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Thomas Reiner Profile picture
@treiner5
Sep 25, 2020 • 8 tweets • 2 min read • Read on X
Thoughts on $AMZN launch of Luna cloud gaming:
1/ The $AMZN Luna launch has the potential to be big, especially if they can drive user acquisition through Twitch integration. More likely Luna is a loser in cloud gaming like Stadia because content is king
2/ The winner that combines cloud gaming and content is xCloud/Game Pass. Luna and Stadia have no competitive advantage versus xCloud when content is the most important component to drive users.
3/ We’ve seen a proliferation of cloud gaming services that have the same titles, with the vast majority being sub-AAA quality. MSFT gaming IP + the acquisition of ZeniMax + Azure + the existing Xbox user base = winner.
4/ What can Luna/Stadia do vs Game Pass? They must compete on content, and you have 3 routes: partnerships, in-house or acquisition. $AMZN is going the partnership route partnering with @Ubisoft, but what advantage does that have when Ubisoft can partner with Stadia / $MSFT too?
5/ Luna could go the $NFLX route and create their own studios to develop AAA titles exclusively for the platform, but given complexity/time/cost, it’ll take 2-3 years to develop the first titles and by then the war will be lost.
6/ The only route forward is the acquisition of publishers/studios. If Amazon really wants to compete on gaming they’re going to have to go hunting for the $TTWO / $EA / $ATVI / @EpicGames of the world which is a large check to write.
7/ Without $AMZN or $GOOGL making a big move the inevitable winner in the cloud gaming space is going to be $MSFT.

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More from @treiner5

Thomas Reiner Profile picture
Aug 9, 2022
1/ $RBLX reported Q2 and stock getting hit AH -13% to $41. We saw bookings growth turn back positive in Jun +9% & Jul +10% but EBITDA margin of 8.5% is at a low (last 3 Q2s have been 26%, 34%, 13%). DAU growth and scale is impressive but market not seeing it in financials.
2/ Over 13yo demographic is now 53% of DAUs and growing 30%+. At this point $RBLX has successfully put to bed the argument they can't age up and grow the TAM.
3/ The big issue from the market's perspective is the previously mentioned EBITDA (and FCF) margins. The biggest headwind here is personnel expense which has grown explosively.
Read 5 tweets
Thomas Reiner Profile picture
Aug 9, 2022
1/ Big question for travel stocks is whether strong summer demand can continue into fall or if it's one-time from pent up covid demand. There's a lot of noise but it appears it's more odd seasonality as opposed to consumer weakness. This chart shows YTD air bookings vs 2019. Image
2/ Historically summer demand peaks right around July 4th, you can see this in the web traffic stats for OTAs $ABNB, $EXPE, $BKNG. My sense is that this normal seasonality has been disrupted for a couple reasons. Image
3/ First is that real business travel hasn't really returned to pre-covid levels so the booking curves for airlines like $UAL & $DAL have been extended out further. The result is that GBV peak came in a lot earlier and the post-peak trough comped historically strong periods.
Read 6 tweets
Thomas Reiner Profile picture
Aug 2, 2022
1/ $ABNB printed a beat for Q2. GBV +27% Y/Y, EBITDA of $711m (33.8% margin) and announces a $2bn repurchase authorization but the stock is down 9% AH on a "weak" Q3 guide.
2/ Q3 guide for revs of $2.78-2.88B but what really matters is GBV. Experiences booked guidance of "stable w/ Q2" aka ~25% and ADRs "slightly higher" Y/Y implies GBV approx +27% in Q3 vs street +34% so a miss vs expectations.
3/ Not a lot of room for a miss with an expensive stock. $ABNB is an A+ company but entered earnings at 25x 2023 EV/EBITDA and a 3.6% FCF Yield. Fair value depends on what you think 2023+ will look like for growth and what steady state margins are.
Read 6 tweets
Thomas Reiner Profile picture
Aug 2, 2022
1/ $UBER with a strong report, finally seeing meaningful profitability (and importantly FCF). GBV +33%, EBITDA $364m (4.5% rev margin, 1.3% GBV margin) $382m of FCF, and reaffirm long term ability to hit $5B of EBITDA (with $4B+ of FCF) in 2024
2/ Driver supply has improved, wait times down, % of trips surged also down (and both trending towards pre-covid levels). Doing this while avg driver earning well >$30/hr in the US. This is a sustainably profitable business now.
3/ Delivery business in transition from hyper-growth -> profitability and digesting the "covid bump". $UBER US delivery +21% in Q2 (and active couriers +53% Y/Y playing catch up). Helps that they're seeing a rationalization of the competitive environment. (#RIP 15min delivery)
Read 6 tweets
Thomas Reiner Profile picture
May 4, 2022
A few takeaways from $UBER and $LYFT:

1/ Profitability, FCF, and Margins matter. $LYFT clearly living in 2021 where management thinks growth at the expense of profitability is important. $UBER will see sequentially growing margins, FCF, and profitability throughout 2022.
2/ Network effects matter. $UBER US/Canada Q1 drivers +79% Y/Y (and new drivers +121% in Apr) vs $LYFT +40% in Q1. @dkhos emphasized the earning power and flexibility drivers have with logging onto @Uber and choosing mobility vs delivery.
3/ $UBER driver onboarding focused on reducing friction and time from sign-up to driving (@dkhos emphasized high earning power of drivers and high retention once onboarded). $LYFT approach seems to be broader incentive based.
Read 7 tweets
Thomas Reiner Profile picture
Nov 16, 2021
1/ Incredibly impressed with what @DavidBaszucki & the team at $RBLX presented at their investor day today. The pace of development on the platform is absolutely mind blowing. Some of the things they're working on:
2/ Better engine/tech/tools to help create content for older users @mbronstein
3/ An updated avatar system with full UGC capability, layered clothing, AI reactive movement, and dynamic heads
Read 12 tweets

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