TWIG #380: Game Pass Gets Cheaper, China's Mobile Dominance & Division Resurgence Reviewed

This is an admission that the whole Netflix for games model has failed. Now, what I'm interested to see is like what is Uber for games? Because that's the other one. Like what does that look like? I don't know.
Too much time with VCs, buddy. Too much time with [laughter]
Stop hanging with the tech bros, dude. Stop hanging with the tech bros. Hang with people.
My startup is Uber for games. Like, imagine it. [music] Hello everyone and welcome to Deconstructor Fun this weekend games number 380. I'm Jen Dano. I fill the marketing and publishing role in the podcast. Today we have
airrest strategy and investing.
Philip Black monetization Juan Yuen. We'll see if that pronunciation sticks. [laughter]
Mishka Katkov Frano the founders running on 5 hours of sleep. So let's do this.
Awesome. All right. Here's what we saw in the news. We may not get to everything, but give you our list. Xbox cuts game pass ultimate prices and Call

of Duty from the service. We're going to do a mobile market Q1 update. Deconstructor of fun style. So, we're going to just riff on what we think is interesting over the past quarter. The stop killing games initiative is gaining steam. The Division Resurgence launch. Phil's got a lot of great insight into what's going on with that game. and he also wants to make Chinese games moddable. You'll explain that hopefully. I wanted to talk about lots of activity with Japanese brands in gaming and media. Maybe it's showing a new content engine framework where games are at the center. San Rio and Tolli are both launching in-house game brands on the same day uh with no more licensing. Disney is quietly removing 15 games from Steam. We're wondering what's going on with that. and BAFTA happened and it completely ignored mobile except for giving ILA from Supercell an award an achievement award. So speaking of China earlier and your new intro Phil tell us

about your trip to China. Super interesting.
Nihow Mishka sent me out to go talk to some Chinese execs. I was in Shanghai for a week. First time in China. I can first of all confirm for the audience that you do not need a VPN to access the global version of Steam, which we sometimes talk about on this podcast. It is freely available. You sometimes want that VPN to get into the right servers and reduce your ping. But I thought that was a pretty fruitful confirmation. Two other small things I would say from this trip as a newbie in China, which of course, you know, after six days in one city, I'm sure I completely understand the place, is that Chinese wages are way higher than you might expect, particularly when we talk about superstars in the game industry.
It's not unheard of for star producers to earn as much as $1 million. The competition for talent ising fierce between these companies. They are willing to pay out. I mean we were talking about these companies in China spinning up firms for each individual

game the employees would own shares of that is becoming more and more common and remember we have Lilith and Fun Plus who have talked about this on record and this is a response to that competition. The other thing is that dividend tax is only 20% in China. It actually has a lower tax burden than Sweden. Take that for what you will but I think that that's really interesting. The Vietnamese outsourcing that certainly is real. Like as wages rise, it becomes increasingly beneficial to outsource to other countries. Vietnam geographically close. Some cultural similarities. Makes a lot of sense for that to happen. Very fruitful trip, very interesting market, very interesting place. I hope to go back and understand even more about it next time. Highly recommend people visit. I mean, I only went to Shanghai. Far more European in many places than you would expect, partly due to colonialism, but beautiful, wonderful, nothing but great things to say. I also heard it's like going to the future. All my friends say that compared to especially the US, it feels like the future.

Compared to us, everything feels like the future. [laughter]
I mean, look, look, they have DD, which is their Uber, which is like four bucks. I mean, I don't know if like poor wages for these drivers is the future. But yeah, like convenience is nice. They have a lot of convenience. That certainly is true.
Say Dubai is more like a future, but yeah. Anyways, uh Oh, so shilling. Yeah, Yoki Makan was actually on the podcast this Monday. So Yoki Makran of Elite Game Developers. We actually go way way back with him. We both came out through the Finland booming gaming economy at one point and he was an investor and a board observer at my startup. So we have the background. Moreover, if you don't know Yakim, he built two game companies. One first one was a disaster. Second one was a massive success IPO sold to Netflix. So then he started a podcast become had the popular newsletter elite game developers if you haven't subscribed made about 50 angel investments then launched his own fund and I thought that he's going to be the next Harry Stebings. So I'm like this guy is it and then in this podcast we

basically discuss why he stepped down from the fund that he started. So that was my lead in. So check it out.
Oh and I wanted to give a shout out to South Africans cohort launched control. It's a new tool that puts PLTV at the fingertips of every UA manager. Now, I'm not an investor. I'm not a client myself. I have companies that that work with them and use them as a platform. I just wanted to give a shout out to to Dan Marcus and his company. I think it's really cool and really useful. So, cohort with a K.
Oh, okay. All right. No corrections were perfect. Awesome. So, let's get into our first
Chris is holding his head. I don't know what, but but Chris, just give it
I I really love cuz he's the only person that I know in gaming that's paler than I am. So,
I'm going to leave what you said as it is, but that is not the narrative I've been told or heard about Yoki. But, okay, moving on. Eiffel Tower, iconic. Tower of London,

historic. The two towers simply epic. But none of them tell you anything about mobile app intelligence, downloads, revenue, active users, and my personal favorite, weekly cohorted retention. Get the real story, get the real data. Get Sensor Tower today. Game devs. Here at Heroic Labs, we know that great gameplay is what players love. But integrating metagame features like challenges, progression, and rewards is crucial for retention and monetization. But coding them is a tedious and timeconuming [music] process. That's why top studios have turned to Hero from Heroic Claps. Hero provides a complete suite of battle tested metagame features that are quick to implement, letting you [music] spend more time on the core gameplay experience. Ready to ship fully featured engaging games? Check out Hero today at heroiclabs.com. All right, Xbox has reduced the price of Game Pass Ultimate by over 23% from 29.99 to $22.99 a month. It's also

reduced PC game pass from $1649 to $13.99 a month. As a result, Call of Duty games will not be included in the service when they launch. So, this is completely different than where it was. New Call of Duty titles will now arrive on Game Pass Ultimate and PC Game Pass around a year later. Existing Call of Duty games, including last year's Black Ops 7, will remain available in the service. Okay, Crest. So, last week, I let you have one sentence. I'll give you a little bit more this week. Last week, I think it was You know, the price reductions were rumored because Asha Sharma put a internal memo out that leaked, but I'm actually really surprised pleasantly that this moves so fast given how big companies usually take forever. It's like a battleship kind of moving versus the speedbo. So, what's your take this coming out so quickly and what they're trying to do?
This kind of makes sense in a in a lot of levels really. I mean, it doesn't solve jack [ __ ] right? like subscriptions are still terrible for this industry and certainly not helping Microsoft differentiate their platform

and it results in cannibalization and obviously market share from Xbox continues to deteriorate. So this solves nothing just to be clear. However, reducing price so quickly shows that Chararma is actually doing something. You know, let's be clear here. The value proposition of $275 for a subscription without Call of Duty doesn't make sense for the average consumer. That's not a value prop. Like consumers are not idiots. Like $275 is a lot of [ __ ] money for the [ __ ] that Xbox is producing, right? Like, and fortunately and unfortunately, this year is actually a better year for Xbox in terms of releases. But if you look over the last three years, dude, nothing is worth $275. Like, it's insane, right? And the fact is that this type of subscription is for hardcore fans only. And that's dwindling by the day. like you're adding you're putting all your content on PlayStation. Like why would you buy an Xbox? So I just don't think this really makes sense over the long term. I will say though that the value proposition for the PC

one [laughter] like that actually seems pretty good. Like at 13 bucks a month, I mean I don't know that actually feels a lot better, right? In terms of of a value prop even for someone like myself. Again, this seems like a stop gap measure. This is basically showing that she's doing something, you know, you know, she's decisive, she's quick to action, which is totally on brand for someone an apex predator, but it doesn't really show that she has any appreciation of the broader issues about how [ __ ] [ __ ] up Xbox is and how poorly positioned they are with both content and service and the consumer and this [ __ ] thousand console that's coming out. So, they they got a lot of work to do. I think again this is Scott back measure she needs to do something more dramatic to even hope to get gain back share and what she will see is when she does this price break it ain't going to do [ __ ] you know that's what's going to happen right it ain't going to do [ __ ]
the price break plus the ad tier to help

make up the revenue that's what Netflix is doing if you Netflix just had their earnings and if you listen they out of nowhere over the last two years Netflix advertising is like $3 billion And I get gaming is different and I understand, but if it's outside the game, not inside the game, it could have been a way to like deal with that.
No.
How would the ads work?
Well, I metal point of why it worked for Netflix is because they could expand the audience, right? There is no audience. There's no more audience to expand to. Like no one wants to play Fable, right? The the the 100 million people or 200 million people that [ __ ] buy consoles, they want to play Fable or a portion of them want to play Fable. There's no one incremental. You know, my mom and my aunt are not gonna play [ __ ] Fable. Okay, so that's the ad tier you're talking about. It doesn't make any sense. I mean, how many times do I have to go through this? It's like [laughter] I feel like I'm just like screaming at the clouds at this point. Jesus Christ, this is so dumb.
Let me try this angle on you then. So, if they remove Call of Duty from Game Pass, then what was Call of Duty the

whole point of buying them really for? I felt like that was the key reason. And all of the marketing as I talked about when it launched, everything about Game Pass and the ultimate tier was Call of Duty, Call of Duty, Call of Duty. And remember the court battles that everyone was freaked out that there would be, you know, consumers weren't going to be able to get it if it was inside Microsoft and they had to do all the deals. Remember Ubisoft had to take on their streaming service in Europe. So all of this was for what? In addition, like let's look at the math. So, it's an $84 a year savings, but they're removing a $70 game. So, Phil, help me with some math logic. Does that does that work out?
Every time I've seen someone try to do like game subscription math, it always like falls apart. The most amazing part was when I was at EA. Remember remember Origin?
Oh, yeah. Oh, I do.
That became EA Play. If you remember, part of the value proposition, I believe it still is available, is you also save 10% on MTX, right? 10% purchases across

EA's portfolio of games. Now, you would do the math in your head and say, "Okay, well, who's likely to convert?" Well, you would think it's the people who play FIFA Ultimate Team and play Madden Ultimate Team that are huge spenders, right? Cuz if I get a 10% discount and I'm spending, let's say, $10,000, $15,000, I mean, that's a crazy savings, right? Even with that crazy savings that they would have, we still were not able to get those type of users to subscribe to EA Play. And so math is the wrong way to look at this. The the full game math that people would do also doesn't work because remember a lot of people buy games at discount too, right? You're only looking at the first wave of consumers who are playing full price. A lot of consumers will pick up, let's say, FIFA at a disc or FC at, you know, a far discounted rate a couple months down the line. So that math kind of falls apart, too. But I think none of that economic calculation works because western consumers in games do not play a multitude of games over the course of the year. That audience is very small. This is why subscriptions are

fundamentally incompatible with the nature of games. We've gone this over a million times. Gamefly on live all this [ __ ] It never [ __ ] works. No one learns. No one wants to take the lesson. And yet this is just playing with numbers. It is a failed strategy. She needs to pivot out of this. I think she knows it. But she has to understand the nature of gaming. This is why when you bring in an exec from a different point of view, they all like to hammer home subscriptions. Why can't we be the Netflix of games? All these analogies and there are very clear reasons for that that Phil Spencer apparently did not absorb that hopefully in, you know, his mind meld with her when he left. He was able to do some lessons onto her. But she had the mandate to finally get rid of Game Pass. She had the mandate to pivot out of this failed strategy. And instead, it looks like she's doubling down. And I think that's a huge mistake.
I'm going to defend her a little bit. I think she just needs to show that she's doing something like she has the range. She has control. She's going to make changes. This is an easy easy way for her to do that. This is what Jen's book says from last week that you got to make

an impact in 60 days. But just doing [ __ ] I think, is a waste of time. What they need is they need a pivot and a reboot.
It makes sense for her to do this now and then hopefully pivot into something extreme later. But I don't think she's in any position to pivot now. she has to like sell this internally even you know to to the C CEO and stuff.
I I felt like from product perspective they just you know looked at the churn data and cut the prices. It wasn't anything about the consumer feedback. I think it's because of the COD users kind of coming in subbing for a month or two and then churning out. They realized that they're cannibalizing both the full price game sales and inflating the subscriber counts with kind of like zero long-term value. And so they removed that day one cod access and dropped the price at a margin play disguised in a way like as a consumer win. And I think there's a credit where credit is due because they originally raised the prices by 50%. They got the backlash and now dropped by 23%. And they basically

cover it as a discount even though the price increased 35% in 2-year period. So I think that's very smartly done. But overall, I agree with everything that you guys said and that is that this is an admission that the whole Netflix for games model has failed. It was the original pitch in 2018. We're going to put everything day one subs grow, install brace grow, we got to monetize through engagement. We're going to put in some inapp purchases. 7 years later, it's just all chaos. Now, what I'm interested to see is like what is Uber for games? Because that's the other one. Like what does that look like? That's a new pitch.
I don't know. too much time with VCs, buddy. Too much, [laughter] dude.
Stop hanging with the tech bros, dude. Stop hanging with the tech bros. Hanging with people.
My startup is Uber for games. Like, imagine it. I don't know what it is, but sounds like something you could raise money on.
Oh jeez. What's the Instacart for All right, so let's go from console talk to mobile talk. So, Chris, I know you pulled a bunch of numbers. Yeah. Let's go over Q1.
Yeah, bear with me. There's a lot of

numbers ahead of you, but generally speaking, I used to do this all the time for Warner and Foris and and just doing quarterly updates just to track what's happening in the western markets. Just to be clear, the western markets includes North America, CA, which is Canada and US and includes all of Europe and Australia. So, this is what the market that I'm looking at just to be clear. All right. So, so far in the quarter market's up 3% year-over-year, which is consistent with minimal growth. is driven by a 19% 19% increase in puzzle games. For [ __ ] sake, there's an insatiable need for puzzle games in this [ __ ] world, dude. These 55year-old ladies got to get out of the goddamn house. Just kidding.
It's not just 55y old ladies. But fine, if you want to make a generalization,
a 7% increase in strategy. Casino is down 10%, simulation is down 12, and RPG continues to deteriorate down seven. So to delve into the puzzle category first.

So year-over-year match swap is flat right while match merge 2 is up 91%.
Gossip harbor. Gossip harbor.
It is gossip harbor primarily. Merge 2 is just doing it. Sword games are also up but they are up 310% but it's a very low base so it's not really all that interesting yet but still that is up and coming. Overall downloads are continuing to drag. We are down 13% year-over-year and that is just not good news. That means that still the established players are driving most of the revenue and new games are having a tougher time to gain downloads. So the major releases so far in 2026 are Ark Knight's Enfield, Last Asylum Plague, Coin Master Board Adventure. And just to give a little bit of detail, Ark Knight's Enfield is a Japanese RPG, really not replicable for Western game developers, and it's doing extremely well in Japan, but doing well in US as well. Last Asylum Plague is a

Chinese strategy game integrating gameplay from hypocasual games into a core 4X game with unique theme. Does that sound familiar to anybody in the strategy category?
Wow. I wonder coin master has made board adventure which sorry coin master board adventure is from moon active which is basically a [ __ ] copy of Monopoly Go. My garden tale is a Chinese version of Township.
Hollywood Merge is a puzzle game based by another Chinese company. So you guys see some themes here some ongoing themes. [laughter] So anyway by publisher by country. Again another theme we've been talking about for years now. Chinese, Hong Kong, and Singapore are up 18% year-over-year. Turkey is up 28% year-over-year. US publishers are down 12% and Europe is probably very similar.
And again, to see the scale of these companies, Chinese, Hong Kong, and Singapore represents 30% of the overall revenue in the West. 30%. This is up

from 16% in the 2019. China represents 60% of the strategy revenue. the second largest genre in the business. This is up from 40% in 2020 and up from 11% in 2015. People, they are kicking our ass right now. Like [laughter] this is bad news bears, man. US and Europe is just not competing, right? And then finally, Turkey has grown from 2% in 2019 to over 10% of the market in 2026.
Oh my god. just I think we have the massive data behind what we've been saying on the podcast for the last I don't know 6 months or so. Those numbers are crazy and they're going into new categories and genres that they haven't been in before.
It's just insane.
All right, so the I want to dive into a couple of games a little bit deeper than what you were talking about. So we're looking at a slide I pulled from Sensor

Tower. This is tier one. So staying on Crest's tier one topic. top games by revenue of the last 90 days to see trends versus prior month. And so a quick rundown of the top 10. You got let's me click in here like Monopoly Go, Royal Match, Last War, Candy Crush, Gossip Harbor. So what I'm really fascinated again like Gossip Harbor gave you some of those numbers. It's growing. So it's now ranked top five. It's up 16% in revenue and 26% in downloads versus the prior 90 days. And the only other game to really show like that level of growth, a little bit of coin master, but was also Pokémon Go. So the next slide shows for Pokemon Go that hey Crest all that brand marketing is really paying off because it's their 30th anniversary and during the the massive spike that they had in Pokémon Go they were up 14% revenue 52% in downloads and downloads

have actually continued coming in after the big anniversary event happened in March. So the March event was from March 3rd to 9th focusing on some region in Pokemon. The the Q1 event commemorates the 96 of the re release of the first Pokemon games. So that happened. So Phil, I would love to get your comments there. But the one other thing I just wanted to say was I was surprised that Roblox wasn't in the top 10. When I was looking at 90 days, it was in the top 14 revenue and then the last 30 days it's grown to the top 11 spot. So, it looks like Roblox mobile from an IEP perspective is coming in hot. So, those were some things I just wanted to pull out I thought were interesting from a game perspective.
The Pokemon Go [ __ ] the brand stuff. I mean, like look, I want to give you your moment in the sun, but like at [laughter] the end of the day, Scopley did take over and you imagine that they are probably juicing UA, but I'm looking at the downloads and I'm not really

seeing it a little bit in March, but like
they're just better operators than Niantic. Of course they're going to add value. Like come on.
No, I know. But I'm just I I don't want an event.
You can't attribute all with brand. It's all about the event and driving UA, right?
I am not attributing all of it to one specific marketing activity. The sum is greater than the whole of the parts. And so, and this is the whole thing with trans media versus French. Like all of it has to happen at the same time to get results. So, it's in-game events. It is everything going on with the brand. It's everything surrounding it. And that looks like a revenue spike that you can't argue away that it's just Scopely being an operator. Like I I don't see that being the the specific answer.
Let me show let me show another graph. So this is from the REM invest game report based on sensor tower data. This is showing the annual gross inapp purchase revenue by publisher HQ. And then the second graph is showing annual

combined average monthly active user by publisher HQ. So looking really at the countries where the games are coming from. China is absolutely crushing it. And the craziest thing is in my conversation with the with the Chinese leadership, they were saying that their home market, so games launched on other platforms inside China account for additional 30% of revenue. So if we'd be seeing the real number how how much these top companies make and month I would be crying. So they are really really dominating it both in the west and in their home markets. The other interesting part from the Chinese perspective talking to some of the CEOs they said like we don't want to be dominating in the west so much like we want western companies to be more competitive because when they start dominating this badly they know that there's going to be some sort of even governmental backlash so they want the competition and unfortunately we're not giving them much of that unless we're talking about Turks. And I also asked

them like what happens in match three the insatiable need for puzzle games. And I was like Chinese are gonna probably you know make a next match three game what this year next year that's going to rival the Turkish companies. Like no no no no they're way ahead of us. Give us like two to three years like oh lord. So we'll see what happens on that. The other elements that comes in from this graph is Pakistan and Vietnam. These are the new growth markets like companies like Ammonotus, Game District, come on billions of installs, hundreds of developers, tens of millions in ad revenue. Most interestingly, they don't have VC money. They are bootstrapped, funded their own growth, funding their own profit. So very interesting to see again this sort of old school model functioning. And
dude, there's no ad revenue generating from Pakistan, dude. Like
no, no, no. the the HQ of a game, let's say Supermarket Simulator or any other type of a hybrid to casual, hyper casual game that is made out of Pakistan or

Vietnam is generating ad monetization worldwide. Of course, mainly in the US, but in the West, you're saying,
dude, it's mice nuts, dude. Like, what we're not talking this is not material.
It's it's it's less than 100 million for sure, but it's not far away from top developers.
That's well, it's below 100 million. Below the line, below the line. It's below. It's below 100 million. He's absolutely correct.
Talking about India, Vietnam, and Pakistan as markets. You're out of your goddamn mind.
I'm talking about four four companies that are coming through there. Like there's a lot of I I think they are the growth markets in terms of where the next companies
stop no they're making games like Vietnam has become more of a hotbed for game development. Yes. For hyper.
Same as Pakistan. Look, 43% up
43% up. 43% of DA or amu or whatever. This is like a [ __ ] STATISTIC. THAT'S WHY THEY DON'T have revenue because they're hyper casual games cuz you don't see this is inapp purchas.

This is how people go down the wrong [ __ ] path and start investing in [ __ ] dude. Like what's happening in the market? China is killing us out there, right?
Well, hold on, hold on, hold on. Okay, hold on. Eric, I think you've been fundamentally I think everyone, not just you, Eric, but tons of people have fundamentally misunderstood what's happening in the West. So, the argument that I would present is that the United States is still and not only still but increasingly driving consumer demand. I don't think that's something that we should ignore. So, if you look at Forex strategy revenue as one example, so you were mentioning that it's dominated by Chinese games and a couple in particular. Increasingly, the share of Forex revenue has come from the United States. So, if we just compare the United States and China, when it comes to Forex,
I know I'm getting there. Hold on. This is not an irrelevant point, is that 70% of Forex revenue is from US consumers and that has increased where it used to only be about 40% relative to China. China actually used to be majority share

at least by 2018 in forex revenue in the United States has increasingly dominated. Right? Why is the United States increasingly dominating from a consumer perspective? Because now this positions China as making games for the US market. That's a new revelation. I think that's important. It's important when we talk about the geopolitics of the situation. And why is that happening? Because the United States continues to have wages rise. Not only that, our wages are rising at a greater rate than China. And not only that, remember we're starting from a higher base. So if you're growing at 3% real wages per year, the actual real spending power that is increasing is enormous. And so what happens, right, when you have wages rise, we keep talking about US content being really expensive to develop, right? US developers are very expensive. Why are US developers really expensive? Well, because we're extremely productive and we have competition from, say, Chat GDP, from Cloud, from Anthropic, all these different companies. And so we're not making content anymore. This is what you're seeing. We are not the most profitable

place to make content. So what are we doing instead? We're doing what we've always done. We're moving up the supply chain to higher margin opportunities. What are higher margin opportunities inside of games? It's owning the platform. Platform is the highest part of the supply chain. It's owning the engines. It's owning Roblox. It's owning Steam Marketplace. These are all the highest possible margin things you can do. This is the best part of the supply chain to be a part of. Why do you want to compete in content anymore, Eric? Why do you want to do this? Why do you want to compete with the Chinese where there's no moat in mobile? There's zero moat. Anything you make in the west is instantly going to be copied by the Chinese. It's low margin. This Andrew Wilson was right. Andrew Wilson was right. You cannot compete with the Chinese unless you have IP like we talked about Pokémon Go because everything is just going to be copied and reverse engineered. There's no way a US developer is going to be able to go after merge. Instead, we should focus on again the highest part of supply chain being a platform being Steam, being Unity, being Unreal, being Roblox. That is where the future of Western development lies. Not in content, but in

platforms.
Ironically though, the you're talking about the least profitable platforms like Roblox and UFN, right? Like Steam. Yes, obviously that's hugely profitable, but like
you're not finding much profit on Roblox, right?
That's Come on. You You know that's not true. You know, they're playing with the P&L. It's a it's no huge upfront capital costs.
I know. But they're literally marginally not profitable, particularly in their expansion outside of the US, right? Like they're spending insane amount of money to deliver this content.
Just not paying taxes.
What?
What? Yeah. Because if they're unprofitable, they don't have to pay taxes. They're This is an accounting game. It's not true.
I'm not going to go over this again. Like
Yeah. Let's Let's Let's not enter that domain. But a market cap of 40 billion, Eric, a market cap of 40 billion. You're telling me you don't want to own Roblox instead of be a content factory? I'd much rather be sitting in Silicon Valley working for Roblox earning $ 1.5 million a year as a mid-level employee. That seems like a pretty good situation.
Tens of thousands of game developers out

there trying to build games and like what three companies that have platforms. There's not enough opportunity for these.
So, we should give up in the in the US. Phil,
th this is our comparative advantage. Now we have higher margin opportunities for the types of people that we normally use for game development. They should be building AI platforms. They should be working on Roblox. They should be working on Steam. This is their best place they should go. We are not going to be a content factory on mobile. HD, I think, is a different story because I think brand gives us a moat that the Chinese can't copy. But on mobile, we're going to get destroyed. And you agree with this, Eric.
I'm trying to disagree with you, but I agree with you. But I'm like I'm hoping that's not the case because we got a lot of [ __ ] people in mobile in Europe and North America that basically are cooked, right?
But but it's not like our wages are declining either. Like that's the important point here, right? If demand was going down, our wages should decrease.
No, but there will be no wages if there's no opportunity to develop games.
But but like cheaper than Chinese. Europeans are cheaper than Chinese at

this point.
Well, that's Well, I mean, it depends whether or not you're considering like the added payroll tax of a Swedish employee at 30%. And I I'm not quite sure they're not as productive. I don't think you're going to see doing 996.
Yeah, I think I interesting point. I have to think about this because
yeah, I have a project that I'm thinking about working on that really kind of [laughter] exactly what you're talking about.
David Ricardo was right. This is comparative advantage at work. There is no response to this, Eric. There is no response to this except to move up the supply chain. There is no other solution. We will not exactly why Ni shut down the Marvel Rival studio. We could regulate though. We could regulate Chinese from bringing games to our market, right? We're gonna talk about that.
I I think that's a very interesting geopolitical tool. I think the fact that the majority of forex revenue is coming from the United States and the US consumer is now driving the Chinese story because again, Chinese growth is stalling. I think that's a very interesting bargaining chip.
I would agree with you on that.
I think that would be fair to be honest because like we can't enter that market.
I've been talking about
no more domestic publishers.
Yeah.
Yeah. I think you're right about this

one. I think this is a very interesting geopolitical tool. Okay, what about this solution? You know, kind of the the the codev solution. So, you've got Call of Duty Mobile that, you know, has a US kind of arm with TEI or what Riot does with, you know, some of their games or Diablo Immortal with CodeVev. So, you've got kind of Westernled IP, Westernled concepting, but Chinese kind of developer.
But again, but that hasn't worked out. I mean, that's only worked out for two games, right? The rest of the game's been
and it has worked out for Chinese.
Well, well, hold on. Hold on. Let's bring up the survival bias plane. We don't know how many times it's been tried. We don't know what the hit rate or we have a lot of data points that suggest.
So, Apex Legends Apex Legends
COD Mobile COD Mobile.
Yeah, but Apex Legends.
First of all, first of all, Apex Legends was a success. We know that that business shenanigans killed that. That increases the hit rate. That was a success story.
How is that a success story? The game is like cancelled after 6 months.

Yeah. Yeah. But There was a reason why it was cancelled. There was a Yeah, exactly. It was due to the relationships.
We got multiple reports on that. Pretty sour. And the Chinese walked away. They walked away. They're like, "Keep your [ __ ] game." And they walked away.
But hold on, hold on. Let's go back to Jen's original point. Original point, which I think holds holds true. And this is what I found. Again, I spent six days in China. do I know but still the feedback I got from Chinese developers very good at taking orders but when it comes to the more innovative freethinking piece that I think the west is really good at that's something they struggle with right now so again I think western product management western IP combined with Chinese scale which they're incredible at their machines I think is a very interesting combo
let's do more of this
I think that's a fascinating way to do I think Blizzard's shipment of Their IP to Korea is also interesting. I think that stuff is fascinating and I think western product managers should be involved though. I don't think you should dump.

Have you talked to Phil? Have you talked to for example people who worked on COD Mobile or any of these other titles of what it was like worked for Scop? Well,
and they said [laughter] and they said yes.
I don't think it was Kumbaya.
Yeah, exactly. That's what I mean.
But but because you're selling this as like this is a match made in heaven and it's not. Well, I think it's always going to be a contentious relationship, but I would say look at at the end of the day, they made magic. They made beautiful babies, so who cares if it was feisty to get there.
All right. Okay. [clears throat] Well, good good discussion. Thank you, Phil. Good [laughter] way to way to bum out the entire mobile game industry and tier one. Appreciate your analysis.
We still got Roblox.
Let's talk about people who don't want to kill games
in today's hyperco competitive digital landscape. Understanding your app's journey from discovery to download isn't just insightful. It's the difference between scaling and stagnating. Enter Appslier, the undisputed leader in

mobile attribution and marketing analytics. They've mastered the science of making every ad dollar work harder by revealing exactly where your players come from and how they interact with your app. Their platform transform mountains of complex data into clear actionable intelligence that separates winning campaigns from budget draining experiments. And I know that many of the top game companies leverage Apps flyier and are a key partner in their success. Appslier, where your app's potential meets performance.
Let's be honest, you're tired of chasing installs across the same crowded networks. We all are. That's why Wibes 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 raw optimization engine, performance doesn't just grow, it actually levels up. So, if you're

looking for growth with a fresh angle, check out Vibes. It's built different. It's designed for growth and it's powered by good vibes. So head over to vbs.co and get yourself some good vibes.
Using clunky payment systems in your game. That's like fighting a boss with a wooden sword. App charge gives you the power up you need. Seamless inapp purchases, global payments, and analytics that don't require a PhD. Monetize smarter, not harder. App charge. because your game deserves better loot. All right. Well, let me just do the summary and I and then I'll I'll kick it to you guys. So, there is something called the Stop Killing Games Initiative. It's a global campaign that seeks to establish legal requirements for video game publishers to leave games in a functional playable state after the official support ends, preventing them from becoming unplayable bricks. Well, I don't know what a brick is if it's digital. When servers are shut down,

organizers argued that the game suns setting is a business and design choice, not a technical necessity. They're pushing for requirements to ensure the game remains functional in some sort of capacity. After the official support ends, members of the European Parliament from across the political spectrum responded positively to the initiative. This hearing marks the first formal step in the EU legislative process following a petition with 1.3 million verified signatures and the launch of the new NOS's in both the U EU and the US to combat long-term industry lobbying. Phil, what the hell is going on?
Uh the EU, do you notice how in our previous conversation they were irrelevant to the geopolitics and economics of the situation? Well, they've decided to double down with stupid legislation like this, which by the way isn't even legislation. This is what happens when Reddit mods actually have to reveal themselves in public and speak in front of the EU Parliament. Look, I think that the intent as always is great. They want to continue to play

games, but when you think about the actual regulatory burden that something like this would impose, it is insane, right? Because if you're going to make sure that a game can always be accessible, even if the developer itself doesn't or the publisher has to run the servers, that means you have to disable things like DRM callback, which opens you up to potential security risks. You essentially are handing over the game to the community. And you're relinquishing, I would argue, part of your IP ownership. And I believe that yes, firms should be able to own their IP and have freedom of contracting and how they want consumers to be able to engage with their product. And if they don't like those terms, then they don't have to use that product. But again, this is the EU just adding more and more costs to development, which will make it more and more unfriendly place to do business. Thank you, EU. I'm sure this is what you needed to help support your flailing confident in wages. Sorry. Go ahead.
Yeah.
Well, I the quick point I wanted to make is like I don't understand is like when I go see a movie and I walk out of the movie theater, I don't ask for my money back because I don't like own the movie that I just consumed. And I know the

analogy isn't perfect, but like not all entertainment is meant to be durable in this case. So I don't know. But Mishko, what do you
I think that fails though because then you you could argue that a DV, you know, why why does a DVD stop suddenly suddenly working? That's that's weird. Like I think that's what the EU stop killing games would advocate is this is
we have to go find a DVD player.
But they're saying the DVD itself doesn't play anymore. This is EU doing what it does best which is regulate American tech company's business models under the banner of consumer rights and in the process making EU the most hostile region for business innovation which is kind of ironic because the whole idea was to set up this EU as a trade trade union to boost economies. Anyways, whole article was like, "Oh, the hearing went really well." They had no [ __ ] Nobody had to make any commitments in that meeting, in that hearing. And this is like performative as as any of these EU hearings are. The real test is when the draft hits legislation and the industry lobbies

show up. But in gaming, we don't have industry lobbyists. So, I guess Reddit modders will make our laws. [laughter]
Yeah, we do in the US. It's called the ESA.
Yeah. Not Not in EU. Not in EU. we'll just take it. We'll have ILA's email like or like a what is it called? Like a public letter to them. And the thing is like this is not this first attack on on gaming that the the one attack that is going on is actually on freeto play where they want to kill freeto-play games with banners and basically just make them impossible in EU. It's not only loot boxes, it's everything free to play. That's going forward nicely. And this is just making sure that the Steam live service games dies also. But anyways, like if this becomes EU regulation, the downstream implication for any live service titles are massive because you know you have to basically build an exit architecture and the compliance cost alone could reshape how smaller studios or even larger studios approach live service and stop killing games actually kills games. It's pretty

interesting approach because you know worst case scenario what would happen is big companies just won't publish in EU their live service title because of this regulation or they would publish only after the game becomes large and successful and so we're losing out again with the regulations but we're killing it with the regulations game
I got two points this is all I want to say one stop killing games will basically kill new games basically in this type of situation Right. It's [ __ ] stupid. Really. The second thing is every statistic I've seen about people who play older games, it is like less than a fraction of a percent of people that actually do this on a regular basis. So, you're basically cowtowing to like the smallest number of people, the super hardcore people that are interested in this under some guys here. And so, it doesn't make sense to even do this. The people don't play old games, they play new games. That's like the whole thing with this business, you

know, and so and they don't go back to old games, you know, like like backwards compatibility for instance, you talk to Sony, backwards compatibility on PlayStation 5, of all the owners, less than 1% of the actual people play backwards compatible games on the console, right? Like it's that small, right? So, stop.
Yeah. Yeah. Players say they want it, but you know, when you do consumer insights, everyone always says it's important, but no one actually does it. and backwards compatibility constantly is a feature on the consoles that is pushed all the time.
But the reality of it is is that a very very small fraction of people actually do it.
I get that game historians might want like hey I want to go back and play Sims one or you know like and so I you know a lot of this is lost like it's completely gone once it goes away but like how do you keep these games alive if it's a cost to a developer making a new game?
How many [ __ ] game historians are there? [laughter] Come on.
Oh, I'm not like I'm not arguing for I'm just saying that well I mean they're out

there and they're trying to track like what happens. It is kind of interesting to think that a lot of especially now that we're in this more server oriented world like it goes away. Look, how about this? You know, it's kind of how about this? Let let me let me just throw another thing out there. Hey, I want the version of Gmail from 10 years ago. Like I I want that version available to me, please. like I why can't I have something that I was using before, right? And maybe I didn't buy it. I get that. But it's like it's kind of like that, right? I just I need my new old version of I I want my original iPhone to work properly, right? Let's do that. I have this my original iPhone in my drawer. I want to boot it up and use it, be able to call people. Like
I'm going to pull out I'm going to pull out like look look at this. Look what I still have my Look at Look at that. Exactly.
Look at that. that's probably worth money because kids can't bring their phones to school anymore and so they're actually going out and buying iPods. Anyway, fun.
Speaking of games past their prime, Division Resurgence

is released. If you remember, this is the mobile game based on the Division Looter Shooter franchise from Ubisoft. Big release, I think, maybe, or at least was proposed to be a big release. Ladies and gentlemen, do you guys remember when this game was announced? I do not.
No.
2022 and we are finally in 2026. The baby has been delivered. If you remember, this was originally based on their snow drop engine, which is the one they used for Division 1 and 2. It is actually on Unreal Engine 4. And how is it performing so far? Well, if we look at the numbers, you will get sad and then you will get sadder. So, I have benchmarked it against Warframe, Destiny Rising, and we have The Division Resurgence here on the far right. You'll see when we look at cumulative downloads, it has gone nowhere, especially considering Warframe and Destiny Rising were both failures. And this is coming in underneath that. I will mention, and it's really important

that we don't know what's going on with China when it comes to this game. There is not a Chinese publisher right now. It is not available in China. Ubisoft did sign a Southeast Asian publisher to distribute the game apparently everywhere except China. And right now, China is the only way this game has any chance of surviving. Cuz when we look at the shooter genre, and Eric Crest is very good at reemphasizing this point, there is absolutely no shooter genre outside of Call of Duty Mobile in the West. It does not exist. Right now, we're looking at the top 13 games in terms of revenue in the west in the shooter category. And if you'll notice, there's Call of Duty Mobile in place number one, $2 about $30 million. And then dropping way way way way way down is Destiny Rising at 18 million, which we know is dead. You have Delta Force, which hangs on just by sheer irrelevance to its HD counterparts. And then it's all just Asian and hyper casual, completely irrelevant titles. The only

place this game has any chance whatsoever is in China. That is it. That is the only place that people play shooters like this on mobile. It's because they don't have access to consoles like they do in the West. I don't understand why publishers don't understand this. Western publishers, we've seen them shovel all of these beautiful Western shooter IPs to mobile with absolutely no strategy if it's not a strategy that's based in China. Valerant Mobile is absolutely slaying right now. It's one of the most successful releases of 2026.
Where is it successful? It's successful in China. If you do making a shooter on mobile Exactly. And if you are making a shooter in on mobile, the only place you'll have any
any chance of success is in China. If you are building this for any market outside of China, you are wasting your time, money, and resources. Do not spend six years of development building something like The Division again if you don't have an amazing Chinese strategy. I will say this though, I have been playing this game. It's really good. It's really good. All the things you guys were talking about, it is actually unbelievably good. The criticisms you

guys were making at Borderlands Mobile
a podcast or two ago, basically all [snorts] of them are addressed in the Division
Fatoule. So, you have a chance to try all the different specializations, which if you remember was the thing that they introduced in Division 2 when you got to the level cap. I believe it was 30. You had this end game. They introduced this initially when you start the game. The cover system works really well. The game looks like a high fidelity title. It has all the mechanics you remember from The Division. It has, remember, The Division is the one that started in many ways the extraction shooter trend with the Dark Zone. They have that in here. They actually implemented not only that, they responded to player feedback and they have solo cues for you to be able to get into that extraction mode. They have all the things that you expect in a looter shooter, which translate very well to mobile. They have power score. They have just a multitude of features that you would not only expect, but are really well executed against. So, it's really sad this is going to go all for not. And so, I don't know what else to say. Sucks. Sucks to have a bad strategy, but this is where you end up even if you make a beautiful product.
You just said, "Hey, they're addressing

all the player concerns. They're doing everything." So, what could they have done different if it if you're touting the product is amazing?
Eric is very good at this. You you Eric is very good at emphasizing this. You have to go after genres that are already successful. You're not going to invent a new genre or, you know, uncover players in this genre that we didn't know existed at the scale you would need to to have happen. The ultimate reality is that this target demo is on Steam. They're on Steam. They own highfidelity graphics cards. They want a highfidelity experience with a mouse and keyboard or controller. Mobile does not deliver that. That's not how they view mobile. It's not how they engage with mobile. And so, this does not have an audience in the West. Shooters do not have an audience in the West. The only exception has been Call of Duty Mobile and people have been chasing that forever and has never been replicated. I mean, I would already this like PUBG Mobile does does okay in the West, but again, relative to East, it's not even close.
I Yeah, I can't I couldn't say it more eloquently. I would agree that this game is amazing. I I absolutely love The Division, just to be clear. Like, I

would be playing this on PC if it wasn't available on PC. I would just look to see if it was. But yeah, they've done a great job of replicating Division on mobile, but no one's going to play this in the West. I think it's better than the PC console version, Eric,
in many ways. I think particularly with the live ops cadence that's coming. Remember, Level Infinite is the developer.
Yeah. You know what's interesting is that part of the challenge with The Division in general was in keeping people engaged because it just wasn't really done well from a live ops perspective of content and perhaps yeah, these guys can figure that out, that cadence better. So, have this. Let's say something positive. Maybe the next division will be able to incorporate some of these live ops tricks and tips and and make it a better game when that comes out. So then I will embrace it.
First of all, they push the controller pretty frequently when you play the Division Resurgence mobile game. They're like, "Hey, you should you should do controller. You should do controller." And obviously that's not an existent Yeah, that's not an existent market. I mean, looking at the the video that we're looking at right now, you'll see that they have a lot of RBM shoulder buttons. So, this particular YouTuber is using it, but I think there's a Diablo

Immortal strategy here where, if you remember, they released Diablo Immortal on PC. Remember, if you go to the Blizzard launcher, you can play the mobile version on PC. And remember, this is a Unreal game. I actually think there might be something to putting this on Steam for the Western audience if this is where they are. I don't think it's irrelevant. I think you could. Yeah, I think you could you could basic I honestly Chin, I'm sure that Ubisoft doesn't want Level Infinite cutting into their their share, but I but again, I think these games are getting close in terms of fidelity, in terms of engine where you could potentially have this gain some market share in the West. I think there's a PC console audience in the West that would play something like this again because the Chinese destroy us at live ops.
But isn't that what Delta Force was?
Delta Force PC console crossplatform. Yes. Yes.
I'm surprised that this didn't come out on PC.
Remember, it's level infinite. It's not true Ubie.
No, I know. But
that's why
Oh, maybe they've restricted it from PC

because
Yeah. The thesis I've been promoting, especially after my Twig Junior, is that when you like this looks beautiful. This looks like a console game except for when you see the mobile controls in the UI. Does the next generation of the audience want to play something this high fidelity on their phone or does it look too sweaty? Does it look too hard?
And that's why Roblox is never going to win on high fidelity because it's all on mobile devices and this [ __ ] sucks.
You're right. Like I think both companies are trying everyone's trying to like swap, but that's actually not the right thing to be doing. Roblox should stay and own where it is and Highfidelity should stay and own PC console and you know perhaps not try to make that work on mobile. You know, anytime everyone's like, "Oh, is H can HD games work on mobile?" The answer is kind of no. Like the answer is that mobile is just a different play pattern and consumers have different expectations on what you're going to be doing from a play pattern on that device. I don't know. I
in the west

in the east they're like how difficult can you make it for me? How can you give me a twopoint font so that I can't read anything? That's why old people can't play. I I every time I pick up these games I'm like I'm an old person. And I can't like the fonts are so like look at this. The fonts are so small. How do you even know what's going on?
But you have to remember like in the east mobile is their console. Consoles were banned. They were banned in China. Graphics cards. PCs are too expensive. This is why you have
the persistence of PC cafes to defay costs. And mobile finally makes gaming affordable which is why you see these platforms or these games exist and succeed on the east. They don't have the opportunity cost like we have in the west.
I mean it's the number one thing you learn at Riot when you join Riot. you learn about like I didn't know what a PC bong was and that most players in especially Korea, Japan, China will go to PC bongs to be able and that's you know you have to
Bong.
Bong B O N G.
Well, it is not spelled like that, but

that's how it's pronounced. Well, at least that's how my writers would tell me how to pronounce it.
It's a PC bar. Like you're going to a cafe, a PC cafe is the ability for you to go and do that. you have to leave your house to be able to go and game like that. But you are correct that mobile is your primary in a sense gaming device. And so because you maybe you can't play any other way, high fidelity is okay for that play pattern. All right. Well, what's your other topic before we
I'll be very brief and we already kind of talked about it a moment ago. So platforms. We were talking about platforms. What is a platform? Why is the United States at the pinnacle of platforms? Let's turn to Bill. Good old Bill, Mr. Bill Gates. What does Bill Gates say about a platform? How does he define it? And I think this definition is crucial and it fits so many of the companies we've been talking about. It's the Rubicon moment. A platform, Bill says, is when the economic value of everybody that uses it exceeds the value of the company that creates it. So again, is the cumulative sum of all the

developers on Roblox greater than Roblox's $40 billion market cap? Bill Gates would say, "When that is the case, then Roblox is truly a platform." I think that's a great definition. I think it's really a cute definition. The question is, how does it relate to games? Well, my argument is that mods are game platforms, particularly by this definition. And so, when you look at so many different games, particularly ones that are super superstars in China, they come from mods. So, what is the history that you know, Jen, probably better than anyone that's on this podcast of Honor of Kings, Team Fight Tactics, League of Legends, Auto Chess, Dota 2, Defense of the Ancients, it all comes from Warcraft 3. Warcraft 3 got modded, became this. Then you have the split of Defense of the Ancients between Dota 2 and League of Legends. As we know the famous story, Riot was too arrogant to make Honor of Kings. Tensen goes and does it themselves. But not only that, remember Dota 2 has a mod platform. What does that become? Auto chess, which is by a Chinese team. What does auto chess

become, Jen?
TFT.
And so, if we think back to Bill Gates's definition of a platform, do we think that the sum of all these games, the revenue that they've generated, the players, however we want to define it, is greater than Warcraft 3? I think it's pretty easy sell when it comes to an argument. Let's look at one more example. Quake becomes HalfLife. Halflife, of course, splits and Team Fortress becomes Team Fortress 2. Then you have Counterstrike, Counter-Strike Go, Counter-Strike 2. If you remember, there's a split from Counterstrike. Do you remember what Counter-Strike splits into in China? One of the most successful tactical shooters of all time, particularly in the Chinese market.
Oh, Crossfire. Yeah,
Crossfire getting there. Yeah, Crossfire is huge.
I know.
And so, so many games relate back to mods. So many games have mods be the center of their world. And you look at where Chinese when it is when it comes

to mods and building platforms. Well, it's been failure after failure. We know Roblox China failed. We know Eggy Party was some sort of attempt at doing UGC. Not really a mod. Not really
stumble guys.
Stumb that's a western developer. Not really into mods at all. They they almost had an engine. They've been bad at building platforms. And so very simply, the argument I presented in China, be the source. be the source of where all these mods could come from. Delta Force, why can't I mod Delta Force? No one has been modding mobile games. Why can't I mod Gossip Harbor? Why can't I mod Rise of Kingdoms? Look, it I I think you could wait to move up the supply chain. It takes time. Or you could just take it for what it is now, and you can be the source of all these things. You can be the Warcraft 3. You can be the Quake. And I would argue Chinese developers are sitting on a number of opportunities that I think particularly Chinese citizens or gamers could make into something even more beautiful and could really help the Chinese ecosystem. I mean, it could help anyone. And so, I think they should do more mods. I think this has been a lost art in many ways. And I think China

could be the next opportunity for mods to have a resurgence, particularly on mobile. I'd love to see more of this.
PUBG has a UGC mode.
Look at I think mods are deeper than it's like more UGC. You need mods because mods let you have that crossfire chain. It lets you have auto chess. It lets you create team fight tactics. UGC is not enough. It does not get us to that platform definition.
You're being very forward thinking. I think GTA is now trying to be they may be more of a content like UGC content thing, but there's possibility that they could build mods on top of GTA with the right tools.
They're already private servers, right? There's private servers that have been sold. I don't think that's their strategy, but it could be a longer term strategy for them.
Minecraft tons of mods.
They haven't done enough really. I mean, I think they've
Yeah, they're really hamstrung. I think
I do think if anything that AI can help enable and engage the audiences with creating new content for the content that you're happening with with the right rules and limitations in place. I

think it would be very interesting to see if people can build like a compelling ecosystem of content generation using AI tools, you know, inherent within the game itself. So
the question I have for you, Phil, though, is like how do you keep the economics to use? So when we made TFT, we were inspired by auto chess, but they didn't get any benefit.
First of all, that's very true. Very true. And I think that's actually the biggest hole in this argument is like what are the returns to me? If you remember, Blizzard actually tried to change some of their terms of service when it came to mods where they would own all of them because I think they saw what happened in Warcraft. I think the quote I kept going back to was the Chinese proverb, when water flows, a channel forms. And I think if your first question is like, show me the P&L, then I think you'll never build this ecosystem. You'll never build that chain I just showed. And so I think you have to release yourself from the P&L constraints and just just understand that not every time do these things have a direct connection. Sometimes they become things, sometimes they don't, but ultimately they help the ecosystem. And

I know that's not the answer people want to hear. And I know that's not a compelling argument. Sometimes you capture the gains to the mods, other times you don't. I thought this was an interesting argument from the economist who would probably be saying this because you make more money by allowing for this. I think it's a cultural and it allows for the evolution of games and game design and game features. So I don't know, interesting take. Let me just do one quick wrap up at the end here because there's lots of news. We're on a very Asian topic today. From a Japanese perspective, there are two companies doing something really interesting. San Rio, obviously, that's Hello Kitty and Tolli. I used to work with Tolli. They were the animation company or the live action company that made Power Rangers that I worked on for 5 years. So, they are both launching in-house game brands on the same day, and they're investing over 10 billion yen and backing new IPs, and they're not doing licensing anymore. And licensing, as many of you know, is one of my favorite models. Tolli is is doing PC launches via Steam in 2026. Consoles to

follow. The first lineup uses new original IP from creators in Japan and abroad. Dragon Ball and One Piece are excluded. Obviously, I think you would do that differently because of the existing games. The first title re reveals comes in two days. So we'll see what they're up to. San Rio is the first title is San Rio Party Land. It falls in fall of 206. It's on Switch and Switch 2. We have 10 titles planned through March of 29 and a huge investment. So my thesis is that are they framing this as a new kind of business pillar alongside film, television, merchandise in theme parks? Are they thinking that games becomes like the hub of the spoke that the you know the new IP development and content engine comes from games rather than linear media? And so this is what I just thought was like incredibly fascinating that you're seeing Japanese developers who are typically the source from anime from manga now looking to be games as a source of new IP.

What happened to licensing Jen? Can you can you call her back? I know
this sounds like a stupid strategy. I'm calling Jen from two episodes ago. Like she would hate this [ __ ]
I [laughter] I know. Which is why I said and I preface during this that I I do love the licensing model, but I guess my question is why are they doing this? What is the hub of content these days? How do you create an IP? Is the IP it typically it would come from manga? It would come from a comic book or it would come from an anime, a TV show, linear. Is there thesis? We can't do that anymore. We're not able to launch an IP like that. We need to launch an IP in a game
because we know that's been so successful. There's so many examples of games going the opposite direction. We have the Mortal Kombat 2 is coming out. Sonic Hedgehog 3, Sonic Hedgehog 4.
Merely saying this is it looks to be what they are doing. I love licensing. [laughter]
So, hold on. Let me let me ask you this, Jen. Is there any condition in which you think licensing is not the right model?
I like the idea of a hybrid approach. If

you're at a company that allows you to take a swing, the challenge when you think about Disney, right? Like the if Disney would separate a group and be like, "Hey guys, you have $200 million. You want to go make something like go for it." And actually, that's kind of what they did is said with with a 1.3 billion that they gave to Epic and said, "Hey, Epic, you go take a swing. We'll go do licensing over here." I think if you do some sort of hybrid, you really have to separate it from all of the pressures of big company and you've got to take it out of like whatever P&L that they typically look at. But no one's ever going to do that. That's kind of the challenge.
Let me just last word on this. The pro the whole problem with the the hybrid scenario is that
you don't love all your children equally, right? You love the children that are actually built from your loins at your company and all the licensing ones take second fiddle. So if you have the same type of game or same type of release window, you're going to support the game that you're developing versus the games that you're trying to publish, right? Or license, right?
Well, that's where slate planning comes

into place. Then you have to like effectively slate plan so that you your children get their day in life.
But that doesn't [ __ ] happen. At the end of the day, priorities are priorities, right? And so one of the new stories we're going to talk about today is kind of along these lines is that Disney has quietly purged 30 [ __ ] licensed games out of Steam in the last like few months, right? Like all of a sudden they're pulling licenses on 30 games. These are people that built games on Steam for Disney with Disney's approval are now getting pulled completely, right? We don't know why. We don't know. But I bet part of it is that these are no longer their favorite children, right? Their favorite children are what they're launching on UFN most likely, right? I I don't know. We don't know. The fact they're doing it so quietly is even more disturbing. You know,
the one thing I would say is that typically as having done many many licenses, there's an enter your license.
No, but it's not possibly. And 30 licenses in a period of 2 months. That

doesn't make sense.
Let's get crisp here, Jen. So Hasbro, right? Hasbro, if you remember, we were covering them, boy, it's a year ago or two ago, remember? So they have the success of Monopoly Go makes a [ __ ] ton of money. Remember, they have a bunch of bunch of Scoply IPs which have done well. Yatsi still making cash, still Walter's golden child.
Remember, they announced they're building an internal studio. That seems like the hybrid model. Are you in favor of that?
So Hasbro is actually they have a lot of hybrid going on and even I mean it even goes deeper because you have Watsi, Wizards of the Coast doing Dn D games. You've got that Matthew McConna like space game happening too. I think the pendulum swung too far for Hasbro and they're going to take too many AAA bets.
Yeah, dude. The problem with Hasbro is they only have one game that's actually working inhouse, right? Which is the [ __ ] Magic the Gathering game. The rest has been [ __ ] trash, you know? My point is like internally they do not have the capability to actually make compelling content. Like that is a that is almost a known known. And I know people at Hasbro are gonna be upset by

me saying that, but that is the fact, right? Like that is a disaster, right? Those studios are too small. They're not wellunded enough. They don't have the right resources. They haven't released a game that's been successful at all, right? And and the games that are in the pipeline
are not looking too hot, as I've been told by many, many different people. And so like their hybrid strategy ising sketchy as hell, while their licensing strategy has done quite well. And so their favorite children are all the licensed ones, right? So like it's it's it's ass backwards, right?
I don't know. Everyone anyone's favorite child is the one that behaves the best and you know is going to put you in the old folks home and pay for your bill when you're when you're older. So
meanwhile, they got rid of my favorite person.
Well, Barry Dorf.
Barry Dorf, the licensing, the one that was in charge of all things Monopoly Go, according to him. [laughter]
Well, no, I don't know if they got you. There's Monopoly Match too, by the way. Coming. Monopoly Match.
Monopoly Match. Well,
dude. Blood, sweat, and tears, dude. He ba gave it all to those guys and they

let him go. Bastard. Everyone know Hasbro. How dare you with Barry.
We don't know what happened. He We just know. I We don't know what happened, but
Well, I know what happened. I know what happened.
They're They're [ __ ] out there.
Okay. Well, I
was trying to be fair and balanced then because I don't know what happened. But, okay, if you if you know anyway. [ __ ] with Barry, dude.
I agree. Barry Dorf is the best. Love him. And yes, Monopoly Go. And everyone who gets a paycheck coming out of that should say thank you to Barry Dorf. [laughter]
Okay, we've gone long. We're going to wrap it up. Thanks everyone and see you next week.
You did it. You made it to the end of the episode. As a fan of the show, it would help us out if you'd subscribe and leave us a review on the podcast service of your choice. Those stars and likes while small action and your part mean a lot to us and help to grow the show. More importantly, are you a member of the Deconstructor of Fund Slack group? If you have 5 years or more of games

industry experience, go to deconstructorofund.com/slack and apply to join. Dur the games industry best professional community filled with peers always willing to lend a hand or subscribe to our newsletter to get all the latest insights from the deconstructor of fun content creators. Thanks for listening.