This week, we dive into some of the big news in the industry – including Elon Musk’s latest remarks to advertisers, the situation around Binance and its CEO, and ByteDance winding down Nuverse. But more than simply regurgitating what you’ve already heard, we provide key insights on how to take advantage of Twitter advertising right now, why things are looking bright for crypto and web3, and much more.
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Full Transcript
Please note that this transcript is AI generated and may be prone to errors.
I found this game.
Corporate America.
Corporate America? That’s a game. What is it? It’s by some guy I found.
He’s a local game designer in Oakland,
and I
found it at a
local game shop in Temescal.
And it’s game about basically how you can just take over the government with corporations and it’s
fucking incredible
Let’s go We have like 4 to 6 really, really
loud. And not just friends who are really excited about
how America politics not working.
You should check them out.
Welcome to the game’s growth update. Your weekly top news trends and insights for the games growth industry recession brought to you by up to
learn how our team and technology helped drive millions of players. The world’s best teams object,
Cool. Well, we got a lot to cover this week.
Some interesting particles
topic. We do
news. Lots of news. Lots of news. What’s news you won’t cover? That’s important because we don’t have anything interesting to say about it as well. Yeah, I think that’s
as we’re, you know, kind of refocusing on news.
You know, we talk a lot about it.
some of the big stories in tech,
you don’t need like the fifth take on,
Openai I Sam Altman leaving can be like leaving come back.
But
I think for a lot of these things going on, we’re going to just try to see like, is there an angle here? Is there a story for those of us working at the nexus of
games and growth marketing? And
I think we’ve got some interesting ones today. Yeah. Where should we serve? Zander Well, let’s start with the one that’s the most
over covered topic.
Yuan And advertisers do want to give the highlights here. Yeah so I don’t know if anyone heard about this but there’s this guy it seems Elon Musk
yes
few companies. One of them is called X, formerly known as Twitter.
Anyway. So yeah, I think this has been like highly overreported. But yesterday Ellen talked at the New York Times
DealBook conference and
the topic of
brand advertisers leaving Twitter came up
and
Elon, in so many words, basically, clearly and repeatedly said
if brand advertisers are going to
try to quote unquote blackmail me by
pulling money, they can go fuck themselves.
And he called out he called out
Bob Iger
of
Disney relatively explicitly by name during this. I’m sure
Linda Yakovenko was wincing wherever she is watching from.
So everyone’s heard the story.
interview is very viral. But what I don’t see people talking about in the first place my head went to is what does this mean for
those of us that are doing data driven marketing, that are not brand advertisers that are in the game of
arbitrage ing CPM into revenue from games
other products.
So
I want to dig into that. I mean, Zander,
have a lot I want to share, but like did you see the interview? Any high level thoughts before we get into the practical implications for marketers unsolicited bids? I want you to watch the whole thing. I’m
reticent to talk about it before I consume all of it. Just because people have so many takes that you want.
I like to
having the mob take a much prefer to for my own opinion, but
seen the viral pieces. Yeah, the world does not need more Elon Musk hot takes so no. So yeah,
tweeted
me after saying that
thinking Elon for the
Cyber week sale of 90% off
CPMs on Twitter.
So what do I mean and why am I thinking about this
so we’re in the most expensive time of the year for marketers with Q4 because the default is
a lot of products do their heaviest marketing in November.
December Christmas season is when the bulk of consumer spending happens. And so commensurate with that, it’s when the cost of advertising inventory shoots up
as performance marketers.
like one of optics good strategies is we often actually pull back in advertising in late November in December, because
games are pretty evergreen product. And we typically find if we just kind of wait a little bit, spend that dollar in January, we’re often getting about two excluding for our buck because
like the day after Christmas,
some people know this, but bit of industry secret, literally like Christmas Day, day after Christmas, a ton of advertising stops because it was all lead up to Christmas.
So anyway, why am I going to the tweets about this Twitter is one of the channels that has historically been very heavy on brand advertising and low on performance marketing spend.
These are the channels that are traditionally the most highest impacted and increased cost of advertising going into this holiday season.
We have seen something kind of counterintuitive, like historically, like Twitter
or X has been kind of trash for performance marketing.
And one reason it has been historically is I think the CPMs have been really jacked up by awareness brand sale marketing,
nice side benefit. If you set your opinions on Elon and his measurement
X aside for a moment
is he’s done multiple things to offend brand advertisers that have left the
ecosystem. And this is another bit of
alpha from, you know, optics day to day of marketing.
We’re actually seeing like Twitter is surprisingly returning as a valid performance marketing channel for some of the games that we’re doing
marketing for. So
tip from us and
a little funny to just see
the relationship between what is
bad for brand advertisers that are more focused on the association. What content might their
as be showing up next to you, etc..
Some of the kind of perception
around their advertising is inversely
plus for those of us in the performance parking space so everyone can make their own judgments about how they feel on
advertising on X right now. But just something we want to call out. It’s like, hey, when the top bidders and biggest buyers on a large
advertising platform pull out the cost of inventory, custom bidding on that imagery goes down immensely.
So this is, I think, the interesting kind of uptick angle on Ellen telling brand advertisers to fuck themselves and our
maybe recommendation of something to check out this holiday season. If you’re trying to find a channel that is not oversaturated with the cost
of marketing going up underneath us here,
do you agree on my take? We haven’t tested this yet because this just happened yesterday.
But we are, you know, exploring like going a little heavier into Twitter while there’s that
blowback from this year. Well, so whenever there’s
topic we cover, I want to make sure that we have some unique perspective. It’s one of the first things I did was I reached out to one of our growth leads who works on
cross portfolio.
Ask him, how is Twitter doing for advertising these days? You said, you know, it’s decent if you segment it rate on EOS
in U.S. we can spend about, you know low four figures a day
for, you know, large casual game and it just the performance is really good. It’s like, well I use work in my portfolio.
We never got here to work. And so
that
actually shows that like, okay, there is a post year where there wasn’t before
if that was the last month, that means that maybe this is channeling skills going into New Year, which I mean that’s kind of exciting for us.
it’s our whole job is to find new channels and if we have one, great.
Now,
I think I am less offended than the average person. So I have no problem advertising on Twitter slash X,
but each brand has to make a decision. So like you said, it’s interesting, though. It’s I mean, maybe maybe some opportunity here. Yeah, I would not want Wendy’s job. I think she’s probably like the exact right person for this job because you need that counterweight to
you.
On constantly offending anyone. A source who knows how to
cuddle and sweet talk.
There’s large brand advertisers. She’s got her work cut out for her. I’m so curious to see what’s going to happen with her career. It’s either the smartest or stupidest career decision ever made. We’ll see. Speaking of super career decisions, your contribution,
let’s jump to someone who you might have heard of if you followed the other three industry fairly closely,
which is
the by then CEO C.C.,
who
may or may not be going to jail.
We’ll see. So just
again, a really, really popular story
if you haven’t followed this closely
by its CEO, is stepping down. And by chance, for those who don’t know its biggest
currency exchange in the world
Binance CEO
C.C. I’m going to try to pronounce his name is stepping down
after pleading guilty for breaking U.S. anti-money
money laundering laws.
And the company agreed to a $4.5 billion
settlement with his personally paying
million,
which is one of the largest corporate
penalties in history. There’s a bunch of stuff that they did that’s sort of legal.
One of the top was that they have over 100 k suspicious transactions with terrorist groups and child abuse sites.
Minor key as far as like number of transactions or any suspicious transactions.
So not $100,000, 100,000 transactions, which like a lot of transactions. And if you listen him talk about it, he basically at the time was basically he sort of like
rolled out
the
the Silicon Valley playbook, which is like
assault
permission
or forgiveness, not permission, where he’s going to do whatever he can,
market share and we’ll sort it out with regulators later.
And so it’s pretty interesting to see how this plays out. I mean, he came
seemed very, very somber in court.
He’s like, I’m not used to being in these type of situations. I’m here to do what’s right. They’re saying he’s going to give me 18 months, which considering he’s literally like funding
ISIS and Al Qaida and he was they were literally using that to clear their money on
Finance seems like a pretty late
penalty overall.
they did 4.5 billion
fine the 4.5 billion. But for some
context they did hundreds of trillions of dollars of trades. Actually the cryptocurrency over the previous year or so, I don’t know, hundreds of choices. But
in the range of
11 figures to sorry.
So it’s a pretty crazy story.
I’m curious what you think about
how this is playing out overall. And then also, does it matter to us as matter to other games? Yes. So similar to the Ellen story, I think
there’s a reason that I wanted to cover that this week. I mean, first, maybe a little more context
Yeah. CC, I think his
full name is pronounced.
Check things out.
He is assumed by most to be one of the wealthiest people in the world.
We don’t actually know his official net worth,
but a lot of people
have estimated based on putting
some
data points together, that he’s likely one of the world’s wealthiest people.
So,
you know a few times in conversations recently have been talking about where in the burn the sage era of crypto and with three right now which is the last bull market had a lot of greed had a lot of bad actors one by one most of those have been identified,
brought to trial and many now imprisoned or on their way there.
And what we’re seeing kind of in the trenches with a lot of the teams that we’re working with that are still building in Web three
especially coming out of the bear market, there’s kind of like
healthier bones on this new crop that we’re seeing.
The A-list actors
brought down and people who continued building like in this bear market usually did it because they had a non short term financial incentive.
That was their primary motivator. So how does this tighter CC
CC was
the largest remaining
controversial figurehead from
this last cycle and before. I think his story is a little different though for a few reasons. Firstly, he turned himself in here
and I don’t think this is the last that we’ve heard
of him. This is a drop in the bucket of his total fortune with this penalty is and I think
he’s a very calculated person.
I was in the background. Zander, I was pulling up a dandy alignment chart
to try to for myself mentally put like where I put CC on this. And I would say this is kind of like
he’s viewed
for dandy alignment. I would put actually CC as true neutral.
So
perhaps, perhaps. But I think
where is
some of these other ill actors we saw
acting with a lot of like outright
ill intent or knowing bad actions.
I think most of these actions and I don’t know the dude, it seems like more like intentionally turning a blind eye to things and he’s not he didn’t despised in
in light of
the things that he’s known to have done in the same manner that a SBF or someone is. But he’s also not universally loved by any means, but definitely controversial and definitely did some things that he needs to go to jail for.
Yeah. So yeah,
think like with him getting out, it’s sort of the last of the quote unquote like main characters of the controversial figures from the last cycle. And again, in kind of this theme of like
it feels like we’re starting a new cycle, as we talked about in the most recent podcast with crypto with Web3, and we’re starting with a bit of the clean slate and a lot of the big power players that were doing questionable things out, which I think is setting up the market for a little better conditions.
Now, will there be a new class of greedy ass people on the Certainly, sure, but
a more mature segment. I think that’s kind of what this is all boiling down to as some of the noise and greed gets worked out. It is feeling this year, especially as we close out the year like the segment has matured a bit.
What are your thoughts, Sandra? I mean, I think largely
agree. I think in this specific case, we have to really acknowledge that this is a largely symbolic move. He stepped down as the CEO, but he’s still by far the largest shareholder and majority shareholder of Binance. The fees that they’re getting are which
crazy to see
4.3 billion is nominal, but it is nominal in the context of how much money the company is worth and is making.
And I mean 18 months jail time while I am happy, I hope he gets at least that much. It’s really a slap on the wrist relative to the immense wealth creation that he has undertaken over the last decade. So, you know, I guess respect he understands how to play the government. But and I think your point is that he’s very calculated in the way that someone is young and,
fast and loose as SBF was
he is
sees is not and so media for him
one of the other interesting things here is like the crypto market seems to have largely shrugged this off you mean transaction volumes on Binance are
like during this period which
think if anything it’s like
remember when Facebook settled that case a few years ago
for
billions of dollars the stock went up. And I think it’s basically the same thing here is like investors and folks who are using these platforms basically see this as a net positive, assuming that it works through and they make it off to the side.
Well, is it is it so much that it’s a net positive or just the removal of uncertainty? But to me it’s just like risk. Yeah, yeah, yeah. I mean I want to be precise to linked. Yeah, I think, I mean it’s de-risked in a way that it wasn’t before where maybe the risk is this works its way through the system.
Yeah. Makes sense. So I don’t think there’s,
ton that we want to dig into you about. The story has been covered a lot elsewhere, but I do think there’s implications. A lot of the gaming ecosystem is funded by Binance in some capacity. Their own chain BNB chain
has a lot of gaming projects on it. Do you think that there’s going to be trickle down effects
that are already in progress from this and it will have impact on our sector of games and games?
Marketing?
But yeah, I just wanted to kind of talk about
put this is sort of like
cap on this, the final note on this, the last era of the cycle. And it really does feel like, okay, now we’re turning the page
and I’m going to learn how this next cycle pans out. One of the more interesting and maybe in
poorly formed metaphor is
it reminds me a little bit of Microsoft in the antitrust,
you know, in the early 2000 where it’s like,
yesterday it’s like, what was this case about?
It had nothing to do with the antitrust. It had to do with, you know, paying homage to Washington. And it seems a little bit like this is similar in that regard, where it’s like
these people are taking, you know, going to Washington, paying homage, letting them get their pound of flesh
and moving forward
I think we’ll see crypto continue to
become more and more important and mainstream and look no further than BlackRock is starting a Bitcoin ETF.
I mean, the biggest one, the biggest companies in the world. And if they’re doing a
Bitcoin ETFs that
really large investors can invest in Bitcoin, I mean this is all in one direction, at least for the medium term. You bring up a good point, Zander, which is
evolving relationship between crypto companies and government. So I think what the U.S. government is trying to demonstrate here is
confess your sins, work with us and you will be allowed to survive,
and exist in some capacity.
But if you insist on going your own way, breaking the rules and not working with us, we’ll destroy you. So
where at least setting a precedent of,
you know, if these companies kiss the ring, confess their sins, that they’ll be allowed to continue to exist in some format.
Yeah, Agreed. What’s next? Cool.
this last one came a little bit out of nowhere, at least to me.
And it was at Bytedance, The parent company of Tik Tok plans to wind down
the new risky brand, and exit the video game
industry
for insiders, which I mean, that is a shocking, shocking development.
This issue comes after a strategic review prompting a restructuring in the game division
provide much specific details,
but they will be
working on halting unreleased games and exploring options to divest from their existing titles, which could potentially impact hundreds of employees. It won’t affect some of their divisions.
for instance the Ooh yo casual game brand, which I don’t really know anything about, which is featured in Doyenne, which is
counterpart in China
and also wouldn’t affect any games made it into TikTok.
So to me this was a huge surprise and I was trying to understand,
was going on here and it’s probably
traded company. And so there’s not a ton of information that’s all sort of hearsay. So we’re just I think that’s just kind of important. So just for reference, I mean, I think
referencing a couple of articles here, one by The Verge
and some information from Reuters.
Reuters typically has a good track record of factual information,
but we do want to give the disclaimer that this is like a pretty breaking story and we’re still really light on statements directly from
her new person, Bytedance. So, you know, we’re right now reporting on
what the rumors and what the leaks are. Right. That’s important
to acknowledge.
I mean, to me, this is overall like a pretty big surprise because Bytedance’s has been so unassailable for so long. I mean, Tik Tok, the ascendant social channel, everyone knows about it. Literally. They do feed the U.S. government’s ability to regulate it like basically seem to in sports.
But,
they’ve had aspirations for gaming for quite some time.
And just to put that in some context,
they’ve invested really aggressively over the previous several years. They bought
mountain tech for 4 billion
in 2021. Portability Tencent, which is largest game company in the world, put that bid
presumably having to pay significant
costs against that.
They also acquired C4 games
in April 2021 for undisclosed amount.
They were working heavily
development, an unannounced game and they’re also publishing Rebel Snap, which was hailed as a critical success. And also I have given them hundreds of my own dollars.
they were purportedly struggling commercially, although
public information. So I mean I think at a high level,
I see this as a sort of a continued retrenchment across the mobile games industry.
And if you missed some of our earlier episodes, there are lots of games companies that were struggling and this seems to just be a sort of
similar effect at play here. But I’m curious, Warren, when you think about this overall, you’re going to say,
yeah, and this is a tricky one because we’ve done some work with the new Voice team.
We have
friends on the new first team on the SAP team,
and you know, people are still kind of getting to the truth of what’s actually going on here. But just going off of, you know, what has been disclosed in these articles and the information from Reuters
and,
what’s publicly available. I mean, Ticktalk went hard into game publishing.
They
made
believe,
for Moon Ton, that was an acquisition of about 4 billion. I’ve seen slightly different numbers of different sources. And for those not familiar
amongst other games is the developers of a huge game in Asia called
Mobile Legends Bang, Bang
and similarly with the
investments
in relationship with second dinner
they wanted to come out of the gates with triple-A developers in both the Asian market and the Western market, and
that’s not cheap
for Montana.
And specifically, the reports are that they outbid Tencent
on the acquisition of that studio and it is not cheap to outbid Tencent.
And you got markets in the US. Yeah, it is not easy to go head to head with Tencent.
So
the aspirations of launching this arm. I think we’re about as grand as you can be with launching a new game publishing entity in the what decade are we in right now?
20, 2020. Okay. I think so. That’s where there have yeah, where there hasn’t been a lot of like actually, you know, the last couple of years huge shots on goal of new mega publishers
in mobile sort the obvious question but yeah agreed right where arguably they’re
at this point more of an investment arm than full and publisher on their own so far although a lot of rumors in that space that I think we’ll get into in the future.
So anyway yeah what’s the take on this?
This is a case where it’s not like they had bad products. It’s not like they had
lack of resources, not like they had bad people on about team.
it almost seems like they
overextended and I’m guessing that the expectations internally at Bytedance for the level
of investment that they did in game publishing
probably just weren’t matched
some capacity.
And you know, with the level of investment they made, like the expectations of returns must have been sky high. We don’t know what this internal numbers look like, right? So they’re in 2021. The timing also, this is just really bad. They’re bargaining. Yeah. Anyone market was way up
it was clear the impact of it yet at that point for everyone
and how much was going to affect the games in the street so you’re having a bidding war at the top of the market and then you have a bunch of factors compounding that are
heading in the other direction, which is interest rates increase, ADT,
overall mobile
becoming less competitive and I
can understand how that can create if you invested billions of dollars, there’s a really high tension there and especially when you’re comp against tick tock, which is like the most ridiculously growing business of
modern era. And so it’s like, okay, what do we spend our effort on? Tick Tock, which is clearly just printing money at the rate that no keep up with or at least spend money here.
So yeah, I’m kind of it’s like,
I think, you know, we’ve seen a theme if you compare 2021 to right now, we
saw this with Facebook as well, all of like
lot of businesses are just refocusing on their core group right now. And I think it’s the same story here. Ultimately with Bytedance,
it’s really hard to do multiple disparate things and be the segment leader
in all of them.
I think Bytedance knows
where they’re the segment leader
TikTok is just unmatched. I think still as a
social platform, and it probably just made financial sense at the end of the day. But it’s sad to see because there’s so much I mean, they have some great games like Snap is a great game. I don’t play mobile legends bing, bing, but it’s a phenomenal and beloved game.
They acquired some amazing talent for new verse. So I’m just watching this one closely, going to see where the dust lands, what happens with these games, what happens with talent.
But yeah, I think this just came down to the economic conditions that the world is in and companies need to refocus on their core. Yeah, And I mean, one important note is they’re planning to
it seems like based on reporting, they’re planning to
divest their current investments in these games so not shut them down, basically find
other homes for them, which is an easy way for them to generate revenue and also cut costs.
Enter so me for a
little clarity there. I think there’s been
again this is all like leaked and insider information. Supposedly there has been a clear
decision to stop investment in new games and
cancel more new projects. What is more unclear so far is what happens with their current flagpole games. And so I think that’s what we’re all kind of waiting
to see.
think
that’s what’s happening with U-verse.
We had a
fourth topic which we’re going to cover today.
the biggest story of last week was just
the final chapter for now in the Sam Altman
open a high drama and back and forth and we talked about it and
we actually don’t think that there is a really important relevance angle here for game marketers.
So it’s almost like discussing, like why we’re not talking about it. But I think
that there’s a really interesting related story that popped up in social media last week, too,
which was kind of the big debut of
PICA,
which is
they call it like an idea to video
platform with a really amazing tech demo
that seems to have a lot of people that I respect really excited.
So rather than kind of like do a surface level review and reporting on the news, I think what we’re going to try to do next week, if all goes as planned, is bring in some of our creative team who’s been testing a lot of A.I. tools for the last year and just kind of get a lay of the land of what they think of Pikka, as well as the current landscape of air for marketing creative, which is an always evolving and often overhyped segment.
And I think that’s going to be a lot more interesting and relevant to marketers. Yep.
Cool. So stay tuned for that next week. We will have that for you.
Morning to take us out.
That’s it.
Thanks, everyone. Enjoyed the new show this week. As always, this was brought to you by our busy team here.
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