David Rosenthal: belief

Transcript context

…Okay, but let's talk about the business. Nintendo is cute, doing $13 billion of revenue a year, $5 billion of operating income, but let's look over at Mobile. Let's see how Apple and Google are doing, who by the way, make no games, just operate stores and sell devices. They're getting away with murder on mobile games. Sixty-one percent app store purchases are games. It turns out that the killer app is mobile games. Casual free to play mobile games turns out to be the killer app for the iPhone. $90 billion in total revenue per year, which means almost $30 billion for Apple and Google. That has nearly 3X Nintendo's very impressive revenue from the Switch this year. That is the pot of gold in gaming. Yes, totally true. I think one of the things that this episode has really crystallized for me, though, is that it's wrong to think about gaming as one market because it's not. I think that's right, especially as we're entering the era of people hanging out in videogames. The metaverse is here, it's just in people spending time in a digital environment that isn't necessarily VR, isn't necessarily immersive. It's hanging out on Discord while you're playing games together or whatever. To the extent that video games are where you hang out with your friends, that's a super different use case than me playing Mario Kart to pass the time in my living room, and also a super different use case than someone who wants to basically play a slot machine on their phone while they're on a flight. These are all such different human experiences and jobs to be done, but it is totally crazy to call them all gaming. To your point, I bet if you talk to a Nintendo executive, they look over at mobile and they're like, okay, sure, Apple is making $27 billion a year (Apple and Google) on people playing what you're calling mobile games. But if I look at that, I think only 2 billion of those are games, and the rest of that is something that's not games. It's some statistical extraction of people's money through digital marketing.…

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