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- Modern Times Group reported a net income of kr14.4B SEK ($1.5B USD) for the full financial year 2019, up from kr1.2B ($125M) in 2018, while it realized a net loss of kr207M ($21.6M) during Q4.
- For the Q4 period, Modern Times Group recorded net sales growth of 15% to kr1.16B ($121M), up from kr1.01B ($105M) in the same quarter last year.
- MTG’s VC Fund invested kr14.3M ($1.5M) during the quarter. Investees were esports studio White Water Games and VR platform and location network Nomadic.
Today, ESL and DreamHack parent, Swedish esports and gaming company Modern Times Group (MTG), announced its financial results for the fourth quarter of 2019 and its full-year financial results. The company recorded net sales growth of 15% to kr1.16B ($121M), up from kr1.01B ($105M) in the same quarter last year.
The company’s net esports sales grew by 15% to kr516M ($53.8M) in Q4 2019, with one additional Master property (one of the company’s esports tournament formats) compared to the corresponding period last year. This was complemented by a 17% increase in net gaming sales to kr650M ($67.8M). Overall, MTG reported a total net loss of kr207M ($21.6M) or a loss per share of kr5.33 ($0.56) for Q4 2019.
For its full financial year 2019, MTG announced a net income of kr14.4B ($1.5B), up from kr1.2B ($125M) in 2018. The significant increase in net income is mostly attributed to a capital gain of kr13.4B ($1.4B) on the distribution of NENT Group shares as MTG split from the NENT Group in March.
“The fourth quarter for our esport vertical showed a high level of activity, including the execution of four Master properties. Fans showed strong engagement in all of the properties, with improved operational metrics as a result. In total, the revenue grew by 15%, driven by our own and operated, which grew a solid 21%,” summarized Jørgen Madsen Lindemann, president & CEO of Modern Times Group, the company’s esports efforts. “Looking into 2020, we can be nothing but pleased with our world-leading esport assets. On the back of the new tournament circuit, the ESL Pro Tour and the strategic collaboration with Nielsen, we are starting to measure the commercial potential of esport. It is still early days, but with a reliable structure underpinned by solid data comes increased validation of our commercial products and their relevance for fans and partners.”
During the period, MTG made several relevant business decisions for its esports segment. In October, MTG announced the initiation of a strategic review of its gaming vertical, including the VC Fund’s gaming investments. The process is ongoing, according to the company
Also in October, DreamHack partnered with the Dutch football league Eredivisie to organize the €100K EUR ($110K) prize pool Dutch EA SPORTS FIFA 20 League.
In December, MTG made changes to its portfolio company Dreamhack’s management team structure and formed a new entity, DreamHack Sports Games. Peter Nørrelund was appointed CEO of the new entity, while Roger Lodewick was named as new co-CEO to manage DreamHack alongside co-CEO Marcus Lindmark.
Additionally, MTG’s VC Fund closed two investments of approximately kr14.3M ($1.5M) during the quarter. Cross-platform mid-core esports studio White Water Games, which was spun out by two founders of Super Evil Megacorp (SEMC), received kr9.5M ($1M). Location-based VR platform and location network Nomadic received kr4.8M ($0.5M).
Negotiations between Chinese streaming platform Huya and MTG to form a strategic joint venture for esports expansion into China and a minority stake investment in MTG’s portfolio company ESL that started at the end of Q3 were officially terminated in January.
Lindemann commented on the termination of the deal: “While our plan to create a joint venture together with Huya did not materialize as we would have liked to see, we still believe in the logic of this transaction and its potential. An expansion into the important Chinese esport market continues to be a priority for MTG. Therefore, we are looking forward to seizing existing and new opportunities in the near future.”
Note: The Esports Observer used the exchange rate in effect as of Feb. 6 at a rate of 9.59306 SEK to 1 USD for currency conversions in this article.
