Supercell faces Clash Royale controversy and banks on innovation | Week in Mobile Games podcast

Hello and welcome to the Pocket Gamer.biz podcast week in mobile games where we chat about the week's news and provide some insights. I'm Craig Chapel, head of content at pocketgamer.biz. With me as always, our deputy editor, Paige Cook, and our news editor, Aaron Assel. How you both doing Paige, what have you been up to?
Um, I feel like same as last week. I've really not been up to anything exciting, which is really boring, but sometimes I quite like having nothing to do. It's gives me a chance to actually catch up on some gaming and stuff, but it is Valentine's this weekend, so I will be going out with my partner. Lovely.
Yeah. Have a nice meal out, spend some time together. Even we are all together 24/7, so it's Valentine's every day, but sure, we'll indulge.
Yeah, Valentine's Day is always a nice a nice excuse to do something.
Yeah.
Get out of the house. All right. Uh, thanks, Paige. Aaron, what about you? What you been up to?
Yeah, nothing super exciting. I'd say my

highlight's probably been um Wave of Nostalgia. So, um one of my cousins has just started playing one of the Switch Pokémon games. It's around my age and we used to play Pokémon on the DS, you know, when we were when we were kids. And I'm a little bit older, so I'd always have like the cooler Pokémon and then trade him legendaries and stuff to, you know, steamroll the game with. But yeah, he'd said that he he's just got Pokemon Sword, which is from a few years ago. And basically, um, so I ended up meeting up with him to trade him a bunch of Pokemon from my Pokemon Sword that he wanted to get cuz there's quite a few that, um, you kind of can't catch in the base game, but they're kind of coded in that you could transfer up if you still have like some of the older games. So, I'd done that like a few years ago, and then you can kind of breed them to get more and stuff. So, I'd done that to give him a a load of Pokémon that he couldn't get otherwise. But, yeah, it was just very nostalgic just sitting, you know, remembering when we used to do that with the DS's. And you used to kind of put

them, I guess, headto-head almost like if yours was, you know, if that's the way around it is and theirs is like that, you put them like that cuz we at least believed that made it connect better even though it's wireless that like if they were, you know, if the top screens were touching each other then it would connect better. Um, so yeah, just very nostalgic then. Obviously now it's on the switch, but um just you know holding them close together to make sure they'd connect properly. Um yeah, kind of nice to do it in person rather than just you can just do it over the internet now, but it's doesn't it's not the same feeling. So um yeah, I'd say that's probably my most exciting anecdote from the last week to be honest.
Evolved from the the dark days of the uh the original Game Boy and the Game Boy Color I guess where you could trade for a cable. I was going to say, I hear you used to need a cable to to do these.
Yeah. Yeah. Yeah. And then one time my dad took me and a friend to somewhere. I can't remember where it was. Um I think it was a big

shopping center so we could download a Mew because obviously internet wasn't like as easily available I guess as you couldn't just like go to the Pokémon website and download Mew. You had to go to like special places where they were providing it. And then I accidentally deleted later would end up accidentally deleting my friend's game and he lost his mut
and and everything else obviously all the level 100 Pokemon gone.
That's cuz uh we had the Pokemon Stadium on the N64. So you'd have to plug like an adapter or something into the back of your N64 controller and then in that you put your Pokémon game so you could play your Pokemon in Pokemon Stadium but if you took it out at like the wrong time I guess it would corrupt it and delete everything. Thanks Aaron. As for me, I guess a couple things. One, I've got very much back into not that I ever was out of it, but I started playing a lot more again Starcraft 2, so I'm well on that. Got some new some new builds and some new strategies and seems to be going quite well at the moment. Um, my

MMR is pretty rubbish, but it's about 3,100 for anyone who understands what that means. I think reasonable players could be like 4,000 and pros are like 6,000 plus. So, I'm very far away from all of that. As always, first quickly, just a few shout outs uh for our events that are coming up. So, I'll be at GDC at the start of the week on March 9th, we'll have Pocket Gamer Connect Summit San Francisco. It's a day of mobile related talks. Then, we'll be in Dubai May 20th, 21st. Uh we'll be in Malmo in May. will be in Barcelona June 151 16th Shanghai July 30th Helsinki October 30 14th Bangkok October 27th Jordan November and Grand Canaria in December it's it's quite a long list to reel off and obviously as I mentioned before we'll do the mobile games awards in August during Gamescom and next month will also be during PGC Summit San Francisco will also be revealing the top

US game makers right uh we're going to jump into the actual So first up um as always quite a big moment of the year Supercell released its financials and as always along with that the CEO Ilapan releases his big blog post and in terms of its financials so revenue declined 4% year-over-year to€2.65 billion in 2025 but that was a near record. Remember 2024 was a record at least the new way that they calculate uh revenue on a non-GAAP basis. Bit rose by 6% to 932 million euros and appar and it said it contributed €220 million in t in corporate income tax they which they love to shout about. So there you know they were pretty happy and one of the things that they really talked about was kind of the success of Clash Royale which I'll go into in a bit. There's two parts of this story I guess which had a really big year in 2025. It was like it's Brawl Stars moment bright revenue surged massively. One of the key parts

really or or the key part of um the blog post this time was talking about innovation kind of supercell's struggles with new game releases and the challenges that the industry faces. So Ilka said that the industry is is at a crossroads as he sees it. He said, "Are we satisfied with the status quo, relying on optimization and incremental improvements to the great games we've already made, or are we brave enough to dream bigger, be more ambitious about what this industry could become?" And if we are more ambitious, what do we need to do to kick the industry into new growth? I believe the answer is innovation. And he pointed out some stats. Apparently, of 53,000 games launched since 2020, 22, so 0.4% uh it can't be 0.4%. Must be 0.04 before anyway have grossed more than $1 billion. I I feel like that's just a weird stat to point out because a billion is a rare achievement anyway. And then he goes on to say 20 20 of

these titles came from developers in China, Japan, and South Korea. Two, Dream Gages Royal Match and Scope Police Monopoly Go were developed in the West. I guess it depends where you consider Turkey is because it kind of straddles both. He said, "Chinese developers have a natural advantage in the world's biggest market, which is very lucrative with like the third party Android stores in particular." He said, "Western developers have not brought radical new gameplay innovation to the market in the vein of Clash Royale, Pokémon Go, and Brawl Stars." And he said, "Rather than innovating, the industry has gotten very good at optimizing what exists. AB testing, improvement, squeezing more out of proven formulas. Uh the work of improving live games is not the problem. But here's the reality. Live game excellence alone doesn't grow an industry. it maintains one uh etc etc. What could have been and any sort sort of talks about the um I've seen what happens when an industry stops innovating. Remember the era of those downloadable PC map games with 60-minute free trials back in 2005. Eventually the market consolidated around just free genres match free hidden object and time

management games. Endless optimization minimal innovation. What could have been a massive market became a limited one. Obviously we do not want mobile games to end up in the same place. I also kind of disagree with that because then obviously like these industries get disrupted by technology. I don't think it's because the games be kind of become sy. I don't think that's why the mobile market has grown slowly. So I guess a few points about why Ilka would say all this supercell's position and what I think is actually happening in the market. So I think there has been innovation right. So, Monopoly Go, it built upon, you could call it iteration, but like it built upon what Coin Master did and it really kind of innovated with like the social features, for example. Other areas in that game. It's really polished as well. By the way, it's such a good game. Like, it it didn't make many billions of dollars just cuz it's Monopoly. It didn't make that just because it's a clone of a successful game. They obviously did other stuff with that. And then then you actually look at China, which he did mention. And

so you've got some of these Chinese developers that have released like hit games in certain categories, but what they've actually done is one, they've innovated and secondly, they've grown them massively. So for example, the Forex strategy space, Century Games and First Fund came along with white out survival and last war added sort of some hyper casual elements at the start of into those games. They've grown the 4X strategy market there. It's extremely lucrative. It makes what went before look really tiny by comparison. And they've innovated and grown those genres. Microphone's done the same with Gossip Harbor. It's kind of really just far and away smashed any other kind of game that's been in those genres. And it's and then the interesting thing that they've done which Supercell doesn't seem to do is I guess they what they do is they kind of seem to build like I'm not going to be very good at explaining this cuz obviously I'm not a designer. They kind of built these systems that they can then sort of build upon and replicate for other games. So for

example, you've got Gossip Harour, then you got Seaside Escape. I think Super Plays Eladory spoke about this at Roioon. Um, which was kind of how they do it. They build these kind of systems and they can build like new games even if they're a bit different on top of that. And and Supercell just has this thing in its bonnet that they have to innovate like basically it would seem at least from the outside that they have to kind of start from scratch every time, build something completely new and hope it's a hit whereas I I guess other companies that have been successful are doing it differently. So I asked why Supercell hasn't been able to launch a successful new games while rivals have. And to kind of counter some of's points, I said given that the company is highly profitable, backed by Tenset, has studio in Shanghai, and has access to China's highly lucrative market. He said like that was the advantage Chinese companies have. But that is the same advantage that Supercell could have. And then he just said, I think the simple answer is that we just haven't been able to produce

great enough games. It's very competitive out there. We'd love to be at the top, but we aren't. That's the truth. They continued adding simply that the company has to do better and build better games. I think that's really the crux of the matter. This whole to round out my thoughts there. I think that the whole blog post was basically like a PR move to and and a call to action to try to get founders to join the company because they're now offering these kind of new incentives of profit sharing uh to it to try and find its next hit game basically. And they it would seem to be like they're looking externally rather than just internally now at the moment for that. It's been seven years since their last hit and they can't just rely on live games because Clash Royale's revenue has declined a lot. Brawl Stars isn't like the high it was. Maybe they could do it again, right, with another game or one of these games, but I think they can't just rely on these surges in old games, and I think that's what they're kind of contending with. So, next year's blog post will be interesting if none of that happens. Uh,

sorry, I I'll stop there, but any uh any thoughts on all the Superstars stuff? No, not not much to add, but yeah, it is just interesting. They're in this weird spot. You know, they they've got numbers in some of their games. Obviously, they've got some massive games that are so popular, lots of people know them, but then they've got this other side of it where, like being honest, they're going to want a new hit game, right? Like I said, it's been what, 7 years. They are going to want that to happen. I don't know this whole innovation versus iteration thing. Not sure about that. But yeah, it it is interesting. There's actually a couple things I forgot to say. So, so one of them as well was I I did ask about are you taking lessons from these other companies like a Century Games etc. on how they've found success and he just sort of skirted it a little bit by saying well they're taking lessons from startups from all over the world and he said basically what we're trying to do is we're trying to replicate what makes startups work. If you think about innovation as a whole, what type of companies mostly bring these new breakthroughs and innovations

to the market, that innovation mostly comes from startups and they're trying to create like the same kind of constraints and incentives that a startup has and put it in Supercell and hope that that creates success. Like I said, we'll see. I've got more to talk about on Supercell and that blog post uh in a bit, but we'll go to some other stories first cuz otherwise I talk for 30 minutes and nobody wants that, right? So, on next, uh, Paige, what have you got?
Um, I was tempted to talk about Ubisoft stuff, but if there's one thing that trumps Ubisoft for me, it's Resident Evil. We're going with Resident Evil. Um, basically their mobile game, Resident Evil Survival Unit. It's reached a new milestone. It came out in November. It got 2 million downloads in under two weeks. Now, it's passed 5 million. It also recently just rolled out across the Middle East, North Africa. It got, you know, full Arabic language support. So all these things that are obviously good for its growth. It seems to be showing in these download numbers. And so for me, I'm a massive

Resident Evil fan. I've got a lot of nostalgia tied to that franchise. So if you take someone like me, Duplicate Me by millions. I feel like is that kind of what's happening here? You know, like it's a longunning franchise with a player base is very loyal to it. People will download this game just because it's called Resident Evil something something. And there's another mainline entry coming out this month. So, it's on a lot of people's minds anyway. So, I feel like it's got a lot going for it in the sense of it's fresh in people's minds. It's Resident Evil and sometimes that's enough. And the numbers look good, but I feel horrible saying it, but I want to like this game more than I actually do because it's it's such an odd game. So, like the first 20 minutes of the game are fantastic. It feels kind of like an old school Resident Evil game on mobile. It's sort of like the odd fixed camera angles. You do some exploring. You do the odd puzzle here and there. And obviously, you know, you fight zombies. Then that part ends and it throws you into more of a city

builder type mobile game. And then certain parts of it, there's like tower defense stuff. And then there's still the like exploration thing as well, but you do that in smaller doses. So, it's kind of I don't know. It's it's a weird mobile experience where sometimes I feel like I'm playing four different games at the same time. And I feel like for some people they're going to play it. They're going to see that first 20 minutes and think, why isn't the whole game just like this? And I feel like the obvious answer to that is if the whole game was like that, it would be a lot harder to monetize it. And I feel like the city builder aspect is where they get that monetization from, which I get with it being a mobile game. But then that brings me to the next problem. the way it monetizes for me personally, I think it's very aggressive. So, there's like certain characters that you can get for like your town, but you can only get certain characters like, you know, like popular fan favorites like Leon or somebody like that. You can only get him by spending real money and then sometimes you're locked out of certain things like sometimes you have to wait for days in real life or something to

build if you're not willing to pay. So, I would just say like with with games like that, there's always that fine balance of I feel like people don't mind spending as long as it kind of feels like, oh, you know, I could get by without it, but it is just convenient for me to spend, whereas this game does lean towards I feel like I have to spend to get anywhere at the point I'm at. So, yeah, my my general thought on it is there's some great aspects in there and I feel like I understand why like the numbers have gone up. Like I said, they've just reached out to new territories. That makes sense. It's on people's minds, but I do worry for its longevity because the game is just a bit of a mismatch of things with really aggressive monetization. So, I hope it stands the test of time, but I am a little bit skeptical.
Thanks, Paige. Aaron, what have you got?
Yeah. So, first up from me this week is a kind of Super Bowl related story, which is really more about the the ads surrounding the Super Bowl, which, you know, they can often be a pretty big

deal. They were said to cost between like 8 and 10 million for a 30 secondond slot this year based on reports, but obviously, you know, they get in front of a huge American football audience and then everyone else gets talking about it too thanks to the internet. And this year like there were a notable number of kind of tech companies like Google and Microsoft and various AI things and a couple of games as well which had adverts. Um so firstly so there was a minute long Pokémon advert. So I am curious how much that cost. I say like 30 seconds is at least like 8 million. And then this advert's also full of celebrities. And basically the the purpose of it is celebrities saying what their favorite Pokémon is and what they like about it or why they see themselves reflected in it or whatever. So like Lady Gaga said her favorite is Jigglypuff and then did a little bit of singing of the like Jigglypuff Jigglypuff song that was in the anime back in the day. Um and then

there were a bunch of other celebrities, most of whom I had never heard of, but they're celebrities apparently. But I'm really not not into that world. Um, more interesting to me was actually what people said for their favorites. Initially, I thought it was just going to be all like the original 151 and then I'd be, you know, going like, oh, you know, these old people only choosing like Pikachu, you know, they don't know the modern stuff. Um, but someone said Luxray, which is cool. Luxray, you know, that was from my first game on the DS. Um, and then there was a footballer who said Zygarde, which I thought was quite, you know, a modern one, relevant at the minute cuz it's kind of the uh the face of ZA basically, which is the newest game. So whether whether that was um a happy coincidence or a little bit more as to why Zygarde was mentioned. Um, but it it was a bit of an odd trailer at the same time because it wasn't advertising any particular game. It's literally just

Pokémon as a brand being advertised and with the fact that it's the 30th anniversary in a couple of weeks. So yeah, on February 27th and it seems like this is going to start a bit of a uh like a campaign that's going to go on throughout the year of basically I guess celebrating people's favorite Pokémon. Uh, so the Pokemon company put out a statement alongside the trailer saying that um, yeah, basically this is the beginning of a year-long thing they're going to do that says it's going to be calling on fans to share their favorites. So, I don't know if from now on it's just going to be them doing like social media drives to get people commenting or whether they'll actually be loads of trailers like this. I think they did quite a few things with celebrities for the 20th anniversary. Yeah. So that that was that was the Pokemon trailer for, as I say, just for the Pokemon brand. And then there was also a Mario trailer for the Super Mario Galaxy movie, which is set to release in cinemas in April. So they showed off

like a new trailer with Yoshi and him on a motorbike and eating Kamik and um doing stuff with Mario and Luigi basically. So yeah, mainly I guess it's that games brands are or have been tapping into the Super Bowl audience this week. Pokémon also had a trailer at the Super Bowl 10 years ago for the 20th anniversary which we were then discussing cuz I'd mentioned that oh like that's when they changed the slogan like they they don't really use got to catch them all anymore. And for the 20th anniversary, it was Train On, which I haven't actually seen for ages, but for like the whole of 2016, it was Pokémon Train On, which you didn't seem a big fan of, Craig.
It's awful because it
also not a fan.
The The catch was it's iconic.
It is Pokémon. It sums it up so well. And to change it is insane. That's like changing, as I said, it's like changing

Twitter to X. Suddenly, you lose like people saying, "I'm gonna tweet something. I'm gonna post it." So, it's like you've lost, you've lost like the iconic parts of your brand,
but you can't catch them all anymore.
But you still can because within the context of the one game, you're catching them all that are available. That's ridiculous.
The only thing I can say for it is at least it rhymes. you know, Pokémon train on. It's a very low bar.
Yeah, but it doesn't make a catchy song like Got to Catch Them All.
No,
that's the that's the main thing. Anytime I think of Pokémon, that song instantly is in my head like singing it in my head. That wouldn't happen with Train On.
That's why now now all I can think of is Aerosmith singing Dream On. But with Train On, it pops into my head and I'm like, "No, I mean I that's a really great song. I just Nobody wants something like that. It's so dumb. Sorry, but it is.
Yeah, thinking about it, I can't think of the last time I saw them use it, but certainly throughout 2016, like that

whole year, basically any Pokémon related thing at the end it would have like train on. But yeah, much less prevalent these days.
All right. Uh, thanks for that, Aaron. We got to move on to the next story, which is my kind of continuation of Supercell stuff. But following that blog post, there's been some controversy. So, I'll kind of go through my story here. So, Twitch streamer Jinxy, who's got 8.9 million followers, and he's lashed out at Supercell after that blog post where Ilkapalinan credited the team for Clash Royale's revival last year, but not content creators. So, as I said earlier, Clash Royale was kind of a a key pillar in the company's new record-breaking revenue year. Uh, it was first released in 2016, so about 10 years ago now. And uh he it was said to have seen uh new players the number of new players grow by almost 500%. And uh re-engaged players doubling. So last year at Magic estimates about six about 647 million

which was up 148.5% year-over-year. It's a very very big growth. In the post paran sorry in the post Ilka references work from the team such as the addition of new features, changes to progression. I don't know how to pronounce this. The Bob the Barb Al Baltian campaign, which was the campaign with Michael Bolton around Valentine's Day. Interestingly enough, while also alluding to word of mouth, discovery, and community sentiment as reasons for the title's rise. He did thank content creators in general right at the end of the post for supporting Supercell, but not specifically for Clash Royale and its rise. So, Jixie took umbrage at the lack of recognition for content creators in building the game's popularity. He was streaming it kind of early last year in kind of in time with the as the game started rising and I guess he is kind of being credited along with some other contrib in particular of basically helping that game surge in in revenue and popularity. Jinxy said he called that post and those comments he called it probably the biggest spit in the face

I've ever seen and he said sorry and Mr. Beast replied to that post which is on X and said I only started playing again because of you. And so some quotes from Jinxy from his stream said part of me I'm so angry looking at this. I'm not going to swear. I guess you could uh fill in the blanks. I'm so angry looking at this where it's like part of me wants to be like after reading what the CEO of Supercell just said, I hope the game dies. But then it's like I don't because there are so many amazing creators on that game and let alone that amazing human beings that I've met on the game where it's like I don't want the game to die for them. Uh but my god this company is horrible. Like literally horrible. And he added, "Don't you dare take credit for 2025 being the best year that the game's had since 2016. Let's not do that because now you're rage baiting." So yeah, he's he he is not happy at all. And I will say just to add that in January, Clash Royale's revenue has

declined significantly. Still very doing extraordinarily well. Generated $37 million in gross revenue in January, which is down nearly 50% from December. Did note in his post that fans had been frustrated with some recent changes and the team was working to address these issues. But I think like this is this is just a massive error I guess by the Supercell team which does pride itself on how close it is with content creators has big content creator programs staff that manage that and that it always engages them to kind of for their new game releases in the part of the PR push for founders. It said why would you start a studio on your own? We have 290 million players. we have this kind of content creator uh group a group of content creators that you could leverage that for your new game and they haven't then I guess properly thanked those players sorry that haven't properly thanked those content creators and they must see internally I I guess I I'm curious what they see internally did they see that there was a clear link with the streamers or not and then was

it just kind of an oversight to not mention them was it deliberate I don't know just one more thing that I wanted to add is just these annual blog posts I love them. I think they're great that Orcha does them, you know, whether you agree with what he writes or not. But I guess one of the questions moving forward is, is it worth it from a PR perspective? What do they get out of it? Because Supercell is still a great company. It's one of the biggest mobile games developers in the world, but ultimately it's not at the top of the industry like it once was. And so, what is the industry getting out of those posts as well? I think it's good to learn about successes and failures. And yeah, it is all basically just PR. But it is interesting. Last I I've spoken to just a couple only a couple people that have basically said, you know, what why does he do this? Like and one said, uh, you know, who is he to tell us what to do when they've not been succeeding. So yeah, big controversy. We'll see where that goes. Paige, what's your next story?
It's just a quick one on some Roblox

figures. Aaron looked through their 2025 financial results. some interesting numbers in there. So, the platform generated 4.9 billion in revenue over the year. That was up 36% from 2024. Growth actually increased quarter by quarter, so ending with 1.4 billion in Q4 alone. User spending also saw a surge. Uh, in the last quarter, Roblox had around 36.7 million monthly players. Overall engagement, again, huge. um players spending 124 billion hours on the platform. Very intrigued to know how many of those hours are just my niece alone. So I'd love to know that figure. But what's really interesting is what's driving a lot of the big numbers, which is often just a couple of breakout hits. So obviously like Grow Garden, Steeler Brain, you know, they pulled in record numbers. And I think it does show how much one or two big hit games can help a whole platform grow around that. And it also kind of similar to what you were

just saying in the last story, Craig, how important content creators can be for platforms like this. So yeah, big numbers. I wonder if we'll see games like Grow Garden, Stealer Brain just continue to grow over this year or if this year has like its new version of those games if something else, you know, becomes huge. Yeah, Roblox in general, I think I say this all the time, but it's such a strange platform in the sense of it's huge. UGC is such a big thing and Roblox is like a massive one of those that is leading that way. But then there's also just all the safety concerns. I feel like every week there's a new country that isn't happy about it. Um I think it was just this week Australia, the Australian government were writing letters and wanting to speak to roadblocks. So yeah, you know, great numbers for them, but also just still lots of ongoing concerns around safety and how to manage that. Yeah, it was just uh Egypt has just banned it and I think Egypt is one of the countries that drives the highest number of downloads in that region. So,
controversy continues, but the company's doing very well. It has obviously done a

lot of changes for kind of child safety, but is it doing enough is is obviously the big question that's still being asked. All right, thanks Paige. Aaron, what about you? What's what's the last one? Um well to quickly add on the Roblox theme as well. I thought it was quite um interesting that so like they highlighted how their uh sort of bookings had exceeded expectations and that they targeted growth of up to like 21% and then because of games like Grower Garden uh ended up increasing by 55% year-over-year. And they actually highlighted in their like financials that they're going to be changing how they do forecasts cuz they said because evidently, you know, a breakout game can come out of nowhere that they can't have predicted, you know, the year before whether that kind of makes these forecasts that relevant really. So I think they said they're going to change from doing like yearly forecasts to just quarterly forecasts because yeah to allow for the fact that

these could end up being way off if you know depending on what games are available on the platform. Like clearly yeah they have had quite a big impact even on yeah just like how Roblox is going to be um predicting stuff I guess which yeah I just thought was quite interesting.
Interesting that they would change it.
I'm curious what investors think of that. I just saw like for whatever this matters
I just saw like there's like headlines or you know shares soared after the financials and then you look at them now they've like declined today quite a lot possibly because the ban and the Australia issue and then they if you look like over the past year like it had a real high in like September October back way back to July which is probably the height of the grower garden is still a brain stuff and even now they kind of smash their expectations like share price is half that at the moment.
So I think it was August was the peak like concurrent users at least. So but yeah, I think Grow Garden was kind of

March through August time that at least we were reporting on it a lot for smashing a load of records.
Interesting. We'll see. Uh well, we'll give it a few more weeks. See what other controversies surrounding Roblox or if there's a bit like you say pa there's a new hit that comes out. So thanks Aaron. What else have you got?
Yes. So my other story this week is about Square Enix's financials. Um we seem to have no end of financial reports at this time of year. So yeah, they reported that net sales have fallen by more than 13% during the first 9 months of the current fiscal year for Square Enix. Um so they generated about 1.4 billion during the period which was down from about 1.6 billion over the first n months of the previous fiscal year. And I also looked back and saw so this kind of continued fall is even following last. So they're lower than last year and last year's were a 5-year low already. So yeah, not a great sales

figure for this 9-month period. And then there was a bit of a breakdown of different um categories, not super in-depth, but so they look so they had like the digital entertainment category, which is mostly games across platforms. So that accounted for 50 57% of total sales or just under $790 million. Um I guess that's over the first three quarters. So that was down 24% year-over-year in the digital entertainment segment. Um which is also more than the overall decline of 13%. Um games for smartphones and PC browser titles were specifically highlighted for their decline year-over-year. Square Enix didn't actually say how much they'd gone down, but said that they had declined and attributed it to weakness in existing titles and again this kind of subcategory of mobile games and PC browser games also fell in the previous fiscal year and then they've you know

done it again here. So all quite a a bad direction there. Um the was noted that um despite the kind of overall net sales decline, there was growth in operating income. So this was actually up 39% year-over-year to almost 300 million. Digital entertainment accounted for 229 million of that which was up 28%. Uh so again you know revenue net sales are all down quite badly but um operating income is on the rise uh which is the inverse of a few years ago. So Square Enix a couple of years ago announced they were doing kind of a reboot strategy um to lay the foundations for long-term growth I think is how they put it. And that strategy is kind of a multi-year thing leading up to next March, March 2027. And yeah, since they've whatever,

you know, what exactly this reboot strategy entails, it has sort of flipped those results. So before they changed direction, their like net sales were um kind of stronger, but their operating income was worse and now it's kind of inverted where even though they're selling less, the operating income is higher. So yeah, I guess that's worth noting. You know, I'm sure it's better if sales and operating income are up, but it's not not kind of all crashing and burning, I guess.
Well, I guess the reboot was was basically lots of layoffs, right? And um restructuring in particular, their western business or pulling back from that. Obvious their reset, their reboot, whatever, however they want to term it, is going to take a while before we see if there are any fruits of that. I'm still interested in your previous thoughts, Aaron, on like that they announced for their mobile business was that they were going to look more globally at the mo for that and then the next game was here's a game for Japan.
Yeah. Yeah. They seem to have a habit of

doing that cuz Yeah. Ridiculous. wrote an article probably over a year ago at this point um looking at like yeah here's all you know the number of times they've said that you know they're going to try and grow brands globally and then yeah they just keep releasing mobile games as Japan exclusives like so that one was Ember which I think is an original IP but yeah even some other titles like where the kind of main series is available in the west even and then they'll do a mobile spin-off just in Japan and it's like that doesn't really make sense with what you keep saying your your strategy is.
I conspire to do that. Obviously, it's just it's just doing it's saying something and doing the opposite. Square Enix, I I I I haven't had a chance to read them. I don't know if you saw. They're always very good at saying like we're going to invest in
buzzword. I don't know if they did that this time. Surely
notice it this time, but yeah, because um I think it was them that they were kind of they seemed like they were going to go all in on like NFT stuff for a for

a bit.
Yeah. And then that doesn't really get talked about anymore.
It's always something. It's cloud. It's web free. It's block, you know, blockchain. It's probably AI now. There's always something that Square Enix does presumably to try and pump up the stock price. I uh I had a quick look on App Magic at mobile revenue for Square Enix's portfolio. So net revenue 2024, 370 million. If you flash forward to 2025, that's 370 down to 233 million. So, I mean, while whilst most would love that, that's like a pretty dramatic fall.
And for a company with IPs like Final Fantasy and stuff as well, like
I wonder how fans, sorry, I'm going to start again. fans feel about the Final Fantasy franchise as it stands at the moment was source of one but you hear like so this guy there's this YouTuber called and Twitch streamer called semi webs and he became very popular through his streams of Clare obscure and now

Clare obscure is like well known for everyone being very much inspired by Final Fantasy but it's like the game of the year last year why can't Square Enix do that they've kind of moved away a lot from turnbased and been much more actionoriented Anyways, Sebie waves quite who has very good knowledge of the Final Fantasy series. Ever seen a huge fan. It's just interesting to hear his takes on like where Square Enix has gone really wrong and he he doesn't like as personal like the Final Fantasy 7 remakes. I think I'm correct in saying that. I hope I have. But he has criticisms of them at least compared to the originals I think is a better way to put that. I'm just curious like how much it's a bit strong way to put it but like damage that franchise has received over the years to like the core fan base and then moving forward even if they kind of sort out things internally at Square Enix that's going to take quite a few years and you know if they released a quote unquote good Final Fantasy game that leverages some of the more classic

takes on the franchise I guess like will will things improve financially for them or is Final Fantasy just not what it was? That's a really weird weird long way of saying it, but I just wonder how how the IP stands as from reputation. Right. Anyway, okay, enough of me rambling. So, that brings us to the end of the week in mobile games. Thank you very much, Aaron and Paige, for your insights today. That was great.
Yeah, nice to be here.
Thank you everyone for tuning in and listening and have a good one. Goodbye.