TWIG #353 Netflix Goes Couch Co-op, PlayStation 6’s AI Ambitions, Supercell’s Open Letter

Cranny Crush didn't come out of Sweden for no reason. There's this thing called Lord Goodies, which is like sweet Saturday where everyone goes to the supermarket and loads up candy. When we talked about Sweden being a conservative scop, this is what I mean. This is like a religious ceremony and like the Swedish family eats one kilo of candy per week. I just want to like declare that that's about 4 to 500 gummy bears or 20 to 25 lollipops. [Music] Welcome everybody to this week in games episode 353 in case you were counting. Let me tell you what we're going to talk about today. So supercell co's open letter Phil wants to take his shot now that he's back from Cyprus. Apparently we're doing that. Netflix games goes 2.0. Uh let's see what the new head of games have been cooking with his $10 million salary. We got a couple of sixes. PlayStation 6 and Battlefield 6. And because Puzzle Queen is on this episode, we are going to talk about

puzzle games. But now to the amazing hosts. First chair, Eric. Strategy and investing. You know, Mishka is now in the third world, so his internet connection is absolute crap. So I have to deal with that all day.
That's true.
Phil Black Monization. Sorry. Am I second chair? I thought I thought it got moved all the way down.
Oh, no. I'm all the way down. But can can I change my title to like can I be like puzzle Xbox queen? Would that be like a thing? It's a joke. Okay, fine. But okay, Laura Torto. Fine. It was a hard no. Got it. Um, I'm focusing on puzzle. Still love puzzle even though I work as uh part of Xbox now.
All right. Uh, and yours truly, friend of the founders. So, Phil, what did what what happened in Cypress? How did they treat the Zar?
Uh the wall, the Lambo, the Lambo ride was great. Um the hookah even better. So GDCY happened. Really great event. Uh no

connection to the game developer conference as I found out, but really great uh branding. Met a lot of wonderful founders out in Cypress. We have a podcast that'll be coming out very soon, maybe next week, week after, where we talked to what I am softly calling the new Silicon Valley of Europe. So much happening. A lot of things on the PC console side. I was surprised by a lot of interesting thesises about where games are going. So couldn't be more excited to release that. Also, they flew in a tuna to make ceviche, which was delicious. Uh they sliced it in front of you, which was something else, man. And it was in a winery. Oh, that red wine.
Yeah. Okay. Sounds sounds good. You're you're getting used to the uh the life on the Wait, wait. You went to a conference called GDCY that had no affiliation with GDC.
No, no, no. Just a coincidence.
We We have lost Philip. We have lost Philip. It's only been a few weeks, dude. He's gone. Absolutely gone, dude.
They like even had rosé for the Swedes.

Oh my god. I would picked up a couple Russian words.
It was great.
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Um, all right. Let's talk about the uh the the Supercell CEO's letter. So, Phil, you had something to say about that. That was a news last week.
Oh, yeah. Well, I had to listen to last week's segment. Painful. Um, that was issue number one.

We did get a lot of flack for that. I have to admit, like flack that was deserved, but go ahead. You tell us. We needed you here for this, dude. That's the thing. I don't even want to talk about the politics stuff. I want to put all that aside. I want to talk about policy and like what this letter was. And I know Mishka has kind of like I don't know dunked on Supercell PR. I thought this was really poorly done. Don't me wrong, I stand with OKA, but for God's sakes, why is he publishing this on LinkedIn, right? Like what what is the target of a letter like this? It is to be addressed to European regulators and to influence policy. And so he's built up this profile in Finland on Finnish newspapers, right? like he publishes pretty regularly in the Finnish language and so why is he posting this on LinkedIn and not only that why is he not posting this with other CEOs which is something Mishka you talked about where where is the rest of Europe on this I mean even Ilka couldn't call someone like the CEO of like huge games the CEO of King the Italian mafia like literally call anyone rather than hung out to dry where the [ __ ] is Tim Sweeney like where why is this not a

part of his crusade and right now he needs to cozy up to European regulators because he's worried about, you know, the app store regulation. He wants that to pass through the So, so like he's kind of bound into his own political situation, but no one has spoken up with him. Don't publish this by yourself. That felt like a really poor poor choice, I would argue. And I wasn't clear on what the target audience was. The content of the letter was shocking. Like, why are we getting into theme park coin analogies? Like, in a PR press release, you don't want to get into an argumentative state. That's not the goal. What you want to say is, "We want to focus on jobs. We will find reasonable solutions that encourage European growth, employment, and also political power. Games are political power. The EU needs that right now. And so then what you do is you go behind the scenes. You collaborate on these regulations and you shank the [ __ ] out of them. And then they become toothless. And then what happens is both people get to win. The regulators get to say they did something and then the game makers get to have a rule that doesn't hurt European growth. And so I just felt like

this was a poor policy strategy from Ilka's side. And I don't think this is how you want to affect policy because putting game monization on trial is the exact wrong thing to do. And you saw that in the LinkedIn post. Like you don't want these regulations to be a referendum on game monetization. I think that's the wrong setup for this.
There's been some messages that I've heard that um a group of EU regulators have been visiting Supercell offices before this letter. And it's interesting that this letter was posted afterwards after these visits over these months. Apparently, it didn't go anywhere. So, he decided to, you know, use the public opinion, as you will. But, I do have to say this, like regarding PR,
in order to be a good comps person, you have to be ready and willing to clash with the CEO. What I mean about that is like CEOs, especially founders, are absolutely unhinged people. uh they always have a chip on their shoulder or some kind of a god complex, sometimes

both. Like look at Peter Theo. He's out there doing off thereord Antichrist lectures. Like clearly he doesn't have a PR person anime.
Yeah. Like Peter, I know what you're trying to say. I know the message you're trying to get across, but this is not this is not how it will come out. Anyways, if you have a great comms person, they help you to get that message across without you sounding like a madman or an [ __ ] or both. And what we're seeing here with Supercell, it's like they don't seem to have much influence on the the comm's team. And that has deteriorated the brand that the CEO had, which was the least powerful CEO. And now it's like a least powerful CEO wouldn't be trying to influence the regulators of European Union. Like that's not what the least powerful CEOs do. It's just weird that there was no, as you Phil, as you said, there were no more people behind this letter to kind of come from the industry rather than from one single individual who's very

powerful from Finland.
Let's talk more about EU regulators. Let's talk about something fun like Assassin's Creed and uh Ubisoft. the first kind of like domino fell on Ubisoft with this nepotism [ __ ] with the CEO's son uh taking over Assassin's Creed and it's actually really sad because this guy Mark Cot I don't know how to pronounce his last name but he's been with the team for 20 [ __ ] years dude 20 years he's been working on the Assassin's Creed franchise uh believe in Montreal and he's left the company after 20 years. And this is the challenge with nepotism, right? This is exactly what I've been talking about is when you put people in charge that have no business being there, no one's going to want to work for them. And so Mark's like, I'm not taking second fiddle to this guy who doesn't even know anything about gaming or how to manage a team or or manage a franchise or anything, right? The guy's

barely out of diapers, you know, and so he's bailed, right? And he is the most senior leadership at the franchise. Like don't underestimate how important this guy is, right? You may have issues with how he's managed the franchise over the years, but regardless, he's absolutely a key production leadership in both Odyssey and likely save Shadows from the abyss while it was in development. So, he knows all the production processes. He knows all the people. He knows where all the bodies are buried. He knows how to get [ __ ] done. And I don't think he'll be the last one to leave in this type of key position. People like that leaving, other people will follow. So this is it. We're seeing it real time how what the impact of putting someone in charge that has no business being in charge. The second thing that I wanted to point out and this really pissed me off the last weekend and I was kind of like holding back last week but I really and would like everyone to like look at Chris Petravic and Matthew Cananterman in the podcast at Game Changers. They basically spoke about the EA acquisition

with really really thoughtful analysis and actual expertise. This is not just because they agree with my take. Really, it's not. It's about the fact that rather than just repeating tropes about typical PE transactions and reinforcing this generical narrative of big equals bad. They were just calling balls and strikes on this particular transaction, which is what I think everyone should do. So, I do recommend listening to that podcast or reading the blog. Actually, the article was as good as the podcast in some ways. But this is actual analysis and like real takes on the transaction, not just this [ __ ] that people were spewing out there on other outlets. Um, and I'm not going to name names, but everyone knows who I'm talking about. But many of the read details will actually emerge when they come out with their filings. Not all, but some. But I doubt any of these outlets that came out there was this 25 to 30% like [ __ ] riff that they're expecting will ever change what they actually said because all their halfbaked takes. They're just going to basically let it lie, right? And listening to Chris Petravic who actually

knows what he's talking about and says it in a much more pragmatic like thoughtful way than I do really helps uh kind of crystallize my thoughts on what's really going on with this Saudi acquisition of EA. So that's it for me for now.
I at least want Eric Crest's take on Matthew Ball's take. I don't know if you've had a chance to check out Mr. Mr. McKenzie consultant.
Oh, no. No, I have not.
I I don't want to straw man's argument, but I think along the lines it's media play and aligns with Saudi's other ambitions when it comes to sports. And so we can think about the EA Sports app that they announced and have launched at the prior talk that you talked about Mr. Toronto giving. You talked about UGC and then they talked about the the mobile sports app where you get more real-time information about FIFA sports potentially. So think about real real media integrations. I don't think that's such a bad take necessarily like longer term maybe like they have more aspirations of being more of a media

player right in the space and and legitimizing Saudi Arabia as something besides country that pumps oil. I don't know. Maybe I'll have to read it. Maybe we'll come back on it next week.
Okay, so PlayStation 5 and PlayStation 5S prochitect Mark Sirin and AMD unveiled project ath. Oh my god, what are they doing with these names? Outlining machine learning graphics, Radiance cores for nextG lighting and universal compression technologies not compatible with PlayStation 5 hardware. Sony hinted they'll arrive in the future console in few years, strongly pointing to PlayStation 6 targeting around 2028, marking a generational leap towards AI accelerated rendering and efficiency. Crest, this is you. All you say it's funny how you read this stuff because you have no idea what the [ __ ] the words

are actually meaning.
It might it might as well be Greek. I have no idea what that is.
Not that I do. Anyway, I I put this article in just to basically articulate the fact that well, Cerny is just a big nerd that has been designing [ __ ] PlayStation forever, right? The guy's like a super engineer, right? He's really well respected in the industry. My whole point on talking about this as well as kind of the confirmation that Microsoft's continuing to work on the nextG console as well is that dedicated consoles are going nowhere, right? Like as much as PC has gotten a lot of limelight over the last few years, this is not the last generation of console. Next generation is not the last generation of console and the next generation after that. Dude, we're going to keep going because it is the optimal way of playing games. They plug and play. This is what works. And this is why the PC industry got supplanted by the console industry way back in the day is because of the plug-and-play cap compatibility. What you get with the console is it's optimized against controls. It's optimized against a particular hardware spec. And it's much easier to develop for because you're

developing for one spec. you're not trying to figure out how to work on all specs with PCs and PC just in general is still a pain in the ass with optimization as we've seen with Borderlands. I think Battlefield's actually done quite well with that so far, but every PC release has issues. We will keep seeing consoles because it is the optimal place to play. Maybe it's not the growth industry it used to be, but it's still like the primary way people are going to consume content. So, they're not going anywhere. Consoles forever. You seriously don't think the next generation of consoles is going to sell less than the prior one without Xbox? How can you say that? You think the entire Xbox hole is going to be filled by Switch 2 and PlayStation 6?
Most likely. Yeah.
Wow. So, do you do you think that gives PlayStation and Sony pricing power?
It gives them market share power and some pricing power. This is my biggest concern with the fact that Xbox is so is blowing the hardware war, right? I mean, they have a monopoly now on what the FTC has argued is what high-end console devices.

Well, I don't think the FTC has defined that as a market, per se.
Oh, they've absolutely tried to. The whole Xbox case was revolving around that definition, excluding Switch.
They tried to, but that doesn't mean that they were successful.
Well, well, hold on. Put put aside their legal [ __ ] I mean, I I don't think that's an unfair definition. Like, you really think if PlayStation raises prices, people are going to Switch, too? Nah.
I'm not disagreeing with your argument. I'm just saying the FTC does not have the authority nor they have the ability to actually define it in that way.
Yeah, it's a scary place to be. That's what I've been arguing. It's like I don't want Sony to own this market, right? But that's where we're at right now because Microsoft's just moving screwing the pooch.
Talking about screwing the pooch. Let's talk about Netflix 2.0. The announcement in short was that that Netflix is back, baby. Like it's Netflix games is is rolling. It's shipping. And the new thing that they're shipping are party games. So I watched the video with the co-CEO, Mr. Greg Peters, and he talked on Bloomberg interview that the challenge

still remains that a large portion of people just don't know Netflix offers games. So it's a long-term strategy, guys, to keep telling them about games and shipping new ones and talking about it. So now in this talk the phone was the problem because you have so many things on your phone and kind of games on Netflix is not that thing. So they're going to take the living room and they're going to introduce party games that you can play on your phone on the TV device inside your house. This is so re revolutionary. I've never heard of anything like this. And they are essentially taking the battle into the living rooms. And you know, I was listening to this and a reporter of course didn't challenge this CEO that you know, it launched its first game in 2021. So, it's been a few years that they've been promoting this on their platform and they have been promoting it on the front screens and you can kind of argue that Discovery is hardly the

problem. Maybe the product market fit is the real problem. You know, everybody knows that Netflix does live sports right now. They got that real quick. Like everybody knows you get boxing on on Netflix. They had to do one fight with not even a real boxer and and you got it. So the big question here remains what is the product market fit with these party games? Because Apple has done this for a while like you go to Apple store and they promote this. You can even get a controller. It's on your Apple TV. Samsung smart TV has been offering this as well. You can use your Samsung phone. You can install the apps. You can you can do this. So to me, this sounds that they're pivoting to something that sounds much easier than it is. I am worried because Netflix 1.0, the one that spent $3 billion on on essentially releasing Steam ports and dead freetoplay games. That kind of like to me showed that this

perhaps an organization that will not always win. And so I all the best to them in this battle, but I'm scarred by Netflix 1.0. So Chris, what's your take? I'm far more supportive of this Netflix 2.0 approach. This actually makes sense. This feels like more of their wheelhouse to me, right? And I think what they really just need is like the Stranger Things of interactive, something that's like super compelling that people really get engaged with, right? I think pushing the envelope on interactive and social on smart TVs makes sense, right? Rather than distributing licensing junk on mobile or doing stupid deals with Take 2 regarding GTA. But imagine if they build like a network of social party games and that builds engagement and retention. That's what they need, right? And it lives outside of traditional gaming to some degree. It's completely different different vertical altogether. Now, the mention of Xbox cloud gaming is stupid. No one cares. I don't know why

people are discussing that anymore.
But I I still can't understand why they can't make the stuff more popular. Maybe it's just because the content is not popular. So maybe you awareness, I mean, for for the Netflix user base. I do think it's going to take, like I said, a Stranger Things type experience that reaches the masses, I guess, um, to get this as more as part of what the expectation is from the customer. Maybe they could buy Jackbox Games and do the [ __ ] obvious thing they should have done 10 years ago as they try to rebuild it. How much could they possibly be worth that Netflix would not write a check to just solve this problem? Or at least I don't know. That's a bet I would take rather than What did they pay? 50 million for GTA.
Yeah, exactly.
For a one-year loan,
[ __ ] pissing away.
Yeah. Well, hold on. Hold on. We need to be positive. We need to be positive. This is a very positive thing. They're taking positive steps. They're big IPs. Legos in here. Tetris Time Warp like they didn't Pictionary. Love it. Love to see it. And only that Netflix games with

a lowercase G that new strategy slaying. And we know that because K-pop Demon Hunters came into their stupid Roblox experience like a week after it launched. That was positive. It was still stupid experience. It wasn't separately branded. It was with inside the Netflix world. So, I'm sure they can spin up things in that world or that experience quicker than like a separate skew. But, they still did something. And they announced a Fortnite deal, right? They announced a Fortnite deal where K-pop Demon Hunters is going to be coming to Fortnite as cosmetics. Also big [ __ ] win. Things that you can move quickly on that have low marginal cost like capital. This is the most viewed Netflix show movie of all time already. Incredible incredible results. Capitalize on it.
Yes, absolutely. So, I think these are all very positive things. Of course, not for Netflix games with a capital G. That's still a failure. This seems like branding play. Uh and I think like now they're moving on to the next set of problems which I do think is a much more interesting problem set which is like for instance what do I do on the controller side right so they have the Netflix app controller and if you look at sensor tower numbers the number of

active users on that game controller is about 1 million compared to 30 million MAU in the United States so like talk about failure I don't know why you wouldn't just build this into the core Netflix app experience I don't think it's that [ __ ] hard but whatever I think this is ultimately a positive thing like let's get to that second layer of problems like Remember, they have a million devices they have to like optimize for. That was a big problem with the interactive stories. Remember the Black Mirror interactive story that they recanted? They moved away from this.
Oh, how how could you forget it?
So, there there are real problems to solve. I wouldn't ignore those, but like this feels like the obvious plays besides Ethan's Bridgetton match and Emily and Paris dressup game.
Okay, first of all, that's a great idea. Those are totally
They haven't gotten worse ideas, Laura. Like, they become better ideas. Well, the thing about buying Jackbox, why would you do that to Jackbox? I feel like they already have this kind of down pat. Like Jackbox has been doing this for ages, and I feel like Netflix is just kind of picking up. Ah, and then

also, I don't know if you've played there, uh, what was it? Acron, Revenge of the Squirrels. Um, Revolution Games has been doing this, too. There's a theme in this episode when we're talking about games. It's like late to the party. In this case, late to the Jackbox party, late to the using mobile as your main controller party, but this has been done forever. And like I mean the combination would have been more interesting like with the Acron game, it's a VR set where you play as a tree and then the phones are actually you're playing a scroll. So you can play in a group. One person is the VR headset. You're using a screen and then everyone's interactive. So they're moving into that level of kind of social gaming, but it's not novel. I feel like they're just catching up.
Party games. All right, let's talk about fantasy Pixel Castle.
Fantastic Pixel Castle. Sorry.
So, basically, Netis is divesting the Austin based studio, Fantastic Pixel Castle. This is led by Greg Street, who was formerly at Riot and Blizzard. The fate of the studio is hinging on whether or not they could find a new investor or a new publisher for its MMO RPG code

named Ghost. And so, basically, Greg Street took to the internet. Basically said, if we unable to find a publisher soon, the reality is the studio would likely close. and the entire team leadership included would be affected. So first clearly this is the victim of like Net's devestature outside of the US and like you moving more development to China. The studio actually only started in 2023 so it's really not that old right um and but they did create a fully remote global workforce with a ton of money right and lots of autonomy right was like kind of the way they built the the nature of their studio. Their unique spin was they were partnering with players. They were, you know, showing concepts and prototypes. Players were helping make design decisions. It's basically kind of the Twitch of game development, right? It was kind of a weird weird vibe that they were trying to pull together that sounded cool.
Just that's just Reddit. That's it. We're looking Reddit comments all day to make game design decisions.
Yeah, exactly. Which is
and Twitter.
Sorry, I'm trying to be nice. It feels

like this was not even close to getting a game out like and require really significant investment to get it to the finish line. So, and I think their approach, you know, while novel was not really optimal, particularly the current environment, right, where it's it's really getting challenging out there. So, I mean, if they had more of a central team and they were actually building something and they had prototypes like and they were actually like more further along and they were like in Montreal or like Toronto or I don't know, Vancouver or like Eastern Europe or something, I don't know. But the problem is that there's nothing here to acquire, right? There's this distributed team that is building games on committee, right? So, it doesn't really feel far along enough for another publisher to get involved, but it's possible, right? It's still possible. I don't think 10-centent would ever touch this. Sony is not likely picking up these type of projects. EA is out. Take 2 doesn't do MMOs as far as I know. Maybe the Japanese, maybe the Koreans, NCOFT, Net Marble, Square, I don't know. But I just don't think there's a lot of value here. Net is kind of half of the

story. I think the other half lies close to home. I think, you know, West overall, especially when talking about US developers, have largely priced themselves out of the market. high workforce cost, culture of comfort seeking kind of driven by these endless debates about remote work and work life balance have dulled the competitive edge and if you like Greg Street was actually very active on Twitter really active. I don't know details about this organization nor do I have any proprietary information. This is something I I was reading from the social media posts that you know it wasn't the the typical hardcore Chinese team working on an MMO. It was typical Western team kind of developing in a in a committee as Eric you said Yanglu who's who's been poking on on Greg Street on LinkedIn for a while. I believe he said that uh the the leadership team in dis studio as well

was getting closer to a year in salaries. So that kind of tells you about how they priced themselves out of the market and you know somebody will come in and say no it wasn't it was like it's like okay we'll make that correction so please let us know but I remember the salaries were really really really outrageous as with most of these X-RiTot X Blizzard uh places we can't blame NIS because like many of the top venture capitalists also lost the investors money funding these X- Riot and X Blizzard studios you know without perhaps having that much experience of working at studios but being ranked in certain games at some point of their life. So you know you can make these calls. So best of luck to the fully remote team to find more fully remote high paid positions. I don't even want to touch this. Okay, moving on. Well, let's talk spaxs then. All right. So, US-based video game commerce company called Exola has registered an affiliated spa to raise 250 million. The

company plans to offer 25 million units at $10 per unit and each unit consisting of one share of stock and one-third of a warrant. According to SEC filings, the primary objective is to complete an additional combination within 24 months targeting high growth companies in games, video games, fintech, adtech, and telecom. Spaxs are back, baby. You know, we are in insane times if spaxs are back. Just for the record, spaxs were an absolute train wreck in the last time, right? So, this is really a bad sign for the overall industry. Plus, gold is an all-time high and and silver, like there's a lot of frothiness going on around here. However, if you want my expert macro opinion, no, you don't want my expert macro opinion, so don't even ask. So, this does not seem to be for Exola. Like, Exola is not going public in this

transaction as far as I can tell, right? The CEO and the CIO using Exola's name and likely money to be a sponsor of a spa. So, they're actually in search of another operating company, not Exola itself. And I think this is a way for Exola potentially to do an acquisition of another company to help build their empire and scale their businesses perhaps, right? It really kind of seems a little bit strange that execs at current company are pursuing spaxs. Don't they have like a business to run? You know, like what what's don't they have a day job? You know, like I don't know. It's really bizarre to me. But what it looks like is they're looking at potential targets that may be a creative way for them to grow through acquisition versus using equity debt and and traditional acquisitions. Maybe, right? or maybe they have a particular target in mind, right? That that they really want to go after that they think is valuable and they want to do it in this way. So the problem with spaxs are they're fundamentally misaligned incentives from the very very very very

start of these things. So basically the spa raises money by sponsors, right? So they raised $250 million from sponsors with no operating business whatsoever. And it's up to the management to find a company to merge with that actually has operations, right? But see, the sponsors typically receive like 20% of the IPO at a really nominal price so they can flip it during the IPO. So in essence, they are locking in returns from the get-go because they can basically sell day one, right? And so they can get returns. And so it actually makes a lot of sense for the sponsors of the spa. But the problem is the people that actually buy shares when it goes public are kind of left holding the bag. And that's exactly what happened during the first round of spaxs because ultimately like 90% of spaxs were below their $10 price last time. 90%. Right. So and and part of it was because they absolutely like these companies were not really real. They had absolutely ridiculous forecasts applied

to them and ultimately just they just all failed for the most part like 90. However, DraftKings, Virgin, Galactic, so they were really successful spaxs, right? Uh DraftKings was a unique situation though to be honest. But most of them were down like 40% after 6 months and 60% after one year. And so what in essence the original sponsors made out, but the rest of the shareholders got screwed. And there's a lot of reasons for this and this is where it gets really boring. And then you have to compare the IPO to the SPACK process. But fundamentally there's just no support from shareholders. No one knows about this. The investors don't know like these traditional investors that hold stocks don't know anything about it and they're built on terrible fundamentals. So anyway, that's a spec. But I think what Excel is doing is is quite a bit different it seems. And and I'll do a little bit of digging and see if I can find out anything specific on this. I got nothing to add other than Appch charge's new chief strategy officer is David Steltzer, who's Exola's former president and chief business

officer. So, all right. Um, let's jump into another very weird investment news. So, a Swedenbased gaming and esports group, Fragbite, has divested their French-based mobile game publisher, Play Clay Digius, to US-based VC gaming fund, Griffin Gaming Partners, and all this happened for about€ 10 million. What is this?
I have no idea.
Yeah. Wh why why is buying a game publisher? Is this like the like when does A16Z do publishing? Is this like let's go let's go farther down the funnel.
None of these guys should be in anywhere near this [ __ ] dude. Like like I don't understand this at all.
They're operators. They're operators.
I honestly believe that these guys are flushed with cash from investors and they just need find places to park it, dude. Like they just nowhere else to go, right? So they're

like so desperate. I don't even know why this would make sense for a venture capitalist. like the type of returns you can get from a publisher.
Do you know the games that Play Digits publishes? It's very specific. So, they take indie Steam games
like Northguard. And if you haven't played Northguard, you are literally stealing fun from your life. So, download Northgard. Anyways, they get games like North Guard onto mobile devices. And these are paid games. These are not even like Apple games. That's it. That's their portfolio. It's essentially like Steam games. It's It's really weird. So, I think this company must have been like a gold mine during Netflix 1.0 era when when they burned through billions of cash and essentially took Steam games that were ported to mobile games. But what now? Like, who needs a ported indie game on mobile device? Like, I I I don't know. It's maybe it's a hedge. Yeah, it's a maybe

it's a h maybe it's a hedge when EU destroys freeto play industry and and we go back to like 2010 then then it's fine. And I was thinking about like Griffin Gaming Partners, they have a lot of money. Their fund too that was raised during co time were $750 million. This is the biggest fund ever raised individual fund for gaming bigger than A6Z that was only 600. like Griffin really collected money and you know mobile game valuations are down web 3 is in the outouse there are the X- Riot and ex Blizzard employees that prove that they shouldn't be running startups and those got investments from Griffin as well some of them so you have to make some bold moves and maybe this is a bold move you get an a publisher from M player France that makes indie games and you buy the suckers maybe this is like a 3D chess and they will sell it to to Saudis for like $600 million, then that would be great. But yeah, it's a tough

point, especially for the likes of Griffin that have so much gunpowder. You know, A16Z games became a Y Combinator that funds drones and and all kinds of fun technologies. So maybe Griffin needs to go to I gaming and betting. I don't know what to do. Like this is it's a tough pickle for them. Speaking of tasty treats,
my segue was going to be I may not need indie games on my phone, but you know what? I need bubblegum trolls, grumpy cakes. I can't think of a better way to say that. Like, we joke about sweater weather and fall and like that's also the the time where cuffing season starts. So, I was like, "This book came out at the perfect time." And what book are you asking we're talking about? So, Candy Crush and full disclosure, I used to work at King. They came out with a cookbook and all of the kind of in-game characters and these fun like kind of the boosters and obstacles you see have been turned into recipes. So if you know you have like a Netflix and chill night, you can have a cook and crush night

instead and then bake all these wonderful things. I thought it was funny. I went down very quickly went down a little bit of a rabbit hole. This is not new. There must be like kind of a little um an author group that specializes in this because there's a ton of gaming franchises that literally they hit a success and then they moved to cookbooks next. But I it made me giggle and if you're looking for something to do this winter, there you go. We got cupcakes and licorice and all the things you could possibly want. There's actually something important here. Like Cranny Crush didn't come out of Sweden for no reason. There's actually like cultural context. There's this thing called lurus goodies which is like sweet Saturday where everyone goes to the supermarket and loads up candy as a kid. Like you're supposedly not supposed to have candy during the week. When we talked about Sweden being a conservative scop, this is what I mean. This is like a religious ceremony to do this.
And that's like immortalized like sweets and candies inside of the country. And like the Swedish family eats one kilo of candy per week. I just want to like

declare that. That's about four to 500 gummy bears or 20 to 25 lollipops. So, I'm I'm not quite sure it has achieved a public health benefit. This is a real thing. Like all the movie theaters, they have those containers where you weigh the supermarkets have this. Like, it's not an accident.
It seems like it's very fitting for this brand. Then I can't I can't figure out how it would the same would apply for like the Battlefield cookbook cuz I don't know how that would how that would apply. I don't think they have Sweet Saturdays for that. But then, yeah, this is awesome. It seems like it's a good match.
It really is. What's the equivalent in spi cyprus there, Mr. Philip Black? Is it hookers and blow?
A hash probably. Uh,
hookers and blow, dude. There you go. The sugar crap. All right, moving on. Battlefield launch.
Candy Crush. Okay.
All right. Battlefield crushing it. Absolutely destroying it right now. I think the overall number seems right, but his PC Steam shared just seems ridiculous to me. But what do I
50% about 56 60% Steam compared to consoles.

No. 65% 66% Steam is what he said which is ridiculous, right? That's just not that is not accurate. That can't be accurate. That's never been accurate. Like maybe 30% 40% max, you know, a week one, right? And it'll peter out over time. But anyway, doesn't matter. The fact is like it is doing very well on Steam, right? They had 1.8 million pre-sold on Steam. And this is not part of any subscription. This is not like some free-to-play version. This is actual like product that's being sold for $60. Like this is like real numbers, you know. I think the PC audience is likely ultimately 25 30% maybe tops out at 35%. The PlayStation is going to be the biggest platform on this. So I think this probably closer to 7 to 9 million units week one and then likely get up to 12 million by the end of their fiscal. this is on a really good shape to not beat Call of Duty necessarily, but get [ __ ] close. But again, what really matters is retention and, you know,

maintaining the audience, and that's going to be the real test when Call of Duty comes out. But so far, they've actually executed flawlessly on this particular deal. They spent a [ __ ] ton of money doing so, and the game is great. I don't know if you're playing it, but the game is really high quality. There seems to be no issues with all this traffic.
There's the EA problem, the EA app. uh you couldn't you couldn't get in if you purchased it through Origin. They fixed it very quickly and they issued I believe Battlefield tokens or battle pass tokens
first one
smooth launch is no easy
especially especially in Frostbite.
Yeah. I mean but they had like years to like optimize around Battlefield 21 2042. So
no yeah sure that meant very little from Battlefield 5 to Battlefield 2042. That was always the internal thing. We've never had this much time to plan.
All right. What what are your thoughts here, Phil? My first question would be to you. So when you read these numbers, do you think this makes it more or less likely that it beats Call of Duty based on the results you've seen? Does it give you more or less confidence?

Fundamental problem is it's so hard to tease out a like a real comparison, right? Because the audience is going to be bigger for Call of Duty, right? But the dollars spent might be higher on Battlefield, right? because of the [ __ ] subscriptions and all the free-to-play stuff that's going on, you know, like all the the freeto play modes. It's almost apples to oranges at this point given like all the complexity around it. I I I think that's fair. Like I actually don't think there's a big trade-off in like a given player choosing between the franchises. We talked about this on the podcast, you know, we did a deep dive on the Battlefield, but like Battlefield Strongholds is really Europe, Germany, France, you know, Call of Duty is more American and I did think they tried to do more things to get the game into an appeal state for Americans like setting it I think in New York was a was a good call like using some of that imagery we talked about. Problem I have looking at these numbers is the retention problem you issue you talked about like when we look at DAOU like that curve is bending.

We're looking at Video Game Insights right now, which by the way also doubles down on that platform share, Eric. Same platform share they're reporting same Steam around 60%. And so we're already seeing the curve bend for daily active users. I expect there'll be a bump this weekend when there's like people have more free time. I think they'll sell some more copies. The other thing that I think is important to talk about is when does season 1 launch? And so right now season 1 for Battlefield 6, it launches October 28th, which is 18 days from launch. That's pretty good period to drop the second piece of content. And this is always a question internally for AAA is like, do you actually hold back content that you would have shipped in the base game for the first drop? It's like a very great economics problem to have. And I think it's totally the right decision to hold back content. And the content cadence here is larger than it's been in prior games. So they have a season rapper, which is your traditional 3-month season wrapper, but they're doing content drops every month with inside of that 3-month season rapper. So, they have Rogue Ops, which is what I

mentioned, dropping October 28th. And that includes a new mode called Strike Point. Let's see what that is. If that's an extraction type mode, it's a bunch of gameplay items, which by the way, guns have been rare for Battlefield to ship in post content updates at this pace and at this scale. Maps have been traditional, and they do jack [ __ ] in terms of retention. We've always tried to get away from this, but they still are having these monthly cadences. let's see if this is just like them shooting out of a barrel and this will start to slow down and this is all content they've held back which again I do think is the right decision maximize the value of it but I do think like there's some upside in terms of retention but I still just don't see like the mechanical solution that's going to improve like coord retention like how is the game changing fundamentally from a core mechanics perspective that makes it different than even you know Battlefield 5 Battlefield 4 was always the game that retained the most and it's because we ship so much [ __ ] content that to me is the big question is like what is going to be their content pace and then ultimately how does portal play out. Remember that's the UGC mode. I think that's a huge cornerstone of this strategy that I think has gotten lost in

the shuffle where the engagement tail will come from. That's again TBD. So I I actually end up a little bit more likely this will outsell Call of Duty. I still just don't think it's going to retain. The reason we can't do comparisons here is because Call of Duty moved to Call of Duty HQ skew under Steam and all these different platforms. And not only that, War Zone, the free-to-play product is included. So like doing DAU comparisons, it's all useless. It's impossible to do these days.
So I don't know if we're ever going to get the answer, but I I end up a little bit more likely it'll win on copies, but I it'll never win on users, at least in the state.
Yeah, I think it wins on dollars, right? But doesn't doesn't win on users. That's kind of my guess at this point, right? About dollars.
What happens if it beats Call of Duty? I'm I'm just curious. Like is it is it like the turn of a tide?
It means literally nothing.
It doesn't mean [ __ ] because the next COD. Yeah. Okay.
The real question is what their longer term plan is with Battlefield. Are they going to release something every year? Are they going to have like a cadence of like every 18 months? I don't know. I have no idea. Actually, I should know this, but I don't. Now that EA is not

public, I don't give a [ __ ] right? Yeah, it's a question of cadence, right? But if you know that Call of Duty is coming out with a game next year and the year after and the year after, the year after, like, it's still going to be hard really hard for them to compete against. But what I think will ultimately happen is that Battlefield will win its share of users and keep them for a long period of time, more so than they had before with Battlefield 20 with the last Battlefields, right? Like at least you can predict that to some degree. Don't you agree, Phil? Like they will carve out a certain group of people that will keep loyal to Battlefield.
What does What does that mean? That's such an unc that's such an underscoped statement. Like of course there'll be some people who play Battlefield. What does that mean? Is that 100,000 DAU? Multiply that by what? What's Give me numbers. Well, I'm I'm No, I'm No. Okay, I get you. I get you. No, no. I'm assuming that we'll be at a lot bigger scale than we have been in the past. Like, if we have like four or five million people that are playing on the regular, like that would be much bigger. Here's the problem. And Call and Call of Duty has this problem to some extent, too. People are still playing old versions of this game. And theory of War is what drives a huge segmentation the player base. I only want to play World

War II. I only want to play modern shooter. And like the Battlefield formula is the same [ __ ] It's the same [ __ ] every single game just in a new theater. Like there's a formula to this. And the whole thesis is like why are we rebuilding the same [ __ ] over and over again, right? That was the whole move to Call of Duty Engine and platform. We're just reskinning [ __ ] And so the question is like can you ship a single skew that has stability? And I think Battlefield Portal is the cornerstone of that strategy that makes this a live service, right? Cuz it finally combines all the theater board. That is the big bet I would look at is like how is that feature developing? Is that retaining? Because there are still people playing Battlefield 5, Battlefield 1, and Battlefield 4. doing franchise weekly active users was fascinating when I was doing reporting for the franchise.
This is the old problem with this metric though like MAU DAU that's irrelevant, right? Like what are they spending money on? Like I mean it like I don't care if like people are retaining if they're not spending, right?
Yeah, it's totally fair. We we know but but they have blueprints. Like they have blueprints, Eric. They can play they can

sell the Call of Duty gameplay, horizontal gameplay. They have attachment points now. That's a better system
than the fixed attachment slots. I think that's what you should be analyzing frankly folk like going forward is like what monetization hooks do they have that are better and differentiated than Call of Duty that'll keep players not only engaged but also
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All right, let's switch clips from Call of Duty to something totally different. Woo! We got Magic Match. Okay, so sorry.

I'm going to steal your thunder a little bit, uh, Phil, but feel free to jump in. So, we have a new game by Jim City, Disney's Magic Match. You know, I I came in kind of like ready to kind of be like, ah, but there's a couple things it does really well, but then there's also a lot of things that's missing. So, as you can see, standard match 3D game. This game is fully launched. It's available in all countries. There's early data and sensor tower. It's not a super strong launch. I benchmarked it against kind of the other match 3D titles when they went out. And I think that's mostly cuz like again, circling back to themes here, it's a little bit late to the party. This casual subg genre is kind of already popped. And so if you want to come in as a strong player, you got to come in with a strong thesis. As I feel like I'm quoting Phil, maybe I'm channeling too much, Phil. Match Factory, as a reminder, was the strongest game in this category. Um, and as just a refresher, it launched in 2023, end of 2023. Soft launched in um October of 2023. So again, this genre's

been around almost actually now it's October 2025, 2 years. So, you can see here, I was just looking at the revenue per download uh compared to Launch Date. Match Factory kind of comes in pretty hard. What you can't see here, it looks like Triple Match 3D is performing better, but if you look at overall revenue, it's Match Factory. But those two are kind of going head-to-head. So, pros playing this game, it's polished. I've actually compared Match Factory and Match 3D side by side. They created a more polished version of what Match Factory did really well in terms of mechanics. So, I'll give them that 100%. But cons, and this is the part that drove me crazy. So, I'm playing this last night. I played the first 50 levels, and as you can see, when Match Factory 2 came out, it was like it was this spitting new amazing. Um, and now you can kind of see the polished level. They didn't they didn't innovate on that polished level going back. So, playing these games, I'm like loving this Disney all the Disney throwbacks. But then I open a level and the play the Moana level and I open I start to play and I'm

expecting to hear like and the sun and the sea and the oh my and all of these
we're not doing that. We're not doing that.
Yeah, we are. I Well, fine. You know why I have to do it? Cuz Jim City didn't. So if they came in with these songs, I thought they'd be leaning more into the music for these IPs. Like, and then they have they have great quotes like the Aladdin quote. Like, I assume they have all those tracks. Why didn't they put those in? That would have been a great tie-in for parents to play with their kids for, you know, for people like me, millennials going back and like, "Oh my god, this was my childhood." And for kids to get really into the music. So, I thought that was a real a real miss. So, Gym City, if you're listening, find a way to get those IP rights to get the songs in cuz like then you then you don't have to listen to me sing them.
Yeah.
So, yeah. So, Phil, did you break out into song two playing?
Not not quite. I actually thought this was this is an interesting I I wanted to talk about like 3D match cuz like ever since we talked about Match Factory, I

mean that game has exploded. I think it was, you know, around $200 million run rate. Don't quote me on that. And it's like really this this 3D match genre is starting to figure itself out. Like don't me wrong, still a small sub genre pair. Like Match Factory is totally doineering in terms of like revenue as you pointed out, but like when you enter these subg genres, there's all these like new paradigms. You can't just copy what you did in other versions of match. And the reason you can is because the dynamics are so different. So like normally match three economics are how many times can I get you to fail state and then what can I convert you on in terms of fail state? How do I raise that percentage? So like how many level ends can I get you to? How often do you fail where you have the out of move screen which is 95% of match revenue? And then ultimately how can I increase your conversion rate for those extra moves? So like that's where win streaks, super light ball that [ __ ] comes into play. And so when you're operating in this paradigm, remember fail states are so different because a lot of the times you have timers which is how the fail condition happens is that time runs out. So that's one fail condition which is completely different than being out of moves because remember you can go

through out of moves very quickly. And so this potentially reduces the amount of end fail states you have. And you also have this board where when you collect objects when three of them are the same object, it clears parts of the board. And so when you overflow the board that's a second fail state where you can buy things. So so the entire economy model completely changes for that which I think is really interesting. And there's these design constraints because remember in match you have new objects dropping. You have new colored tiles and so a lot of the innovation that like Royal Match did on adaptive drop was doing things like reading your board state, understanding your probability of success and then tweaking the color weight. So like, okay, if we tweak making red more likely to drop when there's a board clear, then oh my god, like their win state or win probability will go up. So then we can kind of push them to near loss and near win and that will increase conversion, right? Obviously, if you buy five extra moves and you know that will put you over the top, great, you win. And so in match in this 3D match, remember there are no new objects that are entering the

field of play. You're only removing objects. So you like lose this whole adaptive drop [ __ ] which I think is like really important optimization lever and so I think the genre has like been trying to find itself and I think they're getting more interesting answers like one of the things you covered was UX and what we see on the board here is that they have a really dark background and that was something Matchactory did which is to increase the prominence and the contrast of the images because you need to see depth here for the first time cuz it's 3D shadows matter colors matter like all those things are the things that the genre has started to figure out and so like let's see if This is remember Disney Solitaire like I didn't think that IP was going to work. I didn't think that game was going to work. That thing is that thing is [ __ ] slaying right now. My only confusion is like why does this get shipped to Jam City versus just giving this to the Match Factory team in a symbol? Like that I don't understand. Why not go run the playbook they did for like they just reskin domino Dreams? Why why didn't you why would you do this [ __ ] for this? And like I know Jam City did like Emoji Blitz, the Disney game which has actually done like 200 million

in revenue. Or the Tsum Tsum people maybe. Uh you know the Taiwanese one that's made a [ __ ] ton of money. Like I don't give it to Jam City. Like I know Jam City's got Cookie Jam but that's like dead. That was like dead a long time ago.
I feel like Jam City does a lot of IP work though. Like if I look at their portfolio and just full disclosure, I haven't looked at a little bit but the last time I did they're not like pushing the boundaries in new genres. I feel like this is a safe space for them. They kind of they look at what's popular. they can maybe slap an IP on it and then they kind of port out a game that is a mechanic that already works. This is why I think the innovation is low in this game. So, usually when I play these for for this uh for the podcast, I try to I try to map like figure out how many how many levels can I complete without failing. And what Phil says is entirely correct. The revenue is based in match games on endgame purchase. That's like kind of like the known the known fact for this. The first time I failed, which would trigger an endgame purchase, was actually I didn't. I had no fails in the first 51 levels. My playing 51 levels took me an hour and I was looking at the revenue chart. There's probably a very big reason of course anecdotal very big

reason why their revenue is not where it should be. But balancing this is difficult.
They have to make difficulty as you say by timers and then have you ever seen any of the levels in match factory where everything's pink and then you're just trying to parse the objects by shape? Like let me tell you that gets the difficulty level so different between this type of game and a master game.
It's about like it's it's about like your You're you're flying [ __ ] to your board. It's clearing really fast. You're under time pressure. Like flow state is more literal here. It's in Royal Match. You can pause, right? Like you can pause if you want to and examine the board state and plan. Here, you can't really plan. You just got to you just got to go.
This is dexterity. And if any, just a pro tip advice, if you're going to play these types of games, I highly recommend using a stylus. That is my cheat. That is how I picked this up so quickly. I have to my finger. I don't have dexterity. I can't play Call of Duty in those games. I get sniped immediately. keyboard versus controller.
Yeah.
Oh, I can't play a mouse and keyboard either. I need I need a controller.

All right, let's take this home by breaking news if if possible. I I just received something that Crest would absolutely love. So, a funding round led by Coastal Ventures and General Catalyst participation from Rain. So, essentially, this is a new AI company called General Intuition. They raised $133 million in seed. And who do you have here? Crest's favorite person.
Oh, no. Oh, the the the game investor who's not a game investor anymore.
No, he's a game investor. No, more inspire. Lance is one of the people who's on this. So, he's one of the co-founders. He hasn't left Lightseed. This is going to be his additional gig in addition to the 70 hours he pulls for for Lightseed. So, good luck for that. He's a superhuman. He can do that. But we have Pimit who's a CEO of metal essentially started a new AI company and raised 133.7 which is must be some kind of a nerd number that we should know why. But um yeah, good luck for them.

And I think the CEO is coming in on the podcast. So that's the breaking news. It's under embargo, but I think this ends.
Is this one of the guys that wears the uh the uh what are they called? The vests. The vests with the little decal.
I don't know. I don't know.
Don't look at me. I don't know, but that's a lot of money. That's
Chris. Do you remember the whole spiel after GDC?
No, you're talking about a ream.
Why are they all wearing black shirts, though?
All right, let's let's cover this next week when I actually can look at what this company does because it sounds completely preposterous and $133 million.
You don't have any general intuition about it?
All right. All right. Uh, everybody, thank you for listening.
We're done.
Next week, we got Jen back and we'll be much more professional and maybe even proper internet. So until then,
anime showdown.
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