TWIG 148: China curbs playtime + Nexters SPACs at $1.9B + Playtika acquires Reworks for $400M cash

i'm going to start with a bunch of updates so number one i think this was a very big news a couple of days ago so three hour a week playtime is over for china's young video gamers so apparently china has forbidden under 18 year olds from playing video games for more than three hours a week a stringent social intervention that is said was needed to pull the plug on a growing addiction to what is what it once described as spiritual opium so they limit under 18s from playing for one hour a day from 8pm to 9pm you can't even choose the hour like it's already put in and and on only on fridays saturdays and sundays it's like it's like a gaming show or like like you know like you're watching your favorite show come in and according to xinhua if i'm pronouncing gruffy state news agency they can also play for an hour at the same time on public holidays so you know quick take good luck on competing in esports it's going to be a a rough rough

uphill battle so shout out to korea who is going to dominate no but in all seriousness it's a major hit for gaming companies in in china and chinese market and i think we'll see the repercussion in the western markets because i mean they are making great games and they have to push them somewhere and if they can't be played in their home markets they're going to be played in the western markets and yeah and to some extent as a parent i kind of get it because when you restrict the play time uh we restrict ipad time i think that's beneficial for the kids i don't know for 18 year olds i'd be more like you know under 12 but all right whatever let's all right my two takeaways from this are one one roblox china strategy is now null and void which never made sense to begin with let's let's let's put that on the table right and um and two if if it's even possible 10 cents like italy gonna get more aggressive at coming to the west because

china is crazy like this is like these are like crazy policies right but that but it's aligned with the fact that who knows what they're going to do right so i think if if tencent is has got to continue to think about a network all the any any china companies got to think about diversifying outside of china with these kind of insane things i think this is just even better news for western game deaths looking for funding i mean this is going to heat up the funding space even more i think in the west because they got to get their money out of there right they got to move it over to the west yes yes um and then okay so let's continue with the update so i i thought this and this had something to do with it but it doesn't uh league of legends world championship has been moved from china to europe the move happened just weeks before the competition is set to begin and according to riot it's all it's about travel restrictions and crow weak protocols that made it a challenge to hold the event in china so it has nothing to do with the with these regulations though there's a question of

how big of a gaming market is china going to be in 10 years assuming that these regulations will hold like is you know what's going to happen to to league in china so i don't know but uh that was interesting news i kind of read it and made an update because i thought it had something to do with the with the previous news moving on netflix has started testing android games for users in poland so they started testing a couple of days ago now members in in poland can try netflix mobile gaming on android with two different games stranger changs straight stranger things 1984 and stranger things three all part of us as a membership so essentially netflix is using their service as a cross promotion platform it's just scroll down and and now you see about a sort of like a section for games and that's where the the two stranger things games are i think a couple of weeks ago i was talking about the stranger things game

i think it's called puzzle path anyway the puzzle rpg game that came out of next games um and what it seems like is there's gonna be at least at least two other stranger things games coming in at the same time now two of them already in the netflix service so i've made the uh the tough investment of selling the rest of my net of my next game stock uh because i'm really afraid of like how many how many stranger things games are they coming you know uh during this and next year and how is their game gonna stand out given that it has some challenges with the uh with the whole collection meta uh in adjacent it tied to the other stranger things universe any comments on netflix guys nope no no all right moving on hero wars a hero wars maker nexters is going pug public through a spac with that 1.9 billion dollar valuation so netflix net nexters public listing is

also expected to support its aim to become the leading consolidator in the gaming space in the russian-speaking countries eastern europe and beyond capitalizing on the significant opportunity in the market while deploying its proven value creation playbook to support other companies and driving meaningful synergies over time wow okay so so i was looking at the at the board of the uh of the nexter and interestingly it has playwright's founders on it and um and yeah so i and hero wars is their key game and with hero wars their installs actually peaked in april at 5.5 million a month and they're currently just at 2 million a month so there's been quite significant decline over insults but on the revenue side they're doing great so they're making about 20 million net revenue a month according to sensor tower and for context scopely strike force marvel game are at 16 million net

revenue a month and plarium's raid shadow legends are doing about 21 so at 1 million more than than nexter so neck to neck and both of the games were launched pretty much at the same time uh though for plarium's raid they're actually according to uh very very um credible sources they're doing pretty good outside mobile as well with their um with their web sku now websq pc's queue eric any or easy to say eric any comments i i have many comments but i will just say that a company like this has no business being public i'm going to say it again the same thing that i keep saying they have no other games besides hero wars which is an amazing game and it's all right don't get me wrong i love these type of games is it amazing game no it's not but it's it's yeah well what are you talking about it's really well marketed yeah and it has like that addicting component of collection upgrade evo which is the same

as summer's war or whatever all those type of games so it's i played a little bit it's all right um but this company should have been acquired not not going public so we'll see we'll see what happens starting down to i think eight and change um after the first day of trading so it yeah it's gonna be a struggle on to the next news playtika acquires reworks so platika has acquired 80 of reworks for 400 million dollar in cash platika will purchase the remaining 20 of reworks up for up to 200 million dollars in cash based on 2022 company ebitda so very you know very shortly after uh in 18 months since its launch redecor sorry decor which we have talked about in this podcast it's a game that is competing directly with design home so redecor became the number two design entertainment app interesting way of defining it um on an in-app purchase

revenue and for context design home at the moment according to sensor tower is about eight million a month run i'm not sure if this is correct run rates eight million a month uh run rate versus yeah versus we decor is six million a month in net revenue so redecor at the moment has 20 more installs a month than design home and i'm going to make a bet i think with the support of platika they're strong publishing org more resources they're going to they're going to pretty much you know they're going to be design home inside a year i think it's going to be the uh the biggest challenge just give them a few months but okay and then we'll see what what the what the design home is going to be under ea i mean of course they're going to invest but but that competition is going to heat up and i want to say just huge congrats to ilcoteppo and the whole team at uh athena core these are your boys right these are your well no they uh well i i wouldn't say

friends but i know we look pretty well we've met and they started this thing what six months ago i applaud this acquisition on both sides first of all platika needs to diversify because social casino is going to be a real struggle and a real lodge i think um and two i think this is a great place to be and and the the game is done very very well and the team seems solid and yeah this is the way i think it's win-win-win it's expensive for one game it's expensive but uh yeah but um it's it's a three-year-old three-year-old company right three is that uh you know plarium spot future play right i think these israeli studios are really uh rushing into finland yeah opened up yeah aristocrat opened up uh a

studio that's right [ __ ] finland damn it more news no but there's a there's a there's a you have to kind of think it the other way around because think about it finland had some amazing studios that are very profitable and very big and everything has been sold everything yeah versus in israel they are just they're like oh you got some studios cool story sell us to us and and um you know supercell is kind of pushing they they've um they've invested into um metacore and that one is scaling pretty nicely but but i kind of yeah it's it's a it's a little bit of a double sort out i would have been on the internet man why is it that bishop never has a good connection it's it's just my neighbor the audience dude get some cable line dude get a trunk whatever it is dude make it happen i tr i've tried everything i've tried everything it's my neighborhood it's just absolutely crazy finland have the most the best gaming developers and technology people in the world and you can't get a [ __ ] good internet

connection look at this look at this i live by the beach there's not there's there's no good internet oh man yeah yeah last one last night i got [ __ ] when i was actually on the beach i've i've been uh i'm in front of a photo of a beach and my internet is breaking down this is how bad it is anyways new zoo cloud gaming will reach 23.7 million paying users and generate 1.6 billion in 2021. chris what do you think about this i i just renew my objections to this fantasy i'm sorry candace i really apologize i said i wouldn't talk trash about new zoo but enough of these press releases of this [ __ ] forecast i actually read this thing finally like after you know talking all kinds of trash and i i i think there's definitional issues there's three main issues the definitional issues like their cloud gaming revenue is all consumer spending related to cloud gaming services which

is relatively nebulous including full game purchases which is not really cloud gaming if they're downloading and installing if that's what they're including so it's hard to say right but but but it could be a definitional problem here right because 1.6 billion seems ridiculous um the second thing is that uh i don't know there's three there's four things actually is that asia represents half the revenue and i have no idea what's going on in asia with cloud gaming that may be right let's just say for a moment that that is half of it but i don't even believe 800 million coming from the west so so that that's that's still ridiculous but the the fundamental problem though is they're talking about not sorry i'm trying to get to get the data here but they're talking about revenue of like 60 some six billion or something seven billion by in three years it's it's ridiculous but the fundamental problem is their methodology the methodology is the biggest issue they're taking a top-down approach they're starting off with like

some insane number of online population and drilling it down to those that will are going to be playing cloud gaming and that's not the right approach to bottoms up right how many [ __ ] people are spending money on cloud services right now zero right so like something like geforce now which has like 10 million registered users that's an irrelevant metric like 10 million is not that there's like probably less than 1 million people actually using the service on a regular basis or paying for it they're probably all you know registered people are trying the service similar to like playstation now which the only reason the playstation now is probably doing better is because they they converted it to a download and play service right and so and then if they have any revenue one cent of revenue from microsoft i will puke right because there's no way that cloud services are the are being used by microsoft players it's ridiculous they're totally ridiculous right so the whole thing is is about is is a fantasy and uh and i'm

sorry candace i know you're moving over to g-force now i think you're great but i just don't think that this is it this holds water at all but um you know we'll see all right that's it i don't need why am i talking about this more why are they putting this out there again we've already talked about it why is it why is the pr machine working so hard to piss me off okay stop it moving on