Google privacy U-TURN, game investment SHRINKS, AI Friend OBLITERATES VC cash – Games Growth with Upptic

In this episode of Upptic’s Games Growth podcast, hosts Warren and Xander engage in a lively discussion about the latest developments in the gaming and tech industries, including Google’s recent privacy policy reversal, the latest games industry report from Konvoy, and controversy around Friend AI.

Google’s Cookie Deprecation Reversal

Xander kicked off the discussion with news that Google has reversed its plan to deprecate cookies on the web. This reversal has significant implications for mobile marketers. Initially, Google intended to replace the Google Advertising ID (GAID) with privacy-preserving APIs, aligning its web and mobile strategies. However, in response to regulatory scrutiny and concerns over monopolistic practices, Google has decided to maintain cookies, opting for a new user choice model similar to Apple’s App Tracking Transparency (ATT) framework.

Xander noted that while this development might seem like a positive step for privacy, it raises questions about Google’s mobile strategy. He speculated that Google could be moving towards an ATT-like approach for mobile, potentially affecting mobile marketers’ strategies. Warren expressed concern that the gap in understanding these complex tracking systems remains significant for many developers, which could widen the divide between smaller and larger gaming companies.

Warren and Xander both emphasized that, for now, marketers don’t need to make immediate changes, but they should keep an eye on Google’s developments and consider trying out Google’s Privacy Sandbox.

Konvoy’s Games Industry Report Highlights

The hosts delved into Konvoy’s latest industry report, which provides insights into gaming investment trends. Xander shared key takeaways, including the normalization of investment levels from the highs of 2021, with early-stage companies receiving most of the funding. This trend suggests a growing interest in nurturing new game developers and startups – and an overall healthier games ecosystem.

One intriguing finding from the report was that a gaming ETF is outperforming the S&P 500, indicating a positive outlook for public game companies (though it is worth noting that another gaming ETF underperformed). Additionally, public game companies and tech giants with gaming divisions have amassed significant cash reserves, signaling a potential surge in mergers and acquisitions.

The report also highlighted the ongoing interest in technology and infrastructure investments over content, a trend that Xander and Warren found noteworthy.

Emerging Trends and Challenges

The hosts discussed several other emerging trends and challenges in the gaming industry. They noted that the Asian gaming market continues to dominate, with significant investments flowing into the region. Xander raised concerns about the impact of regulatory scrutiny on U.S. game development, while Warren suggested that the industry’s growing decentralization might lead to fewer physical gaming offices in the US.

One surprising development mentioned was the introduction of Olympic esports games in Saudi Arabia, part of a 12-year partnership with the International Olympic Committee. Xander expressed fascination with this unique arrangement, showcasing the expanding reach and acceptance of esports on a global stage.

Friend AI’s Bold Domain Purchase

In the latter part of the podcast, the hosts delved into a hot topic making waves in the tech world: Friend AI. This innovative product, created by entrepreneur Avi Schiffman, is an AI-powered wearable device designed to serve as a digital companion. The device, worn as a pendant, utilizes Anthropic’s Claude 3.5 model, offering users an interactive experience akin to having a virtual friend on call at all times.

The hosts shared their views on Friend AI’s unconventional approach, particularly its bold marketing strategy. The company made headlines by spending a staggering $1.8M of its initial $2.5M funding on securing the domain name Friend.com. While this decision sparked criticism as emblematic of startup culture’s excesses, Warren suggested it might be a savvy marketing move designed to generate buzz and attract further investment.

Xander pointed out the business model’s sustainability challenges, noting the device’s $99 price tag lacks a subscription model to cover ongoing operational costs. The hosts agreed that while the product’s unique positioning as a non-productive AI tool is intriguing, Friend AI’s long-term viability would hinge on its ability to secure additional funding and possibly pivot its business strategy.

For more in-depth discussions on gaming industry trends, check out all of the Upptic Games Growth podcast.