Rise and Fall of Embracer Group | Implications for the Future of Games M&A

We discuss the impact, economics, and advantages of mobile web stores in a deep discussion with Gil Tov-ly, the CMO of AppCharge, a company that partners with game studios to build optimized web stores. OUTLINE: 0:00 Intro 1:13 Motivation and economics of mobile web stores: Huge 20-30% total revenue lift 3:42 Amount of transactions through web stores vs. direct IAP, what impacts more web store transactions? 9:34 How web stores can support VIP spenders 10:40 Typical web store support provided by companies like AppCharge 11:40 impact of web stores 13:48 The player experience with web stores 18:32 breakdown of support services to help developers roll out a web store 25:25 How to evaluate webstore partners 28:25 Current legal and regulatory environment around web stores - what are the limitations? 31:18 Rise of alternative app stores and side-loading 32:30 Building direct relationships with customers by having your own web store 36:25 What does the future look like for player monetization channels in 5-10 years 39:30 More info about AppCharge - what is their promotional pitch? 👇 EPISODE LINKS: - AppCharge: https://appcharge.com/ - Gil Tov-ly: https://www.linkedin.com/in/giltovly/ SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.substack.com/ 😃 —CONNECT WITH ME! — • MY INSTAGRAM → @jokim1 • TWITTER → @jokim1 • LINKEDIN → https://www.linkedin.com/in/jokim/ — POPULAR CONTENT — 🤑 Economy of the Metaverse with Tim Sweeney https://youtu.be/h6ClJxjuRvw ℹ️ How to Build the Amazon of Game Companies https://youtu.be/bkd2TOpKt4I 🔮 Gaming Trends | A Look Ahead at 2021 https://youtu.be/NejFzHtpiZI 🖥️ The Future of PC Gaming https://youtu.be/_QT7O3Wxi2s 🔴 Games Industry M&A https://youtu.be/65nyPk6WNrs 🔴 Netcode for Multiplayer Games https://youtu.be/tHq3PzmjhLw 🔴 IDFA Deprecation Product Impact https://youtu.be/Ojec4wGKpso 🔴 Trip Hawkins on the New High Score https://youtu.be/5egTSQ6AiRA 🔴 LiveOps F2P Best Practices https://youtu.be/tmzqqnYbjNY

A deep dive into the most pressing topics in gaming with industry veterans discussing recent developments, challenges, and future outlooks. ⏱️ Timeline/Chapters: 00:00 - Introduction 01:05 - Ubisoft's Current State & Challenges 14:35 - Unity's Turnaround Story 31:20 - AppLovin Deep Dive 39:15 - China Gaming Market Update 49:40 - Microsoft-Activision Deal Impact 56:10 - Roblox & Hindenburg Report Discussion 📝 Description: Join us for an in-depth discussion of the hottest topics in gaming! Industry veterans break down recent developments at major gaming companies and what they mean for the future of the industry. We analyze Ubisoft's ongoing struggles, Unity's attempted turnaround under new leadership, AppLovin's rising dominance in mobile advertising, China's gaming market dynamics, and the implications of Microsoft's Activision acquisition. Plus, a quick take on the recent Roblox controversy. Topics include: • Why Western AAA game development is struggling • Unity's technical improvements and business challenges • AppLovin's market dominance in mobile advertising • China gaming market outlook and geopolitical risks • Microsoft's Game Pass strategy and the future of gaming subscriptions • Latest industry M&A activity and valuations Whether you're a game developer, industry executive, or just interested in the business of gaming, this discussion provides valuable insights into where the industry is headed in 2024 and beyond.

Warren Woodward, co-founder and CMO at Upptic, provides real, no-nonsense advice about the current state of mobile performance marketing. What are the current problems and issues in the market and how can studios grow their player base through mobile user acquisition today? OUTLINE: 0:00 Intro 0:47 Why Warren is great to talk to about UA 2:00 Current state of mobile marketing & UA: What’s working and not working 12:50 What IDFA really did to mobile marketing 15:30 What happens if fingerprinting goes away 21:50 The problem with imprecise data 25:10 What are the channels and tactics that are currently successful Applovin vs. Unity 31:37 Modern-day performance marketing team structure and staffing 40:19 The importance of unifying teams and data for success - avoiding the “blame game” 45:30 Advantages of UA at massive scale 52:37 Is the future of UA all about “brutal efficiency”? 👇 EPISODE LINKS: - Warren Woodward: https://www.linkedin.com/in/warrendwoodward/ - Upptic: https://upptic.com/ SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.substack.com/ 😃 —CONNECT WITH ME! — • MY INSTAGRAM → @jokim1 • TWITTER → @jokim1 • LINKEDIN → https://www.linkedin.com/in/jokim/

We dive deep into the fierce competition between Tencent and NetEase—two titans shaping the global gaming landscape. Discover how these companies are navigating the challenges of the Chinese market and their strategies for international expansion. We also share our personal experiences about Tencent and provide insider insights you can't find anywhere else. Don't forget to like, comment, and subscribe for more industry insights! 🚀 #Gaming #Tencent #NetEase #GameIndustry #PixelsAndProfits OUTLINE: 0:00 Intro 1:50 Tencent business overview 4:50 Tencent margins & operational efficiency 8:06 Tencent internal studios 10:30 How Tencent worked with Glu - Brian and JK personal stories 18:15 The Tencent game dev model 21:08 Potential IP conflicts - Apex Legends Mobile case study 23:40 Tencent as bully 25:22 Tencent game company holdings 27:16 Tencent key growth opportunities 33:50 Tencent key challenges 40:55 Geo-political factors involved with Tencent 47:07 Tencent valuation 51:51 Netease business overview 54:21 Brian’s take on new Netease survival game 56:00 Netease internal studios 57:34 Netease growth opportunities 1:01:55 Netease valuation 1:02:55 Netease challenges 1:04:03 Tencent vs. Netease future outlook SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.substack.com/ 😃 —CONNECT WITH ME! — • MY INSTAGRAM → @jokim1 • TWITTER → @jokim1 • LINKEDIN → https://www.linkedin.com/in/jokim/ — POPULAR CONTENT — 🤑 Economy of the Metaverse with Tim Sweeney https://youtu.be/h6ClJxjuRvw ℹ️ How to Build the Amazon of Game Companies https://youtu.be/bkd2TOpKt4I 🔮 Gaming Trends | A Look Ahead at 2021 https://youtu.be/NejFzHtpiZI 🖥️ The Future of PC Gaming https://youtu.be/_QT7O3Wxi2s 🔴 Games Industry M&A https://youtu.be/65nyPk6WNrs 🔴 Netcode for Multiplayer Games https://youtu.be/tHq3PzmjhLw 🔴 IDFA Deprecation Product Impact https://youtu.be/Ojec4wGKpso 🔴 Trip Hawkins on the New High Score https://youtu.be/5egTSQ6AiRA 🔴 LiveOps F2P Best Practices https://youtu.be/tmzqqnYbjNY

Anton Bernstein, CEO of Pocket Worlds, discusses the intricacies of cosmetics monetization in free-to-play games. Learn about player motivations, game design considerations, primary vs. secondary markets, and cultural differences in monetization strategies. Gain valuable insights on key metrics and best practices for successful cosmetic-based revenue in games like Fortnite, CS:GO, and High Rise. OUTLINE: 0:00 Intro 0:45 Most important topics around cosmetics monetization 2:11 Anton Bernstein background and Pocket World business 3:17 The kinds of games that sell cosmetics well: 6:20 How does Fair to play vs. free to play impact cosmetics sales 11:48 How necessary is high engagement to cosmetics sale? 14:16 How does 1st vs. 3rd person perspective impact kinds of cosmetics sales? 16:38 How does motivation around vanity vs. speculation impact cosmetics sales? 21:00 The best games to study for F2P cosmetics monetization 23:40 ARPU and spend depth for cosmetics sales 27:50 Form of cosmetics sales that perform best: Battle pass, loot box, etc. 31:50 The importance of big IP and scale to sell cosmetics well 35:00 Player motivations behind buying cosmetics 38:55 Cosmetics monetization East vs. West 45:00 Primary vs. secondary markets - developer business model 52:47 KPIs and metrics to watch for cosmetics sales 55:50 Dangers of selling cosmetics 57:32 Final message and contacting Anton 👇 EPISODE LINKS: - Anton Bernstein, CEO of Pocket Worlds: https://www.linkedin.com/in/antonber/ - Pocket Worlds: https://www.pocketworlds.com/ SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.com/

We partnered with Liquid & Grit to discuss the Brawl Stars Godzilla event, which had a massive impact on Brawl Stars' revenue and downloads. - Highest weekly revenue ever - 59% revenue increase and 107% downloads increase 3Wo3W We review the event and discuss the implications and lessons learned. Discussion Outline: 00:00 - Introduction of the roundtable, Joseph Kim, and the participants. 00:12 - Introduction of Joseph Kim and his work. 01:18 - Overview of Brawl Stars and its game modes. 02:07 - Discussion on the popularity of Brawl Stars among kids. 03:08 - Joseph Kim discusses game design and the success of isometric games. 03:50 - Comparison between Brawl Stars and Wild Rift in terms of game depth and modes. 04:42 - Observations on the female player base in Brawl Stars. 05:50 - Insights on why kids prefer Brawl Stars, focusing on game modes .06:37 - Discussion on the decline of Fortnite and its impact on Brawl Stars. 07:33 - Introduction to the Godzilla event, its content, and game modes. 09:38 - Analysis of the event's impact on revenue and downloads. 11:18 - Explanation of event mechanics, including Monster Eggs and mutations. 13:02 - Discussion on player reactions to the temporary nature of mutations. 14:52 - Community reactions to pay-to-win elements and their temporary nature. 16:26 - Speculation on the potential return of the Godzilla event in the future. 17:18 - Discussion on the game mode experience and its balance. 18:40 - Participant's experience with the event and mutations. 20:53 - Discussion on club engagement and the club event mechanics. 21:46 - Description of the Godzilla City Smash game mode. 23:36 - Thoughts on the choice of the Godzilla IP for the event. 25:55 - In-depth discussion on the temporary nature of mutations and player perceptions. 27:04 - Considerations on event mechanics and their impact on player engagement and revenue. 28:30 - Speculations on legal implications of temporary in-game purchases. 30:17 - Discussion on the complexity of the event and its execution. 32:14 - Participant's views on the event's entertainment value and economic impact. 52:05 - Final thoughts on the event's design, economy, and player engagement. 53:41 - Closing remarks and thanks to participants.

0:00 Intro 1:42 Background on FunPlus 2:35 Embracer Group - Historical context and current status, including breakup 6:06 Why did Embracer break up? What form of game industry consolidation makes sense? 7:40 When do company synergies make sense for game studio consolidation? 9:40 Comparison of Zynga vs. Embracer M&A strategy, Zynga’s historical M&A context 14:00 Could Embracer’s consolidation strategy have worked out? How? 16:00 Embracer’s lack of centralization functions and impact of debt to break up 19:31 Impact of easy money on M&A in 2021/2022 and then after 21:45 Outlook for Embracer split-off companies 25:38 Lars’ role in the new split-off Embracer companies 26:50 Impact of trading on the Swedish exchange 29:08 Importance of post-acquisition integration 36:22 Chris’ take on advantages of scale for gaming studios - ideal level of scale 41:08 Matt’s thoughts on game studio scale 42:30 Value from sharing best practices 47:09 Thoughts on how big studios will consider Roblox more seriously 50:05 Will FunPlus consider acquiring one of the Embracer companies? 51:47 What is the outlook for M&A in 2024 and beyond? SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.substack.com/ 😃 —CONNECT WITH ME! — • MY INSTAGRAM → @jokim1 • TWITTER → @jokim1 • LINKEDIN → https://www.linkedin.com/in/jokim/ — POPULAR CONTENT — 🤑 Economy of the Metaverse with Tim Sweeney https://youtu.be/h6ClJxjuRvw ℹ️ How to Build the Amazon of Game Companies https://youtu.be/bkd2TOpKt4I 🔮 Gaming Trends | A Look Ahead at 2021 https://youtu.be/NejFzHtpiZI 🖥️ The Future of PC Gaming https://youtu.be/_QT7O3Wxi2s 🔴 Games Industry M&A https://youtu.be/65nyPk6WNrs 🔴 Netcode for Multiplayer Games https://youtu.be/tHq3PzmjhLw 🔴 IDFA Deprecation Product Impact https://youtu.be/Ojec4wGKpso 🔴 Trip Hawkins on the New High Score https://youtu.be/5egTSQ6AiRA 🔴 LiveOps F2P Best Practices https://youtu.be/tmzqqnYbjNY

Purnendu Mukherjee, CEO of Convai, shares insights into innovative approaches to developing human-like AI characters that can intelligently interact with users, perform actions, and engage in natural and responsive conversations. This discussion sheds light on the future of interactive gaming, educational tools, and real-world applications of AI NPCs, from Mukherjee's personal journey, which sparked his deep interest in the mechanics of the human mind and AI, to the technical challenges and societal impacts of integrating AI within virtual spaces. OUTLINE: 0:00 Introduction to Convai and AI NPCs 1:19 Purnendu's background and how he got into working on AI NPCs 04:22 - Current limitations of AI NPCs and what's needed to make them indistinguishable from humans 5:00 - Technical Challenges and Innovations 07:34 - Overcoming latency issues with AI NPCs 08:50 - Potential AI applications in gaming and why AI NPCs are attracting significant funding 15:17 - Differentiating factors and focus areas for Convai compared to competitors 19:19 - Steps for developers to integrate Convai's technology into a game 24:12 - Comparing effort and impact of using AI NPCs vs traditional dialogue trees and behavior trees 29:25 - Economics and business model of Convai - pricing for different types of games 34:31 - Bringing down costs for games with massive usage and appeal to global audiences 38:48 - Early traction and use cases Convai is seeing from customers today 43:18 - Potential for AI to enable new kinds of gaming experiences 47:55 - Feasibility of doing a fully AI-driven Dungeons & Dragons game with current technology 50:16 - Optionality if Convai solves AI NPCs for gaming to expand to other domains 53:14 - Purnendu's entrepreneurial learnings and the meaningful suffering of a startup journey 59:04 - Constructive criticism from GDC and Convai's commitment to enabling great art 59:55 - Conclusion 👇 EPISODE LINKS: - Conv.ai: https://conv.ai/ - Purnendu Mukherjee: https://www.linkedin.com/in/purn3ndu/ SUBSCRIBE TO GAMEMAKERS: - Newsletter: https://gamemakers.com/ 😃 —CONNECT WITH ME! — • MY INSTAGRAM → @jokim1 • TWITTER → @jokim1 • LINKEDIN → https://www.linkedin.com/in/jokim/

We compare two major gaming companies, Embracer and Ubisoft, on this episode of Pixels and Profits. ✅ Business performance ✅ Valuation ✅ Future outlook of both companies We analyze their strategies, financials, and potential for growth. Timeline Summary: 00:00 - Introduction to the topic and overview of Embracer's business 03:00 - Discussion of Embracer's financials and debt situation 10:15 - Embracer's restructuring efforts and asset sales 13:45 - Embracer's tabletop gaming business and profitability 16:20 - Outlook for Embracer's PC and console division 21:20 - Embracer's mobile gaming business and challenges 24:25 - Valuation and investment potential for Embracer 26:45 - Introduction to Ubisoft's business and strategy 29:55 - Ubisoft's financials and revenue per employee issues 37:10 - Ubisoft's upcoming titles for fiscal year 2024 42:40 - Ubisoft's future outlook and titles for fiscal year 2025 49:50 - Valuation and investment potential for Ubisoft 52:05 - Concerns about Ubisoft's development strategies and efficiency 56:10 - Ubisoft's mobile gaming efforts and challenges 58:30 - Closing thoughts on Embracer and Ubisoft's future prospects SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.substack.com/ 😃 —CONNECT WITH ME! — • MY INSTAGRAM → @jokim1 • TWITTER → @jokim1 • LINKEDIN → https://www.linkedin.com/in/jokim/ — POPULAR CONTENT — 🤑 Economy of the Metaverse with Tim Sweeney https://youtu.be/h6ClJxjuRvw ℹ️ How to Build the Amazon of Game Companies https://youtu.be/bkd2TOpKt4I 🔮 Gaming Trends | A Look Ahead at 2021 https://youtu.be/NejFzHtpiZI 🖥️ The Future of PC Gaming https://youtu.be/_QT7O3Wxi2s 🔴 Games Industry M&A https://youtu.be/65nyPk6WNrs 🔴 Netcode for Multiplayer Games https://youtu.be/tHq3PzmjhLw 🔴 IDFA Deprecation Product Impact https://youtu.be/Ojec4wGKpso 🔴 Trip Hawkins on the New High Score https://youtu.be/5egTSQ6AiRA 🔴 LiveOps F2P Best Practices https://youtu.be/tmzqqnYbjNY

We discuss key themes & trends, critical takeaways, GDC panels/talks, and rumors from GDC 2024. OUTLINE: 0:00 Intro 2:35 VC, publisher investment in gaming is down 3:50 Moving to tighter efficiency in game development 7:05 More pain coming, 3-6 more months of industry rationalization 15:30 UA deterioriation since beginning of year 17:17 AI & Liveops key areas of focus 21:40 Importance of marketing and UA for mobile game success 23:45 Sensor Tower acquisition of data.ai 30:45 GDC Talks 37:10 Frank + Frank Supercell Brawlstars talk 41:20 King’s AI Talk - how they improve liveops on Candy Crush Soda Saga 43:15 Epic’s UEFN talks 49:05 Ken’s GDC tips 55:10 Key takeaways 1:05:40 GDC rumors SUBSCRIBE TO GAMEMAKERS: - Spotify Podcast: https://spoti.fi/3Cpyq7i - Newsletter: https://gamemakers.substack.com/