two & a half gamers session #13 - Rovio making $2.6M/year more from ads & more efficient UA? Full...

[Music] uh welcome everybody um happy to be back uh this is no gaming podcast 2 and a half gamer session number 13 and this week we're starting a brand new segment the mobile gaming company happy hour where we do a deep dive on a mobile gaming company from the perspective of game design UA and AD monetization but again let's not forget this is a 400 a.m. conference discussion WIP so let's not take it too seriously come on let's Ty in hey guys welcome Felix yakob and we have we have a special guest That You Don't See yet her name is Karina and she's my daughter so let's see she has very strong opinions about the about the topic so let's she'll be weighing in a bit on the our analysis as well I hope oh yeah yeah well I'm pretty sure she will say say her word how you all good all good on your

side can't complain spring is coming everyone's happy I would say was it was it co last week or you were it was it was 100% but like it was super mild you didn't get tested like why would I like I felt I felt bad I'm not going to leave the house like I was just like oh it's co what does that change you know like yeah yeah true okay yeah just stayed in bed nice yeah cool any any news allar I know let's not mention yeah new update there finally going to look it up over the weekend I think they added battle pass so need to dig through it like how they actually implemented it but other than that I would say pretty mood week on the nft news so no more no more big things announced other than the SS nft which is like 300 million or whatnot that I just don't want to even comment on yeah yeah today we're not going to comment on any news we just uh you know going to dig deeper into the into the topics I mention

and um and the first company we will be discussing Roo and just a disclaimer the everybody from Roo we love you guys they're all friends um of ours as well but you know let's see what happens yeah as a disclaimer everything is from yeah Financial uh financially publicly available information and just stating as a fact the three of us are complete losers and have never achieved anything that Roy has achieved but that does not mean we can't analyze things and then that doesn't mean we can't comment exactly uh so yeah before diving in so how we're going to basically do this is we are each going to comment uh Remo is going to comment a bit on game design then m is going to dive in on their UA what he can see and then I'm going to be commenting a bit on uh their overall admon strategy and what I think could be improved uh before kind of diving into

Remo's part with game design I just wanted to give some kind of Topline information about roio to kind of set the context so for those who don't know uh there in 2021 Revenue group overall group Revenue was € 286 million EUR that's up 5% from 2020 but down 1% uh from 2019 so that means that the revenue growth is pretty flat uh the best year the co year 2020 yeah yeah exactly uh also uh the best year they ever had was when they went public in 2017 uh then the revenue was 297 million so you know they're actually down by about 10 million from when they actually went public so it's kind of declining from the 2017 level uh 66% of their revenue came from

the US uh 21% from emia and 12% from Asia how that split up is roughly yeah 80% of roio's Revenue is IAP based 15% is ADS based 3% come from licensing deals and two is other that we don't know but probably like ad hoc deals that they don't really break out is this just the um note here prob um advertising from podcasts like like ours just just to note here like is is merchandising in this I'm thinking that's the 2% like licensing and Merchandising must be in there like yeah the plush toys that you see like that's that's where that is nested in the financial statement so uh 5 million daily active users in 2021 uh one little note that I found was quite hilarious where maybe we can even ask your daughter for help uh is they

have one page in their 2021 annual report that's claims 93% Global awareness of Angry Birds so they have the Angry Bird character saying in a blurb put 10 people in a room and only one hasn't heard of me and that's probably the baby who doesn't have internet yet know what they say what do I think for those of you who are listening uh she's holding up his daughter and showing a picture of Angry Birds and we're looking for a reaction yeah she's just trying to destroy the microphone so I guess she's not recognizing yeah she doesn't recognize that that's picture at all all right so the baby is the one who hasn't heard about it since you know the three of us have heard of Rio so yeah but that that fits fits the statistics of yeah I was wrong I'll admit that so

uh roio went public at €180 a share and is currently trading out €72 a share which is up from about5 a share in 2021 so it's trailing up but it's still about half of yeah the highest like all-time highs Mar cap of roio right now is 63 million EUR which means that roio is trading at about a 2.1x revenue multiple uh kind of in line with a couple of other gaming companies that you see I guess is yeah how does that compare like in your guys's mind roughly the same right yeah sounds about right and lately uh but one sec can you just explain for everyone else like what that what does that even mean it's trading well for cing as well yeah so essentially like it's uh the revenue multiple like how you measure or look at that uh is like how

willing people or how much value they're attributing to the people in the company IP everything that's holding in the company and how much is trading at right so basically what that means is like a general software a service right now is trading at 20x multiple Google is tra trading about like 50x if not even higher multiple because you know they're Powerhouse that prints money so only getting a 2X uh usually in gaming you get like 2 and a half to 3x Revenue multiple so it's like in the Spectrum but essentially people can't forecast the revenue in the same way as a software as a service company so that's usually way you tribute that too but it's kind of standard yeah 2.1 not great not terrible and I think this slides into Remo's game design section quite nicely because uh the new roio CEO that came in last year has publicly said that roio is committed to making more Acquisitions on the back of Ruby game of

the Ruby games acquisition in uh 2021 no he's really nice guy I had a call with him uh I think last year or the even year before and it was just really really really nice call nice Vibe and the whole atmosphere yeah I think uh this could be one of those turning moments here uh especially the bit about like acquiring other companies maybe people can put is in analog with something that Frank Jibo did with Zinga before so let's let's yeah I'm not no no man no just in small scale let's see small scale Okay small scale of course small scale this is a completely different scale but let me just go over some of the things here and then we can kind of dissect why I think it will happen like I think it will okay so first I'm going to look at some of the games they released and some of the games they soft launch uh during last three years starting somewhere at 2019 of course they're much more of those but

don't want to go through all of those and then what was the number of the games on their account 80 oh so much don't know yeah really really big number around that yeah yeah uh and then I want to look at their current Revenue structures and the differences between the last two years based on portfolio performance and based on that yeah we can then pretty much see what happens there so let's let's take into yeah even though I'm wearing a mobile election shirt right now uh we used several tools to get these type of data uh because we didn't get access from a mobile it would have helped a lot helped a lot yeah yeah well let's see let's see what happens so uh yeah let's continue yeah so starting somewhere at April 11 2019 uh Angry Birds AR Isel of pigs is released uh which is in line with their I think it was the strategy of previous years where they would go and take any genre that they would be able to find and pretty

much slap Angry Bird's IP on top of it and see how it goes so this was soft lunch on April 11 2019 it's pretty much something more Innovative than a Pokémon go clone like it seems there's like a game play uh on you pretty much having some kind of a transition of Angry Birds destroying castles Birds against pigs in the real world environment uh but the last update on that app is August 14 202 Fant so I guess this is out of the chopping block so the geolocation uh angle didn't work out as well so that's that's out uh looking next uh July 19 there's soft launch World quest idle MMO which is an original Ip I'm thinking uh these is these like there will be lot of games like these and I don't think so these are internally made and they are more of a published games if I understood correctly because there's a lot of push towards midcore or

let's say more kind core games in roio portfolio if you scour through their account but none of the games are currently fairing that well we'll get to it later but just yeah continuing here so this Oneal soft lunch 2009 uh 2019 July and last update is March 9 2020 so I guess this is also out on the chopping block seems like a really simple casual RPG um next one is darkfire Heroes this one's pretty Innovative uh I think if I understood correctly that was an external team that published it under Rio uh soft lunch August 16 2019 Global launch April 15 2021 last update was February this month this year but if I understood correctly already roio said that they not going to continue development of this title if I not

mistaken yeah it's uh it was uh running the they were running the UA for some time but now it looks like from the from the tools that we we checked that there is no UA at all at for this game the game peaked around like 300K uh I Revenue a month in May 2020 and then as as looking at the numbers it seems like the UI stopped the game play is pretty Innovative it's pretty much a clash Royale take on PVE genre so you have the usual Elixir system when you spawn cards you send them into battle against enemies that keep on coming until you win the level and you progress on the Saga so that's like a clash Royale spin on PVE environment but that's said like this is already like a second uh let's say unsuccessful game on the midore genre on their portfolio so let's continue uh then there's the smalltown murders game which actually fa pretty well uh is a match three iteration on the guardian capes formula where uh

original Ip of course Ro took on the mystery genre where we are solving Mysteries uh through progressing story that you unlock by completing match three levels this was soft launch o October 10 2019 and Global on June 11 2020 uh and the revenue peaked around 1.3 million IP doar at May 2021 and again it seems the currently UA stopped on this uh but but it's still running latest update was April 7th 2022 so I guess this is more of on a back burner or Sunset game but they already have a continuation on this we'll get to it but this is a successful lunch I would say a pretty pretty successful game uh continuing there's another midcore game uh Phoenix Rangers puzzle RPG soft lunch November 26 2019 last update June 10 2020 I guess again didn't make it already third midc let's

keep making the making the it's definitely not genre Mastery in towards the midore yeah we'll get it but I think this this this has to be taken into account like this is a similar situation that happening in King I think where again a company is heavily casually focused and they want to diversify in midcore and they keep trying so this is I guess the same pattern um so if we continue we at the yeah this is really interesting so Angry Birds tennis which is an Angry Birds IP take on tennis Clash uh the game from Wildlife Studios pretty much Angry Birds characters are playing tennis against each other you increase their stats I guess there's the usual meta game that tennis Clash uses this was soft lunch February uh 2020 and the last update was July 2020 so again seems that didn't take the cut uh then 2014 uh sorry then uh march to 2020

there's the angry Bild Journey which is if I understand correctly the newest continuation of the original Angry Birds game that they have so they use the original Ip original gameplay I think there's some Innovation on the 3D graphics and of course the mechanics this was soft lunch I said March 2 2020 and Global launch January this year but yeah they're spending like crazy on this game uh these days so we will get to that yeah yeah it's seems the the revenue for now peaked at uh March uh at around 3 million uh IP dollars a month but yeah let's see because this is just too soon to kind of see see the full picture here but it seems It's fairing pretty well but let's see so this is this is if I understood correctly their current kind of a main main driver that they're looking for like the The Prodigy let's say okay this one's really interesting so actually roio launched

um um sorry termbase RPG with two different versions of Graphics one being the Angry Birds IP and one being not heavily focused on Angry Birds IP uh called Angry Birds Legends and then Chronicles Legends you can see by the art that it's pretty much the same art but in the Chronicles Legends they don't actually use the red guy bird they swap it for some other characters from the lightup even though there are like Birds Birds and pigs but then uh do we see do we see any difference between these like IP based and non non IP uh games like any terms of like I know CPI won't be I think this was part of a test is that like is why would you do that though like from a game design is it kind of just like it oh no this is not this has nothing to do with game Design This is completely marketability completely if you slap like what happens if you slap the IP on the on the game does it matter

like of course does but like what is the difference between the cpis and yeah cpis yeah yeah it's a matter of like how how the audience kind of reacts to it and if this is better or not for your game I mean but yeah it's really interesting because I've never seen this before uh seems the game is pretty much the same just I said like some kind of assets are swapped within the Angry Birds version and then the normal version but this was uh launched on both sides on March 28 2020 and the last update on the Angry Birds one was December 2020 and on the one without the Angry Birds that was April 2020 so it seems these also didn't make the cut so there's already the fourth midcore game not making it uh then continuing there's another midcore game uh hardhead Squad MMO War uh this was soft lunch June 2020

and it seems to me it's a original Ip Forex strategy game something similar to rise of Kingdoms if I understood correctly maybe kind of a more casual is but yeah you can see the the usual Forex map with shields and players going against you and some kind of Base building that's a fixed uh lineer set linear setup and this was updated last on August 12th 2021 so I guess this also didn't make it because there's like eight months of a period without an update so that's already five fifth midcore let's say unsuccessful game on the portfolio and then um we have the supernatural CT Match 3 which is if I understood corre correctly a continuation of small town murders where again this is a variation of their I I wouldn't know variation I think they're just continuing the small time murders because that was already uh taking on the guardian Scapes formula where you yeah it looks like like a small town UN

Small Town murders universe and they're just uh putting another game in it yeah and I don't know what's the state on this one because the last version was updated September last year it looks like it's still in S soft launch yeah it's still in soft launch but there was no update for like eight months so don't know what happens there and then uh we're going to the really really closest One released recently which is uh m puzzle design if I understand correctly this is a local finish IP uh this kind of white guy I always see him at the airport at Helsinki as their kind of original shop and this is again an iteration on Garden scape so you progress and decorate your kind of a garden Mansion whatever there is and you complete match three levels and progress The Story So this I guess is the freshest one in the soft lunch and the last update was just last month so I this is still an actic development

nothing really to say about the performance yet too soon and then uh last thing on the portfolio as for the releases was last month where they re-released the roio classics which is the original game uh that is again pretty much same same setup sold for 99 cents uh on the B app stores and currently I guess this is some kind of nostalgic nostalgic move to support the Angry Birds brand I would say it it picked around like 200k uh from that point of Revenue or in dollars if if I if I've seen the numbers right but yeah seems to me like this is a brand support move not something of a uh like big game to hope for so by going through all of these as for their current portfolio you can see a pattern here that there's always some kind of a big push on a casual game that's either continuation of their original game or this kind of a new track that was set up by the I would say MCH three division

they have there that's taking on the small town murders or the supernatural City and I guess those are Contin thing is if you if you look at small town murders the game is almost you know dead yeah maybe we'll see so so yeah but what I'm saying is that there's pretty much two casual divisions one is the original Angry Birds core gameplay which is throwing birds into pigs and destroying stuff with them that's one thing and then the other thing is the mat three variations and other than that there's a lot of midcore unsuccessful games that are I think published from different teams not internally roio ones and they didn't take the cut so if you look at their overall revenue for last year as for who is bringing what into the Pacman pie Angry Birds 2 is doing around 43% of the overall Revenue Angry Birds dream blast is doing around 25% and Angry Birds Friends is doing around 9% which together means these three games make up

around 75% of their overall IP revenue for both 2021 and this is the same on the year 2020 I was so wondering when I was reading the financial statement how come they didn't break our Revenue by game and that's 100% the reason because man that's insane yeah these are as said like these are all based on the estimates that we can get we don't have the actual numbers that's like and these are still estimates and I and we know that we don't see the ad Revenue so these could differ differ wildly at some point just disclaim still still it's uh from the numbers of of downloads and revenues you can assume what kind of games are live and what kind of U uh is going to which plus 80% of Revenue is so yeah yeah yeah exactly yeah so pretty much half of the downloads go to Angry Birds 2 and if you look at these three games let's take the because they are the M main bread

bringer uh Angry Birds 2 was in kind of a decline uh during 2019 but of course they did get the covid bump bonus so they're back on track and really really stable making something around 7 million just in iips a month so this is super super strong but it's getting really old because it was released or soft launch March 5th 2015 so last month they celebrated pretty much seven years out so the like the their strongest game is already 7 years old then we have the Angry Birds dream blast which is the pretty much match three division uh Pride which was released October 2018 and this is bringing something around like 4 to three and a half million the month still very very stable even during Co so let's see what happens after Co did this game and then we have the Angry Birds friends which is the Evergreen staple game this is really really old 2013 this was pretty much much the iteration on the original Angry

Bird score gameplay with like heavy social and multiplayer Focus I know there's also a browser version of this that I guess is also doing pretty strong really yeah yeah yeah definitely oh nice because it's not here on these estimates that we could see but I I remember my friends playing it back then so I'm guessing but you know you don't have friends you just don't see them yeah we are the only friends you have but but in the revenue you can see very very very clear covid bump on this game on the mobile of course yeah makes this is the clearest of them all so this one is still fairing pretty well and making around one and a half million just on the I uh mobile iips but as said could be much much bigger but what this all means is that the 75% of Revenue of the whole company is being driven by these three big games that the youngest one is already four years old so that's kind of problematic because most of it is in the casual genre that's that's the other problem

and of course we talk about The Prodigy which is the Angry Bird Journey which is currently being scaled up but uh yeah let's see how that how that fars if it can take over the Angry Birds 2 game which is the main bread driver but even if they do that they're still focused only in that one basket in in game design like when you have strong IP like this in casual what's usually the game like lifetime here like you're saying 8 years 4 years like what's like what's the long longest usually these survive Candy Crush is still scaling up that's C cand Crush you know yeah but it's Candy Crush but this is angry this is forever Angry Birds yeah can be can be thread as that forever IP because they created their own gameplay like how do you call the Angry Birds gameplay like throwing birds into pigs and destroying stuff okay fair fair point fair point it's physics puzzle or something like that physics puzzle yeah but is like we we ran some

you know older games with pixel Federation like train station eight years now dig Adventure is well it's very close to well very close to eight or 10 I have no idea I don't remember yet uh anymore and uh and that's without any IP so I think uh you know with Angry Birds IP this can this can be really live for another eight years yeah looking at the chart of even Angry Birds friends like it's still scaling up just by the organic yeah that that's the thing like The Angry Birds too Revenue it's still like increasing I mean there was the bump but now it's the really like growing trajectory yeah for sure so the the only problem I see there is that they had numerous tries at the midcore and they didn't kind of didn't because it's not easy yeah it's super hard course super hard casual to especially that if you don't have people with expertise in the genre in their company exactly exactly it's super hard so what I'm guessing will happen this year uh based on their already the acquisition of Ruby which is the high hper casuals company which which adds up on this kind

of a problem that they already started to diversify towards different gen way is the other way around go that they will build uh or they will acquire a midcore studio or a midcore game probably so that's my guess cool I guess U that's a really nice segue to uh jump into UA that's nice yeah last bit last bit to the production um portfolio that they said reading on the interview with the CEO he said that also looking into blockchain but he's not that really keen on doing blockchain especially with Angry Birds at all but he mentioned that they have a project in development that's not Angry Bird's IP that he cannot talk about more of but let's see okay yeah I I can't imagine uh Angry Birds going blockchain after the whole Ubisoft shenanigans that happened you know I don't to Val Val to risk exact exactly yeah yeah exactly as I mentioned already the theber 2 is growing but I want to say one thing I do see on the on the LinkedIn really

high fluctuations in terms of the the people from roio leaving and going to smaller companies so if they want to master the the midore yeah the the acquisition of the gaming company I think that's the only way right yeah publishing is pretty much dead in these times so I don't think so that will work that much so is either like you buy a whole product or don't know if there's any other way yeah all right let's try to uh to comment on the on the UA part of the whole equation with Karina here just trying to uh to comment on those as well so basically Angry Birds 2 the the biggest game and the the longest life they are running a lot of uh a lot of UA on on iOS and and Android although what was really interesting to see from the from the analysis I've done it's like uh all those tools are just trying to um to show that they are scaling

really big on on Google UAC on iOS which really don't make any sense so I'm I'm wondering if the tools are wrong or um there is something really weird happening on the in terms of the UA uh explain to us mere mortals why scaling on Google the biggest ad Network in the world is a bad idea it's not a bad idea it just doesn't work that much I mean uh you since the the at happened since the at happened uh the iOS traffic is uh almost de on on Google there's 5 days delay of conversion data you can't run tias campaigns which is the most valuable optimization on on Google you can do on Android and you can't just do it on on iOS there is the beta program for like a really very small handful of developers that you can that they can try but it's just uh impossible to run um very well let's say

profitable spend on on iOS these days on on Google UAC it's really hard because again you need to wait five days for the for data and then uh the traffic is just shitty especially on iOS on Android very different story very different story it works like a charm yeah a little bit of the of the hustle with uh with my daughter here but yeah well she doesn't like the iOS uh traffic as well on Google so I I I can't blame her so uh the biggest channel is is Google for angry birs stage make sense because usually what you do uh you start a game or Global launcher game you launch all the all the the money to to Facebook then scale and then diversify but in this uh these days you D diversify even in soft Lounge but here the the highest spending is Google then you have Facebook Vango unity appin and

and there is Al also Twitter and at Colony so Twitter is really funny because uh well I don't see any games in in the whole universe that can get a good results on on Twitter and I think uh this is what happens this is like an experimental ad Network um and I saw very small amount of of spend go goes there but if you want really to to drive um and scale these type of games you need way more ad networks way more ad networks and vangle yes but still this you need iron Source you need Tik Tok there there was some level of spend on Tik Tok as well but you need more you need more to drive these uh these older games and scale them and grow them I mean you can you most probably reach a plateau but then when these all like the new channels emerge like Snap did like a couple of years ago and then Tik Tok you

need to be there you need to be there and just spend money and just make it work it's not like oh well we try Tik Tok it doesn't work well you're Rio what the man make it work make it work that's how that's how how you should approach all of these like new channels like yeah oh well this doesn't work well look who who else is better suited for making these type of uh type of games work on the on the networks so uh Facebook as well I mean Facebook in general like it sucks these days so uh I uh I get why the the Facebook is not that big on on Angry Birds that much at least from the from the tools that we saw so then we have the the dream blast and again I saw like 70% of AD spent went to Google on iOS again not nothing against Google we have a lot of Google friends also listening to the podcast thank you very much for that but still not that much scalable on and at least in in

my in my experience that this didn't work that well and well H humbly enough I worked with 25 games and you know like two of them or three of them were able to scale profitably on iOS on on Google for iOS there are very different ad networks that you can you can scale the the traffic like Tik Tok like Facebook although I said Facebook is is but I works when you say like make it work roio you can make it work like is that just creatives that you need to change or like what do you mean with that like well look so there's always a process or a hack or something that you will find out when you work with the with the with the UA Channel afterwards like you spent a million you you have so many so much data you you ran millions of uh different variations of creatives different optimizations different targeting so and there's like on Tik Tok a huge amount of possibilities to do

that so if I if I say make it work then I I say like test everything that is there dissect the whole um UA Channel and just use whatever works and maybe maybe they already did that and uh this is the the result and we can see only like 1% or 3% of the overall spend goes to goes to Tik Tok I don't know but that's my assumption but basically this is very similar for dream blast and uh and what what I can say is that the Google is really interesting uh interesting there but it's not it's not growing anymore it's it's stay it's plateaued and it the revenue decreased over the last couple of uh couple of weeks and the downloads are very close to zero so basically since they launched it looks like it's it's slowly dying which is very interesting because well if this is one of the three games that are making uh the whole 75% well uh there's there might be something wrong so uh what would you do what would

you do then if you're anointed you know the UA keys to the kingdom the thing is the thing is uh these days you don't have so many options uh besides the the UA channels and then I what I don't see in like across the whole portfolio of the games any fake ads or fake is ADS which is absolutely which are absolute Killers for dream games Royal match and then well basically plays that's how you grow I mean that's how you grow even though don't you think this is against their strategy when they're pushing like Netflix series and like C mov that's what I wanted to say I mean you you you can try to fight this with brand recognition but that's going to cost you a lot more in terms of the Investments and it's a long process obviously if you are aiming for long uh long-term goals long-term kpis it make sense it make all

the sense so uh that might be uh what we can uh that's what we can see here perhaps because they have the they have the new movie on oh sorry new series on Netflix now yeah believe so yeah I haven't seen it personally but yeah y me neither I haven't seen the movies angry but Summer Madness uh this summer 11 minute episodes if I get like those are really kind of universal because if I get it right there no speech or anything kind of a you know Tom and Jerry like episode so super super approachable so how do you think this kind of affects their channels uh to certain degree like there very similar to the like the TV spots uh if you run the TV campaigns so it's it's a brand awareness that's it but TV series or TV show on Netflix how can you even measure that I mean you can see it in the annual statement right it must be part of that like 3% licensing right that's the revenue impact they're having on the company but I guess the brand

recognition you're talking about like there's no way of measuring that right and you you already said nine of 10 people already knows know Angry Birds so how what do you do like nine and a half people so basically the best thing you can do is fake ad no no no no no I don't yeah the best thing is just uh you know diversify the UA portfolio even to a bit wider because now it's it looks like the whole UA on the campaign not campaign company level it's like five networks like it's vangle always Unity always Google Facebook and then some something else here and there but just that's uh you know that's not enough it's so enough they they you need more need more they really need to find their Empires and puzzles like Zinga did just in a small scale that would really help oh but you know for the for the angry birs Journey so basically again this this was Global launched very recently and the Facebook is a super big

spend makes total sense then we see Google Unity vangle again again four four of these and then you have iron Source there okay great but what about that other channels what about other channels why why don't we see there a Tik Tok Snapchat whatever else yeah appin again it's uh so so much more you can do and this is the pattern that I see across all the games that uh you know that's uh that's are live which well I mean we are almost at the end of the live games that are they are just spending a lot of money because like you said yakob the the journey angry Journey it's it already picked so I mean what was the global launch strategy I mean there was a certainly the the there was yeah what do you think that was a good Global launch strategy yeah there you go so they're definitely featuring but then uh then the the number of

downloads definitely stayed the same yeah I think the like one thing maybe that we missed that we didn't mention here is that uh for instance every subsequent Candy Crash had the lower Revenue run than the previous one and the first one is still the biggest that's that's to be said but here the pattern is a little bit different because the first angry burst that they released remember those were still the ones for 99 cents that was not a free to playay game premium games yeah that's why Angry Birds too really is killing it but now comes the part where the diminishing return return kicks in yeah Angry Bird Journey right yeah because Angry Bird journey is pretty much the same formula so if I understand correctly this is the part where the second game cannot overrun the first game because now we're in freet to-play world not in the premium one anymore yep very true very true but then they tried to they tried to diversify the the games and now going to the puzzle genre and the match three right

with the small town murders which already looks like it's uh it's not getting any traffic since what last year September October but the revenue is there still yeah we'll see but but but it's dein I have to say every casual games developer or Studio or publisher kind of struggles with this that if if your main bulk of the portfolio is coming from casual you want to diversify plays also want to diversify King want to diversify there are numerous kind of fail games on their portfolio trying to reach the midcore audience and that is how it is but remember plays bought Hero Wars uh next studio if I get there so they already and and similar thing like Zinga did they said they bought Empires and puzzles so I think they just need to find their good Target to diversify and just bought the studio out yeah because uh the talent is definitely in Finland but it's it's going the other way from roio not to you unfortunately which is completely normal

yeah right it's completely normal but uh you need to acquire some some company somewhere in the world that you that can help you with uh building that midcore uh strategy or could be something something different doesn't need to be midore could be something like simulation or Sports doesn't matter just a different genre than than the normal casual based on the based on the UA channels and the the analysis I did it again like I said it looks like the company UA strategy is always the same UA channels no innovation there there is really not a huge amount of uh different creative Styles or concepts of course there is there is a millions of but there are these missing parts of like the fake ads something that really it's it's new again because what what would you uh expect from the company this size those are the leaders of the creative world like you know you can see all the the huge 3D CGI um Concepts and and videos but

doesn't work that much you know do you do you know like what ra did with uh these therapy um sessions for the couples that was amazing that was really amazing but it was really suitable for the target audience and it was again a great production value yes everything but it was really an innovation in in terms of the the creatives this is something that I'm really missing in uh in Rio strategy and then you know we said like there is the ad monetization and I I I'm pretty sure that you are going to say Felix that they are missing a lot on on that part but the thing is wh don't think the thing is I know uh yeah someone mentioned on well Singler has it on the on the website somewhere that the D is using them which means they can't run that much of like Adas campaigns on Unity because it's not supported unfortunately and based on the

the ad monetization they are not well the level of AD monetization they are not doing so many like Adra campaigns and that's where they're missing a lot of a lot of money because lower competition lower cpis and you can see the the ROI super quickly super fast so you know leaving a lot of a lot of money on the table so I guess uh handing over to you Felix kind of to manage on the bridge here to admon I guess like the main thing also also is that Ro has uh rumored or it's kind of known that they have their own mediation platform and to make ad row as UA campaigns work usually you do that with a company that you mediate with because then they have access to all the data and then those campaigns usually scale quite quickly at least in my experience well the thing is like you use the MMP to get those data in so maybe if if they can well they can plug in their mediation to singular that would work but singular doesn't have the connections to Unity unfortunately and is really powerful maybe well not maybe but for sure it's it's uh available on

Google and uh and other channels but with the like 15% of at at monetized Revenue most probably yeah they're not doing because it doesn't make any sense it could if they increase the app if they increase the the number of uh very nice setup for me thank you m yeah there you go so just uh yeah kind of announcement here before starting the tricky thing with admon is that like without access to any first part data it's kind of hard for me to peer in and make direct calculations uh however I played most of their games uh so I played 21 of their games on iOS and the thing I realized uh is that I only get idfa tracking optin messaging on one game out of 20 that I played so it's fair to assume that means yeah that means that pretty much uh all their on

all their iOS titles they're assuming that all players are opting out of AD tracking or limited ad tracking right so for those of you guys who don't know LH traffic is a lot cheaper on iOS compared to idfa traffic since it's harder to kind of predict conversions so this kind of got me thinking like how much money is roio actually losing Nets by not asking for an opt-in message and just assuming that everyone does not want to be tracked so here we actually have something we can actually calculate so in 2021 like I said earlier overall group Revenue 286 million 14% of that is AD revenue or 41.6 million bit of credit is due here at arovo compared to last year this figure is actually increased by 32% so they are doing some kind of work on ads and that's impressive uh or or they're running more us bent to

get that yeah and without having access to any of their um ad ARP though like numbers you won't actually be able to tell that but yeah very good point so riew doesn't break out ad Revenue by OS in their annual statement so I had to look at data sources and from those data sources it looks like about 28% of users are iOS users so the thing you need to know about iOS user TR most people do is that they're more valuable from an ecpm standpoint compared to Android so even though it's only 28% of users are iOS users I can safely assume that at least 40% of roio's AD revenue is coming from IOS I'm being a bit generous there because I think it's closer to 45 but just leaving a bit of margin of error so 40% of 41 million uh Euros of overall L revenue is 16.6 million then is derived from IOS so having experience working on

casual and midcore titles I know that I can get an 50% opt-in rate uh of user consent because I've done it personally we can get into like the hous and you do that a bit later but let's just for now assume that you can get an opt-in rate of 50% so I looked at the average ecpm Delta between L and idfa traffic in America and of the world so in America on RVs uh L average ecpm is17 and5 and 25 on idfa and RV uh basically uh L traffic is $8 averagely around the world and $9 on idfa so on uh us RVs the Delta between track and non-track is 42% in the ecpm and in the rest of the world 12 and a half so kind of using those numbers we can dig a bit deeper and roio's Geo breakout

in the annual statement states that 66.9% of Revenue came from America and 33% from the rest of the world so I'll just have to use those numbers so assuming that you'd be able to get a 50% optin to tracking uh running the numbers that would mean that roio by not optimiz ing this and even asking if users don't want to yeah consent to being tracked they're losing €2.6 million a year just on this basis alone doesn't sound like that much but that would be 6% of overall ad revenue for roio uh 6.45% and that means about 1% of overall group Revenue just from doing this I was expecting you will say just uh like last time this is G GDP of Bulgaria or what last but I will add this like like 1% of

overall group Revenue doesn't sound like that much but if you had added this 2.6 million euros to the 2021 Revenue that would have brought them on par with their 2019 overall Revenue which was the second highest revenue year ever which would have made the company completely flat and that does make a difference I would assume so like like I got I got to like admit I made some assumptions here like maybe I'm off by even 50% but that would still be half a percent of overall group revenue and like these things optimizing it's not doesn't take well it's still like one one million exactly and it doesn't y just by doing a very little very little right yeah so I got this like from external data uh I'm assuming if I had their direct data I'd be able to find some more things but the thing that I'm most like curious about I

didn't look at Rubio's hyper casual portfolio and but I hope to God that they're not assuming that all iOS users there are L users too because that's like a true kiss of death for hyper casual Studios I'll look into that when I have more time so there's a big risk as well on this because essentially when Apple starts enforcing fingerprinting this Delta is going to get even bigger and yeah then they're going to be Los even more money on their ad Revenue by not asking users if they want to consent so I bit of self critique on like kind of what I'm saying is the first thing that you can critique me on is that like privacy versus share price like basically you know roio is a nice company they're assuming that people want to have their privacy fair point I think but you know you got to remember also that roio is a publicly listed company which means they have a fiduciary duty to maximize shareholders value and like if you're asking for

someone's privacy I in my book that's okay because you're making the user design not assuming something on behalf of your users yeah exactly you're just asking for the the information they can share or they just can decide not to exactly yeah but this would fit with a brand kind of a focus strategy of we not doing fake ads and let's not do also this sure okay yeah fair point I'm just saying like if you want to add like like I've done this it doesn't take that much resources and if you want to add like 2.6 million like Euros a year or 1% of your overall group Revenue by just asking your user base that's in my mind quite worth investigation no like it's it's pretty valid I would say but still uh if somebody from the brand Department kind of consider this to be a bigger damage or risk to the actual brand or IP I think it's I don't think it's if they can consider nobody nobody cares what

they think or they consider you just do the the ab test then do a brand study and that's it and then you can see if if it's really damaging the brand or or something else you know I know this is a big Corporation and it's like oh well I think this is not going to work but this is it's not the world we live in we we look at data and they make decision based on that yeah but we are not in corporations so I I I guess the second piece of critique that someone can say like on this little piece of analysis is like how do you even get to a 50% often rate and like that was like one of the biggest discussion points like like earlier in 2021 and I've done it and basically it's like three things that you need to do and they're relatively simple so as early as possible before the tutorial uh before you even ask for any consent on anything you need to have a popup message that's we found that at least that's supposed to be three lines long maximum that contain like a nice picture it's nice to look at and basically has it written down that says

that our company relies on Advertising data uh yeah to make games uh free for you to use and we promise not to yeah encroached on your privacy but please opt in to allow us to keep making games then you localize that to your top five Goos yeah Japanese like German whatever and then you put it in the game and that will bring up your often rate from like an average where you usually get if you don't have any messaging of between 14 to 18% it will always bring it in to the kind of the ballpark of 42 to 52% simple and it doesn't take that much like it's not hard popup message yeah easy there you go there you go oh yeah I've heard a lot uh last year about these AB testing of the The pre- Prompt windows so this is actually pretty good uh pretty good recipe thank yeah like it' be I'd be super Keen also to see because roie is one of the few companies

in our industry as well that has their own mediation platform and I would be super curious to know how actually that works like cuz you know roio like 600 million market cap and they're making something that you know companies like iron Source have four and a half billion market cap app loving 16 billion market cap and they're focusing on making the best like mediation platform known to man my question is that I would love to know is like is their mediation actually on par with the same level as them or would it be more valuable than for them to Outsource it and I have no idea since I don't know the data yeah but uh is is isn't this like uh data think that you know you don't want to share the data with the mediation platforms and you just want to keep everything by yeah the thing here is like the the main thing right now like if we were honest like most Revenue right now that you're generating derives from biders right and one thing that I'm always talking to mediation platforms

about is like how come bidder like the for example like one bidder is on one mediation platform and better on the other one and I got the answer and basically like biders perform differently because they have different Tech resources on the different mediation platforms it's not the same bidder that you get for Facebook on iron source that you get on Appling doesn't have the same Tech resource and is they're built differently essentially so are they doing the same optimization are they like is the Facebook team giving the same amount of resources to the bidder for roio that they would for iron Source probably not right so yeah I'm just assuming well the thing is do they have the do they have the ability to use the beer if they don't maybe they're even using placement still and then you know that's yeah yeah then very different story but yeah I have no idea about that that's just speculation yeah but we're masters of speculation because this is what 4:00 a.m. conference discussion exactly course the only thing that uh that we're

missing is a bunch of drinks but one time we'll do it live with some drinks huh oh yeah yeah yeah yeah but it needs to be 4 a.m. for sure yeah well uh what's the summary here any predictions yeah what's the summary yeah so there uh so from my point of view I said Innovation the creative site the spread or the the diversification of the of the UA portfolio that much and then uh then what else what else I mentioned yeah I think that's it for my side yeah from yeah and then yeah no no no no no no so yeah the UA diversification of the channels uh then the innovation of the creatives and then the ad monetization and different uh different uh types of the campaigns for the admon you know if you if you can get like more ad Revenue even 2 million is is pretty decent number then you can try and and see how the Adra campaigns

perform you know maybe you can get uh very much or very like uh higher scale than than what you see at the moment from my side it's just basically like let users decide for themselves if they want to opt into traffing put in one single uh like popup message and earn anywhere between one to $2.6 million extra a year yeah I would say uh of course try to diversify uh I guess that hyper casual acquisition was pretty good already and kind of continuing that I guess it's easy to say that oh just go buy a midcore studio or midcore company I would say get in line with there's like 20 different big Publishers doing the same thing so I I'm I'm guessing this will be really really hard for oio uh because they don't have the resources that everyone else probably has or let's say bigger biders are there on the market such as play rcks or Zinga or like all these other big guys so I guess they will still struggle with it so

maybe this this strategy that they're currently running which is trying to publish midcore games from external Studios or internal teams is still maybe more valid because the the check on those midcore Studios that are kind of successful out there to be bought is just too big for them so that's that's the other thing and then I would say continue Innova in your genre because Angry Bird seems to be like really really strong like your own kind of a Gam playay like great move with the Angry Bird Journey like wishing that that goes well but also if if you look at the dream blast that was also pretty Innovative because they did like a physics page match three so I would say sure but how how how did it go no no it's it's the second second biggest game well oh sorry I was uh sorry yeah I confused it with sugar blast no no no no no this is dream blast but but that's the thing that it brought something new in it so I would say be bold and try to innovate like if you're going into this like this is definitely the way to go I know it's easier said than done but that's usually

it yeah at least at least it's not the a advice yeah no I think I think with that note we should end yeah I think so as well Karina what do you think yeah okay uh yeah yeah I think uh yeah that's that's it for for today guys uh thank you very much and thank you very much listeners for your support please share feedback subscribe on uh the Youtube channel and uh Spotify or uh iOS uh podcast as well see you and here until next time thank you very much bye bye bye bye-bye see you we have some time for for the recording because while uh Romy comes back home I think in two hours and then God knows what happens withina so let's see all right [Music]