TWIG #355 Apple’s $2B Blow, Halo’s PlayStation Leap, and Pokémon Pocket’s Mobile Masterclass

When people see this Pokemon game, they're going to be shitfaced. [laughter] Hello everyone and welcome to This Week in Games 355. I'm Jen Dano back in the saddle still and I fill the marketing and publishing role in the podcast. Today we have in first chair and not in first chair is
Eric Crest Strategy Investing [laughter]
and Phil Black monetizations are second chair.
Phil, lovely to see you. Our first podcast in forever. I'm so excited. Ditto.
All right, here's what we got on the episode today. Apple is in $2 billion worth of trouble in the UK. Halo is coming to the PlayStation, signaling the end of exclusivity in the console wars and the rise of the 30% margin targets. Oof. Massive Amazon layoffs hit 30,000ish people and decimate the games

group. Battlefield 6 keeps pushing with new content ahead of COD's mid- November release. And happy one-year anniversary to Pokemon Pocket TCG. It's going strong. Apparently, 150 million downloads and 1 billion in revenue according to App Magic. However, when I look at Sensor Tower, it's a little bit lower, but in in any event, it's done well. All right. So,
people will disagree, by the way, in that segment.
Okay, that and that's fine. I I'm reading the article of the news that was reported. I looked at it. Yeah, let's Okay, we'll fight. That's fine. All right. I had jury duty and so not I realized that in Europe like it's not necessarily a thing. I was talking to my friends in France and they're like, "Oh, we don't do jury dirty. Like, what is this thing?" And I was in the box. I was juror number 11 and luckily they asked me you know if you or a family member has ever you know experienced a crime and unfortunately I had to say yes and the crime happened to relate to what the

case was about and so I got dismissed yes I didn't have to do my civic duty but it was kind of fascinating. Have you ever been on jury duty before?
I did it once and it was the stupidest [ __ ] case ever. It was some homeless guy that attacked another homeless person and in theory stole money from them and the whole case was absolutely ridiculous. [laughter] I mean, and we went through this whole thing and he was not guilty because there's no proof at all. Anyway, it was so dumb. So dumb.
Oh yeah.
The problem is that like you never get in anything interesting. It's always like generally it's mostly civil and like anyway like
oh well this would have been the defendant flashed or indecent exposure and so it was like sexual in nature and they're like
that's stupid as well. What kind of case is that? I want to murder you know I want like [laughter] something interesting.
I had a friend when I was at Hasbro she was on a murder trial and she was gone for like three months.
That would be cool. I mean, it'd be boring, but it' be an experience that

you could talk about, right? But listening to some one homeless guy [ __ ] at another homeless guy, it's like, [ __ ] that.
All right. So, talk to me about Jacob and driving away from you.
So, Jacob has finally had his like, I'm the [ __ ] out of here moment. So, he got his driver's license and I swear to God, he left Wednesday morning. He didn't come home till Sunday. Like, he was just driving all over the Bay Area. It was insane, you know? And Jacob is like a homebody to some degree. So anyway, he's having his freedom moment. Good for him. We did go visit the daughter at school last weekend, which was amazing. And the fact is that she's so goddamn nice, it's almost eerie, you know, after suffering four years as a teenager in high school. She's now finally appreciating her wonderful parents. And I guess it's true, they do appreciate you after you they leave. And so we're feeling that. That's good.
But yeah, you know, that's the update. You're an empty neester. I I really want to cue all of the nano banana images of you like fly, you know, like stuck in

the nest. But you asked us to connect with your daughter on LinkedIn and I looked at the picture and I'm like, "Wow, she's beautiful. She's defin Like what happened?" Cuz she's not related to you.
Rude. So rude.
Yeah. Yeah. She definitely got the white jeans. [laughter]
She got the white jeans. Yeah, she definitely got the cracker jean, dude. Okay, let's go into shills. This is kind of interesting. We're building out what we're calling the deconstructor of fund roundt events. It's an opportunity to get around 50 to 100 people together to exchange ideas. We're we're trying to do it a little bit more for like product marketing or product people. Um it doesn't or it could be gamedev if you want, but we want to set it up all around the world. But Chris, you and I are going to take command of the West Coast, LA, San Francisco, Seattle. We'll, you know, tap Laura for Seattle and Vancouver. So, if you or your company want to actually host us, we have a bunch of friends that are offering up company space to have us come, we'll do all the content, invite

people and run it for you. So, that is something. Reach out to us on Deconstructor Fun Slack channel. Mishka actually interviewed Ben Federer from the former CEO of Take 2.
That was a good get. Yeah, it was a I was I haven't gotten all the way through yet, but dude, this guy is smart. I was like, what is what? Why did he agree to talk to Mishka? I'm just kidding. I love you, Mishka. But yeah, so big interview there. And then Phil, you've got a bunch of podcasts coming. I'm super excited for Shooter Podcast. Not
Shooter Monthly. It's been teased. It's been rumored. The rumors are true. Out this week, maybe early next week. still one of my favorite podcast crews. It's just like an Avengers assembly of podcast or excuse me shooter veterans. And I think we got to some really interesting insight in this episode too.
They're going to be dropping they'll be dropping monthly and there's no better time for shooters than the holidays. And by the way, just just so people know, we're covering mobile, too. It's not just HD. So I think that's been another

interesting twist. A lot of mobile experience in that crew, too.
Yeah, the your first one was really well done. I think I I gave you public kudos for that. So with Chris Sides and the other there's another Chris, right? Who's the other guest or
Chris Anjos and there's a newcomer on the podcast, Mr. Feras, who I used to work with at DICE and is now over at TTK Games, which is where a lot of the ex DICE veterans have gone.
Nice. Okay. And then I thought we were perfect on corrections, but Chris, did you did you get a little backlash?
No, we're a little bit, but we're we're we're we're totally perfect. I did hear a few folks about the Morid Steel. It is pretty clear that he is not an operating partner, which makes a lot of sense. So, he still continues to be part of the grift at Lightseed, you know. [laughter] So, it's like,
oh man, you are so mean to him.
You got to do what you got to do, you know.
So mean.
So, he knows where the money is. He knows where the bacon.
He does. Yeah. The intersection of AI and gaming.
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cheat code for mobile marketing. Pinpoint attribution, real-time insights, and analytics that actually make sense. Stop flying blind and start flying smart. Apps flyer because your data is your best co-op partner. Let's get going. So, the first story is Apple faces up to $2 billion in damages. So the competition appeal tribunal, the cat in the UK found that Apple abused its dominant position in the iOS app distribution and inapp payment market orchids between October 2015 and the end of 2020. Specifically, the tribunal said that the developers were charged excessive and unfair commission fees, which is the 30% when a fair rate would have been 17.5%. I wonder how they came up with that number. About half of the overcharge on developers was estimated to have been passed on to consumers. The ruling would expose Apple to damages up to 2 billion for millions of affected UK

users. So Chris, tell me a little bit about what Apple is doing to respond to this. I mean, I have to imagine they've got lawyers around the world now dealing with this stuff.
Yeah, I mean, they're obviously planned to appeal that decision. They called the ruling a flawed view of the mobile app economy, but the place of the damages like hearing is supposedly happening in the next couple weeks and then then they'll figure out how much they're going to get charged, you know, like again this is another moment in the you know the UK and EU like battle against Apple and big tech in general frankly and but kind of like my thinking here is that two billion is [ __ ] mice nuts for Apple. I mean like two billion like dude they got like $65 million in cash on the balance sheet right like this is nothing for them right but I still think the wagons are circling and changes in the app economy are in inevitable and they're going to have to reduce the fee right yeah if even if they split the difference and go down to 20 right like

you know I think that would make sense it just seems like that is the inevitable thing as I said a few months ago I you know the Google guys were kind of like giving me that wink wink nod nods where they're headed. So, you know, that I think is seems likely ultimately.
I I don't want to be like it's unfair, but isn't it a little unfair to come back and hit them with this price tag like so late? Like this is 2015 to 2020. Did they ever like raise their hand this tribunal and say back in the day, hey, you guys need to do something about this? I don't know. It It feels like it comes out of nowhere. I don't know, unclear. Maybe they I don't even know if it's maybe it's arbitrary where they what dates they set. They just need a calculation based upon the certain time period. I don't know.
This is the stupidest way to do regulation. Like having a government tribunal decide on price controls is the absolute worst way to decide how to move forward with the app store regulation. As Tim Sweeney has been advocating, the solution here is not price controls.

It's the ability to allow competition and allow third party app stores like you can with the DMA. That is the solution. And that is what regulates price. You do not want government tribunals setting up price. That is a dark, dark path. Do not let our anger against Apple cloud our clear judgment. Bad solution. Not only that, the thing I don't understand about this ruling,
it doesn't change the law. Like they can still charge 30%. They just get a fine.
That's kind of my point is like where's the law that they broke and like why are they getting charged? This is why these fines never work particularly for big tech because they got un endless amounts of cash to like throw at this [ __ ] you know? Like
it's not a fine, it's a tax. It's a tax. This is how the EU is
That's essentially what it is, right? It essentially just becomes an ongoing tax where you can basically have case law continue to
Okay, now now I'll file again. Now I'll file again. Now there's some common law, some excuse me, case law building up.
Well, anyway,
all right.
The winds are changing, you know. Yeah.

So, Crest, for you, I wanted to, you know, cue some sort of like the song with the trumpets when somebody dies. EA's last earnings report. It's not really even an earnings report, but since the acquisition is in process, EA has basically suspended their quarterly analyst calls and is no longer issuing for forward guidance. This is so sad. No specific Q2 performance metrics were disclosed for the Sims, EA Sports, FC, or Skate. You know, shockingly, they were not disclosed because they're not very good likely. They made some general references to successful launches, but we all know that the challenges there. So, netbookings look to be down 13% yearonear, which was due to not comping college football. Madden 26 looks to be seeing some growth year on year. No new Battlefield six numbers from them besides the they sold 7 million copies in the first three days, which was October 10th to 13th. I was a little surprised to hear how well Apex is doing. So, congrats to the smart people

on that team whose work looks like it's paying off. Apex returned a double digit at bookings growth year on year after EA had been forecasting a 40% annual decline earlier in the year. So, Apex turning it around like that was the part I was like I have a bunch of friends there. So, I was like, you know, good for them. Any thoughts Mr. Crest on, you know, the end of an era?
This is the interimm report. if they were like trying to, you know, really sell this. It's like FIFA's up, Madden's up, Apex is up, and Battlefield's crushing it, you know? So, like if they were like a publicly traded company, they'd be [ __ ] screaming at the top of their lungs about how well things are going, right? Despite the decline because of the tough comp for the football game. So this was in in essence a great earnings report because I'm sure they would have raised guidance for the remainder of the year given the performance of Battlefield. But because they're no longer a publicly traded company for all intents, it doesn't matter.
Yeah. Yeah. One of the sad things about that acquisition is it's, you know, one

of the ways that we can keep our finger on the pulse of things.
Less visibility. Publicly traded names give less publicly traded names mean less visibility into the market. All right, let's move on to something that is publicly traded and kind of interesting. So,un Halo. So, Halo is coming to PlayStation. It is truly the end of Xbox exclusivity. Halo campaign evolved. It's a complete remake of the 2001 Combat Evolved. Launches in 2026 on PlayStation 5, Xbox Series X and PC. First Halo game ever on PlayStation after 25 years of exclusivity. This is the game that brought me back into gaming on console just to be I remember sitting there with the four the four screen on a big giant TV playing with my friends. So, it's fun to see it back. It's weird to think it's on PlayStation. Halo Studio community director confirmed Halo is on PlayStation going forward, meaning all future Halo games will be

multiplatform, not just the remake. Uh, the game features four player online co-op with with crossplay, three new prequel missions, and nine additional weapons. I did see some videos. It does look better, which is nice. So, we recently covered Hell Divers coming out of the Halo ODST content. Uh, this is the first time we're seeing the actual game on PlayStation. I think we need to get out our white surrender flags. This is the franchise that defined Xbox. It's their Mario or Mario. Who? Got it. Did I just do Allora and say Mario? This effectively means that Xbox has surrendered the exclusive content part of the console wars. This is also a whole new lens to their campaign. This is an Xbox. If you've seen that campaign, it's like I think we need to put a PlayStation in all of those. This is an Xbox campaign because now it's on Play even Nintendo. On the positive side, maybe this is going to reinvigorate the Halo franchise, give it some life now that they know they've got bigger numbers that they can do. But you

know, however, any of this needs to be considered with what Sacha Nadella is out there saying about a 30% margin target. So, Phil, do you want to hit this clip? Let's listen to him.
Biggest gaming business is the Windows business. To us, gaming uh on Windows and of course, Steam uh has built a massive marketplace on top of it and done a very successful job of it. So to us the way we are thinking about gaming is let's first of all now we're the largest publisher. Yeah uh after the Activision. So so therefore we want to be a fantastic publisher. Similar approach to what we did uh with office. Uh we we're going to be everywhere in every platform. So we want to make sure whether it's consoles whether it's the PC whether it's mobile whether it's cloud gaming we want or the TV. So we just want to make sure the games are being enjoyed by gamers everywhere.
Yeah. Second, we also want to do innovative work uh in the system side on the console and on the PC and bring you

know it's kind of funny that you know people think about the console PC as two different things. We built the console because we wanted to build a better PC uh which could then perform for gaming. And so I kind of want to revisit some of that conventional wisdom but at the end of the day console has an experience that is unparalleled. uh it delivers performance that's unparalleled that pushes I think the system forward. So I'm very looking forward to the next console, the next PC gaming, but most importantly the game business model
has to be where we have to invent maybe some new interactive media as well because after all the gaming's competition is not other gaming. Gaming's competition is short form video.
Yeah.
Uh and so if we as an industry don't continue to innovate both how we
just outraged [laughter] I mean, he really got almost everything wrong about our business in like one quick clip. You know what I'm saying?

Like, I think everyone's aware that he's expecting the gaming division to be super profitable with 30%. So, that that's the third thing that they've completely [ __ ] up. But clearly Microsoft has lost, right? Like absolute chaos at the company right now. No one knows what the [ __ ] is going on. Everyone's running around with their head cut off. management's being questioned. Like everybody I talk to that has any type of in information about what's happening in inside the company is just completely losing their minds, right? So anyway, the reason that Sacha kind of is off it is that first of all like merging PC and Xbox is exactly the wrong thing to do. The reason that Xbox exists because it was such an easier way to interface with this type of content, right? PC was a pain in the ass and it continues to be the pain in the ass. And when you actually ask about the Xbox Rogue Ally thing, the reason that thing is a piece of [ __ ] is because it still has [ __ ] Windows on it. You know, like Windows is not is is a deterrent. It is a pain in the butt to to manage

it. What Xbox does and it did as well as PlayStation and Nintendo for that matter is that they create a system that's dedicated to gaming only and makes it a much easier interface and an easier system to actually do what you want to do which is play games and that's the whole point. The second thing is that I've made this comment before too is that we are competing for time against Tik Tok and stuff like that which is totally true but the thing is that we're not competing against Tik Tok like the we are trying to build the best type of content to compete against Tik Tok and when you start removing the ability for you to have a console that like [ __ ] up your whole competitive advantage right of of a distribution platform of a really good platform for gaming and stuff like that. So you don't want to compete directly against something like [ __ ] Tik Tok because then you just become
garbage, right? Like and you just deliver your content everywhere.
You want to compete in the console market, right? You don't want to again don't want to compete against Tik Tok directly, right? So basically you want to become a global publisher is what he

said, which is complete [ __ ] Like what do you want to become? Sega, Atari, like 3Dio like that's what you're saying. You're basically getting rid of your hardware advantage and becoming a publisher. That doesn't even make any sense, right? And so you give out all your plat platform distribution advantage. So it's a complete backwards ass strategy. And then finally this profit thing is like 30% profits is ridiculous. Like I was actually looking this up. EA and Activision certainly were 30% like roughly around there, right? But 30% is an insane profit margin. And he got it he got the whole thing backwards, right?
Like profit margins don't fund innovation, right? You need to reinvest profit into your teams to grow innovation and revenue, right? So, it's the dollars themselves that are reinvested in the company that will actually fund innovation. It's not the fact that you're hitting a 30% margin target. That's ridiculous. And so, finally, like this is the thing I've been talking about for years now is like the reason they're in such a tough spot right now is because they weren't

working in a on a profitable model, right? They were being funded by Microsoft to do these [ __ ] stupid strategies like day one releases. And this is why they're in this predicament and why it's been so dramatic when they're trying to get back to profitability and they have to cut teams and cut people like this is exactly what we I've been talking about for years, right? And so they are completely on the wrong track now 100% in my view anyway. like this ubiquitous type [ __ ] going across all these different platforms, you know, competing directly against [ __ ] YouTube and Tik Tok and Netflix. [ __ ] off. Like, this is bad bad Guju and they're going to lose and it's just again, it's time to spin this thing out and and let them run on their own. I really respect Satcha and everything he's done for Microsoft, but he doesn't understand gaming. He doesn't know what the [ __ ] he's talking about. So,
I'm going to give you one more, Chris. There's an ad supported version of Xbox Game Pass service coming. It was confirmed last week that you know internal folks are testing it. Surely

this is going to be where they get the 30% margin. But you know while I'm kidding a little bit, I'm not totally kidding. You know, as Eric Seford says, everything's an ad network. So first, Netflix and the streamers are, you know, making I think Netflix is at over a billion dollars on their ads supported version of the Netflix service. So it's an inevitable that the you know hyper casual ad driven service is going to help boost the bottom line in a market that basically flatlined after the pandemic. You know how do you monetize all of those extra people that are sitting out there that don't want to pay the now remember they raised their prices and it's was something like between $300 and $400 a year if you're a gamer to get uh game pass the mode where you can actually play Call of Duty. So yes. So let's talk a little bit about shared time which is Tik Tok and short form video. So Yos Franjun in his super Yoast newsletter has this image which is from e-arketer which pretty much shows that the time spent versus on social

media and gaming which is social media time spent like 19% and gaming is about 13%. So people are spending a little bit more time on social media than gaming. And we knew this. We knew that short form video is growing, but the ad spend on social media is about 42%, and the ad spend on gaming. This is by brands spending their money on ads inside of gaming to sell their products. So you have 42% on social media and only about 3.7% on gaming. I actually have seen this number be more like 5 to 8% but still 42 versus you know between 4 and 8% is incredibly incredibly low because we don't have a lot of good ways for brands to spend money inside of our products and services. Chris, I know and Phil, I know you guys hate this, but this is a way to make some margin if it's done.
I don't hate this. I like money. I like money. Money is my highest
but this is I I I I actually I think I object to this whole kind of like

discussion in this way because the fact of the matter, social media is [ __ ] free, right? It's [ __ ] free and so it's ad gaming is not free, right? People are spending insane amounts of money. The fact that our engagement is that high
free to play. Well, [laughter]
I'm like, well,
I'm talking about console.
Yes. Yes. On
and on top of that, freeto play monetization is monetization. You know, social media, there is no freeto-play monetization.
That's not true at all. Tik Tok Tik Tok does four billion a year on their coin economy.
Yeah, you can spend money on the creators. Yes.
Let me take a step back here. The fact of the matter is that we are in a paid type environment, right? So, our it should be revenue share, not time share that we're talking about, right? And so when you start doing these metrics like this, these are meaningless metrics when it comes to what people are actually spending their money on, right? And the audience that you're capturing. And on top of that, it's conflating things, right? Because because the thing is that the console market is a premium market. $50, $500 device and, you know, three to

four games a year, right? Like that is a premium market. And so this is suggesting that you can layer on metrics for a primarily average ad driven business on a gaming market. You just can't, right? Because the gaming market is completely different.
What's a little confusing about this chart that I agree it's confusing. One is consumers spending their time or the white bars. So consumers are spending a little bit more time. brands are spending their money more in social media because you're to your point it is designed as a free service. It's just like Facebook. It's just like Meta. It's just like Netflix. Now, all of those are designed to support ads where the majority of the gaming business, especially on console, was not designed or built to serve ads, which is why the spend opportunity is much less by a brand. And so it's not players spending money, it's it's brands spending money. But you know, so I agree to your point.

We have a lot more premium spend, especially on console. You know, I've actually done a lot of looking into ads on console. It's very, very difficult to do because players hate it because they've spent money. They're like, I gave you my money. Why are you showing me an ad inside of something I I spent money on? So I do think what you're saying is absolutely correct. as more free-to-play hits console, I do think in and as cloud gaming, you know, or game pass streaming happens, you know, if they make unobtrusive ads or say instead of giving us $400 so you can play Call of Duty on day one, have this Game Pass adup supported model, I do think that that is a bit more of a value to a player. Kind of like a rewarded video. Anyway, sorry that was me going off.
What's your push back here, Philip? Where to start? So, first of all, this graph from you is [ __ ] [ __ ] E-arketer is your source. What do we mean by time spent? Is this of gamers? Is this the general population? I spent a I spent a lot of time trying to look

into time share, and it's very hard to get good data on this. There's something called the American Time use survey, and it's very hard to get good results out of this. So, I don't think we have a really good understanding of how time spent is changing between social media and gaming. I don't think we have a good a good view on that. And I think that's been a core question because it's not just Satia who's saying this to be some sort of clever CEO saying hey we're competing with short form video. If you remember Reed Hastings came out and said we're competing with Fortnite. So there's been all these entertainment CEOs that come out and say this. So it's it's not a new a new trend that people are concerned because at the end of the day there's 24 hours in a day and so okay we're competing for relative shares of this. But to your point Eric it's not just that. It's also Arpoo per hour, right? And that's a metric that's kind of been lost a long time ago to the gaming ethos. It used to be a thing we were tracking is, you know, how much does gaming monetize per hour per user? And I think that's much higher than these other forms of media. But I think this this this whole conversation about time use and short-term video, I do think it's real. I do think it's a real competition to us. But I think some of

the things people forget is that when we look at sensor tower for instance, we look at DAOU between Tik Tok, Royal Match, and I put in two other apps that I think gaming is not spending enough time taking as a serious competitor, which is the Meta AI app, which has AI generated videos as the way they serve short form video to people as well as the SOR app by OpenAI, which is the same concept, right? It's basically just Instagram reels or Tik Tok with AI videos. And so Tik Tok growth has actually been slowing and has kind of flatlined since about 2023, which I think is a good sign for us. And we see not so much growth in the Meta AI app and the sore app. I do know that Ben Thompson from Tetri used to talk about the fact that Facebook was kind of slipping in AI videos into their normal reels and Instagram as well as the core Facebook app and they were seeing massive success, but when they've diced it out into their own apps, they're not seeing this crazy growth. So, the only thing we've seen some uptick in is actually Sora, which is hitting around 1 million DAU from Open AI. But when you compare that to something like Royal

Match, already at 3 million DAU, and by the way, we're just looking at the United States. I'm not really seeing the numbers yet that suggests this is a real threat. And with Tik Tok not growing, I don't know. I don't know. It sounds like a clever thing to say, but I'd love to see some more growth here. I do think this is a looming threat. And I do think gaming has not taken AI seriously. Like we haven't talked about Elon Musk's attempt at gaming AI, which is coming and I do think we should be scared shitless about what he's going to do. He is a bullshitter, but as Benedict Evans says, he's a bullshitter who delivers. And so if we don't hop on some of this AI generated content, we're going to lose the supply side war. Certainly, Western publishers are going to lose the supply side war. We're not going to be able to keep up with the content pace and the algorithm that I think these AI apps can deliver. So, I'm kind of skeptical on the whole time use thing, but I am scared about AI generated short- form video. And I do think that's a threat we need to be taking seriously.
Okay, I'm going to try to articulate this a little bit better. Is that the time spent metric is not nearly as interesting to me as the money spent metric, right? And so, the audience that

we have in gaming is a premium audience that's willing to spend not only on premium games on console and PC, but also spend money in mobile gaming, right? which is a very small fraction of a percent of the audience that matters in
this quote unquote mass market mobile business, right? The reality of it is the people that spend is a very small fraction of a percent. So therefore, that's the audience that we care about, right? So all these looks that are [ __ ] on social media and not spending on mobile, like fine, take that audience. We don't want them. As long as we're servicing the audience that we already have and trying to grow that audience with better content and different content, that's where we can play and live.
It's all correlated. It's all correlated though.
All correlated. Time spent, revenue.
Yeah. It's and ads. If you've got, you know, 99% of people not spending money, wouldn't it be great for all of us to make money showing ads to those other

people?
We already tried this. We already tried to do e-commerce and games. It doesn't work. All the ads and games are other games. It takes you out of the gaming experience. We don't have high clickthrough. This is a a tried idea.
I just object to this whole idea that Satcha is putting out there is like they're trying to compete against Tik Tok. You're not competing against Tik Tok, right? You got to compete against console guys. Like this is this is not the business that you're in. You're in a premium business, you know? You're not in the chachki [ __ ] business, you know? Stop it.
Yeah. I I think they're conflating the challenge of share of time versus what is the content that is consuming that share of time and how do you develop an experience that takes that back and yes how do you in gaming develop a 5-second cat video that you scroll through in 2 seconds versus a deep you know now $80 experience in in console gaming. So, I don't I think you're right that we're conflating two different play patterns

or experiences that are asking for your time.
You're taking console as the comparison here because you're painting him as the Xbox guy, but you got to remember like they still own Candy Crush. They still have Call of Duty Mobile. Like those are closer substitutes to Tik Tok, especially for that audience which tends to be older female. That is a real trade-off. That is a real threat.
No. I mean, look. Yes.
You don't think that's a real threat to mobile gaming? You don't think those are
when you're when you're like whales are spending, you know,5 to$10,000 a year. Like that's who you care about, right? How many [ __ ] people are that, right? That's not the mass market watching Tik Tok videos and YouTube cat videos, you know? Like it's a misunderstanding of what the market is is what drives me crazy about these type of strategic decisions, right? As mass market as people play these games, it's not the mass market that's spending on these games. And that's for both console, mobile, and PC for that matter. So, we're still trying to cater to this audience and grow that part of it. But,
you know what was really funny, too, is I saw an article. I forgot if it was pocket gamer, mobile gamer.biz, that Monopoly Go is creating a chat app. It's

in soft launch somewhere. And so, Scoplay is actually trying to make an app that does exactly what all the other chat apps do. I don't know if they're trying to replace Discord. I don't know if they're trying to complain with short form video, but I was like, "Oh my god, now we are trying to directly add those kinds of features to us to it's to another app, too." So anyway, we'll look into that more when we, you know, hopefully get into this offline. All right, let's move on.
Let's Yeah, let's wrap this up and let's go to this topic. So layoffs are sadly back in the news and on our radar. We predicted that Amazon would be coming up with layoffs since they were likely going to announce all this before their earnings, which is what happens here. We are at the highest level. Amazon is reported to be laying off about 10% of its corporate work workforce, about 30,000ish people. Crest, tell us more about the games impact and go and drill into that a little bit.
Okay. I this is more from the press

release and I'll just give you my take but like so they're basically just restructuring the gaming division. This is what they say. They're restructuring the gaming decision to focus on things that align with their broader strengths which is streaming entertainment primary negation and the [ __ ] [ __ ] Stadia thing that they're doing. Okay. Anyway, so Hartman, who's I think been in charge of this for a while, basically said they're cutting roles at Irvine and San Diego and Central Publishing team, and they're emphasizing casual AIdriven projects, but they're also maintaining the partnerships with Crystal Dynamics for Tomb Raider and the Maverick Games with this open world. I think it's a racing game.
March of Giants. Is that the MOA?
Yeah, [ __ ] MOBAs. Okay. Yeah. So, I guess they're going to complete that game, too, which is crazy.
Likely these are all like licensing deals they can't get out of,
right? I mean, they're shutting it all

down, right? But they have these certain contractual obligations that they need to maintain and then ultimately everything's going to get shut down. They their gaming thing is over. Except for maybe this casual AI [ __ ] and and Luna, which is a dumb thing because the the Unity economics don't work. And what sucks for me personally is that Lord of the Rings is now the MMO is gone and the New World is likely going to get sunseted. They're not going to really support that anymore. And most of the reaction out there has been like, "Wait, this thing still exists?" Like [laughter] still. So anyway, I don't know. Philip, you disagree with my assessment? So, just to clarify, I was an Amazon game employee. I [laughter] was the Amazon game employee of one out of Sweden. So, just to give you a little bit more of a lay of the land, there's Seattle, there's Irvine, and there's San Diego, which are the main game development hubs. And there's also Morial, which is where the MOA March of Giants is being produced, and a lot of the XRainbow 6 team were hired and spun up there. And then, of course, we were trying to get Europe going. But, you know, King of Meat is on here, and we

don't need to talk about King of Meat. Before Kristoff came in, who was the ex CEO of Take 2, there was, I would say, like a a breadandbut Amazon executive who ran the division, and that's where you got Breakaway, Crucible, all the history we don't need to go down as complete disasters. Kristoff came in and started to make a real games organization, hired real games people. The problem is he basically moved to Germany and has abdicated responsibilities, and he's the only person who I think hates mobile more than Andrew Wilson, and so that all died as well.
MMOs were never a strategy, by the way. That just like sort of happened naturally. So, not only did you have Lost Arc and New World, remember that you also have Thrown in Liberty, which is the other Korean MMO, which by the way, Lost Arc and Thrown in Liberty make a lot of money for Amazon Game Studios. Those are very good deals, and they did a lot of really great localization work on both of those titles.
If you remember, there was the game from Japan that Capcom was launching the whole franchise around that got cancelled. Perfect Blue, something along those lines. I don't have it off the top of my head. So, Amazon Games is certainly not dead.

Irvine definitely got gutted, San Diego got gutted. I actually think Irvine's probably dead. Seattle lives on and Moral lives on. So, I think all that is really important to lay out all those additional pieces you're talking about, Luna, Twitch, all those things not a part of the core Amazon game studio, nor should they ever have been a part of the Amazon games studio ecosystem. And so when we talk about synergies, I actually think the great thing Amazon games did and why I think they've been relatively relatively more successful than other tech companies doing this is they tried to build a real games or and they didn't have all these synergies. Like for example AWS, you pay at cost for AWS. You don't get some sort of special discount which is exactly how it should be. The organization needs to run on its own and be self-sufficient. And I think that's the problem that you're pointing out that I agree with is that we haven't chosen good genres or we didn't choose good genres. We chose MMOs which have been long dead for what over a decade besides World of Warcraft particularly in the West. We chose racing which is sells I mean Need for Speeds sells the same amount of copies every [ __ ] year. Forsa all these racing franchises

just sell the same copies every single year. And we chose a MOA you [laughter] know like King of Meat had his own thing that that's kind of interesting but like that also flopped. I think it's just been bad selection of projects. There's certainly a lot in the graveyard you haven't heard about. But I think of all the companies, Amazon has stuck with it and been relatively more successful than other companies. Just they weren't able to make it work at the end of the day. And I agree with you. It's because they chose bad genres. I don't think it's broader organizational handicaps.
That has not been my take from the very beginning. And maybe what the new era with Kristoff has changed, but the histo history of this division is riddled with complexity around different operating priority, right? Cuz you have
Yeah, I was going to say an engine.
Well, they had Amazon games on mobile, too, where they were trying to compete with the app stores.
Okay. I've been talking about this is before Philip even joined this goddamn this [ __ ] podcast, right? But like you have Twitch, you have Prime, you

have Game Studios, you have AWS, you have Lumbboard, and now you have [ __ ] Luna, right? You have six different groups that are like beating this like strategy requirements for the gaming division. And that's not gaming.
They they don't though. They operate independently.
Dude, their incentives were built around AW Prime subscriptions, right? Like that was their incentive. That's how they were actually getting rewarded. Their bonuses were based upon how many Prime [ __ ] subs they were getting. Dude, that is a complete [ __ ]
So, Amazon doesn't do bonuses. Amazon does stockbased compensation. Comp bonuses. Yes. All their things were tied to whether they got Prime subscriptions like
this was happening or AWS or using Lumberyard or all these other things. I this is maybe before your time at a at Amazon. It was all set up in in a disastrous way. And the fundamental problem with it was in my opinion or what I've been told is that they were all getting paid in Amazon stock and making gajillion dollars. And so they had no reason to rock the boat, right?

And so they making all this [ __ ] money. This is the Netflix problem, too. It's like they could do whatever the [ __ ] they wanted to do, right? And budgets didn't matter. [ __ ] timing didn't matter. So it's like they're just like willy-nilly like building [ __ ] And then so this is why the Kristoff thing may have changed my the initial problems but then to what you're saying and I would say it in a much more negative light is they they chose the wrong genres. Like these genres are the stupidest ideas ever. Like MMOs even though I love them. It's that is not a good place to go. The Lord of the Rings MMO made kind of sense. New World and and then MOBAs and then racing games. I mean, I've said a million times on this podcast, racing is the dumbest idea, you know? Like, there's just no market for racing games anymore. And so, let me just finish this last point. So, it's like
I'm always on the cusp of like if you think about it, like there's product strategy and product execution, right? And the product strategy has been wrong from the get-go with this these guys,

right? In terms of what they're doing, their execution has not been that bad, right? Like New World was a great MMO, right? Lost Arc and and what they did there was amazing. like they're really successful in like porting that over and bringing that to the west. Look, their execution was not bad, right? And I think they were throwing a lot of money at it too, you know? And this is straight on Kristoff's watch, right? This is not like, you know, like him making MOBAs and MMOs and [ __ ] racing games. Like, that's on him, you know? So, I don't know.
Yeah. I'm going to take a little different angle cuz I already agree with a lot of what you said, Chris, is I have a really good friend who works on New World and his wife also works at Amazon and both of them got laid off a couple days ago. So, this hits home and just absolutely sucks and she wasn't even in games, you know, she was part of the 30,000 G that we don't know the number for games specifically. So, I I think what I wanted to get your perspective on too is this. You know, I I listen to a lot of these market podcasts and it's

all of these companies chasing the AI investment and we've talked about this before. If you're a big company, all your resources and focus is going to, you know, AI. You know, dear game team, do something with AI. Do what? Oh, I don't know, but just do something with AI. And, you know, so games doesn't matter anymore. Games are becoming the pimple on the ass of like all of these companies chasing AI. And ironically that the New York Times just released this this article about Amazon going to robots mainly in the warehouses not you know obviously in the white collar jobs but you know I I just think everyone's chasing you know what's sexy about AI and they're forgetting about games although Satcha's you know saying it's important even though he has the same focus on AI. So, what does this mean, you know, when there's nobody left in the public space like EA is, you know, starting to leave? Like, is this going to be the dip in game investment that in a couple of years from now there's going

to be a glut of games? We're going to be stuck with black hole games and there's going to be nothing new because everyone that needs to spend the money on these things except for the companies backed by the Sa the Saudis, it like no one's investing anymore. I I think I'm scared about that. I'm scared about there being nothing fun to play in three years. Not that Amazon was at the forefront of that. Maybe the Lord of the Rings MMO, but I don't know anything to that idea.
It's our It's our own damn fault. It's our own damn fault. Like Convoy released a fascinating graph, you know, I think it was about 6 months ago, which is the share of venture activity inside of games going to AI related activities was around 10 to 15% of VC venture capital in games. But when you looked at overall venture capital, around 70% of venture capital in overall tech was going towards AI. So we're not pumping money into AI with inside of games. That is a huge problem. We were just talking about Elon Musk and XAI going after games with an AI with an AI thesis. Who who is

doing that inside of games? Very few people are doing that. We used to be the first best use case of technology. It's always what you hear when you when you hear about like blockchain and why games why VC's funded games to advance the blockchain is we're the first best use case for technology and only that we funded half [ __ ] AI revolution with all the Nvidia graphics cards we've been buying for the last 30 years
and so games need to embrace this. I It's true. It's true. Kept that company going. We kept that company going.
No. Okay, fine.
The thank you cards every year.
Yeah. I mean that that part's true. Like if you look back at the history, [clears throat]
the nerdy the nerdy PC gamer shutins didn't buy nearly the number of chips that these [ __ ] big companies are buying right now. Like it's nothing compared to that.
I agree with Phil's point that that allowed that company to survive to get to where it is today, which is yes, it's left games behind. It's like [ __ ] you games. Like the sexy girl over in the corner is what I'm looking at now cuz
this is us. This is a games industry problem. This is us needing to adopt this. And we've been taken over by

public company executives who are afraid to take on any single risk and artists, left-wing artists who are sometimes reasonably fearful for what job security means under the new regime. We need braver. We need braver people cuz all the AI conversation in games is just faster horses. Same thing with EA. That was the first speculation. Oh man, can we use AI to optimize cost? That's not where this is going to where this is going to be interesting.
Let's take a step back on this. This is a long debate and I don't I don't know if we can go into it right now, but we had almost unlimited money being [ __ ] funneled into this business in 21 and 22. And what was the result? There has not been one successful blockchain game. There's been barely successful mobile games besides Turkey really [laughter] in that time frame
and China. I mean,
but that doesn't count because that's not what these VCs were investing in. Like everything they invested in the gaming space was [ __ ] has been a train wreck. I can't even think of a good example of one that's been successful now that they think about it. But anyway, like we had unlimited cart blanc to like innovate and build and

take chances, get outside of this traditional console like publisher model and nothing happened, you know, like because the industry didn't want it. The gaming audience doesn't want that. The consumer doesn't want that. And I think people keep forgetting that the consumer is the consumer, right? So I want to be clear on this point, Philip. Amazon gaming is done, right? Like they get these games out, it is over, right? All the central teams seem to be getting decimated. All the studios that they could close, they're closing. All the projects they can cancel, they cancel. But all these three games that they're in development or one's I think two are contract. One's a publishing deal first of all, right? One's contractual with the Tomb Raider. And I'm a little bit surprised that they're actually even doing the racing game. But like once those three games are out, the business is over, right? If Moral got shut down, I would be inclined to agree with you, but the fact that's still alive gives me more pause. I expected to see more cuts there. And I can follow I mean, I got enough people at Amazon to reach out, but that's that that was my question

mark here.
And why is Kristoff still leading? Like Kristoff didn't take a lot of accountability on this. In fact, he took almost zero accountability, which is scary and I would say is consistent with my experience there.
And I'm I'm troubled by that.
Yeah. All right, moving on.
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All right, so let's go into Battlefield 6. So Chris, you put this in here because of the massive new season 1 updates that they're doing.
Oh, right. Well, but I mean this is a huge thing because they're actually doing they're releasing I think relatively early something to compete directly against the free-to-play version of Call of Duty, right? And so
War Zone, right?
War Zone, right? And it's called Red Sack. It's like 46 players with duos and quads like and supposedly the map is a little bit uninspired, but overall like the go the gameplay is solid and they've done a good job of of replicating that type of experience. But the I don't know the question that came up a lot was like this seems a little early, right? like to go free to play. Like they're still in premium mode, right? Like trying to sell [ __ ] copies at full price right

now. The freeto play version is out. And I I think I'm just kind of in the same idea that they're just going, you know, full boat and just trying to compete head-to-head against Call of Duty and take to build that momentum to take a share away from Call of Duty. Of course, Call of Duty at the same time offered another free week, right, during this
release. I saw that with the current version, right, with the sixth.
Yeah. Yeah. And and again because Call of Duty is coming out so late, like this is what the only thing they have to do, you know, usually Call of Duty should be coming out next week, right? Which would have been perfect to compete against it, but they have another, you know, another week or so after that.
Yeah, I think it's like the 14th or something.
Yeah, 14 or 19th.
14th. Anyway, whatever.
Around there. I just remember that Adam wants to come on the podcast after it launches so he can talk about it with Phil.
But so far so good with Battlefield. I mean, I think they're executing very well. The fact that they got this out so quickly is amazing. And the fact that they haven't had any technical

challenges. So, we'll see. What are you thinking, Phil, on this?
Well, first of all, we need to give a standing ovation to DICE and Vince for shipping a freetoplay battle royale mode in season 1.
I mean, that is an incredible achievement inside of EA. I don't think people understand how hard that is. And launching this in season 1, while they're still having all the marketing push, they still have all the momentum is also brilliant. If you remember, there was Firestorm in Battlefield V, which was the last attempt at Battle Royale. And they took some of those mechanics from Firestorm and integrated them into RedSec. So, you have that closing circle of fire that explodes all the [ __ ] as it starts to come in using the dice engine. Yeah. Yeah.
Really?
Yeah. And it has that dude.
And it has 100 players, by the way. Not just the 46 and and duos and quads. You actually can't do you can't really do solo Q, which is a huge problem. It has a lot of the respawn mechanics we've seen in War Zone. this is the right strategy, right? There's the thing that I think Vince and team get the most amount of credit for is absolutely zero innovation. I I cannot credit them enough and I'm not being sarcastic. Like

they have taken Call of Duty's template and they basically copied it onto Battlefield. And one of the things you talk a lot about, Eric, is this Western problem of trying to figure out gameplaybased monetization. And one of the things that they have is they were able to copy blueprints from Call of Duty. This is the one of the ways Call of Duty has kind of snuck in power progression. I wouldn't call it power progression, but gameplay ver it's horizontal where you buy a pre-progressed weapon. So, in these games, you're playing, you're leveling up your account, you're leveling up a bunch of different things. One of the things you're leveling up is your gun, and as you level up your gun, you unlock attachments. And so, what a blueprint does is it basically just has those attachments already in the weapon. It's basically almost like a little bit of an it's not an XP boost, but it usually just kind of pre-progresses you a little bit. And you combine that with a cosmetic, it's a blueprint. They ran the same playbook here in terms of attachments. In fact, they improved it a little bit by having points instead of saying, "Oh, there's only like six or seven attachments you can have." Now you have 100 points, which gives you a lot more system design space to say, "Oh, this attachment is a little more

powerful. We're going to increase the amount of attachment points it costs." So, they literally just copied that model, which is also cheap to run from a supply side perspective. And not only that, the other thing that they've copied is the black cell pass. So, this is the one of the ways that Call of Duty has increased their arpoo on their battle pass rather than just being, you know, 10 bucks every 2 to 3 months. Hey, let's sell you another $30 up upsell, which has even more content. So, they've copied that and what they're calling Battlefield Pro, which is essentially the Black Cell Pass, but with a little bit more choice. So, what you're able to do in the Black Cell Pass is it's nonlinear and you can choose one of these, we call it tracks, and then once you're done with one of the tracks, you can select one of the other tracks. And so this is another $30 upsell. So they finally have a monetization model in Battlefield that makes sense. And you know what it is? Control C controlV Call of Duty, which is exactly what [laughter] they should we should have done from the beginning. Like this is about getting the franchise back to being a consistent real competitor to Call of Duty. And this was a brilliant

way to do it. No innovation. Just go out and run the [ __ ] playbook.
I'm not being sarcastic at all
on monetization, on content, on progression on on RedS. This is just war zone. It's it is the right strategy.
Okay. So, for me, I mean, I guess that's super interesting. I thought there was a little bit of in innovation in some of the gameplay and the visuals, but I mean, you're the expert.
Yes, but not at the kind of monetization business model perspective. They they basically did nothing new and interesting. I mean, Battlefield Portal is interesting. We could talk about that, but this is mostly copying the playbook.
Yeah. And we talk about this all the time like you know 80% you know controlV you know like cut and paste is okay and if there's you know 10 or 20% innovation that's okay too but I did this last week I don't know if you heard me but I talked about some of the innovation in the marketing and the way that they did the betas and the way that they brought the game to life I think has helped to amass excitement and keep people in. And

so the one of the things that I loved about this strategy was the ability to maybe retain players ahead of the launch. And so I don't know if you listen to the the the podcast with it's called the game business podcast. It was with Embark's Patrick Soderland who you know very well. So Patrick Soderland was the former battlefield leader at EA for 20 years. They also now make the finals and they also now make Crest's favorite arc raiders which is very very interesting and I hope you have that on your shooter radar as something to really look out for. So, one of the things that I thought was super interesting in this podcast that Patrick talked about was when they were dissecting what went wrong with the finals and why that kind of took a dive after launch maybe 3 months later was the lack of the meaningful retentionbased content. And so, you know, I think to us we're like of well, that's a no-brainer. Like, what's your content after you launch? So, back then, you know, a few years ago, like we actually weren't thinking

about that. people weren't thinking about like, oh, I have to make sure I've got new modes, new content, as much as they are now. And so, it looks like, you know, in a sense what we're talking about with the Battlefield team, they've really learned from those mistakes, right? That's why we're seeing, you know, a freaking battle royale mode in season 1 competing directly against COD and really pushing them because now they're trying to retain players ahead of that, you know, launch, which is smart. The other insight that he said that I thought was super interesting that people should pay attention to is that he went to his content guys and is like at first he's like hey I think we need to be 10x faster to compete with the China based games you know see Marvel rivals or something like that and then he went back a day later and he's like you know what I was wrong we need to be a 100x faster and so how he talked about to my earlier point about AI and our earlier point about AI it sounds like they were using you know machine learning and AI and pipelines to help with making content faster. And I know

that you had said earlier, Phil, about like cost efficiency. I think that their AI for speed is something that people should be looking at is how do I do things to feed the content monster that all players are coming to expect. So, we're looking at a a picture of Arc Raiders. By the way, I also love love love the retro sci-fi7s looking. It kind of reminds me of Concord to be honest, but I don't know if you saw that on um Battlefield and COD banned the word Arc Raiders from their chat. And so Arc Raiders again, Marketing Brilliance, went and did like a post on Twitter that was basically um we're still on track to release like asterisk asterisks because that's what you look like when you get banned in the chat on October 30th. So this game is coming out Oh, tomorrow we record on Wednesday, October 29th. So, so check that out.
Yeah. Well, let me let me ask you, Jen, hold on. I just I I you know, I think you know, Chris Chrising asked this during the podcast or at least hinted at

it. I just get shades of Titanfall
between Call of Duty and Battlefield. And
would you release this game now?
They talk about that. Yeah. Go ahead, Chris.
No, he lived through this, right?
Yeah.
Yes.
Yes.
He was solely responsible for the Battlefield like Yeah. Titanfall [ __ ] Call of Duty and yet he's doing it again.
Would you do this, Jen? What What would you do with this?
I don't know if I would have. He his answer was, "Well, you know, we've looked at a bunch of things and we believe that we're in it for the long term and we believe, you know, XYZ." I if if you are truly going to be because they have premium I isn't our graders, doesn't it have a premium component to it?
Yeah. premium plus $40,
you know, and so I I think the challenge for them is all premium games need to launch in Q4 just because that's the momentum you have to get. Q4 is is where you win. And I think they probably as

they were developing it didn't realize that Battlefield would be doing as well it's doing. And I think they probably had their sights set on
CO. He has all the contacts that knew exactly what was happening with Battlefield. [ __ ] it. I knew Battlefield was going to do well because of how many people were working on it. He certainly did,
you know, like he knew exactly what was happening, right? Like, and like he must have less flexibility in terms of his publishing partner. Was it Nexon? I can't even remember now.
It's Nexon.
Yeah, they gave him money and so he probably was contractually obligated to get it out by a certain time. Like, and like
Yeah, he talked about flexibility. I mean, by the way, I don't think I've heard of a more lovely publisher that he wasn't pushed on any dates. Maybe it's this. And so maybe it's because it's an extraction shooter. It's PVP PVE. Maybe that's why he thinks he can own that segment because his thesis was that they found a way to make the extraction shooter a little bit more accessible,

have a a theme and style that was differentiated. It they say it that it's fun. PC Gamer says, "It went from under the radar to on my radar to darn near at the top of my most anticipated games of 2025, thanks to successful tech tests that made the coinc coincidentially timed marathon alpha look bad. It's currently one of the most wishlisted games on Steam right now. More funny is that the Battlefield and COD betas are centering art raiders. Okay, that actually could be the best gift that they're getting.
Dude, that was the exact [ __ ] argument they made about Titanfall. They're like, "Oh, it's a different market, different audience."
Okay.
It's like,
I mean, like, how can you make the same mistake twice? Like, I'm actually super bullish on Arc Raiders. I think it looks amazing and I think they'll find it thing, but I would have released this like in February. you know, I wouldn't
probably would have waited, especially on the So, on the marketing side, you know, as much as you know, they're a medium-sized company, as much as Nexon is supporting it, you do not have the

dollars to compete with the number one in two games. Can you imagine? Like, the marketing spend on COD and Battlefield combined is got to be over a billion dollars. And, you know, poor little baby arc raiders, they're like, "Here's my $100 million marketing budget. Yay." I mean just yeah kudos to them for getting the buzz that they are getting with the community. Uh but you're right like in a perfect world if I was on the team I would have been like March looks really good guys. Well actually remember like what about GTA? So
yeah but that's in May in May.
March would give them the window they need. February or March would give them the window they need.
February or March would have been better. But remember everyone didn't know that GTA was moving. So, all of these games, God, would have been in the GTA window. It's so Isn't that crazy to think that we would we could have had all of these games. All right. Happy birthday to Pokemon TCG. Phil, you want to take us through?

Yes. So, Pocket Gamer Biz had an article celebrating TCG Pocket's oneyear anniversary. It has passed 150 million downloads since it launched October 30th, 2024. And according to Sensor Tower, TCG Pocket came in at 445 million versus Pokémon Go's 345 million. I think it was for this year. However, this game is not looking good at all. And I think this was an awful article from Pocket Gamer. So, let's talk about the [laughter] numbers. Let's talk about number. Let's talk about the first the first warning signal, which is downloads. So, we're looking at Sensor Tower numbers right now for Android and iOS worldwide in terms of downloads. And if you remember, the only thing that really powers this game is Japan United States was around 60 70% of revenue. And it's interesting when you look at TCG Pocket versus Pokémon Go, the Japan US share actually flips. So this is a very Japanese-centric game with the United States in second. And then when you look at Go, it's actually flipped. The downloads have been slowly declining

really ever since the game released. It's been slow chips every single month. And not only that, the downloads have started to run through the funnel. And when we look at MAU, we're starting to see the same effect. So if we look at MAU where it was in March of this year, we're looking at around 35 38 million. We're down according to Sensor Tower to around 22 million users. I mean, that is a huge cut. Now, let's look at revenue. Oh my god, it's even worse. So we're looking at a game when we go back and talk about the start of the year at an $840 million run rate. Now it's down to a $300 million run rate based on the numbers from September. That is a big problem. A lot of blinkers should be going off that things are not well. And so DNA in their quarterly earnings have been talking about what the problem is. They say that user acquisition has remained steady although again tells a different story and that they're worried about quote the retention rate of existing users has declined compared to the initial launch period. Well, it

looks like revenue is also starting to have that problem as well. There have been a number of problems that I talked about the early part of this franchise. And don't me wrong, I've been wrong about Pokémon Go, but it looks like I may have just gotten my timing wrong and my scale of of incorrectness off. But the the question I've always had about this product is how far can a loop box simulator go? Because what do you do in TCGet? You open up packs. The whole core loop is about packs. It's about collecting. And they absolutely killed the meta collection aspect. The problem is that when you don't have a gameplay component that's strong, you can't have a meta. And a meta also helps drive demand for an increasingly large and diverse collection of cards because the meta changes. You have formats like in Magic the Gathering. We know how this stuff works. And without that, you don't have a lot of strategic depth because remember there is core gameplay. There is TCG Pocket. The actual Pokemon card game battle is in here, but they've stripped it down. It's 60 to 20 cards. There's no mana energy, excuse me. There's a points win condition. One

Redditor called it having the strategic depth of a baked potato. They had their ranked play doesn't give a lot of rewards. Remember, they had trading which launched. That hasn't gone so well. So, there's a lot of things that they need to solve in this product. They have a big update coming next month, which is Mega Evolutions. Let's see what happens there. I'm sure it'll be a onetime revenue bump, but I still think there are core problems with this game that relate back to the CCG element. Now, don't get me wrong. I still think if I had to choose a path between meta collection and core gameplay for Pokemon, I think choosing Meta Collection was the first right choice to make because when you compare this to something like Marvel Snap, right? Marvel Snap, amazing core gameplay.
Yeah.
Weak on the monetization meta collection side. If you obviously different franchises, Pokemon's the most valuable IP in the world. You know, TCG, by the way, the TCG physical game
does to1 to2 billion a year. So, that is the benchmark for this product is 1 to2 billion for the physical TCG. But I still think it's interesting to compare Marvel Snap, which had amazing core gameplay, but didn't really nail the modernization aspect to TCG Pocket and

see where both of them have landed, which is not in a great place for either of them, but at a very different magnitude.
Yeah. It also when you look at it versus Pokémon Go, they both seem to be going still, but like you're saying, like from a little bit more of a zooming out over the timelines, both are a little bit in decline. So with Pokémon Go, they took over. I think the contract ended in May, so it's not even been that long. Do you think we would have seen scoping impact on Pokemon Go versus cuz one of the things that I was thinking was and they are different play patterns. However, the collection mechanic is the same to your point meta collection with TCG and Go, you know, it's like how many times can you be into this franchise and collecting a bunch of [ __ ]
The social is much stronger in Pokémon Go. There's so many different things in the Pokémon Go economy. I actually thought there would be bigger impact earlier in the funnel from a CPI perspective, which we talked about
that they're both competing for the same group of users. And if we're looking at the graph right now, there's actually been two, I don't want to call them sleeper hits, but Pokemon Sleep is

actually doing fairly well, which is a very interesting idol game that's actually making quite a bit of money. And Pokemonite has not died, by the way. It's still doing a [ __ ] ton of downloads. Doesn't make anything in terms of revenue, but Timmy is still operating that. And we've seen a little bit of uptick in downloads for both Unite and Sleep, but I think it's really hard to tell a competition for CPI story. If you remember, there's Pokemon Champions coming next year. Let's see how that does. There's the the Switch Animal Crossing style Pokemon game which is coming. And there is one more Pokemon game coming that I think when people see this Pokemon game, they're going to be shitfaced. I don't think we can talk about it now, but I think it's been kind of like an un, you know, it's an industry, I want to say rumor at this point that keeps circulating, but there's something else big for Pokemon coming that I think could affect this as well.
All right. Well, thank you for Pokemon Talk. Happy birthday, and that covers it for today. Sorry we went a little bit late. And see you guys next week.
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