Mitch: 0:05 Good morning and welcome to another episode of Layers Licensing and

Games podcasts. My name is Mitch and joined once again by our co- founder and CEO Rachit. Hello, Rachit.

Rachit: 0:15 Hey, how you doing?

Mitch: 0:18 Doing well. Back in Europe. Jet lagged. I got off a 25-hour flight on

Monday afternoon and I woke up at 03:00 AM this morning. And I was

wide away come be back a bit, so we’re getting through it.

Rachit: 0:34 I think a lot of people don’t realize how far Australia really is. So yeah,

prepare yourself in case you’re gonna go on holiday there. [Overlapping

0:43] are our flights, right? It’s an epic journey.

Mitch: 0:47 Fourteen and a half hours to Dubai and then eight hours to Lisbon. The

second one feels like just a quick jaunt across Europe compared to the first

one. So it’s not too bad. And pleased to be speaking with you today, Bob.

Thanks for joining us.

Bob: 1:10 No, pleasure to be here. Great, excited to talk about IP and other things

with both of you, and of course, jetlag.

Mitch: 1:15 Well, just for a quick intro, today, we are joined by Bob Slinn, who is the

VP of Bizdev at FunPlus, probably, best known for your [unclear 01:28]

Zombie survival game, State of Survival, among others. You’re based in

FunPlus’ Zurich office, or as we just found out you’re actually based in a

small town outside of Zurich. What’s the name again?

Bob: 1:15 It’s called Zug. So it’s funny. I mean, we say that the greater Zurich area.

So it’s loosely connected, but yeah, it’s close enough.

Bob: 1:49 The greater Zurich area, cool.

Bob: 1:51 Well, Switzerland probably disagree. It’s another can top, where viewers

can tell rivalry. But we’ll call it greater Zurich to make it easy.

Mitch: 1:58 Okay, cool. Well, coming to you from FunPlus’ farmhouse in Zug. Bob is

both responsible for leading the company’s Western market, strategic

Bizdev efforts. Previously, it was in Facebook’s game partnerships team.

Don’t hold that against him. And he was also in EAS publishing team for

www.kroger.com. So really excited to be speaking with you today, Bob.

Bob: 2:28 Great to be here, as mentioned. Excited to chat with you both.

Mitch: 2:32 Cool. Well, first of all, tell us about what you’re doing at FunPlus. I think

you have been there for almost two years now. And it seems like in that

time, on the topic of IP partnerships, you’re doing a lot more in that space.

Bob: 2:45 Yeah, it has been just about two years, which continues to surprise me. It’s

been an old saying, “Time flies.” So essentially, what we’re doing or what

I’m doing this year, we’re based in headquarters here. A big part of our

company success has been building our own original IP in original games

and images to survival. We have two other big Forex Strategy games,

kinds of [unclear], and King Babylon. And again, very much focused

originally on building our own IP, our own worlds, our own universes and

new strategy games tend to be pretty deep with deep storylines, and

character development and heroes and all these other things. But a couple

of years ago, actually, just around the same time, as I was joining, we

wanted to take a slightly different approach and effectively add another

element to the games. And so there was a discussion around how could we

add IP, and what kind of IP would be relevant, and what would the impact

be, and what were the goals around it. So essentially, again, it was

completely new for us. And we started. The first one we did was with The

Walking Dead and had Daryl Dixon join the game as a hero. And then

there was a whole other storyline built around him and his progress

involvement in the game. And then we follow that, not too long after with

integrating the Joker from DC Comics Fame into Status Survival as well.

And again, we really thought a lot about what would the right kind of IP

be, what would the right character be, and then equally importantly, how

would we integrate it into the game. And so it’s been a pretty interesting

learning process, I would say. And it’s so far so good. We’ve learned a lot,

but I think we’ve been really pleasantly surprised. The character has been

well received by our players in our community. And that is honestly the

first filter which was looking at what did the players want. And even with

the Walking Dead came out of a survey, we did with our player base. We

basically said, which characters or which heroes or which people would

you love to see in the game? And Walking Dead was the number one. So

that’s how it all started. And we have built on it actually.

Rachit: 3:55 Super interesting. What led that initial concept of “we should look at IP”? I

mean, I think it’s really interesting that you got to that point of surveying

and understanding “which IP?” but how did you even start that discussion

in the first place around like “we want to look of this space in general”?

Bob: 5:01 Yeah, it’s a fair question. Because particularly for a company like ours

who focus so much on building on IP, and that really is, and continues to

be a core part of our strategy, it’s building these worlds. And we actually

believe, over time, and we’re seeing it come true now that the next

generation of great IP will come from games. And will be born in games.

And then you’re seeing it across the borders, everything from Arcane, so

even Plarium launching a new series off the bat, attached to raid. So

definitely, we do feel this is next generation. But I think what we’re

looking at and as everyone knows, mobile gaming is super competitive

space, user acquisition is incredibly competitive. And so we were looking

at different approaches there. But we’re also looking at the way our games

evolve, we add new heroes on a regular basis. And heroes are core part of

the game. And the players are heavily invested in the heroes they have.

And this whole process of unlocking them. So we were looking at ways we

could expand the storyline and expand the selection of heroes. And we’re

regularly in communication with our players. And so there was this

thought process around: “Okay, well, if we were going to introduce

something new to the game and a different theme, what could it be?” And

I think, again, IP is a natural extension. A lot of developers have done it.

And a lot of developers have seen real success with it. Obviously, as you

guys know, you live this all the time, it has to be done intelligently and

carefully. So I think that’s why when we first started thinking, IP could

provide both value from a marketing standpoint for new players and

expand the audience. But for us, equally importantly, it was another way to

engage our core player base. And another way to drive engagement and

ultimately monetization by introducing this whole new storyline and a new

hero to the game.

Rachit: 6:49 Has a word for both of those elements, I guess? I mean, firstly, in the UA

space, like given how challenging it is, do you still believe that IP is

something that can bring down your cost?

Bob: 7:02 Yeah, it’s a very fair question. Very good question. I mean, both of these

integrations happen pre-IDFA and need to see changes. So our that

reference point has changed pretty significantly. And you know, how does

the way work? And how IP influenced that? I guess, I’d say, from our

specific experience, we probably got more value and we probably did a

better job being super honest of integrating the IP for the existing players.

And we saw, I guess, set a really positive response, really high levels of

engagement. I’ll have to think about the percentage, but we saw a very

significant percentage of active players who unlock the hero, in both cases,

for Daryl Dixon and for the Joker. So there’s super high engagement.

Players both unlock the hero and then use the hero. And for the Joker, in

particular, the second time around, we built this very evolved storyline.

Because the Walking Dead, pretty obvious integration, zombie game, post-

apocalyptic, fine! Joker, not as obvious a fit. And so the writers built this

very loved storyline of “Here’s the Joker hero, here’s [unclear 8:07], how

does he play?” And so there’s this whole story unfolded over a period of

three months where, of course, surprise! Surprise! He wasn’t a [unclear

8:15] at the end. But that story actually worked. And so the players really

engaged with it. But it could have gone wrong if we just thrown the Joker

in without any context. And ultimately, on your question about UA, I’ll be

honest, I think we probably under exploited the potential of IP just because

I think we hadn’t had the experience of thinking about how do you adapt

your UA campaigns, because in FunPlus, it has been very specialized it, a

real, I’d say hardcore performance, CPI, LTV equations, really, really

good at performance marketing. And I think IP, in some cases necessitates

a slightly different approach and maybe a broader approach to marketing,

to really leverage the IP to its fullest. And I’d say, we did some. But I’d

say we could have probably done more. And I think because we were

focused on the kind of existing formula and systems that worked, we did

do some work with [unclear 9:09] in particular, and we actually created

this amazing TV spot. And we actually got Norman Rita. So we did this

whole shoot in LA. And all the stuff we have been never done before. But

I don’t think we actually knew what to do with UA. We want to clear over

this thing. It’s an amazing TV spot. On YouTube, you can see it, but we

didn’t necessarily run the [unclear 9:29]. We probably could have done

more with the actual TV campaigns. But again, it’s all different media

strategy. And we’re still learning about that. So I think for our experience,

there’s more to do. I guess, I’d say, moving forward to present day and the

world we all live in now from mobile gaming, where we know less about

players and the old formulas don’t necessarily work anymore, I think IP is

even more important. And I think FunPlus along with most mobile

developers who have games with a certain size, are having to relearn

marketing, and a lot of ways. Performance marketing alone is no longer

sufficient to scale your game, you need to really think about different ways

to both engage community, work with influencers, work with even more

traditional brand marketing. And we’re at the beginning of that process

and that journey. But I think, this idea of a full marketing mix is going to

be a necessity for developers to be successful. And you can see very easily

how IP helps differentiate. And as you start to tell stories and build brands

and use different types of marketing, IP become even more important in

that mix.

Rachit: 10:38 Yeah, really, really interesting that you were also able to find that. That

collaboration really helped on the back end, although engagement, and

retention, and activation and the existing audience. So I guess you have

real players that are not just there for “flash in the pan” and they’re around,

they’re playing for a while. So it makes sense to give them content that

they genuinely love and they can interact with. So curious to hear, I mean,

it’s exciting to hear that you were able to tap into it for more than just the

UA. I think UA is definitely one of the first things, a lot of developers and

publishers we speak to, think about as the primary reason to use IP. But the

fact that you’re able to then see that advantage later on, down the funnel, is

really cool. Before we jump into more, I’m actually curious about the fact

that you have so much experience across working with IP partners, a lot of

people that we work with, don’t have people like you in their team, right?

And so I’m curious, like, how much of your role is focused on IP and

building that pipeline of working with more IP? And was that something

you’d done at Facebook and other jobs before? Or was IP something that

you kind of let them do with this role at FunPlus? And now it’s growing,

what’s that been?

Bob: 12:02 Yeah, it’s good question. I’d say, I spent a good chunk of my time...

Actually my one team member, Josh, is based in California. And so he

ends up managing a lot of the direct relationships. Now, just because it’s

easier. A lot of the IP holders, at least certainly Western IP holders, are

based in California. So that works well. And we did have subsequent to do

in these first two. We did a round of visits with a lot of the usual suspects

and talk to them and understood how they operated them. As you guys

know, the different IP holders operate very differently. And some are very

happy to license to IP too, in some ways, all comers, if the commercials

work. Others are very, very protective of the IP and want to make sure that

the storyline is perfectly integrated and that it supports the brand. And so

we have to talk to a pretty broad range. And we’re actually in the process

of doing another integration that’ll hopefully go live sometime towards the

end of the year. And since Survival so, more to come. But one of the

challenges is, again, to this point, making sure about marking is really

thinking about, how can we use the IP to broaden the appeal and find new

audiences and bring them into the game. So we’ll see if it works. But

there’s another one in discussion now. To the point [unclear 13:20] before,

I mean it’s funny. I hadn’t done IP in this sense of really going in

traditional licensing. We did do a bunch of things at Facebook where they

were launching an HTML5 gaming platform, where we were launching a

brand new thing. And again, IP is a great way to tell people, you’re doing

something new, so I did do a trip to Japan, where I went and saw every

traditional video game maker and [unclear 13:44] license created Pac Man

and Space Invaders and showing my age all the games that I played when I

was young in actual video game arcades. So yeah, that was the early tastes

of IP. And then, way back in time at EA, I worked at Pogo and a big part

of Pogo’s game library. It was basic casual service, all the Hasbro titles.

And he had a very big strategic deal with Hasbro. So that was probably my

first real interaction with IP. Because there was multifaceted deal with

Hasbro and we spend a lot of time working with them. And again, they’re

one of the original IP licenses and have built an enormous business off the

back of that. So yeah, that was my first experience. And then the trip to

Japan, it will live long in the memory front, in-person meetings and trying

to demo HTML5 games on a shaky connection as skeptical Japanese game

producers wondering, what in the world Facebook is doing in their office

and why they want Pac Man? But it worked in the end. Pac Man was the

first, the big launch game. But yeah, it’s such an interesting challenge

figuring out and matching the IP to the need you have and the audience

you’re trying to reach. And I think that’s one of the biggest challenges and

the hardest things is finding that the right IP for the job. I’d say, the right

IP can get your specific goals. Again, I think that, plus the integration and

the thoughtfulness around the process is what makes either successful or

not.

Mitch: 15:26 How does that differ working with one licensor or working with Hasbro

and Pogo trying to find multiple licenses? Like, it’s obviously a different

approach.

Bob: 15:37 Yeah, very much a different approach. And I think, what we’ve seen is

good news, bad news is for... It’s a game today. There’s a reasonably

standard playbook for licensing IP and IP integrations. I mean, there’s a lot

of it happening. But I think the good news is that the commercials are

reasonably established and the model is reasonably well-established. And

as I said, it becomes more a question of finding the right IP. And I think

most of us, majority of us, the bigger holders of IP are reasonably open to

licensing, because it’s a core part of the business. I think where it gets

more interesting is when you’re trying to find an source IP, where people

don’t normally license it. There are a lot of these discussions where the

collaboration and the fit would be amazing. But Company A may not

necessarily be in the business of licensing the IP. And they’re very

protective of it. Okay, that’s where it gets harder. There are certainly some

of the much more established businesses, like a Hasbro, where the model

is pretty clear. And if there’s a space and category, then it just becomes a

question of... It’s not as simple as working out the details. But there is an

established model and precedents that you can follow.

Mitch: 16:55 Yeah, it makes sense. A lot of that is templated. Whereas when you’re

going out and building these partnerships, you have to do it all from

scratch. So it’s something that I think we come across is, it is a challenge

like, what’s the right price to offer? How do you work through approvals?

All of these things. Yeah, there’s some sort of playbook, but people aren’t

really sharing their playbook across the industry all of the time. So, yeah,

definitely challenging.

Bob: 17:21 No, and I can see, you play very useful role in that and trying to create

some transparency around the process. And again, where there is

consistency and learnings of anything, you see very different approaches.

And even looking at the two big comic IP holders, Marvel and DC, they

have a very different approach in terms of both how they license their IP,

but also in terms of how you can use the IP? In Marvel, the characters have

to very much look like the characters. So there’s a very clear playbook.

Whereas DC is interestingly quite open to you interpreting the characters.

For example, the Joker, relicensing comic book Joker, but again, if you

rewind in time, there’s multiple variants of the Joker that look quite

different depending on which artist originally drew the Joker. So they’re

quite open to finding their own version of the character, which is quite

interesting. In a way, there is a FunPlus Joker now that exists, that has

never been seen before, it looks slightly different. As long as you follow

the right guidelines and it looks like a joker. So there’s some pretty

interesting nuances as you get into partnering with different people and

how you can make the IP your own, or how you can integrate it

intelligently. So it’s yet a lot of fun. But again, I think the service you’re

starting to provide in your scaling is super helpful. Because again, not to

say it’s darker, but it’s certainly not something I’ve communicated a lot.

Mitch: 18:43 It’s like the UA dockets, the licensing dockets. But the Joker is really cool.

I haven’t played Status Survival. But if you look at the integration you did,

it really is like you’re in Joker. And I think it’s an interesting approach

what DC is doing, because you can add to the cannon, right? And if you

think of games becoming cross media as a term you hear all the time, it’s

like, if the game becomes big enough, you get this new version of a

character that has existed in various forms. So I think it’s a really cool

approach. As opposed to just like, here’s the character out of the box. I

mean, both of the merits. But yeah, it’s interesting.

Bob: 19:23 I think the next part of that is where you start to see Star Wars or other big

IP, where there’s such a deep universe and there’s so many elements of

that in sub worlds and extensions and characters that you also start to see

more and more this idea, what’s the right partnership? The game in

particular, because it’s interactive. Because it’s constantly evolving and

free to play. In games, the service model, you start to see IP they can live

within a game over a period of time. And actually start to extend the story.

Add new elements to the story as long as it fits with the existing canon and

doesn’t conflict with anything. So I think that’s the other thing that’s

gonna be super interesting, as you see some of these partnerships and

perfectly for some of the fully licensed games. The game can actually add

to the value of the IP and add to the story and the lower around the IP

itself. And in some cases, even add new characters. So I think with the

right kind of collaboration, you’re gonna see this interesting extension

where, of course, big value for the licensor, but the actual rights holder

will start to, hopefully, if it’s done right, have value for that they get back

beyond the commercial elements.

Mitch: 20:35 Yeah, absolutely. I wanted to talk about your approach to what you’ve

done so far. Because it is a little unique compared to some of the other

studios that we’ve spoken to. I guess they... A model we’ve seen, when

we’re talking about in-game integrations is, start small, do a small

collaboration, see what effect it has on in-game metrics, or UA, or

whatever it is, whatever the thing we’re testing is. And then we go bigger

and bigger from there. And you’ve done the opposite. You’ve started with

Daryl Dixon, the Joker, Orlando Bloom. So I’m curious, was your

approach always to just go big, or how did that come about?

Bob: 21:18 Yeah, I think, for us, particularly, say Survival, then when we started

doing these, the game was already in a way so big. It was a game that

scaled up very quickly. And, again, in a weird way, fortuitous timing,

launched in the end of 2019 and happen to coincide with a period of time

when people had a lot of time at home. So the game grew very big very

quickly. And so I think, by the time we started looking at IP, we needed

something that would move the needle for lack of a better expression. And

I think with the scale of the game and the economics around the game, it

made sense to try to find something that would truly add value. And also,

again, I think we were also guided by what our players were hoping to see.

And I think what’s nice is, because it was an integration within the game

over, there’s like something in for six months, again, it’s a bigger IP. But

for us within the context of the game, it made sense. It was the right size of

experiment for the size of our game. And if it hadn’t worked... The funny

part is, it’s a six month integration, but Daryl Dixon is still in the game. If

you had unlocked the hero, you still can play with Daryl Dixon forever,

just because of the virtue of the way the game works. So, thankfully, it

worked out because it would have been awkward if it hadn’t.

Mitch: 22:47 A lot of risk there, right? I’m assuming you spent a lot to get the right, so

you have to make sure that it pays off.

Bob: 22:56 Yeah, again, it’s finding the right balance for the IP holder and the

licensor. In this case, I think it worked well on their... MC are a great

partner to work with. And I think they see the value of these extensions as

well. In ways, it extends their universe just like it provides value to our

players.

Mitch: 23:17 Yeah, so I guess it’s horses for courses then, right? Like if you had have

had a smaller game, then maybe you would have considered a smaller IP

to work with. But in your case, you really needed something that I guess

had pretty broad marketing power as well, right?

Bob: 23:33 Yeah. And again, when you’re talking about a zombie game, this is

probably somebody that... You know, so many types of IP you can bring to

the game and make it work. That’s the other day. You can list the 5-10 IP

that would fit incredibly in story and Walking Dead would be [unclear

23:50].

Rachit: 23:52 I know you can’t give it away, but are you going off piste for this next

collaboration that you mentioned is coming out later? Are we getting a

Bobby collaboration [overlapping 24:00]?

Bob: 24:03 That good for, but I don’t think it would work out very well, for barfing

citizens survival to may have a [unclear 24:08] and family end. But we’re

looking at a couple of things. One of them would be definitely of piste.

Certainly, I might expect to see at the game. Again, because this challenge

is somewhat unique to strategy games and the way the audience engages,

there’s such deep engagement that the audience is easily narrow. And one

of the challenges is continuing to bring people into the top of the funnel.

And so IP in this case may serve to broaden the top of the funnel,

introduce the game to new audience. So by default that might a little

surprising, but...

Rachit: 24:45 Just for context for others to understand like what does apply it roughly

look like in terms of how long they’re playing for, how many are coming

back? I don’t know how much you can share that, as a guideline.

Bob: 24:59 The way the... The retention curve tends to be that we lose a lot of people

pretty early on [unclear 25:04]. Numbers are reasonably low. But once

people have gone through this initial phase and know the way the games

tend to work, because there’s an initial solo phase where you’re basically

building your base, we lose a lot of people there, whether it’s a reasonable

amount of work and investment, and then once you get join an alliance

clan, in our case, they called alliances, the game changes dramatically in

the sense of very social, you get this deep engagement and level of

commitment with your alliances. And there are different types of alliances.

There’s some that are ridiculously hardcore, where people are waking up

in the morning to organize battles and raids.

Mitch: 25:43 Oh man, I could have been on Status Survival this morning in my jetlag.

Bob: 25:49 Next time you’re doing this, you want to join the alliance. I joined multiple

alliance. When I goes by, I was interviewed, I started playing the game,

and I got sucked in completely. And then I joined one alliance, and once I

actually started work, I just didn’t have time to play [unclear 26:03]. So

they very quickly kicked me out because I wasn’t committed. It’s like

dating. I tried another line that was still a little too involved. And the last

one was: “Okay, well, as long as you participate at some level, we’re

happy to have you.” But yeah, I’d say that the pattern tends to be that the

people who stay are very involved and will spend a lot of time. Certainly,

multiple times a day and hours a day. Just because the core, the really

compelling part of the game, which drives the long term retention is this

social element, both within your alliance, where there’s a lot of trading

resources and battle and preparation. And then you have these epic wars

alliance against the lions and reigns. And so those all happen in real time.

So it tends to require a pretty high level of commitment for those who are

still there. So yeah, it’s pretty deep engagement. Hence, why adding IP,

introducing a new hero can be compelling. Because... It’s interesting. For

Daryl Dixon, we made it reasonably accessible. And it was quite easy to

get the hero, which meant that all the core players unlocked did more or

less instantly. But that meant, in some ways, it was less compelling. If the

people didn’t have to work as hard, whereas the Joker, we changed the

way the process work to collect the assets are handed in, took longer. I

think actually it probably worked better. In that sense because it felt more

of a commitment and the people felt there was more value around the

character. We tend to have these events and these different storylines that

unfolds as part of the unlock process.

Rachit: 27:37 Yeah, it makes sense. I’m curious to jump into... Obviously, you

mentioned Daryl Dixon there. But on the flip, I’m interested in that

Orlando Bloom collaboration. I think games often generally lysing the

fictional characters, not necessarily talent or the actor behind it. What

made you do that? And how did that come about? It’s quite different to

what we’ve seen in Mark.

Bob: 28:06 I think the original, we were starting to looking at from a marketing

standpoint first and how can we evolve marketing. We kind of did this

discussion. King of Avalon is a game that’s been around for six plus years.

And we’ve done a lot of marketing over a long period of time. So we need

to start doing something different. So the original discussions were around

on a marketing level. I’m thinking about Orlando Bloom as a spokesperson

for lack of a better word, and really thinking about how could he help with

marketing campaign. And so the original discussion started with marketing

and having him promote the game. And so it just really went as the

discussions move forward. There was more and more interest in having

some type of integration in the game. So that happen organically. The

initial discussions with his team were all around: “Hey, can you do a

marketing campaign to promote the game?” Great. And then as discussion

went forward, it became clear that there was interest in actually having

him join the game and integrated the game. So way the other way around,

it wasn’t initially, to your point, there wasn’t, or we need to have Orlando

Bloom himself. In the game, there’s a credible fit and a nice fit from a

marketing standpoint. And then discussions evolve to the point where they

go, “Why do we create a hero?” And it’s a funny thing, even though the

heroes actually called Orlando Knightshard. So it’s a fictional character

that’s obviously him. They just don’t.... And then the commercial is all,

“Knights of the Round Table” are theory. And [unclear 29:44], he

obviously has lots of credibility in that type. So there’s a great commercial

that sits with that character. And he’s all dressed and has medieval armor.

So it started with marketing, and then more pushed into this game

integration. And again, there was a bit of a conceptual shift to move him

from an actor pronoun game to an actual character. So you’ve entered this

hybrid, where it’s obviously Orlando Bloom, but it’s not called the

Orlando Bloom in the game. [Overlapping 30:17].

Mitch: 30:21 I was gonna say, I mean, it does organically. I can see how that would

evolve. And Orlando Bloom is quite famous for playing fantasy characters,

right? I don’t imagine if you’d have done it with Mark Wahlberg, it would

have had the same effect. So it makes sense. It’s an interesting

collaboration and cool to hear how it evolved. One of the things I want to

talk about is working with big IPs and how it’s fraught with risk as well. I

mean, if you work with one of the big IPs and you make a really bad

experience, then you’re going to suffer reputationally. If you don’t make

an experience, which is true to your fan base, then you’re going to suffer

financially, because no one is going to buy or no one is going to engage

with the collaboration. So how aware of those risks were you when you

started down this path with these big IPs? And how did you manage them?

Bob: 31:25 Yeah, it is really important if you think about this from the outset. So I

think, with the question of the fit, it wasn’t really scientific. It was very

much again, as he said that, they really all came out of this initial player

survey. And even in subsequent discussions, we’ve been looking at that

survey and talking to players and understanding what they wanted to see.

So in that way, there wasn’t that much risk. In the sense of Walking Dead

was, we knew it would fit and resonate with the audience, but to your

broader point on the actual integration, I have to say, we have a pretty big

team of writers and for the type of game that it is, there ends up being it’s

via a lot of text, a lot of narrative, a lot of storyline as you work through.

And we have these regular events that take place. And so there’s always a

branch to the story and there’s this whole thing and scientists trying to find

a cure early. Because there’s already a pretty involved story. So we have to

think about how Daryl Dixon could fit into that story. So the good news

was, there was a lot of material to work with. The bad news was it had to

be credible and there had to be a story that worked. And again, I think the

Daryl Dixon thing was pretty natural. And, again, just given the game the

way the game works, creating hero was kind of the obvious thing to do.

And I think we were in a way lucky that the game had a template in a

sense of the way the events work and the way the characters work, that

you could logically see. We are already creating new heroes all the time.

So you can innovate to say, “Okay, well we’re going to create a special

hero.” So the way our games are format and made, I think, it’s an easier

thing to structure. I think going to the Joker or the Orlando Bloom one, we

had to be much more creative around how we built the special storyline to

make it work. Because again, you really just put Orlando Bloom in the

game, there would definitely be this moment of a jar and would not

necessarily resonate with the audience. You could get it wrong with the

Joker, is even probably a higher looks plan in the sense that, why in the

world is DC character in the game? There’s no Batman, what’s he doing?

But yeah, the storyline was the hardest part, I think. And then building

events that built maps the Joker universe to the status of our universe. And

that was I think the hardest part to mention. Again, for a deeper game like

ours, it’s easier because there’s more material to work with. I think if

you’re looking at a casual game, where it’s primarily, like I say traditional

puzzle game, it’s very difficult to fit IP into that, because there isn’t really

much to actually integrate into. And that’s I think where it becomes more

challenging is, if there is a deep storyline already, then it becomes easier.

And I think that’s one of the challenges of being for different types of

games. And I think if we go forward then finding that right balance, just

looking at very very current example, Subway Surfers have just launched

their next game Subway Surfers Blast, which is again a pretty standard

well on well-established puzzle mechanic. But I think just playing on the

train didn’t actually stopped the mind, but they’ve taken what is an

incredibly iconic game specific IP. And from what I can see, they basically

constructed a nice meta that lives in that universe and will take various

elements from the runner game and build a storyline that makes sense or

MJP charactering. And so I think it can be done. It does require probably

more work and more effort than might initially be perceived. I think,

actually, you made a good point. IP can be relevant just from a marketing

standpoint, who’s an endorsement figurehead. Would you accept that it’s

just marketing? And you’re going to benefit from audience awareness,

there can just be a brand fit. And that maybe isn’t that. I think, for our

purposes for these longer term integrations as to really fit with the game.

Mitch: 35:35 Yeah, that’s substantially less matter in a merge game than there is in a

zombie survival game. Right? So it makes sense. Just quickly, talking

about managing the risk of staying true to your players, the Joker, I think,

is a really good example of that, how you’ve started him off as a hero and

then turn him into a villain, right? I think, if you’d have just tried to make

the Joker a hero, it wouldn’t really work the same way. Because people

would be like, the Joker is a mischievous villain, right? So, yeah, that’s

clever. It’s a really staying true to the character.

Bob: 36:13 And I think, you need to add to that, we also have been lucky with the

partners we’ve worked with, in the sense they... Both for MC and DC,

they, of course, live and breathe these characters all the time. And there’s a

huge amount of knowledge and backstory and just real awareness, and we

learned a huge amount from them throughout the process. And we had so

many, obviously, regular calls and approval process. And as we built that

the characters in Sterling, we worked very closely with both partners,

respectively. And now I lost count of the number of times DC would say,

you know what, the Joker just wouldn’t do that, or the Joker would do this,

or this doesn’t resonate, this isn’t true to his character. Exactly! He’s

mischievous. He would never use it. So, again, I think that’s another thing

that we learned a lot is coming forward, where we’d always go with their

own IP and build their own storylines. And you’re, of course not

constraining them anyway. There’s positive and negatives to having these

constraints. And I think there is a huge amount of value that we were able

to gain from partnering with, wherever there’s DC, they have this amazing

knowledge of what the characters should do and what will resonate, and

will resonate with their fans. So we evolved a lot based on their feedback.

And that’s, again, key to making it feel authentic and credible. Joker also

has to feel like the Joker, right?

Rachit: 37:38 Yeah, having that opinionated partner that knows their law and their fan

base is probably going to be helpful in reducing risk and making sure that

things land well. So that makes sense. I think, on the flip side, you

mentioned, on the player base side, it was that the surveys that made that

initial walk into collaboration and have come to mind and make sense.

And I guess for that you need to have players in the first instance. So that

leans into obviously content integrations and collaborations on existing

games. Is that something that you will continue to only work in that way?

Or do you think...? There’s obviously publishers likes Scopely? Working

with IP based games and licensing games for licensing IP for new games.

Like is that approach that you think is just outside of FunPlus DNA? Or is

it completely different in how you approach it? I’m curious on your view

of using IP to build a new game around?

Bob: 38:37 Yeah, historically, we had built their own IP. And we are, though, looking

at the idea of fully licensed games. And it’s really doesn’t [unclear 38:48]

to your point. You’re making a bet, a much bigger bet on the IP and

finding it... But again, I think at some ways, the risks are higher, the

complexity is infinitely higher. But the same question, in our case remains,

what IP could we apply to strategy in this case? And so there are some

things that, hopefully, you’ll see in the not too distant future where, again,

we are measuring an IP with an entire game experience. And that, again,

risks are higher, but, hopefully, the upside is higher. And in this new

environment where marketing is harder, having a full IP experience will

hopefully be beneficial.

Rachit: 39:32 True. It’s very nice to get the inside scoop, obviously don’t know what it

is, but I looking forward to seeing whatever you’re planning in that. I think

it makes sense, especially, if you’ve seen the value of IP within games,

then I think it’s easy to probably justify and take on that risk to potentially

land with something bigger that’s strong out of the gates and you can

appeal to that audience. So makes a lot of sense.

Bob: 39:56 Yeah. And again, I think the same challenge apply. So it’s the process of

both picking the art case and IP that would match with the strategy genre.

Rachit: 40:05 Totally.

Bob: 40:06 Also, they know the integration work. And it’s certainly not an easy fame.

There’s incredible successes, and also games that just didn’t work,

because, again, that marriage wasn’t credible or wasn’t properly executed.

But I do think overall, IP will continue to grow in importance. I think just

as again as gaming evolves and as marketing evolves, I think, the need to

differentiate and the need to have some sort of recognizable brand, I think,

that’s going to become more important. You’re gonna have the established

IPs, integrated gaming, and then of course, new IP coming from gaming,

going to other forms of media.

Rachit: 40:48 I think the constraint you mentioned is also really, really healthy. You

know your strategy players from what you’ve done to date. And so it’s

easier at least to talk to the world about you feeling like, what can work

here? What will work for this type of player? They’re looking for

something that will engage them, that can build a world that actually

works with the strategy genre and the meta. So leading into that makes a

lot of sense. And I think it’s a good [unclear 41:11] for any developers and

publishers that are looking at licensed games. At least, if you can lean into

what you know and the players that you know, it’s easier to build games

around that and make sure that it’s IP that’ll lay in the category.

Bob: 41:25 Yes.

Mitch: 41:28 In terms of what you’ve done today, are you able to share anything around

metrics and what good looks like? If you’re talking about a UA decrease in

cost, or that kind of engagement or monetization lift that you’re aiming

for, what does that look like? And are there any particular learnings there?

Bob: 41:54 Yeah, good question. I think what we were hoping on the UA side without

sharing metrics was, we were hoping to be able to expand the range of

audience we targeted with UA rather than necessarily expected to be

cheaper. We’re hoping we could broaden the top of the funnel and get a

broader mix of people engaging and converting. It kind of works. I think,

part of it was, again, it’s a different approach. And then they required a lot

of optimization. And we did some of that. I think we probably could have,

in retrospect, gone further. And really thinking about how could we further

adapt our marketing and create up messaging to really get full benefit from

the IP and reach that audience. But I think for us that was the primary

metric looking at UA was less saying, existing audience will become,

which convert more cheaply as we can also reach a broader audience and

we wouldn’t otherwise be able to do with our own IP and our own

creative. So that’s, I think, from a marketing standpoint. In terms of the

retention, we look a lot obviously, of the long-term engaged players and

we did see some positive trends in terms of level of engagement and in

monetization. But it was, I think, again, the impact and the scale that the

game is operating out. It was not dramatically positive. I think it was net

positive. I think it was more... We did see a lot of positive feedback,

anecdotal feedback from players. They were excited to have some the

game. And so at some level, the fact that community was positive and we

saw lots of positive feedback was in some ways enough. And, again, we

did see some improvements in terms of longer term retention and

monetization of that. The most engaged player base. But it was, in some

ways more important that the community saw it as a positive and it was an

event that was well received. Obviously, be great if you saw these

dramatic lifts.

Mitch: 43:56 It wouldn’t adjust. We went for the sound bite where you’d be like, you

know, and it was amazing, and we smashed all of our targets and IP is the

way to go.

Bob: 44:09 I think what is clear is that from Walking Dead to the Joker, we figured

some things out. And again, we changed as I was mentioning, effectively,

the unlock flow in the process of unlocking the character and the hero.

And ironically, making it harder to do made it more compelling, and drove

both higher engagement and higher monetization.

Mitch: 44:34 How much of that is a science versus an art? Do you have benchmarks

now that you set out when you do an IP collaboration to say, we absolutely

have to meet this benchmark for this to be successful, or is it more like you

said, it’s more qualitative, where you look at it and say, what did the

community say about the integration?

Bob: 44:55 Yeah, I mean, we obviously wanted to make sense from a financial

standpoint and to see positive metrics. I don’t think we need to have a

benchmark. Because, again, looking at what we’re trying to do now, I’d

say there’s probably going to be an even heavier emphasis on this idea of

broadening the audience appeal, whereas, I think particularly the first, the

Walking Dead was much more appealing to the core audience who are

already in the game. With the UA element of the marketing element, a

second priority, whereas I think now given the stage the games out and

maturity of the game and the evolution of marketing. I think we’ll lean

more into that first element. And so they think that’ll become a more

critical metric, which is, can we really broaden this all? Can we bring new

people into the game and convert them?

Rachit: 45:44 Yeah, makes sense. And I think you’ve definitely figured it out within

your space and your games? Well, and I’m curious if you had a view on

market and genres, in general, for [unclear 45:53]. Do you think IP works

better for some genres and categories? And are there places where you

think it doesn’t make sense? And what makes collaboration successful?

What is something that you’d avoid? I guess, as final notes for anyone

listening.

Bob: 46:10 For sure. No, I think, again, that the range of IP is so broad. You look at

things were, in a way the ultimate IP collaboration, but it would have been

EA FIFA. That’s no longer the case. But if you can do, truly taking,

making way FIFA became a global brand as a result of that. But you look

at the credibility that provided and the success. There’s examples like that,

where there’s a very natural fit and clear value at, from bringing IP or

characters into a game. And then you go more and more towards a

fictional realm and use Star Wars and Harry Potter. And I think, couple of

keys, one is matching the IP to the type of game. So I think if you’re

looking for these deeper, more immersive, mid-Korean beyond types of

games, you need IP that has that depth of story and the depth of character

and the [unclear 47:07]. Or else you’re just going to run out of... You can

only go so far. You can’t match the depth of the game and the engagement

to the depth of IP. So that’s why you look at the recent Harry Potter game,

you look at some of the more successful Star Wars games. They’re able to

build this long, continuing an evolving storyline, because there’s so much

content too and so many heroes to unlock. And I think that’s where, if we

are to do an IP license game, we’ll need to have something has this broad

universe of characters that you can pull from. Whereas I think if you’re

looking at something that’s much more of a casual experience or more

mass market, then again, matching the IP to that audience works. And I

think unfortunately, you look at something like, there’s some games where

it hasn’t worked, because the gap is too big. But if you can find an IP

that’s broadly accessible, and that can fit nicely with a casual game, and it

still has to work and still has to feel authentic. And I think that’s always

the balance, right? Is finding something that matches your type of game

and your audience, but also, where you can be credible and create some

sort of effective experience. Because as I think we’ve all seen, their games

where they more or less tacked on the IP and it works okay and in initial

marketing, but then the initial conversion is fine, but the retention is

terrible, so the integration is unfortunately largely wasted. So I think that’s

all that authenticity, and all that matching type of IP in the audience that

attracts to the type of game you’re trying to build.

Rachit: 48:44 Yeah, I think we’ve heard it before. And I think it’s nice to hear it again,

the thematic and audience fit is really very, very important. And then

actually being able to work with the IP and support it in a way that the

integration feels real and caters for the audience that’s coming in because

of the IP as well have anything to do. So that’s really helpful. I think we’re

coming up on time, Mitch. Anything on your end you want to ask before

we wrap up?

Mitch: 49:07 I do have one final question. Really important question. Will the players of

State of Survival ever get the cure? You mentioned the scientists are

working on the cure? Is it ever coming? It’s like The Walking Dead. Is

there ever gonna be...?

Bob: 49:24 There gonna be a happy ending. I don’t know. I wouldn’t feel very

optimistic for the game. They’re gonna have to suffer for a while longer,

unfortunately. It isn’t such a funny thing with that. The story continues to

evolve. And there’s always hope, but I think the cure is imminent.

Mitch: 49:45 When you finally do wrap up State of Survival, I think it’d be a nice touch

to just be like your... It’s cute.

Bob: 49:52 Did you go back [Overlapping 49:54].

Mitch: 49:54 Yeah, cool. Thanks for coming on, Bob. That was really interesting to see

how you’re approaching things at FunPlus. Thanks for the time. Really

appreciate it.

Rachit: 50:03 Thank you Bob. Take care!