Phillip Black

It's Time for Games to Embrace Aggregation Theory In tech writer Ben Thompson's infamous aggregation theory, economic power derives from supply ownership—train barons owned the track and leveraged that power up and down the supply chain. The internet flipped the relationship: with near zero switching and distribution costs, suppliers instead aggregated user demand to leverage suppliers. Consider Amazon: aggregating millions of customers gained power over suppliers, compelling them to compete on its platform and play by its rules. In a post-ATT and "black hole games" world, gaming unwittingly embraced this dictionary, and distribution has become all-powerful.Previously, games saw a lite version of aggregation theory, as platform owners like Sony and Microsoft owned the track (and thus users), allowing them to set the game's rules. But something funny happened: cross-play, progression, and commerce crumbled console platform power as Epic leveraged Fortnite's […]

The Fallout TV series has received widespread critical and audience acclaim, with 65M viewers and Amazon Prime's 2nd most-watched show of all time.  The show appears to have cracked the secret transmedia success formula: top-tier IP, backed by a nine-figure budget, distribution through a 200M MAU network, and widespread critical acclaim.  Consistent with the transmedia thesis, engagement with Fallout games has skyrocketed, with all games experiencing significant uplifts. However, price cuts have ended, and according to VG Insights, revenue is down 50%+ from two-week highs in titles like Fallout 76. While the uplift has yet to return to equilibrium, a generous guess might land $40M in incremental revenue across the franchise before returning to a steady state. The final revenue impact may tally north of $50M. And yet, hailed as a transmedia success, Fallout instead shows the exact opposite: if this is the […]

When a new game enters public testing, many people use the first day's performance to judge its quality. After all, most mobile games peak at launch. However, this curse doesn't seem to apply to "AFK: Journey" (hereinafter referred to as "Journey")—more than 20 days after its international test launch, the game continues to surpass its records, even rising from around Top 30 to Top 7 on the US iOS best-seller list. Considering "Journey's" multi-platform gaming options, its actual revenue may be higher than what the charts suggest. 1. AFK Journey hasn't peaked yet; too early to judge. + Rising after launch.Team doesn't know how the game will perform; nervous.2. IAP improved KPIs."A good numerical game must enhance the game experience after players pay. Here's a small comparison: in September 2022, we tested without payments, and the data wasn't great; when […]

1. Cultural Norms Matter There's far less "sharing" in Turkey than in Finland or Sweden. Anyone with a Finnish ID number seems to have access to Supercell's dashboards! Turkey has largely avoided non-competes, and it must stay that way. King single-handedly has hamstrung Swedish mobile game development with its notorious three-month non-competes, which, after a three-month notice period, amount to six months for an employee to start elsewhere. France is dealing with a similar issue, and it's to their detriment. Much of Silicon Valley's success is due to the ban on non-competes, something that's gone over the heads of subsidy-happy governments.2. Agglomeration Effects are RealEconomists are fond of the power of location to build industries through virtuous success cycles and knowledge spillovers between firms. Turkish development feels like 90% puzzle or hypercasual, and it's no wonder, given Peak, Gram, Dream, […]

Inflation, ads, and webstores reverse nearly every trend in gaming—and then reverse it again. These aren't rounding errors either—they're GDP-level phenomena (literally), and the inability to account for them is warping our perception of reality in the gaming industry.- Adjusting for inflation completely reverses the growth in mobile spending between 2020 and 2023, from +8% to -9%.- Adjusting for inflation slashes Newzoo's 2026 PC & Console forecast by 39%, from +15% to +9%.- Ads revenue is likely a double-digit percentage of gaming revenue, and all we have to estimate is King's quarterly earnings.- Adjusting for webstores completely reverses the revenue decline in some midcore genres, casting cold water on the "move to the middle" thesis.

Matthew Ball's excellent piece, The Tremendous Yet Troubled State of Gaming in 2024, unpacks a paradox: gaming seems prosperous yet is marred by unprecedented industry layoffs. Ball's findings reveal a simple reality: playtime is down over 20% (3.5 hours per week) from its COVID peak. This decline, further seen in declining inflation-adjusted spending, cements gaming as an entertainment product with a capped growth potential. Without new strategies to reclaim timeshare, gaming's best days are behind it.Despite COVID hangovers, Ball remains optimistic about gaming's prospects, citing opportunities in streaming, in-game advertising, and transmedia. The mid-00s breakthrough of OnLive, Burnout Paradise, and Uwe Boll wasn't enough. But other growth suggestions include "'UGC platform developers' (i.e. Roblox developers) shifting to standalone titles." This resulted in Steam's top-charter, Lethal Company, the product of a former 21-year-old Roblox developer. UGC needs to play a central […]

Ah, web3: a past marked by rug pulls, North Korean heists, and prices more volatile than Gamestop shares. However, for all its misgivings, audiences still capitalize web3, with prices far from zero. Parallel, a new web3 CCG hit a half-billion market cap considering token and NFT prices, and yes, it's pre-launch. Despite flaws, Parallel looks cool, and games like Sipher are turning heads, while Sorare is already established. Chris Heatherly is brewing something with Mystery Society, giving 'Among Us live-service' a jolt. But for all its hopes, web3 has been blocked by distribution and confined to the browser. Epic Game Store, a trusted brand, now carries web3 games, even with an Adults Only rating. Finally, Web3 is playable on mobile, with the compromise of giving Apple 30% and tacking on an equivalent user-facing tax. All this festers into 2024 as […]