TWIG 121: BlizzCon 2021, Valheim Built By 5 Devs, Zynga Accelerates Growth, Rovio M&A Target

hello everyone and welcome to twig 120 we've got myself joe kim adam telfer eric cress and the mishka cat cough today we're going to be covering four articles first zynga's plan to accelerate growth in 2021 by pocketgamer.biz second blizzcon online 2021 from the verge i'm definitely looking forward to hearing more about that third valheim how a five person team created the most popular game on steam by ign and finally rovio just based upon their recent financial updates so how are you all doing well kicking i'm trying to change my backgrounds constantly because we're having renovation at home so welcome to savage uh savage helsinki i'm glad your uh your financing is going to good work of creating a great work environment yeah i'm like i like how his chair matches the boxes in the ice i know

color matching color coordinated you can't see the walls but we got a lot of cool stuff on the wall is that the color of your logo orange and black is that like the no it's uh it's the color of tiger king or tiger what was it yes it is all right the uh the fitness watch no anybody cares at all and the last thing i i the more thing the one thing i hate the most is when people start in on podcasts start talking about personal stuff but i'm doing it anyway because i'm an idiot but i am now injury-free i'm getting my bike fixed and i am down to like i think like 25 body fat and i have 10 to go and i i think i can actually do it i know how to do it i'm going to get it done thank you very much 15 by 50. god damn it all right moving on okay any other personal updates all right nothing let's go let's go to the news so i want to start off which will what i start with literally every tweak so another supercell update

so one thing that we've been raising on on the structure fun is the importance of product and marketing teams working seamlessly together and the one thing that supercell as we know they've had their marketing team sitting on the other side of the world in san francisco and we've kind of pointed that bringing marketing teams closer to helsinki would be a sort of a low-hanging fruit for supercell because it helps them to grow by actually you know increa in increasing your ability to end user acquisition anyway now go into the details so guess what not only marketing but also data engineering positions open up in clash of clans franchises so they actually supercell has two open positions so everybody anybody who's listening to this data engineer and digital marketing if you are in these lines of work amazing opportunities to join the helsinki team as either the data marketer or a data engineer for both clash of clans and clash royale so in my personal humble opinion a great

move from supercell and definitely going towards that direction of of improving their life service capabilities second part i wanted to give a public apology for jk so i kind of called jk out as a conspiracy theorist uh based on his um views on what zynga and app loving are doing with their acquisitions of mediation platforms and attribution platforms but fact is and this is a fact you're often more right than you're wrong and whatever the streets you're walking you're definitely hearing the uh the right words because the the word on the street tends to be close to the truth so public apology from a man jk i'll get it all good i hope you know sometimes i write stuff in slack i hope it doesn't come off angry sometimes some of my guys tell me sometimes you write stuff it sounds angry it's it's not but uh speaking of conspiracy theories though so i've got a first update so first uh so you have fans i'd like to thank

team mishka conspiracy nation for emailing me this uh a16z andreessen horowitz article titled breaking down the payment for order flow debate and basically calling me a paranoid conspiracy theorist so this is this was a post from andreessen horowitz that base it starts like quote in the wake of the gamestop short squeeze payment for order flow the practice of market makers paying brokers to execute custom orders has fueled no small amount of debate is it a tactic deployed by large capital market institutions to steal money from the less informed or is it an enabler of low-cost highly efficient stock trading for all and then this post goes on to pre to present in my opinion a pretty biased view like this is how payment workflow works it's a positive practice and you know front running doesn't happen because quote not only is this empirically false it's also illegal case closed

but i just i i just want to like basically address some of the feedback about kind of being crazy and also address this particular uh this particular post and you know look everyone out there you guys all need to make your own decisions about what you want to do how much data you want to share and i know there are some applovin and zynga employees who aren't super happy with some of the comments that i've made look i'm not i haven't said applovin or zynga is planning on doing anything unethical or illegal i haven't said that i'm just saying that what we have is a customer adversarial relationship but let me bring some reality to this situation now i've already mentioned before in the last last podcast that this type of problem with customer data impacts even great companies like amazon they have gotten into trouble for

illegally using customer data to compete against their own customers but let's come back to the specific issue about order for payment flow that we talked about last week the fact is citadel when we talked about the citadel robin hood relationship has already been busted and fined for quote trading ahead of customer orders the very the very issue that andreessen horowitz is saying is completely not an issue and so i'll put a link in the show notes but as their letter of acceptance in response to finra the financial industry regulatory authority has already revealed and i'll just read a few things from here but citadel securities employed pre-trade control settings and processes that removed hundreds of thousands of otc customer orders from that logic being the logic that they use to that basically handles the order payment flow and this is in response to finra this is what they're saying actually happened while otc customer orders were inactive

citadel securities in many instances as part of the market making activities traded for its own account on the same side of the market at prices that would have satisfied the orders without immediately thereafter executing them up to the size and at the same or better prices as it traded for its own account goes on further based on this review in 559 instances citadel securities traded ahead of 415 inactive otc customer orders so basically the thing that i've been talking about they've already admitted to doing not only that but if you go back to april of 2004 this is before citadel entered this business in in what it now in 2020 controls 46 of retail order flow okay so citadel's general counsel at that time urged the sec to ban payment for order

flow because it quote distorts order routing decisions is anti-competitive and creates an obvious and substantial conflict of interest between broker dealers and their customers further quote because payment for order flow creates fundamental conflicts of interest that cannot be cured by disclosure the commission should ban payment flow payment for order flow altogether again guys so look i don't want to go too much more on the weeds on this that's that's all dude you're [ __ ] in the weeds man i can't even see the world right now we're in the weeds so much let's go move on dude okay hello here's a point look all of you guys make this is like a mishka this is a mishka story dude wait for it the point is the last one the point i'm trying to make is is look all of you guys make your own decisions i'm just here to warn you that when you share your your data with external third parties the stuff that's happening with applovin and seeing a look i personally think

it's dangerous but you guys make your own decisions and i do think that look like some of the views from whether it's you know andrews and horowitz look no hate on andreessen i'm sure they mean well and they're trying to protect one of their portfolio companies but just the this point is that just because something is illegal doesn't mean companies aren't going to engage in this kind of behavior it's happened time and time and time again anyway you've been warned so that's my first big update couple of quick updates after this second update turns out that as we hypothesized last week before the announcement uh about the zynga star wars game it indeed is a cross-platform mobile and console games not much revealed about the game but the game's going to be called star wars hunters and the what we know right now is that it's going to be both mobile ios and android and on the console side it will launch on the nintendo switch which is it just me or

is everyone like super skeptical this game is going to be any good why in the hell would they do it for switch of all things like i mean yeah it makes money right that seems like a complete like yeah oh yeah let's just let's like say we're cross-platform it's like a pr stunt more than like an actual economic decision so anyway i don't know that that's a pretty big effort though to you know spin up a console dev studio though right so i mean if it's if it's switch it's not it's not no no not as dude i think i it's they're using the same code probably right yeah yeah it's the specs are pretty low like if it would be a pc pc's queue would be more like if they would do a cross platform because they would have to do all the payment system and so forth but right with this it's just like it's like i i think it's like a startup move maybe like weird cross-platform they got to figure out what to do with that team right that team has been kind of it's csr land it's always the question like are you guys cross-platform um

we could and they're like switch all right guys pattern's gonna hat all right third update for me ea completed its purchase of codemasters a deal with 1.2 billion and that will bring racing ips from codemasters such as dirk project rs grid and formula one to ea [Laughter] this is the dumbest deal ever god if they make anything out of this i'll be in shock okay no offense to codemasters you guys make amazing games but this is not a strategic acquisition this is just disastrous don't you guys think that this would have been such a good move for rockstar but not needs something right they got no products in the pipeline right this makes sense for them totally i agree but even then 1.2 billion dollars going back to making a new racing game every year every year yeah adam yeah okay so i just got one

self-service announcement um there was some awkward social media issues this week with a wb employee um so i'm gonna cover my butt here as just a little bit ahead of the curve i'm just going to say that all my comments here on the podcast are my own and they're not my employers wbs uh and that all data information insight that we share in this podcast is coming from public sources news articles public data as well as from censor tower who has given us permission and intention here is to be critical and ask how we can do better not to throw stones at other teams or other projects so really yeah of course for most of us i didn't get the memo dude some of us have to protect our jobs anyways um so please give feedback if you think we're wrong um and you know you should be as critical of us as we are of the topics we cover um but yeah i just want to cover my butt here all right that public service

announcement is just all nonsense right after everything i say it's true what you say is what you believe that's fine nothing that eric says exactly to come onto my record so this is this is the critical i have everybody has to go here so whatever eric says it's eric's opinion and we did not say that that's not even a public all right my only update is that uh google id software and bungie are all subject to a class action lawsuit and the claim is that the companies misled customers by saying stadia games to be played in 4k resolution which is exactly what i was saying this whole time is that the claims that google had 4k 60 frames per second were just always nonsense because you actually played the game it was freaking terrible anyway so they're basically going after them again for misleading the public on what this this

what this service was because this service could never be as good as they said it was right and so i think things get continually worse and worse for these guys and i ultimately they shut it down by the end of the year that's kind of my guess and then just white label it but anyway we'll see how this lawsuit progresses but 4k resolution streaming give me a break right never going to happen all right moving on okay zynga plans to accelerate growth in 2021. i was after all the news that we saw the last like three or four weeks there's just nothing really going on but this is kind of a fluff piece um oh who did it i can't even remember now oh but pocket gamer right and uh it was basically ceo matt bromberg who was part of the ea mafia that came over from ea to to uh zynga when when frank took over basically was just talking about how great the gate year was that they grew 50 almost um and they have eight games that made more than 100 million dollars which is kind of amazing they say they're basically continuing to

focus on their existing games and then also focusing on uh the launch of farmville and puzzle combat which are actually imminent evidently in the next uh three or four months um and then they are looking at further acquisitions to build up their ad tech but that's not really a primary focus as we've kind of alluded to here on the podcast which may or may not be true who knows um and they seem very happy with harry potter which uh which again is done quite well given you know the performance of willy wonka which was built by the same team so my take on this this is a typical fluff piece you know basically giving some exposure to matt who really has not been as visible um as so you know some of the other execs like uh frank and uh the face man of zynga mr bernard kim and you know basically again all these people were plucked from ea after frank left uh and rebuilt his team from ea within zynga's walls and uh but i can't really pick it apart i mean i think zynga's prospects are actually quite good for the next you know a couple

quarters at least i am a little bit worried about um scaling these games puzzle combat in particular given post idfa because it looks like it's gonna launch you know right on top of that um but uh i don't even know why pocketgamer would do this the only reason i guess one of the reasons i want to say talk about it is like this is a total fluff piece that pocket gamer gets to get in with the pr of zynga right so like now they've established a relationship with zynga they can do this piece and so they'll get more probably more do you know why yeah well i'm just telling people why i'm just telling people why these things exist right and uh and so now pocket gamer gets more access to ea management or zynga management going forward it's kind of a typical thing um yeah and sometimes it's also part of sponsorship deals right so let's just be real right yeah yeah right right right right so um the publisher of the year like last pocket gamer event that was held in in london like back when we were all on all in in one space bernard kim was

picking up that that reward so is that right oh yeah yeah he's uh that's even more incestuous yeah i feel dirty now i'm not even talking about it and now you're promoting this this article that no i just want no i want to i am a public service announcement that this fluff [ __ ] happens all the time and ignore it right i mean bromberg look he's a great guy like he's a he's probably a really tough tough dude so good for him anyway my thing with that zynga is i'm worried about post acquisition after q2 uh once peak goes pro forma then they have to have tougher comps in q3 and q4 and they have to really scale these games in order to make them happen make make make that happen or do another acquisition which i think acquisitions are getting a little harder to find that are of scale frankly so that's it i just want to point that out talk about zynga a little bit all right i had to i had to dig at least some data because this article was was not an article it was something that uh coms

coordinator wrote and just sent to pocketgamer for publishing so i dug a little bit of a data just zynga's game revenues from last year compared to this year and i do have to say like there's no way you could you can say anything else than than sing as a top-notch publisher i mean first of all they are liveops masters i looked at the top 20 games top 20 grossing games in their portfolio and only 3 out of 17 top grossing games in their portfolio actually declined last year and those three i can even name the games it would be willy wonka declined and uh farmville tropic escape as well as dawn of titans sorry wizard of oz dawn of titans and fireball so basically those three games make less than three percent of all the revenue so meaning 17 games out of their top 20 increased in live ops last year secondly they can launch and grow games we've seen this over and over again merge dragons harry potter puzzles and spells great example from last year so

their their ua capabilities as well as abilities to launch are fantastic they are genre masters across multiple different studios racing simulation puzzle casino rpg damn near everything except strategy and shooters zynga has it they're they have a fantastically diversified portfolio so they're not hit by any kind of you know big trends like if casino is starting to go down they're already diversified from it long time ago they're fantastic at m a so whatev wherever they need to jump they can actually do that because they can acquire companies and and expand to that and they're also really good at working with ips so that is something that they have going for them in the post att world because th them matching an ip2 to any of their their titles is you know pretty straightforward i mean they're already working with star wars so i think uh the what they will be acquiring next is definitely something in the ad tech that will allow them to more efficiently run run the cross promotion across their

internal vast majority portfolio without without going into any i'm not going to even say the name listen jk i threw you a bone i was like jk is not into conspiracy theories and then he just ranted so what i'm saying is that that they have a really really big portfolio and with with uh with proper tech proper attribution platform they can actually make good with this sort of idfv like it should be working so i think i think zynga is positioned extremely well and they're showing already to investors that they're looking outside the outside mobile and i think the next real step for them will be taking some of these um some of these probably casino games first and and some other more hardcore games to uh to pc skus where they will be making probably twenty percent of revenues from those uh i don't i don't think that's that's gonna work all right moving on please

come yeah let's talk about blizzcon so it happened last weekend um the major announcements i'll quickly go through those like overwatch two had a pretty minor update there was no release date announced um the notes that i've got here actually come from before the conference things to keep in mind with overwatch too they're exploring no loot boxes for monetization for that game it's going to have a heavy focus on pve content so story campaign content instead of just pvp and as well i'm not sure if they've confirmed this recently but there's talk that if overwatch one will actually receive all pvp updates that are coming to overwatch too second we've got world of warcraft so they're actually continuing on that world of warcraft classic train they are now re-releasing the birding crusade expansion within 2021 so continuing that classic kind of window and then of course shadowlands they're going to be adding a new chapter called chains of domination just for eric just for him to jump back dude i'm already in man that's like the

only game i'm playing right now which is pretty sad but uh i'm just not raiding but we'll see i'll play the chains of domination sounds interesting all right well come play volhan with me instead all right i i will i do i would do want to try that oh we're talking about that later yeah yeah um but the real notables with this conference at least from my perspective were hearthstone and diablo very much more on diablo side on hearthstone i've got a couple notes here um they're trying to really shake things up as much as they can if you can see the sensor tower revenue you can see that it's been steadily declining over the last few years right they're now trying to shift their base or core set out of rank play and coming up with a whole new core set and i think this is just inevitable um with the core set being effectively the same for seven years now um so i hope they can build out a new new entry point and start bringing back some of those churn players with this new core set and the most notable change was a new mode called mercenaries um it takes design notes actually from

slave aspire and trading card game roguelikes which have been showing very impressive numbers on pc and steam um the major question for me is whether this will go the same way as their auto chess mode which didn't really reinforce the core loop and there really was no improvement in engagement or revenue that declined steadily afterwards so cannibalize the [ __ ] out of each other themselves right right like you create this super engaging side mode that has no reinforcement to any of the mechanics you have in your main it has so yeah with with auto chess right like it had to own set of cards and purchasing new expansion packs had such a minimal impact had this little like bonus meter that gave you new emojis what do you think is going to happen i don't even understand how this even made it i guess they were worried about they're trying to improve engagement but anyway moving on sorry but they have to they have to train to change the structurally as much as they can right there what there is an opportunity with auto chest there is an opportunity with slave aspire

or mercenaries mode that you you could figure out a way to connect these two but i think it's extremely extremely difficult without breaking your live content model um because and i say this because i think slave spires engagement model is actually very similar to autochess in terms of what it will do to force that team as players collect go on runs collect more cards add to their deck which unlocks new synergies that's a whole core loop of slave spire and i feel like that's very counter to how hearthstone operates and will be very very hard to structure with him so likely this will end up as just another blip of engagement rather than something long lasting that could actually structurally change how her stem operates unfortunately because i'm a big fan of her stone a big fan of um let's move forward to diablo which was the bigger news items for blitzcon um so the big thing diablo 2 remaster as we called it before got announced and is targeting pc console released by 2021 and from the videos it looks like it's a

completely faithful remaster they're touting it right down to the pixel you can turn on a mode that actually flips it and you can go right back to the old original mode running the same engine so likely this is exactly what all the diablo fanboys including myself wanted it's not going to be warcraft re-forged again um diablo four had some minor i'm sorry i mean i'm sorry like do you think there's a real chance that this thing does extremely well or is this just a fanboy like four to five million unit type 40 dollar thing i think this is just this is just a tony hawk pro skater remastered right this is yeah it was captured there's no business models attached to it it's just basically a forty dollar product right yep yep yeah so adam when you say it's not going to be warcraft reforged i mean i'm seeing some news articles that saying it's exactly the same well my forge was a train wreck right yeah i think they tried to do way too much with warcraft three yeah okay like this one is a absolutely

faithful yeah absolutely faithful remastered that they try to change a lot i mean they they basically turn you know shut down the team and you know hire these guys vicarious visions to do diablo 2 remaster but i i don't see the upside here but whatever it's it's it's a catch grab and while they wait for diablo 4 right which looks deep in development i'm not sure when it's going to be coming out then the design the design notes updates that they had right like new rogue class cool from diablo 1 and it looks like they're leaning more into like destiny or world of warcraft style mmo design in their end game which look i look i'm sorry i'm gonna before we get to immortals like this is like the most the boringest freaking blizzcon ever right like they didn't say anything about the games that mattered right they spent more time on immortals and diablo ii remastered hearthstone which i think is because overwatch and diablo are the only two games that matter okay this company

yeah there was no there was no information like there's no like and it looks like these things are so far off like it makes me worried that overwatch won't even come out next year you know and then diablo seems like it could be 10 years from now who knows man like but i guess the overlords of activision will never let that happen it's blizzard man no it's not blizzard anymore dude this is activision this is it's not blizzard anymore it's really activision so activision's in charge and so they can't get games out it's just as bad as blizzard was right so all right moving on diablo mortals uh diablo mortals um also had some minor announcements um so there's no release date yet um but the conversation there really showed the design team's intent has really become a mobile mmo um so probably good that they're part of partnering with nettie's and a lot of those you know plenty huge types of games the focus on their end game they really talked about being more synchronous play dungeon rates so co-op dungeon raids like in an mmo

as well as synchronous pvp events so talked about like opening up a chest and then you know a little circle you gotta defend that chest while everybody else runs in and stabs you and steals your loot um eric is upset no no actually no this is a surprise to me because i didn't think they would add pvp to uh diablo so i think this is actually really really positive for the asian sku but this is just not gonna work for the west in my opinion but um moving on i mean actually i'd like to get your opinion on that but yeah my feedback i like i see this stuff as like icing on the cake the stuff that you kind of use as drivers into the end game right to make the progression systems all worthwhile but my notes are really all just on the progression systems i still have flags in terms of the way that they're building up this game because all of these systems are talking about rely on a very very deep progression system that scales better than traditional mobile ccrbgs

like pve services right now on mobile and console pc regardless are extremely difficult to get right and the rules of content consumption to system depth are the same whether you're talking about an mmo or you're talking about a mobile cc rpg and that's why very few in the west have actually figured out that mix properly and i think them sidestepping loot boxes and going to a battle pass and these kind of like these ticket systems that's inflated the reward systems so requiring deeper progression focus on synchronous pvp as well as diablo systems being very linear with most most loop being throwaway scaling is going to be a lot more harder or a lot harder than mobile ccrpgs so make every element being faithful to diablo and being player friendly puts more strain on the progression systems to be deeper and the content requirements even higher so these are my worries i'm excited for this like that i love diablo and i think they're doing some really clever things here so i'm not going to pass judgment on this until i can actually play but those are really

my notes they're really setting themselves up that they have to have the deepest progression systems in order to fuel this live service eric yeah i mean i i was just so over underwhelmed by this because i even my expectations were a little bit higher than what they did like i expected like timing on diablo like i thought diablo 2 remastered was coming out this quarter right so like i don't know what there must be some delay there i thought immortal would at least be in beta during this announcement i think that was the plan that's been delayed right so they are literally like missing every date it seems and then they come out and they talk about the things again that people are most excited about and they say freaking nothing right they say nothing over a two-day period right so these guys are not firing on all cylinders right and i'm i'm worried i'm worried you know like i that that overwatch is not going to make it next year diablo is like it's just a pipe dream that's going to happen i mean one class that's all they could come up with right

one road class i mean come on like that's nothing that's not meaningless to to the audience so nostalgia man diablo one rope class coming back yeah i i think i think it's just a huge disappointment for the fan base of blizzard and and i think it's just kind of more indications that things are not going so well over there um but uh you know we'll see i'm actually excited i the immortal thing i'm getting more confident that this feels more like um you know mario what is it what is that mario mobile game it feels like a game that everyone's going to download and play but no one's going to finish and and no one's going to need to spend in order to finish the content and and it's just going to die on the vine right what can you guys tell me about this remastered thing like is it is it really a thing like i played diablo 2 when it came out like is it is it real business to remaster old games to redo them there have been a few that have been really successful like he said tony hawk um

um i mean there is a nostalgia factor and i always joke is that the blizzard fanboys dude they wipe their butt with 40 bucks right they'll just buy anything for 40 dollars right like i mean so like there's an inherent audience that's going to buy this no matter what um and it's it it's kind of a cash grab but it's not going to bring new people into the franchise right it was i remember when starcraft 1 remastered came out and we played it at the studio and i played starcraft before that and then i played starcraft remastered one and i was like damn this is shitty game like i remembered it was amazing but then playing it as a even as a remastered version was kind of like if i would play command and conquer one which i still have in my memory like the best game ever with the soundtracks and everything if i played it now i'm like this is dog [ __ ] like what was i thinking no yeah it did make a remaster of that too oh okay with red alert with all the soundtrack yeah and actually yeah you did fine i don't think okay just asking i don't know the business side of remastering things so yeah actually i think the same way about

knights of the old republic right because i remember that as such a fantastic game but i was just kind of thinking about i was like i wonder if it came back today remastering whether i would actually think it's a great game or not but yeah yeah the court it doesn't hold up it's based on what you're saying it's like it doesn't hold up like you you know you watch old tv shows some hold up really well and some don't you know yeah like e.t would be horrible if you'd watched it again you'd be like that's a puppet like what am i watching then back then that was like the top of the notch i'm going to take the optimistic view though on diablo immortals i just think that you know arpg mmo does sound pretty good it just it taps into like everyone wants some type of co-op mobile gameplay experience especially you know as an rpg so i i there i totally agree with you adam there's high execution risk but hopefully they get it right yeah and i agree i agree with that they're doing cross-platform and cross-uh

uh progression so you can play on console and pc i mean i think that's pretty smart but that's that's on that's the remastered on immortals what are we talking about we're talking about mortals now you're talking about moore's i'm sorry i'm sad anyways moving on so valheim how a five-person team created the most popular game on steam so ign reports that back in 1300 ce the highest recorded total of the viking population was 500k people two weeks into launch three million people purchased the game on steam and at the time sebastian badilak executive producer at coffee stain publishing said quote we've been refreshing the sales report to get the latest numbers and it's showing no signs of slowing down and so for context valheim is an open world survival game with online multiplayer for up to 10 total players it's a procedurally generated sandbox world where you start off with just a pair of pants and do the typical survival stuff of scavenge

for food and you craft stuff some of the difference of valheim versus other survival games first the game is heavily pve also it's highly directed with specific goals and objectives and third a lot less conflict between players and you can actually toggle off the ability to attack other players so you can so there are some pvp elements but but that's kind of configurable most surprisingly the game was developed by a team of five starting back with richard svenson just starting as a side project in his own time back in 2018. later on his partner tornqvist joined in mid 2019 and then by 2020 they expanded to five and got a publishing deal with coffee stain anyway congrats to the team here for doing a really impressive job and having a pretty massive success and as a quick update gamma sutra reported yesterday that the game has hit over 500

000 concurrent players on steam in under three weeks this made it the third most popular game on steam when it hit its peak and also the fifth highest all-time peak on steam behind pubg cs go dota 2 and cyberpunk 2077. what do you think guys yeah i've actually been playing this game a lot um and i'm much more excited about the survival genre like in particular like when you're talking there like there is there is multiple different types of survival games right like this is a pve survival game it's also pvp survival i was actually playing rust a lot just before moving over to valheim and it's so refreshing to go into a world where it's nice and safe and i can have a nice fun time build up my things um and you know have clear goals without a little kid coming in behind me and stabbing me in the back and stealing everything um so yeah no it's actually it's a great game it's like a really refined um minecraft game um and

really like ccu and playtime look incredibly impressive on this title right like looking at playtime from steam spy 20 hours median play time in less than a month of being launched that's that's impressive so that speaks to probably some very very strong engagement underneath so this could be a very strong live service um personally i'm actually pretty surprised by this response because i think there's like there's a ton of really good pve focused survival games on steam i just never got this type of traction like satisfactory um so i just to see this game blow up it's like wow okay what what was it that actually blew this game up right was it theme was it execution what was it i don't really have any real solid ideas like it's just it's a solid game but it's not as if you know many of the other games on steam aren't that much different right um in terms of my takeaways here i think the only thing i would say is it puts a little bit of wins in the sales of microsoft's strategy if you've been paying attention to it i think it's like sea of thieves

forget the other game that they have about kind of growing up in a garden but a lot of these pve sandbox games that they're moving towards um the genre is growing and it's targeting the right demographics and i think valheim is just the type of games that they're shifting their their studios towards and i think this can shows that there's going to be continued healthy interests in in this genre eric yeah i i is there any like monetization after the fact or is this just a 20 i'm sure i'm sure they might do some expansions like it might be the arc model where they just throw some expansions quarterly something like that speculation but yeah i mean it was for me as an old man it was easier to pick up and play it's kind of guiding you through kind of the early stages of of what the game's about so that kind of helps so i don't know i'm going to play it i'm going to stan quan uh invited me to play so we're going to try to play tonight and goof around um and check it out so it's very cool cool story all right last one robio in

2020. so this is for their from their financial report and before we jump in to reviewing this there's actually a hot day hud update so ironsource acquired a video and playable ad platform luna labs from this is just recently from techcrunch as we're filming this so luna labs is a platform allowing app developers to create and manage video and playable ads we had actually their ceo stephen chart on the podcast so you can go and check that one out so correct congrats to stephen chart the ceo john wright kelly chu all of all my people at the labs and of course our friends at iron source for a fantastic acquisition uh let's jump into it so rovio in 2020 in short revenue was down slightly just like with with supercell but their ebitda was up nearly a double unlike with the uh with the supercells financials the weird part about looking through through the uh through the public so the report is that they paid dividends of 12 cents per share which was up from

nine cents uh last year and likely this is due to a rovio's kind of very family-heavy ownership and this is what i would do with my company as well i would naturally take dividends out of it but not typical for in not typical in my experience from from from any kind of like a gaming and tech company overall so there was a there was this sort of a ceo message i mean like in every report and this was uh reminiscent a lot of the uh the supercell ceo's message but uh essentially their new ceo alex balet here norma normand um i can't pronounce french names but apn let's call him apn uh he's the ex-head of games ex-gameloft ceo uh he's been working at rovio for a little over a year perhaps uh and is now nominated since the beginning of the year as the ceo he's also actually a member of the dof slack channel so you can yeah you can ask him any questions there yeah so be careful anyway key messages

key messages from his post robio is focusing on three things casual games they're a strong brand as well as strong balance sheet he talked he talked about ab2 which was up nearly 50 50 percent uh sorry which was up by um i have the number somewhere according to sensor tower is up by six percent but it's important to talk about ab2 because it makes nearly 50 of all portfolio revenues for rovio uh he talks about angry birds friends which is a very very very old title i think it launched in 2011 or 2012 and it actually had its best quarter since 2018 so the live op team on that did some kind of uh wudu magic or i don't know what happened but it was up he talks about the new studio that they established in 2020 in montreal the studio i'm quoting here is exploring trends that will drive the games of tomorrow including games being used as social networks the switch towards post-platform

paradigm and the emergence of the metaverse so um so heaven help us making a metaverse game jesus no no okay so before and please keep in mind there are my opinions and there's eric's opinions after listening to this do you agree with them at a verse i i would say that this is the loftiest statement that i've seen and i see a lot of pitches and stuff like that so so it's definitely a very very you need to you need to crawl before you can walk you can't you can't just go from doing angry birds casual to freaking the metaverse i mean that's just nutty dude i don't even know what i mean i believe in the metaverse i believe epic can do it i can believe roblox can do it hell i even ea but anyways uh he talks about the acquisition of of copenhagen studio that is shipping dark fire heroes in april so uh the acquisition of the copenhagen studio that is an ex-war gaming studio and they inherited that project and they are seemingly being able to turn that project around because there

might be a reason why wargaming dropped the studio anyway towards the end of the year he talks about shifting star stockholm studio strategy from mid core towards advanced casual games to build upon the experiences of angry birds too so stockholm studios the actual actually the one responsible for angry birds 2 and them focusing on similar type of advanced casual games makes all the sense in the world regarding att i'm quoting atm he's saying we are ready for this change on the m a front i'm quoting again they're saying that we engage with companies that have innovative games clear synergies and talented teams that share our vision of the future so that's basically rovio's m a strategy in one sentence naturally this this ceo message wasn't as informal as supercell ceo blog post because rovio is a public company um what i what's interesting is that they actually changed the the company mission so it used to be uh to inspire people by

crafting the best games and entertainment in the world and the current rovia mission that was it wasn't at least publicly stated that they changed it is to craft joy with player focused gaming experiences that last for decades and of course that that reminds you of the supercell mission of um create games that are played for years and remembered forever so very very um close to to others uh anyway i'm just gonna go quickly through the other through everything i'm not going to go deeper into the portfolio analysis uh they their portfolio was up a bit as i still told some of the games were up uh they launched a new game small town murders clearly have having good rpis as well as the sugar blast that they launched last lap not in 2019 but the problem is that they haven't been able to scale at least as quickly as as they were expecting most

likely uh there were several games that were cut in the soft launch and there are several more re-skins coming in as i was looking through the sensor tower data there were games like lily blast which is probably very close to a combination of dream blast and lily's garden but the uh the big thing is that that they still have hatch and they actually had a big statement here is uh why they didn't make as much money in the end was was hatch and they they um they talk about alternative financial structures and partnership that they were exploring for hatch and now how they focused on hatch kits we've all covered this here they talk about restructuring hatch and the new cost level is actualized from june 2020 so it's apparent that they caught a lot of head count and now hatch is not draining the company as much so in short i'm gonna cut it from here is my take is rovio is actually an undervalued company their market cap is 495 million euros their revenues are 272

million euros and their profit is 47 million and when we think about great publishers like you know i went through the zynga before it's live services growth genre mastery in diverse web portfolio rovio has kind of mixed results on these there they have mixed results on liveops great results in angry birds too a great result in angry birds friends but then in the others it's not that great when you think about their portfolio it is not that diversified and actually when you look at the diversification towards rpgs and other genres they haven't worked uh till till date even with with the angry birds ips on top of them and um and overall their portfolio i mean if you start going through it it's it's very angry birds heavy and they seem to be very good at launching and making angry birds games but they haven't really proven out that they could do other than angry birds games and even the reskins of successful angry birds games are not flying off the shelf it's mainly the younger birds versions of them that are doing pretty well

so if i would do my two cents based on this financial report it's of course divest from hatch which they are doing already it would be you know i would say it's a question mark on how well they can execute on metcor especially since they're since they're jumping in now as the att is coming and it's very difficult to scale mid-core games with limited data and of course it's a question mark as we discussed these these long shots of exploring the future trends the trends of tomorrow the metaverses i think as eric said it's it's really important to execute in where you are and then probably move forward from that but overall definitely an undervalued company i'm actually not arguing with you on this one i i think they are an acquisition candidate because i think people could do better i think i think other managers could do better with this asset is what i think could happen right i think it's a huge asset um but they keep playing from the old playbooks right they want to go more casual like they have a game in in soft launch called uh angry birds

something something against journey and it's actually a more casual version of angry birds are you joking like no that's not what we want right that's not what we want right that doesn't make any sense um so the good news for them is that brands might be a big thing post idfa like they may have value here and if i were someone that was acquiring companies i would i don't know how hard it is to acquire someone a company like this um and actually make changes and and fire a lot of people and make things happen but that's what that's what it would take and you leverage those brands you acquire another t this is my strategy for them right leverage your brands right find teams that can make contemporary games that make [ __ ] money on mobile and give them the ip to build these games and and and to take it take it forward right because it doesn't seem to be working making the same game over and over again banging your head against the wall that's what doesn't make sense to me

and the metaverse are you joking stop stop even talking about it right like that's not gonna be that doesn't bring confidence to the investors that you guys are out there spending money against the metaverse you're out of your minds right stop that stop that immediately right that pr is bad pr for investors okay um but i think you're right i think this asset is actually worth something you know but i still think it's being mismanaged you know to this day um i think create again creating the same game over and over again is not the right strategy building a racing game on mobile is ridiculously stupid and and don't get me started on hutch or hatch or whatever the hell that thing was that that was made no sense to begin with anyway what racing game what racing game are you talking about the angry birds racing game i don't know whatever that racing game would the the the the mario kart you're like a long time ago eric really holds a grudge that was that game was called anger go and that was released back when i was at rovio

and that was like 2013. oh so you were at fault yeah yeah this whole thing got back to me anyway but but i would say like rovio romeo's one of the few companies like they are leveraging their brand right like there was a point there where pretty much all of their internal projects were an angry birds plus something and they were you know acquiring or partnering with studios um to try to leverage that right like that's how angry birds rpg or ignorance epic was built right and the racing game too in the recent game so there you go eric they did they did your strategy no no i'm saying i'm saying you the first thing you do is you don't put a game with your ip on in the racing category right that because the racing category is trash right stop making racing games all right why aren't they owning the puzzle genre why aren't they involved in casino you know why aren't they i involved the brand for casino it's a big brand right why i mean that's better than doing a racing game which never had a chance of making money

but that wasn't true no i'm gonna go through the angry heim birth survival and they basically sat on their own laurels and they did not acquire and build new studios with new experiences right this actually game that's in soft launch is actually exactly something that i would try to do i don't know if they're going to support it the way it needs to the metrics look decent in [ __ ] soft launch darkfire heroes yeah but but the metrics on their puzzle games look pretty good as well like if you look at the rpis on on sugarblast uh i don't know if it's called sugarblast but but something with your idea uh if you look at the rpis for the small town murder that's uh they're also not not half as bad so they're i think the same comment i made to you last week if it was true then they'd be able to scale these games with ua right well it depends on how well you monetize so it's it's usually that that's that's the big question so usually when companies say like we have pretty good rpis we have pretty good numbers to some extent if you're unable to push

more user acquisition that means you're not monetizing well enough and while you're not monetizing sorry it might be because of lack of content it might that at least lack of retention but you you just said the rpis are good the metrics are good on a certain scale stop mixing words if if the numbers are good then you support it with ua if it's not good you [ __ ] dump it and that's what they're doing things change the the more you scale the more the numbers change okay as you increase the size of your audience nonsense look i think rovio is a good asset for 500 million that seems far better than some of the other stuff that's been acquired recently yes i agree with the brands themselves are worth that probably so i think we agree on this we agree rovio is undervalued if i hear if i see another press release on the metaverse metaverse right come on yeah so i'm gonna tell you i'm gonna have to do no league of legends wild rift we have to do the metaverse and we have to do blockchain

all at once i have one more one one more thing so my first day at rovio back in like 2012 or 13 i don't remember like long long long time ago i was just pretty new i came in and i was having a meeting with my manager and uh and a guy came in through that route into a room and he was like i don't know what he was doing but he would start talking to me about stuff and i was like so what do you do here and he's like well i'm building a bank like a real bank and we're going to call it a piggy bank bad piggy bank and i was like that's this was like when ro when when angry birds was the highest thing ever and they were trying to do everything and i was like where am i like the guy that had no no idea what banking industry is just came to me and said he's building a bank and then he left i was like bank or what yeah yeah he just it was like he was so fired up and he was telling me that he's building a real bank where people can put in money and talk about cryptocurrency and whatever i was like okay all righty then i thought this was a gaming company but that was back in the days and

and i'm sure yeah it's not like that now yes uh i i can assure you nobody came to me and were telling that they were building a bank or any other type of craziness so all power to them undervalued yeah i think we all agree they're probably in play i gotta go to another call but um it's good talking until next week good talking see you guys subscribe it's time to yeah subscribe rate send something do something and see you next week yeah just review bomb us please [Laughter] [Applause] [Music] [Music]

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