Neopets: A New Frontier

[Music] welcome to the novit 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 pulse on current events dissect emerging Trends and games share Lessons Learned and have a great time this podcast is also part of novic growing ecosystem which ranges from free and premium research to Consulting and advice services for more information visit [Music] www.nic.edu or marketing expertise doing so can be a challenge nexus's Creator program in a box makes it easy for game Debs to build and manage world class class Creator

programs driving significant growth in conversion arpo retention and LTV Nexus has partnered with Incredible live service Publishers like Capcom grinding gear games highres ninjak kiwi and more and would love to help you our novic gaming podcast listeners do the same if interested in learning more simply head to nexus. g/ novic there you can learn more about the efficacy of support of Creator programs and discover how to easily build your own again that's nexus. g/ novic or check out the link in the show notes and with that let's jump into the episode what's up everyone and welcome to the novic gaming podcast I'm your host Alex te and this of course is the interview and insight segment we study history so that we can learn from the past and when we do we always find parallels with the then and the now and we study businesses for the same reason what did companies struggle with how did they succeed how did they fail so we can

learn and hopefully not repeat the same mistakes and so today we'll be talking about a franchise that's admittedly a long way away from its peak from the early internet era Neopets almost everyone before in 2005 has heard of it a children's virtual pet website launched in 1999 by Adam Powell and Donna Williams that allows you to care for virtual pets in the C world of neopia Neopets was one of the stickiest sites in the early 2000s competing with tamagachi which many people just called glorified pet feeding it actually contained a variety of games worlds activities a fascinating economy that some might recognize today as web 3es um with a currency called neocash which actually had real world value webpay personalization that some might call ugc and shockingly immersive ads something our industry in the console and Roblox space are actively thinking about introducing as if it's something new and revolutionary Neopets at one point had 35 million unique users and by 2011 Neopets had amassed one trillion page

views page views since its creation but today we don't hear about Neopets quite so often so what happened and what does the future look like for the franchise can digital pets compete for attention in a modern gaming world or find a sustainable and profitable audience rooted in Nostalgia today I'm exciting to walk through a journey of company pivots multiple Acquisitions product lines and rebuilding a long-lost IP so luckily of course I do not have to answer all these questions to help me tell the story today I'm joined by Dominic law the CEO of Neopets Dominic restructured the Neopets IP itself into an independent ENT entity called the world of neopia last July I believe and since then Neopets has experienced a big turnaround a major increase in monly active users and a significant Revenue jump so Dominic it's my pleasure to welcome you to the podcast thanks for having me and hello everyone Alex nice to be here and happy to share more about Neopets that's awesome yeah and so actually this is perfect um i' love to have you tell us a

little bit about your background and how you came to lead the Neopets franchise sure so uh I've always played neop when I was a kid and is a big part of my childhood uh but before I get into that like more recently uh my professional training has always been in more kind of like the traditional route uh when I graduated I joined a management consulting firm and then I moved on to become uh an investor at a private Equity Firm and then I went on to do my MBA degree and that's when I started uh the catch on the startup entrepreneurial bug and started my own company ran it for a few years and exited and it's kind of at that time I was like I was thinking that I want to be an ENT like a seral entrepreneur but I don't really have an idea in mind I really want to pursue so I went back to finish my degree uh and then after that I actually joined this gaming company CAU net dragon as a listed uh midcap gaming company in in listed in Hong Kong and one of the reasons I joined because uh the person that WR wrote my recommendation letter for my NBA program actually works there and he's a mentor

of mine and it's very exciting that uh the Mandate I had back then is to help Net Dragon restructure the education technology department and the interesting part is because under that it's the education gaming department and one of the IPS and games that they own is actually Neopets the game that I've played uh when I was a kid and is a big part of my childhood so it definitely sparked my interest and my mandate was to help them restructure uh the education Tech business and help them with uh kind of like a secondary spin-off and listing uh as part of that process I realized that there's still a lot of untapped and potential of Neopets and during that process I helped uh kind of like looking at the business potential and came up with a business plan uh for for for Neopets and in that process I spearheaded like a side project for it and get to work with the community and get to work with the team that is actually leading up uh like Neopets and that's when I started to get the conviction that maybe there's a lot more that could be done and I persuaded uh my

boss as a net Dragon uh to allow like some of the team members uh to work with me uh to cover like broker management buyout deal uh and eventually that happened uh in July last year where we uh officially uh spun off neopet from net Dragon uh so that we can become an independent uh entity uh so that we have like a lot more flexibility we can run a lot faster and we can kind of um do a lot of the kind of the changes uh that we've uh we've been identifying some low hanging fruits that we can can crack and really brief some new ear into this uh Neopets IP uh so it's very exciting that we've uh it's a very early on on the journey uh but we've been achieving a lot of uh growth uh so very excited to be here to share more about it awesome yeah and before I I've got a bunch of questions in there um you know specifically about the structure and how big uh Neo world of Neopets is today but very important question what is your favorite neopet and why uh so my

favorite has always been a shoru uh it was my first pet and it's kind of like the pet that I cared for the most uh and yeah still my favorite now nice um yeah it's always really fun because they're kind of like kind of like Pokemon but you know not exactly U so I always like always like to ask um because they're kind of they're kind of cute um but it sounds like so you had this incredible serendipitous Journey right where you played this game as a kid and then you happen to find yourself at this um you know Middle Market gaming company that also had something to do with education games they happen to own you know that exact precise IP that you had played and and was beloved by you as a child um you know and it's actually really interesting because you know a lot of NB talk about the search model of you know looking for wanting to be an entrepreneur wanting to run a company but you know not necessarily saying hey it needs to be something brand new right like I'm super happy to refurbish something that you know had either had clout before or need some tuning and so

it's a very cool success story I think from the um from the business side of taking over a company and spinning it off into its own um its own entity and so just to ground Us in kind of like what does the structure of Neo world of Neopets look like right now how big is your company um you know in terms of employees Etc and what is what are the products that Neopets has that are the live games that they have today yeah sure so basically um leadership team that took over uh kind of like uh the the Neopets project uh basically Acquired and inherited like most of the kind of like asset that uh Neopets originally own uh like all of its IP and related games and including the team that's working on it uh so we kept all every team member uh and then of course we integrated with the the new leadership team and kind of like some of the outsourced team that has been helping us to build some Neopets games so the structure is basically uh quite Global now our headquarter is based in

Hong Kong uh the original neopet team has always been based more in the greater La uh and also kind of like across the us and we also have like a decently sized team in Vancouver as well so these are kind of like the three major hubs we have uh but then uh we also been hiring kind of like new team members in markets where neopet used to have like a like a decent presence including UK Australia Singapore Hong Kong uh so these are all kind of like top 10 markets for us outside of North America America and in terms of the corporate structure um we although we did a management bio to acquire this asset from jumpstart which is a subsidiary of net Dragon net dragon is still a very significant uh kind of like uh minority shareholder of us so they gave us a blessing they gave us the IP and they also invested in us and gave us the seed funding uh to make this happen uh and of course the leadership team also put in our our own like money and our Sweat Equity to to kind of uh like leave our comfortable uh Catholic jobs

at net dragon and to lead this Venture so all of us uh most of us have have a lot of conviction and we've all loved this brand and IP so much that we believe that this is the right moment to take the leap of faith uh and to turn things around uh so we have around uh I think like 50 something full-time uh employees and we also have like uh outsourced uh team members helping us on developing some of the new games uh the size uh of the Outsource team fluctuates depending on the needs uh of kind of like what we're developing uh so we try to be very lean and also kind of like a high fast uh and then and learn fast and kind of like push up more products do more updates yeah and team is relatively small though yep yep core team is Rel relatively small yeah okay sorry continue no and then I think your your other question is about the the product that we have uh so majority of the team are actually working on fixing the classic site so the the original neopets.com we call it the classic game game has been around for 25 years uh

very astonishing that it's been around for so long and the server never never closed so it's been one game uh the first kind of like digital native uh virtual pet game that has survived for 25 years and we're actually putting in the most resources to revamp that and continue to upgrade and fix bugs and kind of like really fixing the foundation of this Neopets uh kind of like Core Business and then uh the the kind like 8020 rule the other resources we've been investing in to revamping some of the games that has been developed by either uh net Dragon uh developed by uh n uh Neopets kind of other teams uh one is used to be called Island Builder and the other one is called fairy soap so these are kind of like two side uh mobile games that we're revamping uh so we're very excited that we'll be revamp uh we'll be launching both of them again uh relaunching both of them uh later this year and that is kind of like the main game that we hope to help us uh acquire uh kind of like a

more mobile first generation of new players and also to attract a lot of the laps users that have left Neopets because they might not want to play a game on the PC anymore or they might not be that access like a desktop browser might not be as accessible to them anymore so these are kind of like the tools that we're building out in terms of the product got it okay so the core game the classic version like Neopets web um HTML 5 is still up and running um which is actually quite incredible and you have the core team of the 50 people that you um have assembled uh are working mostly on Neopets classic and then you have a couple of other products that you're looking to um expand out to and refurbish in the mobile market and the Outsourcing teams work on this um is that basically a good way to describe the structure yeah that's that's yeah awesome um okay yeah just helpful to get some some grounding because it's such a big franchise and has had such a huge history of different product lines different games different experiences

cpg um you know there's a lot kind of going on so trying to make the pictures clear for audience um before we dive in and so um I want to obviously talk about where Neopets is today but I think one of the most important things to do is talk about the history of Neopets and how it got to where it is um and it has as we've mentioned such a long lifespan and there's a couple of eras right its initial Foundation from 1999 to 2005 when it was an independent entity its era under VI and Nickelodeon from 2005 to 2014 It's Time at jump start games between uh 2014 and 2021 a slight detour into the metaverse and nfts I think in 2021 um and then under net Dragon 2023 and then today with your buyout to be the world of neopia and so I think each of these is particularly interesting not only because it's changed um in agerial hands but also from the outside looking in some of the core business strategy shifts um um there's immersive ads

there's banner ads there's in-house coding there's pet trading there's nfts there's many games and platforms and so I think this is an awesome opportunity to kind of showcase that Neopets was doing a lot of really cool modern things but back in the early 2000s and so I would love to kind of walk through all these eras right so the first era being again the independent entity and the initial Foundation um I think then players were averaging around 117 minutes per week which was you know very crazy this is like back in the early 2000s um there's like four billion wave uh web page views per month and this is in 2005 so could you tell me the original founding story and tell me a little bit about the primary experience that people were doing and who was doing that experience yeah so let me start with uh I guess how it all started started is like a dream between like the founders and then it's kind of like uh how can we bring like the viral pet experence experience into into the

gaming world and I think it all started as like a a school project while they're still in college actually uh but it grew really quickly from there uh and definitely blew out and I think the interesting part is because it's a very Innovative idea and it's at the very early stage of Internet when everyone is still exploring the world of internet in different ways and being the first kind of like digital native like we can say that it's like a virtual pet game it's also like a like a MM RPG as it's very early stage uh so a lot of kids play Neopets is being kind of like the first way to open their doors to the Internet so a lot of kids actually play Neopets and think that oh they're actually the cool kids and they're ahead of the curve and Neopets at that time is basically at the Forefront of technology in terms of the gaming industry uh leveraging the early stage of Internet uh connecting like like using mini games like uh using kind of like uh kind of like how you can like I guess it's kind of like tamagachi but it's like even on even more steroids they're feeding the pet you're doing a lot of things they can uh have like uh

it's like let's also like have like social media as its early form because Neopets back then uh predates like Myspace Facebook and all these social media platforms and a lot of kids actually have like like active discussions and they connect with their friends uh in in then in in kind of like in the game and I think that's kind of like the early kind of like formation of the company and why it became so big I believe there's a a few major factors like the growth of the early internet for sure and they kind like this innovation of bringing a a new game genre that the world has never seen and also being kind of like the first to really uh kind of like bring uh a lot of these young Gamers together to open a whole new world to them and kind of like just put things into perspective Neopets back then is probably as popular or even more popular than Roblox nowadays like every one and two kids in in the US played Neopets and friends all play Neopets together and that was at the early day of the internet when they

don't spend that much screen time uh compared to like Catholic gamers in nowadays so they're basically spending their 100% of their screen time on one game or even close to 100% on one game and it's Neopets so if you kind of like put that into perspective it's actually quite a phenomena back then but um true yeah yeah but that's kind of like the the early formation days and I think vcom see the that's like a potential like huge gold mine and that's why they they they went in and acquired even during the early formation days it has been very very early on uh investors came in and then kind of like uh uh took majority ownership and then kind of like mov the company from from UK to LA and Etc and then vcom come in in 2005 and I think that's kind of like the new era and vom continue to invest a lot into into new pets and I think one of the major changes is that there's been a lot more focused to turn Neopets into a broader entertainment IP and then kind

of try to uh make it as a more like a mass IP instead of just like online game uh type of uh business uh but I think something that has uh definitely some missteps is that neopet definitely missed out on the whole kind of like mobile Trend uh we kind of maintained to be an online brows browsing game uh when the mobile TR Trend started to take off like in the late 200 like 10 or 11 12 and like how like iPhones took over and then um the app store opened up and then kind like mobile the mobile game era which is driving the the growth for the whole gaming industry for the past decade uh neopet basically lost out on that we didn't participate in any parts of it uh until kind of like more recently we Tred to make our browser like more mobile friendly and mobile responsive and even now um half of the game is not mobile responsive and we're still working on it so I think that's kind of one of the main uh reason for the downfall is that as it's kind of

like that's one of the factors but other factor is like most of the kids that played neop started to grow up and for for all the good reasons they probably graduated from the game and they kind of like moved on to play other other other types of games as they become like more like like older and more mature but of course uh I would say a lot of users that are still playing Neopets now actually played Neopets for 15 20 years uh there's a lot of reasons uh there's a huge emotional attachment uh to to to their pets um it's a it's a form of kind of like virtual companionship uh and then they take their pets very seriously and it's kind of like family to them so uh a lot of users also play neop because of the escapism the friendship that um that kept kept them there the community so those are all the reasons uh that kept our players uh still playing uh but most people left because like they probably start to see that there's not enough innovation in the game uh there's like uh less like less plot development less updates and and some of the some of the some of the bugs are just not being

fixed and then kind like just the whole game the whole experience uh is just getting worse and worse uh for for most people and then it's kind of like uh that's why most people left yeah that's it's so fascinating it's like it's the parallels to Roblox are actually like so much more visible and transparent than I guess maybe initially thought right it's like you know here it is where you have a young generation of people that are learning to use the internet for the first time and in a very similar way you have a Young Generation of users who are incredibly um you know in tune with the internet but are engaging with the internet in a in a significant creation way like the ability to code create their own experiences right and the thing that Roblox will potentially struggle with is the fact that everybody will could potentially grow out of the experience and so you need to create this you know what Neopets did was it obviously didn't latch on to the mobile phase it kind of stuck with its one cohort right the the people that joined in the early 2000s and then you said played for 15 years but it didn't do new

user acquisition of another generation of Youth which is you know again what Roblox is trying to basically Usher in new new eight-year-olds every year um which is is just so fascinating and um you know we talked a little bit about how you know Viacom came in I think they sold for 160 million in 2005 right um and then you know kind of missed out on this mobile Trend and but I guess a question there is still who are the people that are playing do you think that the players were consistent between the first era and the second era and you know demographically who are that who are they right like obviously now net dragon is a Chinese entity but are the players truly Global are they more concentrated in the United States or in London um and typically when they started playing how old were they um you know my my my uh instinct tells me that most of these players are female but I could be totally wrong um so tell me a little bit

more about the player base and how that shifted between the independent era and the Viacom era sure so I I can probably talk more to the data that I know that's kind of like the existing user base uh so the existing user base the core demographic is like age 25 to 35 it's kind of like more than I would say like around half of our existing user Bas is around that core demographic and it's and you're right that it's uh slightly skewed more towards female so around 65% of a user base is female uh and also they're a lot more concentrated in North America so US and Canada to combine is 70% of our user base and oh wow the next three markets are kind of like it's kind of like next five markets around like two to three% each uh they're like Brazil Mexico uh UK Australia Hong Kong and Singapore uh so that's kind of like the the the the more English uh speaking uh countries and kind of like uh also back then when when internet has like um better penetra ation uh it's kind of like that's why there's like some some

of these like Global uh presence that we have um yeah so it's quite exciting to see that we're still relatively Global but a lot more concentrated on the North American side uh but in terms of like the early generation uh is the demographic exactly the same I'll probably say back then that its peak is probably a little bit more Global than it is now because as I mentioned what kept the community together is basically uh the the tight-knit bond and the friendship and I think for some of the like countries where we have like smaller presence uh probably most of the users would eventually kind of like graduate and move away from the game uh but for kind of like us and Canada where there's like a kind of like a I would say like like like a a core demographic where just like more influence and there's kind of like more like resonance like like yeah our players can resonate with each other better or there's like more Community involvement uh so that's why uh this this core player base is more prominent but I think back then it's a little bit more Global but it's always been skewed a little bit more

towards female I think in about uh back in the days we probably have more male uh players as well because a big part of neoz has been like battle domes uh but I would say as as as as as the game kind of like slowly dies down uh like most of the male players are like they they kind of move on sooner to play other genre like genres of games like um maybe like like first person shooter or kind how like being more like consolle Rous Gamers so we more female players uh stayed with us uh than female than male players yeah got it got it yeah and I asked this question mostly to ground ourselves because you know after you know you talked about the the you know the the franchise begins to kind of decline in the 2011's 2012 2013's right when the mobile uptick is happening and again like you said neop pits Neopets kind of misses the train and then they get acquired by jump start games which is an educational platform um and and I'm I'm curious as to you know what you

feel the value proposition was to jump start you know why acquire the Neopets IP which you know has maybe a audience that's somewhere between now in their they're probably now in their 20s right um and they're and they're they're skewing towards female they're in their 20s why does a why does a education platform buy this this IP in 2015 I guess if I have to guess um so education has always has been kind of like a byproduct for Neopets as you pointed out like uh a lot of our users learned about the the way of Internet they learn about coding uh they learn about kind of like artistic drawing or kind of like digital uh ownership and things like that uh through Neopets or even game design uh game balancing game economy inflation trading Etc so so there's like the the the neopia the world of neopia is like so fast and it's so kind of like uh intricate that a lot of our players probably learn very different things

from it so you uh skopas has always been kind of like kind of like somewhat of an education product as a byproduct I think for for jumpstar to acquire it that's probably one of the feces that there's there's always been kind of like that that tie to education and I think the second part uh is probably like knowing that a lot of our users are still with us but they've kind of like grown with us and some of them are become kind of like young parents that will introduce this uh Neopets game to to their potentially to their uh Next Generation uh so that's kind of maybe the the other uh feces that that we have in mind because in in the past we do see that like we have some inflow of of like really young Gamers and we've never really done active marketing for user acquisition for the past I don't know like five years or 10 years Al a lot of these users actually came in because their parents played Neopets and introduced uh this game to them I see got it um but that doesn't happen really

as much like it sounds like from this era was the was probably the most rough for the Neopets era um where maybe a lot of those those thesises did not basically become true yeah um from my understanding it the the franchise basically takes a big decline it drops down to like a 100K users like um and it's just it's not as active it becomes like it's kind of like on the downward slope um yeah and I think one of the most recent missteps uh apart from missing the boat on the mobile trend is actually the discontinuation of flash um so uh most of neet's website is actually built on flash and then back then when adobi announced that like they will they will just continue to support on this I I think we didn't really plan ahead for that and to be honest at like December 2020 I believe like overnight 80% of the site becomes broken and unplayable and then like and then even in the past two three years uh before this new new leadership change uh less like I would

say around like 10 to 20% of the site has been successfully converted uh so there's a lot of work for us uh but that's also one of the biggest like missteps um probably in in the recent kind of like uh era I would say makes sense yeah I mean and that but that's true I think it's uh when you have such an old technology like that I think you know my World of Warcraft suffered from a lot of the same problems of being such an old and beloved franchise but built in the early built in the 90s and then the 2000s and so you know we we there's there's there's jokes that you know wow wow was built on a toaster right um it is not necessarily like a modern video game but you have to keep up with it because um and if you don't well then things will break um so really interesting and sort of like lessons to be learned about like upgrading um your Tech debt over time um and so kind of want to wrap up on the on the on the history 101 of Neopets you know we we take a small detour into the Met in 2021 um I think that the you know I

don't want to speak for you but I think my inclination would probably be hey digital ownership synthesizes pretty well with digital pets um and we actually see a lot of web 3 companies um pursuing that kind of today right where like I will care about this thing for a very very long time and want to own it um can you briefly walk me through sort of whether a that thesis is correct and then B kind of why did why did that not stick yes so I I I can speak to it uh on multiple fronts so when I when I was with net Dragon looking at Neopets and looking exploring the different business opportunities uh so this whole web 3 idea came to net dragon and they spearheaded this kind of like a kind of like an nft cell back then so the cell itself went pretty decent uh we sold like over 4,000 nfts and raised like two to three million US dollar and then but we received also received a huge kind of like backlash from the community and that's when uh I was like tasked to

kind of Explore More and why uh why why is that and why uh kind of like the the the the core community of Neopets really disliked this whole idea of web 3 and and kind of like this whole idea of token and and everything uh so that's kind kind of when I took over and kind of like lead the kind like web3 side of the project as a kind of like a SL project kind of independent of the whole core Neopets team but as I as I mentioned that's kind of when I started to get to work a lot closer with the community and also work closer with um the the core original Neopets team uh from the kind of like from the jump start days so that's when I also get to understand oh there's actually a lot of potential that we if we do things right so one of the reason why it didn't actually let me start with what the hypothesis that we always had is that neopet has always been kind of like a like has always originated as a metaverse even before this whole term metaverse becomes so popular because of web 3 in the past few years so metaverse

has like this term actually always existed like in the gaming industry for so long and nepz has always been a metaverse like it's it's a very fast kind of like world there's a fast world view there's more than more than like 18 lands in in the world of uh in the neopia uh there's like a lot of like like game assets exchanged there's like the neocash which is essentially you can call it like a token in back in the days and there's a huge e inside the game and that's the biggest part of the game is like trading of items upgrading your pet and buying the uh the the most priced asset that you want for your pet to decorate your pet and also kind of like literally and and then the Avatar is basically how you represent your digital identity and then the Avatar itself is also like the one of the most priced collector's item and you can showcase it in the in-game Forum and and it makes you look cool and you have the bragging rights when you have like really cool items and you have the bragging rights when you have like like a great kind

Avatar collection or a great stamp collection so everything that happened in we 3 gaming in the past two three years it existing it existed in the opest like 15 20 years ago and and that's when we started to believe that oh maybe like doing a kind of like a neop pest for web3 would probably make a lot of sense uh but what we missed is that we didn't listen to our community and and as as I mentioned like Neopets the core classic game there's hasn't been any upgrade and it's been decaying for the past decade and like most core community members who played the game for the past 15 20 years are very heartbroken that they're not seeing the investment and the resources that is being is not being poured into the game that they belov the most and even those like the huge collectors collected so much they they really had this em emotional bonding with their Neopets and with the game and with the community they actually worri that the classic game might die one day because like

they're just like it's just so broken and they're not seeing that um the the the company investing much into kind of like upgrading it I mean we're kind of like having in bare maintenance mode um there's a there's a lot of infrastructure cost to just keep the game going so it's still huge investment but we're not really upgrading it and we're not really fixing a lot of the bugs that that's kind of like the the that's kind of like uh crumbling instead and instead you're doing uh exactly and instead you're doing uh n exactly so we oh we sold nfts and there's like oh we got like two three million try to build a new game uh try to build like things in the blockchain but neglecting the core I think that's kind of the biggest mismatch so there's a huge PR crisis to be honest uh our community like fought back uh they're very United but that's also when we realize that this community is so unique and it's so kind of like it's so interesting it's so tight-knit that they all came back together for the first time in maybe like five six like 10 years that they actually they they

care so much about the brand that we realize that that actually means a lot to them and we should probably do the right thing and listen to them and so in in the latest era like under our the new leadership team one thing that we care a lot more is like improving our transparency uh we communicate a lot more with our community uh uh cathic members listen to them and try to really focus on what can we do to make Neopets better and for the for for our community and also making Neopets a very sustainable game that could be played on for many many more 25 years to come yeah that makes I mean that makes a lot of sense and I think you know the reason why I ask this question is because I think from the web 3 side this game is perfect to be web 3 and yet it completely didn't work and actually may have been in a way it's it's it's a it's a loss because because you know here's a strategy you invested money in it it didn't work but there's nothing like um

rallying around the enemy that is web 3 and the blockchain to get your community back together right and so maybe this was infuriated all of your prior community and they like are all like surging forward that are excited about Neopets and them the and what the future could be and so this is a great time to you know now that we've kind of wrapped through the whole history of of Neopets to talk about you know who is this community today and what what is Neopets today right and so you you know you clearly have had some increase in users and traction so congratulations since um you guys have uh kind of spun out the company I believe you guys have launched a new game called the tales of decaria um and so tell me a little bit about you know what has changed since the management switch over um obviously besides the people right um but like what are what are you guys doing in the product to re-engage your core users um and you know what game are you specifically growing is it the mobile side or is it the initial original

website the HTML 5 yeah so so on the on the classic side as I mentioned we're pouring most resources uh and investment into that so I think what changed apart from the from we actually increased the team size significantly uh compared to the previous uh management team uh kind of like leveraging on the the the investment that we received and from the management buyout and and the prior fundraising activities and we've been able like we've been listening a lot more closer to the community and as part of that uh we kind of like need to prioritize all the things that we need to fix I mean there's like uh more than like a hundred things that that's on our tutu list in terms of what we can do to the product to improve it to upgrade it or to make it better uh so we're kind of like going through being very focused on kind of like turning out updates uh and being a lot more transparent with our community giving them uh regular uh Cal road maps and updates on what we're working on and we're also engaging the community a lot more so we actually launched a program a community

ambassador program uh to really help us collect feedback from different parts of the community and most of these Community ambassadors are kind of like they have their own influence among our commune members uh some of them are like runs our largest fan site some of them helps run our uh show show C like sorry the uh the fans group on Reddit and on um and on Discord so they have their channels to really help us gather a lot of like these feedback and kind of like provide us with kind of like a a long list of to-dos and also help us prioritize what makes sense and what should we kind of like focus on so we basically try to go back to business 101 uh focusing on a core fixing the crumbling foundation and make sure that the classic game itself it's going to be sustainable and it's going to be healthy and we can kind of like build new things on top and the new things on top that we're building includes this TS of tardia is actually formally uh called item Builders so we basically uh

revamped the game uh and some of the things that we changed is basically tying in uh the classic game with these new game experiences that we're building uh in the past these games has been built in silos the plot doesn't there there there's no connection uh whatever you do in this game does connect with that game but what we're actually doing with the new Neopets C ecosystem is that all the new games that we're building eventually there's some sorts of connection with the classic game uh so one thing that we do is like we introduce like an infrastructure layer we're calling it the neop pass uh on the surface it's like a single sign on uh kind of like uh making it easier for users to sign in and also improving the security uh so that we don't have to rely on the old kind of like a login and user base system and on but more one level deeper than that it actually kind of like connects the neopet ecosystem together so some of the your uh your progress in kind of like the new games could could help you earn kind of like Neo points or Neo cash or kind of like

items that you can use in your in your classic game and that's kind of one of the things that our community members always cared the most even back in the days when uh when they buy C of like our merchandise they want to redeem a code there's a code that for them to redeem an item inside the game kind of like a first generation digal products basically all these things happened in the past and we're just trying to make sure that we have a better way to modernize it and connect the the the game experiences together so I think uh that's kind of the second part the connectivity among the the ecosystem and I guess the the third part is really figuring out uh kind of like the longer term vision and how we work towards that as a company and as a brand and as like a uh as a kind of like during this whole raliz I think in the past there's kind of a lack of focus and there's the even the team itself they're very passionate uh most of our team members they're passionate neop fans they've all played neop pz uh in the past but it's just

that like they're so passionate they're working on it but sometimes they don't really see the bigger vision of what can actually be done to save this kind of sying ship and I think uh that's kind of having a a much more clear strategic goal for the company it's also what really glues the teams together and kind of like work towards a much brighter future for for for doets got it yes so it sounds like there's a lot of like this teching up you know your mod your your anzing the Retro elements of the game whether or not that's just because it's an old style but also the like you know the technology and the Brokenness behind the main game you're exploring kind of like you're saying this uh uh Multiverse esque like transversal of different experiences and how they all plug into the original base game and then you know you're trying to get some line of sight on the focus of the long-term goal um and so before we talk about the long-term goal I do want to spend some more time talking around the conviction in the core experience which seems to revolve around taking care of pets um in an online metaverse esque

World um and you know I think from my perspective right there's a lot of other modern experiences today that might be similar to that like an axi infinity or a peterse right and you know we talked a little bit about in in our kickoff about virtual pets and wellness but you know what gives you conviction that this is something that can grow um beyond the core demographic of users of the people that are kind of playing um for Nostalgia and perhaps the goal is for it to not grow and just service the core the core Community First um but I'm wondering if you could talk a little bit about um you know the genre itself of a virtual pet care and why you think that that's something that can compete for attention in a modern gaming yeah sure so I think there's something very unique uh with Neopets as like a nostalgic gaming brand or or kind of like the first digital native virtual pet game we actually because of the lack of update and the lack of upgrade we're probably one of the very few games that actually kept the pess of the early internet

culture so I think that itself is definitely an attraction or differentiation for any young Gamers if they want to visit history a living history or kind of like a a historical Relic they should come to neopet and that itself would introduce them to the to the brand and whether they play the classic game or or not for the long term maybe it doesn't matter because they once they get introduced to Neopets there's this new these new games that we're also building out and eventually they can just play our new games and and and and experience kind of part of the Neopets ecosystem without ever getting getting into the classic game so that's kind of our hypothesis on on one end but on the other hand uh we also see that like kind of like being in this kind of like casual gaming genre sometimes like just what works will always continue to work because it's kind of a part of human nature that we need virtual companionship it's part of human nature that we want to of like build

relationship with with kind of like a like a digital pet because in real life uh a actual pet is actually one of the biggest kind of like emotional support like uh kind of like activity that you can ever get but that's not scalable to the max because like there's always kind of like limitation on like like there are people who cannot get pets because of their living conditions or where they live they don't allow pets and ET but virtual pet uh can potentially be something that's that everyone can enjoy and we we are just kind of like one of the games playing this space we don't have to be the only game it's like I think it's kind of like uh like tamagachi coexisted with us back then uh we're probably as big as Pokemon at one point but of course they're now like a much bigger giant uh but they're just like um I don't see that um we need to win all of them uh but kind of like what keep us unique and what helps us differenti from all the other kind of like virtual pet game uh will able to continue to give us like um enough

growth kind of like behind it of course um back then as I mentioned in the first era of how neopet has become very very successful is because that we like back then like we're probably at the very Forefront of the gaming uh technology Evolution uh so of course in in the long run uh and the kind like the first pillar of the strategy that we discussed we'll always try to explore whether there new technology that could help uh kind of like put Neopets back in the spotlight that were actually at the Forefront of the gaming industry Evolution and might be the neopet 2.0 might be some new games that we're building but of course uh building a new kind of like like neop pest 2.0 game would probably require a lot more investment than we're currently able to uh to to to to deploy uh but the goal is to like really run Neopets and kind of like future proof this uh this whole game and this whole IP and make sure that we're kind of like building the foundation so that we can success ly uh fundraise or grow enough that way you can further invest into the future of

Neopets and the long-term strategy has always been more about future proving this IP and extending this IP and this neopet game into a cross generation product that can be beloved by more and more generations to come okay got it so it sounds like from right now uh you're focusing more on the core demo and ARR expansion is going to come from growing a business off of the backs of higher arow versus expanding out laterally to a new demo a new age demo of you know gen Z or a new geography um you know in in China or the Middle East or wherever um and that's sort of like the core Focus yeah I think at least for the coming year uh our core Focus would be on the classic game and and the Target that we can that the users that we can Target are mostly probably Neopets players in the past who left us we called them the recent laps

users are people who probably left the game in the past five years uh we estimated that there's around like 5 to 10 million of these uh people uh most of them probably left because of the death of flash uh because the lack of updates the lack of Maintenance uh so as long as we kind of like deliver those patches and upgrade the experience and introduce like new features that excites them introducing a new plot for example these are things that we're using to Target these recent laps users and as you mentioned uh back in the days we have over we we have over like 150 million registered users probably like 30 to 50 million uh unique users Al so those are the kind of like the the the rest of the 20ish to 30ish million of users are kind of like the long-term laps users I think those users we're trying to attract and get them to come back with our new games and as we kind of uh bring out these new new casual games in the mobile segment we're also hoping that we can uh attract uh existing Gamers or younger generation of Gamers who enjoy these

type of games and can kind can attract them to play these new games but we probably won't be using the classic game to Target the Next Generation because uh what we believe is that they will come but it might not be a game that would stick immediately uh so it's hard for us to pour kind of like marketing dollars to attract new users who play the the the classic game sure yeah so basically in your ma stack you're focusing on reducing churn AKA fix the game so it's not broken so nobody just reads and you know exits the browser and you're focusing on win back more so than you're focusing on acquiring new users which I think makes sense and um you know obviously is a strategy um and so but they did say something interesting before that I want to lean into and this is maybe shifting more towards the the future right um you know you talked about Neopets 2.0 and you know growing the IP to being something that's longlived and more trans media esque right and we see that with a lot of franchises you know Sega is doing that

today it's expanding out of games into films um you know you're seeing IP littered Across the cpg Universe or sorry consumer products um video games movies books Etc um and so I'm wondering you know right now it sounds like you have two teams one that's building the core product uh Neopets classic and you have some Outsourcing teams that might be build building mobile games um do you have plans for a major licensing strategy to potentially maybe other big Mobile gaming Studios For example so uh you know going to a Netflix or going to um you know any kind a Zinga or something like that and basically having them build you know a bubbl shooter or a match three game or something else right I'm just spouting random ideas to in laced in the Neopets IP similar to how that's been the core of a lot of Disney's gaming strategy which is basically don't build it license it yeah so I think uh that would definitely be part of the like the the strategy so

we are actively uh kind of like building up our brand presence and as part of that is to drive uh licensing opportunities uh not just on the gaming side but also on the like on product side on animation on entertainment Etc uh but on the gaming side specifically we are exploring uh different types of partnership for example there are there has been console games like neopet console games in the past on PlayStation on Wii uh uh Etc can we rebuild remake some of these uh classic beloved games into a switch game or into like a steam game or into like uh uh kind of like a different format so that we can grow into not just desktop and mobile but into other kind of like formats so I think those are kind of like areas of growth that would love to continue to explore uh so yeah we're very open to the licensing model and I think it will be a core pillar of growth uh but on the licensing side we're probably making a lot more progress on on kind of like actual products so for example later

this year we're launching uh uh a brand new trading card game with upper deck and it's been in development for the past two to three years and it's kind of like a a a whole new game we used to have a neop trading card game back then but this one is kind of like a a completely new one that we developed uh with upper deck and it's partially tied to the plot and and it's going to be exciting uh to see where kind of like these type of Licensing partnership can bring us uh kind of like new kind of like uh like new revenue and new growth drivers and probably reaching uh some brand new demographics as well got it yeah that that sounds really exciting um it does seem like there's a lot of synergy with with the card games and it's a huge popular strategy for getting that trans media Collectibles collectible translation from digital to physical cards um or even digital cards um and so I can't help but be curious though because we talked a little bit about Licensing in a very Like official manner right like oh like can we make a switch game about with Neopets or you

know we had console games in the past or we're making a card game but you know is a ugc partnership at all part of your strategy so for example putting the Neopets IP inside Roblox or inside ufn which is I would say probably where the predominant genz user base is today and so if you wanted your Neopets to be understood and seen by those users right because again I know that the first core focus is win back in the core but you know obviously there's going to be a phasing to things if this if phase one goes successfully you'll be your shareholders are going to push you to move to to phase two where you're in order to raise Venture there's going to have to be some sort of more proof of traction in the younger demos how are you thinking about the ugc experiences being the hot beds right now for basically we're definitely very open to that it's definitely uh kind one thing that we've been always exploring uh so we have looked into kind of like for example building on Roblox and whether we can leverage the IP and reach to the

the younger audience uh I think so far we've been in discussion with multiple Studios trying to find the right business model so we could find the right partner we definitely more than happy to do it it's just hard for the team to do it ourselves we don't have the cap uh capabilities uh we don't have the resources to kind of like further invest into stretching ourselves to Finn uh but if with the right partner who's willing to invest in this and kind of like believes in the Neopets IP I think we're definitely will entertain that I think at at its stance it's just that the Neopets kind of like Renaissance has just begun uh for a lot of like potential Partners they need to take a huge leap of faith if they actually want to license their product and build a game uh uh kind of like as opposed to licensing uh a more well-known brand in kind like in these day in this day and era uh to to uh push out a game uh just that we probably need to still kind of keep up with our kind of like brand awareness uh build up our brand presence kind of like among the broader Community

with uh the strategy that I've laid out and then that would kind of like continue to help make licensing much easier further down the line because like to be honest now we reaching a very core demographic that loves Nez but you're you're right that though these demographic they're not growing and for a lot of like potential licenses they kind of see that as kind of a risk like it's a kind of like a very stagnant base like if we can show that we can grow that then I think that's will give them a lot more like Comfort uh and conviction as well yeah that's that's their first checkpoint yeah um and so you know we're kind of wrapping up on the top of our on the top of our episode but um a final question for you is that obviously Neopets is a company that's clearly tried many many many things right it has an incredibly long lifespan I think you guys are about to celebrate your 25th anniversary you know this is an IP that has actually managed to withand the test of time you know it obviously has its Peaks and its valleys as with any you know business life cycle

or product life cycle but now as this current CEO what do you think is one of the most important things to preserve from the Neopets original DNA like what is something that okay we tried this this failed we tried this this failed but this thing is something that we will never change about our identity because this is the kind of the core of what Neopets was founded on and what we're here to do um and so what are you trying to preserve from the past yes I think what we're trying to preserve is definitely the the early internet culture that existed in neopet even as of today we definitely want to preserve that because that's what neopet success has always been built on and and because of the lack of update for all the all the all the wrong reasons we kept it and that's a very unique product for that's part of the DNA and that's part of what Neopets represent and I think that's kind of the one thing that we definitely need to preserve I think in the past we've tried too many things and neglected the core which is the classic Neopets game and I think fixing the

classic Neopets game it's just the first step of rizing and part of this whole Renaissance it's just we need to look back and really connect with the community that cares most about Neopets and really building and re revitalizing this game together with the community is the first step to really help us radiate uh the love that we share for Neopets to other people and to comp like new generation of players and to show that this is the early internet culture and why nepz has been so fun and so interesting back then and just looking at the broader gaming industry kind of like Evolution I believe that the there's a lot of games that becoming more and more very like toxic driven short-term gameplay driven just like a lot of microtransaction uh VAR C like very profit driven as well and that never existed in Neopets back then and that's way that's what made the game fun it's

always about the pets it's always trying to make it pretty it's always about expressing your digital identity um kind of like socializing and also kind of like just make friends uh and explore the world of neopia and it's very pure and of course a lot of like uh we we' we've also kind like tried to monetize on all its different ways uh but definitely not the way that we're seeing in a lot of other games uh in the gaming world so that part of the early internet culture I think it's actually very unique where if I were to introduce a game to to the Next Generation and not want them to expose immediately to the kind like the relatively toxic environment that we're seeing nepes could be a good start it's like a very open very diverse uh it's very like like a supportive Community it's it's actually like a game that probably uh probably one of the only games left that's kind of like that yeah yeah well I was really moving actually um I think that's you're right like I think even when I look back at it I'm like wow this

is a place where people join this community to be socially connected and to care for a creature um and it's not about shooting heads it's not about battle pass monetization and so I really enjoy that because I think it's something like you said it's the core identity of like what the franchise is it's the core fantasy of what the player is um and you know even though throughout the many many generations of Neopets managerial hands it's business strategies right like that's something that seems to have have mostly stayed um and so Dominic this was such a pleasure um thank you for coming on um I'm really excited about like what potentially could happen for for Neopets and it's amazing that uh you know you're leading this uh new change and New Frontier for for Neopets and so thank you for coming on um and we usually conclude our Episode by asking um our guest members you know if anybody in the audience is interested in reaching out to you uh yeah uh you to connect with uh I mean first of all thanks for having me Alex

this is a very enjoyable conversation I'm always like very excited to talk about Neopets uh so it's it's great to be here uh so yeah feel free to uh so I'm I'm very open like feel free to find me on like linkoln on on Facebook on Instagram uh I mean there's a lot more channels uh but these are have like the three M channels that I respond to uh so yeah happy to happy to answer any questions that U anyone might have or they can log in and get a pet and find you in the world of that's for sure um all right as always friends um if you have feedback or ideas please hit me up at Alexandra ann. we are always open um and with that that's concluding our episode so bye if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a the festar review and if you want to reach out or provide feedback shoot us a note at podcast nov.

or find us on Twitter and Linkedin plus if you want to learn more about what novic has to offer make sure to check out our website www.nic.edu and advisory Services again that is www.nic.edu listening and we'll catch you in the next episode