What Subscription Apps Can Learn: Monetization From Gaming — Mathias Gredal Nørvig, Subway Surfers

0:00Hello, I'm your host David Bernard and with me today, Revenue Cat CEO Jacobing. Our guest today is Matias Gradel Norvig, the CEO of Cybo, the game studio behind Subway Surfers, the most downloaded mobile game of all time with over 4.5 billion lifetime downloads. On the podcast, we talked with Matias about building the Subway Surfers marketing

0:24machine on salaries, not ad spend. leaving money on the table to protect player experience and why more apps should try rewarded ads, season passes, and other tactics from gaming. Hey, Matias, thanks so much for joining us on the podcast today. Hey guys, I'm happy to join. And Jacob, nice to have you as well. I'm I'm here. Let's talk subway surfers

0:48games. Yes, two CEOs on the podcast. These are always fun for me getting to be a fly on the wall. If it happens like usual, I'll sideline David and just ask you a bunch of tactical questions for my own for my own education, but I I'll try not to today. Awesome. So, I want to kick things off with the longevity of Subway Surfers. I think everybody, you know, in our audience will know what Subway Surfers is, so we don't need to talk about that specifically, but it is very unique in how long it's been popular. I mean, I think you just celebrated 4.5 billion downloads, which is just insane. And so

1:22I'd love to hear from you, you know, what you think has contributed to that. I mean, this this is what all subscription apps would love to have, you know, an all trails kind of thing where decades dualingo, you know, you want to be this like long lived, you know, keep subscribers for a long time, keep people active. Uh, so I think there's a lot to learn from the

1:40longevity of Subway Surfers. Yeah, I think we um we came at the right time. There was definitely both a timing aspect where Bod and Sylvester saw the the need for a next generation runner. So, Temple Run came out and and designed the genre, but Sylvester and Bodhi perfected it. So, we can see that not only our 4.5 billion downloads and of course half of those are reinstalls approximately. we could see that their formula of the threelane mechanics, the swipes, the curvy sort of left leaning horizon, uh, all those things have become the formula for all other runners. So, I think combined more than 15 billion

2:19downloads uh, on that formula. And I think, you know, in in recent years, you can't hardly get on Tik Tok without seeing Subway Surfers be uh, part of these viral Tik Toks. um ho how has that played into and what other strategies have you worked on over the years to to kind of keep it fresh and relevant? I think early on the guys came up with the world tour which was a way of every 3 weeks going to a new part of the world and inspiring people either to see their own hometown or a nearby town or a part of the world they hadn't traveled to. So I think that helped us

2:56keep fresh and then I think the intuitive gameplay means that new players coming in because you have to imagine that in 2012 this was a game from adults to adults but then everyone that have started playing since also play subway servers. So now we we know that also a lot of kids are playing the game but it was never designed for them and it was it's just a product of a really good and intuitive game that can also be played by everybody. it starts capping off at 4550 then people think it gets a bit too twitchy and a bit too sort of hard to uh to move the fingers

3:30um not judging but I think overall we've been able to to stay evergreen first and foremost I think we we are in that bracket of Angry Bird Subway Surface Candy Crush all from the Nordics funnily enough and then I think we um the founders very early on said it's about longevity we want to be a truly free-to-play app where you can play the core run as much as you want. We will never pinch you. We we will never guard you from content. Anything is achievable through playing. And then I think that as you say with Tik Tok, we've become a cultural phenomenon as well. So, we can

4:07see that when uh Jimmy Fallon mentions us on tonight's show as an example of how you make sludge content, when uh Justin Bieber tweets us or the last week tonight John Oliver mentions us, that those are things that other companies would would pay for and we're having the luxury of being mentioned because they think that this is how you do Tik Tok or

4:28this is how you work on verity, right? How have y'all leaned into that aspect of things? I believe I've read that you've made it very clear that folks can use your IP in video and you're not going to come after them and things like that, but are there any other ways you've leaned into that virality? So, we've always had a strategy of producing content that could be used for UGC. So, every user generated asset is

4:51also amplified if we think it's cool. So, not only do we allow them to do it, we also share it afterwards if they do something cool. The team is also very autonomous. So we've had a very proactive team for many years that have managed to make several viral waves where we could see that the audience really is picking up. But I think in my 12 years running this studio, I came the year after launch, I have said no to the marketing team twice and they produce what five five 10 assets a day. So uh there has been very few instances where I said maybe this is

5:26this is too much. There's often very little downside to it, right? like you just if something's bad, it often just doesn't go anywhere and nobody sees it anyway, right? So, yeah, that's that's also why I I like what they're doing. A cool example was we had Ramy, the Hall of Famer, uh who also happens to be the keyboard player of Foo Fighters, produced the soundtrack for one of our cities. And um I had agreed with him that look, we used this picture and we know how cool you are as a musician. We're super honored that you wanted to jam with our in-house audio designer. But then the team said, "Oh,

5:58we also want to make this video." And sends a a video that I didn't know how would land with Ramy. So sending a text to someone saying, "Look, I know my team is super creative, but I don't want to step on anyone's toes and I admire all the creative work you've done, and I don't want to come off as overly sassy by sending something that just pisses

6:16anyone off." Thankfully, he loved it. But sending a video where you're not really sure was meeting the two worlds of our professional partners and the in-house creativity. That was one of the more fun texts I've had to send in the last month. You said in-house answers my question, but is is all of your like ad creative and sort of marketing creative done

6:35inhouse. Yes, it's basically um a content flywheel like a furnace just spitting out things. They brainstorm. They remember to keep a balance of in-game relevant material, which means that we don't want just to create virality and then people don't know where it comes from. Some of the viral videos we did in the past basically was just the team having fun, which generated 100 million views on a video, but people didn't know that this had anything to do with Subway Surfers. It still helps us with the algorithms because of course they can see which account it comes from and they know that that account is tying to this

7:10thing. So when I speak to Apple and Google, they also acknowledge that part of the algorithm is of course also seeing what works on other platforms. So if our content works on Tik Tok, we're also featured more on on our app stores. But the gameplay relevant material is still very important so people see the game and know don't just associate us with being funny viral. The other content is basically just riffing off of everything that's coming. So whenever a TV series goes global, we also did the honey cake from uh Squid Games as a subway surface logo, we do The Last of Us, then we do a take with our

7:45characters and we constantly try and when I say we, I mean the team to just ride the waves of virality because we are one of them. We also have a swing at the Dualingo every now and then. They have a swing house. I was going to mention it's very similar to Dualingo's kind of strategy, right? Of course it's in house. I kind of think I knew the answer to that because you just can't outsourced creative agencies can't take risks with the brand like you know it's just it's there's no incentive for them to do it right and and it's just very difficult if they don't have

8:14buy in from whoever the this key brand stakeholder is. We had a new person joining the team. We just bought the mascot costume for for God that chases you in the game and she did a dance with that costume and I don't know if it was her very first video but basically one of the first videos she produced had 75 million

8:30views. Jeez. And that's a really tough that's a really tough start to beat because of course everyone was like, "Oh, make one more." Yeah. Then fair fair to say she could say make another game. It's super hard to make success. Yeah. Much much like games content for games is a hits driven business, right? Like it's hard to it's hard to get

8:48lightning in a bottle twice, you know? Exactly. What does that look like on the paid side and how has that evolved over the years? Like are are you putting money behind these UGC things? Are you paying for brand? Are you doing like playable ads and things like that? Like what's the the paid strategy behind the kind of

9:05brand and content flywheel? The the short answer is that we spend nothing. We spend salaries. So it's all organic, but it's also fair to say that we use very small budgets to boost things when we see that they go viral. So we do amplify it, but we're talking tens of thousands of dollars. We're not talking hundreds of thousands or millions of dollars. We're we're doing it very strategically. When we see that some content picks up, then we might put a few hundred dollars behind it just to create like other opportunities for it to go viral, right? Like Exactly. So So it transcends different platforms because of course if you see

9:40it on one platform, then we see that this content could perhaps ignite on other places. So bring it over to Instagram and then spend on some ads to get it to go viral on that platform as well. That makes sense. So but in general, the flywheel runs by itself. It's simply just them producing things and also Justin Bieber makes a new album. They make a post where the guard says that the Justin Bieber got me a choke hold for his new album and then he posts that and the the first thing some media does is Justin Bieber hints new collab coming and of course we just

10:13sit tight and don't comment because it's not our business to correct it. Who knows? We want we would love to work with Justin. you should just reach out if you're listening to the podcast, but it could be in the works. It's just a very early stages, you know. Exactly. I mean, we we're up we're up to play, but but it's just to say that those things also live in a world that is somehow out of our control where just the fact that we are viral gives us the ability to serve more content, but we also really have to protect the brand so we don't end up just becoming fat sounds

10:45and whatever is trending that month. So we we didn't go all in on Skippy toilet even though quite a few brands did. Right. Is there one person there that is the is the arbiter of when fart sounds is too much. Is it sort of like in the culture like who's who's guarding against that

11:01like you know jumping the shark? We have a couple. So I'm I'm probably the ultimate pun intended. I'm the ultimate boss to beat if you want to get through with fat sounds. Um but but in general we Christian running the team is doing a great job. But I also know that he's passed with both his his peers and Celia the our head of PX play experience as well as

11:24Adam who is currently our head of brand. They're both doing a phenomenal job of of saying this is on brand this is too much. Yeah, it's it's tricky to get in a world where people are allowed to take risks, but then you don't but you also need some some safeguards, but you don't want u you don't want the extreme of that which is everything has to be by consensus, right? Because then you just get really and that's also why I think even if you ask them Celia and Adam, I think they would say we often we don't often say no either. So it's not a vibe of of

11:52approvals. It's much more let's brainstorm. And then we see, for example, Hypen from a K-pop band post a video where he does the facial expressions to the sounds in the game. We've seen several content creators do that. And again, people think, well, how much did you pay? And it's simply just that they think that this is a cool

12:10content piece to make. Mhm. It these brands really become self- sustaining at some point. Like, think about Nintendo or Mario or something like that. Like, they don't have to pay somebody to do like viral things with with the the Mario IP, right? It really does become and that sort of self-sustaining. And I guess like something you mentioned earlier, you're not pinching people so hard. You almost have to have this very efficient like content creation engine like if you want to not have to pinch people, right, to make the game like playable and and a

12:41great freeto-play experience. It's also because I think the founders originally didn't want to monetize at all. M they just wanted a game that kept staying free and playable and therefore that would generate money. Of course we we have further ambitions now and the industry has also matured. So that would not be enough in the current climate but we are definitely uh winning or gaining from just being an evergreen and seeing

13:08that we in the top downloads every year. We are in top five. We have been since launch. Every year there are a couple of not every year we have also been number one but in most years there are a couple of positions that are taken by companies paying. So that's currently Roblox and Garina Freef Fire. They are above us and

13:26they're paying for their traffic. They're making a lot of money. All good. Then you see the occasional the yearly trend. So you had the Among Us, you had the piano tiles 2. Then you had another game that people remember very well from that year, but they're out the next year of top 10 and we're still third or fourth. And that means that every year we're also gaining because either the spenders will stop spending or the one year peaks will go out, but we are the evergreen that

13:55that keeps giving. It's much better to be in position three not spending to be than to be in position one or two and having to spend a lot to be there, right? Like in terms of like an a business, right, in which your margins are and everything. It's a much more enviable picture. Plus, plus then we see that, for example, in the Mario movie, not a lot of people realize that they actually

14:10also made a reference to us. So, in the early scene where they flood the sewers, the newscaster starts explaining that this also affects the subway surfing. And again, that's just a little love from some writer that that had fun saying that this is a game. Let's let's give love to the industry. And and we we like to do the same the other way around. I love that you said, you know, we don't spend much except for on salaries because a lot of people, I think, do confuse the kind of UGC and organic, you know, go viral kind of stuff. You're still spending on marketing. You're just not spending on

14:46paid the way we typically think of it, but I would imagine you have a pretty big team. So, you are spending quite a bit on salaries and and have a big team running this. How do how do you think about balancing that and and how big you grow the marketing team and that sort of

15:00thing? So marketing for us is several things. There's both platform relations and and growth and content and player support and so forth. The core part producing content is less than 10 people. Wow. And so they are super nimble and very efficient at producing. And therefore I still think that we have fair salaries. But it's just to say that it's not because we're then spending a full paid marketing budget on 10 individuals they are themselves growing with both the creation ordinary process as well as the virality training. We had a a really great talent with us for several years and when he left I remember thinking that how much is in him as a creator

15:43versus the strength of the brand or the virality and the team definitely had to sort of readjust. Okay, these are these were some of the ideas that he would bring. what new ideas were are we bringing? We managed the transition and of course that's a nice feeling for me as a CEO that we can that we can build on it regardless, but it's definitely also talent driven. So both the people that have helped us along the way and those that are helping us now are worth their

16:11own weight and gold. That's an incredible achievement with 10 folks on the I don't think you can have much bigger than that. You know, like on Madmen, Don Draper didn't have 50 people in the room helping him co-write. You know what I mean? like you for creative processes like that, it really goes sour the bigger the the group. So, well, I wanted to transition and and dig into the monetization side of things and apps I I feel like still have so much to learn from from gaming. You know, we we do have examples like Tinder with the consumables and multiple subscription tiers and things like that, but I still

16:45feel like apps are behind on the monetization curve from what mobile gaming has done this past decade. I' I'd love to dig into how you think about monetization and then and then especially I mean you know as you layer on different levels of monetization I know you have ads and then you know in-game currency and multiple in-game currencies and other AP offers and there's a lot of complexity that have been layered in there. So I'd love to start just at a high level like when you started monetizing like what was the thought behind it and and how did that evolve over time and then we can dig

17:20into the specifics of the economics. Very early on as I say the founders of Cybo Sylvester and Bodhi believed in having a very simple just pure game experience and that if people kept playing that they would watch some ads and by watching ads it would pay the bills. The discussions we had with the publisher for the first eight years, Kilu Games in Ous were much more on the side of them saying, "Well, we could also put in these these things, but they also generally like the approach of a truly free game that could monetize through ads because we've been live since 2012. It also means that we cannot

17:59be as sophisticated as you see some of the other games because that would alienate a lot of the elder players that basically just like the way the game works today. So we just this morning launched the biggest mobile collab I think ever with the Brawl Stars where Brawl Stars visit visits subway surface and subway surface visits Brawl Stars and that's one way where we can say look you still have the core run to yourself. It it follows the environment of a Brawl Stars universe but in in a month's time we will visit a new city. But the game mode that we do with Brawl Stars is a way of also seeing

18:34how are the players actually engaging with us both playing with other IPs as well as trying out game modes that are so clearly an event for a duration of time to see if if that scares away people. Do they stop playing the core run? How are they engaging with a PVP mechanic? And does that allow us to monetize those players in a different way than they are in the game? Because subway service obviously is constructed in a way where if you play for an hour without dying and you shut down the app when you die, then you don't then you haven't paid anything for your entertainment. And I think in the future

19:12at some point we have to figure out what do we do with that because that's unfair to the players that die a lot that would then see more ads because that they are they would probably feel that the experience is worth where those that play five hours perfectly would actually not contribute to paying the salaries of those who who make the product. So, it's a constant sort of balancing act of saying, how do we entertain as many players as possible with something as available as possible, but also allow those who want to spend time or want to spend money to progress or get more content to do so without the expense of

19:48ruining the fund for the majority. I I read an interview you did that somewhere between 80 and 85% of revenue still to this day comes from advertising. Is that correct? Yes. Wow. So, it's a mix of interstitials and rewarded videos. How do you think about those rewarded video? This is something I've wanted to experiment with and I feel like I've seen some subscription apps experimenting with this, but it it's such an interesting mechanic to allow somebody to pay with their attention versus paying with money. And it's

20:20something that is very common in games. Again, I can't think off the top of my head any subscription apps that are doing this, but how do you think about that mechanic? And how do you think about that mechanic not, you know, breaking the game or alienating users like you said, you kind of already alluded to it that if you could play for an hour and never see an ad that, you know, maybe that's too much or 10 minutes or 5 minutes is too little. How do you think about not completely breaking the experience with those rewarded ads and you know what maybe subscription apps can learn from that? I

20:50think the conversations we have around monetization regards the fairness sort of when is it fair to to require payment and whether payment is then through a reward video or a subscription or a premium feature or an inapp purchase. There is no right answer. Especially when you have a player base like us of between 150 million people every month. We know that we're not talking to a player persona. We're talking to all types of players at all times in all markets. And that means that for me, what the ads allow us to do is to also be available and support markets that would not traditionally have subscription apps or use inapp

21:32purchases. So tier 2, tier three, where most other big brands would not advertise and therefore not have a lot of downloads, we are still the most downloaded game in those territories. But specifically for the US and for tier one for Europe and for the sort of higher earning countries of course we would like to be have a share of wallet and to know that if you're paying in all your other games and you think well it's nice over here that it's free we would love to share with you the characters or the unlocks that would sort of convert you and share take part of the the

22:06salary payments here and the sort of the business of cyber. So from that point of view, it is definitely an ongoing conversation. Where do we have the the real estate on screen to show a banner or launch a reward video? And where do we actually allow if you've spent money in the game to remove some of the interstitials and whether that should be permanently or whether that should only be for a period of time to say, well, if you paid then you won't have any distractions that you haven't chosen yourself. And those those types of

22:37balancing acts are are ever ongoing. You you use the word fair, which is I think what um a lot of developers do implicitly when they're thinking of pricing. They're trying to be like, okay, what is a fair price? In this case, you're not talking about dollars for software. You're talking about like attention in exchange for software as well as like blending that into dollars, right? Um which is really challenging, right? I think this is and one of the reasons that you know app developers have avoided this. I think one is the market has not been sort of primed for it versus gaming. It's been like this since as long as mobile gaming

23:09is a thing. It's just it's complicated, right? It's complicated to blend, you know, you have an ad network and there's a third party driving that and then you're figuring out how it fits into your experience and then and then of course you have your own monetization. Something you mentioned it kind of highlights how challenging this is is like you know only showing ads to somebody when they die. Probably your best and most engaged and maybe the most likely to pay people are the ones who don't die, right? So you've you've actually like completely blocked off monetization from them, right? So yeah, you have to figure out what what you

23:38know how can and what what can we sell them? And then you know to some degree another thing they bring to you which not necessarily their attention but it's their word of mouth, right? And so if you're extracting from them, are they going to be as likely to share you on TikTok and get you your next, you know,

23:5210 users, right? And we still have 13 years in, we still have a million daily new installs. And as I say, half of those are reinstalls. But that means that it's also worth for us to keep the the content furnace and the virality going and not jeopardize it by trying to extract too much value. Mhm. I think that's that's part of the the discussion we have is that okay with these feature we can try these these new mechanics with the core run we want to keep it clean but then of course we see more and more game companies saying well now you need a a short break from the

24:26game we'll show you an ad and that helps pay for the business that's that serves this game to you I actually think that's fair as well I have a a 9-year-old son myself when he watches an ad I'm also explaining him that this is the way that we pay for that game Entertainment is business. No one no one goes to the cinema and doesn't expect to pay. So uh so the fact that ads came in and I know that that annoys some people the the premium segment that just would like a core experience from the storydriven sort of a toz that's fine fine by me. I

24:58like the fact that in in mobile gaming you can actually play a lot of games without spending and you use a part of your time to watch games. And then the playable ads are now so fun that people actually also sometimes got just get stuck in playing a a quick level of some other game trying to advertise ours

25:14right. I I got stuck in that loop yesterday. I I was playing Subway Surfers, you know, knowing we were going to talk today and uh one of the playable ads was so fun. I spent probably five minutes playing the playable ad and then uh then came back to the game. But I I'm glad you brought up your your nine-year-old son. How do you think about protecting your brand in the ads that you serve? You know, I I had a a premium weather app. And I ended up removing ads because I was having so much trouble filtering. I would get comments, you know, bad reviews on the

25:46app store, emails to support saying, you know, why are you showing ads for guns? And I'm like, what the heck? And I'm going into Google, you know, AdWords and like trying to turn off like all the like make it as, you know, age appropriate as possible. And then I'd get another one like, why are you doing gambling ads? because it would have like the slot machine ads and I go and try and figure out how to turn that off. So, h how do you approach keeping those ads kind of brand safe and and kid safe and so many kids are playing the game? So, we're doing two things. And now it gets

26:15a little technical, but obviously when you install the game, you show your age and if you are younger than the legal age in your country, then you get placed in what we call the copper segment. Depending on the country, it's 16 or 13. And if you're in the copper group, then you are only served copper ads. And it's only certain ad networks that that have copper groups. So they they are not showing anything that would not be copper compliance. But even in the adult uh version, if you say that you're older than that age, and I'm I'm saying you can still not you should not be able to

26:51see ads for gambling, for guns, for uh pornography, for anything that is Rrated. And that's because we don't believe that that's the way we should be making business. When I say should not, it's because of course the ad networks sometimes make mistakes. And when you're a shower of a billion impressions a month as we are, then of course I'm sure the viewers of your podcast could could come with an example of well once I saw this ad and uh and we would we would actually actively go into the ad network and say this is a mistake remove this because we we have heard from a player

27:26that this ad was shown. That's not how we want to make our money. So we are also very um proactive in the in the sense that we we've blacklisted a lot of categories that should not be shown. We've uh done all the copper compliance and uh and GDPR compliance and then we also make sure that if anyone says I was shown this that we also flag that to the

27:46ad networks. Yeah, I was going to say you must have a team that's just dedicated to well one responding when a a customer writes but then like figuring out what ad work ad networks you are and aren't working with and like you know what's your obviously you know expectations for yield and stuff like that but that must be a substantial amount of of effort. It's a very efficient system and we have very few complaints. So, uh, so we're actually not we're not a lot of people

28:10doing it, but they do it really well. And then I think because we also have SDKs in the game that allows us to show what ads were were they shown. Pipeline that shows us that these were the ads that people engaged the most with and these are the ones that they didn't. Are you saying this like outside of the ad network's own analytics? You you all are tracking to like what ads are

28:28performing the best. Basically, which ad is is prompted. Okay. Yeah. Yeah, cuz they can be very kind of blackboxy, right? Sometimes what like how the auction resolves and all this stuff. Yeah, that was my problem. And then how do you think about I mean you're a team of one, David. It's it's challenging. So it was so challenging. I just I just gave up and pulled it out. Um but the other the other thing I found really fascinating, you know, as a weather app developer, I download a ton of other weather apps and check them out. One of the fascinating things there is you will see ads for other weather apps in most

29:01weather apps. So, how do you think about and prevent cannibalization? You know, like me yesterday, I spent a minute or two playing this other game that was prompting me to go to the app store and download that game instead of Subway Surfers. And so how do you think about that aspect of cannibalization that that you may lose a player to this other game that was advertised inside subway

29:24servers? I mean that's the business of freeto play. So so we know that the cross promotion or the the potential cannibalization of an ad prompting you to leave is a risk. We treasure the work that the ad networks are doing to make money for us. But of course, sometimes they do it so well that we also see our retention drop a bit because uh David chooses to go into another game that he finds more funny. Our confidence in our product and also the also the longevity that we're proven means that we are also confident that you will come back that you in your next PlayStation sit down

29:57and and don't join join the game you download necessarily but you remember why you play Subway Surfers and why it's one of the games that you remind yourself of when you're in the subway in the flying somewhere or in a bus with no connectivity then then you're like that's the game that you open but it is definitely a thing that we have had two instances of very direct sort competitive titles. Just when Subway Surfers came out, Singer did a game called Running with Friends, which was a complete copy. It was a bull chasing you in Pmplona instead of uh the guard. And we were actually quite not afraid but

30:33aware and concerned that what what does this mean to Subway Surfers if one of the big games come in and just sweeps the market? But it wasn't as fun. So it went away quite quickly because people could tell that Subway Surfers and Sylvester Bod had cracked something about the tactility of the game and some of the intuitive nature of it that cannot just be copied page by page but needs specific sort of metrics that we that we keep as our secret source. And then uh we have King came with um Crash Bandicoot which we knew that they wanted

31:04to make a runner that would monetize. They had put one of the best teams on it. The IP is known. the game looked amazing and uh they did a very hard monetization and we thought this is interesting because of course we would also like to do a runner that monetizes and if they came in and took just half of our downloads but made $2 per player then then that should have been us,

31:24right? Mhm. Um it's a good experiment for you to watch, right? It was. Yeah. And and I mean we we actually had the talk should we tell the the ad networks that please don't show ads for Crash Bandicoot because that's probably the only game where we don't want people to then get excited and leave the game and then find something that was then better designed for monetization. Uh in the end we uh we actually didn't do anything and it turned out that again Subway Surfers is

31:50just the gold standard of runner. Crash Bandicoot is his IP. I kind of think Subway Surfers might be a little more relevant in 2025 but that's true. That's you, that's not me. But but just to say that that we're super happy that that we are still the the go-to runner. We we consider ourselves the king of runners and of course we we hope with future launches that we have other types of uh runners

32:12than just subway one. Can I ask you, you talked about this uh you just launched today this this promo with uh uh Supercell and and Brawl Stars. Yeah. I mean that's a classic example of you're you can't play both games at the same time, right? So I'm assuming we won't get into too much specifics, but like how long does a deal like of that take and like how do you think about approaching those and working with other companies and stuff

32:34like that? The initial uh exploration for deals like that usually start a year before at least a year before. Um it starts with high level concepting and sort of these brands would be cool. We also did it with Crossy Road. We've just done it with eightball pool which is of course part of the mini clip family. uh and we have other ideas for the rest of year or next year. The concepting is sometimes challenging to explain because what is concepting? Well, that's a guy throwing ideas up on a whiteboard that eventually sparks the interest of a partner that says we want to do that with you. How do

33:10we make it happen? Then you put engineers and legal and everyone. Do you just start sending them ideas or do you like get to one of your creative people, one of their creative people in a room? Like what's the process? I carry a lot of the outward bey uh so the business development side um I attend conferences I speak from stage the mobile space is a relatively small industry so we also know each other and you're all in the same like five countries so it's helpful that helps too it's a short flight to Finland but uh it's also from the friendly atmosphere we don't consider each other competitors because we want

33:45people to enjoy games and if they're playing my game they will also play yours and they will come back to mine if mine is still fun. Yeah, it's much less of a uh a finite set of customers like B2B can be, right? Like there's there's only so many companies in the world. Even I think the weather app is actually a good example because you might only be using one weather app and then if you really have a wedding or around birthday then you might check two apps but you have a a habit of only opening one once a day to check which clothes you should wear. where games is much more of a

34:14fluid activity during the day. And if you are going on the bus or the metro, subway service is likely one of the games that are open because you lose connectivity sometimes. But if you sit at home and you bring out the the console, then we also know that we're not people's primary game. We are the game that they play in between the other sessions because they spend money and time in GTA or Call of Duty or Sims and then they play subway servers before falling asleep or because uh they have bit time in between sessions, right? So I think from that point of view we can

34:47also allow things to be a bit more freely and therefore back to your question a year before when we start pitching high level ideas it's not very concrete and then as the teams start working together of course it becomes more and more concrete how willing are we on each side to do something in our own game or is it more of an activation for the other title and with crossroad it was a very sincere collaboration it also has been with eightball pool in and uh in Supercell because the teams on both sides are excited to work with the other IP and we see a huge overlap in

35:22players that knows both titles and are excited to see what does that look like in the game I play. I also know the other game and I also want to try that out. So we think there is a lot of also reactivation of players that would come back just for the fun of it and see what

35:35does that look like in the other game. Are the deals like fairly standard? Is a lot of time spent on like the business economics of it or is there a pretty, you know, standard understanding of what's industry norm? Actually, these these deals have been pretty bad. So, we're we're exchanging traffic. We're uh we're saying, look, if if we send players your way and you send players our way, then what you monetize and what we monetize is different, but it boosts both of our numbers. So, we actually haven't made commitments to each other other than delivery of of quality, kind of what you're going to do and and

36:07whatnot. I guess it makes sense. you kind of mentioned that both brands have to work with each other. You almost have to be somewhat co-equal, right? In sense for it to be interesting for both parties. I've always found that with partnerships generally is that if the parties aren't of somewhat equal size, somebody gets crushed or somebody's uninterested or it it's just very difficult. No, not for any reason,

36:26right? It just kind of happens that way. We have a lot more downloads than Crossy Road, but Crossy Road did an amazing effort in their game to integrate Subway Surfers. So, I know that they got a bigger bump in their downloads than we did in ours, but it didn't feel unfair. And I think it actually also helped with the virality of both games in the long term that you just see games that love each other and teams that love each

36:50other. Yeah. Like just to get their IP and your IP is is positive, right? And with Brawl Star specifically, I know that they make a higher LTV than we do, but that's also their dayto-day. So, it's not as if we're coming in and and tripling their LTV, but they will probably make more money per player than we do also after this game. We we just like that we can create something cool together that is authentic and native to

37:14the brand. That's something I hope we see more of in the subscription app space. Straa just bought RUA and you know, when that initially happened, when I saw the news, I was like, "Oh, that makes a lot of sense. they're just going to like integrate the running features and what makes Runna runa into Strava. But no, it doesn't seem like that's the strategy at all. They bought Runna and now are pushing people back and forth between the two apps and RUA is like a great brand in of itself and they're working together like that. In that case, it was an acquisition. But I I I hope to see

37:45more of this amongst those kinds of apps where there's with that one, maybe there was a little bit too much, you know, conflict uh for them to not buy and just, you know, do a partnership or it might actually be easier depend, you know, sometimes BD can be just difficult, right? Maybe it's just easier

38:01to buy the company. It's a meeting of minds when we have these meetings. Also, the partnerships we haven't announced. It's just exciting to see the creative teams getting hitting it off together and then seeing that what comes out excites people. We've gotten a ton of love of people saying, "Wow, we can't imagine you got Brawl Stars." And we're getting the same feedback from the from our Finnish counterparts at Supercell saying people saying, "We can't believe you got Subway Service." So, so it's also just a synergistic sort of one one plus one

38:28equals three, right? Yeah. I mean, they the music industry figured this out a while ago, right? Is that like just collabs help, right? If you can get more names on a track, it just almost only upside, right, to bring in other people's fans and trade the music back and forth. And it is a similar economy. It's like an attention. There's there's much more elastic demand, I feel like, in attention than in a lot of different categories. And which is maybe why we haven't seen it in apps so much because like for utility, you're filling a niche and like there maybe is only to your point about weather apps, there maybe

38:57only like room for one or two apps in somebody's life. But as apps become we're in this phase right now where apps are just proliferating at an incredible rate into more and more niches that might become less true right as the niches become more narrow then suddenly like you can collaborate between adjacent niches I think the hard part will be gaming is like a decade ahead of apps it's kind of it's kind of wild right just yeah like considering we kind of both started at the same time I guess like gaming maybe you could count the Nokia days right as like a head start but it always feels like we're apps are

39:27just a little bit behind and we're still figuring stuff out So maybe it's a good thing to just look and see what y'all are doing and expect that we'll be there in a decade. Gaming is uh has been at the forefront of monetization since and I joined the industry in 13. It's an amazing industry to follow and of course sometimes people also take it too far. Right now with apps in general I think I see the trend of of course subscription is the mo best way to monetize. It also sometimes feels annoying that in order to scan this document then you have to keep subscribing to some utility app and then

40:03eventually of course Apple and Google allows another app that is free to do it. So the notes app allows you to scan and lot of people know that. So they still uh subscribe to some scanner app because they had one one document they had to send to the to the state right. So I think there is a definitely also a a longevity factor for apps especially utility apps or apps that serves a specific thing where I would as a payer prefer to the premium model or a yearly model that is more fair than right now where you feel like everything is $100 for a year of using something that is

40:42like yeah but then it means I cancel if it was priced more friendly to the consumer then people would actually perhaps not cancel it. That's the balancing act that games because it's been so massive for so many years and we have so many people are players. It's also found its equilibria in the different aspects of this is what players are willing to spend where I think apps for me in some aspects I end up spending too much because I have one day's need of something and there therefore I don't become a user of other than the straas of the world because you're a runner or because

41:16you do these things. That's actually where I wanted to take things next is and again speaking of like being so far ahead of the app industry, the idea of a season pass in apps a and all the inapp purchases and the rewarded ads like all of this hybrid monetization. I I think we will see the industry start to adopt over time where hey you just need one scan okay five bucks like just make it happen and like you know you're done. or uh slopes is we had the founder of that on the podcast and he now does a season pass. It's like hey if you want

41:49a season pass, day pass, they do a bunch of like buy as little as or as much as you want, right? But then they also have the to your point they have this subscription for people who are avid skiers and who are going to go out six times a year or whatever and and so they kind of, you know, they're a good example of kind of making this work however the user wants

42:07to pay and how frequently they want. That's the advantage games have though. I mean like you all you start with a a store, right? Like you don't start with a single IP. You have a whole store and like so adding like a little thing here and slice there. It's just that there's there's just from out of the gate games always start with like a higher level of sophistication on monetization which makes this stuff easier and apps and this is something like in our mission at renan we're exploring now is like is this is the reason this isn't in apps related to that inherent complexity and can we bring these tools to app

42:38developers sooner so they I don't know what's going to work but like you know if we can remove the technical barrier at least like that way to let people experience as you were mentioning like finding that equilibrium because like I think apps in general eneral to your point like have kind of left the the premium user out in a lot of cases right either have some like very heavily admonetized thing which often don't work very well right there's very few because I think they also just don't generate as much revenue as like a a good high paid subscription app for the subscription apps like it just doesn't generate as

43:12much right it's harder to work ads in and they haven't developed these like sophisticated models so like I don't know maybe there's maybe there's the underlying difference in like demand elasticity and amount of need for utility versus like need for entertainment. Maybe they'll always be different, but I I I would almost equally bet that that we might see these

43:30things like converge. Yeah. And my specific question around that too is like how do you think about the season pass and you know have you explored the idea of subscriptions as some apps are starting some games are starting to do but yeah how do you think about balancing all of that? What I really like about, and this is actually probably Supercell introducing the season pass, at least the way we saw it in in Clash Royale, what felt really fair about it, and why I've spent a lot of money on season passes in games, is that I also know that I don't forget

44:03about it and then I'm charged forever. So, we all have these discoveries where we realize we've been spending $100 more than we wanted on something that we haven't used since last March. And that's an annoying feeling where the season pass gives you a very clear overview of these are the things you can get in this period of time if you spent this amount of money. And then it requires you to engage with the app or the the game in this case. And it requires you to play to get to it, but

44:32it unlocks a separate track of rewards. And I think that's a really fair way of saying h because when I think back to my childhood days in the late 80s early 90s and we didn't have a lot of devices my parents couldn't afford but those things that you then finally got your hands on were obviously premium titles that were paid and sometimes you would have spent $60 $70 on a game that you didn't like and now you can get a ton of hours of entertainment out of $60 and $70. So, I think even if you then spend $8 or $10 on a on a pass, that's a lot of

45:04entertainment, if that unlocks a lot of rewards in a game that you like. So, if the trade is fair, if you feel that it's transparent what you get for that, then I actually really like the season pass idea. And then of course if your app is a utility or a thing that you either need but for example when I'm when I'm um I signed up for a marathon and I I want to say it as many places as possible so I will do the marathon but I would love an app that said I will get you to the marathon but I will not charge you for two years after. If at

45:35the end of that said, let me become an annual subscriber, then I like that transaction, but and I think back to the scanning app, then sometimes you just need one scan, but you have to sign up for 800 croner or $100 uh to get that one thing or a monthly thing that reactivates and you forget about it. And I think the season pass figuring out what is the right duration of time. Is

45:59this a one day do everything you want? Is this a one week? This is in subway surfers 3 weeks for this season or um in most other apps a monthly thing that happens and then you choose whether this also is a month where you feel that this is worth paying for. Well Matias it's been so fun chatting with you. I feel

46:16like we could chat another two hours. Honestly been an absolute pleasure uh having this conversation and again I think so many things that subscription apps and and the kind of productivity side can learn from gaming and and I think you you've demonstrated that today. So so many great lessons. Uh but anything else you wanted to share as we

46:34wrap up? I think it's been a really good conversation and I appreciate the question because it also makes me think how how games are far in some areas but also other areas where we can definitely learn from apps and I'm happy to come back another time to discuss another hour. I think my main thing is just that the monetization and the gamification that term is sometimes broad used a bit too widely is about figuring out how you make the player journey or the user journey as frictionless as possible with a few friction points that that also makes it clear that here you have the value points if you want to to make

47:08those decisions and I think uh in general it's hard to make games so we're not saying it's easy either I know it's also hard to make apps but I encourage everyone who has an idea to try it because I really like the creativity that's that comes when people uh become entrepreneurial on on areas that can

47:24help others. Awesome. Well, thank you so much for joining us today. This is a really fun conversation. Thank you. Thank you. Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community. [Music]