Q4 2021 Playstudios Inc Earnings Call
[music].
Good day, ladies and gentlemen.
Thank you for standing by and welcome to the police studios fourth quarter and year end 2021 earnings Conference call.
At this time.
Participants are in a listen only mode.
A question and answer session will follow the formal presentation.
Yeah.
Please note that this conference call is being recorded today.
February 24 2022.
Yeah.
I will now turn the call over to Joe all of Gina.
Corporate Secretary and General Counsel.
Thank you operator, and Hello, everyone by now everyone should have access to our fourth quarter and year end 2021 earnings release, which is available on the play studios website at Www Dot plays studios Dot com in the investors section.
Some of management's comments today will be forward looking statements about future events expectations and projections are forward looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.
You should exercise caution in interpreting and relying on them.
Refer you to our SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition.
During the call management will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
A reconciliation of these measures to the most directly comparable GAAP measure is available in our fourth quarter and year end 2021 earnings release on the Ww Dot plays studios Dot Com website and on our form 8-K filed with the SEC today.
Hosting the call today, we have Andrew Pascal play Studios, Chief Executive Officer, and Scott Peterson, Chief Financial Officer of the company. They will provide some opening remarks and then we will open the call to questions with that I'll turn the call over to Andrew.
Thank you Joe and good afternoon, everyone welcome to the place <unk> fourth quarter and year end earnings call given that it's a new year, we are going to spend some time reaffirming our priorities reviewing our recent results along with providing our outlook and guidance for the current year.
Let's start with some highlights from the past year.
2021 was incredibly eventful for our company a year in which we positioned ourselves to advance our business and more fully capitalize on our unique model more specifically, we went public and raised $250 million of primary capital.
Spanned at our game portfolio, adding my Vegas Bingo MGM slots live in Tetris to our existing collection of franchise products.
As a result, our player network to pre COVID-19 levels and in the fourth quarter with over $4 8 million monthly active users.
We added nine new loyalty partners and enrich the collection of real world rewards expand the value of available benefits from nearly $300 million to $500 million.
We advanced our play awards platform tools and capabilities moving us closer to our ultimate goal of providing our program as a service for all game makers, we attracted some amazing new talent into the company enhancing our product design technology and strategic capabilities, and we generated $287 million of revenue and $40 million of adjusted EBITDA.
Now turning to 2022, we're more convinced than ever that our focus and strategic approach are ideal for the times.
Traditional leisure and retail businesses are becoming ever more dependent on digital platforms to attract their target audience. Most do it with conventional advertising paying to display ads promoted product or a discounted price and there are those that invest in deeper digital presence extending their brands into these channels in a way that's more experiential engaging in Brandon.
Nancy.
And as I shared on prior calls this is where we've positioned our company we use games to a mass players loyalty mechanics to intensify engagement and rewards to convert them to real world consumers. The result is a thriving marketplace, where everyone benefits players get more entertainment leisure value kingmakers generate greater returns on their investments and real.
World brands acquire and engage more qualified consumers. This is what we've built our virtuous marketplace. That's tended to buy incredibly skilled content creators loyalty marketing specialists and in doing so we pioneered a unique model that has enabled hundreds of traditional businesses to cross the digital divide it is our vision to fully exploit this model.
And then as we do establish our company as the leading platform for rewarded play.
With that as context, let's touch on our recent financial performance and other key operating metrics. We ended the year with a solid fourth quarter posting revenues of $72 million up 12, 4% year over year, and adjusted EBITDA of $12 million up 24% sequentially.
When considering the social casino genre, our topline results continue to outpace the broader market. According to research firm <unk>. The overall social casino market in the fourth quarter was down one 1% sequentially compared to our 2% sequential growth and a five 2% year over year compared to our 12, 4% increase.
In spite of the Covid headwinds revenue for the full year was $287 $4 million.
An increase of six 5% as we continue to grow profitably and generate cash flow for the year. Adjusted EBITDA was just under $40 million at the top end of our guidance range, Scott will be sharing qualifying some of the more specific financial metrics later in the call, but I'd like to first offer some perspective on the overall state of our market.
The overall market for games is approaching $200 billion with mobile games accounting for nearly half the revenues.
Driven by continued improvements in access device qualities game variety and while these dynamics are driving growth increases in competition and the recent disruption of UA practices have intensified the challenges of scaling new products as well as sustaining old once more specifically the deprecation of <unk>, which has since resulted most of the platforms revisiting and lifting.
Consumer targeting capabilities has resulted in higher acquisition costs. This in turn has compressed the returns on that has been making it far more expensive to a mass audience. I believe these trends play to our strengths and unique capabilities. The industry is all consumed with how best to attract new players. However by comparison, there's little in.
<unk> being applied to holding on to existing ones understandably most game makers rely on the inherent entertainment value again as well as ongoing feature in content releases to retain their audience and while we also support all of our products with a dense lineup of fresh content, we leverage loyalty mechanics in real world rewards deepen the connect.
With our players we know this works for us and we expect it will work for others to in short the unique challenges of todays market are intensifying problem at our model source.
For this reason we remain so optimistic about our opportunity and so committed to our strategy.
On the topic of strategy consists of three key pillars.
First developing and acquiring new games and new genres. So that we can demonstrate our loyalty lift across a broader collection of products as we've shared we plan to do this through a variety of approaches, including joint development publishing and strategic M&A the.
The second is focused on developing the technologies features and tools needed to evolve our play awards program into our platform and suite of services that we can provide to the broader games industry, making this transition will enable the company to accelerate its growth minimize creative risk improve margins and ultimately drive substantial value. The third is diversifying our commercial.
You'll model today nearly all of our revenues are from in App purchases going forward, we intend to leverage advertising direct commerce with our players in the emerging blockchain models to diversify our revenues and expand our business. Given this focus it's worth touching on some of our primary initiatives. So let's start with games.
Highlights at the top of the call we expanded our portfolio from four to seven games. Each one is uniquely positioned and ties directly to our strategic priorities.
In the category of joint development. There is my Vegas, Bingo, which marks our foray into the popular and growing casual bingo category.
<unk> is our marquee brand and our extensive library of unique game IP to deliver a fresh and innovative take on an old favorite we launched the game back in late March and quickly scaled to over 100000 Teu.
I shared on our last call a number of technical issues were revealed as we grew our audience and response, we elected to moderate our UA investments and afford our development partners, who phosphide entertainment the time they needed to stabilize the product.
We recently decided to take the game back from boss fight a process that was completed just a few weeks ago, allowing us to lead and manage its ongoing development and operations more directly we continue to believe in the potential of this game and look forward to stepping up the pace of new content employing more refined improve the monetization practices and ramping up our investments in user acquisition.
<unk>.
In the category of publishing Theres Kingdom boss, a roleplaying game that we distribute on behalf of phosphate entertainment as.
As we've highlighted in the past phosphate has a long history and a series of notable successes in the RPG genre. Unlike bingo Kingdom boss was conceived of and based entirely on their own intellectual property. Our contributions to this franchise has been to underwrite as development manners and UA activities support the play awards integration and generally provide insights gleaned from play tests.
And as I've shared the game has struggled to achieve all the criteria that were established for full scale launch even after making the game available in North America late in the fourth quarter and while phosphate is consistently assured us that based on their experience. The product is on a constructive path currently we've elected to suspend development and reevaluate our options.
As for strategic M&A, We recently acquired the rights to Tetris, one of the most widely played and beloved franchises in the history of consumer gaming.
And it's our belief that the Tetris game format has the potential to be its own casual game category alongside match three solitaire and bingo each of these categories demonstrates the unique power of a universally appealing game format when complemented with progression mechanics richer richer features and more sophisticated live operations.
Our plan is to optimize the existing games, we've inherited while we craft an altogether, new tetra staff and employees the playbook proven by Candy crush try peak solitaire and bingo Blitz among others. It's also worth highlighting the existing game currently generates millions of organic installs, which we intend to introduce to our play awards program and in doing so look to improve.
Tension engagement and network wide value.
Lastly, it's worth highlighting that we recently introduced a new slot at MGM slots life. The game was conceived as a UA initiatives, whereby we combine one of the most iconic brands in gambling with the best of our pop slots features to more efficiently acquire new players.
Utilizing the top systems Tech tools and teams were able to efficiently leverage our resources and entered the market with a fresh and novel gain while we're still early in the cycle of qualifying the results. The strategy appears to be sound. The blended CPI is for MGM Aglow Pops and the early returns are stronger as well, assuming all goes well we could utilize other.
Brands in our portfolio, such as Bellagio, and Mirage, Luxor, and Excalibur in a similar way.
Turning to the second of our strategic pillars, we've made great strides with advancing our play awards platform. We've continued to generalize the systems tools and practices that will allow us to offer the services to third parties and we've extended our play link SDK and feature set enriching the framework to include a more expansive collection of digital real world tie ins.
In addition, the team has been active in qualifying and on boarding to work partners over the past 90 days, we've added nine new outlets, including an expanded relationship with Intercontinental hotels, along with a number of new local and affordable options. Lastly, the play awards team is excited to be working with a more diverse portfolio of games as each provides a unique set of demands.
Man that will stress, our teams and better prepare them for the longer term business to business opportunities.
Before moving on to some operational updates I'd like to touch on the emerging market for blockchain enabled gaming opportunities.
N ftes in crypto currencies are dominating the narrative across many markets, but few have been as quick to embrace and exploit these opportunities as the games industry, enabling players to verifiably own trade and sell their in game characters collectibles and other content, while having a voice. The overall application of these assets is adding an entirely new dimension of value.
More than ever players can now turn their in game progress into real value, allowing them to earn while they play we understand the unique dynamics of play to earn as we've been doing it with our play awards program for nearly 10 years Needless to say, we are advancing our own plans for enhancing our model with the added dimension of blockchain enabled features and capability.
And we look forward to sharing our plans and progress in the coming quarters.
On our last call I highlighted some of the complexities and challenges of scaling our operations and executing in a post COVID-19 environment. If you recall I spoke to the escalating costs in each of our primary tech hubs and our need to grow our teams and alternative markets.
I'm pleased to share that we've made great strides in our Vietnam, Singapore and Belgrade Studios all in these studios now have 148 playmakers accounting for 29% of our total development capacity will continue to aggressively scale in these markets understand that that it takes time to onboard train and integrate new team members as such we don't expect to see any.
Meaningful benefits such as increased development output or improve margins until later this year.
Before I pass the mic to Scott I want to briefly touch on our capital allocation as mentioned during our last call as a management team we make decisions that we feel reinforce the enduring qualities of our business model and drive mid and long term growth notwithstanding the continued dislocation of our equity value today, we maintain our belief that the best use of our capital is.
To deploy it into strategic growth opportunities as opposed to purchasing our own stock we have a rigorous approach to finding qualifying and pursuing strategic acquisitions and are actively engaged in a number of opportunities that barings' scale. So as to not impair our ability to act on these opportunities we elected not to purchase any stock during the fourth quarter under our previous.
Lee authorized $50 million stock repurchase plan.
We regularly assess the benefits of purchasing our own equity compared to external opportunities and remain poised to execute a buyback program should we deem it appropriate.
I also want to reaffirm that conviction and optimism is shared among our leadership team.
You may have seen I have been actively purchasing stock through a <unk> one plan and other non reporting members of management to make purchases as well.
Firmly believe in our strategy and with our buying shares in the open market want to back up our position that our current price in no way reflects what we believe to be our fair value.
I'll now turn the call over to Scott to provide more specifics on the financials.
Thank you Andrew.
As Andrew mentioned, we reported $71 9 million of revenue during the fourth quarter of 2021 up 12, 4% from the same quarter last year as has been the case all year when evaluating the year over year quarterly comparisons consider the COVID-19 restrictions that were in place during the same periods of 2020.
For the full year ending December 31, 2021 revenue was $287 4 million versus $269 9 million in the prior year.
We continued to strengthen the platform and invest in our game portfolio. So that we can deliver engaged and loyal players to our brand partners. Yet we remain disciplined as we grow and grow profitably by generating tangible cash earnings for the fourth quarter, we generated $12 million of adjusted EBITDA for the full year, we Rick.
<unk> $39 5 million of adjusted EBITDA, which is down from $58 million during the prior year.
Decrease reflects the ongoing investments in product development live operations and user acquisitions, we made during the year, which supported our bingo launch plus the carrying costs associated with the kingdom boss effort.
Looking at the fourth quarter's key operating metrics for our player Awards platform. We saw an increase in activity as reward purchases returned to pre COVID-19 levels with 482000 purchases in the quarter versus 269000 for the same period last year, a 79% lift.
This translated to a total retail value of $28 8 million or 137% increase over the $12 1 million for the same period last year. We also enjoyed a healthy expansion in the competition and amounts of rewards inventory, which increased 58% over the prior year to 542 unique rewards with a retail value of over 104.
$9 million, an increase of 140%.
Additionally, fourth quarter <unk> was $1 3 million, an Mou was $4 8 million up a 5% and 24, 8% respectively year over year and up 10, 1% and 35, 4% sequentially.
<unk> was 61.
Up 13% year over year and down seven 1% sequentially. Finally daily payer conversion was two 6% up approximately 20 basis points year over year and down approximately 20 basis points sequentially.
Turning to the balance sheet, we ended the quarter with approximately $214 million of cash and no debt.
We have not drawn against our revolver and industrial still maintained $75 million of additional liquidity.
We're also provides an option to increase the credit facility for up to an additional $75 million.
This translates to nearly $365 million of liquidity as of December 31, we have $126 2 million shares of common stock outstanding given our strong balance sheet. We believe we are very well positioned to execute our multi year plan of diversifying our game portfolio and advancing our loyalty platform model.
We also maintained the share repurchase authorization to be able to execute a stock repurchase should we deem it appropriate.
Next we are initiating guidance for the full year 2022.
We expect 2022 full year revenue to range between 305 and $325 million representing year over year growth.
Nine 6% at the midpoint.
We expect 2022 full year adjusted EBITDA to range between 40% and $50 million, representing a 14, 3% margin at the midpoint and an improvement of 50 basis points compared to 2021.
Regarding the underlying assumptions in revenue some of the increases include a low single digit growth rate in the core portfolio and continued progress in the my Vegas Bingo MGM slots lives and Tetris.
On the adjusted EBITDA line, we will continue to invest in my Vegas, bingo, but with a lower rate when compared to 2021, and we will be investing more in MGM slots.
The level of investment in these two games will be partially offset by the suspension of the kingdom, Boston and related carrying costs.
We have also added a profitable tetra as to the mix, but please understand we will invest additional resources as we enhance and rollout. The game later this year with that I will pass it back to Andrew for some closing remarks.
Thanks Scott.
Before we close our prepared remarks and open the call for questions I'd like to reinforce some key points.
Revenue growth has generally outpaced the market.
We're expanding our product portfolio with well established and relevant franchise brands, we have an exciting opportunity to create a new category within the massive puzzle genre by leveraging the core tetris mechanic, where bringing our bingo product in house spending our investments in the RPG category, we're scaling our teams and expanding our global development capacity.
Dancing or play awards platform and preparing for future <unk> opportunities in the <unk>, one plan that I alluded to earlier to purchase shares in the open market has been implemented.
Lastly, I want to thank our dedicated teams across the globe for their continued commitment and contributions.
Thank you all for joining us today, and we're happy to answer any questions. Operator, Please open the line.
Thank you.
At this time, we will be conducting a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment.
It may be necessary to pick up your handset before pressing the star keys.
One moment, please pull for questions.
Our first question is from Brian cited.
With Craig Hallum Capital Group. Please go ahead.
Good afternoon, Andrew Scott, Thanks for taking my questions.
Hey, Ryan.
Curious just start so.
<unk> saw a pretty big uplift in Q4 monetization was the lowest of the year I guess is that Petrus in there and then secondly, what what else would be driving that.
That's correct. It is the impact of Tetris switch.
We incorporated into those numbers towards the very end of the quarter. So that they don't reflect the full quarter.
But that's what ultimately grossed up are impacted positively the mou.
Given the nature of that audience and the degree to which it's monetizing it was dilutive in terms of some of the unit metrics.
Good.
And then anything to comment on January February kind of on do you use and then our bell.
Nothing specific.
As we came out of and through the holidays or excuse me through the holidays, and then out of them into the new year.
We carried some of that momentum obviously into this quarter.
We'll have obviously in this quarter the full impact of our absorbing tetris in terms of user activity, both impacting miu Andy au.
Again modest monetization, so not really meaningful impact to revenue.
But we're really thrilled because of the scale of the audience and volume of organic installs that product generates and looking forward to improving the existing products and introducing some new ones.
I think are going to allow us to retain more of that audience.
Obviously drive higher levels of monetization, which ultimately is what's factored into the guidance we provided for the year.
Two more for me and then I'll turn it over to the others just on some of the rewards.
Historically, how correlated is rewards usage versus monetization to you guys in the period or future periods, I guess looking as a leading indicator or is it directly correlated in the period and then one follow up.
It generally isn't so much a leading is a trailing indicators people are accumulating and amassing loyalty currency and then.
Ultimately shopping for the benefits, which they then have to plan to consume because many of them are for destination hotels or cruise is or.
Events.
So the consumption.
Rewards typically tends to trail the other metrics and performance.
Makes sense last one how are your newer awards partners. I think you said you had seven if I caught that right in the quarter, but already are newer rewards partners, albeit early how are their ROI metrics relative to your more established partners.
It's really early.
Side of one quarter, it's difficult to really qualify I can tell you. The reception generally is positive because they see the traffic increases and improvement but.
Again, it takes a little while before we start to see.
Those rewards not only get purchased and tap into various apps, but then ultimately consumed and fully redeemed. So you can provide maybe a bit more color in the future, but still a bit too early.
Okay. Thanks, guys. Good luck.
Okay cool thank you Brian .
Thank you.
Question is from Mike Hickey with Benchmark company. Please go ahead.
Andrew Scott Congrats on the quarter guys. Thanks for.
Taking my questions Hey, Mike.
Yep.
Kingdom boss, I guess, not a shocker here, but maybe a little spending.
Development on that game, just sort of curious.
Where you go from here, obviously, you've put a lot of resources in that direction, not just that game, but also sort of proves out that.
You can expand in new genres with your play award.
Program. So just sort of curious where you go from here and then how.
How we should think about the capitalized expenses associated with that project.
That would be written off in the future.
No I don't know if you can sell it or what you can do that.
Questions. Thanks, Bob.
Okay sure I'll take the first part of that question and let Scott handle the second.
So.
We obviously, we're deeply committed to kingdom boss and spent quite a bit of time and also a lot of money advancing it through our partnership with phosphate.
As we've shared in the past.
Complicated because we.
We really struggled to get all of the metrics to a place where we felt like the product towards healthy and investable and in a place where we can really commit the tens of millions of dollars that would be required in order to really scale its audience.
And get it to perform and contribute.
To the levels that we had originally anticipated.
So.
Just finally got to a place where we felt like continuing to consume not only the money and resource that we're applying to it but also the capacity for members of our team.
Attending to it and doing all we could to support the phosphate group and trying to get it to a place where it was more performance.
But we just got to a place where we felt like it's time to suspend this product and kind of regroup and assess what our other alternatives and options might be for it.
To the extent that we can feel that we feel that it has the potential ultimately to be reconstituted. Some point. We just are the place where we can make that decision yet, but we'll be evaluating that in the coming weeks.
So that's how and why we ultimately arrived decision, which we think is absolutely the right one help us also.
Bring some focus to the other new product initiatives.
Getting some traction and we're pretty excited about we want to make sure that we're allocating both our attention and our UA capital development subsidies to the efforts that we think are going to yield for us.
As far as the.
The expense of it.
The timing of it being written off Scott you want to address that.
Yes, I mean, we're evaluating that now.
B.
Written off in Q1.
And.
Or just.
Evaluating the extent of it right now.
31, we had just over $8 million.
Capitalized software on the books, so that would be a noncash charge.
Uh huh.
But thats not the extent of it but it'll be pretty close.
And I'm going to double back Mike I'm, sorry, there was one other part to your question that I didn't answer which is what implications does this have on our overall loyalty model and framework and look we we certainly were hopeful that fundamentally the game would perform and then we could show that the integration of our play rewards.
And the game will drive that incremental lift that we've seen across the other games in our portfolio.
The fact that the base in the core product in this case.
Didn't performed to a level, where we can really get it to the market and start to get some scale.
And really then as we incorporate the loyalty program prove out its impact doesn't anyway and validate our program. It just means that we won't be using this game to further validate supported.
Thanks, Andrew.
Last question.
Yeah.
Patrick It seems like that right.
That issue.
So in our case study here.
Success.
Program.
Any early.
Learnings.
Any sort of encouraging data on the <unk>.
Syed maybe.
And maybe some new partners that you have associated with the gain that share.
Yes, I mean first of all we have not yet incorporated the loyalty program into the versions of the game that we've inherited.
So that'll be coming shortly.
We're seeing a great response from both our existing partners.
They have an awareness and really a strong affinity for that brand in that franchise.
And we're also seeing really great traction in and among new partners.
We're excited about our program, but we're waiting for a product. They felt was more appropriate for their brands to be attached to or included as part of the loyalty benefits.
So we're really optimistic about the impact that the presence of that brand is going to have in the program.
To attract new partners and then I would just say overall, we're really really excited about this game.
Undeniably is one of the most successful franchises in the history of consumer gaming.
The fact that it has not yet been fully embraced or made the transition onto mobile as a platform.
We think.
It represents.
Unrealized opportunity and so I think there's a lot that we can learn from the existing games that are in the market as well as as I mentioned earlier draw inspiration from other casual games that have gone through the cycle of taking kind of the base game format.
The method of playing a game, which is really popular and then complementing it with.
All kinds of meta features and progression mechanics.
More sophisticated lab operations.
A bit more creative depth and kind of transition great game into really a franchise that can drive significant value. So theres a lot of work to do but we're working with what we believe is one of the strongest assets in gaming. So we're really excited about this opportunity.
Thanks, guys. Good luck.
Thanks, Mike.
Thank you. Our next question is from Greg Gibas with Northland Securities. Please go ahead.
Hey, good afternoon, Andrew and Scott, Thanks for taking the questions and congrats on the nice results.
Sure I was just wondering.
Implied within your guidance, if you could kind of talk about high level assumptions related to.
Where youre expecting <unk> growth versus maybe Mou growth the dynamics, there and I guess, along those lines. If your guidance relies on any new games or new loyalty partners to be added to the platform and kind of how youre thinking about that thanks.
Yes. Thank you.
So as far as generally guidance I know that Scott alluded to this in his remarks.
We kind of expect that the core portfolio is going to grow on pace with where the market generally is expected to grow.
In the kind of mid single digits.
And then we're certainly expecting to scale and grow the overall size of our network.
We already have with the addition of Tetris.
<unk> versions of the products.
And we've not yet fully scaled up our bingo product in early in the cycle with MGM slots lives. So.
We think that there is obviously room to leverage each of those products to attract a broader audience.
As far as the impact on kind of the monetization metrics. We believe that <unk> are going to probably get compressed a little bit, but that's a function of tetris.
And it's dilutive impact on.
The continued strength.
The conversion rates and RP pool or the monetization rates among.
The players of our core products.
And then over time, we certainly hope that will optimize the monetization of the Tetris games.
And see better performance, but I guess to answer your question more directly we would expect to see opt outs gets a little bit, but we're going to scale up and grow our audience as we invest in and scale the portfolio of products.
Perfect very helpful and I guess.
Regarding kind of your.
Just wondering if you could talk about I guess the capital you have budgeted for for some of those new titles for new developments. So MGM slots the new Tetris game that you guys are working on and then.
Just I guess kind of capital required or budgeted for that this year.
And I'm with pulling out of Kingdom boss, just how youre thinking about that.
Yeah, I mean, historically, we haven't broken out the expenses that are specific to any one product.
But directionally what I can tell you is that.
The MGM slots life products.
Is really an extension of our pop slots franchise.
Leverage is a lot of the core content and the tools and features.
The team that support and operates that franchise and so it's.
Relatively speaking quite efficient.
The investments, we'll be making are really more on the user acquisition.
Side of that product.
And we'll we'll be allocating some of that UA budget that was otherwise allocated to pop slots as I mentioned in my remarks.
We really initiated this product as kind of a UA strategy, where we felt we could leverage the strength of our really iconic gambling brand and the best of what we offer in our top slots product and then put it into the market.
And see more productive or more productive UA investments and better returns.
And so as I mentioned, we are encouraged by the early results and so.
We're going to be continuing to invest in scaling and growing that product.
The the bingo game.
As we talked about we've now taken that on and internalize that effort as recently as just a few weeks ago and so we're still in the process of fully assessing.
And resetting its development plan, a fair amount of work to be done to address some of the technical considerations or concerns that we raised in the past.
Where we're intensely focused on that right now.
And then we will be extending the product with more features and capabilities. So that it can realize its full potential and as I've shared in prior calls the <unk>.
<unk> and among the players that are still actively playing that game very strong.
We believe it has enormous potential and so we look forward to also getting it to a place where we can start to ramp up the UA investments.
And then from a tetra perspective, we are going to continue to support the existing products that are in the market.
And develop an altogether new version of the Tetris App.
We expect that that's going to take somewhere between six to nine months.
And then we will have it in the market alongside the existing products.
We're going to use the existing games to really further qualify the impact of our loyalty program capacity to drive some increased retention and improve monetization of existing games, but really in an effort to optimize how we incorporate and leverage the loyalty program in the new version of the App will be long.
Later in the year.
But.
As I said.
Excited about its potential.
So hopefully that addresses your question.
Yes, certainly does appreciate it Andrew and I'll pass it on thanks again.
Great. Thank you.
Thank you.
Ladies and gentlemen, if you would.
I'd like to ask a question. Please press star one on your telephone keypad.
Yeah.
Our next question is from Martin Yang with open.
Please go ahead.
Alright, Scott Thanks for taking my question.
My first question is.
The key learnings you have from through the boss does that change your view on <unk>.
<unk> expansion.
Do you still have invitation to break into mid core games.
Okay.
Yes, no it doesn't it doesn't change our view on the relevance of our model in the mid core genres, and the RPG or strategy kind of game categories. We still think that there is a really great opportunity to employ our model.
It just didn't work in this case, it's not that our modeled it mark it's just the core product.
It wasn't able to achieve the kind of baseline metrics.
We felt we could then support invest in and then apply our loyalty program too.
And then scale and grow.
No.
Our loyalty programs we have.
Promoted our loyalty program as a solution for a game and inherently it doesn't have the capacity to captivate its audience.
You still fundamentally need a really good game.
But what we know is that when <unk> got a solid game.
And then you complement it with our loyalty program in real World benefits of switches hours, then enhances its performance.
So in short we're still believers in those genre is in our model and its applicability those onerous and we'll continue to look for opportunities, where we can prove that out.
Got it thanks.
My next question is.
During the fourth quarter, you disclose the growth for rewards purchased and retail value of the rewards.
Both are up very strongly year over year and the retail value was up more than the rewards purchased.
Can you maybe help us give us more context to interpret those numbers what are what's driving the growth and does that indicate a search a mix change in your rewards.
Yes. Some of it is mix change some of it is the continued emerging through Covid with partners kind of coming more fully online and ultimately allocating more inventory to the program.
So those are the principal reasons.
Got it.
Final question is yellow.
The updated version that's coming expected for Tetris.
So our site incorporating.
I'd say a rewards program.
Are you going to implement certain game play changes to make sure that maybe that would be it.
<unk> integration.
But play awards.
Well, we're certainly going to integrate play awards.
The effort and what's going to take the better part of the next six months to nine months is going to be great.
Wiley New version of the game we're.
We're going to be really respectful of the core game play.
The mechanic of Tetris.
So that we can preserve the game that so many people love literally one hundreds of millions of people played love.
But we believe that there is an opportunity for us to add more depth to the experience. So a metal layer to the game that provides for progression loops as well as a richer set of features that can then be leveraged in the way that we operate the game and conduct events.
And then also the degree to which we tailored the game based upon what we know about the players' experiences more responsive to the way that they're engaging with the game.
So those are the things that we'll be focused on.
I think the team's converging on and has a ton of clarity around what it is that we're going to go implement.
And just looking forward to getting the early version of that product into the market. So that we can test and refine and get to a place where we can.
Compared to launch it.
So, but we fully expect that.
The play awards program with a broader collection of reward partners, many of which will be new and specific to the tetris franchise.
We'll be ready to roll and we will have that product as I said in the market the latter part of the year.
Got it thank you.
Thank you Mark Thank you.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Andrew <unk> for closing remarks.
Yeah.
Thank you I appreciate everybody, taking the time to <unk>.
About our performance in the fourth quarter and the wrap up for the year.
Certainly looking forward to updating everyone on future calls so thanks for your time today.
Thank you.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.