In recent days, GAMIVO SA unveiled its Strategic Development and Innovation Plan and sold one of its subsidiaries. These are key issues, so it is natural that they have sparked curiosity and prompted analysis by shareholders, analysts, and market observers. There were also several questions about the details of the actions taken. Therefore, CEO Mateusz Śmieżewski and board members Tomasz Lewandowski, Bartłomiej Skarbiński, and Marek Sutryk answered the most important ones.
Why did the group sell Gamivo.com Ltd. which previously accounted for 99% of the group’s revenue and net profit?
One of the main objectives of the company’s new strategy is to license the solutions we have developed. A necessary step for this was the spin-off from the group of the company that operates the platform. This means that it primarily handles transactions. It was this aspect that prevented the GAMIVO Group, in its current form, from expanding into parts of the Asian or South American markets.
We would like to reassure you that by changing the license agreement, the sale of GAMIVO.com Limited does not automatically mean getting rid of 99 percent of the revenues. These will go back to the company, but based on royalties, not dividends, as was the case before. Also, the know-how, technology, software, logo, domain, and website, as well as all intellectual property, will remain in the possession of GAMIVO SA.
Why were no details of the Gamivo.com Ltd. sale transaction provided?
The sale of Gamivo.com Limited was made to a company that has all the aptitude for managing this type of entity. This choice of business partner was dictated by the desire to optimize management and realize the potential of Gamivo.com Limited in the new arrangement.
As for the issue of not providing details of the transaction, a key factor is the protection of trade secrets. The detailed terms of the transaction, including the amount of the license fee, are strategically important information for our company. As we plan to enter into similar licensing agreements with other entities in the future, we do not want to set a public benchmark that could influence our future negotiations and terms of cooperation.
We emphasize that the amount obtained from the sale of Gamivo.com Limited was higher than the amount of its purchase in the past, as we reported in the announcement. This is an important indicator that shows that the management’s actions were effective and financially beneficial for the company. However, it is worth noting at the same time that the actual market value of Gamivo.com Limited, outside of the licensing structure with GAMIVO SA, is limited. Key assets such as intellectual property, technology, software, and brand have always been and continue to be in GAMIVO SA. It is these elements that form the core of our value and market potential.
In addition, our strategy is to acquire more partners around the world, which involves a variety of terms and licensing rates. Public disclosure of the details of one transaction could adversely affect our negotiating position in future agreements.
Maintaining the confidentiality of certain aspects of our business is a standard business practice to protect the interests of the company and its shareholders. We ensure that all decisions are made with full knowledge of their impact on the future development and stability of GAMIVO SA.
We are committed to transparency within limits that do not threaten our commercial and strategic interests. We always strive to strike a balance between providing information and protecting critical company data.
How is it possible that the company will remain profitable after the sale of Gamivo.com Ltd?
First and foremost, it is important to emphasize that all intellectual property (IP), including software, technology, brand, and the GAMIVO.com domain, remains in the possession of GAMIVO SA. This means that the key assets, which are the foundation of our business and the source of our competitive advantage, remain with GAMIVO SA. This gives us full control over the development and monetization of our platform.
Moreover, the licensing agreement with Gamivo.com Limited guarantees that GAMIVO SA will continue to receive revenues from the platform’s operations through the licensing agreement. This agreement is a key element of our business model following the sale of the Malta company. As a result, we can generate recurring revenues even after separating from the operational management of Gamivo.com Limited. It is also worth noting that the value of Gamivo.com Limited without the license granted by GAMIVO SA is relatively small. This underscores that the real value is in our technology and intellectual property.
In addition, our strategy includes the possibility of licensing to other entities worldwide, which opens up new opportunities for growth and diversification. We also plan to expand our offerings with new products, not just digital games. This is all aimed at increasing our presence in the global market and further increasing our revenues.
In conclusion, the preservation of the profitability of GAMIVO SA. after the sale of Gamivo.com Limited is secured by retaining control of key assets, a revenue-generating licensing agreement, and a strategy of business development and diversification. We are confident that these measures will allow us to continue our growth and success in the digital distribution market.
What guarantee does GAMIVO SA have that the new owner of GAMIVO.com will not terminate the license agreement?
We understand that this issue is important to our shareholders, so we would like to provide a clear explanation.
The key aspect of this situation is that the value of GAMIVO.com Limited without a license agreement with GAMIVO SA is indeed minimal. This company has been structured and developed in a way that makes it heavily dependent on the license. Without access to technology, brand, software, and intellectual property, GAMIVO.com Limited is unable to operate effectively in the digital distribution market. Accordingly, the new owner of GAMIVO.com Limited has a strong economic interest in maintaining this arrangement.
It is also worth noting that our strategy and business model are designed to avoid relying solely on a single licensee. We aim to diversify our business by licensing it to various entities, which increases the stability and security of our company.
We are confident that these measures, combined with the business relationships we have developed and the mutual benefits of the agreement, provide a solid guarantee of continued cooperation with the new owner of GAMIVO.com Limited.
What responsibility/division of duties is left to GAMIVO SA and what to Gamivo.com Limited?
Gamivo.com Limited, like any other operator that signs a license agreement with us, will be responsible for day-to-day transactions in its markets. This includes managing the sales process, handling payments, and processing orders. Their role focuses on the operational management of the platform in specific regions, allowing for more effective adaptation to local market specifics and needs.
In turn, GAMIVO SA retains control over key aspects of the business. Our tasks include:
Platform maintenance and development: The most important aspect of our responsibility is the ongoing maintenance and development of the platform technology. This includes both the technical aspects and the development of functionality to ensure the best experience for users and to remain competitive in the market.
Handling customer inquiries: We will continue to manage customer inquiries, providing support and assistance. This allows us to maintain a high standard of customer service and ensure customer satisfaction.
Marketing: We will continue to conduct marketing activities to promote the GAMIVO brand on a global scale. This includes advertising campaigns, communication strategies, social media presence management, and other initiatives to increase brand awareness and attract customers.
This division is in line with our strategy of seeking to optimize our business by delegating the operational aspects of managing individual markets to our licensees while retaining control of key elements of our business. This allows us to focus on long-term growth, innovation, and expansion of our product offerings.
Is the company considering improving its overall communication with the market, for example, through regular newsletters outlining both positive and negative aspects of the company’s operations?
We agree that transparency and regular communication are key to building trust and good relations with our shareholders and investors.
We can assure you that we make communication with the market a priority and are constantly looking for ways to improve it. Our goal is to provide a full and balanced perspective on the company’s operations so that shareholders and investors have access to comprehensive and timely information.
While we cannot provide specific details of these plans at this time, I want to assure you that work is already underway. Any future communication initiatives will be carefully refined to meet the high standards and expectations of our shareholders and to avoid possible ambiguities and misinterpretations. On the other hand, we would like to draw attention to our periodic reports, in which we always try to comprehensively present the actions taken by the company, which shows that communication with the market and transparency are very important to us.
Could you provide information on the current market situation, especially for the fourth quarter? What are the company’s forecasts and expectations for the coming months?
We do not publish forecasts for the coming periods. However, we can assure you that the actions taken under the new strategy will not affect the company’s operations. The fourth quarter is usually marked by a pre-Christmas recovery in the market and increased interest in titles awarded at important events, such as the recent The Game Awards. Of course, these positive trends would have the best effect if the macroeconomic situation improved, thereby raising customers’ purchasing optimism.
