Q3 2024 Interim report Beyond Frames Entertainment AB (publ)

CEO Comments
Positioned for Record-Breaking Growth and a Robust Recurring Revenue Stream.

Year-to-date, we’ve achieved an impressive 37% increase in revenue over last year, surpassing the fullyear revenue for 2023 - putting us firmly on track for a record-breaking year. Q3 revenue saw a 12% dip due to a slowdown in consumer purchases as they waited for the October launch of Meta’s new headset, the Meta Quest 3S.

Our core titles still performed solidly, driven by continued growth in our games as-a-service model for Ghosts of Tabor, steady milestone payments on key development projects, and strong preorder sales for our new studio title, Escaping Wonderland. Additionally, the opening of the Meta Quest Store has led to changes in the organic discoverability of the platform, which have had an impact on most titles across the store. We have been working with the platform and expect alterations and improvements over the next months.

Efficiency Gains and Strategic Cost Management
While Q3 revenue came in as expected for this seasonally soft period, we are still invested heavily in the development of four highly anticipated titles scheduled for release between Q4 2024 and 2026. This led to a high cash burn balanced with scheduled milestone payments from our external partners for our studio productions in Q4 2024 and throughout 2025 and 2026. In Q3, however, we delivered on our commitment to streamline operations, achieving a targeted reduction in OPEX compared to Q2. This cost savings was strategically planned by scaling back on external resources for studio development and marketing resources post-launch of Escaping Wonderland. Additionally, we look forward to the holiday sales in Q4, which is typically our strongest quarter for revenue during the year, which will further support our cash flow. We remain committed to disciplined cost and revenue management while advancing our current slate, ensuring we position ourselves for longterm growth and profitability.

Product and Market Momentum in VR
The Meta Quest 3S launch in October, a high-quality, more affordable VR device, opens a promising gateway to expanded VR adoption. We are already seeing a favorable impact on the market since the headset's launch, positioning our titles for greater reach through a rapidly growing user base.

Innovative Pipeline and Compelling Content Portfolio 

• Escaping Wonderland, the anticipated sequel to Down the Rabbit Hole, launched with outstanding reviews (4.8/5) and quickly climbed the top sales charts. We’re confident in this title’s long-term revenue potential. Escaping Wonderland achieved an NYX Games award in the “Best Narrative” VR category after the end of the quarter.
• Our studios are progressing on two additional projects, both backed by funding from strategic partners. After the quarter, we revealed that the first of the two titles is being developed in partnership with top-tier publisher Devolver. We’ll be unveiling details of the second game, which is based on a major Hollywood IP in the near future.
• On the publishing front, Ghosts of Tabor continues to be a steady revenue generator with a dedicated community driving organic growth. In Q3, we announced the title’s milestone of surpassing $20 MUSD since its launch in 2023. Upcoming premium content for Ghosts of Tabor 3 Third quarter Q3, 2024Looking Ahead and new releases, like GRIM in Q4 2024 and Silent North in H1 2025, further enhance our diverse, highengagement portfolio. Ghosts of Tabor was scheduled to release on PlayStation VR2 during Q4, but technical issues have delayed the launch until Q1 2025.

Strategic Market Insights and Growth-Driven Partnerships
Meta’s 29% revenue growth in XR, fueled by hardware expansion, validates the growing potential of the VR market. With Meta set to invest heavily in XR, we are well-positioned to benefit from these advances, as demonstrated by the success of Meta's recent Batman IP VR title. This success further reinforces our confidence in our Hollywood IP title in development, which we believe can capture significant consumer interest.

Looking Ahead
As Beyond Frames expands, we’re exploring a multitude of high-potential opportunities in the XR landscape. However, resource constraints currently limit our ability to capitalize on all partnerships. We’re evaluating various avenues to address this, ensuring our investors benefit from the immense, growing potential of the VR market.

We extend our gratitude to our players, staff, partners, and stakeholders for their ongoing support as we advance toward our goal of being one of the greatest providers of immersive entertainment in the world.

Ace St. Germain,  CEO Beyond Frames Entertainment AB (publ)

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This information is such information as Beyond Frames Entertainment is obliged to publish in accordance with the EU Market Abuse Regulation (MAR). The report was submitted, through the care of the below contact person, for publication on November 21, 2024, at 08:00 CET.

The financial information in this report has not been reviewed by the company's auditor.