TWIG #317: Big Dream, Bigger Battlefield, and the Biggest Roblox M&A deal EVER

[Music] welcome everybody to this weekend games from deconstructor of f twig 317 the inmates are now running the Asylum with Miss uh Jen out of the picture for I think this is the first time in like years I don't know she's she's been a very consistent so it's just me Philip black and Adam teler giving you guys update on what's happening in the news we're going to talk about is the dream games big check Battlefield reimagined reemerging and the biggest Roblox m&a deal ever so who do we have today Phil black monetization star Adam product guy let's just get into it let's get it let's Club wait hold on hold up I think I think there is one thing we have to revisit now that we've all had uh different moments to go after Matthew Paul but I couldn't realize how much resentment there is out there there's

like an anti Matthew ball crowd that feels like they're not being spoken to and ever since anyone's spoken out they're like oh Eric thank God Eric spoke out by the way well I think there's both sides of the camp because everyone still wants to believe in the metaverse type thing but I think the majority of people are like oh my God yeah that guyy is so full of [ __ ] you know like that that's the constant of course I'm in my own Echo chamber I imagine but I think so far like I think people kind of want to call him out for completely [ __ ] up the entire thing just destroy except for Heatherly right Heatherly still is holding on for dear life for the hope and dream that is web 3 like rainbows and unicorns will come to real life it's like unbelievable like that guy he's he's in his beable like just raise around right now around metaverse platform stuff beam Star Trek timelines people for Massachusetts yeah that they basically shifted to uh metaverse technology metaverse platform stuff where is the anti- ball crowd

coming from is it all like is it all the people just saying like hey anti- metaverse this doesn't make sense why did you talk about it or what what is the antib crowd saying yeah I mean that's basically it there's no his vision for the metaverse was ridiculous basically I mean I heard that for many people back then it wasn't like some like Revelation now I mean I was again I was on a podcast like two years ago at nauseum talking about how this vision of the metaverse is ridiculous like yeah Roblox is a metaverse and so is epics thing world of war cup all these things are different like Niche metaverses that is what the metaverse is it's not some ubiquitous like the next internet thing you know and that that was the whole pitch but some people like Heatherly are getting very confused about what's real and what's not I remember fighting in the trenches with you Eric right like talking about talking to people who just wanted to shift all strategy towards the metaverse and how infuriating those conversations would be around false equivalency after

false equivalency no I'm just asking the question of like is it just about the metaverse or is there actual like good pointed feedback back to him about some of the analysis that he did around the future of the market I think it's really about the suggestions he offers to the Future like I think everyone like spit up their coffee when he said AAA Mobile gaming you know what like don't get me wrong I don't think I you know when he goes over the growth drivers for the future you know their potential growth drivers I don't think he's advocating for all of them but it but it feels like he is a little bit by putting them out there I would say that's one of them I mean other new held handle devices you know we're talking about like the PlayStation portal the steam device I mean in the report he goes over how many few units that they've sold again I don't think you have to hold them to this as being his argument I think he's just pointing out like these are potential things we should examine But ultimately they don't really go anywhere I I think the most disappointing part is he didn't reflect on his metaverse he didn't update what went wrong or what went right and I think that's the frustration is like there's Rich analysis to be done there

Mr ball like we we'd love to see you do it it's not a walk of shame you know at least I tried to do something on Squad Busters f i was released but it's like update your priors what did you learn how did we how did we grow from this it looks like it's not panning out give give us something to chew on yeah right but I think that that is good feedback to him right is just to say like let let's talk about the meders because he does do a whole section on Roblox you could use that section to talk more about what has he learned since his writing his book and how does that apply towards his vision of the future right and and the success of Roblox and you know fledgling success of epics platform like there's new things going on right you could just update it with the actual what's happening on the field right but you just can't just leave this just hanging out there you know like dude you wrote a whole book about it and and did a tour like what okay anyway all right I guess I'm in leading this charge which is really uncomfortable but okay Corrections in the last episode Mishka said that Outsourcing companies

especially keywords and matures he said that virtuous has 1,200 employees that's only in the west virtuous has over 4,200 employees worldwide thank you The Virtuous player folks for reaching out on this Adam we launched the PVE shooter podcast so actually the weird thing is we recorded that I think like a couple days after Marvel Rivals came out right so it's actually been quite a bit of time since we recorded it but we've been getting good feedback on it one was was around that we made the wrong assumption that division 3 had not been announced when it has been there actually is open rolls open for the game we'll see how that all that's out and also we didn't talk about Borderlands 4 which was a big Miss Eric is pissed about Borderlands really Borderlands No you're not all right all right quickly on the headlines yeah we don't have any banter or we're not Shilling oh because Misha's not here that makes this so much faster him while he's down that's right we can get right into it right by by the way there is a

[ __ ] ton of things going on at GDC so please keep an eye out for things that are coming for that I think that's going to be really a great event I'm hoping actually that we'll see a lot more activity there's some people think that that the last great GDC was last year but I'm hoping that we'll see a lot more activity at GDC with new [ __ ] going [Music] on game devs we know that great gameplay is what players love but integrating metagame features like challenges progression Rewards is crucial for retention and monetization however coding them is a tedious and timeconsuming process that's why top Studios have turned to hero hero provides a complete Suite of battl tested metagame features that are quick to implement letting you spend more time on the core gameplay experience ready to ship fully featured engaging games check out hero today by clicking the link below attention app and game developer are you ready to unlock the secrets

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uh headlines Dragon Age team is no more so this is actually relatively sad I mean these guys have been hanging on for dear life for over a decade it seems but I think after this disastrous launch of Dragon Age in which they basically said the customer just wasn't all that interested in what they were doing it looks like they kind of like cut half the team and moved most of the other people over to Mass Effect so Mass Effect is basically the last ditch effort to save BioWare as a development team it seems anyway so Mass Effect has been in development hopefully they don't try to reinvent the wheel and just do what makes Mass Effect great because I think that's still a good entry for the industry I don't know Adam actually do you agree with that or not do you think the story-based shooter RPG thing is still viable yeah in this day and age of course of course like when it comes to open world narrative games like Mass Effect or Starfield or Fallout right like I just

see shooting versus action as like okay what's your core which audience are we going to aim for but ultimately people just want really high agency really interesting worlds to explore and narrative branches to go after right I agree no doubt so let's hope the Mass Effect game is great this too like they shrunk quite a bit like there was a big hit on layoffs and then they also shrunk quite a bit of moving people around EA so I think my big question here is like how much real BioWare do you need is left in the studio to go after Mass Effect and if they're shrinking down this much how long will it take for them to go after Mass Effect because I think like the one mistake they made with Dragon Age Veil guard was originally it was meant to be a live service it took them a long time to Pivot back to where they got to and I don't think Veil guard hit their marks whatsoever right no no like so that whole diversion into live service for Dragon Age just really hurt the franchise with Mass Effect hopefully they can go to a much more focused production and figure this thing out but

I think for this game they've got to avoid going to a massive open world like remember Mass Effect one like literally running around empty planets they've got to figure out how to go a really nice focused product that really has high narrative agency that's the only way out of this to make this viable I am hopeful all right Multiverse has shut down this time for good according to the headline so it shut down once before and re relaunched now it's shutting down for good another life service kind of bites the dust but I mean it had its moment in the sun right it it the launch was pretty impressive but it just could not keep an audience I'll I'll pour it over to my co-host of the game Economist cast who also works at s dinner Eric Guan who wrote I think in a great piece called the many mistakes of multiverses just like taking this game to Absolute town and it'll be interesting to see how you relate this I think really to Riot's live service fighter which I don't know one of these days we'll we'll learn more but he points out that like 2v2 Fighters are not as popular if you look at most tournaments it's 1 V1 there's way too much going on screen when it's 2v2 so

it's becomes a game that's hard to really Master he also does a really great job I think of going after the myth that platform Fighters are accessible you know with platform Fighters you can go in multi- directions versus a 2d fighter which you're only going back and forth I yes you can kind of do some jumping and this is also the one of the few game genres where you can kill yourself and if you've ever played Super Smash Brothers you can walk off the map not only that when you're when you're talking about any sort of fighter it's a lot of actions per minute and I think the last thing he he talks about which I really agree with with is that games in this genre are made by Masters who have like refined their craft over many many decades I mean you look at Super Smash Brothers that guy's been cranking for decades and even when you look at some of the long running Fighters like Tekken or Street Fighter these are masters of The Craft and I'm not sure WB Games had that going into a project like this I worked on Mortal Kombat as you can tell from my background I also fought to get multivers green lit in the first place right so like I I put my neck out there when we were talking with this studio and put together a business case and when it came to like WB strategy at the

time we were looking for ways of what's the right first step into freeo play and my answer was like I don't think you go after massive Shooters I think you can go after lower sized markets like the fighting space where we actually have leverage with our IP that was the initial assumption obviously I was incorrect but like I'm just saying that was the original thought so the points that go by with this like 2v2 Fighters Mortal Kombat Street Fighter those tournaments that is a very niche market and basically say like hey 1 V one is the cap on fighting it basically says that fighting will always be that size versus the thought with 2v2 is to say like hey like mobas like Shooters instead of it always being me against the other person and I will die I will lose if I mess up is you have a squad you have a team now all of a sudden lower skill players paired up with higher skill players can still win in those environments 2v2 I think would say like that's not enough of a move and I

think the camera problem is a solvable problem it's not like it's not like you have to have a camera zoom out and see everything on screen in a smash R environment and I guess from my perspective like more directions than 2D and having lots of actions per minute like when we're talking about the PVP space being high Mastery High skill spaces like we're saying that mobas are dead because you can die in them that you need a lot of actions in a MOA so mobas are dead like these are high Skool games yeah you're going to be able to kill yourself yeah you're going to be able to do stupid things I I think you're making a couple arguments in contradiction so I think one thing to start with I'd be interested is how did you think about PlayStation Allstars when you're putting together multi versus thesis what do you you take it was a warning case obviously it was a warning case for anytime that you're talking about a new game strategy and going after a market there's going to be examples of success and there's going to

be examples of failure and the more failures that stack up that doesn't necessarily mean like okay we can never go after this market like tons of people went after coin Master obviously Monopoly go is a success right that you just have to be able to learn from that pile and say like hey this is what we think they continually got wrong versus here's the master in the genre and this is what they keep getting right like one dead body in a room doesn't mean that you don't go after it no I think that's totally fair so then what do you see as the multiverses thesis then on one hand mobas have all these actions as we were talking about which does make them inaccessible which gives a high barrier entry which is why it's been you know a very defined genre racing is another example that's been a very defined genre fighting Falls right into that category being a very defined genre just as you mentioned but you're still saying like as a defined low cap genre but like you look at the top of twitch you look at the top of steam like these are [ __ ] massive player bases mhm right like I'm not talking about racing but I am talking about mobile I am talking about Shooters I am talking about like T

Shooters which are no don't really reach a really high Tam and keep in mind from my perspective the the vision for this was never to say this thing is going to surpass those games but it can be a niche that we operate in own same thing is with Mortal Kombat where Mortal Kombat is not a mass Market game but it is a niche and that Niche continues to be successful do we know anything about braa Halla I feel like that's a game that's kind of been like that get shuffled to the background what is it Ubisoft it is a platform fighter it's been around for a long time it's had a mobile skew it's like never really blown up but it feels like it's one of the few platform live service Fighters we can point to as successful right exactly it's just very small scale Eric is is already in mice nuts mode yeah yeah I mean we we're getting more and more niche as we go here let's let's move on let's move on so Midnight Society shuts down doctor disrespects web 3 you know circle jerk

basically extraction shooter too don't forget about that yeah oh yeah yeah another extraction shooter there Mr Adam why am I getting blamed with extraction Shooters I don't know you're like why am I not I'm not surprised that this thing is getting shut down on the more positive news our friends at Laton Ventures have raised $50 million to invest in the global gaming Market they raised it from 35 to 50 million they LED their big investment has obviously been in dream which did a 30 million series a recently and we're going to talk about what's going on a dream a little bit later in the podcast they also uh have a second company that's done uh a round as well they've made five Investments so far three of the companies are founders in Turkey very happy for their success you know I do still think that early stage mobile investing is still a viable thing even though most of the bigger funds have kind of abandoned mobile and they're now chasing AI Goram works his

[ __ ] ass off you know creating I think value for his investors the only person that's really suffering in this equation is likely his lovely wife but keep cranking Goram pretty impressive what you've accomplished so far so the next thing is dream games you know which obviously is related to this they are seeking $2.5 billion dollar in debt and Equity to dou double their valuation h so basically they say this funding is to buy out existing investors and to set the valuation at5 billion Goldman Sachs is leading this round to secure I think it's 1.25 billion from private lenders and another 1.25 billion from investors exchange for ownership of the company and somehow the five co-founders will will retain 70% of the company after this round with the rest going to a new Equity partner so there's a little bit of

uh obscuring what's actually happening here but like I don't know I'm just going to speculate here not sure I actually agree with this move and I've talked about this before setting valuations so high is dangerous right so I think kind of this is the perfect time to actually sell the company and cash out or just keep the company private and independent and raise shareholder value by continuing to crush it because creating like A5 billion do private mobile game company doesn't necessarily seem very wise in this current market because it basically creates a company that's much harder to sell at that level and going public as a publicly traded like mobile game company with like two games I think that creates kind of a maybe a tougher spot for the company longer term or maybe they just want to keep it as a cash cow kind of like you know some of the other bigger companies I don't know but it doesn't make sense from a liquidity perspective in my view anyway however it is early days for Royal Kingdom and so far it is growing

the company early numbers seem to show that it is all incremental growth it is not canalizing Royal match as other companies have done in the past but we need to keep an eye on this relatively early but we'll keep looking at it but again the theme this year I think is intellectual honesty so you know Goldman Sachs you know has an incentive to do these type of deals because they basically make money and fees based upon the the dollars that they raise which is not necessarily the best interest for the company or its shareholders or its Founders for that matter so my assumption here is they can't possibly need the cash I mean they're [ __ ] minting money right now which actually seems to be indicated by what they're saying is the stated use of the funds but I'm happy to discuss this with anyone how this deal makes sense for the company besides getting a huge valuation on paper but I think the $5 billion do valuation kind of limits their longer term opportunities and options for acquisition I don't think that again the public markets are are interested in in

mobile game companies but that's kind of my view i' be Lov to hear anybody else that thinks this is a good idea but nonetheless regardless of that dream is still killing it shedding in all kinds of cash like they're killing it so I think one of the things that you pointed out is that there hasn't been cannibalization and when we look at downloads and we both look at category rankings over the Long Haul and over the short hall for Royal match and the early returns for Royal Kingdom like your spoton you know I'm actually shocked that we haven't seen more differences in these Trends and I'd be curious to understand how they're thinking about UA it's actually something I asked the two and a half gamer guys and I'd love to hear Gem's point of view on as well is like when you have a user come through the funnel you want to allgate them to their highest valued use and so how do you integrate that into a strategy that has two games you know do you really separate the teams do you try to do something more unified because you know even if there isn't cannibalization on the charts you know it could be the case that you could be sending a user to Royal Kingdom where they would have had

a higher LTV in Royal match like this is I would argue a lot of the theory of portfolio transferring and having ads in other games is trying to connect them to their highest valued game but the fact there hasn't been any calization is like just pretty amazing right I mean to to put another game in their portfolio that could generate you know an excess of a billion dollars I mean one of the things we talk about with terms of Royal match is that it didn't start off as like a juggernaut right it took a long time for them to cement their rankings on the app stores and ultimately pump a bunch of UA to always hang around the top 10 and we'll see if they do that for Royal Kingdom like it's been a slow start but the fact there's no cannibalization I think is really encouraging for them the other thing that I was confused by Eric is that they hold 70% of the equity after this race what what the [ __ ] you know is this one of like the best founding team heists of all time to own 70% of a company at a 5 billion valuation yeah I mean that is insane and that's part of the reason I bet they did half debt right that could be serviced by the cash flows right so to keep that

Equity as high as possible for the founders yeah I just I don't know what else they have left to achieve I know that's why selling it out makes sense if I were them I would have just sold like at this type of valuation like it makes total sense there are companies out there that are interested in these kind of cash flows and this kind of Revenue it's like I don't think it would have been hard to find a buyer at this level but getting a buyer above the five billion Mark with any type type of like premium like 7 to 10 billion like I think that's a tough sell out there but you know bird in the hand type thing so I mean that's just kind of my assessment of it and historically we've seen that happen before with like the machine Zone guys and like others that that kind of waited too long and anyway I mean they're still killing it and you know and maybe they treat it more like a piggy bank you know like they just basically take all the 70% of the cash flows of this business dude that's all the money you can possibly need right you don't need more than that right so

like I don't know at this level like it's really about the personalities of the people at top in terms of what they want to do so I'm sure I'll get some feedback from some of the investors we'll see all right moving on there is been one of the biggest or I think it is the biggest acquisition in at least Roblox developer history vadex who we've been covering I think for the past couple months they've been rolling up a bunch of Roblox experiences I think they had a sports one a football one they recently bought they've been kind of like buying out top categories and they made their biggest acquisition yet which is Brook Haven it's the most visited game on roblock it B about 120 million 120 million monthly ma in Brook Haven alone we don't know the acquisition price so it'll be interesting to to to speculate on that but it looks like there is a market for Roblox m&a developers Eric what do you make of this well actually actually what's crazy is I been talking to some

guys at Vex for like years now that's one of my kind of Channel checks for mobile I mean for for Roblox generally speaking and and yeah their strategy historically has been kind of like a consolidator of Roblox Studios smaller Studios and their goal basically is to bring them into the fold and help them kind of give them key learnings on monetization live Ops Etc you know building their empire and so when with like these UNS at like kids that are developing games need that kind of support type thing but this one I don't know much about the game but it seems like this is like a Pure ma buy right like maybe for an advertising push or maybe they think they can actually improve monetization and and monetize their audiences better than they could unclear but that's basically what they showed in that slide right is that based on like an ARP Dow basis they're saying that right now the arpd Brook Haven is very very low on a

percentile basis right and they can bring it up to more what their averages are and go from 18 to 36 and that's net from platform fees from roblocks that sounds so unexciting Adam that mono 18 to 36 million really wow knock my socks off like that that's just bad I mean I I wouldn't say it's bad I mean if you're a rollup company I think it's fine but I I mean this feels like an exemp case of the limitations of Roblox well that's basically it right like this is the top game on Roblox you look at the CCU right you're looking at 650k CCU in this game like that's bigger than Counter Strike is playing this game right and it's that's the Run rate net fees yep that is it less than a penny on now I I I worked into the math 120 140 Mau you know you think maybe 500,000 or 50,000 a day 360,000 a month

that's that's about a penny which to Matthew Ball's Credit in his deck he did show that in terms of the per user Revenue numbers yeah you got you mean this slide this slide right here wow just like w that was that was amazing nice do do what I can I I think to your point Adam I think this demonstrates potentially that Roblox is value destructive so I I published a piece earlier this week where I think Ball's biggest Miss on the growth drivers is the idea that younger cohorts who are entering gaming are entering at much stronger engagement shares so when you look at the amount of time people are spending when they're let's say 5 to 12 on games generation over generation it's way up right I think that's an intuitive thing we all agree on and so if you think those Trends are going to maintain that means we're going to stack increasingly engaged users over time that are interested in gaming and are Global ma will increase like that would

be a good long run Trend but if they stick to the Roblox platform and they don't grow out of it or their spending habits don't change despite the engagement staying constant then Roblox looks like an extremely value destructive proposition on gaming like much worse than game pass because no one used game pass but everyone would use Roblox yeah so you're just saying like all of these players as they age out if they prefer to go to Roblox instead of buying games on Steam they're going to be value distracted for the game environment which to be honest like I'm even thinking of the flip side here like if I was some of these developers right like 18 to 36 million run rate of this thing I would just go build a game on Steam and get significantly fewer users but I could get 18 to 36 million annual run rate off of a little Roblox game like liars bar or content warning type of game on Steam it's just a far fewer players but there's a business there I just want to say one thing about this deal the fact that they didn't announce the actual value of the deal always

gives me [ __ ] Paws right like like like it generally means it's overvalued or no value one of the two right it's like it's always a red flag for me it does leave some doubts in my mind about what's actually going on here but whatever that was their choice the second thing is like I can't believe I'm doing this but I'm gonna do this I'm gonna argue the opposite point and defend Roblox right because let's see it look at the end of the day my thinking of Roblox changed like last September a little little bit with some kind of information about what's actually happening internally with the company where and I've mentioned in the podcast before but maybe not as much as I have with my own clients that actually pay me money but like the new leadership with Manuel as Like Chief product officer he's become like more like kind of the acting operating CEO and Dave the kind of the Visionary guy is kind of taking a back seat from a chairman role I mean this is the kind of understanding that I have this is not actually probably 100% accurate but in all for all intensive purposes what seems to be happening is

that they're actually trying to monetize the audiences better than they have in the past right so they introduced advertising obviously huge huge change in Philosophy for them to add advertising to the platform right that was a big one the ugc limits or whatever the [ __ ] they call that thing where people can actually sell low quantity items that was a huge kind of change web three web three sorry go ahead and then the purchase bonuses you know doing transactions off platform Etc so among other things like they're basically trying to find the low hanging fruit to improve that monetization number that you're talking about right like to get out of that low monetization and you can actually see it in the data since then is that like they are monetizing the tier one English countries better like recently right and so anyway I got incrementally a little bit more positive last September on this point and it seems like there is some more potential to monetize that audience

having said that they are still growing the real Eric yeah they're becoming more profitable but not profitable if that makes sense right so they're still not profitable with like stock-based comp and as they improve like monetization on their tier one countries and to put things in perspective with Roblox in general is that they are still trading at the level of their IPO price from 2021 right like it's has been a [ __ ] roller coaster right and they're basically 50% lower than where they were at their Peak during the Heyday of the metaverse from Mr Matthew ball right but in the short term it does look like they have the momentum going in terms of improving some of these metrics and the quarter looks like it's going to be solid and it looks like like going forward they're going to be in in decent shape to maintain this these levels of growth the same concerns I have about expanding the demo and all this other stuff still exist but you know right now the momentum is in on their side I would say all right okay next story Battlefield is

back EA did this I would say really strange kind of announcement on Battlefield like providing like 10 seconds of gameplay or something like that and then asking the customer to join their Battlefield Labs as emissaries for the [ __ ] game or something like that and then they put it behind this [ __ ] wall where it takes like an hour to get in to log in or to register to be perhaps a part of this so it's seems completely contrived and ridiculous in my view because there's like an over like an hour and a half wait in order just to sign up that was like a cloud flare thing right like so many people were trying to log into the website at the same time that they actually have to queue up that's crap okay that's [ __ ] crap because first of all there's not that much demand second of all like I think it was completely created [ __ ] right it's no no no it's origin origin Tech back end you don't know you don't know yet rest in peace yeah that's right yeah origin yeah okay anyway they are introducing a new brand called

battlefield Studios representing the four Studios that work on the series so this was their big coming out moment right dice EA motive Criterion and ripple effect look I think Battlefield is an amazing franchise I've been a huge fan for a long long time but I'm really actually torn on this product like this is these are one of the products that kind of confuses me because because Battlefield is beloved there is a customer out there that absolutely loves Battlefield and I almost 100% certain the quality is going to be really really high this time around because they learn from the [ __ ] disaster that was 2042 right where they launched this game and it was [ __ ] broken like absolutely broken they spent years years fixing it and now the game is actually quite good so they know what success looks like in this space I would say I guess but the question for me really is did the customer even want a battlefield anymore like are they actually looking for something new in Shooters it seems to be

no sadly but I could be wrong on this one because at the end of the day like the type of shooters that people play they seem to be satisfied right tactical like you have Counter Strike and Rainbow Six military realistic you have Call of Duty which is just an insane Juggernaut right hero Shooters Team Fortress OverWatch sort of and now the Marvel game right like the Marvel game is killing killing it out there battle Ro fortnite war zone apex not So Much Anymore pubg and then obviously for sci-fi you have Destiny and Halo well not anymore with Halo because Microsoft just [ __ ] destroyed that thing so I don't know is there room for Battlefield in this equation again it feels like the switching cost particularly from Call of Duty is much too high right and Call of Duty does what Battlefield does better in some ways like the open world war zone type of experience but I you know I think they have a tough road ahead but I they're prepared with a really high quality product the question is whether

or not the customer even gives a [ __ ] anymore but what do you think Adam you're the expert so you're saying that based on those Lanes what they should have done is aim for the Sci-Fi Lane yeah destroy Destiny yeah yeah there you go actually you know that that's actually really funny that you I didn't even think about that that's actually probably the most open Lane out of them allall right because Destiny's kind of a [ __ ] show and and Halo has just been destroyed it just depends on like how big of a size that is like I think they are very much going into that military realistic Lane right which they've been able to operate alongside Call of Duty for a long time and I guess like if you ask me this in October and November of this year I would fully agree with you what's making me scratch to the back of my head here is like what made room for Marvel Rivals to succeed because we all we're saying the same thing right it's like hero Shooters completely locked up

all this stuff completely locked up you can't enter whatsoever and then there was room for Marvel Rivals and actually idg I'll give them credit they did a good report on where players came from for Marvel Rivals and it was mostly dormant hero Shooters I think most people have this like tendency to assume that as soon as a competitive game will come out that active players of another franchise will just like plummet and you'll see it day one and actually doesn't really happen like that yes I think OverWatch has had a hit from Marvel Rivals but at the same time you're seeing that there's this huge audience of dormant shooter fans that are hungry for a new service and they jumped into Marvel Rivals and at least like from the way that I've been seeing like cod Apex valerant OverWatch are all down year-over year yeah and to my own Squad of me playing Shooters with friends we're hungry for a new game because we didn't really attach to the Marvel Rivals by Fall we'll see you know GTA 6 which will have PVP modes in it and cod will be there can Battlefield

fit in that window like I'm I'm going to squit and say like it's not out of the picture here given where Apex valerant OverWatch are right now so unless if those things continue on their decline I think there is room all right let me crack my Knuckles here about the all the wrong isms that have been mentioned as a former dice employee so I guess first Eric I'll I'll take you to town on 2042 being broken at launch and now being fixed that is every single dice game since Battlefield 3 have been launched in a [ __ ] State awful [ __ ] State rushed out the door Tech problems whatever it may be whatever whatever dice problems there are scramble to fix it fix it six months later always been the dice story that is that is literally every single game point to one since Battlefield 3 that hasn't had that story it's the same story over and over again I think the losses have deepened the distrust in the franchise I think it's also deepen distrust in Stockholm and for people who aren't familiar like dice is what built the Swedish games industry

I think there was a report that something like you know 30 to 40% of the Swedish games industry is within like 10 square blocks of where dice is here in Stockholm so there's so much lineage and history and so much talent that dice is helped to raise it's always number one on the employers or the the most desired list for new graduates and it's not been on a good trajectory last 20 years I mean we've been talking about soderland who used to be the CEO of dice remember they got acquir by EA he becomes the chief creative officer at EA remember he's getting paid more than Andrew Wilson he had that crazy package deal he kind of [ __ ] up BioWare a little bit if you're referencing story earlier remember he was trying to get that jump right in Anthem that super Iron Man Jump he was obsessed with that he had his own floor in in the dice building but he took a bunch of people with him to Embark Studios he emptied out half the studio and so that was one of the big Talent losses the second one was that ttk which has announced a game within last year who I've worked with and I love to Pieces also emptied out I would

say the last half of the senior leadership so on one hand you have a bunch of talent leaving the studio that's been around forever I think the second thing is that you guys are also discounting how popular Battlefield is right now like if you go look at even Battlefield 1 or you look at Battlefield 5 we're still talking about 30 to 40,000 steam PSU that's pretty significant for games that aren't getting new content and like Call of Duty the battlefield prom has always been that people are interested in these different theaters of war and how do we actually align them together because the game's audience is crusty Germans and if you look at a lot of the other games that have had Optics I think in battlefields relative weakness it's games like hell let loose it's games like Squad it's a lot of the military large scale Shooters on Steam this audience has always been around and I think occasionally we've been able to dip into more of the mainstream if you remember there was only one year that Battlefield beat Call of Duty this is good trivia do you guys know what year that was which Call of Duty that was Battlefield one that's correct that right Adam Adam you

I'm going to send you some Swedish croner that was when Call of Duty it was it was Battlefield one the trailer did really well and then if you remember Call of Duty was the weakest this year they had Advanced Warfare which did not do very well I think it's one of the I was in sales I could see these numbers I know [ __ ] I guess I guess that is true so so anyways this is this is all really sad it's really sad the you know Stockholm has basically lost leadership over this project it's all over to Vince Vince has got to got to bring this franchise around all these Studios which have tried to run away from Battlefield have been brought back in like Criterion has tried to run away from it it's like nope you're a battlefield studio if you remember dice La that's actually what Ripple Studios was they were trying to do their own thing I was involved in that for a little bit they ripped back to this I don't really know if Vince gives a [ __ ] about battlefields I don't understand what Vince's motivations are anymore Eric I don't understand how to think about Vince as a person like he got paid out from respawn it doesn't look like he's an active leader I don't get what he cares about anymore I would say just the last thing as as I ramble

on this I think the other thing to point out is that Battlefield has always had a much lower headcount than Call of Duty you know we're talking about what 3,000 6,000 developers on crazy numbers on Call of Duty Battlefield has never had the level of Studio support that Call of Duty has had and to be fair it's never made as much revenue but I think that's also one of the reasons why it doesn't quite measure up to those expectations people place on it is it's never had the Firepower on headcount that Call of Duty has had go Vince or go home I think they're going to get the quality here right I totally agree with Eric that they've learned from 2042 they're pulling together the resources and I think Vince being there also really rallies the troops gets a Clear Vision across also helps manage up towards EA having someone like Vince there to give the reputation boost because otherwise you end up in like a bware situation where the publisher doesn't trust you they start pulling in people from different directions and then you've got a very unoc product so like I'm going to guess this is what's

happening but I think Vince there helps but what I'm really taking from your points there Philip is that you are on all of these games and you're the reason yeah exactly there's a common threat around this it's like Everything You Touch turn [ __ ] dude that's what the common threat is I've learned something new together I got an expensive Battlefield skew approved 2042 remember that $100 120 skew yeah I'm trying trying my best it's it's tough man a lot of scars on this one my last take on this and again I would love feedback from those that are closer to this is that my understanding is that with Vince and Byron beid from Call of Duty they have pulled together the four different Studios and they are working extremely well together to create an equality experience like this has been expressed to me by numerous people I'm hoping for the best here but I think the challenges that they faced over the years is because of sodin and and The Brain Drain that you're talking about and don't forget that sodin was not innocent in what happened to dice as

a studio right he had an absolutely terrible reputation as Studio head when he left EA right disruptions in the development process focusing on pet projects like [ __ ] Mirror's Edge which is like a focus like a focus game hey whoa whoa leave mir's Edge out of this I have my cop I think I have my copy of Mirror's Edge behind stop stop they you know Force feeding the fbite engine to every studio in the organization like I mean he wasn't a saint right but you're right he did take a gajillion people away from that so anyway I think they've rebuilt it and they have the teams to create quality product again I still come down to whether or not the customer is really all that going to be that interested and I hoping they will so one last piece I'd like to see someone write about which is the story of Battlefield portal which I think was the solution to a lot of Battlefield problems that didn't pan out if you remember this is their ugc element that released in 2042 where you could play with multiple theaters in war and it came out it was an in piece of technology it's still around you can still download it but it never really

took off and I guess I'm curious on people doing analysis on why they think that failed well number one they spent all the time building that instead of getting the game right at launch no no that was shift off to Ripple that was this was a ripple Ripple limb Stockholm wasn't doing this Stockholm didn't make I put on my skeptical eyes like things like that can distract developers was this part of the metaverse fever dream ugc type thing no I think this was a deck response to a thesis that one of the prior GMS at dice had been propagating for a long time which is the same thing that happens at Call of Duty why the [ __ ] are we building the same store over and over again every time we've released this why are we building the same four CL why are we building all the same things over and over again why can't we just have one stable piece of tech and then layer on new content on top of that which is kind of what Call of Duty executed on this year right they have a unified engine it seems like they have unified UI it's the same code base I think that was always the dream I think portal was one way to get it there and it just didn't pan out

but something that remember the web browser remember uprise there's Halo also did that too right like Halo forge yeah neither of them [Music] Pinedo 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 fer where 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 next AI let's do it let's do it oh my God I I I wrote a I wrote a piece this week man it's been rare I've been able to share a piece I wrote this week I wrote a piece this week called Ai and gaming has flopped and what I argue in the piece is that we have been at the subsidization stage of AI for gaming I mean we basically have kept Nidia live for as long as it has been by Gamers basically just buying video cards and creating demand for 3D graphics and a lot of what AI unlocked is because we've subsidized this company for decades after decades and yet we haven't been able I would argue to be on the frontier of this technology I would argue that

the basic implementation of AI and gaming right now at least from a front end consumer perspective is chat Bots chat Bots and press releases from cosmic Lounge on match three levels that we still haven't seen get delivered yet and it gets even worse when you think about like how much AI progress has been made and yet hasn't been made in gaming and then you compare that to web 3 like web 3 seems to have made more progress in gaming than AI has and when you think about gaming historically and when you talk to VCS specifically about web 3 one of the things that VC's will instantly tell you is that gaming is the first and best use case and helps Drive Mass customer adoption they love to tell you that fact and yet we haven't seen that be the case in AI which I think is also very troubling we used to be at the frontier a lot of these Technologies who we didn't see that in web 3 though that we were the first mass adop from the mass adoption from gaming uh I will leave that to the VCS in the comment sections to debate with you about I think maybe yes and no I mean when you look at like the total value of tokens

how much of that is gaming tokens when you look at wallets from immutable versus wallets from other third part I don't know I think you could make the case that gaming actually has driven a lot of web 3 adoption I just made this argument like a few days ago I agree that gaming makes sense as a web3 tool for web 3 adoption but that didn't create Mass market adoption right it did corre accelerate adoption but it's not creating some kind of mass Market thing unless you're talking about the population of the Philippines and and East Asia yeah then cor we could talk about Mass ad option we've done things on I would argue the supply side too in terms of physics haptic feedback we've also taken wrong directions but we've been at the Forefront right we're at the Forefront of cloud I would argue with a lot of the early streaming attempts and I'm not talking about stadia I'm talking about on live remember on live you know rest in peace but we at the we're at the Forefront of that Innovation we think about motion controls you know before the iPhone had gyroscope we were we were [ __ ] with motion controls for a long time going back to the SNES subscriptions you know we're pretty early on in terms of consumer

subscriptions so even though we've been involved in fail bets we've at least been on the frontier and I think when you look at like the cosmic Lounge case I think that shows where there's a lot of limits in AI at least from the supply side which is that even if you make more levels and you make more content that content is still part of an experience and experience is driven by a designer and so we basically have moved the problems in the supply chain down the funnel so now we have a bunch of match three levels but you need to hire more designers and you need to lay them out intelligently like you need to create an experience I think AI will eventually get to that point but again it it hasn't happened you know we still are not at the Forefront of this technology and I'm surprised we haven't seen it more on the supply side or we haven't seen it more on the consumer frontf facing side too and I guess my message to game industry would be like let's get out there and ship fast and make sure that we're embarrassed by our first prototype but it has to be more than just like AI chat Bots if we're going to be at the Forefront of AI and I'm just I'm dis pointed we haven't seen we haven't seen that be the case yet so you're saying

like the what is it love girl the weird 4X thing that you chat with a an AI That's not a messy prototype I think what that is is very similar to what Eric Seaford had mentioned when he went over user acquisition AI milestones and he goes through different Milestones of how AI will be integrated and AI basically moving up the supply chain I think that top girl game you mentioned is a part of his Milestone framework but I don't consider that a unique gaming implementation I consider that a marker you know user acquisition strategy with AI which is where the innovation has been to this point has been ji and ads yep and to your one point of web 3 making more progress in 26 months versus AI what data points are you looking at in gaming in gaming I'm just it's just a claim around we have so much Capital that's been floating around in web 3 they seem to be making more public shipments more noise more activity more product in consumer hands than I've seen from Ai and gaming they raised in a froy market they've got a ton of that Capital

locked in they're locked into web3 so they've got to be vocal they've got to be trying to do something and AI has been exploding during a not so frothy Market is that what's driving P of that like I'm trying to get a sense of like what that 26 month really looks like I think that's totally fair Adam I I think that if we thought AI was going to drive all this growth I would expect the graph we're looking at right now which is from Convoy Ventures I would expect there to be an acceleration in gaming DC right and right now we're looking at nominal amounts for you know 2024 it's it's at some of its lowest amounts ever when it comes to venture capital raised for gaming does this include B2B gaming or is it all just gaming consumer service they do in the Convoy report they do talk about platforms I can ask Jason over there if it is include in this specific chart I I would bet for now it is included since they mention it later in the report do cuz like the one thing I'm thinking is what's pulling it down is obviously the status of the market

the other thing is I think AI right now is mostly impacting B2B right like platforms and engines and tools I agree I completely agree so I would want to make sure that that's covered in this and then I'm because from my perspective like if we're talking about the last 26 months AI has made significantly more developments in the last 26 months versus web 3 companies but that's from my perspective Ive like I'd love to look at data to to suggest one way or the other but like there's that funnel right of okay so at the beginning you just have concept art right like little things you can write documents better you can do concept art then you've got marketing assets Call of Duty keyart with four fingers or five fingers whatever it was then you have marketing assets right that are player facing that are driving up like that is Absolut absolutely happening now and then you're getting into the actual art production and then you're getting into true AI

first games and yes as you go down that funnel that percentage goes down pretty quickly right but those are the different use cases and that's how companies are going to be slowly moving between this funnel and the speed at which AI growth has been happening is pretty astronomical so maybe we're just not seeing it in these metrics but at least from where I'm standing like anecdotally from like keeping my ear to the ground and talking with other companies that are doing this like a lot of the stuff is happening under the hood of game companies where have we seen this from a consumer facing or supply side perspective that we can point to because I I get people are going into chat GDP and pasting you know code to have it being corrected but where's the supply side or consumer like you know we were talking this why am I not seeing Apex Legends double characters or double Cosmetics where are the games doing that that are seeing these massive supply side increases like we were talking about this generative voices it's not doing that yet it's not at the consumer facing side I'm saying in the funnel steps before it's growing pretty quickly that you will eventually see that but

you're not going to see that yet but this is my disappointment though is that we used to be at the Forefront of this stuff now we're just being dragged Along by everyone else we're at the receiving end not now we're not at the front lines advancing this like we love to pride ourselves at being where art meets science and yet this is the best we can do is like key art and text Bots chat Bots like another Nintendo with AI in it like I would love to see game designers go ham on this like where are the game designer sitting down and be like how can I make a whole game around this and I know there are people that are taking like let's for instance say like you know being a GM and in Dungeons and Dragons but I mean like where are the real art meet science use cases of AI and games this is what's disappointed me the most is we used to be at the Forefront of this [ __ ] we're not anymore and don't be wrong AI is going to do all the things that you mentioned Adam I agree it's going to work its way through the funnel but we're not special when it comes to Ai and we used to be special and supposedly we're going to be setting up some kind of debate at GDC about this so we we hopefully have a chance to discuss it all right we're going to hold this

down to less than an hour until next week hopefully we'll have Jen back to manage this nonsense have a good week guys 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 slack and apply to join Jo the games industry best professional Community filled 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 [Music]