TWIG #377: Epic for Sale, Unity Cuts Deep, and Merge Keeps Printing

This game is [laughter] fun. You can YOU CAN JOIN
[laughter] [music]
HELLO EVERYONE AND WELCOME TO Deconstructor of Fun this week in games number 377. I'm Jen Donahoe, fill the marketing and publishing role on the podcast. Today we have Eric Kress, strategy and investing. Phil, monetization Tsar. Mishka off, founder, startups, investments. All right, here's what we have on the podcast today. Disney's rumored to want a piece of Epic or Epic wants to get sold, either one, we'll debate that. Unity beats earnings but announces it's shutting down Iron Source and selling Supersonic. It is a sad week of studio closures and game closures. We'll talk about Rec Room, Eidos Montreal, and a bunch of others. We dive into the merge game economy and argue over what's the driving force behind the

success of the subgenres. Phil, I have thoughts. DevSisters Cookie Run franchise expansion, well-funded ex-Supercell teams are building games that seem more like Brawl Stars. Where have we seen this all before? So lots on the topic today, but first I have to bring up movies and video game movies formerly known as transmedia. I'm not a huge Super Mario movie fan. I think it opens today is the day that we record, but the new Super Mario Galaxy movie is getting absolutely eviscerated in the press. Reviewers like Variety were just said it, there's no story, there's too many Easter eggs, it doesn't hold up to the first one. And this was my favorite, it feels like the Nintendo suits took over. So I bet you guys can't wait to, you know, watch the transmedia train wreck that's coming. Yeah, the the first movie grossed $1.4 billion according to Universal. So if this one shits the bed, is it over for Mario? Like do they go on a in a penalty box

for another 20 years or do you think that it will just change the production company and give it a one more college try? Oh, they're going to keep doing it. Right now it's projected to open at 350 million worldwide, which is beating the current movie which is Project Hail Mary which I hear amazing things about. The last one opened at 171 million globally, so it's almost like double. We'll see. I think kids don't give a [ __ ] They're going to be like, "Wow, this looks like fun." The thing's going to make a billion dollars. Of course they're going to do another one. I don't I don't know. I don't think I don't think who gives a [ __ ] about what the reviewers say on on this type of thing, you know? I mean, they're making Angry Birds 3, too. I mean, 3 as well. So I guess transmedia is back. Well, if you
uplift?
[laughter]
Where is this Is this going to the theme parks? What do you think this does to the theme parks, Jen? What about the theme parks? So where's my franchise uplift? Is it in base game sales for the franchise, the back catalog? What do I put in the franchise P&L? Remember that a franchise is not

just a content engine, it is the entire licensing engine. So it's So licensing is what's going to generate hundreds and hundreds of millions of dollars this year. Go walk down any toy aisle. Go look at what the t-shirts you're selling. Go look at the theme park attendance. So it is also the back catalog. Remember they were re-released the back catalog of the game? So it is a franchise, that means all boats rise, not necessarily one specific boat. Totally agree. It's the sum of the parts. Where do you think this lands? Where would you Where All the boats. Okay. Yeah, consumer like everything. Every I mean, that's what you do when you forecast a new content drop. I I think this is going to be wildly successful. There's no doubt about it. Mishka, tell us about another story you saw on LinkedIn. I thought this was interesting. So I found this very interesting news just before we were starting to record. I'm reading it here. So former CEO of Riot, Michel Guillemot, who has moved back to Paris according to

his LinkedIn profile. Like it says like the instead of a title his title is back to Paris, which I love. That's a great title. I'd love to have that title. Anyways, he himself and alongside Alexis Coquery and Clement Combal are building Leroy Jenkins Capital and he is joining it as a general and founding partner and their thesis is intentionally narrow. They invest only in game studios, not platforms. Who cares about platforms? Crypto, get out of here. AI agents, disgusting. Adjacent spaces, not interesting. They are investing into excellent operators. They focus on small number of genres they know well, they care deeply about and believe still hold exceptional untapped potential, which is survival crafting that they mentioned here. And of course, as any good Frenchman, they are backing European teams because Europe has extraordinary talent as Mr. Black and myself know, and

extraordinary creative talent, but the funding ecosystem not always match the strength of Europe. So this fund, LGK with a knight's head on it, will help to close this gap. Leroy Jenkins Capital, by the way.
Yes. With a K. Capital with a K. [laughter] Yeah. So um uh is this an April Fool's Day joke, guys? What the What 100%? This is April Fool's If this is not an April Fool's joke It's got to
[laughter]
It was released on LinkedIn 2 weeks ago. I read it as an April Fool's joke. Guys, this was a fun joke. Everybody commenting, you got fooled. This is not real. Come on. There's just no way. Came out 2 weeks ago and I you know, the numbers that I've heard are the fund is is hundreds of millions of dollars. Hundreds of millions? Yeah, that's

that's good. There's only There's only about There's only about 50 VC funds at the moment
[laughter]
and they're barely deploying unless unless you live in Istanbul at the moment. So I'm sure they'll have plenty of small teams to invest into who want to make the next MOBA. I don't get this. This makes no sense. Like in Europe of all places, right? To invest 100 million, 200 million dollars. Like that's This is insane. Like And they're starting in France? Are you kidding me? France? Like that's where they're actually starting their investment? They're out of their goddamn mind.
[laughter]
Out of their minds. What is happening? This is not This has got to be an April Fool's joke. Like this is insane. And they're spelling the word c o e u r? Are we What What's happening [laughter] here? What is happening?
Yeah. Anyway. All right. All right, let's get into shilling. All right, quick shill, quick quick shill. So we have couple articles on Deconstructor of Fun. So we have match 3D the genre

deconstruction by Amit Chan, host of our puzzle monthly, and Josh Channelly, host of UA monthly. UA UA, not UA monthly, that would be my episode. UA monthly wrote about the user acquisition system that companies need to build versus rely on the networks to handle for it. Sounds complicated, but he's actually just really writing what kind of a growth teams you need in 2026 and forward and what you should build internally. So really cool article, learned a lot. Awesome. I think you owe us a correction for last week, too.
[laughter]
Yeah, last week. So at the moment So what what happened with the edit? So apologies to everybody, there was a weird soundtrack. It was just uploading. I didn't was was uploading the episode and I realized somehow in the mid like at 10:00 p.m. whatever that I said something that was that I shouldn't say. Yeah, because it was under NDA. And so I jumped in quickly, canceled the upload,

and there was some issues with our editing software we had landed. Anyways, it was my fault. Last minute I [ __ ] up. Sorry everybody for listening to some track music at like minute 22. Anyways, apologies. Insulting Mishka on the on the mic.
Yes. Game devs, here at Heroic Labs we know that great gameplay is what players love, but integrating meta-game features like challenges, progression, and rewards is crucial for retention and monetization. But coding them is a tedious and time-consuming [music] process. That's why top studios have turned to Hero from Heroic Labs. Hero provides [music] a complete suite of battle-tested meta-game features that are quick to implement, letting you spend more time on the core gameplay experience. Ready to ship fully featured engaging games? Check out Hero today at heroiclabs.com. [music] Stay ahead of the competition with Sensor Tower, the trusted source for mobile marketing intelligence. Whether you're tracking trends, benchmarking performance, or scouting the next big

hit, Sensor Tower delivers the data that drives strategy. Dominate the charts with Sensor Tower.
[music]
Cool. All right, so we are going to get into the first story, which is Disney and Epic. Go for it, Mishka. Yeah, so this is going through the news. I This has been covered multiple times on the podcast, so we're just going to run through it quickly or Kress going to destroy it again. Walt Disney Company's new CEO, Josh D'Amaro, is a big fan of video games and the former Disney executive believes that D'Amaro would be smart to do even more in gaming going forward because Disney has been so good to us. This could include a buyout of a gaming company like Epic Games. Ain't that something? Kress, what [clears throat] do you think? Rumored Rumored to do all of this from GameSpot, everybody. Okay. We have asked and answered this question numerous times on the podcast, so I don't want to like belabor this thing. The difference though is that the

fact that Epic is [ __ ] cleaning house right now, and I know the layoffs are tough, but like 40% of their workforce was obliterated within like a 18 months, right? Which is unprecedented for a company like this, right? So, they're make trying to make themselves more profitable and attractive either for the public markets or getting sold, and I don't think there's an IPO imminent for any gaming company for that matter in this market given where gaming stocks are. So, could make sense for them to set themselves up for sale. So, the problem is there's not many companies that can buy a company the size of Epic. Now, Epic is worth at its peak $31 billion in 2022. Their latest round was around $22 billion, right? So, it is a big nut, right? You know, so they could in theory get a deal done between like the 20 and 30 billion dollar range depending on how desperate the shareholders are and how desperate Epic is. And I don't think they're that desperate to be honest, but nonetheless,

that's the range of transaction that we're talking about. So, company like Disney makes sense. Obviously, we get the Saudis, whatever, etc. But, you know, as always, like this is the spiel that I've said a million times. On paper, Disney makes sense, right? To get into interactive again. This is would be the third [ __ ] time that Disney has got into interactive. And but any self-respecting investment bank like Morgan Stanley or Goldman Sachs could pull together a deck to illustrate why this makes sense for Disney, and they don't give a [ __ ] right? All they're doing is chasing fees, right? So, if it works out, who gives a who cares? If it doesn't work out, who cares, right? Like it's just they just get the money, right? They don't care about integration or success. So, that's for the peons at the companies to [ __ ] sort out. But again, to be clear here, if Disney were to acquire Epic, they would absolutely destroy this [ __ ] company, right? It would be a disaster of epic proportions. Disney does not understand act interactive. They don't know how to manage interactive. They The majority of the powers that be that could give a

[ __ ] about interactive. So, this should not happen. That But that doesn't mean it won't. That doesn't mean it won't. It could happen, but it doesn't mean it should. So, there we go. Done. My take is just Disney doesn't really need Epic. I mean, they already have Epic. They invested 1.5 billion, and they're using it as a distribution platform for their IPs. And as Chris said, they can't even run a streaming service with the world-renowned internal IP portfolio profitably. So, taking Epic on is is quite different of a challenge. And also, buying Epic means that they would buy Tim Sweeney's control structure because without Sweeney, Epic Games business is a declining Battle Royale game and some Unreal licensing model and that any PA firm could run. But if you take it with Sweeney, he actually has the controlling shares, all the controlling shares. So, I don't think that that would work. And without Sweeney, again, without the visionary, without his relentless push, I think it's worth fraction of the

asking price at the moment. I totally disagree. That's completely wrong assessment.
[laughter]
That's right. Dude, So, you you think Epic without Sweeney is better? 100%. I mean, 100%. I think a real live ops operator with like Philip Black type monetization expertise and like [laughter] they could make something of this, right? Make a platform of this. I think a lot of what Tim has done over the years is actually hurt their capabilities of growing outside of Fortnite, right? And because they haven't grown outside of Fortnite, right? So, no, I think actually Sweeney leaving would be actually the a benefit for a transaction like this. That'd be so sad. He's He You're very very Wall Street right now. Like
a Wall Street transaction. You think You think Goldman Sachs and Morgan Stanley give a [ __ ] about Sweeney's management of the company and some like benevolent dictator? Come on. Zuckerberg ousted before Facebook went live. Yeah. Yeah. It's a founder It's a founder driven
He's a He's a capitalist. Sweeney wants

to buy [ __ ] No, do you know Sweeney? He wants to buy forests in the [ __ ] Amazon, dude. He's not an operator. He's like He's like building his empire in the Ozarks,
[snorts]
dude. Sure. Sure. But I think Mark Zuckerberg became an operator over time. Like he didn't start as one. I mean, he started as a kid.
that is not Sweeney. Sweeney is not an operator. Look, I'll say this. I have heard stories about him that he can like get really into minute details about technical things, too. Like he has an engineering nose, and he's caused a lot of destruction internally with some teams. There's no doubt about it. But he has been a driving force behind every single one of these decisions, including the gamble to even go after UFN to begin with. That's an incredible amount of shareholder value he's generated. So, I you know, maybe his time has passed, but I wouldn't I wouldn't sunset his like incredible ambition to even get this far. I agree. I agree.
Yeah, I just agree. I want to get into it a little bit of a different angle of And we've talked about this, so but I

actually did a little bit of research because I want to say that entertainment companies fail at video game acquisitions. It never works. The unpredictable dev timelines, the investment needed, the revenue cadence does not work for number one, publicly traded companies who have to hit their quarterly numbers. And number two is entertainment industry people who do not understand that game development and marketing is completely different. Interactive works differently. What we do know that works, it's called licensing. We love licensing. It is the best model on the planet. Ask Hasbro what every month when they get that Monopoly go and that Baldur's Gate check. How do they like licensing? They like it a lot cuz you know how much risk they take on that? Not much. They pay Barry Diller, and like that's it. And that check comes in. So, let's take a walk down what I like to call the entertainment company graveyard, shall we? Universal. They launched in 2017, the entire division was shut down less

than 3 years later. Viacom Paramount. They sold Virgin Interactive. Simon and Schuster Interactive published EVE Online. They fumbled it, and then CCP had to take it back, and then they had to self-publish it. Warner Brothers. Actually, they had a couple wins, but when Netflix say that you're valued at zero, doesn't that say something when the whole acquisition was happening? So, a couple of graveyard. Suicide Squad, Multiversus, Monolith, Player First, WB Games San Diego. The wins that they had obviously Mortal Kombat, which is like a small portion of the overall industry. And then Avalanche, which they ended up, you know, doing the massive Harry Potter game. So, that was like kudos on that one. Disney itself. So, I used to work at Disney. I lived through this. It was painful. Disney Interactive at its peak, the division was posting annual losses of 300 million. Club Penguin acquired for 700 million. Didn't hit it, so they avoided the actually the second payout because they

they paid half up front. That was a failure. Playdom acquired for 763 million, and that one didn't work and closed it a couple years later. Avalanche was there, and then they sold it to Warner Brothers after it didn't work. FoxNext. So, that actually moved to Disney with the Fox acquisition. Disney immediately looked to offload it and sold it to Scopely in January 2020. That game actually still does okay, but it wasn't what um Disney wanted. So, again, just please don't do it. Disney, don't buy it. Epic, don't sell to them. It will lead to Chris, what you're saying is a disaster of epic proportions. Pun intended. Let's rev another engine.
[laughter]
All right. So, Chris, let's go to the next story. You know, I feel like the last couple weeks we do this. We talk Epic, then we talk Unity. So, here you go. What's the Unity news? Well, Unity beat Q1 guidance, but the big news here is that they're shutting down ironSource ads network,

you know, the Israelis that they bought a while back. And they're also going to sell the Supersonic publishing label. So, the original ironSource merger was at 2022 for $4.4 billion, and now it's basically zero. All the co-founders have left Unity, five of them. In the news, they were talking about the new AP I platform. A vector has grown 78% year-over-year, and they're trying to get to a $1 billion quarterly run rate by the year end. You know, as I said when this transaction was announced, and ironSource was a huge sponsor of the podcast, but you know, the reality was at the time that both Unity and ironSource were way out of position when Apple unleashed the IDFA apocalypse. And so, basically, Apple 11 just cleaned their clock. So, when they acquired each other, it was like two drunks holding each other up. And that is This is exactly what happens when two drunks hold each other up. They both fall on the [ __ ] ground, you know? So, it's like Anyway, I just want to be clear like that that was my opinion back then, and we lost a sponsor because of it. So, you know, they had a

great UA platform before the IDFA apocalypse. ironSource did. They were a great company run by really amazing group, actually. They're really good guys. But you know, once they got acquired by Unity, as expected, you know, the it just led to this absolute management dysfunction, right? And basically, every single founder left the company, right? And the whole company just went into ruins, really, and never really popped back up after IDFA. Now, having said all that and the history of the ironSource transaction, this is actually a good move for Bromberg in a way from a strategic like Wall Street perspective, right? So, I mean, they're focusing on the better tech, right? And the better platform that they have, right? To try to compete directly against Apple 11, and now we're seeing Facebook kind of come into the fray. So, and they're hoping, which I think is a [ __ ] hope and a dream and and a fantasy land that Bromberg is in that they can leverage their engine data to get better data to help to fix their

issue and and compete directly against AppLovin, but cuz ultimately garbage in garbage out, they don't have the data, they don't have a platform. But there's absolutely no evidence whatsoever they are capturing any data from their customers, and I've been looking at this pretty closely. So, that needs to materialize in some way for them to actually try to get some advantage in space. And then I'm also hearing from the grapevine that that Bromberg is focused on building out the engine, right? With like upselling AI tools, which is ridiculous strategy, absolutely ridiculous strategy. No one gives a [ __ ] right? And you're not going to get any more money from that. [ __ ] engine business is break even at best, it's never been a good business. They almost went out of business because of the engine business. Everything rests upon whether or not they can be successful in adtech. What I think Bromberg has done successfully is really kind of got the company more focused and more lean on what the opportunities are in front of them. And if they can execute against that, they could have a shot. I just don't think they have the capability of doing that at this stage. I think they're

continuing in a downward spiral regardless of where the stock goes, you know, as we've talked about before. That's it. I want to tell a story about the the two drunks holding each other up. This was fun. So, when you said it on a podcast, this was like several years ago. It was at the sale of the company. Like now I can tell this because all the people have left, essentially. But but they were like crisis meetings in Tel Aviv and like everybody was listening to this on like the leadership level. I'm like, "How is this possible? Like what a stab in the back."
[laughter]
Well, cuz they were a sponsor, right? Like Yeah, yeah, they Not even sponsors, but just like friends of the show for a long time and and our first big sponsor and so forth. I mean, it was fine in the end. Still love everybody there, but but yeah, you caused a lot of a lot of murmur. [laughter] They're like, "How can we pay this guy? How can we pay this guy to say this
[laughter]
shit?" Who author- Like who who made this deal happen? Like he's [ __ ] on us. So, yeah, that was an expensive

expensive sentence, and we shall continue saying it cuz we paid for it.
The Vector Vector reach out and sponsor. We [laughter] actually you But you Didn't you guys just do a podcast where you talked all of you talked great about what Vector is doing. And you know, they just crushed their earnings. And Vector is is part of that. 100% and then that's why I wanted to kind of like also bring in few points to defend Mr. Bromberg here. So, first of all, like their total revenue grew by 24% year-over-year, and that looks weak. I 100% agree with that, but if you remove IronSource, which they have done, you get 48% growth year-over-year. So, you know, I love loved IronSource, but they kind of became dead weight at some point, and they were dragging down the business in that sense. If you look at the numbers, Just just stop for a second. I mean, Okay.
up happening was they pulled all the investment out of IronSource, and they put it into Yeah. the new tech. I Every time I Every time I see this, I want to say Vortex. It's Vector. I don't know why I [laughter] keep saying Vortex every

time. Maybe cuz they're they're throwing money into the vortex by investing in
[laughter]
Vector. Anyway, but so like that's not fair to the IronSource guys cuz the reason they acquired them because their tech was so much better than Unity's was at the time cuz Unity's tech was [ __ ] horrific, right? And so yes, I agree that Vector is a better tech, but that's the only reason that it's growing more is because they're investing a [ __ ] tons of money on it. I don't understand the read though, Eric. Like we we talked about this for quite some time like when they were talking about it, like whether or not Unity was going to be able to build a competitive adtech product. Like has this thing grown or not? Like revenue's grown for Unity, right? Like is this thing a success or not? Is this company in the [ __ ] Is this the end? Like where is this? I understand the engine thing is [ __ ] stupid.
[snorts]
When you go from zero to 0.5, that's a gazillion percent growth, right? I mean, like that's Okay. So, it's still small. Okay, I will tell you right now, 100% that I know this for a fact, this thing does not scale. Like there Scopely and [ __ ] Zynga and other like big companies are not using [ __ ] Vector because the [ __ ] is too small to matter,

[laughter] right? It is working on the margin because the platform is better and they have inventory. But the fact is that in order to scale and to be viable in this business, you need the scale of Facebook and the scale of AppLovin. And AppLovin owns this business, so it is a [ __ ] tough climb. So, they're optimizing on a small inventory? Yeah. And with small players. Like you know, people are not investing big money into Vector yet, you know? It's mice nuts. Unity sits on this first-party install behavior session data, and by having their engine in about 70% of all the mobile games, right? If they would be able to close that loop, they would have a moat, right?
god. You are killing me, dude. We've been talking about this for [ __ ] years, dude. John Riccitiello got up there and spouted this [ __ ] like 10 5 years ago, 6 years ago, right? This is complete nonsense. They don't have access to that data, nor are customers willing to give that data. You think

King is going to give them access to [ __ ] usage data on their engine because they're using their engine? No, they're [ __ ] not doing that. That's it This is a complete [ __ ] Like absolute [ __ ] in my view. Oh, well. Okay, next point. Keep going, Mishka. I got you, dude. I got you. I'm going to agree with you. Like the revenue gap between AppLovin is huge. AppLovin is like what, 4x Unity? Not to mention that Unity's EBITDA is about 25% when AppLovin's is 80%. And I calculated that Vector would need about to sustain this 80% year-over-year growth for six quarters straight to be in a position to actually be meaningful for studios. I want to say just this for for this situation. Like as a public company CEO, I understand like that Bromberg operates under these quarterly time windows and that are measured very heavily by stock performance. And we have to, you know, be clear that he didn't join a joining team like a winning team when he when he

came in. Like it Unity was in a pretty bad situation when when he joined. And he's been restructuring the company quite heavily. The stock doesn't always reflect what you're doing, which is unfair, especially since the stock is down have so much due to this AI fever. But you know, we'll see what what Wall Street says, but I think I think what Bromberg has been doing is is the right things. Like as you said, Chris, focusing on the the core businesses, investing into the adtech product, removing everything else that is that is, you know, being acquired over the time. All right, we're going to keep going. So, let's talk about the great game shutdown that happened this week. A lot going on. So, the Meta Quest VR hit continues, as well as mobile and PC. So, it's not just one platform, but Rec Room was worth back in 2021 3.5 billion. That was during the metaverse craze, but it's now shutting down on June 1st. Actually, what was interesting, Snap was acquiring

some of the assets and employees from Rec Room because of their, you know, AR/VR activities that they have on the platform. Other VR studios hit Red Storm, which is a Ubisoft studio that did Assassin's Creed VR, and then Polyarc or Polyamory, who had Boss. But Bethesda also announced it's shutting down its free-to-play Elder Scroll Blades on June 30th. Krafton is going to shut down PUBG Blind Spot. This was a PC version that was only in early access for a couple of months. So, I'm not Chris, I'm not going to ask you your thoughts on VR, although I'm sure you'll give me them. There's going to be challenges with Meta's declining focus. It reminds me of the day, and we're watching exactly what happened when Facebook started making changes to the canvas, and they pulled the plug basically on all of Facebook games. Seems like the same thing is starting to happen here where, you know, VR might not have a future if if Meta keeps focusing on not the metaverse, but they're going to focus on the AI-verse,

which is where they're going. I do think it's good to see how some of these folks are not falling into sunk cost fallacy and cutting things before we get too far. I want to see more bets. I think, you know, that those are good actions, and so anyway, Chris, all right, fine. Do your thing. VR is dead again, right? I said this a million times. VR died before. Death like death death death. The only reason it's still alive or even a platform is cuz Meta grabbed the paddles and shocked it back to life, and then continues to be like the ECMO of the platform, right? Like
[laughter]
Otherwise, this thing would have been gone like years ago, years ago, right? And as much as I want VR to be a viable platform, I have my VR headset right here. Despite all the devices that are out there, there's no [ __ ] engagement, right? It the platform is absolute crap, right? And when you don't have engagement, you can't have a profitable platform. And this is the fundamental challenge with throwing something like this on top of your head and isolating yourself from the world, right?

So, thanks again to the metaverse whisperer, Matthew Ball. He's [laughter] He's almost solely responsible for all these closures because he's the one that set this the [ __ ] in motion and put this in the heads of all these executives. So, anyway,
I'm going to give you one little mice nuts. So, on VR, the people that are on VR are heavily engaged. I think I've told you I I have a client who is a VR game, and we're working on a multi-platform strategy for them because I think that it might be a place where you can actually grow and launch a brand. Their DAU numbers at its peak were 600,000 DAU on a Meta Quest game. I do think that yes, you are correct. It is a niche opportunity, but I I wanted to clarify the engagement point because I think for those that are on the platform, they do engage with it. But I concede to your larger point that this is not a high growth or a massively high revenue category. Also not a faithful interpretation of Matthew Ball, who has

explicitly ruled out VR as a part of the metaverse. Whatever that thesis was, you've made me actually defend that, so that's a very much strong knock against you. And I would say the second thing is like you're the one who preaches all the time about the search for new platforms and how important that is. And so here comes Meta and Facebook willing to drop billions of billions of dollars subsidizing this attempt against all reasonable evidence for us and it didn't work out, but who gives a [ __ ] Like they basically were just throwing money at us at the as an You don't chase you don't chase bad ideas with lots of money. Like that's just a dumb strategy.
even tried though? Like why not try? Like what what is the next best opportunity
that they should have taken? Okay, first of all, the dude I'm not giving Matthew Ball does not get a pass for this cuz it didn't work on VR. Rec Room was on iOS, Android, PC, Xbox, PlayStation and Switch, right? So this is a metaverse style platform that he would

actually support, but but I want to be clear on right? I mean it just has a high failure rate though. You you just has a high failure rate. Like I don't think he claimed that like every metaverse would survive. Like you still have to contend with the Roblox though if you're going to go in that direction. Like that's what he would point to. He's openly pointed to Roblox as the best example of his metaverse thesis.
Well, I also think Fortnite
that's EXACTLY THE OPPOSITE OF HIS thesis though. It's an open it's not an open platform. That I agree with. At the end of the day like Sorry, I don't even know what I'm asking and answering now.
[laughter]
It's a I love VR. I want VR to work, but it's just not a platform that people engage with in in a meaningful way and
That's fine. That's fine. You know what? I knew the future
Look at it. I'm just saying it was a life worth living. Yeah. As we as we bury the body. The reason why I brought this up and I tried to include multiple platforms is that we should be taking bets. It is great to

not necessarily fail fast, but take those bets and and and [laughter] and get in and then try to get out.
it was fast gen. I don't think it was that. No, no, no, this one was slow. My the the point I'm trying to make was the PUBG blind spot PC story where they went in, they tried to you know, take PUBG to a new kind of top-down hack-and-slasher, I don't know, whatever it was on a different platform and it didn't work and they pulled the plug in a couple weeks. Now, what other people could have learned from that, you know, and Meta it took them many years to do, was to pull the plug more quickly. Anyway, Mishka, you want to defend Matthew Ball cuz you went on a bike ride with him. Is that what you want to say? I don't know. I've met Matthew Ball a couple of times, three, four times. I think he's a really nice guy. I don't understand the hate, but I just want to defend his character. That's it. He's a very nice Canadian person.
We're not I don't think Chris is commenting [laughter] on his
I know. I know. But here all all you know what? I will I will get off Matthew Ball, so to speak, if

on LinkedIn he basically says, "Look, my thesis on the metaverse was wrong because of this, this and this and this." and capitulate that he was a complete idiot when it came to the idea of what this the metaverse was going to be and he's And if he capitulates to No, he doesn't have to do this, but all I ask him to do is that, right? And a bonus, if he capitulates that the only reason he had the metaverse piece was to sell more books.
[laughter]
Right? Like but he doesn't have to do that. All he has to do is say why his thesis didn't make sense and why it hasn't come to fruition. One LinkedIn piece, like a half a paragraph even, you know? Like a few bullets. And I'll be I'll be over it. I got it wrong.
I've heard a little bit I've heard a little bit of him say that on some of the podcasts, but I know you think that's Anyway, all right. So there's one breaking news that I didn't include in my list of shutdowns. Mishka, you picked up this other one. Yeah, so this is another thing. This is Embracer related, so why not put it here? So Eidolon shut down a game in development in Montreal that led to 124 people losing their

jobs. And this game had been in development for over seven years. So the game was called, according to the internal sources, Wildlands and it was canceled. They killed the studio with the cancellation. And the game was about a teenage spirit rider in an open world setting and she was riding a magic moose. So in other words, it was pretty much Moco, but more expensive. They used four different engines during the development. Why not? And according to the other sources, it was a narrative chaos, the budgets exploded naturally if you do something for seven years and they spent hundreds of millions of dollars. As a collateral damage, they also killed Deus Ex in January 2024 as it was slaughtered to feed this moose-eating project. The game, the sources tell, was nearly done. It was actually in the debugging phase, that a release date was set for this

year and Embracer, in all their kindness, pulled the plug finally at the last stretch. Presumably deciding that the sunken cost wasn't worth the marketing spend to launch it. So Chris, I need your hot take on this.
Well, I mean I I wish somebody had done that for Concord, but anyway. Yeah. This is typical thing. So my my read is of course too long in development. The culture changes, the taste changes, the game becomes kind of quickly irrelevant. The market changes, so you had to probably a lot of competitors emerge and once those competitors emerge, you they take market space, but you also cause you to pivot to find your own USP again because honestly we don't have original ideas. We've all played the same games. When you do those pivots, now you have to clean up for them, so you have more resources and that's why you have multiple different engines and then you need more resources and then it kills adjacent projects and the cost explode, it becomes too big to kill. But in the end, regarding Embracer, Chris said it

over and over again like Lars wasn't managing this company quite efficiently. I mean, safe to say at this point. And sounds like over-indexed in that Swedish kind way of being really, really nice and that means also kind of giving creatives too much time, too much space and then disasters like these occur. And I think personally leaders need to be brave enough to kill early or they will be dragged down by by projects like these. This company is still part of Embracer, right? They canceled the other project. Are they working on anything now or is it just over? I think they don't even make board games. That was one thing that they were so The studio, do you mean? Yeah. Oh, the studio. The studio is closed. The completely closed now, aren't you? That's a supposedly a disaster. All right, write it off. Cool. All right, Phil. Thank you for waiting patiently. Let's talk about merge and economics, like two of your favorite topics. I want to give shout out to Phil just for playing merge

two games so much. Like I go crazy when I haven't tried this. I've been obsessed with merge two and the reason I've been obsessed is that we've talked about covering really big things on Twig and this is a huge growth sector for casual. Like we mentioned I think a couple weeks ago that Gossip Harbor has overtaken Candy Crush in terms of weekly revenue. Yeah.
That is an unbelievable achievement. This thing has basically been like a rocket ship. Mishka has covered some of the genre evolution. Right now we're looking at merge two revenue from Sensor Tower between the United States and worldwide, it's showing the same growth trajectory. The the thing that I really want to keep in mind and we'll touch on in a moment, this is a completely different paradigm. This is not an evolution of match three. This is a whole new way to think about casual. And so they've they've mostly been Chinese developers. So if we look at the share of games or the share of revenue by publisher country, this genre has been dominated by China basically because of Gossip

Harbor. And not only that, they've increasingly dominated the genre. So the Israelis are competing in here. Remember Moon Active has quite a few in development. They have Hollywood Merge I've been playing lately. They're basically trying to just shove different themes to see if they can win on the CPI game. Finland, our poor friends in Finland, The Mansion has not been doing well and that's been an unfortunate result in Singapore, which is basically China. So so China is basically like owning this category and even if we look at the new games and there are new games exploding. The rate of new games is unbelievable. Asia's where most of the new games have come from, too. So 70 new games cumulatively from Asia since the start of March 2025. And remember that a lot of these are hard to categorize in Sensor Tower's data set, so these are the only ones that can be categorized. So the question is is like what is behind this growth? Like what is going on that's driving this huge departure? And so if you remember the way these games work is that you have a board and

you merge items on that board. And when you place one item, you drag it from a tile onto another one, it merges into a higher level and you're serving a queue of customers that demand items at various levels. So you're going to have to generate those onto the board. So you use energy and every time you click a generator, you use one energy and you make one item and then you merge it and then you merge the other one up and the other one and the other one and the other one and the other one and the other one. And so you can say like, "Oh, wow, a level 15 item that's been merged," which again is the result of two level 14 items. That is a [ __ ] ton of items that actually had to be merged to make that happen. And so like this is how you ultimately end up playing the game is that you're serving these orders and customers are requesting objects of different levels. And so that means they can build in all these crazy cost curves that you couldn't in match three. Like you remember match three is a function of how many level attempts I have, what is the probability of me failing, so you're getting to a fail screen, the chance of you converting and the price of that conversion. Like that is how the

match three toll works, but here it's very different, right? Like they can charge you for let's say a level 15 item that it can cost an enormous amount of money, right? I mean here we have a piece from Deconstructor Fun. This was published on the website. This is a grace piece by Jesper. A level 15 item is over $250 in equivalent energy. Now they don't necessarily directly sell that, but you can't do that in match. And so this completely changes like the entire way that the economy is set up. And so they have the opportunity to do things like they use multipliers, which Jen I know you could talk about, where like when you generate an item, you're generating from a drop table that the item level could be let's say level 12, level 13, you can get surprises. And not only that, you can you can shift you can shift sometimes drop rates or you can shift the level by increasing the multiplier. So it's now instead of spending one energy, you spend let's say three or four energy and instead of generating a level one

item, you can generate a level three item. You can progress or catch up on your orders. And so this basically introduces a whole new way to look at the game, right? Because now what you can do is you can increase the average energy that an order cost, right? And you can basically make this a power progression economy where you're shifting the multiplier up and you're increasing the average cost per order and that basically holds constant the number of merges you need to do. And so that basically gets you slots style economics, which is really freaking cool, right? And so that means you also want to get balances to zero, right? You can get balances to zero at a quicker pace if the multiplier is on. So that introduces things like slot mechanics like the safety net is an incredible [ __ ] innovation from Jackpot Party that I've been trying to force onto merge, which is that when you hit zero energy, it rebounds you to a certain amount. So you're constantly having this incentive to rebound or hit the zero account balance mark. It incentivizes you to to basically bid down, which means you're going to turn on the

multiplier at a higher rate to get there. So there's all these cool things that you can never do before that I think are still evolving in this genre. Like having played a couple of these, like this has only begun. Like the gold rush has just begun. I expect this thing to definitely overtake match three in the next five years. I would be surprised if it didn't. I think match three is just a paradigm that no one's really done strong things to since the Super Light Ball innovation and there's so much more optimization in merge. And I know Jen, what what is your take on the genre? This is why I love our podcast. I love you that you're going to come at this from a purely economic side and I'm going to come at it from a completely different side as a player and then as a little bit from some psychology too of how we think about these things. And I think your analysis is spot on, especially from a monetization and an economy. I think I like what you're saying about you're monetizing impatience versus a fail state that you would see in some of the other games and so I agree with you. And just from a personal standpoint, I played the [ __ ] out of these games. I played the [ __ ] out of Royal Match,

which by the way this week Royal Match just introduced a mini game with merge two as one of the mini game progression components on the weekend. So I think you're right that even the match three people think that they have to get a piece of the pie from this. What I think you might be missing is that the economy and the monetization and the growth is likely coming from the card collection mechanics that we're seeing versus maybe in addition to what you are pointing out. And so what all of these card collection mechanics are, so basically, you know, the way it works is that you It's kind of like Pokémon cards. You get a pack of cards. There's like five tiers of rarity and then you basically are trying to complete these collections with a gotcha based card system. And so what we're looking at right now is it's the card collection mechanic in Gossip Harbor, in Royal Match, and then Monopoly Go. Wait, they all look almost exactly the same, don't they? Oh, isn't that interesting? And so

that is what I think is really causing this. So back in the day when I was playing Gossip Harbor, they did not have this card collection mechanic. And what I saw over time is that they first introduced the card collection mechanic, I think in in in my investigative shitty journalism, I think it started in August of '24. So we're looking at a graph and I just did the US and so the dark line is revenue, the dotted line is downloads. And so back in August of '24, that happened to coincide with starting the increase in revenue trajectory that kicked off this run. So when I looked at this, revenue started to explode at the time that this specific feature came in after being very very stable for a very long time. And the way that this works is in many of these games, there are social casino offers. Because they give you these offers that allow you a chance at getting the cards to complete your set, I think that's where all the

revenue is coming from. We saw this originally on Travel Town and I think Gossip Harbor then started to adopt it. And so for me, that's where I think this explosion in revenue is coming from, but Phil, I don't know how much you looked at that or didn't. From a psychology standpoint, I think it just adds over. What? I'm a little skeptical. Like so first off, Clash Royale did a card system recently too and everyone was like, what the [ __ ] What the
[laughter]
Everyone does it. It's not the right genre fit. The thing to keep in mind from an economy perspective is it's just an intermediate reward system, right? Cuz ultimately, it's still giving you like what happens? You open packs, packs have different collections of cards that are adjacent to some theme. You collect enough cards in the theme and you get a reward. Like that's the core of core delivery system. And the reward that they're giving out is still ends up always being reduced to energy, right? Everything is about energy in this economy. So they've just added another intermediary source for energy that you end up getting

by completing live ops events, right? Or however they distribute packs. They used to sometimes do it I think at the account level too. So to me, it it's hard to draw a straight line. If the argument here is that they're directly directly spending hard currency on packs and that's driving a significant share of revenue, I mean, I just have a hard time believing that. I think we need a better feature level explanation for why the genre has evolved. I don't buy what Eric Kress may say, which is just like they're pumping the books. Like they just woke up and they're like, [ __ ] it. 720-day payback, neutral margin, Chinese developers, let's go. Like I don't think that's the case. Like there's clearly something underneath the hood, Mishka. Like when you've gone through your explanations of like Love & Pies, remember the you the Brits didn't hold on to this. The Finns didn't hold on to this.
didn't touch it. It didn't touch it. No, the Brits didn't touch this one. No, it was like two of those are Supercell Studios, the Trailmix that has a quite seriously good founding team from former King London. And then you have the other Metacore. Yeah, Love & Pies. And then

you have the Metacore team. Interestingly enough, both of them set up a second studio in Berlin, which is not known to be the puzzle city. Albeit they do have good Turkish neighborhoods there. And anyway, they have a studio there. Or did? Yeah. What do they do? Rebel Riders. All right. Well,
[laughter]
exactly. To wrap this one TO WRAP THIS ONE UP, what I would say Phil is like let's go talk to some merge two people. Just have a standing bet with you that I think a lot of this comes from monetization of this feature. But are you still are you articulating that you think people spend hard currency on packs for this? You cannot directly buy in a sense a pack, but you buy grouped items. So sure, you're getting and you know, energy. In merge, it is all about the energy and that's what you're aiming to get. But because these systems are in other puzzle based sub genres, I think number one is it plays into the psychology of the collection mechanic, I got to catch them all, which is a certain kind of person motivation and

segment that is attracted to that. Number two is I think that in your purchase mechanics, they are offering bundles that give you a chance to complete your collection but not fully. So it includes then gotcha mechanics, includes the, you know, card based mechanics that we know and work in I mean this is why Magic the Gathering is still up. Like physical cards of Magic the Gathering are up like immense immense because you have rarity and scarcity in that mechanic.
hold utility though. They they they hold they hold utility in match three.
these. I mean well, these are checking the box. These are cosmetics, right? This is just a bar that goes up, right? It doesn't have to be cards. It could be anything, right? It's just a spreadsheet system where bars go up. And look, I agree with you. I don't doubt this is a positive effect. There's clearly reasons that it spread match games. What I at least contend is that we just showed a graph where revenue went from 6 million a month to 30 million a month. On the way there up. Like that's a big hole to fill by a feature. Like there's got there's got to be quite a bit that's

been done underneath the hood and I don't know enough yet about Gossip Harbor to know about the feature evolution of game. I have no doubt that cards have been a part of that story, but it's a big hole to fill. I think it had a big shovel that was filling that hole. Unless you've been living under a rock, you know this is Web Store Rumspringa. 70% of top apps are using a Web Store and the best ones, they're doing it with AppCharge. Do you want a $20,000 in-app purchase? Yeah, AppCharge does that. How about using web-based Apple Pay checkout? Yeah, AppCharge does that. Do you want to pretend that subscriptions are still a viable monetization a for games? Yeah, AppCharge even lets you do that. Look, these guys are backed by Supercell, Moon Active, and Playtika. They get what high average revenue per paying customer means, and they're already doing over half a billion dollars in transactions a year. So, are you going to be the first to do a $20,000 IAP? Don't accept the microtransactions, embrace macrotransactions. Learn more at appcharge.com.

Let's be honest, you're tired of chasing installs across the same crowded network. We all are. That's why Vybes built a new playbook. They're the fastest-growing gamified rewards platform, and they are helping studios scale smarter, not just bigger. Their AI-powered targeting means you will finally hit the audience you want, and with their new ROAS optimization engine, performance doesn't just grow, it actually levels up. So, if you're looking for a growth with a fresh angle, check out Vybes. It's built different, it's designed for growth, and it's powered by good vibes. So, head over to vybs.co, and get yourself some good vibes. Let's go to the next one. Um so, you have Devsisters and the feature franchise expansion of of Cookie Run, right? I will go briefly through this cuz it's a franchise we haven't covered in a long time. But, if you remember Cookie Run: Kingdom,

which was from the Korean developers, they have announced that they're doing a huge expansion to Cookie Run: Kingdom, and we've covered ArcRaders and a lot of what's going on in squad RPG. We haven't covered Cookie Run: Kingdom. If you remember, there's a Deconstructor Fun piece on it from Chase. Shout-out to Chase who works on Diablo Immortal now, Jen. I think we both worked with him, who like covered this quite extensively. Yep.
They're expanding the franchise. The game itself, Cookie Run: Kingdom, remember it combines builder elements with squad RPG, so you collected these cookies, and then you had a home base where you had all these buildings. There was some Invest Express There was a train. They did a lot of really fun stuff. They are announcing like a metaverse for Cookie Run: Kingdom, and because they are a publicly held Korean company, we can look at how they've done, and I've been really surprised how remarkable their success has been. They've been extremely steady in terms of revenue. They're starting to get like to a 250 to a 300 million a year business. I was surprised by that. So, I don't know I

don't know what to say about this other than like I think it's great that we still see a squad RPG that survives. I'm very skeptical of the games that they've announced. One is called Cookie Run: OvenBreak, and the other call is called Cookie Run: Tower Adventures, that either of these are going to have any sort of mileage or opportunity to expand. Like, I don't understand the thesis that there's just one pool of IP that players are highly interested in, and they'll play that IP in all these different mediums. I find that very hard to believe for live service game. I think it's a tough thesis to pedal, and I think a bunch of people have tried to make that true, and I just don't think it's been the case. Like, maybe match games, maybe launching like Homescapes and Gardenscapes. I mean, how many I mean, what's the marginal LTV on those two? I think it's tough, especially when the genres are so dramatically different. So, these are action RPGs that they have invested in. So, I'm very curious to see how their other one, which is a sandbox MMO, will do. They also announced that as an early screenshot. Right now, we're looking at Project N. This sounds just like crazy [ __ ] and the thing I can't understand,

Eric, is that whenever I look at these Korean developers, remember looking at Krafton, they invest in that like Japanese anime company. They always seem to be doing weird [ __ ] with their capital. Like, they're always spinning up investment firms, and I don't understand First of all, I know one has bought Devsisters. They seem like a prime acquisition target to me. Like, they have a steady business. Like, I don't understand why we keep talking about Moon Tonight. I want I want Cookie Run, right? And the other thing is I don't understand Korean weird investment [ __ ] Well, almost impossible to acquire Korean and Japanese companies unless you're Korean or Japanese, right? So, that's part of the problem, right? They're not acquisition candidates in the same vein as European or North American companies. But, this business, like, they're basically growing revenue at 24%, but their profitability went down 77%. So, that's not a sexy business, you know? Like, that's a tough business. They're not growing organically or profitable for that matter. So, Fair enough.
[laughter]
Sounds good. Look Look Look Look, I want I I want this team to succeed. I I don't I don't

understand this expansion thesis. I don't I don't I don't get it. I don't know enough about the their franchise or their brand. I would say that, you know, Subway Surfers tried to expand from a runner into other genres cuz they thought they had a character, and I think they've struggled with that. Sometimes you can, but it depends. Like, Cookie Run, I don't know I don't know. I don't know if that's like a an IP screaming for a platform expansion or a genre expansion, but maybe. Maybe they saw a concept testing that would take it that way. Maybe they have characters that have strong acquisition potential in other subgenres. I don't know. Nothing Nothing was worse than the Angry Birds guys who thought they were the next [ __ ] Disney with those little [ __ ] characters. [laughter] Well, I don't know. I I think that there's potential, but sometimes when you have a game team that specializes in a certain subgenre, it's kind of like the whole transmedia idea. You have to find experts in subgenres that know how to translate an IP into that subgenre successfully.
there was no value in their IP at all,

right? Really, when it came down to it. The characters were not
Well, hold on. Well, I think it was [laughter] too young. I think the audience was too young to successfully expand. So, what I had heard from Rovio, and we have a director of product at Rovio that worked there, is that they would always have these game concepts, and they would test them, but when they slapped on Angry Birds, the CPIs always went down. And so, like, that was always the story. And so, that to me was a clear example of Angry Birds IP value. Now, I don't know if you can make that same assumption for Cookie Run, which is the problem. No, no, Mishka, please tell us the tell us the truth. Yeah, I haven't been there. The truth is it's just everything was built even from the tech side, so around that the company is unable to scale anything outside Angry Birds. Like, even calculating the portfolio effect doesn't work. Like, everything is Angry Birds. If it's not Angry Birds, it's a fail state immediate. It's an Angry Birds company at Rovio. So, you So, you're saying because nothing was able to be bigger than the original? No, so let's put it this way. Like, if you're launching another Angry

Birds game, puzzle game, call it Angry Birds Match 12, they would be able to calculate the portfolio effect of that. So, basically, like, one install is more because there's the virality effect, because there's an effect as you advertise one Angry Birds game, it actually advertises other ones at the same time. So, there were a lot of the central tech was just built around publishing Angry Birds games. And I know that they would dispute that this is not the fact, but in practice, you can see it. Every single game that didn't have Angry Birds logo on it, despite launching, always failed in a very short amount of time. This measurement is built just like King has built their measurement around candy. Like, it can't do anything else except candy. If it's not candy, we can't touch it. Or they're They're like diabetics. Counter-diabetics, actually. All right. Do you want to do quickly your last one, Phil? Briefly, because we haven't had a chance where we've covered soft launch games yet. If you remember, there's been Supercell teams left and right that have

been getting venture capital, like one of the last vestiges of like mobile capital investment in particular in the West. And there seems to be like this obsession with extraction shooters somehow. So, if you remember, Misfits was one of the ones we'd covered recently, which had similar mechanics to that. There's also another one called Field Day, which is the one that's recently come out. It's by I think it's OddBit was another of the Supercell alumni invested
Bit Odd. Bit Odd, thank you. Sorry. I almost gave them an accidental rebrand there. And the thing that we find in both of them is they're kind of like these top-down isometric shooters, kind of similar to Moco, but with like more of an action element. Yeah, there there's clearly Brawl Stars, obviously, but they take place on like an open shard where you can encounter other players who are also engaging in a mission, which I view as like a really defining design choice. The thing I don't understand is where teams are seeing the revenue in this genre. Like, if you look at action, you look at RPG, like, they're not growing, right? Like, what

is the bull case? What is the market signal that you're playing on here that makes you think like this is a good idea? And I think you really you really have to hold on tight to action and Brawl Stars, because the Moco story is not a good one right now. Moco is not in a good place, right? This is This is basically a failed game. I think Ilkka barely mentioned it in his letter. I It just looks like it's it's dithering, right? I mean, it just a lot of Supercell dithering. And so, I really struggle to see what we think these games are going to do. I played both of them for a little bit, or at least watched videos of of some of the soft launch, and yeah, I don't get it. I don't get I don't know if anyone else has a better bull case for these, but I I struggle to see the thesis about like what what is mobile missing? It's so funny how we would make fun of like ex-Riot people starting up a you know, a PC console and getting all that investment. So, I think that you're you're right that there's a similar feeling of devs who work on a game at a Supercell or at a big company, and then they see, you know, people make

decisions that they don't like, and then they leave, and they think they can do it better in the same genre, and then they learn, "Oh, [ __ ] actually it's not that easy." and they might not remember all of the lessons learned along the way. And this kind of happens all the time. So, one of the things that I saw when I looked at that Field Day video, it's in portrait mode versus landscape mode when you play the game, and it reminded me of I don't know if you guys remember how Brawl Stars evolved. Brawl Stars started in portrait mode, and then through their testing, they realized it didn't work, and they switched it to landscape mode because that's just how you can hold the phone and play better. You can see more of the landscape. So, I was like, "Oh, did these young pups, I don't know actually if they're young pups or not, remember the failed game state that Brawl Stars had and the learnings that they had on that?" I don't know. And maybe or maybe they found a different way to kind of make that happen. To go to your other question is when you've got, in a sense, a game-defining subgenre with no other competitors, you might look at that and

say, "Well, that's a play pattern I can innovate on and find a different way to execute that. It's not a red ocean. It might actually be a blue ocean." That would be how I would think about doing this. And so, I would actually encourage people to go after that kind of an idea. If you've got only one leader, you know, why don't you see if you can do something a little bit differently? By the way, the one leader has been out for almost 10 years now. I'm going to go on more of a micro level. You guys talked a lot about on the on the genre. So, first of all, Bit Odd versus Misfits, there's a quite big of a difference. Bit Odd is the sort of a OG Supercell crew at the at the core. So, we're talking about people who literally made Clash of Clans and and some other, you know, $10 million hits. Misfits is more of like the second generation, mostly. So, that's that's the difference between the composure of the teams. Field Day, Field Day is fun. I've been playing it quite a lot. I've actually been enjoying it. I'm on the top leaderboards globally already. And you can't compare it to mobile. Oh, come on.

Like, I'm just not going to say anything. Maybe they should do a LinkedIn campaign, then you can compare it. So, what I like about this is the quick sessions. I like the accessibility, and the accessibility comes from that portrait mode game gameplay. I know it seems weird. I understand what you're saying, but actually in this one it works. In Brawl Stars, they did they did both the landscape and portrait, but in this one it really works for me at the top and then so forth. So, it's it's very good controls. I like that there's a lot of different characters, so that's kind of fun to try a new one rather than optimizing sort of like a one character and their loadouts. What they need to improve, and again, this game is in super early stages. It's like an MVP at this moment, and they're just talking about themselves just to get enough players so they can start tweaking and building from it. But, because it's in this MVP mode, it is very very grindy. The unlocks don't happen. Like, there's only a few characters, so there's a lot of gameplay between them. You know, they need everything more. They need five x more

everything to just get into a proper soft launch. Like, more characters, more upgrading vectors, more items, more ability to create character builds, more maps, more monsters, more everything. There's not much social at the moment. The one that struck me the most out of it was the marketability aspect. So, so hear me out. Like, because I I respect tremendously this team that that has built this game, and what specifically where this team is so strong is creating visual identity because they are essentially behind that a Nintendo-ish appeal of Supercell. So, when when I was playing this game, I was kind of surprised that that the characters were honestly, like in my opinion, again, opinion of one, very generic. Like, they're fun to play, they're differentiated in terms of meta, but if you're watching this video, for example, right now, feels like you you've seen it. Like, a female cop and The key artist like blue collar. It's like a construction worker worker. Yeah. It's a

female cop with a gun. It's Exactly. And then they they they're not characters. Like, generic female, generic construction worker, generic. That's what I mean. Generic pilot. And also, there's like, in Clash of Clans and other games, like, some people would say narrative is [ __ ] stupid. You know, you shouldn't do narrative. But, for me at least, I think narrative matters, and not even the narrative, but the setting. Like, I need to understand what's going on. Maybe I went through the tutorial too fast, but I don't know what's going on. Why does these village people essentially get, you know, parachuted off a off a helicopter into a war?
going to say, Mishka, we need like YMCA playing in the background
Yeah. Yeah. It could be It could be
[laughter]
It could be It could be It could be fun if the YMCA. But, like, and also, why is somebody parachuting out of a helicopter? That sounds like a suicide.
[laughter]
Because it doesn't go Anyways, I'm going into details, but it doesn't have to be the Assassin's Creed for it to be fun. But, just like, why is a cop landing and a and a construction worker, and why do they shoot each other? [laughter] So, that that that would
is an Italian plumber going to save a princess? But, but here's the Phil,

here's the Phil, Phil, this is a really good point that you raised. You said Italian plumber. Not a plumber. You said Italian plumber. And that's what I mean by character. New York. Add a component. New York Italian. Like, whatever, but that is a component because when you say plumber, we all think about different things. But, when you say an Italian plumber, I'm imagining mustache. I'm imagining a smell of oregano. Like, it's
[laughter]
It It is what it is. And And And the sort of like lack of the world-building element at the moment is a bummer. I'm hoping that they will add add to it. I know they have the capability. So, again, I don't want to be too critical because this game is very in a early phase. I enjoy playing it. I think it's fun. I think there's plenty to do, but the biggest risk what I'm saying, it's not a risk they don't have the world because I know they can build it. The biggest risk that I'm seeing is this is so much fun, at least to me, the core gameplay, that somebody else who doesn't smell like oregano, but more like enjoy soy sauce, will make a

version of this really fast, multiple different versions that are much deeper, and could be even more appealing visually, and launch it in this short amount of time. So, I'm worried of how are they able to keep up the pace because they have been going at it for a quite a while. I think they seed was 4 years ago. They just raised series A, so that means they're gearing up. So, it's been a hot minute, and, you know, they need to pick up speed. They need to do a lot of things to to get to the needed size to be a player in this market. I will plug the need for art testing and character and brand testing then at the beginning of a project because if you're complaining about it, I would have hoped they would have tested this. Typically, we do if you are doing it in the in the old-school correct way, as I would say, is so that you know that you've got, in a sense, appealing and acquisition-oriented characters, brands. So, maybe they've tested. Hopefully, they have. I don't know. It's a startup, so I always people skip that.

Eric's face had his own podcast. Yeah. What are we talking about? Like, this game
[laughter]
I'll keep it very simple. This is not a game for mobile, right? They're making a game that they want to make, an action game that is fun to play and gameplay and characters and setting. Who gives a [ __ ] right? We want Monopoly Go. We want something that's going to [ __ ] devastate the business. Like, just [ __ ] milk them for all their worth. Didn't give a [ __ ] ABOUT GAMEPLAY. I MEAN, I LIKE I DON'T know enough about this game. I haven't played it, but Brawl Stars is like crushed it. Yeah. It's because it's because it's because it's Supercell. That's not because it's it's it's a viable [ __ ] product category in the space. You look at the top four genres. It's 4X, puzzle, social casino, and RPG. Basically, games that like can extract money from you, right? Like, this is an action game that barely they barely make any money. This is not This is like a 5%er max in terms of revenue.

I'm opening box right now that is on the video that we're watching. This is the wrong game, fundamentally. This is as bad almost as bad as a MOBA, right? It's like, stop it. Like, this not going to be successful. Like, it's This is the same thing with Blizzard. Blizzard's making the wrong [ __ ] games, you know, because they they want to make these games, but that this is not the way where the market is in mobile, period, right? 90% of the revenue is driven by 4X, social casino, puzzle, and RPG, right? But, there's room like for
no room. This is why it's the [laughter] fallacy of this whole business. There is no [ __ ] room. Like, it's over.
The PE Eric. The PE Eric. Yeah. [laughter] I mean, that's why making some kind of VC in Europe to build mobile games is is [ __ ] It's absolutely [ __ ] right? The only thing that's successful is the Chinese and the [ __ ] Turkish, right? Who are [ __ ] so pragmatic and practical about what they're building. They're building the same [ __ ] game over and over and over again. They're just optimizing, optimizing, optimizing. Instead, in the West, we're making this really [ __ ] that no one's GOING TO BUY THEY MAY PLAY. I mean, gazillion

players may pay play, but they're not going to spend money on this [ __ ] right? This is It's not the right design, right? Fundamentally, okay? We got to stop this stuff. Like, we kind of This is like I feel like we're gaslighting the entire industry with this [ __ ] right? There's just no way that these games could be successful, full stop. That's the reality that we're in. What do you define success as then in this case?
Monopoly Go. No.
Every game that [ __ ] comes out of Turkey, right? Every game that comes out of Turkey. The Chinese have created five or six different [ __ ] 4X games that have destroyed it. Absolutely crushed it, RIGHT? WHERE IS OUR GAME?
What's an annual revenue number that would be successful?
Yeah. What is I thought You got to be gunning for $100 million. $100 million. I've been very consistent on this
$100 million. $100 million. Dollars, okay? If you're not making $100 million in a year
You don't think that this kind of game can make over $100 million a year? Because the UA costs are going to be $100 million.
[laughter]
The genre the genre's not big enough. I

mean, we we were just looking at the genre size. Like, you're looking at It's tiny. What is Brawl Stars doing?
[laughter]
This is the same thing I said last week. It's like, you have to understand what your TAM is. Your TAM is not $200 billion, right? Your TAM is what percent of mobile in the West is this genre? So, making a racing game, it's a 3% TAM in the West if you make a racing game. That is not a viable market. I don't care how good your racing game is, right? That's full stop, that. You could say that you can grow the market potentially, but even then, I wouldn't make a racing game. An action game is almost at that level. It's like 5% maybe, somewhere around there. I can't remember I looked in a while. But like it's so small, that's your TAM. So you're talking about mice nuts. Like it's so hard to compete. And who are you competing against? You're competing against [ __ ] Supercell.
Supercell, right? I mean this is an impossible impossible, right? Like we have to you have to be practical and pragmatic about this stuff. You're just throwing away money right now at this

stage. Hallelujah. Hallelujah. I don't know how
[laughter]
good this preach.
This game is This game is fun. You can You can join Who gives a [ __ ] Guys, guys, WE'RE WAY OVER.
[laughter]
WE'RE GOING TO WRAP UP FUN ANYMORE. ALL RIGHT. WE ENDED on an epic We ended on an epic Crash rant, and that's it for this episode. We'll see you next week. You did it. [music] You made it to the end of the episode. As a fan of the show, it would help us out if you'd subscribe and leave us a review on the podcast service of your [music] choice. Those stars and likes, while a small action on your part, mean a lot to us and help to grow the show. More importantly,
[music]
are you a member of the Deconstructor of Fun Slack group? If you have five years or more of games industry experience, go to [music] deconstructoroffun.com/slack and apply to join. Join the games industry best [music] professional community filled with peers always willing to lend a hand, or subscribe to our newsletter [music] to get all the latest insights from the

Deconstructor of Fun content creators. Thanks for listening.