Square Enix’s Western Studios ‘Only’ Cost $300M? - The Metacast by Naavik

and he always chips in he's always a provocateur and yeah no you know everybody else is quite polite and says looks good you're you're say he was like how is this going to be clash way out i saw this as well [Music] hi friends welcome to the metacast roundtable by navik and today i'm joined by david aymour ceo at playment mate luncheolic user acquisition and marketing consultant and podcast host for two and a half gamers if you want to check it out it's very interesting topics that they discuss and mikka ahonen co-founder at lightheart entertainment hey maria hello hello

ah week is our first uh our first episode together yeah it is it's i guess it's been a long time coming but uh finally the stars aligned yeah you've been busy at lie heart yeah yeah we we've been busy actually making our second game so uh full steam ahead with uh two game teams now nice first game still doing well another one in the pipeline i remember we discussed how did how you did marketability test for the second game and now it's uh it's already coming along nice let's get to here yeah we actually did did do a small scale marketability test for that but uh we can take that discussion offline yeah yeah yeah nice okay amber is in santa barbara santa barbara yeah yeah the dialing in from santa barbara so if you see me moving uh like weirdly it's the connection because i'm not sure like how is it possible that the u.s is just very terrible in terms of the internet speed

i'm going to try my best it's a big it's a big country it's a lot of cable that's pretty okay is it vacation yeah it's a vacation slash working from uh anywhere in the world because i can sure and now just uh jokes aside my wife just fell in love with santa barbara when we were here a couple years ago i think it was her first gdc so we went traveling and then as soon as we came here then she said okay so uh this is the town so when we were discussing where to go uh with my wife and uh my daughter we were thinking about maldives or u.s and since my dodge is still like not sitting or crawling or anything the maldives would be well pretty boring and and really challenging i thought this is actually like better place to be we can go out walk around and uh spend some time outside and it's pretty sunny so it's 30 degrees outside so i'm getting

some tan anyway nice i'm so jealous it's so cold in london well i hope it was cold in slovakia as well so i hope when i get back in june it's gonna be already pretty sunny there as well definitely trying to avoid the color um oh sorry sorry i was changing topic do it oh um i was i always loved talking about the weather i have to avoid talking about the weather to not be a traditional english person yeah um mika i actually don't know what kind of games um like her entertainment does what kind of genre is it we make uh action arcade games for or mobile first game why did you say why didn't you say hyper core oh yeah it's cyber car it's in our investor feature because yeah for the investor pitch you need to come up with a word so we came up with hybrid core

i don't know what that is but it sounds pretty cool it sounds way better than action arcade come on yeah the first game is uh is a 2d action platformer uh road of fire um so yeah you can you can check it out uh just just search for mr auto fire okay yeah i'll definitely check it out i like i like arcade games it's really cool game really cool creatives as well you're targeting me a lot and i i enjoyed it always did you work on this did you did you participate but today no i didn't unfortunately i have unfortunately but okay you know you're going to do it yeah we're going to continue trying out the new format today um so similarly as in the past episode if you have any feedback it would be awesome for you to share it with us you have our email address in the podcast notes and and in the youtube description or just contact

us through the socials as well we're really really keen to hear what what you think about it and on that note we're going to jump into david's topic so david what did you bring today yeah like this because we're talking about it over slack and you say let's talk about this board ache yuga thing because that seems interesting and then just before the podcast starts i have to intro it well i don't have all the data to hand this i just show up and talk about stuff if i feel like there's a new sense of responsibilities but so i'll give this a go haven't not given it too much thought but yuga which are the uh stewarding company maybe you recall it behind the board 8 yacht club and various variations derivative projects of that launched a coin a couple of weeks ago and then this weekend launched the land sale for their forthcoming game other side and it was hotly anticipated obviously board yacht club is

the the biggest energy set probably by transaction volume and value oh yeah that's right moon bird is i suppose are the most recent one although i still think brought it your cup probably uh yeah in terms of transaction volume was probably the biggest one well they've been around for a while as well they're sort of og status right yeah and you know when they talk about doing something new obviously everybody pays attention they're going to come out with a game it's going to be called other side you're going to need other deeds in order to use this new metaverse style game which doesn't have a lot of definition but everything that they've done in the past has done well in terms of anybody that's invested in it obviously anybody that bought board apes back in the day has done exceptionally well from that or indeed things that they've done subsequently so it's hotly anticipated and the launch of their land sale happened over the weekend and it you know to generalize i would

say it did not go well i mean it went away in the sense why didn't it go well because it wasn't very well organized mate you know so i suppose you would say they received 300 million dollars from the sales of their land you know i think you would say i guess that's good you know that that has gone well for them but anybody that wanted to take part and buy it it was a very difficult process it was a slow process and and perhaps most importantly it was a very expensive process uh 180 million dollars spent by people trying to mint this nft and i think the general consensus from my point of view to something in this sphere it was avoidable you know that it was a sort of messy um launch which should have been avoided by people that ought to be know what know what they're doing and i think that was a little

frustrating we were hoping for something a bit better organized didn't the founder the person who created i think someone the person who created ethereum also responded on twitter saying that actually it wasn't possible to avoid i i don't i don't know if this is entirely true but at least that that seems to be the position it's rare that i will go against vitalik you know that's a dangerous thing to do yes on this occasion he is not right there uh he's writing so far as hey if you try and do a lot in aetherium all at once then the gas price will go up and that how it manages demand but then how about not trying to do a lot of things on ethereum all at once why not find another way of distributing land to people that want to buy it and that could be on a side chain it could have been done there and then released back onto ethereum over the course of a week or two sort of

managed back onto it ethereum or could have been done possible to do it like a stage rollout on google for example you know or like 10 percent well that's so you know you know how many how much interest there is yeah so why not just it's a little bit like maybe this is too it's a bit like glastonbury tickets where you know you nee you know there's going to be demands so you build systems in place to deal with it and they didn't and that seems odd to me but look yeah even when like a lot of people were frustrated about the whole land sale eventually they made a lot of money on the secondary market anyway i mean afterwards anybody anybody that was able to buy one right so i think you're right um it's there's no you know it is a successful project in there anybody that got one now they're worth more but then that would be the case anyway i suppose what i'm really commenting on the way that in which it was done sure

it still wastes right like you could have saved a lot of money that just disappeared by by managing it properly if if i got got it right that's that's how i understood it yeah because i i didn't know that this could happen but if you're trying to mint something at the point where the gas prices go up if you don't have enough ethereum to finalize the cost of the gas fee you'll actually lose all of the ethereum that you're putting into it and so people just lost ethereum and didn't get anything in return for it yeah and you have what's called a gas war where um the more gas you commit so the more ethereum you commit to making that transaction happen the higher the chance of you that's with you being successful but that does mean that if you were spending gas and you didn't commit enough then that could disappear and you're not getting anything now they said they're going to reimburse the people that have done that but then that creates its own set of problems yeah um

so it's just unnecessarily messy from somebody that should know better i suppose yeah i think they should definitely know better for the size of the company the the hype around them as well and they should they it just looks like they just didn't care about about the players at all that's pretty dangerous especially in the blockchain space yeah and they sort of pointed the finger at ethereum a little bit yeah and i thought that's not cool come on you know there were ways around this you just didn't think about it properly yeah like they said this is how ethereum works come on it's like sure but like you said they can they could do something else and then what maybe this was a build up for for their own chain in the in the future we don't know yeah well that's that's the rumor going around yeah i'm not sure i don't buy into it was all the poi strategic conspiracy however it does play nicely into

the yeah it's a good narrative around the yeah the narrative yeah i i have another point to make sort of the other interesting thing that i found was so the it's 300 million dollars that's going to go toward a other side game and an interesting company that um that was sort of on the credits for this other side game is improbable and i don't know if you guys are familiar with improbable but they've sort of been in the games industry for the last eight years building in having what 750 million dollars worth of investment maybe a bit more so huge amount london-based company huge amount of investment promised the world on a stick in terms of a general purpose ai that everyone can build games from but in that period of eight years i think they've had maybe four or five canceled games i don't think any game has come out and those are the people that are behind the forthcoming game so i wouldn't you know i don't know any

more detail than that but um i don't see that as a particularly safe pair of hands to create a board a york club game there is a perfect position for a improbable pun there but i will not do it i think you just did yeah it kind of did yeah i think that guy i am john did a post on on the social networks about this and i'm very much aligned with the perspective all respect for yugo labs and they've done something that's hard to replicate and they are unique in their position and brought something new to the world it just leaves me a bit disappointed with the dream that was being sold in terms of crypto it's all about decentralization democratization um at least my understanding from that is sharing value across everyone and not only the rich getting richer which is what happens in the centralized world and so i was expecting companies to just try to

make this accessible to everyone and not price people out significantly and everyone being able to to join in and just seeing this happen it's just impossible for me to buy in and be part of this club it just makes it feel like you know the high school club that everyone wants to belong to but only a few are able to to join just feels too too exclusive to what the decentralized dream is yeah well i would say that what we've seen happen over the last week is uh the wheels coming off that idea a little bit because now there's way too much demand for far too little supply artificially created the money's going towards something that probably isn't going to be a great game right probably i mean early to say so there's nothing particularly good about it and it feels like a a company that was seen to be thought leaders in this space have now made

areas that you don't really believe in this version of blockchain at least i don't you know it's it's less interesting to me regarding the game have you played the mutant versus apes that came from uh from it it's just an archer clone without any monetization uh and it's just i'm not sure the i think the the number of players who played that game is like 30k which is ridiculously low for this type of uh well hype around the the whole uh whole brand so i'm not sure about the the other side yeah and and you know they do have this idea that they're ape coins which is sort of part of their universe gets used in other mobile games or other all kind of games but i don't know i'm becoming increasingly cynical about how well this is going to work well yeah it looks like if they're doing the the the opposite way how i think uh the whole space will evolve so first you just build the game then put a

blockchain layer layer and try to implement it wisely and in some logical way and then uh on top of it you just do all these nft sales land sales and whatever else that actually is a part of your economy and then not the the other way around i mean the other side is supposed to be a metaverse for uh you know of course now what else rather than mobile games that happen to use the token but i just i just haven't seen anything that i find easy to get behind hopefully lessons will be learned and we'll see other companies also learning from what happened just taking other other strategies we'll have to see um on that note but hey well what do you have for the round table it's a very good segue to yeah it's very good segue to to my my topic and uh it's a shameless plug because i wrote this this piece a while ago a

while ago yeah we classified it as cheating it's cheating yeah yeah sorry sorry about that but i still i still believe it's pretty interesting topic of uh the ua for uh well free to play versus uh blockchain games and and since we saw quite a quite big figures invested in the games in terms of the blockchain and uh i think there are questions to be to be asked about how should we go about the scaling the the marketing activities or the ua on blockchain games would the old free to play model or ua framework work or are there some similarities between um the free-to-play versus the the blockchain games uh methodologies in terms of the the ua so so i just um and interrupt me anytime you want if i say something stupid or it's something that

doesn't doesn't bring a ball so i i i did it a comparison between like web 2 and web free and how the how the different marketing activities change so i'm just going to run through the web 2 first and then the web web 3 as a comparison and then end with uh with the hypotheses i have so basically with the web 2 i think they're still like the traditional uh channels like facebook google ad networks and and the tick tock you're paying attention to the app store optimization and trying to to run the ua for the the value optimized players other revenue versus in-app revenues and then using um something like influencer marketing different tools like app penny or sensor tower and then using for tracking uh mobile marketing partners and uh and basically before every every game is is um is created i think um what we discussed the first uh

with uh with mika is the marketability test where you just test your uh your uh game and visual styles and then ask players some questions so how this change uh when you're going to the web 3. so i see a slightly different ua mix from from the the games i work on at the moment which is more leaning toward the twitter um tiktok may be ready to google youtube mostly but then instead of app store optimization there is a huge emphasis on the landing page conversion rate optimization which is where that's the web that's the funnel you are you're working with on the on the web three games at the moment and instead of a facebook fan pages you're mostly on discord and telegram building the the communities then um instead in in terms of the mobile um i don't know about insta in terms of the marketing activities you're using um ama's written or live on twitter spaces or on

telegram you write more like blogs and developer updates rather than just uh you know um talk to the community in terms of the web tool then you have the dap radar rarity tools and some other tools instead of the epony and samsung tower which is on the on the web 2 side and then you know trying to look at the analytics as well it's very different from the mobile space uh you're using more like segment mix panels and these type of tools and then what is not used that much in the in the free to place email marketing and then now we're going to the like web 3 specific uh marketing tools which is like pre-sale market validations also this land sales uh what we discussed in the in the previous article and then also what's really important in the web 3 space is uh are guilds basically and that this can be used as a

as a ua tool quite quite heavily and i know like uh david there's some opinions about that as well so how do you know that did i say that yeah well i'm not sure well we discussed this in the in the in one lecture maybe maybe okay carry on so just to just wrap it up um i think community building is very very important for web3 games but i think it should be divided into like two two stages so before the game is live um the building community pre-sales airdrops and and building a hype around the game is really important but after you launch the game i mean you can rely on the community yes but then like more traditional ua activities come to place and it needs for from my opinion like for game to be scaled you need to be in the control of of all the marketing activities and this is done by just the

traditional ua do you know are there actually companies that are doing direct response marketing on web 3 games yes but it's slightly different than wait a second what does direct response mean it's bua we're like okay performance showing showing and showing an ad and expecting the user to actually click on it do do a thing and so in this case convert to a player of your game yeah okay all right yeah but it's not done on mobile but it's more than on the web i would say yeah do you know i make a a prayer to the marketing gods the performance marketing is not a part of web three you know i i know that you've made uh yet i think yet yeah i think it's gonna happen you do i hope yeah i think so too it will eventually converge because at one point there's just going to be too many games for the hype that can be created

and you'll start fighting for the hype so i can still pray for that you know what i find really sad is that for if i was to release a mobile game that was successful not unsuccessful successful and we all know this we've all done this before then if i make a dollar then 30 cents if it goes to apple or google 60 cents it goes to mark zuckerberg or mr tick tock and then i see 10 cents and i hate the idea that 60 cents of marketing dollar money goes to on performance marketing i know it's very effective but i just don't like that as a model mate so i hope uh yeah i hope you're wrong you know you know what yeah i i think like performance marketing only means that uh you measure what you spend right so so because marketing used to be this blob of money that didn't get accounted for and at some points we figured out that we can actually measure this spent

but it's still just marketing right it's it's part of your marketing toolbox it's it's it's not a black science it's just something that you can measure well you know so yes i suppose what i'm talking about is social media marketing and you're right it is performed although you would say and you notice better than me but presumably post idfa then the performance part the measuring part has presumably got a bit more difficult anyway right so definitely definitely it's true yeah but it's still money going in money going out it's not that hard but what i really hope that that happens in web 3 is that the people that um i love the idea that you can motivate the people playing the game to be sort of ambassadors for the game or to help grow the game so if your game has tokens and those tokens have real world value then you can motivate people essentially with with dollar value to to do the things that you want to see them do in game and i'd far sooner give the players

my marketing dollars then give it to facebook and google and tick-tock yeah of course uh that works 100 but then uh i is this um really controllable from from your side and scalable as well you know you can put all the tokens you you can to motivate players but is it going to be a lot of players in the end or just couple of the key opinion leaders in the game that they are going what do you think maria cut through the noise with uh back back on facebook is that what you're telling me back on facebook well what i mean to say is you said that you're gonna have to use social media in order to in a in a much more noisy web 3 space you're going to have to go lean on traditional marketing methods like facebook and google or did i miss hear you i i i think that the strategies we use nowadays in ua they'll eventually be more required you won't be able to just fully rely on rely on hype drain and

word of mouth in order to get players to to your game as the market becomes more and more saturated i i think it will still i think ambassadors will continue to be a major um part to play in ua it feels like this scaled influencer program that web 2 games have nowadays but with different incentives and ways of getting influencers on board this different kind of of content creation mika what's your wish to the marketing gods better conversion it's always the same it doesn't change yeah yeah i'm curious what this prayer is you need to add it to the show notes it's a private thing and matteo is anybody actually are you starting to work with web 3 companies to actually put some of these ideas into action yeah yeah it's moving into the right direction it's not

like um the same level of scale yet as with mobile games but step by step it's still pretty new for everybody yeah i was so excited to get an ad for star atlas it made me feel it made me feel special the world thinks i'm a web 3 audience gosh oh well um well that that's a good tie-in for um mika's um topic about scaling a new game so new warcraft game was announced i actually haven't looked too much into it yeah so um this week blizzard announced a new mobile game uh warcraft arclight rumble the name is kind of a mouthful but uh but first of all it's kind of back to the roots it's a warcraft strategy game so kind of like that's actually the warcraft that i grew up with um before world of warcraft uh the gameplay is essentially clash royale with some things changed around i would say uh but obviously with the warcraft

ip uh call it action strategy if you will i i've heard that term be being used for this type of games it does have ins like the the difference from clash royale in the core game seems to be that there's a focus on the single player campaign so it's like a player versus environment experience as well um and obviously it it's it it has it's kind of a blizzard kind of way to do it so there's a lot of different maps it's kind of a big scope as well so i was going to ask is it i mean it's a mobile game that looks like warcraft like with the sort of cartoony vibe is it built by blizzard do you know yes yes i i i think it's built by by actually like blizzard in the us and and not contracted from this from china like diablo immortal um

the concept is actually interesting um it's basically the conditions it looks like pleasure royale man cholesterol but pv right that's that's it yeah um i actually made a product of this at some point at lightheart we have a proto like this we we didn't like go forward with it but like i i thought the concept was interesting enough so we made a product about it um and i didn't move forward i mean didn't you want to compete with clash royale questions here so good question um the interaction was kind of okay because class royale interaction is okay but uh but the pve version we just couldn't make it fun so basically what we what we thought that it would take us a lot of time to make the pve experience fun and balance it so then we decided to move on to another prototype so it wasn't like this sucks let's not ever do it it was more like this would take a

lot of work to make it fun so let's find some other prototype that that where the fun is more easy to find i guess that was our uh our thinking at the time i i was looking on linkedin and there was a product announcement from the product owner of that title and mate always chips in he's always the provocateur no you know everybody else is quite polite and says looks good yours your response might say it was like how is this going to be clash way out i saw this as well [Laughter] well i said but really i mean i said already like hey guys great job of course but direct competition to clash royale i mean we saw a lot of clones uh not so successful and i know like this is not exactly the same but still even with blizzard i mean it's going to be very tough do you know what it's a bit of an experiment for me in can a game company that's very used to doing excellent

you know pc games console games pc i suppose primarily but um can they turn their hand to mobile free to play and i'm sure they can turn they can build a great looking great playing game on mobile but i wonder if it can monetize in the same way as experts in the field because that's not a given i guess we saw it with uh fallout shelter remember that back yeah yeah a while ago that was a sort of that felt like it was from the tame team and did do quite well but i think it was a paid game it kind of like the it lacked uh longevity uh let's talk about that a little bit i mean the game does look awesome right uh blizzard has a good track record of fun and the ip is definitely worth something so so there's good things there i would download it i think many others will as well when it when it comes out uh the bigger challenge is like you said or will be for for the blizzard team obviously i don't know what the game is like yet but this is like speculation uh well but i think it will be interesting to see how they how they deal with this basically the retention and the

monetization part of it so basically all of the progressive systems in the game if we look at blizzard's track record on free to play it's hearthstone and hudson's monetization is a little bit special because it's basically a trading card game just digitally and the systems match that so you release new cards uh kind of rudimentary but it works uh heroes of the storm great game financial failure the free-to-play design is just utterly bad and building these kind of solid free-to-play progression systems um it's pretty hard and it's something that i don't think we've really seen from blizzard yet and uh then again like taking hearthstone systems into this game it it will not work uh units in this game will be so much more complex than cards uh you cannot possibly just provide the amount of content that you need to feed this like trading card game uh content

machine so yeah that's that's that's a very deep expertise on on the mobile free to play space to be successful and to be successful in this specific genre and the game sorry i think that the challenge is i think it's much harder to make a game that monetizes a level that you can do positive row s um ad spend than it is to make a great game that plays well and looks good it's a real shame but i mean yeah the app store has got a million games that play well and look great but you know are dead because you can't market them so i wouldn't i'm certainly not writing it off at this point but that feels like more of a challenge than making a great game that's that's why i'm so surprised that because i saw the announcement and i looked at the visuals and the website it's a fully fleshed website it looks like it has a lot of features from the get-go in the release i i don't know how much it costs to make but it looks like a very expensive game to make and then

how how do you well how do you make it profitable and then have positive rules a lot of questions and yes there's like there's like a 100k game there's like a one million game and then there's 10 million game i think that looked like a 10 million game obviously there's also 100 million game but but uh not many many many many companies do 100 million games for mobile but like the budget is definitely in many millions for that compared to like like uh what uh kind of like i guess my company's way of doing is build the first hour of the game launch the prototype see if you can market it if players stay on for two days then take it from there uh this is high production values from the get go huge launch scope launched with the pre-reg campaign expensive launch trailer uh i think the launch trailer cost more than this road of wires first version so it's it's definitely like it's different so there's this and i'm not saying like it's the wrong but there's

very different types of destinies and different competing games well so this is what i would call a building and they will come production philosophy and i haven't seen that work in mobile for a while i mean even supercell will do soft launches and you know i can't think of anybody that's so confident in mobile they'll just go directly to a an enormous launch so it's um i mean it's exactly what you do on console or pc i guess yeah you know it's been a while but um so they're trying to use that playbook in mobile but nobody else does as far as i know so that feels risky yeah it's not going to work it's not going to work a definitive statement there that's my bold prediction i know yeah no because yeah that's why you do soft launch because even if you build the game 10 million multi-million game it will have issues and if you don't get these issues before

the launch then you are in a very big trouble and even like large budgets for the global launch won't save this so it's very very dangerous thing to do yeah i i wonder how how much time was spent trying to make the acronym of the game be war how is that what it is yeah warcraft spark light rumble that explains the name i i did not notice that it's a background that's what it is you start with a word and then figure out yeah anyway yeah well i mean they they do as you were saying maria i guess they have a lot of momentum behind them but because people are blizzard and people love warcraft and it looks great and will play well so they probably got some momentum that will forgive uh you you know a period of live ops while they try and fix the plane as it's scooting along but um i don't know i'd rather not do that i don't know if the momentum is starting

to shake a little bit because we've we saw with world of warcraft players left to go to final fantasy 14 so that that long-term loyalty to the game could be um reducing perhaps a little bit i'm you know i'm just hypothesizing here i just don't know how much the brand of warcraft can carry a game of success like matteo is saying you're heading toward a ball prediction [Music] i wish the most the biggest success oh god of course i'm sorry i'm canadian at heart no um i'll i'll jump into the topic that i brought today which was embracer acquiring um essentially square enix north america really so there they entered an agreement to acquire crystal dynamics montreal and square enix montreal and they're also going to um

i'm sorry i'm racial group is also going to own some of the major ips developed by those companies such as tomb raider deus ex thief and legacy of kane i didn't know legacy of kane but apparently a lot of people are happy about it because it was a great game with some nostalgia and the deal is going to cost embracer 300 million in a cash deal and i believe the lump sum will be paid in full once the acquisition goes through it feels like a small amount of money and i believe that's just been the discussion mainly yeah here's a thought just to link topic number one to where are we topic number four the land sales of that uh board ape game is the same as uh embracer just paid so that 300 million dollars ties the two stories together does seem low i think everyone's feeling like that's low but maybe it's correct well i think i think a brazer is buying some raider franchise and the capability

to ship these triple a tomb raider titles that's all and square enix is divesting studios that are bleeding money i think that the bleeding money part explains the price yeah i think you're exactly right um and it also seems to be there's some seems to be some consensus in the industry industry as well and that's what's happening because with we look at the eye watering prices uh how much sony um acquired bungie for and bungie essentially has one game right now and others in development and that was 3.6 billion and now we have three companies they have proven record in releasing aaa games guardians of the galaxy i think it was okay it undershot expectations of square enix i don't think it underperformed that much these are like i think these are like 200 million games that made 100 million in revenue yeah i think it was the avengers game that had 200 million in losses um i think that they don't have any absolute heavyweight hits there

like uh tomb raider is the one that i guess um means the most people there but then epic gave away one you know i guess it was square enix but on the epic story you can find all three tomb raider games for free just before christmas right so how much is that how real valuable is it really are people still gonna pay 60 70 dollars for tomb raider in two years time and that's probably the biggest and it's probably two years away and it's going to cost a fortune to make they have 1100 people so 11 000 people in those studios they've just let go so using you know a more mass as i think you're describing the thoughts that any triple a studio would have like nowadays that's not would you that's not like i mean like in any triple a game that you make is gonna be multiple hundred million and at some point they will be almost free at the epic store well after a couple of years when they're in the pack catalog i guess i'm just saying that that tomb raider's star

has faded somewhat and right now and it's i'm not sure you can get the level of excitement that you need to in a triple a game that's going to cost you a fortune to make in two years time it feels a little tired and i think they're feeling that their money could be better spent elsewhere yeah i think um i think i saw a quote of the embracer group ceo saying if there was if this were a different time the price tag could have been different um i believe square enix montreal has been struggling to find a hit title and mobile free to play there's some lack of expertise within these companies to do live ops square enix is interested in this investing and then they're getting this lump sum that they can invest in other priorities such as blockchain ai cloud and there's even a quote from the president of square enix saying that japanese studios can't make

good games if they're trying to imitate western ones so it for me it feels that they're consolidating and what they know how to do best because if we look at the most successful square enix games such as nero tomato final fantasy xiv that's sticking to their forte and what they know is their differentiating factor in the market and i believe perhaps before more of the japanese studios maybe they felt that they needed western studios to develop games to be successes in the west we've seen more and more that games developed in japan and southeast asia that they can be extremely successful in the west and can be developed in their in that region of the world that might take longer i always um i don't want to be rude about uh idols but um you know i always felt the wind's square which when if for a long time it's been very prestigious and has final fantasy franchise and all that good stuff and

then enix so that felt like a good marriage i always thought that idos was an interesting surprising choice i suppose as a sort of western part of square enix um and you know i don't think we've seen that those mega hits from those studios in the la well since they've it's been part square enix so maybe they're just saying look we don't want to another 11 000 people in our books doing things that you know probably won't be treble a's knocking out the park and are cutting some costs but it's still i noticed their revenue square enix's revenue is 2.6 billion dollars a year so and and i guess running those studios would cost them about 100 million a year something like that so it's not like they could have afforded to keep them but it just doesn't feel like it's strategy for them i i wonder who is going to continue on with the licensing deal with disney to

do the marvel games because it wasn't part of the announcement so it might be that embracer group might try to do a licensing deal directly with disney to carry on with the sequels and do the marvel games i just don't see square enix continuing to do those kind of games what um what do they have any production outside of japan now or was that everything gone for square enix i'm not sure actually i believe i read that the um the london studio was part of the acquisition um because they worked for one of the north american companies but i'm honestly i'm not sure enough to give a definite answer there's also a perfect dark title upcoming from crystal dynamics i think that's a microsoft thing what is it about i i guess it's revival of perfect duck that's a nintendo 64 uh uh first person shooter revival but wait a second that's published i

mean it's an ip owned by microsoft so what is it a game for microsoft i think so yeah so i think there's like a publishing deal between crystal dynamics and xbox to do this perfect dark so so there is all of these loose ends that i think embracer has to somehow resolve well yeah so so let's you know talk about the other side which is i can sort of understand why square enix might want to let go of studios that aren't knocking it out the park that are expensive they wanted to focus on something else all that makes sense why is ambrasa hanging on to what you might consider to be an older business model why does it make sense for embracer and not for square enix if it does embrace are focused on developing single-player um narrative games uh i believe one of their core strategies so far and this gives them the opportunity of getting companies that have a track record of

doing so and also some some ips that have been gathering dust you know deus ex that if you make a good game without without ip people will will go and play i think tomb raider also has a strong marketability right now we see horizon there's not many games with a strong female lead that people can relate to and remember from childhood we were talking about trans media and connecting with with your i love to play a game where lara croft isn't you know kick-ass woman and just not following female tropes that we see a lot in games and just being an interesting person that's dominating the world so please can someone make a great tomb raider game i'll play it i think i think that's true for tomb raider but i don't think that's true for deuce ex thief and legacy of kane which are the other three ips i guess i know those ips but like i don't think the general public really cares about thief or legacy of kane uh

yeah those are like nerdy nineties niche things you know yeah yeah i played deus ex for a very short period of time i'm definitely a big fan of tomb rider because i played it when i was a kid tom brady one and two of course but i'm not sure if like the the players these days can appreciate the nostalgia that would be we can see in these games yeah i mean did did the last two media and i think that is the biggest that they have and it is big and it's got movies and it's in our culture so i would agree that it's a big ip i wonder what the last one was it a success for them i don't remember hearing it was enormous to me it looked super polished and um i think was broadly well received but i don't think it was the mega hit i don't know i come back to this idea i don't understand why something that evidently didn't work for square enix to the point that they were happy to let go of it for 300 million would make sense for embracer who feel

like hey uh we're going to take the same set of people and with probably slightly different strategy but we're going to make this a huge success it seems yeah it's the thing with the embracer buying like all these companies i mean it's it's really weird it's from here there it doesn't look like a concise strategy yeah that many sides i don't know how much interaction the companies will have embracer acquired gearbox so the maker of borderlands so perhaps there's some knowledge that can be shared and borderlands is a successful game for me the price tag of the 300 million i can just imagine a racer group just thinking oh this is a steal we should just do it and see what we can make of it because they paid two point something i think almost three three billion to acquire as many games so why not spend 300 million that seems like uh a good let's spend 300 million see what happens yeah it would be an interesting

evaluation exercise just to get like a hot shot consultants to uh evaluate the value of the tomb raider ip just the ip like what's the price tag that you would put for the ip i think it would be 100 plus million i don't know but uh that's like a gut feeling based on i don't know 10 year old research what we did at rovio for angry birds back in the day but yeah i don't know i don't know how you quantify that but you're right that would be an interesting exercise but it's 300 million plus then 100 million to pay everybody you know to run that company or that set of studios every year so it's not really 300 you don't just get the ip you've got a hell of a payroll right yeah yeah you did um well i think we'll wrap up the the episode here um if you want to continue the conversation we're on discord you can join avec's discord uh just tying back to the request for feedback if you're enjoying this new format please let us know so

that we can keep doing it or improving in other ways um and thank you all for joining it was lovely to have you here it's a very interesting topic thanks [Music] you