STARBREEZE investor Presentation - SEB Nordic Seminar, 10 January 2018
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STARBREEZE
investor Presentation
SEB Nordic Seminar, 10 January 2018
Slide / 1
Introduction to starbreezE
Starbreeze games and publishing
outline
Virtual reality
Financial overview
Slide / 2
Starbreeze in brief Office locations
650
San Francisco Stockholm (HQ)
Los Angeles Brussels employees2)
At a glance
§ One of the first independent studios in Northern Europe – founded
Paris Luxembourg
in 1998.
Bangalore
§ Established developer and publisher of PC and console games and & Dehradun
VR products.
Barcelona
§ Net sales of SEK 257.7m and EBITDA of SEK –59.9m in 2017 YTD.
§ Listing on Nasdaq Stockholm in October 2017
Net Sales splits Large portfolio of strong ips
By business area1) By platform1)
Other 5% Retail Console
15% 40%
Starbreeze
Games
39%
Publishing PC
56%
System Shock 3
60%
Digital
85%
1) 2017 YTD
Slide / 3 2) 30 September 2017 including Dhruva Interactive
Starbreeze evolution
CAGR: ~28% 345 357
218
142 161
31
Founded
1998 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 Q3 LTM
Net sales (SEKm)
VR ECOSYSTEM
PUBLISHING AND INVESTING IN VR
GAMES DEVELOPMENT
PHYSICAL DISTRIBUTION, FEW PLATFORMS DIGITAL DISTRIBUTION, MULTI-PLATFORM
PC (retail)
Slide / 4
Note: 2012-2015 Jan-Dec figures are not reported fiscal years
Vision
> be a leading provider in the entertainment industry by creating
world-class experiences.
Vision and Financial targets
financial Net sales Profitability Dividend policy
targets Starbreeze target is to achieve Starbreeze target is to generate No dividend in the next few
net sales of at least SEK 2 billion positive EBITDA for the fourth years, generated cash flow to
in 2020. quarter of 2018 and then on an finance the continued growth
annual basis for each and development of the
subsequent financial year. business.
Long-term policy to distribute
50% of net profit after tax.
Slide / 5
Strong Portfolio growth ahead future portfolio
~2,000
(financial target)
current portfolio
System Shock 3 Psychonauts 2
357
?
2017Q3 LTM 2020E
Net sales (SEKm)
Slide / 6
Starbreeze GAMES and publishing Slide / 7
STARBREEZE
Global consumer spend on games, USDbn Steam is the most important digital platform for pc
Current addressable market is growing
CAGR
2016–2020E
2 x
123
129
6%
11,000+
GAMES IN THE STORE
75%
OF ALL PC GAMES SOLD
116 THROUGH STEAM
109
101
Large and Y U
growing 7,000+ 17.7
addressable ACTIVE FORUM THREADS
DAILY
MILLION CCU AT ONE GIVEN
TIME
games market
W 5
125
MILLION USERS AS OF
67%
GROWTH OF USER BASE
2016 2017E 2018E 2019E 2020E FEBRUARY 2015 FROM 2014 TO 2015
Source: Newzoo (2016-2020 Global games market)
Slide / 8
Games with Continuous Technical Virtual consolidation
a context monetization progress reality
Top 10 public
gaming companies
market share1)
Trends in
M
54
43 %
%
the games
market
2015 2016
1) Game revenue of Top25
public companies up 17% in
2016, top 10 take more than
Slide / 9 half of global market.
Slide / 10
1 2 3 4
Business Be a market Drive Grow the new plat-
leader in growth in the game portfolio forms and
strategy own games existing game through geographies
development portfolio publishing for existing
game portfolio
Slide / 11Case study: PAYDAY 2
DLCS AND UPDATES
Strategy and focus in Case study:
games development >160 OVERKILL’s The Walking Dead
Release 2018 H2
1 § Develop games based on strong UNITS SOLD
Be a market
IPs, owned or licensed.
§ Hardcore action games in
>16,000,000
co-op and first person shooter PAYDAY 2 IN GROSS SALES
leader in segments.
§ Multi-platform strategy >2bn SEK‹
games including PC, console and VR.
§ Large, high quality, replayable
STEAM COMMUNITY MEMBERS
development games with state of the art
gameplay.
5,450,000 2 Narrative
st
driven co-operative
1 person shooteR
§ Storylines with repeatability to
M
enable games as a service to Based on the smash-hit
with long revenue tails. graphic novel series
Extremely strong brand, 8th
TV-series season on air, 11.3M
Action / Role play average viewership during
season 7.
Release dates
August 2013 (PC)
Slide / 12 June 2015 (Console)Games as a service activities PAYDAY 2 case study:
2 create long-term player sales trend compared to a typical game
stickiness PAYDAY2 was released in August 2013. The comparison game was released October 2014.
The chart shows the number of players until September 2015 (thus, one year after PAYDAY was released).
Drive growth Marketing
100 000
Spring break
in the Y
Crimefest
community
event
community event
existing Events Community
80 000
r -
game 60 000
Steam
portfolio Free game
DLCs 40 000
summer sale
updates
T 2
20 000
0
Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15
PAYDAY 2 Typical game
Slide / 13Case study: Dead by Daylight
Strategy and DLCS AND UPDATES Publishing games
3 focus in publishing
>10 in development
§ Broader catalogue of games
Grow with lower cost per game to
UNITS SOLD
the game
decrease individual game risk
and a more steady flow of
>3,000,000
revenues. DBD IN GROSS SALES
portfolio § Explore non-core genres.
SEK 400m
through § Storylines with repeatability to
enable games as a service to 85%STEAM COMMUNITY MEMBERS
The raft Hero
publishing with long revenue tails.
§ Flexible financing arrangement
15%
>800,000
Publishing is a complementary
business model to own games
and IP management (~0–50%
ownership).
APE-X
? ?
with lower investments and
risk per game.
Asymmetric horror
Release dates
June 2016 (PC)
Slide / 14 June 2017 (Console)4
new plat- Virtual Launching an Expansion
forms and reality established to the Asian
geographies IP on mobile market
for existing How?
§ Develop games.
§ Publishing to widen
How?
§ Using successful IPs from its
growing game portfolio to
attract mobile users within How?
§ Enter partnerships with local
partner for distribution.
game portfolio.
its existing user base.
§ Strategic collaboration with
Smilegate initiated in 2016.
portfolio why?
§ Large potential market
for premium content.
why?
§ Increase interest for
forthcoming title PAYDAY 3.
§ Mobile games market is why?
§ Asian gaming market is
large and fast-growing.
§ Geographical diversification.
large and growing.
§ VR centers to be § PAYDAY Crime War is in § Strategic collaboration
opened soon. development with release through partnerships
when? § Games in production. when? during 2018. when? for distribution in Asia.
Slide / 15Virtual reality Slide / 16
LBE global VR Revenue Forecast 2017-2021 (MUSD)
1 400 >4x
increase
1 200
55
global 1 000
187
revenues – 800
45
146
134
reaching 1.2 600
35
110
105
billion usd 400
24
73
80
825
in 2021 14
200 41
31
55
457
616
307
155
0
2017 2018 2019 2020 2021
Asia-Pacific Europe North America Other
Source: Location-Based VR entertainment Market Report, 2017-07-12, Greenlight Insights
Slide / 17IMAX The Void Zero Latency
5-25 minutes 10 minutes 45 minutes
$7-10 $55 $70
Examples 1 user
Title: John Wick VR
4 players
Title: Ghostbusters: Dimension
6-8 players
Title: Zero Latency
LBE VR Location: LA Location: Utah, Dubai Location: Japan, US, Spain
centers
Slide / 18
Source: Location-Based VR entertainment Market Report, 2017-07-12, Greenlight InsightsARCADE MULTIPLAYER THEATRICAL SEATED LARGE FIELD
1 User 4 Users 20+ Users 100+ USERS
Types of
player
experiences
Slide / 19Vr strategy – to enable premium content
Illustrative
Profit Premium Content
Location-based vr centers
StarVR headset
STOR
M
Time
Large investments to enable sale of
content
Slide / 20Business model Dynamics by type of center
Tech and content
Share of ticket Wholly-owned Partnership supplier
price 15 USD (Stockholm) (Dubai) (IMAX)
Headset, tech, pods 20-40%
Location Content 20-40%
based vr to Operations (landlords) 20-40% - -
provide
additional Costs carried by
Starbreeze
- All costs
Costs for headset,
tech, pods and content
No costs
revenue
Slide / 21Slide
Slide /
/ 22
CONFIDENTIALLarge and growing addressable games market
Established and successful games development with gaas revenue model
Proven publishing business
Starbreeze large pipeline of new titles based on strong global franchises
highlights
Large potential for content within location based virtual reality
attractive financial profile of high growth and profitability
Slide / 23Contact us Sebastian Ahlskog Ann Charlotte Svensson
CFO Head of IR and Corporate
Communications
sebastian.ahlskog@starbreeze.com anncharlotte.svensson@starbreeze.com
Slide / 24OUR ADDRESSES: STARBREEZE STUDIOS
OUR CONTACTS: WWW.STARBREEZE.COM
IR@STARBREEZE.COM
STOCKHOLM
Slide / 25THANKS!
The Starbreeze team
Slide / 26You can also read
