Profitability at Embracer’s mobile games arm has dropped dramatically year-on-year.
The Swedish owner of Deca, CrazyLabs and more saw a 2% YoY sales rise in its mobile division during Q3, which it credited to the performance of CrazyLabs’ Bus Frenzy, Alien Invasion and Glow Fashion Idol.
But adjusted EBITDA fell 35% YoY, with Embracer blaming the drop in profitability on higher UA costs plus a “very tough” comparison to last year’s record profits.
Embracer’s mobile division in Q3, all % changes YoY:
- Net sales: $154m ($1669m SEK), up 2%
- Adjusted EBIT: $36.9m ($400m SEK), down 35%
- User acquisition cost: $77.5m ($840m SEK), up 40%
- User acquisition cost as a % of net sales: 50%, up from 39%
- Q3 installs: 254m
- DAU: 25m
- MAU: 210m
- Share of group sales: 23%, up 1%
- Headcount: 1,092 (up from 1,058)
- Internal studios: 10
Deca Games, which includes CrazyLabs, returned to “high single-digit organic growth”, Embracer said, after taking over the publishing rights for Bus Frenzy. It also noted the success of fellow hybridcasual game Alien Invasion. Embracer also noted CrazyLabs’ launch of Glow Fashion Idol, which performed above expectations.
Embracer’s $1.2bn sale of Easybrain to Miniclip closed after the quarter, and the firm noted that the divested mobile asset “showed slight decline”.
Moving forwards Embracer expects “higher user acquisition-to-sales” and “positive ROI”, driven by investment in Bus Frenzy and other titles.
