You Gave Feedback. We’re Making Changes

All right. So, the next segment we want to do is a little bit of as part of the awards, we asked for your feedback. And so, we wanted to share some of the feedback with you guys and let you know what we're going to do about it or not. Phil, do you want to do this first one? Yeah, I think you know it's it's something that we talk about amongst the hosts quite a bit which is trying to balance all the different things we talk about on the podcast and I know a lot of people have noticed us moving away from more core game deconstructions and so yeah that has definitely been heard and it's something we're trying to think about. Uh I think you saw that also manifest in shooter monthly is trying to split this out and make sure that we can go into the deep dives and get really nerdy about mechanics and cover specific genres. And I would say keep your eyes and ears peeled. you might see more genre monthly or discipline monthly podcasts come out, but we're of course trying to think about how we do it on the main Twig podcast, too.

Yes. I think you know the feedback that I typically get about Twig itself is listeners love that it's a great news show and they love that they can hear our different perspectives and takes on what's going on in the news and what's the most important topics. So from a deconstruction and product specific details, we're trying to figure out where that fits into the deconstructor fund universe. So we will come back with some more updates on that soon. So here was another piece of feedback. The podcast was described as enjoyable, getting even better with deeper analysis in a growing bench of contributors. The team dynamics and chemistry were also highly praised. That is an AI summary of a bunch of feedback, but aw thanks. You love us. you really love us, so I took the positive one. Crest, I gave you this next one to read out. Go for it.
One respondent suggested limiting the guest count to a maximum of three or four to avoid the show feeling overcrowded and to rotate regulars. Another asked if Crest was getting too

old and one request putting Philip Black in his place more often. I couldn't agree with the latter one more.
I am getting too old, that's for sure. Sometimes I'm I'm a little bit worried that I'm getting out of the core demographic of what's cool, but luckily I have kids for that. But us old folks are people, too. You know, we need to we need to have our opinions out there. So,
yes, we are. Sure. [laughter]
Are Phil, take this next one.
Cover more Roblox things was something that we also got feedback on. I agree. I'm trying. I'm trying. As the platform continues to grow in prominence, people continue to age up on the platform. we get that age verification data coming this year that I know is going to blow Eric Cres's mind on the [laughter] over 13s. This is not going away. This is not going away. I think, you know, it's it's always tough on Twig. There's so many different different people that listen to the podcast and so many different industries that we try to make a, you know, a top us style what's going on, what's the biggest news stories, and I

think Roblox is going to continue to be in the news. So, I think you're going to continue to hear about it from us. I
mean, I think we cover Roblox a lot really.
I actually think we do, too. Yeah. I I I think what I would like to do a little bit more on the podcast is talk about the individual games that are rising. I mean, we talked about Stea Brain Raw. We talked about Grow Garden. I think continue to talk about things like Rivals is the shooter game that I think is absolutely magnificent on the platform. I actually want to talk about on shooter monthly, but some of the stuff that I think really breaks out on Roblox and I think again we'll see more of that this year. I think those are things we will continue to cover. The really big successes that also hit mainstream.
Yeah, that's fair. I think we do it a bit more from a company, their overall numbers. Later on, I have an article about what they announced at CES. So, I think Phil, you know, because you do a little bit of work in the space on the game side. I typically rely on you for bringing that up. Cool. All right. So, this one was a little bit longer, but I thought it was really thoughtful. So, let me read this out. quote, "As a

historically frequent critic, let me say, let me say I think you have really had a good last one to two years. I find the podcast to be getting even better with deep analysis, a growing bench of contributors, and a somewhat more serious take on the industry. Hats off to you. Constructive feedback. Try to be less cynical all the time. I'm looking at you, Mishka." Thought that would have been a crest, but it's like I'm looking at you, Mishka. As you know, building is very difficult. Deconstructing is much easier. Try to appreciate the builders more even in failure. The DOF audience would grow and your content would improve with a bit less of a cynical vibe. You know, we talk about this all the time. It's easier to on things than to lift things up. So, Crest, what do you take away from this?
First of all, I I'm personally trying to get better at this in 2026. Now, I [laughter] it's going to be baby steps, just to be clear. But um
I'm saving a spot for you on the Animo train. Chugga chugga chugga chugga. Um

[laughter] but I honestly I think the industry itself has been going through like a serious transition over the last 2 years. And I think we're kind of getting through that transition to some degree where we'll be in like more of a steady eddy type space. But we've seen like crazy layoffs like shut down of failed studios, these ridiculous strategies from companies that are kind of out of position like Netflix and Microsoft and Ubisoft. It's been pretty dramatic and negative just in general like covering this industry which has been really hard and hard to stay positive right that and so I think we will see a little bit more stability and a little easier to cover the industry with less like kind of big negative headlines. You know
I go back to one of your core thesises on the podcast which I don't think you you iterate enough. What drives growth in this industry is new platforms. New platforms are new opportunity. They're new spaces to conquer. And so what are the new platforms? Why get excited about Roblox? Why I want UFN to grow? But I would say do you see anything else

besides those two? It's clearly not Steam Deck or Steambox, but no.
Do you see anything else besides those?
There in lies the big problem, right? There is no big platform introduction imminent.
What about Discord's IPO? You think there's anything I mean IPO isn't going to change the underlying mechanics, but you don't think this is a good UA source? I mean, they they don't have the inventory yet, clearly.
I they're pitching that hard, right? But I don't I don't know. I don't see it right. People that are on Discord are already captured, right? They're [laughter] not capturing new people on Discord to buy games. You know what I mean? They're not expanding the audience. But what we really do need is a new platform. And nothing is going to be as big as mobile, but like like VR to take off, like blockchain was obviously failed, but that could have taken off. you know, AI like some again new tech, new content from AI games that like expand the audience, expand a demo, expand different monetization mechanics, etc. I don't
What is there left to expand though? That's what I don't get, Eric. Like, who isn't a gamer? Like games are on the New

York Times, they're on Reddit. What What is left to
I guess maybe it's Yeah, it's content that actually converts, right? So mobile is only converting like 3% of the audience, right, on any given game. So we need content that converts a more a bigger percentage of that audience so that is compelling enough for people to spend significant amount of money to grow the basically the TAM of this industry. So that's what I'm thinking anyway. Well, there's conversion to purchase and then there's also conversion of attention which kind of leads into the Roblox story I wanted to cover because it's about advertising and when you've got the younger audience that doesn't have share of wallet, they don't have a lot of money, you have to figure out how to convert their attention, which I think is what Roblox and Chris like this is your whole thesis on why Roblox has a future is if they can finally figure out advertising, maybe they can start to convert some of that attention into dollars. So, let me just do a little update on the story. So, CES is this week. If you don't know, it's the Consumer Electronic Show.

Happens in Vegas every year in January. So, Roblox just announced several major updates to its advertising business. They have a new homepage feature uh and it's a new ad format. This immersive format places video content within a 3D viewing environment on the homepage, allowing users to preview experiences before jumping in. Just a segue for me as as I worked at Riot and we had our homepage on the ri on the on the launcher or if you look at what happens on the homepage of Netflix or Fortnite. This is the most exclusive and highest converting ad content you can possibly have. Imagine, you know, back in the old day when people used to buy like the YouTube mast head, remember that? Like you get so many eyeballs on things. So them Roblox introducing this is a really big deal. So they are also expanding their programmatic partnership and so this is like automatic ads. Uh the platform announced a new partnership with Amazon DSP joining other partners like Pubmatic and Magnite to allow

brands to buy ads programmatically at scale. This is a really big deal. Programmatic is what allows you to scale your ad business. So without programmatic, it's everything being more manual. It's never going to scale. And so this is good news for them. High engagement metrics. And so I think we know that the rewarded video has been in beta for a long time with a lot of different game companies that you know we're familiar with. So they say rewarded ads have achieved completion rates of over 90% and average viewability of over 95%. So my take on all of this news is we're starting to see the expansion of the ad business. These are positive signs. I don't think we're there yet. This is the way that they're going to have to monetize Gen A because you're not always going to get money out of them. In the article, there was a great article on Gamespeed. There was a back and forth between uh someone kind of challenging Roblox saying, well, like it's really

difficult to put ads into a 3D space versus like a flat space that you see on mobile and creators have not yet seen meaningful results from these ads. So Crest, I think perhaps some of the stock market agreed with this guy on that. What did you see as the reaction on the stock?
Well, the stock has gotten crushed. Like I I actually wasn't even following it because I was not even I was trying to get away from the stock market for a while. It is almost down 50% from its high from $150 down to 76. You know, that's like $50 billion in market cap just gone in a few months. You know, that's insane. like that is really insane movement on any stock. But there are a few reasons. One, the main reason I think is that the new games are not comping grow a garden and brain rot, right? So they're seeing declines in growth and this next quarter is looking like it's going to be far weaker than last quarter. And so I think people are worried about what the guidance they're going to give for next year both topline

and bottom line because they say they're increasing spending because of all the influx of new players and also the new age verification technology that they've been implementing may actually divulge the truth about their platform which it's not aging up at all. Right? So, I mean, they're a little bit worried about what this thing might actually do, but also they're worried about that it may restrict some users like children, which is the primary audience, from using a lot of the features in their games that may may reduce the amount of people that are actually playing their games. Frankly, the what I did here was that the New York Times interview with those basically really screwed him over, right?
Really? The hard fork episode.
Yeah. I because it puts a little bit of fear in them that that he is so not media trained to be able to like handle these questions that there may be risk there and you know he really didn't do himself any favors of doing that interview with those Vipers at New York Times you know so you know corp's got to do better and I know they listen to this so you guys got to do better [laughter] so and then finally it's clear that like

some big institution is getting out of this stock cuz I think people once you see people one big institution that owns the stock leave, then the hedge funds just pile on and just sell it all and start shorting. So there's like kind of a run on the stock to some degree. There's some mechanical thing which I am not an expert in, but there's some mechanical on a trading basis. And so frankly for me like this seems way oversold. I think the story is still kind of there, right? They're they're improving the the fundamentals of the business and doing more advertising and I think like they're making progress there and they're going to be able to monetize their network better. But again, this is not trading advice, right? But the moral of the story is the same thing I've been saying on this podcast forever. Do not trade individual stocks. Like you have no advantage of trading individual stocks. And these stocks in particular are hedge fund hotels that people are coming in and out of, right? And chasing returns. Buy the index like the VTI. Do not buy these stocks.
Yes. Efficient market hypothesis. Welcome to the crew. Eric, we are happy

to have you.
That is exactly the opposite. Eugene FMA, Nobel Prize winner. Yes. Just put your money in index or management free fidelity S&P 500 shares. Beautiful.
No, that's true. But the efficient hypothesis is actually a total because there is no efficiencies, right? Because these people know more information than anybody else, right?
Market ends up surfacing that very quickly. We get edited into equilibrium.
No, the stock the individual stocks don't only the market. They were talking about like all things are known for a stock and so therefore it is fairly valued at any given time. That's complete
Equal to its future stream of dividends.
No, that's too. The market finds that information though and it gets priced in.
Phil, there are people that have far better information than anybody else that are trading ahead of these actions. It's not information that is completely known to the market.
Sure. But that information gets serviced via the market process and it gets priced into the stock once people see the movement in price.
No, that's that is a fallacy. That's why

hedge funds have been making money for years.
They've been making money for years trading on the fact that the market is not efficient.
You can follow the hedge funds. I mean, look at Jim Simons is not in the room, but he's the only one I'll give you.
Oh god. Okay. All right. I'm gonna I'm gonna end I'm gonna end finance talk. I the one thing I will say is my wife has been doing a lot of trading recently which is how I'm able to somewhat follow this conversation and completely agree with Crest. The one thing I have seen is that there is information that resides with some people that isn't with the retail traders and you can see it every single day happen like the rugps are just you know like absolutely crazy. All right, I think this is going to wrap up everything 2025. I think we're done with all of those recaps. We're going to now enter 2026 and do even more news coverage. Try to be better. Thank you everyone for a great 2025. Thanks to all the Golden Twig winners. We'll send out some sort of award. Phil, maybe we'll even give you one this time. I I would

like one too. And we will see you all next week. [music]