Apple vs Epic Aftermath: A New Era for Game DTC

Apple’s forced policy shift following the outcome of its legal battle with Epic Games has opened the door for more flexible Direct to Consumer (DTC) strategies, and game studios are taking notice. Host Devin Becker welcomes Chris Faught, CEO of Neon, to break down what this decision means for developers. Chris clarifies the broader implications of the ruling, the mechanics of implementing DTC models, and how this update impacts developers operating across different genres and regions.

The conversation explores how studios should be thinking about DTC integration internally, what practical steps to take next, and how these changes might alter monetization strategies moving forward. Chris also offers insight into how webshops can be used to their full potential, what teams are best suited to act quickly, and where the market is headed over the next 12–24 months. Whether you’re already experimenting with DTC or still figuring out how this ruling affects your business, this episode offers a grounded look at what’s changing and what to do about it.

We’d like to thank Overwolf for making this episode possible! Whether you're a gamer, creator, or game studio, Overwolf is the ultimate destination for integrating UGC in games! You can check out all Overwolf has to offer at https://www.overwolf.com/.

We’d also like to thank Lightspeed Venture Partners for making this episode possible! With its dedicated gaming & interactive media practice, the firm invests from an over $6.5 billion pool of early and growth-stage capital. If you’re interested in learning more, go to https://gaming.lsvp.com/.

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

Devin: Hello everyone. I'm your host, Devin Becker, and today I'm delighted to be joined by Chris Faught, founder and CEO of Neon Commerce Inc, sometimes known as Neon Pay as well.

Neon is the complete direct-to-consumer commerce platform and merchant of record for games. Always a fun thing to say. They're partner with mobile and PC studios to help them save money, increase revenue, and build closer relationships with players. But today we've got a very special topic that is a topical.

Today we're gonna explore the broader topic first, of direct-to-consumer alternative payments and web shops. But it's all gonna be in light of the somewhat recent Epic versus Apple ruling, which, you know, just settled at the end of April. But we wanna talk a little bit about what that means for everyone going forward.

But first off, just to get things out of the way, can you introduce yourself for your background and what Neon does today?

Chris: Totally. Thanks for, thanks for having me, Devin. It's great to be here. It's been quite a month, yeah, for us. So my background, I've been in FinTech working with e-commerce, FinTech payment networks for the better part of the last 10, 15 years.

I helped build a firm, which was a BNPL startup here in the, in the States, that works with a lot of e-commerce merchants like Shopify and Amazon, Walmart, et cetera. Worked at Apple Pay somewhat ironically, but briefly to help them with some product strategy on their wallet products. And then helped Ribbit Capital start a new FinTech business, consumer financial services business, with and alongside Walmart, which is now called One Pay, before founding Neon.

So we, we started the idea about four years ago of officially incorporated the business in three years ago, just over three years ago now. And the idea has been then, as it continues to be now, is building all of the payments, e-commerce, tax compliance, fraud orchestration, infrastructure that a game publisher and studio needs to take advantage of what is now a rapidly changing environment, around monetizing their players, direct consumer. So outside of the app stores, starting with mobile and PC.

Devin: Cool. Could you just quickly kind of go over what direct-to-consumer means in terms of like, the context for all of this?

Chris: Yeah. So it can be confusing or a bit of a misnomer 'cause like, aren't, aren't these always sort of direct consumer Depends on who is direct and who's between you and your consumer.

The idea has been, I mean, for games, since basically the beginning of this industry, developers, publishers, you've been suppliers to another platform, right? Whether that's Apple, Google, Steam, Xbox Places, Nintendo, the, the end consumer has a relationship primarily with that platform, that hardware and their device and their, their app store.

And the idea has now been as those, as a regulatory pressure,  has been opening up the opportunity for developers to monetize and build a direct relationship with that co consumer without being intermediated by Apple, Google, or the others. Others going forward, then what does it look like to have the capabilities to do that, and what does it mean for your business to have that direct relationship that you've otherwise been, been kind of separated from in the past?

Devin: Awesome. And it's kind of ironic too because the direct to consumer wasn't good before. And then it got built up and now it's kind of on parity and now we have this whole situation where we're at now. But can you just walk me through like what really happened? Obviously, this has been a long running case over multiple years, but the big kind of main event, sort of concluded, or at least partially concluded at the end of April.

Just walk me through like, and, and why studios are excited about this, what it really kind of means to, to get started on all this.

Chris: Yeah, so maybe I'll give a couple of points just kinda looking back on the, on the case decisions in the US at least for simplicity sake, over the past few years. So in 2021 in August, there's a class action settlement, sort of as a sideshow from the main Apple Epic trial.

Its time then through which Apple sort of reconfirmed its commitment to every app developer that they can have, off platform or out of app payment channels, external payment payment channels that Apple is not entitled any commission for those purchases provided that developers were not linking to them in their games or their apps or advertising or marketing, the availability of those channels from within their app.

That was in August in 21. Over the years, since that point, which is known as steering steerings, you know, users to your external channels, has continued to be litigated. It was in January of last year, 2024, that Apple appealed the, the overturning of that decision to the Supreme Court saying, no, no, no, we don't want to allow that steering still, Supreme Court didn't hear that case.

So that meant that in the US that had to be the case. There had to be, you know, apple had to allow developers to link and advertise in their games and in their apps about external channels. However, Apple's response was they had very quickly thereafter, late January, early February last year was, okay, we'll, we'll allow that, but we're going to basically require you to get an in-app, linking entitlements from Apple in order to do that.

And then we are going to charge 27% on all revenue that occurs once a consumer clicks that link makes a purchase on an external channel. Over the course of seven days, basically they had a lot of stipulations around it. The point was they were in compliance, but it was not really a good faith effort to do as the judge intended, because the, with the amount of friction, sort of the economic penalties of doing something through their in-app link entitlement made it such that nobody went through that process.

So, but all the while I think the most important part has been I, you could still have external channels, but the question for developers and publishers, many of our own pub, partners included, has been, well then how do I drive awareness of that channel to my player base, outside of the app? And that's why the, the, and I'll kind of come back to this, but the addressable market for this was somewhat constrained to core games, casino games where there's a pretty big and vibrant community outside of the game itself in Discord or Facebook groups or otherwise, where you could market this channel to those players somewhat, you know, unencumbered, but you're not reaching the full audience.

Now, back to the ruling in, on, on April 30th of this year, just about a month ago now, that's when Apple came back and said that no, the 27% is not in compliance with what we asked you to do or told you to do. And now as a result, as effective immediately on April 30th in the US all developers can link to those external channel channels freely.

They can advertise the, those channels freely within the app. And there's no 27% commission, nor are there the dreaded scare screens that Apple had before, which is like, you click the link, and it would pop up and say, you're going to the big scary internet. You're gonna have your credit card information stolen, et cetera, to dissuade users from doing it.

All of those things are now removed, and the implications are that the, like I said, the addressable audience among apps, developers, games and others is everybody. Because now you can drive awareness in the app freely. You can embed, direct checkout links, browser, checkout links like those that we enable Neon to make that purchase directly without even going to a web store first.

So it's kind of opening up in, in probably the most significant way. Since this opportunity, you know, began, um, that's kind of enabling true sort of like multi-channel commerce here at Gang Studio.

Devin: Cool. And then, and I believe, I don't know if this was the term that was actually used in the, the court settlement, but definitely used by Epic was malicious compliance.Which was them complying in the letter of the law. Technically, but doing so in a way that was trying to get people to not actually ever use it. And of course for, for context as well, 27% is obviously very close to what they were charging, which was 30%. So yeah, it was basically like not only should you not do this because you're not going to like save really any money, you're also gonna scare away your customers probably lose purchases.

Right. Totally. Ultimately lose money by doing this. And it, if I understood right there was in doing that entitlement, didn't that also change your agreement with Apple in terms of how you're able to do, like were you still able to do Apple pays, like their, their checkout at the same time? Like can you still do that?

Can you give players the choice between the two for people for example, that are, are comfortable using Apple's payment rails and are still unsure, especially 'cause of Apple's scare language, uh, and don't want to go the other way?

Chris: Yeah, so great question. I think, this has been the, without exaggerating the busiest month for our team.

That's just who got started. I, we've been flying all over the world. I, I think we've spoken to no fewer than 30, 40 different publishers of varying sizes, different industries, different genres of games.

Devin: Well, now you speak a whole bunch at the same time right here.

Chris: So I'm speaking a whole bunch at the same time here.

But the, there's been a lot of, I think, consistent questions, right? I think there's a lot of, uh, reactivity that we're seeing around, okay, now you can do this. Well, what do I do? How do I do it? We have actually been advising, publishers who work with the com with competitors of ours who've come to us and say like, can you go through my player experience and tell me like, how do I need to fix this to make it higher converting, et cetera.

So there's just a lot of noise right now in a good way. But I think that to your question, the models that we're seeing, and it's a little early to see how this will sort of converge, are, are kind of threefold. So the first is, which we're only seeing from reader apps, which is the Apple designation for an app that has like much thinner margins.

Because they have licensed content. Things like Kindle, Spotify, and, and others that, that have basically had a carve out for a long time from the app store where they don't have to offer in-app purchases, in-app billing at all. So Spotify before you could only sign up for a, a Spotify account on their website.

The difference there was that you couldn't, they couldn't advertise that you can sign up on the website basically, if, if, if you'd ever seen it. It was basically you get to their account signup page in the app. It's like, I can't, we can't do anything here. Sorry, that's just the rule. You go to our website, but they couldn't link to it.

In that case, for reader apps, we're seeing the only using web payments is still the case. So that's the first model. But now they can advertise it in the app itself, right? So like on Kindle's app, you can click a link, go make a purchase on Amazon, you know, on their app or on amazon.com of the Kindle content.

It'll come back in the, the Kindle app itself. Now, you couldn't do that before. Same thing with Spotify, like you can now see in the app itself, they advertise the different sort of subscription tiers that they, they offer and you click that and you go and make a checkout on web. So again, in that case, it's providing a lot broader visibility.

But the difference there is users already knew they could only buy it if they went to a website. So it just kind of reduces the friction. The other two models that I think we are seeing that are, are most likely to be, I think the popular sort of operating model for, for games are what we call a hybrid.

And the, the third is we call user choice, which is basically what Google used to call this, user choice billing. User choice is what, if you've seen with Fortnite back in the app store, now what they're doing, which is providing the user the choice for any purchase of either making in-app purchase, through Apple's billing system or to.

A purchase on Epic's website with Epic Pay or Epic Checkout, and they're going, in that case, they're offering 20%. Cashback rewards. So the idea there is, we, we want to, there's a lot getting into like pricing and discounting psychology, just like in retail. But in their case, they want to give a, the player a reason to go, like a positive reason to go and make a purchase through their channel, and also kind of have a credit there for them to use for that next purchase too, which we think is the, probably the most right model depending on what your, your catalog is and, and what you sell.

And then the hybrid model is, we're seeing a lot pushing this out right now. Some of our partners included where they will have in the game itself, um, their store of their Evergreen offers. Those are typically, and those will be purchasable within in-app purchases going forward. So think of the types of items you would buy as an impulse purchase, right?

Just like you would, especially for a casual game or a lower price point purchase, because 30% of 99 cents or 9, 9 9 is a lot better than 30% of 249 for like a larger offer pack. And then they'll have a secondary store in the game. That is sort of the exclusive offers, and those are only purchasable through web checkout.

And again, you can layer on incentives like cashback or credit back or discounts or extra value, whatever it is. But having both of those alongside one another in the game, allows you to refresh them over time. But also the players always know that I go to this one if I want this and I go to the other if I want sort of, you know, more value on a web checkout itself.

So that's sort of what we're seeing so far.

Devin: So I'm curious about a few things like, and we'll definitely get more into the detail of like how game developers should think about this, but one thing that kinda stands out to me is obviously, you know, I'm sure this is the kind of thing Apple would argue is around convening to these purchases.

And so for example, obviously, you, you pretty much have an app store account, basically have to have a credit card on file, right? So the, to actually be able to make even download free stuff, you had to basically, so they already kind of have that in their system. Also part of the, you know, country restrictions and stuff like that.

So it makes it a lot easier right. In the payment flow because you could just purchase and like, one of those ways is, you know, authorizing with a, a fingerprint, right? Or Yeah, I think face ID as well. I'm not, I'm not a Apple owner, so I don't know what the current status is, but that's something that's, that could be very convenient.

Obviously it could be convenient potentially for, you know, other people making purchases on your phone that you, that probably shouldn't be like kids and things like that, but mm-hmm. That is like a very easy payment flow, whereas it seems like that might be difficult to achieve that same level, say first time purchasers, right?

When they go to these external payment flow, they're going to have to provide that information and new, very likely. Then there's gotta be some, I imagine some way to retain that for future purchases. And that's gonna be different per game, right? So every game that does that, they might have to provide that differently depending on if the payment provider is, you know, the same and might sort.

Again, I'm not sure what the current landscape is 'cause it's changing very rapidly.

Chris: Yeah.

Devin: But these are, these are problems that I imagine are gonna have to be dealt with and you're, I seriously doubt you're gonna be able to authorize, say, with a fingerprint, or a face ID to be able to make that purchase.

Right? Yep. Yeah. Even in the future where you, let's say you have that credit card information stored, you don't have the extra layer perhaps, of security. And again, I'm not arguing for Apple, I'm just saying that these are Sure. No different points of friction that people might run into in making this switchover and yeah, I mean, are, there's some ways to think about that. you know, just a hundred percent.

Chris: A hundred percent. So the, you, you, you are right. And there, there's a couple of things. App stores are not going anywhere, right? Like making in-app purchases on any platform has a level of convenience.

I, I, I worked there. I understand as a, you know, a part of the Apple Pay experience itself, like that, that is an insurmountably high sort of convenience factor of having inbuilt embedded payment systems to every platform. PC platforms, console platforms, they, they could use some improvement on their checkout products.

But with Apple and Google in particular, you're, you're never going to completely reach parody on the convenience, but you can get quite close. So, but, so the story of this has been from the very beginning about friction. It's been about trust and about friction. Those things are obviously related.

So the first question before all of the in-app linking and messaging was possible as of a month ago, the question is still the same. How do we, how do we provide the player as frictionless and experience as possible? Not only about learning about, you know, that we have in a web store, but when we get them to the web store, how do we log them in seamlessly?

There's a lot of friction filled experiences still out there right now where people are being forced to copy and paste the player ID that they didn't even know they had in the game to like log into a store that kills conversion. The navigation of the store itself, is it intuitive? Is it easy to find?

Is it clear? And then of course, a checkout, right? So checkout, this is a very well worn space in most other industries, but certainly in e-commerce and retail, which is where a lot of our time is. Our, our team has spent time prior to neon and exactly to your point, checkout has to be as high converting as possible.

So then the question is how do you do that? There, there's a, a few things. First, the question of conversion has a lot of elements to it. You can think about it as a few variables. First, you have the breadth of payment options available that a player might want to use to make a purchase. If you don't, they might not convert.

So that's really important for a, a business like us to have as, as broad and as deep a support of payment methods, global payment methods, local wallets. They're very hard to come by and integrate unless you have sort of relationships there, et cetera, because different people pay in different ways in different parts of the world.

The second is for those card payments, to your point where it might, you, you wanna make that an option for players, but if it's asking them to re-input their card details, how do you make that as seamless as possible? There's easy ways of doing that too. I mean, a lot of people have their card details already stored in their Safari browser or their Chrome browser.

So you can autopopulate that for the first time., For a publisher, if you're not gonna build this stuff internally, you need to make sure your partner is PCI compliant, which is the payment card industry standard that we have to be compliant within in order to save that card information for second time, like one click purchase.

But you wanna make that as seamless as possible as well. And then the third is we still support Apple Pay. We support Google Pay and PayPal and other sort of one click, checkout wallets on our web checkout and our, our web stores. So even when you get there, that's still a familiar wallet and it's still a one click purchase, even if it isn't in the game itself, right?

If and until that opens up. But all of that, it, it's, it's a part of the, the broader arc around end-to-end conversion of an e-commerce experience that now you can drive from directly in the game and collapse some of those friction points to basically the checkout itself. While I'd say maybe the last point on conversion is giving the player a clear reason why they should use this web checkout.

And we've seen a lot of mistakes over the last like couple weeks where, uh, you know, some developers would just kinda like jam a, you know, buy a buy button in the game now, to, to redirect them to make a purchase on the browser, but they're not converting. But they don't know why, why would I do this?

Why are you forcing me to do this? Why wouldn't you at least tell me like, am I gonna get more value there? Am I get, you know, cash back, et cetera. That is certainly a critical component to this whole conversion funnel as well.

Devin: In general, like wouldn't consumers are asking like, what's in this for me? Like this case, how does this help me?

Like outside of the epic thing, which is obviously like they're trying to do the cash back in general, like, why should consumers care about this? Yeah. Why does this benefit them when they're having to go through extra hurdles potentially?

Chris: Yeah. So it's, that's such a fascinating question because I think.

A little bit of our sort of like advising with our current partners and, and others that, you know, that we're, we're in conversations with. It kind of boils down to you have to implement irrespective of the, the endless unfolding of regulatory decisions. This, the, the dominoes will continue to fall. It's just a matter of how quickly and what they mean.

The, the point is you still need to be sort of first principles, thoughtful of your players' experience in the game, what you want them to know about this web channel, when they should go there, what it's for relative to the in-app purchases, et cetera. And like, just define that as a starting point, as sort of a blueprint from which you build in the experience itself.

And, and I think fundamental to that is, what, if anything, are you going to tell your players about why this thing is here now? In the early, early days of sort of web stores in 2021 and 2022, it was fascinating to see, you know, in Discord channels, for instance, you would like, you know, search web store and, and some of the bigger publishers are doing this just to see what players are talking about.

And across the board, we, we, we pulled a lot of this information and screenshots down. There's a lot of, like, gamers are very savvy people. They're very tech savvy people. They're very smart. They understand that there's some reason for this, but unless you tell them that you're just assuming. So we would see all this chatter.

It's like, well, why are they doing this? Well, apple takes too much money, and they're trying to save money. So it's like a cost saving thing. And you'd have somebody else chime in. Well, if, if they're saving money by me making a purchase through this, I should get something out of it. Why isn't it a better discount?

So you, you people are gonna create the story. Your players are gonna create the story unless you own the narrative. And it's a very simple narrative to own. Right? Like, this exists. The analogy I, I gave a lot early on for why we're doing what we're doing and, and sort of the bet that we're making is the same dynamic happened in retail vis-a-vis Amazon in the mid to late two thousands merchants sold on Amazon.

They took a very heavy commission on that. They did a lot for you. They own the consumer relationship. Consumer had their payment details on file with Amazon, et cetera. And it wasn't until things like Shopify and Stripe and Adie and all these sort of like enabling pieces of direct consumer commerce in that world came about that a merchant could now compliment Amazon distribution with their own first party channel.

But they had the same problem. Why? What do I tell my user, my, my consumer in that case, um, about my Shopify store? Versus Amazon, right? What do I want them to know about this relative to that? So that it can begin to sort of condition and habituate that that experience. The same is true here. You have to be intentional and thoughtful with your user.

Doesn't need to be like a massive investment, just a pop-up modal, right? Or like a banner on the store itself, or a banner in that, that like web exclusive store within your game. Like, why does this thing exist? And the the beautiful thing, is that for those that have told their players why like 30% is very expensive.

It, it's, it's not really sustainable for a business model. By using direct, you're supporting our business. They love that and they support it and like, as anyone would, because you really, for the most part, you really want the, the, the company that makes the game that you love so much. Successful. Right.

So it it's just about being intentional and, and the messaging being clear.

Devin: Yeah. I can imagine any messaging gaps where there's just not enough clarity on why it's happening. Just lead to conspiracy theories and especially players thinking, you know, always, always the first jump with any monetization is greed.

Right? Totally. The companies being greedy, they just wanna make more money. They're not gonna spend this on making the game better. They're probably gonna fire people and switch to ai, all those kind of like, that's right. Yeah. Right. Yeah. But I gotta imagine it's still hard to communicate whatever you wanna communicate to an audience that may not be reading, yeah.

Readily, right? Yeah. They may be like, into the gameplay. They don't want to read, I mean, obviously different audiences and all that, but that is a problem, right, where you have people skipping things, not wanting to read stuff, or, hey, it's, it is fault. Small font on a tiny screen., You know, where people just might skip it and it's like, are you gonna have to have like intro videos explaining it?

Are you Yeah. And all the different messaging channels you might have to put that on. You're talking about Discord. Okay. That's one thing. You've got a community manager maybe communicating that on there to like the five people that are actively reading. Yeah. And it's, it's gotta be like very fragmented and a situation where it's very easy for them to run into a situation where they just imagine what the, the truth is.

And you've got free to play players that love to brag about it and self justify it. And I gotta imagine that only fuels that, where they're like, oh, now the company wants this greedy thing where they're not taking a cut. Like, I was happy to give Apple by 30% 'cause they built this phone or whatever. And like, and now this company wants all my money and like, I'm gonna, I'm gonna be absolutely free to play now.

I'm totally not gonna spend a dime.

Chris: Yeah, yeah. No, you're right. I, I think, which is why just like, Amazon's not going anywhere, right? You're the, as you, as you run this forward, well, let me, let me go back to the retail case. If you look at how retail e-commerce has evolved over the last 15 years, basically, like since this advent of direct consumer really took hold for the, the, the businesses that have, , their first party, direct channel and continue to sell on,, Amazon, depending on how they, they've invested in those channels over the year, the, the revenue breakdown ends up being around 60 40, direct to third party, you know, direct to Amazon or 70 30, some even higher.

But the point there is. There's always going to be a consumer that only wants to make a purchase through Apple and Google and CM and Xbox. And there's certainly going to be a user that wants to make a purchase through your direct channel if there's a reason to do it. Right. And, and I think the same is true here.

Like as the dust settles, I think the, the same sort of composition of purchase volume from, you know, app stores versus direct channels over time might look similar and it might differ by the game and, and sort of their goals behind it. But I, I don't think you need to burden a, a user with, you gotta understand the inner workings of the Apple Epic trial to make a web purchase.

You just need to give them a reason and it has to be an incentive. Right. Which is why I think the, the, the, there's beauty and the simplicity of what Epic is doing with its 20% cash back. Right, like if, and that is a very, like I said, that's a very common expected sort of, , you know, use user pattern in a lot of other sort of industries and retail and otherwise where you're just gonna get more value if you make a purchase on the channel that costs, that, that publisher less to, to operate.

Devin: I mean, in general, I know it's been kind of short, you know, in terms of like the, the amount of time that's been since this, obviously people were doing web shops for a while anyways, you know, like I remember Supercell was even doing that pretty early on. , Overall though, you and the topic of incentives, which incentives have you seen, like from your perspective, work effectively or, or at least consistently enough that it's probably a good go-to, whether that be offering discounts or offering bonus gems when they make a purchase for, you know, for the same amount or loyalty points that they could spend in the shop or any of those strategies?

I've seen a whole breadth of strategies, like what is overall probably like people's default choice.

Chris: Yeah, yeah, yeah. So it's a, it's a great question and maybe it. Even more nuanced one that I'd contextualize it within, which is, basically back to, you have an opportunity now to introduce a new channel to your players.

What do you want them to know and think about it going forward, right? And the worst thing you can do is say nothing. You know, offer no reason. You know, no incentive. I, I would actually argue maybe like a, an even worse thing to do is to jerk them around, right? But the, the, the first question is, again, look at all the, the sort of case studies in retail.

If you only do discounts, you're going to condition your players to view your web store or your web checkout for only when I want things that are on sale, right? And this is, look at what's happened with steam people. Wait and wait and wait and wait and wait and buy a game until it goes on sale, right?

And, and this obviously, this happens. This happens all the time. So I think because this space is so nascent. We urge our publishers and our partners to be very thoughtful about, that's okay, that is a strategy, but you're going to set that strategy somewhat permanently, right? In-app, full price, web store discount.

Alternatively, to your point about sort of, we call it more value for money or extra value, which it could be the same price, but you're gonna get bonus gems or an exclusive item or a bundle that has something that you can't get in game in addition to having like exclusive items on the web store itself, I think of that as a, a more sustainable, like long-term approach is saying, I'm always gonna pay the same thing, but I'm gonna get more there.

And not just more in terms of my dollar, you know, will go further, but there's going to be things, items, bundles, offers, et cetera, that I just can't get in game. And that's a different framing for your user versus this is just a, like the on sale rack in a way. Then you could layer on top of those. You think of those as like the two primitives discounts or more value.

Then you layer on top of those things, what we think is habitation drivers, right? Loyalty points or cashback things that are increasing the lock-in, in the publisher's view of like the, you know, having you spend that on that channel more, more consistently, habitually over time. But for the player too, you want that lock-in.

You want to, if I'm accumulating like a cashback balance. Through my Epic checkout, for instance, and I know that my dollar will go further. Going back to the two models on that, on that store, then, great. Right. That's a, that's a very different sort of framing of the web channel again, versus just discounting or not getting loyalty back for it.

So we think of it as it's not either or. It's, you know, you, you, you need to think about it based on the type of offers, the type of sort of user psychology that you want to sort of, reinforce early and then layer on top of that decision, these accelerators, these habituation drivers like loyalty points.

And otherwise, I think the, the questions that we still have are, again, as you run this forward, what will it look like? With things like loyalty, you know, will, will there be, and we've spent a lot of time with publishers going through exactly this exercise. Like, will a player want, um, publisher wide loyalty?

Think of like take two points or Zynga points that are redeemable and, and, and sort of transferable across the portfolio games or. Is it something that is only loyalty points for that game itself, but maybe it's in the form of hard currency that lands in my, in-game balance that I can use in the game itself.

Or maybe it's not, maybe it's something I can only use on the, on the site itself. We support all of those things. We support every permutation of loyalty that a publisher might want to have or experiment with, including cashback, including, you know, various types of points and, and incentives back in that way.

But I think this is gonna be the interesting sort of balance between what is going to be more player friendly, right? Like, I might want something that is game agnostic, right? As Google Play points, for instance. Or, or publisher focus is saying, no, I just want to increase the lock-in for my specific game.

Every game has its own p and l, right? So it's like, maybe I don't even wanna offer the, the loyalty system beyond the game itself. So I'm sure we'll see a bunch of different models. We support a few today. I don't think there's any one right answer just yet.

Devin: Yeah, I find the, the loyalty points are sort of cashback ones particularly interesting because like, so for example, like personally, like, so I will play Marvel Snap on both my phone and my computer.

Yep. But I'll find that because of the Google Play points, I'll get back often I wanna make the purchase on my, on my phone because Steam doesn't offer anything like that. Right, exactly. And so you end up a situation where you're like, well log in my phone real quick, make the purchase, come back to Steam.

And that sometimes is enough friction where I'll be like, Hmm, maybe I won't, maybe I'll, it is a small purchase, I'll just make the purchase there because, but those do add up fairly quickly for the Google Play points. Yeah. And it's, yes, sometimes those will get spent in a different game, but those do totally, you know, those do become like actual dollar value and so there is some serious incentive there.

I, I wonder though, if you end up in situations where, and, and lemme know if you've seen this across anyone where they're just willing to go the sort of nuclear option, say we will just take out any Apple payment systems and we'll just say they can only pay and we've got enough traction with our consumers willing to make purchases that they will.

It'll be a little bump in the road, but we'll retrain them. And they're so habitual about buying anyways that we just will retrain them slightly in, into using this and we won't have to worry about that anymore because they will just always use our, maybe they give sweeteners, maybe they don't. But in that situation, yeah.

Like, have you seen people doing that?

Chris: So again, I think the only ones for which this is ex only apps for which that option is sort of explicitly permitted, are reader apps because they've already had this carve out right? Where they, they didn't have to include the in-app billing systems before. It is not yet explicit, and I would be surprised if it really ever is for every other type of app category that you can fully deprecate.

Apple's, you know, in app purchase or Google's in app purchase billing system in favor of your own that might happen. But I, I don't know that it would, I personally would have the concern to your earlier point around, there's just going to always be a demographic of users or players that's more comfortable purchasing through Apple's billing system.

So to fully deprecate that, especially if they've been used to it there, a lot of these like forever games, a lot of common patterns and sort of like comfort with that, that billing system, your cards on file, et cetera. I think pulling that out might actually be pretty detrimental if it's even possible in the future.

But on the other hand, to your point, if, you know, if we, if we imagine a game for which it is fully cross-platform. And they, you know, imagine they'd want to deprecate every app source billing system, and the only way you can make a purchase is through their own web channel. Then I think you, yeah, you funnel everybody to one place and you give them the incentive to do so.

But it's always gonna have to be experimented with and weighed against. Like, what, what am I giving up by like, cutting that system out altogether? I don't think that's gonna be, you know, at least as far as I can prognosticate on this stuff, like, I don't think that's gonna be something that the platforms are forced to allow a game to fully deprecate their billing system versus if the spirit of all of this is giving users choice.

Right. Well then that's not giving them a choice either, right? It's like the only way to make a purchase is through our billing system. So who knows? We'll see.

Devin: I suppose the gray area that, that I'd be considering is whether or not you can offer exclusive items that are only web shop holding, right.

Where that's Yeah. App, you know, does, in that case, does Apple look at that as like, Hey, you're not offering them a choice. You're not really, you know, going with the, the sort of spirit of this thing and you know it, 'cause obviously from the game site it's like, hey, we're just trying to give them an incentive.

Something cool you can only get here. But it's like, do we have to make that free then in order to be sort of playing by the rules? Or if you, hey, it's a loyalty bonus that you get as part of a purchase from here. Well now that technically isn't exclusive that you're getting from here, but you're not purchasing it directly and there's that sort whole sort of gray area.

Definitely. And I imagine we'll see people experiment with, but I was just kinda curious like, because obviously, you know, some people will go much further in the direction than others.

Chris: Yeah. So the, the gray area is the, is the, is the key. And, you know, apple, any app store their, any platform and their legal team and their PR team, like, they know that when things are not explicit.

You, you, you bring the, the questions will be thought of by the developer. Well, if it doesn't say I can, what's gonna happen if I do it right? And, and you're bringing up a couple of points that we're, we're consistently sort of speaking through with our publishers about as well, which are the first is price parody.

Does everything I have on my web store have to be exactly the same price as what's offered in app? And then the second is around content availability or exclusivity. Same thing. Does everything I sell in the app store have to be available on the web store and vice versa? Everything I have on the web store available on the, you know, within the app or not.

The, the first one around pricing is a, it is a legal term, which is known as most favored nation. Because what it really means is, and Apple used to have this in their developer agreement, it, what it really means is the, a user can, the, the best possible price a user can get is gonna be available through.

On the app store, and therefore it's setting the price everywhere else. You can't do that. That is like an antitrust, massive antitrust red flag. Most favored nation is, is forcing any supplier to lock in a price for a platform that, would stifle competition. Walmart got in a lot of trouble with this over the years, if you remember their tagline being like, everyday low prices.

Devin: Right, right. There's a, that with, with, with pharmaceuticals as well a guy. That right now in the US politics.

Chris: A hundred percent. Exactly right. And so that is, it is a common misconception, not only because this used to be present in the Apple developer agreement, but it's not explicitly not there anymore either.

Right. But the, the reality is you can have different prices on your web store or you can have artificially different prices by doing what we mentioned earlier, which is providing a discount, providing cash back, or providing extra value for that purchase. Right. Even if you wanna keep the dollar amount the same.

And then the same is true of the content stuff, right? The, a lot of our partners and a lot of. Publishers that, that we don't work with today have exclusive offers on their web store. They, they might have those as purchasable offers. They might have them, to your point, as free claims. But the either way, the point is you can have different items on your web store at different prices with different discount schemes or value schemes applied to them, different from what's in the app store itself.

Devin: Yeah, you bring up, bring up an interesting question with the, the most value, favorite nation sort of thing is obviously like, you know, when it comes to like steam as an example you brought up earlier, there's all kinds of price disparity with different countries. You get people trying to take advantage of that.

Totally. All kinds of ways. This ruling is this applying to the US only? How does this apply broadly? Because obviously most games often exist outside of just this, I know EU has its own whole thing with the digital markets thing. That is a big deal. Yep. How does this ruling affect anything outside of the us?

Chris: Yeah, so for now it's just the us, which though happens to be the largest, if not second largest market for every game in terms of their, their monetization or their revenue and their user base. But it is just for the us However, like if you step back., And zoom, zoom back to when all of these things started, not even just Apple, Epic versus Apple, even like Spotify's litigation against the app store and all the litigation against the platforms in the nineties for the same reason.

The, the point is the, the dominoes are falling. There has been no decision that has been reversed over the past several years, right? It's just a question of how far reaching, right? Not only geographically, but other platforms. What restrictions or frictions come with the decision? Like the 17% commission that you're owning Apple right now for out of app purchases in the EU or the 27% before here in the us the runtime fee and things like that.

So the question's like what, what, how pervasive is, is this ruling, what frictions are coming with this ruling? And then how fast will things evolve from here? Right? So our view, obviously because we founded a business around this thesis is that it is just a matter of time. It will take time, but it is just a matter of time before we reach a sort of a market structure where you can do, as is available in the US now freely steering your users through external channels globally.

It's gonna take time for that to happen, but we think this is sort of the real precedent what's happening in the DMA right now in EU. Yeah, apple is just fined 500 million Euro for being outta compliance meta 200, 250 million euro for, for the same thing around what the DMA was, uh, sort of asking or demanding them both to do, including the steering.

Right. So back to the messaging and linking from the app itself. Apple, I think as of today, they have 30 days left to comply 60 from the infraction, and all the experts sort of indicate that given this ruling in the US , that precedent will likely be the same thing that follows with the EU. So if you imagine a world where you can link to your web checkout or embed those buy now buttons in your game or message and advertise the availability of your web store within your game in the US and the EU. That's a massive portion of this market. Japan, Korea, those two, the Netherlands of course being part, but like those, those two have had a lot of, antitrust litigation around these things as well, both with Apple and Google over the years.

Far more severe in, in some cases, like you can enable in-app payment methods, I think in both Japan and Korea now, but still the, the, the 27% of the punitive fees are still there. But I think it's, again, our view is the doors open and it's open to varying degrees in varying countries or regions. But as these precedents now are set, it's more likely that the other regulating bodies in these countries will try to enforce the exact same thing.

So the, the reason that this is important, apart from the obvious, is that there's no way to know for sure. If you're a game studio game publisher, the question is, what do I do for knowing that? I don't know how this is gonna unfold, but looking back, you know, dots connecting backwards. You can see where it's likely to go.

You can see where it is right now. Then what do I do? And a lot of our time is spent, you know, our team comes equally from mobile games and FinTech and e-commerce. We have this like really great mix of folks who've built a lot of these, these products and these best practices before. But a lot of our time is spent advising on exactly that, right?

Like the, the dominoes are falling. It's just a matter of how quickly you need to be thoughtful and intentional about how are you going to introduce this web channel, this, this alternative channel to your players everywhere, right? So in, in the US now, you can do it in the app, but as has been the case before, everywhere else, you can still do it.

How do you do it outside of the app? Then if these, these, these rulings sort of follow suit in the eu, now how are you going to migrate that experience in your game like you have done or are doing now in the us Right? It doesn't need, like I mentioned earlier, it, it doesn't need to be overly scientific.

It just shouldn't require like a complete rebuild of your game at all. It just being very thoughtful and like empathetic of that user experience as these things unfold and having a plan.

Devin: Yeah, it's definitely gonna be, I mean obviously this is still fresh, so we'll see how this develops, but as you said, it tends to be dominoes falling, which means it tends to keep rolling in this direction.

Right. And I do kind of wonder if we might see a point where there could be an app level integration, let's say, you know, what you or one of your competitors integrated at the app level so that people aren't having to go to a website. It's more just like almost as convenient as the built-in Apple stuff.

Right? Totally. Where I can't imagine Apple wanting that situation, but I could see, you know, maybe stepping that direction. But, but, but moving forward in terms of, you know, thinking about game developers. Does this apply equally in terms of like, you know, diving into this stuff, exploring it, trying to probably incorporate this stuff across all game genres, across all types of game developers?

Like is there anyone that should be thinking about this differently or should everyone kind of be considering this the same way?

Chris: I, 60 days ago, 30 days ago, if you asked me that question, I would say, it, it is most, has the most like coherent or strong fit with core and casino games. And that's indeed who has been doing this for quite some time now to, varying degrees, some very successfully moving 40, 50, 60, 60 plus percent of their gross revenue through their direct channel.

But within those core and ca and casino genres, the, the question has always been,, a what about. More casual games or hyper casual games, especially those that, I mean, there's gonna be a swath of games, at least for now, that only monetize your ads. That of course this isn't really gonna make sense. I would argue it's actually worth testing.

Now, if you can see if people have a willingness to pay by giving them an incentive and a reward by doing it in, in through browser checkout, even for those games. But the question has always been a, is it applied to casual games? And B, what about smaller publishers or like smaller studios where they either may not be generating a ton of revenue today, or they might actually be under that small business minimum with Apple where they're paying 15% instead of 30.

So our view now is that it is relevant for every game. And, and it is relevant for even smaller games because one of the big talk about friction points, you know, before was, and call it web shops, we'll call it 2.0 was how do I drive awareness? Like I said, like, do, do you have an external channel? Do you have a community aggregating elsewhere that you can market to?

And for small games, resource constrained games, they may not or they may not have a community manager, like you said, that it's staffed on doing that. So as the sort of like activation energy for driving awareness and traffic to this web channel has collapsed, in least in the US, a small studio might benefit from doing it.

And it's worth trying, especially if the cost, you know, between that 15% and what, what you would pay, you know, a provider like us to, as a merchant of record, you know, even if it's a 5% or, or six, seven, 8% delta still worthwhile. I mean, of course most of that money is being cycled back into UA, but every little bit counts, especially I think in this, this industry environment right now.

And then for casual games, definitely, like some of ours are already doing this. They've already been doing it before, and I think the, the appetite has grown tremendously because of exactly that reason. I don't have a, a preponderance of my players hanging out in a Discord channel for a casual game. But now I can drive awareness in the app itself.

I can drive a direct checkout in the app itself, but also continue to maintain those impulse purchases that we all know is like what drives so much of the spend for a casual game to, to support or to be enabled with in-app purchases, you know, apple billing system. It, it doesn't need to be either or.

It's, like I said earlier, the, the model and having a hybrid is probably the best approach for a casual game. As you said, it's, it is still early. We are seeing a lot of very positive results already with a couple of our, our game teams and what they've done in terms of just incorporating in-app messages.

I think it was 140% increase in like 24 hours of traffic going to the web store just by exposing this in the app itself, which is not only a great signal for how we built the product and enabled these sort of things, but it, it's a validating point that players actually do want choice. They do want to go there.

We're not forcing them to go there. They, they wanna go there and make the purchase. Exactly. Exactly. Because they're getting a benefit from it. So yeah, I, I, I think we're, we're sort of monitoring and advising and influencing a lot of this sort of strategic direction on how to implement these by genre.

But it's all very exciting. The, the, my favorite quote over the last 30 days, very large publisher, was, , they said that it, since the ruling, it's the most excited and energized this company has been in my time at this business, which is so cool. Like, you know, it's like. There's, I'm sure there's a lot of frenetic energy there, like what do we do reactive wise, but like, what a cool thing to happen to an entire industry where before you had one way of operating and monetizing and now you have a lot more control. Like, what an exciting thing.

Devin: Well, given the state of the industry, the timing probably couldn't be better. Totally. Some good news.  But on the topic of like, you know, people being excited and, and needing to know kind of where to start what are the things that people kind of need to keep in mind?

Like, what are the, like, you, you gotta do it this way, you gotta keep this in mind. Like, don't just jump into the deep end and drown immediately. What do you need to do? Like what are the kinda the first steps and sort of the musts?

Chris: Yeah. I, I started my career in management consulting for better or worse.

So I find myself like defaulting to this, this failing mode sometimes around exactly this type of question. Like, how would we advise or consult partners on this opportunity? And, and, and that is informed by the, you know. Myriad of, of relationships and conversations we've had over the years where we're learning from them as well.

But I would say there's a lot of common sort of like steps. The, the first is I, I would implore every studio or publisher to anoint a person as responsible for, you know, maybe don't need owning this thing for the entire business, you know, permanently, but like owning this initiative, and empowering them.

To basically figure out the landscape of providers, understand the, the question around what are we going to build internally to enable this, versus we're gonna partner or we're gonna test, you know, before we invest in them. What are the right, uh, sort of to your earlier questions, what are the lessons to learned from other games that have done this well, not well.

The beautiful thing about this industry is, I think as, as competitive as everybody is, everybody's very willing to, to speak with each other and share their best practices, but you need to have an owner. I think one of the more challenging things is when that ownership, I mean, this is just true in anything, organizational dynamics, right?

But the, the ownership is like. Unclear or shared or distributed across a game lead or a finance person or a BD person or your performance marketing lead, or your accounting lead, whatever, you end up spinning your wheels and not really making progress. So I'd say step one, pick the senior most person, you know, that has I think a broad purview in the organization and like task that person with running point on direct consumer.

The second is to be, as we talked about earlier, layout, forget the regulatory stuff, right? Like you can have a web store that's, that is true everywhere. It's about can I market it in the app or not right now. So lay out that user journey for the first time. User experience, even the player that just downloaded the game that you freshly acquired.

What do you want to message them, if anything, about your web channel in those two sort of regions where you can do it in app and where you can't? And then just map the user journey from there. What, what do we, you should, I mean, in our case, we talk to a lot of our publishers users for them about, do they prefer discounts To your earlier question, they prefer more value, they prefer cash back, but, you know, doing a little bit of work, it shouldn't be an extensive amount of work.

And we partner with our, our studios to, to kind of do this with them to kind of just put a strategy in place. What is your choice for how you're going to have web and in-app purchases in those two models where you can market in app and not. And then I think it's just reinforcing it, deepening that integration right within each game, teams live ops system with where their backend is and their player segments live so that that experience for the player is consistent, right?

And what I mean by that is if you have a disjointed web store or a web store that's disconnected from your in game experience or client experience. A player could get there, it can be completely non-personalized and it, you might present something to me on the web store that I shouldn't, I shouldn't be able to buy, right?

There might be like a limitation. You can only buy one of these things in the game, or I already bought it. But I think more importantly, the ability to personalize that experience and target that the right offer to the right player at the right time, um, based on in-game progression or their prior purchase history or all of the other sort of metadata that publishers use, and we enable them to target and personalize that web store experience.

With that comes with a deeper integration. So the, the, there's a bit of a crawl, walk, run that we always advise, but it starts with who's gonna be the person and what's the plan, right? And let's come up with the plan, and then we can advance our way into exposing to more of your audience different segments, deepening the integration, broadening your geographic coverage, if that's important to you. But it's an iterative process for sure.

Devin: Well, given the, the geographic nature too, I also wonder then, okay, you've got all this strategy in place, you've got your messaging flow, you've got all this figured out. Then how do you handle the situations where, okay, this is a US ruling, apple probably isn't gonna let me do this in other countries.

Are you then having to go, okay, well I, I just don't wanna expose those, those areas in the app. Suddenly I've gotta like worry about my messaging flow for different versions of the app in different countries. Totally. But then I also gotta consider, am I still gonna allow those people to, if they stumble on the website, still make the web shop purchases, I just can't steer them to it in the app yet, and those kinds of things.

Like how are you generally thinking about that strategy?

Chris: I, I would say that is a part of the strategic question, which is, again, going back to there's, there's the, if you carve up the entire world right now, there is one market where I can freely steer and link from an app. So the, the, the messaging and the marketing question is different.

And, and it obviously easier now in the US but there's still a question around, well, can I do that? Do does my game build right now have the ability to target messaging to users in the US only, right? Like some do and some don't. So I would like very high on our list of sort of advice here is like build that ability and it's not, it's not a heavy lift.

We, we've got games that have been around for quite some time and they built it and are in the process of building that now. But that is a requirement, right? If you're going to bifurcate your user base and your messaging strategy based on where you can and can't do things in app, we need to have that ability.

But for everywhere else, to your question, well, that's how it's always been, right? Or it's always been, it's how it's been for the past few years where you still have to find out how am I going to drive traffic to that store if I can't use it in-app real estate there, there's a lot of strategies there.

Like that's where the playbooks, not that these things are sort of like permanent at this point, but that's where the playbooks have been built. Like we have built ours there over the years, where you can do retargeting on, you know, the UA channels. You already have to specifically message and, and market that web store, right?

You can of course capture email, you can capture SMS, you can do direct marketing. There's social channels you can market through, or social messaging channels you can market through as well. But then the standard stuff around discord and um. And Facebook and other community groups are, are always gonna be there.

I think the, the, the 2 0 1 or the 3 0 1 level question is how do I drive more virality of marketing in that segment, which is, how can I get my players to be an, a sort of a champion for an ambassador for the existence of this web store and giving them things like promo codes to do so, which we've enabled, right?

So we, we can allow you to give a player a promo code to try to drive traffic to the store, right? So how do you use your own user base as a marketing channel in places where you can't use in app real estate? But to your question specifically, yeah. It, it does come down to what are my technical requirements to enable different messaging and linking strategies in different parts of the world as more and more come online and allow me to do so.

Devin: I imagine you might even have to consider that in your localization strategy. Like let's say for example, you have a newsfeed in the game, as many games do with LiveOps, some kind where you've got popups or announcements. You have to be careful about linking to that stuff within those, in a situation where let's say you go to, you know, just translate that to another country.

Oops. That country doesn't allow for that. Now I've gotta consider, okay, my localization, I now have to consider is there any messaging in here that could be considered steering? Yeah. But on the other topic, you did pre present an interesting idea around the variety aspect, which is, you look at, content creators and for example, like the way Supercell does creator codes.

Yeah. As a way to sort of, and I know there's different services that can enable those sorts of creator code functionalities, things like that, that are really cool. I could see now some, some even more emphasis on using creators to then directly link, say from a YouTube video or whatever it is to the web shop.

With the, with the sort of creator code built in as a way to do that. Maybe even in game if you're featuring some games, even feature creator content in game. Yep. Using those to link, link with that, with that coupon code that you're sort of talking about. And that has its own promo attached to its own bonuses.

Yep. Or things like that. There's definitely some, I think, some room for some creativity here. And that's why I wanted to explore that kind of gray area. Because that's where you're like, okay, how creative can I get in here? Right. How, how much can I deal with that? And then, like I said, the localization, all those other little gotchas that I imagine people gonna have to work, watch out for, which is why, you know, it's, it's important that you, like you said, having someone that takes point on that, that could be aware of those gotchas.

Hopefully you could speak to people like yourself, your company, others that that can sort of advise on. Hopefully they can present like, here's what we're thinking about doing. Can we do that? And everyone kind of like all your, I, I imagine yourself and a lot of their competitors trying to stay as caught up on this legislation as possible because this affects, I imagine your business greatly.

Chris: Oh, yeah, yeah. You know, I mean, as you said.

Devin: You've been very busy. And, and I don't imagine that's a, just a coincidence.

Chris: So, yeah, it's, I mean, I, I am fascinated by this stuff. I think I must be in the vast minority of the world that's gone through the entire like Apple Epic evidence pile in the day, which is all public, and there's a lot of like great decks in there and, you know, for payments nerd about how they've done this stuff themselves.

But I love this. I mean, as you were talking about earlier, even the, the court ruling from the April 30th, it's just good reading. There's like a lot of great drama in there too. So yes, we, for our team at Neon, like. And the way that we hire, the way we've been building our culture, the way that it's been, been formed by a lot of our prior experiences at places like Supercell and Unity and Visa and Affirm and Square and others.

We have to be experts. You, you, we're not just a, widgets, we're not a SaaS tool like we are viewed by our publishers and our, our, our developers as a partner, sometimes an extension of their team. Right. And we have to be right, and we have to be relied on to not only be up to speed on what, what the regulatory environment here is in the US but everywhere else.

And also what does it mean in terms of payments, right? So I think our, our view is that from our strategy, payments is very hard. Global payments is really hard to do and really hard to do well, especially in an industry that's had, I think a lot of like legacy platforms and merchant record businesses that haven't always been acting.

In the best interest of their, of their partners and have like, kind of operate as a bit of a black box. Like we need to bring performance, transparency, control to what is a very co a complex problem in doing global payments and sales tax and compliance, uh, for our publisher. And we have to be experts in that too.

So I don't view it as, as sort of like a, an an additional part of the job, like it is a job. Okay. We have to be as well versed, you know, with some of us with jds, some of us not in the legal sphere as, as well as, you know, the network rules with the, the card issuers. And, and how to build like the highest reforming platform in the space, 'cause that's what it's gonna take.

Devin: Right. And of course you have to say it right, like, this isn't legal advice, but I try Oh yeah, yeah. It's not legal advice. Yeah, yeah, yeah, yeah. And I imagine this stuff gets a little more messy and we we're not gonna delve into it at all at this point. But, when you start to involve the Web3 aspects and the sort of policies around that, that, that are or aren't tied to the payment rails versus like going off and buying something, I imagine that gets really interesting and messy.

And like I imagine especially over the next few years that might, that whole landscape might change or not. Yeah. But on that topic, like obviously this is going on right now, it's rapidly changing, dominoes are falling outside of just the immediate effects that you see happening in this sort of like rolling out and opening this crack wider.

What do you see as the future of this stuff? Like where, where are we going more broadly? Especially the stuff that might be exciting or controversial Yeah. Around whether it be payment systems or just monetization in general and games. Where do you see this going? What, what will be interesting in the next two to three years?

Chris: I think that the, the, the, like the. Biggest or most macro way to ask the question is how is what's happening? Some, not really, but somewhat localized to the games industry. What does that mean for digital marketplace platforms globally writ large? Right? Like, , there, there had always been sort of a, a, a concern that, well, just because this happens to Apple and Google given their scale and their install base is so broad and et cetera, and they're so well, you know, powerful and, and profitable, et cetera,, well, doesn't mean it's gonna happen to consoles and their app stores, or it doesn't mean it's gonna, or, or Steam, right?

It, it doesn't because those are specialized devices and they lose money on the hardware. They gotta make 'em stop. But there's always been like a Yeah, but it's okay for them. And in some cases, like, I kind of take a bit of a neutral stance there. But I think the question is, as these precedents continue to be set, by the way.

For now, irrespective of the administration in charge here, what does it mean for every other digital marketplace in the world? Right? And will, will this precedent carry forth to all of them? I find it, or, or I, I was, I was sort of like very skeptical about the ability to link to an external payments channel within, you know, within a game or an app in the US because I likened it to, if Amazon was forced to allow their sellers to have a URL on their product page, Amazon product page.

Like, no, no, no, don't buy here, go buy it on like allbirds.com. I can't imagine, you know, Amazon, whatever, be forced to do something like that. But now that this is happening with digital goods, it could, right? I don't know. But that, to me, it's like, if someone were asking the biggest version of this question, it's to what extent will these rulings and these decisions impact other digital platforms within games and outside of games over the next several years?

I think for the, the, the zooming in on games itself, and this is a little bit of like the, the, I don't know, cautionary tale. I, I might tell, or, or maybe ask that the industry be thinking about is if, if two, if the two big parts of this structure before have been and continue to be the, the sort of unreasonably high fees around the app stores and 30%, et cetera, but also not being able to own your player relationship directly.

You have to do both and you have to do both Well for this to have a lasting structural change in three to five years, what I mean by that is if all you do today is recoup your costs or, or some fraction of your costs, you know, on, on web purchases versus the app store, that money, you're going to then just turn around and cycle back into Apple.

App 11 or any know any other UA channel because they still have the player network, right? So that's not really changing the dynamic. It's just moving money, right? It's like a wealth transfer from, from Apple to the US. The UA business isn't, in fact, you see it in the stock prices increasing some of the last month.

So the question that we, we ask ourselves, and we certainly encourage our publishers to think through with us, is, well, how do you prevent that outcome, right? In three to four years or faster? How do you actually own your player network doing so more intentionally so that this actually is a different market in three or four years?

Right? And that's the bigger question, right? So I, I don't know. I, I think that there's a lot of capabilities that have to be in place that a business to, to actually own that relationship and do it well. I would argue that there's some tension there between what, what the player might want and what the publisher might want.

Just take the loyalty points thing we're talking about as an example. They wanna lock you into one game. Players want something that's sort of industry wide, like a currency that might be industry wide usable. So I think there, there needs to be more thought put into, well, what is going to be best for us and the entire industry versus, no, we gotta do everything where we all need to be our own walled garden now.

Right? I actually don't think that's gonna be, or affect the most lasting, beneficial, positive, sum outcome for this, this industry in light of the changes that have happened so far.

Devin: Yeah. It sounds like, I mean, it sounds like the broader theme overall, it outside of just this ruling outside of just gaming, is owning the customer relationship and your relationship with either customers or potential customers and how much that means, and I've heard that for the years over just like I remember blogs and hosting blogs and how much you needed to own email addresses.

Yeah. We've gone through that in games. Like you still can't get an email address from an Apple player without asking them explicitly for it because you can't just go through Apple.

Chris: You can't just totally go through Steam.

Devin: You can't just go through Amazon. All of these platforms. They wanna be the intermediary between you and the customer beyond just payment rails, right?

And this is like hundred percent this crack and then opening and you see that. You talk about Amazon. I see, you know, I purchase stuff and I get these little slips there. Hey, review us. Yeah, exactly. Or I get to this all the time. It's like, please don't return this. Contact us instead.

Chris: Or the Uber driver that says, Hey, next time book, here's my card.

Next time book me directly. Right?

Devin: Exactly. And so I feel like that's, maybe that's a broader theme in general because we've gone through this sort of last two decades of platformization on everything and now we're like kind of going. Is that really what we want? Because we want customer relationships.

We've got discord as a big part of it, or people are totally kind of partnering with Discord, looking as, as a way of how do we broaden this community. So exactly. I, I think going forward, that's the thing to probably keep an eye on. And this is just part of that obviously Apple is, is has their lawyers watching that closely because yeah, there's slowly losing ground think, but I mean, think how many millions of dollars it took to battle this to get it to that when this is like, Tim's like only victory outta that stuff.

Chris: A hundred million. A hundred million. I think that they, or so they, so they say they're invested so far. A hundred percent. Yeah. Yeah. They lost so much on.

Devin: It just to get this one anti steering victory. And I think, you know, now we get that cracks time to open it wide, but. We'll see. Right. It's, it's gonna be very interesting times.

Obviously, people are gonna need to keep, keep tabs on what's going on. So definitely, obviously, if you're interested in this stuff, make sure to, to contact Dion and, and, and see. It sounds like Chris, try to make sure he's on top of all that. It's definitely good for to talk to you, although you may have to talk to other people as he, he is, the CEO might be kind of busy as it sounds.

Chris: Hey, it's, it's the most fun part of my job. I, I would love to, you know, a any publisher, any studio that, that we work with, that we don't yet work with or work with somebody else like that, that's, that's why we do it. So please reach out neon pay.com. My email [email protected] anytime. Happy to help.

Devin: Of course, and we'll also link to his LinkedIn in the, the show notes if you wanna get ahold of him that way as well.

And definitely take advantage of that. Sounds like a lot of stuff moving very quickly as well. Best practices will shift as we go, so something to keep tabs on. But I wanna thank you, Chris, for, for joining me. Of course. A lot of great advice. So you, everyone listening, got some, some free advice from Chris, so definitely contact him for some more.

Thanks everyone for tuning in. Hopefully you got some good stuff outta this. Keep tabs on it because things will be changing quickly and hopefully for the best.

Chris: Yeah, thanks, Dev. Really appreciate making the time.

Devin: Awesome, man. Well, until next time, everyone have a great week.

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