Super League Enterprise $SLE Unveils SOUNDZ: A Game-Changer For Brand & Artist Engagement On Roblox

Benzinga

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00:00Welcome back, traders and investors, you know what we like to do here at Benzinga, and that

00:06is bring you exciting publicly traded companies. Today, we are with Super League Enterprise

00:12Trading Undertaker SLE on the NASDAQ. I'm here with CEO Anne Hand. Anne, how are you

00:17doing today?

00:18Doing great. Thank you. How are you?

00:21I am good. So before we get into it, do you mind just giving me a brief overview of Super

00:26League?

00:27Sure. So Super League is really a product and tech company that has built out both tech

00:32and capability that allows brands to enter into these immersive gaming platforms like

00:38Roblox and Fortnite in a scalable way. The audience has already migrated right now. The

00:44average Roblox user spends about 156 minutes a day on Roblox. That's nearly 2x the average

00:51time on TikTok, which is about 85, 90 minutes a day. So the audience has shifted and we

00:58have a way to allow brands to enter and create a persistent marketing channel in this next

01:04generation of social platforms no differently than they do today in Instagram, TikTok and

01:09other places with traditional social media.

01:11Yeah, I mean, if you're in the gaming industry and you're working with, you know, in the

01:15Roblox and Fortnites of the world, you're in good hands there. We know those are some

01:20of the most popular names out there. So Anne, what is Sounds and how does it work?

01:26Yeah. So, you know, what we do is we bring brands in in a very native way. And so Sounds

01:31is actually a 3D product module that we've created. So again, it can scale. And the first

01:38introduction of using it, it's a concert stage, it's a scalable listening party, is in partnership

01:44with Warner Records and Bebe Rexha. So what we are able to do, we have about 5,000 mini

01:50games in Roblox alone that have tethered into our network. And so what we can do is drop

01:56those listening parties or sound stages into multiple games and help Bebe Rexha reach the

02:02very elusive Gen Z, Gen Alpha audience, introduce her music. It's also an interactive experience.

02:08So aside from listening and dancing with your digital personal avatar, there's game loops

02:14and mechanics, ways to earn rewards, and then convert those people into being followers

02:19of Bebe Rexha on her other social media platforms, and ultimately convert them into people who

02:25want to download her music and attend her concerts in real life. The great thing is,

02:29is that you think about in real life experiences and events. There's a high cost barrier, right?

02:35Tickets cost a lot. There's geographic constraints. So we can, over the course of a weekend, introduce

02:39millions of new fans to a concert and to like an artist. And this is really just the beginning

02:47of a partnership with Warner Records to bring multiple artists into and introduce new consumers

02:55to those artists.

02:56Yeah, that's amazing. We all know how expensive concert tickets have gotten these days. So

03:01Anne, how are your other Roblox activations going?

03:04Yeah. So I mean, look, we're becoming a really uniquely positioned company. And again, it's

03:09because we start with product first so it can scale. We've done a lot in the fashion

03:14and cosmetic space. So we've built a fashion runway, a modular cosmetics counter. So we're

03:21able to take brands like Maybelline and L'Oreal and Urban Decay and create experiences where

03:27your digital avatar can try on different makeup looks that then lead you to convert and try

03:33those new products that are showing up in your local Target or your local drugstore.

03:38Very similarly with Skechers, just one of many of our fashion clients, you could go

03:43in and try on exciting kind of new digital goods, trying on new shoes that also then

03:50drive those conversions into real life. With Skechers alone and our very short campaign

03:55with them, we had 3.4 million digital try-ons. And you know, if you think about it, they

04:01say, I heard a stat the other day that by 2030, this next generation, 30% of their wardrobe,

04:07their whole wardrobe, including their in real life wardrobe will be digital. So this

04:12again becomes an entry point for us to then drive people to become real life consumers.

04:17That's incredible. So Anne, if we zoom out a bit, how is the industry as a whole doing?

04:22Are users still as engaged with 3D and immersive worlds? Is this growing?

04:27Yeah. I mean, in our opinion, you know, this is actually this first generation that's grown

04:32up natively speaking the language of 3D engagement and having a personalized digital self that

04:39they directly correlate to the way they express themselves in real life with their physical

04:45selves as well. And so we think it's an imperative that brands learn how to speak this language

04:50of 3D engagement. Again, this is a generation that doesn't want what we know as traditional

04:56digital advertising, pop-up ads, being forced to watch videos and constantly things that

05:01interrupt our experience. These are native experiences that we bake into the landscape

05:06of games. You go there out of free will. They're fun and engaging, and it's a way to start

05:12to build loyalty that way. We think what's inevitably happening, and it's really the

05:16vision of Super League, is we're starting now with these open world platforms that allow

05:21us to bake these experiences in. So that's why we focus on Roblox and Fortnite and Minecraft.

05:27But this is actually what the next generation of the Internet is soon going to look like.

05:31You won't go into a static, transactional, click-based web page to transact with a brand.

05:39You'll go in and actually be able to virtually try on goods or sample things first that way,

05:44and again, bring your digital avatar in the space. We often talk about the 3D web. We

05:48want to clarify we're not talking about dependency on VR headsets. We're not talking about crypto

05:55or blockchain or NFTs. We're just talking about the fact that the tools exist today

06:01to create 3D-feeling immersive experiences that a user engages with on a flat screen

06:06like an iPad.

06:07Yeah, it's amazing. The ads that don't even feel like ads. I mean, that's the most effective

06:12form of advertising. You say that you have a path to profitability in 2024. What's the

06:19strategy here, Anne?

06:20Yeah. So what's happening, and it's an exciting thing that's changing in our pipeline, is

06:24initially brands were saying, okay, I get it that the audience has moved. So they were

06:28dipping their toe in with us, doing kind of short-term temporal campaigns. We recreated

06:34Barbie's Dreamhouse for 30 days and delivered 60 million visits with an average dwell time

06:40of about eight minutes. So it is, to your point, like product placement on steroids

06:44and real meaningful engagement.

06:46But then what happens is brands start to say, okay, I'm getting comfortable with this new

06:50marketing channel, and now I want to make it a core part of all of my campaigns this

06:55year. So people like Universal Studios and others, every time they dropped a new movie

07:00release that met well with this segment that we reached, they were making this a core part

07:05of their campaign. So then what we see is brands start to spend in aggregate a material

07:10amount of money through our proprietary tech suite to reach these audiences in a meaningful

07:16way.

07:17But then the exciting thing shifts, and the exciting shift is we have six brands today

07:22that have hired us because they now realize, I should come in and out. I should stay and

07:28continue a conversation and build fandom and loyalty no differently than brands don't turn

07:34on and off their Instagram strategy or their Instagram channel. They have a persistent

07:39content drop through the year and really treat it like a permanent virtual billboard for

07:44their brand.

07:45And so six brands have now engaged with us that way, which means we're building something

07:49for them, and we're being paid a recurring fee to continue to keep it operating. So while

07:54we're going to see our first profitable quarter ever in Q4, what's also really exciting is

08:00the shift away from this looking like an advertising model, which has heavy spikes of seasonality

08:05due to ad spend, and starts to become a smooth, recurring, forecastable model, and continuing

08:11that step change revenue growth because we're capturing a bigger share of wallet from the

08:16big brands and IP owners we work with.

08:18Got it. And then are you looking to incorporate AI into these activations and how could it

08:24enhance your work?

08:25Already do it. You know, we're one of the winners with AI. We use it internally just

08:31from an operational point of view to optimize workflows, but we're also doing it to collapse

08:37the development cycle. So say a brand comes to us and says there's a concept or something

08:43that they want us to generate for them and experience, we first use AI to quickly create

08:49various concepts that we can put in front of the brand. And then the other thing, again,

08:53that's so important is because we have off the shelf these what I call kind of drag and

08:58drop or repeatable product elements, we're not building from scratch every time. So we

09:04use AI to generate concepts fast, and then we use our off the shelf products to quickly

09:10be able to reskin and create something that feels very customized to the brand and bespoke

09:16these this type of a scalable experience. That's important because it drops the barrier

09:22to entry for brands. They can get in more affordably and try out this new marketing

09:26channel. But it also allows us to collapse that development time, use scalable product.

09:33And that means we're getting product like margins off of those experiences as well because

09:38we're using those repeatable elements. So instead of 30% margins, a traditional game

09:43studio would make, we're talking 50, 55, 60% margins.

09:47Wow. Well, Anne, this has been awesome to learn more about Super League Enterprise.

09:52Again, trading on the NASDAQ under ticker SLE. Anne Hand, the CEO, has joined us today.

09:57I've enjoyed learning more about the company. I'm sure our viewers will as well. And thank

10:02you again for hopping on. Enjoy the rest of your day.

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