Fat Cats, Steaming Decks, all GaaS and no Subscriptions with Rhys Elliott of Alinea Analytics

[Music] Rhys Elliot, head of market analysis at Alenia Analytics. Welcome to the podcast. Thank you. It's great to be here, Mishka. It's been a long time coming, right? Yes, it is. I don't know if it has been a long time coming. We had a one phone call and it was so much fun just talking to you and I was like, we should just record a podcast. Yeah, let's just do I mean, we've been chatting on and off for the past few years, but yeah, after that like call initial call, we were just like talking so much and like for so long, we got a little bit too spicy in sections, but we'll see if we'll see if it goes that way right now as well for the listeners. That's all it takes to get on the show. Just have a fun call with me and uh that's it. Nice. You hear that, audience? Just try and be as fun as you can on a call with Mishka. You're just going to get the most cringe calls now, Mishka. You've just like really I do get I do get I do get weird calls

like I had a call I think two days ago somebody called me like not somebody a person I very well know I was like hey what's up and he's like so Aura ring or Apple watch or Garmin like what would you recommend it's because I posted on LinkedIn about like how engagement drops with these fitness trackers and we ended up having a call and like he's like okay what happens with this what happened I don't want to do this so I'm I'm I was consulting him on fitness trackers which is a new expansion of my business. But enough about that and more about you. Whis tell tell a little bit about your history apart from you being Welsh. Yeah, sure. I mean, yeah, I am very Welsh, but I live in the Netherlands. Yeah, but funny name, funny accent. That's the Welshness. Uh, I've been covering games for about a decade now. Uh, but before that, I worked across like research, web development, and marketing. I think we first crossed paths Mishka when I was at New Zoo. So I started there back in 2018. Did like

market analysis, marketing, consulting. I think that's probably where a lot of people know me from. So like basically between 2018 and 2024, uh I pretty much like wrote or edited every piece of content uh that news you did. So yeah, I did that till 2024 and then for about a year after that, I was the lead games analyst at Nidia uh doing some freelance stuff on the side as well. And now, yeah, Lineia's head of market analysis doing like content insights, account management. They're a pretty new company in the game space. Like, I I only found out about them like a few months ago on LinkedIn about the CTO, Victor sent me a trial for the platform, which any game studio can get by reaching out, by the way. Little plug. Got to got to do it. Got to do it. Link in the description. Exactly. Exactly. Like, hit the bell or whatever they say for YouTube. Um, but yeah, like I they they gave me a free trial on the platform and I have a bunch of freelance clients, so I have access to like other data sources and actuals and things like that. So I did like 111

benchmarks or something and a linear was the closest and so I had an opportunity to join. So I was like, [ __ ] yeah. I mean, obviously I'm pretty biased, but I'm not bullshitting. The the estimates are damn good. Yeah. you've been you've been around the block and you've you've worked with different analytics platforms and this is again we're talking about PC console and uh you found Elineia most accurate and you were like yep I'm in. Yep. Exactly. Yeah. Yeah. Accur accuracy is pretty important with data analytics. I've I've noticed that. Yeah. It's pretty important. Crucial. You could say crucial. Yeah. Well, uh, I have five topics for you. And the way I was thinking we should go is we could go is I'm going to like you pick where you want to go and then there's four left and then there's three left and there's two left and there's one left. All right. All right. So, the the topics are fat cats versus hungry cats. Very accomplished. Maybe uh

less hungry devs versus those upandcomers like who should you put your money on? Then we have a topic of gas, a zero sum game. So games as a service. And then uh topic number three, where did subscript subscription gaming go wrong? I bet we're going to talk a little bit about Game Pass. Uh a lot about Game Pass. And then topic number four, AAA versus double A. People are saying double A is the savior. And then nobody knows what AAA is. Nobody knows what double A is. Nobody can say what uh double A hit they're referring to, etc. So that and then the final one is what's up with portables Steam Decks and Switch 2. That's that's pretty hot in the market. So Reese, where do we go out of these five? What do we start with? I'm just going to start with the first and go fat cats and hungry cats. Let's do it. Even though I'm going to forget what the order you said it is in, we're just

starting out four more. You can switch around. So So what's your what's your take on fat cats and hungry cats? And the way I'm going to um present this is especially during the uh the the investment boom the uh the the lockdown periods the the bad cword. So um the other bad word yeah well the other one is not that bad in English. I mean depends where you say it. um yeah so or Australia and um um so when when thinking about those years and especially the studios that got funding we're talking about theory crowd believer uh you name it like raising over a hundred million dollars or at least tens of millions the mountaintop games and anyways you people can name all of those studios they are raising all 60 70 80 120 $130 million and not a lot of success. The only successful case of the sort of uh fat hats, if you will,

people coming in from uh from previous accomplishments and essentially having their their faces plastered on the Mount Rashmore of gaming, like maybe Snap would be or sorry, not Snap, uh Marvel Snap from Second Dinner could be pointed out as the only success case. And even if you consider where Marvel Snap is, the publishing agreements and so forth, it's not like it's soaring. It's like people are waiting for what comes next and and and them boys have raised a lot of money. So Reese, fat cats versus hungry cats. Where do you put your money in? Game devs, we know that great gameplay is what players love, but integrating metagame features like challenges, progression, rewards is crucial for retention and monetization. However, coding them is a tedious and timeconsuming process. That's why top studios have turned to Hero. Hero provides a complete suite of battle tested metagame features that are quick to implement, letting you spend more time on the core gameplay

experience. Ready to ship fully featured, engaging games? Check out Hero today by clicking the link below. Yeah, I mean I'm I'm the same as you. It's it's a mix, right? Like I know that's a very conservative answer, but like you were saying, Mishka, like a lot of the time those new studios from the legends, from the fat cats don't necessarily play out. Like you mentioned Second Dinner, which is a good one, but even that isn't it's great. Like Marvel Snap is [ __ ] amazing, but it's not quite living up to its like, you know, long-term potential so far or investment size. Yeah, exactly. Exactly. Another exception is like Respawn. So, the Apex Legends, Star Wars Jedi team, which the Call of Duty OG guys from Infinity War spun out from back in the day, they're doing really well. But yeah, like as far back as 2018, like all the, you know, founders from Blizzard and Riot and all the old guard, they kind of went off to do their own thing. A lot of those games flopped, went radio silent, like we're

still waiting, but obviously there is good stuff to come and there are still huge fat cats that do hit it out of the park. Like I don't know like Neil Duckman from Naughty Dog, Hideo Kachima who's coming out with Death Stranding 2 soon. Miazakia from Software who just keeps uh you know raising the bar over and over. We've got Lion, you know, with Baldersgate 3. Ben Broad as well, Second Dinner. Fantastic despite, you know, some challenges and not exactly living up to the ROI yet. 130 $130 million raised. I just checked. I know. I know. It's it's it's a lot. It's a lot. And like as well, you know, it's important to remember like the otter, the fat cats, they're cool and they grab headlines, but it does take a whole team to build the game, right? So like those like hungry dogs, those new breed of devs doing their own thing sort of decoupled from that fame and glory and like traditional publisher pressure even like they're breaking through, right? Like one recent example that I've been looking at a lot lately is Clare Obscuer

Expedition 33. That game had like a core team of like 30-ish people, mostly juniors. There's a few like, you know, seniorish people from Ubisoft coming over. Of course, 30-ish people is just the core team. There is a wider support team as always. Like, I hate those headlines like this game was made by two people by 30 people. It's like, no, if you look $15 over two months. Yeah, just look at the damn credits. You're waiting there for like 10 minutes for it to scroll. That is not 30 names. But still it's a small team relative to like the huge AAA still and it's right now it's the hottest game in the market right like a linear data best in the business by the way just saying shows that expedition 33 it's got 2 million copies now across PlayStation and Steam despite the small team size and budget of course that goes with that and also 2 million wish lists on Steam. So, like as the the price goes down, it's pretty cheap anyway at 50 bucks. It will have like a longer tail, too. And

these people like uh you know, the team, they wanted to make a G JRPG that big studios kind of ignored. You know, Square Enix was like, you know, people just don't want this. So, we're going to do action combat, fast-paced. Uh so, there was a gap in the market for that. Players were saying they wanted it. the like uh you know data the research the consumer research said that they wanted it but for some reason like the big AAA companies kind of ignored it. The only ones that did make those JRPGs were the super like anime focused ones you know like your personas and like Metaphor fantasio. So yeah, these guys were hungry for it. Like they weren't beholdened to kind of um leadership in kind of certain ways that the other the big teams, the Square Enix's were. And they kind of brought out this like turn-based RPG that just absolutely hit it out of the park. Nobody knew who these guys were, I don't know, two months ago. Now everybody's talking about them, right? Kepler, who published the game, they Yeah, they've struck gold

with this one. And now I'm thinking about Bonfire is another one that that finally showed what they've been working on. And even part of those games have been already in the market, but they're now publishing them. It's uh it's kind of weird. They're saying like, "Oh, here's our five games." Like that has been on Steam already for a year. Like how is that your It's like Netflix, you know? Like these are Have you played Civilization 6? It's like yes, we have. That is not or GTA 3 or 4. It's like these are not your games. So, you just paid a lot of money to put your stamp on it. Yeah, exactly. And like just quick aside, the Netflix thing, it really I don't know. It like bugs me a little bit honestly. Like they kind of put games in your face no matter who you are on the front end on the big screen experience. Super expensive real estate by the way. Yeah, exactly. It's like my girlfriend like I was, you know, I was just sitting in the room. This is obviously anecdotal, but she just she opened Netflix to watch Love is Blind and there was a huge

banner across the screen saying like, "Try GTA now on your mobile and she's like, I don't want to like play GTA." Number one, she's not the demographic for that. She hates GTA. Number two, she's in there to watch content. So, like, you know, it's, you know, we're going to talk about zero game stuff later. like the attention is a zero sum game and Netflix used its biggest real estate to advertise the wrong thing to the wrong person. I've wrote about it, you know, previously like I don't see the surviving more than 2 years. Uh probably like two is max that they can survive. Let's get back to fat cats and hungry cats. And by the way, I don't wish wish Netflix games any bad. I wish they would have succeeded. And I'm just expressing my frustration because they had the platform, they had the resources, they had the amazing culture, and what came out is so [ __ ] disappointing. It's like the worst version of Apple Arcade. And Apple Arcade is not a good business. And you take that and you [ __ ] that up.

And it's like, wow. That's Anyways, and spend like $4 billion doing that. It's just insane. So, you can't buy you can't buy your way into the games market. Like Google couldn't do it with Stadia. Amazon is kind of struggling. Saudi Arabia is kind of getting a little bit I mean, sure, but not not from the ground up, right? Yeah, exactly. You can invest your way into gaming, but you can't buy, you know, gaming. But talking about the the [ __ ] cats and hungry cats, the way I was thinking about this is, you know, coming like I'm probably a fat cat. So if I think about myself, I got the experience, I got the connections, I can raise money, but where I'm not anymore a hungry cat is I'm almost 40. Like that's that's one thing. And that brings other elements to it because I'm I'm I've worked well okay I had a startup and I worked at smaller studio but if I only had worked at larger studios uh like the

zingas of the world then I would have been very much used to central services and through that I'm kind of used to certain type of team sizes and I'm not counting all the bodies that are in our central tech team and the marketing and the audio department. They to me come in as given. I don't have to even look at it. they're barely in my profit and loss statements. And that leads to not only the team sizes that I'm used to, but it also leads to different type of a cost structure that I'm accustomed to, especially when I'm seeing a lot of these um investment decks for studios by fat cats. And again, we're not derogatory by by saying fat cat. I identify as a fat cat, just to be clear. So, so we see the um the uh the pitches and and like even in preede stages the uh the fat cat executives are asking for a salary of you know 400,000 500,000 a year and they're raising a preede like we're now just going to start at the studio and I would like you to pay me what I was making at Blizzard Riot and

whatnot which is just absurd. You're like essentially taking no risk, only banking on some upside and all the risk will be taken by your investors. And then that leads to a final point that fat cats have that hungry cats don't, and that is ego. And essentially like why are you doing this? Like let's say you shipped World of Warcraft or Starcraft or League of Legends, you were, you know, a big shot on that or a leadership function. Like often times you you'd ask them like, "Why are you doing this?" And it's like a it's a legacy play. Like, oh, now I want to do this for me. Like this thing that will stay forever. And like that's a really weird reason to do anything. Yeah. To to It's almost like a building yourself a pyramid. It's like, and why are we doing this? Yeah, it's true. And the vast majority of gamers don't give a [ __ ] Like it's all on the supply side that, right? Like that's like internal for the investment, for

like talent acquisition at the end of the day. feel like, you know, people move around the games industry so much that pretty much any game or new studio can like market itself like, you know, made by people who helped make League of Legends, who helped make Call of Duty, like it's that's not really a USP that matters for consumers. So, like I think there is a big kind of uh gap there, right? Like people think that it's like a marketing thing and yes there are core gamers that will be drawn to that and there is like institutional expertise that can translate over and does but in general there's just so many games like from big studios small studios that like yeah having a big name doesn't if doesn't necessarily change things. doesn't move the needle and it's certainly not worth like, you know, $2 million of budget over three years or something like that, you know. And and we've noticed also that that this that the games that these studios make are pretty much the same that they were doing but worse cuz they're, you know, smaller with less of a budget uh even

though incredibly high budget. Um and yeah, there's kind of like lack of creativity. It's almost like a incremental innovation that might not be even going towards a better direction. And I'm not saying like well I am saying legacy is a wrong reason to do anything. I think it's incredibly self-centered uh and and you should probably go to therapy. Uh but but but I'm serious. But uh but if your goal is to like I want to make a lot of money that's even better cuz now you you have the exact same goal as the investors. You are aligned. investors are not aligned with you building yourself a pyramid, but they they would be for for something else. Or even better is just having some kind of a chip on the shoulder. Maybe you were fired for that company. There was some something and they didn't believe in your vision and so forth and you leave and you say like, "Fuck you. I'm going to show you that that what I'm what I was pitching, what I wanted to do is the thing that makes and and that internal fire inside of you

will will, you know, make you work harder and make you take risks and and execute on them rather than like, you know, I don't need money. I'm pretty well off. I don't need this, I don't need that. Me and the boys left and we're going to build the the sort of a legacy for ourselves. That's Yeah, exactly. That's the weirdest weirdest reason. I know. It's true. It can kind of work as well. I mean the legacy stuff can be decoupled from that, right? You might just I've had something you think is a really good idea but you get shot down because I don't know maybe the consumer research says this or maybe somebody on the exact team just more often than not it's this the someone on the exact team just doesn't think it's a good idea. But then you can spin out and make that thing and it can do well. That's what happened with Expedition 33. And at the same time, you have like these indie games made by a couple of people. Like schedule one is a big one right now. Like it's made by a tiny team and it's like broken through. It's like sold more copies than any of these spin-off studios. And it's just like

literally a few a few dudes and like Blueprints as well. While that's kind of more niche still, if you're talking about ROI per employee, it's doing a lot better than than some of those big dogs, you know? Yeah. and and plus because they don't get that funding that fat cats do with their connections, with their pedigree, they have to figure things out. They have to move really fast. But if you're able to clear a $30 million check off when you're walking out of the Riot or Blizzard campus or you name it, then you don't really have that sense of urgency. You're just kind of like, "Okay, this is the first check. Let's start building. let's copy the organization that we had but but bring in only superstars and you know this and that and and basically the money came so easily that you don't really appreciate it and and that that in my opinion leads to problems web stores you've seen what good looks like but have you seen great

app charge is the direct to consumer platform backed by the likes of Supercell and built by monization pros from Moonactive Platika huge games and others. People who know the difference. App charge powers over half a billion dollars in transaction a year for top studios. Optimizing every detail. Deeply personalized web store offers custommade design, industryleading monetization features, in-game payments SDK, and more. 70% of top grossing games already have a web store. But the one scaling fastest, they're doing it with AppCharge. Learn more at appcharge.com. Yeah, like some studios, they're like a lot of studios actually, they're in pre-production for like 2 or 3 years. It's like guys, if you you've got to start like building something. I know ideation is important and getting that right is important, but like it costs a lot of damn money to be ideating and prototyping for 3 years. And sadly a lot

of these like big in you know the studios that attracted so much investment back in the day that's what they did and that's why it's radio silent because they were getting all that funding during the pandemic but now it's dried up and now they're like [ __ ] we were ideating for 3 years now we've got to make something and the funding's dried up like oh [ __ ] like what do we do and it's like I don't know I think that that lesson's kind of been learned I think now I think in the future when this happens it it is happening they'll to start building quicker. I think it's a necessity, right? Like you have to right now cuz it's Yeah. or give up the fact that like the thing is like you don't have to. That's the thing. You can just drive this to the wall and say, "Hey, we did a good try. Here are all the artwork that we did and and you know, didn't didn't work out and um I'm going to go back to company X or just you know join a fund or or do something different." Yeah. Creative differences, right? Yeah. you don't have to work anymore. That's the thing. And and

that's I I think that's a challenge that makes you a fat cat usually. It's like you can do whatever you want to do and and doing hard things is not what people are are used to. But I wanted to kind of like bring this together is like how do you evaluate because it's not it's definitely not so that if somebody has had success that they are automatically a fat cat like you know the the Elon Musk or the Zuckerbergs of the world are just constantly you know trying to build more and more which is just insane because you know who's fatter than those cats but how would you evaluate or look at um a team that is coming into PC console with an idea and how would you evaluate whether they are fat cats or just experienced cats who are still hungry? That's tough like cuz you you like a lot of the time it is a black box, right? You have to like go through LinkedIn and look through everybody and really try

and like work it out. But I think my advice is to like anybody investing in a team is don't just look at those fat cats. Don't just look at the people at the top. Look at the other people contributing to the game. Look at, you know, where they worked before and everything like that because ideas are, you know, awesome and they, you know, they help power this industry, but they're cheap, right? It's not the author who's like making the product or doing the monetization that's going to help get you that return on investment. It's the game economists, it's the like monetization people. So, you need to look at all that stuff as well, right? And you need to Yeah. Don't get carried away by, you know, somebody who made a successful product 20 years ago. The market's very different now. So, just look at the wider team. I think like I know that doesn't necessarily directly answer your question, but just don't look at just those few names. Like, look at the wider team. Look at what they're doing. look at their actual like business plan and if they've executed on a business plan previously like talk to

you know um acquaintances who know that person because like there as you know Mishka there are a lot of fat cats who don't know what they're doing like simply put or knew what they were doing 20 years ago but like they still kind of work in that like older PC console mindset but it's a different market now right like like you said you can't just lean on legacy to create a product that kind of sells well these days. There has to be something more, right? Like a name can't just you know a marketing name isn't going to be your your success driver. Yeah. Yeah. Those are those are good advices. Like to to me stuff like I've I've met many of these companies and I'm as starruck as any investor or any game developer. like it's a it's amazing to talk to people who have made the games that that you have the you know the most fondest memories of and they are very convincing um and and because they believe in what they're

saying um so I personally like like for me if we're talking about investments then I would just put it more into like don't forget the principles of investing when you're doing this like if somebody's asking for a preede round of 50 million That's probably too expensive and that's probably too much. Let's take, you know, help them to get the steps and especially if they're coming in from a situation like the best way to see it if they're about startup life is for them to bootstrap for a while just see where they can get with a small team and when they're paying their own salaries where or not paying anything. Can you handle 6 months? Just 6 months with no salary, just doing the work because you believe in what you're doing and you're ready to put your money where your mouth is. Can you do that? If you can't, if you need right away, you know, continue those big checks, then probably startup life is not for you. Probably you should stay at the corporation you were in where you are respected, where you have big teams

and maybe through that kind of get to build a new game inside that organization or just continue. But startup life is is is extremely tough and I don't recommend it to anybody especially to to folks that have accustomed to the certain privileges of of large successful corporations. Mhm. It's a lot more work, right? It's you have to actually deal with everything. You plan you plan and you do. You plan, you do and and that's that's your life. So yeah, exactly. Yeah. Should we talk about shorter games then? because oh the double A the double A thing. Yeah. Okay. Let's move on to AAA and double A. So you mentioned Expedition 33 and of course we've had um pretty big AAA game successes and failures especially as of late and it's kind of been shifting towards more of this like well double A is the way to go with yeah expedition or um Hell

Hell Divers too. Hell Divers. Hell Divers as a as a great example. All these games are still we're talking about tens of millions of budget if not hundred. Uh so so talk a little bit like what is the difference between AAA and double A and what do you see the future there? Yeah I mean the difference you know you can throw it at a dart board. Everybody has a different like you know explanation of that. Personally I think if it's over 100 million it's you know AAA. Anything less than that is going to be double A or indie. And obviously team size factors in, you know, put the publisher behind it and everything. But that's usually kind of a fast and loose method that I kind of use anyway. But obviously it's hard to tell because not everybody tells their budget. So sometimes you just got to go by gut, right? Like this is an indie game, this is a double A game, this is a AAA game. That's a very qualitative answer, but like candidly that's what you've got to do because the data is not actually [ __ ] available like for most games. Um, but yeah, I mean that's I I mean

let's talk about like the actual challenge, right? Like the games industry and I'm more talking about like premium games on console and PC now rather than you know mobile. It has a pretty unique challenge like on the supply side and the demand side like on the supply side like the new AAA games can take like 5 years or more to make and often have budgets like you said in the hundreds of millions. GTA 6 is a different thing that's going to be like two billion I think. all said and done. Yeah, with marketing especially now with the the delay, but also like on the demand side like player attention and play time are already maxed out, right? Like so most gamers have about 10 hours a week to play spread across different sessions. There are people who play a lot more and a lot less, but you know, they have limited game time, which is one of the reasons for like the stagnating user uptake on like Game Pass, PlayStation Plus that we'll talk about later. And but yeah, like most games are just not as digestible as

movies, TV shows, blah blah blah. But gaming is more of an active pastime as well. When you're playing a game, you've got to play the game. You can't scroll through Tik Tok. You can't like maybe you can watch Netflix in the background, but that's, you know, it's difficult. So like, yeah, games are too long. Games are way too long for your average consumer. Like it's really been like an insidious creep over time as well. like games have gotten over the past 20 years, I guess, just a little bit longer every year. Then when you compound that over the the 10 15 years, it's just like an insane jump in game length. Like Assassin's Creed 2 back in the day back in what was it 2009? Finished that in 15 hours. Assassin's Creed Shadows that just came out, I think I played it for like 60 hours. I've not finished it. I'm not going to finish it. Like I don't have time. I'm I'm done. My experience is done with the Black Samurai. Yeah, that's the one. Yeah, I mean it's a good it's a good game, but like I don't I've got what I wanted out of that game now. It was fun to play. Um but yeah, there is a ne

negative correlation obviously between the game length and completion. And you can easily see that by like looking at the trophy and achievement data and like you know cross referencing that with completion data um which is uh you know time to complete data. There's like a lot of websites that show how long games take to finish and like would players notice if you cut the length of Assassin's Creed by like 30%. Probably not. I would actually prefer it. And there's a lot of people like me as well cuz I probably would have finished the damn game if it was 20% shorter. And so because gamers are playing like long into adulthood these days as well, like you and I, we both still play games and like you know career goals, families, social [ __ ] gets in the way. I don't have a 100 hours to play an RPG anymore. So like another way that kind of publishers, developers are giving players more like freedom there is games that take I don't know 20 hours, 30 hours to finish, but then you can do all

the side content and play for more. So that's something that an Xbox RPG from either last year or earlier this year. It gave players that choice. You can finish the game, Critical Path, Golden Path, 15 hours, or you can play for 40 hours, do everything. Expedition 33 did something similar. Uh, you can finish the main game 25, 30 hours. Crazy short for a JRPG. They're usually 100 hours, but you can kind of play it for longer, do the side stuff, and do it for like 50 hours or or more. And our play time data shows there's a big mix there. Like a lot of players have played I think a third have played between 20 and 50 hours of Expedition 33, but then 12% have played over like 50 hours. And I reckon there's going to be a lot more like experimenting here like with developers. So they're going to make the critical path a lot shorter and therefore the budgets are just going to go down anyway, right? Because you know, like we were getting at earlier, Mishka, like in this mature games market we're in now, it's like profitability that's

kind of vital. And so these kind of like double A games that take three years to make instead of six years like you know Hell Divers, Astrobot and even games that they can take longer but you know um what's it Kingdom Come Deliverance 2 took five five or six years to make but it's made in Czecha right so that you know the price for Talon the salaries are a lot lower so they they were only paying like I think 50 million for their budget and there's this big chunk funky RPG, right? So, I think we'll see a lot more of that. But, you know, these big 100 hour plus RPGs and expensive big big budget games should still exist because there is still a market for them. But, not every bloody game needs to be like that. Like, not every Hollywood movie needs to be like have the same budget and scope as like a Marvel movie, right? So, yeah, not even a Marvel movie needs to have a Marvel budget as we've seen. Yeah, true. That they're flopping. Yeah, that's

that's that's a good example. But yeah, like I mean there's a world where you can have a AAA looking and feeling game on a double A budget. Like even Sony's done it with Astrobot. Even with Miles Morales, the Spider-Man game still sells tens of millions, but like you know, on a fraction of the budget of the, you know, Spider-Man 2, Spider-Man one. So yeah, it's just like just make the games a little bit smaller. Like it's it act they still sell. Like it's been proven now, right? Like yes, GTA will be different, but yeah, players want shorter games. Like the the jury's kind of out. I I 100% agree. And because before we had shorter games when we were kids and youngsters, we just replayed them on different difficulty levels. That was the whole thing. And we got the uh you know the the the trophies, the achievements through that rather than making an endless game. And so things that you pointed out were pretty interesting. Like on a macro level, you said play

time has been maxed out. People play as much as they can. It's not increasing. We don't have more time in our day. Um you said attention deficit, which is definitely true. People just on their screen all the time. And it's not the screen of your TV. It's it's your phone screen. It's your Tik Tok reels. It's the YouTubes that are ever more engaging and taking more time. Um, and and with games, as you said, immersive experience, not even like Netflix, you actually have to be in it. You can't be doing a bunch of stuff on the side. Um, and then the combination of games being too long, so too demanding, they're too cheap to sell. The price hasn't increased with uh with the inflation or the cost to make. They're too expensive to build. And all this together is you have a very high risk of making a AAA game just due to the cost and and the fact that the market is not growing. So you essentially have to kick somebody else off the market. And that risk leads to less risk-taking in creativity. So you will just do a sequel and then

that's where we kind of are is just a sequel game, the Call of Duties, the u the Spider-Man or or whatnot. It's like everything is a sequel and nothing is new. And that in turn has opened up the game for doubleas's that don't suffer from the same elements. They don't try to make it too long of a game because they don't have the budget for it and they can now make more creative they're incentivized to make more creative game that stands out in the market and through that they can actually win more. Yeah. Yeah. Well put. Yeah. So, so AAA essentially has by constantly expanding the production costs has opened up the door for creative double A's. Yeah, exactly. And yeah, like you said, the companies they it's like SQLitis, right? Like it you look back to the like hero days, the Tony Hawks pro skater days, like those um franchises were just, you know, mind dry and like you see it happening with Assassin's Creed now,

right? Like um we saw in Ubisoft's um you know recent financials. They're down like I think almost 20% year on year and like that was an Assassin's Creed launch. Like uh-oh, you know, like it's just Yeah. And and and the the problem with the sequels, I think, is that it works for folks who are looking for that nostalgic, you know, u hit. I never played Assassin's Creed. It's not like this type of a sort of per Prince of Persia in 3D is not my my jam. I get it. Just not interested. And if I would be coming in right now, like they made some iterations that were more interesting in terms of theme and and and the setting, but I was just looking I'm like, "Oh, I haven't played the previous Assassin's Creed. It's kind of not for me." So, it's kind of hard to jump in the middle. Just like with Marvel movies. I mean, they reset it every time. like, hey, Spider-Man, new actor.

Every 10 years, we get kind of like a reset of Spider-Man, which kind of makes sense. But with these, it's it's almost harder to jump in into a franchise and start playing um than it is to jump on one of these new hot steam games like you know, like or you know, the Hell Divers of the world. It's not like there's a 20 years of hell divers like Call of Duties and you just jump in and get demolished immediately. It's like no, everybody's starting from the same point. So I feel I feel like they as you said with with Ubisoft when these franchises or in Marvel when they get too long in the tooth there's a risk of just decline and they're putting in more and more effort to make it more expensive moreastic quadruple a as they were saying and that kind of gets them back to the base level but now they're paying exp like multi multiple times more than they were in the beginning to get the same hit. Yeah. It's just spiraled out of control basically, right? Like and there Yeah. They need to

like go back to the drawing board and just cut the bloat honestly. Yeah. Yeah. Or or acquire some of these double A developers and and get some creativity back into the game. Come up with new games. Yeah, for sure. There is like a mid ground as well. like uh EA has done this with um you know the team that did Split Fiction and It Takes Two. So Hazelight, they kind of just let them do their thing. They're a smaller team on the side. They take like I don't know 3.5 years to make a game on a tight, you know, budget and so they're independent actually. So EA just publishes their games. So but that has worked really well. There's been a huge ROI on that. So like publishers can do it and they can be a little bit smarter and just kind of like hedge their bets a little bit more with these smaller studios because like Split Fiction is doing a lot better than EA's other like properties obviously not FIFA and Apex Legends but it has helped them like you

know boost their revenues at a time where you know FIFA is kind of like plateaued a little bit because I mean we won't get too deeply into that but the the monetization loop on last year's game was not great like they you know I usually For example, my friends and I usually play for 8 months. We were done after 2 months cuz we had like all the best players. They really like fubbed it last year, but Split Fiction has helped them kind of like level it out. So, yeah, there's a lot more room to do stuff like that and partner uh or acquire these kind of, you know, hungry dogs, so to speak. Interesting. Yeah, I 100% agree. So, want to move up to the uh the next topic. I think we went through double AAA. Yeah. Which one? Your choice this time, Mishka. So, okay. Uh, I want we talked a little bit about Netflix and my frustration with the lost potential. So, where did subscription gaming go wrong? I bet you will be talking more about Xbox Game Pass.

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like subscriptions are never going to be the main like method of game distribution in my opinion. This is something I've been saying for like years now and it's like it was always quite obvious in Michigan. It goes back to what we were saying about the attention deficit, the attention economy being oversaturated. Like that's already true and like you know consuming games is way more demanding than other mediums. So kind of you know thinking that the Spotify and Netflix model would just work for gaming. It's kind of like naive if you ask me because a consumer, you know, they can listen to hundreds of tracks on Spotify a month at least. They can watch dozens of movies, TV episodes, but like we were saying, like they can only really play one maybe two like premium games a month and then like that's just the tip of the iceberg of it as well, right? Because most gamers are already served by like your free-to-play market. So you've got Fortnite, Candy Crush, Roblox, whatever. or they're just happy to buy a few premium games a year,

you know, like last year college football, black myth, hell divers, whatever. Next year it'll be GTA and so yeah, the people just don't have time for it, you know, like and for that reason like PlayStation, Nintendo are seeing stagnating subscriber numbers and even Game Pass, which is like, you know, the the big one that everybody was like this is the future. It's completely like starting to saturate on console. like they did show that um their what do they call it like game content services revenues uh spiked Microsoft recently and people were like oh yeah that's because game pass but it's like no they they like increased the prices so it's just like more ARO right like that's the classic that's that's what these that's what subscriptions who have finished their growth phase and moved on to the retention phase do they try and maximize like revenue per user so that to me is was the canary in a coal mine for Game Pass on console. Like the the PC price

is still cheap, so there's still some growth coming from there, but like you just can't move PC gamers off Steam. Like for [ __ ] sake, Epic gives away free games on their store, but people would like literally rather buy them on Steam. So, and like even with the big Game Pass games, right? like um what was the like I mean even Clare Obscure that was on Game Pass PC, Elder Scrolls, Oblivion Remastered that was on Game Pass PC, but still both those games are still selling over a million on Steam. So people would rather just pay for it and play it than access it through through Game Pass PC. And yeah, I think they've almost kind of run out of runway, which is why Xbox, for example, is like releasing more games on PlayStation. And I think that we're almost at the simultaneous launch on Xbox, PC, and PlayStation. like they're they're like almost subsidizing Game Pass on console with those kind of um

premium revenues on PlayStation because um so Alenia data again uh on PlayStation on PlayStation we can see that Fortza Horizon 5 which was um you know used to be Xbox PC exclusive and came to PlayStation uh this month actually sold like over 1.2 2 million copies on PlayStation. So that's, you know, instantly almost 100 uh million in revenue for Microsoft via PlayStation just for a port. So yeah, I don't know. I think the the days of subscriptions are kind of as the main way to access games are over. I think they'll always be like a secondary or tertiary like distribution in the market. like it'll just kind of be there in the background for people who want it. But like I mean another canary in the coal mine for Game Pass was that last year Xbox they used to have you could have day one access to um first

party Xbox gamers like on pretty much every Game Pass tier and last year they moved that only to the ultimate tier. So clearly something's not quite working and they're really trying to like shift the value proposition actually like less value for the core subscription. So they're trying to upsell people. So I mean Phil Spencer, the CEO of Xbox said it himself, right? Like he has targets to hit. He needs to show growth. And you know Game Pass isn't showing that growth. So they're trying to get it through uh PlayStation off platform. the cloud stuff is not quite working out, but there is some uptake in, you know, Latin America and stuff like that, but that'll the cloud stuff if it ever hits it'll like, you know, ever lands properly. We're decades out. Like it's just consumers don't necessarily want to play that way. So yeah, I realize I've been yapping on like what what's your uh take on this one? To run a successful subscription service, you have to have for games, I don't think anybody really

plays back catalog to be honest. I think it's all about the new games just like with any kind of subscription service. I mean Netflix is a little bit different because people watch like old friends and and so forth, but but typically it's all about the new with Netflix as well in the end. Um that's what brings the new users, but it's so expensive to launch new games on a subscription service. And making a new game, a new good game on I would assume it's more expensive than making a most of the movies on Netflix and definitely more expensive than making a show. Plus, when you make a show, you essentially can, you know, get the next season and the following season until the engagement drops. So, so you get those shows. But with games, because these services have been built around paid games, they kind of never took into account that we have this totally other business model happening that is fully focused on engagement, which is games as a services. Mhm. And so there there there's those games, the Fortnites, the Robloxes, the that you name it, that are

focusing on taking users time and then there are the paid games. And so when you launch subscription service, you're essentially devaluing the paid games because now you're either giving them as a part of this subscription or there are certain paid games where people just they they don't get the highest Metacritic. Basically, you're just waiting for them to come in as a free to subscription service that you're using. Or even if they get good enough, you're just earmark it like, "Yeah, I'll play it when it comes to this subscription service." Uh because now I'm just too engaged with playing these gases or I already, you know, have a giant catalog of different games. So, I can wait for three, five, six months, no problem. Even a year, I'll I'll play it when it comes. And I I think I I think that's the biggest challenge is that that this design around subscription games has been done in a way that it just hasn't taken into account that what 92% of

players time goes into older uh franchises or games and services like FIFA is kind of games as a service. They they do launch a new version every year but nevertheless that's the you know the same game with a with a new sequel. So if there weren't games as services, if there weren't the live live operated game, I think subscription service could do pretty well. But because they are and because they are dominating then I I find it extremely um confusing that these executives would would make you know these decisions emboldened of course by McKenzie and and the likes that that this is the way to go and and they're looking into an absolute disaster and are still kind of are are they still doing it like what's the situation with with with uh with with Game Pass because Apple Arcade is essentially in uh in on on life support in a in a way. It's it's uh it's

just bundled together with other services because it doesn't make sense on its own. Uh Netflix is in its last pivot before they move fully into licensing. And Xbox is in trouble. Game Pass has significantly underperformed. Oh, you know what's what's the situation with that? Yeah. So, like a little bit of context, like the reason they went all in on Game Pass is cuz they completely dropped the ball on the Xbox One generation, like they did well with Xbox 360, but PS4 just completely eclipsed it because like they with Xbox One did like Connect, always online. Um, it was $100 more expensive than the PS4. So, Phil Spencer came in at the end of the Xbox One generation was like, "Right, we need a new value proposition." And that was Game Pass. And it did do well. You know, it did grow over those first few years because the value for money was just like crazy honestly. But now, yeah, it's oversaturated. It is still like growing a little bit, but like you know, it's

pretty much flat for all intents and purposes. So yeah, it's not doing well like you said, but the Xbox is in a unique position in that um it has like you know 30 million plus subscribers for Game Pass and like the subscribers are getting a lot of cool content and they're actually really loving it. Like Game Pass is having one of its best years ever this year with like Expedition, Oblivion, uh we've got Doom coming this month, new Halo game, uh sorry, new Gears remake in the the summer. So like Xbox is serving that audience with Game Pass, but they're kind of bolstering that by releasing the games. So like nobody buys games on Xbox first party Xbox games because they can get them on Game Pass, but people buy them on PC and people do buy them on PlayStation. So they are still getting premium sales off platform. So they're kind of having it both ways. And I think

you know they're also just kind of doing that like keeping their revenues afloat until they can like try and do their grand plan their big mobile launch which I don't know how that's going to go honestly. you know, they want to reach what is it like uh a billion gamers. You're not going to do that with console and PC. Um, so I think they're they're getting their ducks in a row there. So Game Pass, while I wouldn't call it a failure, I'd say it's flat and it's just there in the background. And now like Xbox is kind of focusing on other things like for example, I think the next Fords Forza game and the next like main Gears of War game that will come to PlayStation and Xbox at the same time. So, you know, the Game Pass revenues will will keep chugging along, but they will get those premium revenues on PlayStation and Steam. So, I think that's kind of what they're going for right now. But whether it pays off or not, we'll see. Yeah. In the end, subscription model is is uh what we call an economy of scale. And that means that the more payers you're getting, the

cheaper the average cost per service, in this case game, will be. And without the growth that they need to have, these services become financially just simply unsustainable because the production costs are very high and the acquisition costs are very high. And that's why we're constantly watching is like how much does it grow? That's why we're watching Netflix numbers, how much does it grow? Spotify, how many subscribers you have? That is the key number. And they can talk about everything else. you know, the games coming out and this and that, but unless your subscriber number grows and their target was 100 million, I I'm not sure where it is at the moment. Is it at 40? I'd say just under 40 right now. The fact that they've stopped given the number is very telling, right? Exactly. Exactly. And and they they reach 40% of the goal, not 60%, not 70, 40. And then they were like, you know what, guys? Listen, how about Metal Gear Solid? How about Call of Duty? They're like, no, no, no, no, no. talk about the most important metric

that we watch with every single other subscription service, but Xbox not showing it. So, closing down studios, which further limits the amount of new games coming out, and it's just it's just not a it's it's just not a good sign. And and it's pretty telling that other services have gone through the same thing. Like, there were several pivots with Apple Arcade. I think two different ones where developers were being cut, etc. I did the uh the back of the napkin calculations. I I I forgot where I landed, but I landed on like, you know, them kind of like losing close to $800 million based on like the amount of games and the average cost for a game and how many subscribers they had at that point to Apple Arcade. Of course, since then, they've did the same that Xbox did, muddied the water. So now they don't tell how many subscribers for Apple Arcade there are. They just tell to Apple 1 subscribers. And then Apple 1 subscribers of course are a much larger group. And so in the sense this service makes, you know, is is great. same thing they do at Netflix games apparently

where it's because they don't have any financial responsibility since they are not trying to monetize and they're part of that engagement loop and and I haven't heard any ways they they measure the success maybe other than installs or some weird engagement number that they might have but in the end as as your girlfriend in a great example pointed out it's taking super valuable real estate from the main goal of the service and and through that I just feel it's matter of time before the the plug is pulled on on this experiment that cost them several billion dollars but because the company's so profitable and good it doesn't really you know matter which is absurd. Yeah, I agree. It's been like you know what they call it in the NBA world is a opportunity cost right? Like it's just you know they should Netflix should have maybe been chasing the live sports stuff which is doing well for them extremely well. Yeah. and but instead they kind of went more in on games. I bet they're kicking themselves now. Think of all the sports rights they

could have had if they'd used that the budget that they, you know, poured into games into more sports rights. They'd be laughing. But hindsight, you know, it's Yeah. But but it goes also to our first conversations of fat cats and hungry cats because that organization was the fattest of the fattest cats were were were dropped, you know, drop shipped to Netflix games. you know, every accomplished executive um joined with, you know, knowing some of these packages that they have, just absurdly high packages, just kind of ride off to the sunset type of packages and um and yeah, and and that's that was the result. Mhm. Yeah. So true. Right. Should we move on to one of the next top? This has been we've been we've been chatting like I love this. This is good. Yeah. This is actually a podcast. Yeah, it is literally a podcast. So, uh, we talked We have only one left. I think we got two, right? We got live services and portables, I think. Oh,

yeah, that's true. I thought we talked about live services. So, let's, uh, let's let's cover live services then quickly. Well, here's here's how I see it. Most of these studios that are making live services for console that started doing were studios that weren't doing live services before. They were doing single off premium games and because McKenzie and company came over and said, "Look at the numbers of Fortnite. Look at the engagement. Look at all of that. This is what you need to be doing. It's reoccurring revenue. This is the golden goose." And Destiny 2, great example, so forth. And so now you had the pivots from from almost all the the great studios to a totally different business model with absolutely different skill set. Uh but nevertheless, the way these studios were producing content is the same. Story driven, high production value, like all of their beliefs of what makes a good game is exactly the reason why, you know, people like myself can't go and make a good Roblox game, just because the audience is so different and

the way you should be making games and the way you should approaching it's like whatever you've learned is wrong. And so they they tried this they and and it's been quite of a bloodbath uh with with in you know long development times. They don't have the monetization chops. They don't have the the the live ops capabilities. They they can't produce content fast enough because they're spending too much time with their existing process and they're just not equipped to make this. And we're seeing a lot of failures in that front. And at the same time, we're seeing success with companies that are like that that operate in this way entering PC entering console uh essentially stealing all the engagement where we're talking about League of Legends or the Dotaas or or Robloxes or Fortnites or you know they they are taking the engagement away and I think that's the uh the biggest challenge. Now, there have been success cases like Call of Duty War Zone was a good example of a bold move to freeto

play, but I feel like like Activision didn't it capitalized it. It came on the right time, but it kind of didn't follow up through that. They it continued to milk the the the customers through the uh the old model of like, yeah, we're going to ship all these games, but we also have this freeto play on the side. They didn't move full on into freeto play and essentially it's just a side quest now. Yeah, exactly. They GTA, of course, GTA live as well. Yeah. Attention app and game developers. Are you ready to unlock the secrets behind the world's top performing apps and games? With Sensor Tower, you get the ultimate competitive edge. Whether it's breaking into new markets, fine-tuning your UA strategies, or boosting monetization. Dive into data like never before. Track global trends across app stores. Analyze market leading adop purchase and inapp ad strategies and benchmark your performance with realtime insight. The best part, Sensor Tower

doesn't just deliver data. It helps you turn it into action with intuitive tools and expert analysis. It's everything you need to make smarter, faster decisions. Thousands of app and game studios from indie creators to global giants trust Sensor Tower to help them win. So why not you? Start your free trial today at sensortowwer.com. That is sensortow.com. Yeah, that Yeah, that I think that'll hit it out of the park because they've just been building it for 10 like almost 10 years, right? Yes. But no, like you're right. Like a lot like these companies, the premium companies, they saw the success of Fortnite, Roblox, League, and McKenzie, and the the IL kind of said, "Yeah, hit your wagon to the live service trend. It's, you know, it's going to the moon. Do it." But yeah, they just didn't have the skill set to do it. Like we had Concord that

taken off the market after two weeks, you know, Suicide Squad, Kill the Justice League. Um, even before that, Anthem from Boware. like you just you need it's a very certain skill set. You need those live ops chops to you know to do it. But as well, even if you do build like a [ __ ] great game, the live service gold rush kind of already has its winners, right? Like you can't just dethrone Fortnite or Roblox. And I mean there are kind of gains to be made, right? Like you know the success of Hell Divers 2 at the start of last year, Apex as well and Marvel Rivals. But like again like Hell Divers 2 like saw more premium success than anything, right? Like it it is a premium game. It sold well, but the retention numbers were super low. And then like Marvel Rivals um you know it saw sink and ship in Overwatch 2 and you know used the strong IP and like Natis' live ops chops to you know steal some players away from Overwatch. Like we say, it's a zero sum

game like revenues just kind of like you know the big life service players will continue to dominate the segment like because of like inertia and their live ops and content treadmills and the the budgets there and the expertise you need are just growing and growing. So like it's you just can't break in, right? And like you said, like a lot of the premium game studios shifted to live ops, uh, to live service during the pandemic and stuff when money was flowing. And now they're all kind of retreating back to premium, which like there is more room for success there, right? If they, you know, like in May right now, for example, there's only Doom: The Dark Age is really coming out for AAA. There's like the Elder Ring multiplayer game later in the month, but like if you release a game at the right time, you can have that, you know, release window to yourself. And yes, you know, the TAM is a lot lower than live service, but like if you cater to a niche audience, do something well, you can still sell

like millions and millions of copies. You know, again, player obscure, like that's what they did, right? And overall like with when you're making freeto-play games for console like the as we we talked about the player time is extremely finite. Uh so that's hard to break through. Then you have the player expectations that on console are much higher than they are on PC or mobile. And the overall approach from these big publishers is that they have to you know they're all public companies. They have to inform. They have to do forecasts. They the way they they market games are very different than you would market a a freetoplay game. And when you're operating in in this way, a games as a service is is all or nothing. That's pretty much it. And that nothing is quite big for these AAA companies because they spent so much time invest so much big of an investment into first making this freetoplay game and the team size is so massive because they put in this quality targets and because the way they produce content. So their break even point is

incredibly high and their payback is is very big. And so if they don't see an absolute monster success, [ __ ] hour one, then they pull the plug because it they already over spent on it. And it's not like Fortnite came out and it was overnight success. Uh, you know, Apex was that's a that that's that's the the poster child of how it could work is Apex, but pretty much everything else takes time to to come out. And and the way these publishers work also is that they're incredibly secretive with the way they develop like oh it's like all these NDAs and everything everything has been done with the highest level of security like you're you know making a biological weapon but but because of that they're not really testing and and now we're kind of you know seeing that that this strategy is not working. Yeah it's it's over. I think the live service gold rush like I said is done. the

winners are there. There'll be a couple more overtime that, you know, maybe they'll discover something that is just, I don't know, too awesome for players to pass up on, but I don't think that's an extraction shooter to be honest. Like, sorry Marathon. Like, I'm sure it's a great play, but as well. Yeah. What do you think is going to be the future on the gas? Is it going to be like these developers are going to go half in like they have been before? So, they basically sell the game at a little bit of a cheaper price because it's going to be a shorter one, but then it it h it it has a a free-to-play microtransaction component where you can continue playing sort of a hell divers way. Is that the future? I think yeah, I think something like that. I think, you know, they're like I said, they can't compete with your Fortnite, your Call of Duties. So, they're going to look for like niches like, you know, with hell divers, the co-op niche did really well. We see that across the board and I think a lot of publishers are going to go more like the

PVE route. So like the or PVE VP even and I think extraction shooters have got that part of it right. But like the game play is just so sweaty and so intense that it's not just something you can jump in casually like a battle royale. So I think we're going to see like smaller scale experiments of PvE VP games or just PvE games that are a different genre. Honestly, Extraction Shooter is like for your, you know, more casual gamers, which is what, you know, Roblox and Fortnite and Call of Duty have found success with. Um, they're not just going to be able to jump into an extraction shooter. Like, COD had its own extraction shooter in it and they took it out of the game because people weren't playing it because it's too [ __ ] stressful and annoying. So, like, you know, that kind of said it all to me really. Which studio just cut off their develop? Or was it EA? I think they they stopped development of an extraction shooter just recently, fired away a couple hundred people, which is also insane that they had 200 people working on a game for probably years on

end uh only to realize that yeah, there's really no demand for this. Mhm. Mhm. Yeah. People are realizing Yeah. It's such again opportunity cost consulting companies saying Tarov is awesome. It's the next battle royale. Everybody make one. Everybody made one and there's been no success. Zero. Zero. Yeah. Yeah. [ __ ] Okay, last topic. What's up? Something that I don't know anything about is portables. What's up with that? Okay. Uh, let's talk about the big one first. Switch to obviously is going to show, you know, lots of it's showing all the big signs of success. Over 2 million people trying to pre-order it in Japan. I think Nintendo's forecast is 15 million this year. um which I think is pretty conservative and is so low because they were like worried about the tariffs honestly. But yeah, I think the Switch to like the Switch in general has usually just been a success for Nintendo, but I think this time the Switch 2 is going to offer up more of a

springboard for like third party developers to like extend the life cycles of their games as well. you know, it'll give like engagement and revenue boosts for like Cyberpunk and I think we'll see like GTA on there eventually and things like that because uh even for new games as well cuz you know the Switch to even like is a bit of a potato in terms of its like uh tech, but developers are already building lower fidelity versions of their games for like the Series S, lower-end PCs. So, I think the Switch 2 could be like a bit of a perfect storm, like offering like a all-in-one third party development device for premium games anyway. And it can also like support PC games cuz it has mouse functionality, Xbox games cuz Xbox wants to put it [ __ ] everywhere, even PlayStation games. Um, so yeah, it's it's I think it's on track to do really well. It's coming out uh actually in like 3 weeks and uh based on kind of the activity of Nintendo's different development studios, I'm expecting to

see like a new 3D Mario that will like coincide with the next Mario movie, a new Pokemon game that's kind of uh going to launch a little bit after the stuff we've already seen, which is Mario Kart and Donkey Kong. And honestly, these Nintendo IP are like, it still blows my mind, but they're like some of the strongest IP in the world. Like like how like I think Mario Kart 8 has sold like 75 million [ __ ] copies which is like over 3.5 billion in revenues for Nintendo. Like you see all the Monopoly go like you know like billions in revenue. It's like Nintendo's doing that with a cart racer that has zero live ops. It's like [ __ ] insane. And they also have like the you know the sequel. They haven't announced it but it's going to come to Animal Crossing which also has like 45 million copies sold and a lot of that is due to like the pandemic, you know, but I think um you know there is actually a thing called pandemic nostalgia and I think a new Animal

Crossing will like mobilize a lot of those like you know underrepresentative demographics in games like women and stuff like that who came out for the Switch in the pandemic. So I think we'll see that like on the Switch side but that like I mean portables now mean just more than a Switch, right? like um I think there's a bit more of a tailwind for portables like across the board and again it comes back to the attention economy which we've just talked about so much on this podcast but like it's you know pivotal for the industry like you know it's been oversaturated for ages Nintendo noticed this early and they released like the hybrid switch so you can play at home on your TV and portably so again take the screen with you and kind of like years later uh we call them companion devices at Alineia. So like the Steam Deck and portable PCs like followed suit and like so they're not like uh dedicated consoles like they were in the past. Like you know the Steam Deck and portable PCs are a

companion to somebody's gaming PC and the Xbox Portable is a companion to like the Xbox console and the PlayStation Portal which is like a Wi-Fi tethered device where you can basically just play at home. the place uh like basically is like a transmitter for your PS5 that is a companion device to the PlayStation. So like they're basically like ecosystem signal boosts. their way to just get more engagement from current players, you know, like uh if somebody's on a on a train commuting to work, they can bring their Steam Deck to continue their Balders Gear play through or their when PlayStation releases its portable, which is happening like uh as per Bloomberg reporting and maybe some other sources, let's say. Yeah, didn't hear it from me. um they're working on that and yeah so like you know and what's different from the old days you know like the PSP for example that failed and the PS VA and that's because uh they were like a separate console right that needed their

own you know games developed for it so like there was just no content nobody was going to make content for like this like smaller device but with these like new companion devices they just play the games people are already playing so it's just kind of like engagement boosters. While they're not going to like grow the user base in any significant way, they will lead to like more spending and more engagement, which is kind of what it's all about. But I I've seen a lot of people like overhyping it, saying like, oh yeah, you know, like the Steam Deck's going to add this many million gamers. But like I I don't think that's true. I think it's just going to increase the time the current core gamers play, which will trickle into spending as it kind of always does. Yeah. Interesting. How about um how about Steam Deck? Like is that uh is is that the you know growing the future? Like how how should we be looking at it? Yeah, I it's growing like it's sold like I mean I mean my

estimates I put it at like four to 5 million now. So it's nothing nothing crazy but it's still good for such a clunky and ugly uh piece of hardware. Yeah, exactly. But it is a cool device, right? you can just kind of Yeah, it looks like [ __ ] but like it plays well. You can take your games with you and like Valve's data like they they put out a report couple of years ago showed that like Steam Deck play uh owners on average buy like more games cuz like you get this device and you just like you know buy a bunch of games like you do with any like console, right? Like you you uh have a higher attach rate and again it's just about engagement if cuz like it's just an extension of the Steam platform, right? like I don't look at it as a separate like console. Uh so, you know, for example, if somebody just had a gaming PC, maybe they'd be playing Steam 20 hours a week. Uh if they have a gaming PC and their Steam Deck, maybe that will increase to 25 hours cuz they can play What? Commute in next to their

girlfriend on the couch. When their kids watch a [ __ ] Peppa Pig or something, they'll play their Steam Deck on the couch. And the more people play, the more they spend, whether that's premium or, you know, live service. So yeah, I just see them as ecosystem signal boosts that yeah, we'll add more revenues to the market, but not really players. And I mean, maybe a PlayStation portable like will add more players. Maybe kids will get that for Christmas, but again, that will come uh at the expense of Nintendo, I think. But Nintendo has like Mario and all that IP, so maybe not. Yeah. And and can you talk to me about like cuz I'm trying to understand when I go to the store, there's the Steam Deck, that ugly piece of great hardware. Uh there's the Nintendo, and then there's these Legion decks, there's the ROG like devices. Like, what are those? Oh, yeah. So, they're basically like Steam Deck competitors. Again, you can just kind of

extend your PC library with them. They're mainly Windows right now. So, you know, you can actually play Xbox games, PC, Xbox games, and Game Pass through some of them, but they're right now they're a lot less optimized than like the Steam Deck, which uses like Steam OS and like a really like complicated called it's called like a uh Proton layer that kind of makes games just kind of like work on a Steam Deck. Um, but Steam is actually rolling out Steam OS for a lot of different uh handheld portables as well, companion devices. So, even those like uh the ROG Ally and the Legion Go and all that, which are a little less optimized, a little bit more clunky, honestly, eventually they'll probably be able to to run Steam OS and like work with Steam in that way, which of course is [ __ ] awesome for Valve because they just want people on Steam buying games on Steam. So, you know, when they eventually do that, yeah, it will grow. But honestly, I think for all intents and purposes,

it's like the main one is going to be the Steam Deck and it's going to be the Switch. The other ones like maybe they'll break through and obviously a PlayStation one or an Xbox One will serve those audiences and people will buy those, especially PlayStation, right? Like if they bring out a portable PS5 that like plays PS5 games, that will do well like um and will like carve out a niche for itself. But as for like the ROGs and the Legion goes, like I think they just can't compete with the Steam Deck brand. That was kind of, you know, there've always been like Chinese manufactur factors who made it, but the Steam Deck in a lot of ways was like the first big first mover, right? That was the one that made the splash. And it, you know, it's so connected to Steam, the biggest PC distribution, you know, platform store that you can't dethrone Steam for the same reason that Epic Epic Games can't with free games, right? And uh game ep game pass PC con with like you know all you can eat for 15 bucks a

month like steep that the brand like the brand with Valve PC game it it blows my mind like I've never seen people so defensive of a [ __ ] Monopoly in my life. It's wild. Damn. Well, we covered a lot of different things. Was there something that that we didn't cover out of those five topics? Um no. I think we covered everything really. Yeah, we've been we've been chatting a lot. We've gone up to the the full hour and a half. Yeah. So, uh, for everybody listening, Reese's LinkedIn profile below in the description as well as Lineal Analytics and reach out to me to Ree, give us feedback. This was uh a normal podcast, not the sort of a lectures that we tend to have a lot of times. uh just a banter about the the current state of HD industry double AAA PC console. It was a pleasure having you on race. You have a wealth of

knowledge and and a lot of lot of information and most importantly you're not afraid to say what you think and that's the the best part about it all. You're not trying to sell. You're not trying to be you know super nice towards everybody. You're just saying what you're seeing and that's data. And if you get offended by the data, well, piss off. Yeah. Just, you know, just go on. It's It's It is what It is what it is. It's great. Yeah. Yeah. Exactly. But no, it's been a pleasure, Mishka. Thanks for for having me on, letting me just yap on about the HD market and, you know, plug a linear a little bit. But yeah, if any if any listeners want a free trial of the linear platform, just reach out and and via LinkedIn on the link below or just Yeah, just just, you know, reach out to me. I'm I'm a nice guy. I'll Well, mostly mostly. Yeah. Depends who's asking. Exactly. Exactly. But no, thanks a lot. Thanks everybody for listening. Catch you next time.

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