Frenzy Games Q1 2019

This quarter we made core infrastructure changes, implemented several marketing campaigns and improved our subscription model. Our loyal and engaged audience played more games and generated over 17.50% increase in combined revenue.

New Players: -4.95%

We attribute the decrease in the number of new players mainly to the icons, screenshots, trailers and copy used in Microsoft Store. In the beginning of the year, we decided to fully embraced the Microsoft guidance for Microsoft Store artifacts. While the long term promise of potential of being promoted in the Store is tempting, we saw a steady decline in the number of new users trying our games. At the same time we saw Microsoft’s own apps and games go against these rules. As a consequence, we will experiment with new Store assets, some partially ignoring the recommendations by Microsoft. We believe this change, supported by the new designs, should attract more players, superior to the numbers in Q4 2018.

Total Players: -1.59%

Directly impacted by the lower numbers of new players, the total players also decreased in this quarter. While we are attempting to fix these changes, it’s important to notice the overall decline in the number of players is small, highlighting our dependence on our established users base. Several ways to strengthen our core audience will be presented in later sections.

Total Games: 5.87%

Despite our decreased number of total players and new players, we managed to optimize the engagement that resulted in a good increase in number of games played. However we do attribute some of the increase to the seasonality of our games – we know our players prefer to play more game rounds during the winter months. It is worth mentioning that Hexa Word Search and Knowledge Quiz show great potential in number of games played. In the current quarter, we plan to strengthen our existing good performers and to invest in UI changes to drive engagement for the underperformers.

Purchases: 7.31%

Our record breaking quarter was driven by several marketing strategies:
We continued periodically releasing strong content that outperformed previous content.
Flash sales for game anniversary. We used the games anniversaries as an opportunity to offer discounts on all our products similar to the flash sale we had for Black Friday and Cyber Monday.
We offered more product bundles driving higher sales at a cheaper cost for players.

Store Visits: 18.70%

Our marketing strategies implementation resulted in great increase in Store visits. However, we see the current gap between revenue increase and Store visits as an opportunity for further changes and improvements. Part of the increase can be attributed to flash sales which steer the user to the Store.

Store Conversion Rate: -9.59%

The discrepancy between the number of Store visits and the number of purchase has widen. The change was mostly driven by more window shopping on Jigsaw Journey. We have no immediate plan to curb this trend, but we do acknowledge we need to keep the quality bar high for the quality of the content.

Revenue from Ads: 10.48%

We see great opportunity in revenue generated from ads. We used this quarter to consolidate how and when we display ads. Our long term strategy relies on keeping users satisfied with our games. For reaching this goal we removed low performing ads and fixed several issues that were causing missing ads. The changes resulted in a planned 20% decrease in ad revenue. Despite this change, we were still able to deliver overall increase in ad revenue for the quarter. We believe the current ads – content balance is sustainable, and we have a great platform to drive higher revenue.

Ad Revenue Rate: -9.08%

The changes in the ads strategy resulted in a different structure for our revenue results. This quarter, the amount of ads that contributed to revenue decreased by over 9%. Notice we are not talking about falling revenue, just a change in the structure of the revenue that was composed of more sales than the previous quarter.

Revenue from Purchases: 21.52%

This quarter, the higher revenue results were driven by sales. Our content subscriptions, which we are now confident offers the right content – price balance, combined with increased revenue from new content and flash sales resulted in over 20% increase over an already strong Q4 2018.

Free Content Awarded: 88.13%

We started this quarter with the goal of rewarding our community with more free content. We offer content rewards as prizes for daily competitions, which we found to be a great way for driving engagement. This quarter we also unified the Frenzy Games Account, which determines our players to engage with other games in our portfolio.

Number of Subscriptions: 40.74%

We balanced the price – content offer for subscription and incentivized players with free trials and lower costs for longer subscription terms. As a result, we saw great increase of over 40% in the number of subscriptions sold.

Revenue: 17.86%

Overall, our combined channels for generating revenues managed to increase revenue by over 17.50% over an already strong Q4 2018. Be believe we put in place strong and sustainable mechanisms that generate predictable revenue, that we can further increase in the following quarters.

Summary

Metric Change %
New players -4.95
Total Players -1.59
Total Games 5.87
Purchases 7.31
Store Visits 18.70
Store Conversion Rate -9.59
Revenue from Ads 10.48
Ad Revenue Rate -9.08
Revenue from Purchases 21.52
Free Content Awarded 88.13
Number of Subscriptions 40.74
Revenue 17.86

Conclusions

Given our strong results and the revenue stream that we put in place, we are confident we can continue to increase our revenue. In the following quarters, we will experiment with even more ways of driving engagement, loyalty and revenue by strengthening our existing products and content and introducing new products.

Mihai Mihaila
Stockholm
April 2019