In this week's Roundtable, the squad dives into the exciting news of a greenlit sequel to the Super Mario Brothers movie, with production once again helmed by Illumination. We speculate on the potential for spinoffs and the broader implications for video game adaptations. The conversation then shifts to Microsoft's landmark recognition of Activision Blizzard's 600-person union, which focuses on quality assurance employees, sparking a debate on whether this will pave the way for more unions across the gaming industry. We also dissect the implications of the EU's Digital Markets Act (DMA) coming into effect, Apple's aggressive moves, and what this means for the future of app distribution. Lastly, we delve into Mattel's newly announced co-development deal, spurred by the recent success of the Barbie movie, that pushes the company deeper into mobile game development. We end by pondering whether this marks a new trend for toy companies leveraging their IP in the digital gaming space. Join us for all the latest games business news with Tammy LevyDave Elton, and host Devin Becker.

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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 with me, of course, two fantastic guests. We've got Dave and Tammy joining us for our, pre GDC episode here. As a, I believe both of you will be there. And a lot of us, I think we'll be in effect.

Dave: Absolutely. Looking forward to it.

Tammy: Yeah really excited to make it out there for GDC.

If you see us in on the street. Stop, at least for me, stop me, say hi definitely want to connect with as many people as possible.

Devin: Absolutely. I guess I'll have to watch the YouTube if they only just listen right to actually get the visual for that. Not recognizing.

Tammy: Yes, or the, or the cover, uh, for the episode, but I will, I won't be carrying my dog, so you can't rely on that.

Devin: Yeah, that was the signature move. Cool. We have a few different topics here to talk pre GDC, but I think a lot of people are saving all their big guns for GDC itself. So I imagine there's a little bit of a slowdown just before, and then I think we'll have a lot to talk about also after GDC.

So definitely stay tuned for that. But in the meantime, I think we have. A few interesting topics here, I think to start with one that I think people probably saw coming after all of our discussions of it last year around another Super Mario movie.

Tammy: Hell yeah. So just a little one to start it's been confirmed cause we all, we will, we were all speculating that given the success of the first Super Mario movie.

The odds of us seeing a second one in SQL would be very high. It's confirmed and if you read a little bit about the press release, they're basically trying to keep like the formula or, the chemistry of the teams that made the first one to make sure that kind of it carries the same feel that really, resonated with all of us.

Excited to see that. It's going to be a few years before we, we get to enjoy it, but it's part of a topic that we've been covering quite a bit here, which is this push to leverage game IP more and more across, movies, TV series, theme parks. And they even mentioned this in the press release, that the Super Mario World, IP is just it's expanding more and more.

So I think, beloved Super Mario is not going anywhere. It's just getting stronger and we're going to have another movie to enjoy.

Devin: We also have the Zelda one as well. That was announced a little while back. And but not by the same people. So it's interesting that they, they went with illumination for the first one and then When with a different company for the second one, and then still continue with the illumination for the sequel to this one.

So clearly it wasn't the case with the Zelda movie that it was just like, ah, we weren't happy with the illumination. It was more just oh, let's diversify how we're doing these. So interesting that they're spreading that out a little bit. Although I'm sure those out there, those companies out there looking to get those gigs are very happy to see that.

Tammy: Yeah, absolutely. And we'll see what other good IP and properties Nintendo starts going after. I can also see a place where we start seeing like these side stories for, the Super Mario universe has like so many side characters that, resonate with different audiences.

So I can see that also coming our way at some point.

Devin: I'm really hoping for a Wario movie then. I think that would be the nice twist on things.

Dave: I was going to say Luigi's Mansion, get a little bit of cartoon. Yeah,

Tammy: Yeah, give it a Scooby Doo vibe.

Devin: You definitely see that could also be something that ends up being like a smaller scale thing.

The way like Netflix would did a lot of those sort of Almost direct to video kind of ones that were like continuations of probably like DreamWorks movies and things like that, like shorts or other things. If this stuff continues to be successful, I imagine we could see, like you're saying, spin off stuff, but also even like that sort of smaller stuff just meant for kids to watch in that sort of, it was direct to video.

Now it's just direct to streaming, I guess, uh, whatever you want to call it, business model where Netflix is, Netflix has a lot of transmedia stuff, so I could see them for sure being a candidate for something like that. But I'm sure as long as we continue to do good it's beneficial for all of us, because I think this has been a period where most of the transmedia has been pretty high quality.

So it's nice to see that it's not just churning stuff out. And as long as, as soon as people start slipping we might start to see a little backpedaling, but until then, full speed ahead, to them

Dave: We have replacing all the Marvel content, they scale back from too much superhero movies.

Now we're going to get a whole bunch of video game movies.

Devin: I mean, the superhero movies were transmedia as well, just from comics instead of games. Although obviously there's games and all that. So it's definitely a, inspiration, right? Rather than coming up with these scripts themselves from scratch as we'll take advantage.

Tammy: Now, what I'm waiting to see is the while Luigi. Movie or side story like little shorts, that would be fun.

Devin: Like they did a bit with Bowser kind of being fun in the first one. So might as well make some more ones where bad guys are fun. It's it's been a bit of a trend I've noticed, especially from Disney, where they're really leaning into the villains being their own interesting characters and having their origin movies.

And even some of the games and stuff are starting to incorporate them a bit more. So definitely plenty opportunity for that. Or even if Bowser just had his own movie. You could see that like when he's a kid or something, they could go so many directions with that stuff. The media is the story, as you said, is just rich at this point in terms of lore.

So it's plenty of it. And there's, there was so many Easter eggs and fan service in the first one. Imagine there'll be plenty more of that. Plenty to work off of

Dave: They do the same thing that Capcom did when they did street fighter, the movie, then they had street fighter, the movie, the video game, where there'll be super Mario, the movie, the video game.

Devin: There was Lego movie, games and stuff too, that felt like it was like based because the movie itself almost looked like it was sometimes like the game. And it's just yeah. Feeds itself in a circle and imagine we could definitely see something like that for sure. I, why not?

If uh, you could do a partnership with Nintendo one way, why not the other way as well? But the question is who would make the game? Would it be Nintendo or, would that be a partnership deal? Cause obviously illumination doesn't make games.

Dave: There might be one or two companies that put their hand up and saying, we'll do it.

Tammy: Which feels very anti Nintendo. So that I think that would be a hard one to yeah. To see materialize,

Devin: I think the partnership with Ubisoft was probably like one of the few we've seen in a while where they really it was a big deal. And they did pretty well with it. So never know.

Dave: The company in Vancouver that Nintendo ended up buying, but ended up doing a number of games for Nintendo, like super striker. They were like a pretty solid second party company for Nintendo. Who knows, maybe there's an opportunity for another situation like that.

Devin: Definitely.

While everyone out there start making your spec games and pitches, get ready for the onslaught of transmedia. Speaking of people getting organized some fruit coming, I think from some of this union attempts over the last couple of years that we've seen like a lot of, yeah.

Dave: I would say probably the biggest success story that the unions would say that they've had to date a group of around 600 quality assurance workers have unionized at Activision Blizzard or the studios that were Activision Blizzard now under the Microsoft umbrella.

And interestingly the union's already been recognized by Microsoft as part of an agreement that Microsoft signed with the Communications Worker Alliance back in 2022. There's no challenges in terms of Microsoft recognizing the union. It does seem to be that Microsoft's been fairly open in terms of, or at least let's say neutral, in terms of dealing with any unionization attempts inside their organization.

Overall organization. So there's approximately now 1000 employees that are represented by the unions inside Microsoft. And that's across like Raven, Blizzard, Xenomax. And this new group. Of of QA workers they're across a number of different studios. So the fact studios in California, in Texas and in Minnesota.

A fair number now covered under the union set inside Microsoft. For me, I'm wondering, are we I guess I got a couple of questions, I think number one, I'm seeing a lot of the unionization happening inside some of the. The more areas where work is certainly more precarious.

So quality assurance is certainly one of those that tend to be a little bit more cyclical in terms of when people are brought on to projects and projects over or shipped, a number of them being let go. Will we see the union attempts staying inside? The more the QA style positions, or will we see it more across the board where we see entire studios becoming unionized?

And is this really, you one of the key, one of the real effects of having so many layoffs happen in the last little while where people are looking for an ability to help at least, negotiate a better severance or, Help make it a little bit more challenging for people to be laid off in the current climate curious as to what your guys thoughts are.

Devin: I guess I have a couple of questions before you get into it too much in terms of details and in that, does this affect both outsourcing and contract workers? Because those are two alternatives, let's say this becomes problematic for them in terms of the unions, costing them maybe a bit more or they maybe scale down on full time hires does, is that like the workaround that they start then maybe outsourcing more or working with more contract temp worker style?

I'm just curious. I don't understand the the details of the union part.

Dave: The so I actually do recall there was a situation where an outside group. An outsource group did unionize and then that group was actually. Let go. They were no longer being utilized as part of outsourcing QA group.

I think with the recognition of union is also the recognition of what are the requirements or what are the the terms in terms of they'll be working, continuing work for Microsoft or whichever studio. I'm not. Someone who's really familiar with usual union terms. Um, I've been in management for the last little while, so I'd be one of those people that would be excluded from any sort of union.

Think at this point, I think, with Microsoft actually recognizing the union, I don't think that's the case where they'd say, Hey, you guys have unionized, we're now going to just release a lot of you. So I think there, there certainly are some aspects that are, their positions are a lot more protected right now.

Devin: That's good to hear. Thoughts, Tammy?

Tammy: Yeah, I think there, there's a lot of thoughts for sure, around the union piece. One of the questions that you had is or Open questions was, how are we gonna is this the effect of recent layoffs? I think that, there's, it's probably just part of the momentum that the union efforts have been getting, there's been talks about, unionizing efforts across the gaming industry for many years, if not decades because the conditions have always been precarious, right?

Right now we're seeing these massive layoffs, but, there's been all sorts of other, quote unquote, exploitative practices within the industry where there's like this, the big higher pushes and then the big layoffs and pushes and layoffs around like box game releases.

I think that. We are seeing a lot of that also gain momentum and come into fruition. I think that part of, it's definitely like a tricky topic to talk about. First of all, I think that it's, it's a fantastic win for unionizing efforts, especially in North America because North America specifically just makes it that much harder for.

employee groups to unionize because you have to, I'm not, again, I'm not an expert either on unionizing or anything, but I know that there's like in, in certain European countries, you can just gain some critical mass and then, go to the employer and say we've, we're negotiating with us a union and basically That's first you get the group and then you go in go to the employer in the U.

S. You have to file a petition with labor relations, with the labor relations board and do a vote as a whole unit. And all of this is happening while the employer knows this gets as soon as you're like, open the door, the employer knows. And that incites, in a lot of union busting practices.

So to what you were saying, Devin, of hey, can they perhaps go more the route of like outsourcing and contractors to avoid unionizing like before they recognize a union. Yes. And that's part of some of the unionizing like busting practices that, that some big corporations take on of Hey, no, you know what?

We're not going to block you, but we're not going to hire you. We're going to start hiring more over here and like all sorts of different things. So. Again, back to specifically like what we're seeing right now, I do think it's a huge win because now that Microsoft has recognized these unions now that's formal that gives them a seat at the table to really start, negotiating whether it's better salaries or as, as you mentioned, Dave the conditions in terms of, layoffs and severance packages.

So that if, if you do end up facing that, it just, it's under much better conditions for, the group that is being impacted. So I think a little bit of a ramble there, but I do think that there's a lot that, gets mixed in with like unions. But it really like a union is a group of people they're going to represent our interests.

So it's, it really is like that giving them that seat at the table and advocating just to, have a better workplace and, a little bit, more transparency and the resources that they need. So overall, I think, there'll be. It'll be good to see, how those efforts start coming to fruition with these recognized unions and I think that depending on that is whether it gains more momentum and I can see that, expanding to other teams that are usually, underpaid like community management, for example, is the first one that comes to mind.

It's QA, community management, customer support, like, there's a lot. I think that those groups will probably be looking at it from these efforts and see if, you know, they can follow suit.

Dave: Yeah I agree with you. I think it's probably going to be the groups that companies that I had to say it, see the, see some positions as being a little bit more disposable, that, there are people that come in, they come out, they don't see them as necessarily someone they Are looking to bring into a company over for many years who don't have that, they don't have that balance in terms of the power structure inside the company.

I think if a group of engineers got together and said, Hey, if we don't see some changes, we're all going to leave. Unfortunately, right now, I would say that group of engineers probably have a lot more power, so to speak, inside that company than a group of QA. That the company would probably see that the QA is a little bit more easily to replace.

There are some groups that would probably see this. So I just grabbed some QA off the street.

Devin: To be fair, it is an entry level position for a lot of people. And there was a lot of people back in the day that worked their way up the company from there. So it does make sense that it's considered a little more replaceable if it is that, the qualifications are lower.

Dave: Yeah. But at the same time, there. There are people that have put great effort towards the company and should be, treated as disenfranchisement, which hopefully every company would treat all of their employees. But I do think Tammy, I agree with you that it's probably the areas of QA of CS community management that there are probably going to be more likely to.

To farm, to, to work towards farming the unions, the representation and some of the other areas.

 The other discipline and area that I think would follow suit as well, potentially as the artist. Because it's crazy to me since quote unquote.

Tammy: Art outsourcing is accessible. It also, it's very volatile for artists to be, working in the gaming industry. So I think that there's like a lot of different disciplines that would probably like, if they if we see good progress made with these unions, that will hopefully like very quickly, Start organizing as well.

Dave: Do you think that we'd end up going closer to the, more of the film model? So film very much a union driven industry where they have a production company and they have a small group of people that are the, so to speak, top line people. And then they contract out. Everybody else, they contract out the actors, they contract out the, the all the various disciplines from props people through to cameraman through to, all the various aspects.

Do you see the potential for the games industry moving more towards that model? If we move away from this our current sort of collection of people inside of a individual studio.

Tammy: That's an interesting, that's an interesting question. I hadn't thought about it in, in that way. It is an interesting question.

Cause I think I would take a really long time to get there. Just because it's like a philosophy, I think of If you ask a lot of people in the industry, like what makes the best games is like teams that have worked together throughout like challenges and many games. And, and that's why you also see teams trying to get back together, even if, they've parted ways at some point.

So I think it's not only like a structural thing change that would need to happen, but it's very much like a ideological change that would need to happen. So I think there's some added tensions there.

Devin: I think the part of that to consider is exactly what you're talking about, which is the people that are familiar working together and the main benefit for the film industry.

Part of the reason why it works and it's adapted to it is because it, All predictions are generally temporary, right? And the project comes and goes. There's not like ongoing DLC for it or live service. Yeah, I don't know. Maybe all that changes. Maybe they go to the games model and then we go to the film model.

But the thing is you sort of need some sort of assurances, right? The reason we don't do the studio models, there's not really a lot of assurances. between the gigs in terms of like future work getting hired, make sure you don't get just replaced. And that ability to bring together people with a set of standards and a pool of people that have, a lot of different things built up around it.

And that makes it easier to do that. And if you look at the way the film industry does it, a lot of times it is exactly what we're talking about. People that have worked together tend to hire a lot of the same crew because they know they're reliable. They know how they work. It's not terribly different at all.

It's more just like, this was, The nature of the beast for films and unions really helped made sure that wasn't just pick up people, drop them, pick up people, drop them in a way that like there, there wasn't really like a lot built around that. And I think in this case that probably would be helpful in making it so that games don't have, because there is like this kind of weird sort of transition between games when you make a game and then you either immediately start on the next one or you're like spending a while going, what do we make next guys?

Like films don't really have that. You don't just sit around kind of, what do we make next guys? That's you go shop, whatever your project you have around and try and get a green lit, but then build it from the top down, via director or screenwriter or whatever via the studio heads.

And it's a very different structure that way, but financially it does make some sense based off of how they build it. But at the same time, I think it's a little easier for a film to build what it plans to build than a game where they have to find a lot of it in the middle. I think That part is probably actually the bigger challenge and maybe their, their pre production is really like heavy prototyping, figuring it out before you're trying to get it green lit and things like that.

Obviously it takes time to adapt, but I don't think it's unadaptable model.

Dave: They do have live ops. It's called TV series.

Devin: True. But those are packaged in seasons the same way. It's like you're packaging a thing and they, they get canned or switch out people and things like that. But yeah, absolutely.

They have unions. The other thing I actually want to bring up around the unions. That's very topical. I think lately is we saw a recent action a lot, of course, with the TV and film and around actors and, Even voice actors and writers and things like that. And the, one of the big points of attention was AI.

And so when you're talking about some of these jobs that are maybe a little more entry level, there's maybe also more potential for AI to impact them. So if there is like right now, there's not a lot of bargaining power against your QA job getting replaced by some kind of AI farm that's doing all the playing and automated reporting.

Obviously, like there's been a lot of that over time anyways, like there's a lot of automation to try and save money in QA, or at least to try and test things faster. Because humans at some point can't scale to that level. So it makes sense. It wasn't really stealing jobs quite yet. But especially when we're talking about artists and outsourcing you get outsourced to another country or you get insourced to AI.

It's obviously in theory, a lot more cost effective to insource to AI than to outsource to another country.

Dave: And that was one of the things that Andrew Wilson was talking about when he was talking about was the example of stadiums, building stadiums, where the initial process for building a stadium was something like six months.

And through the use of AI, they were hoping to get it down to, six days or, with some of their current pipeline changes, I think the example you gave, they got it down to six weeks and Hey, if we got it all, a whole bunch of AI involved and Hey, we can get down to six days.

If we can go from six months to six days, that's huge savings. And we can either build more stadiums or. What have you? So yeah, Tammy, there's your reason for artists to try to unionize is because yeah, AI is certainly something that's going to be injected into the production workflow for the art team and for the engineering team at some level.

Would you hire a junior person for 50 to 75, 000 a year? When you're going to have AI potentially write some front end code for you.

Devin: I don't know if you guys literally saw, there was a software engineer, AI that got put out today by cognitive. I think it was called Devin spelled exact same way as me. So apparently there's a even better engineer version of me than me out there and that kind of stuff.

I don't know if you've seen it. It's pretty cool. Pretty impressive and definitely looks like, I, there will be absolutely hiccups, but this stuff is definitely getting to the point where at least in certain use cases could be useful. But your example, the stadiums one, I think that what that ends up doing is revealing all the other bottlenecks you didn't realize were there.

That prevented from being six months, you find out, Oh, we can't like, that actually was like, it's great. We scaled all this stuff down, but you can't really get it down to six months because of this, because this, I think AI is gonna be the same way, right? Where it's in other industries where we can scale certain parts down.

But it reveals the other parts that are difficult to deal with in some ways. Hey, maybe it's the zoning that ends up taking everything from the stadium building or you checking fire safety, all these check boxes that ended up being problematic. And then, you can't automate a lot of that because it's purposeful government regulation or something like that, adding those hurdles.

But. This is something we'll see play out, right? This isn't an immediate change or anything like that. It's more like a a bit of a warning shot, but also if we're making progress in unionization that does offer opportunity for us now at the start to figure out, okay how do we tackle this?

And maybe it just means less people needed for certain things. And those people will have to be specialized in working with the AI and actually, using it in a way that's helping them as a tool or whatever. So it's not replacing a specific person, but it is scaling down the amount of people needed so that the people that are remaining.

Can use it. I'll work alongside it. And hopefully that's something that just multiplies the amount of studios that are possible about the games that are able to be built, like what your stadium example Hey, if you can build it down in six months, but that reduces down the amount of people, are you losing people or are you building more stadiums?

And I think. There'll be some yin and yang with that I think we'll have to consider. But in terms of government regulation and bottle decks, one actually kind of working out in our favor lately is the smackdown happening in Europe on Apple. The DMA going into effect in Europe. I'm not usually a big fan of a lot of the European regulation, but in this case yes, more please.

Tammy: I know. Yes. So yeah we've been talking about this because Apple has been You know, making waves around all of this coming into effect now in, in March 7th finally went into effect. So that is the Digital Markets Act, or DMA. And just as a reminder it's a European regulation A lot of what we can, that we talk about can be contained to just, European users, European practices.

Sometimes when Europe has put in these regulations, we've seen it, unlock opportunity for other, basically like it's the first step of like many to, Other countries following suit. But right now it is contained to Europe. And I think we see that with Apple. So being like, Hey, it's contained to Europe.

So we're containing to Europe. So yeah, we've seen a lot of twists and turns. And of course, Apple released their policy changes which have more caveats and twists and turns. Just to take a step back and go over what it actually means in theory for developers, is in theory platforms like Google and Apple have to allow third party payment providers other than the default that Google or Apple provides.

Pay, give they have this regulation around letting developers steer to off platform web stores without retaliation. So things like web shops that we've, we've talked about and we've seen a lot of teams implement and see significant added revenue. There had to be, like, a lot of tiptoeing around how to do it to not be, full out of compliance with Apple and Google.

And, now you can more easily do it without, fear of not being compliant and getting your dev account shut down and all that stuff. They have to allow third party storefronts on their platform. Here, we're going to continue to see that saga between Epic Games and Apple, because that's where that's playing out, right?

With Apple Epic really pushing hard to get their Their app store on iOS in Europe and they have to allow direct site loading of apps. So what that means is, should be able as a developer to have, go to my web page, com and, download the game from there instead of having to, go to the app store.

But all this, the way that Apple is implementing it is, comes with a bunch of caveats. So, they've, the guidelines that they put in is that, first of all, to be able to do the direct side loading of apps and, be allowed to do this. You have to be in good standing for two plus years with Apple.

So that basically blocks Epic because they shut down their account, which means that they were not in good standing, right? So you already see that playing out. You had to have over 1 million downloads. on iOS in Europe in the prior calendar year. So basically they're cutting off small teams from being able to unlock this.

And you have to get over a scary looking bunch of warnings that players need to approve if they decide sideload your app the other piece is that the runtime fee that they announced earlier this year, I think in January is still, Mentioned like they didn't backtrack from that. So question being is, will we actually see any changes?

I think that we're at leasing, the EU regulators comment Apple, not on around games, with the whole like Spotify and like music competition, like a close to 2 billion or 2 billion Euro fine. You know, it's something. Okay. But my first question, to hear your guys thoughts is, will that be enough to really get them to like eventually loosen their grip?

And the other question is more food for thought is like, what are the possible unintended consequences from these regulations, right? Like we can see a lot of positive and we can see a lot as as I mentioned, like opening the door to them. But we can also see, just stuff that.

Crowds the space in some way or makes it hard for developers in my example. There's like We all have to accept those cookie pop ups because of a European regulation for the GDPR and it was just like now it's just gonna spam you every time you go to the website. Curious to hear your guys thoughts.

Dave: Yeah, given it's like Apple says, okay, we're going to do this. And that's the part that you shout really loudly. Hey, we're going to allow for third party websites. We're going to allow for all this. And then they very quietly put in, as you say, here's all the rules and restrictions. Here's all the fine print in order for you to allow you to do that.

I really wonder what percentage of companies. Are going to be able to do it. What percentage of companies are going to want to do those things because they do require the companies to accept the new terms and conditions with the the download fees and the new style of of Apple, pulling any fees from the from the developers.

There's a, a number of extra steps that developers are going to have to undertake. Are they actually going to see any benefit from it? Apple saying, Hey, if you decide to do sales through, outside of our store, we're still going to charge you 27 percent knowing that you're going to be incurring 3 percent charging fees for using Xsolla or some other third party.

Platform for for managing the, your payment systems. So in the end, does Apple win only just because they're still going to get the money that they would have gotten if they'd gone through the store and they've put in so many barriers or unfavorable conditions that most developers would just say, you know what, it's just not worth it.

Let's just keep on doing what we're doing right now.

Devin: As you said, Tammy, like it's definitely going to lead to probably worse user experiences, at least with the scare screens and stuff like that. Just like the GDPR, like the cookies pop up on every single website. That's extremely annoying.

Although at this point I actually have stopped really paying attention to it or noticing it. I'm just clicking the, I accept. And that's probably actually worse for security at the end, unfortunately, because now I'm clicking, I accept. And it's who knows what I'm even accepting at this point because you just get so used to it.

But to, to your point, Dave, in terms of who would want to use this and why I think it's interesting to consider that if it's in theory, worse than complying, then the people who will do this are the people that find out some other way to turn this to their advantage.

If you're like then suddenly getting people onto your website, buying stuff. And, obviously you have to report all of that to Apple. Is there some other unlock by getting people onto your website, buying stuff in terms of customer relationship, in terms of cross promotion, in terms of, Hey, ad revenue from the website.

There's, if someone figures out a really solid unlock for that, those people are going to be the ones that are willing to do it.

Dave: There certainly is. And I think the larger companies will certainly see the benefit of owning the relationship, being able to have that direct communication with the consumer rather than having to go through Apple as the intermediary for that.

So I do think that. A number of companies will see that advantage of being able to now directly talk with their consumers and be able to upsell them on other games, upsell them on merchandise, as you said, really take advantage of the fact that where the consumer is on your website and you have the opportunity to do.

More than just pitch them on that, that one particular game when they're on that landing site.

Devin: And it really seems like it's an opportunity for someone to get creative, right. And really figure this out. And who knows, maybe that'll actually be a really important thing for the next stage because free to play is in kind of a tough spot right now in a lot of ways.

And maybe this. Pushes people to come up with a new solution, even if it's not really directly about Apple, but it's still forces thinking out of the box when it comes to dealing with the current user acquisition problems and things like that, where this ends up unlocking that could be net benefit.

Obviously in the meantime, though, it sounds like in general, they're just trying to make it. Really not something you want to use and in Google, it sounds like it's doing some similar things. So it's like right now we still have that duopoly for the most part. Obviously there is alternatives in some other countries.

But as far as the sort of global landscape, it's primarily that duopoly that we're having to deal with. And if they're both in lockstep, it becomes problematic to do something else which is where the problem is. We don't really have a new platform. To really move to the way we did from Facebook canvas, over to mobile.

And so maybe we do at some point in the near future.

Dave: And I think, Google does definitely provide an example of what it probably will look like with Apple in that Google allows for sideloading, you can go download games from other stores as it is right now with Google, but the Play Store is where the vast majority of people go to download.

They're not going to the Samsung store. They're not going to other, storefronts that. That do offer Android games. The vast majority of them are still just. Downloading through Google play.

Devin: Yeah. And I think the big advantage of that side loading stuff isn't necessarily for running it as a business kind of thing.

It's more opportunities where let's say you want to do some sort of testing and you're not going to be in compliance with Apple, or you don't want to go through that whole headache or the dealing with test flight and all those other things, there's a lot of use cases for, sideloading APKs outside of, it's just uses, especially web three.

That was a big thing early on when you wanted to start doing mobile stuff and everyone was unsure of the policies, APK side loading was a way you could deal with that. And so there's definitely those, but again, as you're pointing, there's not really like a business model around it, right?

At the moment, people have tried either all our alternative things like F Droid and, Amazon tried its app store and stuff like that. So it's not a mainstream thing, but it would be fantastic still to have an iOS as an alternative, but it sounds like they've really locked down who can do it.

In a pretty restrictive way. It's not only do you have to be in good standing, which as Tammy pointed out, definitely is, I don't think it was purposely put into target Epic, but they certainly were happy with that being a side effect of it. But also like it's the limiting to the million dollars and all that.

It also sounds like they're limiting the particular type of customer. And since the good say anything, it can't be a new customer, right? They have to have that two years backlog. So they're actually setting new opportunists back two years by having to like, wait to be able to do anything unless they say partner up with a developer that's already in good standing.

Tammy: Yeah. When you were talking about like side, the benefits of siloing, I was like, for the game dev side of my brain was like, yes, please. That just makes it so much easier.

Devin: Yeah. It seemed like they were trying to create a loophole for, with the enterprise stuff that they did, but it was so severely limited.

And not like a great system and just, it just reiterated the kind of need for that. And I, there's so many times I've, as you said, with game development, testing out new builds and things like that. And I'm always glad I'm on Android for those because it's just so much easier. But it is a security thing.

And I understand where Apple comes from in the sense of that, but clearly there's probably a middle ground and maybe this regulation is pushing them towards that, which it sounds like, like they're at least vetting the developer, to some extent. Which helps with some of the security concerns, and I'm sure is the justification behind why they do it.

We'll see how it goes, right? This is first steps. This is like, uh, hopefully at the very least progress towards something. If not, then it would be fun to watch, from afar here in the U. S. to see if it has any impact. But if it becomes enough of a thorn in Apple's side to have sort of two different big country policies.

That can be progress where it becomes, a global thing where it's just easier for them to just be like, All right, fine. This is the policy for everywhere. We don't want to deal with the headache of having two separate things we have to do. And that's sometimes the benefit of doing these, is making it so hard for them to have two separate like SKUs or two separate versions of the OS, for example, or different weird restrictions they have to code around and bugs that come from that to just be like, All right, forget it.

It's not even worth the headache. Like the headache for themselves at that point. Hopefully that's the case, but I think it'll be a while before we find out if that, that ends up being it. But in the meantime, I'm sure they'll just be pushing people over to vision pro and hoping they can get people on that for the moment is a, is there a new green pasture?

But I think it's a little bit of a high bar when it comes to retail price for consumers. So we'll see. But speaking of retail consumers and in this case, toys. A lot of interesting stuff still happening in that space.

Dave: Yep. Definitely. So there's been I think some little bits and pieces of good news that are starting to happen around the industry.

Amongst all of the layoff talks seeing a number of new game studios starting up, but we're also starting to see some new publishing efforts. So Mattel has announced that they are going to go forward and start doing self publishing. Up to this point, they've mostly been working with the licensing model.

Um, Ubisoft and Gameloft licensing, Hot Wheels games certainly been out there before. A number of Barbie games have been out there in the in the past. But Mattel is going to start now. Not just licensing out but we'll actually start doing some development. So they're going to start off doing some codev where they actually fund the development they'll fund the marketing and then, and they'll do the publishing but they're going to start small, maybe, a game in the first year maybe start adding a game or two after that.

And for now, continue to do the vast majority through their licensing. They've got a number of partners in terms of who they work with including Net Ease. And then the Barbie, there's a new Barbie game that was just announced in partnership with Zynga's Wallach Group that we're supposed to see later this year.

But they do have some interesting brands that certainly appeals to probably the younger. Side of things in terms of the demographic in addition to Barbie and Hot Wheels, they've Bob the Builder and, there's always the potential for them to also start expanding to Roblox and into Fortnite as well.

So it'll be interesting to see how Mattel, slowly. But surely by the sounds of it works into becoming a true transmedia company, not just doing toys, but they've got the success of movies with the Barbie movie and now moving more directly into games. For me, one of the interesting things I think will be the question of will they end up doing it?

Doing a Disney where they end up going into games and then we're out of games. And then we're in the games and we're out of games or will they stick with it and be in there for a while similar to probably their most direct competitor, Hasbro has certainly been in games for a while now and sounds like they, they probably will stay there for a while, especially with the ownership of some of the, some of their brands and companies such as wizards of the coast and some of the efforts that they've got there.

Any thoughts in terms of Mattel? Are they going to stick around? Are they going to be Hasbro? Are they going to be Disney?

Tammy: Yeah, I, I will say that I haven't had a chance to dig deeper into their specific strategy on how they're going to approach this. So I would say like my only take here is it really depends on, is because making games is, it's, so we say it a lot, like making games.

It's hard. It's not. It's not rocket science, but it is hard to make fun games. And there's has to be, They have to set up the organizations internally to be able to move at the speed that you need to move, to have the flexibility that you need and just have that structure enable game making and not hinder it.

And I think that's where a lot of IP holders Do that step in step out step in step out because they're, the way that they control the creative control of the properties also has a lot of impact. on how well that kind of all gains momentum. So I think it, without me digging deeper into it, I think it's like, it depends on like how much a creative control they want to maintain and how does that look like?

And what are the structures in actually like strategy on how they're tackling this. I think that they have a lot of properties where they could, this could become a huge. Other arm of their business. So it has the potential, but it really comes down to as with most things, strategy and execution.

Devin: Yeah. I think, and it may even depend on just, do they have people internally already? They maybe have the right experience or skills to be able to do this quickly, as opposed to having to hire all the people for that, or to build like an internal studio, but if you think about it, this move. Does make sense when you just look at toys in general what is their, what are their biggest competitors is a kid with an iPad right now.

Like they, it's not toys the same way it used to be with kids. Obviously there's an element to that, but with kids just glued to their digital devices, now toys have to be in that space. And also thinking about the history of Saturday morning cartoons and that sort of ability to tell.

Sell toys that way that doesn't really exist as much anymore. And so what is the relevance now? Maybe you get into games as a way to help sell toys. And maybe that becomes the thing to push people to toys or becomes, a Skylanders kind of experience where it works with the toys. There's a lot of opportunity there.

And Maybe that's what Mattel sees, or maybe it's just a transmedia play of like, why are we not making video games of our hot properties to continue to extend monetization? Because at least for now when you go into the theater to see Barbie, there's no in app purchases you could make during it.

So this does seem like a monetization opportunity for them. For properties, right? Like same when you buy toys, right? You got to deal with the whole retail chain and there's only so many upsells they could make, whereas with digital, sky's the limit in terms of what they can do monetization wise, which is, just ask Hasbro.

They know that very well. And so this is maybe first steps and hopefully they don't pull a Disney. To be fair, like Disney did some pretty cool stuff early on and then, eventually bailed. So it is too bad to see that, but at the same time, like. It just wasn't their strength and it's difficult.

Sometimes they just do that and then start outsourcing or whatever. But I also am interested to see if this ends up like bleeding even into web three, because we've seen a number, as you said, Hot Wheels was an example. When that, that went into web three, there was quite a few others in terms of digital toys, having a good overlap with NFTs.

So there's always possibility that Mattel could further dabble in that sort of overlap as well, to do something that maybe has some interesting relevance. In that tech of Hey, it's, Hey, you've got your hot wheels. You can scan it into the game is also an NFT. And there's definitely opportunity.

But again, depends on that internal expertise or who they hire. If they have to hire people and depend on contractors, it's most likely to be short lived. I think unless they find like a lot of immediate success, because it could just be a huge cost thing that's just maybe a light marketing vehicle at that point.

Dave: But. I think they're successful. I, it sounds like because they're starting off with codev, I would suggest that they probably are starting off hiring sort of those top line individuals be that, the creative director executive producer the people that are framed the overall.

Creative for it and then find a studio to actually build it out rather than trying to hire them all internally, as you said.

Devin: Yeah. And, as mentioned, it's not like this is Barbie's first game. There's like the old, yeah, the old CD ROM games and everything else. Flash games. I'm sure like this is a long history to, to tap into.

It's just finding like stuff for the modern market, but it seems like mobile. It's still a very good fit for those types of products. So we'll see what they put out and hopefully it will be at least a good quality. If not, maybe the employees can unionize and we'll, we have a whole bunch of other stuff related to it that we've been pushing or maybe they can use some AI to help with lots of different stuff going on in the games industry that could work out or against Mattel.

So definitely a good luck to them though, because I think I'd love to see toys maintain some sort of relevance that makes sense in this sort of digital culture and not just fade out in favor of just Screens in front of your face all day as much as that is my life, but Yeah, lots of interesting opportunity and we'll keep an eye on it.

But in the meantime I just want to thank you guys for joining us. And of course, we're all scrambling to prep for gdc And so definitely make sure to reach out to us if you want to talk with anyone novak At GDC we had the link in the last show notes. I'll try and make sure that gets in this show notes as well in terms of the forms meetup, although it might be very well booked up at this point but you can always email podcast at novak.

co as well as use, I think, a contact form on the website, but it's definitely getting close to the date. So make sure to hit us up beforehand because. It will be a very busy GDC from the vibe I've gotten is it's going to be a lot going on despite the fact that, the bad news sort of time, it's definitely not slowing down.

So make sure to check that out. And if you're going to GDC, of course, have a safe trip there and enjoy the show and all the stuff going on with it. But in the meantime get some rest this weekend and we'll catch you guys the week after GDC, as we will all be there. And of course, hopefully we'll have some great stuff to talk about.

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