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Emerge Gaming (ASX: EM1) has reported its maiden half-year profit thanks to the November launch of its Miggster social gaming platform, a subscription network where users can win prizes by playing addictive but rudimentary games.
The Perth-based company reported revenue of $1.36 million in the December half, up from nothing in the same period in FY19, although in a recent January update it estimated subscriptions would bring in substantially more income this calendar year.
Emerge managed to secure 50,000 paying subscribers to the Miggster platform within one month of its launch, of which three quarters were annual subscribers paying a $113 fee.
This was enough to push the group into the black for the first time with a net profit after tax of $495,091, up from a loss of $802,942 in the six months to 31 December 2019.
"Emerge has signed up, and received payment for, subscriptions in more than 160 countries for the platform," the company said in its announcement today.
In late January the group announced subscriber numbers had passed the 100,000 mark with implied subscription values of more than $9 million, but after paying marketer ICT its commissions and revenue share, Emerge would end up with around $3.1 million.
Around one in four paying subscribers are actively entering tournaments with an average session time of 17 minutes, and Emerge has committed to providing US$500,000 worth of prizes to users over 12 months.
"Emerge is seeking to partner with other marketing and distribution partners to promote the Miggster platform through additional marketing channels, leveraging the established international billing infrastructure and service offering," the company said.
Emerge also launched a social gaming platform under the brand of South African telco MTN, registering 95,000 new subscribers by December.
"After launching MTN Arena in early July 2020, the half year saw the acceleration of marketing efforts with promotions of tournaments, competitions and prizes through key messaging, video and other digital content in the distribution channels.
"MTN Arena's ability to attract this significant level of interest demonstrates the platform's strong value proposition and offering as an appealing consumer product."
Emerge expects six months of product performance with MTN Arena will lay the foundation for an international global roll-out in partnership with mobile network operators (MNOs).
"Emerge's [sic] is in discussions with MNO's [sic] and Microsoft to partner for the planned launch of the Game Cloud Streaming Product in 2021."
EM1, which had a market capitalisation of $39.73 million at close of trade on Friday, is seeing a rise in shares today, up 4.35 per cent to $0.048 per share.
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