Record D2C revenue and international studios flock to Spain | Week in Mobile Games podcast

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Hello, welcome to the pocketgamer.biz podcast week in mobile games where we chat about the week's news and provide some insights. I'm Craig Chapple, head of content at pocketgamer.biz and this week we have our features and data editor Aaron Astle, our deputy editor Paige Cook and we have a new member of the team, we have Mary Matheson, our editorial director for events. How are you all doing and Maryam, welcome to the team.
Thank you.
have you here.
Good to be here. Yeah, it's good to be here. Yeah, it's great to be here actually. Very excited for my first podcast with PGC.
Maybe if you could explain to people a bit about what you're going to be doing with us and about what you've been up to.
So this is a sort of newly created role and my job is to sort of bridge the gap between events content and the larger editorial strategy. So I'll be talking to sort of all our fantastic speakers across the events and also diving into

usual sort of up-eds and news where possible. And yeah, I'm really really excited. I think it's going to I've already had a great second week. I think it's been diving straight into things which is crazy to think about but yeah, it's been really fun.
It's already the second week. It is, isn't it?
Yeah.
That's crazy.
Yeah, it's mad.
Time flies especially with our event coming up. A lot lot's going on but yeah, Maryam's already had a couple articles out so I encourage you all to go read those on the site and we have more in the works as well. So exciting times. But what else have you been up to Maryam other than joining Steel Media?
It's been a lot of firsts because new job. I was just thinking about this actually. I was like what can I what can I add to this? It's new job. I've just moved to a new country which is America. Um I feel like I've been talking ad infinitum about this to a lot of people in the industry. Like a lot of people come up to me at events like so have you got your green card yet and I'm like not yet but it's finally happened. I can say yeah, so new country, new job, just a lot of firsts really and I had my I had my birthday yesterday, as well. So, yeah, exciting times.

Are you actually going to be Is your town city hosting a World Cup game?
They are not. I don't think I've been really bad. I'm not like the biggest football fan. I'm sorry to let Yeah, I know. Well, apparently there's loads I I digress, but apparently there's loads of tickets yet to sell. So, I don't know how they're dealing with that.
Right. Thanks for that, Mariam. Great to have you on the team. So, Paige, what have you been up to?
Yeah, I've had a few little bits going on as well. At the weekend, I went to my uncle's wedding. We're not particularly close. I haven't actually seen him since I was like, I don't know. I think I have like one memory of him from when I was like nine. But, yeah, I think like we've just been trying to get more in touch with like that side of the family and things. So, it was nice of him to send the invite. And it was really nice. Like, I saw a lot of family that I haven't seen for a very long time. So, yeah, that was That was really nice. And I always enjoy a wedding. So, that was a good weekend. And then, this weekend, I've got a friend staying over. So, we'll probably play lots of board games

and things and solve a murder mystery. We love one of those. And I I don't know why I did this. I don't ever play the lottery, but for some reason yesterday I put the lottery on. And I don't know why. It just I don't know, like, you know when they just manage to catch you and you're like, you know what? Sure. And then I had an email this morning as like, you've won a small prize. So, I was like, okay. I I wasn't expecting much cuz it did say small prize. So, I was like, okay, don't get your hopes up. You're not a millionaire. But, it really wasn't kidding. I won £1.
Congratulations.
Congrats. Thank you. Good day. Like, what can you even get for £1 at this point? Yeah, not not the best winnings, but technically I won something. So, yeah. I won't bother next time. I'll go back to not playing the lottery.
I once At least you won something. But, I I once I swear this is how I remember it, anyway. I swear I got like four numbers, and they were coming up one after the other. And you know, you sit there like, "Oh, cool. Got a number." Then you get another one like, "All right." And then you get another one and you're like, "What?" And then another one. I'm like, "Oh my god, I'm going to

win." And then I I Even for that, I still got not that much. Like, you think like uh you get at least thousands or something. No. I don't know. 20 quid or whatever it was.
Yeah, I can't remember what the statistic is. Isn't it something like you're 10 times more likely to get struck by lightning or something like that than win the lottery. So.
I love how that's the comparison they gave. Like, you can win the lottery or you can die by getting struck by lightning. Yeah.
Perfect. All right. Uh thank thanks for that, Paige. Aaron, what you been up to?
Fairly busy. I I've not been um you know, winning retirement funds, but I went out to the cinema last weekend, saw the like He-Man Masters of the Universe film, which I wasn't too bothered about, but my dad wanted to go and see it, and I don't think he wanted to go on his own. But, it was really good, actually. I'd sort of I I've seen some of the cartoon like, you know, when I was a kid. I don't remember that much about it. So, it was quite a like fresh thing for me. Although, I had my dad sat next to me whispering like, "This is a reference to like this toy or like this, you know, episode or whatever." Which

Just like every two minutes throughout the
Yeah, pretty much. It was like, "Oh, now this is, you know, where this thing's from." But, yeah, it was actually a good film. It was funny. I was, yeah, highly entertained. Quite a lot of very much relied on innuendo, I would say, because a lot of the characters have like funny names that I think, you know, the target audience for this is clearly the people who grew up with He-Man and are now, you know, 40-something. A lot of jokes about one of his allies called Fisto, for example. But, that came up a lot throughout the film. And yeah, it was quite funny cuz, yeah, basically, it was like, "Oh, when He-Man was a kid, he came up with all these like, you know, superhero names for his friends." And that is the explanation as to why they're all like childish names. When obviously, you know, in reality, it was to market them to children. I won't spoil things cuz I would actually recommend it. It was a good film.
All right. Thanks, Aaron. Myself, just quickly, I'll be heading obviously to Pocket Gamer Connects Barcelona. We'll just talk about it a bit. And I also

went to the cinema. I saw Backrooms, which is that new horror film that is based on a creepy pasta. Is that what they call
[laughter]
it? That the internet created, I guess, based off of one photo. And then the guy, I can't remember his full name, somebody Parsons, I think. And he directed it. He's like 20. He also He did like some YouTube stuff back in like 2020 back in 2020 about it. And the film, I'm trying to I'm still trying to work out if I how much I enjoyed it. I think it was good. It's very, very strange, but I think it does what it wants to do very well. But I think once you get come out of the movie, at least for me, I was just like, I don't really know what I just watched. Trying to unpack it all. And it does stay with you. So, that's quite good. Interesting. Right. So, we're going to crack on with things. So, firstly, as always, a few quick shout-outs. So, as I said, PC Barcelona, June 15th and 16th. That is a few days away. Probably like 2 days away by the time you listen to this. We've also got Pocket Gamer Connect Summit Shanghai on July 29th. Pocket Gamer Connects Nordics, October 20th and 21st.

And then we have a few other events later this year, including Bangkok on October 28th and Gran Canaria in November. More details on those soon. We've also got the Mobile Games Awards coming up in August in Cologne, which is like Gamescom. So, plenty going on. And with that, going to jump into the news. And the first thing I want to talk about is we just published a research report on Iberia. So, the Iberian Peninsula, as it's known, is where Spain and Portugal are located. And that's what our report focused on. Interviews with local experts, bunch of data. And we also released a top 30. So, I thought I'd throw, ahead of PC Barcelona, I thought I'd throw out quick stats. So, the Spanish games market generated 2.4 billion euros in 2024, which is up 3% year over year. In terms of the turnover from Spain's games industry itself, that turned over 1.42 billion euros in 2023, and that is set to rise. So, in a

previous report, that was set to rise to one nearly 1.7 billion euros by 2027. I wonder if that might change based on what's probably happened in the industry since that report. So, if we think that's 2023, I wonder if the next report would include Monopoly Go revenue because Scopely has a lot of I think employs over 1,000 people in in Spain, and a lot of those in Barcelona in particular. Also has hubs in Madrid and and Seville, and maybe maybe somewhere else. I wonder if they'll add that to the turnover cuz they had quite a kind of a I think a significant role in that game if you weren't aware. And then, some other quick facts about the the scene there. 100 In 2024, they had 815 active Spanish studios according to a report from Dev, and they forecast in 2024 for 10,500 people working in the industry. I I suspect that's probably uh full-time jobs, and they reckon that was going to go up to nearly 13,000 by 2027. The

interesting thing that I'll go into is in a sec is that I guess that might also go up a lot. So, Spain actually has so many You know, I was going to get to that after. Has so many massive studios there. So, in our top 30 list that we ranked, like we do with our big top 50 game makers, the top developers and publishers for the last like 12 months or so doing really interesting stuff right now. And doing this list, you find out yes, they do have their own local studios. Lingo Kids raised like $125 million, I think. They do educational games. And they obviously have Social Point massive studio there that got acquired for 250 million by Take-Two a few a few years back. They have Axis in Motion. They have other kind of local studios, Digital Legends that got acquired, etc. But, the really impressive thing is like in Spain and across the region, there's the amount of international studios that are there. Paradox, Ubisoft, King, we've mentioned Take Two, Scopely, Fun Plus, Gameloft, Miniclip. I think it has Spain, but they're mostly in Portugal,

Malarian, Funcom, Outfit 7, triple dot. Like, everyone's there for some reason. And there's also Bandai Namco, which is their famous European mobile studio. So, there's so many cool studios there. And then, also a shout-out to Portugal. There's less data on that, but the data we did find, uh so this is according to European Video Games Industry Insight Report and the local trade body APVP. So, thanks to them. Uh 160 studios operating there. They did over 100 million euros in turnover in 2024. So, it's a much kind of smaller but growing industry there. So, yeah, there's a lot of exciting stuff going on there. I'm excited to go to the to the show. I would say that. I do a bunch of talks there. Really looking forward to hearing what's going on there.
Could be a fantastic event. Yeah, really looking forward to seeing Obviously, I'm not going to be there this year, but I'm really looking forward to seeing what some of the panelists and what some of the keynotes, the result of those. We've got some fantastic names as well, so it'll be really, really great to see.
Yeah, I mean, we've got Myra Rogers, you wrote a published interview with her.

So, she's the Tetris CEO and president. And then, I'm interviewing on stage, I think, uh Fun Plus's Chris Petrovic. And we've got a bunch of companies really I mentioned, social like the GMs, like the leadership of like Gameloft, Ubisoft, Social Point, King, etc. Like, it's going to be really, really fun event. And we're hoping for around 1,000 people. Right, so moving on, Aaron, you've been on a a trip recently. What have you been up to?
I have indeed. So, I have been to London to watch the Candy Crush All Stars like live finals, which was very exciting. My first like e-sports event. Yeah, never really been to anything like that before. It was It's kind of funny. Obviously, kind of Candy Crush is a a casual game technically. So, it's strange to see a casual game but with some like very, you know, hardcore gameplay going on. You know, very serious players. There was a million-dollar prize pool. So,

obviously, people were quite eager to to win. The winner got half a million. So, not bad. Not bad for a day's mobile gaming. And yeah, it was yeah, a pretty It was a long event. I enjoyed it, but I was surprised that there were like a lot of rounds. So, the kind of top 10 players So, the event started kind of online back in March, I think, and has gradually determined kind of on a leaderboards system who would get to the live finals. So, the top 10 players got to They basically all got to fly in and kept in a hotel in London ready for this event. And as I say, a lot of money on the line. Even whoever came 10th got 15,000 dollars, which isn't bad for, you know, for last place. But still, you know, 10th best in the world. Not to Not to undersell last place there. So, yeah, very good Obviously, and a a free holiday essentially for anyone who did get in the top 10. It was really surprising. I think it So, I interviewed a couple of people for this as well. Luca Lucan Aragon and Paula Ingvar who

work on Candy Crush. And they kind of talked about how, you know, it is a skills-based thing kind of at this level of play particularly. And so, like the All Stars levels are made specially for this event. And like they're kind of identical for everyone then. Because I did ask, is there kind of an element of randomness or chance to it of like, you know, the new candies that fall down, you know, are they going to be random? Could someone end up basically winning through luck? Uh, which they said isn't the case. It's kind of all predetermined. So, the the boards will start the same for everyone. I guess obviously depending on where you make a match, like if someone made a match over on, you know, the left side of the screen, different stuff's going to fall down to if someone did it on the right-hand side. But, if two people did the exact same thing, like the outcomes would be the same. Like, to try and make it more of a skills-based thing, which I also think is kind of evidently I would say because there were actually quite a few people who were returning like

competitors, like top 10 from previous years. Like, there was one guy there who this is his fourth time at All-Stars. He's still yet to win, but he has made it to like four in a row. So, I felt a little bit bad for him. Um, he lost in the semi-finals. But, still that I think he got like 50,000. So, that's not bad.
I think he'll be all right.
Yeah. And then, like the winner from last year was So, he was back again. Though, he didn't win this time. There was a lady who was there last year. And this time she was back again. And her husband was also in the top 10 this year. So, they were both competing, which is
Wow. A family affair.
Yeah. And then, I think there was someone So, there there was a lady who came third. And her husband was in the top 10 last year. And this time she was in the top 10. So, there's like a couple of households here that are like very serious Candy Crush players. So, yeah. That was
like a regular job for some of them. Especially if they're winning a good amount of money. They're just like, "Oh,

I'll just wait till next year. I'll win another half a mil on the Candy Crush All-Stars." [laughter]
Yeah. So, even if it Yeah, even like the 50K, you could just be like, "Yeah, I I get just 50K every June. That's my job."
Are they like e-sports players, teams? Or do they consider themselves as that even? Or are these just like normal people that just play
They are just like people. Like there was [clears throat] So one of the people there is like a stunt woman is her kind of day job. Someone works in like anti-fraud. They all just Yeah, they're not like proper I say proper, you know, they're not e-sports people in a professional sense then. And I think that's from kind of the interviews, I think that's quite a kind of key part of it for King that it's not just like kind of early 20-somethings e-sports people who you know, if it's like a shooting game, obviously you need to kind of have the good reaction times and things that maybe give certain groups an advantage. Whereas for this, it really you know, there were people from 20 to I don't

quite know how old, maybe 40s, 50s. I don't want to speculate too much on that. But yeah, it was it was crazy. And like people like I would guess the winner was probably younger than me, which is crazy to imagine just getting like half a million for being really good at Candy Crush. And like how kind of life changing that would be. So it was a really cool event and kind of being there in person, I think seeing, you know, what what the cameras aren't going to have filmed then, you know, the kind of the sitting around bits while things are being calculated and seeing people getting stressed out or like them chatting to their mum or their partner or whatever while it's going on. It's like these are just like actual human beings from all over the world who get to be kind of part of this again cuz they're just really good at a match three game, which is like really bizarre, but cool that like I guess mobile's big enough to make these kind of things possible.
Right. Thanks for that, Aaron. Really really interesting. Paige, what have you got?
Yeah, so from me, bit of a bit of an odd

one kind of. So the Entertainment Software Association, or ESA we'll just say, they wrote a letter basically asking US lawmakers to change some of the proposed sort of wording of the No Fakes Act. So, essentially this helps tackle things like, you know, digital impersonation and deep fakes. So, you know, I think most people would agree that is something that needs some sort of regulation and some sort of addressing, but the ESA have kind of argued that the current wording of the bill is far too broad and that it could create sort of unintended problems for the video games industry. So, their concern is basically that the legislation doesn't clearly separate sort of harmful deep fakes from say what would be a legitimate digital character in a game. They sort of highlighted certain games, I won't name Tomb Raider, Red Dead, The Last of Us, you know, titles where we're used to seeing people, you know, the the characters look very hyperrealistic in those games.

And they even mentioned how even just like background characters in open-world games and things, they can look quite realistic and could it create a bit of a legal headache if some random person was like, "Hey, this this character looks like me." So, yeah, I think that the argument is could the bill unintentionally impact these sort of legitimate tools used in games, even things like character customization. So, you know, they give players that tool and then players themselves can create characters and who knows what they look like. I think, you know, I've seen games like Fallout and things like that where people purposely try and recreate like a celebrity or something. So, yeah, I think they kind of they have a fair point that, you know, at the moment there's a lot of discussion around things like AI, you know, digital characters, deep fakes, you know, a lot of different technologies can often get sort of lumped together because they might have similar themes, but I guess the end use is very different. So, you know, cuz for example, there's a massive

difference between a deep fake being used of a real person making them very believably look like they're saying or doing something they're not actually doing as opposed to, "Hey, here's a video game character who's just an original character but unintentionally it looks just like your next door neighbor who we've never seen. Like they're very different sort of instances and obviously should be treated very differently if something legal was to happen regarding that. They were quite fair in the letter I thought cuz they there was like a part where they sort of touched on, you know, if a legal matter was to arise from it, you know, obviously a a game studio could just fight their corner and there probably would be a good chance that they would be able to explain it and it would be okay, but I think it's just they don't want it to lead to that. Like let's try and prevent things like that happening rather than letting it happen and then deal with it sort of thing. I guess I don't really know what the the solution is but they've said that, you know, they've had some suggestions on how things could be changed and just I guess how specific some of the wording is. They've said that, you know, it's not that they don't believe this bill should

exist, it just needs, you know, to be tweaked to a point where it's not going to create these unnecessary issues and I think we get this a lot with like new technology as well. Same with like regulation regulations for other things. Like I think especially when these regulations are made what by people that don't always understand all the parts of different industries, they'll sort of just do a blanket terminology not realizing what it impacts. We get this with games with mobile stuff as well when we're having regulations and you know, then gamers will sort of come out and be like, well, you've not really thought about it from this angle. Maybe you should speak to these people before you make these regulations. So, yeah, I thought it was it was quite an interesting one. Like personally I understand why it needs to exist but yeah, I think it would just be a case of, you know, making sure that the terminology doesn't cast too wide of a net that it then impacts the wrong kinds of places.
The ESA is certainly busy with that and the stop killing games. It reminded me of [clears throat] we spoke about it the other day. The when Sony did the two games. They did Beyond

Two Souls which had Ellen Page actually in it.
Love that game.
I never finished it. It was all right.
I love I love all their games. I'm I'm biased. Yeah.
Yeah, I love kind of narrative games, so that was right up my alley.
They then also at the time Sony was doing another game called The Last of Us. And the character Ellie looks a lot like Ellen Page. And there was a bit of an outcry, I think, from Ellen Page's camp, maybe maybe from Quantic Dream, I think it's the studio. And so they ended up changing the design on of Ellie to what I guess she was ultimately in the game. I I don't know how really if that's that much relevant. It just reminded me of it, and I guess that is the kind of thing that could crop up like really like you were saying, just like by mistake. Yeah.
Yeah, I think it gets very intricate though because like the more I looked into it, like I was like, yeah, like I said, you they give really powerful tools to the player as well. Like I've played games where it gives you character customization where like I could make a very realistic version of me, or you know, I could have seen ones

where people do jokey things and they'll make celebrities and things. So, where I I It's always hard with these things. I I get both sides of it. I get that it needs regulation, but I get that, you know, the games industry doesn't want to be terrified to create any face and be like, well, everyone's going to have some similarity somewhere. So, they don't want to fear creating these characters, but yeah, it's very hard to find where you draw that line because yeah, I I I know there's tools out there that I said you give the player those tools. So, how do you regulate that as well? But again, like I said, I think there's a big difference between making a digital video game character and making a deep fake. Like some of the videos you see of like I always think of the Tom Cruise ones because it literally looks just like him. Like it looks so realistic and the things you can make him do or say. And if you saw that and it was you, you'd be like, what the hell? Like why does it look like I'm doing this thing? So, it is it is scary. So,
Yeah, it's like you said, they definitely have a point. They have a point, but it's like where they going to draw the line? Like where is the line? Because then any Tom, Dick, and Harry can be like, wait a second, that's me on that game. Um and then they're going to have to then prove like, no, this is

what our devs did and we made it show their process like what is that going to look like in a in a courtroom would even like that would be really interesting to see play out.
Now you've said that it reminds me didn't this just happen with GTA? Like the new GTA I think there's a in the trailer there's a guy with loads of tattoos and stuff and then this guy came out and he was like that's me.
Yeah, yeah, yeah. It It always happens though. That's the thing it always happens. So clearly they're taking a stance against something that they think is an issue but how are they going to go about doing it it will be interesting.
Yeah and I don't think that turned into anything. I think they were just basically like no it's not you. But like I don't know I think he obviously wanted like a payout. You know it's Rockstar so he could maybe get some money. I don't know all the ins and outs of it but yeah it reminded me of that. So they did kind of say like yeah if these things were to happen a studio probably legally could would win and I think in that case it was fine. But yeah I think they just want to try and get ahead of it and make sure that this isn't going to be every game that's like oh that looks like me that looks like my neighbor. So yeah it's it's an interesting one because I

see both sides and it's it's a tough one.
I wonder if they'll have like a checklist like of sorts like if it hits all these points then we have a legitimate reason to maybe go to court or whatever it is but that is really interesting yeah.
And GTA has a history of this so I think they had a Lindsay Lohan lawsuit as well over it. It's interesting that happened again. Right thanks for that page. Marion what have you got?
So mine was I saw it randomly and it really is a news headline. I saw it randomly I think it was yesterday and I thought that will be I don't know if it's been done before maybe you guys can share some input on this but I'll just read out the headline. So the mobile game Neural Dawn will show off arms which is a semiconductor computer architecture company latest AI and graphics technology. So they're going to unveil this mobile game that's going to have the graphics of I guess a AAA computer or console game. So they're planning on using AI to improve and rendering efficiency enabling more advanced lighting and visual effects. So the main article is about how they're going to make graphics sort of amazing

and high the highest of qualities it can be when it comes to mobile games. So, when I read this, three things sort of came to my mind straight away and the first thing was obviously AI and production costs. I think it's something that we talk about a lot in the gaming industry is, you know, all these smaller teams, they're going to have these greater capabilities when it come if they do employ something like this and it's something that can be replicated. So, that could be a win on that side. And I also find it interesting that it's not really the way I read it anyway, it's not really about AI-generated content, it's more sort of and it's not AI writing. It's kind of helping teams get better using visuals more effectively. And then the other thing that stood out to me was that sounds really cool on its face, but will players actually care? Is it something that they care enough about or is it that they're more interested in things like gameplay or updates or social features? So, I think the real test will come with that, not just whether the tech works. But I was it was something that really stuck out to me cuz it seems to be the first of its kind. I could be

wrong there, but there's a real push to try and do this with Neural Dawn and this semiconductor / computer architecture company.
I feel like we've been hearing for like a long time about AAA being on on mobile. I was just watching the trailer, it looks pretty cool. I guess to some of the points that you raised, it's like it's great. We already do have like some pretty good AAA kind of cross-platform games that have come to mobile. So, Genshin Impact, Honkai Star Rail, etc. A lot of those Mihoyo. I think Everness to Neverness, I think is is kind of another one a bit more stylistic. So, I guess those things are possible. And then I guess another point is that you can do this, but cuz I slightly contradict myself a bit. Like on the one hand, you can have those experiences and they work really well. But on the other hand, you can bring like say like Apple's been doing with its chips. So, you can bring like a Resident Evil 8 or whatever to to an Apple device like a high-end one. And I know but but people don't really

these games just tank cuz people don't actually want to play them on their on their mobile device, I think.
This is the thing. Yeah, I wonder if it's going to be I'm guessing they're hoping it's going to be the catalyst that does want people that that enables people to oh, I want to play this on my mobile game because the graphics are that good. But I wonder if it's just another pipeline dream. Cuz they are like you said, those things are available. They're on the market. But I wonder as well if this is going to be better than that and how are they going to do that cuz I saw the trailer too, Craig, and it was it did look quite cool. What it's going to look like, I don't know.
I also think kind of comparing different types of I guess triple-A experience like obviously Craig you said like Genshin Impact which is obviously done incredibly well on mobile, but you know, it's kind of built in a way that works with kind of what mobile games are these days. Whereas you have something like Resident Evil, I remember there was people weren't very happy that it was going to be like a fully priced game because like it is the console game on mobile. They're going to price it the same as on consoles. But people aren't

used to spending like 50 pounds to play a mobile game. So, there was like backlash against that. So, yeah, I wonder whether people trying to make a con effectively a console game on mobile would actually work.
You do see kind of I've seen some of this stuff in the past when it's a new a new mobile phone comes out for some reason that they think will have like it's not an exclusive game, but a game that will run better on their device. I'm trying to remember the name of it. Is it Galaxy on Fire? Deep Deep Fish Labs? Something like that. It's a German developer. It's a space game, anyway. It'll be like specially optimized into it'll have the best graphics on this phone to try and sell that device. And with FIFA Heroes that's coming out or was out, sorry, on mobile. There is a going to forget the phone. I think it's a Motorola. I'm sorry if it's not. And it's like a one of those ones that you open up and it becomes like two like a bigger screen. And they've optimized it specially for that. It's like to sell that phone basically. I was just wondering who what is the real audience

for that?
Mhm.
I know it's an extra. Like oh you know might get a sort of few more. It's just it's just like does anyone care?
It's also like this conversation that's been floating around in our industry as we know for so long like how do you replicate this? But then there's a bigger question like do people even want that? Although with all this I do agree like I kind of I'm like what what's the what's the point in all this? But I do think that the possibility of one positive thing could be what does it look like? And I mentioned this for a smaller team who doesn't have the capabilities of a larger team. Will it help them? Sort of cuz it can be quite a space that seems like you can't break into at a certain point. So I wonder if this will be beneficial to them and what that would look like.
Right. Face up Mary. So we have two more stories but I thought they were worthy of bringing up. So we did an analysis of direct consumer sales. We did it in our recent newsletter. If you're not subscribed it's free you get 10% discount on all PGCs as well if you subscribe. So even if you don't want to read the stuff we put in it then you get a discount. But to sum up it was really

interesting. So once again last quarter in the financials of the big public mobile games companies record D2C revenue. So as a few examples Playtika claims its direct to consumer annual run rate has reached 1.2 billion dollars. Times Group said direct consumer made up 39% of group revenue in Q1 2026. Stillfront Group said 44% of bookings are now going through its platform. Playtika had another revenue sorry another record breaking quarter. Revenue was up 16.7% for the previous quarter and nearly 63% year over year. Insane. And actually there's been quite a big spike late in the charts there. A couple of the companies were saying that it's now like a strategic priority for them to do direct consumer. Even Strauss Zelnick was kind of saying, "Yeah, we're going to be focusing on that." And he had a lot of positives to say in general about Zynga and the mobile arm. So, I guess if they're, you know, their bookings are

up, their profitability is up. Finally, that acquisition looks like it's been really good because they wrote billions of dollars off that acquisition. I'm not saying that's because of direct consumer, it's because of these amazing new games that they put out. But, direct consumer is is obviously helping it. So, basically, the sum of that is I guess we've been waiting to see what the impact of all these lawsuits with Epic, other regulatory kind of things happening around the world, digital markets act, etc. What's what's going on in Japan as well. And the result is that actually the numbers are pretty high quite quickly, I would say. Especially since the App Store was actually opened up in the US, which was I think a year ago. And I think 44% is a lot higher than I kind of thought. So, I'll be interested to see in the in the next couple of quarters if if someone is making half of their revenue or bookings from D2C. Uh so, that's really, really impressive. I'll be doing a couple talks about that next week, couple panels, and I'll be hosting a session on this. So, I'll try to make sure I have some nice charts for everybody.
It's been interesting to see, Craig. Like you said, like we were in a period

of time, I think even last year, where all these companies were saying, "Well, we're moving to D2C." But, now we're at the point where we're actually seeing the numbers come out from that and the positives and the and the business case for adopting more D2C. So, that's that transition and seeing it in live time has been interesting.
Yeah, for sure. It's really big for the industry. There's I think I mentioned this before, the last thing I said it is it's great that direct consumer is happening, but if you if you pair that with rising user acquisition costs, on the one hand, it's great cuz you've got more money that you can actually put into UA to actually make money. But, all that money that you're making is starting to get Not all of it. A chunk of that money you're making is getting sucked up into the rising user acquisition costs as well. So, it's a very interesting time, let's say, for the mobile market. And the last thing I want to say, and I'll try and be quite quick, but unfortunately, there's like a lot of layoffs happening again. And it's not Embracer. Oh, no, it is Embracer. They just like they just shut up or laid off people from Vertigo. So, they are involved. Ubisoft is laying off hundreds of people. And they've closed down two studios in Winnipeg and Belgrade. And I

believe there's a report might have been GamesIndustry.biz. So, I think Inside Gaming reported on those closures and GamesIndustry.biz reported that there's layoffs at the San Francisco office as well for Ubisoft. And also, Xbox is going to be is reportedly looking at layoffs at the end of the month, as put by Bloomberg. They have also released, I'll go to this in a minute, they've also released, uh sorry, published an internal memo from Asad Qizilbash and Matt Booty on their Xbox Wire website. Basically, laying the groundwork for these closures and layoffs. I don't know how big they'll be. They've obviously had big cuts before. One of the things I want to say about this was that I was at Games Growth Summit in London last week. It's called Event in London. And Eugene Evans was there. He was He was at Hasbro recently. He's a very well-known, very famous developer in the UK. And one of the interesting things he was saying is that about layoffs, it was quite timely, just before these announcements, was that the challenge of, okay, when you

have a decision to make, and those decisions will come, to lay off people, like how do you make sure that you reassure the people that are still there, cuz they might feel like, oh, why am I still here? And what is the future? And it feels like, unfortunately, this is probably worse with, in my opinion, with Ubisoft in that it does still feel like it's just all it's just constant layoffs all the time. And everyone People working there must just be like, well, when's my turn? And that cannot be good for the long-term health of that company. Cuz I imagine that will make people kind of want to leave before they get pushed out. I'm I'm I'm interested to know what the culture's there like at the moment if if that's still kind of positive on on certain teams. And it's basically like you've just got to if you can [laughter] kind of make the tough decision as quick as you can, explain it to the team and to the rest of the team and say, "Look, we were going to try and do this. Now we're going to do this with this size team." And clearly explain it and look like you actually have a a coherent strategy, which it feels like Ubisoft

kind of does not. I've I've spoken before, it feels like it's just Yves Guillemot and and the executive team kind of just hanging on with this Tencent deal rather than actually pushing the the company forward. This This is my opinion. And then with Xbox kind of it's similar, but now it's changing leadership, I guess you expect other changes, but it's still kind of similar that who's next and I'm sure is what's going on internally. And that cannot be a good place to be. I wanted to moan about all this. Probably running out of time on this podcast. I think two things I'll moan about on this Eternal Matters. One, they put this on Xbox Wire. Now, I guess being transparent is a good thing and and just if it's going to get leaked anyway, just put it on your kind of comms platforms. Fine. But like this is what it's supposed to be for consumers. They talk about like new game releases and stuff. And they've just had an amazing Summer Games Fest. There's so much positivity kind of coming out of Xbox. And then suddenly like within like a day or a couple days, they're like, "By the way, Xbox is actually rubbish." Is is really what I read from this. And we're going to make

all these changes, lay the groundwork for layoffs. It's like all this goodwill is gone immediately. And like there's a quote in it that says, "Number two, so here are the realities we need to navigate. We will end the fiscal year at about a Sorry. We will end this fiscal year at about a 3% accountability margin, down year over year." What? Like if you're just a normal consumer, you like what does that even mean to you? Nothing. Very strange to me that they just went and did this. And the very last thing is that it feels like it still feels a bit confused. I'm sure there is a a strategy for me. I know they just brought in Matthew Booty, Chief Strategy Officer. So, I assume I have a lot of ideas, Matt Booty, etc. But like they they were talking basically about they need to It was like they've been doing too much. We need to make sure console is good and then we can do this other stuff. It's like that all just makes sense. But then in like two paragraphs later they start talking about their ambitions for everything. It's like, okay. Well, what is what is your focus? I don't understand.
Yeah, I I take more of like a I take

more of a skeptical approach to that. I think they are being transparent, but I think in their corporate language I cuz I read it too when you sent it over the other day Craig and to our company chat. And I think the word that they use reset is so interesting.
Mhm.
Because they it sounds less like a minor course correction and more like Xbox sort of admitting that parts of their vision around things like subscriptions and hardware and content and that kind of thing have not gone the way that they wanted to and they haven't generated the return that the company expected. That's the way I read it. I think if you read between the lines in a lot of these sort of like company strategy things, that's the impression I get cuz they're obviously putting up this out to the public to a certain extent, but I kind of read between the lines a little bit and saw something a a bit different. But it the whole thing is very odd. It is.
No, I agree. I think that that's why the old leadership left and and why she's now in charge is that they need to change something. And I I think that Xbox Game Pass just hasn't worked at all. So, that's quite a

massive pivot. It looks like the Activision deal probably maybe shouldn't have happened, unfortunately, just because not because of the teams there, but just the sheer cost of that deal and Game Pass never worked and I don't think it's going to work at how they need it. There is a reason that they raised the price. They didn't just raise it before. And now they've put it back and they're saying, "Oh, it's back to growth again." It's like, yeah, cuz it's cheaper, but it's not going to grow how you want it to grow.
Mhm.
Wonder how the accounts teams are looking at the money thinking we spent 20 billion or whatever over the last 5 years of the various this acquisition, but we've annual revenues fell by what was it? Roughly half a billion dollars or or something. So, the cost versus return is something that should be I'm sure they're looking at and thinking what's happening.
Mhm.
I think like you said, Craig, I think like them being transparent is not a bad thing. It's good to say all these things that are going on. But, I think the issue is still But, but what is the strategy? Because, like you said, they'll kind of like allude to that a little bit. They're like, we're going to be working on this, this, and

this, and and that's kind of all you're getting from us. And obviously, like you said, they had their Xbox showcase, was it last week? And it was a pretty positive show. There was a lot to be excited for if you're an Xbox fan. But, even in that, like I I like I watched it with my friends, and I was saying the messaging is still quite confusing because
Mhm.
like she kind of came out and she was like, you know, for the last few years, there's not been a lot of exclusivity for Xbox. So, we're going to bring that back. So, I think it's Gears of War, and I think it's Clockwork Revolution. They're both going to be exclusive, but then, you know, Fable, for example, isn't. So, it it it I I I guess it kind of sometimes still does it. They're sitting on this fence of before they were exclusive, then they were like, now we're not going to do exclusivity. We're just going to have games everywhere. And now they're like, oh, that didn't really work for us because it doesn't give people enough reason to buy an Xbox. So, now we're just going to ride down the middle. You'll have some like I think they said they're going to do it for a case-by-case basis. So, some games are exclusive, some games aren't. So, it still just feels a little bit like, you know, they're sort of pitching these ideas, and they're not quite sure where

they want to commit to. And I think sometimes you've got to just stick with one and go with it. And yeah, it's just Yeah, the messaging is still a little bit unclear, I think.
Mhm. I agree.
It feels like they don't have a plan, but I don't I don't know. And and uh I was speaking to a few people about this, and I think I want to say Daniel Ahmad on Twitter talking about it, etc. But, it's like the exclusive thing makes sense, but it might probably makes more sense for your next platform. So, right now, you have the smallest audience base out of all the consoles. You could You need to make more money, as they've said. Why are you restricting yourselves from that by not having certain games on the biggest platform, which is PlayStation, which would gladly have some of these games? Like, you need to make some money, and that is what they've said. So, now you're hamstering yourself. You're probably not going to sell new Xbox One, and not Xbox Ones, like the new Xbox Series consoles, because it's old. I don't I can't remember the price. Is it like more expensive maybe than it even

used to be, or like the same price as when it came out years ago?
think it's like dropped at all.
So, what are they expecting like millions of new people to pick up an Xbox? This is not This is not going to happen. If it happens, okay, well, that's something to think about. But, it it seems extraordinarily unlikely at this point in the life cycle. So, again, it's like I don't know. The marketing is we want to bring Xbox back to its best, and so that's how this kind of falls into that. But, practically, it's you're just throwing a lot of money away for studios who probably desperately need it. Right. So, we're going to stop it there. Thank you everybody for tuning in and listening this week. Thank you everyone for being on the show. Welcome, Marion, to your first podcast. How was it?
It's great, yeah. Got to do what I do best, which is yeah. So, loved it.
Sweet. And yeah, and as you know, I I just I keep talking like forever, so apologies to to you and the listeners as always. Also, yeah, bring it on. Right, we'll

leave it there. So, thanks again, everyone. We'll catch you on the next show. Goodbye.
Thanks, everyone. Next time. See you.