Thank you. Wow, that is probably the coolest intro I've ever had in my life. Thank you for that and thank you for this iconic music that we've also got to this show today. Welcome everyone. This is our first Capital Markets Day for three years. I think it's fair to say that there has happened a lot of things during these three years. If you're asking us at least, we are extremely proud of the journey that we had over the last three years. What we are even more so excited about is of course what we're going to talk about today. Hopefully all of you read our press release this morning, so you know there's a lot of exciting things to talk about today.
We'll do a recap during the day today about the past, and that should get you even more excited about the future we have ahead of us. Before we go into that, I actually want to bring you on the inside of our gaming village to make you feel what it is that we are experiencing on a daily basis.
Every child in every culture will do the same thing.
Give them a stick and they'll turn.
It into a sword, a wand, a steering wheel.
Play is how we learn, how we imagine, how we build worlds.
We never stop.
With more than 3 billion players worldwide, gaming has become the single largest entertainment market on earth. Some go beyond play.
They make the game.
Here at MTG, we have built.
A place that game makers can call home.
We call it the gaming village.
A place where studios keep their culture.
Identity and creativity, but benefit from shared.
Resources so they can grow together. This is just the beginning. We have more to learn, more games to launch, more studios to welcome to our gaming village.
We are MTG and we are made to grow.
Cool. That is actually what we're all about. That's what we're passionate about. We are passionate about bringing great games, game makers, and people together and inspire great things together. That is really what we'll focus on today as well. I mean to the headliner here, who is MTG and who we are and what do we believe in? I've been with the company for over 20 years, which tells you also I'm getting older. If there's one thing that we've always believed in, it's about being relevant in entertainment. That has guided sort of my 20+ years within MTG.
Sure enough, we have for sure looked different throughout the years and I think we look more exciting than ever where we are today because gaming, whether you want to contest it or not, there are 3 billion gamers out there and our job is to make sure we provide great entertainment through them. The way we do that is by building our gaming village, which is a journey we've been on for several years. In this journey, it's about collecting some of the best game makers, the most talented people, and put them in the same room and actually make us better together. The theme that we're having today is all about MTG. As you saw in the movie, MTG can be about made to grow, made to game.
Today we're actually going to focus about MTG as being one of the most market leading gaming companies out there, about how we are transforming as a company and how we also aim to grow. That is the journey of the day. That's how we divide the presentations today. I think we should get started. MTG has always been around a buy and build strategy in any company. The true value creation sits in driving organic growth, having great businesses that deliver over time value creation through higher revenues and bottom line. That is quite simple. The way that we wanted to do that is by finding companies which you can clearly see here around the world that are unified by three key metrics. That is what's been guiding our mantra as we've been acquiring them. Finding companies with first and foremost has amazing game, we call that evergreen game.
That is something you will hear a lot about today from me, from Arnd , from Yoav, from Oliver, from Nick . All of us will touch on this concept. The second one is about the people we want to make sure we find. People that share our vision, share our vision about building a gaming village, share our vision about continuously our job to strive to make better games for our customers, and that want to be part of our journey. The last part, which is equally important, is about finding companies also with a strong financial profile that helps us become better together. That's what we've done. That's how we found six of these companies. That gives us today a true global footprint. It gives us over 90 live games that help us entertain over 9 million users on a daily basis.
That also gives us the opportunity to report over $1 billion as revenues on an annualized basis. How do we do this? How do we entertain the 9 million people? I have said it and I will say it many times during this presentation, it is all about the games. Here you can see the biggest franchises of our top or the biggest IPs of our top studios. I think what we have always, when we looked at the companies that we discussed to buy and that we then onboard to our companies, as I said, it is about the opportunity either that they're already having or that they will have a game that turns into an evergreen IP. As you clearly can see here in all our studios, all the games that we're having are category-leading games in their respective franchise.
You may ask yourselves why is that so important? It comes back again to relevance. We are competing with streaming platforms, with movie theaters, with sports events. People only have so much excess time to provide entertainment and enjoy entertainment, and we need to deserve it. With these games as clear category leaders, we clearly deserve it, which means that customers are coming back to our games over and over again. This also allows us to continue to invest in the game. What that means is that we're having big teams behind these games that continue to extend the customer journey, continue to add exciting content and events, tournaments that continue to extend the lifetime journey for the players. Second of all, it also allows us to continue to invest in marketing, which also increases the reach of this game, which onboards new customers into the game.
That is the foundation and the bread and butter of our organic growth. Taking these six games then that I show you on the screen, these actually constitute 60% of our revenues as a group. To just also explain the magnitude and the importance of these games, and I think equally important to also discuss the longevity around the games. We'll come back to this topic several times during the day. It is important to call out, for example, Snowprint and Warhammer 40,000 , which was one recent acquisition. They are quite early on the game. We still see it as an iconic IP, but it's only a three-year-old game, which means that has a very long time ahead of themselves to entertain the customers.
On the other side, when you take the Bloons IP in the franchise, that's a franchise that's been around soon for 20 years, and that is becoming what we actually would call generational. That tells you that if you have games that are relevant, they also live for a very long time, and they also allow you to continue to invest in them and drive organic growth and value creation. As I said, we are a buy and build story, but we're very disciplined. Buy and build story. We have selectively added companies to the portfolio, and we've been on this journey now since 2017. Sure enough, we accelerated the last couple of years, but the journey actually started back in 2017, us acquiring InnoGames, and I think we do pride ourselves on this journey.
As I said in the beginning, we are extremely proud about the story and the company that we're building. I think one of it comes back to, as I said, as we buying companies. Yes, M&A is an important accelerator to everything we do, but the foundation is to have companies that can deliver a strong financial performance of their own metrics as well. What you can clearly see on this slide is, sure enough, the market has had its ups and the market has had its downs, but we have consistently performed over this period of time, regardless of what the market has had in for us. That is something I'm very excited about. That also shows the strength of the companies that we acquired and how we're coming together as a village. To just put into context, it was just actually a fun stat.
I looked up when we actually reported for the first time InnoGames in Q2 2017, that is eight years ago, we actually reported just short of $30 million or NOK 300 million . Fast forward eight years, Q2 2025, we were actually north of $300 million or NOK 3 billion , which is actually a tenfold increase over the last eight years. We had a very similar performance also on the bottom line, profitability. Again, coming back to the credibility of our execution power and also our disciplined M&A approach. I think it's fair to ask, I mean, and again, I've been in the company for over 20 years. What drives this transformation and what gets us excited about what we want to build? I think it is that passion for us and I think it is a DNA that we have always had at MTG and that I'm very proud of.
It is our passion to always try to be a little bit better tomorrow. It's our passion to make sure we are relevant and it's also a disciplined approach to understand are we a good owner or are we not a good owner. Yes, we have over the time changed shape and form quite a lot of times. I've seen many versions of MTG during my period here, but we've always been extremely disciplined in what we want to achieve. I want to call out two main transformation points that also sit in the area sort of during my leadership and our team that we currently have. I think the first one to call out is the ESL transaction. That, sure enough, was quite some time ago, but it is an important testament to how we think about when we operate our businesses.
I mean, we love and we're still very good friends with ESL people and it's an amazing business, but it wasn't. We were not a good owner of that business. We could not support the growth journey that they wanted to have. Equally, we managed then to find them a better home and we managed to crystallize value for our shareholders. I think that is a very good way to look at how we operate our business. Also, with that transaction, we also managed, not only did we distribute money to our shareholder, we also kept to do the second transformative acquisition that we will speak later about today as well. That was the acquisition of Plarium. Plarium doubles us in size for most financial metrics, whether it's top line, bottom line and cash flow.
Yes, it's indeed transformative in so many ways and it also puts us on the map where we always strive to be one of the leading mobile gaming companies. With that notion of change, I'm not sure how patient and observant you were when you came in today. I'm hoping you noticed something new maybe. With change, I've talked a lot about change internally and trust me, since the acquisition it is about transform and elevate the way we work. I don't think it's enough to just talk about it. We also want to live it, and that's why we also created this movie on back of our new brand image. Hopefully you have noted that we both changed the color a little bit, and we have made a new logo. Why do we do that?
It is also about making sure that not only are we walking the talk, we also live and breathe, and we actually look the way that we feel. I think that MTG, in a good way, we are keeping what has kept us and brought us to here, which means the color and the name. We are also evolving what the MTG can stand for. I think what is also interesting and fun, which I want to call out, is also the way we actually did it. We actually launched an internal competition to make sure we also engaged all our people, to also ask them to say if you actually could provide inspiration to us, how would you actually change and evolve the logo? What does MTG actually mean to you?
Based on the feedback we got from them, yes, sure enough, we worked with an external studio, but that's actually what ended up both MTG and also what ended up being made to grow, made to game, and so forth. I'm really happy that it is not something we're just sitting and thinking about in the chips room. It is actually something we did together with our team, and that's how we like to operate. Moving down a little bit to the future, I want to just call out a few things. I mean, I've been asked during many of the meetings the last six months, like what excited you about Plarium, what does that give you, and how do you become better? I think that is all very fair questions, and you can argue Plarium to some degree is a little bit of a different acquisition for us.
What we've done in the past, and it's definitely bigger, but it still ticks all the same boxes that we've been extremely disciplined about, which comes down to the IP. You will hear Arnd and Stas later talk about Raid. I mean, Raid is an iconic evergreen IP that we admired from the side before, and now we actually bring that within our family. That is amazing. What is equally exciting is, of course, to bring the talent of Raid in, with also the opportunities that that team or other teams that work with them are also working on new games. That is the number 1, 2, 3 items in all fairness. Second of all, you heard us speak many times and also in the videos here about the gaming village.
We are big believers that we are stronger together, that we want to build a village, a home where game makers can thrive, where we build shared tech and tools and services that can accelerate everything that we've done. We haven't got the full tech suite. What we're now getting also as a part of the Plarium acquisition is really best-in-class proprietary tech that is also built to service third party, which we can now start to roll out across our Midcore district. Last and not least, scale is important. It's not just scale for getting bigger. I mean we've done many M&As, but we've never done it just for getting big. You need to have the relevant scale, which means that it fits into what we are building, what we aspire to do, and the pieces that we have and the buildings we have in our village.
That is truly where Plarium gives us relevant stakes and gives us the ability to do more going forward. That is also why we provided the announcement the other week about us still being in one gaming village, but we're moving to two different divisions. I want to call out a little bit sort of what we worked on and why we worked on it since the acquisition of Plarium. You can argue putting almost two equal-sized companies next to each other. You're also putting two companies from different cultures, different ways, and you have excellence in different areas. What we spent a lot of time on doing is really to elevate what I usually say, the best of both worlds. This is a great opportunity for us to actually revisit and challenge ourselves.
Where do we do bad, where do we do good, how do we elevate the things that we do well, and how do we put the pieces together? I think one of the things I wouldn't say that we haven't sort of failed on it, but we haven't been able to fully execute it is our flow platform. We always spoke to you about we want to build out the flow platform, but we were never scaled enough. Now we actually get in the scale. Second of all, I think one of the lessons learned we also had when we looked at our flow platform in the old MTG village is that the two biggest companies we had were InnoGames on one side and then PlaySimple on the other side.
There are a lot of soft synergies and learnings that we can share between and where we can challenge each other. The real value drivers of the true synergies look different on the casual side versus the Midcore side. That is also why we're now moving into two districts to make sure that we can actually unleash value in both of the districts. That also means that it doesn't stop there. We also at the headquarter will change and evolve the way we're working. I think that goes according to the same mantra. Our job is always to push ourselves to sort of ask the question where are we best, where do we add the most value, how do we structure ourselves. I've always said in the past that we will never do game at Shaftesburg, and I don't think we should start now either.
We've even more powered the divisions to actually run and do the operations together with the studios and build that synergy flywheel around the platforms and empower the studios where they are the best, making the game, keeping that culture. That's also extremely important. I think rather at the headquarter we will focus together, of course, will be the architects of the district of the villages. We will be focusing on capital allocation and value creation, M&A and public market, which means that we will evolve together with the district over time. Of course, you see as we shaded here, we would love to be able to introduce also future districts in the village. That's what we always done in MTG, we always pushed ourselves to try to look at around the corner, what can be there, but also to manage expectation that's not going to happen tomorrow.
I mean we're quite busy building what we're supposed to do in the casual Midcore, but we are going to start to look at that and that is hopefully something over time we can come back to you around. To go a little bit further into the details, why does it then make sense to have different districts? Because we're building up different leadership team working across the spectra, and you can argue on one end the value drivers on the organic side, they pretty much look the same across casual and Midcore. It starts with the color games that we're having. It's about making sure continuously update them, make them more excited for the customers. That is our bread and butter, is about the new games pipeline.
How can we make sure that through the combined talent we have in the group, combined data, combined creativity that we have around the group, how can we make sure we get more shots at the goal, we get a higher accuracy in the track record of creating the winners, and we also going to fail faster. Those are all things that we want to aspire both on the cash and the Midcore and we want to build a platform approach, which is something both Yoav and Oliver will speak about later. The house differs in cash flow and Midcore. The drivers are different on how do we create that flywheel on an organic basis. I would say on the inorganic value drivers, the levers are even more distinct.
That is why we would like to also empower the leaders of the casual and the Midcore district to own their own units. If we look and start on the Midcore, you can argue that is the biggest part of our business today. That is 80% of our revenues. That is already a scale player. We can start now post the Plarium acquisition and the rollout of the proprietary tech. That's when we can start to build an integrated operating unit and with that create a more agile, faster, more efficient organization and hopefully also getting better shots at the goal. As the outcome of that, which we also announced this morning, was a $20 million cost saving efficiency program that we expect to have sort of rolled out during next year and also reach that runtime value by the end of the year.
That is one part of creating the new operating model. Yes, we want to create a more agile, efficient organization, but the second part, which goes for the Midcore unit, is also about making sure we create an even better home for new game makers. As you say, we would love to find more smaller Snowprints of the world where you're finding younger companies, smaller, fast-growing companies with an amazing opportunity to scale that do not have the tech and tool platform that we can actually offer for them as a plug and play. As we all know, the barriers to entry in gaming are getting lower and lower. Having the tool set to scale and having the funds to scale, I would argue that is almost an indirect barrier to entry that we're starting to see in gaming.
If you then look on the casual side where we have PlaySimple, which is an amazing foundation, and PlaySimple also built an amazing platform, Little Engine, which is their flywheel. The challenge with the casual segment, it's a party of one, and we would like to build the same journey on the casual side as we've done in the Midcore side, which means that we would like to find more relevant sized M&A to come in on the casual side. In order to do so, we also need an M&A currency, and we also would like to make sure that we leverage on the amazing growth story that we're having at PlaySimple in India. That is also why, on a value creation lever on the cashless side, we are exploring a potential IPO of PlaySimple in India. Why do we then do that?
I think it's important to call out as we explore that and we undertake that study. We want to remain majority owner of PlaySimple because we truly believe in the cash consolidation opportunity. We equally believe that there is a very exciting opportunity where we could realize both shareholder value through secondary listing in India. Also, equally exciting for the future, it could be an accelerator to drive the consolidation on the cashless side the same way we've done on the Midcore side. That is also why we believe that two districts, and maybe over time three districts, make sense. We keep all the good things about being a village. We collaborate, we share, we work together, but we also make sure that we enable the distinct value levers that each district has.
To wrap it all up, last time when we presented to you, we presented a bold ambition that we were going to double the company. Some of you may believe that, some of you may not. We are actually doing the same today, and I think based on my presentation and what you will hear later on today, I am a firm believer that based on where we are today with the organic growth drivers that I just called out, and you will hear later on today with the synergy potential as we build out the platform play both on the revenue side and the cost side that can then be reinvested into growth on top of that accretive value creation, M&A. We do have all the opportunities, and we have the full toolbox to actually over mid to long term double the size again.
That is what keeps me excited about today and the future. That is also what you will hear from my colleagues during the rest of the day, which they will talk more about. With that, I'm coming back again to today's agenda, and we've been very creative, so we're focusing it about MTG, market leadership, transformation, and growth. I will start to hand over to my colleague Arnd, who will take you through our market leader position.
Hello and servos to everyone. Welcome to our cozy gaming village. Let me reassure you, you made the right decision today to be here and spend the afternoon with us. It will be full of valuable insights, fact and some entertainment. Let's think for a moment about this. Every culture, every generation had their cultural revolution. The seventies had rock. I don't know who have experienced that revolution. The 80s have cinema, the 2000s streaming and this decade belongs to gaming. Show me your hands. Who has played a game the last four weeks? Wow, that's much, much stronger than three years ago. I would say congrats, you're part of the biggest entertainment audience in the world. Gaming is by far the biggest entertainment form on the planet. It's bigger than movies, bigger than streaming and bigger than music. MTG is at the heart of this massive shift.
Today I want to show you how we have turned a bold ambition back in 2022 into reality and why we are now perfectly positioned to double again in size. There are billions of gamers out there, 3 billion that dive every day into new worlds. They build empires, they compete with strangers who become friends. The average gamer is not your stereotype teenager in the basement. It's actually this audience, average age 31, and half of the players are women. Also, half of this market happens here on this device. This tiny screen is the biggest entertainment stage in the world. We are entertaining them with our portfolio. The good news is when you look at the history of gaming, it is a story of innovation. Constant innovation from arcade to PC, console, mobile and now AI driven gameplay.
The next wave will be fueled by three things: generative AI, and probably in three years at our next Capital Market Day, there's a better AI agent than myself. That's why I enjoy this Capital Market Day. There's direct-to-consumer models we're going to see driving the growth and rewarded play. We are well equipped to surf this wave and benefit from it. Also, good news is that the market momentum is back after the COVID boom. We've seen great peaks and the correction afterwards which gave the market a bit of depression. Now we are back in mobile gaming at the COVID peak and the market is growing single digit. The players are spending more time, more money than ever on mobile games and our portfolio is right at the center of that momentum.
Now let's look back for a second at what we promised you and told you at our last Capital Markets Day three years ago. We set clear goals. We wanted to double revenue and EBITDA. Fast forward to today, we can say mission accomplished. We did what we said we would do and we did even more. We achieved this through three things: organic growth, value accretive M&A, and operational synergies. The best thing is we did all of this without any shareholder dilution. That's what we're most proud of, how we did it. As Maria mentioned, think the best deal ever. Everyone was happy back in 2022 when we handed over our friends from ESL and DreamHack to the PIF and we generated $8 billion in exit proceeds from this. Over the years, we generated $3 billion in free cash flow.
We got some $3 billion as a step from the bank and that enabled us to invest $10 billion in high quality game studios and driven entrepreneurs who joined the gaming village. At the same time, we also returned SEK 4 billion to our shareholder. That's what I would call capital recycling at its best. It's growth driven by discipline. This disciplined buy and build strategy, leveraged by utilizing the best platforms in the world, has put us on the map. We became a true contender in global gaming. We are a top 10 game publisher in the Western world. We are the number one listed mobile-first gaming company in Europe. We are number two in the West. This is not just scale. This is a strategic position to further drive consolidation. That's a pole position. Our superpower is our diversification in revenues and game genres.
Our portfolio is highly diversified and balanced. We manage evergreen titles like Forge of Empires and also rapidly growing new titles like Tacticus and Heroes of Histories. 70% of the revenues is generated from these established evergreen titles and the rest fuels new launches and development. That balance gives us predictability and stability. On top, we have a huge upside. By far the biggest flagship brand is Raid. This very sympathetic gentleman, Raid is one of the most recognized brands in gaming. It is one of the most monetized brands. If you ask any random gamer what mobile game they know, I'm pretty sure there are high chances that they would come up with Raid. Raid isn't just a game, it's really a cultural icon. You're going to hear more about Raid from one of the makers.
Stas and I sit down for an interview in a few seconds with him. Let me sum it up. What brought us here today? We are a scaled, diversified player. We have the right people, we have the platforms and capabilities to win in gaming. Our ambition is still the same. We want to double over the next years. The best part is we're just getting started. I don't know who has ever played the weight here in the room. Rasmus, I count on you. Thank you. Okay, then you're familiar with the deep gameplay. I think it's important to bring this to life, to live and breathe weight. To give you a bit of an insight, I bought a little video.
Guys, we're about to hit a cliché.
Help me out.
Coming through. Oh, that looks expensive.
Sorry.
Slow mo in a chase.
I'm losing him.
This arena is booked until 3:30 P.M.
Yo, the biggie one reminds me of Beepa. Stuff it ref.
He didn't make the cut.
The Teenage Mutant Ninja Turtles have arrived.
In the Raid: Shadow Legends universe.
Play now to claim your free legendary Michelangelo Champion.
Cool video. Stas, welcome on stage.
Thank you. Thank you for having me.
Stas, we all have the same challenge that we want our parents to understand what we're doing for a living. I totally failed. She still has no clue what I'm doing here. How do you explain your mother how you ended up in gaming?
My mother loves our videos a lot. She's like you're doing something cool. My father, he was all his life into meteorological business. He still, I guess, doesn't believe that I have a real job, to be honest.
What did you bring to PlaySimple to this cool company and Wade?
I have a degree of international economy and I started my career as a Project Manager in IT at outsourcing Kharkiv. I've been playing games for my whole life since I was nine years old when it was a requirement for me. You end the year with all A's and we will buy you the PC, and it was challenge accepted. I will do it. I've been playing games for my whole life. When Plarium appeared in Kharkiv and started a very diverse campaign of getting people into the company, I decided to start and that's how I went to Plarium in 2014 as a Project Manager on strategy games, on mobile games then, and at some point my position changed to Game Design Producer.
In 2020, when we realized that the whole focus should be on Raid because after COVID it was running better and better, that's when I became the Associate Game Director first and now I'm working as a Game Director of Raid.
More than five years now. This is actually the red thread when you meet the passionate game makers from Plarium. Most of them are 10 years and more with the company. You might wonder why we have the swords here, not only to wake you up but also just to talk about the game and why sword and digital items are important. Can you explain to us in simple words how Raid works? Why is this game so special?
If talking about how Raid works, it's quite a simple model. You get in the champions, you're getting heroes. Champions we call it in a different way. You go to beat the content, beat the bosses, beat the challenges. When you beat it, your champions get experience. You level them up, you get the better gear for them, and you go to beat harder bosses and more and more and more. It's not enough to get one champion, you have to get a roster of them because you should play with a combination of them. That's the whole, as we call it, game loop. Getting champion fight, get some better gear, fight again and get more champions. That's how it works.
Sounds very simple.
Yep.
How much time are people spending in the game? Like a session per day?
That could be a very huge number. The most engaged players can play like the whole day. It's like running in the background, but you play the whole day. Specifically, I'm playing Raid for the whole day, every day because I love the game, because I work on it, it's how it works. Yeah, the engaged players play a lot. It varies. Mobile sessions are not so long, but on PC they played just enormous.
How long is the average session like played session?
It depends on the cohort. We always speak about the cohorts of the players, but it could be around an hour per day.
One hour per day.
Yeah, it could be. It could be, yeah.
To give an idea, the average revenue per paying player per month is roughly the ballpark.
I guess for last, like I will refer to last six months because we are online for seven years, it could vary from $140- $160 a month as RPPU for players. Yeah.
Speaking of dollars, how do you monetize in a free to play game these paying players? How do you make them pay?
To be honest, again, we are game developers, we are building games. First of all, yeah, it's not when you build the games, it's aimed on monetization. Players are not fools. They feel it, they feel that you should respect them, you should respect their time. We are not building the game specifically to monetize. Of course it's a business and we remember about it. First of all, you have to build the universe and the world and the value for them to understand that it is enough, that it's worth it to invest first of all their time, the time to be in the community, the time to create the content about the game, et cetera, et cetera.
Then it goes to monetization because some players want to just support the developer of the amazing game, some players want to progress faster, some players want to be the best of everywhere and they want to beat everyone on PvP. It depends. First of all, we are about creating the great game.
And the game is now five, six years old. I mean it's fairly young. What attracted us is we believe this is a powerful evergreen title. How do you see the future? How do you keep players engaged for the next five, ten years?
Yeah, just five years ago I had a conversation with Head of Product and we discussed the future and my assumption was like, like obviously we want this game to perform five more years. He was just casually correcting me, 10. It's 10. I was like, oh, okay, okay, 10. Now after the five years I can say I guess five years more is not the limit. Because in this five years of development, what we've seen, we've seen how passionate our players are, we've seen how engaged our team is and you know, when we release new features and we release new content, for example, a couple of weeks ago, we've teased the new factions that will come in March 2026, and of course we get reviews like somebody likes it was a Greek zine faction.
Somebody likes, somebody not, but the main takeout from it was a lot of players suggested, oh, it's the last faction. Would you guys do more? They started to suggest more and more factions they want to see in the game. We are like, oh, so 16 factions is not enough. They want more. This gives us the understanding that players actually await more and more challenge from the game. They want to see more, they want to keep playing it, they enjoy it. That's what will make me very optimistic about the future.
Raid is known for its fantastic graphics and the polished design, everything. When we just saw the Ninja Turtle integration, how does it work, these IP integrations? There's a combination with LiveOps, which is the magic source and how you grow a game, keep the players engaged. What's the strategy behind these IP integrations?
With IP overall, the idea of IP is a perfect fit for Raid with specific reasons. The first one is that when Raid was designed, it was designed not just like another dark fantasy game. It's obviously a dark fantasy game, but what we want from it and how all the champions are designed, you will see a lot of references to popular culture in Raid on every aspect of our world. We see it as part of the popular culture, we see it as a part of gaming culture. When you have the IP like Ninja Turtles that you've seen, it's a great opportunity for us to show how we see these characters in our setting, how we can create the Ninja Turtles.
With this video that you've showed, we had a lot of comments like, that's how I want to see the Michael Bay movie, the next one, because the art design is magnificent. It is a good fit for us. We want to express ourselves and show how it could be. It's good for our players because it's characters maybe from their childhood. Maybe it's just a character that they like, that they love. They are very happy to have the opportunity to see the character they love in the game and to play it. This is the first part and the second part you mentioned, dive ops. What you want to have is Raid. Again, we're in the entertainment business. Raid competes not only with other games. In mobile, we compete with PC games, we compete with streaming platforms, we compete with live sports.
What we are aiming is to bring to our players events, not like do dragon 20 x. We want to bring them emotions. We want to bring something big, some big events. Therefore, hype helps us a lot.
You're in super close contact and listen to the community. I heard there are already babies and couples.
There's a lot I see. I'm watching all the videos about the community because we have a bunch of content creators and our community is very diverse. Reddit is one part of the community. Content creators on YouTube is a different one. Discord is a separate one. With the community, we have all the stories when people met playing Raid. They have their families established playing Raid, etc. It's great stories and we like it because it's a part of a great community, which is always a part of a great game because it means that you can create something that connects people and that's very important.
That's cool.
Who's spending more than EUR 50 at weight so far? No one. Are you so sweet cheap here.
Oh really?
Okay, Oliver.
Thank you, Ollie.
Any question from the audience to Stas?
Good.
When are we going to see the Raid movie coming?
I'm learning more about the game, and if you ask me about the game and its future, I can say to you that we have a full pipeline for 2026.
How long do you play in advance? IP integrations, events.
2026 is not in a matter of discussion anymore. We know everything we're going to do in 2026. We are finalizing understanding of 2027, all the APs of 2027 and all the features of 2027. The game design team actually works right now and we have the shape of 2028 as well. It's two, three years. I guess movie it's not to me.
Let's see.
I'm fully booked.
Thank you, Stas.
Thank you very much for having me.
I hand over to our birthday kid, Oliver. Not yet.
Hi everyone.
Let's be quick and done .
Those of you who don't know me, I'm Anton. I do investor relations for MTG. We've come to the first opportunity to ask some questions.
I would like to welcome back Maria and Arnd are on stage and there will be mics run around. We ask you to hold the mic before you ask questions so that our colleagues on stream can hear what you're asking. We have about 10 minutes.
If we need it.
There will be more opportunities to ask questions later as well, for anyone who wants to kick us off. All right. Maybe also to mention that there's a QR code that you can scan with your phone if you wanted to write the questions in the chat, which is also an option.
Our first question.
Martin, go ahead.
Hi guys.
I'm Martin Arnell with DNB Carnegie.
So.
Looking at this Plarium acquisition, and you mentioned some savings today in this morning's release, can you give some more color on the specific synergies?
Absolutely. I think that it will come a little bit from Oliver in his speech about the Midcore and also from Nick on that side. To give you a little bit of context, yes it is savings, but it's a part of change in the way we operate, and I think that is actually the more important theme. Buying Plarium enables us to elevate the way we work. I mean, you've heard me, you heard Arnd talking many times about building a gaming village, building it around shared tech and tools, proprietary platform that can actually both accelerate Flywheel. It also means that we don't need to duplicate the ways we work in each and every studio. We still want the studio to be empowered to do what they do today, make the great games, keep the unique culture.
I think that is what has driven a large degree of our success to date. I am also convinced that we can do things even smarter, more agile. It will be a combination of, yes, there will be headcount reductions, but they're also changing the ways we are working, which means that you can change the way you actually source agreements, the way you actually work with outsourcing partners, and you can actually find a more agile approach to that. It is a combination of different drivers. The most important part is it's not a cost cutting exercise. It's an evolution on the way we operate, building a more agile, future-proof organization that can also afford to invest more into new games ideas because we are only going to be as good in the future as our games are. I think that is really important.
Thank you. Second question on Raid, what do you think would be the most important part to make it return to growth year on year?
In all fairness, Raid was growing in Q2. I think the team at Plarium does, they do an amazing job on the LiveOps. I spent two days in Warsaw listening to both the new game, which I'm not allowed to call out, and also the Raid workshop. The way they think about LiveOps, the way they actually plan the calendar, 2026 already set, 2027 well underway, starting to think about 2028. I couldn't ask for more. I think where we can do even better is to figure out how do we, from a capital allocation point of view, sort of make sure we find a way to optimize our marketing spend. Can we actually invest even more on back of the amazing performance that the team is doing? Can we get those incremental sort of users in on healthy ROAS?
I think there is an exciting opportunity, but what the team is doing I think is amazing. If they're then saying we have more ideas, that we can even build more things, but we need a few more headcounts, I think that is a conversation to be had. That's also why the transformation program is so important, because we want to create space to also invest more where it makes sense.
All right, we have a question over there.
Hi, Jacob Adler from Danske Bank. Just one question. You talked about doubling revenues once again in the midterm, and in that bridge, revenue synergies was one part of it. Could you give some maybe concrete examples of what you think could contribute the most to revenue synergies over time outside of the cost synergies we talked about?
Yeah. One thing is you can imagine the shared experience that Raid: Shadow Legends is having and also Forge of Empires are having. Having a 6-year-old and a 10-year-old with a live op experience, adding that into some of our new games can accelerate the way we actually push out LiveOps and new updates to the teams. Making sure we collaborate on marketing, making sure that we can actually, through rollouts on one marketing platform, spend more efficiently, which means that we can also allow ourselves to reinvest more to drive revenue growth. We have direct-to-consumer as an amazing opportunity where we have, for example, Plarium and PlaySimple that have their own launcher. I mean, we've just now started to test to put Heroes of History onto that platform. There are many more games that we could add, so I would say there's quite a wide variety.
It's fair to say that we haven't called out the number on that in the press release. I think it's also fair to say that most people discount that quite heavily and they look at the cost synergies. That's why we actually focused on that in the press release. That doesn't mean that as a part of building the operating Midcore cluster, of course we would like to make the most of our games that goes with that thing.
Plus, we have built now valuable audience network on the Midcore side where you can cross-promote and keep the player in our game portfolio.
Perfect. The second question if I may, I mean you've given a revenue guidance of 3% to 7% growth. Would you say Plarium also could be able to grow in that range, and if so, what is the most important? Because if we look at the last quarters, you've had low single-digit growth in Raid, but the other 30% of the portfolio has been declining. To kind of get into that range, do we need to see an acceleration of Raid, fix the other 30%, or is it more about the new games that you might talk about later today?
Yeah, I mean we never break out the guidance per studio and we're not starting today either. I think it's fair to say that that is a blended average, which means that everyone is contributing. If you ask me do I believe there's more potential in Raid? Yes, I do. I think in order to get to the next elevated growth levels, because they also have some legacy game that is not growing, we also need to get the new games to the market. I think that is exciting. The 3 to 7 is a blended average between, sort of, you can argue the old MTG studios plus Plarium, and I think when we bought initially Plarium we said that this is an amazing valuable company with an amazing growth optionality, and in order to unleash that growth optionality, yes, we need their new games to come to the market.
The foundation we have in Raid—hopefully you all felt the excitement when Stas talked about it—because I am so impressed by how the team is working and I think there is much more potential in the game.
Hello, Simon Jönsson from ABG. Maria, you talked a bit about potentially.
Adding another platform or district.
Could you maybe talk a little bit more about how that could look like? Would it be like a different game genre or something completely different, or what's your feeling?
We have the casual district with much more potential and growth ambition. If you take all the tools and tech, how we do user acquisition, BI analytics, our ATV prediction model, this is such a sophisticated, superior way to manage, develop products, and acquire users. Imagine if we apply all this to other playable app segments, if it's meditation, music, others, where monetization is based on subscription, ad revenues, or even IAP. If you look at Duolingo, they went through the roof and they added gamified features like leaderboards and others. This is more a mid long term idea to also expand into other adjacent playable apps areas where you can leverage our platform from gaming, including cross promotion, everything else.
It's a huge opportunity because I don't know any other digital industry which is so sophisticated in how they leverage data and develop products, engage users, and monetize them, and that's a huge opportunity for us.
Okay, interesting.
Thanks.
Hi, Rasmus Engberg with Kepler Cheuvreux.
I was thinking about launching new games. You have this, you know, cycle of where a game is. How many successes do you need? Do you need one per year, or how do you think about that? How many shots do you think you need per success?
The last one is a million dollar question. How many shots do you need to win and score? I think that is what we also believe now, Bill, in the Midcore and the casual cluster, that we can improve the hit rate because it is, it is, that is when people say in gaming is a hit driven business. I tend to disagree to the vast majority that actually when you get a game to scale, there's a lot of processes and KPIs that drives the performance and predictability in the cohort. There is of course in the creative part to make a game work, there is a hit driven element. Yes, we want to improve that accuracy. I can't tell you how many sort of shots we need in order to actually hit the one game.
What I can tell you to put into context, I mean we know for example when PlaySimple launched Word Games and how that scaled up, how that massively impacted sort of our total revenue growth as a company. The same as we acquired Snowprint Studios and we saw this rapid growth from Warhammer 40,000: Tacticus, equally that was possibly contributing to our top line performance. This means that yes, we want more than one game per year. That goes without saying. We want to have as high accuracy as we possibly can. To be able to have one game coming out does make a difference. We aim to strive higher than that. We all know that the one thing we cannot predict is when we will have that one. Our job is to make sure we improve the accuracy as much as we can.
All right. Thank you very much.
Thank you.
That concludes our first block.
All right, so now we're going to.
Take a short break, bathroom and coffee break, and we'll see you back here in about maximum 10 minutes. At 10 past, we will start again. We'll just give the few last people just a moment to get in, and then we will close the doors and continue. All right, for our next segment, I would like to welcome Oliver up to the stage. He is the CEO of the Midcore District, and you will introduce yourself.
Thank you, Anton. There we go. Good afternoon everybody. As Anton said, my name's Oliver, I'm the CEO of the newly formed Midcore District. My background is in game making, so I've spent over 15 years making games in some incredible places like Zynga, King, Rovio, and before that I spent many years living in China where Free to Play was kind of born. I know the experience of being a game developer, a studio lead, and an executive. In this new role we're going to see what we can do as a group of studios as the Midcore District. I'm going to spend the next 40 minutes going into more detail around that Midcore District. What is it? What do we hope to achieve as a district and why is it an incredibly exciting journey that we're about to go on with the studios.
The Midcore District consists of five incredible studios, but at the heart of it is always the games. We have 66 live games out there today being made by over 1,900 of the world's best game makers, spread across more than 10 different locations and always striving to make the very best games for our players. As Arnd and Maria said earlier, the Midcore District makes up about 80% of MTG's revenue today. The other thing you'll see here is the incredible diversity of the games within the Midcore District. Midcore here doesn't just mean games like Raid, which are incredibly complex with years and years, years worth of content and systems. It's also things like Bloons TD 6, which appeals to a quite different audience to Raid.
This variety is one of our strengths as a Midcore District because it means that as games and genres become popular, player interests shift. We're always there to have something to offer the players. I want to highlight five of the key games in the Midcore District and talk a little bit about them. Raid: Shadow Legends there, with $2.6 billion in lifetime revenue, that puts it into a group of games, a very, very exclusive group. There are very few who have reached such heights. What's also incredibly exciting, as you heard from Stas, is that that journey for Raid is far from over. I'll show later a little bit some of the excitement we have and why we believe that Raid has many, many, many years ahead of it. Forge of Empires is also in the billion dollar club, $1.4 billion in lifetime revenue, launched in 2012.
That game has been around now for over 13 years. What it proves is that when you have a game made by an amazing team with consistent delivery and execution, incredible live ops, you can build games that last over a decade. Our belief and our hope as a Midcore district is that we want games that last over a decade, that players will continue to love, continue to play for many, many years. Warhammer 40,000: Tacticus, from the amazing team at Snowprint Studios, highlights another opportunity. That is where you work with an IP that exists outside of video games. Warhammer, born in the UK from tabletop gaming, today has TV shows, books, and games outside of just Tacticus. It is an IP that exists in entertainment. By using that IP to make an amazing mobile game, we are able to become part of that world.
That means that the Warhammer fans around the world, when they come to the store, look for a Warhammer game. We are right there and they know what Warhammer means. It means quality, it means incredible characters, and it means collection. We are able to leverage work done by others in their IP and bring it to our games. F1, another IP. In many ways, it is not ours. Unfortunately, we did not invent F1, but what we did do is say, what would F1 look like if you brought it to mobile? When you take something like a sport and you bring it to mobile or to gaming, you get all of the benefits of a sport. You get the seasonality. Every single year there is a new season in F1, and we reflect that in the game. Every single year we have a reset.
We bring in the new drivers, the new locations, the new teams, the new personalities. We are able to say you have watched it on TV, you have seen your drivers that you like or dislike, now come and experience it in the game just the same. Finally, Bloons TD 6, a franchise that I remember playing as a child on PC, is still around and relevant today. It attracts a slightly different audience, but it is the same core fundamentals. Games with years and years and years of content that is always updated and is available in many different locations. Bloons TD 6, I think I have almost lost count of how many platforms it is on. It is on Apple, it is on Google, it is on PlayStation, it is on Xbox, it is on Steam, it is on Epic. Many, many places.
That shows that when you have a game that works, you should go where the players are. That is what we always strive to do. We will take a minute and see some of our games in action.
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Made by our incredible in-house video team as well. We've talked a lot and Maria talked about Midcore and casual. What does that really mean in your minds? You might have certain definitions, but when we talk about Midcore and casual, here's what we're really talking about. In Midcore and Midcore games, it's all about incredibly deep progression and the ability for players to make progress, make choices, and make investments in the game for years and years and years. What that means is not just that we add more levels or we add a few more characters, it's that we add new systems to the game, entirely new experiences, and ways to use those characters and progress year after year. People don't come back to Forge of Empires or Raid: Shadow Legends to do more of the same.
They come back to see what's new, what's exciting, how can I take what I gained yesterday in an event and use it in this new system? We also look at in-app purchases as our primary revenue driver. This is where players make a conscious choice that they want to spend some real world money to buy something in a game. What that means is different in different games. Sometimes it's a hero, sometimes it's to accelerate some progression, sometimes it's to unlock new content, but the player is making that conscious choice of trading cash for something in the game. We do have ads in a number of the games in the Midcore section, but that's usually generally a secondary monetization avenue. In-app purchase is always the primary. Finally, experienced gamers and games which are more complex.
While casual, and Yoav will speak about that soon, generally is incredibly wide and brings in many, many people. Midcore games tend to bring in those who have some prior experience in gaming or have an interest in engaging with the game, not just a bit, but for a long time and for it to become almost a hobby for them. We are able to take some of the systems, some of the learnings from PC and console games, and bring them to mobile because a lot of our players will know what they are, how they work, and what the experience could be like. In the Midcore district, three key things will help drive our success. Evergreen titles. Maria referenced these earlier as well. These are the games that have 5, 10, 15 year life cycles.
The investment in Midcore games tends to be higher than is needed to make casual games. They're bigger, there's more artwork, there's more systems. We need to make sure that we're always aspiring for very, very long life cycles. Secondary is the proprietary platform. I'll speak more about this later. The idea here is that as a Midcore district, we're able to make sure that all of our studios, all of our teams have incredible services to accelerate the building of the game, maximize the potentials of their game, and keep their teams lean and agile. Finally, that capital discipline. When we think about games, when we think about growing games, there's that creative initial moment where we have new ideas.
Once the game is out, once we've seen the KPIs, then it is about saying, where should we invest in marketing, where should we grow a team, where should we acquire an IP or partner with an IP to accelerate this game? It's about saying we want to make informed choices of where we put our capital, but that is informed by data and KPIs that we see. The growth journey follows a similar strategy. The evergreen games are the engine that powers our business. It allows us to fuel our rising stars, and then we can make more new games with that. The growth journey feeds itself and it's what we call the gaming flywheel. Let's take a look at some examples of that and what it really means. We think about our games in three key phases. The first is new games.
This is where we take the risks. This is where we're always trying something new and we're trying to see where is there a market for a game or an IP or a particular type of gameplay. Over here I'll call out a couple of our examples. Match Creek Motors from the team at Hutch Games in London. This is a match 3 game. There are many match 3 games out there. What the team at Hutch Games wanted to do was say we have a match 3 game. What happens if we add a metagame, a game around it of car collection and car upgrading, something which appeals to a different audience to say, a Candy Crush type of game? They have real world licensed cars, incredible 3D graphics, and a core match 3 game.
That's one of our new games that's launched and we're really excited about its performance. We know that not all new games will graduate to being rising stars. We live in the world of media and not all media goes the way that we hope it would. When we see potential in a new game, it becomes one of our rising stars. These are games where the players have come in. We've seen real data, we've seen that marketing can work. There is an audience for these games and, most importantly, the team are able to deliver on new events and new content for the game. When we have rising stars like Warhammer: Tacticus, we know great, it's time to invest. It's time to turn the engine and get this out to as many people as possible.
You'll hear later from Alex, the CEO of Snowprint Studios, the team behind Warhammer , about what it is to make new games and what you can do to increase your chance of becoming a rising star. Finally, the best of the best games and the ones that really find their audience become established titles. These are those titles, as I said, that last years and years and years and generate the meaningful revenue and provide that stable cash flow to allow us to go back to making more new games. We know as a business that making games is our core, it's our heart. The more we do of that, the more chance we have of finding those rising stars and creating those established titles. We talked a lot about time and KPIs and things, but I think it's worth just referencing two here of our established titles.
Forge of Empires along the bottom, Raid: Shadow Legends along the top, and the axis here is months since launch. What you can see in Forge of Empires here is that the game is, you know, 13 years old, but it still has an incredible player base. It still has a really meaningful contribution to the business. A little fact, over 50% of the players who are playing Forge of Empires today started more than four years ago. The audience there is incredibly sticky. They come in, they play, and they stay around. That's what makes games established. We're not looking for ones that have amazing spikes and then disappear. That's not what we're about as a Midcore District, and it's not what we're about as MTG. On the top here, you'll see Raid: Shadow Legends.
What gives me a lot of excitement, a lot of confidence, is that that journey can go on for many, many, many years. The journey we've seen Forge of Empires go through and continue to go through. I'm very excited about seeing Raid: Shadow Legends go through the same one for another five years, or as Stas said, at least another 10 years. It's also worth noting that in Raid: Shadow Legends, the engagement is incredibly high. Stas mentioned earlier, players play for, you know, many, many hours over a week and over a month. I think one way that I like to think about it is players in Raid: Shadow Legends on average spend about as much time in Raid: Shadow Legends every day as you would spend watching a movie. That is about them making a choice of how they spend their entertainment hours.
That's very exciting for us. New games. We have our established titles and then we take that revenue, that stability, that cash flow, and we funnel it into new games. Today, across the Midcore district, we are building in active development over 10 different games. That's spread across all of the studios. It's not concentrated in any one. It's also about saying what types of games are we building. We don't want to be a group that builds just one type of game or puts all of our eggs in one basket. We're here that when we think about merge games, we have Merge Gardens out of Futureplay in Finland. We believe there's more juice in the merge genre. We believe that we can do even better. Maybe we double down there and say how can we dominate even more in the merge genre.
There's also areas that we don't have games in today, such as shooters and card collection. Those are places where we know there's a big market, we know there's an audience. How do we go and grab some of our audience. How do we become a player's go-to shooter or go-to card collection game. We're doubling down sometimes and we're taking risks and experiments in others. What is also important to consider is these games are all made by the teams that have seen success. We're able to say a team that has had success in Raid: Shadow Legends or Warhammer 40,000: Tacticus or Forge of Empires or Formula One, let's take some of that team and form the new teams and try and get that success again.
What it all adds up to is over the next few years, I think through the Midcore district, we'll be launching between two and four new games into soft launch every year in 2026, 2027, and 2028. We've talked about established games, we've talked about new games. Let's talk about a rising star. Tacticus. Snowprint Studios joined the MTG group in 2024 and the journey they've been on since then is incredible, as you can see in this graph. I want to call out two particular things that are of note in this journey. The first here, highlighted in kind of blue at the bottom, is around events and live ops. When players come into a game, they don't want to just do the same thing every day, every week, and every month. They want new challenges. They want to know that as game developers we're keeping it alive.
It's a living game, it's not being abandoned. The way we do that is with events and live operations. What we also often do is connect those into real world things. Players now expect Christmas events in game, they expect Black Friday sales, they expect something around Halloween. It is our job as game makers to deliver on that for players' expectations and make sure that they are incredible events. What that means is just looking at only Q2 in one game. We made over 240 events and live ops for our players. You can take that number and extrapolate it across all of our games over a year. We're doing thousands and thousands of events for our players every single year to make sure that our games are worth their entertainment time.
The second thing I want to call out here is the big spike as we went into late 2024. Tacticus exists in the Warhammer universe. In 2024, as some of you may know, there was another smash hit game on PC and console from Warhammer called Space Marine 2. It's a narrative game shooter, so a very different game to Tacticus. It existed within Warhammer and the hype and excitement around that game was very, very high. It was a critical success, a commercial success. What it did was generate general interest in Warhammer. People that hadn't played Warhammer for years heard about the console game and thought, oh, I'll go and check that out. We were able to, because we were part of that Warhammer universe, take advantage.
We were able to in fact bring the lead character from that console game and put it into Tacticus as an event for the players. We were able to run ad campaigns and UA with that character. We were also able to run events in the game that connected into the events of the console. We took advantage of that halo effect of interest in the IP that was happening at the time that brought down user acquisition costs, increased player engagement, and overall increased the performance for Tacticus. When we think about the Midcore division, I think that there are four key pillars that it's built on and I'll go into some of these in more detail in a moment.
Unified shared services, as I said before, is about making sure that all of our studios are able to have incredible services, incredible support to accelerate new game development, take advantage when they have a rising star, and keep lean and agile on a studio level. I don't want the studios to replicate a marketing team six times. I don't want them to have six different research teams. I think it's inefficient, and I think ultimately it will slow us down if we can have some of those services centralized and supporting all of the studios. We concentrate that expertise, we concentrate the size of the team in a single central team while still giving the studios what they need when they need it to an incredibly high quality. What that means then is that studios can stay lean, and they can invest more into the core of game development.
They can have more people working on more ideas and having a higher chance of success. Third one, preserving that creativity. Maria spoke about it earlier as well. It's incredibly important that the studios themselves own the games. They own the path of the games. They feel that that creative control sits at the studio. While I'm a game maker myself and I'd love to go and have my ideas about all their games, that's not a good way to do it. We need the people on the ground every day living the game to have that creative control. Finally, by being efficient, by keeping the teams the right size, and by making sure the services are great, we're able to fuel reinvestment into new titles.
To drill down a little bit on the services and the platform side of it, when we acquired Plarium, we didn't just acquire 1,300 of the world's best game makers. We acquired a whole suite of software and processes and other services that forms the foundation of what will be the Midcore shared service platform. It comes in many different guises as well. Data and analytics. We're going to, over the next few quarters, move all of the games in the Midcore district onto a single analytics suite. What that means is when the data comes in from a game, we can very easily compare it to that data in another game. If we see increases in player engagement in a certain country, we can see if that is specific to the game or if it's a general increase in activity we see across the portfolio.
It also means that when we want to launch new games, we're able to very easily compare the performance of those new games with the performance of existing games. Is this showing strong early KPIs? If you don't have anything to reference it to, it's very difficult to tell. By getting all of our games onto a single analytics system, we're very quickly able to tell whether games have potential or not. Next is tech and tools, which could be many things, but at its core it's the ability to say one studio has built a system, an incredible chat system, an amazing guild system. How could we take that and make it available to our other studios? Or somebody builds an amazing HR system, can we make that available to our other studios?
What that means is that we're not replicating effort again and again and again to reinvent the wheel. It keeps us efficient. It also means when one studio is larger and has more resources to build tech that the smaller studios can take advantage of that and they get all of the benefits of being part of the group marketing. I'll talk a bit more about this in a moment. Like data and analytics, we're also going to move on to a single marketing suite, which means that all of our games will be marketed and marketing controlled through a single piece of software. I'll dig into that in a second. Things like product support, player support, and game services, these are all of the bits that help make a game run. It's the community management, it's the customer service, and things like that.
On the right though, and I'm saying again because it's so important, the games have to be owned, the creativity has to be owned, and the day-to-day running of them has to be owned at a studio level. That's how we get success. I said I'd talk about marketing, so here it is. There's a piece of software that was developed by the Plarium team over many, many years. It's called GoGame. It's an incredibly complex and sophisticated and diverse piece of software for running marketing campaigns, evaluating the performance of those marketing campaigns, looking at player behavior, and doing predictive modeling on how those players will be in the future. We want to make this available to all of the studios in the Midcore district. We're currently implementing it at two of the studios, and soon it will be across all of them.
We're not just going to take GoGame as it is today. We want to combine it with some of the amazing marketing technology that was built at InnoGames over the years. We're taking the best of the different studios, combining them together, and I think we'll call it something like GoGame Plus, which is then across the entire district. At the moment we spend about $300 million a year in marketing across the Midcore games, all of that will run through GoGame, allowing us to have a unified platform, unified data, and also skills and talent from people that we can move between games.
If you have an incredible marketing person working on Raid: Shadow Legends, for example, and you think that their skills could be better applied somewhere else, they'll still be working the same piece of software, the same data structures, the same systems, and they can very quickly get up to speed and add value in another game direct-to-consumer. Arnd mentioned it here as one of the drivers of the next generation of growth in gaming. We believe that very, very firmly in the Midcore District. Direct-to-consumer is about saying players today, when they buy something on an iPhone or an Android, it goes through the App Store, the Apple App Store, or the Google Play. Google or Apple take 30% of that and then the remaining 70% is delivered to us as the developers.
Direct-to-consumer allows us to not give that 30% to Apple and Google and keep more of it for ourselves to reinvest in our business. When a player makes a purchase directly with us through direct-to-consumer, on average we pay 3% or 4% and all of that goes to the merchant, the credit card company, or PayPal or whoever it might be. Direct-to-consumer also allows more players to pay in more different ways. We have players all around the world and in some locations different payment methods are preferable. Direct-to-consumer allows us to let the player choose how they want to pay. Direct-to-consumer isn't just one thing, it's actually three individual pillars. I'm going to start on the right with direct payments. I'm sure anyone who follows the news will be aware of some of the court cases that have gone on in the U.S. over the last few months.
In the U.S. now on iOS we're able to offer the user a choice when they choose to buy something in a game. We're able to show them, here's how much it costs to buy through Apple and then the 30% goes to Apple. Here's how much it costs to buy directly from us and we can put them, as you can see in the image, right next to each other and then the user gets to make a choice. Interestingly, here we can give a discount if they buy directly from us, or we can add more value, keep the price the same, but give them some bonus, extra equipment, extra coins, extra points in some way. It's about offering the user a choice. I think there's an expectation and my belief that this direct payments that we see today on iOS in the U.S.
will become more widespread in the coming weeks, months, and years. While today it's only in the U.S. and iOS, I'm confident that we'll be able to deliver this same experience of choice to more players on more platforms. The middle is a web store. The web store essentially allows the player to browse a catalog of things that they could buy. They can browse it on their phone, they could browse it on a computer, but it's connected to the game. When you buy something on the web store, you get that thing in the game. In this example we're looking at something from Warhammer 40,000: Tacticus. If I was to buy the Back in Action bundle on the web store, it would be a direct purchase from us as the developers, but it would appear in my game completely seamlessly.
Today we have web stores in a number of our games. Formula One has it, for example. So does Tacticus, so does Forge of Empires. Going forward, we will roll this out in more of our games. This is a place where we think there's a chance for the technology to be more unified across the district. On the far left is Plarium Play. Plarium Play is on PC and Mac and is essentially a game store where players can go in, download games, and then it's there. They have a social network, they can play with their friends. It has features like calendars, but importantly, it's our platform. Plarium Play is direct-to-consumer. As we mentioned earlier as well, we recently put Heroes of History on there from InnoGames. It's no longer just a Plarium games platform.
It's now across the Midcore district and there'll be more in the future. Why is it important to have something like Plarium Play? What do we get out of it? It requires a lot of work to have a platform, maintain a platform, and have all of the systems in place. It's about owning the distribution. When a player comes in, they create an account within Plarium Play. That's something that we then can look at their behaviors, we can look at what games they play, what games they don't play. Importantly, we can offer them more. We can offer them the ability to plan ahead, see what events are coming up. We can offer them the ability to play other games seamlessly on a single account.
When we see a player is engaging with one game, but hey, maybe their engagement is dropping, maybe we think that they're bored of that game. Now we have the opportunity to show them another one of our games and keep them within our ecosystem. If a player is going to leave one of our games, I would much rather they go to another one of our games than leave altogether. I'm going to speak about AI more later this afternoon. There is an AI breakout session, but I'll speak on it for a couple of minutes now. AI is already here. It's already a part of our industry and many industries around the world. It's not just about making cool artwork. It's actually impacting every single part of the game development process. In engineering, we know that it can speed up code development.
On the corporate side, how can our finance teams, our HR teams, our data, how can it be better used? By using AI we've talked about on the product side, 240 live ops are made every quarter in Tacticus. If we can use AI to reduce that workload so that the teams can make 300 live ops or 400 live ops, or they make 240 live ops and then have time to work on other things, that's where on the product side, AI can really have an impact. Across a number of studios today, we're already starting to experiment with events that are built not only with AI, but with AI that's been trained on our historical events. It knows what works for what players. On the data side, we collect billions of pieces of data about our players every week.
That includes what games they're playing, what characters they like, what levels they like, what levels they pass, what levels they fail, and hundreds of other things about the game. Far too much for any human or any team to be able to understand all of. By using AI on our large data, hopefully we can discover trends, we can discover opportunities and patterns in player behavior to make sure we can keep the games relevant and exciting in the future. Sound and language. I don't know if any of you heard any of the AI music. Some of it's pretty good, but actually, you'd be surprised how many sound effects today are already made using AI. You need the sound of an explosion, a car hitting something, a character getting injured.
Already today, AI can do an incredible job of making those little sound effects that either you would have to pay a third party for, or you'd have to spend a lot of time generating yourself. On the language side, Yoav will speak later about the impact that AI around language and localization has had on PlaySimple. In general, localization today is not just putting some words into Google Translate and hoping. It's about using AI to get the tone right. Is it a friendly translation? Is it an aggressive character? What word do you really mean? Because in English and in many languages, one word can have many meanings. Using AI for language is allowing us not just to put games into your language, but to make the meaning translate into your language to keep the tone and the character in it as well.
As I said later on, I'll be going deeper on AI and also showing some real examples and some real data on exactly how much we think AI will be impacting our business. When we're doing all of this work, we're building this incredible platform, we're having all of these teams and this technology, what does it mean for groups or studios who join the Midcore district? What it means is that they'll join a district that has plug and play. They can come in and they can have GoGame as a marketing platform. They come in and they can have the data platform and all of those comparisons. They can come in and have access to AI which will drive innovation and speed up production. It's about making sure that joining the district doesn't mean the same. It means you accelerate, you get better and you get more opportunities.
We've used the phrase a few times. We're looking for our next Snowprint. Alexander is a CEO over there. There's only one of him unfortunately. We believe out there we can find more. These are studios who have incredible teams, they have incredible ideas. They've started to build a game. It could be an IP-based game, it could be their own IP. Joining the district, that's the rocket, that's the accelerator. That's what takes them from either new game or rising star to an established title that lasts for years and years and years. That's the dream of the Midcore district for M&A. As was talked about earlier as well, we think there's efficiencies and savings to be found by moving into this district structure as well. Between now and the end of 2026 the goal is over $20 million in savings and efficiencies on a run rate basis.
This will come from a combination of different areas. Of course the technology I talked about today, we should make sure we're getting the best price for that technology. How can we do group deals? How can we make sure that the learnings about what's good and bad is transferred across so no money is wasted? When we're buying technology and services, it's about vendors and partners. If we're using third parties to help us with something, how do we do a deal where everybody gets access to that third party and people aren't hunting out their own partners where they probably won't get the best deal? It's about, as well, headcount. How do we make sure that we have the right people in the right place doing the right thing? If we have teams that are too large for our needs, then we will reduce that team size.
It's not about overall rejection. It's about saying, are the right people in the right place. We need to make more new games and we need to make sure that those new games have the ability to become established. To close out the key takeaways from today, our top games are evergreen, 5 year, 10 year. That is the norm. That is what we should be looking for for our big titles. We then reinvest that capital that comes from those games into making more new games. Some of those will work, some of them won't. Those that do become the rising stars, the next Tacticus, the next heroes of history, and those the district has the machine, the technology, the tools, and the people to really make the most of and turn into established titles of the future.
The next billion dollar games like Forge of Empires and Raid , the platform is that flywheel. Finally, as I said, we'll unlock those savings between now and the end of 2026 to make sure that as a group we're lean, we're efficient, and we're focused on making the very best games we can for 3 billion gamers around the world. Thank you very much. Over to Yoav.
Hello everyone. My name is Yoav. I've been in this industry for quite a long time. I've recently joined MTG and it's been a real pleasure joining MTG, which has an amazing name in the industry. It's being a very bold organization who's not afraid of taking tough decisions and taking very brave moves. When I got the offer to join MTG, I was super excited. I've worked in big publishers in the past and companies like Playtika, Crazy Labs. In my previous position I was the Managing Director of Product Madness where I took the company within four years from about $500 million revenues to about $1 billion revenues per year with the highest EBITDA. Highest EBITDA ever. My focus usually as a leader is to build strong cultures because I believe that the strong culture beats any type of strategy.
I'm very much focused on results, on nurturing talent and eventually building also systems that you can actually scale across the board and that you can create a sustainable machine that can actually continue to grow. When you're talking about casual, Ollie spoke about how does it look in Midcore. Casual is actually, when I think, when I want to ask how many people are playing here games and the majority of you raise their hands, we would assume that most of you are probably playing what we call casual games. Casual is a very simple mechanics. You don't have to go very deep into the mechanics. You can learn it very quickly. I always like to say it's like eating a McDonald's. It's not like a commitment.
You're going to a Michelin Star restaurant where you're now sitting for three hours and you have to eat first course, second course, dessert, and so forth. I have five minutes when I'm waiting for the dentist or I'm in the tube, I can just play it. If something, I don't know, connection is stopping and my level, I lost in the middle, nothing happens. I'm not emotionally engaged into that. The other part is the monetization. Casual is characterized by a mixed type of monetization. Some of it is in-app, like Ollie said, when you buy coins, you buy gems. There's also a lot of ad monetization, which is annoying when you play the game and you're seeing that, oh, shit, I have to see this 30 seconds of ads. Yes, this is how we make our money. This enables us actually to monetize the majority of the players.
This is how we make the money. This is by itself a very big discipline of how do you manage it in a way that on one hand it's not too intrusive, but on the other hand, you don't let the players play for free because otherwise it's fun for the players but less fun for a bank account. The third bit is that it's very hard to create strong IPs in the world of casual. There are very few cases of games that manage to build their own IPs. If you look at the 99% of the games, they don't have IPs. When you can't create an IP where you need in order to be able to be the leader in your category or to be able to excel, that's where operational excellence really comes into place. This is how PlaySimple was simply designed.
Here's a short movie about us.
These are the best games I have ever played.
Casual district, we heard about it all day. PlaySimple is going to be the cornerstone of that district. As Maria said, we're currently a party of one. I like to look at it almost like a blank canvas. We have now the opportunity to draw our dreams there. We can focus on how we want to go and where we want to go. PlaySimple, for the people who are familiar, we are the number one in the world in terms of word games. There are a lot of sub channels in the word games like crosswords and cross puzzles and so forth. If you look at the number of players that are playing our games, think about Sweden for a second. I think you guys have about 10 million people in Sweden. Half of the population of Sweden is playing our games on a daily basis. That's what it means.
5 million DAU, daily active users. Think about it. Every second person around this table here is playing our games. That's the massive amount of players we have on a daily basis that are playing, just playing word games. That's done not by one game and not by two games, but actually by a combination of multiple franchises and games that we have had for a long time. Usually when you think about simple games and casual games, you're saying, it's a block, it goes up and down and disappears. We have players who've been playing it for over eight years, constantly challenging themselves. When you read the comments in the app store and they are saying, some of them, that keeps my brain sharp, that helps me work to be together with my kids. There's a lot of very positive things you're hearing from players now.
It's also been designed in a way that it's not a gaming company, it's actually more of a platform company. To be able to successfully scale and do these things over and over and over, you can't do it just hoping to be creative and to do things with hoping it will be lucky. It's very systematic, almost I would say on the edge of being very scientific. This is how the company has been designed. I forgot also to mention we are based out of India with about 400 employees, which means also that our OpEx costs are very cost efficient. You can compare the cost of India versus the rest of the world and it's extremely, extremely. You understood what I meant. Franchises. We've got five big studios. Each one is managing a set of franchises which are everlasting.
To mention a few, we've got Word Search, which is our top growing game, which has been the number one in the search category. It's been launched about four years ago. We've got DTC, what we call not the DTC that Oli mentioned, not direct-to-consumer but Daily Themed Puzzles, that we are actually always asking the players, constantly getting different crosswords, and that has been the number one in its category as well. We've got the Anagram Games, which is the typical word games where you think you see a circle, and there we are quite a big one. We launched it back in 2017, and we've got players still playing it over and over. Of course, we've got many other titles, including not only word games.
We've also got successful green shoots in adjacent vectors to what we are playing today, like in tile match games and jigsaw and other genres as well, that we are seeing quite a very good go to, which I think all of this is just a testimony for the platform that is inside PlaySimple, that enables us to actually generate and churn out a lot of new games and do it in a very successful way. If you think about the growth PlaySimple had, it's an amazing growth, and especially when you look at it since MTG has acquired the company back in 2021, the company grew about 60%, which on average is about 15% a year. When you compare it to the growth of the market, of the word market, we outpaced it substantially.
I think that's the strength of PlaySimple, that whatever the pace of the industry, given our platform, our technology, our know-how, how to do good fast follow strategy, we can go faster than the market itself. What's beautiful about it is that it's been done purely organically. There was no M&A involved, just utilizing our technology, the LiveOps, we had the analytics, and a very, very disciplined user acquisition. We've actually proven that we can grow in a very profitable way and not just scale for the sake of scaling, but do it in a very disciplined way, which also drives top line together with a strong bottom line. When you look at our strategy, we are a fast follower.
To do fast follow, you need to be able to have operational excellency, and you can't do in the world of games operational excellency without having a strong platform, a strong technical platform. That's the core, and this is the heart of PlaySimple. We call this platform Little Engine and it's touching almost all the life stages of the game, okay? Starting with marketing. In the world of mobile games, I don't know how many of you know, but it's a true science, okay? When we acquire a player, we know exactly how much we paid, we know how much we're going to get at every single point at the customer's life cycle. I know what's going to be the return in a week, in a month, in a year, in two, in three years from today.
Therefore, I know that the cohort that I just acquired yesterday, is it a profitable one? If yes, I want to double down on it. If not, we'll reduce the spend and try to do something else. To do that we need also, of course, analytics. Without analytics, I cannot know what's happening there. I cannot understand what's driving the engagement of our players and how can I do it much better. To do that, we also need to understand that the amount of data that we have, it's not done in megabytes, not gigabytes, not terabytes, in petabytes. That's the size of data we are processing almost on a daily basis. Out of that, trying to get very quick insights and making sure that we are really focused, laser focused on what we need and what happens is that once you launch new titles, you're getting more data.
Just like Ollie said, the fact that we have this data, we can now start learning more things. It's almost like a perpetuous machine that constantly feeds itself more and becomes stronger and faster and much, much, much more quicker. What we also are trying to do is that when we develop the platform is to try to write in a way that we can have horizontal scalability. Whatever feature that is being developed inside this platform, we drive that across all the different studios. If a specific studio needs something very specific to their needs, they develop it by themselves. That's exactly how we're doing it. On one hand we've got a heavy machine running forward and if you need customization, each game team does it for themselves. That keeps the agility together with the ability to scale it for the longer one.
This platform is also designed in a way that it supports both existing games and new games together. There was a question earlier about is the growth coming from new games? Yes, the majority of our future growth will probably come from the driving of new games, successfully launching more and more new games. Of course, we should never forget the existing games because they are the bread and butter, and we need to make sure they continuously continue to grow above markets, above markets. If we want to see the higher growth, it needs to come from you guys. This is exactly how this platform has been structured and it is built. If you think about the circle, again, we have data, and this data drives more insights. With these insights, we can develop better features because we understand what drives the players, what irritates the players.
We can understand if the players that we acquired are good players or bad players. That in return drives higher engagement, which in return drives higher revenues, which we can later on invest back in UA, get back more data, and so forth. That's the magic circle of our platform, and that actually helps us to do it in a very structured way to make sure that we are constantly focusing on our margins and are able to also continue to grow. For us also, AI, it's not a question of if we should be there, how we should, but it's a must. We don't see any opportunity not to be there, and we need to make sure we are using it in the best way there is in the industry. It's not a side project. It's embedded very deeply into almost everything we are doing.
Of course, there is always much more to do, and especially given the pace of how AI is evolving and problems that two months ago were super hard to solve, today there is a new software that actually solves that, and it's constantly rapidly changing things. Just to share with you a couple of examples here, if we spoke about user acquisition, which is typically in mobile games, that's the lion's share of the spend. The way we usually do it, it depends. You need the media buyer who says, hey, I'm taking this dollar or $2 or $10 and spend that in Facebook or Google or any ad network. When he says, this is where I'm bidding and spending this money, you also need a video. That's a commercial you usually see on the phone. Very roughly, there's typically three types of commercials. There is what we call interstitial.
There's static ones, which is just an image. There is a video, and there is what we call playables. Playables are the fun ones that also encourage you to try and play like a dummy game over the ad itself. These things are usually quite labor intensive. It takes a lot of time to do it. Sometimes it's quite expensive also to do them. Think about the scale of a company like our size. We have a couple of thousands every month of these assets that we need to produce in order to optimize our UA. If you've got a very good ad, it can actually bring down the cost per install or what we call the CPIs. That of course improves the profitability.
We need to constantly test out new things and different things because something that works in the last two weeks will stop working because players got bored from it and we need to find something new. What we've done with AI, we've managed actually to increase substantially the amount of output that we're getting from these teams with the same amount of people just by using smarter tools. If you take the playables, which are usually the more converting type of ads, they are the more complicated one because you do need the best software. You need an engineer behind the scenes to program the software itself. We'll be able to use AI and actually start churning out very quickly a lot of, a lot of playables. Another element is the game assets.
Ollie spoke about liveops, the importance that when a player comes into the game that the game won't feel boring. Think about the TV when you're coming and you're watching the same TV show again and again and again, you'll probably switch to another channel, but we want you to stay on our channel. We need to make sure the game is constantly alive and new things are happening. If you think about game assets like making sure when you enter your things a different type of graphics. It used to take on average about a week work or four and a half days. Using AI, we managed to bring it to one hour.
Okay.
I'm sure this is just because we are not efficient enough. We can even bring it even more to that. This basically enables us to do things much, much, much faster and drive much, much better capabilities and effectiveness. What I want to show here, you'll see in the video. Here are another two examples of how AI is actually being used in RStudio. The first one, we're talking about how you can, using all the data that we have. Usually, typically, you need an analyst to be able to bring you some insights and to drive the information. Here you can use just text to SQL, what you call it. You write in a natural language, you're writing the query what you want. I want to understand why did the last two cohorts, the retention of day one, dropped by 50%. You're writing it and then what happens?
In a miraculous way, there is an SQL written behind it which you can execute and then you're getting the results behind it. This actually unlocks a lot of insights which in the past you had to ask a query from a data scientist or an analyst to do that, which could have taken days. Here the product manager can just write the query by himself, get the result and just start acting on it in a much, much, much faster way. The other example is looking at videos. If we wanted to create high, high quality videos like the one you've seen or the grandpa that you saw in our movie in the beginning that said, this is the best video in my life. These are what we used to call CGI movies, computer generated image.
In my past positions, when we wanted to do ads based on that, it would cost between $50,000- $100,000 to create one single ad like this. That could be 30- 60 seconds. Today with AI, it costs us just the subscription of the AI to do that. What's more interesting is that in the past you had this content creator, which was the creative guy, says hey, let's do this. This would pass the idea to a video editor, and this video editor will work on it for about a week or two weeks and create it. Here we can do it now. The content creator just comes with this idea, types it on, moves it between a few tools and boom, you're getting the video out.
You can push it to UA, they can test if it's worth it or not, and within a couple of hours we can decide if you want to spend more money on this creative or move on to the next one. Bottom line, it actually drives much more speed, innovation, and helps us to expand the margins because we don't need so many people to drive a much more capable output. When we're looking at our growth, we've got like three axes. The first axis is how we grow with our existing titles to new geos. What we call localization, and especially in the genre that PlaySimple today operates, which is word, becomes super critical. We cannot just expand just by using Google Translate. The second thing is launching new titles in the core markets where we are operating.
The third part is expanding to other genres inside the casual and casual category. What we are currently doing, we are executing all these three altogether because we believe, given the platform we have, there is no limitation. We don't have to decide one or the other. We can actually do all three in parallel. The first axis is the localization, and think about the words, about each word can mean different things in different languages. If we're trying to translate it and using Google Translate, we probably would have been getting stuck. If I think about the crossword, when you've got a question and I'm putting the answer and it's not really the answer because I'm not a native speaker, it creates a lot of frustration. Players won't play our game.
Given AI, it actually helped us a lot to be able to translate it in the right context and be able to do things in a much, much more effective way. Doing that, we are seeing that we can actually achieve being the number one in the top geos that we want to be, like in Germany, Brazil, France, and others. Just to understand the impact on that for us, if I gave the example before about Sweden, about every second person in Sweden is playing our game now. What's happening? 70% of the growth we had last year in our DAU came because of localization. Today, about a third to about 40% of our DAU comes from non-English speaking categories.
For us, it's about like adding, give or take, Stockholm, the population of Stockholm, to our DAU because we unlocked different languages, actually 28 different languages that we could have done that. The second axis is launching new games. When you launch a new game, and we're going to have a panel about it later, there's a lot of challenges. How do you know if the game is going to be successful? How do you know if it's going to be a hit? Is it, are we investing enough money? Are we not investing enough money? Is it going to get traction or not?
What we've seen, given the platform that PlaySimple has, given what I said, that we are a fast follower and we have the operational excellence, we're able to scale games quite quickly, quite strongly, and actually achieve good revenues given our platform because we are getting the right signals at the right time telling us it's worth to continue that or we should stop and use our capital to do something, a different game, and stop this game. What we're also seeing is that on scaling new games, it's another challenge because if I take all these examples, okay, you've got the green shots, now you want to see the rising stars. This is where I would say the big boys are separated from the men.
This is where you're starting to see in reality where the big companies who know how to manage games at scale know how to do the proper liveops, how to manage the monetization in the right way. This is where you're seeing the differences between one lucky company that has one title versus a company that does that in a sustainable and consistent way. PlaySimple, just two examples here. There was a game that we were in, the Word Search. We were about two years late to the party. However, given the way that we are operating, we're able to execute things. We managed to get quite quickly, within three years, to become 70% of the market in that category. We were fighting against quite strong competitors. It's not like small studios, but big studios, strong studios.
Because we have the know-how and the right platform and capabilities, we managed to do that. Our latest release, we managed to get within six months to get 30% of the category. If you look at the chart on the right, you'll see that there was another competitor that was trying, launching roughly at the same time as we did, and we managed to get about three times more market share compared to him because we have the right platform, the know-how, and this nice flywheel inside our platform that helped us achieve these things. When you're looking at the casual space, you can say, okay, our competitors are the Word Games adjacent vectors. We are saying we need to look at it much wider. You heard it from Maria, you heard it from Oli, you heard that our competitors in reality is the time of the player, okay?
We are very jealous on the time. I want to make sure that when a player has the time to use, when he's raising his phone, I want to get a big chunk of that time playing one of our games or one of our apps, okay? When you look at it on the wider scale, we're saying, why limit ourselves just to casual games? We can look at the casual apps, okay? Because of the platform we have. It doesn't matter if I'm marketing a game or marketing an app, if I want to monetize the game. I think Ant said it very nicely about Duolingo, okay? The minute I started putting some gamification in it, that's when I started to grow. We are expert at gamification and we have the tools and we have the know how to do that.
Part of this code will be done organically, organically by us developing things and continue to expand. Some of it will be done inorganically, okay? By doing M&As and driving that M&A, okay? This M&A will have two accesses. One, the content, either apps or games. Another access would be complementing our platform. If we're seeing a technology which is superior to us or closes gaps that we currently have, that's what we're going to do, okay? The heart of PlaySimple is the platform that helps us drive that in a sustainable way. What we want to do is to lead in the casual entertainment world. To do that we need to look at the market, and the casual market is a very fragmented market.
It's a market that hasn't gone through massive consolidation yet, which gives us a lot of opportunities and a lot of targets that we can actually find and we can actually complement ourselves. What we want to do is to take these targets and bolt them on to our platform and make sure that we can create these synergies, both efficiencies, but also business wise and operationally wise, okay, that can help us drive the classic one plus one equals three. I'm very excited to say, as Maria said, that we are evaluating a potential IPO in the Indian market, which will help us to actually unlock M&A currency that we can use to accelerate our plans going forward to start to becoming the number one casual district in the world. Just to summarize this presentation, I have about four more minutes. I'll speak. I won't speak that slow.
Don't worry. One, we have a very sustainable business. We've proved over and over and over that we can grow. It's not luck. It's systematic. It's done based on data. It's almost, I would say, a science of how to do it. We've got a very scalable platform, which is based on technology and AI together, that helps us actually build that in a very strong and robust way, which is almost agnostic, I would say, to what we are doing. We've got also a very strong pipeline of new games, which is the future growth of our company. That also, given our fast follow approach, helps us to turn around. If we're seeing a good opportunity, we can seize it very quickly and get out to the market. Given our platform, we can capture a very strong game market share, and we've built a very strong foundation.
Now we want to accelerate that and double down on that and make sure that we can actually become the number one in the world. We're going to do it via more AI and much more M&A. I believe this would set ourselves as the Casual District to become the next growth engine for MTG. Thank you very much.
Let's. Thank you very much. No, Yoav, please stay on stage. We're going to keep you on stage for a little bit longer. This is an opportunity just for a short Q&A with Oliver and Yoav. Let's swap places so you guys are in the middle as usual. Anyone who wants to ask questions, just raise your hand and the mics will come out, and we are open to questions from the chat as well.
Yes. Hello. Jesper Stugemo from Handelsplanken. I'm just curious around the platform integration. What kind of risk and hurdles do.
You see on potential time plan?
On the Midcore side, we're already executing it. GoGame, the marketing technology, and PDP, which is the data and analytics technology, we're already implementing it into Hutch in London and Snowprint here in Stockholm. From an execution point of view, it's the same as any software. Make sure that it fits with your old data, make sure the engineers and the team know how to use it, make sure that you find any bugs and fix it. From an execution point of view, so far, so good. I would say timeline, we don't want to do it all at once because we want to make sure that we do the integration, we test it, and we see the expected uplifts. I'd say again, by the end of 2026, we expect to make those cost savings.
I would put a similar kind of timeline on a lot of the integrations, but as I say, we're already underway with many of them.
Hi, Simon from ABG. I have a question regarding the Midcore district, and it looks like you are moving over some of the costs centrally. Naturally, this has an impact on.
The studios, of course.
My question is, how do you plan to have the incentive structure and the financial responsibilities for the studio? For the studios?
Yeah.
For us it's about making sure that we're all on the same kind of incentives. What we don't want is a central team to be incentivized and measured on something wildly different from the studios. It's about making sure that we provide really high quality services to the studios. Ultimately, the success of the game is the measure of our success. That's what we need to make sure that the service teams are also a part of creating and are measured on. As far as costs and things, we will have the central district services and those costs will be passed on to the studio. The studios will pay for whatever those are, which means that there is that expectation of quality as well. If the studio doesn't feel they're getting it, then we need to solve for that. It will be provided to the studios at a price.
All right, a follow-up on that. Can you mention any kind of metrics you want to evaluate or benchmark studios on?
Around the games or their services?
In general for the studios? How do you incentivize them for salaries, bonuses, stuff like that.
When we think about the studios, I don't think the future is particularly different to the way that we think about success today. It is, are you able to scale marketing to a high level for your games? Are you able to have a positive return on that ad investment over a time period of one year, a year and a half, or two years? Are you able to make sure that the revenue per player goes up over time? I don't think the future looking KPIs are really for the studios that much different from the historical ones.
Okay, cool, thanks.
Yeah, Jacob from Danske Bank, just one question on the direct-to-consumer, that was 31% of sales right now. How much is direct payments currently, and what type of potential do you see there in the long term?
Yeah, so because at the moment it's only on iOS, only in the U.S., only in some of our games, it's still a relatively small percentage. I would say the overall direct-to-consumer is mostly driven by PC. So Forge of Empires and Raid and their PC. Long term, I think the direct payments have a lot of potential because the user experience is smoother. You don't have to go to a web store, you don't have to go to a different platform. It's right there within the app and when you click Buy it's one click away using Apple Payment or whatever. I think we probably see the most potential for growth in that direct payments. Obviously we are somewhat hampered at the moment by legislation and the rules and we wish we could accelerate more.
Until we can offer it to more platforms and more locations, that will be the limitation on the potential, not what we can do. Once those are gone, which I believe they will be, then I expect to see a really meaningful increase in those.
Thank you.
Thank you.
Hi, Martin Arnell with DNB Carnegie. My first question is to Yoav. How do you view the competitive landscape in casual and word games and how do you expect it to progress in the coming years? Could consolidation, how will that impact you?
We're starting to see consolidation in the market. What we are saying is again I believe that we are suited in the best way because of the platform we have, because you need to drive the operational excellence. If you look at one of our competitors, Triple Dot for example, they acquire now quite a big portfolio, they're very much focused currently. I would say internally they're seeing the integration takes a lot of effort and very easily. In a market like us, if you're not laser focused, you can drop the ball.
For us I see it actually as an opportunity to even capture more market share given the fact that they're currently much more focused internally. While until they'll be able to look back in, look outside in a much better way, we'll be already one or two steps ahead of them. Do you expect word games to grow share in mobile games market? I think they're going to grow. Currently we're talking about 5% growth. The market is the world. The world market is growing. We believe we can outgrow this market just on the word category. The rest of the growth that we'll provide probably will come with new games coming from new categories, from adjustment categories.
I have one question on Midcore as well. It seems that there is of course an element of luck here.
When you show the charts here on the games and all of a sudden Space Marines impacted positively. Do you see any of the special events going into next year that could impact any of your largest games in either positive or negative direction?
I don't think I can speak to Warhammer's plans over the next couple of years. That's not really our business. I think Formula One is a really interesting use case and I'll speak historically, but I think you can project that forward. When a Formula One season has one driver completely dominate or a single team completely dominate, the overall interest in the sport goes down. Social media views, TV views, and that is then reflected for us in the game. A good season in Formula One will absolutely have an impact on how we see the game and how performance and interest in the game goes. I won't point to anything specific, but I will say that it does have an impact on us and I look forward to a good Formula One season every year.
This season, for those that follow, has been very, very exciting, and we are seeing that reflected in the game's performance as well.
Interesting. Thanks.
Hello?
Yeah, hi.
Kushi Gupta from Hydro and I have two questions for you, Yoav.
Firstly, how long have you been involved with Pay Simple?
I officially took over in beginning of September. I've started my onboarding in the beginning of August.
And how dependent are you on a listing to drive consolidation?
Do you think it can happen anyway?
I think we can do it. I think that's more of a question for Maria. What my understanding is that it will help us, but it won't stop us even if we don't get listed. We can still get our plans. The question is the timing. How fast are we able to do it? Maybe Maria is better equipped to answer that.
You as an insider, is the company in a shape to be listed?
Yes.
All right, thank you very much. It looks like we have no additional questions. For our next segment, we are going to welcome Maria, who will host a panel on new games.
Maria.
Yeah, thank you. I'll bring a chair. Fantastic. Good to be back on stage. We sort of anticipated that we would get some questions on new games. We already addressed some of them. I would like to bring some of our talented leaders in the group on stage to help me talk to you about how we will make sure that we drive continuous successful games to the market, how we think about it, and how we can also leverage us becoming a bigger group. Welcome on stage. I will not introduce each of you individually because I think you do that better justice on your own. Some faces have been familiar with you, you already heard them, and also some faces are new for the day today. Alex, you're on the side. I thought we'd start with you.
Before you answer my question, I think you can just give a few words about your background. We have spoken about your game today, Warhammer 40,000: Tacticus, and even when we bought it, I think the market was looking at us a little bit. Why do you buy such a small game? We said we met the team, we spent a lot of time with them. It's an amazing team and we do believe that it's going to be highly accretive to our growth. It will be short term margin diluted, but growth accretive. I think that's exactly what we've seen, which makes me super happy. It wasn't your first game. Can you elaborate a little bit on what makes Warhammer 40,000: Tacticus a success and what did you learn also from the previous game?
Yeah, for sure. Just to start off, Alexander, CEO and Co-Founder of Snowprint. I've been in the games industry a bit more than 20 years. I've exited twice. The previous exit was to King, where I helped build the mobile business unit and Candy Crush Mobile, and then shifted over to focus on more Midcore type of games with Snowprint Studios. To get to your question about the development process for Tacticus and relating that back to new game development, there's of course many different ways that games can be developed. For us, it's at the core of our identity that we believe that if you want to be the best in the world at something, you benefit from keeping practicing at it. Maybe that's an uncontroversial belief, but that's what shapes us and what forms us. Our strategy is built on continuous iteration and continuous learning.
We can break that down into maybe roughly three focus areas for us. The first one is focus, the other one is the iterative process, and then we have what we call creativity within constraints. For the focus side, making games is incredibly hard. We are looking for every edge that we can get, which means that we are building on top of all the strengths that we have over the years when we are looking to the next game to have benefits on our focus, on our iteration speeds, and also on knowledge base around the users that are playing our games.
When we get to the iterative process, what that means, the most tangible example for us is that every game that we created, we have forked from our previous games, which means that we are starting with a fully featured game that we can start iterating on, prototyping, testing, rip out the parts that we don't need at the moment and then put them back in when we need them, add new things, or improve on them. This brings us to the final part of that, creativity within constraints, because then we are looking at what puzzle pieces are we adding back, how can we make them the best puzzle pieces that we do put back in, and just continue to evolve within our genre and continue to make each game better than the previous one.
Fantastic. You've done an amazing job, so that we're very hopeful and happy about. That's what we thought as well when we bought. Looking at the other side then, Helen, first of all, we're so happy to have the Plarium team here today and also have you joining our village. You've done a lot of work in different roles within your tenure with Plarium, and we're happy for you to give viewers later on it. Also, in your new role now, you're going to be responsible for shared services. I think it could be very interesting to hear from you, as you have sort of talented game developers bringing exciting new games to the market. How can we, by having shared services, actually help accelerate both the scaling up and also maybe how we actually iterate new games development by leveraging shared services?
Yeah, I will say a few words about myself. Yes, my name is Helen. Currently I am General Manager of Plarium Ukraine. This is the largest game development studio within Plarium. The studio that is actually behind Raid Game and many other games and also the foundation of the shared services that will become the part of the district and will collaborate and leverage other studios with its resources is actually many of these teams have also been born and built within Plarium Ukraine. As Maria said, I already have been with the company forever, like for more than 13 years now. I have gone together with the company through all the transformations and I think in all my roles within this transformation, some of these transformations I was leading. Some of these transformations I was supporting. Some of these transformations I was supporting other leaders to go through.
Yeah, it's been an interesting journey. In the new Midcore district I am going to be, my domain will also be with the shared services that we really want to elaborate and leverage the game development studios which are the part of the district. I actually was really excited to hear what Alex was saying and when
I was listening to you, I was also thinking that if I had to answer that question, I would use the same keywords like evolve, learning, learn from the mistakes, constant development, because that's the same what is at the core of our games and at the core of our success. We in Plarium have always seen the games as the long evolving service, long evolving projects, game as a services. We also say that we play an infinite game, if you know what I'm talking about. It's not only about the product, it's also our business philosophy. We think long term and we plan the games to stay long and to become evergreen and to support them. One of the things that we believe in is the people, the team, and our teams are growing together with the projects.
When we start the new project, the core people that have learned hard lessons of scaling, hard lessons of failing, hard lessons of success of the live games, they become the core for the new games development and their successors. The team that has grown within the live game, they continue keeping the momentum for the live games. It's the whole circle of learning, taking the successes, learning from mistakes, and moving on with the next game with this acquired experience from the previous projects. This is also what we believe in. Another thing, I think the second, not secret, but again part of our philosophy is that game development, we see it as art. It's creativity, it's the creation, it's the ambition to create something new. Development teams are always in the search of new ideas, are always in the search of, okay, what else can we do?
What are the other things that we can bring into the worlds that we're building? What we have also learned, and I think Alice was also talking about it, and I think Stas will say about it, is that we want to find the right balance between art and science, between ambition and discipline. That is why everything that we do, whether it is a live game that we need to keep the momentum, or the new games, we want to prove it and we want to support it with the data as soon as possible, as big as possible. That is why the data driven approach, the analytic culture, let's call it, this is also the part of everything that we do, whether it's a live game, when we have lots of data from existing users, from the market, we know everything.
As Yoav was saying, we are also very much data driven. We know everything about our players from the moment that they start playing our game. We can use this data in order to build and to continue the game to be live as long as possible. Also, when we develop the new game, we try again. We have built in Plarium the green light process that helps the new games to have very clear milestones and to have very clear criteria of success based on the KPIs, based on the play tests, based on the market research, as soon as possible. The ambition and the creativity of the game development teams has to be supported by data. On the one hand, it is a very creative, hit driven business because we want to have hits, we want to excite people, we want to create this amazing experience.
On the other hand, it is business and we understand that and we want to find the balance between the ambition and the discipline. Another thing that we have been developing at Verm, and that's exactly what we're going to elaborate and to use and to develop as a part of the new structure of the Midcore district. Oliver was saying a lot about it. It is the shared services, the teams that have grown their expertise, that they have grown their professionalism, and this team working with the big mature games like Raid: Shadow Legends, for example, or the other games that we have had, and this team are able to provide the services and they are able to support the games at the different stages of their development from other different studios.
I will repeat what Oliver was saying, which means that probably the team will not need to build their own analytics data platform from the very beginning because it's complicated, it's cost efficient, it's highly engineering and technologically demanding project. We can already provide the data platform, the analytic culture, the team of analytics that will work with that. This you have seen in the presentations. There are quite a lot of different functions that we see as the shared one.
Our main ambition within the district is to create the ecosystem, create the environment that will support and that will enable the game studios to be successful, to create more successful games, to build them better, to build them faster when they rely on already very professional services and very professional tools and very professional platforms that have already been tested with the large mature games and that already ready to operate. I think I took quite a lot of time, sorry, but I guess they answered all the questions.
Very good, very comprehensive. On that note, just follow up then with you, Stas, because you mentioned a little bit bringing sort of talent from what you're learning, from what you've done in the past, what works, what doesn't work. I mean, from your point, Stas, I mean we heard you talking about Raid: Shadow Legends and every time I hear you speaking about Raid and your team, I always get so excited because it's amazing, the depth of experience. How does it work then working on such a big game? Can you actually leverage some of that skill set also by inspiring and bringing that into making new games? Because it is fundamentally different having a small startup versus a very big established game like Raid.
Yeah, sure. Of course it's based every time, it's based on the talent of the talented people. Outside of this, talented people help you to create something big. There is a lot of other stuff that will help you to do it in an efficient way. It's very important because, for example, if you're building the game, at some point you will want to scale and you will want to make much more, much more releases than you do. At that moment, if in your company there is a culture, kind of development culture that already, and you know that some development teams or maybe project managers or other people already done that, you can ask for help, you can ask for just to be a consultant.
What Helen mentioned, if the core team has already seen it, for example, on a Raid and then the core team is working on another product, it won't be a surprise for them that now you have to do the parallel releases. No, we've already done it. It's like the path they've already went. At the same time, it's still a lot of people with their expertise who can help with this process. After you build the process in an appropriate way and it's about everything. It's not about only the development. It could be support, it could be community. Even the game design, how you do the game design is very important because it's a creation, generation of the ideas. It still should be, like Helen mentioned, in a kind of a disciplined way. It's very important.
If you have this culture and this culture is established by the people, it's much more efficient and easier to share this with other teams and to, I'd rather say, to export this to other products, to the new products you're trying to launch. That's how it works, I guess, from our side.
Fantastic and moving on, You can argue the bottom end of that section. You'd represent the more core of our Midcore games. Let's move to the very more casual with you, Yoav. As you said, you're a fast follower. I think someone in the audience also said it's a highly competitive market, which for sure it is. How do you make sure to keep that iteration, getting games to the market fast? Also, now you're moving outside of the world category.
I think the first thing is to understand the market size or the opportunity for the game. The effort of developing a game is the same in our business, so we need to make sure the size of the prize is good, is big enough. If someone pitches, let's say, a game which the market size is $10 million, it's not interesting. We need to make sure we're looking at $200 million, $300 million opportunity so that when we are gaining market share, there's enough meat on the bone. The second thing is, once we launch it, we want to make sure that we are following very clear KPIs because we do know what a good game looks like. We also know that if a game doesn't get out of the gate, we want to scale it with these KPIs. Let's not invest in it.
We have quite a clear methodology of saying, you've got X iterations to get to, let's say, the first day retention. Day one retention means if I bought 100 players yesterday, how many are going to still play the game today? If they're not hitting a specific number, we're saying, do you know why it didn't happen? If the answer is no, then let's move on. If the answer is yes, I know what I need to improve, we're giving them a few more iterations. If they're still not able together, we have to close, we have to say, let's move to the next opportunity. We want to have a very fail fast methodology in that case.
Do you find that being difficult? Kill your darlings.
It's always hard, by the way. It's always a tough balance between following that very ruthless methodology versus the point when the team says, look, I know I failed three times, but we really believe in that game and there's going to be success behind it. Therefore, I'm saying as much as it's almost scientific, almost like binary, yes or no, sometimes you do need to put your faith in the team, especially if it's an experienced team, and tell them, yes, you know, I'm giving you another two months, for example. That's where we're ending it. The tough part, as you said, is killing the babies and learning that you don't get too emotional, too connected to the games.
Just following up on what was said before about the culture, I think to be able to drive successful games you need to have a culture where we are not afraid to fail. On the contrary, failure is a good way to learn as long as there's lessons learned and you can implement what you failed about. I think this is one of the recipes for success.
Yeah, I agree. Coming back to you, Alexander, I mean, we have different types of IPs in our portfolio. I mean, we clearly have Raid, which is an amazing homegrown IP. I mean, you work with a Warhammer IP. How do you think, sort of, and when you think about maybe leveraging an IP versus building your own, sort of, how do you think about that? What are the pros and cons? Is that a given success if you work with a Warhammer, our sort of IP?
I wish it was a given success.
Far from it. What is given is we know that there will be an audience that is interested in what we are doing. It's de-risking quite a lot for us. When we approach it, we approach it in a bit different way than from Raid, for instance, where we do a full integration with the game. It is a Warhammer 40,000 game, while with Raid you're doing multiple different integrations and you have your own IP. The benefits for us are that again, it feeds back into focus. We get a full universe that's just full of characters, full of lore, and we can be creative within that space. Also, speaking a bit to kind of the luck factor that was mentioned over here, we are choosing the IPs quite carefully. We are looking at universes and IPs that continuously deliver these types of opportunities, that aren't just one-offs.
We would be much less likely to look at one blockbuster movie that does one movie and then maybe a sequel in three years' time, but rather collaborate and work with IPs that are continuously growing, that are basically kind of already on a LiveOps schedule that we know we can latch onto and that we also know we can enhance. We have kind of this symbiotic relationship between what we are doing and what is happening in the rest of the IP. That's a key criteria. Also, to the point of how big can it be, it needs to be able to support at least $100 million plus yearly run rate revenues. The IP itself and also what new people we can bring into the IP need to have that type of ceilings.
Fantastic. No, it is quite. I mean, the process just behind figuring out which IP action marries with a game is quite a thorough process to actually land on that. I mean, it's quite thorough to actually land on that and also understand the reach of the IP.
Yeah.
It needs to go down into the core and the spirit and the ethos of that IP. Otherwise you'll be called out by the players quite quickly, and not have it be something that just feels retrofitted or that is kind of just a skimming.
Yeah, the community can be quite brutal sometimes. On a good note, they do love our games, so that we are happy for. On a different note, I think our core games are the bread and butter of what we have. We want to invest in more new games, but at the same time, you always have X amount of resources to allocate. How do you think about that? Maybe I look more at both us and Helen on this one, because you're both having amazing games, live games that you support. We would love to scale up new games. How do you think about allocating resources, promoting and building up new games and supporting them versus actually putting eggs in a more secure basket? You can argue with existing live games.
We'll start a little bit. It's always finding the right balance, and the balance, once you find it, is never stable. You always need to redefine this balance again and again depending on what is happening with the games. Usually, when the game started, I told a little bit how we do it. The core team of the existing live game that is in momentum, we understand it, we see the strategy of development of that game for several years ahead. We know that is the moment, and there is a team that's already fully operated and has grown together with the project, with the live game. The moment starts when we start thinking, okay, maybe it's time to launch the new project, which means that the core team, usually it's like five, four enthusiast people, they're doing it usually as a side project.
After they have done everything else with the existing one, they start exploring ideas. This is called the ideation, ideation pro ideation stage. They try different ideas. They look at the visuals, they look at the technical challenges, they look at the market, they think, okay, what do we feel first? It starts always as a passion one. What do we feel that we want to, what we learned with the previous game, that we want to do better in the new game. It starts like the ideation, with a small team with some prototypes, usually as a side project. When the team, this little core team, has enough belief into what they're doing, has a certain vision, what the new game is going to be about, I think we start going through this green light process that we said. The same as you have.
We have very clear stages and very clear, there is a green light committee, there is a clear criteria of a certain stage of the development of the project. The team, it's like the North Star for the team. In order for us to pass to the next stage, we need to clarify this. Whether it's the vision or the artwork or some technical prototyping, the play test starts. Whether we see that this game will be accepted by the market, whether there is a market for that game and all these things. It's pretty thorough. We created this project, we created this process when we actually did a very serious work on analyzing our success stories and also analyzing our failures.
We kind of have this understanding, but it starts as a fashion project, as a side project, and then at a certain level, when we have this understanding, when we have the vision, when we have the first initial proofs or signals from the market, from the research, from the very initial data that yeah, we can do that, we try to find this balance into investing into the development on the new project. I think one of the interesting slides was when Oliver was showing is that Midcore games are pretty heavy on the development efforts. They're pretty complicated and they require the resources and they're pretty again complicated. For example, like Raid , which is constantly delivering content to the players, that's a huge amount of work. At a certain point, we need to make a decision.
We need to find this right balance between keeping the live game live and investing into the new game, investing into the new project. We understand how it's developing through the stages. There is a lot of science in that and less passion at that moment. I also wanted to reflect on what Yoav was saying. When Yoav was presenting, I was actually telling Stas, I think we have found the magic solution how to make successful games. You just need great creative ideas and the discipline in execution. It's not that simple.
But.
Yeah, because again, we are talking about the same things, despite the fact that we're different clusters with different districts with different games in them. The right balance between passion and science and discipline and execution.
Yeah, but from the product side, you know, there is a kind of legend that the good manager is working on getting ready someone to replace him in the future, to make himself abundant. Yeah, yeah, to make myself abundant. The good, I guess, Team Director or Product Director should be ready, should prepare his product for this moment when the focus will be not fully on his product, to be ready to give maybe some people from your team to another team, but to build the whole architecture of updates and everything that is in the product in a way that you will not be harmed because of this. This is the main idea.
We've started to build again all the LiveOps features because we needed LiveOps, but some of them we started to build in 2023 because we know that there will be a moment when we will decrease the amount of the development, but we still want to be of the same, same level of giving something new to the players. We are doing tools. We are doing tools to be efficient, to give the content to our players. That's, I guess, the main thing is understanding that this moment will happen and let's get ready to it. Why not? It's the most efficient way.
Yeah, not very good. As we heard today, Raid has a very long journey ahead of themselves. Hopefully look forward to seeing games coming up next to Raid. Cool. Moving back to you, Yoav, I think what was exciting on your slide, and we talk a lot about it as well, is, I mean, yes, you made an amazing position in word games and I think now you're starting to successfully scale also games outside of the word category, which is different games. Do you actually work and iterate the new games development differently as you're working with games that may have a different game engine and sort of meta game version on it.
I think yes, the answer is different channels require different product expertise. The question is how much do we stretch away from core? If it's very adjacent to core, you can use the existing team and the existing capabilities. If it's like we're going to do a match three game, for example, which we don't have the expertise, then by definition we'll need to bring someone who has the product expertise or the general expertise to help us with that. We need to develop capabilities that we don't have, like enough monetization, because we are very much focused on ad monetization and managing economy. Managing monetization, the stores, building the packages is a different story. We will need to complement ourselves with this.
This is when I said either we do it organically or M&A, but the platform at the base is quite similar because if you think about UA, it doesn't matter if I'm marketing this game or another game. It's still the same discipline of understanding what's my ROAS, what is the return on ad spend, what's the cost that it's going to cost me, how much LTV I'm creating there. If I need to analyze the game, it's the same metrics. It doesn't matter if it's a Midcore or a casual game. We're looking at retention, at when is the conversion happening, how much, how long they are surviving, and so forth. I would say 80% of what is needed to go to another just in second vectors organically is there. The rest is product expertise.
Of course.
Yeah.
We got a great question earlier from the audience on how many shots at the goal do we want to have and how can we improve the accuracy thereof, and what should be our target sort of number of games to be launched. I mean if you were to dream to aspire, as you see probably, time to market is much faster in PlaySimple than what it is for Midcore games because we had to be a bit more patient there. I mean if you would dream, where would you see, and we can go through the way.
We approach it as we said we're very data driven, very systematically we are saying okay, let's understand in the next three years how much we're going to gain from the existing games. Given what our ambition to outgrow the market, outpace the market a bit, that sets a specific goal. I was saying the rest needs to be complemented by new games. The cycle of new games is always like it goes high investment and only then you're starting to see the profits or the revenue coming up. The more new games we launch, then our EBITDA will go down, but down the road it will stay much, much more massive growth. On the other hand, if we don't invest enough, then yes, we'll protect our EBITDA in the short term, but in the long term we have a problem.
It's about more, I would say, policy approach of how tolerant we are to eroding a little bit our EBITDA for the long run and giving that sweet spot which balances our shareholders' appetite to decrease the margin. This is what we're saying. That's the amount of money we can actually spend on new games because the spend is the cost of people is relatively, for us at least, is low because we are based in India. The higher amount is the amount of UA. That's what really makes the biggest dent in the P&L and that gives us about the budget that we can actually utilize to launch the games.
If you know, for example, that we need to launch two new games successfully every year to be able to drive double-digit growth and for that we need X amount of millions for UA, we know that also the funnel means that if we are installing one out of X, we're going to be successful. We need to have 2x at the top line of the funnel to be able to try fund enough UA for all the attempts and the scaled games and that's the number of games we're going to do. That's our approach and methodology for deciding how much to invest for that. Ideally, as a game lover, I would love to do as many new games.
That's what excites everyone, I think, in the studio and I'm sure speaking on behalf of everyone here, like if you tell people develop an existing or a new game, everyone's eyes will shine and would love that.
Evan, reflections from the rest of the line.
I think our approach is probably quite different. I think here's the differences start to show scale. We probably are thinking about the same way, but when it comes to how often do we want to put something new out, it is much more seldom for us. It's probably, you know, every three or five years that we want to kind of kick something, something off. It's quite big productions with very high upside, of course, as well. You also see it with the team that when they start one of these games, it is an immense amount of passion. They are typically very attached to the IP, so they want to be able to continue to grow the game over many, many years, and we want to grow the company responsibly. That means that we cannot have too many irons in the fire at the same time.
We have something that grows to something very, very stable, that has good profit margins, that has a healthy and thriving and growing community, and then we can start looking into the next project. Much slower tempo in putting new things out.
I'm nodding very actively because I think we have pretty much the same approach as Alexander was saying. As long as we see that we have live projects that are stable, that are predictable, that are again stable in terms of what they can deliver in two, three years perspective. Even more then is the moment when we can start thinking about launching the new one because also the time for production of the game to actually be launched at a certain level, it's much, much longer and with much, much more effort, with much, much more resources that are required for the Midcore.
I think ours is very close to Alexander and we think very carefully how to have this balance of stable revenues and stable profits of the existing game and investing and slowly growing, sometimes slowly, sometimes faster, growing the new teams and checking and always checking whether we are on the right path, whether we should continue the development, whether we should continue investing in production or whether we should stop and get back to another idea because this one is not proven by the market and doesn't show good signals. Our iterations of new projects are also longer. I would also say something once in two, three years to have something big. That would be amazing. Of course, we would like to do it every year at least, but that's not very realistic.
So let's.
Better do it right than do it a little bit less often.
Yeah.
Cool. Last question from me and then we'll see if the audience has any better questions than I do. I mean, AI is a topic for everyone and we'll have an AI panel later. I'm not going to steal your thunder, Oliver, I promise. As you're looking at sort of game innovation, game development and also, I think everyone is mentioning it's about learning, it's about failing fast and so forth with the new technology, AI being one of them. Are there ways we can actually improve our accuracy, our hit rate, fail faster, test sooner? How do you think about that?
I think it drives the ability, it actually expedites the ability to turn around things. I'm seeing what we have in place. Simple that we started, we just started the water with what we call vibe coding. In the past, the product manager had to write a game design, I had to write a long spec, send it to development, get something out, would take a couple of weeks and test it again. Today, almost by writing the right prompts within, let's say, a day walk of iteration with the system, you can get something working that we can talk to the market. It's like even pre-MVP that we can test out. That gives us much more ability to try more things, much cheaper, much quicker.
Of course, once we see, we're starting to see there is like oil, then you need to put it to make it a scalable thing in a much more robust way. I do believe that this is something that definitely will expedite the ability to try more things.
Yeah. When it comes also to the pure side of the game development side, iteration speed is almost a one-to-one relationship between iteration speed and the quality of the user experience that you're able to put out there. The quicker you can iterate, the quicker you can test it. It's not about kind of testing just one game quickly and failing fast. It's also about in these big projects, how quickly can you iterate on level design, character design, et cetera. That relationship is just so direct. That's one of the places where we are very excited about also kind of balancing levels and verifying your hypothesis with the help of AI, all of that to empower the developers to create better experiences quicker.
Yeah, I agree 100% with the new products. Even with ongoing products, the next step from the idea is the validation of this idea. While AI may not help you to create something new, it may help you to validate the idea faster. It's very important because without validation this idea is just image. I don't know.
Just an idea.
Yeah, just an idea. It helps to speed up iterations. It's a lot.
It also reduces the friction, I would say, between product and technology. Sometimes the product manager has something in his head, and when he tries to convey to the developer, depending on how you develop it, they don't exactly get what they want. It takes three, four iterations until you get exactly what you want. Using AI, you can almost show the developer, this is what I want. If it's much more complex and you need much more complex systems to integrate, they can understand exactly what the product manager or the game designer had in his head and actually develop it. It creates, I would say, the waste iteration. It eliminates that or reduces that significantly.
Fantastic. Good. Do we have any questions from the audience? We're in the mood for a coffee break. Great. Cool. Thank you.
Thank you.
Glad we had a good discussion.
Hi everyone. We're going to take a slightly longer 30 minute break. Please come and talk to the MTG team. We have an experience ready for you with some of our games. The doors will be on stage left, so please follow the red line and you will go upstairs. We will see you back here at 4:30 P.M. to have a spotlight focus specifically on AI, followed by our section of financials, outlook, and capital allocation. Thank you very much. See you at half past.
[audio distortion]
Start with the financial section. Thank you for being with us all the time so far. This is quite a dense, information-dense day, but we had a lot to share.
We still have a lot to share.
Thank you for staying with us. With that, I would like to welcome Oliver on stage to talk about AI.
Hello again everybody. I'm here now not as just the CEO of the Midcore District, but also as someone that deeply believes in the potential of AI to revolutionize almost every aspect of our business. I'm going to talk now about some real examples. I'm going to show some real examples of how AI is being used across some of our studios and put some numbers to it. One thing which you sometimes hear is AI as a thing of the future or as an idea, but without any real implementation within MTG, we're beyond that. We're already seeing today that within our businesses, humans using AI are already outperforming humans working on their own. It isn't about replacing humans with AI. It isn't about saying, how can we replace this team of five artists with a team of five AI?
It's about saying, how can we empower this team of five artists to use AI to do more than they could before, to have more choice than they did before, to have a better template of tools in front of them than they did before? In the same way that Photoshop revolutionized what digital artists could do 25, 30 years ago, AI is revolutionizing again, not just what digital artists can do, but what people can do across the whole range of game development. I spoke earlier about the impact that AI can have across all of these areas, and now I'm going to do a bit of a deep dive into some engineering, some arts, and talk about where we're already seeing in product. Generative AI and AI in art has been around for a while.
It was probably one of the things that brought it to the attention of the world. In this example here, it's about how using our internal proprietary AI system called Art Maker AI, which was built by the Plarium team, but is now available across all of MTG. It's about how this sits in the middle of our art pipeline. On the left here, you'll see the model, a 3D model of one of our characters from Raid. That 3D model is in the game. It's great in the game, it's perfect for playing, but it's not quite right to use in a 2D image. What we need is a way to take it from being a 3D model to using it in a 2D image for some advertising or on the app store. What we do is we click.
We can use our Art Maker AI and tell it, we need this character to be in 2D and we need it to have red eyes, blur out some of the legs, change some of the lighting, change some of the shadow, and then change the background. We want it in a scary churchyard or in a dungeon or whatever it is we might mean. The original image is still made by one of our talented artists in a 3D model. It's then about saying, how can we use that +AI to get to a different endpoint, a 2D image. Here you can see at the bottom, that would have taken about 60 hours in the old world, but in the new world, it takes about 48 hours. That is a real measured 20% decrease in the amount of time it would take.
What that means is that artists can then use that 20% to do something else, to start a new piece of work for us. It's not just characters or big complex things where we're also seeing real value in AI of art is choice for the artists. In this example, the artist started with the idea of a spear to be an item in the game, but they knew that they wanted it to look a little bit different. The artist used AI to say, give me 20 different variations or 30 or 40 or 100 different variations based on this initial sketch. What the AI can then do is take it and very quickly give the artist a massive range of choices. Then what the artist does is they look through all of these AI generated pieces and they take what they like from each part.
They like the tip of this spear, the color of this one, the hilt of this one, and then they put it all together into a final paint over. Again, an artist could have done 50 variations of it, but realistically, they probably wouldn't. AI gave them that choice and that opportunity to take the best of lots of different pieces, but still finished by hand. A place where we're seeing real value of AI in the art world is in early ideation of new games or new versions of games. This is a piece of AI art generated for one of Hutch Games' games called Match Creek Motors. We knew that we wanted the game to take place somewhere in the world. It's a match three places puzzle game, but we didn't know where.
We used AI art to generate versions of images that were in the gritty streets of LA, the mountains of Europe, the streets of London, all of these different versions. This example here is the kind of the Appalachian Mountains of the USA. Each of these individually would have taken days and days for an artist to make. What we were able to do with AI is have all of these options at the very beginning of a new game idea and already start to explore the space, not just think how would it look in LA or how would it look in Italy? You actually see an image. We can go one step further and say, what would it look like if it moved? This is AI created.
Based on the image I just showed you, we give it to an AI video generator and it builds up this little fly through. Now we're not just thinking, what does an image look like? We can now imagine when we build the game, what does the world look like, what does the lighting look like, what do the trees and the environment look like? We can change this easily. If we wanted it to be raining or we wanted it to be nighttime, we could very easily get AI to do that. Normally in the old world of game development, you would never build 20 versions of a city just to test out and see how you feel. It's too expensive and it's too time consuming.
Now using AI, we're able to do this at the beginning of a game, explore an idea space with images and now also video. Beyond art is code. I'm not going to show you screens of code because I wouldn't understand it and probably neither would you. What we have done is measure the impact of coding assistance on AI, sorry, AI coding assistance on code deployment. Across our biggest studios, Hutch Games, InnoGames, and Raid, somewhere between 60% and 90% of all engineers are already using AI code assistance. What this does is it sits by the engineer as they work and helps them with that code, making sure that fewer mistakes are made, making sure that documentation is created. Let's look at the stats here. Just the basic writing of code is now 10% faster. This is the core of what engineers do.
They write code that becomes games. That's now 10% or more faster with code assistants. This isn't changing the code itself necessarily. This isn't asking the engineer to rethink how they work. It's just there next to them, supporting what they were already doing. Documentation. Whenever you write code or whenever you make something in software, you always need some documents to go next to it. These documents usually explain to other people how the code works. If you want to change the code in the future, this is what you need to know about it. Or don't change this because it might break something. If you ask any engineer, writing documents is their least favorite part of the job. They want to spend their time writing code, and the document is just something they have to do. Using AI, we've managed to speed up that code.
Sorry, that documentation creation is four to five times faster than it ever was before. This means that engineers can spend more time writing code without us sacrificing the quality of that documentation. That means that in a year, when another engineer comes along and wants to change that code, they're better able to understand what it's doing because the documentation is just better complex. Pull requests and push requests. These are code reviews. When an engineer writes code, it's very common to have another engineer read through that code and check it just to make sure that there's nothing in there that doesn't work, could be more efficient, could be faster. Doing these takes time. An engineer has to sit down and literally read them on a screen.
With the use of AI, that engineer who is reviewing is now about 20% faster because the AI is able in parallel to review that code and make suggestions to the reviewer to make sure they don't miss anything. If they have a suggestion on how to improve the code, the AI can validate that suggestion or give an alternative suggestion. This improves the quality of the code because the review is being done by human and AI, and it improves the speed of that review as well. All in all, the software we have at the end is better quality and also built faster. An easy way to think about this is every single week, an engineer within one of our studios using AI assistants is saving four to eight hours. That's a day a week. That's not meaning we reduce the team size of engineers.
It means that we free up a day a week for those engineers to start working on the next thing, to start having the next great idea or building the next feature for our players. This increases the speed at which we're delivering content to our players. This is code assistants. These sit next to an engineer within the system. The next stage is agentic coding. What this basically means is you don't write any of the code, the AI writes the code for you. I'll show a video in a moment, and what this will demonstrate is within Puzzle game, the one I showed, the town of Max Creek Motors, we were able to have somebody who is not an engineer at all create boosters in the game that destroy blocks. Yes, an engineer could build those and they are built in many games.
What this shows is that you have a game that works. You can now have people who are non-engineers go back to that game and add new features or change that game. What that means is that games that either were not commercially viable to keep alive or the engineers who worked on it have moved on to another project, we can still keep building that game with non-engineers. As Yoav mentioned earlier, it also means non-engineers can start to put their ideas down. They can start to very quickly have a prototype. They can start to say, actually, what if I change this? How would that work without having to build a spec and give it all to an engineer? What you'll see here is the basic one.
The hammer in the game, this was built by an engineer many, many months ago, and then a super hammer, which basically does a much bigger piece of damage. That was just a game designer who said, hey, AI code, please write the code to make it do not what it used to do, but a new version of what it does. The quality of the animations, the quality of the UI is all basically ready to be shipped to players. This isn't about building a quick prototype or something that's rough. This is about saying a non-engineer has built something that could literally be shipped in the next version of the game and be in the player's hands without ever touching the hands of an actual engineer. The other thing that agentic coding is being used for is people building tools to help with game development.
It's not just about building things in games, it's about saying as somebody in the games business, I need a tool that does X, I need a tool that changes all of the tens into twenties if this happens. I need a tool that checks that this piece of software is connected to that software and if it's not, then fixes it. Agentic coding means that people are able to create these bespoke tools very, very quickly for their exact needs and the AI will create them to the exact needs of that person. Across InnoGames, for example, our studio in Germany, lots of the team there are using agentic AI to create these mini tools to help them with their day-to-day jobs, to automate something, to speed something up. All of those tools are built without the need of an engineer.
When we think about the next steps for AI and where it's going, anyone in the room that knows where it'll be in five years, let me know because I think we can all make a few billion dollars. What it means for us as a business is that we want to make AI tools available to everybody in the business. Whether you are in the art team, the design team, the finance team, the HR team, or anywhere, we want to make AI tools available to you, and we want to make it so that it's easy to pick up. As I mentioned earlier with the Midcore district, and also true of the casual district as we do M&A, we want to make it plug and play.
You come into one of our districts, here's a suite of AI tools which are world class and already speed up your game development. The next one is what are called AI mentors in game. One of the big challenges in game development, and especially what we do in Free to Play, is players will come into the game. Sometimes they will leave for a month or two, we do something big to update the game, and they come back. Often when players come back into a game, they've forgotten how to play, they've forgotten how all the games work. An AI mentor, the idea there is that you come back and there's an AI in the game or in Plarium Play, our platform, that analyzes your game, analyzes your behavior, and says, ah, come back.
I suggest that you do this next, or you seem stuck on this level or this system. Here's some advice on how to pass it. We can also think about those AI mentors for new players. When you first come into a game, I might get stuck at level 10, you might get stuck at level 50, I might get lost on one type of mission. The AI mentor is there, and the AI mentor is there to go, oh, okay, you seem stuck. You've been here for a while, a day now. Let me give you some advice. Let me help you. As a player, you can ask that AI mentor, this hero, what equipment should I put on them? Should I put the red sword or the blue sword? The AI will go, hey, looks like you're trying to fight these monsters.
I think the red sword's a good idea. It's all about making the experience of the player in game even better through using AI. Third, we've talked about big data. We have billions of pieces of data, far more than any team could ever realistically look at. Can we set AI loose on that data to find trends, find opportunities, find patterns in it that we can then use to make sure the games are the very best they can be? Finally, AI is not a solved problem. There is no single Photoshop like there is for artists. We need to be constantly evaluating new AI solutions. Solutions where it is today is probably very different to where it will be in a year or two years. We need, as a business, to always be experimenting in some of our studios.
We have dedicated experimentation budgets for AI where people can spend a bit of money on basically whatever AI tool they want to try out and then come back and tell the rest of the team how it's gone. What I do know, though, is that the AI today is the worst it will ever be. Tomorrow it will be better. Next year, it will be better. In two years, it will be even better. For us, that's an incredible opportunity if we embrace it, and there is no option to not embrace it. Thank you very much. Now I'm going to hand over to our CFO, Nick , to give you some financials.
Right, good evening, everyone. My name is Nick Hopkins and I have the pleasure to be MTG CFO. I also have the pleasure of being the final section of the day, the final sprint before we all get to go back upstairs for some nice food, drinks, and to play a bit more on our games. What I plan to spend the next roughly 40, 45 minutes with you is a recap looking at our historical and recent financial performance, a look forward to our outlook for this year and beyond, and then how we will drive growth, our cash, and our capital allocation to drive value creation going forward. Unfortunately, I'm actually a little bit jealous. I'm the only one who doesn't get a video in my section.
I still hope that by the end of it you share my conviction that we are a growing company and we will continue to drive sustainability, sustainable, profitable growth going forward. That growth is going to come from multiple vectors. It's going to come as we've spoken about today, about investing in our existing and our rising star games and making sure we do so in a way that we are maximizing potential returns. It's going to be about growing our new game pipeline, but in a low cost capital environment. It's going to be making sure we drive those efficiencies to drive agility and it's going to be making sure that we continue to pursue value creative M&A but in a very disciplined format.
That is all growth in together but that goes hand in hand with then how we use our cash, how we use our balance sheet, and how we use our capital allocation to really drive total shareholder returns and therefore value creation. I personally am very excited about the journey that MTG has been on and continues to be on as part of the reason that I joined. I'm incredibly excited by the strategic vision and ambition that Maria, Anton Gourman, and Yoav have spoken about today. What's also exciting is that we really do actually have the financial foundations, the financial momentum, and the financial framework to deliver on that strategy. If we start by double clicking on that aspect of financial momentum, we're back to sustained organic growth. We've delivered three sequential quarters in a row now of mid to high single digit organic growth.
This culminated in our Q2 results with 9% organic growth for the quarter or 8% for the first half of the year. I think what's actually quite important to call out about this growth is that on the one hand it was very broad based, it came from different games within different studios at different parts in their growth cycle. It came from Heroes of History, it came from Tacticus, it came from F1 Clash, it came from PlaySimple's successful geographic expansion as the chart just went through. It wasn't with us firing on all cylinders. We do still have an opportunity to further optimize some of the performance of our games. Touching on the right hand side of the page as Maria spoke about earlier, we bought Plarium for three core reasons. One was the scale, one was the tech, the team and the tools.
The third really was for Raid: Shadow Legends. All the rest is essentially kind of growth optionality. As you can see, it's delivered on the scale. It's doubled our revenue in the quarter Q2 2025 compared to Q2 2024 as Oliver went through in the Midcore district. It is the foundations of the tech and the tools and the services of that centralized platform. On the third aspect, as we said at our Q2 results, Raid: Shadow Legends is delivering growth. It grew low single digits in Q2 earlier this year and we're incredibly excited about the future of that game. Now, where do we stand today? There are lots of pie charts on the page, lots of small font, but there are actually just two very simple messages. First is we are a very well diversified group.
We're well diversified across franchises, genres, platforms, monetizations, geographies, gaming locations, gaming growth cycles, etc. The second point, which I think is the more important point, is this diversification drives growth optionality and growth sustainability. What I mean by that is it means we can actually invest and allocate capital to the areas which will drive the highest returns over time and those areas will shift, but we've got the flexibility to be able to adapt and invest in those areas. Secondly, it means we'll be able to have more shots on goal. As you actually heard from the new games panel that we just had, there's a big difference as to what those new shots look like.
If you are sitting with Alexander versus your situation with Yoav, it means that we can have some low capital, low risk, very predictable shots, but we can also take some bigger shots with also potentially bigger reward outcomes. As we think about growth sustainability, that really goes hand in hand with how we think about optimizing our game economies. As you've heard multiple times through the course of this afternoon, we really are a data-driven company. We get huge inflows of data about player behavior, player engagement, and player monetization. What we do is we use that data to ensure that we optimize how we deliver our content. That's the cadence of the content, the marketing behind that content, how we structure the content, how we bundle or price the content.
All of that is done to make sure we optimize the balance between engagement and retention, retention and monetization. Or putting it in a very simple way, if we were to just solve for monetization, our retention would fall dramatically. Likewise, if we were to just solve for engagement, we'd have no revenue, which would be a little bit of an issue. We do this very much on a game-by-game basis, and you can't see the numbers on this page here. On an overall group basis, what you can really see is we've been able to grow across both of these. We've been able to deliver significant growth in both our daily active users, our DAUs, and also in our ARPDAU, our average revenue per daily active user. If we start to look down the P&L, we've actually got a very simple cost structure.
The first line item is our platform fees. As Ali mentioned in his piece, these are essentially the fees that we pay to third-party platforms like Google, like Apple, taken against in-app purchases and subscription revenue. Ollie spoke about the real direct-to-consumer initiatives that we have to try to reduce those platform fees. These are initiatives that we are already undertaking today. That is further utilization of player and play, further utilization of our own web stores, or further activation of direct payments. The second item in our cloud P&L and the largest is our UA spend, close to 40% of our LTM gross revenue. We make our UA investment decisions to really try to optimize between growth and margin. I'll use the next slide to come onto that in a bit more detail.
For us as a group, the real key enabler is how do we get an incremental return or incremental revenue for that same dollar of UA spend. We can really do that through two lenses. We can ensure that we've got the best-in-class systems in each of our casual and our Midcore districts to drive that UA efficiency. We can leverage our scale, we can leverage our data, and we can leverage our expertise to make sure that we are allocating that UA investment. We're making UA investment decisions against the games and the marketing channels to really optimize those returns. Finally, we have OpEx, which is primarily related to personnel, which is again around 20% of our gross revenue. This, on a function-by-function basis, there's really two levers for optimization.
In certain functions, we will benefit from operating leverage from economies of scale, and in other functions, we'll be able to drive either productivity gains or efficiency gains from increased AI adoption. Overall, when you take all of these into account, we've got incredibly healthy margins that we're proud of, with multiple levers where we continue to optimize those margins. I want to spend a moment to double click on our UA, which we think of as an operating toggle between growth and margins. Typically, the more UA we spend, the more revenue we'll generate, but it will come at diminishing returns. We ensured that we use our extensive cohort data in returns models, which really analyze and predict the return on that advertising spend, or ROAS, as you've heard referenced a few times today.
We then use those models to inform and optimize our UA investment decisions to maximize returns. It's worth calling out these are highly sophisticated models. They've got incredibly impressive levels of accuracy, which gives us conviction in our level of predictability. Multiple of our studios, for example, are able to track around 95% of accuracy when you compare their predicted ROAS versus actually the realized UA spend, not just on a one-year ROAS basis, but even on a three-year ROAS basis, which is incredibly impressive.
I think what's also important to call out, and Oliver briefly touched on this earlier, is one of the things we're really striving to, and this will be aided by the district model, is for a harmonization and a consistency in how we evaluate ROAS, how we evaluate recoup, to make sure that we've got complete apples-to-apples comparability between studios and the different games, to really make sure we are optimizing our view on what is the maximization of returns. Finally, the thing I'd say as well is as you've heard, we continue to get huge swathes of data on a daily basis, on a minute basis, on a second basis. This is a continuous loop that we constantly are able to adapt and optimize our UA spend.
As we've spoken about in our recent results, we've been able to find ways to continue to scale up this UA spend to underpin our growth. You can see that scaled up over time. The chart shows the LTM UA spend as a percentage of revenue, which has crept up over time, but consistently at attractive ROAS levels. It is very important to call out this UA spend doesn't just drive short-term growth given the nature of our games, this drives near and medium-term growth. Taking that all together, going down our full P&L, we've got a proven track record of sustainable long-term profitability growth despite some of the ups and downs since COVID that our industry has faced. Since the peaks in 2020, 2021, we've been able to grow our adjusted EBITDA by a CAGR of almost 30%.
Throughout that time we've had very stable attractive margins, typically in the kind of mid-20s to high 20%. Enough talking about the past and where I've been. Where do we stand today and where is the future? Earlier this year we gave guidance to the market that we would deliver organic growth in the range of 3%- 7%. As a reminder, this is organic growth defined as our existing studios prior to the acquisition of Plarium and on a constant currency basis. We also gave guidance that we'd achieve total adjusted EBITDA for the whole group including Plarium of 21%- 24%. As I mentioned in our Q2 results, we had some very strong performance where we had H1 organic growth of 8% and we had H1 EBITDA margins of 23%.
Given that strong performance in H1 and the strong momentum we have in the business, I'm pleased to say that we're updating our guidance today from an organic basis perspective. We're now updating our guidance for 2025 to be 7% to 9%, sitting on top of the top end of the prior range whilst maintaining our EBITDA margin guidance of 20% to 24%. We're also introducing some new guidance for total reported revenue for the whole group including Plarium, and that is in the range of SEK 11.4 billion- SEK 11.7 billion. It's worth noting that this is based on you looking forward to Q4 using a $9.41 exchange rate for the dollar to the SEK as at 30th of September 2025.
Therefore, where we actually land at the end of this year will be subject to FX fluctuations through the rest of the year and also will be subject to some of the performance in Q4, particularly around key seasonal in-game events, with December typically being a very strong month. I know that there's a bunch of you out there with laptops open with Excels and calculators trying to do some math. I'm just going to give you a bit of help on that one. What this fundamentally means is that, as I said, Raid delivered low single-digit growth in Q2 and we expect that momentum to continue through the rest of the year, and for Raid to deliver low single-digit growth on a full-year basis.
That is offset by some of the declines in some of Plarium's other titles, and therefore overall Plarium is expected to be down low single digits on a full-year basis. I repeat what Maria said earlier. Yes, we will look to continue to find ways to optimize those other games within Plarium's portfolio. One of the three core vectors for the acquisition of Plarium was Raid , and we're incredibly pleased with that performance. On that note, we're incredibly pleased about the performance of all of our studios in 2025 so far. What about the medium term? We are also now introducing medium-term guidance across three core elements. If I start off with our top-line growth, as you've heard, we believe we've got the scale, we've got the IP, we've got the tech, the tools, the teams, and the momentum to continue to outperform the market.
Overall, the market is expected to grow around 2%- 2.5% over the near-term horizon, and we believe that we can outperform the market and grow on an organic basis in the range of 3-% 7%. If you take the midpoint of that range, it would be more than double the market growth. It's worth calling out, this is for the total group including Plarium on a constant currency basis. If we then focus on adjusted EBITDA margins, we believe we can drive these back up north of 20% in line with what we've achieved historically, as we really start to reap the benefits of the combined scale of the group and also this district model.
Finally, on cash conversion, we remain a highly cash-generative business, but we actually see incremental growth from where we stand today, and we expect to deliver steady-state unlevered cash conversion north of 60% over the medium term. As some might recall in our Q2 results, we reported LTM unlevered cash conversion closer to the 50% mark. As we discussed in those results, that included number one off items related to withholding, tax, M&A transaction fees, etc. If you were to normalize out for those, it would actually be close to the high 50s already, so close to this number. As I said, we do see opportunities to take it further from there.
Before I now turn to the next section on cash flow, balance sheet, and capital allocation, I'd like to spend a bit of a minute just double clicking on our first two guidance targets on revenue growth and adjusted EBITDA margin growth. First of all, on revenue growth, as we've spoken about a lot, today we've got a diverse range of games, a different scale, and a different part of their growth cycles. Essentially, what we've been calling the gaming growth flywheel. We have got incredibly strong established games which give us stability and predictability in cash flow. That cash flow we can leverage to develop our new games game pipeline, and then that cash flow we can use to invest to really scale those new games into rising stars, which then turn into established games.
Specifically, if we look at our near term growth and our portfolio of games, we believe that our top established franchises, so your Raid, your Forge of Empires, your Tacticus, your word search, your F1 Clash, etc., collectively, we think they don't only provide us that stability and predictability of cash flow, we actually believe together they can drive some incremental growth. The main accelerator of growth above and beyond the market comes from our new games. It's equally important to call out that that is broadly 50/50 between new games which have already recently launched and new games which are in the pipeline, in development, or in concept stage.
I think that's very important to call out because a lot of those recently launched games are already giving us the data which gives us some visibility over that near term growth, in particular the casual games as Yoav ran through earlier. That growth in new games does somewhat offset the decline in the other existing established games outside of our top game franchises. I said we do look at ways to either optimize or harvest those other existing franchises to maximize for cash flow generation. If we double click on our EBITDA margin guidance and driving that to over 24%, I hope you've heard loud and clear today that we think it's incredibly important that we continue to invest behind our existing established games to ensure we drive their longevity. We also invest to scale up new games into rising stars and established games.
That is why we will continue to invest UA, but always doing so in a very disciplined manner with very clear returns hurdles. There are really three core drivers to drive that margin enhancement offsetting that UA investment. The first is the D2C initiatives, the three initiatives that Ollie and I have now both touched upon. The second are scale efficiencies, so operating scale efficiencies from economies of scale. This is the smallest item because this is, we think about it, really just about ongoing optimization from scale. The third item are the Midcore cost synergies that Ollie ran through earlier in excess of the $20 million, and as Ollie said on that, that is a combination of overhead reductions, which is the slightly larger share, and then other centralized saving opportunities.
We will start to implement these cost savings and expect to realize them on a fully run rate annualized basis before the end of 2020. Just to recap, this is our margin excluding any future M&A. Finally, before turning to the next section, as we are moving into this new operating model, we're moving into this new village and district operating structure from January. We've also reassessed our financial disclosure. We think it's incredibly important that how we communicate to the market externally aligns with how we internally monitor, track, and align our business performance. Further, we want to make sure our investors have the toolkit, so essentially the appropriate financial granularity to really be able to properly model out our projections. That's why starting from Q1 2026 we intend to change our reporting disclosure.
Just to take you through the elements on the page, starting off with at the moment we just provide revenue on a total group basis and then for our five franchises, so for example RPG, strategy, etc. Going forward we will provide that both for the group and for our segments, AKA our casual and our district and our Midcore districts. Furthermore, whilst historically we only provided adjusted EBITDA and UA spend on a group basis, we will now provide those also for our segments. Casual and Midcore level UA spend and adjusted EBITDA margins. You heard very clearly through multiple sessions today, there are quite stark differences between Midcore games and casual games not just in their gameplay but also in their monetization. That is why I think it's very important that we disclose select key KPIs also on a segmental basis.
What that really means is giving both DAUs and ARPDAU on a segmental basis but then also on monetization. On third party platforms versus D2C and also in-app purchase versus in-app advertising revenue on a segmental basis. Finally, as we spoke about, we've got a great diverse portfolio so we do not have any concentration risk. As Maria alluded to at the very beginning of the presentations today, our top three games as we reported in our Q2s together account for 50% of our revenue. The performance of those games is material to our overall group performance. Going forward we propose to include absolute revenue and also constant currency growth and reported growth not just for our top three games but actually for our top five games in our portfolio. Hopefully this will be well received by the market going into Q1 2026.
I've spent, if I've got my clock on right, about the last 20 minutes speaking about sustainable profitable growth. That's just really one part of the equation as we think about value creation. Now I want to spend the final section of the day really speaking about how we marry that profitable growth with our use of cash, with our use of balance sheet and with our capital allocation policies to really drive total shareholder return and therefore value creation to start with. I mean we're a highly cash generative business as I've already said. Importantly we've got a high degree of cash flow stability and that cash flow stability is driven by three core factors. One is, as we've spoken about, the longevity and the stability of our top established franchises and the cash generation of those games. The second aspect is this operating toggle that is UA.
I've mentioned this in the new game development panel as well. We can choose to go down one path of investing more UA, driving more revenue growth which will short term compress the EBITDA margins, or we can go down another path of actually tapering off that UA spend and driving the margins. Whichever path we go down, it's done through the lens of actually underlying driving the absolute profit and therefore the absolute cash generated by the game over the medium to long term. The third item is our low development costs. UA, as I said, is the large cost item for us as we take a new game and scale it into a rising star and to an established game, but the actual cost to develop a game is very low.
For anyone who's watching this digitally online and has done our little Q and A questionnaire, I think that was question number six buried in there about our development costs. They are very low across both our casual and our Midcore profiles. As you can see from the right hand side of the page, which takes the bridge from adjusted EBITDA through to unlevered free cash flow conversion over the last three years, our CapEx averaged just 3% of revenue and we expect it to remain broadly consistent with that level in the near term future. That means over the last three years we have delivered consistently unlevered cash conversion in the range of 50%- 60%, with that variance really being driven by one-off items and it's been averaging towards the upper end of that range over the last three year cycle.
You can see those normalized items on the left hand side of the page where we do extract out the M&A transactions, fees, the withholding tax payments, etc. You can see that steady build up in cash generation over time, including post the Plarium transaction and in LTM Q2 2025, generating over $135 million in unlevered cash conversion on a normalized basis. Arnd unfortunately stole my thunder a little bit on this one, but we thought it was a very important message so we put it at the top of the presentation and we put it back at the end. We're collectively very proud of how we've used our cash, used our balance sheet to recycle capital since 2022. Beginning of 2022, we've generated that $3 billion in cumulative free cash flow. We've generated that SEK 8 billion in asset disposal sales, essentially the ESL sale.
We have had SEK 3 billion in debt, which is essentially the SEK 5 billion in debt that we took on for the Plarium transaction, netted off with SEK 2 billion of debt that we paid down post the ESL transaction. All in all, we've generated SEK 14 billion, or $1.5 billion, in total cash through these three eras. As Arnd ran through, we've returned SEK 4 billion of that to our shareholders, SEK 2.7 billion as a capital return post the ESL sale and SEK 1.3 billion as share buyback programs. We've deployed SEK 10 billion of it against value accretive M&A, most recently in the Snowprint and the Raid transactions. Back to this point about marrying profitable growth with our use of balance sheet and capital allocation, we're also very proud of this.
We have not just delivered absolute growth, we have delivered underlying growth in earnings per share and free cash flow per share because we have not diluted our shareholders. On the left-hand side, we've been able to grow our adjusted EPS by a CAGR of 14% over the last 2.5 years, since FY 2022. We've been able to grow our underlying free cash flow per share by a CAGR of 25% over the last 2.5 years. These are our reported underlying free cash flow per share. If I were to use the normalized figures that I was just speaking about on the previous page, that would actually be north of 35% CAGR. Enough about the past and onto the now and then the future. Where do we stand today? We've got a very healthy and clean balance sheet.
We have net financial debt in total of SEK 3.2 billion. This comprises SEK 4.2 billion in external financing, another SEK 0.2 billion lease liabilities, and then we have SEK 1.2 billion in cash and cash equivalents on the balance sheet. We also have SEK 1.4 billion in earnout liabilities, which takes you on a full net debt basis as at Q2, so 30 June 2025, to a total net debt position of SEK 4.6 billion, which is equivalent to 1.63x our LTM EBITDA including Plarium and just shy of $500 million. It's important to call out that a large part of that earnout liability is due payable during the course of H1 2026.
Because of our strong cash generation, as you can see from the chart on the right-hand side, we pay down that non-financial debt and essentially we have a convergence of our net financial debt with our net debt. Thereafter, into 2027, our strong cash generation takes our net debt position down to broadly around or just under the 0.5 turns. It is very important to call out this chart on the right-hand side is not assuming that we do any additional new buybacks in 2026 or 2027 or that we do any new M&A. Clearly, we are not going to stand still and not do any M&A or not do any kind of capital returns. Now, I am going to spend a little bit building out on what we've spoken about on M&A. M&A really is a core part of our journey. It is a core part of our DNA.
It is our vision to continue to build the best home, the best village, and the best districts for game makers. Not only that, but through this district model that we've spoken about, we really do believe that we've got enhanced plug-and-play capabilities by having those tailored value-add centralized services at each of those districts. Therefore, we will have an advanced capability to drive value creation day one. We will also enhance our reputation as the preferred partner of choice for entrepreneurs. Given the nature of gaming M&A, it is not something that we pause and restart and pause and restart. We constantly evaluate M&A. It is part of our ongoing core strategy and as we've spoken about, really what our near-term priority focus is making PlaySimple not a party of one within our casual district.
Our primary focus is on M&A within casual, but we will continue to assess and we are currently continuing to assess other bolt-on opportunities within our Midcore district. As we've spoken about, there could be new potential districts over time, albeit that is a lower near-term priority. Anything we would do, we would want to make sure it is adjacent to our core competencies and nothing far afield. The gaming market remains incredibly fragmented, so there is real scope for consolidation. We will make sure we maintain our incredibly high hurdles and our incredibly disciplined approach to M&A. As we've spoken about, what that really means, what's our key focus?
It's on the IP, it's on the team and the tech and the tools, and it's on the fundamental KPIs, all with the overlay that it's actually an attractive relative return on capital relative to other ways we could deploy that capital. We do see M&A as an opportunity to accelerate our growth above and beyond that organic growth guidance of 3%- 7% that I spoke about earlier and therefore to drive that additional value creation. As you can see from the right-hand side of the page, we do have material firepower building over the course of the next 12- 24 months. This is absent any potential use of equity and also, for example, absent capitalizing leverage on any cost synergies, etc. We really do have the firepower to go out there and continue to explore value-creative M&A. How does M&A fit into our overall capital allocation policy?
Taking a step back again, our aim is to really try to drive value creation from total shareholder return. How can we do that? What is under our control is how we allocate capital within the group to drive earnings per share growth or free cash flow per share growth. Our capital allocation policy has three: grow, build, and return. If I start off on the left-hand part of the slide on grow, we will continue to invest in our existing studios, in their existing games, and in their new games pipeline. We will make sure we continue to refine and optimize how we make those UA investment decisions to really make sure we are maximizing returns from those investments. We will continue to invest in our existing studios and leverage our data, leverage our governance frameworks to refine and maximize those returns over the medium and longer term.
As I've just spoken about, we will continue to drive for value-creative M&A, but we will not just think of M&A in isolation and we will make sure that we think about M&A in the context of does it drive incremental returns relative to our investment in organic opportunities and how does it look like on a comparison of our unlevered free category cash flow per share relative to capital returns? It's always done in a holistic manner. Finally, we will return any excess liquidity to shareholders. Whilst we will prioritize our focus on trying to find organic and inorganic investment opportunities subject to a certain returns thresholds, any excess liquidity we will return to shareholders. As I said, I want to make sure that we do maintain a healthy, healthy balance sheet, but also an efficient and that means a levered balance sheet.
We will make sure that we do maintain net debt, but keeping that net debt at broadly below two times. In the context of this capital allocation framework, our focus on the transformation of our operating model and given the status of our M&A pipeline, we are therefore today also announcing that we've decided to launch a new share buyback program of SEK 300 million which will run through to the next. Did I just say SEK 300 million? Thank you Flora for correcting me. SEK 400 million which will run through to the next by us taking SEK 100 million off there. SEK 400 million which will run through to the next, to the next AGM. As I said, we're very proud of the gaming village that we've created and we want to continue to grow and build that village.
We think that we're better placed now than ever before to drive that both organically and inorganically. As the architect of that village, we will not just look at acquisitions, even though that will be our core priority focus, we will look at the full toolkit that we have available to ourselves to potentially drive value creation over the longer term. As we've spoken about, one of those evaluations is a potential structural options for our Casual District which could include a listing of PlaySimple in India. We are therefore currently conducting a pre-IPO preparedness study and part of that study is to evaluate the potential by which it can accelerate our M&A ambitions in casual gaming and also the potential by which it could create value.
That study is ongoing at the moment and the outcome of that study will help us to determine what options we have available to ourselves in 2026 and will of course revert to the market upon the conclusion of that study. As Maria Redin said in her opening remarks, regardless of the outcome of that study, we are long-term majority owners of PlaySimple and believe in the future of PlaySimple and its casual ambitions. To wrap things up for the day and for my section, the five key takeaways. First is we have gross momentum. We will continue to drive sustainable growth above the market of 3%- 7%. We have this gaming growth flywheel, the established games, the new games, the rising stars which will fuel that growth so we can achieve above market growth.
We will drive our EBITDA margins back north of 24% despite ongoing UA investments to underpin growth. We'll achieve this through both D2C initiatives and the synergy realization in the Midcore district. Third is whilst we are incredibly strong cash generation alternative today, we will drive that incrementally higher and achieve cash generation unlevered cash conversion of north of 60% over the medium term. Fourth is our build, grow, build, return capital allocation framework. We will prioritize investments towards organic and inorganic opportunities, but always through the lens of what it does to our underlying return on capital and a comparison on our free cash flow per share with any excess liquidity returned towards our shareholders.
Finally, we will continue to look for ways to grow our village, but we will also look at the full toolkit that we have available to ourselves to drive value creation and that does include an evaluation of a potential listing of PlaySimple. With that I will pause, thank you very much and I'll take any questions before we wrap things.
Hi, my first question, just to clarify, what's medium term in MTG's view?
I think you'd interpret that to be a 3- 5 year horizon. Certainly, those would hope to assume within a 3 year horizon, but some might take 4- 5 years.
Thank you. On your adjusted EBITDA margin target for the medium term, you said at least 24%. If we're trying to look at scenarios in the medium term, how should we look at the potential ceiling going forward? Should we look at how it's trended in the past, because there's a lot of incoming here, like potential cost savings, AI, et cetera?
Yeah, I think it's a good question. Whilst we deliberately have not put out what a ceiling to that range could be, that's in part driven by also there is still not a full visibility as to actually what the DTC initiatives could look like over time, given a lot of that is outside of our control and dependent on regulatory changes. The efficiencies we can get from AI adoption and AI efficiency. Obviously we have a base case plan which is contained within our own analysis, but there are permutations of outcomes that derives to. I think that one of the things I would say is as we've tried to convey throughout the days, we are focused on growth. Therefore, we are going to continue to invest in that growth. The large part of our P&L, of our cost structure, is UA.
Whilst we continue to optimize that, it's really optimizing to drive incremental revenue rather than shrinking that UA budget. I think that should provide some context as to where we think the margins could get over time. I do not see our UA as a % of revenue materially decreasing in the near future.
Okay, thank you.
Hi Nick.
We have a couple of questions online, I thought we'll take them just as an interlude until we have more questions from the audience.
First of all, what as you.
Expect to increase organic growth, which is something you touched upon just now. Do you expect to continue to increase UA spend, or when would you expect to reduce UA spend to improve margins?
Yeah, this goes back to the point that we were trying to make about our UA investment decisions are not done at the group level where we have a certain UA spend. What we do is very much on a game-by-game basis, trying to optimize for that individual game as to what is the right UA investment decision, balancing that growth versus margin optimization. Therefore, what our future UA spend evolution looks like also depends upon that success rate of that new game pipeline developing into rising stars and established games that we had earlier. If I could choose my way, we'd have a whole bunch of our new games actually becoming rising stars and therefore continuing to fuel that M&A and new game pipeline scaling through year one investments.
That being said, clearly if we actually do find a point in time where a large number of established games, it's the right point in time to optimize those for cash. If we just at that point in time have fewer games, games which are scaling, then we will make the right decision that across those games we will taper the UA investment, which means on a group basis that UA spend will come down. We do it very much on a game-by-game basis. We do think we've got the new game pipeline at least for the few years out to come, that we will continue to drive that UA spend higher.
Thank you. Given that you have disclosed a little bit how we will report our results from next year, is there anything you want to say about the adjusted EBITDA margin of PlaySimple or the Casual District already today?
I think it's premature to give any comments on this, and people can wait. Look forward to Q1 2026.
Very good, thank you. That's all we have online.
Yeah, Jacob here, just one question. I mean the only item that was incrementally dilutive in the bridge was UA as you alluded to. Could you give some more light on what studios you're going to ramp up the UA spend the most? Is it PlaySimple, Plarium, any color?
Yeah, I think we don't ever kind of give that breakdown on an individual studio basis. One thing that I would give some context around is what we spoke about, about this more shots on goal mentality. In our pipeline we do have those kind of lower risk, and not only are they lower capital to develop, but also as we think about the scaling of them, they will also be a lower % of that kind of yield UA spend.
We also do in our pipeline have some bigger shots, and those bigger shots are slightly bigger shots as it relates to both the capital development. If we do really want to see those games scale to where we believe they could be post launch, those will also be where we do see that incremental UA spend growth relative to where we are today. Therefore, you can by association think about where within our overall district model those are most likely to come from.
Thank you so much.
Yeah, I have a follow up on.
The UA topic here.
What's the margin utility for you? You have last 12 months 38% UA percentage of sales. If you would come up to 40%, how much does that translate into revenue growth for you? Yeah, because it's done on an individual game by game basis, it's actually purely dependent upon where we were to invest that additional UA spend. If we were to do that in one of our established games, even if that was additional UA spend between Raid: Shadow Legends versus Forge of Empires, it would be a different answer as to where that revenue would come out versus if we were to drive that UA spend towards some of our rapidly scaling games, for example, Tacticus or Heroes of History.
That's why I go back to this and apologies not to directly answer your question, we do not look on an overall group basis as to what is the return on advertising spend for us as an overall group. It is what is the appropriate return on advertising spend hurdles and thresholds that we should be monitoring for an individual game depending upon the genre that it is operating in and depending on where it is within its growth cycle. Also, depending upon, for example, if it's one of our casual games, we'd also look at a shorter term ROAS. Given the nature of the games, we're more likely to typically look at a one year ROAS versus for some of our Midcore titles we would look at a two to three year ROAS.
Even within that question as we look at UA, we don't think of it as if we spend a dollar more here, how much will we get more as a group in the year? It's if we were to spend a dollar, which game would it be best to spend across balancing. We want to make sure we deliver short term growth together with medium term growth.
All right, thank you very much, Nick.
Great. In which case, I think we're just Maria and on wrap up.
Great. Let's see if I can move to my, I think my first slide of the day actually. Yeah. Oh shoot. Sorry, that was too fast. We should go over to drinks directly. Cool. I'm back to where we started actually on the day, sort of what are we all about? I think it is as I said when I opened the presentation today, it is three years ago since we actually did this Capital Markets Day and presented to you what we aspire to build and what we aspire to do. I think what we set out at that point in time was in all fairness, a pretty bold ambition. We were probably not in the top league of the gaming company in the world, but we had a true belief in what we wanted to do.
It was a bold ambition, but it was an ambition that we genuinely believed in and we had the team behind to do it, that we boldly executed on it. I think again, what you heard and what you heard today has been a lot about yes games, but it's also about team and it's about execution. I think that's what we've been having over this last couple of years. That's what has helped us to actually build the position that we have today. Yes, we're setting out a new bold ambition of what we want to do. We want to yet again double in size. I'm really hoping that you can feel today what we feel on a daily basis. The team we have, the games we have, the drive that we have.
I mean for me we are such a better company today compared to where we were three years ago. I thought we were a great company then as well. We've grown tremendously over the last couple of years and that's why I'm really excited and I'm really excited, excited to have such many people in the team here today presenting to you so you actually can see and feel them as well. That is the world we live in and it's an exciting world and again, we have great aspirations. What I want you to take with you when you leave the day today, it's been probably for you an information packed day. We gave out a lot of news today.
Those are things we worked since we actually even before closing the plan of acquisition, you do those deals with a clear ambition on where you want to go, then you validate it as you get to keep keys to the company. I want you to leave with the MTG words actually because it is about continue to drive that market leadership. We're in a great position. That is something we worked hard to achieve. We continue to work really hard to keep that and continue to drive that. We continuously transforming. That's the only way we can actually continue to win in this race. I mean we work in a competitive environment, we work in a fast-moving environment. There are new technologies coming again, but what makes us relevant is that we have great games and we're going to continue to make great games.
To Nick's point, we're a growing company. We have delivered several quarters in a row, strong growth. We just upgraded the guidance and hopefully you can also feel with what we presented today, what Oli and Joach presented on the new games team panel, you should hopefully feel the excitement that we're going to continue to deliver growth for you. With that I want to say thank you for being in both or you being here in person. For everyone dialing in, let's have a great mingle and let's go for some food. Thank you.
Thank you.