Motorsport Games Inc. (MSGM) Q1 2021 Earnings Call Transcript

Motorsport Games Inc. (MSGM -3.66%)
Q1 2021 Earnings Call
May 17, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by and welcome to the first-quarter 2021 conference call and webcast for Motorsport Games, Inc. On today's call are Dmitry Kozko, executive chairman and chief executive officer; Stephen Hood, president; and Jon New, chief financial officer. By now, everyone should have access to the company's first-quarter earnings press release filed today after the market closed. This is available on the investor relations section of the Motorsport Games website at www.motorsportgames.com. During the course of this call, management may make forward-looking statements within the meaning of the federal security laws.

These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to the firm materially from those described in these forward-looking statements. Please refer to today's press release and the company's filings with the SEC including the company's annual report on the Form 10-K for the year ended December 31, 2020, and the company's quarterly report on Form 10-Q for the period ended March 31, 2021 for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. In today's conference call, we will refer to certain non-GAAP financial measures such as adjusted EBITDA as we discussed the first-quarter 2021 financial results You will find a historical reconciliation of these non-GAAP measures to our actual GAAP results included in the press release issued earlier today. We do not provide a reconciliation for adjusted EBITDA on a forward-looking basis because we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is now available without unreasonable effort due to the inherent difficulty of forecasting the timing and amount of certain items such as but not limited to certain acquisition-related expenses and stock-based compensation expenses as such adjustments have not yet occurred or out of our control and or cannot be reasonably projected and, accordingly, we are unable to address the probable significance of the unavailable information. And now, I would like to turn this call over to Dmitry Kozko, chief executive officer of Motorsport Games.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Hello, everyone. It's a pleasure to be speaking with you as we report another successful quarter for Motorsport Games. Please check out our investor video posted on the landing page of our IR website. We hope this video gives you a sense of the energy and excitement inherent in everything that we do here at Motorsport Games while quickly illustrating our key milestones in the quarter. Before I dive into details, I want to say a quick thank you to our shareholders, including many new investors we have met in the past few months.

Thank you for taking the time to learn our story and to follow us on this amazing journey. To all of our new shareholders, let me quickly reiterate who we are and what drives us. We are an award-winning, leading racing game developer, publisher, and esports ecosystem provider of official motor sports racing series throughout the world. Our mission Motorsport Games is simple, we create and spread joy through racing games starting with our exclusive access to our parent companies 55 million monthly active users and beyond. We achieve this mission by developing and publishing great racing games and immersive esports experiences of the world's most iconic races and brands who trust us with their valuable IP and often in a long-term partnership like we have with NASCAR. They are one of several iconic brands that we work with today including ATL, which represents 24 Hours of Le Mans and the British Touring Car Championship, and we're just getting started.

I'm proud of our team and the progress we're making toward the launch of NASCAR NXT and building Motorsport Games into a world-class interactive entertainment company. And we're truly world-class as we're operating 24/7 across continents with more than 122 team members at the close of the quarter expanding our development resources by nearly 30%and growing fast from where we were just months ago. And at any given time, our developers and programmers are innovating and collaborating across the United States, the United Kingdom, Russia Australia, and now the Netherlands. This global studio presence is differentiating as we seek additional IP opportunities to expand our fan base and become the market leader in virtual motor sports racing around the world. Our strategic initiatives are key here as we assemble the assets needed to elevate from one product company to a multi-product game publisher, developer, and esports provider.

The combination of Studio 397 and rFactor2, KartKraft, and anticipated acquisition of Digital Tales is highly synergistic and I'm very pleased with the progress we have been made year to date integrating these new assets, which we believe ultimately will translate into the most compelling gaming experiences for our fans. This is particularly the case with NASCAR NXT where we anticipate the game to be released in the back half of the third quarter of this year, which we feel is the ideal time to launch this exciting new game. The quality of this game is said to be incredibly high and the realistic experience it provides is what our fans have been asking for and what they expect from a world-class gaming company. We continue to strive toward our goal of achieving a triple-A status where this game franchise truly belongs.

The game brings high-quality realistic graphics to consume the player in the real world racing experience while showcasing the unique and fun characteristics of NASCAR this is possible due to our recent strategic initiatives and let me update you on those. Since completing the acquisition of Studio 397 and acquiring their hyper-realistic technology platform, rFactor2, we have been able to accelerate the integration of this technology into the new NASCAR game. Furthermore, we will now integrate the technologies with the complete understanding and security that it will, in the future, integrate at the source code level as part of that MSGM engine, further improving our development efficiencies across our racing game portfolio. As our core development team enhanced to source code, any and all improvements are additionally folded back into rFactor2 to improve that product as well.

This efficiency was not possible before the acquisition. Motorsport Games and Studio 397 had a working relationship for the past two years and this great relationship enabled us to seamlessly integrate talented developers, technology, and gaming expertise. We also completed the acquisition of KartKraft or Motorsport Games Australia during Q1. This acquisition allows us to further diversify our global presence and attract new fans to our community while adding another racing discipline to our gaming portfolio, and we look forward to pairing KartKraft with another notable IP.

Motorsport Games Australia is continuing to enhance the KartKraft title to provide new content and updated physics. Our development teams have all the tools necessary to create games that are fun, immersive, and realistic. Completing these acquisitions has been great for our product pipeline and developing capabilities already. We're also working toward completing the anticipated Digital Tales acquisition, which we're super excited about. As of now, we do not have any additional emanate plans to disclose.

However, we're always exploring new opportunities to maximize our shareholder value and capital but at this time our core focus is finalizing NASCAR NXT and getting it into the hands of our eager fans. And now an update on our esports business, which funnels new users across our product base and drives higher fan engagement and new potential revenue streams from sponsorships. It is a highly compelling market opportunity and growing global phenomenon, now a billion-dollar industry expected to grow at a CAGR of 10% over the next decade. In 2020, nearly half a billion people around the world watching esports events and that number is only trending upwards. We're participating in that growth and we want to be the dominant player in the racing esports scene.

We believe our combination of world-class events around iconic IP and effective user engagement with our fans will help us get there. The appeal of the events we showcase were finals of the DiRT Rally 2.0 World Series, World Rallycross eSports Series, and our Winter Heat events on our own NASCAR Heat 5 video game. And we just received an exciting validation. One week ago, we received the 2021 Sports Technology Award for the best use of esports by sports brands for our 24 Hours of Le Mans Virtual event.

This was a category for minimal but competitors including Formula 1 and ESL. The award is a leading global celebration of technology-led innovation across the international sports sector and we won that esport category. It's held annually as a competition to highlight outstanding advances in the industry and the awards are judged by over 50 leading influencers from the world of sport and technology. We're excited about this major validation of our esports capabilities and the success of our Le Mans Virtual last summer reflecting our team's hard work, creativity, and vision delivering awesome content and community to our global fans. We're now working on our second annual Le Mans Virtual event, which will also benefit from our new ownership of rFactor2 and we're focused on having a vast audience again like we did last year when we had record TV and digital viewership numbers. Other events will include BTCC Sports, NASCAR Summer Heat Showdown, and eNASCAR Heat Pro League season three events.

All are expected to raise awareness for the launch of NASCAR NXT and, of course, we're starting to build audiences for product launches of other series this coming later. Lastly, we're launching the Traxion platform to foster growth and allow our growing fan base to engage more deeply online and across our platforms. Traxion plays a key role in our esports business as all events will be featured and integrated with the user base there. We believe the future of the space relies heavily on innovation and we expect to deliver the next phase of Traxion integration into our ecosystem later this year.

Now, Stephen is going to say a few words about our product development progress. Thank you.

Stephen Hood -- President

Thank you, Dmitry, and hello, everyone. I'm Stephen Hood, president of Motorsport Games. We are pleased to announce the great development strides we are making this quarter, especially for our new flagship franchise game NASCAR NXT. Our major reworking of the NASCAR franchise is in the closing stages of development as NASCAR NXT enters beta. The game will then enter a final significant development period prior to product hardening and submission to platform holders for testing and certification.

Due to our recent acquisition of Studio 397, NASCAR NXT will include their leading racing simulation technology. rFactor2 brings real-life physics to our development toolbox that we can integrate into the game and develop in a much more efficient way. We are working around the clock and anticipate the launch of our new NASCAR franchise in the back half of the third quarter this year. But we are not stopping there, we are bringing NASCAR to the Nintendo Switch platform, which remains on track for a release later this year. A platform not yet reached by Motorsport Games will add useful exposure and revenues to our NASCAR franchise and pave the way for possible future franchise entries into the Nintendo market.

We are also continuing to build on NASCAR Heat Mobile using our expanded development team with the ongoing quality of life improvements and our recently prioritized upcoming 2021 content update, which should broaden the appeal of the product and appease existing fans and new fans alike. Additional titles around the NASCAR license remain in development within our portfolio and include Match 3 and Nintendo Switch products. We continue to work at pace to grow our fan base across multiple consoles and platforms to drive the joy of recent games to our fans wherever they may play. As you know, we had our hands full seeking and completing strategic acquisitions to help bolster our development teams, technology platforms, and overall gaming experience. Both Motorsport Games Australia with KartKraft and Studio 397 with rFactor2 continue to integrate into Motorsport Games with all parties working together to harness and integrate staff, processes, and technologies.

Both studios will be providing significant expertise and product capabilities to Motorsport Games over the coming months and years. For example, rFactor2 from Studio 397 will be our go-to esports platform for those series we are yet to provide the Motorsport Games bespoke product for British Touring Car and Le Mans will immediately benefit from this and our in-house teams now have the confidence and control over a world-class esports platform. We are continuing to expand the features and content of both KartKraft and rFactor2. I want to shift to an update on our BTCC content. All British Touring Car environments have now been laser scanned ahead of track content creation. Laser-scan data allows for highly accurate recreation of surfaces and environmental detail, which when combined with the MSGM physics engine, rFactor2, provides the highest level of feedback for players, making every stretch of track as engrossing and experienced as possible. British Touring Car, which will utilize the upcoming NASCAR NXT game platform, has recently undergone creative planning designed to differentiate the product versus other offerings from MSGM and appeal to a wide audience of touring car fans all over the world. Our products will each carry unique traits, which can be selectively Waterford into subsequent titles and in order to drive forward the Motorsport Games product ecosystem. This allows for tightly controlled development expense but with a focus on feature differentiation and technology reuse.

In the end, our development teams can work more efficiently and still provide the highest quality product on the market. Lastly, high-caliber recruits continue to arrive and strengthen our studios' capabilities and an experienced technical director joined the Silverstone, U.K. studio in May as we continue to recruit the industry's best and brightest talent to turn the U.K. hub into a fully functioning development studio in its own right. Positioned alongside our internal esports team, Silverstone will ensure tight collaboration between the goals of our development and esports operations.

Additional hires from world-class studios such as Electronic Arts and Playground Games continue the phase. The increased recognition of Motorsport Games activities has served to accelerate the reach of our company. Now, let me hand it over to Jon New to give some financial highlights.

Jon New -- Chief Financial Officer

Thank you, Stephen. We're pleased to welcome everyone to our 2021 first-quarter earnings conference call. For the first quarter of 2021, revenues were 2.5 million as compared to 3.2 million in the first quarter of 2020. The year-over-year decrease reflects lower sales on our console games and to a lesser extent, a reduction in mobile revenues.

The NASCAR Heat 4 game was released in September 2019. That was two months later in the respective calendar year compared to the release of NASCAR Heat 5 in July of 2020. This resulted in higher sales of NASCAR before during the first quarter of 2020 as compared to sales of NASCAR Heat 5 during the first quarter of 2021. Since the majority of sales from a new release occur closest to the release date, gross profit was 1.7 million for the first quarter, which was a decrease of about 22%, compared to the prior-year first-quarter gross profit of 2.2 million. Gross profit margin was 68% of revenues in the first quarter of 2021, compared to 67% of revenues in the prior-year period. The decrease in gross margin dollars is primarily due to the reduction in revenues, partially offset by the increased percentage of digital sales versus physical units, digital has a higher margin.

Operating expenses were 17.1 million for the first quarter of 2021, compared to 2.3 million for the first quarter of 2020. The first quarter includes expenses of 2.9 million associated with our IPO, 9.1 million in non-cash stock-based compensation relating to the IPO, and 300,000 expenses related to acquisition activity in the quarter. As a result, adjusted EBITDA was negative 2.8 million for the three months ended March 31, 2021, versus negative 0.07 million in the prior-year period. The quarter-over-quarter change reflects the increase in staffing, marketing, and game development to support new brands and new platform options for our upcoming games. Let me finish by touching on our financial expectations looking ahead.

We made confident in our full-year guidance, which is 22.5 million in revenue, and adjusted EBITDA of negative 7.3 million. With the anticipated release of NASCAR NXT in the back half of the third quarter this year, launch-related revenues are expected to spread over the third and fourth quarters. We remain comfortable with our full-year revenue forecast of 22.5 million. Thank you for joining us today. And now, let's go to questions. Operator?

Questions & Answers:

Operator

At this time, we'll be conducting a question-and-answer session. [Operator instructions] Our first question comes from the line of Michael Graham with Canaccord. You may proceed with your question.

Mike Graham -- Canaccord Genuity -- Analyst

Thank you and thanks for all the updates, guys. I just wanted to start with one question on the NASCAR NXT launch. You know, we've always expected it to come in Q3 so your comments are consistent with that. Just wondering if you can give us a little color on why the second half of the quarter makes the most sense for that launch? And also, you know, along with that, just wondering if maybe -- Stephen appreciated your comments on some of the game qualities and features but if there's anything you can share about the deep level of DLC that you expect this first launch to have would be interesting to us.

Then I have a follow-up. Thanks.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Thank you, Mike, for the question. This is Dmitry. The reason is, you know, historically, with NASCAR Heat 2, 3, and 4, we have seen great results from launching these annual NASCAR game releases in the month of September. So for the NASCAR NXT, we are on target to launch in the second half of Q3, and as we continue to look at data points that will help us make this eventually the most successful NASCAR title yet in our company history. So we still remain very comfortable with our full-year guidance of 22.5.

And now, we are getting more specific on the timing. Stephen, can you take the second part of the question?

Stephen Hood -- President

Yeah, sure. I can pick up on the DLC. So, yes, certainly, the plan is to inject -- probably the easiest way to describe it is the greater variety of DLC content into NASCAR NXT. So one of the key reasons for wanting to rebuild the technology platform and do the work that we've been putting into NASCAR NXT over the last couple of years is to prepare the platform for new DLC in the future, instead of just paint scheme has been injected into a product that we already know is incredibly popular among our audience. There are additional content opportunities around schemes and themes for UI personalizing the product more possibly adding additional cars into the package into the future.

So these kinds of drivable components of even more value than what we have seen in the NASCAR Heat franchise prior. So I certainly believe that the door is open for a greater variety and we'll get a lot stronger than that and, over time, one of the key reasons for changing the framework in NASCAR NXT. We own all of this technology, we know how it operates, and we can react to the market and the interests and demands of players and inject different types of DLC into NASCAR NXT and the games of tomorrow.

Mike Graham -- Canaccord Genuity -- Analyst

OK, that's helpful and good color so thank you for that. And then, the other one I just wanted to ask, Dmitry, is you're getting some good momentum in terms of esports viewership and events and I just wonder if you can share a little bit regarding how you're thinking about the potential for eventually moving from sponsorship revenue to the streaming rights? Is that something that is becoming a little more sort of in the, you know, in the near term as you're thinking about the evolution of the strategy for your esports business?

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

So there's a couple of things there, Mike. So first of all, we're super excited about the acquisition of rFactor2 because that enables us an additional revenue stream in the esports sector as we create these bespoke opportunities with the rights holder. I'll give you one example, we have created esports activities with Formula E last year but we're only able to create a moderate amount of revenue from such because we did not have a dedicated game title that will allow us to collect a game type of revenue stream. Now, with the rFactor2 platform being fully ours and under our control, we're able to create these events and look for more revenue streams than just sponsorship, such as this esports as a service since it's now more of a platform play and we can drive game-related revenue. But to your other point, absolutely, as we continue to compound audience and we see as we go from season to season, for example, in our NASCAR esports activities, we have grown our audience about fourfold from season one to season two and we're here to engage on season three later this year.

And similar results have been monitored as we did with the Le Mans eSports. So as we continue to increase this overall viewership and aggregate this viewership between the different esports series, that compounding effect becomes an attractable offering for a media rights opportunity. So, yes, we do believe that that is going to be something that we'll be able to derive opportunity sooner than we were perhaps discussing at the beginning of the year. But it's not something we are counting on. Right now, we're just super excited about the fact that we could derive game revenue from these esports opportunities that we do not have a dedicated game title for yet.

Mike Graham -- Canaccord Genuity -- Analyst

Super. OK, thanks so much. I'll go back in the queue. Thanks, guys.

Operator

[Operator instructions] Our next question comes from the line of Mike Hickey with The Benchmark Company. You may proceed with your question.

Mike Hickey -- The Benchmark Company -- Analyst

Hey, Dmitry, Jon, Stephen. Congrats on the quarter, guys. I'm excited to hear about the continued development of NASCAR NXT. The -- Jon, I guess, just curious on Q2 of your comfortable consensus.

I think last quarter you gave a view not just the current year from the fourth quarter. So I'm not sure if you're going to give more visibility on the current quarter of your comfortable consensus.

Jon New -- Chief Financial Officer

We're still comfortable with Q2 as a charter.

Mike Hickey -- The Benchmark Company -- Analyst

That's good. There's also a lot of deals here, obviously, your headcount is increasing. I'm curious what does your total offer headcount in a day to do all these deals? What were you thinking or trends? And then, broadly speaking, just I guess those, obviously, how you think about the importance of culture -- maintain the culture or growing the culture within your development studios offices spread out globally now and how you think about managing issues like crunch? Their associates are sort of, you know, pretty ambitious games. Thanks, guys.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Hey, thanks, Mike, for those questions. So we are as of 3/31, 122 headcounts. The majority of that -- to be more specific, 84 of that is our development resource, which is exciting because that nearly increased from our last quarter reported numbers our development capability by almost 30% and we continue to organically attract high-level talent that is super passionate about creating and publishing racing games. And that helps speak to the culture, which I'll definitely give to Stephen to touch on.

And the fact that we're able to open more global presents allows us to have this growth in geographical areas where such high-level talent exists, being that we're now such a wide footprint. So no longer do we have to look in sort of restricted or smaller geographical areas like U.S., U.K. and let's say, Eastern Europe as we have present before. But now with Australia, that opens up another opportunity, and this talent is surfacing all across the globe. So we are readily continuing to not only organically attract but we're also excited about teams like Digital Tale coming in and the capabilities that they bring, especially in a high growth area like mobile platform.

Stephen Hood -- President

So yes, I think Dmitry put it very well. I mean, mentioning that people are super passionate, that is -- that goes a very long way to impact and in reducing the need for crunch. People are putting their hearts and souls into these products because it's something that they enjoy doing. This is a hobby as much as their work for many of these specialists that we have engaged and employed around the world and it's been incredibly exciting to watch the growth of NASCAR NXT as the team has been built has the effort -- has been put into the product. I think crunch, which is you know an industrywide challenge for many large operations, and in this day and age, I think is mitigated through very careful planning. And the culture of the company, which is one giant family that operates across multiple studios around the world, there are many new ideas and processes that are applied to most esports games outlook.

And when we talk about growing the development headcount, people automatically imagine that we are hiring countless engineers to work on these projects. But an important part of the headcount increase is the production team, the planning team that organizes, not only NASCAR NXT but the other products like Le Mans, British Touring Car that are already in development. And appropriate planning does go a very long way to mitigating crunch. So I believe that we have the right culture, the right planning in place, and the right headcount to comfortably manage the projects of today and tomorrow. And I'm very positive about them.

Mike Hickey -- The Benchmark Company -- Analyst

Thank you. You also mentioned, Dmitry, in your prepared comments that you continue to seek additional racing IP and it looks like you in Gerard to help you, and, of course, you have a motor sport network as well. But I'm just curious if you could double click on, you know, how aggressive you'll be for additional IP, you already got a bunch of it. And then, last question, when you look at the fiscal year of '22, can you give us any visibility on the amount of games that we expect a second game from a major racing? Thanks, guys.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Thanks, Mike. So as you rightfully noted and as we set out on our vision, from the very beginning of time, even pre-IPO, right, is we do one to hold portfolio racing games there that's why it's possible for a racing fan regardless of where they are in the global footprint. That means that we would have a portfolio that carries multiple racing disciplines and that's why we're so excited with KartKraft, for example, adding an additional racing discipline. And as I was saying in my remarks is that we can't wait to pair that with one of the world-class IPs. So you will see some organic growth coming from us taking these types of disciplines pairing with IP as we continue to seek others.

And a platform such as rFactor2 not only gives us a leap forward with technological advances and the quality standards that our products carry but also gives confidence to those IP holders all the level of quality product we're able to bring with essentially their name on it. So that does continue to help us. Gerard Neveu is somebody that helps us deliver that message as he understands deeply the industry as he has been there and developed a similar global footprint with World Endurance Championship and he was integral in our 24 Hours Le Mans Virtual event as well. And as we continue to talk to other race series these IP holders, he helps us translate their needs into what we could create from our products and esports experiences.

So we're super excited and with additional access that motor sport network provides, sort of validation, and audience access, we couldn't be more excited about that the opportunity to just scale our portfolio racing games to our most notable one to cast sort of the widest possible net to any racing fan around the world is much easier than it was before for us.

Mike Hickey -- The Benchmark Company -- Analyst

Nice. Did you give -- did you say what your '22 pipeline would look like if you'd have another major racing at the majority in that time period?

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

So in 2022, as we set out when we announced our British Touring Car Championship license that was obtained last year, that is the game that is slated to come out. So we look to create an esports opportunity with the British Touring Car Championship later this year and a product would release in 2022. So everything is still on schedule, and as Stephen has reported in his remarks, we're super excited to have completed all the tracks laser scans, which obviously adds a sort of an insight of how detailed we approach each one of these race series, and look forward to launching it next year on time.

Mike Hickey -- The Benchmark Company -- Analyst

Nice. Give me one last from the activity at the last end of the quarter. When you look at kart, I guess, you add the model of the kart, you have arguably the biggest racing game in the world. And so we look at your kart racing game tech, is there some sort of novel licensing opportunities you think you can add in the mix and expand the market potential of that game?

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Thank you for highlighting the fact that karting is definitely very fun and accessible and understood across multiple generations. You might have heard me speak before when I highlight the fact that when kids, for example, go to theme parks, karting is one of those attractions that present there. And that is because it's fun and we believe those are some of the characteristics of the example like Mario Kart that translate into this virtual world. We are evaluating multiple opportunities of the type of IP we would pair KartKraft with and we want to make sure that once we do, we continue to deliver the fun aspect of karting across the world but also address another captive fan base as we like to do with each one of our license games that captive fan base allows us to have a foundation audience that then helps us spread sort of the excitement around these products that we launch. So we look forward to carrying it with the right IP and sort of starting that snowball effect in karting as well just as we have done with NASCAR and set out to do with other franchises in our portfolio.

Mike Hickey -- The Benchmark Company -- Analyst

That's great, guys. Thank you. Best of luck.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Franco Granda with D.A. Davidson. You may proceed with your question.

Franco Granda -- D.A. Davidson -- Analyst

Yeah. Good afternoon, everyone. Thanks for taking my questions. I've got two on mobile gaming.

So you've been talking about creating new games in mobile that spend different categories. You mentioned just Match 3. Do you think the current team is large enough to look to expand this portfolio?

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Thank you, Franco, for the question. So the short answer is yes, but we continue to expand the team capability. For example, we do have one mobile product in the market today, that's NASCAR Heat Mobile, and that has its mobile team attached to it. However, we continue to attract high-level talent, high level I mean by experience.

And with this anticipated acquisition of Digital Tales, that expands the team, not just organically, but through such a sort of accrue hire, if you may. So once we pair our current team with Digital Tales, we do believe we would have the capabilities to expand the young NASCAR franchise and we're happy that Digital Tales actually brings an additional racing discipline alongside their mobile experience and capabilities. So it's another license and another captive fan base that we could extend and expand upon. But to your point of mobile development capabilities, we continue to grow that just similarly as we have done for the console and PC side, which we're now we're able to expand from a sort of a single franchise of NASCAR into multiple franchises. That's why you should be able to see our progress in BTCC and other stand-alone pipelines.

Franco Granda -- D.A. Davidson -- Analyst

Yeah. That's fair enough. Thank you for the color. And then, I guess in the similar line of questioning, obviously, mobile market as you could call it, it's quite different from the console PC market and, you know, it could be affected by other headwinds, right? Right now we're seeing -- I'm talking about the effect that IDFA is having on the mobile gaming industry. So as you look at the different dynamics, do you think you can have a larger emphasis as you kind of feel about that portfolio in terms of as it relates to M&A really? Or I guess, how much time are you spending looking at M&A opportunities for this space? I know you used to talk about some macro hires there.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

So we're currently focused on launching NASCAR NXT. And we currently have two other exclusive licenses, the BTCC and the Le Mans that would go on alongside that that we're developing console and PC products. That is historically has been the core revenue driver for us. So we want to make sure that we expand that opportunity as much as possible.

Mobile, historically, has been a smaller portion of our overall revenue. However, that proves to be the largest growth sector. So to answer your question in a slightly different way, our focus continues to be console and PC on these core franchises that we currently have, which means that we won't be spending as much time thinking about mobile M&A opportunities as we are on how to perfect and better our console and PC products just so that we're able to constantly create an exciting pipeline of content. And like Stephen touched on and I believe my greatest question was something we could evolve into more of a live ops model, right? Or games as a service. So that would be a growth opportunity in more of a focus more so than seeking out additional mobile studios. But let me not discount, should the opportunity presents itself and it makes sense and it expands our racing disciplines, perhaps further, we will definitely explore such.

Franco Granda -- D.A. Davidson -- Analyst

Sounds good. Thank you, Dmitry.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Thank you.

Operator

[Operator instructions] Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn the call back over to Mr. Dmitry Kozko for closing remarks.

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

One more time, thank you, everyone, for joining us today. We're very excited about the rest of the year and launching the most anticipated NASCAR game title yet in the history of our company, in addition to the several other priorities we have across our iconic IP esports and Traxion platform. So thank you again for joining us.

Operator

[Operator signoff]

Duration: 47 minutes

Call participants:

Dmitry Kozko -- Executive Chairman and Chief Executive Officer

Stephen Hood -- President

Jon New -- Chief Financial Officer

Mike Graham -- Canaccord Genuity -- Analyst

Mike Hickey -- The Benchmark Company -- Analyst

Franco Granda -- D.A. Davidson -- Analyst

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