TWIG #318 Supercell’s Records, Unity’s Chaos & AppLovin’s Fire Sale

hello everyone and welcome to deconstructor of funds this week in games number 318 where we give you all of our game industry Insider takes on what news is going on each week I am Jen donaho back Chris nice job moderating I'm very I'm very proud of you so I feel the marketing and Publishing role on this lovely podcast and today we have Phil black monetizations are aircraft screaming at the clouds and at Matthew ball mishki katkov um the founder whisper over here that's awesome here's what we got going on today Battle of the game industry reports it was a very low-key PlayStation state of play so not much to cover there but we'll give you the news leadership changes at Minecraft Studio Phil's going to give us The Insider take because you know they are in Sweden we have a super sized episode on Supercell has a new letter and oh my

God this is going to be the entire episode so lot to go there Unity loses some more people while App 11 gains stock value and they're selling off their game division so we're going to play who's buying app loven's game studios that'll be pretty fun and then OverWatch OverWatch has a lot of new news is it OverWatch 3 or is it new modes Phil has a lot of takes on that game devs here at heroic cabs we know that great gameplay is what players love but integrating metagame features like challenges progression and rewards is crucial for retention and monetization but coding them is a tedious and timeconsuming process that's why top Studios have turned to hero from heroic clabs 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 at heroic labs.com

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that is sensor.com [Music] all right let's just get right to Shilling first I just want to say I had my semiannual USC guest Yoda lecture with Ed Z's class thanks to Ed and Coleman for always having me UCLA is up next chis the San Jose team is is looking for you so let's continue our University y I mean I can't believe they want us to talk to them but fine next up for me was the LA Club was last week a huge success special thanks to adictive for hosting and Grace yo honorary deconstructor of fund La event Zar so she was amazing like all of the big company UA folks were there so a lot of great takes I will tell you offline of all of the news because I promised them all was off the Record are there any photos no there are photos um Grace took photos I'll think Grace for sure but if anyone else wants to sponsor a supper club in LA

happy to do that now that I have a tag team partner and I know crushy would love to do that in San Francisco so M you would just love to attend well actually I don't mind attending not at all right organizing everyone needs a Grace is all I have to say she she did all of the heavy lifting I did a little like help in trying to pull people in and who we should have it was a very UA focused event and so next one I would love to open it up outside of like that specific specific discipline but mishko what do we have going on with the blog and everything else yeah so I mean we got a super sized Shilling portion because you guys didn't shill at all last week so let's shill the the blog stuff we had uh Dylan tradr wrote how drama and fake ads convert to real profits an interesting post got already wuga people commenting on it we got the week before was how some puzzle games are more addicting than others this is kind of going through different core game designs of puzzles this was written by Amic Khan

who's been writing a lot of puzzle articles on the podcast side we got a bunch of stuff so we had the ultra positive gaming market report with sensor Tower I recorded that one and um everything that I kind of thought was negative he always found a positive take he's like the market didn't really decline 4% it's actually growing and so forth so I thought that was great finally something you know positive takes no it was irrit it was it was irritating it just irritating okay chis is like positivity either the way the Market's up like double digits in the west I I can't believe that this is not being more well covered like this is absolutely massive for our Publishers now it's being driven by big games but it is literally up double digits like there's there's opportunity here in the west even though with Europe falling apart so so I'm here in Spain Europe is not falling apart the sun is shining the suria is Flowing so everything is is fine but but yeah so positive market report and and he broke it really nicely like sometimes he was t like Japan and

China is kind of drawing everybody down but anyway listen to it episode 269 we also had a podcast with Wilfred obing Wilfred is the CTO and co-founder of audiom mob so this was one of the episodes that we recorded during my visit to Abu Dhabi for Google move event there's going to be a couple other episodes from that visit that we recorded onsite there's gaming companies over there and it was kind of interesting to talk to them Wilford is talking about how to scale their $100 million startup so that was their valuation at the last raise and what he chose specifically Abu Dhabi over Silicon Valley but there's other different topics that he covers in that podcast so give it a listen but Jen GDC events we have a a long list oh boy so this year is going to be even bigger than last year so first of all just subscribe to the newsletter go to deconstructor fund.com all of the links will be in there we'll also try to post them in the slack channel in the events Channel but just so you know many of the events have limited availability we will try to get as many people in as we can can but you know it is what it is all

right Sunday the pregame with beta hat we are over 300 people that have requested to attend just show up and you know you may or may not get a drink badge or free drinks but you know come join us on that Monday is a sensor Tower deconstructor fund VIP dinner Tuesday is the GDC executive branch for Studios with Convoy and heroic Labs I think that's more for the tech nerds which is awesome I love you all so do that one Wednesday product brunch this is a new one so this was just came in right now so we are hosting another brunch at the same time so we just like last time we did one marketing product brunch and then we did Tech brunch so this time around I found new partners to support the product brunch and this is going to be a lot about liveops so you might see Philip black over at that brunch we have all kinds of interesting Studios coming in talking about liveops but mainly for product people so come and brunch and

talk to other product people in business cool so Wednesday night is a supper club sponsored by newu Tik Tok app sler and Griffin could you get any more sponsors for that w at the W it's an expensive space so and we had a lot of people wanting to sponsor that so we ended up taking a lot that's awesome Thursday I am super excited about this one it's a live twig GC I got to work on my branding for this twig GDC twig DC so at GDC nights at 700 p.m. come in person and watch us do a live recording of what we thought happened at GDC so you just need a badge and the GDC nights pass for that and a couple other things in the works that we'll talk about next time all right Cris we have gone on too long it is time for you to make your laundry this is a new segment I just love this like you get [ __ ] on for what you say and then you come back and just do a recap of each week's episode I love it I'm

definitely working with incomplete information so I did get some updates on what we were talking about last week for particularly about dream okay the feedback here is that it is indeed the founders did not want to sell like that that is like the evidently what what's happening out there right so of course the Venture capitalists are [ __ ] dying for liquidity right because they made all these stupid [ __ ] Investments for the last five years so they really wanted to get out so actually Goldman did the right thing for once in their goddamn lives okay so this is not a tone for all of Goldman's sins right because they are actually responsible for some of the worst Acquisitions in the video game business including Zinga glue and Activision but dream back to dream basically through this Equity raise they wanted to create liquidity for their venture capitalist and they also wanted to maintain ownership for the existing leadership team and so this actually kind of makes everyone happy to some degree right so they maintain 70% % control at the

ownership level they sell some of the Insiders or the employees get to sell shares in the secondaries investors get their money back and then these debt holders get some cash flow from the cash flows of the business right so interest from the cash flows so I think it's a win-win win-win right capitalism at its finest I would say I do think this still sets them up poorly for an exit going forward but evidently that is not their objective from the founder perspective I don't think doing these type of big deals really help with long-term liquidity right A5 billion valuation I mean none of these it's going to be really really hard to sell a mobile game company for that kind of value no matter how P strong it is because there's just no buyers anymore right but if that but that's not their goal it's like play rcks right they're going to use it as a piggy bank right like just cash flow cash flow cash flow pay me out pay me out that's all the money you need and then they maintain ownership and get have some something to do right yeah it's just a different way of looking at it from a Founder perspective yeah Chris really nailed it by by using play as an example because that has become a sort of a gold standard for Founders it's

like keep it private don't have any you know [ __ ] on the board do what you love to do have a strong meaning for yourself like run this company and get tons of dividends like these people are billionaires already without having to sell this company and like my hypothesis as quote unquote founder Whisperer is is it really takes a certain type of a person to create a billion dollar company and for that person to sell that billion doll company and to do what like now that person is Rich they're not the type of people to just [ __ ] off they need to be building they need to be doing something so having talked to bunch of successful founders of course there's plenty of those who are very happy having sold their companies but there's equal amount of Founders who are not that happy having sold their very successful companies and they're kind of looking for the next thing and all of them are saying the play rcks did it right just keep it to yourself keep running it keep taking dividends do your own thing you know don't sell yeah how much money do you need D you know do you be a couple hundred million billion I

mean come on it's [ __ ] yeah exactly how much life changes from 10 to 20 the next thing is the battlefield thing so the general consensus from people that are really kind of smart about this stuff is that there is a subset of shooter fans that are really interested in what Battlefield offers like open world you know like large scale battles objective based combat type games right so there is a huge solid audience of that both Lucas Maddox was someone that was kind of waxing poetic about this stuff but but I think he kind of misunderstood what I'm saying you know these hot takes on Tik Tok are dangerous right because not only do you lose the context from the from the podcast but you actually lose context but putting it in such a small am there even more context that is lost right what I was trying to say is that this how many ways can you actually cut the baby or whatever that expression is right there's so many different types of shooters that it's taking audiences away from different Shooters that's what was kind of my point about that right when you segment something to death like just makes it so that it's just harder to

attract the large enough audience to actually create a great business that was kind of my whole point about whether or not people want a shooter like Battlefield right now with so many different competitors and so many different niches all right that was the what was I was trying to say anyway but what he did say was that there is a big segment of the audience that likes these type of games that if they have a good one which is like the big question but I think they should make a really high quality one there should be some performance for it the only push back I would give them is Delta Force which which basically copied [ __ ] Battlefield one for one in terms of features and things but they only have like 100,000 people on on Steam it's like I don't know that's not good enough right for something like battlefield but I came away a little bit more incrementally more bullish after the feedback I got from it so I will remain skeptical though until the quality is confirmed because that has been EA's you know Achilles heel is actually building something creating something and launching something of high quality so we'll see okay all right so we're GNA get into our first topic on the market

Crest which is you and go over this report yeah I want to just give a shout out to ree Elliott who who used to work at newu he was there for a long time I think he joined media research and they basically created a market summary very similar to what Matthew bald is but the difference is is that Reese has been doing this for a while and he kind of knows the market and can connect the dots a little bit better but kind of came coming to the same similar conclusions the market is very mature there's oversaturation of live Services the global number of gamers are growing but the revenue per user is actually coming down because of quality of users that we're getting in third world countries the mega budget strategy will slow down and then also that multi-game subscription user growth is reaching its maturity as well so anyway these guys did a good job of of consolidating you know a great report on the industry and then also they're working on forecasting the industry as well which I got a copy of their model and it looks pretty good and they're still working on that so media research Mr ree Elliott who's a

little grouchy I'll be honest when I say grouchy someone's grouchy they they're [ __ ] grouchy but other than that smart guy and media but m d i a right it's kind of like yeah yes media yeah I that didn't help with the spelling all right so the next thing just to touch on really quick was PlayStation had the state of play this week it was a bit focused on their smaller games so Assassin's Creed just a couple big takeaways were Borderlands has a new trailer in a release date which is in September and then metal gear solid has I'm not a fan of the franchise I've never it's not been my thing but Snake Eater so apparently this is a big thing that's also coming out in August and then for me a little retro was Shinobi being done by the Streets of Rage for Dev so it really just brings back the warm fuzzies from back in the day all right so I wanted your feedback

especially you know the sweds over there so Microsoft just made an announcement and it was really interesting that variety broke the story I maybe it's not surprising because it's Microsoft and there's a Minecraft movie coming so Microsoft's gaming Ken Walters has been promoted to head the company Stockholm based Minecraft Maker moyang Studios as the current chief Assa Bren exits so here's the part that I thought was really interesting and I wanted to discuss and this has nothing to do with the fact that you know she's a woman which you normally I'm like I want to promote that so Walters is currently the vice president and the head of franchise development and she's going to add Studio lead to her title so now she has two jobs she's going to be based in Seattle and Redmond and then travel between Redmond and Stockholm frequently and before becoming the head of franchise at Microsoft Walters LED brand entertainment at Minecraft and then was at lucasfilm for 13 years where she Rose

to vice president of franchise marketing and integrated planning so a non-ev a non-ed with two jobs a major movie coming out how is this good for the studio it seems like this is a lot for any human being I don't know it feels like we're setting her up for failure sweds feedback I mean that's a very Eric take I felt like this was the rant when what they hired the Call of Duty Esports GM or something oh that's aett rant well no that was a fair I mean that which one was Johanna no it's Johanna who's now the president of Blizzard yeah it's ridiculous yeah still under at least this woman has a good experience that knows what the [ __ ] she's doing managing Brands like like big Brands like that so I mean she's not a [ __ ] Coca-Cola executive like running [ __ ] three yeah I mean what the [ __ ] I mean like yeah I mean those those people drive me insane but

at least this girl's got some credibility it's sad not to have them in Sweden I think that's sad for the country I think just after having this you know basically having Battlefield ripped from Dice this is not good news bears like once you get off the two a day F schedule and you know the the Internationals are making up more than 50% of the studio like these are distinctly Swedish products like I will I will say that having lived here I think mir's Edge is actually probably the most distinctly Swedish product I've ever played but I think Battlefield Battlefront and Minecraft definitely are too why you look confused Eric why is that weird to you I have no idea why you would say that they're uniquely Swedish in terms of product the majority of people that play that game are are us or particularly that spend on the gameer in the US I mean that's certainly true but H&M is a Swedish company and a lot of people there's a lot of Revenue that comes from globally that what is that what does that change you can still be something distinctly Swedish in export I mean ABBA is Listen by million of people that's still a distinctly Swedish band

okay I I don't know you're not comp like you can sell you can export you can export a culture Eric it's dude from the 7s dude why is that the only reference that you can come from pop culture from Sweden is Aba D many you're AR going that makes no sense it is a US product basically and it just happens to be developed in Sweden right I don't think that's true at all I don't think that's I'm half joking this seems like Microsoft is trying get control from yes from redwin for for their [ __ ] Empire right and so they're putting people in charge of redwin they're going to be managing remotely and I kind of agree with you that kind of sucks for them as as a remote Studio to lose their independence but this is like the powers that be at Microsoft trying to maintain some type of Illusion of control because you can't control the sweds right as you know Mr Black because you married one right no so AB she's Canadian no she's Canadian oh that's right

close close enough the cats are as close as I come the challenge that's going to come from here is probably people working at Minecraft Sweden will be complaining a lot because it is a very much a work life type of a culture Phil knows and when you have to do calls with a us especially West Coast that means very very late and you're intruding on the Swedish free time and that will cause a lot of grift and that will cause issues and of course I believe that this lady will be traveling a lot and those flights are brutal I don't think there's a direct flight from Seattle to Stockholm I think you need to hop over to somewhere so it's G to be pretty tiresome can I make another like really really unpopular hot take for this is that perhaps perhaps stop perhaps they are looking at Epic and they are looking at ROBLOX and saying you know what exactly are you guys doing with this absolutely massive franchise Minecraft why isn't it monetizing better why aren't we doing more metaverse type [ __ ] right like maybe

maybe it is time for a change maybe the sweds have just kind of lost their Edge you remember Minecraft the location the Pokemon Go version of Minecraft I mean they've tried various different things like it's not like that though ugc I'm with Crest that I do think that there is a missed opportunity with ugc but I'm not sure you know this is the right kind of profile to blow that out you know I think she's trying to do trans Media stuff which PR is your favorite topic no yeah that that was actually my let's talk about the Minecraft movie Let's well that's that's and she I I I believe that's under her her purview and the idea now is you just put in Jason Mamoa to anything it's like he's like the old school Jack Black you just put him into anything and they they magic I don't know but anyway all right so that was just my like musings on I guess next watch out guys I'm going to be running a studio next thing you know let the mark rule at all yeah in

Romania all right Mishka I'm going to hand it over to you for your extra long supersized supercell segment go well this is not mine this is this is extra long my letter from from the uh from the CEO but yeah so in short supercell had a record year and I think everybody is happy because of that I mean supercell is probably the most beloved company in gaming I would say on par with Nintendo so this is from their annual blog post and and personally I think it's a gold standard for industry PR so the headline is of course is that supercell broke all the records so 2024 I'm going to quote was the best year for supercell ever among other things our live games hit 300 million monthly active players worldwide for the first time since 2014 all the games grew in Revenue compared to the previous year also we had record year in terms of gross revenue so pretty amazing hit all the records and all the numbers so in terms of the numbers Revenue €2.8 billion e which means 77%

growth year-over-year iida grew 78% year-over-year to 876 million EUR which is probably close to a billion and this is super impressive because the market has been struggling as a whole and especially if you look at their last year's shareholder letter blog post ik was talking about how supercell struggled to grow its live games and itus actually supercell to drop from being the first Global mobile game publisher in 2016 and falling outside the top 10 in 2023 and that was kind of like a big wakeup call so now they're back back in the in the top charts and just killing it so what drove the growth is they increased the liveop team sizes they made huge investments into marketing that kind of takes away the story which was in previous that 70% of their players are coming from organic sources so no more flexing of that that and I found this a

really the Brilliance of the pr because it's in a way an apple level like they're they're communicating like look we grew by increasing the team size being able to produce more content and by working with Brands and marketing more and of course everybody in the game industry knows this is how it goes like you invest into marketing you invest into teams you create more content that people like and that's how you grow your games but when supercell says it it's almost like apple says like we in put in like camera into a phone and now it's a camera phone it's like Samsung's like what are you talking about we've been doing that for years like and and so this is the same kind of a communication well on are we going to actually talk about these numbers I don't know Eric I'm trying to get you weighing in I mean they have to report to the Finnish government though they have to at least report high level metrics so we know what their revenue in iida is and their eida looked a lot more sobering than their revenue so costs are way up which I assume is part of the expansion and I would also assume is brawl star marketing which we don't know a lot about except from what you just

mentioned Mishka yeah the marketing cost are way up should I be less impressed by this Eric well you know I actually the brawl Stars actually looks really bad more now that I look at it from the perspective of like they just spent a [ __ ] ton of money marketing this game to push downloads which helped them in the short term but the revenue is starting to Trail off now and that's brawl Stars which was like the most successful which creates actually a really tough comp potentially for next next year right do you want to say the line is brawl star profitable do you want to no I was really trying to bait you into it I think I think brawl star is very profitable don't get be wrong but the fact is that they are basically finding new religion in terms of spending I mean they spending like doubled in the last two years so it's like that is a lot of [ __ ] money to be spending for them and I think a lot of The Upside is from what these charts look like because this

again the revenue is starting to decline pretty precipitously after they stopped spending don't forget that the squad Busters launch budget is in this so it's not all brawl Stars no yeah and so that's the next thing I I just was trying to isolate brawl stars because everyone keeps talking about how successful that game was in terms of like unlocking liveops but I'm sure that was a lot part of it but also was a lot of money being spent on UA that's kind I I think it's a combination you know they did the liveops changes they probably change their monetization everyone moves the battle passes from multiple months to one month you know shortening that cycle I think Phil that's that's a u ISM and then clearly on the marketing side supercell is known for a brand and they have slowly been shifting over time to up the UA reduce the brand except for the squad Busters launch which is a whole other topic and you're starting to see you know a little bit more of the scopely Monopoly go Playbook you also are seeing the collaboration playbook in

our slack it was really funny it's like mik what is it Michael Bolton and the Barbarian in Clash Royale are they're doing a collaboration which again the collaborations golf clap chef's kiss are just brilliant from you know the SpongeBobs to the baby sharks to the Michael Bolton like the humor you know it's very on brand for them so anyway all right and so moving on to Squad Busters right clearly that title is not profitable right like absolutely the amount of amount of dollars that were spent to Market this thing for just to Peter out to basically nothing well did you did what did you think about the clues that were given in the piece where they had ano who's the game lead directly answer a question from ilka that this has been asked many times with inside of supercell why did it launch why did it launch why did it launch and it was very similar to what we suspected they had a lot of really positive metrics from their over 120,000 player closed betas their Partners at Apple and Google were

very excited about the game and of course we know why that's important because it suggests that you're going to secure featuring which is something that we covered in Squad Busters one year later it been five years since they launched brawl star they wanted to get [ __ ] moving they wanted to take a shot on goal like this is a lot of what we wrote they didn't want to be a company that got so SED up with success that they don't risk failure that was a recurring theme from the letter yeah I I think it was it was brilliant How It Was Written in the blog post they kind of like they covered all these reasons why why they launched and there was a quote from ANA who was used to be the chief game design officer or something like that I think he's now a game lead but the quote was self-launching the game globally and taking more time with it perhaps would have given us indication of the true audience and what they want or perhaps not we will never know and I'm looking at this graph I'm like are you kidding me like no we know we know can we just say that hey we should have probably cooked it a little more like there's no point in in doing this company PR and it was it was interesting

to kind of see this and I understand because I was drinking the same Kool-Aid of of launching this game like I remember we did the podcast with Phil like they had this long dry season of not launching since 2018 and they had so much success with brawl stars with just investing into updates and into brand and into liveops that they're like [ __ ] it let's go let's storm the beach biggest launch ever this can't go wrong and I was this kind of reminded me of Kim Nordstrom book up down up where he talked about hubris that companies have and his quote is the first clue that compan has peaked and of course superc hasn't Peak often comes with Hubers there's a level of arrogance that comes with success a feeling that you are invincible and then you can achieve anything you want and I kind of felt the same way like I was I was thinking that they can't do anything like look at brawlstar 6 years old and just crushing it there's no way Squad Busters can can't miss and and you know apparently it can all right can we just

like leave the poor game alone you know I'm kind of done yeah I've been convinced by you Mishka over the years about like really starting to read this as a PR piece and I was extremely disappointed in this year's letter it felt defensive to talk about the future I mean it's all been about the next chapter but 80% of the letter is about brawl Stars gloating and defending Squad Busters mistakes which first of all they're entitled to do all that again they don't notice anything but you know you're a company that's about to IPO and the only other thing that I think they really talked about in this letter is spark they're like team psychologist process which I've been hearing some hilarious things about what's oh it's oh it's boot camp is it is boot camp It's Hard Knocks for game development I guess is one way to put it yeah the the spark stuff is actually really fascinating so it makes this remark in the blog post kind of saying like yeah launching games as difficult as we've seen other companies struggle

kind of like you know balancing it off and and yes we know that and then he kind of doubles down on how important it is for a company to develop new games unlike some other companies that just acquire games kind of like a little bit of a year yeah yeah it's got a little little Zuck RZ you know it coached by the same people it was it was a nice jab towards other companies for acquiring other Studios and and and growing them and so then he goes and talking about this spark model and then and he talks about the word star start up but this is not a startup so essentially the reason why they have a spark louds you have to read between the lines he says there's a quote Squad Busters development started in early 2020 based on a cancel project that started even earlier than that so the reason why they're having spark is because they're really slow at developing new games it takes them years and years in order to get first signals from the market so so they break down they're like okay let's fix how we make new games we've separated them from live games that was a major success we have different team running live games different on is making new games okay how do we make it faster let's bring in

people into an incubator program that's what spark is and I'm going to quote Ila he says we use this time spark program to evaluate the teams and if we feel that the team is as good as the best teams in supercell we Greenlight the team not the game so to me as Phil said this sounds like a really brutal recruitment process for folks coming in to build new games because reality is you kind of leave your job for example you join spark Labs you travel to Helsinki and you start making games and there's like there's these prototypes everything is coming everything should be fluent yes there's a psychologist to help you overcome the stress you're getting this brutal feedback from everybody but at the end of the of this experience just like in pop stars and whatever talent show what might happen is they would say hey Phil you're not good enough so here's your T-shirt here's a plush toy and good luck sir and and that's it and this is life it's it's

a rough School the spark Labs it it sounds fun but it could be probably pretty Soul crushing like I said this is compy that's about to IPL they need to have their head in the game and focus on like the actual things that should be delivering results which I would have loved to hear more about supercell engine where are you supposed to be huge Advantage North America you know is there is there a heartbeat out there what's going on like I don't know Eric Jen have you have you met someone from the studio like PC games what what's going on where is North America Investments has anyone heard anything about the Investments that used to be a big thing we we had the news now that space a became supercell London and both of the founders have left yes and I new Studios I'm hearing your Chrome Valley Customs getting spin off in their studio so they're kicking off all the games like the beat Stars so the music games goes with the next beat and as you said the puzzle games are

getting spun off so I'm kind of like interested of yeah what does Super London do so essentially it's a co-development studio for Helsinki right because like they they have been already working on Boom Beach they're working on Heyday as an external po so it's like if you don't want to move to the cold North you can work out of London yeah this is the only thing I wish we heard more about is things like you know what is the culture like like this was supposed to be the huge thing is that it's a super cell and that now you're scaling he hasn't once to my knowledge talked about what the strategy is to maintain what it means to be supercell in the face of scaling like that's the talk I want to hear like I know he gave a talk earlier in the year ilco where he mentioned that the company had been effectively split into two live teams and then incubation teams or smaller teams they aren't the first Studio to do that like I mean that was something I heard at scopely a lot you know it's not the first time I've heard this model okay is this the model you're you're doing okay what does it still mean to be supercell in this model I mean again they don't owe us anything but I wish got a little bit more this year than whatever this was I don't know what this

was I think the last part to that that I find interesting I I just wanted to hear what's your opinion on it like there's a couple of times that Ila kind of brings forward the brand of a World's least powerful CEO and it's a it's a very humble thing to say it's a great read and it's a great way for him to move the spotlight away from him like look he he runs a company that makes gazillion dollars like it's one of the most best companies ever and he's like it's not me it's the team here I get that on the other hand it creates this illusion that he has no input because many times he's like well you know I have no idea why we're grew I had no idea what we do but then there's like other posts where like we as a management team got together and we decided to focus on Clash franchises and took away the resources from brawl stars and then they grew because they had no pressure so of course he makes a lot of decision of course he manages this company and does it extremely well but I'm I'm just curious like how do you read this notion of world's least

powerful CEO like that typ brand normal CEOs never even talk about themselves so that's weird to begin with right does Andrew Wilson or Strauss get up there and be like let me talk about me and how I fit into this no he's selling a culture he's selling a culture though that's not uncommon for those type of CEOs that talk like this okay but the my problem with this whole narrative is that like look metrics are metrics right he knows the metrics everyone knows the metric they saw what the beta looked like they knew what they were heading into this is not rocket science right it just wasn't ready the game wasn't ready and they have like perfect information right there's no like yeah he wants them to have independent and and creative Authority Etc on the game but metrics are metrics it should have they should have waited but I don't know all right yeah and the marketing costs not mentioned in the blog post but they were in the finished newspaper that was that was interesting by the way a super random thing to wrap this up about zelnick so my wife and I were at a comedy show sorry just complet changing

the subject yes's go I at a comedy show and this guy gets up there's this Jewish guy and he was hilarious I thought he was actually a little anti-semitic in some ways I was a little offended by some of the things he said and his last name is zelnick and I just didn't think about it but he kept railing on his dad and how like he was a rich kid and he's like [ __ ] hates it and his dad was never you know like just really being [ __ ] mean about his dad right and then he spent like 20 minutes like roasting this private Equity guy in the front right I mean he was just ripping this guy to shreds because if you didn't know zelic was in private Equity before so you could feel the bital hate and like the animosity towards his father like reflected in this like [ __ ] rant against this guy this poor Indian dude was just sitting there victimized right you sit in the front row of a comedy show [ __ ] off right you're gonna get it right anyway so after with the show I looked it up and it's [ __ ] it's zel's son right it's crazy right and I'm like holy [ __ ] this is actually [ __ ] zelic son that's up there doing comedy and the guy is actually relatively famous I never heard of him and I knew a lot of

comics so anyway that was just a buy and buy All Right Moving On Moving On yes 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 Max maximize profitability through their customize secure payment architecture and dedicated support team exola powering game developers to achieve Global success 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 flyer 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 datadriven insights that reveal exactly where your users come from and how they'll interact with your app apps sler where your app's potential reachs performance Unity un well like if any quote that I've ever had in this podcast over the last six years is accurate is the quote in which we lost our favorite iron Source sponsors is the unity acquisition of iron source is two drunks holding each other up right and this is exactly what is unfolding before us time and time and time and again and when you think that there's like Hope on the horizon it is completely shattered right by what the [ __ ] is going on at this goddamn company you know what I'm saying like again Unity is reports another round of layoffs you know they lost tons of jobs last year and now they're actually doing a whole little layoff this time right the team behind visual

tool Behavior has basically been cut with all their designers and artists they're consolidating the technical teams around the engine which is a big deal across the company and I think the most thing that that's scary is [ __ ] because the only thing that can help you save this company is their advertising product is they consolidating advertising products finally between level play tap Joy Unity ads and iron Source all that stuff is trying to be Consolidated so this is the the thing that really scares the [ __ ] out of me is that what about iron Source like iron Source was like the brain child of this company despite the fact that they canel us because of something I said in the podcast which is ridiculous for the just again just to be clear that that's my take it looks like naav Asen or whatever I don't know his last name he's out so so basically all the founders of iron sworts are gone I don't even know who's left managing this [ __ ] company in Tel Aviv right but the scariest thing and the thing that actually gave me some hope that there was something to hang on to for this company is that Jim Payne

the guy who built uh Max for applovin the guy who's a Chief Architect of vub back in the day this guy was like Drop shipped in last August to help rebuild their tools and technology for adtech he is no longer VP a product right he's just an advisor if you look on his LinkedIn profile it's not even on there right like Unity is not even on there so this is [ __ ] scary right so bronberg evidently could not keep this guy happy right now I thought this guy was the one that was going to fix their [ __ ] but evidently their data is [ __ ] terrible I imagine bromberg's like just couldn't deal with this guy right and so he probably said [ __ ] this I mean the guy is [ __ ] loaded right why in the [ __ ] would you take on a job like this to begin with but he did right but bronberg literally has lost him but they're not talking about it and the fact that they're not talking about it makes it even scarier in my view right that should be the first thing is that he's moving on to an advisor role and they

have new leadership that's taking control of this Tech and if they do not get this thing fixed this company is [ __ ] doomed just doomed it's over right and so this is what scares me the most about this whole thing is that they cannot catch a break right and meanwhile app Loven is absolutely [ __ ] annihilating them and they are taking the ball and they are running with it right it is almost game over for these guys right and so I'm hoping like down the line we actually see what the plan is for this thing right because right now there is no plan like if they're talking about I mean stuff he should have been doing right when he took over the company last year but now like it's crazy it's crazy they're Bas you it's almost like they're starting over right and that is not a good place to be so that's kind of my take okay just stop or Misha's not gonna be invited to that next winky Unity event that he posts all over Linkin yeah I was just having a call yesterday about traveling to Tel for Unity I guess I'm I'm guess the invite is

out Dear Unity the thoughts expressed by CR are his alone unless I publicly state that I agree with him so but so you mentioned unity and so actually I wanted to to touch on that because I think yesterday they just or the last couple days they just announced earnings so they crushed it again applo and share soared 30% higher in extended trading on Wednesday we recording on Thursday they topped analyst estimates for Q4 earnings and issued a better than expected current quarter Outlook Apple shares have jumped 177% since the start of the year as of Wednesday's closed and soared more than 700% over the last 12 months amid the surging demand for the company's AI powered advertising system it is crushing it so more importantly I thought this was also interesting and I wanted to get your take is you know front of the Pod Neil long for mobile gamer. Biz by the way please subscribe to him that guy justes does God's work

in getting us all the news so app loving is selling off its portfolio of 10 game studios for 900 million as it ships to become a Pure adte firm this means machine Zone people fund magic Tavern line Studios belela Athena clip wire Levy Zen lifee and zero gravity are all about to have an unannounced new owner they signed a $900 million deal to divest its entire games business which includ includes half a billion in cash and the rest in equity he expects the deal to close coming quarter it's time to play guess who bought it all right my vote probably sculley I'm gonna go sculle scop is a good guess that's a good guess Adam teler is not on the Pod so this is okay for us to guess because it has to be somebody with a lot of money it has to be somebody who's okay with China because a lot of these studios are in China or in Cyprus so you know Savvy couldn't care less

savy and savvy are different Ian well same well the fundamental problem is like what Equity are they giving right they don't have any Equity yeah okay fair oh that's true that's true okay and and by the way when I last heard about this portfolio to be on sale this was at Gamescom not the last but the previous one the price was 2.4 billion I remember this clearly at a at an event so so somebody's getting a hefty discount how how valuations in the mobile market have changed to 900 I I remember it and I was like hm who would buy that and they were're talking about the studios it was a a banker and met anyways by the way is this if this is Electronic Arts I will literally oh no it can't be there's no way that's a that's a bad expression I will blow my brains out if this [ __ ] EA buys this thing like they are that stupid to buy these assets then they have screws loose all over the place they can't even deal with what they have

yeah yeah exactly they they they are [ __ ] it up so bad I think actually take two Zinga makes some sense here you know like how about stillfront why not 2K yeah Z still FR doesn't have a piss to pot a pot CR poor Crescent like needs some coffee this morning so tired today you have no idea embracer embracer CU he doesn't care his no plka no plka plka that makes sense that makes some sense PL Phil Phil what do you what do you think I mean did they have to be like is it a bundle deal can like you take a couple no no you got to take the there is you know there is a um a group out there run by Nicola from the glue he did he did a few smacks he did a phone right you remember he did a phone like a yeah I that team actually could could get aggressive this makes sense but I don't

think they have this kind of cash though could it be private Equity could it be like no no no okay I don't think I don't think 500 million in cash is yeah that's a lot the equity piece SE kind of like eliminates a lot of potentials what what do you do with this Eric all right so you buy a bunch of Studios now what what's what's the game plan you got to manage all the heads of each of the studios there I mean there's seven or eight here yeah I'm sorry to all the people that work at these companies like they are going to just cut yeah everything right and just to the the bare bones of the cash flows of these the business the games that are good and get rid of the rest right so so you install your management you cut things down to the bone yeah yeah you remove overhead remove yeah it's going to be cut cut cut what if Unity buys them no it's unnecessary yeah well it's not what yeah they it sounds like they're trying to focus on ads well I guess that's or do they care about the

engine and if they are imploding the ad group to your point above Mr Crest is it the engine that they care but the engine doesn't make any money the engine business is a shitty business just full stop I don't care what people say it's not a profitable business is [ __ ] garbage right it's never been profitable it it may be meagerly profitable now I I doubt it really their only hope for growth is is on the attec side So Okay the reason Apple 11's getting rid of this they've been talking about this for a while and they they devest over time is that the profitability on this game [ __ ] is terrible right like their adtech is like [ __ ] minting money you know and so it's actually really good for the stock I mean part I mean that's part of the reason probably the stock is up because their barges are going to improve dramatically without this business dragging them down you know all right everyone that wraps it for today see you all next week sign up to the newsletter L bye 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 five years or more of games industry experience go to deconstructor of fund.com SLS slack and apply to join dur the games industry best professional Community filled with peers always willing to lend a hand or subscribe to our newsletter to get get all the latest insights from the deconstructor of fun content creators thanks for listening