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#G5 Entertainment: #Bestappever awards for Android announced

21 May

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The winners of the 2013 Bestappever-Awards for Android have been announced (http://www.bestappever.com/android/awards/2013/).

VCPiconWhile it was not able to claim a gold medal in one of the categories, G5 Entertainment did manage to come on third place in “Best Casual Game” with its bestseller Virtual City Playground (http://www.bestappever.com/android/awards/2013/winner/gmca). G5 Entertainment also received honorable mentions for “Most Addictive Game” with Virtual City Playground, “Best Lead Character” with Fate of the Pharaoh and “Best Game Graphics” with Abyss: The Wraiths of Eden and Dark Arcana: The Carnival.

Nice recognitions for G5, which underline the quality of their games and their popularity among gamers, even on Android / Google Play where the company is still lagging the monetization success it has on iOS, so far. We are eagerly awaiting additional free-to-play games for Google Play.

Nordic Investor

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#G5 Entertainment: Ranking check

20 May

newlogoTime for our weekly ranking check for G5 Entertainment again. We are glad to note that Secret Society continues its success around the world. The game continues to be among the top 5o grossing games on iPad in the USA, which (as we have discussed in a recent article), could be worth around SEK 3.5m per quarter. Adding revenues from other countries and also iPhone (to a lesser extent), we believe the game alone could generate around SEK 10m per quarter at current performance levels. Today Secret Society is ranked #50 top grossing in the USA on iPad. It is also ranked #34 in Canada, #106 in Germany, #48 in France, #66 in South Korea, #49 in Russia, #64 in Italy and #88 in the UK.

Secret Society’s success clearly puts the less favourable development on Google Play in the shadow. G5 is still struggling to find a winning concept for Google Play and the fact that so far only one free-to-play game (Virtual City Playground) is released for that platform, certainly contributes to that problem. We hope management will soon address that issue. According to CEO Vlad Suglobov, G5 is working on several free-to-play games to be released across platforms.

Number of G5 Entertainment games among the top grossing charts for iOS:

(We are screening the app markets of Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Netherlands, Russia, South Korea, Spain, Sweden, UK and USA)

G5apple

Number of G5 Entertainment games among the top grossing charts for Google Play:

(For Google Play, we are screening the app markets of Germany, Denmark, Sweden, and USA)

G5GooglePlay

Secret Society top grossing rankings on iPad:

G5-Secret Society

 

Nordic Investor

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#Apple #app store: 800 downloads per second

17 May

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Apple has announced that 50 billion apps have now been downloaded from the App Store since the marketplace’s inception, with the milestone having been passed 58 months after launch. The total, which was conveniently hit right in the middle of rival Google’s I/O conference in San Francisco, has resulted in Apple publishing a flood of statistics about the App Store, with the marketplace now averaging 2 billion app downloads a month.

Apple also claimed that 800 apps are now being downloaded from the store every single second. “Apple would like to thank our incredible customers and developers for topping 50 billion apps downloaded,” said senior vice president of internet software and services Eddy Cue.

“The App Store completely transformed how people use their mobile devices and created a thriving app ecosystem that has paid out over nine billion dollars to developers. We’re absolutely floored to cross this milestone in less than five years.”

The stats suggest the App Store is no longer the sole driving force behind the industry, however. Just hours before, Google revealed that Google Play – just one of many Android app stores – has hit 48 billion app downloads, with 2.5 billion in the last month alone.

If you want to participate form the ever growing app market, make sure you’ll take a closer look at our top-pick G5 Entertainment.

Nordic Investor

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#G5 Entertainment: Solid Q1 2013 report; future looks bright

15 May

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Mobile gaming developer and publisher G5 Entertainment reported its Q1 2013 report this morning, slightly beating its preliminary numbers released in early April.

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Consolidated revenue for the period came in at 27 557 KSEK, up 58% compared to 17 388 KSEK for the same period of 2012. This is  compares to the the previously communicated forecast of 27 MSEK. EBIT adjusted for non-recurring items (related to the ongoing relisting process to Nasdaq OMX), amounted to SEK 9.4m, up 62% compared to 5 753 KSEK for the same period of 2012. The implied EBIT margin reached 34%, 100bp above the level recorded one year ago. Earnings per share for the period are 0.97 SEK. This result is in line with the previously communicated forecast.  During the period, the group had positive cash flow of 30 971 KSEK, which was boosted by the proceeds of the new share issue amounting to SEK 34m. Cash reserves on March 31st 2013 amounted to 44 336 KSEK.

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G512Mtrailing

Regarding “The Secret Society”, G5′s hidden object free-to-play game released in November 2012, the company states that the game continued gaining the audience and improving monetization as G5 rolled out the updates for the game. The game increased average daily revenue through the period and became the highest grossing among G5 games. After the end of Q1 2013, The Secret Society, has received updates much anticipated by players, featuring new content and features, and addressing a number of known issues with the game. As a result, the game went up in Top Grossing ranks worldwide considerably, entering Top 50 Grossing Games in USA on iPad, and becoming the highest grossing game in G5’s portfolio on a continuous basis. G5 also states that it has 70 games (each for multiple platforms) in the development pipeline to be published in 2013 and 2014. This number also includes a number of free-to-play games to be released starting in 2013.

The big question mark remains on exactly how much money Secret Society is generating for G5 and its shareholders. With top grossing positions around #50 in the US, we have previously argued that it could be generating around SEK 10m (http://nordicinvestor.net/2013/04/28/g5-entertainment-secret-society-saves-party/). This numbers remains, however, highly theoretical and we would appreciated input from our readers on exactly how much a top 50 grossing position has generated for them on average.

G5 Entertainment and its CEO Vlad Suglobov do not want to give any more details around the topline contribution from Secret Society at this point. Nordic Investor put a couple of questions to Mr Suglobov following today’s results release:

Nordic Investor: Is there any chance that you can be a bit more specific about Secret Society’s impact on the numbers? You mention that it is the highest grossing game on a continuous basis. If you compare it with VCP’s importance back in q3 2012, is secret society more or less important than that for your overall performance? Can you give any hint on what a top 50 grossing rank in the US for iPad is worth in dollars ( on average)?

Vlad Suglobov: I cannot give you specific details on the revenue of The Secret Society. All I can say is that it’s been #1 in our Top10 on the site for quite a while and I can re-iterate that it’s been making more money than any other game for some period of time now. Although note that it was communicated in “after the end of the period” part of the report.

Nordic Investor:  I saw you released your first game for windows 8 last week. Is the porting process to this platform very time consuming or can we expect several other releases within short?

 

Nordic Investor: Can you say some words about the contracting with new 3rd party developers: how is that proceeding? Would you say you sign increasingly more contracts or is the flow rather stable?

 

Nordic Investor: Can you say anything about if and when secret society will come to android?

Vlad Suglobov: We aim to release our games across all platforms we support, so follow our news for TSS Android information.

G5′s current valuation on the stock market is by no means in sync with its operational performance.  Even at an annual growth rate of “only” 60%, G5 can easily earn an EPS of around SEK 4 (excluding non-recurring items) in 2013, which would imply a 12-months forward PE-ratio of below 13x.  International companies with exposure to mobile gaming (but with much lower growth than G5) are currently trading at expected 2013 PE-ratios of around 25x (Gameloft) and 20x (Electronic Arts). Glu Mobile is not expected to make any profit this year but looking at their PE-ratio on 2014 estimates, the share is currently trading at a PE-ratio of 30x. Needless to say that we expect a signficant revaluation of the G5 Entertainment share once international investors can invest in the company when it is listed on Nasdaq OMX. What do you expect will happen when foreign analysts will start to include G5 in their peer group valuation tables? Gameloft is covered by several French investment banks while Glu Mobile, is covered by nine American investment banks and brokerages.

 

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#App Store: 50th billion downloads approaching

14 May

Apple once again is counting up to its next digital sales benchmark. This time it’s to 50 billion downloads on the App Store, its digital software store that launched in 2008.

Similar to previous contests, the person who downloads the 50 billionth app gets $10,000 in App Store credit. The company is also doling out $500 gift cards to the 50 people who buy an app immediately afterwards.

Apple’s last big contest for the App Store was for the 25 billion benchmark last March. Chunli Fu, a customer from Qingdao, China was winner, and nabbed a $10,000 gift card and a trip to one of Apple’s stores to pick it up. More recently, Apple paid out a 10,000 Euro iTunes gift card for the 25th billion song sold on iTunes back in February.

Along with the giveaway, Apple’s listed its top 25 all-time paid and free applications on both the iPhone and iPad. Rovio’s Angry Birds and Facebook top that list on the iPhone, while Apple’s Pages and Microsoft’s Skype hold that spot on the iPad.

For last year’s contest, it took people 15 days to download approximately 700 million apps, and both the number of iOS devices and the library Apps have increased since then. As of January, Apple said it has sold more than 500 million iOS devices, up from 365 million at the end of last March. It’s also currently up to 850,000 iOS apps as opposed to the figure of around 600,000 apps from last April.

The app market continues to grow rapidly. As an investor, make sure to look for profitable app developers with an established track-record. G5 Entertainment is such a company and its current valuation at a 12M forward PE-ratio of <12 times is very attractive indeed.

Nordic Investor

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#G5 Entertainment: First game launched for #Windows 8

10 May

 G5 Entertainment has launched its first game for Windows 8. Yet another stream of revenue has been opened. G5 starts with one of its “oldtimers” – “Supermarket Mania 2“, a game where it owns the IP and where depreciations are already done.  (http://www.aktietorget.se/NewsItem.aspx?ID_News=65508&Language=1)

Expect to see more G5 games to be ported to Windows 8 in the near future.

Nordic Investor

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#G5 Entertainment: Ranking check; Secret Society performs well

9 May

newlogoSomewhat delayed we are releasing our weekly ranking check for G5 Entertainment today. The overall rankings for the games portfolio as such show no major new trend compared with recent weeks. What does continue to stand out is Secret Society and its success around the world, primarily on iPad. The game continues to be among the top 5o grossing games on iPad in the USA, which (as we have discussed in a recent article), could be worth around SEK 3.5m per quarter. Adding revenues from other countries and also iPhone (to a lesser extent), we believe the game alone could generate around SEK 10m per quarter at current performance levels. Trends in recent days were actually upwards and today Secret Society is ranked #44 in the USA. It is also ranked #34 in Canada, #58 in Germany, #51 in France, #64 in South Korea, #57 in Russia, #53 in Italy and #73 in the UK.

Elsewhere, G5 Entertainment released the sequel to its smash-hit Special Enquiry Detail for iPhone and iPad yesterday. The game was highly successful with top 10 grossing positions in several countries. Check out this review of the PC version which is very promising: http://www.examiner.com/review/the-impatient-gamer-reviews-special-enquiry-detail-engaged-to-kill

We believe comments regarding the success of Secret Society could be the highlight next week when G5 will present its Q1 2013 report on May 15th. As always, the actual numbers are not too much of a surprise due to the fact that G5 has already released preliminary numbers at the beginning of April in is usual mid-quarter update.

Number of G5 Entertainment games among the top grossing charts for iOS:

(We are screening the app markets of Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Netherlands, Russia, South Korea, Spain, Sweden, UK and USA)

G5Apple

Number of G5 Entertainment games among the top grossing charts for Google Play:

(For Google Play, we are screening the app markets of Germany, Denmark, Sweden, and USA)

G5GooglePlay

Secret Society top grossing rankings in USA on iPad:

Secret Society

 

Nordic Investor

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#G5 Entertainment: Appoints new CFO

9 May

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In its preparations for the big re-listing to Nasdaq OMX during 2013, mobile gaming company G5 Entertainment has appointed a new CFO.

On Monday May 6th, G5 announced that Mr Odd Bolin has been appointed CFO as of May 2nd, taking over from Sergey Shults, who will remain within the company as Head of Accounting.

Says G5 CEO Vlad Suglobov: “The upcoming relisting to Nasdaq OMX Stockholm during H2 2013 puts increased demands on our company in terms of financial reporting and market information. With Odd joining us as CFO, we want to utilise his pracitcal experience within these areas and strengthen our management in general.”

Odd Bolin comes from Swedish Cybercom Group, an IT consulting company, where has held both positions as Head of Sweden and CEO. Mr Bolin, age 49, also has experience from Corporate Finance and Equity Reseach.

This appears to be solid recruitment for G5. Mr Bolin has been CEO of a listed company in the past and knows the Swedish investor base well. Hopefully, he will manage to build trust and confidence for the G5 case, both in Sweden but also abroad. Once the company is listed on Nasdaq OMX, foreign investors will finally be able to invest in this fast growing, profitable, debt free  growth story.

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#Arcam: Takeover by #3D Systems around the corner?

9 May

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As we have written about recently, the additive manufacturing sector (aka 3D printing) is hot and remains to become hotter. One of our top-picks, Swedish Arcam, might be in-play as US company 3D Systems is preparing for an acquisition via a share sale, to be priced after markets close on May 9th.

Bloomberg May 8th, 2013:

“3D Systems Corp. (DDD), a maker of three-dimensional printers, fell the most in 2 1/2 months after announcing the sale of about $250 million of its stock, plus an additional 1.3 million shares by company officers and directors.

3D Systems’s stock declined 4.7 percent to $40.64 at 12:12 p.m. in New York, and earlier touched $39.55 for the biggest intraday drop since Feb. 25. Through yesterday, the stock had climbed 20 percent so far this year, compared with a 14 percent gain in the Standard & Poor’s Smallcap 600 Index.

3D Systems, whose printers build objects out of computer-based designs, plans to sell about $250 million worth of its own shares to “finance future acquisitions of other entities or their assets,” the company said in a statement after yesterday’s close in New York. Some of the Rock Hill, South Carolina-based company’s officers and directors will also sell their holdings, totaling about 1.3 million shares, as part of the offering.

“The size of the offering, in our view, suggests 3D Systems has its sights set on a relatively large target company,” Brian Drab, an analyst at William Blair & Co., wrote in a research note.

Arcam AB (ARCM) is the most likely target, according to Drab. Based in Molndal, Sweden, Arcam has a market value of about $156 million.

3D Systems, which said its proceeds from the offering will also be used for working capital and general purposes, said today it plans to price the share sale after the close of trading in New York on May 9.

Needham & Co., Canaccord Genuity Inc. and Piper Jaffray & Co. will manage the offering.”

Nordic Investor

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#Glu Mobile: Decent Q1 2013 numbers but outlook weakish

2 May

 

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 US mobile gaming company Glu Mobile reported its Q1 2013 results yesterday. Adjusted EPS reached USD -0.03 in the quarter versus EPS of USD-0.01 in the year-earlier quarter. (Q4 2012 EPS was USD -0.05).  Revenues of USD 19m were down 12% y-o-y and 9% compared with Q4 2012. 

Wall Street consensus estimates were for USD -0.07 on EPS and revenues of USD18m, i.e. Glu Mobile managed to come in better than expected by analysts. Nevertheless, share were down in after-hours trading, as progress is proceeding too slow and the outlook both for Q2 and FY 2013 was rather on the weakish side (including further game release delays).

Quoting Management: “We were pleased with the monetization milestones delivered during the quarter in a number of both new and existing titles,” stated Niccolo de Masi, Chief Executive Officer of Glu. “We anticipate further monetization and retention traction as we continue to evolve our studio and begin to launch true games-as-a-service.”

Eric R. Ludwig, Glu’s Chief Financial Officer says: “While our second quarter guidance reflects a light title launch schedule, we remain in position to benefit during the second half of the year from new title launches, increasing monetization trends and progress from Glu Publishing. We remain confident in our ability to end 2013 with approximately $14 million in cash and without the need to raise additional capital or incur debt.”

On the positive side, Glu Mobile announced yesterday that it has expanded its real-money mobile gambling portfolio to include a new Contract Killer mobile slots game and has begun development on Glu-IP-branded mobile casino suites. All products will be created in conjunction with Probability, a leading technology provider to the mobile entertainment gambling industry in the UK. Contract Killer Slots is immediately available to Probability customers in the UK and Glu-IP-branded mobile casino suites are expected to be available by Q3 2013.  Also, Glu Mobile seems to make progress with its recently launched third-party publishing division and announced yesterday that it has signed one long-term agreement and two additional binding LOIs, with game developers that include two of the leading mobile MMO’s of China. GLUU anticipates launching these in western markets during the second half of Q3. Its pipeline of third-party publishing partnerships is said to grow the company expects to launch approximately six such titles by year end. The business unit is now staffed up with an experienced team of product managements, projects management and our resources. Glu Mobile’s R&D rebalancing as well as growth in third-party publishing will result in circa two-thirds first party and one-third third party by volume. In 2014, Glu Mobile anticipates this mix shifting towards an approximate 50-50 split between first and third-party titles.

 Conclusion: Glu Mobile has some interesting projects going on, of which the third-party publishing initiative seems to be the most promising to us. Real money gambling could potentially be a big success as well, but at this stage it is simply too early to assess that. The “traditional” Glu Mobile business continues to develop gradually, but as usual, things take longer time than expected. Given the big cost base, Glu Mobile needs to constantly have absolute top rankings in the US top grossing charts, which has not happened for quite some time. We strongly recommend investors who want to get exposure to the fast growing app market, to look at Sweden listed G5 Entertainment. G5 is profitable (EBIT margin of >30%), grows fast, sits on a net cash position and will soon be relisted to Nasdaq OMX (from a smaller Swedish stock exchange).  It’s trading at a huge discount to international gaming peers as well.

 Nordic Investor

 

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