Earnings Call: Q1 2021

May 11, 2021

Quarterly report

Hi, everyone. Welcome to the Q1 2021 report. My name is Eva Jungrud, and I'm CEO. Hello, Alex. Hello. I'm Alex Andreka, and I'm the CFO. How are you? I'm good. Ed. How are you? I'm also very good. I said just before we started that I will start by pushing your podcast that you did last week. Ed. Yes. I finally after 3 years of being employed here, I got to attend the Paradox podcast. Was it fun? It was Anton. Hans and Daniel are very good. Yes. If you are into what a CFO or if you're interested in what a CFO Anders. I think it's a good episode to listen to. Yes. And it was a bit of a deep dive how it is to be on a Listed Stock Exchange as a company. Which of course is why we're here today. So should we jump into it? So Ed. Q1, we had revenue during the quarter decreased by 9% compared to the Q1 last year, and it increased by 21% if you look at on a year based on the 12 month basis. Ed. And then profit before tax decreased by 44%. And for the last 12 months, it decreased by 2%. So Ed. That, of course, sounds quite depressing. We're actually from a financial point of view, we're quite happy with the quarter. Is, as you know, if you've tuned in before, this varies every quarter and it depends completely on what we release from time Douna Arthur. This quarter, we have had some smaller releases than we did the year before. So it's natural that it fluctuates. We've also actually seen a quite a different exchange rate with the dollar. So the dollar has weakened, which affects us quite a bit. Ed. When it comes to what we've released, we would have ideally wanted to release a bit more. It varies a lot and it's not always planned. We also Ed. Ideally, release when quality is reached, which means that this happens sometimes. But we would have liked to release more this quarter. I think it's fair to point out. Ed. Okay. And then if we move over to I wrote a little bit about in the report this so we say tightening or not shift so much as a slight adjustment to increase focus on our core games. Es. And the reason for this is that we have seen year by year by year that our core games, they grow so much and they keep on growing. Anne. We can continue to grow the core. And the core for us is very much cities and grand strategy games. It's really in this strategy and management segment. So we also have a lot of games that are getting closer to being Ed in the core like Princeton Architects or Planetfall or Surviving Mars. So our intention is to grow the Dror. And of course, then we also want to keep on investing in new types of games. This is very important. Many of the shifts that we've taken previously, when grown a big amount in a jump has been to actually look outside of our core. So it's super important to not not doing that, but at the same time make sure that the core and our base games have the resources and the people they need basically. Ed. So that's really what this is about, a good balance. And if we go into a slightly more detail around Ed. The balancing part, we've said before that we are trying to increase the content frequency in our core games. But of course, it's very, Esi in our core games. But of course, it's very, very important to balance that with quality. And I think it's also worth pointing out that Ed. We have had our last release was not received very well by our fans, which is a part of this that we can't push things out too fast. We have to make sure that the quality is there. And we are a growing company. We are growing our fan base Es is growing a lot. So it's also very true that the expectations from the fans has increased over time. And I think it's fair that it does increase over Edijn. But it is a difficult balance. I think it will continue to be so, and we will continue to really invest time and effort into making sure that we find this balance going forward. One way of doing that is, of course, increasing capacity in our studios. Ed. So we have shifted focus, especially, I would say, around the grand strategy games here, where we have Esterne. Both our Malmo studio and our Umea studio, so that's 2 cities, 1 in the south and 1 in the north in Sweden, for those of you who are not familiar with Swedish Geography, where both of these studios are now working together with all the PDS studios to get Ed. More content out on Grand Strategy Games. And we have also established Tinto, which is our studio in outside of Barcelona Emma in Spain. And it's clear that we're already seeing some great contributions here. And it's also clear that it takes time to build this and to Gogo from starting to build a game to actually pushing something out. So that means that we have grown we will see later in Alex's slides that we have grown our staff quite substantially and most of that growth is in the studio Edin and people who basically get the games out to you. And then last but not least, we are trying to focus a little bit more, which means that we have canceled 2 projects. This in itself is nothing unusual. We do it all the time, as you know. Ed. This time, it was 2 projects that were being developed by 2 external studios. And that just means that we can refocus Ann Putt, the people who are working on this to other projects. So that's where we are. If we look at other things that have happened in the quarter, I would like to give a little shout out to both Surviving Mars and Improator. Surviving Mars, both actually of the games reached their highest numbers of players in Q1 Anne, Surviving Morse actually was over 5,000,000 players, which is very cool. That's the first time. Ed. New content is being built by a new partner to Surviving Mars. So we're very excited about that. We'll see things come out in the year. Imperator is in a little bit of Aetas, but we're hoping to continue to develop for imporator as well because we think it's a great game and we think it has a lot of long term potential Ed to grow and be a part of our core. We released 5 things in the quarter, 5 DLCs, if you will. Going Green for Prison Architect also really, really good and made Prison Architect reach new heights for us, which we think it's exciting, of course. Megacorp and lithoids for Stellaris, the console. We've talked about Stellaris sorry, console many times, Es, but it is clear to us that there is a strong player base who want to play these very complex games on console. So rest assured that we are continuously looking at what more we can do there. We did Heirs of Alexander for Emperor to Rome, which was also very successful and Northern Lords for Crusader Kings III. And I think one thing to point out around Crusader Kings III is that we're seeing a little bit of a shift in business model. Ed. We always do the premium model where we have a base game and then we have DLCs. We have increasingly started selling season passes. And actually for CK3, when we looked at the sales initially, almost half of the sales were people buying season passes. So we are seeing a very big increase there, which we of course like. We're doing other tests as well, you know, around subscriptions and both with Game Pass and other distributors, but also on Steam, we're doing a couple of things with the Europa and Vazalis and also Mercedes Kings 2, where you can subscribe to all of the DLCs. So that's something that we continuously work with. And then something else that I think is quite Nicole that happened in the quarter is that China became the 2nd largest market geographical market in terms of sales and partly because of the steam lunar sale that we had in the quarter, but it's also very much a testament that Asia is growing Anne. We'll of course, we're hoping continue to grow in the future. After the quarter, Ed. We still have corona, unfortunately. I had my first vaccine shot yesterday, still feeling fine. But we are seeing Oren, more of our staff getting access to the vaccine. In our U. S. Studios, most of the Ed. People have already managed to be vaccinated. In Europe, it's a little bit slower. If I generalize, our employees are quite Yang, which means that we come later in the Q. But of Eswe. We are very eager to go back to the offices. We will look at slightly more flexible working setup, but it's Ed. It's super clear to me and to us that we are best when we are together. So that's definitely the plan for the fall here coming up. I've mentioned this before, but we have been very lucky from a sales point of view in this that sales for games companies and other home entertainment companies has, of course, been quite strong during COVID, but we are seeing some efficiency delays in when we come out with new games. So we're eager to come back to be able to go back to working closely Edgar. We released 2 so far, we've released 2 DLCs, Nemeziz, Fustelaris and Leviathan for EU4. As I said before, they've met with some criticism. So that's something we are working hard on, making sure that Ed. We move in the right direction there. It's there might be it might always be different criticism to different things. So it's important for us to look at the whole Ed, the reasoning behind what is the problem where, so to speak. And then we have our Annual General Meeting next week on 18th May. That will be a fairly short affair. But after that, we will have an AMA, which means Ask me anything on Twitch, which will be with me, with you, Alex and also with Fredrik Wester, who is our Founder and Chairman of the Board. Ed. So for any one of you who has questions, there will be opportunities to ask pretty much whatever you want. And we will focus on 2020, but I'm sure we can Ensqueezing. Questions about a lot of different things there. And then I think I only have one more Diedre. Yes. One of my favorite events in the year is PDXcon. This year, we were hoping to be able to do a normal PDXcon and meet up with everyone. We realized that's it's not going to be possible. So we are doing PDXcon remix, which would be a digital event, Friday, 20 Auerst until Sunday, 23 May. So it's going to be 3 days of streams. There will be lots of different things with an announcement show, an award show, late night show. I'm only participating in 2 out of 3, I realize now, Ed and a lot of other things and lots of content created by our mods teams, by our great James, team, our staff, etcetera, etcetera. So I'm super excited and I hope you tune in. You can check out the agenda on pdxcon. Paradoxplaza.com. Yes, now I think more details about the numbers, right, Alex? Yes. Let's do that. So revenues for the quarter, SEK365 1,000,000 that is compared to SEK400 1,000,000 Q1 in 2020, so that is a 9% decrease from quarter to quarter. And Ed. For you who have followed us, you know that there isn't much seasonality in our business. So it doesn't make much sense to compare The quarters, but each presentation we do it anyway. So let's do it this time again. So two main things I think has impacted the revenue Erik. If you compare the quarters, one is the FX impact. So the Swedish krona has increased against almost all big The currencies, the dollar is down 13% from Q1 2020 to Q1 2021 And that impacts us a lot. We have 97% of our revenues coming in foreign currencies. And we have a little Ed. Just a little more than 50% of the cost in foreign currencies. So that is some kind of hedging effect. But on the top line, this impacts us Ed. Quite a lot. The other thing that Eva mentioned is the content that we released during the quarter. So It was less in total this Q1 compared to Q1 last year, but not necessarily to number of releases. And that's important to point out. Ed. It's not only the number of releases we make, but it's the size of the releases. I mean, what are the price points? And Equally important or even more important, I would say, is to what platform and to what games are the releases done. So Q1 last year, we had PC releases for Cities, Stellaris and Hartevarin, those are 3 of our main 5 games. Of course, that drives a lot of revenues. This quarter, we didn't have one kind of full price expansion for a PC game at all. So that impacted quite a lot. Ed. And the revenues, if you look at the top 5 grossing games, it's the usual suspects. It's Cities and the Foreground Strategy Games. And they are if you go back, I think we have showed this in each quarterly report since we got listed some 5 years ago. And They are there, I would guess, 3 out of 4 quarters, with the exception of when we release a new game, then a new game is up there. But And that's partly why we're even more. I mean, we've, of course, always wanted to develop on these games, but even more structured focus on these games, of Eros. Yes, exactly. So operating profit came in at CHF 93,000,000 compared to CHF 160 €6,000,000 Q1 last year, so that's a 44% drop. And that has to do I mean, The profit decrease is more than the revenue percent twice. It has to do with us having quite a large part of our cost being fixed. They don't follow The revenues. And that we're investing into the future, right? Exactly. I mean, we are in a growth phase, which we have been for several years. So that means Asit. We are building an organization. We are developing games a lot for the future, which we don't see the revenues of quite yet. Ed. Profit after financial items, SEK92 1,000,000 compared to SEK165 1,000,000 Q1 last year. So that is a similar change. Profit after tax, SEK77 1,000,000 compared to SEK128 1,000,000. Operating margin, 25% this quarter compared to 41% last year's Q1 and profit margins 21% versus 32%. Equity versus asset ratio, 64% versus 62%. I think I mean, with the past couple of quarters, we've discussed that the reason this has dropped is because of a shift in how we put the rents in our offices here, Eric, and now it's balanced out. The equity through asset ratio, yes, it dropped a year ago because all our rental agreement is accounted for as an asset and as a debt. So that kind of brought down the equity through asset ratio. But with every quarter year that goes by, That debt and that asset decreases. So that's why it's moving from 60 to 64 basically. Exactly. That's exactly right. Ed. Number of colleagues, 503 when we ended the Q1 last year, Eric. 696,000,000 end of March this year, almost touching 700,000,000. That's quite a lot. And I think that's also one of the reasons I'm so eager to get back to Eofei. It's a much harder journey to onboard in a company when you don't meet any of your colleagues. Ed. And I think from our from a company point of view, it's very important with the culture in the group. And that's also Ed, quite a lot more difficult to do when you never meet up. So yes, again, another reason for being eager to getting back. I agree. So let's the revenues we have talked about, so that's a green top line here. Erik. Let's discuss a bit more about the costs. So the chart shows our 3 main costs, cost of goods sold, which is our biggest cost item represented by the yellow And then we have our marketing or selling expenses on the blue line and our all other costs, which we refer to as administrative expenses on the red line. So All in all, these costs amounted to EUR 285,000,000 in Q1 this year. That can be compared to €255,000,000 in Q1 last year. So that is a 12% increase. So when Revenues dropped with 9% and cost goes up 12%. That is where the profit goes down more. And Ed. And this cost this will grow with us kind of growing the organization, Developing more games and preparing the publishing organization to release more games. So I think as long as we are continue to be in a growth stage, we're going to see Pretty much all these lines slowly go upwards. Good. So let's perhaps talk a bit more about the cost of goods sold since that represents the largest cost item. For you who want to make a deep dive, we have I recommend that you read the report, and I think it's around Page 7 or 8, where we describe our cost. There we have started to specify what is within this cost of goods sold a bit more. But mainly, this contains all the costs for our internal studios. We have 9 internal studios. So all costs And up here, one way or the other. Some of the cost, we take this cost immediately when they appear. Some of the cost, we capitalize and amortize when we release a game. We also have all the costs for our external studios or games developed all the costs for Games developed by external studios. That ends up here as well. And that ends up here by that we capitalize everything and amortize Games projects that are under development were under development. Those we have capitalized. So that means that when we cancel, We write the capitalized development off, so that impacted the Cost of goods sold item with SEK34 1,000,000. Then we also have here the cost the amortization for our Eric. Asset. So when we acquire businesses or assets like last was Plerion, before that Prison Architect, Terrain Schemes, Triumph For Outer Darkness brand catalog. We capitalize that or it comes in as an asset and then we amortize Most of it over 5 years. So that, of course, impacts our even though we necessarily don't think perhaps that These assets becomes less valuable, but still this is the way we do it. So this pushes down the quarterly Profit with in Q1 SEK20 1,000,000. And I think in Q1 last year, it was somewhere around half of that. Ed. And one thing about the write downs of the SEK 34,000,000 that we had in the quarter, is That is more than we usually have in 1 quarter, but this fluctuates. So in 1 quarter, we can have 34, and then in the next, we might have 0. So I think this but if you look back, if you go back, I think we did this exercise going back 4 years Ed. And we found that there is a ratio between the capitalized development in that quarter and how much we Rotof. And we look at it over years rather than course. Yes. Because as everything else, we fluctuate so much on a quarterly basis. Exactly. So over a year, Eric. It's like 6% to 7% of the capitalized development that is being written off. And this is I think this can be expected to continue in this space, as long as we keep a similar, I would say, risk appetite in terms of new investments. Ed. Anything else that should be mentioned regarding COGS? Yes, it includes royalties that we pay. That is the kind The cost that is mostly connected to revenues here. So this is to a large extent for City Skylines, the revenues there. We pay a certain percentage to the developer. Ed. And then the final cost item is the cost that we have for Ed. The part of the publishing business that works with technical development. So all our DevOps department, this is part That we don't capitalize on the table. And I think it's worth pointing out that this is a very important part for us because of, well, lots of different reasons. But Ed. One is that we our philosophy is that we want to sell our games wherever our players are, which means that we have a lot of at different versions of the games and the DLCs that need to come out. That also means that we want that we have many, many distributors who have the direct contact with the players, and we want to make sure that we also have an ecosystem and can I can speak directly to our players? So a big part of this is building the whole ecosystem. Yes, that's right. So all in Noel, this went up compared to the COGS went up compared to Q1 last year. But you can see compared to Q4 last year, it went down Significantly. And there are 3 I would say 3 things that impact that. 1 is the royalty. We had a bit less sales this quarter on from games that generate Royalties. The other is the we have talked about this on a couple of streams before, the new aggressive capitalization Asha. Which means that we take more costs during the 1st month of the release of the new games. So, so far that has been done on CK3 and Empire of Sin. Edel. And we are still in Q1 in the early phases, meaning that we are so we take the biggest cost in month 1 And then fairly big cost month 2 to 6 and then lesser cost month 7 to 18. And here we have Empire of Sin And the Crusader Kings III is still in the early phases. So we take more costs in Q1 for these games than we would have with the previous model, but less than we did in Q4. And the final thing here is that we have also started to capitalize on the internal development, Some of the costs that we have always capitalized for external games, but that we haven't done for internal games. So that is, Ed. For example, pensions and profit shares for the people. So they're more similar now? Exactly. For the staff That works in the studios with the internal developments. So then it's the capitalized development of internal games will be more similar to the one The catalyst development of external games, which we think has a benefit. Selling expenses, That is it fluctuates a bit between the quarter, but it's going to go up, I would say, slowly over time when we It's more games and bigger games. Let's say, I think it was how many millions was that? EUR 56,000,000 in In Q1 this year compared to SEK 47,000,000 Q1 last year. And administrative expenses have been fairly flat, SEK 26 1,000,000 this year compared to EUR 36,000,000 in Q1 last year. So that has actually gone down quite a lot. Let's continue. Yes. So this with this chart we want to show, I mean, it only shows the quarter's revenue and profit that We have discussed already, but what we want to show with this pretty much two things. One is that Ed. It fluctuates a lot from quarter to quarter, not all quarters. We had a couple of quarters last year where it looked stable for different reasons. But Ed. If you look a bit further back in time, the fluctuations have been fairly consistent, meaning that 1 quarter, we increased profits with 100%. And the next quarter, we decrease it with 40% or 50%. So it goes up and down. And This is something we say that we don't guide what is going to happen in the future, and we don't. But we can guide this much. It's going to continue to fluctuate. It's going to go up and down Ed. For many, many quarters, I think, going forward. So to give you a bit of a smoother trend picture, we have grouped Four quarters together and there it's easier to see the trend and that is a clearly ongoing trend. Now there isn't much seasonality in our business. So that means that it won't go up every quarter because it's not that we're going to beat the revenues or the profit from The previous year's quarter every time. For example, this quarter, it didn't happen. Revenues were less and profits were less compared to Q1 last year. So therefore, we see a slight drop. Ed. Cash flow, not a record cash flow for the quarter in terms of cash flow from operations. This is tightly connected to the profits. So with less profits for the quarter, we have less cash flow from the Operating activities. And normally there is Q4 where we had similar profits as in Q1, but more than double the Amount of positive cash flow, and that had to do with all the sales we had on Cruiserly Kings III back in September that came in everything in October. So that made that quarter break the cash flow record. Cash flow from investing activities, Ed. There it doesn't look like it, but in terms of investment into game development, it's a new record. We invested more in Q1 In share game development than in the previous quarter. Also something we say pretty much every quarter or actually every quarter. I think Eric. So SEK189,000,000 this quarter. And if you look at the last 12 months, It's €649,000,000 that has gone into game development. If you look 1 year before that, it's €478,000,000. So it's €78,000,000 So it's we are picking up pretty much every quarter. And the reason Why the yellow bars are bigger on Q3 and Q4 is that those investments also, apart from game development investments, include Investments we did in Playdron and Eiswijk. The Equity through asset ratio, we have discussed. There you can see what we mentioned that when was this happening in Q3 2020, It shifted. So the total equity was a bit less than the total non current assets. But since last quarter, we're back with having more equity than the total non current assets. I'm going to stop there. Yes. We have a bunch of Esteban. So I'll kick it off. Euro China is your 2nd market after Eddy U. S. Is that in terms of distribution platforms or actual end users? Now this is in terms of end users and games sold in the market. And in terms of distribution, it's Ed, we sell through a few different distributors there as well. And the biggest market, we can say, is the U. S. Yes, yes. Ed. And has been for a very long time. Yes. Okay. Are there any plans to implement a subscription model for DLCs, especially already released DLCs of the core games. Yes, that's how it works for both EU4 and CK2 on Steam at the moment. CK2 also has the advantage of having a base game that's free. So in that case, it's almost like a free to play with well, it is a free to play with the subscription service. And and our intention is to continue to work with this and continue to try and test. If you look at Game Pass, that's a slightly different type of subscription where you buy a Game Pass subscription and then you get access to all the games there, but then it's the base game. So when you have our games is through Game Pass, then you can buy the DLCs separately there in that case. How Ignifikant. This is a DLC subscription system in Tsikeni. It's not huge, I wouldn't say. But I would say Ed. For people who it's very much a way for us to give access to this super vast catalog of content that can be slightly overwhelming if you don't have access to any of the DLCs when you start playing. Anne. We are aware that there is so much out there. So it's a good way to try. I don't think necessarily this is something for a core player who's been buying DLCs from day 1 or who's been playing it for many, many years. So it's more like what type of player are you and how would you like to play? And do you just want to Ed. Try something, then it's a good way of trying. And I see there is also a second question there regarding the revenue, whether we get much revenues from these subscriptions. It's a significant addition, but it's not I would I would say it's not the main reason we do it to get more revenues in Q1 and Q2 and this year. We do this to learn the player Behavior, how does it work? How does it impact stickiness and so on? And I've said this in many interviews as well, but it's Ed. I mean, the only thing we know is that change is constant and change will happen in our industry as well. So it's quite it's very relevant for us Ed to always try when new ways of buying the games or accessing the games or new distributors actors or new I mean streaming is of course a huge one. When they come, we want to make sure that we know how it works and we want to make sure that we can adapt to that, so we don't fall behind and suddenly everything changes and we have not been on that bandwagon Asike. So we will continue to do all of these tests and trials. Do you plan on having a universal subscription service for all the core Paradox Games. I think this is a really interesting idea. Today, it's a little bit more difficult from a technical point of view. Ed. So right now, we don't have a plan, but it's definitely something that we look at how could we build that Ed, how could we do it? And potentially, then we would have to use our own store for that, which is Paradox Plaza, which that could definitely be an option. So yes, we're looking into that. But we already have quite a lot of our games on Microsoft Game Pass. Yes. That's Esther, so you can access, but then you don't have the DLCs. Correct. It's the base games. Yes. Then we have two questions about Leviathan. At the latest release for Rupa and Vachales 4. And the first one is, will there be a patch? And we've actually already released 2 patches Es and another one is coming on 12th, so tomorrow, which I know that the first two patches have made a huge difference and the third one will as well. Ed. And then the second one is what measures have you taken after the release of EU for Leviathan? Any change in Paradox Tinto? I can tell you that the what's happened since we released it not 2 weeks ago and the team Espen working pretty much day and night to get the fixes out there. So right now, everything is about making sure that Erlogs Klimtow. It's a new studio, as we said. So of course, this is it's also clear that they need a chance to breathe and they need a chance Ed to look at, okay, what went wrong, what are we going to change for the future. So what we do, no matter if it's a good release or a bad release or a mediocre release or anything in between. We always do what's called a postmortem, which is when we go through, okay, Ed. What was good? What was okay? What do we need to change for last time? And of course, this will also have a huge post mortem coming in to look at that. I think it's very important to say that this is not something that we are happy with. And Johan Andersson, who is our Game Director on Europa Universalis IV, he's not happy either. Ed. We don't want to release bad content. We want to release good content that our players love, of course. So yes, it does mean that Ed. We will when the team has had a chance to breathe and when we have done all of these first fixed patches, we're looking at how Ouro. We're going to plan on how we're going to work with EU4 going forward to make sure this doesn't happen again. Have you perceived the rising demand for game developers over the last year and has it noticeably impacted salaries? Ed. Yes, I would say. Yes. I mean, as we show, we have grown from 503 To 6.96 employees in a year and that, of course, needs means that we are Fighting for a lot of confidence. And a large part of those added colleagues have been in the studios. Ed. And I mean, we have, I would say, a competitive situation, not the least in Stockholm. Ed. That's also one reason why we want to expand geographically, right? Exactly, exactly. But then I think we have an advantage working Ed. With a product like a game that generates quite a lot of strong feelings because that has an upside, I think, in terms of Retaining employees because a lot of us like to work with the products that we like to. No Adarili, where you work in the company. A lot of people are very passionate about our games. All right. Ed. Did you measure that your team's overall efficiency is higher when working in the office? Sorry about it. Basically, have we measured Efty. Efficiency is higher when we're in the office than when during corona. I can tell you the measurement is that we see that the delays are longer and more and that's a very clear sign that and we also I mean, when we talk to the teams, it's very clear that it's harder to everything you want to discuss needs a meeting over Zoom or Hangouts rather than just turning around and discussing it. So it's more of those things. It's very I mean, all of our teams, I think, are working super hard and being very, very diligent. So it's more about how easily do you discuss and what's the time of the feedback loop. And how do you do like if you want to bounce creative ideas with someone, can you just turn around or do you need to book a meeting, things like that? Ed. All right. Can you elaborate a bit on the investments in capitalized development? How much of this is going into core games? El, how much is going into other projects? It's not something we disclose. So the capitalized development Just one. See how I just like gave you that question? Yes. It surpassed SEK1 1,000,000,000 at the end of Q1. And this is a mix between investments into expansions and content for Live games, sequels on existing games and completely new games. And this balance is at the top of the agenda for many of us at all time, I would say. And I think this when we look forward in how we And I have that mix. That is one of the things that we have adjusted a bit with this focus on the quarter. Alex. And then very much a question for you, Alex. What would be the best balance for equity versus assets? It's a very good question, yes. I mean, it's I'm very happy with our balance We only have I'm happy that we don't have debt or more correct. The only debt we have is debt that comes from running the So it's debt to the tax authority, debt to the suppliers and so on. But I don't see Any need to change that ratio. Yes. But then you can take more risk by increasing the debt. I mean, we could Finance the company, borrow money to invest even more. But we had when we ended the quarter, we had SEK 700,000,000 on the bank account. So Ed. It's not anything that we are in need of at the moment? No, it's more a case of if we would ever need it, fine, then we will reevaluate, Ed, but that hasn't been the case so far. Correct. Yes. All right. Are there plans of moving more PDX games to consoles? And if so what are the challenges to doing so? Very good question. We have actually quite a few games on console now. And I would say all of them are performing Anuel. So yes, we would love to have more games on console. It depends a little bit on the game. Some of the code is very, very difficult to transfer to console. So when it's older games, it's difficult. Ed. When we look at newer games, I do hope that we will get more of them on console in the future, Ed, but nothing to share right now. Yes, that's it. PDXcon Ed. Next week, what are you looking forward to? I'm looking forward to find out if there is any new game coming up. Edel. I'm actually going to host the announcement show on Friday 21. So tune in for that if you want more updates. Thank you very much. See you next quarter. Yes. Ed. Thank you very much for your call. Thank you, August. Yes. See you. Bye.