Latest / The Game Business Show / My chat with Matthew Ball on what might turn the video game industry around

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My chat with Matthew Ball on what might turn the video game industry around · The Game Business Show

0:00
A common rhetoric to video gaming's compression over the last
0:03
few years was,
0:04
SPEAKER_00: of course we were going to come down from the pandemic high.
0:07
SPEAKER_00: And I need to say,
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SPEAKER_00: no,
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SPEAKER_00: actually,
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SPEAKER_00: participation rates in the United States are below pre-pandemic levels.
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SPEAKER_00: By some measures, Roblox is now near 425 million MAUs.
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SPEAKER_00: They are delivering more hours of engagement than the entirety of Steam.
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SPEAKER_01: Hello and welcome to The Game Business Show with me, Christopher Dream.
0:29
Today,
0:30
we chat to analyst Matthew Ball on the immediate future for the
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video game industry.
0:34
SPEAKER_01: But if you're new to The Game Business,
0:36
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0:38
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0:40
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0:42
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0:44
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0:56
SPEAKER_01: But that's enough about that.
0:57
SPEAKER_01: Matthew, welcome to the show.
0:58
SPEAKER_01: Thanks for having me.
1:00
SPEAKER_01: You put out this incredible 231, is that right?
1:02
SPEAKER_01: 231 page report?
1:03
SPEAKER_01: I think it started at 220 and then I kept adding slides.
1:05
SPEAKER_00: So it's probably around 230, 232 or something like that.
1:06
SPEAKER_00: Yeah.
1:12
SPEAKER_00: I saw it as 231.
1:13
SPEAKER_01: How have you found the reaction to it?
1:15
SPEAKER_01: Because there's been so much chatter around it.
1:17
SPEAKER_00: It has certainly exceeded really any expectation I had for it.
1:22
SPEAKER_00: I mean,
1:22
SPEAKER_00: to give the raw numbers,
1:24
SPEAKER_00: I looked it up and after I think 24 days,
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it had more lifetime views online than anything else I had
1:31
published over the
1:32
SPEAKER_00: preceding three years,
1:33
SPEAKER_00: including a piece that had been out for three years.
1:36
SPEAKER_00: And that's despite the fact that this one had a downloadable PDF,
1:38
SPEAKER_00: which I know was shared pretty extensively.
1:40
SPEAKER_00: So even that number probably understates it.
1:43
SPEAKER_00: I've heard from nearly all of the ecosystem as well,
1:45
but I'll tell you the thing that I feel best about that has
1:49
been most shocking and
1:51
rewarding is the number of creative heroes of mine who make
1:55
some of the best games
1:56
SPEAKER_00: of all time and are striving to do so again,
1:58
SPEAKER_00: who I didn't know before,
2:00
SPEAKER_00: with whom I have no NDA,
2:02
SPEAKER_00: no established trust,
2:03
SPEAKER_00: who just shot notes or DMs,
2:05
SPEAKER_00: emails,
2:05
SPEAKER_00: messages,
2:06
SPEAKER_00: in one instance,
2:07
SPEAKER_00: a LinkedIn message,
2:08
SPEAKER_00: just explaining how they felt about the games industry,
2:10
SPEAKER_00: what they were trying to do,
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SPEAKER_00: what they feared.
2:13
SPEAKER_00: And that level of trust and investment,
2:15
SPEAKER_00: despite no prior connection,
2:17
SPEAKER_00: was really touching and meaningful to me.
2:19
You did a piece last year as well,
2:21
which was sent on to me by Phil Spencer.
2:24
SPEAKER_01: And it actually really influenced me as a journalist,
2:26
SPEAKER_01: because I spend a lot of time looking at what's going on in China,
2:28
SPEAKER_01: what's going on over in esports,
2:30
SPEAKER_01: what's going on in these individual silos.
2:32
SPEAKER_01: And sometimes I take a hundred foot view.
2:34
But you seem to take a slightly bigger view on how it all
2:37
connects together.
2:38
SPEAKER_01: And I actually basically dictated how I write stuff.
2:41
SPEAKER_01: So it's certainly a very strong piece.
2:43
SPEAKER_01: I think anyone who's not read it,
2:45
SPEAKER_01: and hopefully the whole games industry has now,
2:47
SPEAKER_01: but it just sort of really showcases the full breadth of it.
2:50
But one of the things,
2:50
there's a couple of things in it,
2:51
and we'll talk about,
2:52
I think,
2:54
SPEAKER_01: Growth areas, I think, is probably what we're going to focus on.
2:56
But there was a couple of bits in it that I found,
2:58
even to this day,
2:58
I find baffling.
3:00
SPEAKER_01: Because I wrote a piece back in 2020,
3:04
SPEAKER_01: 2021,
3:04
SPEAKER_01: which is all around the fact that the post-pandemic,
3:06
SPEAKER_01: the games industry shouldn't expect to grow.
3:08
But is there a way we can retain some of the users that we've
3:11
managed to attract
3:11
SPEAKER_01: during the pandemic?
3:14
And I got a few notes from like games industry CEOs that said
3:17
that's exactly the
3:17
SPEAKER_01: message that needs to be delivering.
3:19
Yeah,
3:19
it seems to be that there was the expectation of growth post-pandemic.
3:24
SPEAKER_01: Why do you think that was?
3:26
SPEAKER_00: It's a great question.
3:27
SPEAKER_00: And I think that there are a few different things that are important.
3:29
Number one is the games industry grew at a truly remarkable
3:33
rate for the preceding decade.
3:36
SPEAKER_00: And that was close to 10% per annum.
3:39
I think that there are obvious limitations to abstracting any
3:42
industry to macro or national,
3:44
SPEAKER_00: let alone global figures.
3:46
But to put this in perspective,
3:47
the gains industry grew at three times the rate of world GDP.
3:50
SPEAKER_00: It grew twice as fast as the US economy over that period.
3:54
SPEAKER_00: That is to say that when you stack up every industry,
3:58
SPEAKER_00: it was exceeding not just the average profession,
4:00
SPEAKER_00: but nearly all of them.
4:03
SPEAKER_00: And so even though we all knew that the pandemic had,
4:07
SPEAKER_00: quote unquote,
4:07
SPEAKER_00: pulled forward growth,
4:09
it was not entirely unreasonable to assume that you would see
4:12
some growth,
4:12
SPEAKER_00: right?
4:13
SPEAKER_00: You could have fallen by 90% and still grown 1% per year.
4:18
The other thing that was essential here is even if you forecast
4:21
that there had been
4:22
SPEAKER_00: a halving of growth rates,
4:24
SPEAKER_00: a halving of what we had experienced for a decade uninterrupted.
4:29
And by the way,
4:29
2017 and 2018,
4:32
2019 was growing at or nearly the same rate of 2020 and 2021.
4:36
And so even though we think of the heights of the pandemic as
4:39
being aberrant,
4:40
SPEAKER_00: they actually weren't.
4:41
SPEAKER_00: And so it's with that in mind that people said,
4:42
SPEAKER_00: well,
4:43
SPEAKER_00: maybe not 10%,
4:44
SPEAKER_00: maybe not 15%,
4:45
SPEAKER_00: but even 5%.
4:47
SPEAKER_00: And 5% growth in 2022 would have been another $10 billion per year.
4:53
SPEAKER_00: Another 5% in 2023 would have added 10 billion on top of that.
4:57
SPEAKER_00: So that would have been 20 billion more.
5:00
SPEAKER_00: Then 2024 would have added again another 10 billion for 30 billion.
5:05
SPEAKER_00: So that baseline expectation of just saying, what if things halve?
5:09
would be 60 billion more revenue than we ended up experiencing
5:12
because we stagnated.
5:14
SPEAKER_00: And so again, Chris, you could say, well, maybe it's not halving.
5:17
SPEAKER_00: Maybe it's going to go down two thirds or 75%.
5:19
SPEAKER_00: And you would still be talking about really enormous sums.
5:24
So I don't actually think it was unreasonable to say that there
5:26
would be growth.
5:28
SPEAKER_00: It was hard to imagine there would be no growth.
5:31
SPEAKER_00: And even to the extent to which you believe that it would largely cease,
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SPEAKER_00: the idea that three years later and in nearly every market globally,
5:40
SPEAKER_00: we would still be down or flat.
5:42
SPEAKER_00: That I think was the thing that was hard to imagine.
5:46
SPEAKER_00: As a sidebar,
5:47
I think this is where you get to exceptionalism and no person
5:51
really is accepted
5:52
SPEAKER_00: from that,
5:53
which is even if you believe that the industry overall was
5:57
going to have a few
5:58
SPEAKER_00: tougher years,
5:59
SPEAKER_00: the job of every executive,
6:01
SPEAKER_00: every creative steward,
6:02
and every financial team was to figure out how their company
6:06
would grow despite that.
6:08
SPEAKER_00: And so I do think that you're seeing,
6:09
SPEAKER_00: without speaking to any specific individuals,
6:12
SPEAKER_00: is most people said,
6:13
SPEAKER_00: let's
6:14
SPEAKER_00: express caution collectively, but lets ourselves be aggressive.
6:19
And the cumulative effect of that was really shown over the
6:23
last two years.
6:24
SPEAKER_01: Yeah.
6:24
SPEAKER_01: Yeah.
6:25
SPEAKER_01: Well, people had to play the market they were in, in some ways, but
6:30
SPEAKER_01: And it's interesting because the review of 2024 was an interesting one.
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SPEAKER_01: I was doing some rounds at the beginning of 2024.
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SPEAKER_01: And I actually anticipated a drop in 2024.
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SPEAKER_01: And I'm a little bit old school.
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I've still grew up in the world where this is still a cyclical
6:44
industry and it
6:45
SPEAKER_01: Tated by release schedule a lot of the time.
6:48
SPEAKER_01: And I know obviously we've flattened the curve a lot as an industry now.
6:51
SPEAKER_01: But the release slate for last year was not great going into it.
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SPEAKER_01: 2023's release slate was amazing and 2024's release slate had a couple of
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SPEAKER_01: interesting titles,
7:00
SPEAKER_01: but it didn't look great.
7:01
SPEAKER_01: Certainly on the PC and console side anyway.
7:04
So I actually was quite pleasantly surprised to see that in
7:07
some areas there was growth.
7:09
SPEAKER_00: How did you review it?
7:10
I'm a little bit more sanguine in the sense of I think 2023 was
7:14
disappointing
7:14
SPEAKER_00: because of the strength of the slate.
7:16
SPEAKER_00: The counterpoint to that was,
7:18
SPEAKER_00: in fact,
7:18
most of the major releases of 2023 happened in the fourth
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quarter or near the
7:23
SPEAKER_00: fourth quarter.
7:23
SPEAKER_00: We had Spider-Man 2 came out, I think, September 21st or 27th.
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SPEAKER_00: So a few days before the start of Q4.
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SPEAKER_00: We had Alan Wake.
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SPEAKER_00: We had Starfield.
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SPEAKER_00: Of course, we had Cyberpunk 2.0 and Phantom Liberty come out.
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SPEAKER_00: Fortnite OG began, I think, around November 3rd or so.
7:41
And so there were a few major titles that released earlier in
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that year without question.
7:45
SPEAKER_00: Tears of the Kingdom was one,
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but the common refrain that I heard over the industry was 2023
7:50
disappointed despite
7:52
SPEAKER_00: its slate because too many of the games came out at the end of the year
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SPEAKER_00: cannibalizing one another and actually going to kick over into 2024.
8:00
That was actually a bull case by the end of 2023 for why this
8:03
past year was going to be good.
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SPEAKER_00: And so I do think that we should look over that two-year period perhaps
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SPEAKER_00: cumulatively rather than one year versus another.
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SPEAKER_00: And that's where I think probably the fairer picture is.
8:16
The other thing that I think is a little bit more challenging
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is if we take a look
8:18
SPEAKER_00: at the United States,
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the United States last year was up by roughly 1% according to
8:23
Circana or NPD group.
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SPEAKER_00: At the same time, mobile was up 9%.
8:28
SPEAKER_00: Mobile's more than half of the industry.
8:30
SPEAKER_00: It turns out that PC and console,
8:33
SPEAKER_00: despite that 2023 strength,
8:34
SPEAKER_00: despite that hold over into the 2024 purchasing,
8:39
SPEAKER_00: was still down.
8:40
SPEAKER_00: Down, I think, 4% to 5%.
8:41
SPEAKER_00: And of course,
8:42
SPEAKER_00: we know hardware and accessories were pretty affected as well,
8:46
SPEAKER_00: which is to say that actually...
8:48
SPEAKER_00: Though the top line number seems to be in some degree of recovery,
8:53
and even if we look over the three-year view and say it's
8:56
largely flat since 2021,
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SPEAKER_00: the truth is that's primarily strength on the mobile side.
9:00
SPEAKER_00: PC console is actually still fairly impaired.
9:05
Yeah,
9:05
it didn't have a particularly strong slate,
9:07
but they've got that problem.
9:08
SPEAKER_01: And,
9:08
SPEAKER_01: you know,
9:09
the other analysts have talked about this a lot of trying to
9:11
upgrade people from
9:13
SPEAKER_01: the previous generation.
9:14
I mean,
9:15
the console industry hasn't grown in terms of users very much
9:17
at all in 20 years.
9:19
But there is that challenge of if everyone's playing Fortnite
9:22
and everyone's still
9:23
SPEAKER_01: playing Grand Theft Auto.
9:24
SPEAKER_01: And,
9:24
SPEAKER_01: you know,
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SPEAKER_01: I think something like the,
9:26
SPEAKER_01: according to Newsy's top 10 games,
9:28
SPEAKER_01: but all the other ones and pairs,
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SPEAKER_01: all those sort of ones have the same.
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SPEAKER_01: the top games are all eight years old plus.
9:34
Convincing particularly younger people to move from one machine
9:37
to the other,
9:38
SPEAKER_01: it's just,
9:39
SPEAKER_01: I have to imagine,
9:40
SPEAKER_01: and this is something,
9:41
SPEAKER_01: I know Sony are talking about this,
9:42
SPEAKER_01: something that's challenging,
9:44
SPEAKER_01: and it seems to be taking longer.
9:47
SPEAKER_01: That's not really a question.
9:49
SPEAKER_00: It was more of a... Look, I think it's actually a really unique problem.
9:53
Some of this is just that the graphical or the perceived
9:56
customer value of those
9:57
SPEAKER_00: incremental upgrades has obviously been compressing over time.
10:00
SPEAKER_00: But separate from that fact,
10:01
SPEAKER_00: we can actually think of a number of different levers or disadvantages.
10:04
SPEAKER_00: Number one is...
10:05
SPEAKER_00: Many games on Gen 8 consoles are still 60 bucks a pop.
10:08
SPEAKER_00: So in this instance,
10:09
SPEAKER_00: you're saying,
10:09
should I upgrade to a Gen 9 console at a cost of 300 to $500
10:14
plus tax to then pay
10:16
SPEAKER_00: an extra 10 bucks per unit?
10:18
SPEAKER_00: There's another aspect,
10:19
SPEAKER_00: which is kind of the strangeness of saying,
10:22
SPEAKER_00: if 90% of your gameplay is playing a free-to-play game,
10:26
it's particularly bizarre to say I'm going to spend $500 in
10:30
order to keep playing
10:31
SPEAKER_00: that free game.
10:32
SPEAKER_00: And then,
10:33
SPEAKER_00: of course,
10:34
SPEAKER_00: you have perhaps very strange tail effect,
10:37
SPEAKER_00: but which is,
10:37
SPEAKER_00: I think,
10:37
SPEAKER_00: still relevant,
10:38
SPEAKER_00: which is I play a lot of the major BRs.
10:42
SPEAKER_00: And of course, many of the best players, they really care about FPS.
10:45
SPEAKER_00: And so, of course, that drives them to PC over console.
10:48
But many of them deliberately downgrade their graphics for
10:51
competitive reasons.
10:52
SPEAKER_00: So you actually have a weird reason,
10:54
SPEAKER_00: which is to say,
10:54
putting aside the fact that many people don't incrementally
10:57
value Gen 9 consoles at
11:00
SPEAKER_00: their cost over Gen 8 consoles,
11:02
SPEAKER_00: which have no incremental cost.
11:03
SPEAKER_00: They already own the device.
11:05
SPEAKER_00: Many of them are saying,
11:06
I actually don't want that incremental graphical fidelity on
11:09
the games that I play
11:10
SPEAKER_00: most of the time,
11:11
SPEAKER_00: making the purchase even harder still.
11:13
SPEAKER_01: I found the games that did quite well last year.
11:16
SPEAKER_01: really interesting.
11:17
SPEAKER_01: So until the new games,
11:18
SPEAKER_01: like something like 78% of the market last year were old games,
11:22
SPEAKER_01: but Helldivers 2.
11:27
SPEAKER_01: Yeah.
11:27
SPEAKER_01: 440,000 Space Marine 2, which caught me by surprise.
11:30
SPEAKER_01: Then Black Myth.
11:31
SPEAKER_01: Some of these games,
11:32
they either were doing something quite new or they were doing
11:35
something we hadn't
11:36
SPEAKER_01: seen for a while.
11:37
I think Space Marine 2 felt like a sort of Xbox 360 game
11:40
brought up to date.
11:41
SPEAKER_01: Whereas there were the games that you would have banked on,
11:44
SPEAKER_01: I think,
11:44
SPEAKER_01: going into the year,
11:45
SPEAKER_01: Star Wars,
11:45
SPEAKER_01: Outlaws,
11:46
SPEAKER_01: Final Fantasy,
11:46
SPEAKER_01: Dragon Age.
11:48
SPEAKER_01: Those are the three that jumped to mind that really missed.
11:51
SPEAKER_01: Some of them scraped the top 50.
11:53
SPEAKER_01: Some of them didn't even do that.
11:54
We're talking about the visual fidelity of the new consoles and
11:57
the power of them.
11:57
SPEAKER_01: But it seems that what gamers,
11:59
SPEAKER_01: at least the audience,
12:00
SPEAKER_01: seem to,
12:00
SPEAKER_01: if they're going to jump from whatever it is they're playing,
12:03
SPEAKER_01: if they're going to try something new,
12:05
They need to be given something that's notably different to
12:07
what it is they've
12:08
SPEAKER_01: experienced or they have been experiencing.
12:10
SPEAKER_01: I think that's my takeaway from it.
12:12
The industry is so contradictory that it's difficult to draw
12:16
those conclusions.
12:17
SPEAKER_01: But it's certainly how I felt about 2024 because the games that did well,
12:20
SPEAKER_01: I did not predict would do well.
12:22
SPEAKER_01: And the games that, well, not as well as they did.
12:24
And the games that sort of missed,
12:26
I had anticipated being amongst the best sellers of the year.
12:30
SPEAKER_01: It was a weird year.
12:31
SPEAKER_01: I thought 2024 was strange.
12:34
2023,
12:34
Hogwarts Legacy,
12:35
Diablo and Zelda and Spider-Man were doing very well.
12:38
SPEAKER_01: You could have put money on those, but 2024 just seemed unusual to me.
12:43
SPEAKER_01: Again, not a question.
12:46
I found it really fascinating to write about,
12:49
but difficult to draw a conclusion from.
12:51
SPEAKER_00: Yeah, I mean, look, I think you're right.
12:53
SPEAKER_00: There's this...
12:54
SPEAKER_00: Not to get into heady business strategy, right?
12:57
SPEAKER_00: But there's this general idea of job to be done theory,
13:00
which is a repackaging of ideas that have existed in management
13:03
theory for decades.
13:03
But it basically says the purchase of any product is to meet
13:07
the job that someone
13:08
SPEAKER_00: is hiring them to do,
13:09
SPEAKER_00: which is to say,
13:10
SPEAKER_00: Chris,
13:11
SPEAKER_00: when you say,
13:11
SPEAKER_00: I want a new video game,
13:13
SPEAKER_00: what is it that you're actually asking for,
13:15
SPEAKER_00: right?
13:16
And it's rare that you would say,
13:17
I'm looking for a game to show me hyper realism.
13:20
SPEAKER_00: It's rare that you actually say,
13:21
SPEAKER_00: I'm looking for a game that is going to tell me a cinematic story.
13:25
SPEAKER_00: I'm not saying that those elements aren't important.
13:27
SPEAKER_00: And I certainly wouldn't say that for some titles,
13:29
it isn't an essential element of how they communicate their
13:32
entire package.
13:33
SPEAKER_00: But for most people who are now many,
13:35
SPEAKER_00: many years in to these top titles,
13:38
SPEAKER_00: these worlds,
13:39
SPEAKER_00: they may be thousands of hours,
13:41
SPEAKER_00: thousands of dollars.
13:42
SPEAKER_00: They may have built much of their social and cultural identity,
13:45
SPEAKER_00: especially in high school or college around those titles,
13:48
SPEAKER_00: be it Fortnite,
13:49
SPEAKER_00: COD or Madden.
13:51
SPEAKER_00: The question is, what are they asking from a new game?
13:54
SPEAKER_00: And I do think that when you look at that level of entrenchment,
13:57
SPEAKER_00: which,
13:57
SPEAKER_00: by the way,
13:58
SPEAKER_00: is also put alongside skill mastery,
14:00
SPEAKER_00: they feel good.
14:01
SPEAKER_00: They know how to play the game.
14:02
SPEAKER_00: They can be one of the best at the game.
14:04
SPEAKER_00: That question is, what am I asking for from a new experience?
14:08
And I do think that the last two years have really narrowed in
14:10
on the idea of I am
14:12
SPEAKER_00: looking for a new experience from that new experience,
14:14
SPEAKER_00: if you know what I mean.
14:16
That doesn't mean that they still don't want something remixed
14:18
that is brilliant in
14:19
its own right in a way that they're familiar with perhaps a
14:22
decade ago or more,
14:24
which is to say we all know that Super Mario Galaxy 2 is one of
14:26
the best titles
14:27
SPEAKER_00: Nintendo has ever produced.
14:29
And obviously Astro Bot brought together a lot of the best
14:32
ideas of those classic
14:33
SPEAKER_00: Nintendo titles,
14:35
SPEAKER_00: both on the IP mashup and more side.
14:38
But that was...
14:39
I'm looking for a new experience that I hadn't had in quite
14:41
some time.
14:43
SPEAKER_01: Yeah.
14:43
SPEAKER_01: It's a new experience that...
14:45
SPEAKER_01: It might not be new, but it's certainly one that I haven't had.
14:48
SPEAKER_01: For me,
14:50
SPEAKER_01: one of the big indie hits of last year was a game called Undisputed,
14:52
SPEAKER_01: which was a boxing game.
14:53
SPEAKER_01: There hadn't been one yet.
14:54
SPEAKER_00: There were a lot of those in the 80s and 90s, yeah.
14:57
SPEAKER_00: And then they moved out.
15:00
SPEAKER_01: Let's talk about growth areas.
15:01
SPEAKER_01: I think you spent 108 pages in the report chatting about that.
15:04
And one of the areas that I get the sense that you really are a
15:07
bit of a believer
15:08
in UGC getting the Roblox and Fortnite as a potential growth
15:15
area for the games industry,
15:16
SPEAKER_01: a significant growth area for the video games.
15:18
SPEAKER_01: Is that fair?
15:18
SPEAKER_00: Have I got that right?
15:20
It's an interesting question,
15:22
partly because you're asking this question of,
15:25
SPEAKER_00: Well, yes.
15:25
SPEAKER_00: Am I a significant believer?
15:27
SPEAKER_00: I will tell you,
15:28
I don't spend a lot of time personally playing Roblox or even
15:30
UEFN titles for that matter.
15:32
SPEAKER_00: What I do think is nevertheless obvious,
15:34
SPEAKER_00: and this is where I would separate believer versus observer and admirer,
15:37
SPEAKER_00: is we have an industry that for three years has not grown.
15:41
SPEAKER_00: And in fact, by most measures in most
15:44
SPEAKER_00: Western and developed economies.
15:45
There are fewer regular players of video games than there were
15:48
two years ago,
15:49
SPEAKER_00: one year ago,
15:49
SPEAKER_00: three years ago.
15:50
SPEAKER_00: And in the United States,
15:51
SPEAKER_00: if you can believe it,
15:52
SPEAKER_00: there are fewer people playing video games a week than in 2019.
15:56
A common retort to video gaming's compression over the last few
15:59
years was,
16:00
SPEAKER_00: of course,
16:01
SPEAKER_00: we were going to come down from the pandemic high.
16:03
SPEAKER_00: And I need to say,
16:04
SPEAKER_00: no,
16:04
SPEAKER_00: actually,
16:04
SPEAKER_00: participation rates in the United States are below pre-pandemic levels.
16:08
SPEAKER_00: That
16:09
SPEAKER_00: is what's really astounding.
16:11
SPEAKER_00: And so putting that all aside,
16:13
when you're then looking at these UGC platforms and you're
16:16
saying year after year
16:17
SPEAKER_00: after year,
16:18
SPEAKER_00: we are seeing 20% growth,
16:21
SPEAKER_00: sometimes even higher on a user basis.
16:23
SPEAKER_00: So you're saying growing remarkably faster than the market,
16:26
SPEAKER_00: growing consistently so,
16:29
SPEAKER_00: and their user bases are as enormous as they are.
16:32
SPEAKER_00: By some measures, Roblox is now near 425 million MAUs.
16:38
SPEAKER_00: They are delivering more hours of engagement than the entirety of Steam.
16:43
SPEAKER_00: In fact,
16:43
SPEAKER_00: you can add up the Switch,
16:45
PlayStation and Xbox together and they are less played and
16:50
certainly have fewer
16:51
SPEAKER_00: daily or fewer monthly and nearly as many daily users as Roblox.
16:55
SPEAKER_00: If you add those three things together,
16:57
SPEAKER_00: its size,
16:58
SPEAKER_00: its regularity of growth and the size of its growth,
17:00
it's hard for me to say that I'm not a believer in it as an
17:04
important growth engine
17:05
SPEAKER_00: for the industry.
17:06
SPEAKER_00: If you then say,
17:08
SPEAKER_00: It also happens to be at the top of the funnel,
17:11
SPEAKER_00: or that is to say the bottom of the age pyramid,
17:14
SPEAKER_00: and it is therefore onboarding hundreds of millions.
17:18
SPEAKER_00: I think that's a reason for optimism.
17:19
I do think many of those players will scatter to what we
17:22
traditionally call games,
17:24
SPEAKER_00: but that's good too.
17:25
SPEAKER_00: It makes it a growth engine by indirect measures.
17:28
I used to work for IGN,
17:29
and one of IGN's websites is VG247,
17:33
and they have these code pages.
17:34
SPEAKER_01: They do generate a lot of traffic.
17:37
SPEAKER_01: These codes are codes that offer free coins and stuff in games.
17:40
SPEAKER_01: And amongst their top performing code pages,
17:43
SPEAKER_01: some of them the obvious ones,
17:44
SPEAKER_01: but are Bloxfruits,
17:46
SPEAKER_01: Bluecox Rivals,
17:47
SPEAKER_01: Basketball Legends,
17:49
SPEAKER_01: all Roblox games.
17:50
SPEAKER_01: To people of a certain age, I think that's a bit of a blind spot.
17:54
At TGB,
17:54
we've been speaking to a load of investors,
17:55
and there's some investors...
17:57
SPEAKER_01: unsure about if developers there might be investing in,
18:00
SPEAKER_01: who are Roblox developers,
18:02
SPEAKER_01: whether or not they can break out of Roblox.
18:04
SPEAKER_01: Although one investor doesn't think they need to.
18:06
It was a really fascinating discovery that everyone seems quite
18:09
interested in this,
18:10
particularly in terms of bringing through new talent and
18:12
developing new game
18:13
SPEAKER_01: developers and lowering the barrier there.
18:16
SPEAKER_01: But it seems if the consumer is in,
18:19
if the problem is that gamers are playing these live service
18:21
games and not leaving them,
18:22
SPEAKER_01: well,
18:23
SPEAKER_01: putting the games within these services feels like a
18:26
SPEAKER_01: It feels like the solution.
18:28
SPEAKER_01: I don't know.
18:29
SPEAKER_01: It's certainly interesting.
18:30
SPEAKER_01: But it's interesting.
18:31
SPEAKER_01: Best has also brought up things like Telegram games and Discord games.
18:35
I mean,
18:36
I look at those and I immediately think of Facebook gaming from 15,
18:41
20 years ago.
18:41
SPEAKER_01: I'm a bit cynical.
18:42
But there seems to be certainly ways of reaching audiences that
18:47
isn't just those
18:48
SPEAKER_01: existing digital platforms.
18:50
SPEAKER_01: It seems to be exciting investors at the minute.
18:53
Anyway,
18:53
we can kind of table the investor side,
18:55
though I think it's certainly very relevant.
18:57
SPEAKER_00: But you brought up a point earlier,
18:58
SPEAKER_00: which is really over 20 years and going on a quarter century.
19:03
SPEAKER_00: The console install base has not grown, not on a unique basis.
19:07
And to the extent in which we found any growth,
19:09
it's primarily in rest of the world in Japan.
19:12
SPEAKER_00: We're not seeing it in North America.
19:13
SPEAKER_00: We're not seeing it in Western Europe.
19:15
SPEAKER_00: And it's largely limited to the Nintendo Switch, which is to say that
19:21
SPEAKER_00: I love console gaming.
19:22
SPEAKER_00: That's most of my time.
19:23
I recognize the supremacy of PC,
19:25
but I will tell you,
19:25
I have three consoles in my house.
19:26
SPEAKER_00: They get all regular use,
19:27
and that's the first place that I go to play most
19:29
multi-platform and cross-platform games.
19:32
I know that I'm going to end up buying a PlayStation 6 and the
19:34
next generation Xbox,
19:36
and yet...
19:37
SPEAKER_00: we should recognize that that growth hasn't occurred.
19:40
We should also recognize that mobile gaming apps as
19:43
traditionally defined,
19:44
SPEAKER_00: things that people download from the app store,
19:47
SPEAKER_00: those aren't really growing now either.
19:49
SPEAKER_00: And so I think it's not so much a question of what do investors want.
19:52
SPEAKER_00: I think it's instead a stark realization of the reality, which is,
19:56
SPEAKER_00: Those other areas of gaming aren't actually growing.
19:59
SPEAKER_00: There aren't more players.
20:00
SPEAKER_00: They're increasingly concentrated on a few titles.
20:03
SPEAKER_00: And if you are trying to reach new gamers,
20:05
which is probably the most important thing you can do to
20:08
restore growth in the industry,
20:09
SPEAKER_00: or you want to reach players that do play other games,
20:13
but in a world in which you're not asking them to close out of
20:17
their Fortnite or
20:17
SPEAKER_00: COD application and boot up something new,
20:20
SPEAKER_00: that those new avenues are going to be pretty important.
20:23
SPEAKER_00: The other thing that I will say,
20:24
SPEAKER_00: and it's funny,
20:25
SPEAKER_00: we were talking earlier about how many slides are in the deck.
20:27
There's one slide that I added about two weeks after I released
20:30
the publication
20:31
SPEAKER_00: because I was just screwing around with some of the data.
20:34
SPEAKER_00: If you can believe it,
20:35
SPEAKER_00: the top two titles on Roblox,
20:37
SPEAKER_00: Bloxfruits being one that you mentioned,
20:39
SPEAKER_00: and then Brookhaven RP,
20:41
SPEAKER_00: which just sold,
20:41
SPEAKER_00: though we don't know the price.
20:43
Each of those has roughly 60% of the monthly hours of
20:47
engagement of the entirety of
20:50
SPEAKER_00: Electronic Arts.
20:51
SPEAKER_00: They are 60% the size of Fortnite Battle Royale.
20:54
SPEAKER_00: They're 75% the size of all of Blizzard.
20:55
SPEAKER_00: They're 85% of the size of all of Counter-Strike.
21:01
And so it's not just that we're asking this abstract question
21:04
of are there new players,
21:05
SPEAKER_00: new times and new experiences?
21:06
It's actually that these titles are already as large and in
21:10
some instances larger
21:12
SPEAKER_00: than some of the most dominant,
21:14
SPEAKER_00: enviable gaming ecosystems of the last quarter century,
21:17
SPEAKER_00: if not longer.
21:18
SPEAKER_00: Now, the question of how much growth is there?
21:21
SPEAKER_00: Is there enough opportunity for new developers?
21:24
SPEAKER_00: What are the economic limitations of that?
21:26
SPEAKER_00: All of those are relevant concerns,
21:28
but we are now really over the last two years at a point in
21:31
which the comparable
21:32
size of these platforms now allow you to outstrip any other
21:36
opportunity in success.
21:39
Let's talk about console a little bit because we have a new
21:42
one's about to come out
21:43
SPEAKER_01: in Nintendo Switch 2.
21:45
SPEAKER_01: I mean, in your report, talk about
21:48
SPEAKER_01: how it's potentially exciting for third parties.
21:52
SPEAKER_01: People still buy Nintendo consoles for Nintendo games.
21:55
I think if anything,
21:56
I think Nintendo just leaned into that with the Switch in quite
21:58
a big way.
22:00
Do you see much potential for outside of Nintendo to find
22:04
success on there?
22:06
SPEAKER_00: Look, I agree with your frame.
22:07
SPEAKER_00: It's important to put this into numbers, right?
22:10
The average console usually has about for every 10 units of
22:12
software that are purchased,
22:13
SPEAKER_00: only one is made by the platform themselves.
22:16
In the case of Nintendo,
22:18
it's nearly six in every 10 is made by Nintendo.
22:22
And that's even excluding some of their de facto second party relationships,
22:26
SPEAKER_00: those who only produce for the Nintendo Switch.
22:28
SPEAKER_00: And so that is to say that for the most part,
22:30
SPEAKER_00: the second most successful console of all time,
22:33
SPEAKER_00: perhaps soon to be the most successful console of all time,
22:36
SPEAKER_00: they're not even per se buying it for the form factor innovations.
22:39
SPEAKER_00: Not that those aren't important, but they're mostly buying it because
22:43
Nintendo has made some of the best titles of all time and in
22:46
incredible volumes and
22:47
SPEAKER_00: you can only get them on the device and the device is affordable.
22:50
It's not clear how many people are saying I want a portable
22:53
games device or how
22:55
many people are saying that I'm looking to play multi-platform
22:59
or cross-platform
22:59
SPEAKER_00: titles and the Switch is the device that I'd like to do it on.
23:01
SPEAKER_00: They're mostly saying I need to,
23:03
SPEAKER_00: I want to,
23:04
SPEAKER_00: and the only games I'd like to play are Nintendo Switch.
23:07
SPEAKER_00: Obviously, many of us have all consoles.
23:09
SPEAKER_00: And so that model is the most important or that strategy,
23:13
that success is the most important thing that Nintendo has for
23:16
the Nintendo Switch 2.
23:17
And so we should not think of the fact that the Nintendo Switch
23:20
2 can run most
23:22
third party titles sufficiently as this massive new blue ocean
23:27
opportunity for
23:27
SPEAKER_00: third party publishers.
23:29
SPEAKER_00: At the same time,
23:31
nearly all of the most popular titles globally have not been
23:34
available on the
23:35
SPEAKER_00: Nintendo Switch for the last eight years it's been out.
23:39
SPEAKER_00: That means that many of the highest spending,
23:41
SPEAKER_00: highest engagement,
23:42
SPEAKER_00: youngest and therefore lifetime brand building consumers
23:47
SPEAKER_00: have been inaccessible.
23:49
And so that's definitely a meaningful increase opportunity for
23:51
third party publishers.
23:53
SPEAKER_00: And yet at the same time, it's going to be available to all of them.
23:55
SPEAKER_00: So it's now going to be a new hotly contested platform as opposed to,
24:00
SPEAKER_00: you know,
24:00
SPEAKER_00: potentially a hundred million customers you couldn't reach before,
24:03
SPEAKER_00: but now can,
24:04
SPEAKER_00: which is to say,
24:04
SPEAKER_00: I think it's going to be mixed.
24:06
SPEAKER_01: Yeah.
24:06
SPEAKER_01: Yeah.
24:06
SPEAKER_01: I think it's, it's,
24:09
SPEAKER_01: is one of the civilization developers.
24:11
So this,
24:12
you know,
24:12
Civ 7 was,
24:13
is it Civ 7 the one that came out this year?
24:14
Rather than launching on PC first,
24:16
they did multi-platforms this time around.
24:19
SPEAKER_01: And one of the platforms was Switch.
24:20
SPEAKER_01: And apparently that was because of Switch.
24:22
SPEAKER_01: It really inspired,
24:24
they changed their entire development pipelines because Civ on
24:27
Switch did so well
24:28
SPEAKER_01: for them,
24:29
SPEAKER_01: so much better than expected.
24:30
SPEAKER_01: But most importantly, what they found was it was actually PC gamers that
24:33
SPEAKER_01: bought the game again to take it with them.
24:36
SPEAKER_01: They had this... I've done that.
24:38
I've played Tony Hawk's Pro Skater on my PlayStation because I
24:40
want that high-end
24:41
SPEAKER_01: 60 frames per second experience,
24:43
SPEAKER_01: but I loved the game so much I wanted to take it with me,
24:46
SPEAKER_01: so I did.
24:46
SPEAKER_00: I mean, this is how GTA shipped 200 million units, right?
24:50
SPEAKER_00: It's...
24:51
SPEAKER_00: How many people have bought it two, three times?
24:54
SPEAKER_00: Yeah.
24:55
SPEAKER_01: Oh, yeah.
24:55
SPEAKER_01: And we touched upon a subject there,
24:56
SPEAKER_01: which I wasn't going to ask about,
24:57
SPEAKER_01: but you brought it up,
24:58
SPEAKER_01: which is these form factors,
25:00
SPEAKER_01: these handheld form factors.
25:01
SPEAKER_01: I've got two young children.
25:02
SPEAKER_01: The amount of time I spend on gaming,
25:04
one of the things I think the problem with console gaming is
25:05
people egg out of it.
25:07
SPEAKER_01: I think they get to a point where people just have less time,
25:11
and maybe they don't feel the need to upgrade to the next
25:13
console straight away,
25:14
SPEAKER_01: and they do eventually,
25:15
SPEAKER_01: and then the following one they don't get as whole.
25:17
SPEAKER_01: My own personal experience is here.
25:21
SPEAKER_01: What changed for me,
25:21
SPEAKER_01: what got me back into gaming was the ability to...
25:24
SPEAKER_01: And I know handheld games,
25:25
SPEAKER_01: this is forever.
25:27
But the ability to play console-level video games on Waco was
25:31
transformative for me
25:31
SPEAKER_01: in my gaming.
25:33
And you're starting to see some success in Steam,
25:35
nothing to the Switch level.
25:36
But I do feel that sometimes that flexibility,
25:38
that ability to tap into...
25:41
SPEAKER_01: There's something old school about the Switch.
25:42
SPEAKER_01: It's still a physical dominated device.
25:46
SPEAKER_01: Most people buy games in box.
25:48
SPEAKER_01: I don't have any data to back it up.
25:49
SPEAKER_01: Maybe you do.
25:50
But I feel it's just the machine that just appeals to slightly
25:53
older people that
25:54
SPEAKER_01: perhaps previously didn't have that time to game.
25:57
SPEAKER_01: And I think perhaps that's something that Microsoft's noticed,
25:59
SPEAKER_01: Sony's noticed with their portal as well,
26:01
SPEAKER_01: that there's an opportunity there to...
26:04
SPEAKER_01: stop people from lapsing out perhaps of the ecosystem.
26:08
SPEAKER_01: I don't really, I didn't have a question around that.
26:09
SPEAKER_01: It was just something that I've had.
26:11
SPEAKER_01: Yeah.
26:11
SPEAKER_00: This is kind of one of the reasons why we were talking earlier about the
26:15
SPEAKER_00: however many hundred thousand foot view to the gaming industry.
26:17
And I think that's something that's been happening at all of
26:19
the platforms and publishers.
26:20
We saw that with Square Enix saying it's no longer sustainable
26:23
to be tied to the
26:23
SPEAKER_00: PlayStation ecosystem.
26:25
SPEAKER_00: Microsoft is very obviously trying to get on all devices.
26:28
SPEAKER_00: Even Sony's strategy continues to evolve,
26:30
not just in the fact that they're publishing on PC and
26:33
publishing faster than ever,
26:35
but they've unlocked the PlayStation portal so that you no
26:38
longer have to be on
26:38
SPEAKER_00: your home Wi-Fi.
26:40
SPEAKER_00: That is,
26:40
SPEAKER_00: I think,
26:40
SPEAKER_00: in most regards,
26:42
a reflection and observation and understanding digestion
26:44
acceptance of a lot of
26:46
SPEAKER_00: what we were talking about earlier,
26:47
SPEAKER_00: which is the console base has not grown.
26:49
SPEAKER_00: Time has actually, in many regards, shrunk.
26:52
SPEAKER_00: And at a certain point,
26:54
you stop moving from what will the next generation do to change
26:57
that to what other
26:58
SPEAKER_00: things do we need to have to change that?
27:01
And when you take a look at some of what Herman Holst was
27:04
talking about the
27:04
SPEAKER_00: PlayStation Portal,
27:06
SPEAKER_00: we don't know how many units have shipped.
27:07
SPEAKER_00: The odds are it's only a few million.
27:09
SPEAKER_00: It looks like the Steam Deck only has two to three million units.
27:12
SPEAKER_00: And so these aren't enormous,
27:14
SPEAKER_00: but what we know is they,
27:15
SPEAKER_00: by definition,
27:16
SPEAKER_00: skew to the most avid gamers.
27:19
SPEAKER_00: Those who spend the most, those who...
27:22
SPEAKER_00: spend the most time, those who have the largest social graphs.
27:25
SPEAKER_00: And so you might be able to say,
27:27
SPEAKER_00: we have 6 million PlayStation 5 customers,
27:29
SPEAKER_00: only 3 million have a PlayStation portal,
27:31
but that's probably not just a 5% increase or hit rate on your
27:36
base on a time
27:36
SPEAKER_00: adjusted or spend adjusted basis.
27:38
SPEAKER_00: Maybe it's 10 or 12.
27:40
SPEAKER_00: And so if you say that we need to find a way to find growth,
27:44
SPEAKER_00: reverse player loss,
27:45
SPEAKER_00: reverse player time loss,
27:47
SPEAKER_00: enrich our ecosystem,
27:48
SPEAKER_00: and frankly,
27:49
recoup on development budgets that continue to grow while our
27:52
addressable base does not,
27:54
SPEAKER_00: I think that that becomes a really powerful and significant opportunity.
27:57
SPEAKER_00: And the fact that you,
27:59
SPEAKER_00: to your point,
28:00
no longer have to really dive deep into your builds to fork it
28:04
to run on these devices,
28:06
means that the incremental cost ends up being pretty marginal
28:09
relative to that opportunity.
28:11
SPEAKER_00: That all kind of checks out to me.
28:13
SPEAKER_00: That makes sense.
28:15
SPEAKER_01: Do you see mobile as a potential home for console style AAA games?
28:23
SPEAKER_00: Absolutely.
28:24
SPEAKER_00: And I think that the... Well, look, do I see it?
28:27
SPEAKER_00: Absolutely.
28:28
SPEAKER_00: Yes.
28:28
SPEAKER_00: Let's keep in mind that there's 3 billion mobile devices.
28:30
I'm not a person who will tell you that I think 5% of the
28:33
global population is
28:34
SPEAKER_00: going to want to play single A,
28:35
SPEAKER_00: double A or triple A games on there as we define them today,
28:39
SPEAKER_00: right?
28:39
SPEAKER_00: Running on a console.
28:41
SPEAKER_00: on a mobile device.
28:42
SPEAKER_00: And yet when we're talking about 3 billion,
28:43
SPEAKER_00: I do believe that we can have a pre-material impact on those devices.
28:47
SPEAKER_00: And we already have a lot of evidence there.
28:49
I think one under-reported fact is when MiHoYo launched their
28:54
second wave of
28:55
SPEAKER_00: platform expansions for Genshin Impact,
28:57
SPEAKER_00: they said,
28:57
SPEAKER_00: we're gonna launch on Nintendo Switch.
28:59
SPEAKER_00: Guess what?
28:59
SPEAKER_00: They never did.
29:00
SPEAKER_00: They just canceled it.
29:01
SPEAKER_00: They didn't bother.
29:02
SPEAKER_00: Why?
29:03
Because they clearly came to the conclusion that there is no
29:06
likely customer of
29:07
Genshin Impact who doesn't play because they don't have a
29:12
Nintendo Switch.
29:13
SPEAKER_00: Many of those consumers will play.
29:16
SPEAKER_00: And so cognizant of the fact that we've long heard people say,
29:20
SPEAKER_00: what if Resident Evil went there?
29:21
SPEAKER_00: And we know that hasn't worked.
29:22
And I think there are reasons why that will and won't change in
29:24
the future.
29:25
But it's already clear through the success of PUBG or Free Fire
29:30
or Fortnite mobile
29:31
SPEAKER_00: back in the day,
29:33
plus growing success of which platforms are being skipped over
29:35
and the fact that it
29:36
SPEAKER_00: doesn't matter,
29:37
SPEAKER_00: that that player base can be pretty meaningful as well.
29:40
SPEAKER_00: I tend to believe
29:42
that in five or six years when there are a billion people who
29:45
can play EA FC on
29:48
SPEAKER_00: their iPhone or iPad,
29:50
SPEAKER_00: that we may not see tens of millions of people buying it.
29:53
SPEAKER_00: And certainly I don't think they're going to do it at a $70 price point.
29:57
But do I believe that there's a meaningful growth opportunity
30:00
for EA that stems
30:02
from the fact that you can finally reach most of the global
30:05
fans for football
30:07
without asking them to have a console or gaming PC and that
30:10
they can take it anywhere?
30:10
SPEAKER_00: You bet.
30:12
I was going to bring up Resident Evil because obviously it
30:15
hasn't worked.
30:16
SPEAKER_01: Well, it hasn't worked for those games.
30:20
SPEAKER_00: Chris, so this is interesting.
30:22
SPEAKER_00: When we say it hasn't worked, right, that's true.
30:25
SPEAKER_00: But there's a weird question,
30:26
SPEAKER_00: which is,
30:27
SPEAKER_00: okay,
30:29
the only people who can actually play Resident Evil on an
30:31
iPhone have to have
30:32
SPEAKER_00: bought the very,
30:33
SPEAKER_00: very highest end iPhone over the last two years.
30:36
SPEAKER_00: There's roughly 40 million people who have that device.
30:39
SPEAKER_00: The device, by the way, costs $1,600 or $1,700 all day.
30:42
And so fundamentally,
30:43
how many of those 40 million people actually play video games?
30:47
SPEAKER_00: The answer is not going to be many.
30:48
SPEAKER_00: And then we have the secondary question,
30:50
which is how many of those who would buy a Resident Evil game
30:54
and have that device
30:55
SPEAKER_00: haven't already bought it?
30:58
SPEAKER_00: And then there's that third thing,
30:59
which is how many of the people who might like Resident Evil
31:02
games generally,
31:03
SPEAKER_00: as in abstract FPS,
31:06
SPEAKER_00: or third person if you want,
31:08
SPEAKER_00: depending on the title,
31:09
SPEAKER_00: games,
31:10
SPEAKER_00: but ARRI isn't for them.
31:12
SPEAKER_00: And I think all of those start to become...
31:14
SPEAKER_00: pretty meaningful discounts.
31:16
SPEAKER_00: In contrast,
31:17
SPEAKER_00: if we said in 2030,
31:19
SPEAKER_00: you had a title that was simultaneously released on mobile devices,
31:24
SPEAKER_00: that is to say it had never been accessible previously,
31:27
SPEAKER_00: that reaches nearly all of the mid-core
31:30
and up audience,
31:31
I think you'd see,
31:32
again,
31:33
material,
31:34
not massive,
31:34
but material sales.
31:36
SPEAKER_00: And this is where I love to remind people that Free Fire alone,
31:40
SPEAKER_00: a mobile-only battle royale,
31:42
SPEAKER_00: has 50% more daily players than Fortnite has monthly players.
31:47
It is kind of impossible for the average Western shooter game
31:51
player or Fortnite
31:52
player or COD or Warzone Apex player to believe that there's
31:57
150 million people
31:58
SPEAKER_00: playing Free Fire mobile games.
32:00
SPEAKER_00: every day, primarily on low-end Androids, not iPads, and yet they are.
32:06
SPEAKER_00: And so part of this is just an audience question.
32:08
SPEAKER_00: Oh,
32:08
SPEAKER_00: I should add the other filter,
32:09
SPEAKER_00: which is the people who all have that highest end iPhone,
32:13
SPEAKER_00: again,
32:14
SPEAKER_00: for $1,600 or $1,700,
32:16
SPEAKER_00: nearly none of them are the people who today play high fidelity,
32:20
SPEAKER_00: de facto hardcore mobile games,
32:21
SPEAKER_00: because most of those sit in Indonesia and India,
32:24
SPEAKER_00: Latin and South America.
32:26
SPEAKER_00: They certainly can't afford one of those iPhones today.
32:29
SPEAKER_00: You had an answer.
32:30
SPEAKER_00: I like that.
32:32
SPEAKER_00: You've been challenged on that before.
32:34
SPEAKER_00: Well,
32:35
I'm also cognizant of the fact that this is also one of those
32:37
things like cloud
32:39
SPEAKER_00: that has always been the,
32:41
SPEAKER_00: well,
32:41
SPEAKER_00: if not next year,
32:41
SPEAKER_00: the year after that.
32:43
SPEAKER_00: And that often holds and sometimes eventually breaks.
32:47
SPEAKER_01: I was going to ask about streaming.
32:48
SPEAKER_01: Are we going to get there?
32:49
Because surely that's the bit about lowering the barrier to
32:51
entry to make it easier
32:52
SPEAKER_01: for more people to play games.
32:54
SPEAKER_01: That's got to be the thing, is it?
32:57
SPEAKER_00: Not in my view.
32:59
SPEAKER_00: There's this interesting line that Tim Sweeney,
33:01
SPEAKER_00: the founder and CEO of Epic,
33:03
SPEAKER_00: had a few years ago that I've been joyfully calling Sweeney's Law,
33:07
SPEAKER_00: which goes something like,
33:07
efforts to place real-time processing on the wrong time of the
33:12
latency wall are
33:13
bound to fail because while networking infrastructure and
33:17
latency are improving,
33:19
SPEAKER_00: it's improving more slowly than processing.
33:21
SPEAKER_00: Which is to say,
33:22
SPEAKER_00: yes,
33:23
all of the technical problems that we're facing with cloud game
33:25
streaming are improving,
33:27
SPEAKER_00: but the chips on our phone are improving faster,
33:32
SPEAKER_00: which is kind of the conversation that we were just having,
33:34
SPEAKER_00: which is right now my iPhone can play basically a...
33:39
SPEAKER_00: stock iPhone 4 specs.
33:41
SPEAKER_00: I'm cheating a little bit,
33:42
SPEAKER_00: but for all intents and purposes,
33:43
SPEAKER_00: you can play what,
33:44
SPEAKER_00: sorry,
33:44
SPEAKER_00: not iPhone 4,
33:45
SPEAKER_00: PlayStation 4.
33:46
SPEAKER_00: PlayStation 4 specs, not a PS4 Pro and certainly not a PS5 Pro.
33:50
And so many of the problems that cloud game streaming is
33:52
intending to solve,
33:54
SPEAKER_00: many,
33:54
SPEAKER_00: not all,
33:55
SPEAKER_00: are being remedied by the fact that by 2030,
33:57
most smartphones will be able to do a decent enough job
34:00
themselves without needing
34:01
SPEAKER_00: to rely on the network.
34:03
And so that's solving the accessibility problem that you mentioned,
34:05
but differently.
34:08
SPEAKER_01: Matthew, I've taken up too much of your time.
34:09
SPEAKER_01: We could talk for hours.
34:10
SPEAKER_01: We could go for another two hours, yeah.
34:12
SPEAKER_01: Yeah, thank you so much.
34:13
The subject of today's show will be a major talking point for
34:16
us going forward.
34:17
SPEAKER_01: So if you want to stay on top of it all,
34:18
SPEAKER_01: please do head to thegamebusiness.com and subscribe to our newsletters.
34:21
SPEAKER_01: And of course,
34:22
SPEAKER_01: sign up to the podcast,
34:23
SPEAKER_01: follow us on social media,
34:25
SPEAKER_01: sign up to our YouTube channel,
34:27
SPEAKER_01: whatever suits you that we're there.
34:29
SPEAKER_01: So thank you all for joining us and thank you again to Matthew.
34:32
SPEAKER_01: Thanks, Chris.
34:34
SPEAKER_01: Is the console market doomed?
34:36
SPEAKER_01: No.
34:37
SPEAKER_01: Will game streaming ever become a mainstream proposition?
34:40
SPEAKER_01: I don't think it's yes or no.
34:43
SPEAKER_01: What's the first thing you do when you get to work in the morning?
34:47
SPEAKER_01: Email.
34:47
SPEAKER_01: Do you think game prices will rise again soon?
34:51
SPEAKER_01: Yes.
34:51
SPEAKER_01: Will Nintendo Switch 2 outsell Switch 1?
34:55
SPEAKER_01: No.
34:55
SPEAKER_01: Best album of all time?
34:57
SPEAKER_00: You know, if I say Led Zeppelin IV, that's probably a Dodge II.
35:00
SPEAKER_00: I haven't thought about the question for too long.
35:02
SPEAKER_00: What is the most exciting game company right now?
35:04
I think anyone who knows me knows that the answer is four
35:06
letters in Epic.
35:07
And what one thing should games companies think about,
35:10
but probably aren't?
35:11
SPEAKER_00: This is the one you had to send me in advance.