In this episode of Upptic’s Games Growth podcast, we dive into the latest trends shaking the gaming industry. The episode begins with a critical analysis of the recent gaming layoffs at major companies such as Microsoft, Unity, and Riot Games – especially when paired with the news that the S&P 500 and QQQ are hitting new highs. Combined, we discuss what these narratives mean regarding the health of the gaming industry.
We then discuss Apple’s recent strategic moves, including the overhaul of its app store policies following the recent supreme court ruling in the Apple vs. Epic Games case – and what it means for game developers. Plus, we take a look at the astonishing success of Apple’s VR headset – the Apple Vision Pro – which sold out of presale orders despite a $3,500 price tag. Get our thoughts on whether this means VR is finally hitting the mainstream.
Finally, we take a look at the overnight rise of Palworld – a game developed by small Japanese studio Pocket Pair – which went viral, reportedly grossing $200 million on an $8 million budget. What does the success of this game mean for the world of game development in the coming year? Get our thoughts on how small studios will rise and big studios will struggle.
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Full Transcript
Please note that this transcript is AI generated and may be prone to errors.
00:00:00:06 – 00:00:00:18
Xander
A confession to make.
00:00:00:18 – 00:00:02:07
Warren
Yeah. Zander. What’s up?
00:00:02:09 – 00:00:13:09
Xander
At the risk of alienating approximately half our audience, I’ve gone for the. I’ve always wanted something related to board. And so on. I am a proud holder of. No.
00:00:13:11 – 00:00:15:04
Warren
No, no. You did it.
00:00:15:06 – 00:00:18:16
Xander
Kenneth. A yacht club. And there goes half the audience.
00:00:18:18 – 00:00:29:20
Warren
And here’s Anders. Retirement plans, graduations.
00:00:29:22 – 00:00:43:00
Xander
Welcome to the game’s growth. Update Your weekly trends and analysis of the game’s growth industry brought to you by up tick. Learn how our teams in tech are driving millions of players to the world class games at Optic dot com. We’re back. Got a lot to cover here.
00:00:43:01 – 00:01:01:12
Warren
There’s so much to talk about this week. This is going to be like a jam packed episode. Feels like the entire industry like not only woke up but you know like when you just kind of like jump scare week out of a nightmare. Feels like that happened with the industry and there’s been tons of moves in the first couple of weeks that you’re so excited to dig in.
00:01:01:14 – 00:01:18:10
Xander
Yeah, we’ve got a lot to cover. We’re off to a running start to January, which I guess is good compared to a slow start, which could be decent into a lot of game companies. We’ll be doing a lot of events this year coming up. First, we will be attending both Dyson, MGM and Vegas from February 12th through February 16th.
00:01:18:12 – 00:01:30:07
Xander
If you plan to be in Vegas during that time, it’s up marketing it up to Tor.com. We’re happy to wind up on Twitter, LinkedIn, and we’d love to meet you and chat. So without further ado, let’s jump right in.
00:01:30:09 – 00:01:54:10
Warren
Yes, we have a lot to cover today on the agenda. We’re going to start with just digging into the state of the games market and tech market overall and some of the crazy moves and layoffs that have been happening there. They’re just a general state of the games market. And then, of course, we have to talk about how world it has overtaken the whole narrative and is the story of the game industry of the last couple of weeks.
00:01:54:10 – 00:02:05:09
Warren
One of us has been playing a lot. We both have a lot of opinions on it, so we’re going to be digging into that. And then Apple coming out with candidly more. What adjective would you describe.
00:02:05:11 – 00:02:07:22
Xander
Abusive, extractive, monopolistic.
00:02:08:03 – 00:02:37:04
Warren
Yeah. Apple’s latest monopolistic policy as well as the early shows. And what we’ve learned with the release of the Apple headset. So let’s dig in. I’ll kick it off with markets. So I don’t even know where to start here. Honestly, there’s a few things. So macro, we’re recording this on January 25th, both the S&P and Cookie Q, which is the index that tracks tech stocks, are both all time highs.
00:02:37:06 – 00:03:06:07
Warren
So the presumption here would be for someone outside of the industry that the games industry, which is normally quite correlated to the tech, is also riding high and in great shape, but that is not the reality. So we’re coming in to some breaking news today around new layoffs at Microsoft. So announcement of almost 2000 jobs that were cut from Microsoft’s gaming divisions, which includes Activision Blizzard.
00:03:06:07 – 00:03:31:17
Warren
We don’t yet have the breakdown of how that’s impacted. And this is I believe the number was around 8% of the gaming stuff that was affected by this. Yeah, And this is coming on the back of 21,000 workers that have been laid off across 76 different tech companies just in January, according to the website, layoffs at FBI. So this is a weird combination of narratives of tech as a sector.
00:03:31:19 – 00:03:53:12
Warren
The markets are saying they’re doing great, but layoffs are in some ways more intense than they were even last year. That really signals that we’re seeing. So there’s a really great in-depth analysis of the state of the games industry. We’ll link it to the podcast, but it’s from Matthew Ball, who is ABC and a big Twitter personality that covers tech and gaming.
00:03:53:14 – 00:04:23:10
Warren
He had a great piece and I’ll just share like a couple of the things that he was looking at The US consumer spend on video games over last year, excluding Web three was 57.2 billion, which was on the surface level. That was growth of 1.1% over 2022, which sounds like good news. But then we have to remember that 2022, the market actually dropped 5%, which is a huge drop for a sector that traditionally has gotten bigger every year.
00:04:23:12 – 00:04:50:17
Warren
And then if we compare a little further back to 2028, we’re only up about 2% in the industry since then. So the compound annual growth rate is under 1% for the sectors point 7%, which compares really negatively towards the rest of tech. We do expect, or at least he expects, that we’re going to see that pick up in the industry on the back of the strong sales of some of the things that Microsoft is doing and PlayStation expected to come out.
00:04:50:17 – 00:05:16:12
Warren
Playstation’s continued adoption of PlayStation five, according to some research with Newzoo. So the expectation right now is that we’re going to see about 3% growth or 2.8% specifically in 2024. So we’re set up to have a little bit better year, but who knows if that’s how things actually pan out. There’s been a lot of black swans that the industry has navigated over the past few years, and that’s kind of a snapshot of where things are at.
00:05:16:12 – 00:05:40:12
Warren
We’ve covered this in bits and pieces of, you know, the sectors that are growing and shrinking. The narratives that we’ve been talking about is a bit of a renaissance period for you see, and console in a few different ways. Bit of a stagnation period for mobile free to play and then web three being chaos is always, although I’m personally predicting a more notable rebound year for what three gaming is, some of the more mature products are coming to market.
00:05:40:12 – 00:05:54:23
Warren
So anyway so a mouthful that’s kind of the snapshot of the Games segment as we’re entering 2023, the Good and the bad, how markets are reacting. Zander, your thoughts on this big report that we dug into from Matthew Ball.
00:05:55:01 – 00:06:29:13
Xander
Yeah, so there’s a couple of things here. One is like the offs piece and I think that generally markets like lay offs and so as people are tightening their belt, I think it makes sense to do layoffs. One of my biggest theories for a games industry going forward is basically we’re very overstaffed. I know that’s sort of like a hot take, but I think that with successive games like POW World and Lethal Company last year, I think we’re going to see more and more of these trends of smaller gaming companies doing huge, outsized returns and that these large, large tech companies and gaming companies are going to have a more difficult time rationalizing their businesses
00:06:29:15 – 00:06:51:18
Xander
and basically their cost centers are going to outstrip their earning capacity. And so I think that is sort of why we’re seeing these layoffs is, you know, shrinkage in the industry overall or turbulence in the industry or shrinkage in mobile. I think one of the things that we talked about is like PC actually had a pretty massive year last year that’s sort of covering up some of the pain that we saw with mobile industry.
00:06:51:18 – 00:07:09:15
Xander
We talked about that on our part just with the U.S., which will come out Monday here and certainly hear more about that. But overall, I mean, I’m personally fairly optimistic about the games industry overall. I think we will see. I mean, we’re sort of like traditional late cycle where we’ve seen consolidation, never seen people die, and that’s expected.
00:07:09:17 – 00:07:22:17
Xander
But the industry and the potential for games going forward is as big as it ever has been, if not bigger. And so I’m excited and I think we’re positioned in a fairly good place to take it. Reinvention, capitalize on its going forward.
00:07:22:19 – 00:07:47:19
Warren
Yeah, anecdotally, one thing I see that’s a pattern in the most recent year or so of layoffs is them impacting mid-level management and hire on to a tier point center of potentially some of these companies being overstaffed, being in the user acquisition and growth space for a decade or so. Up until this last year there was like a very exponential growth tracked for that marketing sector.
00:07:47:21 – 00:08:11:18
Warren
But as you got experience and worked for big companies, got a few years under your belt, like your salary growth track candidly could be really fast tracked an exponential in which you have some nominal kind of experience and I’m seeing a real reversal of that right now where as people are getting less aggressive in marketing, like those people with few years or a lot of years experience are now finding that they’re kind of priced out of the market.
00:08:11:20 – 00:08:31:14
Warren
And if you’re used to, you know, making a six figure salary and you’ve built a lifestyle around that and then all of the jobs that are looking to go big on growth and need that level of experience, if that is really shrinking, unless people are struggling right now, it’s the first time in their careers that they are so interesting.
00:08:31:14 – 00:08:51:00
Warren
New trend in the market. We see a really weird perspective here at Uptick because people tend to reach out to us a little bit more in times of chaos or maybe they’ve had big turnover, but they sell the game launch coming out and they need help. So yeah, it’s going to be a pretty crazy year. I think overall, I don’t really know where the dust is going to settle on this, but the games are good right now.
00:08:51:01 – 00:08:51:14
Warren
Could you forgive.
00:08:51:14 – 00:09:17:05
Xander
Me? Yeah, I want to like sort of clarify something I said earlier is like, it’s not the game. Teams are too big to meet the game that they’re trying to build. Like, it’s like making GTA six is incredibly expensive. It’s just that the majority of games can’t be GTA six and like people are Ubisoft have these giant teams just the mechanisms go to market, the myth of costs put into these businesses versus the amount of money you can pull out of it in most likely scenarios is shifting.
00:09:17:05 – 00:09:37:15
Xander
Whereas like it used to be dominated by these really, really big companies. You know, the big companies seem to be the ones who are struggling the most now. And the people who I think are going to drastically outperform are the smaller, mid-sized studios, which just really I mean, I think it’s fucking awesome because all the games I make, the player is built small or medium studios, but it is just there’s a lot of zombie giant zombie companies now, which we’ll see.
00:09:37:17 – 00:09:57:16
Warren
Yeah. And I think some of the teams that we’ve helped some of the I feel like some of the most successful teams are those that are like really lean, like teams like Candy Raider or actually that’s a newer, newer partner of ours is a super lean teams that have been able to like iterate over many games and have the room to fail and really close to their games.
00:09:57:16 – 00:10:12:18
Warren
Like there’s very little like mid-level management at these smaller teams. It’s like everyone is either founder tons of skin in the game or a really strong I see this like moving the needle and I think we might see more of that kind of model in the next crop of breakout companies.
00:10:12:20 – 00:10:21:15
Xander
Yeah, yeah. And the original founders of Kindred are no longer at the company, but their founder was their chief developer up until they exited Nike couple years ago, which is like crazy.
00:10:21:15 – 00:10:30:12
Warren
Like, yeah, it’s like a person business when we started working with them. But Zander do you want to or just rail on Apple a little bit?
00:10:30:14 – 00:10:47:00
Xander
Hey, this is a different feature. Just after we finished recording the last episode, some breaking news came out about how Apple intends to update their policies in response to the U.S Digital Markets Act, and we wanted to cover that briefly so that you could have some context for a conversation we have. And what’s the most up to date with Apple’s app policies?
00:10:47:06 – 00:11:14:04
Xander
First and foremost, Apple has allowed app developers in the EU to offer an alternative fee structure. The new feature allows for distribution outside of Apple’s App Store, and any sales on alternative app stores will be charged at 17% commission fee and must use the entitlement program that we discussed in this episode. Alternatively, you can build an alternative store and use Apple’s IAP system for an initial 3%, which brings the total IAP fee to 20%.
00:11:14:06 – 00:11:37:17
Xander
And developers in the Small Business program will have a base fee reduced to 10%. So that’s, you know, alternative after alternative payment, 10% Alternative App Store, Google’s IAP 13%. This is the kicker though in addition to these lower fee structure, all apps that have more than a million users per year must pay a 50% core technology fee per user per year on their entire install base.
00:11:37:17 – 00:11:55:18
Xander
So if you have 1,000,001 installs, that means your entire install base is $0.50 per user per year. This is crazy. Crazy. Hi. I did some basic back then boom out there calculator and the fees go way. We passed what you were doing the IEP base fee for an average game company. We’ll talk a little bit more about this next week, but I want to bring this up.
00:11:55:20 – 00:12:21:17
Xander
What I will say is this is another demonstration of how Apple is actually just reinforcing the monopoly position they have by providing sort of pseudo alternatives, which if you examine them on the basis of a real business case, aren’t real alternatives. So much of what we talk about in this episode holds as we wanted to jump in to give its context as a totally unbiased perspective here, I don’t have any bone to pick with Apple and this is so therefore this can be completely unbiased and Apple.
00:12:21:17 – 00:12:27:07
Warren
Are very valued partner for all of our game launches. We love you tons of apple.
00:12:27:07 – 00:12:49:16
Xander
Go spend on apple searched just joking do not do that Talk to us before you do that Cool. So I’ll call this the eat your vegetables section when they get through some legalistic language first. So the apple high level take away. Apple revamps their app store rules after Supreme Court decision. And it’s a little bit disingenuous because the Supreme Court of the U.S. stayed a lower court decision to strike down an anti steering provision in Apple’s App Store policy.
00:12:49:20 – 00:13:11:03
Xander
That’s my basic with this meat is Apple has been ordered to allow links to Web stores as an alternative payment flow in their apps. So as soon as it happened, Apple immediately put out a new set of policies around how you can comply with this in the U.S. And Boyer they had U.S. developers can link out to their own app store but you can’t link out in the same flow as an existing app purchase.
00:13:11:05 – 00:13:30:07
Xander
Developers must also until midnight or just so you don’t have the option to not choose to do it. Piece developers must implement an Apple entitlement system which informs Apple A purchases made through this new flow. And and this is the best part you need to pay Apple a 27% licensing fee for any purchases made on the website or for seven days.
00:13:30:07 – 00:13:43:13
Xander
After using the click tweak, we report on their purchases monthly to Apple and they have to provide an Etsy like prompt to articulate that you are leaving Apple’s Happy Garden. I’m going to read this for those who are not watching, you are.
00:13:43:13 – 00:13:48:03
Warren
Going know this is giant fine taking over the whole screen when you do this.
00:13:48:05 – 00:14:03:11
Xander
Yeah. So if you go out to your web app store, this is what pops up before you go. It says you are about to go to an external website. Apple is not responsible for the privacy or security made of purchases on the web, then has a bunch of, you know, small language and you can either click cancel or continue.
00:14:03:12 – 00:14:20:07
Xander
And so this is just going to eviscerate that flow. Full side of it is like, let’s say you get someone to go there, they still take 20%, which I mean, Ben Thompson is my favorite analyst. He has a website, Culture Century. If you want someone who’s really, really first to this to understand the legalistic question of this, you should listen to him.
00:14:20:11 – 00:14:48:18
Xander
We can lead to that. At the bottom of this talk, you that being said, apparently this is not illegal in the U.S. because the consumer expects Apple to have a vertical integration. The messaging around Apple’s app store and control over device is baked into how they’ve positioned different. Beginning I think is fairly hypocritical from Apple is is not a policy which improves consumer experience it’s really them abusing their monopolistic position and apparently it’s not illegal but it is definitely immoral.
00:14:48:18 – 00:14:51:09
Xander
And I do agree anyway, there’s a lot. What do you think?
00:14:51:11 – 00:15:13:19
Warren
Well, the thing that jumps out is part of the case that Apple has always made. Agree or disagree. Let’s say that we set the percentage aside. Sure. The case that Apple has made, which I think is a fair case in principle, which is we are facilitating and providing services through the App Store. We’re processing payments were facilitating consumers getting refunds.
00:15:13:19 – 00:15:37:03
Warren
We’re streamlining the experience for them. We’re streamlining the ease of distribution of the app and everything. Other than that last point of like bringing people into your IP via the App store, none of that applies to external app stores. They’re not processing the payment. They’re explicitly saying we don’t stand behind this. Like we can’t guarantee anything if you make this purchase, but we’re going to take our fee anyway.
00:15:37:03 – 00:16:07:01
Warren
So I feel like it’s a little bit mask off that they’re applying the same percentage. But devil’s advocate, I also see as a business I’m sure they debated this a ton internally, but it needs to be from their perspective, a similar kind of fee if they make it too much lower, then it encourages behavior of all developers driving purchase activity outside of the native app experience, which is and I’m being as most generous interpretation possible here it is providing a worse user experience for users.
00:16:07:01 – 00:16:34:01
Warren
If the bulk of payments economic activity can’t happen out native, does that mean this is the right solution for it? Absolutely not. But I think that’s probably the case that we’ll hear Apple making in their PR and outward facing is we’re trying to preserve safety and smooth user experience by encouraging this to stay inside. The apps at the end of the day is a pretty wild overstep to claim a third of a company’s revenue almost just because you pass through the gates.
00:16:34:03 – 00:16:51:00
Xander
Yeah, it’s wild and like to be clear, like if you were allowed to have a lower percentage fee on purchases happening outside of the App Store, you’re right, costs would go down, value would be passed on to the consumer. Apple might eventually be forced to cut their fees in order to be competitive. That’s capitalism working. That’s like why we have markets.
00:16:51:02 – 00:17:09:18
Xander
And so they’re doing some that is like clearly traditionally monopolistic. And now whether or not they’re doing that legally, I don’t know. Smart people say they are. It seems like this might be a sort of passing the Rubicon moment where this actually now seems like this is just an obvious and clear abusive, monopolistic power. But I’m not a lawyer, so we’ll see what happens here.
00:17:09:20 – 00:17:28:11
Xander
To me, this is just another reason to consider the number of really meaningful alternatives to mobile in the modern games ecosystem. Mobile is shrinking less. Your PC was growing. You know, we do most of our business on mobile, but I think it’s just another you need to be diversifying, at least if you’re a very, very large company thinking about how to build the games growth strategy going forward.
00:17:28:11 – 00:17:45:00
Xander
And that being said, we do most are based on mobile, but it just shows that the person who controls the turnstile is just not a good actor in the ecosystem overall. So another interesting thing about Apple though, is like they have a bunch of really, really hard core fanboys and Double Vision Pro I think is the number one example of that.
00:17:45:02 – 00:18:12:10
Xander
That Vision Pro sold a reported hundred 60,000 units in the presale run at a minimum price point of $3.5 thousand, which indicates a relatively high demand amongst at least early adopters, although I read some reviews about 0.007% of their overall billion plus user base, which is kind of a funny stat, but it just shows their scale. I think one of the more notable narratives that have emerged here is streaming giants like YouTube, Netflix and Spotify have opted against releasing launch apps.
00:18:12:14 – 00:18:29:17
Xander
The space, the fact that you can literally say, click a button and you’ll put your iPad up over and so like this might just be a coincidence. Who the heck knows? But I’m choosing to read this as developers, doing their little bit to probe and prod Apple where they can and feel really reticent about the fact that they may control the next generation form.
00:18:29:22 – 00:18:31:20
Xander
Any thoughts? Your word?
00:18:31:22 – 00:18:51:01
Warren
Yeah. Contrary to all the mean things you just said about Apple, at the end of the day, they still do make fantastic products like with a lot of polish and user experience that is second to none. I think it’s a good way to get bullied if you’re an early adopter of Division Pro and using it in public anywhere.
00:18:51:03 – 00:19:10:06
Warren
But I’m really excited to eventually get my hands on one. I don’t think I’ll be coughing up 3500, but even though I use it pretty rarely, my formative experiences with The Quest two, I think were my first kind of positive and eye opening experiences with VR. Just sort of like imagining where it can go. And I don’t know if this going to be a hit product.
00:19:10:06 – 00:19:34:04
Warren
I could see like this being something that is talked about for a while and then goes to sleep and then comes back in a future product line. All wild speculation. I just want to see that early hands on user reviews of this and I’m keen to see Apple do their thing of just like taking a proof of concept that people find interesting and then applying that like extreme apple iteration level Polish refinement of user experience.
00:19:34:05 – 00:19:49:13
Warren
I’m optimistic as a consumer for what it’s going to be like, but as far as like a business unit, I don’t know. Every time, like a feel for like 20 years now, it’s been like, No, no, not now. VR and error is happening. This time it’s different. This time it’s happening for real. We’re really going to get adoption this time.
00:19:49:15 – 00:20:12:07
Warren
I can say if I was making a new game today, I would not prioritize anything custom that was any kind of meaningful dev resources to supporting either a Vision pro or just VR in general. I don’t think the install base is there yet to merit anything versus the opportunities of more PC adoption, but we’re going to cross that threshold probably at some point.
00:20:12:10 – 00:20:32:22
Warren
I don’t think this is going to be the moment, but I do think for smaller developers there’s probably going to be a lot of subsidies in the Apple ecosystem for building bespoke experiences similar to what Apple has done for I mean, they’re not subsidies, but I know a lot of small teams are getting buy by like building products for Apple Arcade where they’re getting, you know, a flat rate from Apple and essentially doing like work for hire.
00:20:32:23 – 00:20:41:16
Warren
So Apple Arcade has like unique bespoke content. I think they’ll probably go hard on that for Vision Pro. So I think that’s an opportunity for small and indie developers.
00:20:41:22 – 00:20:55:12
Xander
Yeah Pussy. I have to establish a pro. I would want to try it. From everything I’ve heard, it’s supposed to be incredible. The experience is actually going to be incredible. Now at 30 $500, I’m not going buy one at 500, maybe 900, maybe I’ll consider it.
00:20:55:14 – 00:20:58:20
Warren
But yeah, you can’t buy like two dog in a few years for that price.
00:20:58:22 – 00:21:14:00
Xander
You could, you could buy. Yeah. At least to dig into it and you can buy some other you know you have a couple point you left over. That being said like I was looking to get a quest three because the price points right. I think one of the interesting things here is met is really really investing in scaling up production there.
00:21:14:00 – 00:21:34:19
Xander
So I mean their goal is to get like a million users on the Met across three and really make this an ecosystem that’s worth going after. And my understanding is they are currently subsidizing development on that platform, which makes sense. You have to subsidize early adopters. My understanding is like the developer relations and I don’t have no inside information here, but the developer relations for the Vision Pro, it’s more like you are going to regret not being here more.
00:21:34:19 – 00:21:53:20
Xander
So it’s all stick and no carrot, which I think when you have iPhone, that’s fine. Everyone wants an iPhone doesn’t matter. You don’t even care. The iPhone itself, the userbase of 1.2 billion users is the carrot, but that’s not the case here. And so I think that they’re negotiating from a position they’re used to, which is they’re used to just everyone needing to be there.
00:21:53:20 – 00:21:57:00
Xander
And so they have a leverage versus they don’t have a leverage in this case.
00:21:57:02 – 00:22:02:14
Warren
Can you elaborate on what you mean by that of of them, their developer relations being all stick, no carrot?
00:22:02:16 – 00:22:22:14
Xander
Well, so again, no, personally no instead of information but from readers in the tech analysts that I follow who talk about this the way that the developer relations have worked for this platform was they take you up, the developer could come in for one afternoon to test with the platform and then that was it. And then they’re like, okay, do you want to be on site or not click this box?
00:22:22:19 – 00:22:38:02
Xander
And a lot of developers are like, Can we come back and test it again? And they were like, No. And so I think that’s my experience. I would instill loyalty in that. You know, it’s like, I have no idea if one is. I mean, if you’re Netflix, you’re like, are user experiences fucking everything? You’re not going to just be like, well, I hope it works.
00:22:38:08 – 00:22:51:07
Xander
And so I think that is I mean, again, this is like third hand, this is me here from someone here from someone. But that’s my understanding of what’s going on under the hood with the developer agency right now. We’ve gone through a lot of issues. Maybe we get to talk about a little bit of a sugar high.
00:22:51:12 – 00:23:15:23
Warren
Yeah, it’s talk about poor world. It seems like I woke up one day and my entire content feed all my algorithms which are very tied around gaming and games industry. It was just 100% about world. And this is going to be the story I think of the year that becomes what gets comped for everything. Like everyone always comes like best case scenario.
00:23:15:23 – 00:23:45:23
Warren
So I think there’s going to be a lot of, you know, a lot of pitches this year that are like and we’re going to achieve the virality that Pal World did and unlock this. But practically everyone’s having fun. This is one of those rare unifying moments where we as gamers collectively discover a game and we’re like, This is fun as hell and it gets true healthy virality through people just loving a game, finding it ridiculous and fun, streaming it, telling their friends.
00:23:46:05 – 00:24:08:17
Warren
And it’s, I think, a bit of an underdog success story of this. Just like coming out of nowhere and taking over gaming. Not without controversy. If this is the first you’re hearing about POW world, I would be shocked if you’re this niche listening to like a game’s growth marketing podcast, but I haven’t heard about it. But yeah, it’s been described as Pokémon With Guns, a survival style game meets Pokemon collecting or Monster Hunter style game.
00:24:08:18 – 00:24:19:01
Warren
But the good news is, is we have someone who’s been playing it a bunch. So Zander, why don’t we start with the game itself? Like what’s your take on just power as a game? Yeah.
00:24:19:03 – 00:24:35:05
Xander
Yeah. So we’ve got a couple of things like just the very top biometrics is they’ve sold over 8 million copies in under a week, grossing over $20 million and what was allegedly $7 million development cycle. Let’s talk about our way. That’s basically the best our way you get for anything. And I think one of these that warned has run was like that this spread virally.
00:24:35:05 – 00:24:55:12
Xander
And the other thing is this bet spread mostly without any paid advertising through steamer conditions and through like Tik Tok, Instagram and YouTube and Twitch virally. Yeah, that’s sort of how we got where it is today. The characters do real. BOOKMAN That’s a fair criticism, but if you actually do get to the gameplay, the gameplay is a 0% Pokemon.
00:24:55:12 – 00:25:10:22
Xander
You do capture house as they call them. They have power spears, you throw them, capture them. But that’s basically where it ends. There’s no evolution, there’s no trainer battles in the Pokemon sense. And if you play like Ark or Rusty or you like Elden Ring, it’s a much more survival style game. That exploration is very much like Zelda.
00:25:11:00 – 00:25:34:13
Xander
It really does have like a sort of Elden ring light feel except for your capture. These powers Except I have been playing this game. I think it’s a blast. I think what they’ve done is really interesting in terms of how they’ve managed to combine and subvert genres to make a new feeling experience that like really feels traditional. I think the thing that like draws people to it is there hasn’t been a good Pokemon game in 20 years.
00:25:34:13 – 00:25:57:12
Xander
I think in my opinion. Golden Silver on the Game Boy Advance was last Pokemon game and they’ve been rehashing it over and over again, but there’s still like something inherent about collecting little monsters and then having them do stuff for you that is like ticks an itch in someone’s brain. And so I think that they’ve basically taken that core loop and then combine that with an open world exploration game, bleed, build your base the item at your base, and then also theming it.
00:25:57:17 – 00:26:13:19
Xander
Is it like an adult themed game. So there are guys can craft guide and you can put your, your palette, you can create Amazon sale factory worker lines. And I think that like the audience who played Pokemon when they were young now want a more mature theme and I think this is sort of this thing is part of the reason why it’s hideous.
00:26:14:00 – 00:26:23:07
Xander
I mean, it’s literally it reminds me of this, I guess, of Elden Ring a couple of years ago where like literally just took over everything. Those are sort of my initial thoughts and the other thoughts weren’t.
00:26:23:09 – 00:26:43:10
Warren
Yeah, I think, you know, it’s worth touching a little bit on the developer or the developer is this Japanese company called Pocket Pepper. Like this is also fresh, like I’m digging around Wikipedia, like Puck Appear doesn’t even have a Wikipedia entry. Yeah, yeah, yeah. Like, and we’ve been in touch with his team a little bit over the last week, and they’re coming from a pretty humble place.
00:26:43:10 – 00:27:15:01
Warren
Let’s just say that like, they were like, thinking our team for, like, playing the game and stuff, but it’s going to be really interesting to see where the developer goes from here. For the developers Twitter following, they only have 21,000 followers on Twitter for the developer pocket here, which is like that’s like a mid-level NFT project. So it’s always cool to see these games break out of nowhere where it’s not like, you know, even though we’re marketers, like it’s refreshing to see games that are not the brute force marketing machine forcing us to digest a game, but just something we’re like people really just having fun.
00:27:15:01 – 00:27:30:17
Warren
True, true virality. And I do dread the next year of people coming to us and saying, Hey, we want to do influencer campaigns so we can do it. Pocket pelted with how world I think missing the point that like if the game doesn’t support it, like you’re just going to blow your money.
00:27:30:19 – 00:27:46:08
Xander
Yeah I mean I think there is huge opportunity for like influencer focused marketing. You’ve been talking to a lot internally about how much that part of our business is growing, and I think that’s obviously something that we’re going to see grow so quickly. But I think that’s to your point, that’s not what this is. This is product like growth, which it’s a really once in a lifetime opportunity.
00:27:46:08 – 00:28:13:16
Xander
This is like growth at this scale, obviously like Minecraft, but happening in a week, which is just so, so unheard of. It’s literally the number two most concurrently streamed game ever. And it’s early access in that six days. This is the kind of stuff you can’t make up. And so, I mean, I said this earlier, but I want to reiterate this my thesis for the game development companies that are going to be the most successful over the next 1 to 5 years, small studios, innovative design and I think like go to market but like intelligent go to market.
00:28:13:21 – 00:28:33:21
Xander
We’re not talking about Super Bowl ads, we’re not talking about big banners. We’re talking about, you know, low cost basis focus on game play. Think about how you can match distribution to your audience. And I think we’re going to see a ton of these small game companies. And I said several times in the past year, we’re in the early stages of the next generation of games, and I think that we’re starting to see those hit.
00:28:33:23 – 00:29:01:04
Warren
Yeah, it’s also just a reminder that like marketing can never make a bad game successful long term and inversely, a great game needs very little behind it and can just be like the afterburners on it, be it virality and social marketing or paid marketing would be really interesting. Time for them to put on a little bit of afterburners of people now being familiar with POW world, but maybe not knowing, you know, the platforms it’s on.
00:29:01:06 – 00:29:05:08
Xander
It’s on its own steam on PC. That’s it. And like I explained.
00:29:05:08 – 00:29:20:20
Warren
Mobile, I don’t know that you could have a good 1 to 1 experience on mobile, but yeah, it would be shocking if they weren’t like fast tracking with a mobile, something in the POW world if you would look like, particularly as this developer pocket here does have other mobile apps they’ve made.
00:29:20:22 – 00:29:37:01
Xander
Yeah, they just released a roadmap. I mean the rollout looks awesome. Lots of bug fixes. It’s a week of beta access but they’re launching PDP. There’s launch you end game raids I mean this it’s really there’s the fuck up like we’ll see but it’s really theirs to mess up. They have like this could be a lightbulb scheme that could go on for a decade if they don’t mess it up.
00:29:37:06 – 00:29:40:10
Xander
So super, super, super curious and excited about this one.
00:29:40:12 – 00:30:00:11
Warren
Awesome. Well, we covered a lot this week. I think that’s probably enough for this episode, so thanks everyone for catching up with us. As always, the episode is brought to you by our team here up here at Upptic, we do all things to help game companies and their best games grow to massive audiences. So we develop the creatives, we handle, the paid marketing.
00:30:00:11 – 00:30:17:16
Warren
We can help with the influencer and cable type initiatives as well that we alluded to. And we’re also deep in the Web3 ecosystem and work with some of the biggest names in that space as well. We just love games, we’re big nerds, so if you’re growing a cool game, reach out to us. We love to chat and we’re pretty friendly as well.
00:30:17:17 – 00:30:32:18
Warren
Can we just share a website that’s a pickup? As Andrew said, up Top will be attending a few live events over the coming months, the first being DICE and Guest estimable Growth Summit in Las Vegas in mid-February. So hope to see some of you all there talk soon.