two & a half gamers session #54 & Eric Kress - Everything is dead & new frontier of game development

[Music] okay welcome everybody no [ __ ] gaming podcast two and a half gamer session number four 54 okay so we're sharing action of the insights dropping Knowledge from our day-to-day user acquisition game design and AD monetization jobs definitely not discussing the latest industry news but you're having so much fun still let's not forget this is 400 a.m. conference discussion Vibe let's not take it too seriously and today this is a special episode again we have a special guest so we have the Mr Eric Chris thanks for coming welcome thanks for having me it's it's an honor to be part of the crew right yeah so yeah we just found out that Eric doesn't know about yakob that he's on the podcast actually so we have yakob REM we have Felix B and myself my this is great yeah you can you can

like a short intro to to Eric so he knows who the [ __ ] are you um I do game design product stuff for like uh eight years now started in the industry because of VR because that's my PhD in Psychology when I was doing VR and then pretty much switch into game design because game design is basically psychology so pretty easy transition all right well give me a few games that you've done that I would know uh battle Legion I work on that yeah along yeah maybe all right so you're like you're like a legit game developer you're not like some person pretending no yeah yeah he he's done some stuff at least in the past I work on Battle Legion pretty much even before Global launch for like four two two years with guys in Tampa Finland got it what' you do for VR uh it was like first uh at the beginning of the trend we pretty much work with oculus we the

prototypes and did some kind of experimental a port like game called collab with like five hour Puzzler and then we need to switch it to Samsung Gear VR because of like the market broke down on like heavy VR devices then and it broke down even more later down the line but yeah it was a interesting trip there at the VR Trend all got it shifted right back yeah makes sense VR is kind of dead or dying again seems was it ever alive oh it was alive for a moment dude I the Facebook dude just put out bring out the respirator you know and the paddles Bo boom boom boom you know spent billions and then what now it's dying again you know yeah well yeah this episode is called Everything Is Dead and everybody lies we're starting off good yeah yeah pretty much let me actually start off with the first question then we can just Kickstart it like Eric uh this glass right here is it half full or is it half empty well if you're referring to the industries that we cover

uh I would say mobile is basically all the way empty and console is almost all the way full how about that that's that's been my like thesis for the last 18 months and I think I'm sticking with it for the next 12 to 18 months until we figure out what the [ __ ] apple is going to do and Google and uh and yeah and how how how Publishers are going to respond so yeah no I think Mobile's in a [ __ ] is a [ __ ] show right now um and that should continue for at least another two years so it's tough Market okay but the the main question is like what the fu you actually do on a daily basis nobody knows you do Eric ex except yeah except being on the podcast deal so I was actually preparing something for the uh Istanbul because I'm doing the keynote for stimle for the Google deconstructor of fun event um so I gave some thought as to how to introduce myself at that event but I think I'll probably do the s a similar thing right now it's like one thing that's unique about me is that I I am a

pundit for the industry but I don't really give a [ __ ] what does well and what doesn't do well right my job fundamentally is to be right more than I'm wrong right that's all I have to do if I am right more than I'm wrong I make money for my clients right so my clients I generally are hedge funds that trade the publicly traded names in the space you know uh EA Activision take two whatever Unity Roblox whatever and so I'm basically advising them on what I think is going to happen within the market what products are going to do well what platforms are going to do well yeah who's going to succeed who's going to fail and and just the overall dynamics of the industry itself and I pride myself generally speaking on being very good product person like understanding what products are going to be successful uh but also the reason why these products are going to be successful um so that's basically what I do and then I also do Consulting for um industry so for Warner I did it for the

last three years uh doing product strategy for both mobile and console and I did that for cabam and I did that for EA so I've been doing this stuff a long long long long long time and uh and that and that's kind of what I do and so the the big fundamental thing I want to get across is that I try to be as objective as possible I I I I have very strong opinions but they're not like set in stone and they change based upon the circumstances of what's happening right so and but and and to be clear I I don't give a [ __ ] about mobile I don't give a [ __ ] about console I'm just trying to make the right calls here all right so that's that's that's what I'm going to that's how I'm going to position myself at this point okay nice oh yeah by the way the the DF Istanbul uh it's happening next week well I'm going to publish this on Monday I guess so it's this week uh so yeah meet us all there G to be there Eric is going to be there Felix yob me as well I have a I have a talk as well about idfa and iOS it's going to be a lot of fun oh yeah yeah we will get there we'll get there so yeah

definitely go ATT 10 it's going to be the event of this year really and last year was amazing really good now it's now it's even even bigger so yeah just register I think they're yeah they're more than doubling the capacity this year uh because less less Co restriction so yeah it should be a pretty amazing event yeah oh looking forward really and East tble is amazing Place uh so yeah register now maybe Mish will let you in depends yeah okay so uh so yeah what are we talking about so mobile is dead right or like how how does that look like you mentioned it's it's kind of shitty but is it though still 2. five or six billion people playing mobile games I you know I I think look mobile is a huge industry and it's always going to be a big industry right because everyone has a mobile phone so there's it's not going away anytime soon and it's just big right

but um but I think it's just kind of going and I've said in the podcast many times it's like a Ragnarok right now because everything that worked before doesn't work anymore true right so for the last 10 years I've been saying this a million times we've been optimizing around UA Arbitrage and targeting Wales and that is no longer a viable option right in in in many ways really yes and apple I think in general destroyed the UA market for no [ __ ] reason besides Ides uh to promote and Market their mobile phones right so privacy as they Define it I don't think really the consumer G cared that much and it even with the with the idfa back then I don't think that was like I I think that maintained privacy to some degree right anyway I don't think that was an issue you don't think they did it to like apple search ads to get that dominance no I I really I I I think that was a an after effect of it but I think the fun Al this is the way I've been

looking at it and this is the way I've been talking to a lot of people at Apple and others is that like it's basically the six people at top of Apple that run that company everyone else is just following right the tail wagging the dog type thing right these six people said that privacy is going to be our marketing message and you see these [ __ ] huge Billboards on 101 and all over the world saying privacy privacy privacy they want to sell that vision and what do they do they say okay well let's remove the idfa the unique identifi that can that can that is supposedly keeping you private right or keeping you unprivate or whatever and so all it was was a way of selling phones right to differentiate themselves from Google by removing something that was like absolutely necessity for Publishers right and these six people know [ __ ] all about advertising or UA or publishing or gaming they don't care about gaming at all like none of these like big tech companies care about gaming at all right all they care about is their their

corporate strategies and that in that sense their corporate strategy was to beat Google to the punch and and and create a great marketing message around privacy to hell with everything else so they make these changes and it's pretty evident that this is the case because it was so hamfisted how they did it right it took years for them to figure this [ __ ] out then they threw this thing out there and destroyed it like overnight like dude they have smarter Engineers than that I think I don't know you guys are the experts on this stuff right and it's because none of these guys like this app store guys the anybody that has to do any like interface at all with Publishers had any idea what the hell was going on right they were just like waiting for the on high to get this communication and so anyway my my my my my big point is that like again they don't care about games they put this thing into place and it it's basically completely upheaved the entire industry in the West in particular right without user acquisition which we've been optimizing for the last 10 years it is freaking going to be a very very very

very challenging market and what worked before is not going to work going forward that's kind of my whole pie soer no no no I'm not triggered I just that's true because what H what was working before it's not working anymore now and it's not going to be uh working anymore that's true everything else is like you know you can still kind of Target Wells but it's uh it's definitely difficult and everything moved from this um deterministic attribution to probabilistic whatever scan is here and you can use it and you can use it well and if you use it well then you can actually Target whoever we want it's just you moving the targeting options from targeting wells in lookalikes interest whatever to actually even the base targeting so whatever events uh the players are doing in in your game you can track that and send it over back to Facebook Google Tik Tok Unity whatever it's not easy it's not easy to figure it out it's of course it's hard but then like you know you need to work with with thect to actually make it happen and of

course with big companies it's really hard because they're not flexible they're not agile they can't do like a lot of AB testing on the day one monetization that's true that's why like that's how and why the like smaller teams obviously like win on this like iOS landscape because they can change all the things very easily well not very easily but it's easier than the bigger companies so it's not that but it's hard and it's not going to get any easier any easier well yeah and that's that's the other challenge is like yeah this is is only the beginning right so they remove fingerprinting Google does whatever they're going to do which is happening imminently um Fidelity is just going to be removed from the market right like you I mean even you who are I know have been relatively POS yeah you're like you're like Kay we'll all figure this [ __ ] out type person you drive me insane by the way clear on this right but but like but even you have to admit the Fidelity has been deteriorated just by what's happened so

far and should we continue deteriorated going forward right so we are in a shittier position now than we were a year ago and we will be in a shittier position six months from now than we are now 100% yeah it's not going to get any better of course but it's it's going to change it's going to change also like now the scan 4.0 it's going to change it's still like super big uncertainty about the the whole scan 4.0 I had pretty good uh actually talk with the city of Singler about like what what's going to change uh with scan 4.0 when is that going to get implemented by the way so it's adaption rate yeah so adoption rate right now it's 40% so as soon as the 16.1 iOS version came out the scan 4.0 was attached to that so now it's like 40% of people are actually having the 16.1 so I guess like 80% of adaption rate will be like three or four months so do you think that would then they're going to go after fingerprinting after that yeah probably yeah months the fu

happens Source unity and and app a [ __ ] toast right I mean like what happens to those guys like their all their advantages goes away I can tell you I can tell you on the iOS side like all these companies are doing finger printing 100% the ecpm Delta like ecpm Deltas are so tiny in some cases in the US and it's just maybe plusus 133% you're like yeah there's definitely fingerprinting going on there me dude they they are just posts like their stocks are already down like 80% like it's going to be just I mean you talk about Ragnarok like app Lov and iron source and unity are [ __ ] right let's go let maybe let's let's take the conversation there because you've been very Mo like vocal about unity and up loving like uh I've been dead right I've been dead right you've been dead wrong Mr M I I [ __ ] have been dead right about this right I mean come on how I wait wait wa wait can we can we just bring it back can you please just explain from your perspective like the story that they're trying to spin and basically your

perception of what's going on just so we get like both sides here okay let me just F first by saying that uh plka plka just announced their earnings right yeah and they basically finally said you know the secret out loud right like it is impossible to bring new product to the market right and what my point is and my point is has always been is that app Lov iron ource Unity Zinga they have been gaslighting the entire industry and also investors on the impact of idfa since the very beginning right they've just been bullshitting their way around this they're like we're smart we'll figure it out this is like the matay version right wait wait we're all smart we're gonna figure this [ __ ] out right or you know we have other alternative ways of distribution we're gonna go direct to Consumer we're going to build our own attribution we're going to build this and even Eric cir with his content Fortress [ __ ] right none of that it's gonna work if the fundamentals of

of UA are [ __ ] toast right so finally plka comes clean and says exactly what everyone's been saying it's impossible to scale new games in this market now it's impossible for them to scale new games Market of course the big companies are [ __ ] of course Sor I I will concede I will concede one thing to you what I fundamentally think and we can get to this in a moment but I'll go back to app love and iron Source in a second but what I think for is that the the way people make games has to change like the industry has to change about how what what games are made right that that and and to your point that is much harder for bigger companies so I agree with you on that point but that that doesn't change the fact that like 80 70 to 80% of the revenue is being generated by Social Casino puzzle strategy and RPG which basically are freaking toast right absolutely toast from perspec if you look at huge they they've been in like growing in the last couple of quarters as well like go their social Casino apps G let me give a like a let's

sayy wake up Mr yob here as well wel welcome to the game like the I think like this whole thing is just kind of upping the stakes or what you need to do on product rather than on UA because UA is pretty much becoming ad up or die like we talk in like our previous podcast here that creative strategy now impacts the game themselves like let's say we've been covering games that they're doing pretty fair in in Market like godes n 84 million in a month what do you want ever 15 million in seven weeks why not frozen four and a half million in a month like where's the problem there and all of these games are pretty much improving on their product design because they're creative strategy is directly impacting their product design it's just that as you said like yeah games won't be make like they were before of course they won't but if you if you don't adap you die that's easy I I don't I don't see a problem for these companies making money in the current market and everybody else whining that

oh we cannot do the easy thing like we did let's say with machine z may we just reskin three times the same game with [ __ ] big UA and make money any okay but here's the challenge with that that assessment of the situation right is that I think you guys are right I think small players sorry I think this is a big opportunity for small players to actually make a huge impact in the industry because they they will innovate faster than the big players I I do 100% believe you but if the overall Market is shrinking because the majority of the revenue that was generated for the big players continues to decline that is not a healthy market right for investment like VC investment Equity Investments interest from investors period right so it's gonna be harder and harder to find funding to do games when the whole Market is in Decline like that's the way the world works unfortunately right even though these pockets of players may actually do quite well in the space but if you look at all the traditional Publishers supercell playrix plka Zinga scopy EA Ro Roblox even well I don't Roblox Mobile

is a little bit off a little bit but big fish all of them are down like 20% year on year in 222 right it's not like there's no one that's hiding besides King you know that's also the coing bump pretty much yeah that's what I want to say like this is like very unfortunate situation because like covid ended like now it's the the situation is terrible economic whatever [ __ ] and then then you have all these excuses oh idfa you know they went away now we're [ __ ] because Apple destroyed us I 100% disagre I 100% disagree this has not this there is there is a a tough Co comp I I'll give you that right but that happened much earlier generally speaking and then also the market was growing at like a 20 to 25% C average growth rate and it was down 10% in 20122 right that that's a 33% swing right that is not just covid bump because the the growth was actually relatively similar to the years past in the co it was up like 35 versus 25 right so fundamentally the market has moved

down 35% in in in a year right and that was right on the on the cusp of of idfa and what what what what I've been tracking from a quantitative perspective both for app an or sensor Tire whatever the [ __ ] you use you know and if you look at the US market in particular to isolate it's like the the downloads are down right downloads continue to go down right and not only downloads are down but yields are down right if you look at overall Revenue divided by overall downloads yields are not growing as much as they are because not only are downloads down but the quality of downloads are down right that's that's kind of the interpretation that I see and that should continue if we what you're talking about is true you know if if Google comes out with their thing and and and and they remove uh uh I um sorry uh fingerprinting like it's just going to get worse and worse and worse for these these games in the marketplace and new games that are similar to what's in the marketplace so I think like

everything that's similar in the marketplace going to die anyway because the whole the like let's clone the thing and have something similar won't work anymore these days it it worked before but not now yeah yeah because now we are we are talking about the game these games like f as farm when you have like basically free games or game core Loops or game Loops or whatever vectors you always talk about the one in one game yeah core gameplay in one game so that's like that's when the where the gaming compan going to move yeah but it will take like more time to actually develop these games because it's uh yeah you have three games in one and then you can you can use all those core Loops in creatives because that's something that works and kind of like decreases your CPI to certain extent and that's how you can actually use that in like on iOS maybe depends on the your monetization strategy but also like the the Google thing like the Privacy sent Bo is going to change like they kind of still are in slight different position than iOS

because they're actually working with developers to make it more developer friendly nobody knows let's see let's see but the big question is going to be for them how big the nodes are going to be right how many people are going to get bunched together like for the UA campaigns right that's a big question that no one knows what what did you say that's what they're going to do right like they're going to be like grouping users together and you're going to be targeting them like as groups of users in individual noidea I have no idea no IDE that's interesting I that that's what I've heard that's what I I'm not I'm not as I'm not as close to this all I know is that I was confirmed that you know Fidelity would be greatly reduced that's all I know that's all I know and so like that's all I need to know really from my perspective um no thing is like how I how I look at things now it's just like what yakob said is it's not going to get any easier because you don't go the easier way anymore clone things use whatever worked before on the UA side you need to be very much like Tech savy

or creative or try try to find different workarounds that's that's something that's going to work but it's going to be super hard of course and if you have uh teams with on UA teams in big companies they they get these bonuses on day seven row as well of course well if you don't know how to actually measure the day seven Ras then [ __ ] it they are going to spend the money on the Android rather than I because where's the actual problem with this like old old companies that don't adapt going to die and new compan is going to rise up like where's the problem no the problem is that what what I think you guys are inferring is that you're going to basically replace all these High monetization games with low monetization games right so you're moving users from strategy games which make like you know on average like 25 $30 per user and then you move that that same audience to games that make like $5 per user that's like not a good thing right and if you can't Target these whales with the games that they want that they're willing to spend $25 per user then it's going to be

impossible for the industry to grow right it's just get more casual that's going to happen like do you think godes n doesn't have atrociously high rpu for that 84 million a month like I guess the da is like super low there like they they still like super high per player U Revenue which which game are you talking about godes Nik godes of game4 million a month yeah it's really big it launched in November last year and it's it's growing like like crazy in the west or is it in Asia everywhere Global basically I mean it's majority is Asia but then major Asia but they have like what Revenue yeah I what I would do if anybody's doing an anal analytics around the market I would only use uh tier one English countries or Europe and North America because if once you put add Japan and Korea and China then you just get all kinds of warped nonsense that's irrelevant for the market Jaan Japan's its own beast but uh you know Korea is

its own beast and China is its own beast but it's getting there it's getting here no it's not it is what are you talking about you think Western companies are competing in China dude they haven't approved a western game they're not competing the gaming Trends are coming here from Asia and being adapted no no no dude the the the mechanics are coming from Asia not the games I mean sorry let me let me let me state that back games are the mechanics games can come from China and do well in the West right but those those will be captured by looking at the Western Revenue right but you can't look at you can't look at China revenue and and and and genre Trends or anything that happens in China Japan or Korea and and and glean what's going to happen in the west like that's that's Folly right why not so like you know Empires and puzzles for instance you take Puzzle and Dragons the first game that did 1 billion and Empires and puzzles is what simplification of that game done by small giant now one by Zinga works works like Cham in the West

okay but it's still a game the puzzle and dragons didn't do [ __ ] in the west what Puzzle and Dragons didn't do [ __ ] let's let's take the best game in in in Japan right the the flipping they reiterated it like they add the Forex progression into it as they said but again track that game don't track puzzles and dragons like that game is not gonna do that particular execution is not going to do well in the west but but guess what small giant currently has in soft lunch a Japanese game yeah that's not smart that's that's what I'm trying to tell you it worked for them before why so smart yeah worked it worked really well well they took puzzle and dragons and then they made Empires and puzzles they just exactly yeah how's that that's what that's what worked in the west not Puzzles and Dragons right you can't you don't you can you can design Things based on mechanics and gameplay that that that can translate but like what I'm trying to tell you is that you can't look at what's successful in Japan and Korea like let's say for instance like MMOs right like Lineage 2

which was like the biggest game in Korea for like years right every single every single execution of that game that came to the West has failed miserably because Lage is a religion in South Korea that's a different thing there exactly exactly and so it's Monster Strike Monster Strike from that [ __ ] that stupid Flip Game Dude that game didn't do [ __ ] in the west they still mint money with that game yeah they make 1 billion a year in Japan all the time dude it's amazing but you want to build that you why don't we just build that game for the West oh that should work right right is that what you're going to work on next let's build a Mixie game where you're fing [ __ ] like a check company buildt the game and it was making like half a million a month here and yeah they were required by uploading afterwards of course yes and again bad bad not not a good strategy right I mean are we is that is this in debate right well depends on like uh if some some gaming teams uh even half a million

for them is is kind of nice money uh honestly of course I there's a certain materiality threshold yeah that we have to like work with right I I think for me like if it doesn't make a100 million do I'm not really that all that interesting I mean that's like the bar right I know that's what makes it material for publicly created names right definitely empir and pzle makes 20 million a month sure it's a great game for the West how much does that make in Asia actually that one might actually do okay in Asia so are we done bashing on unity and app we kind of just miss skipped ahead of that and we went down rabbit little bit well I basically fundamentally I think they've been gaslighting industry as well as investors which I've said for for months years forever so for examp Revenue guidance is up right like they increase a revenue guidance for this quarter yeah good luck with that they're going

to fail like they're ultimately going to fail so sorry I don't want to get too deep into this like rabbit hole is like the manipulation on Wall Street about different types of things you like like trying to what I think they're trying to do is juice up the stock so that they can sell it right because I don't think I I think Adam the CEO whatever his name is is not interested in running this company anymore right it's like it's too painful right he knows he's one of the smartest guys in the space like he knows exactly what's happening out here right and and and I think that's what they're trying to likely do is try to get a sale of this thing they're going to sell it for part this was one of one of my predictions is that he's gonna sell it for parts like sell all the gaming stuff to aggregators like still front or embracer who's buying crap anyway right um and then and then and then you know sell the adtec to something else just get get rid of get make KKR whole right because the KKR guys still really fully invested in this so I think that's what's likely going to

happen um but uh I don't know my my my problem with these companies again is that they've been misleading right they've been basically using Okay couple things one they've been using app has been using revenue from their gaming sector as a proxy for SAS revenue for adtech right and that has led them to these insane valuations in which they were trading at like eight to 10 times no I think it was like 20 times Revenue at one point right and now they're trading at nothing right I mean they're basically almost you know in went from 80 billion I think in mark up to like about eight so yeah yeah and they're not worth that right honestly like um so that's one thing so they miss they misled investors the other thing is that it's not really SAS Revenue when you talk about adtech and you guys correct me if I'm wrong here it's like the smart UA people go where the returns are right so there's no like loyalty to a platform right like when you buy Z AWS server or

Azure you're a [ __ ] client right that's software is a service that's sticky right it's hard to move you know that from from one service to another so I don't think adtech is the same thing in that in that way right and then the other big thing obvious the obvious thing now with idfa is that you're not in control of your own platform right like you are the mercy of Apple and Google for what happens to your whole system right that is not a defendable position right because the as I said earlier the platforms don't give a [ __ ] right about you right and so and actually in essence and the reason I got so negative um on Apple and iron source and unity uh like two years ago when I started ranting about this on the podcast is that apple in particular [ __ ] hates these guys they hate them and that's why they and they hate hyper casual and they hate Social Casino because they've lost control of their stores right they've lost control of the traffic to their stores because these guys are manipulating the system in order to like

Drive traffic and generate [ __ ] Revenue right and and and they don't like that and so the fact that that these platforms don't like them that's when they were they were ultimately going to fail right they were going to do things against them and so that's why they're also not a software as a service because they're not in control of their own platform like Google is with I'm sorry with uh Microsoft is with Azure and and Amazon and AWS so um and then the one thing about Unity that drives me insane i Frank John Rell I work with him at at uh at EA for a while the guy is a brilliant salesperson right but he basically claimed that Unity was going to be a platform of choice a 3D engine was be a platform of choice for all things mobile like it was basically going to go to every single vertical in the world would be using Unity at one point no it's not no it's not it's an interactive platform right it's a it's a 3D engine for [ __ ] sake and it's a amazing one but no one cares about it outside of gaming or interactive right

it has no future anywhere else and so that was absolute gaslighting he know that wasn't true but he says it in order to sell the story right and so their Core Business doesn't make sense although that is actually a SAS service right it's a great great platform but it's not going to go to healthc care it's not going to go to auto it's not going to go to like you know [ __ ] banking come on you think like Wells Fargo is going to make a 3D app I mean that's [ __ ] right it's tot little nonsense right but that's what that's the kind of claim he was making during the IPO process which people like hookline in the Sinker believed it but that's just nonsense from the very beginning so do do you have any like if these like three are the ones that you bash on the most or like two now I guess like do you have any Darlings like people that like companies that you're like I I I love Activision EA Nintendo even Ubisoft I think is is is actually looking pretty good right now um what other ones do I like actually I would buy all the Asian names Net 10 cent

right now because I think that they're going to all recover uh and Sony I mean I again I'm really bullish on the console cycle um so I think anything that's related to that epic right I think epic's in an interesting position right now I mean not you could you can't buy that publicly but I like the way epic is is moving in the in the direction of like competing against Roblox with a real like you know HD type uh metaverse thing so yeah there lots of things going on in the space that are positive it's just there's a lot of things that have just been but you're not talking about those no no well like look I mean look VR is dead again right um uh web 3 dude blockchain forget web 3 forget blockchain stuff like d that's scary as [ __ ] right now stick in his heart yeah yeah and then you know ARS is nowhere right um so there's a lot of things that like got a lot of hype over the last few years uh that just are just just not panning out right now uh but but in the future you know 5 10 years

from now when I'm long retired maybe right I mean I VR in particular it's like I think that's a 15 to 20 year type thing I don't even think that's even five to 10 and now I think I think we're just too much technology hurdles there that we still need to solve yeah until you can like plug in from the back of your head or you put on glasses that beam [ __ ] into your eyes you know like there's just no way uh and or or someone creat some like amazing social experience experience that's going to cost a gillion dollars to make I I just don't see VR taking off in any mean way that's a whole other conversation what do you think is the kind of end point where mobile will get to eventually especially if we look at iOS just losing of the using of the yeah like dominance and they basically have to give up the store and side loading well I think there's a few people think talk about people yeah a few things people talk about is uh creating your own store or oh yeah sure getting yeah

exactly getting getting uh you know like Patika and others are es scopely for instance are doing you know uh getting their whales onto their MO web stores which helps like margins at least but they're doing de for years they're doing Deb for years I know and and so you know that helps the margin story but that doesn't help the revenue growth story because you still have to [ __ ] acquire users right I mean anyway so like a lot of these are just meaning um you know helpful in kind of mitigating the issues right now the one thing that is interesting um to me is oh just totally blanked oh the 30% fee right so like I've been railing against this for like forever you know but the 30% fee is ridiculous right apple apple provides absolutely no [ __ ] value get nothing yeah nothing their store is a joke Organics is a joke their services are a joke right we were talking about this on podcast yesterday I was like dude they don't Game Center like what

the [ __ ] why didn't they build something with Game Center they could have made something amazing right that's what that's what Apple sorry that's what uh Microsoft and Sony do on the consoles right anyway they've done nothing to justify that and uh there's a guy Neil long did you know him I don't know yeah we know Neil yeah we know he's out there like like coming clean you know like this Insider has been finally saying what I've been saying for the last like four years right it's like I he's my new favorite right now I'm G to try to get him but um yeah but you need you need to say his his website right because uh he said it's Mo Mobb I've given enough AirPlay frankly um any I'm talking to him tomorrow actually um uh what was I trying to say oh so I think uh I oh so if that 30% is reduced like you know that's interesting right but then again like all the costs associated with like

running your own store and doing all that transaction stuff and then like you know you're gonna likely throw all that money back into marketing anyway because you can't acquire users profitably anymore so it's like is that really going to be a boom to the industry yes but not but it's going to be offset by cost associated with it I think um so the answer to your question is I've been thinking about this a lot and kind of like trying to model it out um as long as we see see downloads continue to deteriorate the revenue is going going to deteriorate right yeah and if the quality of downloads continues to deteriorate then the revenue deteriorates so we see I see like at least two more years of five to 10 Perc declines in the western markets um and then what I'm hoping is that people start to figure out that you have to do things differently and I I'm happy to talk about what what I think they should do differently but like they have to make games differently and that that is obviously what takes a lot more time and I'm sure Jacob would agree with that of course hyper casual mechanics in the like in the on boarding and then yeah we got we got to get to the hyper casual

[ __ ] dude we got to talk about that so we one one yeah one quick comment we don't work with Hyper casuals honestly I don't Z hyper ER I don't give a [ __ ] honestly I of course like the that genre is going to change and whatever whatever worked last year or even a few months ago it doesn't work anymore and it's that's okay hybrid casual whatever may be but in terms of like painting the picture that uh because of idfa and because of Google interstitial policies they are dead it's like it's not only that case like it's just like that's totally wrong that picture is not as as what I would I would say or pay that yeah that's not man the the whisper on the street is that Voodoo is still earning somewhere between 700 to 900k a day in ads so like it's you know still massive revenues so the thing is like the yeah downloads kind of like for hyper casual games um are stagnating for

last year year and a half in us so not they're not growing sure of course but like since Google implemented their policy against these intrusive um interstitials almost nothing changed for the big guys it changed for these like small speculative um developers that trying to make a lot of money in short period of time until they get banned oh oh this is the Eric Seaford stuff right this is not me I don't know I know it's not you I know it's but you always you always agree with with Eric is like oh yeah yeah yeah sure sure sure you don't know about anything about this right say come on why would you agree no it goes back to my original point is that everyone [ __ ] hates hyper casual on the platform side and so therefore it can't survive right and so like which which which is funny because because I I still think hyper casual is terrible business right it's just it's just it's is like is the lowest of the low right you know it's like it's bottom

feeding at its finest right and and AD advertising generally is that way but but but this is the worst right well Felix think the odds are beautiful so odds are beautiful yeah you guys have been in the muck too long you know that's the problem it's like you're just got to wipe that stuff off you know but anyway so if um but what's interesting is that it's evolving right so now they're adding monetization within this and so what's funny is the market is moving towards hyper casual so now so because I think the mass Market gameplay of hyper casual is going to be one of those things that sells well or or does well from a user acquisition P perspective it's going to increase the funnel right so now again moving to that direction however however it's not the advertising that's going to be effective in those those new games it's going to be the monetization so if they add the monetization into these games and have the top of the funnel that's high then those games can be successful I think you know survivor.io is like one of those type of games that may make sense

in this Brave New World in which you can't acquire you know whales anymore there is there is very much no Del lightweight demonetization man survivor.io has spent that of like multiple K like no that's what I'm no that's sorry I miss misspoke what I'm saying is you build hyper casual game or you build casual gameplay that attracts the broadest users and you be you build deep monetization within those games like that's the key to success going forward in in at a high level and I think survivor.io does that very well right yeah but survivor.io is pretty much upgraded version of archero where they just improve the gaml where they cut like the plank spaces there and just go goes on on on but the thing is that it's based on unfolding game playay that's really interesting unfolding gameplay means that it looks first few minutes like a hyper casual then a new feature pops up new feature unlocks so on so forth and they're suddenly 20 bu that that is the lesson that needs to be learned that's what I'm trying that's what I'm suggesting and ironically this

was the same strategy that that that um Kevin Chu had at cabam like 10 years ago right he's like we want to be build mass Market gameplay with deep monetization design and back then I was like kind of pooing the idea I'll be honest I was like look this doesn't make sense given what what's doing well on the market like strategy games Casino Games Etc that are G geared towards whales right that that that spend $100,000 or some insane amount of money on this stuff like I understand where you're coming from from the perspective of getting big better users but that's not where the market was right but now the market is there in a sense because if you can't Target the whales if you can't get these guys into your game then you need that more broader broader net but you also need to be able to monetize those the people that want to monetize right well but the games are doing this from the Bold phase actually whereas here we would start from hyper casual unfolding core where it seems like hyper casual then it entwines into like very very big and deep game but also the other games for instance Forex they are building a hyper casual core on top of the Forex

where they don't show you the Forex core at all for like three days and then suddenly it switches into Forex yeah so yeah we have Kingdom gu guard we have top war they starting basically Kingdom Guardians like Tower Defense and then suddenly after I don't know 15 minutes of gameplay bum you're in the Forex out of nowhere I I I I have to even though I think it's it's and now actually now I understand your question I didn't understand that when I read it before I think that's actually brilliant right that that that is a way to circumvent the problem that Activision has oh sorry Activision the problem that Apple has caused right you know there I think that makes that's the thing that I I I told you in in the beginning that you need to learn this kind of a new knowhow how to build games and those who don't they die and don't adapt that's it yeah you know they're taking a lot of inspiration from the hyper casual actually which is obviously like how you can decrease the CPS quite heavily and even if you don't even if you don't build those hyper

casual mechanics in the game then you can use it still in the in the creatives and even that kind of decreases the CPI quite heavily and you said if you broaden up the the funnel then you have a higher chance of actually getting lot more paid paying users afterwards yeah you can always lie in your ads right M yeah exactly just you're digging deeper into the muck huh just go for it why not uh and then the thing I would say uh from a from a perspec is branding is is becoming more I think valuable than it has in the past like I think Marvel uh the only three games that were really successful last year in my estimation anyway was Diablo Marvel and survivor.io um and and Diablo obviously is a huge brand Chinese Diablo CH yeah that's they're doing but it it actually did well much better in the west than I thought it was gonna yeah okay I I can agree with that but but again the the point is it's a

mass Market gameplay in the sense that it's an action RPG which is actually not as mass as survivor.io but it's still something that's very friendly to people but the monetization design and this is where I was wrong was that the monetization design in the endgame is what is really deep and crazy and I never thought that blizzard would do that now the early monetization is relatively low that's n n is doing that not 100% yeah blizzard had nothing to do with that game clearly um and actually nettis is no longer going to support that game is my understanding so it's basically going to die that's a separate contract if I understand like the latest that that is [ __ ] [ __ ] right it is a separate contract but net is so burned on this like no way do you know that the egos of these Executives the CEO it's like it's like these megalomaniac narcissists do you think they're going to support a game after being completely destroyed and shunned for their major contract [ __ ] off you know they're done um never gonna happen yeah so uh what

was it gonna say oh so anyway um uh yeah Diablo's done well and then Marvel snap is a great example of something else too like these guys um didn't do as much onerous on on a on a monetization design which I think was a mistake but that's up to debate uh but they created more of a mass Market you know card game with a absolutely the biggest IP in the world um and that game's done quite well continues to do yeah I think the the problem that kind of stems from the from the notion that they wanted to avoid being seen as predatory free toplay whatever you know no think they no Felix wasn't happy horrible but but in the even a reward that like it will buy them in the ass later down the line because their card collection mechanic how they're adding new cards into the pool it's like actually going even worse than gacha because you won't be able to ah here we have it's a gacha pool yeah always a gacha pool it's it's problematic but the game playay and the core gameplay that they did there like

hands down like one of the best best games of last year yeah for sure well I know uh okay I mean this just uh kind of nice I expected lot more lot more insults hyper I I didn't even bring up the the the nasty man bun for Mr Fix nasty I watched this today just for you look at this don't just don't don't don't release it please don't release it stumble for you when I see you next week I can't take it I can't take it that is happening for sure I won't be happy until he cuts it all off maybe maybe when he's passed out drunk at a bar in this Temple I'll get out the scissors and chop the [ __ ] off I would end you signature yeah but the thing yeah I that would benefit your whole vibe dude the women would be flocking about the man bun well it's funny because now now when Eric talks about our podcast it's mate

and the man bun guy and the a doesn't even exist so it's it's okay no it's fun I didn't sorry I haven't listen you ever think Ma like where you'd be in your career if Americans could pronounce your name [Music] correctly no but finally getting finally getting there why don't you just change your name for the Americans you know yeah I should I was yeah actually you're good Jake yeah I'm Matt Matthew I'm usually Matthew no I'm usually Matthew the US I'm calling you dude I'm now I'm calling you Matthew from now on on the podcast so that actually works yeah that works better I know it's it's easier but see it's so it's good all right I'm gonna have to well I want to ask one more question to you guys as experts in the UA space so how bad do you think these things get for like uh app Lov and iron source and unity going forward do you think they can adjust or you think they're just just DOA and and do you think their demise

actually helps Facebook and snap or anybody else well snap is dead so we can forget about snip already but Facebook that's going to help Facebook for sure Tik Tok is a big question like question mark because of all the like us fun stuff that is happening at the moment but this is definitely going to help Facebook Facebook is in very shitty position in the last two years it's it's really really bad so I guess this would help uh and in that case like Unity iron Za I mean it's going to look like Facebook is looking now which is very bad okay all right you're I I'm actually a little bit shocked more that we were on the same page of most of the stuff I thought we were going to be arguing a little bit more because again like from the gaslighting perspective I think people were just like ah the things are fine we we'll adjust we'll figure this stuff out but it's been far more painful that's the thing yeah there's the thing like I'm always always I guess more positive on the iOS side than the rest of the the industry but it's like I work with midsize and Smalls siiz companies and they're like they're flexible agile

they can adjust whatever is happening of course like if I would be working with Zinga or Playa or whoever like that would be really really hard to actually turn that ship around I completely agree with that but it's like this doesn't you know mean that everybody's [ __ ] basically but yeah well it'll be interesting to see what happens when fingerprinting gets pulled like that will be an overnight shock and we'll see what happens overnight show not Shock like I I'll the popcorn popcorn ready you need to grab the popcorn that's it no it's going to be fun it's going to be always fun all right guys well we will see you in thisle next week I'm excited should be fun you guys staying at the same hotel and all that we're going to be good of course yeah yeah and uh I think we are going to have like an unofficial game developer Gathering because everybody who asked me like where I'm staying I send this hotel so it's going to be marot most probably yeah most probably yes yeah well I'll be there I think on on Tuesday I'll see you then I

arrive on Tuesday as well yeah Wednesday to Friday so Wednesday I will see you there guys uh this was fun thank you very much for coming and also listeners thank you very much for listening please keep subscribing the podcast is growing like thank you very much cheers byebye bye [Music]