M&A announcement

Feb 3, 2021

Hello, welcome to this presentation of Embracer Group's acquisition of Aspyr Media. We will start with a presentation of the company from the founders, Michael and Ted, and I will come back for a Q&A. Please remember that you can ask questions in the chat box or by email. You should have the details in the invite. I will start off with leaving over to Embracer Group CEO and founder, Lars Wingefors, for a brief introduction. Thank you, Oscar, and hello and welcome everyone, and especially a warm welcome to Ted and Michael from Texas. Really excited to have you on board finally. It has been a very pleasant journey, I heard from Matt. I am eager to hear you on stage very soon. I think we will start off with a movie. I will leave over to After joining the Embracer Group family in early 2020, Saber Interactive acquired seven game development studios, adding them to our five internal ones. We now have over 1,400 people actively developing games for all major platforms. With a diverse portfolio of exciting content, we are marching forward with a vision of building a cost-effective, yet quality-driven developer and publisher. Saber is expanding rapidly, but we have the management in place to handle the growth. Our plan is not only to create original IP, but also to develop titles based on the vast library of games within the Embracer Group. As part of our expansion into the U.S., Saber is proud to announce our latest acquisition, one of the industry's most established and respected companies, Aspyr. Ted Staloch and Michael Rogers founded Aspyr in 1996 to bring the most celebrated games to new audiences. Since then, they have developed and published almost 200 games, working on properties like Star Wars, Civilization, The Sims, Call of Duty, and Borderlands. Aspyr has long held business development relationships with 11 of the 15 world's largest video game publishers. To bring their partners' games to the market faster, they have developed a proprietary technology called Aspyr Studio Libraries that helps reduce port times by 75%. Based in Austin, Texas, Aspyr is 140-plus people and growing. For the last fiscal year, they earned over $40 million in revenues and generated an EBIT of close to $12 million. Let us hear a bit more from Ted and Michael. Aspyr's vision is to create games celebrated across the universe, and that is why we are so excited to be part of Saber and Embracer Group. The horsepower behind Saber Interactive's resources with the talent at Aspyr is a match made in heaven. Relationship is one of our core values, and we try to have long-term relationships. The way that works is by building trust. We did business with Lars, I think maybe 15 or more years ago. Always running into the people that are in Embracer Group at trade shows and do business with some of those groups today. It really has felt comfortable the whole way through. We are excited about the future. We have some wonderful, amazing content in our pipeline that we cannot wait to get out there. The truth is, this is an exciting time in the game industry, an exciting time for Aspyr and Embracer. We cannot wait to get started. We are thrilled to add Aspyr to our roster of incredible studios, not only because of its great relationships in the industry, but also thanks to its quarter of a century of publishing experience. Aspyr will not only continue with its publishing business, but is currently working on a triple-A licensed game that will become a tent-pole product, not just for Saber, but for the group as a whole. With THQ Nordic's Gunfire Games, also based in Austin, Embracer now has established a significant presence in one of America's great technology hubs. Just a brief additional update on Saber's acquisitions to date. We spent the past nine months developing infrastructure to support the additional studios that we have added to the company, on both the management and financial integration side. We are happy to report that all studios are working full steam ahead on new games or supporting existing projects and have been fully integrated into the group. We have studios working on new IP, others creating games based on major licenses, and yet others bringing great Embracer content to new platforms, similar to what we did with Witcher 3 for the Nintendo Switch. Our acquisition strategy is laser-focused on adding the right business partners that share our vision of growth through a diverse portfolio of great products. In a market where content is king, having multiple teams working on cost-effective, high-quality content is the best way to secure our place as a world leader in game development and publishing. By focusing on a large portfolio of games, we never rely on any one product to ensure our profitability. Thank you for your interest in Saber and Embracer, and help us in welcoming Ted and Michael to the family. Are we supposed to raise? Thank you. Thank you, Lars. Hi, Matt, thank you. I'm Ted Staloch. Michael and I started Aspyr about 25 years ago, and we can share with you a few things. Our senior team, we have Ryan Anson, Anabel, Daniel, and Dan Craig. I think it could be interesting to start with our vision. Aspyr's vision is creating games celebrated across the universe. We lean super heavy on our values. I think what you'll see throughout this presentation is specifically around longevity, quality, trust, and relationship, and of course, profitability. Michael, do you have more that you want to talk about on this front? Really, that we try to make all of our decisions, we try to treat each other internally and all of our partners in alignment with the values. Honestly, it's one of the reasons why this fit made a lot of sense to us with Embracer. A lot of lining up with the values that we work with inside the company, outside the company, and it's clear that they share similar values. Wonderful. It made this whole thing easy. Yep. I will just add in one thing here real quickly, if you guys don't mind. For me, Aspyr is one of the longest-standing game developers. I was going to say independent, but I guess I cannot say that anymore. One of the longest-standing game developers in existence, and I am super excited to be able to be partnering with a company that, in my opinion, is really legendary in the industry for innovation and for their creativity when it comes to business. Ted and Michael, in particular, are just amazing entrepreneurs. What they have done is similar in many respects to what I think Andrey and I did with Saber was we identified opportunities where other people did not see them, and we exploited those opportunities to make gains and to make profit. For me, the number one thing that I was looking for was to find people that I could genuinely look at as partners. I also looked far and wide to find founders of a company that were better looking than me. It took me a long time, but I was able to do that, thank God. Now I no longer have to wear that mantle anymore. So thank you guys for that at a minimum. Yeah. Thank you, Matt. Onto the next part here. I think that trusted business development relationships is something that maybe Aspyr and Saber share so many relationships. When I think about that, I think about 2K and Microsoft, Sony, Nintendo. Then I think there might be some that we can have some offsetting and perhaps we can bring new relationships. I think some of those relationships could be Apple, Google, and some of the other hardware companies that Saber has done less business with, but we will more in the future. Aspyr, again, started 25 years ago and primarily started on the Apple platform and became a premier developer two decades ago with Apple. We are excited to share that relationship throughout Saber and all of Embracer. Yeah, you guys have amazing relationships. Amazing. The relationships you guys have established are second to none in the industry, and I cannot wait to take advantage of the new platforms and new opportunities that you're going to present. I know we're supposed to wait until we close to actually doing a lot of this stuff. We're going to be doing a lot of talking until we close, and then a lot of doing the minute we do. Awesome. Yeah. As mentioned, we're in Austin, Texas, and Austin is trending, I think not just in Texas or the U.S., but perhaps in the world. Full of talent. We have 140 people in our studio in Austin, and looking to grow, and looking to grow through the talent that Austin brings. Go ahead, Michael. Yeah, I was just going to echo what Matt said, that the two companies between Saber and Aspyr had a similar approach to the marketplace. It really is about finding partnerships. It's about executing. It's about trying to over-deliver, see where the opportunities are in this space, and with each deal, every deal needs to make sense, right? Everything that we've done when we're talking about business development, we have a similar outlook on what opportunities make sense for our companies to pursue. The other piece that I'll say is Saber brings an enormous amount of team and resources to the vision, the ambitions that we've always had as a company. But because we've been founder-led, founder-run, have sort of lacked some of that access to resources. There's more than we've been able to tackle on our own, and this partnership opportunity with Saber and Embracer really gives us a chance to pursue those opportunities. It's super exciting. Okay. I think that's very well said, Michael. One thing I'll say in general about the acquisitions that we've done, and how this kind of marriage of independent teams is really beneficial, is that a lot of times independent studios are head down, focused on what they need to do to generate cash for the next year and on the short-term business play. Obviously, we don't want to give that up, and it's not our intention to give that up. At Saber and our other studios, we haven't given that up either. But really, this is an opportunity for you guys as founders to take a deep breath and say, "Hey, listen, these are the things we know we could do. These are where the big revenue opportunities are, and we're going to go for them." With Saber's resources, you can keep that core business just chugging along and doing great. Look, we've already discussed this. We can't disclose it, but those are the plans that we have precisely, which is you guys have had an amazing career. You've built a business which has supported yourselves very well and your families and the families of your employees for so many years. But really, this is all about what we can do in the future to substantially grow your company, and to allow you, who are the leaders, to focus on this. I'm 100% certain we're going to do it. I think Lars is going to fall asleep if we stay on one slide the whole time, so we should probably go on to the next one. Absolutely. Yes. Let's give some 25 years of titles we've worked on. We've been very fortunate to work with some of the biggest licenses in the games industry, and quite honestly, in entertainment. We've also gotten a chance to work with some great studios that have helped us with best practices around process and quality and control, community, et cetera. We can highlight a few. Tomb Raider, Stubbs the Zombie is one of our favorites, back in 2006. Of course, Civilization and The Sims and Call of Duty, and you can see peppered in here for almost 20 years also are a bunch of Star Wars games, which we love to be around that brand. I think, Ted, it would be helpful for shareholders and other parties to just understand at least your historical business model that you have been working together with publisher or licensing established games or IPs and porting them from the beginning, Macintosh for Apple, and then in recent years, to many other platforms. That's right. Yep. So- Thank you. Just to be clear, you haven't developed Sims 2 or Call of Duty, but you have worked with historically done Activision to put that on the Mac. Yep. That's a great Very successful. Great clarify. It's important to be very clear sometimes for shareholders. Yeah, great clarifying point. Sorry. With that, to Lars' point, starting off on taking very successful games on the PC, Call of Duty as an example, Aspyr does not own or make Call of Duty. The great people at Activision do. Aspyr licenses, develops, and publishes underneath the umbrella business that we do with, in this case, Activision and Call of Duty. So we take the source code, we port it or convert it to target platform. In the case I just gave, it is taken from PC to the Mac platform, and then we are the publisher on record, which allows us to take care of the customer. If there are updates needed to the game, we do that. But also, if there is customer service or other needs that the customer might have, we enjoy having that direct relationship with customer as a publisher. The business model with that is quite easy. It is a licensing model where Aspyr handles from start to finish the entire process and cost of that process and pays royalties to the licensing. In this case, we pay royalties back to Activision for that game. I think it is worth adding here, Ted, what you guys have done is actually remarkable because you have been able to acquire and license and publish the crown jewels of some of the publishing partners that you have worked with, which is incredibly hard to do. To be able to get the trust of those publishers to get their source code, to take what they consider to be the keys to their kingdom, and to bring them over to other platforms and to have that level of trust is something which is unheard of. It is something we struggled with for many years at Saber. The fact that you have been able to do that is amazing. It has been a great core business for you. But I would emphasize, obviously, that is just a part of what you guys do. It is something that I think we will continue to do utilizing not only internal resources at Aspyr, but some of the resources that we have in some of our other studios. With the 1,500-plus people we have within the Saber group now and potentially outside of the Saber group and into the larger Embracer Group. So I think your business model is incredible. I think, like I have mentioned before, you guys found an opportunity that the big boys were not exploiting, and you turned it into a real business, which has led you to where you are today. Yeah. Thanks, Matt. I think we're aligned with these licenses and these big boys is around quality. To take these great licenses and games and match their quality on other platforms is why we've been able to be successful for 25 years. It's also about the players. We love taking care of the players just like our partners do on the other platforms. When you have that alignment and it's seamless, then seemingly you can continue doing that. Yeah. Like with- We're going to be publishing. Good. We have plenty of room. Absolutely. I think that to Lars' point, basically how we started this company has been about relationships, and it continues to be today. We will meet with the biggest companies in the games space if they're developers or publishers or retail partners, and try to understand what their approach is to the marketplace and see where opportunities are. While our rights to these titles are all a license for the particular platform and all of that, to Matt's point, we're able to do more and more. We've grown our capabilities across different platforms, the ability to publish for Sony, for Nintendo, for Microsoft, and really work with these different brands on different platforms where the opportunity is presented. It's a really fun business model. It allows us to have these marquee brands in our lineup. We're honored that they choose to trust us with it. We do our best every day to over-deliver for our customers as well. That's brought us to where we are today, but we have a whole lot more in store. We're building out our own internal studio, working on some projects under our own development team, and it's a great natural progression from where we've been to where we are today. It's a super exciting time. Yeah. This slide is really talking about just Aspyr as the holistic approach from development through publishing. Part of how we pick the publishing products is maybe this top bar. First and foremost, looking at insights, business intelligence, brand and license awareness, and we have a full-fledged certified publishing arm at Aspyr, everything from Sony, Nintendo, Apple, Google, Microsoft, et cetera. So it's a holistic approach, and Matt, we would love to have more Saber content into our publishing arm. Well, it'll be not just Saber, it'll be, in some cases, Embracer content. Absolutely. One of the things that we've been able to do since we joined the group is to reach out to other divisions within the group, THQ and Koch, for example, and talk to them about bringing their products over to new platforms because we see opportunity. That is what we are currently doing. We are bringing those products over to different platforms. We are exploring new Embracer IP that we think would be perfect. You guys have been doing this for a quarter of a century. You have a better perspective on how to do this than anybody. We may have the technical skills to be able to pull this off and pull this off at a price that maybe others can't. With your help, I believe we will be able to significantly expand that business. One of the things that I have noticed is that Embracer is basically a goldmine for content, and we need to do a better and more comprehensive job of mining that content. Not just that, I also see opportunity just given your ability to find licenses and relationships outside of the group. We also, I do not know if this was ever mentioned, we added a new licensing specialist who has been helping us and other studios within the group, Josh Austin, who is formerly of Konnow, with those licensing types of things. I think there is going to be plenty of opportunity for Aspyr to lead the porting of content over to platforms where they currently are not in place and to go out and find new ones. I am super excited about it, and Lars always thinks I am too excited about everything. I am always supposed to undersell, but I always tell Lars, I did do my 23andMe where you check your like, I am apparently a half percent Swedish, so I should have had some of that modesty, but apparently it did not filter down to that half percent. Anyway, let us move on. Yeah. Well, absolutely. I think the takeaway on publishing is we love to maximize the potential of the game. Sometimes that potential just needs to be on more platforms to reach a more global audience, and that is really what we have loved doing, and we cannot wait to look at more content from Embracer. Yeah. Look, one thing we can say is we know that the best way to make games and the least risky path toward success is to have a wide portfolio of products on a wide portfolio of platforms. This is just all about that. Great. Yeah. This slide is after we talked about the publishing arm. It is really the studio. To Michael's point earlier, we have a full-fledged studio in Austin, Texas, and some partners throughout the rest of the world. It is around everything from engineering to creative leadership to, as mentioned, quality assurance, and that all feeds into our publishing arm. Michael, are there some more points here you want to cover? Well, I think our Aspyr Studio Libraries are sort of our secret ingredient that we use to do the work that we do. It sort of allows us to leverage the knowledge and skills of our engineers and push that across different platforms. Our technology doesn't really care so much what platform A is and platform B. It handles a lot of the heavy lifting and the translation work. Of course, we are really dependent on having skilled engineers doing that work, but the Aspyr Studio Libraries can cut any of the conversion costs that we have going from different platforms. I think we said in the presentation, up to 75%. It is really amazing, and it is a super useful tool that we use in virtually every one of our projects. Great. Maybe we will just talk a little bit about different projects we have. I think one of the things we love at Aspyr. Should we jump to the next slide? Should we jump to the next slide, so people don't fall asleep looking at the timeline? Yeah. This one right here? Okay. Yeah. Sorry, I can't decide if. It's all right. Do you want to talk through this one, Matt? Whatever you want. It doesn't matter. I just want to make sure that Yeah. I think this is the last slide that we have, and this is just a bit of us talking about different size projects. One thing at Aspyr we love is momentum. So these small 6 to 12-month projects, a lot of these are porting projects. It's great to be able to get out a new game, a new product. Almost every month we ship something at Aspyr. Then, as you can see, we also have some medium 12 to 24 months and then, of course, some games that just take quite a while to bake. So I think this is really a slide just representing diversity in project size and project scope. Yeah. Now with the larger projects, I'm just going to end. Sorry, Michael. I'm quick to cut people off. I apologize. With the larger projects, the plan is for us to work together on those larger projects to make sure that you have the resources you need for some of the AAA types of things that are currently under development within the studio, and to use the expertise that some of our other studios have to help you with those things. We're looking at this in many respects as kind of like an information and a technique-sharing exercise where we are going to learn a lot from you guys about how to handle some of these smaller projects so we can bring other Embracer product over to platforms where it currently doesn't exist. On the larger stuff, Saber, that's where our bread and butter is, and we're going to work with you to make sure that the AAA things that you have in development are best in class. I'm super excited about that as well. Now, Michael, I promise I will not interrupt again. The only point I was going to make is that some of these projects that we classify as small might be a handful of people working on them. The amount of time and the amount of investment doesn't always correlate exactly to the opportunity. Just because it's a small, quick turnaround, it could be a title that one of our better in the lineup. This is how we sort of approach the costing and resource structure for each one of the titles to understand the opportunity analysis and how quickly we can get to breakeven, and how likely is it that we can maximize the sales of a title. Just sort of a bit of a look to our internal process and how we make decisions. Great. I think that's our last slide. I think we have the transactions slide. Yep. Yeah. That's probably more Lars, isn't it? Lars is like, "This is what keeps Lars. This is like Lars' food." Thank you. Thank you, Athnas. Again, it is an honor having you within the family and Aspyr, as you mentioned in the video. I remember dealing with you years back, and I have always been impressed of your entrepreneurship. For me, you are great entrepreneurs, know how to run a business, and to make a business. You are great people and great humans that I respect a lot. It is just honor to have you within the group. I think that is a really good way to go. Yeah. Thanks for the honors, Lars. Looking at the transaction. I have to take the boring stuff, because we are a public company, and this is very important, obviously. Just looking at the actual transaction. Matt, you did a lot of this, but I need to just summarize it here that the upfront purchase price is $100 million, where around $60 million is paid in cash and $40 million is paid in shares. So you become shareholders of Embracer, and the company will be acquired when closing from the two of you. Then we have a very long-term alignment. You can define this earn-out or additional consideration or incentive, where we have one earn-out tranche which is $25 million, depending on you staying on and there is a few commercial products to be released. Then there is the big thing, if you are really kicking the next level of Aspyr over the coming seven years, and you have some good things going on. So based on that, we have a payable earn-out of the accumulated EBIT in excess of $70 million threshold. That is measured over a seven years period, and 40% goes to you. If you are to pay the maximum earn-out, which is $375 million, accumulated EBIT has to be approximately $961 million. So that is the actual transaction terms. The financial performance you saw in the video. You are a very profitable business, and very stable. Now you have ambitious plans for the future, which we like. But last year you made about $40 million in revenue with about $11 million in what we define as operational EBIT. And the post deal structures legally is, you will be part of the Saber Interactive group, but you will remain independent, obviously. I know Matt and the team around Matt has a lot of respect for what you're building and what you have built so far. With that said, I would like to leave it over to Oscar. Thank you, Lars. Let's begin with the Q&A session, and I will start with a few questions. Please remember that you can ask questions in the chat box or via the email address that was provided in the invite to this press conference. Starting off with some questions to Michael and Ted. Starting from the beginning a bit, I think I know you guys from your work on the Civilization franchise, for sure. Some might know you from the Star Wars IP. Just describe what are your largest gains and revenue drivers, for that matter, in the past 5-10 years. Remember, before you answering, Jens Andreas, that you are with big business partners, and I think we should be careful to disclose too much details of your operational business to protect your business partners. But feel free to mention a few of your key IPs, but- You should do exactly what I do. Just do just enough to get Lars nervous and then back off. Yeah. I think the question answered, those two properties have been great for Aspyr for the last five, six, seven years. Civilization is a really good example where Aspyr, just like Saber, has a great relationship with 2K, and Firaxis made an amazing game on the PC in Civilization VI. Aspyr was able to license, develop, and publish, not just for one platform, for the Mac, but we were able to do that for several platforms. In fact, we developed that game on six or seven different platforms. Some of those platforms, Aspyr was the publishing partner, and some of the platforms, 2K was the publishing partner. But that's a really good example of maximizing the potential of an amazing game and going much, much wider to a global audience. Excellent. Just to clarify, when you license IP and you develop the game, does the sort of financing of the games also correlate to if you are the publisher or not on the respective platforms? Yeah. So our typical arrangement is that we're licensing the intellectual property from our partner, and we will undertake all of the development. So our team will convert the property to whatever the target platform is, and then we will do the sales, marketing, support, everything for that, and then pay a royalty to our partner, whoever they are. So we are taking on the risk of development and the risk of the future royalty obligations. But the great thing about our business model is we get to understand the value of these brands, the value of the potential marketplace that we're licensing to. So it's a really methodical approach. The benefit for our partners is some of these platforms, some of these opportunities might not be something that they're looking for at the time. They don't want to distract their team or their priorities are elsewhere. That way they can reach into this new marketplace and receive a royalty. So it's really a win-win relationship for us and our partners, and of course, our customers get to enjoy some of the best games in the industry. Yeah. I can add, these guys have been exposed to more source code than basically any other team on the planet. They are experts in taking games that they may never even seen before and quickly doing some magic on them, primarily just because they have 25-plus years of experience in doing this, which is one of the reasons I think they are going to be such an invaluable asset to all of the studios within the group. Excellent. Very clear. A follow-up to that, internally developed IPs, what level of focus have you had on that, if any, historically? What do you see going forward also after joining, of course, Embracer Group? Yeah, I will start off by just saying this is really where we are so excited to be part of Saber Interactive. They have this depth of resources, this knowledge, and this scale beyond anything that we could build quickly. They have been doing it for a long time with best practices of high quality output of some big, huge brands and licenses. As Aspyr is moving towards that beat, we are really excited to share that with Saber and learn from Saber. In terms of, to answer your question more directly, though, I think, not that you did not answer it beautifully, Ted, but just to supplement that, I would say these guys are capable of doing anything. They are capable of doing original IPs. They are capable of taking existing property and porting it. Right now, the focus is on two different things. One of the focuses is going to be on to continue their core business because it has been so successful for them to expand that core business utilizing external resources so that we can get those numbers even higher and we can get more product out to market. They also have some big internal projects that we cannot really discuss right now that are based off of IP but that set us up well for doing additional new, big product. Whether it is going to be independent or IP-based depends upon the creative decisions that we make because the team is capable of doing both. But right now, the focus is on licensed IP. I think there is a real opportunity in the market for that. I think we proved that with World War Z, where we took a licensed IP and we just did wonders with it, and it is still selling in great numbers. These guys have access to IP, which is substantially more wide-reaching than that. Without saying more, I just heard Lars clear his throat. So I think we got a big future ahead of us on not only the core business but on future things as well. I promise I will not say anything else. Great. Lars seems to be relatively satisfied, Matt. It is rare for me to make him happy. Yeah. Here, I will test his patience a bit. Just very broadly, if you could shed some light on the revenue mix that you have between different revenue streams in terms of work for hire, and other type of revenue streams that you could have. Very broadly, no actual numbers, but just very broadly would be great. Yeah. One of the things we do at Aspyr is we have a term called quality revenues, and that quality of revenues is really this diversified mix based on license and based on platform. We don't want to over-index any platform or specific game more than 40% for our total revenues, and we've been able to manage that mix quite well over the last decade or more. The other part to that is work for hire revenue, or we call it co-production revenue, is a pretty small portion of our overall business. It's another one of those synergies we've seen with Saber Interactive as well. The vast majority of our revenue is really publishing driven, and we just haven't had the experience and the understanding of how to be successful in that work for hire space, and obviously Matt and Saber have done such a great job with that. It's another opportunity for synergy. We see opportunities for that all the time, but we've always avoided that and looked for more opportunities in the publishing realm. I looked at your numbers, and you have a very diverse revenue stream. You have a lot of what you say SKUs or lines of revenues on lots of platforms. I think you have a good stability there. Obviously, you need to add more products all the time, but you have legacy products that goes way back. Yeah, that's true. I think if you could look under the hood like Lars has done, you'd see a lot of different titles that are still active in our month-by-month sales. Some of those games are 10, 15 years old. It has a lot to do with the staying power of some of these brands, obviously the quality of the games, and our desire to keep on reaching those customers wherever they are. That stability in our product line really comes from each title by title, month by month, contributing that and finding new customers. It is a great piece of our business model. Great. Thank you for the answers there, all of you. My next question is to Lars because I think it will be a sensitive question to answer, is my impression, but it relates to the ongoing project with a budget of $70 million. Is it possible to provide just some sort of flavor on this in terms of, is it an external IP? Is it externally financed? What-- I think we gave a disclosure on this because you noticed the earn-out, and you noticed the structure of the deal. In order to answer why we had that construction, I think we want to give some light on the opportunity. I think we said in the press release, and the presentation here, there is one game or a game development project of $70 million in budget, approximately. I think just saying that number says something. I do not think we need to add flavor what that could be. I think the time will come when the company or whomever it is talking about that. But obviously the business plan and Ted, and Michael, and Matt here, they really obviously are excited about that, and I am excited, so- You asked the right person. Clearly. No, that was good. I think people can draw their own conclusions a bit on the answer there and the earn-out. Going back to you, Michael and Ted, my next question refers to Embracer's and Saber's IP portfolios. How much was that the consideration in joining the group, and what do you see in terms of IP synergies? Yeah, that's a great question. It's the jewel. There's 200 IPs to look at and studios to talk to about their games and other ways for us to provide a larger global reach on various platforms and services. That really is, I think, part of what maybe Matt alluded to earlier is day one, we need to start looking at all these opportunities and help wherever we can as a developer or publishing partner for that. We are absolutely thrilled with the significant content that's available, both in amount and in quality. Yeah, I was going to say one thing about that generally. One of the questions that I get asked a lot about the group since I've joined is, "Well, I know that you're a highly decentralized group with highly decentralized functions and independent studios that are running." That's absolutely the case, because that's the way we think our business is run best. The nice thing about bringing on teams like Aspyr is that we're able to go out and find some of those synergies. The ones that I was pushing a year ago when I joined the group, these guys are perfect to continue to push those. We're seeing those opportunities, and while Klemens doesn't need my help to run Koch, and the other Klemens doesn't need my help to run THQ, and Anton doesn't need my help either to run Coffee Stain, we can certainly find ways to work together to fill holes in their revenue portfolios and their revenues. That's what we're doing, and Michael and Ted are like the world's foremost experts at that. I fully anticipate that there's going to be tremendous opportunity for us to take products from the various studios within Embracer and to bring those products to life on new platforms where there's definitely going to be additional revenue. Like Michael was probably correctly saying, my old agent, Clyde Grossman, used to say royalties are the gift that keep on giving, right? Once you put one of those products into a store, it'll keep generating revenue while you can go and focus on other things. We're going to make a real concerted effort to bring a lot of those products over, and to identify new opportunities with new products that are currently under development. I know I'm supplementing what Ted and Michael said, but I wanted to just emphasize the fact that that is a real focus for us. While we keep Embracer decentralized, which is the vision that Lars has basically set up as almost a mission statement for the company, we are leveraging each other in ways to generate additional revenue. Great. The follow-up to you, Matt. In the group, looking at the IPs in the portfolio, what are some of the key platforms you see? You mentioned a big opportunity in porting titles in the group. Well, look, without mentioning specifics, we have games by certain studios that are PC-only that really need to be brought over to console, and they will. We have games that are on console that aren't on Switch. Saber's got tremendous experience with the Switch. We did The Witcher on the Switch, and we've done actually, I don't want to speak out of turn, but we've done, I don't know, two dozen or so games on the Switch, which probably puts us towards the top of studios who have done Switch games. I think there's plenty of opportunity on the Switch. Now there are new platforms, right? That require attention, and studios don't necessarily have the resource to go to the PlayStation 5 or the new Xbox. There's also things like the Epic Games Store, where there needs to maybe be a cross-play component with Steam and the studios that don't have the capability or the resources or the time to do that. When you look at the numbers, it may cost you a small amount of money for a very, very good return. Now, Michael and Ted have made their living on, "Hey, let's take something that may cost us a couple hundred thousand dollars and make a million dollars out of it," right? Those opportunities are great opportunities, especially if they come in scale, and they don't consume a lot of resources to do. We're going to continue to explore those. As you've seen, there are new platforms popping up every day, and unfortunately some seem to be slowing down or disappearing, but there's always new platforms as well, right? Amazon is a perfect example of a new platform that's come out that needs attention. We're 100% going to explore all of those opportunities, and these guys know which ones make sense. We're going to lean heavily on their skill set and their 25-years plus of experience in order to achieve that. Excellent. Looking at the questions from the audience here, I will start with a question from Chirag Vadhia from HSBC. I hope I pronounced the name correctly there. Regarding licensed IP, this was once a notable part of the former THQ Inc. business. How do you see the trends of licensed IP going forward in the context of its past? I guess this is a question to all of you, really, but perhaps, you want to start, Michael and Ted? Yeah, I can start with some of the past experiences, specific to licenses where THQ in the past and others have worked on has been maybe event-based, around a specific movie or a specific show. I think what we are seeing with licenses is it can stand alone outside of an event. You do not need to have a movie as a tent pole. The game itself has become the tent pole. For us, we are really putting that first and foremost, based on quality and the attention to the game driving the awareness. I can supplement that question also. We think there is a huge opportunity in licensed IP. One of the nice things about licensed IP is that it gives you a head start in marketing a game. There is already brand awareness. You do not have to start a new product from scratch. When Saber picked up World War Z, we were able to get World War Z at a very competitive price. The reason was because the bigger players had shied away from IP because they had been overspending on it, and they were putting lesser quality teams on developing the product, and the end result was you have a licensed IP that had the reputation as being inferior generally. The big publishers were shying away from it, and we looked at that as an opportunity, much in the way that Ted and Michael look at the opportunities they see to take bigger games and put them on smaller platforms. Licensed IP is a big part of what we are going to be doing moving forward. There is no question about it. If there is an IP worth hundreds of millions of dollars, which is already out there and the whole world knows about it, and you know you could make a good game based on it, then it would seem foolish not to do that if you have the resources to do so, especially if you have a game design which you think will basically match that IP and does not feel like it is forced. For us, independent new IP and licensed IP are equally important to Saber. I would say they've probably been the bread and butter of Ted and Michael for a very long time and will be for the considerable future. We're looking at every opportunity, whether it's licensed or whether it's a new IP, and we're going to explore everything, anything that makes sense for a team and at a particular product idea. I think it's worth mentioning one of the most scarce resources, obviously, for us as well as for everyone else, is talent and development resources. Even though there is always more opportunities than there is to develop great development resources. You can manage that by having experience, you can have systems and technology, but somehow you need to make a few calls, commercially, but also from a human or from a development building a great game. So, it's a delicate question, which I hear, not every day, but very often. There is so much opportunity, but there's always this scarce resource, and I guess that's why, Matt, you've been on this You've been adding a lot of great resources the past year. Yes. I'm sure you'll be continue adding more. Yes. Resources are always the key, right? When you find a good resource that you can lock up and make part of the group, it's really the only way to proceed, because if you work with a team and you have a resource, and then the resource goes and signs with somebody else, you've lost a resource that you maybe have worked with closely and trained in your ways of doing things for a long time. For us, that's been a core part of what we've been doing. I know this is kind of a segue out of the IP and into the resource question, which wasn't even asked, by the way, but we'll answer it. What I would say is, from Saber's perspective, every resource that we've acquired is already busier than they should be, including the resource that we haven't yet acquired, but we signed with about six hours ago. We're going to keep acquiring resources. We're going to keep finding talent, and then we're going to match it with the right project, whether it's a new IP or whether it's established IP. One last thing I'll say about IP really quickly is, I remember hearing from publishers for years, "Oh, you have to own your own IP. You have to own your own IP." I don't subscribe to that philosophy. I think if you have a long-term relationship with an IP holder and the rights to exploit a particular property, that's just as valuable as owning your own IP. Look at EA with FIFA and Madden, for example. They don't own FIFA, they don't own Madden, but they certainly have done a very good job of exploiting those IP over the last two decades. I think that there's a lot to be said for finding the right IP and the right team to work together to exploit that. That's what, by the way, Aspyr is doing right now. Obviously, we think it's important. Okay. Oskar, do you have any final questions for this conference call? Yes. Just one final question for Michael and Ted. This is quite a long-term commitment in terms of earn-outs and in terms of joining the group. What do you see ahead in terms of growth drivers? What are you most excited about with joining Embracer Group? From Aspyr or from an Embracer standpoint? Or how do you mean, Oskar? That was a question to Michael and Ted for Aspyr. Yeah, I'll let Michael go first. Yeah. Listen, I think for us, like we said at the very beginning here, and we've repeated throughout the presentation, resources are important. Having additional horsepower behind the engine that we're trying to drive is important. The team, the intellectual property, all of that Saber and Embracer bring to the capabilities that we have, to the ambitions that we have, it's really what made this a super easy decision. We're excited about the stuff that we have in our pipeline, but also, what this group, what this partnership can bring to life in the market. So it's very exciting. Great time in the games industry, great time to be with Saber and Embracer. Yeah, I would just echo that seven, 10 years, there's a lot of work to get done in the next decade. Lars has built an amazing company and platform that allows entrepreneurs to come in and continue, but to do it at scale. I think we're very fortunate to be in an industry that is over-indexing and performing throughout the world, and there's never been a better time to be in this industry and never been a better time for us to join Embracer Group. Great. Thank you. That's it from me. I know that we have a lot of questions on when Knights of the Old Republic 3 will come out and other sold supports, but I think I'll leave them, actually, for this presentation. Thank you for the answers. I'll leave it. Thank you, Oskar, and looking forward to speak to you soon again, Oskar. Thank you for joining this call, and very welcome again to the group, Ted and Michael. Thank you. Thank you all. Thank you.