SuperJoost - The Entrepreneurial Journey of Professor and Author Joost van Dreunen

To the moment we raised, we had years of sales history. So, I could see my pipeline. I could see my conversion rate. I could see my ability to upsell. Once I have 100 users from company X, can I charge more? What do you like how do I negotiate those terms? Can I charge them more per seat? So, all these sort of mechanics of how to build and grow your business, we already had enough material there where it's think young companies early on you don't have that pipeline to look at for instance. So, then you end up with these naive forecasting like oh, we're going to capture 5% of a zillion so therefore we're going to all be billionaires sitting on the beach. That's not math. That's just that's a narrative and we were able to really found it and then it's much easier to kind of arrive at a number quicker. Welcome to the Gaming Founders podcast, a show where we interview the founders that have shaped the gaming industry. I'm Eden Chen, the CEO of Pragma, a backend game engine founded by engineering leaders that built the platforms for some of the largest live service games like League of Legends,

Fortnite, Destiny 2, and Plants vs. Zombies 2. Pragma powers services like accounts, matchmaking, and player data for the world's most ambitious live service games. And I'm Kevin partner at Upfront Ventures. We're a venture capital firm based in LA and San Francisco. I lead game investments both in studios as well as the pick and shovel tools that power game developers and content creators to do their best work including Pragma. We interview founders on their origin stories, the tactics that helped them survive and thrive, and key lessons for anyone interested in building the next generation of leading gaming companies. Learn more and subscribe today at pragma.gg/gamingfounders. Today's episode is with Joost van Dreunen, author, professor at NYU, and serial entrepreneur in games. Joost has built his career studying and forecasting what's around the corner in gaming. He crafted his PhD around the economics of games before that was a

field you can study. Bootstrapped a profitable gaming market research business against well-funded competitors many times his size, ultimately exiting it to Nielsen. Then coalesced all the lessons and perspectives from his leading gaming clients into a book about the rapid globalization of the games industry. He's back at it again, working on a new book as well as his second startup. Now, onto our conversation with Joost. Hey Joost, thanks for joining us on the Gaming Founders podcast. Welcome. Thanks for having me. Maybe we can start with your early story. How did you get into games? How did you end up where you're at? Oh, that's a loaded question off the bat. Yeah. I guess in my own mind I got into games as a kid playing. So, you know, sort of inevitably became the space where, you know, you could just be your own self or whatever. You could like, you know, play I could find a place space there that I couldn't find anywhere else. I'm terrible at sports. I'm a Dutchman. I

can't kick a soccer ball to save my life. So, naturally you just end up to like, "Oh, let me find something else to do." I, you know, I was big on chess back in the day. I'm not I'm good at nothing, just for the record, but I enjoy it so much. And so, once I got to the part of my career where I was spending time doing a dissertation and like studying for my PhD, it's like, "Well, the one thing that I really want to study is games, to be honest." So, I kind of made that work in early 2000s. And then that kind of became the basis of everything else that followed. So, so that's really my thing is like it was just a natural curiosity for a place that I enjoyed so much as a as a child. Did you have to create your own grad program? And like, was this I assume studying a PhD in games was not quite a thing at the time. Oh, it was a disaster. It was um you know, I said this in a nice way. It's the So, I joined a program that gave me the most freedom because there was no curriculum. There was no There were some game design curricula around the country here in the US, but mostly, you know, I had to build on

media theory, economics, you know, social science, and I ended up having this actually rather privileged position of spending 3 years putting together like every semester I'd come up with like as many credits as I could. And I would go to the film school. I took law classes and topology history and just making the case with each of these professors saying like, "Well, here's my pitch." And they're like, "What are you doing?" I said, "Well, you do art history. I want to, you know, talk about the aesthetics of video game and how they've shifted from two to 3D or whatever." I know I don't know. Tell me what you know. Or architecture like, "How do you build online environments? What goes into the sausage or whatever?" And being able to sample those different perspectives is just amazing. I would take grad classes for the rest of my life if I could afford it, but of course after 3 years that ended and at that point then I had enough to kind of combine it into like a larger thesis. But to your point like that didn't exist in the early 2000s. Now it's a little different now, but that was the wild west.

Yeah, makes sense. And then I guess you went from the PhD directly to starting your new company or is there anything in between? I was able to afford the PhD by working as a gun-for-hire analyst. So, you know, you start off doing sort of more generic stuff. So, I worked in the think tank at the business school and studying 100 different media industries over period of 20 years all these data sets and it sort of all became journal articles and a couple of books, a congressional hearing. And then, you know, that's cool, but you know, academic think tanks they at the time they paid me 11:15 an hour. I go, "That's That's almost enough to live in New York." Just just short. So, I ended up doing some more commercial work for like large market research firms and consulting companies and eventually realized that there was a better model by hanging out my own shingle and then that became you know the larger commercial effort. Got it. Maybe talk to us a little bit about the the founding of SuperData Research. Uh co-founders I I

think it was a family business, is that right? Um and how did that all come up come about? The genesis myth of SuperData I suppose goes something like this where I'd been working as a grad student and you know once your paperwork runs out you got to go you got to go back to rainy Holland. I said well what can I do to kind of insulate myself and just getting an LLC set up or some kind of S corp structure something just to protect myself but also to you know have some tax benefits there. Health insurance is nice. Uh you know it that's formalized the effort, right? And you're writing reports at the coffee shop it's cool but can we just kind of structure this a little bit better and then so that was 2009. I'm sort of the main expert so my co-founder my wife she's the entrepreneur. Like she's been building businesses since she was really 8 years old. Um and she looked at me sort of doing this thing like that's cute and then looked at my books saying this is a disaster don't do that this way. And I very quickly realized like okay you know we could formalize the business. There

is growth here in the market so uh you know gaming was growing and I was able to like have all these conversations with companies that would become our partners or customers. But you also need the operational back end and so 2009 late 2009 I started sort of as a formalized analyst on my own and then by May 2010 she had joined in some capacity to just do operational things allowing basically free me up from having to correct my own mistakes all the time and going after like the big meaty part of the digitalization of games. And the simple model was look if I'm writing reports if I'm doing all this contra higher stuff for large companies it would be more valuable to everybody if I could supplement that with proprietary data. If I had no longer the inevitable I say reliance on third-party vendors, survey companies, or credit card companies. If I had my own stuff, then I could use that as a metric to say

the weather is good, the weather is bad, XYZ. And so in 2010, with my co-founder, we were I was able to then start negotiating these partnerships, which took us about 3 years to really formalize, but it grew out of sort of a curiosity and a necessity, and then we just start to rationalize that effort and then like, well, what what is the bigger thing here? Like, how can we do a better job for everybody? And how can we make some more money and grow this thing, rather than depending on the project-to-project basis. Like, that that grind is tough. Maybe you can share a little bit what was the state of gaming data or research like was it mostly just project-based work that other consulting, you know, folks were doing as well or how did where did these gaming companies and publishers get most of their insights and data from at the time? That's an excellent question. So the So in 2010, digital was less than 5% for everybody. So they said like, yeah, it's cute that you have a PhD, but who cares? It's so small. But sure, have it. Here

Here's a spreadsheet. Tell me what you find. And so it was this sort of non-serious effort because most of them relied on the NPDs of the world for package good sales. Most of them looked at Nielsen and the IDCs for the forecasting of hardware units and all this kind of stuff because the business was so retail focused. You know, the the idea that you would do anything other than sell a $60 game at GameStop didn't make any sense. So I think if you if you if you look at the articles from the early days of mobile and the early days of free-to-play in particular, a lot of C-level people dismissed it saying like, that makes no sense. Why would you give your game away for free? And so, the thinking was that's a dumb model. Or at least it doesn't gel with how we do things. And then once that started to turn, that changed things dramatically for us, of course, because then it became a different set of metrics that conventionally uh these large firms, you know, all the way from Activision to, you know, further down the food chain, they would look at the very simple metric, which was number of units sale

sold and the average selling price. And so, can we get 3 million copies out of there and can we keep that $60 price point, you know, at 60 for as long as possible? If you do the math, uh or if you look at the the trending, it's like retailers were very quickly discount those numbers and as the market became more competitive, you know, there's a lot of pressure on keeping your $60 or your your recommended sales price high. And your window in which you can sell your big production after 5 years of working on it becomes smaller and smaller. So, there's a lot of pressure on your economics there. And then digital allowed these companies to think about it differently. As you know, they didn't do that at first, of course. A lot of them, particularly the incumbent and the legacy firms, they were a little slow, as usual, to adopt. The newcomers, all the way from Tencent to Supercell to Riot and, you know, all those different massive entities now, they realized that you give the game away for free and then monetize more gradually, what that what Mitch Lasky will call forever games.

And so, then the data sets changed dramatically. Now, we need to have user acquisition costs, we need to have conversion rates. And so, the metrics shift from units and average selling price to monthly active users, percentage of conversion to spending and average spending per user. And that that part we figured out quite quickly then because then it's, you know, all of a sudden it went from less than 5% to a growing bit of their uh overall revenue model. And then they need to know, like, okay, well, if we're converting 5%, is that good? We don't know. 2%? is that the average? And so you had some of these mythological numbers out there, but nothing tailored to particular genres, titles, markets, demographics, and so on. And there was just nobody was supplying that on the data side. So that's where we came Was something like App Annie already around at the time or or it was all starting to come out right around then? App Annie was around. I am New York is a a very large small city and so I knew some of the investors here

and I guess a little bit of the inside from their perspective. They'd raised like a hundred million dollars at the time, you know, they were just killing it. But I didn't I had I just started writing my first reports on mobile and it was kind of I it was just as simple as that. It's like here comes this hundred million dollar gorilla. I was like, okay, I guess I guess that's what we're doing. They had bought out this Dutch company Distimo at the time. I had a good connection with them and they had done basically similar stuff to App Annie where you have this ranking space I'm sorry, algorithmic based ranking system where you could figure out if you know the number seven and number 10 in the ranking, then you probably figure out number eight and number nine. And so that model because of the firepower behind mobile very quickly ran away from us. However, you know, the top 20 in that space is just as stubborn as everywhere else. So App Annie eventually, of course, also had a lot of trouble like just getting coverage in all these major companies. So that still allowed us to cherry-pick a few of the cross-platform titles. We focused initially very much on PC and console as

they were digitizing. And so we would work with Microsoft on you know, basically like one of the top X hundred titles that are meaning to the space to racing, MMO, shooter games, whatever. And then try to do that as best we could with the data that we could get. And then mobile became a little bit of an add-on for us more than anything else because the competition there was so aggressive. And I I a little settled now. Like there's other companies like Sensor Tower and a whole bunch of others, but it was um um getting your foot in the door when nobody knows you, that was the hard thing. And you couldn't wow them with like big marketing events, you couldn't subsidize a lot of development. We we did not have $100 million. We had no no money. We bootstrapped the thing. So, we were very much focused on like, okay, like where can we make a difference? And mobile wasn't the place at the time. So, that was more of a strategic decision for you based off of the competitors in the space to sort of be PC console. I I guess what were your feelings of the competition? I guess was

there, just as a founder, I mean, it's something that, you know, you can obsess about competition, you can ignore it. Where were you at in that spectrum? I think I varied a little bit. I I do have a healthy paranoia when it comes to competitors. I always want to know what's up, right? Purely because, I guess maybe a nice way to say it is like sort of scientifically, look, if I'm wrong, like that's a that's a result, too. You know, if I find out that I'm totally missing something, like, okay, well, then what am I missing? And so, being open to the feedback, and particularly the harsh feedback that shows the holes in your plan. That's I've always found it very valuable, but it's very confrontational. So, that did kept me up at night. However, you know, at some point, you have to realize that that was also the relative. Like, often, and particularly gaming, I guess one of the components of it was it was growing so quickly that there's enough to go around. A lot of companies will shop for multiple vendors, so you can kind of compete on price. But, really it's having either a very distinct relationship with the company that they

liked you and trusted you for a long time, or something so unique or so special that no one else can replicate it. That kind of give you some insulation. And and once we started to see our numbers grow, once the team started to grow, I think, well, you know, in spite of all these other giant incumbents and competitors with all their money, like, we're growing. So, I guess they're not that scary just yet, right? And so, the the natural inclination I always had was this naive arrogance that like, "Well, if nobody's going to stop until they stop me, I'm just going to keep going. See where it gets me." At some point, you guys raised a round, right? How did that I I guess it it seemed like it was more of a you know, you were doing consulting in the beginning and then you guys were bootstrapped and then what what was the kind of process of fundraising? How did you decide to do it? How did that come about? Yeah, so Jay from He was at the time he was still transitioning from McKinsey to to Makers. You know, he and I had been working and we've been like seeing way too much of each other at like all these conferences and events. It's like, "Oh, there he is again." It's like, this

Dutch guy. So, but we had a good rapport. We were at the time like two blocks from each other in New York. And it became a natural conversation. And so, once he said, "Well, I'm starting this fund." It's like, "Well, I'm thinking to raise because things are going really well. Like we were doubling year-over-year and I'm sort of I'm still naive at at raising funding in that sense. My own, but the best money is the money that you don't need because it's much easier to ask for but if I'm sort of my back against the wall, it's very stressful and I'm not sure that that's really my vibe. But I spoke to Jay and you know, that round was oversubscribed and closed in like weeks. And it was a matter of you know, combination of like the business was doing well. Let's add some fuel to the fire, but also work with the people that can help us out. Like people with connections, people that understand what we're trying to do that have been working with us for a while. And so, I still kind of operate that same sense where you know, funding for me becomes very quickly a conversation of like, "These are our friends. We've been working together. I have a network of mentors and people I trust that I talk

to and have been talking to for 10-15 years. So, when I need an introduction, when I need a bag of money, you know, not to be facetious about it, but that's always a little bit sort of a side conversation. It's really like, "What are we trying to accomplish here?" Like and the goal becomes much much larger and Makers and Jay and and the rest of the team they saw it the same way. So that was relatively easy. I think it's you know, since then VC funding in gaming particular has changed dramatically. Yeah. The entry of all these large firms, you know, some of whom employ lots of good friends and contacts of mine but it's a very different landscape now. Like it's become very keen on raising and I think that that's a that's changed the dynamic dramatically in recent years. Maybe we can talk a little bit about cuz you know, a lot of companies to your point especially the last few years was the boom in capital availability. They kind of raise typically for two years runway to hit some milestone then almost like the goal is to raise more money at a higher price. You know, you

were already a profitable business sounds like. So when you decided to take that funding, how did you figure out how much to raise and and what were the goals for you, you know, at the time when you took on that first outside capital? So I have to start by saying first like I was always the front of the house, right? So I'm always the one on stage at the conference and I'm on writing all the stuff all the time. Because it sort of fits into my skillset but I cannot stress enough like the the need for a solid operator. And I don't say that because my CEO was also my wife. Of course I say that because that But in other businesses I would also encourage people to have an eye on both sides of the house, right? So particularly in research like it it tends to help if you're a known entity whether that's your logo or your person whatever it doesn't really matter you know, it ends up being often very lopsided. So you have these firms, these data companies and they're known for like this one analyst and everything else is sort of whatever that is. We would from the beginning really scrutinize costs and operational

expense. Like if so when we price out a project, okay, what's our margin and how do we negotiate contracts so that we can keep that margin even better. And that was all sort of the uh the philosophy of the COO uh the back of the house uh where maybe because we were bootstrapped for a long time, we we always kind of figured like well, if we want to grow, if we want to add an analyst, we need to free up X amount of capital. So then by the time we got to raising, it's like okay, well, what we need, what could really help us double the business from X to Y is this much money. And uh I think it was like a low seven-figure amount, but it ended up being uh relatively easy because, you know, you already have your waterfall in place. You already have all your documentation. So you're not for the first time opening QuickBooks like some FTX founder may have done in the past. And it's like that is that is the I find that absolutely shocking that people would just have like a Google Doc with a few digits and there's like the rigor and the and just the the plan that comes from the operational unit, that's everything. So when you raise money like

that's where you start. And if you haven't done that yet, then you make it much harder for yourself to accomplish it. Yeah. Yeah, we probably see a lot of FTX's spring up on the just how much free money there was and probably lack of discipline to your to your point. It's interesting. Yeah, it's easy to forget, right? It's easy to fall in love with the idea and sort of run with it like oh, we're going to build this great game or we have this like data set and we're going to sell it and and then you have these like sort of naive calculations of I mean, so I guess to your point, but to the moment we raised, we had years of sales history. So I could see my pipeline. I could see my conversion rate. I could see my ability to upsell. Once I have 100 users from company X, can I charge more? What like how do I negotiate those terms? Can I charge them more per seat? So all these sort of mechanics of how to build and grow your business, we already had enough material there where as I think young companies early on, you don't have that pipeline to look at for instance. So then you end up with these naive forecasting like oh, we're going to capture 5% of a zillion,

so therefore we're going to all be billionaires sitting on the beach. That's not math. That's just that's a narrative. And we were able to be founded and then it's much easier to kind of arrive at a number quicker. How big did the team ultimately get? Uh when we sold it to Nielsen in 2018, we were 45 people. Okay. And then by the time I left Nielsen 2 weeks before the pandemic shut everything down, I had 70 analysts across six different time zones. It I kept kept growing. As maybe going into that, what was the story with Nielsen and why did you guys sell? The reason we sold, to start with that one, was because at some point So, I've always looked at SuperData as a bit like, you know, we were a band. We had a few instrumentalists and we had some singers and then we were touring and then we were selling CDs out of the back of a trunk of a car, whatever. And that was what it was like for a long time. And then eventually we got like a following and we got a fan base and we were making some real money. And so, we signed with a label. That's how I

thought of it. You know, at some point you you know, for a data company to reach a larger scale, like I can only build a podium so large until I need a much bigger label to represent me. So, the fundamental thesis in the acquisition was we take this deal and then we can really go to business in all these different directions by we had never been to the Asian market, for instance. We had deliberately sort of ignored that because logistically it made no sense. But with like the firepower of a company like Nielsen, which I didn't know until much later in the due diligence process, but they had like at the time they had like 44,000 employees worldwide. Oh, wow. So, so very quickly you're like, "Okay, great. Let's get some percentage of these people to help sell this stuff." Like just roll it into their offering to whoever they're talking to and see if that works. And so, the ability to scale, like I there's no amount of money I could raise to do something similar. And at the time, you know, we had been working with them uh the team in in place at Nielsen at the time very friendly, doing a lot of smart things with regards to sort of the

traditional Nielsen model and we could work together and sort of combine those data sets. So, we'd run a few tests. And that was So, that was not just operationally we could scale it, but we could also differentiate the product further, create more value for the customers, and you know, take from that what you will, but the large companies, like the the Sonys and the Facebooks at the time and the you know, the really big multinationals, it makes them feel comfortable if they can work with an existing entity. It's easy to sign off. The contracts are in place. All the commercial So, so just facilitated all those needs for us at once. Were you guys technically competitors then at the time, or sounds like you guys were you already partnering on certain projects? We were unofficially partnering in a few projects just to kind of kick the tires. So, again, New York is a small place. So, Nielsen being headquartered in New York, and I had a a few friends that have also businesses to Nielsen, too. So, then the inroads were there. So, that you can kind of say, "Okay, let's pause our competition for a moment. I know you're also applying for this RFP or whatever you've

ever bid out, but let's talk and see if there's some way that we could do this like when you track XYZ." So, they So, Nielsen historically would do um intention uh to purchase or purchase intent, all right? So, they would survey on a weekly basis a bunch of people saying like, "Are you going to buy the new version of X?" And so, that gives you in a traditional product-based business a good sense or good handle on demand uncertainty. Like, I don't know. Like, am I going to sell a million copies or 10 million? I don't know. But ask Nielsen, and they will come out, and they have decades of their data going back. So, you could model a lot of stuff. And we said, "Okay, so but that's up to the purchase moment, all right? That's up to the end of your marketing campaign." And then we would come in and say, "Okay, and then afterwards, here's the digital goods sales. Here's the expansion packs and the whatever battle passes." So, we were competing, but we were complementary mostly to Nielsen. That that was really the foundation of that conversation. How did the I guess acquisition go? Did it go as planned? Did I mean, obviously,

I guess many founders do go through the process of sort of going from a small company to being part of this large mega corporation. What was that like for you? That was interesting. Uh where to start? So, the So, the acquisition process is um it's pretty harrowing because it was I did a write-up right after, but one thing that I didn't expect and that I where I made some mistakes or was naive, perhaps, was um the imposition. You know, so in the same way that raising a round can be a huge distraction for a founding team or managing team, due diligence is so, too. And so, in that case, that falls to the back of the house, so this you know, they were busy answering the questions. So, you know, my CEO was busy answering the questions from 37 individual Nielsen employees or something like that. It was just this insane number, and they're like just snowballing all these questions and and queries. So, so that's a huge time suck. And then, of course, like, you know, that's the big thing, but you can't tell anybody about it at the same time. Like, how do you negotiate all this?

And so, that's a a massive distraction just like in terms of your mental capacity. Like, you all of a sudden, if you weren't going fast enough and had enough to do, like, you certainly will have that. And so, you just reach, you know, a level of capacity that is ridiculous, and you sustain it for several months as you go through this really long, slow-moving legal process. So, I that was a much bigger appetite appetite that was a much bigger meal than I had appetite for in that, you know, I didn't expect that. Like, I'm I'm coming out of this world of like literally on Monday deciding we're going to build something, and by Thursday I have a version to like let's spend 6 months exchanging a bunch of documents. And that kind of sets the tone and forward to like large corporations, I think. Yeah, you know, they pulled us in an organizational structure where there was a lot of other entertainment companies. So, we were teamed up with like the sports division and a bunch of other stuff. You know, and all of a sudden, like, there's like these massive sales meetings every quarter in like different parts of the world and people from all over flying in to like present their quarterly numbers and their

forecast and all that. So, it becomes this massive juggernaut of just what I would refer to as paperwork, which, you know, that's what you in many ways need for a large corporation to kind of communicate internally. Culturally, I think that's a that's a big shift. We were able to stay relatively nimble, so my leadership team, they took it upon themselves to basically protect everybody else so that they could focus on doing the job. Like, you know, aggregate the data, and make sure that the analysis would continue to improve, as opposed to everybody gets distracted with HR meetings, right? So, we tried to shield them as much as possible. And I think we were successful in that. But that's a a very different challenge. Like, suddenly, instead of worrying about competitors and products and new business, although the new business part stays, now you have, you know, 60% of your job dealing with internal communication and like meeting the VP of whatever because, you know, they know Amazon in some way, and so you got to do a whole show and tell and fly out to convince them of something. So, you spend a lot more time

internally than you do externally, and I'm used to being on the road. I'm used to, you know, kicking in doors. So, cuz that was a very different culture for me immediately. But, you know, that's the nature of large company, of course. That's it. That's how it goes. Having gone through that, if you, you know, maybe advice for other founders, if you were to go through that again, were there anything you would have wanted to push for in the negotiations so that you can have, whatever it is, more autonomy, you know, more fluidity, etc., once you are, you know, once you are part of the larger org? So, I have I have this bad habit of wanting to do everything myself. It's maybe it's not unfamiliar to other founders, but I'll give an example and then I'll give you the the general idea. So, I have my own connections to the journalists, let's say, like trade press and writers and I liked that because people that work for say a newspaper, they talk to Sony and Microsoft and they talk to Ubisoft and Activision whatever. As opposed to only one company, right?

And it's um and so you can learn from each other. Like what's your feel? Like when you talk to these companies, what do you think? You've been tracking it for a while, like what's your take? And so so that's part of how I learned things about the industry, too. You know, before Activision and Microsoft were going to be an item, like you can hear about it sort of through the grapevine and I found it very helpful strategically and sort of interesting to kind of just be busy with that. But because I like to do things myself, the moment you join a corporation, you're like, "No, no, you have a PR person." And so I got into some hot water early on because, you know, I'm just having my conversation with NPR and having a nice time and all of a sudden I get this like lengthy email about all the things I couldn't do. It's like, "Oh, right." And so you have to consider as a founder that, you know, where are you in the delegation process, right? So So that's my version of it. I've heard similar versions of say the CTO of some tech company who is basically the key master to the whole technology and then it's like, "Okay, you've been acquired now and now you're going to spend 18 months of your life basically trying to offload all these jobs to everybody else because

you get hit by a bus and everybody has a hard time." So you become a little bit too central to everything and I think for founders that are going or looking at that process, like before you start getting acquired, before you even start thinking about having a conversation, start thinking about what you can offload because you become the problem. You become the bottleneck in those conversations very quickly. Yeah, I guess part of it is is you're comfortable or getting comfortable with that new role as well as as much as you can. different. It's It's It's tough, you know, I mean it's um yeah, the moment your your little crew starts outnumber you and the moment you have like dozens of people and then you switch to like hundreds of people or whatever more that you have to speak to like that's your function changes and you know, the thing that made you so comfortable, you know, being close so My biggest frustration with all of this is this. I started with you know, wouldn't it be great if I had my own data? Let's go get some. And then I went and got some and then it grew over my head and so I spent one summer learning

SQL and I thought like my cookbook you know, learning away and then eventually okay, fine. I can finally master like 40 gigs of data now it's so great and then it grew again. It's like and eventually the thing that I really wanted to like play with all day long and tinker with now became somebody else's job. I was like man. And so it's very hard to let that go. It's very hard to kind of stay in your comfy zone, but as the company grows the question should always be what does the company need not not what does my ego want? Like that's at some point you have to let that go because you become an obstacle. You become just totally you're holding everybody else back at that. Switching gears a little bit. But you have a new book. I have it here with me. One up creativity, competition and the global business of video games. How how did writing this book come about? Did you always want to write a book and The secret the secret to all of the things I do is that I don't really want to do them. It's just like sort of a necessity and

so so but I appreciate you pitching it. It's the The book came so I teach at NYU at the at the business school and I have been for a while and it's a class that started really out of I was asked to like sub in one time and then it became my my problem and then I figured well, if it is my problem I should probably like take ownership of it. So long story short, I ended up at this intersection of commerce and creativity with a lot of this writing and thinking. I figured that my class teaching would benefit from having some of the data that I was generating out in the real world. And so I started basically writing individual lectures around specific topics. So, one of them is the myth of the mobile millionaire where in the beginning of the lifestyle smartphone gaming, you know, everybody was making millions of dollars because it was growing at this immense rate, but that's unsustainable because at some point there's saturation or whatever it whatever happened with the Apple and the IDFA. It's like user acquisition becomes that becomes the whole game now, right?

And that's where the Apple lovings of the world come from. So, that is not new. Those economics aren't, you know, mysterious and and high elf-ish. Those are things that you can kind of see coming. And so, in my classes I try to discuss this thing like, well, what is that inflection point or what drives that that transition? And as I started to go down the rabbit hole, as always, like there was so little on it. I got some use out of reports from sell-side analysts and there's a bunch, of course, more academic focused stuff like anthropological papers in gaming and representation of gender and race in games and so. And that's all very useful, but the economics informs so much of those decisions, right? The the quick takeaway is that a large part of the reason why game companies would focus only on a very narrowly defined demographic is because they are very risk-averse, capital-intensive production model. So, they just didn't want to miss the boat by, you know, trying something exotic or different or novel. And so, that risk aversion led to

a lack of innovation. And then when the smartphone came out and digitalization occurred, that opened up that whole market. And so, the book really covers that transition from a product-based to a service-based industry model. And then every lecture is represented by a chapter roughly. We need just to tell my students the basics of like, when we think about free-to-play, these are the metrics. When we talk about I don't know, PC storefronts, here's what what you should know. Um and then kind of tie it up with like a forward-looking view on like, what does that allow? So, towards the end it talks about in-game ads and subscription model sort of, you know, leading up to the beginning of Game Pass and stuff like that. So, so it's really that conversation and then that has evolved since then, of course, too. You've written, obviously, plenty of reports before you, you know, you did your PhD and thesis. What would you say were the biggest kind of differences in writing this book, just in your process? Oh, this was probably the most selfish kind of writing that I that I did in

that you know, there's so what I said earlier, I mean, I don't tell me how it sounds, but so when I said earlier, you got to check your ego a little bit. That's easy enough to say, but like, where do you actually park it, right? And some people they work out all the time and some of them like they go running every day or whatever, they have some hobby. So, for me during all these trips and travels, I would sit at the gate at the airport and just write. I got sort of a vibe where I'd go like, I would shut out all the stuff and then I would I'd probably have a few pointers from conversations and then I'd just like run my thoughts on paper. And so, you know, I've maintained and still do have this fascination for the games industry that it's just like I think it's amazing. Like, it's just I can't find an end point in my fascination for it. So, selfishly, I'd just sit there and just like write something. What does it like, what does that look like? What if I could track it? What if I could build a a revenue model that tracks 20 years of PC gaming revenue data or something. Like, who were the biggest publishers? So, I would start tracking all these companies and it tracks like 250 companies over 20 years.

Actually, no, the data set goes back a little further, but that's what's in the book and it's just like, I just want to see what that would look like, you know? When they talk about the video game crash in '84, like, okay, what did that what does that mean in units? And who was out there? What's the TurboGrafx? You know, like, all these like names that I'd heard. Like, I just needed to synthesize them and put them in a cohesive structure. And so, that was the selfish part, I just wanted to make sense of it. But I was able to do it sort one guise of I'm teaching others. So, everybody benefits out of Did Did you start teaching at NYU during the company or was that after you you had sold? Oh, no, that's that's been going on for like 10 years now. But I rolled out of the PhD, I kind of rolled into that but by accident. But academia was never my full-time thing. It's It's a little too political. You know, I don't I don't do well in large organizations, academic, corporate. It's just I run into walls all the time. You were working with all kinds of different gaming clients during the early days of SuperData, kind of building really that business up, you know, brick by brick. Were there any

particular client or two or project or two or unique data source or two that sort of really led to an inflection point in the business and kind of changed how the business operated or love to hear any thoughts on that front. Yeah, there was two that come to mind. So, one of them was So, I guess because we're in New York, there's a lot of There was a lot of skepticism like why would you build a games data business in New York when everybody is on the West Coast? Like, well, a lot of money decisions were here, right? And so, you have a lot of investment banks and hedge fund managers and all these kind of people. And culturally, they're very different than the games industry. So, that was very helpful for us. So, when you talk to the games industry, whether it's an indie or like some big publisher, they don't like giving away the secret sauce and they're certainly not going to share their data with you yours because you're nobody, right? So, So, that's a really tough conversation. And the secrecy is sort of well documented throughout the industry. So, it's it's tough to learn and stuff to to develop your product and offering. By working with finance, you deal with a

different caliber or different mindset of people. So, they are very friendly. They're very neutral in sort of how they approach you, but they will take you apart in a professional manner, but they will literally take your spreadsheet and just shred it So, like, this is garbage. I don't need this. Get rid of this. What does that even mean? And they drill it down to the absolute fundamentals. And so, when I mentioned earlier, some of the metrics that we honed in on early on, that was because we were with finance people. Because they said, "Yeah, I don't need to know what the color of the characters is or whatever." It's like, "Just tell me the MAU." Like, "Can you give me a credible MAU number for these titles? And how do you go about" And so, they would just put us over this barrel every time with the methodology. So, that gave us focus and rigor. And then the other piece of it is like, once you go from dealing with a rickety company and doing like a few thousand dollars here and there, and all of a sudden they start writing six-figure checks, and it's like, you know, extended efforts, that was different for me, too. Because again, I guess I had

only started thinking about projects that I could do and deliver all of my own. And all of a sudden then you have to scale. And so, when you work with like a Microsoft, for instance, or Sony, they swear you to secrecy. Not just that, they also make you go through this questionnaire. And anybody who talks to that company under your umbrella basically make you sure that you don't bribe them by accident, that you accidentally invite them for a beach trip to come talk about your new product. Right? Because that all comes back to these large companies companies. And so, to provide services to large enterprise companies is very different than talking to your buddy at some publisher and selling some data. And, you know, working your way back saying like, "Okay, if that's what we are going to be next year, what should we be working on today? Like, how do we How do we get there?" So, to accommodate these large enterprise Because, you know, that's really good money for a data business. But, that's because there's not a lot of companies that can handle that kind of demand. I guess last part of this, you've talked about this at length in other interviews, but just where you see

the games industry going, if there are any interesting or unique trends that you're that you're really looking at right now. There are. I appreciate that question because it's it's I can only be wrong about that. But, it's the um So, my thesis at the end of Nielsen sort of as a result of talking to the Amazons and Coca-Colas of the world, we had a conversation with Tesla about video games because they had Cuphead in their in their cars. Whatever, they got the license. about that. Right. Yeah, this is like this wild world of like video games eats the world, eats everything. Right. Right. Okay, so where does it stick? And so, that's my question really. Like, what's you know, gaming had gone through a transition economically from product to service or from whatever physical to digital. And now it's at least perceived as like a transition from fringe to mainstream. And I think that that's an interesting one because, you know, more means different. Okay, so if there's now $200 billion out there and there's all these

billions of gamers, the industry can't possibly stay the same. Like the the models for like an Activision will change, must change, so to say. Right? The the companies that were big in the early 2000s, they're mostly gone. All right. And so, my sort of prediction is that over the next 5 to 10 years, we're going to see a huge shift in like who runs the games industry. Already do you see, for instance, young audiences show very distinct preference for online multiplayer games and that premium single-player campaign games? Those are mostly interesting for older people, like 45 and up. And so, there's a generational sort of bifurcation in terms of preferences. Okay, so these like online games, where is that going to go? And what are the revenue models that are feasible there? And so, I think to some degree models from a Game Pass and the PlayStations of the world, the Netflix games, if you will. That's an intermediary one. I think long-term you're going to start to see more long-term online time spent, sort of a

blend between physical and digital social life. Because so often are games mostly just an excuse to hang out. Like this And this dates back all the way to kind of my early PhD research is like it's it's really just a social activity. Like we're not actually there to do anything other than to like learn about the world and make friends and share and hang out and that's and it's and that predates video games or whatever technologically mediated gameplay, you know, by centuries because that's all you do. If you anthropologic perspectives will tell you is like we're doing these things like uh whatever in Rome you had like you had the gladiators and the fights and stuff. That was largely a social activity, right? It was just like a sort of cultural manifestation. And so if you then tilted the other direction and look forward to like, "Okay, so what is all that socializing and hanging out and being with other people online look like? What can we facilitate there?" I think a thing like Roblox is an early version. You know, that's also a company that may

be acquired by a larger entertainment company, right? Um like I say, a Disney or so. And so you start to see then a transition in who's in charge. Uh it's no longer pure play companies, but it's going to be larger media conglomerates. And I think that that's going to bring with it different models, right? So uh advertising in gaming has been kind of difficult thing for a long time. It's going to shift because of that because a lot of these conventional media companies will bring that to the mix. They're going to start sponsoring things. You see it now. Uh I think music, I think film. We don't have to talk about The Last of Us on HBO, but that's certainly a good example of like that's how it's done. Like this sort of multimedia diaspora. So So I feel like the complexity of the ecosystem will go up and gaming will be recognized much more as a prevalent cultural format defines the next 10 years. Yeah, and I guess question for me is too around like we're seeing some platforms obviously play in the space. Obviously you have Xbox Game Pass and I I iOS obviously has has done so and text the industry for a while. And then you have

these forever games that are, you know, obviously League of Legends 10 10 years, wow 10 plus years. I guess I start to think a lot about saturation and what does that mean for a new entrant, a new studio when there's so many games that are decades long with billions of dollars of resources and these platforms that are taxing the industry from a it's just from a entry point standpoint in terms of, you know, maybe some negatives and I mean maybe not even negatives, but just like how does that make things complicated for a developer, I guess. One answer would be the historical one where most of the console market was just a handful of companies, too. Yeah, sure. And so, you know, is it then purely a technological shift that allows some oxygen in the room? Probably that's a big part of it, right? So, the the absence of apex predators in mobile allows all these marketing firms to be something. Like Rovio could never really hack it anywhere else. Uh, you

know, Supercell at first had a hard time on PC and then switched to mobile and that's when it went gangbusters. So, so a new a new pool, a new swimming pool, whatever, new ponds allows more fish to enter the market. That's a botched metaphor, but you get the idea. The So, it's technologically different, but I think it's you know and this is one of the this is one of my little hobby horses, the emphasis tends to be so much on like creativity being like this big thing. I think the technologically deterministic perspective where it's technology-based changes like, well, you know, but Nintendo's been making great big money basically selling very you know, limited technological capacity, but their their their hardware is not a PlayStation, it's not an Xbox. And they do just fine because of brand and because of quality and because of their innovative business models. So, I think creativity is a little bit emphasized on the fronts where the titles are always have to be this amazing experience. Business models like what Nexon proposed where you just figure out like how do

you monetize teenagers that play Maple Story in the suburbs? Like how do they get to spend money? And which is a very boring piece of it, but I think that there's a lot of creativity and emphasis there as well. So, I'm inclined to say that it's, you know, that that should be the emphasis in all companies. Like not just how do we make great games, but also how do we optimize for distribution, how do we market this best, what does that audience want? And and I think those questions haven't really been asked. And that's because these companies, they all start to regress to the center. They all want to have the same risk-averse business model. They all want to optimize for, you know, ROI. And in the absence that they leave elsewhere because their model doesn't allow to run at mobile or to run at new phenomena, that's the opportunity for entrepreneurs and innovators. What are you working on today? Today, I have a bunch of data meetings, as you can imagine, and I'm working through the notes of my second book, which I'm uh Wow, that's exciting. which Yeah, it's just never ending. I appreciate that.

It's a you know, because the the moment I published the first one, it's like that's immediately when like Fortnite became a thing and then this all So, there's so much to do with like consolidation and stuff. So, that's where I'm at today. And it's you know, I've been trying to build up my Marvel Snap deck a little. I'm a little plateauing at level 45. I got really I got fell so in love with like my Killmonger card. I was like this is amazing, but Oh, yeah. I'm working on that too. It's not a huge priority right now. One question that we ask all the folks on the show, and that's if you could go back and give yourself a piece of advice in terms of when you first started Super Data, what kind of advice would you give yourself? That's a That's a scary one. I spent a little too much time worrying about everybody else. I think I, you know, while I do believe in a healthy degree of paranoia, like um just just focus on your own customers, focus on your own business. Like it's you know, your biggest constraint is time, and the money that you make, especially in the beginning, that money is not for couches and foosball tables. It's to buy you more

time so that you can keep shop the shop open for another month, another year, hire one more analyst, you know, have one more business trip out there. And the less time you spend worrying about what everybody else is doing, the better. I I spent I was very um nervous at first, particularly because we were coming into the space with a lot of I think, you know, you mentioned App Annie, but there's a lot of these companies out there that were years ahead of us, that were bigger than us. They would sort of take a meeting with us and kind of patronize us a little bit, but that's understandable. But it it somehow got under my skin for a while. And only once I got rid of that, you know, once we build up our own confidence, Billy, as a company, time becomes much more effective. And I that's really the the big win. So, I won't do that again. Awesome. Well, thank you so much for joining us on the show. Thanks for having me.