TWIG #399: GTA VI Breaks Netflix, EU Targets Roblox and Zero Company's Studio Implodes

[music] Hello everyone and welcome to Deconstructor Fun this weekend games 399. I'm Jen Dano. I play the part marketing and publishing role in the podcast. Today we have
Eric Crest strategy and investing.
Not feeling it. Crest, we're going to get you in the mood. Come on.
Phil Black, monetization are good vibes.
Mishka Katkov, sacred clown.
All right, here's what we got on the episode today. Gamescom recap. Mishka Wen has got some thoughts. GTA 6 lights up the internet. It makes it on fire and then it rains down. Well, somebody's making it rain with 31.1 million views in 4 days on Netflix and 17 million on Rockstar's YouTube. Maybe making it rain is also PlayStation. I just tried to go buy a PlayStation 5 Pro. Can't find it anywhere. We'll talk about that. The EU designates Roblox a very large online search engine. What the hell is that?

Phil's going to tell us. Star Wars Zero company excites the critics and players and also the fans of corporate drama. I That was a story I didn't know I needed after the Subnautica drama. Brian Ward steps down as Savvy Games Group CEO. Tencent has AI and other news. And if we get there, what's new with NCOFT? It's been a while. Mishko wanted to chat about them. But first, next week's Twig episode is our special 400th. Thanks to Claude and the Claude and AI overlords, we're going to give you such great segments like swearing per hour by year. We have charts and graphs. Which do cast members interact the most? And by interact, that's definitely in quotes. Most covered topics over the eight years of the podcast. No wonder Crest is a grumpy old man coming in at twig number six. We're gonna just get into all of it with really fun charts and graphs. Like [laughter] AI has made this a joy. I I actually we put it into an MCP. Thank

you for doing that, Phil. And and so we've been uh if you have any questions, you want us to query it, let us know and we'll we'll pull it out for you. All right, let's get to Shills. What's going on, Mishka with the podcast? You have a lot of content.
Yeah, we have a lot of content, Jen. You have been posting contact. There's more coming in. You had a web tune. Now you have the legal law episode coming in today just shooter monthly drop. Then we have some bold beats if this was Zingga. So we have bold beats dropping. So we had Afan but who's the RM's co-founder talking about the 110 transaction his company has been involved in worth of $40 billion. That was a couple episodes ago. Last week John Bellamy and Alexis Bond joined to discuss their first 100 days as CEOs. Both joint CEOs at the same time still from Jagex. This week, Mattel's global head of digital and fellow Helen Marcus joined the podcast and talked about licensing deals and how they are actually made. Reference some

of the big IPs, dormant IPs, etc. And next week, all the Turks stand up because we have Akin Baba, co-founder of Triple Dot, founder of Arcadia Gaming Partners. Absolute banger episode. So, if you want the episodes right away through your newsletters, sign up to the newsletter. That's about 14,000 people already signed up. You will get them on Monday first before everybody else. Phil,
what's going on with Monthly? Can't wait.
Sure to Monthly. We're getting our schedule back together. Don't worry. Uh we'll be more consistent. This episode that will be out by the time you listen to Twig is talking about Gears of War. What the hell went wrong in this franchise and what the hell has gone right with Hell Divers and the War Bond model. lot of awesome conversation with the crew as always. I thought this was a really good one breaking down shooters that aren't just first-person shooters. It's not first-person shooter monthly, it is shooter monthly.
All right, I'm going to have to listen to your Gears of War criticism. It's one of my favorites, so looking forward to that. Okay, here's what we got going on.

Let's talk about Gamescom. Web stores, you've seen what good looks like, but have you experienced great? Appch charge is the direct to consumer platform that powers over half a billion dollars in transactions each year for top studios. They're not just another vendor. They're backed by Supercell and built by monetization veterans from Moonactive, Playa, and other industry giants who understand the difference between merely functional and the truly exceptional. [music] What sets them apart? deeply personalized web stores with custom design offers, industry-leading monetization features, seamless [music] in-game payment integration, and a robust SDK. While 70% [music] of top grossing games already have web stores, the ones scaling the [music] fastest are doing it with Appcharge. Ready to transform good into great? Learn more at [music] appcharge.com.

Stay ahead of the competition with Sensor Tower, the trusted source for mobile marketing intelligence. Whether you're tracking trends, benchmarking performance, or scouting the next big hit, [music] Sensor Tower delivers the data that drives strategy. Dominate the charts with Sensor Tower. Let's talk about Gamescom. Uh, last week we were only able to cover opening night live because we recorded on a Wednesday morning. So now we have all the data in and we have Mishka's firsthand reports. So first just a few stats on what happened about 3% up in attendance and it was right behind preandemic levels of 18 and 19. So it's not like some amazingly new number. It it's kind of going back to the old days. It was however sold out. I think if you listen to a lot of gaming press you'll you'll hear this note. It was you know primarily eastern developers. 72% of all exhibitors were foreign companies. The indies area had a rise of 16%. Opening

light live itself was up 8% to 78 million global viewers. So that is, you know, the Jeff Keley empire of summer gamefest opening night live and the game award show continues. If you want to get your game marketed and in front of fans, that's the way to do it. Next year's Game Con is actually going to expand to the full week for players. It starts on Wednesday. Now they're going to open it up to to Monday. The postgames come. I It was interesting to see that Sony has two states of play coming up. I guess they waited for everyone to get back and maybe now you're paying attention again, get past the news. And then two things that were really interesting. The Apple App Store folks were there talking about featuring. They did a talk that was kind of interesting. Mobile Gamer. Biz covered that. And then Google Play had a booth and like lots going on. And so I think you know the platforms are showing up saying hey we're part of the game industry too. The one other fact I think the biggest fact is there was 100% more

paddle events. Bisha talk to me about [laughter] that.
Yeah. So this is my takeaway from Gamescom. Again we've been I've been going to Gamescom for for several years now. I remember the one that Crest was on. We did even even a podcast in a hotel room. That was a fun one. Anyways, this time around we did three events. I'm happy that there weren't more cuz I was alone. Mr. Criyot was not there. Three different events. No repeat events. No whiskey tasting, no water tasting this time around. So, we organized together with Censor Tower. Their summit that was packed. People couldn't get in. So, host a panel. There's a picture of Chris Petridge just laughing on on the panel. Was a good one. People liked it apparently cuz I was unhinged. There was a paddle event which was a surprise success. We had to stop the sign up after 100 people already were in. We definitely did not have enough courts there. So, all the courts were taking. People really liked it. So, congrats to the winners. We're going to continue doing paddle events. Next big one is going to be at PGC weekend. So,

we're already took over one of London's bougiest paddle courses. So, see you there. Before that, Lima and Tel Aviv. And then supper club. We did it at the tallest building of the city, which doesn't say much because it's Cologne. That was apparently success. A lot of, you know, founders, exe executives really liked it. That was together with Morgan Stanley and Nuzu and so forth. Jen, as you said, a lot of visitors. They say 368,000 visitors, which is 3% higher. And naturally, the question is like, how do you compare Gamescom to GDC? And I think these are like apples and oranges. The reason why there's so many visitor at Gamescom is because it's not only a trade show. Actually, trade show is the smallest part. It is a fan show. So the good part about it is is that you see a lot of gamers everywhere. You see a lot of game ads like new game announcements. Whatever was coming out was being promoted there. So you really felt like it was a gaming event and not like a bisdev event for you know gaming professionals. I don't think that this event despite bringing this massive

audience and despite being like sort of the premier event is not the S tier that GDC is. like you don't see the same level of executives like yes there are executives but it's not you know the CEO forum that Morids and Goldman and McKenzie arranged in GDC where you essentially see 80% of global industry CEOs. So here it's more like you know a tier rather than the S tier of the of the executives. San Francisco is small. Cologne is smaller. It's kind of funny where Americans are trying to get an Uber in that city and it takes 25 minutes for the Uber to arrive where it takes 20 minutes to take an escooter from literally, you know, the central to the other side. So, I was, you know, walk or take e- scooters. Hotels, they're going to be equally expensive as in SF. Well, not quite that expensive, but equally like expensive and of poor quality. So, if you want to reserve hotel and you're American, do it right now. Hyatt is the St. Reges of Gamescom.

Rison is the intercontinental, excelsier is the four seasons. That should paint the other perfect picture. Those are three to take. Everything else is, you know, the others and make sure that you choose the hotel right. Again, I've had some partners and media people there that that did not do this. The commute between hotels is not like in GDC. It's not 5 minute walk from St. Reges to W. It's going to be 15 to 20 minutes. So, you're going to collect a lot of steps trying to go from one meeting to another. And you wish that you had one of these three hotels. Let's be clear, this [ __ ] place was never designed for conferences. It is a small town with one big cathedral that has no business having any type of huge conference, right? It's a [ __ ] cluster [ __ ] and it's expensive
and it's ridiculous.
Yeah. And you actually if you come in from the US, you need to fly to a city 1 hour train away. So it's pretty far off.
Yeah. It's
Yeah. This is why sadly we don't go [laughter] anymore.
Yeah. Yeah. Yeah. It's it's expensive and so but if you but I think it's gaining a lot of traction. It's growing.

So I I foresee more American and now we saw a lot of Asian companies, but I foresee more American companies coming in. And you know, just to be clear, it's going to be safer than San Francisco. I know it's now like a post-apocalyptic that there's no people. This is safer. And the food is going to be tremendously worse than you would expect in San Francisco.
Let's go to Grand Theft Auto cuz holy [ __ ] it was great. It was actually really great. It ranked number one on the Netflix platform of their top 10 movie list. Pulled in 31 million views within 4 days on Netflix. Another 17 million on their YouTube site. So, uh, just a lot of people watch this thing. Mobile traffic, the US mobile app usage jumped by nearly 50% compared to typical Thursday averages over the last 12 weeks. Web visitors, it soared 125% as users tuned in from PC. That's actually how I watched it. The initial surge, concurrent viewership, and heavy initial demand caused a brief momentary crash on

the platform. This is one thing Netflix struggles with a little bit with live concurrent issues is it tends to crash. If you ever watch like the boxing or the MMA stuff, it tends to crash a little bit. Total reach combined across Netflix and creator reaction streams on Twitch and other platforms. The footage pulled in roughly 4 million peak concurrent viewers. I love this. This marketing brilliance Miami Dade County. So this is, you know, the city of Miami and the county of where Miami is in the US. These local officials are exploring marketing partnerships with Rockstar Games to capitalize on the games depiction of a fictionalized Miami. Ideas include temporary rebranding parts of Miami International Airport as Vice City Airport. I mean, you could not be more brilliant. This is that like well done. Go and do that today. So my take on this whole thing is they crushed it. Special kudos to the art team. Like can you imagine the research to get all these different kinds of things correct?

They should get the games industry equivalent of an Emmy, Oscar, whatever times 10. The authenticity. Like we were watching the tattoos on the guy's arms. You could see every little detail as as you were watching by. just the cultures, the backgrounds, the body shapes, everything was like truly what I felt like was authentic. The transition from the cut scene to the gameplay was the best I've ever seen. And then I just have to say take my money. I'm not even a GTA fan. I'm going to have to fire up the Xbox. Like I said, I was trying to fire off a PlayStation, but can't find one. So, Phil, I think you pulled some some other numbers. What do you see?
All right. So, unfortunately, Jen, I got to I got to be the guy who who delivers attribution. And it actually looks like there was some attribution. And so we're looking at Video Game Insights, which has a public pre-order tracker, which is reporting about 500 million in already existing pre-order sales revenue, which is just absolutely remarkable. And if we look at the most recent data point, it looks like there was an uptick. So, who

knows? Gosh dolly, maybe like this actually had an impact and drove pre-orders. And of course, like you have to think about at the margin, would these players have purchased and installed the games anyway? But the more core question I have, Jen, is who pays who in situations like this? Like we already know Netflix and Take Two have a relationship, but like did Take Two pay for this? What is this? Is this content? How does this even come together? How should I think about this,
my friends?
This info trailer.
This is what we call top offunnel marketing. This initiative was not for the fans. This was not for us. This was for general Netflix people out there. To hit somebody who wasn't normally going to go to Rockstar YouTube who may not know about this, you know, showing up on that first screen of Netflix was a way for the average person to be like, "What the hell is this?" and maybe click in and watch. And so, I would have expected there to be a bump in pre-orders. I think it's going to happen more slowly over time. So, who pays for this? I mean, you know, basically, in my humble

opinion, Netflix made it rain just like Jason does in the strip club scene in the Netflix special. By the way, they go to the strip club and you're like, "Oh god, everyone forgets like what this game is." And you're watching that, you're like, "Oh, yeah." No, they there is a strip club mission inside of this game. And so Rockstar in this whole thing has all of the leverage in the world. Everybody wants a piece of what's going on with Netflix. And we talked about this a couple weeks ago. Uh Netflix and Rockstar already have this relationship. Remember they had all those apps that were part of the Netflix, you know, bundle that they touted were the top downloaded games. I think there was some sort of relationship established when you see that that was so successful. Netflix probably went back to the well and said, "Hey, you know, like let's do something again." They absolutely had to have paid for this. But the silent winner in all of this, I don't know if you watched the whole thing, but at the very end it said captured on PS5. It didn't even say captured on PS5 Pro.

It just said PS5. And I was like, "Holy sh holy [ __ ] that looked amazing." And actually, they have since confirmed that it was entirely captured on PlayStation 5 base model, not the Pro. That's kind of the hidden marketing magic that I think we should all focus on is whoever made that deal happen at PlayStation is about to make it rain because PlayStations are sold out everywhere.
So, I'm seeing the collateral damage on this on the marketing side. Like Poly Market tweeted on X, movie studios are reportedly concerned the release of GTA 6 could pull audiences away from theaters and have major impact on the box office weeks. And this is naturally happening on gaming side because the release of Stars Citizen spin-off Squadron 42 has been postponed to Q2, but Star Citizen is never shipping. So they just postpone for the sake.
Total vaporware. That's just an excuse.
Yeah, they just launched a new Kickstarter to to bring it closer. But

apparently like this is such a big thing that it's just moving the dates for everybody else in entertainment, right?
Absolutely. uh you know, get get out of the way. If you weren't already out of the way, get out of the way or ship beforehand. So, Chris, let's go back to PlayStation.
Yeah, [clears throat] good news from PlayStation overall. There are three quarters of the pre-orders, right? According to Sensor Tower, which I think actually is high is low. I think they actually are probably higher than that overall worldwide, but I think it's a select sample for Sensor Tower. So, but anyway, 8020 is it's a crazy number, dude. like that is just Xbox is doomed, you know, with these kind of numbers and and PlayStation's obviously playing that out on on the trailers and on the co-arketing dollars of of which, you know, they're doing deals all the time to make sure that Sony is the premier platform for this. Sony basically the CEO says they're they're focusing his monetization on current PS5's players. And I guess the good news about the ramp

apocalypse is it happened in the middle in the end of this cycle more or less. So that there's like almost 100 million units of hardware out there already of active players and that is what they're going to be focused on monetizing which ising obvious right but that's
clearly what they're doing and GTA is going to help them get there and then also again as I've said many times is when you have a game like GTA becomes a more active install base which is going to buy more games and play more games and spend more money right and so it's all good for Sony because they're the ones that are clearly leading and we're also seeing that hardware is out of stock already dude Dude, it's freaking August, right? So, you can't get a PS5 Pro anywhere because they're selling out at $750 people, right? So, it's like price is no object for these these type of consumers, you know, and so they will sell like every every hardware unit at this level in order for GTA and that will again create a better active install base.
You mentioned the the RAM prices. So RAM prices are being pushed by, you know, the LLM companies probably and the

Nvidas and so forth. As RAM prices keep going up, that pushes the price of hardware, that increases the price for PS6 and makes it probably less attainable, probably over 1K. And then that means that if they're not attainable, if the penetration is low, the developers focus on previous hardware like PS5 because of the TAM of PS6 is too limited, then that would probably mean that there's going to be less exclusive titles for PS6 and that means that there will be less need for PS6 and that creates a vicious cycle that will lead to more PCs being sold. I'm just asking and kind of hypothesizing cuz you you notion that PC is going to save the ramp apocalypse is ridiculous because
the cost of PCs go up the same amount, you know, and and more. You're not doing it in volume, right? So the the people that are going to benefit the most out of Rampocalypse on the price thing are consoles because they
make like 20 25 million a year versus, you know, the limited PC runs or limited runs on on different SKs of PC. though

what I've said before is that this will delay the release of the PS6, you know, and so we will hold on to this hardware a lot a few years longer than normal and they will basically milk this for what it's worth. And that that was the whole point of talking about this cuz the CEO is already s suggesting this now. And so with 100 million install base, we should get up to 120 150 somewhere in that range in the next two years despite the fact that RAM apocalypse which is a huge install base for these consoles and they will mean to be active and and people buying hard software for it. PCs will actually be even more difficult to buy at a reasonable price given the RAM apocalypse until this is over. And then the PS6 will come out when the RAM apocalypse is over. Right. In theory,
when the bubble has burst and they get better deals on on ramp,
man, did you see Nvidia's
earnings report from
Holy [ __ ] Yeah,
it it was the most revenue made by a company ever in the history of the world in one quarter.

[ __ ] [gasps]
It's just insane. Like it, you know, you hear about AI bubbles and then Nvidia is like, nope.
But bubble doesn't mean that companies are not valuable or the technology is not good. It just means overvalued. Nvidia is selling picks and shovels, you know, the the quads and and the the anthropics or the open AIs of the world that are essentially shipping models that are so much more expensive than the Chinese open source models, etc. Again, not an expert, but seems like it's pretty bubbly.
All right, let's get to our next story, which is Oh, Phil, you're you put this one, you're going to love this one. The EU designates Roblox a very large online platform putting 48 million European users under its strictest rules. So, here's what this means, I guess, as I looked it up, and you know, obviously, we'll get your take. Roblox declared 48 million average monthly European users over its 6 months ending February 13th, 26, clearing the 45 million threshold. Chat GPT enters as a search engine.

Reddit enters as a platform, bringing the total designations to 28. I guess there's 28 companies that are in this. All three have four months to comply, landing in 127, January 27, with fines reaching 6% of global annual turnover. Obligations include annual independent audits, systematic risk assessments covering minors, a content feed with no behavioral profiling, and a public ad repository. That's uh going to be a [ __ ] for them to do. Uh, the Dutch Authority for Consumers and Markets supervises Roblox and opened its own child safety investigation on January 30th of 26. Phil, holy [ __ ] Are you mad at me for [laughter] predicting that basically something like this was going to happen a few weeks back when we were talking about the social media side of this?
I don't know if I can be angry at you, Jen, in the comparison to my to my I don't want to say rage at the EU. I mean I don't expect anything better to them but like it it's it's just worth going

through the level of bureaucracy. I mean you mentioned some of the things Jim right so you have the risk mitigation plan that you got to do in response to your annual systematic risk assessment right and when you start to file all these things you have to be working with compliance officers. So there's new compliance officers that Roblox is going to have to assign staff to deal with every year. And this isn't an empty threat. They have made product level recommendation and influence into Tik Tok and to Facebook. They regulate things like for instance when you have a recommended row there has to be one that's not based on individual user personalization. It has to be like a generic recommendation. They force you by the way to pay for your own compliance to hire these compliance officers to fund all the reporting that you have to do. You have to pay for that as well to the EU. They have a super a supervisory fee which is 0.5% of worldwide income for just the privilege of being regulated by the EU and the I

just it's hard for me to understand how this makes the EU a better place to do business, how this makes the EU richer and for whatever things EU citizens like to point to, and I guess I'm one of them. I guess Mishka, you're one of them, too. Uh, you know, I don't necessarily feel more privacy respected after GDPR. I don't know if you feel that, Mishka. And I just wonder if we're going to continue more bulcanization and we're going to see more limited rollout of features in Europe. And you already see this with Apple products having hesitation around things like iPhone mirroring, right? Like if you're in the EU, it's very frustrating. I would love to have my iPhone be on my desktop and certain regulations make that hard to perform because there's all these interoperable requirements.
It's just sad and I don't think this is going to get any better. And by the way, Steam, Steam is 10 million users away. I just want to point that out. [laughter] The goal, you have to have 45 million average MAU. Steam in the EU is about 31 million. So Steam is going to Steam is up next.

And maybe PSN.
When you look at LinkedIn, there's often like some kind of a EU investor like EU based VC or some some technology guy who's talking about EU Inc. which is like a new thing that they're trying to set up. But the fact is EU is a league that is led by bureaucrats and technocrats out of Brussels. Like we don't even have one coherent market. Like me moving to Greece, I need to set up all new things. Like if I would move from from Dallas to San Diego, it wouldn't be like a new country. It would be part of the same country. But here it's just it's just a league of different countries and insane amount of regulation. There was also a tweet going on by Elon M like he was sharing it but it was basically like how do you set up a company in Germany that in Germany if you do a funding round let's say I'm running an A round and I got 30 million I have to get noted by every single investor so they have to come in to Germany get noted and I have to pay like tens of thousands for this type of an action so yes we innovate on regulations and I don't know if that's a good thing

I will play a little bit of a centrist point on this which is there's not any regulations for many of these companies. You know, child safety is a challenge.
So, I I I think the pendulum swings too far what feels like here to to one side that you know, the US we have almost zero regulations. That feels like the other side of the pendulum.
We have COPA. We have plenty of rules. Don't worry. There's no shortage of rules in the world.
COPA is from 1996, my friend.
I'd be fine if EU would ban only fans. that that would be actually a good thing or something like that.
But that's where you go is only fans.
As an example, like like we we have services that are not needed.
Tell about the service children game on like that that feels like something that should have some guidelines.
100% like and I'm not saying US model is perfect. Like you said, there's a pendulum to things but like our pendulum is on like ultra regulation and US pendulum is like on corporate greed. So I'm sure there's something in between.

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 apart. Vibes vybs.co. [music]
Guessing where your users come from? That's so [music] 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. Sattorii. It's the Japanese [music] Zen

Buddhist term for sudden enlightenment. That flash where everything clicks. We're told that Heroic Labs team had theirs when [music] they realized that most studios run live ops like a horoscope. Vague, kind of generic, [music] same advice for everyone. So, they built Sattorii. Realtime experimentation, player level personalization, events that actually respond to player behavior. Sayanara to your old live op stand and Konichiwa to Sattorii from Heroid Labs. All right, let's get to our next story which is Star Wars Star Wars Zero Company. So, there's a Star Wars game back in town and this will be a little bit good of good news. So, congrats to EA's Star Wars Zero company. When we talked about this last week with the announcement of Rainbow 6 Tactics, it felt like an XCOM meets IP resurgence,

the launches happened and we have some solid numbers including an 85 Metacritic on PC and PlayStation 5. The Xbox had a higher Metacritic of 87 and it's one of the best, if not the best Star Wars rated games in the last 20 years. I think Co Ctor is still number one if I recall correctly. The record-breaking launch surpassed previous franchise high marks on Steam, beating Star Wars Jedi Survivor and Jedi Fall in Order. This is just the Steam number I'm I'm talking about. It was a top selling game on Steam. So, one of the top sellers even with the $50 price point. And then something really interesting came up in my LinkedIn feed. Kevin Marciano, who's the CEO of Future Trash. So, they are a UFN developer who makes Star Wars Droid Tycoon. It's a a game on UEFn. And for fun, he pulled the PC CCUs and it it showed kind of funnily that the the chart is showing that Droid Factory peaked a little bit higher than Zero Company by 7% like 80K versus 75. But

impressive for them for Droid Factory was the little bit of a trans media bump that wasn't from TV or film. It was from another game. And so they had an 18% week-over- week lift. So, Phil, I thought, you know, listen, I brought you a little bit of data. What do you think? Trans Media is
uh you No, UFN is irrelevant and and useless useless numbers. Like, it's all just like tourist riff raff. It's it's Roblox style.
It's Roblox style slop.
Tourist riff raff. [laughter]
Yeah, I can't even I can't even pretend to to respect the Droid Tycoon comparison. And to be honest with you, like, congratulations to to Star Wars Zero Company. Like, congratulations to the developer. I mean, we'll be going into the drama later. At the end of the day, I just don't think this means anything from a live service perspective. No one has been able to take the XCOM model and do anything meaningful with it from a live service perspective. On mobile, I've been waiting for someone to get this right. Tacticus,
no.
Is the closest from Snowprints.
Next games. You remember they had they

had Walking Dead? That was an XCOM version.
The P the Beast Squad Walking Dead.
Yeah. Yeah. Then not the Scopely Walk, not the Scopely Walking Dead, but the other one. based on one. You mean No Man's Land that I have?
Yeah, because Yes. Skully did based on the comic and they did based on the TV show, the AMC TV show and they launched pretty much at the same time.
There's a Warhammer game like Tacticas or something.
And it's been incredibly successful. We're talking nine figures worth of revenue. Snowprint in Sweden makes it. Remember, they're owned by MTG. But like that's been that's been pretty it pretty much it on mobile. And there's like really nothing on HD that's been a live service success.
Mhm. you know, this is a one- hit wonder. It'll make a bunch of revenue. Congratulations to them. But I don't see anything else in this genre right now that we should care about from a monetization economy perspective. The game the games are beautiful. I think someone's got to figure out how to translate this.
It's playable on console, but it doesn't sell on console. It sells on PC. And so this these numbers are anemic, you know, like this is not a good result for this

game, period. you know, this is a niche game that cater to Super Core XCOM folk, you know,
and then you got to pay the the license on top of it, right? So,
yeah.
Well, here's what's kind of showing maybe it was a little bit difficult difficult. So, this is from GameFile. So, Stephen Tatillo put out this article based off of the, you know, coming out of Zero Company success and this was, this made me think of Subnotica all over again, but in a little bit different way. So the developers called Bit Reactor. They furled most of its staff estimated 80% of the team weeks before the launch of the game independent decision. So the studio confirmed that this is a difficult decision. It was theirs alone, not initiated by EA or the licenser Disney who is obviously Lucasfilm and Star Wars. So watch out if you love that drama. You go into this whole thing and and there's like an ownership lawsuit. you know, the founder and the COO are engaged in this ongoing

leg legal battle over the ownership. She was alleging she was pushed out for and then and then and the studio is concealing the fur. Anyway, Mishka, go into this cuz I I don't
like I'm just going to do like a super high level cuz like we don't know the details and it's hearsay and it's everybody suing everybody. But I'm just saying like this is the news broke out that the uh the majority of the studio estimated 80% of the team were furoughed weeks before the launch of Star Wars Zero Company, which is kind of surprising because this game looks like a hit. It's a good game. it will sell well enough and this studio should be working on probably DLC and they should be working on the next games using the same engine this you know XCOM for access engine but they're not and so what's going on and the what's going on is in the background like no publisher wants to touch it because the founders are suing each other honestly like because of that I think the studio is kind of cooked it's kind of dead from the inside despite shipping a very solid game and then this sort of a co-founder

drama is really the the number one reason why startups fail. It's not the runway. It's not the, you know, the failed product. It's just people fighting for the loot even before the loot. And I was reading through the other, was it game file, the the newsletter? It's it's paid version of it. And it kind of goes super deep like they have been developing this game since what 2021 is that correct? for 2020. said 21 or 22 and it started out originally as a pitch to Bungie and and then kind of it was an apex pitch to
Yeah, Vince was involved. Vince
and Vince is over 40. So he was like this is aing awesome game or was over 40, sorry. And like how about you do Star Wars since Respawn had the license and that's where he started. And then the the co-founder lady, she was pushed out in 21 already and now she's coming back and like, "Hey, I need 30% of the pie." And then there was another CT. Anyway, there's so much drama. I don't know who's right, who's wrong, but they

kind of destroyed the studio from the inside. And that's why I think the studio will fail. And it's very unfortunate for the team that did such an extraordinary work in building this type of game that clearly has a good enough niche audience that where they could have done the next versions and maybe the sequel to this one. So, it's super unfortunate that this happened. EA and Lucas had nothing to do with the fall of this studio, right? They paid their payments, you know, the milestone payments according to reporting anyway, but the studio ran over budget clearly and didn't have enough money to take it home, right? The company was funded by EA, right? Respawn basically found these guys to build this particular game to leverage the EA Star Wars license clearly, right? You know, the project is clearly high quality. The team is really high quality. They have developers that are experienced with this type of XCOM type engine and model. But there is an inherent disconnect between the genre, the license, and the market opportunity for this game, right? This game should

not have been green lit to begin with because there is no market for this game that justifies the investment in it. If you want to innovate in this thing, then to what I think what Philip was trying to say earlier is that like then figure out ways of monetizing this game. create a live service with this small group of people that are so into it, right? That
crusty steam players love this [ __ ]
Yeah,
it's 40 plus to Mishka's point. Like, and who who's taking the live service shot on goal for this?
Who's doing it?
We're the Eastern Europeans.
Eastern Europeans, go do this.
If you want to take a shot on goal with something like this, you have to do it at a budget and a rate and a team and a size and a and a and a runway that is going to allow you to still make a little bit of money, but it's going to be mice nuts. It's going to be small. If you have a passion for it, just scope it. Scope it well. All right. So, the next story is Brian Ward steps down from the savvy CEO position and he was actually a guest on the podcast. Mishka, talk us through that one.
Brian Ward, guest of a podcast. He was the CEO of Savvy Games Group that was established in 2021. They were

overseeing a nearly $ 38 billion investment to expand Saudi Arabia's presence in the global games industry. During his tenure, Savvy acquired several studios including Moonton from by Dance for was that 6 billion and then earlier they really grabbed the crown which is Scopi for merely 4.9 billion in 2023 just before Monopoly go launched. So that was quite the acquisition. And now Turkey on the Wazer, I'm mispronouncing it, is going to be the deputy governor of Pith that heads international investments division and will serve as an interim acting CEO of Savvy. So there's going to be a new CEO following that. My personal take, I think Ward turned this position for something that most executive probably didn't think twice about to a position that I would believe is quite coveted in the industry. And I can only hear and feel and see every executive head hunter salivating on on getting to position a

CEO for Savvy Games Group. So they're fighting for this task. And then in this role like you'll be surrounded with pretty amazing leaders like you're talking about Walter Driver, Javier Ferrer, Andrew Wilson, Laura Mila, like the who's who is part of Savvy Games Group and and I don't know if one of them would be taking this role as the group CEO, somebody from the royal family ascending to this position and overall like what's the future of Savvy? Is it going to be Xbox acquisition? press you. You as a former habitant of Kingdom of Saudi Arabia, what tell you?
First of all, if anybody from the royal family of Saudi Arabia becomes a chief executive of an entertainment group of gaming
Yeah.
assets, [ __ ] short the [ __ ] right? That's not the direction that you want to be going, right? We don't want any of that going on right now, right? You have all these seasoned executives from the

most profitable successful companies in the world. You don't want one of the Saudi royal family to be put in charge. Like that is ridiculous. Okay, so let's like I think Brian Ward deserves a lot of credit to get this from zero to one, right? I've heard a lot of mixed things about him over the years, but he did an exceptional job of navigating this quagmire of royal family politics and politics in general and the whole idea of getting this stuff off the ground in the kingdom just in general. So, he massaged this thing as best you could and got got [ __ ] done like fundamentally. But now we have people that actually know how to execute and manage like these businesses. And so his his his skill set's no longer really needed, I would think. Also, the dude's like [ __ ] 70 years old. Retire already, dude. Like, how much stress can you put yourself under? Like, and who would want to live in Riot, right? Like Jesus. So, I think he's probably looking forward to retirement, right? And and it's time for him to move on. So, my

more power to him, dude, getting this kind of thing done is is exceptional. It's a great like career accomplishment for him and and a legacy that I'm sure he'll be proud of. So,
what if during the Scopely acquisition a certain promise was made to Scopi executives that they would be next in line for the savvy throne? What if Javier and Walter ascended to the the Savvi CEO position? I mean, who else is on the short list? No one from EA. They're they're clearing ship. No, they're clearing ship. They're dunzies.
I don't know if they want that. Um I mean, listen,
I don't think they want that. you know, like they they built an earnout structure for the Sculpey folks. You know, I would imagine it's a three, four, five year earnout structure. Those guys are working just as hard as they were in the beginning cuz they freaking love the business. They love LA press. What is that role today? You just said it. You know, Brian Ward did the 0ero to one. They're in a different phase of whatever that business is. They're not looking for the next major acquisition. What they want an operator? What is it?

The honest truth is I don't [ __ ] know what what's happening. I have heard some rumblings of things that are going on at the highest levels there. I think that'll become clear as we move on. Now that the deal is closed, now they have to figure out what it looks like after this deal closes and what the management structure at the highest level happens and who's managing the different organizations under that. How that is established. Are they combined? Are they separated? We will find out more over time. We haven't heard anything about layoffs yet or or people getting fired or shutting down studios which should be coming imminently soon
from EA or from Scopely
from EA because there parts of the organization that are no longer necessary first of all and second of all there's a lot of studios that don't make sense anymore. So, but anyway, we haven't heard boo on what they're doing and frankly they don't have any reason to tell us either. So, it's like we're going to be in the dark most likely until they choose to tell us what they want to tell us, you know, at their time

and their choosing because they're not a publicly traded company. They have no [clears throat] requirements to to they're Saudi company, right? They're no they have no requirements as far as I understand it anyway. So,
I think somebody from 10 cent would make sense to lead this type of
Okay.
No,
no,
just trying to lead us to the next article.
Oh,
oh, oh, oh,
right. I was like, uh,
speaking of 10 cent,
we need operators. Just to be clear, we need operators. We don't need McKenzie people. We don't need likeing Bane folks. We don't need bankers. We don't need, you know, Goldman Sachs, you know, [ __ ] We needing people that know how to operate gaming companies, right? We need real like operators.
What do you mean? No, we don't.
We need Peter Malamu, Will Wright. Like where are the cool legendary visionaries that were etching out new verticals that everyone these multimedia moments are gone from us. That's what we need again. That is our swag. We need the founder

engineer again. The operator is irrelevant.
Milk is with me on this one.
Not in leading a company.
Yeah, Peter. No way, dude. That's horrific. All due respect, but like
All right, moving on to Tencent.
All right, Phil, take this one. Tensen Games has announced its unified brand Tensen Games Central Tech and is a portfolio of AI tools. That's right. That's that's something we haven't seen from the West yet is a publisher providing a portfolio of AI tools. It includes new 3D character creation with endtoend AI animation. So that's rigging, that's meshes, that's generating motion from text. They have Giga, which is an AI agent for virtual worlds. They have magic dawn for rendering. They have ACE which is anti-che. They have voice reduction driven by AI technology. They have a play tester that is agent driven. I just don't see where the west is on providing these tools. And as someone who's investigating more of them and

especially playing with 3D, I guess people would just be surprised that it's not completely solved yet. like going from a 2D image to a 3D object that you can use in a game is actually still a pretty early stage from an AI development process. There's a studio called TriPo or a company called TriPo, which I believe is Chinese-based, which is doing a lot of that right now. They're clearly the market leader. Again, I where is the West on this? We're going to have a lot more conversations about 3D, I would say, over the next year, next 12 months, and where AI is contributing to that because it's already remarkable what it's able to do, and it's starting to understand space more. That's the thing it's struggled with is how to place objects, how to understand distance in space. That is a problem that's being solved right now.
It'll be interesting to see if they're going after in a sense the engine business of what, you know, Unity and Epic is, they have lots of AI plugins and coding options, but I think you're right that the way that they're treating this 3D specific path could be an interesting one. But I

don't know how many
they can subsidize 10 cents gaming business is minority of their revenue. They can subsidize all the other tech parts of their business. They can advertise it across their business. We don't have something that powerful and that centralized in the west for games yet. Like all of our major tech players don't make games anymore. So they don't give a [ __ ] about this.
What's weird though is 10 cents not doing as well in the west as it is domestically. And so who is this for? Is this for western developers or is it for domestic developers? That's the other piece I you know and because we talk about all the time like engines don't really make money unless they're going vertical. Unless the idea is like hey we want to have more of a vertical stack of how we are giving tools that ladder up to you know people staying in our ecosystem and making more money. I think this is likely their internal tool set that they're making public and available for people to get involved in.
When I was on Wild Rift, we had to use their tech stack. So, we were using their messaging system and their CRM

system and live op. And some of it was good and some of it wasn't. I mean, this is 20 19 at the time I'm talking about this and so I I imagine it's like 100 times better right now. Anyway, so let's go to the other part of 10centent. Mishka, you pulled some other news.
Yeah. So, Dean Takashi was at Gamescom and he interviewed Tencent's Nahwan Lee at Gamescom. Maybe I'm mispronouncing. And it's one of those, you know, Dean's long transcript interviews, uh, where you could kind of like read an email thread, but let me summarize it. So, Nwan or Nuan, either way, put a number on company's investment filter where he talks about evergreen games. and he means evergreen as in $500 million in annual gross revenue or 5 million daily active users on mobile and $2 million on PC for live services. So that's basically the threshold of their forever

franchises, if you will. And for a studio to to get there, it takes two to three games and about 10 years before they reach this status. That's the way they've seen in their investment. So they back the teams rather than titles just like any VC. and treats short-term failures as noise as these companies become these evergreens in the span of a decade. He denied any western pullback, framing the light speeded LA layoffs as studio level decisions under operational autonomy. He talked about Phantom Blade Zero as his most anticipated release. Sounds like an anime game.
That is a console game that is like highly realistic. It's actually getting a lot of press and a lot of pre-orders right now. It's been on Summer GameFest and all of those.
This is how old I am. Like I read Phantom Blaze Zero and I'm like, "O immediate turnoff." And then Star Wars Tactics XCOM style turnbased. Give it to me. Anyways, so they also talked about the $18 million W4 Games deal is a bet

on Go Dots in the ecosystem and does not conflict with the Epic stake because Unreal serves AAA and because Tencent invests into everything. He didn't say that, but that was my addition. UGC, as he see it, is a generational bet on both players and creators. The attention war is real, but supply is never the issue since top IPs now extend beyond games into things like Kuro's Withering Waves concert tour, so gaming in trans media. And then final one is the AI. The line is empower rather than displays with Lee dodging the Microsoft capital allocation question by saying Tencent invests as gamers not as typical strategics. So all in all this was a press release in a very long form. Um it's just they're like if you're surprised by any of these good luck very polished interview from Mr. Nachuan Lee. No wonder he's the spokesperson. I

[ __ ] hate these games beat articles. Total fluff and absolute no analysis or or actually independent thought whatsoever. So
that's why we have you, Eric.
Yeah. What do you really feel about Nuan Lee's comment and Tencent overall?
It's just all [ __ ] You know, they're focusing on game development within China to build games out here and it was pretty evident at Gamescom that that's what they're working on.
Yeah. Yeah. pushing them into markets while being afraid of being regulated.
I'm hoping that this AI tool set that they're talking about is actually trying to build a platform as opposed to trying to just build tools because otherwise it doesn't make a lot of sense either, frankly, that they create another platform, right? Something that I, by the way, heard also at um Gamescom is top Chinese game companies were doing a little bit of a tour in Europe as well, checking out different AI companies as they are making [ __ ] enormous investments into AI, like enormous in

terms of B. And that seems to be the focus of their leadership is to really expand and and build new verticals in AI.
I'm going to reiterate the same thing I've been saying forever. You got to create new platforms. You can't just create the same [ __ ] you know, for console, PC, and mobile, right, with AI, right? And so,
yeah,
if they are trying to go after platforms that are,
you know, UGC and other like, you know, AI platforms,
that makes sense. There's a lot of people that are going after this and and I'm sure China is
focused on that. 10 cents focus on that because that they can win, you know, because they have the resource,
they have the talent and then
billion dollar bets, just to be clear, from well-known Chinese companies into AI, not like, oh, we're going to try out different, you know, workflows like no [ __ ] multi-billion dollar investments.
And these are not tools that they sell to like developers. This is like a whole platform type play.
Their own LLMs essentially.
Well, they also have a market, you know,

that is okay with it. player base in China is reportedly 80% of players in China see AI as good to positive whereas it's something like 20% in the US.
Was this a vote by the Chinese? I didn't know they do such a thing.
No, they do these polls. I just like I'm just really paying attention especially as a marketer. Like the brand of AI is struggling in the US. It's struggling with data centers. It's really gotten dragged down in the last I would say three to six months by all of the bad press. I think it has to us. It is crazy. I think it is crazy.
The US has like the worst press of AI and then meanwhile Chinese are like yeah we're going to put in billions and like developing all these tools. Yeah. Yeah guys worry about this. We'll we'll you know quietly work on our own tool sets and so I don't know just conspiracy.
They have they have managed the brand of AI infinitely better there than they are here. Sam Elman is a great face of AI. [laughter]

Not anymore. Sadly comments.
Not anymore. All right. Well, let's let's wrap it up. Uh,
last one. Neil Long, shout out to Neil Long from Mobile Gamer Biz. He had a short much shorter interview than Gamespeed on NCFT. And we haven't heard about those guys in a while since pretty much like Lineage 2. So, NCOFT has spent over $300 million acquiring four mobile gaming companies. Vietnam's Lihoohoo, Korea based Springcoms, Moving Eyes in Slovenia. Wow, I didn't know Slovenia has game companies. Uh, Germany's Just Play, which is a loyalty platform. And NCOFT now runs around 200 live mobile games in total, and it's pulling all the data from those titles to build central internal tool set that can manage creative production, live operations, AB testing, prediction models, and more across his portfolio. So he in his interview he had Anil Simon head of social mobile of this Korean giant and

he said that he's looking to buy established mobile studios making between 50 to$100 million per year across all genres and business models. And essentially what they intend to do is just put these studios together and empower them with sort of like an apploven style growth engine with AI and light and technology. Exactly. Scope that was trademarked.
Yeah. What's the scope please? Polyami Play is their central.
Yeah. Like they they've built it
and their goal is to build this mobile casual division into a $5 billion a year business by 2030. Vision 2030. Nobody else has had vision 2030. Crest, not mice nuts, right? How do you like this approach?
I I actually don't know anything about what NCO is doing right now. They've been kind of off the radar for quite a while, but yeah, I would have to look into these particular teams and see what they're trying to build here. But cool. I mean, I think more acquisitions, more people interested in the space is good.

[laughter]
Yeah. More happy bankers.
Yeah.
And more happy founders. So,
and that better get get over to uh Korea.
I think it's based out of Cyprus. Anyway, I think it's smart. I think it's bold. I think it's more structured. I hate the type of approaches that h okay I'll say it like like the sort of a sandsoft approach that that existed where you know you basically just build out an organization do some press releases that you're going to be the next big thing on the block you're going to take on EA whatnot and then you go out of business in 2 years without doing really anything
okay I can't do this I have to I have to play Eric Crest I'm sorry I'm sorry Mishko but this is like this is [ __ ] this is the most [ __ ] press release ever of course they're going to go out and buy profitable studios who isn't looking for that? And so what is it that NCOT has that is magical that is going to make the combination of them and the company they're acquiring worth more than they are separately? What did they add that no one else can add? And the answer is nothing. They don't have anything in particular that they can

add. I don't understand this just play strategy either unless they're trying to build some sort of acquisition funnel and they see some weird Korean UA angle to just play. But I don't understand where this company is going. They don't seem to have a strategy and this just feels like a fluffy press release and I don't know why you would join NCOTF if you're a founder. What what do they have to offer?
Well, culturally, isn't it super challenging too? I mean, everything, you know, my experience in working with Korean companies is that there is a hierarchy gate.
Everything takes a long long time to get anything done.
Yeah. And so when you want a conglomerate, like you have to have a reason and a benefit for that to exist. And to Phil's point, it's like, well, what are you getting out of it?
I want to believe. I met the Just Play founders. They look just fine and just happy. [laughter] So, I don't know. I don't know. I want to believe.
Well, let's check in and see if we can get folks to help us understand, you know, what are the key benefits? Like, I don't think any of us have really been following what's going on. So, let's

let's check in. All right,
I'll email.
All right, everyone. That wraps it up for the first 399 episodes because we are going to put that in the rear rear view mirror and look ahead to number 400 coming next week. We'll do a look back. So, we might be a little bit light on current news, but you'll get a lot of deconstructor of fun breakdowns of what happened in the [laughter] past.
See you guys next week.
Next week.
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