Chinese Paper Tigers, Habby's Blunder & 4X Eats the World
Habby looked poised to become a top-20 publisher in 2025: a tentpole sequel in Archero 2, a genuine innovation in Capybara Go, and a fascinating dark horse in Wittle Defender. Instead, the pioneer of "hybrid casual" is landing just above replacement, likely negative once UA costs are figured in. Western worry about Eastern development is rational, but often overstated. As with Lilith before them, some of these wunderkind are paper tigers.
While there could be an element of executional risk, overspending on UA and maybe launching before the KPIs justified it, there's a simplier explanation: 4X is eating the world.
Habby's monetization template is still clever. It leans heavily on annuity-style spend, but demand stimulation follows the familiar squad RPG playbook, wrapped in differentiated cores. Archero 2, Capybara Go, and Wittle Defender all sit squarely in the Evo-Fusion-Evolve meta-collection paradigms. Certainly, minigames and tournament live ops have improved with each iteration, but there's no getting around their power-score core.
4X is the most powerful monetization engine mobile has ever produced outside of Match. While power score remains the driving factor, it's wrapped in a socio-competitive economic core. In 4X, competition for power becomes a distributed auction. Kabam once ran a survey of spenders that asked a simple question: Why do you spend? The answer was always the same - for the clan. That dynamic creates effectively infinite sinks. There is, quite literally, a million dollars' worth to spend. (And indeed, an infamous Game of War case of a man embezzling company funds to spend over a million dollars on that game proves it.)
As Gabe Leydon once put it: "A $1,000 dinner bill looks expensive until you realize you're paying for ten people." squad RPG never solved that problem.
The real dagger wasn't just 4X itself, but its absorption of squad RPG. Modern 4X quietly incorporated squad RPG and economy builders into its core faster than squad RPG could ever absorb 4X-level socio-competitive economics. Reed Hastings once asked whether Netflix could become HBO faster than HBO could become Netflix. The same dynamic applies here, and with a clear winner in each case.
We've already seen the wake of the damage with Lilith and Moonton, while Habby appears to be the latest casualty.
As long as 4X can push higher LTVs, it can bid higher on UA. In mobile, whoever wins the auction wins the market.