Ep. 113: How Voodoo is Disrupting the Gaming Industry

This week's guest is Alvaro Duarte, VP Casual Games at Voodoo. In this episode, Alvaro reveals Voodoo's business model, unique approach to game development, and the screening process for Voodoo's games. Voodoo has a unique approach to game development, releasing games that are in a "sooner state of product" and then iterating on them after they are live. The screening process for Voodoo's games is rigorous, and they look at gameplay, retention metrics, CPI, and ROAS targets, among other things.

Creators & Guests

Host

Tom Hammond

Co-founder and CEO UserWise | serial entrepreneur | Inc 500 | angel investor | startup advisor

What is Mastering Retention?

Welcome to the ultimate gaming breakdown with Tom Hammond and Neil Edwards! Tune in every week as we deconstruct today's top games and reveal the secrets behind their success.

How Voodoo is Disrupting the Gaming Industry
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[00:00:43] Tom Hammond: Hi everyone. Welcome to today's episode of the Mastering Retention Podcast. Today we have a really special episode. We're gonna go deep into everything that Voodoo has going on, which a lot of people may not know, but it's a lot. So really, really excited to have Avaro Dewart here with us. Nice to meet you.

[00:01:07] Yeah. So welcome. You know I always like to start these things by just kind of asking like, what's your story? Like, how'd you end up in games and, and where you are today? And you know, specifically like, okay. You know, Voodoo's, like a hyper casual publisher. And you were like at the, the top of, of King, right?

[00:01:29] Like you were, you were riding high. Like what are you doing at Voodoo? Yeah. So, so tell us your story and like Yeah. Well, what's going on? Well, that's,

[00:01:36] Alvaro Duarte: that's, that's a funny question. So first it's a real pleasure to be part of this fast. Thanks for [00:01:43] posting me, Tom. Well, the story is, I've been playing games since, like, I could, I don't remember.

[00:01:49] I've been, I had all the consoles, played all the things on pc. Amiga. I'm a huge nerd and I had the privilege and the chance to actually make a career out of it. And what brought me to to Voodoo is, Well, through my career, I'm always, it sounds very cliche what I'm going to say, but I'm always trying to put myself out of my comfort zone and I really love to build things that are, that seem very tough or almost impossible to do.

[00:02:25] So I remember when I worked. In in Gameloft, we, we were really setting up studios in new countries, for example, like New Zealand or trying to make games for the whole world. Mm-hmm. From teams based in Korea, in Japan, and long time ago, like [00:02:43] when it's before iOS, this was really something impossible.

[00:02:48] Yeah. And at King it was also how you bring a company. Back to gross. When the model was, okay, you release a game and then you need to keep on releasing other games. And and here at Voodoo, well there was this challenge that is, okay, let's build something from the, from scratch after hyper casu. And I really, for me it was really intriguing.

[00:03:18] It felt very, very difficult, but at some time, exciting. And there was something that I felt when I was doing my interviews and doing my research, I say, okay, but Voodoo has actually something that is very, very unique. And it reminded me the reason why I joined King in the, in the past, king had a, a very interesting approach to [00:03:43] games.

[00:03:43] That is, they had a website was royal games that you had hundreds of games that people could play and was a bit of a b betting platform. And it was games that were made by a crew of one or two people, it not so different from hyper causal games. And after they took the games that were raising through the ranks on popularity, they brought it to Facebook and after they brought it to mobile, when they acquired a tech that allowed them to do so.

[00:04:11] And that's the story of Kenny Crush. They had this really interesting funnel. And when I looked at Voodoo, I said, Hmm, like this company, like they literally shipped thousands and thousands of games every year. Surely there must be some games that could be something else than hyper casual. And that's, that's where it raised my curiosity.

[00:04:35] And that's was the beginning of the hybrid casual story.

[00:04:40] Tom Hammond: So, so are you saying voodoo is [00:04:43] No, is kind of beyond hyper causal and it's kind of evolved to something casual or hybrid casual, whatever you want to call it? Absolutely.

[00:04:52] Alvaro Duarte: Like maybe you've seen some of the, maybe some of the people here in the gaming community.

[00:04:59] I've seen some articles when Alexander, she was mentioning that Hyper Casu is dead. He's a dead nof, and. Well, actually for us, we, we really think that it's, it became too tough because of the race of the CPIs due to the change, for example, on from Apple. Mm-hmm. And actually we moved everyone in voodoo to hybrid casual.

[00:05:23] So at this moment, everybody at Voodoo is working for hybrid casual. That is a game charm that is a bit between both worlds, between hyper causal. And the classic casual games as we know them or even mid core games as we know them.

[00:05:42] Tom Hammond: [00:05:43] Okay. So, you know, I, it almost like whenever I hear of someone like working on launching a new mobile game today, or like they're talking about launching a new game, I just get this like pit in my stomach where I just like feel bad for them because I feel like it's just gonna flounder and fail and they put all this work into it.

[00:06:03] That's so. And you guys are coming in, like you didn't really have any like non-hyper casual games, right? So you're coming in and all the games, you're going all in and they've gotta be new games and you've gotta find success in that. So how are you guys possibly managing to do that in today's environment?

[00:06:24] Alvaro Duarte: I have exactly the same concern as you, when I hear people say, yeah, we are going to build, these students going to be cool, we will make a gamer, and so on and so on. Tru is, there is a, a paradox. It was never that easy to make games nowadays from a tech [00:06:43] perspective in terms of tools with the platforms, and I'm looking back.

[00:06:47] At mobile gaming, like for example, 10 years 10 years ago, for example, like making games became very, very easy. But actually launching them never been so hard as if to as of today and for example, without high skill of on marketing aspect, you cannot just have a good product. And for your question, how we are doing it, Well, I, I think it echos a little bit what I said or what brought me to Voodoo.

[00:07:17] I really believe that innovation comes from a funnel of iterations. Mm-hmm. And. For example here, I will give you some statistics. When we have now the, the whole company that is dividing in two main teams, let's say one is about testing prototypes, we call it the core team, and the other big team in Voodoo is to actually take those prototypes, [00:07:43] launch them, and hopefully make those games resilient for five to 10 years.

[00:07:48] Hmm. So the team that tests new prototypes, they test around 1,500 prototypes a year. Wow. To put that in perspective, if you had to build a studio, for example, with, I don't know, six people, and you say, okay, let's spend one prototype one month per prototype to arrive at that number. It'll take you 60 years to actually test 1,500 prototypes and outta those thousand 500 prototypes.

[00:08:19] Our ambition is to release four games per year. So the funnel is really massive, and all those games are not hyper casual. They are all oriented towards hybrid, casual, hybrid meat, qu reef, if such a name exists. So, so I, we take, that's one of the key ingredients here.

[00:08:39] Tom Hammond: Yeah. Okay. So I have a, a question here that probably a lot of [00:08:43] other people have too, which is, can you define what is hybrid casual?

[00:08:48] When you say it here, like what does that actually mean for, for our listeners? Alright.

[00:08:54] Alvaro Duarte: Technically at some point there will be no difference between hybrid casual and casual, but from my point of view, what defines hybrid casual take? It's a casual game. That was released in a much sooner state of product.

[00:09:15] Hmm. And so that's one, because let's say an I, a casual game will take couple of years, or sometimes four years in some companies to actually being able to be released. An hybrid casual game will be released much, much, much sooner. And the iterations and the improvements on the product happen when the game is already live and at a certain scale.

[00:09:37] But after, I would say four years, The game will be very [00:09:43] comparable from production values gameplay to a casual game. The second difference is on the acquisition. The acquisition usually for casual games are really targeting to a more precise audience with CPIs that are quite high. Mm-hmm. Hybrid casual tend to bring the hyper causal.

[00:10:07] Process is to really bring much more people in the, in the beginning from a much, we cast a much wider net. And the third difference is the monetization of hybrid casual is much more balanced towards I in up and ads. Where casual games usually it's like what, 80%, 19% sy up 10% ads around hybrid casual games.

[00:10:33] Are around 50 50 or can be even skew to a little bit more ads in the, in the beginning. And based on [00:10:43] that, the roas. So basically the return on the spend, it's much faster on hybrid casual rather than casual game. So for example, when you invest $1, let's say to acquire a user maybe in a casual game, you will rate one year, one in and a half.

[00:11:02] To get your money back, right on hybrid casual, you get your money back in a matter of weeks or one month, for example. Mm-hmm. So the philosophy is a bit different. The size of the team is, is very different as well. Hybrid casual games usually are being done with a team of six people, eight people, where other casual games is already a much bigger machine as well.

[00:11:28] Yeah. But truth be told, It's kind of it's kind of the same. It's just the philosophy of marketing and production that is different.

[00:11:37] Tom Hammond: Yeah. So it sounds like you guys took a lot of your expertise in marketing and your expertise in ad [00:11:43] monetization and then started layering it on, and you mentioned the, the teams were a bit smaller kind of at first as it gets, you know, over time, more towards that casual, do you kind of see the team size kind of increase?

[00:11:55] Yeah, absolutely.

[00:11:56] Alvaro Duarte: There, there are no, no limits. For example, there is a game that we, that is being quite successful for us, again, called mob control. Mm-hmm. Started with a team of six. But we are in an run rate, for example, to have a hundred million revenue this year with around 30 million gross margin on mob control.

[00:12:16] Therefore it makes no sense to keep the team as the size of six people. So the number of the crew members scales as much as the margin as well. The reality is that the teams are small because all the groundwork also was done by the core team before. So you remember that they tested 1,500.

[00:12:37] Prototypes before, right Before giving to the live team a game that has the right retention, the game play, the [00:12:43] c p I and so on. Mm-hmm. It allows us also to be more streamlined at the release stage. Okay.

[00:12:51] Tom Hammond: So this is very interesting. Okay, so let's go back. So we were talking about the core team, which you've kind of got the two main teams.

[00:12:57] We're talking about the core team. They do 1500 prototypes. Out of those, you're looking for four, like. Tell me about the cri, tell me about the criteria. Like what is the screening process like? Like what do you actually shoot for in there? The gameplay first we always look at, so they are not games that are hyper causal looks.

[00:13:16] Alvaro Duarte: So we always, we always look at gameplay that we feel could be relevant. Will it be a game that will still fi be enjoyable? For the years to come, will it be a game that has, that allows the right economy also for a game that stays resilient for the years to come? So that's the basic questions.

[00:13:40] After we screen the C p I. [00:13:43] We try to look at games around a dollar, not to go too much above $2 c p I, but some exceptions could be made if we, if the economy is very strong, we look at obviously the ROAS targets. We, for us, a good game at a live stage needs to have 150% roas. In the first 120 days, for example.

[00:14:07] And we look at the, the right playtime and the right retention metrics. We like games that have a day 30 of 10%, for example as a start. And when you have all those ingredients combined, it's very, very hard to actually yeah, find those we bring to the live teams and. And, and sometimes we try maybe 12 games, and technically we will release only for the year.

[00:14:36] So we keep on killing games even when they move to live studios.

[00:14:42] Tom Hammond: Yeah. Okay. [00:14:43] So, so tell me about the live studios. Like what are they doing with these prototypes or, or what is a prototype even look like, I guess, and, yeah. Yeah,

[00:14:53] Alvaro Duarte: that's a, that's really cool. The prototype is really an MVP with the whole game loop basic meta loop and basic economy in whole one package.

[00:15:07] It's really a game. Many companies, sometimes they, and I think it's a mistake, they tend to test. Things in a separate way. So they test the game, they, they test the retention, they set the retention. Then after they add the economy, and obviously the retention changes because you introduce difficulty in apps.

[00:15:26] So here it's a, it's a full bundle that is received for, is the live team. And then the live team is there to make the game better, deeper all the live ops work and to create more and more content, right? And really to make the [00:15:43] game From a basic core loop to actually something that becomes, I don't know, in some games, more social, in some other games, to have different modes or different ways of playing.

[00:15:55] Basically a game that's becomes fun to be played over the years.

[00:16:00] Tom Hammond: Yeah. Okay. So it almost sounds like. You've found that there's like two types of people and you can almost recruit those two types of people of like, you've got the people that love, like prototyping and like making new games and trying new things and stuff.

[00:16:21] The, the zero to one people. And then it sounds like the, the live team is over here, which are the people that like, Take that thing and they, you know, polish it and they cut it and they make it into that like, pretty diamond that you can actually, you know, then go and sell. So would you That's exactly that.

[00:16:42] Alvaro Duarte: [00:16:43] That's exactly that. And I think you summarize this very, very well. Obviously you have people that can do both very, very well. But it's quite rare and some people, as you mentioned, can be very, very passionate to go from zero to one. So really to bring the rocket out of the atmosphere. But after, it's another usually set of skills or interest to, to actually going from the atmosphere to Mars, right?

[00:17:09] Mm-hmm. And we are not the only company that came up with this conclusion. I, I was reading this article on Super Cell that they completely reorganized a bit their org on that. At my time at King also the division was already made between new and live games. It's a lesson that. Usually it's, it sounds very logical, but it's, it takes a bit of maturity to actually, I've seen have this radical approach.

[00:17:42] Tom Hammond: Yeah. I've seen so [00:17:43] many studios fail because of this though. It's like, that's right. We, we, we made this game. Why isn't it scaling? Or now we've scaled this game, we need to make a new game. And like they send the same people or their best people, but then they like flounder and, you know, one side or the other, because that's not.

[00:17:57] What they're really good at. So it's

[00:18:00] Alvaro Duarte: very hard mentally to actually let go of your baby, right? And to, to give your game to another team and say, okay, take care of, take care of this. Right? And It's you, you need to be really confident about what you're doing. And, and at Voodoo we actually introduced this new org.

[00:18:17] Last year the Casual games initiative started, well, I, I arrived two years ago and we did the reorg. Yeah, last year. It was quite fast, but it's quite counterintuitive. And when it works you say why other companies are not doing like that. From the beginning.

[00:18:38] Tom Hammond: Yeah, so, okay. So I wanna talk a little bit about genre here, because [00:18:43] generally we've seen like the most successful companies tend to stay in their, you know, realm.

[00:18:50] Like I did a deconstructive redemption impact, you know, a few years ago when it came out. And looking back historically, If you look at all their games, you can kind of see, oh, well they built this piece here. They found something that worked and this led to the next game, which they built a little bit more.

[00:19:03] And eventually that led against you impact. We saw the same thing with like you know, play Ricks and their journey. That's right. Yeah. It, it almost seems like you find like your genre, your expertise area and you just like really nailed down cuz you know that area. So what are your guys' specialty? You know, like where, where's your focus area?

[00:19:22] What are you kind of doubling down on?

[00:19:24] Alvaro Duarte: That's a great question. I would say that the specialization of those companies, they come more after the fact rather than with intent. Many times, some companies, they try a bit of everything and then suddenly they say, okay, this is actually working. Let's double [00:19:43] down.

[00:19:43] If we are talking about Super Cell, they were doing tower defense game and like pharma. Farm resource management type of games, quite opposite, right? Yeah. Here I would say we don't have a preference of genre because actually our, if you are asking what is what makes us unique, it's, I think it's our process, right?

[00:20:05] The, this funnel to test so many core games, our capability to actually acquire players, I mean, voodoo. It's the company that attracts more players, has the capacity to attract players just after Google and Facebook. Like the, the amount of downloads from Google Games is huge, right? So this process is very, very unique and allows us also to look at different styles, different genres, and to be a bit agnostic as long as the metrics are right and the advantage that we have.

[00:20:42] I think [00:20:43] we have two advantages. One, also, voodoo is a total independent company. We are not in the stock market. And when you are a public company, you get also a ton of external pressure that says you need to focus on what you do. You need to double down. You have all those, these teams of consultants from the best.

[00:21:03] CG making sense. Say, okay, this is where your business, this is what you should do, and that's it. And it makes total sense when those companies are at that stage. We are in the situation that we can really do what we think is right and we can really take many, many risks without having to justify ourselves to tons of external stakeholders.

[00:21:24] I think that's really a big strength. And also because we come from the world of hyper causal, even though we aim for really billion dollar games, it allows us also to not have a crippling ambition that. Makes us kill [00:21:43] everything and not release any game. Because so many companies that are at that stage are saying at PowerPoint stage almost, is it like, is it a billion dollar idea?

[00:21:52] And to be honest, like who can tell? You have to try. And we are biased towards action. So I believe that's. It's more our process, our culture that makes a key advantage. But who knows, maybe mob control or other games are going to be billion sellers. And next year's you will, you will ask me the same question and I will tell you no.

[00:22:16] Our genre is that one and that one, and that's it.

[00:22:19] Tom Hammond: Yeah. So I mean, like, as a, you know, example, have you guys done any, you know, iteration on like puzzle games or puzzle metrics? Yes. And found, like, have you found things that. Really don't work or that really do work?

[00:22:35] Alvaro Duarte: Oh, we are constantly testing puzzle games.

[00:22:38] Actually, we have one that is working pretty well by our standards. It's called Co Themal [00:22:43] is a linker game. But we are constantly iterating. The reality is it's pretty obvious, but the genre is extremely saturated. Innovating on the gameplay is difficult as the players are not super receptive to have the mechanics that really change.

[00:23:03] So you can really innovate in the meta or maybe make the gameplay juicier. And sometimes also we are, another way to approach this is that we are constantly screening for companies to acquire. For example, we had the pleasure to bring a company based in Israel called Beba that came to join Voodoo's team.

[00:23:28] And they are the specialist on table board social games. For example, gene Rami back Gayman. And they are, they have the know-how, they have the expertise, and they are the num, the best at what they do. [00:23:43] And here this was an expertise that was too long for us to create from the inside. So we just acquired and we, and we acquire small studios over the year and constantly looking for other centers of expertise here.

[00:23:58] Tom Hammond: Yeah. So yeah. Tell me more about like what you're actually like looking for in terms of like people or studios, you know, if this sounds very interesting. In terms of m and a? Well, m and a or you know, okay. There might be some listeners that are like, Hey, this sounds like a cool place to work. Like how do I know if I'm like, voodoo material or I'd fit in well, or, yeah.

[00:24:21] Alvaro Duarte: Alright. I will, I will then distinguish the the m and a and fit over. And for people that just want to join us and to build a studio internally on the m and a, what we, what I usually like to look at is companies that are really well managed on their own. So, Not to have these companies that it's emit like these kind of documentaries, that you take an [00:24:43] old car and you rebuild from the outside.

[00:24:46] Like we, what we are trying to do is already difficult from the inside. We, we don't want to spend time on rebuilding something from the outside. And and because the, the, the culture of voodoo is to give maximum autonomy and accountability. We don't like to go for a company that we just acquired to change the culture, the identity, the processes is basically we want to turbocharge a company that is already on a good trajectory.

[00:25:12] We are looking also for companies that have a special know-how or expertise and that have a combination of, okay, a resilient revenue. But we see that there is something that allows them maybe to replicate success. The price stack can be really. Like, there's no really limits as long as the business is is there and the metrics are there for the people that want to join [00:25:43] us.

[00:25:43] To build a studio, yeah, there is something to know about. I think Voodoo is a, is a culture that is extremely performance driven. That is. When we, when we ask when we, when we recruit a studio director, the philosophy is we give them a budget envelope and, and a game that comes from the core team.

[00:26:07] And basically they can decide who to hire, how to hire, how to work if it's remote or not remote at the processes, the promotions, and the budget covers the offsites or whatever. I don't take really much action here. What really matters is, will this. Studio director meets the milestones and the targets based on the performance of the game.

[00:26:30] In co. In summary, when in Voodoo you have a studio director that is working on a game that is scaling very well with a very good team, without bullshitting you, I think it's probably the best company to [00:26:43] work for or the best, because not many companies offer really that total freedom. No rates tape and the studio directors have a bonus based on the performance of the game.

[00:26:55] Hmm. On the other hand, for the people that are good enough or average, voodoo is also very quick to take action. And this can sound sometimes a bit aggressive culture. It's not toxic, but, To be honest, it's not for everyone. Doesn't mean that we stop the studios on the spot, but we are quite quick as well to select and identify if something is going to work or not going to work out.

[00:27:24] Tom Hammond: Yeah. You know, I've worked at companies where I wanna say the, the average good enough people were allowed to be there and it was a very. Unpleasant experience for me compared to working [00:27:43] with the, yeah, I want to call the A players or like the stellar players where it's just like, wow, these people are all so good.

[00:27:51] It like makes me, that's right to be better. And when you have everyone around you that's just like amazing at their craft, it is such a fun environment to be working in. I found.

[00:28:03] Alvaro Duarte: I fully agree. I think it, it is just a blessing when you are working with those people. Right. And to take action on, on your teams.

[00:28:13] It's a difficult thing. I, I, I mean, taking action on toxic people or really low performance, I would say it's fairly easy because it's fairly easy to identify to document and to take action. Alright. The good enough people, like there was a great presentation around beware of the sevens. That is the people that are like six or seven out of 10.

[00:28:39] Those are the, the people that are very difficult to take an action [00:28:43] because they have sometimes the right culture. They are really nice to work with. But you know, deep inside that they are not those amazing people that make you get up in the morning with a big smile. And here we are. We are constantly making sure that we surround ourselves with a players.

[00:29:04] There was this book called Multipliers. That mentions that one low performer or one toxic person actually destroys the productivity of five people. So it means when in the studio you have two toxic people, low performers, basically you don't have a studio. And and for us it's very, very important to always monitor that aspect based on performance and KPIs.

[00:29:33] Yeah, that's

[00:29:34] Tom Hammond: great. Okay, so we've got these high performers, and so [00:29:43] if I'm a high performer and I'm thinking about voodoo, sounds like it might be an interesting place. And I guess you have the live teams, you have the core teams, so it kind of depends on like where you wanna be. I do know a lot of people that, you know, I've, I'm pretty sure they're.

[00:30:03] You know, a players, but forever, whatever reason, they don't really wanna relocate for family reasons or spouse. Yeah. Or different things like that. Voodoo has a lot of studios, right? That's right. You're kinda working with like, are you guys pretty much fully remote? Could you have a studio anywhere or are there like, I

[00:30:19] Alvaro Duarte: don't look into that.

[00:30:20] Yeah, if the, if the studio director wants to work remote or in an office, doesn't really matter and the country doesn't matter either. That is, if some people say for even recently there was. There was a, a, a studio director that we hired recently and say, okay, we have these awesome data scientists in Italy.

[00:30:39] Well, we don't have an office in Italy, but we just opened something in [00:30:43] order to be able to recruit that person to work remotely. No problem. I think it's our job to find the talent where the talent is. And our teams, for example human resource and finance, they are really great because. They are really here to make the business move forward and not as, I'm sorry.

[00:31:05] We don't have a, an office in Italy, so we cannot recruit that person. Can we just ask that person to relocate? No. Yeah. It's, it's the other way around, and it's really up to the studio director to choose how the, how they want to work in the team and. And it's all about performance. And if and if it's in different countries, so be it.

[00:31:28] It's fine. That's great. I'm not a particular advocate for remote or office. I think there are a lot of debates. I think it's about finding what works for a team. And usually studio directors when they join us, they usually [00:31:43] come with some people that they know in the past, for example. Mm-hmm. And it's up to them to decide what's best for, for the game.

[00:31:53] Tom Hammond: Okay. So even some of those, like I've, I've heard people speak religiously that like prototyping studios, you've gotta have everyone in like the same room. But even some of those might be, you know, fully remote after a fashion or partly remote.

[00:32:06] Alvaro Duarte: Our, most of our live studios, for example, are working remotely and, and and the core studios sometimes.

[00:32:14] It's one person for example, collect them all. Wow. Was prototyped by one person. Wow. Oh wow. So it's, it's really case by case. It's really about finding what's right for my. If you are asking me for my personal experience, I think when the people reach a certain level of expertise, experience, and maturity, remote works perfectly [00:32:43] well after four teams that never work together with a lot of junior people, then there is, I think, advantages to have an office location or, or even hybrid.

[00:32:56] But then again, the KPIs will speak for

[00:32:58] Tom Hammond: themselves. That's great. Okay, so a little bit earlier, second back here, you were talking about how a lot of your innovation is actually on the meta layers. So tell me a little bit about how you guys are approaching, like innovating meta and making that actually meaningful to people and meaningful in a way that it might reduce the c p I increase the retention, et cetera.

[00:33:21] Alright.

[00:33:23] Alvaro Duarte: The meta in itself won, won't reduce much. The c p like the battle of the c p i is really a battle that is fought at the proti prototyping stage. You can do some things to put the c p i under control play, for example, did it very well to introduce some mini games, for example. But it's some, [00:33:43] it's, it's not going to be a game changer.

[00:33:46] It's going to be more a maintenance aspect on the C P I. The meta will really help. Under retention and the monetization. And basically here it's about, again, it's a funnel of innovation. We take the best that is in the market and we replicate, we improve, and, but the idea is constantly to test, to test at a really high speed and and a high volume.

[00:34:17] Because the sense of speed needs to be there as well on live, right? If you test one or two features per quarter, then that's it. It's, it's not going to work. You need to really be constant, be able to test maybe 10 features per sprint at least. So the pace needs to be fast because no matter the experience, the reality is that we don't know much and we are [00:34:43] always discovering what works or what doesn't work.

[00:34:47] Tom Hammond: Yeah, that's great. Okay. I was also kind of curious, we're sort of entering a recession, I think at least like inflation is, is going, I don't know where you're at, but like here, you know, a lot of people in the US I knew before Covid we're pretty much living paycheck to paycheck now. Yeah. I go to like the grocery store.

[00:35:13] And it seems like nearly every item is like dollars more. Like, you know the bread that used to be like $1 Yeah. Is like $2. The eggs that used to be like a couple dollars are like $5. It's like everything is dollars more. And so back on my mind I'm kind of wondering like how are, like the people before that were struggling, how are they continuing to just like live and cover their bills and stuff like that?

[00:35:38] Also, it seems like a lot of [00:35:43] advertisers and folks have been starting to roll back because like maybe game advertising isn't working as well anymore. Or I'm, you know, cutting expenses and things like that. How has some of that stuff impacted your business model of like the I A P versus ads? Have you guys seen your CPM slipping or have you found ways to get around that?

[00:36:05] Alvaro Duarte: That's a, that's a good question and, and it is true that when we, it's always a privilege to, to work in games because mobile games from my experience actually are, they're quite resistant to world crisises, I mean, I've been in mobile gaming for more than 15 years now, and unfortunately it's not the first financial crisis that we, that I'm going through, and I always observe that.

[00:36:36] There is really a fair resilience from mobile gaming, maybe for obvious [00:36:43] reasons that it allows actually to remove yourself from the difficulties and some, and offers as distraction that is actually can be for free. Mm-hmm. The reality is that the games that we design, they don't, they are not paid to win.

[00:37:01] Right. So you can't really play those games. Without spending if you want, because there will be ads as well. For the second part of your question, actually, what eat us the most? And that's very, that's a paradox, but it's, it's not the world economy, it's the change of the a t t rules. For example, from Apple that was a earthquake and completely disrupt the genre of hyper causal.

[00:37:30] That was really the biggest blow and forced all the companies to, to pivot very fast. And to be honest, the companies that are starting to pivot today, [00:37:43] I think they are doing to fail. It's already too late because changing your company, pivoting your company when your poor business is going down, so you are, the money, as you mentioned, is decreasing, but you need time.

[00:38:01] You need the people, you need resources to actually try and test if, if the core business is heavily impacted. And how can you really attract people? How can you really test things? How can you take risks? How you, can you acquire companies? I think this, this will be doomsday for the companies that didn't anticipate this.

[00:38:23] So it, it means that video game companies, they are not invincible to systematic, systemic events. Like that.

[00:38:35] Tom Hammond: Yeah. Yeah, I've seen some, you know, companies that were making 60 to a hundred plus million a year. [00:38:43] Then, you know, I D F A and stuff came along and that's right. They, they just couldn't acquire users profitably anymore, and they went to losing like $500,000 a month and it just like falling apart.

[00:38:54] So. That's right. It's, it's brutal. Okay. I did wanna talk a little bit you know, I always struggled with hyper casual games. Like there were just too many ads. Like the only way that I could play them was I would download them and I'd put my phone on airplane mode before I like went in so no ads could load.

[00:39:17] Some people do that. Yes. Yeah. And like some games I can tolerate the ads and like they're, they're reasonable in there, but it seemed like a lot of the hyper casual games were just stuffed so full of ads that it would just like, Turn me out eventually maybe faster than eventually. I'm curious in this kind of new world of hybrid casual where we're [00:39:43] still trying to get, you know, relatively quick roaz and stuff, like how are you guys managing ads in the sense that like, I want to get revenue from them, but I also want to keep my users around for.

[00:39:57] You know, five to 10 plus years and spending money watching ads and things like that. So how, how are you guys kind of balancing that? Is it mostly rewarded videos versus interstitials or, yeah.

[00:40:08] Alvaro Duarte: That's a great question. And so in first I can reassure you I read casual games. They are not as packed as hyper causal games because the raw, robust targets don't need to be couple of days.

[00:40:24] Right. We can extend that and how we approach that by constant testing, right? We, we always trying to find a switch spot between the number of ads. To towards the best retention and keep the best players. And it, and I cannot say that there [00:40:43] is a firm rule. It's really case by case. And we always try to say, okay, what happens if we don't show an ad during 15 minutes?

[00:40:52] What happens there? Will it, would it be still profitable? How this what does it mean for for the next month? It is true that RVs are actually the way to go because RVs show already that as opposed to interstitial RVs already show that there is something in the meta that is worse investing in it's a good proxy to a deeper economy, for example.

[00:41:27] But then again, what we aim is to have, I would say, half enough of in apps at a certain time, and hopefully even more in-app or even subscription. But because games that [00:41:43] only rely on ads after a year, the CPMs, so the money you get from from the advertisers will just decrease because it's the same users.

[00:41:53] So it means that you won't be able also to have a game that only run on ads if you want to keep this game alive for for 10 years. It's a lot of iteration. And here that's the same process of casual games, is a lot of work with data scientists and the team to find the right economy and the right features.

[00:42:13] Something that is not done on hyper casual because hyper casual is more a fire and forget type of approach.

[00:42:21] Tom Hammond: Yeah, that makes sense. Do you guys leverage a lot of segmentation when it comes to things like, you know, Hey, this person's spending money, let's ratchet down their ads or this? That's

[00:42:32] Alvaro Duarte: a great question.

[00:42:34] This is a great question. I would say yes and no. For example, one of our big pillars [00:42:43] for casual games is, for example, the company that we acquire called Beach Bum. And. They are founded by xpl and they have a meta that really, really relies on identifying the best players, and they are really experts of what they do in terms of segmentation.

[00:43:03] Like I had the, the chance to go there to visit the crew in Tel Aviv, and we had a demo of all the infrastructure, all the processes in terms of segmentation. And I was telling myself say, wow, if we had that at King, it would've been a very, very different story. And what we. I'm trying to obviously do is capture this knowledge and to bring it to our hybrid casual games.

[00:43:32] We are actually, at the moment that I'm speaking, we have actually conducting a, a very interesting series of tests in our games with a basic layer of [00:43:43] segmentation. And, and it's a good experience for, for the players as well, because when you are a VI team, Suddenly. For example if you play a beach one game and you are v i p player, you get you have person almost like special, how can I say?

[00:44:01] Staff that calls you, contacts you and has a one-on-one relationship with you, and it becomes something else. So there is also, it's not about just. Making the users pay more is also how you build a different relationship with your most loyal

[00:44:19] Tom Hammond: customers as well. It's almost like those fancy, like the fancy, fancy hotels where like you need like literally Exactly.

[00:44:26] That's anything and they just like produce it for you like that, and you're like, yeah, I'll spend a little more money here. I'm like, but, but it feels cool, right?

[00:44:34] Alvaro Duarte: It feels cool. So why not in games? At some point you have really people that are able to spend a lot, so why? Why not provide them a special treatment?[00:44:43]

[00:44:43] Tom Hammond: I, I do think Placa is probably one of the best companies to like learn from there. I was, I was talking Yeah, very good. A guy who'd been there for like 10 years, like early days on, and he was talking about bingo Bash, I think. Yes. And he said, you know, we've basically over the last 10 years since that was acquired took it.

[00:45:05] From something like 150,000 a day in revenue to like 1.8 million a day in revenue. And he's like, here's the kicker though. You'd think we probably just scaled the audience. Same daily active user base, basically. Same m a U based. Now probably there's been some users that have turned out more of the right ones there, but he said the real key is that for each of these segments, We have a full-time person whose entire job is to just live and breathe, who is this person?

[00:45:34] What's going on? How am I gonna keep them happy and delighted and coming back and spending money and engaging. And it just kind of blew me away. I was like, [00:45:43] most game teams don't have nearly that many people focusing. That's right. Nearly that closely on those different groups of people.

[00:45:49] Alvaro Duarte: I, yeah, I It's a very good summary Playa.

[00:45:53] They, they're definitely are very, very good. At this. And and we are very lucky to have teams from that have that, that has that knowledge. It's, it's really something else. It's really something else. It's it's the beauty and it comes back to the beginning of, of our discussion, right, why you need to have two types of profiles.

[00:46:18] The people that build prototypes and the people that operate games is because mm-hmm. What you're discussing about. Requires a whole different level of expertise and mentality. Right. Now this is this is really something that we aim to be even better.

[00:46:36] Tom Hammond: Yeah. So, so tell me a little bit about like, the types of people that are working at Voodoo [00:46:43] now.

[00:46:43] Like, historically, when I think of like, My dream job in games, it would be like your blizzard and riot. Yeah. Maybe your super cell and your king. Like do you have those types of people there? Like do, do is, you know, in a couple years, is Voodoo gonna be one of these places you think?

[00:47:05] Alvaro Duarte: I honestly think that it's already is, but already is there.

[00:47:09] But for some type of people, for example, like I can tell you that the team, for example, working in mob control, they are, they, they are having the time of their lives and they come from companies such as King, from from from the biggest casual companies and they are leaving the times of their lives.

[00:47:27] Because of the full autonomy, because of the full accountability, because of the bonus that follows. Like they are in a situation that when they ship a very good AB test, they can already calculate, okay, those, that means this for my employees. So it's a very [00:47:43] different thing. It's, I honestly think that it's already a dream job because many companies ask you, okay, build a studio from scratch and build a game from scratch, and then you say, oh my God, this is really, really tough.

[00:47:58] Whereas here, the value proposition is different is build your studio. We give a your, you a, a very good gang. Make it bigger after there is all a romantic aspect of Blizzard and And I, I'm a huge Blizzard fan and a, and a big player of Blizzard games. I had the play, the pleasure to spend weeks there working with the crew in Blizzard office.

[00:48:25] And it's, it's, it's like a small town called Blizzard. Like it's thousands and thousands of employees. You go from one building to another building and it, and it talks to you because it hits. It hits something very emotional. But the reason, [00:48:43] but the difference here is the small teams also have a beauty that they can really has have a very strong leverage on what they do.

[00:48:52] Mm-hmm. Whereas that in AAA companies, it's

[00:48:56] Tom Hammond: literally something you're, you're small little cog and, yeah.

[00:49:00] Alvaro Duarte: It doesn't mean that you don't matter. I'm not trying to say that at all. It's just that a game that is done for three, four year, five years for thousands of people and sometimes gets killed sometimes it's not only, it's not only always fun as well, I would say that.

[00:49:19] The people that have these kind of parrots, almost very entrepreneur very confident. I honestly voodoo gives them something that is very unique. It's almost, it's, it's the closest experience that you have as building your own company with a safety net, I would say.

[00:49:40] Tom Hammond: I love it. Well, cool. I just realized we're [00:49:43] pretty much out of time here, but I always have one last question that I always like to ask.

[00:49:47] Oh. Cause we are, we are on the Master Retention podcast and that's okay. Avaro, what's one, you know, tip or trick or lesson that you've learned over the years to boost retention? Like how do you ultimately keep your players playing for longer? Hmm.

[00:50:05] Alvaro Duarte: I would say, Have a very disciplined roadmap with very clear targets on what you want to do based on real problems that you observe.

[00:50:17] It sounds very easy, but many times I've seen roadmaps that go a little bit everywhere, whereas that it's your job to find maximum two problems, ideally one problem that you want to solve, and you give it yourself a target that you became quantified. In terms of KPI and time, and you insist and you insist until you solve that [00:50:43] before you move to another problem discipline and to oriented all your funnel of features.

[00:50:50] That's what moves the needle as the opposed to, I'm going to do this because it sounds cool. It's there is, there is a beauty in the, in the art of building roadmaps. That's

[00:51:03] Tom Hammond: a not a easy thing to do. How do you pick one when you've got a thousand priorities? But yeah, that's right. If you can figure out what is the most important, and then you just keep focusing on that because it's a real, real problem that your players are facing.

[00:51:17] Hmm. I like that. Well that's great. Well, thank you so much. If was a pleasure, if folks do want to get in contact with you or someone at Voodoo, like what's the best way for them to do that LinkedIn

[00:51:31] Alvaro Duarte: Al I think I'm quite easy to find in LinkedIn and don't hesitate to ping me. I will reply or orientate to the best person at Voodoo to [00:51:43] contact

[00:51:43] Tom Hammond: you.

[00:51:44] Sounds great. Well, thank you so

[00:51:46] Alvaro Duarte: much. Thank you so much, Tom. It's really a pleasure. Yeah, but.