MENA Region Growth / Supercell’s Dueling Betas / SEC Web3 Actions

foreign [Music] gaming podcast where it is our mission to explore the business and future of video games we bring together the industry's brightest Builders investors and thinkers to keep a full sun current events dissect emerging Trends and games share Lessons Learned and have a great time this podcast is also part of novik's growing ecosystem which ranges from free and premium research to Consulting and advisory services for more information visit www.navic.com now let's jump into the episode this episode is brought to you by Coda payments free to play game monetization can be a weary Endeavor for game developers especially for Publishers of multiple titles I'm here with Neil Davidson executive chairman of Coda payments Neil why should games teams look to code a payments to solve their payments needs last year the two major app stores collected more than 30

billion dollars in fees from mobile game developers Coda helps developers collect some of their revenues outside the app stores keeping more of the income they generate for themselves we offer a set of solutions that allow developers to collect payments on the web either on a website that they operate or on one that we do either way players can choose from a range of more than 300 payment methods in 64 territories we help some of the biggest mobile game developers in the world generate more net revenue and we'd love to help your listeners do the same awesome well thanks for sharing Neil and if you our listener want to see how Coda payments can help solve your monetization needs Head to codepayments.com or check out the details in the show notes and with that let's jump into the weekly Round Table hello everyone welcome to another novik Roundtable I'm your host Devin Becker and of course joined by great panelists as always on this time we've got Manu co-founder of novik who I'm sure you've seen plenty of times also

Tammy uh Levy Chief games officer still best title at captain.tv and we've got David k a president of snapshot games and angel investor always nice to have around guardian angel investor hopefully how are you guys doing today don't go yep doing great good good I'm ready ready to go yeah awesome awesome we've got we've got a lot of topics to cover today um a lot of like small things and maybe some big things that we'll dig into uh just a lot of stuff with uh just starting with some simple stuff around uh q1 earnings results uh for huge games some game growth in the Mana region uh and then into supercell with their kind of double Beta release they've gone out with uh EA interestingly doing nfts with Nike uh we've got some stuff with the SEC in web 3 that should be fun to dig into and then of course everyone's uh topic du jour lately apple and their apple Vision Pro headset so some fun stuff going on

there uh why don't we just uh dig right into what's going on with the q1 results for huge with many use games yep uh so yeah huge games with uh huge headlines essentially with these results so um I mean I I think I saw the article kind of floating around on Pocket Gamer and the headline basically was uh the highest uh the highest uh margin ever that they have seen so of course it got me a little bit curious too okay you know what the hell happened in that company because I've looked into a huge before and you know uh primarily uh casino slots portfolio and you know given today's uh uh today's uh idfa climate you know a casino slots portfolio returning the highest margins uh in their history got me curious so um but yeah basically I I think the story is like relatively simple

um I mean basically you know their revenues were down but the reason that the margin was so high was uh because they just cut back on a lot of UA spend so you know it just increased uh profitability at the end and so I mean yeah it was basically a headline but you know for uh for a portfolio that is kind of heavily dependent on you know Casino titles and such like I think backwards UA spend is uh is a pretty big like you know red flag in some ways um but yeah just to kind of maybe go over the numbers uh very quickly um their overall Revenue was down about 14.5 percent uh you know and this is in q1 so uh it landed up at about 50 51 million over there that was mostly driven by you know their core franchise revenues uh being down by eight percent and also the sun setting of one game called uh traffic puzzle uh which is altered in you know this 14.5 Revenue

drop um and yeah in terms of spending they you know they just cut down their UA spend quite significantly because I mean they were very transparent about you know the UA climate being quite hard and um and they're just trying to find their footing essentially like you know how do they um how do they do UA in this new world and they don't want to be you know uh throwing good money after bad in a way uh and you know just try to like take their time to figure it out at the end of the day it's still a pretty healthy company in terms of cash balance you know they're regularly uh you know quarter increasing their cash balance slowly so you know they have like that flexibility to experiment and you know take their time on the UA side of things um but yeah that was the whole cutting back of UA spend on a dropping Revenue uh um uh trajectory was you know kind of the key reason why the ebitda was so crazily uh up

um I guess um while thinking about this you know I've kind of like told this story multiple times across earnings I started to feel like like even play Tikka as like a similar story to some extent I mean not the records but you know aging portfolio cutting back on UA spam and a lot of other mobile like public mobile gaming companies are also like you know similar uh place and I I was just wondering like you know a question to you guys um everyone is like quite worried about you know the marketing uh environment right now and how they should like continue to do marketing into the future but I see less companies actually talking about how they should be maybe building like more focus on the product side how should we how should they be thinking about products actually in the future and the guys I mean until now you know most games have been just built with

you know that like everyone kind of knew that they had UA as a lever to juice and then most games would just be like you know copies of like other successful games with like plus one you know Innovations uh on those and like some more live upducing but it mostly then came down to UA strategy in terms of who's able to Target better who's able to apply the fake ads uh strategies better you know and uh you know essentially kind of get their users like that but when when that growth fever has gone um I guess the question is like should people also more Studios be talking about how to build their games uh differently and um yeah all right I could push back a little on on this um we're not pushed back exactly but offer some color perhaps because I think it's quite easy to

there's a lot of companies pushing a sort of a narrative of uh you know the UA environment is impossible and blah and so on so on but I I know a number of Founders um who are actually having a lot of success in the current user acquisition environment and I think like one of the fun things about the games in this is not unique to the games industry but one of the nice things about this this ecosystem is as soon as like something becomes uh kind of part of the received wisdom right that that actually has it can start to create opportunity for people who um for people who who sort of take the opposite attack because I mean I mean UA particularly right okay if all these big companies are switching off UA what what impact is that going to have well it's going to reduce demand and it's going to create pockets of opportunity for other developers so like I know a couple of Developers particularly right now who are maybe

they're not the same scale but they are scaling very successfully um in their niches and maybe the fact that some of these larger companies that were previously able to throw you know huge amounts of money at things uh scaling back is uh is you know is actually creating that opportunity I mean is that due to the niches as well like obviously the the more competitive the particular genre things like that the particular audience that's obviously going to create high demand even with people scaling back right but situations where it's like hey this Niche is like relatively untapped or people weren't spending tons on UA in this particular genre I mean do you think that's some of it David or is it because you said you've seen others successfully scaling is that in in very competitive genres or is that just like them being the ones the ones I'm thinking of without talking without naming names I mean one of the genres is it's word games the other one is in uh the puzzle category I suppose broadly I think I know the one you're talking about in the word games on LinkedIn

David sorry yeah no I actually want to bring light to another piece on the on the earnings um report here is I I do agree with with David in that um there's kind of like a very polarizing piece right now in terms of user acquisition of hey it's really hard versus hey let's figure this out and find the the pockets of of opportunity and you kind of start seeing a little bit of huge games teasing the hey we want to find the new opportunity but with new games which I found a little bit like I found interesting how they were positioning it uh thinking about multiplayer multi-platform and they tease this piece of uh building pods for Prototype rapid prototyping and releasing games so kind of almost like

placing it uh in the supercell model and I think that they did that very intentionally so that they can kill games and don't don't you know get any frowns and the first kind of the first piece of it seemed you know interesting to me and I was intrigued by by what they were talking about in terms of trying just to understand kind of a different Market it does move them completely into a different Niche from what they've done because they've found success in Social Casino so you know there's also kind of this question that you know a lot of teams in game studios there's there's one side of like conventional wisdom of stick to what you know and refine what you know and they're kind of going against that and then there's the other piece of Hey try to diversify and that that's what they're they're trying to do here um but what I found

interesting as well is like that seemed like very focused but what found I found kind of weird was that they had this piece where they threw all the keywords at their earnings uh Report with uh building AI across like leveraging AI across organization uh exploring m e in in Partnerships um new business models with web3 space uh so it it felt like very focused and then right after that completely out of focus uh and I think that speaks to a little bit of it's some teams are are struggling to find that focus and where to find that opportunity in today's market yeah I mean just one record I I think like huge game should it's probably like a really good acquisition Target at this point uh it

really feels like in the same um bucket as as a rodeo uh right now but um but I'm just kind of going back to my point about you know this um you know like should should maybe companies think about uh products differently I agree with what you said David that you know yes there are like Pockets kind of create pockets of opportunity created when you know the bigger companies are not in the race anymore in a way but it's also you know that also feels like you know maybe there's some other short-term Pockets that yes if you can exploit it okay great but like more long term like what's the what's the approach over here and you know like huge games taking their example again but they mentioned like one of the strategies that they're applying is you know uh instead of focusing on the more performance marketing strategy going more in the brand marketing route but I mean like creating creating brands from a established portfolio and from games

that were built with keeping UA in mind is a very very like it's a hard Hill to climb with sometimes I mean mostly probably almost impossible um then you know I mean they could maybe like go the personalization route and I'm just going through like some inorganic growth methods they could go the personalization route in terms of you know personalizing the game experience itself but that's also expensive to build they can go with the exploiting SK ad Network route but you know um that's uh it's kind of proven to be a slightly low Roi space and I mean the whole point of a scare network is not to kind of allow the only available to exist uh or they can even go like the cheap tricks out but that's all like you know the fake ads and whatnot but that's like all short-term strategies so it really feels like um the pressure is on like the more organic growth side of things you know for for uh for mobiles videos which would be you know first of all like creating a fun game experience or creating you know

uh going back to you know the more 2010 2013 wisdom of you know viral loops and such uh doing the Facebook uh era um and I was really thinking about like you know um I think it was supercell's uh CEO who said in his blog post that um innovation in uh you know innovation in game design is probably going to be one of the biggest problems that you know uh the free to play Space will see going into the next 10 years and um maybe set it for different reasons but like when I try to think about this problem from that angle it really started to ring true even for me because like I I don't know if like games can continue to just like copy each other and you know then I mean they can't apply to UA tactics anymore that they had and like plus one iterations is no more enough you know and um even the word game the word game Studio that if it is referring to I mean the game it is a drop of innovation in

the word game Space which maybe is contributing to their scaling abilities uh at that point so news flash like it really helps if you can make good creative games that bring something different to the table Yeah like this is only this is only news in like mobile like this this is not something you know hop over to steam there's like a thousand games with like novel mechanics and interest doing interesting stuff like get released every day almost and uh so yeah I mean God forbid we have to do something a little different create something new to be fair valve actually puts a lot of effort into discoverability whereas Apple could seem to care less and and they actually you're absolutely right pay for their advertising right so I I feel like there's also like one of the things we're not really kind of touching on a lot is just kind of the the other environmental stuff going on that isn't directly with it in terms of like both

like Easy Money drying up meaning like it's it's less smart now margin wise and what you know who's just saying in terms of just throwing money at the problem and said now as David's saying you you actually I don't know maybe you have to think about making a good game or making your creatives better or whatever it is to make it so that it's more worth your money rather than just being like that's easy money let's just let's just hit the scale lever and going over plus we've got the backlash from covid going back the other way right yeah you're you're absolutely right it's a fair point the environment and the incentives are going to dictate the behavior of everyone in the market and mobile the story of mobile for the last you know decade plus has been just massive massive user growth and so you're gonna take the most the most efficient route to that which is okay we don't need to innovate that much because there are all these Tailwinds and uh and there's an environment where we can sort of scale quite effectively and the whole thing works really really well um and you're right also a big difference between Steam and the app store is that steam does a relatively

good job of pushing discoverability even for newer developers whereas Apple has basically taken a hatchet to both the paid and organic Discovery in their ecosystem and uh that's why a lot of people are having a hard time well hopefully this this all just results in pressure to make better stuff right like let's let's hope this is actually a great thing for the industry just our copying games from uh Steam on mobile yeah you know we will see that Trend right we saw we did see a trend the other way for a while too where I think I saw a lot of games trying to come over from Mobile to steam like trying to do the opposite right like trying to apply that and obviously that audience tends to reject a lot of that uh so I don't know actually I actually think I mean like just this is like super speculation but I actually think happy is doing bad strategy just looking at uh so the guys behind our gero uh I mean just looking at like Innovative mechanics on the steam side and then

creating uh mobile free-to-play versions of it on the mobile side it happened with archero like based on Binding of Isaac it happened with saliva.io based on vampire survivors and I think like one of the more recent games is also a copy of some speed like some steam hip so it's nothing wrong that if it you know it's just helping Crush genres or I mean across platforms yeah and I wouldn't have fold them I wouldn't necessarily fold them yeah for doing that because so there's there's there's also so there's also um like I I do take it I do I mean this has been going on for like more that's the entire history of the App Store like there's a lot of very high profile cases of this going on you know 2048 was a big one um yeah yeah there was also what was that game that ripped off spry Fox's game you know right there I think it was from like six waves or something like that they copied that yeah I mean

yeah yeah Triple Town the Kindle game of all things actually yeah nobody nobody gets credited to I think spray Fox for kind of writing that merge mechanics so yeah yeah they were yeah about pushing new genres and then getting ripped off and doing so yeah oh yeah no I was just gonna say it's like I I don't fold them for that and uh I think that there's it's actually two very different I feel like two very different skills that some teams have both skills but not every team has both skills of finding a fun uh gameplay like moment to moment core gameplay mechanic that can really engage players uh building a meta game on top of it that can monetize like those twos like not every team has both and that's where we see kind of these these examples of a team can innovate on

a super fun interesting mechanic but they don't find kind of like this huge success then another team grabs that mechanic puts a loop on top of it uh of course they do they do it with quality and whatnot but um they get that out there and it does much better than the original game without even like innovating on the mechanics yeah that's that's the marketing engine at work right that's you don't have to out innovate you just have to like do your research and out compete on the marketing level but at least you know hey the if the pressure is on for for doing a better job with with UA then you know all the better for them to actually have to put a little more effort into it I would think right like it's just a more competitive industry but not a dead one right like in terms of you could as David points out you could still acquire users you just have to put more effort into it and stop just relying on like the kind of easy approach uh so yeah like I said maybe this will be good for the industry as a whole I hope I think so I should look at the bright side of it here yeah I I'm like really like more

optimistic than pessimistic but uh but yeah I mean creating fun game Concepts is I mean it is the hardest thing to do so uh but yeah that's fine we'll have ai do it for us right we'll just have it start prototyping games just in the background constantly and then it'll have to have ai testing the games for you too as well to let you know you're good probably yeah I blame it also yeah spending everything exactly but uh speaking of a region that is actually growing uh and not necessarily struggling with user acquisition the same way is uh the The Meta region uh of course the Middle East and I believe what North Africa is what the end stands for yep yeah yeah so yeah uh there was a uh report from the Dubai multi commodity Center released uh kind of just talking about where the regions add in terms of the consumer side and the gaming like consumer side and gamer side uh because we've talked a lot about and we've kind

of been keeping an eye on the the development side just you know with scoby getting scoped up by Savvy games which is in the region in Dubai uh but yeah so looking at the consumer side they forecasted uh the region reaching six billion dollars by 202 uh seven and uh this really is focused on you know the big share of it is focused on three countries uh Saudi Arabia being a huge one the United Arab airmitz Emirates and uh Egypt um and also in terms of of Gamers and just you know the consumer side growth not only the revenue growth uh they've forecasted somewhere around 85 million players gamers in 2025. uh so the number itself 6 billion it's a big number but it's when you look at the global gaming industry it's you know not

that impressive but what it is impressive is the rate of growth which is kind of forecasted a double from 2021 and that's especially compared with the global growth uh forecasted so whether this you know exact numbers and data forecasted is is accurate I I didn't get a chance to dig into specifically you know the data sources for how they're they're focusing this but I do think it is worth keeping an eye on this growth because especially and specifically Saudi Arabia has kind of like this big strategy they're calling it Vision 2030 to diversify outside of oil as kind of their their thing uh and in general they just want you know a bigger piece of everything and that includes gaming so they want a bigger piece of the gaming pie they want to become a global gaming Hub and this

comes from both the consumer side and the development side um and I think that if anyone can wield this into existence you know when when there's countries or or you know strategies like these uh publish or or released there's skepticism around you know can you can you actually make it happen uh because you have to have to have a coherent strategy uh the benefit that that Saudi Arabia has is that they have tons of money they have like you know Deep Pockets to invest in building game studios creating local content and also betting big on kind of all fronts from you know Esports festivals like all all the things so I think that that's that's kind of very interesting and I think the what really caught my attention as I was kind of reading through a lot of the

things that are happening uh I think what exemplifies this you know approach of hitting it from all angles is the event that they're putting up in June um called the Dubai Esports and game Festival where they're calling it a gaming Extravaganza and they're really going all out like it really is an extravaganza they have Esports tournaments they have a game Expo very much in the vein of um packs they have Pocket Gamer coming over and you know organizing their game Expo Summit they have a festival called play Beyond very much in the vein of dreamhack and even uh other events like Minecraft educational challenge for um you know I think it's like middle schoolers uh so competition so they're hitting all age all age groups all

angles developers consumers Esports uh players fans like it's just everything um so it's it's a very interesting you know strategy they're just throwing and going after everything uh but of course you know they're like I want everything let me throw money yeah okay [Laughter] uh yeah oh no we all wish we had like the pockets like that right uh that would solve the acquisition problems that we're talking about um but yeah I think what's interesting too is every you know every announcement that they make has met is met with skepticism especially you know given Saudi Arabia's track record when it comes to human rights in general um so it'll be it'll be interesting to see how you know it evolves over over time but I don't know if you guys have had a chance to you know follow a lot of

of movement there and you know whether it's from like developer side or or the consumer side and have any additional thoughts on on what's happening in the region yeah I think in like a previous podcast I covered the Savvy gaming uh Savvy games group uh because um yeah it was like the new name on the scene and you know uh and they came with so much of money and everything and of course it like up a lot of years um and I think during that time um during that podcast I also just kind of broke down okay you know there's this uh the public investment fund that's behind this entire initiative which you know connects back to the Crown Prince and all the oil money and things like that um and I think they're like the amount of money that they have I think the stat I shared in that podcast uh just remembering but I think it was like it was equivalent to like 10 or 15 a16zs or something like that it's like really really a lot of money that you know they are um uh that they have to invest in

specifically uh in games um but yeah I also don't know like how much I would like trust that you know that that report like if it was from some Dubai Association because I mean basically you know by peddling their own agenda a little bit but yeah exactly why is there um but I mean I mean yeah I mean you know and I mean the whole Esports stuff I mean they're basically isn't isn't ESL now ESL in the whole thing yeah someone face it we're both getting bought by that yeah yeah yeah so yeah they have facelift they have ESL and ESL had merged with um dream hack so basically like all the big names yeah yeah so I'm putting that whole acquisition to use I guess with this Esports Extravaganza um but but yeah I mean I guess the thing that like maybe just uh I don't know the thing I'm like just skeptical about is

just the you know potential size of this Market more from a consumer standpoint because it's not like the games did not exist for this Market before right from a mobile standpoint and all those games didn't exist there were enough for spending opportunities for it and such so I mean um I mean unless they're like paying people to I think in some countries there were these during covert some countries gave out these uh the checks right for for the spending so now they have like some gaming checks coming out from that region but um but yeah unless like the I don't know like if the games existed before no one was really spending at that point so from a consumer uh spending standpoint like what's what's really changed I mean

I guess like some of the some of you know building the gaming culture I guess is you know maybe what they're trying to do with all this spending and maybe over the long term it really changes the trajectory of the market but it feels like a very slow moving you know growth grind kind of a thing well I have a question around that then for you guys in terms of is there something that they're unlocking here as well like I mean we're talking about the money side of things but was there some environmental thing that they were able to take advantage of like pent-up demand or like more games starting to have servers in that region for example or more developers like for example I know it's not part of Mena like except for tangentially but like I've seen you know it seems like a lot more developers in Turkey uh like is there other factors that that maybe are being unlocked by this as opposed to just buying growth from from you know from what I can tell um I think it I would

take a bet that it's more on what uh Manus is touching on which is creating a gaming culture that didn't exist before so not necessarily uh unlocking you know it kind of is unlocking the the the gaming like the consumer Space by creating and bringing awareness about like gaming gaming as an industry I mean you see them doing that with sports with you know all sorts of of um cultural entertainment basically so I think that it's it's probably more of uh almost kind of spotlighting to you know their consumers where to spend their money in in a way and like where should they be kind of focusing uh but yeah I think I think what's going to be more interesting I don't know that there's a lot of growth there uh from the consumer side outside

of you know kind of just reaching their full potential what will be interesting to me is definitely the the um developer side like they're trying to really bring in that revenue and grow that revenue and and own you know part of the of gaming and the global market and I think that that that will definitely shape uh you know the industry in some way because they already have hands in so many big companies like they've they've invested in Nintendo in EA in take two like they're they're going at it well good well hopefully that it leads to Innovation and not just spending that on easy money user acquisition right so we don't end up with just a repeat of the typical mobile industry but uh in terms of growth in regions and things like that and kind of spreading out uh supercell and they're they're sort of dual beta strategy that

they've been going with recently has been interesting uh yeah so um I don't know if you guys had a chance to play supercell's latest betas so uh kind of just as a opener here um they have uh three games in testing Clash mini that is live in uh their regular kind of self-launch markets but additional to that they have two games that they're opening on limited betas one being Squad Busters and the other one being flood rush so a brief kind of what these games are about um just so we can we can talk a lot about them a little bit more but they're both what's very interesting is that they're both uh very similar in terms of you know the type of game of those genre the mechanics like what they would be uh going after they're both uh in this battle royale space uh kind of

simplified Battle Royale where you know we're playing async PvP with a bunch of players in the same Arena or world uh you're you know navigating this this world finding whether uh enemies or other players to battle or uh you know chests and rewards to build your party doing the match to uh reach a final stage so kind of they both follow that that General Arc um and they launched you know back to back they did a week of closed beta for Squad Busters and the data that finish the next day they got a flood rush out the door as well um what's interesting to me is that uh yeah they're back to back uh but it kind of brags my brain a little

bit uh because you could say hey they're trying to compare you know compare put put them next to each other compare how they perform and kill one because it's super fast I came to the same thought like I gave the same conclusion when I actually come I thought they were more like kind of casualized the mobile space more than the Battle Royale but uh but yeah yeah you go I can I can come back to that later yeah yeah I'll just I'll just say like what's puzzling about about this whole thing to me is that um it feels intentional but then when you start thinking about it it feels less intentional in some ways uh because if you were going to put them uh against each other you would effectively need to have similar conditions so you would need to uh you know Squad Busters is a closed beta flood rush they did an open you know you can just go and during that time frame foreign

for squadbusters you had to get in the the allow list for the closed beta um they did completely different regions for both games so Squad Busters they went with Canada Mexico and Spain uh with flood rush they went with Australia New Zealand Singapore and I think UK so those we know that those regions all behave very different um and you know even kind of going into a little bit more kind of Nitty Gritty points Squad Busters is in their second beta so it's a little bit it's been in development longer and it's more baked than flood rush so that's a part of that that was puzzling to me about kind of the situation that that we're seeing with uh supercell so yeah money you had thoughts about this this uh supercell strategy yeah I mean I I guess like for me the the comparative test was um I was more

thinking about it from the product side of it because it almost fell to me like um like flood Rush is yeah basically I mean it's slightly different in terms of squad Busters gameplay but pretty close I would say but it's basically like Squad Busters without all the supercell uh you know the the supercell IP characters in it and without the um the roguelike card mechanic in it and um and and then that's that's blood drive so like it it really sounds like it's simpler and and even like they go with like uh portrait versus landscape right so yeah uh flood Rush is Portrait so you could potentially like play single hand versus Squad Busters which is landscape like the one thing that added like gameplay depth or strategic depth 2 Squad Busters was the roguelike card mechanic and now you if you remove it

from the gameplay I mean I just didn't see the depth in you know flood Rush itself like I mean you you go in with like some random character and you know you have your three cards you collect your mana and then you use the three cards and it didn't really I watched like I didn't get to play myself but I just watched like multiple streamers play it and I really did not see any kind of strategic depth and if you like kind of compare it to the Strategic depth of gameplay and a clash Royale I mean it's nowhere close like nowhere close so I don't know like it started to feel to me like are they testing like is is it a test between products in some way or I don't know it this one also this did not feel like you know that super cell level game at the end of it but no it seemed like instead of an A B test it's like a a c e test versus a a d f

test like where they're just like we'll have one thing in common between these two things and then everything else will be different the launch tragedy the characters will be different like a lot of the gameplay different and then the IP will be completely different and opposite is testing everything at once right like let's test every aspect of this all the exact same time no control that's what happened essentially like new IP versus nothing that's like something that's entirely combined IP and it's like and then totally different launch strategies but it's like also different than the normal launch strategy of like the super long uh soft launch that I feel like they're games like Clash mini and stuff like that kind of get stuck in the almost soft launch hell so it almost just seems like this whole thing is them trying to like let's get out of the rut we're in and just try a couple crazy things at the same time and see what seems to work I mean it's or at least like what I know based on what has been shared at GDC talk so what

has been shared through articles which is the games need to go through internal like internal team approvals and then the game team also needs to like thumbs up it before it gets into any beta or soft launch like it's a little bit surprising to me that inter like like super salience are approving this stuff like how how is it getting out there you know I I don't know it's that this field they've murdered some so many games some of their children are just trying to escape at this point yeah they're just like let them through let them through no but yeah I I agree like it does feel like flood Rush uh and I was watching some some troops as well for for both uh it feels like super half-baked um which is you know it might it might be trying to test the strategy of testing something Half Baked um who who knows we'll see we'll find out soon enough because they will kill one or two games or three games they're

in testing right now I have to say someone I did actually play quite a bit of flood Rush rather than just kind of watching just because like I wanted to get the kind of experience well I I would agree on the depth issue like there definitely is lacking depth I do think it actually was decently engaging to play uh probably not to watch and like I would kind of push back that Clash Royale seems deep now but I would say like when it first came out it probably didn't have near that feeling of depth it felt like you just dropped guys they're like no no I mean that's that's my impression of it but uh like obviously like there there's there's a little bit of depth to flood rush in terms of counter play similar to clash uh rail in terms of like they actually tell you like they encourage you like at least on their website to like hold back on the Mana and like actually try and play some counter play but I will agree that like it is definitely not near the depth it needs to be yeah um but I do think there was I if you just watch I think it's a little underwhelming compared to trying it but I do think like obviously uh squadbusters is a

little harder to get access to so it could be a little harder to like test that one to compare it but uh yeah I don't know I I I don't know if it's either of these will live to be honest like at the end of the day right like because I don't know what do you guys uh bet in terms of uh how many how many kills and how many will stay alive out of those three is it like zero to three live uh live versus kill or uh or any other number I've played Clash mini quite a bit as well in the earlier stages of the of the soft launch and I think they've done a good job like improving it over time and it also lacked the depth because everything single one of these is like let's simplify and that creates depth problems but I do think that one has a good chance of living assuming they don't prematurely kill it especially after the stories came out about brawl stars in the way that almost got killed and Frank kind of saved it and that sort of thing so I think that one yeah the other two I don't know man like maybe maybe sacrifices to The Clash mini altar if uh

if they just need to okay so one one to two what about you Tammy I think one survives out of out of the three at most one one at most um and I would say I would go probably higher I don't I don't know um think Clash Mini I'm I'm with Devin on on this I think that it has it has a lot more to work with I feel in terms of also how supercell understands adding depth to games I'm going with zero to three like all three are gonna die like so also The Chopping Block I think so like I I don't know I just I just don't see it

happening but I mean yeah you get if there's a chance of something surviving maybe it is Bash money and you know give him the history with brawl stars and how they were able to turn that thing around maybe there's a path turnaround part for clash menu but I'm still leaning towards zero to three you're gonna go with all three David just to be the total contrarian here I mean I'll be honest I haven't played any of them uh but I have recently quit playing Clash Royale after seven years so I oh the one thing I will yeah um one thing I will say is I think this is a completely off time I don't know I I hate it to be honest I I'm not I'm not gonna speculate about stuff that other developers are doing it's just uh yeah just got to pick a number now at this point go with that uh no I honestly I just I I'm not I don't feel good talking about what other developers are doing

sorry no that's fair that's totally fair I just we'll have to we'll have to revisit this bet of course in like uh maybe a year to really find out because of how kind of a slow burn it seems like some other stuff is unless unless they really just change that strategy altogether and are gonna like try and kick one of these out the door rather than keeping a soft launch forever I mean I doubt that as you said the culture has changed that much or anything but uh still still fun to see right like that they're trying some new strategies uh for whatever reason they're doing that yeah and I do think that that I I do love the the supercell continued to like and their quality is is so good and they do try to like they do try to innovate on like whether it's by simplifying deeper games um and I think I they that is they have a focus back to back to what I was saying rights like Focus they have focus on on what they do last question on that then uh the like the kind of debate between them just

making something that combines all their IP versus doing something that's a new IP like any thoughts on that I love the idea of combining IP I think that there's there's teams that really have seen success with like leveraging that known IP it's really hard to get kind of attachment from uh you know players these days to new IP like just building kind of like that emotional attachment so I think it's it's a smart bet to combine combine their their IP uh because they they already have that that strong attachment and I I love that idea of of the the Multiverse is coming coming together um so I think that that's super smart too yeah I also think like you know being able to like I mean they also like gen I guess the only one IP that maybe doesn't perfectly fit all the other games is Heyday and you know kind of like convince Ada players to come and

play like some of this stuff maybe a hard sell um but all the other IPS essentially um kind of operating in the same genre or audience uh or in the same audience roughly so yeah combining that IP is you know another uh it's another great way to this kind of deal is the organic installs uh uh perspective and but yeah I'm more I guess the bigger point is just like that whole the multi versus uh perspective the time you said which is also exciting but they get to reuse content and you know then uh you know and then showcase like character abilities and very different ways given you know the the core gameplay of different games and such so it could be like pretty interesting it's worked pretty well for uh fortnite and Mortal Kombat yep yeah I mean I guess we have a similar thing coming out with X defiant for for Ubisoft right we're just like let's

let's slap all our stuff together and one thing and hope that helps for at least user acquisition but uh on the topic of unexpected strategies and uh and IP EA and doing nfts suddenly uh in terms of like working with Nike yeah uh wait hold on uh I already feel like this has gone downhill that we're referencing a guitar yeah yeah a guitar who article uh talking about nfts so it's I'm sure it's going to be super highly fair and balanced absolutely okay well I mean I I okay there's maybe like one of the few Kotaku articles first of all I don't read kuraku too much but General opinion I've heard is like people are not like too uh you know it used to be good but now it's not good that I don't know where like the

industry falls on Kotaku but this article I felt they were quite cheeky about it and it kind of jives with my thoughts on the topic of EA coming out with nfts in June 2023 uh so the headline goes uh the headline of the article is it is June 2023 and EA wants to add nfps to FIFA and Madame and the subtitle is no you're not reading the date wrong this is not June 2021 so I think like that kind of like also captured myself went around the whole topic a little bit it feels like yeah a little bit later to the full NFC hype train and you know especially given the market conditions uh yeah I'm not too sure about how you know uh what a launch strategy actually looks like but but um two uh to their credit um I think Nike and this like dot swoosh uh unit which is Nike's web 3 unit is also the one sports brand or one of

these more like consumer brand uh web3 units that's actually seen some significant success in the NFC space um there's I was checking the numbers on a on a on a on a new dashboard and I believe um I believe uh Nike through its nft uh activities are generated something like 200 million in uh you know in nft revenue for themselves which includes primary sales and uh the royalty Revenue generator and the next so Adidas is um let me check the numbers Adidas is at like 10 million uh so uh and I think after 200 million the next brand was uh this uh I don't know how you say it like is it yeah and they're at like 20 25 million

so like article I think there's a couple things worth noting um first I suspect that so you know Nike acquired a company called artifact a couple a few years ago which was a you know a startup um that had had a lot of success um doing and if like they had they kind of made their own pretty cool looking like sneaker nfts um so they've got definitely internally some good uh you know good people who know what they're doing working on this stuff I will also note that like the two areas where this makes the most sense like nfts can make the most sense and have had the most traction are sports and you know what I would call that I mean really like sneakers and these are veblin Goods right like these are these are these are markets that are driven by

luxury and perception and scarcity and and I will say that while the hardcore if you look at who which which communities have been most hostile to nfts it's the kataku audience which is broadly speaking hardcore Gamers whereas I think you could argue that you know the overlap between those people and like Madden fans is not huge so I I wouldn't I wouldn't necessarily write all this off because it said that you know they're taking a very I would expect Kotaku to be incredibly hostile to it but I can see I can see how there could be something here that makes makes some sense you know as a way to bring oh I have my my super nice Nike um you know rare Nike nfts I can put them on my players in Magna whatever and they're using you know the sort of the infrastructure of of blockchain as a way to do that um yeah I can see it I guess I am not

like yeah I mean a majority of that 200 million generated by you know the wet 3 unit of Nike is coming from by that company yep and yeah right so yeah definitely proven but also they generated all that Revenue during the peak of the hype right and I guess that's where my CR7 is kind of coming from like it's it's not it's never a bad time it's still not a good time I mean yeah it's still not a good time yeah yeah I'm not like excited I'm not excited about it but I just think it's not quite as you know it's not quite as because I'm trying to add a little context to the yeah yeah definitely but but yeah like it's uh I mean this I mean EA and like you speak to like huge huge audiences right and and these two games that they're also putting at them to also speaks to very huge audiences but the general perception right now about the space is you know everything is kind

of so and like no one really wants to like be getting in right now um and yeah I just my biggest concern is just timing you know like why now like why did they think now is the best time to do it but with them that way I didn't I didn't have like a question for the group on this one because it was a quick update but I don't know I'm inviting any other thoughts also I think it makes a lot of sense if you if you take out the word nft and think of it as digital merchandise and brand and going with those things are obviously big in sports games right like Madden and FIFA and stuff so if you just think of as like if the headline was you know so EA does a deal with Nike for digital merchandise in their sports games everyone will be like well yeah obviously and like it's only the nft word that sticks out there right like so if you can ignore that yeah and but the thing is it's like yeah the nft part maybe rub the hardcore Gamers they're like the wrong way but obviously there is an audience as David pointed out for these things and it's

more like EA going like well we're like Maggie already has some pole this particular audience for the artifact stuff and and the web3 stuff does have some pull as well maybe it'll work out like we could try it see if a pull some game was over if not we just don't do it again yeah they also didn't mention the term NFP in the whole announcement or anything right like and that was definitely very intentional uh at this point but um but yeah random side note uh thanks uh David for uh telling me how that company's name is pronounced because like it was the hardest thing for me to remember you know like I was thinking to myself I preparing like how the hell am I going to say this rtfkt but uh yeah it's good to know how how it said yeah I thought you were talking about Dolce Gabbana at first but yeah no yeah it's it's artifact yeah well in terms of web3 we do have like another brief sort of interesting topic on web3 uh which is SEC finally taking

some some bigger action here uh maybe maybe a little late after given what happened with FTX but it seems like maybe also a little responsive to that uh basically two things happened recently which is first off uh SEC went after binance which was a much bigger thing like in terms of uh this long you know case document that they're going after them with like lots of stuff lots of accusations of a lot of bad activity coming out of uh binance like it definitely seems a bit similar to FDX in a lot of ways just a lot of accusations of the founder uh CZ doing stuff kind of sort of like what you know we saw from Sam Friedman which is just a lot of moving running around co-mingling stuff hiding stuff running stuff in a way that like is kind of backdooring things and so there's a lot of accusation there and of course cz's like public responses like ah this is all Bs they just they're just going after me like targeting me uh and like the SEC is just kind of the enemy and they're just afraid of us and stuff like that but the the important part of this I think for the broader

crypto landscape besides just the potential to take down a big uh player in the space is also wrapping into some game tokens to that right that there's a lot of tokens being targeted as part of this and so the the ones that we kind of care about uh like the it spread across a few different areas but uh the the three that were gaming related were the Mana token for decentraland the sand token for the sandbox and uh interestingly axis governance token AXS and then there was also a couple blockchain tokens like polygons Matic uh there was a flow even wrapped in there Salon is soul algrands algo Cardenas ARA or Ada and then uh and then even like filecoin and internet computer token so like they kind of went a bit Broad and the suspicious part that people are kind of calling out is it was the exact same list as was approved for Hong Kong trading uh so I don't know maybe conspiracy theory out there I believe is that for trading or something along those lines in Hong Kong at least that's the comparison has been brought up um there you know there may

be a little more depth to that there may be not it might just be people looking for some kind of connection uh but it definitely is a little a little bit strange if it's like the exact same list I mean provided I mean good it the thing is the tokens you just mentioned they all very obviously to me anyway they fail the Howie test right like failed either either fail or pass I forget like which is which is which exactly right but like that so the Howie test for is something a security is um do people invest money in uh a common Enterprise with the expectation of profits and do the profits come from the efforts of others right those are the four things and if you hit those or hit any of those actually then you're um then then then you're a security and like taking AXS right the you know if

you and if they've checked they've updated whatever what access is supposed to do but the the premise was you buy as AXS and what you do well and as a as a holder of AXS like the way there are the axi economy uh works or at least worked was the the profits are flowing to the holders of x success sure it's an unregistered it's an unregistered security so I don't think you need to you don't think you need to be sort of that conspiratorial about it um it's just they are and so yeah and I think those the three gaming tokens are clearly that right whereas like the other two are more just about land like being the kind of investment vehicle the I think the thing that's a little more Curious is uh the the the tokens that were meant for blockchain stuff or infrastructure stuff like filecoin and internet computer which I mean maybe they were pitched as investment vehicles but I don't I don't think a lot of people really look at say something like Matic as an investment vehicle so much as it is like the fuel of the system

because if you're looking at Matic as an investment vehicle then you start to look at ethereum as one where it's like this is something to pay for gas and transactions and validation and uh I mean to be fair just about everything passes the Howie test uh it's more just like how much you want to consider that making it an actual security versus just passing that test because that test is very vague right and so I I question not necessarily it's not it's not it it's it's not vague like here here's literally this is it like 1946 SEC versus W.J howiko an investment contract for the purposes of the Securities act means a contract transaction or scheme whereby a person invests money in a common Enterprise and is led to expect profits solely from the efforts of the promoter of third party it being immaterial whether the shares in the Enterprise are evidenced by I won't give you the full thing but the investors provide the capital and share in the earnings and profits the promoters manage control and operate the Enterprise it follows that the arrangements whereby the investors interests are made manifest involved the

test is where the scheme involves investment of money in a common Enterprise with profits to come solely from the the efforts of others if that test be satisfied it is immaterial whether the Enterprise is speculative or non-speculative or whether there's a sale of property with or without intrinsic value and and so yeah I would I would say that like yeah that that is pretty broad though like it is specific abroad at the same time in the sense that like you know making profits from the efforts of others I think pretty much describes business in general right like I I get that in combination a lot of that stuff can be a little more specific but uh I mean that's again that's something that's also an argument for the lawyers in SEC and stuff like that and I'm not not a lawyer but I just I the the breadth of the different types of tokens and the different types of use cases and stuff like that that's where it makes me a little skeptical but I do think that uh the the gaming tokens as you pointed out yeah they were they were rightfully pitched a lot more leaning towards the investment side and maybe some of these uh these you know blockchain tokens in their initial pitches were like hey oh and a part of this infrastructure as opposed to like

this is the fuel of the system uh but I I just wonder if like there's a reason why these were selected not because of their specific uses but because they were grouped in for another reason like maybe not the Hong Kong thing but maybe there's a reason these were just easily loved it because obviously these ones also match a lot of other ones that aren't listed and it's like is this just the first opening or is this just something that got pulled into the binance case and isn't really necessarily super material to how the SEC moves forward after binance right and I think that's what people are kind of concerned about is like is this the first opening shop from SEC or is this like this is just part of the binance thing they're just dealing with and like there may be a little Fallout from it but it doesn't mean the end of the you know crypto in general because SEC goes after everything and just add a little color there was another uh case site of this that is much less uh surprising or harsh around coinbase as well which is them basically saying hey coinbase you're supposed to be registered security because of what you're doing is basically like you know along these these lines and uh

you should have registered and then of course coinbase's return is like well we we asked you and you said fine and like you were okay with this and we we pushed and we tried to and you were just like nah and therefore that's why we didn't um obviously like you know Arguments for both sides but I felt it was kind of interesting that sort of like uh coinbase responses they've been a lot more vocal lately in general about the SEC and I don't know maybe they kind of invited it by that they also had gotten a letter uh that they were kind of you know potentially going to be sued earlier on so there was some warning there but I'm kind of curious as well like if you have to take on the coinbase side of things and if it even has any bearing on the other stuff I'll take that as a no definitely seems like separate cases just timed you know back to back yeah I guess I don't have like too much to say on the coin based stuff but um on the on the game tokens kind of getting classified as securities I mean that's that's huge news right so

does that I mean that kind of precedent basically means any any any web free game right now that is thinking about a token or has planned their roadmap for the token in it or has given out tokens to investors uh I mean does everyone need to backtrack right now they need to like start checking you know thinking about it again like what are the investors going to do inside um is there is there like maybe it's too early to say but I mean I mean I guess what now all these tokens need to like register as Securities or like what happens but I mean seeing AXS um I guess two things kind of shocked me one is yeah I've seen these three tokens in that list and the other thing that shot me was um yeah Matic uh which is polygons token and Solana's token are there but ethereum and Bitcoin were not in that list uh maybe those are not I don't know if they I guess they are traded on

finance also but um but yeah they didn't make it to the list and I didn't really see I don't understand why that was the case so but yeah I mean I don't know Devin what do you think like I mean isn't is it like huge for the web 3 gaming space right like everything kind of changes yeah and that's I think that's the broader topic here is is this is like we're already struggling in the web three space when it comes to investment money now I think this just pretty much slams the brakes on it right like if you're if you were concerned at all about SEC enforcement of tokens and stuff like that you're gonna be looking at this be like maybe I should invest in AI or something else for the time being you know like and just kind of wait it out right I mean they've been calling for regulation for a while like like coinbase of all the companies I feel like actually I I would lean towards coinbase has been overly trying to play ball for a while from from my perception uh and so I do think it's likely that that you know there could have been miscommunication but that they were

probably trying to do things by the book whereas binance I think it seems to have clearly in a lot of ways dodged things and made some suspicious moves and we really don't need another FTX kind of situation so maybe this is actually for the best for for the industry to kind of continue to clean it up that's the sec's job right is to to clean up Bad actors to an extent to to keep the space a little more fair don't always do the best job of it it's a mixed bag but and this is of course a U.S Centric move right this is not necessarily going to apply everywhere else uh and this is this is mostly going to hit like binance.us although they're accusing of like commingling between uh other Enterprises in this as well um but like I do think this is like maybe good long term for crypto in terms of like cleaning stuff up adding some regulation adding some clarity but bad short term in terms of like pausing Investments and getting people to be a little more skeptical and avoiding that's because we've also got Yuga Labs was kind of being sniffed around because of course they're one of the big money makers uh in the space and so it's like

does that come next right we had these two back to back is next week the case against yoga labs and the week after that maybe against artifact at that point like we don't really know like where this is going from here and that's that's the biggest problem is the SEC kind of leaves us guessing uh and and like that the fact that again having to cut a guess right now yeah it kind of feels like it kind of feels like idfa movement for the web 3 space or baby like at a scale like that maybe five because I mean my biggest question is what the hell happens to all the developers with the tokens that who are planning tokens or who have tokens you know at this point like just the president that is now set with this they didn't say they're going after these tokens is the other thing though like they they mentioned it you know in as part of this but they're going after binance not going after the tokens and that's what I wonder is like are they going to go after like the tokens those Enterprises is like you know is is polygon as a company gonna have to worry about this you know like that kind of stuff I think is more of the open

question or is this just like Hey we're listing this as reasons why binance was doing wrong things yeah yeah but yeah I guess I guess we'll just need to like kind of keep keep track of it and see how it evolves around that kind of turns things but definitely something to keep an eye on I think uh in terms of at least obviously like that's a you know kind of an area I spent a lot of time in so I'm I'm definitely I think I think it's a good moment I think it's hard to spit it it's a good moment looking for the Silver Linings kind of things right like I I want to stay bullish on the space the the we're building period and everything like that and and yeah maybe a little a little bit biased on looking for positive It's All Digital Collectibles and digital merchandise guys okay exactly like lots of rebranding of how web3 gets pitched right because I think uh you know even David's kind of pointing that out like that that was part of the problem is if you're pitching these as Investments like the

way AXS was pitched as basically being shareholder value of the the axi treasury like obviously a mistake to do that I think that's that's clear at night and I hope it sends that signal to the space like that's the part I think is good is like to be like hey that's not a great idea let's probably not do that and now you have some clarity on that it's just where we go from here I think will be the big open question but uh but I think we did end up uh without enough time to necessarily get to every topic here because there's so much interesting stuff happening despite people thinking maybe that sometimes things slow down in the space they never really truly do but we definitely also want to make sure we get to your guys's feedback here in the future as well like we've been giving some some great uh emails uh to the mailbag at podcast novik.com so make sure to keep sending those in and we'll definitely try and get those uh going here on the air when we have the uh the sort of relevant audience or research to be able to answer those thoroughly as we did last time with the uh the big Zelda question so definitely keep sending those in I want to think of course all the

panelists for taking their time out today I think but we proved that there's a lot of meat on these topics and a lot of different thoughts uh to to have on the different thought of angles especially with uh David uh taking a bit of the contrarian approach today which appreciate to keep things interesting uh but definitely definitely great uh to have you guys here as usual and of course thank you listener for tuning in hopefully you enjoyed this episode and of course we look forward to seeing you all next week and uh have a good weekend in the meantime if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a five star review and if you want to reach out or provide feedback shoot us a note at podcast navic dot Co or find us on Twitter and Linkedin plus if you want to learn more about what novik has to offer make sure to check out our website www.navic.com there you can sign up for the number one games industry newsletter navic digest or contact us to learn about our wide-ranging Consulting and

advisory Services again that is www.navic.com thanks for listening and we'll catch you in the next episode