Paradox Interactive A GRAND STRATEGY FOR SUCCESS AND GROWTH - - PowerPoint PPT Presentation

Paradox Interactive

A GRAND STRATEGY FOR SUCCESS AND GROWTH

Publisher and Developer of games, primarily on PC

100 + games and

expansions in strong IP portfolio

6 million +

registered gamers globally

2 million

fans play a Paradox game each month

250 + employees

Employees speak 20 + different languages

4 owned studios

in Stockholm, Umeå, Malmö and in Delft

6 active brands

Recognized games with loyal fans

47%

revenue CAGR last five years

28% *

• perating margin last

five year in average

PARADOX’S REVENUE DIVIDED INTO ESTABLISHED VS NEW GAMES, AND NET PROFIT

Continued increase in revenue from established games and a long history of profitable growth

Strategy for continued growth

Other Paradox Interactive Gaming market Benefit from digitalization

Well positioned to benefit from strong digitalization trend

Penetrate categories

Use strong IP and gamer community to penetrate game categories Strategy Simulation Role Play

Platform expansion

Lead our fans to

• ther platforms

MOBILE - 1%

Geographic expansion

Use strategic partners to expand outside NA and Europe

LATIN AMERICA - 2% LATIN AMERICA - 4%

M&A

LICENSING

Source: Newzoo and Paradox Interactive

Leverage M&A and Licensing to further enhance growth

PHYSICAL - 5%

Source: Newzoo, IFPI, Statista

Games a 116 BUSD entertainment market globally

GAMES SPLIT BY PLATFORM 2017 GAMES SPLIT BY GEOGRAPHY 2017 WORLD DIRECT CONSUMER SPEND ON ENTERTAINMENT 2016

Games Industry growing faster than expected, up to 10.7% to $116 billion 2017

LATIN AMERICA - 4%

Publishers play a central role in bringing games to market for a large and engaged community

Vast amount of developers with games want access to gamers but need help to differentiate themselves from the competition and bring their games to market

DEVELOPERS PUBLISHERS DISTRIBUTORS PLAYERS

Strong publishers with proper knowledge, marketing skills and large communities: 1) Screen, 2) finance, 3) market and 4) continue developing games. Distributors rely on publishers to provide the most attractive games to launch in the marketplace through their infrastructure. 1.9 B + gamers world wide. Steam community 100 M + gamers Paradox forums 800 000 +

Paradox’ Three Corner Stones

PEOPLE PRODUCTS PLAYERS

Publisher and Developer of games, primarily on PC

MANAGEMENT / SIMULATION STRATEGY GAMES ROLE PLAYING GAMES

FOCUS: SEVERAL NEW GAMES LAUNCHED

New game launches and expansions 2015

FOCUS: INTERNAL RELEASES AND EXPANSIONS

New game launches and expansions 2016

Stellaris

NEW GAME

Tyranny

NEW GAME

Hearts of Iron IV

NEW GAME

Mare Nostrum

EXPANSION

Snowfall

EXPANSION

The Reaper’s Due

EXPANSION

Rights of Man

EXPANSION

Conclave

EXPANSION

Here be Dragons

EXPANSION

Art Deco

EXPANSION

The White March

EXPANSION

Natural Disasters

EXPANSION

Leviathans

EXPANSION

Together for Victory

EXPANSION

FOCUS: EXPANSIONS AND NEW PLATFORMS

Game launches and expansions 2017

Bastard’s Wound

EXPANSION NEW GAME

Steel Division Tales from the Tiers

EXPANSION

Cities: Skylines - PS4

CONSOLE

Mass Transit

EXPANSION

Humanoid

EXPANSION

Mandate of Heaven

EXPANSION

Third Rome

EXPANSION

Pillars of Eternity

CONSOLE

Death or Dishonor

EXPANSION

Second Wave

EXPANSION

Jade Dragon

EXPANSION

Synthetic Dawn

EXPANSION

Monks and Mystics

EXPANSION

Cities: Skylines - Xbox

CONSOLE

Utopia

EXPANSION

Cradle of Civilization

EXPANSION MOBILE

Prison Architect

Publisher and Developer of games, primarily on PC

Source: *Management estimate, based on 2015

IP PORTFOLIO = SHARE OF RELEASES DEVELOPMENT TEAM = PEOPLE* DISTRIBUTION CHANNEL

Paradox Game Pillars

WHAT WE ARE LOOKING FOR IN A GREAT GAME

Replayable One does not simply “finish” a Paradox Game. System-driven games with challenging sandbox environments make for unique game sessions each time you play. Intellectually Challenging Paradox games are played with your mind, not your reflexes. Incredible depth and a balanced learning curve come together to reward players’ curiosity. Creativity We want our players to create and share their own stories from our games

• not just the stories we imagined. The game should encourage creativity,

experimentation and the creation of memorable stories. Form Follows Function At Paradox we use visuals to complement gameplay, not gameplay to show off visuals. Paradox is function and form in sensible symbiosis. Accessible The games take time to master - but each game is still enjoyable. Players don’t stop playing our games because they’re too intimidating or punishing. Nerd Out Regardless of what the game is about, there’s always more to discover behind the scenes. The player can always dig deeper into the subject matter of the game even when they’re not playing.

Games with highly engaged players

Steam Average

PARADOX GAMES ARE VERY “STICKY”

15h 23min 14h 6min 8h 44min Europa Universalis IV Crusader Kings II

Steam workshop: 130.000 + user made items for Cities Skylines

USER GENERATED CONTENT

Paradox forum: 1.3 M + posts in 2017

PLAYER INTERACTION STREAMS

Content management Player profile Multiplayer Publishing tools Dev resources Analytics Social Game support

Paradox Online Services

PLATFORM AGNOSTIC

Key figures for the Group

STRONG MARGINS AND HIGH PROFITABILITY

Q3 2017 Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Revenues 180.7 MSEK 127.2 MSEK 591.4 MSEK 455.4 MSEK Operating profit 52.9 MSEK 54.6 MSEK 253.1 MSEK 222.1 MSEK Operating margin 29% 43% 43% 49% Cash flow from operations 70.3 MSEK 102.7 MSEK 295.7 MSEK 197.1 MSEK Cash flow from investments

• 79.2 MSEK
• 30.8 MSEK
• 192.7 MSEK
• 71.2 MSEK

Cash & cash equivalents end of period 244.3 MSEK 215.1 MSEK 244.3 MSEK 215.1 MSEK

Listed the “Paradox Way”

Questions?