TWIG #390: Destiny Ends, Xbox's Biggest Layoff Ever, and Google Play's New Fee Chaos

2008 that is when Android came out.
What the have they been doing for 20 years? Like what the has Apple and Google been doing for 20 [ __ ] years. Hello everyone and welcome to Deconstructor of Fun This Weekend Games 390. I am Jen Dano. I fill the marketing and publishing role on the podcast. Today we have
airrest strategy investing friend of the founders. Oh, by the way, I'll be the monetization today as well since the criate is out. So, I'll talk about games and monetization covering his ass.
Oh my god. All right. So, here's what we got going on on the episode today. I actually don't think we're going to get to most of this, but it'll be a nice news recap for everyone. So, sadly, this episode feels very 2024 with a ton of layoffs and closures. Sony cuts Bungie, Destiny is ending, and Marathon is still alive for right now, but a little bit handicapped. Xbox is rumored, and maybe

it's stronger than rumors, with a Verge article today, to have the largest worst layoff in history coming next week. And Xbox raise prices on consoles because of the RAM apocalypse. And Sony puts an end to physical discs coming in January 2028, right when memory is the most expensive. Good timing on that announcement, Sony. All the layoffs have our USSR born host uh talking unions. First of all, he put that in there. I guess I can't say Russian because it's technically was a different country. And so yeah,
he wants to talk unions. We don't. We'll we'll we'll figure it out. Google Play rate changes and level up details were released last week and we had a chance to do a Q&A with the Google Play team for deeper insights. That's going to be kind of interesting. We got a lot of good clarification from them. New friend slop game called Mecca Chameleons is

kicking everyone's ass in unit sales on Steam. Voodoo has another crusher in their portfolio and Mishka can't wait to talk about it cuz he's addicted. Since Crest, you're a Care Bear, I wanted to do a review on how the horror genre across all media is killing it right now. Just murdering. I mean, absolutely on a rampage. Brawl Stars and Adidas do a collab for in-game physical merch, and I actually think it might wreck the brand because of how they have done that. Even though I do want those sambas, I wish we had time to discuss the love and deep space community drama. It's another example of how important community is. The game kind of like wrecked it and so now they're in the oh [ __ ] we have to build our trust backstage. So, um, it is football season. So, I got to go to the US versus Turkey game and then this is me at Sofi and then with my lovely wife in the uh the next picture. Wonderful experience. My big takeaway is

that US fans do not know how to cheer for football. Um it it it's like going to an American football game or a baseball game. Like they're doing stupid chants. Like there's no singing. But the energy was fantastic until the last 30 seconds of the game when we lost because Turkey actually was pretty good and we didn't know how to deal with him even though we didn't play all our starters
and both both got relegated, right? Both USA and Turkey got relegated, right?
No, no, no. Like US moved on. US had already clinched a birth in the next round. They're playing uh this Friday.
Tonight? Tonight? Yeah. Against Bosnia. Bosnia had to go.
Yes.
What a powerful country. If you lose to that, it's going to be really sad.
No, I think it's pretty good. But there have been some upsets like Germany.
Uh Germany getting ass kicked. Who else? It's not Holland. It's the Netherlands. Jesus Holland. It is Holland.
All right. Y is going to call us and

yell at us, but I say it's the Netherlands, which was actually pretty surprising. Okay, let's go to shills.
So, quick quick shills puzzle monthly dropped. So, Match Villains from Good Game Studios. It's a great looking puzzle game. If you haven't taken a look, the Good Game Studios raised $50 million last year. They scaled aggressively, hit the wall, and now Good Game Studios looks to have pivoted back to hybrid casual. So, the puzzle geniuses are discussing what happens when you chase the dream and go after the king in today's market. And then second shill is subscribe to Deconstructive Fund newsletter. Go to deconstructivefund.com. You'll find it there. because we will be dropping all the upcoming events. There's Limaol, there's Gamescom, there's all kinds of fun stuff. So, subscribe and get you into our events. And then on to corrections. In the last event, since we're talking about puzzles, I mentioned I told the story about the Queen Games or Queen Entertainment, whatever they

were called. It's a studio from X King founders and that went under. That was a Neil's story from mobilegamer.biz. Forgot to mention the source and it came in hot last minute. So all the credit to Neil for doing journalism unlike what we do here.
We try to credit folks the best we can. Sometimes I take a combination of of different articles, but sorry about that. Neil, he spent a lot of time sourcing that one, so we wanted to give him all the credit. In fact, a lot of what we do is thanks to mobile gamer topiz. He's a top source in everything that we do mobile
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meets performance. All right, let's go to the first story, which we didn't get to last week. I think people were joking in the Slack. Everyone drops their news like Wednesday after 8:00 a.m. Pacific when we typically record so that it doesn't get in that week's episode. So, a couple of these happened I think Wednesday, Thursday of last week. So, Sony cut roughly half of Bungie on June 25th, ending Destiny after 12 years. And then the next day, it's the PlayStation CEO reaffirm service and AI strategy that the acquisition of Bungie was meant to fund. So, there was something called a war filing. This is like a US government filing that allows kind of journalists to go and see what's going on with layoffs. So, this filing confirmed 292 cuts in Belleview, which is a suburb of Seattle, with total losses near 300 when you factor in remote folks. Separations start July 9th. This is Bungie's third

round since Sony's 3.6 billion buy in 2022, pushing cuts past 600. And Sony took a 766 million impairment on the studio for fiscal 2025. Destiny 2 shipped its final update June 9th. The studio had stepped down and Bungie lost its entire cinematics team and Halo era veterans. O Marathon now carries the whole life service bet despite selling an estimated 1.2 million copies which is about 55 million gross. That's from Alenia Analytics. That piece only 19% on PS5. And then the thing that was also interesting is that they later the PlayStation CEO said that it wants to revitalize life service and framed AI as a tool to augment not replace studio talent. This is red meat for crest. Why don't you take this? If you look at the history of talking about this particular acquisition, I was not very bullish on the prospect of

Bungie going to Sony because I don't think that this was a really good acquisition for them and it was super expensive. It didn't make sense back then now. But the one clarification they want to make is that they even though the Washington was 292 jobs, I think the total was more like 400
including affected employees outside of Washington. So if you think about it, it's like an absolutely massive cut, right? Because it's almost like 40% of their 850, right, that they have now, right? At their peak, they were at 1300. So it's basically devastating, right? This cut. So in essence, they're almost like shutting this thing down. It seems like um maybe they have one team left to make one other game, but that's unclear at this stage. It's very very sad to see such a beloved developer cut down because not only are they amazing developers, they also there's a lot of goodwill from the customer about about this particular studio. But again, I have to counter it with the idea that

this acquisition really didn't make sense at the time at all, right? Because because it was kind of a combination of like wild expectations of what Bungie could accomplish and then also a little bit of hubris from the studio itself on what they could actually achieve. I don't think they really understood what they were buying as well because I think they set an insane level of expectations against the studio. But it goes both ways is what I'm trying to say. And again, I made this point before is that you can't expect
a studio like Bungie, which is fiercely independent. They build their own stuff to be kind of your centerpiece of live services for Sony worldwide, right? because their goal and their objective was to make Bungie train all these studios that have no experience whatsoever on live services to do live services, right? That is an impossible task for any, you know, company, any independent studio, particularly one as fiercely independent as Bungie. That whole narrative didn't make sense. And

then on top of it, and as I said before, Destiny is not particularly good live service either. It doesn't have any of the business models associated with live services that have made the most current ones popular. It is an expansion model almost purely. It's like 80 80 90% of the revenue is driven by the expansions not by microtransactions or anything those type of activities right I mean it is a live service in the sense that like you know content's being delivered people are playing all the time etc etc but it's kind of an old school model it's not contemporary in a lot of ways not current live service I we we talked about this when it happened with like Concord back in the day which is
you know they were kind of asking folks to go train other people while continuing to run the game who could be likely on completely different systems and like you said like they're from their own studio like you don't just become a professor overnight and go around to other studios and be like this

is how you do it
you can do that the effectiveness is a different thing
well okay yes can and should are two very different
ideas
yeah that's actually a really other good point that I didn't even think about is like from the tech stack perspective like they're all working with different technologies though it's not like you're going to be able just to just just unplug it one place and plug it somewhere else because they're they're doing completely different things. So anyway, this was a recipe for disaster from the get-go and this is kind of the result and it's really really really really sad because I do think Destiny has a brand, it has an audience and Bungie definitely has a brand and an audience. So they're basically losing out on that and yeah, it's looking more and more likely this is going to get shut down. I wonder if, you know, the world would be different. Would Destiny 3 come out if it wasn't acquired? I mean, you know, could it have is another question with how expensive things are. But I don't know. We're in a world where all of these studios, even Blizzard, even, you know, Activision are starting

to fall under, you know, these parent companies that have a say in the future of these storied studios. And we're about to get into Xbox in a in a bit, too. But so Mishko, what are you seeing from I think you pulled some steam numbers.
Yeah. Yeah. Steam DB just I know these are quite inaccurate but but at least it shows a trend line overall. Kind of zooming out. I would say that what 80% of acquisitions fail in all business. So I wouldn't per say that this is specific to gaming or even specific to Microsoft or Sony. Just postacquisition integration is very different. And by failure, I mean they fail to produce the value that they intended to produce. Anyways, so looking at the Steam DB charts, Destiny didn't really fall off the cliff, but kind of experienced a gradual decline. When we were looking at the player count, it's still pretty high. Like they had in June 167,000 on Steam player. So that was with an update with the latest update. The bump

was nice, but these update bumps, these DLC's became radically smaller since 2024. and the time between the player count bumps started increasing. So the way I read it, looking at this graph, is that despite the very strong gameplay foundation that each of the update delivered, these teams of hundreds of very expensive US-based developers, they shipped these massive releases that suffered from quite significant postlaunch player retention issues despite delivering on the player needs. And those cost losing a vast majority of their core audience in the months that followed. So you would have players come in and then they would kind of leave and then less players would come in with the next update. That kind of is the trend that this graph is showing or at least that's how I'm interpreting. And then we have to talk about also the Destiny mobile like you guys remember this one. So this came from NIS.
It was really well done. I remember Quest was talking highly of this and it

kind of made him want to play the OG version again. But we seldom see these type of graphs anymore. There's a launch and it looks like just pulled the plug. Like just just pulled the plug. Just launch the game and be like, "Okay, enjoy. Bye." The numbers aren't that crazy bad. I think it made about 20 or $25 million till date with 5 million downloads, but there's no live service. We talk about live service. We talk about live operation. This game received none of that. I don't know if it's net ease. I don't know if it's a contract issue, but they launched and forgot the game. So, that kind of leads me to the uh question that I kind of have for you is like with all these layoffs talking about this and talking about Bungie and Destiny, like if these people, these amazingly talented developers would come available in like 2020, 2021, 2022, maybe even 2023, they would be extremely hot commodity, I would assume. Currently, Destiny 2 is they released

their last update. There's no much talk about Destiny 3. Marathon didn't go on the run the developer hoped it would go on and the life service playbook looking at these graphs and looking at the success of the publisher seems kind of outdated in the current market. So my question kind of for you is is like where do these amazingly talented people go from here?
I mean it's about to get worse on the next topic. Like I I don't know. I go maybe they have to form a new studio, but then you know for all of our other ranting, nobody's getting funding.
I mean, so many people I know are leaving the industry. I mean, I don't know about a developer, at least when I talk to like marketing publishing people, you know, they're starting to interview outside of games.
Well, they also don't know Destiny, right? So, they have to start over, start from scratch. So you think about like teams from Blizzard and Riot and stuff that went off and tried to build their own IP and were you know funded by

people like you know Lightseed right like that doesn't exist anymore because it doesn't make sense either right so
yeah and those are like tens of jobs
yeah and I think like some of these new publishing arms may be a home to fund like smaller things but it'll never be destiny you know there'll never be a $200 million you know jaunt Right. So, yeah, it's it's really sad, but actually, we're going to get get to the major point with this this new round of layoffs with Xbox next, which I think will in some ways illustrate what likely is going to happen.
So, RIP, I'm wearing my Xbox swag as a fan. Uh, it's super sad and next week we'll probably have like the final numbers, but this was confirmed a little bit more this morning by the Verge. I think all of it is still like rumor until it actually happens. Microsoft is planning what could be the largest layoff in gaming history. It costs its Xbox division with studio closures set

to begin July 6th, just after its fiscal year closes on June 30th. This is the typical trend that they do at the end of their fiscal year is they make all the changes to get it in under the wire or after the wire, either one. So, here's what's going on. Five studios now face closure for sale. Double Fine, Undead Games, Compulsion, Ninja Theory, and Arcane Lion pushing the job total above the earlier 435 estimate with Compulsion already hit. Uh Microsoft is set to cancel Arcane Lion's Marvel Blade or close or sell Dishonored and Death Loop Studio with Blade over budget and already delayed from 26 to late 27. Blizzard, Bethesda, and other divisions face additional percentagebased cuts on top of studio closures. So, the blast radius is pretty wide. Um, not just on studio closures, but on others folks as well. The CWA, I think that's a union. It's now representing over 3,500 Microsoft workers, held a press call attacking management, noting Microsoft

raised console and gaming prices up to 150 in its third increase since 2025 and cut bargaining time from 12 hours a month to four. So, we'll hit Xbox price increases in a second. 3D Realms co-founder George Brousard citing an internal source says that again like will likely be the largest single layoff in gaming history. In our Slack, somebody posted this, I think it's from Wikipedia, this image of like all the Xbox studios and somebody's going and kind of like marking off, you know, just so that we can have a visual on what's left. Uh this is a lot and you know knowing their numbers and knowing what Asha has been out saying about cuts is coming. Crest let's let's talk about let's talk about the sadness.
Yeah, you know I'm actually a little bit torn by these moves. You know, on the one hand, it's clearly taking away some of the most remarkable, beloved studios.

Um, that makes really, really compelling content for the core, which is a huge draw for Xbox and the ecosystem itself. It makes the platform generally less valuable for the audience that it's trying to attract, right? And it makes the Xbox ecosystem less appealing, you know, to those 200 million core console buyers, right? Like, fundamentally, that's what's happening. I don't think anyone would make an argument otherwise. On the other hand, as an operator and someone that is, you know, focused on fixing the profitability issue at Xbox, like most likely these are all unprofitable studios. And I hate to say that more on a blanket basis, but like if they're break even or unprofitable, like this is a very easy thing for anybody as an operator to look at fundamentally over whatever period she sees fit and to see that these studios need to go in order to make a more profitable group. And I I want to be clear also on this point. I was a huge

critic of these acquisitions at the time. I'm not trying to change history here. I am saying that when they were acquiring these studios, I thought all of them were too niche, right? When you talk about Bethesda, Activision, Blizzard, Bungie, Mojang, all those made sense to me overall. But some of these studios that they're trying to shut down now were niche back then and they continued to be niche, right? And if their stated goal at the time was to grow the TAM and build a [ __ ] stupid subscription, these were the wrong studios, right? They should have built more studios that could build more casual content that could increase the TAM to a broader audience, right? And so anyway, I just want to be clear on that point too. That's why I'm a little bit torn on this. So what I think is happening is obviously Chararma is clearing the decks and focusing on the biggest studios with the biggest opportunities. You know, Turn 10, I mean, all these studios that are remaining, Activision, Blizzard basically is just for the most part Call of Duty obviously we know what Blizzard has and then Bethesda, etc. like they

all have games that are have a much more broad appeal are likely profitable for studios. You know, my take is that maybe it's not very popular is that ultimately these may be the right moves for Xbox, but obviously very painful for the teams and likely, you know, damages the brand. And the deeper you cut, the more likely you're going to basically destroy the loyalty that these players have for your console. And you're also decreasing the loyalty of of the customers that you're trying to attract, which is super risky. But we don't really know what the context of overall strategy is. Is it to make it more profitable under Microsoft's umbrella, or is it to basically package this up to spin it out? But both make sense. These moves make sense in order to do both, frankly.
Yeah. I think they're also looking for buyers, too, of those studios. And I think part part of why I think we haven't heard a lot yet is they're shopping studios, but I think we talked about this last week. There's not a lot

of buyers right now. Sadly,
management buyout is the only thing. But you said compulsion. Compulsion is not Gears of War. It's contrast in 2013. Then they did in 2018. They released We Happy Few
and current game in development. So 2018 was their last game.
That's all eight years ago. And then they were working on South of Midnight.
Can I make other one other nuance point here? And and the again stuff I've talked about before on the podcast like look EA, Activision, Take 2 all went through this process years ago in which they basically consolidated to three or four franchises, four or five games a year,
core franchises, making all the investments, huge investments, big blockbusters. Like this happened, right? The only companies that didn't do it were really Ubisoft and then on the platform level Sony actually hell even Nintendo did it right but Sony and Microsoft were like left with all this type of junk right and not junk I shouldn't say junk lots

no it's just niche right like
niche stuff right and so there was no forcing function for Microsoft and Sony really to to consolidate amongst the big brands that they have because they were the platform and they were making most of their money from third party right and Sony still has that luxury, but Microsoft does not because they're losing the third party war in a grotesque manner right now. Some of the rumors were that GTA is pre-ordering 8 to1 on Sony versus Microsoft. Dude, that cannot sustain Microsoft. That is a disaster, right? And so this is where it gets really complicated. It's like it's it's it's, you know, chicken or the egg type stuff. But at the end of the day, we went through this consolidation like 15, 20 years ago, right? And so, but Microsoft still has all these studios that do not contribute or perform in a meaningful profitable way, right? And so, like this is a day of reckoning that should have happened before under the previous administration at this studio at these studios, but it

did not. And so, this is why I'm a little bit torn on this. Like I get why people are upset, but like this should have happened eons ago.
It's even happening in in media like with Paramount buying Sky Dance and the merger with Warner like they're saying that their strategy is fewer, bigger, better. Do you remember at EA were you there for fewer bigger better and the burning platform from John?
In a m in a mature media industry that is the only strategy. I'm sorry. I'm really sorry. Taking risks on small niche things doesn't make sense in this world. like in this mature market for both mobile and console that we were in. I keep having to reinforce that until we get new platforms. This is this is the world. This is the business. You know,
Cres's strategy memo would be no mice nuts. Like that would be like like a really really big what are we doing? We're not doing mice nuts. Like that's the only
I can't wait to my horror point. It's going to be fun.
Uh moving on. Let's go talk about Xbox

pricing. No, we're not talking about unions. I don't want to talk about you don't have to talk about it. But I've been seeing this a lot online and there's an interesting case that people are essentially calling for unionization because they see which is correct view in my opinion that workers carry a lot of asymmetric risk here because when studio ships a hit the upside tends to go to a publisher. when studio misses the workers lose their job or when a publisher changes their strategy like in this case studio lose development contracts and then that again leads to the workers losing their jobs and so I looked at the uh the unionization in creative industry film and and TV is of course the uh the great part of it Chris is such a capitalist he can't be even listening about this but I'm I'm a European I can talk about this for us you word is not a bad word we do have a lot of unions so the benefit of of unions in creative industries is of course the residuals and the royalties, but there also are elements like

recalls, rights after layoff. So basically, if you've been laid off, like if Jen, the marketer, has been laid off, she would be the first in line if the studio again or the publisher needs to hire a marketer, that is your right. They would need to call you first like, "Hey, Jen, are you willing to come back?" Then there's severance floors, which means that there's a minimum severance payout that cannot be negotiated away. Doesn't sound like as horrible to me. There's a procedural protection against arbitrary termination and there's also something very interesting that is there's disclosure requirements meaning that you have to be proactive in your communication so that the employees understand what's going on in the business and through that make their own decisions or be more prepared. It's not just a surprise town hall on a random Monday and you get you know sidelined by this. So all this makes sense to me. This doesn't sound radical at all, but you know, especially since the uh gaming industry is now in a contraction phase, a sort of a normalization of a crunch ship, take a

break, find a new job. It's just not there anymore. And through that, people are asking for unionization. Jen, you have you seen any of these articles about unionization? So the US is just very different and it is very complicated and the list that you read is not necessarily from what I the little I know is not exactly how it works. I will say I saw an article yesterday about folks at Rockstar on GTA wanting to unionize as as well. There are Microsoft folks or some folks at Blizzard which is Microsoft. I think it's a complicated issue and it is very different depending on on where you live and I know Europeans see this very differently than the US sees it. So I don't think I am smart enough to to cover it.
I'm just going to say one thing about unions because like the best time for unionization is when the industry any industry is expanding because it's made to protect existing jobs not to create

new ones. So, I don't think it's inherently bad or good that the studios are looking for unionization. I think it's totally understandable. So, when I was reading these articles, like I I totally get it. I just sadly it's not the best time to create unions in a contraction phase. The best unions are created when the industry is expanding because then the employer really needs the workers and through that the workers have the most rights. So that's my take from highly unionized helenic republic. We can no we can do
he's rapping and thank you for putting your uh your US
put on the USA shirt.
That's why we're the leader of the free world, right?
Uh debatable.
We abandon a debatable.
All right, moving on.
All right, moving on. Chris, let's talk about Xbox price uh increases.
This is really, really quick. So, Xbox is increasing pricing on the Series X by

like $150
again.
$150? Are you kidding me, dude? So, the entry level price for a Series X, which costs, I believe, $500 at launch is now $750
without a disc player, right?
Without a disc, right? And $800 with a disc. I think I'm not even talking about Xbox Series S because it's a piece of [ __ ] device that has no business being in the ecosystem, but if you compare that to an entry-level PS5, the digital edition is $600, right? So, the customer's choice is clear. If you're going to play GTA, you're buying a PS5, right? If you don't have a nextG console, you're buying a PS5. That is the correct decision from any reasonable, thoughtful consumer. And they all are all very reasonable cons. Or or you could buy a 10 $1,050 piece of [ __ ] Steam Machine. Like that's

an option
without controller.
Yeah. Without a controller
and no ability to play GTA for 6 months forever.
Like look, I mean customers are not morons. They're going to do what makes sense for them. Now it is possible that Sony increases price before the launch of GTA. That is possible. But I doubt it would be anywhere near 750. It probably be another 50 bucks. But PS5 is a better console. Better Well, I wouldn't say it's a better console. That's actually not quite true, depending on who you ask. Better exclusives definitely much cheaper and it will be the default console for GT5 this holiday. And as I said earlier, it's supposedly out pre-ordering at 8:1.
Wow.
Jesus. Well, and they won't have a disc uh starting, what did I say? January of 28.
So, uh now they don't even have to make a disc player for later on.
Look, I mean, at the end of the day, Sony wins. Like, there there's really I

don't even know how Xbox can pull back from this. Like, it doesn't even make sense.
Microsoft doesn't even need to. Doesn't Microsoft probably doesn't even want to pull Xbox certainly wants to.
Yeah, but Microsoft doesn't need Xbox anymore. Anyway, yeah, the price increases are are [ __ ] dramatic. Um, and these prices don't typically come down very quickly either, right? Um, you know, because there's
Do you think Sony not having a disc later on?
Like, do you think that pisses off players or not? I mean, haven't most people moved on to digital anyway? Like, am I going to be pissed that I can't put my disc into
a console in two years?
No. And not to mention the fact that you're entering in a you're getting a a physical copy of it, but it's a it's a code. So, you're going to be able to buy it at Target, but it's just going to be a box with a code in it, right?
Yeah. I mean, we all know that back catalog is something everyone says they

want. No one uses, you know, do I care that I can't like take my disc?
No, no, because it'll be unlocked on your system itself, right? Once you unlock it, it's available to download and play at any time. Well, I bet they'll do something like that, right? Like if you own a disc, you can you can say I should get the digital version.
Oh, I see. I see what you're saying.
Could this be somehow tied this pricing strategy to Project Helix?
Like I don't know, maybe if you increase the price of this, then it becomes closer to
Helix apocalypse.
Yeah, it's outside forces. I think he's Helix is kind of done. I don't think they're going to do that.
This generation is going to last a lot [ __ ] longer than the old ones, right? like they're not going to have new hardware like that comes out $1,100 because of the RAM apocalypse. I think they wait as long as possible to get the best to lowest price possible.
Do we even need new hardware? We don't. No,
I don't know what else it would do.
Yeah. Was it PS5 Max or something? You remember when that launched and it's

just bro
and you're like what's the benefit? Like I remember looking at these side by side and you're like in this game you can see inside a car where somebody it's just like what? Yeah.
Some people care about that, right?
No. The core audience cares about frame rate and the best graphics possible.
No compromises is basically what I think that device was about.
Meanwhile, Switch 2 is selling like hot, you know, hot like hot pockets. Is that is that a phrase?
Well, they had a price increase as well.
Yeah.
They're selling really well. Sony's going to do a price increase. I mean, it actually should be announced relatively soon if they're going to do it.
I mean, they're already razor thin margins anyway. And then with the cost of components going up as much as they are. Well, didn't didn't they do a price increase last year? I thought we covered. Yeah. So, they'll Okay.
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All right, so let's go from console talk to mobile talk.
This is kind of a big one and and hang with me. I'll break it up and get your guys' comments in between. So in March, Google outlined a new fee model for games and promised details later. And so here we are. So last week the June 24 announcement delivered on those details. We're we are actually able to ask the Google Play team questions and we received fairly candid and straightforward answers. I will say it was lovely to be able to do that before we recorded. I'll include that in the recap of what changed and what held and we can discuss each section and then uh Mishka I think you're going to try to do a blog.
Yeah. So all the questions. So we had a written interview with Google Play. All of us kind of were able to ask whatever we wanted and the head of Google Play actually answered all the questions. And

so we're going to I believe this is called journalism. So So we're going to so we're going to we're going to do it and we're going to post all of this. And so if you use this interview, you need to quote us.
Really?
Oh, that that's actually pretty funny. Yeah, we we have original sourced information. Yeah, that's pretty funny. Yeah. Yeah, it was fun to go back and forth um and get those. All right, so here is what's going on. And all of this, by the way, started yesterday, June 30th. We recorded on July 1st. So, this is the fee reduction and billing situation going on right now. The June 30th date covers Europe, UK, and US. And so there's a whole roll out of the fee changes, but right now live is those kind of countries and regions. And we're looking at kind of a table. I'm going to walk through it. All of this documentation is on a bunch of different websites which we'll link in probably

the show notes and in that blog post so that you can go and get a lot of detail. For games that make only up to a million dollars in annual earnings, you're at 10% for your rate for everything. as is the same with subscriptions. And so all of this conversation is going to be for games that are a million dollars plus in their annual earnings, right? So we're talking about the bigger games. Also, in context, there's a 5% billing fee that applies only when a developer uses Google's checkout. So that's for all of their services. I think it's in like 300 countries and safety, security, all that kind of stuff. So even when you use like a web shop, they charge you similar fees. I don't know if they're 5%, some of them are more and some of them are less depending on it. So that is another piece that you just have to add on to all of the numbers if you're going to use their billing system. Okay. So for new installs, what they've done is they've parsed out new installs versus existing installs. A new install is

anyone that installs your game for the first time after the date the program starts in your region. So in the US for example, any new person installing your game will pay a 20% service fee on inapp purchases. Now if you're an existing install and so if you've ever installed a game and you reinstall that existing install would have been before the rate starts in your region that is 25%. So any reinstall is tied to your account so they will know that and so that will be come in at 25%. for a purchase of an app purchase and if you purchase through a web link, I'll just call it web link which is web shop or you know anything like that. A web link is 20%. That's for an existing install. So the level up program which is a whole separate program if you and we'll go through some of the details there. They actually gave us details now of what you need to do to be inside of the level up program. Mostly this is going to be bigger companies because there's a lot of requirements. The level up program will get you a 5 percentage

point reduction across new, existing, and web shop rates. So, it's 15% for new, 20% for existing, and 15% for web link. It looks like the hardest thing for folks will be like this existing versus new player because the math is kind of like 30%. So, because an existing player is a 25% and if you don't make any changes and you're paying the 5% Google Play billing fee, you're still at 30% for an existing player, assuming that you're not using a web shop. So, let me just talk a little bit about, you know, these billing choices. You know, web link versus, you know, just using Google Play. So, developers can now use their own billing link or link players to a website and that was already announced in March. So, routing new or existing players to a website sets the rate at 20% and removes a 5% billing fee and it's 15% for level up. Okay. So, I was also happy to hear that Google stated to us that the billing

choice if you choose to use a web link does not affect the store rankings, discoverability or featuring. You are not harmed in any way in terms of discovery if you decide to use a web link. I think that was a rumor. We were worried about that. They said that doesn't happen. Okay. All right. Let's pull back a bit. Like this numbering junk is unbelievable. Complicated and useless.
Super complicated.
Yeah. I And it only matters for the operators, right? I mean, I think you did a great job of trying to make sense of it, but what are they trying to accomplish with this? Like why not just say, "Hey, it 20% done, right? Moving on." Right? Or like what are they trying to optimize around here? If you were to guess,
what they did say in the in the interview is like, listen, we before all of the changes in the world with all of the lawsuits, we're trying to still get credit for all of the work that we've done in the past. And so that is their logic for the existing install. What

they're trying to say is going forward, this is the new world going forward, and they want to offer the best experience to players. And so they're offering another way for you to get discounts by participating in the level up program, which we'll go through in a second. So that's kind of like their incentive program for doing more to make things better for player experience. And so if I were to summarize, that would be the high level of what they're trying to do. Yes, it becomes a little bit more complicated, but there are benefits to kind of playing ball with some of the details coming. I I guess the other the other issue I have with all this is that this is again in a way regulatory capture for the big, right? Because the small are not going to be able to to audit all this crap. Like what kind of systems and what kind of like people do you need in place in order to like figure this [ __ ] out because this is just Google, right? Then you have to do the same [ __ ] with Apple.
I don't remember where Apple is in all of this. And it was one of the questions

that I had is like, hey, is the Google Play Console going to help delineate since they know the accounts? Yeah,
help with the tracking of an existing install, which by the way is your whale and is your most valuable. I mean, so many games that I'm working on. The people that are still paying have been playing these games for years. And so, you know, sadly, it's status quo for those people unless you move them to a web link and then hopefully your web link comes in under 30%. If you can like negotiate that rate, maybe you can capture a little bit of margin. That is a concern that I had is the complexity of like forecasting the business. Now you got to do LTV by like existing players and
players. You have like six cohorts, right, of god of one install like month or something like that. I mean it's like six because you would decide to be in level play or not.
Does that incorporate old installs? Let's talk about level play real quick to make more complicated.
Yeah. Yeah. All right. So
let's get really busy about this.

Yeah. Yeah. So, this is Mishka's favorite sidekick, too. Um, so the Google Play Level Up, and hopefully I won't [ __ ] it up and say Level Play and confuse it with Unity. So, this is Level Up. It's an optional program that rewards high-quality games with promotional placement and lower service fees. So, again, this is 15% on a new install, 20% on an existing install would be the rates that you get. Five points lower than the other rates. So, there's three pillars. One is at stable play. And so this is 60 uh FPS on reference devices. They have a whole list of devices. It's not as big as I thought it was going to be. It was like uh you know 20 30 different devices. Keep crashes and ANRS to a minimum and render with Vulcan which I guess is a piece of tech that allows you to just get better performance. So crosscreen reach. So I think this one is going to be a little bit more difficult for folks. I I do want to say that you can apply for an exemption in some cases. So, Crosscreen Reach is optimized for large screens and foldables and support

Google Play games on PC with a mouse and a keyboard. And it was a question I asked them. I'm like, "Not every game is the best player experience with a mouse and a keyboard." And they're like, "You can apply for an exemption." I know that was going to be a big question for folks. Consistent mechanics. So, you have to do achievements, game stats, enable cloud saves. And cloud safes, by the way, you don't have to just use their service. You can use any service. and turn on. All right, Mishka, here we go. I'm going to dispel all of your your myths. Sidekick is required. Gemini Live is optional and so and it's optional and it's actually in beta.
It's so difficult.
So, level up requires uh play game sidekick. And so, this is your game and this like overlay comes in and it gives you achievements, stats, rewards. This is not AI for this base feature. It is Gemini live is optional and remains in early testing with a few studios. Developers can't control which functionality shows up in this overlay

but you are able to provide content that shows directly in sidekick. So you can put in your videos, events, your offers, play points which is their loyalty point system. And then on data we had talked about like we were you know kind of worried what happens to the data. They said that they do capture it, but it's for product improvement and health monitoring and it apparently it doesn't go to other purposes. So, taking a step back on the roll out. So, like I said, June 30th as of yesterday. So, this is now live in Europe, UK, US. September 30th, it's those markets plus Australia. December 31st is Japan and Korea. September 30th, 2027's the rest of the world. There's a lot involved, so they just need time to roll it out. All right. So, that's the level up program and they've got a website that gives you like all of the details hitting what that is. But if you can do it, you get a fivepoint discount on new and existing installs, taking it down to

15% for new and then 20% for other.
The the way I see it, like to to be perfectly clear, is I love how Google Play is proactively trying to improve this. They've always been very proactive in launching all kinds of services trying to improve discoverability and monetization and retention. So kudos for them for pushing all these updates. Like that's on a high level. Again, I'm I'm a bit curious about Gemini optimized sidekick. Feels like somebody will be cross-promoting in my game. That's the only thing that I'm trying to figure out.
They said no to that. So remember he came back and said
they don't want to surface other games in the sidekick overlay. That is not the intent of what that feature is.
So it's more like building your community. Like you can put in your YouTube videos and so forth. So you can cross.
Yeah. So this is this is the part where I actually believe Google on this. Like I would not believe Apple on this

but but I actually believe that that cuz Google has such a platform and all these elements that for them it's great that you're building communities. you're building your YouTube channels and engaging with it. So I remember when they first introduced this at GDC and there was quite skeptical take from the largest publishers
where they were like we're going to pass on this. We're you know but let's see how this evolves. But the first impression kind of getting after getting the more details feels very positive. I'm gonna reread the questions and the answers provided by Google Play again, the instructor of fun and make my opinion from that. But yeah,
no, I think you should. And I, like I said, I spent a few hours on this
trying to just really cuz, you know, there's a lot. It's complicated, but
I do think there's great intent in there. I think I want to get my hands on it.
None of us have demoed some of these new level up features. Exactly. I know that

from a tech perspective. I'm not like a tech ninja and I don't know what Vulcan is, but you know, a lot of what they're saying is their intent is to make a better experience for players, which I'm always for that. So, they're taking feedback. So, let's see what happens. I don't know. Let's get more questions. They're responsive.
Wait, I got one more thing.
Yeah, do it.
2008. What is 2008?
A year.
Yes, that is when Android came out. What the have they been doing for 20 years? Like what the has Apple and Google been doing for 20 years to help games? Likeing nothing, right? And so now they get sued and now they come after us and now, you know, we come after them and now they'reing making changes now. Like
they're up to something, you know? Like
that's harsh. They like have
2008, dude. We have not had Game Center is garbage. They they have no backend stuff for Google, right? For for gaming,

right? The store is is is is in in shambles for both, frankly. Right. And and I know he's trying to fix it. Like I talked to him like I I believe that he is actually but 20 years 20 years we've been delivering not only delivering our games and making money, but also making their platform far more compelling with games, right? And I just don't think we've got the level of support that we've deserved. And now that we're coming after their their margin, they are now making changes, right? So it takes lawsuits and it takes like warfare in the courts in order to get them to actually innovate on on the platform on the store, right? You know, I this is what irritates me. It irritates me.
Well, say I I don't know. I I think that take is is harsh, but there is there are elements of truth. I think with the lawsuits, they have been forced to evolve and innovate faster than they

have in the past, I think, would be the fair assessment.
Look, they've definitely made improvements and help the ecosystem. I'm not suggesting they haven't, but these type of changes where you're building communities, building, you know, a reward system, building like this ecosystem for games,
like this is not rocket science. Microsoft and Sony and Nintendo have been doing this for decades, right? This is a choice. They basically said, "Look, we're not doing any of that. Publishers are doing it all. We're collecting our 30%." And we're not doing anything for that 30% besides transacting and building the platform, which is worth something.
They've had loyalty points for years. I mean, I was at Riot and that was 2019 when they launched it. So, they've had loyalty points for a long time. The UTAB on Google Play is new, which is surfacing content. They algorithmically designed for you. I think that is a relatively new functionality coming out. So, yes, I I hear your point. I just think you're a little more extreme than

maybe it's like because these are incremental steps and nothing has been earthshattering there to change what happened with UA. I mean, like it's still UA driven.
Yeah. And I would just argue that the the value of Google in this s ecosystem is just not as high as it used to be, right? And so they don't deserve 30%. They deserve like 15 maybe, you know.
Well, I think that you're right that the store
No, objectively I No, you're absolutely correct is that the rate has been too high for the value, especially when the value of discovery in the app stores and both of the stores, Google Play Store, have has has gone down dramatically. Even in my zero,
it's not zero. It's not zero.
Zero zero.
No, it is not zero. I work on games today where it is not zero. I promise you. I see it today.
Not.
However, you know, one of the things that happened in my past was where people coming in from the stores were not as valuable as people coming in from

UA.
So, I I do know that that is the case and it has declined over time. I know that featuring isn't at all what it used to be back in the day, but it is still, especially for IP games, organic from a store happens. So, just letting you know from data that I see. All right, so let's go to another store. Let's go to something going on on Steam. So, there's a new friend slop game and it's kicking everyone's ass. It's called Mecca Chameleon. This is super [ __ ] cool. And Crest, I think when we talk about like game innovation, I absolutely love what they have done. So, let me just read off some stats here. Mecha Chameleon sold 10 million copies in 16 days on Steam. Built by twoerson team in two months with zero marketing spend. So, you can see it now if you're watching us on YouTube. So, it's a paint to hide multiplayer game. It launched on June 10th. It's $5.99.

The two developers built it. I think they're Japanese developers. The team spent no money on marketing, which breaks my heart in in as a marketer, but this is kind of what's happening. If you can build verality into your game and have it be multiplayer, they used Epic's online services, Epic's free backend, which they also used on their prior title. It peaked at 340,000 concurrent, placing it inside Steam's all-time top 100 alongside Counter Strike, PUBG, and Dota 2. It sits at number one on Steam's global sales chart and fifth in daily active users ahead of Apex Legends and Overwatch, driven entirely by streamer clips and word of mouth. I also hear Phil Phil in my head complaining about no deluxe skews uh because it's only a 599 you know purchase you know for this friend slap game. So this outselling AAA uh this core mechanic is inherently sharable. Uh it turns like every stream

into free distribution. This is the way of the like the future is if you really think about like why somebody wants to share this that is your marketing in today's world. Uh, I would suck at this game because my painting skills suck. But you run around a room and then you can like paint your your characters like a white kind of like humanoid character and you're basically playing hide and seek and if you can blend in the background you like people can't find you. So it makes these like amazingly creative videos. Thoughts? Thoughts? Gang? this this type of a game like I mean it's fun, it's creative, it's really the best of what Steam has to offer in the sense of innovation of gameplay and what small teams can do with with today's engines and everything, but it's also the sort of a how would I put it like this type of a game is what got these gaming VC funds selling the story of project financing cuz they were like listen if we would have project financed that game we would have made you know x

amount of money back and I kind of I'm kind of like pivoting this story towards some of these gaming VCs turning into project finance years. I know we talked about Griffin Gaming Fund. They had a $100 million fund. Another one who announced their project financing fund was V Games quite recently. And I just wanted to comment on that because it has to do something about these steam steam success stories is that there's sort of like celebration of VC's project financing, but there's maybe a misunderstanding that this project financing is essentially about the fund survival because they haven't been able to deploy. They haven't been able to show any kind of returns in what it was like in 2021 2022 a lot of the fund returns came. So they're going in for this sort of like a 12 to 24 month clock instead where they're financing these projects and and to me it just looks at like depth with better PR and it really works only if you've derisked the game

because the VCs can't offer you as you said Jen in this case there was no marketing but often times I would assume that indie publishers would like to have some kind of a support with publishing community management that those kind of auxiliary stuff creating the videos for for the storefront etc. VCs don't have that and essentially you have to have d-risk games like would they have funded this? Probably maybe. But it's an interesting case that now with the growth of these type of games, these type of super creative games that come out of nowhere almost with zero marketing out sell much more expensive titles that there will be more and more not only indie publishers but also project financing available. So, it's interesting to see if this is going to get overfunded or if it's going to get properly funded and we're just going to have so many new cool games coming on Steam.
H Chris, I don't know. I don't know about that.
Project financing. No.
Yeah.
I mean, you have you have 10 thou what 10,000 20,000 games on Steam every year?

20,000 games last year on Steam. I mean, New Zoo finally did the analysis which I suggested is that only 6% of the business is actually new IP in any given year on console. And it's a little bit better on PC, like 12%. But it's so small that like the TAM for this type of game, a new IP like this is so tiny. Like you're just it's a hope and a prayer, right? Because existing IP, you know, like GTA is going to be out. you think that 6% is going up or down this year, you know, like, you know, and so it's like it's impossible, right, to get the exposure you need on these small games and super indies, sure, they will work, but AAA, the $40 to $50 title [ __ ] that they that they were spewing out there, all that stuff is nonsense. I I'll I'll cover this next week because it's very annoying. By the way, there is like this new news right now which I actually I'm a little bit hesitant to talk about, but
Oh, well, you have to now say
now. So, the news is that Christopher

Hartman, right, who was the basically the leader of Amazon games for seven years is now a GM. Where? Where would you guess he would?
Netflix.
Ubisoft.
Of course, Ubisoft, right?
Netflix. love when people fail up. Let's go. Let's go. Now, having said that,
this guy is a real gamer. Like, he knows what he'sing doing, right? Like I at least he's not some Nepo baby, you know? Not some [ __ ] guy who doesn't know [ __ ] about video games. Like, this guy actually could execute against the franchises which he's in charge of because he's not joining the Nepo Club with the three core franchises. He's actually the GM of the the rest of the stuff like Division, whatever. So, I'm actually not as negative on this. This these are the type of people that you need to hire. You don't hire
some child that doesn't know his ass from his elbow to run the three biggest franchises that you got.
Yeah. You hire someone with actual

skills and experience of managing creative teams, you know, and so, you know, I don't know Kristoff all that well. Oh, so it's Kristoff, not Christopher. Kristoff, but but I haven't heard really great things honestly at Amazon. But I don't know. I kind of actually this is a good move for the for the rest of you. going to get a positive thumbs up.
Before we end this episode, I really want to hear Jen's take on uh Das and Brawl Stars cuz you started the show with that this is not a successful thing or something like that. And I was like, I've been waiting. Give me like a 2 minute synups. What happened?
So, here's what happened. And I was so excited when I saw this. It was a Brawl Stars Adidas Adidas collaboration. and until I saw the media pictures and and the sombo looks fantastic and and adorable, but let's show the kids. So, the the pictures that they're showing are of these kids that look like they're eight years old. And
that's Brawl Star's audience.
And so, here is a lesson in marketing, and everyone has to pay attention to

this. It's called aspiration. You do not ever show pictures of your existing audience in any of your marketing material. This is something that is like very like known in the toy industry where I come from is you always show older kids, kids that are like 5 years older than your actual target audience. And so this is even deaspirational for the 12year-olds that are playing this game. So this is why all of the Nerf blaster packaging, if you've ever played with a Nerf blaster, basically shows teens that are old enough to drink on the packaging. So flip a couple of images. is I just I pulled like a like a Nerf package that you know like so here in the bottom you see like
it looks 15
like whenever I did any of my package shoots they were like 21 years old and we we put them on
like Hollywood Hollywood 15.
Yeah. Like Hollywood because it's called aspiration. You want that 8-year-old or the 12year-old to aspire to be the

person on the package. And so what this does is it kills the brand because you look at this if you're eight, you're like, "Oh god, it's for kids like younger than me. I'm not going to play it. It's for babies anymore. It's no longer cool." And so to my Supercell friends, like, "Please call some kid marketers next time before you do the art for these collaborations and making product for kids that are that young." You might have just damaged the brand with your audience. like please be careful and give me a call next time or any kid marketer because this can be highly highly detrimental and just kill your grizz and your cool factor like right away. So that was my
danger danger story even though those sambos looked really cool
and it's also dangerous for the brand to be for kids because they're monetizing kids through inapp purchases and and you know there's going to be copper requirements all that kind of stuff. They don't want to be positioned as a kids developer. But it seems like a quite big of the part of the audience is

very very young for both Brawl Stars and Clash Royale when we see them, you know, moving with the creators or the influencers.
Yeah, absolutely. In fact, I'm going to do a podcast next in August with two game lawyers, game industry lawyers, and we're going to go through some of these like legal requirements, not only kids marketing, but like trademark and some other stuff, like a games law 101 podcast just to get, you know, help folks kind of understand some of the basics around that.
So, all right, that's a wrap. Um, is that a wrap? Oh, we didn't get to like talk about unions a little bit more. No. Jesus.
We'll cut that out. We'll cut that out.
No, we don't.
So, what was the game? At least tell people what the game is because I don't think I announced it.
Castle Crushers. I will talk about it in the next episodes. It's not going anywhere. Download Castle Crushers and we'll talk about it a little bit later.
Okay. Well, if you want to hear my horror post, go to LinkedIn and and Crest being my Care Bear. By the way,

Jen, if my kids were here and heard you say the word Riz, they would have just rolled their eyes and threw up their mouths a little bit. So, just saying
on that note, I know everybody like I I tried not to say the the kick word, but you know, the the old lady throwing in a Oh my god. Are you guys watching uh Love Island?
No. Come on.
Oh, come on. I know. I needed Laura here for that. Like, I am learning so much of the kid lingo. Dead ass, everybody. Dead ass. is all I have to say. All right, everybody. We will see you next week.
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