Earnings Call: Q2 2021

Aug 10, 2021

Quarterly report

Hi, everyone, and welcome to the Q2 report for Paradox Interactive. Hi, everyone. My name is Ebba. I'm CEO. And I'm Alexander Bricka, and I'm the CFO. How are you doing, Alex? Good. Good to be back. Yes. Have you had a nice summer holiday? Yes, it's been good. As you know, it's been warm here in Sweden, so that has helped. How about you? Yes. Also Lots of activities outdoors, which has been really nice. And now we're back to talk about Edba, Q2. If we if maybe we can slip to or flip rather than to the next slide. Eva. So we've had a little tough quarter, I think. We're not completely satisfied with where we are. Edvard. We are seeing a lot of impact from COVID. It's very unfortunate for lots of reasons. And for us, It's mainly that development time is taking longer than we would like it to do. Edvard. So the revenues this quarter were down 13% compared to last year. If we look at the whole year, It's up 11%. Profits before tax, we had a very good quarter last year, so it's actually down 44% compared to last year. And if we look at the 12 months, it's also down on that. There are a couple of factors that are affecting this. One is the fact that we have canceled the project. This is completely normal for us. We do it quite frequently, not every quarter, but I think 3 out of 4, so almost 7. 3 out of 4 quarters. This quarter, the amount is a little bit higher than normal. It's SEK 42,000,000. And the reason for this is that this was a game that initially looked very So we decided to continue development and then it didn't work out. I've said this before, and it's something that we work very hard on To try to cancel projects as early as possible. The cancellation itself is a part of the process, but of course, we want it to be early, so we don't spend too much money. If you look at our investments over time, Alex will show some slides on that later as well. But since CapEx is growing, that also means that Eber from a fixed sum amount. This has gone up over time, but percentage wise, it stays pretty similar and fluctuates a bit. It fluctuates a bit quarter by quarter, but if you look over time, it's quite stable. We've also had some FX effects that we have Every now and then, sometimes it goes in our direction and sometimes not. This quarter, it was more against us. But that's also normal. So We continue with this. The one thing that I think is positive and that is building for the future is that our player base really keeps on growing. Looking at our PDX accounts, they've increased By EUR 6,000,000 in the past year, which is a huge bump for us. This is very important because We communicate with our we want to communicate directly with our players. The fact that we sell mainly through Our partners means that they have they also have the relationship with the players. So it's important for us to have our own connection, so to speak. So this is something we work very hard on to continue to collect and also build on for the future. We also have super stable and good monthly active users, over 5,000,000 players every month who come in and play our games. So that's we're also very happy about. Of course, this is what builds for the future. We've continued to you're very fast. Eba. We have continued to work on all our games to make sure that the basis for every single game grows, so it's not Eva, just one game. And also that we continue to really develop and work on the teams, so the teams have Good sizes and good potential to build for the future. Okay. So if we move on to one of the highlights of this quarter, we had Our annual fan gathering, it actually wasn't annual because it was 1.5 years since the last one. But PDXcon, this time, it was digital Due to the pandemic, and we managed to reach out to a lot of people. We Over 3,500,000 views on our content, over 250,000 concurrent and unique Viewers during the actual weekend, the trailers tend to be the most popular ones, but then also the announcement show Eva. It's viewed by a lot of people, both live and then, of course, after the event itself. We were sending content for 72 hours, which is definitely a record for us. A lot of hard work from many people in the group and many of our partners, many of our modders were also involved in this, etcetera. And we announced This is one of our most mythical games, and I don't think I've ever posted anything on social media where I haven't gotten a question When Victoria 3 or Viki 3 is coming. So it was incredibly exciting for me, but of course, also for the team who are building this game to get to announce it. It's a grand strategy game. It's quite heavy on the management side. It's known for super complex systems in terms of how you handle politics and populations. So now we're focusing on getting this to a great game, Eba. And we haven't announced the release date yet, but more information on that will follow. And then other events in the quarter. We had 5 year anniversaries for both Hearts of Iron IV and Stellaris. Hearts of Iron has sold more than 3,000,000 copies since we launched it, and Stellaris has sold more than 4,000,000 copies, almost 4.5 actually. So these games are continuing to grow over time and both, of course, the expansions that we add to the game, but also the base games actually also continue to grow over time, which is super cool to see. We have released 4 expansions and 3 content packs. So there is a question on if we are releasing We are releasing things. It's just that it takes longer to get things to a state where we can release them basically. A nemesis for Stellaris, Federations for Stellaris Consol, 2nd Chances for Prison Architect and Leviathan and for EU4. And the first three were Great and very well received. We tend we sometimes release patches on the base game at the same time as expansions, and Eba. That's an interesting concept because it really adds to the value of the expansions, but it can also it's often systemic changes to the game, so it can also disturb how the players are used to playing a little bit. So that was something that happened with Nemeziz. And we are now talking about, is it better to split these 2 and do all the free patches in one point and expansions in another. And then we had issues with Leviathan, which did not live up to Our standards when it comes to quality and how we want the expansions to go Eba when we released them. So this is not the first time it happened and not the last time it happened, but for every time We learn and we really improve on how we work and how we work with the whole process of getting a game out the door or expansion out the door. So now we are the team are working very hard on getting this expansion to be in a good state. And we've done many patch releases already, so it's looking a lot better. Yes, and then we've had 2 sales during the quarter, the Steam Publisher weekend, which we had at the same time as the PDXcon And then the steam summer sale, which started in the end of the quarter and actually continued a bit into the Q3. These steam sales are always Very important for us. It's a great way also to get into our quite content heavy games for new Edba. So we always see a very nice uptick during these sales. Last but not least, we have Top earners, it's you're happy to see it's the usual suspects, I would say. Cities, Crusader Kings 3, EU4, Hearts of Iron 4 and Stellaris. And I would also I think it's worth mentioning that Surviving Mars is also doing super well, and it's close Abbas up there, but it goes up and down a little bit. But I think it really just proves our point around our strategy and what we do that our games live on for a Very long time, and it's very much about building a base and continue to build that over the years, which, of course, is the case with all of these games really. I think that was my no, the constant topic of COVID as well, of course. So COVID, As you know, we can see it in the comparables. We did see a big uptick in sales, Especially last year, we're still seeing that we have a lot of players who come in and play, but we are seeing some downside effects as well, which mainly has to do with our speed of production. It's not so much about The amount of time people work, because people do work a lot, it's more that every single feedback loop takes a lot of time. So It makes it very clear that we are here to make games. So for us to be able to make games, we need to have more frequent and in person contact. So for us as a company, the office will be our main place of work as soon as we can. And we're trying to follow recommendations in every country. So it's a little bit different from country to country where we are, But we are now seeing that a very big and growing part of our teams are getting vaccinated. So while we are still working from home, We are looking at slowly getting people back into the offices during the fall. It won't be a switch on a day. Eeva. It will more be a very gradual thing, but that's definitely the plan. That, I think, was my last slide. Yes. Perfect. Thank you. So let's go through the numbers a bit more in detail. So the revenues for the quarter came in at SEK 403,000,000. That is a 13% decrease compared to last year's Q2, where we did EUR 465,000,000, Which was a fantastic quarter in many ways. As Eeva mentioned, the top 5 contributors are the Edvard. Usual suspects, City, City 3, U4, Solaris and Hochtivayon 4. Operating profit for the period Came in at SEK111 1,000,000. Q2 last year, the operating profit was SEK199 1,000,000. So it's a 44% Eber. And this is where you can see a big impact of the write off of the canceled game, right? Yes. So Three things that makes this difference. So one is the write off, EUR 42,000,000 impacted this year's Q2. Last year's Q2, we actually had 0. So that was an exceptionally good quarter in that way. So comparing the quarters, it's a EUR 42,000,000 difference there. And of course, we take the full impact the day we decide to cancel the game. But of course, the money has been spent Throughout the longer period, but everything ends up in 1 quarter. So it hits the quarter where we decide to cancel the game, of course, a lot. And then you mentioned FX. The dollar has gone down from last year's Q2 average to this year's Q2 average With 13%. And we have 97% of our revenues in foreign currencies. Dollar is the biggest, A lot in euros and the pounds as well. Those currencies has also declined against the SEK, Not as much as a dollar, but still a lot. So when you have a turnover of SEK 400,000,000, It has a huge impact. So just the FX impact and the fact that we didn't have any write downs last year and a lot this year, That almost makes up the difference. Then as always, our quarterly revenues and profits Are highly dependable on dependent on the content that we release in the quarter. And if we look at the quarter, Eva went through which expansions we did this quarter. The lineup is similar to last year. It's a similar amount of expansion, similar sizes of expansions in terms of price points And similar sizes of the base games that we did the expansions on. But I think two differences. One is Last year's expansion on U4 was Emperor, which was fantastic, which generated a lot of sales. This year's expansion generated less sales, of course. But I think a bigger Difference between the quarters are that last year, we had 2 big content releases just before the quarter started. So in Q1, in March 2020, we came out with expansions for Skylines and Stellaris. And the cities came out, I think it was at 26 March. So of course, the same. A lot of the revenues came in, in Q2. So that, of course, impacted The difference is quite a lot. So earnings before tax or profit After financial items came in at EUR 110,000,000, similar difference there, EUR 198,000,000 Q2 last year And profit after tax, SEK 88,000,000 this quarter this Q2 compared to SEK 155,000,000 Q2 of 2020. Operating profit margin for Q2 came in at 28% compared to 43% last year's 2nd quarter. Edvard. And here, this, of course, fluctuates since revenues varies quite a lot between the quarters, but Cost is more fixed. Cost grows with our ambition to grow the company to a large extent. So therefore, when we have a high revenue quarter, the margins tend to accelerate quite a lot. Profit margins after tax, 22% in 2nd quarter compared to 33% the last quarter. Equity through asset ratio slightly increased. It's going to continue to increase. And this has to do with the fact, I It was a year and a half ago when or actually it was 2 years ago when the accounting rules changed and we had to take The lease agreements as an asset and as a debt. And towards the end of 2020, we entered into new lease agreements in Stockholm, In Seattle, in Delft, I don't know if you saw maybe Malmo as well. So that became a huge debt and a huge asset on the balance sheet. And that is by every quarter, it's getting less and less. So therefore, this equity through asset ratio is increasing. Employees at the end of the quarter, 715, 534 last year's end of June and a big part of that is The addition of Playrion and Ice Lake to the company group, which is A year ago now. A year ago, yes. Or a year and I'm on the Yes, it was in the first half of July, I think both those mergers went through. Yes, time flies. So let's go through the cost base a bit more. So these three lines Edvard. And so our revenue and our main three cost items. The revenue, as shown many times before, tends to go up and down. It has gone up Compared to Q1. But the costs are fairly flat compared to Edvard. Q1. So it's the total costs, all the three cost item, cost of goods sold, selling expenses and administrative Expenses amounted to SEK 289,000,000 for the quarter. In Q1, it was 1% less. Edba. But if you look 4 quarters to the left, so if you look at Q2 last year, Then it was EUR 250,000,000. So from EUR 250,000,000 to EUR 289,000,000, that's a 15% increase. And these costs, Edba. They will continue to increase as long as we have a growth strategy. With more and bigger studios, We will increase this cost, not each quarter, but over time, they will increase. So the largest of the cost is or the cost group is cost of goods sold. That item includes All the costs for our 9 internal development studios now, all the costs for our external development studios or our development partners, It includes the depreciation of when we have acquired assets and companies, Almost everything comes up as an asset that we depreciate. And it varies depending a bit on what the company includes, but it's Some of the assets we depreciate over 1.5 year, but most part of it is over 5 years. So this has an impact. I think it was SEK 20,000,000 Just in the Q2. So even though we believe that the asset we have acquired, they are not going down in value. They are hopefully We didn't have to take the Ed Barre. That's the way we account for it. So the COGS and thus the profit every quarter now is taking a SEK 20,000,000 write down Edba. Sorry, depreciation. But we like it that way. The item and the EUR 42,000,000 Write down of the unannounced game is also part of this COGS of SEK 200,000,000. What else? Yes, Royalties, it includes the royalties, and that tends to go up on specialty cities. So if we do a lot of sales On cities, the royalties. So royalties is to the older studios that are developing games for us that aren't owned by us, basically. Exactly. And how the normal setup is that once we reach a certain threshold of revenues, we start to share a part of the revenues The studio, that depends, of course, a bit. But so all external games that become successful, we start to pay royalty. Amortization, when we develop games, we capitalize. Edvard. When we release the game, we start to amortize it. That has gone that is up Compared to the Q2 last year, and that has to do with we have released more and bigger games. So compared to last year's Q2, we have released Empire of Sin and Crystal City: Kings 3, And they, of course, impact this quarter. But since Q3 last year, we changed amortization model, so it's aggressive. So that means for each quarter that passes, we amortize less and less. So therefore, the amortization is less in Q2 than it was in Q1, And it's going to be less in Q3 unless we release a new game where it bumps up again. Edba. And royalties, I mentioned, we Should reasonably be a bit lower because last year's Q2, we had quite a lot of revenues on cities. What else should be mentioned? That's, I think, is it about the COGS, selling expenses And administrative expenses have been fairly flat over quite some time. Which is the way we want it, right? Yes. Administrative expenses is everything else that is not the items I mentioned in COGS and selling expenses. So that will Go up over time as we grow the company or the company group. Selling expenses will Fluctrate, perhaps a bit more than we have seen because with bigger releases, We will see bigger spending. So this Shows each quarters, this goes back, is it 5 years now? Yes, 5 years quarterly revenues and operating profit. And what it shows is what we have stated many times, it fluctuates quite a lot. And percentage wise, Profit fluctuates more than the revenue, but it has an outgoing trend. That's the other thing you see here. Not every quarter To quarter, but over time, it has an upcoming trend, which is very important. Then we can lump it all together or not all together, but 4 quarters together. So we have a year, And that is what is shown here. So each bar and each point of the line shows the Rolling 12 month revenue and the rolling 12 month operating profit. And the revenues for the last four quarters It's just a little bit more than SEK 1,700,000,000. And I mean, this is why we say that we aren't Really happy with the quarter because we don't want it to go down over time like this. No. That is now 2 quarters in a row. And we do believe that it's connected to getting more content out over time. Eber, which we are working very hard on. So if we go back to the previous quarter there, if we look at the profit For the last three quarters, you can see it has gone up 2 quarters in a row. So that in that short term, it's an upcoming trend. But When we group it together, it goes down. And that has to do with the fact that we for each quarter, we replace The last quarter kind of that was in here. So this goes down because we are comparing the last three quarters With 3 great quarters that started off Q4 2019 and then continued through Q1 to Q3 Last year, super strong. So very good quarters to compare with. And on top of that, a Each of the last three quarters, the dollar has been decreasing year over year quite a lot. So that's a big impact. It has a huge impact, of course. But as you mentioned, we have geared up our company to deliver more content than we are able to get out at the moment. So That we would like to see a pickup on, of course. Cash flow, Very strong. I think it was EUR 200 yes, EUR 262,000,000, the cash flow from the operating activities in Q2. Grouping it together, the last four quarters, it's just above SEK 1,000,000,000, quite strong. And what do we do with it? We invest it into new games, not only new games, but game development. It can be new games and it can be expansions. Record again, EUR 212,000,000 invested into game development. I think if we look at the last four quarters, it's SEK 715,000,000 that went into just game development. If you add these bars together, it's going to be more, but that's because it includes acquisitions of certain companies as well. But so SEK 7 EUR 15,000,000 investment into game development. The year before that, it was EUR 5.21,000,000. So So huge uptake. Edvard. Yes, yes. It shows our growth and our ambitions, I think. Noncurrent assets and total equity continues up. And this chart kind of shows that our noncurrent assets, which are Capitalized development is the biggest one, which is SEK1120 1,000,000 now. And then the other 2, the one I mentioned, it's the asset we have Edba. In our lease agreements and the third one, Not necessarily size wise, but that is the intellectual properties that we have acquired. So These assets, you could say, are quite well covered by equity. Equity goes up compared to Q2 last year, but this goes down against Q1, and that This is due to the fact that we paid SEK105.6 million dividends to the shareholders in May in the second quarter. Edba. That's it. Okay. All right. We actually have a whole bunch of questions. So I'll kick off here from the screen. What is the next plan for PDX? Will you continue the strategy game path? Or will you or are you thinking about something new? Well, I would say we have Increased over the past year our focus on strategy and management games, which really are our cores our core games. And this is both and continue to grow over time and also look at, okay, what's next for a franchise like, for instance, Victoria 3. We intend to continue on this path as this is the games that we know well. On top of this, we're also venturing out to slightly less proven World's like Bloodlines is an example of that, for instance, and that's also important to us to grow. But really, the key focus is on our core. Eba. Alex, this one we almost answered, but SEK 42,000,000 is a very large or quite large Right off, so the game asset belongs to you, but written down to 0 and work stopped at the external studio. How long in development, a strategy management game or another genre? Yes. So it was an external studio. The game, As Eber mentioned, looked good at early stages. I think we have gone through this before, but we Normally, we divide our development into different phases. And we, of course, aim To decide early on before we have spent too many too much money and too much resources on the game, If we should take it to over the finish line or cancel it. This, we decided kind of early on to it looks good, so let's continue. Edba. But then at a later stage, we decided that now we think it's better even though it's 42,000,000 is a lot. It's better to stop the development and reallocate further investments into other games. It's an external studio. So they have stopped working on the game, of course. And Eva. We haven't said anything about the game, but it's I mean, we can say. We primarily work on our own IPs. Eva. So it's a fairly safe bet to think that we own the IP, right? Yes. But I think Also, I mean, we will see when we cancel games as CapEx is growing, those amounts are also going up. So it's, I would say more relevant to look at the percentage than the number itself over time. Yes. If we went back and looked at this, I think it's Around 1.5% to 2% every quarter of the capitalized development in average that we write down, But this will fluctuate, of course. So this time, it was exceptionally high. Last year, too, it was exceptionally low. All right. Then there's a question on productivity and work for home. What would be a normal amount of content for the current size of the group Annually, for example, DLCs annually. And it's very hard to say that there's a normal amount. Of course, as we are growing, Our intention and ambition is to also grow, but it's not necessarily growing the amount. It can also be the size of what we put out or what we release. So it's not only about the amount. And then there's a follow-up question here. Is there a growing backlog of nearly finished content that you can't quite get ready? Or are the staff producing content more slowly? And when do you think you Edvard. I think it's just really clear that making games is a group activity, and it's very, very dependent on A lot of feedback loops and a lot of discussions in the teams, and that takes more time when everything is a meeting and everything has to be scheduled and everything has to be a call. So it's more It has to be a call. So it's more of the latter, so that it's actually a slower process than that it's Eva. That would be it. And we are aiming to slowly start going back. Some of our studios are actually Almost back already, but most of them aren't. So but the intent is to do this throughout the fall. So I don't think it will be It's not going to be a one date switch, which means that progressively, we will get to a better stage here Eba. All right. Next question. Let me see here. What are your thoughts about your opportunities in growth For growth in China, given the past week's reports, how will it impact you, Alex, maybe? Yes. I think they You referred to a statement that first went up saying that game certain types of games is similar Like drugs or something like that. But then that statement was taken down within a day or so. But China and Asia is a very Edba. Yet are still, by quite far, North America and Europe. But China is getting that in Q1. We We had a lot of sales in especially China because we had the Lunar New Year, I think it's called, where we did a lot of promotions. Edba. And we will, of course, we will we can't speculate in what kind of regulations is going to come, but It's a fast growing market. And of course, with that, there will be regulations a bit, I'm sure. But I think it's going to continue to be an interesting market for us for many years. What are the key factors Projects that PDX is looking for right now. Well, I think I almost answered it before, but we are very much into our core, which is Strategy and Management Games, and that's primarily where we look. And then we have this unproven track, where we also have Interesting initiatives, but it's more about the unproven is really about identifying what could become our next proven thing. So that's how we work. A common critique you get is that your DLCs for any given game amounts to quite a bit of money, which might scare some potential customers Not getting to even try our fantastic games. Are you looking on or into other types of pricing? We are actually. Do you want to Yes. Yes. But firstly, yes. And sure, if you're Go out and buy the base game and all expansions from start, yes, it's a fairly big chunk of money. But A good thing with that setup is that you can start off by buying the base game. Or playing it for free in a lot of cases. Playing it for free in a lot of cases. We have done that with CK2, Edba. There we have the base game for free. We participate in subscription services like Game Pass for a lot of our games. Game Pass, we have quite a lot Eber. What else? We have the Humble Bundle, 1 of our distribution partner. Yes, they do a lot of group. And also Steam sales, of course, are great. And And the other thing that we are doing with 2 of our games, and I think we will continue to do it more, is that you can subscribe to All of the DLCs and expansions. So for CK2, you can play the base game for free and then you can subscribe. I think it's $5 a month or something and then you can play it. So we are definitely playing around with different alternatives to get into this. And it's also a lot about packaging and how you present the DLC. So if you're only interested in playing in one way, which DLC should you go for, etcetera. How do you ensure an equitable workplace culture at Paradox. This is a very interesting question, and I think it's been a hot topic throughout the summer in our industry. We I believe very much or we believe very much in a fair and inclusive workplace. And to me, that also boils down to the culture in the company, what type of culture we have. We work very, very hard on this. And While we have studios in several different locations that might differ a lot, we all unite over this inclusiveness and respect for Others. So we are by no means perfect, and I don't think anyone should ever claim that they're perfect because that's when you run into problems. This is something we work on every day, and we also need to continue to work on every day. And then we have Eva. All the policies and the tools that we think are good with education for managers and other types of educational opportunities for our colleagues, but also things like policies around anti harassment and quality, etcetera. So a lot of different paths into this. But I have to say, I think the main important thing It's to continuously, every single day, work with the culture in the group as a whole. And especially when you grow as much as we've done over the years, This becomes increasingly important, I think, because it's once you start going down the wrong path, it's a Big job to get it back to a good state. But yes, we work a lot with this and we'll continue to do so. Is CK3 just cannibalizing on the revenue from CK2? Or did it actually improve the revenue? Edba. If the question is what happened with the CK franchise revenue? So when we added CK3, Did the revenue go up? Or did it just go up as much as the revenue from CK2 went down? Eibah. We don't disclose that, but I think the assumptions or the conclusions you can draw from, for example, the Q3 Revenues. Q2. No, I mean Q3 last year. Okay, sorry. Especially from last quarter, it's easy to say that it should go up. I mean, that's if you had a game like CK2, I I think it had been live for 8.5 years or something like that. Of course, the revenues are still important at that stage. But if you can come out with a new game on the same franchise that the player group has been waiting for, for some time, Edvard. And it's a good game. It's going to have a significant sale impact, of course. Since you cancel projects fairly regularly, do you ever pick up some of these projects later from the pile? I don't think we have we have at times, we have like if it was an external studio working on it, the external studio I've continued to work on it. It is quite hard to just leave all the code and then come back to it later. We have one example of of Bloodlines, where we've actually switched studios, which is a big endeavor to do. But that's, I would say, a more likely outcome Rather but then it's not a question of a cancellation. It's more a question of switching of a studio. And I think there has also been the other way where we have Cancel the project, but then later on picked up the same idea. Yes. That happens. But for example, with a different studio because for this That happens a lot. Because I've said this before as well. But a lot of the times, the reason for the cancellation is not that the idea is bad. It's just that for some reason, it's not working out in the way that Eeva. We intended to. So we do keep the ideas and rework them. Are you able to discuss the average development cost or budget for your games? How expensive is it to develop a game at PDX? And how does this cost look like after the release? Edvard. We don't disclose the cost per title, but you can get some View watching how much we have written down this quarter, so it was one game Edvard. That was not completed, of course. That was some way in between, and that was SEK42 1,000,000 and that is that's all development costs. So then you can expect it, at least for that game, to be a bit more than that. Then It takes 3, 4 years to make a game, a complete new game. And so the big chunk of the development cost Edba. It's taken its spend up to the release of the base game. After that, to continue to come out with content Requires a bit less. So you can for the same kind of money, you can continue for many, many years to support the game. I noticed that we have a lot of questions. So I'm going to run through. What measures are you taking to improve quality of your games? That's it's not a one Eba. Size fits all. It depends on the game, and it depends on the studio. So all of the studios are continuously working on this. And it's also about management, what the expectation is from the and Beis, right? So it's also about making sure that fans know what's going to come, so it's not a huge disappointment. And all of this is really Eva. Continuous work. And of course, the aim is never to release something that people don't like. So it's something that we work hard to Games, is it possible to implement some sort of colorblind mode option in the settings? Well, we always also try to work with accessibility. I don't know specifically around colorblind mode, but I can say that we're working with both AbleGamers and Special Effects, which are 2 charities that I work with us as developers to help us see what's good to implement in a game for accessibility, but also for Also, they actually build tools that help with accessibility. So very good very, very great organization, so much, Are we looking to open more studios in the future, Alex? Maybe. Maybe we could. Maybe we could do that. I think I saw one of those questions. I think it came to the mail. Where are we looking to open studios? And I think the answer there is wherever we can find the right talent. And that is the reason, for example, why we choose Barcelona for OpenLink Tinto. We consider that to be a good pool for the talent we are looking for. Bloodlines 2, any news? We don't have anything more to share at this point. It won't be released this year, as we have said, but the Eva. Moving along with our new partner. So as soon as we have something to say, we will, we promise. How involved are testers in PDX game development process? Do you run a lot of internal tests? Yes, it's a short answer. Yes. A lot. Yes. I I mean, we have QA testers that are embedded in the development teams. We have external QA as well. And then we have the We do the PR kind of reviewing as well with internal teams at a different So one game team will look at The team's game and come with suggestions. At certain key gates. And also we have a lot of fans who test the games and beta test and stuff. And if you're Eeva, which includes all of our games. Currently, that's very, very difficult from a technical point of view. I think it's interesting. So it's definitely something we're looking into, but Eva and also because we like the results that we have from the subscriptions, but we're not quite there yet. Alex, this is for you. Additional Overhead with additional headcount, did Paradox counter that by shedding CapEx assets? I don't Quite understand. Did Paradox counter that by shedding CapEx assets? I mean, If we look at the increase from, what was it, 534 to 715, I think 75% of that is studio personnel, at least seventy Edba. 5% is the personnel. And so that is development staff. And that doesn't have a big impact on the cost because If they work with game development as they do, it's being capitalized and becomes an asset until we decide to release the game. Eva. So maybe that was the question. Have we acquired any foreign capital during the last quarter to basically Eber, hedge FX. No. We accept this reality that at the end of the day, we could hedge, But at the end of the day, the movement in FX is going to are going to be what they are. Eva. If COVID returns and the development of your games slow in, as you've mentioned, was a factor for this Q2, how will you tackle it? Eva. Releases, more sales weekends. Also very good question that we're talking about a lot right now because we don't know what's going to happen in the fall. I think we have learned so much about how to work in a distributed manner. And it's fair To also mention that we have some teams that always work in a distributed manner. So but it does depend on the team size, and I think it also very much depends on Where in the process of a game development you are, where if you're very, very late in the process and mainly working on bug fixes, for instance, It was very clear for in the case of CK3 that, that team worked like magic up until the release on CK3 because they everyone knew what they were doing. It's more in the whole creative process. So I think we have to look at Much more interactive virtual work rooms and things like that. And we're also gathering all the learnings we have from this year and a half on What has worked and what has maybe not worked and how can we help the teams going forward, especially to be clear that We want to make sure that we remember the learnings from this. Now it's been 46 minutes, and we only have one more question. So And that is, is Tencent still holding shares at Paradox? And yes, they are. They own 5%, right? They are a silent owner, I would say. They're very helpful if we have any questions around Things that they know, they own parts of so many companies throughout the world. So it's a very strong network of gaming companies, but they tend to stay out of our business and what we do at Paradox, I think, is the short answer to that. Edba. That was a lot of information and a lot of questions. Very happy to see so many questions. It's always fun. Thank you so much for tuning in, and we will see you at our next quarterly report, which I believe is on the 16th November.