Overwolf CEO: $800M paid to in-game creators, $300M in the last year alone

enables creators to build, distribute, and monetize in-game apps, mods, and private game servers. Waiting room. Let's bring him in the TVP Ultra. Welcome to the stream. How are you doing? What is your background? What what is this beautiful office you're in? I'm fascinated by this.

Uh no, it's basically something like halfway through co I just could not work anymore from the house. So in our backyard, we built this uh wooden shed. Uh so this is it. This is like my small man cave. This is amazing. And you have uh you have power and air conditioning in there, I assume. Yeah. Yeah.

I mean, you have to have air conditioning for sure. I need this yesterday. I'm going to email you right after the show and get you to tell me exactly what happened because I I truly am in the market. Uh anyway, we're not here to talk about cool backyard offices. We're here to talk about your business.

Uh please uh uh give us a state of the union uh and uh and give us any updates on how you're explaining the business, where it fits into the video game economy, and then uh how the business has grown recently because it's absolutely it's an absolute monster. Sure. So, we're the guild for in-game creators.

And the way we think about our business is our responsibility in the world is we build a new profession. We call this profession in-game creators.

And in-game creators are developers, software developers who are building apps or mods or private servers or websites around existing games and making a living building those products.

for game studios that want to enhance their games with UGC but don't want to go through the whole kind of length of building something like a Roblox or like a UFN on Fortnite were an engine that allows them to do that.

So you know if you use an engine sorry on Fortnite UEFN sure uh so Roblox I'm assuming you know folks uh understand how [clears throat] Roblox works and the ecosystem and everything and maybe have heard Dave earlier today. Yeah. Um, UFN is like the creator program for Fortnite. So, everyone knows Fortnite, right? Yeah.

But if you wanted to build your own Fortnite experience, you could go to UFN, this is the engine, and you can build like your own Fortnite experience. Yep. Make sense? Yeah, makes a lot of sense. So, what we do is we we do that kind of same thing but horizontally.

So, um I'm assuming most people know about Unity or Unreal, the game engine. So if you want to build a game crossplatform, you can go use Unreal or Unity build a game. You could use us as a platform to horizontally power these games with UGC. So this is what we're about. Where are the where are the walls of the garden?

Uh I feel like uh every uh every big platform has somewhat of an incentive to throw up walls.

And this was this came up during like the the NFT boom where a lot of people were pitching like oh well like you'll be able to take your uh you know like your custom skin in Roblox and bring it over to Fortnite and and whenever was somebody who was pitching that I was just like no they won't.

That makes no [laughter] sense. They have no incentives. and but but I feel like you you've been able to, you know, build a business that is somewhat crossplatform, but there's probably places where the big game uh engine developers and the big platforms kind of don't want you playing.

So, how do you think about do you actually like call people up and just say, "Hey, can we do this? " Or do you understand the economics? Like how do you think about where the uh where the okay don't dip your toe in that particular walled garden because company X wants to own that experience from start to finish. Right?

So uh the gist is we respect the rights of the IP owners and we want to make sure that we're communicating with game studios that we're sharing with them what's done in their ecosystem. If they want to go deep and they want to partner and they want to integrate our code within their game, they could do that.

This would make modding available on Xbox and PlayStation, not just PC. Sure. But if they don't and they prefer to kind of keep an arms length and just be aware of what's happening that works for us as well.

So I think the key is indeed respect the w gardens and uh what we're seeing I think with time is this evolution of um you know a decade ago or 15 years ago it was like not too many studios were open to folks creating content around their games and now it sort of gradually becomes the new standard and you have massive IPs like Harry Potter who are all of a sudden open to UGC with all its risks right you would think one of the biggest IPs in the world probably pretty risky to allow creators to do whatever they want but if If you provide an environment that's uh safe that does moderation and curation, make sure that the content is consistent with what the IP owner had in mind, you can have wonderful things happen.

So, so the gist is uh we you know stick with the game developers, have conversations and make sure that the community supports them with whatever goals they have and their perception of the world. How are you measuring impact of the business? Obviously run sort of a two-sided economy.

What uh what are the key metrics these days? So we have one northstar which is greater payoffs. Uh the reason we chose that northstar is we're building a new profession. So it kind of makes sense. We want to make this whole thing sustainable.

But because we're UGC and we're premium so it's all like free to play pretty much if there's no money there's no quality. There's no product market fit. There's no retention. There's there's really nothing. So our one core KPI is creative payouts. And um yeah that that's the key one.

Obviously we look at a bunch of other things but this is the main one. How how many people globally are make of have a full-time job, you know, contributing to the to video game economy as in like independent developers or small teams that that do this full-time? You mean in the UGC space or just in general?

Do you want to count Roblox and UF or game studios? Yeah, I I guess I guess globally and then if you can kind of separate it out between, you know, in all the different kind of categories that you just laid out. All right. So, let's let's do a bottoms up analysis uh with the different categories.

So, obviously we have uh studios and publishers. Let's put them in one category. Yeah. And this includes uh the Blizzards and EAs, but also the smaller indie studios that would then go ahead and distribute their game on Steam or on one of the mobile platforms.

Uh so I'd say this is one category of folks making a living in the video games industry. Um I'd say the second category is call them UGC creators and this includes Roblox developers, UEF developers, UEF, the Fortnite example that we've just uh given and also folks that are creating with us.

I'd say this is the second category, people who are not necessarily building the fundamentals of the game, but they're enhancing an existing game or an existing ecosystem.

Now, obviously, there are a lot of uh service providers like um you know, studios that would do work for hire or would help with QA or would help with localization. So, this would fall into the service providers category. And then I would go to infrastructure.

So you have folks like again Unity or Unreal or an engine like I don't know Speed Tree that uh is doing planting and shadows and like I I don't know like a bunch of uh tool in the ecosystem and then you have the go to market right you have influencers you have a lot of folks just doing say Minecraft content on YouTube and you know they make a living off of that.

So, uh I I don't know off the top of my head what the number of people who are doing that and make a living, but but it feels like the kind of best possible time if you if you love video games, you can just live any anywhere in the world and probably if you try hard enough, you can make a living kind of contributing to these different ecosystems.

Yeah. But I do want to emphasize it's, you know, just like on YouTube, there's a small percentage of creators who are actually making a living building content. Um it's the same thing across the board. Yeah. Like you know it's very easy to enter you know like a roadblocks and start creating.

Um but you know there's only a small percentage of folks that are actually successful and have recurring success and can make a living doing that and we're seeing that to within our own ecosystem. How much have you actually paid out to creators?

Um, so today it's uh in the neighborhood of 800 million with the last uh 12 months. So 25 it's uh 300 million. Wow. Wow. We got a gong to hit for you. That those are congratulations. That's an insane number. One fantastic. By the way, another thing I want to emphasize is uh uh we started back in 2010.

So I'd appreciate an overnight success. Oh yeah. [laughter] Yes. Wild. Yeah. And 150 million. Uh how big how big is the team? It's like 240 now. 240. Yep. Wow. Well, congratulations. I mean, what what what a remarkable what a remarkable company. Uh very exciting. Yeah.

What what what what is the what is you know, you've been at it now for what over 15 years, something like that. What what is is is uh people ask us all the time what's the future of TVPN and we're like more more of this. Um but I'm but I'm curious is uh what your answer is.

You know I I started this company when I graduated from computer science and I started as a modder like our strategy was not platform when we started. We were basically modders building both the engine and the content ourselves.

And uh we weren't successful like mid 2013 we ran out of money and we had to figure out what to do. And only at that point we pivoted and we've committed to just building the engine and becoming a tools and services company versus building both the mods and the engine to build this.

Um, and I feel very fortunate, you know, waking up in the morning and knowing that there are people like Sandy in San Diego making a living building mods and we're a big part of that and enabling that. I feel like that's a life worth living for. So, what's next is just more of this.

You know, our our target is we want to get to a billion dollar for creators a year, but when we get to that, it's not like the KPI is going to change. It's probably going to be all right, let's do 1. 5 or maybe two or like what how else can we contribute to creators that this is sort of what juices us up in the morning.

This is what we intend to continue doing. It's awesome. Last question because we didn't follow it super closely. What's going on in in Counterstrike World and uh what what's kind of the takeaways there?

I know they they made some changes to their in-game economy and a lot of people were pissed off, but I don't know a lot more than that. Um, so you're right, there's a huge uh skin community around um Cisco Counter-Strike.

Um, I guess the the challenge is and uh we're sometimes seeing this with uh studios, they make their own decisions based on what they think is right and based on what they think is right for the game.

And once they make a change to the economy, obviously a lot of people lose a ton of value from their skins and as a result, they, you know, lose a lot of money. I'd say that in advance uh Valve did not provide any guarantees that you know this is a thing that should happen.

I don't know if they've intended for skin trading to kind of be as big as it was and um you know they make a decision to change and you know sometimes as people creating in the ecosystem or working around the ecosystem were like at the mercy of the IP owners and the end day the IP owners had the right to do that.

I don't know exactly what were the reasons behind the change but those are some pretty smart people. Well, I'm sure they had their good reasons. That makes sense. I'm checking the price of my M4 A4 skin on csgos skins. com. I think I'm down bad. I don't know. But I did buy it% over a decade ago.

And uh it brought me a lot of joy when I played CSGO back in the day. And I haven't logged in in 5 years so or 10 years. So, uh I think that uh I'm happy. I see it as a tip. When I bought it, I saw it as a tip. I was like, "This game's free. I play it a ton. I'm happy to throw some money in.

I understand that people do take it way more seriously. Uh and they even build whole businesses around it. And so, you know, there's a lot that goes on there. But, uh for me, I feel like even if it's worth zero, the memories will stay with me forever of of uh of holding down dust 2 on the B the Bomb [laughter] site.

It's good times. Anyway, thank you so much for coming. Congratulations on all the milestones. Come back on when you hit a billion. We'll talk to you soon. Have a good one. Sounds good. All right. Cheers. Uh, in other news, uh, Numemeral has a. com now. Numero. com sales tax on autopilot.

Spend less than 5 minutes per month on sales tax compliance. We got to hit the gong for numeral. com. That is too good. Also, too good. ESPN Bet is shutting down. ESPN and Pen Entertainment's 10-year, $2 billion deal will end eight years early after the sports book saw lackluster demand.

Uh ESPN is now partnering with DraftKings. The interesting thing here is that everyone draws that Disney that Disney oh Walt Disney drew on the napkin all the different interplay between everything. They didn't include gambling on there cuz Disney was going to get into ESPN bet. That's what happened.

They did update the Disney chart. update the Disney system chart, the ecosystem chart. Uh, and also go to Finn. ai, the number one AI agent for customer service, number one in performance benchmark, number one in competitive bay off, number one ranking on G2. Uh, our next guest is already in the Restream waiting room.

We have Alex Israel from Metropolis with some very good news. Good to see you, Alex. How are you [music] doing? Welcome to the show. Good. Jordy, John, good to see you guys. Thank you so much for hopping on the stream. Um, give us the news.