Welcome to Master the Meta, the #1 newsletter about the business of video games.

Hi everyone,

Three quick announcements:


First, I (Aaron, here) am happy to announce that Naavik is merging with Master the Meta and becoming our official consulting partner. Manyu and I have enjoyed working together, so we’re tightening our partnership even further. Through a variety of services, Manyu and his team of mobile gaming experts have served over 30 notable gaming companies, including Ubisoft, Facebook, and Square Enix. We’ll collaborate on future content for MTM, and I’ll be joining Naavik as an advisor to potential clients. Make sure to check out Naavik’s website and reach out for all consulting needs!

Second, we’re happy to welcome Owen Soh as a guest contributor. Based in Shanghai, Owen founded EastLab Consulting, a boutique advisory firm that helps game companies around the world with China strategy, publisher sourcing and due diligence. You can find him on LinkedIn.

Lastly, we’re looking for sponsors! If you’re interested in sponsoring the newsletter, please reach out to us at [email protected] and/or [email protected].

Now, here’s your weekly roundup and analysis of what’s happening in the video game industry…

📰 Top 5 News


Activision delivered an excellent third quarter: The company’s player base grew 23% year-over-year, time spent in games grew even faster, net bookings jumped 46%, the team delivered 45% operating margins, and earnings per share more than doubled. It was an easy beat and raise. These outstanding results likely aren’t replicable, but there’s plenty reason to think Activision can excel from here.

The company has a lot going on — a new Tony Hawk refresh, Crash Bandicoot 4, stable Candy Crush sales, etc. — but the star of 2020 is Call of Duty (CoD). Across Warzone (free-to-play PC/console), Modern Warfare (the latest premium game), and CoD: Mobile (also free-to-play), Activision has built a powerful three-legged and self-reinforcing ecosystem. It’s also performing wonderfully. Modern Warfare and Warzone experienced 7x growth in monthly players and hours played over last year, Warzone successfully upsold players into Modern Warfare (best first year sales in CoD history), 2/3 of units are now sold digitally, and net bookings rose 4x over last year. The COVID bump certainly helped, but this step-change increase in engagement appears mostly here to stay. Furthermore, Black Ops Cold War, the next premium edition, launches soon and should do quite well since it’s selling into a large, highly engaged audience. CoD: Mobile is no slouch either; it’s seen 300+ million downloads, improving monetization, and over 50 million players have already registered for the upcoming China launch.

Call of Duty’s evolution is fascinating, but what’s perhaps even more interesting is recognizing that management wants to apply these lessons and successes to build larger, more engaging ecosystems around other key IP. Mobile is the largest piece to build out, and although Diablo Immortals and Crash Bandicoot: On the Run are already announced, it’s clear that there’s even more in the works. Growing the World of Warcraft ecosystem is the biggest opportunity, but that’s still just one opportunity of many. Not everything is perfect — for example, esports franchise payments were delayed, there remain cultural tensions, and who knows what’s going on with Overwatch 2 — but with high cash flows and $4 billion in net cash, there’s little reason management can’t capitalize on this opportunity.


Ubisoft’s first half is decent. Ubisoft has faced multiple challenges over the past year: Ghost Recon: Breakpoint and Hyper Scape underperformed, the company faced major culture challenges, and delays have been constant. All that said, Ubisoft still benefited from the COVID bump, leaned into its top franchises and live ops capabilities, and experienced more growth than many previously expected.

Although Q2 net bookings were technically down 2% year-over-year (Ghost Recon: Breakpoint launched this time last year), H1 net bookings still rose 15%. This is a result of strong back-catalogue sales and ongoing engagement across multiple franchises — Rainbow Six Siege, The Division 2, For Honor, The Crew: 2, Just Dance 2020, and Assassin’s Creed. The company is on the cusp of a large third quarter, as well, which should continue this momentum. Assassin’s Creed Valhalla will likely experience a huge launch, Watch Dogs: Legion will likely perform fairly well, and Fenyx Rising, if reviews are good, could contribute decently. We shall see. Unfortunately, as a result of work-from-home issues, Far Cry 6 and Rainbow Six Quarantine are getting delayed to later next year (joining Skull & Bones + Ubisoft’s first mobile game with Tencent). This isn’t shocking — and fiscal year guidance is mostly holding steady —  but it continues an unfortunate trend.

A couple other points. One, it’s worth noting that Ubisoft is unveiling Ubisoft Connect, a service that lays the foundation for improved cross-platform functionality, and Uplay, the subscription gaming service for hardcore Ubisoft fans, is rebranding as Ubisoft+ and will launch on multiple platforms like Stadia and Luna. Second, Netflix is turning Assassin’s Creed into a TV show; it’s too early to know if it’ll be good, but there’s a chance it provides a nice tailwind (similar to how The Witcher revitalized The Witcher 3 game).

All in all, Ubisoft has the pieces to build something much bigger and better. It has great IP, growing experience in post-launch content, decent profits, and ongoing momentum. That said, it still has much to improve on — cultural improvements, getting all production back on track, better managing live ops, creating a clearer mobile strategy, and generating higher overall efficiency (record 15% operating margin pales in comparison to the likes of Activision and EA). Hopefully the company is able to turn those challenges into opportunities over time.


Facebook Gaming takes on the cloud. Facebook is now the fourth Western tech titan to tackle cloud gaming, and the company’s approach is both surprisingly interesting and unsurprisingly having Apple conflicts. Before digging into exactly what Facebook is doing, let’s review the other titan’s approaches:

  • Google Stadia is the closest to the original console model — pay a fee for access and then pay full price for games on top of that subscription. Sadly (at least so far), Stadia has overpromised and underdelivered.

  • Amazon Luna is taking a play out of Prime Video’s playbook and launching channels that gamers subscribe to, starting with Luna+ and Ubisoft+. It’s yet to launch.

  • Microsoft’s xCloud is primarily tucked in as an in-beta feature of Xbox Game Pass Ultimate, which provides an increasingly great value for lots of content. Cloud gaming is (so far) positioned more as a nice benefit rather than a killer feature or service.

Facebook’s approach is different. According to the company’s blog post, “Facebook Gaming has launched several cloud-streamed games in the Facebook app and on browser — playable instantly, with no downloads required.” In other words, it’s taking today’s popular free-to-play model, allowing players to demo games via ads without leaving Facebook’s ecosystem, and Facebook is even enabling in-app purchases and in-game ads on full cloud-streamed gameplay. The innovation here is less forcing new business models or disrupting the status quo, but rather making it much easier for consumers to simply jump into what already exists. Given the free-to-play reality and Facebook’s 2 billion user reach, it’s likely going to amass users far easier than the other titans, and Facebook’s advertising prowess should align with what today’s publishers already want (more players + better monetization).

Of course, let’s not get ahead of ourselves. It is interesting, but there are intense technical and execution details, and much of the expansion will begin next year. Plus, even though cloud-playable ads will launch on both Android and iOS, access to full cloud-streamed games via Facebook Gaming is so far only going to launch on Android and the Web. Apple remains a critic of the cloud gaming model, which in this case — where players are literally playing mobile app games that have already been approved + Apple gets paid — doesn’t make sense. I expect the “rules” to continue morphing, but overall am more optimistic than not of this working out in both Facebook’s and publishers’ favors.


Tencent leads VSPN’s Series B. Tencent just added an important piece to its gaming flywheel by leading the $100 million Series B funding round of Versus Programming Network (VSPN). The funding round also saw investments by Tiantu Capital, SIG, and Kuaishou (of which Tencent invested $2 billion back in December 2019). VSPN is a leading esports solutions provider in Asia with 70% market share of premium esports events in China (such as KPL, PCL, PEL), organizing and broadcasting China’s most popular esport tournaments including: PUBG Mobile, Honor of Kings, Peacekeeper Elite, CrossFire, FIFA Online, QQ Speed, and Clash Royale.

While VSPN is already a world class esports organizer, they will now move into the streaming space with this new funding. Dino Ying, VSPN CEO, said that the company will focus to expand the reach of esports, “We will make more in-depth collaborations between esports athletes, influencers and events”. According to Dino, streaming is the most developed segment within esports and VSPN will have larger investments into this area. Such a strategy will see VSPN have close collaborations with its new investor, Kuaishou, and probably also Tencent’s newly merged Douyu-Huya entity.

Thus the “Tencent Esports Ecosystem” is mostly complete. VSPN's advantages in the production and operation of event hosting make up for the deficiencies in Tencent’s esports value chain, and finally enable it to achieve a commercial closed loop. Tencent’s top grossing games — both present and future (like Honor of Kings, PUBG, Peackeeper Elite, etc.) — will have around-the-clock top quality content both online (Douyu, Huya, Kuaishou, VSPN) and offline (VSPN) to drive long term user acquisition, engagement, and monetization. (written by Owen Soh)


Scopely raised a $340 million Series E. This raise, which quickly follows the acquisition of match-three developer Genjoy, is notable not just because Scopely is a leading mobile games business and $340 million a lot of money, but it potentially signals a couple things to come. First, for context, Scopely has now raised $1 billion and is currently valued at a $3.3 billion valuation. That’s a step up from $1.7 billion when the company last raised $200 million a year ago. Second, although we don’t know specifics, the company — which is behind hits like Star Trek Fleet Command and Marvel Strike Force — is already profitable and growing both organically and via acquisitions. So, third, it’s likely that at least part of this cash will be used to continue the company’s acquisition streak.

It’s also a matter of time before Scopely more seriously considers going public. It’s definitely large enough, the market is currently friendly to gaming companies, the business should produce $900+ million in revenue this year, upcoming launches may accelerate organic growth in 2021/2022, and bolstering the balance sheet gives the company a strong financial foundation. Again, it’s tough to say without more details — plus, what Scopely does with this money is 10x more interesting than the fact it raised it — but it’s an important company to keep an eye on. We’ll do our best to learn more and share our findings with all of you.

Quick hits:

  • Microsoft reported Q1 results. Again, gaming-related results at the tail end of a console cycle aren’t very interesting, but gaming revenue grew 22% and Xbox content/services grew 30%. In my opinion, Game Pass subscriptions will be the most interesting metric going forward. Link

  • Sony also reported, and like Microsoft what is going to happen with next-gen consoles is far more interesting than recent results. That said, it was PlayStation’s second best Q2 ever, and 45.9 million PlayStation Plus subscribers is a great foundation. I’m also seeing the stat the the PS5’s first 12 hours of preorders matched the sales of the PS4’s first 12 weeks. It’s going to be a big launch. Link

  • Capcom reported its most profitable Q2 ever and generated 12.8% growth in sales. Link

  • Cyberpunk 2077 is delayed again (December 10), which is reigniting conversations about crunch. Link

  • Backbone, an attachable controller for mobile gameplay, recently launched to big fanfare. What’s interesting is how well the company is leverage huge personalities like MrBeast and Nadeshot as investors to market the product. This is the beginning of a huge wave of influencer-investors. Link

  • Preorders for the Oculus Quest 2 are outpacing the original Oculus Quest by 5x. Link

  • According to RoosterMoney, the top two things children are spending their allowances on are Roblox and Fortnite vs Books and Gifts a year ago. Link

  • Venn raises a $26 million Series A for its streaming TV network for games and culture. Link

  • Over 430,000 viewers watched US Congresswoman Alexandria Ocasio-Cortez play Among Us on Twitch, while encouraging viewers to vote. Link

  • Stillfront acquires Everguild and enters the CCG genre. Link

  • League fo Legends: Wild Rift is entering open beta. Link

  • EVOS Esports raised a $12 million Series B. Link

  • Frost Giant Studios raised $4.7 million to make its first real-time strategy game. Link

  • Genshin Impact has now amassed $245 million in sales. Link

🖥 Content Worth Consuming

Jason Citron — Building the Third Place. “‘My guest today is Jason Citron, founder and CEO of Discord. Discord is one of the largest and fastest growing social networks in the world. It started as a place for gamers to congregate online, but thanks to how easy it makes it to create a community of any type and its offering of text, audio, and video as means of communication, it has expanded far beyond gaming. It has the potential to become the default digital “third place” that we go to find belonging in a variety of online communities. With over 100 million users, it’s also one of the most interesting communications service businesses since the original social networks rose to power. Our conversation focuses on his background prior to Discord, Discord’s founding and growth, its business model and how it has evolved over the past 8 years, and what the future holds for Discord. As we talked, I had this sense that I’d be willing to go work for Jason, and I think you’ll see why. I hope you enjoy our wide ranging conversation.” Link

Todd Howard: "The next generation is about access.” “Bethesda Game Studios' director discusses the Microsoft acquisition, cloud gaming, and how Game Pass could boost IP that struggles at retail” Link

The Building Blocks of Tech — Roblox, Airtable, and the Rise of Low Code / No Code. “Two of my favorite topics are how tech is changing entertainment and how tech is changing work. This week’s piece is especially interesting to me because it cuts across both. It’s about how everyday people can now use technology to create in new ways.” Link

Thanks for reading. See you next week! As always, if you have feedback let us know here.

Don’t miss our next issue!

Sign up to receive the #1 games industry newsletter, straight in your inbox.