As per Playside's Instagram page, they're opening a new studio on the Gold Coast.

https://www.instagram.com/p/CWXugvpPQxF/?utm_medium=share_sheet

PLY – Management & Culture

“There’s no fate, there’s no everything happens for a reason, just go out and find jobs, go out and do the best you can do and nothing is going to magically come to you and if it does that’s luck.”

~Gerry Sakkas CEO PlaySide Studios

Management

Gerry Sakkas – CEO & Managing Director, 21.5% ownership

PlaySide Studios is led by it’s founder, Mr Gerry Sakkas who has over 12 years in the gaming industry. A speech by his idol Steve Jobs inspired him to leave his job at Electronic Arts in 2011 to start PlaySide Studios. Jobs message was to stop living someone else’s life and do what you love. Gerry had been at EA for 5 years where he had worked his way up from testing to lead designer of the whole studio – which is nearly impossible.

Mr Sakkas left EA with a $15 – 20,000 redundancy, a $10,000 credit card bill and didn’t pay himself a salary for the first 2 years. This is an advantage of investing in founder led companies; they’re all in. In addition to the financial sacrifices, as a 24 year old, he sacrificed the beach holidays and partying as well: “…so I had to see everyone going to Mykonos every year for like five years when I started Playside… the boys were going everywhere and I was just doing the place up and just slogging away…” These sacrifices have turned his $30,000 investment, together with his 2 partners investments, into an $11M revenue company with over 90 staff.

A small or microcap company not being reliant on a single person is a big advantage. Mr Sakkas has wisely set the company up to be less dependent on himself: “I've set up the correct middle management and the correct upper management… they’re pretty good without me, I still get very involved but I can step back…”

Gerry is a passionate, confident and driven entrepreneur. His high confidence is balanced with humility and accountability, stating “my best value is being able to back myself and going ‘no this is what it should’ be but then if it went wrong going ‘hey guys like that was my fault I screwed up like let's do it again’.” Employees appreciate a leader who hold themselves accountable and take ownership of their mistakes.

He shows a strong work ethic and looks for this in his employees. The bar to work at PlaySide is set high as he looks for self-taught individuals lacking a sense of entitlement who are willing to go out and earn it.

“…we live in this world where you can literally learn anything based on the power of the internet.”

“they're the ones that stand out every time. They've done all the YouTube courses, they've bought courses and done them. They're just naturally talented. The ones that just go to Uni think they're going to learn something [and be given something] that also says a lot about their personality generally because you know who wants to hire someone who just is expecting something?”

“2 of my best employees didn’t do anything to do with games at all at university. They just had really good personalities that I liked and knew that I could train up to be machines and they’re both killing it.”

Gerry is the type of CEO I am excited investing my money with.

Mark Goulopoulos – Non-Executive Director, 21.4% ownership

One of the founders of PlaySide Studios, Mark has over 20 years’ experience in finance and investment banking and is a founding partner at Cumulus Wealth Management. He is responsible for corporate strategy for PlaySide and has led financing rounds for pre-IPO and ASX listed businesses.

Aaron Johnathon Pasias – Non-Executive Director, 21.4% ownership

The final co-founder of PlaySide Studios, Aaron has over 15 years’ experience in financial markets and property. He oversees the finances of the company and works with the board to ensure the company is meeting its financial obligations.

Goulopoulos and Pasias bring a strong business and finance knowledge to the company, while the remaining key management personnel have a depth of experience across leadership, games, sales, marketing, tech, acquisitions and more. Management are aligned with shareholders with over 64% ownership and no sell down in the recent IPO.

Culture

Unfortunately, PlaySide lacks any Glassdoor reviews but a few other resources can give us a glimpse into company culture.

PlaySide have a stylish, modern Melbourne office https://www.youtube.com/watch?v=DfSFYi7NQ0I and value quality over quantity with CEO Gerry Sakkas stating:

“The most important thing is just allowing people during the day to do whatever they want to do and then you’re going to see who works the hardest anyway. They don’t have to be at their desk the whole time…. I don’t care if you did it between 9 and 12 or whether you did it between 9 and 5.”

“I’m paying you to get the result I’m not paying you to be here 8 hours.”

Staff testimonials give us insight into what it’s like to work at PlaySide Studios https://www.youtube.com/watch?v=Pp4XARkgkOA

Producer Erin Halpenny says she’s surrounded by a lot of passionate people in her role at PlaySide, while producer and artist Taylah Walker says the company employs a mentor system where they team up juniors with more experienced employees. Juniors are encouraged to ask questions if they don’t know something. Finally, Adam Bax points out when assessing mobiles games, “You don’t have to like something to appreciate why it’s popular.”

PlaySide’s goal is to create a fun, productive work environment with staff happiness and job security as top priorities. Founder Gerry Sakkas explains why this is so important to him:

"TJ and I worked at EA for many years, and at one point, they made us all redundant, and then hired us all back a few months later on contracts. And at the age of 22, I was responsible for one of the largest console games that was being developed in the country, and I was on a contract,"

"At any point, they could get rid of me, there'd be no payout, no nothing, and I was sitting there making a game that could potentially make someone hundreds of millions of dollars. I don't ever want my staff to feel like that, and we've given a lot of them shares in the company too.”

"We want them to feel as much a part of this journey as we are, and that's how you retain really good people."

PlaySide tick all the management and company culture boxes for me with both appearing very strong.

References

https://www.youtube.com/watch?v=N5OTNZsk6NM

https://www.youtube.com/watch?v=Bzi6ufzXcwc

https://www.youtube.com/watch?v=TPfA97fQM20

https://www.afr.com/technology/playside-studios-gears-up-for-asx-debut-20201130-p56jba

PLY - PlaySide Studios

Growing up in the 90’s, if I wanted the latest video game I had to get my mum to drive me down to the store and pay for it upfront. There were no in-app purchases to make or ads to watch while I was playing Mario Kart or Goldeneye. I couldn’t pay to make my Kart go faster, to skip a level or to give Mario a killer hat to show off to my friends. When my Nintendo became obsolete I upgraded to Super Nintendo. When the ground-breaking graphics of Final Fantasy 7 came out for Sony PlayStation, I upgraded again. With a cost of $40 million and another $100 million for marketing, video game maker SquareSoft was taking a huge gamble on the success of a single game.

Over 20 years later and mobile games dwarf both console and PC combined, making up 57% of global video games revenue. Compared to Squaresofts $140 million spend on FF7 in 1997, mobile games cost $50,000 to $2 million+ to develop. Reduced development costs and increased payoffs have attracted a bevy of new competitors. Low barriers to entry and the prevalence of mobile phones on which to play mean a few select companies are no longer spoiled with the video game oligopolies of the 90’s.

Developers no longer need to sink millions into development before finding out if their game will be a success. “Beta” versions and “soft launches” are common with more serious gamers playing before release, providing valuable feedback on whether a game will be popular or how it might be improved. Additionally, we no longer have to get in front of our TVs to play. We can now play our favourite games at the pub, on the bus, in the park or on the loo.

See a game you like? Tap download and you’re playing within a minute and most likely at no cost as the majority of games are free to play.

So if the majority of mobile games are free, how do developers make money?

Business Model & Market

How Mobile Games Make Money

Mobile gaming is an industry where 90% of players are casual gamers meaning they play occasionally in their free time versus hardcore gamers who make time to play and play often. As a result, a small minority of players (~5%) generate nearly half the total revenue.

Paid Games – only 4% of mobile games revenue are generated in upfront payments.

Free with Mobile Ads – these games account for 53% of direct revenue and can include banner ads or rewards based ads. Developers need to be cautious with ads as they can detract from gameplay when used poorly.

Freemium with In-App Purchases – make up 43% of revenue allowing users access to the basic functions of the game with more advanced features requiring payment.

Mobile games can also generate revenue indirectly through physical merchandise (think Angry Birds stuffed animals) or media if the game is successful enough.

PlaySide Studios focus on fun, simple, games for a broad target market. They’ve currently only produced mobile games but have a PC game planned for release in the coming days and a console game due in Q4 FY22.

They distribute their mobile games through Apple’s App Store and Google’s Play Store. The downside is both take a cut of 30% (15% for companies generating <$1M in the App Store); however, neither Apple nor Google take any cut of ad revenue. The upside is that PlaySide gets access to the large audience both platforms provide.

Revenue generated from ads will vary based on operating system (Apple vs Android), device type, geography, current physical location, time of day or time of year as advertisers will pay more for targets they view as higher value.

Market

The global games industry is larger than movies, TV and music combined. Over 100B hours of gaming content was viewed on Youtube in 2020.

The total addressable market for the video game industry is estimated to be worth $175B with the US making up $65.5B. Mobile gaming makes up the bulk of this at $100B, followed by console and then PC gaming. The market is forecast to be worth $257B by 2025 and expected to grow at 9 – 13%.

A successful mobile game can generate incredible returns. For example Clash of Clans earned $6.4B, and a staggering 64 mobile games have earned over $1B and 8 over $5B each. Full year revenue of $10.9M for PlaySide Studios highlights the upside the company has.

The US is number 1 in player spend by country; however, Asia (Japan, China, South Korea & Taiwan) round out 2 through 5 and account for over half of mobile game spend. Mobile gaming is growing at double digits with Asian market downloads growing 10x faster than the US. As a result, emerging markets in the mobile gaming industry consist of Asia and Latin America and are due to a rise in smartphone ownership when compared to the US.

There is no single mobile gaming market as consumer preferences vary by region. Asia favours RPG and strategy genres and consist predominantly of midcore gamers, that is gamers who make time to play as opposed to casual gamers who play occasionally to kill time. Midcore titles generate 76% of revenue in Asia with casual titles only attracting 2%. The Asian market favours high fantasy and Anime artwork.

Contrast this to the American market favouring a more diversified mix of genres including puzzle, casino and simulation. Casual gamers generate 21% of revenue in the US and the market favours modern art and cartoon style games.

These diverse consumer preferences mean local publishers, with a better understanding of that market, dominate their regions. For example, Asian publishers generate 92% of mobile game player spend in Asia. This suggests there are some barriers to entry should a Western developer wish to crack the Asian market or vice versa and is something to consider when assessing the total addressable mobile gaming market. It's possible we see developers pursue M&A opportunities to address this.