PlayStation Portal / Ubisoft Gets Microsoft’s Streaming Rights / NetEase Expansion

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yearly if you are interested in learning how dive can Unleash the Power of data in your game's business and save money doing so simply head to dive.games or check out the details in the show notes and with that let's jump into the episode hello everyone welcome to another novik Roundtable I'm your host Devin Becker and with me I have great panelists as always as as you all know the ever Lively Aaron Bush here we got Matt Dion and Anil Das Gupta here how you guys doing today hey awesome sweet we good it's a good way to do it cool cool lots of good stuff going on we got some great topics today of course Baldur's Gate uh three we're going to touch on that a little bit more a little follow-up on when we discussed before dark and darker re-emerging uh see limited update and free fires uh free fall all right you say that one uh yourself there Aaron tongue twister for us uh Playstation portal update that should be interesting and uh Ubisoft and a blizzard Activision deal uh around streaming should be pretty interesting

as well and then netease pushing West so uh why don't we actually just get right into the Baldur's Gate update what's going on with that sure well it's everyone's favorite current darling game it's great to see the Resurgence and I think something a lot of us were asking is how much has this game actually sold how's it done but we got our answer through a pretty unlikely Source it was actually announced in Belgium giving out steam sales numbers and it's been it's sold over 5 million copies 5.2 million copies I think that's an incredible achievement for a game that hadn't been released for a long time and you deal with spot quiz for the panel how many copies do you think Bowser's Gates who sold lifetime yeah it was two million so it's already done you know two and a half times that amount that's pretty good I guess you're in a Nostalgia effect so yeah just what I think it's really good to touch and I know this has been talked about in a previous panel but amazing to see a game is really kind of lean on the micro transactions just good old-fashioned gameplay a game that I'm very uh fond of

especially the older ones playing it in my youth great to see it dude and I wonder how will it do because this is just on PC this is not even taken into account console sales of which the inevitable ports are coming out so where do we think this roller coaster will end or is it up only for about Escape yeah doesn't the PlayStation version come out in another you know couple of weeks here it hasn't even gone live yet exactly exactly how many of you who played it apps no oh yeah I mean Neil obviously has it right right I I I actually happened but I have observed someone watching which is basically the Boomer equivalent of playing games these days I don't know if this happens to you the real life which yeah and then I actually I watched my flatmate player actually which is like a bit different so you get to like ask and have more interaction kind of thing um it looks cool I just know that like just so you know first game ever worked on the industry was also a DND game so I have a little bit of flashbacks and PTSD because when you've got these massive books of how the system Mechanics Work

it's pretty in depth it's really built on it looks cool though I got to say it's really fun as someone who's like I don't know 20 to 30 hours into it um I'm really enjoying it I'm not a DND person at all I like understand the rules at a sort of fundamental level but I'm not I don't really play Dungeons and Dragons and I'm very much enjoying this game it's like a slower Pace than most RPGs which I think is by Design um but just incredible like freedom of choice in in every interaction and how you approach them and what you do with your characters and how you role play it's it's really an incredible achievement yeah I was thinking about um what do what does Larry in studios do next like where do they go from here like we've talked about this before with other Studios like you know after Eldon rang uh like where does like that studio go like once you've reached the Pinnacle um and so I was you know reading through a few interviews and obviously it bothers grade three still has legs as we

said it's not on Playstation yet um but they haven't said anything about DLCs but honestly like it wouldn't surprise me given the success they hated it in the past before it was cool I was gonna say like about this day one and on PC you used to have expansion so you know they would make an expansion about a year after the original one so you can bet that's coming for sure yeah so so that'll come so this game still has lags uh but what was interesting from the interviews I read is that I think what the studio is doing next is not actually another game of this kind of scope again that's gonna take you know six years to pull off I think what they're gonna try to do is um games that are smaller in scope which will still probably be you know pretty pretty big but work on you know more than one at a time so you know they can also de-risk the business a bit make it slightly less lumpy we'll see what that actually turns into I'm not I'm not even sure how much they have fully planned out what's next um given they're in the

the heat of right now um but anyways I was just kind of you're interesting to see and I am always curious where these companies on the top how they choose to kind of take that as an evolution step to to kind of position themselves for a different even larger future to come yeah I'm kind of curious if it will bring back any other d d uh like worlds and things like that because there's a ton of different worlds like Raven Loft and I mean no one's really done like a good Dark Sun for example there's there's so many properties they could bring back uh that could use I imagine that engine right because it's not like the rules get all that different in the other uh modules or worlds or whatever like they want to call it at this point so I imagine there's an opportunity even if if they're not the ones to do it to license it out to Wizards of the Coast to have another company do some stuff maybe maybe they don't do as good a job or anything but they you know could be an opportunity to reuse that engine if they've because it's not easy to execute on like a tabletop role-playing system into a crpg like it's been done a lot but like it's difficult to do right like

because you have to adapt uh something that we're like half of it's your imagination the other half's like deciding which rules to apply and all that and apply it to a consistent real-time like thing that you're doing uh obviously you know there's a long history of it but DOD is not like sat still either it's changed pretty dramatically over the years many times to the point where there's like Forks off of older editions and things like that into other games and uh so I mean putting opportunity I think for them to revisit some of the other franchises and it's been interesting to see a lot of classic crpgs come back like remember there was a wasteland two and three that got kickstarted and then Shadow run uh then of course we had cyberpunk like it seems like the old tabletop RPGs and crpgs are getting new life again like I even just looking I was like the Denver winter nights get a second life oh yeah there was a release in 2018 and like uh it I think it's just it's people our age right like that played these games I remember playing torment managed to get a comeback like uh so it's just like it is a re-release which one I swing there was

excited yeah there was a couple of these games that say yeah if it hasn't yet it will at this point right especi there for the success of this game it's it's really interesting to like I'd almost like put money on like the next property like I feel like the only one that really didn't succeed was cyberpunk and even then it probably did to an extent monetarily like obviously like they you know had to give a lot of refunds and things like that but it still sold a lot prior to that right and it just helped the franchise like still be really interesting to a lot of people and it probably helped to help the tabletop RPG a lot even if it didn't help the the company that much uh you know it's a lot of opportunity here that I think it's kind of interesting also I noticed when I was looking at the numbers for Baldur's Gate it Peaks hard on Sundays for some reason like everyone's I mean not for some reason I think it's pretty obvious why but that's like at this point do we like to make that like uh weekly Baldur's Gate three day everyone just hits it on Sundays you can just see it like it's like a huge gain on Sundays and then a drop on Mondays like no one's calling in sick Monday but every Sunday people are hitting Ballers get three solid I've noticed it's kind of dropped

off a bit more this time so I'm curious to see if we get that Resurgence or if it's just like everyone transitioning over to PlayStation at that point but uh it'll I don't know it'll be really interesting to see like you guys said what uh you know if this has legs what uh comes next for the company do they just even like license this stuff out or make something smaller that's DND I don't know a lot of good opportunity but uh medieval stuff trying to make a comeback dark and darker great transition great segue so um dark and darker uh has re-emerged uh for those of you who are not familiar with this game it is sort of a medieval fantasy themed uh first person shooter it's like an extraction shooter though um so you know your typical swords and axes and magic and and these sort of medieval tropes rather than your standard like military simulator but it's an extraction shooter it's it's quite hardcore uh very difficult and this is a game that came out earlier this year like February and and

kind of had a a moment there where it was quite popular with streamers and it kind of took off this was like um I don't know if you can even call it early access at that point it was uh still quite early still quite rough um but anyways this this game was created by a group called iron mace which is a group of Korean developers um and where it sort of picked up a bit of controversy um is that it was taken down um it well it received a dmca notice uh from Nexon so the developers of iron mace used to work at Nexon I guess they were accused of stealing some assets or or something else from uh from Nexon and so Nexon uh when after that went after this game and this company legally and got it removed from Steam uh and so the news recently as of a couple weeks ago was that the game has re-emerged um after a number of challenges uh like that so a brief timeline here so I mentioned

it came out in February in March it was delisted with the dmca notice there was also a raid on their headquarters uh by the police in Korea um and after that they tried to launch a GoFundMe campaign to continue to fund development they continued to distribute um dark and darker through like Discord and BitTorrent um so they're like really uh scrapping inclined trying to figure out how can we get this game out to people how can we keep building this thing um recently the lawsuit has now been dismissed in the U.S but only because the judge determined this would be better heard in Korea this is not really a U.S case so it's still kind of an active ongoing dispute and you cannot play the game in Korea um but now you can play it uh elsewhere so the game has re-emerged and it was um distributed directly through iron mace they've got their own launcher that they've uh released called uh blacksmith I think and then you can also get it

through some um Indie Gaming website called chaff games um now I had never heard of chaff games before a lot of the people who followed this game had never heard of it and so that was one thing that kind of caused some question marks let's say people are like you know what is this Starfire why can't we just go to any of the other ones and then there was all sorts of problems when they released this so they made a big announcement on Twitter oh we're back come check it out we're in Early Access and then players couldn't get it they couldn't download the game they couldn't buy it um whether it was through directly through iron mace or through chaff games they were having transactions failed it was just like too much volume too much interest I guess a lot of technical difficulties um so that was one sort of major hurdle um and you know I guess it's not surprising that you know first they were doing BitTorrent and stuff like that now they've got some unknown website it just has this air of mystery around it and also like if you're not used to like these sort of weird back channels of gaming um it's uh maybe concerning like am I

gonna get my game am I like sending my money to a scam I don't know it's just it's just weird and then lately um they've had a bunch of issues now you know they've gotten over the access issues but now they've got a bunch of issues with cheaters and hackers in the game so it's been a bumpy road for dark and darker um but I think it's like uh a fascinating case study um in a couple of regards uh uh one is that it's an extraction shooter and we've yet to see one like really take off they're all quite hardcore um this one seems to have built up a following but the the second aspect that's interesting is like how do you how do you distribute your game uh how do you um you know continue to fund this like effort um when you're faced with challenges setting aside you know how valid they are or not you're you're facing these challenges from incumbents that are like we don't want you to build this game we're going to go after you in court um and so they're having to take all these sort of strange paths to the

public to get their game out there so anyways I just think it's a really interesting case study and I'll be curious to see how it unfolds because it's still in Early Access they're still making the game what do you all make of this first of all has anyone here played the game have you had a chance to try it out yeah and it's uh it is still pretty hardcore it's it's a very like it's one of those games where if you play by yourself you're you're going to get housed pretty much uh it seemed like a very team oriented okay which uh surprises because like a lot of those extraction Shooters aren't so maybe that was part of the appeal as well I gotta imagine though like uh I mean how do you how do you accuse another company of stealing generic medieval assets like they could have gone from anywhere at that point I don't know presumably they've they've got some data to support their claims um you know something like half of the development team of iron mace used to be at Nexon on this particular project that was uh supposedly like a I don't know a clone or a knockoff or whatever so I don't know there is some smoke

there I don't know how how much Merit there is the accusations but um presumably Nexon has some reason to pursue this yeah I mean we're either us or UK Centric so I'm curious what Korean law is like in terms of that like I mean we kind of have some idea in general those kinds of things but I imagine there's probably some some important differences and with the U.S court kind of kicking it over to Korea I gotta imagine like the you know the any of those quirks could come out in the situation uh plus we don't know what like things are like for all we know like Nexon has tons of poll in the legal system over there or doesn't right uh that could be a big factor uh in the situations because nexon's not exactly a small company definitely a renegade game though so I'm interested to see like I think this will make a fun Story down the road if it succeeds and you'll be like hey remember when dark and darker like had to go super Renegade and like put it on BitTorrent and like uh have people buy from Shady websites and like send Bitcoin practically to like buy the game like I think that's why it's so interesting to me because they are kind

of like taking this alternative route to the market let's say I can't imagine that looks favor favorably to the court though like I I mean again I don't know what Korean law is like so it might not matter but like I I feel like in U.S courts you did something like that the judge would be like dude what are you doing like uh content of Court kind of thing or something like that I mean again I'm not a lawyer but it seems like one of those things where that could get you into trouble where you just look like you're openly trying to defy that dmca okay like I mean against the dmca that does that go Global does that affect uh Korea and stuff as well like through the like Global um copyright agreements or is that U.S Centric I I don't know but I think it's more related to like the distribution through Steam specifically being a us-based company um so what I read is that the the sort of availability of this game on Steam is now in valve's hands um at least from Iron mace's perspective like they think it's sort of all sorted out and while they can't distribute it

in Korea because of the ongoing legal disputes they view it as like well the ball is in valves Court we're waiting on them to kind of put our game back up who knows how true that is or not but that's that's been the public stance from Iron mace maybe given the pattern things we'll see it on Epic suddenly I was gonna say I think one issue here is there's a bit of a non-compete thing going on here as well some of the people that left nexons to work on this game have started working on the game faster than their clothes are doing that is more likely to get people but I would imagine it would just be a fine rather than I cannot see Nixon in any Court being able to pull the the game down because of it well the question was uh like was Nexon already developing something like that that's what I'd heard originally and I don't know how much truth there was yeah yeah that so like if that was the case where it's like hey like they were developing this and then they moved out to like and then just did it independently that seems like kind of a lot more open and shut right if they can prove that um like if they were like hey we're working on medieval extraction shooter with these assets you know Etc I mean do

we call it a extraction slasher at that point if it's just swords it's uh I mean there is crossbows and stuff but yeah there's projectiles there's magic there's uh stuff like that yeah it's it'll be interesting though like at the very least I'm kind of surprised we haven't seen some copycats uh try and get traction off them being off the market and just quickly spinning up something uh even if it's not good right and just trying to be like the dark darker and trying to you know just get on Steam and get something out there as fast as they can before it gets pulled down um because you know that situation if Nexon is the one like blocking darker darker like they're not going to be able to come after you for for copying that name again and like putting on the right it's that kind of situation where I think they're kind of stuck with their battle so I will see if it gets updated uh I mean it sucks to have to go through Shady stuff it would definitely be better if it goes through Steam but at the same time like uh you know if it's something that's gonna get pulled down again all of a sudden um I gotta wonder where the servers are running as well for that because it's a multiplayer game right so the servers

are going to be running somewhere um and if it's a situation where they're running in Korea obviously that's a big risk if they're running outside of that in a place that isn't really kind of you know outside of Korea's jurisdiction or isn't being run there I mean it sounds like given the sort of shady sites they were using and stuff there's a good chance this is like Pirate Bay kind of territory when it comes to the servers like running out of the Netherlands or something but uh I guess we'll see but uh speaking of overseas C limited uh and was it free fires free fall yeah so C limited is a company we haven't talked about in a long time but what's going on right now is pretty interesting so I thought it deserves a quick update and as a reminder C limited is one of the biggest and most important companies in southeast um Asia it owns Garena which most notably publishes free fire but it's also a publisher for other companies that want exposure in the region like it publishes Call of Duty mobile for instance most notably though it was a

publisher for Riot but in what was big news after 12 years Riot decided to break up that publishing relationship with Garena which ended in January of this year so lots of moving pieces on the gaming front but in the past few days the company reported its earnings and I'll skip 95 of of those details but the main number I want to point out is that their Digital entertainment business which is majority free fire is down 41 um year over year and if you look at the numbers last year it was also down then too so um we published a deep dive into free fire last year um that actually did a pretty great job breaking down the games challenges and why it's been in Decline both for regulatory reasons like it got kicked out of India uh but also for you know game design monetization and just localization reasons too as it's you know trying to serve people in Latin America and

Southeast Asia Etc um so it's it's also worth noting that as you know one free fire declines two Garena loses its large partnership with Riot and three also seemingly gave up on M A because it spun out Phoenix Labs which it had Acquired and that company's behind dauntless um it spun them out earlier this year as all of that happens it kind of looks like garina as a rising force in games is uh that story is very challenged right now uh maybe it's over I don't know but it's not like a great um look or time period for them um right now and the second tangential thing I want to point out um that kind of underlies all of this is how critical a of a role Garena has played in the rise of C limited as a whole which is a 20 billion dollar company today and you know that's a big company but it actually hit a 200

billion dollar market cap and late 2021 and Garena was super important because it gush cash because of free fire and those billions of dollars in proceeds were heavily reinvested primarily to subsidize shoppee which became the largest e-commerce player in Southeast Asia and so this games business plus the the general coveted Tailwinds and cheap money at the time was uniquely the backbone of perhaps the most important scaling business in that entire growing region but then the world changed economics became more grounded again and C limited has since had a really hard time adapting Garena has uh you know Green is taking a step back changed the profitability picture and the reinvestment potential of the entire business um plus previously raised capital from public markets was used to invest super aggressively into Global e-commerce expansion like into Europe and Latin

America and not just like losing the kind of the pure focus on southeast Asia but now that the profit engine has changed and money is more expensive to raise the entire business is resetting they're slashing their marketing they're raising fees all that hurts user growth and retention and now they're finally announcing that it will invest in fulfillment in Southeast Asia in a big way like Amazon did many years ago and like to see limited should have done many years ago um so it's finally refocusing on its core region and its most important business and all of that is sort sort of like aside from gaming obviously um but it's all a piece of the same puzzle here but I guess all in all to me this is such a fascinating story of a rising Global games publisher um that kind of got caught up in serving a larger purpose than games primarily e-commerce but some other stuff and now it's just getting pummeled as the entire business around it navigates a new

economic world and management focuses on e-commerce largely instead of gaming and as you know it doesn't really look like free fire is going to make any type of notable comeback and so it just makes me wonder what happens to Garena next and honestly I don't know but my guess is that um you know at least for a while this is what we see right now it's probably not going to be anything special or find an incredible upward trajectory again for quite some time um which is kind of sad and maybe even now I could kind of Envision it getting spun out or sold one day so I don't know but it's so fascinating story all around that we haven't hit on so I just kind of wanted to to bring that update back up boy do you think that's just the case of just running too hot for example some companies they were just like so spectacularly successful it's impossible to maintain that impossible and this is more of a regression to the mean because kind of global causes and they're just

the result of that I agree with what what you suggested there by the way I could see either the spin hour again so it just felt like it was as I say unsustainable or do you think it is something that they can learn less and so and they could have doubled them on their position I think it's both I mean I definitely do think you know the the era of cheap money and just like you know growth stocks being valued at super high multiples um you know some of that was bubbly or frothy and sea limited was absolutely caught up in that um and if anything I mean it used some of that to its advantage to be able to raise money at you know favorable terms but I think where they did strategically fall short was and how in part how they used the money that they raised by spreading themselves too thin by chasing too many projects and chasing too many corners of the world to grow into um so for example like you know they they basically chose to have like a capital light this is sort of aside from gaming but quickly like they chose to

have a capital light model for growing into e-commerce instead of just building fulfillment centers uh like in their core region and so now you know three four years later than they should have they're now finally starting to build that out and if they had done that sooner maybe it would have been slower growth but it would have been more sustainable um competitive advantages wouldn't have to make all the crazy changes they're doing right now to uh cutting user acquisition and raising fees and all that kind of thing but on the gaming side I mean they kind of had all of their eggs in one basket with free fire and I think they just have had a really hard time following it up and I don't even know if they've really tried their best to follow it up to be honest because they've been so focused on e-commerce and just like these other sides of the business and they've really just looked at gaming as like a profit Center to subsidize everything else they have as I mentioned they made that one acquisition of Phoenix Labs which made

dauntless but that never really made sense and they kind of gave in eventually and just spun it back out um Garena has had troubles like when you lose Riot as like your primary like pillar of why you were able to have that publishing business in the first place that's really hard to come back from and again I think some of that probably could have been better if they were more focused on like truly being their best in gaming instead of doing all these other things so I think the answer is is a mix but I don't think that focus is changing like I'm sure there absolutely are people in the business that care a lot about gaming but if management is still you know focusing primarily on other things it's just going to be hard for this business to get the resources and priority it deserves to if it really wants to become like the next big gaming publisher you know gaming company um out there I think did you read uh uh yoast's take on on C I think he was

making the case that like um there was a connection to a broader decline in the sort of region like southeast Asia as sort of a you know a consumer region and decline in that like do you do you think that's part of the story I know you said it's sort of like probably multiple factors here but um what do you think what do you think about that sort of aspect of it I mean maybe a little bit and in terms of just kind of the same mean reversion that you know has probably affected like all e-commerce companies around the world um but in terms of the gaming side not really I mean like Battle Royale peaked a while ago free fire was a phenomenon um and it's face much bigger hurdles than just southeast Asia right that was that was just like a piece of their business and they actually still make most of their money from North America I think even though it's a small percentage of download so um so yeah I'm sure it's part of it but

it's definitely not the core if only driver here I'd be curious if there's if you know any Talent bleed because it's like one of those things where if there was some good talent that was like core there seeing where they go would be like maybe a good indicator of you know some other things that could grow in the in the process or just seeing a lot of them leaving the ship would be like okay well maybe green free fire is just done those kinds of things I think are like helpful indicators if you know at all if there's been any Talent bleed like that yeah don't think it's done I just think probably under the current structure the game's business is just going to be suffocated and probably can't live up to its full potential um unless it were spun out in some way as much is there any potential they're working on another game they just haven't announced yet and then they're kind of like letting uh green and free fire be a little bit more on coasting mode wouldn't surprise me but I haven't heard of anything definitely stuff to keep an eye on like you said we haven't talked about them in a while but maybe maybe they'll do something that'll give us a reason to uh

to dig right back into the the future here or maybe one of those ones that just kind of Fades out over time and you know had a big one hit wonder kind of thing and moves into fulfillment apparently yeah warehouses right from a battle royale to a uh Warehouse simulator it's just it's yeah quite a transition but I mean yeah it gets it goes to show what happens if you are trying to do too much at once uh although you know companies like 10 cents seem to do pretty fine with putting their their eggs in a lot of baskets so but uh speaking of uh trying a lot of random things here PlayStation portal get an update on that for us yeah so I'll keep this one much briefer so we knew that Sony was working on a portable device for cloud streaming and we just got more information about it this is pretty hot off the press as our time of recording it's 200 it's called the PlayStation portal and you know jokingly it's not the PlayStation Portable anymore because it's not actually that portable um and so previously when we have talked

about this in the past I was open-minded to it being somewhat successful because people like to play on handheld um but I'm going to increase my skepticism now as I know Anil was rightly skeptical from from the very beginning of of our conversations on this but this is because Sony made the decision for the device to only enable local streaming from a PS5 device through a home Wi-Fi network essentially and it's a bit baffling to me that the that PlayStation has their PlayStation Plus premium Cloud streaming service as part of their subscription tiers and that's actually not going to be enabled on their Cloud streaming handheld um which would allow people to play games on just elsewhere like off of their home Wi-Fi network and on company servers instead of really just kind of being streamed from your

console and so I think they're kind of shooting themselves in the foot here to be honest and it's definitely not the kind of thing that that many people would want as compared to the alternative and to be fair it probably is for justifiable reasons um like ensuring the play experiences quality and if it if they were leaning in another Direction maybe there would be many more issues with the play experience that they want to avoid which is understandable uh but whatever the case is definitely going to limit the attach rate here some people will still want it just to be able to play portable at home and you know lie on the couch or the bed and you know not have to be glued to a TV so it still could be something to that maybe it'll do slightly better and attach rate compared to like the psvr but I don't think this is going to be anything special from what we've seen so far and this is the first iteration of this kind of device so it'll probably they want to level it up and get better in the future but as for where we are

right now the PlayStation portal is baffling a lot of people and as a result probably not going to be the the biggest seller that it could be sounds like kind of a why does it exist sort of thing like where like it has use cases but it doesn't sound like it's something they're all in on or wanting to like make a some kind of pillar of their future stuff and it's like you know after all the effort they put into the PSP and the Vita and the Innovations they tried to do there this just feels like a a side project that someone pushed out and you know maybe they don't even like talk to the other divisions to make this into something bigger but with such like a big price point like why do you think this even exists I mean you've got steam deck you've got all these other things uh you can even just do the steam link from your phone like you don't even need an actual dedicated device for it uh I mean Sony can do the same thing like they could just you could have a control on your phone hook to your PS I mean I mean don't they

already have streaming stuff like that where what is the purpose of this device you think in the ecosystem well this this kind of play is quite common from them though they've done this kind of like random Hardware stuff all over the place right Magic High they had this sort of we competitor with the joysticks and things like this I would even argue that VR is the same I think there are some consistencies of Sony like this is still a very premium luxury product in the sense that you will be able to have the authentic experience like you'll be able to play 60 frames per second PS5 game yes it is limited to your home but in terms of the experience and the quality it will I would imagine it will actually be better than a steam deck because it's going to be you know Cutting Edge PS5 topspan Graphics so there's something to be said there I can't under explain to you the reasoning behind it other than it does feel that they do do this quite commonly maybe it's something that they do like to try things out every now and again before they want to fully commit to it anyway but you always get this if it's not this there will be some other random thing

that Sony tries again in like Euros or something they do still have you know we know them best maybe from the PlayStation but they do a lot more Hardware than just that even if you can see this one like they're pushing it not just the device itself but like their their earpods that work through the system as well and home Cinema almost it's touching a little bit or on those kind of channels too so but it's pretty like they're technically when they show it off perhaps that's that's I mean to me it feels a bit similar to where that Apple were doing it with you know their VR thing as well you're never really expecting it to be a huge seller but they want to establish a luxury range see if it goes anywhere and then they might go Mass Market they're after but they don't really expect it to I I can't imagine that they have some magical Tech that defies all the problems with like home Wi-Fi and things like that like there's people who can't even go two rooms on their Wi-Fi because of all the materials and houses there's no way this is going to be a premium experience I mean unless they're using some other new technology that's like straight from the PlayStation to the device that has nothing to do with any of that other

stuff I I just can't see how they're going to be able to guarantee that premium experience you're trying to talk about 60 frames a second across a house uh and if you're talking about a luxury item it's not going to be a small house you know no one's living in a shack spending money on this like this is for people that have multiple rooms that are too far from the PlayStation to play it like you know their golden bathroom you know 10 floors away is not going to be able to play this yeah we'll see I think it's really just a bet on where they think the industry is heading or just what will be possible in the future kind of same as with VR and this is like a stepping stone to ensure that they're in the game and that they're investing in r d and that they will be ready and they'll have learned from their experience and be leveled up by the time something like this is potentially possible to be done at a greater scale in in the future personally I'm pretty bullish on like kind of a re-emergence of handheld gaming and just um you know whether it's kind of a

support accessory to a primary console or even like a replacement in some ways like a steam deck is I think that we will see a re-emergence over time and this is going to be like a pretty important Avenue for it it'll just take time to to play out and you know it's some of it is dependent on things that are outside of their control like home Wi-Fi networks right and latency issues and so you know there could be some hiccups and headwinds along along the path and it takes a while to take off but same with VR but this ensures they're they're in the game and we'll be learning along the way yeah I mean I guess in those regards right like it's almost like competing with the switch or the steam deck ones that are meant to be like a a bigger experience taken with you in that situation where and in that sense I feel like Nintendo kind of beat them to that punch then so it's like they're playing catch up in a way there because they they never really like were able to hold on to their handhelds that they did put out long enough to get like serious like Game Boy level traction so

I guess it makes sense like you said if they're just trying to like keep their their toe in the door but I mean in terms of like streaming people really trying to like you know make things work even if it's you know maybe not doing what they want Ubisoft trying to do some stuff here with Activision Blizzard Anil wow this I would ask myself is this you know another round table unless Aaron Bush says something about Microsoft and exhibition it has to happen exactly so so I didn't want to disappoint him enough to talk about him but this story continues to develop in crazy and crazy turns so what happened this week this topic is about Ubisoft what's happened to do with Activision Blizzard so what's happened is that Ubisoft plus is now going to be streaming and they they have the right to the Activision back catalog and all future games as well on their service and it's pretty funny if you read their press statement they even start with yes you read that right Activision Blizzard games coming to Ubisoft so they have an

agreement which will give Ubisoft Cloud streaming rights to games like Call of Duty more come into effect upon the completion of micro acquisition of Activision business which is interesting the agreement includes a complete state of current Activision Blizzard games as well as all of their new titles launching in the 15 years after the closing 15 years uh acquisition of the acquisition and the games will land on Ubisoft while also allowing Ubisoft to license them to cloud game Cloud came come to the service providers or console maker so quite a lot to get your head around I got to be honest with you I didn't even know there was an Ubisoft plus before I read this news announcement so that was pretty big deal for me um and then finding out about it and uh I I well I kind of know why this is trying to happen but I I rather sort of just pass it all straight out there because that is a big deal why would they do this what's the benefit for who's it servicing where is Ubisoft come from all of a sudden the plot thickets it's just hilarious to me that Ubisoft could potentially be the savior of the

Activision Microsoft deal in some way like who would have guessed that probably not a single person um on the world so it just cracks me up but you know the purpose of the deal is to give the CMA one last final major concession so that they approve the acquisition and that's likely going to happen now mainly because the CMA is the final holdout and what's interesting to me um about this is that Ubisoft gets the rights to decide what to do with Activision's cloud gaming assets um the most important of which is obviously future Call of Duty games and everything of well likely of course land on Ubisoft plus not in any exclusive capacity but it means that Ubisoft gets to determine how to sell the rights and naturally Ubisoft being in the driver's seat and paying a fee for it has different incentives than if Microsoft were to hold the rights themselves so I think that's what we'll probably sway the the CMA if I had to guess but but here's

what this change is previously Microsoft was making agreements with as many cloud gaming providers as possible to allow them to sell Call of Duty as Standalone games what this deal enables Ubisoft to do differently is that it can now strike deals that enable different business models it can sell the rights to cloud gaming companies including Xbox themselves and anyone else that also extend to subscription rights so even though this deal is centered around cloud gaming which is overrated we've covered that especially for high twitch games like Call of Duty it enables the possibility for Call of Duty plus whatever else Activision creates in the future to be accessible in subscription form that's not exclusive to Game Pass and that concession on Microsoft's part allowing its most important franchise to not be exclusive in subscription form is a big deal in my opinion especially because the term is 15 years long and

genuinely who knows how that side of the market will be different 10 to 15 years from now right so and the large scheme of things it is a fairly small concession um and in reality a vast vast majority of Call of Duty players will not choose to play on third party Cloud subscriptions but for The Regulators who are maniacally focused on cloud gaming it is a big concession and it should be the final push to get over the finish line so that's why I get it through in the UK for sure that it must have been done for that reason can I ask was was there any language around um like the timing of access to these titles for for Ubisoft so like do they get Call of Duty at launch or do they get it you know some delay after it comes out because like it's great to have it for 15 years um I guess the flip side of that is Call of Duty doesn't necessarily have a ton of staying power when it gets released every year like I don't go back and play Madden 21 when I have Madden 23 uh I

think Call of Duty not exactly the same but they they're releasing a new product every year and Shifting the audience to the new iteration um I don't know I'm just kidding it doesn't mention um sort of day and day on that so I suppose you could interpret that as being um slightly you know ambiguous but I I take from a language that it would be available on launch title because it does say launch of them Titans but I get what you're saying is they could do like the console exclusive where yeah sure you do get Call of Duty but you get six months exclusive on the game Parts but I believe that what it is is that yeah it's just to get around the red tape right so they can now say that well we don't own the rights of it those rights so actually belong to Ubisoft yes they do actually happen to pay us for a game license which just so happens to be the same amount of money we pay for their their streaming but you know we don't own the rights to it therefore it's not anti-competitive therefore let the deal go through um yeah I find it hilarious

like that was definitely not on my 2023 bingo card you would have got high points for Ubisoft saves uh Microsoft Activision deal and going through and what I want to ask though is that well that is so that's happened what does that mean does that mean that we will see Ubisoft stuff come part of the gaming pass or being merged in some way like it seems like a very I didn't really think those two companies I wouldn't say they were antagonistic against one another but I didn't really have them down as being you know great buddies or to help one out I mean that's a huge favor to be able to help well they've had a variety of deals with the streaming services that kind of vary right so like uh stadia they had one kind of deal with uh then like they have a different one with Luna where they they're their own channel stuff like that so they seem to make kind of different deals with different streaming services in terms of like do you have to have Ubisoft off plus to do it or is it just like stuff that's like part of the past itself most of the time they seem to lean towards if you want to play the Ubisoft games you have to have Ubisoft Plus subscription as part of it or buy the games

individually like with stadia where they was like you could buy them individually but if you have like there was a point where I did that with Stadium where it was like cheaper for me when when Siege came out to play it with the Ubisoft Plus for 15 a month then to spend a bunch of money to buy the game again on there like and and also to uh unlock all the operators and things like that so like sometimes there are times where it makes sense especially when they put their like brand new day one releases on Ubisoft plus stuff but it depends on like which platform you can play that on so uh it'll be interesting to see if they like do it at maybe a different deal for Microsoft because like you guys said they're in the driver's seat on Microsoft that if Microsoft's like kind of being a jerk about it they'd be like well you know I don't know if our games day one are on Game Pass you know yeah there could be some quid pro quo relationship that goes on here Activision games on Ubisoft plus some Ubisoft games on on Game Pass I don't know I mean honestly I think the Ubisoft plus part of this is just kind of like a footnote like talking seriously about

Ubisoft plus like being a competitor and the subscription Market is like talking about Paramount plus competing with Netflix seriously like it just like it doesn't really make sense like for Ubisoft to compete more in subscription like they're just gonna have to be part of a bigger company or like figure figure something else out um but it is it is interesting but my my more like tin foil hat speculation or extrapolation here it just kind of hinges on the fact of how long term this this deal is and how um it's kind of important to maybe not you know take the current state of the games industry as like the analytical lens of like what this could mean because 10 to 15 years from now the state of cloud gaming of the ecosystem who is even involved could be totally different so on one hand yeah maybe at some point Sony you know Ubisoft sells Sony Call of Duty cloud gaming streaming

rights and it's part of their bundle and that doesn't differentiate from Game Pass as much but the one like uh more potentially long shot example is like what if they sold to um like Netflix because we know that Netflix you know they have a larger audience space than anyone they're gonna have as good of tech as anyone they're you know approaching games they have an enormous budget for licensing and originals and would it really be that surprising 10 years from now to see and this kind of set up to see like Ubisoft sell Call of Duty Activision Cloud streaming rights to someone like Netflix and with Netflix's distribution just be able to like actually have a pretty Monumental Twist on like how I came how franchise like Call of Duty is consumed I don't know maybe that's crazy talk it's hard to say it but just because like this deal is so long term

it like it opens up a potential can of worms down the line for some funky things to potentially happen when Microsoft is not in the driver's seat of how these how these uh you know deals are made and that's interesting to me it could bite Game Pass um down down the line maybe not in a huge way but in some funky ways that we can't easily predict right now and that's that's interesting to me when you're talking about the time duration but the question is is there any way is there any like Clauses that allow them to break that deal so let's say they do this to get things through then a year or two from now they were actually already planning on Breaking the deal through some kind of thing that you know allows them to do that if it's if it's if it's a regulatory related deal that the entire acquisition hinges on it I doubt it'll probably be more Ironclad I would guess but yeah I don't know and you guys keep talking about Call of Duty but I got a big question about blizzard because like Blizzard's part of this

they're not on Game Pass right now you don't play Dabble before I know you can't play World of Warcraft on there or OverWatch too even or like none of that stuff's on there so the question is does then Ubisoft finally go now you're gonna put that stuff on streaming and you're gonna let people play it day one on there like that could be a pretty big deal I mean I don't know maybe like the relevance isn't there compared to Call of Duty in terms of numbers but obviously the Diablo 4 was a pretty big deal when that came out well that's that's what I think there I think it's it's not like you couldn't do it but the audience is so different right Call of Duty is always one of those games that kind of like even people who don't like games buy that game like your friend that has a PlayStation that only ever buys two games those two games are going to be Call of Duty and either Madden or FIFA depending on right but but dabble's been moving over to console more and more right for example so like this is an opportunity for them to get people to to move over to like trying it out if it's on Game Pass for example or some other would you Devin play Diablo on the streaming software absolutely absolutely

I play Cloud all day long like I I like cloud gaming I have Game Pass ultimate uh I would absolutely do it yeah I I would have been playing Diablo that way and not purchased it had it had that option 100 especially a game like that it's not as twitch as Call of Duty you're clicking a mouse or playing with a controller and to be honest actually the controller uh controls are pretty good in that game so it I think I think it's one of those things where like you know we kind of joke about it but I think it is a play for the future just the long term future when we don't have those silly Wi-Fi problems or like uh you know when the cloud is just like oh yeah everything's in the cloud like obviously like you know this is maybe that 15-year plan is like hoping that by year 15 maybe people will start to hear about Cloud then and until that point people but obviously Microsoft's been bidding a lot on that with game pass but I feel like that's been more towards the subscription model than the game I mean in the cloud side but I don't know I mean we'll see I think it'd be even funnier if they were somehow allowed to buy Ubisoft after this get those rights right back right because we

saw those dire situations right where that's that's where I was going to exactly exactly I don't think they could get away with it given the situation but I don't know anymore yeah you never know new concessions I guess right that was definitely my tin hat you know at that moment you can have these rights but we're gonna buy you tomorrow yeah I don't know but uh it is it is a win for Ubisoft though like long term like having these rights to sell probably doesn't move the needle that much um but we don't really know the terms um but having what is essentially like a very low variable cost thing that just Falls onto your lap that you can sell for a profit at a time when the company is trying to save money and turn out more of a profit um it's a nice little it's a nice little extra thing to have in your back pocket and so I noticed like Ubisoft you know

like the stock reacted favorably to this no one really knows what it means in terms of the specific numbers but good timing for for Ubisoft to to pull this off they kind of win just by hanging around right you know the only other companies of their size that like might have been able to pull this off uh EA they've already sort of capitulated The Game Pass all of their stuff is on Game Pass already um and then uh take two I don't think really has like a you know streaming cloud gaming offering of their own so there's probably a couple others I'm uh forgetting here but Ubisoft you know they have their Ubisoft plus and they kind of just win by I guess also you know being a more of a european-based uh publisher as well um to you know appease The Regulators over there but they just kind of benefit by hanging around here well don't forget they have some expertise in this because like I said they license all these different different deals with different streaming services they have the ability

to kind of run their own catalog side by side with it I mean like I said they have their own dedicated like a subscription to Luna where it's just Ubisoft game so like I think at least on the deal side they are good at managing this stuff whether or not you know they have the subscriber numbers to like back up their success at least they've got like the uh the the making those licensing deals chops kind of thing so I think like for Microsoft it makes sense because you could go like well who's actually been successful at doing this negotiating with all these different cloud services putting their games on multiple ones and actually running that in ways that are favorable to them like that would be Ubisoft I mean there might be some other candidates but I would say like they've been the most prolific I mean they were the ones who helped Pioneer stadia like the original stadia like before it had a name was an Ubisoft game pushed onto the cloud when Google was just testing cloud gaming so like I don't know like obviously I'm I'm in favor of cloud stuff but I do think they were a good choice you certainly could have gone with a worse company and I don't think it's just like they just happen to be the street corner when Microsoft walked out the door I think

it's just like hey you know what you're a pretty good candidate we got to pick someone and like you guys said European company probably doesn't hurt so and we'll see but uh I mean that's going east we've got companies going west as well Netties coming out of uh out of Asia trying to move into our territory here uh yeah so uh Netties I think is an interesting topic to revisit here it has a few parallels to the sea Garena discussion we had earlier um but the headline that prompted This was um Netties has launched a new development studio in Austin Texas and it's being led by uh Rich Vogel who has experience on Ultima and Star Wars Old Republic a lot of sort of classic MMOs other veterans joining him from Bethesda and BioWare um and it less so much about this specific

Studio but like it got me thinking that I've sort of seen a number of announcements like this where netease was opening a new studio or acquiring a studio in the west and so I just I did a little bit of digging and wanted to kind of um uh briefly list off some of the Investments and Studios they've opened up in the last call it three or four years and then we can talk a little bit about like the strategy there um so I just mentioned um this one in Austin Austin called T minus zero entertainment okay so probably uh MMO what they've said is third person online multiplayer action game based on a Sci-Fi IP new Sci-Fi okay that's one there was also Anchor Point Studios earlier this year they're split between Barcelona and Seattle and they're making action adventure titles for both console and PC they're led by the X lead designer of control and Alan Wake Alan Wake 2 um so that's another Another Western Studio split between us and in Europe they've opened an internal studio in

Canada split between Toronto and Montreal called bad brain games working on open world multi-platform title inspired by Cult Cinema mixing elements of Adventure and horror they also acquired Skybox labs in Canada British Columbia they co-developed uh Halo infinite so more of like a third-party studio um and they they're talking about they're going to kind of continue their code Dev work they also now that's all just 2023. going back to last year they acquired um or acquired or opened I'm not sure I think opened a studio called jar of Sparks just across the border in Seattle so if you're keeping track that's the second one in Seattle now um they're they also worked on Halo infinite the the leaders of that studio then um earlier in that year they had a studio that they acquired or started out called Jackalope which is rebranded to Jack elliptic I don't know why but

they're making they're working on another MMO based on the Warhammer IP they're working closely with Games Workshop the purveyors of that IP um and then they also acquired Quantic dream in 2022 from Paris they developed Heavy Rain Detroit become human and they're working on a Star Wars action adventure branching narrative game and that's just up to 2022 they've also done a bunch of smaller investments in studios um they invested in a studio founded by some X CD project devs they've invested in Behavior interactive in Montreal they make dead by daylight they also opened an internal development studio in Montreal so they've got these hubs right um different parts of they've got BC they've got Montreal and Toronto and Canada they've got Seattle they've got Austin they've got a couple others in Western Europe and so they're making this push and sort of what I make of it is these are like AAA PC console projects developers with you know real

pedigree and they're working on um a lot of big scope games MMOs open world action adventure they've got some IPS in there we mentioned Warhammer we mentioned Star Wars um in recent years they've also done like a Harry Potter game they've done a Lord of the Rings game um so you know I guess there's a couple things I wanted to to talk about here like one like what do we make of this strategy uh to go so heavy into to AAA PC console um you know historically they're a very mobile-centric company uh in the the first quarter of this year 72.3 percent of net uses Revenue was from mobile games actually um so you know do we think this is the right move for the company I'll just pause there there's there's more we can talk about but let's just start there like making the shift from Mobile to to AAA PC console what do you all make of this

but that's an interesting one I'm going to sort of slightly deflect your question but listen to it at the same time which is that I was going to say that netease in paid for everything the second dinner who made marble snap which as we know is a particular favorite game of Mr Devin Becker here on on the round just launched on PC make sure to download on Steam well it's interesting that you should mention that right so that could well tie into their strategy that's what I was going to come to next but I was just going to say though that I feel that game has really done well not just maybe commercially could have done better but I would say in terms of critique it's really considered to be probably the best mobile game of the last 12 months so I I I would understand that like coming to your point of why invest so much in Western Studios it could just and particularly triple layers that they want to who brought that kind of talent maybe the bet they're making is that that's the more consistent way to do it just get people who are really proven great track record really back them to the hill and they'll make good stuff so that's where I think that angle was coming from I have to say the PC thing is very interesting thing

right maybe they think though that future growth is going to be happening more there than it is going to be happening on mobile that maybe mobile is more of a closed shop or maybe they see it as that's a good place to start a new IP and once the IP reaches a certain level you move it across these are an interesting company I've seen already that they for example are testing out quite a few extraction Shooters on mobile right now globally they have a lot of downloads but they haven't quite made it to okay this is going to be the next big thing sort of thing but they seem quite experimental and open to trying things so I guess that's what I'm saying is I could see them for example looking to establish new IPS with hit Studios and teams that are proven and then mobile is like a latter down the road I mean it's one of those that I do know people that work with Netties and they sometimes even save some of the studios that they acquired that they laugh when they see their profit projections because it's just like compared to what we make in China oh that's cute with your projected you know revenues for the next 10 years even that

is not even a you know a teardrop in the ocean of what they make and so they are operating on extremely long time scales but I'll hand over to them but that's my initial thought yeah to me it just seems like a diversification play like most of their revenues from China obviously China is very mobile first um they want more revenue from the West they are it's not like they're not making mobile games they they still are investing in that it's just now they're also investing into um AAA console PC which makes sense also just given all of the mobile headwinds we've talked about the past couple years to just want to diversify and get exposure to to other parts of the market um the the part of this that kind of intrigues me more than just like choosing to expand into new platforms is more like the patterns that you start to see in um you know how they're just like how they are choosing to expand in the west

which is that if you look none of the Acquisitions are us-based but also you know if you look at that list you said Matt um pretty much all of the new studio Creations are us-based and that's just totally like a signal of just the geopolitical climate where in general like these big Chinese companies like they're just not going to be able to pull off like Big M A in the west generally but especially in the US right now but they still want access to the market and so they're going to find other ways to do it that um you know don't trigger trigger Regulators as much you don't have to go through all these federal agencies and building Studios from scratch is a way to do that um in some ways it's more risky because you're not buying what you already know works that already has teams that are successful um it also takes longer to play out because you don't get the immediate Revenue instead you're basically signing

up for a bunch of upfront costs and then the revenue will come down the line but if you're right and you do a good job the payoff is potentially larger and so you get potentially larger payoffs while having skirted you know all of those regulatory hurdles potentially and so it's interesting to me and they're doing it in like pretty aggressive full force um because I think they see that getting diversification as quickly as possible given just like the uncertainty of China and specifically um makes a lot of sense and so yeah it's just it'll be interesting to see what this turns into and just like as we look at like the percentage of Revenue or games that are it's like in the US or just in kind of the West more broadly that are China backed in some way it kind of looks like that might increase as a percentage because it's also not just Netties right since doing similar

similar things here um so that'll be an interesting Trend to watch but yeah how they're going about it is what's interesting to me right you raised some interesting points um about the sort of context this is all happening within that we haven't really mentioned I mean the the environment for making games in China has been um let's say in flux like earlier this year they restarted game approvals I think in like April um so that's been sort of uh building up a backlog of new releases in in China just trying to get into that market for internal like domestic and international developers alike um they've also had a bunch of restrictions they put into place on young people playing games um and there's been a general slowdown in the Chinese economy at a high level um and um I don't know it's just interesting context like we mentioned we talked about earlier with Garena losing the rights to distribute Riot games in

Southeast Asia well Nettie's also lost the blizzard rights um to do everything except Diablo Immortal at this point is my understanding um so they're losing some of their presence in PC console domestically to your point around the first diversification Aaron um so yes tencent is also facing these same pressures and I think they're just Ned uses choosing to go about this in a similar but slightly different way um in terms of like establishing new Studios as you say acquiring where they can um and taking a long long view of this I guess my question that I would post back to you all is like how what are the important ways that this differs from similarly acquisitive strategies that we've seen with like a embracer or a still front um where they're just like grabbing up Talent grabbing up IPS and they're maybe struggling to turn it into um you know uh solid projects that are returning that value what do we see as

like the kind of key differences there will they not encounter the same challenges I I don't think there are that many differences to be honest interesting it does feel a little bit like history repeating and stuff I've seen things like this happen already with Netties so they they do it I I just guess to them as per Aaron's point about diversification if the opportunity opportunity cost isn't that great you know it's not that much for them to spend and the return is incredible it's still worth doing um I I do agree there's clearly a a shift that's why again maybe the success of some of those Studios may be making them think that okay it's what it's once we can try it again um but I I wouldn't really expect to see that much different I think that you will still see a lot of these Studios end up closing still having made a great game it just doesn't hit commercially because they're going to have huge expectations with the titles you know and the budget is put there but you know you make one unicorn IP and these Outlets are worth it right that's that's probably how I would see it perhaps I'm naive to think so

yeah I think I disagree a bit I think with like the embracers of the world it's it's much more financial engineering involved and so like we talked about embracer how they grew their revenue of 150x over the past you know a handful of years while this is all the stock price remained flat because they actually didn't create value while doing that like that's probably not going to be as possible in this type of scenario also in the embracer model like when you're just heavily acquisitive you are you're just going to be probably more bloated um and have to unwind more big things there and also uh they're at least from what traditionally has been that model you're just less focused on organic growth and just more on inorganic growth and your growth engine really is about continued Acquisitions and that has fallen apart because it's not really a sustainable way to operate and those companies are struggling but I don't really think that's what net is doing here if anything it's more of like a venture model in a sense where they're taking a bunch of like

like that's more at Ground Zero and some of them probably won't pay off but even a handful of those that do might make up for the rest and and still be pretty profitable you still might have to unwind things not everything's going to be Roi positive um so there aren't differences from that sense but I think from kind of like the bottoms up economics it is different it doesn't mean it's going to work they still have to be good at it but it's a bit bit different I think there's a different angle to consider just looking at the pattern of both stuff that they do and some of the people they're acquiring is is around MMOs and IP in the sense that like those are two areas that they know well working with other people's IP and doing MMOs both their own and like doing so like the Marvel games that they do you know the big MMOs around that they also have ported MMOs like Eve over to Mobile so they know MMOs well and they know working with other people's IP well so like even these Studios that aren't currently working with other people's IP are often people coming from Studios

that have worked on other people's IP so this seems like if they're especially trying to take advantage of like I gotta imagine they made good money with Marvel right and that's not a Chinese IP that's Western IP like situation where it's like hey if we could get access to all these devs and I'm not saying this is like their only reason but it seems like something that they can leverage access to all these devs that that are experienced in working with this IP we can start to broker all these deals with different IP that we know we can make these deals with because they have before and start to actually really develop with existing IP rather than just always trying to build stuff from scratch you know betting on those successes if you're talking about it's like a venture capital thing they're betting on people that they know are successful depending on franchises and IP that they know are successful and they're betting on MMOs which they know work well for long-term retention and things like that if they can get them off the ground especially if there's IP attached to it so it seems like there's like a lot of areas that they know well that they're like leveraging to an extent whether or not that's like their main purpose like that's something they seem to be targeting to an extent and you know as you guys said moving West to do so especially if China doesn't have

IP that they're really able to take advantage of I mean obviously they have the MMO and the mobile market but if that's kind of shutting down and not really like uh like licensing new stuff things like that it does make sense to do this I think the question is like when they buy these though what I want to know is like are they using these Studios as outsourced devs or are they just brokering deals as like a parent company uh like how involved is netease like a game development level with these companies or they just like hey cool keep making games we're just going to be there to like collect money from it from what I've read um and maybe you've heard definitely Anil but um the at least the press releases they'll say like oh the reason we went with netease is because they promised editorial Freedom uh creative freedom I don't know if that's the case for all of them like you know like I mentioned Skybox labs for example was a code Dev shop and they're supposed to be continuing their code Dev work um but you know some of these other ones they've invested in have stated in their press releases at least like hey we

liked Netties because they were hands off keep doing what you're doing Quantum jobs are the same thing basically as well yeah that's the example I was going to give I don't think they're very Hands-On they just do it for the p l yeah it's usually working out for them for the best I mean obviously like Well we'd have to look at all of it like I just wonder if we will come back to to discuss this like an embracer kind of deal with a very different angle to it down the road to say like is this strategy working for them long term when we can see what these companies are doing and whether or not like obviously second dinner was an example of like a new company that was successful but again it was coming from a company that like they knew they were like talented people coming from a game that was pretty successful Hearthstone like trying to do something with an existing IP Marvel so it's like it's not like they're making like blind bets in the dark it sounds like they're you know they're picking their targets pretty smartly I don't know if all of them will pay off but it definitely seems to be like a good strategy we'll see though obviously I don't think they're all going to be Marvel snap type wins but I I would like to see how some of these turn out like it's definitely a situation where you know some money and

some acquisition stuff and maybe even some resources put their way like I do think they probably at least contribute some level of resources and connections could just help these smaller startup ones like actually become more successful with people that are are talented to be able to leverage neteases connections or assets like I think this is actually probably a good thing for some Western devs like like what we saw with with second dinner being able to leverage that to do something that was a little bit of a gamble for them but that they were talented enough to execute on so hopefully that'll be the story like more often than not with these guys and it won't be an Embrace you're kind of like let's just scoop up a bunch of companies and then like try and collect some checks call it a day kind of thing so because that's obviously starting to scale back from bracer so hopefully that will be the situation here but I think judging by Matt you say most of these were like in 2023 I think we're probably gonna have to wait a little bit of time to see whether or not this plan pays off it unless unless they found a way to speed up Game Dev which uh I don't need to have that fast this is going to be a check back in three to five years situation right well hopefully we'll get

a chance to check back at least like six months to a year on this round table while we're all still alive and not in the cloud yet or Microsoft or ubisoft's cloud but but I want to thank you guys all for for the great topics today great conversation of course as always lots of fun topics like you we always say we will be revisiting many of these and of course Microsoft Activision Blizzard will never uh Escape our our discussion at some point here like they'll find some way to stay as part of it so uh so definitely make sure to at least when Aaron's on uh keep that going so but uh thank you guys for for joining and of course uh thank you guys for listening again as always make sure to hit up our mail bag if you questions comments feedback suggestions anything to podcastnavic.com of course make sure you're subscribed to the newsletter because we are still putting out lots of good stuff there so make sure to catch that as well if you weren't already and of course if you're you know checking this out for the first time make sure to subscribe Spotify things like that YouTube wherever you're checking it out and of course we will catch you guys next time but in the meantime enjoy your

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