Q2 2010 27 August
Disclaimer – 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. 2 Private and Confidential - Intended solely for use by recipient
Agenda 1. Key highlights Q2 2010 2. Key financials 3. Project status 1. Large- scale MMO’s 2. Free to play MMO’s 4. Summary and outlook 5. Extract from Q2 2010 financial report 3 Private and Confidential - Intended solely for use by recipient
Q2 highlights • Revenues for the second quarter of 2010 (Q210) were 5,604 TUSD, up 46% from Q110, and EBITDA was 1,644 TUSD • The Company’s financial position remains strong, with 19,236 TUSD in cash as of 30. June, 2010 and an equity ratio of 87% • The first Expansion Pack for Age of Conan, Rise of the Godslayer, was launched on May 11. The launch resulted in a significant increase in players, playtime and customers • Neowiz, the Korean partner for Age of Conan, launched the game in open beta on May 20. Monetization was implemented in July. • The Company arranged its second major PR-event for The Secret World, showing in-game footage to the world press at Gamescom in Cologne in August • The Company launched the third beta- test phase for it’s first free to play MMO, Pets vs Monsters, during Q1/Q2 • The Company is planning to launch the online multiplayer game, Bloodline Champions, during Q4 • The company is planning to implement monetization for Pets vs Monsters Q4 2010 4 Private and Confidential - Intended solely for use by recipient
Agenda 1. Key highlights Q2 2010 2. Key financials 3. Project status 1. Large- scale MMO’s 2. Free to play MMO’s 4. Summary and outlook 5. Extract from Q2 2010 financial report 5 Private and Confidential - Intended solely for use by recipient
Key financial summary, Q2 2010 TUSD Q2,2010 Q1,2010 Revenues 5,604 3,835 EBITDA 1,644 -737 EBIT 562 -1,673 EAT 253 -1,507 Revenues • Main source; subscription revenues from the Age of Conan game • Higher revenues compared to Q110 - due to revenues related to the Age of Conan expansion pack launched in the quarter Earnings • EBITDA affected positively by reduced hosting costs for servers in use for Age of Conan from May 2010 • EBITDA affected positively by lower calculated cost for share based payment • EBITDA affected negatively by higher royalty cost on revenues from Age of Conan • EBIT affected negatively by higher amortization of Age of Conan (expansion pack) 6 Private and Confidential - Intended solely for use by recipient
Key financial summary, half year 2010 TUSD 2010 2009 Revenues 9,439 13,870 EBITDA 907 3,647 EBIT -1,111 711 EAT -1,254 1,231 Revenues • Lower revenues compared to 2009 – mainly due to reduced revenues from Age of Conan • Deferred revenue as of June 2010 amounts to 4.3 MUSD Consolidated statement of financial position • Cash balance of 19,236 TUSD as of 30 June, 2010 • High equity-to-assets ratio (87 %) • No interest bearing debt • Release of 240 TUSD in provision for capital duty – taken directly to equity. • Equity issues of 185 TUSD during Q2 (exercise of options) • Relatively small changes in the statement of financial position from Q1 2010 except for cash, intangible assets and short term debt. 7 Private and Confidential - Intended solely for use by recipient
Key financial summary, Q2 2010 Quarterly revenues (TUSD) 7500 5690 5604 4316 3835 5000 2500 0 Q3 2009 Q4 2009 Q1 2010 Q2 2010 8 Private and Confidential - Intended solely for use by recipient
Key financial summary, Q2 2010 Q2 revenues (TUSD) 12231 10000 6145 7500 5604 5000 1084 2500 0 Q2 2007 Q2 2008 Q2 2009 Q2 2010 9 Private and Confidential - Intended solely for use by recipient
Key financial summary, Q2 2010 EBITDA (TUSD) 1644 2000 1000 380 98 0 -1000 -737 -2000 Q3 2009 Q4 2009 Q1 2010 Q2 2010 10 Private and Confidential - Intended solely for use by recipient
Key financial summary, Q2 2010 EBITDA (TUSD) 4000 3000 1644 2000 748 1000 0 -1000 -1112 -2000 -1882 -3000 -4000 Q2 2007 Q2 2008 Q2 2009 Q2 2010 11 Private and Confidential - Intended solely for use by recipient
Agenda 1. Key highlights Q2 2010 2. Key financials 3. Project status 1. Large- scale MMO’s 2. Free to play MMO’s 4. Summary and outlook 5. Extract from Q2 2010 financial report 12 Private and Confidential - Intended solely for use by recipient
13 Private and Confidential - Intended solely for use by recipient
Age of Conan - Status • The first Expansion Pack for Age of Conan, Rise of the Godslayer, was launched on May 11 and received excellent review scores • 85% average review score • 85% on Gamespot • 90/100 Ten Ton Hammer • 8.5/10 MMORPG.com • The launch resulted in a significant increase in players, playtime and customers 14 Private and Confidential - Intended solely for use by recipient
Age of Conan – Marketing update • Summer expansion trial campaigns completed • New active subscription campaigns • New incentives for longer term subscriptions • Age of Conan was launched in Korea during Q2 • Monetazation in Korea was initiated in Q3 15 Private and Confidential - Intended solely for use by recipient
Age of Conan – Future development • Building new content to continuously improve retention including large version 2.1 update, new raid content, new mini-game based PVP content and expanding social and guild content • Integrating latest Dreamworld technology • Montreal development team established • Business model considerations. Subscription model still benefical and attractive and there is a shift towards more hybrid models with a combination of subscriptions and microtransactions 16 Private and Confidential - Intended solely for use by recipient
17 Private and Confidential - Intended solely for use by recipient
The Secret World PR initiatives • Major press event at Games Convention in August with over 100 journalists attending demos • Showcasing the first hour of game-play • First extensive in-game, behind the scenes video, to be released on August 27 as the embargo on game coverage is lifted. • Expect broad coverage in the online gaming press in the next days. 18 Private and Confidential - Intended solely for use by recipient
The Secret World Development status • 110 people working on project • The development team is close to full size. The team has been further strengthened by the transfer of senior resources from Conan. • Making solid progress on all the main areas of the game • Key focus areas include: • Mission and content production across all regions of the game • Extending and implementing further areas of the character development systems • Game play testing, iterations and improvements 19 Private and Confidential - Intended solely for use by recipient
Intro video clippings 20 Private and Confidential - Intended solely for use by recipient
Market update, Large-scale MMO’s • WOW retains position as major game in the Western World • Aion, launched in 2009, performing well • Relatively limited competition in the space: Games to watch – Guild Wars 2, Star Wars: The Old Republic, Final Fantasy, Warhammer 40K, Dust • Strong market performance across Asian markets and in developing markets • Continued growth in online gaming and digital distribution of gaming content in Western World • More large scale games moving to hybrid subscription/micro- transaction models to increase ARPU 21 Private and Confidential - Intended solely for use by recipient
Agenda 1. Key highlights Q2 2010 2. Key financials 3. Project status 1. Large- scale MMO’s 2. Free to play MMO’s 4. Summary and outlook 5. Extract from Q2 2010 financial report 22 Private and Confidential - Intended solely for use by recipient
• PR & Marketing • Major presence at Gamescom • Substantial positive coverage on mainstream gaming sites • Hired James Harding as eSport Manager • Development status • Final stages of Beta • Proprietary Item Shop in development • Tournament System being finalized • Core game is polished and solid • Launch target: Q4 2010 23 Private and Confidential - Intended solely for use by recipient
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