Hi everyone. Quick follow-up on the blockchain games research service we launched last week: we’re cutting prices!

That’s right: We’re cutting the base price from $2,000 per month (or $20,000 per year) to $1,000 per month (or $10,000 per year). Our goal is to serve all kinds of companies, and we learned through feedback that our pricing was too ambitious for many teams who would benefit from it the most.

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Naavik Exclusive: Metacast Roundtable #24

In this Metacast episode, Yonatan Raz-Fridman and Chong Ahn are joined by your host Nicolas Vereecke to discuss:

  • Forte & the rise of Blockchain Gaming Infrastructure Companie

  • Riot Forge’s announcement/drop of four games

  • Roblox’s earnings report

As always, you can find us on Spotify, Apple Podcasts, Google Podcasts, our website, or anywhere else you listen to podcasts. Also, remember to shoot us any questions here.

#1: Earnings Report Round Up

earnings games

Today’s newsletter is focused on earnings season. We cover 8 companies that reported earnings over the past 2-3 weeks. We can’t get to everything, but hopefully, this provides a taste of what many of the major industry players are up to. Previously, we covered Sony and Microsoft here, as well as Ubisoft here.


The Numbers: Despite tough COVID comps and kids going back to school, Roblox's engagement data remained strong. DAUs hit 47.3 million (+31% year-over-year), and hours engaged were 11.2 billion (+28%). Roblox generated $637.8M in bookings (+28%) and free cash flow of $170.6 million (a 26.7% margin). Average bookings per daily active user (ABPDAU) was $13.49, which was essentially flat (apparently due to growth in emerging markets). The developer community continues to strengthen (and is increasingly VC-backed), and developers earned $130M in Developer Exchange Fees (+52%).

Key Takeaways: There's a lot happening on Roblox — brand partnerships, new platform improvements, etc. — and the two-side network effect between users and developers is certainly clicking. As it rightly should, the "aging up" question is getting a lot of attention; this quarter, 50.4% of users were over 13 years old, and 28% of the top 1,000 experiences qualified as "aged up." There's still a lot of work to do to level this up further, but the medium-term progress is quite good. We also suggest perusing Roblox’s recent Investor Day presentation if you want to dig into more detail.

What's Next: Roblox is working hard to improve its platform among multiple dimensions: developer tools, social tools, safety tools, monetization tools, tuck-in acquisitions, and much more. Roblox won't be without competition, but it feels like every quarter that goes by Roblox deepens its competitive advantages and the gap between potential contenders widens. And as the company improves its platform, it should succeed in attracting many more developers and users. The key things to continue watching aren't new: overall user engagement, an ability to "age up", to expand in new geographies, to better reward developers for their work, to ship core platform improvements at rapid speeds. If all of this happens, Roblox will likely become a defining consumer company of the next decade.

Activision Blizzard

The Numbers: On the surface, the financials came in OK. Revenue and earnings per share mildly beat management's outlook and mildly grew over the past year. Call of Duty Mobile saw decent growth, Blizzard's revenue grew 20% year-over-year thanks to the launch of Diablo II: Resurrected, and King's revenue grew 22% due to strength in Candy Crush (and the rise of ad revenue).

Key Takeaways: This is a situation where the backwards looking numbers miss the forest for the trees. Cultural issues continue to be front-and-center; despite slides and prepared remarks that show the company's dedication to improvement, problems persist. Jen Oneal, now ex-co-lead of Blizzard, swiftly left after feeling that her concerns weren't being listened to; further, Diablo IV and Overwatch 2 were delayed (unsurprising since both leads recently departed and the culture is in disarray), and now many employees and investors are calling for CEO Bobby Kotick to step down. Plus, World of Warcraft has lost some market share, and Call of Duty Vanguard appears to be lagging last year's launch sales. It's a difficult time at Activision Blizzard and an obvious reminder that culture has a real business impact.

What's Next: The story is still playing out. Work to continue improving the culture persists (despite the PR stench), and the #1 question is whether Bobby Kotick will remain CEO of the business. Despite calls for his removal, it seems like a few board members still support him. We suspect that it's a matter of time before he steps down, but it's going to take a while for management (whoever that becomes) to find its footing and fully reset the tone of the business. At minimum, winning great new talent has been made more difficult, but the threat of unionization is still a possibility if management continues to drop the ball. Activision Blizzard still has opportunities to grow — namely building ecosystems around its most valuable IP (following the "Call of Duty model") — but the momentum behind those opportunities will remain stunted until the culture returns to "business as usual" (ideally in a more healthy environment). Plus, even though many future games are likely to be huge hits, others (like Overwatch 2) may not live up the hype and others may lag (like Call of Duty this year).


The Numbers: EA is one of the standout stories of this earnings season, reporting $1.85B in bookings (which beat expectations) at 103% YoY growth.

Key Takeaways: EA’s impressive results are attributed back to FIFA and Apex Legends. Growth in their live services division was mainly driven by FIFA Ultimate Team and Apex Legends and delivered ~62.5% of total bookings. Based on the first three weeks of sales, FIFA 22 has already outsold FIFA 21 by 14%, but notably, EA is also at risk of losing this key franchise partnership. Further, the newest addition to the Battlefield franchise seems to be outperforming with 7.7M+ beta users.

What’s Next: EA’s bread and butter has always been partnerships and driving more players across core IP (currently 500M unique active accounts). The next quarters will be about maintaining or building against key partnerships like FIFA. Existentially, upstarts like Sorare and Dapper Labs are building very legitimate businesses that could compete with their sports IP (EA is cognizant of this, mentioning NFTs and collectibles multiple times during the earnings call). Yet, EA has done a good job diversifying: key M&A (e.g Playdemic) in the casual / lifestyle / racing genres has expanded their offering, and their migration into mobile and partnerships with services like Xbox Game Pass has diversified revenue streams. Importantly, their live services division is firing on all fronts.  One key example is Apex Legends which saw more players playing Season 9 and 10 than they had in Seasons 1. This was mainly driven by a renewed interest by streamers and EA’s localization efforts in countries like Japan. Apex has $1B in net annual bookings alone (which grew 150% YoY). It bodes well that they’re releasing mobile options for this game and Battlefield.


The Numbers: Nintendo didn’t meet expectations, generating $2.6B in quarterly revenue. This quarter comes in direct contrast to last year at the height of the pandemic: Switch sell-through was ~3.8M units compared to ~6.9M and net sales fell -18.9% over the same time period this year. Management says this was mainly drive by high Animal Crossing: New Horizons sales last year. They reduced their forecast by 1.5M units to 24M units.

Key Takeaways: The semiconductor shortage plagues Nintendo’s top-line. Nintendo has no shortage of games lined up for the rest of the year and beyond: Kirby, Splatoon, Pokemon, Bayonetta, and Zelda are all slated for release. Indeed, this is reflective of their current player base, where 79M Switch users (out of 90M total units sold) play their device at least once per year. With the OLED model, Nintendo is hoping to shift attention toward this new unit in the Switch family’s sixth year and reach 100M total units sold. Interestingly, software sales for the Switch are shifting toward publishers, balancing out the Nintendo 1st party ecosystem with a diverse title slate. There are now over 6700 titles available for purchase from the Nintendo eShop.

What’s Next: Aside from its hardware business, Nintendo’s main competitive advantage is its IP. Over the next quarters and years, Nintendo will continue its focus on expanding its IP to new areas. We’re already seeing this strategy playing out: merchandise, mobile (e.g their partnership with Niantic for Pikmin Bloom), theme parks (Super Nintendo World), and visual content (the upcoming Mario movie). To accomplish this, they’ll leverage the 250M Nintendo accounts and 32M Nintendo online members to build loyalty (e.g rewards) and to deliver superior customer experiences through the integrated hardware-software entertainment approach. Nintendo reports that 2/3 of their cash will be leveraged for these efforts, while the remaining 1/3 will be used for software assets like games and visual content.


The Numbers: Q3 revenue increased 43% year-over-year to $286M. Create Solutions rose 34% (to $83.7M) and Operate Solutions rose 54% (to $185M). Unity's dollar-based net retention rate clocked in at 142%, and the company now has 973 customers who spend $100k+ each year (up 32% year-over-year). The company continues to remain unprofitable but actually generated $34.2M in free cash flow in the quarter (a number that will continue to fluctuate). Additionally, Unity announced the $1.625B acquisition of Weta Digital, the award winning VFX company behind movies like Lord of the Rings.

Key Takeaways: Let's start with the obvious. Unity's land and expand model continues to excel, and the business's Operate Segment has stayed mostly unaffected by Apple's IDFA deprecation. The business remains highly games-centric, but the mission was always to serve creators more broadly. The acquisition of Weta Digital is just one additional example. As for the acquisition itself, it makes a lot of sense: Weta has incredible technology that plugged into Unity's massive network will be able to unlock tremendous value for clients and Unity itself. Of course, Unity continues to invest heavily in R&D and pursue other acquisitions in order to build a more complete ecosystem of tools, as well as onboard even more customers it can sell more to over time.

What's Next: Despite only producing ~$1B in sales over the past year, Unity is undeniably one of the most important, emerging tech companies in the world. It's building a comprehensive platform that enables creators all over the world to better build and serve their audiences in increasingly digital worlds. Unity will continue to add new customers, services, companies, and talent to its arsenal... and it'll continue upselling existing customers quite well. The real questions are 1) can the swift pace maintain for many years (expectations are high), and 2) how will all of Unity's efforts ultimately come together? What interface and business model will at some point bring order and simplicity to Unity's increasingly diverse and chaotic suite of offerings? It'll take years to play out, but Unity has a huge long-term opportunity.


The Numbers: Tencent is a behemoth of a business spanning social, fintech, commerce, and gaming. While they managed to beat analyst expectations, this was actually Tencent’s slowest growth quarter since IPO, growing 13% YoY. Domestic games revenues grew by 5% YoY to $5.2B, driven by games including Honor of Kings, Call of Duty Mobile, and Moonlight Blade Mobile. International Games revenues grew by 20% year-on-year to $1.77B, due to the robust performance of games like Valorant and Clash of Clans.

Key Takeaways: It’s no secret that Chinese games companies are facing major regulatory headwinds that have impacted short-term financials. Not to mention that COVID tailwinds are slowly giving way to reality. Tencent’s stock price is reflective of this, decreasing 25% these past six months. That being said, Tencent is still firing on all fronts: 1) key acquisitions and partnerships are outperforming domestically, 2) a renewed focus on international customer acquisitions is yielding positive results, and 3) continued focus on distribution and tech (e.g advertising networks) is giving them a massive competitive moat.

What’s Next: Importantly, Tencent continues to reinvest back into its ecosystem and top games / studios. To name a few examples: Honor of Kings recently announced an open-world game, they have the capabilities to build the “hyperverse”, and they launched a TFT spinoff called Fight of the Golden Spatula, which year-to-date is second in DAUs falling short of Wild Rift (Tencent-owned). While there are no existential issues and generally robust growth, Tencent must tread carefully on the regulatory horizon, continue to invest heavily on specialist international companies like Digital Extremes and Grinding Gear Games, hire more talent to their top studios like Riot, Supercell and TME, and fend off upstarts that threaten mindshare. Their metaverse ambitions? “For example, we have a lot of gaming experiences. We also have very strong social networking experience. In addition to that, in terms of technology building blocks, we have engine capability. We have AI capability. We have the capability to build a large server architecture that can serve a huge number of concurrent users. We are very experienced in managing digital content economies as well as real-life digital assets”


The Numbers: Krafton delivered ~$440M in revenue (+42.3% YoY, +13.6% QoQ ), having solid growth across all segments. Most impressive is their growth on PC, which saw 112% YoY increase to $109M in quarterly revenue. Mobile grew 31%, which was mainly driven by PUBG Mobile and PUBG India (42M DAU).

 Key Takeaways: Krafton is riding the PUBG wave. One of the most exciting developments of Krafton’s involvement in PUBG is their concerted effort to expand the IP beyond game narratives: new games like New State, videos and lore, comics in partnership with WebToons. Importantly, this is content created to nurture more affinity in existing player bases. And if PUBG India’s 50M registered users in 44 days is any indication, this is a player base that is ravenous for this type of content.

What’s Next: Beyond PUBG’s transmedia push, their recent IPO and cornerstone title success gives them the ability to reinvest in areas beyond core IP a la Free Fire and Sea Limited. For example, they announced earlier this year that they would acquire makers of Subnautica Unknown Worlds Entertainment for $500M (with $250M in earn-out potential). It wouldn’t be surprising if they continue a push for new IP and talent through M&A, specifically through acquisitions that could give them new exposure to specialty development across platforms and that they could merge their F2P expertise with. Lastly, we should expect continued interest and investment into the India market: a $100M developer fund for ecosystem building in a budding mobile market and a whole new India spinoff for India to comply with India regulations are indicative of this interest.


The Numbers: For those paying close attention, Zynga's stock price is trading at pre-pandemic levels and near 52-week lows. Much of the decline happened around last quarter when it became clearer that Apple's IDFA deprecation would impact Zynga's growth trajectory, and that has carried forward to today. Even though it was technically a record Q3, bookings only rose 6%, operating cash flows mildly decreased, and guidance isn't all that exciting. Of course, management expects continued growth and rising margins over time.

Key Takeaways: It's true that Zynga's near-term growth has been impacted; Zynga is making lower customer acquisition investments and some games (like Merge Dragons and Merge Magic, among older mobile/web titles) are experiencing declines. However, it's not as if Zynga is in poor condition. The core portfolio still consists of strong games with ongoing bold beats. The pipeline of new games continues to progress (they launched Farmville 3 with more games from studios like Peak and Gram Games in soft launch). Zynga continues to lean into hypercasual and ads with Rollic and Chartboost. It’s only beginning to nudge into cross-platform games. And Zynga is surely looking at more M&A options (like Golf Rival, the most recent example). The growth efforts won't all thrive, but they do add up. Zynga has more resources at its disposal to improve its customer acquisition strategy than nearly all other mobile games companies.

What's Next: Much has been said about "content fortresses," which in this case is the combination of great games and high quality adtech capabilities under the same corporate roof. It can provide unique customer acquisition advantages, and it's likely Zynga needs to lean further in this direction. Chartboost is a start but there’s more to build and integrate. Management isn't wrong when saying there are several growth catalysts, but Zynga needs additional standout successes that management feels comfortable investing more heavily in for user acquisition. It may take time to work out of this rut, but it's likely that today's low expectations won't be permanent. Notably, the company also announced a VP of Blockchain Gaming (Matt Wolf), but no one really knows what to make of Zynga's thoughts and ambitions here yet. (Written by Aaron Bush & Fawzi Itani)

🎮 In Other News…

💸 Funding & Acquisitions:

  • Modding platform Overwolf raised a $75M round (we previously chatted with CEO Uri about modding here). Link

  • Dubit announced an $8M round to build out esports in the metaverse. Link

  • Irreverant Labs raised a $5M seed for AI characters (we took a look at AI-driven NFT gaming here). Link

  • IndieBL raised $3M for its games analytics software. Link

  • Leaf Mobile will join the London Stock Exchange. Link

📊 Business:

  • A variety of large gaming companies are reevaluating their relationship with Activision following the allegations against CEO Bobby Kotick. Link

  • Embracer Group expects 37 acquisitions over the next 12 months. Link

  • Riot Games and Wizard of The Coast partnered on an Arcane card drop. Link

  • Amazon is publishing MMO Lost Ark, to great initial fanfare and success. Link

🕹️ Culture & Games:

  • Riot Games released two new games and announced two more upcoming next year . Link

  • Nike created their own Roblox world. Link

  • Halo Infinite, which had a surprise multiplayer beta release, has already released details about its esports ambitions. Link

👾 Miscellaneous Musings:

  • Designing premium pass systems in games. Link

  • A market map of games on Solana. Link

  • Facebook is quietly buying up the metaverse. Link

  • Intimacy from the inanimate in house-moving puzzler Unpacked. Link

  • Hideo Kojima: the making of a video game auteur. Link

🔥 Featured Jobs

You can view our entire job board — all of the open roles, as well as the ability to post new roles — below.

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

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