Monsters

Enad Global 7 Year-End and Q4 2022 Investor Presentation

Enad Global 7’s year-end and fourth-quarter 2022 financial results demonstrate significant growth and a strategic shift toward long-term operational stability.

• Enad Global 7 achieved full-year 2022 net revenue of SEK 1,866 million, a 27.1% year-over-year increase, with adjusted EBITDA growing 49% to SEK 483 million.
• The game segment drove performance with 83% revenue growth, largely fueled by 'My Singing Monsters,' which became the group's highest-grossing title and accounted for 46% of segment revenue in Q4.
• The company ended 2022 debt-free with a net cash balance of SEK 304 million after executing a strategic pivot to divest from unproven intellectual properties.

Dragon Quest and HD-2D RPGs on Live Streaming

The analysis examines the live-streaming potential for the upcoming Dragon Quest III HD-2D Remake by evaluating historical viewership trends of the Dragon Quest franchise and the broader HD-2D RPG genre.

• Dragon Quest viewership is trending upward, with the 2023 spin-off Dragon Quest Monsters: The Dark Prince generating 6.8 million hours watched in its debut week.
• The Dragon Quest series relies heavily on a core Japanese fanbase, evidenced by the top 20 streamers for The Dark Prince being exclusively Japanese and two channels alone accounting for 3.7 million hours watched.
• HD-2D RPGs demonstrate strong streaming potential, with Sea of Stars leading the genre at 1.9 million hours watched in its first week, outperforming Octopath Traveler’s 1.4 million.

Enad Global 7 Interim Report: Apr-Jun 2024

Enad Global 7 faced a difficult second quarter in 2024, characterized by a 27 percent year-over-year decline in net revenue to SEK 352.7 million.

• Enad Global 7 reported a 27% year-over-year revenue decline to SEK 352.7 million for Q2 2024, driven by a lack of new releases and the performance normalization of My Singing Monsters.
• The company recorded an operating loss of SEK 25.9 million and a net loss of SEK 38.8 million for the second quarter.
• Management is implementing a restructuring plan to achieve SEK 103 million in annual cost savings, with primary operational adjustments focused on the Toadman and Petrol units.

Square Enix Holdings Financial Results Briefing: Nine-Month Period Ended December 31, 2023

Square Enix Holdings reported financial results for the nine-month period ending December 31, 2023, reflecting a period of mixed performance characterized by growth in net sales but declines in operating and net income.

• Square Enix reported consolidated net sales of ¥257.6 billion for the nine-month period ending December 31, 2023, a marginal year-over-year increase of ¥2.0 billion.
• Operating income fell to ¥34.9 billion and net profit dropped to ¥26.7 billion, largely due to reduced foreign exchange gains and the absence of prior-year divestiture income.
• The Digital Entertainment segment saw declines in both sales and operating income, as high development and advertising costs for HD titles like Final Fantasy XVI and Dragon Quest Monsters: The Dark Prince offset revenue gains.

Enad Global 7 Interim Report: Jan-Mar 2024

Enad Global 7 experienced a period of contraction during the first quarter of 2024, characterized by a significant year-over-year decline in financial performance.

• Enad Global 7 reported a significant Q1 2024 downturn, with net revenue falling 33.2% to SEK 381.7 million and adjusted EBITDA dropping 67.5% to SEK 61.7 million.
• The financial decline was primarily driven by a 69% revenue drop in the Big Blue Bubble division, largely due to a difficult year-over-year comparison with the 2023 performance of My Singing Monsters.
• Management has initiated restructuring at the Toadman and Petrol subsidiaries, including headcount reductions expected to generate SEK 35 million in annual cost savings.

Enad Global 7 Annual Report 2023

Enad Global 7 achieved a significant financial turnaround in 2023, reporting net revenue of SEK 2,045 million and a net profit of SEK 199.6 million, a marked improvement over the substantial losses recorded in 2022.

• Enad Global 7 achieved a financial turnaround in 2023 with SEK 2,045 million in net revenue and a net profit of SEK 199.6 million, reversing the losses recorded in 2022.
• The company has set a 2026 financial target of SEK 3 billion in revenue and SEK 1 billion in adjusted EBITDA, supported by a planned SEK 360 million investment in middle-market publishing and new growth vectors.
• Financial stability has been strengthened by eliminating all external debt liabilities and maintaining a liquidity position of approximately SEK 480 million in cash and cash equivalents.

Infection Free Zone Comes in 'Hot' to Steam Next Week

Market analysis of the video game industry for early April 2024 reveals a surge in high-performing Steam debuts and shifting trends across console platforms.

• The upcoming city-builder Infection Free Zone is projected to reach 5,000 to 10,000 concurrent users (CCU) at launch, supported by 93,700 Steam followers and a successful prologue that previously hit 5,000 CCU.
• Content Warning demonstrated the efficacy of a 24-hour free-to-own 'stealth launch' strategy, resulting in 205,000 CCU and 6.2 million owners before shifting to a paid model.
• High follower counts do not guarantee commercial success, as evidenced by Monsters Domain, which failed to convert its audience into active players due to technical issues and poor polish.

Enad Global 7 Year-End and Q4 Report 2023

Enad Global 7 achieved a significant financial turnaround during the 2023 fiscal year, transitioning from a substantial net loss in 2022 to a net profit of SEK 205.1 million.

Annual Report: January – December 2024

Enad Global 7 (EG7) experienced a period of significant transition and consolidation during the 2024 fiscal year, characterized by strategic restructuring in response to a volatile global gaming market.

• EG7 reported a net loss of SEK 236.4 million in 2024, driven by a 16.2 percent revenue decline to SEK 1,713.0 million and a SEK 342.3 million goodwill impairment.
• Management initiated cost-saving measures, including the closure of Toadman and restructuring at Piranha Games, to achieve SEK 191.0 million in annual savings by the second half of 2025.
• The group’s live-service portfolio, led by Daybreak and Big Blue Bubble, generated 68.9 percent of total revenue, serving as the primary source of cash flow stability.

Enad Global 7 Interim Report: Jul-Sep 2023

Enad Global 7 demonstrated robust financial performance during the third quarter of 2023, achieving net revenue of SEK 517.3 million, which represents a 16.4% year-over-year organic growth rate.

• Enad Global 7 set a 2026 financial target of SEK 3 billion in revenue and SEK 1 billion in adjusted EBITDA.
• Q3 2023 net revenue reached SEK 517.3 million, reflecting 16.4% year-over-year organic growth.
• Cumulative revenue for the first nine months of 2023 totaled SEK 1,571.9 million, up from SEK 1,306.9 million during the same period in 2022.

Talking to the Monsters

The integration of generative machine learning into video game development, specifically through Microsoft’s partnership with Inworld AI, represents a significant shift toward automating narrative and character interactions.

• Microsoft has entered a multi-year partnership with Inworld AI to integrate generative machine-learning tools into Xbox development, aiming to automate the creation of dialogue trees, quest lines, and scripts.
• The Inworld AI technology functions similarly to LLMs like ChatGPT, allowing NPCs to generate unique, dynamic responses to player input in real-time.
• A hands-on evaluation of the 'Inworld Origins' tech demo revealed significant technical limitations, including noticeable latency, poor speech-to-text accuracy, and frequent conversational glitches.

Enad Global 7 Interim Report: Apr-Jun 2023

Enad Global 7 demonstrated a robust financial recovery during the second quarter of 2023, characterized by a shift toward profitability and improved operational efficiency.

• Enad Global 7 shifted to profitability in the first half of 2023, reporting a net profit of SEK 89.7 million compared to a net loss during the same period in 2022.
• The company achieved a 4.3% year-over-year revenue increase to SEK 482.9 million in Q2 2023, driven by strong performance from titles including My Singing Monsters, Core Keeper, and Shadows of Doubt.
• Adjusted EBITDA rose 34.4% to SEK 113.3 million, representing a 23.5% margin for the quarter.