Some Future Day

Marc Beckman: [00:01:00] [00:02:00] Matt Edelman, congratulations. Welcome to some Future Day. Congratulations specifically on your recent appointment as Chief Executive Officer of Super League I.
Matt Edelman: Thank you, mark. I'm, I'm, I'm really happy that we're doing this. We've, uh, we've talked about it for a long time, but it's great to be here.
Marc Beckman: Yeah. So, um, for, for those in my audience who are unaware of your company and your brand Super League, could you take a minute just to provide an overview of what it is that Super League does Exactly.
Matt Edelman: Sure. We, uh, we have, uh, been around for several years and over the past three year or four years have really become a leading company helping to, um, connect brands with audiences who play. and so if you think of audiences inside video game platforms, when they are engaged with that content, they are in a play mode and we [00:03:00] help brands reach them through playable media and playable content.
Marc Beckman: So that's fascinating. Um, but does it matter, like how big is the audience? How many people are players? Um, right now, I, I assume. You're talking predominantly mobile. How big is the community?
Matt Edelman: Well, we're, we're talking mobile and immersive platforms. Um, the community is, is extraordinary across all gaming. There are 3.3 billion people in the world who, uh, play games, and that can be people playing, uh, hardcore video games on their PCs with full headgear and gaming chairs, or it can be somebody playing wordle through the New York Times.
That range is quite extraordinary, which is why the audiences are so attractive to brands and marketers. But even more, um, interesting when you think about the numbers. Um, in the us, two out of [00:04:00] three people under the age of 40 play video games. And our premise really is that within 10 years, that's likely to be four out of five under the age of 50. And so from a brand marketing perspective, if you want to win the future, you have to start winning the hearts and minds of people who play now.
Marc Beckman: So Matt, we'll integrate some of the video of the gaming. Um, platforms that you're developing into the feed here, but just for those who are listening on Spotify and Apple, could you explain, when you talk about gaming, are you talking about like, um, these massive games like Roblox? Are you talking about?
Um, when I see a friend of mine, I. While we're waiting to go into an appointment to meet with somebody like you, they're like on their phone and just gaming. In fact, I saw these, I was sitting behind the CEO of TikTok recently in church, believe it or not, and the entire time he was on his phone gaming, it was like an old asteroid type of game.
I was, I was witnessing. So what does it mean [00:05:00] when you talk about gaming? How, like what's the breadth of the, of the interaction between the consumer and the game itself?
Matt Edelman: No, it's a, it's a great question. Gaming, uh, has sort of been this elusive, um, category in the content business for, you know, a few decades. And a lot of people still hear the term gamer and they think somebody who is, uh, got some black light and neon, you know, colors, uh, in their basement. Um, at two o'clock in the morning, uh, nothing could be further from the truth.
While that is a segment of the game playing audience, it is actually not the predominant segment by any means. So, at least from super league's perspective, uh, we help brands reach gamers across the world's largest immersive platforms, which are Roblox, Fortnite, and Minecraft. Collectively, they reach about 500 million. People a month globally. And we also help brands reach, [00:06:00] um, players of mobile games. And our reach is, um, more than 200 million players a month in mobile. And so overall, we're getting closer and closer to being able to connect with a billion consumers globally who. Who play these games, many of which are on mobile devices, in those, um, in-between moments that you're describing.
And probably more than more of them than, uh, we would like to think are in, you know, in church and in class and in a lot of places where you'd hope people are otherwise paying attention to what's around them.
Marc Beckman: So it's interesting you talk about age profile a little bit, and I see there's a big range between, you know, my generation all the way down to my kids' generation. But what about gender, Matt? Out of those, uh, 700 million people that Super League could reach right now, is it, uh, predominantly male?
Matt Edelman: No, not, not at all. It's really close to, uh, 50 50. Um, and it depends on the game, [00:07:00] of course, but as an example on Roblox, which, um, is, uh. Arguably the fastest growing gaming platform in recent history. They have about 90 million daily active users. A lot of the brands we work with, um, are very interested in that audience. Uh, they, um, recently had a hit game launch on their platform, um, named Dress to Impress that
Marc Beckman: I know it very well. My 8-year-old is obsessed.
Matt Edelman: Well, the amazing thing about that game is it helped age Roblox up into college aged, um, uh, players, and it also brought in a very significant female audience. And so it really does depend on the content.
There's nothing that, um, determines whether or not it, you know, a, a game platform is going to be more male versus more female, other than the content itself.
Marc Beckman: Dress to impress is an incredible pla. So these kids, my, my daughter and her [00:08:00] friends, they don't stop playing. It reminds me of, you know, again, I'm gonna age myself out a little bit, but when I was young, my sister who was close to age and me, she would have these little paper dolls and dress them with paper.
You probably remember Matt, dress them with like. Paper dresses, pepper sweaters, a paper, handbag, whatever, whatever that might be. But now this is like next level. They are challenging these girls, um, with, you know, at the outset to dress in a particular way. It could be a wizard or a mermaid or the first lady of the United States of America.
I've actually seen that. And then the girls are competing and there's a fashion show at the end, and they're going from closet to closet and doing hair and makeup and it's 3D and meanwhile, they're all talking to each other and it's just huge. So how does that become a game? Game within Roblox, where like, are there multiple games within these platforms?
Matt Edelman: Yeah, it's a great question. I love the way you described dress to impress you, you, you are, uh, more familiar with, with that game than, you know, most, uh, males over the age, I'll just say of [00:09:00] 40.
Marc Beckman: I, it's a, it's amazing how much time they spend on it. It's incredible.
Matt Edelman: it's, it's a phenomenon. So, so Roblox and, um, and, and parts of Fortnite, which are considered, uh, part of the Fortnite creative, um, uh. Uh, element of their game. Um, and Minecraft are all in a category that, uh, is affectionately referred to in the gaming business as UGC gaming, user generated content gaming. And the best way to think about it, a great framework, is really YouTube. So YouTube is a place where the, um, average person, um, has been able to become a creator on that platform.
And of course. We think of them in, you know, kind of marketing parlance as native creators. They're native to the platform. They weren't big creators of content elsewhere. They got on YouTube, they set up their home cameras or went out into the, into the world and brought their equipment and they became creators of content that have [00:10:00] driven YouTube to remarkable heights as a content consumption platform. Roblox and Fortnite Creative and Minecraft. similar, um, the community of players, whereas with YouTube, it's a community of viewers. The community of players on these platforms are the creators of the content on these platforms. And so, uh, again, UGC platforms dressed to impress was created by, uh, uh, teenage, you know, girl and, and she, you know, got into the creator tools. Um, built this incredible game and it took off in a way that very few games actually take off on, on Roblox, and, and, and yet that's the story of every successful title on the platform.
Marc Beckman: Do you know who she is? I'm just curious, like is uh, does anybody know who that woman, that girl is? Is that created trust?
Matt Edelman: has, uh, she's become a personality the same. Again, think of it as YouTube, the, the personalities behind the successful [00:11:00] games or the popular games, or even games that find a niche audience and somehow make their way into, you know, culture or subculture. These individuals are known and they have social media profiles, but what's quite interesting about them is they don't generally care about, uh, you know, being on camera.
That's not who they are. They're expressing themselves through their creations and their imaginations in the form of these 3D games that, that they create.
Marc Beckman: Does she monetize that platform?
Matt Edelman: Dress to impress is a very well monetized game. Um, on Roblox in general, and this is one of the reasons it is so popular for content creators in this environment. Um, the top 10 games on the Roblox platform have averaged about $36 million in revenue over the past 12 months. Um, the, uh, game number 11 through [00:12:00] game number 100. In terms of rankings on the platform, have averaged about $5 million of revenue in the last 12 months. And so you have people between the ages of, call it 14 and 24, who, um, either you know, at night and on the weekends or, you know, probably sometimes, as I said, while they're in class, are, um, jumping into the Roblox Creative tools and ROBLOX Analytics and they're building these games and. You know, the lucky few, uh, are making anywhere from hundreds. I say few in terms of the number of people who've tried. There are more than 40 million creators who have put something onto Roblox. But in the, um, you know, thousands, there are creators who have, you know, turned it into, um, thousands of dollars or millions of dollars a month, um, uh, in, in revenue, you know, for, you know, for themselves and, and their lives.
Marc Beckman: So how's the revenue derived? Is it predominantly through [00:13:00] advertising? Is it through the sale of digital assets? Can you lay out for, um. My audience, what the main consumer touchpoints are, uh, in forms of monetization for the creator.
Matt Edelman: Yeah, sure. So it's a little different on each platform. Um, the primary revenue stream in gaming is through consumer transactions and that. occurs from what we think of as in-game, uh, transactions. Most of these games, including on mobile, they are free to play. Um, and, uh, in mobile, free to play is heavily monetized through advertising. Sometimes you can choose to pay to get rid of the advertising, um, as, as a user. And so the creator of that mobile game either makes money through advertising. Complemented by in-game transactions, or they make money through a subscription, complimented with in-game transactions, inside environments like [00:14:00] Roblox and Fortnite. Um, most of the revenue comes from, again, in-game transactions. And, and in those environments, and particularly Roblox, a lot of that has to do with a player being able to advance their success in the game or their progress in the game. By spending money. Um, another form of revenue is cosmetics, where in Roblox and Fortnite players are dressing up their characters in various and really fun ways. Um, and so those are the, uh, those represent the bulk of the revenue. Advertising revenue for creators and sponsorship revenue for creators is emerging as a much more meaningful source of, of revenue. It doesn't. Quite measure up to the end game transaction dollar volume yet, but it's growing quickly. And of course that's, you know, that's what, what we're focused on.
Marc Beckman: To the gamer. Is, um, the, the actual users of the [00:15:00] game, do they find it, uh, to be intrusive? Do they find it frustrating where they need to pay for, you know, some kind of in game benefit?
Matt Edelman: No, it's sort of the nature of, of being a gamer, especially because you're able to get access to this content for free. And so if you are enjoying a game for free, I mean, literally you don't have to spend a dime if you don't want to. But then if you are interested in getting further in the game, or, uh, creating a digital identity, which has become as important for Gen Z in, um, in their lives as their real world identity. Um, then you're willing to spend some money to, um, you know, to move forward or to, or to create that image of your, of your avatar.
Marc Beckman: So let's pull it back to Super League then for a second, but with a, a focus specifically on. Roblox, Minecraft and Fortnite. Um, how does Super League then create, uh, [00:16:00] commercial relationships with these platforms or these creators?
Matt Edelman: Again, I think one of the easy frameworks to, to use is, is YouTube. And so I'll, I'll, I'll start there and then we can dig into it further. So, YouTube's very familiar to, you know, to consumers, to brands, uh, to content creators, to media companies. So, so with YouTube, um, if you are a brand, I'd like to use Nike.
It's just sort of a, a nice, um, you know, uh, umbrella to, to think about. If you're Nike, you might create your own channel on YouTube. Um, if you do that, it'll be a place where you put. Video content, but it is not likely to generate a lot of viewership. Um, you are probably going to have to spend media dollars to boost the views of those videos because you're not gonna be able to compete with the videos that are, um, produced by native creators for, for audience. Next, next layer of engagement for [00:17:00] you as Nike is you're going to work with those creators. You might invite Mr. Beast. Uh, the biggest, you know, brand, uh, branded creator, a native creator on, on YouTube. You might invite Mr. Beast up to the Nike, uh, sneaker factory to do a custom video on how sneakers are made, and he would do it in his style, put it on his channel, and you wouldn't as Nike have to spend any media dollars because that video would generate an enormous amount of traffic and you would pay the creator to do that. One layer down is you might ask 10 native creators on YouTube. about Nike sneakers before one of their regular videos. Think of it as a shout out. They'll put a link to that particular pair of sneakers in the comments so people can click to buy it. Um, and then the last layer of engagement is you might buy ads.
Nike might buy ads on YouTube. Well, if you take that framework, you can apply all or some of that framework to [00:18:00] Roblox, Minecraft, Fortnite, and even mobile games. Right. You might create your own branded experience in these environments and hope that you can compete for attention with the native creators, but for the most part, you're going to have to buy media to bring people into that world. The next layer down, you will work with the creators. You will have them build custom components of their game based on your brand, maybe a custom level, maybe branding out an entire area F for you. One layer down, you can insert mini games into these worlds and the games that are built by native creators.
And actually we do that quite regularly. And on some of the platforms, mobile and ROBLOX in particular, and to some degree on Minecraft, you can buy ads.
Marc Beckman: Can you build out digital assets? You talk about cosmetics, which again, for the audience, they should understand. It's not just like face color cosmetics. That includes, you know, digital assets [00:19:00] like apparel, swords. Helmets, hats, et cetera. Do you have branded, do you as a a corporation Super league specifically, do you have the ability to create branded cosmetics, um, in these games?
Matt Edelman: A a. Absolutely. It's part of just about every program that we run where. You know, an extension of your branded presence in one of the ways that I just described is a, uh, an avatar items, a virtual items package that you may want to give away for free. If it's a marketing program you may want to sell to, try to, you know, bring in some revenue.
Um, it depends on your goals, but avatar items are, uh, a terrific component of, um, of anything that, that a brand is doing in these platforms.
Marc Beckman: So Matt, out of those three platforms is Ro Roblox, uh, Minecraft. Fortnite. Roblox has the most unique users on a daily basis.
Matt Edelman: Yes, it is the largest. It's also the most brand friendly, both in terms of, the [00:20:00] way Roblox has set up their team, uh, to support brand partnerships and also the policies that enable brands to, um, to, uh, have a presence, uh, on the platform.
Marc Beckman: I'm smiling because you just brought, you just grabbed my segue into the next, uh, the next question. I was trying to lead us into that conversation, so, you know, certainly if I'm Roblox, I'm saying. Wow. I've built out this great technology. I have all this incredible user generated content. What did you say?
It's about 90 million uniques on a regular basis. Uh, but Hmm, 90, yeah. On a daily basis. Now I'm giving you Super League, the ability to monetize that. So whoa, whoa, whoa. Hold on a second. I want a piece of it. I deserve it. I am Roblox. So does Roblox restrict companies like Super League at all? Do you have to have a special license?
Are there a limited amount of companies like yours that are allowed to, that are permitted to go in and and create [00:21:00] those monetizable moments?
Matt Edelman: It's, it's less about permission and more about, um, collaboration and capability. So ROBLOX has put together an official partner program. Super League is one of a handful of companies that is a member of that program. And through that program we have a very active relationship with Roblox, both, uh, through their partner, uh, relations team, their developer relations team, and their sales and partnerships team.
Marc Beckman: I see.
Matt Edelman: means is we, um, when we're out talking to brands and agencies, in many cases we're collaborating with Roblox to think about what would be the right opportunity for those brands or IP owners on the platform. Other times, um, we are, uh, recommended by Roblox as one of the companies a brand or agency should speak with, uh, for the purposes of. Be becoming active on the platform. And so, it doesn't mean that another [00:22:00] company who isn't part of the program can't work, uh, with a brand in order to help them figure things out. But it is a reality that companies like Super League, um, are in the program because we have a lot of success on the platform.
We understand what helps brands be successful. We've. Um, got a lot of experience over several years and the relationships with the people at ROBLOX generally give us the ability to, to bring things to life that not everybody else has thought about.
Marc Beckman: I would imagine that's a huge advantage, uh, for Super League that really gives tons of value to your investors and, and to, um, also your efforts, your team. Um, so let's, let's shift gears. Staying on those. Three platforms, right? We're still thinking Roblox, Minecraft, and, uh, Fortnite. Let's flip to the other side, right?
We're talking about Super League. We spoke already about the user generated content and the platform, but let's talk about the brands because you know, you and I met, um, I've been so [00:23:00] impressed with the work you've done on the branded side. Um, what are the benefits to a brand? Like, just to play devil's advocate, um, look, I could reach.
The eyeballs of those consumers, of that demographic. If I am, you know, investing in more traditional advertising, broadcast television, oh, oh h, you mentioned YouTube, I could advertise on TikTok. I mean, there are so many ways for me to reach that consumer. Why do I need to go and work with Super League to access these consumers in these immersive worlds?
Matt Edelman: It is a, it's a great question, and it's one that we talk about every day. You know, we have a, a, a sales team of almost 10 people who are out in, in the market really, um, advocating on, uh, on behalf of the company and the platforms and addressing that exact, uh, question and, and, and, and set of, set of issues.
I think the, the. The real difference is engagement. Um, I don't want to use engagement, [00:24:00] um, as a generic term and talk about where it sits in the marketing funnel. We can maybe dive into that, um, as a follow up. But when you think about, um, time spent, that is generally the most meaningful representation of engagement. There's Gen Z is the, is the predominant generation. Um, in addition to younger consumers in, in generation alpha, but the predominant generation that has money to spend, uh, that is on these platforms, um, and whether it's their money or, or family and, and parents' money, um, there's a lot of spending power in Gen Z as we know, and, and so the average member of Gen Z spends more time on ROBLOX than any other platform, and the combination of time spent. Every day, um, on Roblox Plus Fortnite is higher than the average amount of daily time spent on YouTube plus TikTok. [00:25:00] So, so time spent as a principle representation of, of engagement. The other part of that is, you know, what you can think of as session time, and so. When you consider, um, how much time is spent watching a video versus playing a game, uh, or playing in a game, the average session time on platforms like Roblox is about 11 minutes. so that is an eternity compared to watching a TikTok video. Um, the, uh, the next layer down is thinking about a brand's presence in these environments. How many seconds does a person watch an ad on YouTube? Well, if it is skippable, it's about three. And if it's not, maybe you're at 15, occasionally 30 seconds if
Marc Beckman: A running really. [00:26:00] Right. Doesn't mean the consumer's watching it
Matt Edelman: well, that's the other, uh,
Marc Beckman: right.
Matt Edelman: actually touched the, the, the last point, which is attention. So, so I'll come back to attention in a second. But the, um, the average amount of time that we see people spending inside, um, these gaming platforms when there is a brand, um, in front of them is three minutes. And so you're talking about an ad that runs before content where you're getting somewhere between three and 30 seconds. Or you're talking about an interactive playable piece of content or media and you're getting closer to three minutes. And then the last piece is attention. when you, or, or people you see on, uh, on the subway or in church are on their phones and they are watching videos, it is just as likely that you will see them looking around. And seeing what's in front of them or [00:27:00] beside them as it is that you will see them actually looking at that video. It is a passive viewing experience, and distractions are common and in many cases, welcome when you have somebody who is playing a game on that device, they are locked in. They are leaned in, they are focused.
The attention to that content is much deeper than when somebody is watching a video, particularly in those in-between moments, which is a lot of when people play video games, whether it's Roblox or mobile games. And so engagement overall is so much more meaningful inside these environments. That's why brands need to be there, especially as I said before, if they wanna win the hearts and minds of of the future.
Marc Beckman: So is the for the brand benefit then, as it relates to these fully immersive types of. Gaming experiences, these playable, I like the way you use that word, experiences. Um, is [00:28:00] it more like top of funnel? Is it, is it the idea about brand awareness building, um, brand equity, adoration between the consumer and the brand, or.
You know, like in comparing to TikTok, like TikTok is just so dominant now as it relates to s commerce, right? It's just like, you know, just beating everybody right now by far. I think Instagram's doing a good job at like number two for sure, but, you know, they're, they're just killing it. Um, so with, with TikTok, am I getting a financial value as a brand that I can't get in the model you are sharing?
I.
Matt Edelman: It depends where you spend time, um, as a brand, but for the most part, it is fair to say that inside Roblox, Fortnite, and Minecraft. If you think of the marketing funnel broadly defined as upper, mid, and lower, um, you are in an upper and mid funnel, um, uh, environment on, on those three platforms compared to lower funnel.
Now Roblox is [00:29:00] experimenting with e-commerce. It's still very early days, and um, they would be the first to tell you that a brand shouldn't expect to drive substantial. Um, transactions, um, even if they tap into the, you know, these innovative e-commerce solutions on the platform. Um, and so again, upper and mid funnel with mid funnel representing engagement as I mentioned earlier, um, in mobile, um, in the playable ads that we run, um, in, in mobile games, we actually do have a lower funnel solution that is performing in, in some fun ways. Those playable ads. Um, effectively what it means is you are playing, um, an ad that is branded, um, and it matches the gameplay type of the game that you are already enjoying. And so if you're playing a match three game like Candy Crush, when you see an ad from, for example, Nike, um, you are playing a match three Nike game with Nike messaging and Nike [00:30:00] iconography. And the completion rate of you playing that game compared to the completion rate. If Nike had just put a video in, that inventory is materially different several times, um, higher for, um, the completion rate. And when you finish that game, you get an end card and that end card is fully clickable because you're in a mobile environment.
And so there is a performance. marketing opportunity for playable media, um, and mobile.
Marc Beckman: I wanna stay on the. Other platforms, but since you took me over to Mobile for a second, let me, let me hover with you on mobile for a sec. So if I understand correctly, super League is doing a great job at identifying mobile playable games, trending like the most popular mobile playable games. And then.
Essentially skinning them for a brand to optimize interaction with their target [00:31:00] consumer. And then at the end of that experience, the consumer receives a clickable digital asset that could be used for points for shopping for other benefits.
Matt Edelman: Um, it's, it's in that zone. So, just to, to clarify a little bit, we, um, we do identify, uh, popular games, but what we really focus on is popular games for the demographic that a brand is trying to reach. And so we know which game types are played by which audiences. Once we get that, um, um, sort of identified, we do create mini versions of those games and skin them for the brand and serve them up as interstitial ads when people are playing the games that they love. And at the end of that interstitial ad, there is the opportunity for us to put something in front of. The end user, it could be a reward for the game they're playing. It could be, um, an offer from that brand [00:32:00] to, um, shop, uh, for a discount with that brand. It could be an opportunity. Um, for, to try to get a user to go watch a trailer of a movie, which of course is one of the things that determines the success of the box office these days, is how many trailer views you, you get on YouTube. And so at the end of that skinned and customized playable ad, we can really do just about anything that a brand finds compelling.
Marc Beckman: So it sounds like Super League has a real advantage given its strategic alliance and special relationships with Roblox, Fortnite, Minecraft. Going over to the mo, staying on the mobile piece, is there a benefit, a unique benefit also, uh, for brands to work with Super League as it relates to mobile?
Matt Edelman: I appreciate you asking the, uh, the, the question. So, so it's a, you know, it's a moment for, for me to sell, but I will keep it, keep it pretty, you know, pretty simple. There are two advantages that Super League has that, that [00:33:00] ad format that I described, um, is what we think of as a native format, in other words, because we can target the ad. That has a particular gameplay type be shown to players of, of games of the same type. That native connection between organic play and the play of the ad itself creates a much better, um, performance level for the ad, about six times, um, a higher performance compared to. A, you know, a standard playable ad or a standard video ad.
And so that's a big advantage that Super League can bring to the table. The other advantage is, um, we now have a network of, uh, about 10 12, um, very accomplished and significant mobile game developers who really, in many cases for the first time, are willing to. Bring brands into [00:34:00] their game and build custom levels for those brands.
And that's something that has been very prominent in Roblox and Fortnite. And frankly, we, we built the muscles to understand how to make that work for a brand by doing it in Roblox and Fortnite. Not a lot of opportunities exist to do that in mobile games, which in many cases are even more popular, more exciting, and give, uh, brands access to more data and better attribution than the other platforms.
And so that's another advantage with, with Super League is we can now do that in mobile.
Marc Beckman: Have those mobile developers been protective? Do they not want to sell out?
Matt Edelman: It, it's a, it's a really good question. So in, in some respects, yes, they have been more protective. Um, and one of the things that we're able to, I guess, um, take advantage of, which is not an, um, necessarily, uh, a positive overall for the gaming business, but growth in gaming has [00:35:00] slowed. And, and the reason it has slowed is because the pandemic, the gaming business accelerated, um, about five years ahead of where, you know, the entire industry expected to be during, you know, that couple of year period. And so a lot of the growth that might've otherwise been more gradual was quite fast. And as a result, it has, it has, you know, kind of plateaued a little bit. And, and, and so developers across the gaming ecosystem and mobile in particular are much more open to partnering with brands because it represents a source of revenue that they didn't have previously.
And therefore, an opportunity for growth.
Marc Beckman: So Matt, you know, you are obviously very wise and Super League is very capable when it comes to developing these playable moments between brands and consumers. But I know that you also have had just tremendous success stories and have worked with so many best in class brands. Can you [00:36:00] share with my audience, um, some of the success stories that you've had with these best in class globally known brands?
Matt Edelman: Sure. I mean, I think, yeah, no, look, I, I, I think we, um, I'll give you, I'll give you three, um, very unique examples. So, so one, and, and probably one of the most well known inside our space is, uh, Chipotle. Chipotle has been a pioneer marketing, um, across the board. Um. You can look at what they do in social, their commercials, you know, their, um, in, you know, their, their live activations. Um, but in, in Roblox in particular, they have, they have been a pioneer. Um, and, and we have worked with them now for several years. The first activation that they did was, um, building essentially a burrito builder maze inside Roblox. And as part of the launch of that. They were willing to give away codes, um, where players [00:37:00] of that game could get free burritos. Um, 130,000 codes were redeemed within an hour. It was
Marc Beckman: Wow.
Matt Edelman: largest day of mobile app downloads in the company's history. By that time, it was the second largest day of mobile food orders for the company. Uh, by that time it was tremendously successful. They then, uh, proceeded to, um, do something just a few months ago where they released a television commercial for the first time ever inside Roblox.
Um, also inside their experience. And as part of that, they gave away um, 50,000 codes. And at one point we hit a peak of a thousand codes a minute being redeemed. And then just, um, I think it was last week, uh, we, um, released another, um, uh, Chipotle update, um, to their Roblox presence. Um, with an ingredient quest game where we created cards for the, I think [00:38:00] it's 52 or 57 ingredients that, um, are used throughout their menu. And it's a sort of a card collection game that, um, that you can now play in Roblox and you get benefits for. Um, completing, um, uh, the game as you go. And so, Chipotle has been a long-term partner. They are very innovative and the way that they think about engaging with this community gives us a lot of opportunity to play, um, with their brand and their iconography and their, um, uh, they're creative in a manner that is highly engaging and really fun, um, for this audience that plays inside, inside Roblox. Um, another example, um, was a, a Fortnite map that we, that we created for the Gladiator two movie. Um, that was, was launched last year and it was the second, um, most successful branded, uh, Fortnite map, [00:39:00] um, ever. And, and you know, we had, um, session times of about 30 minutes. Which is remarkable in terms of a branded activation. Um, and then a completely, um, you know, different experience was we built, uh, the Roblox world for the Olympics, uh, last year. And, um, over the course of the games, we got about 11 million, you know, visits to. Uh, the Olympics world. Um, and so it really has, uh, been quite diverse in terms of platforms, company types, uh, brand types, IP owners. Uh, it, it's been, uh, it's been an absolute joy to work with these brands and, and it really speaks to what I love, which is, um, uh, helping creative people, um, be, uh, more successful, you know, in, in sort of a commercial way that that's, that's probably been, you know, the, the theme throughout, throughout my career, I, I'm a little creative. I can [00:40:00] get there just enough, but it's really about inspiring and, and empowering creative people, whether it's inside a company where I work like Super League or um, with the partners that you know, that Super League has, um, who need us to be creative, but to achieve commercial outcomes.
Marc Beckman: Matt, pull back a little bit. Um, from a sector perspective, do you feel like there's a sector that hasn't. Leaped into this, uh, gaming and advertising space yet, and there's big opportunities, sector wise right now. And if so, which sector do you think, uh, hasn't really turned on the lights yet to the power of what you're describing?
Matt Edelman: Well, it's a, it's a great question. You know, it's, it's interesting, um, in, in a world that you know much more intimately than I do, which of course is fashion. Um, fashion brands were very active, um, inside immersive platforms, um, early on, and they have pulled back. Uh, and I think one of the reasons, uh, for that is, um, to some degree, um, [00:41:00] marketing and fashion really does need to hit that lower funnel outcome and, uh, and prove, you know, that there is an ROI that's, that's measurable in, in terms of driving revenue. Um, and so my hope is that as the platforms develop, uh, further and their advertising solutions become, um, a bit more measurable and, and capable of, uh, identifying, you know, how a brand can attribute their investment in these platforms back to transactions. I hope that fashion, um, companies reinvest in these spaces. Um, and so that's, you know, sort of pertinent just because it, it's, you know, it's part of the conversation with you in particular. Um, but I would say, you know, generally speaking, we haven't encountered, um, a vertical that isn't interested in, in this sector. I mean, we, you know, we work with travel companies, financial companies, auto, of course, we've talked about QSR, we've talked about sports, [00:42:00] um, consumer packaged goods companies. Um, uh, consumer electronics, I mean, they're all paying attention.
Marc Beckman: Yeah, it's funny, the fashion industry, I'm not surprised that you have that sentiment. Fashion has always been, uh, innovative when it comes to product design and communications. I. But slow to the mark when it comes to tech and emerging tech for sure. So I'm not really that surprised. But there's also the mentality of the chief marketing officer.
A lot of fashion industries, chief marketing officers, they like to keep things status quo. They have a finite budget, they have a formula that they go with, and if they hit those benchmarks, especially for publicly traded companies. They're golden. Uh, if they rock the boat a little bit too much, not so great.
So, um, what are you finding, like, is there a, a, a type of chief marketing officer that's really attracted to the gaming space, regardless of fashion, any industry? Um, are there, is it a, a [00:43:00] particular breed who's willing to take a risk and try this and then, you know, they've been excited about it and, and go a little deeper?
Matt Edelman: Uh, I love that question because it gives me a chance to, to mention something that I think is, is really important for, um, understanding. Why, um, interactive and playable, um, content and playable media is going to become so, uh, important and increasingly important. Right now, the average age of the incoming CEO for a US company is 56. Um, I'm just under having been, become a new CEO here, but, um, that means that the average CEO in, in the US is Gen X. Um, if you consider that CMOs are, give or take within five to 10 years of, of the age of CEOs at the youngest, um, most CMOs are still [00:44:00] also Gen X. Gen X did not grow up gaming. We did not grow up with online games where we were hanging out with our friends through devices, um, when we were teenagers. And, uh, that is not the case for millennials. Millennials, when they were teenagers, they were exposed to, um, massive multiplayer online games that they could access from their homes. Gaming became part of their DNA, and of course with Gen XI. Their brains are wired completely differently because of all of the things that they were exposed to between the ages of about seven and 13, which is a whole other topic.
But the um, uh, I am convinced that as millennials move into those CMO seats, much less the CEO seats, which again matches what I said earlier about what's gonna happen over the next decade. So over the next decade, you're gonna have, instead of. thirds of people under the age of 40 playing video [00:45:00] games.
You're gonna have 80% of people under the age of 50 playing video games. During that same window, you're going to have millennials move into the CMO and then the CEO seats, and people buy what they know. CMOs will start to spend more money. You will see a movement of dollars into interactive environments.
There will be more audiences there. Attention is higher there. Amount of time spent is higher there, and it'll be a comfort zone for this new generation of CMOs and CEOs who are not comfortable with it today.
Marc Beckman: Yeah, I see that. That's a great point actually. Matt, what about taboo products? Um, all of a sudden in these major markets here in New York City? For sure we see. Cannabis stores popping up all over the place. Are there regulatory issues where cannabis companies or similar, uh, alcohol, spirits, et cetera, are not permitted to get into this gaming and advertising SEC space?
Matt Edelman: There are, [00:46:00] um, government regulations right around who can advertise, um, to, uh, different age groups. So whether it's under 18 or certainly under 13. Um, and so there are just regulatory restrictions around. F, alcohol and cannabis, et cetera. And then each platform has the ability to, um, determine what kinds of advertisers and brands they think are appropriate for the audiences they reach.
Roblox is very careful about that, um, being as big as they are. Um, and the audience that is on Roblox being, you know, a bit younger than, um, than Minecraft, although pretty close and certainly a bit younger than Fortnite. Um, and, and so, you know, when you have a platform, the platform's policies, uh, definitely, um, restrict advertiser types. And when you have, you know, a mobile environment where there is no platform, um, it's really the, the regulatory restrictions [00:47:00] that determine, um, what ads can appear based on the age group, uh, that's playing the games.
Marc Beckman: So if you were gonna just in no particular order, but list like the top three business sectors that benefit from this playable. Advertising this gaming space. Um, who, which, which categories would you say, uh, really do the best? Right now? I realize it's top of funnel, middle Funnel, but a lot of brands, you know, you can't close the deal.
Um, right. Like if I want to go and eat at a, at a restaurant, I need to go there physically if I want to watch a movie. You know, in a theater, a new release, I need to go there. Physically. I would imagine that a lot of, same thing with like an auto mode automobile, like I would imagine a lot of those types of brands and companies benefit from this top of funnel, middle funnel gaming interaction.
Uh, if you were gonna list three of the best sectors that are, uh, most suited for this type of advertising, which, which would you list?
Matt Edelman: Right now, I would say, um, you know, [00:48:00] entertainment, um, uh, companies or entertainment releases generally have a big opportunity in these platforms, immersive and mobile. And so whether you're talking about a film release or a streaming release, um, if it's got the right audience match. Um, they now see these platforms as essential components of their, of their marketing plan. Um, QSRs, uh, not just Chipotle, but several others. Um, and I would maybe, if, if I'm allowed to sort of think of that as retail, so QSRs and retailers, whether it's Walmart or Target or H&M. Um, and you know, I think, you know, we're gonna start to see the. based on the demographics that I was just talking about, we're gonna start to see the Home Depots and others getting into these spaces more aggressively.
IKEA has already been in, in, you know, in these platforms, and so retail as a vertical, um, no matter what's being sold at the store. Um, and then I would say the third is, is definitely consumer packaged [00:49:00] goods. So, you know, the manufacturers of. The products that are then available at retail, whether digital or, or, you know, um, physical. Um, so those three sectors, and, and I think that, you know, in general, those are some of the, you know, most, um, significant advertising,
Marc Beckman: Yeah, for sure.
Matt Edelman: in general. And, and so, and it's because, look, as I said before, these are, these are. Audiences, you know, you don't think of. Um, but when a brand or an agency is thinking of reaching people through video ads, they're not thinking of reaching video watchers. That's not what they talk about. They talk about reaching, you know, male teenagers or millennial parents, or 20 somethings who are into, you know, traveling the world. about audience segments and lifestyle segments. They don't think about video watchers. We think it's critical for those same brands and agencies to view people who play games the same way.
They're not gamers, they're all of these same audiences. They're just [00:50:00] audiences who play versus audiences who watch versus audiences who listen versus audiences who attend events and, and each of those different audiences really deserves to be communicated with a manner that is similar to the content consumption experience that they're enjoying at the time. And so if you put playable media and playable content in front of audiences who play, that's how you're going to win their attention. And as I've said, you know, really, really capture their hearts and minds.
Marc Beckman: Matt, what type of benefit is the sector? Is your, is your platform gaming brands? Uh, seeing as it relates, uh, to artificial intelligence is artificial intelligence enhancing the experience now between, uh, brands, players, and the gaming platforms. I.
Matt Edelman: It's a, it's a good question. You know, I think, um, there are multiple examples of artificial intelligence being used on the creation side. [00:51:00] Um, so Roblox has an emerging set of artificial intelligence tools that are part of its, um, creator tool set. Um, uh, artificial intelligence apps, you know, have, have begun proliferating within, um, the creative, uh, um, community at large, and that has certainly included the, the gaming creator community.
And so whether it's. concepting or prototyping or digital asset creation with different types of ai, uh, solutions that has definitely accelerated, um, some forms of ai, which, you know, originally. Would probably have been called machine learning, um, as opposed to generative ai, um, are definitely being deployed in, in very effective ways around targeting, um, so targeting audiences.
And so when a brand wants to figure out how to optimize their spend, uh, there are a lot of technology solutions that are [00:52:00] increasingly using different forms of AI to make that, um, targeting more effective and optimizing those spends. And then in terms of ad creative. Um, we see opportunities, um, emerging where even though, um, the kinds of playable content, um, uh, units that we bring to life mini games as an example, or the ads that are playable, even though they are a bit more interactive and customized, we're starting to see some advantages, um, from using AI to. Uh, generate, you know, those, those units, um, more quickly and, and to put more choices in front of a marketer. Um, and also to be able to get new creative in front of users more quickly. Um, when we're testing to see what's gonna work best.
Marc Beckman: Matt, the one of the, uh, striking, uh, details that you shared with us today is the amount of time that the players, that the gamers are spending on these platforms. I [00:53:00] mean, I think at one point you said as high as 40 minutes a day. I. Um, it's remarkable, really. So with that, I start to think about, um, cryptocurrency and other forms of payment.
Um, on the digital side specifically, do you anticipate a big shift? Um, you know, we see, for example, the current, uh, Trump administration is really embracing cryptocurrency, deregulating. The category in a major way. Do you see cryptocurrency having an impact on the space that you're in as well? And if so, how?
Matt Edelman: You know, that's, that's a good question. At the moment, no, I don't think it will have an impact because I think that the platforms in this case. even with mobile games, you know, the payment, um, mechanisms are, are dependent upon, you know, apple and, and Google, iOS and Android. And I, and I think, it's going to be a while before they are comfortable [00:54:00] with, uh, cryptocurrency solutions being used, um, inside their, you know, their payment, um, uh, systems and the platforms themselves.
Roblox Minecraft. And, uh, Fortnite, um, Minecraft owned by Microsoft, uh, Fortnite owned by Epic Games. Uh, I think those companies are gonna be pretty, you know, pretty hesitant for a while, um, until there is, truly, um, a, you know, a, a fail safe way. uh, cryptocurrencies to be, you know, to be considered, um, such that there's no opportunities or no risk, I should say, of, of, of fraud or, um, uh, inappropriate data collection. Um, and so at least for the time being, I think, you know, it, it's unlikely to impact the parts of the gaming system that we operate within. Uh, there are. gaming, uh, [00:55:00] studios that are building primarily for the PC gaming universe and some mobile for sure, um, who are enabling, um, uh, cryptocurrency capabilities or Web3 more broadly capabilities within gameplay. Uh, and, um, I think, I think we've reached the point where most of that is likely to be, um, almost invisible to, to the player and just facilitate in, in ways that, that, you know, these developers, hope players will appreciate, facilitate different types of, uh, of payments and advancements in games.
Marc Beckman: Matt, what are we talking about dollar wise here? What's the advertising, gaming, uh, total volume, looking at in, you know, 26, 27, 28? What, what are we. Is it real money?
Matt Edelman: Sure. I mean, I, you know, it's, it's, uh, it's, it's actually getting harder to measure because it is becoming sort of intermixed with digital [00:56:00] advertising, um, more broadly. But, but generally speaking, um, the, uh, the, the. Advertising industry inside gaming is well, is predicted to be well north of $50 billion. Um, and, and that has a lot to do with the extraordinary reach and breadth of audiences in mobile games. Um, because effectively mobile games, um, serve ads in, in, in, you know, uh, in between, you know, gameplay levels or gameplay moments that are, that are just standard digital video ads. and you know, we're using that inventory for playable ads, but, you know, there are still more brands buying standard video than our playable ads.
We hope to, you know, kind of continue to climb the curve and, and, and, and dig into those, you know, those video budgets. Um, but uh, digital video advertising is the most significant [00:57:00] and and largest piece of the advertising. Ecosystem and the fastest growing. Uh, and so the fact that a lot of that is now showing up, um, in gaming, um, is, uh, is exciting.
And, and Roblox actually just, you know, announced, uh, rewarded video being available as an ad type, um, inside, you know, uh,
Marc Beckman: For.
Matt Edelman: and, and a big partnership with Google to enable buying those, uh, rewarded video ads, um, you know, through, uh, Google's, you know, ad platform. Um, and so I think that, uh, the spend is, is only going to move more quickly as. Capabilities, um, uh, advance in, in terms of ease of buying better, targeting, more clear attribution capabilities. And, and as I said in mobile, the demonstration of, uh, the power of playable ads, um, driving even, you know, more video budgets to focus on [00:58:00] the value of those, of, of that money being spent, um, with, you know, against audiences who play, um, and not just audiences who watch.
Marc Beckman: Very cool. So Matt, last question now and then I'll let you go. Um, I end every one of my episodes with a, the same format, the same formula. Basically, I give my guests a lead question, which. Incorporates the name of my show, some future day, and I allow for them to finish it. Are you ready? You have no, there's no, you have no choice here.
You, you are either in or you're not in. I mean, but, but your choice with you is like, you're in,
Matt Edelman: Just like a gamer. I'm leaned in. I'm focused, so
Marc Beckman: all right,
Matt Edelman: I can pull it off.
Marc Beckman: I'm gonna keep it real macro. So in some future day, gaming will become.
Matt Edelman: in some future day, gaming will become the predominant form of content consumption for more than half of [00:59:00] the people on Earth.
Marc Beckman: That's huge. That's huge. Matt, thank you so much for joining me today. It's great to see you. Thank you for all of your sage wisdom. Um, I wish, I wish you all the best. I.
Matt Edelman: Thank you so much. The, the conversation was terrific and it wouldn't have been possible without your, uh, insightful questions. Um, and so, uh, I really enjoyed today. Thank you