Earnings Call: Q4 2019

Feb 18, 2020

Quarterly report

Hello. I think we are on. Welcome to the Paradox Q4 2019 Report. Hi, Alex. Hi. How are you? Oh, good. Oh, good. I've just come back from the States, which is exactly the same thing as last time we did this. I have been to a conference in Vegas called Dice, very fit fitting for Vegas, I think, and had a lot of very good meetings. What about you? How are you? Good. Very hectic quick. Yes? Yes. An oil exploding a bit today with the reportable. So that's always a peak of the quarter. I think the big difference is that we don't have any headsets. We normally do. But we've moved. We are in a new office in Stockholm, and we also have a new streaming studio. So no headsets, which is very good apart from that we can't always hear what they're saying in the control room. So wish us luck. I think it will be good. Shall we That's it. Yes. Yes. So yes, great quarter. We're very happy. And a revenue record breaking year, almost SEK 1,300,000,000. So that is the highest we've had in revenues. And we it's also the highest profits that we've ever had. Very happy about that, of course. Q4, which is what we're focusing on today, is the 2nd highest revenues we've ever had and actually the highest profits. And I think it's worth pointing out because we always say, and I will say it again, that this industry, you can't really look at what happens from quarter to quarter because it varies very much with what games we release. And we don't really plan after quarterly calendars. We plan after when the games are done and when we feel that the quality is there. And last Q4, I think 4 of our big games had expansions out, whereas this year actually they didn't. So we're very proud that we managed to get to this result. In part, it has to do with the fact that the distribution environment is changing a lot. And we now have agreements with, for example, Epic Games and Microsoft through Game Pass, which is their subscription service, which changes things around a little bit. But anyway, we're very happy. We released 1 new game this quarter, are doing updates to the game every month. And we're getting a lot of feedback from the players, but we're super happy with both the amount of feedback we're getting. There's a little ladybird in the corner of the game that you can click on and give your feedback directly to the developers. The developers are a Finnish studio called Ice Flake based in Tampere in Finland. Anyway, this is an exclusive with EPIC for as long as this it is on in early access. So then next fall, we will launch it everywhere when it's completely done basically. We've had 3 expansions in the quarter. Heavy metal for Batlutec, which is the last expansion that we will do for Batlutec Revelations from Age of Wonders and I should mention, also actually today has a major overhaul being released. And then we also released Cordens Edition for Prison Architect, which is a game that we acquired very late in 2018. That was the first DLC that we've Yes, exactly. We've done some content expansions before, but no DLCs. So I don't know if you've seen it, but it's the little guys running around in a prison. And they're quite cute, but a bit crazy, I would have to say. Anyway, so and the revenues from the quarter come from mainly Battltec, Cities Skylines, Rupert and Veterans 4, Hearts of Iron 4 and Stellaris. And I would like to make a little shout out to Battletown. Yes, it's great. It's really nice to see the game on the top five list. Very well deserved. This is developed by our fabulous team in Sertel in hair brand schemes. To oh yes, you are the one in control there. If we look at what the year has been like in full, it's very much about gearing up for a quite special 2020 for us. We have a lot of stuff coming, and we have been building the company for this. We have increased our staff quite a lot. We're almost well, now we're over 500 people. By the end of the quarter, we were almost 500 people. We have really invested a lot in marketing. That is both in terms of marketing that is driving sales, but it's also very much in the quality of all the content we produce for the marketing, which is I hope you see that many of our trailers. Well, I'm obviously biased, but I think they look very, very good these days. We've also moved in almost all of our locations. Triumph has moved in the Netherlands. HPS has moved in Seattle. And also the Stockholm office has moved, hence no headsets in the streaming studio. In terms of the marketing, we also have a lot of new cooperations in the distribution part of our industry. Of course, we have the Steam Publisher Weekend, which this year was in Q4. The year before, it was in Q3. That's a very, very great event for us. It drives a lot of interest in us and in our games, of course. But then we've also really expanded on our Game Pass cooperation with Microsoft. Game Pass to really to really test subscription model. That's something that we haven't done so much before. We also have a test going on with Rupa Nusales 4 on Steam, where when you buy the base game, you can subscribe to all of the DLCs for as long as you like. We think it's an interesting way to get a handle on all of the EU4. So we're very keen on seeing the results. It will be a couple of months before we see anything real coming out of this. And of course, as I said before, we have also this deal with the Epic Games for Surviving the Aftermath. But so far, it's great for both us and the game. One thing that I'm extra proud of is that our MAU monthly active users has reached 4,000,000. That's great for us. We love to see that our fans love our games and this is, of course, a way for us to see that. We also have more paradox accounts than ever, EUR 12,000,000 I think we're up to now. Yes. And the MAU has not only reached EUR 4,000,000, we have established ourselves about EUR 4,000,000 with safety, I would say. Yes, that's a very good point. One of my highlights of the year, I think, and our highlights of the year was PDXcon that we had in the quarter. We were in Berlin. We had 2,000 people, a bit more, 40 nationalities, lots of events where just really engaging and hanging out our fans and our staff and our partners, but also showcasing new games and showing off some things that are coming in the future. We combined that with the staff conference as well. So that was also a great event. This period now, if we move over to Q1, we have rereleased Stellaris Galaxy Command in soft launch. So Stellaris Galaxy Command is our mobile game for Stellaris. And as you normally when it comes to mobile, you soft launch first in a few markets to see how it works and as the game will take off. We've done many soft launches over the years, some more successful than others. And this one, we have pretty high hopes on. We think it looks really good. We get good feedback from people who are playing it. Currently, it's only available in Sweden, Canada and Australia. So if you're in those markets, you can try it. But otherwise, we'll have to wait. We're not sure exactly when we will hard launch yet, but let's see. We will let you know. And then, of course, we expect 2020, especially the fall of 2020, to be very exciting for us. We have CK3. We have or Crusader Kings III, I should say, Vampire: The Masquerade, Blood Lines 2. We have Empire of Sin and the full release of Surviving the Aftermath coming. And we have also decided to push the release of Empire of Z into the fall 2020. And this is because we want to make sure that the game is as good as it can possibly be. Yes, I think that's it. Do you want to go over and talk a bit more about the numbers? Yes. It's going to be a busy fall. Yes, very busy fall. Okay. So let's dig into the numbers. So the revenues for Q4 ended up at SEK381 1,000,000 and that is a 13% increase compared to Q4 in 2018, where we had SEK 337,000,000. And as you said, Eva, that is very impressive because in Q4 2018, we had CITIS, we had Stelaris, we had the CK2, we had Rupen, Wichaw and Lise, all our biggest games had expansions. And of course, when they have expansions, we can expect a lot of sales from them. We also had let's say, we had the Batatech expansion, I'm forgetting something. I think it's Surviving Mars expansion as well. Yes, I think so. This year, we had some nice expansions, but on games that are fairly new. On Battletech, on Planetfall and on Prison Architect, that's new for us. So we can't expect we don't have the same user basis and we can't expect them to generate the same revenues. But anyway, we did. And one thing that you brought up was the Publisher Weekend with Steam that generates a lot. In 2018, we had it in Q3, now we had it in Q4. So that pushes up the revenues quite a lot. And even more so perhaps the new cooperations with the distributors or not the new cooperations perhaps, but the extended cooperations with Microsoft we have worked from 2018, I think we started on the Xbox Game Pass. And now we have expanded a lot and continue to do so. So that is really, really great. Operating profit came in at SEK163 1,000,000 compared to SEK147 1,000,000 last quarter 2018. So that is an 11% increase. Q4 in 2019 was helped a bit by us releasing a reserve from our Herbrand scheme acquisition. When we acquired the company back in June 2018, we paid an upfront fixed fee and then agreed on a possible earn out depending on how the studio performs or actually if the studio will generate profit above a certain threshold. And when we acquired the studio, I mean, we made an estimation of what games were going to be launched and so on during this 5 year period, but it's very, very difficult. But we make your best estimation and we put reserve on as debt. Now when we have worked with the studio, the plan have cleared. We have a more solid pipeline and we know when the games are going to release. So therefore, we have made a new estimation as of today. And as that shows, we don't think that we're going to end up paying any more earnout. So therefore, we have taken down this debt on the balance sheet. But this, who knows, it might change over time. We still have 3 years to go. So we'll see. And as you might have heard from Mitch and the team, they are working on no less than 2 new projects, very exciting. But nothing to say about those yet. Yes. And as the situation often is not only with us, but with the whole of our industry, I think, is that we tend to overestimate how quick we can make the projects. So at the end, they tend to come a bit later. So SEK 44,000,000 improvement in Q4 from this release of reserves. But it can be said that since the acquisition in June 2018, we have depreciated more than SEK 60,000,000 of the acquisition price. So over time, we have taken more cost over the income statement than this positive revenue income outlook. So it's good to know. Then we have profit before tax comes in at SEK157 1,000,000 compared to SEK147 1,000,000 last year. So that's an awesome increase. Then we have normally a 22% tax rate or we have a 22% tax rate. Normally. But some transactions are not taxable. So the release of the debt that I just mentioned is not taxed. So therefore, when you do the calculation in total, we are paying less than 22% tax in Q4. So profit after tax comes in at SEK 131,000,000 almost compared to SEK114,000,000 last year. So quite a solid increase. Let's move on. Now this is a chart that shows how our revenues and our three cost types have evolved from quarter to quarter. So the green, very kind of shaky one or volatile one is revenues and the ones of you that have been following us for some time knows that our revenues fluctuate with the releases of our games and expansions and that we could see in Q4 and Q3 and Q2 and so on. The costs are not that volatile in the same way. They tend to go up a bit with when we release games. So you can see that there are movements, especially on the yellow line, which is the direct costs. But in general, they tend to go up when we grow our business. So the yellow line, the direct cost, that is all the cost for our development. So the 6 internal development studios, all the cost we have for them, the external studios we have making games for us, royalties we pay to external studios and also depreciation of the acquired brands and licenses. And so and what we do when we develop the games, we capitalize during the development process and then when we release the game, we start depreciating the game and we do that linearly over 18 months. So that means that the yellow line or the direct cost that increases when we release a game because then we start to depreciate on the new game. But then it keeps the same for 18 months. So it ends as volatile as the green one, the revenues. Marketing and administrative costs are the other ones. And there you can see marketing costs have gone up, I would say, quite a lot compared to Q4 last year. We actually have a question on here. I know you had PDXcon during Q4, but selling expenses still seem to rise quite quickly. Is marketing for new releases being done for a longer time period now before Bloodlines, for example? Yes. Yes. And also the quality, as I mentioned before. Exactly. But yes, so PDXcon is one thing. We took the full cost for that in October, so in Q4. And that doesn't well, it generates some revenues, of course, because it brings attention to the games, but it's a more long term gain we have in it. But what you can see in 2019 compared to 2018 is a big difference in marketing. And that is that we have started to spend quite substantial marketing on games yet to be released. So in 2019, our biggest spending on one game was on Vampire the Masquerade. And that we haven't seen any revenues yet. It's going to come in 2020. And we also spent on Crusader Kings III, Empire of Sin and so on. In 2018, we didn't have the same ratio. There we almost spent everything on games released in 2018. So that is why the sales expenses goes up. So they were SEK 34,000,000 in Q4 2018 and SEK 64,000,000 in Q4 2019. And so Piedexcom was a special thing, but I think we can continue to see kind of high marketing spendings going forward. I like to call it investments. Yes. Because it's very much as we invest in game development, we also invest in marketing and communicating about our games. I mean definitely, definitely. I mean we spend the money today and we are going to get the fruit of it tomorrow. So it's definitely an investment, but we can't put it on the balance sheet. So but anyway. So administrative expenses, that is everything except selling expenses and the direct costs. So the big part here is actually tech costs. So it's everything for the back end. So multiplay functionality, launcher, CRM platform, the store platform and everything that is being developed. And that's maybe part of the increase. Yes, yes. So And that's maybe part of the increase. Yes. Yes. So there is a quite big increase, especially from Q3 to Q4. Q3, you should remember that, that is that includes 2 summer months. So that means actually a bit normally a bit less activities on the marketing side, but also less personnel costs, because most of us go on vacation and then we pay salary, but we take the cost for that salary spread out throughout the year instead. But as you mentioned, Eva, it went up in Q4 because we moved, especially so we moved HBS, we moved, hairbrained schemes moved earlier this year, but in Q4, the whole publishing department here in Stockholm move, PDS, which is our biggest development studio and also Triumph in Hollermove in Q4. So it's not just the moving that happens over a month that costs, but there are a lot of other costs occurring together with the move. And the biggest one is that we have been sitting with double rents for Q4. So we couldn't get out of the previous rent contract on the exact same day as we moved in here and we couldn't sublease it for just that period. So that made it a bit extra high in Q4. Also the big nice, very nice personnel staff conference we had in Berlin. Yes, that's something that we really want to and plan on continuing to do because it is a huge benefit to us to be able to bring everyone together, the whole company, especially now where we're so spread out geographically. Yeah. So when you have very volatile revenues, but more steadily growing cost or more stable costs, that means that the profits are even more volatile than revenue. And that we can see on the next slide. This just shows revenue and profit from each quarter. And the revenues are the same as on the previous screen and you can see they are volatile. But if you look percentage wise, you can see that the yellow line representing the operating profit that fluctuates even more and that is a result of having fairly fixed cost but very variable revenues. And what else does it show? Yes, you can't evaluate Paradox from just one quarter because it will look very different depending on which quarter you choose. Let's move on to the next one to see a bit more of a trend. In this chart, we have added 12 months together, so it's a rolling 12 month and then we can see a very clear trend going a positive direction, both revenue trending upwards and so does the profits. So that is, of course, very, very good. And we have rolling 12 months. We have record revenues and also record profits. So very, very good. Let's go into the next chart that shows our cash flow. So very high cash flow from our operating activities. It's a bit special in Q3 and Q4. The ones of you that listened in to our Q3 presentation might remember this. So in September, we sold a project that was under development. So we sold it for SEK 80,000,000. And so that meant but we got the cash in Q4. So therefore, Q4 is very high and Q3 is not that high. But even if you remove those SEK80 1,000,000, we have a super strong cash flow in Q4 of SEK 185,000,000 from our operating activities. And if we look at the cash flow from our investing activities, also increasing. So it was the biggest quarter in terms of investments. We invested SEK121 1,000,000 in game development and another 15,000,000 in the new offices. So the biggest investment into new games ever. We have bigger previous quarters like Q4 last year, but that was due to the acquisition of the Prius and Architect. So let's see if we have something more. Yes, I think this is the last chart before we go into the questions. So this shows our total equity and total non current assets. And I mean the total equity that just goes up as we have positive profitable quarters. The total non current assets previously that has mainly been 2 things. It has been capitalized developments. So it's all the investments that we have made in Tower Games and it's the acquired IPs. So when we have acquired Nature Wonders, Prison Architect, what else, World of Darkness and so on, we put it on the balance sheet. But in Q4, we have one other big item and that is our rent agreements. So due to new accounting rules that we apply actually from the 1st January 2019, you put the full rental contract onto the balance sheet both as an asset, a right to use asset and as a debt. So if our contract is 7 years? 7 years and 6 floors, that is quite a big contractual value. So all of that goes up onto the balance sheet as an asset and as a debt. And will it continue to be like that from now on then? Well, it will go up every time we add we move into new offices. So Q4 was exceptional. But now we're not going to move in Stockholm for a while and Seattle has also For a long time. Seattle has new offices, Delta has new offices. So this will come down because instead of reporting rent cost, we are reporting depreciation on this asset. Okay. And it's purely from a that's the legal requirement from how It's in a new accounting standard. So that is the big difference. Yes, I think that is what I had planned to go through. Okay, great. But now we have received a lot of questions. Shall I read the questions? And if you have more if you have any other questions, you can always write them in the chat and we will try to answer all of them as quickly as we can. The first one, how do you feel the stock price of PDX has fared over the last year? I mean, we don't comment on the share price. We focus on growing the revenues and keeping sound margins. And we think that over time, the share price will kind of be correct and evaluates us correctly. But how it fluctuates on one report or over 1 year, I mean, we are not even experts to Yes. Yes. All right. Thank you. When developing newly acquired studios such as Herbrand Schemes, How are new game launches handled and marketed? HBS has suggested they're working on new projects. How will those be handled compared to Battlestech where Paradox stepped in after the Kickstarter? Well, as a general rule, whether you're a 3rd party studio or a 1st party studio, the process is quite similar. It's I always say and you always say that this is there's a bit of magic involved in creating a game. So very often, the idea, the base idea of the game comes from the studio themselves. Sometimes it can come from somewhere else and be a suggestion to a studio, but the studio always like fleshes it out and comes up with the actual idea. And then we have a fairly standardized process, which has to do with a committee looking at the idea, deciding if it's something that fits who we are as a company, but also if we think that there's something that there's a valid business case behind it. And then you just develop over time, and there are various key gates over time. So that goes for HBS just as any other of our studios. And in this case, I think it's been a bit of a cooperation between publishing and the studio. So yes, but that's how it works for anyone. And then here we go, an accountant question. I will give this to you. How do you account for the revenue received the inclusion of Paradox Games on Xbox Game Pass? Is it a lump sum, a monthly fee or is it paid per user? I mean, it's a very relevant question, because it is something that is increasing. And so on the balance sheet, because this is something that is increasing. And so on the balance sheet, we account for it when we send the invoice and when we get the money. But in the income statement, then we account for or we recognize the revenue when we actually kind of deliver or perform. And that is so take Game Pass for an example. There we spread out the revenues over the different games that are included. And within each game, we distribute the revenues over the month that the game is up on the service. And it's like the similar thinking for other situations where we get fixed fees. But I think it's I read another question, why are your let's say, accounts receivable so high and why are your prepaid revenues so high and they are. And that also has to do with this because for example, in December, we sent out a few big invoices that we didn't receive payment for until now. Okay. So that meant and that was for these corporations. Okay. So therefore, we had quite a big accounts receivable, but we also had quite a big prepaid revenue because we are not recognizing the revenue until later of the year. Got it. All right. Next question. Paradoxes Day, we cut about 40% of our projects before they ever see announcement. Does this 40% vary much between PDS and other product studios? I would say it doesn't really vary, very much between ours internal studios. It's a bit higher for external studios. And that's, I would say, 2 reasons, partly because sometimes they are a little bit more risky in terms of what we think they will become, but also because it is a little bit harder working with studios that we haven't worked with before at times. So that would be that. But it doesn't vary too much, but that's yes. And I think we also tend to make with the studios we have, we tend to make games that we have done before. So that also takes down the risk a bit. Yes, yes. Next question is a little bit of a misunderstanding. There was a mention in the last interim report of a 500 person facility build being constructed in Seattle. Might this be the combined number for separate builds for HPS and Hardsuit Labs? No. The 500 person office is here in Stockholm. So HBS has also moved recently, as you said. But I think the office can hold around 100 people or so. So that's the situation there. And Hardsuit Labs, as we only own 33 percent of the studio, they run their own facility management, etcetera, there. And so both the Stockholm studio and the Siete studio has quite some room to grow. Yes, yes, which is of course great for us. Do you have any plans to move the Paradox stock from First North to the Main List in Stockholm? What do you say, Alex? Any plans? No, we don't have any plans. I mean the topic comes up sometimes, but we don't have any plans in doing that. And then one more. Are there any stock analysts who follow Paradox? I haven't been able to find one. Are you ableallowed to recommend anyone? Yes, I think I'm allowed to. Yes, there are 6 analysts that follows us and they are all very talented, I think. So we have 4 Swedish ones. We have Carnegie. We have ABG. We have Danske Bank and SEB. And then we have 2 international ones in Berenberg and Jefferies. So there are 6 to choose from. And where can one find these analysts' reports? It can be a bit tricky. I mean these reports are the result of very big work. So they tend to want to receive something for the effort. So it's very difficult to find them on the Internet or somewhere else. So you should contact any of these analysts and see if you can get them. But sometimes you can read like when they come out with the new reports, quite often you can read about it in financial media? Yes. It's a very short summary. Especially in Sweden, I would say. In international media, less so. But if you're Swedish, you can find it in Yes. All right. As someone who likes dividends, Smiley, is there going to be a long term dividend policy for the company? Or will you continue to expand the company's portfolio rather than pay dividends in the near future? I mean, I would say we have a long term dividend policy. And so I can share this, yes. So yesterday, the Board decided that they're going to propose to the Annual Shareholders Meeting that we even this year are going to pay a dividend of SEK 1 per share. So that's SEK105,600,000 as dividends to the shareholders. And it's up to the Annual Shareholders Meeting to accept it or not. And this is the same as we have done in the last 3 years, I think it has been the same. The Board's and the management view is as long as we are in a growth phase, we shall spend the major part of the profits we make reinvesting them into new games and not increasing the dividends. But at the end of the day, it's a shareholders' decision. But knowing the largest shareholders, I think they support this idea because they so far they have seen very good returns on leaving the money in paradox rather than getting more dividends. So I think they I hope they are going to continue to give us that confidence. Agree. All right. Let's see. How has the early access version of Surviving the Aftermath performed on the Epic Store in terms of sales and functionality on the platform versus your expectations? Very well is the short answer. So I said it before, but the way we launched it, it was a somewhat barebone version of it, which is the whole point of early access, and then we do monthly updates. We have now increased the marketing a little bit as well, which means that it's ticking along very nicely, and we're seeing increased monthly active users and sales, etcetera. So and it's a really, really great way for us to get feedback from players. And the studio in Tampere, they take every single feedback and they well, they decide not all of it is incorporated, of course, because it depends if it fits with the game. But they do take all of it to analyze and have a look at. We have also, I think, been on the five list for the Epic Games Store a few times and the top 20 more or less constantly, which feels like a good testament for an early access game here. All right. Here's a question about grand strategy games. How do you describe the next generation of grand strategy games? Will it be more focused on multiplayer, for example? Does Paradox have a vision for the grand strategy genre for the upcoming few years? Well, yes, we do. This is, of course, very much our core. One thing that we have been working on and we'll onboarding into our games a little bit easier to grasp and understand for new players. We really I mean, none of us would ever want to compromise the depth and the endlessness of the games or even the difficulty. But we do want to make it easier for someone who hasn't played the game before to understand what it is you're supposed to do. And I think it's one thing when the game is new and another thing when there is multiple years of DLCs content in there as well. That also makes it a bit more difficult to explain and give a vision to. Yes. We've just got a 5 minute warning from Jesse. So I will move on to the next question. With Paradox Growth as a company, what new markets are being considered as strategic? How will that impact the localization of upcoming games? Okay. So we have lots of markets, Western Europe and the U. S. Or North America has historically been our main strongholds, but a lot of other areas are growing. A couple of countries in South America. Turkey is growing quite a bit. Eastern the Eastern sphere, including China. So all of those, we are working with. And that also means that localization becomes more important, both in terms of how we communicate in markets, but also in when we build the games. China specifically is very interesting for us because it is growing more than any other country really. But it's so we're it would be quite cool to make a game that's more targeted towards the Chinese market. We're not there yet, but I think it would be interesting for sure. What's your vision for developing the World of Darkness brand beyond the already announced projects? Well, the World of Darkness, we're building this as a global brand across all sorts of media. So we're doing a lot of tabletop things. We're doing lots of games, as you know, and we're also looking at other possibilities. We also have a a couple of potential things coming on sub IPs that are included in this world, but that you haven't seen so much of yet. So I'm hoping we can talk about more exciting things there soon to come. And here we have some more questions. Could you please give more light on the financial expenses? Minus SEK7 298,000 SEK. What's that? Yes, we haven't had that much before. So we have SEK 7,300,000 as a financial expense and that is down to 2 things. 1 is the new accounting standard for rental agreements. So instead of accounting it as rental cost, we account it as part depreciation, but part is an interest. A bit funny, but that's how it is. And the other is also a bit particular and one off and that is when we put a reserve on the balance sheet for an upcoming debt, which we had for the hair brand scheme zone out. You need to so we estimated that we were going to pay something back in 2023 and then we discount it to see what the present value is today. And that is lower because you apply a discounting interest. And every year you need to reevaluate that and the debt goes up because there is 1 year less to discount. So therefore, it's a bit fictive, but it generates a financial expense. So that's why we saw that of SEK 7,300,000 in this quarter. Okay. That was such a long answer when we only have five minutes. Will the DLC subscription model be something that's planned to spread across other games? Yes, probably, if the EU4 test turns out to be good, but we'll see. I think in general, subscription seems to be growing. So we have to figure out ways for us that works to work with it. We don't plan to abandon our DLC model either because we know a lot of people really like it. But it's a good version for people who prefer another way basically. Can you remind us of our capital allocation priorities as you think about the next 12 months from most to least attractive uses of capital? Invest in games, I would say. Yes. That's number 1. Number 1, 2 and 3 is investing games. And then of course, invest in our staff and make sure that people who work here are happy. Yes. But I often get the question, how do you prioritize between making more DLCs and investing in completely new games? And that is a very important balance that we always evaluate because making DLCs tend to be perhaps more profitable short recurring playing and revenues on for many, many years. Have recurring playing and revenues on for many, many years. Shall we do one final question? Sure. Yes, I think this one is relevant. So you talked about the write down of the earnout. Does that mean that we don't and at the same time, the expansion from Batotech was very successful, the last one. Does this mean that there is something that we're not happy with around HPS or No, no, no, it doesn't mean that. So this is the initial estimation we did when we acquired the studio back in June 2018 was based on an idea of which games they were going to make over the next 5 years. And it's almost impossible to know that far It's impossible. And now we know what games we're going to do. We are very excited about those games, and we think they are going to be And I think it's fair to say that the guys in Seattle and girls in Seattle are also very excited about this. Yes. But I think as we have said before, games tend to take a bit longer to develop and release any plan from the beginning. That's not only for us, it's for the audience. Yes. All right. Is that it? Yes, I think so for this time. Thank you very much, guys. Thank you. Thanks for tuning in. We will be back. Yes, May 12, the new stream. May 12, that will Q1 2020 that we will. Yes, very exciting. Until then. Thank you. Bye. See you. Bye.