Wednesday, April 21, 2021 ? After growing at a CAGR of 45% over the past 6 years, MGI announced several organic growth projects at the beginning of the current year both, in the games and the media segment. Together they represent the most extensive growth pipeline in the company's history. In addition, industry experts expect the media market to recover this year after being hit by the covid pandemic. U.S. digital advertising spending is expected to increase by 26% in 2021, representing a 69% YoY increase in growth rate. MGI's Media Unit Verve, recently named one of the Top 12 SSPs for programmatic CTV supply[1], not only showed 59% revenue growth last year despite the difficult market environment, but also took the opportunity to position itself to leverage the re-increased advertising budgets and the corresponding market growth increase.
?We have made an impressive start into 2021 not only with the two acquisitions of LKQD and KingsIsle. In fact, we were able to use the first quarter to lay numerous organic cornerstones for future growth. Among others, with the announcements of Heroes of Twilight and Skydome in the Games Unit the launch of operations of our Media Unit Verve in Japan, the third largest advertising market in the world, we currently have the strongest organic growth pipeline in our company?s history. The positive growth prospects are complemented by a strong recovery of the media market due to the approaching end of the pandemic and by the EUR 40m tap issue in March, which again strengthened our war chest for further M&A-driven growth.?, says Remco Westermann, CEO.
Strongest organic growth pipeline in MGI?s history
After MGI has laid important groundwork for further growth during the past year, amongst other things with the listing on Nasdaq First North in Stockholm as well as extensive capital raising in the amount of EUR 120m, MGI was able to announce more organic growth projects at the beginning of this year than ever before.
In the games unit MGI provided more new content for the existing games portfolio in Q1 2021 than in any previous quarter. However, there is much more to come in the coming quarters. MGI announced various game launches, including the Korean version of Trove, which went live in March on the public servers of the local publishing partner Aprogen Games. With the mobile game Heroes of Twilight, developed by top Canadian developer BKOM and the Multiplayer Online Battle Arena game Skydome from ambitious developer Kinship Entertainment, MGI announced further new titles for the portfolio. Apart from that many large updates for the current games are being prepared and also several other new games are expected to be launched.
MGIs Media Unit Verve Group launched operations with an experienced team in Tokyo, Japan, focusing on serving local advertisers and brands. The Japanese Advertising market is the third largest advertising market in the world, following the United States and China. Another important step for Verve was the introduction of a new brand identity, bundling all media activities under the single Verve brand. Furthermore, Verve was able to continuously grow its games publisher partnerships with new clients such as Fuero Games, which has a portfolio of popular games on both the Android and the iOS platform. For instance, one of their games is a casual mobile game and accounts for over 20M downloads worldwide.
Media Unit Verve to leverage re-increased advertising budgets
While the global advertising market declined by around 4%[2] overall last year due to the pandemic, this Covid-related hit was less significant in the digital advertising sub-sector. Digital advertising proved to be very robust and, after a decline in the second quarter, rose again significantly (driven primarily by advertising spending via video games and e-sports) and made up for these losses during the rest of the year. Thus, the digital advertising market grew less strongly in the pandemic year 2020 than in previous years, but still by around 12%[3].
MGI's media unit Verve Group is active in the digital advertising market and offers various products and services with a focus on user acquisition for games companies. With this focus, the company managed to grow by approx. 59% in 2020 despite the pandemic and thus significantly outperformed the market. Due to a faster than expected economic recovery, supported by economic stimulus packages and a decline in Covid rates, overall advertising spending is expected to increase significantly again this year. For example, industry specialist eMarketer expects digital ad spend in the US, the biggest advertising market in the world and MGIs core market, to grow by around 26% in 2021.[4] Covid caused the shift from traditional media to digital media to accelerate further. In 2020, the digital advertising market accounted for around 59% of the total market. It is expected to increase to 70% by 2025, with the overall market growing at the same time.[5]
MGIs Media unit Verve did not only show strong growth in 2020 but made use of the year to further develop its product- and services portfolio. This leaves Verve well prepared and positioned to leverage the strong post-pandemic growth opportunities.
Presentations
MGI invites investors to participate in the presentation of the Q1 results on Monday, April 26, 2021 at 10:00 CEST. The presentation will be held in English and will also be available on-demand on the Company?s website at www.mgi.group.
https://tv.streamfabriken.com/media-and-games-invest-q1-2021
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