Unlocking Gen Z: Strategies for Game Publishers and Developers

Hey folks and welcome to the Deconstructor of Fun podcast. I'm your host Mishki Katkov and in this episode we're talking about strategies to reach Gen Z audience. Now Gen Z's are born between 1995 and 2000 and what makes them so important and why we're doing this podcast is because this specific audience will be the biggest spenders on mobile in roughly a year from today. Now, who'd be better to talk about Gen Z strategies than to be as Nokia, Google's head of gaming. Now, before he was Google's head of gaming, he had a 20-year career in games, starting off as a games journalist, working then at Google Play, moving on to the YouTube side of things, working with game publishers and creators, and of course, his current position where he's overseeing a lot of different interesting strategies to to reach many different audiences. Anyways, without further ado, ladies and gentlemen, Tobias No and Gen Z

Tobias, is it all over for gaming? Very good question, Mishka. And well, first answer, no, because otherwise you wouldn't invite me here on the podcast, right? But but let me talk, let me give a bit more context on that. So first of all, I believe that all of us in the industry are still struggling a little bit with the impact the pandemic and the lockdown had. And we do not need to discuss all of this again, but just to put a bit of context into it so we are all on the same page. In 2020, there was the whole hyper growth with 20% yearonear in the overall games market. Everybody was playing and because there were little alternatives and then there was that strong correction out there right after lockdowns uh uh ended which I think is good. Everybody was starting to go out socialize again but then there were also more competitions for games like gamified apps apps learned from

games social media and people just started to do also different things than just playing mobile games. the whole user behavior shift and I think that led also to the overall I think atmosphere we had at least in the last two years in the gaming industry where we overthinking that's all over that's it but I think there is still a lot of opportunity in in gaming so first of all I think last year that's just a number from New Zoo 3% market growth again in mobile gaming I think you had Tensor Tower on your podcast recently 4% growth yeah that's little but let's not forget yet that mobile gaming has quadrupled in size. Yes, I looked that up before talking to you um in the last 10 years. So, we're just coming from a very luxury situation. But then at the same time at Google, we thought, okay, how can we help game developers now to grow again? How can we figure out this more maturing, more competitive market? Because I I fully acknowledge it's not

as easy anymore as it was 10 years ago. And to that extent we just went back to the drawing board and looked at audiences. Who is actually playing games and what is the user behavior of those folks? And when we did that we actually figured out that there are some distinct behaviors when it comes to Gen Z. So that is anybody born between the mid90s mid2010ers in comparison to all other generations. So millennials, Gen X, boomers, you name it. And I think there are some insights which I would love to share and love to discuss with you today because going back to audiences is even more important in a maturing market as that's a real growth lever. If we talk about technology or hardware that's enablers that's great but first understand what the users actually want from from you and your game. Yeah that's an excellent point. I'm just going to show the um if you're on Spotify or YouTube. So I got the deck in hand like

the the way where we started this podcast was we were together in Abu Dhabi on Google Move event and when I was getting miked up you gave your presentation and I was hearing half of it I'm like this is amazing information since I can't catch it I need to invite to be on my podcast so we can do a private presentation but but yeah so now I'm showing uh some of the uh the slides from your deck and one is these generations these makes no sense To me, the way they're named, Z, Millennial, X, Baby Boomer, it's like, are they trying to confuse us? Like, can you just talk us through like what do you seeing specifically in Gen Z and why people are talking about Gen Z? Yeah. So, fully agree for anybody who's thinking very systematically doesn't really fully make sense, right? I think there was also Yes. Yeah. For me as a German, I can't compute, right? No, but seriously I think I mean one I think millennials also often refer to as Gen Y and then at

least after Gen Z which we will talk about today I think it gets because then you have Gen Alpha Gen this year is actually the year of Gen Beta the first babies this year will be geneta but let's not confuse anybody even further. So let's talk about Gen Z, right? So let's talk about Gen Z. Yeah. Yeah. Um typically born in the in the mid 90s to to uh 2015 or so. So the reason why my talk was all about Gen Z was that we really found some interesting behaviors with Gen Z. And next to those behaviors we will talk about Gen Z was also showing uh a lot of uptick when it comes to using mobile phones. So from 2020 to 2024 mobile phone usage for gaming was up 9%. uh and that really shows us more than any other generation that for them smartphone is the most popular device. So 82% of Gen Z are playing on the

smartphone and then even more and most importantly when it comes to Gen Z various sources say that by next year they are the largest bending consumer group. So we're not only talking about a generation where we have found some interesting insights. We are talking about a generation which has a very very big impact on future commercial success. Let's also not forget things like the cohort effect. So that the behaviors and habits of one generation will continue to be there and once they get older their shopping baskets might get uh bigger. They might have kids on their own. So I think that is the real reason why we really focus on Gen Z. one, it differentiates to other generations and two, they will be super super powerful moving forward. So, I think it's it's the last last chance to really get on that Gen Z train. Yeah. I mean, you know, we've been also working with bunch of different publishers and they're actually working on their Gen Z strategies. So, this is

like well accepted in the bigger publishers. But can you talk about like some of the strategies that developers can prioritize to effectively tap into the spending power of this Gen Z generation? Yeah, sure. Sure. So, I think before thinking of strategies, let's let's maybe also think about some some of the insights or some of the the behaviors we we have been seeing with with Gen Z. So, one insight was that they are not as loyal as other generations to games. So when it comes to Gen Z, they are the generation which is playing more than three games at the same time more than any other generation. So there's a big big difference between them and millennials or also Gen X. Conversely, a generation which is playing only one game, that's only 20% for Gen Z versus 32% of Gen X. So overall, Gen Z likes to play more games

at the same time. they are really out and about when it comes to checking out games and they are quite liquid between or fluid between new games to try and think that also leads me to my first thinking and this is just my conclusion. I'm sure that there are more out there, but my first conclusion is be aware that Gen Z is playing more games at the same time compared to other generations. And then based on that, think about how you want to react to that. So, first of all, maybe your retention curves, the more Gen Z is out there might get slowly and and or a little bit impacted. And then I think it's about figuring out if you have several games in your portfolio, try to really activate that for Gen Z. Maybe you have an opportunity to transfer them from a casual game to a core game or a different take on your IP. Or at the same time, if you have

only one game you're focusing on, and I know that's that's a gift in mobile gaming if if you can do that, right? Then maybe there's also something about partnering with other developers because this insight that Gen Z plays a lot of games at the same time. That's that's still just there. And last but not least can also think about some re-engagement strategies. We also have some data to discuss about that later on as well. How you just can try to keep Gen Z in your game only. But first of all, they play a lot of games at the same time. They are not like let's say older people who like to stick to their favorite franchise and IP. That's interesting. And like one thing in your presentation I remember when it ended or was it I think it was in the ending you had the ticker and the ticker was saying was basically showing how long until Gen Z becomes the most the highest grossing segment of users on mobile. And that kind of leads to the point that you made that the players are switching between different

games. Is it that they spend overall more than others but less per game or how does that that work? So overall their spend is just distributed a bit more. It's not that they necessarily spend much more there. I think the let's say classic assumption is still rather intact. Classic assumption means once you're getting a bit older maybe you have less time to play but you also have a bit more money to spend. So whilst there of course I would say pockets of success. So there are some very very successful titles targeting Gen Z or where Gen Z is super active and of course they spend a lot in there. Overall it's more like the the overall distribution across games and consequently just on average also when it comes to their spend but yeah there's there's a quite often uh a chance now to to think about Gen Z before it's before. And what are the uh the top media discovery channels to connect with Gen Z? Like I'm immediately if anybody is

younger than me, I'm thinking about Snapchat and Tik Tok since I don't really use either of them. It's the young people that use that. Is that the other case or like what are the top channels for them? Yeah. Well, of course I I need to remind to share with you that that Yeah, but seriously, I mean there's there's YouTube out there and at YouTube we have 500 million um lockdown users watching gaming content every day. It's also the number one source for game information. But no matter which platform you choose, I'm I'm here to share insights. Uh no matter which platform you choose, and there are a couple of of others as well, I think the most important thing is to have a creator strategy because creators is what really resonates with Gen Z. So first of all, they find games or the top uh way of discovery is social media. Within social media, it's video and within video, it's creators. If we compare it to millennials, as an

example, they are more interested in the good old trailers. And for Gen Z, it's about creators, not not trailers. And for that, we also figured out some or saw some very very interesting data basically underlining that Gen Z really is getting influenced by creators a lot compared to to other generations. So if a creator is playing it, the chances that Gen Z would actually uh download a game or try out a game are much higher. So they are 57% more likely to follow game creators versus 21% across all generations or 58% actually would play the game because of a creator more than any other generation as well. So from that perspective, I think it's important to have a creator strategy. And when we talk about creators, I think key is to not only think about them at launch, that's way too late. Ideally, try to

include them in the whole game development process. Try to have them joining early access prototypes and in the best possible scenario, they grow together with you, together with you and your game. So creators are key and Gen Z is all about those creators for sure. To be honest, you've done the creator strategy when you worked at YouTube. Who are the sort of gold standards in gaming in terms of creator strategies? You you're going to say Supercell, so we'll just you said Supercell. Let's let's dive in like how do they do it? I Yeah, of course. No, I would have definitely mentioned Supercell, but I think that again there there are a couple of others I think who have been looking at this whether it's Wargaming or Ubisoft and I think also I know some good cases from small medium-siz developers who would probably not say hey that's a creator program because they do not have the resources

but they just go on YouTube check out who's creating content about their game already who's commenting on it. Can we maybe test and experiment with a few smaller creators and just see how it goes? So I would say yes definitely a gold standard out there is a supercell and we're thinking about how to replicate that success. But what I think is always important is when you look at best practices and you're maybe a smaller game developer, don't shy away of doing your version of it because I think it's all about getting out there, giving it a try and then most importantly, you know, beating the drum for for your creator engagement. The only thing you should never do is stop the communication. Creators want to hear from you again and again. But yeah, you were you were asking me about about creator programs, right? I think the the best thing about greater programs is you involve them from early on. You launch the game together with them and you

basically keep them part of the overall live ops experience of the overall development experience. And there are also a couple of examples and growth stories we are seeing then in turn on the YouTube side. So one example is Yoyona's Brawl Stars. Full disclaimer, I didn't know this creator, but last year we saw him rising a lot. A big growth story on our side, more than 1 million subscribers, German speaking channel, and Yona's Brawl Stars definitely uh benefited from the rise of Brawl Stars we all know about from last year. So again, just just an example how a creator can grow together with the game. All right, let me test a couple of hypothesis because I I I know a couple of things about creator strategies. I've been in the game not two decades, a little bit less, but still. Um, so here's what I don't think works. Let's say you have typically done by big

publishers that are coming in a little bit late with the creator program as they've already set to launch their big game. And so what they do is they look at who are the top creators. They contact their agencies. They pay them a lot of money to start doing the videos. And typically they're launching a new game that is competing with already the game that these creators are streaming. And they're like, "But you're big, let's say I'm launching a shooter." And this creator is big on Fortnite, but I'm launching a totally different type of street shooter. Let's say it's a modern combat shooter. and I will pay these top Fortnite creators to stream my stream or or create content about my very different type of a shooter game. But for me, and they both look like shooters, so I don't care. And I think that we're going to take that audience. And if what happens is is that not only are you spending a lot of money, which is not always an issue for big publishers, but you are connecting with an audience and a street creator that is focused on one game and that's what the

audience watches it for. And when that person starts creating content for that new game, it tends to feel fake. Yes. The most important thing is they won't create that for a long time. and they will create it for as long as you're paying them which typically is about 2 to 3 weeks because that that's that's the amount of budgets you had and then that person goes back and what what I'm basing this on data because I opened up their YouTube streams and I can see when they start streaming another game that is a competitor and the amount is just so much the views are so much smaller and then it goes all the way back when they switch back to their game they were playing. Brawl Star is another example where they would have streamed another game that was just launching that looked like Brawl Stars and then they go back to Brawl Stars and it's 5x 6x views. Exactly. Exactly. For sure. And I think that's that's exactly the example of how not to do it in an Alio world in an alo world where you can plan things. It's very obvious also to the community of

those creators. Oh, my favorite creator who has always been showing things about my favorite game is now talking about the new competitor and I'm I can really even feel how how the creator doesn't doesn't really have passion for it. I do think it's much more interesting to grow this organically and with organic growth, identify maybe also smaller creators who can who can grow along the way, getting them to the studio, having them uh chatting to developers. Again, I think from that perspective, we're talking here about the early game development phase where of course you want to be heads down in your game development. You want to have creators all the time on your studio, but you want to slowly start and see just as with other key stakeholders and and opinion formers, how do they react to it? Because it's just too obvious if you have that big launch, you know, push with paid creators. I'm not saying uh you should not do it. Everybody can do

it. I think it's fine. I think the creators are happy. I think it can of course help for shortterm awareness but I think we are also talking here about the competitive situation we are having in in gaming how challenging it is to launch a game and one way um in this regard is to really think of communities and that includes creators so that's much more organic non-paid sigh from that perspective yeah and you mentioned multiple times growing your creators with your own strategy and this is um again tied to the Gen Z um reaching to the Gen Z audience. Now, correct me if I'm wrong, like let's say you're not Supercell, you're not making billion dollars eida every year. And so, you have to actually think of how you can get to be one day that type of developer and you start pursuing creator strategy. In that situation, what I would do, you know, you as the expert, let me know what you think. Now, let's say I'm launching a type of a game that

is okay, let's take a brawler, kind of like a Brawl Stars type of a thing. I would find creators that are streaming these type of games, but don't have a lot of audience. They have a little bit, it's a little bit growing, but it's nowhere near the top. And I would have I would find several of those, and they might be streaming different type of games of that sort. I would watch their content and say, "Hey, this is pretty good." And then create a little bit of strategy, geographical. I want my Spanish speaking one, my German speaking one, my French speakaking one, my English speaking one, my my UK, my American. So kind of like just like we use with the channels and I would connect with all of those and get them to try out our game, fly them to the office. Game is already in an alpha stage where it's being played and and developed and then get their feedback on the last steps of polish, how we can do it. Kind of get them involved into this. It's not a lot of money, but they would meet the team and would have some fun, go to the, you know, public like like get them, you know, nice swag and so forth. Make them feel that they're not

not only feel they are part of the extended team. And then I would pursue towards the launch with those creators who would be organically streaming this game and they would be actually very positive towards my game and my studio because they're part of the team. Yes. Yes. Yeah. Yeah, you're the expert on that. No, it's it's definitely plus one on on on everything you said and I think it's much easier than going after some very big names, big names which are at this point bigger than the games, bigger than your your marketing budget, right? So from that perspective, it's more important to think about this in a smart way. And uh we we've always been advising game developers to look at exactly that segment you're mentioning, micro creators, however you want to uh classify creators who have maybe 10 to 15,000 subscribers, but actually they could be the ones and maybe they are um

very much in the in the area of of your interest, of the interest also of your users. And then you can convert them to to be loyal to your um your new game. And that can be very successful. And one one more bit which I think is interesting and I just wanted to share this. A couple of years ago when I was working at Google Play and and YouTube, I was actually figuring out together with some some very talented colleagues how big the impact of creators actually is. Because back then, and I think today, that's still very often the case, the overall impact of creators was tracked through a tracking link in a video description, right? You would have a creator saying, "Here, I'm playing this game, and at the very end, please use the link in the description. Maybe you get something for on top if you download the game this way." And then all the game marketeers would would track that that download link. And we thought that maybe there are some people

who are actually watching the video but are not clicking on the link but are still downloading it later on. Maybe just because they were watching on PC and watching it downloading it on mobile 2 days later or just because they are not clicking on the tracking link. So what we did is we worked with a sample of trusted game developers and they shared with us the uh numbers from the tracking links. Then we compared in the same period of time logged in users on YouTube and Google Play because there we could really follow the the user journey and see exactly who who are who are these people who are not clicking on the link but still downloading it. And when we did that, we figured out that for every download through a tracking link, there are four more downloads, people who are not clicking on the link, but just downloading it later within 4 days. So, in theory, you can fix your tracking link. I'm I'm not saying you can you can do this everywhere and anywhere. And

this is a study we've been doing, but I think the impact of creators is always underestimated. And I'm not even talking here about the fact that they can give you credibility. Brand marketers would say brand equity performance marketers would say K factor what whatever right but let's not underestimate creators and and for Gen Z as we talked about the numbers they are just really really key for them it's all about uh their creators and also their friends by the way attention app and game developers are you ready to unlock the secrets behind the world's top performing apps and games with Sensor Tower you get the ultimate competitive edge whether it's breaking into new markets, fine-tuning your UA strategies or boosting monetization. Dive into data like never before. Track global trends across app stores. Analyze market leading inapp purchase and inapp ad strategies and benchmark your performance with realtime insight. The best part, Sensor Tower doesn't just deliver data, it helps you

turn it into action with intuitive tools and expert analysis. It's everything you need to make smarter, faster decisions. Thousands of app and game studios from indie creators to global giants trust Sensor Tower to help them win. So why not you? Start your free trial today at sensortowwer.com. That is sensortow.com. Fascinating. So yeah, so kind of bringing everything together, Gen Z becoming the biggest spending age group on mobile, creators is the number one way to reach them across all platforms. So just for people to understand why we're talking so much about creators, it is like you're asking about channels, we're we're talking about the means on how like not only the channels, but what the the creatives

should be like, if you will. Uh, another really interesting part about the presentation was was this. So, I'm going to show you, well, you should know since this is your presentation, but it's the um it's the uh it's the usage across different platforms, and it shows that Gen Z plays more on u on on pretty much every platform, PC, laptop, smartphone, which is kind of counterintuitive because I would have thought that they play less, especially on PC and laptop, and more on smartphones, but it seems like they just use more devices. Yes. Yes. First of all, it would have been my assumption as well, right? My assumption would have been and there's also lots of market data con confirming that. So, this again, this is one part of of the research we have been doing together with GWI by the way for anybody who's into research. This is a global data set for any data we are talking about and

globally means from Brazil to US to Germany to Japan. So because that's when you talk about gaming and global then you also ask the question is is it is it really across all key market the the first my first thought was also PC console maybe more relevant for uh older generations but it is actually the case that Gen Z is playing more on other on more on every platform smartphone 82% of Gen Z is playing on the smartphone versus 74% uh Gen X this is just the example of Gen X, it's millennials also less. But then also on the laptop, 44% of Gen Z is playing on the laptop versus 28% of Gen X. So overall, Gen Z just plays a lot. It plays not only they do not only play a lot when it comes to the number of games, but also when it comes to the different devices. So from my perspective that means ideally and I know it's challenging but ideally as a

game developer you find ways of how you present your game or give at least an entry point to your game on as many platforms it's as possible whether this is a full crossplatform game whether you bring your mobile game to to Windows PC that is something we are thinking a lot on the Google Play side it doesn't matter but you should be aware that Gen Z probably expects their favorite IP, their favorite characters on every screen. And for them, I think it is more about the game and the characters and the IP. Whereas for other people, and I would just take me here as an example. I'm I'm still I'm coming from a time where you think device first. I have my device and then I what type of IP or game do I get access to to this device? From that perspective, I'm I'm outdated and Gen Z thinks very very differently. Yeah, this is fascinating. I'm sure every web shop is now looking at this graph. It's like, we told you. Of

course. Of course. Yeah, it's it's good for for them as well. Web stores, you've seen what good looks like, but have you seen great app charge is the direct to consumer platform backed by the likes of Supercell and built by monization pros from Moon Active, Platika, Huge Games, and others. People who know the difference. App charge powers over half a billion dollars in transaction a year for top studios, optimizing every detail. Deeply personalized web store offers, custommade design, industryleading monetization features, in-game payments SDK, and more. 70% of top grossing games already have a web store, but the one scaling fastest, they're doing it with app charge. Learn more at appcharge.com. Um, all right. Uh, another interesting interesting perspective was was this one was the Gen Z follows their

friends and feeds. I mean, this wasn't I would say revolutionary, but still an interesting point. So, I'm going to bring it on on the screen. It's basically like how Gen Z is influenced by their social graph. Can you talk about this slide? Yeah, for sure. So I think within many of the uh findings we have most of them are not taking everything apart we have been believing in in the past but they really show where the trend is going and they really show what Jenzier cares about and from that perspective we discussed a little bit about creators right and how how strong creators and video is for Gen Z another is how strong they are influenced by their friends. So first of all 34% of Gen Z play games to socialize. That is versus 26% across all other generations. So we always talk about people going to

games to catch up with others. That's definitely the case for Gen Z. Secondly, I personally found the most interesting is they are the generation which is most likely to stop playing a game or also to re-engage with the game because of their friends. So think of them as social animals, which sounds maybe a bit more positive than than followers, but they really pay attention to is this game being played by other people I know? And for them that means probably they have more fun. So from that perspective, one of my first personal conclusions was when you think about retention as a game developer, maybe do not only think about the single user, but ideally try to have a think about the the circle of friends. At least when it comes to Gen Z, it's circle of users because if you lose one Gen Z user, you might be losing three of their friends as well. And vice versa if

you manage to re-engage all of them. So from that perspective, I think it's worth to think about social live ops, social re-engagement, could be competitions, could be something where you get a bonus if you complete or compete with a friend. Everything from that angle, from that perspective will work really well with with Gen Z. Does this sort of a finding support? This is my hypo. I don't know if it's my hypothesis, but I have this hypothesis. could be somewhere else of escape velocity for a for a game and meaning that when you get enough downloads like everybody's playing it name it like Call of Duty Mobile launch, Brawl Stars, Clash Royale, like some of these big games, a Pokemon Go like when these game big games launched, it felt like everybody was playing it and you couldn't walk away from it because and and all of these games by the way incredibly social. Like I remember when Clash Royale in 2016, we're

playing against each other in the same room. We're doing like on-site tournaments. Same thing with Call of Duty. Same thing with Brawl Stars. Actually, now everybody in in schools is playing it together. And that kind of gives the perspective that this is of course positive for any ad ad platform is like if you really pump the gas like let's say you have the metrics and the game is clearly good. You have the creators and now if you really really really pump the gas then you can get into that escape velocity where you'll get the users and their friends. Yeah. Yeah. Absolutely. Absolutely. So, and of course part of that what what you're mentioning is also referring to that there's there's a lot of competition out there right now, right? So, everybody wants to have a Pokemon Go, a Clash Royale and so on. So, if you are close to that, then I would say definitely go go all in really

literally. But even if you have a solid game, I think you can be successful if you just rethink a little bit the whole approach to bringing mobile gaming to mobile games to the market these days because I think many playbooks in the industry are still based of success from 5 years ago or 10 years ago. By the way, this the same as for us on on the Google side. We are constantly trying to challenge ourselves. is the the launch plan or idea we would be having for a game still up to date. And that is exactly the reason why we are doing research and going really back to the drawing board with things like Gen Z and how they are really distinct in their user behavior compared to other generations because probably back in the days if everything looked quite fine you you could have a good life as a mobile game developer. Now I think it's really about having a very strategic approach and that's why we are talking now more about audiences which to me is a more

let's say classic research marketing topic something at least in the mobile gaming side many years ago you would just get the game out there you know lifetime value bigger than customer acquisition costs let's go and I think that that is something we need to rethink a little bit but by all by all means coming coming back to your first question it's it's not all over it's just different and it's different based on the type of audience you're going for. So if you have your five-year-old playbook that might work well with the millennials and the other ones, but when you're targeting this new increasing segment, then you have to also update your playbook because your players are different. So I think that's kind of like the point you're trying to make as well. Yeah. Yeah. And and I would even go as far and say yes there are games which are clearly focused on Gen Z. For those games, whoever is listening to this or watching this, many of the things uh we have been discussing are probably not new or rather just underlining uh the the hypothesis people

have been working on. Then there are games where Gen Z is part of the audience where I think you can really use some of the takeaways to focus more on that. Ensure you are ticking the boxes. be aware, hey, they become the largest spending consumer group next year. So, what is our strategy for them? And then to your point, there are games out there which are targeting just a different group of people, a different audience group. But even there, I would say, well, one, again, cord effect, Gen Z will get older. And two, when it comes to friends and social referrals, I think that's where age matters less. And once somebody let's say from an older generation likes a game and gets a Gen Z person in there, you automatically start to cater for Gen Z as well. So I think it's relevant for everyone just in a different sense. To be honest, I have a selfish question. Selfish because uh this is related to a unnamed client. But let's say you have a game that is a

decade long. It's a mobile game. It's a well-known mobile game. And you are, you know, it's profitable. It's all great. We're talking about revenue in and like like it is typically in those games billion and up. How should a developer approach in refreshing their audience? Because decade is a long time and now as you're trying to reach out to the new audience, you're suddenly going from millennials which might have been the biggest to now having the the same product essentially to be offered to Gen Z and you were unable to successfully do it. So you have to do some probably product improvements definitely marketing changes. Have you seen those type of cases like what's the right playbook to be had here? It's let's say it's a it's a good dilemma to have right because you have been successful for a long long time. You have your core audience and then you might be coming across the the slight challenge that a new audience

might be asking for a different take on things, right? a different way of looking at the game, a different way of interpreting the IP. If it's so successful, I would call it an IP already, right? So from that perspective, I think I think there are several roots you need to explore. And one route is to keep the game as is and try to anchor everything still on things where everybody would agree on. So from that perspective, everybody would agree as an example that Mario is a cool character. Doesn't matter which generation. So for that game to keep all the characters and IPs and key mechanics all the same because that's still the main motivation why people are playing the game. You would take something away no matter from which generation. But then if you go deeper into all of that experience, I think one way is to think about how can I maybe have a more tailored experience to Gen Z. We take Jenzino as an example and tailored

experience could mean something regarding re-engagement something about having social features and from that perspective I'm sorry to say now you can think about utilizing AI to do something around that because why sorry yes that's a great no no it's like because you know it's it's such a hype topic but I think the hype is substantial if you ask me me personally it's just that sometimes if there's a if there's a lot of hype we tend to think, okay, let's wait until we really see what what it's good for. But AI could probably help you to identify what are the type of users I'm having and maybe help to have slight changes, slight nudges in the game which make it a bit more accessible from an experience perspective for Gen Z. I'm really happy with your answer because it doesn't make me a fool because I would have approached the same way because the typical way that I find this answer being solved is let's make the art more edgy. It's like, whoa, whoa, whoa. It's your

core assets. Like, I think it's super super important. The surface. Yeah. Yeah. Yeah. This is what the kids like. Yeah. Yeah. But then like the the kids probably still don't like it. And of course also Gen Z, not not kids anymore, but like most of them. But then at the same time, uh all your core audience, those are the people who have been paying your bills, who are the real, who are the IP, that is the community. So I think first of all with all of these ideas and strategies we're talking about always as a game developer from my perspective protect your core asset and the core asset is the general bread and butter success of your game that when you wake up and you have the gift of having a successful game that you look into your dashboard and it's still more green than red and from that perspective then you can do little steps and for that I think it's more about having personalized experiences and so on but don't don't change danger running game. Definitely not. I wouldn't do so. Yeah. Let's let's move on from this topic before people start guessing who Yeah.

Yeah. We're steering close already with your comments. Even if you don't know who I'm talking about. Yes. And I don't know. I don't know. Yeah. But but it's a it's it's a really great point where where it's about the features. It's about the social gameplay. It's even about this the strategies you use to approach this new audience as you said rather than how it looks like and and so anyways moving on from from that particular topic to the next one which is ads of course we got to talk about ads ads that don't matter but matter. So Toby's talking to me about ad monetization with Gen Z game devs. We know that great gameplay is what players love, but integrating metagame features like challenges, progression, rewards is crucial for retention and monetization. However, coding them is a tedious and timeconuming process. That's why top studios have turned to Hero. Hero provides a complete suite of battle tested metagame features that are quick to implement, letting you spend

more time on the core gameplay experience. Ready to ship fully featured, engaging games? Check out Hero today by clicking the link below. Yes, my pleasure. My pleasure. So, first of all, and I think when when you saw the the the presentation or or the deck, I think you were like, "Yeah, of course, because like first of all, it was our finding was 36% of Gen Z is dropping a game because of intrusive ads." And yeah, I can see in your face like, of course, anybody would do that. And and yes, but I think what is interesting is that is more than millennials 30% and more than Gen X 32%. Because you could argue that Gen Z as a generation uh which might get distracted more easily, which is playing multiple games at the same time, maybe also with a shorter span of attention. That's maybe not for every generation the case, but that Gen Z could be actually be okay if ads are a bit more intrusive. At least if you compare them to other generations. I

found that particular interesting. So they they really do not want to be bothered. The the good thing is if you are using a good way for ad monetization like a way to really have immersive ads in the game experience as an example then ads or play what whatever format works for you, right? Then this generation is more likely to play a game with rewarded ads than than any other generation. And they are also expecting exclusive items as rewards more than any other generation. So the TLDDR on Gen Z and ad monetization is they do not want intrusive ads, but if you give them rewarded ads, which they want, give them exclusive items. So So they're really in for it. Just just provide them with a good experience, with an immersive experience, and do not let them feel that you're actually trying to monetize super hard. you just use that as a way to uh have rewarded ads component into

their game experience. Does this go outside the games as well? Because as a incredibly heavy YouTube user, YouTube has intrusive ads, let's be honest. So Oh, you mean you mean the one where you after 5 seconds or which one? Both. like because they kind of like they're not, you know, I mean, you can get away from them with a subscription, but they are pretty pretty heavy at that. Do you see this? I'm not like attacking YouTube over here. I'm trying to understand does this same approach of of how people behave or how this Gen Z group behave, does it go throughout games into apps as well like YouTube? Do you see that type of a thing where you show them an ad and they change to a different video? Yeah, I mean just just first of all on on YouTube next to perceptions we we we might have we really look at user data and see if people have different

watching behavior because of the ads and we try to make it as user friendly as possible next to also giving opportunities for some formats to skip it. There's also YouTube subscription as you say. So that is how we are approaching that and of course by the way now as you have been mentioning you get more things with the YouTube subscription as well like YouTube music. Oh to your point we really looked at the the Gen Z behavior in games. So from that perspective that that was the scope of the research. Anything going beyond that would me now be speculating because we really looked at how are they looking when it comes to to games in terms of intrusive ads. If this translates into apps if this translates into other media I cannot confirm we can jointly assume or speculate. So first thinking on my side would be many apps and more and more apps outside out there now are looking into providing gamified

experiences to users and Gen Z behavior towards an intrusive ad will not necessarily change just because they are opening an app versus a game on their phone. So from that perspective, maybe there are nuances if you would research this again by, you know, looking in into apps versus games, but I personally think this this will be true also outside of mobile games. Interesting. Yeah, but definitely I've seen I've seen so much playable ads come into these hybrid casual games. So that's why I was uh trying to understand what is an interactive ad. And then of course like Yeah, I've I've seen my kids as well. They're not Gen Z for sure, not that old, but they definitely do like to play the playable ads and they do get really frustrated with any kind of other ad. So yeah. Um, but overall when we talk about monetization, we of course talk about live ops and you had a very interesting slide about the expectations and how high the expectations are with

this Gen Z. Yes, indeed. So, Gen Z has high expectations, which is probably a challenge for game developers because let's let's face it, they play on every platform more than other generations. They play more games at the same time than any other generation. And then they also do not want intrusive ads. Okay, you can find ways around it. But also, they are most likely to ask you for lots of live ops. So 27% of Gen Z are saying updates make me re-engage with a game. That's more than 23% of millennials, 18% of Gen X. So yeah, Gen Z is really demanding and probably it's it's, you know, if you're being exposed to so many great games and opportunities, that's what's happening, right? Demanding and not loyal. That's not combination. Yeah. Yeah. Well, that's that that's that's the game. But hey, we we also do have some positive insights from from that side or even on even on the slide for

anybody who's who's watching it. Uh Gen Z also overindexes on exclusive items. So they really like to buy something which they know they cannot get via playing. And also 27% of them would say I purchase personalized items that make me unique uh more than millennials 21% or Gen X 30. So from that perspective, you can utilize this insights not only of course to have a a good steady live op road map and schedule which is is more important than any any game launch but at the same time thinking of how can you bring very personalized unique maybe cosmetics maybe other ways for Gen Z to really find their digital identity in the game because we know also from other research like Ipso because it's it's a world where there's uncertainty. Um Gen Z is looking for belonging. So all of these things I think play into the fact

that they they are happy to buy something but it should be special. So with this insight, I think you can have a look at what are you providing Gen Z in terms of items with and again maybe you provide them with a with a bit of a different set than millennials going back to your suggestion. But yeah, limited time events and limited time skins and that's that's what we've been seeing that works. Really interesting. Last thing about about um about Gen Z and that is something that we briefly mentioned and that's AI like do they care if you use AI to generate content? Can I take a bit of a step back because this is a big question. Yes, please zoom out as much as needed. I I will zoom out until you stop me. No, I will just just for a bit of context. Just before answering, do they care if AI is part of that? I think first of all, everybody has a reason to play a game. It could be for just spending some time. It could be because you want to compete with your friends. Uh you want to explore a virtual world, whatever it

is. And we have been doing this very successfully as a gaming industry with now a 180 to 200 billion industry overall depending on what data you're looking at. So I think kudos to to everybody involved. Right now, if you look at the whole game development, this has become just much more complex because you have more demanding users. We have just been talking about it. You have competition which is really dialing up and more people wanting to have a piece of that cake. So from that perspective, you want to think of maybe technological levers to ensure you are still ahead of everyone else or at least you are as advanced as possible. And I think this is where AI actually comes into place. And on our side, we think about AI in in two big buckets. So one is anything about scaling game development teams. So something which is utilized a lot already I think when it comes to making games easier, better, faster with assets, with levels, AI

based testing. And then the second bit is creating very unique game experiences with smart NPCs, highly customized levels, approaches, notifications, go to market, and so on and so forth. I think if you utilize these, you can make your game just better. And now let me answer the the question you had. Does Gen Z care or even do players care at all? We can even zoom out of Gen Z here. Probably they do not care in the assets. probably they just want to have a great game which is satisfies satisfying their motivation to play like it's it's us you and me talking about this or everybody who's listening on the podcast but I think the players will not care in itself but what they care about is is having a great game a game which ideally provides them with endless personalized unique experiences and again there's there's a high demand now AI can help you to do exactly that to

provide this experience experience to Gen Z and also to to any other generation. So from that perspective, do they care? No. But can AI help you to have a better game experience for them and anybody else? Yes. Think indirectly AI plays a very big role. And of course there might be some hiccups along the way. That's that's the that's what's happening. If you're using a new technology, but I firmly believe that you might get left behind if you do not think of how to involve AI in your overall game development process. Yeah, that that makes a lot of sense. It's a it's a it's it's an interesting topic to understand because there's so much emotion with these conversations. I remember the uh the Adidas made an ad campaign and they said this ad campaign has been fully done with AI and there was like a bunch of people in different countries. They were dancing like it looked like typical Adidas campaign and they said this is fully done with AI and I was like really this is awesome like nobody had six fingers and everything looked you know correct but at the same

time it was presented in a way that is more of an outrage like look at this and it's all made with AI and so that's what I'm trying to understand like are people outraged in general or are there some people who are outraged because naturally this used to be their job this used to be what their focus and now AI is replacing it kind of like you know I don't know if if horses were outraged by cars coming being introduced widely but most of the people are like no I like this better nobody you know poops on the streets so but I think two thoughts on that I think one there's always the the big population of gamers or users and consumers and then there is us working in an industry understanding the industry very well no matter which industry we are in and we are seeing things sometimes a bit from a different lens than than the average consumer. And then I think secondly just coming back to Gen Z because you were mentioning people were outraged, people saw okay maybe is is my job in danger. We also asked all the generation about their

perception of AI and first of all Gen Z turned out no surprise to be the most knowledgeable one when it comes to AI. But they also were saying I want game developers to use AI to fix bugs to give me a swift and smooth gameplay experience. So they might have a low tolerance on that as well. And at the same time for me surprising more than any other generation they were saying I expect game developers to still provide me with human creativity and giving me those memorialable unique nerdy moments in those games. So for anybody who is a bit skeptical Gen Z actually comes to the rescue. So let's also mention the their positive uh you know traits and behaviors. Yeah, they want AI, but at the same time they want the creativity of game designers and unique experiences. And I think that's a very very good message overall. Yeah, that

makes total sense. And it is in the conversation about AI, it's often polarized where you're saying, oh, you like AI is almost seen as something that increases quantity but decreases quality where that's not the way it works. it can increase both because the same person can have more quantity and can focus on adding quality to the pieces that that they're you know focused on whether that's writing or videos and everything. I don't know. I just use it in my daily life all the time to speed up processes to come up with ideas to uh to hone in on that. And I definitely don't feel that the increased quantity has decreased quality vice versa. I feel like both have gone up. Yeah, I think there's a there's so so just to that point, just because it's possible technologically doesn't mean consumers will want it or will adapt to it. There there's always that that little gap, right? And I totally understand any perception in in that regard. Um, the big chance just just to build on your

point, the big chance with AI is also that it might help to break down some game development barriers, might help some smaller and medium-siz developers or indie developers who I'm sometimes talking to and they're telling me I have this great idea, but now I have a challenge in scaling this that maybe AI can help those folks to be more successful and to actually tap a bit more into the market. So that actually could mean that there's more creativity being enabled through AI because they can just be as you say just way more productive. And then maybe last but not least, I still also think that there might be a whole breed of AI first, AI only game development teams somewhere out there. Maybe it's some startups. We don't know yet. Maybe it's coming in three months, maybe in two years. There are there are. Yeah. So once once we really using it and playing with all of this, but there is definitely a chance to if if you start working on a game

today to really think of AI first. If you have your game out there, I think it's about figuring out how can I use it best, right? But there is definitely something new to come and I'm quite excited about it. So there's definitely more chance in AI than than overall business risk for for all of us. To summarize the points, correct me if I'm wrong. AI is not a turnkey solution. You just don't put it in and you're good to go. AI does not replace creativity. You can have much much of volume, but if your inputs are off and you're not a creative person, then that won't replace it. If you have a brand, you won't lose control over your brand because you start using AI. And finally, it's not a tool only for quantity. It's also a tool for quality. Perfectly said. You can post this may maybe run it by Gemini or any AI tool to make it even nicer and add some smileys to it. But I definitely going to mention there is many jokes I can make about Gemini but I will leave it out of this episode. Thank

you for that. Thank you for that. Yeah. Uh to be always a pleasure. You're super knowledgeable. You have two decades of history with with gaming as a journalist at Google Play at YouTube and now head out of gaming. It's great that Google has people like you to support the the industry and thank you so much for sharing all this information about Gen Z. Thank you very much, Mishka, for having me and I hope it was insightful and I'm also sure there might be some conclusions from some folks both of us have not been thinking about yet. So, let's see what what people come up with. Tobias linked the information in the description below. You can meet Tobias at the biggest gaming events. So, yes, that's it. And thank you everybody for listening. Thank you. You did it. You made it to the end of the episode. As a fan of the show, it would help us out if you'd subscribe and leave us a review on the podcast service of your choice. Those stars and likes,

while small action on your part, mean a lot to us and help to grow the show. More importantly, are you a member of the Deconstructor of Fun Slack group? If you have 5 years or more of games industry experience, go to deconstructorofund.com/slack and apply to join. Join the games industry best professional community filled with peers always willing to lend a hand or subscribe to our newsletter to get all the latest insights from the deconstructor of fun content creators. Thanks for listening. [Music]