Good afternoon. Welcome to Q3 2021 Results Presentations of Ten Square Games. I'm Maciej Zużałek, CEO of Ten Square.
Magdalena Jurewicz, CFO. I'm back after maternity leave in TSG for six years.
Anna Idzikowska, Chief Growth Officer. Welcome, everyone.
Wojciech Gattner, Chief Product Strategy. Hello, everyone.
Okay. Our business across the core portfolio, new products, and also M&A integration. There were two significant events in Q3. We'll talk about the progress after the acquisition of Rortos and entry to China. We kept ourselves busy with the review of strategic options that were concluded recently. Conclusion is that we're remaining as a listed business on Warsaw Stock Exchange.
Okay. Let me walk you through the performance of Ten Square Games titles in the third quarter of 2021, and typically I will start with our flagship title, that is Fishing Clash. Please be aware that the numbers we are presenting here in this slide are numbers excluding Fishing Clash in China. We will be discussing it more carefully in a moment in one of the further slides. Let's look at Fishing Clash from bookings and marketing expenses perspective as always. First of all, we see the stabilization of bookings in Q3 2021 in comparison to the second quarter of the year, despite post-lockdown normalization of player cohorts. We've been focusing on ongoing game development.
We have invested in the team that is reaching around 90 people, securing long-term growth of the title. We have onboarded experienced people, being very dedicated to the title. We have also increased the installs volume in the third quarter of this year. As you may see, we have decreased the marketing spend starting from August 2021 when compared to the previous months of the year. Still, though, the marketing spend is higher than the marketing spend we've seen for the game before the first wave of COVID. We have seen stable bookings in the title. There is something we cannot see here in this slide, but something I would like to discuss.
The role of our growth team is to deliver the best and optimal profitability of our activities. Not everything we are doing as a growth machine is understood as paid user acquisition. Our role is to increase the influx of new users to our titles, not necessarily doing typical user acquisition activities, but also cooperating closely with the platforms, with App Store, with Google Play. We are doing ASO, so App Store Optimization. We are optimizing and we are trying to position our titles in the App Store and Google Play as well as possible. This is something we've been doing during the whole third quarter of the year. We all know that there were some big changes to the market connected to the privacy policy changes introduced by Apple earlier this year.
We can say that we feel comfortable with the changes and how we handled them. I think the results coming from that is the increased volume of installs coming to Fishing Clash in the third quarter of the year. We have increased the number of installs coming from many streams by 10%, both on iOS and Android. We feel comfortable with that. We can also see that, thanks to that, but also thanks to the ability of efficiently keeping our older players in the game, we have increased the monthly average users volume. We are pretty satisfied with the results and how we have handled all these changes. We also feel pretty comfortable increasing our marketing spend in the upcoming weeks.
This is something that we believe is something we feel optimistic about and that you can expect the increase in our marketing spend and efficiency in the upcoming months. Also something that we've been sharing already, but we are also pretty optimistic about the cost of new installs and also the cost of new paying users in Fishing Clash. We will be only following this path in the future. We are good. We are in growth mode and we are applying growth strategy we've been applying before to Fishing Clash.
Okay. Regarding Fishing Clash product status, we could see that we've already bottomed out as we previously predicted. We believe right now we are in the stabilization phase with a small uptick, which was also predicted in the past. There is still some volatility in the players' engagement, so there might be a little bit small moves on the upside and downside, but overall trend is pretty good and this is what we wanted to achieve. In the last quarter, we strengthened our team.
We have right now two production feature production streams, which will help to create more features with a higher quality that will be accessible to the players soon. We are continually working on improvement of economy of design of some older features, so it should all bring to the greater product and greater game for the players. We are conducting a lot of customer insights researches that also help us create better features with better prioritization, which is good for the players and for the company as well. Right now we are working on widening of the payer base as well. We are working on implementation of the, for example, a rewarded ads, which is like a new revenue stream.
It can have some minor impact on revenue, but it's a positive thing. On the other side, it can help us acquire other type of players, a little bit wider type of players, which might also be another positive thing for Fishing Clash. In the last quarter, we saw higher engagement levels than previously. We also saw that the DAU, daily active users, base is growing. On negative sides, in the Q3, we saw that the IDFA, iOS 14.5, let's say, adoption was growing, which was like predicted.
Anna will tell you a little bit more about what's the current status, but I think we are already behind the highest volatility in that terms.
Yes. Fishing Clash in China. Let me remind you the story of Fishing Clash entry to the Chinese market. After having the agreement with our partner, NetEase, being signed, we have finally been granted the license, and we launched the game on both iOS and on our partner's Android platform in July 2021. What happened since then? First of all, we have formed a team of 32 people currently working continuously on the game development from here, from Wrocław. These people are cooperating very directly with our partners from China. They are discussing the product and how to make it the best-fitting product to our Chinese players.
With NetEase, on a daily basis, there is a team supporting us from our partner's side. What are the biggest steps for us now? First of all, we are adjusting the title, so it has the same maturity our Fishing Clash Global has. We are adjusting the features, we are updating the game, we are adding content, but we are also making sure that the game is well-adjusted to our Chinese players that seem to be slightly different to what we have seen in Fishing Clash Global. What are the next big steps coming from, let's say, marketing perspective and business perspective? We have already started joining new Android stores. There were two first distribution platforms being joined, MoMo and Bilibili. The next Android stores should come soon.
We are building a business case with our partners, so we're also discussing how to approach these new platforms, how to make our entry the most successful. When it comes to the numbers and to what has happened to the title during the first three months, I think there are a few significant things. First of all, during the first three months since launch, we have generated more than 1 million downloads. We are pretty optimistic about this number, and we believe it will be growing in future. During the whole period of time, we are around the position of third most downloaded app on the App Store. We are also on the top 10 grossing game on the App Store in Sports Games category. Also our partner, NetEase, has launched successful user acquisition campaigns.
We are working on them in iterative manner, so we will be increasing our marketing spend while we are entering new Android stores. I can say that for now, we are still in kind of a soft launch mode. We believe that we will move to the Chinese global launch once we are available in more Android stores. There are plenty of them. They reflect 75% of the market, and we are heading there. Thank you. Now a couple of words about Hunting Clash and its performance in the third quarter. I think the most important part is that we have seen pretty stable bookings in the third quarter of the year, despite the significant lowering of our marketing expenses when compared to the first or second quarter of 2021.
Nevertheless, the bookings were hitting their record values, so July was our best month ever when it comes to bookings. We are also seeing a very good trend starting from October of 2021 again. We are also feeling more and more comfortable investing more into marketing of the product again. What comes next is the focus, and we started scaling up the team that is around 70 people now. So we are trying to follow similar path we've been following for Fishing Clash, so we are strengthening the leadership of the team.
We are bringing new features, we are bringing new content to the title, and we believe that in around 6-9 months of such a focus, we will achieve feature maturity, which can be comparable to the maturity of Fishing Clash now, and we will be able to discuss more long-term potential of the title. Also when it comes to Hunting Clash and the changes to the privacy policy that Wojtek mentioned, we feel pretty comfortable with how we handled the situation, not only in Fishing Clash, but also in Hunting Clash. We will be increasing the marketing spend, and we will be increasing the promotion of the title in the upcoming months.
Regarding our Evergreen portfolio, there was a small change in the team. Basically, we reduced the number of people that were working on both titles, from around 50 people to around 22 people. Other members of the team were relocated to Fishing Clash, Hunting Clash, Fishing Clash China, Undead Clash and other titles that were looking for new and experienced people. Right now we can manage those two Evergreen titles, with the people that we have. We are pretty ambitious still with that, let's say, portfolio. We want to try different things. We want to innovate and experiment a lot, with those two titles.
The experienced product owner has its goal to try to find some innovations that can be later on transferred to Fishing Clash and Hunting Clash as well. Of course, one of the main goals is to maintain the current bookings. There was a small drop in Q3 in revenue, but right now we can see that it's coming back to, let's say, the older levels again. In Q3, one of the biggest things was the acquisition of Rortos, our Italian company and friends, let's say. They have three main live titles right now, and one title that is under development.
It's Warplanes Multiplayer that is expected to be published early 2022, in the soft launch of course, initially, and we have high hopes of that title. In Ten Square Games here, our main focus right now is on Airline Commander. We took this title over here, and we designated a special team, first of all to update the game to the newest, let's say, Unity version, to connect it to our systems, to A/B testing tools, to our marketing growth department. It took us around three months' time, a little bit longer than expected. Right now, we are able to work live with this title.
We have also implemented a lot of customer insights. We ask, you know, players the player motivations, what they want to see, and it resonates well with our hypothesis. Right now we are focused on developing some of the features. We believe that there's a huge potential in that title, and we'll see how it goes in the upcoming months and quarters. On the bright side, for example, we could see that the non-paid activities and growth and marketing, and also an update to the newer version of the game with less bugs, it basically resulted straight away an uptick in downloads.
We could see a 100% uptick just after the first update, which is very promising, and I believe this is just the beginning of the journey.
Yeah, maybe a couple more words on Rortos integration and development plan. First of all, what you've seen already is the connection of TSG IT system. This is something what happened already in the third quarter of 2021. We have also implemented TSG business intelligence and marketing tools. Now, what we are planning to do next with the titles, starting from Airline Commander that we are working with from here, from Wrocław, but also when it comes to the other titles from Rortos portfolio, also Warplanes, we are planning the soft launch for. We will be fully setting up an analytics tool set with accurate in-game data. It should help in in-depth analysis of Rortos game data, allowing for further product and growth development.
It will be something serving the product to take smarter decisions, to bring features, content, that are adjusted to our players, to increase the user base of players much better. Also there is another route of this implementation, that is the development of user acquisition strategy and its execution. We will be working closely on the product. Now we will be launching our UA strategy. We will be starting iterative work with user acquisition, paid user acquisition. We will be onboarding ad networks. We will be bringing paid traffic to the title. As Wojtek mentioned already, we will be also continuing work on, let's say, bringing non-paid growth activities to the title. The first of them, improving our store listings on Google Play. They were implemented already.
We'll be continuing with similar things on App Store. It should result in increased traffic, not only installs volume, but also MAU, DAU in the titles. The main idea here is to add Airline Commander and then future games of Rortos to and apply our smart growing strategy for them. This is something to be expected in the upcoming weeks. The other things we've been integrating and sharing is the game development competences. We have brought Airline Commander as asset to Wrocław. We have prepared a development roadmap for the upcoming weeks, but actually months. We will be further developing and maintaining Airline Commander here in Ten Square Games. The result is to deploy product expertise from TSG Clashes to use data-driven approach to improve engagement, monetization and retention.
This is also to develop and create new titles with mutual benefits. The story, the future is bright, and we are only into bringing more competencies on board. The last part of integration was connected to customer support and VIP service provision out of Wrocław. We've been integrating our customer support and game localization. For example, one of the examples is that Polish version of Airline Commander is coming. It should be deployed pretty soon. Now we are setting up our VIP tools and introducing our personalized support, and we will be continuing that in the next weeks.
One of our goals was to further diversify the revenue streams. As we mentioned in Q1 2021, with Hunting Clash, we managed to further diversify our bookings. Right now with Rortos's acquisition, we even further diversified it. Also Hunting Clash importance grew a bit in Q3 2021. Our goal is to further diversify in upcoming quarters. Regarding our production pipeline, here's the update. First things first, Undead Clash, the next clash with our studios to bring the clashes to the masses is going to be tested pretty soon. We have an initial version, a playable version of the game that's gonna be released in Q4 2021, I'm sorry.
It's gonna happen in the upcoming weeks. The goal is to get the first feedback from the players, get the first KPIs, and better prioritize our roadmap. It's not a ready, full version of the game, but it has a lot of things that will be in the final version. Based on those results, we'll be able to decide in which direction we should go further. This is something that is good and is coming pretty soon. The next thing is Football Elite. It's our social-based competitive game. We are in advanced production following the first test and first KPIs.
We prioritize our roadmap, which is right now being delivered, and we are planning to soft launch this title in first half of 2022. There will be small changes to the initial version of the game, some bigger ones. Overall, we are super excited about this product. Warplanes, the multiplayer flight simulator, military flight simulator, will be technically launched pretty soon, at the turn of the year, as I mentioned before. Also we will be conducting a lot of research. Customer insight team will be working together with the title to better prioritize the further roadmap.
The Magical District, our Warsaw Studio title, first title, will have the first playable version of the game released in Q1 2022. Also the goal is to get the first KPIs, get the first insights from the players, and better prioritize the further roadmap. The Project Osaka, the second title from the Warsaw Studio, is just finished the prototype. We are going into the production phase, and we are expecting to have this title soft launch in second half of 2022.
Okay, now financial results. Actually, as Ania and Wojtek mentioned, in terms of bookings, we have a stable level of Fishing Clash, of Hunting Clash. We are adding Rortos games, so these bookings are also here in our numbers. In terms of geography, actually still the same market. Of course, North America, which is more than 40%, and Europe, so actually Western markets. As Wojtek already said, we are still more diversified in terms of our games. Operating expenses. First of all, cost of services sold. We are still increasing our production teams. We have higher numbers in Fishing Clash, in Hunting Clash.
These are active products, cost of these production teams are already expensed in cost of services sold. This is why this number is slightly higher for third quarter of this year. In terms of general administrative costs, they are also higher this year, but there are two main reasons. One of them is M&A cost, and the second one is our anniversary trip in for the whole company.
Which were also bought in this quarter. When we exclude these two values, the number of the costs are pretty stable and nothing extremely happened. The main category of selling costs, of course, commission and marketing. Commission are fully dependent on level of the bookings, so already mentioned when discussing bookings. Slightly slower number for this quarter. In terms of marketing, we have a lower number for the quarter, circa PLN 10 million lower due to circumstances in FC. Yeah. I think the most important slide, so adjusted EBITDA. What we adjust? Of course, we adjust stock option program cost. We adjust M&A and other one-off items. But of course, we also adjust the number for the deferred revenue. What happened?
This quarter, the deferred revenue was the number was on minus. It was almost PLN 10 million lower. For second quarter, it was PLN 10 million but in plus. Let me explain what happened. For every balance sheet date, we calculate the number of durables and consumables which need to be deferred. As the deferral for durables is bigger, I would like to explain on durables. We need to check two things. The first one is the structure of durables in the whole sales of our products, and every change in the even 1% has a big impact on the number at the end. The second thing is how long our active players live.
This year and this quarter, actually this average lifetime of active paying user was prolonged more than one month. This is the fact. Like, we are very happy because this means that our players are more engaged. They stay with our games longer, so it's like the very, very good news for us. In terms of financial results, it means that we need to defer more. Exactly this happened this quarter. Like, this of course non-cash impact, we refer to bookings as they pay us constantly and we discuss on bookings, but this is only non-cash adjustment for EBITDA. When we are talking about net profit, of course this is after all of these adjustments, and this quarter is lower than previous ones.
We need to remember about this big difference on deferred revenue and cash flow. Of course, the highest outflow in TSG history is acquisition of Rortos. We had this blue line. This line is like PLN 200 outflow being connected with acquisition of Rortos. The second outflow was connected with dividend payment, which was also historically the highest one. When we are talking about operating cash flow, we are on the stable level. We generated PLN 46 million. In connection with balance sheet, acquisition of Rortos change that we have lower cash, but we have fixed assets higher due to, of course, acquiring games and goodwill of Rortos.
As a summarizing slide, our profitability and cash flow KPIs. This is what I would like to say one more time, that we are highly profitable and we generate cash from our activities. The level of adjusted EBITDA to bookings is increased quarter to quarter and equals 35%. I think that's a really good result and that's all.
Okay. As I said before, we're busy with strategic options review process. The reason we went into this process was that we really wanted, you know. We came up with a new strategy several months ago. It was good opportunity actually to validate the strategy and review it against, you know, the folks and perspective from other players, including strategic investors and private equity. Also, something that we talked to our shareholders about, and that was expected and obviously that was bound with inbound interest that was received by the company beforehand. We had several parties, significantly more than 10, involved in a discussion with us.
The process was fast, and that was designed like this, so we prepared ourselves pretty well for that and we ran it in a very effective manner. The outcome of the process and the decision is that we'll remain listed on the Warsaw Stock Exchange. There's a number of reasons for such decision. Not everything qualifies for a public communication. I think the very important bottom line for us in the way we look at our business as management is that we basically confirmed the strategy of TSG that is the right approach with a company of our size.
We heard a lot of good comments on how we process, how we operate, how we build games, how we scale up teams. In terms of what we want to do. That's good feedback. There's some feedback that we actually wanted to hear to alter our strategy. I think the good news here is we basically are continuing with our strategy as designed, and some of the recommendations we've taken in and deploying. One example I can give is ad monetization in Fishing Clash. It's kind of, you know, that's being done because that's one of the, you know, several points we received during that feedback.
Moving to the next slide, just wanted to put you know the presentation of the results in the context of how Ten Square Games is changing. If you look at the company at the time of IPO with around 100 people on board and two games plus you know Fishing Clash racing, already in 2020 we've taken the decision to actually you know broaden our strategic platform. Going beyond Wrocław, we started early in 2020 with Warsaw, adding Berlin and Bucharest, done our first M&A this year. We actually you know focus a lot on bringing new pipeline of products which you know all actually happened during 2021.
If you look for the outlook of 2022, we have a lot of elements to work with. You know, we have new organic portfolio that is being developed. We have existing games that we still believe have a lot of room to grow, and we'll fight for that, and we'll work on that by scaling up the teams and doing more work with the games. But it's also a perspective beyond 2022, and I think, you know, once we're done with the current wave of development, we'll think about new development pathways for the company. It's definitely, you know, more Clash games that we have in mind that we could do.
Depending on how Football Elite develops, we believe with the know-how we have and the types of the games we've developed in Wrocław, they're very strong in sports contests, so we will look into sports. Obviously, you know, we'll look into simulation space a little bit more. Adding Rortos as an M&A investment, I think that helped us in thinking about, you know, broadening our scope of operation into simulation space. Then bringing studios, just to remind why we're doing it. That gives us an access to different talent pool that we have in Wrocław.
That's actually, you know, as we progress with the business, we're bringing a lot of insights into our business, and those studios will continue to build games which are different to what we do in Wrocław. That was the purpose. We wanted to have a different DNA in the studios. You know, Magical District coming to launch early next year. It's a good example of a game which is different to what we would have ever done in Wrocław. There's more games to come. There's a second title being developed in Warsaw. We're getting ready with Berlin to start production sometime in 2022. You know, we should expect in longer term perspective, we should expect more titles being produced there.
Obviously, there's Rortos, which has their own strategy, and there will be games beyond Warplanes. But also, you know, we're looking at more M&A currently. There's interesting things in our pipeline. You know, if you look at the development of the business, at the back of 2020, we decided to invest into infrastructure, into future growth of the company. We moved from, you know, 200 people at the end of 2019 to where we are, 500 currently. We'll be slowing down. I think we're getting to a platform that we meant to build. The 2022 is definitely a year for us to focus on delivering across all the projects.
That's what we'll be doing as a company extensively. That's gonna be the year of focus. Speaking of focus, again, just to summarize what we tried to convey during this presentation, we scaled up our teams in Fishing Clash and Hunting Clash. That is, with the main thought in mind that these are growth product and we'll be investing a lot into and, you know, doing a lot of things within the teams to grow these products.
The new products, just a reminder, we're planning to launch four titles in 2022, so that's the product of last 18 months of our operations and getting ready to actually be able to operate four products, and we have the fifth in the pipeline in Warsaw. We will do a lot of work on our platform, so we invested a lot beyond the teams at our core production teams. We are also investing in growth team. We're investing in technology. We're looking at things that we can bring into the business that would further support us. We're investing in services. This is all done to be able to, you know, build and service, you know, exciting games in the future.
On top of that comes M&A, and now that we've been through the integration with Rortos, which is nearly done, we have capacity to start looking at new things. Actually, the pipeline looks quite interesting for us, different type of transactions, but potentially very additive to what we do in the business today. Okay. I guess that's the investors' calendars. Thank you very much for your attention. I think we're ready to move into questions.
Okay. Please ask your questions now in the chat section on YouTube. Please remember to provide your name 'cause anonymous questions will not be answered. Okay, let's start with the ones that were asked first. There are some complaints about bugs in Hunting Clash in social media. Is this under control, and to what is the scale of the problem?
Yes, we are aware of some bugs in Hunting Clash. We are always working, continuously working on fixing the bugs. Every time you release an update, there might have been some bugs, and some of them might be really annoying for the players. I believe it's under control right now, and we are working on our QA, so there won't be any bigger bugs in the future.
Thank you. Now we have a question about potential buyback. Are we planning the buyback and,
Yes
That's basically it.
Yeah. I think on the buyback we have the approval of shareholders to run the buyback and this is something that we are considering, as we said before, and that's on the agenda. Decision has not been taken yet as to whether we perform the buyback.
Thank you. Does Hunting Clash have potential to bring revenues similar to Fishing Clash? If yes, then how long will it take to get there?
As Anna mentioned, during the presentation, I believe in around six-nine months' time we'll be able to better estimate, you know, what's the potential. If I would have to answer right now, I believe yes, there is a potential to reach the levels of Fishing Clash, because the product is around 50% ready. There is still a lot of things to do. There is still a lot of low-hanging fruits there to be done, and that will improve the product. On the other side, on marketing spend, we are ROI positive, which means, you know, not many titles have a situation like that. You know, every dollar we spend, it comes back with a positive return.
What does it mean? It means that once you improve a product by 10%, let's say, it doesn't mean that it increases only the revenue by 10%. It also means that you can spend even more on marketing, so the net effect is compounded, which is of course very good, a very good information. That's why it's pretty hard right now to estimate what's the final potential of the product, because we need still to deliver those improvements to the game, and this will take us another six-nine months' time. Of course, it won't end. It's not gonna be, let's say, a complete product, and we have a roadmap for more than 24 months planned for Hunting Clash.
We'll be better able to estimate the Hunting Clash potential. Maybe Anna will add something on.
I would like to add something from marketing perspective. Not necessarily marketing, but maybe user influx and interest in the title perspective. I think very important here is that Hunting Clash, similarly to Fishing Clash, but also to, for example, Airline Commander, are the titles that are having a big organic interest of players. We've been seeing a continuous, not decreasing, but rather increasing interest in the title. It's probably thanks to its generic theme, but also because of the wide reach we are able to get, thanks to the theme of the titles.
We are pretty optimistic when it comes to users' influx that is necessary next to, obviously, efficient way of keeping our older players in the game to successfully develop and grow the product in future. We feel we are safe when it comes to this perspective, and we will be only bringing more interested players to the titles.
Thank you. Can the company assure us that the current target for motivation scheme for 2021 will not be further lowered?
Yes. Yes, we can assure that.
Thank you. What were the costs of strategic options review?
We present this cost together with Rortos acquisition cost, and it was PLN 3.6 million.
Thank you. Why did the accounted costs for the motivation scheme drop significantly in the third quarter of 2021?
For every balance sheet date, we check if all the people are still employed in TSG and if they are still, like, active in the program, because they can resign. Many things can happen. We just adjust the calculation of the cost for actual list of the beneficiaries, and that's why it's dropped this quarter, as we need to adjust it.
Thank you. How much EBITDA did Rortos generate in Q3 2022?
It's presented on the presentation. Give me a sec.
It's PLN 3 million.
3 million. Yeah.
PLN 3 million, yes.
Mm-hmm.
What is the competitive gains for Undead Clash?
Basically
If I would look at the direct competitors, I wouldn't say there's any title that is very similar to Undead Clash, because we are kind of a shooter game, but more like a Hunting Clash. Might be like a sniper shooting game on the verge of a very competitive game basically with the zombie theme. Direct competitors there are not. Of course, there are a few titles with zombies pretty successful, like State of Survival. We might share some of the player base there, and we might compete on marketing levels with them. I believe our reach for that title will be very wide.
I wouldn't say that there is any direct competitor that we have to beat to in order to survive and to strive.
Thank you. Why was the effective tax rate in Q3 2021 so high? Will revenues from Rortos be taxed at lower or higher level?
Okay. Maybe first question first. We need to remember that net income was affected by non-cash adjustments. Stock option plan, deferred revenue and others. This is also the reason of the, like, higher effective tax rate. The second question, as far as I know, in Italy, there is not such a big tax relief as IP Box in Poland, so their effective tax rate is higher than ours in Poland.
Thank you very much. Will there be improvement of results in the fourth quarter? Will the results, profits go back to the previous levels?
I think that we cannot say more than we presented already, so October numbers for Fishing Clash and Hunting Clash, and we'll see in two months.
Thank you. When will you start user acquisition for Airline Commander?
Hmm?
Mm-hmm.
I'm sorry. For Airline Commander?
Yes.
We will start our marketing activities once we are sure that we see the numbers well, that we are fully integrated with our marketing tools and systems, that we are ready with our business intelligence, analytics and tracking. This is something that is being tested now. Looking at numbers, we are pretty optimistic, and we would like to start testing marketing already in December. I think it will be kind of an iterative work. As always, we will be observing the market. We will be looking for business opportunities. We will search for the best possible moment to start activities, so it will be in December or in January. It is coming pretty soon, and our plan for Airline Commander is not to go for tests.
It's not to go for low-level marketing activities, but rather to cooperate closely with the product, observe how it improves, and to actually apply smart growing strategy for the title. Starting from Q1 2022, we should be ready to increase our marketing spend for the title. Obviously, we will be discussing the results, and we will be deciding on how to deal with that in future. We are pretty optimistic with that, and we will be starting soon.
Thank you. On how many Android platforms will Fishing Clash be available in China eventually?
What are the targets? It's an ongoing process. We have joined the first two distribution platforms because not all of them are Android stores. Some of them are video sharing websites, applications, et cetera. Chinese market is pretty flexible. It's growing, so we will also search for new opportunities for new emerging platforms we could go with our title. The plan is to enter dozens of platforms, but it's an ongoing conversation we have with our partners. In that, we are jointly building a business case. We are using the results coming from iOS platform, now coming from the first Android stores, and we will be discussing the entry on new platforms. I cannot share the exact number, but I think it's something optimistic actually.
We need to remember that Android stores are 75% of the market, and we will be entering them one by one. The expectations are definitely greater than two Android stores we have just entered.
Okay, thank you. Now we are moving on. No, there is one more. We are moving on to the English chat. First question, your Fishing Clash revenues are roughly 1/3 lower than in peak during pandemic. What exactly happened? You noted churn in long-term user base or rather in cohorts acquired during pandemic?
Okay. I think we answered it several times, especially on this chart when we compare, you know, no COVID situation. Basically, we increased, you know, marketing spends over during the first wave of pandemic. That of course helped us to boost up the revenue in short-term and in mid-term. Lately now in Q2, Q3, we saw a little bit downtrend in the players' engagement. It wasn't like any
Specific cohort related. It wasn't like in the new cohorts or old cohorts. Basically, all overall player base was playing a little bit less than during the pandemic time. Of course, our marketing expenditure came back to the levels pre-COVID. Naturally, we could see a small downtick, but as we said, it already stabilized. That's what you could see on our predictions and we could see on the chart, and we can see a little bit a small uptick and a nice up, probably uptrend in the future.
Thank you. Share of iOS in your revenue mix was rather flat in last quarters. Should we expect it to decline due to ongoing ATT impact?
I think I'm pretty comfortable answering this question now after the third quarter of this year that, no, we are not expecting the revenue on iOS to decline due to ongoing ATT impact. I think maybe it's a good moment to tell you more on what happened during the second and the third quarter of this year regarding the changes to the privacy policy. Basically, we've been preparing for this change for a really long time, but the preparations we've been doing were kind of theoretical before it came true. We started preparing even more in cooperation with our partners.
Ad networks were also adjusting their solutions, the algorithms, the way we can target players, the way we can optimize our campaigns, and it all has started with the first rollout of iOS 14 and the further versions of iOS. What we've been doing is we were observing the rollout. We can now say that we are in this new reality now. The adoption rate of our games is +90%, and it's also the adoption rate on the market. The second thing is that we've been discussing the consent rates we've been getting in Fishing Clash or Hunting Clash in our games, and we were very satisfied with the number. It's +50%. For our campaigns, it's even 70%.
I think it's a very, very good number that also shows that our players, they trust us. They are ready to offer us tracking possibilities. It doesn't mean that the world hasn't changed. It's not that we are only getting the consent rates. We need to have double consent rates if we wanna do something with such an information. Also, let's say our ad networks and the other partners, they also need to have a consent to be able to use this kind of data. Still, yes, we do use this data. We are able to target and optimize exactly the same. We were doing that in the past on one hand, but on the other hand, we are also adjusting to the solutions that were offered by our partners.
It was a joint cooperation of growth team, BI team. We were working on tracking. We were working on analytics. We have even created a special analytics, and tooling section in our growth team, so we are able to serve these changes better, and I think we handled pretty well. There were some changes to targeting and optimization. We are targeting broader audiences now. We had to plug into new solutions being offered by platforms. But what we've seen in the third quarter of this year is that the situation normalized. We were able to increase the number of installs. We were able to track installs pretty well. We were able to work on existing traffic pretty well.
I think that the main result here is that we not only increased the total number of installs, but also we effectively changed the way we work with our marketing tools. We see things pretty well. The other thing is that effective cost of bringing new installs to the titles was declined on both, like, both in Fishing Clash and in Hunting Clash. Also that the cost of paying users acquisition is on a good level because it's not only on quantity, but also on quality of traffic. We don't see any downturn here. I think we are in better situation we were before. We are pretty aware of what happens in the market, but obviously it's not the end. We will be continuously working on increasing our efficiency here.
We are pretty optimistic we will be rather increasing our marketing spend. We will be also working closely with platforms. We kind of try to reposition our situation. We are also working hard on our apps positioning in these stores, and it goes into a good direction, so we don't expect a decline in new users influx, which is obviously necessary also to be able to increase our revenue from the titles. Coming back to the beginning, I think now we don't expect decline in future.
Thank you. We have a question, but not too precise, so I'm afraid we cannot answer it about something more about options review. We've already commented on that. Same thing about lowering of motivation program targets. I would suggest to skip those questions unless there is something you want to add. The next one, can you elaborate on planned social game that will come out in 2022?
Social games, I believe all our future games have a strong social element, maybe not even element. Some of those games will have like the social feature will be a core of this game, especially the Football Elite and Project Osaka and Warsaw. I can tell a little bit more about it. It's gonna have a little bit of a fishing team there, but it will be a strong cooperation within the teams from the same clubs and it's gonna be a fun game. As for the rest, Undead Clash, as you know, Fishing Clash, Hunting Clash, what social features are there? What? How important is that? You know, you can imagine that Undead Clash would have the similar social features.
Regarding, of course, Warplanes by Rortos, this game is a multiplayer, real-time multiplayer PVP. Obviously, there will be clans, clubs, the people will see each other on the playing field. It's also a very social thing. Regarding Magical District, you have social features. Of course, it's gonna be super important. I believe you'll be able to see some of the version of the game, as I said, pretty close to the Q1 2022. Yeah. Thank you.
Thank you. What is your current strategy in new post-IDFA environment on iOS? Are you investing only in targeted campaigns, users who choose to opt in? Or do you invest broadly also in users who opted out?
We do both. The first thing I think I have already kind of answered this question, but to be specific, yes, we do both. There are some early signals, conversion values we can deliver to feed the algorithms of the partners. Definitely we do both, and we don't see the deterioration of our efficiency thanks to that. As I mentioned before, actually, we've seen positive impact on our marketing activities. The second big thing is that we don't invest only in this kind of user acquisition. We also invest in new forms of marketing, with influencer marketing. We are discussing TV campaigns, community, virality, cross-promotion. There are so many things we are doing to increase the user base. The second thing is that we also work very closely with platforms.
We are doing app store positioning, so we also work closely with organic traffic, and we are trying to increase the volumes coming from that. We look at the performance of our titles taking into account both paid traffic and organic traffic. Obviously it's like an incremental machine.
Thank you very much. The value of finished games by Rortos amounts to over PLN 60 million in our financial statement. Is there a potential threat of write-offs in the future? What is the value of Rortos amortization?
Okay. In order to recognize the Rortos acquisition, we need to build a DCF model, and we need to maybe not predict, but look at the revenue stream from the games. Actually, this is the value which goes to the financial statement. We believe that we buy like good active titles. But of course, in terms like we were talking about, I don't know, 10 years future, I cannot say that 100% sure we will not write off any of the games. But as for now, they are profitable, and that's why this value is presented in the financial statement. The second question about amortization. For this quarter, amortization of the Rortos games amounted to PLN 2.2 million.
Thank you. Is the upward trend on Fishing Clash and Hunting Clash revenues sustained in November?
Basically, I don't think I can comment on that very precisely. As we mentioned before, we saw the bottoming, let's say, out. We see that, you know, cohorts are pretty stable right now. There is still some volatility. It all depends, you know, on number of days, on number of weekends, because our titles are also very dependent on the weekends. I think we are on a good path. Mm-hmm. Of course, there is a lot of, let's say, even days in upcoming months. There is a Black Friday. There is, you know, Christmas time.
There's always, like, bigger volatility in revenue. It's pretty hard to predict, you know, where the numbers will land. They will land.
Thank you. There is a question about the CEO motivation scheme. Are there any KPIs connected with it concerning the company's results or the stock value?
Yeah, I think the program for myself was presented about 18 months ago when I was joining the company. I think everything was covered there that was necessary. My joining to the company was the program was allocated from a stock of key shareholders, not the entire stock of the company. The idea was for me to step in to help to internationalize and diversify the business, which I believe we have been doing. This is where that's what I'd like to say on that topic.
Thank you. I'm afraid we are running out of time, so we'll just answer the questions that are already here. The first one is about the founders and whether can we expect any ABB. So we totally cannot comment on that, cannot answer that. Are the lowered provisions by Google for subscription and before that by Apple are they applying to Ten Square Games or will they apply to Ten Square Games in the future? Lowered provisions for subscriptions.
In this very moment, we don't have in our titles a subscription model apart from Real Flight Simulator, which is a Rortos title, so that might affect them. However, there was already a plan where people who are subscribing for more than a year, they have the lower, let's say, cut for Google and Apple. What we are of course considering as I mentioned before, we are considering new revenue streams. That's why we are creating the rewarded ads, and we are also looking closely to the subscription model and how to implement it to our live games. It might also impact maybe positively, but right now for our current, let's say, revenue model, it won't.
Thank you. There is a question about Italian-speaking employees, so please reach out to our HR. Last in the Polish chat, how many companies are we talking about right now when it comes to M&A, and could we expect some transaction in the following weeks, months?
In general, our M&A pipeline is pretty deep. We're talking to dozens of companies, or we're tracking dozens of companies which we think are relevant for what we do at TSG. The current discussions are about a handful of different companies. They are at different stages of advancement. Most of them are bilateral, so the timing is the by-product of the agreement and, you know, due diligence that we would conduct. I cannot comment on timing of any transaction because, you know, first of all, we don't do it. Secondly, you know, it can always move, but we are actively discussing.
Thank you. The last question, could NFTs become a feature in Ten Square Games in the future? Are you looking into the developments on this front, for example, in South Korea? You were waiting for that question, right?
Yeah, we are waiting for that question, because it's like I think right now a hot topic in the market. Of course, we are looking at it. We are analyzing. We are also waiting for what the players would like to see, because it's not always about the company to implement it, but it's also I believe in NFTs, it's gonna be about what the players want and what they need. If they want and they need, then definitely we are on it. Already we are doing, you know, let's say, the legwork to be able to deliver if it's necessary. If we see that there is some also business opportunity for Ten Square Games, we'll also try to do it.
Okay. Thank you very much. These are all questions from both chats, so thank you. Thank you very much.
Thank you. Thank you very much.
Thank you. Pani Ed?