Hi, and welcome to Stillfront's 2023 Capital Markets Day. I am Alexis Bonte, the COO of Stillfront, and I co-founded a games company back in 2007 called eRepublik Labs. We joined forces with Stillfront in 2017. Since then, I work as the group chief operating officer, and I focus on operations and co-leading Stillfront's game studios. Last time we met like this was in 2021, and our aim today is to give you an update on market developments, our strategy, and most importantly, our next phase as a global games company. I'm happy to be joined on stage today by several of my colleagues in the management team, as well as Mo from Jawaker and Rex from 6waves. We have approximately two and a half hours of great presentations and discussions ahead.
If you have any questions, you can use the chat box below the video window, and our investors relations team will be happy to reply. First, it is my great pleasure to welcome Jörgen Larsson, Stillfront's Founder and CEO, who will reflect back on 2022, as well as walk you through our new phase and updated financial targets. Thank you.
Hello, everyone. I would like to talk about Stillfront's next phase. First, the most important thing, the ultimate purpose of our business is to strive to make a positive impact on our gamers' everyday life. Whether they would like to socialize, compete, or just get entertained, this is what it's all about. We saw it clearly during the pandemic, but we also see it when our awesome teams are working with the gamers, communities around our games around the globe, that we really can have a very positive impact. This is why we do what we're doing every single day. We have an updated vision with our company. We would like to build the best games company in the world. With best games company in the world, we don't mean the largest games company.
We're the best games company in the world, we don't mean the ones that has the most leading-edge, innovative products with the largest budgets. We're the best games team and best games company in the world; we don't mean the ones that are maybe with the most new technology and so on. What we mean, and this is important, the most efficiently operated games company in the world. We will not be the most innovative company when it comes to the product necessarily. We will be innovative in the way that we conduct our business, in the way that we refine our processes, in the way that we are operational searching for excellence.
Today I will describe a part of what this is about, but most important is that we will walk you through what this means in practice and why and how we will do this and turn it into something practical and results. Building a company is best done in different well-defined phases. We have done that, and it's for many reasons that is very important because when you enter into a certain phase, you define your priorities. What is the most important thing in this very phase, different from the previous phases or the coming phases? How should you refine your strategies so that you increase the opportunity to create the most value for that specific phase? Basically, you can say that the whole business, the way of operating your whole business is adjusted accordingly. Basically, the modus operandi is different for different phases.
Also, if you do this in a good way, you can keep your corporate development fast, fluid, and flexible so that we adopt for the opportunities that we have in each phase, and we can tackle the challenges that we have in each phase. Also further, it's also the case that if these are well-crafted, they can be also vitalizing for all stakeholders, both internally and externally. We started back in-- when I founded this company with an entrepreneurial phase to figure out how should we create value, what position should we have in the value chain of online gaming? Then we entered into the structure phase. We built and took in and crafted different core elements so that we have a structure to go into the next phase, which was the scale-up phase.
We entered into the scale-up phase at our Capital Markets Day in November 2019. We said we should build a three times larger company. I will come back to that later. We are entering into the 4th phase of building Stillfront, the synergy phase. We should focus our efforts on leveraging the size that we have built. We should focus our efforts on leveraging all the talent and the awesome people that we have, the absolutely most important asset in our whole company. We should see to that we leverage not only the scale, but the reach that we have. We are a truly global company. We already get out several benefits from that, but we can do much more.
This is what the Phase Four is about, to create synergies, leveraging all the different assets and talents that we have in our group. The second thing which is important when building a company is to think about and act based upon a certain set of pillars that you build your company based upon. From the very inception, we had three different pillars. It was the entrepreneurship, scale, and structure. It's all about balancing this because if you're not balancing this, so you only are focused on scale, on the cost of entrepreneurship, it will not work. If you are too focused on structure, losing out entrepreneurship, it will not work. You need to balance these three, and I think we've done that fairly good. It's easy to make the slide, it's tricky to do in practice.
Through the network of studios and talent that we have in our group, I think we have created good results. Now, Phase Four, we're adding a fourth pillar, and that is the synergy pillar. This is very important. In order to create these synergies, we have built something called the Stillops platform, our business platform that will enable and facilitate for all our game teams to create these synergies in collaboration and with each other and us working centrally supporting them. Again, management throughout our group, in game teams, in the studios, as well as us working centrally in different functions, it's all about constantly think about and see to that we balance not only three different pillars now, but four different pillars.
We're not only working with synergies on the cost of structure, on the cost of entrepreneurship or something else. This is the way; this is a core element in optimizing our business performance and realize maximum value for our shareholders ultimately. I referred to when we entered into Stillfront Three, as we call it, and that was in November 2019. We set up some, what we thought was quite ambitious, scale targets. We should make the company twice the size in five years. This was just before the pandemic when we have exceptional development, as you might recall, if you followed us. We reached that quite immediately, actually. What we did then was we updated the financial targets in September 2020, at a similar event like this, as also Alexis referred to.
We didn't really reach that fully. Importantly, the most important thing with this is that we have reached enough scale to go into this leverage or synergy phase. It's not necessary. It also hasn't been necessary to reach the SEK 10 billion revenue scale. We are far ahead of the SEK 4 billion since we today posted the full year showing SEK 7.1 billion in revenue. We have the scale enough to go into the synergy and leverage scale and create more value going forward. 2022 was a quite difficult year for the mobile games industry. The global games market was actually down full year, approximately 8% for the individual year. Just in Q4, it was approximately down 11%. These are quite big numbers.
Importantly is to as shown in this graph, that the whole industry grew, and so did we, by high numbers prior to that through the pandemic, but also the underlying structure growth that is in this industry and will be for a long time. The CAGR was actually 9% from prior the pandemic up until including 2022. The weak ending of 2022 will also spill in, so there is a slightly lower visibility into the first half of 2023. We think that we are back on the structural growth that this industry has been enjoying and will enjoy for many years to come. That's underpinned by several factors. One being that young people see mobile games as their main entertainment tool or source for entertainment.
They will not quit playing just because they become 20, 30, 40, 50, or whatever. They will continue to consume. We have a backfill of new gamers coming into this market. Also, there are new markets geography-wise that are growing very fast. The MENA region is very important for us. We will listen to Mo later here, from Jawaker that has made a tremendous job in growing there. But also, LATAM, and not the least India, is really strongly growing other territories. Further, we are reaching new demographics that hasn't previously been playing games. Last but not least, there are subgenres that are not yet developed or even invented yet that will also underpin the structure growth that we expect to be in the long run, 3%-5%.
There are people suggesting that it will come back to 9%. We think that's a bit optimistic, but 3%-5% for many years to come. We had some headwinds, as I explained, from the market and the circumstances last year, but we could also have done things better in 2022. Certain products investment in the past year have not met our ROI requirements, so we make a one-off amortization as presented in the quarterly report this morning. I think also that we have in some of our studios from time to time, which Andreas will go into later more in depth, you are in different phases. You are in a growth phase, or you are in a harvest phase, or you're in different stages, basically.
What we haven't done sufficiently good, I think, in 2022, is that the one that is not growing top line can and should grow margins. I think we can do much more there. Finally, the third point which I think we can do better is ad revenues. We explained when we entered into Stillfront three that we had an ambition to be on high teens of our percentage points of our total revenues should come from ad revenues. Now we increased in Q4 to 16% from 14%, so it's increasing percentagewise, but we had 19% just over a year ago. I think we can do better there, and Philipp will elaborate more on how you can hybrid model to optimize your revenue stream.
These are three things that I think that we can do better, and we will do better, and we have activities in place in order to improve ourselves. However, I think we did succeed fairly well in some things. We significantly outgrew the tough market for mobile games in 2022. We generated very strong cash flow despite that we have elevated our product investments, which Andreas will go into depth when he dissects the Stillfront financials in a few minutes. We also, which is one of our key competitive advantages, we did maintain our strict payback on marketing, the strict 180 days return on ad spend, despite the challenges with marketing and IDFA and other things.
Through our diversification with many products in many territories, working with many different channels and a very good, fantastic people working with marketing within our group, we deployed more money and maintained that strict payback time. Also, we have added 40 new titles into our active portfolio. We will look into those as well, eight of those organic. Not the least, as you can easily see from the phase that we're entering, we have invested in the Stillops platform, and we will continue to invest. It's a quite extensive work behind what we should develop and in what way and in what sequence, and that analysis will Amy present more in depth later as well.
I think we are working very hard and disciplined to make the Stillops platform better and better and better, and we should refine it and refine it and refine it over and over again because that is a core element in our successful Stillfront four the fourth phase. Franchises. Successful game franchises are very important for us for continued growth and profitability. We have, as I said and explained why it's so key, we have 78 different products in our product portfolio, which is key for having a very good allocation of capital for UA. We also have these products are to a large extent part of our franchises. We have in total 12 franchises that had revenues over 200 million SEK last year, whereof 5 had revenues exceeding 500 million SEK.
This is important because when you have a franchise, you have a large base of users that really enjoy that. They spend a lot of time, they build relationships within the franchise, and they're very hungry for updates and things that comes within the franchise, and we can do a lot of things around our franchise. It's more or less recurring revenues in many of our franchises. With focusing our capital allocation for product investments to a large extent to our franchises, we are convinced that we will increase our return on investment, basically improve our capital allocation results for product development. That is a key theme here, Philipp will go deeper into that as well, and I think not only Philipp, actually.
Franchises is a key thing in Stillfront, and it will be a very important thing for us to improve our performance for the next coming decade or two. The core strategy that we have, now we formulate a core strategy following. We connect and empower the best games team around the world through our unique Stillops platform. This is important. As you can see, we elevate the Stillops to be core of our core strategy. It hasn't been previously. Now it's the absolutely key to create the synergies, to create the leverage that I was talking about a few minutes ago. That is part of that.
We also take the talent, the large pool of talents that we have in our game teams and in our studios to be also the core of our core strategy. That is different from previously when we focused more on products. Again, Stillops will be the way that we will how we should receive or get to these results. This is how we illustrate the Stillops platform. It contains of three parts. We have the collabs parts, which is more the processes of how to collaborate, to develop jointly co-development projects on localization and many other areas, which we will, as I said, go further into with Amy. We have the hubs which is more about people.
When we have critical areas of expertise where we can focus and support in a better way the game teams and the studios by having hubs close to them or serving them a different way so that they can keep up the speed and not being slowed down in certain areas or just delivering higher results. That is hubs. We have tech and data tools in different ways that also make our increase our efficiency both in the cost side but also like in IT security and different things. Again, Amy will go further into the different elements of this, but this is how we represent the Stillops platform.
This is a slide, yes, but this is working in practice, and it's delivering synergies every single day, and these synergies that we deliver are increasing not only linearly with the number of studios we are, not only linearly with the number of game teams, it's actually increasing progressively with the number of studios and the number of game teams we have. Hence, scale. We needed scale before we go into the Synergy Phase and the Leverage Phase as I elaborated on. We will continue to grow our margins, and we will continue with strong cash generation to deliver value for our shareholders. This is important. We should leverage both the diversification so that we can continue to be leading on return on ad spend, so we can continue to work with our very strict return on ad spend.
You need the diversification in the way that I have described. At the same time, we need on the other axis our franchises, which enables us to focus the capital allocation not for UA, but for product development. Both of these should coexist in the way that we and they are already, but we are putting more efforts into that as we speak and for the coming years. We should further invest and develop our Stillops platform, so it's even more efficient in supporting our studios and our great talent teams out there. More synergy projects, more hands-on support, et cetera. Outcome of this should be focus on continued strong cash flow generation.
We have, as you might have noticed, we announced this morning that we will have a buyback program that we have launched, which also shows that we are confident in the cash generation that we have already today, but we have an ambition to improve that further, which Andreas will go into detail in a few minutes. As I said in the beginning, one of the good things when we be very disciplined about the different phases, you're developing the company within is that you get your priorities right, and your strategies are getting refined for that very specific phase. Hence, it's very natural that we have new financial targets for Stillfront Four Phase. Here they are. They were also announced this morning. First, we should excuse me. We should consistently outgrow organically the addressed market that we have.
We define our addressed market the way that it's the global mobile market excluding China. That is the number 1 growth target. We also think that as an important side note, we should continue to look out for value accretive in a selective way M&A. I don't foresee that we will do much M&A this year, or we must wait until the market is right for it. It is still a core element in developing Stillfront to further levels. That is the revenue part. We have the new profitability target is what we call cash EBITDA, which is EBITDA reduced by the CapEx we have. We have an ambition that should be in the range of 26%-29% annually again.
The third target is that we more or less keep our leverage ratio, but we have a new definition, so we include the short-term cash earn-outs to be paid, and then we increase it from the 1.5 without earn-outs is still there, but then it becomes that it should be below 2.0. These are the financial target that fits the priorities, the strategies, and the aim and what we would like to do in Stillfront for the Synergy Phase, the Leverage Phase, and this will be targets until further notice. Thank you for listening and stay tuned for more insights and deep dives during the day on how we should achieve these results.
We are ahead of time already, so we're ahead of the game, so that's good. Thank you, Jörgen, for that introduction of the new phase of Stillfront that we're entering to now, the synergy phase. One where we'll become the best games company in the world by focusing on efficiency, adding synergies as a fourth pillar to our DNA alongside entrepreneurship, scale, and structure. We will continue to build up the Stillops platforms that we give our studios the tools they need to consistently outperform our addressable games market. Thank you, Jörgen. I'm happy to now welcome our CFO, Andreas Uddman, who will share a breakdown of our financials. Thank you.
Thank you, Alexis. Good afternoon, everyone. I will use this session to do a breakdown of the historical financials but also looking a bit ahead in terms of the financial targets. Firstly, in terms of look back, we have scaled to a global games company. Going back three years to 2019, our revenues have grown 3.6 times to over SEK 7 billion. Our adjusted EBIT grew 3.1 times to SEK 2 billion. Our cash flow, which has been something we've been focusing on, has been growing 4.2 times to over SEK 2 billion, and this is cash flow from operations. More importantly, we have added 10 studios, and with the studios, a set of very highly talented game developers and people joining the group.
With the studios and with this growth, it also comes that we added new product areas. We added casual and mashup, which we didn't have in 2019. We also complemented our existing strategy portfolio during this time. We also entered new geographies. India, we have entered, a highly growing market. Japan, which is a massive market which we entered just a year ago. And we also increased our North American footprint, as well as continued our expansion in the MENA region, which Mo will talk a bit more in depth about. Looking back, we have scaled this company, and that scale in terms of not just the number of studios but also financially allows us to move into this, to the next phase.
We have some more things to work with to create these Synergies. Diversification. We talk about this a lot. It's very important. Stillfront has always been run looking at a portfolio. We have a portfolio of games, we have a portfolio of studios, this has enabled us to be very efficient in our capital allocation in terms of user acquisition. Just to demonstrate a bit how this looks at a group level, the top graph here is the adjusted EBITDA margin per studio for the full year of 2022. We have some studios that have a margin which is a lot higher than the group's average of 2022 of 37%, these are either in major game franchises, as Jörgen was talking about, or in niche products.
We also have some studios which are in a growth phase. The interesting thing is that on the group level, we have 12 studios that are above the group average, and we have 10 that are in a different phase, which are below. This shift, this is a dynamic shift going through either from games but also in studios. It's also, of course, these types of games that are in mature that helps to finance the growth studios. We have reached a good balance. Sorry. Pressed the button too quick there. To deep dive with it, what does this mean then? In the bars, in the bottom here, we have studios that's in scale phase.
They grew 110% net revenues 2021 versus 2022. We allow them, through our capital allocation, to spend a significant portion of that into UA because they're fueling that growth. That leads that studio has a lower EBIT. We have a studio here as an example, which has a 10% growth. 10% growth is stronger than the group, and especially a lot stronger than the market in 2022. They're spending approximately 35% of their net revenues into UA. Their EBITDA is slightly below the group's average, but they're contributing to top-line growth. We have the mature phase. Slightly declining, 5% in this example.
They're still spending some UA, working a lot with live ops, which is one of our key levers as well, not just UA, and they're delivering a result of 50% EBITDA margin. I think it's also important that a studio can have different games in different phases. We show this as an aggregated view of all our games. A lot of studios work with games in different phases. You can also move in and out of these phases on a very rapid pace. It can go from one quarter to another, or it can go from one year to another. It's not like a studio stays here. It's all about keeping the balance in the portfolio as a whole. Looking a bit ahead, we have set new profitability targets. What is it?
It is cash EBITDA. Cash EBITDA is basically taking our adjusted EBITDA as we have reported it and reducing the investment in products. We set that to 26-29 percentage points. We believe this is a very good measure on the underlying value creation of the business, as this is very close to the cash flow the business generates, and it also captures the fact that you have to invest as a gaming company. Where do we stand today? We had after intentionally investing a lot more in product development in the last 18 months, we ended the year with 22.7% for the full year. Also, it's very important that during the few years in a quarter, et cetera, things will fluctuate.
We have different seasonalities in our business, so it will fluctuate between quarters, and we will measure this on a full year basis. This is something that we have amended, and we also have a clear path how we return to these kinds of levels of historical profitability, because we've been there, but we made intentional choices to do more investments in the last year. What is this clear path? This is an illustrative example, and it should not be seen as a, as a guidance as such. If we would take the EBITDA, adjusted EBITDA, EBITDAC or cash EBITDA for 2022, what are we actually working on? I think you will get more insights both from Philipp, from the studios, but also from Amy. What are we working on?
These are practical things that we're actually working on. We talked about advertising revenues. We want the advertising revenues to go up to the high teens. We are working actively deploying the expertise from studios that are very knowledgeable about this. We brought them in and deploying that to studios that don't monetize either at all in terms of advertising revenues, or they don't have the expertise. That's a clear synergy that we are working on. If, for example, our advertising revenues, which was 15.5% of our total revenue in 2022, would have been the same as it was in Q4 2021 of 8.5%, we would have improved the EBITDAc margin with 1% point. These are things that we're working on very actively. Third-party publishing.
We have some studios that are working with third-party publishing, not something we're gonna stop doing, but using our franchises, using our games that we work, taking them through different regions, reskinning them, that is something that we will focus much more on. Of course, instead of paying royalties to a third party, you pay them in-house. UAC in this example, we leave as it is. We are maintaining our 180 days payback requirements, we don't believe that we should either reduce that or increase that. That in this example is left as it is. We go to what I think the scale phase also brings. We have got something that Stillfront didn't have three years ago. We have purchasing power. We can negotiate with our suppliers; we can standardize things.
We can go as one group. That we have done quite little of because we were in a different phase. That is natural when you become big as a group to actually do that. It might also that we need to standardize things. When you bring a set of studios into play, you might have these duplicate systems doing the same things. Of course, this is also something that it doesn't happen overnight, but these are clear specific things that we have identified and are working on. The third one is, of course, product development. We entered into a high investment pace, so we had 14.1% in the full year of 2022. In Q4, we had 13.3%.
It declined a bit in relation to revenues. I think if we just reduce that number to the same level we have had in 2021, when it was 11.4% of revenues, that would be a 3% point lower investment pace. That doesn't mean we would actually invest less. If we would invest 11% of our revenues into product development, it would be almost SEK 800 million. It's actually a bigger investment than we had just in 2021 in terms of absolute terms. It's about how do we capital allocate, how do we put the money where we believe it's gonna yield the best, and especially in our tried franchises. All these improvements, it's not something else, just gonna switch off the button, and we're gonna stop investing tomorrow, and we're gonna move everything.
It's important to remember that this will have a gradual impact. We have a clear plan how to achieve it, but it will not happen overnight, and it will not fully come through in our financials during 2023. The key takeaway here is that there is a path. Cash flow. Jörgen talked about this as well. We always been very focused on cash flow. When you build a business, cash is king. Something how we have focused since the start of this company, and we have grown just since 2019, our free cash flow. Our cash flow after investing in product development with 4.6 times. This has been able to support our M&A agenda and our scaling phase.
Also to point out that this scaling phase and the M&A agenda, we have bought companies with earn-out. Even so, even if we have earn-outs on our balance sheet, and we like to pay earn-outs, we still have a free cash flow after this. After investing equity last year, SEK 1 billion almost in product development, we still had enough cash flow left to fund the earn-out. Over time, as the M&A activity is deemed to be a bit lower in 2022, it will be less earn-outs to finance. Our focus on profitability and cash flow generations will continue and will be growing going forward. We updated our leverage targets, but we didn't date them down much, to be honest. We still remain a conservative approach to leverage. We like debt.
It's a good mixture of financing portfolio. What we did is we added in the cash portion of the earn-outs for the next 12 months in the net debt de-definition. Why did we do that? Well, we think that captured the actual payment obligations that cash flow generates, just about clarity. Also, that some of our covenants towards our financing institutions are actually governed like that. They also see it this way, something we've been tracking internally, naturally. But it actually don't increase the leverage by the fact that we're then adding it to two. It's just the relationship between the two of them. We remain a conservative approach to that and believe that that better reflects the nature of our business.
In terms of our maturity profile, something we work tactically on in terms of our debt portfolio, that is also very important when you talk about conservative leverage because if you have all your maturities at once, and you can have a low leverage, you're not as conservative. We have worked tactically, and just in the last quarter, we doubled our time to maturity on our to over three years on our debt portfolio. We have a good spread, but we also have a good ability because we still have untapped credit facilities. We have almost SEK 2.3 billion of facilities we don't use. We also include our cash generation from the business.
With this, and a bit to conclude, we have today, where we start off today, we have a strong balance sheet. We come from a strong cash flow generative business, and this creates flexibility. It creates flexibility to enter into the synergy phase, but it also creates flexibility to be on the M&A market when that market comes in play again. In addition to that, our increased focus on capital allocation, not just in UA and user acquisition, also in actually the product investment side, that will also improve our ability to generate profitability and cash flow in the future. With that said, I will hand back to Alexis and thank you for today.
Thank you, Andreas. Thank you very much for this deep dive into the Stillfront financials, a profitable and growing business. I think you showed very well how our diversified portfolio allows us to be super-efficient with our capital allocation of user acquisition budgets, and that allows us to achieve a healthy balance between growth and cash flow that we constantly are discussing. Going forward, we'll be able to leverage our size, synergies, and investment focus on core franchises, Philipp will tell us more about it, to further increase our profitability in 2023. The large increase in our cash flow generation the past few years, I think speaks for itself in terms of the strong financial basis we have. Thank you very much, Andreas. I'm happy to now welcome Sofia Wretman.
She's the exec VP and head of Communication & Sustainability, and she will go over how we are building a sustainable gaming business. Sofia.
Hi, all. Thanks for listening. I'm here today to share a brief update on the work that we do on sustainability, also for us, how we try to strive to build this a sustainable gaming business. The world loves to play digital games. 3.2 billion people play digital games globally. Out of those, 2.7 billion plays on their mobile. That's a severe audience, a diverse audience, and a big audience. The average age of a gamer today is 33 years old, and female gamers make up around half of the gaming population. While digital gaming is a rather young industry, we can see that this is already a habit that many has in their everyday lives.
The Generation Z and Generation Alpha already turn to games as their primary source of entertainment and socializing. At Stillfront today, we have 60 million active players, so our responsibility is big. We need to secure that the content that we have and that we publish and what we produce is in accordance with our values. Therefore, the importance for us is to build in sustainability in our business. Our guiding star and our mission is to make a positive impact in our gamers' everyday lives. Gaming needs to be a place where everyone feels welcome, included, and that might be easier said than done. How do we make this a priority for all 23 studios?
For us, it requires a framework of policies, clear rule books that builds ESG into the processes. Jörgen has often said to us that, yeah, the modern company or a modern company does not push from the top down. We are raised in a organization, you know, where we work together, both from the studio level and also from the group. I think most of our efforts from the group should be how to support our studios. To better support our studios in ESG and sustainability, we have implemented a playbook. A playbook that contains checklists, activity plans, but it also contains a roadmap showing the maturity of a studio within ESG. Each studio can see how they were , you know, on what maturity level they are at.
I think that, you know, when we last year implemented an online tool for all the studios to report data in all the different ESG pillars, they can also start to benchmark internally and see how they progress yearly easier on a dashboard. What kind of achievements have we produced until today? If we start off by looking at the climate area, we started back in 2019, and we focused on looking at how should we how should we collect data on our emissions, our greenhouse gas emissions. Since then, we have yearly gradually collected better and better data quality.
We have already from the beginning said that we need to focus on both Scope 1 and 2, which is our own emissions, but also the emissions that derive from when our gamers play our games. We started also already from 2019 to offset for the emissions that derive from our value chain. We have been a climate neutral company since then. Last year, we decided in the climate area that we now have the processes and the tools are ready, so we should start to reduce our emissions instead. That is very much thanks to our studios. We have a climate forum that is up and running in the group and with all the 23 studios together joining in.
I think that when we now have everything in place, we can start to reduce. At the end of last year, we committed to Science Based Targets initiative, so we will have a reduction place soon in place in line with the Paris Agreement. The climate area is, of course, more or less a hygiene factor since we are rather light on the emissions that derive from our industry. The key for us is of course the social responsibility that we have, both in terms of our users, our players, but also in terms of the group with all the with so many talents.
We have more than 1,500 talents in the group right now, and they belong to a smaller studio, differs a little bit between the studio sizes, but we also have a group perspective to emphasize. What we have realized during the last couple of years is that there are so many things on the group level that we would like to achieve. We have a new forum in place since last year that we call Living Our Values Forum. It contains all our studios' HR managers, and we meet regularly. We have extended the scope of data collection and what we do in the HR area.
This is all to foresee that we dig deeper into, you know, how our healthy and diverse teams can further become better and how we can progress in employee satisfaction and well-being. Also, of course, it is to further look into our whole talent management program. The gaming market and the gaming industry is a global market in terms of talents, so this is key for us. Just to mention a couple of more important ones for us. As back in 2020, we implemented our Fair Play Declaration, which is all about responsible play. Responsible play, responsible marketing. This is a tool that our CPO, Philipp Knust, works with the studios on a regular basis in the business reviews, in the business meetings, in game development processes.
We have this as a base for our values and how we conduct business. Just to finalize, I think that what is also important to mention is the whole extensive program that we have in place in terms of data protection and data privacy. This is, of course, key for our studios and for us on a group level. If we look ahead, we have so much more to do, and there's just we have only scratched the surface of what we can do. I just want to highlight a couple of areas that we will focus on for this year. We will continue strengthening our data privacy controls throughout the group. We will even emphasize more focus on the talent management program, and we will implement the reduction plan in accordance with Science Based Targets initiative.
That was more or less, only, the only thing I wanted to share with you today. In April, we will have our sustainability report being published. Just reach out for an update and specific meetings if you want. Thank you.
Thank you, Sofia.
Thank you.
Thank you very much, for going over how we're building a sustainable gaming business for our millions of gamers and aim to have a positive impact, on their everyday lives. Since 2019, we've definitely achieved consistent progress in our sustainability goals for environmental impact, social diversity, and governance.
Mm-hmm.
Our sustainability roadmap is very clear. As you know, and as you've said, and as I can witness, it's fully embraced by the studios.
Mm-hmm
... who really support all these initiatives, which is amazing to see.
Yeah.
We all know, you know, being a purpose-driven company is not just good, it makes good business sense.
Agreed.
This is also confirmed by the several peers and partners.
Yes
... collaborations that we have in this front. I know you have many collaborations on that front. Thank you.
Yeah. Thank you.
Thank you, Sofia.
Thank you.
Excellent. I'm happy to now welcome Amy. She's our SVP of Operations and Synergies, and she will go over how we are leveraging our Stillops platform to level up synergies Phase Four. Amy, please.
Thank you, Alexis. Hello, everyone. I am very excited to be here with you today to talk about Stillfront's latest efforts around synergy. First, I'd like to introduce myself. By the way, I think this image of myself doesn't do justice to how I actually look. I won't say better looking, but much more colorful in person. My experience in the gaming industry began at a time when free-to-play was still somewhat new in the U.S. I started out in corporate strategy and eventually performance marketing at Nexon. I later joined Disney Interactive, where I led live ops for Disney's co-developed free-to-play mobile titles, such as Frozen Free Fall. More recently, prior to joining Stillfront, I was at Blizzard Entertainment as head of product management for mobile titles, where I built and led product management group for mobile titles such as Diablo Immortal.
I was busy working with an extremely talented group of people trying to figure out how to monetize responsibly and how to go to market successfully. Any Diablo fans out there? Raise your hand. Well, I can't see you, but I'd like to think that there was at least one hand raised. At Blizzard, I also drove the efforts to level up its mobile capability efforts across game development to publishing, and I led a company-wide effort to assess its mobile capabilities. Since joining Stillfront in November 2021, I have been focused on two key responsibilities. First, leading the business operations for our North American studios and providing support and governance. Second, maximizing the value of synergy at Stillfront. On that note, today I'm here to talk about our latest efforts around synergy. Next slide, please.
At Stillfront, we have been very focused on leveling up Stillops, which is our key business platform and our core underlying asset that powers up our studio's capabilities. As the market continues to evolve, taking a disciplined and structured approach to leveling up Stillops and operationalizing it ensures that we are able to make clear targeted synergy investments so that we are well-positioned for success. As a first step in our disciplined approach, we conducted a comprehensive capabilities assessment across Stillfront Studios to determine their key strengths and gaps, and the approach to closing the gaps. The assessment result helped set clear priorities for 2023 to ensure that an appropriate level and type of investments were being made to level up Stillops.
We also defined clear success metrics to measure the impact of synergy, which is being rigorously tracked, and we will be communicating these metrics out on a regular basis. Next slide. Now this slide looks a little bit overwhelming, but please rest assured I won't be going into every one of these 50 capabilities. I just wanted to give you a glimpse under the hood so you can get a sense of the kind of capabilities that the studios assessed. The assessment looked at the adequacy of the capabilities from a score of one to four. What's one being missing and four being world-class. The studios were also asked to indicate how critical they deem these capabilities to be for their respective studio and their level of interest and collaboration.
These last two points, criticality and collaboration, were very important for us to understand because at the end of the day, we want to make sure that we are prioritizing our key synergy initiatives and investments in the areas that would provide maximum value and impact for the studios. What were the results? Next slide, please. The results showed that we are strong in user acquisition and live ops, and we are doubling down on our investments in these areas to continue to be effective and impactful. The result also showed that we have an opportunity to improve our capital allocation for new game development. Now, this goes hand in hand with our 2023 focus on market validation, on soft launch testing strategy, and go-to-market capabilities to ensure that we continue to successfully develop and launch games that resonate strongly with our players.
We see that even with the biggest developers, they struggle to go to market successfully, and we are constantly challenging ourselves to be best positioned for success in a continuously changing market landscape. Furthermore, we are also leveling up our capabilities around in-game advertisements and cross-promotions. Now, having these clearly defined, prioritized set of key capabilities has allowed us to be disciplined and focused in determining the appropriate level and type of investments in Stillops. Most important of all, we are being very intentional about the specific investments we are making in Stillops to best support the prioritized capabilities for 2023 so that they translate into measurable impact in terms of revenue and cost savings. Next slide, please. Now here is a high-level snapshot of the kinds of investments we are making to continue leveling up Stillops.
On the collaboration side, we're continuing to be deliberate about organizing knowledge-sharing sessions among our studios. A good example of this is actually the Live Ops Summit, where we will be sharing key product insights and live ops insights with the ultimate goal of translating these learnings into something that's actionable and impact driving across Stillfront studios. We are also doubling down our efforts to push for co-development and expanding our franchises across our studios and regions which fill up our CPO. We'll talk about more later on. On the hub side, our hubs offer productized services with clear service level agreements and high ease of use. These hubs are also continuously expanding their services to ensure that they can support the needs of the studios. As an example, the global marketing hub is comprised of veteran marketing experts and offer mature productized services around paid user acquisition.
It now has expanded its services to include product marketing and go-to-market related capabilities. I'd like to point out that this hub approach is our key competitive ad-advantage, as it also allows us to draw key insights across the studios. It helps us connect the dots, gather trends, and share key learnings across the studios that the other studios can then take and apply, thereby maximizing the value and impact. In 2023, we're also investing to further grow additional hubs. With the in-game advertisement hubs, we are leveraging an existing group of experts within Stillfront to broaden the reach and provide concrete support. With the talent and recruiting hub, we're identifying ways to be efficient and strategic in recruiting and retaining talent. Last but not least, with the art hub, we are leveraging our existing group of talent to produce art for in-game and UA.
With tech and data, we are making significant strides on the data platform side to standardize and share gaming UA data. We also have been able to make substantial cost savings by bringing together individual-level studio deals and tying them into group-level enterprise solutions. As you can see, we have been very busy throughout 2022. We are confident that our structured and disciplined approach to leveling up Stillops sets us up for success in 2023. Thank you, everyone.
Thank you, Amy. Thank you very much for taking us over how we are leveraging and scaling up Stillops to level op synergies. This is an area where I know you have a lot of experience and I know the preparation work done in 2022 is going to be key to delivery of increased synergies across our studios in 2023, which is the 4th pillar in this 4th Phase of Stillfront. Thank you, Amy, and team for the hard work there. Thank you very much. I'm happy to now welcome Rex, co-founder and president of 6waves, a studio that joined the Stillfront family in February of 2022. Hey, Rex, good to see you.
Hey, Alexis. Good to see you too.
How's everything over there?
It's early, very busy, yeah, a lot of stuff going on.
Excellent. Listen, Rex, why don't you start with a quick intro of 6waves, and then we'll do some Q&A?
Sure. Definitely. Let's jump into the first slide. I will be here to tell you guys a little bit more about 6waves. Again, I'm Rex. I'm the president and co-founder of 6waves. 6waves is a leading mobile gaming publishers in Asia. In particular, we focus in Japan, which is a very lucrative market that I will tell you guys a little bit more about. From a operation perspective, we have actually offices across Asia. Starting out with our Tokyo office, we have like 25 headcounts, they focus on publishing and operation in Japan as well as, you know, community management and customer support. That's our team in Japan. In Beijing is where our gaming development studio lies.
This is actually responsible for our in-house development, and right now, the team is actually working on some collaboration projects within Stillfront, which I'll tell you guys a bit more about. Also in Beijing is our business development team that actually help us source game from different parts of China for second-party and third-party publishing. Finally, is Hong Kong, which is where our headquarters is. This is actually where, you know, we do worldwide publishing, operation support, and also business support. We have 33 headcounts there. In total, we have 114 headcounts in Asia working on different projects spanning first-party, second-party, and third-party games. Let's go to the next slide. Let me talk a little bit more about the genre that we focus in.
These are, on this slide is our top games in Japan. These are what we call 4X strategy games, which are very highly engaging, and they have a super long product life cycle. That's why we like it. We call them our forever franchises. Something special about this is aside from the 4X strategy genre, they were using like the Three Kingdoms and also Sengoku themes. These are, you know, like, based on historical characters in China and Japan, and they are almost like a free public domain IP that works really well in Japan. It help us to, like, lower our user acquisition costs and also help us, you know, like, connect with our core target audience, which tend to be, you know, like, elder audience of age between 30 and 55. Okay, next slide.
Okay, here is just a quick preview of, you know, one of the collaboration projects that we been working on with another franchise within Stillfront. There is a game called Home Design Makeover by a studio named Storm8. We've been eyeing this game, and we think that it's actually really ripe for a remake in Asia. Why I call it a remake, it's not just purely localizing and translating the game for, you know, Asia and Japan. We're actually changing out everything within the game, you know, like from the characters, making them more like Japanese anime style, to high saturation graphics which resonate better with, like, the Asian audience, all the way down to, like, the tile, you know, making them super cute and, you know, like, the color text.
Basically, it's a remake of the entire game, using, you know, Storm8 engine. We're looking forward to launching this game in Q2 soon. Okay. This is just a quick, you know, like, overview of 6waves and what we're currently working on. Maybe I'll turn this back to Alexis, and we can do a little bit more of deep dive about the Asian market and 6waves.
Thank you very much, Rex. That was great. Let's deep dive into a few things. Could you please maybe elaborate on the mobile games' publishing landscape in Japan?
Yeah. Just to give you guys a little bit more of context, right? In terms of, like, mobile gaming revenue, Japan is actually ranked 3 in the world, right behind China and a close second to the U.S. You know, in terms of, like, population, like, Japan is probably like one-third of the U.S. What it has going is actually because of the deep gaming culture, you know, like, the players are really willing to spend in the game. The average revenue per user is almost like 2-3x of that, you know, compared to like Western players. That's why it is always like a very close second to the U.S. in terms of, like, revenue generated.
The majority of the games in Japan is actually some variant of RPG games, which are loved by the Japanese players. They are being produced by, you know, like, big Japanese publishers, and oftentimes they have like a tie-in with a massive IP, like a Dragon Ball or like a One Piece. For us, where we see the opportunity lie is not to really compete with these big Japanese publishers on, you know, like, IP, you know, RPG type style games. We're able to identify, you know, like, the 4X strategy genre as a niche genre that, you know, the Japanese publishers are not good at, but the Chinese developers are very good at. We're able to double down on the strategy to bring 4X strategy games into Japan.
Yeah. Excellent. Obviously, we have many studios in the group who are also very good at strategy genre, and we have other genres that we can bring to you, but we'll talk about that later.
Sure.
As a second question, can you please tell us more about the genres that you are present in and what are challenges and opportunities in the Japanese market at the moment?
Yeah, sure. Yeah, again, the genre is 4X strategy, with the tie-in of like a Three Kingdoms or Sengoku themes, which we feel very special about because, like, we've been doing this and doubling down on this strategy for a while now. It's almost like the 6waves brand. A lot of our players, they know us for, Three Kingdoms, 4X strategy games. This is working out really well for us. In terms of challenge, I'm pretty sure there's plenty of challenge always like with the mobile gaming, like app discovery, UA, you know, like content and all that, but maybe I'll talk a little bit something specific to Asia.
One of the things that has happened, you know, throughout most of 2021 and into 2022, is that the Chinese government has decided to freeze approval for all new games in China. Because of that, a lot of projects were kind of cut due to downsizing, even from tier one, you know, publishers like Tencent or NetEase. They were reducing the number of projects that they're working on. Because they were not able to get a lot of organic growth in China via new games, many of these developers, they choose to pivot and self-publish their own game in other markets like Japan, Korea, U.S., and, you know, the rest of the world.
As a result, you know, like the, you know, like the pool of, you know, games to choose from a publishing perspective, have shrunk during those two years. It was more difficult for us to find high quality games during that period of time.
Yeah.
So-
... changed quite radically, right?
Yeah, maybe I'll talk about kind of like the flip side, like the opportunity side of things is, since like Q4 of 2022, the Chinese government again decided to start opening things up and start granting new licenses, going into 2023 as well. We are already seeing, you know, like many more new projects that are underway that are very compelling. You know, like the same developers also pivoted back to focus on the Chinese market, which gives more opportunity for us to, like publish their game for overseas. I think on top of that, one thing that I want to point out from a opportunity perspective is also like the collaboration with, you know, like Stillfront existing games.
We are, you know, because of that, we're also less reliant on just like the Chinese market and, you know, like the game that we can source from them, we can now start sourcing game from, you know, like any one of the 22 other studio that is part of the Stillfront Group.
I mean, it's always a pleasure now to go over the pipeline with you because now you have the embarrassment of choice of all these excellent, you know, not only external games but also internal games and to choose from. It's always. I know a lot of studios are pitching you to try and enter Japan.
Yeah
... you get to choose, so that's great.
That's correct.
If we look into, more into Japan and more like, you know, the marketing side of things, because I was always surprised by how different it is to market a game in Japan. Which marketing channels are important in Japan and what are your strengths there?
Japan is actually literally very different than the rest of the world and even the rest of Asia. Even before we start doing what we call traditional user acquisition, we start with, you know, like pre-launch. Pre-registration, a lot of like PR on, you know, like local gaming website, pre-registration website and, you know, even like gaming magazine, which is still popular in Japan. With this, one of our top games called Shishinogotoku, which is a Sengoku 4X strategy game, we're able to garner 120,000 pre-registration prior to the game's launch. That's like probably 4 weeks before the game's launch. As a result, you know, we're able to capture the golden cohort before the game is even launched and able to populate, you know, like the...
When the game is launched, we're able to populate the initial servers to ensure a very healthy ecosystem within the game. Going into the actual kind of like day-to-day UA, in a traditional maybe like western side of the world, you know, like Facebook or Google UAC would be kind of like the kind of like the go-to channels where you capture a lot of, you know, your UA traffic. For Japan, that's probably represent less than 30% of the ads, of the marketing channel that we use. In particular, Facebook is not as popular in Japan. It represents only maybe like 5%-10% of our UA, you know, like channels. We rely a lot on local ad networks like NAN, like Moat, like SOCKS.
There's like probably 20-30 different mores that we use, you know, like, for the rest of the 70% of the marketing channels. That's what we need to do in order to scale a game in Japan.
Yeah. It takes years to learn how to work with those networks in the proper way and build the relationships and all that. Yeah, absolutely.
It does. That's correct.
And-
Yeah.
Yeah, go ahead.
Go ahead. I think you asked about like our strength in Japan. To boil it all down, I think it's just like our extensive knowledge of the Japanese market, like starting from like sourcing like the right game with a good product market fit, as I talked about earlier. You know, like 4X strategy, you know, has become a very good product market fit for Japan. Going to, you know, like the day-to-day operations and live ops, that's super important for Japan as well because a Japanese player has a super high consumption. To give you example, you know, like our games, people spend around 120 minutes so, two hours per day playing our games.
One of the key reasons is because like the Japanese people, they don't drive, they take the train, they commute to work, and the train take a long time. That's why people play, you know, like a long time, you know, like with games while they commute. As a result, our content track meet was like crazy, and our live ops schedule is actually very frequent. We just need a lot of like new features and a lot of like live ops events to keep our players engaged.
Finally, I kinda like covered a bit on local marketing tactics already, so from pre-registration to knowing what, you know, ad networks to use, and it's almost like an art in terms of like creating the creatives that would actually attract, you know, Japanese players, like to these games.
Absolutely. Yeah.
Yeah. Finally, I also want to add, you know, like before we're really leveraging most of this, you know, like in-house, like for 6waves, right? Now that we're part of like the Stillfront Group, you know, we are start leveraging, you know, our knowledge for the Japanese market and Asia in general to help out our studio within Stillfront. In particular, I think one to name is a studio called Sandbox. They have a game called Albion Online that we actually help them conduct, you know, a whole bunch of like test campaign in Japan, and we're very glad to see that they are finally bringing their game to Asia.
Yeah, no, absolutely. I think I really invite everyone who's watching this after to go on YouTube and watch the Albion Online Coming to Asia trailer. I think it's about 1.2 million views on YouTube already, so that's a pretty good work and pretty good help that you've done there. Thank you.
Sure.
Actually double-clicking on that point, you know, what opportunities do you see in leveraging the group's assets in Japan? If we go a bit deeper into that.
Well, currently we're working on like three different inter-studio projects. I think one of the key things is because like a lot of like the Stillfront Studio is actually very good at actual Western genre, there is not a lot of actually good Western game in the Japanese market. We really see that as a good opportunity to bring some of these genres , such as, you know, Puzzle & Decorate, you know, like into the Japanese market and also like Asia in general.
I think like with this asset and with like a lot of the proven game franchise within Stillfront, one of the things is actually we can reduce like our time to the market, which is really hugely important for any game to have like a first-mover advantage in any given market. It also requires less resources and headcount because, you know, a lot of the gaming engine is built out, so we can actually work on like multiple collaboration at the same time. Finally, I think this is very important, too, is because like the game franchise has been proven and battle tested by players, there's less critical bugs and issue that we have to deal with.
Yeah, no, absolutely. I mean, having built games myself, as you know, and published them, you know, it's a massive advantage. And of course, being part of the same family, you know, the exchange of information and KPIs and all that is super fluid. It's a really great opportunity. We still have a minute, let's just wing it in terms of, you know, what's your experience from the first year as part of Stillfront? What would you say is?
Uh-
How does it feel?
I feel very busy, but I would say productive at the same time as I just talk about, we are doing three inter-studio collaboration already, so time fly by very quickly. It has been a year already, you know, just super busy. I think at the same time, I want to add, you know, like there's actually good camaraderie, you know, like with our peer studio. You know, mobile gaming is difficult. You know, like before, you know, just like me and my team, we were facing all the challenges alone and trying to figure everything out, you know, like with like trial and error.
Nowadays, I think being part of Stillfront, you know, like as one of the 23 other studios, I can just ask, you know, like about level design, live ops, ad monetization, IDFA, and get very timely response, you know, like from a peer studio with like domain expertise. I think, it's quite reassuring to be not alone, and it has been a very good experience.
Thank you, Rex. I confirm you are not alone. Thank you very much for this.
Yeah. My pleasure.
Thanks for this deep dive into 6waves. I'm personally, as you know, very excited about what you can do to expand some of our Stillfront franchises into the Japanese market and of course, the synergies, the positive growth, and margin impact this can create, so thank you very much for all that. I'm now happy to welcome our CPO, Philipp Knust, who will go over how we are outgrowing a challenging market. Philipp.
I will start my presentation with looking back at the games market in 2022. I think it's well known that the market was under heavy pressure due to the comparison to the tough boosted COVID years. And in addition, we have seen a generally challenging market environment. I think this good visible when we look at the chart on the right side where you can see Stillfront's organic growth in red and our addressed market in black. You can see how Stillfront outperformed the market throughout the year, and especially in the last three quarters, there was a significant gap between us and our peers.
One of the main reasons for this is our strength in live operations, especially in the strategy product area, but across all our product areas equally. This is about being able to activate our players, re-engage them, monetize them, and being able to compensate for potential weakness in consumer spending due to the rise, right, live ops tactics, boosted by the Stellar platform. As part of the Stellar platform, we have launched and established our Live Ops Summit, which was an in-person event, where we are getting more than 40 monetization live op experts from all around the world in one room to discuss how do we tackle the strategic market environment, how do we raise the bar for live operations now and going forward? This is an ongoing effort with the next Live Ops Summit already being in March.
We've also seen a particular challenging ad monetization environment, which we could partly compensate by further boosting our hybrid monetization. I will talk more about this in one of the coming slides. Lastly, I want to also point out how our investment in new games delivered significant growth of revenue coming from these new games, further delivering and contributing to the success story. Looking ahead, we expect at least the first half of 2023 to remain tough due to this tough market environment. At the same time, our fundamentals will continue to be strong and maintain to be an edge, allowing us to continue outperforming our peers in the long run. The first deep dive I want to do is about performance marketing.
We need to keep in mind that last year was the first post-pandemic year with no lockdowns in our target regions. We have seen high spring and summer seasonality, at least as high it was prior to the COVID years. In addition, there was the FIFA World Cup event in fall, which is very unusually because typical such long sport events are in summer, where we have low seasonality anyway. Of course, a major factor for performance marketing last year was the changes by Apple on their privacy policy. This affected most of our marketing partners, platforms, and channel. Generally, I think it can be summarized to say that we see lower performance on iOS, at the same time, higher prices on Android.
Even so the Android platform was not directly affected, we see how marketers are shifting their UA spending budget to Android, increasing the competition and rising the prices. On a channel level, we have seen major movement beginning with Facebook to rapidly decline in its market share and at the same time, other channels benefiting from this, especially the video networks have been doing very well in the early days of the post-IDFA phase. We have also seen that some of our competitors are reacting to these challenges by further expanding their own return of investment windows, which is putting additional pressure on our strict 180 days return of investment profitability standard.
Without a doubt, we would have been able to spend even more UA on our games if we were to steer our break even to multiple years, but this would not be in line with our profitability strategy. All these challenges were significant, and to some extent, we highly benefited from our diversification on platforms and channels. On the platform side, we have not been overly reliant on iOS. We were always good partners with Google, and we continue to work with the smaller platforms such as the Microsoft Store. When it comes to channels, we are working with more than 100 different partners. Here we are constantly evaluating, benchmarking, and assessing which are the best performing channels and focusing on dynamically allocating our UA spend where we currently see the best return.
It's important to understand that it's a constantly moving target. As on one side, Apple's ATT solution is getting better and better, and on the other side, the partners are beginning to improve their algorithms and seeing more and more successes. This allows us on one side to move to successful channels, for example, decreasing UA spend on Facebook, moving it to TikTok, which emerged as a strong partner last year. Also doing this on a game base and even on a genre basis, like moving away UA spend from casual games to strategy games. Another key for success last year and going forward was creative testing.
This was especially important because last year, multiple of the larger partners did change their policies for marketing creatives, meaning, for example, how close marketing material needs to be to the actual gameplay. This required high dynamic work from our studios on one side, working closely with the marketing partners, and then being able to fastly iterate on testing new creatives, finding successes, being able to share the successes and apply them to different games, often even games from different genres.
This, I think, also highlights how even the smaller teams can benefit from the Stillops platform, because some of our game teams do have only, like some of our teams, and games only have small teams, but they still have access to the knowledge and leverage of the marketing hub, allowing the small teams to spend UA on volumes which are significantly higher than they would ever be able to spend on their own. Of course, lastly, I want to talk about limitation and marketing targeting on iOS. This was a major topic before it even happened, and there were a lot of voices in the industry who believed that especially games which require a high lifetime value, like our strategy games, would potentially not be able to do any performance marketing at all on iOS.
Here I'm glad to confirm that this is not the case for Stillfront. On one side, we definitely benefited from our diversification on channels, games, and markets, but we especially were able to leverage our strengths in data analytics. Being able to work with the early tracking signals to assess if a registration becomes a player who is continuing to play the game, to eventually pay in the game or rather churns away, is key to be able to model the lifetime value and to return of investment. Being able to predict how the return of investment will evolve after a few days, week, months, and even years.
Being able to do this early and fast with the initial tracking data is key to be able to judge is the channel and the source is the right performance, or we should rather shift budget somewhere else. Now, the biggest disadvantage we have seen on limitation marketing tracking were clearly affecting launching new games where we are not having the loyal existing user base, which is sending so many crucial and important game KPIs and signals that we can benchmark against. To summarize the performance market situation that despite this very challenging market environment, our Stillops platform allowed us to continue spending on a stable UA level compared to the boosted COVID years due to our ability to effectively allocate UA investment where we see the best return.
This can be on a channel level; this can be on a game layer and on a genre level. sometimes this requires very tough calls and tough decisions, but the results also speak for themselves. next I want to talk about ad monetization. We have seen, especially in the second half of last year, a particularly challenging environment for ad revenue. This came due to the big brand partners cutting down their spending due to economic uncertainties, which negatively affected revenues that ads generate, which are shown to our players and games. for ad monetization partners who prioritize brand marketing, we have observed that the eCPM was declining by more than 70% year-over-year, eCPM being a common benchmark to measure how much revenue you make from showing ads to your players. this demand of the brand marketeers was going down.
These partners are often set up to only deliver brand marketing, for example, by showing certain banners in the game. This is not performance driven. Even so there was less demand, it didn't mean that our marketing teams could in return just much cheaper acquire new users via the same partners. This resulted in a certain imbalance of having a low eCPM, so low revenue coming from ads displayed in the game, compared to a high CPI, so high cost per install of acquiring users into the game. This was a tough environment for our casual games, and it's also for sure, especially tough for the hyper-casual games market, but this is a segment where we don't have exposure to.
We did react to this challenging environment by further diversifying our ad monetization partners, and especially by boosting hybrid monetization for studios where it was applicable. While ad bookings declined by 8% organically on the group level, having a toll on our margin, we have studios like Candywriter, which grew by 19%, and I think this is greatly illustrated here in the chart on the, on the right side. This is showing Candywriter's quarterly bookings divided by in-game monetization, so in-game purchases in red and ad monetization in blue. We should focus on the fourth quarter because this is traditionally the strongest quarter for ad revenue, because here the big brands are pushing their budget for the holiday and Christmas season.
You can clearly see it if you look at the fourth quarter of 2021, where the ad bookings were leading to a peak in overall revenue and 53% of this revenue came from ads. If you look at the fourth quarter of 2022, the picture is entirely different. It is the ad bookings did not only decline in share, but also in volume. The only reason how Candywriter could continue its very strong growth was by boosting their in-game monetization, by being able to leverage the live ops expertise and going for a stronger, more healthy hybrid monetization.
This sets up Candywriter in a very good position going forward because regardless of when the brand marketing will pick up, and it will pick up eventually, they are already in good position, they can further benefit from when ad bookings are stronger again. I want to talk about the new games. As I mentioned earlier, it was particularly difficult to scale new games into the market, so bring them from a early soft launch phase to a significant volume, due to the challenges I've mentioned. However, we have seen success with launching new games in our core franchises. While at the same time, we have seen that we have to cut back further on less promising project outside of these. We did manage to grow our active portfolio by 13 games, of which eight were organic launches.
If you look at the chart on the right side, you can see that bookings of new games immediately reacted, growing by 220%, bookings of all games growing by 29%, and CapEx growing by 60%. This clearly shows that last year for us was an investment year. We have invested significantly more in launching new games and soft launching the games, scaling these games in the soft launch phase, and we have been immediately seeing the impact of new games to also deliver revenue. It's key to understand that many of the games that we started last year are not even launched at all or in very early soft launching phase.
That means going forward this year and the years beyond, we expect our margin to further improve due to bookings on new games improving, and at the same time, CapEx going further down as we also continue to laser focus our allocated capital on these areas where we see the best returns. Leads me to the franchises. I think it's well known that Stillfront has a highly diversified active portfolio of now 78 game titles across all our three product areas. However, it's key to understand these are not just small niche products. Many of them are large established franchises. If you look at the numbers, 12 of our largest franchises each generated more than SEK 200 million bookings last year, and the top 5 franchises generate more than SEK 500 million.
These are large established franchise with a loyal user base resistant against uncertainty and fluctuation in the market, strong brands that we can work with, and they are still evenly distributed across all our product areas, still enabling us to shift spending where we see the best opportunity. Is it currently the high LTV strategy game, or is it again more the casual game which is benefiting from a resurging ad market? We have been focusing our investment on these franchises, identifying where we see the best potential, decreasing spend outside of this. I think this is also very well visible when we look at the games that we launched, because seven of the eight games that we added organically to the active portfolio last year were part of these large franchises.
To further illustrate franchises, I brought a couple of examples, and I want to start with Home Design, which is one of our strongest franchises, delivered SEK 820 million bookings last year despite having significant exposure due to the ad market. There's the Empire franchise, which crossed SEK 11 billion lifetime value, showing remarkable stability and margin contribution. One of our, yeah, rising stars franchises is definitely the Supremacy franchise, where we now have five studios working on achieving more than 100% year-over-year growth last year. Here again, it's important to point out these are strategy games. Despite the challenging market environment, despite concerns about doing performance marketing on strategy games, this game grew by more than double. A good example for our diversification is in BitLife, 'cause BitLife is another great franchise.
It's the number one life simulator worldwide, which is an entirely different genre with entirely different audience to our strategy games, and it's still performing so good. I've just shown how Candywriter evolved throughout the last year. It's important to keep in mind that this is only part of the BitLife franchise because we also have Goodgame, which is working with Candywriter to do all the localized and culturalized spin-offs. During last year, we have launched especially the Portuguese and Spanish version to successfully tackle the South American market.
We also have franchises which are leaders in subgenres and certain reason, definitely the largest and most successful one is Jawaker, which is the number one classic games in the MENA region, which we love to see because the MENA region is the fastest growing games market in the world. Jawaker is a very strong brand in this region, making it even more profitable. To add additional examples for how we grow our franchises, I also want to highlight Albion again. We did expand it to mobile already during 2021, and we further grew it last year by also rolling out the version, improving it, and scaling performance marketing on it. We are entering the next phase with launching the Asia version this year. It's actually starting next month. Yeah, coming to how we further grow our franchises.
It's really the key is allocating our CapEx in profitable franchises to optimize the return on investment, while at the same time cutting back the spending on areas where we don't see this clear return. This also frees up additional capacity for co-development with multiple studios for either new game development, because we must not underestimate the value of live operations, of adding new features to existing games. In addition, also the being able to co-develop, so multiple studios contributing to one's franchise and launching new games. Goodgame is a great example, which did establish itself as a very strong partner to Candywriter to do this BitLife spin-off, and we are continuing to do it. Just in January, we launched BitLife Français, which immediately became the number 1 app in the French App Store.
Another good example for an upcoming culturalization is, of course, what we just talked about on 6waves side, taking a strong franchise like Home Design and, yeah, interpreting it and modeling it to the Japanese market. We're not just talking about let's do marketing in Japan but really adjusting the games to have the highest chance of success, which is something the West studio would not be able to do on their own. We also continue our marketing channel and audience diversification. I just want to again repeat that this is really an ongoing and moving effort because the channels are changing. There are new channels emerging as are lower performing. We will also never give up of testing old channels.
For example, Facebook is doing much better now than it did a year ago, who knows how it will do in half a year. We are constantly moving forward. We are exploring certain channels that may work on a strategy game but not on a casual game, trying to understand if we can't, like, attribute this. Good example would again be TikTok. Some of our strategy games highly benefited from TikTok, which you may not think because I think many people think about TikTok as being more of a, of a younger audience and not our male 40 plus strategy audience. We will also focus our special project on the most valuable franchises. We have the clearest and tangible return. Special projects being, for example, generative AI or cross-promotion.
Lastly, I want to highlight that we continue our IP licensing and partnership track. For IPs, it's always worth highlighting Property Brothers, one of the strongest games in the group and part of the Home Design franchise. For partnership, I definitely want to talk about our work with Netflix. We did launch Too Hot to Handle for Netflix last year, which became the strongest Netflix launch so far, and I look forward to continue the collaboration with them. This concludes my segment, and I hope this gave you a good overview about how we will continue to allocate our capital on the most profitable franchises and on the most profitable channels to improve our return of investment.
Thank you. Thank you very much, Philipp. Thank you for going over how we grew a challenging market in 2022. It's I've gotta say it's been really a pleasure, you know, to work very, very closely together with our teams and the studios, you know, to make sure that we not only leverage our strong live operations, but synergies, investments in new games and make sure that we counter a weaker ad market with hybrid monetization. I think the we just launched recently in France, BitLife Number one.
Exactly, yeah.
in France at the moment.
On both platforms.
In both platforms. There you go. Also, obviously, you know, in addition our Stillops platform and ability to work with diversified marketing channels definitely helped our studios better navigate the rougher waters of 2022. That was quite important. Going forward, we'll be able to drive further efficiency in our new games development by focusing on further leveraging the 2 core franchises that you introduced. One of them is Jawaker, and we'll be talking to the Jawaker founder now. Thank you, Phillip. Thank you very much. I'm happy to now welcome Mo, the co-founder and CEO of Jawaker, a studio that joined the Stillfront family in October of 2021. Mo? How are you doing?
Hi. Hi Alexis, how are you?
Not too bad. How are things in Amman? Yesterday you told me it was even colder than here in Stockholm.
Yeah. No, a little bit of an exaggeration. It's cold, not colder than Stockholm, though.
Excellent, good. I'm glad to hear that. Listen, Mo, why don't we start with a quick introduction of Jawaker, then we'll do some Q&A, you and I.
Absolutely. Absolutely. All right, let me dive in. I don't know if the slide is up, but it's sort of just like a one-page kind of overview of Jawaker, but I'll just talk to it. The first thing that I kind of want the audience to know is what Jawaker means actually in Arabic. It's the plural for jokers. Effectively the actual name is very... it has become a household brand, so playing a certain, you know, social card game on Jawaker versus playing it on any other app has a different meaning to a lot of our players.
Effectively, we really have built a brand, and we've built a brand around our understanding of what these card and board games actually mean in our part of the world. Another thing I kinda wanted to make sure that the audience, kind of, understands is what these games mean to our part of the world. They're inherently social, so kids play with their parents. Friends who are, you know, were together in university who are now, you know, you know, living all over the world are playing these games together. That inherent social nature of these games is deeply rooted in sort of this cultural identity.
We like to say that Arabs living across the world, they connect to their culture first based with food and then second on these card and board games. That's something we understood from day one, and we've built our application kind of around that. Even though the interaction happens over games or the people play games, it's actually a social interaction around games, and that's a very important thing to understand. It's the social features and the innovation that we did around the app, the games, the actual basic layer of the games, is what actually makes Jawaker special and unique.
You know, essentially by kind of, not by design, more kind of by coincidence, we've built this ecosystem and this marketplace for all these different games because of the different nuanced rules of these different markets. You might have a game that is called Tarneeb that is played in one part of the Levant, but then you'll find in Lebanon it is just called 400, and it is just, you know, a slight rule change, but means a lot to the different players that play in these markets. We're actually based out of the UAE, so geographically focused out of the region with a large technical team out of Jordan, which is, you know, known for its, you know, available and very qualified technical talent.
That's sort of, you know, the nature of our business. We actually have grown the company by building product, so we're very technical in nature. Everything we build and we innovate in-house; that's kind of been our ethos from day one. We haven't been really good at performance marketing, at least before joining the Stillfront Group. That's, you know, some, one of our unique kind of angles to and additions to the Group is effectively we've built a brand and we've built this sort of household name around the genre that we have.
Our actual organic growth and sign-ups is a big driver of our of our growth that we're actually looking to boost with some performance marketing as we kind of leverage the group's capabilities.
Wonderful. Thank you very much, Mo. You've touched on some of them, what would you say really are the keys behind the success of the Jawaker app? Also, I think it'd be good if you could explain what you're saying that the... like go deeper into culture aspects and explain how, you know, your games have nothing to do with gambling, basically?
Okay. That's an important question because anyone who hasn't visited the region or spent some time here doesn't maybe understand that nuance. First of all, our games are actually played physically, like in real life, mostly during the holy month of Ramadan, right? That's actually a time where, you know, people, whether, you know, before they break their fast or even mostly after they break their fast, kind of, sit with each other and socialize. It's actually, you know, ironically, they play less of our games online and more offline. We like that because it's kind of a reminder for people of how fun these games are, and we actually usually see an uptick after Ramadan because, you know, some kinds of old users are activated.
That's one thing that's very important. These are, these are cultural social games that are played, you know, between, you know, parents and children, between friends in college. They're used as a means of continuing sort of those conversations that happened over, you know, you know, a Ramadan outing or even, you know, sort of a social outing while you were at college, et cetera. They're very woven into the social fabric. That's something that we see across the Middle East. It's very important to understand that there are different games for different cultures. However, that dynamic of card and board games is similar to... is similar from a user in Saudi Arabia, they play Baloot, but a user in Lebanon might play Leekha.
Those, it's the same dynamic, but a different game. That's something that maybe is very important for, you know, for people who haven't visited the region to understand.
Thank you, Mo. Can you... I mean, you mentioned a little bit how, you know, the strength of the Jawaker brand, right?
Mm-hmm.
Can you maybe explain how you successfully built, actually have built this brand with very little, I mean, I remember when we first met, I was just amazed by how little performance marketing you deploy to build that brand?
Absolutely. You know, what we do on our social media channels, sort of how we listen to our users and try to mimic the social, the offline social interaction into our application is actually what has been our biggest driver of growth and our biggest, sort of, you know, brand catalyst, if you will. What happens is, I'll give maybe some examples. We have an innovation called clubs, which are effectively larger, large groups of people that come together that kind of play. That online activity mimics how our users actually interact with our games in real life.
A lot of users actually go to a cafe and, you know, frequent the same cafe and meet other people within that context of the cafe while playing these card games. What we've done is we've taken that offline experience and created an online, kind of, meeting point for that. Then we've taken that to the next level where clubs can kind of, you know, compete against each other as to who sort of, you know, earns the most ex-experience points, et cetera.
That's really been pivotal to our strategy so far, which is we listen to our users, we have a deep understanding of how they actually live the games that we play and live it in real life, and then take that experience and map it on online in a way that no other game has or can do, and that has been a big driver and catalyst for sort of, for our, for our brand.
Yeah. That's excellent. Also, I mean, the way you do your product launches and your go-to-market model in terms of entering a new market is quite unique to you and, I mean, the region, but quite unique to you. Can you maybe take us through that?
Absolutely. Again, maybe, you know, a few examples might help. I'll give you the example of, because we have a deep understanding of the social dynamics of our players, you know, it's one important thing to note is Arabs in general live all over the world, and there are, at least within the Arab world, a lot of, say, Lebanese who live in the UAE or, you know, a lot of, you know, sort of diaspora who live in Europe, whether it be, Germany or Sweden, or even the U.S. We understand those dynamics and sort of how they interact with each other.
For example, we wanted to target the UAE, which is known to have a large population, but a very small population of local Emirati nationals, and just sort of the remaining are from all over the world. There are a lot of Lebanese who live and work in the UAE and have high purchasing power. One thing that we sort of did is we kind of targeted the Lebanese speaking in Lebanon, and that was relatively, you know, cost-effective to target. Then they kind of built a critical mass of users, and then they were reaching out to their friends who were living in the UAE.
Those, we were able to get those users effectively kind of in a, in an indirect way, in a very cost-effective way, and then, you know, benefiting from the high ARPUs in a country like the UAE or even Saudi Arabia. We constantly do things like that. We've done similar sort of targeting of diaspora in of Arab diaspora in Germany. If I put an ad in Arabic, you know, it might not be very, sort of, you know, there might be not a lot of people kind of looking at that.
On another angle, like a country like Egypt, where like a lot of word of mouth and a lot of sort of offline activities are important, sometimes we feel the need to just roll up our sleeves and kind of, you know, send the team to better understand those nuances and, you know, do even things as basic as, you know, run the kind of, you know, distribute flyers, which can be a very cheap way of spreading the word and creating that word of mouth. We always think creatively, and we take it market by market. It's never a one-size-fits-all for us.
Yeah, I love the example of Egypt where, you know, you have somebody that spends time there, goes to the cafes, goes, understands what works, what doesn't work there. I mean, it's really really good. Moving on to something else, what would you say are the advantages of the Jawaker ecosystem? I mean, one of the things that blew me away as well when we looked at your data for the first time was just a superior level of engagement, and sometimes you even refer to it as a social network. Can you get a bit more into depth into of this?
Again, this is, you know, it's kind of like when you look back with 20/20 hindsight thinking that it was all planned. It was actually not, ineffectively like planned strategically. It was kind of organic, but what we have right now is an application ecosystem. First and foremost, we understood inherently that a lot of our players play multiple games. I don't. Even a user, let's say in Saudi Arabia, doesn't just play one type of card game. There may be one that is more popular than the other, but usually people play two or three.
By adding these different games in a single app has gives the sort of users more loyalty, so they can play their favorite games within the app and also an outlet to learn how to play other games that they might have heard of that effectively increases their retention and time on site. That's one element of Jawaker that makes it unique. Then the other thing is that when you develop kind of or you build this sort of that layer of social features, those can be leveraged across games. Right now, I have friends, some of which may play game A, some of which may play game B, but they are all friends.
We've also sort of seen the impact of that where we've launched games, card and board games that are extremely competitive on the App Store, but when we launch them on, Jawaker, people say, "I'd rather play that game on Jawaker than play it, you know, as a standalone." It also reduces the or let's say increases the opportunity cost of a user kind of leaving Jawaker or deleting the app because effectively they're not deleting a single game, they're deleting 40 games. They just stay there and continue to engage, and it's our job to continuously listen to our users and stay ahead of the game in terms of the features and the games that we add.
They're deleting 40 games and their friends and their networks and their kind of
Absolutely.
Yeah, that explains in part the incredible engagement there. I mean, can you explain to me as well, you know, what would you say are the challenges in building a strong employer brand in a what is a competitive global tech industry in your part of the world?
That's definitely a challenge and a challenge we recognized honestly early on, because again, I'll go back to sort of who we are as a company and that we are a technical company and we have a, you know, a significant part of our employee base are engineers building product. You know, those types of jobs usually are much more marketable both locally, regionally, and effectively internationally, to be honest. We've seen that sort of difficulty with retention early on, but we preempted that.
The culture that we have in our office and the way we think about retention is quite forward-looking for the region, and I would say, you know, if not on par probably even, you know, above average from your sort of the thinking that happens globally. You know, we thought of remote work before remote work became, you know, sort of popular in this part of the world. Culture is very important. We've, you know, implemented cultural values that we stick to kind of like our constitution. We very much focus on peace of mind and sort of, you know, creating an environment of creativity for our team.
I can safely say that, you know, we really are, I think, again, ahead of the curve in terms of sort of retaining talent and, you know, sort of making it a very difficult decision for you to sort of decide whether you want to be with Jawaker or sort of leave. Our, you know, touch wood, but our turnover has been extremely low. And I think, you know, we've been successful as that, but it's primarily due to the mindset of what we want to do and sort of the environment that we want to create for our team.
I have to say that when you hosted us a few months ago, I think in October, November, for the gathering of all the Stillfront studios, Stillcon, you hosted this alongside Babbel. All the feedback I got from all of the different studio heads and all that was how impressed they were, you know, with your team, you know, the diversity, the tech expertise of the team and all that were very impressed by your team.
Yeah.
Let's do a final question. We have a bit of time still. You've been part of the group for 15 months, more or less, I think.
Yep.
What would you say are the main learnings, and what kind of synergies are you planning to leverage? It's Phase Four— synergies.
It has been a real eye-opening experience. I mean, again, I'll touch upon sort of the most impactful things that I felt myself personally, and I think the company has felt over the past 15 months. I think one thing, you know, that comes top of mind is the introduction of systems in the way we, you know, we work. I'm a big fan of systems. I'm a big fan of just an institution not being, you know, sort of exposed to any key person risk, if you will. That's something that, you know, coming into Stillfront, getting that advice and that feedback has really been transformational. Honestly, like I'm...
I myself now feel plugged into a system of, you know, the way we sort of have processes to run things, it is just has really been amazing because it gives comfort that, you know, this engine runs based on those systems, and I think that's something that companies in our part of the world don't really appreciate as much and just getting the exposure to that best-in-class way of running an organization has been, I think, extremely helpful for us. Another thing that I will kind of touch upon is about the people, really. It's, you know, we have been to Stillcons.
They're, you know, they have been back on after, you know, sort of a, you know, I think the initial period, because of, you know, towards the end of COVID, we didn't, I think, have the first one, but then, you know, we've experienced two. Genuinely amazing people, both on the sort of HQ level and on the, you know, the other studios. Just engaging with people that are going through the same things that can help you out, it's, you know, it's not immediately tangible, but it is extremely valuable to be able to be part of that large network of decent, smart, sort of ambitious people, and you feel it. It's been energizing for us.
I know you're already working with other studios in terms of, you know, boosting the in-game advertising in your game.
Yeah
... as one of the things. I know you're also working with the marketing hub to 'cause you haven't been doing much performance marketing, so there's some, you know, unused potential there.
Absolutely, I think, you know, in addition to sort of, you know, we haven't made, you know, at least prior to joining Stillfront, we haven't made any money from in-game advertising. That's obviously something that is a low-hanging fruit that we haven't even, you know, touched. The other thing is also our brand, right? The Jawaker brand is huge, and it has tremendous value.
We're exploring, again, I don't want to give obviously too much, but exploring leveraging that brand in the MENA region, which as I think was mentioned before, is one of the fastest-growing regions in terms of gaming and having Jawaker positioned the way we are and sort of to leverage into, you know, kind of adjacent genres that, you know, if you just slap on the Jawaker name, has tremendous value and we are in discussions around that actually within the group. That's on the synergy level.
Absolutely. Thank you, Mo, and the Jawaker brand is, you know, it's an amazing franchise in the region. We know that, and Philipp briefly mentioned it. Thank you, Mo, for this deep dive into Jawaker. I personally love, you have created a real ecosystem of games in the Jawaker app, and this is definitely very inspiring for when we're thinking about the wider Stillfront ecosystem. We're gathering lots of learnings from what you're doing, and we're also learning a lot from you guys. Thank you, Mo.
Awesome. Thank you.
I'm now happy to welcome back, Jörgen, the Founder and CEO of Stillfront, for a wrap-up and to conclude our Capital Markets Day. Jörgen.
Hello, everyone. I hope you have enjoyed and found it interesting with the Capital Markets that we have today. I hope that you have been able to take part of insights and learnings from both individual studios and the amazing successes from Jawaker, and I can really confirm and echo the strength of the Jawaker brand. As an example, we were invited to participate in the state visit when the Swedish royal family visited Jordan a few months ago, and when they were asked the big 500 people audience that were there from the industry, from the authorities, "Do you know Jawaker?" More than half of the people raised their hand. I think that says a lot. The average age was maybe 50 or even higher, including parts of the royal family.
That's a really fantastic, strong brand indeed. Also listen to Rex and the guys from 6waves. We have gone into our deep dives in our financials with the hope that you should understand how we are geared up to reach our ambition to be the best games company in the world. Not the most fanciest product, as I said, but we are innovative, not in the product in itself as much, to some extent, but not as much as we are in the way that we conduct our business. As also Mo pointed out, the way that we identify elements and processes that really make a difference for all the great talent that we have out there, the 1,500 people and their game teams, because that is the true core of the whole business that we have.
As someone pointed out, we are 80% centrally work with supporting the core of our business so that we can grow and be more efficient in many different aspects, because that is the best games company in the world. We have geared up our ambition indeed. We also have been very clear about when we saw how Andreas pointed out how we have ongoing activities. It's one thing that I show some slides about Stillfront, and we should be the best company, but it's all about execution. It's all about deploying that Stillops really in the way that Amy pointed out, is making a difference, and it's identify what priorities we should have during 2023, but also 2024 and onwards. We have a very clear roadmap towards reaching our increased profitability targets.
We also, Sofia described how we pair this ambition with ESG and sustainability aspects, which is absolutely core. We will not be either the best games company in the world if we do this without taking into account sustainability. We love cash flow. Cash is king or even King Kong, as we say sometimes. We should continue to improve our cash flow so that we are leading. We have now changed our primarily profitability target, it better reflects the cash that we are generating. The market is tough, it has been tough, we have shown that even though we're not happy with being at a minus level last year, we have shown that we can outgrow the market when it's difficult.
We have shown that we can market, in the toughest possible way, like Philipp elaborated on. When it's tough out there, our strong franchises and the way that we can leverage our diversification is really something to. It's very important for me that you can see that clearly, not only me saying it, but you can clearly see how we have done that and will intend to do for many years to come. We are in a position that we would like to continue our strong growth journey for many years to come. We should leverage. We should leverage through the synergies that we can create and have created, and even more so will create in the future. We are into the Synergy Phase; we are into the Leverage Phase. We should leverage the talent that we have.
We should leverage the product portfolio we have, the diversification of it. Also, and to a larger extent, leverage the big, massive franchises that we also have. By working in both these axes, we can optimize our capital allocation for UA, that we are really, I would say, world-class in already, but also in capital allocation for product development. We do that even more cleverly in the future. We should continue with a strict payback for user acquisition, but we are increasing the ROI requirements on product capital allocation for product development. Of course, we will continue to invest in the Stillops platform.
Amy described what diligent work we have, a very detailed work in identifying the roadmap, the elements, down to very clear elements that needs to be improved, refined over and over again to suit our 1,500 awesome people out there to make our company even better. The financial targets should better reflect now the value creation that we are making every day, working very hard and with a big smile every single day. Thank you all for participating. Thank you, all speakers . Thank you, Alexis, for navigating as always elegantly through the day like this. Thank you for the people making the practical arrangements, many of you. Thank you, all great, awesome people, in our studios making our journey possible and even more exciting the next coming years. See you around. Thank you very much.