Is X-Hero Mobile’s Latest Top Grossing Anti-Hero? - The Metacast by Naavik

[Music] I have you know sugar spice and everything nice and you put in a little cauldron and you just mix it and you see what comes out of it and I think X hero is the Powerpuff Girls yes you get saved the dog going and I know how everything [Music] hi friends welcome to the metacastron table by navic today I'm joined by yellowspendron teacher at NYU and podcast co-host of unboxing which is for the gaming curious so if you're curious about gaming go and check it out Tammy Levy a chief games officer at Captain TV and avamanyukumar co-founder of navic hi everyone hello hello it's good to be here thanks for joining today I know I keep

talking about the weather but you know I'm from England that's what we do here and I had to wear my my winter coat cycling today and now you can all live without very important information good luck for the rest of the year yeah it's getting cold here too and it's like this weird you know wet and cold mix happening so basically the transition to Autumn it's yeah a little bit irritating but I'm hoping it like faster over so in Germany you have those really cute bakeries to sit inside drinking coffee eating a cinnamon bun whilst watching the rain uh yes those those do exist um but yeah getting out in the rain and actually getting to one of those bakeries is the headache so thank you just like end up staying at home I'll I'll put it I'll put it into that bucket I I was just in Amsterdam and Germany and Belgium over the weekend and everywhere it rained and I unfortunately

it took that terrible European weather back with me to Brooklyn it's study today but it's been raining here too it's like oh right I forget September is the month where it all goes south yeah yeah that's that's kind of like the worst transition month right on that happy note we have an Alex essay competition so if you're doom doom and gloom watching the rain he's trying to write an article I know you can write an article I don't know money if you have more details to to share is open to to anyone any kind of topic that's regarding game analysis is a good way to type into um potentially more opportunities in the future with with navic there's a monetary reward is it reward the right word in English price surprise yep yeah there's some prize money like uh the person who comes first gets uh yeah a cool 1K uh USD second is 500 and third is 250. oh that buys a lot of game passes

yeah so if you want to know more um you can check out the navx newsletter and is there another source to go to Mania um we also posted about it on our social so you can check out our LinkedIn page and probably the yeah the probably one of the most recent posts would be about it um but yeah the newsletter is definitely the place to get like the deeper details um or you can just reach out and we can tell you more about it sweet well look forward to seeing all of those submissions um and today we're going to have a diverse mix of topics we're looking into X hero I briefly talked about it last week and then um I spurred Manu into talking about it today yeah we're going to be looking into whether is it a scam is it what's happening or is it an amazing Innovation we'll see we're going to look at meta mechanics in casual games which is a bit of a

follow-up from that discussion um analyzing the change in power dynamics between platforms and Publishers which yoastro a little bit in his newsletter and then also then if we have time we'll see if we have time at the end uh also discuss the rumored Apple's 30 cut from in that nft sales [Music] yeah from from from scams to uh platforms to revenue Cuts oh great I know fun games industry well we're we're giving a moment to celebrate September's Gloom all about all right mind you yeah do you want to jump into xero sure no actually before that it would be really cool to also maybe give a word for like your new podcast uh I am here you mentioned it at the start but uh unboxing is uh is the name of the name

of the poet uh I was just like before we started recording I was just uh saying to your step I really like the um the niche that he's picked going for like you know educating the gaming curious about the inner workings of the games industry but in a very like simple like you know simple words fashion versus using all our heavy acronyms and such uh but yeah would be cool to hear a little bit more about the new podcast oh I appreciate the shout out thank you so so much it's a a colleague and I lay nuney who is more of the cultural studies type of brain we we teamed up well really I should say we had a few beers and from that conversation we're just like you know I wish there was more for X you know so many of my students and and hers her experience was the same is that you know students often come to a classroom with an idea of like oh I'm gonna take this video games class and I

really love FIFA or I really love you know Final Fantasy whatever and then the whole class is about here's all the reasons why FIFA is the best game ever and everything else is irrelevant and so so often you find yourself trying to pull somebody's personal opinion into a broader conversation you know like does it really make sense to think about it that way or is there a strategic question you know that we can look at let me look at FIFA or Final Fantasy or any of these other games and so we're trying to get away from personal opinions into more sort of abstract Theory and um you know it seems like there's a lot of uh if if there's a metaphor in here let's say broccoli or your ABCs is like that's really what the podcast about like we just sort of like let's have that conversation let's sort of do the basics for people in the classroom but also in a lot of the businesses that we talk to there's here some of the basics this is what tencent is up to this is why there's inflation and how it's impacting game sales whatever those are sort of these rudimentary topics that are relevant that we

couldn't find anywhere else so that's really where it started but you know of course it's also uh I'm very happy to always be part of this conversation with you guys because it's a uh it I think that's the dialogue that's missing in general from the industry so thank you for that nice yeah I'm an avid listener uh so yeah looking forward to new episodes laughs I immediately felt the personal opinion as soon as you said Final Fantasy I was baiting you I know I yeah it's very emotional medium all right um so I can get into my topic so um there's a new game which probably a lot of the listeners have already heard about but for the ones who are uninitiated uh the name of the game is X hero and it's a new mobile free to play title which has been climbing up the top grossing charts quite quickly over the past quarter or so I think at the moment

it's at about the number 95 position in the top 100 Crossing um and the big question around the game is of course like how how is it climbing up the chat so quickly uh but there are after like for a lot of people who've actually like played the game uh or seen like some of the advertisements and such or you know done research on who's published the game and things uh there are questions around is X hero a scam is there like some kind of you know background Shenanigans going on with the game uh because it's uh like when you when you actually like play it it's pretty surprising to see that you know this kind of a game is in the top hundred grossing so so yeah so I kind of decided to you know just do the research and try to like answer some of these questions and maybe like give some background on

yeah what I found about the game and you know um I'll I'll leave like the big reveal of whether it's a scam or not maybe for later but uh you know just walk you through a little bit of my research uh so um so yeah so just like overall um it's uh so basically this game has it massively started scaling downloads over uh 2022 um it said about like 8 million downloads in September and around like 12 million over uh Q3 of this year and it's hitting about 8 million rev in September and 15 million in Q3 of this year so like 15 million overall Revenue over 12 million downloads uh like I mentioned it's in the top 100 grossing number 95 over the last 90 days and it has like somewhere between like a four to five dollar RPD uh in us at the moment so that's just like some broad context

um in terms of what the game actually is um uh it's an ideal Idol RPG game so think of AFK Arena uh when when you're thinking about this game um and but there's there's a Twist that's there and a pretty big twist uh at uh basically in the onboarding uh uh side of the game I'll get to that in a bit um so the I looked at it basically from you know who's actually like published this game first I think that'll like help set a lot of the context and you know probably um help answer the question whether the revenue is legit or not um so the company behind the game is um this Chinese publisher called um Network I think that's how you say it uh and these guys have been around for a long time um and they're they're a publicly traded uh company on on the Shenzhen uh Stock

Exchange market cap of uh what a little over like 500 million um and the stock price hasn't really moved like over the past five years so not not the biggest of companies but they've been around for for some time and they've been focused on uh games publishing all that time I think they have like a PC Revenue division uh in the company again like all our public statements are fully in Chinese so I couldn't really like decipher any of that but from whatever I read online they do have a PC uh gaming division but more recently they have started to lean to uh the mobile side of things um again I don't really know from the public statements you know how much of the revenue is coming from mobile or not so mostly dependent on you know data providers uh data over here they have about like 22 games in the portfolio um in the mobile portfolio but nothing has been like significant in size uh you know since 2018 up until x0 but 2022 is

really like where the interesting stuff starts and you know X hero is kind of leading the charge over there so in terms of like answering the overall question of is the revenue behind X hero legit just given the company's background and all the other game mobile games that they have published in the past I I think it would be safe to say that the revenue is pretty legit um but the strategy uh that they're applying to kind of scale that revenue is is what is more uh interesting and we'll get into that now so the reason I said that 2022 is where things get really interesting is because they are doing the same X hero strategy with two other games also and all of them are idle RPGs so they're all AFK arena games uh and just with different theming so X hero has this more uh cyberpunk theming uh the second game

it's called super world after translating it into English that has more of a fantasy style theming and the third one is called heroes of War and that has a more like superhero uh tilt uh theming xero is the biggest of these with the birds like you know like I mentioned 12 15 million in rev um the second one super world is more at like 2 million right now but significantly scaling uh similar to X hero and then the last one Heroes of board is at one million but again like significantly scaling so now the question is okay how how are they like you know being able to scale these games um The Twist uh with the twist that I mentioned over here even though the core game is like uh if Karina is um they have this very random save the Doge so save the dog game uh experience in the onboarding tutorial it is absolutely

like out of place just completely out of place it it does not like match I mean for AFK ignore style experience having like a save the dog game where you have to like draw uh you know shapes to uh block holes so yeah basically what you do is you have you have you have the screen where the dog like there's the dog characters sitting somewhere on it and there's a beehive and as soon as you click um then the bees come out of the hive and they go and like Sting the dog your goal is to basically protect the dog from not getting stung and how you do that is by drawing like different shapes and you know protecting this dog I I was like you know like just what what the you know really like what what the hell is happening in this game and um so so yeah so that's kind of the Twist and and then and there's this massive bait and switch that happens in the game so you you enter you download the game you play this like random save the dog

experience and then after about like four or five levels of that then the real game gets introduced you know so then the full AFK Arena experience with all the character unlocks and the typical AFK Arena progression and modernization systems uh actually comes into play to summarize basically what they're doing is they want to look at oh these are the top ad creatives that get the the best conversion rates uh let's you know throw that in the tutorial so that you know we can't get banned for saying like oh we're not really offering that experience or we don't get like immediate you know on installs because it's not that experience and then it's like oh surprise we just like moved that surprise down the funnel so instead of like the surprise being when you land on the app store or when

you open the game lose her prices like five levels in yeah yeah so that's they're not getting banned uh because of uh fake advertising is I think one of two reasons why why they're doing it like that um the other reason is more related to the UA side of things I mean this is an idle RPG game and therefore it's a genre with very very high cpis right and in a post idfa World um yeah you basically have no chance uh so you have to like find creative especially for like um especially for a vast majority of game Publishers who may not have the the talent or the resources to you know create long-standing brands that can bring down cpis uh through just like brand marketing techniques they would have to like you know you like utilize the tools that they have in

hand to basically get creative with how they want to reduce cpis so yeah like you said Tammy uh they they basically you know going with a hyper casual ad strategy which is uh showcasing this whole save the dog experience uh right up there uh that's helping with like broadening the top of the funnel and therefore like reducing uh cpis quite a bit and then when you come into the game then you're exposed to this like save the dog tutorial game and then the B10 switch happens uh after that and then the real game is introduced um their creatives are I looked in the tick tock ads library and you know their creators are performing like really really well so you know uh in terms of clicks that they're able to generate they are in the top one percent of uh all all the game advertisements out there and um I think yeah focusing on the clicks is probably the the more important part um because that's probably the part which is um you know helping to reduce the cpis

uh over here I I have some counter counter arguments okay can I just complete this conclusion okay then we can get the counters so um so yeah so the reason I feel that um the clicks is the important part to focus on and I have to um shout give a shout out to uh our friends at uh two and a half uh Gamers uh I think it is and uh Felix over there um probably has the most the smartest hypothesis uh for this that I've heard um basically there are these end cards that advertisements have right and um after the after the 30 second ad plays then you know you get to see like an end card which says install the game and what has been found is um and the data Sports is supports it is the longer that you extend the time of those end cards like showing up on the screen the more

clicks It actually drives to actually to kind of you know go ahead and make the install of course like most of those clicks are driven purely because of user frustration to get rid of the screen and just go ahead and make the install but then because that click is happening all stakeholders on the uh acquisition funnel side of things make more money but then the pressure is on the game design team to actually um uh take care of a retention impact because of you know that poor negative acquisition experience and how they're doing that is by kind of implementing that fake gameplay into the tutorial of the games and that's why I like this whole like save the dog uh gameplay experience kind of exists in the tutorial of uh of X hero um it's it's a hypothesis but honestly it makes a lot of sense to me um whether I agree with you know um whether I agree with whether that's

the that's a good way to do it or not I think that's a more like philosophical debate because at the end of the day it does Drive results and it does does Drive business results um but um but yeah that's kind of uh at least that's uh that's kind of my reasoning for you know why they have kind of taken this approach and why they're like seeing all the scale um and probably the last question to ask is okay is it all sustainable I personally think not because if you actually compare like their metrics to you know AFK arena is there like uh yeah on the on the RPD side they're like you know 3x below AF here you know our Dows are like 2x below that uh retention is really quite bad so even though they might be getting all the scale right now it's probably not it's not a long term strategy at the end of the day but I think a lot of other development teams would pick up on you know what they're doing over here and then try to experiment with it in their games that

probably retain much better um but yeah anyway okay now I'm done I hope I I hope that that was like relatively like clear and I didn't like jump around too much but uh but yeah I'm curious to hear your counters I like the going through the App Store reviews it's all scam this isn't why I wanted I just wanted to save the dog but I like I think it's when you find a player um that the title says came for the doggo stayed for Galactic domination and this really encapsulates the experience I had with the game I love it I was going to put it out there I honestly I am not bothered At All by The Clash of the two different games within the game it really works for me um we've been speaking I I'm still going to do counter arguments this isn't my counter um um I think we've been speaking about misleading ads and we look at playwricks and other

um other game studios out there who the game has nothing to do really with the ad that they're presenting and then sometimes they have to put a mini game they're still really detached it's like you just sticking it on so that you can pass through the App Store keep doing misleading ads and I think that X hero is showing an evolution in that model where you take it a step forward and instead of Simply being a misleading ad you actually introduce a hyper casual element in the game and when I was doing some research about x0 I could see that the the company experimented with different hyper casual um gameplay to see which one performed better and then you can almost see a link that when um say the doggo became massive as a hyper casual game you can see that when they introduced in the game it also took them to other Heights they probably also turned on the top of UA so not only related to that and I think additionally what makes it feel

less disruptive in my opinion is that doing the levels and save the doggo gives you it's almost like a points Milestone tracker that a lot of Eastern Asia um RPGs utilize where you have to do certain things and that gives you points and as you get points you can unlock rewards in that tracker and so actually doing the save the doggo gives you stuff that you can then use in the idle in the idle battler by having summons so just having that little interconnection for me as a player it didn't bother me at all and I I actually really enjoyed how it tickled two parts of my brain where I got so connected to the doggo and I didn't want these little bees to to hurt the dog and that's really it's actually quite challenging the puzzle it is it is a puzzle it's more than just drawing a line you have to be very particular with how you're Drawing the Line um and then being able to switch between that to having an idle cool experience

full of animations it just worked for me and I think we're going to start seeing more and more games do this because if you look at their App Store the first presentation is all about the save the doggo and so exactly like you're saying Manu you open up to a user acquisition strategy that we can see through hyper casual games um and that allows company you know allows games to to expand the the market that they're targeting with their UA of course then it's a bit bait and switch however I do think we're going to see games perfecting the formula over time even more so in this post idfa and you know in a couple years time Google's also going to make some changes maybe maybe one quick response before you get to the to the big counters but uh um yeah I honestly don't so at least like the whole like save the dog progression experience you're right like

it does kind of give out some rewards that connects to the core gameplay but but I think if you play deep enough you can basically end up ignoring the whole save the dog progression land completely um um that's why I said like it's a pretty big like beaten switch I'm also like I agree with you like you know more games were tired but I don't know like really how much there is to like perfect over here it's um it's I don't know lack of a better word it's a little bit gimmicky to you know uh to basically open up or like broaden the UA funnel quite a bit uh but yeah like I said I think like from a purist game designer lens you know I think everyone would like throw So Many Stones at what's happening in this game but um but like I said it's uh you know not not all teams um you know um have have the have the talent or you know um or the time or even you know the will

to like create like you know brand marketing uh strong game experiences uh and therefore they kind of have to resort to uh bending the rules in or the limitations in which they have to play and to basically make user acquisition work for them um and I think that's for it this is yeah essentially just uh you know a culmination of uh that thinking at least in my eyes but yeah I don't oh sorry yes I know that you wanted to say something no no go ahead go finish your thoughts I don't think it's really bending the rules because like that's mobile games the rules are there to be broken we see hyper casual games introducing metas that we're going to discuss in Tammy's topic we see the hybrid casual we see you know core gameplays being mixed with metas and trying to find the perfect combination mixed with the Perfect theme and I think this is just the next thing where yes it is quite disruptive and then it stops at one point but what if

you could take that further what if you could have more of a hyper casual game that doesn't feel so disconnected to the main theme of of the the core game where you have the you have the monetization opportunities I just feel like it it's not perfect and there's a lot of issues with it I don't deny it and who knows if it's sustainable but I feel like there's just something there to think about more in terms of mobile gaming yeah yeah I think what what's what's interesting to me in in what we're they're doing here is that it kind of you know mobile games is your as you're saying Maria is like we've landed at a place where you're like it's a game of Min maxing even on the developer side right like you're Min maxing for uh how do I get the the biggest audience and how do I uh you know retain them long enough or monetize them long enough but ultimately like how do I maximize my my LTD

lifetime value for the that bigger audience that I'm reaching so all these combinations that we're seeing is it's like kind of mix and match of all the different elements that can move the the levers um in that equation in your favor whether it's you know can I lower my my cpis and I think like you know hyper casual and you know for the longest time uh art styles were kind of a big thing for trying to to lower your cpis um you know there's kind of like this this very big bottleneck now and like finding users and reaching an audience with you know all the ideas changes and whatnot um so it's like okay even like the players that I get how do I maximize my my retention what I think it's it's interesting is that they they they're doing it kind of at a very light touch way um and I I would be very curious to see

you know how how much are they actually increasing their retention like how much is it actually paying off I would say uh clearly they you know they may they pushed it a little bit down to funnel to like day one of keeping players around but are they still seeing the same drop-off that they you know they would have seen if they didn't implement the the Dogo um kind of mini game type interaction or is it actually like giving some incremental upside that is actually moving the needle in that LTV equation for me like that's that's the most interesting question too um because I'm I'm of the of the mind that moving retention is the hardest thing to move um especially you know because it's so core to to the game to what the game is in itself um so it feels gimmicky to me but makes

me also curious to see like did they actually move the needle here by just like throwing a gimmick at at the very top of funnel I have such a different perspective on this in that I totally get it that there is a huge marketing component here right it's acquisition and retention obviously playing a huge role for all these um reasons that we've seen the develop over the last year right the way that platforms are dealing with this and and how do you stand out how do you get people especially in a hyper casual scenario keep them interested but then I watched my nine-year-old and he's playing Roblox while watching YouTube and he has like multiple genres going on at the same time and he's totally comfortable with it and you know and I'm approaching the level where I feel as a parent I need to step in somehow but also because mostly because I feel like it's sort of spreading his brain a little too thin but like how do you make sense of this chaos but he does in fact to the degree that it's relaxing and so this mashup of genres

seems exactly the kind of creativity that would manifest in a digital environment right like where you would have something is Goofy but as Maria describes it's still kind of finicky kind of saved a dog from the bees and then rolled it into this card battler type game or more simply put it apparently in China they also do a lot of drugs because it's quite ingenious to uh to come up with something like this but it's the the idea that you would match up these different categories and genres it's such a fluid way I can see that there is a a mechanic to it that that would benefit you from a business perspective but it's also sort of this is exactly why I remember um a few years ago there was that one um that one ad about how you could help your headache by applying it directly to the forehead some kind of thing and they would just repeat that like incessantly for 30 seconds people like Jesus and it and it's interesting because

the ad gives you a headache but it worked because it takes all these genre conventions and just messes with them and that's what makes it stand out and then the additional component to me here that sort of I guess academically problematized to this is um you know I'm trying to think of a scenario where you we've been playing games in a certain way for a long time and one of those ways was um loading screens only ever would have like lore and give you tips on how to whatever play the game but you would never have interactive moments between loading screens now during a loading screen and that was because Bandai Namco if I recall correctly had the patent they licensed I think it was called auxiliary games and so as your game as the main game was loading they were the only ones where you could then play something and that license expired and you know I haven't seen much many examples where game companies do that now but you you can totally imagine a world where as we start to cram games with

more stuff and more content and more variety and interesting things to keep people engaged and entertain them you're going to see more games per second there's a more interactivity per square inch on your screen right they're going to start jamming it in there we're just not used to that kind of aesthetic up until uh you know the last few years so so maybe that's it you know like maybe the pressure of marketing is is is looking for you know a higher density of gameplay again like specifically for this idle RPG genre right like it it is a genre that depends on targeted advertising so and then but when you cannot target the people anymore uh with no ID f8 then then yeah you have to kind of like pull New Tricks out of your hat and this is uh this is definitely one we spent quite a bit of time talking about so it's working right yeah yeah it is exactly

yeah I just want to shout out my love but this is why I love doing mobile Game Dev because I find that sometimes in console and PC it's a bit like the Transformers you have these building blocks and you put them all together but you already know the building blocks on what's going to look like at the end and with mobile it's more I don't know The Powerpuff Girls have you know sugar spice and everything nice and you put in a little cauldron and you just mix it and you see what comes out of it and I think X hero is the Powerpuff Girls yes you get saved the doggo in and I don't have reaching I know we uh we've gone I had my counters um I don't know if we have time to go through them but it seems like X hero has actually existed as a game for quite a long time um since 2020 or something yeah with the glacier but I couldn't find much about Glacier Inc and that's just a publishing unit of uh um this Bing Chun company

oh okay I clarifies it and then the revenue per download seems unusually high in certain countries with strange Behavior to skyrocketing yeah that that part I mean if you actually compared to like other Market leading idle RPGs it's not really that high like I said like versus AFK Arena it's like half of AFK Arena or or like one third of it and um the weirdness in the RPD graphs is basically happening because of um the massive scaling that's happening right now and we'll just see like monkey RPD graphs because it's all these low quality downloads coming in and you know not really monetizing so but what what was interesting on the RPD craft though is uh even though um like in these countries like us or Canada or even Indonesia um Indonesia yeah yeah back in like 2020 or 2021 um they have been able to like

um get some Revenue scale with whatever like monetization and progression systems that they have in the game and that was probably also the time of the game that did not have the whole like save the doggo you know thing happening so um there is definitely um there's definitely a kernel of a good design in the game I have to say like you know when I was playing the idol RPG experience I mean the visuals are great the I think the progression systems are really good of course they've taken huge inspiration from AFK Arena but even executing on um you know quote-unquote trip off is is hard work so um you know it so all of that was like really really great but um but yeah just this whole like save the dogger thing has been creating like so much of murmurs across the industry so it had to be like you know addressed but yeah so the the last thing I want to add there

is that um for all intensive purposes it's not that crazy of a strategy like we've seen other teams try this like even AFK Arena you know has been adding like mini games to you know try to engage because because you ultimately have like these uh RPG mid-core games on mobile that move kind of like towards like this spectrum of like you don't need to do anything in the moment to moment you can play It's All About The Meta and maximizing like the metam focusing on the meta and you don't need to think about the moment-to-moment gameplay to even like the place where it's like it can autoplay itself right um so kind of adding back in some like engagement that kind of like ways of engaging with the game I think it is something that we're seeing more and more now and that if K you know try to throw random mini games um as well and like even just talking about like a completely different um genre with a Township like that's been their uh limited time event

strategy for like the longest time like the live up strategy like they have these mini games uh and they're like super simple like hyper casual mini games and they you know they play around with it a ton I think what's interesting is that they found like this this very like memeable minigame and they threw it at the very top of you know the the experience like ver like when you go into the game and I think like that's for me like that's like the combo of like why we're talking about it is they found a memeable moment and they threw it at the very beginning of the game which um for me like that's the biggest like potentially like Innovation that that this team kind of threw into the game to see if if you know they could scale um if they could retain I don't know it's it's interesting for sure yeah and even earlier with in terms of the creative ad memes meme culture is strong

especially if you're doing ads uh for example on Tick Tock or you know other I can see it working perfectly for those platforms yeah I believe that YouTube YouTube is um one of their top channels at the moment um so yeah definitely optimize for like video consumption um but yeah just to maybe close out the discussion but um yeah I think you're absolutely right that you know Tammy that it's um they're putting it in the tutorial is really the the uh the big change versus you know how player X has kind of used this in the past or Township or even like games like uh I think it was called Mighty party and things but um but yeah the reason they did at least my belief is why they put it in the tutorial is because it's connected to the ad you know and then the ad has to deliver that experience uh to this

broad funnel of players coming in therefore game designer then incentivized to you know uh to not like her detention their incentivized to keep that experience going and therefore it's like right at the top of the funnel um but but yeah I agree I think as more of the longer term Trend and the I think the key takeaway yeah we're probably going to see like a little bit more of this because uh across like genres I guess um I don't I just don't know for how long really but I think we'll definitely see it going into next year um because yeah it's clearly a way to you know reduce cpis and scale rapidly so and Tammy I don't know how much your topic overlaps with this one it it definitely ties in uh because it kind of flips flips the script right we're we're talking about a uh pretty like meta heavy game that added like these hyper casual elements um and the topic I wanted to talk about

is is the flip side is uh casual games hyper casual games adding meta mechanics uh and it's basically like it's for the same purpose right you're trying to again like move like those levers in uh lowering your your cost of install and increasing your LTV so that you you know you end up winning um so you can jump right into it um the reason I was I was thinking about inside I've been thinking a lot about meta mechanics and progression in general and uh game analytics um wrote a couple blog like super simple blog posts about like hyper casual and that features um some of those like six things that you should success do to be a successful hyper casual game blah blah blah um so I thought it was a good good moment to do a little bit of a kind of recap on where we're at with with Hyper casual today

um you know hyper casual really has been very compelling for game developers because it reaches a broad audience so it has a broad target audience it is uh generally speaking like compared to a lot of these deeper games uh very quote unquote easy and and it's a quick to Market type of game in terms of production um so small teams can tackle it like both big teams and small teams can tackle hyper casual games and you know you have like these elements of of a lot of fun moment-to-moment gameplay very memeable very like lends itself for kind of like those video moments um but you know with we we all talk about this constantly but with the changes on the ad um ecosystem and Dynamics idfa like this whole post IDK world uh it is no longer easy to you know have a profitable game just with uh ad

Revenue uh and it hits hyper casual games on both ends of that equation because they were relying a lot of uh ad revenue and very low cpis so all things consider you know it makes sense how uh you know a few years ago teams started experimenting let's add more meta around um hyper casual games to increase our uh monetization in now with you know costs eventually being higher it's like okay let's double down into my IEP monetization because uh you know we need to maximize you know the value here um so I think it's it's good to revisit some predictions from uh menu actually from from 2019 uh these were published on deconstructive fund uh and correct me if I'm if I'm wrong manual here as I recap it but uh going into early 2019

um you know you were calling out that competition would get tougher just with more games in the space we were not quite at the place of like oh idea face gonna have it's like this choking effect uh but it was but you know competition was forcing teams to seek uh boosting their LTDs so that's when we started seeing teams uh and kind of what you summarize uh back then was like hyper casual organization is gonna go into this hybrid of rely on both ads and IP uh and they're gonna do this with like light meta layers where you know you have hyper casual meta systems uh with that that dive kind of like this deeper uh engagement and you know long-term or medium-term retention boost medium term retention and monetization uh and then at the end of like 2019 uh you're like let's double down here uh

and and you know we're already seeing this and it's just gonna you know continue to to evolve um and that's I think that's when you called it the uh hybrid casual space um probably probably too a little too early but yeah hey I I think it holds up right um so yeah just uh hyper casual to to recap what it means is you have you know hyper casual which is like a arcade core moment-to-moment gameplay uh the way I summarize it usually is easy to learn hard to master um and it requires skill uh and then a simplified meta um you know with some you know other elements that you can put into as like live ups and and social Etc and uh Arturo really kind of proved that formula really really well with you

know a roguelike very light game with uh a meta with progression and um you know really investing a little bit more in like how you're operating and thinking about that as a player uh and we're seeing games do this even more consistently now like in the same category as Archer we have Mr Auto fire Art of War Survivor dot IO um I think what's interesting is like even uh the um there was single City a game that just came out in the last couple of weeks it's not hyper casual but it's already like it's doing some of these combinations too of like it's a 4X meets The Sims which you're going to like super it's like it's not even light to meta like Forex is like deep um they're going on the deep end um so I guess to to start the conversation I wanted to ask first money

are you surprised um that your hybrid casual prediction from two three years ago uh has held up this well or you're like oh no I knew this was gonna happen no I think like the the two um so I got like all those past two three years I also got a lot of flack for that prediction uh and I think it's like a pet peeve of uh of Mika uh on the team and David also who would just keep poking me about oh you said hybrid casual is coming where is it um and uh I think like just looking back and reflecting on it probably two things I um two things I could have maybe like you know I missed one one is um of course like you know the whole idfe thing was very nebulous at that point and I think after idfa happened it probably accelerated the prediction quite a bit and that was not a factor it kind of included for in this whole thing

um but the other thing I also missed uh was where was the ceiling on the hyper casual market so for me I was like just taking this like super data driven approach and looking at you know okay how the hyper casual downloads are kind of moving but the one thing I forgot to and even though like you know the acceleration or the growth rate was slowing down what was what I missed and I don't know how I would even like you know uh do something like that is like where is the ceiling for the download so there was like a lot more ceiling left you know uh and Hyper casual continued to like flourish uh during that time and therefore the need to get into this hybrid casual thing was also slightly less um when we made the prediction then you know the market reaction was okay this is coming tomorrow that's it you know it's forget hyper casual hybrid casual

is in it's coming tomorrow but um but I think I think overall I would say like the prediction has I yeah it has aged well um probably even calling it hybrid casual now is um is maybe too like limiting to be honest because it's happening like across different genres this just like the broader genre mashing trend is occurring and uh where you know basically increasing accessibility of a game through simple gameplay uh to broaden the top of the funnel but then like attaching light or like pretty heavy meta systems and progression systems to it is just happening across the board so yeah I wouldn't even like you know um sometimes I even feel these days that we are probably calling it hybrid casual is even limiting but um but yeah overall I would say the fundamentals behind that Trend are definitely playing out now so

yeah I think it's just part of prototyping now unless you're very much into the weeds of the simple hyper casual games that rely on the pure ad system um but they'll have short lives it's just part of prototyping what's the meta what's the core gameplay The Meta provides the monetization opportunities how deep can you can you make it whilst having a compelling sticky core mechanic that keeps you wanting to come back for more so yeah yeah I don't know how you do it it's um it's you know I've in previous episodes of this podcast I mentioned already but it's so I'm not a creative right so for me to think through these problems I'm sitting here just taking notes it's it's fascinating because it seems so difficult to capture people's attention and keep it in this just ocean just teeming with things to do you know like how do you crystallize a model that isn't just cool right so that you attendant day close

your office and walk home sort of satisfied with the work you did but also pay rent you know like it's just like the stakes are incredible and it's a so I mean I guess the the round it out for me the smartest thing to say is that there was always this myth about digital that is going to democratize creativity and everybody could make a game and become a millionaire it's like that is absolutely not the case this stuff is really hard on if you have a zillion dollars then you could you know Market everybody out of business of course you can just own all of it uh you can buy assets you can uh you know can buy Billboards if you are doing these games that you're describing that that is that is such Alchemy like how do you actually make gold out of lead here you know like it's I have a lot of respect for it and also because it's incredibly complex and difficult so so it's a it's a fascinating topic for sure one of the reasons why I believe this happens a lot in Mobile is because the mobile Game Dev process allows for a lot more than other

platforms you can very quickly prototype something and go through all of these stages of quickly validating and play testing and doing marketing tests all of these things that you can I don't know what the word is but you need a very thin vertical slice that's low you know it's not perfect in terms of the theme of the art so all of that lean developments the quick prototyping that's at the heart of mobile I think it allows us you know the power-up of girls analogy where you're constantly mixing it's a recipe you mix different ingredients in different quantities and you try a lot of prototypes to find um something a good lead that could be successful to then invest further into and you have to do it nowadays yeah you definitely have to do it you definitely have to think about like what's how do you um innovate with um you know the the quick Cycles keeping

players attention but making sure that you know they stick for the long run uh the the counter that I would give on the on the Powerpuff um analogy is that uh a lot of teams that lose heart and soul uh and creativity when trying to do that mix and match of uh recipes and I think that you even see it with um kind of like these very hyper casual mechanics you know meta game uh meta layers uh on top of it you know some teams do really well with it some teams like some games just completely flop um and I think what ends up happening is that when you lose sight of what we're creating as game developers which is a fun experience you end up with um instead of trying to find the magic uh so back back to you back to the uh

Powerpuff Girls uh they're going to find the magic right like this magic that just like feels great um when you lose sight of that you you can end up with these um Franken games that tick all the boxes on what you should have on a game it's like something that is easy to learn and check uh an easy tutorial checks something that looks cool check uh progression system check and then it just doesn't like none of those things come together and you end up with you know scratching your head of like after months of development of like why did this not work out um so that that's a that's me on the counter that I or not only one of my my biggest counter in pet peeve with um how a lot of teams approach Game Dev on on mobile these days is they go through that checklist and lose sight of that what we're ultimately trying to really

deliver and build as game developers if it works though does it have to be magical and I can appreciate this the the the principles behind some mobile Game Dev Studios out there where it's about find the formula you're not you're designing a fun and air quotes to to make it work in terms of the the growth and the revenue potential I don't know how I'm going with it I think I think I think it also for me it's just like the way I would I would put that is it depends on your your goals yeah right exactly uh if you're a big company that has a UA machine that is like trying to min max kind of like this this small margin over every install sure thing like you need the formula you you can follow your formula you can and you're like going to iterate on your formula and maximize kind of like that that portion

um because you have the resources to do that but if you're you know just trying to have a game I would argue that if you're trying to build a game that has like very strong long-term retention or low retention it needs to start with like a good core and what a good core is you know can look many different ways and you could use inspiration from uh existing games and and mismatching it's it's not about like the mishmash but it's like uh you know make sure that it's like a cohesive experience yeah I I agree with that like not not all magic is equal but every and everyone kind of has their own magic you know so like basically if it works then you've found the magic so because what works for you is like a function of your goals so so you found your magic I guess over there but yeah talking about magic we are already going to overrun and we have a very

interesting topic we also need to to dive into which is super yoasts with the very fun topic name of I like big platforms and I cannot lie I was a placeholder was it oh no I stay alive you know it's um it's it's true though I uh I find that conversation the most interesting it seems inappropriately I just I just like sang sang it in my head so there's actually there's a I think that there's a Bible version of the original song that is I like big book and I cannot lie really it goes It goes on about like you know check out the big book of that whatever it's like link immediately so so now that I've said sort of the uh the the uh the uh you know entry point of intelligence of what I'm going to say

next you know I guess I um so they're just two minute intro to all this is the following so the Iceberg the tip of the iceberg that is really the Microsoft Activision acquisition is exactly that right there's so much more that is going on in terms of who owns what in the games industry and should we be integrating and acquiring and aqua hiring and doing all this stuff I am you know this week alone there was Netflix buying a studio in Finland I believe uh you know former Digital Chocolate people like very smart very accomplished uh that is their third or fourth uh project and they're trying to build something so here's a big tech company trying to wade into the games industry increasingly feel it feels more legitimate to be honest but the way Netflix is going about it I haven't really produced anything outstanding yet but they're working on it and so the sort of larger currents that are washing of the games

industry are you know not just internal it's not just platforms buying Publishers there's also all these other non-endemics kind of pushing their way and and it is a very different world than we saw like 10 years ago so the background for me personally is that I studied media ownership trends for I don't know way too long uh some business school which is a lot of fun I was sort of the data uh project manager we tracked 100 different media Industries for a period of 20 years who owns Watts we did you do all this like big things like Disney owns all of these things and News courthouse all of those things these sort of big infographics so that was a lot of fun and so my interest with games is of course to kind of continue that tradition because games are now meaningful um you know and it's interesting to see how the FTC and a lot of regulators around the world are responding to this proposition of buying Activision um journalists games journalists trade

journalists they are also very outspoken about it because it seems to be across the board that people feel that it's bad and you know I don't think that it's necessarily is but there is of course some worrying stuff on the horizon uh first and foremost the fact that uh to a Growing Degree Publishers but also some of the platforms are trying to increase their prices right so if you think about consolidation in the industry that's bad for creativity that's bad for consumers and it's bad for consumers because they're going to raise prices on stuff that used to be cheaper um Sony is one of them uh you know for all of its uh screaming and hollering at Microsoft about giving those attack inadequate levels of concessions being made around Call of Duty they are one of the companies that are raising their prices for their new producers some of them are discounted currently but you know after state of play two three weeks ago you know most of the titles are priced at 70 bucks which and that's a side step that I'm

not going to get into but of course it has a lot to do with inflation with of course Town Crunch and so on so the cost of AAA development has gone up and they see themselves justified in raising their prices cool I get that um but that doesn't really Ward all this excitement and all this sort of negative attention on the on consolidation right it seems that there would be some degree of clumping of companies purely because the industry is growing so much and so the work that I did on this is sort of a continuation of the work that I've been doing really 20 years but if you look at the ownership Trends in the last decade to make things easy you know there's this transition of power between the platforms and the Publishers and by platforms I really mean the apples and Googles but also the Nintendos of the world you know how they make money so the Legacy platforms they make money in three ways they they sell

Hardware they sell the boxes are obviously they sell their own games the first party publishing and third-party publishing and if you remove or if you sort of allocate that appropriately it's clear to see that Microsoft will be one of the big winners in all this because it does really well right there it's moved into Services it's really been very beneficial financially and so it's just claiming market share right and it's a company that historically has been relying for 80 of Revenue on third parties and it's moving more towards its own so it's a for the acquisition of Activision is is really strengthening its own uh business model so if you add that all up you see a transition from really what I believe to be uh you know a uh if you express it in Market power a market share really it's a relatively simple graph but the the platforms about a decade ago they control 39 of Revenue and they're up uh at 57 last year

so you know you see basically the line go up at the expense of the Publishers right so the but the Pure Play Publishers out there they are getting less they have less Revenue which is of course an additional reason for them to then start acquiring other firms right for this reason EA bought codemasters and glue mobile this is why I take two but Zynga and they're all trying to get a bigger piece of the pie and I think that that's a very interesting thing right so the shift in power between away from the Publishers towards the platforms is encouraging them to uh you know just to bolster their own to strengthen themselves and expand their position so that's one piece the um the extra genius in a fancy word like it's not the market circumstance that that speaks to this is the fact that you know a decade ago you'd have 17 companies that made a billion or more

and that number has since then gone up to 52 so it's not as if there's all these small little fries getting thrown around by three or four big platforms we have a substantially larger number of very capable very well capitalized firms making games uh you know what's different of course is that they are not all from the same markets that they used to be uh you know 10 cent being the best example netease is another one these are very very wealthy companies that you start to really impact the world around them not just of course taking all the raisins out of the porch in China but you know what was it that easy acquired Quantic dream in France they uh tencent has been building Studio at AAA studios in North America so you see this massive globalization or at a scale that we've never had before and that all of this kind of goes towards the notion that yes it's true that Microsoft is spending 70 billion dollars on the

largest North American game publisher at the same time the world around us has changed dramatically right and I feel so often that has that kind of goes missing in the conversation if the industry had stayed the same if the dynamic had stayed the same if the size had stayed the same then absolutely this would be terrible but uh you know this this consolidation would reduce consumer Choice it would inevitably increase prices and it would also be very difficult uh for Publishers to negotiate good deals for themselves right as the platforms rely less and less on third-party software so so that background kind of goes missing from all these conversations uh you know and it's a interesting thing then to kind of close some of this uh this number Wing out for you you know if you on a global scale look at the market share increase for Microsoft post acquisition of Activision it's it's global market share goes from like 12 to 15 percent so so so the even then after all of that

uh you know it's that's not really a a threatening or dominating market share in a market that's 220 billion dollars a year so that's kind of where I sit right it's the um consolidation it's gotten a lot of attention for people you know there's a lot of headlines particularly around companies like embracer which are putting themselves into debt to to get bigger and buff at the same time you know the world around it has changed too you know contextually it's it's actually not that big of a deal and it's interesting to see how there's this disconnect between what the economics say and how the conversation takes place online in media and so on just to just to be sure um of your point over here you're basically trying to say that um um yep one don't get too carried away by the consolidation headlines because um what's actually happening is even though like these Mega Acquisitions are happening there is still a very thick long tail of uh game Publishers

and your game Publishers popping up in newer regions of the world where they could still like create content that can compete with some of these big players is is that is that like yeah so the the way that I that's yes and the way that I've been phrasing it on my end has been you know yes consolidation is taking place but the industry at the same time is growing at such a rapid Pace or has been at least the last 10 years but that offsets a lot of the dangers traditionally associated with consolidation right it's just like the pie just got so much larger that it's just even these Mega mergers they become smaller contextually yeah one so I've I've I read your article and I really did find the um the publisher versus platform you know the Crossing Lines graph quite interesting um the one question I did have though like to kind of look at consolidation

less from um less from a revenue lens but more from a distribution lens because that would the consolidation is still happening at the distribution level right like either it being through consoles or through like you know the smartphones platforms that's basically controlled by two companies so even if there is a very thick long tail of you know Publishers across the world that can create you know massively successful games um it all kind of funnels back up to distributions still being controlled and and then you have you know then you have Microsoft doing like an Activision Blizzard acquisition which guarantees some of the best content in the world available on that platform and just driving the you know distribution side of the consolidation or just choking that even more and that I don't know if like yeah tell me

if that thinking makes sense but for me that would be maybe one cause of Hari for the consolidation side of it it's it's it's fair as you point out that consolidation takes place on the distribution level but you know if I you know so I look at these numbers right and and the thing is I'm not an economist and in general I'm not very smart but I I can count and that's kind of how I intuitively look at this and if you add up so there's two data points that come to mind uh the simplest one is 20 years ago we had three platforms that dominate everything right of course the console makers um since then we've accumulated uh kind of depending on your slice it but nine or ten of them right and I'm talking of course valve which in the early 2000s came about and then of course epic going after the epic game store more recently uh mobile but also 10 cent even netease would go to that bin for me and so the

the number of outlets the number of Distributors within your terms is growing as well right it's if that number had state three then absolutely then you have a situation like the music industry where only three labels own all of the IP and music rights if that was the film industry that's there's only a handful of companies that own most of everything if not production then you know distribution and exhibition so so that's one the the second piece of it is if you look at the market share for the largest 10 companies year over year over the last I don't know 25 years even you know 10 companies 20 25 years ago would own almost 100 of the markets right and that that squiggly lion has gradually dwindled down to about 50 to 60 percent so on a the kind of depending on the timeline that you take you know if 10 if the top 10 companies over time own less of the industry

you know they have individually of course all become much much larger but so is everything else and so so from a so while it's true that on the distribution level there's a lot going on at the same time I believe that you know the the macro or the uh the circumstantial uh increases in the industry and the change of the market structure that that's kind of offsetting a lot of this consolidation anxiety what I was going to add there is just from hearing kind of like both both sides of like the the consolidation and and um distribution and revenue I think I would the the way I think about it is what we're seeing is this tension between audience and content in these kind of big companies trying to to you know release some of that tension as much as they possibly can by owning the content uh but also understanding you know I I

am also mindset of like content is King but of course you need to at least have some some seedlings of you know where are you going to put that content to reach an audience right so it's it is very much an attention where you know they're trying to acquire really good content because they have an audience but they know that the audience because of switching for that audience to a different platform or to be multi-platform has gone so low compared to you know maybe 30 years ago where you know you need to keep up with that demand of having really really good content so even though there's consolidation at the distribution and on audience side it in part is also because um it you know part of why they're acquiring like these these first party developers and and Publishers is because they need to keep up because a player can turn around and play on multiple platforms uh a player can turn around

and you know there's games on the PS no longer you know it's no longer worth my money let me just switch like just cut off the the console like I'll go off console uh or go to that like you don't have kind of like that deeply rooted in the high cost of switching even platforms that we I feel like we had before um so I think part of what we're seeing with that consolidation is kind of the tension is is changing a little bit between like that I didn't that dynamic between where the audience is uh and the content providers like who who's making the content yeah you're absolutely right it's um you know cross-platform play as has basically made it much harder for conventional Legacy platform holders to keep everybody in their little like Meadow and the Sheep never leave right it's uh that's where you stay um now and Sony was the last one to give

out and give into this with fortnite now anybody can play on anything which you know if I don't get paid by Microsoft but I do believe that their marketing message has been like yeah we're not trying to exclude anybody in fact In fairness they are always you know a bridesmaid never the bride in the console space right they're always the number two and they end up basically cutting out 100 million PlayStation players if they try to keep Call of Duty to themselves and if so it would go counter to the trend in the market towards Crossbay and it would go counter to their own interest to become like whatever everybody's a gamer blah blah so you're right and like how do you then keep them interested and the answers of course IP right it's um having something of value that ultimately you can license out or maybe you can window it where you know Call of Duty first comes out on the Xbox and then but it's that's the full package deal and all the updates come for free whereas in PlayStation

they make you buy it separately or something I don't know they'll put in some hurdle but to your point it's like you know where the audience is I think well is a much different conversation now than it was even a decade ago absolutely and just to say that I think being a bridesmaid is way more fun than being the bride because you get all the fun of the none of the lifetime commitment um yeah and I couldn't agree more and before even with the cross-platform we saw cross-platform play but not really like cross-platform purchases but now with OverWatch too you can consolidate your purchases so that cross-platform experience is becoming even more user friendly not only in terms of how you play but also how you purchase and I think it'll just continue deepening further and I believe game just publishing in general has changed you know I came I haven't been in the industry for years I'm still quite recent to it and when I first joined the traditional publishing view was usually you know you had someone to do your

localization to do your QA to have Biz Dev with the platforms to get you good opportunities to do the uas do your marketing and so essentially you Outsource to another company the things are not what makes you unique as the Game Dev Studio which is you know making a great game and I think that those lines are just becoming even more blurred mobile blurs that even more because it becomes easier to do when compared to games that have hours and hours and hours of deep content um to play through so that I think that also what does it mean to be a publisher nowadays do you become more of a specialized publisher that's that's a really good question so the so the thing about being a publisher I mean so there's if you take the music Industries metaphors like you have and this take two is sort of shaped out to take two interactive as a publisher but they retain different labels right in

the same way that a music publisher will have different categories of music to have country and then they rap and whatever else you know I think what you try to accommodate for the market is to have enough of each of the relevant market segments that you can you know have a Blockbuster in each of them the moment you start having this mediocrity uh sausage I don't know how to but the best food metaphor is here but you know you just start throwing anything so I mean I I was I'm still scratching my head on this Zynga acquisition but take two I love those guys I think super smart and they're they're literally just saying like let's take PC console camera and just add my mother playing Candy Crush on top of it like how does that make sense like how do you think you know in a tacky business term like what's the Synergy here and I see that you you know that that was a profitable businesses so maybe that's then their mobile label maybe that's the case I think they they just

you know they were a rap studio and they bought a country Division I don't know it's a you know maybe there's some some clunky way to make sense of that but what it means to be a publisher today I think is to have outstanding and like highly visible uh content and you know the mechanics and the economics in spite of digitization in spite of all this growth and now the fact that games is Front Road all the stuff you know there is a disproportional amount of money that is captured by Blockbusters that are you know the one thing in your portfolio that makes all the money versus managing for margins and that is you know 100 Years of media and entertainment industry he's like that never works like sometimes you get lucky but most of those companies that like play it safe and they take this risk-averse approach they end up nowhere where you know that one artist that's breaking the mold and everything that's the one to do like that one sports team that has all the cool players they make most of the money all of the time it's so for a public what it means for a Publishers like you have to have incredibly successful IP that you just

have to front load I think you know my is there's a changing of the garden it's like I see Ubisoft declining love Ubisoft they make great gifts but they're not really doing that so well and then you see city project red in spite of everything and they're killing it man and then you see you see the TV show on Netflix coming out with the edge Runners it's like that's the kind of thingy that goes much further where you double down on that one project that really characterizes your whole shop and that everybody knows you for that makes it so much easier to find you across all those platforms you know to capture the attention that Tammy is mentioning you know so that's what I think it means to be a publisher nowadays but that's you know it takes a lot of stones to put all your money all your eggs in one basket and to really uh ignore sort of the the risk-averse financial policy that most of these you know mid-level managers will you know evangelize all the time a couple episodes ago we dived into the

recently announced Ubisoft strategy where they are partnering with Netflix and building down into their IP of Assassin's Creed so be curious to see how that plays out in the next few years we will have to wrap up the episode because we are way over we got into some really interesting discussions so it's good to continue on for longer than usual yeah I'm glad everyone had the extra time but yeah super interesting discussion yeah and uh you know we won't talk about Apple's rumor 30 cup of nft sales but we'll see maybe next week we can maybe maybe next week uh there'll be more in info on the on the rumor yeah yeah well um yeah just reaching out about the navic essay again if you are interested in participating can read navic socials to find out more and Tammy you've been petting your dog can you just show your dog's face this is this is YouTube

marketing clickbait right here this is the X hero save this stuff this is the thumbnail is that a picture uh no I used to have a pincher uh but this is Mr Harley he's been with us for six weeks he is 10 years old and he's a Jackson Chihuahua mix so Harley was that Mr Harley Mr Harley Harley so if you want to meet Mr Harley you know check out our YouTube video and join us join us on on Discord save the doggo thanks for joining everyone and we'll see you again next week foreign [Music]