NEXT GAMES CORPORATION COMPANY RELEASE 20 JULY, 2018 AT 08:00 EEST

This release is a summary of the half-year 2018 report. The complete report is attached to this release and available at www.nextgames.com/ng/reports

Next Games Corporation, Half-Year Review 2018: Focus on preparing The Walking Dead: Our World for global launch

January-June 2018 in Short:

• Revenue was 10.5 million euros, a decrease of 46% compared to H1 2017 (€19.5M)
• Gross margin declined by 10 percentage points and was 26% (36%)
• EBIT was -8.0 million euros (€0.0M)
• Development costs amounted to 3.9 million euros (€1.0M). The company does not capitalize game development costs
• The organization grew to 132 employees (12/2017 119 employees)
• The company globally released The Walking Dead: Our World, based on The Walking Dead license, after the reporting period. The game based on Blade Runner franchise has moved from production to soft launch phase during the reporting period. The game project with NBCUniversal moved from pre-production to production phase.
  (January-June 2017 comparison in brackets)

KEY FINANCIAL FIGURES:

Gross Bookings does not include deferrals related to sales.
Adjusted EBITDA is defined as operating profit, adjusted for depreciations, deferrals related to sales, licenses and commissions, as well as adjusted for listing expenses.
*Company hasadjustedH1 2017 Key Financial Figuresto Next GamesGroup figuresto ensurecomparabilitywithH1 2018 figures.

KEY OPERATIONAL METRICS:

CHIEF EXECUTIVE OFFICER TEEMU HUUHTANEN:

The first half of 2018, Next Games has focused on preparing for new game launches. During this time we did not release new products and the development of our live game, The Walking Dead: No Man's Land continued on a similar path set in early 2018 without significant changes. The company's revenue was 10.5 million euros, whereas it was 19.5 million euros during the corresponding period in 2017. The company's ARPDAU figure was 0.19 euros. The difference to the corresponding period in 2017 was -0.01 euros.

After the reporting period on 12 July, we launched the location-based augmented reality game, The Walking Dead: Our World globally to 153 markets. We are very pleased with the success of the launch and the reception it has received both amongst the media and player audience.

On its opening week, the game achieved a top 10 position on App Store's game category in over 40 markets and on Google Play in over 10 markets, which indicates the game has generated wide interest. The game's revenue development has started promisingly and the first week's global ARPDAU metric was at 0.35 euros on average. Like all Next Games' games this game is being developed as a long term service. A week after global release we are in the very beginning of this journey, but the player community seems very committed when looking at player activity metrics. On average a player plays 7 sessions per day and spends 37 minutes in the game. The players have collectively completed 100 million missions and walked 9 million kilometers (5.5 million miles), which is 220 times around the Earth. The most active cities are New York, Paris and Tokyo.

The Blade Runner game has moved from production phase to soft launch, starting from closed beta tests and moving on to opening the game on one market, during the second quarter. The game's production proceeds according to plans. The game in development in collaboration with NBCUniversal  has moved from pre-production to production phase.

2018 will be a significant year for Next Games in many ways. During 2017 and early 2018 we have worked hard in preparation to scale our operation to launch new games on many fronts from game development, technology, marketing to analytics, as well as from an operational perspective. I firmly believe team Next Games has succeeded in creating a robust foundation for our future. During 2018 we will see the first results, starting from The Walking Dead: Our World.

STRATEGY AND BUSINESS OUTLOOK:

During January - June 2018 reporting period the company focused on developing new games based on entertainment franchises, such as movies and TV series, preparing for new game launches, and further development of their main product The Walking Dead: No Man's Land. In addition, the company released The Walking Dead: Our World game after the reporting period.

Until now, Next Games had actively operated one live game. The company is now preparing to launch and operate multiple games simultaneously. Next Games has prepared its operations by modifying its organization, in order to achieve efficient scaling to a company with multiple simultaneous live products. The company has appointed new members to its Management team, responsible for game products (Chief Product Officer) and business and operations (Chief Operating Officer). Additionally, the company has significantly invested in technology development and recruited personnel to operate new products. The company's strategy is to maintain control over the whole value chain including game development and live operations as well as significant supporting functions such as marketing, technology and analytics.

Next Games continues to undergo active license partnership negotiations with significant entertainment license holders to strengthen its product portfolio. The company aims at launching at least one new game starting from 2018 according to its previously stated strategy.

UPCOMING EVENTS:

2 November, 2018 - Business Review January-September 2018

Additional information:
Saara Bergström
CMO
press@nextgames.com
+358 (0)50 483 3896

Certified Adviser: Danske Bank A/S, Finland branch, tel. +358 10 546 7938

About Next Games 
Next Games (Helsinki Nasdaq First North: NXTGMS) is the first publicly listed mobile game developer and publisher in Finland, specializing in games based on entertainment franchises, such as movies, TV series or books. The developers of the critically acclaimed The Walking Dead: No Man's Land redefines the way franchise entertainment transforms into highly engaging service-based mobile games. Next Games launched The Walking Dead: Our World on 12 July, which utilizes cutting edge AR technology and is powered by Google Maps. Currently Next Games is working on three new games based on popular entertainment franchises including a mobile game for the popular Blade Runner franchise.  Next Games employs over 120 people and is based in Helsinki, Finland. For more information head to www.nextgames.com