Good afternoon, and welcome to MTG's interim report presentation for the Q2 2021. My name is Lars Thorntzen. And joining me, I have our Group President and CEO, Maria Lilleen. As usual, we will begin by presenting the quarter then take your questions in the Q and A session for dialing participants only. With that said, I'm now handing over to you, Maria, to take us through the quarter.
Thank you, Lars, and good afternoon, everyone, and thanks for joining our Q2 earnings call today. The Q2 was yet another intensive quarter for us, both from an operational and M and A perspective. We delivered solid progress on our strategy in both the gaming and esports verticals. This quarter also marks the full year of operations under the ongoing corona pandemic. Stay at home and lockdown orders have contributed to the growth of our gaming vertical, with our companies gaining new users and experiencing high user engagement.
However, as expected, we're now also starting to face tougher year over year comparisons against its elevated baseline. Our resource vertical, on the other hand, was initially hit hard, but it's now starting to improve and recover, thanks to our agile shift to online events as well as the gradual reopening of society. On live gaming, each portion of space easier comps going forward. I will now walk you through our presentation. Afterwards, I look forward to taking to your questions.
Our results in the Q2 shows that we're executing well on our strategy with solid developments in terms of net sales and EBITDA. Our gaming vertical delivered a solid quarter, mainly driven by good monetization, solid display based engagement and clearly supported by the inclusion of both Ninja Kivi and touch driving overall sales. The esports vertical returned positive revenue growth, driven in particular by stronger ESS sales as well as renewed growth within our owned and operated operations. PSF Gaming hosted 6 digital only market property and successfully produced another season of gamers without borders and hosted a successful Rainbow 6 live event in Paris. On the gaming vertical, we continue to deliver on our buy and build strategy, announcing the acquisition of PlaySimple, a rapidly growing, highly profitable Indian gaming studio and a global leader in the mobile world game genre.
Last but not least, we maintain a high level of strategic investments in our esports product portfolio and B2C platform, strengthening our position and diversifying our current offering ahead of return to live audience events, which we expect by the end of 2021. If we then move to the next slide. Let's start out by reviewing the performance of our gaming verticals in the 2nd quarter. Net sales increased 9% to €810,000,000 Foreign exchange rates had a negative impact of 5%, resulting in a growth at constant currency of 14%, fueled by the inclusion of Hutch and Eliakivi. Organic growth was minus 14% due to the tough comparison against an elevated 2020 numbers.
However, when comparing to the Q1 this year, our sequential growth was 3%. I'm pleased with the results in the quarter, but admittedly, we did end the quarter slightly soft. We saw lower than expected results from InnoGames June event for its largest game, Port of Empires, in conjunction with the European Football Championship. It's quite rare that we do not see the anticipated uplift from an in game event, but it happens from time to time. And as we're now progressing into the Q3, the next event InnoGames had in the schedule, which was played out early July, performed in line with our expectations.
On a general note, InnoGames' core title and portfolio of classic games delivered a solid performance. Congregate's operational development in the quarter showed stable progress, but the issues with the newly launched Teenage Mutant Ninja Turtle title has not yet been fully resolved, which is hampering the company's development to some degree. On the other hand, Hutt Kapler Formula 1 class title saw a strong customer intake and revenue development, supported by increased marketing on back of the Formula 1 ship season start. We also consolidated the KiwiStar in the 1st June, which had a strong performance in the quarter. Its Key titles, Blue TD6, maintain high engagement with lower seasonality than normal.
It is worth pointing out that in the Kiwi TD6 is a premium game, having its main product updates annually in December. The team has therefore been working on in game improvements and releasing more frequent updates to reduce the cyclical characteristics of the game, and I would say that the Q2 performance is a good sign of this paying off. I also would like to make a short comment on Apple's change to their identifier for advertisers features, commonly referred to IDFA, which has been thoroughly discussed by the industry since it was first announced last year and rolled out this quarter. The changes to IDFA, which means that apps needs to be obtaining sharing permission from iOS users to share data with app developers, opt in rather than an opt out basis, have so far had limited financial impact on our gaming vertical. That said, we continue to monitor the situation, and we encourage all group collaboration of topics.
We do believe that solid processes, along with agile working ways, will be the success factor in this changing environment. It is also important to underline that the IDFA changes will likely have different impact on different gaming companies. You look at our portfolio in Daquivi, for example, having 100% organic traffic will not have any impact as in it's all community centric approach to marketing. Meanwhile, in games, which has both mobile and browser oriented business, will experience a different impact. But in both instances, as I said, the financial impact has been limited so far.
I'm also pleased to see that our gaming vertical maintained its margin despite the push behind our growth gains that we already mentioned Formula 1 clash. The solid development was supported by the recent acquisitions as well as the underlying adjusted EBITDA growth. We're very excited about the gaming vertical that we're building with a balanced portfolio across both cash flow and mid core. Our work to further diversify our game vertical through strategic M and A has continued. And on June 1, we added a strong Bloons IP to our portfolio of cash of Nikkei transaction.
On July 2, we announced the acquisition of PlaySimple, a rapidly growing, highly profitable Indian gaming studio and global leader in the mobile world game genre. Through the acquisitions carried out over the last 8 months, Hutch, Ninja Kivy and PlaySimple, MTG has became a scale player in the industry. As of the Q2, we now reached 31,000,000 monthly active users across more than 50 live games. We have also shifted our mobile revenue presentations to be above 70% of total net sales for the gaming vertical. And as mentioned, we have now a much more diversified games portfolio, stretching across different genres and life cycles along with Turnit back up to you.
Additionally, we have now a first group common project between our gaming studios underway to ensure that we realize synergies between the different companies and showing the clear benefits of operating as a group of gaming companies. We're still in the early days, but I'm very happy to see the high level of engagement between the different management teams and the excitement about working together. I'm certain of it, over time, will result in stronger vertical performance and better more engaging games, which ultimately will accelerate the value of the Gaming Co. As a whole. Let me to the next slide, please.
Our new games pipeline continued to develop well into the quarter with some delays due to identified areas of improvement in the top launch titles ahead of the commercial launch. InnoGames made good progress on the development on the new games and are currently at 2 games in soft launch: Riza Cultures and Lots of Iris. And in the Kivisto, Blood 1 games, Bloons Pop! At the end of the quarter with promising early results. While it's exciting itself with the title, it also serves to generate excitement ahead of the 1 day anticipated release of Bloom's Battle 2, which will come now in the second half of twenty twenty one.
Hatchstock's launch title Battle Heist has so far not performed as is anticipated, and the team is focusing on improving both the user acquisition campaigns and the early experience of the game trips. In total, there are currently 4 games in soft launch, for which we are planning commercial launches in the second half of the year. In addition, there are several new games that remain to be soft launched in 2021, including PlaySimple's new world and part game title. And speaking of PlaySimple, let's move to the next slide, please. With the acquisition of PlaySimple, we add a category leader within the world game genre to the group, along with the highly relevant capabilities around cross promotion and uptick.
Since being founded in 2014, PlaySimple has developed world games for the English speaking audience with strong analytics and a data driven approach that has enabled them to market both retention and monetization. The EBITDA portfolio 9 like games across Enneagram, Crossword and PVP world game franchises. And 3 of these gains quite equally drive the majority of the sales all within the growth mode space. Within the pipeline of new games, they are further moving into the solitaire space. For Q2 and H1, PlaySimple delivered revenues of $285,000,000 $535,000,000 respectively, which is at the higher end of our guidance and is equal to growth of 100% for Q2 and 87% for H1.
Margins continued to expand in the quarter and adjusted EBITDA amounted to $94,000,000 in Q2 $151,000,000 in H1, also better than our initial guidance. We do expect PlaySimple to continue to perform growth rates above market averages and accelerate the growth profile for the Gaming Group in totality, though we do not expect the current levels to be sustained. The upfront consideration amounts to $360,000,000 and with a performance based earn out of $150,000,000 We expect to close the transaction at the end of July following our EGM that is scheduled to July 28. Through our successful execution of our buy build strategy, Enfity's revenues and adjusted EBITDA profile has changed significantly with faster underlying growth and a margin expansion. On pro form a basis, 2020 net sales amounted to more than $4,400,000,000 that should be compared to the EUR 2,700,000,000 reported net sales, with a solid 29% adjusted EBITDA margin.
If we now look at 2021, For H1, 2021 and Q2, respectively, we report sales of SEK 2,300,000,000 and SEK 1,200,000,000, respectively, driving a 30% 8% year over year growth in constant FX and a margin expansion to 31% in the 2nd quarter. Looking at the breakdown of revenues, mobile revenues are now close to 70% for the group, and we have diversified our revenue stream to also include paid ups and increased advertising contribution. All in all, we're very proud of the company we have built, and we look forward to continue to develop and grow our business. If we then move to the next slide and moving to esports. Our esports vertical continued to be affected by the ongoing pandemic in the second quarter, that we maintained a successful online schedule for our esports tournaments with a strong fan reception and continued commitment from partners.
Net sales for the Esports vertical increased by 18% to $388,000,000 negatively impacted by foreign exchange rates of 8%, which meant an organic growth of 10%. ESL Gaming successfully delivered and produced 6 multi properties scheduled as digital only events, including Dream McMasters Spring, IEM Summer and ESL 1 Summer. Furthermore, our ESS operations made a strong contribution to this vertical, and ESL Gaming produced another season of Gamers Without Borders as well as Rainbow Six live event in Paris. At the Paris event, we successfully invited the teams to physically participate, provide us with good learnings ahead of our recently conducted ESL 1 Globecolone event that was also done in the same format. Additionally, Dream Act Sport Games started production of the Olympic Virtual Series, which will lead up to the Tokyo Olympics and produce a play off of e NHL.
On a general note, we continue to believe that we will see a few live audience events return by the end of 2021, and we are optimistic about 2022 being a year of normality. As a result, we are still experiencing some soft reception from brand sponsors on 2021, but we are seeing more activity regarding 2022. Hence, our sales team at ESL Gaming is already having discussion with both new and existing partners commitments for 2022. We are pleased to see ESR Gaming announce a strategic extension on its cooperation with Intel starting in 2022, which is a strong signal of confidence from our largest partner. Additionally, DHL also prolonged its conflict starting now in Q2 and wants to make commitment to the ESL Gaming in the quarter.
Furthermore, our discussions with publishers remained active in the quarter, and we feel that our proposition is resonated well with them. As an example, DreamHack as a part of ESL Gaming announced renewed partnership with Epic Games through the DreamHack Open featuring Fortnite. If we then move to the next slide. We continue to make strategic investments to fully capitalize on the trends that have emerged during the pandemic, leveraging the learnings for digital only events and a more platform based operating model. Our focus has been on building the esports platform, including B2C sea and mobile esports products, supporting traditional esports traditional sports into esports products and prepare the organization for potential geographic expansion.
These investments have already started to yield early results. For example, in the Q2, our mobile esports product, ESN Mobile Open ran competitions across North America, Europe and Asia for titles such as PUGGY MOBAN, Pleasure Clamp, Broadstar, Asphalt Mine and many others, attracting over 850,000 unique players. I strongly believe in this product as it enables the broader fan engagement through a larger addressable market. Additionally, as gains are converging towards mobile platforms, together with the 5 gs mobile networks being rolled out, the mobile esports market is set up with strong growth going forward. Another clear example of early results from the strategic investments is within Dream Exporting and its ambition to digitalize traditional sports into esports products.
In Q2, we produced events for NHL and the International Olympic Committee as a part of the Olympic Games in Tokyo. Additionally, ESL Gaming invested into the interactive experience Dream Act Beyond that is an all digital festival concept developed for the gaming community, created to both complement and showcase the best of Dreamhack in a fresh new way, and we will start to test this on the market now in Q3. We also continue to invest through our Visa fund into the casual competitive gaming platform Joyride, which enabled tournaments and competition for mobile casual gamers. This is a new innovative casual competitive gaming platform and an absence trend to the mobile esports that we see. Through these investments, we are preparing our esports verticals for a mix model of live events and an enhanced online product proposition in a normalized business environment as we expect in 2022.
We do expect this emerging hybrid model to lead to both faster growth and increased revenues, but also to richer, more resilient commercial operation. At the same time, we will carry on to pursue the operational efficiencies in the core export business and seeking new commercial and sponsorship agreements. With that said, I hand over to Lars to walk us through the financials.
Thanks, Maria. As Maria has already stated, it has been a very active quarter, both operationally and from an M and A perspective. As in Q1, the second quarter was impacted by significant currency headwinds. The gaming vertical experienced negative 5%, while esports saw an 8% in translational headwinds, resulting in a total negative 6% for the group. Net sales amounted to $1,198,000,000 growing by 9% or 15% excluding FX.
Organic growth amounted to a negative 3% due to and as flagged in the Q1 difficult comparisons in the same period last year as the gaming vertical operated from elevated levels due to the pandemic. With that said, we are pleased to see that both verticals have grown double digits in constant currencies. The gaming vertical grew by 9% with the inclusion of Ninja Kiwi from the month of June. The underlying net sales was a negative 14%, excluding FX, due to last year's quarter being positively impacted by the pandemic with elevated activity. As mentioned, our Esports vertical had 6 master events in the Q1, all online and without live audience.
Compared to the same period last year, net sales were up by 10%, positively impacted by a better performing ESS business, but also due to easier comparisons versus Q2 2020. Excluding exchange rate impact, sales was up 18%. Organic net sales growth was also up 18% with O and O at plus 6% and ESS at plus 36%. Adjusted EBITDA amounted to SEK 155,000,000, SEK 228,000,000 from gaming, including Hutch and 1 month of Ninja Kiwi and maintain solid performance from in games and minus €48,000,000 from esports, supported by improved cost structure related to online events and the higher proportion of ESS work, but affected negatively by the ongoing pandemic and accelerated operational investments into new strategic initiatives. The Gaming vertical had an adjusted EBITDA margin of 28%, driven by continued robust performance at InnoGames despite difficult comparisons.
New game launches for InnoGames and Hutch, together with a strong marketing push behind F1 Clash, impacted profitability in the quarter to some extent. Let's take a closer look at esports. We continue to experience an impact from the pandemic in the form of less activity from brand sponsors, was because of the lack of live audience events. We are optimistic about 2022 when we believe we will see a year that has returned to normalcy. We have seen several of our most important sponsors prolong the contract with CSL Gaming, showing commitment not only to e sport but to us in particular.
We maintain our accelerated investments into several strategic initiatives in the Esports vertical, follow us starting to look more positive to return to live audience events again. Hence, we would like to make sure that we are at the forefront when cost of services offered to fans and partners. As we flagged already in Q1, this will continue throughout the year. With that said, the EBITDA adjustments in the quarter amounted to SEK 41,000,000 to be compared to SEK 63,000,000 last year. Management incentive programs amounted to SEK 25,000,000.
Also M and A cost amounted to SEK 60,000,000 as a result of activity in both the gaming and It should be noted that the M and A cost associated with the acquisition of PlaySimple would be booked in Q3. Depreciation and amortization in the first quarter or sorry, Q2 amounted to $102,000,000 and included amortization of PPA of 54,000,000 amortization of PPA was higher compared to last year, mainly related to the Hutch and Ninja Kiwi acquisition. Excluding PPA, depreciation and amortization was merely flat year over year at SEK 48,000,000. Net financial items amounted to SEK 26,000,000, predominantly driven by exchange rate changes. Last but not least, the group tax was negative SEK 49,000,000, predominantly reflected the increased result in the gaming vertical and in games, but also a result of timing effects.
Let's move on to the cash flow statement. Cash flow from operations before changes in working capital amounted to negative SEK 3,000,000. The management incentive program amounting to $85,000,000 was paid out by the Gaming Works Guild during the quarter. The cost of the 4 year program has been provisioned on a quarterly basis, and the first part of the program was paid out in the quarter. Operationally, the cash flow was positively impacted by in a strong performance by the gaming vertical and negatively affected by maintained investments in the Esports vertical.
When looking at the cash flow profile of the company on a half year basis, the swing versus the same period last year can more or less be fully explained by the management incentive program being paid by the Gaming Vertigo. Cash flow in investing activities contain the net cash payment of the acquisition of Linktakivi of $507,000,000 close to 31st May and a final payment of Hutch of 30,000,000 Furthermore, we invested $26,000,000 in the VZY fund in a company called Joyride, an up and coming casual competitive gaming platform for mobile players. CapEx amounted to $59,000,000 in the quarter, mainly consisting of capitalized development costs for games and Esports platforms that have not yet been released. Cash flow from financing activities mainly consist of capital injection from minority owners in the Gaming Co of SEK 154,000,000 as they partly participated per Rata in the Ninja Kivi transaction. As a result, the net change in cash and cash equivalents for continuing operations somehow to a negative SEK 624,000,000 That gives us a group net cash position of SEK 1,200,000 as of end of Q2, cash which is to some extent being used for the PlaySimple acquisition.
Gaming continues to be cash flow the main cash flow contributing entity. Looking into the 3rd quarter, I would like to remind everyone that coming costs will continue to be high for gaming and easier for esports because of the way the pandemic affected the Q3 of 2020. Jamie will face more normal comps as of the Q4. That concludes the financial presentation of the quarter. And now back to you, Maria.
Thank you, Lars. So to summarize the Q2 now in 2021. Our financial results for the quarter were solid, and we continue to grow our gaming vertical with new companies, strong risk and strong IPs as well as more talented people. The latest addition is a great team of Play Simple. Through the acquisitions carried out over the last 8 months, we've become a scale player in the industry, and our gaming vertical generated Q2 pro form a revenues and adjusted EBITDA of approximately EUR 1,200,000,000 and SEK 367,000,000 respectively, corresponding to an organic net sales growth of 8%.
We now have an even stronger group capabilities and skills when it comes to user acquisition, live ops and BI. Along with our growing player base, this is creating operational synergies that will help us remain competitive in the gaming industry. Additionally, a very strong new games pipeline is setting our gaming vertical up for continued organic growth. With the softer comps, we are back to growth on the esports vertical. Although short term visibility remains limited for esports, we are confident in our strategy and ability to adapt.
The pandemic will impact our operations for the remainder of 2021, we are feeling increasingly optimistic about the return to Norway business in 2022. We will continue to make strategic investments to fully capitalize on the trends that has emerged during the pandemic, leveraging the learnings from online only events and a more platform based operating model. Looking ahead, we will continue to execute on our buy and build strategy. Both our verticals are strong growth projections, and we expect to create shareholder value through both organic and inorganic investments in gaming as well as esports. And with that, it concludes my part.
So thank you.
Thank you, Maria. That concludes the formal presentation of our Q2 interim financial results report. We are now ready to take any questions that you might have on the report or the conference call presentation. So operator, can we please have the first question? Thank you.
Your first question today comes from the line of Oskar Eriksson. Please go ahead. Your line is now open.
Thank you, and good morning, Maria and Lars. A couple of questions from me, starting with gaming. Relatively soft development on the organic growth side and for Innogains. Just regarding your comments here, Should we interpret your comments about July as a recovery for Innogains and solid momentum in Q3. If you could also comment on the momentum here sequentially for Nynaekebe, Hutch and PlaySimple.
Thank you.
Thank you, Oscar, and good afternoon. So two questions, both for you, Maria. The first one is InnoGames and the current trading in July. And then also if there is any additional clarity or flavor we can provide when it comes to Innokivi, Hutch and PlaySimple as well?
Thank you, Oscar, for your questions. I think that we were equally disappointed, to be fair, in the last month in Q2 on back of the softness of the campaign. I mean, usually, InnoGames Extremely high predictability on the event side. This was a miss on their end, but that's again, I mean, sometimes it does happen. That's also what you learn.
I think on a positive note, and I think that's why it's also important to highlight, and you said it in your question, the July event performed in line with expectations, and we are back on the expected underlying momentum, both in Innogyms but also across the remaining portfolio. So that gives us comfort on the way forward. And also, as Lars said, in Q4, then we see again a more normalized comp.
Excellent. And then regarding your soft launches, it seemed quite promising with rightful cultures as of Q1, what's the latest there? Should we expect meaningful contribution from new releases for inner games and congregate here in 2021.
Thanks. So Maria, a question for you when it comes to how the soft launches have developed both in the quarter but also looking forward. I guess it's It's a big question now. There's a lot of companies and a lot of games that are going to be soft launched. So maybe we can also adjust it a little bit broader as well.
Yes. But I think if you look at the on the biggest scheme of things, I think that we have a very exciting games pipeline. I don't think we have ever So that's strong also including the Play Simple games that you have 4 in the pipeline. So that's extremely exciting. And of course, that is an important And factor on organic growth going forward.
I think if you look at the quarter where we then put 2 games in particular on InnoGames into Stock loss, I think that the retention metrics that we are seeing on back of the games, which is the foundation for strong games, is continue to perform extremely strong. What we've saw in order to actually properly monetize and scale the games, we need to add more features and enhance those. And I think that is the work that we are currently doing, which means that we're optimistic about making sure that we can gradually transform these games into soft launch into commercial launch sort of towards the end of Q3 and then Q4, which means that they will be in Q4 the earliest you're going to see any meaningful impact and then in 2022.
Great. And then on the margin side, I noticed that the pro form a margin in Gaming was around 31% in Q2. Could you please break that down a little bit between different studios and also perhaps some flavor on What is reasonable to expect here in Q3 and Q4 and also beyond? Thank you.
Thanks, Oskar. So pro form a margin for our gaming business, 31%. We are as you know, Oskar, we're not Keen upon breaking down details on our games, but let's see if we can provide a little bit of flavor there when it comes to how it been distributed. But Maria, if you could just add some color.
Yes. No, I think that I mean one company that you saw also by the numbers that we announced is Mindakivi, which has Extremely high EBITDA margin, as you can also see in our sort of announcement disclosure on back of that. Of course, that is improving the underlying margin. But also, I think what is extremely exciting and I think that embeds for a strong future going forward is when you consolidate both Hudson into Kiwi and Play Simple, we are actually creating a gaming group that has faster underlying growth rates. I mean, you have 8% in Q2 and you have 13% for the first half of the year with a margin expansion.
I think that is something that we're excited about, and I think that is something that we also believe going forward is that we're going to see faster growth for the new gaming vertical going forward than what you have done, so you can accelerate the growth with these new acquisitions and the margin expansion.
Great. Thank you. And a final question for me before handing over. You said that esports, the strategic investments in esports is at similar levels, I think, Q1, if I interpret correctly. Could you discuss the delta here sequentially with lower losses?
Is it primarily due to more events? Or are there also sort of phasing effects that you recovered some of your investments in Q1? And also just what to expect in Q3 here in terms of margins for the esports side? Thank you.
Thanks, Oscar. So as you said, we are doing a similar level of strategic investments in the quarter, But we still see a sequential improvement when it comes to EBITDA losses. And what is the driver behind that predominantly, Maria? And then and a view on the Eastport business going forward, even though we don't provide guidance for that.
No. But I think if you look at the quarter, it's a busier quarter in Q2 versus Q1. So you have 6 master events, which is driving revenue growth. So we have a quite high sequential increase on revenues Q2 versus Q1 as well. And on top of that, I mean, we did have a very strong ESS operations In the quarter, I mean, we had, I mean, 2 main events was Gamers Without Borders, which we also produced last year and then also the Ubisoft Rainbox 6 International.
Those 2 is also positively impacting our revenues and also the bottom line. And then, of course, that underlying improvement is being offset by the investment We're doing to make sure that we are better positioned in 2022 and have a much broader product proposition and also becoming through that a better partner to the publishers, which is our name of the game and the purpose to become a really strong e sports enabler for the publishers. I think as you look forward to Q3 and Q4, I think nothing has change if you compare it to the historical sort of development, the Q3 is on the slightly softer side of it versus Q4 is a busier one. I think if you look last year, I think that we had maybe a little bit unproportionately soft Q3 because what we did last year, if you remember, is that we put actually all the events more or less into Q4 because we had a hope that maybe COVID, The second wave would not come, which meant that we scheduled only one event in Q3 and the remainder in Q4, which meant that you had a proportionally high density of events in Q4, which meant that you also had a proportionally high revenue composition in Q4, which means that if you even though, as we said, we're going to have softer comps for the full second half of the year versus last year, but it's going to be, of course, on the even softer side in Q3 versus Q4.
So I think that's how you should think about the revenue mix. And as to the investments, they will continue also in the second half. And the way that we see it is that we should then start to be able to monetize and just see revenues on back of these in any sort of material substance starting in 2022.
We're looking at the more balanced schedule then for 2021 second half versus 2020. That was a little more skewed towards Q4 2020.
Yes. So you should. But still Q4 will be the strongest quarter as it normally is.
Yes. Would you like to follow-up there, Oskar?
No, that's enough for me. Thank you very much both.
Thank you. So operator, could we have the next question, please?
Of course, you can. Your next question comes from the line of Erik Linton. Please go ahead. Your line is now open.
Yes. Hi, Maria. Hi, Lars. Couple of questions from me here. So just following up on Oskar's question here.
Is it possible to sort of say anything on how weak the sales were in June for gaming compared to April May? And are you kind of back at the April May levels now in July?
Hi, Erik. Thanks for the question. So looking at the monthly performance and how weak June was. And unfortunately, we do not break down monthly performance. But if we could try to characterize it in any way that could be helpful to Erik, Maria.
Yes. No, but it was obviously, If it wouldn't have been, at least, a material deviation, we wouldn't have mentioned it. So I think that normally, you do see a pretty strong uplift when we run the events, and that uplift It was not notable during these events, unfortunately, which, of course, made a dent in the total revenues for June and then also for Q2. If you compare June to April May, I mean, it's a little bit difficult comparison to begin with because June July, you always have a seasonality effect. So There is a different revenue mix to begin with.
And also, I mean, we always see this time of the year as well different marketing efficiency as well. So there are Efficiency as well. So there are many combinations, and that's why it doesn't make sense to break out monthly by monthly sales rather year over year trend and also versus our forecast. And I think that's where we saw in June that we were having a deviation versus our expectations on that event. That is a learning we will bring with us.
On a positive note, when we look at July, we're in line with expectations.
Perfect. And a follow-up on that. So I mean you highlight that you see tough comps in gaming in Q3 as well. So I mean is it fair to assume that We should interpret it as negative organic growth in Q2 sorry, Q3. And is it possible to say anything about The magnitude of this the tough comps and the negative organic growth?
So we commented in our material on Q3 for gaming being also with the tough comps. And if we could then help the market to understand what that means when it comes to that comps and when it comes to the level of effect that would happen. I don't know, Maria, if you're a little bit share there.
Yes. No, we will continue to see tough comps and you should not in the old portfolio, if I say that way, you should not expect us to be in the positive organic growth territory. But I think when you look at the pro form a basis, we're going to continue strong underlying growth. And I think that is what we're focusing on. We're building a new gaming group that's going to continue to have a strong growth profile and also, as I said before, with the margin expansion.
And that's what we're building, and I think that's our what we're very excited about. And then also making sure that we within InnoGames, in particular, are successful with our games that are in soft launch, so we can get them into full commercial launch that will then be the driver for 2022 growth as well.
All right. And switching over to the esports here. You talked about this mobile esports product having 800,000 unique players in Q2. Can you say something about sort of how much revenue this is generating right now? And How do you aim to monetize this going forward?
So mobile export, which is one of our emerging products something that we are currently investing when we refer back to strategic investments. We as you know, Eric, we don't necessarily go into details on a product by product within our sub product in this case. But Maria, at least we could maybe add a little bit of color on our excitement when it comes to mobile e sport.
Yes. No, to me, I think it's one of the most exciting new products that we're having. If you look at the growth of mobile gaming In general, and you look at the 5 gs rollout and so forth and the growth of customer base, I think that is having sort of quite a few Seeing value propositions to it. So right now, it doesn't drive a material revenue for us. It's in the early infancy and building up that product.
That I do see a very big potential over time on sponsorship value in that product. If we get it right, then I think that's what is still early trends and KPIs. But I think The engagement that we see on back of that product is extremely encouraging and also the early discussions we're having with potential brand sponsors on back of this.
Perfect. And just a final question from me then perhaps. Looking at the export services, Which was very strong. Should we expect revenues to sort of continue at this level going forward? Or was this sort of a one off in this quarter?
So ESS revenues up 38% in the quarter, of course, quite strong How do you believe that will develop, Maria?
No. I think Easter service will always be Seasonal, but it's difficult to predict that seasonality because it depends on when publishers drive activation. Some activations are very long partnership like our partnership with Ubisoft and back of Rainbow 6. If you take Aimet without season, that's a one off event done on an annual basis. So that's why it's a little bit difficult to forecast on a quality by quarterly basis.
But I see ESS as very strategic importance. It doesn't have the same scalability as owned operated. So I mean that is, of course, where we are seeing the big picture potential. But I do believe that the ESS work is an extremely important value add to our own and operated, and that is something we focus on building up And making sure, as I said before, we want to be the best partner for publishers and help them enable esports for them. And that's what we do within our ESS operations as well.
And in some of those partnerships, you can then over time also sell and upsell into owned and operated. So we want to grow that going forward. I think that's my Long answer in a short summary.
Thank you.
Thank you, Erik. So operator, could we have the next question, please?
Your next question today comes from the line of Erik Moberg. Please ask your question.
Hi, And thanks for taking my question. Just going back to the Gaming division, if you look at it Yes, organically. I mean, you're down 14%. But could you perhaps elaborate a bit on how much of this decline that stems from the lower than expected activity for InnoGames in June.
Thanks, Eric. So when it comes to the negative organic growth that we experienced in Q2 in gaming, Maria, if we could, as we say, elaborate on how much was then associated to games campaigns. I mean, the reason why we mentioned it because it did have an impact. So but please, Maria.
Yes. So I mean it wouldn't change between a positive growth and a negative growth, but it wouldn't improve the underlying revenue performance. So you would have seen a few percentage point less decline. So I think that's the best way to look at it.
So like 2, 3 percentage Points ballpark number. Is that fair?
I don't want to be specific, but it would add a couple of percentage points better year over year growth.
Understood. And then just to follow-up here on the margin within gaming. If you perhaps could give us give some flavor on HOTGE games And sort of how that sort of what margins Hutch had in the quarter and also whether or not they expect these Hutch margins to come back to normalized levels in Q3 and Q4?
Thanks, Erik. So Hutch, as you know, we have had great success with one of our big three titles within Hutch. We don't going to a specific question over Eric, but once again, Maria, I'm asking you to provide flavor all the time. So I'm doing it again. You guys come to how much has been developing in the quarter and what sort of expectations we have over the coming.
But I think if we take a step back and think about that we are now building actually gaming group, I think that the beauty of that is that our job is to make sure that we deploy marketing where we see the best return and then look at what is the absolute EBITDA that we feel we want to deliver and how can we actually reinvest some money to our different games. And I think what we see within Hutch is that they have great games, I mean, especially top 5 and Formula 1 flash that are in the early growth phase, we can really be aided to push marketing. And I think as we saw and I think you noted that in Q1, we had a higher negative seasonality effect in Formula 1 before the season started. I think on the opposite, we saw equally positive effect now as the season actually started. And on back of that, we wanted to make sure that we can actually benefit on marketing.
And we saw really strong ROA levels, which meant that we accelerated marketing because that is in our long term interest to drive top line revenues that over time convert into profitability. So that's in the quarter. We Increased marketing, which means, of course, isolated production margins went down. So what we look at is the group performance and making sure that we allocate marketing where we see the best return.
Understood. Thank you. That's all for me.
Thank you, Erik. Operator, do we have any more questions?
There are no further questions at this time. Please continue.
Thank you, operator. That concludes the conference call for MTG's 2nd quarter interim report. We appreciate you taking the time to join the call today despite summer vacations for some of you, and we look forward to staying in touch until we release the next full report That will be in October or more specifically, the 28th October. Thank you very much, and enjoy the rest of the summer. Bye bye.
That does conclude our conference for today. Thank you all for participating.