Core Insights - Netflix is shifting its gaming strategy to focus on TV games and has acquired Ready Player Me, an avatar-creation platform, to enhance its gaming experience for subscribers [1][5] - The acquisition aims to allow Netflix users to carry their avatars across different games, enhancing user engagement and personalization [1][5] Acquisition Details - The financial terms of the acquisition were not disclosed, but Ready Player Me had previously raised $72 million from various investors [2] - The team from Ready Player Me, consisting of around 20 members, will join Netflix, including the founders [3] Strategic Shift in Gaming - Netflix's initial gaming strategy involved mobile games, but it is now pivoting towards more interactive and engaging experiences on TV [6][11] - The company has faced mixed results with its gaming strategy, leading to changes in leadership and a focus on different game types, including party games and narrative-driven titles [11][13] Future Plans - Ready Player Me will cease its current services by January 31, 2026, as Netflix integrates its technology [3] - Netflix has plans to release new titles, including a FIFA game in time for the 2026 World Cup, as part of its expanded gaming lineup [14] Interactive Features - Netflix is also exploring interactive features, such as real-time voting for live content, to enhance viewer engagement [15] - This move aligns with trends in the TV industry towards more interactive experiences, although it remains to be seen if Netflix can successfully transition its brand perception from passive viewing to interactive gaming [15]

Financial Data and Key Metrics Changes - Unity exceeded the top end of guidance for revenue by $16 million and adjusted EBITDA by $15 million in Q2 2025 [18][20] - Total revenue for Q2 was $441 million, with adjusted EBITDA at $90 million, representing a 21% margin [19][20] - Free cash flow reached a record $127 million, up $47 million year-over-year [20] Business Line Data and Key Metrics Changes - In the Grow segment, revenue was $287 million, down 4% year-over-year but up 1% sequentially, driven by strong performance from the Unity ad network [18][19] - The Create segment reported revenue of $154 million, up 2% year-over-year and sequentially, with strategic revenue growth at 16% when adjusted for non-strategic revenue [19][20] Market Data and Key Metrics Changes - The Unity ad network now comprises approximately half of total Grow revenue, with expectations for this percentage to continue increasing [6][22] - The company reported significant growth in China, with a $20 million sequential increase in revenue, driven by improvements in both Create and Grow segments [56][57] Company Strategy and Development Direction - Unity is focusing on the full emergence of Unity Vector, which has exceeded expectations and is expected to drive sustainable growth [4][5] - The company is investing in AI capabilities to enhance both the advertising and content creation experiences, with a long-term vision for growth in these areas [10][13] - Partnerships with major companies like Tencent and Scopely are aimed at leveraging Unity's platform for mutual growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing the unique consumer insights gained from Unity's position as the leading game development platform [10][11] - The company anticipates continued improvements in performance and growth driven by AI advancements and the integration of new data capabilities [10][12] Other Important Information - Unity's adjusted gross margins are at 83%, with expectations for further margin expansion as the company scales its operations [23][80] - The Developer Data Framework is set to enhance transparency and control for developers regarding data usage [11][45] Q&A Session Summary Question: Potential to expand Unity ad strength to other products - Management confirmed that Unity Vector is modular and can be applied to improve other ad products [28] Question: Rate of improvement with Vector - Management indicated that Vector is a significant upgrade and will continue to provide performance lifts over time [32] Question: Next steps in the evolution of the product - Management emphasized ongoing improvements and investments in AI to enhance existing capabilities [35] Question: Guidance on Grow revenue - Management clarified that mid-single-digit growth implies strong performance in the Unity ad network, with stabilization in non-Vector parts [46] Question: Growth in China - Management noted that the increase in China revenue is primarily due to improvements in the Create business [56][57] Question: Strategic importance of mediation in ad pricing - Management highlighted the unique position of Unity in the marketplace and the importance of mediation in optimizing ad performance [111]