Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | DoubleDown Interactive Co., Ltd. |
Entity Central Index Key | 0001799567 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 2,477,672 |
Entity Voluntary Filers | No |
Entity Interactive Data Current | Yes |
Entity Address, Address Line One | 13F, Gangnam Finance Center |
Entity Address, Address Line Two | 152, Teheran-ro Gangnam-gu |
Entity Address, City or Town | Seoul |
Entity Incorporation, State or Country Code | M5 |
Entity Address, Postal Zip Code | 06236 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Registration Statement | false |
Document Accounting Standard | U.S. GAAP |
Entity File Number | 001-39349 |
ICFR Auditor Attestation Flag | false |
Entity Current Reporting Status | Yes |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 42 |
Auditor Location | Seattle, Washington |
Entity Address, Country | KR |
Business Contact [Member] | |
Document Information [Line Items] | |
Contact Personnel Name | Joseph A. Sigrist |
Entity Address, Address Line One | 605 5th Avenue, Suite 300 |
Entity Address, City or Town | Seattle |
Entity Address, Postal Zip Code | 98104 |
Contact Personnel Fax Number | +1-206-408-1545 |
Entity Address, State or Province | WA |
American Depositary Shares [Member] | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares |
Trading Symbol | DDI |
Security Exchange Name | NASDAQ |
Common Shares [Member] | |
Document Information [Line Items] | |
Title of 12(b) Security | Common Shares, par value |
Security Exchange Name | NASDAQ |
No Trading Symbol Flag | true |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Income Statement [Abstract] | ||||
Revenue | $ 321,027 | $ 363,205 | $ 358,342 | |
Operating expenses: | ||||
Cost of revenue | [1] | 109,305 | 126,612 | 126,255 |
Sales and marketing | [1] | 71,911 | 78,821 | 71,225 |
Research and development | [1] | 18,182 | 18,490 | 18,784 |
General and administrative | [1] | 20,058 | 19,131 | 21,721 |
Loss contingency | [1] | 141,750 | 3,500 | 0 |
Impairment of goodwill and intangibles | [1] | 269,893 | 0 | 0 |
Depreciation and amortization | 3,801 | 17,918 | 31,574 | |
Total operating expenses | 634,900 | 264,472 | 269,559 | |
Operating income (loss) | (313,873) | 98,733 | 88,783 | |
Other income (expense): | ||||
Interest expense | (1,831) | (2,011) | (10,786) | |
Interest income | 4,993 | 208 | 197 | |
Gain on foreign currency transactions | 6,994 | 1,110 | 2,347 | |
Gain (loss) on foreign currency remeasurement, net | (1,179) | 1,920 | (244) | |
Gain (loss) on short-term investments | (152) | 0 | 0 | |
Other, net | (120) | 654 | (5,080) | |
Total other income (expense), net | 8,705 | 1,881 | (13,566) | |
Income (loss) before income tax | (305,168) | 100,614 | 75,217 | |
Income tax (expense) benefit | 71,190 | (22,506) | (21,594) | |
Net income (loss) | (233,978) | 78,108 | 53,623 | |
Other comprehensive income (expense): | ||||
Pension adjustments, net of tax | (154) | (286) | (294) | |
Gain (loss) on foreign currency translation | (3,519) | 504 | 13,676 | |
Comprehensive income (loss) | $ (237,651) | $ 78,326 | $ 67,005 | |
Earnings per share: | ||||
Basic | $ (94.43) | $ 33.91 | $ 29.67 | |
Diluted | $ (94.43) | $ 33.91 | $ 26.2 | |
Weighted average shares outstanding: | ||||
Basic | 2,477,672 | 2,303,200 | 1,807,410 | |
Diluted | 2,477,672 | 2,303,200 | 2,149,114 | |
[1]Excluding depreciation and amortization. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 217,352 | $ 242,060 |
Short-term investments | 67,891 | 0 |
Accounts receivable, net | 21,198 | 21,875 |
Prepaid expenses, and other assets | 6,441 | 6,817 |
Total current assets | 312,882 | 270,752 |
Property and equipment, net | 436 | 384 |
Operating lease right-of-use assets, net | 3,858 | 6,830 |
Intangible assets, net | 35,051 | 53,679 |
Goodwill | 379,072 | 633,965 |
Deferred tax asset | 59,290 | 2,616 |
Other non-current assets | 1,463 | 1,582 |
Total assets | 792,052 | 969,808 |
Current liabilities: | ||
Accounts payable and accrued expenses | 13,830 | 14,752 |
Short-term operating lease liabilities | 3,050 | 3,076 |
Contract liabilities | 2,426 | 2,246 |
Loss Contingency | 95,250 | 0 |
Other current liabilities | 1,926 | 730 |
Total current liabilities | 116,482 | 20,804 |
Long-term borrowings with related party | 39,454 | 42,176 |
Long-term operating lease liabilities | 1,625 | 4,688 |
Deferred tax liabilities, net | 0 | 28,309 |
Loss Contingency | 0 | 3,500 |
Other non-current liabilities | 8,265 | 6,453 |
Total liabilities | 165,826 | 105,930 |
Shareholders' equity | ||
Common stock, KRW 10,000 par value - 200,000,000 Shares authorized; 2,477,672 issued and outstanding | 21,198 | 21,198 |
Additional paid-in-capital | 359,280 | 671,831 |
Accumulated other comprehensive income | 19,360 | 23,033 |
Retained earnings | 226,388 | 147,816 |
Total shareholders' equity | 626,226 | 863,878 |
Total liabilities and shareholders' equity | $ 792,052 | $ 969,808 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - ₩ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Common Stock, Par or Stated Value Per Share | ₩ 10,000 | ₩ 10,000 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 2,477,672 | 2,477,672 |
Common Stock, Shares, Outstanding | 2,477,672 | 2,477,672 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common stock [Member] | Additional paid-in-capital [Member] | Accumulated other comprehensive income/(loss) [Member] | Retained earnings (Deficit) [Member] |
Beginning balance at Dec. 31, 2019 | $ 380,668 | $ 10,603 | $ 344,547 | $ 9,433 | $ 16,085 |
Beginning balance (in shares) at Dec. 31, 2019 | 1,192,725 | ||||
Net Income | 53,623 | 53,623 | |||
Pension adjustments, net of tax | (294) | (294) | |||
Capital investment from parent | 369 | 369 | |||
Gain(loss) on foreign currency translation, net of tax | 13,676 | 13,676 | |||
Exercise of warrants | 64,374 | $ 2,496 | 61,878 | ||
Exercise of warrants (in shares) | 306,539 | ||||
Conversion of convertible bonds | 187,095 | $ 5,825 | 181,270 | ||
Conversion of convertible bonds (in shares) | 715,258 | ||||
Ending balance at Dec. 31, 2020 | 699,511 | $ 18,924 | 588,064 | 22,815 | 69,708 |
Ending balance (in shares) at Dec. 31, 2020 | 2,214,522 | ||||
Net Income | 78,108 | 78,108 | |||
Pension adjustments, net of tax | (286) | (286) | |||
Gain(loss) on foreign currency translation, net of tax | 504 | 504 | |||
Issuance of new shares - IPO | 86,041 | $ 2,274 | 83,767 | ||
Issuance of new shares - IPO (in shares) | 263,150 | ||||
Ending balance at Dec. 31, 2021 | 863,878 | $ 21,198 | 671,831 | 23,033 | 147,816 |
Ending balance (in shares) at Dec. 31, 2021 | 2,477,672 | ||||
Net Income | (233,978) | (233,978) | |||
Pension adjustments, net of tax | (154) | (154) | |||
Gain(loss) on foreign currency translation, net of tax | (3,519) | (3,519) | |||
Reduction of capital reserve | 0 | (312,551) | 312,551 | ||
Ending balance at Dec. 31, 2022 | $ 626,226 | $ 21,198 | $ 359,280 | $ 19,360 | $ 226,388 |
Ending balance (in shares) at Dec. 31, 2022 | 2,477,672 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Cash flow from (used in) operating activities: | ||||
Net Income (loss) | $ (233,978) | $ 78,108 | $ 53,623 | |
Adjustments to reconcile net income to net cash from operating activities: | ||||
Depreciation and amortization | 3,801 | 17,918 | 31,574 | |
Impairment of goodwill and intangibles | [1] | 269,893 | 0 | 0 |
(Gain)Loss on foreign currency remeasurement | 1,179 | (2,082) | 244 | |
(Gain)Loss on short-term investments | 152 | 0 | 0 | |
Deferred taxes | (84,983) | 5,976 | 4,422 | |
Non-cash interest expense on Bonds | 0 | 23 | 5,103 | |
Working capital adjustments: | ||||
Accounts receivable | (46) | 1,638 | (4,099) | |
Prepaid expenses, other current and non-current assets | (142) | (2,950) | (204) | |
Accounts payable, accrued expenses and other payables | (239) | (2,052) | 5,835 | |
Contract liabilities | 180 | (168) | 609 | |
Income tax payable | 0 | (2,838) | 2,689 | |
Loss contingency | 91,750 | 3,500 | 0 | |
Other current and non-current liabilities | 3,224 | (968) | 54 | |
Net cash flows from operating activities | 50,791 | 96,105 | 99,850 | |
Cash flow (used in) investing activities: | ||||
Acquisition of Double8Games Co., Ltd. | 0 | 0 | (1,952) | |
Purchases of intangible assets | (4) | (61) | (6) | |
Purchases of property and equipment | (269) | (207) | (217) | |
Disposals of property and equipment | 26 | 3 | 0 | |
Purchases of short-term investments | (518,629) | (1,541) | 0 | |
Sales of short-term investments | 451,046 | 0 | 0 | |
Net cash flows (used in) investing activities | (67,830) | (1,806) | (2,175) | |
Cash flow from (used in) financing activities: | ||||
Issuance of new shares - IPO | 0 | 86,041 | 0 | |
Repayments of long-term borrowings with related party | 0 | 0 | (42,371) | |
Repayments of short-term senior note | 0 | 0 | (33,897) | |
Net cash flows from (used in) financing activities | 0 | 86,041 | (76,268) | |
Net foreign exchange difference on cash and cash equivalents | (7,669) | (1,468) | (637) | |
Net increase (decrease) in cash and cash equivalents | (24,708) | 178,872 | 20,770 | |
Cash and cash equivalents at beginning of period | 242,060 | 63,188 | 42,418 | |
Cash and cash equivalents at end of period | 217,352 | 242,060 | 63,188 | |
Noncash financing activity: | ||||
Conversion of 2.5% convertible bonds, net of tax | 0 | 0 | 187,095 | |
Conversion of 2.5% non-convertible bonds with warrants, net of tax | 0 | 0 | 64,374 | |
Interest | 0 | 0 | 5,891 | |
Income taxes | $ 15,985 | $ 18,819 | $ 12,546 | |
[1]Excluding depreciation and amortization. |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 | |
Convertible debt [Member] | |
Debt conversion converted instrument rate | 2.50% |
Non-convertible debt [Member] | |
Debt conversion converted instrument rate | 2.50% |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of business | Note 1: Description of business Background and nature of operations DoubleDown Interactive Co., Ltd. (“DDI,” “we,” “us,” “our” or “the Company,” formerly known as The8Games Co., Ltd.) was incorporated in 2008 in Seoul, Korea as an interactive entertainment studio, focused on the development and publishing of casual games and mobile applications. DDI is a subsidiary of DoubleU Games Co., Ltd. (“DUG” or “DoubleU Games”), a Korean company and our controlling shareholder holding 67.1% of our outstanding shares. The remaining 20.2% of our outstanding shares are held by STIC Special Situation Private Equity Fund (“STIC”, 20.2%) and the remainder by participants in our IPO (12.7%). In 2017, DDI acquired DoubleDown Interactive, LLC (“DDI-US”) from International Gaming Technologies (“IGT”) for approximately $825 million. DDI-US, with its principal place of business located in Seattle, Washington, is our primary revenue-generating entity. We develop and publish digital gaming content on various mobile and web platforms through our multi-format interactive all-in-one game experience concept. We host DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox and Undead World within various formats. Initial Public Offering On September 2, 2021, DoubleDown Interactive Co., Ltd. completed its initial public offering (the “Offering”) of 6,316,000 American Depositary Shares (the “ADSs”), each representing 0.05 share of a common share, with par value of ₩10,000 per share, of the Company, at a price to the public of $18.00 per ADS, before underwriting discounts and commissions. The number of ADSs sold by the Company was 5,263,000, and the number of ADSs sold by STIC Special Situation Diamond Limited, the selling shareholder in the Offering (the “Selling Shareholder”), was 1,053,000. The net proceeds to DDI Prior to this offering, there has been no public market for our common shares or ADSs. The ADSs trade on the NASDAQ Stock Market (“NASDAQ”) under the symbol “DDI.” Acquisition of Double8 Games Co., Ltd. (“Double8 Games”) On February 25, 2020, we completed the acquisition of Double8 Games Co., Ltd. (“Double8 Games”) from DoubleU Games in exchange for KRW2.3 billion. Double8 Games is based in Seoul, Korea, with the primary business of developing digital gaming content for international markets. The acquisition was considered a business combination among entities under common control and, therefore, the transfer of net assets was recorded at their carrying value with all financial information prior to the acquisition adjusted for comparability. Assets acquired and liabilities assumed primarily consist of working capital items, including a right of use asset and lease obligation. The difference between the cash paid and carrying value of the net assets received was recorded as a capital investment from parent. Capital Reserve Reallocation On August 30, 2022 it was announced that a special board of directors meeting convened on August 26, 2022 which resulted in the approval of the reduction of the Company’s capital reserve in the amount of W On December 28, 2022 it was announced that a special board of directors meeting convened on December 28, 2022 which resulted in the approval of the reduction of the Company’s capital reserve in the amount of W |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Note 2: Significant accounting policies Basis of preparation and consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of DDI and its controlled subsidiaries. All significant intercompany transactions, balances and unrealized gains or losses have been eliminated. Use of estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures. We regularly evaluate estimates and assumptions related to provisions for income taxes, revenue recognition, expense accruals, deferred income tax asset valuation allowances, valuation of goodwill and intangibles, and legal contingencies. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and the actual results, future operating results may be affected. Functional currency and translation of financial statements Our functional currency is the Korean Won (“KRW”) and the U.S. Dollar (“dollar,” “USD,” “US$,” or “$”) is the functional currency of our United States subsidiaries. The accompanying consolidated financial statements are presented in USD. The consolidated balance sheets have been translated at the exchange rates prevailing at each balance sheet date. The consolidated statement of comprehensive income and statement of cash flows have been translated using the weighted-average exchange rates prevailing during the periods of each statement. The equity capital is denominated in the functional currency, KRW, and is translated at historical exchange rates. All translation adjustments resulting from translating into the reporting currency are accumulated as a separate component of accumulated other comprehensive income in shareholders’ equity. Gains or losses resulting from foreign currency transactions are included in other income (expense). Intercompany monetary items denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date with the gain or loss arising on translation recorded to other income (expense). Intercompany non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Cash and cash equivalents We consider all money market funds and short-term investments with a maturity of three months or less when acquired to be cash and cash equivalents. Cash and cash equivalents are held by high credit quality financial institutions and balances may exceed limits of federal insurance. We have not experienced any losses resulting from these excess deposits. Financial instruments and concentration of credit risk Financial instruments, which potentially expose us to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and short-term investments. Accounts receivable are recorded and carried at the net invoiced amount, which is net of platform payment processing fees, unsecured, and represent amounts due to us based on contractual obligations where an executed contract exists. We do not require collateral and have not recognized an allowance as management estimates the net receivable is fully collectible. Apple, Inc. (“Apple”), Facebook, Inc. (“Facebook”), and Google, LLC (“Google”) represent significant distribution, marketing, and payment platforms for our games. A substantial portion of our 2022, 2021 and 2020 revenue was generated from players who accessed our games through these platforms and a significant concentration of our accounts receivable balance is comprised of balances owed to us by these platforms. The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable: Revenue Concentration Year ended December 31, Accounts Receivable Concentration as of December 31, 2022 2021 2020 2022 2021 2020 Apple 54.4 % 51.8 % 50.8 % Apple 55.8 % 55.6 % 54.1 % Facebook 24.1 % 25.9 % 27.3 % Facebook 20.4 % 23.7 % 25.9 % Google 18.7 % 19.1 % 18.9 % Google 17.7 % 17.5 % 16.8 % Fair value measurements Fair value is defined as an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The three-tiered fair value hierarchy that prioritizes the inputs based on the observability as of the measurement date is as follows: Level 1 – Observable inputs for identical assets or liabilities, such as quoted prices in active markets; Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; Level 3 – Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities being measured within the fair value hierarchy. See Note 6 Goodwill and indefinite-lived intangible assets Goodwill is assigned to our reporting unit that is expected to benefit from the synergies of the business combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of October 1, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to the carrying value. An impairment charge is recorded based on the excess of the reporting unit’s carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired. We generally base our measurement of fair value of our subject reporting unit on a blended analysis of the present value of future discounted cash flows and market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that we expect the reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit. In our evaluation of our indefinite-lived intangible assets, we typically first perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of indefinite-lived intangible assets over their fair value, if necessary. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of trade name and trademarks, using the relief-from-royalty method. This method assumes that the trade name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. As with goodwill, periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the indefinite-lived intangible asset is more likely than not impaired. After completing our annual impairment reviews for the reporting unit during the fourth quarter of 2022, 2021 and 2020, we concluded that a $269.9 million impairment of goodwill and intangibles, of which $15.0 million related to our trademarks and $254.9 million related to our goodwill Finite-lived intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The carrying value of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Finite-lived intangible assets are amortized over their useful economic life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows from use and eventual disposition of the asset over its remaining economic life to its carrying value. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated statements of operations in depreciation and amortization. Development costs Development costs for new app development are capitalized and recognized as an intangible asset when the preliminary development stage has been completed, management commits to funding the project, it is probable that the project will be completed, and the software will be used for its intended function. Following initial recognition of the development costs as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in depreciation and amortization. Revenue recognition Our social and mobile apps operate on a free-to-play model, whereby game players may collect virtual currency free of charge through the passage of time or through targeted marketing promotions. If a game player wishes to obtain virtual currency above and beyond the level of free virtual currency available to that player, the player may purchase additional virtual currency. Once a purchase is completed, the virtual currency is deposited into the player’s account and is not separately identifiable from previously purchased virtual currency or virtual currency obtained by the game player for free. Once obtained, virtual currency (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than gameplay within our apps. When virtual currency is played on any of our games, the game player could “win” and would be awarded additional virtual currency or could “lose” and lose the future use of that virtual currency. We have concluded that our virtual currency represents consumable goods, because the game player does not receive any additional benefit from the games and is not entitled to any additional rights once the virtual currency is substantially consumed. Control transfers when the virtual currency is consumed for gameplay. We recognize revenue from player purchases of virtual currency based on the consumption of this currency. We determined through a review of play behavior that game players generally do not purchase additional virtual currency until their existing virtual currency balances, regardless of source (e.g., bonus currency, gifted currency through social media channels, daily free chips, etc.), have been substantially consumed. Based on an analysis of customers’ historical play behavior, purchase behavior, and the amount of virtual currency outstanding, we are able to estimate the rate that virtual currency is consumed during gameplay. Accordingly, revenue is recognized using a user-based revenue model with the period between purchases representing the timing difference between virtual currency purchase and consumption. This timing difference is relatively short. We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue recognition. We generate a small portion of our revenue from subscription services. All monthly subscription fees are prepaid and non-refundable for a one-month period and auto-renew until the end customer terminates the service with the platform provider the subscription services originated. The subscription revenue is recognized on a daily basis beginning on the original date of purchase and has no impact on a customer purchased virtual currency. Disaggregation of revenue We believe disaggregation of our revenue based on platform and geographical location are appropriate categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following table represents our disaggregation of revenue between mobile and web platforms (in thousands): Year ended December 31, 2022 2021 2020 Mobile $ 241,915 $ 264,911 $ 257,405 Web 79,112 98,294 100,937 Total $ 321,027 $ 363,205 $ 358,342 The following table presents our revenue disaggregated based on the geographical location of our players (in thousands): Year ended December 31, 2022 2021 2020 U.S. (1) $ 282,016 $ 317,605 $ 309,211 International 39,011 45,600 49,131 Total $ 321,027 $ 363,205 $ 358,342 (1) Geographic location is presented as being derived from the U.S. when data is not available Principal-agent considerations Our revenue contracts are with game players who are our customers. We have exclusive control over all content, pricing, and overall functionality of games accessed by players. Our games are played on various third-party platforms for which the platform providers collect proceeds from our customers and remit us an amount after deducting a fee for processing and other agency services. We record revenue at the gross amount charged to our customers and classify fees paid to platform providers (such as Apple, Facebook, and Google) within cost of revenue. Contract assets, contract liabilities and other disclosures Customer payments are based on the payment terms established in our contracts. Payments for purchase of virtual currency are required at time of purchase, are non-refundable and relate to non-cancellable contracts that specify our performance obligations. All payments are initially recorded as revenue, as the player has no right of return after the purchase, consistent with our standard terms and conditions. Based on our analysis, at each period end, we estimate the number of days to consume virtual currency. This represents the revenue amount where the performance obligation has not been met and is deferred as a contract liability until we satisfy the obligation. The contract asset consists of platform fees for which revenue has not been recognized. For subscription revenue, the remaining portion of the daily ratable monthly subscription is recorded as a contract liability and the applicable platform fees as a contract asset. The following table summarized our opening and closing balances in contract assets and contract liabilities (in thousands): Year ended December 31, 2022 2021 2020 Contract assets (1) $ 728 $ 674 $ 718 Contract liabilities 2,426 2,246 2,393 (1) Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet. Cost of revenue Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate social gaming revenue. Such costs are recorded as incurred, and primarily consist of fees withheld by our platform providers from the player proceeds received by the platform providers on our behalf, hosting fees, and royalties. Depreciation and amortization expense is excluded from cost of revenue and other operating expenses and is separately presented on the consolidated statements of operations. Defined benefit pension plan We operate a defined benefit pension plan under employment regulations in Korea. The plan services the employees located in Seoul and is a final wage-based pension plan, which provides a specified amount of pension benefit based on length of service. The service cost components of the net periodic benefit costs are charged to current operations based on the functional area of the employee. The total benefit obligation of $4.0 million, $3.4 million, and $2.8 million was included in other non-current liabilities as of December 31, 2022, 2021 and 2020, respectively, and the change in actuarial ga i The following table summarizes the components of the projected benefit obligation (in thousands): As of December 31, 2022 2021 2020 Projected benefit obligation at beginning of year 3,351 2,792 1,882 Service cost 838 759 738 Interest expense (51 ) 29 30 Actuarial (gain)/loss 157 289 492 Benefits paid (64 ) (543 ) (400 ) Other 0 254 (273 ) Foreign currency translation adjustment (217 ) (229 ) 323 Projected benefit obligation at end of year 4,014 3,351 2,792 The plan assets are held in a limited number of marketable and liquid financial instruments and totaled $3.5 million, $3.4 million and $0 at December 31, 2022, 2021 and 2020, respectively. Valuation adjustments were not material. Defined contribution plan We sponsor a defined contribution plan for our employees based in Seattle, Washington. We provide a matching contribution of 100% on the first 1% of employee contributions and 50% on the next 5% of employee contributions. Our contribution expense for the years ended December 31, 2022, 2021 and 2020 was approximately $259,000, $289,000, and $467,000 respectively. Advertising costs The cost of advertising is expensed as incurred and totaled $67.9 million, $74.2 million and $61.8 million for the years ended December 31, 2022, 2021 and 2020 respectively. Advertising costs primarily consist of marketing and player acquisition and retention costs and are included in sales and marketing expenses. Research and development Research and development costs relate primarily to employee costs associated with in-app game development, feature design and enhancement, and engagement functionality that does not meet our internal-use software capitalization criteria. These costs are expensed as incurred. Income taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates in the period in which they reverse. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” standard, no tax benefit is recorded. Statutory withholding tax is recognized in income tax expense as incurred. Segment information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, our Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. We view our operations and manage our business as one operating segment. |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Investments [Abstract] | |
Short-term investments | Note 3: Short-term investments The Company holds investments in marketable securities with the intention of selling these investments within a relatively short period of time (3-6 months). As such, gains or losses from holding or trading these securities were recognized in the Statements of Income. At December 31, 2022, short term investments were comprised of fixed time deposits classified as trading. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | Note 4: Goodwill and intangible assets The majority of our intangible assets consist of assets acquired through the 2017 acquisition of DDI-US. Based primarily on a reconciliation of our fair value to our market capitalization, we recognized a $269.9 million impairment of goodwill and intangibles in 2022 and no changes to the carrying value of goodwill during 2021 or 2020 (See Note 2: Significant accounting policies). The components of our intangible assets were as follows (in thousands): December 31, 2022 December 31, 2021 Useful life Gross Accumulated Impairment Net Gross Accumulated Net Goodwill indefinite $ 633,965 $ — $ (254,893 ) $ 379,072 $ 633,965 $ — $ 633,965 Trademarks indefinite 50,000 — (15,000 ) 35,000 $ 50,000 $ — 50,000 Customer relationships 4 years 75,000 (75,000 ) — — 75,000 (75,000 ) — Purchased technology 5 years 45,423 (45,423 ) — — 45,423 (41,811 ) 3,612 Development costs 3 years 9,486 (9,486 ) — — 9,486 (9,486 ) — Software 4 years 2,462 (2,411 ) — 51 2,463 (2,396 ) 67 Total $ 816,336 $ (132,320 ) $ (269,893 ) $ 414,123 $ 816,337 $ (128,693 ) $ 687,644 Amortization expense for the years ended December 31, 2022, 2021 and 2020 totaled $3.6 million, $17.7 million, and $31.3 million respectively. Future amortization expense is not material. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 5: Debt The components of debt at December 31, 2022 and 2021 are as follows (in thousands): As of December 31, 2022 2021 4.60% Senior Notes due to related party due 2024 $ 39,454 $ 42,176 Total debt 39,454 42,176 Less: Short-term debt — — Total Long-term debt $ 39,454 $ 42,176 3.50% Senior Notes due to related party paid in 2020 We previously held a 3.5% Senior Note due to a related party that required quarterly interest 4.60% Senior Notes due to related party due 2024 The 4.60% Senior Notes due to related party, which collectively total KRW 100 billion at inception, accrue 4.60 % interest quarterly on the outstanding principal amount until maturity. Interest and principal are due in full at maturity ( May 27, 2024 ). Voluntary principal and interest payments were made in June and September 2020. Principal of KRW 20 billion and interest of KRW 1.2 billion was paid in June 2020 and principal of KRW 30 billion and interest of KRW 3.1 billion was paid in September 2020. Bonds 2.5% Convertible Bonds At various dates in May and June 2020, STIC, as holder of the 2.5% Convertible Bonds, exercised its right to convert all outstanding bonds into 715,258 common shares. In connection with these transactions, we paid STIC the accrued coupon interest of $0.9 million and the unpaid yield-to-maturity interest of $4.5 million was forfeited. The conversion of the 2.5% Convertible Bonds was in accordance with the original terms of the instruments and were not subject to an inducement offer to convert as the terms of the conversion were not modified. As a result, the carrying value of the 2.5 % Convertible Bonds, plus the forfeited yield-to-maturity interest, net of related income tax effects, of KRW 229.7 billion with KRW 7.2 billion recorded to common shares and KRW 222.5 billion was recorded to additional paid-in-capital with no gain or loss recognized. 2.5% Non-convertible bonds and detachable warrants On May 15, 2020, DUG exercised its call option right and simultaneously redeemed the 2.5% Non-convertible bonds as consideration to exercise the warrants into 306,539 shares of common stock. In connection with this transaction, we paid DUG the 2.5% accrued but unpaid coupon interest of $0.3 million and the unpaid yield-to-maturity interest of $1.9 million was forfeited and the remaining unaccreted bond discount eliminated. As a result, the carrying value of the 2.5% Non-convertible Bonds with warrants, plus the forfeited yield-to-maturity interest, net of related income tax effects, of KRW 79.0 billion |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 6: Fair value measurements The carrying values of our accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, and short- term borrowings approximate their fair values due to the short-term nature of these instruments. Our cash equivalents (Level 1 of fair value hierarchy of fair value hierarchy fixed time or certificates of deposit with maturity periods greater than 90 days million We record all debt at inception at fair value. We perform subsequent analysis on available data to evaluate the fair value of our borrowing as of the balance sheet date. We rely on credit market data to track interest rates for other entities with similar risk profiles. As of December 31, 2021, we believe the fair value of our senior notes (a Level 3 estimate) approximates carrying value due to the nature of the instruments and the lack of meaningful change to our credit profile. As of December 31, 2022, we believe the fair value of our senior notes (a Level 3 estimate) would be $1.9 million lower do the change in overall increase in interest rates during 2022. We do not believe the difference between carrying value and fair value has changed materially due to foreign exchange exposure or our credit worthiness. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7: Income taxes Income (loss) before income tax consisted of the following (in thousands): Year ended December 31, 2022 2021 2020 US $ (310,483 ) $ 97,918 $ 89,416 Korea 5,315 2,696 (14,199 ) Total income (loss) before income taxes $ (305,168 ) $ 100,614 $ 75,217 The following table presents the detail of income tax expense for the periods presented (in thousands): Year ended December 31, 2022 2021 2020 Current: US $ 11,571 $ 14,481 $ 15,244 Korea 2,222 2,049 1,928 Total current taxes: $ 13,793 $ 16,530 $ 17,172 Deferred: US $ (85,206 ) $ 8,154 $ 5,105 Korea 223 (2,178 ) (683 ) Total deferred taxes $ (84,983 ) $ 5,976 $ 4,422 Total income tax expense (benefit) $ (71,190 ) $ 22,506 $ 21,594 The following table presents a reconciliation of the statutory rate and our effective tax rate for the periods presented: Year ended December 31, 2022 2021 2020 Statutory tax rate 20.0 % 20.0 % 20.0 % Foreign jurisdiction rate differential 3.7 % 3.5 % 3.8 % Non-deductible interest 0.0 % 0.0 % 1.5 % Withholding taxes (0.6 )% 2.0 % 2.3 % Tax credits 1.0 % (4.2 )% (3.5 )% Valuation allowance (0.6 )% 1.6 % 5.0 % Other (0.1 )% (0.6 )% (0.5 )% Total tax rate 23.3 % 22.3 % 28.6 % Deferred federal, state, and foreign income taxes reflect the net tax impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. The following table presents the significant components of our deferred tax assets and liabilities as of the dates presented (in thousands): Year ended December 31, 2022 2021 Deferred income tax assets: Net operating loss carryforward $ 5,934 $ 8,333 Tax credit carryforward 14,171 12,615 Accruals and reserves 35,589 1,584 Accrued interest 762 — Intangibles 17,632 15,643 Goodwill 4,467 — Lease liability 1,120 1,860 Deferred tax assets $ 79,675 $ 40,035 Less: Valuation allowance (18,893 ) (18,112 ) Net deferred tax assets $ 60,782 $ 21,923 Deferred tax liabilities Goodwill $ 0 $ (45,074 ) Right-of-use-assets (1,038 ) (2,162 ) Other (454 ) (379 ) Deferred tax liabilities $ (1,492 ) $ (47,615 ) Net deferred tax assets (liabilities) $ 59,290 $ (25,692 ) Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing, and amount of which are uncertain. We have recorded a valuation allowance against certain Korean deferred tax as of December 31, 2022 and 2021 because, based on the weight of available evidence, it is more likely than not that certain deferred tax assets will not be realized. As of December 31, 2022, we determined that all U.S. deferred tax assets and $2.2 million of Korean deferred tax assets are expected to be realized prior to their expiration. As of December 31, 2022 and 2021 we have Korean tax loss carryforwards of approximately $27.7 million, $39.2 million and $34.4 million, respectively, which are available to reduce future taxable income. These losses begin to expire in 2026. Additionally, we have Korean tax credit carryforwards of $14.2 million a nd We have not recorded a liability for income taxes or withholding taxes on undistributed earnings of subsidiaries as of December 31, 2022 and 2021 as we intend to reinvest such earnings outside of Korea for the foreseeable future. The Company concluded it is not practical to estimate the related deferred tax liability. We are currently not under audit in any tax jurisdiction. We do not have any uncertain tax positions and have not established reserves for tax positions based on estimates of whether, and the extent to which, additional taxes will be due. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Note 8: Shareholders’ equity Common stock We have 200,000,000 total authorized shares at December 31, 2022 and 2021. The par value per share is KRW10,000. Holders of outstanding shares of common stock are entitled to one vote for each share on all matters submitted to a vote of the holders of common stock. Holders of common stock are entitled to receive dividends that are declared by our board of directors out of legally available funds. In the event of a liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in the net assets remaining after payment of liabilities. There are no conversion rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or default. All shares of common stock have equal distribution, liquidation and voting rights, and have no preferences or exchange rights. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 9: Net Income per share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net income per share is computed by dividing net income by the weighted-average number of common shares and dilutive common share equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Dilutive common share equivalents are comprised of warrants and shares issuable under our convertible debt arrangement described in Note 5: Debt. The following table presents the calculation of basic and diluted net income per share (in thousands except share and per share amounts): Year ended December 31, 2022 2021 2020 Numerator: Net income (loss) applicable to common shareholders – basic $ (233,978 ) $ 78,108 $ 53,623 Dilutive effect of assumed conversion of convertible debt — — 2,687 Net income (loss) applicable to common shareholders – diluted $ (233,978 ) $ 78,108 $ 56,310 Year ended December 31, 2022 2021 2020 Denominator: Weighted average shares outstanding - basic 2,477,672 2,303,200 1,807,410 Dilutive effect of assumed conversion of convertible debt — — 295,028 Dilutive effect of assumed conversion of warrants — — 46,676 Weighted average shares outstanding – diluted 2,477,672 2,303,200 2,149,114 Basic net income (loss) per share $ (94.43 ) $ 33.91 $ 29.67 Diluted net income (loss) per share $ (94.43 ) $ 33.91 $ 26.20 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 10: Leases Our operating leases primarily consist of real estate leases for office space and do not have any non-lease components. We do not have any finance leases. Our total variable and short-term lease payments are immaterial for all periods presented. The Seattle, Washington lease originated in July 2012 and consists of 49,375 square feet. In September 2018, the only option to extend, which was effective October 1, 2019, was exercised to extend the term for 61 months. The extended lease will expire in October 2024. The Gangnam-gu, Seoul, Korea office space is subleased from our parent, DUG and consists of 31,636 square feet. The subleases originated in February 2019 and were amended in October 2020 to reflect an overall increase to DUG (sublessor). The subleases will expire in September 2023. Supplemental balance sheet and cash flow information related to operating leases is as follows (in thousands): Year ended December 31, 2022 2021 2020 Operating lease right-of – use asset $ 4,675 $ 7,764 $ 10,864 Accrued rent 817 934 877 Total operating lease right-of-use asset, net $ 3,858 $ 6,830 $ 9,987 Short-term operating lease liabilities 3,050 3,076 3,033 Long-term operating lease liabilities 1,625 4,688 7,831 Total operating lease liabilities $ 4,675 $ 7,764 $ 10,864 Supplemental cash flow information related to leases was as follows (in thousands): Year e 2022 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 3,253 $ 3,262 $ 3,200 Maturities of lease liabilities are as follows (in thousands): As of December 31, 2022 Seattle Lease Seoul Lease (Related Party) 2023 2,037 1,092 2024 1,732 — 2025 — — 2026 — — As of December 31, 2022 Seattle Lease Seoul Lease (Related Party) Thereafter — — Less: Imputed Interest (160 ) (26 ) Total 3,609 1,066 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | Note 11: Accumulated other comprehensive income Changes in accumulated other comprehensive income (AOCI) by component for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands): Currency Defined Benefit Total Balance at January 1, 2020 $ 10,131 $ (698 ) $ 9,433 Foreign currency translation gain/(loss) 13,676 — 13,676 Actuarial gain/(loss), net of tax — (294 ) (294 ) Balance as of December 31, 2020 $ 23,807 $ (992 ) $ 22,815 Foreign currency translation gain/(loss) 504 — 504 Actuarial gain/(loss), net of tax — (286 ) (286 ) Balance as of December 31, 2021 $ 24,311 $ (1,278 ) $ 23,033 Foreign currency translation gain/(loss) (3,519 ) — (3,519 ) Actuarial gain/(loss), net of tax — (154 ) (154 ) Balance as of December 31, 2022 $ 20,792 $ (1,432 ) $ 19,360 For years ended December 31, 2022, 2021 and 2020, we did not tax effect foreign currency translation gain/(loss) because we have determined such gain/(loss) is permanently reinvested and actuarial gain/(loss) is not tax effected due to a valuation allowance applied to our deferred tax assets. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 12: Commitments and contingencies Legal contingencies On April 12, 2018, a class-action lawsuit was filed against DDI-US demanding a return of unfair benefit under the pretext that the Company’s social casino games are not legal in the State of Washington, United States. Similar class-action lawsuits were concurrently filed with certain of our competitors, certain of which, announced settlements which the court has recently approved. On April 25, 2021, plaintiffs filed their Second Amended Complaint, changing their allegations to include an additional corporate entity of co-defendant, IGT. IGT tendered its defense of the lawsuit to DDI-US and sought indemnity for any damages from the lawsuit, based on various agreements associated with IGT’s sale of DDI-US. DDI-US had previously tendered its defense to IGT and sought indemnity from it. On August 29, 2022, per the parties’ stipulation notifying the court of a proposed class wide settlement for $415,000,000 with both DDI-US and IGT, the court stayed the case until October 21, 2022, in order to effectuate the proposed settlement. On the same date, DDI-US entered into an agreement in principle to settle the Benson million, respectively, to the settlement fund. This agreement in principle is pending final court approval to date with final resolution and payment expected in 2023. As of December 31, 2022, the Company has an aggregate accrual of $ 145.25 Publishing and license agreements DoubleU Games We entered into the DoubleU Games License Agreement on March 7, 2018, and it was subsequently amended on July 1, 2019 and November 27, 2019. Pursuant to the DoubleU Games License Agreement, DoubleU Games grants us an exclusive license to develop and distribute certain DoubleU Games social casino game titles and sequels thereto in the social online game field of use. We are obligated to pay a royalty license fee to DoubleU Games in connection with these rights, with certain customary terms and conditions. The agreement remains in effect until either DUG no longer holds an interest, directly or indirectly, in DDI, or DDI no longer holds an interest, directly or indirectly, in DDI-US. In such event, the agreement provides that the parties will mutually renegotiate the terms of the agreement. As of December 31, 2022, we licensed approximately 48 game titles under the terms of this agreement. International Gaming Technologies (“IGT”) In 2017, we entered into a Game Development, Distribution, and Services Agreement with IGT. Under the terms of the agreement, IGT will deliver game assets so that the we can port (a process of converting the assets into functioning slot games by platform) the technology for inclusion in our gaming apps. The agreement includes game assets that are used to create new games. Under the agreement, we paid IGT an initial royalty rate of 10% of revenue for their proprietary assets and 15% of revenue for third-party game asset types. Effective January 1, 2019, we amended the agreement to revise the royalty rate for proprietary game asset types to 7.5% of revenue. The initial term of the agreement is ten (10) years with up to two additional five-year periods. Costs incurred in connection with this agreement for the years ended December 31, 2022 and 2021 totaled $7.0 million and $11.1 million, respectively, and are recognized as a component of cost of revenue. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 13: Related party transactions Our related party transactions comprise of expenses for use of intellectual property, borrowings, and sublease previously described. We may also incur other expenses with related parties in the ordinary course of business, which are included in the consolidated financial statements. The following is a summary of expenses charged by our parent, DoubleU Games (in thousands): Year ended December 31, Statement of Income and Comprehensive 2022 2021 2020 Royalty expense (see Note 12) $ 3,374 $ 4,335 $ 3,015 Cost of revenue Interest expense (see Note 5) 1,780 2,010 3,106 Interest expense Rent expense (see Note 10) 1,251 1,397 1,461 General and administrative expense Other expense 225 206 155 General and administrative expense Amounts due to our parent, DoubleU Games, are as follows (in thousands): Year ended December 31, Statement of Consolidated Balance Sheet Line Item 2022 2021 2020 4.6% Senior Notes with related party $ 39,454 $ 42,176 $ 45,956 Long-Term borrowing with related party Royalties and other expenses 315 511 3,631 A/P and accrued expenses Short-term lease liability 1,066 1,309 1,399 Short-term operating lease liabilities Accrued interest on 4.6% Senior Notes with related party 7,852 6,454 4,918 Other non-current labilities Long-term lease liability — 1,078 2,454 Long-term lease liabilities |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 14: Subsequent Event In January 2023, we entered into a Share Purchase Agreement to acquire SuprNation AB (“SuprNation”), a European-based i-gaming company providing differentiated casino gaming experiences, for a cash consideration of approximately €33 million, on a cash free and debt free basis and subject to final review of SuprNation’s financial results of 2022. SuprNation operates in certain regulated European markets with gaming licenses in jurisdictions including Sweden, Great Britain, Malta and the Isle of Man, and its flagship title, Duelz.com |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of preparation and consolidation | Basis of preparation and consolidation The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of DDI and its controlled subsidiaries. All significant intercompany transactions, balances and unrealized gains or losses have been eliminated. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures. We regularly evaluate estimates and assumptions related to provisions for income taxes, revenue recognition, expense accruals, deferred income tax asset valuation allowances, valuation of goodwill and intangibles, and legal contingencies. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and the actual results, future operating results may be affected. |
Functional currency and translation of financial statements | Functional currency and translation of financial statements Our functional currency is the Korean Won (“KRW”) and the U.S. Dollar (“dollar,” “USD,” “US$,” or “$”) is the functional currency of our United States subsidiaries. The accompanying consolidated financial statements are presented in USD. The consolidated balance sheets have been translated at the exchange rates prevailing at each balance sheet date. The consolidated statement of comprehensive income and statement of cash flows have been translated using the weighted-average exchange rates prevailing during the periods of each statement. The equity capital is denominated in the functional currency, KRW, and is translated at historical exchange rates. All translation adjustments resulting from translating into the reporting currency are accumulated as a separate component of accumulated other comprehensive income in shareholders’ equity. Gains or losses resulting from foreign currency transactions are included in other income (expense). Intercompany monetary items denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date with the gain or loss arising on translation recorded to other income (expense). Intercompany non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. |
Cash and cash equivalents | Cash and cash equivalents We consider all money market funds and short-term investments with a maturity of three months or less when acquired to be cash and cash equivalents. Cash and cash equivalents are held by high credit quality financial institutions and balances may exceed limits of federal insurance. We have not experienced any losses resulting from these excess deposits. |
Financial instruments and concentration of credit risk | Financial instruments and concentration of credit risk Financial instruments, which potentially expose us to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and short-term investments. Accounts receivable are recorded and carried at the net invoiced amount, which is net of platform payment processing fees, unsecured, and represent amounts due to us based on contractual obligations where an executed contract exists. We do not require collateral and have not recognized an allowance as management estimates the net receivable is fully collectible. Apple, Inc. (“Apple”), Facebook, Inc. (“Facebook”), and Google, LLC (“Google”) represent significant distribution, marketing, and payment platforms for our games. A substantial portion of our 2022, 2021 and 2020 revenue was generated from players who accessed our games through these platforms and a significant concentration of our accounts receivable balance is comprised of balances owed to us by these platforms. The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable: Revenue Concentration Year ended December 31, Accounts Receivable Concentration as of December 31, 2022 2021 2020 2022 2021 2020 Apple 54.4 % 51.8 % 50.8 % Apple 55.8 % 55.6 % 54.1 % Facebook 24.1 % 25.9 % 27.3 % Facebook 20.4 % 23.7 % 25.9 % Google 18.7 % 19.1 % 18.9 % Google 17.7 % 17.5 % 16.8 % |
Fair value measurements | Fair value measurements Fair value is defined as an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The three-tiered fair value hierarchy that prioritizes the inputs based on the observability as of the measurement date is as follows: Level 1 – Observable inputs for identical assets or liabilities, such as quoted prices in active markets; Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; Level 3 – Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities being measured within the fair value hierarchy. See Note 6 |
Goodwill and indefinite-lived intangible assets | Goodwill and indefinite-lived intangible assets Goodwill is assigned to our reporting unit that is expected to benefit from the synergies of the business combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of October 1, or more frequently, if events and circumstances indicate impairment may have occurred. In the evaluation of goodwill for impairment, we typically perform a quantitative assessment and compare the fair value of the reporting unit to the carrying value. An impairment charge is recorded based on the excess of the reporting unit’s carrying amount over its fair value. Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired. We generally base our measurement of fair value of our subject reporting unit on a blended analysis of the present value of future discounted cash flows and market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that we expect the reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit. In our evaluation of our indefinite-lived intangible assets, we typically first perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of indefinite-lived intangible assets over their fair value, if necessary. We base our measurement of fair value of indefinite-lived intangible assets, which primarily consist of trade name and trademarks, using the relief-from-royalty method. This method assumes that the trade name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. As with goodwill, periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the indefinite-lived intangible asset is more likely than not impaired. After completing our annual impairment reviews for the reporting unit during the fourth quarter of 2022, 2021 and 2020, we concluded that a $269.9 million impairment of goodwill and intangibles, of which $15.0 million related to our trademarks and $254.9 million related to our goodwill |
Finite-lived intangible assets | Finite-lived intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The carrying value of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Finite-lived intangible assets are amortized over their useful economic life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows from use and eventual disposition of the asset over its remaining economic life to its carrying value. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated statements of operations in depreciation and amortization. |
Development costs | Development costs Development costs for new app development are capitalized and recognized as an intangible asset when the preliminary development stage has been completed, management commits to funding the project, it is probable that the project will be completed, and the software will be used for its intended function. Following initial recognition of the development costs as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in depreciation and amortization. |
Revenue recognition | Revenue recognition Our social and mobile apps operate on a free-to-play model, whereby game players may collect virtual currency free of charge through the passage of time or through targeted marketing promotions. If a game player wishes to obtain virtual currency above and beyond the level of free virtual currency available to that player, the player may purchase additional virtual currency. Once a purchase is completed, the virtual currency is deposited into the player’s account and is not separately identifiable from previously purchased virtual currency or virtual currency obtained by the game player for free. Once obtained, virtual currency (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than gameplay within our apps. When virtual currency is played on any of our games, the game player could “win” and would be awarded additional virtual currency or could “lose” and lose the future use of that virtual currency. We have concluded that our virtual currency represents consumable goods, because the game player does not receive any additional benefit from the games and is not entitled to any additional rights once the virtual currency is substantially consumed. Control transfers when the virtual currency is consumed for gameplay. We recognize revenue from player purchases of virtual currency based on the consumption of this currency. We determined through a review of play behavior that game players generally do not purchase additional virtual currency until their existing virtual currency balances, regardless of source (e.g., bonus currency, gifted currency through social media channels, daily free chips, etc.), have been substantially consumed. Based on an analysis of customers’ historical play behavior, purchase behavior, and the amount of virtual currency outstanding, we are able to estimate the rate that virtual currency is consumed during gameplay. Accordingly, revenue is recognized using a user-based revenue model with the period between purchases representing the timing difference between virtual currency purchase and consumption. This timing difference is relatively short. We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue recognition. We generate a small portion of our revenue from subscription services. All monthly subscription fees are prepaid and non-refundable for a one-month period and auto-renew until the end customer terminates the service with the platform provider the subscription services originated. The subscription revenue is recognized on a daily basis beginning on the original date of purchase and has no impact on a customer purchased virtual currency. Disaggregation of revenue We believe disaggregation of our revenue based on platform and geographical location are appropriate categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following table represents our disaggregation of revenue between mobile and web platforms (in thousands): Year ended December 31, 2022 2021 2020 Mobile $ 241,915 $ 264,911 $ 257,405 Web 79,112 98,294 100,937 Total $ 321,027 $ 363,205 $ 358,342 The following table presents our revenue disaggregated based on the geographical location of our players (in thousands): Year ended December 31, 2022 2021 2020 U.S. (1) $ 282,016 $ 317,605 $ 309,211 International 39,011 45,600 49,131 Total $ 321,027 $ 363,205 $ 358,342 (1) Geographic location is presented as being derived from the U.S. when data is not available Principal-agent considerations Our revenue contracts are with game players who are our customers. We have exclusive control over all content, pricing, and overall functionality of games accessed by players. Our games are played on various third-party platforms for which the platform providers collect proceeds from our customers and remit us an amount after deducting a fee for processing and other agency services. We record revenue at the gross amount charged to our customers and classify fees paid to platform providers (such as Apple, Facebook, and Google) within cost of revenue. Contract assets, contract liabilities and other disclosures Customer payments are based on the payment terms established in our contracts. Payments for purchase of virtual currency are required at time of purchase, are non-refundable and relate to non-cancellable contracts that specify our performance obligations. All payments are initially recorded as revenue, as the player has no right of return after the purchase, consistent with our standard terms and conditions. Based on our analysis, at each period end, we estimate the number of days to consume virtual currency. This represents the revenue amount where the performance obligation has not been met and is deferred as a contract liability until we satisfy the obligation. The contract asset consists of platform fees for which revenue has not been recognized. For subscription revenue, the remaining portion of the daily ratable monthly subscription is recorded as a contract liability and the applicable platform fees as a contract asset. The following table summarized our opening and closing balances in contract assets and contract liabilities (in thousands): Year ended December 31, 2022 2021 2020 Contract assets (1) $ 728 $ 674 $ 718 Contract liabilities 2,426 2,246 2,393 (1) Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet. |
Cost of revenue | Cost of revenue Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate social gaming revenue. Such costs are recorded as incurred, and primarily consist of fees withheld by our platform providers from the player proceeds received by the platform providers on our behalf, hosting fees, and royalties. Depreciation and amortization expense is excluded from cost of revenue and other operating expenses and is separately presented on the consolidated statements of operations. |
Defined benefit pension plan | Defined benefit pension plan We operate a defined benefit pension plan under employment regulations in Korea. The plan services the employees located in Seoul and is a final wage-based pension plan, which provides a specified amount of pension benefit based on length of service. The service cost components of the net periodic benefit costs are charged to current operations based on the functional area of the employee. The total benefit obligation of $4.0 million, $3.4 million, and $2.8 million was included in other non-current liabilities as of December 31, 2022, 2021 and 2020, respectively, and the change in actuarial ga i The following table summarizes the components of the projected benefit obligation (in thousands): As of December 31, 2022 2021 2020 Projected benefit obligation at beginning of year 3,351 2,792 1,882 Service cost 838 759 738 Interest expense (51 ) 29 30 Actuarial (gain)/loss 157 289 492 Benefits paid (64 ) (543 ) (400 ) Other 0 254 (273 ) Foreign currency translation adjustment (217 ) (229 ) 323 Projected benefit obligation at end of year 4,014 3,351 2,792 The plan assets are held in a limited number of marketable and liquid financial instruments and totaled $3.5 million, $3.4 million and $0 at December 31, 2022, 2021 and 2020, respectively. Valuation adjustments were not material. |
Defined contribution plan | Defined contribution plan We sponsor a defined contribution plan for our employees based in Seattle, Washington. We provide a matching contribution of 100% on the first 1% of employee contributions and 50% on the next 5% of employee contributions. Our contribution expense for the years ended December 31, 2022, 2021 and 2020 was approximately $259,000, $289,000, and $467,000 respectively. |
Advertising costs | Advertising costs The cost of advertising is expensed as incurred and totaled $67.9 million, $74.2 million and $61.8 million for the years ended December 31, 2022, 2021 and 2020 respectively. Advertising costs primarily consist of marketing and player acquisition and retention costs and are included in sales and marketing expenses. |
Research and development | Research and development Research and development costs relate primarily to employee costs associated with in-app game development, feature design and enhancement, and engagement functionality that does not meet our internal-use software capitalization criteria. These costs are expensed as incurred. |
Income taxes | Income taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates in the period in which they reverse. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” standard, no tax benefit is recorded. Statutory withholding tax is recognized in income tax expense as incurred. |
Segment information | Segment information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, our Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. We view our operations and manage our business as one operating segment. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of percentage of revenues | The following table summarizes the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable: Revenue Concentration Year ended December 31, Accounts Receivable Concentration as of December 31, 2022 2021 2020 2022 2021 2020 Apple 54.4 % 51.8 % 50.8 % Apple 55.8 % 55.6 % 54.1 % Facebook 24.1 % 25.9 % 27.3 % Facebook 20.4 % 23.7 % 25.9 % Google 18.7 % 19.1 % 18.9 % Google 17.7 % 17.5 % 16.8 % |
Summary of disaggregation of revenue | The following table represents our disaggregation of revenue between mobile and web platforms (in thousands): Year ended December 31, 2022 2021 2020 Mobile $ 241,915 $ 264,911 $ 257,405 Web 79,112 98,294 100,937 Total $ 321,027 $ 363,205 $ 358,342 The following table presents our revenue disaggregated based on the geographical location of our players (in thousands): Year ended December 31, 2022 2021 2020 U.S. (1) $ 282,016 $ 317,605 $ 309,211 International 39,011 45,600 49,131 Total $ 321,027 $ 363,205 $ 358,342 (1) Geographic location is presented as being derived from the U.S. when data is not available |
Summary of contract assets and contract liabilities | The following table summarized our opening and closing balances in contract assets and contract liabilities (in thousands): Year ended December 31, 2022 2021 2020 Contract assets (1) $ 728 $ 674 $ 718 Contract liabilities 2,426 2,246 2,393 (1) Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet. |
Summary of projected benefit obligation | The following table summarizes the components of the projected benefit obligation (in thousands): As of December 31, 2022 2021 2020 Projected benefit obligation at beginning of year 3,351 2,792 1,882 Service cost 838 759 738 Interest expense (51 ) 29 30 Actuarial (gain)/loss 157 289 492 Benefits paid (64 ) (543 ) (400 ) Other 0 254 (273 ) Foreign currency translation adjustment (217 ) (229 ) 323 Projected benefit obligation at end of year 4,014 3,351 2,792 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of intangible assets | The majority of our intangible assets consist of assets acquired through the 2017 acquisition of DDI-US. Based primarily on a reconciliation of our fair value to our market capitalization, we recognized a $269.9 million impairment of goodwill and intangibles in 2022 and no changes to the carrying value of goodwill during 2021 or 2020 (See Note 2: Significant accounting policies). The components of our intangible assets were as follows (in thousands): December 31, 2022 December 31, 2021 Useful life Gross Accumulated Impairment Net Gross Accumulated Net Goodwill indefinite $ 633,965 $ — $ (254,893 ) $ 379,072 $ 633,965 $ — $ 633,965 Trademarks indefinite 50,000 — (15,000 ) 35,000 $ 50,000 $ — 50,000 Customer relationships 4 years 75,000 (75,000 ) — — 75,000 (75,000 ) — Purchased technology 5 years 45,423 (45,423 ) — — 45,423 (41,811 ) 3,612 Development costs 3 years 9,486 (9,486 ) — — 9,486 (9,486 ) — Software 4 years 2,462 (2,411 ) — 51 2,463 (2,396 ) 67 Total $ 816,336 $ (132,320 ) $ (269,893 ) $ 414,123 $ 816,337 $ (128,693 ) $ 687,644 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of long-term debt instruments | The components of debt at December 31, 2022 and 2021 are as follows (in thousands): As of December 31, 2022 2021 4.60% Senior Notes due to related party due 2024 $ 39,454 $ 42,176 Total debt 39,454 42,176 Less: Short-term debt — — Total Long-term debt $ 39,454 $ 42,176 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Income (Loss) Before Income Tax | Income (loss) before income tax consisted of the following (in thousands): Year ended December 31, 2022 2021 2020 US $ (310,483 ) $ 97,918 $ 89,416 Korea 5,315 2,696 (14,199 ) Total income (loss) before income taxes $ (305,168 ) $ 100,614 $ 75,217 |
Summary of the Detail of Income Tax Expense for the Periods | The following table presents the detail of income tax expense for the periods presented (in thousands): Year ended December 31, 2022 2021 2020 Current: US $ 11,571 $ 14,481 $ 15,244 Korea 2,222 2,049 1,928 Total current taxes: $ 13,793 $ 16,530 $ 17,172 Deferred: US $ (85,206 ) $ 8,154 $ 5,105 Korea 223 (2,178 ) (683 ) Total deferred taxes $ (84,983 ) $ 5,976 $ 4,422 Total income tax expense (benefit) $ (71,190 ) $ 22,506 $ 21,594 |
Summary of Reconciliation of the Statutory Rate and Our Effective Tax Rate for the Periods | The following table presents a reconciliation of the statutory rate and our effective tax rate for the periods presented: Year ended December 31, 2022 2021 2020 Statutory tax rate 20.0 % 20.0 % 20.0 % Foreign jurisdiction rate differential 3.7 % 3.5 % 3.8 % Non-deductible interest 0.0 % 0.0 % 1.5 % Withholding taxes (0.6 )% 2.0 % 2.3 % Tax credits 1.0 % (4.2 )% (3.5 )% Valuation allowance (0.6 )% 1.6 % 5.0 % Other (0.1 )% (0.6 )% (0.5 )% Total tax rate 23.3 % 22.3 % 28.6 % |
Summary of Deferred Tax Assets and Liabilities as of the Dates | The following table presents the significant components of our deferred tax assets and liabilities as of the dates presented (in thousands): Year ended December 31, 2022 2021 Deferred income tax assets: Net operating loss carryforward $ 5,934 $ 8,333 Tax credit carryforward 14,171 12,615 Accruals and reserves 35,589 1,584 Accrued interest 762 — Intangibles 17,632 15,643 Goodwill 4,467 — Lease liability 1,120 1,860 Deferred tax assets $ 79,675 $ 40,035 Less: Valuation allowance (18,893 ) (18,112 ) Net deferred tax assets $ 60,782 $ 21,923 Deferred tax liabilities Goodwill $ 0 $ (45,074 ) Right-of-use-assets (1,038 ) (2,162 ) Other (454 ) (379 ) Deferred tax liabilities $ (1,492 ) $ (47,615 ) Net deferred tax assets (liabilities) $ 59,290 $ (25,692 ) |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of the Calculation of Basic and Diluted Net Income Per Share | The following table presents the calculation of basic and diluted net income per share (in thousands except share and per share amounts): Year ended December 31, 2022 2021 2020 Numerator: Net income (loss) applicable to common shareholders – basic $ (233,978 ) $ 78,108 $ 53,623 Dilutive effect of assumed conversion of convertible debt — — 2,687 Net income (loss) applicable to common shareholders – diluted $ (233,978 ) $ 78,108 $ 56,310 Year ended December 31, 2022 2021 2020 Denominator: Weighted average shares outstanding - basic 2,477,672 2,303,200 1,807,410 Dilutive effect of assumed conversion of convertible debt — — 295,028 Dilutive effect of assumed conversion of warrants — — 46,676 Weighted average shares outstanding – diluted 2,477,672 2,303,200 2,149,114 Basic net income (loss) per share $ (94.43 ) $ 33.91 $ 29.67 Diluted net income (loss) per share $ (94.43 ) $ 33.91 $ 26.20 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of Cash Flow Information Related to Operating Leases | Supplemental balance sheet and cash flow information related to operating leases is as follows (in thousands): Year ended December 31, 2022 2021 2020 Operating lease right-of – use asset $ 4,675 $ 7,764 $ 10,864 Accrued rent 817 934 877 Total operating lease right-of-use asset, net $ 3,858 $ 6,830 $ 9,987 Short-term operating lease liabilities 3,050 3,076 3,033 Long-term operating lease liabilities 1,625 4,688 7,831 Total operating lease liabilities $ 4,675 $ 7,764 $ 10,864 Supplemental cash flow information related to leases was as follows (in thousands): Year e 2022 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 3,253 $ 3,262 $ 3,200 |
Summary of Maturities of Lease Liabilities | Maturities of lease liabilities are as follows (in thousands): As of December 31, 2022 Seattle Lease Seoul Lease (Related Party) 2023 2,037 1,092 2024 1,732 — 2025 — — 2026 — — As of December 31, 2022 Seattle Lease Seoul Lease (Related Party) Thereafter — — Less: Imputed Interest (160 ) (26 ) Total 3,609 1,066 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Other Comprehensive Income [Abstract] | |
Summary of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (AOCI) by component for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands): Currency Defined Benefit Total Balance at January 1, 2020 $ 10,131 $ (698 ) $ 9,433 Foreign currency translation gain/(loss) 13,676 — 13,676 Actuarial gain/(loss), net of tax — (294 ) (294 ) Balance as of December 31, 2020 $ 23,807 $ (992 ) $ 22,815 Foreign currency translation gain/(loss) 504 — 504 Actuarial gain/(loss), net of tax — (286 ) (286 ) Balance as of December 31, 2021 $ 24,311 $ (1,278 ) $ 23,033 Foreign currency translation gain/(loss) (3,519 ) — (3,519 ) Actuarial gain/(loss), net of tax — (154 ) (154 ) Balance as of December 31, 2022 $ 20,792 $ (1,432 ) $ 19,360 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Expenses Charged by Our Parent | The following is a summary of expenses charged by our parent, DoubleU Games (in thousands): Year ended December 31, Statement of Income and Comprehensive 2022 2021 2020 Royalty expense (see Note 12) $ 3,374 $ 4,335 $ 3,015 Cost of revenue Interest expense (see Note 5) 1,780 2,010 3,106 Interest expense Rent expense (see Note 10) 1,251 1,397 1,461 General and administrative expense Other expense 225 206 155 General and administrative expense |
Summary of Amounts Due to our Parent | Amounts due to our parent, DoubleU Games, are as follows (in thousands): Year ended December 31, Statement of Consolidated Balance Sheet Line Item 2022 2021 2020 4.6% Senior Notes with related party $ 39,454 $ 42,176 $ 45,956 Long-Term borrowing with related party Royalties and other expenses 315 511 3,631 A/P and accrued expenses Short-term lease liability 1,066 1,309 1,399 Short-term operating lease liabilities Accrued interest on 4.6% Senior Notes with related party 7,852 6,454 4,918 Other non-current labilities Long-term lease liability — 1,078 2,454 Long-term lease liabilities |
Description of Business - Addit
Description of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||||||
Dec. 28, 2022 KRW (₩) | Aug. 30, 2022 KRW (₩) | Sep. 02, 2021 USD ($) | Feb. 25, 2020 KRW (₩) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2022 KRW (₩) shares | Dec. 31, 2021 KRW (₩) shares | Sep. 02, 2021 KRW (₩) shares | Sep. 02, 2021 $ / shares | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Business combination consideration transferred | $ | $ 825,000 | |||||||||||
Common stock, shares Issued | shares | 2,477,672 | 2,477,672 | ||||||||||
Sale Of American Depositary Shares | shares | 5,263,000 | |||||||||||
Proceeds from issuance initial public offering | $ | $ 0 | $ 86,041 | $ 0 | |||||||||
Common Stock, Value, Outstanding | ₩ | ₩ 10,000 | ₩ 10,000 | ||||||||||
Reduction of capital reserve | ₩ 330,000,000,000,000 | ₩ 70,000,000,000,000 | $ 0 | |||||||||
American Depositary Shares [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Entity listing depository receipt ratio | 0.05 | |||||||||||
Common Stock, Value, Outstanding | ₩ | ₩ 10,000 | |||||||||||
IPO [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Proceeds from issuance initial public offering | $ | $ 86,000 | |||||||||||
Payments for underwriting expense | $ | $ 8,700 | |||||||||||
IPO [Member] | American Depositary Shares [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Common stock, shares Issued | shares | 6,316,000 | |||||||||||
Sale of Stock, Price Per Share | $ / shares | $ 18 | |||||||||||
Double8 Games Co., Ltd.[Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Business combination consideration transferred | ₩ | ₩ 2,300,000,000 | |||||||||||
DoubleU Games Co., Ltd.[Member] | Equity Investee [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Equity interest percentage | 67.10% | |||||||||||
STIC Special Situation Private Equity Fund [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Minority interest ownership percentage | 20.20% | |||||||||||
Sale Of American Depositary Shares | shares | 1,053,000 | |||||||||||
International Gaming Technologies [Member] | IPO [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Minority interest ownership percentage | 12.70% | |||||||||||
Stic [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Minority interest ownership percentage | 20.20% |
Significant Accounting Polici_4
Significant Accounting Policies - Summary of Percentage of Revenues (Details) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Concentration | Apple | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 54.40% | 51.80% | 50.80% |
Revenue Concentration | Facebook | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 24.10% | 25.90% | 27.30% |
Revenue Concentration | Google | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 18.70% | 19.10% | 18.90% |
Account Receivable Concentration | Apple | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 55.80% | 55.60% | 54.10% |
Account Receivable Concentration | Facebook | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 20.40% | 23.70% | 25.90% |
Account Receivable Concentration | Google | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 17.70% | 17.50% | 16.80% |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 321,027 | $ 363,205 | $ 358,342 | |
US | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | [1] | 282,016 | 317,605 | 309,211 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 39,011 | 45,600 | 49,131 | |
Mobile | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 241,915 | 264,911 | 257,405 | |
Web | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 79,112 | $ 98,294 | $ 100,937 | |
[1]Geographic location is presented as being derived from the U.S. when data is not available |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract With Customer Asset And Liability [Line Items] | ||||
Contract liabilities | $ 2,426 | $ 2,246 | $ 2,393 | |
Prepaid expenses and other assets | ||||
Contract With Customer Asset And Liability [Line Items] | ||||
Contract assets | [1] | $ 728 | $ 674 | $ 718 |
[1]Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet. |
Significant Accounting Polici_7
Significant Accounting Policies - Summary of Projected Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Projected benefit obligation at beginning of year | $ 3,351 | $ 2,792 | $ 1,882 |
Service cost | 838 | 759 | 738 |
Interest expense (income) | (51) | 29 | 30 |
Actuarial (gain)/loss | 157 | 289 | 492 |
Benefits paid | (64) | (543) | (400) |
Other | 0 | 254 | (273) |
Foreign currency translation adjustment | (217) | (229) | 323 |
Projected benefit obligation at end of year | $ 4,014 | $ 3,351 | $ 2,792 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense |
Significant Accounting Polici_8
Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | ||
Summary Of Significant Accounting Policies [Line Items] | ||||
Impairment of goodwill | $ 0 | $ 0 | ||
Defined contribution expense | $ 259,000 | 289,000 | 467,000 | |
Advertising Expense | $ 67,900,000 | 74,200,000 | 61,800,000 | |
Number of operating segments | segment | 1 | |||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | $ 4,000,000 | 3,400,000 | 2,800,000 | |
Impairment of goodwill and intangibles | [1] | 269,893,000 | 0 | 0 |
Reprting [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Impairment of goodwill and intangibles | 254,900,000 | |||
Trademarks [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Impairment of goodwill and intangibles | 15,000,000 | |||
Marketable [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Plan assets held | 3,500,000 | 3,400,000 | 0 | |
Liquid Financial Instruments [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Plan assets held | $ 3,500,000 | $ 3,400,000 | $ 0 | |
Employee contributions percentage one [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined contribution plan matching contribution percent | 1% | |||
Employee contributions percentage two [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined contribution plan matching contribution percent | 5% | |||
On the one percentage of employee contributions [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined contribution plan matching contribution percent of match | 100% | |||
On the next five percentage of employee contributions [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined contribution plan matching contribution percent of match | 50% | |||
[1]Excluding depreciation and amortization. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 816,336 | $ 816,337 |
Accumulated Amortization | (132,320) | (128,693) |
Impairment | (269,893) | |
Net Amount | $ 414,123 | 687,644 |
Useful life, Goodwill | indefinite | |
Gross amount, Goodwill | $ 633,965 | 633,965 |
Impairment, Goodwill | (254,893) | |
Net Amount, Goodwill | $ 379,072 | 633,965 |
Trademarks [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | indefinite | |
Gross amount | $ 50,000 | 50,000 |
Impairment | (15,000) | |
Net Amount | $ 35,000 | 50,000 |
Customer relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 4 years | |
Gross amount | $ 75,000 | 75,000 |
Accumulated Amortization | (75,000) | (75,000) |
Impairment | 0 | |
Net Amount | $ 0 | 0 |
Purchased technology [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Gross amount | $ 45,423 | 45,423 |
Accumulated Amortization | (45,423) | (41,811) |
Impairment | 0 | |
Net Amount | $ 0 | 3,612 |
Development costs [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | |
Gross amount | $ 9,486 | 9,486 |
Accumulated Amortization | (9,486) | (9,486) |
Impairment | 0 | |
Net Amount | $ 0 | 0 |
Software [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 4 years | |
Gross amount | $ 2,462 | 2,463 |
Accumulated Amortization | (2,411) | (2,396) |
Impairment | 0 | |
Net Amount | $ 51 | $ 67 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 3,600 | $ 17,700 | $ 31,300 | |
Impairment of goodwill and intangibles | [1] | $ 269,893 | $ 0 | $ 0 |
[1]Excluding depreciation and amortization. |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 39,454 | $ 42,176 |
Less: Short-term debt | 0 | |
Total Long-term debt | 39,454 | 42,176 |
4.6% senior notes due to related parties in 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 39,454 | $ 42,176 |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Thousands, ₩ in Billions | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||||
May 15, 2020 USD ($) shares | May 15, 2020 KRW (₩) shares | Sep. 30, 2020 KRW (₩) | Jun. 30, 2020 KRW (₩) | Jun. 30, 2020 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 KRW (₩) | Jan. 01, 2021 | |
Debt Instrument [Line Items] | ||||||||||
Repayment of related party debt | $ | $ 0 | $ 0 | $ 42,371 | |||||||
Debt instrument converted into equity amount stock value | $ | $ 187,095 | |||||||||
2.5% Convertible bonds due 2024 [Member] | Stic [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Accrued coupon interest payable | $ | $ 900 | |||||||||
Coupon yield to maturity return | $ | $ 4,500 | |||||||||
Debt instrument shares issued on conversion | shares | 715,258 | |||||||||
Debt instrument converted into equity amount | ₩ 229.7 | |||||||||
Debt instrument converted into equity amount stock value | 7.2 | |||||||||
Debt instrument converted into equity amount recorded in additional paid in capital | 222.5 | |||||||||
2.5% Non convertible bonds due 2024 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Term | 2020 years | |||||||||
2.5% Non convertible bonds due 2024 [Member] | Stic [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Payment of accrued coupon interest | $ | $ 300 | |||||||||
Forefeiture of unpaid yield to maturity interest | $ | $ 1,900 | |||||||||
Debt instrument converted into equity amount | 79 | |||||||||
Debt instrument converted into equity amount stock value | 3.1 | |||||||||
Debt instrument converted into equity amount recorded in additional paid in capital | ₩ 75.9 | |||||||||
Stock shares issued during the period warrant excercises | shares | 306,539 | 306,539 | ||||||||
3.5% senior notes due in 2020 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible bonds long term rate of interest | 3.50% | |||||||||
Debt instrument terms of interest payment | quarterly interest | |||||||||
4.6% senior notes due to related parties in 2024 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Related party transaction rate of interest | 4.60% | |||||||||
Long term debt instrument maturity date | May 27, 2024 | |||||||||
4.6% senior notes due to related parties in 2024 [Member] | Principal [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of related party debt | ₩ 30 | ₩ 20 | ||||||||
4.6% senior notes due to related parties in 2024 [Member] | Interest [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of related party debt | ₩ 3.1 | ₩ 1.2 | ||||||||
4.6% senior notes due to related parties in 2024 [Member] | Stic [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | ₩ 100 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Investments | $ 67,891 | $ 0 |
Fixed time or certificates of deposit maturity | 90 days | |
Fair value, inputs, level 3 [Member] | Senior Notes [Member] | ||
Fair value of our senior notes | $ 1,900 | |
Money market funds [Member] | Fair value, inputs, level 1 [Member] | ||
Cash Equivalents, at Carrying Value | 217,400 | |
Money market funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Short-Term Investments | $ 67,900 | |
Korean market government bonds [Member] | Fair value, inputs, level 1 [Member] | ||
Cash Equivalents, at Carrying Value | $ 242,100 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income (Loss) Before Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Income loss before income tax [Line Items] | |||
US | $ (310,483) | $ 97,918 | $ 89,416 |
Korea | 5,315 | 2,696 | (14,199) |
Income (loss) before income tax | $ (305,168) | $ 100,614 | $ 75,217 |
Income Taxes - Summary of the D
Income Taxes - Summary of the Detail of Income Tax Expense for the Periods (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
US | $ 11,571 | $ 14,481 | $ 15,244 |
Korea | 2,222 | 2,049 | 1,928 |
Total current taxes: | 13,793 | 16,530 | 17,172 |
Deferred: | |||
US | (85,206) | 8,154 | 5,105 |
Korea | 223 | (2,178) | (683) |
Total deferred taxes | (84,983) | 5,976 | 4,422 |
Total income tax expense (benefit) | $ (71,190) | $ 22,506 | $ 21,594 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of the Statutory Rate and Our Effective Tax Rate for the Periods (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory tax rate | 20% | 20% | 20% |
Foreign jurisdiction rate differential | 3.70% | 3.50% | 3.80% |
Non-deductible interest | 0% | 0% | 1.50% |
Withholding taxes | (0.60%) | 2% | 2.30% |
Tax credits | 1% | (4.20%) | (3.50%) |
Valuation allowance | (0.60%) | 1.60% | 5% |
Other | (0.10%) | (0.60%) | (0.50%) |
Total tax rate | 23.30% | 22.30% | 28.60% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities as of the Dates (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets: | ||
Net operating loss carryforward | $ 5,934 | $ 8,333 |
Tax credit carryforward | 14,171 | 12,615 |
Accruals and reserves | 35,589 | 1,584 |
Accrued interest | 762 | |
Intangibles | 17,632 | 15,643 |
Goodwill | 4,467 | |
Lease liability | 1,120 | 1,860 |
Deferred tax assets | 79,675 | 40,035 |
Less: Valuation allowance | (18,893) | (18,112) |
Net deferred tax assets | 60,782 | 21,923 |
Deferred tax liabilities | ||
Goodwill | 0 | (45,074) |
Right-of-use-assets | (1,038) | (2,162) |
Other | (454) | (379) |
Deferred tax liabilities | (1,492) | (47,615) |
Net deferred tax assets (liabilities) | $ 59,290 | $ (25,692) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred income tax assets net | $ 59,290 | $ 2,616 | |
Tax credit carryforward, amount | $ 27,700 | 39,200 | $ 34,400 |
Tax credit carryforward expiration period | 2026 years | ||
KOREA, REPUBLIC OF | |||
Deferred income tax assets net | $ 2,200 | ||
Foreign tax authority [Member] | |||
Tax credit carryforward, amount | $ 14,200 | $ 12,600 | |
Tax credit carryforward expiration period | 2027 years |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - KRW (₩) | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity Note [Abstract] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, Value, Outstanding | ₩ 10,000 | ₩ 10,000 |
Net Income Per Share - Summary
Net Income Per Share - Summary of the Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income (loss) applicable to common shareholders – basic | $ (233,978) | $ 78,108 | $ 53,623 |
Dilutive effect of assumed conversion of convertible debt | 0 | 0 | 2,687 |
Net income (loss) applicable to common shareholders – diluted | $ (233,978) | $ 78,108 | $ 56,310 |
Denominator: | |||
Weighted average shares outstanding - basic | 2,477,672 | 2,303,200 | 1,807,410 |
Dilutive effect of assumed conversion of convertible debt | 0 | 0 | 295,028 |
Dilutive effect of assumed conversion of warrants | 0 | 0 | 46,676 |
Weighted average shares outstanding – diluted | 2,477,672 | 2,303,200 | 2,149,114 |
Basic net income (loss) per share | $ (94.43) | $ 33.91 | $ 29.67 |
Diluted net income (loss) per share | $ (94.43) | $ 33.91 | $ 26.2 |
Leases - Additional Information
Leases - Additional Information (Details) - ft² ft² in Thousands | 12 Months Ended | ||
Oct. 01, 2019 | Dec. 31, 2022 | Jul. 01, 2012 | |
Seattle [Member] | |||
Area of Land | 49,375 | ||
Lessee, Operating Lease, Renewal Term | 61 months | ||
Lessee Operating Lease Expired Term | 2024-10 | ||
Gangnamgu [Member] | |||
Area of Land | 31,636 | ||
Lessee Operating Sub Lease Expired Term | 2023-09 |
Leases - Summary of Cash Flow I
Leases - Summary of Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease right-of – use asset | $ 4,675 | $ 7,764 | $ 10,864 |
Accrued rent | 817 | 934 | 877 |
Total operating lease right-of-use asset, net | 3,858 | 6,830 | 9,987 |
Short-term operating lease liabilities | 3,050 | 3,076 | 3,033 |
Long-term operating lease liabilities | 1,625 | 4,688 | 7,831 |
Total operating lease liabilities | 4,675 | 7,764 | 10,864 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 3,253 | $ 3,262 | $ 3,200 |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Seattle Lease member | |
2023 | $ 2,037 |
2024 | 1,732 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Less:Imputed Intrest | (160) |
Total | 3,609 |
Seoul Lease Member | |
2023 | 1,092 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Less:Imputed Intrest | (26) |
Total | $ 1,066 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Summary of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ 23,033 | $ 22,815 | $ 9,433 |
Foreign currency translation gain/(loss) | (3,519) | 504 | 13,676 |
Actuarial gain/(loss), net of tax | (154) | (286) | (294) |
Ending balance | 19,360 | 23,033 | 22,815 |
Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 24,311 | 23,807 | 10,131 |
Foreign currency translation gain/(loss) | (3,519) | 504 | 13,676 |
Ending balance | 20,792 | 24,311 | 23,807 |
Defined Benefit Pension Plan [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (1,278) | (992) | (698) |
Actuarial gain/(loss), net of tax | (154) | (286) | (294) |
Ending balance | $ (1,432) | $ (1,278) | $ (992) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Aug. 29, 2022 USD ($) | Dec. 31, 2022 USD ($) titles | Dec. 31, 2021 USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Litigation settlement | $ 415,000,000 | ||||
Litigation settlement, amount awarded from other party | 269,750,000 | ||||
Litigation settlement, amount awarded to other party | $ 145,250,000 | ||||
International Gaming Technologies [Member] | |||||
Percentage of royalty on revenue | 10% | 10% | |||
Long-term purchase commitment, period | 10 years | ||||
Cost of revenue | $ 7,000,000 | $ 11,100,000 | |||
DoubleU Games License Agreement [Member] | |||||
Number of titled games | titles | 48 | ||||
Maximum [Member] | |||||
Loss contingency aggregate accrual | $ 145,250,000 | $ 145,250,000 | |||
Maximum [Member] | International Gaming Technologies [Member] | |||||
Percentage of royalty on revenue | 15% | ||||
Minimum [Member] | |||||
Loss contingency accrual, payments | $ 50,000,000 | ||||
Minimum [Member] | International Gaming Technologies [Member] | |||||
Percentage of royalty on revenue | 7.50% |
Related Party Transactions - Su
Related Party Transactions - Summary of Expenses Charged by Our Parent (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Interest expense | $ 1,831 | $ 2,011 | $ 10,786 |
Cost of sales [Member] | |||
Related Party Transaction [Line Items] | |||
Royalty expense | 3,374 | 4,335 | 3,015 |
Interest expense [Member] | |||
Related Party Transaction [Line Items] | |||
Interest expense | 1,780 | 2,010 | 3,106 |
General and administrative expense [Member] | |||
Related Party Transaction [Line Items] | |||
Rent expense | 1,251 | 1,397 | 1,461 |
Other expenses | $ 225 | $ 206 | $ 155 |
Related Party Transactions - _2
Related Party Transactions - Summary of Amounts Due to our Parent (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of related Party transactions due to our parent [Line Items] | |||
Short-term lease liability | $ 3,050 | $ 3,076 | $ 3,033 |
Long-term lease liability | $ 1,625 | 4,688 | 7,831 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Short-term lease liability | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term lease liability | ||
Short-term operating lease liabilities [Member] | |||
Schedule of related Party transactions due to our parent [Line Items] | |||
Short-term lease liability | $ 1,066 | 1,309 | 1,399 |
Long-term lease liabilities [Member] | |||
Schedule of related Party transactions due to our parent [Line Items] | |||
Long-term lease liability | 0 | 1,078 | 2,454 |
Long-Term borrowing with related party [Member] | |||
Schedule of related Party transactions due to our parent [Line Items] | |||
4.6% Senior Notes with related party | 39,454 | 42,176 | 45,956 |
A/P and accrued expenses [Member] | |||
Schedule of related Party transactions due to our parent [Line Items] | |||
Royalties and other expenses | 315 | 511 | 3,631 |
Other non-current liabilities [Member] | |||
Schedule of related Party transactions due to our parent [Line Items] | |||
Accrued interest on 4.6% Senior Notes with related party | $ 7,852 | $ 6,454 | $ 4,918 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) $ in Thousands, € in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Subsequent Event [Line Items] | ||||
Payments to acquire businesses, gross | $ | $ 0 | $ 0 | $ 1,952 | |
Subsequent Event [Member] | SuprNation [Member] | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire businesses, gross | € | € 33 |