Paradox Interactive A GRAND STRATEGY FOR SUCCESS AND GROWTH - PowerPoint PPT Presentation

Paradox Interactive A GRAND STRATEGY FOR SUCCESS AND GROWTH

Publisher and Developer of games, primarily on PC 100 + games and 6 active brands 250 + employees expansions in strong Recognized games IP portfolio with loyal fans 6 million + Employees 47% speak 20 + registered gamers revenue CAGR globally different languages last five years 2 million 4 owned studios 28% * fans play a Paradox in Stockholm, Umeå, operating margin last game each month Malmö and in Delft five year in average

Continued increase in revenue from established games and a long history of profitable growth PARADOX’S REVENUE DIVIDED INTO ESTABLISHED VS NEW GAMES, AND NET PROFIT

Strategy for continued growth Benefit from digitalization Penetrate categories Platform expansion Geographic expansion Other Strategy MOBILE - 1% LATIN AMERICA - 2% Simulation Paradox Interactive PHYSICAL - 5% Role Play Well positioned to benefit from Use strong IP and gamer Lead our fans to Use strategic partners to Leverage M&A and Licensing to strong digitalization trend community to penetrate game other platforms expand outside NA and Europe further enhance growth categories Gaming market LATIN AMERICA - 4% M&A LICENSING Source: Newzoo and Paradox Interactive

Games a 116 BUSD entertainment market globally WORLD DIRECT CONSUMER SPEND ON GAMES SPLIT BY PLATFORM 2017 GAMES SPLIT BY GEOGRAPHY 2017 ENTERTAINMENT 2016 LATIN AMERICA - 4% Games Industry growing faster than expected, up to 10.7% to $116 billion 2017 Source: Newzoo, IFPI, Statista

Publishers play a central role in bringing games to market for a large and engaged community PLAYERS DEVELOPERS PUBLISHERS DISTRIBUTORS Vast amount of developers with Strong publishers with proper Distributors rely on publishers to 1.9 B + gamers world wide. games want access to gamers but knowledge, marketing skills and provide the most attractive games Steam community 100 M + gamers need help to differentiate large communities: 1) Screen, 2) to launch in the marketplace Paradox forums 800 000 + themselves from the competition finance, 3) market and 4) continue through their infrastructure. and bring their games to market developing games.

Paradox’ Three Corner Stones PEOPLE • • PLAYERS PRODUCTS •

Publisher and Developer of games, primarily on PC STRATEGY GAMES ROLE PLAYING GAMES MANAGEMENT / SIMULATION

New game launches and expansions 2015 FOCUS: SEVERAL NEW GAMES LAUNCHED

New game launches and expansions 2016 FOCUS: INTERNAL RELEASES AND EXPANSIONS Snowfall Conclave Here be Dragons Art Deco The White March Tyranny Natural Disasters EXPANSION EXPANSION EXPANSION EXPANSION EXPANSION NEW GAME EXPANSION The Reaper’s Due Rights of Man Stellaris Hearts of Iron IV Mare Nostrum Leviathans Together for Victory EXPANSION EXPANSION EXPANSION NEW GAME NEW GAME EXPANSION EXPANSION

Monks and Mystics Steel Division Mandate of Heaven Utopia Mass Transit Death or Dishonor EXPANSION NEW GAME EXPANSION EXPANSION EXPANSION EXPANSION Game launches and expansions 2017 FOCUS: EXPANSIONS AND NEW PLATFORMS Cities: Skylines - Xbox Cities: Skylines - PS4 Second Wave Tales from the Tiers Third Rome Prison Architect CONSOLE CONSOLE MOBILE EXPANSION EXPANSION EXPANSION Bastard’s Wound Pillars of Eternity Synthetic Dawn Cradle of Civilization Humanoid Jade Dragon EXPANSION EXPANSION CONSOLE EXPANSION EXPANSION EXPANSION

Publisher and Developer of games, primarily on PC IP PORTFOLIO = SHARE OF RELEASES DEVELOPMENT TEAM = PEOPLE* DISTRIBUTION CHANNEL Source: *Management estimate, based on 2015

Paradox Game Pillars Replayable One does not simply “finish” a Paradox Game. System -driven games with WHAT WE ARE LOOKING FOR IN A GREAT GAME challenging sandbox environments make for unique game sessions each time you play. Intellectually Challenging Paradox games are played with your mind, not your reflexes. Incredible depth and a balanced learning curve come together to reward players’ curiosity. Creativity We want our players to create and share their own stories from our games - not just the stories we imagined. The game should encourage creativity, experimentation and the creation of memorable stories. Form Follows Function At Paradox we use visuals to complement gameplay, not gameplay to show off visuals. Paradox is function and form in sensible symbiosis. Accessible The games take time to master - but each game is still enjoyable. Players don’t stop playing our games because they’re too intimidating or punishing. Nerd Out Regardless of what the game is about, there’s always more to discover behind the scenes. The player can always dig deeper into the subject matter of the game even when they’re not playing.

Games with highly engaged players USER GENERATED CONTENT PARADOX GAMES ARE VERY “STICKY” 15h 23min 14h 6min 8h 44min Europa Universalis IV Crusader Kings II Steam Average Steam workshop: 130.000 + user made items for Cities Skylines PLAYER INTERACTION STREAMS Paradox forum: 1.3 M + posts in 2017

Paradox Online Services PLATFORM AGNOSTIC Player profile Multiplayer Content management Publishing tools Social Analytics Dev resources Game support

Key figures for the Group STRONG MARGINS AND HIGH PROFITABILITY Q3 2017 Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Revenues 180.7 MSEK 127.2 MSEK 591.4 MSEK 455.4 MSEK Operating profit 52.9 MSEK 54.6 MSEK 253.1 MSEK 222.1 MSEK Operating margin 29% 43% 43% 49% Cash flow from operations 70.3 MSEK 102.7 MSEK 295.7 MSEK 197.1 MSEK Cash flow from investments -79.2 MSEK -30.8 MSEK -192.7 MSEK -71.2 MSEK Cash & cash equivalents end of period 244.3 MSEK 215.1 MSEK 244.3 MSEK 215.1 MSEK

Listed the “Paradox Way”

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