FUNCOM-Q409-presentation_final.pptxDisclaimer – forward looking statements
• This presentation contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are forward-looking. You should not place undue reliance on these forward-looking statements for many reasons.
• These forward-looking statements reflect current views with respect to future events and are by their nature subject to significant risk and uncertainties because they relates to events and depend on circumstances that will occur in future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward- looking statements.
• Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity or performance will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless we are required by law to update these statements, we will not necessarily update any of these statements after the date of this presentation, either to conform them to actual results or to changes in our expectations.
3Private and Confidential - Intended solely for use by recipient
Agenda
2. Key financials
3. Project status
2. Free to play MMO’s
4. Summary and outlook
4Private and Confidential - Intended solely for use by recipient
Q4 highlights
• Revenues for the fourth quarter of 2009 (Q409) were 4,316 TUSD and EBITDA was 98 TUSD
• The Company’s financial position remains strong, with 30,948 TUSD in cash as of 31. Dec., 2009
• The first Expansion Pack for Age of Conan, Rise of the Godslayer, entered it’s beta-testing phase during Q4
• The company launched the first of several planned beta-tests for it’s fist free to play MMO during December 09
• During Q1 2010, the company conducted extensive PR activities for both The Secret World and Rise of the Godslayer, leading up to larger game reveals planned for March 2010
• Neowiz, the Korean partner for Age of Conan, conducted it’s first closed beta tests during Q4, with favorable test results and feedback
• In January, the company announced the recruitment of a CEO, Miguel Caron, for it’s Canadian Company
5Private and Confidential - Intended solely for use by recipient
Agenda
2. Key financials
3. Project status
2. Free to play MMO’s
4. Summary and outlook
6Private and Confidential - Intended solely for use by recipient
Key financial summary, Q4 2009
Revenues • Main source; subscription revenues from the Age of Conan game • Revenues within previously guided range of 4,000 to 5,000 TUSD • Lower revenues compared to Q408 - due to declining revenues on the Age of Conan game • Slowly declining revenues from Anarchy Online
Earnings • EBITDA affected positively by a revaluation of expected returns on box sales and reduced provision for
future operating cost for inactive servers related to operations of Age of Conan • EBITDA affected negatively by provision for office space not in use (onerous contracts) • EBIT affected positively by the impairment charge made to Age of Conan in Q3 2009 (lower amortization)
4,316
-86
8,665
Key financial summary, January-December 2009
Revenues • Lower revenues compared to 2008 – mainly due to reduced revenues on Age of Conan • Deferred revenue by year end 2009 amounts to 4,384 TUSD
Earnings • EBITDA affected positively by a revaluation of expected returns on box sales (1,758 TUSD) and reduced
provision for future operating cost for inactive servers related to operations of Age of Conan • EBIT affected negatively by the impairment charge made to Age of Conan in Q309 and provisions for office
space not in use. • EAT affected negatively by withholding tax from the Neowiz payment
Consolidated statement of financial position • Cash balance of 30,948 TUSD as of 31 December, 2009 • High equity-to-assets ratio (82 %), low interest bearing debt • Relatively small changes in the statement of financial position from 30 September 2009 except for cash
and intangible assets.
Key financial summary, Q4 2009
0
2500
5000
7500
10000
7725
Key financial summary, Q4 2009
0
2500
5000
7500
10000
1555 1167
Key financial summary, Q4 2009
-3000
-1000
1000
3000
5000
2898
748
Key financial summary, Q4 2009
-3500
-1500
500
-363
-2666
-595
98
Agenda
2. Key financials
3. Project status
2. Free to play MMO’s
4. Summary and outlook
13Private and Confidential - Intended solely for use by recipient
14Private and Confidential - Intended solely for use by recipient
The Secret World PR PR initiativesinitiatives
•• PR initiatives increased during Q409 and Q110PR initiatives increased during Q409 and Q110
•• In December, there was a major faction reveal on In December, there was a major faction reveal on Gamespot which lead to significant coverage and Gamespot which lead to significant coverage and attention. attention. More than 200.000 views of the faction More than 200.000 views of the faction videos on Gamespot alone.videos on Gamespot alone.
•• During During FebruaryFebruary, , thethe first first inin--gamegame video video waswas releasedreleased, , withwith significant coverage and attention. significant coverage and attention.
•• New game related web sites launched during Q1 to New game related web sites launched during Q1 to strengthen game positioning and communitystrengthen game positioning and community
•• All All activitiesactivities lead up to a major PRlead up to a major PR--reveal during reveal during MarchMarch
15Private and Confidential - Intended solely for use by recipient
The Secret World PR: The Kingsmouth ARG initiativePR: The Kingsmouth ARG initiative • A “real world” website was launched with no
marketing. At first glance it looks like an ordinary website, but is filled with hints to TSW
•• Real postcards were sent to journalists and Real postcards were sent to journalists and community sites giving hints about the web sitecommunity sites giving hints about the web site
• The journalists and community sites picked up the news, and started writing about it - giving TSW significant attention
• Over 100 medias received the Kingsmouth postcard and many covered it editorially
• The site has received tens of thousands of unique visitors so far, and the Kingsmouth video has been viewed 66,000 times on Gamespot alone
16Private and Confidential - Intended solely for use by recipient
Video
The Secret World Development statusDevelopment status
•• 90 people working on project90 people working on project
•• The Secret World is approaching an The Secret World is approaching an important mile stone in March in which important mile stone in March in which several hours of gameseveral hours of game--play will be finished, play will be finished, polished and complete, testing all the core polished and complete, testing all the core game play systems in conjunction. game play systems in conjunction.
•• Key content of the next mile stone will Key content of the next mile stone will contain among others:contain among others: -- Many hours of quest gameMany hours of quest game--playplay -- Combat and RPG systems Combat and RPG systems -- Character development with abilitiesCharacter development with abilities -- PVP gamePVP game--playplay -- Polished locations with adversaries and Polished locations with adversaries and nonnon--player charactersplayer characters
18Private and Confidential - Intended solely for use by recipient
•• TextText
19Private and Confidential - Intended solely for use by recipient
Age of Conan - Status
•• Stabilization and small increase in Stabilization and small increase in customer levels in last 2.5 months, after a customer levels in last 2.5 months, after a decline during the fall of 2009decline during the fall of 2009
•• Major game update recently released Major game update recently released successfully with new features designed to successfully with new features designed to improve customer improve customer retentionretention
•• Rise of the Rise of the GodslayerGodslayer Expansion Pack Expansion Pack beta testing in beta testing in progressprogress
•• Focusing on Focusing on flaterflater stages of expansion stages of expansion implementation implementation
20Private and Confidential - Intended solely for use by recipient
Age of Conan – Sales and marketing
•• Build up of press coverage for expansion packBuild up of press coverage for expansion pack
•• Successful live demonstrations of expansion Successful live demonstrations of expansion material in partnership with Xmaterial in partnership with X--FireFire
•• Increased activity on social networking platforms Increased activity on social networking platforms including Facebook and Twitter to engage with including Facebook and Twitter to engage with usersusers
•• Unlimited trial offerings in Q4 brought more new Unlimited trial offerings in Q4 brought more new users into the gameusers into the game
•• Sales campaigns in Q4 successfully moved more Sales campaigns in Q4 successfully moved more users to longer term users to longer term subscriptionssubscriptions
•• Received ”Most Improved Game of 2009” award Received ”Most Improved Game of 2009” award from MMORPG.comfrom MMORPG.com
21Private and Confidential - Intended solely for use by recipient
Age of Conan – Korea, with partner Neowiz
•• Major presence at the GStar show in BusanMajor presence at the GStar show in Busan
•• Broad press coverage after the showBroad press coverage after the show
•• Successful closed beta stages in KoreaSuccessful closed beta stages in Korea
22Private and Confidential - Intended solely for use by recipient
Age of Conan – Product focus
Product expansionProduct expansion
•• Introduction of overIntroduction of over--time benefitstime benefits •• Content updatesContent updates •• Expansion pack with more content and deeper RPG systemsExpansion pack with more content and deeper RPG systems
Continue to improve trial distributionContinue to improve trial distribution
•• New launcher technologyNew launcher technology •• Reduced client sizeReduced client size •• Advanced streaming optionsAdvanced streaming options •• Improved and more varied trial offeringsImproved and more varied trial offerings
23Private and Confidential - Intended solely for use by recipient
Market and technology
MarketMarket
•• No additional high profile, highNo additional high profile, high--end MMOs announced in last quarterend MMOs announced in last quarter •• Limited set of high end high quality MMOs slated for release in next yearsLimited set of high end high quality MMOs slated for release in next years •• High end high quality MMOs have sold >1.000.000 copies in last years High end high quality MMOs have sold >1.000.000 copies in last years ––
WAR, Age of Conan and AionWAR, Age of Conan and Aion •• Aion, launched Q32009, has established a very significant subscriber baseAion, launched Q32009, has established a very significant subscriber base
TechnologyTechnology
•• DreamWorld Technology powers both Age of Conan and The Secret WorldDreamWorld Technology powers both Age of Conan and The Secret World •• Significant updates to engine in H2 2009 Significant updates to engine in H2 2009 –– Gfx platform, content production Gfx platform, content production
tools and installation/streaming technologytools and installation/streaming technology •• DreamWorld Technology enables relatively faster development of future DreamWorld Technology enables relatively faster development of future
highhigh--end concepts. Key competitive advantage for Funcomend concepts. Key competitive advantage for Funcom
24Private and Confidential - Intended solely for use by recipient
Video
Agenda
2. Key financials
3. Project status
2. Free to play MMO’s
4. Summary and outlook
26Private and Confidential - Intended solely for use by recipient
Funcom free-to- play initiative
Funcom’s free-to-play initiative
• Smaller teams, 10-15 people
• Streaming
Pets vs. Monsters Time lineTime line
• First external beta • Multi Server Support • Distribution Technology
• Installation • Client size
• Norwegian • Quick fixes
No of testers: 2500, mostly US based
Key focus areas identified: Install process Fixed for Mar beta test Too wide demgph. Fixed for Mar beta test Performance Fixed for Mar/May beta test Color RPG Fixed for May beta test GUI & Pets Restructure for May beta test World explanation Fixed for May beta test
Key positives: Tech stability Game concept fits target demographic Game play immediacy works World design resonates with target demographic Collection aspects resonate with target demographic
Funcom’s free-to-play initiative Limited beta, DecLimited beta, Dec--Jan, summaryJan, summary
30Private and Confidential - Intended solely for use by recipient
Pets vs. Monsters Limited Open Beta Limited Open Beta -- Testing distribution, game play and settingTesting distribution, game play and setting
• Small Scale (<10K) • Test fun factor and conversions. Start iterating in live environment
Visitors X%
Video
Agenda
2. Key financials
3. Project status
2. Free to play MMO’s
4. Summary and outlook
33Private and Confidential - Intended solely for use by recipient
Summary and outlook
Summary Financials: • Revenues of 4,316 TUSD, EBITDA of 98 TUSD for Q4 • Positive EBITDA of 4,125 TUSD for 2009 compared to 2,728 TUSD for 2008 • Solid financial situation with 30,948 TUSD in cash
Summary Operations: • During Q1 2010, the company has conducted extensive PR activities for both
The Secret World and Rise of the Godslayer, leading up to larger game reveals planned for March 2010
• The first Expansion Pack for Age of Conan, Rise of the Godslayer, entered it’s beta-testing phase
• Neowiz, the Korean partner for Age of Conan, conducted it first closed beta test with favorable test results and feedback
• Miguel Caron was recruited as CEO for Funcom Games Canada
Financial Outlook: • Somewhat decreasing revenues.
34Private and Confidential - Intended solely for use by recipient
Agenda
2. Key financials
3. Project status
2. Free to play MMO’s
4. Summary and outlook
35Private and Confidential - Intended solely for use by recipient
Statement of financial position
Profit and loss account
Interim segment results
Last slide