Latest / The Nation Podcasts / Saudi Arabia is Using Games to Improve Its Image w/ Nathan Grayson | Tech Won't Save Us

Transcript

Saudi Arabia is Using Games to Improve Its Image w/ Nathan Grayson | Tech Won't Save Us · The Nation Podcasts

• 0:00
  [SPEAKER_01]: So that's the kind of people that we're working with and that they are making millions and millions and yet still there is this hunger for additional wealth that the Saudi government is extremely willing to prey on for these people money is all the talks and so it's working.
• 0:31
  [SPEAKER_00]: Hello and welcome to TechOneSite, let's make a partnership with the nation magazine.
• 0:34
  [SPEAKER_00]: I'm your host, Paris Marks, and this is my guest, is Nathan Grayson.
• 0:37
  [SPEAKER_00]: Nathan is a co-founder of Aftermath, a great video games and culture news website, and is the author of Stream Big, the triumphs and turmoil's of Twitch, and the stars behind the screen.
• 0:47
  [SPEAKER_00]: Now, if you're a regular listener of the show, you might remember that Nathan was on the show rather recently, you know, a few months ago, where we talked about Microsoft and what has been happening with that company and its video games division in particular.
• 0:59
  [SPEAKER_00]: But after the recent acquisition or, you know, the planned acquisition of electronic arts, a major video games publisher,
• 1:07
  [SPEAKER_00]: by Saudi Arabia's public investment fund and some other investors, I thought we need to talk about this because to me this seemed like a huge deal having Saudi Arabia through its public investment fund basically moved in by this massive video games company.
• 1:20
  [SPEAKER_00]: That's huge for culture for the video games industry itself.
• 1:25
  [SPEAKER_00]: And you know, a lot of people do play video games at the end of the day.
• 1:29
  [SPEAKER_00]: and seeing this reprehensible country is growing influence in video games, not to mention many other forms of entertainment and culture as we talk about in this episode, it's really worrying to see that, right?
• 1:42
  [SPEAKER_00]: You know, obviously Saudi Arabia has a lot of oil money, it's trying to diversify its economy and its investments because it recognizes that at some point, hopefully we would assume because of climate change.
• 1:54
  [SPEAKER_00]: oil and gas is going to have to get phased out and it's going to make a lot less money from that that you know it's trying to make sure that its money is in many different places but it also has this terrible reputation to try to clean up and entertainment immediate is a great place to try to do that through as we have successfully seen it doing now for a number of years and this just seems like an extension of what it's been going on there.
• 2:15
  [SPEAKER_00]: But it also signals quite a bit about the video games industry itself, you know, where it finds itself, what these companies are doing at this moment, and, you know, the difficulties that they face moving forward, especially because of the business decisions that companies like electronic arts are making that are eroding the ability to turn out interesting new experiences in favor of what is going to make the most money in the shortest amount of time.
• 2:41
  [SPEAKER_00]: So basically what I'm saying is there are many reasons for us to have this conversation and I think it's a really interesting one that I hope you're going to enjoy.
• 2:48
  [SPEAKER_00]: And then of course part of my motivation for having Nathan on now as well is that after math the video game website that he co-founded is basically doing a two-year relaunch this week and
• 3:00
  [SPEAKER_00]: I wanted to make sure that you knew about that and so that you could go over and check it out and see what they're up to because I think that they're doing some really cool work over there and you know that if you're listening to the show you might enjoy what they are doing as well.
• 3:13
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• 3:15
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• 3:22
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• 3:25
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• 3:32
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• 3:34
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• 3:51
  [SPEAKER_00]: Thanks so much and enjoy this week's conversation.
• 3:54
  [SPEAKER_00]: Nathan, welcome back to Tech won't save us.
• 3:56
  [SPEAKER_00]: Thank you for having me.
• 3:57
  [SPEAKER_00]: Absolutely.
• 3:57
  [SPEAKER_00]: Great to have you back on a show.
• 3:58
  [SPEAKER_00]: You know, you were on the show not too long ago.
• 4:00
  [SPEAKER_00]: I feel like maybe a few months ago, you know, to talk about what was going on with Microsoft, things going on in the games industry, but you know, there are always big developments here.
• 4:09
  [SPEAKER_00]: And I feel like one of the things that
• 4:10
  [SPEAKER_00]: A lot of people, even if they don't pay too much attention to games, probably picked up on recently, was this massive acquisition by Saudi Arabia's public investment funder, along with some other investors that include Trump's son-in-law Jared Kushner or some firm that he's associated with.
• 4:27
  [SPEAKER_00]: To basically buy this massive video games company, electronic arts.
• 4:31
  [SPEAKER_00]: What is going on there?
• 4:33
  [SPEAKER_00]: How did something like that come about?
• 4:35
  [SPEAKER_01]: Basically, what's been happening in the past handful of years The Saudi government has become extremely involved in video games as part of a broader effort that I think a lot of people have termed sportswashing Which you know began obviously more in the sports world with the Saudi government Investing in or buying up large swaths of many different sports which include everything from Call to even if you consider to sport with the WWE just per wrestling
• 5:00
  [SPEAKER_01]: in an effort to kind of launder their reputation, the Saudi government has numerous human rights abuses basically working against it, and to the idea here is okay, well, let's take a bunch of properties and things that people know, and sort of put our money behind them so that people instead associate us with that, as opposed to, you know, for example, extra judicial killings, the murder of a journalist, all of these sorts of things.
• 5:25
  [SPEAKER_01]: but have happened even in the recent past and so what's happening with EA is an extension of what they've already doing with other video game properties.
• 5:33
  [SPEAKER_01]: We're basically, you know, the Saudi government through their public investment fund and through an arm called savvy games has done a lot within the world of e-sports.
• 5:42
  [SPEAKER_01]: They have something called the e-sports world cup.
• 5:44
  [SPEAKER_01]: It happens in a re-od every year where they both like, you know, have people compete in various games, you know, teams, win millions of dollars and so on.
• 5:51
  [SPEAKER_01]: And they also host like a conference there too that attracts a bunch of big names in the video game world.
• 5:56
  [SPEAKER_01]: They're keynote speaker was Hideo Kojima, creator of Metal Gear Solid and Death Stranding.
• 6:01
  [SPEAKER_01]: So they've been building this in like this for a while.
• 6:03
  [SPEAKER_01]: They have some investments in companies like I believe Ubisoft.
• 6:07
  [SPEAKER_01]: But this is far in a way they're biggest move in this area because they are part of now consortium that includes, as you said, Jared Kushner's investment firm, but also like their own, again, the Saudi government to buy electronic arts, $55 billion, which immediately makes it look the second biggest video game company purchase ever behind Microsoft buying activation for $78 billion.
• 6:29
  [SPEAKER_01]: And yeah, I mean, it seems like this is another instance of them saying, yeah, we want to move further into this entertainment medium where we've had a degree of success and influence people.
• 6:41
  [SPEAKER_00]: Yeah, and we know how well those massive acquisitions tend to pay off, right?
• 6:45
  [SPEAKER_00]: As we've seen with Microsoft and as we talked about before, and we'll pick up on a bit of that again later in this conversation.
• 6:52
  [SPEAKER_00]: But before we kind of dig into the deal a bit further, you mentioned how Saudi Arabia has been basically buying its way into all of these different, you know, whether it's games, whether it's sports and what have you.
• 7:03
  [SPEAKER_00]: I'm assuming I haven't looked it up, but I'm assuming that really like picks up after the reputational damage of butchering a journalist, Jamal Khashoggi.
• 7:13
  [SPEAKER_00]: and how all these governments, all these companies didn't want to work with Saudi Arabia afterward.
• 7:18
  [SPEAKER_00]: And I would have to imagine that all they're spending really like ramps up after that.
• 7:23
  [SPEAKER_00]: That'd be a good guess.
• 7:24
  [SPEAKER_01]: Yeah, I mean, the like major sports washing effort has come, you know, in the past half decade or so, where it's grown from, you know, poking at the edges of something to like a concerted effort.
• 7:34
  [SPEAKER_01]: We can see them buying into all of these different sports and industries.
• 7:38
  [SPEAKER_01]: Others that I didn't even mention boxing has been a huge one for them.
• 7:42
  [SPEAKER_01]: They basically transformed that entire sport at least in terms of paying big names to fight each other, which to wit like, you know, this approach works, right, in that if you use boxing and now to a lesser extent MMA is an example, fans have an often favorable view of Saudi Arabia and its crown prince, because like the things that they wanted to happen, Saudi money has made happen, all the big names who are for years hesitant to fight each other,
• 8:09
  [SPEAKER_01]: ended up fighting because the purse was big enough.
• 8:12
  [SPEAKER_01]: And so similarly, I think that, you know, we've seen this in like eSports as well.
• 8:17
  [SPEAKER_01]: The eSports World Cup initially was kind of derided and a lot of people were hesitant to participate in it because of Saudi Arabia's reputation.
• 8:26
  [SPEAKER_01]: But the amount of money that you could win kept getting bigger and it stuck around.
• 8:31
  [SPEAKER_01]: And so then this year, like, because I've been doing some reporting on this, at least, you know,
• 8:37
  [SPEAKER_01]: How much does that a government is paying people in esports, how much it's paying, you know, various content creators to kind of stream their events and, you know, again, publicize them and one person I talk to who's like a major esports commentator said, okay, well last year even a lot of other people in my field were kind of
• 8:54
  [SPEAKER_01]: Hold that's they're like I'm not gonna do it.
• 8:57
  [SPEAKER_01]: You know the money's not good enough and also like ethically it just feels bad My audience would be upset with me, you know, so on and so forth and So this is what's commentator is like this year that number has fallen tremendously and everyone's just kind of accepting it and going along with it And it's not even like that that much money, but it's enough that they're like, yeah, we're gonna do it
• 9:18
  [SPEAKER_01]: Especially because, and this is the other thing that the Saudi government has been good at at least in games, eSports is like a is a flailing industry.
• 9:26
  [SPEAKER_01]: eSports has spent its entire existence as an industry kind of jumping from means of getting cash injections, two means of getting cash injections, and like when one runs out they find another, and this time they found the Saudi government, which again is artificially inflating, you know the overall value of eSports as an industry.
• 9:45
  [SPEAKER_01]: And so, you know, they're good at praying on desperation, similarly like video games in general, game development right now is in a really tough spot, companies have been laying off a lot of people, they've been trying to present the illusion of infinite growth, while also coping with the fact that the industry is changing, the extent to which people are willing to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing, how they want to spend money on games is changing
• 10:07
  [SPEAKER_01]: And so yeah, accompanying like EA was I'm sure extremely happy to be like, okay, yeah, let's get out of the public sector for now.
• 10:14
  [SPEAKER_01]: Let's go private and let's also make sure that we have at least for the moment, plentiful money on hand.
• 10:20
  [SPEAKER_01]: Now, the terms of that deal, there's something entirely different.
• 10:23
  [SPEAKER_01]: We're basically in 2027.
• 10:24
  [SPEAKER_01]: They'll be saddled with $20 billion in debt.
• 10:28
  [SPEAKER_01]: So, you know, EA is not going to have a lot of money for long, but you can see how that would be tempting to at the very least, you know, executives and the board.
• 10:37
  [SPEAKER_00]: Absolutely.
• 10:38
  [SPEAKER_00]: Any time there's these numbers like this, the board and the investors are going to be interested because they get their pay back and whatnot.
• 10:43
  [SPEAKER_00]: You know, even when you're talking about the esports commentators and like the money that they're taking and and I can definitely see how this kind of relates to some of the work that you've been doing, you know, like your book stream big that looks at, you know, the streaming industry and things like that, which is really good insight into into that whole world.
• 11:00
  [SPEAKER_00]: But when you're talking about the money that that can be available for these folks to get the move to kind of.
• 11:05
  [SPEAKER_00]: not look so much at the human rights violations and the treatment of women and all that kind of stuff and just take the money like it brings to mind the big controversy that we saw just recently that really broke into the mainstream where you had all these comedians going over to participate in this comedy festival and they were all basically being attacked for doing it but they were like, you know, the money is good enough that I'm just gonna look the other way and go get the bag and then come back, right?
• 11:30
  [SPEAKER_01]: Yeah, and that part is wild too because, you know,
• 11:33
  [SPEAKER_01]: These were all big-name comedians, it's not like these were small timers here, you know, struggling to pull themselves up by their good straps or whatever.
• 11:40
  [SPEAKER_01]: These were people like Dave Chappelle, and as these on Sari, these is like almost household names.
• 11:46
  [SPEAKER_01]: I mean, Pete Davidson, obviously, people like that.
• 11:49
  [SPEAKER_01]: And yet, there's still like, yeah, we're going to go over here and potentially compromise our values just for like this big paycheck, which I think also speaks to like, you know, how this works now because similarly, like the the people on EA's board, EA's executives, especially like Andrew Wilson, who's their CEO, who's like, pay at least for the moment, you know, his public and who makes tens of millions.
• 12:13
  [SPEAKER_01]: In fact, I think that, yeah,
• 12:14
  [SPEAKER_01]: EA had to rain in the amount that he was making at one point because it was getting a little bit ridiculous.
• 12:20
  [SPEAKER_01]: So I did a piece recently on how much he made in 2024 after they, after EA laid off a bunch of people.
• 12:27
  [SPEAKER_01]: Let's see.
• 12:27
  [SPEAKER_01]: Yeah, during fiscal 2024, Wilson took home over $25.6 million via mixture of a $1.3 million base salary, $20.4 million stock awards, $3.44 million from a non equity incentive plan and around 500,000 in personal security benefits.
• 12:43
  [SPEAKER_01]: So that's the kind of people that we're working with and that they are making millions and millions, hand over fist every year, probably a billionaire territory if not high 100 millionaire.
• 12:53
  [SPEAKER_01]: And yet still, there is this hunger for additional wealth that the Saudi government is extremely willing to prey on.
• 13:00
  [SPEAKER_01]: for these people money is all the talks and so it's working.
• 13:04
  [SPEAKER_01]: I don't know man, I would have a hard time getting buy on $20 million dollars.
• 13:07
  [SPEAKER_00]: I don't know about you.
• 13:10
  [SPEAKER_00]: It's so tough for me.
• 13:11
  [SPEAKER_00]: I mean I could barely, at that rate I could barely afford like two or three super yachts.
• 13:17
  [SPEAKER_00]: But you know, speaking about EA, right?
• 13:19
  [SPEAKER_00]: For me, I feel like this is a company that I associate with being younger and they made a load of different games.
• 13:28
  [SPEAKER_00]: And I was really interested in what they were doing and they had a bunch of different studios that were like churning out different things.
• 13:35
  [SPEAKER_00]: And it feels like it has evolved so much over
• 13:38
  [SPEAKER_00]: the past number of years that like what it makes has become very limited, you know, a lot of the different things that you used to experiment with.
• 13:46
  [SPEAKER_00]: I feel like we don't see anymore and it seems like it's focused on like a few big brands, particularly in sports, but some games beyond that as well.
• 13:54
  [SPEAKER_00]: And it really feels like there's a death of like other types of games and things like that as well.
• 13:58
  [SPEAKER_00]: Like what happened to this company?
• 14:00
  [SPEAKER_00]: Like how has it evolved over the past while to get to this point?
• 14:03
  [SPEAKER_01]: To understand EA, you've got to just understand that yeah, it has some of the biggest sports series ever under its belt and that like if you look at regular video game sales charts, there's perennial top contenders.
• 14:15
  [SPEAKER_01]: There are always just sort of up there being the best sellers and those are like FIFA and Madden.
• 14:21
  [SPEAKER_01]: And so after a while EA realized, okay, these are dependable cash cows and we should load them down with like microtransactions, the key people
• 14:32
  [SPEAKER_01]: And so we just like milk that and that's how we stay afloat.
• 14:36
  [SPEAKER_01]: That's how we stay solvent.
• 14:38
  [SPEAKER_01]: And then everything else is kind of, you know, an attempt to fit other series into that particular mold to create these like mega games that stick around forever, which in some ways is also a microcosm of the games industry large, games as a service is taken over, at least the kind of like NBA executive brand side of things.
• 14:58
  [SPEAKER_01]: Everybody wants to have the next big service game,
• 15:01
  [SPEAKER_01]: To be the next League of Legends of the next Fortnite or the next Grand Theft Auto or whatever where instead of you selling a box product every year You know, you just have a game that goes on and on and on forever and people spend a bunch of money within that ecosystem Well over 60 dollars per person But I think from EA side it's a little bit different because they do like to iterate every year on their sports game series.
• 15:23
  [SPEAKER_01]: They just also have not packed it full of
• 15:25
  [SPEAKER_01]: various little things you can buy and like ultimate team modes where you can participate and have an incentive to spend more money over time.
• 15:33
  [SPEAKER_01]: And so yeah that's fundamentally transformed the company into one that produces a pretty limited series of games and that is not willing to take risks anymore to really any extent.
• 15:44
  [SPEAKER_01]: They've had in addition to all of that
• 15:49
  [SPEAKER_01]: Dragon Age, that game actually is a perfect kind of encapsulation of all of this, and that, you know, so Dragon Age is a series, is a fantasy role-playing game.
• 15:59
  [SPEAKER_01]: Previous entries have been lauded for their story and for their characters, and for creating immersive worlds the players like to go to an experience largely on their own, and on their own terms.
• 16:11
  [SPEAKER_01]: So the most recent Dragon Age,
• 16:15
  [SPEAKER_01]: and actually began as a kind of multiplayer game, which was already a weird decision on EA's part considering the series past, but again, they wanted to fit this mold.
• 16:27
  [SPEAKER_01]: And so then, it went through multiple iterations of the course of development.
• 16:30
  [SPEAKER_01]: And they, after a certain point, were like, okay, we got to ship this.
• 16:33
  [SPEAKER_01]: We got to get something out there.
• 16:35
  [SPEAKER_01]: Let's take kind of all these assets we have and all these things that we've put together all these various systems.
• 16:39
  [SPEAKER_01]: And make a more classic, or at least try to make a more classic Dragon Age with them because we're doing before just isn't working.
• 16:46
  [SPEAKER_01]: It's not producing a game that people enjoy and, you know, we've been at this for by the time the game came out nearly a decade.
• 16:54
  [SPEAKER_01]: They want a particular thing, but it doesn't actually necessarily apply to all their series.
• 16:58
  [SPEAKER_01]: And then when they release something as a result of these competing visions, that game is compromised and people don't like it.
• 17:03
  [SPEAKER_01]: It doesn't sell well.
• 17:04
  [SPEAKER_01]: and then, of course, as a result of that, they lay a bunch of people off.
• 17:08
  [SPEAKER_01]: That is the pattern.
• 17:09
  [SPEAKER_01]: It's also worth noting that given how sports centric EA has become at least in terms of its overall economic approach, that it makes a lot of sense that the Saudi government would want to buy them in particular, because the Saudi government is so invested in sportswashing, one of the only sports that the Saudi government is not really succeeded at breaking into at least
• 17:34
  [SPEAKER_01]: what is a good way to build connections in the world of the NFL, to own the big NFL video game.
• 17:41
  [SPEAKER_01]: That's what I've heard from some people, and I think it's mostly speculation, but there's this notion that buying EA may not even be like,
• 17:49
  [SPEAKER_01]: a major play in the world of video games, like it's a happy byproduct, but their actual goal might be to make it into the NFL, because the NFL is like, I mean, a, it's the biggest sport in America, b, it's like a cash cow of cash cows.
• 18:04
  [SPEAKER_01]: That's the sport that commands the most money for TV rights.
• 18:06
  [SPEAKER_01]: That's if they could break it over there and become mover and shaker in that world, then that's it
• 18:17
  [SPEAKER_00]: That it makes perfect sense, right?
• 18:19
  [SPEAKER_00]: Like even when you were talking about Andrew Wilson and like the fact that EA had all these sports franchises I was like making the connection in my head that I was like, oh man, it makes perfect sense for them to buy EA if like they're already doing all this sports washing to get all the big sports games, right?
• 18:34
  [SPEAKER_00]: You know, you have some like two case sports games and things like that, but like EA has some of the major ones
• 18:39
  [SPEAKER_00]: And even when you talk about Dragon Age VailGuard, like for me one of the things that I loved about EA was the BioWare Games, which Dragon Age is part of, right, and I played VailGuard as well.
• 18:49
  [SPEAKER_00]: And it was boring, like, unfortunately, and I was really disappointed by it.
• 18:54
  [SPEAKER_00]: And so, like you can see how this kind of transformation from being able to make it these single player games that are great experiences that, you know, making off money to make it worthwhile to now being like,
• 19:06
  [SPEAKER_00]: Okay, we need to make so much money because there are these massive as you're saying kind of like always on kind of service games Which the sports games fit into but there are other things there as well that EA is making their money off of that It's like if it's not one of those that are making these like blockbuster numbers then it's really not just going to to make sense anymore and like
• 19:27
  [SPEAKER_00]: It feels so disappointing because it's not just an EA problem, I feel like this is something that we see across so much of the video game industry now where the type of games that get made is increasingly limited, especially if you're looking at the AAA space and it's like you need to look at the more indie space, if you're looking for anything beyond those kind of massive open world service games, things like that, right?
• 19:54
  [SPEAKER_01]: fraught in its own way in that I think you know at this point it's impossible to say if a game is going to hit it bigger not And if only because somebody games come out every day they're all competing for a lot of the same real estate on steam And so like for a while conventional wisdom was well there just too many games and a lot of them are garbage and so you're going to get drowned out by pure noise
• 20:16
  [SPEAKER_01]: But now, like Steam is optimized to kind of push those games down, so people don't really see them.
• 20:21
  [SPEAKER_01]: It's algorithmically driven, like anything else.
• 20:23
  [SPEAKER_01]: And so the bigger problem is that if you're in indie, you're competing with all of the good stuff, both the good stuff that is also indie and a bunch of AAA games that take up prominent space on the surface.
• 20:34
  [SPEAKER_01]: And so, like, some indie games break through, but a lot of them don't.
• 20:38
  [SPEAKER_01]: And that means that there's a contraction happening, and that's how to be industry, too.
• 20:42
  [SPEAKER_01]: So, like, it's hard because in terms of the games that are coming out,
• 20:45
  [SPEAKER_01]: You know, there's some really, really amazing stuff, but even as it's a golden age for kind of like game quality and to an extent creativity like it's not sustainable all of us is untenable and like, you know, in the next handful of years, especially I think we're going to see the impacts of that.
• 21:02
  [SPEAKER_00]: Yeah, no, it makes perfect sense, unfortunately.
• 21:04
  [SPEAKER_00]: And so if we look at a company like EA then, this big deal happens now where it looks like they're going to be acquired by Saudi Arabia's public investment fund along with these other investors, as you were saying,
• 21:17
  [SPEAKER_00]: What does that mean for the company itself then moving forward?
• 21:20
  [SPEAKER_00]: Like will it still have the same degree of control over what it makes?
• 21:25
  [SPEAKER_00]: Will it potentially change what it makes?
• 21:27
  [SPEAKER_00]: Like what does it mean company wise?
• 21:29
  [SPEAKER_00]: Do we have an idea of that?
• 21:31
  [SPEAKER_01]: I mean all we know right now is what EA has said.
• 21:34
  [SPEAKER_01]: And of course companies can say anything in a situation like this.
• 21:37
  [SPEAKER_01]: In fact they love to because they want the merger to go through because they stand a benefit from that and so like right now You know there in that spot where there are fewer than you would hope into to use in and around the government in places like that Calling for regulatory scrutiny of this acquisition for totally understandable reasons as we've discussed It's pretty clear what the Saudi government is trying to do here
• 22:02
  [SPEAKER_01]: So immediately following the acquisition, so U.S. senators, Elizabeth Warren, and Richard Blumenthall said letters to the U.S. Treasury Secretary and Committee of Foreign Investment Chair Scott Benson and Electronic Arts CEO Andrew Wilson basically saying like, hey, you know, this needs to be observed more closely.
• 22:22
  [SPEAKER_01]: And, you know, risks here include, and this is their quote, surveillance of Americans, covert Saudi propaganda, and selective retaliation and censorship of persons that's favored by the Saudi government.
• 22:33
  [SPEAKER_01]: The WA, which is a union that has helped organize a lot of the video game industry, calling for regulatory scrutiny here, of course, EA is going to say, don't worry nothing to be concerned about.
• 22:44
  [SPEAKER_01]: This is all going to be business as usual.
• 22:46
  [SPEAKER_01]: Let's say on a recent updated kind of FAQ aimed at workers and employees,
• 22:50
  [SPEAKER_01]: They said, we will continue to be guided by our cultural values of creativity, pioneering, passion, determination, learning, and teamwork.
• 22:58
  [SPEAKER_01]: A lot of words that don't mean anything, but anyway, back to the quote, EA will maintain creative control and our track record of creative freedom and player-first values will remain intact.
• 23:09
  [SPEAKER_01]: But of course, like, what does that mean?
• 23:11
  [SPEAKER_01]: And in the same FAQ, they said, you know, our headquarters is going to remain, where it is already.
• 23:18
  [SPEAKER_01]: we're going to continue using AI and things like that and the same was it basically every single response to any conceivable question is met with nothing's going to change.
• 23:29
  [SPEAKER_01]: There aren't going to be layoffs in the immediate future.
• 23:31
  [SPEAKER_01]: That's hilarious considering that there about to be set of the $20 billion in debt.
• 23:36
  [SPEAKER_01]: like there's going to be hell layoffs at some point.
• 23:39
  [SPEAKER_01]: They like, I think these the term like a media future.
• 23:42
  [SPEAKER_01]: So it's like, yeah, it's doing a lot of heavy lifting, right?
• 23:44
  [SPEAKER_01]: But yeah, so they're trying to drive home this message, but in terms of actually retaining creative control, you know, like, no, they're about to have new management.
• 23:52
  [SPEAKER_01]: But that's not how that works.
• 23:54
  [SPEAKER_01]: And we've already seen that like the Saudi government likes to have control in these situations, or likes do, you know,
• 23:59
  [SPEAKER_01]: to get a return on its investment, at least in terms of influence, if not in terms of profit.
• 24:05
  [SPEAKER_01]: Even recently, so in collaboration with Ubisoft, which again, they also have a stake in, or let's see, I think they have a stake in it, and they also, that basically it's been reported that the study government covertly funded new DLC for an Assassin's Creed game, and it's basically set in a portion of the country that they want to present as a great place for tourism.
• 24:27
  [SPEAKER_01]: And like that is a very overt instance of them being like this is what we would like Exerting influence via money the other big example is that they had struck a deal with the International Olympic Committee on the Saudi government had to create the e-sports Olympic games And that was going to be like a decade long deal But if they love and power the two sides failed to see suicide decide on the creation of like an overseeing Federation because their Federation's involved with like each individual sport in the Olympics
• 24:57
  [SPEAKER_01]: And so the set of government was like, okay, the ones that we're looking at that are in eSports, they're not like profitable.
• 25:03
  [SPEAKER_01]: So we don't trust them.
• 25:04
  [SPEAKER_01]: Let's not go with that.
• 25:06
  [SPEAKER_01]: And so what they propose instead, and again, this is like very notable considering everything else that we've heard about like controlling creative control.
• 25:14
  [SPEAKER_01]: What they propose would have been under Saudi control and perpetuity.
• 25:17
  [SPEAKER_01]: And, of course, the Olympic Committee was like, no, we don't want to do that.
• 25:23
  [SPEAKER_01]: That sounds terrible.
• 25:24
  [SPEAKER_01]: There's a report on all of this from the eSports advocate, and in that they also ended on the quote, further the Saudi contingent pushed back on being forced to put women and leadership positions, and adhering to rules on who and what nations it could or could not allow to participate.
• 25:38
  [SPEAKER_01]: It sounds like a lot of very discrete control with extremely specific goals in mind.
• 25:45
  [SPEAKER_01]: And so for them to, for EA to come along and be like, don't worry, those same guys are going to metal with us.
• 25:50
  [SPEAKER_01]: It's like, yeah, they're not going to metal with the studio that has tons of queer options and Dragon Age games that produces the Sims, which is one of the original series, like the Sims was pioneering back in the day, in terms of inclusiveness, where queer and gay characters
• 26:07
  [SPEAKER_01]: are regarded like that was one of the first games to ever just be like here it is.
• 26:11
  [SPEAKER_01]: And so like yeah, you think for the Saudi government's going to be like don't worry about it.
• 26:15
  [SPEAKER_01]: Well, that's sale right on through, you know, you got to be kidding yourself.
• 26:18
  [SPEAKER_00]: Absolutely.
• 26:19
  [SPEAKER_00]: It's really hard to see them not kind of stepping in on some of these things, especially after like,
• 26:23
  [SPEAKER_00]: the acquisition period is over right because we see as you're saying so often that these companies talk a great game in the moment where the deal needs to be approved and things are still kind of working out and then within the couple years after that it's like okay everything changes and it's not really aligned with what they said anyway but I did want to pick up on what you were saying there about
• 26:45
  [SPEAKER_00]: The Saudi government being invested in not just like the video games industry, not just eSports, but this kind of like broader sports industry in general And as you were saying there, it's looking for profit.
• 26:59
  [SPEAKER_00]: It's looking for influence But do we see that these things actually make a difference like do we see the strategy being successful with Saudi Arabia being able to like watch its reputation through all of these acquisitions all this spending?
• 27:13
  [SPEAKER_01]: I would say so, I mean, it's like I was saying earlier, you know, at least in the places that I watch, it's working and it's been hyper normalized in boxing.
• 27:21
  [SPEAKER_01]: This is how the government basically just funds that sport right now.
• 27:24
  [SPEAKER_01]: And it's only making further inroads.
• 27:25
  [SPEAKER_01]: They recently partnered with Zufa, which is the company that owns the UFC and that produces all of their events to create Zufa boxing, which will
• 27:34
  [SPEAKER_01]: I mean, it's going to do a whole bunch of things that are basically terrible.
• 27:37
  [SPEAKER_01]: I mean, it's a very complicated deal in that the Saudi side of it is going to be funding big money fights, and the side of it that sort of run by like Dana White, the CEO of the UFC, is going to be kind of creating a more of like a feeder league where they can basically pay people pennies to get their brains beaten, they're going to structure that like the UFC, which also has horrible issues with athlete pay, but yeah, so they are getting super involved over there.
• 28:02
  [SPEAKER_01]: Again, there's just this issue of, once upon a time, especially like in sports, there was a lot of pushback when the Saudi government first started making these inroads.
• 28:12
  [SPEAKER_01]: There are many people saying, like, no, this is wrong.
• 28:15
  [SPEAKER_01]: We shouldn't watch these events.
• 28:16
  [SPEAKER_01]: We shouldn't support this because it goes against our ethics on our morals.
• 28:21
  [SPEAKER_01]: And what the Saudi government successfully did was said, okay, well, you know, we got money.
• 28:25
  [SPEAKER_01]: We got time.
• 28:26
  [SPEAKER_01]: We'll just weather that initial storm and you'll get used to us.
• 28:29
  [SPEAKER_01]: And sure enough, people did.
• 28:32
  [SPEAKER_01]: you just see, you know, if we're talking like reporting, right, back when this first became a thing, over five years ago, there were tons of reports, there were tons of articles about this issue, especially so it pertains to the various reports that Saudi government was especially interested in.
• 28:47
  [SPEAKER_01]: Now there just aren't many.
• 28:49
  [SPEAKER_01]: I mean, unless you go to like, defector in places like that that, you know, kind of take a much more like than a much more critical of all of these things.
• 28:57
  [SPEAKER_01]: It's just not really something that people talk about as much.
• 28:59
  [SPEAKER_01]: It's just sort of accepted.
• 29:00
  [SPEAKER_01]: It's like
• 29:01
  [SPEAKER_01]: Where's other money coming from?
• 29:03
  [SPEAKER_01]: Oh, yeah, that's how to government who are those guys standing in the background of whatever sport It's you know the Saudis there attending an event that they funded It's just kind of the status quo now.
• 29:12
  [SPEAKER_00]: Yeah, and you know when you talk about like those boxing matches and the eSports competitions and things like that like
• 29:18
  [SPEAKER_00]: One thing I've noticed is a lot more conferences like happening in Saudi Arabia as well, which I'm sure there must be some sort of incentive or funding or something like that to kind of get them to locate.
• 29:31
  [SPEAKER_00]: They are to have their conferences in re-order wherever else.
• 29:34
  [SPEAKER_00]: But like a lot of these sports in these events then would they be like holding competitions, matches like in Saudi Arabia itself, like I guess when we're talking about these sports as well.
• 29:45
  [SPEAKER_01]: in a lot of cases yes so it depends on the sport and the time of year a lot of these sports you know are international so they have like one major event in Saudi Arabia or a couple but also like a lot of those big boxing fights I was talking about yeah they took place in Saudi Arabia you know even some of them in ways to like hurt them right at least in terms of their ability to make money via more traditional means
• 30:06
  [SPEAKER_01]: Yeah, I believe this is what happened.
• 30:07
  [SPEAKER_01]: The big boxing match between Tyson Fury and Francis and Gano, who is a former UFC champion, that I believe is held in Riyadh or a major Saudi Arabian city, so it had to occur like super early in the morning for people in the West.
• 30:22
  [SPEAKER_01]: It did not sell well.
• 30:23
  [SPEAKER_01]: The paper viewed in so well at all.
• 30:25
  [SPEAKER_01]: You know, there have been debates over whether that was because in Gano is not a draw, but whatever.
• 30:29
  [SPEAKER_01]: They didn't sell well, but they still did it that way because, you know, they're like, we're going to have it in our
• 30:35
  [SPEAKER_01]: So there are a lot of things like that, but then other sports are like, okay, we're going to have like our our tent pole event in Riyadh or in a surrounding area.
• 30:42
  [SPEAKER_01]: So the WWE does now.
• 30:45
  [SPEAKER_01]: The eSports World Cup is similar.
• 30:46
  [SPEAKER_01]: The major matches of that event are held.
• 30:50
  [SPEAKER_01]: I believe in or around Riyadh.
• 30:52
  [SPEAKER_01]: And then also more recently, the in the past few years, there's been the new global sport conference, which takes place alongside the eSports World Cup.
• 31:01
  [SPEAKER_01]: And that's again, that event where a bunch of like,
• 31:03
  [SPEAKER_01]: really high profile video game executives and investors and founders and other types kind of meet and basically give a series of talks.
• 31:12
  [SPEAKER_01]: I mean, what it really is is like a networking event for very wealthy and powerful people in the games industry.
• 31:17
  [SPEAKER_01]: But you know, if you can facilitate even through just presence kind of like big deals in the games industry, if you can be around to those.
• 31:27
  [SPEAKER_01]: then like you have this other kind of means, I guess of getting it on the ground floor.
• 31:33
  [SPEAKER_01]: I guess a lot of important things that are happening in the industry, especially right now, like given that there's a death of investment in video games and you say, okay, we put together this conference where a bunch of rich people are going to hobnob with video game executives.
• 31:47
  [SPEAKER_01]: It's like, again, you'd be a fool not to go to that if you were a video game CEO.
• 31:51
  [SPEAKER_00]: We talked earlier about like the recent controversy around all the comedians going over to Saudi Arabia and how like a lot of them were pushed on human rights things and like why they were taking this money to go do it.
• 32:04
  [SPEAKER_00]: Do we see that in like sports and video games and stuff anymore or has that really just fallen off because the money has become so so common and you know almost expected at this point.
• 32:16
  [SPEAKER_01]: Yeah, again, it's definitely falling off.
• 32:18
  [SPEAKER_01]: I think there's still some descent in video games.
• 32:21
  [SPEAKER_01]: Although it depends on where you look, you know, I think that, for example, the fighting game community was a locus of descent for a long time because fighting games have an especially kind of like diverse user base or player base.
• 32:33
  [SPEAKER_01]: They have very like grassroot scene and so as a result, there are a lot more people of color, a more queer people who play fighting games.
• 32:39
  [SPEAKER_01]: But Saudi government has just bought their way in.
• 32:42
  [SPEAKER_01]: They bought the biggest fighting game tournament, Evo.
• 32:45
  [SPEAKER_01]: They bought their way into kind of the entire street fighter, just like professional progression.
• 32:50
  [SPEAKER_01]: And so people have gotten more and more used to it.
• 32:53
  [SPEAKER_01]: There's an instance.
• 32:55
  [SPEAKER_01]: Earlier this year, more basically, the community around a game called Gio Guesser, which is the sort of like Google Maps game where you're presented with like,
• 33:03
  [SPEAKER_01]: a random location and you have to guess on a map in the world where it is, which is like a crazy skill that people have cultivated.
• 33:10
  [SPEAKER_01]: You know, there's some people who can show them anything.
• 33:12
  [SPEAKER_01]: Let's be like, it's there in a heartbeat.
• 33:14
  [SPEAKER_01]: It's actually wild, but it has a kind of nascent e-sport scene.
• 33:18
  [SPEAKER_01]: And so the company behind it said, yeah, we're going to be part of the e-sport world cup and the community there, which again, is generally very diverse and progressive,
• 33:29
  [SPEAKER_01]: and so they openly rebelled and basically like the quote unquote maps in this game.
• 33:34
  [SPEAKER_01]: So like the kind of like series of things that you have to guess, a lot of those maps are created by community members.
• 33:41
  [SPEAKER_01]: They also have the power to remove those things and reaction to this company saying, yeah, we're going to go to be part of the sports world cup.
• 33:49
  [SPEAKER_01]: We're going to like have an official presence there with our game.
• 33:51
  [SPEAKER_01]: The community map makers who make things for Geogessor often in their spare time, just because they, it's for the love of the game, did a quote unquote blackout where they basically removed like hundreds of the most prominent and important maps that people use.
• 34:06
  [SPEAKER_01]: You play the game and you compete in the game.
• 34:08
  [SPEAKER_01]: And so suddenly, there was just like a lack of content in the game, at least in terms of the most important stuff.
• 34:14
  [SPEAKER_01]: And eventually, the company relented, and they're like, never mind, we're not going to do it.
• 34:18
  [SPEAKER_01]: We hear you loud and clear because we don't really have a choice.
• 34:21
  [SPEAKER_01]: This is an interesting instance at how this can play out.
• 34:25
  [SPEAKER_01]: Because effectively what you have is the player is controlling the means of production.
• 34:30
  [SPEAKER_01]: And so they just did what you would normally do if we had a functioning society, which is slam on the bricks and say no, we won't let the powers the B do this because we don't approve.
• 34:42
  [SPEAKER_01]: Whereas for other games in other series, that's just not the case.
• 34:45
  [SPEAKER_01]: You know, companies are proprietary.
• 34:47
  [SPEAKER_01]: They control it all.
• 34:49
  [SPEAKER_01]: And so there's just not a good way for communities and players to say, hey, we, we disapprove and we want you to reevaluate.
• 34:56
  [SPEAKER_00]: That's really awesome.
• 34:57
  [SPEAKER_00]: I hadn't heard about that story.
• 34:59
  [SPEAKER_00]: That's, that's really cool.
• 35:01
  [SPEAKER_00]: When we're talking about what the Saudi Arabian government is doing, obviously EA is a big focus right now, but you mentioned that they have investments in a lot of other different parts of the video games industry.
• 35:13
  [SPEAKER_00]: Can you talk a bit about that?
• 35:15
  [SPEAKER_00]: They're ongoing efforts and what they have already been up to in
• 35:20
  [SPEAKER_00]: Seating money throughout this industry to try to try to gain influence and to try to gain stakes in so many different like video game companies Here's a really useful article from game developer, which is a great site.
• 35:30
  [SPEAKER_01]: They're kind of a Trit of their name.
• 35:32
  [SPEAKER_01]: They're sort of more focused on like content for developers or you know about the industry But they have an article that it's titled all the game and companies Saudi Arabia owns or has invested in
• 35:43
  [SPEAKER_01]: EA's the obvious one, scoply.
• 35:46
  [SPEAKER_01]: That's right.
• 35:46
  [SPEAKER_01]: Menoply go creator scoply.
• 35:49
  [SPEAKER_01]: They bought in 2023 for $4.9 billion, which is definitely not anything to sneeze at.
• 35:54
  [SPEAKER_01]: And in scoply, while being part of a game company that is owned by the Saudi government called the SAVY Games, they then bought out the developer Pokemon GO, Niantic for $3.5 billion.
• 36:06
  [SPEAKER_01]: So basically the SAVY government owns like Pokemon GO, which is a huge game.
• 36:11
  [SPEAKER_01]: Let's see, SNK, that's a fighting game company.
• 36:13
  [SPEAKER_01]: Oh, yeah, that's another instance where they've exerted control.
• 36:16
  [SPEAKER_01]: They put a DJ that the Saudi government likes into a fighting game.
• 36:23
  [SPEAKER_01]: Oh, yeah, whether they own a 96% stake in SNK.
• 36:26
  [SPEAKER_01]: So they just own that company.
• 36:29
  [SPEAKER_01]: Yeah, how setty funds, but crusty on a Ronaldo into a fighting game?
• 36:33
  [SPEAKER_01]: Yeah, who's, of course, a major soccer star, and who is that one of the teams that's now owned by the Saudi government, right?
• 36:39
  [SPEAKER_01]: Right.
• 36:40
  [SPEAKER_01]: And so they put him into a fighting game that is made up of fictional characters.
• 36:44
  [SPEAKER_01]: And they also then added Sabator Ganachi, a Bosnian Swedish DJ to this series that had previously not had anything of the sort.
• 36:55
  [SPEAKER_01]: So isn't that fun, the public investment fund owns roughly 5% of Nintendo?
• 37:01
  [SPEAKER_01]: Oh, and then they became the Japanese company's biggest outside stakeholder in 2023 with an 8.26% investment.
• 37:09
  [SPEAKER_01]: So, you know, think about that next time you're playing games on the Switch 2, I guess.
• 37:13
  [SPEAKER_01]: Take 2, which is the publisher of Grand Theft Auto and 3.5% of that.
• 37:18
  [SPEAKER_01]: Activision Blizzard, which you know is obviously now owned entirely by Microsoft, but in 2021, they owned 2% of that company.
• 37:27
  [SPEAKER_01]: Let's see Capcom, which again publishes a lot of fighting, or publishes a Street Fighter, other major fighting games, but also Monster Hunter, Resident Evil a bunch of series people really like, 5% there.
• 37:37
  [SPEAKER_01]: Next on, 5% and Bracer, this was a
• 37:48
  [SPEAKER_01]: video game publishing umbrella, they bought up a ton of different studios, they had bought all these game companies, spent tons of money, and then the plan was forced out of your Arabia to come through with a $2 billion deal that would have kept that operation afloat, and then the Saudi government backed out and embraced their collapse, basically, and had to lay off tons of people, sell tons of studios, cancel tons of games.
• 38:16
  [SPEAKER_01]: It was sort of the canary in the coal mine of the current moment in the game's industry of all these layoffs and all of this talent Suddenly being without a job Leading to other people also not being able to get jobs and everything And any of the other things like the esports world cup which I already talked about, but yeah, so they have Invested in all these different companies to varying degrees with the embrace or deal they were you know set to like really Take over a sector of the industry but decided that that was not how they're going to approach things anymore and that had catastrophic results
• 38:46
  [SPEAKER_01]: Yeah, I mean, you know, they've been doing this for a minute.
• 38:48
  [SPEAKER_01]: I think that initially they were sort of poking and prodding to see what would happen.
• 38:53
  [SPEAKER_01]: And through that, they came up with a plan to say, okay, well, we're just going to buy up an entire major publisher and make that our own.
• 39:01
  [SPEAKER_00]: It was just still wild to see like, but you know, you mentioned in Bracer, which was kind of seemed like almost this, this like financial play, right, especially in the early 2020s when it was buying up all of these studios and properties to get more things like under its umbrella,
• 39:16
  [SPEAKER_00]: And the question was like how is this even going to work and then of course, you know, it all fell apart as as people might expect, but you know, it also owns the the Lord of the Rings IP or like not wholly, but like it owns part of, I don't know, there's certain aspects of it that it owns, right?
• 39:31
  [SPEAKER_00]: and still retains, even though it's all off a bunch of other things.
• 39:36
  [SPEAKER_00]: But in Brace or looking at it as like this financial play, to get all these video game companies under one roof and to try to make money out of that, it brings me back to what you're saying about EA and how this deal is structured as like a leverage bio.
• 39:51
  [SPEAKER_00]: So basically these companies, the Saudi public investment fund, Kushner's firm, silver-like investment,
• 39:57
  [SPEAKER_00]: They are basically borrowing money against EA's own assets and then using that money in order to fund the purchase.
• 40:06
  [SPEAKER_00]: And like you said, that means that something like $20 billion a debt is going to be put on the balance sheet.
• 40:11
  [SPEAKER_00]: That obviously can't be good for a video games company that presumably needs to turn a profit.
• 40:18
  [SPEAKER_00]: But like needs to make money for investors at the end of the day.
• 40:20
  [SPEAKER_00]: If you have $20 billion of new debt, all of a sudden sitting on the balance sheet,
• 40:24
  [SPEAKER_00]: You're going to have to make some pretty drastic decisions in order to, like, pay that back or something, right?
• 40:30
  [SPEAKER_01]: Yeah.
• 40:30
  [SPEAKER_01]: I mean, almost certainly.
• 40:32
  [SPEAKER_01]: And, you know, the playbook, at least in terms of what, in video games right now, they kind of, you know, meta to use a video game term, even for companies that are profitable, that are reporting like, you know, record profits.
• 40:45
  [SPEAKER_01]: Because again, the, the name of the game is no longer,
• 40:48
  [SPEAKER_01]: just being profitable.
• 40:49
  [SPEAKER_01]: It's growth.
• 40:50
  [SPEAKER_01]: You've got to be showing better and better profit percentage wise every year or every fiscal quarter.
• 40:56
  [SPEAKER_01]: And so it's already playoffs.
• 40:59
  [SPEAKER_01]: A lot of companies, including, you know, we're talking about Microsoft earlier, which is another company that's bought up large swaths of the video game industry, and which has reported, you know,
• 41:08
  [SPEAKER_01]: Profit has reported has been like, look at us, you know, record numbers, but with what, has in the past couple years, you know, laid off almost 4,000 people.
• 41:17
  [SPEAKER_01]: And it's game sector alone across the company way, way more than that.
• 41:21
  [SPEAKER_01]: You know, it doesn't take like a youthsayer or whatever to see what's coming in this case.
• 41:27
  [SPEAKER_01]: As soon as that debt hits, they're going to be like, all right, it is time for mass layoffs.
• 41:31
  [SPEAKER_01]: And even then, with $20 billion in debt, that's not going to correct the balance.
• 41:36
  [SPEAKER_01]: And so I'm sure that they're going to lean into the things that they believe to be profitable, which are going to be, you know, sports games, service games, microtransactions, means of getting people to spend money, and making them feel like they need to, you know, to be competitive, or to fulfill whatever desire they've instilled in players within the confines of the game.
• 41:55
  [SPEAKER_01]: I think that most people would agree that over-reliance on those sorts of features and mechanics does not lead to a good game.
• 42:04
  [SPEAKER_01]: I think a lot of people would agree that those things even make games significantly worse, which is why there is a hunger among a lot of players, at least a long time players of games, for something that's less late in with those sorts of, I would say, coercive mechanics and features.
• 42:19
  [SPEAKER_00]: Yeah, sure, you know, you cut your costs by getting rid of workers and the people who are making the game good in the first place and then you also figure out ways to like extract more profit from the players themselves, like it's not going to work out at the end of the day.
• 42:35
  [SPEAKER_01]: Well, I mean, they're also like very distinctly short term play.
• 42:38
  [SPEAKER_01]: It's right.
• 42:38
  [SPEAKER_01]: It's not like.
• 42:39
  [SPEAKER_01]: You are saying, okay, what can we do to create something that nobody's ever seen before?
• 42:45
  [SPEAKER_01]: Something that is unique and that, you know, audience gravitate to hoard on that basis.
• 42:50
  [SPEAKER_01]: I'm saying, like, wow, yeah, this is a really innovative game.
• 42:53
  [SPEAKER_01]: This is so interesting.
• 42:54
  [SPEAKER_01]: I want to, you know, explore this world, or I want to, like, try this new thing and be enriched by that and set it as, okay, how can we, like, hook this into their vans such that they don't want to remove it because they are functionally addicted.
• 43:07
  [SPEAKER_01]: And then they will spend the maximum dollar amount possible to, you know, feel good in this, like, again, very short term way.
• 43:15
  [SPEAKER_00]: It's not going to be pretty for me as I was reading about basically the way that was being structured.
• 43:23
  [SPEAKER_00]: It was hard not to think about the activation blizzard deal, you know, Microsoft buying that up a few years ago, and then the aftermath of what we have seen from that.
• 43:33
  [SPEAKER_00]: And that's kind of where I wanted to like end our conversation because last time you were on the show, we talked about Microsoft and what was going on.
• 43:40
  [SPEAKER_00]: And I feel like one of the big stories that we've had since we had that conversation was the recent revelations that Microsoft's chief financial officer basically told,
• 43:49
  [SPEAKER_00]: The Xbox gaming division that it needed to turn 30% profit margins and that that seems to be one of the driving reasons behind a number of decisions that have seemed to like Baffle a lot of people watching the company are watching the gaming division at Microsoft over the past few years for how it's been operating so
• 44:10
  [SPEAKER_00]: What is going on there?
• 44:11
  [SPEAKER_00]: What did you make of this kind of revelation, did it?
• 44:14
  [SPEAKER_00]: Did it put a lot of things in perspective for you?
• 44:16
  [SPEAKER_01]: Yeah, definitely.
• 44:17
  [SPEAKER_01]: Because I mean, ever since Microsoft kind of completed the Activision Blizzard Transaction and acquired that series of studios that publisher, they have been laying people off closing studios and canceling games.
• 44:30
  [SPEAKER_01]: And that has obviously, like, I mean, hey, that's given a very bad reputation in the games industry, and it's also hamstrung their own efforts to become, I think, the dominant player in the industry, which they've never been able to do.
• 44:42
  [SPEAKER_01]: They've been a perennial kind of second or third place, depending on how you count these things.
• 44:47
  [SPEAKER_01]: But yeah, from a distance, you would look at them and say, like, they keep shooting themselves in the foot.
• 44:52
  [SPEAKER_01]: Why are they doing that?
• 44:53
  [SPEAKER_01]: And as it turns out, yeah, my perspective is basically implemented and across the board, quote, unquote, 30% accountability margin.
• 45:00
  [SPEAKER_01]: It's a really funny nonsense word.
• 45:02
  [SPEAKER_01]: Why not just call it a profit margin.
• 45:03
  [SPEAKER_01]: What are we doing?
• 45:05
  [SPEAKER_01]: But I think it's also illustrative of probably what we can come to expect from, you know, EA post Saudi deal.
• 45:11
  [SPEAKER_01]: Like again, if they also have to turn this ridiculous profit to make up
• 45:15
  [SPEAKER_01]: for the death they will be under, then, you know, the playbook is probably going to be similar, which is lay people off, like I was saying earlier, and then also anything that seems like an undue risk, or that seems like it's not going to pan out in this way that will be just like overwhelmingly profitable.
• 45:33
  [SPEAKER_01]: cut it or kill it.
• 45:34
  [SPEAKER_01]: And so that can mean a lot of years worth of work down the drain.
• 45:38
  [SPEAKER_01]: That can mean a lot of, you know, unique and interesting projects, even ones that like go on or decent public support, you know, where people saw trailer or something and they're like, yeah, I'm excited about that.
• 45:47
  [SPEAKER_01]: Could get canceled.
• 45:47
  [SPEAKER_01]: For example, in Microsoft's case, you know, they're working on a revival of this series called Perfect Dark.
• 45:52
  [SPEAKER_01]: Which was big back in the Nintendo 64 days less big during the Xbox 360 days, but hey, they tried and like the the new game They showed I think during the game awards at one point people like whoa that looks really cool And they still canceled that there was also like a new MMO and development from the other scrolls online studio Which great proven track record one of the few ongoing MMOs the continues to receive updates and is doing well They killed that laid off a bunch of people over there
• 46:20
  [SPEAKER_01]: I think that the general impression was if they just let them cook a little bit longer, then they would have had something really special in their hands.
• 46:27
  [SPEAKER_01]: Actually even before this year, Blizzard was working on a new game that seemed like it really, at least internally if you were talking to people over there, like I had the juice, and they put a lot of effort into it.
• 46:39
  [SPEAKER_01]: It was going to be like a survival game, and in that round of layoffs, I think shortly after the acquisition that I caught canceled and they killed that.
• 46:47
  [SPEAKER_01]: And this is another industry-wide problem, but if you are smothering every new idea you have in the cradle because you're not 100% certain that it's going to make millions or hundreds of millions of dollars, then eventually you're going to run out of runway, you're not going to have anything new, you're just going to have the same old stuff, and
• 47:07
  [SPEAKER_01]: no matter how many mechanics he put into get people addicted to your game or whatever, they will get bored and they will move on.
• 47:14
  [SPEAKER_01]: And when you're competing not just with other video games, but also with Netflix and YouTube, and especially TikTok and Instagram, people scrolling, like you need novel things to, I guess, deal back their attention because you are losing the attention war right now.
• 47:32
  [SPEAKER_01]: Everyone is losing the attention war to TikTok and Instagram.
• 47:35
  [SPEAKER_01]: You know, that's why you have Netflix talking about like second screen content about the idea of, you know, have your characters narrate what they're up to because people aren't really going to be watching your thing.
• 47:44
  [SPEAKER_01]: and like video games demand often full attention.
• 47:47
  [SPEAKER_01]: So like if you are getting rid of all of your new ideas, your best efforts in terms of kind of luring people back, then that's a dead end.
• 47:56
  [SPEAKER_01]: At that point you're functionally, and you can see this in some of the business decisions people are making, but like you are kind of selling the industry for parts.
• 48:05
  [SPEAKER_00]: I wonder what you make of like where it goes from here then, right?
• 48:09
  [SPEAKER_00]: Because obviously, Microsoft and Xbox were part of this console war with PlayStation and to a far lesser degree in Nintendo because they're just often kind of doing their own thing and their own little category.
• 48:22
  [SPEAKER_00]: But in recent years, we have continually had these Xbox games being released on PlayStation.
• 48:28
  [SPEAKER_00]: Most recently, the kind of updated remastered Halo game that they are putting out was announced for PlayStation as well.
• 48:35
  [SPEAKER_00]: Halo being like one of the defining Xbox franchises.
• 48:39
  [SPEAKER_00]: And also this news that it looks like Xbox is next console if we even want to call it that is basically going to be a PC not so much a console in the way that we would traditionally understand it.
• 48:49
  [SPEAKER_00]: So what do you think that this means for like the future of this dynamic that we have often understood kind of the video games industry to be for the past couple decades or so at least?
• 49:01
  [SPEAKER_01]: I mean, at least in terms of the way that these businesses are operating right now, the scale of which they're operating and the kind of money that they want to make.
• 49:08
  [SPEAKER_01]: that dynamic doesn't work anymore, the notion of like you release a kind of singular piece of hardware, all of your best stuff goes on that, like all of the big games, that that's like the home for those things.
• 49:21
  [SPEAKER_01]: That's just not going to be the case anymore, unless you're in a tendo, I think Nintendo will keep doing that for the most part because they again are often their own thing and it works for them clearly.
• 49:30
  [SPEAKER_01]: But yeah, Sony and Microsoft are both kind of testing the waters of, especially in Microsoft's case, being like, okay, well now everything is an Xbox is what they love to say at this point.
• 49:41
  [SPEAKER_01]: And so I think they're just trying to extract as much money as possible as much quote unquote growth as possible from what they have in kind of their like larger milieu.
• 49:51
  [SPEAKER_01]: And a lot of that involves, okay, well, we're going to put our biggest games on every platform because that's more people can spend money on them.
• 49:59
  [SPEAKER_01]: We're going to try to release across multiple kinds of hardware.
• 50:01
  [SPEAKER_01]: We're going to enter the streaming world.
• 50:04
  [SPEAKER_01]: We have game paths, which is a very important part of what they're doing, but it doesn't necessarily seem to be panning out in terms of profitability.
• 50:13
  [SPEAKER_01]: At least in terms of how you'd measure profitability, which is a whole can of worms, but whatever.
• 50:17
  [SPEAKER_01]: So yeah, they're trying all of these things to grow in that direction, but at the same time, again, they're also killing off a lot of games and studios, and they're multiple things to come of that.
• 50:30
  [SPEAKER_01]: One is again, that concern of, okay, well, if you keep getting rid of all these projects, then where does kind of innovation come from?
• 50:37
  [SPEAKER_01]: Where does the games that will hook players years from now?
• 50:42
  [SPEAKER_01]: Years down the line?
• 50:43
  [SPEAKER_01]: Where does those come from?
• 50:44
  [SPEAKER_01]: And the other problem is just that,
• 50:46
  [SPEAKER_01]: You know, if you've bought up so many video game studios, which Microsoft has, because their original plan, at least instead of ours people understand it was to buy a lot of game studios that they'd have a constant flow of content for game paths, which is basically their Netflix.
• 50:59
  [SPEAKER_01]: But when you're buying all these studios, and then you close them or lay people off from them, that produces larger ripple effects on the whole industry.
• 51:08
  [SPEAKER_01]: Suddenly, the industry, what you were bankrolling is less healthy, people are jobless, people can't find other work because the job market is so crowded with really talented people.
• 51:18
  [SPEAKER_01]: You know, we're talking people decades of experience who are also trying to find a new job that just the entire thing begins to crumble.
• 51:27
  [SPEAKER_01]: And like, as a major company, I think that you, if you are engaging in this kind of behavior, you have a responsibility to take care of the industry that you are part of, but evidently Microsoft does not agree.
• 51:36
  [SPEAKER_00]: You would imagine that would be the case, but, you know, as you're saying, I guess that's not what we see, and we see whether it's at Microsoft or just across this industry more broadly, the effort to turn out the short-term profits at the expense of so much else, right, regardless of where that's going to put things in the years to come, especially for people who enjoy playing games.
• 51:57
  [SPEAKER_00]: Obviously, this is a story that's going to continue to evolve.
• 52:01
  [SPEAKER_00]: I'm sure you'll probably be on the show again in the future and we'll dig into other aspects of it.
• 52:05
  [SPEAKER_00]: But, you know, another place where people can get information on this is obviously at the website that you kind of co-founded after math, where you explore all of the details of this video game news and other kind of like broader cultural news.
• 52:18
  [SPEAKER_00]: And I know that you guys have recently kind of refreshed the website have kind of done a relaunch.
• 52:23
  [SPEAKER_00]: Do you want to give us an insight into what's going on there and watch people should head over and check it out?
• 52:27
  [SPEAKER_01]: So yeah, we have been in business as a worker-owned video game website for two years now, which is crazy to think about because it feels like we launched yesterday, but also like we have been working there for our whole lives and then some.
• 52:40
  [SPEAKER_01]: I think as a statement of intent and also just because we wanted something a little bit more versatile for both readers and for ourselves.
• 52:48
  [SPEAKER_01]: We've relaunched the site.
• 52:49
  [SPEAKER_01]: It's shiny and new and I think looks very nice.
• 52:52
  [SPEAKER_01]: It's a thing where when we first launched, it's not that we cobbled something together.
• 52:57
  [SPEAKER_01]: It's more that, you know, we didn't know what we were doing yet.
• 53:00
  [SPEAKER_01]: We were a bunch of journalists.
• 53:01
  [SPEAKER_01]: We had not done anything business-wise.
• 53:03
  [SPEAKER_01]: We hadn't like found it anything before.
• 53:05
  [SPEAKER_01]: And so we just sort of took what we were given, which was great.
• 53:09
  [SPEAKER_01]: We were working with lead, who also powers like defector and stuff.
• 53:12
  [SPEAKER_01]: We got a good website out of the deal, but now we know what we want and what we need so we're like, okay We're going to relaunch and also just you know I think that when you are kind of in this space of being a Worker owned media outlet you kind of have to like for better and for worse repeatedly command people's attention It's actually sort of funny
• 53:34
  [SPEAKER_01]: It's like being a live service video game and a lot of ways.
• 53:38
  [SPEAKER_01]: What you've got to like say hey here's this big event or here's this change or here's this new thing.
• 53:43
  [SPEAKER_01]: Because otherwise people drift and like if your business is primarily subscriber based you lose people to turn.
• 53:50
  [SPEAKER_01]: and so, you know, there's that element as well.
• 53:53
  [SPEAKER_01]: But more than anything else, like, you know, we've been doing this as kind of our own business for a couple of years now.
• 54:01
  [SPEAKER_01]: And we feel like we've gone from being a spirited attempt at making something different to kind of counteract what has happened to a lot of, again, video game websites.
• 54:10
  [SPEAKER_01]: We're like, they have succumbed to the kind of current economic trends of the internet, which are based on a lot of clickbait, a lot of SEO optimization,
• 54:19
  [SPEAKER_01]: Mostly writing guides, not really doing investigative journalism, not really digging in anything anymore, because they just need content, content, content, like, you know, that's always been our mission statement.
• 54:29
  [SPEAKER_01]: Is something against that?
• 54:30
  [SPEAKER_01]: Is quality of a quantity, and just focusing on good work, much of a written, which again, the internet doesn't really prioritize these days.
• 54:37
  [SPEAKER_01]: We've gone from trying to do that and being like, okay, what's just like line up every possible rate that we can step on, so we can just do it in order one foot after the other.
• 54:47
  [SPEAKER_01]: to being functional and hopefully sustainable in the longer term.
• 54:52
  [SPEAKER_01]: But yeah, and so I think we want to express that, we're going to be like, yep, we are in this for the long haul and this model can work.
• 54:58
  [SPEAKER_01]: Despite everything else happening on the internet right now, despite how many people, especially in games journalism, lose their jobs, like on the daily or on the weekly.
• 55:07
  [SPEAKER_01]: You know, there is a way forward.
• 55:08
  [SPEAKER_01]: We just have to all work together to build it.
• 55:10
  [SPEAKER_00]: We plan to keep doing that.
• 55:12
  [SPEAKER_00]: Awesome.
• 55:12
  [SPEAKER_00]: And I'm an aftermath subscriber.
• 55:14
  [SPEAKER_00]: I enjoy what you guys are doing.
• 55:16
  [SPEAKER_00]: And people should definitely go over to aftermath outside and check out the new kind of refresh relaunch.
• 55:21
  [SPEAKER_00]: And you know, see what you guys are up to.
• 55:23
  [SPEAKER_00]: Nathan, it's always great to have you on the show to get your insights on what's going on with this industry.
• 55:28
  [SPEAKER_00]: Thanks so much for taking the time.
• 55:29
  [SPEAKER_00]: And of course, thank you again for having me.
• 55:34
  [SPEAKER_00]: Nathan Grayson is a co-founder of Aftermath and the author of Stream Big.
• 55:37
  [SPEAKER_00]: Tech Won't Save Us is made in partnership with the nation magazine and is hosted by me Paris Marks.
• 55:41
  [SPEAKER_00]: Production is by Kyla Hucen.
• 55:43
  [SPEAKER_00]: Tech Won't Save Us relies on the support of listeners like you to keep providing critical perspectives on the tech industry.
• 55:47
  [SPEAKER_00]: You can join hundreds of other supporters by going to patreon.com slash Tech Won't Save Us and making a pledge of your own.
• 55:52
  [SPEAKER_00]: Thanks for listening, make sure to come back next week.