A New Era of Publishing

[music] Welcome to the Navit Gaming Podcast, where it is our mission to explore the business and future of video games. We bring together the industry's brightest builders, investors, and thinkers to keep a pulse on current events, dissect emerging trends and games, share lessons learned, and have a great time. This podcast is also part of Navik's growing ecosystem which ranges from free and premium research to consulting and advisory services. For more information, visit www.navic.co. This episode is brought to you by metal.tv. Built by gamers for gamers and used by over 15 million gamers per month. Metal is the fastest way to clip, save, and share gameplay on PC. Millions of clips get shared every week, turning your game's moments into word of mouth at internet scale. With Discovery being one of the biggest challenges in the games

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What's up, everyone? and welcome to the Nova Gaming Podcast. I'm your host, Alex, and this is the interview and insight segment. I'm actually live today from Gamescom, which might be the one place on earth where you can find every flavor of publisher, investor, gamer, self-funded, solo developer, standing in line for the same, you know, broughtwur and beer. Um, all with very different opinions on who you should pay or who should pay you for your next game and what you should get in return. Before we get started, a massive shout out to Exola, who is graciously hosting my guest and I here in Cologne at the Exola Clubhouse. And with that, we'll we'll dive in. Publishing used to be one thing, a

check, revenue share, and usually your IP if the check was big enough. That model isn't dead, but it's not the only model left standing either. Going into this year, more developers than ever are self-funding. storefronts are still taking their cut off the top regardless of who published the game. And everything sitting in between the developer and the platform has fractured into a dozen different shapes. Marketing only deals, shared recruitment instead of full recruitment, work for higher publishing services, UA only financing, or studios setting up their own internal publishing arms instead of shopping a deal at all. That fracture is the theme of our show today. I'm calling it new age publishing, not because the underlying job changed. you know, funding, marketing, distribution are all still the work publishers help studios to figure out, but because who provides them, how they get paid, what good means, and what they walk away owning has reshuffled as we shift into the back half of the fifth decade of the games industry. My guest today um built a company that's basically a live experiment in that reshuffle. And he runs two completely different publishing models under one roof on purpose. So,

please welcome uh Ben Kvalo, founder and CEO of Midwest Games. Ben spent his career at 2K, Blizzard, and Netflix before starting Midwest Games. They launched in 2023 to champion developers from, well, sort of obvious, the Midwest, if anybody can't tell from the branding, and other overlooked regions, and today runs a traditional invest and revenue share publishing arm alongside Shadow Publishing, a for higher service model that lets developers keep their IP and revenue entirely. I've actually already had the pleasure of sharing the stage with Ben at our talk at Games for Change this past July in New York City. And I'm very excited to welcome here onto the Navic Airwaves and live at the at Solola Clubhouse Studio. How's it going, Ben?
It is going so well. You know, it's what I don't even know what day it is anymore at Gamescom, but it is so great to be here. Uh glad that we get to have this conversation.
Yeah, me too. It is Wednesday. Um we're approximately halfway through. Um, it's one of the for me it's actually one of the shorter gamescoms I've ever done. So, I'm flying out tomorrow and uh, you

know, with that actually a lot of it incred incredibly compressed. So, I'm also really excited to be sitting with you here today in this very nice oasis of the Exola Clubhouse.
Yes, it is nice to be outside the show. I'm here Saturday to Saturday. So, I have a full week and a lot of meetings.
Lot of meetings.
A lot of meetings. Well, before we get into the mechanics of the business, you did stints all over the world in games, and you specifically moved back to the Midwest to start Midwest Games. Um, and I'd love for you to walk me through the moment when you knew you wanted to build something rooted in the Midwest versus anywhere else. Uh, you know, what makes you passionate about uh building up a games division in the in as an industry in the Midwest?
You know, I was at Netflix at the time. I had uh helped to lead the launch of Netflix games and you know I was about 2 years into that and I saw just how the dynamics of the industry were changing postco uh and how there's like the first thing I ever looked at was immigration patterns like you know talk about a way

to start a business is looking at well h where are people going where are people migrating to and I saw that a lot of people that were from the Midwest were going back uh po postco you know they saw the advantages that a lower cost place could give them be closer to family and a lot of different reasons why and so I looked at that and I started to dig in a bit and started ask a lot of questions around okay well what is actually happening you know where is talent today how could we be operating potentially different as an industry because a lot of what I saw as an operations guy that's my background is a lot of inefficiency. Uh you know what what we were doing as a as a industry was not going to scale as we continued to grow as an industry. And so you know this was end of 2022. So this was be well before the like year before the layoffs. Uh I decided you

know okay I'm going to go explore this. I brought this idea up locally. I happened to be back in Green Bay, Wisconsin at a Packers game. Imagine that. Uh and was talking to some investors and I said, "Hey, I have this idea." And luckily that like little spark, you know, created the fire cuz they were like, "We love that idea."
Uh, you know, you could create Wisconsin's first publisher. And one of my big best was, okay, let's do it. Let's think about, you know, how do we create sustainability? Uh and what we did ultimately was create a publishers that could operate in a very different place and it opened up the door for us to operate in a very different way.
H interesting. Yeah. I mean I think this is a growing trend in games as the majority of the industry is some places are facing contractions right there's actually a lot of I think geographies Abu Dhabi um we spoke together in New York you met some of the people that um

you know we're working with at the New York development economic corporation to grow games specifically in New York because it's not a hot spot for it the Midwest as you as as as your example um I guess before we're going to go into the first our first topic which is why why you think publishing is broken but I just want to linger here for maybe one more second like what it's there's a new model so like but why do you think that there's certain regions that are invested in growing games when maybe the rest of the market feels like it's contracting
well I think it's a natural I don't know democratization or just you know the the talent has gone elsewhere
uh and I think there's a natural like eb and flow to big cities away from big cities because of the costs and the challenges of it and and really job opportunities and and if there aren't opportunities in places, you know, I think there's a natural flow to other places where they can find jobs or at least, you know, live in a place that is, you know, much more affordable. And so we're seeing that globally. And so the Midwest is such a great example of

that. Wisconsin, where we're based, is an incredible example of that. You know, average salary in Wisconsin is like $57,000. Wow. Average home is less than $300,000. So the economics of that allow you to yeah you make less but you still you can afford so much more. Um and so I think people especially postco I think it changed the thought process around you know maybe the thing I wanted before isn't the thing I want now and it was a big change moment and it wasn't everybody but it's enough people that like it makes a significant impact because I then look at a place like Wisconsin and suddenly they already had some game development uh in really incredible ways. Call of Duty, Apex Legends, uh uh PUBG are all made in Madison. Um, and I looked at I'm like, okay, but now there's a whole wealth of other talent around there and they just need opportunities. And so I look at, you know, us growing is giving bringing

opportunities to where talent has actually moved to and it's just like it is a here and now opportunity, right? And it's not going to last forever and there still will always be kind of a flow back and forth. I'm just seeing where the wind flow like is blowing right now and I see it moving in that direction.
Makes sense. Yeah, I mean it's super interesting and I mean I think that that makes a lot of sense and the value trade-off and people being able to live in a place that's affordable makes total sense. Unfortunately can't say the same for New York. Um so you know we I've actually spent a lot of time talking with the New York Development Economic Corporation. They're like what can we do to make people start studios here and I'm like well can we reduce rent? Um, so and unfortunately it's it's not exactly the same, but
that's great to hear a little bit about the background in Midwest and I think it helps um, you know, for the audience that's listening on our airways right now that aren't familiar with Midwest and sort of like why you did what you did to get some context sort of on the mission. Um, our first topic is going to be around publishing, right? And why and why it broke. And so what do you think

um is broken about publishing today and how did that inform now I know I know why you started in the Midwest but how is that informing what you're building at Midwest Gapes.
So I think we have to go backwards a little bit to understand like why is it broke? First of all, it was built off of a very physical focus industry. You know, going to places like Walmart and GameStop and, you know, having stands and like and endcaps and selling games in a physical place. And publishers own that lane like they own those relationships. Uh, and you know, we've always been a relationshipbased business and they really kind of own that lane. And there's very few distribution channels to be able to do that. Now, as we've moved to this vastly digital world and digital space for sales of games, um that relationship has completely changed
and you're able to first of all put out

a gainer self. Now, I don't necessarily encourage that because you the go to market is so incredibly important. If you're not getting that help, you know, it's a huge challenge. But the fact that you were able to uh changes the dynamic of the relationship and suddenly the value of the publisher goes down a little bit. And then there's a number of other things that have happened over time that have reduced the value that the publisher is bringing from a standpoint of they own lanes that no one else can get through. So with that, okay, well, they still are asking for the same amount, if not more on revshare, rights, uh, you know, long-term IP and control and things like that. Um, and they actually are investing less as well. And so that dynamic, you know, for a lot of developers isn't doesn't seem fair. Um, and so we haven't had any alternatives. And also we've we've never taught the industry

what is publishing. It's just this box that people go oh I have publishing. Well what is publishing mean? Like publishing is 40 different disciplines in one box of a publisher but it doesn't have to be. And so I think that's where I started to look at this and say okay well what if if we can operate this differently
like does it open up the accessibility towards getting more people the things that they need in publishing because what publishing is provided isn't necessarily getting people you know uh the success that they need and even if they does they lose their rights and and it just ends up being a drip that you have to continually go back to a publisher and that's really risky at this point because there's there's less and less folks investing in things. So the the risk aspect of things has changed. The other thing that's happened in publishing it really really changed

things. It's about 2016 2017 uh VC and and and a lot of other investors outside of publishing started to come in and so publishers suddenly didn't have to take didn't have to invest in the earliest stage
biggest most risky end of the game and once they started to pull back you know investors did come into that space for a while
but 2023 2024 and like on they suddenly pulled back and then there's suddenly nobody in that And so how do you like how do you operate when there's nobody investing in early stage and and and people aren't getting the things that they need from a publishing perspective and so the whole system has changed since then and been broken and no one has come in with another system or another model to ultimately be an alternative. traditional publishing will still continue to exist, still continue to thrive and make the vast vast vast majority of the revenue or or the vast

majority of revenues generated through traditional publishing and that will continue exist but there's now room for all these alternative models, alternative approaches now that that thing and then ultimately long term will that model continue to make sense. Uh I think we are moving more towards like a film production model where there's lots of parties spreading risk working across many teams which adds complexity. So what do you need when you add complexity? You need something to simplify it.
Yeah. Interesting. Interesting. Yes. I'm hearing for you and originally publishers own supply side distribution relationships which obviously changed quite a bit when you can go and access the market directly outside of through digital outside of retail. Um, I heard from you that, you know, publishers offer 40 different services. They're usually taking a huge chunk of change somewhere between like, let's call it 30 to 40%, but actually I've heard of deals where it's the inverse, right? 60 40, but 60 to the publisher, 40 to the developer. No, 50 60 I've heard as bad

as 80.
Yeah. So, something incredibly aggressive for services that might be warranted, but for some, you don't need all of that, right? And so, how can you're, you know, you're kind of lamenting the saying of like, hey, like why do I have to pay for all these excessive things if I don't need everything, right? Right. And so you're saying like, hey, how can we make some of those pockets of things a bit more accessible in in a different model. Um, and then you've also mentioned that, you know, still however the traditional model of publishing eats the majority of the the revenue and for for a publishers's profit. Um, and that goes to the towards this other thing that I remember you saying, which is you've talked about how something like 2% of games on Steam earn 75% of the revenue. And I think I would love for you to walk us through how you think that number has changed what a publisher's job is. Like if 2% of the games and 75% of the revenue and you are the publisher and you do have a game, what's your job?
Yeah. I mean it's and that's just initial revenue and I think it's I think the exact is like about 70% 67. Um and

and and like it is if that's just initial and then ultimately if you look at like additional content and other other things it drives it's about 90 it's like 95% of revenue that's generated uh from it. And so you know a a publisher's job is to be able to cut through the noise and and allow you to be sold through in market. you know how and how you do that a lot of times PR marketing tactics uh relationships uh you can get placement you know on these on these storefronts um and you know that that is really the poor job of the publisher is to do that and ensure it happens for what they're giving out it it's just not now right now like part of that is it is 21,000 games coming out on Stee and so your ability to break through. You know, we put out a game in in March, end of March, and that day 70 other titles came

out on that day. And so, our job was to make sure that well, it stood out and it got placement and it, you know, and was able to sell through. And that's just becoming more and more challenging for folks to guarantee. Like part of what I see publishing as is predictability and and and if we can't have a predictable market, it's really hard to be a publisher and operate because you're trying to essentially reduce risk across your portfolio.
Okay. So what I'm hearing in that is just is discovery is your job. Yep. your whole goal is of the, you know, since is to be to break to help these games break out in a very crowded market in whatever way you think is physically humanly possible. Um, and so, you know, you've also said something something to the tune of if you're not publishing a game, you're not in market every month, you're out of touch already. So, but h with that, how do you kind of keep the pace

with that? Um, that's a that's a huge ass to be publishers usually don't publish a game every every month. Their slate they're trying to fill their slate up with at least maybe like three 10 games like at most. How do you kind of how do you how do you how do you get to a place where you're actually shipping a game every month so that you can actually stay on tabs with the market? And that that gets to the core of why I see publishing as such a huge challenge in the current moment is you're you're not driving enough volume to market to continue to have the knowledge in market and knowledge expires you know really like I say if you haven't put out a game in the last 6 months you know you you really don't it's not that you don't know how to you might have 75% of the knowledge and the longer that goes you it degrades very quickly and that that extra 25% % 5% might be the difference between you breaking out or not because you might take a tactic that you know is working right now because you just use it on something else uh and be able to

immediately do that. And the fact that there is isn't volume like publishers struggle with driving volume of titles is challenge and there's so much risk to try to increase that because you need so much headcount resources uh and things that you know it makes it it makes it tough and that's exactly what you know part of our benefit is as a company is that we are always in marketing. we are working across many different partners and so we're seeing what it is and we're able to take something from what we've done with one partner and utilize it on another partner. It's just very hard to do that as a single company, you know, only working on your own projects. Um, and that was one of the big reasons like we came down this route. But I was like, how do we uh keep our thumb on the pulse
at all times to make sure that we are actually doing what we say we're doing, which is helping with discover.
Yeah. Okay. So, we said that the model is broken.

Um, and but then you also just said that, you know, the biggest and some of the best budgeted games in the world still get made entirely with the big publishers and their traditional model. So, why it's it's a little counterintuitive, right? So it's it's it's only broken for someone, right? It's it's it's definitely not broken for it's a little K factory in the Garonomy right now. There's a K factory in the economy where the richest people are, you know, now buying like don't know what to spend their money on, so they're buying like insanely expensive perfumes and then half the economy basically can't figure out how to, you know, afford their daily lifestyle. Do you think that's kind of like the same parallel here? Like the old model is still winning in some capacity even though the old model is also still broken.
Yeah. So part of the reason these companies are still making vast majority of revenue is because we think about you know what is selling. So only I think it's like 13% of game sales this year will be new game sales.
Mhm. So, whoever already was successful

ahead is still ahead is still going to be ahead because, you know, they're able to derisk anything that they're doing because they have all this back catalog that continues to sell and a lot of them are doubling down on that. And it's smart. It's smart of them to be like, hey, okay, there's a really risky market. let's let's actually go back to what it has already been successful and we do another iteration of that or or continue to add content to something that is a legacy title because we know that we have an audience there. Uh and so they're doubling down on that which it's is really smart like it during this moment like that is what they should be doing but it also opens them up to risk because they don't have new content coming in uh and and new things and you know ultimately consumers I believe will eventually get bored of that and that's where there's a unique opportunity with indies right now where they have the chance to put out new ideas you know be really innovative because the audience isn't getting that on this other end of

the business now indies even when we see a big indie hit, we have to put it in context of like that's still nothing compared to what AAA and big publishers make. Like, you know, even the biggest indie hits would be like failures if they were portfolio titles for AAA
100%.
And that's and so we so we celebrated these a lot, but then we don't put it through the lens of like, wait a second, like let's let's put it into context because yeah, they're winning more often, but also let's remember that AAA and all the pulled back.
Yeah. a lot of a lot of their new content. So, of course, they're going to increase their their pie in the new title because there's less coming from the other end of fix.
Okay, makes sense. Yeah, it's definitely like an entrenchment and a doubling down and then that same model is like not working in today's framework.
Um, so then that brings us to talking about I guess your model, this idea of two different publishers under under one roof because you're actually still sort of offering the old model cuz you know like you got to be smart. Like the old

model could be if you find yourself a mega hit and you want to take it all the way the line, you obviously want to participate in that upside. So walk me through what actually separates your traditional publishing deals from the shadow publishing off offerings. like where to you is the line and actually how do you look at a developer's pitch and say ah this is a self-fund it and hire us kind of thing for like of the things in that of the 40 items in the box these two things in the box
versus the one where you really want to ride alongside the studio is yeah like let's go 8020 let's do 7030
well so in the in the shadow publishing end of things that you know and a lot of folks uh will go oh this makes sense we actually get hired by publishers the most. So, it's not even developers that are necessarily hiring us, it's other publishers cuz who needs publishing more than publishers.
Yeah. Right. Uh and who needs it flexibly and who needs it, you know, uh who needs that knowledge that I talked about like that, you know, that constant, you know, the fact that we're in market, they can rent that knowledge

from us. And so, uh so that model looks a lot like a publisher coming in saying, "Hey, I have gaps here or I need support here." And we're able to support that. What I look at from the traditional end is I'm trying to uh do what the market is telling us to do. So if 13% of of game sales are towards new gangs, well maybe 10 to 15% of what we are doing should actually be in that space and not 85% of what we're doing. Maybe the other like the 85 90% should be in shadow publishing. Whereas okay like if
if if we can if we can focus our bets on you know we get take very few of them they're very focused and we have a lot of learnings around them from other places we can uh we can do better with those bats uh we're not spreading ourselves too thin um you know and I think focus is a is a huge challenge in

this like dynamic market and so if we can focus on fewer titles you know and take bets on them and then part of part of that is how do we take bets over times because we are an iteration business and most big successful studios IPs it's iterations like you know most game like if you look at the like game of the year almost every year there's like most of it is the second or third title in a set of titles in a franchise and I think if I could take like a studio's next five titles and support them. I think that's a better bet and we will end up with more valuable IP over a longer period of time and we can be more supportive and build a really strong relationship with the studio over that time and not put all of our eggs in one basket with one game of theirs.
Okay. So, the publishers you the shadow publishing stuff, you know, they they want to basically say, "Hey, I'm 2K kind of like hired some other Poke people.

We're still going to call it 2K cuz you're the Shadows." Um, and then for some of the indie studios, you're saying, "Hey, like, okay, I might take this bet, you know, of my portfolio, maybe my way I want to split it is 15% to new stuff, 85% to, you know, helping out other publishers, helping out established titles." Um, so, but for those that 15% of the of the new titles, what do studios mostly want? Like for new ones, right? Like people maybe that maybe they're on their very first game or maybe they're on their maybe for the first game you're doing shadow publishing and by the time they hit the second game you're like you really know what you're doing like you know now I actually want to ride with you in economics. Is that the typical way that it works? And how do you kind of like crawl walk run relationships with indie studios? Um because it is a lot of risk right um and your model kind of actually allows for some flexibility there. You could be like hey just pay us and we'll kind of see how you are too right before we really get in bed together. Um, do studios like that model or do they really want you to step up to the plate to do the fullon revare?

Yeah. I mean, I'm just curious. I'm sure that there's different sentiment.
Yeah. Every studio wants money.
Yeah.
And but what I found over my career is is the best games that the best things that that come forward have strong relationships. And so I think it starts with a relationship. So we can build a strong relationship. It can come from either angle. um you know or something in the middle that you know we come up with together um that creates a you know what I think is positive friction like that's that's you know a piece of things that people don't talk about enough is how do we create a relationship uh and a back and forth between publisher and developer that we're both going in the same direction. Um and if you can't do that it's really hard to to get a successful title out. And I think the current system of things doesn't always encourage it because it it's more so okay well publisher has final say on things. I don't want that. I I want us to be in a partnership. And so for us we

focus on devs that will push forward and come to us as a resource and a support that we can we can provide data, information, guidance. Uh we can share our experiences. We can share like what else has happened before, what else we've seen, what is happening in market. uh and and be able to inform them so that they can move quicker with what they are doing. Um and but ultimately it has to be not us telling them what to do. It is us guiding them in the best direction and they ultimately have final say cuz you know they are what I would call the informed captain. They have the most context in their game. We we are secondary. We have a lot of context in their game but they're not we're not in it every day. We don't like they're building towards a community. They understand their community best. we can help support and supplement that, but they still understand their community best. And so, how do we just provide everything that they need to be able to support that community in the best possible way?
Yeah. I mean, I think that um you know,

you're bringing up some interesting points here around like the collaboration, the true partnership, and obviously, I think that that's right, like publishing and studios should be a team to bring the thing together. Um, but I think here's I guess and this is more from the consulting perspective, right? If they're just paying you to execute a certain service and what if you know that thing is like not really the right strategic choice. I'm sure that comes up. They're like, "We want to do this, right? You say that they know their community the best, but like I have heard candidly like, you know, some ideas that I probably wouldn't suggest for the best." You know, there's like, "Oh, we're in a shadow drop like Apex Legends." I'm like, "But are you Titanfall?" Like, it's probably not a good idea. Um, and if you're, you know, I think when you have the revenue share capacity, you have the, you're like, I gave you capital. I'm like, I'm like an investor. I sit on your board. Like, you don't get to make decisions that throw away the the shareholder value. In the work for hire perspective, you're supposed to do your job, right? And they pay you to execute a certain certain set of services. So, how do you actually

handle like, you know, when a studio be they maybe have very strong convictions the price they chose is right or that they should never give the game away for free or that they should never show the game before it's ready. Y
um how do you work through that especially in the model where you don't actually have a financial seat at the table?
Yep. So I think I look at it like I know that no matter what my opinion or no matter how much data I put forward or no matter how right something seems I could be wrong.
Um because there's always exceptions to every rule. And so I start with that of like okay we are going to present to them what we feel is the best case scenario because we feel like that will best set them up for success. But we're open to, you know, it being something else. And if they feel strongly about something, we'll do it. And then it's more so, okay, we we're on board with it. How do we maximize that? We might not agree that that is the best

decision, but we also can still help them execute that in the best way. Uh, and and you just never know ultimately. I've seen things that I was absolutely convinced it has it's it's definitely this way and it wasn't. Uh and I I'm okay saying that like we are wrong sometimes and I think we're it's about being vulnerable and saying okay well we were wrong about that thing and here's why we felt like it was right and here's what actually happened in reality. Uh and so we are never too convinced that we are always right but absolutely you know it's a tough it's a tough situation when they when they go against you know ultimately what our best advice is but it's it's their decision like and I think we're okay with that. we just want to make sure that they have full context and that you know we document that yeah we we did suggest the other way um sometimes but at the end of the day that's their choice and I think I'm okay

with giving them the power to make that and I I think the more we will do that we do that with with our partners with devs with publishers and and just provide that guidance that we feel is right generally they go in the direction that that we tend to believe.
Okay. Um and I think that makes a lot of sense in the like pay for hire section, right? Where you're like, okay, like I yeah, I will execute the orders. Um but I told you and I think that that's sort of the the right model there. It's a little bit more challenging when you're kind of bundled up together. But I think that brings me to my next question before we move on to our next topic, which is, you know, shadow publishing means no IP, no revenue share, usually work for hire only. um what is your in actual incentive to make one of those games succeed if there's no upside sitting on the other side of it? You're going to get paid no matter what in this bottle. Y which is actually the inverse, you know, the reason for why you went 604, you went 7030 was so that you could invest in it together, right? So now, how do you make sure that your

incentives are aligned?
No, it's it's a great question. So part of what we do is we we have a 30-day cancellation policy. If if you don't if we're not you don't feel like we're doing our job or more importantly if your business shifts or something shifts unexpectedly and it doesn't make sense right now or you want to like reduce or like it gives the flexibility ultimately we want to be the most flexible company in the games industry and if we can provide our services flexibly and react to what they need you know generally like they won't cancel they'll just be like hey we want to ram down this part we want to do this um and and the center for us is like well we keep their business uh as a as a piece of it. Now the other piece of it is it's it is a relationship business. Our reputation matters
so incredibly much. Uh and if and and we you know like devs talk, publishers talk, we're all we're literally at Gamescom. They're all like if if if

someone were to go and be like, "Oh yeah, we worked with Midwest. It sucks." Yeah. like that. That's not good. Like that we and so we know that we have to instill that all the way through and we can't just because we get a paycheck suddenly stop doing what it what it is. And you know there's a little bit of like this Midwest uh in me where you know my my dad like a lot of people in the Midwest uh instill like you have to you know earn your Keat. You have to you know do a good day's work. Um, and so there's a little bit of like a bluecollar mentality and kind of the white collar work we do.
Okay, it makes a lot of sense. Um, actually one more question before I move on because what you said some sparks something in me. Um, you know, a lot of publishers are actually kind of quietly or loudly I guess depends. Um, actually doing other versions of this too, right? So like marketing only deals at lower splits, um, shared recruitment instead of full recruitment. Do you think that the whole industry is going to migrate towards this like menu of options? Oh,

for like everyone instead of there being like this is the people that you go through for this and this is the people that you go through for this and it's almost the same way that you do that with a VC specialist VCs, right? Or do you think that everybody's going to kind of be like, okay, now we're offering all these different things. You can come to Midwest, you can get shadow, you can get traditional, you can get UA, you can get UA financing like or basically do you think that there's a world where everybody's offering a a wide menu of different things?
I think it's it's a good question. It I don't know if everyone is able to. First of all, it's very complex to run a variety business like that. Being able to serve a lot of different things. In fact, we reduce our complexity by working with other partners that have specialized knowledge uh you know specialized skills because we can't do everything. I think we are moving towards a more collaborative model uh not necessarily that's all going to be inhouse at one place but it's going to collaborate enable them enabling them to do a lot of different things uh that

they might label like okay we're doing all these things but they're actually working with a lot of other partners. It it's very much like film production where you know a a film production company will bring a filmmaker in and go okay well you have an action film uh we have these three stunt crews will we feel like this is the right one for this we're going to bring them oh we have a financer that loves financing action films we're going to bring them into here and then like you know oh we have this this production unit that we work with all the time you know but it it looks like it's that one production company doing it when it's really a lot of other entities he's doing it. So, I just think we're moving towards a highly collaborative, but again, like that adds so much complexity and so you need folks that can like reduce the complexity, which is I think what will evolve off the back end of this evolution as well. So, I think we're just in a in a moment where new models, new ways of working are being created. And I think what we're doing is just one of actually a few different things that will probably

emerge from this moment. And and off of that, I think we're going to create like essentially like, you know, four or five different ways of working that will become like a staple over the next 20 years before we inevitably hit a night of the wall and have to figure out something else.
Yeah, makes sense. Okay. I want to talk a little bit about your the financing in the new financing area and particularly actually for you yourselves. I mean, now Nav'k, you know, our our our mantra as we're discussing the business of games and and actually your business. Um I remember you saying actually at the games for change um thing that we were on together that you know a few years ago no one would have actually funded a publisher like yourselves um but however you prevailed. So what has changed and why? Yeah, it was funny go, you know, in 2023 I, you know, coming in as first- time founder, having not raised before, being a bit naive, uh, went to a lot of VCs and a lot of VCs said, "Nope, I do not invest in publishing. I only invest in

the content." Right?
Uh, and we've seen the results of that. Uh, I think what's changed is is a people have learned for their mistakes. Uh, and so they're more open to other approaches. We're seeing it with project financing rather than investment in equity of studios. because 99% of studios never want to sell their studio. Um whereas publishers are willing to sell, are willing to exit, they're willing to go public. Like there you see a lot more of that on the publishing end which matches really well
with the venture scene.
It's also just like the mindset is commercial like from the office.
Exactly. Yeah. It's way better alignment. But yeah, it is weird because it feels like a a group that manages a portfolio managing a group that manages a portfolio. Uh so it feels weird. But at the same point, if you really dig into the reasons why uh and which I think a lot of investors have started to do it, started to understand in better ways. Oh yeah, that does make sense. And it allows me to potentially take, you

know, two bites of the same apple because they could invest in a publisher. They could also invest in the studio. the publisher is signing as well and have both sides of the coin. Um, and so that that's a unique opportunity that they have. And so I think it's just a lot of learning that has changed. Um, and you know, I think we were in a market where investment was not afraid of risk uh, you know, in 2020, 2021, 2022 and now we're in an environment where investment is much more afraid of risk and and what derisks they publish it. So I think that is a much more appealing proposition now because of the aversion to risk as well.
Yeah, it makes sense. Yeah, I think I'd always said like it's a at this point in time, right? Like it's there's actually a lot of value into moving up the supply chain, right? Like not sitting at the content level, sitting at the distribution level, sitting at the discovery.
Uh
so your cap table also um has so you successfully fund raise as a publisher. So congratulations. Um, your cap table

also has operators like for Crunchyroll and Mitchell from Oljaw. Um, what does an operator investor bring to a publishing company specifically and and why did you choose these folks? Uh, not that I have favorite children as investors, but but you one of the big advantages of having some folks on my calf table that have like operational experience is I can go to them and a they care they care about it, but also um they know what I'm going through like you know like like like I'm very fortunate that you know I he can share his experience you know he's he's working on some other things I can share my experience and it becomes like a collaboration with an investor which is all I really always appreciate like um it's not that I I need collaboration with every investor we don't time to do that but a couple strategic ones like that are incredibly valuable because I don't know everything I'm constantly learning I know that I have blind spots

and the more I can have someone around me that is is thinking about that can point things out and see things that I'm not seeing is awesome and and I think those are the kinds of folks that helped to do that. Uh Tim Garrison as well uh you know is on is on our cap table and he has a wealth of experience uh you know ran uh rational games you know back in the day and so uh we're fortunate to have that um really uh in many different angles. Even the VCs that are on our cap table you know really uh provide incredible advice and guidance and have have been operators uh not as much in the game space. So, it's nice to have people in the game space because it's so nuanced and a lot of investors do not understand that nuance. And so, having that combination brings for me a ton of value as a founder, especially as a solo founder. Like, I don't have someone else. Obviously, I have my team, which is an incredible team, but I don't have another founder to lean on in that way. And so, those investors are a great

replacement for that. Asus um investment dollars in general right now are pouring into AI and and away from games. Um and how does this environment actually maybe change the kind of publisher that gets funded? Um and does maybe there's like a hybrid services plus portfolio like yours actually end up actually maybe more financable than a pure risk capital publisher in this climate. Um, have you thought very much about like the AI impa impacting the publishing business and how does it involve and and inform like your either your fundraising strategy or how you actually run the business?
Uh, so I joked when I was raising money, I was like, well, if I just put I'm an AI publisher, I'll probably get money [laughter] because like that's what it seems like sometimes is if you just do that. No, I think uh about it strategically with our business. We have to be very smart about how we utilize or don't utilize AI. First of all, we work with clients and their properties. The last thing we ever

want to do is put something into AI that they don't want in AI. So, we we draw a hard line on that. But obviously from an operational especially as a publisher thinking about how do you operate scalably across many partners you know there is a lot of opportunities that will give my team more tools to be able to do their jobs uh in more scalable ways and I I think that's where there's a unique opportunity. So yeah, I do think like there's like those companies thinking about it that way. um on how do we better scale our operations and really how do you how do you have something that is your own property and maybe and it's it can be AI related but like using somebody else's is only gaining their value up whereas how do you build things ourselves that ultimately will bring our value longterm up because if we have something custom bespoke ourselves we are far more valuable than trying to use somebody

else's tool set and and and then sell it as like, oh yeah, I'm, you know, like we use Air Table. I love Air Table. Like, but if I'm like, oh yeah, we're a company built only on Air Table. Like, that wouldn't be that wouldn't be valuable to investors or to our long-term strategy as well. We have to use that and other things that we build ourselves.
I see. um question on the like the economics on the fee side of the shadow publishing, you know, like you're obviously like, you know, I mean on the plus side, you're probably getting you're getting paid as things happen, right? And versus wait, wait, wait, wait for a game to come out, hope it makes money, then make money off of Veim coming out. Um, but those are like almost like two different kind of cash flow streams that you have to manage. So like how do you actually kind of like balance maybe like the the publishing side which is probably like uh sorry the shadow publishing side which probably higher margin right you're just getting paid directly for services and the lower margin side of the rev share um and running both bottles at the same time in terms of like how you think about running this business like how often do you want you know what's the clip of

like we have to have at least like three active deals per month being paid um you I remember your team is around uh 10 10 or so no
yeah 10 full-time uh but then we have a partner network of indiv individuals around us that's about 75
people we can bring in for certain expertise you know uh knowledge and platform genre special skills um and so uh yeah like it we just we have to be kind of flexible and you say the question again real quick
yeah I'm sort of saying like how do the how do you manage like the economic side of the business um and and so I think like the there's there's a little bit of like both of the things both of your models are actually like inherently not that predictable. I mean
you know you have to like one is for services kind of hiring right so you can kind of be like okay I need a bunch of people in market building relationships selling the wares right the revenue side model is very because you don't know if the game's going to be successful there's a long there's a long period of time before now how do you manage that

risk and well first of all my accounting my accounting team doesn't love that we have two two very different models two very different ways and approaches and forecasting and everything is very different um Uh what it what is nice is the the shadow publishing model is more predictable. Um uh obviously variable we put a variable part of it because we give that 30-day cancellation policy. So we you know we have to be conservative with how we predict some of that revenue. But the benefit is we get you know that margin that we get is essentially derisked towards what we can put into something else. So, we're not only earning it from like hits in a traditional pattern. We can take the money from our shadow publishing, right, and and reinvest it. And I I look at that revenue as kind of d-risked, you know, revenue for our traditional business. So, it's very different ways of looking at things. uh

very different ways of thinking about things, evaluating things, but uh but it's it's you know I look at okay us as a publisher how do we risk mitigating against models instead of against portfolios and so that's essentially what I'm looking at as instead of really looking at a title level at trying to okay what and then manage that against portfolio it's like okay this model helps to derisk this model and we actually are working on a couple other models right now as well that will allow us to you know to further uh take what we are doing and do things in different ways.
Okay, I want to talk a little bit to end with your portfolio but one more question. How do you react to me calling you guys an outsourcer? How do you feel about that?
I would say we're an outsourcer. We you know at the end of the day we are a publisher. We are just doing things in in a bit of different way and I think it's important because

uh in order to help somebody succeed, you have to think about things holistically. And so we don't just do one aspect of things. That's why we're not an agency. Uh as well, we are uh thinking exactly the way that the publisher is thinking as well. And you have to be able to take the production and the marketing uh and all the strategy pieces and combine them together to really bring something forward. Um but you know there's an aspect of what we do that is that like you know we don't necessarily shy away from it either. It's just first and foremost we're a publisher and yeah we do some things that other publishers don't necessarily do and that's what makes us unique and I think special as uh as kind of a a unit.
Well um I want to talk about a few of the projects that Midwest has published before we we wrap up and go into final closing. Um so I think there are a couple that that came to mind. One is um

Tomb Water, the other is Legend of Babu out of Istanbul, and the other is Crimson Moon, which is probably Monsters um game. Y
So for Tomb Water, I believe that that game actually already already shipped um and uh what did you guys do for them and uh how does that partnership tell us about um what was what was working for you where you saw success in the market? Tomb Motor is an interesting one because it was it was the beginning of a more unique approach to publishing. It's traditional in a way, but not fully traditional. We didn't we didn't put production dollars up front into it, but we did invest marketing dollars towards it. And part of the deal with uh Max and Jake uh and Moff Atlas, so it's two person studio in Columbus, Ohio, was that we, you know, would give them the ability to decide their own dates. They didn't want to be pressured into putting out the game before it was ready. And we said, "That's fine. You tell us, but the minute we start spending those marketing

dollars, we do need to have a date." And they're like, "Yes, that's completely fair." And so we had an agreement off of that. And so we invested dollars towards essentially the go to market. Uh and we became their publisher off of that. And so we were their full service publisher. We provided every aspect of things. Something they did want to cover. They didn't want to handle the socials. They're not big on Twitter or anything like that. Um they wanted us to really be the hands-on publisher for all that. So we handled that entire go to market. Uh and and really like uh you know it's top I think 4% on Steam right now. Um it's a 93% rated game. Uh and so we were able to tape what is an incredible title and then match it up with kind of navigating the Steam algorithm and the challenges with that. Um and and we're able to achieve I think something pretty special to to be in that in such a difficult environment. Um, but it all

comes back to they have a special game and we were fortunate to be able to kind of work on it and now we get to expand beyond because we we first launched just Steam, just Steam, uh, PC, uh, and just English. And now we're adding more languages. We're doing we're looking at more platforms. We're looking at more opportunities. And it, you know, as I said earlier about how I think about traditional, like this is a long-term relationship with them. We, they loved working with us. We love working with them. uh you know we are we are interested in growing the IP into something much larger. We are looking at other opportunities like uh that's that's where I'm just very excited about the future of what that that title their studio uh can be because we're now get to expand it now that we were able to successfully bring it to market.
Very cool. Okay. Um so that's one example where you kind of like let the go to market. You were the formal publisher of record. Um, another game, this game isn't out yet, but it's The Legend of Babu, and it's out of

Istanbul, which is a very, very, very far from the Midwest. Yes.
Um, so what does the regionalism aspect mean when your bet is like heavily overseas? Um, I know this gave us an idea, but sort of like how are you thinking about why publish something that's promised up?
Well, so the original thing uh that I I said when we first came out was like great games can come from anywhere. Um, and so part of that was, yeah, Columbus, Ohio was one bet, but also incredible developers, uh, incredible titles come from Turkey, incredible titles come from all from many different places. You know, we just announced that we're, you know, we are going to Portugal and and partnering in Portugal and that will be a gravity center for Midwest. And so, you know, for me, Midwest is more about the the idea of supporting underserved places and going to where others aren't going and doing things that others aren't doing. Um, and so, you know, changing where, but also how we operate as an industry. So, Turkey was a really interesting one. We were we've met the

dev, we saw a ton of potential, incredible team, uh, very talented, but it brings a lot of challenges as well. obviously time zone challenges, uh language challenges, um you know, there's certain countries that are more or less uh uh proficient in English and Turkey is is a little bit less in the scheme of things. And so that brings another challenge, but I'm also like, cool, let's embrace that. If we become good at that, we have an advantage because we are able to operate where others aren't operating. Um and and Turkeyy's incredible incredible uh country and and you know people I'm going there actually next month uh as well uh to speak at one of their conferences and so we just see an opportunity of a talent pipeline that's underserved that is emerging that is doing great work uh in region and you know we love the title as I mean how can you not like it's a big fluffy dog uh you know it's gone viral a number of

times in some of our our socials and marketing. So, we're handling all of their publishing needs as well.
Okay. Well, all right. And then finally, I want to ask about Crimson Moon. And this one's interesting because probably Monsters is one of those VC back startups that is finally getting something out the door. And um I think that there's a chance that you know this could probably maybe be one of the first very very very successful um VC back studios that actually ships something that people play and unfortunately does not have to sunset a couple months after launch. So how are you thinking for this launch? Um and sort of like what are you excited about to uh and I guess what are you excited about? What are you nervous about?
Yeah, so we're excited to support probably monsters. You know this is this is one that we are coming in providing more specific services. is they need they need uh help with certain things and we're there to help. We're there to help like think about you know how do we maximize this and you know been able to you know get incredible traction with the title uh you know it's coming to

market very soon. Um, and uh, yeah, it's it's a it's a great group of folks that is a perfect example of our ability to come in, provide in the- moment insight that helps them really advance what they're doing, uh, grow the audience, engage their audience in larger ways. Um, so yeah, it's it's an exciting collaboration with probably monsters.
All right, one last question. Discoverability keeps coming up. That's we did at the at the beginning of the show. You said, "Hey, publishers job is help get you discovered." Um, what are like the top three things that you've learned in market over the past six months on discoverability?
Discoverability. Well, so a big piece of it is engage your audience where they are. Do a lot of testing early. You know, we do a lot on Reddit, for example. Let's make sure that the audience is who you think it is, that they are reacting to what you know in the way that you would expect them to. So, it's incredibly important to go to

where they are. Trying to get them to go where you want them to go is, you know, incredibly inefficient. Sure, you can get some, but you're not going to be able to scale that kind of business. Um, you have to know the algorithm. Uh, if you're going to Steam, you it is a dance. And wish list is a directional um uh attribute but it is not necessarily a signal of success. Uh you know for Tomb Waters launch for example you know there's 70 other games. Uh we had I think 11 other titles that were more wish lists yet we were able to outperform those title most of those titles um because we understood how the algorithm operates. And so velocity to market is so incredibly important. how how has your wish list gains kicked up? Because even if less, but if your velocity is great, um, and if you think about it from a platform perspective, it makes sense like if it's showing a

signal of people being interested and even if it's a small one, but they're interested and then you convert them in market and then they review even a small range, the algorithm goes, okay, well, what if we put it to a larger audience? uh if it still does that, you know, they they want to make money like and so they want to serve games that are showing that there's an audience interest in it. And so if you think about it like that, like there's a lot of opportunity to optimize towards your audiences by understanding what the algorithm is ultimately going to do.
Okay. So your lessons are test early, go where the audience is and um and know the algorithm. Yes. On Steam.
I mean know your platform like know every platform is different. Um, and you can't take the same strategy from one platform to the other. Sure, there are some that are more similar. Um, but every platform is different. Uh, uh, getting positioning placement is so incredibly important. And so things like the new and trending section, you know, within Steam, if you can get on that, A,

that's step one, get on that. B, how do you stay on that as long as possible? And there's strategies on how to do that. Um, but like how do you ensure that you're on that? Because besides like the billboards, a billboard when you go on steam, billboard is the first thing you see and then people scroll down and what do they look at? Then even trending. And so if if you can stay on that longer, you'll have more success. It's it's fairly straightforward with with some of that. So under understanding that is incredibly important.
All right, I want to wrap up with um I think maybe three core questions um in terms of like where this all goes. So the first is you're still publisher, right? What are you fundamentally looking for in a game team today?
Uh collaboration, you know, growth mindset, uh you know, folks that want to try new things, are willing to adapt, are like willing to pivot on a moment's notice and and frankly like willing to

switch everything. If the audience is saying, "No, we don't want this or we don't like
don't sure you can take your bet like and and there's plenty of devs that can can be like that, but for who we want to collaborate with is people that are willing to change, adapt, grow, cuz you have to in the current environment. The ones that are succeeding right now are we're seeing are adapting constantly."
Okay, that's great. Um you mentioned earlier uh V actually publishing might be better for VCs the aggressively commercial always looking for things willing to go public willing to exit. Um what's the ideal exit for Midwest games? Do you want to exit?
So I've always looked at this is I think it's my job as a CEO to look for as many paths as possible because that ups our value. If I can choose between three paths, like that gives me leverage to make sure whatever path we choose is truly the best path forward. And so I

think there's endless options. We we could get bought by another company. We could continue to remain, you know, uh in what we're doing and just kind of grow over time. uh we're in a unique place where like you know uh if we have predictability in revenue it's very different than most of the other publishers on the market like the open market because a lot of that's content and content shifts all the time and so shareholders hate when content shifts and you know you have to really balance that you know and somebody like Strauss Zelnik does it really well with take two like balancing the fact that content is shifting all the time, right? And they have more predictable, right? Something like NBA 2K, it comes out a yearly cadence, so they get some predictability, but GTA, who knows? Um, whereas like our our business actually is more predictable. So maybe we would actually be a good fit on the open market in comparison to other publishers. I don't know. It's something that I I consider. Um, and

again, like it's all to the purpose of like have as many options as we can. that's our best option for you know our stakeholders or shareholders what we want to do as a company like then we should take that option um I don't know I don't know yet we're you know we're still right now building growing scaling and I think we will start to see some of more of these opportunities emerge and I think we just jump we jump at the opportunity that makes the most sense in the moment it just has to be fit the scale of where we're at at that moment but we could be at a very different scale in a year or two years and suddenly other opportunities pop up. And so luckily I'm one that I'm like I don't need to have to know my path forward right now. I never have like I jumped into this journey and having no idea what would happen. And and it's it's led to amazing learnings, amazing growth and ultimately like I think is going to give us a lot of routes long term so we can choose what is truly best for Midwest.

Awesome. Awesome. All right. Okay. And because we're at Gamescom 2026, um, give the audience, I guess, one one hot take you want them walking away with on today's show.
One hot take. Uh, okay. Uh, well, since we're at like the big premiere show, and a lot of people are like, I'm going to announce my game, do things like at this show, games. I'm opening night lia or the game awards or things like that. Um, and one of my hot takes is I think it's a bad strategy like in general because you're in such like an ocean of other things happening, announcements, your big beast whenever there's big things like this. Uh, you get what, one, two, three winners maybe um that are like the big ones talked about. They're going to be talked about over the next couple weeks. Uh, my take is like find your own spot. like how do you stand out? Now, if you're the big big game, like cool, that yeah, completely makes sense, but so many

aren't. So, be careful uh announcing things at big conferences and whatnot cuz you will get drowned out by so many other things going on. Find your own beat, which is really hard because there's so many games coming out. But I I do think a lot of people like, I just want to announce the biggest show possible, and it's not necessarily the best thing.
Yeah. Yeah. I That's a great word to leave on. Um, Ben, this was such a great breakdown of a new model that a lot of people in this uh at this conference um listening to the show are still trying to figure out in real time. Um, before I let you go, uh, how can people find out about Midwest Games or reach reach you guys if they want to talk?
Yep. Midwestgames.com. Uh, LinkedIn is, uh, our bread and butter. Uh, I do I do a lot on LinkedIn, probably too much on LinkedIn. Uh, but Midwestgames is very active on LinkedIn. You can always reach out. We will respond. um uh individually you can reach out to me as well. I'm very happy to connect with people. Uh it's it's something I purposely spend

time on because I I think it's really incredibly important. Maybe it's the Midwest in me. I I just feel it's important to connect with people, talk to people, give people time. Um and so yeah, those are the those are the best ways to reach out to us. Um and then obviously check out our games on Steam as well. Uh, Tomb Water is just such an incredible title and I just want to try to get it in more people's hands because everyone that plays it loves it. Uh, you know, one way or another and you know, 2D Souls is like Western like there's just not much like it out there and so it's unique and and I want to support Max and Jake. They absolutely made something special.
Cool. All right, everyone. Uh, that's our live show from Gamescom. If you're here in the room, thank you for spending a part of your day with us. So, if you're listening at home, uh, send us your feedback or guest ideas at alexandavic.co. And with that, uh, we're out. Enjoy the rest of your Gamescom. Ben,
thank you.
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