Good morning, good morning, everyone, welcome to this presentation with Fragbite Group for the second quarter. My name is Marcus Teilman, and I'm the CEO of Fragbite Group. With me today, here in the studio, I have our CFO, Lars Johansson, and also later in the presentation, you will also hear our new CEO of Playdigious, Abrial Da Costa, present Playdigious business. Looking at the agenda, I will start off with some highlights of the second quarter and for the first half of 2023. After that, I will give you a little bit of a brief introduction to Fragbite Group. After that, we will move on to some operational update.
After that, I'll hand over to you, Lars, to present the financials, and after, after that, we will round off with the road ahead and also a Q&A session, where you will be able to ask some questions for us. All right, so let's move on. Let's start with the highlights of the second quarter and for the first half of 2023. Our net revenues grew from SEK 54.2 million to SEK 60.4 million here in the second quarter, 2023. The adjusted EBITDA went from minus 0.6 to a positive EBITDA of SEK 6.5 million.
Looking at the different business areas, we have seen a growth in the gaming area from SEK 48.5 million to SEK 52.7 million, and with a significantly improvement in profitability, due to the revenue mix in the gaming segment. The EBITDA or adjusted EBITDA grew from SEK 4.5 million to SEK 10.3 million. Esports has had less activity now during the first half of 2023. However, we have a lot of activities, and we will explain more about these activities now for the second half of 2023. The revenues amounted to SEK 1.4 million now in the second quarter of 2023, and a negative EBITDA of SEK 1.1 million.
Our Web3 business grew from SEK 1.5 million to SEK 6.4 million, with a positive EBITDA of SEK 2.2 million, up from a negative EBITDA for the same period last year of SEK 1.3 million. We have focused now in the second quarter this year on the NFT sale that we had in May this year, and also on the coming token sale. We have focused less on the third-party projects that we've had previously. Looking at the second quarter, what have we done? First of all, we have had several IPs for porting to mobile signed, and we will explain more about all these agreements that we've signed. Very exciting.
We have also announced a new publishing label for indie games on PC, that we've launched called Playdigious Originals. We've brought our mobile sports manager engine in-house, which is MMA Manager 2, we have just recently started to publish that game and market it ourselves. As I mentioned already, we've also done a successful NFT sale of Cosmocadia, we have also migrated the Panzerdogs Web3 game into a new blockchain called Sui. We have also, during the second quarter this year, sold two hyper-casual IPs. We've seen a dramatic decline in the top-line revenues, also the profitability has had a negative effect on that.
Most importantly to point out is that we have generated, or, or we have freed some internal resources to instead focus on our own IPs for marketing, such as MMA Manager 2 and also the Panzerdogs. We will come back to that later as well. We have also signed our main partners for the new season of Svenska Cupen that will, that will start now in the third quarter, with finals being played in the beginning of December. We have also increased our synergies across the group, most recently, also the in-house marketing of MMA Manager 2. For the ones of you who hasn't been listened to, to us before, who are we at Fragbite Group? Fragbite Group, what we do is that we are active on the markets of gaming, esports, and Web3.
What we do is that we develop, we adapt, and we publish games and esports content for traditional, but also on Web3 platforms. If we look at the markets that we're active on, if some people might actually don't know this, but if we look at gaming and esports together as a, as a market, it is actually a huge market. If we compare that to the movie, music, and video-on-demand industry together, combined, it's actually a larger market than all these three, music, movie, and video-on-demand industries combined. And that's something to consider, actually, because it's a really fragmented market, and we see a lot of opportunities here on, on, on this market as well.
However, Web3 is not included in the, in the market size for gaming and esports, and it's still such a young industry, that we will also-- well, we have already gained traction in. We see a lot of opportunities going forward as well, and especially to combine all these three markets, because we see that the underlying trends is that all these three markets are converging. Also, like I mentioned, these three markets: gaming, esports, and Web3, we also see that the young generation is searching for entertainment in these three markets. They play games, they watch others play games, and they participate in the creation and the financial ecosystem of the games.
These three pillars within, within the gaming entertainment industry is key for us, and we see a lot of opportunity, opportunities, as, as I said. Looking at our strengths, first of all, we have a unique market position by leveraging and combining all these three markets: gaming, esports, and Web3. We're also a publicly traded company. We have a growth strategy to grow not only by organic growth, but also from acquisitions. We're not a company that is doing a, you know, one acquisition every week, so we're very selective when we do acquisitions and, and when we see that there is a strategic fit. We acquire normally profitable companies run by experienced entrepreneurs with businesses that add synergies to the group.
Most importantly, within our group, you will see that we have a lot of passion for building great games and experiences in when it comes to games and, and, and esports, content, for example. A lot of passion for that, but also with a lot of expertise. Combining all these three pillars, this is our strength in, in Fragbite Group. Looking at our business, gaming is our core business. It's a profitable, profitable business. We have Playdigious and Playdigious Originals now, the new label. That's a business that has been constantly improving its top line and, and profitability. In gaming, we see FunRock and Prey Studios, our own mobile gaming studio, where, where we develop our in-house IP, MMA Manager 2.
Also we have a hyper-casual portfolio of hyper-casual games in Lucky Kat Studios in the Netherlands. Looking at Esports, we have Fragbite AB, which is a company that has been in the industry for 21 years. We have also separated its agency business by adding a new brand called Config, which is an agency business. With that, we're building a next-generation Esports. We're looking into new ways of finding new revenue models, and also focus more on actually marketing games rather than brands. We see a lot of potential for Esports as well. Web3, which is our newest business area, thanks to the acquisition of Lucky Kat that we did in December 2021. We also formed a new legal entity in Gibraltar called WAGMI.
We have two games launched so far, where Panzerdogs is, it has come very far, and, and the, the second game, Cosmocadia, that was recently launched, it's now in a, in a beta test, and we will have a full launch next year. We're really at the forefront when it comes to Web3, and we're also a regulated company in Web3. I'll talk and explain more about that later in the presentation. With this said, I would say that we have a well-diversified portfolio, charged with an extraordinary potential within the group. Looking at our ecosystem, as I just mentioned, our base and, and the core is within gaming and game development and, and publishing. We're also adding more markets and, and companies in our ecosystem, as I just mentioned.
We're a pioneer when it comes to Web3, that can power both income through its own games, but also fuel new revenue models to already existing Web2 games that we try to convert into Web3 as well. We see a lot of synergies and potential in the Web3. Web3 is also a shift when it comes to building a community and so on, and the strategies behind that. I think that we can utilize that in, let's say, traditional gaming, in our traditional gaming business as well.
We see that, that the, the gaming, the, the, the market or, or the trends in, in Web3 is moving quickly, and I think that we're here to stay in, in that business, and I, I think also that we've come really, really far, and you'll see that later in the presentation as well. When it comes to esports, it's a huge market, actually, when it comes to number of, of viewers online that watch other gamers play online, and I think that we can utilize that even better in the, in the future, and to help our own games to be marketed. It's a great go-to-market strategy by actually enabling and having an esport business within the group. This is how we have built our ecosystem within Fragbite Group.
Okay, let's jump into an operational update from the gaming segment. We start off with our sports manager games, which is run by FunRock and Prey Studios. We have just recently brought in MMA Manager 2: Ultimate Fight for in-house publishing, and we have just recently started to market that game. Historically, we've had the game published by an external publisher. Now we've brought it in-house, and we will see also that the margins will increase just by doing this, because we don't need to pay third -party publisher for publishing the game, and we will also see reduced store cut fees as well. We've done, or FunRock and Prey Studios, they are in close collaboration with Lucky Kat Studios in the Netherlands.
It's Lucky Kat that will that is actually assisting FunRock and Prey Studios in marketing the game. Also important to point out is that we have some coming, really interesting coming, features or releases in MMA Manager 2 that will also, or that we believe will also help the game to bring in new players, to increase the conversion rates for our marketing efforts. Moving on to our porting and publishing business, which is our largest business in the group, and that's Playdigious. For the ones of you who might have read my CEO's comment in the Q1 report, where I said that we had had a high level of activity, I think that this clearly proves part of that, some outcome of that.
I'm really happy to see that we have signed eight new titles for publishing now, from Q4 2023 to Q2 2025, and we actually announced this in late 2022 that we will increase our investments into the Playdigious business. Now we actually see that this is just part of our journey, where we've come with Playdigious, and I'm really proud of the team. They've done a fantastic job in signing all these titles. On top of this, we have several additional titles ongoing in where we are in negotiation stages. We have also categorized all these new eight titles and also added it to already announced titles, Little Nightmares and Fretless, and it categorized them by forecasted revenues for the coming three years.
In category A, you'll see six of these 10 titles, where we have estimated revenues to be somewhere between zero to eight to EUR 1 million . Category B is forecasted to be somewhere of EUR 1-2 million in estimated revenues, and that's where we have two games. We have three games in the highest category, category C, with over EUR 2 million in forecasted revenues over time. Importantly to point out here is also that this is the revenue forecast for, let's say, the, the, the first platforms or, or where we will publish the games. However, we haven't included any kind of platform extension, so let's say that we would take one of these games into China, for example. That is not included in this forecast.
I think that we have a fantastically strong pipeline, and we have now also communicated that we have that we have a new CEO in place of Playdigious, which is Abrial Da Costa. He joined Playdigious now on the third of July, and I think that his predecessor, Xavier Liard, the previous CEO and the co-founder of Playdigious, they have done a fantastic job with the team, and they have also a lot of things in the pipeline, and I think it's time now for you to meet Abrial Da Costa. [Foreign language]
[Foreign language]
Yeah, [Foreign language] Great to have you here, Abrial, today, and I think that a lot of our investors and followers are curious to hear more about yourself and your ambitions going forward now at Playdigious. Why don't you tell us a little bit more about yourself?
Thank you, Marcus. Thank you for the invitation. Hello, everyone. I'm pleased to be here with you today for the presentation of our second quarter results. Who I am: I started my career in the video game industry in 1992, yeah, now 30 years of experience across development, distribution, publishing, marketing, and sales. I have an entrepreneurial background, having founded several businesses, as well as experience in leading position, such as VP of sales and marketing for Microids, and I was the Chief Business Officer for Don't Nod during the last nine years to structure the studio business operation, prepare the IPO at Euronext Paris, and several capital rounds. I am a video game enthusiast. I'm playing games for more than 40 years now.
I'm also an industry contributor by serving on the board of the most important French association of video games, such as SNJV and Capital Games. I'm also teaching business and distribution topics for a few days a year to the students in the Master of Video Game Production and MBA at Institut de l'Internet et du Multimédia in Paris. My vision for goals of Playdigious. First, I want Playdigious to be a leader and a Benchmark in industry. Playdigious has already a solid reputation, thanks to our talents, and I want to make Playdigious the leader in premium, independent mobile games and offering to the creators the best-in-class publishing services with the Playdigious Originals. Second point, the culture of improvement and innovation. We are in an industry linked to the cycle of technological changes.
We have to stay agile and continue to improve in order to tackle any technological challenges and deliver the best mobile experience to partners and players. Third point, the culture of excellence. We must support our talents to grow, to share our knowledge and communicate on our values. Playdigious must be flawless in the way it pursues its ambitions with ethic, principle, and respect. We can now jump to the side 2, please, Marcus. Before jumping to the business operation, I take this live opportunity to thank Xavier Liard, the co-founder and ex-CEO of Playdigious, for the smooth handover and the help he give me to get my role as a CEO off to a good start.
I wish him all the best for his new role on the group as well, and I want to take to thank all our teams for the excellent job they did regarding the following announcement. Marcus mentioned it already, we announced last week that we signed eight new titles, and we have more under discussion. We have reinforced our production pipelines and our marketing team to kick off this new release cycle. To jump on the Q2 highlights, last month, we released a Legend of Keepers from our partners, Goblinz Publishing. In June, we released Northgard, a new DLC clan, Clan of the Rat, sorry, from Shiro Games, and also in June, a new DLC from for Dead Cells.
You know, Dead Cells is a major success so far, with more than 5 million copies sold already. This DLC is the largest, called Return to Castlevania, including an iconic IP from Konami. Now talking about the Q3 and Q4 releases, we will get two new DLC to be released, one for Legend of Keepers and one for Northgard. We'll have more surprises for this period with the announcement of the release of a new title and a new DLC as well. You see, a very busy period. We can jump to the slide 3. Please. Talking about Playdigious Originals, yes, in June, we announced the new publishing unit. This expansion of our core business will open the doors to new revenue stream by publishing indie games on PC and console, and maybe later on mobile.
In addition of this announcement, Fretless, our first title of the label, has been announced during the Summer Game Fest. Since the reveal, the title has already gathered more than sorry, 30,000 wish lists. Next week at Gamescom, the biggest European video game exhibition, it's a next step and a new step for the project as we show the playable alpha and playable alpha version to the press, influencer, and distributors. Thank you for your attention, I look forward to seeing you soon for a new announcement, and stay tuned. I hand them back to Marcus and Lars for the rest of the presentation.
Thank you, Abrial, for being here as well. It's really nice to have you on board as well here at Fragbite Group, and see you next week as well. Let's move on to the esports business. During the first half of 2023, we are preparing for an intense second half of 2023. We see that we have also signed Max Burgers as the new title sponsor for Svenska Cupen, also Expressen and Bonnier and Space return as main partners. Philips and Spendrups are new partners as well. We also have the finals being played now in the beginning of December.
We have also launched a new label for our agency business called Config, and we have really interesting projects in place during or under this label, such as projects with Philips and Samsung, but also a new client, which is L'Oréal. Before we give you an update on our Web3 business, I would like to take this opportunity to talk a little about what Web3 is, because I know that there. We have received a lot of questions, can you explain a little bit more in Web3? Let me try to explain that in the best way as I can, I hope. Web3, that's a step into the future, let's move back a little bit in time to Web1. What is actually Web1?
Well, that, I would say that that was born in 1990s, when the internet was born and, and based on simple websites where you would search for information. I would say that Web1 was read. We saw Web2 era coming, and that's when the internet evolved into applications and platforms, but also, something to interact and, and also write. We saw online banking starting, we saw blogs and social media entering the scene, so that was more of interaction or read and write. Now, Web3. Instead of data stored in a, in a few databases, it's more of, everyone taking controls of ownership and, and, create, how you create things, take, take control of, of, of that as well. So it's more of digital ownership, read, write, and own.
If we go back to Web1 again in, in the nineties, I mean, everyone was talking about HTML and TCP/IP. Are we talking about that now? No, we're, no, we're not. Now, in Web3, we're talking about DeFi, decentralized finance. We're talking about crypto and so on. I don't think that we will be talking about that in, let's say, 30 years' time. We are, we are here, and we are at the forefront of Web3. Web1 was going from reading, and then Web2 was reading and writing, and now in Web3, it's reading, writing, and owning.
Looking at Web3 is also about a shift in consumer behavior, where Web3 was initially a label describing the next generation of the internet, but also in a short period of time is also a term for the whole movement in the industry towards decentralization of digital assets online. This movement has an impact of a wide range of goods and services. Web3 is a major shift in culture and consumer behavior that is moving forward at a really, really rapid pace. It's important or it's interesting to see what this will have, what, what kind of evolution will this have on gaming as a market? Look at Web3 in gaming.
Let's start with looking at the platforms. By adding blockchain technology to the platforms, we see new technical conditions for publishing games, but also this enables players to own and trade in-game items in the form of digital assets. It's done by also smart contracts, so it will be very, very easy to see all these microtransactions, to follow them, and to verify them as well, thanks to the blockchain technology. If we look at the player engagement strategies, we see that much of the ownership of what is created lie with the players. The development process is shared with the player community, and players demand both more, both financially and non, financial participation. We see new revenue models coming in as well, and for, in traditional, let's say, Web2 gaming, it was more pay-to-play or free-to-play gaming.
Now, thanks to the Web3 shift, we see more play-to-earn, where we reward players also with in-game digital assets. Developers such as Fragbite Group and our subsidiaries, we capitalize on all these digital assets by selling high-margin NFTs and also tokens. Regulation is also something that will happen. It's sparsely regulated, I would say, at the moment, but we will see a lot of changes when it comes to the legal framework. We at Fragbite Group are already a regulated company, and we have a so-called Virtual Asset Service Provider registration, and regulated in Gibraltar by the Gibraltar Financial Services Commission.
We are already at the forefront when it comes to regulation, and we're also really, really prepared for when the MiCA is coming into place here in, in the E.U. and so on. We think that this is a competitive advantage to be a regulated company already now. Moving on, look more in particular, what we have done here at Fragbite Group during the second quarter in our Web3 business. We've had a lot of focus now in the second quarter, but also now in the beginning of the third quarter, on what will happen next.
In the second quarter, we saw a release or a soft release of Cosmocadia, where it started off with an NFT sale of avatars as well, where we got, or where we sold, avatars or NFTs worth of SEK 2.3 million. Panzerdogs, which is our first Web3 games, was soft launched in 2022, now the game has been migrated into the new blockchain, Sui, and we have also seen a full release of the game. What will happen next is that now we are preparing for coming UA activities of Panzerdogs.
In order to do so, we're also updating the game with new features in order to showcase or demonstrate that we will have more so-called on-chain transactions, on-chain meaning transactions on the blockchain. During the second quarter, we have had less of external products due to the focus on our in-house Web3 games, we will see more activities in the third-party projects in the second half of 2023. What we see around the corner as well is that we will move on to also sell more of our in-game tokens. It started off last summer in 2022, where we had a strategic round for our tokens called $KOBAN, where we sold tokens worth over SEK 30 million.
Now, we are preparing for more sale of tokens coming up, but in order to do so, we also need to be prepared in many aspects. First of all, we need to meet the market and the market conditions, but also to really demonstrate, as I said, that our games are really having a positive trend as well. With the focus of converting Web2 players into becoming Web3 players, to increasing the number of wallets and so on, wallets meaning, meaning the wallets in our back-end system, so that we have a seamless integration into the Web3 space. To prepare for the coming token launch, we have several, several agreement drafts on the table when it comes to launchpads, where we will actually, which is some kind of a marketplace where we will sell our tokens.
We have one agreement on the table from one exchange, but we're also in talks with several additional exchanges as well. I think in the short term, we will at least enter into some of these agreements, while also negotiating the terms for other launchpads and exchanges for the coming token sale. I think that we're well prepared, not only from a regulatory point of view, but also from what it actually means, I mean, the underlying game, Panzerdogs. Focusing now on building a strong, having a strong traction in the Panzerdogs game, by demonstrating an increase in transactions, inflow of new players, and so on. Start to market that game by user acquisition campaigns, and then we're ready for the token launch.
The timeline for the token launch is to be communicated in due time. With that, I'd like to hand over to our CFO, Lars Johansson. Please go ahead. The floor is yours.
Thanks, Marcus. Yes, looking at the net revenue for the second quarter of this year, it amounted to SEK 60.4 million compared to SEK 54.2 for the same quarter previous year. To some extent, assisted by foreign exchange movements, in other words, the very weak Swedish krona. Our adjusted EBITDA amounted to SEK 6.5 compared to minus SEK 0.6, and one of the many reasons behind that is the sale of these two hyper-casual games that Marcus mentioned, and we also have announced previously. Operational EBIT, defined as you can see below, EBIT before non-operational amortizations and impairment of intangible fixed assets, in other words, sort of excluding the goodwill amortizations. The operational EBIT amounted to SEK 4.7, compared to minus SEK 4.1 the previous year.
Goodwill amortizations amounted to SEK 21.8 million for this quarter, slightly up from the previous quarter, sorry, and the reason is simple, again, foreign exchange movements, since most of the goodwill is denominated in euros. Our EBIT after goodwill amortizations amounted to minus SEK 17.2 million compared to minus SEK 24.6 million for the same quarter previous year, the net result, minus SEK 26.6 million compared to minus SEK 30.8 million. On the right-hand side, you will see the corresponding figures for the first half-year. Next slide, please. This picture, I think, shows in a very good way the performance and the development of the company, simply because the quarter, it's not an even quarter, even pattern quarter-to-quarter.
To some extent, because it's planned, I mean, for the esports business, for example, where most of the activities takes place in the third, and even more so in the fourth quarter, but also because the pattern of game releases is not an even one. Maybe most important, the Web3 business. Because if we do an NFT sale in a certain quarter, that will be fully recognized in that particular quarter, while if we do a token sale, that will be, according to the present accounting principles, will be recognized over three years. I'll, I'll explain in one minute why, why we do it this way. Looking at this picture, you see a fairly, fairly clear pattern when it comes to top line. On the bottom line, the adjusted EBIT is not as clear.
One has to remember that in the fourth quarter of 2021, we did a very successful sale of NFTs, approximately SEK 10 million. That was then fully accounted for in that quarter. Those figures sort of followed through all the way and including Q3 2022. While in Q3 2022, we made an even more successful token sale, just about SEK 30 million. As I said initially, those financial effects are recognized over a 3-year period. We've also decided to increase our capacity and as a consequence of that, also, to some extent, cost. Partly locally, within Playdigious, as you heard, Abrial and Marcus have explained already, there are a number of interesting things happening in Playdigious with this new label.
We look at more IPs, we look at larger IPs, and as a consequence, we have increased the workforce to be able to capture those opportunities. Basically the same thing within Lucky Kat. There are a number of interesting challenges and opportunities looking forward within the Web3 business, we have increased the capacity in order to deal with these opportunities. Also centrally, within the parent, we have focused very much on our investor relation activities lately, and to some extent, also within finance, in order to prepare ourselves for the coming transition to IFRS. Next slide, please. Balance sheet. We touched upon goodwill. The intangible assets here is the most part goodwill, it's goodwill from the acquisition of Fragbite AB and Lucky Kat and Playdigious.
We amortize this goodwill over a period of five years, according to the present accounting principles, K3. That will change quite dramatically when moving over to IFRS, but that's still the case. Cash, I will circle back to on the next slide. I would also like to draw your attention to what we call earn-out provision, SEK 93.5 million at present exchange rate. That is the earn-out we have agreed with the former sellers, former owners of Playdigious and Lucky Kat. The way we account for these earn-out provisions is we account for the maximum amount that could be paid out.
Provided that these companies will live up to their plans, which we think they will, the amount that will be paid out paying out is SEK 93.5 million, but not all in cash. 54% or 56% will be paid by, by, new shares in, in Fragbite Group, the remaining 44% will be paid in cash. Out of the 44% that it will be paid in cash, 12% will be paid this year, the remaining 88% will be paid during 2024. We also look at, at our degree of leverage. I mean, how much external funding do we have in relation to, to our results? We measure the net interest-bearing debt, in other words, borrowings minus cash, divided by the adjusted EBITDA for the last 12 months.
That quota amounts to, as per this quarter, to 2x, 2.0x, which is better or lower than the previous quarter, where we had 2.7, the reason is the improved EBITDA. Next slide, please. Here you see the cash development of the cash during the quarter. Cash flow for operating activities before changes in the working capital amounted to SEK 2.9. Cash flow from changes in working capital amounted to pretty much the same number, but with the opposite, opposite sign, SEK 2.8.
The major reasons behind that is that we settled a large royalty payment during the quarter, and it's also the accounting effect of this token sale, where we received the cash back in last year, but we, we allocate that, that revenue over a period of three years. That obviously gives effect on, on the working capital. Cash flow from the investing activities amounted to SEK 5.8. Most extent is capitalized own work, but also, when we did the NFT sale during this summer, we received part of the, of the purchase price in, in cryptocurrencies, and since cryptocurrencies, from an accounting perspective, is not regarded as cash, it's regarded as an intangible asset. Thereby, it shows up as an investment in a, in an intangible asset.
That's the other, other major part behind, behind the investment figure. Cash flow from financing activities, to some extent, is, is a new loan on local level with, with Playdigious, in order to finance their increased rate of expansion, to some extent, and the, the other is the amortizations on, on, on parent company loans. The net effect of those two is SEK 5.2. As you can see, we ended the, the quarter with pretty much the same cash position we had in the beginning of the year. That's basically it. I hand over back to you, Marcus.
Thank you, Lars. Okay, let's look at the road ahead. First of all, we will continue to grow organically and through M&A. I think that we have an organization that can handle more acquisitions, but on the other hand, we will still be very selective when making potential future acquisitions. We will continue to further utilize our synergies within the group. One synergy that we have just demonstrated is actually the collaboration between FunRock and Prey Studios and Lucky Kat, where Lucky Kat is running the UA activities for MMA Manager 2. We will continue our expansion within porting and publishing in Playdigious with increased pace of releases, not only from the eight signed titles and the two already announced titles, but also more titles that we have in the pipeline.
I would say that the, that the pipeline, in addition to what we have already communicated, it looks promising. Like I said, the sports manager engine, MMA Manager 2, recently brought in in-house, and we started the marketing of that game. We have started in the U.S. to market the game, then we will add on more countries in the tier one category, and, and then from there, take, take the game to, to, to scale it up even further. In our esports business, I think I've already mentioned that, we will have an intense second half of 2023.
In our Web3 business, I think that we've come very far with the preparations for the marketing of Panzerdogs, with the new features coming into the game, and now also with the coming token sale for our $KOBAN tokens. Why Fragbite Group, to sum up a little bit? First of all, we have a solid, profitable base. We have a unique market position, combining all these three markets: gaming, Esports, and Web3. We have a broad exposure to different gaming segments. We have proprietary and proven external IPs, and we are really at the forefront when it comes to Web3. With that said, again, we have a well-diversified portfolio charged with extraordinary potential. I look much forward to the second half of 2023. With that, I think we're ready to open up for some questions.
We do have some questions, actually. There's two questions, both relating to or referring to MMA 2, so I, I, I, I'll give two of them to you together. "Is it correct that MMA, MMA 2 now has no revenue share and also a lower store fee? If so, how profitable can it be? Do you have any targets?" That was question number one. I'll give you the two at the same time. Second one: "If MMA is profitable/successful, what can we expect in terms of new titles or opportunities for the studio?
Okay, first, the question, if it is true that we have no rev share to an external publisher. Yes, that's true. It's also true that we will have reduced store cut fees for the first $1 million in each store, Google Play Store and Apple App Store. That's true. We don't comment on, on how big the game can be, and so now it's more of actually having the data-driven marketing and the algorithms finding the, the right levels in order to, to scale the game further. I think that we need to, to see and, and follow the, the KPIs and, and the performance of the game first, and after that, see, okay, will there be any sequels and which sequels and so on, and more titles on that game engine.
Of course, that would be the natural ambition, given of, of course, also, with, with the proven, underlying KPIs and numbers.
Good. Next question: "Have teams signed up yet for the Svenska Cupen?
Yes, teams have signed up for the Svenska Cupen, but we don't announce which teams. That will be communicated later.
Then there's a question which I feel is coming my way: "How will you finance potential acquisitions?" I guess the answer is, first of all, it depends on the size of the acquisition. Secondly, it depends on the structure of the acquisition, and as you know, when we acquired both Playdigious and Lucky Kat, we paid partly with cash and partly with equity. Let's say that we end up in an acquisition situation where we need new capital. I should also add, obviously, I hope we've conveyed during this presentation there are a number of exciting stuff happening within the company, so I think we can safely foresee a very healthy cash flow from the existing operations over the next few quarters.
Let's say we end up in a situation where we need external cash in order to conclude an acquisition. I would say, and we said it before, we have very good relationships with our existing banks. I think that's definitely. We're well-prepared in that, and as I also said, we've spent quite some time the past quarters on our investor relations side. We meet regularly existing, new shareholders, potential new shareholders, and telling them who we are, and also obviously have conveyed that we will do acquisitions.
All in all, I think, depending on the size, depending on the structure of the deal, but I think we're well prepared for a situation where we need external, external capital. "How confident are you in delivering positive EBITDA in the second half 2023 for esports?
Well, I've, I've said it before that, that, we see a lot of opportunities in the Esports business. It's up to prove that, but of course, we have signed the good partners, and we have more partners and sponsorships to sell. But, yeah, right now I view the Esport segment as positive and looking forward to see the second half now of 2023.
Next question. "Regarding Playdigious' recently signed agreements, will some games be released exclusively on platforms?
We don't comment normally on the nature of these, IPs. So I think that's something to come back with. We don't, comment on that to not disclose any type of information.
Then there's a question which I'm not sure that I fully understand, but I'll, I'll give it a try, and maybe, maybe you can interpret. "In-app purchases in the Panzerdogs app, as in not a transaction on a crypto marketplace, that revenue is 100% ours, as compared to 5% of revenue from the exchange?
I don't really get that, question, to be honest-
If you that asked that question is still out there, could you, could you please, could you please clarify a little bit so we can, we can answer your question? Another question then, waiting for that: "Are there any plans for cost reductions in order to strengthen the EBITDA margins, for example, cutting overhead costs?" That's, that's clearly a CFO question. But I, I, I think that, that... I'm, I'm only here for another one day and a half, so I think that, that question should be asked to the coming CFO, Anders Rössel, who will join us shortly. But in his absence, I'll, I'll, I'll give that question to you.
Yeah, I mean, we will always look over our, our cost structure and, and so on. Now, during the first half of 2023, we have taken some investments to not only prepare for IFRS, but also into other areas, such as investor relations and so on. I think that there, there is some space for some cost reductions and synergies within the group even further, but that's something for the future to come back to.
Well, apart from the question that we don't really understand, that was it.
Okay. Before we, we hang up, I'd like to thank you, Lars Johansson, for your time here at Fragbite Group. I think that you've had an impressive operative career, and I like to give you all the best of luck now for your coming board assignments as well. It's been a pleasure working with you, and I can now, not... Now I've, I call you my colleague, but from Monday and onwards, I will call you my friend.
See you.
It's been a pleasure, Lars. With that said, I, I also look much forward to working with, with Anders Rössel as well, our new CFO and Head of M&A, starting on Monday officially. Also, I'd like to thank you, Abrial Da Costa, that has been participating on this call, and of course to everyone that has been listening in and participating in the, in the Q&A session. I look much forward to coming back to all of you in November to present our Q3 numbers. With that said, thank you, and have a great day.
Thank you very much.