In this week's Roundtable, the squad takes a deep dive into the unique atmosphere of this year's Game Developers Conference (GDC), marked by a spirit of camaraderie and innovation amidst widespread industry layoffs. We then pivot to discuss the monumental acquisition of data.ai by Sensor Tower, setting the stage for what could become the definitive source of mobile app data. The conversation heats up as we explore Epic Games' showcase of Unreal Engine, UEFN, and the bombshell announcement of a mobile Epic Store set to launch by year's end. We shift gears to dissect the U.S. Department of Justice's sweeping lawsuit against Apple, examining the broader implications of the case beyond the specific policies contested by Epic, and reflecting on the growing global backlash against Apple's business practices. Lastly, we delve into a revealing survey from Mistplay, which predicts a downturn in mobile spending by high-value users. Join us for all the latest games business news with Aaron Bush, Dave Elton, and host Devin Becker.

We’d like to thank RallyHere for making this episode possible. RallyHere is a proven gaming backend platform and service made specifically for cross-platform live-service games. RallyHere is your one-stop-shop to streamline your development processes, increase speed to market, and optimize your post-launch live services. To learn more or schedule a demo, visit rallyhere.gg  

This transcript is machine-generated, and we apologize for any errors.

Devin: Hello everyone. Welcome to another Naavik round table. I'm your host, Devin Becker. And of course, two wonderful guests who you've seen a lot on this podcast. Aaron and Dave we have a little bit of an announcement here from Aaron

Aaron: Yeah jumping right into it.

This is the final round table episode of the Naavik gaming podcast, at least for now it's bittersweet to, to share in part because this segment is what started it all, right? This today is our 138th round table episode, I believe. Then the first one we published, which was our. First episode ever was on May 21st, 2021.

So we've been going strong with these roundtables for nearly three years now. And by the way, guys quick trivia. Do you remember what the first roundtable episode was about? I don't even or if you weren't even paying attention to that, and I'm just curious, like, when did you start paying attention?

It's interesting.

Dave: I probably started listening. Oh, wow. Year and a half or two years ago. So it wasn't right from the very beginning. I caught on later on.

Aaron: Still an OG.

Dave: Yeah. Yeah. So early days yeah, I know I was a big fan, which is what pushed me to reach out to see if I could hop on.

And for me, this is actually one year. As of as of this month. So it's been a lot of fun.

Aaron: Congrats. And I'm sorry at the same time, but it's been a great year with you, Dave. Anyways, Devin, do you remember?

Devin: I, I don't remember what the topics were. There was a lot of just I think general news stuff at the time.

I, I actually, my involvement throughout all the Naavik stuff I've been doing since 2021 was from actually the crypto corner, but it's still like the podcast and stuff in general, got me to reach out to you guys, which is why I always encourage everyone to reach out. If there's anything you to contact Naavik about because like it started a lot of us, a lot of collaborations we've had together since and I think having an outreach like this is fantastic and I'm glad there's a lot of other ones still going on, part of which I'll still be involved with so I think plenty to go, but I, you know, 138 episodes and a good long time.

I think yeah, I think people got their money's worth on this one. I hope.

Aaron: I hope so. But anyways, that first episode, it was about Applovin's IPO and spending a lot of time digging into the Apple versus Epic case where they like unveiled a bunch of information. Yeah. It's the topic that it's still giving even today, these topics are coming full circle, still circle

Devin: At least the Microsoft acquisition finally finished.

That was the one, I wasn't sure if we were going to make it to the end of the roundtable for that one.

Aaron: Yeah, we got that one under our belt. But anyways, we've had a great run, and really I just have so many people to thank for it. First of all, Niko, who's now at BitCraft, he helped kickstart the whole podcast.

He did the initial planning, the hosting, the editing, the thumbnailing, pretty much everything. On day one, which was incredible. And we have a team for all of those parts now, but major props to Nico for being a great bootstrapping partner three years ago. And then plus of course, Maria and now Devin as hosts these past couple of years they've been amazing to work with too, and obviously we have.

So many amazing panelists from over the past three years more than I could name right now, but. Sincerely to all of you who are tuning in, thank you to all of you for making this segment possible over the years you taught me a lot. And I know you taught thousands of other people a tremendous amount about our ever evolving industry tale.

So why are we making this change? In short, our interviews generally perform better and managing a big crew of rotating panelists has more logistical challenges than it may seem. We're really just going to refocus and double down. on what our listeners are engaging in the most right now. But that said, we're still going to experiment with new segments.

I'm still going to bring a bunch of these panelists back at times, and you'll probably see several emerge elsewhere in Naavik's ecosystem, like as writers for Naavik Digest, maybe even consultants with us. Even Devin here. Today, he just published his first interview with us a couple of weeks ago.

So make sure to check that out if you haven't already. That was a great conversation. But anyway, we'll continue to learn and adapt and we'd love your feedback. So really my one request From the grand finale of these roundtables is just for your feedback. If you have suggestions or ideas for new segments that you'd like to see us try on the podcast, let us know send us a note to podcast@ naavik.co.

co or you can just send me a message on LinkedIn or whatever is easier. Or hey, even if you just want to shoot a note of appreciation that I can pass along to the team that'd be cool too. So it would just be great to, to hear your thoughts. But all that said, we're still going strong, still thinking big.

Can't wait to serve you for many years to come in whatever forms that, that may take. And thanks as always for tuning in. But with that, I'll hand it back over to Devin to kickstart the actual conversation and discussion for today.

Devin: I say, like I said, as a foot to use, the conversation continues in the digest and the other interviews and who knows what else in the future, because we had no idea.

Certainly this would be 138 episodes of this idea, when it started back in 2021. So that being said, though, the other elephant in the room that I think we're all Still recovering from at this point, GDC. Both of you were there. I was there as well. Who was just share their initial thoughts first, Dave, I think you're ready to go with some exciting anecdotes,

Dave: hopefully they're exciting.

We'll see. Yeah, no, I very much enjoyed the show. I was there Wednesday through Friday. So the main portion, I wasn't there for any of the the earlier portion. I spent my time certainly walking a lot. I think my record was over 17, 000 steps. That was Thursday. So a lot of visiting of the various halls and all the hotels around, because it seemed even if you have a GDC pass, you're going to be spending a lot of time in the hotels rather than inside the halls themselves One of the things that was really interesting for me is that the large number of brand new game companies that were there promoting themselves and looking for no funding, if they can helping get the word out about who they are or what types of games are doing.

I think, the last time I saw this number of new companies coming out and really pushing themselves was probably back when crypto gaming really started to kick off. But I do want to point out that I think my own opinion these are actually companies this time around are filled with people that have made games before they know how to make games.

And and that's their primary focus is just trying to create. Fantastic games rather than potentially taking advantage of a trend at a particular time. I saw some really fantastic stuff stuff from, people that are fairly new to the industry through to people that have been in the industry for decades.

I had an opportunity, for example, see Bill Roper's new game from Legacy. So Bill Roper, of course, being old school Blizzard and as he's done a number of companies since then, but he was out there Showing off his game, just as much as everybody else was looking to see what they what he can do with in terms of funding and getting, excitement built around what he's trying to do in his company.

There was certainly a large number of job seekers there. The recruiters were certainly busy. And yeah, to be expected, but the amount of layoffs that have happened in the last little while. But one of the things I found really good about being at GDC, it was a very supportive atmosphere.

People that had jobs were taking people that were looking for jobs out for lunch. There was a lot of introductions happening of, Hey, you should talk to this person because I think they're looking for something, or they're looking for people to help support their game. And I would say it certainly had a high hug factor.

There was a lot of really good supporting feelings around the show. And I think that really does say something for our industry where there certainly are some challenges inside of our industry, but there are also some really good people inside looking to help us out. I didn't find one really big theme for the show.

AI was certainly there. There were a number of companies that were showing off, tools to try and help production development faster. There's been a, a bit of a pickup on the web three side of things because bit, Bitcoin valuations going up I didn't find But there wasn't one overarching, dominant theme I found throughout the show except for maybe one thing, and that was austerity.

There was only one booth that I would say that was there of that E3 level of booth where it's, Big booze, obviously a big spend. And that was epic and considering epic makes epic money these days. I'm sure they can afford to put that booth in there without much of a problem.

10 cent was close. They spent certainly some on their booze, but on the most part, it was they were definitely doing it right. It definitely showed that companies were looking to keep their costs down. That ease, for example I don't think they have much in the way of games to show right now, but they just had a small booth and their focus was entirely on recruiting, but again, how they can build up their staff.

I was interesting. You three, it's our GDC wasn't as populated. It has been in the past, but I think there certainly was a little bit of uptick in some ways. But yeah, a lot of walking, a lot of walking, how about you guys? What'd you guys see?

Aaron: A lot of walking, a lot of overcrowded hotel lobbies.

It was my first GDC and so I was just. Figuring out how the game is played. And I realized the game is basically just played in hotel lobbies, which, cool. Very overpacked hotel lobbies. And then you gotta walk elsewhere anyways, have walking meetings or whatever, which, it's fine.

But. But really, I mean, beyond that, it was just great to, to see people. Saw probably a dozen or so Naavik people who, are, podcast friends are writing friends, consulting friends. And was great to, to see them around the event to bring them. Together for a lunch that we had, which was nice to meet so many people in person for the first time.

But even beyond that, just amazing to meet so many. people in person for the first time in many cases that, we've been interfacing with for quite a while now. And then of course, meeting new people as well. So yeah, at least for me, it was pretty productive but tiring, what I've noticed and there's no shortage of these LinkedIn posts of like, here's what I noticed at GDC and I'm just like, Ugh, at this point please stop writing this, I'm so tired of them.

But what I've noticed is just that everyone's perception is different because of, the different bubbles or the different areas that people are focused on. And so I think it really, there is a lot going on that feels different depending on, on, on where you are. But from my point of view I definitely did sense a tension.

Where like on one side, like it's just the fallout from this age of efficiency that we're in where obviously the past couple of years have been difficult for layoffs. Dave talked about that well. And you could definitely feel that around the event where people are trying to figure out what's next.

And then on the other side, compared to events a year ago, even a year ago there, it was a lot of that. Like, Oh, We're in a recession, prepare for a recession, like everything is going down. And today, there still is some of that hardship. But there are like more zones of optimism.

And there isn't necessarily like a new blue ocean, right? That stacks on top of the industry to expand the industry in a big way. But there are like these areas of innovation. And AI is, the big one. UGC is the other big buzzword. Really those two areas I've noticed are like the biggest convergence trends that people are excited about.

Web3 is, would be like the third one. And, in those zones, people are excited, they're building cool new things but there still is that tension there of these technologies make the industry more efficient, they democratize game development it's cool, but it doesn't necessarily solve the, some of the other issues that other people have been so anyways, I come out of it feeling excited in some ways, but also feeling a bit stressed or bad for a bunch of other people as well.

And it'll be interesting to see over the next year or two, how the tone shifts at these events. And. What are the things people are excited about or whether this overhang that we feel whether that's going to continue to linger for longer than we would hope and expect.

Devin: I think on the plus side is we're looking at all these people, currently out of work or trying to start new studios or things like that. But this is an industry that does, I think, value experience. We always talk about formally from this company and formally from that company.

It like matters, right? It's an industry where it's hard to start without like actually getting a bunch of experience. The classic like starting out as a QA tester and working your way up, things like that. Like experience, especially as like an old school game developer in this industry, I think.

is valuable to like a lot of people that, that value that. And so I think a lot of these people that, that have that, that maybe had been in it for a while and then are now essentially getting a little bit of a break. Maybe just to recollect, rethink things. But I don't doubt that if they want to, they will land on their feet.

Because that experience is valuable. Because if you're going to be hiring again, and you're trying to, trying to build up a team, who are you going to look to pick up? All these people that you know do good work. I remember like throughout the whole Web3 thing, like how often it was like, people with actual game development experience, was like the most exciting thing ever.

It's like, hey, if Web3 comes back, then guess who, who needs jobs? So it seems one of these things where I obviously am not in the position, so it's a little bit different for me, but I do see that there's This is an issue where there could be potentially silver linings as long as we don't have our Atari moment like this is still something that will turn around and it may just mean things are shifted around but This is not the first time in the game industry that like we've had to go through these ups and downs and I think it's great to that GDC is like that, these people, a lot of these people have been going for a long time.

I talked to someone who'd been to like, it was like somewhere close to 20 of them that he'd been to and it's just, there's a lot of old school people and there's a lot of, postmortems and looking backwards and looking forwards and I think that's why it's such a cool event for that sort of thing, even if it's a little bit of a job fair at times as we joke being the, the floor, but that's actually great because a lot of these people know each other.

It is an industry where a lot of people know each other. And I think that taking each other out to lunch and all that, that's great to hear that's something that sort of thing still happens. I was personally a bit more of the web three circle. So I was maybe a little insulated from that some experience.

To some extent, but the funny thing is, I, we see those ups and downs like, every six months in Web 3, where the sky is falling, and then everything's gonna be great, and then the sky is falling again I feel like I see that just constantly. But the funny thing is, in a similar way, The one thing I noticed is I can count on seeing the same people every year, still excited about it, still building, still doing the cool things, still talking about Oh, have you seen this?

This is going on. I have this cool tech over here. Everyone's still excited about it, even with those ups and downs. And I think that as a microcosm is interesting to see as its own like mini game industry. And I find like the, the, the hotel lobby thing you put in, I found kind of funny because in between meetings, I was like, why go do whatever?

I just will go to the hotel lobby and sit there and I will run into five people between like in a half an hour between a meeting that I know or want to know, like it's, and you don't have to go do anything. You just sit in the lobby and I think that's a really cool part about GDC is that the event's cool and everything, but like the stuff going on around it, Because everyone's doing stuff, having events, parties, get togethers, lunches, brunches, breakfasts.

It's a really lively event in that sense and I think it's really cool. I've gone the last few years, especially around the Web3, and that scene just never seems to die out, despite everyone saying, oh, it's gonna be dead this year. And it's it's never dead. It seems even if it's just in hotel lobbies, it never seems to go away.

And I think that as a theme takeaway for me, for GDC, regardless of what seems to be going on in the macro, I think is, uh, it's heartening. I think it's great. Like, uh, Dave said the big hug factor. So I think I'm looking forward to when we're like, I remember that when there was like all those things going on and now everyone's got too many jobs going here, and hopefully a year or less.

But I do think it was interesting to see Web3, like on a, Hey, there's money to be made again, comeback, which is kinda the western style of things. It doesn't surprise me. But it does seem obviously it's scaled down to a smaller set of participants. That are like, hey, we're the ones who are kind of survivors from the first waves and we know, maybe we know what we're doing now.

I'm looking forward to that, like a lot of that stuff along with the new studios you mentioned. Like down the road gelling into something that maybe it's not like we get an immediate, thing going on. But, that being said, there still was a ton of announcements at GDC. You can't go to GDC without tons of things happening.

And there was a couple standout ones, if you guys want to cover those.

Aaron: Yeah so a bunch happened. We don't have to talk about these a ton, but for one, probably like the big deal that broke was SensorTower acquiring Datadot AI, which surprises a lot of people because Datadot AI is the business that had raised much more money and presumably was the larger business.

And I'm not going to speculate on what exactly happened, within data dot AI and sensor tower to, to make this deal. happen. And of course, data. ai has been our data partner for quite a while now. They've been great to work with, but but yeah, this is going to have some ripple effects across the industry.

When two leading platform companies combine and on, in one sense, it potentially brings the best of two worlds together into more robust feature sets, bringing great talent together et cetera. And I imagine that in some sense, this combined entity will create features that serve the games industry better over time.

But on the other hand, it's just tough when things like this happen. I think it was reported and I don't know how, how true this is, but that, already with data. ai, we've seen about half of the company. be laid off, which is extremely difficult to go through. And so I, I hope everyone on that team is able to Find their footing.

And we'll of course, learn more about where this is all going to go over, over time. So we'll probably, we might talk about it later, do some interview and about this deal at some point in the future, but that was really the big news to break. And beyond that, just to, to list off a few more of these items that happened, and then we can take this and whatever, Order, but another lawsuit against Apple dropped this time from the U S government the DOJ about some of their practices.

The Epic game store announced that it'll be, officially launching on mobile by the end of this year, we got some unreal engine updates from Epic too. So Epic was busy with the announcements. There's probably more we could talk about too, but I'll just pause there. Is there any direction you guys want to.

Take with any of this.

Dave: I think one thing actually I didn't mention around GDC that should have, that's related to the Unreal Engine side of things is Godot had a nice size platform or a nice size booth at the show. So I think with Unity's recent missteps in terms of their pricing and so forth the other engines have tried to step up to see what they can do to take some of that Unreal, I think really does.

Really does really push the high end. And I have seen a number of demos where people are using the latest and greatest and they just look good, right out of the box without a lot of effort. And Godot on the other side was then, working as best as they could to take, maybe some of those the games that needed, something a little less powerful than the Unreal Engine.

And this certainly was the show for them because it was probably that perfect moment for them where Unity was in not the good graces of developers eyes number one, number two, there's a whole bunch of new companies started up. So they didn't have a legacy issues in terms of what engines to support.

And yeah, there's a lot of different types of games being experimented with now on the indie side, but now that's a little tangent, actually,

Devin: I'm thinking is hanging out over, over Godot's booth is the hell diver to the developers arrowhead, because they just finished that game on a totally discontinued engine.

I got to imagine their shot card a little bit maybe over an Epic's booth too, but I just think it's funny timing to them.

Aaron: Yeah. For me with the Epic. Stuff one with the unreal related announcements unreal is always steadily improving and you know working to keep its state of the art tier in the industry But the stuff that was more interesting to me, honestly was more around the UEFN.

So for example like we saw A few months ago, how they created Lego Fortnite, how they had their racing game, and now basically they're opening up UGC functionalities around those types of those games and then the tooling around them, which is exciting. It just we continue to see like the broadening of the creative surface area that's possible and the types of games that are possible to build on UEFN.

And that's a big deal, but but yeah, even beyond that, what's next for UEFN and, and some of what they announced, like more camera and control systems so that you can, have different vantage points of looking at, a map. That unlocks the Creative Surface area quite a bit.

There's gonna be more they're working to create more personalized rows like, in the Discover tab of UEFN, which is helpful for, games teams making games and helping get discovered and targeted by, the gamers that actually would be more interested in those types of games.

And that makes a big deal. Continuing to improve, the sandbox gameplay. Like in game item building. Just like a bunch of like these little tactical things that like really do add up. And I know recently they've added more like save, Feature so that you can go back and resume sessions and like all of these like add up over time, but it's like it's good to see the pace of improvement and that like this is not going to like within a year be like a switch flipping and suddenly like everything is viable.

At once but it'll be You know, like i've talked about in some episodes like how with roblox It really has just been like a snowball rolling down a mountain in terms of its capability its network just slowly building and compounding steadily over time I think we'll see something pretty similar with uefn and the announcements from this event um Can confirm that and I think that's great and then with the epic game store launching on mobile i'm glad that epic has this developer friendly ethos and that they're willing to you know Push for more competition even at the expense of their own business And in a lot of ways it's been helpful for the industry and I think will continue to be with this launch.

I don't know how successful like a third like a new app store will be for third party game publishers like just breaking the network effects and convincing users to use. alternative app stores for games that could get easily that's going to be really hard, potentially too hard and not really be worth it unless you have another reason to be there.

 And Epic's case, there is another reason to be there, which is Fortnite and increasingly UEFN. And so really I view the Epic game store more as a Trojan horse for bringing Fortnite back and UEFN to mobile for the first time. Which is really exciting and seeing and how, just seeing how UEFN we'll work on mobile and what kinds of experiences people will build more for mobile audiences or just cross platform audiences.

 So yeah we'll see what that turns into. But. They're going to be launching by the end of the year, and so we should hopefully learn much more in the next few months of what that will look like.

Devin: It definitely seems a little risky trying to put that much effort into a store that might not be the best fit.

I'm really curious how that'll go, because like, same thing if you imagined Steam just coming to mobile. It, I mean it works on Steam Deck because that's a little PC. Your hand and it's like it's just an extension essentially of your computer and your account. It is going to be a little strange in that I don't think there's like a lot of mobile games.

On epic store mobile like style games and you see the sort of fight I think on steam over free to play and mobile style games when they get boarded and that's like backlash, whereas maybe epic has a little bit more of a clean slate there because they don't have that, that legacy of gamers that Steam does.

And they also have that like big Fortnite crowd. There's maybe a younger audience. It's not as entrenched in that battle and maybe a lot happier. Fortnite is a free to play game, so it'll be interesting to see if that, that audience shakes out, right? Because that's a hard thing to, I think, to do, not just on top of watching a new store, but also one that isn't technically a mobile first store.

But it will be really interesting. Especially, I guess for web three, that could be a big deal too, because Them being a web three friendly store on the PC. I'm willing to even adjust policies to help keep like things, working well for them. That could be a pretty interesting bridge over to mobile.

Now, whether it actually lands with Apple's policies, everything else, we'll see how all that shakes out, but it is very interesting. And I do wonder, In terms of big demographic and like for ratings on games and things like that, that they have to deal with are different, right?

Different mentality, where it's like Epic's a bit more like Google Play and Apple is a bit closer to Nintendo. So that'll be a really interesting fit there I can totally see it on Android, but iOS will be very interesting, especially given the sort of constant battling between those two.

But I, like you said, if it's coming by the end of the year, I'm excited for that. UE, UFN still has a kind of a ways to go. Technologically, but it's doing it very quickly compared to Roblox, which took I think at least a decade to really get rolling. I don't think it's gonna take that long for UEFN.

They obviously have the player base the will from all the developers, things like that. So that will be a very easy platform for mobile, but I'm curious how well that it will run from a hardware standpoint as Unreal is not necessarily like the lightest engine to run on mobile. But I do imagine they try and continue to optimize at least Fortnite for it, which is what UEFM is basically using as its platform.

I'm pretty excited for it, honestly is cool as Roblox is from a technology standpoint, I probably won't be playing it anytime soon just because it's not really my scene, as they say so it'd be cool to have a little bit of a better one there, I think.

Dave: And the one thing I'd ask for out of the sensor tower data dot AI merger.

Is if they could somehow figure out how to track ad revenue is the biggest thing missing from the business intelligence side of things from mobile, there's so many games out there that, get 80 percent of their revenue from ads, 20 percent from IAP But there's not a really good understanding of what that looks, cross the cross industry.

Devin: I expect it'll be a more important to, I do expect that ads will creep into more IAP style ones. And you're right. That's like a big need when you're trying to understand like the actual financial revenue system, set up of a company, otherwise just guessing.

Aaron: Yeah and then the last big news item that I mentioned is the new Apple court case this time brought by the U.S. government and it's interesting, it wouldn't be a Naavik Gaming Podcast episode without being able to talk about regulatory issues at Apple, right? Ending on a bang here, but But anyways, what's interesting about this is that it actually has nothing to do with the app store. And most of the grievances in the past have stemmed around people's unhappiness with app store policies, obviously unhappiness around the 30 percent cut.

But then of course, of all of just the rules around what's allowed like what links you're allowed to share et cetera. And so what this Case is about is several things, but to summarize it, it's really about how it's going against Apple and how they are limiting the potential for super apps which are, like apps, basically like apps within apps where you can get all sorts of different functionalities.

Cloud streaming gaming apps. Like a Xbox game pass X cloud type of app how like some issues around messaging and this is like ridiculous, but people are upset about the green and blue bubbles and how Apple like prior, makes their own messaging look differently from others.

It's some pieces of this case honestly are ridiculous, but they're throwing a lot out there, maybe to see what will stick. Similarly like interoperability with like smart watches. And so Apple's premise, its entire existence has been about like integration, like vertical integration initially, like software and hardware just on its computers.

And increasingly like that integration across its hardware and how its software And its own hardware is like a competitive advantage. But, people are increasingly saying that as Apple has become larger, it's become more anti competitive for them to just prioritize making things work on their own hardware.

And then, lastly around digital wallets, and I think they're like NFC tech where for like Apple wallet, you can make payments a certain way that doesn't interface well with like other types of phones and the wallets that they have. It's interesting. A lot of this is more about like it's attacking at what has differentiated Apple's business over a long period of time, which is that integration of hardware and software that makes it special.

And what makes like Apple unique compared to these other these other hardware manufacturers and device makers. And I was reading an article and stratechery about this and the author of Ben Thompson, I think he made a an interesting point and just saying that there's so much like angst against Apple right now, and that really again, this has nothing to do with the app store, but their fatal flaw was.

Fighting so hard on policies in the past that they could have just bent the knee a little too and changed and made people happier and then probably the anger would have gone away and they wouldn't be dealing with lawsuits like this today that are just attacking all of the other parts of their business and trying to dismantle what makes Apple unique and special.

And where this goes, first of all, it's going to take years to play out, right? It's going to have to go through court. It'll go through appeals. Then I don't know. I don't know the legal system well enough to know, like how many tiers and steps this will go through, but a lot over many years.

But what I will say is, I do think some of this is a little ridiculous, but some of it, I do think there's a real case, like with gaming cloud gaming apps that can be allowed there's no, there really is no problem in letting xCloud be accessible on iPhones, right? So I think this case will be hit and miss, probably lead to some positive change.

But it'll just take forever to play out and consumer friendly ways. So anyways, that was a lot, but that's my quick take on the latest. And this never ending saga.

Dave: Just out of curiosity, did you see some of the DOJs stuff being brought up in relationship to some of the things that have gone through in Europe?

So Europe has gone through a lot of those things where they're, Europe now allows things for cloud gaming alternative payment plans. A lot of the things I think that are starting to come up through lawsuits more North America versus What has gone on in Europe? Do you see that more of just catching up and trying to make sure it's a level play field across around the world?

Aaron: Maybe to some degree. But I do think some of this is a bit different from that too. But yeah, from like Apple's point of view, when you're getting attacked from different angles for different reasons at some point it probably just makes sense to, Come out with a friendlier attitude towards some of this stuff and not fight tooth and nail about every detail.

And of course we'll fight a lot about much of this, but I, yeah, I do think there is parts to that and not just with the EU, but even in, in Asia, there's been like, I think some of the earliest regulatory actions like against I'm blanking on the term, but allowing links in the app that link outward to websites.

I want to say it was like South Korea. That was the first. The first mover and forcing Apple to change its policies in that country. And then the EU followed that and maybe the US will follow some of that. But yeah, I don't know how much of it is like countries catching up with each other as much as it is just like Apple actually has overreached on some of this and everyone is coming to the same realizations in their own ways over time.

I will say the EU probably goes too far. And some of it, and the EU just has a tendency to fleece U. S. companies with just like backwards looking like policies, like they'll say hey, we just determined this is now a law, but because you've been doing this for the past five years, we're going to fine you however many billions of dollars, and that's ridiculous, like that's absurd, like shame on the EU for doing things like that I do think, some of the Some of the pushing there will be helpful and we'll see ripple effects and other jurisdictions.

Devin: I think the whole thing with the plain catch up thing is interesting in sense of thinking about it the, these other countries proving that it doesn't kill Apple's business to do these things. Even if they're going to very maliciously comply on some of them. That it's not the end of the world and that there can be pushback on Apple to maybe play ball a little bit more as you're saying, Aaron, like maybe they need to not just say no, we don't want to do any of that.

And I think the EU and some of these other territories become like an interesting playing field for that because it's not the home territory. It's an area where they want to do business actively and need to like, be like, okay if we want to do business here, we have to actually maybe comply with some things and not just do whatever we want, because it's not your home turf anymore.

And I think that happens a lot, in these across these different territories where if you want to play ball, you have to like actually think about, okay it's a different ecosystem. I can't just say I'm the dominant thing here. You got to do it like. And I think that's an important lesson for Apple in general, because I wanted to push back a little bit on what you're saying about the ridiculousness, Aaron, and the culture of Apple, because I think a lot of that's actually more recent than you want to think in terms of like a lot of it's more post Steve Jobs.

So if you look back at when Apple was making its comeback into the iPod era and stuff like that, Apple was more than willing to play ball. In a lot of ways to try and get his ground back, meaning like not closing its ecosystem, actually being a lot more open about it. There was iTunes for windows, quick time for windows.

They were willing to accommodate all kinds of people to be like, Hey, we want you to use our product, so we're going to go out of our way to make it so that you can do so because we're not this elitist company. And how the tables have turned once that worked is the opposite of what they used to be.

They're very much that they're an adapter company now is what I like to put it because they're more concerned with making everything their own proprietary standard now. And they used to be the opposite. They used to be very much about supporting standards, pushing this to 40. Remember when Safari was like, Oh, it's cool.

We'll support web kit. We'll contribute back to it. It's good luck using anything but Safari on a lot of their stuff now, like for security reasons, supposedly. And they keep playing that security and privacy card. Yeah. The death to the point where it's obvious that there are situations where it's not true anymore.

So like the example you gave about allowing apps within apps, it's you've already sandboxed apps out from your Apps, meaning like Apple's apps can already do more than the apps in there, which is part of what this suits about. Clearly, you know how to sandbox things and restrict activity.

There's no reason you can't do that for apps within apps. Like they already were like, they were trying to go that direction originally by being like, hey, it's cool. We like support HTML5, like progressive web apps and all this stuff. And then as soon as they felt like, all right, now we can close the door on that.

They tried to, and then it had to backpedal on that in the EU. And I think, I don't think Apple's totally malicious, but I think they're definitely at the point of looking out for their own far more than they are of looking out for meeting customers where they are. And I think, that's where they just need to be checked a little maybe it is a little ridiculous at times, but I, like you mentioned the bubble thing, and I actually, as a beeper user, witnessed a lot of that.

Like back and forth battle over the standards of them of apple maliciously Trying to lock out people from creating interoperability where it's not like hey, we're trying to steal your stuff We're just trying to make you So you're like, your customers can talk to other people without this being a huge hassle and they're actively like practically DDoSing servers and stuff to just shut that down.

So I think there's definitely situations where that sounds ridiculous to look at the details. And then there are situations, yeah, where it's probably a little bit of overreach, maybe a little bit of hyperbole to try and make this a bigger case. But at the same time, like I think this is it's, we need a sort of period similar to what happened with Microsoft where they really got checked hard.

Over Internet Explorer, there's other things in it. I don't think Microsoft's a saint now, but they did scale back a lot of that sort of behavior, and I think they're a much better citizen now, to the point where I'm actually a lot more pro Microsoft than I would have been a decade or two ago for sure.

And they're a lot more about interoperability without being embraced and extend. And I think we just need to go through that same cycle with Apple. You get, You get successful enough, and get a little greedy, get checked a bit, and then have to go, okay let's find a compromise and not a malicious compromise.

But we'll see, like you said, this is going to take forever to shake out. And some of it's trickling back from these other countries. Some of it's just maybe people seeing what they can get away with in court against Apple because it's a big target right now. That tends to happen a lot, as we've seen with the FTC, especially.

In the U S they just, they like to try and pick big they want to play these David versus Goliath kind of battles and try and come out ahead. That hasn't really actually been working great. Maybe this will not even be a big deal for Apple, just a big cost output for them. After the epic battles I think at this point they're lawyers are sitting fat and happy in terms of they're getting their work.

But I, Apple is still, having. Potentially, future money issues with stuff like scaling back, iPhones in China and things like that. It's not in a place where it's just like everything's peachy for them. And I do hope it forces like positive change is all.

Aaron: But uh, you know, .

We'll be fine. And honestly like this topic is so boring At this point like i'm just so tired of talking about regulatory stuff and like all these details are like we'll see But what I do want to like double underline about this again is that this isn't about the app store. This is about like now, like the anger has like toppled over.

And so just like attacking what makes Apple special, which is like it's vertical integration and like all the features and tool sets it has to make its own product better than others on the market. And I do think some of that is fair for them to like, to have if like you're building your own ecosystem, sure.

Make it so that it works best on your own products. So it makes a lot of sense. I don't think that's necessarily bad but yeah we'll see where this all goes, but let's talk about something else, Devin, please.

Devin: Something much more cheery, but on the topic of mobile, which is some interesting information about potential for mobile spending to go down, which I think is to be expected.

Dave: Yeah. Misplay. Which is a loyalty platform inside the mobile space has put together a report and has made it public that 32 percent of mobile consumers plan on spending less than 2024. So it's a report that's available in general. They do have a number of takeaways inside there.

Now I will note that they are a loyalty platform. So there are some takeaways that are a little bit focused or skewed on that side to help push up why people should use misplay. But definitely some interesting things that certainly affect everyone across the mobile ecosystem.

Apparently 40, so in addition to the 32 percent of mobile consumers in general, 41 percent of high value spenders, which MissPlay qualifies as people who spend 100 US per month on games. Plan on decreasing their spend. So 41 percent of high spenders plan on decreasing their spend in 2024 and 23 of those 23 percent of those planning on spending a lot less.

So we're now looking at a situation where, it's not just the people that spend a few dollars per month pulling back in terms of how much they're spending but the individuals that a lot of games depend on. The so called whales, dolphins are the ones that are looking at pulling back their spends.

They do offer some other insights based on this report. 32 percent will spend on a good offer. If you are able to put something together that does seem like it's a good deal, then people will go ahead, pull the trigger. Devin's shaking his head because he's yeah, whatever.

Devin: This is the mark up to mark down time, basically.

Dave: Yeah. 40 percent will spend on more personalized offers. So if it is something that's been put together for your person, your progression inside the game, or, what your current moment to moment experience is like you'll more likely to get a spend. And I did note that social influence helps with your top of your funnel.

So in terms of getting your installs but not with the purchase side. So you're definitely going to get more people in if you're able to build that community out, but that community is not necessarily going to help with with the spend. So I think looking at this back to my earlier question of, can we start tracking ad revenue if people are hopefully still planning on engaging inside these games but maybe not spending as much do companies need to now look even more at how do you increase their ad revenue inside the games to help offset some of those IP spends that they're going to be missing.

Or is it just going to be in general, mobile's going to have a tough year and we're going to be looking at more companies going to have challenges Especially as you're dealing with, UA challenges where you're trying to best acquire the spenders. It going to be even that much more challenging to go up against the people that are able to spend a lot of money, acquire the best users and and ensure that those people are the ones that they're acquiring are the ones that are going to continue to spend.

Aaron: Yeah, I didn't read the report, but I read some of the coverage of the report that you linked to, and I don't know if the coverage did a very good job of framing things well also this this survey, I think, where this data is coming from, it's like, it's just like 2, 000 people, just US and Canada I don't know how accurate it actually is, especially, looking globally, but also like the headline was 32 percent of respondents said they would spend less on in app purchases.

Does that mean 68 percent are saying more or the same? I just thought the framing of that was weird. So maybe you could clarify that.

Dave: So they didn't go too much into whether or not that 68 percent would spend more for me, the biggest point out of there is the 41 percent of high spenders spending less and spend that there is a, almost 25 percent spending much less.

As I look at what that means across the board is probably people are going to focus on either fewer games that they're going to be putting their money into. Or just decreasing the amount that they spend. So they did dive into looking at breaking out individual groups and taking some standardized characters.

I think one of them, for example, was lucky Lucy. You looked at social casino play and they did break down, how many games how many games per month that they were playing? Was it, how many people just played one? How many people played two or three? How many people played more?

Where did they spend inside those? So there certainly was a little bit more detail on that level. But it was something that across the board in terms of each of the demographic groupings that they had, there certainly was an overall feeling that they were going to be spending less. Over the course of the year.

 And I do think that 68 percent is more likely to maintain their spend rather than look at increasing their spend over that time. And there certainly was a lot, some takeaways that, Hey, if you've got a loyalty program in place, then, people are more likely to spend especially if people are able to see a, A better end result, be it's, play inside every game.

So you'll get a bit of a monetary return. My wife loves playing the games where, you play a match three, you're able to engage inside the game for a long period of time and you start earning money that goes towards like an Amazon gift card. And I, those are the types of loyalty programs where they say they're, they're seeing a lot more engagement, more likelihood to spend if you are going to then see a return on the other end.

Some of it just, I think makes common sense, put together a good offer, make sure that's a a personalized offer. People are more likely to spend on those types of things. I think that if the intent to reduce your spend is there then for game companies, it's going to be focusing on how do I better optimize my stores?

My offers. Do I look at, um, different ways of getting people to spend their money. So offering games cross platform, being able to get payment inside the games outside of the mobile versions and hopefully get a better rate out of those ones instead of paying apples and ghouls, 30%, the amethyst soul and getting a better overall percentage of revenue from the spend.

So I think, mobile may be in for another. Tough year, and it's going to be a lot more of the people that really know how to optimize their stores, optimize their offers, put together really good live offerings that are really going to be able to successful those that have a hard time understanding how to really run live operations and how to really.

Look at optimizing, putting together really good offers. They're going to have a tougher time this year.

Devin: I got a laugh with it. Basically, like the starts off with impulse spenders planning to spend less. Of course they are. Yeah, of course. They're going to, they're going to do that budget next week.

Don't worry. That being said, I do think there's a bit of truth to, but it is funny to approach it from that way is I'm sure it's not all of them are impulse spenders, but I think it's the takeaway is that, Hey. The days of like very easy, lazy sales are over. I don't think that's a bad thing.

I think, like you should try and make better value. Do a better job of selling to people when they want something and what they want. I don't think those are bad things. And I think this is like one of those kind of, yeah, if people have less money to throw around and are maybe doing a little bit less impulse, spending a little bit less loose with the wallet that, that you should have to work for it a little bit more.

And I, I think, maybe we had some periods, especially during COVID where it was a little too easy and and everyone got used to that a little too comfortable. Maybe this is an opportunity for AI to, It has a product to personalize all the sales for you, things like that.

But I'm certainly not against personalized sales being like, Hey, here's what we think you want. And I actually want it. And I give you money and I sell like a deal to me. I don't think, again, I don't think this is a bad thing. It just, it does mean though, that people need to pay better attention.

I think to make sure they're making people happy with these or happy enough to, like you said, loyalty programs. And the other thing is, I do think this will increase ads as a monetization source. I think that we've been trending that way for a while, especially with hybrid casual normalizing, I think a little bit more of ads into casual.

Away from just the IAP spend. And I think the, like a lesson dependency on whales for all of your finances, I think is probably a good thing. If the whales start cutting back and you have to start looking at how we maybe going to get the free players to justify their presence a little bit better to watching some ads and things like that, or just maybe provide a better value so that the whales are more willing to spend.

I think those are healthy things for this ecosystem and just the direction we'll have to go, which is fine, like just do a better job of it. But I do think it is gonna mean a lot more ads, unfortunately. Yeah. Which is the downside. I would love to say that Web3 would save this and be like, Hey, now you've got how you have, because you could resell your stuff and all that.

But I don't think, I don't think that's gonna, I hear a whole,

Aaron: I hear a whole course of Crypto bros. Yeah. Yeah. Three,

Devin: I don't think that's gonna apply, but I do expect to hear a bit of that more. In this situation, like that will be a play, I think which is not without some merit, but I think might, yeah, for a minority of games.

Aaron: I don't, I honestly, I don't know what to make of this. I do think some of the data is probably valid, but like the whole other side of the spectrum here is just like, is targeting going to get easier or harder? And I honestly don't know, like, where we are in that trough. And I think there's big questions about what's going to happen to fingerprinting, et cetera.

But I can imagine that in the future as platforms like Facebook and TikTok, wherever they get better at serving more personalized ads built on their own algorithms that, that are just better than they, they used to be and don't rely on, IDFA type, Type elements as much anymore.

Like you can start to, to target people better than you have been able to these past couple of years. And even if overall spending on average dips a bit, teams can still maybe get smarter again and in targeting. I don't know enough about the, that ad tech landscape to comment super intelligently on, on that.

But that's just what's been going through my mind as I've been hearing this discussion.

Dave: Yeah, I mean, I think the ad side of things in terms of the servicing the surfacing of the ads the bringing in of the players I think. Yeah, ideally, hopefully it does get better. I think the, where people are going to have trouble is once the people are in, how do they best monetize them through the offerings in terms of, what IP they're putting forward at what point how they integrate things like incentivized ads.

I think there are a lot of companies out there. They'll just put, okay, we know there's a break point here was pop up an ad, but how do you actually bring in the incentivized ads? You can get additional revenues compared to just the pop ups. And then how do you convince the people that, what is being offered at this particular moment is a great deal and yes, I should get it right now because it'll make that my experience that much better.

And I do think that there are companies that are really good. Yeah. At the sales side and making sure that's coming out at the right time. And I, they will continue to do okay. I think it's the people that treat live operations as, yeah, it's something that's like more of a checkbox. Yes. We have live operations.

Yes. We've got an ad network built in. Yes. We have some IAP inside there. They're the ones that are going to have the biggest challenge overall.

Aaron: Yeah, like I said, I think this is healthy

Devin: for the industry in terms of like needing to rethink this stuff and it will be interesting how the ad landscape shakes out because I think if it's, if it is like way harder to acquire users then you might have this sort of ping pong effect where people drop out of doing it and then suddenly that actually makes it less competitive, which actually might make it more affordable.

And this kind of like back and forth. And I think in those landscapes where you have people that can afford to dive into it, they have an opportunity then to take over market share. Pretty because if everyone's Hey, this is too expensive. Now we just can't compete anymore. We're not going to spend money on ads.

Instead, we're going to try and receive money from ads and make the games more ad supported. And maybe we can try and turn around a little bit into some user acquisition, maybe try and find some other ways to acquire users that are more like through viral stuff that aren't. Paid ads and things like that.

But, and then then the people who are willing to spend for all those ads to acquire users to the thing will take over that space. Because they have the money to do so. and so it's, I think you have that sort of consolidation period, which is what we're seeing across tech, across games, across everything, some of it further along than others, but I think it's period where it doesn't go to zero.

It just goes to the winner is whoever's still willing to spend at that point. And I think that I said, it can be good for those who are willing to shift some of their business models to making money from those ads. And then not depending as much on the people scaling back, it kind of like sort of balances itself out, but in more of a sine wave thing.

And it's just kind of like a period, a cyclical period thing, right? Where we see this all the time where you get these downturns and then like people take over market share, people consolidate, and then it goes back up again, right? Where it's sort of like a cleaning house of things. It's not great for everyone, but it's healthy and better when it can just happen and like actually adjust things.

But the, but as ad tech changes too, I think I, like Aaron, I don't know enough about the current landscape to comment on that, but I think it's obvious that people are going to continue to try and push towards improving it because there's money in doing that. And I think as long as there's money doing it, at least in America, as long as there's money in doing it, people will be doing it or at least trying to do it, right?

And I think with all the pushes in machine learning and AI and things like that, there's obvious technology that could be leveraged against it. We'll see if it works. I don't know if we get to minority report kind of level stuff, where it's just everywhere you look, it's personalized ads at you.

But it's certainly going to be the case where you could throw up walls all day long like IDFA, but people will Find ways around it because they're literally monitoring said device to do it just won't be everyone finding ways to do it. And again, this is just I think shaking out the people, like Dave said, that are just checking a box as opposed to those that are a bit more dedicated to adapting really.

Dave: I feel bad for those who lose out swiftly, there's an AI platform that'll solve all of that. It's fine. Yeah.

Devin: Yeah, GPT 12. We'll take care of it. No problem. We'll see. But yeah, it's going to be an interesting period, I think but I think a lot of opportunity for those who are willing to like just grunt through it to uh, to have some cool stuff on the other end, hopefully.

And not hopefully, hopefully not an ad dystopia. I'm not necessarily the biggest fan of ads, but I am a big fan of ads that are relevant to me. I don't want to watch ads that are pointless. So why not be in the middle? Show me more ads, but show me more ads I want to see. And then everyone's happy. But Hey, we'll see.

Everyone's battling over that stuff right now. Obviously like Apple, especially is in a weird spot where they're in the Facebook position where they've clearly said, we don't really care so much about you guys business anymore. And there's not necessarily a new one to move to.

So landscape is kind of wide open to someone to kind of swoop in and do something really interesting. And maybe that's not even a new hardware platform. Maybe that is things like Roblox and UEFN. To be like a platform within a platform. And maybe that's the next space in that.

But uh, anyways, I, this is a topic that I think uh, could go on for some time in terms of both talking about and playing out over the next couple of years. Unfortunately, there won't be at least for the near future round tables to discuss it, but that doesn't mean you shouldn't send us comments about it.

Anyways. To to, [email protected]. And of course we have all of our other interviews where we'll be discussing some of this stuff. I imagine with industry people that certainly not slowing down. Lots of cool topics. As Aaron mentioned I am also engaging in some of those discussions where I think some pretty interesting people and some interesting topics that I think a bit modern and forward looking stuff.

We also of course have the digest stuff is it may not be like shotgunning you in the face as much as it was, not too long ago. I think we've found a better pace where maybe people could read all of it. And definitely a lot of cool, interesting topics going out there as well.

And I think a good spread of those, but as Aaron said we look forward to hopefully getting some feedback on what you guys want to see because of course, like that's who we're making it for. So let us know. And if you're just passionate about the roundtable, finding some format that works, that, you're going to drive a huge audience to please reach out to us.

I don't think, I don't think you make your case.

Aaron: Let's hear it. Well, It's what you want. Seriously, any weird, wacky ideas, I'm all, all for it.

Devin: I think Aaron's waiting for someone to beg for a game show.

Aaron: Oh, I would love a game show. Give me a, please give me good ideas for game shows.

I would love to find ways to make that work on the podcast. Let's bring the fun. Let's do it.

Devin: You heard it here like, start, start plugging it, get it going. At least prepare your arguments. But anyways, I want to thank everyone who's been here, especially those hitting 138 with us in terms of episodes and Dave, while you may have only been a year, I think you packed it in when Aaron's talking about logistical, Dave was the man always waiting on the bench.

And so I, a big thanks to Dave Aaron as well. Everyone who's stepped up, every panelist we've had especially the ones that I've interacted with, super appreciate everyone who's been involved. And I just want to say that out publicly to everyone like, really awesome job. I think Davok does fantastic work and this is part of it.

And a little bittersweet to see it go, but also moving forward to continued awesome stuff. It certainly hasn't ended or slowed down, just continues to change forms. Look forward to many more, hopefully, years of different forms of interactions and hotel lobbies. But in the meantime uh, wish everyone a, a great weekend and and catch you guys in other forms from now on.

But thank you everyone.

If you enjoyed today's episode, whether on YouTube or your favorite podcast app, make sure to like, subscribe, comment, or give a five-star review. And if you wanna reach out or provide feedback, shoot us a note at [email protected] or find us on Twitter and LinkedIn. Plus, if you wanna learn more about what Naavik has to offer, make sure to check out our website www.naavik.co there. You can sign up for the number one games industry newsletter, Naavik Digest, or contact us to learn about our wide-ranging consulting and advisory services.

Again, that is www.naavik.co. Thanks for listening and we'll catch you in the next episode.