Q1 2024 Snail Inc Earnings Call
Tony: Good afternoon, everyone, and thank you for joining us today. It's an honor to be speaking with you for the first time as the new co-CEO of Snail. I first want to express my gratitude to Jim Tsai for his leadership over the past several years in building Snail into the successful gaming company it is today. You laid a strong foundation, and I am excited to build upon it as we enter this next chapter. I'm thrilled to have the opportunity to lead Snail forward.
Hi, everyone and thank you for joining us today.
<unk> to be speaking with you for the first time.
Speaker Change: <unk> co CEO of mail.
Jim: First want to express my gratitude to Jim <unk> for his leadership over the past several years in building scale into the successful gaming company. It is today.
Speaker Change: <unk> laid a strong foundation.
Speaker Change: And I am excited to build upon it as we enter this next chapter.
Speaker Change: I'm thrilled to have the opportunity to lease now forward base.
Tony: This company has an incredibly passionate and talented team, with cutting-edge technology and leading franchises like ARC that have cultivated incredibly engaged and dedicated communities of gamers. As a long-time player of ARK myself, I have a deep appreciation for the creativity and innovation this company embodies. Look who I had!
Speaker Change: Based company.
Speaker Change: As an incredibly passionate and talented team.
Speaker Change: With cutting edge technology and leading franchises.
Speaker Change: Arc that have cultivated.
Speaker Change: Credibly engaged and dedicated communities all gamers.
Speaker Change: As a longtime player all out for myself.
Speaker Change: I have a deep appreciation for the creativity and.
Speaker Change: Innovation based company in bodies.
Speaker Change: Looking ahead.
Tony: I'm mostly excited about our plans to further leverage artificial intelligence across our development pipelines. The AI technologies that have seen a mission in the past, such as Neshai, Luma AI, F-DAF, and the Society of Brands have immense potential to accelerate our creativity while maintaining premium quality. Our goal is to make Snail an AI trailblazer that enhances our talented human teams rather than replaces them. I'm also eager to capitalize on the widespread attention of ARC animators.
Speaker Change: Mostly excited about our plans to further leverage.
Official intelligence across our development pipelines.
Speaker Change: AI technologies as Jim mentioned in the past.
Speaker Change: Such as National Bank.
Luma: Luma AI.
Luma: And a society of brands have immense potential to accelerate our creativity.
Speaker Change: Maintaining premium quality.
Speaker Change: Our goal is to make snow on AI trailblazer that enhances our talented human teams rather than replacing them.
Speaker Change: I'm also eager to capitalize on the widespread attention of the arc animated.
Tony: The gaming world's eyes will be on this franchise, providing an ideal opportunity to engage new players and further energize our existing community. With that, let's quickly review the quarter, and then I will hand it over to Peter Kang, our COO, to dive a little bit further into recent updates to our product roadmap. Our ARC franchise continues to be an incredible, successful story through March 31st, 2024. Park has been played for an astonishing 3.5 billion hours, with an average playing time per user of 163.7 hours.
Speaker Change: The gaming waters eyes will be on this franchise.
Speaker Change: Riding an ideal opportunity to engage new players and the formula further energized.
Speaker Change: <unk> community.
Speaker Change: With that let's quickly review of the quarter, and then I will hand, it over to Peter Com.
Speaker Change: Sure.
Peter Kang: Dive a little bit further into rates and updates to our product roadmap.
Peter Kang: Our ox franchise continues to be an incredible success story.
Through March 31 2024.
Peter Kang: <unk> has been in play for.
Speaker Change: <unk> three 5 billion hours with an average claim time per user of 163 seven hours impressively the top 21% of all players.
Speaker Change: We have spent of over 100 hours immersed in the game according to data from <unk> platform.
Speaker Change: For the first quarter of 2024.
Speaker Change: <unk> generated net revenue of $14 1 million up from $13 5 million in Q1 2023 net loss for Q1, 2024 with $1 8 million versus 3.0 million net loss in Q1 2023.
Tony: Impressively, the top 21% of all players have spent over 100 hours immersed in the game, according to data from Beams Platform. For the first quarter of 2024, Snail generated net revenue of $14.1 million, up from $13.5 million in Q1 2023. The net loss for Q1 2024 was $1.8 million versus a $3.0 million net loss in Q1 2023. With that, let me hand it over to Peter to review our product roadmap. Thank you.
Peter Kang: With that let me hand, it over to Peter to review our product roadmap. Thank you.
Peter Kang: Thank you Tony.
Peter Kang: Thank you, Tony. And hello, everyone.
Hello, everyone.
Peter Kang: In Q1, our indie publishing label, Wandering Wizard, released Zombie Within, a second entry into the social deduction genre by NUGEN, the developers of our hit title, West Side Story. The title has entered into early access on Steam, and we are eagerly awaiting player feedback to improve the title. We're looking forward to a 1.0 release in Q4 of 2024. West Hunt has also been released on Nintendo Switch, which will bring the social deduction mayhem to Nintendo's handheld devices, providing cross-play access to the title.
Peter Kang: In Q1, our indie publishing label wondering Wizard relief zombie within second entry into the social deduction drawn or buy neogen developers over hit title Westland.
Peter Kang: Idaho has entered into early access on steam and we are eagerly awaiting clear feedback to improve the title.
Peter Kang: We're looking forward to a one point it will release in Q4 of 2024.
Peter Kang: What time is also released onto Nintendo switch, which will bring the social deduction mayhem.
Peter Kang: And those handheld devices, providing cross play taxes to the title.
Peter Kang: We've also updated the public roadmap for arc offended CLC release schedule, which indicates a new map every two months throughout the 2024 calendar year.
Peter Kang: We've also updated the public roadmap for AHRQ Ascended's DLC release schedule, which indicates a new map every two months throughout the 2024 calendar year. After the release of Scorched Earth in April of 2024, the next DLC map to come will be The Center. We're excited about continuing to provide content for ARC Ascended at a much steadier pace. Between DLCs, we will also be adding a few dinosaurs to the world to add more flavor to the ARK universe.
Peter Kang: After the release of scorched Earth in April of 2024, So next plc mouth to come will be the center.
Peter Kang: We're excited about continuing to provide content for ARCUS ended at a much steadier pace.
Speaker Change: Between Vlccs, we will also be adding a few dinosaurs to the world.
Speaker Change: More flavor to the Ark universe.
Speaker Change: The animated series for Arc was released on Paramount plus great acclaim.
Peter Kang: The animated series for ARC was released on Paramount+ to great acclaim. Using the backdrop of the ARC universe, players of the game will be able to see an adaptation of the ARC universe while enjoying the very elements that attracted them to the game, dinosaurs. So far, reception has been great, with IGN giving the title an 8 out of 10.
Speaker Change: Using the backdrop of the arc universe, there's of the game will be able to see an adaptation of the arc universe, while enjoying the very elements that attracted them to the game dinosaurs.
Speaker Change: So far reception has been great with IGN, giving the title in eight out of 10.
Peter Kang: We also see a draw of new players learning about the ARC franchise, which we are complementing with cosmetic skins from the animated series across all available platforms. Our development pipeline continues to investigate AI, and Research Advances in AI, primarily focused on our pipeline currently. AI has allowed us to rapidly prototype and ideate on our vision for products and development. Currently, we have three projects which are yet to be announced in development. And we have been using AI to concept the game world, allowing the development team to visualize the virtual worlds before assembling the pieces.
Speaker Change: We also see a draw of new players learning about the art franchise, which we are complementing with cosmetic skin from the animated series across all available platforms.
Speaker Change: Our development pipeline continues to investigate that.
Speaker Change: Research advances in AI.
Speaker Change: Primarily focused on our pipeline currently.
Speaker Change: AI has allowed us to rapidly prototype and ideally on our vision for products in development.
Speaker Change: Currently we have three projects, which are yet to be announced in development and we have been using AI concept came world, allowing for the development team to envision the virtual world before assembling the pieces.
Speaker Change: On the topic of <unk>, we're still holding off on new announcements in Q1. The game is still in the development stage and we're taking learnings from our consented into consideration as we continue to work with the 305 engine.
Peter Kang: On the topic of ARC 2, we're still holding off on new announcements in Q1. The game is still in the development stage, and we're taking learnings from ARC Ascended into consideration as we continue to work with the 305 engine. New advances in technology bring great promise, and we hope to integrate the latest features in time for the release. More news about this title will come later this year. And now, let me hand it off to Heidi Chow for a Q1 financial.
Speaker Change: Two events is in technology, bringing great promise and we hope to integrate the latest features in time for the relief for.
Speaker Change: More news about this title will come later this year.
Speaker Change: Now, let me hand, it off to hydrogel.
Speaker Change: For our Q1 financials.
hydrogel: Thank you Peter.
Heidy Kingwan Chow: Peter, hello everyone, and thank you for joining our first quarter 2024 call. Net revenues for the three months ended March 31, 2024 were $14.1 million as compared to $13.5 million in the three months ended March 31, 2023. The increase in net revenues was primarily due to the release of Art Survival Ascended. To properly account for revenues from sales, we must recognize revenue over time rather than all at once. This involves estimating when we will deliver the full game experience to customers through the transfer of the game license, downloadable content, technical support obligation, and how long we estimate that players will be engaged with our game.
hydrogel: Hello, everyone and thank you for joining our first quarter 2020 forecast.
hydrogel: Net revenues for the three months ended March 31, 2020 was $14 1 million as compared to $13 five pneumonia in the three months ended March 31st 2023.
hydrogel: The increase in net revenues was primarily due to the release of our survival assumed debt.
hydrogel: So property accounts for revenues from sale.
hydrogel: Now recognize revenue over time, rather than all at once.
Heidy Kingwan Chow: This involves estimating when we will deliver the full game experience to customers through the transfer of the game license, downloadable content, technical support obligation, and how long we estimate that players will be engaged with our game. The timing of future game updates and content releases is based on the projection of when our developers will hit certain milestones. However, those estimates can change if developers meet unexpected delays or if the game platform requirements shift unexpectedly. Essentially, property accounting for our gained revenue over time involves making projections that are subject to change based on the development milestone. The Estimated Service Period of our Virtual Goods and Market Conditions
Speaker Change: Involve estimating when we will delever at a four game experience to customers throughout the chance for update game license downloadable content.
Speaker Change: Nickel support obligations.
Speaker Change: How long we estimate that players will be engage with our games.
Speaker Change: This involves estimating where we will deliver the full game experience to our customers through the transfer of the game license.
Heidy Kingwan Chow: This can affect the timing of our revenue recognition each period and can cause the deferral of significant revenue into future quarters. The net loss for the three-month end of March 31, 2024 was $1.8 million compared to the net loss of $3.0 million for the three-month end of March 31, 2023. Bookings for the three months ended March 31, 2024 were $19.6 million as compared to $13.3 million for the three months ended March 31, 2023.
Speaker Change: Notable content technical support obligation.
Speaker Change: How long we estimate that play will be engage with our games.
The timing of future Qing update and content really is based on the projection of when.
Speaker Change: When our developer will hit certain milestones.
Speaker Change: However.
Speaker Change: SMA can change and develop our Smith.
Speaker Change: Expect that delay.
Speaker Change: Or if the game platform requirement.
Speaker Change: Unexpectedly.
Speaker Change: Essentially properly accounting for our game revenue overtime involved making projections that are subject to change based on the development milestones.
Speaker Change: The estimated service.
Lucas: Thank you Lucas and market conditions.
Lucas: This can affect the timing of revenue recognition each period and Ken caused the deferral of significant revenue into future quarters.
Lucas: Net loss for the three months ended March 31, 2024 was $1 8 million compared to the net loss of 3.0 pneumonia for the three months ended March 31st 2023.
Bookings for the three months ended March 31, 2020 for $119 six Amelia as compared to $13 3 million for the three.
Lucas: Three months ended March 31st 2023.
Heidy Kingwan Chow: The recent release of Art Survival Ascended on the Steam, PlayStation, and Xbox platforms was a primary factor in generating net revenues of $14.1 million. And the company deferred an additional $5.5 million in revenue for Ark Survival Ascended DLCs, which have not yet launched. Earnings before interest, taxes, depreciation, and amortization was a loss of $1.9 million versus a loss of $3.4 million in the prior year period. The decrease was due to a decrease in net loss of $1.2 million and a decrease in benefit from income taxes of $300,000.
The recent release of art survival are centered on the theme.
Lucas: Asian, and Xbox platform was a primary factor in generating that revenue of $14 1 million.
Lucas: And the company for an additional $5 5 million in revenue for our survival ascended DLC, which have not yet launched.
Lucas: Earnings before interest taxes, depreciation and amortization was a loss of $1 9 million.
Lucas: <unk> is a loss of $3 four in the prior year period.
Lucas: The decrease was due to a decrease in net loss of one 2 million and a decrease benefit from income taxes of 300000.
Lucas: As of March 31, 2024.
Heidy Kingwan Chow: As of March 31, 2024, our unrestricted cash and cash equivalents were $16.1 million. To review our detailed financial statements, please refer to the earnings release and also our most recently filed Form 10-Q, which was filed today with the SEC. Thank you for joining us today, and let's open the line up for questions. Operator.
Speaker Change: Alright, thanks for the cash and cash equivalent was $16 1 million.
Speaker Change: He will review our detailed financial statements. Please refer to the earnings release and also our most recently filed Form 10-Q, which was filed today with the SEC.
Speaker Change: Thank you for joining us today, and let's open the line up for questions.
Speaker Change: Operator.
Speaker Change: Thank you.
Operator: Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 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. Ladies and gentlemen, we will wait for a moment while we poll you for questions. Our first question is from the line of Pat McCann with Noble Capital Markets. Please go ahead.
Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question. Please press star and one on your telephone keypad.
Speaker Change: Confirmation tone will indicate your line is in the question queue you.
Speaker Change: You May press star two if you'd like to remove your question from the queue.
Speaker Change: Call participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keith.
Speaker Change: Ladies and gentlemen, we will wait for a moment, while we poll for questions.
Speaker Change: Our first question is from the line of Pat Mccann with Noble capital markets. Please go ahead.
Patrick McCann: Hey, good afternoon, and thanks for taking my questions.
Patrick McCann: Hey, good afternoon, and thanks for taking my question. My first question is, I guess, about the modding program. So far, could you provide any updates on the reception of the modding of the premium mods? Are users showing a propensity to pay for those? What are the early returns so far, and how do you feel about that going forward?
Patrick McCann: My first question is.
Patrick McCann: I guess with the <unk> program I was wondering.
Patrick McCann: So far could you provide any updates on on the reception of the morning of the premium odds are user.
Patrick McCann: Our users shown a propensity to pay for those.
What are the early returns so far and how do you feel about that going forward.
Peter Kang: Hi, This is Peter King and I'll speak a little bit about this marketing program. So.
Peter Kang: Hi, this is Peter Kang, and I'll speak a little bit about this modding program. So what we've noticed is there is a growing tendency inside this sector of the industry to start getting into allowing what's called user-generated content on your gaming platforms. It's a feature that has to grow and snowball in order to gain success. So, our biggest hurdles, I would say, are to allow content creators in the sector to understand the differences between our modding programs and others out there, such as pay rates, such as adaptation, and actual professional-level tools to do so.
Peter Kang: What we've noticed was there is a growing tendency.
Peter Kang: This sector of the industry.
Peter Kang: If you start getting into allowing what's called user generated content on on your gaming platform.
It's.
Peter Kang: It's a feature that has to grow and snowball in order to gain success. So.
Peter Kang: Our biggest hurdles I would say or to allow for content creators in this sector.
Peter Kang: I understand the differences.
Peter Kang: Between our marketing programs and others out there.
Peter Kang: Such as pay rates, such as adaptation and actual professional level tools to do so.
Peter Kang: So, what makes our program stand out is that our program uses Unreal 5, which is professional-level. Our program also allows for content creators to create content at a very polished level and eventually distribute the product across all console platforms. So right now, we see a growing adaptation rate. I believe there are around three mods that are fairly popular with sizable revenue. And we're watching and keeping a close eye on the amount of growth that is coming out of this program. Coming out in Q2, we will see more of this type of product. There are several exciting mods that are in the pipeline, and we're looking forward to releasing them.
So what makes our program stand out is that our program uses umbriel, five which is a professional level and Jim.
Peter Kang: Our program also allows for content creators to create content at a very polished level and eventually distribute.
Peter Kang: The product across all console platforms.
Peter Kang: So right now we see.
Peter Kang: A growing adaptation rate.
Peter Kang: I believe there is around three months they are fairly popular wood.
Peter Kang: With the sizable revenue.
Peter Kang: And we're watching and keeping a close eye on the amount of growth.
Peter Kang: And that is coming out of this program.
Peter Kang: <unk> coming out in Q2, we will see.
Peter Kang: More.
Peter Kang: This type of product.
Peter Kang: There are several exciting mazda or in the pipeline and we're looking forward to releasing them.
Speaker Change: Thank you and then.
Patrick McCann: And then my next question was regarding the DLC roadmap. You mentioned that you'd be releasing a DLC about every two months, which I guess, are included in ASA. But what about other DLCs, other potential DLCs that are sort of more standalone offerings that weren't included in that? What's the prospect of releases for those like that? And when would those fit in?
Speaker Change: My next question was regarding the DLC roadmap you mentioned.
Speaker Change: That you would be releasing.
Speaker Change: Ill.
Speaker Change: DLC about every two months.
Speaker Change: That were I guess included in Absa, Oh, what about.
Speaker Change: Other DLC other potential dlcs that are sort of.
Speaker Change: More standalone offerings that werent included in that.
What's what's the prospects of releases for releases like that and and.
Speaker Change: And when would those fit in.
Speaker Change: Yeah.
Peter Kang: So, you know, inside this roadmap that's public across our announcement channels for ARC, we have several unmentioned surprise types of content drops for the players. And within those time slots, there will be DLCs that were not inherently part of the previous ARC universe and are just being upgraded. Those will be new DLCs with new features. We're just not ready to fully unveil what they are yet, but they are being worked on, and they are part of the slotted schedule of a new map every two months.
Speaker Change: So.
Speaker Change: Third this roadmap that's public across our announcement channels for arc.
Speaker Change: We have several unmentioned surprise.
Speaker Change: The types of content drops to the players and within those time slots.
Speaker Change: B DLC, though we're not inherently.
Speaker Change: Part of the previous arc universe, and are just being upgraded those will be new dlcs with new features.
Speaker Change: We're just currently not ready to fully and bill what they are yet, but they are being worked on.
Speaker Change: And they are part of the slot is schedule a new map every two months.
Speaker Change: Great. Thanks, so much and if I could just squeezing one more I was.
Patrick McCann: Great, thanks so much. And if I could just squeeze in one more, I was wondering if, I believe this quarter that the ARC, ARC Survival Ascended, had a higher number of daily active users than ARC Survival. Is that a surprise at all, or what would be your expectations with, you know, I guess ASE has been around for quite a while and has a loyal user base. Is that something that you would expect for it to still have a higher daily active user than ASA, or is that a surprise?
Speaker Change: I was wondering.
Speaker Change: I believe this quarter.
Speaker Change: That the arc.
Speaker Change: Arc survival ascend it had a higher number of <unk>.
Speaker Change: Active users and arc survival ascended.
Speaker Change: Is that is that a surprise at all or what would be your expectations with I guess AAC has has been around for quite a while and it has a loyal fan base or user base is.
Speaker Change: Is that is that something that you expect for it to still have a higher daily active user then.
Speaker Change: Then assay or was that a surprise.
Peter Kang: Um, so it's not too much of a surprise. As it stands, Ark Survival Ascended uses the latest Unreal 5 engine, and we really have tuned the product to use the most of the engine's new features. And what this results in is a product that is cutting edge and requires a very high-spec PC system to fully optimize the game. And, you know, when you're on PC, what you're looking at is a growth curve of players who are on Ark Survival Evolved now using lower-end PCs, and as they start to adapt to the better technology, they will find themselves more eager to convert to Ark Survival Ascended and be able to enjoy the full effects of the Unreal 5 engine.
Speaker Change: So it's not too much of a surprise.
Speaker Change: As it stands art survival extended uses the latest unreal engine.
Speaker Change: And we really have two products.
Speaker Change: To use the most of the engines new features.
This result is a product that is cutting edge that requires a very high PC spec system to fully optimize.
Speaker Change: The game and.
Speaker Change: You know when you're on PC.
Speaker Change: While youre looking at.
Speaker Change: Our growth curve of.
Players who are on our survival evolved now using lower ltvs and as they start to adapt and do the better technology, they will find themselves more eager too.
Speaker Change: Convert to our survival attended and be able to enjoy the full effect of them real five engine.
Peter Kang: So, I would say this is the nuance of creating a product that's using the latest technology. As the mass population adapts to higher-end PCs, which will, you know, become more accessible across economic gaps, we will see Arc Survival Ascended continue to grow over time. And that's why, you know, we're okay with this new life cycle of releasing the DLC maps because we know that, over time, more and more players who have been exposed to the IP will upgrade to higher-end PCs and be able to convert to Arc Ascended.
Speaker Change: So I would say this is the nuance of <unk>.
Speaker Change: Creating a product thats using the latest technology.
Speaker Change: As the mass population adapt to higher end Pcs, which will become.
Speaker Change: More accessible.
Speaker Change: Across economic ads, we will see our survival extended continue to grow overtime.
Speaker Change: And that's why we're okay with this new lifecycle of releasing that.
Speaker Change: The DLC maps, because we know over time more and more.
Speaker Change: Players, who have been exposed to the IP well adapt to higher NPC.
Speaker Change: And be able to covert to ARCUS and it.
Speaker Change: Thanks, that's really helpful. That's all I have thank you.
Patrick McCann: Thanks, that's really helpful. That's all I have. Thank you.
Speaker Change: Thank you.
Operator: Our next question is from the line of Bo Pei with US Tiger Securities.
Speaker Change: Our next question is from the line of Bob <unk>.
Speaker Change: With U S Securities. Please go ahead.
Speaker Change: Hi management injection.
Bo Pei: Hi Benjamin, good afternoon. Thanks for taking my questions. So my first question is, given the success of the ARC franchise, what plans do you have to further expand this universe beyond games and the animated series?
Bob: Thanks for taking my questions. So.
Bob: So my first question is given the success of our franchise.
Bob: Do you have to further expand the universe of the gains in the end.
Bob: Latest series.
Peter Kang: Hi, This is Peter King.
Peter Kang: Hi, this is Peter Kang. So I'll be giving you a little bit more detail about this question. You know, as always, we've looked past video games and most of our endeavors to assist in expanding the ARC universe. Previously, we have operated with IP licensing models where we've created products that are still in gaming to expand the universe, to expand the reach to different audiences and age groups, products such as Pixar, a voxelated game, and products such as ARC Park, a VR game.
Speaker Change: I'll be giving you a little bit more detail about this question.
Speaker Change: As always we.
Speaker Change: Look past video games, and most of our endeavors to assist in expanding the Ark universe.
Speaker Change: Previously we have operated.
Speaker Change: With IP licensing models, where we've created products that are still in gaming to expand the universe to extend their reach to different audiences and age groups products such as the Pixar of OXXO later game products, such as Art Park VR game.
Peter Kang: And then, with the latest onset of ARC animated series, we've started to explore outside the confines of video games. Moving forward, we will continue to look for opportunities to license the IP and merchandising and other facets of entertainment and potentially even more diverse genres of gaming. So we will continue to grow the reach of the IP and the exposure of the IP to centralize around the various platforms that we have published products on.
Speaker Change: And then with the latest onset of arc animated series, we have started to explore outside the confines of video games.
Speaker Change: Moving forward, we will continue to look for opportunities to license the IP and merchandising.
Speaker Change: And other facets of entertainment.
Speaker Change: And potentially even more die.
Speaker Change: Diverse charters of gaming.
Speaker Change: So we will continue to grow the reach of the IP and the exposure of the IP to centralized around.
Speaker Change: The various platforms that we have published products.
Speaker Change: Got it.
Peter Kang: Got it. That's helpful. And then, can you provide more details on the three unannounced projects currently in development and how AI is being leveraged in the conceptualization process?
Speaker Change: That's helpful. And then can you provide more details on the three announced projects currently in development and how AI is.
Jean conceptualized change in process.
Speaker Change: Absolutely.
Peter Kang: Absolutely. So, you know, mostly when we go to create a video game, we start with concept art, which is 2-D. From there, we go into what's called 3-D modeling, and after 3-D modeling, we put texturization onto the model. And this process takes quite a bit of time to see a final product inside the video game. Right now, we're using AI to quickly iterate on the conception phase of the pipeline, where we're able to rapidly prototype different looks and visual effects inside the world using AI to generate the look and feel of a character model.
Speaker Change: So mostly win when we go to create a video game.
Speaker Change: We start with concept, which is two D.
Speaker Change: From there we go into what's called <unk> modeling and after you the BD modeling, we put characterization onto the model.
Speaker Change: And this process takes quite a bit of time to see a final product inside the video game.
Speaker Change: Right now, we're using AI to quickly iterate on conception.
Speaker Change: <unk> of the pipeline, where we're able to rapidly prototype.
Speaker Change: <unk> luxe and visual effects.
Speaker Change: Side, the world using AI to generate.
Speaker Change: The look and feel of a character model.
Speaker Change: As AI continues to improve soon we will be able to use.
Peter Kang: As AI continues to improve, soon we will be able to use AI to turn our 2D concepts into 3D, into 3D models. And the growth of AI is astounding at this point. We foresee in the future, within a year and a half to two years, that we will be able to fully create the process of 2D art to 3D models and textures, all with the help of AI. And what this does is it provides us with the ability to reduce costs across the board, to ideate at a much faster pace than previously.
AI to turn our <unk> content.
Speaker Change: And <unk> models.
Speaker Change: And the growth of AI is astounding at this point.
Speaker Change: We foresee in the future within a year and a half to two years.
Speaker Change: That we will be able to fully create the process of two D. R <unk> models and texture.
Speaker Change: With the help of AI.
Speaker Change: What it does is it.
Speaker Change: It provides us with the ability to reduce cost across the board to Ida.
Speaker Change: Much faster pace than previously.
Peter Kang: And we're able to, you know, really flesh out what the world's going to look like before we even start creating the product. And what this means is it's going to be a quicker development cycle for the end user. It's going to be a higher quality product while maintaining a lower cost to the end consumer.
Speaker Change: We're able to really flesh out what the world's going to look like before we even started creating the product.
Speaker Change: And what this means is.
Speaker Change: It's going to be a quicker development cycle to the end user.
Speaker Change: It's going to be.
Speaker Change: A higher quality product.
Speaker Change: <unk>, maintaining a lower cost.
Speaker Change: To the end consumer.
Speaker Change: Okay.
Speaker Change: Yes that sounds exciting and then my last question is.
Bo Pei: Yeah, that sounds exciting. And then my last question is, what is the expected contribution from the Nintendo Switch release of West Hunt? And are there any plans to bring other titles to the Switch platform?
Speaker Change: What is the expected contribution from the Nintendo switch with yourself West hung and are there any plans to bring auto titles to the switch platform.
Speaker Change: Absolutely. So you know the release of Western I'll, just switch for us to reach a greater audience.
Peter Kang: Absolutely. So, you know, the release of What's On on the Switch is for us to reach a greater audience. The game itself, being a social deduction game, very fitting for the Switch console, as we can see, players start to adapt to play the game while they're on the move, whether they're in a car, a train, or an airplane. They're able to enjoy the game because it is a short-session game. It is something that they can quickly play, enter, and exit at a rapid pace.
Speaker Change: The game itself being a social deduction game.
Speaker Change: Very fitting for the switch console.
As we can see players start to adapt to play the game, while they're on the move whether they are in the car or train of airplanes.
Speaker Change: They're able to enjoy the game because it is a short session game. It is something that they can quickly play.
Speaker Change: <unk> exit at a rapid pace and we do plan to continue to.
Peter Kang: And we do plan to continue to bring some more of our products to the Nintendo Switch platform, but we are slowly working on selecting which ones are the best fit. We do feel that it's important for the product to fit the platform, and so we'll continue to evaluate our library and catalog to see which ones are the best fit.
Speaker Change: Bring somewhat Moreover, our products to the Nintendo switch platform.
Speaker Change: But we are slowly working on selecting which ones are the best fit.
Speaker Change: We do feel that it's important for the product to fit the platform and so we'll continue to evaluate our library and catalog to see which ones are the best fit.
Speaker Change: Got it got it that's very helpful. Thank you so much that's all my questions.
Bo Pei: God, God, that's very helpful. Thank you so much. That's all my questions.
Speaker Change: Thank you.
Operator: Thank you. Ladies and gentlemen, this concludes our question and answer session. The conference of Snail Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.
Speaker Change: Ladies and gentlemen, this concludes our question and answer session.
Speaker Change: The conference call Snail, Inc. Has now concluded. Thank you for your participation you may now disconnect your lines.
Speaker Change: Yes.
Speaker Change: [music].