5th Planet Games A/S — Management Reports 2024

Jan 31, 2024

2-2024 CEO newsletter #4

2-2024 CEO newsletter #4

Happy New Year! I am writing this newsletter at the end of January, full of optimism and enthusiasm for the year ahead and the opportunities that await us.

The video games news site Games Industry.biz recently published some data on the year ending December 2023 and the numbers spoke to the sheer scale and global nature of the video games market. They estimated global revenues driven by video games at $184bn with mobile and console games taking the lion’s share of that revenue, the full summary is available to view here https://www.gamesindustry.biz/gamesindustrybiz-presents-the-year-in-number-2023

Whilst at first sight the picture of the market is positive, there were also many challenges in 2023 as economies around the world made the adjustment to new conditions and consumer spending was squeezed. When we look again at the results of 2023, we notice that whilst the market continued to grow it was dominated by the established brands such as Harry Potter, Call of Duty, and Zelda, and by the biggest companies like Tencent, Activision Blizzard and NetEase. As consumers are facing pressure on their household finances, it is no surprise that so many have turned to games and publishers that they recognized. In reality, and despite the positive global revenue numbers, 2023 was a challenging year for many in the games industry and unfortunately it was not a surprise to see so many publishers and developers announcing layoffs towards the end of last year.

Steam has become a critical ”proving ground” for virtually all new video games, as a positive response from the Steam audience and successfully generating early revenue can prove to be a foundation for a new game to be considered for further publishing on console formats. However, 2023 saw a record number of new games on Steam with over 14,500 arriving on the platform last year, with all the challenges of visibility and discovery that brings; it was a very tough marketplace to get noticed.

So, a year of growth and global potential, but also a year of challenges; where does all of that leave a company like ours?

• We are a small company, but we have strong partners and access to world-class content. For me this puts us in a great position as we can navigate the shifting global market with fast, nimble feet, but know that we have the capability of really making an impact with the content we bring; this won’t always guarantee commercial success (nothing will), but it puts us in a strong competitive position.

• We actively look at ways to use our core strengths and capabilities to mitigate the inherent risk of games publishing. This explains why we now address not just mobile, but all viable games platforms, and why we took a take in Sagafilm last year to diversify into new and exciting product categories.

My plans for 2024 are pretty straightforward and they focus on the following:

1. Operating the business profitability.

2. Find the best possible content to bring to market.

3. Strategic opportunities to use our resource to grow our business and mitigate risk.

Finally, I remake my commitment to our investors and shareholders to feedback as openly and transparently as I can on our journey.

With best wishes for the year ahead.

Mark