Mobile game company Next Games announces its intention to launch an initial public offering and listing on Nasdaq First North Finland marketplacePRESS RELEASE 27 FEBRUARY 2017, 8.00 am EET Mobile game company Next Games announces its intention to launch an initial public offering and listing on Nasdaq First North Finland marketplace NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SOUTH AFRICA, SINGAPORE OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. Next Games Oy (”Next Games” or the ”Company”), a Finnish mobile game developer and publisher, today announces its intention to proceed with an initial public offering (“IPO”) and a listing of its shares on the Nasdaq First North Finland marketplace maintained by Nasdaq Helsinki Ltd. Next Games is a developer and publisher of mobile games focusing on licensed games. The Company is an industry pioneer in the service-based mobile games that are based on entertainment franchises, such as movies, TV series or books. Next Games’ The Walking Dead: No Man’s Land mobile game, which is based on the popular American TV series, has been downloaded 16 million times. The Walking Dead: No Man’s Land reached a #1 free download rank in the App Store in the U.S. when it was launched in October 2015. It has since reached the Top-50 grossing list in App Store ranking for iPhone games. The most significant geographic markets for Next Games are North America and Europe. The Company’s games are distributed through the Apple App Store and the Google Play platforms. The Company’s games are available to download for free, while players can make cash purchases of in-game virtual items. Teemu Huuhtanen, CEO of Next Games: ”Next Games has established itself as a major developer and publisher of service-based mobile games. Our investments in The Walking Dead: No Man’s Land enabled us to triple our revenue in 2016 and our business became profitable in the second half of the year. Our achievements in 2016 are a testament to the effectiveness of our business model and our experienced team’s passion and motivation to make service-based games. The cornerstone of our strategy is to develop and publish mobile games based on entertainment franchises. The effectiveness of our business model, demonstrated by our track record, forms a foundation for bringing new games to the market. The contemplated IPO plays a key role in supporting Next Games’ development to an even stronger mobile game company. The proceeds from the contemplated IPO are intended to be used to support our growth.” The IPO The contemplated IPO is expected to consist of an approximately EUR 30 million new share issue. New shares are expected to be offered to private individuals and entities in Finland, Next Games’ personnel in Finland and institutional investors in Finland and internationally. The objective of the contemplated IPO is to enable Next Games to implement its growth strategy. The contemplated IPO and listing on the Nasdaq First North Finland -marketplace will also allow Next Games to obtain access to capital markets, broaden its ownership base and increase the liquidity of the shares. Furthermore, the contemplated IPO is expected to strengthen Next Games’ recognition and brand awareness among customers, employees, investors and the gaming sector in general, and thus enhance the Company’s competitiveness. The Company expects to use the net proceeds from the contemplated IPO to ensure sufficient own funding for growth investments, including but not limited to: new licensing agreements, development and marketing of new game titles and further development and marketing of The Walking Dead: No Man’s Land. Danske Bank A/S, Helsinki branch is acting as the sole lead manager in the contemplated IPO. Avance Attorneys Ltd is acting as the legal adviser to the Company. Roschier Attorneys Ltd is acting as the legal adviser to the sole lead manager. Next Games highlights
- Next Games operates in the mobile gaming market, whose global revenue is estimated to have surpassed other gaming segments in 2016 and which is also estimated to grow strongly in the future.
- The Company believes that its focus on licensed games presents clear advantages: in order to increase their brand value and longevity, IP owners are increasingly extending their franchises to games, especially mobile games. In licensed games, the popularity of the entertainment franchise and existing fan base enable more efficient player acquisition for Next Games.
- In addition to having an experienced management team, the Company has an extensive network within the gaming and entertainment industries. The Company’s management believes its strong networks and relationships are an important competitive advantage when competing for game development licenses for major entertainment franchises.
- Next Games has demonstrated its ability to win IP rights for large franchises, and the strong results achieved with The Walking Dead: No Man’s Land are a testament of the Company’s ability to develop successful licensed games.
- The Company has a very strong player acquisition model supported by the large amount of organic downloads  as well as an advanced analytical approach to player acquisition and marketing.
- Next Games has shown its ability to create a truly engaging game experience, which commits players to the game and helps the Company maintain a high player retention rate and consequently strong monetisation levels. A focal point of this is the Company’s Game-as-a-Service model, which translates into a long-term service-oriented gaming concept.
- The Company has a cloud-based and scalable technology platform, which has proven to be effective and trustworthy in launching and maintaining global operations.
- Next Games’ growth strategy comprises new game development, continuous development of The Walking Dead: No Man’s Land game, geographical expansion and further development of the advertising revenue model.
- Next Games is currently developing two new games. The Company aims to launch at least one new game per year starting in 2018.
|For the three months ended December 31,||For the year ended December 31,|
|Thousand euros (unless otherwise stated)||2016 (FAS)||2015 (FAS)||2016 (FAS)||2015 (FAS)|
|(unaudited, unless otherwise stated)|
|Gross bookings ||12,562||7,360||33,593||9,708|
|Gross margin ||3,781||1,338||8,252||744|
|Gross margin (% of revenue)||33%||18%||27%||8%|
|EBITDA margin (% of revenue)||15%||-17%||-4%||-68%|
|Adjusted EBITDA ||1,375||-1,287||-709||-6,649|
|Adjusted EBITDA margin (% of gross bookings)||11%||-17%||-2%||-68%|