A Returner’s Successful Investment Method - Chapter 628



Only Krnovel

Episode 628 UDT (3)

UDT is a monopoly company in the game engine market.

Since they had already dominated the market, they probably decided that they had no choice but to accept it even if there was opposition, so they proceeded.

But is that really the case?

I spoke to CEO Tom Scott.

“There is a high possibility that this plan reform will fail.”

He was surprised by my words.

[Is that really true?]

“yes. And this is an opportunity.”

[Opportunity?]

UDT Engine and Cerrill Engine are considered the two largest engines and rivals in the gaming industry.

The UDT Engine is specialized for beginners, small-scale production, mobile, and 2D, while the Cerrill Engine is specialized for experienced users, large-scale production, consoles, PC, and 3D.

It’s not that there is no overlap, but since there are differences in usability, it would be better to think of them as sharing the pie in their respective fields.

However, recently, as the UDT engine supports increasingly large-scale games and the Cerrill engine supports small-scale games, the overlapping pies are increasing.

In this situation, a competitor’s shovel is a good opportunity for us.

“It’s almost like UDT has made the worst move. There is a proverb like this in Korea. “Paddle when the water comes in.”

CEO Tom Scott understood what I meant right away.

[All right. Then, we will prepare countermeasures accordingly.]

* * *

Sunwoo was busy contacting and talking with various people, including his affiliated studio.

After ending the phone call for a long time, Sunwoo shouted in anger.

“Ah-oh! “These crazy people!”

“There’s a real fuss over one UDT.”

“So far, there has been too much dependence on the UDT engine. “I thought something like this might happen someday, but I never thought I would do something like this.”

I nodded.

“Reality always adds up.”

“What do NS and Sonyu say?”

I spoke with President Jim Spencer and President Phil Ryan on the phone.

“It looks like they are closely monitoring the situation. Because all of the affiliated game companies are involved. “NS also has a Game First problem.”

When I looked at the community where game developers gathered, it was already filled with double insults.

There is a good reason why they are so angry.

First of all, the biggest reason is… … .

Seonwoo said as if he was gritting his teeth.

“Raising prices is a problem, but the bigger problem is that rates have been revised in an incomprehensible way.”

In the case of Surrill Engine, usage fees are charged based on sales.

It is free for sales under $1 million, and 5 percent for sales above that. And this usage fee is waived when sold at Legend Store.

On the other hand, UDT Engine charges a subscription fee per developer.

It is applied differently depending on the size of the game company, ranging from $50 to $200 per month. Once you subscribe, you will not be charged any additional fees no matter how much game sales you make.

If they had said they would raise the subscription fee, there would have been less backlash.

However, what UDT chose was the runtime rate plan.

According to the reform plan, if sales exceed $200,000, a fee of $0.2 per download must be paid.

“At least it’s understandable if it’s a PC and console package game. In this case, the number of downloads is the number of sales, so in effect, it is similar to charging a usage fee for sales. However, in mobile games, the number of downloads and sales often have little to do with each other.”

For example, let’s say there is a low-budget puzzle game developed with the UDT engine and a high-budget P2W MMORPG.

Even though they were both downloaded 1 million times, the sales of the two games are vastly different. However, according to UDT’s revised rate system, you will have to pay the same $200,000.

In addition to this, there are more than one problem with the runtime plan.

One thing to note here is that the existing ‘subscription plan per developer’ was not changed to a ‘per download plan’.

The subscription plan remained the same, and only a per-download plan was added.

“Furthermore, these crazy people decided to retroactively apply the plan not only to games that will be released in the future, but also to all games previously created with the UDT engine.”

In other words, even if a game was released 5 years ago, you will have to pay for each future download.

As a result, game companies were in complete confusion.

What should we do with the games we have already made and sold?

What should I do with the game I’m making now?

What will you do with the games you will make in the future?

Everyone is lost and wandering around.

If you are in the middle of development with the UDT engine or are about to release it, you will not be able to do this or that.

Seonwoo sighed and said.

“I saw earlier that Editor-in-Chief Jim Schneider posted on Twitter, ‘UDT dropped a nuclear bomb on the gaming industry.’”

“okay? “Please leave a reply too.”

“what?”

“Udit is pooping on the game board. Someone please plug that hole with a thick, hard stick.”

“… … .”

While Sunwoo went back to work, a call came from a WST reporter.

Trish said curiously.

[How come accidents happen constantly wherever Miru goes?]

I said in a voice of injustice.

“No, what did I do…” … .”

If a serial murder occurs later like this, will they say it’s my fault?

Well, it seems like it happened earlier because of me… … .

[If I were to include all of this information when writing a biography later, one volume would not be enough.]

“Iknow, right.”

In order to reduce the reading fatigue of readers who will read the biography later, I think it should be set as an only child and the Hansena portion should be omitted.

[But is this such a big deal?]

“sure.”

In fact, if you are not in the gaming industry, this incident may not affect you that badly.

“The UDT engine is an essential product in the gaming industry. “It’s similar to Gobble suddenly telling smartphone manufacturers that they will collect fees from Andromeda.”

I explained the problems with the runtime plan and why developers were angry.

Trishish then said as if she understood.

[aha! That’s why everyone is strongly opposing it.]

“That’s right.”

But then he asked as if he couldn’t understand.

[Then why on earth did UDT revamp its rate plan in such a strange way?]

“I think there are two reasons to go.”

[What is it?]

“Firstly, this would be a way to maximize profits.”

Again, the UDT engine is suitable for small-scale and mobile game development.

Of course, there are quite a few hit games that generate sales of over $1 billion, but that number is nothing compared to games made with the Surrill engine.

Therefore, they may have thought that charging fees for the number of downloads rather than sales would be more beneficial to profits.

[What about the second?]

“Secondly, maybe… … .”

* * *

UDT is the world’s largest game engine developer.

Due to the explosive growth of the gaming industry and expectations for the future, the market capitalization soared to $40 billion.

Comparison with competitors also played a role in this rise in stock prices.

If you had to choose UDT’s competitors, everyone would choose Legend Games.

Legend Games’ main business is Surrill Engine.

The Surrill Engine has evolved with each generation and has now expanded into various fields such as architecture, design, and video production, as well as games.

However, it is not the Surrill Engine that actually accounts for the largest portion of Legend Games’ profits.

Rather, in terms of revenue proportion, the first is Legend Store, the second is Nightlight, and the third is Cerrill Engine.

Thanks to this, it was said that even though it was unlisted, the corporate value of Legend Games had already exceeded $100 billion.

Having witnessed the success of Legend Games, investors believed that UDT could also achieve similar success.

The UDT engine has a market share that is more than twice that of the Surrill engine.

If the market is limited to mobile games, the market share is over 70%.

In short, they have taken over the mobile gaming platform.

The strategies of platform companies are generally similar.

First, dominate the market at the lowest possible price or for free and eliminate competitors. They monopolize the market and then raise the rates to make a profit.

However, no matter how much the rates were raised, it was difficult to generate enough profit to maintain the current market capitalization.

Therefore, CEO Owen Raphael turned his attention to the mobile advertising market.

In the past, TV and newspapers were important advertising media, but since the advent of smartphones, mobile has become the largest advertising media.

As mobile is its main market, UDT entered the mobile advertising market a long time ago and recently acquired German adtech startup Sourcebronze for $5 billion.

If you dominate the mobile advertising market, you will be able to reap enormous profits that are incomparable to engine usage fees.

The problem is that competition in this field is extremely fierce.

Moreover, the opponents are big tech companies such as NPL, Gobble, and Facenote.

No matter how huge UDT is a software company, there is no way it can compete with big tech companies in terms of capital and technology.

Fortunately, UDT has a platform called a game engine.

There are 2.5 billion people around the world who play games made with the UDT engine.

Therefore, UDT immediately targeted the in-game advertising market.

This is a method of inserting advertisements into the game and forcing gamers to view the advertisements if they want to continue playing or receive rewards.

So CEO Owen Raphael came up with the runtime pricing plan.

There are several advantages to charging per download.

Not only can game companies collect more money, but in the process of measuring the number of downloads, various user data can be collected and applied to customized advertisements.

‘Just as ATube dominated the advertising market through video, UDT will be able to dominate the advertising market through games.’

What if UDT succeeds in converting to a mobile advertising platform based on a game engine?

It would not be surprising if the company’s value rose several times higher than it is now.

but… … .

As expected, as soon as the new rate plan was announced, strong opposition and criticism erupted.

However, CEO Owen Raphael did not blink.

‘You make money with our engines, but you make such a fuss when we ask you to pay a fair price?’

The reason he became CEO of UDT in the first place was to maximize profits from the UDT engine.

He pledged that he would show solid management results if he became CEO.

And now it was time to show it to everyone.

He said this to worried major investors:

“People get angry when you take one thing away and then try to take another thing away from them. But if you take two and give one back, you feel lucky.”

Considering the atmosphere, all you have to do is pretend to accept the developers’ opinions and reduce the amount raised by a small amount.

Game companies that previously used the UDT engine will have no choice but to use the UDT engine anyway, and this will remain the same in the future.

CEO Owen Raphael smiled and muttered to himself.

‘So you’re not going to use the UDT engine?’