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Solid Clouds hf. Investor Presentation 2024
8579_rns_2024-02-06_cfd6542f-5f84-462c-840e-b090ad757a58.pdf
Investor Presentation
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SOLIDCLOUDS
INVESTOR PRESENTATION – FEBRUARY 2024
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GLOSSARY
- LTV (Lifetime Value): LTV refers to the total revenue a mobile game anticipates generating from a player throughout their entire engagement with the game. It is a crucial metric for assessing the long-term financial viability of the game.
- Marketing Funnel: The marketing funnel illustrates the stages a player goes through, from discovering the game to becoming a paying customer. It typically involves stages such as awareness, consideration, conversion, and retention.
- Retention: Retention measures the ability of a game to retain players over time. It is often expressed as a percentage and reflects the number of players who continue to engage with the game after their initial download.
- Live Operations: Live operations involve the continuous management and updating of a game post-launch. This includes events, updates, and ongoing content releases to keep players engaged.
- Mid Core Games: Mid core games bridge the gap between casual and hardcore games, offering a balance of depth and accessibility. They target players who desire a more engaging experience than casual games but without the steep learning curve of hardcore ones.
- Platforms: Platforms refer to the devices or systems on which a mobile game is available, such as iOS, Android, or specific gaming consoles.
- User Experience: User Experience (UX) encompasses the overall interaction and satisfaction players have with the game. It includes design, ease of use, and overall enjoyment.
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Development Cycles: Development cycles represent the stages involved in creating and updating a game, from initial conception and design to testing, release, and subsequent updates.
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Tech Stack: The tech stack refers to the combination of technologies and tools used in the development of a mobile game, including programming languages, frameworks, and databases.
- Gacha Games: Such games are a genre where players collect and advance heroes and spend in-game currency to receive randomized virtual items or characters.
- Direct Ads: Direct ads involve promoting a game directly to the target audience through channels like social media, websites, or other platforms.
- In-Game Purchases: In-game purchases involve transactions within the game, where players can buy virtual items, currency, or other enhancements using real money.
- Soft Launch: A soft launch is a limited release of a game to a specific region or audience before the full global launch. It allows developers to gather feedback and make necessary adjustments.
- Onboarding: Onboarding is the process of introducing new players to the game and guiding them through the initial steps to ensure a smooth and enjoyable start.
- Cost Per Install (CPI): Cost Per Install is a mobile gaming metric that measures the average expense incurred by a developer or advertiser for each new installation of a mobile game. It is calculated by dividing the total advertising spend by the number of installations generated.
- Discord is a communication platform popular in the gaming community. Discord provides text, voice, and video communication features, allowing users to create servers for specific interests or games, fostering real-time interactions and community building in games.
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I. COMPANY OVERVIEW
- THE PRODUCT
- MARKET OVERVIEW
- KPI & FINANCIALS
- THE SHARE OFFERING
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COMPANY OVERVIEW
POST // PROGRESS
OUR APPROACH
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OUR STRATEGY
Solid Clouds focuses on high quality games with exceptional visual fidelity, with emphasis on mid core games with high LTV potential.
OUR CORE TENETS
Design for Mobile first.
Facilitate simple and intuitive user experience that translates well to other platforms.
Build for cross platform to extend reach and lessen dependence on 3rd party vendors like App/Play Store.
Swift development cycles to stay in tune with market trends.
- Cohesive and experienced team of approximately 25 team members with game releases across multiple genres and platforms.
- Solid Clouds has built its own technological framework enabling accelerated production times, which significantly reduces development costs and other associated risk factors for its future games.
- Having released its first PC game in 2020, the company is close to Scaling its second game, Starborne FRONTIERS.
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OPTION 4
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COMPANY OVERVIEW
KEY MANAGEMENT
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Stefán Gunnarsson
CEO
Holds a B.S. degree in computer science from Reykjavik University. Previously worked for Marel, one of Iceland's leading technology firms. He also managed the multiplayer game Austerlitz, and was a professional gamer and early investor in CCP.
Stefán Björnsson
CFO
Holds a MSc degree in corporate finance from the University of Iceland. Previously worked at Iceland's Financial Supervisory Authority as chief credit analyst and was the chairman of the joint credit risk committee of FSA and the Central bank of Iceland.
Porgeir Auðunn Karlsson
CTO
Holds a MSc degree in computer science from Reykjavik University. He was a research scholar in machine learning at Emory University. Before Solid Clouds he was the tech lead and co-founder of Radiant games.
Egill Sigurjónsson
Producer
Holds a MBA degree from Cambridge University and a BS degree in Software Engineering from the University of Iceland. Previously a consultant at JAGEX, the publisher of RuneScape, one of the world's leading massively multiplayer online games. Founder of Convex games.
Ágúst Kristinsson
Art Director
Holds a BA degree in digital art from the Animation Workshop. He serves as art director. Before Solid Clouds he was the art director of Lumenox Games and worked as a digital artist at Caoz.
Marinó Vilhjálmsson
Technical Lead
Holds a B.S. degree in computer science from Reykjavik University. Previously worked as a backend developer at Lumenox games.
SOLIDCL OUDS
COMPANY OVERVIEW
TEAM COMPOSITION
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Solid Clouds leverages a skilled team of experienced developers, designers, and marketers, empowering us to seamlessly produce and effectively market captivating computer games in the dynamic gaming industry.
Following the full-scale launch of Frontiers in 2024, the team could potentially be divided, with one part dedicated to maintaining Starborne: Frontiers and the other part initiating the development of a new game.
Total team size: 25
TEAM EXPERIENCE:
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COMPANY OVERVIEW
BOARD OF DIRECTORS
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Sigurlina Ingvarsdóttir
Chairman
Sigurlina Ingvarsdóttir holds a B. Sc. in Industrial Engineering from the University of Iceland. She has management experience from CCP, EA, Ubisoft and DICE. Sigurlina has worked on some of the largest games in world, including Star Wars Battlefront and FIFA.
Ólafur Andri Ragnarsson
Vice Chairman
Ólafur Andri Ragnarsson holds an MSc in computer science from Oregon University. He is one of the founders of the gaming companies Betware and Raw Fury, and used to be an adjunct lecturer at the School of Computer Science at Reykjavik University.
Eggert Árni Gíslason
Member
Eggert Árni Gíslason holds a Cand.oecon. degree in business from University of Iceland. He has invested in startups like CCP and Play and is the General Manager of Mata hf. Eggert also serves as a board member for several other companies.
Svanhvit Friðriksdóttir
Member
Svanhvit Friðriksdóttir holds a M.A. degree in Public Relations and Public Communications from University of Westminster. She was the senior vice president of communications and marketing at WOW air and works as the public relations consultant and owner of SF Communications.
Brynjólfur Erlingsson
Member
Brynjólfur Erlingsson holds an M.Sc degree in Engineering and Management of Information Systems from Kungliga Tekniska Högskolan. He was the head of growth of Toca Boca and before that worked for game studios such as Mojang, Paradox Interactive, DICE, and CCP.
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23 03 COMPANY OVERVIEW
COMPANY MILESTONES
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STARBORNE SOVEREIGN SPACE AND TECH STACK
Solid Clouds founded in Q4
First prototype of Starborne: Sovereign Space (Alpha 1)
First iteration of Solid Clouds tech stack and third place in the startup competition Gullegglō
Second iteration of Solid Clouds tech stack
Alpha 7 test and first sales in game (5000 players)
Starborne: Sovereign Space launched with over 400,000 registered e-mails from users interested in the game
Third iteration of Solid Clouds tech stack
Technical Demo and Closed Beta of Starborne Frontiers, fourth iteration of Solid Clouds tech stack, 20th employee hired
Third iteration of Solid Clouds tech stack
Development of Starborne Frontiers starts and IPO of Solid Clouds on First North market in Iceland
Full launch and marketing of Starborne Frontiers scheduled for April
| Grants and R&D tax credits: | Investment: | Grants and R&D tax credits: | Investment: | Grants and R&D tax credits: | Investment: | Grants and R&D tax credits: | Investment: | Grants and R&D tax credits: |
|---|---|---|---|---|---|---|---|---|
| 23 m.kr. | 65 m.kr. | 155 m.kr. | 372 m.kr. | 83 m.kr. | 298 m.kr. | 383 m.kr. | 743 m.kr. | 130 m.kr. |
| Total: | Total: | Total: | Total: | |||||
| 88 m.kr. | 527 m.kr. | 331 m.kr. | 1091 m.kr. |
Lessons learned from Sovereign Space for future projects
- Deeper analytics of player behaviour needed
- Better balance between Player vs. Player and Player vs. Environment content
- Optimized marketing material prioritized
- Design for Multiplatform from the beginning
PC GAME!!!
"Sovereign Space is already shaping up to be an MMORTS unlike anything I've played before, following the adventurous and boundary-pushing spirit I'd expect from its EVE developer DNA."
- By Len Hafer, published June 03, 2019
STARBORNE FRONTIERS AND TECH STACK
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- COMPANY OVERVIEW
- THE PRODUCT
- MARKET OVERVIEW
- KPI & FINANCIALS
- THE SHARE OFFERING
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20 104
THE PRODUCT
STARBORNE: FRONTIERS
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- Frontiers is a mid-core tactical hero collector where players assemble and upgrade fleets to explore and conquer the Starborne universe.
- Players engage in battles with strategic and skillful gameplay on a multiplatform experience, which plays well on both PC and Mobile.
- Frontiers' visual style is designed for a Western audience in Gacha style monetization and progression systems, that have been popularized and well established in games like:
- Summoners Wars, Genshin Impact and Raid: Shadow Legends which are among the world's leading mobile games in terms of popularity and revenue generation.
- User feedback on recent game updates has been positive, leading to a notable increase in Google Play ratings now at 4.2 with 1.900 votes, where the majority of marketing spend is deployed. Current IOS APP store rating is at 4.6 with 200 votes.
STARBORNE
FRONTIERS
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24 THE PRODUCT
THE LOOK AND FEEL OF STARBORNE
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THE WORLD
- Takes place 400 years after the events of Starborne: Sovereign space
- The stage is set in the Spiral Expanse, an unexplored and newly discovered region
- Deeper emphasis on the Factions and characters of the universe
THE FEELING
- Giving players the sense of a “PC game on mobile”
- A Fresh visual take on the hero collection genre
- AAA gaming quality
- Deep Worldbuilding with stories suitable for mobile device playtimes
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THE PRODUCT
GAMEPLAY VIDEO
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23 03 THE PRODUCT
CORE GAME & MONETIZATION LOOP
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DOWNSHOOD
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THE TOWER OF WANT
I want to:
- survive as long as possible
- so that I can:
- earn rewards
- so that I can:
- upgrade my heroes
- so that I can:
- survive for longer
- so that I can:
- earn more rewards
- so that I can:
- upgrade my heroes further
- so that I can:
- beat harder levels
- so that I can:
- progress further
Spend:
Earn:
+stats
+characters
BATTLE
UPGRADE & COLLECT
Spend:
Earrgy
Recruitment
beacons
Refit
Equipment
Skill Neurons
Credits
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23 03 THE PRODUCT
THE PRODUCTION OF FRONTIERS
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| Task | 2021 | 2022 | 2023 | 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |
| 1. Concept Phase | |||||||||||||
| Establish Core Gameplay | ● | ● | |||||||||||
| 1st Art Pass Charaters & Ships & UI | ● | ● | |||||||||||
| User Tests on Prototypes | ● | ● | |||||||||||
| 2. Functional Game Build Phase | |||||||||||||
| Payment System & Offer Tooling | ● | ● | ● | ||||||||||
| Game Modes: Campaign & Bounties & Arena | ● | ● | ● | ||||||||||
| Analytics System | ● | ● | ● | ||||||||||
| 3. Live Testing Phase | |||||||||||||
| Secret Launch in Australia + Philippines | ● | ● | ● | ||||||||||
| Comprehensive Visual Overhaul | ● | ● | ● | ● | |||||||||
| Tutorial & Alliances Implementation | ● | ● | ● | ||||||||||
| LiveOps Offer: Battle Pass | ● | ● | |||||||||||
| 4. Global Soft Launch Phase | |||||||||||||
| Global Soft Launch | ● | ||||||||||||
| Abyss End Game System | ● | ● | ● | ||||||||||
| Subscription Offers | ● | ● | |||||||||||
| Start Marketing + Community + Support Tooling | ● | ● | |||||||||||
| 5. Full Launch Preparation Phase | |||||||||||||
| Final Polishing of Existing Systems | ● | ● | |||||||||||
| Prepare Scale Up Marketing Efforts | ● | ● | |||||||||||
| Establish Social Systems | ● | ● | |||||||||||
| Player Type Offer Targeting | ● |
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In mid-2021, the production of Starborne Frontiers commenced which capitalizes on the expertise of our experienced team and a robust technical stack which was developed during the creation of Sovereign Space.
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We contend that this prior experience and established tech stack cut production time in half.
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While the overall production of Frontiers has progressed smoothly, deviations from the initial plans have resulted in delays.
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Recognizing the competitive nature of the gaming market, especially for titles boasting superior graphics, gameplay, and balance, the decision was made to enhance the polish and overall quality of Frontiers.
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This decision aims to maximize the game's revenue potential in a market where higher-quality games tend to fare better.
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23 03 THE PRODUCT
DEVELOPMENT PROGRESS
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- Soft launch started in February 2023 where the focus was to get user data on both Apple and Android devices.
- Many of the key features are completed and the remaining ones are well on their way.
- We are now in the Stabilize and Fit to routine phases which are the final development stages.
- In these phases we are adding new game modes, live operations systems and more monetization systems.
- These features will enable us to keep players playing for the long run and maximize Starborne FRONTIERS revenue potential.
- Scaling will begin with a large strategic and targeted marketing campaign after the completion of the Stabilize phase.
- Our marketing funnel is set to be optimized and ready to scale, where initially in the Scaling process we aim to increase our daily installs tenfold.
SOFT LAUNCH LEARNINGS
integrated continuously until Scaling, to optimize monetization when marketing efforts start
COMPLETED
- Frontiers soft launched
- Store integrations
- Visual quality achieved
- Server scalability
- Support tools
IN PROGRESS
| Progression layers | 95% |
|---|---|
| Art production | 90% |
| Deboarding optimization | 95% |
| Game balance | 95% |
| Game content | 95% |
| Marketing material | 70% |
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THE PRODUCT
THE JOURNEY AHEAD TO SCALING
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NEW units - 10 Epic and 5 Legendary heroes added. Increased total count to 115. Extra units should add to the player lifetime value [LTV] potential.
Visual update - In-between chapter animations & visual sequence, improving the new player experience.
Player onboarding - User experience in the tutorial improved and cleaned up, improving the new player experience.
Fusion system introduced - fusions are new player goals which can improve player retention.
Play er onboarding II - Enriched campaign narrative with elevated goal setting. These enchantments aim to improve Day 1 to Day 3 player retention.
Marketing funnel - Ready for scale on Google and Facebook.
Global release - Scaling begins with increases to marketing budget and influencer campaigns.
Live operation - Frontiers is ready and future development goals are aimed at maintaining live operations.
SEPTEMBER
NOVEMBER
JANUARY
APRIL
2023
OCTOBER
The Abyss - Large content patch which adds 30 minutes of daily playtime which increases long term player retention.
Implant system - New player progression layer introduced. This enables us to seed rewards to new game content.
DECEMBER
Arena overhaul - An existing social game mode improved. Strong social systems generally increase retention.
Summoning events - Multiple new events introduced for live operations which boost monetization.
MARCH
PC version ready - marketing reach and targeting extended.
Calibrating store offers and fine tuning the monetization to increase the revenue per active player.
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20 21 THE PRODUCT
PROMISING TIMES AHEAD
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- Starborne FRONTIERS already has highly engaging gameplay that readily converts new players into paying customers.
- Additional content for long term player retention is being developed with a clear path towards the full scale marketing efforts of Starborne FRONTIERS.
- A PC version is scheduled to be ready in Q2 enabling broader accessibility and improving customer acquisition efforts while reducing costs associated with third-party vendors like Apple and Google.
STARBORNE FRONTIERS will be ready for Scaling in APRIL 2024
- The technical framework and team experience has grown significantly during the development of Starborne FRONTIERS and we are equipped and ready to explore new opportunities once Starborne FRONTIERS enters into live operation.
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- COMPANY OVERVIEW
- THE PRODUCT
- MARKET OVERVIEW
- KPI & FINANCIALS
- THE SHARE OFFERING
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MARKET OVERVIEW
GLOBAL GAMING MARKET
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Estimated 3.4 BILLION video game players worldwide in 2023 with that number set to grow to 3.8 BILLION in 2027
After realising significant growth in recent years, the global gaming market size is on track for $188BN in 2023, targeting $212BN by 2026, exceeding the combined revenues of the TV, film and music industries.
GLOBAL VIDEO GAME MARKET (USD IN BN)
Source: Newzoo.com | Global Games Market Report August 2023 & Older Reports
- Newzoo does not break down its forecast in available reports for 2025 & 2026
Solid Cloud's total addressable market is estimated to be up to:
15BN USD
TOTAL MARKET GEOLOCATION SPLIT
Revenues in the global mobile market from in-game spending are expected to generate a staggering $90BN in 2023 covering 97% of the segment's global revenues
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23 03 MARKET OVERVIEW
COMPETITION IN GACHA MOBILE GAMES
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DOWNTOWER
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Title: Raid Shadow Legends
Published in: 2019
Downloads: >75M
Lifetime revenue: > $2B
Publisher: Plarium
Style: Fantasy
Title: Summoners War
Published in: 2014
Downloads: >110M
Lifetime revenue: > $2B
Publisher: Gamevil
Style: Anime
Title: AFK Arena
Published in: 2018
Downloads: >20M
Lifetime revenue: > $1B
Publisher: Lilith Games
Style: Anime
WHY GACHA GAMES?
- Gacha games are video games that incentivize players to use in-game currency to acquire virtual items as they advance. These games typically involve players obtaining said items by spending in-game currency or by purchasing them using real-life currency.
- Growing segment of the Mobile game market.
- Gacha games have one of the highest Lifetime Value per Player (LTV) in the gaming sector.
- Several games in the genre have achieved huge sales.
NO SPACE THEMED GAME IN THE GENRE
- RAID: Shadow Legends has demonstrated that there is a market for semi-realistic hero collector games in the Western market.
- Frontiers can be differentiated by offering players more freedom and exploration than RAID and many other party battler games.
- Space is more popular in the West than in the East, as witnessed by popular games such as Star Trek Fleet Command, Eve Online and Mass Effect.
Source: Appmagic.rocks, Sensor Tower & Game Industry.biz
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MARKET OVERVIEW
IDENTIFYING THE TARGET MARKET
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In order for Starborne Frontiers to be successful, we need to find the right customers at the most favorable prices possible as approximately 85% of new users in free to play games will enter the game through direct marketing.
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Through user surveys we have identified Achievers as the primary persona, complemented by Explorers.
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This has been validated by running hundreds of A/B tests with over 100+ different creatives and 5M ad impressions on both broad and focused groups.
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All test groups have over 2.000 test subjects and are split into three separate age brackets; 18-29, 30-39 and 40+.
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Diverse ship collections and dynamic gameplay tends to captivate this group of users more than others.
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Achiever-targeted creatives show 3x lower user customer acquisition costs.
KILLERS
ACHIEVERS
EXPLORERS
SOCIALIZERS
CTR 4 - 6%
UAC $1.0 - $1.9
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TARGET MARKET
ACHIEVERS
- Motivated by mastery
- Love upgrading, progressing and overcoming obstacles
- We see massive potential with this group
SOCIALIZERS
- Motivated by relatedness
- Want to interact with others and create social connections
- There is some potential there for future growth
FREE SPIRITS
- Motivated by autonomy and self expression
- Want to create and explore
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As the game expands opportunities to reach this group will grow
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Achievers want to be the best at things or, at least, be achieving things within the game. The vast majority of Gacha games players are achievers.
- Will compete with others, but as a way to become better than others.
- May also be motivated by status as a representation of their personal achievement.
- They need a game that will enrich them and lead them towards mastery.
- We designed a game for achievers because this demographic tends to be high spenders in computer games. The Company possesses a deep understanding of this player type, gained through the development of Sovereign Space.
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MARKET OVERVIEW
TARGET MARKET
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- CATHYTRANCO
- CONTRERAD
- EMPTY
WESTERN COUNTRIES ARE OUR MAIN TARGET
We expect 50-60% of revenue to come from USA
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MARKET OVERVIEW
GO-TO MARKET STRATEGY & NEXT STEPS
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USER AQUISITION
Using deep learning and algorithms to find and target the right audience cost efficiently.
PLAYER ONBOARDING
Continuously improving user onboarding increases the tutorial pass through rate significantly.
RETENTION
Keeping the players engaged through captivating gameplay and rich content generates higher lifetime value.
MONETIZATION
Optimizing and testing the monetization mechanics will help achieving positive ROI.
- With over 25 years of experience in the Finnish mobile game industry, Tanja Levo, a seasoned marketing expert, is named Head of Growth at Solid Clouds. The company strategically employs tools like AppsFlyer to meticulously track and enhance the efficacy of its marketing campaigns.
- A key strategy in marketing Starborne Frontiers is the development of a vibrant player community, primarily through Discord, a player community portal. Aron Ólafsson, recently named Chief Marketing Officer, contributes a wealth of experience from his previous success in building a 15,000-strong esports community in Iceland. In tandem we will continue to enhance the social aspects of the game to boost organic growth and player retention even further.
- Solid Clouds aims to build a library of world-class marketing material on top of our current library which consists of 200+ videos and 100+ images.
- We will continue performing A/B tests to optimize marketing materials before commencing a full-scale marketing campaign following the hard launch of Starborne: FRONTIERS. Additionally we will pitch Apple, Google, and press for visibility on mobile platforms and review sites.
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- COMPANY OVERVIEW
- THE PRODUCT
- MARKET OVERVIEW
- KPI & FINANCIALS
- THE SHARE OFFERING
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KPI & FINANCIALS
REVENUE SCENARIOS
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The revenue scenarios are based on several key assumptions, such as securing a minimum of ISK 400 million in funding, the Effective Cost Per Install (eCPI), the size of the Daily Active User (DAU) pool, maintaining player engagement, the Average Revenue Per Daily Active User (ARPDAU), the distribution of revenue between PC and Mobile platforms and rate at which advertising expenditure generates income.
LTV - (eCPI + OTHER COSTS) = PROFIT / LOSS
- Player Lifetime Value (LTV)
- Effective Cost Per Install (eCPI)
- Retention curve along with players' average spend per day determines LTV
- Costs > Salaries, servers, payment fees, etc.
The key drivers behind different revenue scenarios is the projected lifetime value (LTV) of each gamer during their active period in the game and the rate at which advertising expenditure generates income (Return on Advertising Spend, ROAS).
- The LTV is shaped by both player retention and their in-game purchases.
- DAU - The number of Daily Active Users
- USD/ISK exchange 139.
Here below are target KPIs for low, base and growth scenarios:
| Low Case | Base Case | Growth | |
|---|---|---|---|
| Projected Lifetime Value (LTV) | $6 | $10 | $14 |
- Solid Clouds will continuously develop Starborne Frontiers and the growth drivers will be new content, localization for non English speaking markets, new platforms and social systems.
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KRJ & FINANCIALS
IMPROVEMENTS IN KPIS FROM AUGUST
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Rapid progress in game development
Between August 2023 and January 2024, our game development efforts have been concentrated on boosting player engagement. This period has seen consistent progress, particularly in key metrics such as Day 1, Day 7, and Day 30 retention rates. Additionally, there has been a notable rise in the average daily playtime and Average Revenue Per Daily Active User. These enhancements reflect our commitment to creating a more captivating and enduring gaming experience for our players.
Engagement KPIs witnessed growth from August 2023 to January 2024:
- Day 1 retention ("D1") has increased by 31%
- Day 7 retention ("D7") has increased by 21%
- Day 30 retention ("D30") has increased by 164%
- Average playtime has increased by 163%
Monetization KPIs witnessed growth from August 2023 to January 2024:
- Average Revenue per Daily Active User ("ARPDAU") has increased by 100%
- Average daily conversion saw a 49% increase
- Monthly repeat buyers rose by 5%
ROAS (Return On Ad Spend) means measuring how much revenue was earned in comparison to how much budget was spent. ROAS serves as a crucial metric for gauging the effectiveness of advertising campaigns. A campaign that generates in revenue within a week at least 20% to the advertising expenditure signals a strong indicator of the campaign's profitability.
Solid Clouds has achieved 7 days ROAS of:
- 28% in December 2023
- 41% in January 2024
As we approach the scaling phase for Frontiers, our primary focus will continue to be on optimizing the current game systems. During this period, we anticipate continuous enhancements across all Key Performance Indicators (KPIs), with a particular emphasis on monetization strategies starting in the first quarter of 2024.
SOLIDCLouds
APPENDIX
HOW WE WILL CONTINUE TO INCREASE OUR TARGET KPIS
| Retention | |
|---|---|
| Short term retention | Long term retention |
Introducing a PC client will enhance user experience and convenience, thereby contributing to improved retention rates.
Revamped onboarding for a smooth player transition into the main game loop.
The initial download size for both Apple and Android users will be reduced.
Building up our community (Discord channel) with more interactive initiatives.
User notifications will be revamped to provide segmented, personalized reminders for players to log in and claim rewards
New player guides, various content and promotional codes will be distributed across several platforms.
Better D1 retention will feed into increased D7 to D90 retention.
Monetization and marketing
Average Revenue Per Daily Active User
Cost per install (CPI)
Better targeting afforded on PC devices will keep down cost per install.
Refinement of the game economy and balance will enhance monetization.
Tailored special offers will be developed to align with diverse player styles, enhancing the individual gaming experience and optimizing revenue streams.
The focus will be on players who complete the tutorial and engage in in-app purchases (tracking Return-On-ad spend ROAS).
Increased Precision in User Targeting on mobile devices.
Further A/B testing for text, icons, imagery, and videos to optimize our App Store presence.
Partnerships with YouTubers and influencers to create engaging content for Starborne Frontiers.
The 500k-strong email list from Sovereign Space community will be used for scale-up of Starborne Frontiers.
Research and refinement and A/B testing, on messaging and visuals in advertising will set accurate player expectations.
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KPI & FINANCIALS
CAPITALIZED R&D TO DATE
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THE BOOK VALUE OF CAPITALIZED DEVELOPMENT COSTS
Solid Clouds has made significant investments in developing its tech stack and the Company's games, such as Sovereign Space and Frontiers. The following provides a historical overview of the book value of capitalized development costs.
SOLIDCLUUDS
KPI & FINANCIALS
USE OF PROCEEDS
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COMPARISON
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Solid Clouds has raised ISK 220 million through a private placement, enabling the launch and marketing of Starborne Frontiers in April 2024. The company plans to raise an additional ISK 180 million via a share offering to cover 2024's operational and marketing costs. Should key performance indicators show favorable results, Solid Clouds intends to obtain further financing through a share offering to accelerate its marketing efforts.
- Financing in excess of ISK 400 million will enable the Company to scale up its marketing efforts more rapidly
- The Company anticipates that tax credits earned in 2023 and reimbursed this year will amount to approximately ISK 130 million.
The bigger the investment
The larger the marketing budget
More players
INCREASED
REVENUES
SOLIDCLUUDS
23
24
KPI & FINANCIALS
USE OF PROCEEDS - SCENARIOS
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USE OF FUNDS - SCENARIOS
Displayed above are two scenarios showing the use of funds depending on the total amount issued in the share offering proposed. All revenue during the first months after scaling will go into advertising. None of the scenarios include any potential revenue.
- Scenario 1: 220 m.kr. Investment with reduced operating costs
- Scenario 2: 400 m.kr. investment
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KPI & FINANCIALS
HISTORICAL USE OF PROCEEDS
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FUNDING OF SOLID CLOUDS
STRONG FOUNDATION
supports future success
LARGE and GROWING
market
Business model with
HIGH MARGIN POTENTIAL
- The future of the gaming industry is exciting, demonstrating strong growth in an growing sector.
- Solid Clouds has consistently received positive feedback from users, representing the accomplishments achieved and driven by the company's experienced team.
- With the proposed share offering in hand, the funds will be used to:
- Generate revenues as they play a key role in the marketing efforts during Scaling. In addition, the funds will support the final stages of development of Starborne FRONTIERS by the creation of additional game content, ensuring player retention and achieving our revenue potential.
SOLIDCLOUDS
KPI & FINANCIALS
FINANCIAL HIGHLIGHTS
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Solid Clouds has invested significantly in recent years, with capitalized development costs close to ISK 1003 million on 31 December 2023.
| Figures in ISK millions | 2021 | 2022 | 2023 E |
|---|---|---|---|
| Operating revenues | 14 | 12 | 20 |
| Grants and R&D tax credits | 102 | 112 | 139 |
| Total revenues | 116 | 124 | 159 |
| Development cost | 286 | 351 | 365 |
| Other operating expenses | 32 | 44 | 70 |
| Total operating expenses | 318 | 395 | 435 |
| Financial income | 1 | 12 | 9 |
| Cash at end of period | 567 | 310 | 45 |
Solid Clouds anticipates that R&D tax credits earned in 2023 and reimbursed this year will amount to approximately ISK 130 million.
31.12.2023
Preliminary numbers
Figures in ISK millions
| Assets | Pre-increase | Post-increase |
|---|---|---|
| Capitalized development costs | 1002 | 1002 |
| Rental properties | 11 | 11 |
| Income tax credit | 130 | 130 |
| Total fixed assets | 1143 | 1143 |
| Receivables | 8 | 8 |
| Other receivables | 4 | 4 |
| Cash and cash equivalents | 45 | → 265-445¹ |
| Total current assets | 56 | → 276-456 |
| Total assets | 1199 | → 1419-1599 |
| Total liabilities | 45 | 45 |
| Total equity | 1154 | → 220-400 |
| Total equity and liabilities | 1199 | → 1419-1599 |
¹Excluding transaction costs and other related costs to the proposed share capital increase
For further information, please see the full financial statement for 1H 2023 at Solid Cloud's investor relations website.
SOLID CLOUDS
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- COMPANY OVERVIEW
- THE PRODUCT
- MARKET OVERVIEW
- KPI & FINANCIALS
- THE SHARE OFFERING
SOLIDCLUDS
23 03
THE SHARE OFFERING
THE SHARE OFFERING
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| PREEMPTIVE RIGHTS OFFERING | PUBLIC OFFERING | |
|---|---|---|
| OFFERING SIZE: | 90,000,000 shares | |
| (up to approx. 23% ownership post-money) | ||
| SUBSCRIPTION AMOUNT: | No minimum subscription amount | Subscription amounting from ISK 100,000 |
| PARTICIPATION: | Preemptive rights holders | Icelandic Investors |
| PRICE: | Fixed price of ISK 2 per share | |
| ALLOCATION*: | The Company's Board of Directors decides the allocation to investors in the public offering. New shares will first be allocated to those parties who are entitled to preemptive rights. If new shares remain unallocated after the preemptive rights offering, those shares will be allocated in the public offering |
*Allotment to investors in the public offering depends on the fact that subscriptions have not been obtained for all the new shares in the preemptive rights offering. For that reason, the allocation in the public offering will take place after the allocation in the preemptive rights offering.
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23 THE SHARE OFFERING
KEY DATES OF THE SHARE OFFERING
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KEY DATES
- 16-20 February | Subscription period
- 20 February | The results of the Offerings expected to be published
- 22 February | Allotment of the Offerings expected to be announced
- 27 February | Expected final due date for payment by investors
- 27-29 February | Expected delivery of new shares
- 29 February | Expected first day of trading with new shares
| FEBRUARY | ||||||
|---|---|---|---|---|---|---|
| MO. | TU. | WE. | TH. | FR. | SA. | SU. |
| 1 | 2 | 3 | 4 | |||
| 5 | 6 | 7 | 8 | 9 | 10 | 11 |
| 12 | 13 | 14 | 15 | 16 | 17 | 18 |
| 19 | 20 | 21 | 22 | 23 | 24 | 25 |
| 26 | 27 | 28 | 29 |
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THE SHARE OFFERING
POTENTIAL TAX BENEFITS
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Solid Clouds has currently obtained confirmation from the Icelandic Tax Authorities regarding the applicability of tax deduction for individuals' investment in share capital increase in the company.
Related to the issuance, individuals that are domiciled and taxable in Iceland and invest in shares in Solid Clouds, by participation in share capital increase, may be applicable for tax deduction from their income tax/capital gains base of up to 75% of such investment.
To be applicable, the minimum investment by each individual utilizing the tax deduction shall be ISK 300 thousand and the maximum deductible investment is ISK 15 million per individual. The deductibility is not applicable for investments of legal entities.
For tax benefits to be valid investors need to hold the shares for at least three years. If not, the tax deduction is reclaimed with a +15% surcharge on the initial investment.
Investors are encouraged to seek assistance from tax specialists for further information. Other conditions from Iceland Revenue and Customs may apply. It shall be noted that the requirements for both the company and the individual investor for tax deduction must be applicable at the time of each share capital increase.
See rules here:
https://www.skatturinn.is/einstaklingar/tekjur-og-fradrattur/hlutabrefafradrattur/
See calculator here: Áhrif skattfrádráttar vegna hlutabréfakaupa í Solid Clouds – GRID / see current applicable legislation in art. 1. tölul. B-liðar 1. mgr. 30. gr. of Act 90/2003 found here https://www.althingi.is/lagas/nuna/2003090.html
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[ ]
LEGAL DISCLAIMER
The presentation is prepared and provided for information purposes only in connection the Company's capital increase. This presentation is based solely on public information on the Company and information from the Company itself.
The Company, and it's advisors as applicable, shall not be held responsible for the quality, reliability, or accuracy of the presentation. The Company, the Company's employees or it's advisors as applicable, shall not be held responsible for the information, forecasts or analysis that may be included in the presentation or the information provided in connection with it. Neither the Company nor it's advisors as applicable, assume any responsibility for future developments and / or operations will be in line with the presentation. Neither the Company, nor it's advisors as applicable, shall by the delivery of the presentation, or in any other way, be deemed to have assumed any responsibility regarding the information provided by the presentation, the criteria on which the presentation is based, or that the results of the presentation are in any way comprehensive, fair and complete. Furthermore, the Company shall not be held responsible if the content of the presentation proves to be incorrect in any way in this connection.
All recipients of this presentation are strongly encouraged to carry out their own analysis of the events and circumstances of the presentation, as well as the Company, and the measures described in the presentation, and to independently evaluate these aspects on the basis of such analysis.
Recipients of this presentation are not allowed to share information from the presentation with third parties or make copies of it without a written consent from the Company.
Recipients of this presentation shall be deemed to have accepted these terms by accepting this presentation.
SOLIDCLUUDS
www.solidclouds.com