External and Internal Forces Shaping Voodoo and Ubisoft’s Strategy - Naavik Gaming Podcast

[Music] I have a lot of questions um and not all of them are bad I one is just I think there's still is a lot that we don't know right like we don't know exactly like what is the economy design going to be [Music] hi friends welcome to the navic gaming podcast this is the one podcast stay up to date with all the latest game business news because we are the round table segment and I'm joined by Aaron Bush co-founder of navic and Anil Das Gupta co-ceo and co-founder of FirstLight games hello howdy all right well we're going to jump in to a little more drama about Microsoft's Activision acquisition so Aaron what are now the latest concerns that we've seen

yeah fun update so there is more mounting risks and pressures around this deal and really they're they're two small updates here that I think we can break down the first last week both Nvidia and Google filed concerns with the FTC about the deal and if you think about it it's kind of obvious why Google competes with Microsoft on many dimensions and doesn't want Microsoft to get any further Edge anywhere even though it largely doesn't compete around gaming especially since stadia is shutting down and Nvidia of course has GeForce now as a subscription cloud gaming service on PC and Game Pass is a clear threat to that even though Nvidia and Microsoft work together with Azure and other ways um so so there's that I don't necessarily think that you know these companies find filing concerns are that big of a deal and in some cases it doesn't even mean that both of them are 100 opposed to the deal it's just filing concerns about certain parts of what might happen but either way these are

big giants in the industry um and just in the world in general so um it's worth noting but second and what's more notable is that it's being reported that the EU regulatory body will likely object the deal soon and this is off the heels of last month when the FTC and the US filed a complaint against the deal as well both of which you know still might go to court and get contested and you know there's often long drawn out legal processes to these things but even so like again that still is pretty big news and again it's it's completely reasonable to have scrutiny around this deal it's big and you know yes even though it's not monopolistic in any way it still is a source of consolidation in the industry and that's worth paying attention to and the converse stations around certain major IPS namely Call of Duty in this case not being made exclusive is worthwhile and it's worth noting that you know that's

also what Xbox wants um so and if there are any concessions hopefully that could go smoothly but there is a part of these conversations especially from Regulators that I'll just say kind of bugs me and and that's nothing new because people know everything Regulators seem to do bugs be in some way on this on this podcast um but um it's almost like in this case Regulators have a simplistic lens of viewing the market today in which if a tech company gets bigger that in and of itself is considered bad bad the whole big Tech bad you know is the predominant narrative but that's so over simplistic and what these Regulators I think are completely missing about this deal is that it actually increases competition in the market namely business model competition and if we look across the entire history of the games industry treat nearly all leaps of progress that have shaken the industry up in some way happened when new technologies enabled new business models and today

cross-platform and cloud gaming wrapped up in some subscription you know is an exciting new business model that is good for consumers and poses to potentially shake things up in the market and these Regulators are acting in ways that preserve the status quo and stifle business model competition it potentially doesn't allow the market to to change as fast as it could which is actually the opposite of doing their job if you think about it so I mean obviously I have my my own opinion on what should happen and you know kind of the flaws and some of the the thinking here that The Regulators are are pushing out but hopefully you know whatever the decision is whatever concessions are come up with or whatever the reasoning is I just hope that it looks past you know big Tech bad and like like truly grounds it in whatever happens in something a bit more logic otherwise it's just sort of a sad State Beyond just like even like this one deal but just kind of how governments are

treating the the business World At Large so that is my update there okay well on to Amazon game studios so what kicked off um me deciding to do an update on this is that John Smedley is going to be leaving Amazon game studios after six years as a studio head I thought well let's go and check the pulse of what's happening with the studio and then I realized actually 2022 was a pretty quiet year um there wasn't much in terms of news I found nothing talking about first party IPS if I go and read the Studio's Mission they still talk about it but there's no update on it and so I also looked at the Amazon games job board and there's not there aren't no open roles for new IP um the dev roles are focused on new worlds so my read on what's happening with Amazon game studios is that so new world and the successful publishing of Lost

Ark early in 2022 I think it proved to potential partners that Amazon does have the experience to execute to deliver a large scale launch um in terms of multiplayer games and then I think the recently announced exit of the studio head and also around March last year of the VP of games Mike frazini it could be an indication of just a change in strategy overall of trying to develop their first party games and their own IPS and just double down on what they do best which is publishing and so I think just this makes so much so much sense for Amazon game studios because I think they're just in this unique publisher competitive space where they have the brand name to negotiate these Great Deals they have multiplayer online gaming expertise and a tech stock that they can offer they have Integrations with prime gaming and twitch they have a history of operating and executing Global Marketing

strategies and so that's what I trust Amazon to do and I think an Evidence of that is they managed to have the deal with Crystal Dynamics to publish the next single player Tomb Raider game which is also meant to be based on potentially a trans media um strategy which again is something that Amazon can provide especially with prime is it Prime video is that how it's called I'm not sure anyway and then also the publishing deal with Bandai namco's blue protocol m-o-a-r-p-g I mean I think it I think leaning into publishing can make sense I don't know what kind of terms they're offering companies or exactly how they're competing to kind of lock these down um so I'd be curious about that but also I mean this is Amazon they just always continue to take shots at things all over the place so I have a feeling that they're they're actually not done at like taking shots at the games industry I don't know if that means taking other big swings at you know

creating AAA games themselves or you know leaning even more into more like the developer like Tech side more or or something something else completely um but I have a feeling this is still like pretty early in their journey to figure out where they're ultimately trying to to take all of this but of course refocusing kind of as you go down that journey to kind of ease out of what didn't work and ease into what is working I think that that makes sense do we know if those positions were filled internally of the recruiter externally to replace those positions because they're pretty senior positions to have left I know that the VP of games has been substituted well backfilled I should say really yeah um for the studio head I don't know I'm I'm going to assume that they will I didn't see anything open on the job board well I have got as per Aaron's quite I think it does kind of remind me a lot of Riot games in that Riot games for the longest time were jokingly

called Riot gay by a lot of people in the industry right because they only had League of Legends and they were supposedly working on new IPS for years and years and people like yeah whatever and then eventually you did get team fight tactics and you got valerun and you've got project L and some of these games did really become quite big successes and my understanding is that internally you know they cut a lot of games they had like such a like ferociously High barrier of what success would mean that you know they were quite willing just to do it because they're like well it doesn't really matter we've got the cash cow now Amazon doesn't have a cash cow in terms of their gaming experience but they're certainly not under pressure unless they've got orders from above so you want to cut it so look it's hard for us to really make a judgment one way or the other right we don't know what happens behind closed doors I would agree with your appointment Maria I think on paper it makes way more sense to go that way because I was going to say that making video games is hard like News at 10 right but it really is if you don't have that culture it's it's come up quite a few times in our previous metaplace right as well how you know a lot of these tech companies think that they can

make games and they just find out that that is a whole different just because you're good at making texts I mean you're good at making games um I also agreed that like the sort of opportunity of making successful gaming is so strong why would someone at Amazon just go sort of like the sort of low win route it doesn't really feel like them as a company you know they do tend to take these big shots because if you win really disrupts the industry it's like a huge impact on it whereas if you just became another publisher and support I'm sure that'll be a profitable business very profitable but it's not really gonna like Drive stock value or so on and so forth so I imagine that they still have some things in the works I think if anything they they've not been shy to producing fans completely I don't know if you guys remember the ill-fated Amazon phone that they tried you know back when everyone was trying to make their own mobile phone and hey that Amazon is a company that could make it work if you ask me they've got the logistics they've got the technology they're able to recruit the very best but they can do it pretty early obviously deciding that no that it wasn't there this one has been around for a long time they're still going so I think there's still life in the old uh

horse yeah as they would say okay well maybe maybe I will be proven wrong in the future I just can't find any evidence of them still investing in that first party IP apart from continuing developing a new world and expanding his content oh yeah we'll have to wait and see then okay we'll see hey Maria could I give one more quick update before we we jump into the discussion an off-the-cuff update yeah this is kind of off the cuff but I was thinking so um last night I watched uh The Last of Us the TV show premiere and it was really good and so I just wanted to throw that out but more importantly I I was looking at the stats and um The Last of Us was HBO's second largest series debut after House of the Dragon in the past 13 years it garnered about like five million viewers um just like that opening um which is pretty incredible and so I mean obviously you know good good start probably a good show but I just wanted to call it out because I do think that

it kind of is a big moment um you know we've seen a rising trend of improved video game adaptions but to me like like this one is like the marker of like the new golden age or just like showing like what truly is possible at like the Pinnacle of video game adaptions and so um hopefully we'll see more more things like this and that the show itself continues to you know stay good as the episodes um come out but anyways I do think it it kind of like officially marks like its turning points and kind of like the intersection of like video games and and like Game of Thrones proved that fantasy could work on TV and then you have time coming over in everyone wanted their own fantasy IP and they jumped into it so um look forward to seeing your favorite video game as a TV show in the next 12 to 36 months I guess is what we say yeah yeah and hopefully hopefully more um but yeah more teams make sure that these adaptions are good it still has

been hit and miss and like even with like fantasy right like Game of Thrones is awesome but other things have been completely hit and miss we have to expect the same the same kind of trend here but hopefully the heights that we'll continue to see more going forward will just be just a a new level uh much higher than what we've seen in the past so anyways just thought that was that was cool I don't know if it helps that more and more people play play games especially as the movie directors are aging in terms of their talent you have extremely professional excellent movie directors who are also games Gamers at heart at least what I've heard about Last of Us is that it is someone that has played felt and understood through and through the emotional Journey that the player goes on and they're trying to replicate that Journey not without all by including all the details that happen in the game but trying to make sure that they're hitting on those emotional points Aaron you have the the Ubisoft update yeah let me pull up my notes

um so last week Ubisoft published a bunch of um negative leaning updates and an investor letter titled Ubisoft strengthens strategic focus on biggest brands with live services with a new set of measures cementing long-term growth and value creation prospects so I think that the pr person who is tasked with coming up with that title baby baby went a little too hard uh I'm trying to make uh find a positive spin on what was actually you know in in the message um but in short like what that message entailed was that Ubisoft canceled three unannounced games which is on top of four more canceled games uh last year and the rationale here is that the company wants to focus more on live Ops of existing or more promising games I guess um also Skull and Bones was delayed again I think this marks the sixth time that the game has been delayed which is a pretty remarkable feat

yikes yeah big yikes um and then furthermore the company naturally because of you know those updates reduced its Financial guidance again lowered its booking guidance 13 for the year and it announced the 200 million dollar cost reduction plan over the next two years so in short there is not much to celebrate here in this message and sadly this type of announcement isn't new um and we've we've kind of seen an ongoing trend from Ubisoft over the past two or three years of you know missing targets um kind of maybe a strategic lack of focus on some of their new Ambitions that haven't really panned out and we've talked about a bunch of that in previous episodes over over time but before we even just like dig into like the specific announce changes and where we think Ubisoft will go next even because

of some of this um I I would maybe just like to take a moment to hear your thoughts on like why do you think that they continue to underperform time and time again like why is this not fixable for them yeah well I think it's a great question I think for myself if you would think about Ubisoft what do they stand for or what are they good at and that's kind of hard to put into context right if I think about other Publishers like EA they make great Sports titles they're great at doing that right you know take two open world Ubisoft I suppose you could say open world but that really means kind of Assassin's Creed maybe some of the other sort of Far Cry things like that but other than that they didn't really have that much history of sort of making something carving it out and being an absolute masters of doing that I actually think that in the past they had some really talented people that are like Jade Raymond Patricia celier you know who started sort of Prince of Persia Assassin's Creed I I don't think those two are with the company anymore I'm sure they still have talent there but they I I would answer by saying I

don't really see like what they you know the USP is what is the unique thing that they do I mean I I do compliment their time I think they try a lot of shots they try many different things but you could say that they try too many different things what is that they call a thing that they're good at um I like them I think like codemasters were a really good example of this where that was another company that kept taking many many shots is about 10 12 years ago the new CEO came in was like what are we really good at we're good at racing games so let's just be the best at making racing games and if we do that we're gonna get a choir that we're going to get bought our IP or whatever and sure enough it happened because it turns out that they really do make the best racing games so why are they consistently underperformed because yeah I think that they're getting a bit stale I I would you know trust Ubisoft to make a great Assassin's Creed game a greater number like open world game but what have they really done it's like even halfway Innovative in the last 10 years I would have them down to be like a very solid company you're probably gonna get seven eight out of ten on every game that you play but I feel they've been left behind a little bit so that happens

is a little bit harsh but um you know I think the last time we talked about Ubisoft and I swear that Ubisoft comes up a lot in this meta class that we talk about it always seems to be like a topic and they were going to put a lot more Focus towards mobile which sure that makes sense but it's like you know well that's kind of late in the day right and you know if anything mobile is actually for the first time started to see drop in year one year revenues which is global recession plus covid you know aftermath etc etc but still it's you know really late in the day and you still haven't really made like a huge acquisition like we've seen some of the other companies so again it just feels like a bit sort of chasing their tail rather than you know really going for something putting them with their the you know the flag in the sand and going for it or you know they tried their own um blockchain project we spoke about that last year I remember but they seemed to give up on it pretty easily it wasn't like no we're going to really tough it out and get there and yet so that would be my summary is I just don't really feel they've got like a very clear direction or a very specific thing that they're trying to do and be the best at that and um I think that always causes problems with companies the ones

that have Focus tend to deliver best you know overall yeah well it seems to be what they're saying right like they're they're refocusing and so um hopefully you know hopefully that yeah I know on what um and it seems to be more just like live Ops around their most successful games but yeah I don't know what that that really um means either um but yeah hopefully they they learned that lesson because I think you're right uh but Maria did you want to add anything there is following on from what Anil is saying really that Ubisoft makes great single player content deep narrative and immersing you in this Rich world and then they they almost follow the trends that are in the market rather than setting the trend or taking a trend to the next level they were the trend setters in a way of these single player narrative games but they moved away from that to try to do the live uh the live games the live Ops the multiplayer games

and so should they go back and refocus on what they know how to do best for what their organization is already structured and has the talent to do because I think I think I use this metaphor quite a lot like they're a massive truck at high speed trying to turn into a new Direction and so the chances of failing of trying to enter a new segment are very high so yeah they really did something that I think was eye-opening is when PlayStation 3 David they came out of Assassin's Creed and that was like one of the launch titles and it was like really far ahead of scientists are graphically their engine was incredible people were kind of critical of it saying there isn't much of a game it's more of a tech then but then as the years unfolded it started to make sense they've gone really hard into trying to launch an IEP as soon as possible with a new console generation started really investing into the tech so they could set it up as a multi-year franchise and that proved to be an incredible thing their best franchise ever right include total sales and I think that really opened up the

eyes for many because then when PS4 came around like a lot of other companies tried to repeat the same trick saying well that was smart thinking and so they definitely proved that they can be quite Innovative in trying to do something and in that case they also executed against it really well too but I can't really think of any other time since they did that and maybe it's because for themselves they tried it again with Watch Dogs themselves similar sort of thing really big new IP looked cool try to launch it at the start of a new generation this time it didn't work you know sometimes that happens right games is a risk during the business right but then it seems that they've got a bit of Safety First since so um yeah I was just think that's the only time I can really remember and I think that's almost sort of 10 15 years ago that they really tried to do something that was unique and no one else was doing and we're seeing the console Market becoming harder and harder to create a new IP that smashes the charts and this is going to be a very interesting year because there's no Call of Duty there's no FIFA and so what are the charts going to look like Call of Duty and FIFA still probably

even though they're not me yeah I remember Ubisoft announced that they wanted to create this Assassin's Creed ecosystem we discussed it as well I think it was the three of us and so I'm curious if that is what they're going to be focusing on take your strongest IP and really dig into it they have already transmedia opportunities lined up yeah I'm sure that'll be part of it um but yeah I mean I think the focus makes sense and the other part of you know what they're announcing is you know light cost cutting right um and just to put some context behind this um because it is pretty remarkable when you dig in it's sort of and and again none of this I'm saying to be mean this is just what the market is reflecting right um and you know it's but it still is sort of hard to overstate how bloated Ubisoft is compared to other Publishers right now and so I saw um a post on Twitter today that showed that not only is Ubisoft now a smaller company than CD project um which is so Ubisoft is about 2.7

billion dollar market cap the CD project is about 3.1 billion dollar market cap when converted to USD um but Ubisoft has about 21 000 or so employees uh like according to just like recent you know filings and stuff I mean CD projekt has a bit over a thousand so CD project is now a bit bigger than ubisoft's with one 20th of the employees and I'm sure there's a little bit of Apple's or you know comparison going on there with some things but even so like what that really shows is that like even if Ubisoft is going to try to focus in on what it does best it just has so many people that like it needs to you know like figure out what to to do with there and it makes you know we've been seeing layoffs happen across the industry which is obviously really hard for the people that go through it but for like the Health and Longevity of these companies sometimes you do need to take those

kinds of measures and for a company like Ubisoft that like has said hey we really need to slim down our Focus you also probably need to to slim down your cost and they're saying that and they're going to try to save some money but they're not you know pulling the most obvious lever and part of that is probably because of you know like French laws that make it harder and can be more destructive of culture you know when when those kinds of processes drag out and I think it'd be soft you know as a company like they don't want to have to lay people off right but um even so like that's such like a Stark number um that you know it just shows that something is wrong and like the the composition of the company itself Beyond just like whatever their strategy is and so um I don't know how exactly they will want to solve for that or they'll just try to grow into it again but um it is worth noting and it has a pretty big impact on what their margins

and profitability is going to be and therefore the value of the the company at large um so I guess you know where I sort of want to to take this conversation next is I'm curious what other changes need to happen that they're not doing and maybe to kind of kick kick start this off and uh they don't want to hear your thoughts it's just I just want to have a reminder that like as you may recall late last year 10 cent struck a deal to acquire 49 of the Guillermo Family holding company which owns a good chunk of Ubisoft and at the time we said that in many ways this doesn't change the core operations around live Ops or their big AAA games but it might help them level up on mobile help them expand into China and really what it does above all is it cements the guilla family's control and makes and Vector investor activism um far less viable um but I'm almost wondering like if

tencent made the right call there just given how some of this is going and how like some things are trending because obviously like I mean like leadership especially if they truly are hamstrung by like certain laws and can't make the kind of moves that they want to make like that's one thing but kind of the ongoing struggles that the companies had for years at this point around their focus and execution like at what point do you draw a line and just like yeah maybe something will happen there we can kind of dig into like just like potential M A or something that might happen and it's kind of like being reported as being thought through next but maybe besides that like what are other levers that this company can pull besides refocusing besides you know just kind of the simple cost cutting like if you were to kind of like navigate this this company forward like is there anything else that that he would you know say to them or or try to do I I would go through this situation like

that as you need like a new vision every really to sort of give it a new flavor maybe someone can step into a more of a vice president's drug non-executive role unless someone else hold the Reigns I would say with a company with that many people in it it will take five years to turn the ship around like that I think someone like 10 cent would recognize that as well I don't think you'd expect short-term returns or something it's just not possible because the thing is in order to do that you'd have to bring in executive positions and the sort of level we're talking about you would be lucky if after a year you saw any results whatsoever and by results I mean even like the slightest twinklings that they might make like I don't know a half decent prototype that you now want to green light and now that's going to go into development and when is that going to see the you know the air of you know reality and then seeing it I've seen this happen with quite a few companies I think that um some companies who have received funding maybe from sort of like the Arab regions or tencent and things like that and basically it's given them more time to be able to make the things

that they're good at slightly better and then they've seen the results I think the best example I can think of is Capcom which is example I use a lot and I think they were struggling for a while they got some additional funding and basically what they did was a pretty simple but smart strategy is let's just spend longer and make our gigs better and they had Monster Hunter world and then had like Resident Evil Village and now the new street fights for example instead of rushing it out there we've taken the time and unsurprisingly they've never require five if we've played that was really really you know way better than a previous Olympic release which they released with uh Theory actually in the UK so and then yeah funny enough these games because they were a lot better they had record sales right the MC5 so more than many of them went Crying Game I wanted to answer what broke records etc etc so and that's probably what I would advise they should do but I do think that like when you've been in the doldrums for so long once you're kind of alluding to so you do need to freshen help and have some sort of excitement and even if you're just making the same things over and over even if you are just going to make open world narrative games just you're going

to go all in on it right and then and come on guys what can we do to make the End Girls what can we do to make this even better than it was before you know let's really think outside the box um and hoping three or four years time which would probably be how long it takes when the results that come out that you see it I think unfortunately it's you have to say it's not a quick fix in a company that sucks I I've never really worked in consoles so I I just want to be careful with my take because I've never experienced it and one thing I can say is that based on the the French governmental laws because Portugal is similar but France is even tougher than Portugal you you will really struggle to lay off um that many people like you see other countries doing and even with a hint of potential layoffs the French Union is going to strike half a day and is also asking for the four day work week um so the quickest way I see to Ubisoft to shrink to shrink down and have more agility to change as a corporation is to

potentially sell off parts of their business yeah I mean selling I think like is a is a real option um and with a market cap as compressed as it is um it might actually start being more interesting to potential suitors of course like if they feel like they can actually take the moves that they want that you know existing management hasn't been able to do um which might not be viable or they just might have to you know suck it up and let you know like kind of brace the pain that that could come with it but I just kind of wanted to throw out the idea like hey if these rumors do amount to something and they told they might not like who actually would be a decent Suitor for Ubisoft and who who would even want to right um kind of given the the toughness of the situation um there and so maybe I can kind of start out just by saying that obviously tencent is probably like the biggest you

know shareholder uh you know games games company shareholder already and it's probably you know a front runner so like any kind of deal that would be made and obviously has capital and all of that but um beyond that like what are what are the top options if there are any the only one that comes to mind that could have that sort of treasure chest is the Saudi Arabia investment fund but that comes with a whole set of geopolitical uh blockers that could be in the way in terms of France allowing Saudi Arabia to essentially acquire a company that is pretty much like the banner of gaming in France Microsoft could add it to their game or pass just to give those Regulators some more work to do yeah you can come in and you know try to get it to sort of compete with the Game Pass offer from Microsoft but I'm not sure the IPS that Ubisoft have even though they're strong us are quite as instantly recognizable

as um this sort of stuff that Activision Blizzard has or something like that yeah that's where that's where my brain hovers too I think um private equity um makes a lot of sense if they're willing to kind of suck up the pain of the whole working with French unions and things like that um because they're the ones who would probably be the most willing to take more drastic steps that might be needed for better or worse but yeah I was also thinking too the the Microsoft tie-in could be interesting again if they truly are refocusing on their most important IPS and and games that can you know perform at a higher level and last longer like some type of Game Pass tie-in um could be could be pretty interesting and move the needle for Microsoft too but yeah of course they're not going to do that right now given the the current climate um and yeah I doubt Saudi Arabia would

go for a full acquisition as a turnaround um so yeah my best guess would be 10 cent if it were to happen and if not that then probably private Equity but what might be most likely is that nothing happens yeah because tencent also when they made their most recent increase in their stake through the game um pool is that they could not acquire a higher stake for a period of time so they have that against them I think China is going to take a super stock one percent from tencent and not take but I don't know what's the correct word acquire as part of their governmental and governmental policy and I don't know how that might affect the geopolitics of that potential acquisition uh and I think additionally it was already mentioned here that tencent is very intelligent in terms of the Investments that they make and if you look at the bets that they have taken there's some

very smart Investments and I don't know if Ubisoft could prove the the return of their Investments especially when they're already trying to recover from the negative mobile um Revenue growth yeah it would be tough for anyone but again it is at a low enough price so if they are willing to make change changes and they truly have some type of value add like intense case truly being able to take mobile to the next level and unleashing their games across China effectively like that actually could add value um like real value but yeah of course we'll see uh probably nothing will happen and if it does it'll take a while and then you know the Saga will continue under whoever whatever company Banner right um so um yeah we'll see but anyways I thought it's interesting I mean it's sort of a tough conversation to have any time a company is struggling and throwing out ideas that affect people in real life and have ramifications for people all the way up and down the chain and shareholders of all types so

um yeah trying to be sensitive as we we talk about it so yeah wishing the the whole team the best hope you know you all can can uh navigate turn turn the ship around as best as possible I'm talking about businesses we have Voodoo up next yeah well this one's really spicy I would go as far as saying this is the spiciest news of 2023. it's basically at a time we're only 18 days in so you know that's not that much of a a statement but I think it is really interesting so let's do a little bit of a history lesson first before jumping into the news so Voodoo they're actually 10 years old this year which is you know it shows you time flies and what Voodoo we're really famous for is inventing the hyper casual models so two French guys started the company back in 2013 they actually were under a lot of turmoil for the first couple of years and then they still had a strategy of like oh we really need to just get as many users as possible into our game to monetize so you started optimizing and going that way they started releasing a game every week and they sort of accidentally discovered the high potential models so

make as many games as you can get loads of people in they won't necessarily stay there for a long time but they'll stay there for a good time which is watching a few adverts you monetize of them and you know the holes of LTV versus CPI model well you know if your CPI is really really low the LTB doesn't have to be very high and they sort of re-challenge people's thinking about what can be done and you know they've basically made an entirely new segment an area of the business that was you know hugely pivotal in many shifts that we've seen gaming including the hitters who mentioned ATT changes that was the big breakout story in Mobile last year and may well explain what's happened so sure they've been around for 10 years what are they doing well they've announced that they're going to enter into blockchain gaming which sort of feels like 18 months too late if you still think about Wares or Trends going to games industry but I guess you know there's been a plan for a long time and what's really interesting about it is you know they could have gone about it in many different ways and from what we can gather so far it appears that they're sort of going sort of like as a publisher plus model so they've got

their own games in development and believe they have 10 in development but they're also going to be a publisher and they are also going to launch their own coin and so using that kind of model and you know why would they do this so um you know I can give like some knowledge myself but I think I'll kind of pass it on but I think you know let's talk about it so what do you think has prompted them to make the shift I think what's interesting is if you go onto their website you know blockchain now is on the top as being like a really big part of games publishing apps a blockchain before we get to the rest of it so they're not doing this by halves it seems like quite a thought a well thought out strategy that has deliberately taken time to execute and now we're going to start seeing the early parts of the execution and the fact they've announced it right at the beginning of the year sort of suggest that we will see real stuff coming up this year for it so we'll start from there and I'll give some multiple angles moment Marie you look itching to get going here what have you got to say I'm not don't pick on me so I think Voodoo announced the an

investment into blockchain games was it in 2021 and so I actually looked at voodoo's data with data Ai and they've been on a downward trend of their downloads for years now and it was just even more notable sharp decline from 2021 so you know hashtag ATT and and so I think they turned to um blockchain to start exploring that giving with the investment seeing seeing the games understanding the tech making some hires because Voodoo is all about building their uh first party technology on how to prototype and test the market games very quickly and I believe that's what they're investing in doing with blockchain games for for mobile and then they also announced they did the acquisition of Beach Bum and I believe well given the success that they had with that if we look at the revenue I believe that they're doing something similar with blockchain they're partnering with uh game devs and then potentially when they have a good

working relationship and potentially a title that is very successful with that Game Dev though likely Aqua hire that expertise into the company I have a lot of questions um and not all of them are bad one is just I think there still is a lot that we don't know right like we don't know exactly like what is the economy design going to be we know they're going to Ico like have an initial coin offering of you know Voodoo coin or whatever they're going to call it which we haven't seen one of those you know like really in a while like at like a big scale like that's kind of a remnant of like a previous crypto era at this point so so that's interesting but how is it really going to work like is this going to be a play to earn kind of model hopefully not is it going to be more of like a skills based kind of model like where you see like like you know the company skills they have a platform that you know has a bunch of games that you know it's you know uh you know like PVP skill based games with like real money earnings like

is it going to be that kind of thing uh because I don't know how exciting that's going to be and we've also seen some of that with um with just like web3 games already right uh where if you look at the the list of just like the top um web 3 games based on unique active wallets a bunch of those are hyper casual kinds of games or even you know like more like game platforms that like host different kinds of hyper casual oriented games um with again kind of more of that skills type of of business model and it's not really clicking I guess parts of it could be like quote-unquote sustainable but I don't know if there has proven between any of those examples to be like a truly scalable proven model so I kind of hope they don't go in that direction but then at least be wondering well like what direction are they gonna go and as an economic model and kind of tying in incentives you know with some type of like currency into the gameplay across like this platform really like this publishing platform of lots of different kinds of games in this

ecosystem and I just don't know how that's going to work I also don't know uh like just how like the ux is gonna work and like what all the rules especially with like app store policies like not being super friendly and still all up and change it feels like a weird move to like bet the company right now on this type of change when you there still is a lot on mobile that you can't control the the ux on and so again maybe there's more I don't know there I'm sure I know there is because we there's just a lot that hasn't been released yet and in their plans but I just have a bunch of questions about like more like tactically how is this going to work I kind of understand big picture sure it's a bet on ltvs by like embedding New Economic models into these games they can probably monetize perhaps better than you know what hyper casual has been especially what it could be if it continues to struggle so it's kind of a bet in a New Direction on New Economic models but I just tactically I

I still have a bunch of questions well it's all great questions of course we can only speculate but I I could give some thoughts of me what I think they will be doing and why they would be doing it so I think first and foremost like you know they can kind of create a platform with Hyper casual you could make tons of apps but these apps are all separate and perhaps you would control the advertising within them so you could send players from one app to another and try and keep your ecosystem and dare you that way there wasn't really anything that was unifiable together in theory though when you have a coin you now have something that can transfer between all games same as nfts and the thing with a coin is that that would mean that the value of the coin will have both utility and value and the value of that acquaint will increase over time which is just what someone like who really want so I can Envision having some kind of platform based app that acts as your kind of like launcher into each of these things and then you have loads and loads of apps they will also as for the thing they say contact us if you've got a blockchain game where you've got a game so you know we know they've got world-class analytics Suites in terms of

being able to identify very quickly what games are working which ones aren't which means that their platform is going to have loads of games of people are going to want to play on a very regular basis I don't think off I should say that these things will be true and with these coins now into the interoperable in terms of the utility between the games that's going to add a lot why is that good because that coin value is going to go up over time and it's a speculative asset protection but they can make a lot of returns up and what's also interesting about the coin model is that that's not necessarily tied into the performance of the game per se in fact sometimes with the coin it could just be that people decide to get pumping and the value of the queen could go up or it could go down and it can therefore be both tied to but not related to Global macroeconomic situations you know you can also essentially have a business where you sell a load of that coin to make loads of Revenue then yeah sure the price crashes and it dumped but then you just buy back in and then it goes back up in value again 10 20x and you could keep rinsing and repeating that adding an item and making money from it so I think

on paper I can see definitely what they've been trying to do why whether or not they'll be able to execute something I think we can come to that a bit later but I have seen like a similar sort of things that some other people try to which is to make like there's another project called arcade which is quite similar which again has all these mini games that you play a bit like an arcade and instead of putting real coins and you're putting a a cryptocurrency in and it's working on that model and if that on paper makes a lot of sense I have to say actually that's an idea has come from my own team plenty of times but the thing to really make something like that work is you know you need to have the sort of expertise and set up to be able to really get into work and what better company in the world to be able to execute on that Vision if you think it's going to work then food there's very few probably the only ones that have to do it would be the other sort of hyper casual suspects that we see like you know like say games or quietly or things like this so I think it makes tons of sense what they're trying to do and I think it's quite Brave of them to to go into it so strongly so quickly and I think you know what are their strengths that we have to say about Voodoo is that

you know they're really data driven they sort of really cut out the subjectivity and they just try and use that you know For Better or For Worse uh quite Brave of it and I could see this little benefit from trying to do it so I think unless you go anything to add them around I think that's probably what they're trying to achieve so I'm imagining that they will essentially you'll be able to get your game they will help developers get the games to Market give them some free expertise but you'll be tied into having to use the voodoo coin and Dot nfts and that means that those nfts and Voodoo related assets are going to increase in value they'll pay some returns to the developers based on how many people are playing the game what their usage is and therefore their own they were already doing that whereas before they were taking a revenue share they're not only getting the revenue share but they're actually seeing this you know increase in value of things that they have ultimate control over and as immutable and that's what I think they're basically just blockchaining High percussion yeah I think it's a smart move from them because they're trying to remove their dependency on hyper casual

even in their website they even talk about hyper casual publishing anymore it's hybrid and casual and so I think they're faced with two choices their first choice is entering a red ocean with going from 30 Cent cpis to trying to develop games that have 30 dollar cpis um and trying to you know improve on very mature games that I was hoping the charts now and then they have the risky blue ocean which you don't have an incumbent right now that is the Casual hyper casual hybrid casual whatever genre wants to put on it with with mobile and if they can be first to Market in building this technology building the know-how they can become the publisher of choice for devs that want to go into a partnership with a publisher to publish blockchain games on mobile and I also think that has that has Extra Value because you have this really passionate community of degens the no crypto in and out they don't have that expertise of building the mobile games and Voodoo has that rich history

of the voodoo Academy and wants to introduce game devs or even you know graduates that don't know how to develop hyper casual games to teach them and so I just I can see how they have that unique Advantage advantage of the culture to to build it out now it does have quite a lot of risks I've heard a lot of critique that it just feels old school their approach with the ICA the Ico the initial coin offering and also like the tokenomics with their with their coin but we'll have to see I think they're only meant to publish more more details in fall this year so they do have the time to listen to the Builders of the community and iterate on their strategy the timing is kind of off though because the maximizer return on this we would do it during what's considered the bull market and then we're definitely not in one of those right now as someone who works in crypto themselves so they are kind of taking a bit of a hit on their own return I mean for example if they had announced this it would not be

possible but when axi was blowing up I mean it would fly it would you know the coin speculation would be absolutely crazy on it just on day one um so that time could easily come again but you know I don't think that their company that's necessarily Under Pressure to be able to execute or deliver immediately so I do Wonder timing wise why they've chosen to announce it right now um quite Brave I think in in that regard you know they could easily just wait until you know slightly fairer weather conditions and then do it then and they would probably see way more interest but perhaps they are just trying to learn as soon as possible you know that's something I personally also believe in as well I can say that like yeah developing on blockchain because there is no Playbook it is really difficult and those learnings that people make early are going to be really really important learning the flows and things like that just building your Tech so they can work you know we're in very early days and all this stuff is going to take time to refine so you may be just doing it as soon as possible is one way to just beat everyone else to Market and keeping that knowledge in-house is going to be huge the only thing that really sorry the two things I come to

mind about the timing is they've been investing for almost a year now in prototyping these blockchain games and they mentioned that they have two stealth games so perhaps they have a game that could be ready to be launched to to Market formally through you know Voodoo in in the fall of of this year and also essentially you know to gather interest this is a traditional marketing that we see with crypto to start creating some hype around the project and maybe they're already deals starting to happen about wanting to reserve parts of you know coins to to purchase earlier on but yeah I'm just speculating here yeah I think the most interesting part is what you said earlier Maria just about building some kind of unique differentiation or competitive Advantage around being a publisher for other web 3 you know developers like I think that's the the more interesting piece here more so than even just like launching a their own token or something something like that um but I I am curious to hear your

thoughts on just kind of that token aspect in relation to developers coming on and working with Voodoo because you know typically when you're a developer that works with a publisher you don't necessarily have to adapt their currency and kind of be at the whims of like you know like economics that you don't fully control and beyond that I mean we've you know at least atomically studied a bunch of like ecosystem designs around web3 games and most of them that leverage one Central currency across an ecosystem really struggle because each game necessitates its own economics and to have like one of currency that has to fit the mold of all these different kinds of games is a really hard thing to do and I guess it can work maybe better when the games are simpler um and maybe they're all aligned in some way around like how the economics work but it feels maybe a bit limiting and risky from that standpoint so I'm just curious to hear your thoughts you know it's people who you know make mobile

games if you were a developer and you're looking at a publisher like what like how would you think about just like this coin element maybe being thrown upon you yeah let me say what they say I will say one thing that's very interesting about Voodoo is that Voodoo with notorious the big dreadful for developers to work with like if you looked under the terms of their contract for what they would take for you if you had a hyper casual game they would take you to the cleanest they were not friendly at all and web 3 is all about a decentralized ecosystem that people believe in where things can cross over and there isn't this sort of one actor that controls everything right that's the whole point that's the purpose of it it's open no one sets the rules and it's all immutable and it's all there to see so I think that is going to be something that's going to be very interesting to look at because if they try and do what they did before in high potassium just add blockchain so it's not going to work because I think the most passionate blockchain developers aren't going to want to go on that platform because they're not going

to have to control or upside that they would normally so they're going to have to think of some model where they they can do there are ways around that of course under the terms of their deals perhaps they could pay the developer or give them some proceeds of food and coin or something similar and that actually could work and get around what I've just said because then any upside the voodoo season developer would see two which would mean that they would be um you know motivated to want to keep supporting and making their game be good because they're going to stand to benefit maybe not as much as movie but they will still benefit whereas you know in hyper casual that's not necessarily the case um but I think people will have to be quite careful about I think you kind of mentioned it before that you know it could be more like you know people just starting out or Indie devs I think that was always the benefit of voodoo right like your two-man Garage Band Studio could get to Market using them get some traction and then using that could go to the next step perhaps you'd get bought by Voodoo or now you can go to the VC you might not be able to do that particular game you can say hey look how much me and Maria made with our game that you know we made etc etc so that

could still be the part of it but I think that if they utilize the same sort of practices they did in the early days of hyper casual they're gonna have a pretty rude way awake not knowing all of the full details of that experience all of these Partnerships have pros and cons so exactly like you're saying depends what you're looking for and so if the part part of the con is that you have to adapt to introduce this coin or the tokenomics well it could still be worth it if they give you a free platform to integrate the technology uh frictionless integration of a wallet and a Marketplace not having to spend on UA and getting the know-how of learning how to do tokenomics it all depends what if they offered you a 70 30 Revenue split with them getting 70. it depends on your pros and cons the way you're looking yeah I know because that's what I'm saying

I've had to better put themselves with necessarily get that much upside with it so it felt more like you were at work for hire rather than in the joint partnership and and that's why I think people would be looking for if you're going to go on someone else's platform if you want to see that like it's fair for all policies I think it really depends for example on what's your financial position because if you have a dream of becoming a founder and you want to launch games that you created but you don't have the funds to to do so that 70 30 cut in terms of you know giving more social mobility and options to the market I don't know does it doesn't seem fair maybe not entirely but again it's it gives options to Builders out there yeah I think we should get the CEO on for an interview at some point yeah it'll be a really interesting conversation whenever they're ready to talk yeah and you know navik uh has consultancy for tokenomics design so we do we help a

lot of teams let me round down we've talked about what we think they're going to do do you think that they will succeed in becoming a a good blockchain business admittedly we don't know much about it but just you know you're kind of gut feeling I'm skeptical um I just again yeah these these economies are hard it's so early we haven't seen much success anywhere to to kind of be betting on lots of other people being successful with you and I still I still don't fully grasp the whole like how this is gonna work frictionlessly on mobile I think they're the headwinds there could be a bit tough could totally be wrong it's all that we don't know but just based on what we do know I yeah those questions leave me leave me wondering I I think it all depends on the execution but I think that they have a much better chance at other projects I I think because they're so data heavy and they learn fast they

go quickly I think that in a new emerging technology sector the most likely winners are going to be people that think like that like as simple as it sounds I kind of feel that like people that ship products early and often tend to get there whereas people to take absolutely ages that doesn't work in a market that is immature and there's no Playbook you just have to go quick and work it out so I think they have got a chance I think Maria though is really right to say it really depends on like the genre itself right we have not yet seen the Candy Crush equivalent on the blockchain like once that happens it's a whole different conversation not just filming the last Press Summer but it's even lasting for years and years and has like you know top 10 in a world Revenue sort of thing but then if someone was to do it I I I think they have a chance to I'm more bullish on this and that's I think why I wanted to take this news story for this week I think it's a very interesting thing and it's I think actually great to see like a big player like this that's known for being disruptive and succeeding in disruption coming into the space a few more people like that is encouraging to

see someone who works in the same sector yeah last question for me do you think we'll see other other big publishers take a similar approach this year like what we see like the other top players also maybe not bet the company on web3 but like try to compete and or this Dimension maybe launch their own tokens and things like that I'm not sure about token but um I I know that they definitely are the big ones they're going in and you can see the ones we maybe even mentioned on this show already like um you know scopely have announced that they're going to be going into it quite well and network as well so I think it seems to me that they are the three early of the big boys going into the space um and they'll be interesting to see Wishful though these are more of the western companies or in Asia there's a lot that are going into it so and none of these companies are betting the house so to speak but they are definitely going for it knowing what it did it could entail and I think they all have a similar velocity which is like you know

learn first or be you know get it in their own because look what happened in free to play there's a lot of people that dismissed it and then you had to end up buying a studio for six billion just to get back into the game right because you'd ignored it for so long yeah I think pressure in terms of your survival and growth of the company just puts you in a different position yeah yeah to try to find Solutions and really carve out what you're going to do next and I think companies that are well we're fully Reliant or are fully reliant on hyper casual games for their growth they have to Pivot and so you know Voodoo is in a strong position that they have to chase for it and that's why I'm more bullish on them like they are fighting for the growth of their company and its continuation so looking for is what happens then on the headwinds of the tokenomics I think the point that makes me more bullish about Voodoo succeeding and entering blockchains in Mobile is that they are experts in UA and I don't think we've seen other Studios without expertise or a blockchain game reach Mass Market

because that will require a big element of traditional UA well traditional and near Coast really a few way and Voodoo knows how to do it really well yeah and what's interesting is I would say that Network scopely and Voodoo that's something that I would say is in common with all of the network have like a sort of a bespoke solution that's known for being absolutely amazing for UA and you know calculate ltvs and you know scopely certainly got good records as well as for the stumble that is that position that was made last year um so yeah I think that you're right that's the competitive Advantage these companies will have and who owns a minority stake in Voodoo tencent yeah there they are again yeah well we're going to wrap up today's round table and nail Aaron thank you for joining as always always a pleasure if you enjoyed today's episode you can help us reach others by subscribing on your favorite platform we love hearing from you please leave us a comment on YouTube

and let us know what you thought about the discussions that we had today you can sign up to the free navig digest newsletter and also listen to our other content so yeah we'll see you next week thank you [Music]