TWIG #316 Metaverse Myths, Ubisoft’s Struggles and the Stance for Marketing

[Music] hello and welcome to deconstructor of fun this week in games number 316 where we give our game industry Insider takes on the top gaming news stories each week I'm Jen Dono I fill the marketing and Publishing role on the podcast and today we have Philip black monetization Zar Back From The Trenches Eric Crest continuing to stream at the clouds I'm M katkov mobile games Founders and nowadays apps apparently awesome all right so we have a really packed episode more Matthew ball chatter loot box legal litigation I tried to make that an alliteration for everybody changes at Sony and Ubisoft habby and top games and then at the end I'm going to defend all of marketing because I didn't do a good job of that last week you got bounced on I was listening like and Phil wasn't even there and you

got bounced up so now he's I didn't expect to have to defend all of marketing in the intro banter section so I have come back with data it was great Jen is like hey yeah so this what's the sance Seance yeah SE is such a cool show they did this little St and like boom everybody attacks Jen [ __ ] St it was totally unfair marer totally unfair I'll admit I was like I was like what the [ __ ] is going on here we'll get to it we'll get to it pre-record you said something in pre-recording that's what happened no no I didn't just joking no I didn't okay let's let's keep going let's get to Shilling we've had a lot of podcasts come out which is fantastic I had one on live Ops with folks from wuga playtika and game Refinery it was really fun game Refinery actually took a bunch of the insights and put something out to kind of give you a guide for that Mishka you just did one go ahead yeah uh your

podcast was great I have to give a shout out like every time you do these like live Ops and and the previous one like Alex Alex was really good one I had one of my typical ones we talked about the industry the market so Chris Huish who's been multiple times on the podcast is he a CEO of exola or president he kind of keep switching but anyways Chris H great guy he talked about money markets disruptive friends so basically their state of play report and everything that goes into it so interesting conversation about the industry oh he's great I love chatting with him so now we have a supper club in La sponsored by addictive they do Advanced app retargeting and churn prediction they are DSP so the focus of this one's going to be Marketing in UA folks it's Thursday February 6 6 to9 right after the appg grow Summit which I'm going to be moderating a talk at that I love that event So speaking about events we're going to start talking GDC we have two events that we'd like to talk about oh five events oh crap you've added a bunch

more so I'll do the first couple so save the date for our GDC pregame which is deconstructor fund and beta hat Sunday March 16th we've already had 100 signups and just me kind of sending that around yeah so we can hold I think 250 people so keep sending it in and then you take the rest Mishka okay and there's no ticket for the pregame again yeah you can just walk in some folks might get a little wristband for some special guests but we'll figure that out later first come first wristbands so this is Sunday then on Monday There's a sensor Tower dinner we're going to be there some other podcasts going to be there I don't know if they fit in the same room with Eric Crest but we'll see uh then on Tuesday we got the uh the tech brunch with heroic labs and Convoy Adventures so this is focused purely on our technical listeners so Elite Tech anyways you you know who you are uh and then Wednesday we got the the supper

club we have now pre- signups coming in we're going to talk about that more openly but it's going to be probably our biggest Supper Club 150 guests and then on Thursday I believe Jen we're doing a live twig at GDC nights oh are we not well we we need to confirm with them but that's our intent sounds better than than Eric's gym where we did it last time you could smell the old crusty man all the way to the second floor let's just go back to Wednesday and mention our sponsors because it's it's pretty awesome Tik Tok appsflyer newo Griffin gaming partners and us obviously are doing the Wednesday dinner together so thank you to everyone for sponsoring these events giving us the opportunity to have more people show [Music] up kickass liveops made kickass tools that's where heroic Labs comes in they just released a massive update to their sator liveops platform and having done my research I can say with confidence

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doesn't just deliver data it helps you turn it into action with intuitive tools and expert analysis it's everything you need to make smarter faster decisions thousands of app and game Studios from Indie creators to Global Giants trust sensor Tower to help them win so why not you start your free trial today at sensor to.com that is sensor.com [Music] all right let's get to Corrections Mr Crush yes first off I have an apology to give to Miss Jen for dismissing her Severance stunt in Grand Central Stan called me like after listening to the podcast and read me the [ __ ] riot act he's like I was being myopic and obtuse in his words I also explain it to my son who's a huge Ence fan and he looked at me like

I was a complete [ __ ] right it was like one of those looks that like absolutely Burns particularly coming from your own son you know uh he thought the stunt was very cool and as did my wife and after further reflection I do think these types of stunts do provide what's known as awareness in a relatively cheap way to inre increasing awareness for newps New Seasons Etc I was just being a bully I was just I was just being a bully that's all it was and if you listen I listened to it again I was being a big [ __ ] bully well thank you Mr Crest and I do love you as well because that is how you started that whole rant and and thank you for the Oho gentle push back to be fair Adam was on your train as well and Laura Laura was on the side like I agree with J it was it's pretty cute I did not do a good job of the on the spot defense of all marketing this was in our banter section and I just thought it was cool so later on have prepped the full response with some

insights and some data which Phil will push back on and that's totally fine I'm ready to have that conversation so back to you so but you know this leads me to a bigger topic about intellectual honesty right and and I really want to clarify my view on Matthew ball because I think yeah I've got a lot of feedback on that generally speaking so my biggest criticism of Matthew is he's not a game person right he's never worked in gaming he has nothing to do with gaming whatsoever he is an intellect he's a research Etc and I don't think he really understands the consumer of gaming at all in order to connect the dots but what bothers me most about Matthew is that I don't really think he was being intellectually honest when he wrote the metaverse I just don't I mean it just doesn't feel that way so here's my guess my guess is he wrote this absolutely long amazing history of the video game space with this deep research that he had done and there's a small piece on the metaverse and its potential in the back of the book right he brought it to a publisher the publisher said this is

[ __ ] boring right this is not a good book what where's the beef where's the interest the Intrigue right at that stage he basically went off and started reading Ready Player one and snow crash and he wrote this insane section on the metaverse after that right changed the book's names to the metaverse and this began the big Matthew ball grift because it is impossible for me to believe that someone as smart as Matthew ball believed what he wrote about the metaverse right and and what it was going to become he said that the metaverse was going to be the next internet that it represents a successor to the mobile internet right which is insane a persistent interconnected World enabling real-time interactions and experiences he said the potential of this thing was trillions multi-trillion dollar economy reshaping Industries like entertainment real estate education Commerce right and then finally the most ridiculous part of his whole assumption is interoperability right this is the Cornerstone to his vision of the the metaverse right and this never made any

sense like because there is no economic reason to create a ubiquitous metaverse for these big companies these big companies are thriving on their own ecosystems right the notion of allowing identities and assets to stream seamlessly go between one metaverse and another across different like Technologies and platforms it's it's ridiculous right ridiculous now in his defense he does acknowledge the risks like the tech limitations regulatory concerns privacy all these other things but the expectations that he put forth are just so insanely ridiculous that doesn't even passed the common sense test right so I just think there's no possible way he actually believed this yet on he he was on the road getting paid hundreds of thousands of dollars pitching this nonsense he he created a [ __ ] metaverse ETF for [ __ ] sake you know like and two years later two only two years later he writes an opus 220 page analysis on the sad state of gaming

without the mention of the metaverse that is preposterous absolutely Preposterous in my view right and this is the same grift that plays over and over again with McKenzie right they wrote that the metaverse would be5 trillion doll business in 2030 in 2030 dude that's like four or five years away right I mean and they are get charged insane Consulting fees to Executives that like latch on to this [ __ ] chasing rainbows and unicorns and I saw this firsthand they would Resort their entire organization to go after this [ __ ] idea right great people chasing these ideas they would lose people because they didn't believe in these ideas and this is all pushed by McKenzie and Mr ball about the metaverse like just two years ago but what makes McKenzie even worse is that not only are they collecting fees on the front end they're collecting fees on the back end as all these companies are now unwinding these [ __ ] strategies doing layoffs

and getting rid of people and reorganizing because they went after this [ __ ] it's [ __ ] diabolical but McKenzie does with this [ __ ] right and this repeats again and again and again like the Y2K Fiasco Back in the Day the six accounting firms they created fear-monger for years before Y2K on the collapse of society when this clock hit midnight in 1999 and then made millions and millions and millions and millions of fees like Consulting on this [ __ ] [ __ ] right and 2K became nothing but a [ __ ] nothing burger and not because of people's fixing it but but just because it was not a big as big of a deal as they laid out right so this is what really bugs me about ball McKenzie IDC back in the day with the newu stuff about the [ __ ] [ __ ] forecasts you know it has no basis on reality or common sense right it's a big cash grab a sham a racket a con a hustle it's a total grift

that is my issue with Matthew ball amen wow I do have to say I was listening to the last episode and I was I don't know if I've ever agreed with Crest as much as I did with the last episode like that was like one to one because as you said like this is financially incentivized research and the fact that you know Matthew was doubling down with these super expensive speaking gigs predicting a trillion dooll business and now going to a point there because you said is not even mentioning it and and so the problem that I see in this is this does damage it does Financial damage but it also does damage on the lives because these companies are being restructured and now they're lost the money so now people lose their jobs and I understand being wrong it's it's I think it's great that you take a massive swing you try to you know come up with a new trend but if you get it wrong I think it's imperative that you apologize that you backtrack that you explain why you got it wrong but the fact that that doesn't happen and you come up with a new deck and say

like hey industry here you go the next you know few years just use this for any pitch deck as as Eric always puts it buyers beware like that that's the way the way I would put with these predictions as well so I I agree and and again nothing personal but just when we're talking about this process of of if you get something wrong in Academia you have to be honest about it that's why we do corrections on our podcast because we try to be accountable I think that that's kind of missing so I'm not I'm not condoning anything but do you think that the rise of AI and the focus on AI had an impact with the metaverse not being a focus any well listen first of all again I I the metaverse isn't a thing but do you think the rise of AI played into its downfall from a top of Mind perspective sure right yeah people now are chasing those rainbows and unicorns absolutely frankly I think they I thing is far more real than the mete

ever was right but in in essence AI should actually help like to build out the metaverse in theory right like if metaverse was even a real thing to begin with which I don't think it was right because I want to be clear on this because then I get feedback on [ __ ] I gotta stop going on LinkedIn like this my social Med I gotta stop dude Heatherly I'm gon to choke that guy down in La I invited him to figuratively fig he gets out there and starts talking about oh well Roblox and Minecraft are doing quite well you know Matthew Ball's a genius like I'm like dude that is the antithesis of his thesis on the meterse like those are closed ecosystems that's the exact opposite of what they were saying and so like no no Matthew bald got it all [ __ ] wrong like 100% wrong like actually there's nothing about his metaverse that has actually come true in the last two or three years and we're not even on that path anyway but anyway the point is AI could help facilitate

this this ubiquitous [ __ ] that he put out there it never made sense period I did this Bubble Trouble uh episode a few years ago where I was talking about this it's not it's all very Niche like metaverses are like World of Warcraft and [ __ ] Call of Duty that's what metaverse is and Roblox and they're never ever going to interoperate right they're just based on the the desires and the interests of the audience that that you're serving this is not what player one is this is just not it's not going to be so anyway got it okay thank you yes for expressing your opinion I appreciate how forthright you are don't think you're get a birthday card from [Laughter] him he just cash checks dude he doesn't give a [ __ ] about what I say like good for him man good for him you like the grift you do the grift well just keep going like that's that's that's your business so why do you think people like Tim Sweeney pay so much attention to him

why why did people like Zuckerberg rename their company meta like was this was this all just a play from the beginning this was like this was like the ball smoke screen well for for Facebook it was a matter of survival right they wanted to control their own destiny with a new platform and a new that's Zu Paradigm right right and from that perspective it makes total sense again his metaverse is completely different like that is like a proprietary ecosystem for [ __ ] Facebook right like this is not like some benevolent Let's Open Standards everyone shal la la [ __ ] right that makes sense economic for the company whatever even though it makes no sense from a perspective of business and they're just throw wasting money and throwing burning money at this stage for for VR and then same thing for epic right epic is trying to build out their version of the metaverse or a metaverse that benefits them right and they are probably far more benevolent than most but still it's their own proprietary system they're not going to sheare [ __ ] with [ __ ] Minecraft right they're not

going to share assets that's ridiculous absolutely ridiculous so anyway all why what he said from the get-go didn't make any [ __ ] sense and he knew it I think he knew it Mr ball the one thing I I will say to close this out is it was a good kind of Consulting deck that pulled together a lot of we talked about that last week yeah I'm not Bing his work by the way I'm Bing the book but the the Met Concepts but the [ __ ] the work that he did on this deck is amazing is amazing yeah it's it's it's a tour to force right I mean I wish I had half the skill to build that kind of deck I mean I don't even have the half the energy anymore but like it is an it's an amazing deck I think and it does a really really good job of articulating this current state of this industry 100% but there are some notable problems with it which we talked about last week I don't think he really understands mobile and I don't think he understands the customer but like besides that fact good articulation of what's Happening all

right he did work at Amazon games right because he said he's not from games no it was the movie division he worked on a transm media project with DC I saw him advertising on Twitter which was a a true trans media project that the narrative from the show would reach the mobile game although I've heard little about that s yeah just stop yeah all right let's let's continue on I want to do this uh as quickly as I can because it it did make some news and I do think what's going on with loot box is people need to pay attention to it to just make sure that from a marketing perspective and a game perspective you don't get in trouble so ginin impact hoe is settling a US Federal Trade Commission lawsuit over selling loot boxes to players under the age of 16 it's going to pay a 20 million doll fine here's what is changing for the company per the FTC news site they're prohibited from allowing children under 16 to purchase loot boxes in their video games without apparent affirmative Express consent prohibited from selling Loop boxes using

virtual currency without providing an option for consumers to purchase them directly with real money prohibited from misre representing lootbox odds price and features required to disclose Loop boox odds exchange rates for multi-tier virtual currency and the last two are basically don't collect pii and follow Copa so also just for marketers the other thing that they called out specifically was was that the FTC alleged that the ho Universe spends millions of dollars to promote its gotcha system to its players many of which are children it brought up an instance in 2021 where they paid an influencer you know some money to make videos about like opening Loop boxes and then what happened in that is that they actually didn't follow what actually happens in the game and so in the game you can only open 10 loot boxes but in in the video they they edit it and so it wasn't true so don't [ __ ] with your

videos if you show loot boxes perhaps don't even do that so Phil does this crush your monetization soul reading this this is just like a colossal waste of everyone's time like what what is this this just like a fart in the wind like we never know we never know what games are going to be selected they just choose a random game I don't understand why Roblox has never gotten scrutiny I mean we're going to talk about the Hindenburg research group beforehand but like why do we pick genin like is this is this an anti-china move I don't know is this is Lena's like last farewell because this happened under her Administration I don't think we know anything about the marketing side of this or what the takeaways are I don't think we understand what this Administration is going to go after I don't think we know what they care about I don't think we know what the new FDC administrator is going to care about like most of this I get the cop of violations like sure like that's something that I think you'll start to see more enforcement on I'm surprised that hasn't been in a lot of people's predictions like it's kind of been like P's regular so to speak in the video game industry like there's been very little chatter about loot boxes and very long time I feel like and we'll see if

that continues I mean Trump has talked about video games at one point or another in terms of violence but I don't think there's been any conversation about loot boxes and this is all dumb [ __ ] this is a settlement remember this isn't case law yet this is literally throwing as many complaints as they can because that's what you want to do in a settlement to make your argument as good as possible like a lot of these complaints are like they had banner gotas and the banner gachas say that they're going to have an increased probability but they ding them because the base gotcha doesn't have any probability to begin with so they're almost like they're advertising a rate increase where it's going from nothing to something that's just like really ticky tacky [ __ ] like this isn't even like the fortnite case you remember that earlier this year epic was actively deceiving people like normally I hate these cases these stupid dark pattern cases but epic was doing shady [ __ ] in fortnite in terms of like where the close button was and Confirmation this is ticky tacky [ __ ] okay and that's all I have to say on the matter and just to give you screenshot like this is the character banners that they're talking

about you see that there's up text suggesting that there's an increased drop rate that's that's one of the complaints is that this says up because it's a character wish event versus a standard wish event and they shouldn't have said up that's the that's the type of stuff we're now gonna have the state look into okay yeah I I I think though for me and for marketers my my advice is to I don't know first of all stay away second of all don't edit it to do something that isn't true which you shouldn't do anyway um yeah ex well they're gonna give you your pack opens yeah they well this was with an influencer and then they they edited her video so that but they use that as creative though they use it as creative that they sold versus just Organics yeah I mean an influencer can do what an influencer is going to do all right a few other things from me so over at Sony they have a New Soul CEO where hadik nishino is named the sole CEO of

siie Sony interactive entertainment herin Hol will continue leading the studio business group the CFO is promoted to the Sony corporate CEO hul was the head of the first- party Studios and also the group that was taking their IP to do trans Media stuff so anyone comments on that one or yeah I'm gonna I'm going to follow up with people because just just to hit if what this means morning yeah yeah I think at the end of the day we we were saying this before is that the Japanese are now in control of Sony right it used to the Western was control for years over a decade right so now the Japanese are in control like for better for worse right but the reality of it is their entire business is in the west right so it's like there's a little bit of a mismatch there so we'll see how it operates but right now they're making clearly making lots of cuts on Life Services they're consolidating teams they're trying to make things more efficient which I guess Herman is kind of like leading up from

the studio side most likely it's nothing but it's just creating more efficiencies but I I'll find out if there's anything there I'll let you know okay cool Final little thing just really quick last week we talked about Marvel snap getting caught up in all of the bite Dan shutdown you have not been able to download their app in the app store or the Google Play Store in the US they are now fixed so they have a new publisher to help them self-publish called skystone games the Marvel snap folks said that they probably lost $600,000 in revenue from the outage so it looks like they are now clear and they said they worked with nuu on that so thanks to again mobile gamer. biz for that info all right chis passing it to you all righty David Hadad is heading for the door at Warner Brothers finally actually I'm surprised did it happen a long time ago to be honest like I think he's had a tumultuous time there let's say with very high highs and super low lows with

Mr Suicide Squad so we'll see how they backfill all those roles and I think that's all I can say on that one the developer of power world pocket pair is starting to publish games they announced that they're first project from this new initiative was a game from Sergeant Studio what's the game anybody know no I haven't said [ __ ] about it yet to my knowled all right hindberg calls it quits this is the big one right the firm that went after Roblox with their Short Selling memo that clearly did not work because the stock is trading at a 12 Monon high right now is now shutting down he said job stress Nate Anderson too stressful so got it Roblox is bulletproof baby you can't you you they're trying to put bullets in the Roblox and it is just keep soldiering on yeah that ricocheted pretty bad like he shut the whole firm down after you know releasing a solo on Roblox you know he used the p word and all everything was

like and then he was like too much I'm done like okay yeah I think he should have go after somebody that had I mean some of the concerns are legitimate but in a minor way Crush to your point on that topic like go after someone who really deserves it all right so continuing on oh Ubisoft they so so this is like a drop in the [ __ ] it I'll be honest I I'm sorry for those people that have lost their jobs but this is nothing compared to what Ubisoft needs to do but ubisoft's laid off 185 people in their European operations from Stockholm and UK right is there any others yeah so these are the some of the development teams that were supporting both Star Wars Outlaws skull and bones and ex defiant but my question Still Remains when are they going to shut [ __ ] Paris down right why are they just when are they just going to get rid of that whole guy damn building you know like

that's when we'll start talking about layoffs that actually are material for [ __ ] Ubisoft but anyway I think we should see a lot more of these type of restructurings going forward as they kind of retrench and retool and figure out what the [ __ ] is going to happen with that company I still think fundamentally they likely will get acquired by Savvy or maybe 10 cent if they can make it work I don't think they can go on on their own yeah they're 19,000 right now what do you think is the head count that they operate at like what is a good equilibrium for 10,000 10,000 you think they should basically do half yeah basically yeah okay isn't EA like 12,000 yeah they should right size to like the EA levels in that range okay easy not like must cut like 80% we're not we're not there yet no I mean look making games is very complicated it requires lots of [ __ ] people like it's not like you can just get rid everybody right yeah I got to keep the roller this is not a tech compan hyperbolic hyic no no but it's important

to distinguish though like a tech company like yeah you need Engineers but you don't need the bodies to do all the different operations to make games what do you think about the sales of Star Wars Outlaw because I think they reported that was 1 million that seems quite low for expectation I think it was like the lowest selling Star Wars game of that caliber yeah that's terrible and the quality wasn't even that bad I think there were lots of other reasons why I think that game did not capture the hearts and minds and part of it's because Disney's completely destroyed the Star Wars IP since they acquired it but also because I don't think the game was made with the proper way but I don't want to go into that too much yeah massive entertainment is a good studio so it was kind of surprising yeah yeah I I'm hoping their next hopefully if they they they should survive because they are a really good studio and and hopefully they kind of iterate on The Division Style game of the division so yeah I have a little bit of this is not a prediction but I was

kind of looking at this Ubisoft news and we have a Ubisoft office here in Helsinki as the stockh home that lost 20 Ubisoft employees so in Helsinki we have a pretty big one it's called red links they made those mcross games and it has been doing other type of projects one of them has been this game that I just remembered which was called Gwen's getaway and it's a surprising thing that Ubisoft would be making a puzzle game with this narrative like with everything that you should be making in puzzle games 7 years ago so anyway they apparently kicked off this project I looked at it and it's dead it was 9 months in soft launch and killed pretty quickly about 100,000 in stalls 35,000 in net revenue and their managing director who's fantastic Seline she has changed her role to Regional mobile and crossplatform production director for Ubisoft Finland Sweden and Romania and so when a managing director of a specific Studio changes the name to be something broader I'm sensing that with the game as well being killed that the Helsinki Studio might be in trouble

hopefully that's not the case but yeah early signals of uh perhaps new Cuts By the way holy [ __ ] I was looking at the Rainbow Six game in beta in Canada or whatever the [ __ ] it is dude is [ __ ] horrific it is horrific mob yes it's making like 10 cents per download dude like like you can't get worse than that right that's like I that is unbelievable I couldn't believe it like the game visually looks amazing like the the Fidelity I didn't really look into the gameplay all that much I was just looking more at the metrics like yikes how much money did they blow on that thing they should never have made that game internally like ever why but why like they're not capable they don't know [ __ ] about mobile they don't know [ __ ] about monetization like there was never any success Vector for this game besides Fidelity and quality which is the exact opposite of what you need to do for mobile right it's like just on a hypothetical level I understand like Rainbow Six they have a live service

game they are able to produce quality titles so if they would say hey we want to do this quality liveops game we want to move it to mobile we're going to put our research the same ones that are making the PC version I mean now I'm describing war zone uh so maybe just continue let's continue youed at the war zone deck let's go with this logical argument that you're you're throw it out there I I fast forward it and somebody said war zone I'm like okay yeah actually yeah but act War had Call of Duty mobile already there and tensa was defending their Turf so I I get that point but but yes okay moving on Singapore based Outsourcing company virtuous has acquired three game development Outsourcing firms Netherland based abstractions us-based pipe work Studios and Canada based umaya interactive the financial terms of the deals remain undisclosed these acquisition increased virtues total headcount from 900 to 1,200 employees across 60 Studios I have a question about this so Eric what's your take on it because keywords was another another one that has massive investment for

private Equity they are now acquiring these Studios and I'm trying to understand is this sort of like a new Boom for third-party Publishers or is this the consolidation of the like Outsourcing Studios like which one is it definitely the consolidation of these Studios and the capabilities of keywords is pretty impressive relative to what I've seen out there like there's not many companies that actually can do what keyword does but it's all kind of part of the fun Al challenges with this industry as as a whole is that like it is very expensive to make games and if you can use Outsourcing facilities to make it cheaper people will do that and I think there's a lot of opportunities for these big Publishers to do so to reduce cost and reduce risk right because it's you don't have to hire all these people and have them right you just use them when you need them right that actually is a great value these Outsourcing Studios were huge back in the day when we were doing like 16 SKS per title right across all these different crazy platforms that we just

didn't want to have our core teams at EA building because it was too [ __ ] expensive to go after these small opportunities right so they would like Outsource everything that was like on Nintendo's platforms or on you know PC even handheld or whatever and so like it made sense and I think today it makes more sense because of lots of different parts of the game development process that should not be done internally it should be done with a cheaper alternative so and these are probably in all like most most low cap class locations unlike you know EA and [ __ ] Montreal and Vancouver and Redwood City so so if you're a smaller Studio that is doing outsourced work is this good for you or bad for you like does it mean that virtuous and keywords are just taking more business from you it's a combination right because they're an acquisition candidate which is good for them right so they can get a liquidity for their shareholders or their key people I think generally companies want to put their risks can't have it all in one location one keywords can't own

everything from EA for instance so they they'll Outsource to other Studios as well but if you don't have the scale they may not be interested as well because there's too much risk with that too so I don't [Music] know this podcast is brought to you by apps flyer in today's Digital World understanding your apps Journey from Discovery to download is more than just insightful it's essential enter apps fer the leader in Mobile attribution and marketing analytics that allows you to measure the full potential of your marketing efforts making every ad dollar work smarter with apps flyer that's your new reality dive deep into Data driven insights that reveal exactly where your users come from and how they'll interact with your app apps sler for your apps potential reach performance step into the future of game monetization with exola the premier partner for game developers seeking to expand their reach in Revenue exela provides a robust Suite of tools designed to enhance user acquisition

manage subscriptions and streamline Payment Solutions worldwide unlock new markets and maximize profitability through their customize secure payment architecture and dedicated support team exola powering game developers to achieve Global [Music] success all right let's transition over to games Phil what's going on with habby we've been covering habby since since the really turn of the Year remember they had archero 2 which is starting to scale and they also have cap go which is like their big moment right that they got these two games they're launching and I think the story with them has been Complicated by the fact that every time they've launched a game it's basically gone downhill after launch like that is usually one of its peak Revenue periods is very soon after launch and I think the question for habby is whether or not they actually want to sustain a title Beyond a couple months and don't be wrong they had incredible scale like if you look at survivor.io or archero like

they've made incredible sums of money they just seem to Peak very early on which is not the sign of a sustainable business so a lot of haby's Revenue growth over the years have just been stacking on more and more releases despite the fact that a lot of them are still declining from when they had their revenue Peak and so I think the thing that I'll be really curious to look at is whether or not caby barago and archero to are able to break this pattern and at least grow as your stain over time and it looks like they're on a semi good trajectory I mean it's really early on but it looks like they're growing Revenue I think the key is what they're doing on the user acquisition side and of course we don't have ad Revenue which we know is a really big part of their playbook it's a really big part of their meta it's a really big part of how they've developed a lot of their games but when we just look at Raw IEP it looks like the games are doing okay but I still have a lot of concerns about whether or not these games are going to be able to be longrun sustainable businesses and this is what we look at when we see them stacking it's basically been it's basically just been new game introduction that's been

accelerating their revenue like survivor.io was a huge monster success in terms of acquisition but it's been on the decline our chero has been on the decline Kappy barago we know has is a new game that gave them a spike Souls remember their RPG they did dude I still play that game you love it right I remember I still play I'm playing it every day like twice a day I love dudee this thing was like the most streamlined squad-based like collection RPG I've ever played it's [ __ ] brilliant but you're right it's it's it's on the decline I know it it doesn't it doesn't require it doesn't push you to spend as much yeah as others do you remember SS snaker like that was one that kind of snuck in last year that didn't get a lot of attention like that really didn't go anywhere I think it's a complicated story for this company and I'm not quite sure I don't know micho what do you see when you look into these numbers yeah I think it was fascinating when he brought this up because I I love havest games I haven't played Souls but I pretty much played everything apart from that when when I I started looking at the revenue per download chart that's

where you kind of see like they're you know based on this they're doing really great basically what the revenue per download chart shows is I put in these these key titles from habby the newest games they just shut up their revenue per download they keep on like they've significantly improved how well they monetized when you think about how archero one kept growing now with the launch of snake you can see that it it blew through all the records They had it looks like cap bar go is going to blow out the record it looks like Archer 2 is even better in terms of monetization but at the same time it looks like it's not enough like it the the games don't have the LTV to scale because on the long term we see the downloads declining for all these games despite the growing Revenue per download and I think one of the challenges that all these hybrid casual games have is the cpis are higher more expensive to scale these days but the other challenge is that when you have inup ad Revenue that's capped so you're really riant on downloads because as you show one player more and more ads as they retain better you get less money

from them because the ads are just not so valuable so the early ads are more valuable than the late ones and so that's where your system has to to essentially change from ad monetization to inap purchases and I think that's where these games are having challenges and when looking at these graphs from sensor Tower like the the hybrid casual revenues it continues to grow it tends to take a little bit of a portion from casual games nowaday and I think like fast forward a year or two I'm going to put on my Matthew B hat on and I would say that that these Publishers are going to turn into what we call Casual Publishers I think they're going to start competing against the dreams the play rxes and and the kings of the world because having this hybrid model of inapp ads inap purchases is just not enough they need to push even harder and inap purchases to scale further that's my hypothesis here all right they learned how to retain but they don't make money from retention that's what I mean like the same way as casual publishers cool let's move on to what's going on at

the end of 2024 I think Phil is this yours yes sarana has released for the United States the top selling box Revenue games now that includes both retail and digital and I think there's some surprises on this list or feel free to tell me if they're not of course like Black Ops 6 is number one but I think the most interesting part was seeing number two which is NCA college football from Electronic Arts and not only that do you remember when we covered a while back that bundle they did with Madden yeah and how many crazy copies they sold so that MVP Sports bundle that includes NCAA football and Madden came in at number 10 in terms of just unit sales that single skew so if you kind of try to distribute those sales to Madden and NCA I'm sure they would creep up the list even more unbelievable success I think the thing I take away from this though is that this is what happens when you have a product that's so big like EA fut that is so much of EA revenue and when that catches a cold the whole company gets a flu and that's what

happened this quarter if you've been following their earnings report so despite the fact that they had these wins with NCA football they it's interesting they blamed it on Dragon Age which I didn't quite understand like I'm very confused on kind of EA's earnings like this makes it look good or at least they've had all the success but when you have such a big franchise even 5% down there's so many wins you need to accumulate to over comment I'm not quite sure what you what did you take away from this Eric when you looked at the top selling games and kind of the EA Story look the EA story is basically FIFA right so BA sports college football outperformed and I think that would have done it maybe front loaded football out of the holiday so that might have hurt them a little bit in in that quarter maybe Dragon AG you're right was a complete Miss for them I mean like half the units than they expected they said but still that's not Material relative to what FIFA drives right I think there was almost a 500 million dollar shortfall on FIFA which is really not was certainly not expected on my front but so I actually talked to an expert in

football just like earlier this week to understand Mr Jeremy snin I don't know if you guys know him but he's been following the space very very closely and it looks what they've done is they've they pushed monetization so far that they're pissing people off right including some of their top streamers that have kind of you know bowed out and just like rebelled against the game itself so they need to fix some [ __ ] to get the people back but sometimes it's really really hard to get outturn Spenders and so this may be a struggle for them but Jeremy thinks that that it is fixable that these guys are really smart and what I hope is that Hardware adoption will help bring some of these people re-engage some of the the laps people and bring them back but they may need to pull back on the aggressive spending requirements and throw the audience a bone but overall this could be a long-term concern for EA because the rant really is this is that EA has been relying upon FIFA for growth and earnings and revenue for way too long

right without anything else you know so it's like it's only a matter of time before you kind of burn out your Spenders right like you can't just keep shoveling the same [ __ ] over and over again pushing monetization until things break you know and this may have been that point for them so I don't know I think Jeremy thinks they can recover I think the jury's out on that but the really good news for EA though is that they actually have products coming out next year that are interesting for once right they have a new Battlefield they have Iron Man Andor Black Panther and this could offset any weakness that they see from FC but in my mind the reason they were probably accentuating other things besides FC because if FC is terminally weak or like is not fixable then they have a real problem on their hands yeah right think their earnings power just goes away and that that's a big problem for EA and CEO so yeah don't they have skate coming too no one gives

a [ __ ] skates coming yeah baby just saying up demand that is absolute fan service I don't think yeah no do you remember how big Tony Hawk was back in the day though yeah but skate is not like Tony Hawk it's like more realistic it had like real ads I remember real companies advertised and sight that's probably why you liked it has an ad placement of real brands that like fundamentally that misses so many different things it doesn't check any boxes it's really not a game that people want at at least I can see you know and this is where I could be wrong but I mean from all the work I do in terms of looking at what genres matter to people this is definitely not one of them you know I don't know I haven't looked at it in a long time this is the me of a Ubisoft project right this is said Ubisoft was making this game I'd

be like yeah of course they are [ __ ] the French dude the [ __ ] French are at it again let's do this right remember the roller derby game they did recently dud of course not like no one remembers it because it's so dumb no one cares all right let me do my marketing Spiel so last week I I didn't do a thorough job of Defending all of marketing on the spot so after last week's piling on and [ __ ] on all things marketing I'm going to call this segment marketing for the product Skeptics Don Draper says Fu you talking about me all right so there are books and books on this I'm gonna try to just pick three key things to talk about and I'm also talking a little bit more specifically about the severance stunt and how it broke through the Zeitgeist plus the role of innovation and the innovative ideas as part of the media mix I'll say this at the end but again like these ideas are like 20% of your budget or less most

likely less most of your budget 80% of your marketing media mix goes to what Phil loves especially in Mobile right in the world of console PC it could be a little bit different but you know 80% goes to [ __ ] that works and then the 20% it's like a diverse portfolio you get to play with okay so let me give you the three key points I'm going to elaborate and I'm going to try to keep them a little bit focused on money since I know Phil loves money and you guys love money and not going to bore you too much with the still very important brand metrics and brand impact that ultimately leads to the money but I know you'll fight me on that so let me give you three of them so they can't play your game if they haven't heard of it number one millions of dollars of free media eared media can happen from these kinds of events number three is these kinds of events and these things can boost the performance of Performance Marketing and Organics By the way you get new creative you get improved ipms and we'll talk a little bit about that later okay so go ahead

let's dive into number one tell me so they can't play the game if they've never heard of it so in the words of the great dond Draper success comes from standing out and not fitting in and so the thing that worked incredibly well about the severance stunt is that oh my God everybody was talking about it and the reason why is they were building the idea of awareness so many people didn't know about Severance even though like I've been a cult fan since day one they had to increase awareness because people didn't it's Apple TV plus like so many people don't know so the marketing funnel has different stages depending on like what industry you're in but always at the top of the funnel is awareness you have to know about it at the very very top I went and pulled Google Trends you know because I know my friend Phil would ask me so clearly people did hear about it so on the day of the stunt and then the next day Google Trends showed interest Grew From a 23 on the chart to 55 on the chart yes I know that this is against itself I did put Silo on the

chart I did put also Marvel Rivals just for fun on the chart as well but we saw a significant change in Google Trends from when the stunt happened to the next day ultimately to the premiere and the day after the premiere obviously being the biggest piece all right so number two is millions of dollars of free media this is called earn media so every major paper cover CED it all of the talk shows had the cast on they were talking about it I just did a very quick search on Tik Tok and I pulled up one video that had 4.7 million views another one had 1.6 million views and so the amount of just coverage from people just even on social media was pretty huge so it's really tough to estimate the number of Impressions that they got the Ted lasso billboard promotion from a couple years ago got 2.2 billion Impressions and so I'm just going to about I think they got 500 million impressions I'm going to be

generous and give them a really light CPM of $10 so what that means is to buy a thousand Impressions you would spend only $10 now in the video game industry and I'm being generous here it's $20 cpms to $100 plus for many of the influencers to get that kind of impression so just a little math on that that's $5 million in earn media so that is $5 million of your marketing budget that you don't have to spend on buying awareness advertising that they got from doing the stunt again I'm going to be super conservative and say they spent a million dollars to pull that off actors crew all of that so that's $4 million in a sense of the earned media that they had there okay so that that's free advertising oh Chris is [ __ ] his pants and and is gonna get on me in a second I love the voodoo math but go ahead trickle down marketing trickle down marketing economics Don Draper is not real by the way I just what I I want you to be aware m j just St talking what he's not oh I didn't I I had no idea I'm

trying to make this somewhat interesting because this is boring stuff all right so the last one is it can boost the performance of Performance Marketing so the main thing that I forgot to mention is this can give you all kinds of new creative so you get a ton of new creative that you don't have to pay for that can ultimately in sense improve your you know click-throughs your conversion hopefully your CPI and so that we saved a lot of money on new creative and then you reduce the cost you don't have to do quite as many influencer campaigns because you can have them talk about this event and you can give them this so they don't have to make their creative and that's a savings and so when we bring up the funnel you know we start to move down the you know the funnel a little bit again like this was not designed to be direct response this was designed to get people aware of it you know some of the the old school is frequency you need to see something seven times before you make a purchase like that's old school kind of like

reach and frequency marketing you have to do reach then you get it in front of people and then when they see it in an ad they're like oh yeah I saw that I'm going to convert so it helps with CTR it helps with conversion by the way this is not your entire budget this is just a a little bit okay I'm going to bed I'm ready for questions Phil as we've gone back and forth over the many years I agree with you one thing you correctly point out is look it sometimes you're going after the top of the funnel and you need to respect that and I get that and the other thing I really love is you split up this budget 8020 like look it you don't need to vote 100% of your budget to the brand marketing [ __ ] like have a little bit of fun money you know get out there do some weird [ __ ] put some warthogs in like a South Korean mall or something I don't know supercell likes to talk about this and they're like marketing ads or something you know do do unscalable things as like Paul Graham says I think that's completely reasonable I would really go back to Eric Seer who says that all advertising is Performance Marketing because at the end of the day all I ask for is a model which is what you've presented here this

is what I ask for from Brand marketers show me how the top of funnel thing that you're doing ultimately gets to a cosper install and ultimately get to a row as number like I get that it's top of funnel but you need to show me what the refinement processes because at the end of the day you're giving me more pigs but I want to know how many sausages are going to come out the other end it's not enough to just show me that you're giving more like because those pigs could be like they may not be good meat you know like ultimately like it like I want wagu [ __ ] you know who who knows I want I want High row ass pigs and like that is what I demand for marketers because often what I see Jen is exactly what you described right it's Don Draper remember the carousel speech he gives where he like rebrands this photo projector and he talks about memories from his family takes us to a place and he loads it with his own photos so many times I see brand marketers trying to do stunts to impress each other rather than to maximize growth and that's the only warning sign I would have so I'm actually against of Ian at the end of the day like this wasn't that I think

invites a lot ofu because the number was so low the other thing I'll remind people of is like as budgets rise that's when you should be applying more scrutiny and demand more direct evidence but I would also challenge this is the one thing I'll say I would also challenge marketers to think about because yall are so creative you know how could you make this direct response remember when we were talking about digital daus which from our gab Bladen our favorite founder from machine Zone remember how he had that QR code that like bounced on screen or something along those like I would challenge marketers to think about like how can you integrate more direct response things even into brand advertising absence of evidence is not evidence of absence I totally accept that but I would ask about how we could make these things more attributable so we could see your true value I get that and so this was not a direct response piece of you know this was purely on awareness and that's fine so a couple of things you could do to measure this one is brand lift studies which you know you can see pre-post awareness you can also do conversion lift which is prepost on your

ads did conversion change at all that's a kind of a way to know that this was the thing that did it Organics what I've had to do in the past is look at pre-post Trends in some cases like right when the event is happening for a window after and then also did your organic versus paid ratio change you know we have that on sensor Tower Google Trends you know as we just looked at show some impact you know I don't love social listening as much but it is a way to see where their sentiment changes did any of your traffic from App Store website change and increase right after the event and so a couple of the things on how to make it more direct response where you can again this one wasn't really designed QR codes you're absolutely right I have put QR codes on everything since for the last like 10 years retargeting and so what you can do is anyone who went and you know looked at those things you can you know obviously use all of the different partners that we we talk about

here you can do retargeting you can sign up for this email or sign up for an SMS or a text message and then that way you've got that relationship kind of you got them in the CRM funnel the other thing you can do which you love is make them an offer and say hey one month free of Apple TV if you sign up right now or go to this website or do this thing and that the event could have like LED people there so not exhaustive but you're right that I would love to find more ways especially with the in the world of the QR codes I see it on my TV all the time now so everyone's starting to do it so there you go that's defensive Marketing in a few minutes was that okay Chris we're all good we're all good J you guys are bored out of your mind like you're like fans accept it oh yes okay well you started with Don Draper I got excited and then it was like oh we're not going there okay okay what do you mean you're not going there I I put him in my AI picture I have I have

different images of the Dawn Draper show it was pretty exciting so oh the hamanda is that what you're talking about yeah yeah he lived an exciting life in the 60s I wanted more references to that time all right everyone thank you for hanging in there for my marketing diet tribe and we will see you next week see you you did it you made it to the end of the episode as a fan of the show it would help us out if You' subscribe and leave us a review on the podcast service of your choice those stars and likes while a small action on your part mean a lot to us and help to grow the show more importantly are you a member of the deconstructor of fun slack group if you have 5 years or more of games industry experience go to deconstructor of fund.com SLS slack and apply to join during the games industry best professional Community Field with peers always willing to lend a hand or subscribe to our newsletter to get all the latest insights from the deconstructor of fun content creators

thanks for listening