WEBVTT - Tesla Delivery Numbers Punch Hole In Growth Story 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg PENL podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.680 Along with my co host Lisa Brahma Wicks. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg PENL podcast on Apple 0:00:15.520 --> 0:00:17.960 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:23.239 at Bloomberg dot com. A Tesla stock is down eight 0:00:23.280 --> 0:00:26.160 percent in early trading this morning after reporting a record 0:00:26.200 --> 0:00:29.960 decline in deliveries during the first quarter, stoking concerned that 0:00:30.040 --> 0:00:33.640 demand maybe slackeing for the Model three sedan it introduced 0:00:33.720 --> 0:00:36.480 less than two years ago. To help us in all 0:00:36.560 --> 0:00:40.159 things Tesla, we welcome Liam Denning, Liam's energy, mining and 0:00:40.159 --> 0:00:43.480 commodities columns for Bloomberg Opinion joins us on the phone. 0:00:43.560 --> 0:00:45.960 Leat Liam, Thank you so much for joining us. How 0:00:46.000 --> 0:00:51.400 concerned should investors be should Tesla be about this latest 0:00:51.400 --> 0:00:56.560 delivery shortfall? A very concerned? Uh. I mean, essentially, what 0:00:56.640 --> 0:01:00.600 these numbers do is they blow a hole in the 0:01:00.600 --> 0:01:04.640 growth narrative around the stock. Um One number to keep 0:01:04.640 --> 0:01:06.880 in mind is that the stock was off the last 0:01:06.920 --> 0:01:09.559 time I looked. It was off about eight cent down 0:01:09.560 --> 0:01:12.959 in the kind of two sixties level. Um. That is 0:01:13.000 --> 0:01:15.319 still if you can believe it, more than five thousand 0:01:15.360 --> 0:01:20.639 times gap earnings estimates, this is a stock that needs 0:01:20.720 --> 0:01:24.480 a growth narrative to to stay anywhere near where it's 0:01:24.560 --> 0:01:28.480 valuation is right now. And on what we saw in 0:01:28.520 --> 0:01:32.039 these first quarter sales numbers is you know, if you 0:01:32.080 --> 0:01:35.560 think about Tesla's lineup, you can divide it into two camps. 0:01:36.080 --> 0:01:39.440 The Model three is the growth engine. That's where you know, 0:01:39.480 --> 0:01:43.560 it's a lower priced, lower price model that's meant to 0:01:44.120 --> 0:01:47.480 ramp up volume and bring Tesla towards being more of 0:01:47.520 --> 0:01:52.120 a mass market car maker. Um. The Models F and X, 0:01:52.160 --> 0:01:54.880 the older ones, are the higher price variants. They're kind 0:01:54.880 --> 0:01:58.080 of pools of gross profit margin. Both of them took 0:01:58.080 --> 0:02:01.440 a hit. So the Model three was down about quarter 0:02:01.520 --> 0:02:04.440 on quarter in terms of deliveries, and the Model lesson 0:02:04.600 --> 0:02:07.080 X was down more than a half. How much can 0:02:07.120 --> 0:02:09.839 we just say, well, right now, there are a bunch 0:02:09.840 --> 0:02:13.600 of headwins. You've got the electric vehicle attack subsidy that 0:02:13.760 --> 0:02:16.960 the US had been allowing that they actually pulled back on. 0:02:17.040 --> 0:02:19.520 Then you have the fact that China is having some 0:02:19.680 --> 0:02:23.520 concerns with the US overtrade that that might impede uh 0:02:23.720 --> 0:02:26.480 Tesla's footprint there. I mean, how much how many excuses 0:02:26.520 --> 0:02:30.000 can you make for Tesla that actually ring true to you? 0:02:30.919 --> 0:02:33.359 I mean, there are headwinds, and you know, no one 0:02:33.440 --> 0:02:38.600 should downplay the challenges of trying to trying to you know, 0:02:38.639 --> 0:02:42.560 grow grow the electric vehicle market. UM. I think Tesla's 0:02:42.560 --> 0:02:45.360 problem is a little more structural than that. The problem 0:02:45.440 --> 0:02:49.480 they have is that what they essentially did towards the 0:02:49.560 --> 0:02:54.120 end of was to pull forward UM demand for the 0:02:54.160 --> 0:03:00.280 Model three UM and especially the kind of higher priced verys. 0:03:00.320 --> 0:03:01.800 And you know, one of the things that happened at 0:03:01.800 --> 0:03:04.239 the end of twenty eight teen was that Tesla reported 0:03:05.000 --> 0:03:09.440 UM two consecutive quarters profitable quarters, the first time it's 0:03:09.480 --> 0:03:13.000 ever done that. Not big profits, but profits nonetheless, and 0:03:14.200 --> 0:03:16.160 that was seen by many as as kind of the 0:03:16.160 --> 0:03:20.200 company turning a corner. UM. What we're looking at now 0:03:21.040 --> 0:03:24.920 with the first quarter numbers is I would say, payback 0:03:25.240 --> 0:03:28.680 for that pulling forward of demand, and in some ways, 0:03:29.200 --> 0:03:33.040 while it's clear Q one numbers when they get reported 0:03:33.080 --> 0:03:35.280 in a few weeks time, I'm not going to be good. 0:03:35.560 --> 0:03:38.240 The bigger question is probably what happens in Q two, 0:03:38.720 --> 0:03:44.320 Q three because unless we see volume come back, then 0:03:44.640 --> 0:03:48.200 Tessa's profit and cashlow numbers especially are just not going 0:03:48.240 --> 0:03:51.240 to look good. So, Liam, it's not just production and 0:03:51.320 --> 0:03:55.320 delivery and sales issues that Tesla is facing at the moment. 0:03:55.320 --> 0:03:57.360 There's also something with the SEC. And I know you're 0:03:57.400 --> 0:04:01.640 heading to court later today about the Elon Musk issue 0:04:01.680 --> 0:04:03.320 with the SEC. You can you give us the latest 0:04:03.320 --> 0:04:05.600 on what is going on there and what could the 0:04:05.680 --> 0:04:10.480 judge rule today? Sure? So this goes back to Elon 0:04:10.560 --> 0:04:14.560 Musk's um u tustle with the SEC over his funding 0:04:14.640 --> 0:04:20.080 secured tweet last August. Essentially, he came to a settlement 0:04:20.120 --> 0:04:25.080 with the SEC. The SEC alleges that he violated that 0:04:25.120 --> 0:04:29.000 settlement and basically asked a judge to find Elon Musk 0:04:29.080 --> 0:04:33.919 in contempt um. Both sides filed their respective arguments and 0:04:33.920 --> 0:04:37.080 the judges asked for oral arguments today. That's where I'm 0:04:37.120 --> 0:04:42.239 heading later. It's unclear exactly what will happen this kind 0:04:42.240 --> 0:04:46.640 of ruling. My understanding, it's quite narrowly defined. So my 0:04:46.720 --> 0:04:50.600 guesses we're not going to see anything terribly dramatic today. 0:04:50.640 --> 0:04:55.640 Possibly we might see the judge impose another fine of 0:04:55.720 --> 0:04:59.760 some sort. Essentially, what the judge is going to what 0:04:59.800 --> 0:05:02.560 the CEC wants the judge to do today, it's to 0:05:02.600 --> 0:05:07.039 take some sort of action that will four Cylon Musk 0:05:07.160 --> 0:05:11.239 to to uphold the terms of the settlement. Um. For 0:05:11.360 --> 0:05:16.520 the company, it's an unwelcome distraction. It's possibly damaging for 0:05:16.600 --> 0:05:20.920 the brand who knows UM. But for me it highlights 0:05:20.960 --> 0:05:24.720 just the sort of the chronic problems of governance UM 0:05:24.760 --> 0:05:29.040 at Tesla. Just quickly here, I'm wondering why you think 0:05:29.080 --> 0:05:31.559 the shares aren't down more because you started out saying 0:05:32.000 --> 0:05:37.000 that there's still a five thousand at times profitability kind 0:05:37.040 --> 0:05:40.880 of baked into valuation, bagged into the stocks right now. 0:05:40.960 --> 0:05:44.000 So why haven't we seen a bigger fall? Well, I 0:05:44.040 --> 0:05:48.160 think you know, partly it's because Tesla has in the 0:05:48.200 --> 0:05:53.039 past shrugged off UM bad news. Remember, this is a 0:05:53.080 --> 0:05:57.520 stock where the value is largely predicated on people's long 0:05:57.640 --> 0:06:02.920 term views. Their faith in the gene is Elon Musk, etcetera, etcetera. 0:06:03.279 --> 0:06:06.880 So one set of historical numbers taken on its own 0:06:07.000 --> 0:06:11.440 tends not to shake UH kind of core faith in 0:06:11.520 --> 0:06:14.160 the stock. However, as we look forward, I think what 0:06:14.200 --> 0:06:17.880 people may be waiting for at least some members of 0:06:17.960 --> 0:06:21.400 the shareholder base. Maybe waiting for is the actual accounts 0:06:21.440 --> 0:06:24.080 when they come out, you know, in a few weeks time. 0:06:24.680 --> 0:06:28.760 And I'm waiting to see what these bad sales numbers mean, 0:06:29.080 --> 0:06:32.040 really mean for profits, cash flow, that sort of thing. 0:06:32.200 --> 0:06:34.480 Liam Denning, thank you so much for being with us. 0:06:34.480 --> 0:06:37.240 Liam Dunning is the energy, mining and commodities calumnists for 0:06:37.240 --> 0:06:40.880 Bloomberg Opinion, talking about Tesla and how the numbers just 0:06:40.920 --> 0:06:54.880 don't matter for some people. It's all about face. Well, 0:06:54.960 --> 0:06:58.320 I am sitting here watching Paul Sweeney reading Chicken Soup 0:06:58.480 --> 0:07:02.520 for his Soul, trying to find some sort of elixir 0:07:02.680 --> 0:07:05.560 to the daily grind that I put him through. So 0:07:05.600 --> 0:07:07.520 I think we'll have to talk about that, and we'll 0:07:07.520 --> 0:07:09.560 have to talk about that with someone who knows better 0:07:09.600 --> 0:07:12.160 than I about Chicken Soup for the Soul, and that 0:07:12.280 --> 0:07:15.360 is Bill Rohanna, Chairman and chief executive officer of Chicken 0:07:15.360 --> 0:07:18.200 Soup for the Soul Entertainment. He joins us here in 0:07:18.240 --> 0:07:21.400 our Bloomberg Interactive Brokers Studios. Bill, we're here to talk 0:07:21.440 --> 0:07:23.960 about Chicken Soup for the Soul, but in particular the 0:07:24.000 --> 0:07:27.240 new venture with Sony Pictures, which is sort of an 0:07:27.240 --> 0:07:33.480 interesting play on the new media business model. Please explain. So, 0:07:33.880 --> 0:07:36.960 first of all, good morning, and second second of all, 0:07:37.920 --> 0:07:41.000 our joint venture with Sony it's called Crackle plus uh 0:07:41.520 --> 0:07:44.920 is an online network that's a supported So you you 0:07:44.960 --> 0:07:48.160 may have heard this phrase a VOD which is different 0:07:48.200 --> 0:07:51.920 than SVOD, which is subscription video on demand, and a 0:07:52.080 --> 0:07:54.400 VOD is now sort of I love that Paul is 0:07:54.440 --> 0:07:56.880 nodding along and a VOD and spot mean nothing to 0:07:56.920 --> 0:07:59.440 me but go on, And actually that's that's part of 0:07:59.440 --> 0:08:01.560 the issue and and also part of the opportunity. The 0:08:01.600 --> 0:08:04.600 fact is that the a VOD space, the ad supported 0:08:04.680 --> 0:08:07.160 video on demand spaces, expected to double in the next 0:08:07.200 --> 0:08:10.120 five years. We think that's a big opportunity. We know 0:08:10.240 --> 0:08:12.880 that people have taken and put a lot of resources 0:08:12.880 --> 0:08:15.880 into competing in subscription video. You have Netflix, and you 0:08:16.000 --> 0:08:19.040 have Disney and all those big players who are spending 0:08:19.040 --> 0:08:21.760 a ton of money to compete there. We think they're 0:08:21.800 --> 0:08:24.800 ignoring add supported video on demand, and we don't expect 0:08:24.800 --> 0:08:28.400 people to ignore free video that they can get and 0:08:28.440 --> 0:08:30.760 not pay for and can satisfy their needs. So we're 0:08:30.800 --> 0:08:32.800 building a big business around that. So give us a 0:08:32.840 --> 0:08:35.760 sense of that advertising video on demand market today. You know, 0:08:35.840 --> 0:08:38.360 what's the size of it? Who are the players? Is 0:08:38.400 --> 0:08:41.360 it growing? How big is it? Yeah? So today it's 0:08:41.440 --> 0:08:44.280 it's said to be about fourteen or fifteen billion dollars 0:08:44.280 --> 0:08:46.280 a year, which is not a very big market, and 0:08:46.320 --> 0:08:48.600 as I said, it's expected to more than double over 0:08:48.600 --> 0:08:51.560 the next five years. I mean, we are now one 0:08:51.600 --> 0:08:54.080 of the biggest players with Crackle plus, we may actually 0:08:54.120 --> 0:08:56.160 be the biggest player. It's a little hard to tell, 0:08:56.200 --> 0:08:59.240 you know, as as in many cases with new industries, 0:08:59.280 --> 0:09:02.800 the numbers are sort of coming together. The statistics are 0:09:02.840 --> 0:09:06.360 being defined in terms of monthly active users, which seems 0:09:06.400 --> 0:09:09.280 to be a very critical statistic to people. We are 0:09:09.320 --> 0:09:12.320 at least as big as anybody else. The other big 0:09:12.320 --> 0:09:16.600 players are Pluto TV to be UM and of course 0:09:16.679 --> 0:09:19.440 Amazon is moving into this space like they apparently are 0:09:19.480 --> 0:09:23.720 moving into everything, so so so they're going to be 0:09:23.760 --> 0:09:26.240 a certainly a big player. Can you just tell us 0:09:26.440 --> 0:09:30.840 Chicken Soup for the Soul entertainment? Which shows are on that? Okay, 0:09:30.840 --> 0:09:33.200 so Chicken Soup for the Soul Entertainment has a few parts. 0:09:33.240 --> 0:09:35.280 One part is the part we're talking about right now. 0:09:35.320 --> 0:09:38.760 Our online Network part. But we also have a Chicken 0:09:38.760 --> 0:09:41.920 Soup for the Soul Originals production series, which has eleven 0:09:42.320 --> 0:09:44.920 series that we've produced over the years. Chicken Soup for 0:09:44.960 --> 0:09:47.640 the Soul's Hidden Heroes has been on CBS and the 0:09:47.720 --> 0:09:50.560 c W and it was just nominated for an Emmy Award, 0:09:50.600 --> 0:09:54.440 which we're very proud of for Outstanding Family Series. But 0:09:54.520 --> 0:09:57.000 we also have series such as Chicken Soup for the 0:09:57.040 --> 0:09:59.920 Soul's Animal Tails, which is on the c W. We've 0:10:00.040 --> 0:10:03.400 on things called Project Dad which was on TLC and 0:10:03.640 --> 0:10:06.960 Discovery Life. We've done a whole series of series. So, 0:10:06.960 --> 0:10:10.679 but how much of this would go on the Did 0:10:10.679 --> 0:10:14.079 I do that right? Yeah? You got it right. Um. So, 0:10:14.160 --> 0:10:17.200 our strategy from the very beginning, Lisa, was to build 0:10:18.040 --> 0:10:21.880 the capability to make content profitably with the idea that 0:10:21.920 --> 0:10:24.600 we would retain rights to go on to our own networks. 0:10:24.640 --> 0:10:28.120 Because in the network business and the AVON and SVAD business, 0:10:28.120 --> 0:10:31.119 there are two costs that matter, marketing to new customers 0:10:31.240 --> 0:10:33.920 and the cost of content, and so our strategy from 0:10:33.960 --> 0:10:35.880 the beginning has been to try to get an advantage 0:10:35.880 --> 0:10:38.800 in both those places. We've gotten the advantage in the 0:10:38.840 --> 0:10:42.000 marketing side by building followers and brands, and we now 0:10:42.040 --> 0:10:45.240 have about ten million followers on our social media that's 0:10:45.320 --> 0:10:47.520 up from one million when we started. And on the 0:10:47.559 --> 0:10:51.080 content side, we've built a capability to make our own 0:10:51.120 --> 0:10:54.480 series as well as to buy other people's television and 0:10:54.520 --> 0:10:57.240 film and we redistribute that. So we've done that in 0:10:57.240 --> 0:10:59.400 a couple of ways. All right. So when we talk 0:10:59.440 --> 0:11:02.480 about these programming services, it's all about programming. And we 0:11:02.520 --> 0:11:05.960 see Netflix going to spend twelve or fifteen billion dollars 0:11:06.000 --> 0:11:08.600 in HBO with its three, four or five billion dollars, 0:11:09.400 --> 0:11:12.240 what is presumably Sony is bringing programming to the table. 0:11:12.320 --> 0:11:14.480 So what are you expecting from Sony in this joint venture. 0:11:15.320 --> 0:11:17.960 We're getting a lot of things from Sony because they, 0:11:18.240 --> 0:11:21.040 like us, see a big opportunity to build a major 0:11:21.120 --> 0:11:25.720 network that's ads supported. So we're getting access to their content. 0:11:25.800 --> 0:11:29.640 As you said, we're also getting shared technology because they 0:11:29.640 --> 0:11:32.079 have a variety of networks that have the same kind 0:11:32.080 --> 0:11:35.480 of technology needs and that's lowering our technology costs. And 0:11:35.480 --> 0:11:38.200 we're getting this very large and robust network to start with. 0:11:38.400 --> 0:11:42.280 Is there any pushback from advertisers in how you calculate 0:11:42.400 --> 0:11:46.720 views and there the efficacy of the video ads, you know, 0:11:47.280 --> 0:11:49.680 not for us, but because we use third parties to 0:11:49.800 --> 0:11:53.000 confirm exactly what it is that advertisers are getting, so 0:11:53.120 --> 0:11:55.839 they don't have to count on us counting. They It's 0:11:55.920 --> 0:11:58.720 unlike Facebook, who does their own counting. We actually use 0:11:58.800 --> 0:12:00.800 third parties to count for us, and they report to 0:12:00.800 --> 0:12:02.960 the advertising I mean, I guess how sustainable is the 0:12:03.000 --> 0:12:05.959 ad supported video model. I think it's enormous. I think 0:12:06.000 --> 0:12:08.400 it's going to be a very important part of the future. 0:12:08.400 --> 0:12:11.439 I don't expect people to go exclusively to subscriptions. It 0:12:11.880 --> 0:12:14.280 seems like it's too many. You know, there's a kind 0:12:14.280 --> 0:12:17.160 of a subscription fatigue already, and we're in the early 0:12:17.280 --> 0:12:20.120 stages of the development. I really expect the world to 0:12:20.120 --> 0:12:25.520 be about fifty AD supported subscriber supported. If that turns 0:12:25.520 --> 0:12:27.840 out to be right, then the market is enormous. Supper 0:12:27.880 --> 0:12:32.000 at Support interesting Bill Rohans, chairman CEO of Chicken Soup 0:12:32.040 --> 0:12:34.880 for the Soul Entertainment, joining us in our Bloomberg Interactive 0:12:34.880 --> 0:12:44.600 Broker studio. Bill, thanks so much for joining us. We 0:12:44.640 --> 0:12:48.520 are going to talk to a female juggernaut in the 0:12:48.600 --> 0:12:51.080 gaming industry, and we are so lucky to bring in 0:12:51.160 --> 0:12:55.679 Kate Gorman founder, chief executive and president for for Mason Games, 0:12:55.720 --> 0:12:59.520 based in San Francisco. Uh So, Kate, let's start with 0:12:59.600 --> 0:13:04.000 the fact that when I saw scratch off lottery tickets online, 0:13:04.120 --> 0:13:07.400 I thought, oh, that could really be sort of a 0:13:07.480 --> 0:13:09.880 lead in for some kind of addiction. But this is 0:13:09.960 --> 0:13:14.280 sort of the opposite, right, absolutely, Thanks for having me, Lisa. 0:13:14.600 --> 0:13:16.960 So what we have done at Fort Mason Games is 0:13:17.000 --> 0:13:20.320 we've created a free app that's disrupting the lottery. And 0:13:20.360 --> 0:13:24.520 so Americans spend you know, seventy seven billion dollars in 0:13:24.559 --> 0:13:27.840 Cisco on the lottery and a lot of that is 0:13:27.840 --> 0:13:30.280 in scratch off tickets. And so what we did was 0:13:30.320 --> 0:13:32.880 we created a free app that's free to play, free 0:13:32.880 --> 0:13:35.640 to enter sweepstakes, and you can win money by scratching 0:13:35.640 --> 0:13:39.920 off virtual lottery tickets or virtual scratch cards. And it's 0:13:39.960 --> 0:13:42.800 all AD supported. So we're really thinking about, let's not 0:13:43.200 --> 0:13:45.720 let people go and gamble. We'd rather have you play 0:13:45.720 --> 0:13:49.800 a fun game like experience on your phone while you're 0:13:49.800 --> 0:13:52.680 waiting for the bus or you know, intermittently throughout your 0:13:52.760 --> 0:13:56.200 daily life. So, Kate at Fort Mason Games and the 0:13:56.240 --> 0:13:59.920 company's focused on developing games that are catered towards women 0:14:00.080 --> 0:14:03.040 give us a sense of the gaming market today, what's 0:14:03.080 --> 0:14:07.719 the mix between men and women gamers? Absolutely so for 0:14:07.920 --> 0:14:10.960 Mason Games, we make games for everyone, but particularly with 0:14:10.960 --> 0:14:13.560 women in minds and for me personally, that means that 0:14:13.600 --> 0:14:17.440 women are thought about in the design process and portrayed 0:14:17.480 --> 0:14:21.760 respectively throughout the gameplay. And so Google did a survey 0:14:21.800 --> 0:14:25.280 that says of women in the US are playing mobile 0:14:25.280 --> 0:14:28.160 games today and I expect that only to grow more 0:14:28.840 --> 0:14:32.720 as our mobile devices become more prevalent and powerful than ever. 0:14:33.120 --> 0:14:37.080 And so we're really incorporating gaming and entertainment into our 0:14:37.120 --> 0:14:41.320 life throughout the day rather than just having shorter experiences 0:14:41.360 --> 0:14:45.800 once a day. And so with that comes more variety 0:14:45.840 --> 0:14:50.360 and diversity of players, especially women. What is female gaming 0:14:50.480 --> 0:14:55.160 versus male gaming? You know, there's not a stereotypical difference, 0:14:55.160 --> 0:14:58.440 but what I think that means is broadening our concept 0:14:58.480 --> 0:15:01.880 of what is a game. And people are having different 0:15:01.880 --> 0:15:06.200 types of entertainment, and they're looking for entertainment and these 0:15:06.240 --> 0:15:09.960 little dopamine hits throughout their day instead of just sitting 0:15:09.960 --> 0:15:12.960 down with a gaming console. So as we're seeing mobile 0:15:13.000 --> 0:15:17.680 devices and streaming expand we're seeing different types of games 0:15:17.720 --> 0:15:20.040 and those are bringing different players, and so there's really 0:15:20.080 --> 0:15:24.480 no male female gaming. It's just our concept of gaming 0:15:24.480 --> 0:15:27.920 and entertainment is expanding. Okay, what are some of the 0:15:28.000 --> 0:15:32.520 current trends in gaming right now? Absolutely? So, we're seeing 0:15:32.600 --> 0:15:35.320 a lot of really interesting trends in the gaming market. 0:15:35.680 --> 0:15:38.720 We saw Stadia by Google released, which is a fully 0:15:38.800 --> 0:15:43.160 streaming service that will use kind of these lower end 0:15:43.200 --> 0:15:47.840 devices to allow players to stream games over high quality 0:15:47.880 --> 0:15:51.560 Internet connections and using the cloud compute power to drive that. 0:15:52.320 --> 0:15:53.640 And then on the other side of it, we're seeing 0:15:53.720 --> 0:15:56.880 kind of these casual gameplay with Apple Arcade, and that's 0:15:56.880 --> 0:15:59.800 a subscription model. It will allow you to play offline, 0:16:00.280 --> 0:16:02.600 and so that's really great for trying lots of different 0:16:02.600 --> 0:16:06.280 types of casual games that you may not be interested 0:16:06.320 --> 0:16:09.800 in paying for upfront um. But altogether it creates a 0:16:09.800 --> 0:16:13.240 really interesting ecosystem of a wide variety of different types 0:16:13.280 --> 0:16:15.560 of games coming to the market. So, okay, I want 0:16:15.560 --> 0:16:17.240 to go full circle with you and go back to 0:16:17.520 --> 0:16:22.160 this digital scratch off lottery ticket model because it actually 0:16:22.240 --> 0:16:26.840 raises some interesting ideas about what advertising could look like. 0:16:26.920 --> 0:16:29.720 The idea that people get that dopamine rush, as you 0:16:29.720 --> 0:16:33.880 were talking about with the scratch off online for free 0:16:33.920 --> 0:16:36.120 without having to gamble their own money, and then they 0:16:36.160 --> 0:16:41.120 get actual prizes, presumably by retailers or other outlets that 0:16:41.280 --> 0:16:44.200 want to advertise I want to show off what they 0:16:44.200 --> 0:16:46.920 have to offer. How big of a business is that 0:16:47.040 --> 0:16:51.040 right now and how much do you see it potentially growing? Well, 0:16:51.080 --> 0:16:53.200 we can't speak to the size of the market because 0:16:53.240 --> 0:16:54.880 we're really one of the first in it, and so 0:16:54.920 --> 0:16:59.160 we're really growing it. It's us, but just since January 0:16:59.200 --> 0:17:02.000 we've seen our players scratch off over six point five 0:17:02.040 --> 0:17:06.120 million virtual scratchers and so there's a huge market for this. 0:17:06.440 --> 0:17:09.520 We're still growing really rapidly. But it's a really interesting 0:17:09.560 --> 0:17:13.160 and innovative way to disrupt a market, which is giveaway 0:17:13.200 --> 0:17:15.640 something for free and monetize it with ads. And we've 0:17:15.680 --> 0:17:18.720 seen this in many other markets historically, and so the 0:17:18.800 --> 0:17:22.640 lottery is one that, um it seems difficult to disrupt 0:17:22.800 --> 0:17:27.600 because it's a physical piece of paper. But rethinking that model, UM, 0:17:27.680 --> 0:17:32.960 I think it's it's hard to say what the actual uh, 0:17:33.000 --> 0:17:35.640 you know, eclipse of the market would be. Right. So, 0:17:35.880 --> 0:17:39.920 just lastly, Kate, when you think about women as gamers, 0:17:40.040 --> 0:17:45.920 is there any genre that's been particularly successful for women. Absolutely. 0:17:45.960 --> 0:17:49.119 I think the casual market and they think of the 0:17:49.119 --> 0:17:51.640 games like Candy Crush, or we make a social casino 0:17:51.720 --> 0:17:55.440 game called Confetti Casino, which is really geared towards women 0:17:55.480 --> 0:17:59.320 to have a party like environment, no gambling any place, lots, 0:17:59.400 --> 0:18:02.680 and so we see over seventy percent of our players 0:18:02.680 --> 0:18:05.360 are female. And so I think that we see these 0:18:05.400 --> 0:18:09.239 more casual fun games with lighthearted themes that are more 0:18:09.280 --> 0:18:12.240 targeted to women, are respectful to women, are really resonating 0:18:12.240 --> 0:18:15.840 with women, but ultimately they're also playing all sorts of 0:18:15.880 --> 0:18:19.480 other games too. Kate Gorman, thank you so much. Kate 0:18:19.600 --> 0:18:22.760 is founder, chief executive officer, and president of Fort Mason Games, 0:18:22.800 --> 0:18:26.200 based in San Francisco, talking about the gaming business, the 0:18:26.240 --> 0:18:30.240 mobile gaming business, trends in that business, UH, and how 0:18:30.520 --> 0:18:35.840 game programmers and game creators are targeting women, which has 0:18:35.880 --> 0:18:39.040 historically been arguably a little bit underserved in some of 0:18:39.080 --> 0:18:41.119 the content. I don't think they're innatially playing Call to 0:18:41.359 --> 0:18:44.840 Duty all the time, but clearly they are a major 0:18:45.720 --> 0:18:48.720 as a representative of the female agenda. I will say, 0:18:49.040 --> 0:18:51.560 not really not playing called the right, but clearly a 0:18:51.560 --> 0:19:04.479 big segment. Well. The Wall Street Journal recently ran an 0:19:04.560 --> 0:19:08.320 article about how fewer men are buying suits as casual 0:19:08.400 --> 0:19:11.959 dress codes in the workplace become more widespread. To get 0:19:12.000 --> 0:19:14.359 a sense of how widespread, we welcome our next guest, 0:19:14.680 --> 0:19:18.600 James Fallon. James, editorial director for Women's Where Daily. He 0:19:18.720 --> 0:19:22.640 joins us here in our Bloomberg Interactive Brokers studio. Both 0:19:22.680 --> 0:19:24.520 of the men that I'm sitting with right now have 0:19:24.640 --> 0:19:27.480 suits on carry on carry on and I have the 0:19:27.520 --> 0:19:32.680 tie so going full but no trousers. So, James, I mean, 0:19:33.359 --> 0:19:35.480 how big of an issue Is this a trend or 0:19:35.560 --> 0:19:39.399 is this a blip? Are men actually buying fewer suits? Oh? 0:19:39.480 --> 0:19:42.199 Man have been buying fewer suits for ever since casual 0:19:42.280 --> 0:19:45.960 Friday started, So it just depends upon what industry you're 0:19:45.960 --> 0:19:48.880 in and what category you're looking at. So I mean 0:19:48.880 --> 0:19:52.640 the Goldman Sacks changing its policy towards suits and allowing 0:19:53.119 --> 0:19:56.480 the bankers when they're not meeting clients not not to 0:19:56.520 --> 0:19:58.440 have to wear a suit is really what spurred the 0:19:58.520 --> 0:20:02.000 latest reports. But Goldman was actually the last of the 0:20:02.040 --> 0:20:04.640 banks to allow that. And I mean I knew bankers 0:20:04.680 --> 0:20:07.040 in London in the nineties who were allowed to wear 0:20:07.160 --> 0:20:10.040 more casual clothes when they weren't meeting clients. But if 0:20:10.040 --> 0:20:12.959 they're meeting clients, they have to put a suit on. Um. 0:20:13.000 --> 0:20:14.680 I don't think we're ever going to see the suit 0:20:14.800 --> 0:20:17.960 disappear in you know, law, law offices or those kinds 0:20:17.960 --> 0:20:23.840 of places, the more traditional um professions. But I mean 0:20:24.560 --> 0:20:27.320 it is becoming more casual. Men are wearing suits without 0:20:27.400 --> 0:20:32.080 ties as I am. Um, sometimes with sneakers and so forth. 0:20:32.320 --> 0:20:35.399 So definitely, but not full ath leisure. Yet that's just 0:20:35.480 --> 0:20:38.600 left for the women. Yes, for them. Well, again, it 0:20:38.680 --> 0:20:41.960 depends upon the profession. I mean it's probably in Silicon 0:20:42.040 --> 0:20:45.160 Valley it's much more casual. UM. So, yes, I don't 0:20:45.200 --> 0:20:47.440 I don't think men, thank god, aren't going to work 0:20:47.520 --> 0:20:52.520 in leggings. Let us hope, although hey, if it flows 0:20:52.520 --> 0:20:55.480 your boat. I honestly, though, I am wondering how retailers 0:20:55.480 --> 0:21:00.000 are adapting to this shift towards something more casual. Basically, 0:21:00.359 --> 0:21:03.960 I mean you're you're obviously in a lot of different ways. 0:21:04.040 --> 0:21:06.600 I mean, start with the shoe department. You're seeing them 0:21:06.760 --> 0:21:09.240 carry a lot more sneakers and that kind of thing. 0:21:09.640 --> 0:21:12.200 Then you're seeing them introduce a lot more casual wear 0:21:12.320 --> 0:21:15.880 and not shrink their suit departments. But perhaps de emphasized 0:21:15.920 --> 0:21:20.000 their suit departments. But even coming here, we passed Paul Stewart, 0:21:20.119 --> 0:21:24.040 we passed Brooks Brothers, we passed Joseph A. Banks. They 0:21:24.080 --> 0:21:27.840 all had suits in the window. Um. So it's still 0:21:27.960 --> 0:21:31.440 something that you are walking in Midtown where you basically 0:21:31.880 --> 0:21:34.639 many wall streets. So I mean it's it's a select group. 0:21:34.720 --> 0:21:37.560 I mean, it's a very small sample. I understand that. 0:21:37.720 --> 0:21:39.800 But it's also the margins are higher on suits than 0:21:39.840 --> 0:21:42.760 on things. But also men buy casual clothes more than 0:21:42.800 --> 0:21:45.800 they buy suits. It's interesting, James. I mean, I'm just 0:21:45.840 --> 0:21:49.720 thinking about where a lot of college graduates are are 0:21:49.760 --> 0:21:52.320 are going once they graduate, and it seems like more 0:21:52.320 --> 0:21:56.440 and more are going towards technology. Um, you know, I'm 0:21:56.480 --> 0:21:59.199 just thinking about, like where my kids are thinking about it. 0:21:59.200 --> 0:22:02.320 It's this technolo alogy go West, and there is almost 0:22:02.520 --> 0:22:05.960 no suit culture out west. It is extraordinary, isn't It 0:22:06.440 --> 0:22:10.560 is extraordinary? But I mean, take look at the irony 0:22:10.600 --> 0:22:13.679 of the Apple News announcement last last week or the 0:22:13.720 --> 0:22:18.520 week before. All the tech guys weren't in suits. Steven Spielberg, 0:22:18.640 --> 0:22:22.520 Steve Correll, all the male guys, Hollywood people, they were 0:22:22.520 --> 0:22:25.600 in suits. I mean they were wearing suits. Um My 0:22:25.720 --> 0:22:29.400 eldest son works in tech. He works from home most 0:22:29.440 --> 0:22:31.680 of the time. If he meets a client, he has 0:22:31.720 --> 0:22:35.160 to wear a suit. So again it depends. I thought 0:22:35.200 --> 0:22:36.600 he was going to say that he sits there in 0:22:36.640 --> 0:22:39.840 a suit and tie and his desk feeling professional. I 0:22:40.040 --> 0:22:44.360 do have to wonder with with respect to style going forward, 0:22:45.160 --> 0:22:48.480 is there a sense of what is appropriate if it's 0:22:48.520 --> 0:22:50.680 not a suit, right, I mean it's sort of they're 0:22:50.720 --> 0:22:54.320 sort of a uniform that's you know, maybe a hoodie 0:22:54.320 --> 0:22:57.200 on Silicon Valley, But what's the uniform for business casual? 0:22:57.280 --> 0:23:00.800 Which is absolutely confessed they went through They went through 0:23:00.800 --> 0:23:04.320 that terror with on casual fridays where you know endless 0:23:04.359 --> 0:23:11.840 golf shirts and um Khaki's Uh. I think it's it's because, um, 0:23:11.880 --> 0:23:16.719 it's because I mean I uh was okay, slightly different example, 0:23:16.800 --> 0:23:19.720 but looking globally. I was in Tokyo last month. We 0:23:19.760 --> 0:23:22.800 had a we had an event there. Um. I went 0:23:22.840 --> 0:23:26.280 to a luncheon with the head of Fast Retailing. It 0:23:26.359 --> 0:23:28.439 was off the record, so I was told that the 0:23:29.440 --> 0:23:32.200