As 2023 gradually draws to a close, Modern Times Group (MTG) has released its strong Q3 financial report revealing year-on-year growth, a sales increase and broken records. Despite Q3 typically being "seasonally weaker" at MTG, growth has continued with persistent momentum throughout the year.
A successful quarter
Overall, MTG’s Q3 revenues were up 6% year-on-year, reaching SEK 1,494 million ($133.5 million). Sales, meanwhile, saw small growth at a 1% climb year-on-year or 2% compared to Q2. Adjusted EBITDA saw an impressive 30% margin, breaking records for the company with SEK 449 million ($40.3 million) in the quarter. Comparing to last Q3, MTG’s adjusted EBITDA was SEK 374 million ($33.5 million).
Total user acquisition spend, meanwhile, totalled 37% of Q3 revenues at SEK 554 million ($49.7 million), up from SEK 499 million ($44.7 million) last year. The company returned to organic growth in the third quarter too, maintaining its outlook for 2023 as a whole.
"The year-over-year growth was driven by PlaySimple and Ninja Kiwi, while nearly all our studios grew their sales on a sequential basis. It's also worth keeping in mind that PlaySimple received the last of its platform incentive payments in Q3 last year, which means that our underlying growth is even more encouraging," said MTG president and CEO Maria Redin.
"PlaySimple is the largest studio in our portfolio and is now beginning to benefit from the scale they have been building over the last two years. The strong year-over-year growth reflected the much larger user base for our word games, as well as the strong performance of Word Search and Crossword Jam in the quarter."
The latest acquisition
MTG announced on October 5 that it had acquired a majority stake in Snowprint Studios, a Swedish mobile games developer and Pocket Gamer Awards winner. This stake - claiming 70% of the company - notably falls outside of the Q3 report.
"I am also excited to have closed our first major deal since 2021 - the acquisition of Snowprint Studios after the end of the quarter," Redin continued. "This enables us to add the fast-scaling mid-core hit Warhammer 40,000: Tacticus to our portfolio and lets us welcome a great team of game industry veterans to our Gaming Village.
"Our continuously improving performance and strong operational dynamics mean that we are well on track to delivering on our full year revenue goals, while also enabling us to upgrade our full year margin outlook. This upgrade is driven by the strength and ongoing scaling of our casual portfolio, another quarter of highly successful monetisation of established users in Forge of Empires and strong growth from Bloons TD6."
As for what to expect next, MTG predicts a healthy recovery in North American and European markets, and will be synergising Snowprint with its other Gaming Village studios. We spoke with Snowprint’s CEO Alexander Ekvall about this acquisition, the journey so far, and what it's like working with such a beloved IP.
