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Leading Counterculture Mobile Game Co. Levels-Up to TSX: V

Stockhouse Editorial
0 Comments| April 21, 2020

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The latest pub co. on the TSX: Venture Exchange, LEAF Mobile, launches Cheech & Chong Bud Farm mobile game on cannabis culture’s most revered day – 4/20.

With both in home and personal entertainment now more important than ever, self-isolation is driving an increase in play time Click to enlargeand money spent on mobile game apps. They are seeing downloads and use at unprecedented levels.

Last year, it was estimated that 2.4 billion people around the world played a mobile game, according to a report from Blizzard Media and research firm Newzoo titled Betting on Billions: Unlocking the Power of Mobile Gamers.

Newzoo forecasts mobile gaming to be worth $174 billion by 2021, a projection made before global lockdowns were put in place due to the COVID-19 coronavirus pandemic and the world became a captive audience.

A leading Publisher and developer in counterculture mobile games, who has been a pioneer in this space is LEAF Mobile Inc., a Company with a solid library of highly engaging games that have produced enduring enjoyment among players, as well as explosive revenue.

LEAF is going public and bringing its impressive and growing list of titles to a much wider audience of not just players, but investors as well.

Counterculture mobile games:

One of the main keys to success for any business is KYC - know your customer / client and LEAF Mobile’s data driven strategy allows them to know its audience practically as well as they know themselves. The proof is in the numbers, with game title yearly revenue growing 4x year over year from 2018 to 2019, clocking in at $10 million over the last three years of historical data. Looking deeper, the Company’s game titles boast lifetime revenue (LTR) of $60 million from 2011 to 2019, driven by its anchor franchise, Bud Farm. The player demographic they target is underserved, engaged and loyal to their library of games. We’ll cover more on those games later, after a little more on the Company….

Creators of the #1 cannabis-themed mobile game franchise:

LEAF Mobile was established in 2018 with the acquisition a portfolio of mobile games focused on the counterculture space. The Company realized that several major elements were beginning to converge, creating exciting new opportunities:

  • Mobile gaming was exploding, growing as an industry substantially year-over-year through improved game platforms and monetization strategies.
  • A mass niche of counterculture was underserved, in mobile game content.
  • Cannabis was becoming legal and normalized, of which LEAF’s core franchise was focused
  • Celebrity IP based games were bringing increased excitement and growth to the category.

Click to enlargeWith the combination and timing of these elements, the Company felt that there was the opportunity to unlock potential within its existing game titles, creating a foundation to continue growth and diversification within this counterculture space.

After the acquisition of these game titles, LEAF leveraged management’s experience in game publishing and entertainment, accelerating the company’s growth plan for its listing and the strategy has been successful in fulfilling its year-over-year revenue growth from $2.4 million in 2018 to forecast $26.9 million in 2020.

Driving revenue growth to a new level:

The Company’s Bud Farm anchor franchise has a proven audience appeal and has been a popular title for the past decade. Having generated $60.6 million in LTR to date, LEAF is looking to unlock new revenue on top of that by selecting intellectual property (IP) that fits well with it. Additionally, there are new underserved verticals the Company is targeting that audience research leads LEAF leadership to believe its product pipeline can expand into and diversify its revenue channels.

The most recent launch “Bud Farm Idle Tycoon”, continues the success of the original “BUD Farm grass roots” game. This franchise’s proven loyal player is reflected in revenue estimate for FY 2020 is $21.9 million.

The Company is extending the “Bud Farm” franchise via an exciting IP partnership with comedic cannabis culture icons Cheech & Chong taking over the Bud Farm environment, coinciding with the duo’s 50th anniversary of making comedy films.

Launching on April 20th, also known as the seminal “4/20” for the cannabis audience, this IP aligns with the “Bud Farm” game franchise like chocolate and peanut butter. Combining two of the most well-known characters in cannabis culture with the most popular mobile game franchise in cannabis culture adds continued depth to this vertical.

Click to enlargeBoth Cheech Marin and Tommy Chong have been involved in the creative process of this game’s development, from concept to launch. In an interview with Stockhouse Editorial, LEAF Mobile’s founder and CEO, Darcy Taylor, noted that comedic legends Cheech & Chong being on-board ensuring their characters’ outlines, appearance and storyline stays true to their core fan appeal, while also keeping true to the “Bud Farm”, is a winning mix. Leading up to the game’s release, both Cheech & Chong have been hitting the press circuit promoting it from top to bottom across magazines, TV shows and social media channels.

Progressive sales channels:

The majority of LEAF’s user acquisition is online, but other sources have managed to generate additional attention. Celebrity partnerships add to increased game title awareness and allows the company to cross over to mainstream media. Both sources of media complement each other quite well when organic and paid advertising work in unison. Paid advertising is the primary tool to generate user installs, while organic installs on top celebrities’ social influence is added fuel to user growth.

CEO Taylor noted that celebrities who are highly engaged in the game development partnerships, especially during pre and post launch promotion and leverage their massive social networks, see this translate into more players coming to the games and increased royalty revenue for that effort.

Counterculture is vibrant, both from major figures who drive its popularity, to consumers within the industry. As far as mobile games go, the audience is tremendously loyal and have supportive to those who understand their needs. The LEAF portfolio continues to strive to address this audience in a creative way.

Meet the team:

The management team leading LEAF Mobile has a lengthy history with both the mobile game industry, but also cross-industries that add value to their process and purpose, which further drives this Company forward.

LEAF is led by a mix of marketing and entertainment executives, along with game industry development and publishing pioneers who have delivered successful products over the past 15-plus years. Their experience has been spent with household names such as Disney, EA, Activision, Blizzard, and Ubisoft, as well as East Side Games, IMG and Arkadium.

Why go public?

As an early-stage pub co. with a solid history of revenues and free cash flow over several quarters of business, this Company is well positioned versus its competitors who trade at strong multiples.

LEAF Mobile’s leadership team believes that taking their business onto the TSX Venture Exchange will support revenue acceleration of its current titles as well as allow for greater investment in new IP rights acquisitions to further expand its portfolio of mobile game titles, preparing the company for the next level of growth.

Investment summary:

LEAF Mobile Inc. offers an exciting proposition for investors unlike any other entertainment company.

As it ventures onto the TSX: Venture Exchange, it knocks down the door with an exciting new game launch – Cheech & Chong’s “Bud Farm”, on April 20th. This is just the beginning, as more products are in the pipeline to be released later this year and next.

Under this era of COVID induced self-isolation, people have been compelled to stay indoors with additional time to occupy. The obvious choice – entertainment. Mobile games are seeing a major benefit with increased downloads in recent months and it could be said that the timing is right for LEAF Mobile to go public with a strong foundation of revenue, offering and entertainment product to an audience who needs an escape. Small cap offerings may be especially volatile especially in these times, but this has a long-term pace that likely won’t get thrown off track during these turbulent times.

This Company offers much of what a savvy investor would be looking for – expanding $150 billion market, segment identification and leadership, experienced management team, Strong product portfolio and pipeline, three years of consistent revenue growth before going public and even stronger revenue outlook. This is one of a very select group of companies on the exchange that has shown this level of growth and should be kept on your radar as it builds itself into a major brand from here.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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