Episode Transcript
[00:00:00] Speaker A: Foreign.
You're listening to Level up with Melissa Zaloof.
[00:00:12] Speaker B: Okay, so welcome back everyone.
I am Melissa Zaloof, as hopefully many of you know by now. And you're listening to Level up, the podcast for people who love making, growing and of course playing mobile games. Today I'm here with John Wright, who I do know, but for those of you that don't, he's ex VP of mobile games at Quali, also a contributor to Deconstructure of Fun Today, a strategic advisor and consultant to many different apps and brands, and once upon a time worked at Iron Source, as did I. So we have had some fun in the past and hopefully we'll be about to have some fun today. John, thank you very much for being on the show.
[00:00:51] Speaker A: Melissa, thanks so much for inviting me. It is amazing to be talking to you again after knowing each other for such a long time and I'm really, really happy and excited to be here.
[00:01:02] Speaker B: Yes, me too.
So what we are going to talk about today is sort of like your vision and predictions for the future of the mobile market. But before we do that, as is customary on the podcast, tell us a little bit about your journey in gaming, how you got in to it into the industry. Were you always a gamer? What's your favorite game? Give us all the.
[00:01:24] Speaker A: Yeah, yeah, sure. So, so yes, gamer. Since I was 4 or 5 years old, I remember getting a Commodore 64 as a hand me down for my cousin Jamie. Changed my life. I remember the best Christmas I ever had when I was about 5. I got a master system with Sonic pre installed and that is all she wrote. That was 35 years ago now. You know, since it's turning that master system on and playing Sonic, it has changed my life. And you know the most amazing thing Melissa, is now my kids are playing Sonic games, my kids are watch Sonic movies and it's this transgenerational nostalgia but pride and you know, like I, I love it, I love it so much when, when, when the kids play the games I used to play.
[00:02:08] Speaker B: Yeah, totally.
[00:02:09] Speaker A: So the passion's always been there. As a lifelong gamer, professionally I didn't get into games until I was probably about 26. I was a chartered accountant working at WPP and you know, management accounts and all that stuff and I hated, yeah, look, I hated my life, Melissa, you know, like never born to be an accountant.
[00:02:31] Speaker B: I could have told you that.
[00:02:33] Speaker A: Yeah, I know. But look, when you're like high school guidance counselor is saying oh you're really good at maths and statistics, you should think about Being an accountant and then, you know, growing up in a very working class Bucola family. Your parents like you, they want you to have a career, they want you to be a professional, they want you to do better than they did.
So I went down this road and I spent six years studying, I spent four or five actually working in finance and accountancy. And you know, it got to this point where, you know, my wife was like, look, you don't like what you do. And, and you're 25, right? Like you're 25, you're looking down the barrel of 40 more years, four, zero more years doing something you don't like. Can you do that? And I was kind of like, well, it pays really well. But no, I don't think I can. I think this is going to destroy my soul.
And yeah, look, it was my wife who sort of, you know, pushed me to do what I was passionate about. And you know, I, at that point I went into Green Man Gaming and I was, I was there for about six months and then James Sallins, the ex, you know, MD of Europe, of Iron Source gave me a call.
I had someone that I was captain of the rugby team with. So a guy called David White working at Iron Source, he said to James, you should speak to John Wright. And James was like, sure, let's have a meeting. And again, that was kind of where it all kicked off. So I had like about 6 months experience in performance marketing for PC console and then I dived straight into the world of mobile. And I remember in week two I flew to Israel, I went to the Shalom office, right? And you know, and like the old world, I am sort of old.
[00:04:14] Speaker B: Oh yeah.
[00:04:16] Speaker A: And, and, and like I said, that was kind of the, the big start, right. And I, I very fortunately I got to work with some amazing companies through Iron Source and working on, you know, performance marketing, UA spends, you know, and then I pivoted into more monetization and then I, I was part of the hyper casual movement with the Unified Team in Tel Aviv, you know, under the Davash Kanezi. And you know, that was, that was really where I think I started to grow my career. And after that I obviously, I left Iron Source to be part of the founding team of Lunar Labs. And then we obviously had the Lunar Labs acquisition by Iron Source.
[00:04:54] Speaker B: You thought you could get away, but no.
[00:04:57] Speaker A: And then I came back and then you know, obviously I spent a couple of years at Unity, you know, managing the, you know, the client services part of Luna before venturing off to Quali for years and being VP mobile games and you know that was, that was an amazing experience managing 200 people, Seven Studios Publishing, M and A. You know, highly complex because of the different sort of like PNLs and everything on and whatever else but really came to a nice sort of intersection of understanding the technology and you know, the other side of gaming like the technology resources that power games, mediation, user acquisition, balancing live ops and then actually learning how to make games. And for me that's what like completed and well rounded my experience now, now I think I have both sides of the coin. I know the business of games and I know the production of games and together I feel it makes me a better person, a better professional.
[00:06:02] Speaker B: Let's hope it does the same for me.
So today we're going to discuss the mobile gaming market from your perspective and some of the big trends you see coming down the pipe. So let's get into it. Give it to us. What are the sort of like three or four big, big things you think we're going to see impacting mobile gaming this year?
[00:06:23] Speaker A: Yeah, so I mean if we look at some of the, the ones that seem to me a lot of, a lot of it is around investment, right? So what we've seen very recently is like the most recent convoy report came out and basically highlighted the fact that Q1 25 it started to show a resurgence in deal flow.
So obviously deals of all different size and different gravitas are very good for gaming. What we want in the industry is investment, right? Investment allows us to grow games. New studios get the resources that they're able to do to do that.
But equally on the other side we've seen other, other most recent reports saying that 62% of game revenue today is coming from games over five years old, which I think is a huge, a huge eye opener for what a lot of teams should be investing in. And I think over the last year or so we saw a lot of big companies say that they weren't going to invest in new games.
Right.
And what that sort of says to me, Melissa, is that LiveOps and sustaining games is really kind of the future. And what we've seen, and there's been a lot of phrases thrown around in the industry lately which is that retention is the new ua, right? It's about how do you retain your users for longer and how do you make your LTVs of those users increase.
So things like cross product option strategies, you know, live operations in general is, is very, sort of a very broad term, right. Are we talking about, you know Calendar events? Are we talking about unique offers? Are we talking segmentation or personalization?
Are we talking about the rise of IP integrations?
And I look at obviously Super Play just obviously launched with Disney Solitaire and you know we are seeing like a lot of this stuff kind of interlink and connect.
But yeah, I think obviously Super Play with the new being a Disney game I think is tapping into an amazingly wide, very loyal audience, you know, compared to obviously King who did have done recently, you know, Candy Crush Solitaire that is doing a fraction of what they're doing.
So there's a lot of things to play here. I think.
[00:08:41] Speaker B: I think it's also not first of all that this sort of like and you. I've seen a lot of different data slices of this or like you. It came up in Matthew Ball's what was it State of Gaming Report.
This, this, this stat around sort of like what percentage of revenue is concentrated in older games has been sort of like coming up in a bunch of different places in over the last few months. And the response on sort of like okay, it's more important to get more out of your existing players than it is. I think SciPlay also did something really interesting, wasn't it on deconstructure of fun on exactly this. But I feel like this is also something which at least in the mobile gaming space we've been hearing a lot already from the sort of like rise of or launch of att because then when UA became so challenging, the natural instinct was okay, we need to be able to get more out of our existing players.
So I think it's kind of like in many ways sort of like a slow burn, long running trend that maybe is only just getting more and more concentrated. So I hear what you're saying. It sort of feels like launching a new game today is riskier than ever. On the other hand, you kind of have AI which plenty of people are talking about because it's. That's. Everyone loves the buzzword.
How do you think AI?
Are you sort of like an optimist or a skeptic when it comes to AI and how do you think that's going to impact new game? Because, because in theory, right, if AI reduces production time and production costs and sort of like accelerates time to new game or time to sort of like prototype, you could sort of see the opposite thing happen. So how do you see those two things playing 100%.
[00:10:29] Speaker A: So firstly, the reason why it's never been harder to launch new games is that the unit economics of games is currently not Working the way it did previously. And as you see, ATT was a massive driver of this, right? Not only did it increase CPIs and CAC, but it also brought down ECPMs and affected LTV.
So you know, ultimately that has put a bit of a spanner in the works of how we come to market with new games. However, there are still new games coming out and there are successful new games. We just spoke about Disney Solitaire, but for me, AI is an amazing lever, right? It's an amazing tool. Like if you ask me categorically now, do I think that in the next, let's say three or four years, AI will develop a game that will launch and become a unicorn? My answer to you is no. Like I don't think there's going to be. Because I think there's too much complexity Melissa, with like imbalancing of economies, live ops, you know, content will even, even like level production and stuff to a certain extent meta progression. There's so many, so much like games is so complicated. There's so many moving parts. Like what we do is build like these substantial technology or technology small businesses, which is what your apps and games.
But, but to answer your question, we've already seen dramatic implications of AI in marketing, right? Like market production has never been better and easier.
You know, you can literally are like if you're doing like new GC, which is another really popular, the back of TikTok and this whole, you know, attention economy generation that's, that's coming through. But the marketing stuff's been done for the last couple of years. What I see in the next 12 months, and I'm starting to see now is more around the prototyping and the validation side. So We've all hear phrase 5 coding, right? The idea is that creative people, people like you. I'm not creative, I'm a numbers guy. People like you could like using, you know, an AI and a prompt system, build a game, right? And I think that aspect of it is. And validating concepts very quickly is going to be highly important. Because the problem with today, Melissa, is like during the hyper casual phase, it would take us two weeks to a prototype and then two weeks out of date and test.
Now like, you know, before I left Kuali, we increased our prototyping time from two weeks to three months, right? And this is the evolution of the complexities of games. When you have to add in things like meta progression and stuff like that rather than just a core loop, this, this stuff takes additional time. So I think AI is going to Be transformative in the early stage and the ideation stage and also reduce your say, need for the engineering support so your engineers and developers can basically continue to work on your back catalog and your successful games, you know, doing all of the updates they need to prolong your, you know, your, the revenue coming in. But AI itself I think will allow very creative people the ability to create very good, very quick prototypes, increase the rate of testing and then the conversion to success per year goes up. Because at the moment if I can only do, if one studio can do only two games a year, that's two shots on goal and it's, it's easy to miss two shots but if you're doing 20 shots, one of them will hit exactly right. And, and this is the thing, I still think that like I, I'm, you know, and I'll happily make this statement which is, you know, I don't think AI is coming for good engineers jobs, you know, good engineers and developers in Unity, unreal, whatever. They are always going to be worth their weight in gold because to get the best product I think you're still going to require them. But will AI vibe coding all this stuff, you know, increase your ability to get stuff to market without the requirements or their requirements? Yes. Then when you find something that is when you allocate the best possible team to building it out and, and creating the most complex, robust, amazing experience you can. That's where I think start impacting and.
[00:14:50] Speaker B: To like return to investment for a second.
Which is I think where we started because the deal flow increasing but also sort of like I think the industry still feels under pressure and as you say kind of hard, hard to get attention or money with a new game. What advice would you have for developers who are sort of like looking to get funding for their new game?
[00:15:14] Speaker A: Yeah, look, it's a really complex sort of time. I think there's, there's a lot of deal flow either on the big acquisitions. Obviously we saw Triple Dot acquired the app loving back catalog officially today. You know, we saw Mini Clip acquire Easybrain for a billion. We've seen Scopely and Niantic acquired by Savvy. So we've seen these big, huge consolidation place which is part of their M and A strategies to build out those big sort of juggernauts.
And we've seen investment in the very like pre seed stage. Right like getting some but, but predominantly for teams with heritage. Right. And it's part of that VC checklist. It's like oh, you were part of Peak's founding team. Or you were Peaks first.
Yeah. Or you were ex play Tika employee 15.
Yeah. Okay, cool. Like you've got, you've got some, some weight behind you, you know. So, so that is still a very big part to play. But it has never been harder to raise money as, as a new company, as a new studio, especially if you don't have that heritage piece.
What I'm advising a lot of people to do now Melissa, is to explore other options. Right, so we'll talk about such as. So, so look, there is an abundance of like angel syndicates in the gaming industry. So you've got like Nick Button Brown has the game Angels, you've got egd, you've got, you know, some of the, I forget the name but there's a few focus on just pure female run founders Angels. Again I can't remember the name exactly, but there's this angel syndicates. There's a lot of government schemes like one of the companies where I'm an investor, we just raised you know, half a million dollars through a research grant in Norway.
Right.
And, and the UK has just put a bunch of schemes in at the moment where you can raise 150, 200k to build out an R and D project. Right. We know that in Turkey that they give huge tax deductions, you know, for if you build studios on university campus grounds and you also have ability to, to, to refund half of your UAE which goes against your line. So like there are an abundance of, of government schemes and tax and tax schemes globally that you have to research in your local region. It's really important in Finland, Finland give up over half of, over half of what you raise, they'll give you back as a loan, a tax free loan. So if you raise half a million you can get, you can get another 250k which extenuates your burn dramatically. Right.
So being smarter and more educated on this stuff is really where you can sometimes get just the right amount of money. You need to validate the concept because again we'll move to the VC stuff. Now VCs right now they don't want pre validated concepts.
What they want is validation. They want to see metrics and if you don't have enough money to build an mvp, do some of your own marketing. And we're not talking that the days of like raising money off of a day one retention list, you know, like I'm speaking to VCs every week and I have been for I don't know, the last six months and like I said everyone is wanting more, right? And that's kind of pushing the pressure onto the dev. And again the devs then required to find their own funds and a lot of the time what they're looking for is the dev to have their own capital, right? So again, it's fine if you're ex super play and you've just, you know, earned a load of money and now you've got your own money to invest, but a lot of people have passion and creativity. They don't have 250k, 500k to build out their own business and their own MVP. So that stuff, again, trying to find money wherever you can through angels, through syndicates, through government grants and schemes is super important in today's market.
And then, yeah, if you look, if you're going after the VC money, stick to the, the traditional sort of stuff that you can. So obviously what they look for a lot of time is, is the team, the idea, it's the, you know, they look at the heritage, they look at what you've done previously. If you've had an exit or you've had some sort of success mark next to your name, your, the, the, the risk mitigation calculation they do in their head improves, right? They've done this before, they've raised money before they've sold a business, they're more validated, right? Give them plus, plus four on the right, on, on the score, right? And then, and then you're again, you're looking about like the tam, right? Like, so the game you're building, what is the total addressable market that you can, can attach to, right? And if, if you're going after a casual game and you know the casual ecosystem is worth 30 billion, then there's a lot of money there to be made, right?
[00:20:08] Speaker B: Although it's like also sort of concentrated and dominated by sort of meaning. There's a lot of. But there's, but it's also harder to.
[00:20:16] Speaker A: Crack into and this is the quandary, right? It's huge tam, extremely hard to knock Royal Match or Candy Crush off their top peg, which the next that the VC will look at is like, what makes you different? Like what is the USP of the product? How are you going to tap into the tam? Like what are you doing different secret sauce? What is the game or the product that you're trying to, to do?
Obviously the. And then you've got the other stuff which is like the financials. So like, show me a nice hockey stick graph, right? Show me.
Is that this is going to be A unicorn. And yeah, very funnily enough, I had a meeting with someone who's an LP in, in a 16Z recently and I said to him like, hey, like one of my companies is going for a Speedrun.
Do you like Jonathan Lau who's like one of the top guys at A6D? He said that he wants more people to do UGC and AI. And I said to my friend who's an LP and A6CE, I said hey, are you telling me I should tell them to develop this even though it's not part of their idea and their vision and da da. And his advice to me was yes, take the money. You know, like do whatever you can the money because once it's in the bank, you know, every.
[00:21:35] Speaker B: Everything. Do whatever you want.
[00:21:37] Speaker A: Exactly. Within reason. But you know, it's easy enough to do and again, strong financials and then you know, your, your plan, right? Like how are you going to grow? How are you going to get to that five year one billion mark? Right. And that's like the development of the product, the roadmap, the team.
So, so all of that stuff is kind of how you build out like a prep. Like that's how you structure a deck to a VC. Right.
And equally, you know, again, A16Z are very famous for this, but they don't, they want it, they want to read it in less than seven minutes. So they want it to be 10 to 12 slides. And trying to do all of that in terms of slides is extremely difficult. Extremely difficult. But it's better than putting 30 slides together because they see 30 slides and then they throw it away. You know, they're like oh yeah, yeah.
[00:22:26] Speaker B: I, I mean I, I feel them.
So we talked, we talked a bit about new games.
Now let's maybe switch to some of the maybe challenges or opportunities for kind of like even big established games. It still feels like things are. Can, can be tough from. Based on. Depending on your perspective.
So. And obviously sort of that one of the ways that I think Hyper Casual clearly went through a real.
Went through is going through a very challenging time and there was this sort of like big pivot to hybrid.
What do you think? Sort of. And I think, I don't think it's interesting to say that because many people have said it and it's been a thing for a while, but what do you sort of think we're going to see next for Hybrid?
Will it continue to grow?
Because it's obviously also a lot. It's a. Just by. And you talked about this. I think when you were talking about the shift in quality, but it's just, it's a longer, it's a longer play.
We're also seeing this internally. Like it's not a sort of quick turnaround, quick validation spend on marketing. And here you have a top downloaded game like you did in hyper.
So what do you think we're going to see next with hybrid?
[00:23:46] Speaker A: Yeah, look, my opinion very simply is that hybrid, and I've said this for a while, but hybrid is kind of a stepping stone to casual.
And I, I truthfully believe that a lot of people in hybrid or, or hybrid in its original state was like hyper casual plus Hybrid in its current state is like casual minus minus, you know, and the align. If we're talking about this on a line, you know, originally it was like hybrid will be here and, and, and like actually hybrid's going to be there and, and really what everyone wants, Melissa, is the same thing. They want to try and find a 5050 breakdown on monetization. Right. You know, we'll talk a little bit about the rise of D2C right. And being in that. But, but really again, hybrid games even like I said, we, we had this ideology of quality which was like, you know, it would take us, you know, four weeks to do a prototype and then three months to launch a game. And then what we found is the prototype alone was taking three, four months. Then it was taking three to six months to, to, to balance and to polish. Because as soon as you, you try and focus on in app purchase, the balancing of the economy and the games become complex.
[00:24:59] Speaker B: Yeah, exactly.
I think it, it sort of feels like what. Where eventually and I think this is maybe a little bit connected to what you're saying because I remember having, you know, a couple of years ago having chats with people and being like, explain to me how it sounds to me you sort of telling me that hybrid games are, you know, balanced between or incorporate both IAP and administration. I'm like, but casual games have been doing that for a long time. Like what, what's new here?
And the answer that I got given was well, hybrid casual games borrow from the sort of like high marketability of hyper casual games. So it feels like where eventually we're going to end up is essentially adding a greater sort of like focus on and optimism, optimizing for marketability inside a typical casual game.
And maybe it's slightly like indexing more towards 50, like a more even balancing between IP and AD, but I don't, it doesn't feel to me like it sustains itself as its own sub genre.
[00:25:58] Speaker A: I completely agree. And this is where I like, for the last year, Melissa, I've been looking at it and just thinking to myself this is exactly the case.
There might be some features that are in casual that you won't see in hybrid. Like they might not have like community based systems or guilds or, or communication systems, you know, or, or true P versus P. You know, like some of these like highly complex, highly you know, long time development and upkeep system, high investment.
Right, exactly. They might not put that in there.
[00:26:31] Speaker B: Because, well, they won't put it in there at the beginning. But if it works then they'll go into, okay, this is a successful game with a, with a sort of like you know, cohorts of, of very loyal players. Now I need to increase retention and invest in live ops and guilds and community based systems and all the kind of stuff that you can't justify at the beginning because it's resource intensive. But which makes sense when you have something successful on your hands that you now want to sort of maximize over the long term.
[00:26:59] Speaker A: Absolutely, absolutely. Like you know, people like supercell develop their games with all of this in mind from the beginning, but it takes them two, three, four years to do so. Right. And it's okay if you supercell and you've got more money than God and you've got like brawl star like 50, 60 million a month. You know, like you can do that when one of your games is doing like nearly a billion in revenue. You can do that. A lot of the hybrid casual companies, you know, again have evolved from hyper. They spent a lot of money in a transitional phase where they didn't get a lot of money back. You know, the hyper casual back catalogs there, some of them were successful through hybridization. Right. Like Voodoo had a few successes here, but a lot of people. And again, you know, as at Quali, we spent a lot of time trying to hybridize the games and only one or two we found success. You know, not all hyper casual games should become hyper hybrid casual games. So. And a lot of people thought that was a strategy, right? Like oh, I know what we're going to do. We're just going to. If we're just going to overlay economy to a game that has no economy because it's only ever been right. And a lot of people got found out and a lot of companies went out of business because they couldn't keep up with that trend.
And, and like I said, I really believe that hybrid is just Getting that one degree below actual what we defined as casual. Right? And, and look, even if you look at games like Hexasol or Twist and Tangle, these are hybrid casual puzzle games and there's like what difference?
Like if you're looking like match free, traditional match free, like it's a puzzle game. Right? And these are puzzle blades. They're different aspects, you know, but, but again, Hexasol is still a match mechanic. Right? You have to stack the, like the coins and when you get a stack of 10, the stack disappears. The difference with Match, where is you get them in a line and there's an animation. But, but effectively it's the same principle, you know, it's the same. You're trying to get things close together and you're meant to get as many the, a certain number together and then there's an animation and then they, they make something happen.
Yeah, exactly.
Something happens. It could be like there's an explosion. It could be like this, everything drops. Yeah, but like I said, if you, if you look at it top down in the very basics of game development, they're very similar. Right.
And, and there is definitely a place where some of these games evolve into, like you said, you know, they're making 100, 200 million a year and they want to make 500 million a year or a billion a year. Right, or, or billions over a lifetime. They want to go from games that potentially would have been dead and buried after two years and then they want to make legacies. Right, right. This whole rise of forever games. Forever game in, in its most simple form is a game that lasts seven to 10 years and you've got, you've got plenty of them in the market. Right. You know, Angry Birds Kit, Candy Crush.
[00:29:45] Speaker B: Is there room for more?
[00:29:48] Speaker A: I think there is, Melissa, but I'm predicting growth. You know, like I, I really believe like the next couple of years things are going to be exciting, that one of the big things that happened recently was the, you know, the court case with apple in the U.S.
right. Like, you know, D.C. has been something I've been looking at very aggressively ever since the DNA. And you know, I'm very fortunate to, you know, to be on the advisory board of Stash and you know, and see these guys developing the tech. And for me it's like, yeah, we're fine finding like rebalancing some of the, in the favor of the developers. Like we as the content creators should be better financially rewarded. And I'm not taking potshots at Apple and Google. I'm not going to do that on, on this podcast, you know, but look, in this day and age, Melissa, seven years ago, when the app, the App Store had proper discoverability, right? And you know, you and I remember the days doing burst campaigns on Iron Source where it was the top of the charts and we don't talk about that.
Okay. The idea is that the K factor panic uplift of games, if you've got the games into the top five, you could make 40%. Right? Because people went to the store, they looked at the charts and then they downloaded the best, the top games in that strategy for a long time, you know, get in. And there was lots of people that spent their entirety of their LTV so that their CPI matched their LTV because they knew that the margin was going to come from the K factor. You don't have that in today's, today's industry, you know, and so when that stuff happened and discoverability with Apple and Google was really good, it made sense. But in today's market, 30% for just hosting them on a store doesn't. And alternative stores and stuff is already happening in China and Far East. Right?
[00:31:42] Speaker B: So let's segue to that because you talked about D2C and you talked about sort of like web stores.
There's also. And, and we've sort of like collapsed these a little bit, but I don't know that we should.
Well, we sort of talk about reward apps, but maybe let's put reward apps to the side for a minute and talk about sort of alternative stores and how you think that's gonna impact. Because obviously everyone's sort of very excited right now and there are some solutions out there. And I actually had an interesting chat with Yi Gong from Tilting Point about this a few weeks ago.
What do you think? Do you think we're going to see sort of like a sudden acceleration of adoption?
Do you think solutions are where they need, where they, where studios need them to be?
Tell us what you think.
[00:32:31] Speaker A: Yeah, look, so in terms of the alternative store space, probably the biggest one that you're going to read or hear about the most is the EP mobile game store, right? So, so Epic have for a long time had a competitor to Steam, which was, you know, their Epic sort of, you know, store on the PCC front. And, you know, end of last year, they launched the mobile store as well. So they are trying to get as many people to put their apps on the Epic Store as possible. And the idea very simply is you download an app on your phone, which is the Epic Store, and you go in There and you know you can download games. Yeah, exactly, exactly. And, and look, Epic do really good things, which is like they do like monthly like incentives and, and campaigns and developers, you know you as a player can go in and get something for free. Right. You could get like a unique purchase which gives you a limited edition item or additional currency. And like they're incentivizing users to go through Game Store.
As a developer, they charge under half of what Apple charge for iap. So the developer wins, the user wins. The issue very simply is like how many people are going to go against their better nature after like you, they're.
[00:33:55] Speaker B: Going to need to do UA for the, for the mobile game store.
[00:33:58] Speaker A: Exactly.
[00:33:59] Speaker B: Which is always right. Which is, and this I think applies to, to reward apps as well. Meaning like these places become both sort of networks of, of discovery and then potentially sort of like UA monetization. But in order for them to mean anything or to work that way, they need to build up their audience in, in the first place, which is its own challenge, as we know.
[00:34:18] Speaker A: Yeah, look, and if, if I think there is a very good sort of distinction you make there, but which is the rewarded apps themselves, like your misplays and stuff. The biggest issue that people like me has always had with them very simply is the scale. Right. And it's always been okay, like yeah, we can get a hundred installs a day, but we don't need 100 today. Like 100 installs a day, 100 Dow a day does not make a difference to me when I've got millions, you know, of 3 million Dow.
It's nice to have the quality is good, but you need quality and scale for it to be impact and to be meaningful.
And I think a lot of the rewarded platforms and as well as these alternative stores against Samsung, Halaway, all of these guys are now actively trying to do like B2B partnerships. They're trying to come up with solutions to funnel people to their apps or their stores and their experiences.
[00:35:18] Speaker B: They need scale.
[00:35:20] Speaker A: But yeah, but this is the whole issue Melissa is like I said, if you're, imagine you're again you're Microsoft or you know, abm, you know, like King, you're King. And you've got tens of millions of Dow in Candy Crush.
And you know, if you work with all of the rewarded partners, you're getting an additional 0.001 people a day. Like as a user acquisition team or as a CMO as yourself.
You would look at that and go, God, it's like it's not worth the time, you know, like double down on and finding improvements on Unity because you need 30% of our user acquisition. So by increasing a couple of points on Unity that moves the needle. Increasing a couple of points on rewarded doesn't. But what we have seen very simply is there has been a growth. There is a lot of new platforms, companies like ALM Media and Snacksy and all of these new apps that are coming out are growing really nicely and they're building gamer centric experiences.
They're building, they're doing their own user acquisition to get people in. It's going to take time but collectively when you work with all of them over a longer period, I think it starts to become interesting. This year also iOS, iOS still hasn't cracked.
[00:36:38] Speaker B: Yeah.
[00:36:39] Speaker A: Okay. And when one of them cracks iOS it becomes a lot more interesting and I think that will happen this year.
[00:36:47] Speaker B: Okay. Last trend which is also sort of like popped up in a few, a few different places. Matthew Ball's report, I think Joe Kim talked about it possibly also recently on Game Makers but this sort of like difference between Chinese or sort of like APAC Studios and the sort of European east and west to, to be really simplistic about it heard stuff about their work ethic and they're just, they sort of like data wise they seem to be outperforming cause wise it seems to be potentially more partially because the they're just working harder.
So do you think they're sort of, do you think we have cause to be concerned that like the west simply won't be able to just keep up with their output or is that a little bit like jumping the shark and then do you think sort of like follow up? If so do you think it's going to lead to kind of like a resurgence of crunch culture in Western studios?
[00:37:56] Speaker A: So all of the above. Sadly the fact of the matter is the Chinese workforce or the Far east workforce in general, a lot of these, the Chinese companies have not only have a much stronger work ethic or more aggressive work ethic, they have much more resource. Right. It's not just of they have that are going to work 60 hour weeks, they have 5, 10 times the amount more of them. Exactly. So if, so if you're a Western studio and you know you're, you've got a team of 20 people and people are working a 40 hour week, you know you, you are going to put out a game but you're going to take. The production cycle will be longer and sadly a lot of what happens is the, the first person to market has an advantage, wins. Yeah. All the time. Right there. There are examples of second place like Apple. Right. Apple iPhone came to market after Nokia and killed it because it was a better product. So there are examples where that, that does succeed and does work. But look, ultimately if, if you're building something and a Chinese company have 10 times the amount of people and they're going to work twice as many hours. That's, that's you know what 20 times, you know, more, more efficiency. Right?
[00:39:17] Speaker B: Efficient.
[00:39:17] Speaker A: Yeah. You know, in terms of being able to reduce deadlines. You work in games, you work on, on sprints. Right. So it's every two weeks you have a production meeting and you say right, we're going to do this, this, this. And it could be like five things, it could be ten things, whatever. Melissa. If they're putting twice as many people and twice as many hours, they're able to add twice as much to that list.
[00:39:39] Speaker B: Yeah.
[00:39:39] Speaker A: And, and there is always going to be an argument around quality but these have been building some of the best games in the world for a long time. So you don't. It's not, it's not the whole, you know, pay peanuts, get monkeys and like you know, you're throwing like, you know, cheap resource and you're gonna get like cheap treat quality production and results. It's not that. It's.
There's more of them, they're working more and they actually are really good at executing on some of the most complex games out there. Honor of Kings by Tencent has done over a billion. That's the biggest game in the world.
And, and even some of.
[00:40:14] Speaker B: Do you think we're gonna see. Sorry, do you think we're gonna see people outsource more then to China? Yeah, like Western studios building.
[00:40:23] Speaker A: Well, if you think about what's just happened as well like all the situation in the US political scene, you know a lot of companies like, you know, obviously netties have pulled back. Right. Ten, seven have been say staggered. You know, they might not do any M and A or do any investments into. Into us now because of the tariffs and how it affects their online back in China.
And the fact is then there is a huge and growing force in China and the Far east and I, I really believe that instead of them coming to us for western experience and approval to some of the games, ideas, styles, artwork. Because there is a very different style in Asia.
Right.
But the Chinese have been learning this through like you know, investments and acquisitions. Right. Supercell.
All of these companies have affiliations with China and if they're learning from them. Right. So there comes a point where China will be able to execute games in the west as well as they can do the east. And that will be we in the west are going to be.
[00:41:32] Speaker B: Yeah, so that's maybe a good segue to wrapping up.
You took, you said you're predicting growth which is a very optimistic take or maybe not very, but an optimistic take.
If you could sort of like make one bold prediction about where we, where the industry is going to be in like three years time.
Where are we going to be and what's going to take us there.
[00:41:57] Speaker A: Oh man, that's a great question. So look from my perspective I am a big believer in cross platform and, and trans platform. I think like Mihoyo and what they've done with Genshin Impact and their, their Mihoyo Universe with giving people the accessibility of gaming either on the go or at home but the same game. I think that is where like things are gonna head because you know we, we touched on it earlier but this, this attention economy is no longer just against games. We're competing against TikTok, Netflix, so all types of entertainment and media and for us to kind of level the playing field we need to give accessibility to users and I think again giving people the ability to play on the go on play and having a much more hardcore premium AAA experience when they get back home and like turn their PlayStation on, I think that will be something that will really help us. And I think a lot of companies need transition to, to that.
And apart from that I see again the evolution of mobile less dependent world on Apple and Google data alternative stores giving back more ownership to the developers and the users themselves.
I really do believe that digital economies and stuff like that will start improving and we had this rise of NFTs. But I think there is a world where digital ownership does start to have a real play in the next three to five years and people want to have that ready player one dream where they can transition game to another. And we've already seen developments like this in Fortnite and Roblox and experiencing becoming much more than just the game themselves. So I think there's going to be more ownership, more decentralization and ultimately all of this will help and the trans. Trans platform play, all of these things in turn will help the industry grow and mobile and console will start to merge.
Yeah.
[00:44:08] Speaker B: Nice. Well it's nice to be optimistic.
[00:44:12] Speaker A: That's one thing I have sometimes.
[00:44:14] Speaker B: Yes.
And this has been so much fun. Thank you for sharing with us and for spending time on the pod today.
We will. Let's check back in in a year and see. No, we have to check back in in three years, but we'll have you on again before, before your predictions come true.
Thank you very, very much for being on the show today, John.
[00:44:34] Speaker A: Thanks, Melissa. It was a.
