In this episode, host Kalie Moore talks with David Lee, Co-founder & CEO of Nex, to unpack one of the rarest success stories in modern gaming: launching a new consumer console and winning. In a category dominated for decades by the same three players, Nex broke through by rethinking who gaming hardware is for. Often compared to Wii or Kinect, Nex’s real innovation isn’t motion-based play alone, but a family-first platform built around physical activity, kid safety, and parental trust. In a down year for console sales, Nex sold over 650,000 units, expanded into thousands of retail stores, and captured meaningful market share by designing specifically for families.

The conversation traces Nex’s nearly decade-long journey from mobile-first products to a high-stakes pivot into living-room hardware - and the leadership decisions required to make that leap under uncertainty. Kalie and David dig into why most motion-gaming platforms struggled to last, what Nex designed differently for long-term engagement, and how retail, subscriptions, and trusted IP shaped its growth. The episode closes with a look ahead to Nex’s 2026 roadmap, from international expansion to connected play designed with strict family controls, and David’s long-term vision for what Nex could mean to families ten or twenty years from now.

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.

Kalie: Welcome to the Naavik Gaming Podcast. I'm your host, Kalie Moore. Today's episode is about what it takes to break into one of the most unforgiving categories, consumer hardware. For more than two decades, the console market has been defined by the same three players, with very few newcomers managing to break through in any meaningful way.

And yet last year a startup focused on families with young kids quietly did just that. Nex Playground is often described as the modern successor to the Wii or Kinect, but that framing only captures part of the story. What makes Nex interesting isn't just motion based play, it's how the company rethought what gaming hardware is for, and what parents actually want from screen time, and in a year where console sales overall were down, Nex captured a meaningful share of US sales, expanded into thousands of retail stores and sold more than 650,000 units, all while positioning itself as kid-safe in a family-first platform.

My guest today is David Lee, who's the CEO and Co-founder of Nex. While Nex may look like an overnight success, it's actually the result of merely a decade of iteration pivots and some hard learned lessons along the way. Nex developed a very clear mission to be a force of good for families, combining physical play trusted IP in a business model built around long-term engagements.

Today, we're gonna talk about Nex’s origin story, the risks behind its biggest pivot, what it takes to launch a new console in today's market, and we're also gonna look ahead into what's coming next from international expansions into new forms of play and what David hopes next will mean to families 10 or 20 years from now.

It's my pleasure to welcome David Lee, CEO, and co-founder of Nex to the podcast.

David: Thanks for having me.

Kalie: Of course. So, I've known about you guys for a while, but I wanted to reach out after I saw a feature that you guys did in the Wall Street Journal, which detailed you selling 650,000 units last year, and I know everyone kind of thinks about you as an overnight success, but really, really came across in that article was how you've been building this for over a decade. Can you start by walking us through the original thesis behind Nex and how it evolved to where, where it is today?

David: Sure. Wow, it's been a long time. It starts with, I left Apple in 2017 and started Nex and at that time, you know, have been spending a decade in productivity applications. Just wanted to do something different. I like, I love basketball. So, the way I start, well, let's just do something. So, the, the, the first thing that we did was Home Court, a basketball stringing app.

And the mission at that time is quite simple. It's like, hey, we wanna do something that's useful and joyful for basketball players. So the mission at that time is utility and joy for basketball players. And as see as we continue to evolve, and COVID happened, and we find that we have more role to play, and even within, you know, basketball, we start, you know, doing something incredibly difficult, which is tracking basketball shots.

So, you set up a camera on the tripod pointing at a bus for court. The camera recognized the hoop, recognized the ball, recognized the, the, the line on the ground. And knowing, oh, there's somebody shoot the ball and trucking big miss, and trucking all these advanced statistics around it. So, this is the first thing we do, like spend two years on it, and unlocking pretty amazing technologies to make it happen.

And, and we say, Hey, this is great, but this is also very niche application. So, we begin expanding and check and take care of like other aspect of what the basketball players would need. Then, hey, we can track their triple, we can teach 'em how to triple ball well. We can track how they move the body.

We can check their like agility and, and create great activities that make that stringing boring stringing more fun. So this is basically, we have expanding home court app to, to you know, tracking you through the basketball, in the basketball court, tracking you triple or basketball tracking you, like just move and jump and do things where like, you know, during your footwork, that's actually how we get started.

And, and, and then pandemic happens. And we thought, wow, nobody played basketball now and then, you know, that, that, you know, the, the, the, the airport tank and the reverse happened. You know, we are, we have a really rival moment in Home Court, but the people coming in use Home Court are not basketball players.

They just want to have something fun to do when they also cannot really play outside. So, the part of Home Court app that getting the most traction is the, the interactive training games that don't require, even, don't require basketball. So, we say, okay, well, we take that out. We create an app called Active Arcade.

So, the mission of Active Arcade is to transform activity into play. So, like things that little bit boring things, a little bit more like, hey, how to move? But we, we, we make those thing games, and that's what Quest is to transform activity into play, make training, activities like more fun. So that's basically what Quest is.

And Quest went viral again. It's still in the pandemic. And what then happened is, we look at Quest numbers, like millions of downloads, hundreds of millions of play sessions, and we look at the retention numbers and we find that the retention number of iPad is three times the phone. And the, when we, when anyone connect the phone, it get to the tv.

Retention Nutanix. So just give, give a signal that we been for a wrong platform, that the beginning of us trying to get into TV and take on the mission to connect family and friends for active play. So that's multiple iteration, multiple pivot. But I think our mission stay remarkably consistent.

Kalie: Those are really amazing stats when you move to a bigger screen. So is that really where the transition, because both of the products before were mobile, right?

David: Mm-hmm. Yes. So, uh, Home Course are mobile because you cannot, you know, tell the what, what, what compute device you have to take to a basketball court. So, at that time, we start with the phone, and we are right at the beginning of, you know, on, on the Edge AI processing, you know, that was the time. 2018 was the time Apple, 10 x the processing power. To process, like do AI inference on the edge. So the what Morely call the Neural processing Unit, the NPU, Apple have another tablet for that, that time called Apple Neuro Engine. So that was the first time when like there's a real AI processing power on the phone.

So, we, we leveraged that to do on the edge AI processing so that when you take the phone, put it on the side of the possible court, it has a lot of processing power to understand what's going on in front of camera. We, we, we, we start in mobile and mobile, it's a great platform that is, has great processing power, really flexible.

So, we can do a lot there to start. And obviously when we now did figure out our consumer hardware, you know, when, while people wouldn't pay for $1,000 phone, like family may not willing to pay for $1,000 like a game console, right? So, we need to figure it out, like making the right trade off for the course and performance to create something that like, right at the right price point for families to adopt.

Kalie: And I wanna go back, because now I think in hindsight, it's such a tidy story, right? Of how you pivoted during COVID. But it must have been, it must have been incredibly stressful time because these were, these were huge pivots. What did it feel like while you were building on the fly? Did you immediately think that, of course, this is our, our next step? Like, was it one of those aha moments or was it scary along the way?

David: Oh, it's extremely scary. I give you a few like, you know, defining moment of nicks. So, when you keep building Home Court and we think, yeah, this will be great for all basketball players, and, and there's so many basketball players out there. Like we count 450 million basketball players worldwide. But if you kinda, you really go back to it, like how many people would take a phone, go to a basketball court and do shooting, shooting practice and be serious about like, you know, making every shots. That's actually very few people would think like that.

Very few people, very niche., You, we want, what we find is that hey, is the really the player who wanna play a next level basketball, you know, would wanna do this. Like the middle school kid wanna get into a high school team. The high school kids wanna go into college. So is, is pretty small audience.

And, and when we, when we talk to our users, talk to like, Hey, like, you know what, how many people are like you? And, and then when I find that, that I remember talk to a dad that have a, have a, have a daughter who love our app. Yeah. That's not any kids like her, as oh, okay, that we have with a very niche, serving a very niche audience.

When we kind of pivot into, hey, we should find our, our bigger application for what we created and say, Hey, we should apply to games. And there was moment that the whole engineering team, you know, sit down. And a lot of them Apple. So, when I left, like a bunch of, you know, apple engineers left with me.

And, you know, and then, hey, we, the, the best way to deliver better experience to our users is to basically use talent to, to make games and sit and is anyone have, make game before? Everybody shook their head. Okay. We start learning Unity today. So, this, the whole team just all of a sudden, you know what, let's commit to that. It was scary. It was, you know, we doing something that is, we have not done ever done before. It's scary, but it's also exciting. So, so those are some of those defining moments of like a whole, a room full of engineers.

Kalie: Just on the table went.

David: Let's do it.

Kalie: Now in the Wall Street Journal article, best of yours was quoted, which you often hear, I think from the best investors, is that they bet on you and the team and they knew whatever that you were going to do was going to be a success.

Do you feel most of the investors that you worked with were in that camp or were there a couple holdouts that thought entering the hardware market was insane?

David: Well, that's certainly, nearly everyone thing is insane. And, and you know, we have, we have some exchange with investor. How are you guys doing this?

But you know, instead, when you invest, when you invest, invest in a startup, you're actually trusting the founders to do the right thing and, and, you know what an investor can really do in the early stage, we still found funding for the market fit can only be providing advice and cheering on the sideline for the most part, really.

And obviously, you know, if, when, when the company need more resources, they may be the percent provide more resources, they may make introductions to help the startup as well. But, but at that time, when we kind of go in hard ways, it's extremely difficult to raise another round of funding.

It's just extremely difficult. We were a little bit lucky in given the COVID time when a number like, wow, there's a 40 times growth there and some of existing invest. Look at that growth and say, Hey, like, nothing grow like this and don't have a real product market fit somewhere. So go find it. So, at that was, I remember at a time, and, and I just tell, Hey, yeah, thank for the belief in us. I don't know how to make money with this yet, but I would try to find it. So that was the Nex Playground actually. Eventually, what is being, what was found at the end of that like growth and go to and kind of find something that actually a real meaningful partner market fit.

Because before, after active play, we tried doing motion mobile games, and it's do okay, but not really anything major attraction. Mobile is a wrong platform as we can find out in all our numbers. So, for us to really build deep relationship with the customers, to really serve them well, we need to get into the living room space.

We lead to we, there was a time, and also remember, I spent two years finding the 65 inch iPad. I said I could have a 65 iPad I can build for basically the tv, but the TV don't have enough processing power. And this is a set box, and we have partnerships with that. We talk to all TV manufacturer, TV manufacturer, all set box manufacturers, all the SOC behind them.

They see like things that start turning a corner because hey, they want more AI on the edge and all that. So, we see the, we see the possibility, but we end up, the perfect platform doesn't exist, so we end up building our own and, and Nex Playground is essentially the last bet. If Nex Playground fail, Nex would fail a hundred percent.

And we only have resources to create the first 5,000 units. But this also are also defining moment for the company as well. I remember at that time, I, I told the team that, you know, there's only one objective for the company. Only one goal is to make sure the first 5,000 users who got Nex Playground would love the product.

And that's how we spend the entire 2023, basically from zero of just concepts to shipping the first 5,000 units. And that was a defining moment. But even after that, you sell 5,000 units. So what? Right. And raising money even after that is extremely, extremely difficult. I have, so I got so many nos in my life in 2023 and 2024, and 2025 that I can, I lose track, you know, the country already, like, you know, but we are, we, we managed to make it through.

Kalie: That's wonderful, and I wanna talk a little bit before we dive deeper into product about how your mission has evolved as the products evolved too. I know your mission is to do good for families or to be a force for good. I wanna hear a little bit about what that means to you personally and as a company.

David: It started with the love of basketball. I love basketball and do something that's like related to that sport. And, and as we go, we, we have users, real users and we will talk to them. We understand their leads, understand how we build better for them, is more like that you, in that process, you start building the empathy, building the connection with the users, and keep finding how you serve them better, discovering other problems they might have and how we can do how we can, you know, help them there as well. And I'm also have two daughters. And if I look back in my journey building Nex, I can see their fingerprints all over my product. And they usually, the one could test some of the thing, something new that we are building. Um, and from the reaction to that, I, you know, also learn a lot as well and how to create joyful experience, joyful, meaningful experience in the, in the lot case that when, when our use, when our customers be, you know, start to kinda see it, taste it, and I can see that, yeah, I see that with my daughter before.

Sometimes it's just like, give a lot of validation of what we are doing and, you know, life is a pursuit of happiness, right? So sometimes it's just, you know, be, say true to yourself and you know, how you interact with customer, how you interact with families and, and want to do good thing for them. And I'm, I'm, I'm parent and you know, I, I can totally see after my, my, my, my first daughter is born and like the center graph just shift to them.

And I think that is both parents feel the same and you want the best for them. And we build a product that is like really carrying that, that love for the next generation, you know.

Kalie: How old are your daughters now?

David: They're 14 and 9.

Kalie: Wow. I, I also have two daughters, which is actually why I came across your product well before the Wall Street Journal stories. I was looking for something that didn't involve too much screen time. Mine are younger, 6 and 2. I wanna talk a little bit about the product. So, you know, in a lot of press, I think, you know, to set the stage, I've seen journalists who are describing Nex Playground and like how it compares to the Wii or Kinect.

And I wanna talk about what you've learned from previous motion platforms and what you're doing that's completely different than the platforms before.

David: Yep. So, there's a few things really different. You know, I always say that we are standing on giant shoulder. So, we are not the first to build motion games and, you know, Wii and Kinect build before, using different technologies like we using the sensors on the controllers.

And Kinect use our pretty complicated camera system like dev camera and, you know, and later they used like the, the, the tum of flight sensors as well to basically track motion. The technology that we are using now is basically AI is on LGP camera, connecting to our AI capable chip. We process the video and understand motion in real time, so in a way that the technology is a lot similar.

So that is also, I think, would be the more ultimate form of technology as well, because it's just the AI is just everything. Software. You just evolve the, the, the, the software evolve the model and it become more capable, being able to understand more. And I think in, in the form that is like the technology is better, it will be a little bit more ultimate form of technologies.

Kalie: To kind of dive into my next question is, you know, the, the other platforms we've mentioned have had issues with longevity. Where do you see that being different for Nex? Is it just in the technology or is there something else that's, that's more to it?

David: And I wanna kind of cover those, to answer the, your previous question with like two more points, which is, second one is important that we have different business model. We have a subscription based business model. And that's a, this is a wonderful model, and I think it's the core behind, like our continuous investment in content. So, we are not leaving it to like, oh, just build an open ecosystem for our people to kind of build games on it.

We say, Hey, we, this is the service and we, we are dedicated to serve families for a long time. And, and with that, we, with a subscription model every year we actually, you know, come back to the product, come back to the market with a better product because we keep building and every year, for three years in a row, four years now, that will basically keep increasing our production budget.

And, and, and then all with all the learning that we have with families, and how, how we can make it better. Is it improving technology, getting to more content? Trying something new that, you know, have not been tried before? So, in a way that we, through the process, understand what our users expect, what our users like, what our users want, and keep building more and keep surprising them with new things.

So, this works because we are not thinking about like game individual games, we are thinking about a complete solution to the family who wanna stay active, who want to be heavy connected moments. So, and, and then it becomes a, basically a five view so that we can go back, keep going back to the, to the market with a better product.

Imagine getting back in the days if this is like a single a, a platform with individual game purchase. Like the, the product doesn't really change much. Yes, you have bigger game library, sure, but for the same price, for the same price, what you get is largely the same, but for the same price that you spend on Playground for the first year, you get access to the entire game catalogue.

It's very different, and if you're convinced that we do good for you for one year, we hope to earn a customer for another year. That's sustainable business model. It's absolutely critical for how we think about longevity. And the third is also, the third point is also important of like, you know, the, on the longevity thing is, is, I think the other company, like, you know, I'm just looking at the result like, you know, I'm not, I would not be able to speak for their strategy looking the result is the other two con, you know, company could, few company could try basically collectively like, you know, decided motion game is not what their customer want, and we look, we, we don't have their customer. Yeah. So, we build motion games for the customer who want them the most, and we come here with years of experience interacting with these people on different platform, on, on, on a mobile platform.

We understand why they want it, what do they want? Now we just come in to create a better project to serve them. So, our, our focus on kids and families is something that will differentiate us. So we are, we, because with kids and family, we first start with how we make it safe, you know how we put that policy, how we make it very secure.

So those become fundamental pillars of how we build things up. And when you look at the whole ecosystem, oh, it's just really different from what being tried before. And I would love to kind of do it in the right way and keep, keep improving the, the, you know, our, our, our solutions to serve the needs. They are timeless. That's how we think about longevity.

Kalie: So, I'd love to dive into the privacy and safety side of things a little bit more. I know there's other platforms, platforms different than hardware that are geared toward kids that are having a lot of safety issues out there right now. And I think as, as a mom, it's definitely something I think about when thinking about introducing my 6-year-old to, to gaming.

The lack of screens was definitely one part of, of your product that really appealed to me as a mother. I'd love to hear a little bit more about how you guys are thinking about safety, children's safety especially, and what you're doing to prioritize that aspect.

David: So, that is a foundational promise to our customers, non-negotiable.

Non-negotiable. So, we think about that first. We know that we are literally at the center of living room, the device of a camera on it, and building that trust is of number one priority, number one priority, non-negotiable. So how we do that? First is a closed ecosystem that we, we do not put a browser.

We are not allowing third party to make games for it. You know, we control everything from the bottom up. So that's basically no way to get in, that's how the product is secure. Because we, we, you know, we have foundation, have a secure OS, we have, we have, uh, curate all content, all games that, you know, go into Playground is, you know, created by ourself and our partners and we audit everything.

So, number one is just to make sure that the, that is secured, curated content, and also no video go to the cloud. So, it's all on the edge processing. We are not sending, you know, any of those data to the cloud to store there. So, we, we, everything is local. So, if you disconnect wi-fi from the, from the device, all the game continue to work.

Obviously there's some leaderboard thing that, you know, to activate for that, but like, largely the game work locally. So that's how we, how we, you know, do the privacy and security. Thing about safety is just curated the content and fought through every single thing for our customers. And listen as well because like when we put, you know, games out there and, you know, easily the games have like hundreds of thousands of players.

So, there's a lot of feedback coming in, come back in, and we make sure that we adjust those feedback and over time we learn to kind of how to kinda hit that right. You know, off the gate, But we, it, there's a lot of learning that we have over the, you know, over the course of, you know, many years of how we these, you know, design great experiences and safe experiences for kids and families.

Kalie: It's very refreshing when tech CEOs think about safety as a non-negotiable. And this is a perfect segue into, I wanted to talk to you about games and licensing in particular. So, I know that you've had a big IP, a favorite of my, my daughter is Bluey. And so I wanted to talk about how you think about that kinda licensing of IP versus investing in original, original franchises.

And I know you said your games are fully first party, like that's part of visit security and privacy. But do you expect that to change in the future? Do you ever see a world in which you introduce games by third party developers?

David: So, we do have what we call second party developers. So, we, we cannot do everything. Yes, Nex have three internal game studios, and we make both original IP games and licensed IP games. We also have studio partners that are really great, and we are borrowing their superpower to, to make great games for the platform as well. But it's, we call it second party. That's, we don't have open app store.

We do not open it up for everybody. And mostly because I think we still wanna kind of have, curate our, our, our content lineup. And also, what would be the great experiences for the, for our customers as well is how we react to those needs and how we, how we plan, and how we, you know, doing what's right and doing what's exciting as well.

We can also like limit resources. We can also not do any, everything. So we, we need to be prioritized and see that. And regarding our licensed IP, we are certainly very excited to have many partners trust us with their, like, you know, we love brands. And, and I think we create one of the, one of the thing that is, is a new platform and is also, want to be completely safe from pirate and secure. So that's like our number one thing and it, we align with what, what the brands want to do. So, when Bluey think about their game, he said, why would do it be great for our players to really play. Like wooly jump to like, you know, lift up all the balloons, right? Yes. You can play. Keep you up at home by just having all the balloons.

But you know, we can hardly have 100 balloons up there. So we, with digital, we just have a little more flexibility to stimulate many given situations. And, and I think creating unique experiences for the brands is one of the way why brands want to come onto our platform. And the vision alignment there is also very significant.

And obviously we also invest in original IP as well. I think, you know, both, both licensed IP and original IP have a role to play on the platform. Original IP, we, we, we, we can certainly explore something, something very new. Some have not been done before. And yeah, so it is, it's a, it is a, it was good balance of like, you know, how we invest in the content library with both license IP and original IP, and deliver great experiences for the customers.

So, you know, license IP also have a, a lot of credibility and lot doing in audience as well. So, we also kind of leaning on the superpower of licensed IP to, you know, bring audience in.

Kalie: Can you tell me about some of the most popular experiences right now?

David: Yep, for sure., Our most popular experience right now, in the moment on the platform, which is a surprise honestly, is a game that we developed last year. It's called Ra. So, Ra is, you can feel like is our, Snapchat, like filter on a big screen and four players can play at the same time. So, it's just our fun moment, which we have. We keep rolling out new filters, and some of this is just like, encourage his creativity and, and oh, how they do certain thing they want.

It's just like it's, yes, it's fun, it's just a filter and kids will just run row in doing things like, you know, there's some filters. It's like in like for imagination. So one filter when you open your mouth, fire breathing out from that, there's some filter where you, you would like charge your electricity in your, in your, in your hand. And then you can release it like your, you have control electricity. That's one filter, which is the most popular one, which I still like, you know, figure out why they're so popular is actually, it's just what they call twin. It's just like a, a, a, a, how do you call it? Basically overlapping two video.

One video is just like five seconds before, and then you can, you have a twin. So when you will move around and you can see actually you have your, your, your in image five minutes, five seconds before, and you feel like you can playing with your twin and doing something with him. And it's just unlock his imagination of like how they think about things.

And it's just like, I don't know. Is it, is it different a game? But we just discover that and like people love it so much. The second most popular experience is a game called Diary. And it's a musical game. And, uh, we convert your body, you know, to be screened live and we give you instruction to dance. So, arrows coming in you, you can, you know, move according to the arrow and put your hand in the right place. Lean your body in the right place. And what's amazing of that game is we see a lot of sharing of that game happen is parents getting proud of their kids because it's hard, music rhythm game is hard.

And, when, when a kid can, wow, my five years old can do that. It feel like that we created a bicycle like, and a parent feeling proud of their kid. Now they can ride a bicycle and they did not expect, because I'm so surprised when I'm seeing my five years old daughter at that time, like getting like all perfect 'cause Wow.

Wow. And that is like, and, and we have that and my, my younger daughter now is nine and now a lot of parents now experience the same thing. And sharing in the social media is like, I did not expect my, my daughter can, or, or my, my son or daughter can do that. And yeah, so it was, it was, it was great. And like, how, how, you know, parents and kids experience growth, and getting proud of themselves, getting proud of their kids. So that's our second, second most popular experience.

Kalie: Sweet. I think the, the bicycle analogy is really, it was really perfect. Yeah. Okay. So, I wanna switch gears completely and if, of course, when I was doing research, did I check out a lot of your Substack articles? And one of the things that you mentioned, which I really loved, is that your role as CEO has shifted from building the product to building the organization. You've listed out a lot of the values on your Substack, and I wanted to ask you about how you describe your culture as being different from others, and then if there's any hard lessons that you learned that went into creating any of your favorite values on the list.

David: Yeah. So, we talk about Nex culture is culture of fun. So when we give into building games, we do a lot of study of what is fun, and we dive into all these study about like, you know, what make a fun game. And we in, in like, everything that should pointing to a similar direction is a fun game. Involve autonomy, mastery and connections and we can adopt that to be our culture as well. So, to make things fun, we wanna adopt a culture to fund that. In, in a company, there's a lot of autonomy that the decision you make matter, you have a lot of inference and, and mastery is like you get better and better at what you do.

And connection is basically building empathy with our customer, building empathy with our partners, building empathy with the colleagues, to make things together and all pointing towards a clear mission of what this company do. So, I think this is like what define, we know the why and we are, we are building a culture around the future.

The, the, the culture of fun, of the culture that, that value autonomy, connections and mastery. And you think about like, what is my favorite like most important thing is, is we always go back to like, Hey, this is why we do what we do. And in a lot of things it's just like reinforce that because once you know the why and the how and what, there's a lot of creativity around that.

And that's why in a lot of things, we celebrate our users. If you look into our, the Playground story series, we celebrate the users. We celebrate like what we do for them, you know, is, is deeper. It's more meaningful and how we can become like something great for families. So, and, and we always point to that and, you know, share.

This is why we do what we do. Sometimes we just share a piece of reviews, sometimes is, is how user describe the product in social media. And, you know, knowing our why and, and keep iterating on our why is very important. So, we always start with why. That's my favorite part and that's also my role as well.

Kalie: Great. So, I know you've expanded pretty rapidly. I think you have, and correct me if I'm wrong, 120 people across multiple countries now.

David: Mm-hmm. Yes.

Kalie: How do you preserve that sense of kinda shared ownership and connection as you scale, especially in multiple locations, and occasionally you bring them together?

David: So I like, we, we, we host town halls in both US and Hong Kong, I think, every few months. And it's important to, to gather the team occasionally and, and we enforce some of those values like, you know, we keep repeating science of the booking record, but it's important can keep repeating or finding out different ways to, to say the same thing. Find different ways to share, like how that manifest itself into, you know, the work that we use, you know, the thing that we do. And, and using different ways, basically just talking about like, you know, the culture and cultivating that is extremely important. I have, for all the game studio, I have weekly sang, with them to be involved in their work.

And yeah, the, the daily, the weekly interactions, and I spend a lot more time in like writing block, and, you know, creating, you know, deals as well. So it's important that, you know, we, we continue to believe in the same thing. And obviously, if the business is doing well, it's just the natural gravitational force of, you know, the business that is growing is certainly critical. And, and with, with the communication of like why we do what we do with the communication of the culture, like, you know, to the external world. And also would have people self select themselves to be joining the company as well. So it's kind of how we maintain the culture, how when we grow we keep the culture because right, the right people got attracted to join this mission is, is obvious when, when, when people we hire come to the, hey, I, I, I read your book and I know what we are doing and, and share their own personal story, why this matters to them.

And that's how I know I, yeah, I have a real, I have a great hire.

Kalie: It's wonderful. It sounds like you're, you're, you're doing a great job when it comes to scaling and finding team members that fit into the mission. I do, I jumped over one area that I think is really important before I wanna get to your growth and what's next.

I didn't ask you about distribution. One of the things that I thought was so interesting is you've had crazy sales. We've already talked about them. This year you're in over 5,000 like physical stores all in the U.S. right?

David: Yeah, well, we, we are, we are also in Canada as well, so we also in, we have some stores in Canada and combined, I think we're close to 6,000. But yeah, we, we, we are in physical stores and we are proud of what we are doing in with our retail partners. You know, is important that we sell physical product, and that need to be a place that for people to try it. Then you replace, let's say, while it, it works, you know, it works.

Wonderful. So, we created a retail demo fixture that is in thousands of stores. Not all stores have them, but in thousands, thousands of stores actually have them. We are in, I think we have live demo fixtures in 1500 Walmart. Nearly all Targets or Sam's Club and one third of Best Buy. And we keep growing and expanding as well.

When the space become available, we would work with our retail, retail partners to put a, a fixture there. The sales actually much better when we have something live there. So, this is like a welcome addition to the store. Also, something that, you know, you know, the, the, the guests of the store can, can try, experience, have fun. And I remember in the month of December, our retail fixtures collectively did roughly around a million demos.

Kalie: Wow.

David: So it's a lot of demos like done, and then user get to experience that. And there's something important that is, you know, can it try, can, can people try it? Building trust, so I think it's a continue to be a very important part of like how we, you know, interact with users and, and enter their, enter their, their, their decision-making process of a should I buy this?

So that is, that is a, you know, wonderful way to, wonderful way to do it. And obvious there we have a lot of users like sharing there. Like, you know, talking about a product word mouth is going to be the most important. I think number one thing is, like I heard from somebody that have the product and they, they, they have wonderful time with that.

And, and the, the retail fixtures another way that how we, you know, interact with some future customers.

Kalie: Can you share roughly what percentage of sales come from being in retail stores?

David: So I dunno where we can share these numbers, but like, I think we have a substantial portion of the sales going through retail channels. I think in a, in a, in a normal, in a normal week, more than half of them coming from physical retail.

Kalie: Okay, now I wanna ask you about plans moving forward 'cause obviously 2025 was a banner year for you guys. I wanna ask you about what is the next phase of Nex Playground look like? What are you excited about for 2026?

David: Just a few thing I'm like totally very excited about. The first is our content roadmap. I continue to be very excited about our content roadmap. Like last year, were Bluey, said, wow, like, is it a peak? You ready for us? Then, then basically the number one case IP come onto our platform and this year look at that.

Wow. We have, we have something. Like you also very amazing, very exciting. And we'll be full of surprise this year. So that's the number one thing that, you know, I cannot talk about like a lot of partnership yet, but, but like, I'm genuinely excited about our, our, our content roadmap. Not only that we have new games, we also doing more to existing games as well.

So, the games that is loved by our current users, we are investing more to make that game even better. So, the, I can say, say Star, we gonna receive a big ramp, we have a big update for Tennis Smash and TMNT Teenage Mutant Digital Shipping soon. So not only new games, existing games would also get a lot of love.

And I'm excited about that iterative process of working with users and trying to make the game better for them. So very excited about that. So this first second would be the, we call it connected families and how you can securely connect family to family and how we enable play safely, privately, securely with, you know, the, the, the family you love.

So how we bring family closer together, even there like, you know, hours or like, you know, or even ocean apart. So, you know, we want to, we want to, you know, our mission is to bring family together and yeah, we, we intentionally create in the living room, bring the physical family living in the same house, you know, all friends together in that place.

But we also think about, you know, how we can do that for families that live apart as well, pretty far away as well. And the third, we also would be beginning our internationalization effort. So we'd be like internationalized and localized so that we can begin to expand to other, other markets, and serving more customer.

And as we serve them, we also bring in, you know, the culture, the IP. And, and, and, and when we bring that to the, to the library, it just like have that, like cross coordination and get our existing user experience different things as well. So, you know, we are, you know, planning, you know, entering in Japan 2027, but this year we start, you know, oh, how we work with local IP like local developers to start bringing IPs and games onto our platform to get ready for the launch. So, extremely excited about, you know, doing all that.

Kalie: It's really exciting. And then just audience wise, you know, I know we've talked about this being a, a console for for families. And we've also said of young kids too. Right? Which is one of the reasons I really liked it. But I'm curious, are you also interested in how do kind of families and kids grow up with Nex Playground, like what that looks like? You know, we hear people talking about kids aging outta Roblox. Where do they go? What are you, what are your thoughts on your audience growing up?

David: Yeah, so, we are playing these critical path to kind of what kind of roles that we play for families and is, is understanding that is important and because this is defining how we think about what kind of game that we're creating. So first we are what we call outdoor psychic. Outdoor is great, and you have great physical activities or go outside touch grass.

A hundred percent. Probably one of the best way to have active play experience. But sometime, although it's not available, you know, in a big part of us right now is a snowstorm. People stay at home, sometimes it's too cold, sometimes it's too hot in the summer. Maybe just raining outside. So we, we create things that, you know, that like kids can stay active at home, right?

Some we looking at what we call it timeless consumer needs. Like needs that will not go away. So need basic to move indoor is one of those. It needs to stay connected. You know, creating, creating this moment like, you know, how about game of bowling? You know, family game night. So, we know that some of the, some of the places that we are serving is how bring family together.

And we talk about growth as well, right? How we play a part in, get kids more ready for sports. So, building interest, building confidence, building skills. In like basically building a ladder for them to, hey, play, play sports for in, in real life. And, and that is the, the what, how we find a role that we do constantly playing for families when kids grown up because some of these things that family want do then needs two, stay active, then needs two, stay connected, then needs for growth.

All need always there. You are always there. And when kids, you know, also go to school, we think about, you know, how health and fitness for parents and grandparents too. So, we keep finding like pockets of needs that we can be serving, you know, our users. And keep building, you know, fun experience. Also, I think that the need to have fun, the need for joy and for the medium, which is, you know, games, sometimes apps, like, you know, how we can serve those is better and better.

Kalie: All right. David, I have one final question for you. When you think about Nex in 10 or 20 years, what do you hope that families say that it meant to them?

David: We want to always go back to the timeless needs that we are serving, how we bring movement, connection and joy to families, and 10-20 years, a lot of things will change. We don't know what AI would do to us, and, but they are fundamental human needs. That's not going away, and we want to kind of serve those needs really well. And to make ourselves essential to families, something the integral part of family life, something that is, you know, really permanently earnest place in the living room by serving those timeless consumer needs that never goes away. And we, when we all re end ourselves, trust that and we just think how we can do it better and better and better. And, and we keep adapting. Keep on the right path, keep surprising and delighting our customers.

Kalie: That's a perfect one to end on then. Thank you so much, David, for joining me. Congrats on all the incredible success in the last year, and we look forward to seeing your international expansion and the content that comes out in 2026. Thank you.

David: Thank you.

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