm sure we're having example that is not that good. Overall, I think we see, in percentage, a very good return of investment on all asset care. Also slide of the market. I think the games market is still a very fragmented market with some key really big companies, 10, 15 of them that are way up here having a business they've been building over 30 years. There is nothing else.
We are approaching I'm not saying that we are going up there, I'm just saying that we are building something. Those big guys did consolidate this market, and they've been focusing on more internal business rather than M&A. They did their round of M&As 10, 15 years ago, I would say. Under us, there is a huge amount of smaller or local or independent studios or publishers that are really dependent on one development team or just a few development teams with a few IPs. I think there is a gap in valuation between being dependent on something and being very diversified with lots of IPs. I still see a lot of, obviously, opportunities on the market. This is a market where VCs and the PE funds is not really entering.
There has not been a lot of VC money into mobile gaming, browser gaming in Asia. In this hardcore console gaming market, that hasn't really been around because you actually need a setup in order to start having that kind of investments. That they have failed doing that in general. Proactive M&A agenda. This is one of the key topics I'm working on myself obviously. During the IPO, I told investors, "Okay, I have a long list of opportunities." There is a big list with big opportunities. I have to be fair to say Koch Media were one of them, but perhaps we weren't in the size. If you think about things over time, some opportunities arises and it matches.
Sometimes even people on that list doesn't really know that they should be, or it's more an idea sometimes why we are a better owner of something than themself. Obviously there's a huge list of other opportunities, I would say hundreds, smaller and mid-sized opportunities. I think this is the core of THQ Nordic and why it has been a good ride being a shareholder because we have been able to acquire businesses and grow the businesses to increase the profitability, but actually make transaction at what I call a reasonable price. That has been adding value to the shareholders. I see that we can continue over the next 25 years on that journey. I really believe, not only talking companies, but in what is companies, and really now having entrepreneurs on board and we're sharing the same values.
I think having the core values of actually how you run a business. You're honest. I really see people approaching us, and they value us rather than being in this huge American or Chinese corporations, and they're just way down here than actually joining THQ Nordic. They actually could be part of it, and we let them do what they like and what they're really good at, building trust between us. I've been doing a slide here what opportunities we see, obviously development studios. I sometimes get asked, "Why don't you having this recurring income, Lars?" Well, we have a few IPs with recurring incomes with in-game purchase, MX being one. Yes, that's correct.
We don't have Fortnite. I'd love to have Fortnite. We don't have Fortnite. I see, obviously, if I have the opportunity and if the transaction was at the right terms with the right team, obviously, it would give us a better balance in the group having more products that also has more recurring or stickiness to the consumer base. However, I have to say, though, if other people just are rushing into the corner of just having recurrings or having a Fortnite and battle royale, it leaves opportunities for us to stay at the right, reasonable transaction levels on the more classic side. This is a complex thing. I don't want to give promises.
I see the market, how it goes, but it's not necessarily the best deal for the shareholders, nor to make transaction at crazy valuations. Obviously, complementing development studios, either within THQ Nordic, in Vienna, Koch Media, or even on group level, could obviously be adding value with or without IPs. I could see publisher or assets with hard synergies. More cost-cutting cases, adding catalogs or adding their IPs or what we're really bringing in cash flow. Obviously, that would be a valuable or potential synergy either in within THQ Nordic or Koch Media. At the same time, further down here, we have companies that add markets, for example, publishers or niches or knowledge that we are lacking internally.
There is still a lot of publishing that we are not really either involved in or good at, or niches we don't focus on. I don't want to limit this too much, but I could see companies that add markets, niches, and knowledge could go not only within the companies, but also on the group level. Obviously, further IP deals, that's something that are daily bread and butter for Reinhard and his team in Vienna. I'm sure there will be more IPs, both small and larger ones over the coming years. Finally, I could see within Koch Media, adding some non-digital assets could give a great leverage. Could be game peripherals, accessories, headsets or whatever, that adding brands and products into the Koch Media partner publishing business. Or it could be merchandise, for example, could be retro gaming consoles.
Been discussing a lot with my financial advisors, put the target here, Lars, but I managed to get a small, just small medium wording out. Small, medium within THQ Nordic, within Koch Media. On group level, if we're adding a third pillar or a large transaction within their group that cash or investment needs to come from the mother company. Also I would like to answer a bit or give some color on all these IPs. What are you doing with all these IPs? Well, now I prepared a slide saying, okay, what IPs do you see potential in doing either a sequel or a spinoff? Don't take this slide as we have projects ongoing. However, it could be. But we have over 100 IPs within the group now, and obviously, a few of those IPs, some of them are not worth doing anything.
It's just a back catalog, small cash flow. Some are worth doing asset care on. But a few of them here are the top one, I wouldn't say it's limited to 12. It's probably more, but here is 12 examples of IPs we can do sequels or spinoff on. A few of them are on already. Darksiders, obviously, we have Darksiders III, but it's obviously further potential in Darksiders. In order to save a bit of time here, I'm not talking these IPs through. But I think most of you have seen a few of them before. Last slide here, a bit of future financing of the group. First of all, I really believe this is a high-risk industry.
You can see that from Koch Media last year, they had an impairment of Agents of Mayhem. If you do big development projects, there is always the risk of the product is not hitting the expectations, and you will have an impairment. So far, we have been lucky. We have product releases that has been performing perhaps below our expectations, but if you are diversified, you also have higher above expectations. I think it's also principle of myself, because the history goes back for 25 years. How I've been making money is really of other people failing or having lots of loans. Putting myself or ourselves in that position, having loans above what you are comfortable with would be kind of against the principles. Conservative view of debt usage within the group.
We will maintain a strong balance sheet to maximize the flexibility for organic and inorganic growth opportunity. The group will operate with a gross debt with optimal mix of short and long-term financing to manage seasonal working capital swings and general investment needs. Currently in negotiations, as we announced at February 14, regarding refinancing of existing loans at THQ Nordic AB, including EUR 60 million debt due in August 2018 relating to the Koch Media acquisition. Finally, I would like to state that Koch Media is a self-funded, profitable business with their own banks relations. Talking M&As, I could see smaller acquisitions with being then financed from cash flow from operations or additional debt and/or equity if deal terms are perceived to be value for the shareholders. Hopefully within the hour, we will have a mandate.
At least I will vote for it, to authorize to issue up to maximum 20% in new shares that could be used for M&A purposes. Dividends, I would like to say, over the years, I've made my own money that I have myself in dividends. I have nothing against the dividends. However, I think as long as we see potentials to invest into the business, I think it's better for shareholders that profits and cash flows to be reinvested into the business. That's the financing part, and that slide actually are finishing this Capital Market Day. Thank you very much for coming here. We will now have a short coffee break and registration for AGM. We will try to get the AGM in a reasonable timeframe, and then we will have food and drinks and everything out here. Please stay along. Thank you very much.