TWIG #178 EA’s acquisition of Glu does not seem to be going according to the plan…

[Music] uh i wrote quickly about ea's acquisition you guys talked chris talked about it in the last podcast about ea's glue acquisition i kind of listened to it so i went a little bit deeper pulled some data it was pretty interesting because ea showed 68 growth on their bookings for q3 2022 compared to q321 and q3 2020 that's kind of weird how they show q3 because in 22 we haven't gotten anyway um and i kind of made a point that this is a little bit misleading if i can say because it accounts all the new games that they acquired and they kind of put them into their portfolio and they're showing the growth of the portfolio so as a whole their mobile business for sure grew and will keep growing but it's really based on the addition of these games so i pulled the data from sensor tower and i was looking

really at the percentages uh comparing kind of q 121 to q 122 and really saw a quite significant decline across the portfolio now this is typical for all mobile gaming portfolios right now because mobile gaming had such a surge for a couple of years and now the games are going down and it was quite clear that even though the downloads were up overall that really wasn't seen as the growth of the individual games because the games that grew in downloads were the ones that don't really monetize and what was really worrisome is that that if you check out the newsletter there's a lot of games on the red like out of their portfolio of the games that make most of the in-app purchases most of them are on the red and what's really worrisome is especially the games that they acquired like golf clash design home card fashion kim kardashian mlb tab sports you name it all of them were were in the red both in terms of downloads as well as in terms of revenue and um and i have to apologize just from one thing that's why i'm kind of reciting this is

um i gave a point saying that it's because of how ea has integrated these companies um and i don't know and i didn't i was a i'm not a journalist and it was a poor journalism if i've ever done it because i didn't i only based on here said that they have gone through integration rather than keeping them autonomous like zynga did but to be clear i think so first of all i was looking at their linkedin status a lot of leadership teams have left of these studios and to be clear in my opinion there's really three reasons why people leave post acquisition one is the earn out contract is not optimal and they feel that they can't achieve it number two is working with the acquirer is not something that they enjoy and number three is they have a strong incentive to start something new and what i should have wrote is there's most likely all these three elements at play i don't know which one is the most important but i think that's the reason why a lot of a lot of people

have left who are in the leadership positions who were in the leadership positions at glue as well as play democ but in the end wish them all the lucks apex legends mobile hope it crushes hope it's a fantastic game and hope ea gets these uh these games going and and maybe this is just a short term bump uh and on long term it's going to be great so this is my kind of like a small um correction to the newsletter piece anybody want to weigh in no i would say there's a strong incentive for for anyone to go start something new right now and money's flowing right like every company is having retention problems when i was at gdc i mean that was like it was the the two main themes were hey a lot of my best people are leaving and it's it's worrisome and hey uh i just started a new studio with my best buddy and we raised eight million in a precedent so it's like yeah i mean i get it like any big studio is gonna have a hard time retaining people right now i don't know that it

has to necessarily be like any sort of friction resulting from m a it's just really hard to keep people right now because the opportunity cost is so high to stay at big co making decent money versus go start a company raise a a really substantial precede round right just with a deck and take a shot at mega money yeah yeah so and that's it's good that like that's why i wanted to make the correction because that's definitely uh one of the reasons why why somebody would would leave quickly post acquisition uh sophie voe who's a friend of the podcast has a great uh podcast herself rise and play and sarah fuchs who was uh leading the covet business uh did an interview that i really liked recently and she was like i've worked for ea three times before i just couldn't do it a fourth time i think that's a i wonder how many glue folks are actually do have that um but i thought that was an interesting perspective of just like i've worked for ea enough times in my

life right now it's not what i want to do but even that that like saying that is kind of like not very positive to be honest oh yeah i mean she was spinning i think to your point of reasons why people leave it sounded like she was looking forward to more entrepreneurial work yes try something new yeah i get it from that perspective of course it's the context and the tone that it's being said yeah i definitely recommend sophie's podcast great yes for sure um rise and play everybody [Music]