Game Economist Cast

E36: Pokémon Pocket's Gimped Trading and Matthew Ball's State of Gaming

• Phillip Black

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Pokémon TCG Pocket is one of a handful of games to implement P2P trading on mobile. Yet it sucks. On purpose. As @Eric explains, their game economy needs high sinks to combat hourly sourcing of card packs. Without the nearly 80% trading tax, prices would tend toward $0. However, that's secondary to a UX that is so gimped it makes Friend Codes look seamless by comparison.

We deconstruct Matthew Ball's new State of Gaming report slide by slide (or at least curated slides.) @Chris thinks we're failing to keep pace with inflation, putting the industry at risk, while @Phil wants to know why TikTok is winning at the margin. Is gaming becoming LESS compelling relative to social media?

Eguan:

Yeah, a little bit. Your shirt, yeah, I guess it works.

Phillip Black:

Show me the, patch. The patches tweet. Yeah, the

Chris K-S:

Oh, the

Eguan:

Oh you're not a professor, yeah.

Phillip Black:

garbage.

Eguan:

Maybe he's just like a, a new professor. He's

Chris K-S:

This is an example of like impulse buying where it's like, do you want this 400 jacket? That's from Scotland. No. do you need it? No. Do I want it?

Eguan:

You'd be surprised.

Phillip Black:

Economist cast episode 36 Eric is back from being down with the sickness. You missed an exciting cast. I was trying to channel my best Eric impression. I don't think I did very well.

Eguan:

Yeah, no, you asked my question. I appreciate that, the Game of Thrones stuff.

Phillip Black:

I thought it was really interesting. We, Matt was a great guest to have. I think we tried to push them the best we could. I won't be more combative.

Chris K-S:

there's two, two breeds of economists, the the what's the word? I'm like the combative types types who like, don't really want to get into a super I don't know. I was in grad school. So there's almost this Okay. Everybody can mentality

Phillip Black:

We have two topics today, one of which is one that we are been all over. I think Eric, you've been all over it forever, is that Pokemon TCG pocket is introduced trade.

Eguan:

That's right. It's in the name TCG trading card game, right? So they're like, Oh, we got to do trading, but like no other digital game card game does trading that much, or most of them don't. Anyway, we'll get into it. It was a big fiasco.

Phillip Black:

I was trying to find the clip, but we talked about this a couple of hours ago when we all thought about, we were all, considering an economy with trade and one without with the dusting economy. And we all universally said dusting almost without hesitation. And yet here they are topic, number two, Ball, we may know him as Mr. Metaverse himself has done his monster deck for the year, the state of video gaming in 2025. 200 plus slides and we have curated, the best of the best now hits volume one, Matthew Ball, 2025. There's so much to talk about. But before we do, what have we been playing?

Chris K-S:

I am going to be playing Monster Hunter Wilds, the beta. They have an open beta the 6th to the 9th and then another one, I think, their

Eguan:

this the new title or the new expansion pack?

Chris K-S:

new title. This is a completely new title. I would say it's it's like Monster Hunter Worlds 2, where Worlds was like their first foray into kind of a more open world environment, seamless connections between between map areas and high fidelity graphics for the high powered consoles. Is that's why I'm wearing a suit. It's a special occasion. It's Is a holiday for

Eguan:

take the day off work to grind it.

Chris K-S:

game, super jazzed,

Phillip Black:

were a monster hunter, Stan.

Eguan:

Yeah, he's Mr. Dark Souls in Monster Hunter. I thought that was his whole

Chris K-S:

dude. I feel like I talk about monster hunter and dark souls pretty much between that's 90 percent of the games I play.

Phillip Black:

for these for monster hunter?

Chris K-S:

Yeah, usually I didn't play the Iceborne DLC for Monster Hunter World as much, but I've been grinding away. I've probably put about 55 hours in the last couple months into the Monster Hunter DLC Sunbreak, which is pretty cool. A shit DLC, but that's besides the point.

Eguan:

always wanted to get into Monster Hunter, but none of my friends play. I might hop on Wilds with you when it comes out.

Chris K-S:

You're more than welcome to. I I have to admit I'm a bit of a lone wolf when it comes to Monster Hunter. It doesn't, just doesn't have the same oomph when you have help to defeat a monster. When you bring a monster down to its knees, yourself, just a man and his lance, Oh my

Eguan:

The way God intended.

Chris K-S:

more satisfying. So I will be playing Monster Hunter

Eguan:

What's your favorite weapon?

Chris K-S:

It's funny. I used to growing up. I always played long sword. But then in recent versions of the game, they've really improved the Lance mechanics and I just love it. You're just indestructible. You can't really be killed. If especially if you got a good build the only heart, the game becomes hard when monsters can do chip damage because all of a sudden you can't just block everything. Yeah, Lance for sure. I think I've got I think I've got over a thousand hunts in the current in rise on Lance.

Phillip Black:

on, can you talk a little bit more about the stat system? You're, so you're saying they introduced something that overrides the block stat called chip.

Chris K-S:

So I think that monster hunter or I know Capcom publishes, I don't, I can't remember the studio's name. It's like double

Eguan:

I think that's a hotel.

Chris K-S:

They've done a really good job at juicing the old weapons and the old mechanics to make them more and more interesting. I think rise is an example of where they took it too far. They introduced this mechanic called a wire bug, and it allows you to jump around the map. It's like you can think of it as like a grappling hook, basically. and it really changed the way that some of the weapons worked. In my opinion, not for the best. Like I never use it. But anyway, one of the big advantages of using Lance is that you

Eguan:

It comes with a shield.

Chris K-S:

you're blocking now. Yeah. So you've got a shield and you've got a Lance. And there are certain monsters that have really powerful attacks that will put damage through your shield. So you'll take what's called chip damage. And they have chip damage in Dark Souls as well. So certain fields, if they don't have 100 percent physical block, then you will take damage through them. And that's an interesting think they've always had chip damage, but as physics has gotten better, they've also been able to add in more physics based blocking. Like, how much does your character get pushed back? Because that's going to determine how quickly you can attack. there's a lot of really cool stuff that The hyper realism does add something in terms of the gameplay. I love the arcadiness of monster hunter games. Click, block, attack, block, attack. There's patterns. You're just trying to hit combos. A lot like a fighting game, but it's more three dimensional, which I like.

Phillip Black:

I have been playing a lot of Marvel Rivals, the infamous Overwatch competitor.

Eguan:

don't think they're even competitors at this point. I think rivals won.

Phillip Black:

it have to be zero sum? I looked at the Steam numbers on DeconstructorFun, that other ugh podcast, and it did look like that Overwatch took a dive. But Eric, you disagreed with that. You thought that there actually were more people, if I remember correctly, that are out still in the Blizzard launcher that are more hardcore fans.

Eguan:

So I look, remember looking at TF2 and Overwatch when Overwatch launched again, two very similar games, class based hero shooter, colorful. And. The cannibalization of TF2 to Overwatch was actually very small. And so my interpretation of the results was that they actually reached different audiences, despite being very similar genres and very similar gameplay wise, possibly because Blizzard is their own bubble and then Steam is was its own bubble. And so my theory is that Marvel rivals, Blizzard's kind of got this weird moat around Battle. Net and it's my theory is that Marvel rivals probably didn't cannibalize Overwatch that much because. Blizzard has their Battle. net moat. And also, Overwatch is pretty old. They've been churning players for a while. It's not like those players were The players who are still on Overwatch are kinda committed to Overwatch.

Phillip Black:

I also heard the steam launch didn't do much for them either that it was basically net neutral that maybe it diverted traffic and people redownloaded So I think there might be something to the theory that there's non parallel trends too. Like we could say that Steam numbers are down, but the blizz dot and net metrics are rather stable. And that would be an overall lower impact on the player base than if we just looked at the steam numbers alone. But it does look like there's something there clearly is some sort of trade offer opportunity cost here, which is interesting because Marvel rivals goes 3d and it's very clear to me why they go 3d playing in the, or

Eguan:

Third person?

Phillip Black:

Third person? because it's as it's so mainly heavy. The game, it's so much less focused on you refining the aiming mechanics. And there's a ton of you spamming melee attacks over and over again. It's not like they try to have you conserve ammo. There's an unlimited amount of ammo. You do need to reload like a clip, but the ammo is still unlimited. So there's very little reason to ration. when there's little reason to ration, you tend to spam the attacks quite a bit. And because they're me attacks the readability and the mishmash can get really complicated really quickly because the abilities are so diverse as well, which is something that I think MOS have struggled with quite a bit, is just readability, especially for a third person audience. Like even Overwatch, if you try to bring in someone who hasn't played Overwatch before and have them watch the Overwatch League. It is confusing as fuck, there really isn't a center of combat. There's combat happening everywhere. There's fantastical abilities. There's ultimates going off. So I've actually struggled Marvel rivals to fight the fact that I love Marvel. I love Marvel to pieces. And the thing that's also been surprising to me is they also have very little content. I've been surprised that no one has taken the original Overwatch and apex legends monetization template. Of having a very simple loot box style system where you open up loot boxes and you get crafting currency along the way, which essentially serves as a shortcut to what your ranked preferences are. We could say for every 40 boxes, you get enough crafting currency to craft any epic you want, which ended up being, I would argue, a really good trade off for like HD audiences that hate monetization. I'm just really surprised they haven't moved forward with a system like that. And they're doing all bundling of skins, direct purchase only. And they're not selling characters, which is mind blowing to me. So I've been disappointed. There's no vertical progression. There's no horizontal progression. They don't sell any of the characters. And

Eguan:

Wait, so how do they monetize? Is it loot boxes or is it a la carte skins? All the characters are free, right?

Phillip Black:

exactly, it's just the bundles of cosmetics that are available for direct purchase. And

Chris K-S:

Basically, Fortnite's model,

Phillip Black:

Fortnite's model, but they don't have the content pace that Fortnite has or the level of selection. That's one of the things the Fortnite store has done is that they've added spend depth by just adding inventory. Like they've gone from having 11 items in Fortnite's directing direct score to I think it's 40 now. And not only that, they have things from the vault, the supposed time limited things are back. Like they built a library.

Chris K-S:

Is relatively new game, right? Don't they have time to build up a library? And let's say, Eric, your point, like you think Rivals has won, I'm like an outsider on this. I have not yet dived into Rivals, but how do we know that they've defeated Overwatch?

Eguan:

are playing Rivals. I don't know, it's the hot game.

Phillip Black:

Now,

Eguan:

It wasn't even a fight.

Chris K-S:

yeah, it's a hot game. Overwatch is fuckin

Phillip Black:

You look at the

Chris K-S:

eight years old.

Phillip Black:

and we don't have the charts in front of us, but we're talking about 500,000 CCU, which is just on steam alone. So you like add console to that. And it's been doing not I thought it would do better on consult. Consult data is hard to get at. Oh, we have a sarna. which is just us based and it's usually nine or 10th and the PSU charts for consoles or the MAU charts, which I thought would be better because it's a, I thought the controller would be a better, control scheme, but this is huge, Chris, this is like a huge game. And the early reports, I think we're 150 million in the first month.

Chris K-S:

Okay, so better performance than Overwatch's launch. And that's why people are

Phillip Black:

I would argue. Maybe Overwatch 2, but not Overwatch 1. It's,

Chris K-S:

So then what's the concern? It's like a new game, of course. All those charts look like this. Every single new game chart looks like this.

Phillip Black:

not declining. That's the thing that has blown people's minds is that they

Chris K-S:

Oh.

Phillip Black:

1, which is the Mr. Fantastic Season, or excuse me, Fantastic Four Season, and PSU spiked again.

Chris K-S:

Okay.

Phillip Black:

That

Chris K-S:

That would be interesting.

Phillip Black:

Because, I was arguing that if this game went south, You have Super Vive, which is the MOBA game kind of bombed. You've got Spectre Divide, which bombed. If you remember for that one, those one go after CSGO

Eguan:

Concord?

Phillip Black:

Concord went down, for a count.

Eguan:

Here's a question. Is this the only live service success story in like the last year?

Phillip Black:

Yes. No. I think

Eguan:

When's the last one?

Phillip Black:

it depends on what you call live service success story. PUBG like converted to. Free to play, I don't know, does that count? I would say, Warframe has been growing, does that count?

Eguan:

Let's talk about new games. New game.

Chris K-S:

It's got to be launch launches.

Phillip Black:

just came out around this period from the Chinese. That one's been largely stable, although I don't

Chris K-S:

Do we count, isn't there a New Call of Duty game. that came out?

Phillip Black:

metrics

Eguan:

that's not a new game. That's not, I don't consider.

Phillip Black:

It's under one skew in Steam, so you can't also dice out the free to play version. Which is super annoying. I think that is, I would say maybe thrown in Liberty has been pretty doing pretty well. This is the Korean MMO that Amazon games localized. It's number 45 on the PSU charts. I would say in the other one that I think is only the real long term hit, or though it's really down is Naraka Blade Point in China.

Eguan:

That's old though, right? That's been a while.

Phillip Black:

It was 2021.

Chris K-S:

IP the reason that rivals is is such a success? I would guess not because that wouldn't explain the sustained users. I feel like I P is enough to get people in the door, but it's not necessarily enough to keep them around. So I'm curious what we attribute the the retention to.

Phillip Black:

a character every month and a half, they said, which is an unbelievable breakneck. It's interesting, like when you read about Deep Seek, the model from China that I think scared the living daylights out

Chris K-S:

Yeah. So

Phillip Black:

the Chinese were catching up to AI progress. But like when you look at the same axis along games, I actually think the story is more compelling about how fast China is getting good at this because Marvel Rivals feels like a Western game.

Eguan:

Yeah. And

Phillip Black:

a little bit of veneer, but

Eguan:

even those live service success stories you listed, right? Rivals Delta Force, Blade Point. Those are all China. None of these are coming from the West anymore.

Phillip Black:

correct. And I think you see deadlock, which is way down the finals. If you remember, which is from Embark is way, way down. Once human is the only other one I'd point to Eric and that's another Chinese studio.

Eguan:

We'll talk about this in the state of gaming stuff, but yeah, it, part of, I think the Western gaming industry. struggles right now is that the emerging markets are better at making games domestically.

Phillip Black:

I think that the one last thing I'll say about Marvel Rivals is I think it goes back to one of the core HD design concepts, which is horizontal versus vertical progression. One of the things I think is also a factor here is just absolute content pace, just the supply side factor. And so when I think about the fact that Marvel Rivals can have content drop every six weeks, it's one way to think about. You're trying to build as many retentive units as possible. And retentive units is like a piece of content and then how often the content drops and then what the retentive effect of that content is. It's the expected value of those things. And Marvel rivals has opted for like quantity, I would argue over quality. Each overwatch character has X number of hours of mastery. is inherent in the design, to reach satisfaction. We could come up with a more specific model, mastering roadhogs hook is thousands, hundreds of thousands of hours of gameplay and overwatch based on the way it's tuned and the way it aims, all those things. And Marvel rivals, I don't think has any of that blizzard polish, but they do have his pace. And this is how China wins, I think.

Chris K-S:

you think this is purely like live service working at its most, efficient where the content, the new content is what brings people in the door. You don't think there's anything inherent about the design that's keeping people around.

Phillip Black:

that they didn't fuck up. They didn't fuck up a lot. I think they win here on content and IP. I don't think they took a lot of risks with that. All the characters do what you want them to do. There's some nice things like their team ups, where, for instance, if you have Rocket and Groot on the same team, there are bonuses you get. So I think what they did really successfully in this design is they met expectations. This is what you'd expect.

Eguan:

I've heard a lot of praise for the character design as being very sharp. Like all the characters feel overpowered in their own way. And a lot of competitive games designs actually turn into mush because they don't allow things to be overpowered.

Phillip Black:

I think that's fair. I also would argue that's the most shocking thing I think coming from like a normal shooter to a hero shooter to this is that the TTK or the time to kill each character is really high. Everyone has like a copious amount of health. There's a lot of healing. It feels much closer. It's even Everyone's squishier than in a traditional MOBA like DOTA. I think that's one of the things is there's not as much power scaling. Like play like a, you might call a hero shooter versus a MOBA. There's no in round progression beyond the ultimate. So everyone's pretty squishy throughout the match, which I think is a mess in my opinion. I wish they actually went a little bit more MOBA y.

Chris K-S:

So the. The game is slower. Saying it's slower than it

Phillip Black:

It's a lot of

Chris K-S:

competitors?

Phillip Black:

hitting the same button over and over again of someone applies armor and healing.

Chris K-S:

That's interesting. I would assume that more death more like a lower t. K. Would would be good for retention. You get more kills. There's more action, more excitement. I bet there's some sort of a bell shape there where it's like

Phillip Black:

It's

Chris K-S:

you want just enough

Phillip Black:

I think if you apply the assumption that there's a bunch of kill inequality, that very few players are responsible for the most number of kills, then I actually think this turns that observation on its head because there's just less deaths, so there's actually less inequality. There is proportionally, but it's not as punishing.

Chris K-S:

Yeah, like in absolute terms maybe you even throw some psychology in there. It's you look at the numbers at the end of the match and you go, Oh, I got one kill and this other guy got eight. That's not as bad as if you're playing call of duty, it's Oh, I got two kills and this guy got 54. It's like an

Eguan:

Hey what happened to Deadlock?

Chris K-S:

That's interesting.

Phillip Black:

I can't explain it. No,

Eguan:

the the Valve shooter MOBA. Is it still alive? Is it,

Phillip Black:

off

Eguan:

did it launch?

Phillip Black:

terms of PSU. It has still been, they've still been releasing updates for it. They put a

Eguan:

What's PSU?

Phillip Black:

your players, simultaneous users, just the amount of people online at the same time. But if you look at SteamDB right now, Deadlock is, actually, fuck, let's just pull it up. I wish I, man, I should

Eguan:

Okay, but

Phillip Black:

prepared.

Eguan:

didn't pull it back or like anything, they were just like, Yep, this is the game.

Phillip Black:

Yeah, it's good old,

Eguan:

Oh, release date to be announced. Okay, so they're like, they're doing the Oh, we're still in beta thing.

Phillip Black:

yeah, it's the Gmail thing.

Chris K-S:

There are no reviews.

Phillip Black:

don't allow

Chris K-S:

I'm surprised by

Eguan:

Yeah,

Phillip Black:

technically invite only.

Eguan:

And they know how to game their own steam store system.

Chris K-S:

Yeah, I know. It's that's interesting

Eguan:

Yeah.

Chris K-S:

game has no reviews.

Eguan:

I've been playing Pokemon pocket Pokemon pocket TCG. I know it came out three months ago, but it's the only other major card game on mobile of note. Obviously as a marble snap, not marble rivals developer. I'm looking at that it is the best loot box opening experience I've played. And it is awful gameplay. Like the gameplay is so repetitive and boring and stale. And I can ramble. I don't want to dig too much into it, everyone knows the Pokemon card game as a kid. They all collected the cards and nobody knew the rules for how to play. It's a similar vibe.

Phillip Black:

But they simplify it, don't they? They do the thing that all TCGs are doing where you basically don't have to worry about the colors of the mana or the energy.

Eguan:

that's right. Yeah. So the game is simplified, streamlined for mobile. Yeah, there's autoplay, right? You can just press a button in the game. I'll just play cards for you, which is yet another sign that they're like, Hey, actually the gameplay sucks. So maybe just let the little kids, they just let them watch the cards and watch the animations. But they simplify the game. They'd made some nice adaptations to make it work better on mobile, smaller decks, automatic energy drying, allow the frustration. But what happens is all the cards do the same thing. There's a grass type Pokemon that, you put three energy on it and it attacks for a hundred damage. And then Pokemon. That you put three energy on it and attacks for 102 damage, like it's like the, it's, there's a lot of thematic re skinning of stuff, but like all the cards basically just do the same thing. You level up the card, it does more, you put energy on it, you attack with it. I'm glossing over a lot here, but yeah I, after playing it, I'm like, oh, actually Marvel Snap is actually a pretty good game. But what I think is, have you guys played Pocket?

Phillip Black:

Oh, yeah,

Chris K-S:

No, I'm trying to download it right now

Phillip Black:

the

Chris K-S:

or trying to log in.

Phillip Black:

simulator. I've ever played

Eguan:

Yeah, I

Phillip Black:

though

Eguan:

yeah, no, the pack opening experience feels amazing. And I like, I felt compelled to log in and open packs, even after I stopped playing the battling.

Phillip Black:

But everything around meta collection is so beautifully done. Like you have an album where you put all your cards They're ordered from the orders of the Pokemon that they're in There are holographic versions which have new animations behind them like those gifts from Harry Potter, which are really cool And not only that I think the other thing they do which is really cool is when You have this exchange system. I don't know, Eric you guys talk about they have this trade system and you can get cards in other languages, which is really cool too. Like you can get checked German and Jeff, like it's, it feels like a true code game for collectors.

Eguan:

Yeah, they definitely took a lot of the ideas from physical card game collection and were like, put it in here. And part of me wonders if this only works because paper Pokemon TCG was so popular that people are like, yeah, I'll take my cards and put them in a binder, right? Whereas if it's like. Hey, collect these cards for this game you've never heard of, these characters you've never heard of. Oh, you want to put them in a binder and show them to your friends? I don't know. I view it from the lens of a Snap developer, I'm like, Hey, actually, a lot of this stuff is not stuff we can copy or replicate because Like they're going off like a, a two, three decade old established, paper nostalgia product.

Chris K-S:

So is there a literal binder? Like you sort your cards, you put them in binders,

Eguan:

Yeah. So you can take your card collection, you can put them in a binder, you can feature a binder so your friends can look at your binder, and you can put like, Oh, here's my page of all my shinies, or here's my page of all the Eeveelutions,

Chris K-S:

organization could be done in

Eguan:

Yeah, but

Chris K-S:

know if it's like

Eguan:

I think people care about arranging their collection and showing it to their friends with Pokemon in a way they don't care about for, Marvel snap or hearthstone, or

Phillip Black:

have metacollection features,

Chris K-S:

that's fair.

Phillip Black:

certain collections of albums, they do have a reward track, which I found really nice. To our friends

Eguan:

I completely ignore that feature, it's unclear how incremental it was.

Chris K-S:

So you said that's a loot box simulator. It's it doesn't sound like it has anything to do with the actual game. So are we, have we found a new formula for free to play games? Just take out all the boring, that stupid gaming

Eguan:

So I think this only works because of the popularity of paper Pokemon card games. I don't think people would be interested in opening loot boxes full of stuff. That they have no prior, emotional attachment to, or, yeah.

Phillip Black:

yeah. I think

Chris K-S:

Yeah. So

Phillip Black:

you got to put in context, which is that the Pokemon TCG paper game in Japan does 1 billion alone. If you walk around Japan and you go into a lot of the, the otaku shops, when you look at things that are displayed in the card rack, it's almost always Pokemon cards. Then it's one piece magic doesn't really get much of a showing. And then it's Yu Gi Oh somewhere in there too. And Pokemon is always like numero uno. And so you already have a built in physical audience. They've been starved because the only other version before this was a goddamn fucking version where you basically had to register your physical cards and the digital cards. You couldn't even make, you couldn't even make a payment in the fucking game, which is very Nintendo, right? yeah, I don't, this is why I think this thing is going to struggle in the long run. It's already done 300 and like 70 million, just to be clear. But it's it's tearing it up, but it's mostly Japan. You

Chris K-S:

How does the progression work? Do you win cards by winning games like in Marvel Snap or is it like loot box, can I just go and buy a bunch, a card pack? What's the progression look like?

Eguan:

Sorry, what was the question?

Phillip Black:

What is progression?

Chris K-S:

How does set collection work? Do you get cards by winning games or do you get cards by opening

Eguan:

So it's all pack driven, right? Just like the paper game. You get these packs, they, and they're simplified. They only have five cards in them. Every day, every 12 hours, you get to open a pack, right? You get, there's three, four booster pack versions. You can pick from, you pick a pack and you open it. There's a beautiful animation where it rips open and the five cards go fly out and bling new card, Oh, this one's super shiny, right? Lots of. Yeah, no

Chris K-S:

amazing.

Eguan:

juice, right? It just feels great. It's just like it,

Phillip Black:

It's

Eguan:

Asmr. Yeah. Yeah. So you basically open two packs every day. And for a lot of people actually who talk about the game, they're like, yeah, this is it is my like gambling addiction of as a kid paying 3 to open a pack. No, I just do it on this mobile game for free. So I think a lot of people just the pack opening experience is a huge part of the draw. Yeah. You can earn these things faster. You can pay money to open them faster. And then there's like daily quests and shit like that. But for the most part, it's just, you wait, open packs, buy, open packs. Battling basically is super under emphasized. It's you don't get jack shit from battling. There's there's a bit of a single player quest line where you, it teaches you how to play and you earn more packs that way, but it gets capped out pretty quick. And for the PVP battling, there's basically, there's no Ranking system. There's no progression system. There's no ladder rewards. There's no Chris is showing us the shiny Mewtwo EX he just opened. Yeah.

Chris K-S:

So good. Oh my god.

Phillip Black:

Chris

Chris K-S:

It looks amazing.

Eguan:

But yeah, you can tell from the game that they emphasize heavily the pack opening and collection and they strongly de emphasize. The battling I can't think of another game where there's no metaprogression rewards. There's no like achievement rewards, no ranking system,

Chris K-S:

So there's literally

Eguan:

unless you want to battle

Phillip Black:

No, there is missions you get. There are missions that give you currencies and rewards.

Eguan:

The single player. There are single player missions. There's no PPP missions. There's no like reason to do PPP unless you just want to do PPP.

Chris K-S:

how do you accelerate your pack opening?

Eguan:

You can do the single player missions which again are finite and capped out. Or you can spend money.

Chris K-S:

Damn. you literally just 3 for a pack

Phillip Black:

It's more fucked up than that. Chris, what you do is you buy the accelerators on time. Remember we were talking about those two packs that Eric buys per day. You buy an accelerator on the time. So rather than buying a pack directly, you have to buy that time expiration. So they price everything in time. Which is going to bite them in the ass. And the other thing that can happen is if you get their subscription, which they have a free trial for, have you ever heard of someone with fucking IEP free subscription is weird. Oh my God, I'm going to learn the experience of opening an additional pack and that'll convert me. but if you get on their battle pass subscription, you get an additional pack open every 12 hours, I think, or 24 hours,

Eguan:

Why do you think pricing and ti

Chris K-S:

So these things are

Eguan:

Why do you think pricing and time is gonna bite them in the ass?

Phillip Black:

I think It forces you to price everything in whatever that unit of time is. And that just feels way more annoying to me than doing something direct purchase. I guess I'm trying to think about, so if you want to raise time, I guess you would raise the expiration of the timer, which I think is a weird way to price things like they could come out with a premium pack. So right now they're going to go through different sets, right? And every 12 hours, I think the question is what's going to happen after those 12 hours expire. Can you always get the new pack or can you always get an old pack? And if you want to do price differentiation, you want to make one pack more expensive than another, then you have to do that in time, right? You'd have to say, Oh, you have to wait. 18 hours rather than 12 hours. And I think there are a lot of consequences to how you think about your particular day of engagement session that are designed baggage that you don't want. Whereas currency compresses time and space, which is why I think it's money is a store of value and that I think is why it's such a compelling mechanic for economy designers. And I don't think this is the right tool to do all distribution, just free to play distribution.

Chris K-S:

It sounds like it's a way to it's almost the. I don't know, a combination of the hangover effect or something where you don't want every, you don't want somebody to do all of their spending right up front and then never come back, you let them do a little bit of their spending every single day so that the retention is longer and maybe their average spend per day is lower, but their retention is longer. So LTV increases. But I think it's interesting that they decided to go with a completely different system than what was already out there. Hearthstone and Magic the Gathering Arena already have I don't want to say they've figured it out, but they've got pretty good systems

Phillip Black:

Eric, you wrote a piece on TCG's pockets trading system, which launched this week. It also had record revenue, by the way, up to 6 million. There was a content drop and expansion drops and move. That was it. But 6 million a day up all time highs. It was actually trending down to a million a day, huge reversal of fortunes with trading and the expansion pack. So who knows

Eguan:

Has it actually reduced their revenue? I haven't looked at any stats.

Phillip Black:

It was since trading came out.

Eguan:

Yeah.

Phillip Black:

Oh no. It's way fucking up. It's all time highs.

Eguan:

Okay. Wow. Okay. Yeah. So Pokemon trading, this is the, I think, interesting topic that's really interesting for us as like game economists. So most. Digital card games, Hearthstone, Magic Arena, et cetera, do not allow for trading, right? And they do this on purpose because trading devalues the cards you open. If you can you open a bunch of card packs or loot boxes give you a bunch of fluff. If you could just dump that fluff on the secondary market, Oh, all these common cards are a penny each, right? It like devalues them and, makes you less excited to open packs, et cetera. Those secondary market sales undermine the primary sales that you get as the card. Printer. And so you don't want to allow for secondary market sales. So the trend in digital card games is to remove trading and instead they'll have some kind of flexible, card acquisition system where you can get cards, specific cards you want inefficiently, or you can get random cards very cheaply. So the way this usually works is random cards cheaply as you open packs with random cards, and maybe you can disenchant them or dust them or turn them into wild cards to get specific cards you want at a more expensive rate. So that's how most card games do it. I know there's a bunch of web three people who are like, Oh, look, let's bring back trading. I think they're all like wildly misguided. We'll see how it turns out. Maybe I'm wrong. So this brings us to Pokemon TCG pocket which first off TCG in its name trading card game Pokemon TCG pocket. promised trading when they launched as part of the, they're like we're going to bring trading. We know that's core to the Pokemon card game experience that we want to deliver there. And I think this is interesting because, again, it's deviation for what other games are doing. And it makes sense for Pokemon because like we mentioned earlier, so much of the value of this game is opening packs and collecting them. Rather than the battling itself. And a big part of what makes you excited to open a pack is also like the trade value of the cards. You're like, Oh, like I got this shiny, my third shiny Mewtwo. Okay, I don't need another Mewtwo, but hey, this is considered valuable. And the second, and maybe I'll trade it to my friend who really wants it. And so the ability to trade or the perceived ability to trade makes you more excited to open packs. It makes you want the stuff more. However this game. Is giving players free packs constantly free cards constantly right as a digital card game, whereas a physical card game You got to pay money for every card that they print and every booster pack you open so they've got this inflation problem you got all these free cards entering the system and if you allow for trading, aren't they just gonna crash the market? three months after launch They they launched this training system and it is a total shit show they clearly knew this was a problem, all the risks I identified earlier, because they basically made it extremely inefficient to trade. They made extremely high trading fees. Basically it's like an 80 percent fee. So if I want to send you 5 worth of cards 4 gets burned and you get 1 worth of cards is the way I would think about it. Which is insanely high. And on top of that, there's like time restrictions and there's restrictions on which cards can be traded. Like the the newest pack. Those cards are totally untradable. It's only old cards that are tradable and the highest rarity cards are also not tradable. So severe, like the most desirable cards are not tradable. And the community had a big backlash against this and my theory is that they wanted to promise trading and have the perception that trading is available, but they don't actually want anyone to trade because it's really bad for both card game engagement and revenue. So they wanted to deliver the most gimped. Trading system possible, but still be able to claim that trading exists in the game. And wanted to quietly sweep it under the rug. They launched trading right before their newest card set, the space time SmackDown it's like diamond Pokemon diamond and pearl themed. Set which, Phil mentioned a huge revenue spike, it's probably dominating the social media around Pokemon pocket. And the whole trading fiasco was, on fire for two days and then disappeared. And I think this was a strategic. Timing thing where they wanted to sweep that controversy under the rug. They claim they have delivered on trading and then, just forget about the topic of the future.

Chris K-S:

So why did they feel like they had to do it? Cause you can't trade cards in arena, MTG arena. Like

Eguan:

Yeah, I have a couple of theories. One is that just some marketer said they would do it and then they were like, Oh fuck, we got to do it now. One is that it was intentional that the promise of trading. Increases revenue in those first 3 months before they deliver trading the promise that these cards will eventually be tradable increases purchase of those, you see this behavior in web 3 all the time. We promise a future feature and it increases present sales. Yeah and the 3rd is that because collection is so core and because trading is part of what makes collecting interesting, they wanted to. That's like part of the core game for them is the trading.

Chris K-S:

It seems like it would be a pretty big improvement and not change things all that much if they were to just allow many to one trades or many to many relationships in trades. Cause that's like the most crippling. Problem is like one to one trades is just not efficient at all. And I get where they're coming from. Like it sounds like they're trying to emulate good old fashioned, opening a packs and trading. with your friends the type of stuff that happened on the playground. So it makes sense that like you have to go and put through a trade offer to a specific person. I like it, like just purely from a nostalgic point of

Eguan:

Wha hold on no, you have to burn four cards to send one card. If you want to trade your Charizard for my Mewtwo, You have to burn four Charizards to send your fifth Charizard to me, and I burn four Mewtwos, or

Chris K-S:

that

Eguan:

an equivalent rarity card. You have to destroy four cards to send me one card. I have to destroy four cards to send you another card back.

Chris K-S:

Okay, that I missed. I thought it was first of all, I thought it was just like any card, and

Eguan:

But yeah, it

Chris K-S:

you'll just

Eguan:

has to be equivalent tier, yeah.

Chris K-S:

oh

Eguan:

Yeah,

Chris K-S:

it's fucking

Eguan:

I

Phillip Black:

So I don't know. Let's think about the economic consequences of that. So you're only going to burn the cards that have the lowest value. So basically every card basically got a price floor. Which is it's a reserve price, which is it's that It's at least crafting material, right?

Chris K-S:

It's just 5x whatever the price would be, right? Because you're basically slashing all the quantities by 80%. it's pushing the price up five X of

Eguan:

think the easier way to rationalize this is like a dust system like Hearthstone has. Like you can destroy four legendaries, five legendaries to craft one. Think of trading like that. You destroy five cards to craft one of the same tier. And it's mediated through this trading system, but assuming that you can find someone to trade with yeah, it's just a five to one crafting system. Isn't that

Chris K-S:

Yeah. But in, in that, in the dusting system, the new card is coming, it is being emitted out of nothing this system, which requires a.

Phillip Black:

Of the total supply curve. They're like there's there's

Chris K-S:

yeah, it's a destruction of value. It's

Eguan:

the same in the crafting system? Five in, one out?

Chris K-S:

No. In that system, you're getting rid of five cards and you're emitting one card. We could call that like a zero sum or neutral, assuming that those five cards were equal the value of the new card. So you've destroyed, 10 worth and

Eguan:

But no, it's five of the same tier. You destroy five legendaries to mint one.

Chris K-S:

No, I Yeah. Right now

Eguan:

Yeah.

Chris K-S:

about like a dust system like Hearthstone, they also have this in in Arena. The cards that you get, the packs that you get those wild cards are like, they've never existed before. They didn't come from somewhere else. They are, they're being produced versus this TCG, or sorry, the Pokemon system is, it's all closed. So thing that you're burning four cards and just swapping, it's purely net negative. It's purely destruction. There's no production whatsoever.

Phillip Black:

outward these shifts supply curve inward by eight at least eight cards

Chris K-S:

I would even argue the wild cards don't shift supply at all if we ignore rarity. If we just ignore rarity and we just talk about the total supply of cards,

Phillip Black:

Because

Chris K-S:

okay, no, yeah no, you're right. Okay, total supply of card.

Phillip Black:

It's on

Eguan:

Ignore the magic system. I think it's the hearthstone system is the better analogy.

Chris K-S:

I feel like it's interesting, though, because it's a very new way to do things. Nobody's ever done that before. And what you're doing is, let's say I've got a collection of 10 cards 40 cards. Every single time I want to trade a card, I burn for 10 cards. cards. So I'm sorry, 50 cards. So let's say I do 10 trades. I'm down to 10 cards in my collection because I burnt 40 percent 40 cards in my collection. I burnt 90 percent 80 percent of my collection. I choosing weird numbers. So has the other person on the other side of the trade though. So instead of just 40 cards being destroyed now, 80 cards have been destroyed. Whereas in the dusting system, only 40 cards would have been destroyed and you would have just poofed the new cards out of existence like Their emission system, and I'm using the word emission because it's like I'm crypto person, but their emission system is in is not does not come from trade versus like the dusting system is producing emissions.

Phillip Black:

I think is also important for their game economy if they're giving people packs every 12 hours They need some downward pressure on supply and like this now becomes a sink for them Like now every

Chris K-S:

The only lever they have, though, is.

Phillip Black:

getting trading fuel, right? You're getting trading gas now every 12 hours is. another way to think about it

Eguan:

Yeah, that's definitely true. Early in the game's life, when they announced trading, a lot of people were like, Oh, I set up like 10 farm accounts, just open free packs. Cause when trading launches, I'll be loaded.

Phillip Black:

you trade someone nothing? So you really can't get around this trading within rarity unless you do off table stuff. Can you chat in Pokemon

Eguan:

No,

Phillip Black:

Pocket?

Eguan:

no way to communicate the trading UI. Basically is so bad that you have to coordinate trades off platform. There's no way to gift anybody anything. So you have to go through this, burn forward to trade one.

Phillip Black:

you could still solve, so you still, so if you're a third party platform, can you solve all these problems? You can basically get a bunch of trading fees, which a bunch of burn cards you can keep in a central account, and then you can create a bunch of automated systems, and you could have a third party, for instance, trade with In between different rarities by arranging a series of trades. If you want to trust a third party platform, they could figure out the trading logic.

Eguan:

Yeah.

Phillip Black:

You could

Chris K-S:

yeah, it doesn't

Phillip Black:

you enough tools where you could build frictionless trade. If you added enough third party features to a platform, you could basically get around all the,

Chris K-S:

frictionless no, because of the massive deflation rate.

Phillip Black:

But at least what they can do is they can turn that into raw fuel. Like they can commoditize that price because basically what you could do with a third party platform is you could basically send them cards and they basically store another currency just on the third party platform. That's gas. They could literally call it gas,

Eguan:

Yeah. But

Phillip Black:

a currency.

Eguan:

as the person trying to use the platform, it's always five in one out. You can't get around that.

Phillip Black:

Correct. Correct. You can't get around that. So like part of what's going to be the case here is can they get. First of all, I'm going way down this third party platform thing for no reason, but I don't know, the whole point of trade, I think is you can basically get around to any it's so hard to control, right? Like they could, you could build a third party platform that. that does all this.

Eguan:

I don't think that's so

Phillip Black:

a five to one.

Eguan:

yeah. And because, these loot box openings are all, IID, right? There's going to be someone who has a surplus of the card you want. So I don't think liquidity is actually a problem here. Contrary to what my article said, but you don't need the, what I'm trying to say is you don't need the third party platform. I'm just, I'm trying to say is you just, you go on one of these message boards. You say, I have this, I'm looking for this. Someone finds you

Phillip Black:

That's fair. That's, there's a ton of friction in that system. And the reason that I mentioned that as I've been surprised that when I looked at downloads for TCG pocket, since the trading feature, I expect to see a lot in the Philippines and India, because now that there's trade, there should be a wage rate, right? And I was like, okay, why are we, why are people so I guess the wage rate right now, because it's so crippled to your point, Eric. The wage rate is negative, mostly because the burn, right? Is that one of the ways that Web3 can solve things? Like, why doesn't everyone on three just use a four card burn?

Eguan:

because people would flip their shit up.

Chris K-S:

We have rates like that in our game. They're not 80%. They're 6%, right? And they're marginal. We can, or they're increments. We can do decimals. We can do 4. 5%. What they've done is they've introduced a a tax system transaction fee that can only be put on That can only go up. in these massive percentage increments, right? If you do a one for one burn, that's a 50 fucking percent. You can't go lower than a 50 percent in the current system, which is insane to think that you can't go lower than a 50 percent tax rate on transactions, which is a massive, you can't satisfy glycosis theorem in this environment because transaction Costs are percent of The volume. So I think I definitely am in the camp that that you pointed out earlier, Eric, like this was not meant to be an actual feature. They wouldn't have integrated it. I refuse to believe that they would have integrated a Taxation system like this. If they planned on like growing the future into the future, they could replace the card burn with some sort of a currency. Like you burn cards in order to get the currency. And then every single rarity has a different currency. If you want to trade a legendary card, you have to burn 50 dust. And it takes, who knows, maybe it takes, 10 every card has a dust, raider. So they could smooth it out that way. But like they haven't set themselves up to able to use any sort of monetary tools in this environment.

Eguan:

The other kind of cherry on top is the UX is so bad. I won't get too much into it, but it's basically impossible to find a trade unless you are communicating off platform. If you have the game, I would recommend try to even just get any trade done. It doesn't even matter a trade that you want. Just try to get any trade done and you're going to find it impossible unless you're talking elsewhere.

Chris K-S:

Is it like a you go to the person's profile, you click on them, click tray or submit trade. And then you,

Eguan:

right. Okay. So first off, you can only contact friends. There's no messaging, right? Can't say, oh, I want Charizard. You can send one trade request at a time. And in your trade request you offer a card. You don't request a card. You offer a card. So let's say Chris, you've got extra Charizards and you're looking for Mewtwo. You go here and you say, find BillyBob69 and you say, BillyBob69, would you like a Charizard? BillyBob69 sees your request, probably will just ignore it. But if he does respond to it, he'll, he picks a card to offer you. And so he'll see Oh, hey, you want to Pikachu? And you're like, no, I didn't want to fucking Pikachu. I want to Charizard or I want to Mewtwo, right? You have no way to communicate. What you want from him, right?

Phillip Black:

They're you off platform. could you imagine this even without it? We're just going to offer fucking random trades for people?

Eguan:

And then on top of that, you can only have one offer at a time. So you can't even go down your friend's list of 30 people and be like, Hey, everybody, do you want to tell her? Do you want to charge her? Do you want to try that? You can only have one active thing at a time. So like you, you send it to Billy Bob and you got to wait. And at some point you say, okay, actually Billy Bob's not there. Let me try, charlie, and you send it to someone else. So yeah it's awful. Yeah.

Chris K-S:

I would argue the transaction cost is closer to 95 percent even For that.

Eguan:

If you think like the way you would have should have done it is request a card, right? You say, Hey, I want. Mewtwo, like who's got a Mewtwo, right? Give me your best thought. Yeah but yeah the coincidence of once no

Phillip Black:

know how to solve this, right? It's buy and sell orders, right? Just put a page up Card

Eguan:

like this is what I have and this is what i'm not willing to this is what i'm willing to offer This is what i'm willing to buy.

Phillip Black:

bid, ask spreads,

Eguan:

Yeah

Phillip Black:

you This. Like we, we really figured this out. I would say in digital economies, like this is one thing. Even if we've solved this problem, I'm just surprised they couldn't implement. It's not that technically hard to bids and asks.

Chris K-S:

I clearly

Eguan:

Yeah, I think it was,

Chris K-S:

problem. I think they were trying to cause a problem. There are a thousand ways. BoardGameGeek is like a place where you can trade board games and it's pretty archaic. It's still 10 times better than this and it was,

Eguan:

yeah, so this is part of my shtick about it's intentionally bad.

Chris K-S:

yeah, that sucks. That's too bad. I don't think I will play it. I don't know why I downloaded it

Eguan:

Just open some packs, it feels great. Sign

Phillip Black:

just to understand what an amazing loop box simulator is and like how far they can take that simple mechanic

Chris K-S:

It's really taken me a long time to actually get into

Eguan:

up for the free trial of the subscription and then forget to unsubscribe.

Chris K-S:

Holy crap,

Phillip Black:

So we are now going to talk about Matthew balls, impressive slide deck 227 slides. I believe we have gone down and edited them into some key highlights. And the first thing I want to start with, and I think it's the most important thing out of his deck is really talking about the trends in the video game industry when we do what. We adjust for real prices. That is one of the things that has gotten lost in almost all these like economic reports is nominal versus real. And so the first graph he starts with in slide number three is looking at nominal prices, which makes it look like we've been on an absolute fricking tear in terms of growth rates, we're up. 150 percent overall from 80 billion all the way to 200 billion in the last 20 years. That's 2011 and 2021 really good. But again, this is all nominal. And again, this is everything. This is arcade console, PC, mobile VR web. It does not include web three NFTs and does not include Even hardware and accessories, but it looks like we're crushing it, right? but to his credit and slide number four, he gets us to looking at our real spend increases. So from 2011 to 2021, remember we were just talking about this crazy percent increase, I think it was 150%, but when you do it on a real basis. It's only up about a hundred percent. And when he does is he compares that to the U. S. GDP, which is up 52 percent over the same period. Japan, which is down 20%. And then real world GDP, which is only up 32 percent over the same period. I actually don't think this is a good comparison he put together because the thing that's not. Listed here, I would argue is the comparable tech sector, the entertainment sector of the S and P 500. We'll cover that a little bit later, but I do want to give him credit for doing some real growth adjustments. But again, whenever you look at numbers, you have to look at them in context. And the next thing that he has is the forecasts that everyone has put together. And Eric, you have a chart going over it. You make this point way better, but he does have a couple other industries. He has a book revenues, recorded music revenues, and spend on digital video. And while he doesn't have it going all the way back to 2011, so we can't do a like for like comparison, to be honest with you, what he's showing us right here is that they've been on a comparable growth streak. I would say what post COVID it looks like they've been growing while we've been declining. so I think that was another interesting piece of contextualization. The only other thing that I really wanted to talk about is like timeshare. Like I would argue this is crucial to video games growth is whether or not we can grow new cohorts in terms of engagement. And what I mean by that if we can get kids generation over generation to play more games than they normally have, and you just let time take its place, then you're going to stack more engaged cohorts and overall MAU industry is going to increase. And it's been very hard to get good data on this. I tried to look into the American time use survey. is a really consistent time series where they take Americans who keep logs of what they're doing and coders will go categorize them into different categories that has not shown a lot of increases and it has a lot of contradictory data that doesn't seem to make sense and so he pulls from gamer segmentation surveys and an evolution of entertainment surveys and what he shows is that there's 70 percent of Americans play games. However, they're defining that, which I think is pretty incredible.

Eguan:

That sounds high.

Phillip Black:

that sounds really high to me. I like clearly must be survey based.

Eguan:

between these two, I guess between the two survey sources is pretty close, but

Phillip Black:

The weekly playtime among us gamers looks like it's been pretty stable at around 15 hours per week, which is actually less than I thought that clocks in at what? Two hours per day. Little bit

Eguan:

That's a lot, dude.

Phillip Black:

I don't

Eguan:

How much do you play a day?

Phillip Black:

I guess this is average. I guess this is

Chris K-S:

Two hours

Eguan:

I consider myself pretty hardcore, and I play like maybe two hours a day, yeah.

Phillip Black:

think mobile is difficult for me. And I also have a lot of quick sessions on mobile.

Eguan:

And these are all surveys too, so like they probably, it's self reported,

Phillip Black:

garbage. Monthly spend. Let's not even talk about that

Chris K-S:

is the reason we're so ups is the reason we're so. obsessed with playtime because more playtime

Eguan:

Engagement is roughly proportional to hours spent, or sorry, revenue is roughly proportional to time spent gaming

Chris K-S:

to time spent? And that's like partially because of the way we monetize, right? Like we. gone into this world of microtransactions where if you're not playing you're not spending

Eguan:

even in a box product. Let's say a box game is worth 10 hours, then if you play for 10 more hours, you buy one more game. I know it's, I know it's a simplification,

Chris K-S:

I'm

Eguan:

I

Chris K-S:

no I know I was just thinking about like feel like I know, obviously Legos is not The same as video gaming but like your hourly your hour spent per dollar of Legos is probably super dollars per hour is super high for Legos versus super low for video games. And I wonder if it doesn't have to do with our inability to discriminate on box prices. Like, why? Why is it that? It's much easier to internalize why a Lego box is one sets more expensive than another because it costs more to produce.

Eguan:

asking you why is the entertainment value per dollar for video games so high?

Chris K-S:

Was, I was thinking that the dollars per hour of entertainment value is actually really low in the video games industry. And I'm trying to figure out why.

Eguan:

My explanation is that. Video games are software. Software has extremely high fixed costs and low marginal cost. And you make a great game. Every marginal copy of it is super cheap. So like that. Yeah, that's why they're able to produce so much entertainment at such scale. And that the reason it's getting cheaper is that because the gaming industry is getting bigger more or the gaming audience is getting bigger that, fixed costs, marginal costs, then keeps reducing the dollars per hour. Further and further. Price

Phillip Black:

You're thinking of this as a punishment, Chris. Is that, why isn't P higher given how big Q is? And I would argue the thing that's unique about games is that they can make queue so big is that we can make quantity plates so big because we have such repeatability of content, So you can play call of duty for 10, 000 hours. No one is going to watch. Maybe star Wars is an exception, but very few people watch buy a DVD for 20 and then spend 10, 000 hours watching it again.

Chris K-S:

Yeah.

Phillip Black:

what does that mean? That means for us, Q goes to really high. And I would argue like the whole point of monetization as a monetization designer is to correlate marginal costs with marginal benefit in terms of monetization systems. Like which one can most correlate the increase in engagement that games have with the revenue that we're able to generate? That has been the game, I would argue the last 20 years in monetization design is to figure that out. Remember the quarter, the arcade, the arcade is the most basic implementation of this, right? Because it's basically every minute or every 30 seconds, whatever the average play time is, you have to insert another quarter. And so your marginal cost curve is always going to be correlated with your marginal benefit curve to some degree. And I would argue we've just evolved

Chris K-S:

Yeah. They're,

Phillip Black:

Oh,

Chris K-S:

yeah. I guess my main criticism is just or my main question is why are we not able to change price? Like, why are we

Eguan:

is going down.

Phillip Black:

I think he, he gets that.

Chris K-S:

like the price is going down Netflix. You can see Netflix was able to increase, not just nominal prices, but real prices.

Eguan:

So here's my explanation for this movie ticket price. You're it's physical. You're like the marginal cost is actually pretty fixed. Can't really bring it down. Same for concert tickets, although it is actually going up. Netflix, I think it was cheap here because of, Startup subsidies and they were actually losing money. So I think this price increases actually them just trying to make money.

Phillip Black:

with how you think about their ad skew and bouncing people between the paid and the ad supported ARPU and, globally, there's a lot that's going on in these numbers. has one for games. If you go to slide

Chris K-S:

yeah,

Phillip Black:

he brings in a catalog for Toys R Us 1992, and he takes the prices that are in there and he inflation adjusts them. And even if you just look at the anomaly in 1992, you're looking at 60 to 70 a game. And

Chris K-S:

oh yeah it's insane Man is

Eguan:

didn't know they sold super Nintendo games for 70 bucks.

Phillip Black:

Game prices have always been historically high. They've gotten progressively cheaper, which I actually think is another technology story of technology just actually gets cheaper, but remember, we also have DLC, we have deluxe editions, Like we figured out how to price discriminate, like this is the profit maximization strategy.

Chris K-S:

yeah, it's just so interesting, we're just not able to there's like a strong, there's a strong gamer culture. As well. And, we talk about the reddit gamer all the time on this show. You were to talk about raising the cost of a game to 100 where it was, in the nineties that would, you would have your head on a spike. And so I think it's really interesting. One of the growth factors he identifies at the end of the show is what is the price of gta six or gta? gta six going to be are they going to come out at 100? Imagine having that level of power with your game where it's yeah, it's just one of those circle guys. It doesn't really just click that. You can

Eguan:

GTSU. Yeah. I thought this was weird. They're like place. Yeah. But anyway, I finished the thing.

Chris K-S:

one game. One game is a part of the growth engines for the industry, which I think is really interesting. Imagine being those game economists, you have the power to move the entire market. Will you increase? The baseline price of all games. And maybe it's maybe it's the big fives responsibility to be the price setters. Maybe it's their responsibility to say, hey, as the monopoly or as the people who have, 70 percent coverage over the entire game, the gaming space, it's our responsibility to raise

Eguan:

to summarize the argument in the slide deck is that GTA six is going to be such a popular game that whatever price they set will be seen as the standard,

Chris K-S:

Yeah, exactly. So

Eguan:

Which I thought was a bizarre. What this one game is that much? First off, there's a bunch of games that are already at 70. There's a bunch of games that are bucking the trend. I don't know. It just seems

Chris K-S:

so has the

Eguan:

no.

Chris K-S:

for TTA six? That's what I was, that's what I think that he's saying is if they decide to go for the 100 price tag what does that do? think about that's not even, that's, what is that? 33 percent of the value of the new console? I don't know, that's not

Eguan:

So let's say we assume that GTA six does actually have this market pricing power that he describes. What does that say about like the state of competition in games that like pricing is dictated by the industry leaders?

Chris K-S:

Yeah, it's interesting because we're not creating necessarily like substitute products. it's interesting because if your competitor increases their price, you can also increase your I guess that's an is that what the pricing behavior in an oligopoly

Eguan:

I'm not sure. I think it depends on the model of competition.

Chris K-S:

Basically what this means to me is that there's a demand story that's not really being told and it's that like demand is much higher and the price. the equilibrium price could be much higher and the gaming industry is just not really. There's not enough price discovery there. I don't know, like it makes no sense that with the increased competition, the price would go up right? If you think about the pure supply side of the story, I just don't think that we've discovered the correct price like. And I think that those massive players have the ability to discover prices I think there's a lot more risk. If you're a small player, if you're a small developer who doesn't have a huge market you release your game for 100 and nobody's going to buy it. They're going to say, absolutely not. I'm not spending 100 on dragon age. But maybe I'll spend 100 on GTA six. And then after GTA six

Eguan:

This chart shocked me. Basically, they said, since the introduction of online subscription services like Xbox Live or DLC, battle pass, monetization stuff that PC and console revenues are basically not that dramatically different to Philip's point, right? Maybe. The microtransactions are just keeping pace with the box price decline. Like as box prices go down, microtransactions are just keeping it level.

Chris K-S:

That's interesting. Yeah. Do they have an overall average revenue per game? I don't know. what's The or average price? Yeah. And how do you define a price? What's the price of playing, Brawl stars versus call of duty.

Phillip Black:

To just to follow up on the S and P 500, I don't want to say I'm critical of, but he plays fast and loose when he starts a lot of the time series data. And so sometimes it's 2011 other times is 2021 other times is 2018. And the reason that's really important is because those timeframes matter a lot because COVID changes everything, right? Because COVID is a downward slope for us because it was all time? highs. It was a one time, all time spike, and we've been descending downwards, and now we've bottomed out and we're back up. So when you look at things from relative cliffs, you have to be really aware. So to give you an example he makes the point that gaming is up when we compare it to real GDP from 2011 to 2022 or 2021. But when you look at it. on when he compares it to the S& P 500, the S& P 500 is up 57 percent since 2021. EA, Nintendo, Take Two, Roblox, see Grafton, Nexon, all these studios are below where they were in 2021. They're actually negative rather than S& P being up 57%. But again, like you're making this comparison from 2021. So I wish when we go back and we look at some of these comparisons, he's a little bit more consistent, like I would have loved to see how games did in terms of real terms from to 2021 compared to the S and P 500 rather than GDP, I think GDP is like the lowest possible number that you can choose for an, for a tech sector to compare against.

Chris K-S:

Some of those didn't exist before 2021. I think 2021 was Roblox's, first year in trading.

Phillip Black:

That's totally fair. So we can, we could even look Market cap, of all these companies combined to real market cap.

Chris K-S:

Yeah. I think it's weird to look at all of them individually and then compare them to the most significant index fund in the entire world. It seems like we should have combined all make a gaming index and then the S& P 500.

Eguan:

Now I knew unity got slaughtered. I didn't know you Ubisoft got slaughtered. Minus 80%.

Phillip Black:

Ubisoft is in the fucking shitter, dude.

Eguan:

What happened?

Phillip Black:

running for the hills right now. Costs are way They

Chris K-S:

What have they put out?

Phillip Black:

they've got so many fucking distractions. For instance, they put out this Roller Champions game. they got this Mario vs. Rabbids game. They've been fucking around in transmedia with Assassin's Creed. They haven't put out Splinter Cell.

Chris K-S:

they also went for web three.

Phillip Black:

mobile's been a their head count is way too high. It's almost double the size of EA with not even double the revenue. Eric, I think you picked up on this too, is again, I'm going back to the timeshare. If we think about the Reed Hastings quote, that Netflix's biggest competition is fortnight. I think the other, biggest competition is social media, right? It's not just Netflix. It's also social media. And one of the graphs he has in here is the daily hours of use among all U. S. adults for Tik Facebook. And unfortunately, like I would have loved to see more gaming stacked up here. I think that's like the missing piece. And if we go one slide down, he does have mobile gaming share of digital media time among U. S. adults. So I think we can include this in the same bucket and that's showing decline since 2020 again, COVID when he starts these graphs, like I think can really throw you for a, spin, but it goes from 50 percent of digital. Share time all the way down to about 13%. Like we're not growing anymore, but again, this is mobile gaming. Like, why is this the denominator? Why can't we include PC and console here? Like I want a more complete picture of gaming in people's lives.

Eguan:

I think the

Phillip Black:

doesn't

Eguan:

he's trying to make. the argument he's trying to make, which is, again, he's cherry picking grass to fit the argument, but is that social videos, stuff like Tik TOK, And this is more engaging than traditional social media. It's much more high stimulation, much more like attention grabbing. And that this, Tik TOK, YouTube YouTube shorts, Instagram reels is competing with. Mobile games in a way that, Twitter or Facebook did not

Chris K-S:

Yeah they are very different products though.

Eguan:

I think they fill a same niche in terms of where you slot them into your engagement entertainment time.

Phillip Black:

I definitely think this was our competition.

Eguan:

They're on mobile. They're they require high focus. So you can't really watch tick tock and I don't know, listen to They fill a specific engagement level stimulation level. I think just because of the supply side looks very different doesn't mean the demand side is necessarily different. The story I always use is like a banana and a smoothie. They like feel very similar nutritional needs, functional needs, right? I need something I can hold in my hand and drink and consume and gives me calories. But, banana producers and smoothie makers are like very different.

Phillip Black:

The other thing that really worries me is that Ben Thompson on the podcast mentioned that Facebook is testing and Instagram are testing AI content and feeds. And then it's absolutely slaying right now in terms of engagement. And if this is what the competition is going to be Like we need to level up,

Eguan:

AI generated videos and stuff?

Phillip Black:

Where is the creative use of AI in gaming? Like we used to be the forefront of all these technology revolutions, haptic feedback. Fucking, fucking even AI, we

Eguan:

GPUs, yeah.

Phillip Black:

but like, where are we at the forefront of AI besides making Nintendogs with a fucking AI chat bot,

Chris K-S:

Thus far, my biggest pro or like bowl case for AI and in video gaming is just to reduce costs. I don't think it actually. I don't think it's improving the product. I don't think we're creating like AI generated video game experiences. I think we're probably using AI in the production of games, which hopefully will lower the cost. One thing that I can't get out off the back of my mind is like, these are just not the same things. And I'm not sure we should be focused on is the end goal to just create like this. Hyper quick, hyper attractive instantaneous satisfaction. Super, fire hose full of of experiences that makes me, glued to my phone and scrolling is there a way for us to grow and compete by creating good experiences? Or is this our end game? This is the direction we have to go if we want to be able to compete with TikTok and Instagram. Yeah.

Phillip Black:

these platforms are not omnidirectional media I always thought we could dominate omnidirectional media like video Netflix I think in the long run interactive entertainment is just far more engrossing and not only that we can customize it Even if people don't want say cognitively draining. I would separate those two things. Like for instance, point click adventure games. There's low levels of activity we can use, but people like interactive entertainment. They like back and forth between the system and themselves. And, omnidirectional media like video can't offer that YouTube, I don't think can even offer that to some degree, but TikTok, Instagram, Facebook, like these are platforms where the, you interact with the machine and the machine interacts back with you, It's not you consuming content. There's an active participation on all of these platforms. And that means it threatens us. I think

Chris K-S:

If we're, if

Phillip Black:

compelling. It can, it has a higher compelling ceiling, I guess is one way we could put it.

Chris K-S:

The good news is that, like the function is, we know exactly why they're able to do what they're doing U. G. C. There's no question about why are they able to scale like this? What's the secret sauce about why Tiktok And Instagram reels are so compelling for users on a phone? It's obviously like microscopic consumption, just okay, I'm consuming this small, tiny little thing and it's tons of variety, but you can't get that without U. G. C. the, problem is that video game UGC is much more a much more difficult to produce and be not as. It's multimedia. It's not something that's, it's not like a movie. It's, you have to be able to interact with it. You have to be able to touch it. It's more a physical good. We're in this awkward place where we're not quite Lego, where we're not able to just basically say, fuck you, this Lego set, this Rivendell Lego set that I really want. It's 500. But we're also not in a situation where we are static media that is all the, exact same type of content. It's just a different picture. and I, I think that there's definitely something to be said for you to see. I definitely, I think there's something to be said for small gaming experiences that could be experienced in these, like in this firehose way. But at the, same time, and this is my experience. In a redditor coming out. I don't want us to lose track of what it means to be a video game and what it means to produce, stuff that people want to engage in for hours. I don't see instagram and A traditional video game experience as similar products, they are substitutes in terms of the, time that I'm spent. I only have so much time in the, day and I'm going to substitute my time for video games with my time for instagram, but they're not substitutes. And as far as

Eguan:

Wait, isn't substituting time a definitional substitute?

Chris K-S:

No, it's the definite yes. And that's substitution. Is you spend your money on one thing

Eguan:

Or time, right? If,

Chris K-S:

spend your money on one thing that you would have spent on something else. Yeah. Or time.

Eguan:

If I improve the quality or reduce the price of TikTok, then it, you substitute away your mobile gaming towards TikTok.

Chris K-S:

I have tried to, I've tried to articulate this on the cast before and I didn't do a good job. I still can't do a good job. Just don't think that we're tick tock and I don't think that we should be Try to become more like Tick Tock,

Eguan:

I agree with that.

Phillip Black:

I

Chris K-S:

So I guess

Phillip Black:

but it does, that, TikTok is still our competitor. It's still opportunity cost, it's still substitute.

Chris K-S:

Okay. So we're not trying to become more like Tick Tock, but we are trying to figure out how to get our time back.

Phillip Black:

There's basically two things that matter in the competition for entertainment, because entertainment is time intensive, right? Like it's ultimately correlated with how much time you spend on something. It's how much money you spend. And again, I still think there's that monetization love we were talking about, which is interesting here. As an entertainment product, the only way you're gonna win is either you take market share from other people, which I think is actually a zero sum argument. Or what happens is that the more labor saving devices are invented. And we have more free time and that basically is an increase in our, the PPF, so to speak of entertainment, right? Like you're, I can play Fortnite and, Magic the Gathering, like your entertainment possibilities frontier moves outward, so to speak. And that has happened by the way, historically, but I would say that's how I see this. I actually do see this as zero sum because those things are so correlated.

Eguan:

Here's a question for you guys. How true do you think this causal factor is Cause so I believe this story anecdotally, but the way Matt ball proves It here is he just says, Oh, tick tock time, go up, mobile game time, go down. He just overlays two times series and says, Oh, and therefore it's causal.

Chris K-S:

do you it's, causal?

Eguan:

How much do you believe the causality of this? Is there a stronger proof out there?

Chris K-S:

It's not even, it's mechanical, right? Like as long as assuming ceteris paribus, that is true.

Phillip Black:

The thing I don't see here, Eric, is first of all, they're different metrics. So he isn't literally laying them over, although I think that is something that's implicitly Implied here, but we know what happened to social media during COVID. Did they have a similar spike? It looks like it didn't among his daily hours of use among all us adults. It looks like It's

Eguan:

It's good right here.

Phillip Black:

Yeah, but that's, I guess there is, it wasn't increased growth rate, but it accelerates outward and we didn't accelerate outward from COVID we dipped. And I think that to me is the concern I have is why did they accelerate and why did we dip? I don't get that yet.

Eguan:

Yeah.

Phillip Black:

That's highly concerning to me tikTok, all these people started game platforms too. So it's okay, what share of these, these platforms are people spending on games? Like people are still spending a little bit of time on Facebook games. This worries me. Like why are we not at work? Why are these things becoming increasingly more compelling and we're becoming less compelling?

Eguan:

Yeah. Maybe it's the tech, like you said the video, the UGC, the editing, the algorithm.

Phillip Black:

What I want to see though, is I want to see this broken out by time cohorts. I want to see this broken out by an individual age group. Over time and whether or not they're spending more time on social media or whether or not we're winning in the like is

Eguan:

Are you saying you disbelieve this thesis without that breakout?

Phillip Black:

I would say that I don't agree in the causal factor that increase that this is driven by more social media means less of us. I don't think we're losing at the margin like that. I want to see whether or not young people are spending more time on social media. Or are spending more time on gaming over time, like for a given age group, let's say 10 to 19. I don't think we've lost that yet.

Chris K-S:

You can study that.

Phillip Black:

to see this broken out by age group and see who are, who is being gained to social media in terms of age group and who are we losing in terms of age group. I think that's going to tell us a lot. And if we're losing young people, that's when I would fucking, I would really fucking worry. If we're starting to lose hours of engagement over time to social media for younger cohorts, I think that singles signals really bad fucking stuff for us as an industry.

Eguan:

So one noteworthy thing is that just he talks about it here, but basically like foreign emerging markets, so to speak, are starting to make their own games and they're starting to be good. Basically China's making games. They're pretty good. Marvel Rivals is pretty good. Black Myth Wukong was pretty good. And they're actually starting to crowd out. They're starting to crowd out Western developers. It seems like you can look here Western developers. This dark green used to be half of China roughly. And now it's like maybe 10%, 20%. 20 is other countries are getting better at making games, and part of why we in the West feel a decline is because we're getting crowded out, and not necessarily that gaming as a whole. Metaverse himself, at least he like cops to it. So this chart, each of these upward lines is a projection of how fast VR will grow. And basically every year for starting in 2016, they were like, Oh, it's going to double next year. We're producing 10 million units. It'll be 20 million next year. Next year, the volume goes down. They're like okay. It was down this year, but I swear it'll double next year. The next year it goes down. They're like, Oh no. Okay. Okay. But anytime now it's going to start doubling. And you can see like gradually they finally reduced how optimistic their forecasts are. They're still upward sloping, which seems wrong to me. But yeah, anyway, VR totally flopped. Mr. Metaverse himself. I'm glad he recognizes it. I think I thought his whole Metaverse thesis was fucking, I don't want to drag his name. It's easy to punch up, but

Phillip Black:

Do

Eguan:

Yeah. Yeah.

Phillip Black:

chart that is always floated around econ or like the one where they telegraph out interest rates and they're perpetually wrong every single time. It's this graph in spades.

Chris K-S:

Yeah, I remember that one. I'm I feel like VR is suffers. the reason that video gaming is more difficult to serve to people is the same reason that board games are difficult to serve to people. It's because there's a little bit more cost associated with engaging with them. You've got to sit down. You've got to learn the rules. You've got to, really commit your time. VR is that on steroids. It's like you've got to fucking put a machine on your head. You've got to engage in this like digital space. It's the opposite of what we need right now.

Eguan:

Ball fundamentally under misunderstands video games because he paints a Big part of the metaverse as having a three dimensional avatar, which feels totally cosmetic and not actually the important part of feeling immersed in an engaging activity where you have an identity and a persona that you're embodying. Like none of that is the specific graphics technology that's being used. Anyway,

Phillip Black:

I concur with Jörg.

Chris K-S:

So what do you guys think are our routes to to recovering from this? He's got a bunch of points at the end.

Phillip Black:

I really don't agree with him on any except for maybe like

Chris K-S:

You don't want to agree with the switch

Phillip Black:

thesis. is really lame. The only people who care about Switch is Nintendo because all platform sales are basically Nintendo. He his numbers are actually wrong here. I think he has 60 percent of Nintendo spend his first party sales, first party games. I've, the numbers I've seen are way higher than this, 70, 80%. So I don't think, first of all, not only that, like new consoles is always it's what keeps the machine churning. That's,= that isn't an increased growth rate. That's

Eguan:

yeah, how would switch to be a growth engine? I understand.

Phillip Black:

ridiculous.

Eguan:

will say he does caveat that all these growth engines. He's I don't necessarily believe in these So he's covering his ass a little bit.

Phillip Black:

no I think that's the case. Handhold devices. That's a joke. They the handhold is not shipping any units. I just, I think there's a lot of fluff. I think it really goes back to cohort stacking, I think is really important for us. If we really Do continue to increase our capture of younger players via Roblox and ultimately we can transform them to higher spend customers over time, those are just going to stack and be honest with you, I think the only other thing I see is real here is

Chris K-S:

Yeah.

Phillip Black:

is that I think it can do massive things. People keep talking about supply side again. I think there's a lot on the demand side and how we integrate AI and game design that hasn't been explored yet, and I think there's a lot that hasn't worked. I think UGC hasn't panned out. That's been pretty much a disaster. I wouldn't say disaster, but it hasn't really worked the way of people. Roblox Except for

Chris K-S:

Except for roblox,

Phillip Black:

the platform level UGC, like in stumble guys or fall guys or halo or battlefield, like all that stuff has not really worked.

Chris K-S:

it's interesting. I wonder why it doesn't work. Do people just not care about like a skirt that was made by their friend

Phillip Black:

You haven't heard anything about Dota either.

Chris K-S:

No, I don't.

Phillip Black:

was supposed to be the mod platform. Auto chess came out of it. When's the last time you heard something like that?

Chris K-S:

Yeah, I need to look at that list again and see if I believe in any of those

Eguan:

you're so roblox filled time you've shilled roblox today

Chris K-S:

No,

Eguan:

I mean I wrote that piece about like how I think UGC has basically just been absorbed by like indie game dev That like the game dev tools are so much easier that You where all these great indie games like Animal Well and Bellatro And Celeste are coming out of is what would have been modders. 30 years ago.

Chris K-S:

app store regulation.

Phillip Black:

when you're relying on app store regulation or you're relying on the government for growth, you're pretty much fucked

Chris K-S:

It's also like this, it's a very, it's very much a capped amount. It's Oh, cool. We get, we now get like an extra 10 percent on our margins.

Phillip Black:

the effective. store tax is probably down to 20

Chris K-S:

Yeah.

Phillip Black:

point.

Chris K-S:

I feel like that's Relying on like inflation to make your nominal numbers go up Oh our numbers will be bigger next year because of

Eguan:

Maybe we should be spending more money lobbying, Lena Kahn to fucking do something. She's out now, right? But that's what the gaming industry should have been doing.

Phillip Black:

Actually do think we don't lobby enough. I actually think there's a huge problem we have. Our saving grace is that we've kept blue box regulation But I'm surprised we haven't done more.

Chris K-S:

What's what's advertising? What could be done In advertising?

Eguan:

in game advertising as a revenue stream.

Phillip Black:

That's fucking shit again. Get the,

Eguan:

Is this a perennial thing? I'm out of the consultant, like I'm sure you hear the business gossip more than I do.

Phillip Black:

has been around forever. Burnout. If you remember need for speed, like they've all tried to like billboards in games, it never goes anywhere. The other thing he's mentioning here. Isn't just that though. He's also mentioning that like when you play. Ad based games on mobile, like hyper casual used to talk about. It's almost all incestuous, right? It's ads for other hyper casual games, but there's always been this thesis that, Oh, we can push you PCG products. Like on Amazon, we can push you like hair blow dryers or some shit. And that's never panned out. There there's advertising in Roblox. That's actually a huge part of Roblox to spend is actually brand advertising where no one actually spends on micro transactions. It's like vans or Barbie or some movie.

Chris K-S:

well, and their ads have clicked through. You can like, click on the ad, go and go immediately to that experience

Phillip Black:

You can go to their playground though. Yeah. Their

Chris K-S:

experience. Yeah, the experience. yeah,

Phillip Black:

He's, know what he's calling ad revenue here though. Because if I'm a hyper casual publisher and I pay 5 million to another hyper casual publisher, that's 5 million in cost for me, 5 million a rep. So it's not net gains. So I don't know what he calls ad revenue here.

Eguan:

that's fair. It's revenue, but it's also cost.

Chris K-S:

do you guys think that 80 percent of the people, play

Eguan:

No, definitely not.

Chris K-S:

mobile?

Phillip Black:

think they definitely don't call them.

Chris K-S:

That's what I'm saying

Phillip Black:

don't think they do. And not only that, I got a young cohort of people.

Chris K-S:

I know that's what I'm saying. Like even of the people that I mean like a lot of my friends So like my friends here in Champaign, they're they consider themselves gamers, but they're playing like Halo 3 They're playing like games that are no longer monetized. They're playing games that are off servers and they're not. obviously they're not the majority, but I'm just like know anecdotal evidence is a terrible thing, But man, I just look at everybody. I know I'm a tech person. I'm young. I, hang out with other young people. And, just don't see it. I don't see the 80%. My mom builds puzzles. My wife plays Ori and the Blind Forest, which I already bought six years ago, and I don't even pay for Xbox Live anymore,

Eguan:

but

Chris K-S:

money.

Eguan:

Do you think you spend around 10 a month on games? Each of you,

Chris K-S:

When my Xbox membership was live, probably that was, 15 bucks a month,

Eguan:

And you didn't buy any other video games.

Chris K-S:

me and my wife and my mom, I'm the only one accounting for any of that. So I don't know, 16 a month, let's say in a good time period,

Eguan:

Okay. It's eight bucks. That's not too far.

Chris K-S:

Yeah, but that's among gamers.

Eguan:

That's split among three of you. So that's actually average of 3. Yeah. Okay. Nevermind.

Chris K-S:

I don't think we're doing, I don't think we're doing a good job. I don't think that video games have done a good job at, Explaining their value customer. For some reason, there's this idea that all video games should be free and have infinite replayability and you should never have to spend any money. And I think that narrative, I don't know where it came from, but it's like hurting our industry because we can't even if we if you can't keep up with inflation. Like a big fundamental problem. We can't even price our box price games with inflation. How do we grow when we can't even meet inflation?

Phillip Black:

Chris, you can hire a monetization consultant

Eguan:

Yeah, like Phillip from Game Economist Consulting. He knows how to make sure your games will get as much marginal value as you can that your players are getting.

Phillip Black:

This is what subscriptions were about. This is what MTX is about. This is what loot boxes are about This is, what we offer.

Eguan:

last!

Phillip Black:

is This special editions like this we've been at this problem for our history. This is our this is what defines us

Chris K-S:

do I spend why do I spend game and not really think about it. But when it comes to a video game, I think so much longer and harder. And I know I might be different than you guys, but like for me, There's or 40 on a meal. You go out to the, go to a restaurant, 40 bucks is you get an appetizer and a cocktail. You spent 40 for two people. Why do I do that? But I can't spend 40 on a video game.

Phillip Black:

on video.

Chris K-S:

No, I know you do. I know, but you're, I don't know. This is purely anecdotal, though. I'm going to dig into that A TES data to see what the different cohorts are up to, Phil. I'll write a blog post on

Phillip Black:

all right, I gotta pace. All

Chris K-S:

anyway. All right. Yeah.

People on this episode

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Phillip Black

Host
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Chris Kaczmarczyk-Smith

Co-host
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Eric Guam

Co-host