Zedge, Inc. (AMEX:ZDGE) Q3 2023 Earnings Call Transcript

Jonathan Reich: Our ad ops team has, and continues to invest significantly in terms of everything having to do with the optimization of our ad inventory. And on a monthly basis, just to give you a frame of reference, we likely run several hundred different tests, where we slice and dice the inventory based upon geography, handset, and various other variables in order to ultimately deliver the best possible CPMs from that ad inventory. And as you know, that’s been a never ending part of our business. And one which we continue to excel at.

Allen Klee: Right. The new name — new game that you’re rolling out? I’m not sure if I got the name, AI, AI Art Master. Could you just tell us a little bit more of, I think it’s a soft launch now, but what the plan is there?

Jonathan Reich: Sure. So AI Art Master is really focused around offering a competitive opportunity for users to create AI images, and then compete to see who has the best AI image around a particular theme. Could be anything from cute pets to next generation automobiles and anything that you can think of. The gameplay is such that we have a small audience competing against each other, over a short duration of time, and users will go in and the core game mechanic is that they will begin voting based upon side by side views of various images specific to that theme. The user that garners the most votes will get ranking. There’s also a meta game associated with that, where the user will be able to open up an art gallery, and the intention is to bring visitors into their art gallery, the more visitors that they bring in, the more credits that they receive, and rank higher, and so on and so forth.

From a monetization perspective, we expect that the game will have a combination of both advertising as well as a token based economy, very much following the trend in mobile gaming, which is this hybrid casual model. And so far as the soft launch, over the course of the last quarter we have and will continue to fine tune, or I should say tune and fine tune the gameplay, while at the same point in time ensuring that we have no bugs or in a potential logical errors in the game. And after that, we will begin to take a look at retention graphs, marketing and seeing to it how do we expand into other markets. We are really working in a very iterative and fast paced environment, taking our learnings in real time in tuning the game and fine tuning the game in order to see to it that when we do go out to commercial launch, that we have a very, very attractive game mechanic, which will ultimately yield a good retention curve, good engagement statistics and opportunities to generate revenue.

Allen Klee: Great. Your offering of pAInt where you can do AI wallpaper generation. Any update on that?

Jonathan Reich: First, so, I think that when you take a look at where we are investing effort, we are very much investing effort company wise in riding the explosive AI market. And, as you’d mentioned, we’ve got pAInt, which is an AI wallpaper image generator. We’ve got the AI Art Master game, we’re also using AI in terms of anything from marketing needs to our tech stack and things of that sort. And we’re one of several companies that are publicly traded that offer an opportunity for investors to benefit from the explosive growth that’s taking place in this market. Specific to pAInt, we are doing several things there. First of all, we are continuing to refine the product, we are improving the onboarding funnel to draw more users in and we are offering users the ability to have a continuum of pAInt opportunities when they become subscribers.