TWIG #386: CoD MW4 Revealed, Sony's State of Play, Bungie's End and 007 First Light

I think this will be a better year for Call of Duty overall. I mean, last year was such aing train wreck.
Bold prediction. The sun is going to rise. [laughter]
Hello everyone and welcome to Deconstructor of Fun. This week in games 386. I'm Jen Dano. I fill the marketing and publishing role on the podcast. Today, three of us in first chair is
Eric Crest, Strategy and Investing, and Friends of the Founders.
Oh,
interesting. Uh, Phil Black, monetization.
All right, here's what we have going on today. Call of Duty Modern Warfare 4 is revealed and shooter monthly guy has thoughts as do I. It's announcement time. Summer GameFest is coming up this weekend. Everyone has something going on. One of the things that happened yesterday as we record on Wednesday, June 3rd was PlayStation State of Play highlights. We're going to analyze everything that's going on from the

first party side. Talk a little bit about what to expect from Summer GameFest. I'm going to cover Nico Partners. They have an Asia and Mina market model that is releasing and so I got a little exclusive access to that data first. Blog post is up right now on Deconstructor of Fun. Checking in on HD games, Forza and 007. Bungie layoffs led to the last Destiny 2 update coming on June 9th. I think this happened a few weeks ago, but we just haven't had a chance to cover it. And if we don't get there and you're a Simpsons fan, especially a Mr. Burns fan, do yourself a favor and go and watch the new Monopoly Go Simpsons trailer. It's hilarious. Will Frell is Mr. Monopoly and then Mr. Burns is Mr. burns and then they have this fight and it's like super funny. So anyway, so no Mishka today I think he's jet setting somewhere Phil you know
I want to know what this guy's life is like you mentioned this maybe twig 100

Eric that this guy just seems to live a jetet life and he seems to have like remastered it in a way that I just admire. [laughter]
No, but it must be nice. What I don't really understand is how his wife can put up with it because she has like a real job, you know, and like
she must be a saint. And I've actually really never met her like in person now. Actually, I've never met her period. Yeah.
Yeah.
It's always the woman behind the guy. Like that's the question about how she can put up with his nonsense on a on an ongoing basis. Like we have to do it once a week. Can you imagine doing it every day? You know,
hallelujah. Amen to that. [laughter] Yeah. I think he's in Rome. And then the other thing is he's cosplaying a marketer. He's at I think the the apps flyier event.
Oh, we're going to Spain next week, him and I.
Oh jeez, you guys. Like it blows my mind. It blows my mind that you guys are like, "Hi, I'm here talking about marketing things." And I'm like, "Oh god." Okay. All right.
All right. Let's get into Shill's few things going on. Roundts. We are going to postpone the Bay Area one that was on

June 12th. We're going to move that to October. June 22nd. LA is at Google Play Ply Vista headquarters. There are a few spots left. Sign up now on the website. Go to the Slack. August 6, Seattle at Amazon AWS headquarters. So, a few spots left for that one. Also, I did a podcast with Match Masters influencer manager lead and an influencer marketing consultant. We went really deep on some innovations in influencer marketing, a lot of performance tracking. Hopefully this Friday I have an interview with the CEO of the ESA. They just released a brand new report today, June 3rd, called the Essential Facts 2026. It's a it's a good deep dive into all of the player behavior going on. It's US specific, but if you're a small company or a marketer, it's a ton of free data in there. So podcast with Stan St. Pierre coming on Friday. Man, I got a lot of stuff going

on. I got a bunch out because I have to take the next two weeks off because I'm starting with two new clients. So, sorry for the dump, everyone. Um, but then I'll take a break for a couple weeks. Have to do some travel. Attention app and game developers. The difference between scaling and failing comes down to one thing, intelligence. Sensor Tower delivers the ultimate competitive edge that separates market leaders from the forgotten. Their [clears throat] platform doesn't just show you what's happening across global app stores. It reveals why it's happening and what to do about it. Need to crack new markets? Track competitor UA performance in real time. Reverse engineer the monetization strategies powering today's billiondoll games. Sensor tower transform impregnable market noise into actionable signals. The platform goes beyond raw data, offering intuitive tools and expert analysis that convert insights into revenue generating decisions. That's why

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So Phil, I wanted to get shooter monthly guys take on this. Call of Duty Modern Warfare 4 was just revealed announcement and trailer. So help me out. Let's look at some key art. So this is called Modern Warfare 4. Is this a sequel to Call of Duty 4: Modern Warfare or Call of Duty Modern Warfare 3? I am confused with all of the different Call of Duty iterations. Which one is it,
Jen? This was literally my first thought when this was announced. Like, I wasn't paying attention and I was like, "Oh, they're remaking Call of Duty Modern Warfare 4, which is the one that really established the franchise." Really pivoted. Yeah. It engineered or popularized the RPG first-person shooter mechanics, right? This is where you have your load out. So many good single player moments, too. And I was like, "Oh, this is great. I'm so happy for this." Very confusing, but they remember they keep rebranding it. And so, yeah, now we're retrading old ground. Confusing, Jen. I don't know how you

would have solved this. Like, this is the strongest subbrand, as I'm sure Eric can tell us, too. I don't know what else you can do to like clarify this for consumers. Well, we'll talk a little bit more about branding, but I want you to talk about, you know, what what you saw in the reveal and the game mode. The trailer looked really nice. Set on the Korean Peninsula, so all new characters.
So, what we know so far is pretty much what we've been talking about on the podcast. No Day One Xbox Game Pass. Yeah, that that strategyy's dead. Gone. They have a new feature, which is interesting, called kill blocks, which are these slabs that make up an individual map. And so what they do is they'll randomize the positioning of the slabs. So you can take I think it's 12 maps that are launching and you can then calculate out of course what the different combinations are. And because it's slabs are like kind of unmodular. I'm sure there's they're doing a lot of testing and making sure this isn't super messed up. It doesn't mess up you having to learn the maps. Again, it's it seems like a smart productivity hack. DMZ is back. Let's see if they have a take that

Art Raiders has helped informed. Ground war. Do you remember this? This is their attempt at taking on Battlefield.
So, what we're seeing here is not only that, but they're continuing to do the things that I think the franchise has always done really well, which is movement, movement, movement, and really just moving the goalpost on so many quality of life features.
So, now you can slide backward and be shooting on your back, which is very similar to Rainbow Six Siege. If you've played that game before, everyone knows the position I'm talking about. You're kind of crouching with your gun. They removed omniovement, which is the ability to sprint side to side without actually looking in that direction. and that's gone. Mantling has had a huge improvement. So, the fluidity seems like it's a central part of what's going on here, which is exactly what we just talked about in shooter monthly is that this was Apex Legends' huge innovation. In some ways, Call of Duty also helped just like modernize the sprint button. I don't think people understand like that was like a huge innovation and it wasn't started there, but it certainly was popularized by Call of Duty. So, anyways, like what we kind of expect

like they got to get back. Uh the franchise is not a good place. This would be a huge loss for western development if we did not get back on Call of Duty.
Well, you know, the big news here and one of the most challenging things is getting to get back to growth is the fact that there's no PS4 or Xbox One skew this year for the first time, right? That's a huge change. So,
I think it really helps cleaning it up from a technical perspective and all the issues around that, but it significantly reduces the TAM, right? Or the install base. War Zone, you know, with a free-to-play version is basically getting removed from PS4 and Xbox One starting June 4th. You know, the existing people have the installs can still play, but it's going to be pulled from the stores. So, the downloads are going to be blocked. June 25th, the in-game store shuts down for PS4 and Xbox One. And then in October 23rd, when season 1 of Modern Warfare 4 comes, then War Zone is going to be basically fully dark.

Oh, [laughter] wow. on PS1 and Xbox One. So when you look at these daily average users on Steam, PS, Xbox, this is going to be a challenge, right? Like I think just generally speaking, having said that, you can move your progression over to new platforms. you know, they're rebuilding kind of the core systems of the game itself, weapon handling, camera behavior, all these things that have been held back by the old gen hardware under this new like ballistic authority system, which, you know, marketing speak for [laughter] they're changing tech, but it's just not feasible on 13-year-old hardware, right? So, this is actually good for the franchise longer term, but it may be a hiccup in the medium term. Personally, I mean, like my thing, I think this will be a better year for Call of Duty overall. I mean, last year was such a train wreck.
Yeah. Bold prediction. The sun is going to rise. [laughter]
Yeah, exactly.
I've just been saying this though.
No, no, no. This
I didn't realize they were taking the PS4 and Xbox One. That's why I'm a little bit more hesitant on my my my

bullishness from before because
if the install base is that low, it's like really challenging to actually beat the unit forecasts, right? However, from a revenue perspective, this should be better, right? because the core people will be more engaged and they'll likely be spending more on a new kind of platform. I think anyway, not to mention that GTA will have that halo effect in the sense that more install base of Xboxes and PlayStation. I think people are going to be blown away at the amount of hardware that's being sold at $600 or whatever it is at this point. And that should help drive Call of Duty because Call of Duty is a clear second skew from GTA after you finish the single player or whatever. So anyway, I do think the franchise will grow this year overall from a revenue perspective, but I think units might be challenged
assuming that anyone who's gonna everyone's going to be buying a new box to play Grand Theft Auto so that they're going to have already have the new hardware. So, do you think it's going to be higher in price this year? Do they

announce pricing?
I'm not sure if they have or not, to be honest. I bet they they share the same. They have like all the different types of premiums. Did we ever take a bet on what we think GTA base game is going to come out as? We should do a bet on that. That'd be fun.
It's not 70. I'll be in absolute shock for the base skew.
Oh, I thought we were saying like 100.
I think people are out of their goddamn minds. [laughter]
I was [clears throat] looking at the betting markets for that. It's collapsed in probability. It's like like 10% right now
for
for 100.
G. Yeah. Standard.
That's so dumb. that well the base skew like look I mean there's gonna be so many different SKs right but like the base has got to be a $70
okay
max yeah I thought we were saying we thought they should push it higher I mean that was before the chip apocalypse where you know memory is now like
show me the price elasticity model that makes $70 more profitable than 100 there's no sensible Excel spreadsheet I think you could show me that I believe that that's the case
I'm not even an economist and I can I

know that
okay actually I'm not I really don't want to argue against this cuz I kind of agree with you. But I would say that like for something like a GTA, which is a platform, like it's Razer Razer Blades thing, you want to get as many people in as possible, particularly sure.
But now I'm back to the deluxe edition playbook. Give me like a $200 GTA edition.
Give me like all the stuff like GTA Online.
For sure.
Do we already know if they have something beyond their $100 traditional $100 skew? But they should count. I'm sure they do. We don't know yet. I think you're gonna get a
freaking alligator in the deluxe skew. You're gonna get to like own your own alligator in your backyard.
We don't we we don't know yet. That's crazy. They haven't announced this.
I mean, I think there's still debate on if it's coming out this year.
You got to start your campaign now.
I love the fervor and the the conviction of your argument, but literally GTA does this every single time where they do not have like a marketing plan until like a month or two before launch. They throw a couple trailers out, but at the end of

the day, this thing transcends like all other type launches. They don't have to be early. They can do whatever the they want, right? This is what happened with every GTA.
I don't know. It's a campaign. You build hype. It'll be successful either way. It doesn't matter. This is this is small stuff.
So, back to Call of Duty. So, one branding thing I wanted to talk about. So, first, and this is going to be a little bit controversial. I can't believe I'm the one doing this. So, the game is set on the Korean Peninsula and its main characters are actually Korean, which is really cool. I think the main character is actually from The Beef. It was one of those shows that was on Netflix.
Oh, no way.
Yeah. I love that guy.
Yeah. So, super super cool. If you watch the trailer, a lot of the squad is Korean. And I was like, "Oh, wow." Like, that's super cool. So, kudos on, you know, the expansion, the representation, all of that thing. But from a branding perspective, it's over reliant on a marketing trope that, you know, we all go to. It's like, oh, it's set in Asia, so let's do Asian, you know, characters.

And so the Korean characters are called Hungul. And when you see the number four and the key art, it's like, oh, it's the way to, you know, tell dumb Americans, hey guys, this is said in Asia. And ironically, when you really dig into this, four is a bad luck number in Korean culture. It also means death, which you know, maybe they were like, "Oh, that's cool." Because it's Call of Duty. On the lesser side, it's yellow. So maybe I'm pushing my analysis here, but that is also like kind of a no- no trope that Americans do for Easterners. And so I just my call out here is as a western you know obviously this is done by western marketers like can we just not fall into the branding trope trap of this and you know check your bias survey your players and make sure you're not being that American perpetuating tropes. I felt like they went a little heavy-handed here and obvious [laughter] danger danger territory.

As a white male, I have to tread very lightly on these sorts of subjects. So, [laughter] I think I will No, I just think this is 1,000 times better than anything that Ubisoft did with their game.
The recent Assassin's Creed,
I mean, every single decision they made on that game was incorrect. So, there you go. I think this is much this is definitely done better.
Understood. All right. So, Summer Gamefest is coming. So, everyone lines up their announcements all around Summer GameFest. I think Nintendo has something coming a little bit later as well, but Sony's big show was yesterday, June 2nd. And so, the two big things I wanted to highlight kind of the opening and the closing Marvel's Wolverine. So, Insomniac Games kicked off the show with an extended gameplay sequence running on the PS5 Pro featuring Logan in his classic suit engaging in brutal fast-paced combat. The game is going to launch on September 15th, hopefully getting out of the GTA 6 window for $70

and then they'll obviously digital deluxe editions available. So, the big news was the showcase closed with a huge 20inut segment from Sony Santa Monica Studios. This is the next God of War. So, the trailer introduced a standalone God of War game putting Kattos's wife Fay front and center as she navigates mythical realms. So, I guess the big news here, I'm not actually a God of War franchise person myself, but is this the first time the franchise has had a female lead?
That's true. It's been mostly Kattos.
Okay. So, it's his wife. All right. So, that was kind of cool. What else did you see, Phil, that was kind of interesting?
Nothing. I just see declining first party Sony game sales. [laughter]
All right. Well, okay. All right. Chris, what did you see? I I would add Control Residence, Phantom Blade Zero, Until Dawn 2, not The Biggins, but like you know, Wolverine and God of War were obviously the headline. It was a good show.
Yeah, Tomb Raider was in there, too. I know you were you're not a fan. I

I mean, I'm hearing like this is like absolute development hell, right? Like they they cannot pull their head out of their
tushes to get this game. They just don't have the team anymore problems. [clears throat]
The trailer looked good. It was like OG Laura Croft. Lara Coft, but the trailer looked pretty good. So, Phil, all right, give us some charts.
First party game sales starting in FY18, 54 million units. FY25, 32 million units. Not exciting. Like, if you want to see why Sony is like risking it all for live service businesses, it's because it's so hard to regularly produce these hits and they're very expensive as we like all know. I'm sure we can debate. And so yeah, it's it's doesn't look good for first-p party sale. This is what they brought them also to PC, right? This explains why they're PC. They need new territories to conquer. They need new ways to advertise those costs and PC is one way they could go ahead and do that. But of course, like the model of this is struggling

with its ability to drive first party sales of their their platform itself to PlayStation, right?
They can't bring it to PC because in March, they killed all the first party games going to PC. So Sony reportedly decided to pull back from releasing PlayStation 5 exclusives on PC. Sources familiar with the company's plans told Bloomberg that PS5 games have not sold well on the platform. They've also said PC ports risk damaging the conso's brand. It could hurt sales of the PS5 and its successors.
I have a hard time seeing a model that makes that make sense to me about how PC reduces [laughter] Erica. No, go ahead. What what what model makes that like what your conversion? You have to you have to show that the the decrease in conversion of the PlayStation console and the margin that they would get from that more than makes up for the revenue they get on PC. That seems crazy to me. That's a that's you can't make up that equation.
Kidding me?
Are you kidding? Interlastic.
What percentage of the overall units are first party on the PlayStation?

10%. People are really super negative about this idea that Sony's selling less units on their platform. The fundamental thing is that the business is built on the fact that Sony should be selling less units than third party on their platform. Right? So the whole goal of the platform is to build install base to sell third-party games because thirdparty games are absolutely pure profit, right? And so this chart shows you the pink ones are first party, right? It's a very small percentage [clears throat] of the overall business. The reason that Sony is killing it right now is because they are destroying Microsoft on third party. And so third party sales keep going up. And if you look at the next chart, this is their EBITDA. This is their profitability. So despite the fact that they are selling less units, they are still growing up in profit because third party sales are so amazing for them from a platform perspective. That's the goal. I mean, the goal is to be the de facto platform

for to sell third party games. Period. End of sentence. Right now, Nintendo obviously is a completely different thing from a platform perspective. They have their own firstparty sales. They have their own like profitable hardware. Like they have a different model. They they basically are banking on their own games. But Xbox and Sony have lived and died by third parties, right? And because Xbox is such in the right now in terms of popularity, Sony is just taking this generation away from them. So historically they Xbox has had 30 to 40% market share of third party sales. They are like at 10 to 20 now, right? That is a devastating loss from a profitability perspective. And without that profitability, you don't have the ability to actually invest in the platform that you're actually creating, right? Because first-party sales inherently are far more expensive. You have the development cost, you have the marketing cost, you have the overhead, you have the centralized services, you have all these different things that you have to pay for. And that's why

first-party sales are actually not a good indicator of success from a platform perspective. And for Sony in particular, I mean, we could debate this all you want, but the fact is that they have been severely unprofitable in this last generation relative to prior generations, primarily because of mismanagement from the studio level and and delays and feature creep. Games like God of War was rumored, I think they did like 15 million units or something like that. it was still unprofitable like on a P&L basis because of the cost overruns and the mount and I think the game was like what 20 five hours or something and anyway and then like in the back half of the cycle like if you look early in fiscal 2020 that was their lowest one of their lowest profitable years that was the launch of the PS5 right which they incur insane amounts of cost for the launch of the console and then 2021 is obviously co but then it starts to normalize and grow the way it should be because the third party sales become a bigger part of the overall pot. So, this is console cycle 101, right? This is

exactly what happens and supposed to happen. And Sony just happens to be killing Microsoft so much that they're basically taking all the profits, right, from third party sales.
Oh, interesting. You mean Xbox all capitals back to speaking of branding, they went back to all caps Xbox. Anyway, so Phil, go ahead.
I agree with you. I agree with you. Right. The first party games are loss leaders for the platform to get people into the platform and then monetize them on margin, free margin, right? Like every time FIFA sells a pack, I get 30%. I didn't make FIFA, they're just on my platform. I get to take the rent. I get to extract economic rent from them. Totally agree. And I also agree that the share of first party sales also is not necessarily indicative of everything. To your point, they could basically just be pulling back on their loss leaders because they don't need to spend as much capital. They need to outlay as much capital, which is I don't know, you tell me, but I suspect we'd find that if we broke down their P&L even more, right? They're reducing firstparty studio investment if your thesis is true,

right? They can basically just coast on platform power rather than take these risky hits. Also would agree on that, but still having declining first party sales as an absolute value is bad. You want to sell more units. And exactly to your theory, they should be selling units on PC still. Like that was a strategic error. like they should be selling more units on PC. There's no reason not to subsidize more of these costs. These loss leaders amortize more of them. Maybe they even get you more of them, right? They gives you more ammo to even do more PC PlayStation exclusive games. They clearly need first party games to be successful in the sense that that's what sells the hardware. That's what gets people engaged in the hardware itself. And I think they successfully did that this generation with Horizon and God of War and Last of Us, etc., Spider-Man. But what happened was that Jim Ryan made a huge flaw in strategy by going after these live services games. I think part of the reason that they've fallen off is because they had all these active investments in life services that never materialized, right? And so Jade Raymond

blew like hundreds of millions of dollars doing in Toronto, right? Like none of that actually resulted in the game. They still have not created a game up there, you know? Like this is part of the reason that they're doing that. But what I would counter is that they have retoled the studios to actually focus on those games that do have the most potential. And you look at like something like Wolverine, the next Spider-Man, those games should actually be profitable and successful versus God of War, Horizon Zero Dawn, the last one was clearly unprofitable. Without Jim, I think they'll be set up for the next generation, the PS6 generation with some great studios, great franchises, sell the hardware, and continue to beat Microsoft, right? the PC thing. This is a little bit dicey, right? Because I think I've actually argued that I don't really think the PC thing is that big a deal, particularly when you're not doing day and date and you're doing a six-month delay. I think that makes sense. That's a way of like kind of building up the audience and getting some interest in the game. What they

clearly did was they looked at the model, they saw what was happening, how many units they were selling, how much it cost to develop, and they just basically said it's not worth it. Right? And so I have to believe that I was wrong and they are right in the sense that it's not worth it for them to do that. And I get it from the perspective of like again selling razors and razor blades if they need those franchises to be exclusive and to be the single player in particular to be exclusive and part of launches for the next PS6 and they don't want that tarnished by having it on PC. I have to believe that they have done this analysis paralysis and figured this out. So doesn't seem to me like that's a big deal that to have that on PC 6 months later. But you know whatever that's their decision to make I think.
Well they were taking all of their exclusives to other platforms
which ising stupid
for this reason right for this exact reason that we're
exact reason they are basically what 30 years of precedent they're trying to change because they want to do subscriptions. You know it's like their

whole strategy was flawed from the get-go at Microsoft
the subscription the taking their first party to other platforms. Remember they like
right oh yeah that too. Sorry. Yes. Wait. Why why are you against that? Why wouldn't you want after a severe delay Master Chief on PlayStation? Why not just like unload and just try to capitalize on units and software?
The hardware business sucks. The hardware business sucks. In the case of PlayStation, Sony, I like
Yeah, you you agree that you can have it on PC that it makes sense. You may maybe on a delay, but you're telling me that doesn't hold I I think that's crazy that you would say that doesn't hold for Xbox on a bigger delay. Well, reportedly on that strategy the numbers on that like again what is the model that shows that putting Master Chief on like some crazy delay on PlayStation reduces Xbox sales more than the increase in software sales that you get by having that product on the Sony platform.
I just showed you Sony's P&L. Sony's

success this generation is a proof that model it works for this particular audience. Right. The only way that that kind of works is if you think there's an unlimited TAM for Forza, right? But there isn't, right? There's no there's not an unlimited TAM for Call of Duty either. You can't expand beyond this core group of people, right? If you're building your games and they're buying it for these games and they're on PlayStation, they're going to continue to buy third party on PlayStation and make a profitable platform, right? But if you keep on like diluting your brand and diluting the reason to buy your console, people aren't going to buy your console, right? They're going to buy the other console, right?
I agree. I'm just I'm just questioning whether or not you're you're doing your your trade-off math correctly.
He just showed you.
I just showed you the math. [laughter]
You think Microsoft is profitable this way?
I'm saying that this is potentially their best situation. Like the mo the the model again is that you have to show that by them putting some key franchises on PlayStation that the decrease in

conversion for the Xbox ecosystem outweighs the increase in software sales they get by being on the PlayStation platform. I don't think that's been shown at all.
I honestly don't think you understand how terrible this generation has been for Xbox. I don't think people anybody seems to understand this.
Oh, I I completely understand. But that's not the reason they're down. They're down because they missed on first party. First party quality. No. No. Halo is the worst it's ever been critically. They've pissed on Gears of War. What are you talking about? All this is all of their key franchises. Rare hasn't produced anything. Their failure has been releasing quality first party titles in their recurring franchises. When was the last time Halo was relevant? I can't. This is their flagship franchise. What I'm saying is that but the reason that they are in such a shitty place now is because those franchises failed and then they lost this generation and now they are 15% share of third party sales versus Sony right they are continued to drive profits on their platform at historical

rates right and Microsoft is continuing to deteriorate in terms of profitability and so now Sony has all this money to reinvest in the next generation hardware and Microsoft oft is limping along with damaged franchises, right?
No question about it.
Okay, so we're arguing the same thing. It's like they they have lost and the reason that they've lost is because their first party was not well executed and now their third party sales sucks and so now they're trying to solve I don't want to get into the Microsoft thing again, but now they're trying to solve it with complete right now like with you knowing Matthew Ball and the tech bros like that's not going to help, right? It is a content problem as I said many times, right? And so none of that what they are trying to do is going to fix the fundamental problem is that they've lost the console player, right? They've lost the entire industry to Sony and Nintendo for less. All right, moving on.
All right, so we are going to talk about Summer GameFest that kicks off this week. You know, just to go back in time

a couple years, E3 used to be around this time and then Summer GameFest came up. This is Jeff Keelley's show and then they decided to put a whole bunch more stuff around it. So the main show is June 5th. It's at the Dolby Theater in LA. Jeff Keley and Lucy James are hosting. It's about 2 hours and it's on YouTube and all kinds of other stuff, Twitch, all that. So then they have something called Summer GameFest Play Days and it's June 6th to 8th. It's invite only hands-on event for press and creators. This is kind of where the E3 used to be. you get a chance to get hands-on. And then there's an Xbox showcase. It's also Gears of War Eday Direct. So that's on June 7th and they're broadcasting that first gameplay and major news followed by a dedicated deep dive on Gears and the prequel. So this is what I saw that was kind of interesting about Summer Gamefest. A lot of times we all talk about how much money it costs to put your trailer into these big shows. So there is a new kind of system and tool that makes it hopefully more ROI attributable for the

marketing investment. I had a guest on Eden Chen from Pragma or first look and so they have a really big summer gamefest partnership that sounds really cool actually for players and marketers. So they're launching something called player.gg. It is launched today as the official player destination for Summer GameFest. It gives studios one hub where Summer GameFest viewers discover featured games, sign up for play tests, wish list titles, and follow releases. So, it's a little bit deeper than what you would get just by doing a wish list on Steam. Player GG runs on First Look, the player relationship platform. Now, 500 studios use it, including Craftton, Avalanche, Remedy, IO, EA, tons of others. Former GameSpot host and giant bomb lead Lucy James debuts her custom newsletter looking for.game. It's the weirdest [clears throat] URL ever on the platform focused on PC recommendations and exclusive demos. And I just think this

is a cool launchpad for her cuz she's number one is she's co-hosting Summer GameFest. So she's trying to launch her new media. And then also for players like you've got in a sense a destination to go to. Marketers might be able to attribute more of the clicks. You get play testers in, you get first reveals, you get like a more of a funnel. So, Phil, uh, any comments from the monetization and uh, attribution peanut gallery.
I mean, look, if they want to back door into a distribution platform, be my guest. Would love more competition there. Not sure if this one's going to work out, but I love the attempt.
I think the attempt is cool. I think the more that you're trying to build community and play testing early in the funnel, I just think it gives you a chance to see is your marketing dollars paying off. Remember reportedly last time, last year it was like $250,000 for 30 seconds or 60 seconds. But it's an investment. And so at least if you can get some numbers out of this, that was cool. Unless you've been living under a rock,

you know this is web store rumbringer. 70% of top apps are using a web store, and the best ones, they're doing it with app charge. Do you want a $20,000 in-app purchase? Yeah, Appch charge does that. How about using web- based Apple Paycheckout? Yeah, Appcharge does that. Do you want to pretend that subscriptions are still a viable monetization strategy for games? Yeah, Appcharge even lets you do that. Look, these guys are backed by Supercell, Moon Active, and Play Tikka. 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 AP? Don't accept microtransactions. Embrace macrotransactions. Learn more on appcharge.com. Guessing where your users come from? That's so 2010. Appsfly is like having a cheat code for mobile marketing. Pinpoint attribution, real-time insights, and analytics that actually make sense. Stop flying blind and start flying smart. Apps flyier because your

data is your best co-op partner. [clears throat]
Kickass Live Ops named Kickass Tools. That's where Heroic Labs comes in. They just released a massive update to their Sator Live Ops platform. And having done my research, I can say with confidence that it's second to none. In a single product, you get everything you need, including event capture, player segmentation, feature flags, remote configuration, AB testing, experimentation, live events, calendar, messaging, retention, graphing, analytics, and so much more. If you're serious about running live services in a game, get serious about the tools you use. Connect with Roy Labs and make some serious cheese with your live ops. All right, let me transition now to Ano Partners piece of news. So they just dropped the new report which is an Asia Mina report.

It is tracking 13 markets worth 103 billion by 2030. That's kind of the headline. There's a bunch of charts and if you go to their website, they have a little bit more. And Crest, I think you know Lisa Hansen. She's runs Nico and she's so lovely to me and to us. She offered us an exclusive look at this. And so I had to do homework and actually like write a blog which was like, you know, hard to cram all of that in, but it was fun to do it. And so you can check that out on the website. And so Chris, I first going into this, I always have you in my ear saying these eastern markets are super challenging and they don't monetize. However, I do think it's worth keeping an eye on these countries and these markets because there are trends that we can start to see that maybe move westward and maybe we should be paying attention to that. As a reminder, half of the global gaming revenue comes from Asia. And so, it is worthwhile to keep an eye on what that is. It might not always be the most

appropriate thing for Westerners to go that way.
Hold on before you continue. I never I never suggested the eastern markets don't monetize. I suggested they don't monetize for western publishers.
Fair enough to be clear. Fair. Yes. Yes. That fair correction. That makes sense. All right. So, a few things that I found interesting get into the blog, but I pulled a chart here that talks about where the growth is coming from. And so, you know, as to be expected, China, Japan, and Korea hold 88.6% of revenue, but their growth is under 3% a year. And then you have India. India is running growth at 11%. [laughter] Yes. India is now like 50% reduced right maybe 80% reduced because all the gambling apps were removed so
I don't know when they ran their survey but I think this was so this is revenue you're right that probably came down the player standpoint was also pretty huge so India Mina those are all markets that are growing where the player count in

you know China Korea Japan aren't as big the next chart she they spent some time talking about direct to consumer So what was interesting is they gave a stat that said 30% of players now prefer to pay outside of the game. So this is a a player reported number. So there was no benchmarks I could say is this more or less than in the past. So I did a little digging and I was like okay what did they say last time and then what is Platea talking about just to do a comparison. And so it does look like it DTOC is accelerating more in the east. The west does seem to be catching up. So DDC is a thing. I think we all kind of know this, especially with a lot of the changes going on for Apple and Google Play. This point was kind of interesting. Japan's PC market is up 8%. Mini games. So mini games are games that you can play predominantly in the super apps like WeChat. These are becoming 20% of mobile spend in China. And also the Switch 2 is selling well. So platforms

that are and game types that are not just traditional basic mobile games do seem to be getting a little bit of traction. I think the trend of keeping an eye on what miniames are and I think mini gamess are kind of HTML based inside of these apps. It's just interesting. It's kind of like micro dramas.
HTML 5 app games again.
No, no, no. I I that's how these are working. I'm not saying go do that. I'm saying how they are executing it. It's HTML 5, but it's inside of a super app. This point was super interesting. It also kind of led into an ESA point where women now make up 42% of players across the 13 markets with the steep game steepest games in India and Mina markets. So just a few years ago, these countries, some of these countries like Mina used to be 80% male players 5 years ago. In the ESA report that I'll talk about, boomer women are now more gamers than boomer men. So it's like 52% women

to 47% men. So we talk about this and crush you're always like, okay, where are the untapped markets? What should you be looking for? There is a huge rise in female gamers. Females are almost half of the market even in revenue. So that is something to kind of keep an eye on for this market. Oh, well, one trend that was kind of interesting too was Gen AI. Gen AI has a brand problem. I think if you live in the US, you know that a lot of folks are very negative on the brand AI here, but in the east, they don't have that problem, [clears throat] especially in these 13 markets. And so, those game companies are having an easier time with anything that is AI and games than it is here. So, I think there's just a couple of trends. There's a lot a lot more. I'm just trying to hit some of the highlights. Like I said, there's another ESA report on players coming on Friday. Well, the report's today. So, if you go to the ESA.com, I think you can download the report. My podcast is on Friday.
First of all, if you caught it in this report, they're saying what? China 3%

growth year-over-year. It's like everything we've been talking about. 3% growth is like nothing. Now, Chinese inflation, by the way, is also historically low. They the Chinese central bank keeps that tight under 2%. So, we can't make our usual adjustments there. The thing this read led me down the rabbit hole is looking at the Chinese annual I think it's the mobile game conference which I believe is a state sponsored panel that puts out a report every year and I was curious to see how they're thinking about Chinese growth because we've been talking about the fact that Chinese growth has been stalling and so they're looking westward for opportunities right this is by necessity rather than I would argue conquest and so they're actually reporting 7% again it's a long run decline but not not at the rate that the Nikico partners report claimed which I thought was pretty interesting. And I will say the panel or the Congress here does have quite a wide range of data. There was data also on like mini games, the super apps and how much revenue they drive. They had revenue that also accounted for ad revenue which in some

cases was as much as 50% of these genres. There was just so many interesting tidbits that I don't think have gotten through to the mainstream in terms of like what's working with really solid backing. They talked about strategy games being 50% of overseas revenue for Chinese domestic publishers. Exactly what we've been talking about. Forex is driven by the American consumer. And then domestically it breaks down as you would expect. MOA is 20% of the Chinese market. Shooting games are 18% and role playing games are 15%. That's half of the Chinese market. I thought was just good to remind ourselves of this. Always curious what's going on in Asia, but again, everyone is suffering. I just want to point that out. Everyone bleeds.
How on earth is MOA that low of a percentage when Honor of Kings and League just devastate everything? Was that mo mobile only?
This is mobile only. So, you're only going to get Honor of Kings and Wild Rift.
Yeah, that's crazy.
Mobile Legends Bang Bang. I mean, 20% is still ranked number one. Was that a China only number?

Correct.
Oh, so Mobile Legends Bang Bang is Southeast Southeast Asia, not as much in China.
That's right. Something.
Yeah.
I'm going [snorts] to obviously put a little shade on this. So, first of all, Nico does an amazing job in Asia. They've been on the ground for decades and I'm glad that you got this done with Lisa. Again, she deserve a lot of credit for building a practice like with people on the ground in China that actually get real insights about the market that are good. But I will always caveat these type of analysis with the simple truth is that Western publishers just do not compete in Asia. Period. End of sentence. If you look at Censor Tower, the last time I ran this thing, 90% of the revenue in Japan, Korea, China, and Southeast Asia were from Asian publishers. 90%. And if you actually add Android to the data, it's like 95%. So the TAM is basically almost zero, right, for Western publishers. Now, there have been some notable exceptions to this. I'm not suggesting that it's not

possible, but very few Western games actually compete in Asia for a variety of reasons. Genre, art style, publishing, but I think the main thing is cultural. Like I think there's a cultural gap here. If not invented here, we're not interested, right? So I think that's a big fundamental problem. So why doesn't this work in inverse? Why don't you think there's a cultural gap when they send to us?
Because I think they build games for our market, right? They actually build the same type of experiences. They just improve upon it and are, you know, obviously very pragmatic type game developers and they make games for the west. They also have advantages in terms of publishing in China. So they can publish in both markets seamlessly, right? Versus us which is a really challenge to publish in in China in particular. So,
I think the shortcomings in casual actually speak to the fact they've been struggling with the culturalization element. I think it's easier in midcore because I think those players are more forgiving and actually crave those mechanics, but I think their struggle in casual relative to strategy is because they don't they don't understand the

culturalization that I think is deeply tied actually into the marketing for casual.
Oh, they're already breaking into that. I mean, that'll be solved in the next if if not already in I mean emerge, right? Truck Star. I agree. But but relative. The Asian markets are the reddest of red oceans for Western publishers, right?
No, I I I agree. And I and I definitely in the blog post, you know, that's what I call out is like unless you have something that is like so perfectly aligned for you to expand into those markets, it's just it's very very difficult for anyone to be successful if you're a western if you're a western publisher. For sure.
This issue is like 30 or 40 years old. This is not like something new. We've been trying to break into the Asian markets since the as you know, like before then, right? And we did these deals with EA, with Square Enix that blew up in our face where they took advantage of us and we got nothing in return. Like there's been a constant constant trial and error and spending

gajillions of dollars to move to the Asian markets. And I don't see really that we've made any progress whatsoever. [laughter] I think mobile actually made it worse, not better in a way. I know. I know.
I mean, when I was working on League of Legends, like that was what was fascinating for me because that was one case where they wanted the western game and but this was a PC oriented game. And if you remember, Wild Rift was co-developed. So, it was us with Tencent, you know, co-developing Wild Rift to make sure that it it was still applicable to that market. And Valerant is made by Tencent, right? So the shooter that's dominating there with a with a western IP is made by Tencent.
Finishing it off at a positive note. [laughter]
Really? Is it okay?
No, I think so. I think so. Like, you know, clearly like these big temple games are doing well on the market. We're going to see Grand Theft Auto come out and crush it. We're going to see

Call of Duty kind of rebound to some degree. I mean, FIFA is going to have an amazing year this year, right? I mean like it's going to be a big year for
90% of the market, right? [laughter]
So let's say 85% of the market, let's say. But Forza came out, Forza 6, and it's really selling extremely well at 5 million units. And I wanted to clarify something I said a few weeks back because I think people misunderstood what I was trying to say. Supposedly, like it sold like 2.1 million on Xbox and 2.8 on Steam. These Steam numbers just seem really high to me. But nonetheless, it's good to see Xbox performance as a standalone skew versus like all the units that are taken away by the shitty subscription. So, nonetheless, this game is coming out and it's coming out really strong. And this is the type of game that doesn't cost as much to make, right? Because it's one team that's, you know, building it, etc. So, they should get to 10 to 15 million units relatively easy with Forza, maybe 12 with the with the cannibalization of things. Oh, you got to give up with the PlayStation. [laughter]

Well, Forza Forza 5 was, right?
Is it out on PlayStation?
Forza 5 is on PlayStation and I believe Forza 6 has a PlayStation 5 version planned later this year.
Oh. Oh, it hasn't come out yet, though. Okay.
Correct. They're doing the delay the delay strategy we just indicated and supported that you should have.
So, [laughter] out of all the franchises that have been successful for Xbox, Forza has been maintained pretty well. Now, I think they did cut the team from two to one, and so they're only building this one game, which makes sense to some degree, but nonetheless, this game is of the highest quality. And when I say there's no opportunities in racing, I mean the racing is spoken for, right? Like like this game as well as Gran Turismo. And then on the casual side, you talk about Mario Kart, we don't need any more racing games, right? Because they own this stuff and they execute flawlessly on it. So therefore, that's the market, right? And there is no opportunity to really fight against these games. These games are almost perfection.
You don't think there's anything to Maverick Games, their recent release,

the one that was signed with Amazon games. They recently had a reveal for their racing game. And we also saw Galactic Racer from the old Criterion from Fuse Games, the Star Wars one. No, V2 from both of you.
Yeah, 100%. The so dumb doesn't make sense. This market's spoken for. The only concession I will make is I do think that Criterion when they made Burnout and like the crashing and that kind of like mechanic. I think there's room there because I don't think there's a lot of arcadey type games. So, I'll concede a little bit on that. And I think that's what Amazon
everyone talks about Burnout, but that's because it became an open world adventure game when they made it.
Yeah. Well, you know what's going to kill all of that? It's a little game called Grand Theft Auto that has [clears throat] basically a racing component to it. So, you don't need any other racing game because GTA is going to kill this category. Why do you need any other game when all you got to do is buy GTA and run around in a car as a drug dealer?
And so, and now I'm repeating the same point I made the last time and people,

smart people that I know actually were upset with me, is like, look, it's 5% of the market. It's owned by these two franchises. They're amazing at what they do. The audience is served, right? So that that's the market.
Talk about your codem's thoughts. Sorry. Go ahead. [snorts]
That's a very very niche niche group of nerds that have like, you know, kits at home, which I almost bought by the way. [laughter]
I was like this close to putting this right behind me, you know, actually. And I might I might move this exercise equipment and get a whole racing kit back there. And then then who's the cool one?
Then who's the cool one? You know, like
cool. That's the word you thought of. That's goddamn right. God damn right. All right. So, for First Light, so First Light came out relatively strong. This is a 007 game from IO Interactive, who I don't know what the Deli is, but Deli I don't think they had anything to do with this game, but whatever, dude. They deli is just a vaporware company. So, so anyway, the

game came out strong, right, at 1.5 million units, which is actually quite good for a game like this because it's stealth and, you know, obviously big IP, but whatever. And so, it's good. and the Metacritic ratings were really strong. IO does make amazing games and I basically they just used their Hitman engine and built a great narrative 007 game. Having said that, [laughter] the problem is that the cost of this game was probably close to $200 million. And and if you take a 30% retail platform cost, you know, and then the 20 15 to 20% royalty, you're talking about a break even units of like 10 million units at full price, right? Sorry, 8 million units at full price. But with discounted price, it's like closer to 10 million units at 1.5 million units or 2.2 two I think they are in the first week. It's going to be a tough one to get there. I would say this game likely will be marginally profitable in a year, right? So, it's not the success that people are showing. I don't think it's going to have a lot of legs. I think the gameplay

is super core and niche with the stealth gameplay despite the big license. So, this is not as big of a success as I think people are kind of expecting.
Oh, interesting. All right. Well, see, I told you you turn good news into not good news. It's true Eric Crest fashion.
I mean, it's a great game if you liked stealth gameplay and 007 storm.
Yeah, you're really in game gameplay doesn't seem like the barrier here, right? Like it was positively reviewed critically. It's James Bond. I don't know, Jen, if Eric is right here, you're telling me 50 million in marketing on 200 in development. That doesn't seem like the right ratio. 25%. I think you you bump this up, right? What would you be setting this budget at
for budget?
Yeah. Yeah. You kidding me? I would I wouldn't let this thing release without 100. This is like a blockbuster event, right? I mean, this is a key franchise MGM rarely lets out. I guess this is Amazon now.
Amazon. Yeah, they own the IP.
I don't know if I would have spent more than that. 25% it I mean, well, first of

all, do we really think it was 200 million in spend against a game? Like I just think when you would model this, you know, Crest, what I would always do is sit down with you and be like, "All right, let's model this out on expected units and how much can we spend on dev? How much can we spend on marketing? You know, what's our budget? What's our high-end forecast?" Remember at EA, we always used to they made us do two forecasts. We'd have to do like budget, which is you got to hit this number or you're fired. And then the marketing number, which was like what what should we like aim to do? All of that feels super high for a game like this, like you said, that is a niche shooting stealth genre. And then also [clears throat] with the IP, you're, you know, Phil, sadly, sometimes what happens, especially when I go in pitching for a budget on an IP, they're like, "Jen, you have an IP. We're paying 15% for the IP. So your budget, your marketing budget's 15% lower." I'm not saying that logic is the right logic, but that's the logic I get.

Yeah. This was a report by Oh, I actually don't know where it originally came from, but yeah, they said it was $200 million. The most expensive game in Danish history. [laughter]
I just don't think I would have green lit that spend on this genre for the potential TAM of what this could be. Like that just doesn't pencil.
As much as stealth has been a big component of gameplay over the years, and I think there's some people that absolutely love it, right? Splinter Cell, etc. But I think it's a very niche gameplay game style in this day and age. It has a narrow interest, but that's why the the license makes sense. But ultimately, the license isn't going to carry this game broader because of the gameplay. Right.
Well, and there's also nothing going on in the license except for the announcement of a new James Bond. I think they're trying to find a new actor. It might even be Idris. What? What's that guy's name? Uh

just no.
I thought I saw his name in consideration for that. Oh my god, he's amazing. If you ever watched the Luther series, I would love to see him as James Bond. He is a badass. All right,
let's do Bungie real quick.
Recent announcements at Bungie. It is finally happening. It has been weeks in the making. We've been talking about this. Bungie is apparently planning layoffs after ending Destiny 2. This is from our favorite reporter at Bloomberg. And yeah, I just think this is sad. I think this is a huge loss for the West. I hope they can regroup and come back stronger. Although, I don't know what the comparison point is for this, Eric. I don't know if you know any familiar U-shaped stories, but at the end of the day, I don't understand why they laid it all on the line for Marathon. I love this product. I support what it stands for. I don't get why there was no adult in the room saying, "Are you guys morons? Yes, you make the third version of your highly successful, profitable franchise. Like, betting the house on Marathon is just absolutely

baffling to me. Absolutely baffling to me.
There's such a long history here and I I don't want to go too deep into it, but the at the end of the day, they were acquired for an insane amount of money and the expectations on the studio was that they were going to lead the live services efforts at Sony, right? And frankly, this team did not have the capability of leaving live services operations at Sony. They just don't like they weren't very good at live services to begin with. They did an expansion model. [laughter] That's not live services. That's not actually one small component of live services, I will say. So, I think expectations got way ahead of them in terms of what their capabilities were. I think they did a reasonable job of managing Destiny, which is a franchise I absolutely adore. So, I'm so sad to see this. This contradicts my narrative in the sense that I thought that they would be able to get one team against Destiny 3 and that would be their final like last stand in terms of a studio to execute against that. But the new stories that are coming out is that they don't even have that green lit yet which is would

be really tragic because that could mean that the whole studio gets closed. Having said that, Bungie is still a very very valuable brand to the audience. So, I don't think they would or should do that and I hope they don't. What I hope is they do come out of this and actually greenlight the next Destiny and move forward with the existing team to do that. That's what I hope.
Do you think Sony gets them? [sighs]
Who's going to buy it?
You know, the Saudis might buy it. You know, look, the Saudis are the only ones buying right now. Would they buy the Bungie team? you know, the remnants of the Bungie team and and the Destiny brand. I mean, would Sony really sell that?
Bungie and Destiny have lots of value inherent in it, right? How much money is that worth to Sony?
Yeah, but they need a publisher, so it's got to go somewhere.
Well, EA can publish it.
If it was another, remember the citystate model at EA? If it was what EA

Partners, is that what that was called?
Yeah, that worked really well for uh Mass Effect guys. [laughter] Um,
well, they weren't EA partners, though.
Respawn. Respawn was an EA partner.
Mass Effect is
Canadians. Boware.
Bowware. And Pandemic. Don't forget Pandemic. They got They got shut down early. They got shut down early.
I know. I was around for that one.
I like that team. Those guys were really cool.
Anyway, yeah, I think this is Yeah, this is very sad. I was really hoping that. See, this is contradicts kind of the what I was hearing from behind the scenes that they were actually working on Destiny 3 like while Marathon was finishing up. But I don't know, maybe I'll recheck folks, but I don't know.
All right, trio. Good episode. Lots of good talk. I won't see you in the next couple of weeks, but you'll see these guys. World Cup kicks off. So, one of the things I think the guys will talk about next time is what's going on with FIFA Gaming. And I will just chime in and say it looks like I don't know what's going on. The trailer looks like

awful So, sorry to be so harsh on the exit, but let's go watch some football. All right, everyone. See you next time. [laughter]
An American take on football. That's what the world needs.
Hey, I am a footballer. I am a legitimate person who can comment on football. You [laughter]
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