In this episode, host Kalie Moore talks with Bastian Bergmann, Co-founder & COO of Solsten, about the collision between gaming and branding, and why most companies still don’t know how to show up in games without feeling like an ad. With 3B+ people playing worldwide and gaming still capturing only ~5% of global ad spend, Bastian argues the opportunity isn’t awareness, it’s audience strategy. Kalie and Bastian break down why gaming is the only medium that truly spans every demographic, from Gen Alpha to “silver surfers,” and why brands fail when they lead with stereotypes or build empty “brand worlds” instead of experiences grounded in what players actually want.
They also explore why gaming should be treated as a real conversion channel, even if measurement hasn’t fully caught up yet, and how platforms like Roblox and UEFN will be pushed toward clearer attribution as more dollars move in. Bastian shares standout examples like The New York Times’ games-led subscription growth and Chipotle’s Roblox activations that drove real-world sales and loyalty signups. For studios and creators, the takeaway is clear: know your audience deeply, design integrations that are brand-agnostic but partnership-ready, and pitch brands with real segmentation and fit, not vague “access to gamers.” The episode closes with what’s next at Solsten: Alaris, an AI tool powered by Solsten’s psychological dataset, plus an upcoming API layer aimed at unlocking deeper personalization across games, matchmaking, recommendations, and advertising.
We’d like to thank Neon – a global payments and e-commerce platform designed to help game publishers earn more money and gain independence from app stores – for making the episode possible. Neon’s DTC platform handles everything from webshops and checkout to global payments, tax, and compliance, with full transparency and all-in pricing.
We’d also like to thank modl.ai for making this episode possible! Using a combination of computer vision, reasoning models, and feedback loops, modl:QA+ autonomously explores builds, detects bugs, and generates actionable reports that sync directly with your existing workflows. To learn more, visit modl.ai.
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 the collision between gaming and branding and why most companies are still getting it wrong.
Over three billion people play games worldwide. It's where they spend their time and attention more than any other form of entertainment, and yet, gaming still only captures about 5% of the global advertising market. The question isn't whether brands should be in gaming. It's why so few of them know how to do it Well, my guest today is Bastian Bergmann, who's the co-founder and COO of Solsten, a tech company that eases AI and psychological data to help brands in game studios, including EA, Sony, and Peloton, to build experiences that actually resonate with their audiences.
He's also the author of Press Play — Why? Every Company Needs a Gaming Strategy, which was published last year by the Harvard Business Review Press, where he breaks down how companies like Adidas, Chipotle, and New York Times are using gaming for more than brand awareness. They're increasingly focusing on conversion and long-term engagement.
Today, we're gonna dig into why audience strategy is where most brands fail even before they start, what separates the companies who are doing this well from the ones that are burning money on empty roadblocks worlds, and whether studios should be chasing brand deals or building for them. It's my pleasure to welcome Bastian Bergmann, co-founder and COO of Solsten to the podcast.
Bastian: Awesome. Thanks for having me, Kalie. It's a pleasure to be here.
Kalie: Awesome. Let's dive in first to the audience problem. You've said multiple times that the place where gaming and branding really collide is around audiences. Can you explain what you mean by that, and why most people are still getting this wrong?
Bastian: Well, I think, you know, part of the, part of the data here, that's extremely striking that you articulated really well in, in your, in, in your introduction to this episode. It's all the engagement is there. If you look at just pure numbers of where people, where consumers broadly and players spend their time, so one, you know, you have almost three and a half billion people that play games globally almost daily. Like, for context, what a lot of people don't realize that's bigger than the population of India and China combined. It's also bigger than any religion we've ever had on planet Earth as a, as a species.
So, it's, it's massive play. And gaming as a, as a, as an industry, or as a medium are, are massive. That also equates to roughly 80% of the actual global consumer population. So, if you're a brand and you're trying to engage the general consumer, gaming is one of the most powerful mediums that you can go to because one, a lot of the people are already there. That's, that's just table stakes. But then when you look at, well, you know, how much time do people spend, in, in games, how deep is the actual engagement, engagement immersion that you can create conversion from those digital channels to, you know, maybe even physical channels or, or other touch points that you have as a, as a brand.
Nothing beats gaming. And I think one of the things that always gets lumped into this conversation get and gets confused quite a bit. Well, one is the stereotype. If you're, if you talk to CMOs or brand executives, the immediate knee-jerk reaction for not everyone, but still for the ma, you know, the vast majority out there is well, but gaming is for the 20-year-old dudes in the basement, you know, with their energy drink and they're blowing stuff up in a shooter game like that stereotype.
Not, it's not wrong. Those people exist. There's a sliver of the overall audience that exists, but that's the key word. It's a sliver of the entire population that actually plays. It was a lot more, you know, prevalent about 20, 25 years ago where that stereotype had a greater reason to exist, I would say.
And then the other component that you look at, there's, there's two other pieces. One, gaming as a medium is the only medium that actually cut across all demographic consumer cohorts. So young people play it, old people play it. One of the fastest growing segments in terms of hours played on a weekly basis are actually silver surfers.
So then when you look at, you know, on the opposite end of the spectrum, you look at Gen Alpha. Gen Alpha is the first audience that plays more, that games more than they consume any other form of entertainment or content, or medium. It's the number one medium for that audience. So, if I'm a brand, if I'm looking at this, I, I, in my opinion, I don't have a choice but to be in video gaming.
If my task is, well, how do we, A, engage new customers? How do we reach new audiences or younger audiences? And, B, how do we just overall remain relevant to the global consumer population?
Kalie: Do you see the shifting at all? So, I got into gaming about 12 years ago. The gateway was eSports, right? And I remember the first pitches that I was doing 12 years ago was the gamers and eSports fans are not these kids in the basement.
Bastian: Yeah.
Kalie: As demographic shifts and the boomers are starting to retire, and, the elder millennials, which I think were probably both part of, start to take over brands. Have you seen greater adoption or awareness of bringing brands and game as people kind of age into CMO level positions?
Bastian: A hundred percent. And that's one of the big reasons is, you know, you have the internal facets of people that grew up playing games, whether they, you know, leave aside, whether, you know, people would consider themselves to be a gamer or not. Like, I play video games regularly. If you ask me if I consider myself a gamer, I wouldn't necessarily say yes.
Like I'm, I'm, I wouldn't label myself, but I play regularly. So, I'm a hundred percent a part of that population. And it's, you know, you're exactly right. That demographic shift in the workforce, you have people that grew up in the eighties, seventies, eighties, you know, early nineties, maybe playing games regularly. It's, that’s their medium. They're now assuming mid-level to, you know, senior level executive positions. They're now decision makers.
Kalie: Yeah.
Bastian: So, you have that natural inclination more present in the C-suite and, and in the, and in the boardrooms. And then you add to that, that those people, you know, our generation maybe a little bit, little bit older, they all, not all, but most of them tend to have kids now.
Yeah, so they're growing up with this stuff. So, it's the, it's the double whammy to an extent where you're like, well, I grew up with it. Like, I know I've got my console. I used to play Sega or Sonic on, on the Sega, or, you know, what have you. And, and now you're watching your kids and you go, well, I've got a almost 7-year-old she's on, she plays Nintendo Switch a little bit, and she's on Super Mario.
And I'm like, I remember my first time when I played Mario Kart. So, it's like you're seeing it happen on both ends of the spectrum. You, you're bringing your own experience of how you grew up and how you're socialized and you're seeing it with, you know, maybe your own kids or your friend's kids. So, you've got that shift on both ends of the spectrum, which I think is really, really important.
And then the other component too, there's just a general, an awareness that took place. And you gotta give credit to the pandemic. Well, one is because now all of a sudden, all the numbers around gaming became apparent and obvious to anyone. Well, it's been, you know, 190 billion plus industry pre-COVID for years.
So, it's been this gorilla hiding in plain sight. But what COVID did is it shifted the perception around it because people were all of a sudden playing more and it got cool again. It got socially accepted. So, I, I have a ton of stories and people that I know that started, that were older than me, who started playing games again during COVID and they played as kids and then they stopped because of stereotypes of stigma, stigmatization, you know, what have you. And all of a sudden it was cool again to play. And a lot of that has outlasted the pandemic and it's just, culturally, it's cultural zeitgeist. It's socially, socially accepted. No one's gonna look at you weird if you go like, you know, what are you doing this weekend? Oh, I'm gonna play video games with my kids. No one's gonna go, ugh, you're, you're weird. Like we're, we're way beyond that. So, I think it's all those factors coming together that are helping.
Kalie: So, can you walk me through the framework of when a brand is considering integrating in game, what are the actual steps they should go through to identify whether it's the best audience for their brand, but also where those specific people are in what gaming worlds?
Bastian: Yeah, that's a great question. So, number one, I always say, you know, all of the different executives from brands that come to me where we have this conversation, they go, we need a gaming strategy. And I say, well, I don't disagree with that. But that's not, it's a means to an end, like just having a strategy for that space.
Like you know that that's not gonna help you win. So, in terms of steps, the immediate first step has to be, well, what is our overall strategy as a company? Where are we going as a business and what do we want to accomplish? Whether it's we wanna reach specific consumers or, you know, you, you name it, whatever the goals of that business are.
And then you work your way backwards. And then eventually you're probably gonna come to the conclusion that in some way, shape, or form, you're going to need a strategy for this thing that's called gaming. But now you know where you wanna end up because it ties into the broader context of your overall strategy as an organization.
So that connection is critical. So, once you've done that, and now to your exact point, now we can go, okay, well if we wanna do a specific thing in gaming, let's just say, you know, in my book I lay out four distinct strategies, like just high level framework of how you can play in games as a brand.
One is you integrate with existing ones. Two, you build your own. Three, you throw some blockchain in the mix. And four is you actually make games a part of your own product and services. So, “gamification”. But it's actually more than that because you're bringing over complete, complete games, so to speak.
You know, for a lot of brands, that first strategy integrating in, into what already exists a lot of times will be that first experience, 'cause it's a lot more feasible, it's easier, it doesn't cost as much, and the audience is already in a game because the game's already live. And you don't have to worry about scaling, attracting people.
You can go to where the people already are and that, that would be step one is if I'm a brand, let's say, I'll give you an example. I might be Ralph Lauren. I wanna do research now around, well, my core audience, if I want to engage my consumers, what games are they already playing? Where are they, where are they spending time? Who are they? What do they really need? What do they care about? What are their innate, you know, needs, drivers and desires? And then the second step of that, and that's really, really important, is you as a brand have to do soul searching around, well, what are, what are my brand values? What's my brand strategy?
What are, what's my brand value proposition? And you have to make your brand values match and align with the needs of the audience, because only if you can do that, are you gonna be able to create an authentic experience? So, it's what environments are, is my target audience already in? What do they really care about? What moves them? What drives them? What do I stand for? And if I can line all of those three up, I'm actually gonna be able to show up in those gaming worlds and in those different games and environments in really authentic ways. And that's what's gonna be effective. You know, one of the other things, and that's kind of like to say this really plainly, don't make it about yourself.
You know, don't make it. Don't make it about Ralph Lauren. Make it about the player. You have to make it about people, because when people are in a state of play, when they're immersed, and for a lot of people, the games that they play, they're extremely passionate about it. They love, they love them. So, anything that messes with that, that gets in the way of that, where people feel like, pun intended, they're being played.
And it's just like a quick attention grab or a quick money grab. And it's too obvious the amount of rejection that brands are gonna get from that is exponentially higher and actually exponentially more damaging to the brand itself than not showing up in the environment in the first place. So, it's like, if you're not gonna do it right, if you're not gonna put in that upfront work of really laying the foundation in terms of audience and how do I show up authentically, it's better to not, not even show up in the first place.
Kalie: I wanna drill into one demographic that you mentioned earlier that I think like silver, what was it? Silver…
Bastian: Silver surfers? Yeah.
Kalie: The silver surfers. I, so in my day-to-day, I see a lot of really great brand activations, particularly that Overwolf is doing to reach a target audience, but I haven't seen any incredible brand activation for silver surfers. One, can you define that? What is that a specific age demographic, like over sixties? Where are they playing and have you seen any brand that's cracked the code to reach that target audience?
Bastian: Yeah, it's a really good question. So, yeah, I, I forget what the, what the actual cutoff is, is, I think it might be 65-plus, it might actually be 70, 70 and above.
Kalie: Okay.
Bastian: Give, give or take. But it's, it's that the oldest “gen”, you know, demographic cohort there, where do they play? You'd be surprised they're playing a lot of similar games that your general population plays, like they'll actually skew, they'll skew a little bit more mobile for sure.
They're not necessarily gonna be on your console as much, they're not gonna be on your PC as much, but you have people that are playing very actively, a lot of PC games. So, the cadence is kind of like mobile-PC-console, kind of in, in, in, in that order. And you've actually seen a lot of games that came out that are catering specifically to that cohort because, you know, you know, Mother Nature and Father Time are, are undefeated.
So, the older we get naturally, you know, we're gonna have some, some struggles that we're dealing with. So, you see things like less buttons on the screen, text is already a little bit bigger just because it helps with, you know, readability and things like that. So, there's actively, you know, people out there that are making games that are specifically catering to that cohort.
In terms of brand activations, I know as much as you do. I haven't seen a really good example of a brand that's gone after that cohort. And it might be for specific reasons. You know, everyone typically, when you talk to executives around this, everyone's really concerned. Number one is we have to get in front of young people.
Kalie: Mm-hmm.
Bastian: It's like, well, gaming and young people, that's something young people do. So, we need to get in front of young people. That's number one. And then typically number two, which is also, you know, a medium where podcasting is really strong compared to traditional TV, it's that actual cohort of 30 to 45, because those are the people that, those are the income years. That's where you're making money, probably your most money. That's also where a lot of times in your, especially if you're early in that age bracket, a lot of people don't have kids yet. So, it's like your economically a little more free. We will spend stuff on, you know, money on dumb stuff because we still wanna impress other people.
We're trying to find a mate. Like all, all these other, all these things are going on. And that's typically the second cohort then that brands are trying to get to because there's discretionary income, there's purchasing power, even more so than with Gen Alpha. It's, it's disproportionate.
That's typically where the heat map kind of sits. So, yeah, I, I, I haven't seen a very good brand activation going after the older generation either.
Kalie: I think it's a missed opportunity. My dad was just here over Christmas and he was on his phone way more than would be allowed. But yeah, I, I, so for any brands, or studios, who are building for the older population, please reach out to us at Naavik, I'd love to do deeper dive into this demographic.
Bastian: My, my father-in-law is the same, you know, whenever we have, when we get together with the family and it's like lunch on Sundays, you, you bet between the main course and the dessert, the phone comes out and then it's Royal Match. So, so shout out to the Dream Games guys if you've done a good job there, right?
Kalie: Like we, we religiously talked like studying of like child, child production. So, we get like 15 minutes of gaming a day. It's, it's becoming a problem. I think that's universal. Okay, I wanna switch gears be to something that I, that comes up a lot. I think you and I were both at Seg Three. We were probably both at Games Beat Hollywood. There are a lot of really interesting talks about measuring success as brand awareness. When we had our first kind of initial getting to know you call before recording, you mentioned that you see a lot of brands treating gaming as just top of funnel brand awareness. Can you walk the audience through that and why that misses the point?
Bastian: So, you, it's, so take, you take a step back historically. Marketing's job is a lot easier if you say, well, we're just, we're, we're all about brand awareness because it's, it's always been, and this is regardless of gaming, it's always been a little bit fuzzier to measure. And the ROI on those activities, in terms of how does this actually drive revenue, is always been a little bit fuzzier.
So, you know, I love marketing, but that's like the kind of the, you, you, you get to duck a little bit, and you can say, well, we have more brand awareness, but did it actually contribute to our top line? We're not really sure. The challenge is, you know, you look at the numbers, you mentioned this in, in in the introduction.
This is the big discrepancy that we have right now. Gaming gets all the engagement, all the attention, a ton of monetization from consumers, yet it gets 5% of the total global advertising budget, 5%. There's another medium that we're all very familiar with about 20 years ago that was in exactly the same position.
It was getting a ton of engagement. People were spending a ton of time on it. It was getting all of the attention. It was barely getting any of the advertising dollars, and that was social media. Fast forward to today, out of the, I think it's roughly $730 billion in terms of total ad spend that spent on everything else but gaming. Social media gets about 430 billion of that.
Kalie: Yeah.
Bastian: So, it's shifted completely, and I'm convinced that gaming to an extent is at a very similar inflection point than social media was 20 years ago. And a big part of it that's gonna have to happen and, and mature a lot more for brands to shift more advertising dollars over is if they, if A CMO can go to the CFO and say, we spent 5 million last year on our Roblox initiatives, and that drove 50 million in revenue this year.
We're, we're, we're, this year we're investing a hundred million in Roblox. But you can't really do that yet. You're not at, you're not at that point yet because it's all, it's, it's fuzzier and why I think it's a missed opportunity for brands just to go, okay, well, let's, let's just do brand awareness. The tracking might not be there yet.
Okay. Well, one, you can work with partners, but, but two, you're missing a point because one, and a lot of people don't know the statistic, 86%, roughly 86% — this is a study by BCG that was done a couple years ago — 86% of all people that have bought a virtual item inside of a video game where the actual physical item exists through the corresponding physical item, 86% of those people go on and buy the real item too.
Kalie: That's wild. I cannot believe it. I, I work in this industry and I haven't heard that stat before.
Bastian: Yeah, it's crazy. It's an, it's an 86% virtual to physical conversion rate. There's not a lot of other channels that can, that can do that. Yeah. So now the problem is, okay, how do we track this regularly?
Now you, you, you get into all, all those sorts of questions, but the fact that that conversion rate is there and that when people are in a state of play, they're immersed. Anything that you put in front of people, the brand recognition's higher, unassisted, brand recalls, higher brand awareness is higher.
People have continuous engagement with it. They share it with their friends a lot more. You get virality a lot more quickly. You're embedded in a social context because people are coming together and you get their interacting with you. Your brand becomes playable and experiential rather than just a logo that you slap on somewhere that you, that, that gets looked at.
And now if I am in this playable context and I'm engaging with, let's just say an item as some sort of character, you know, take Mattel as an example. It's like a toy for Mattel that is virtual and you're playing with it. You've emotionalized it because you're in that state of place. So, the natural, the connection, the bond that the player forms with that item is already stronger.
So, the leap to go, I want this thing at home. They're just gonna do it is a lot shorter than for Mattel to go, let me advertise my new whatever toy, my new doll to you, 'cause I need you to buy that and whatever through Amazon, ship it to your doorstep. It's a much stronger emotional leap to go to then.
I've already played it. I've experienced it, I've established some sort of bond with it. I've already formed memories around it. Oh yeah, well of course three clicks. I want this thing at home. And then it gets to you and you have immediate associations with it because of the experiences that you had in the, in, in the gaming world with it.
So, it's a much stronger connection. That's why I think people are missing, you know the point when executives and, and, and, and marketers and brand leaders stay on that level of brand awareness. Okay, sure. Start there to experiment more quickly so you're not, don't spend a hundred million dollars right away.
Start smaller and see what works but then work your way down the funnel and start to understand how do I bridge, you know, the gap between the virtual world and my physical world, depending on what products are selling or, or what services I'm selling as a company. Because the conversion rate of bringing people over and, and driving monetization and experiences in both touch points is, is huge.
But yeah, as you said, tracking is still, tracking and transparent, measurable is an ongoing, is an ongoing endeavor.
Kalie: So, I think you made a really interesting distinction. That's important, right? We have two, we have brands integrating in-game, so building different unique experiences for the gamers. But then there is also just the pure advertising component too, right? When social media passed that inflection point from going to just overall brand awareness to, we can actually now track to see did the people who see our ads buy our product. Was there, you know, just a really shift in like, we now have API data. How did that happen and how do you think it will happen to mirror that in gaming?
Bastian: Yeah. How, how it happened in social was they made it easy to look at everything because that's the, the nature of, and this was, you know, 10, 15 years ago, 20 years ago. Now it's even worse. Everyone has information overload. No one wants to look at or has the time and the mental capacity to look at anything anymore. It's like, I wanna click a button, I just wanna do stuff, and I need everything that I need to know literally with a click of a button so that we can, we can, we can keep moving. So, making it easy for people so that they don't have to dig.
And I think where we're social really won was just being extremely transparent and granular and giving people the ability of, you want to get to person X, I'm gonna show you how you get to Person X. And then you see the results and you're like, I got to person X, whether you actually got there or not.
That's a complete, that's a, that's a whole another podcast. But at least the, the takeaway and the perception was there was, I got as close to the thing that I really wanted to get to, or I might have even gotten there than I possibly could have, and I can see every little bit of like click through it, this, this, this, this, this. I know exactly what performed where, why in what regions, and it was a click of a button and all my stuff is there and it, and it's transparent. That gives comfort because it's full transparency, whether that's all accurate or as effective as it, again, completely different podcast. Now, when you look at gaming today—
Kalie: Are, sorry to interrupt, but like, do you see no world in which Roblox or UEFN shifts more in that direction or are they always, they have to be these closed?
Bastian: I think they have to, I don't, I don't think they have a, I don't think they have a choice because, it's also about driving. So, one, it's about if, if I'm the platform, so now shift, shift the perspective. I'm not the brand. I'm UEFN, I am Roblox or Zeto or you know, any of these other platforms. My business is gonna thrive off of what's my number one.
I'm gonna have to bring in and keep people in my environment. I'm gonna have, I need, I need MAU and I need them to consistently engage a lot because otherwise, if I don't have scale, I'm not attractive to advertisers. If you go to advertisers and say, I've got 2 million monthly active users, they say, great, I'm gonna keep going to Facebook, across Meta, I'm gonna reach three and a half billion people. So yes, you can always make the point of well, but it's more curated and it's more targeted and it's more focused. And it's, yes, but you're still gonna need scale. Otherwise, the mechanics of, or the, the economics of advertising dollars just don't work.
You need, you need scale, so you're gonna need an audience. What does that mean? You're gonna need more new content. You're gonna need ways to keep the audience engaged, more creator tools, better creator tools. That also means, okay, I'm gonna need better incentives for creators so that they stay or come to my platform.
And you can see this playing out in real life with what Epic did with UFN, which I really, really like. They've gone very aggressive towards, they were always developer friendly, but they've gone very aggressive into the creator side. I think it's the first, first year you don't pay any fees. A hundred percent goes to the creator, and then you're still way, way better off after that compared to, compared to Roblox.
So all of that stuff has to happen. Okay, now, now I've got that side figured out. I've got engagement, I've got people, I've got attention, I've got that side going. But now if I want to keep bringing ads in, because at the end of the day, that's also where the real money then is, it's the brand going. I want to engage with whatever, a hundred million people in Fortnite.
Okay, so now what? They're, someone's gonna go, I'm gonna need to go to my CFO to demonstrate what we are gonna get back from that?
Kalie: Yeah.
Bastian: And, and if you can't do that, you're not gonna get those deals. You can only ride the wave of marketing and cultural zeitgeist and perception for a certain time. But there's gonna be new games that are come, that are, that are popping up. Like Hidden Door is a really interesting game that has a ton of opportunities of bringing different brands in through storytelling and making that really immersive and engaging. You gotta have more and more and more platforms and different places pop up where people are gonna go and create, and that's gonna put even more pressure on the Roblox of the world and the Fortnite of the world to do everything that they can to maintain that eco, that ecosystem overall.
And I don't think you have a choice at the end of the day to, to be ultimately, be as transparent as you can with, you know, let's say Disney coming in or now Warner Brothers on, on Fortnite with Bugs Bunny, which is awesome. Yeah. But it's like, what am I, what am I getting? What am I getting out of that? And I actually think it extends a little further.
If you, if you, if you talk about, you know, the game publishers, take the Still Fronts of the world or MTG, you know, any of the mid to even like slightly bigger publishers, if you start treating your, your studios and all of the games that they make as an actual portfolio, as a content portfolio that you have with an audience and different audiences that play across all those different environments, 'cause it's not one in the same type of audience across all of your games. There's some people that play a lot of your games that you have to offer across your different studios, but then you're gonna have very individual and unique pockets or niches of audiences across all the games that you're catering to or that you're, that, that you have and that you own if you're, let's say Still Front.
So, why don't you zoom out as a publisher and go, I'm gonna treat access to these games. I'm gonna treat that as a holistic entertainment portfolio and I'm gonna make it really easy for brands. And that's the thing — you have to make it easy because this is still uncharted territory. You can't expect the CMO of L'Oreal to go, oh yeah, I know what game X, Y, and Z is, and I know the, you know, all the minute differences between this type of mobile game and this type of mobile game.
Like, they don't know. And maybe at the end of the day, they don't care. And maybe they don't even have to, you know, they don't, might, might not need to know. So, make it easy for them. White glove service, bring them in, how you integrate in your games, plug and play. It needs to be easy out of the box, ready to go.
And the tracking and the measurement should just come with that. It's like if you as a brand, all we need from you is maybe these assets and we need to know this and the rest is all taken care of. You get, you do this, we do this, we do this for you. At the end, you get this. It's plug and play and they, and you walk them and handhold them every step of the way.
So, to me, it's actually a huge opportunity for the gaming industry that has the potential to catalyze growth. Again, yeah, because again, like we're sitting on 95% of advertising dollars that are not being spent in this industry by, by, by brands. I'm not saying that, you know, every dollar is gonna get shifted.
No. But it should go from 5% to 20 or 25%. And now we're talking about 200 to $250 billion are invested in the gaming every single year by brands. And what's that gonna do for the industry?
Kalie: Why do you think MTG, for the example, hasn't moved on this? Is it just, you know, too many competing commitments or it's hard to get started with white label? Like why, why aren't more people embracing this?
Bastian: I don't know about MTG specifically in full disclosure. Like I, I love the team over there and I think they're actually doing really, really good work. And they've pulled off one of the harder transitions over the last years. Like, let's not forget that that was a pure content that was a publishing company originally.
Yes. Like Modern Times Group was not a gaming company that was a traditional publishing house, and now look at them today. So, they deserve all the credit for the journey that they, that they've been on. But I think more generally, yes, one, you've, you always have competing priorities. Sure. The other thing is, I think it's actually hard, it's a hard problem to solve.
You have all these different games, you know, some run on different engines. I'm not gonna name the name of the publisher, but I had that conversation three weeks ago about, you know, data and analytics that they're doing in audience segmentation. And this is a, this is the VP of growth, and he just said to me, he goes, Bastian, one of our best games I can't, I can't. It's like, what do you, I just gave them Mix panel a couple weeks ago. They're learning Mix panel right now. The game's killing it and has been for years. I'm like, how do they manage players in an Excel spreadsheet? That's, that's how they're looking at their numbers once a month.
And yet here's this game and it's super successful. But that's one of the challenges that you're dealing with. If you have, you know, let's say you are a publisher like that. You are MTG, you have 5, 6, 7 studios, you might have 25, 30 games. The technical maturity across all of those is very different.
The baseline’s very different. Then the platforms are different. So now to then go in and say, we're gonna make it, make it an effort to go, to streamline all of that so that we can give plug and play tools, that's a huge lift. So, and to me, again, this is actually one of the technical innovation opportunities in the industry where in that layer, if you can go to a publisher and say, like, I've developed a way where I can give you a consistent, whether it's backend or streamlined system, API layers that you could plug into all of these different, doesn't matter what the engine is. It doesn't matter what this is, but all of a sudden you can basically unite on your end, the visibility into your 30 different games. And I, I can give this to a brand and go, drop your logo, drop this, drop your assets, and off and off we go.
I think it's, it would be insanely valuable to both the brands, but also the publishers in the gaming studios.
Kalie: I also feel like in a world of Claude Bot, this shouldn't be too far off also, maybe.
Bastian: Yep.
Kalie: Let's see. Okay, I wanna shift gears a little bit to talk, to go back to the brands who are approaching advertising and gaming or doing branded experience and gaming from mid-tier or bottom of the funnel approach. I'd love to hear a little bit about who you think brand-wise is doing this really well, and maybe share some case studies.
Bastian: Yeah, so one of my favorite examples is hands down the New York Times. It's, if you look at, again, in an industry, we just talked about MTG, in an industry that's been severely challenged and you know, by most standards, just in structural decline, traditional publishing, they're one of the only companies that have, you know, completely turned it around and bucked the trend.
They're growing and it's purely, pretty much digital revenue, subscription revenue that's growing. And the number one reason, the key growth driver behind that is the New York Times Games app and the subscription to that. So, people that actually come in through the games app, subscribe to the other content pieces more frequently, they own more, and then subscribe to the overall New York Times subscription much more than people that come in through another angle into the New York Times ecosystem.
They engage with news content a lot more. They churn a lot less. So overall, they're much more, they're much healthier, much more valuable customers that the New York Times acquires through the, through the games channel. So, it's really interesting in the nineteen, I think it was in the late thirties, early forties, in the newsroom, they had this saying when the first New York Times crossword puzzle came out on, on the Sunday crossword, they had this, this, this saying in the newsroom with the editors around. People come for the news, and they stay for the game.
Kalie: Mm-hmm.
Bastian: We've actually shifted that to people come for the games and they stay, and they stay for the news, and that just shows you what profound impact this has had on the New York Times and what this, how this translates into what bottle bottom of funnel activity was.
If all these people are coming in and there's ups, ups, upselling their subscription to, I'm gonna get the cooking stuff and now I'm gonna get this stuff, and I'm gonna get the overall news subscription like that is bottom of funnel. People are converted, converting a lot more and buying more from the New York Times compared to their “just sticking to” the games app.
I think that that was a very good example. Another brand that's really good in this regard is Chipotle, actually, and they were one of the first ones a few years ago to actually go into, into Roblox. What they did, which was really cool three, four years ago around Halloween 'cause that's a fan-favorite holiday for Chipotle. People, like, they do this whole thing in the, in the U.S. and the restaurants around guac. So, you have like Halloween characters that are kind of like themed as Chipotle menu items. And people actually dress up. Go to their Chipotle restaurants to get food and they're in like, full on Halloween gear. So, it's a, it's a thing.
So, they took that as a first initiative and said around Halloween, we're bringing this into Roblox. And they had it with a, it was called Burrito Maze. So, you could play like this maze type game. You could collect different skins and characters and outfits for your own avatar. And there was also a virtual restaurant that you could go to an actual Chipotle restaurant, and you could make your own burrito and this and that.
And they were handing out free entrees. So, $1 million worth of free entrees. So, you could go in, get your free burrito, and then claim it in real life, whether it was online or you could go into a store and claim it too. I think it was just under 10 minutes, and $1 million in burritos were gone. So that's one.
But what's even more profound is that this, 'cause you could say, well, people claimed it 'cause it was free and then they didn't do anything with it. This event, this gaming activation, it actually led to one of the best digital sales days that the company has ever had in the history of the company. It also led to one of the best enrollment days for its loyalty program for its rewards members program.
So now, and this is the question that I asked 'em, is like, what was the ROI on giving away a million dollars? And they wouldn't gimme the exact number, but they said like, we paid, we paid for this in minutes. Because you know, the, they know what the value, what the lifetime value of an actual rewards members person is.
Bastian: Because they can do that historically. It's like if you come in roughly, you know, you're, you're this type of person, you're gonna stick with us for 10 years on average, you're gonna order this, this, and this. It's like, with a million dollars, who brought in this many people like this. We paid for this in minutes. Not, not even, not even a problem.
Kalie: A, release those numbers for one kind of case study. So, they built their own Roblox world, right?
Bastian: They did. They did both. So, the first time they integrated in an existing one, but then they also built their own, their own Roblox world. They're, I would say, they're, they're a little bit, agnostic. Because they really do both, depending on what they want to accomplish.
Kalie: Okay. This, this is kind of the perfect transition because there's this GIQI think study that showed that brands are abandoning their own Roblox world and they're shifting into integrating existing games. I wanna hear from your perspective, are you seeing that just from a brand perspective, building within integrated gameplay, versus building their own world. Has that changed in the past year or two?
And what do you think is driving that shift? I mean, obviously, it's really hard to bring people into a game unless you have immediate incentives, but I'd love to hear your perspective.
Bastian: Yeah, we, we, we definitely do see a little bit of a, of a shift, and I think there's, there's multiple reasons at play. The first one is, this is not gonna be a surprise to any of the listeners to this podcast specifically, making games is really fricking hard.
So, it's like, so for a lot of new people that came in like, well, you need, we need to make our own game. You know how the corporate mentality is, it's like, it's shiny, it's new, it's big. We need to have this of our own, we want our own. So, people go and they make it. And then you, you have an own world that you have to maintain, operate.
Maybe it wasn't even, you know, that well done from the beginning, but there's all these factors that go into that where, what developers and publishers know better than anyone making successful games is really hard. Mm-hmm. So, to me, part of what we're seeing is some brands, it's like Gold Rush. They went in, there's a new shiny thing.
We need it. We need to be able to say on our earnings call that we're, we have, we're in gaming now. It's this new touchpoint. We have our own Roblox thing. Then realizing throughout the process that it's actually really hard.
Kalie: Yeah.
Bastian: So, what do we do that's maybe easier or more feasible? So, I, I do think that's, that's one.
Another one is just people starting out with integrations because they're slowly trying to dip their toes into the waters a little bit. The other reason is, I do think is the tracking component, because we already talked about it. So, just because something's hard at maintaining, it doesn't mean you abandon it.
Kalie: Mm-hmm.
Bastian: Just because it's hard doesn't mean you abandon it. But if you don't know what your actual ROI is, do, do, do the efforts that we're putting in, do the returns justify all the efforts that we're putting into this? And if the answer’s we're not sure, we, we think so, but we don't really know, you have a hard time scaling those efforts and, and justifying millions of dollars in budget behind it, you know, let alone making it a consistent and a continuous thing.
So, I do think there's multiple factors at play here. If, if you force me to pick one and take a guess what I think the number one is, I do think it's, people were rushing to it. It was a new, shiny thing. They didn't think it was gonna be, you know, maybe as hard as it was or as complex as it was, they were surprised by the complexities and just don't feel equipped to handle that ongoingly and are now looking at, okay, great, we understand we need to be in this space. We need to do something around gaming. How do we do something that's maybe a little more light-lift right now?
Kalie: But I also think in some ways it opens up another can of worms too. There's a really great article, probably about six months ago, Digiday, Alex Lee, who's now at GamesBeat, wrote it and it was UEFN creators going on the record saying, oh, these brands should have come and built with us in our world versus you building their own experiences.
And it was very clear from that very nuanced article of some of the creators haven't necessarily worked with brands, they don't necessarily understand brand guidelines, and they have a very different idea of the KPIs that show success, right, than if you are working with developers who've built incredible games before, who know how to integrate your brand safely too.
It's, I think that's also another discussion of especially brands who are very new to gaming who want to maintain that brand safety component.
Bastian: Yeah, a hundred percent. That's one of the big reasons why. I even went on this journey to, to write, to write this book, is to build a bridge. And I think that's an ongoing effort that has to happen here because for, for a lot of brands, gaming is foreign territory. It's uncharted territory.
And I'm not even talking about anything UGC and creator economy, like that's even more uncharted territory to, to a large extent. So, they're unfamiliar with it and you nailed it. And the flip side of that is you have a whatever, 17-year-old creator. Yeah. And all of a sudden they're supposed to work with Hasbro IP.
It's like they've never heard of brand guidelines and brand safety in any of that in their life. And it's like, well, if you are running a toy company and you know, kids are, you know, your customers, yes, you're selling to adults, but you're dealing with kids and you're dealing with multi-billion dollar IP, you bet there's gonna be some guidelines around it for, for a good reason. So, I do think there's a little bit of both, you know, a maturing that has to happen on both sides and just facilitation of that conversation. I know Overwolf doing really good work, helping set those, you know, brand guidelines and making it easy for creators to understand, you know, what they can and what they can't do and more of that, more of that collaborative facilitation to, and honestly like all good things in life, it starts with an open mindset. Just having an open mind and approaching it with I'm here to learn from that other person and, and see how we can do really cool stuff together and not, well, here's how I always build my, you know, my different environments, and I'm gonna keep my way or the highway.
And same with the brand. Like, don't make it about yourself. It's about the person. It's about the people that end up playing your experience. So how do you come together with creators to, to deliver something that's really meaningful and enjoyable for people?
Kalie: What brands do you think should be integrated in gaming like right now, like that are just absolute no-brainers? It's crazy they haven't done anything yet.
Bastian: That's a very good question. A brand that hasn't done anything yet.
Kalie: So, I'm always just their toe-in, but like, where are the huge opportunities that are being missed?
Bastian: Well, one that's very clear in general is, well, any brand that has an immediate direct relationship to a consumer, anything that's D to C, a hundred percent to me, what, what, what's mind boggling to me is that not more apparel slash you know, companies that are really close to e-commerce are more aggressively going into that space because of the conversion rate. And you have a really good, like Nike has done some stuff that, that was cool. For sure. No one's beating Adidas at this right now. What they have been up to over the last, like Adidas, what a lot of people don't know over the last four years, Adidas is the only Fortune 1000 company that built an internal business unit that has its own P and L.
That is all they do is they sell virtual goods. They have an own business unit that is only tasked with selling virtual goods, and it's highly profitable, and it's growing like crazy. So there's a role model right there. And Adidas is active across all sorts of different environments. They have, they just launched, it came out three, four weeks ago, Three Stripe City, I think it was called in Minecraft.
It was a separate DLC. People could download it for free, play it for free, and you had all sorts of, you know, new Adidas collection in obviously Minecraft style that was in there. They do a lot of collaborations with Fortnite regularly. They, they do stuff with Minecraft, they do stuff with Roblox. So, they're really across, across the board and, and they've been able to monetize this, and they've been able to also show if we're doing certain things in these environments, here's how it actually impacts. Real sales of our jerseys or our Olympic collection or new sneakers that we have, they've been able to show that. So, for me, that's the part where I, I'm, I'm surprised that not more, you know, more Adidas of the world or the Under Armours, or like some of the challenger brands or like On Running, you know, there's so many really cool challenger brands that are big.
It's like, On Running makes like, I think 6 billion in revenue now, or 5 billion in revenue. It's like they're big enough to do this. They're young, dynamic, modern. They have great, great base in terms of customers. It's like, and also their type of product and, and, and the brand values that they portray, like Ly, they feel like such a perfect fit to be in these environments, to make the product even more experiential in the different, you know, shoes and, and what, what have you.
I think that's the biggest, biggest surprise for me is that we haven't seen more and deeper integrations where it goes directly from, I maybe had this new On Running sneakers on, and I'm running through Fortnite and it looks cool, and it's awesome. I've got the hoodie with it too. And it's like, well, let me go and actually get this delivered to my door set. Like, I want that hoodie, I wanna wear it next week when I go running. So let me just, let me just buy that.
Kalie: Yeah.
Bastian: That, that's the one that, that's most surprising to me. An industry that a lot of people don't talk about that's actually slowly waking up and starting to think about this are banks and financial services specifically, which doesn't seem super intuitive immediately, but there's a lot of reasons for this. And they're looking at games partially as is could this be my future digital branch?
Kalie: Yeah.
Bastian: And people don't necessarily go, go to, you know, physical branches anymore. And then one of my favorite, and I, I hope, and I think we're gonna see a lot more, is back to the New York Times. So, like the publishing industry, like news and content, but embedded in games.
So it's like my, my kind of like hallucination or dream that I have is when the new GTA launches, you can actually drive past, like, I don't know, whatever, CNN's building or there's like billboards where actually like live news are flashing through, and it's like the stuff that you would watch on social or the stuff that you would watch on TV, you can just follow the news and real life, real-time content live in GTA and that's your publishing channel. That's your actual outlet. Rather than I need a whatever CNN Plus subscription app or, or whatever they have.
Kalie: I mean, that would be amazing. I feel like with the exception of the New York Times, right, they're so behind. I mean, I feel like they're just conquering social media now. Wall Street Journal now has like a billion TikTok subscribers, which, which is amazing. But that happened this, this year.
Bastian: About this year. Yep.
Kalie: Yeah. Okay. I wanna talk about this from the game studio perspective too 'cause I do think that's a large part of the Naavik audience. So, if you were an indie game developer or a UGC creator and you wanna bring brands in, how does that work? Should people pro, start thinking about it?
Like, is this a man I should proactively reach out for? Or should I build experiences that brands come to me for, if that makes sense? And I know it's kind of a chicken and the egg. Where would you recommend a game creator starts?
Bastian: I think if you're, if you're already working on a game or you already have a game, like where I wouldn't start is I wouldn't start build a game with the goal of, well, I wanna integrate a specific brand into that game right away, because then you're, you're, you're maneuvering yourself into a corner because there could be a million reasons why that specific brand then says, well, we're not gonna work with you for whatever reason.
Might not, might have nothing to do with you, or the game might be, could be a million other things. And then you sit there and go, well, we have this great thing now, now what do we do? So, I wouldn't build with brand first or specific brand in mind. What I would do is I would, if you already have a game or you're working on something, I would build it so that it's, it's brand agnostic, but it lends itself to, well, we, we could do partnerships and integrations in this if we wanted to.
Kalie: Mm-hmm.
Bastian: So, so that you're open enough. Number one then would be if you bring in enough of an audience. So, you have sufficient scale that's attractive to these brands. That's important.
Kalie: That was actually gonna be my next question. What does that scale look like?
Bastian: Just all, I think it depends on the, honestly, it depends on the type of game, and it also depends on how good your engagement is, right?
Bastian: So, if you're just saying like, well, we have 10,000 people that come in every month that play this, that's not gonna, that's not gonna, you know, not gonna do it. But I think once you start to get to a hundred thousand monthly active users and more, you're in the realm of, it might not be the most attractive to the biggest brand that's out there, but it could be really interesting to a tier two or tier three brand, which is still gonna help your game.
And if you can show that it's very targeted, and again, the engagement around what you're doing is really good. So, I'd rather have a hundred thousand extremely engaged, highly monetizing users that are, love my game, that are passionate, that keep coming back than 300,000 disassociated MAUs. That's sort of like, play my game, right? So, I do think it's a combination of looking at the telemetry holistically. And what you can do as a, as a developer is really invest in getting to know your audience. Not just, well, what do they like about our game? But who are these people in real life?
Kalie: Mm-hmm.
Bastian: What brands do they already, like, what movies are they watching? What other, you know, affinities and preferences do they have? Who are they actually in real life? What does a day in their life look like if they're not playing our specific game, for example, you know, what do they do and what, what do they care about? And how could we marry that and actually cater to that inside of our game?
And I think that's the prep work that you have to do if you go to a brand and say like, Hey, Hey, Washington Post, there's, there's a really cool game out there that's called News Tower. Really cool. It basically lets you play, you, you run the newsroom in the 1940s publishing organization and you play against other people and it's about can you build the most successful newspaper? Really, really cool stuff. So maybe it's a New York Times, maybe it's another brand that you want, you know, you want them to do advertising in your, in your game. But let's just say Washington Post. You go to the Washington Post and you're a news tower, and you go, okay, here's why we think you need to be in our game. Here's our audience. They actually subscribe to these different news outlets.
Kalie: Yeah.
Bastian: Some subscribe to the Post. A lot of them are previous Washington Post people, 'cause they're struggling with subscriptions right now. So, there's affinity here, but they churned recently. We have very, really good engagement around this.
We think this is an incredible opportunity. Here are the values that you stand for. Here's what our audience is craving. Here's how we could imagine an integration. What it could look like and how it, how it could help you. So, I think leading with that input, with that level of detail and understanding, rather than, well, our audience is young, we give you access to young people.
It's like, okay, great. Like, why that spec? Why are you trying to have a conversation with me versus my three other competitors or 15 other newspapers or news outlets that you could go to? I think that's the number one that you could really do as a, as a, especially as an, you know, as an indie invest and, and make sure that you know your player base more deeply and intimately than anybody else out there.
And that's gonna give you opportunities to go, we should talk to these people versus we should talk to this brand. And if you have trouble reaching them, you know, whatever. LinkedIn might be hard. Email might be hard. The best recommendation that I can give, where you're gonna find a lot of those folks is at advertising conferences.
So, you're gonna have to venture outside of your gaming conferences a little bit. If you go to Adweek in London or you go to Adweek in New York, or, you know, SEG Three was obviously really good 'cause that brings it, you know, a little bit more together.
Kalie: Yeah.
Bastian: But I would go to those events where it's the intersection of all those or specifically advertising conferences and you're gonna run into the right people of across all the different brands, you know, sooner than later.
Kalie: So, if there's one thing that you would want game studios to take away from this conversation, would it be the segmentation or is there anything else?
Bastian: It's definitely the segmentation. And then the other component I would say is don't, a lot of studios, unfortunately, not, I, I should say some studios and more than I would like, at least personally, have almost an allergic reaction to when you start talking about brands and brands going into this space.
Like, well, the purity of my game and people are, players are gonna hate it. And this is for players, and I don't want this tainted. And you're right with all of that, however, there's a commercial reality that is playing out in real time. And at the end of the day, if, if you don't have a game that makes meaningful revenue, that pays for all of the salaries for your team and for your office space and for your electricity, you don't have a business.
Kalie: Yeah.
Bastian: And this is one of the most effective ways that's right there. That is where the world's moving anyway, that can help you really solidify and grow your game, meaning your business. So that's the other takeaway in, in addition to the segmentation piece and just really understanding your people.
Don't fall into the trap of having that immediate allergic reaction to, I'm not touch, my brand's not touching my game. Like, be open-minded. Be open-minded to that conversation. Go. You don't have to work with everybody. You don't, but think about this. Read up on this stuff and start to understand that this is a reality that's sooner or later gonna happen anyway.
And think about and creatively explore what brands you maybe would like to work with that could be a fit for your game. Start there. You don't have to work with everyone, but at least be open-minded and, and explore avenues of, there's also a lot of good that can come out of those different collaborations that might change the trajectory if your entire studio.
Kalie: Absolutely. So, before we wrap up, will you tell me a little bit about what is next at SOLs? I know you guys sit at the intersection of AI, so it's a very exciting time. Yeah, I'd love to hear a little bit more.
Bastian: Yeah, abs, happy to. So, we're currently scaling our first AI application called Alaris, which is like, it's an AI chat bot that runs on top of our own proprietary psychological database that we have been collecting over the last eight years, and that we're constantly collecting it's model agnostic underneath. So, think of like it's your, your researcher, your marketing strategist, your insights person, and your content creator all in one. So, it lets you create personalized content for your audiences actually against and, and, and you know, with the understanding of what are the unique psychological drivers of my audience that I'm trying to reach.
So, it's really cool when you start to compare output. You give ChatGPT the same prompt you give Alaris, the same prompt output is completely different because we just have more insight into psyche and the, the drivers of the people that we're trying to reach. So, we're really excited about continuing to grow that.
It's looking really promising right now. And then the other thing that we're really excited about over the next few months is we're starting to go live with our own API layer. We're effectively building out an infrastructure layer for publishers, developers, engines, backend tools, content recommendation engines, you name it, advertising networks, to connect to that layer, to start using our data to drive deeper personalization into their environment.
So, if you're running a multiplayer game, you shouldn't just be matching people off of skill or resources that they have. You should match 'em off of psychology based off of who's gonna have the best time playing together, as well as playing against each other. We actually seen that this drives a little more than 20% engagement increase because people have a better time playing with people.
They naturally like or gravitate towards or, you know, what's the, what's the next best movie or next best game someone should play or, or watch? Or how do we bring the best people together who should see which ad in an ad network? So, that's the next step for us is, basically making the intelligence that we have and that we're able to collect really accessible and empower other people's applications and use cases at scale and letting everyone benefit off of this insight to drive more personalized experiences for people out there.
Kalie: That is really exciting. We'll make sure to include the website and contact details in our show notes. Thank you, Bastian, thank you so much for joining me in the Naavik Gaming Podcast, and have a great time at the Olympics.
Bastian: Thanks so much, Kalie. Really appreciate it.
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