TWIG #393: GTA 6's Impossible Attach Rate, Playtika's Earn-Out Disaster, and Unity 7's Big Swing

Hello everyone and welcome to deconstructor fund. This week in game 393 I'm Jen Dano. I play the marketing and publishing role on the podcast. Today we have
Eric Chris strategy investing Phil Black monetization are third chair third chair third chair
any chair Laura Toranto still covering still a lot of uh puzzle games. All right puzzle queen is back. Here's what we have on the episode today. Grand Theft Auto 6 pre-order and attach rate predictions. A lot of data has been sent out. So, let's go through that. Unity announces Unity 7 and tries to get ahead of Unreal Engine 6. Rumors. It's total rumor mill. We're going to allow us to talk about this juicy nugget. Tencent could acquire Playika own Super Play for up to 1.5 billion. Rounding up on the World Cup, which also allows us to talk about Netflix, so why not? What is going on

with Township and Top Tycoon? Bill's going to take us into that one. And in a marketing moment I'm absolutely obsessed with. I mean, obsessed. I mean, okay, fine. Fortnite does a co-arketing initiative with the movie Obsession, and it's it's really cute and well done. So, we'll we might get to that later. in in banter news. Phil, I know you tagged me on a LinkedIn post kind of on Marvel. I am just super thrilled with all of the Marvel movie trailer madness coming out this week. It was Avengers. It was Spider-Man. Could anyone be more excited than me about those two movies? Anybody?
I'm not feeling the Avengers thing at all. [laughter] Just just
I'm waiting for that Avatar movie.
I can't First of all, I can't believe you just said that, Laura. I can't believe you just said that. Avatar,
the Last Airbender series. There's a new Paramount Plus. They're covering a in his like 20s at the Blue People.
All right. [laughter]
Forgiven. Am I forgiven?
On that.
Yes, you're you're forgiven.
What more do you want, Eric? You've got

Robert Downey Jr. returning in a Dr. Doom roll. You've got the X-Men. What What more is it going to take?
I don't know, man. I'm a little skeptical.
Captain America is back. Like, are Chris?
He might be evil. He looks evil.
We'll see. I'll reserve judgment.
Okay. Spider-Man at least that looks
Spider-Man looks great.
Yeah. And if you are a Marvel game lency right now, you are thrilled for the next 12 months about all of the content that's coming out. All right. So, let's do a couple of shills. Misa did a deep dive. So, this podcast was kind of interesting. He wants to do more AI in games podcast, like actual people using actual AI. And so this one was no games and how they use AI to keep Sunrise Village alive. And then on the roundts, especially Laura since we have you here.
Our second round table is Seattle. It's two weeks away on August 6th. It's hosted by Amazon AWS. Sponsors are Appch charge and Uptick. Thanks to those guys.

There's still spots left. You can apply to join via links on deconstructor.com. go on our Slack channel if you're there or in the free to join newsletter that you can also get to through the website. Laura, we're going to do a Twig Live. I signed you up. Hopefully you even saw that I I did that.
I thought it was a joke. No, you you, me, Chris, Josh Chanley, and then an Amazon AWS AI ninja is going to be on our little panel. So, what do you think? Are you going to be ready? I'm gonna make you have to do like topics on the fly.
Fine.
It'll be great. I'm gonna bring the spice.
All right. You are not the one
when I think of spies. Although, [clears throat] you know what's been fun is in our Slack channel. Spicy Canadian Adam Teler. I
Oh my lord,
dude. He's off He's off the deep end.
He's like a ghost pepper right now.
I know. We got to get him on the podcast. This version of Adam Teler is it's like it's so nice. Oh, it's so fun.

Okay. So, any corrections? Oh,
no. We were we were perfect. No corrections. We just have one update because we're not going to talk about Xbox this week, but a few weeks ago, or maybe it was last week, I don't know. I was wondering what happened to all all of Chararma's tech bros, like useless people that she hired to run Xbox. And we got an answer. We got an answer. Jared Palmer, hired two months ago to solve the most complex problems at Xbox, bailed after two months. He's gone and he moved to AI company recognition, right? So, he must have just got a better offer as tech bros do, you know? What a [ __ ] total merc, dude. And what a bad look for Miss Chararma, you know? Anyway, he's gone. Maybe they'll actually hire a gaming person. Shocker, right? [laughter] to manage the uh gaming company. Um, so we'll see.
Story. It's the Japanese Zen [music]

Buddhist term for sudden enlightenment. That flash where everything clicks. We're told that Heroic Labs team had theirs when they realized that most studios run live ops like a horoscope. Vague, kind of generic, same advice for everyone. So, they built Sattorii. Realtime [music] experimentation, player level personalization, events that actually respond to player behavior, save [music] to your old live op and kichiwa to Sattorii from heroid labs. Eiffel Tower, iconic, Tower of London, historic. The two towers simply epic, but none of them tell you anything about mobile app intelligence, downloads, revenue, active users, and my personal favorite, weekly cohorted retention. Get the real story, get the real data, get Sensor Tower today. Okay, let's get into Grand Theft Auto. So, this story is going to cover Nuzu

and Ronin Patrick, who works at Nuzu, did a Substack, and it's also going to ring in some Convoy. So 89% of GTA 6 pre-orders went to the $100 skew, not the $80 standard edition. Phil, I think last time we talked about this, you weren't on the podcast. So I'm so excited to get your deluxe take here. I know. I'm sure
$120.
I know. I think they went too low, right? Like they went too low. All right, so here's some of the data. Nuzu says 90% of first week pre-orders US and top five European markets went to the $100 skew. Only 10 about 10 or 11% went to the standard skew. That skew pushes the average selling price from New Zoo's assumed 88 towards 100. The higher ASP average sales price means that GTA 6 needs about 12% fewer units to hit the same revenue, making record projections more plausible. So, I I think what was,

you know, really good about the overall version of this is that that $28 gap was the strategy, especially for pre-orders. I think we all know that early days you get the nerds who are going to spend more. I think that, you know, Phil, to your point, they should have gone higher, but you know, it's what they did. So now this average selling price becomes the variable in all these projections. I think people may not have gotten them right because they didn't think that so many people so early on would skew towards the higher price. So Chris, thoughts on this mix of how this is shaking out between the 80 and $100 SKUs? Yeah, I mean look, first my first thought was the uh inevitable Phil response is that they left so muching money on the table by pricing this too low,
right?
And clearly there is no elasticity of demand for these type of games and game I think games in general on console which is more is arguable but whatever. But on further reflection, they probably

did a reasonable job on pricing because week one pre-orders are not representative of the remainder of the pre-orders. The percentage of Ultimate will likely come down over time. And to get to kind of the targets that Ronin has out there for what their sellrough is going to be, they literally have to almost hit every entire active install base with this game in order to hit these targets. So, I mean, perhaps maybe they the price makes sense, but I'm kind of with Phil and we'll listen to Phil in a second, but I they should have priced it higher or have a third skew that's even higher, right? Which would then
really see what what the elasticity of demand is for this.
But this is another further indication of this is a winner take all. And I wish Anuzu had published Ronan's initial piece, but they seem to be focusing more on the positive stories out there instead of any type of negative story is that this is exactly why 94% of the revenue on PC and console goes to AAA games and existing IP franchises, yearly

releases, etc. And why this market is so [ __ ] hard, right, is that this type of game just takes all the demand and pulls it in one direction. You know, it's like it's crazy and that's why Ronin has been doing a really good job of actually analyzing the data as opposed to this pontificating [ __ ] out there, you know, market sizing, all this other [ __ ] that's out there. But yeah, 94% of the revenue of this market is dedicated to existing IPs and recurring franchises. And this is another kind of showing that kind of what's happening in this market.
All right, let me do a little more math so that Phil can yell at me because when I do math, it scares him. using Newsu and Convoys projections. And so we're looking at a a chart on the screen if you're watching us, but let me kind of walk you through it verbally. Newsu publish number is launch week. So about 4.5 billion in game sales, roughly 46 million copies. So if you push it out 60

days, which is basically I'm trying to get like the full year kind of, you know, or launch year. pushing that out 60 days is my math. It lands near 7.5 billion and 77 million copies. So, Comboy says 7.6 billion, but that it was everything. GTA Plus in-game spending, you know, game sales. So, if you take a look at game sales only kind of like pull that apart. It's like 6.8 billion from 85 million copies assumed at the 80 bucks. So, they are close on dollars but not necessarily on the units. So, looking at the attach rate, Crest, this is your favorite. This is what we were trying to ask Adam about a couple weeks ago. Convoys 85 million copies means that 63% of every PS5 and Xbox X owner buys GTA 6 in 60 days. No game has ever done that, right? A 63% attach rate.
GTA 5.
No, hold on. Mario Kart.
Mario Kart, right?
Well,

it comes in the bundle. Matter of fact, matter of fact, objection. Objection. Just need to
And Zelda. And Zelda. All right.
Zelda. Zelda was over 100% at launch if you remember. That was crazy.
Yeah, it's like sold in the box.
Well, every time you look at Switch sell through or sell in, it' just be like, "Oh, Mario Kart, Mario Kart, Mario Kart." Cuz the the console bundle, which I always thought was hilarious.
Okay. All right. F. Let me just finish. Uh GTA V's launch day attach was 8%. Nothing on record anywhere is near 60% plus in two months except for what you guys just said because it was bundled. Newu 77 million is comes at a 57% attach rate. So let's talk about this story. Chris, please take this.
Fine. Now I've done this analysis before years ago when I was looking at GTA 5. And these attach rates are ridiculous. Like this is not going to happen. I I'll just be clear. There's no [ __ ] way that this happens. Right? When GTA V came out on PS3 and Xbox 360, this was North America only, they got to 20%

attach rate. Wow.
At a reasonable similar time in term of install base. And then the first few years of PS4 and Xbox One when that came out, which the attach rate should be higher because they were, you know, the initial sales of the Xbox One and PS4 was 30%. and and ultimately they got to a 50% attach rate over time, but it took a long long time, right? It would require like every single active install-based player to buy this game in order to hit a 60% attach rate and that's just just not the way it works un unfortunately. Right.
Yeah.
So, I think it's more likely they get to like the 40 million type range in the first 60 days. Not. I think they're almost doubling what is even possible. Maybe 50 at tops. Like this was kind of what my expectation was. I'm a little bit worried that like I think people are getting a little bit ahead of themselves on this. And this reminds me a lot of the CG project like runup for Cyberpunk

in which expectations were set at such an insane level. I mean, I think it was like 40 to 50 million at the time and they hit like 15 million or 20 million and not to mention the fact that their game sucked balls on current gen. And so, at the end of the day though, we're not going to have the technical issues that that Cyberpunk have, but we will have an issue with how many actually games they could possibly sell given the install base. I do think expectations are getting ahead of themselves and maybe the actual levels are going to actually hurt or disappoint Wall Street at this moment. This is the time in which if I were take two, I would start managing expectations and coming out with their own expectations.
The UGC angle doesn't launch at launch, right?
No, it might not even be I don't think it will be in the first 60 days. So, that was dumb on convoy's part. They shouldn't they shouldn't include stuff that they don't have any visibility in.
And we have to split out any GTA 5 online, right? Hopefully, that wasn't a

full franchise. It was just GTA 6. So, Phil, how was How'd we do?
Many many such takes. Actually, I do agree with Eric and remember we have Sony investor presentations which have proudly reported attach on some of their biggest franchises. So like top of the range, Horizon Zero Dawn, Spider-Man, we're looking at like 15 to 20% attach. So that is you're telling me we're going to triple that and these are first party games. I mean doubling that is a magnificent achievement and that's certainly within I think the purview of a title like this but still I mean this is not this is not serious in my in my mind this is wishful thinking but I would go back to like the ultimate edition question there's been a lot of analysis about how games have been declining as we factor in inflation when we look at the real price of a product and okay when's the reset when's the reset and we have had the reset right at least on your base skew price we've gone from 50 up to 60 up to 70. But the

ultimate edition is also how we've changed average selling price over time, right? It's the soft way to kind of increase price and to basically make sure that you do proper price discrimination by segmenting your customers. There are so many people who will spend a,000 plus hours in these games. And you got to remember that if you amize even $200 over a,000 hours of gameplay, it costs almost nothing per hour. When Kotaku did a piece interviewing Genchin players, this is the exact same thing they said is like you have to amortize anything you put into it over hours spent. This is what Blake used to say. If you remember that, Eric, on his earnings call, the the CEO of EA. And so I'm just confused on why they didn't do anything there. I'm, you know, get $120 skew on the table. I'm confused on why there's no tie-ins to GTA Live. Like this is their mover and their shaker. Like this was something DICE did really well is like you'd get something now if you pre-order into GTA Live. The last thing I'll kind of I'll I'll I'll poke take two for like not taking advantage of is not doing more

early access stuff. Like this is the one conversation we always had at EA, but this is essentially a zero marginal cost feature, right? It's not even content that you need to release. It's literally just opening the gate. And so like how far can you push this? Can you do 14 days? Can you do 30 days? Can you start to call it a a beta? And there was one group of people who pushed back, which is brand marketers, cuz they they want the oomph. They want the punch. They want the they want the movie theater blockbuster premiere,
right? And Phil, I think like the history of this franchise would kind of lead you to the realization that they they never would do that, right? They would never give early access because the whole point is to play the story, you know, and and make it like a blockbuster movie. This is like kind of their mantra on it.
That's fine. They can defend themselves that way.
And then the online side of it, I think actually you're probably right. like the fact that they don't they are not giving any visibility onto the online side is probably limits the amount of promotion they can do around it. If they had more visibility or were providing more visibility, maybe they could do like the

super edition $120 skew which with online components, but I just don't think that that their plans has clearly not been to just basically focus on the single player at launch, which limits their flexibility. Right? That would lead me into my second big point, which is this is a good analysis, but I don't think this is seeing the entire chess board, which is UGC. Like this to me is the UGC darkhorse in this race. It already has a successful UGC service. Remember we were talking about the private servers that 5M offers. It was a modding platform that was purchased by Rockstar in 2023. They opened up a UGC marketplace this year. And so like you can see them coalescing the pieces around making a play for this as a UGC platform. And what better way to get a UGC platform launched than like let's start with 40% attached or 30% attach. This to me is such a huge storyline that I don't think people are talking about. Like remember when Halo 3 came out? It was our movie theater moment I like to

say in HD gaming. Like everyone was covering it. It hit the mainstream press and this has that same sort of reach and so we're interested in the spectacle but that to me is not the game anymore. But my understanding is that part of the reason the game has been delayed so much just because they redid the tech stack for online, right? So they were going to leverage GTA 5 tech. Instead, they actually created their own new backend tech in order to take some of these elements and make them a lot bigger. And some some of the Wall Street guys and I think I've said this before are absolutely out of their goddamn minds in terms of expectations on online stuff like you know like three to5 billion dollars a year or something crazy [laughter] you know like or even more right so there are a lot of people out there that the whispering numbers are insane but I do agree that I don't think it's going to be that extreme but I do think there's that is where the big upside is going forward and that'll probably happen sometime next year I would say February March we'll Let's get to the next story which is Unity. So Unity just had one of their

events in Seoul. It's called Unityite and they revealed a road map for Unity 7. So Unity 7 will enter early beta testing in December with the full release scheduled for Q1 2027. So this is ahead of Unreal Engine 6 if we are keeping score. So a couple things I just wanted to cover just what is going into Unity 7. It's still early. So this is again like a road map not specific but from a development standpoint I think what was really interesting is you of course they can say you build faster and let's artists and engineers work together from their tools. Unity 6 projects can move up with no rebuild. So you don't have to start all over from scratch. It's kind of like you're just continuing on. So AI obviously this was a big topic uh with Unreal Engine and showed a lot of great interaction and MCP access. So here with Unity, they didn't show anything, but they do say that the engine will have a freeto use MCP integration and the confirmed

capability so far is limited. Essentially, it's agents plugging in to assemble and validate builds. So a lot more remains to be seen about how that actually kind of comes together. And then the monetization angle. So, Unity's ad engine vector plus built-in direct to consumer sales put Unity inside how games earn feeding purchase data back into player targeting. So, this includes what's which I thought was pretty interesting. No code web shops let studios sell players directly without building storefronts. Unified cataloges pull the studios products into one place across channels. purchase data from those direct to consumer sales now feeds back into vector sharpening its player targeting. I think we talked about that along for a long time. Like that's really the benefit of having your engine and your marketing and your monetization tied together is all the data helps itself. So from my take and what I could see coming out about this, I think there's real benefits in how they're

positioning Unity 7 now that it's not requiring this rebuild going into the new engine. So I think it's going to be an extension out of reinvention. I think a lot of folks are going to appreciate that and be able to move forward to the next engine more quickly. The DTOC monetization point with the no code web shop with integration with stripe and kod I think this is really a big deal. Unity is essentially kind of doing what the exas and app charges and stashes of the world are trying to do. So with its ties to Vector, it's going to be really really appealing to a smaller company who's like, "Hey, I just I want a one-stop shop for all of this. I don't want to go and sign up another vendor to kind of make this all happen." So I don't think this is a risk necessarily for the bigger companies who can, you know, deal with all of the integration and really try to noodle everything. But I see this as something that might be going after more of Google Play and Apple's payment charges versus

necessarily going after the DTOC companies. So, you know, guys, do you see anything good or bad in here knowing that the road map is just an announcement, things are still coming or what do you think about my DTOC take?
I don't understand this business [laughter] to be honest with you. I don't understand why anyone would be excited by Unity. We've already covered the fact that engines don't make money. We're looking at the market cap of Unity right now. It's basically is in mediocre territory. We look at what the company is from just a revenue perspective between what they call create, which is essentially ads or excuse me, their engine versus grow, which is essentially their ads business. 66% of Unity's revenue is from the ad side. So, it's essentially another ad tech company. You know, how much is vector driving that growth has been a huge story line. It's hard because, you know, remember they had to offshore iron source. So that's fs up a lot of their numbers which make it hard to tell what's going on. But it looks like Vector is going okay. It's scaling a little bit but I'm still not seeing it I guess in topline revenue. I

expect even it's an increasing share. I expect to see in topline for grow. And at the end of the day I'm just like who who gives a [ __ ] about anything they do? They just seem so unexciting. It just seems like they're a vessel now for corporate shareholders trying to figure out what how they can be relevant anymore. And I I wish they would just unload create and I wish a consortium of companies would just buy it and we could just make it something that is open source for the game industry. It's just something that so many mobile games go through. I remember you know when we had the runtime controversy was what 75% of mobile games are on Unity and an increasing amount 80% and an increasing amount of of PC games like it's not making money for them. It doesn't make maybe it shows better as a public good. Not not the argument I was the topic I was expecting but sure cres [laughter] let me let me just is you cannot have a whole discussion on unity without mentioning apploven right and so apploven is the 800 pound gorilla that's [ __ ] annihilating everybody in this market and so you can carve out a niche

but ultimately the problem with unity is it po it can't possibly scale in a world where apploving and Google and Facebook exist right but primarily app, right? So all this [ __ ] advantage with Vector and and the the engine like they've been talking about this since John Ricatello was CEO and it's never materialized. So maybe with Vector they're in a better position to do that and I get so many calls. I'm so glad I'm not doing the hedge fund stuff anymore, but I still get calls about, oh why not like why should we look at Unity? Yeah, look at Unity. It's a speculative bet, but the fact of the matter is they can't compete against AppLin. They can't scale against Apple and and every big company that I talk to about user acquisition says the same thing. You can't scale spend on Unity. And so therefore, when the market is dominated by a few players that are spending hundreds and hundreds of millions of dollars on UA and you can't

scale on Unity, Unity is okay because that's where the money is, right? And so if they want to grow in a significant way and try to compete against apploving, they do not have the platform for that. And I've not seen any evidence that they are actually building a platform for that. Right? That's it. I mean that that's the problem. And I'll say this one last time. No, no, it's not one last time. Do not buy these stocks. Buy the BTI. These are hedge fund hotels. And I'll tell you what, this thing could go up like 30 or 40% in the next 6 months on some [ __ ] [ __ ] right? But it's going to come right back the down because the underlying fundamentals of this company suck balls. Okay, like fundamentally. All right, so there done moving on. Speaking of sucking balls, [laughter]
Play Tikka.
All right, so let me do the setup for this. So this is rumor news. Play Tikica is in talks to sell Super Play to Tencent because the studio's success triggered an earnout. Play Tikica can no

longer afford. Oh, I cr I can't wait for your take on this. All right. So, so here's the the facts. Tencent well facts reported. Tencent is negotiating to buy Super Play for up to 1.5 billion. Super Plays $573 million in 2025 revenue beat its target by 67% and Tencent would not inherit the earnout. How on earth does that work? Why it matters? Play would hand its casual games growth engine now 74% of its business to Tencent. Play's casual. Well, I mean Play has always been casual, right? So, the main thing here is
No, no, no, no, no, no, dude. They've been all social casino.
Oh, I see what you're saying. Okay. I I think the main point and then Laura is gonna talk a lot about this is Disney Solitaire. Like I am so impressed with what they did with Disney Solitaire. Roughly $300 million a year. It's like licensed, you know, like just gem that they took on after all of their other

success. So, you know, Laura, why don't you take us through? I know you went did a deep dive with charts and graphs and numbers. Do it. I feel like you dangled a carrot and I was a little rabbit that I was like, "Oh yes, this is so interesting." So yeah, I went I had to understand the story first. So the way I summarized this is Platika acquired so well it became a little too expensive. So going back a little bit in November 2024, Platika bought Super Play. They paid just under 700 million in cash up front. And then this is where this is kind of where the story takes shape. They offered them up to 1.2 billion in earnouts. So, Super Play hit revenue targets over X time frame. They'll play up to 1.2 billion. The revenue target for 2025 was 342 million for Super Play. Now, Eric, keep me honest. This happens when there are disagreements in price when they're going through initial acquisition. Is that correct?
I mean, this is motivates them to keep going, right? They don't want to give them all the cash up front, otherwise they're not motivated.
Okay. So, the motivation worked quite

well. They exceeded these targets by 67% mostly due to Disney solitire contributing 573 million in 2025. Basically bonus check now needs to be paid out. So place paid a 461 million earnout installment just after Q1 closed. And now the total that Play is owing these co-founders is 829 million. So they've paid the 461, they owe 8.29 29 and now they have this looming 368 million that they owe. This goes on place sheet and I read somewhere that they suspended their dividend which I assume is related to this. Yes. So now 10 cents. Now where where does this tension come in? I've read two different things on this. So if Tencent buys Super Play for up to 1.5 billion, they take over the studio and then I've heard both that they are required to pay the rest of the earnout to Super Plays co-founders. And then I've also seen one article that says they don't. And then what Platea walks away with is the sale

of the company and no longer having to pay this bonus. Big question for me is let's say this deal goes through. What happens to the founders post payout? Are they going to stay? I mean if Tense buys them, my expectation would be they want to keep the co-founders in place, but it's going to be hard when you have a really big check in your pocket. So, unfortunately, I never covered Disney solitire on Twig. So, I can't say whether I was right or wrong about the prospects and soft launch, but I had a quick look at like what is this game going to do in the rest of this calendar year? And first thing I went to is live ops cuz that's usually where you want to grow a game. You're going to be like throwing the book at every live op event you could possibly think of. Their calendar is already stacked. All I can think of is they're going to further optimize and continue to create new live events. We talked about this a little bit on puzzle monthly where the tune blast has seen this increase that it was due to the optimization and iteration of live events. I think they probably land about at three Disney solitire would probably land about 300 million for 2026.

Then what you're looking at okay so what you're seeing this chart is the revenue and you can see it's it's probably not what they expected [laughter] not what expected when they went through the launch. uh this zooms in a little bit cuz my first question was how is it performing today where is it going to land and I was trying to determine whether or not there was a slight decline just again trying to figure out where at the end of the calendar year 26 where where do I think it was going to be and I stand by that probably hovering around 300 million and then small chart so Tensa takes this I think you covered this but they're taking a pretty big share of the portfolio for playa they're taking Disney solitary dice dreams and domino dreams which sensor tower I just looked at this so this is put their estimated gross in that but percent super play of what contri what they contributed to play for 2025 was almost 30% and year to date it's gone up to 42.8% 8%. So it's a big part of their portfolio. This is excluding web shops.
This is why kind of this makes no sense

at all, right? Like this is the growth engine for Playa and Playa has been talking about this on every earnings call since they they bought this company. And again, this was based on an unannounced source with really no confirmation obviously from Tencent and Playa based on a kind of a questionable outlet too, right? not not like a mainstream outlet at all and they had some errors in reporting and then it was picked up by mobile gamer.biz after the fact. So I really don't have any edge here like I don't have any like people that I know at player or whatever or anything like but again they've been communicating the success of this asset since the acquisition just doesn't seem like it would make sense for them to sell. Having said that, it does look like they negotiated a bad deal with this company. Like the fact that they are paying out so much money and it's actually hurting their ability to refinance debt and it's also like they took out their dividend as you said. They have all this debt that's coming.

They have 2.5 billion in debt to be clear, right?
But what's happening is they are completely kind of ass backwards on this acquisition. So the more performance they get, the more Super Play actually benefits. The Superplay founders benefit from the transaction. And so the upside is all going to Super Play as opposed to going to the company. And so let's put it this way. Chris Petravic would have never [ __ ] negotiated this deal. Let me just let me [laughter] be clear right now. It is capped at 1.25 billion. So let's it's not unlimited upside and unlimited damage to the company's balance sheet but it's still a bad deal a bad negotiated deal because again it's based on revenue not based on on earnings right on EBIT right it seems so has cut price targets to $3 to by 50 I mean they were $ 1.5 billion market cap company and they basically are citing this earnout obligations basically absorbing much of the near-term free cash flow because of these earnouts is

what they said and it basically is a drag on capital returns. But I don't think they throw the baby out with the bathwater on this one, right? I don't think selling this actually makes sense because after the earnout is complete in 2027 or they hit that cap, then they'll have a huge like cash flow situation because they're not paying out these earnouts to these to super play. But the problem, this what makes it so complicated. They have a huge debt refinancing requirements. And this is what the article is kind of suggesting in the same time frame is they're going to give out the last two big earnout payments. And so there is a possibility that they get the cash infusion from the Super Play Act sale and then pay down their debt, right, and live to fight another day. I just think they'll probably find another way, right? But I really don't know. But all I got to know tell you is that play Tikica has got to get their [ __ ] together. Like negotiating a deal like this was not a smart move, right?

It just kind of continues to postpone any type of like rebound on this stock or you know this company as a whole. It's just a mess, you know, mess. Um, the other thing is that you can think about is that the more attention and they tried to sell themselves before and so maybe they're leaking this [ __ ] to get more attention on the stock and to get more and the stock's gone up a little bit recently and you know it creates more visibility out there that they that companies have been known to do that as well. Uh, but we'll see.
Okay, let's look at massive success of Super Play. I mean this is incredible table that's in front of me. So three big hits. So you've got Domino Dreams, number one in the subg genre. Domino's looks like it's going to be good for about 100 million a year. You have Dice Dreams, number three in coin looters, pretty much flat, probably maybe good for 150 per year. And then you have Disney Solitaire, which has scaled beyond my belief. Like I think it demands its own analysis of what went in solitaire. And I think again, I just want to put the shame light back on King

for not being able to make this work. I'm just shocked that no one else could really get in the the solitire craze was crazy and they seem to have unlocked something that is up 152% yearover-year year to date. Wow. So, you've got something that's scaling and all that. You don't even know what they have in the tank. You don't even know if they got other things. And so, you're looking at maybe half a billion in revenue per year. First of all, I don't understand how Playa could sign a deal where the earnouts could put you in a position where it feels painful rather than mutually beneficial. That is such an embarrassment. And there whoever whoever commissioned this deal should be fired. That's just not how trade should work.
That's the right that that is the right take. I I wanted I you said that much better than I did. It is ridiculous.
But here's the thing, Eric. And and I get what the Chinese see in this. I get what the Chinese are seeing as they see Gossip Harbor and all these other casual games. But why would a price like that make sense given 500 million in revenue? Like what is that multiple? That's that's embarrassing. There is so much growth potential here.

There's a great story. It's still young. I mean, wow. This feels bad for us. This feels like another check-in on our valuations in the last couple, you know, one to two years.
Can we reverse engineer like why on earth would they have done a deal like that? Like that's not typical. Correct. Chris,
I wish I had Petravic here to like tear this thing apart because he speaks from much more intelligence in terms of how these things are negotiated. Like I think what Philip said is like actually accurate. You're supposedly negotiating this deal so it's mutually beneficial. Like you don't want any situation that is actually hindering your ability to actually refinance your debt, which is what seems to have happened here or could hinder their ability to refinance their debt. I want to be clear on this too cuz Super Play did get back to me when I was talking [ __ ] about Playa. Dude, the Super Play guys are [ __ ] genius. Like if they negotiated this deal, [ __ ] more power to them or their bankers, dude. If it was a ream, I don't know who it was. I I didn't look,

but like [ __ ] brilliant. They're in good spot, right? But the Platika just this up, I think it seems. Anyway, uh I I I don't even know how you can interpret any other way that Platikica just did not negotiate this properly. Um so I don't know. We'll see. in sickness and in health, in soft launch and in live ops, through every meta shift and every platform policy change. That's the kind of loyalty vibes built between your game and your players. AI powered targeting, a real meta layer, rorowass optimization that actually compounds. That's what makes Vibes the fastest growing loyalty platform in mobile games. Till churn, do us a part. vibes vybs.co. [music]
Guessing where your users come from? That's so 2010. Absfly 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. Appsflyer because your data is your best co-op partner. If Apple owns your checkout, Apple owns your player, their receipt, their refund flow, their win back email, leaving you as a tenant in your own economy. App charge hands you the keys to [music] the castle you've built. A worldclass web store and a direct line to your highest spenders the [music] platforms have been quietly keeping from you for a decade. The 30% you save is the boring part. Owning the player's relationship is the actual unlock app charge provides. All right, let's keep going. We're going to just wrap up on World Cup. Oh, what a great couple of months, six weeks, I don't know, whatever it was. The final

game was okay, not great, but at the end it was like super exciting. In fact, you know, I got it right. I said Spain would win. And you know who else got it right? So from their prediction capabilities on Madden with American football to now World Cup football, EA should be petting in prediction markets because their accuracy is amazing. And this came from VG Chronicle. So even though it doesn't have the FIFA license anymore, EAC has correctly predicted the World Cup winner the last four World Cups. And this is the fifth World Cup they've gotten in a row where they run the simulations and they project the winner. But do you know who is struggling to predict winners? Crest, why don't you tell us?
Oh, sorry. What? [laughter]
Oh, that was like my setup for you.
Oh, Jesus Christ. You know, I had my wife watch the last episode because our new kitten like likes to come and like

sit on my lap as she just did. And she's like, "Oh my god, the other two don't even pay an attention to you when you're talking." I'm like, "Yes, it's like every day." I I I realize this. So, right here, I I give you the alleyoop. Well, that's a basketball reference. Okay. So, Chris, you know who is struggling to predict the football winners? It's also
Netflix.
[laughter]
Yeah. All right.
Yeah. Yeah. It's It's our We haven't talked Netflix in so long. So, here's
We have not. We have not.
Well, I mean, we did kind of [ __ ] on them when they did the FIFA announcement, but like let's
bring that full circle and now that it's all over and let's hear how they did.
Yeah. So, they put out their earnings release and they're getting destroyed right now. the stockwise, you know, they're not doing nearly as well as they would have hoped, but they they'd mentioned some [ __ ] around games, which they're just throwing out metrics and they're pulling the [ __ ] out of their ass. Like, it it is not it's

almost embarrassing.
Like, they basically said, this is their quote, FIFA and Hinge became our two most successful cloud game debuts. Really solid numbers that put in the top tier of game performance, which sounds [ __ ] amazing, right? Absolutely amazing. You have to complete that sentence because it doesn't say like against the market. It says
for us at Netflix.
Right. Right. He's another big positive sign since last October. So eight months ago when we really sort of scaled up this cloud initiative,
monthly active players for cloud games have increased 11 times and adoption is significantly ahead of that curve for what that we had for mobile games. So these [ __ ] vanity [ __ ] metrics 11x what? Right? I mean 11x of 10,000 11x of 100,000 like all that is [ __ ] right? So just stop like stop

embarrassing yourself by putting out these metrics or anybody who actually publishes it and believes this stuff which is like the majority of these morons that that do this stuff. It it just drives me insane. And then on the next one, they had a Netflix playground global launch in April, which I think is their kids mobile product. They have tripled its daily player count leading to 600% year-on-year increase in kids engagement.
Also, absolutely meaningless stats like just completeing horseshit. Okay, it doesn't mean anything, right? So they also Netflix also said they will continue to calibrate and refine its level investment in the video game market which he noted currently is very small relative to the company's overall content spend. Right? That's the key part. Like this is mice nuts for them. They don't give a [ __ ] right? And they're not investing in this. It's all fluff. This whole press announcement is fluff. We have no idea.

We have less of an idea of whether it's successful than we did before because this is complete [ __ ] right? So anyway, there's no real numbers. What we need to see is MAU. We need to see DAU. We need to see engagement. We need to see retention. Like those are the numbers that actually matter when it comes to these sorts of things for Netflix. Right now, I don't really have any info tell now because all the friends that I had with Netflix have all been fired, right? But my gut tells me that the engagement on these games suck balls, right? They probably spiked initially but they couldn't be maintained. So this is not good for Netflix. Actually, this is terrible for Netflix potentially, right? But we have no [ __ ] idea. But that's my gut, right? What I will say on the positive side that the content that they are creating makes sense for Netflix finally, right? The soccer game, even though it sucks, it's terrible, makes sense, right? The kids game, party games, that makes sense. The interactive story, Unhinged, I played it. It was

actually not that bad. It was actually interesting, engaging. This [ __ ] makes sense. Will it be successful? Who the [ __ ] knows? We have no idea, right? Because they're throwing out [ __ ] right? Like because Netflix doesn't even know how to [ __ ] make a press release, right? But it does make sense. The strategy makes sense to me, right? And and I hope they're successful because I think having different forms of interactive entertainment is good, right? I do recommend you guys try Unhinged with this bullshiting remote on your goddamn phone device, which is so frustrating, but it [ __ ] worked. It was not bad. It wasn't bad. So anyway, [clears throat]
we'll see. We'll see. Let's throw out some decenting press releases and actually get to the hardest [ __ ] you know?
Certainly going out with a whole lot of pressing a whole lot of nothing. I think my my mother and my Jewish grandmother used to say, "If you have nothing nice to say, don't say anything at all." That's how my mother talks. Every time I do my mom, I have to throw my New York accent on. Um I

It's like she's right out of the Bronx and she lives in Texas for 40 years. Yeah. Oh yeah, exactly. Miss Miss Mary o over there. Um, so I I've been in this role where, you know, leadership comes to you and you're like, "All right, what's our bullet point stat that we're going to say in the earnings report and you're scrambling around because you have nothing good to say?" And so you pull out some sort of 11x 3600% increase on a number, no one's ever going to ask you what that number is. I think in the actual report they did say they acknowledged it was a small base. So they at least acknowledged it was a small base. But Chris, I think the point I want to get back to is at least their strategy is starting to do the things that make sense for this platform. The party games, the kids games, it's all tied together. I think they just don't have enough to show for it yet. And I don't think it's ever going to be big enough to be meaningful enough for for the industry. I hope that they can still be a home for developers looking to get

a paycheck against those types of uh initiatives. And IP is going to be another landing zone. I think the unhinged thing. I was watching a little bit of the video. They have famous actors and actresses in that interactive adventure story thingy. And horror again is it keeps coming up as something that is pulling people in because it creates organic marketing content. So I think they're heading in the right direction at least for them. I just don't think it's going to be big enough for the industry to really care about.
Yeah. Yeah, I mean to be clear, the the stock's down 25% year-to date and basically 40% over the last year. Like things are not going well,
but that's from YouTube, right? Like that's the whole competition against YouTube. I mean Netflix has a bigger problem. They're going they're trying to do podcasts. They're trying to do short form content. Like it's not games is to your point like it's the mic of the mice nuts. Like it's not even you know it's almost a distraction for them. I think the bigger thing they're trying to do is how do I counteract Tik Tok and short

form content and YouTube? I mean I I don't know in my household our Netflix watch time has gone down dramatically. Number one is I just I can't ever find anything. We just go my wife and I go to YouTube.
Amen. Yes.
We just go to YouTube and now you know we're watching we watch car restoration videos. We watch
aquariums being built, people rebuilding houses. this woman, this like girl Tia is rebuilding a house in North Dakota and has like a million subscribers. We're just like, how on earth does this happen? And you can't get a million people to watch one Netflix show. Anyway, that's a whole different talk show right now, but that's my that's my bigger Netflix argument is like games doesn't matter to them. All right, Phil, let's go to a different kind of tycoon. Top tycoon. a story we haven't covered a lot but I think again just emphasizes the really dilapitated confusing state of where mobile is and I think the two stories or games that highlight this is Township and right now we're looking at

township revenue can anyone describe for the audio listeners what township's revenue graph looks like what is the shape of that
up and to the right in a linear curve a linear line
up and to the right it is pulling you know an excess of 40 million potentially hitting 50 million if we include some web shop revenue on a monthly basis which is remarkable for plays. And then you have Top Tycoon which is operating on a vastly different scale and had a pretty great acceleration at the end of 2015 and has been doing okay in 2026. They've been picking up downloads recently at least. Top tycoon has had some increases in the last month although that seems to be mostly India. So they're pumping some numbers there and Township has continued to scale of course driving that growth. If you're not familiar with each of these games they are of the genre of first of all Farm Builder for our great friend great

friends at Township but if you haven't been following in 2023 they added match to Township. And so right now we're looking at videos of level 15,000
to level 15,85. team.
So, yeah. And you can you can take a guess about where they might be getting this content from. Uh they might have some other match three games they could potentially be pulling designs, potentially reskinning into this game, so they can immediately
Yep. they can immediately ramp up content. I I'm almost starting to believe that on the inside they basically have a centralized level pool at this time. They're basically just slapping on different IP, right? Remember, Familycapes has been in soft launch forever. Aquacapes, I believe, is the other one. They just have all these scapes games. And I think at some point, yeah, fishum at some point, I think a lot of the level design ends up just becoming the same for all the different companies. So, they've bolted on a match game inside of Township, which is a builder, which is absolutely [ __ ] insane. And Top Tycoon has not quite the extent that we

see in Township, but it's got some fake gameplay. It's got a meta that kind of fades away and ends up being more social casinoy and ends up using a lot of the hyper casual builder genre that we've seen. If you look at a lot of tycoon games, it has elements of that to basically get you into a social casino core loop. So, where are we going with all this? Well, I mean, again, this starts to speak to how user acquisition drives everything inside of mobile gaming. I cannot emphasize this enough. And so, for Township, the question is very simple. what is the LTV per hour in match three that we can expose our audience to versus the LTV that they would have in other parts of the product and the equation ends up working out that match is a I've called it the most impressive game economy of all time because it's the most sustainable game economy of all time. Remember, all of your crimes are washed away almost every single level where you play a new level and things end up resetting. And all you need to do, as we've talked a lot about

on Puzzle Monthly in here, is you're just trying to get people to play levels, hit fail screens, when they hit the fail screen, convert to extra moves. That is the model. Rinse, wash, and repeat. Of course, we've had things like Super Light Ball, which you need to adjust level design around, but the core economics have stayed the same. And it's just been remarkable to see it going like 20, 30 plus years. Like I don't think this is going to stop. This to me is a very calculated bet. And I'm just curious to see other games that will take this approach of just basically throwing in different core loops, things that have higher monetization. I mean, essentially what this makes Township though is just a front end for the higher monetizing mode. Just as for Top Tycoon, the front end is really just something to decrease CPIs and to get you into the higher monetizing parts of what you might almost call a platform at this point, a user acquisition platform to just point things at. And that to me is really sad. I don't think this is healthy for mobile at all. I mean, we've talked about user acquisition and, you know, a bunch of people have covered how you do user acquisition, you know, in a post at

world. I mean, that's an outdated conversation at this point, but the end result we get out of all these incentives, I I just I can't in any level seeing this be healthy for us. This doesn't smell right. It doesn't feel right. Something's deeply broken in in mobile. Even if this is the winning strategy, which by the way, I would support, you know, I'd support any studio. I consult with them. This is the winning strategy. It just it doesn't feel healthy.
Yeah. I mean, Laura, you and I did a couple years ago, we covered Township. We did. I've just pulled it up. Yeah. Yeah. And basically, so I think of these games, I call them hybrids because they take the best of every single casual game and then they have compounding modes that create this meta progression system. So you run out of time, you run out of lives or energy or what turns in one mode, then you go to the other mode and you're progressing through there and and so it kind of like a black hole. It keeps you inside of that game as you spend and utilize against all of the different modes. In fact, I I I think I

I talk about all the time. I play Royal Match. Royal Match. Laura just introduced You know what? That stupid story mode where you play through like a little stupid story on a map that has the fog of war and you like break something to unc.
Yeah.
Yeah.
Yeah. Royal Match just introduced that as a new mini game, which it was interesting to me because it's also solo. It's not like one of their new kind of like PvP modes. So, you're starting to see again like all of the like the hybridization of these match games that are trying to keep you inside so that you can burn your energy in each one of these zones to keep you in longer. I think Phil, to your point, this is the winning model. You just take it, you reskin it with different themes. And then the other thing, so the game refinery folks, I'm doing another project with Midcore and I'm looking at playable ads. And one of the things that I noticed about playable ads, and I think we talk about this all the time in 4X is the casualization of Forex, these

mini games. Now, what happens is you go inside of the game, you start the game as the playable ad, and then it unfurls into the actual game. It's it's like it's super super crazy how that happens. Even in Royal Match and Royal Kingdom. So Laura, I don't know if you've seen this as well, they have brought in the playable ads as modes and unlocks inside of the basic gameplay so that you're not completely, you know, like where where is this playable ad? The save the king they have in both of them. They're now modes with buttons inside of both of these games. Anyway, that's the optin ones. Yeah. Like you can skip this level. It's the same one as the ad difference. So in [laughter] Royal Kingdom, yes. So they have that in Royal Kingdom. They now have it as a as a button mode on the side of the screen. When you complete five normal levels, you play and progress through the playable ads and then you get a reward. And so they have this progression track

using the playable ads as a mode. So it's a it's a evolution in how they're including shitty playable ads.
Well, it's one way to be true to the rules. You have to make sure the game that you're advertising is the game the players can play.
Exactly. And and like what's crazy is that Forex is like it's how you start the game.
So go download Kingshot or the Last War Survival uh
Games by the way, new new Forex game up this up the charts and it basically is a reskin. It looks like they're going more older I would call the Inno games Germany crusty 4X players in terms of art style, but that's exactly what they're doing. There's another one up the charts. I'm sure we'll cover it.
What is it called?
What's it called?
Uh I don't have it off the top of my head. I haven't for it, but yeah, it's [laughter]
it's uh it's it's climbing.
All right, Google it real quick while I do the last uh obsession thing really quick. So, if you didn't get a chance to see the video, it's like super super cute. So, what happened is that I you

familiar with Laura? This seems like a movie you would have seen cuz it's like a love. It's like a romcom except it's a rom romcom. So anyway, this blew up. It's another kind of [clears throat] YouTube like sensation. So this is a collaboration with Fortnite and the studio behind the movie Obsession. And so I saw this as a LinkedIn post from Chase Madrid, who's the lead marketing creative director on Fortnite. and he said something really cute which is like the marketing team came to him and they're like hey is there anything we can do around that movie because it's blowing up and wouldn't it be huge and the response is they just launched this feature called sprites which is a whole other topic Phil I think you could probably comment on better than me and so they were like yeah we can actually do something so the NBC Universal and focus features said yes and the last stop was Curry Barker who I guess is the creator of the movie and so they made this whole video that was like put this little sprite inside

of the movie trailer and it was super funny and so that video is kind of blowing up a little bit. So kudos on co-arketing trying to end on something again fun that I'm obsessed about.
Lord Rush is the game by the way.
I need to rush that.
Lord Rush save me a correction next week.
Right.
It is in the United States by the way.
Lord Rush. Lord Rush. Okay, that wraps it up for this week. Laura, thanks. Good to see you. to see you in a couple weeks at the constructor of fun roundtables in Seattle.
It'll be awesome. All right, everyone. See you next week.
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