"Unity's AI AD Platform Vector is Total Vaporware"

[Music] all right I didn't plan on this to be a big [ __ ] ramp podcast this time but holy [ __ ] dude [ __ ] Unity dude and I'm sure all these [ __ ] are say oh my God Eric you're an idiot you don't understand what you're talking about you got this one wrong no I did not no I did not on this particular one all right so Unity announced their earnings and the stock was up like 30% right there was a whole lot of [ __ ] going on and I have to admit I have to admit I have to give bronberg some credit dude the guy absolutely did the look over there type strategy and it and it worked flawlessly so here's what happened they report earnings they actually did a reasonably good job in the seasonably strong Q four right I'll give him that but their guidance was like well below consensus for q1 and so he knew that this was going to happen right like literally like q1 is down 15% year-over-year 15% margins like absolute [ __ ] business

right compared to something like App 11 which is absolutely destroying it right and so the stock from the press release was down 10% that is an acceptable response to that earnings release okay but when they got on the talking points they started talking about this new platform called Vector right and this new platform called Vector is getting launched in the next few months and it is going to re revolutionize the growth segment of unity right so the stock just went through the [ __ ] Moon it was up like 30% or something like that and I have to think that this is the dumbest stock move in recent history like this is really really really really dumb basically I think bronberg was throwing out this notion about Vector to offset the shitty guide for q1 right that is what good stewards of public legited companies will do right and he threw out something there that investors seem to

get excited about and so you got to respect the misdirection it is pretty amazing that is like that is big Company CEO [ __ ] good stuff okay but as I said many times this is a hedge fund hotel right this this stock the hedge funds are trading in and out of the stock constantly this an apple it is like a [ __ ] mess of of shareholders this is not Fidelity tro like investing in the long-term prospects of the company these are like really fast traders that are going in and out of this stock so this was what was known as a technical short squeeze right so there are a lot of people short this stop right and so this like the hope of a new platform coming out um just squeezed the [ __ ] out of these shorts right and and that was the fundamental problem right okay and there also is a huge disconect between the valuation of apple and unity clearly because apple is absolutely destroying it and unity is not so the notion is that this is like a free ride to invest on the less than 0% chance that actually Unity pulls this [ __ ] off right so let's throw the money in because you're going

to make your money back all right there are a couple reasons why this will never work first of all the Chief Architect of this new system was Jim pay who went from Chief product officer in August of 2024 to advisor skiing on the slopes of Aspen five months later right so the guy's [ __ ] out to lunch dude he ain't he ain't helping you this guy was a [ __ ] genius who created Max and he created mopb systems whatever dude this guy's gone Gonzo right and the second thing that's absolutely nuts is that iron Source isn't part of this transition at all they're like keeping it as a standalone product and letting it die on the [ __ ] Vine right like this is [ __ ] up like they are completely sideline these were their Engineers not only that when they did the acquisition they were transitioning all the adtec [ __ ] the grow solutions to iron Source like that was their stated strategy now they're pulling all the [ __ ] back you know and sunsetting iron Source this makes no sense dude [ __ ] it Israelis know what they're doing dude

stop it right and not only that like even from a functional perspective if they're not investing as much into iron source that is the Lion Share of their revenue associated with the growth segment so if they're prioritizing that the revenue drag from that is going to be pretty significant right and the other most important thing is there is not one [ __ ] person in the entire deconstructor fund Community that's ever even heard of vector right Vector is total vaporware right it is completely not been proven not been tried right and so like we have no idea whether this thing is head so and I think fundamentally the problem I keep hearing about Unity is that it's garbage in garbage out they do not have good data right so if they don't have good data they can't create a good system right and you can't get good data without a good system it's impossible right it's like the Chicken and the Egg thing so it's not much they can do to compete against app Loven at this stage of the game and then again they are hopelessly outmatched by app Lov and not

to mention like Facebook and Google right and I'm sure Adam at app Loven was like [ __ ] laughing out loud when they met they they announced the vector thing right it's like who are these guys right so I just think App 11 is fundamentally so far ahead that they can't catch up why this may work Jim Payne in his femon tenure may have had enough impact to get this thing off the ground right and let them carry the torch nonsense that's not happening right I will say from a marketing perspective Vector is a [ __ ] cool goddamn name I'll give him that dude that's so much better than Max Adam eat your heart out dude Vector is dope absolutely dope I love it right whatever marketing genius came up with this [ __ ] they should get like half of the two billion dollar market cap that just they they just increased so technically axon 2 is the UA platform and Max is the mediation platform so it's Max and level playay vector and axon too okay sorry yes no that's fine um number three

I do still think that there are numerous people in the UA community that want app L to get knocked down a few notches right I think they feel that apple is extractive of the overall industry from a margin perspective like they are collecting the majority of the margin on UA and so they are will be willing to try new systems to see if they can get the return on investment that they are getting from Apple so there will be some kind of impetus to try the other thing that I think from a stock perspective if you are so inclined is that the early metrics actually might be good right because any new system will actually potentially have lwh hanging fruit however what's going to be really critical is scale and depth right and this may take a while to prove out as the system again has been not proven at all so like no one knows like if this thing is gonna work I guess another thing that kills me is that why would you spend so much Goddamn money on engineers in California in San Francisco you know how much money are you throwing

at these people to create this [ __ ] you know like it's like really there's not a better way of doing this I don't know I don't well I don't know enough about this like the technical side of it but yeah it's gonna be a be a challenge well thank you for giving marketers credit for making a great name although that was pretty funny for me that you called that out so I was actually a little bit confused when I heard that name and I was like well but you already have iron Source like so why wouldn't you upscale or you know do a 2.0 or iron Source AI like why and I guess they're just trying to move away from the old business and you know they let go of the the folks that were that created that and were running it and maybe they're just trying to like completely Rebrand and say we have something brand new and we're building this from scratch but so here's what I thought was really interesting when I was reading about it you know quote Vector is designed to leverage data from across the unity ecosystem integrating self-learning artificial

intelligence models that will provide deeper insights optimize performance and deliver better results for customers said Romberg so what exactly is this magical data that the unity ecosystem is learning from so I I just did a little bit of digging because you know like not that I'm a privacy nerd but I was like hm it feels like going back to Google Maps and everything that Google gives us for free it's like you give up your data in order to get these free services so it does feel like there's a crap ton that they're pulling from so that privacy safe you know quote Unity ID is going to follow users across the unity ecosystem of 70% of the top 10,000 mobile games run on Unity 2.5 billion devices have Unity installed games and it's cumulative installs four billion ma across half of mobile games you know this is Unity is the engine that has all

of this with the unity ID so then you think about what iron Source brings programmatic demand access to 230k apps in the unity exchange which is you know the rtb at scale creative AI they autogenerate thousands of AD variants from a single asset mediation from Level play manages competing ad networks in real time are they borrowing that data or is Vector going to learn from that data so it's a lot of data to train on I know you said garbage in garbage out but you know there is a lot of data in the system because of the unity engine and you know all of this is rolling out they said q1 so we're end of February so there are starting to be some tests but it's going to be months and months and months before this learns enough to even have a hope of catching app loven's axon 2 so I think um it's nice that they're trying but it's going to be a while there's two points that need to be made here first point is this is that they do not collect data from the majority of

their customers like the notion that if Candy Crush is using unity's engine that they're going to get the data from Candy Crush is a complete fallacy it's [ __ ] [ __ ] right there's just no way that third parties are allowing them to collect data on their customers period end of sentence right even the company keeps saying this sure I'm sure there's certain companies that are doing that right like the small Rinky Dink Ops right and if that were the case honestly they've had access to this data for decades right so why is it now that they're finally like unlocking this it doesn't even make sense he actually said this in the CEO said this in his press release it's all [ __ ] right and the fundamental problem is what happened is that they zigged when they should have zagged right when Apple started doing idfa they assumed that that fingerprinting was not going to be allowed and so they zagged away from fingerprinting to find other ways of trying to identify and track customers data right and that was the wrong move App 11 went straight for fingerprinting

and they won right and they built systems around that and built a [ __ ] huge moat of customers and access and data that has led them to the leadership position that they have now and so now Unity is trying to get back to the fingerprinting as is Facebook is doing it as well and so like they're literally hopelessly behind is what the problem is right and so maybe this new system will help them get there and be competitive it's still unclear but it's doesn't seem very likely at least at scale on a side note it just came out this morning and I just had read through it briefly but fuzzy Panda reearch great name talking about naming fuzzy Panda reputable exactly they they they wrote this like scathing like short report similar to the report that was written about Roblox a few months ago alleging that APPL Corporation engages in unethical practices to drive its Revenue growth the report claim is that Apple's

AI platform is involved in ad fraud by manipulating ad metrics employing deceptive advertising techniques killing small babies etc etc etc so anyway it also highlights that the appl's tracking of children and serving inappropriate ads to miners like they had to throw that in there right they had to throw some pity [ __ ] bullet in there right anyway this reminds me that the whole [ __ ] adte business is a dirty business from the get-go right like this is a [ __ ] shitty business you know and so these guys will sell their mother's kidneys for a buck you know it's like no one is above board in this system right Facebook Google Apple like it's just it's it's gross right so anyway we will see what what happens with this Apple stock was down as much as 20% today because of this report I think it's much to do about nothing I think these are just normal practices of this shitty [ __ ] business but like we'll see we'll see what happens with this all right all right okay

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