Tag Archives: analysis

#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.

G5quarterly

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.

G5capdevelopmentcosts

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

9 May

ArcamLogo

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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#G5 Entertainment: Starts to sell merchandise

29 Apr

newlogoSwedish mobile gaming developer and publisher G5 Entertainment has started to offer merchandise around some of its most popular games. G5 is following in the footsteps of its Finnish competitor and Angry Birds maker Rovio. In its recently reported FY 2012 report, Rovio stated that some 45% of its revenue is now coming from “consumer products” (up from 30% one year earlier).  While it might be unrealistic to assume that G5 will reach a similar success with its merchandise, the initiative is certainly a great move to enhance brand loyalty and keep its large player base close.

Order your G5 gear here: http://www.cafepress.com/g5games/9961225

We at Nordic Investor think there is no better way to start the day than with freshly brewed coffee from a G5 coffee mug!

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#Glu Mobile: Ranking check

28 Apr

 

GluMobileLogoNewThis week’s ranking check for Glu Mobile shows a further decline in the number of games being among the top grossing charts in the major countries. This was the third week in a row with declining rankings on iOS as the games that have been released in Q1 2013 are losing more and more steam. Also on Google Play, the top grossing rankings are trending downwards.

Unfortunately, Frontline Commando D-Day is also sliding gradually in the top grossing list, albeit still being among the top 100 grossing iPad games in the most important countries.  

Glu Mobile will present its Q1 2013 numbers on Wednesday, 1st of May after markets have closed. We’ll follow with interest what they have to say.

Number of Glu Mobile 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)

GLUUApple

Number of Glu Mobile games among the top grossing charts for Google Play:

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

GLUUGooglePlay

Top grossing rankings for Frontline Commando D-Day on selected iPad markets:

FrontlineCommandoGLUU

 

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#G5 Entertainment: Secret Society saves the party

28 Apr

newlogoThis week’s ranking check for G5 Entertainment is a continuation of the recent trends. Google Play is stuck in a downward spiral while iOS is keeping decent positions without managing to get to the next level. The big hope lies all the more on Secret Society, which continues to be ranked around the top 50 grossing games on iPad in the US (it also performs very well on other big iPad markets such as Germany, South Korea etc). 

The big question is: How much are these rankings worth in real money? While it is straight forward to get the rankings of individual games, it is almost impossible to get the actual value of these rankings.  Pocketgamer, Distimo and others are from time to time publishing bits and pieces about certain games’ performance and one of our readers was kind enough to sent us his thoughts on the subject:

“In a recent article on pocketgamer.com it said that e.g. “Fish out of Water” made some USD 15,000 a day from the US iPhone plus iPad market with a top grossing rank of around 60. Unfortunately, Secret Society is not performing that well on iPhone so we only should look at the iPad side of these USD 15,000. Assuming around 30% of the app store revenue in the US comes from iPad, it should be a reasonable assumption that around 30% of the USD 15,000 are iPad related as well. That would mean that “Fish out of Water” made some USD 4,500 a day with a top grossing ranking of around 60 in the US on iPad. Quarterly revenue for a consistent rank 60 US iPad game would then be 4500*90*6.6 = 2,673,000 SEK. Secret Society is currently ~50 meaning revenue would be higher than that if it holds the position. On top of that would come revenue from the rest of the world, and from iPhone.”

This seems to be an interesting approach of tackling the issue. www.forbes.com had a recent article titled “iPad app revene catching up with iPhone faster than expected” (http://www.forbes.com/sites/terokuittinen/2013/04/09/ipad-app-revenue-catching-up-with-iphone-faster-than-expected/). According to the article, iPad app revenue nearly doubled year-over-year between January 2012 and January 2013. This significantly outpaces iPhone growth. In download numbers, iPad app volume is still roughly 70% below iPhone app volume. But revenue generated by iPad apps is less than 30% below iPhone app revenue (see Appannie chart below). This might suggest that the calculation above could be even conservative, as Appannie’s findings indicate that roughly 40% of US iOS app store revenues are generated by the iPad.

Using the same reasoning above, a top 60 grossing iPad US ranking could therefore by worth: USD 15,000 x 40%= USD 6,000. Quarterly revenue would then be around SEK 3.5m, in current FX rates. Again, Secret Society is doing actually better than that for quite some time now, with a top grossing ranking around 50 in the US. On top of that, Secret Society is doing very well in other major countries as well (in some even better than in the US). We believe that around 35% of all global app revenue is generated in the US. For the sake of simplification we could than come to the conclusion that total revenues from Secret Society at is current performance level is around SEK 3.5m / 0.35 = SEK 10m.

We would appreciate to get input from those of you who have more inside knowledge in the matter. How much is a top grossing postion worth for iPad and iPhone in the US (or other countries for that matter)? Maybe some of you are developers that have had games at these levels? We are also very interested in the value of other top grossing position of course. Please send us a mail and let us know what your app has generated at certain top grossing positions. Also, please do not forget to cast your vote in the bestappever Android awards. Several G5 games are nominated and as you can see in the ranking check – all positive attention is highly needed. Vote here: http://nordicinvestor.net/2013/04/23/g5-entertainment-games-nominated-bestappever-android-awards-2013/

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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:

SecretSocietyUSAiPad

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#Glu Mobile: Rankings check

21 Apr

 

GluMobileLogoNewThis week’s ranking check for Glu Mobile shows a further decline in the number of games being among the top grossing charts in the major countries.  This was the second week in a row with declining rankings on iOS as the games that have been released in Q1 2013 seem to lose some steam. On Google Play, the trend was continuously positive and accelerated even upwards.

Also Frontline Commando D-Day is losing some steam but its global top grossing rankings on iPad are still impressive. This includes the following positions as of today: China #39, France #55, Germany #59, Japan #43, Russia #27, UK #57 and USA #65.

Number of Glu Mobile 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)

GLUUrankingsiOS

Number of Glu Mobile games among the top grossing charts for Google Play:

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

GLUUrankingsGooglePlay

Top grossing rankings for Frontline Commando D-Day on selected iPad markets:

GLUUFrontlineCommando

 

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#G5 Entertainment: Secret Society climbs the rankings

21 Apr

newlogoThis week’s ranking check for G5 Entertainment is all about Secret Society, which received an update a few days ago.  G5′s free-to-play hit game can now be played with friends with many interesting social features. G5 seems to have done their homework on this one – top grossing rankings for Secret Society increased basically in all important countries. Money-wise, we are especially pleased to see the game be around #40 in the top grossing charts for iPad in the USA. But also in our countries  the game is very highly ranked, e.g. France and Italy around #30 top grossing iPad, South Korea top 40 grossing iPad, Russia top 50 grossing iPad and Japan around #60 top grossing iPad. In China, the game broke into the top 100 grossing iPad games, after being ranked around 180 before the update.

Elsewhere, last week’s trends were less pleasant. Rankings on iOS in total turned South and even the recent launch of Art Mogul on Google Play was not sufficient to turn G5′s fortune around on that platform. More needs to happen and hopefully it will include e.g. Secret Society for Google Play soon.

In the meantime, we enjoy Secret Society’s success on iOS and hope that it will break into the top-40 in the USA during next week.

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)

G5rankingsiOS

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)

G5rankingsGooglePlay

Secret Society top grossing rankings in USA on iPad:

G5SecretSociety

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#Gameloft: announces share buy-back program

17 Apr

French gaming giant Gameloft announced its final FY 2012 numbers on Monday evening.  In connection with the release, Gameloft announced an aggressive share buy-back program. Management says: “Given its healthy net cash position and the stock’s historically low multiples, the company has decided to launch an ambitious share buy-back program totaling 1.5 million shares at a maximum purchase price of €7.0 per share over a period of eight months starting on April 16, 2013.”

In 2012, Gameloft’s consolidated sales reached €208.3 million, up by 27% year on year. North America represented 31% of 2012 sales; EMEA, 27%; APAC, 22%; and LATAM, 20%. On a constant exchange rate basis, the full-year growth was 25% in 2012 compared with 19% in 2011. Gameloft’s sales are driven by the massive success of its games on smartphones and tablets for which the installed base is increasing rapidly. The company’s 2012 smartphone and tablet game sales grew by 90% year on year. They represented 51% of total Group sales compared with only 34% a year earlier.

Peervaluation

Gameloft’s share is currently trading around EUR 4.6, implying a PE-ratio of 26x. The company thinks its share is undervalued at these levels and will buy back shares up to a level of EUR 7 (at EUR a share, the 2013 PER would be 39x).

In comparison, Swedish mobile gaming company G5 Entertainment is currently trading at a 2013 PE-ratio of 12x, which obviously is not sustainable in the long-run. Expect internationally investors to jump on this share as soon as G5 has completed its relisting to Nasdaq OMX during 2013. All you others that can invest in Swedish companies listed on Aktietorget: have a close look at the Peer valuation table above.

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