Fireside Chat: The State of DTC In Mobile Games - Maor Sason & Harri Manninen.

Next we have Mau Zarsen and Harry Maninan who are going to have a fireside chat about the state of DTC in mobile games.
Well, great to see everybody. Um, thanks for joining us for this fireside chat. And look, we have the uh the cozy winter fireplace. I'm from Helsinki, so uh this feels feels like home to me uh with the fireplace. How about you, M from warmer climates?
Yes, but it feels like home here. Always good to be back in London town to see

all these beautiful faces talking about direct to consumer anti- monopolistic.
I'll give you one of these.
Thank you.
Um thank you.
So uh we only have 20 minutes so we won't do long intros. Um co-founder of Play Ventures, CEO of Appcharge. We were very lucky to uh be an early investor in Appcharge. We invested in 2022. first believers.
Thank you for letting us invest.
Thank you for investing.
Um
we couldn't have never make it without you guys. Really Play Ventures.
Thank you. Thank you, sir. Um however, it is the founders who do the work and we're just here as as as supporters. Um, one of the things that I want to highlight is the incredible report that you guys just launched where you said you've um, processed more than 700 million worth of DTOC transactions. When we invested, you had processed zero

dollars of transactions. Um, and it's clear from the ladies excellent panel that they were just here talking that it's not it's not a it's not an exper experimental thing anymore. it is something you should have within your core strategy as a mobile publisher. Uh I wonder like tell me about when you guys started how has the uh the momentum changed when you talk to your customers you talk to all these publishers developers on how they approach D2C. Um so it it's it's really interesting if you look like uh in hindsight how how the conversations really changed like back then when we raised money there were not a lot of believers you know you were one of the very few who could have foreseen it um there was a um there was this fog like around Apple and Google like how are they going to react nobody wanted to take the risk because imagine your whole revenue is depending on these platforms by the way they they are doing a good job there is still the

distribution. Um they are totally overcharging. They know it, but there's still uh the the platform for you uh to download and to to to get get to know all these wonderful games. So most of the game developers maybe half justfully were were a bit afraid of how they're going to react, how aggressive they're going to be. I think now thanks to to Tim Tim Sweeney and and the folks in Epic Games that kind of opened the trial and the European Union that pushed it really hard and then afterwards uh George Gonzalez Rodriguez which uh um kind of opened the gate in April. It might get reversed. We're going to discuss about it later. Uh it's it's a strategic pillar for everyone because the regulator has has his eyes on on on Apple and Google. It's not it's the the danger to to get cancelled or to get blocked by the platforms is not as high as it used to be and it's um more um um visible of what you can do and what what

you cannot do. Where where where are the lines and it's going to be more visible this year. It's going to be um uh regulated. It's going to be out there in in terms of policy. So I think now that there you the uncertainty level is not as high. um developers are capable of planning and and that's what's happening. It's a strategic pillar of of the road map of every year like every smart developer now uh is is planning ahead. It's it's just it's just like a UI strategy you have a D2C strategy you have people who are uh just accounted in the in the organization for D2C and that's that's the major difference and it's being built to the numbers to the to the IBITA to the cohorts of the game. So um that's that's the major shift.
I I think a core thing there that you say it's a strategic thing now. Um and you know D2C when we started talking about it and sometimes still there's a lot of talk oh it's just to avoid Apple tax or Google tax and it's just about

payments but I think it's so much more than that right I remember like one of the things that always bothered me on the whole mobile ecosystem is like the lack of true interaction between the developer publisher and the player base. um and and that that that feeling of of of community and and and and building so much more than just a transactional layer between Can you talk a little bit about that? Are you seeing that? I know I know you're building that inside of Appcharge as a as a suite of products, but tell me tell me like what does the modern D2C stack look like in addition to just the payment piece?
That's that's a good point. So, as as a game developer, you always have the next not one thing like 10 things ahead of the road map. So community and and interacting directly with the consumers, it's not something that common especially if you're not well established. Um so our north star were were Playa uh of building this community and I think that they were a great example of of of how it could be conducted. Now that there is a big

incentive uh that is a monetary incentive to to interact directly with the consumers and building these interactions and to interact with the community and automate these communications. Clearly it's like genre dependent but it's it's worthwhile for all genres now. It's it's being it's being done differently and we can talk about strategies a bit later on but um a big part of our offering is the distribution. how how you how you get to your players, how you communicate it to them, uh what's the right time, how you entangle the strategy for your web store and the in-game and how it's going to be uh collaborative and how the user will be constantly informed about what's happening out there. So, it's not a one-time thing. Even if a user uh did his uh first-time deposit, it doesn't mean he's going to get back. How do you constantly remind him like what are what is the what what's good for him like to bypass the medi the mediator for because Apple and and Google is still like the superior funnel. It needs to be beyond

just a transactional level. It needs to be feel like he's a part of of uh a closed circle of VIP. If spending users they want to feel important and they want to feel there are other users that are a part of it. So, it's funny you you highlighted Play Tikka and I see some Play Tikka leaders in the in the in the audience as well. Um, I have to say, uh, Play Tikas, they disclosed the their D2C revenue quite early in their in their, uh, quarterly reports. And I have to say that was one of the things that started to attract us to the opportunity with you guys because you could see like every single quarter that Playa released that quarterly report, the the the uh the amount of D2C transactions just kept on going up. And as a as a as a sort of a a context point there, we've seen like other companies in the social casino space and even the casual space, but let's call it social casino space like huge saying they are doing like 30% of

their revenue on on D2C. We had what Julia was saying they're doing 40%. So this is this is like incredible amount already and and I think we're just getting started. But then we see also categories where I think you you start to see it plateauing a little bit earlier. What would be be sort of your advice to some of the developers here who are struggling maybe to scale that or are thinking about what what should be my strategy in in increasing that share. So I think that first and foremost, this is like basically our strategy and my strategy for everything in life. Like look at what you do. Who is doing something similar and it's doing it best? Like if you're a casual game, if you're social casino, if you're hardcore, who is doing D2C best and why is he successful and why am I not? And I think that's the most important. So uh uh get to know and talk to your peers. be be kind and and ask you you'll get help like everybody everybody wants uh to share their success. I think that's

first and foremost and then the strategy is very much uh um genre dependent. So where you have uh highp paying users uh you're more focused on the personalized human touch experience where it's casual and you have uh uh thousands or tens or hundreds of thousands of highpaying users relatively to the genre genre you need uh to build uh more automation automated tools that are personalized. And now more than ever with with AI it's doable. Uh you can do it uh you can build it you need to plan ahead. Talking about AI, I obviously, you know, in our venture venture ecosystem, AI is is basically taking up oxygen from from everything else. Um, how is how are you guys approaching sort of AI opportunity? I know you have probably internal stuff you can't really talk about, but is is is that something that um that is a key part of what your ongoing discussions

with with your clients as well is like how do you utilize AI for what whatever for live ops from from VIP management to to things like this. Is that something uh you're actively sort of engaging with your customers with?
100%. So uh first and foremost our our incredible team uh has been adopting like AI for the past couple of years for internal usage. Um the most obvious ones are like uh coding and and uh and uh art and graphics. But on top of it, we are we we haven't launched it yet, but we are working on a couple of solutions to automate exactly these like mass distribution methods to talk to players that uh were not worthwhile to to to to click with a with a live persona, but you you would like uh an AI agent to interact with because they're still spenders, but they just never cross the threshold of h a person to talk to them and and to dedicate his time. So these are the kind of areas we're looking at uh in terms of uh uh live ops and

revenue operations uh to get a better analysis. It's something that we're going to look into it. Also this year we're going to release uh I think in in the end of Q2 we're going to release a few features that are uh that are very coherent with like um examining and having conclusions in real time and to act act upon them. And it's not necessarily going to automate the whole funnel at the beginning, but you'll have call to actions and you'll be able to manage your revenue better. Sounds like exciting times. Um, I want to go back to the pretty awesome uh report that your team put together. Like what a what a what an amount of data. I I I was looking at Ruben's post on LinkedIn and it just said that what a project that was of putting all that data together and extracting the insights. Was there anything particular from that? Obviously, you've seen it up close with with the customers, but from like what should the audience take away from that report now that they're all

going to go read it after our our little chat here?
I think the the velocity of success of certain um developers who did an incredible job. It's not it's it's not credit to App Charge. like our bea best case studies were the ones that the the team took the project seriously that we had like manh hours dedicated to work with us and they were agile enough to to to be innovative and it it is uh innovation on a on a high degree because not many have done it before so it's it's not that you have a a playbook out there on Google that you can just okay this is how it's be done I have the manual and that's it you need to explore for and every game is different and every genre is different and every uh team in your in your organization is different. So I think how fast uh uh certain developers were successful I think that's pretty incredible and I

think also how it affected uh um their strategy in terms of for example UA uh you can also find out from and and they they what's the word for it like cut it from the numbers. Um anyway, uh I think that's the most important piece and also how certain features had like massive effect on on the D2C as a whole. Also something that we would love you guys to look at.
So obviously you you guys are just getting started. Um as you think about you know the the this year and the and the years to come um how are you how is Appcharge a part of like that educational process? Are you guys thinking about you know just what you said about unearthing these insights like is that something you guys want to do um at scale you know I don't know if it ranges from webinars to running even your own conferences one day or what so

so how are you how are you thinking about the the educational piece because I you know in the ladies panel that just was before us there's a lot of talk about like you also need that educational component for people for for all the developers to understand that this is this is a a paradigm shift and If you want to be competitive in today's mobile global market, this is a strategy that and and and and and tactically even this is something you have to master
100%. So we're I I think we're already in this approach. Uh we have a lot of the on the table. So we're not publishing everything but we see oursel as like an open source for direct to consumer. Everybody who's giving us a call we're just hey we can share everything. But the uh the the leaders who understand it, they want the bits and bites and the details of how it's happening and the the the platform and the technology that are collaborating with it. We're taking it to the next step and we're doing like personal sessions and obviously the the solution needs to be personalized. Um so

that's more exclusive to our client, but the playbooks were very open to buy. you can just go to our website and we're sharing and we're speaking about it just like now in every opportunity because we we believe that it's it's crucial for the industry as a whole.
You spoke about I mean it's still it's still an evolving landscape also from a from a sort of legal and regulatory perspective and there's a lot of moving parts. Um but you said it's important to set the foundations right at that level. details may change, you know, terms may change, but there's no going I mean, the Pandora's box has been opened. It's not it's not going to be closed anymore. And so, what do you think are some of the key sort of uh foundational things that that u developers should should look for instead of like, you know, of of course they have to be in constant, you know, know how how regulatory things change, but but do you feel like the foundational mindset is is is the starting point?
I do. I do. So the reg the regulation is

important. You need you need to be fluent like D2C just like I said it needs to be like every sector in in your planning you need to you need to plan ahead and you need to be well informed and you and you better have people that this is their job because the imagine how much money is it in in big scale. Um so regulation have your have your your in-house or outsource lawyers to be informed. Uh but in terms of how you build the foundations, you just need to plan like everything. Are are you going to have enough uh uh employees dedicated to it? Are you going are are are you going to have the platform built with uh um enough flexibility to incorporate incorporate it easily to your stack? Uh are you taking under account the uh the uplift and the cohorts in your user acquisition strategy? you have to otherwise uh you're you're going to lose a lot and your competitors will and

they're going to outbid you in the market. So I think uh all all of these it's not like a one trick pony all of these together are going to make the the the difference and the the the planning is is first and foremost and execution you know uh every company with its own but I think it's it's crucial to to to have people dedicated just to it. Have you have you seen that with your customers having like dedicated teams DTC dedicated teams yet or is that sort of something you're that's that's coming up? I think in the beginning no but then after that they have materialized the uplift we have started to see a shift in product people and monetization people uh having allocated hours days and then later later on like personas in the organization just for D2C
personal question um I want to I want to hear your thoughts on this one
we've gone from when we invested

You guys were a small team just in Tel Aviv to now being more and more global
130. Oh, congrats. So, how as a CEO and this is for all of the the founder CEOs. How has your sort of mindset changed from running from being a part of such a small team in Tel Aviv trying to figure out like how do we do this to now scaling to with a global team
that's every day is a journey I think uh uh Roy my co-founder and I are are tackling new challenges every day it's it's just you know you need like we're we're we're approaching it like students we're here to learn we're trying to to get to know the best people to work with in the industry and and we're and we're just coming humble to to every situation. So like we we we haven't won yet. Uh we're we want to improve, we want to evolve and we're flexible enough and we know we

know to say when we're like we're out, we've done a mistake or we know how to scrap a project when it's not successful. So I think just stay humble, work hard and that's the secret. the this day you stop learning is the day is the day you stop developing as a person. Right.
Exactly.
Um great Mo. It's going to be an exciting 2026. Um how are you feeling about the year ahead?
I think it's Wow. It's going to be a super 2026. Going to be a lot of changes. We're happy. We're excited. And and I wish you all guys a lot of luck in all your future endeavors.
Thank you all. Thank you very much.