 you guys to introduce yourself in actually in a slightly different way I'm gonna ask you to introduce yourselves like in 15 seconds if you wanted this audience to remember one thing about yourself and your company you know what would that be and in your case Fredrick that's actually my question is like you're probably the least known billion-dollar company by market cap that's probably true yeah but I would say that in our games the star is the gamer so we say that we make the game but you create the stories right so you're supposed to create the stories we're not creating them for you right so the stars the gamer Holly Cabam we make mobile games and we just had a phenomenal exit this year to netmarble and Fox next for a price tag between one to two billion so it's a market out there okay well hi hi Wilhelm Rovio it's been a busy year it's been a busy year and it okay well we are known for being a very creative studio that that's probably our craziest games like surgeon simulator and I am Brad speak for that players the star big exit big outcomes busy busy year absolutely amazing here to be honest yeah the suit gamers do we have about 20 seconds that it takes yeah I think we can take the 20 seconds I I literally had an iron maiden but an Angry Birds t-shirt that I was gonna wear but I had to dash out from a from a lunch with with Sir Prince William and drive at about 120 miles an hour here and leave my car to a volunteer and then dash in and then I'm in that's that's more enough time for Superman to change but that's true yeah but that's fine you know perfect okay we'll buy the suit we'll be you're okay you're okay thank you I'll let you I appreciate that Holly I have a question about you so cabam yeah lots of industry consolidation happen it's it will got sold like two or three times is the same company got sold yeah what's happening tell us a bit about that and maybe if we can then transition to like consolidation in game industry that'd be amazing yeah sure I can I can say really quick we got into mobile early 2012 the top no the number 100 game was making 300 thousand dollars a month the number one game in 2012 was making four million dollars a month a mobile flash forward three years alone the number 100 game is making 1.2 million dollars a month but the number one game is making 80 million dollars a month so you could just see how much the market just shifted and that for us signaled like oh my gosh it it's not good enough to be like top 100 and it's not even good enough to be top 50 you had to get it into the top 10 in order to like subsist our studio was rather large and just to kind of make the profits so that's what's kind of in 2015 we just saw all of these things that were happening with the market changing and we started doubling down we started killing a lot of projects and just focusing on a couple of things that's just our studio we said we just couldn't do the marketing for each of those little games anymore so what what you guys think are the big exit drivers right now in in kind of like in the games industry yeah so I think some I actually think consolidation is one of the largest exit drivers you know because in order for you to collect all that revenue you kind of need to band together the IPO markets were really poor for during our time when we were running it so we saw a lot of kind of companies acquiring other companies as well and that it's just how the market just blew up that way and I think that is the number one driver okay I mean you guys of course know Frederick you know paradox you know billion dollar market cap Rovio you know close to be in dollar market cap as well so what's the I mean how do you see this game industry consolidation right how do you see the games industry consolidation yourself I mean yeah you can see very apparently and some companies are very aggressive out there you see some big Chinese companies for example who are really on on the hunt for a lot of different companies in our IPO 10 cent bought 5% that's one example and I know they invested in over 40 companies so I think American companies that they are buying to be to defend the position while the Chinese companies are buying to take over the world so it's a totally different approach yeah they're very interested in like getting revenue that's why they were looking at gaming companies okay you know consolidation naturally comes as a result I think especially in the mobile game spaces of an of a maturing industry that's that's that's that's just a phase that that comes naturally and we've we've stated openly and clearly that that this is also part of our our growth strategy moving forward and the IPO itself was a was a natural phase to to get to a further growth mode and as as our our main shareholder put it very well is is now we have a bit of a currency in the market that we can that we can we can operate with actually on that point so you guys have done an amazing turn around the movie was amazing you've done this IPO and all that then recently you've had a bit of a rough time so it's kind of addressing a bit elephant in the room here if you know what elephant what they left a slight drop in the share price how do you feel about that well in general I there's there's two components to this user acquisition very big data driven user acquisition is a bit of a new thing it's not it's not overly complex when you summarize it at the high level and explain it but it's very new and I think in here we have worked and we continue to work diligently to make sure that that component and how that works is really understood amongst the investor community the market and we're we're we're getting there we have a we we have a very accurate data model we have an incredible amount of data that we that we process to make sure that we we work diligently in in this space and we recently launched a new great game Angry Birds match just at the end of August practically in the beginning of September and we we're very happy with that and naturally we scale up a new game with with amazing KPIs the other bit that that that also affected last last week's happenings were movie revenues we we movie a movie pays itself back over time and and there are natural month over month fluctuations in in how that payback payback actually looks considering how how the payback model works and that was the other other factor that that that affected okay our last week's happenings understood so we have you know two major game companies here public companies quite a big one as well we kebam smaller very creative startup with both the studios and the question I have to ask is you know I mean I myself at a small studio that wasn't big enough to do an IPO by itself so I sold my business you know to a company called stillfront because I felt that we didn't have the size to succeed in this market the market is super competitive I think the numbers like 3,000 games on mobile these come out every week of those maybe two or three will make money and I'm probably being optimistic with that number how big do you have to be to succeed I mean your case a bit different you do a PC in games but still how big do you need to be to succeed in this market can the indies still do something well I think very few people can do a lot of things and I think first of all you have to define what succeed means if you're aiming for the numbers that kebam is putting up I mean it's going to be very hard to start from scratch right so if you aim to at least make money you just need to stay focused and be more niche and not try to go for the big market so if you see King succeed with the match three that they're doing very well you shouldn't go for that specific market just because the market is big so if your small team go for the niche and try to satisfy the niche as good as you can and that's what we've been doing as well so we've been growing the niche instead of trying to make games easier to play so I would say that probably the question for me is the other way around is that how small can you remain was to be relevant right because he's a known quantity that your company is only as good as the people who make up your company right and finding very good talent is very hard and the more people you put on a team the more complications come with it it's difficult to extract performance of that team and particularly creativity suffer with numbers as well because when you have a lot of voices and opinions the common denominator is the only thing that everybody can agree on and that seems to be the solution for all right we are around 70 people now but we don't have a single team which is more than 20 that is the number that work for us so we have this small super empowered and independent teams because we believe that that kind of size is the size that brings the disruption the new leap forward in anything that you are doing and you can extract the top performance of your top employees at that magic number if you wish so you guys think there's a trade-off between the size of the company how big you are and your ability to innovate well it depends if you look at Google is massive and they still innovate a lot yeah but they lose money and everything they innovate almost so yeah true but it's innovation about making money right like how are you defining innovation that's a good point in some ways right so sometimes you can't put a price tag on the measuring diabetes with contact lenses right so I think it all depends how you measure innovation I think in the creative space we all know that if you don't innovate you will die like literally and that's where for like us creatives always thinking about okay how in our next game or the update of to the game how do we make it so that because I think players are super smart they know when a reskin happens trust me we went down that path they're not dumb they know exactly how we played it this one before it's not exciting still work they still make plenty of money yeah so I will say from personal experience at Caban when we try to like re-skin our games it was always derivative revenue right always diminutive yeah it would just it's derivative right it just would kind of and diminutive over time okay so it was never as big as the main one and I think people know that now don't get me wrong people copy each other but there's always a bit of some type of innovation or I'd like to think like evolutionary because I always think people are more evolutionary rather than revolutionary so they always want to know where the home button is versus like how do I turn this on so I definitely think you know innovation could look very different and for some people they're like wow this is really innovative and they're like oh you put the home button there right so it all depends how you categorize it what do you think you think that your size is somehow like making it harder for you to innovate yeah I think so we've grown we've grown from seven people 13 years ago to 300 today and you see that the structure makes it harder for people to innovate and people have no idea where to go with their ideas right so you have this bunch of amazing creative people that that's why you hire people right so and they have no idea how to escalate a good idea and to whom and you have to really work with that okay so talking about innovation could each one of you tell me in 2018 what is going to be really hot was really the thing that like this is going to kill it and what's going to be really really really crap it just won't fly won't work in a games industry yeah I'd love to a little bit improvise on that topic the there's going to be more of the same which is always there's always more that there will be consolidation there will be many of the trends we see this year we we this 2017 was the latest year of AR and VR and 2019 is then going to be another year of AR and VR there might be some surprises on the air of AR front I think the the fact is Google and Apple do treat it as a tremendously important topic it's a priority for that yeah it clearly is and and the practical use of artificial intelligence within mobile game development in QA level design etc obviously a very hot topic and then one would I guess I mean it's not really a competitor it's it's more of a friend one has to mention Harry Potter Harry Potter of course one has to just mention just get out there yeah I agree you know it her Pokemon was a great brand for for location-based gaming and what perhaps the best brand for location-based gaming Harry Potter seems to be a very very strong choice so I think the brand is three times bigger it's a huge Pokemon it's a huge brand they get it right that's interesting I said it's one to watch so you've got to cheat a little bit so you've got the hot stuff is AI potentially Harry Potter AR and AR yeah I think those are those are overall industry trends and things that that we are we are studying very very carefully in in our end and on our on our side games as services is nothing new per se but the way you define services is changing every year games are games on mobile are are they have a stronger pulse than ever before and they are they are built to to really become digital hobbies yeah and they will get better next year because they get better every year and we will be surprised about some of the tricks that Caban pulls out of their sleeve and Rovio pulls out of their sleeve and and rest of the guys pull out of their sleeve next year so actually Holly what do you think is going to be hot next year and what do you think is going to be like a dot so I'm pretty bullish on eSports I think it's one of the fastest growing kind of kissing cousin to games and what's really cool about eSports is now it can involve a much wider audience you don't have to be a gamer to be an eSport fan or to even be part of that market and it's one of the fastest growing places that I see and then what's really interesting about it is also the idea I mean you still need to be in eSports you see sports going to mobile some yeah there's definitely there's a huge game in Tencent you might know what it is I can't remember the name of it something heroes yeah something something there's a maybe king of heroes something of some heroes of honor here's our thank you so and that that just blew up really big so I definitely think everybody who's thinking about doing a mobile game is certainly kind of thinking hey what's that next like how do you kind of make it open to somebody who doesn't play games because that audience is so much wider you want to react quickly to that one yeah I like the the this idea of mobile eSports I think it's it's fascinating to think of it let's turn it around a little bit and let's let's think of a let's think of of a market where there's over two billion soccer balls having been sold to consumers worldwide but nobody had figured out what to do with them at that point soccer you know and then somebody introduces a shock to the system somebody introduces soccer okay boom that's that's the mobile phone that's there's there's so many high-powered smartphones in the pockets and hands of consumers worldwide sitting and waiting for soccer but I'll say that one of the hardest things is that the average American adult guess how much apps they download a month 0.1 so they're not looking for anything new you already have your apps and I just think the discovery is so well that's why the app it's a mature market it is a mature it's very mature exactly Frederick what's up in 2018 what's crap well I think 2018 is gonna be the year where the gamers take the power back and we've seen that with a loot box debacle that EA faced with Star Wars Battlefront 2 and you've seen that in numerous different places you see that with a GDPR legislation that is happening in the EU so all of a sudden we can't just collect collect data we can't just treat people the way we want to do business we actually need to care about the gamers and we need full transparency we need to agree with the gamer on the business model not just shove it in their face and I think that's gonna be very apparent in the coming year when it comes to products I think AR is gonna location-based gaming if you call it that and deep is down in the fridge you will find virtual reality yes stone cold oh yeah well dead well it's not dead but it's struggling you know when you meet VR companies these days and you say you're a VR company they say yeah but we do other things as well yeah that's the first one and the second one I don't even remember but like no eyeballs the market hasn't been there so but I say like it's the best solution you've ever seen that is still looking for a problem yeah I can compound a little bit on that right the dream of VR we all share is you're immersed in a game etc right the reality is a subset of that is super high-end if you have an HTC whatever you have a super setup super expensive is heavy or tattered you're not free it was still a cable holding you right and then that's a subset of the vision of VR and this is why adoption by the mass market is slow and I think that AR might not be the year yet as well because of that AR as a vision is completely like is a pair of glasses which I wear and the world is overlaid with information and metadata and everything is better and what we have in reality right now is a subset of that which is a device that you have to hold and so I'm always very careful when when the first step of technology is so far away from the fully sci-fi vision of it I have no no question whatsoever that AR is the future right when AR is done well it's game over that's the interface we're gonna use but this iteration of AR be tentative be careful or that but all right right give VR five years it might hit but 2018 it's gonna be stone cold yeah it's gonna be like the market is not there waking up after a massive party with the biggest hangover ever and people talk about the idea of strapping a mobile phone to your face that that's even a step down from from the proper VR so that's even more difficult to accept is more ubiquitous but it's a footer away from the dream right so this is why I think there is a problem in terms of what should work in 2018 as you were saying AI not only in analytics and so on but also how we build games with the help of AI because we love ideas right we create an idea for a game but when you go to execute oh my god there's a grind so many people so much time so if we can deploy AI to accelerate that and free our resources more to be creative I think that's a trend that will start getting traction into 18 and what you do is another one is niches right if you find a niche and explore them issues global niches right I nobody does this better than paradox you'll find your audience and you're the best in classing that and you're a billion dollar company right there you go so of course you guys are the king of mainstreams no no problem with that but if you find yourself a niche and you explore that niche well I think you will succeed in 2018 and 2019 because of the problems around discoverability have not been sorted yet absolutely and I think you guys are the kings of creativity I'll take that to the man I have a question from the audience actually I think you guys you guys can use it think oh slider.com for questions so the question from anonymous is that's a brave person is Payne's acquisition still a viable growth strategy or after price has been driven up too much it is and I think on on a macro level in user acquisition one one would be wise to expect that prices tend to go up over time at the end of the day the cost for acquisition is a reflection of whatever the average high LTVs are for the for the companies that buy a lot of buy a lot of mobile impressions or relevant impressions in general plus whatever the average return on investment requirement is on on user acquisition that's just like it's a simple mathematical formula at a macro level to understand how it actually works together now that what does that mean for for for let's say an indie developer yeah well it means that that if you want to if you want to operate in this space and take advantage of user acquisition at a high scale that puts certain requirements on your game and that may that means that for your game you have to engineer your game to make sure that you can actually do that requires very very high engagement from the game very very long retention from the game and yes it requires also a business sense it requires monetization for a game and it also if you're thinking of over time competing the space of user acquisition which is a global auction place yeah there are only so many impressions every day for sale then it means that you will have to stay with your game for a long time and you will have to further develop it and you will have to run it as a service those are just those are just the factors of how free to play mobile gaming works a long-winded answer to say that yes yeah but feel viable but but there are fundaments in place that you have to keep in mind perfect guys we have two minutes left and I wanted to include really quickly give you each a chance to actually forget 2018 where we've buried VR among other things and jump forward to 2028 and you each have 20 seconds and tell me please what will be your gaming experience in 2028 my gaming experience will be AI orchestrated so we will have this game director on top of your game figuring out what you like to play who you're gonna play with what do you like to play like and you'll be creating on the fly that experience for you perfect incredibly immersive incredibly immersive like the expectation for entertainment will only increase and going forward 10 years is is like that's when VR might be a thing like I look at my my children it comes back every 10 years well that's actually true and I you know I go back to the vision of VR when I was a kid and oh my god but the kid the younger generation how excited are they and they are the people we have to look at when we think 10 years ahead perfect Holly I think I don't have to be intentional about gaming like it'll just push to me like ads or I just think it and it's gonna turn on and I just won't have to be any intentional it's all gonna be pushed all gonna be pushed to you Frederick 100% socials you play with your friends you play with people all over the world no matter what you play so today you choose whether it be social or not and you can do that in the future as well obviously because when you think it it happens so but much more social than today 100% social perfect one last thing on 10 seconds 10 seconds the definition of reality is going to be an interesting question over the next 10 years okay that's a good note to add on thank you very much guys I hope you guys enjoyed this I enjoyed it thank you