TWIG #339 Merge Games, Gen Z Spending Patterns, and the Shift inside Studio Cultures

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Hey, welcome to this weekend games 339. I'm Jen Dano. I fill the marketing and publishing role on the lovely podcast. Today we have
airrestress strategy investing getting in here before Philip takes my spot.
It's kind of like F1. There's like racing lines like you got to you got to establish Mhm.
Uh, fell black monizations are
Mitch Katkov, friend of the founders. Let's Let's move on. Jen is in a hurry.
We got a lot. We You guys put in a lot. This is awesome. In fact, I didn't even get to do the whole summary, but here's a few things. Mishka has another

Supercell rant, and he's begging Supercells to stop the PR so that he can stop talking about them. Please make it stop because Finland's going to kick you out. I just I can't.
They've already kicked him out. He's already kicked out. He's
done. When are you ready in Finland?
All right. Okay. Xbox Game Pass profitability. Apple EU tears revisited. Oh my god, that's the most confus. I think I need a PhD. That's the most most confusing stuff of all time. Gen Z cuts back on game spending. Merge 2 is on fire. There's new news in Forex. Chris has some thoughts about what's going on there. But first, I want to talk about the heat wave that is happening in Europe. Why is it the one time I come over, it's record temperatures in Barcelona, I think I melted, you know, on my tour of Oldtown. What the hell is going on over there? Mishka,
Phil doesn't know because he's freezing his ass in the north.
Yeah, it's it's pretty hot here in Spain.
Barcelona vacation. Yeah, my wife and I

took a little time off.
You did the whole Vicki Christina thing. Yeah, we food, you know, old buildings.
Yeah, Barcelona is really hot at this time. So, if you are in a South European city, you are melting. Like where I'm at, it's a beach town, so it's doesn't matter.
Nope.
You've abandoned your
North Europe people.
It's miserable and cold.
Dude, first of all, Kov, dude, have you ever heard of sunscreen? Dude, you look bright red right now. Throw some sunscreen on that bald head of yours, dude. It's crazy. We class Swedish, too.
All right.
You should see my fit. They have these clips on Instagram. There's like a one day in somewhere, one week in somewhere, one month. I'm at the one month point. I had to change my clothes. I look like a drug dealer when I'm wearing my normal. If I'll be here for 3 months, I'll have probably one of those neck tattoos going on. Like, I need to get out of here soon. This place is dealing. Speaking of drug dealing, did you slip a Xanax into

Crest's coffee last week? When I listened to the pod,
he was the most chill I think I've ever heard. Crest, did you just like turn over this leaf of like I'm not going to yell in the podcast? What happened last week?
I'm pulling it all back, man. I'm pulling it all back.
All right. It was like, you know, chill crass. I never Something I never thought I would hear on the podcast. Good job, though. I don't have anything to yell at you guys about. Well done, Vishka. You want to yell about something though? Well, not
I don't want to yell about. I just want to chill a little bit then maybe later in the podcast to pick about few of the topics. We had Felicia Co from Play Adventures. She wrote about a cliff that saves a very interesting article. Go and check it out on the blog or on the newsletter. And then I had an interview with former head of Blizzard. They were working on World of Warcraft out of Boston, Seth Civac. He was also the founder of Proletariat. That was a studio that was acquired by Blizzard. Phil has some thoughts about that one, but that's going to be later in the

episode. And then for the events, shilling the two parties that we have going on on the 19th, heroic party with heroic labs. That's going to be super massive, fun, and great. Links in the newsletter. And then on the 20th, we're doing third year in a row our whiskey and water tasting event. So the link for that one is coming next week. But those who have signed up to our previous events will get the invite earlier.
All right. So, this is for Gamescom in August.
And it's going to be really, really hot at Gamescom in August, I bet.
Yeah. Still debating if I'm going or not. Crest, have you decided? Are you
still possible?
Okay.
I I was looking at hotels. The prices are absolutely insane. And then I had this one hotel. I was like, this is pretty cheap. It had bunk beds. So, Phil, what did it say to you?
Do you know those little lower than last year.
Like I just want those little beers again that they serve you. They're so cute. They're so cute.
The little glass.

The whole thing
with your pork knuckles. Yeah. Got it.
So, we've been talking a lot about Xbox or like what what for like many months we could call the fall of Microsoft's Xbox Division saga. And there was an interesting post by Christopher Ding. And if you remember, he's the one who launched a podcast recently and he had been at Game Industry Biz beforehand. The podcast was really great. We had talked about it beforehand. I think he's had stellar interviews. Like his one with Tim Sweeney in particular was stellar. He was able to basically stealthily ask, I would say, very insightful questions without Tim kind of like, you know, raising to Defcon 5. And I think this next piece of information he's reporting on was really interesting, which is that he thinks that Game Pass has a positive P&L. And he's now including based on additional information he's got from sources, this idea that there is a an effect on first party sales because of it being on Game Pass, there might be lower first party sales. So even when you account for

those lost first party sales, Game Pass is still profitable. And I think that people are taking so many of the wrong takeaways from this because that's not how platform economics work. You don't have these divisional P&Ls and oh [ __ ] yes, we're going there. There's a difference between accounting profit and economic profit. And so you also need to include things like the MTX discount that you might get being on these services. You remember Origin offered something like this. Like those are things that are also lost revenue. And not only that, there's also these free licensing rights which don't always show up on P&Ls. So now Call of Duty can be in Game Pass, which they might not have agreed to if it wasn't a first party studio at this point. And so there's a lot of that that's going on that may not land on a particular P&L. And so you really need to look at like the division over time. And that's where these things do not look good, which is that platform TAM has shrunk. Like that is the most indisputable fact that people need to get their heads around is that Microsoft is selling less hardware and that means less monthly active users and that means they're going to get squeezed in the supply chain which completely changes

their position in the gaming market. And if you can't wrap your head around that, I don't think you can understand where Microsoft is right now. And I think that this tweet kind of confuses that and changes the focus from where it should be.
I'm going to keep this really simple, right? You take revenue and you take costs and they're not profitable, right? Like that's why they're doing all these cuts. They're trying to get more profitable and Activision helped them get more profitable because they were a profitable enterprise beforehand. So now you're taking King's profitability and you're adding it right to them. Yep.
But they are less profitable. Activision as a company is less profitable under Microsoft as they were by themselves clearly, right? Because now Call of Duty is not selling as well. They're just eating away the profits from the Xbox losses from the stupid game pass. So, I don't even know. I'm sure he's getting pressure from the powers that be to like start restating what he said before, but the fact of the matter is that this is a

unprofitable venture and they should just stop [ __ ] Game Pass, right? And I don't know why people there's no reason to mince words about this. It's just [ __ ] to me.
Yeah, it sounds like he had internal people saying, "No, no, no. According to my P&L, it's profitable. It's like, well, it's P&L Voodoo that's going on right now.
Yeah. Seriously, like this is why I had this other thing that this Arcane Studio guys came out. His name is Raphael Colantonio, right? He said that it sharply criticized XG Game Pass. It describes as unsubstantiated unsustainable model. It's been damaging the industry for a decade. He argues that Microsoft substantial financial backing masks the true cost and that the service pre pressures developers into deals that they may undermine other business models and that Game Pass could either dominate the market to the detriment of other models or eventually collapse leading to further studio closures which is happening right now. Right? It's like why is this being argued like why are we

closing studios is because they're trying to save [ __ ] money. This model sucks balls. Okay, just stop it. It's just hugely bad for the industry. The PR [ __ ] that Microsoft says, you can't believe anything they say.
So, there you are. There's my crest back this week.
There you go. 10 minutes in and you're yelling.
So, I made a huge mistake last week. I was being a little bit lazy, but partly because it just came out. But the changes that Apple are making in response to the DMA are a little bit different than I thought. Right. Basically in essence to keep it as simple as possible they are basically reducing the fee from the 27% that they said before to basically 20%. Right? When you include all the different things that are added up right this does not change at all the 30% that they are going to get from from just using app store specifically right so the changes they are making are only to people that are going off the app store. I do think this is a concession from an Apple perspective in terms of getting to the 20% for offstore payments. Having said

that, that is not at all going to impact, you know, the traditional transactions.
So, yeah, I had a question about this because I was listening last week and I've been reading all of this and man, this is like super confusing. Let me just review. Tier one is a basic app store features for a cheaper 5% commission on inapp purchases. And then tier two is a default tier that everyone gets put into. You have full access to the app store features and it's a 13% commission. And then on top of that was this a new fee called the core technology commission which is 5% commission on outside purchases made in apps distributed on the app store. And then in January of 2026 the core tech commission stays and the core tech fee goes away. the 50 cent or 50 euro cent.
So, we're also looking at an image that just had tier one and tier two kind of

side by side. So, you could see what's included and not included. And by the way, if you're on tier one, I can't imagine anyone would actually do this because you don't get featuring, you're not in the search, you don't have app insights, there are no auto updates. It's like, who on earth would even choose to do that? Can you explain, Chris? So, where'd you get the 20%? Like, I'm It Did you look into it and see that this is I think you just said it only for the apps that allow for outside payments. Is that how you
No one's going to do tier one, so it's not even worth talking about. So,
okay.
The way I read it is that the exter external purchase link is a 2% initial acquisition fee. Store services is 13% for the tier 2 and 5% core tech, which equals 20%. So, you're in tier 2 and then that is the fee that you get. Like, if you do the inapp payments, it's still 30% and then if you decide to allow for web shops,

that's where you get hit with the 20%.
Correct.
All right. Go Apple.
Yeah, they're going to challenge it for sure. And and I I think ultimately they're going to capitulate and get to 20% like
on everything
on everything. But they're not even there yet. But that's my guess. And then Exola and Appch charge and others are going to be in much much tougher cell I think.
Well, if anyone signs up for tier one, please let us know. I'm dying to know anyone who does that. All right, so Mishka, your rant on Supercell. I feel like it's a time warp. And every week I come back, I hear you talking about Supercell.
This week in games, we cover news. and and you know I really don't want to cover Supercell that much because kind of everything has been said about it but they keep coming in the news and I keep being seduced to cover it. So in the latest one they had Charmmy Kim she was from Space Ape I think she was leading the music game correct

Star Nashville Star the Yeah. Well, there's a there's a new version of that, but yeah. So, she was in this quick interview on mobile gamer Biz, and the content of this interview was that Charie is part of the Spark program, which is Supercell's program for prototypes, and they are furthest in development. Her team has worked with the Supercell AI lab on an NBC AI, but didn't end up using it. And London has 85 people with most of them coming from Space A. That's really the content of this whole long interview. There was nothing really. But if you start reading this between the lines, well, Spark is in simplicity their prototyping program with people who are not working at Supercell coming into this program to make a prototype that will earn them a job essentially or they might be other way fit to a existing team and they could potentially get a job. So it's

like a longer job interview through a hackathon essentially. You can also read it in a way that why would any company use external people to develop their prototypes and then make them new games. Well, you can read it that Supercell actually is not able to make new games with their existing people and they need the influx of hungry talent that would be able to make them new people. I mean that could work the strategy but what works for sure is acquiring companies with successful titles and Supercell has not done really that before but I'm sure there will be a time in few years where they will turn into this. The interesting part about this article was also the lack of portfolio management there. Essentially, Spark Lab just makes cool prototypes that company might not have any type of a genre expertise or audience expertise in. And essentially, it feels like Supercell has adopted the Space Ape portfolio managementless model where they just make everything from a mobile to a puzzle game to a car game to an audio game. And

that didn't really work that well with for Space Ape. And actually Supercell ended up shutting down Space Ape and turning into Supercell London. And now they're following the same portfolio strategy essentially that Space Ape had. So it's really weird. And also another takeaway from this article could be that this AI hype that the management is having is actually derailing some of these young teams because when you read this Tommy tells about how they essentially wasted time working with Supercell's AI lab because they were chasing this NPC AI idea and then they stopped working on it because it just created more problems because they were chasing this idea even before having a core loop. And then you start asking yourself like how is this team the furthest along in development where they don't even have a core loop for their game which is you know kind of feels like one of the first things you design in a free-to-play game. By all accounts Charmmy Kim is a fantastic talent and this is more a message for Supercell

comm's team. In my humble opinion I think it's not good to let interviews like this slide. Doesn't give a very good look for the company or the coms team itself. Even a dummy like myself can kind of read between the lines and come to a conclusion that the company doesn't really have a strategy how to make new games. Seems like they're just throwing spaghetti at the wall and then labs everywhere. Like now there's an AI lab and now there's a Spark lab and like we're just trying to come up new things. And by the way, we don't even have a core loop. And I don't want to throw Supercell comms under the bus because I know how the comms work. It can totally be the case where the comms said, "Hey, we don't want to come out with this article, but they got overruled." So that could be also the case. So, not throwing anybody under under the bus, but I want to give Supercell a free advice. So, stop doing PR. That's really the advice here. You know, you had a really good strategy before where you did a lot and talked less and it worked like magic. And it worked like magic for a lot of other companies. There's Dream

that never says anything. They do 10. They did a huge marketing push with the new game. They had all the superstars. There's nobody from Dream given interviews about that. There's nobody from Moon Active talking about live ops and they're absolutely killing it with it. And they don't need to. And that's the thing. Supercell doesn't need to do PR either. Like you don't have any challenges of hiring new people cuz you're you have a great work life balance culture. You definitely overpay or pay really really well to people. You're super profitable company. And most importantly, you are a private company. Private company does not have to do any kind of communication. And I think their annual blog post is absolutely magical. Keep doing that. It gives this hope and good feeling to the whole industry. Everybody reads it. It's fire. So focus on that and that's it. Don't even do stuff about your global launches. You don't need to take a victory lap every time you release a game. Do these monstrously good games and stop doing these interviews and triggering me to analyze how without a

strategy you're functioning. So, it would be much better that we could just marvel at your games, marvel at their success, wonder why they're down, wonder why they're up, and just do that one blog post a year. And I'll bet it work much better than these weirdass articles on all the publications.
Oh my god, I love how you are now like you're truly embracing marketing and comms as your core functionality, Mishka. Every time I come on the podcast, I'm like, wait, you're giving like comm strategy. I love it. So I do not disagree with you that it is our belief that they should be quiet since you personally and by the way us dissect everything that they do especially on this podcast. It's my belief that they are laying the groundwork for the IPO. We've talked about that since they're hiring the CFO. And I don't know, it feels as though those are the breadcrumbs that they're laying down for us. And the people that, you know, are the intended target of these comms do

not dissect all of this press and they don't really understand it in the way that we do. They just want to be able to go out to the market and say, "Look at all this press we're getting. We're everywhere. We're doing these things." And I believe that that's their goal. I don't think it's the right one, you know, to your point because a lot of what they're talking about doesn't make sense to us as game industry insiders, but to the market, they're like, "Look at you. You're doing AI things. Look at you. You have a London things, but Mishka, stop taking the bait. Finland will boot you out." I guess they did. Um, so, you know, just like what's going on in our next story with Gen Z and Zoomers, those kids are booting people off of spending. They do have another game that guys, they actually launched. You know, Moco,
like that is now available globally without an invite. We'll check in on that next week. But like,
whoa, there's been no press tour. What's What's going on?
Good that they didn't do a press tour on that. Good. Let it grow. Let it grow and

don't talk about it. Work on it. Just grow it.
Can we have a mild agreement to not talk about Supercell for at least a month unless there's something crazy?
Unless they go public. Yeah.
Okay. All right. So, something I do want to talk about is Gen Z. So, these are young adults that are aged like 18 to 24. So, remember how we always talk about the video game industry being recession proof? Well, I think this is the first time we're getting some data that is showing signs that that might not be true anymore, especially for the youngest cohort. So, our friend Matt Piscatella from Circana and the Wall Street Journal put out an article, and this is just US data. The data is from online and retail sales. I'm unclear if this includes mobile or not. Circana sometimes does and sometimes doesn't. So, we're looking at a couple of charts that appeared in that Wall Street Journal article in some other places. The first one basically says that young zoomers, if I say zoomers, that's Gen Z or these 18 to 24s are spending nearly

25% less per week on video games than in 2024 versus last year, making it the top category for spending pullback while all of the other generations only declined 5%.
Dude, this is for four weeks ended April, right? April is like the slowest month of the [ __ ] year for gaming. This whole analysis, I'm really disappointed in this guy because he's really good, the Circana guy. But throwing this [ __ ] out to Wall Street Journal is so [ __ ] stupid. Like this is the dumbest analysis. Like if literally one game had released in April, like anything almost, and we would have had been a completely different story. You know what I mean? Like
Okay. Well, can we look at the second chart then? So that that is a little bit more of a longer period of time. So the second chart we can see that the purchases by zoomers plummeted 13% kind of where we are in 2025 versus

millennials and those are a little bit older. So it looks as though this specific cohort, this youngest cohort has been declining in spending. Does that change your mind at all?
No. Yeah. I mean like the problem here is like what is this based on? Is this survey data? Is this credit card panel data? Like the thing is they didn't link out to a PDF in the Wall Street Journal report. Like I tried to track it down and I went to their blog so I don't really know what I'm looking at here.
If GTA first of all this didn't include Switch too, right, which came out last month. Right. Correct. Correct. If if GTA came out in May, this whole report couldn't have been written if they included May, which they don't. Look, is spending patterns of this age group changing? Yes, maybe. But don't like call out video games as some kind of like,
you know, canary in the cold mine of what's to come. It seems like this is like the doom and gloom to an extreme.
Not sorry. Historically, this guy's been really good. So, I'm not quite sure as

to why he's doing this kind of hit piece for no reason.
All right. Well, let me see if we can reach out. I do think on that first slide there must be some sort of panel or conversation because they did break down the categories that are in decline for this audience. video games was at the top pretty dramatically over the other categories that they talk about which was like accessories or entertainment or I do think that you know in the podcast that I listen to and this cohort is having the the hardest time of any of the cohorts and I'll talk a little bit about that
you were saying that you haven't seen it for mobile so this was from a older deconstructor fund blog post cuz this is data AI nowadays sensor tower but this basically shows United States and consu consumer spend growth versus the disposable income growth index. It actually shows that as the disposable income goes down postco, we can see that

the spend growth declines in games and at the same time there's a graph on the right that shows that despite disposable income going down, app spending goes up.
I don't want to get political. I just think that this is a very bad bad bad analysis. Not a reasonable time frame. If you had looked at the full year and said that this age demo was down year-over-year in a market that's basically flat, then let's talk. But if you're taking April, April, April is like literally the worst possible month you could take. Like that is the slowest month in the entire year. Like April is like one 20th of December, right? Probably less. It's a ridiculous ridiculous ridiculous analysis. So I think he should re check himself.
All right. So, you know, I was trying to check this as well. So, New Zoo as of June 24, so just a couple weeks ago, released their forecasting for 2025. They're projecting 25 to be up 3.4%

driven primarily by console because of Switch 2. Console will be up 5.5%. PC will be up 2.5%. Mobile will be up 2.9%. and for the entire game industry, you know, Nuzu is like, okay, well, there's still kind of growth there, you know, in a sense, North America to be down a little bit. So, this is from Shrog's latest kind of presentation that he did for us at Off the Record where I don't know if this broke out games or not. I didn't have all the data to like break out games in North America, but he has North America down. So, you know, just trying to think about where he was coming from. Do we think it is reasonable to assume that these zoomers, these Gen Z folks are going to other solutions other than premium games? Are they playing more free-to-play on mobile and console? Are they going to UGC platforms like Roblox and UEFn which we know Roblox is hitting continues to hit

kind of record DAU numbers where they get gift cards and maybe you know those gift cards aren't accounted for or are they turning to your favorite topic which is game pass and PlayStation Plus? I was digging around and saw a Reddit post and a lot of the zoomers were saying you know I love Game Pass. I use it all the time and even though we just talked about it not being the most profitable thing or profitable at all as you always say crest it is you know not great for Microsoft but it's great for consumers and players. So you know whether you agree or not if it's trending that way are those possible reasons why it could be trending that way. Again, if we start talking like actual real time periods, like year-over-year type stuff, I think it's far better of a comparison. But when you're just pulling out months out of your a-hole, like it doesn't make sense. So, I'm not even going to justify this with any type of analysis because it doesn't make sense. The market is getting concentrated amongst a very

small group of titles and a small group of publishers and that's happening for console and PC and that this is the situation we are in the market. So that's about it, you know, and GTA comes out next year and then all metrics look better, right? You know, hardware sales are better, software sales are better, you know, and then everyone's talking about, oh my god, we're back. We're back. But, you know, GTA coming out of this year was just not good.
Yeah. There was a hole in the bucket because everyone was moving out their products because they didn't want to be anywhere near the end of March,
right? And that may have actually also contributed to the fact that nothing was in April. April is the one that bothers me the most. It's like April is like just a seasonally shitty month like just fundamentally. I mean besides, you know, June, July, August are not so great either except for Madden and you know sports stuff. Yeah.
Okay. Mishka, you want to talk about investment stuff?
Yes.
Phil had something to say about my interview with former head of Blizzard Boston.

Mishka, I'm I'm exhausted talking about culture. I I am I am exhausted. That being said, this is one of your best podcasts in my opinion and I really encourage people to go out and listen to it. To give you a teaser, like one of the things you guys are willing to talk about is the idea that like low morale doesn't mean poor performance or doesn't mean not hitting the company's goals. And so like you spend a moment and ponder like whether or not low morale even matters. And so I thought those were moments that like kept coming up in the podcast, which I thought was awesome, but I also couldn't help but think that there's a difference between what people actually want to talk about when they talk about culture is not culture. And I think Kim Nordstrom's definition and up down up, which I know everyone read, was that culture is patterns of behavior over time. But I don't think people want to talk about that. I think what they want to talk about is institutional policy, right? They want to talk about rules that they can create which ultimately shape a behavior. And when I kind of

look at like revealed preference rather than stated preference, founders spend very little time thinking about organizational design. Like they aren't out there thinking about like who should report to who, how should I set up my titling system or not have a titling system. Like very little time is spent doing that beyond like I would argue a couple of self-help books. And I do think like the reason that Netflix is like no rules rules one is because it actually told it like it is which is that like we play to win and we hire and fire and operate like it. And ultimately like people understand over time that ultimately action and incentives drive institutional behavior and they just let it rip. I think anything less than that is not a sufficient institutional policy. But that's what we should talk about is like policy not not really cult culture is an outcome of policy or at least it's it's one of the things that we think you're the most important factor and you heard it in the podcast right like that's something that he felt that he had misunderstood which is that you can influence it he's like no you absolutely can I'm equally tired cuz

like the success of a company I think it's like a three-legged stool you got the culture naturally meaning like how people work but then there's really important part which is capital and then equally important part which is timing and every time there's a successful founder or CEO, they just focus on the culture because that's the one where they had the most effect on and then you kind of forget like, oh yeah, yeah, and then we raised, you know, a couple of billion dollars and yeah, it was a perfect timing. Market was going 20% year-over-year and so forth. But I'm really curious to hear what you think about this next investment fell, which is Distinct Possibility Studio raising $30 million funding from Bedcraft for a launch of Reaper Actual, an openw world AAA shooter with web 3 elements. Is this Godzilla's off the grid, but instead of a battle royale, you're going open world? I don't think Off the Grid got enough credit to be honest with you because I think what it did prove is now that they have EGS, which oh boy, if EGS is the

thing you're holding up, you're in deep [ __ ] But at least they have EGS now, which is a mainstream distribution platform for these type of games. I still think without Steam, everyone has bowed to Steam and Web 3 will bow eventually, too. So, I think this is really in Gab's hands right now. Gab Gab game over at at Valve I think really holds the future but there's been nothing interesting in this space. Like we've basically stopped covering it and I think that's for sufficient reason. They haven't given us, you know, something to cover like off the grid. You know, if we want to look at an update, I think it's probably doing fine. Is it, you know, a crazy big success? No. They had this weird subscription thing, you know. Let's see how much capital they're going to burn by continuing to operate this thing. Why are you doing this? I have no idea.
Yeah. And and it's $30 million
in this economy.
It's just wasting money.
Wait, they just raised this recently.
Yeah. $30 million in a AAA shooter. Not to just build, but also
No, no, no, no, no, no. They've raised 30.5 million to date.
This is led by John Smmedley who was

really uh big MMO figure early on and also helped set up some internal studios at Amazon Games.
Yeah. Okay.
It's not no one. There's a track record here. Like I think that's the most important thing. his team rather than business model. Business model can always change.
Mhm. All right. Well, on the other news, Kotaku has been acquired by a Swissbased conglomerate for a cash sum that is undisclosed. So, I guess good for them. And Google has launched an indie game fund initiative targeting Latam region. The where they give between 150 to 200K to indie game studios based in Latin America. It's pretty admirable that Google is doing funding. Like we talk about how challenging it is that VC and PE are kind of drying up and the money they're handing out. So,
it's always great when somebody's bringing money into the gaming industry. I just wonder what are the incentives for Google to write checks and actually

these checks are so tiny. So, I'm trying to understand like just how does this make sense? But I guess I I don't know. Maybe they're working on some kind of a PC platform or something.
Yeah, they do have their their PC platform initiative.
You know, you can build on Android on mobile and it automatically goes to PC. It's also specifically to the Latam region. So, that's kind of interesting.
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All right, what else we got? So, there was a news article that came out from Mobile Gamer Viz, although this was reported more broadly that Blizzard is ending service for Warcraft Rumble. And no, you do not need to check the date. This is 2025 that they are just shutting this down. This game has only done 50 million life to date. And you know, I don't I don't want to call an object failure. I actually thought it proved quite a bit in terms of Blizzard's design prowess, but ultimately this design was 5 years out of date going after Clash Royale in a PvE format, even if it had a clever, you know, hook. And I think this is just symptomatic of developers really struggling to understand mobile and just the different mindset that you need to have if you're trying to do mobile. I think the recent

news we've seen about Blizzard potentially like shopping some of their IP to South Korea is a really strong play. When you look at results like this, it seems like the strategy actually works from where they are. But I can't even think of another HD developer that's done. Well, can you guys?
You remember Smite did the Clash Royale version as well? Smite is the game, but that's the
the mobile the third person MOA
in Steam.
Yeah, they did like a Clash Royale version as well. I remember at one point everybody was doing. But the weirdest part about this is Blizzard came in so late that we even forgot about all the developers that failed and then Blizzard comes in.
Phil, just to like minor correction, moving forward, we'll continue supporting Rumble with updates focused on regular and systemic in-game events and bug fixes, but no new content. So, technically, it's still alive, just no new content.
And the thing I just want to make sure we don't leave without mentioning is that there were 100 people on this game. 100 people were on this game. I mean,

this is a 100 people that could have been on Overwatch or like been on a growing product or on that survival game which they canled, which is still a genre that's doing well.
And and 100 people in the US, not 100 people in like, you know, no offense, Romania or something.
Yeah, they're in Irvine. Yeah.
And Irvine, the cheap Irvine.
Okay, let's move on to merge two. There was a piece of news in mobile gamer biz again where one of the trail mix GMs Felicity Gracie Hurst gets on to talk about a lot of love and pies which is a game that has done really well in the merge 2 space has been one piece of news and it was interesting on why she's doing this PR push or what's up at trailmix and then we got a separate piece of news from Tristan Clark who is a co-founder at Trailmix reporting on LinkedIn that this is going to be his last week at Trailmix. So, there's there's two things going on here. There's the merge genre news and there's how Trail mix fits into

it. Jen, what's going on in merge?
Yeah, so I took a look. I used to love this genre as a human. I have since pivoted to your favorite all-in hole and the royal kingdom and royal matches. Had no time left in my life to continue to play Merch 2. Uh, it's on fire. So, I looked at Sensor Tower US
year-to- date data. So, that's what we're going to look at here. It is the number two top revenue subgenre in puzzle. It's number two right after the royal matches of the world. And more importantly, it's the number seven top revenue subgenre overall of all subg genres, right behind squad RPG, one of our favorites. Again, this is just US year to date. Love and Pies is a top seven game in Merch 2. Gossip Harbor's number one hundred million dollars year-to- date in the US alone. Super super impressive. Crest, it's not mice nuts anymore, right?
Not mice nuts.
That is next one is just basically showing that the genre during the last

12 months has doubled in terms of inapp purchases, which is a quite a growth. And you know, we're talking about declining market and this and that, but look at merge 2 just growing. And then I put in few of the top games as well as Love and Pie to just see how well this trailer mix title has fared as the genre has doubled. So Gossip Harbor is essentially the game that is driving the growth on the genre as a whole. And of course there's plenty of new games that came in. Travel Town, Seaside Escape, Merge Mansion have been kind of holding steady, but Love and Pies has actually, you know, it's tiny compared those four largest one. Love and Pies has actually lost about 30% of its monthly revenue since the beginning of the year. So, it's not fairing too well for Trailmix. And looking at Merge Mansion, which is another Supercellowned SLbacked company in the same genre,

Metacor, right?
Metacor. Yeah, they've been they've been holding steady. They used to be the number one. I think they took the position from Zingga
and now they're at number four. And so everybody else is kind of keeping steady. Seaside grew a little bit, but it's really the Gossip Harbor that is absolutely just crushing.
Yeah, they're crushing it. And then Travel Town, uh, which was taken over by a Chinese company,
Travel Town. Yeah, that's Israeli.
Oh, Israeli. Okay.
Yeah.
What's going on in Puzzle is really interesting is that especially in the last year or so, it's really broken into all of these different subg genres where you can really get into what's working and what's not working within each of these. Love and Pies is basically the original for Merge 2. They're the OGs. that's what everyone copied and I think they've just had a difficult time keeping up with what everyone else is doing and how they've really added in all the monetization. They've taken a lot of social casino monetization

components, meta collections to to really drive the category. So, oh, let's go back to shooters cuz you know it's not a podcast with us if we don't talk about shooters.
So, uh life service shooter game comes to a premature end and this is Steel Hunters from Wargaming. It's a mech game that we actually covered to quite a detail on this Twig episode a few episodes ago. We talked about Steel Hunters versus War Robots and Chris Sides was actually a guest host on the podcast and he came pretty hard at Steel Hunters talking of their gunplay and how they used the UE5 templates if I'm correct what he was mentioning and it felt very generic. It looked different, but the play was not that interesting. And he was right. So, it looks like Steel Hunters didn't make it. And Wargaming still continues with tanks and a little bit of ships. I don't remember if they have
We We need to talk about this next week, but I think the biggest story in all of

this is Mecca Break, baby. Like Mecca Mecca is on [ __ ] Steam. It broke over 100,000 CCUs. It is a Japanese free-to-play Mecca game and you have a deep deep layer of customization. It goes full full eastern and I think this thing Oh my god, I'm so excited to play this. I haven't I'm not deep enough in to provide a review. Let's talk about it next week. My aspirations for the Gundam franchise are held in this this video game.
Oh wow,
it looks really cool.
Wow. It's a shooter like action
but but you're like flying. Wait till we get to the home menus and look at progression is what I say.
Mecca break.
Oh
yeah. Look at all the character customization. And let me tell you, this is uh different different cultural norms.
Yeah, they look really enhanced.
Really enhanced. Yeah. Anime uh pushed to the limits.
Yeah.
All right. Well,

in the hope of being somewhat positive about what's actually working in the game industry right now, I came up with a topic to talk about is like basically the top seven games outside of puzzle that have done well in the west for the last two years, mind you, are the following. Pokemon, TCG Pocket, Dark War Survival, Top Heroes, Kingshot, Archer 2, Capibar Go, and Lassie Survival. And I know we've talked about kind of like the essences of these, but I just want to reiterate because I keep getting people saying kind of the same thing is that everyone seems to be wanting to build games that delight themselves, right? Versus games that actually do well in the marketplace. So, um, I came across some article that was written, I've never met this or heard about this person, Ailen Yaziki. Does anybody know her? It was actually a really really well-ritten piece on two particular games, a century games.
White Out Survival and then Kingshot. And I've been playing Kingshot like a [ __ ] crack addict. Part of the reason

I wanted to talk about this, I have spent a ridiculous amount of money on this game for me. And the whole point of all these games is the same thing I've been talking about since [ __ ] we were in Turkey like three years ago, right, when IDFA happened. is that all these games have the same recipe. First of all, they're all made in China, right? Second, they are casual gameplay with deep monetization design, right? Full stop, right? And they are deep. And when I say deep, I mean deep. like they have so many different elements of engagement on these games, spending syncs and you know upgrade all these different mechanics and and systems that are geared towards building up your power level for your games. And so she wrote this piece about these two particular games and it's basically saying how the 4X genre is kind of evolving with like you know these hybrid casual mechanics which reduce complexity in terms of the funnel but then it makes it again a much

more deeper game when you get into it right by doing that it's much easier to acquire users and and less expensive in in the hope to get the whales. And the whole concept here is that the fact is that the majority of the of the money is being generated by a very very very very very small percentage of the people and so you need to capture them in some ways with deep monetization design. That is what's critical to this business. Right? So she kind of writes about this on on how the forex genre is evolving. Um, all I really wanted to say is that mass market gameplay helps bring people to the game, but the demonetization is what actually makes money for the game and justifies all the UA spend. And so again, stop focusing on Warcraft Rumble and games that delight. It's just all about figuring out ways of monetizing them. And even these games like Grow Garden is egregious. Absolutely.
People have no idea. People have no idea. It is like the absolute worst

in terms of extraction of all possible. Like the most casual game. [ __ ] gross. Absolutely gross. That's what it takes to make games successful nowadays. That's what it takes. But that game is going to be here today, gone tomorrow. But these games are actually sticking around and growing and continue to attract user. So, I just wanted to say this is what's working in the marketplace right now and scaling outside of puzzle, right? Puzzle is kind of a different ballgame, but from a core type gameplay and game mechanics.
I did a little webinar on the grow garden. I looked into that one cuz I worked on Farmville and it's basically Farmville for kids with Phil's love of monetization, rarity, scarcity. I mean the whole thing
mutations stealing stealing stealing the live ops people don't understand there's a real live ops strategy in grow a garden there is
not only that there are chained offers

remember these are very young developers like implementing the best of monization practices and there is no place where there is not a tentacle that monization will go in Roblox games
and it's out of New Zealand right
there's two teams like there's the original developer yeah there's a 16-year-old kid and then someone else bought I think a share And so they co-develop it and there's there's some headcount on the project now. It's it's not just a small team anymore.
Yeah. One of the guys from the new company that took it over, he's a basically a Roblox influencer himself. And so once they took it over and I think they have like 49% of the game and he started to talk about it, it blew up. And then every Saturday morning and I think it's 7:00 a.m. Pacific time, you can just watch the CCU spike with the update. So every week they've got brand new live ops, brand new events, brand new things to buy. And the way that they do it is just, you know, like Phil, it's

the deepest monetization that you would see in some of the hardcore games just added to this silly farming game. It would make the original Farmville developers from Zingga blush. Oh, yeah. You know, in terms of the monetization design. I mean, it is unfucking believable, right? It is sickening. Absolutely sickening. But again, it's going to be gone in a few months. I think like we're not even going to be talking about this in a few weeks. So, it's not a sustainable model, but it's certainly
I think you're still missing the headline, Eric, which is Roblox's ability to grow hits like this. That's the real story here, which I think is interesting because they took something from nothing to something based on organics basically alone.
Yeah. This is just like Zinga and Canvas on Facebook. This is exactly the same thing. You extract as much money as possible from the consumer and move the [ __ ] on. You know, that's why Zingga was like a destined to fail is because they just extracted as much money from the users and then moved them on to the next game which monetized less. They pulled the means of distribution right from under their [ __ ] noses, you know? And

so I don't think Roblox is going to do that. But the next like sickening game is going to come out and they're going to move on to that, you know, like that's the way this business is going to work.
I paint it in a better way. Like I think at Zingga they called it like the Death Star. Like they're building the Death Star and you just kind of like point it and launch it. Like that was always Farmville is like they cross-promote things and like Aldderon like explosion. I think the real story is that Roblox like it sounds like they finally have their death star which is the platform like just point this thing and
you know they can scale any game on the platform. I mean that's that's incredible. This is the most played game in the [ __ ] world. Even if the arpoo is really low, which it is, that is not insignificant.
You're not giving enough credit to the influencers that draw people in to make this a thing.
No, influencers are at the other end of the funnel. Influencers cannot make something that's not popular popular. Like they are just as much writing the demand wave as anyone else. Like most

popular games are the top stream games. CS GO, Dota, League of Legends.
Dude, when Farmville was coming out in Canvas, people were saying the same exact thing, right? This is the most people that have played a game in the history of man.
And that matters, right? Like that mattered for Candy Crush. That matters for Farmville. Like they rode that for a long time. That wasn't insignificant. that mattered for Fortnite.
Of course, it matters. And Fargo, by the way, is still around. I know it's crazy, but
the difference is they maintain these audiences for the successes like Fortnite and Candy Crush.
Yeah.
These audiences are going away, right?
Yeah. And I think that's fair. You know, let's look at how this one holds up. Let's also look at other platform titles like Adopt Me. Like there are games with like stable live service.
Yeah. I'm not condemning Roblox. I'm just condemning, you know, the the hit driven like games like this. Like it's amazing, but it's not sustainable, right?
I don't know. Uh that a lot of the games in the top Roblox charts have been there

for a while. Yes, it's going the hype is going to die down because squirrel because you know these kids have an attention span of 6 to 8 weeks and it's summer. They're likely going to stay addicted all summer and then maybe it'll drop down when school goes back in. It's not going to maintain this level, but it might not go out of the top 10 or 20 unless they stop supporting with live ops or if something else comes in to take its place. You know what's interesting here is it's finally the farming genre. I know it's crazy to think that farming and kids is like the next genre, but you know, if I'm a Roblox developer, I'm going to go mine all of the other games for 60-year-old women, which is the irony here is like that was the audience for Farmville was like 60-year-old women in Iowa who love that game for a very different reason. They took all of the like Pokemon trading card mechanics and put it into a farming theme. And so I think you're going to see a lot of that if I had to

guess is go find a different theme and then just, you know, layer in all of Phil's favorite monetization mechanics. All right. Yeah, I think that's everything. All right, Mecca Break next week. And uh yeah, we'll see you next week.
Till next week. Peace.
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