Building the Amazon of Game Companies | Long Term Defensibility!

you Amazon today is the most valuable company in the world and we look at tech companies the fang companies of Facebook Amazon Apple Netflix and Google these are some of the most valuable and defensible companies in their respective industries yet when we look at the video games industry we don't see the same level of long-term defensibility that we see in those industries so the topic of our discussion today is as follows one what are the current defensibility strategies of game companies today - how defensible argument companies 3 how can game companies build a greater long-term defensibility 4 how should management teams be thinking about building greater defense ability into their companies than 5 which game company in your opinion has that greatest defense ability in the market today who will be

around 100 years from today and with us today to speak about all of these issues and more and by the way guys I was just as I was reviewing the notes before the call I have to say I'm you know I'm very honored that the three of you guys are coming to speak with me today I think your backgrounds are so impressive but first we've got Lloyd Melnick GM of Chimbote casino at vgw second christian Segrest all CU of super evil Megacorp and Mark Soto Santee SVP at my favorite games company Riot Games so just given how impressive your backgrounds are I thought you could also just tell us a little bit more about kind of where you work in some of the impressive history that you guys have maybe starting with you Lloyd it's actually I'm really aren't to be with the other guys so my history is not as impressive unfortunately but yeah a little bit of background is and especially why may be relevant to this topic so I've been in the video game and gaming industry since 1993 so we've been chasing this defensibility holy grail since then so

for 25 years I've been thinking about it and to be perfectly blunt no one's figured it out yet but I you know Google have to talk as I said I've been in the industry for 25 years started actually I started a company I was a small video game developer into as well and in social game he was acquired by played him at the time Clayton was one of the three big social game companies with Christians played fish and Zynga you know a few months after that we're acquired by Disney when I was running the all the international distribution over a digital fast forward a couple years moved into social casino with a company called spooky cool labs and was then acquired by Sega was Senior Director of our social casino their move from Zynga to run social gaming for the Stars group so if you're familiar with Poker Stars which is the largest real money poker site they went into social was there for four years kind of launched that moved it into

profitability thank God but then as you said I've been at bgw for the last year running their social casino product calls humbling to see you know also on the board of directors of murca which is one another top ten social gaming companies so you know long story short has been around a long time and I've seen a lot both pretty and ugly in the game industry but also of kind of seen what's worked and what hasn't so yeah I mean first of all I mean it's great to be in this group I think the second that you believe that you're particularly impressive I think it's the the day when your career is gonna take a downturn in this industry the thing I really appreciate and admire and love about this industry is how it changes all the time and while all the experience and background and the things that you've done maybe taught you some things there's also so many new things happening all the time from you know from everywhere so it's always it's a pleasure to be part of conversations like this which are really all about what the industry is moving I've been a game entrepreneur like this July will mark my 20th year of building computer games companies so I was a co-founder of

what today is suppose his glue mobile my company was called micro space we merged with a company called Sauron in the u.s. we both hated each other's names so we renamed the thing blue mobile and then when public in 2007 making the very first generation of mobile games with a dream of bringing kind of Nintendo Game Boy style play to mobile going public was no fun at the time I didn't understand it I'm a product I love product I like making great product and game distribution for mobile back then was kind of poor and was very focused on brand over experience and taught me a lot about industry dynamics in general but I left after her order of you know being a being a public company in order to found a company called Playfish which was that for us it was a dream of what if the Nintendo Wii had a lovechild world with Facebook like how could you create that sense of playing together there's sort of everybody if you know they're sort of bright happy environment having fun together but instead of being in the living room you know being online I did that for about well two years 23 months from founding it to ultimately becoming

part of EA in 2009 and state of da for a couple years I was an executive vice president of digital helping out figure out how to help build the foundations for EA to be a much more do you see driven much more engagement driven live up striven company then then it was certainly back then shipping product tried to play a full-time investor for a little bit interested in companies like supercell some others and but got very bored attempting to be an investor and actually did invest in superval maker corporately on and ultimately jumped on full-time and took on the chief exec job but couple years back mark yeah hi I'm honored to be here with you all you've all started game companies which is a dream of mine to do someday but but yeah I've been at write since 2012 when I was hired to run monetization for League of Legends and then over time my role expanded to include other teams such as analytics and research investments and

acquisitions and strategic finance and forecasting so prior to riot my background was in traditional e-commerce and running a hedge fund for a few years so well it was an active gamer when I started at Riot I did not have any prior industry experience alright great so maybe we could just jump right into the first topic is really around defensibility strategies of game companies today and I thought that was actually a really great post by the venture capital firm nfx that talked about the categorization of defense abilities along four different areas one is economies of scale second is brand third is something they call embedding and fourth is network effects and I think by embedding they mean if your solution is part of someone else's solutions sort of like having Facebook Facebook Connect within games or things like that so in terms of like the broad categorization I'm learning do you guys feel that this is a good way of thinking about defense abilities kind of at the

higher level or are we missing any kind of categories that you think are important yeah I mean the if I can go first the framework makes a lot of sense to me I agree that all four of those can and do provide meaningful defense ability for for the fame companies and others it was interesting to me that they exclude culture and talent which you know could be because they don't think those admit types of advantages are sustainable over time or they just don't think it rises to that level of impact I do think culture and talent can't provide a sustained competitive advantage like it did for companies like Pixar that allowed them to take on you know Disney animation and win over and over but culture and talent advantages will always be at risk as people come and go so I agree with their conclusion and with you know the view that game companies haven't been able to create the same level of defense ability as Fame has right and along that line in terms of culture and talent maybe we could even broaden that to be more like organizational defense ability and Christian I know you invested in supercell and they're kind of famous for

their kind of decentralized approach or that organizational structure do you would you consider that the defense ability or a longer term defense ability or how would you consider that so yeah I actually really agree with Mark on this one on the talent and culture being incredibly important in games and I think the reason why it doesn't rise to that level of significance for the fan companies is because gaming is foundationally different from consumer internet in that gaming is this alchemy of art design technology culture and business knowledge if you like from free-to-play economy management all the way to top funnel user acquisition management and that requires more people to be able to share their views and discuss and feedback and find that intersection of product and insight where all of those things kind of fit if that makes sense it's very rare to have game companies where one person makes the call and is able to say this way of

doing it will be eh it'll be an awesome game to play it'll be technically sound it'll don't economically good from a free-to-play economics perspective it'll be we can distribute it well because it'll you know it'll work out well and it'll have like a really cheap tool chain or like you can author content you know you know our I positive way moving forward that's kind of it's a hard much harder equation to make work in gaming than it is in consumer internet so that's why like from my point of view as a as a company builder I become incredibly sensitive to not just the technology expertise or design expertise or you know or free-to-play economy management expertise but how those disciplines talk to each other and how they listen to each other as a predictor of how well something goes and even when you obviously get that perfect it's even then you have a certain hit rate and you you know and can you in my mind the art of building game companies is almost the art of triangulation like you make a really good guess as to you know we're

kind of playing this Yuja game between all these different disciplines going this might work from a design perspective this might work from a distribution perspective this might work from an economy perspective and you sort of land on a spot and then the question is how quickly can you work out whether you land it at a you know at a success at an almost success or a total failure and how quickly how well can you as a team recalibrate from there and look at okay this is what we can learn from this honestly and like super says is actually a good example in the sense that you know back when I invested and got involved they were making a dystopian Facebook MMO write something called gun shine which I mean I you know I had no idea whether that would work they were pretty convinced that it might because they really they've had me making cutesy mobile games for like three years whatever at that point and well not quite ten maybe six or seven but they just wanted to make something look serious and real on the Facebook platform like a real game and they were convinced if this would work out because of they've you know done all the thinking and it didn't work out and they're I think so much of what launched their success over the following several

years was that insight that you know what no we have to take business considerations more into account play to our strengths in execution all these other things and then formulated a strategy and then just executed it brilliantly in terms of you know both in terms of the sort of games that they chose to do and how they go into market and all those kind of things but much of that I think much of the birth of the big the culture and sort of that that moment of hey we have to learn from our the first failure I think was pretty important for them so yeah I would definitely elevate talent to manage the culture what is the culture of managing the culture moving forward so you don't get stuck thinking that you're awesome because you made one good game but rather constantly questioning yourself or figuring out how to evolve the culture that's that's my perspective anyway the other Ram the other bits I do agree that they are meaningful but I would say that for gaming the other thing to think about is that it is a very capital intensive industry these days in that things are getting more expensive to make so having financial strength is insanely important being able to make multiple bets do multiple

things so the second that you have a cash cow of some form you have a game that that spins out cash for the company you already set yourself up like that's a huge watershed in some ways as it is a a call it short to medium-term defense ability that allows you to build long-term defensibility right so it sounds like we agree in terms of organization culture as a potential additional area of defense ability but maybe like rich and super so and Mark you're at Ryan and I I think like maybe one of the other aspects of defensibility that wasn't specifically called out is maybe like a sub category under brand which is IP so I think in terms of brand people think more about whether it's you know a supercell certainly has it as a strong brand and you know Tesla has a strong brand but I it feels like you know one when I think about the League of Legends characters for example and the ability to take that IP repackage it across new SKUs and things like that how do you guys think about IP as a relevant driver as

potentially you know a subcategory under brand as a defense ability I actually think it's more than a subcategory and and I think it actually so what Christian was talking about and making a difference between game companies and the fan companies is that yeah to me at our core with content companies we're creating content that's consumed and that's why some a lot of the nfx framer I don't think works for us as well so you know when I look the most defendable company in the what I would say content or entertainment space it's Disney and that goes to culture people being able to consistently create strong content on top of each other and and then the franchises and the IP when you were talking about but I wouldn't put that as a subcategory you know again if you if if if it is me is your model there there Marvel IP they're princesses IP they're Star Wars IP it's definitely not one of their digits you know whereas I think

the nfx framework is geared more towards digital companies that compete on technology and in the game space the companies that have had the best technology or that try to compete on technology have usually failed because at the end of the day you're creating an experience or creating content and you have to continuously create content that's why you know that wasn't hit wonder kind of that attrition was implying the ability to repeat it is so important that's why you need to culture the people and to me the the underlying IP that you can build off of but and then and then the calls from people that you can still create more yeah I'll just add real quick I actually really agree with them and I think the IP where IP tends to come from is in some ways I think IP brand and what people associated with the thing that you make is ultimately an outside reflection of your culture it's the outside reflection of the internal commitment of the kind of product that you're proud of and the Qatar product you want to make and how you talk about it and as a result over over time people come to trust your values set as an organization and

obviously Disney is a incredible example for a very long time but even in gaming I think supercell have done a very good job but they're in their corner you know I think particularly my riots a lot for having been able to strong advocacy among players that you know even if you maybe took a little bit of time to go from one game company through multicon company even then it's very clear that the same amount of love has been put into the next product and the way that the IP universe has been built out and I think a lot of that is not so much maybe you know and I'm you know obviously this is much talk about this but to me as a as a player long-term player of League of Legends to me I always felt like I wasn't sure if this was the best you know you know is this specifically artistically the best thing you're having here are these voice lines the best or is this IP universe the most kind of coherent in the in the world but it was always made with love and a lot of listening to the community and the playerbase and I think that has created a certain trust in the organization that ultimately then makes new games that will come out whether they are in exactly the same IP universe or not

gives them that halo or hey it's worth trying this because we know Riot is super serious about the culture all about the sort of the community and there and the player base overall but that really is a supposed Marc story to tell ya now that's exactly right I mean Riot thinks of brand defensibility in two ways one is the riot brand which you know over time as we as we launch multiple games we want it to be you know synonymous with with player focus and making it better to be a player so when when riot releases a game and in your favorite genre you're super excited because you know it will be you know it'll it'll it'll solve the problems of the genre it'll it'll you know take it to the next level and they'll support it with with marketing and with eSports and it you know the whole package will will be there and so and then on the and then on the IP side that's the other part of the the brand that's important especially with the League of Legends IP you know we we want that to be the most loved a gaming entertainment IP in the world over time it already is in some countries in Asia you know it's it's less it's less known in the west but once you know if we're

able to achieve that then as we bring out new things and that IP you know whether it's um whether it's games or even other experiences you know it'll have a built-in audience that's excited about engaging deeper with that IP and then that brings them back around to the to League of Legends or the other games and so kind of like Nintendo has done you know you can build an ecosystem where where you know you get you get that huge advantage every time you bring out a new experience for players but I do you think it's important that it comes from the product that you can you know you can create the powerpoints and Excel sheets around brand and you know network effect and all these kind of things as much as you want but it ultimately comes from is the next product great okay yeah any great great product the other thing we didn't talk about network effects and I actually think that's one of the things that really has changed in games I think in a big way over the past five to ten years in that as we've moved to predominantly multiplayer environments and predominantly community driven things with a lot of content consumption through Mina streaming and YouTube and other things it really has become like launching a new game these days he's almost like thinking about launching a new nightclub

in town like how do you create a place where people will want to come and hang out as an interaction space where on the one hand yeah it's fun the game is fun but on the other hand there's like a reason to be there you know and it's a it's a good way to connect and that makes the IP building side kind of interesting in that you're no longer pushing this top-down experience of this is the IP this is the movie you're gonna watch we're gonna tell you why it's great and you're gonna think it's great but it's much subtler than that it's much more like you're building this experience that is partially shaped by you partially shaped by the other players and somehow making people feel like that party and I think for tonight's done such interesting things in this area with the past couple of years that it's been really fun to see how they've extended and expanded the IP kind of and what people associate with fortnight and how that sort of what how it means so much more than a a sort of quote unquote cartoony kid's game these days just gonna say that you're right that it gave me companies the pressure is always on to create you know more and more compelling product both existing franchises and new franchises well I

think what the faint companies you know they could do nothing to their product for three years and it would still grow right that's like that's how defensible it is whereas game companies we need to keep innovating and you know raising the bar in terms of experiences and fun I think one thing with the community is you know where as it has been virtually impossible to create that defendable game company so far just based on experiences what might have changed and what might be changing here as Christian said it's changed over the last five years eSports could totally change it also you know the NFL is very defendable the NBA is very dependable it's because it is you know it you don't only have the participants you have the community you have the gambling side of it you have the fantasy side of it and as eSports revolve I'll say away that those franchises could be the NFL are probably around in a hundred years to go to your original question yeah it's it's hard to say what game company well the NFL will almost certainly in Europe you know that all soccer leagues will be and that's

where that's what could be changing in game environment now that you didn't have five years ago that the community it's it's beyond community because of the eSports it's just taking on a new dynamic that does make it much harder for a new entrant but it also increased increases a switching cost and it takes you off the content treadmill because you now have the users through things like fantasy and gambling and everything effectively creating your own content right and maybe I think the one last category of Defense ability I would probably add is just to your point earlier Loyd about the specifics of our industries that you know we're seeing this shift from like a unit sold business to more of a live operating model and so maybe more of a short-term defense ability but the fact that we are skipping towards this engagement monetization model and the fact that you can hold on to your customers for in some cases you know like Zynga poker or other games like that 10 plus years or League of Legends you know I'm sure you

guys have customers forever but the fact that you can hold on to these customers for much longer period of time rather than just a very transactional sort of customer relationship model yeah and that's where the network effects come into play as Christian mentioned right when your friends are playing the game you're likely to start playing it you're much less likely to stop playing it you know that only applies to online multiplayer team based games I'd say but you know more so than others but but yeah it's helped us evolve from like the movie franchises where you know they have to come up with a brand new hit movie and try to get everybody back versus versus just maintaining that relationship over time right so maybe kind of shifting over to how defensible our gaming companies and so we kind of have this in terms of the categorizations we have this for broad levels of counter gradations I think we agree that there's some there's some defense ability around organization and culture may be around brand and IP but if we look at some of the gaming companies out there today who do you guys think are some of the more defensible companies and where's the source of their defense ability coming

from in your opinion yeah look at my games because like you said you know what if you look at the top 10 the top 20 you know free-to-play or effective effectively anything now it's it knows those are franchises they're not going anywhere soon you know League of Legends but you know clash any of those games those are defendable the companies themselves I'll probably only as good as their top games right now you know it's you know they're not at the point where we have like we don't have a Disney in the industry I'd say but we have some games that are going to be around at least five or ten years I personally don't think we have any company yet that you know with the possible exception of an EA or a Nintendo that has a broad enough portfolio of franchises then you can say the company is the company is defendable is defensible outside of its core game or core too young I'd say the biggest exception would be $0.10 who has so much you know scale and network effects in China through their ownership of QQ and

WeChat and things like that that they've created some of that fraud defense ability across their network all right and then on there the other parts of their business they have they do have Network effects they do have all those I mean they've got every defense ability plus they own you know like a huge part of the entire ecosystem so certainly $0.10 but in terms of like more pure play content companies I are we are we kind of saying that we just aren't at that thing level of of defense ability is that actually I would really I guess I would really agree with Lloyd here I mean I just think that we've gone the defensibility of game companies in the past so go back 20 years or whatever used to be some ability to predictably release a game every year and get it into retail stores which is somewhat defensible and if you can do those things and you have kind of a and in particular if you do the same thing every year so you can do a sequel so you can build that brand over time you have a locked-in distribution you have a locked-in IP that you can build it's

like the EA I suppose like model right and you have locked-in distribution you can you have this IP and you can reliably have a production process that's going to create a game that's gonna have a Metacritic of like for 70 percent or you know or more every year so you don't read you know you don't ruin the brand you can kind of create a bit of a cookie cutter machine almost as you not to not to at all like disrespect the amount of effort and art and hard work and you know inside that has gone into that but that created a certain level of defense ability for a while while the retail distribution was the main distribution model but even there I guess technology moves forward all the time and like so many companies died in the console transitions at different times because they were unable to change their internal tech culture approach talent in order to deal with you know these these bigger things I think things are better now in the sense that yes games live for longer so we have longer waves you know - hello it's mine if you have a good title in the top 10 right now chances are if you do have semi DS and job it's you know it's still meaningful for you

in a couple of years time right without you know while while you're just doing at doing a good job at it but it's incredibly hard to say that you make one game no matter how much you try and I may be League of Legends this is a really good example of a game that's been managed incredibly well like I mean you know I still tune into the LCS and I probably turned out of the game a couple of years back and I can't go back in cuz it's too many new champions it's too many too many new things but like but I still you know I still tune in to interesting match and I'm still sort of in touch with that IP so I'm interested you know when Valerie comes out or when team fight tactics come out as a result so like there's a you know there's a certain very hard work on into that defense ability but even there if riot releases two three dud games in a row like you know I don't know I don't know that League can like you know carry it alone at that moment in time so like to me it is ultimately about figuring out a way for you to have the right tools between talent culture technology and IP and other things and then combine that

with a financial structure that allows you to have many shots on goal and maybe you have a 1 in 3 hit ratio or even maybe you have to like kill internally you know three out of every four projects or delay them indefinitely or whatever it's just a really painful thing you can do it so long as you have a reliable source of cash and I think one of the more interesting things that I've been following recently has been say Zynga strategy or that of Steel Front in Europe where they've almost become these thin holding companies or multiple studios which together where they can kind of leverage the fact that you can get relatively high multiples from public markets from you know from profitable studios in different places that way create massive financial strength that you can then use to you know either a prop up you know if let's say you have a studio that that you know happens to fail or that you know you need to do something new that you can weather a storm you can weather a couple of poor whatever it might be so to some degree I think creating that sustainable play tikka for that matter you know they have a very focused you know focused core business that that creates a lot of financial strength for them which they

can then use to acquire companies and/or to almost indefinitely incubate new projects to try to figure out how to create that next you know the next cash car for them so it's like I just think that we're fundamentally in the business of making art making culture making experiences and that never stands still it is not a distribution business where people want boxes at home as quickly as possible from a delivery thing like it just isn't a platform it is fundamentally experiences and culture always moves forward and you know thank goodness we're not in the music business because there you truly have to attempt to remain relevant all the time we can at least you know keep our keep our titles alive for a little bit longer but even then I think anybody who attempts to build a game business off the back of the same kind of defense ability like assuming that just because I own a lot of network of ads or whatever it is that I am now defensible I think it's a dangerous idea I think ultimately we rest on building amazing experiences that inspire that push the industry forward where people think wow I want to be part of that that looks great that plays great that's an amazing thing and

I think at the end of the day of that so you kind of can't abstract the industry away from that you my opinion Lloyd and Mark would you guys agree that it kind of sounds like what you're saying Christian if I were to try to simplify it is that maybe the greatest defensibility today at least looking at the current companies is actually driving for more of a scale defense ability in terms of having enough financial capital and then being able to diversify enough so that you're relatively safe but would you guys agree with that or in my am i interpreting your words I'd say that yeah if defensibility is a ten point scale and things at a ten you know I think the gaming industry has evolved from maybe a two back when you know they had to release a new boxed product every every a couple years to you know a five or six today with some of these sustainable franchises but you know it still needs to be proven that you know a game company can leverage scale and culture and and network effects to the extent that we can create those you know to get

to that to get to that level of being you know a hundred-year 100 year business because it's always going to come down to being able to create new content to satisfy your players so all the other things help drive it but if you can't continuously to bring out that new content then you're you're gonna fall down I think that's what Christian was saying yeah I'd really interesting you mentioned Zynga and Zynga Spidey example it's like if you look at their history that's probably like three examples with them in defensibility I do that if we had this conversation eight years ago it might be the company you'd have considered the most defendable because then it had the whole you know Facebook algorithm went war k they could you know release anything copy one of Christians games run it through their you know running through Facebook running through their channels and get a hundred a hundred million MN you know that was yeah and they could do that without to be blunt any creativity any any of the cultural things that we were just talking about and then they got you

know Facebook change their algorithms and change the policies and that kind of went to that's probably the closest in my opinion that any games company has ever come to be having a defendable position and then you okay Zynga five years later when they had literally you know one and a half billion dollars in the bank and they couldn't do anything right and so it shows that money alone and resources alone doesn't give you a defendable position and I think now they're probably I would put them in the conversation of companies that could be coming defendable because you know under Gobbo they've been acquiring these franchises you know there is sort of like a mini Disney model where instead of a Marvel and you know Marvel and Lucas it's been you know companies like merge and P but they've been able to build on these franchises so theoretically you know as Christian said maybe a couple of them will falter but then they'll grow a few of them out and you know maybe that is a model but I think it's just interesting as shows kind of be three spectrums and also two

challenges and in a game company trying to become defendable right and what I think you bring up a great point in terms of environmental changes which if if you can't adapt to certain environmental changes maybe you really aren't that defensible and when we when I think about some of the things that are happening today a in terms of on the console side shift to digital distribution which i think is increasingly going to pick up and become the dominant form of distribution on that side when we think about what's happening on the mobile side with performance marketing and the potential to not be able to target Wales anymore potentially depending on how the whole idea FA Apple thing starts to play out and in terms of how from a marketing perspective we're at least seeing on the HD side right and I think that riot proved this the best web balance but like influencers and twitch and like twitch drops aren't like the new marketing on that side and so when we think about some of these bigger macro trends do we do we think that so one of

the I would say maybe one of the trends that's happening is that some of the scale advantage that we had before isn't as strong I don't know what you guys think in terms of some of these changes that are happening and what that would have as an impact to potentially like scale defensibility yeah for what it's worth my viewpoint is that the industry kind of is harder org is getting more complicated for younger companies from s capitalized companies it is true that the scalar but you don't need a 20-person like you a department today to do the sort of excel sheet you know driven campaign optimization and all of that stuff is moved into a black box from you know for mobile gaming companies and in a similar way you may not need TV ads if you are good at building out an influencer and community driven content creation strategy that is all true however the underlying production value expectations from players and the degree of sophistication of the out-of-game

experience if you like if you jump into you know whatever the gaming experience is itself a match of League of Legends or overwatch or or parent or if you know vainglory or endless black that is one thing and then the production value expectations that are going up all the time on every platform including mobile or for that matter even a match three game if you look at how much Polish goes into those games today it's like these are not cheap things to to create but more importantly all of the mechanisms and systems outside of the match itself for social connectivity for progression for optimizing experiences overall customer support all of Commun all of those things are expensive things to get into they take a long time to make and they take more and more complicated variety of technologies and talent to pull together so whereas if you started a game company 10-15 years ago you could get away with having a core team of say four people and start making stuff you know today yeah you can make the core

game with four people but you are now starting to need a set of different skills and skill sets and yeah it's been compensated by the fact that there's more off-the-shelf products and a more kind of you know broader engines that you can pick from and and other things but it is just it's a it's a complicated place to be so I would say that the skip from a scale advantage perspective I think it's sort of it's almost like the like the curve is if you like becoming I think that now the difference between having three billion dollars and having a billion dollars in the bank is maybe not so big but there's a much bigger difference between having twenty million dollars in the bank and having five million dollars in the bank than there used to be previously yeah I'd say some extent although I do say when I when I look at you know the competition out there as riot moves into new genres I mean I think we're equally scared of you know three kids and they're in their garage as we are Amazon and and Google launching a game in our space right it's like for all the thus the advantages that that Fang has in there and their core businesses it's not helping them in gaming whatsoever you know as from their

recent launches yet you know startups are still making big splashes with with pretty minimal budgets and so it's it's an interesting space but yeah I consider you know scale is it's definitely a nice to have and does give you know companies like us some some meaningful advantages but you know it also brings disadvantages of bureaucracy in size and things like that so you know and and and water down culture which I think you know hurts places like Amazon gaming and so yeah I'd say it's it's not a huge factor one way or the other although you know on the margin it can be so maybe that's a good segue into the next topic which is how can game companies actually build greater long-term defensibility and if I'm interpreting some of the things that you're talking about Christian it sounds like you're suggesting at least for smaller companies they should be thinking about scale in terms of having enough capital to compete you also talked about trying to integrate like social community aspects into game to

try and build more networking defensibility and then we've talked about organization and culture and maybe that that is something that existing game companies should be thinking more about but would you guys agree with that and so if you are thinking about some of the game companies out there how can they actually build more defensibility I don't know if this gets them today fangore disney level but yes as christian said they have a lot of the game companies fail because they don't think about the things outside of just a game so it's the live services it's the community yeah they need to be thinking about that but I would say that same thing to an indie developer and that's where they often kind of kind of falter I don't know if that's enough to bring them to the you know kind of Disney Amazon level of defend ability there it's yeah you have to build that organization and be thinking ahead of how are you going to be creating franchises that are sustainable and it's

either through acquisition or through internal that's you know again if the goal is to be a you know long-term defendable companies here let's say ten years in the game in this channel think you can talk a hundred years at all but even if you're just looking 10 years you need those franchises and you always have to be thinking does it have franchise potential can it grow into a franchise how do I grow it into a franchise and then it goes into a Christian saying it's like it's not just and everyone's saying but it's not just about building a product you have to do everything not only do everything you have to do it really really well your life services have to be great your community management has to be great everything that we we've hit on it you we have to be coming well I guess you know an Amazon and an apple are great companies you have to be a great company and to be blunt and we kind of joked about a beginning you know it's like there's a lot of game companies right now that maybe have a lot of the oment even when we were talk about culture they're not great companies they don't have a great culture they're not focused

on doing these things great their focus either very short-term or they focused on you're putting out a lot of features or things there's not that many game companies that are focused on being great and you have to be I think if they're gonna be around in 10 or 20 years yeah and maybe we could even look at specific examples like right now when I talk to people in the games industry about zinger for example what everyone's like yeah Zynga is like such a fantastic awesome company I have more consuming and imma just to be clear on the fan of Zynga but when I think about long-term defensibility and I see like the current growth and from a revenue perspective possibilities you know I mean it's kind of up and down but I don't like the fact that Inga for example we when we talk about for example original IP or organizational defensibility and you know that basically all their growth recently has come through M&A and when that slows down what happens for example I I feel like you know that

they're an example we're certainly like short-term and for now they're great and again I'm a fan but I do have concerns about defense ability for a company like Zynga I think if they're gonna be a great game company you have to create great games yourself you can't just buy them and I said yeah they got the launch services probably nailed and maybe even the acquisition in the M&A side they're getting smart at but I have that same concern it's like they haven't proven that they can bring out new games that are gonna you're gonna do anything I guess what I would add to that there is and I'm again like I'm really a game company builder more than anything else and I think what I've come to really appreciate over time is that whenever you build a thing like long term sustainability comes from a series of short term sustainability is if that makes sense in terms of the first thing you need is a team and then you need a little bit of money that's gonna anybody particularly in today's world the thing that's interesting is you used to be able to raise like a you know a seed round of a couple of million and put out

a product and then raise more and even sometimes like in when I started you could you know raise the seed runner you have three shots you know you allocate like half a million bucks or three to you know three four hundred K per product and you try to make it like you quickly kill it if it's not working and then do the next one kill it it's not working to the next one and then you know raise money off the back of the one that is working right and today that's not the case right I mean you just can't do that so what you have to do is raise enough money to be able to make a prototype so that gives you enough you know so that you can somehow convince people to put in more money I to make you sustainable for the following year you need to get a product out as soon as possible to then make you sustainable for you know for for being a single game company that is profitable like you need to get to that point they need to worry about how do I now create something that I can create multiple games off the back of it some level of reliability as you like play to my strengths so that somehow whether it's the community or the IP or the technology or the specific angle or the specific platform or specific distribution model like really focus on

like you know getting your claws into some some part of the industry to create that short term sustainability and it always unfortunately in the short term for the longest time it will come down to financial stability and can you do you have enough that you can go and invest deeply into the things that you want to invest in knowing that it's okay to fail because gaming is risky in general and so the thing that I admire about Zynga strategy is not so much is this the way to create the hundred-year game company it is more compared to where they started or well didn't well let's say like that point five six years ago somebody mentioned earlier with like hey you have 1.5 billion in the bank when it's a friendship ball joint for example thing I admire is that any fine the situation as hey or maybe our internal studio isn't set up correctly let's figure out what is that what does this company need to look like in five years time well we need to have several top ten titles in different categories and different genres one way or the other right because that way we are going to create financial strings for ourselves to figure this out and so then going ahead and acquiring as aggressively and successfully as they

have done in those spaces is that the recipe for the very long term probably not but it does buy them the next five years in order to figure out you know figure out the rest yeah to your point Christians have long term sustainability you need to be around next year and exactly so like I think that they the art is like and ultimately even this is what I find so interesting and why I find running game companies so fun is that it's always as such a trade-off between trying to figure out how do we do something really awesome today and how do we do it in a way that we can also do awesome things tomorrow and we can be more sustainable whether that's everything from how to manage like you know people's working hours and like like how much effort is being put in all the way to how much of the tech that you're building should be kind of platform eyes so that you can then make it easier to do the next thing versus how much it's just we do what it takes in order to get the product up if that makes sense and all of those they're super nuanced decisions and back to the talent point you need to have a team that can like truly trust each other's viewpoints and calls in some of

these areas of like I always want to product out as soon as possible but I need to have a you know I need to have a CTO that can tell me that you can probably get it out in that time but you're gonna be in real trouble in six months time because we wouldn't have done the things that you would you're gonna be screaming at me for why our live ops are they so slow so like figuring out that balance of sustainability like on the one hand short-term velocity and on the other hand building for sustainability on the other hand and it's they are really really interesting nuanced calls that you need a great great team and a great culture and lots of individual talent and talent density and lots of listening inside of the team to again make your best guess but they always guess it so you may get him wrong right maybe as in another example yeh a Nintendo certainly well capitalized that I think what we're seeing from a defensibility perspective with those two companies is their inability to make the platform transition to the Lloyds earlier point in terms of like capitalizing well enough on mobile and in fact you know Nintendo is kind of retreating from from mobile to some degree EA has been kind

of struggling with mobile as well so I'm wondering from a defensibility perspective when we look at some of those companies how would you think about improving defense ability for those companies yeah I mean Nintendo has the IPS which give them some degree of defense ability over time but yeah they need to survive platform transitions I mean I think if I were you know not that I'm in a position to give them advice but I think when they do build these teams you know the christian was talking about aqui aqui you know you need to have several members of that team that are just passionate about the the genre the space the games are trying to build right like you know at least in our experience Riot if we're going to build at a cuter you know a meaningful portion of that team is going to be people that have thousands of hours and tax shooters and if we're gonna build a collect a little card game it's the same and so you know I would think for for Zynga in almost any category you have passionate players of that and of course you need the other okay you can't just be a passionate player you have to have the talent you have to have the business

sense you need to surround them with with people that they work well together with but sometimes that seems to be lacking when some of these companies are building games in different genres you know they they see that it looks good on a spreadsheet and they build it with with that in mind but not with the the passion that ends up making all those micro decisions more effective and and and you know creates an overall vision for the game great and maybe as a last example my favorite mobile company and I'm sure a company close to your heart Christian supercell have how do you guys think about super cells defense ability certainly I think that you know they've done amazing but if you were to think strategically about how super cell should increase their defense ability how would you guys be thinking about it I'm in no position to offer super cell any advice and the last like major you know back when I was in the on the board they had it's gonna play Michael in my carries filled with these these types of

stories that always keep me keep me incredibly grounded on there they were about they were had been working on boom beach for a long time and their product lead you're right they are really independent they were certainly back then I haven't you know I'm not super close to them at the moment but they are very very independent cells the idea hey let's get the best talent in the room they'll make the game they will decide when they launch it and when they kill it and all sorts of things like just a really really good culture for that moment in gaming because you could make games with like a 10-person team and if you get the best people they will make the best games and that's like being the super self motto from the start anyway they were making boom beach they had they were I was part of the internal internal test flight for a while and I wrote this like at one point in time I wrote this really long essay to the to the dude driving it going like hey listen I mean like I'm not 20 hours into this thing and I you know you make the call like obviously I'm you know this is just one player's opinion but like to me this like this lack social elements to me it's like it feels incredibly on Rails it feels incredibly predictable it feels

like a poor like the poor step cousin of clash of clans with zero social systems or any kind like I don't you know in my mind as a player I would look at this for like a couple of hours because it's super cell I would try it for a little while but I can't you know for the life of me I can't understand why I would either stick around or you know pay money in this game so like obviously is totally your call but I would think about maybe like have you thought about just literally going back to the drawing board on this particular product like this long thing like you know basically advocating that they should probably not like I mean you know put it maybe in beta somewhere about likes they should really think about killing it and the guys hey thank you so much for the thoughtful feedback we'll stop working well we're launching it I said I forwarded when he broke a billion dollars in you know keeping the revenue afforded him that email going I'm glad that you're shot calling this and not me if that makes sense so like I do think that it's it's it is enormous ly difficult like gay making to everybody's point is like it's a subtle art and needs to be driven by inspiration and by

folks who are really really deeply into that product and deeply into that genre and have a really superior understanding of what Claire's are after like on a really subtle level not just on a superficial power point level and and as a result I think the like folks like supercell they have had a for a long time a really really good way of doing this now you could argue that gaming has moved on you know maybe the type of games and how we make games on we'll make games of the next 5-10 years might be a little bit different so the question to me is like Dedham and they have an amazing culture or is that paired up with the kind of tools tool chains kind of that are conducive to larger projects because you will need to put more people on this and it's ultimately what killed a bunch of companies between let's say PlayStation 1 PlayStation 2 transition PlayStation 2 PlayStation 3 transition in terms of production mileage it's just that how you like how technical art works for 3d 2.5 D type games versus how it works for say you know some of the

things that right it's working on right now it's just it's a really different way of making games and you can maybe no longer locked in people in a room and create a competitive product if you're interested in those broader categories and that way of making products so to me it would be like some of those like it maybe not so much talent or culture or certainly no financial strength but maybe maybe looking at what kind of like what is the 10-year horizon or the style of games they want to make and are they set up correctly from a and have they built and dedicated enough time to say toolchains because they didn't used to at least have a centralized team to do any kind of central tech because they were so believing in these distributed teams which may continue to be the right thing although a lot of people today would say you probably should at least think about a technology strategy that he said you know has some centralized components but anyway I mean that's you know like that I mean no position to offer any advice they've done incredibly well you know throughout so it's very you know it's probably even less qualified to provide advice to supercell but it just kind of thinking strategically I I do feel like

some things that they could think about would be one if we agree that IP is a critical defense ability for gaming companies that that I actually believe that they have incredible IP in terms of the clash IP but then to broaden that beyond the mobile audience whether it's taking across different platforms console etc I I think that would help increase their defense ability I also think that from an organizational perspective it does seem that you know supercell has I would say maybe if supercell could think about organizational scale right and so like in terms of skiing their company outside of Helsinki and being more of a global organization rather than a more of a Finnish focused company and then probably the last point is you mentioned in terms of like decentralization that has worked really well for them but if you are - if you do believe that you can get some advantage through scale in terms of investing in a centralized

infrastructure infrastructure to your point Christian and then maybe not like the last point I would make is that that the organizational structure of supercell in terms of small teams around games that don't have a big content treadmill would limit the kind of games that you can make to you know kind of smaller PvP multiplayer types of games but then to then try and think about how you would support other kinds of teams for other types of games would be again my very unqualified advice to see supercell I know if you guys have any other thoughts as well I mean I think you hit on one that really resonates with me it's like I'm not gonna give advice to supercell I feel I hit a critical doing that but I like the idea when you said like getting beyond that finish focus in terms of you know if they are going to stick with the decentralize so many the to work against each other why not have teams and different Gio's and

really places where there's a lot of cognitive diversity so you know if Finland's are relatively homogenous place because it also goes to having this stream of games and have a you know it does come down to even for the best companies two shots on goal even the Disney's in movie some of the movies are gonna fail so if they're really good at the decentralized small teams thing you know maybe put some teams in Eastern Europe and eastern United States and East Asia or whatever you know and and and guess you know that's some new ideas and you know get them working together that will probably be yeah I think they probably already have probably the best chance of having one of the best chances at becoming minuted defendable game companies but getting more shots on goals and different shots on goals with it you know bringing in a different mindset might be something that will be worth trying yeah when we were working on team fight tactics you know after the launch of dota Auto chess which we were all playing a lot of it was so much fun and the biggest fear I think that I had was

it was it supercell you know we put together a 15 person team and come out with a mobile auto battler using their IP that and with their with their you know development capabilities and talent they could have created an incredible Autobot alert on mobile probably more efficiently than anyone and I was actually surprised that and you know we heard they were about to launch a game and I thought oh here it comes and then it was it was rush Wars and and I was kind of surprised that they didn't you know that they didn't attack that space which you know it's probably gonna be a billion dollar game over time and so so yeah if I were them I would probably think back to why you know where what has happened with innovation and they've they've had such incredible success such an impressive company with several billion dollar games but you know I don't know how long it's been since the last release that was on that that path it's been a little while now so you know that maybe it's maybe it's the you know they've gotten too big for their tech or their capabilities or they're they're too insular to the where they're located as you both mentioned but um but yeah I

think they're you know they certainly have the potential to be one of the defensible companies if they can keep the innovation train going yeah actually I have a controversial to make it that I actually think the for sustainability you have to have meaningful failures reasonably frequently because I do think that part of the issues with like why do you become slow you know pretty much whatever your size might be is that if you have something good going for you something that has worked something that's proven like either explicitly or just implicitly just subconsciously it's proven that hey this my way of doing this thing is working at that moment in time you stop questioning yourself you stop having the kind of paranoid you know nightmares about all the ways in which you're gonna fail and you stop kind of having the kind of aggressive hunger that you always have to have both I mean in general as an entrepreneur but especially in the game industry where like the status quo never stands still they constantly keeps moving and like in it's interesting even I you know I do a fair bit of seed investing and workers

just because I enjoy working with entrepreneurs in gaming and it is incredible how often great outcomes and great teams get built out of a recent failure and the sort of the rage and the corrections act of that sense of I know exactly what went wrong here I need I'm gonna figure it out I'm gonna fix it and you know to some degree even that's part of the supercell origin story I suppose but but there are many many other examples and I think part of the kind of to create real long-term sustainability you need to figure out how to sustain that fire and maybe sometimes you just need to arrange a strategic punch in the face for the whole organization to kind of shake it because culture is a great form of Defense ability but it can actually almost become your enemy over time if you have a culture that understands and believes that this is the way to do things we have a good thing going we are things are going well then why question anything in some ways you kind of though I guess the human mind wants to feel safe and at that moment in time you know if you have no reason to not feel safe you're not feeling safe and whatever is going on

kind of culturally ultimately ends up reinforcing that state as opposed to question in that state so and again I don't know that there's much advice in there but I do think that a reasonably high profile failure every now and then it's pretty important to keep you on your toes and remind you whether it's as an individual or as an organization that you know you interesting moves on all the time no matter how great you were yesterday you need to make an amazing product tomorrow in order to remain relevant and maybe as the last example mark since you're here in terms of right how are you guys thinking in terms of long-term defensibility are you you know not not that we are asking you to release the secret playbook but just in terms of like how you're thinking about it strategically be great to understand how you release the secret playbook also that's okay yeah I've touched on it a little bit I think you know when we look at the levers of defensibility that we've talked about I think the the network's effects and the scale are ones that you know riot is benefiting from

now but can only take you so far I think the the brand is really where you know we're leveraging our future you know both as I mentioned what the riot brand stands for and and how much of a built-in audience will have every time we bring in a new experience because of the the trust and the excitement that people have for the right brand and then also the ip's we just think there's so much potential to you know as Nintendo has done with some of their IPs you know we think that that's what we're striving to do with with the League of Legends IP which is why we've invested so much and you know every aspect of it not just like the eSports side of things but the the music the videos the you know all the different CGI that that everything that goes into developing those characters comic books you know it's and so the backstories are being built out the universe is getting more interesting and more complex over time and so once you have that foundation there's so much you can do on the back of that and and it was actually a tough call with Valerie do we put that in the league IP or not and it could have gone either way but you know eventually decided that for

that game and for that genre it needed its own IP which is which is quite different from the league IP and so you know remains to be seen it if we will equally invest in that over time or if that is more of just a one-off it's its own little world but um but yeah I think brand is is where we think the defensibility will come from in the video game space and so so that's probably it the primary focus and then just moving to the next section what kind of management team do you guys think is required to help game companies build this longer-term defensibility now you know when we think about coming like Amazon and think about where they would be without Jeff Bezos or facebook without Mark Zuckerberg maybe the more general question is what should management teams be thinking about to help increase defense ability how should they support long-term defensibility in their companies I mean I think one of the things as Christian said there's a lot of elements to it so there isn't it's it's in the game industry is probably going to be less dependent on one person

and you do need that robust management team that can support design that can support your live services could support your UA with you know great people in each you know I do think you need kind of that design visionary you know and I don't even know if they exist yet in the game and this unique kind of the Johnny I've course if you're going to be a long-term defendable content company or some someone close because as I said I don't even know if they exist in our industry yet so you do need someone who has great product vision and can connect with consumers and you know it really drives that but you also need two people who are going to and the technology infrastructure and the conversation we just had about supercell and you know the potential weaknesses there I think the important thing is having that robust management team because it doesn't come down to one rock star games are a really complex business they probably I wouldn't say that more complex than Amazon but they're more complex than you know they're more complex in a movie and I think having a team that can support that is really the

critical element now I was going to say I actually think I would say that there's like four of four most critical components in my opinion like if you have to like try to narrow it down to the least amount of people I do you think that you need first and foremost somebody who very strongly empathizes with creative leadership and passion and the player of understanding like at the very foundational level of games is entertainment and games as this you know alchemy of culture and arts and all of these things which and can go on and recruit great creatives can go out and recruit build great teams and figure out how to kind of do the sort of the very basic trying to inspire talent to join your thing because that's super cell model of the best people make the best games simplistic as it sounds is true like it's a this is an industry that is insanely talent and city roulette you know focused so being able to recruit really great gaming industry

talent is and keep them overtime is probably the single most important thing I would say as I've said throughout I guess that I feel like the most underappreciated talent but which is insanely important in gaming is figuring out the financial side of it like whether it's what Zynga did in terms of growing okay we may not have all the talent we want at the moment but hey let's figure out our you know financial sustainability let's go acquire let's go do whatever it takes to create that medium term sustainability to give your own creative to give that other guy who's gonna figure out how to build the IP and do all the other stuff you know give that person the space I do you think that the third person you're gonna need is somebody who has a pretty deep and humble understanding of the technology bits in games because we're seeing such convergence right now between the methodologies the tech stacks the ways in which like you have like this explosion almost Cambrian explosion of types of games gaming devices that can play games and there's a lot of individual bits of knowledge

that go from making Triple A games to console all the way to making the hyper casual you know hyper casual experiences on mobile which are all relevant to how to make great games over the next five to ten years and having somebody who's intensely curious about the tech landscape and making really good tech choices to build some kind of sustainable technology advantage or approach advantage at least over the medium to long term I think is is really important and then finally I think you need somebody who is deeply and equally intensely humbly curious about all things to do with data behavioral psychology and sort of modeling in the most broad sense of how to instrument everything how do how to interpret what's going on again notice you can build teams in these areas but like who's cool kind of is very very driven by hey what can we observe observe versus the sort of the yang to the you know of that first guy who is going to be building creatively awesome inspirational product and if you can get

those four people don't stand each other and to find that sort of Venn diagram you know center of things which will work for all of them I think you're off to a good start yeah I think that makes a lot of sense and I think getting back to the question I think the founders you know of Facebook and Amazon we're so critical during the early years and and you know the important lessons over time but only because they they bring in those teams that have all those key capabilities and they establish the the culture you know the mission the values and like you know I don't think the words on the paper are too important when companies write down mission statements but to the extent that it's something they live every day and drive every day like it actually you know it can be it can be pretty impactful and I think if you look at like the the stated mission statements of the faying companies you can actually see the defensibility that they're going for like coming through in those statements right like it's Facebook's mission to build community and bring the world closer together that's you know all about the network effects and and

Google's organizing the world's information you know building something unassailable Amazon is you know Earth's most customer centric capability where customers can find it discover anything they might want to buy online and again they've created massive defensibility through that whereas if you look at gaming companies you know a lot of the mission statements either talk about the kind of talent they want to hire which is important or they talk about you know creating blockbuster franchises and commercial success which again is important but that's not necessarily the the inspirational you know goal that's going to create something defensible over the long term so I think that might be a good place to start you know for for startups or companies that are that are looking to create something defensible is figure out what it is they're trying to you know create for the for the gaming world that hasn't been done before that's better than than anyone's doing it and and you know build off of that okay great maybe we could end with one final question and so I'll so if you guys could just talk about what who which game company do you believe has the best

chance like besides $0.10 of being around a hundred years from now and if you have a final message for our audience maybe we can end on that note maybe starting with you Christian I think my connect failing again it must be I'm pretty sure somebody else wants to start this one just kidding I actually so right now I guess if I had to pick up two companies actually that I admire at this moment in time in terms of their and not so much their current position although it's strong but rather their ability to kind of maneuver if you like and in reinvent themselves cuz I do think that that reinvention almost like the second derivative of change like it's really important because you do need to remit yourself with you know reasonable frequency and so I would actually pick epic and I would pick riot for the reasons of like from from epic obviously going having an engine company that also deeply deeply cares about games led by a guy who deeply cares about games that has successfully not just because they

made 49 but rather because on the one hand yes they made 49 they used that to really push into mobile in a big way and really begin to fundamentally rethink their take an approach in such a way that you know what their engine is meaningful to the mobile gaming crowd but at the same time really innovating in areas around LiveOps and the whole media blamed or whatever you want to call it are bringing in rock concerts and 192 49 which is just to me shows like willingness take risk despite the fact that they're hugely successful already pushing it and kind of taking risk in different areas in different ways to me has been like and compared to the company they were like five years ago and then opening up a store taking on Android you know all of those things to me this shows like a company that's that's not satisfied with the status quo I'm sure for tonight was you know ultimately come down and although I think it's enormously resilient my family squad we play every day right so like I feel like it's resilient for lots of different reasons but I just feel like they've they've done such good work in so many good directions that I would I think they have a good chance of being

being around for a very long time like again 100 years I think is a ridiculous time to hold but like I do think that they've navigated many many bits of change in the industry and they've led many of those changes in ways which suggest that their culture their setup and their mindset is one that is likely to survive many changes to the industry and riot from the perspective of again going from one game company it's a really hard thing I think to do and obviously if Marc might know this might just might know the story better than you but going from a single game company with with a with very very very very humble roots in lots of different ways to ultimately be able to in the course of a relatively short time not just launch good new games but launch them on different platforms in different ways with quite innovative go-to-market methods and I'm sure like lots of pain and lots of failures also going through some culture or like you know changes so I suppose in a big way management changes but also going through some crises and other things and you emerge at the other end at you know with the strength they have right now I think I just admire that a lot and I

think that gives a that can you know that sort of again the ability to do new things and new platforms in new ways and and be resilient through crisis I think is a good sign for the future again like no pressure mark but like I'm gonna look for you in there but every 100 years you see where you're at well coming from you appreciate that very much and yeah yeah actually I thought your answer made a lot of sense I'm curious to hear what Lloyd well though it has to say but yeah in addition to trying to drive that outcome for riot which I think that is you know that is the goal yeah a pic has done so many impressive things and it is really you know trying to build out that full ecosystem where you know they become the first place that gamers go you know to either hang out with their friends or to access other gain on Epic Games or to you know to build games using their their impressive engine and so so yeah they would probably be top on my list to maybe maybe next to Nintendo just because of the the IP although they need to uh you know they need to leverage it on mobile to make that to make that a

reality but yeah every time you think that you can count in tendo out every time you think yeah they always like backing some new you know unforeseen way so yeah I mean don't make me well they may well be there and that's both epic and Nintendo are so innovative right they they just they do things that nobody else would try and they pull it off more often than not and so yeah I would agree happy I'm going last cuz I'm gonna cheat and copy what I've just heard largely and I don't even feel comfortable you know predicting five years from now because of the game industry but you know the two companies I go with Arabic in the tender so epic because they had repeated successes in different areas so if you look at like a superstar investor or great game company they're the furthest from a one-hit wonder you know starting you know going from unreal to becoming an engine company from being an engine company to go into a real to fortnight you know and huge tremendous successes

in in relatively different areas just gives me confident at a minimum they're resilient and they might not be the number one game company in ten or twenty years but they're going to be around because they don't need ya they've shown that they can create successes multiple times in a changing environment so and I probably have thought of it if Christian and Mark didn't talk about it first so I won't say it and the other one that I would have probably brought up instead farce is Nintendo even though they have struggled with free-to-play even though they've struggled on mobile you know to me this industry is still about creating great content and that content translating into franchises which is sustainable and you know again they've been able to repeat creating great content now for you know tens of years which you don't see very often and it's not in different content and different different genres and I'll bet on content all the time so those are the two I probably go with but my guess is it's

probably someone we haven't even talked about today yeah I think from my perspective I would actually cheat a little bit and just in pick roblox you know as a not a pure content company but because they own a platform they have Network effects they have a brand effects they've got all sorts of defense abilities and they have the potential to actually expand out to other markets and things like that but anyway I definitely want to thank you guys for your time we did run along just because I was so interested in hearing all of your responses to things and I don't have that many opportunities to speak to guys of your caliber so definitely appreciate it and yeah thank you very much for your time but that'll do it Thanks thank you thanks Bobby [Applause] [Music]

[Music]