Hey folks. Well, it's been a little over a year since we started this week in game segment on the deconstructor at fund podcast. And since that time we've used a bunch of different services and tools to help us manage the podcast from time to time. We do get questions about the type of services and tools that we use and so let me talk to you about one of the tools that we use which is Anchor and anchor is a really easy way to sort of make and distribute your podcast. It's free. There's a bunch of creation tools allow you to record and edit the podcast and anchor will basically the main value is it will distribute your podcast for you. So it can be heard on Spotify Apple podcast and bunch of other services and it can also be used to help you make money by creating ads like this one with no minimum listenership. So if you are interested in making a podcast definitely suggest that you check out incre you can download the free incre app or go to incurred on FM to get started. Thanks everybody. Welcome to Twig 61 in this week's episode. We will be covering the following news articles first yd7 row as maybe the worst kpi to optimize towards since CPI, which is from Nebo radovcich has medium page actually Nebo. Did I pronounce your last name? Right? Haha. Yeah you did you did. Okay. I kind of change it to read the Vic because it's easier to pronounce. I can't do everything my name my last name. Yeah that is second article is what comes next after Facebook's video campaigns. Strategy by mobile Dev Namo. The third article is mobile game developers are buying into Rivals instead of selling out by business world. The fourth is the game awards 2019 the 12 biggest announcements by The Verge and finally the Xbox series X is basically a PC by again The Verge on the podcast today. We have myself Joakim are Crest and Adam tougher. In addition. We are joined by a very special guest the Nebo. Network arguably one of the best in the business at UAA and certainly one of the most influential anybo welcome to the podcast. Thanks guys. It's great to be here big fan of what you do and because director of fun great and for those who don't know you could you do a quick intro about who you are what you do? Yeah. I'm currently a network as part of the you a platform used to run marking a network for two and a half years pretty much until a month ago before that. That I used to do user acquisition and machine Zone and Northeast someone, you know top 11 better than the name of the company, but one of the first big mobile device web developers back in 2012-2013, right and just moving on to updates. So for those of you out there who are actually interested in marketing user acquisition coincidentally Nebo John Law from DraftKings, and I started a YouTube segments on the game makers YouTube channel called you a coffee. OCH so please check that out and I actually just finished. Let's go Pikachu this morning and not sure if you guys are playing cards down. Let's go Pikachu. What? Yeah. What are what are you talking about? Why did you even finish it? Why did you even mention it I gave up on following order and that was lying around. You know, one of the yeah, I haven't played her after I have to say I have I may have given up on Fallen order. I might pick it up again over the holiday but not looking good for me. So I finished it. I actually finished it last week for you. Yeah, and the last boss is actually very very good. Yeah, really enjoyed it anybody happen to be playing Black Desert online on mobile at all. That game is just beautiful. It's like it's almost too much. But anyway, I don't think it's going to do all that well, but we'll see but it's cool any other updates. Oh, I got one update on scope lie, so So basically they were mentioned as our no mention. They were awarded dealmakers of the Year by variety basically representing the only video game company on the list huge honor. Now. What I realized at that point was I've been a little bit negligent in my terms of my characterization of an assessment of scope Lee as a whole, you know, I gave a lots of props to Walter for his Charisma and his deal making skills and how handsome he is, but you know what? I absolutely totally forgot about Javier. You know Javier is like Antonio Banderas alongside Tom Cruise man, those two cannot be resisted. You know, it's so so I have I'm apologizing to her Javier who deserves credit to being maybe the second most handsome person in video games and although if I were picking between the two Walter Williams hands down for the most handsome executive and video games. So congratulations on the accolades and the honor from variety magazine for best deal makers of the year. You guys are truly a force to be reckoned with so that's my quick update on scope lie. All right, I guess given that maybe we should go ahead and kick it off with the first article which is why d7r as me be the worst kpi to optimize swords and CPI and so in knee bows medium post. He talks about why a lot of performance marketers today use D7 row as a key metric to optimize. And by optimized against we mean adjusting the you a budgets against any talks about what the limitations are of just using D7 R OS as that key metric but long story short. Some of the issues are that there are different monetization curves and therefore different expected row as Target goals based on different channels platforms. And Gio's for example further. It's not to say that marketers shouldn't use D 7R o ass but that just as a single Metric and without getting Fuller contacts that mistakes can happen. So anyway to get into this further. We thought it'd be great to ask the man himself Nebo from Network we who is here with us as mentioned in the intro. So I thought we could start just by Nebo a having you talk to us a little bit more about the context behind why you wrote the post and some more details behind the limitations behind using D. Seven rows as that sort of God metric for you a budgeting. Yeah. Sure again. Thanks guys. anyway, I'm really glad that the article resonated so well with a lot of you people and you guys as well and if you ignore the then click Beatty headline what is really about it's basically explaining that you a team should never use a single metric the optimized towards and the reason why it's because you always changing and you covered a lot of UI articles in the past that are talking about like whereas Base building and how you know, it's getting easier to do you a but at the same time, you know, the monetization side of things is changing because the uua part is changing as well and what I tried to explain how Royce based bidding algorithms impact molestation curves and why using a single metric is very dangerous because you're early metrics, especially in the case of Facebook Bo or and Google PRS look really good. They're really good at filtering users driving a lot of payers early in the game and making all your metrics look really good. But those users also get bombarded but tons of ads, They turn much much sooner and as a result, your peer attention is lower or long-term care attention is lower. So the article is really about it's a call for all the you a people to look Beyond just these seven Ross. There's a lot of reasons why it's a popular metric. It's easy to understand. It's easy to communicate to management and as well as fears on the team, but at the same time, I believe that that kind of the future you a manager should understand both sides of the coin both the monetization and and the US Side and understand how each one of these things impact the the monetization that pay back window, right? And so in terms of your recommendation or some of the other things that marketers should be looking at instead of D7 Rose. Could you go into that a little bit? Of course, I mean the best thing um, are you a team could do is have you know work closely with a data science team and figure out the predictive LTV models to understand which campaigns which channels are going to pay back sooner the thing we like predicted. Smart predictive models is that they take into account not just for us they take into account session length, Perry tension overall retention where the players are coming from which platform are they playing on so all these different things impact the LTV curves differently. So if you have a really good data science team that wants to work closely with the marketing team. That's great. And then you can you can spend more aggressively knowing that you know, you understand better how the LTV curves will look like and when the money is going to pay back if that's not the case if you are working for a small company that has just like a handful of people or one data scientist for both the game team and the you a team then the recommendation is to to figure out different targets for different channels and different platforms and different Gio's it is a little more manual but at least it ensures that you are spending the money in the best possible way given the set of tools and resources you have it's like a tldr explanation of the Conclusion Adam and Eric. Do you guys have any additional questions here? It sounds like the main issue isn't necessarily D7 rowers, but actually more around the multiplier that happens afterwards, right? Yeah, exactly exactly because just like imagine if it what happened with Facebook video and Google Google theorists is they're really good at converting users to payers because they know who who are the payers and games, you know, we're uploading look-alikes. Google has Google Play data as well and they are they're just sending more of the payers to your game. As a result, you know your early numbers look really good. So if you apply the same multiple to Facebook vo as you're applying to like rewarded video, which is a significantly cheaper channel to acquire users from it. Just you know, it won't come up you won't get the same result and the what what's likely going to happen is that you're expected to pay back window is significantly shorter than what the actual is going to be. So that's why this requires slightly deeper understanding of the ultimate curves look like and and how different optimization models impact the LTV curve. Cool. All right. Well, we will definitely include a link to your medium post as well as the game makers, you know YouTube video where we talk about this in more depth and also just for our audience, please do paying us whether you'd like to see us bring some of that content here on the deconstructor fund podcast. I know some in our audience will some sort of freak out sometimes when we post sort of non p.m. Non-game news design related stuff. But you know, who does that but you like uua is so much a part of the but, you know, generally speaking for us. We feel that there's going to be competitive Advantage by knowing more about this convergence around p.m. & Design and you a so anyway, please let us know in moving on to our next article, which is also uh user acquisition of marketing focused in this one is titled. old what comes next after Facebook's vo campaign strategy by mobile Dev Namo and just to summarize this article video for our audience out there who is not familiar with you a stands for Value optimization is basically a type of advertising campaign strategy that Facebook support where the people you advertise to our targeted based on their value, which generally means the amount of LTV or spend in this is generally speaking the most highly performant and also the most expensive type of campaign strategy out there in his article Eric Seaford first talks about how with vo the way you control costs is actually different. It's basically highest value or men row as return on ad spend. We're highest value means you pay whatever it takes to get the users with the highest defined value and Monroe has means you want to establish a minimum sort of threshold for return on the user after 1 or 7 days and the second Point Eric makes To take the user on a history of Google UAC which is short for Universal app campaigns and basically Google's ad targeting system and the difference here. Is that a lot of the functionality and levers that marketers used to have control of got sucked into the platform with UAC and with UAC marketers just provide parts or components of AD creatives, which Google then uses to dynamically create ads and that generally performed a lot better. Because of all the machine learning technology behind it, but the other part that you have to believe is that Google is working in a sort of benevolent way to provide as much performance as possible, but you're sort of trusting that they are doing the right thing and not just giving you a little bit of performance over your target row a school that you had specified. So Eric then posits that Facebook will likely move in a similar Direction and we'll take automated create a variation. Automated value targeting automated budget targeting and long story short similar to Google UAC will have their system suck up a lot more levers and functionality into the platform. So the unit user benefit here is that there's a lot less for a marketer to do and should allow sort of less sophisticated marketers or smaller players to perform as well as the bigger guys, but the problem also is that there will be less. Transparency or no transparency, you won't be able to tell if Facebook actually gives you the best performance you can actually get or are they just delivering, you know, a hair over what your mineral has settings are so amiibo. I guess the question I have for you is did I characterize that correctly? And then what is your take and sort of the you a communities thinking and take on this stuff? Yeah. This is a great article what Eric is really good at is outlining Trends and explaining really well, like what's the impact of those? The UN this tree and this is one such article. I think there's a few more things that are important to outline here. It's mean whereas doesn't really work in the way advertisers one it to work. Basically you would Facebook products. You always did or not always but in most a lot of cases, you've been significantly higher than what you can actually pay because you're trying to boost delivery and to get more, you know more Impressions. So I think that's one of the problems of mean Rose. It's like you want to to hit on a day 7 of 5% but in a lot of cases you're going to bid one percent or like point one percent or whatever is the lowest possible bit because you're trying to boost delivery and what what happens with vo it turned into like a pay-to-win strategy where like Whoever has more money wins more more Impressions or is able to acquire more payers. So I think that's one of the problems of VO and that's one of the biggest changes in the industry that happened in the last year, which is Fairways now very simple ways. Choir pairs in your game, but at the same time they're very expensive which means that these particular strategies are available only two guys with Deep Pockets or if you're if you're a game that converts really well. If you're a new type of content that converts significantly better than than existing advertisers games, then you might be lucky and for a short period of time be able to compete with everybody else into in that auction. So, who do you think this will actually benefit in the long run then? And it sounds like the deepest pockets and maybe even like hyper casual players hyper casual guys. I think part of the reason why hyper casual became big is it hyper casual guys don't really care about the video at all because they don't monetize by pide monetized using a drug ads, right? And because of VO and Aurora's base fitting algorithms CPM is went up significantly like Facebook cpms are really high. Google cpms are really high because then they know how to find really good. Users and as a result, you can have ad supported games and you can you know have Drive millions of installs and do it profitably by paying the money back at least three or four days, but just but just showing ads so I don't think this actually impacts impact hyper casual guys impacts people like impacts developers like, you know Network or machine zone or any meat cord to hardcore games that monetize exclusively. Lee with IP so I think I think the future here is really to make this auction a little more fair and to make it available for advertisers to reach to every single user with every single station model versus having one model which goes only after Pairs and creating this like Bloodshed we're clever has more money wins. However, what's true about this article is that Facebook is trying to make things even simpler and it's true. The mini make you a scene that sense because they are trying to make their long tail longer and all these changes that they were making to the platform are actually doing that. I think there's a few more things that I wanted to bring up is like Google UAC was not a very successful product for a long time and it took a while it took a while to Google to get to this stage where they are now arguably performing better than Facebook for a lot of developers and it's still not that successful on is so I'm not I think Facebook will probably take only those bits that are working which is a simple interface a simple way to create campaigns and potentially they'll create one auction or the create one campaign type that works across all placements because Facebook now has a messenger and Facebook Audience Network and physical first party products. So they'll probably, you know do something in that regard, but I don't think it's ever going to become a simple the same as you AC because there are some things about the Apart from their very successful in to some degree though. Google kind of has an advantage because they have the Play Store data, right? That's true. But Facebook has school likes which is one of the sneakiest way to get other developers Revenue data. There's Facebook SDK and there's Facebook login. So if you're using Facebook has decayed and you're passing like Revenue data in real time, which is why Facebook is more successful. And is than Google and if you are using Facebook login, To collect like user information. Then you're also sending their revenue look spending and and engagement Behavior data Facebook. So they're they're really good at figuring out who to advertise to the problem with video in particular is that it they know who the payers are. They know who are the biggest barriers out there, you know, we're talking about whales has been dozens of thousands of dollars in games and they just created a simple auction for everyone to go after those and it's very expensive right now, you know. if the u.s. If you want to drive and install like if you want to go use vo in the US for like commit for hardcore game, you have to pay 50 to $100 for an install and you know, just too risky at this point, you know, because you don't really know whether that user is going to stay in the game for that long to monetize that much that's why I wrote this paranoid article about you know, why this evanuris is should not be the Target and how people have to and why people have to understand these things at a much deeper level in order not to take their company to bankruptcy. What about the question of trust in potentially having you know, the sand guys manage your performance to maximize their own profit. Like do you think that's concerned that marketers should be concerned about my bull statement is that you use our acquisition as we know it is he's done or like it's going to change significantly in the next year or so, so You can Google are going to make things simpler. But at the same time it's going to just get more competitive and people with more money will have to will be able to win this game and utter utter developers will have to look for alternative strategies and speaking of scope. Lyric. I know you let let's go plea I think what's go play really did well is they figure it out how to leverage IP to lower the cost. I think in the future, there's going to be a lot of companies that will look for alternative waste either there. Be able better. They'll be better at finding things that convert users really well or they'll build social models in the game that helped, you know with K-factor and just like help games grow organically and I'll stop here because I can talk about this for a while. Okay. Well what one last question for you about so given the power and strength of what Facebook and Google are doing and it seems like they're getting more and more share of the mobile advertising pie. Do you think that continues and how Can that go? Right now I think Eric Eric super shared shared a graph few days ago that Facebook and Google are simply 70 or 80% of all the mobile ad spend. I think that story too much because you know, we that means that your you a mix is not Diversified and that you were like, you're putting too many eggs in like two baskets and that's already risky because what the result of that is the cost is going up and if you Games done monetize consistently as or if you're getting just stops monetizing because you did something in the game. That's not good. That means you're going to run out of money pretty fast. So it's just like it's very risky to rely only on those two guys, especially if you do use your position at scale, so I think they're I think they need 2010 and 2020. There's going to be a huge opportunity for one of the other AD networks like Tick-Tock or SnapChat or Twitter to become really big and because um a healthy pair adoption. Wait a minute. Hold on. Okay. Now at least this is kind of talking my language a little bit because up to this point. Any question I would have asked I would sound like a moron but um, so wait a minute so is it is it these baskets is just like Google and Facebook because they're the most efficient in the best networks to advertise on or you know, yeah. Yeah our snap and Twitter and all these other ones like actual art alternatives. Are they just trashy, you know, Ray stuff like are they as effective? I mean if it's because it was if we're getting down to Google and Facebook because they're the most effective than that doesn't mean that someone else is going to come along. Yeah, how can Snapchat come back and like be competitive with Facebook when they don't even have someone's birthday, you know, you know I'm saying like, yeah, I mean, it's a great question. I mean, I think the number one thing that Snapchat has to Fix our ad units their head units don't convert as well. And and you know, they already killed things like look-alikes to get user information to try to understand who's spending money because not spending money. I think also like tying Works in Snapchats favor because their audience is going to get a little older. They average household income is going to go up. It's the same thing to happen to Facebook like 10 years ago when Facebook introduced it and they're advertising things were not working as well but a period out over time. It's really up to the management whatever like they have a good Management to be able to execute that what happened with Google and Facebook is they swallowed? A lot of smaller networks. They were great options for game for the game makers, you know rewarded video was huge for machines. Don't for example and reward video is nowhere close to where it used to be because Google and Facebook became huge players in this in this space. They are simply able to Target users better and as a result, they're paying a higher seat. Higher cpms. Yeah, no. No. Sorry. Let me just rephrase and I totally understand and I think you and I are saying the same thing but your your statement was more like well, we'll see one of these other operators, you know, come up and compete against Google and Facebook, but I don't see how that's even possible given the I think there's an opportunity but it's highly unlikely. It's going to happen. Okay. All right. So yeah that you agree. Yeah. I just can't imagine Snapchat coming. You know back to life. I mean, it's an interesting story with those guys, but I think that you know, these type of things tools lose their Allure after a while. They move on to other things says you should you should think about it as in different theme and I invested in Snapchat made like a decent amount of money from Snapchat Investments because it's a video first social network video is a premium premium kind of at the Get any video ad is kind of Premium again adds Unique Piece of add. They have 300 million du or like they have a ridiculous number of users if Facebook bought Snapchat, they would make tons of money off of that inventory. So it's something that's very valuable. The question is whether they'll be able to extract value out of the what I have. So that's why I think Snapchat has something unique and they just don't really know how to How to leverage their inventory and it's probably because they don't have their data is not good enough, but well, they don't have a targeting right and that's the fundamental problem. I mean like I remember I guess why I there's a little bad taste in my mouth. I met with one of the snap Biz Dev guys, like, you know, it was like literally like three or four months maybe six months before they went public and I was just kind of asking it was like a meet-and-greet thing and I was asking them like so exactly how much information you collect on your on your user base so that you can you know have targeted. Sizing actually, it wasn't even started. Let me step back. The question was this. How are you going to make money? Right? That was really the question. I asked him and then he said well we're going to do advertising and then I asked them the question. So how much actual information you collect in your user base. He's all none. I'm like well, how are you going to build an ad Network out of stuff that you can't Target, you know like and so I mean, I think they've stepped up that sort of thing and I'm not really covering snap all that closely. But yeah, it just seems like they just can't possibly compete at the same level as Facebook or Google ever. Right. It's just not that kind of tool, right? Yeah, that's true. I think they need to improve targeting and at units or the the ad formats. They offer. They're just not converting users well enough and that's part of the reason why performance advertisers are not leveraging Snapchat as much as they do who won. I just want to short snap. Is that is that is that so wrong? I just know it's kind of it's a social media. Thanking everybody wants to short snap. It's like shorting Wilbur but you know their panel who loves people like you being a make money off of that. So that's true. That's true. That's why I'm not sure Ting it because I don't know enough about it to be honest. Yeah. All right moving on. Yeah, let's move on. So let's talk about play Rick's. So the the article that Joe you gave me was mobile game developers are buying into Rivals instead of selling out by business world. To be honest. This wasn't a great article do we can talk about play Rex? I think playworks is really Yeah, yeah, exactly. So let's let's go on a deeper dive on Play Rick specifically like the news this week was that they acquired I pick c i pi x and M. Sorry actually, yeah from Serbia. There was no reported price. However, unlikely very large just because at least from things like a fanny they don't have any significant Revenue. So this is actually more likely just kind of a talent acquisition and kind of bring in sports Studios for play tricks. I picks was kind of a small scale casual developer from Serbia developer various Match 3 and hidden object games. Do you know more in a bow? Yeah, so they were they're known for hidden object games. I think they were developed some of the biggest games that were published really is on the big fish platform. They're also doing all kinds of interesting things. Like they have a PC and VR stuff but like yeah PCV are they Published comic books but it's definitely a small video just watching Eric laughs in the background. So yeah, you try to put lipstick on a pig dude. This thing is just a small little rinky-dink. It's a small. Yeah. I know them. Well, I know Mirko the CEO really well and loops and you know, they're small studio with really with great artists Serbian gaming scene is booming. I think it's an interesting kind of extension in that sense and And you know, it's I think clerics which is frankly gonna find Talent anywhere they can and given the proximity of Serbia's proximity to Russia. I think that's helpful. Yeah, so I guess going into the actual strategy of like why they picked up the studio right? Because this article least what it talks about is an interview with the Play Doh clay bricks brothers who own player X over the past year they've spent more than a hundred million on Acquisitions and Planning to more than quadruple their current portfolio of titles from 4 to get 16 hits so actually looking into their acquisition strategy and if you comp that towards like Zynga, which we've covered a lot on this podcast. It's actually very very different direction instead is Zenga who say, you know choirs guys like small Giants who are kind of very proven revenue and then kind of growing them by liveops. You have play reacts who are buying Studios, I would say much more on like a fire sale and then kind of integrating them into their core competencies of match three and hidden object live operations supporting their live teams with additional resources because if you look at the types of comedies at the be inquiring like I picks is a grav advisor Zafir next errs, like it's unlikely the lessons listeners here have heard them and many of them were like Outsourcing company for casual games or just kind of struggling casual game developers because play Rick's is going for A acquiring the students just for talent and then leveling them up and you can see it from the quote from this article of from the brothers that they're taking a much longer-term approach. We are helping our portfolio of games or companies grow over focusing on acquiring Revenue directly. So in order to actually do this acquiring all these companies so that they can eventually create new titles over the next couple of years to actually push their sales with the goal of actually rivaling Activision is their overall ambition. So if you think about this acquisition strategy you think about the current state of play Rick's can actually compete with something like a decision. I say that's pretty overly ambitious my current read on play Rick's of course, like I'm huge fans of the company. They've done some amazing things over the last really couple decades, right? Like they've been around in the Casual space for a long long time. Same type of timeline is King, but I see player X now kind of at the same point that King was near the Nearly acquisition by Activision because you know, like mastering hidden object games typically actually scale pretty well like sequels and sister games tend to do really well and allow accommodate actually stack Revenue. We're kind of eating into their base King had Candy Crush. They had farm farm farm hero saga. They had pet rescue. They had all these different types of games all stacking on top and while no sequel surpassed kind of Candy Crush, they've all been Ben and then successful business units on their own so playworks really was no different. So like if you look at their transition from fish Dome the card and escapes to home escapes each have been kind of continually new hits for clerics. Definitely not to mention Township continuing to chug along side those games. But if you look at kind of Kings trajectory, they're scaling engine eventually slow down after Jelly and soda actually eventually forcing them to today whether really investing really only in candy. - either in liveops or spin-offs and it's not two not King. They had a lot of talented people constantly soft launching new ideas, but it's hard to build success in the shadow of a game like Candy Crush and they see play Rick's is likely at the same point, especially look at the rpi's of their recent soft launches. So if you look at Wild escapes, which very Innovative Lee is Garden escapes with the zoo is about a 30 Cent RPI from three months from launch and manner matters, which is I think which is there hidden object game. It's roughly about 60 cents. You compact the garden escapes of 1.6 and home escapes of two point three dollars. So these games are significantly under performing versus those games. My takeaway is that the formula of like X escapes Garden escapes home escapes is diminishing pretty quickly the value of this model similar to when King kind of struggled to continually adapt after that Saga model. Of diminished players who will struggle to adapt especially if they're bogged down by trying to teach some of these struggling acquisition Studios. They should focus these Acquisitions on actually producing content for these existing games so they can actually free up some of those Central resources and talent to build the next big thing. That's my take. JK. Yeah, so for me, I think that player X is in a bit of a unique situation and I'm also a fan site. I don't mean to be critical anyway, but if I'm being honest, I don't quite buy the narrative that's being put forth by the article, which is that the brothers are sort of, you know choosing as their ideal strategy to kind of become one of the biggest players and compete with Activision, you know, the word on the street. It's been pretty, you know, well rumored that they Ben you know up for sale for quite a while but you know, a lot of the concerns about them has just been you know geography so being in Russia that they're extremely distributed and so because of the Geo issues and also the price like that there's been kind of a lot of you know, controversy internal not controversy, but, you know kind of disagreements in terms of what the what the sale price would be so So I kind of agree with your taking them that they're kind of their kind of reaching this this point of scale where things are, you know, they're they're reaching diminishing returns. And so like having to go this path where they're going after these lower costs Studios, you know, my own feeling is that you know, they've done an incredible job that you know, the that they will continue to grow to some degree, but I just don't quite think they're going to It sort of Activision levels with the current trajectory and with the current strategy part. Yeah, I mean, I been looking at this company for a while because I was just kind of looking at the sequel success that they had with their puzzle games and this is the same kind of thing is that there seems to be some kind of insatiable desire demand for puzzle games which still continues to blow my mind, which I've said many times but the companies Unremarkable, it was grown from like 300 million all the way to up to the almost 2 billion and lat this year. So according to Center Tower anyway, but I mean we are seeing a Slowdown of growth I suppose but it's kind of law of large numbers, right? It's hard to grow when you're sitting at two billion dollars, right? But, you know at this point it's almost too big to acquire right for many parties that would be interested. So, you know even something, you know, something like Zynga just could not You know get this thing done because if they are sitting at two billion by a little bit more than 2 billion any multiple on that Revenue would get you to a 5 6 7 billion dollar deal. Right? And that's just a lot of a lot of ducats, right? And and again you said earlier like the country risk and in their concentration on titles so very, you know is all risky and it creates a challenging deal and it's possible that one of the big China companies did we Play reham being acquired by Aristocrat recently and they have a similar issue in which a lot of their operations are Ukraine I suppose and so, you know, it was two credits just a what Australian company that does traditional casino games and also has been acquiring some stuff like the big fish guys. But anyway, so I just don't see any of the publicly traded companies in the u.s. Getting interested in this because the boards and the shareholders are just not going to be comfortable with the company that's completely distributed employees in places like Russia, right? And there also could be some logistical challenges of doing that as well. So what do they do? I don't know. I mean, this is a tough one, right so they could treat it like a piggy bank right kind of in this is kind of like wargaming right with those guys are just basically minting money and cashing checks, right and to lesser degree social points and similarly much to a smaller degree. And so they basically just continue to build it. continue to make money I suppose but I think it's going to be tough to get an Acquisitions done. And and I don't see an obvious acquire at this point unless some of the Chinese guys would be interested. But if they don't do very well outside of the West as far as I can see, so that's all I got on that one. Anything else? Yeah, probably the other thing too is just as we've mentioned before in the podcast that the list of acquisition targets is getting smaller and smaller. So, you know, at least they can actually acquire a lot of these smaller Studios right like whizzing. It's better like when they're trying to buy Revenue, it seems like that well has definitely dried up but if they can successfully integrate these teams, which I think is definitely possible with their building up, you know, semi-successful match three hidden object developers and integrating them into Just building a content for these massive games that that model can work. I think there's a with small Channel games and got query like a 50-person team with players to acquire six seven eight hundred people that work all over the place. It's really hard to integrate such a became. My point of the on this is classic style of players games great production value beautiful games, and I think they're going to do just fine if they stay on their own these games generally have super long lifetime. They tend to monetize really well. And I think they'll do fine. I mean they're if they cannot get acquire this should look into you know ways to grow and I think this is an interesting way to do. So, but you know mobile gaming is challenging. We'll see we'll see how successful was going on. Yeah today at we're talking about like the number three publisher on mobile here, right? I know I know we could knock them on their acquisition and their ambition here, but these guys have done a lot of amazing work. I know but you kind of want these guys to just cash out big and become I mean, I'm they probably are Hundreds of a Millionaire's, you know, but make a few billion would be nice. Right? Well, I mean, I think they're each worth one point six billion or get out. Oh, yeah. They're they're making I mean the cost of operations is not that high because they have people all over the place. It's not like a San francisco-based startup. So I think and and there's like only there's you cannot spend a billion dollars in each game on Advertising that easily so you can only spend so much anyway, so they're definitely you know, Banking some money and interesting company sure. Also while playing while escapes while escapes is nowhere as good as home escapes and garden escapes know as a different different retention mechanic and I think that's what that's why the game failed. I still think that I still think there's a lot of Threes man. I think you could do two of these games and then number three is always going to be or maybe it's because number three you try to do something different or something like like I agree with you on that. I play these games like crack addicts. I I wasn't a big fan of puzzle games until this thing came out. So anyway, yeah more power to I mean, they're killing it. So enjoy one last note. So one of the companies we've been talking about in the last few podcast. Well, we'll be announcing in the next couple of weeks. I'll just leave it at that listen to it rumor guy. All right, dude, I think wild escapes failed just because they didn't put Austin the ball dude on the main icon. That's is that it that's it. I always keep going keep. All right. So the next thing we're going to go through this really as fast as possible. So the game awards 2019 with 1212 big announcements. This is a story from I don't even know where it doesn't matter. So every year the game awards go in the holiday time frame and really it's the only place To announce things or the future of games in this this kind of time frame, you know, we have GDC III games Khan and games awards show. Those are the big kind of Beats over the year for you know, publishing, you know, console PC Etc the Tokyo game show used to be relevant, but I am more since Japan's Consul businessman struggling for years. So I'm not going to spend a lot of time talking about the wards one because I think a lot of these words shows are pretty lame and pretty crappy but I mean, Lots of news say Sakura one best game of the year and everyone's going to about what the fuck is curable. Right? I mean no one cares right really excited. I played it course, right but no one cares so but what's cool about it though. Is It ultimately is a Showcase of new titles and things to come and I think that is actually more interesting. So I'm going to run through these as quick as possible with a little bit of commentary, but the first thing they announced that was the biggest thing was the actual physical manifestation of Microsoft Excel. Fox series X and we're going to talk about that in the next story. So I won't go too much into it now hell-blade was announced which is a sequel from Ninja Theory pretty chord Niche game Bravely. Default is an RPG from Square Enix coming to switch yawn PlayStation 5 announced the first third-party exclusive which is really interesting. I'm not quite sure why they're doing exclusives at this point. But let's I'm sure they got paid for this what's really weird about this is being published by gearbox, which is not you know, the 300-pound gorilla or where the expression is of publishing. I would imagine that another publisher would have better like Sony and then Blue Hole the guys who do Pub GE announced this prologue thing, which we don't know anything about from the trailer Riot unveiled their first game from the third pilot publishing arm, which I'm laughing a little bit ruined King which Games that are based on League of Legends Universe from third parties, you know, good luck on that one fellas. And then ghost of Charisma was a PS4 exclusive. I don't know anything about that one. And then the one that dry keeps driving me. Insane. Is this Final Fantasy 7 remake, will you just release this stupid thing? I mean, this is another trailer for a game that must Bend develops. I think so for a quick history on this. The original game was made for PlayStation original and 1997 and that many considered to be the The best Final Fantasy ever made and I'm not debating that at all what I'm saying is they've been talking about this fucking remaster since 2000, you know, and it was rumored to be enveloped in the 2000s and then it was and it was on PS2 or something and then it got canned and then there's speculation since 2000 that was back again. The Fanboys have been all over this. There's always rumors and speculation around that but evidently the real development really didn't start till 2014 and they seem to be postponing and delaying this constantly, right? So we're talking about a freaking remake just release this thing and be done with it. I'm just sick of hearing about it. But anyway, but you know the worst part of it this the game that comes out in March is part one. Oh, that's right. I forgot about that. Yeah, so it's just Final Fantasy 7 part 1 I'm never gonna hear the end. It's never going to happen. Yeah. Anyway, alright. The next thing was sounds of cyberpunk. I mean, I thought it's cool that cyberpunk actually gets kind of some kind of Nod because that's probably going to be one of the biggest games next year. So that was cool gears tactics and strategy spinoff from Gears of War good luck with that one. And then the new development team for tail till announced Wolf Among Us to which is interesting that they're going to be able to get something to show this soon because it seems really soon. But yeah, we'll see how that goes and maybe that wasn't development before and I'm not yeah, it was always the right talked about that then Fast and Furious. Foods from slightly look everyone out there. That's kind of trying to get compete in the console space. Stop making racing games. Okay racing is dead. You can look at MPD you can look at all the data in the Europe and you're going to see the same thing that everyone else sees is that racing is not what it used to be Need for Speed commands like three or four million at most every time it comes out and Fast and Furious throwing a license on that's not going to change things. So so overall as you probably can hear from my demeanor this show kind of sucked, right? Right, there wasn't these epic announcements that there are at the show right last year. We saw Super Smash. We saw a really cool kind of not to reveal but like a launch trailer for Mortal Kombat Farcry rage to the year before is like death stranding Bayonetta Zelda breath of the wild like there. This has been a Showcase from some big big titles, but perhaps it's because of the timing we're in right now like we're the new cycle starts next year, so they didn't really have a lot to show of the new games because they're kind of waiting till I get it. We baked they may be restricted in terms of what they can release from Microsoft and Sony excetera. But so next year. I'm hoping they'll be a lot more showcasing next-gen Hardware software and and the like but a little bit disappointing this year and but you know what? Let's hope for next year because I think next year is going to be very exciting for the space in general. Any other thoughts guys? Hmm, not much. I agree with you who's pretty light one question. That was like why Microsoft chose this venue to launch their console versus like launching it on their own terms on their own stage. Well, I mean, I think they're just trying to beat the Sony to the punch, right? I mean they're going to have to share the stage at E3. And as I said, this is the only really venue to announce anything before TDC and CTC is not the right place real. Lee I mean, I know it's a game developers conference and a kind of makes logical sense, but like it's not a big venue for releasing big announcement it's possible that they do that but I think they'll probably hold off until III so it gets them out early. I wonder how many viewers they really get for this. I don't think the show gets reviews but I think the Press coverage probably makes up for it. You know, I would think but I'm not I'm not I haven't done this kind of PR marketing work for a while. So I'd have to ask someone about that. Anything else that really I think the only thing I was pissed at was super smash didn't announce their last DLC character is really hoping for that. Yeah, I think from my side. I am one of those Fanboys super excited about the Final Fantasy 7 remake should have guessed that'll definitely be my number one purchase priority for next year, but beyond that I'm just kind of disappointed at The Disappearance of old-school RPG type of You can coop RPGs like the ones that you know BioWare used to make so it seems like it's all Shooters narrative action puzzle type of games, which I don't object to but definitely feel like there's a hole in the market. So that that's not which games which games from Iowa like Janet Leigh. Yeah or the old like, you know, kind of even going back to like PC like Neverwinter Baldur's Gate like back way back when no, but then they had after that they had even like games like Jade Empire, okay. Okay Knights of the Old Republic and you know, even like Marvel Ultimate Alliance like those Co-op RPG type games it was big. Is it the coop aspect that you liked? Because like I like girl look out of Worlds at a world is a really good one for this year. You should definitely check that one out. Yeah, I've got it. Actually I was gonna that's what I do this holidays. I was gonna play out our worlds like I want to get through. I love that kind of game. That's like my thing, but I'm gonna give that a shot. I don't think it's co-opted. Oh, but I'm not sharing with like nicely will Republic in this type of thing. The original that wasn't go up. Yeah. No. No, I those I consider those two different genres, but both of those types of games. It feels like his kind of disappeared. Hmm. I think a lot of stuff went to like in terms of coop went towards like looters Shooters and MMO e type of stuff and then in terms of like old-school RPGs, you've got Skyrim followed big content treadmills Witcher cyberpunk now, yeah, I mean cyberpunk will be the yeah that yeah, that's the manifestation of what you're talking about. I think. Think over time, right? Alright, so the next thing is about Xbox series X. So basically the articles about it's basically a PC, which is totally true. I thought it was cool that they use this as a showcase for the first details around the design and for the first time the game the things we made as a tower specifically I think you could have used as a tower historically, but this one is like freaking power right looks exactly like a PC. And the IG hadn't guys were funny. They were like the design cues makes it look like it's taller and stronger, you know one analogies like a skyscraper like, you know, the Salesforce penis in San Francisco, which my mom continually hates every time she sees that thing in the middle of our city. Anyway, hopefully it goes down an earthquake or something. So Jesus here big one. The big change is really the ability to obviously put it as a tower and but I think they people like kind of like it overall. It seems like the design is should be more a little bit more divisive, but I think it'll be fine. And then the overall volume of the thing is actually similar to the existing consoles. It's just in the more of a square shape so you can lay it flat or go have it up. So and the only other real kind of like design q that they saw was at the new controller has the pro d-pad and a quote-unquote share button, which I didn't really go into because I'm not all that interested. But anyway, the innards 4K 60 frames per second some Zen to in our DNA architecture from AMD. They are going to leverage in a ray tracing in that and basically solid state storage system. So I may be wrong on this one because I was thought they were going to do a hybrid but they basically are claiming. It's gonna be full solid state. They're going to offer quote unquote four times the CPU performance at the Xbox One and Two X the graphics power of the Xbox One at X. So So, you know and then they give us this meaningless performance metric of 12 Fair teraflops, which I think it's like the size of everyone's penis or something and that's teraflops. But so basically this is a PC under your TV to put it simply and when all is said and done I think the only real compelling future feature that that really sets it apart from the pro is the SSD architecture which will lead to absolutely massive improvements in load times, which I think is a huge feature. But anyone that's ever used an SSD on the PC can attest that this is the difference is Night and Day from the traditional hard drives. So I think that's cool. But from a graphics perspective, I think even the two times GPO power of the Xbox One X is kind of like You know, I don't know how easy it is to going to be able to discern, you know from 1080p to 4K, you know like and and and these kind of jumps and power anymore. You know, I think the biggest jump we saw historically way back. When was PS1 and PS2 when you went from 480i to like 720p and that was a dramatic dramatic change. And even for the PS2 PS3 was kind of solid, but it wasn't, you know 720p they were upscaling to 900 and maybe some things were doing 10. ATI but very few things were to actually doing 1080P and the difference is relatively minimal. And then when you looked out at Xbox One at this cycle, I don't think it was really all that dramatic of a difference visually, so I guess to me The real question I have to answer to understand where our Publishers are going to be in the next couple years is we know that the next year these things are going to sell off the shelves and they're going to any unit that can get in the channel. They're going to sell but the real question is how well they grow in year two year three or four verses the last cycle. It doesn't even matter at this point. We talked about this last time are few other times like these things are so freaking similar right in terms of infrastructure. It's like you be able to play the same game on either console. Next year, you can probably buy Call of Duty on one DVD and play it on both PS4 PS 5. So so the question really is is it really a compelling enough to upgrade if the visual Fidelity is not all that compelling relatively and in all you really getting is faster load times. So I don't know that's kind of the question. I need to figure out I'm kind of I'm definitely bullish on next gen consoles. I just don't know if these consoles are going to sells fast. That's kind of my only concern. But you guys yeah, I don't know that going into the actual design of the Xbox not a huge fan of the tower just because it I have no idea where it's going to fit in my TV stand and one thing you did get wrong PS2 was 44 ATP. So I think when you're talking like PS2 PS3 and PS 3 with 720 and PS4 was 1080p. Oh, you're right. Sorry. Sorry. Yeah, I totally messed that up. I wrote it down wrong. Okay. Yeah, that was the big jump though PS2 PS3 Xbox 360 to sorry. Yeah PS2 Xbox 360 / PS3 got it. Yeah, but yeah, I don't know. They also a lot of this article focuses a lot on Phil Spencer talking like how he doesn't really want to sell a lot of consoles right that he doesn't really feel like the consoles are part of his business. Did you read that are I didn't read that part. How did I miss that one? Yeah, the exact quote was the business isn't how many consoles you shall have? Yeah, this one for me was a head scratcher and I used to buy all the consoles but I sat out the last Xbox just because it didn't really feel that compelling and Halo kind of lost it for me and I'm probably going to sit out. This next one is well and it's like the danger here. Is that Microsoft the more they Make the Xbox feel like a PC and the more they push Xbox games everywhere through Game Pass X Cloud more. People are just going to question. Why do I even need an Xbox if you have a PC or if I can get the games on something else and feeling I get I don't know if you guys agree is that Microsoft is kind of I know they're kind of losing the game here and there, you know Sony's just going to win by default. Hold on. Okay. All right. I don't disagree with you on your sentiment on Microsoft. I think they need to show. They know what they're doing in there come out and got with compelling content That's Unique like, you know, whether it's Minecraft whether it's some other game at their other guys make that make a compelling platform. Yeah, you certainly the hardware design is not going to sell it. Right and and I've said a million times. I still believe this is it Sony is going to totally win first three years. There's no doubt like this the way the positioning is but it's whether how much investment and how much content they can come out with that will compel a broader audience to come on board with the Xbox and the different business models that they're going to be able to use try to innovate on unlike Sony which is basically going to sell a box and sell software right which is what they do. So so I'm again bullish on the overall console cycle. I just don't my my feeling is that we will not see as many Hardware units sold as in the first three years as we did the last time and that may be a problem to some degree. I think that's it. So, thanks again Nebo for jumping on and yeah, that is a wrap for twig 61 catch y'all later. Alright. Talk to you later. Thanks guys.
Wazzup DOF Nation! On the pod this week we have myself Joe Kim, Eric Kress, and new daddy club member Adam Telfer. We are also joined by *the* Nebo Radovic from N3twork. One of the very few handful of people in the world who has bought at massive UA scale for mobile having worked not only at N3twork, but also at MZ and Nordeus (Top Eleven). So we'll kick off with a couple of UA topics which is becoming increasingly important to know about for game executives, PMs, and designers! Don't ding our reviews for talking about marketing and pls do help support us with good reviews if you want us to keep going with this type of content. Here are the articles we will cover: #1. why d7 ROAS may be the worst kpi to optimize towards since CPI (written by Nebo and we will talk to the man himself about this) #2. What comes next after Facebook’s VO campaign strategy? #3. Mobile game developers are buying into rivals instead of selling out #4. The Game Awards 2019: the 12 biggest announcements #5. The Xbox Series X is basically A PC Hit us up on Twitter with any feedback or suggestions for news to cover. You can reach us at: @jokim1 @ekress @m_katkoff @adamwtelfer Guest Twitter: @eniac Also be sure to check out JK's latest GameMakers YouTube channel series on mobile marketing/user acquisition: UA Coffee Talk on Creatives Optimization! If you are interested in the D7 ROAS discussion you can also watch the in depth discussion on this topic that was part 2 of UA Coffee Talk here: Optimizing UA Budgets by D7 ROAS | UA Coffee Talk Also hit the subscribe button to get notified when we deconstruct the latest news in games! 