#1**** EMBRACER+ GROUP Embracer Group acquires Vertigo Games September 16, 2020#2AGENDA 1. The deal 2. Vertigo Games 3. The VR gaming market 4. The future EMBRACER+ VERTIGOGAMES KOCH MEDIA GROUP Lars Wingefors, Embracer Group Richard Stitselaar and Kimara Rouwit, Vertigo Games Pierre Vinson, Koch Media Klemens Kundratitz, Koch Media#3KOCH MEDIA ACQUIRES VERTIGO GAMES The deal ● ● ● 100% of the shares acquired Upfront Consideration: €50M (€40M cash and €10M shares), implying an "upfront EV” of €45M, adjusting for €5M acquired net cash Earnout package: A mix of operational and financial targets spanning up to 10 years, capped at €65M (€25M cash and €40M shares) Two of several components of the earnout package stipulates selling mgmt to stay employed for up to 10 years One of several components of the earnout package stipulates that the sellers receive below consideration depending on its EBIT performance between 1 July 2020 and 31 March 2026, and the schedule looks as follows: EBIT (1 Jul 2020-31 Mar 2026) Cash Shares Total ≥ 100 15 ≥ 95 ≥ 90 ≥ 85 12.5 10 7.5 10 10 10 20 10 17.5 25 22.5 Key financials (estimates) € million Net sales Operational EBIT Jan 2020- Apr 2021 Dec 2020-Mar 2022 10-12 6-8 18-24 11-17 EMBRACER GROUP Beyond Mar 2022 Stable sales and profit growth +#4VERTIGO GAMES IN BRIEF World-leading VR developer and publisher with big ambitions in market finally taking off Vertigo is exclusively VR ● ● ● VERTIGOGAMES Rotterdam, Netherlands Founded 2008 Exclusively VR since 2013 (7 years) Games are developed exclusively for VR 50 employees of which 35 developers Three complementary business areas Studios Development of high- quality VR games Publishing Publishing of own and 3rd party VR games Arcades Development & Licensing of VR games to arcades Strong VR track record and exciting pipeline project Developed, published and owned by Vertigo ARIZONA SUNSHINE Co-op zombie shooter #4 most sold VR game* 25% of all playtime* in Western arcade locations SLON During the last 24 months. Estimate by Vertigo based on third party market intel reports and indications from market participants. AFTER THE FALL EMBRACER+ GROUP Co-op action shooter One of the most anticipated AAA VR releases 1.5M+ VR units sold internal and 3rd party games 4#5ARIZONA SUNSHINE Critically acclaimed, million-selling fan-favorite Apocalyptic zombie survival first-person shooter 4-player co-op Built exclusively for VR Dec 2016 release On all major VR platforms #4 most sold VR game* Over 68M views across 15 videos 80 "The Best VR Zombie Shooter Yet" - UploadVR, 85/100 (29/06/2017) 83% "Featuring beautiful graphics, satisfying gunplay, and a detailed world, this is one of the best [VR] shooters" WINNER 2016 BEST VR GAME OF THE YEAR - UPLOADVR - Windows Central Best VR Games Selection (12/02/2020) WINNER 2016 BEST VIVE GAME OF THE YEAR-UPLOADVR WINNER 2016 BEST HTC VIVE FPS - VIVEY AWARDS ARIZONA SUNSHINE * During the last 24 months. Estimate by Vertigo based on third party market intel reports and indications from market participants. HIGH RIZONA THE AFRICAN#6AFTER THE FALL One of the most anticipated AAA VR releases ✓ The next VR Action FPS from Vertigo Studios ✓ One of few AAA VR titles announced for the next 12 months ✓ Built exclusively for, with gameplay unique to, VR ✓ Strong validation and support from leading VR platforms "Impressive production values and all. An absolute thrill ride." UploadVR "If every game were like this one in this category, I wouldn't worry about the future of VR." - VentureBeat: Dean Takahashi's Favorite Games of E3 Selection BEST EXPERIENCE AWARD E3 2019 BEST OF E3 2019 NOMINEE AFTER THE FALL BUL An epic VR action FPS with intense co-op gameplay at its core that pits up to 4 players against a vast, hostile VR world, set in the ice-covered ruins of LA nearly 20 years after the apocalypse, in a raging fight for survival. 6 -#7VERTIGO STUDIOS 7 years of VR development excellence Vertigo Studios in brief ● ● ● ● Vertigo's development studio Based in Rotterdam, Netherlands Founded 2008 VR-only development since 2013 37 developers Development strategy VR exclusive development Building games from the ground up for VR to make full use of VR's immersive qualities Reimagining proven concepts Taking proven concepts and reimagining these for VR in full-feature titles The long tail Keeping players engaged with replayability through nultiplayer features and post-launch support Released VR games and pipeline 4 games and 2 DLCs released - largest dev project ever in pipeline ARIZONA SUNSHINE Dec 2016 83% ARIZONA SUNSHINE DEAD MAN DU May 2018 *76% EMBRACER+ VERTIGOSTUDIOS GROUP ARIZONA SUNSHINE THE DAMNED DLC Oct 2019 73% WORLD OF DIVING 2014 SKYWORLD Oct 2017 52% Apr 2019 81% SKYWORLD KINGDOM BRAWL 88% AFTER THE FALL Largest development project to date. Coming soon. Note: Dates are release dates. Percentages are % positive Steam players. 7#8VERTIGO PUBLISHING Growth opportunity in 3rd party publishing with first mover advantage as the VR market takes off Vertigo Publishing in brief ● ● ● ● ● VR exclusive publishing of Vertigo Studios titles and third party titles Based in Rotterdam, Netherlands 7 dedicated FTES (excl. Vertigo group management) 1.5M units sold in total Offers funding, technical solutions, marketing support, and certified publishing to indie VR developers Currently few third-party VR publishers while demand for these services is assumed to increase as the VR market continues to grow. Portfolio and pipeline Vertigo Studios titles ARIZONA SUNSHINE SKYWORLD SKYWORLD KINGDOM BRAWL EMBRACER+ VERTIGOPUBLISHING GROUP AFTER THE FALL Pipeline Third party titles Fisherman's Tale TRAFFIC JAMS Pipeline PATH'S CRAFT Pipeline Unplugged GUITAR- Pipeline 8#9Vertigo Arcades in brief Leading distributor of Vertigo and third-party VR titles to VR arcade operators globally VERTIGO ARCADES Leading distributor of Vertigo and third party VR titles to VR arcade operators globally, increasingly through proprietary platform Haze VR ● ● ● ● ● ● ● Already available in 700+ locations in 40+ countries Leveraging on Arizona Sunshine success which is the #1 played game in VR arcades 25% of all playtime in Western VR arcades Highly curated content offering of 15-20 titles per arcade 3 dedicated FTEs (excl. Vertigo group management) Haze VR proprietary platform Vertigo Arcades' proprietary platform available for VR arcade operators to access, launch, operate and monetize VR gaming content Already fully operational in 30+ locations in 13 countries ● Growing notably prior to a downturn with the Covid-19 outbreak, starting to pick up again. Selected portfolio titles ARIZONA SUNSHINE SKYWORLD A Fishermans Tale VERTIGOARCADES GROUP ScaryG2 SPACE PIRATE TRAINER ARIZONA SUNSHINE SKYWORLD KINGDOM BRAWL PATROLVE EMBRACER+ Corsair's Curse ISLAND 359. ECLIPSE VR MULTIPLAYER ESCAPE GAME 9#10VR MARKET OVERVIEW Facebook Oculus, PlayStation and Valve/Steam dominates hardware and digital stores Top VR headsets for gaming Oculus Rift S Connects to PC $399 Oculus Quest i Standalone $399 PlayStation VR Connects to PS4/PS5 $299 Valve Index Connects to PC $999 HTC Vive Cosmos Connects PC $699 Top VR digital stores STEAMⓇ ● oculus PlayStation VR Platform cut usually 30% of net sales + Retail Software distributed worldwide * Estimate by Vertigo based on third party market intel reports and indications from market participants. Selection of top VR games HALF-LIFE ALYX ARIZONA SUNSHINE EMBRACER+ GROUP SUPERHOT IJOB SIMULATOR the 2050 archives A STAR WARS VR SERIES VADER IMMORTAL WALKING DEAD SAINTS&SINNERS BEAT SABER The Elder Scrolls V SKYRIM Fallout 4 VR STRESS LEVEL ZERO BONEWORKS 50% of top 10 games are shooters* 10#11VR MARKET - CONTINUOUS GROWTH 2020 Facebook Oculus, PlayStation and Valve/Steam dominates hardware and digital stores ● ● ● ● Current Install Base estimated >10 Million headsets* Console VR: PSVR 5 Million units as of January 2020 (Sony) Standalone VR: Oculus Quest sold 705k in 7 months. “The Quest (including future hardware updates) is expected to be the top-selling VR hardware through at least the end of 2021" (Superdata) PC VR: Valve Index sales more than doubled following Half-Life Alyx announcement, showing a demand for more AAA content AAA IP entering VR market creating excitment & driving overall market EMBRACER+ GROUP * Estimate by Vertigo based on third party market intel reports and indications from market participants. 11#12STANDALONE HEADSET ACCELERATING GROWTH Standalone VR had a big success since 2019, overcoming a major barrier for VR growth (accessibility) Standalone benefits € Freedom and ease of use No PC. No console. Completely wireless. Overall a much more convenient and better experience. Cheap Oculus Quest starts at $399 and requires no (expensive) PC or console. Giftable As it is standalone, easy to use and cheap, it is more giftable than tethered headsets. "Standalone headsets are definitely the future of VR. [...] they're so much more convenient, there's so much easier to use. They're completely wireless, they're much more affordable. It's just an overall much better experience." - Jesse Schell, CEO Schell Games Strong demand for Standalone Headset 2020 Vertigo Net Sales (Standalone) 38% 62% Standalone VR 2021 Vertigo Net Sales (Standalone) +236% YoY "The so-hot-it-won't-stay-in-stock $400 VR headset has been popping in and out of stock for months." - CNET * Estimate by Vertigo based on third party market intel reports and indications from market participants. Facebook Connect: Oculus updates co FACEBOOK LIO EMBRACER+ GROUP Z 2020 Facebook holds its annual Oculus/VR conference "Facebook Connect" on Sep 16, Oculus updates and general VR status and outlook will be presented "Facebook Connect: What to expect from the company's big VR show" - CNET 12#13THE FUTURE Vision: Creating a world-leading VR developer and publisher as the VR market is taking off Growth ambition Headcount Currently Medium term Ambition to substantially grow headcount in the Netherlands in the medium term Sr. management is committed and remains independent /G\ JTP Remaining autonomous within Embracer's wholly owned sub- group Koch Media Management is long-term committed with a substantial earnout package spanning up to 10 years Synergies EMBRACER+ GROUP VERTIGOGAMES KOCH MEDIA EMBRACER GROUP VR potential within Embracer's IP catalog Financial stability to Vertigo Publishing enabling higher investments Publishing knowledge and best practice sharing as Vertigo Publishing grows and the VR market matures 13#14ACQUISITION HIGHLIGHTS AND OPPORTUNITIES 1 2 3 4 5 Early moving VR gaming specialist, well positioned to continue to lead and grow going forward Proven VR track record with Arizona Sunshine success Highly anticipated After the Fall in pipeline Timing is right: VR gaming market set to take off with better headsets, games and investments VR Publishing and VR Arcades opportunities * Estimate by Vertigo based on third party market intel reports and indications from market participants. ● ● ● ● ● ● ● EMBRACER+ GROUP Focusing exclusively on VR gaming for the last seven years and has built a world-class development and publishing team Mgmt is anticipating significant organic growth in the years ahead Bolt on acquisitions opportunity in the VR space Critically acclaimed, million-selling fan-favorite Forth most sold VR game in the last 24 month* Streamer attention with 68M+ views across top 15 videos on YouTube VR-exclusive co-op Action FPS One of the most anticipated AAA VR releases - among few announced Strong validation and support from leading VR platforms Expected growth of installed headset base due to committed platform holders driving the market with better and more accessible hardware Increasing quantity of high-quality content released and announced and higher overall investment in VR games development - increased competition will lead to better games The VR gaming software market is not yet dominated by established companies Currently few players in third-party VR publishing and VR arcade licensing, while demand for these services is assumed to increase as the VR gaming market continues to grow 14#15EMBRACER+ GROUP