Company strategy for 2019-2021
The Company’s strategy assumes dynamic development of operations through three complementary pillars: publishing games from external suppliers, a studio creating its own productions and porting, i.e. a service for transferring games between various hardware platforms. As a result of this approach, the Company’s management assumes the implementation of a development strategy based on a diversified business model which minimizes operational risk:
- the publishing model, in which the Company has the greatest experience, ensures recurring revenues with a relatively low capital commitment and guarantees revenue stability both by releasing premieres and developing its own back-catalogue,
- the production model allows the Company to build its own portfolio of games and generate high margins on their sale and, over time, to reduce the share of content from external providers in revenues
- porting as a service is an additional source of high-margin revenue and builds the Company’s competitive advantage over other publishers in the market.
The Company’s mission is to take a leading position in the publishing market among entities originating from Central and Eastern Europe (CEE) by building a strong own brand and a commercially and artistically successful games portfolio. The company also wants to produce genre-oriented, ambitious and narratively rich games based on its own original ideas and on acquired licenses, and ultimately become a significant and industry-renowned development studio.
The Company finances talented creators by supporting each stage of work on their unique games. Joint work equals joint success.
The implementation of the development strategy assumes, among other things, the achievement of the goals set out below for individual business areas.
The Company’s strategy with regard to publishing activities assumes:
- building a front catalogue consisting of a minimum of three multiplatform A/A+ titles released annually,
- conducting active activities leading to the acquisition of new games in developing markets such as: LATAM (Latin America), CIS (Commonwealth of Independent States), CEE (Central and Eastern Europe),
- expansion of the back catalogue and conversion of previously released titles to other hardware platforms,
- strengthening partnerships with Nintendo, Sony and Microsoft by placing new productions exclusively for particular platforms,
- taking a dominant position among publishers in the CEE and CIS regions, becoming an alternative to US and EU publishers,
- offering a full package of services for game developers, from marketing and PR, through digital and physical distribution, porting, consulting and localisation, to crowdfunding services.
The Issuer has further presented the list and characteristics of the games it plans to release in 2019 and 2020 in section 7.2 Description of the Issuer’s activities.
The Company’s strategy in the area of game production includes:
- development of its own development studio operating under the brand Kraken Unleashed;
- development of the author’s IP – Crossroads Inn, through the debut of the first own production in the video game industry, as well as complementary products: board games, books and others
- creation of further teams implementing new projects based on own or purchased IP (copyrights),
- developing R&D competences in the area of tools and software for creating games.
The Issuer has also indicated a list of games it intends to produce and release in 2019 and 2020 in section 7.2 Description of the Issuer’s activities.
The Company’s strategy in the area of porting includes expanding the department by increasing the staff of IT specialists in the area of transferring games from PC to console platforms and acquiring technology in the area of porting.
The table below presents the aims of allocating funds obtained as part of the issue of series C shares, with division into categories, taking into consideration investment outlays or planned costs and the planned schedule for achieving specific aims.
In order to implement selected areas of the strategy presented above, the Company carried out an issue of series C shares, as part of which it obtained PLN 4,000,000.00. Using these funds, the Company assumed the implementation of the following issue objectives:
According to the table presented, the Company plans to achieve the following issue objectives.
- Acquisition of IP with global potential and production on its basis of video games for PC and console platforms – in order to achieve one of the strategic objectives of business development in the development model, the Company acquired in the first quarter of 2019 IP with global potential from Discovery Inc for the development of two titles – The Moonshiners and Animal Planet, and has appointed a dedicated development team to undertake the task of producing the first of the aforementioned games. For both projects the Issuer will act as producer and publisher. The assumed debut date for the new titles is Q4 2020.
- Expansion of the in-house development team and extension of the scope of work on the Crossroads Inn project – in order to implement one of the strategic assumptions for development of operations in the development model, the Company plans to intensify work on its first original game, in particular to hire additional programmers-developers, as well as to invest in tools and software for game production and promotional campaigns for the release of Crossroads Inn.
- Development of the Company in the publishing area, including the expansion of the porting department – in order to implement the strategy for the publishing model, the Company has allocated, in the period from their acquisition to the end of the first quarter of 2019, funds for activities enabling the targeted implementation of projects on a larger scale, in particular:
- expansion of the porting department by hiring additional IT specialists and acquiring technology,
- higher guarantees increasing the competitiveness of the Issuer and allowing to effectively acquire more attractive projects of a larger scale,
- promotion of publishing and porting activities in the media and participation in industry events.
The aforementioned goal was realized by the Company in its entirety, and as part of its realization, the Issuer participated, among others, in the trade event – Games Developer Conference 2019, organized in San Francisco, at which it concluded the aforementioned agreement with Discovery Inc, covering the rights to the games The Moonshiners and Animal Planet, as well as created the porting department described above. As at the date of this Information Document, the Company has three employees in this area and has the necessary software and hardware solutions (specialised software and tools for transferring games between hardware platforms and special versions of consoles in the development model) that allow the Company to operate in the porting segment. In the first quarter of 2019. The Company, using the newly created business unit, independently carried out the first porting projects for publishing projects and generated revenue from them.