Moonton, Discord and the Consolidation of Communities
TLDR
ByteDance buys Moonton; Discord’s up for grabs
Subscription to online video streaming services hits 1B+
Book review: The Almanack of Naval Ravikant
On platforms and tech companies buying communities
ByteDance (TikTok) just bought Moonton (Mobile Legends). For years, Mobile Legends: Bang Bang has been a beast in the mobile MOBA scene; taking market share especially in the Asia/SEA markets from PC MOBA giants League of Legends and Dota 2 by, quite literally, taking ideas and designs from those games, baking in a frictionless onboarding experience antithetical to the traditional MOBA experience, and finally, by simply being on mobile; something the Riots, Valves and Blizzards of the world were slow to act on.
The question though, is how long can Moonton sustain their success? There are numerous factors to consider: starting first with Moonton’s own strategy; do they have new games in the pipeline or do they continue to rely on their two or three existing titles? How’s their playerbase doing, is it holding steady, on a decline, or rise? How will they be impacted by changes in the mobile ecosystem like the Apple iOS14 updates?
There are an additional two macro developments on the horizon I think about. First, traditional PC and console giants are finally waking up, bringing their massively beloved IPs to mobile. It started first with Super Mario Run (Nintendo), Call of Duty Mobile (Activision-Blizzard), followed by Wild Rift (Riot Games), and more are coming soon including the hotly anticipated Diablo Immortal (Activision-Blizzard) and Apex Legends Mobile (EA).
Second, with Microsoft’s massive moves with Xbox and their cloud service, I’m convinced cloud gaming overall is going to be a massive disruptor to the mobile gaming space - not just in the types of games that are going to be accessible to the biggest gaming population (mobile gamers), but also how games will be distributed, marketed and sold. It’s absolutely why Apple is freaking out about cloud gaming.
Which makes ByteDance’s acquisition of Moonton timely. For Moonton, it can be a way to hedge against the coming headwinds, and be given a cash-carpeted runway with minimal oversight to incubate their next monster hit, while also benefiting from ByteDance’s ever-growing reach; a claimed 1.5B monthly users across their family of apps and services, constantly upsold on ByteDance’s other apps and games through native in-app ads. Naturally, Moonton’s community of young gamers in growth markets is highly attractive, if not already converted, to TikTok.
For ByteDance, this move is perhaps quite simply one Chinese tech company amassing power against incumbents Tencent, Alibaba and Baidu, both on the mobile games front, as well as overall Internet space. Reuters reports that Tencent had made a bid for Moonton, only for ByteDance to win it. That must’ve felt good for ByteDance in this David and Goliath story.
Across the waters, Microsoft is once again in the spotlight, looking to make yet another massive acquisition in Discord. The deal is not final, Microsoft may not necessarily win (there are other suitors), and Discord could decide to go public on their own.
Although Discord has predominantly been branded a platform for gamers, it has been used extensively by a myriad of non-gaming communities and interest groups. Like ByteDance’s Moonton buy, Microsoft will benefit from a Discord acquisition both for its sizable brand-loyal community, as well as the underlying technology and design of the platform. It is a natural fit/integration into their Xbox ecosystem. Possibly also great for their existing enterprise solution, Teams.
Some professional and armchair pundits are wary if Microsoft did pick up Discord though, given their bungling of past acquisitions like Mixer. It just means Microsoft has a lot to prove and significant brand perception debt to climb out of. Finally, as Microsoft had missed out on picking up TikTok last year, Discord might give them a small position in the social media space, and build a position against other encroaching voice-first players like Clubhouse. Read my previous newsletter on this here.
1 to 0 clicks - the future of tech companies consolidating consumer decision-making
It’s not just the games communities that are consolidating; so too is the entertainment and online video streaming services. Netflix recently hit 200M subscribers, Disney+ hit 100M subscribers (in just 16 months); Apple, Amazon, AT&T, and more are continuing to grow as well.
We all know the COVID-19 pandemic has significantly hit out-of-home entertainment like movie theatres, but this has also accelerated on-demand home entertainment’s position against traditional cinema and television broadcasting.
It doesn’t matter if you decide to watch Hamilton or Wandavision on Disney+, or Bridgerton or Queen’s Gambit on Netflix, or play Fallout 76 or Nier Automata on Xbox Game Pass; they are all the same, your subscription to and consumption of the service is a binary 1 or 0. There’s no need to flip the channels any longer. And then you’ll be upsold on other entertainment, products, services and brands continuously within all these services’ walled gardens.
We will live in a future where we will no longer have to make major buying decisions on our entertainment and brand choices as services and platforms consolidate and reduce consumer or community actions from 1 to 0 clicks. Everything we want or are told to want will be right there on an endless side to side, or up-down scrolling carousel of content and products.
As Scott Galloway says in an interview, “Consumers don’t want to figure that sh*t out… like Netflix… it’s not a consumer offering, it’s an IQ test. That’s what these things are becoming. If you don’t have Amazon Prime, it means you don’t have a credit card. You don’t have Netflix it means you don’t have a TV. It’s just these bundles have become so powerful.”
To that point, the successful brands and service providers are delivering bundles of maximum value to the end-consumer rather than be a single product in a sea of choices. The reason why Call of Duty contributed massively to Activision-Blizzard’s 2020 $8.1B earnings is because of their seamless integration of games (Call of Duty Black Ops Cold War to Warzone), game modes, cross-platform upsells and more, driving up overall player retention and engagement.
All of us, as participants in all these various ecosystems, apps, services, and games, can only watch as big tech continues to consume and reappropriate innovations and technologies to consolidate their positions for the future. Some might argue that’s frightening, I’d say it is a future that is inevitable, foretold in cyberpunk books for decades. The megacorps are here.
Book review: The Almanack of Naval Ravikant
I just finished reading The Almanack of; a book of wisdoms from Naval Ravikant, an entrepreneur and angel investor, collected by Eric Jorgenson from Ravikant’s various Twitter postings, podcasts features and essay write-ups over the past decade. I’ll spoil the review for you now and say that this is a great read, and that the book is free on its website.
Ravikant speaks on topics like ways of working, achieving success, reaching aspirational goals, as well as the meaning of happiness and the accumulation of wealth. It’s the kind of book I would recommend folk seeking sound and pragmatic advice on self-improvement and growth without the buzzwords or meandering life stories.
I stumbled upon Ravikant through his even-mannered, intelligently thought-out and sincere discussions on crypto most recently on Tim Ferris’ podcast (which he is a frequent guest on). A quick Google search led down a rabbit hole of his accomplishments and that’s how I ended up reading the book.
Here are some nuggets of his wisdom:
On decision-making: “Almost all biases are time-saving heuristics. For important decisions, discard memory and identity, and focus on the problem.”
“If you can be more right and more rational, you’re going to get non-linear returns in your life.”
On happiness: “You can literally destroy your happiness if you spend all of your time living in delusions of the future.”
On actions and results: “You’re not getting any younger. Your life is slipping away. You want to do [your life’s work] as quickly as you can, while doing them well with your full attention. But then, you just have to be patient with the results because you’re dealing with complex systems and many people. It takes a long time for markets to adopt products. It takes time for people to get comfortable working with each other. It takes time for great products to emerge as you polish away, polish away, polish away. Impatience with actions, patience with results.”
“Inspiration is perishable - act on it immediately.”
Just like subscribing to this newsletter - act on it immediately!
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Great book recommendation. Definitely gonna pick it up. Thanks Jun