Pinned straw:
Playside released their financials this morning. Some impressive numbers showing the growing opportunity. How did the market respond? Dropped down to 55-55.5c in the first 30min before rebounding.
I'm a complete tourist on this one. What stood out to me was 2H revenue was much lower than 1H. $28.4m vs $36.2m.
So I asked a revenue recognition question about their original IP - specifically Dumb Ways on Netflix and Dumb Ways VR on Meta.
The answer was on Netflix, the games are free so Playside gets an upfront license payment and payments as they deliver on milestones - no revenue on consumption. So no more revenue as of now. On Meta, it's the same but there is back-end payments. I assume these payments would likely be very low since the paying Meta VR TAM would be small.
I understand that these titles are Playside's IP, but it's very different to the other original IP titles that they have full control over. It feels very much like "work for hire", to help Netflix and Meta build out their platforms.
It's still a very lumpy business at present, which requires continuously churning out of work.
Agree it's very lumpy @mushroompanda. It's really one of those businesses where there's little to be gleaned from looking in the rear view mirror.
I think they probably need to better delineate that original IP revenue because a lot of it is just their IP that they license to someone else – which obviously has a different revenue profile/implications, and, at least to me, is optically far less granular than how they portray their OIP work.
There was this slide a few months ago in the Shaw conference that explains the various ways they earn. The results themselves were OK, but I can see why the shares sold off.
https://announcements.asx.com.au/asxpdf/20240429/pdf/062yg3kw2txns1.pdf
