SCPL - SciPlay Corporation (SCPL) CEO Joshua Wilson on Q2 2022 Results - Earnings Call Transcript
SciPlay Corporation (SCPL)
Q2 2022 Earnings Conference Call
August 10, 2022 8:30 am ET
Company Participants
Joshua Wilson - Chief Executive Officer
Daniel O’Quinn - Chief Financial Officer (interim)
Jim Bombassei - Senior Vice President, Investor Relations
Rob Weiner - Vice President, Investor Relations
Conference Call Participants
Ryan Sigdahl - Craig Hallum
Aaron Lee - Macquarie
Franco Granda - DA Davidson
John - JP Morgan
Benjamin Soff - Deutsche Bank
Matthew Thornton - Truist Securities
Eric Sheridan - Goldman Sachs
Presentation
Operator
Good day and welcome to the SciPlay second quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded.
I would now like to turn the conference over to Jim Bombassei. Please go ahead.
Jim Bombassei
Thank you Operator and good morning everyone. During today’s call, we will discuss our second quarter 2022 financial results and operating performance as well as provide commentary on our second half outlook, which will be followed by a question and answer period.
With me today is Josh Wilson, CEO of SciPlay, and interim CFO, Daniel O’Quinn. We are also pleased to welcome to the call Rob Weiner, who recently joined the SciPlay team as VP Investor Relations.
Rob Weiner
Hello and good morning everyone. This is Rob Weiner. I have been a practicing IRO for more than 15 years, as well as having IR agency, sell and buy side experience. I’m excited to be part of the talented SciPlay team and look forward to working with investors and analysts that I know and those whom I’ll meet in the future.
Now I’ll turn it back to Jim.
Jim Bombassei
Rob will be the IR point person going forward while I return to my duties with Light & Wonder. I encourage you to engage with Rob as he conducts the SciPlay IR program.
Our call today will contain statements that include forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call. For more information regarding these risks and uncertainties, please refer to our earnings release issued yesterday and our filings with the SEC.
We will also discuss certain non-GAAP financial measures. A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings release as well as in the Investors section on our website.
As a reminder, this conference call is being recorded. A replay of this webcast will be archived in the Investors section of our website at sciplay.com.
Now let me turn the call over to Josh.
Joshua Wilson
Thanks Jim. Good morning everyone and thanks for joining today.
SciPlay had a solid second quarter of performance and we see momentum building in our business as we start Q3. In fact, July was the second highest revenue month in our history for social casino. July was second only to our peak revenue month achieved during the height of the COVID pandemic. I am pleased to report that we outperformed the social casino market during the second quarter with a slight revenue decline year over year. We also outperformed the market quarter over quarter.
Our business foundation is strong. This has been tested by the market this past quarter and we have proven our model’s resilience during that declining market. The strength of our team and our game portfolio this quarter illustrates our ability to manage adversity.
Our focus is in taking share in the social casino marketplace, and we are proving our ability to deliver that objective despite the headwinds we’ve been seeing from IDFA and scaling iOS user acquisitions. We are pleased with the continuing momentum in our business as we invest in our core capabilities. Our investments will build upon our business foundation while we are continuing to develop our platform to drive sustainable long term growth. This is an important distinction for SciPlay. Our ability to both capitalize on demand, as we did during the pandemic, and sustain it, but also to do this while we’ve been investing in our new capabilities, strengths and competencies that will make us more competitive and more dynamic.
Looking ahead, we feel good about how our largest games are performing in the third quarter and the benefits we are seeing from our strategic investments. Accordingly, we see momentum building in the back half of the year and reiterate our target for full year revenue growth of 10%.
We continue to be disciplined in our investment spend and will see AEBITDA margins scale substantially in the fourth quarter as we move past our marketing innovation campaign. While we continue to focus on maximizing ROI for every dollar that is spent, given the uncertainty in scaling user acquisition on iOS, we are targeting a full year AEBITDA margin of 28% to 29%.
Now for some highlights from the quarter.
We delivered the company’s second highest revenue quarter with 4% growth year-over-year and 1% sequentially in the dynamic environment. Our social casino business continues to deliver strong payer metrics. Quick Hit Slots set another consecutive quarterly revenue record and Jackpot Party delivered one of its best quarters in history. ARPDAU was $0.74, increasing 3% compared to second quarter last year, and we maintained DAU at $2.3 million. We set a record for increased payer conversion of 9.4% in the second quarter, up from a quarterly record of 8.9% which was set in the first quarter of 2022.
Average revenue per daily active user grew in five out of seven of our core games this second quarter. These results validate our continued focus on payers and the SciPlay engine to drive increased monetization. We are very encouraged by this progress as our focus is to increase ARPDAU and we believe we have the potential to double ARPDAU over time.
We made great progress on our investment initiatives, including centralizing Project Allstar into the SciPlay engine, as well as building out our direct-to-consumer platform which I will talk about in more detail shortly. We saw significant opportunity to enhance brand equity and grow market share as we launched marketing campaigns in a few new channels. These campaigns go beyond our traditional marketing program and reach new players that have been historically untapped by SciPlay.
The integration of Alictus is progressing as we continue to align their organization to the SciPlay model. We continue to see tremendous opportunity to optimize this acquisition and apply some of our learnings and our capabilities from the SciPlay engine.
Now I would like to dive a little deeper into the business this quarter.
Our social casino business remains healthy. Our portfolio of games continues to perform as we outpace the social casino market in the quarter. Quick Hit had its second consecutive quarter of record revenue and we continue to make live ops improvements, and we see continued growth in July which was a record month. A new feature released in the third quarter, Race of Glory, is expected to drive engagement and propel growth. Jackpot Party delivered its consistent high performance again with, as mentioned, one of its best quarters in history.
We are seeing this continued strength. July was the third biggest month ever, and as I mentioned earlier, we continue to deliver strong monetization metrics. ARPDAU continues to grow and remains at historic high levels as we did a great job enhancing monetization while retaining our payers.
Average monthly revenue per paying user in the second quarter remained at a very high healthy level of $90. This is the ninth consecutive quarter above the $90 level. This illustrates our continuing strength and momentum in our business long past the revenue gains experienced during the COVID-related shutdowns.
Now I’ll turn to casual. The integration of Alictus is progressing well and their strong team is motivated to carve their prominence within SciPlay. In the quarter, we saw strong engagement and ROIs on Alictus’ existing games. In the second quarter when it came to launching the new games, we saw some challenges in scaling the games due to iOS user acquisition environment. We have seen other companies report similar challenges. Alictus has historically been an iOS-first company and we are using our learnings in social casino to shift their games to emphasize an Android-first structure, where we continue to see strong returns.
The games that we launched in this quarter had similar retention and play times as previous games have experienced in the past. This is a very encouraging signal for us. We are going to apply our learnings from the SciPlay engine to help optimize the LCVs of the players in our new game launches. We anticipate the fourth quarter game launches will reflect this new approach.
Our new casual game portfolio continues to make progress. For Solitaire Pet Adventures, we are excited to soft launch and test our newest version. We have some early positive data but it’s still too early in the ramp process to discuss this quarter. We’ll update you in the third quarter call. Spell Spinner remains on track for soft launch in the fourth quarter.
Now let me turn to updates on our key investments. We are continuing to invest in our SciPlay engine with a goal to increase reach, retention, and ultimately deepen our player engagement monetization. As we discussed in the investor day, we continue to producticize our capabilities into the SciPlay engine to benefit all of our games across the portfolio and drive sustainable profitability. We are making great progress in our core capabilities and are on track to deliverables to optimize our platform.
We are also making great progress on our direct-to-consumer platform which is expected to further enhance margins over time by reducing the 30% platform fee to approximately 10%. We are on track for the fourth quarter launch and expect to scale the platform in 2023.
We are diversifying our marketing channels to reach previously untapped players. We have partnered with America’s Got Talent and the Wendy Williams Show where we are seeing great progress. America’s Got Talent has over 6 million viewers and we recently signed Sofia Vergara, who has influential reach of over 26 million Instagram followers. Overall, our core portfolio of traditional marketing investments are delivering positive results from our direct response marketing and our brand campaign.
I’d like to wrap up my comments with a summary of where we stand today. Our foundation is strong with a great and talented team, deep experience and capabilities to lead into the marketplace. We believe our player-centric model will drive long term, sustainable growth. We will be able to significantly grow revenue by building great games players love to play with great core game play mechanics and meta features to enhance engagement, leveraging and economy to provide even better player experience and utilizing the SciPlay engine capabilities to optimize the player behavior in any given day.
Now let me turn it over to Daniel.
Daniel O’Quinn
Thank you Josh. First, let me say a big thank you to our team as we delivered year-over-year and sequential revenue growth. Revenue of $160 million was up 4% versus prior year and 1% sequentially. Our core business remains healthy and our performance benefited from the Alictus acquisition.
Net income for the quarter was $32 million and our net income margin was 20%. AEBITDA was $41 million as we continued to invest in sustainable long term growth. Our margin continued to be impacted by our marketing investments, which will continue in the third quarter, and we expect the benefit from these campaigns in the back half of the year.
ARPDAU was $0.74 versus $0.72, an increase of 3% compared to the prior year with a DAU base of $2.3 million in both periods. ARPDAU grew in five of our seven core games in the second quarter. Average monthly revenue per paying user was approximately $91 and we have been consistently above $90 for nine consecutive quarters.
Our payer conversion rate was a record at 9.4%, 90 basis points above our conversion rate of 8.5% in the second quarter of 2021. This demonstrates our focus on creating and maintaining our payers. We have a strong balance sheet and we’re in a great cash position, enabling us to invest in our business while returning capital to shareholders.
In the quarter, we generated $38 million in operating cash flows on $41 million in AEBITDA. We ended the quarter with $316 million in cash and no debt.
As we focus on increasing shareholder value, I’m pleased to share that we’ve returned $50 million to shareholders to date. This represents 25% of the total authorization in our first ever share repurchase program.
While we are certainly in a dynamic macro environment, I have all the confidence in the team to execute our initiatives and continue to drive engagement and monetization. We will continue to be proactive and drive operational excellence throughout the business with continued focus on balancing growth with investments while staying committed to achieving bottom line results.
Our approach continues to be ROI driven with a combination of short, medium and long term investments designed to optimize our returns. At the same time, we are strengthening our foundation as we further develop our platform for long term sustainable growth.
To wrap it up, I’m very excited with the opportunity in front of us as we continue to invest in our largest growth opportunities, building upon our foundation and optimizing our platform for sustainable, profitable growth.
Now we’ll turn it back to Josh for closing comments.
Question-and-Answer Session
Operator
[Operator instructions]
Our first question will come from Ryan Sigdahl with Craig Hallum Capital Group. Please go ahead.
Ryan Sigdahl
Morning guys. Thanks for taking our questions.
I wanted to start--
Joshua Wilson
How are you doing this morning?
Ryan Sigdahl
You mentioned, Josh, a little bit intra-quarter some softness, July sounds like it’s rebounded, but can you dig in a little bit more, I guess what you saw in May, June? Industry peers mentioned a material softening in the industry, but did you guys see that, and then can you comment more specifically on what you’ve seen in July that gives you more confidence going forward to reiterate the guidance for the year?
Joshua Wilson
Yes Ryan, so do remember that the mobile video game industry does tend to see softness in the second quarter of each year. Normally the first quarter is kind of the new install quarter, second quarter comes down as summer comes to hit, Q3 bounces up a little bit from Q2, and then Q4 tends to be our largest. The main reason for this is you start seeing players play a half-day less a week or a full day less per week. It’s not that they leave the game but they’re just playing a little less often, and that little less often causes a little softness in revenue.
We also did see the macro trend with iOS continuing. We feel very good about the spend that we did in our core games, especially performance and Quick Hit, Jackpot Party; but in the Alictus products, our Alictus new launches, it became much tougher to scale these games, which is the strategy switch that we talked about during the prepared remarks, where the Android market did continue to perform well and we did continue to see great ROIs.
Going into Q3, we had made some good investments in our three larger games around our SciPlay engine that we’ve really started seeing the fruits of, starting early in Q3, especially Jackpot Party, Quick Hit where we saw big jumps in the engagement numbers, where the days per week not only came back but they actually rose a little bit. We also saw an increase in engagement through spinning and time on app, which increased the ARPDAU, and the days per week increased the daily active users. This has actually continued to climb throughout July and stayed very consistent even up in August, which is what gives us the confidence that the Q3 will perform in the way that gets us to guidance that we shot for at the beginning of the year.
Ryan Sigdahl
Then just on the marketing campaigns, you mentioned it will be elevated in Q3 and then normalize some in Q4, but can you talk through how much of that is just timing within the year, maybe seasonality versus new game launches?
Joshua Wilson
Sure, so we had a little bit of it actually come into Q2 of this year, and even that would be about 170-ish basis points to the margin of Q2. In Q3, we actually have the bulk of it running because it’s when the mass of America’s Got Talent is, it’s when the real showing of the Wendy Williams happens, and also the cup races that we’re sponsoring inside of NASCAR, so a majority of the spend does happen in Q3 of this year and is going to be worth around 400 to 500 basis points to the AEBITDA margin. But we do expect to see the players that come in be a brand-new audience that we have not been able to tap in the past, and so far these users look to be very, very valuable and we do believe that the campaigns will be ROI positive long term.
We will have very little marketing innovation going in Q4 of this year, so we won’t expect to have primarily any of our AEBITDA margin suppressed at all because of the marketing campaign.
Ryan Sigdahl
Two quick follow-ups on that, Josh. The 400 to 500 BPs of AEBITDA margin, is that on a year-over-year basis; and then secondly, should we expect the timing of these events, all those that you mentioned, to recur every year? Is that a Q3 event or is this kind of one-time type promotions? Thanks.
Joshua Wilson
First, it’s actually quarter over quarter, so it’d be Q2 to Q1, and then Q3 to Q2. I think in the future, what our goal is to spread it out a little bit more throughout the year. This year, both into Q3 because we had such great opportunities with America’s Got Talent and Sofia Vergara, and then also the Wendy Williams Show, so it was more of the timing wasn’t the optimal for the entire year but they were the right programs and they are bringing in the right customers.
Ryan Sigdahl
Thank you. Good luck guys.
Operator
Our next question will come from Aaron Lee with Macquarie. Please go ahead.
Aaron Lee
Hi, thanks for taking my question. Wanted to touch on the guidance. It was really great to see you were able to hold that. How has the composition of your guidance changed, if at all? Previously it was roughly split between social casino and Alictus. How much growth are you assuming for those two pieces now?
Joshua Wilson
The guidance still is pretty split between the two equally. We do--we are seeing great momentum in our core business, our social casino business right now, and feel like the guidance we gave there is still the right guidance, even though the overall market is seeing some softness. With our Alictus piece and our shift to the Android-first releases, we are right on pace with what our original guidance was for the revenues there, so I would actually leave it very similar to the way that we’ve split it up in the past.
Aaron Lee
Okay, great. Then on marketing, it was a bit higher than we expected, but it sounds like that was partly because of timing. But as others in the space kind of pull back on their spend, does that create an opportunity for you to go out there and take more share?
Joshua Wilson
Yes. We do believe this is an opportunity for us, but we’re going to do--you know, we’re going to look at the opportunity based on KPIs, not based on what we hear. Eventually as spend gets pulled out, you would assume CPIs will start coming down. As they start coming down and we’re able to maintain our LTVs through the engagement that we’re driving with the SciPlay engine and the investments we’re making in ad tech, which allows us to bring in better users, this could be an opportunity for us to even further spend into it as long as we’re able to get the metrics that we have always talked about, that we internally say this is the right ROI for a spend.
Aaron Lee
Got it, thank you. Congrats on the quarter.
Joshua Wilson
Thanks Aaron.
Operator
Our next question will come from Franco Granda with DA Davidson. Please go ahead.
Franco Granda
Hi, good morning team. Josh, your business is clearly outperforming in this tough environment, particularly as many industry pundits called for the perennial decline of social casino post ADT. In your mind, what is driving this outperformance particularly around those initial expectations around social casino? In my mind, this is impressive on your end given the declining MAUs. Would you say you’re focusing on this portfolio a little more intensely perhaps compared to your peers as they look to expand into casual?
Joshua Wilson
It’s obviously a little difficult for me to comment exactly what everyone else is focusing on or whether or not they’re focusing harder in one place or another. What I will say is for us, we look at the social casino as still an evergreen market that we can continue to grow in. We have a competitive advantage with the slot machines that we have and we have best-in-class talent running all of the games. We believe we’re in a position where we can continue taking market share, especially knowing that we have an ARPDAU sitting around $0.74, and we have heard industry benchmarks of some of the older games sitting around $1.50 or higher. This gives us a lot of runway to continue engaging our customers more, which we plan to do with our SciPlay engine, giving them a better experience based on how they want to play today.
Our goal is to continue taking share, and over time we would like to double our market share here and this is how we internally focus. It doesn’t take our mind off the ball with casual. We continue to invest and we continue to look for those simple core games that have the right demographic that match social casino, but it never comes at the cost of social casino, and that’s what I can say about SciPlay. It’s a little harder for me to make that statement about any of our competitors.
Franco Granda
That’s helpful, and absolutely fair enough.
I guess more of a broader commentary around your marketing efforts on an online basis, what did you see on the CPI front in the quarter?
Joshua Wilson
Yes, so I think for us as a company, we’re so metered and we’re so diligent about how we spend our money that when we see CPIs go up and LTVs are not climbing at the same rate, we pull back our spend because for us, it’s about the ROI, not just about driving top line revenue. We have a little bit of inflationary CPI growth that happens, but because we’re not over-spending into it, I believe our growth in CPI is less than what the overall market is seeing because as you would know in particular, if you spend a million dollars you get one CPI, but if you spend $3 million on that same game, your CPI rises significantly because you’re over-bidding on more people.
So for us compared to what I think the overall market is seeing, they were up slightly but they were within what our predictive range was, and the LTV was following.
Franco Granda
That’s absolutely helpful, and thanks for the reference there.
Then lastly, have you started your cross-selling efforts? I know you’re just now ramping Alictus, but how are you thinking about cross-selling for the back half of the year?
Joshua Wilson
Yes, so first thanks for the question about Alictus. We are super proud of this team and they are very, very amazingly talented. Because of the things that came up with the iOS returns with Alictus’ new games, we put the cross-selling on hold because we wanted them to focus on the newer strategy, which has become an Android-first company. We’re still targeting some cross-selling tests towards Q4, but mainly I would assume at this point they get pushed into Q1 because right now, getting to be an Android-first company is the number one priority for all the new games.
Franco Granda
Thanks for all the color.
Operator
Our next question will come from David Karnovsky with JP Morgan. Please go ahead.
John
Hi, this is John on for David, actually. Thanks for taking my questions.
Just one for me. I wanted to double click on Alictus. Just wondering if you can give us an update on the integration over a full quarter now and any learnings or color you could share. Thank you.
Joshua Wilson
It’s been a really productive quarter for the integration. We were able to get together and spend a majority of the month of June digging into the businesses, getting a full deep dive into what’s happening in the ad mon world right now on both the UA and the ad sell side, and then also start diving into the true benefits of the SciPlay engine and data infrastructure, that they may be able to take advantage over time.
We were not expecting the iOS ceiling to spend to come up and have to do this pivot that we did, but we do feel confident that the pivot in strategy that we’re doing is the right move and will put them on the momentum to be able to grow the way we originally predicted and they originally had forecasted.
Overall, we are still very excited about the opportunity. They’re hungry, they want to become the largest gaming company in Turkey. They literally have it written on their walls, and we could not be happier with how things are going so far.
John
Great, that’s very helpful. That’s it for me, thanks guys.
Operator
Our next question will come from Benjamin Soff with Deutsche Bank. Please go ahead.
Benjamin Soff
Hey guys, thanks for the question. I was hoping to better understand the trajectory for MAUs, given some of the initiatives you’re working on. Specifically, were there any factors you’d call out this quarter that drove the decline, and do you think that it will return to growth in the future?
Joshua Wilson
Thanks a lot, Ben. MAUs are kind of--you know, MAUs are mainly driven by two things, obviously. One is installs, and with the marketing softness that we saw especially in iOS in Q2, MAUs as a whole started to come down. But I kind of want to remind you that MAU isn’t how we focus and it’s not what we look at. We’re focusing on payers per month and how do we maintain those and keep those growing, because this is the true foundation of our businesses, especially in our evergreen franchises.
In Q2, we set an all-time record with 9.4%, and beginning of Q3 we’ve actually seen an increase in that as we’ve released some new features inside of Jackpot Party and Quick Hit that are really causing not only more people to reactivate and start paying again, but it’s also converting first time payers.
When I think of the health of the business and its long term stability, I tend to pay a little less attention to MAUs and I pay way more attention to monthly paying users.
Benjamin Soff
Got it, makes sense. Then I apologize if I missed this, but would you be willing to break out how much revenue this quarter came from Alictus versus the core business, and just wondering if you guys plan to provide any additional disclosure around Alictus in the future as you sort of incorporate that more fully into your business. Thanks.
Joshua Wilson
Well, we’re not breaking it out today, but we are holding very firm, if you heard the question earlier, that the breakdown in revenue gain is the same that we guided to earlier in the year, which is we would outperform the social casino market, which means our core business would grow approximately 5% and then the rest of it would come from Alictus. We feel very confident with that revenue growth, and Alictus is on pace with that today, so I don’t see any changes there.
In the future, we may break out the advertising business, but we’re evaluating that quarter by quarter based on the materiality of them to the rest of the business right now.
Benjamin Soff
Got it. Thanks guys.
Jim Bombassei
Operator, let’s take our last question.
Operator
Our last question will come from Matthew Thornton with Truist Securities. Please go ahead.
Matthew Thornton
Hey, good morning. Thanks for squeezing me in here. Maybe two, if I could.
Josh, just coming back to the bridge to the 10% growth for the year, obviously it sounds like the core has perked up quite a bit in July, into August. What else are you assuming in the back half of the year, whether it’s new titles, Solitaire or Spell Spin or anything else we might be missing or need to think about in that bridge?
Then just secondly around Alictus in particular, obviously Google Play has announced some changes to interstitial ads in particular and how they can be used and some new rules. I’m curious if that causes any headwind or changes on the Alictus side as you look forward. Thanks.
Joshua Wilson
Thanks a lot, Matthew. It’s good talking to you.
Let’s start with the 10%. Right now, the 10% is really focused on the core business continuing to grow, and we feel that that is where our growth will come from over the next five months. We’ve seen such great growth in July, being one of our highest revenue months that we have ever had, also highest revenue month for two of our large--one of our largest games and then a top three for the other one. We continue--we believe we’ll continue to see that growth through the rest of the year.
Now, do remember that seasonality from Q3 to Q4, where Q4 we do have a meaningful bump that happens primarily because Q4 has so many holidays in it with Halloween being in there, Thanksgiving being in there, Black Friday being in there, and then the last two weeks of December basically being holiday for a good share of the United States, that we normally will see a more than 5% boost from Q3 to Q4, especially in the social casino business.
With Alictus and the Google changes, basically what they’re saying is you cannot bring up an interstitial ad without the user’s consent. There’s multiple ways that you can still get around this by using different wording inside of the pop-ups, because still most things are on click. But do remember that they did not change much for the rewarded because the rewarded are already on button click because it’s something that rewards inside the individual game.
Right now, we don’t predict to see any meaningful revenue decline from this, from the ad sales for Alictus on Android. We continue to work with Google on being the right way to implement and follow the rules, but right now the Alictus team is very confident that we’re going to be able to continue monetizing the way we always have.
Jim Bombassei
Looks like, Operator, we may have time for one more question, if we have one.
Operator
Our next question will come from Eric Sheridan with Goldman Sachs. Please go ahead.
Eric Sheridan
Thanks so much for taking my question. Maybe two, if I can.
One, how are you thinking about potential alternative paths to the consumer ex-the Android and iOS ecosystems? We hear a lot more from folks in mobile gaming thinking about going more direct-to-consumer and building more platforms out over time. How are you thinking about different avenues to the consumer, as question number one?
Then in terms of your existing distribution channels, are there any marketing channels maybe you’re experimenting with or thinking about as alternative channels to some of the more traditional means to reaching the consumer on acquisition and monetization, that we should be keeping an eye on in terms of shifts in your overall marketing spend? Thanks so much.
Joshua Wilson
Thanks Eric for the question. Yes for sure, we’ve been investing in our direct-to-consumer platform now for seven, eight months. We’ve made some really, really good progress. We believe that it’s going to be the future of mobile video gaming, where you’re going to be able to control the platform, so therefore you can get to control the full communication with the consumer and you’re able to substantially lower the 30% platform fee down to approximately 10%.
We’ve made great strides here. We expect to launch the platform in Q4 of this year. We’ll start testing, bringing over some users to get--you know, to make sure that everything’s working the way that we’ve planned and that they’re interfacing, and that we have the tools needed to deliver the perfect experience for them. We plan on scaling the platform in 2023 and obviously going forward from there, but that is our hope, is the long term is that we’ll be able to keep them on our platform, being our customers, that we don’t have to share with a third party platform.
As far as marketing channels, we spoke about some of the really traditional marketing programs that we’re doing right now with America’s Got Talent and the Wendy Williams Show, NASCAR, individual deals with Sofia Vergara, who’s got 26 million Instagram followers. We’re also heavily, heavily involved with influencers from different channels from YouTube, from Instagram, that are really showing great results. We’re also starting to look at streaming TV that’s got--you know, they’re now starting to put commercials in and the commercials are starting to get very high viewership, so I think what I could say about our growth team is they’re hungry to go find the right customers and bring them into our world, so our games can entertain them and they can be long term customers of SciPlay. Our growth team is going to go out there and they’re going to find every pocket, whether or not the person is sitting in Oregon or whether that person’s sitting in Australia, and they’re going to find the channels that they’re playing today and they’re going to bring them into our SciPlay games.
Operator
This concludes our question and answer session. I would like to turn the conference back over to Josh Wilson for any closing remarks.
Joshua Wilson
I’d like to thank our SciPlayers across the world. We remain confident in our product road map and business strategy to deliver exceptional results.
With that, I will turn it over to the Operator. Have a great day.
Operator
The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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SciPlay Corporation (SCPL) CEO, Joshua Wilson on Q2 2022 Results - Earnings Call Transcript