Mr. Jason Bailey reports

EAST SIDE GAMES GROUP REPORTS FOURTH QUARTER 2023 FINANCIAL RESULTS

East Side Games Group Inc. has released financial results for the fourth quarter and year ended Dec. 31, 2023. All amounts are stated on an international financial reporting standard basis unless otherwise indicated.

The company is pleased to announce a strong finish to 2023, marking the most profitable quarter in its history and the fifth consecutive quarter exceeding $2.5-million in adjusted earnings before interest, taxes, depreciation and amortization. The company's focused efforts on profitability throughout the past year, coupled with strategic realignment initiatives, culminated in a robust conclusion to the year. In the fourth quarter, the company achieved revenue of $20.6-million and adjusted EBITDA of $4.5-million, reflecting a 22-per-cent margin.

East Side Games reaffirms its commitment to delivering captivating intellectual-property-driven games tailored to passionate audiences while collaborating with renowned brands in movies, television, toys, music and sports. In 2024, East Side proudly presents a robust lineup of game launches, starting with AEW: Rise to the Top (January, 2024). In second quarter 2024, it anticipates the release of three games, each based on iconic brands. The company also has other titles in active development that utilize new and existing IP partnerships with 2024 and 2025 launch targets.

This year witnessed further development of the new Matchkit framework, with the first game using the framework, Bud Farm: Munchie Match, delivering the strongest retention metrics in the company's 13-year history. East Side will continue developing the Matchkit to scale and bring the same revolution to the Match genre as it did to the Idle genre. It has already soft-launched its second match title, with several more in active development.

East Side continues to experience growth due to the strength of its GameKit framework. It currently has seven LiveOps titles that generate 90 per cent of its revenue, with no single title comprising more than 20 per cent. This diverse position sets it apart from many mobile game companies as most rely on a single title to drive 90 per cent of their revenue.

"Two thousand twenty-three was a difficult year for mobile games and for the tech industry as a whole. It was a year that saw more than 200,000 jobs eliminated, hundreds of companies failing and billions in market cap evaporating. Despite these headwinds and through the resilience of our incredible leadership team, ESGG has been able to keep revenues relatively flat while incrementally increasing profitability and growing our cash reserves -- no small feat and something I am very proud of," said Jason Bailey, chief executive officer of East Side. "Moving forward to 2024, we are seeing markets recover, opportunities present themselves again and the industry quickly recovering. Great things lie ahead for this team and the technological foundation we have built. We remain more committed than ever to our goal of providing creators tools to deliver mobile gaming experiences that engage players every day."

Three months ended Dec. 31, 2023, highlights:

• For the quarter ended Dec. 31, 2023, revenue was $20.6-million.
• Fourth quarter 2023 adjusted EBITDA was $4.5-million, a margin of 22 per cent, the fifth consecutive quarter over $2.5-million.
• Net cash for the company at Dec. 31, 2023, was $5.2-million compared with $3.6-million at third quarter 2023, a 44-per-cent increase.
• The restructure announced in late August, 2023, will result in approximately $5.0-million in annualized operating expense reductions with minimal expected impact on overall revenues. The effect of the reductions completed in August was realized for the full quarter starting Q4 2023.
• Daily active users in Q4 were 248,000. Average revenue per daily active user was 91 cents.
• On Nov. 14, 2023, the company announced a renewal of its normal course issuer bid, authorizing the company to purchase 4,076,819 of its shares. Through Dec. 31, 2023, the company purchased 951,979 shares at an average price of 82 cents. The company continues to buy back stock as restrictions allow.

Certain information provided in this news release is extracted from the consolidated financial statements and management's discussion and analysis of the company for the year ended Dec. 31, 2023, and should be read in conjunction with them. It is only in the context of the fulsome information and disclosures contained in the financial statements and MD&A that an investor can properly analyze this information. The financial statements and MD&A can be found under the company's profile on SEDAR+ and EDGAR.

Webcast and conference call information

The company will hold a conference call to discuss its performance with the investment community at 9 a.m. PT on April 2, 2024. Related earnings release materials can be found on the East Side website.

Webcast and conference call details

A webcast will be available.

Toll-free dial-in number:  1-800-717-1738

Local dial-in number:  1-289-514-5100

Conference ID:  62568

A replay will be available by dialling 1-888-660-6264 or 1-289-819-1325 and entering passcode 62568 followed by the number sign.

About East Side Games Group Inc.

East Side is a leading free-to-play mobile game group, creating engaging games that produce enduring player loyalty. Its studio group entrepreneurial culture is anchored in creativity, execution and growth through licensing of its proprietary GameKit software platform that enables professional game developers to greatly increase the efficiency and effectiveness of game creation in addition to organic growth through a diverse portfolio of original and licensed IP mobile games that include: The Office: Somehow We Manage, Star Trek: Lower Decks -- The Badgey Directive, Bud Farm Idle Tycoon, Doctor Who: Lost in Time, RuPaul's Drag Race Superstar, AEW: Rise to the Top, Cheech and Chong Bud Farm, and Trailer Park Boys: Grea$y Money.

It is headquartered in Vancouver, Canada, and its games are available worldwide on the App Store and Google Play.

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