Good afternoon, ladies and gentlemen. Welcome to a conference of Ten Square Games. Today, we are going to comment on the financial results for the third quarter of 2026. My name is Andrzej Ilczuk. I am the CEO of the company, and I am joined by Magdalena Jurewicz, CFO of the company, Janusz Dziemidowicz, CTO, and as always, Nina Graboś, responsible for contact with investors. We are going to start by covering the most important events of the previous quarter. The third quarter saw the increase of bookings in our games. We have launched Medal Hunter, and we have done the soft launch of Fishing Trip. Wings of Heroes and Trophy Hunter are still being developed. We are scaling these two products, and we do not forget about Fishing Clash and Hunting Clash, which are the foundation of the group.
Two more games will be tested probably in the fourth quarter of this year, and we will see what is going to happen to them. As the portfolio expands, the more significant it becomes for us to concentrate on marketing. If we look at the first three quarters year-on-year, we can see that marketing is evolving. What is our future? How we invest in the future? Our new games are the largest beneficiaries of our marketing expenditure. Allow me to remind you what is our approach to marketing. Marketing is supposed to pay back in a given time. It has to be profitable, and our cohorts need to have enough fuel to deliver results over a longer time perspective. As we calculate these models and analyze data, we provide only current information. There are no forecasts. We talk about pure raw data.
This is what we have done over years. One interesting fact to add, the life cycle of free-to-play games is very specific. If you look at Hunting Clash, Fishing Clash, these games are all over 10 years old. In Fishing Clash, there are still players who have been with us since the soft launch, which happened in 2016. So as you can see, the lifespan of a player can be really, really long. We are now going to take a look at the change in the third quarter. In this quarter, we launched Medal Hunter. You can clearly see that 75% of our investments was made in new items on the portfolio. You can see our model allocations of marketing expenditure. As we see the portfolio expand, since more products are added and they need capital, we are at the same time observing more investments.
However, allow me to repeat once again, these investments are done in a very disciplined manner. Moving forward, I would like to comment on our new games. This is our latest, youngest child, Medal Hunter. This game was launched very fast. From its conception to global launch, it was not even 12 months. So the product lead was very fast. A game which is launched so fast is never a finished product. However, it took us a year to develop that game instead of three to five years. Therefore, we rest assured that our products for soft launch or global launch are not finished. These are the products that can reach fruition after some time. As for Medal Hunter, global launch answer a few important questions. First, the game was well received by our players. We have seen it in comments, in reviews.
This game is really good, and it was much better than in the case of Trophy Hunter. Another important thing is retention. It is visibly better than in Trophy Hunter. This game has been in the market for just a few months. However, long-term retention is much better than in Trophy Hunter, even though this game is very fresh. Medal Hunter is now a game with the best retention in our portfolio. How did it happen? You might remember soft launch and global launch. The time in between was an opportunity for us to improve the gameplay, and we managed to do that. If you play Trophy Hunter and Medal Hunter, you can clearly see these are totally different types of games. Similar, but totally different. We have made a few interesting observations.
Thanks to gameplay, retention is much better, but there are many nuances we have not had opportunity to test, because we learn new things with every week. Over the next months, we are going to even try to tweak the parameters even more. There is a lot of room for improvement. Some of opportunities to improve we have already identified. Some of them will be identified further down the road. Until we do not close, we do not finish working on gameplay, we do not expect high market expenditure. We do not want to overspend because we want to have an opportunity to compare the performance of the game month to month. We are going to spend on marketing, but in a limited way. However, our work on the gameplay and retention is not going to impact our work on monetization. We have launched seasons in Medal Hunter.
We have seen how it improved retention. We are going to add new systems, and we are going to further polish retention in the game. Moving on to Fishing Trip. This game was launched on Android devices yesterday. It has been finished for a few weeks before the soft launch. We wanted to start a proper soft launch on all devices. Unfortunately, we did not manage to do that, and we are waiting for the acceptance until we can soft launch the game on all devices. Whether it is going to happen tomorrow or next week or in two weeks, we do not know that yet. What is soft launch going to be? Just as in the case of Trophy Hunter, we are going to once again validate gaming.
The movement in soft launch is different than in market testing, so we are going to validate this game on different traffic. We hope it is going to be better. It is going to be supported by limited marketing expenses. We should not expect this game to be spent on in a very high proportion. First, we need to see the retention. We need to concentrate on retention. We need to test adverts, and we need to compare various graphs from which we acquire the data. So ahead of us are still a few months of waiting. Moving on to our current portfolio. I am going to start with Fishing Clash and Hunting Clash. These are most important titles, very important for our revenues, and I would like to tell you a few words about these products.
If we look at Fishing Clash, in Q3, we have seen some volatility in revenue. They simply are related to the cycle of launching new content. Our predictive churn models indicate that a five-week period is a much better approach than four-week period. Therefore, every five weeks, we add a new fishing spot to Fishing Clash. There are weeks in which we do not add any fisheries. We have also been successful implementing adverts in our games. We have been trying to add adverts to Fishing Clash before, I think about three to 4x over the course of the last few years, and every time we failed. We could not develop a proper model of adverts. This time, we believe we have managed to achieve it, and we launched adverts in Fishing Clash. We can see that the players view these adverts, and they bring a positive result.
Since we have observed that the entire advert cycle is increasing, two years ago, it was about 1.5%, and they were only available in Wings of Heroes. Now we have them available in Fishing Clash, Hunting Clash, Wings of Heroes, Trophy Hunter, and Medal Hunter, and now in Fishing Trip. As we see this segment to expand, we have decided to improve our team responsible for that area. Therefore, we have hired a person with immense experience on working on adverts. This person has worked with major titles in the market. Over the course of the next year, over the course of the next months, we want to see how this segment becomes even more professional in affecting our revenue from adverts.
This quarter, we also seen increased marketing expenditure in Fishing Clash. However, the period of return is the same, so simply these marketing expenditures are a product of a better performance of cohorts. We see a huge resilience of this game. Although we have decreased marketing for Hunting Clash significantly over the year, we can see that financially, the game is doing really well. Moving on to Trophy Hunter. We have seen record-breaking bookings, over PLN 15 million in a quarter. We have started first monetization processes in the game. They entered the first stage of testing. As you can see, the average booking per user is steadily increasing thanks to the new systems. These new systems are being tested as we speak. We need to tweak them a little bit. I mean that if we look at the campaign, they have a month-long cycle.
Over a month, we can test one campaign. We need a few months to test whether we need to increase the cost or not, whether to increase it or to go another way. We need to tweak it, and for that, we need some time because we need to grasp a full picture and the full understanding of the features. Marketing has been a great challenge. Therefore, a large part of the conference is devoted to the subject of marketing. We have hired a new head of growth, and the ambition that we have determined to ourselves is simply to decrease CPIs.
Why? You might remember that CPI is something that is not easy to control. That is what we thought so far. Indeed, it was increasing. The more we spend, the higher the CPI. We wanted to tackle this issue. It took us some time to find somebody who has the right experience, and this person has over 20 years of experience. They have worked with companies like Zynga. We believe that it might be a very great find.
During the next conferences, we are going to inform you about the outcomes. The work on CPIs is as important as the work on monetization. Decrease of CPI by 20% means that we are going to pay for a user 20% less, or we are going to acquire several players. It is really worthwhile. Let us move on. Wings of Heroes. We keep repeating ourselves. We are working on the foundations of the product. We have PLN 12 million in revenues, a record high by 40% year-on-year.
Another important thing, an important, interesting tidbit, Wings of Heroes, Fishing Clash, when you compare our VIPs' behavior, our most engaged spenders, when comparing Fishing Clash and Hunting Clash, we have the situation where the expenditure is identical month-on-month. We were able to improve that, and we can see that reflected in KPIs. We continue this with other segments. The work on marketing and the work on decreasing CPIs, we hope that is going to make this product less niche. We are not happy with PLN 12 million quarterly in revenues. We want to fight for more. Moving on. Real Flight Simulator. One of my favorite games, a great model, and it is hard to imagine a better product. The bookings are very stable.
They are predictable at a very good level. A couple of words about our D2C platform. Let me remind you, this is our initiative whose aim is to improve the margin, improve the level of payments that we would have to pay on each transaction. It is usually 30% on Google and Apple. We have two elements here. Web store that is implemented in Fishing Clash and Hunting Clash. The limitation of this store is that we cannot advertise it in the game, and alternative payment methods in the U.S. only. We have implemented that apart from Fishing Clash and Hunting Clash in Wings of Heroes, Trophy Hunter, and Medal Hunter. Here, we are free to advertise that within the application, but only in the U.S. In both cases, the commission on transactions drops from 30% to less than 10%.
Answering one of the questions that you have already asked, for us, it does not change anything. We keep the level, basically. We want to expand our web store to include Trophy Hunter, Medal Hunter, and Wings of Heroes. Trophy Hunter and Medal Hunter are going to be included by the end of the year, and Wings of Heroes is a product that is going to be implemented next. Group bookings via D2C are quite stable. There are, of course, fluctuations. If we have greater Trophy Hunter and Medal Hunter, if we have greater revenues there or bookings there, then it affects the entire level, but the general level is quite stable. Another thing that is worth mentioning. This is not D2C, but this is associated with the margin. Starting from 1st October , there have been changes in the Google platform.
The commissions for new players are lower, and I'm talking about a new player account, a player that installed the game for the first time after 1st October . The level of payments dropped from 30% to 25%. Additionally, we have a Google Play Level Up program. This is a program directed to developers, and if the games fulfill technical specifications, like the mobile devices, processing, or graphical requirements, et cetera, this level can drop by another 5 percentage points. We wanted all our games to be included, but the verification acceptance takes time, so we are still waiting. This is an ongoing process, but we can boast a bit. Fishing Clash, Hunting Clash, Wings of Heroes, and Medal Hunter have been approved, so they are included in the program. So the commission level is now 25% for the existing players and 20% for new players.
This is not the entire world. This pertains to the E.U., Japan, Australia, Great Britain, and the United States. These are great markets, large markets, so this is a huge percentage of our transactions with Google, but this is not the entire world. The program is going to be expanded worldwide next year. So more or less in October next year, according to Google's current plans. Trophy Hunter and evergreen titles, where they are waiting for verification, it will take some time, but we have actually notified Google that we want all of these games to be included.
Okay, ladies and gentlemen, let me sum up the entirety of our business, all our results. These are our bookings, and as Janusz and Andrzej said, our aim is to build a diversified business that is based on several titles that provide revenues to the company and offer us perspectives of growth. This is what is happening right now. So instead of one or two titles, we have several titles right now. Q3, this is 60% of our core games, Fishing Clash, Hunting Clash, and 30% of our growth titles, Trophy Hunter, Wings of Heroes, and Medal Hunter. We can see quarter-on-quarter growth, year-on-year growth, and what we want is this kind of company. We want this company to have several titles, several drivers of growth. Let me sum up what Andrzej said. Again, let me show you the share of rewarded ads in total bookings.
Some time ago, that was 1.5%, mainly Wings of Heroes. Now it's almost 8.4%. All important titles do have rewarded ads. When we implemented this solution some time ago, the situation is more developed. Wings of Heroes, Fishing Clash, and Hunting Clash are only starting, but we have already seen very good results. Trophy Hunter, Medal Hunter do have a share of rewarded ads, so these bookings are built over time. The share of rewarded ads is greater and greater, and also the fishing sector. Fishing Trip is going to be based on this rewarded ads system. Let me move on to EBITDA. Of course, nearly PLN 9 million for Q3. Let me emphasize that the main reason for this decline of adjusted EBITDA is marketing investment. Marketing investment, marketing expenditure is investment for us, so please treat it as such.
You do not have return on investment right here and right now. We spend money right now, and we count that the cohort is going to bring us revenues in the quarters to come. What we want to tell you is that increased marketing quarter-on-quarter does not result in the same drop in adjusted EBITDA. We have the stacking cohort effect. These effects are stacking, Trophy Hunter effect, and all other marketing expenditures. This effect is stacked, and we can see it only now. Building revenue happens because of expenditures from the previous stages. We do have a drop in adjusted EBITDA, PLN 12.5 million, but we do have marketing investment, PLN 16.8 million. Again, marketing investment and our cash position. We do spend record high amounts for marketing. The only high quarter was the COVID time. Now we have Q3 2026, another record high quarter.
Despite these high expenditures, we generate cash on an ongoing basis. This is PLN 10 million in Q3, and after dividend payment, we still are cash generative company, and we build our cash position. It is over PLN 82 million. We pay our liabilities on an ongoing basis, and still we do have cash available for further investment and growth. Just to remind you, our new, but it actually, it has been going on for several years. This is our strategy. What we do, what we soft launch? We try to be capital light. Trophy Hunter, Medal Hunter, Fishing Trip, all these budgets that you can see, so the cost of production until soft launch are around PLN 1 million, PLN 1.5 million. Trophy Hunter a little bit more expensive. It was slightly over PLN 3 million.
The balance sheet in terms of new products is quite capital light. Another comment. Math is math, numbers are numbers. As you know, we do have MSOP, a five-year MSOP, Management Stock Option Plan. This includes three tranches. The first tranche is 2025-2027, and we have two goals. One of them, performance, so accumulated EBITDA, and the second one, market goal, so preserving TSG share price relative to WIG index. Seven quarters completed, five quarters remaining. If you add up all these numbers, you will see that we have PLN 147.4 million. This is cumulative adjusted EBITDA, but we need PLN 363.5 million. This is the minimum level that we need. Mathematically speaking, looking at our position right now, in order to this allocation take place, we need some more. That is why we decided to release provision for MSOP costs related to the period.
We do have additional PLN 1.3 million because of this released provision for MSOP, but we think that the cost of the second tranche will generate PLN 1 million in costs. We do have overall net impact on Q3 2026 net result of PLN 0.3 million. We wanted to show you that. We wanted to show you the numbers, and this stems only because of our current situation. This is not a forecast for the entire period. Our goal is to build a stable business. This is the information. Again, it is going to be attached to the presentation as well. We would like to thank you very much. Now, our investors calendar.
Financial results of the company, the beginning of January 2027, we are going to show you our estimates of revenues per product, and the entire financial report for 2026 is going to be published most likely in the fourth week of March 2027. The entire agenda of result information is going to be published at the beginning of next year, so please follow us.
Before we move on to the summary, before we move on to Q&A, let me tell you a couple of words to summarize the presentation. As a company, we are undergoing a huge change. I do not know if you remember, but several years ago, we met at our first conference. We launched all the developments, all our products at the time, and we were trying to find a new idea for our company. Now we are meeting here, and in the last two years, we managed to, first of all, prove to us and everybody else that we can create new games.
We operate in a market where large studios say directly, and these are listed companies, that they cannot create new games and that they need M&A to develop, but we can develop new games. Another thing, we can scale these titles. Our marketing shows that they can acquire players. We can acquire a player that is valuable, and we will have a return on investment in that player, and we are going to generate quite a lot of revenues on that too, even though we have not managed to have that level of monetization that we would like to see in these games. Another thing, we create games faster, so it is under a year instead of three or five years.
Naturally, these products are not going to be perfect. This is not a finished product. But we are introducing certain streamlining solutions in monetization, and this includes two games. This will show us what the potential of the entire line is. We are starting tests, soft launch of our first game and our second product line. Let me remind you that this game has gone through a very difficult time, meaning benchmarks, KPIs, they need to be achieved, and we achieved that indeed.
At the end of the day, the payments, the bookings of Ten Square Games have increased, and it is due to new games being launched. It is the result of campaigns that are going to turn profitable over some time. We are not scaling just for the scaling sake. It is supported on economic data. We are improving the performance of the games, which you can see. We have added a new revenue stream, which are the adverts, and we are expanding it too. We are streamlining our marketing activity, and we are never self-satisfied. We have never rested on our laurels. We keep looking for things that can be done better. We are constantly working on increasing the performance of our business. Therefore, we have a team working adverts, we have a product team. All that makes us a much better company than we were a few years ago.
We simply do not say that we do not have an idea for new games, which is why we do not do it. We are not that kind of company. I hope that this will allow you to better understand where we are right now. Somebody might say that we have done only 50% or 60% of our work because we have not seen monetization as good as in Fishing Clash, but we are working hard to make it happen. Thank you for being with us. Thank you for taking the time to listen to this conference. I think, Nina, now is time we move to Q&A.
There are lots of questions, and I can tell you right away that we will not be able to answer all of them, but I am trying to group them in blocks so that we answer categories of questions. The rest of them, if you are hungry for more, you can send directly to me, and I will try to answer them as soon as possible. Let us start with Trophy Hunter. There has been a lot of questions on it. Where can we expect the implementation of the largest monetization area in Trophy Hunter? What is the stage of monetization in Trophy Hunter?
In Trophy Hunter, we have now three out of five that we want to base our monetization on. The fourth solution has concluded technical tests. We have run first A/B tests on a larger group of players, and the last solution we are planning to implement at the beginning of the first quarter of 2027. We do not know whether it is going to be January or February. So, we would say it is around three-fifths of the road. Some solutions need longer testing. Why? Because if we remember that we have a four-week cycle for testing new content, it is impossible to test it faster.
Again, I would like to say that from the moment we launched the three features, we need about six months to identify the full potential, and the same is true for monetization features. It will have been six months until we can say that, yeah, we know what we are doing, we know what it is. When it comes to Medal Hunter, we have launched a campaign. We have added some improvements. Right now, I am not 100% sure, because we do not know how long it will take us to take this game where we want it to be in terms of gameplay. But I would say, as of now, at the end of the first quarter, monetization should be finished.
I don't know still whether we are going to conclude our A/B tests in that game. Hopefully, it's going to be limited to one, two, or three iterations, but it could go as far as six. After implementing key monetization changes in Trophy Hunter, should we expect a marked increase of revenue over marketing expenditure? Well, that's the ambition. First, we are gaining momentum as we acquire. When we acquired a player a year ago, it was much cheaper than it is nowadays, and it's a market problem. The entire segment is struggling with it. If there are players who remain with us, we see very low churn, then by means of improving monetization, we are scaling the game in terms of its revenue, and this is the goal of that. At the moment, what are the key risks for scaling Trophy Hunter and Medal Hunter?
Major risk factors is that monetization does not succeed. If it doesn't succeed in the first iteration, what then? Possibly, we could say, "Okay, let's try again." Well, let's say we simply are milking the players that we have acquired. However, as of now, looking at how KPIs are changing, allow me to provide an example. We analyzed Trophy Hunter in the beginning and compared it to Fishing Clash. I'm talking about RPPU. We have reached, right now, 7% of that in Fishing Clash. It's not as high as it should be, but we start to see a beginning of improvement. It will take a few more months, but I'm optimistic. We've seen it in KPIs. We've seen them improve, and it's getting much better.
According to the report, we have seen an improved LTV for some players. I'm talking about Trophy Hunter. Could you provide a reason?
We can't tell you what exactly is behind that scale, but yes, it's visible and concerns both the old and new cohorts. We are adding new monetization systems, and they should have an impact on the general population of players. We've seen it in new cohorts, and we've seen some improvement in old cohorts. Sorry. Why the average amount of players has decreased in Trophy Hunter, although we have had a record-breaking marketing expenditure? Well, this is due to CPI. This is why we need to tackle it head-on. This is where the entire market has found itself. CPI is on the rise for everyone. Therefore, we decided to try and answer a question whether it lies totally beyond our control. As we looked for the answers, we learned that is not the case, at least it seems to us right now.
We'll see how the growth work is going to be over the next few months. We've done some tests. They demonstrate a decrease of CPI. The question is whether we can maintain it and whether it can be achieved on a large scale for the entire portfolio. If we manage to do that, it would be wonderful. Maybe we could decrease it even further. That would allow us to buy more players for every dollar spent. If we add lower CPI to better monetization, it would greatly improve the economics of our games.
Do you still assume that Trophy Hunter will be a game that could join the same league as Fishing Clash and Hunting Sniper, or have you reviewed your approach?
Well, I don't think there is anything that should prevent this game from joining the top league, apart from ourselves. We need to find the way to make it happen. Well, allow me to put it that way. Something might seem easy at the beginning, but the more you delve deeper into it, the more complicated it becomes. It takes a lot of time. We do not have, for instance, access to the backend of Hunting Sniper. We do not see the configuration of some features, and we would not simply like to copy it mindlessly, but this would allow us to understand some things. A/B tests and all the changes we are making expands our perspective, just as with gameplay in Trophy Hunter.
There has been a lot of change to duels, and this has helped us to improve retention in this game. When it comes to Trophy Hunter, well, we need to take a lot of time to understand what we are doing. If we better understand what we do as an organization, developers, the people responsible for the product, if we understand what makes certain indicators move up or down, it would allow us to make better decisions in the future. This is what we are striving for. Allow me to highlight once again that a better product is a sum of smaller decisions.
Are you happy with the performance of Trophy Hunter in Q3, or perhaps did you expect more in terms of revenue after spending so much on marketing in the first half of the year?
I do not concentrate on expectations. We only concentrate on what is the cost of acquiring one player in a given month. We look at a particular cohort, and we analyze the potential of the cohort right now as we analyze it. If there is potential in the cohort, it is great. If it is higher, it means that we have done something good in the product, causing the players to spend more. It is great news, and this is how we approach it. Of course, I would like the game to earn PLN 100 million in a month or PLN 1 billion. However, we need to work every day on improving small features of the game's marketing and monetization, and this will simply bring results over time.
We need to better understand what we do, we need to better understand the decisions that we take, and we need to take better decisions. You might think it is only about an idea. Right now, thousands, maybe hundreds of thousands of games are launched every month in the market. There is a huge competition, and it is very hard to create a game that is successful. We create new games, our success ratio is really good, we know how to scale these games, and we want to make it on larger scale, and we want to monetize these games. Yes, we have done a lot of work, but even more work lies ahead of us.
The final question about Trophy Hunter. Are the bookings recorded today consistent with what was said a year ago?
A year ago, we did not know how huge would be the cohorts that we would have acquired, but these cohorts, if we analyze them compared to the previous year, they are behaving better than the model assumed. Let us now move to Medal Hunter.
How does it compare to Trophy Hunter in terms of critical of key KPIs, and what indicators have been a positive or a negative surprise in comparison to your previous assumptions?
Everything about retention is looking better. When it comes to performance of the gameplay, yes, it's looking better. However, there are many nuances suggesting that we can do even better. How should I put it? There are still some things that require optimization. I would say that Trophy Hunter is past that stage. Medal Hunter is still there, but monetization is worse than in the case of Trophy Hunter.
How much time do you need to close the gameplay in Medal Hunter? How much time do you need?
Well, looking at the fact that we keep finding interesting things every week, well, it's hard to say. We still have this low-hanging fruit. Maybe it's going to be soon, maybe in seven weeks, eight weeks. We keep finding things. Sometimes these are smaller or larger discoveries, let's say. At least we think about them this way.
After closing this stage, are you going to increase expenditure on user acquisition for this title? Yes, decidedly yes. The current monetization potential and player LTV, did they catch you by surprise in a negative way after the global launch?
No. However, we did have several observations after soft launch, and they were quite reverse in the case of the global launch, so it's counterintuitive. Let me give you an example. In one market, for example, we saw that the return times are quite poor, but then in another market, this was a reverse situation. It was the opposite. So, this is the magic of developing games. When you think that everything is fine, everything looks good, well, we wake up for global launch and we think, "Oh, what happened?" So, we are trying to determine why this is different, even though we did not change anything. This is what it looks like.
The current very low marketing expenditures, judging by publicly available data, are caused by the fact that potential players' LTV doesn't add up. Was this planned from the beginning?
First of all, this launch. Well, we know how this monetization model works, so we felt very safe with the very launch. What came up during the process is the following. We have golden cohorts, maybe in the first two months. So acquiring these players, we acquire them cheaper compared to three, four, or 12 months later. So we know that these cohorts are going to behave very well. So these expenditures should be higher, decisively higher, and this is one of the observations from Trophy Hunter. This is our approach. We also knew that we were not going to be able to maintain these expenditures because of the gameplay, because we do not feel that the gameplay is perfect. We knew that the expenditures are going to be lower. We expected that. Every month when we plan marketing expenditures, we know what it's going to be like. So this is the situation.
Do the cohorts acquired in August with massive marketing behave as you expected? Do they have a chance to pay for themselves?
Yes, they pay for themselves. All of the cohorts are going to pay for themselves. I do not know about any cohort in Trophy Hunter or Fishing Clash, Medal Hunter that would not pay for itself. In a very black scenario, when you look at our monthly approach to our cohorts, we have a certain period of time for this pay-up. Something might go wrong.
For example, a player might be angry with us because he did not like something in our game, or maybe something happened in their lives, and that player is in that cohort, and as a result, this cohort is not going to be as dynamic as before, but it is going to pay for itself. In the worst-case scenario, it is going to be less dynamic, and the pay-up time is going to be longer, but I cannot remember any cohort that would not pay for itself.
First margin path, is it similar for Medal Hunter as for Trophy Hunter?
We are going to see. It depends on how fast we are going to close the gap in the gameplay and how monetization is going to go. Please remember that works on Trophy Hunter monetization started not even after a year of the global launch. Here, with Medal Hunter, we are starting right away, so it should take less time, but it is hard for me to say what is going to happen in some time in the future. I am not a Nostradamus.
We do not want to avoid any questions. When do you estimate that you are going to reach the profitability level for Medal Hunter, Trophy Hunter?
We do not publish any estimates, and this is not going to change.
Okay. Another question about Wings of Heroes, then we are going to move on to D2C. From a perspective of several months, how do you assess the changes in the economics of the game? LTV of the players is higher, the results are greater?
Yes, players' LTV is higher. We are at a stage of reviewing things. It is an in-depth review, so there are certain things to be improved, but generally, yes. In terms of depth of the gameplay, that was a good change. D2C.
Trophy Hunter, we have already heard the answer during the presentation, so other questions. D2C, you said that you are going to have it in Trophy Hunter, Medal Hunter, but why not Wings of Heroes? Because that product develops the best in terms of bookings.
As we said before and today, Wings of Heroes is going to be included, but it is going to take time. After Trophy Hunter, Medal Hunter, yes, we are going to have Wings of Heroes.
And a request, could you please comment on the last changes regarding links to external payments on Google platform introduced as of 1st October ? How can it affect the situation?
Well, several things happened starting from 1st October , web store and alternative payment methods. There are no changes here. We do have Google Play Level Up program. I talked about that during the conference, and that is self-explanatory, I think.
We do have a question about AI in mobile games. Could you please comment on that? We are talking about the inflow of new content and the facility of creating content. Are you afraid of the competition?
Well, we can also use AI. Our competitors use AI, and we do that as well, and we do use AI when developing our games. Our possibilities and skills are growing too. Are we afraid of the competitors? We are concerned. We monitor the market. We want to monitor what is going on, and we react. A comment on the platforms, the biggest platforms, Google and Apple. Their approaches are different. Google, you can actually have everything. There is no problem with that. On Apple, I talked about the launch of Fishing Trip, there are certain delays, and it pertains not only to us, but to every developer of Apple applications. There is a problem with introducing the products to the platform, and Apple wants to verify new titles in terms of whether they make sense, to tell you the truth. Apple rejected certain projects for various reasons.
This is about the platforms. My last observation, it is easy to develop games, but it is difficult to create successful games. Of course, we could clone our games, but we do not have 20 Trophy Hunters at the present moment. Let me repeat myself, we do monitor the market. We try to observe what is going on, so it is not going to be a big surprise after six months. We are not unaware of any potential competitors, and we do monitor also the AI situation. Let me call it like that.
Okay, so several questions about marketing. Which result from which quarter should investors look at in order to assess the efficiency of marketing activities in Q3 on the example of Trophy Hunter?
It is a good question. Kudos. But we cannot tell you, sorry.
Q4, can it be similar in terms of marketing investment, or could these be seasonally lower investments and a rebound in the results?
We do not know that. We do have an idea about what Q4s look like, but we cannot be 100% sure. Please look at the previous years and compare the information. Also, Q5, so the period after December 20, we do not know what the scale is going to be. We are going to analyze the situation on an ongoing basis. We analyze marketing investments on an ongoing basis. If some e-commerce wants to buy everything for any amount of money, this also happens, and then we say, "No, thank you." We do not want to pay 3x more than usual. If somebody wants to do that, then okay, we do not. We need to have our feet to the ground. We are monitoring the situation. If the prices are okay, we are going to invest. If not, no.
Okay, a combined question. Google Play Level Up. It is going to leave more money in your pocket. Will you be able to loosen the ad benchmarks?
No, benchmarks stay the same, because it is all about our players. Let us say we have a player acquired for $1. How much will that player return to us? What is going to be the return on investment? We need to look at the profitability of these activities. Yeah, that is that.
Have you not fallen into a trap of constant scaling on an example of Trophy Hunter?
No, not really. We look at every cohort. We look at the pay-up level. It is really hard to find anything to be critical about, really. There might be a scenario in some future where we would say, "Okay, maybe the pay-up time should be faster." Maybe we will say that. Maybe we will want to have these pay-ups faster, and yeah, okay, we will have fewer players, but we will be profitable faster, and that's good news as well. Maybe we should optimize in terms of the marginal amount. I don't know. We will make that decision. No, I do not feel like that, but thank you for emphasizing this.
Okay, I'm going to skip the questions about revenue estimates because the company does not do that. We do not publish any estimates. A question that might have been answered. MAU is dropping basically in all the titles. Is it concerning for you, and what is the reason for that?
Well, let's say that at the entry day, we have 1,000 players. After a year, some percentage will stay. So it's normal. But what's the most important is that those players who should stay, they stay. That's all I can say without going into details. There are players who do bring return on investment, indeed, and we rely on them, but there are players who are not like that. Sometimes we focus on the mass, sometimes we focus on certain groups of players.
Okay, dividend policy, buyback, and MSOP. Buyback. Do you consider the cash that you have to buy back your own shares because of the price of the shares?
Well, we would have to be authorized by the general assembly, so for sure, it's not going to happen right now. We do not have such an authorization, so it's not going to happen.
Current marketing, how does it affect your dividend policy? Cash generation dropped. There's certain reserve of cash. Should we expect poorer years?
Up to 75% is a consolidated revenue paid up as dividend or buyback. But as for the dividend, we are going to think about that in March 2027, and I'm talking about dividend for 2026. We want to be profitable, of course, but we want to be able to invest in a good way.
Long term, what it's going to be?
Well, I would not like to make any suggestions. We are going to decide on an ongoing basis.
There are also questions on MSOP, about the first tranche. You haven't delivered the goal on the first tranche, and it seems that you are not going to deliver for the next tranches. What is your comment on that? What should we expect as far as the conditions of these plans go?
I understand you are interested in knowing whether we are going to modify the conditions. In theory, this program has been determined by the general meeting of shareholders. The management board is not planning to make any changes or to submit any motions to the general shareholders meeting.
There is also a section of questions concerning new projects. How many projects is the company currently working on? How many of them are developed on the line of Medal Hunter and Trophy Hunter? Which of them are using the line built around Fishing Trip?
I can't tell you too much. There are a few games which are either enter the stage of market testing or are just after that stage. What about particular product lines? Well, in the first one, we have a good idea. We are not developing it yet. We want to close the matter of monetization. We don't want to be You don't concentrate on another game. We'll see what's going to happen. We are also planning to test a totally different game still this year, and we'll see what's going to happen. That's all I can tell you right now.
Fishing Trip, you've exerted more pressure on the adverts. Does it mean that we should expect less revenue than in the games based on monetization and micropayments?
Well, in the beginning, this advertising segment is going to be quite robust. However, as I've said, in the beginning, the numbers allow us to bear some costs in an easier way because they generate better profit over time. However, they are later supported by micropayments. They have to be there because without them, we can't achieve the right scale.
Assuming that the soft launch of Fishing Trip is a success, should we expect a global launch of the game in the first quarter of 2027?
I can't tell you when it's going to happen, if it's going to be Q1 or Q2. It's much too early to say anything about that. We have no data on which we can found our forecast. I could try foretelling the future, but as you know, on the example of Medal Hunter, I'm not good at that. I don't want to talk about every attempt that we're making, but if you see a game entering a marketing stage, and if it disappears for a longer time, even between conferences, it means that we haven't found anything interesting in that game. However, if the game appears and disappears, it usually means that it's a good signal. But if it's present all the time, it's a very good sign. This is the way you should look at it.
If we're not talking too much about market tests, let's move to Real Combat Simulator. Are you planning to retain these players for a longer time?
We are running a deciding test this year. If nothing bad happens in that stage, or nothing spectacularly good, we'll suspend working on that product.
And the question about taxes. What is the exceptionally high tax rate in Q3?
Two important information on that. There are Italian taxes in play as well as Polish taxes. In Rortos, it's around 30%, so their stream has to be calculated separately. When it comes to Poland, we have IP Box. Our products are developed and published by TSG Trophy Medal, Fishing, Hunting, and we use IP Box to calculate tax for them. If there is a revenue of Hunting, Fishing Clash, we pay 5%, but where we have a loss, we cannot deduce it from these products. So the tax that we pay is on the revenue generated by Fishing Clash and Hunting Clash, not decreased by losses made on our growth titles. So we can see some volatility over periods.
Accelerating a little bit, revenues for RFS are included in the presentation. Now let's move to Fishing Clash. Is the bump on revenues compared to very bad September sending more positive signals from the game?
We have launched new content in October. It wasn't available in September. That's all that there is to it. When we launched the last fishery in Fishing Clash, it was a matter of a few weeks. Obviously, this time might deviate by two or three days, so this should give you a good image on how the revenue is going to be. Remember that this new content has a great weight in all of the games.
I understand that scaling is intended to increase revenue. Is there some potential for that in Hunting Clash?
No. No. We are decreasing marketing expenditure for Hunting Clash. We don't want to lie to you. If we can't spend on marketing, let's not do it. It's not about overspending or burning cash. We look at every dollar spent as if it was our own. I simply do not burn dollars.
Another question on the evergreen portfolio. We've seen a decrease in revenue for Airline Commander. Do you think these games are not going to achieve any success?
As with all the products, some of them do better, some of them do worse. In reality, these products have seen their best years. I remember when I joined Ten Square Games for the first time, Wild Hunt, everyone thought it was going to die, and after years, it's still around. We'll see what happens. I don't want to tell the future, because at times I said that a title has no future ahead of it, but it bounced back.
There are questions about a new stream of revenue in the group. Precisely, we're talking about adverts. Could you tell us whether it affected the behavior of players? Did you see an uplift in revenue resulted from that, or is the scale too small to tell?
Adverts are a funny species. You know that Netflix was created on the fact that you could watch a film anywhere you want, anytime you want, without adverts, and now players want to see it more games. We see that the revenue model is working for us. There is still a lot to be learned from it, which is why we made these transfers. I would say that we are not in the place where we want to be when it comes to adverts. Moreover, we have worked with our new hires for over, not even a month. So we will see how our cooperation unravels over time. But in honesty, when we concentrated on what we are missing, there is a lot to improve. If we find some hidden gems in these games, then we will excavate.
Thank you very much. There are still lots of questions. I would recommend that you read our financial results. There's a lot to be learned about our revenue and profits and other positions. If you haven't received an answer to any of your questions, I strongly encourage you to send them to me directly. We'll try to answer all of them. Thank you for being with us. Thank you for listening to us, and we are inviting you to another conference scheduled for March.