Latest / The Game Business Show / Five things we’ve learned about Japan’s games industry, plus how GTA 6 influenced Valor Mortis’ $40 price point

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Five things we’ve learned about Japan’s games industry, plus how GTA 6 influenced Valor Mortis’ $40 price point · The Game Business Show

• 0:00
  SPEAKER_01: This week we investigate the Japanese video games market,
• 0:03
  SPEAKER_01: Lyrical Games explains its $40 price tag for Valor Mortis,
• 0:07
  SPEAKER_01: and Next Playground secures more funding.
• 0:13
  SPEAKER_01: Hello and welcome to The Game Business Show.
• 0:15
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• 0:18
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• 0:58
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• 1:02
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• 1:06
  SPEAKER_01: Speaking of which, let's get back to it.
• 1:08
  SPEAKER_01: So you probably can't tell, but I've just landed in Tokyo for Tokyo Game Show 2026.
• 1:14
  SPEAKER_01: I've never been to Japan before.
• 1:16
  SPEAKER_01: I've not seen much of it, but it's a lovely country so far.
• 1:19
  SPEAKER_01: And we've got a bit of a Japan special for you today.
• 1:21
  SPEAKER_01: We've got Dr.
• 1:22
  SPEAKER_01: Serkan Toto,
• 1:23
  SPEAKER_01: a Japan games consultant and analyst from Canton Games to chat about all things
• 1:28
  SPEAKER_01: about, you know, related to the Japanese video games market and industry.
• 1:32
  SPEAKER_01: Now, when I think about Japanese video game companies in 2026,
• 1:37
  SPEAKER_01: two businesses immediately spring to mind, Capcom and Nintendo.
• 1:40
  SPEAKER_01: Both of them have become poster children of how to do console video games in 2026.
• 1:45
  SPEAKER_01: Both of them are growing companies who consistently deliver hit after hit after hit.
• 1:49
  SPEAKER_01: That's no mean feat in this industry.
• 1:51
  SPEAKER_01: And I think a lot of that comes down to consistency.
• 1:55
  SPEAKER_01: And let's take Nintendo for a moment.
• 1:56
  SPEAKER_01: I really loved their Zelda Direct they did last week.
• 1:58
  SPEAKER_01: And I'm bound to say that because I'm a big fan of Zelda.
• 2:01
  SPEAKER_01: But what was interesting to me was how similar the plans
• 2:04
  SPEAKER_01: for Zelda's 40th anniversary are to Zelda's 25th anniversary.
• 2:08
  SPEAKER_01: I was there during the 25th anniversary of Zelda.
• 2:10
  SPEAKER_01: I did a special edition Zelda magazine of MCV.
• 2:13
  SPEAKER_01: I interviewed Zelda Williams,
• 2:14
  SPEAKER_01: Robin Williams' daughter, who was named after the game during that time.
• 2:18
  SPEAKER_01: And back then,
• 2:19
  SPEAKER_01: Nintendo did a big concert,
• 2:20
  SPEAKER_01: they had a game,
• 2:21
  SPEAKER_01: they had merchandise,
• 2:22
  SPEAKER_01: they had a lot of activity around their old Zelda titles as well.
• 2:26
  SPEAKER_01: And when I look at what they're doing this time, well, it's sort of the same stuff.
• 2:30
  SPEAKER_01: There's a concert, and there's a game, and there's a lot of activity around the old Zelda games.
• 2:35
  SPEAKER_01: But they've added to it, obviously.
• 2:36
  SPEAKER_01: There's now a partnership with LEGO.
• 2:37
  SPEAKER_01: There's even more collaborations with other merchandise companies.
• 2:40
  SPEAKER_01: There's now, of course, a movie.
• 2:41
  SPEAKER_01: You don't get bigger than that.
• 2:43
  SPEAKER_01: As well as some stuff around the museum.
• 2:45
  SPEAKER_01: Nintendo have increased the touch points over the years to become a big organization.
• 2:49
  SPEAKER_01: Its brands have grown.
• 2:50
  SPEAKER_01: But crucially, it's still doing much of the same stuff.
• 2:53
  SPEAKER_01: There's a consistency to it.
• 2:55
  SPEAKER_01: The plans it has this time aren't radically different to the plans it had last time.
• 2:58
  SPEAKER_01: There's just more of it and it goes deeper.
• 3:00
  SPEAKER_01: And Capcom is sort of similar in a way.
• 3:03
  SPEAKER_01: Each of its games are bigger and more ambitious and trying new things,
• 3:05
  SPEAKER_01: but they're also very consistent with what's come before.
• 3:08
  SPEAKER_01: So fans know what to expect and they know that they're going to typically deliver.
• 3:13
  SPEAKER_01: And I think there's a safety and a confidence in those businesses as a result of
• 3:16
  SPEAKER_01: that consistency.
• 3:18
  SPEAKER_01: Well, as you look at some of the big companies in the West,
• 3:21
  SPEAKER_01: Let's take Xbox, which seem to radically change their strategy year after year.
• 3:25
  SPEAKER_01: And yes,
• 3:25
  SPEAKER_01: hopefully the plans they've got now are going to stick to for quite some time,
• 3:29
  SPEAKER_01: but the company keeps changing with each new leadership.
• 3:32
  SPEAKER_01: And that's hard to sort of get your head around,
• 3:34
  SPEAKER_01: both from my point of view,
• 3:36
  SPEAKER_01: from an employee's point of view, and from a fan's point of view.
• 3:39
  SPEAKER_01: Now, leadership is part of that.
• 3:40
  SPEAKER_01: Having people in charge that have been there for a while,
• 3:42
  SPEAKER_01: Nintendo's leadership hasn't actually changed that much.
• 3:44
  SPEAKER_01: Many of the top game makers there were there in the 80s.
• 3:47
  SPEAKER_01: Capcom is still run by the same people.
• 3:50
  SPEAKER_01: Sony's a bit of an interesting one though and they're also largely
• 3:53
  SPEAKER_01: a very consistent business with consistent leadership
• 3:57
  SPEAKER_01: although lately fans have started to feel a bit lost on them and their message used
• 4:00
  SPEAKER_01: to always be you know for the players that was their big thing but right now
• 4:04
  SPEAKER_01: whether it's the news around stopping manufacturing discs or the pivot towards
• 4:07
  SPEAKER_01: and away from live service games or hideo kojima going to xbox a lot
• 4:12
  SPEAKER_01: of fans are feeling a bit unsettled this isn't the playstation they know
• 4:15
  SPEAKER_01: that previously consistent company It's starting to behave a little bit
• 4:19
  SPEAKER_01: against what they would expect.
• 4:21
  SPEAKER_01: Now, a lot of these are temporary issues,
• 4:22
  SPEAKER_01: I'm sure, but I think consistency is more important than people give it credit.
• 4:26
  SPEAKER_01: And I think Japan, in many ways, represents consistency in the video games business.
• 4:31
  SPEAKER_01: But what do I know?
• 4:32
  SPEAKER_01: I'm just a Westerner, a Gaijin.
• 4:34
  SPEAKER_01: Let's talk to somebody who does know.
• 4:36
  SPEAKER_01: His name is Dr. Serkan Toto.
• 4:37
  SPEAKER_01: He's a video game analyst and specializes in the Japanese video games market.
• 4:41
  SPEAKER_01: You may have seen his name crop up in various articles down the years,
• 4:44
  SPEAKER_01: mostly about Japan business.
• 4:45
  SPEAKER_01: And I spoke to him about what's really going on in the country.
• 4:48
  SPEAKER_01: And here he is.
• 4:50
  SPEAKER_02: Welcome.
• 4:50
  SPEAKER_02: Welcome to the show.
• 4:51
  SPEAKER_02: Thank you for having me, Chris.
• 4:52
  SPEAKER_01: Is TGS a busy time for you?
• 4:54
  SPEAKER_02: One of the busiest times of the year, you can say, yeah.
• 4:57
  SPEAKER_02: What's it look like?
• 4:58
  SPEAKER_01: What do you do?
• 4:58
  SPEAKER_02: What do you think up to?
• 5:00
  SPEAKER_02: There's clients coming in from finance.
• 5:03
  SPEAKER_02: They're interested in the publicly traded game companies that we have in Japan.
• 5:08
  SPEAKER_02: I think it's a record number,
• 5:09
  SPEAKER_02: globally speaking,
• 5:10
  SPEAKER_02: even including China,
• 5:11
  SPEAKER_02: 40 to 50 mobile console Game companies are publicly traded in Japan of all sorts,
• 5:19
  SPEAKER_02: of all sizes.
• 5:21
  SPEAKER_02: And then the other client group that I have are basically game companies
• 5:25
  SPEAKER_02: that visit Japan to make business contacts and explore the market, etc, etc.
• 5:32
  SPEAKER_01: Why is that a thing?
• 5:33
  SPEAKER_01: Why so many companies in Japan public?
• 5:35
  SPEAKER_01: Is it just the age of the industry over there?
• 5:38
  SPEAKER_02: Yeah, that's one point.
• 5:40
  SPEAKER_02: I mean, as you will know, the game industry in Japan is extremely mature.
• 5:44
  SPEAKER_02: And there's been a big mobile gaming boom in the middle of the 2010s
• 5:49
  SPEAKER_02: that basically spawned, like triggered a wave of IPOs.
• 5:53
  SPEAKER_02: And for Japanese companies,
• 5:56
  SPEAKER_02: one very popular,
• 5:57
  SPEAKER_02: maybe the most popular exit strategy is actually going IPO instead of getting into
• 6:03
  SPEAKER_02: an M&A for several reasons.
• 6:05
  SPEAKER_01: Actually, I'm naive.
• 6:06
  SPEAKER_01: Give me some of those reasons.
• 6:09
  SPEAKER_02: Yeah, I mean,
• 6:10
  SPEAKER_02: you know,
• 6:10
  SPEAKER_02: I think that one of the biggest reasons is probably the very conservative nature of
• 6:16
  SPEAKER_02: the big Japanese corporations.
• 6:18
  SPEAKER_02: They're not as aggressive as European or especially American game studios that want
• 6:25
  SPEAKER_02: to grow fast, that,
• 6:26
  SPEAKER_02: you know,
• 6:26
  SPEAKER_02: want to make sure that the next two or three quarters are looking good,
• 6:30
  SPEAKER_02: et cetera, et cetera.
• 6:31
  SPEAKER_02: So I think that's probably the biggest reason.
• 6:34
  SPEAKER_02: That big game companies are shying away from investing their money
• 6:40
  SPEAKER_02: into buying other smaller studios.
• 6:43
  SPEAKER_01: Japan, at least from my perspective, it seems to be doing very well at the moment.
• 6:47
  SPEAKER_01: You know, Capcom is reporting record numbers.
• 6:49
  SPEAKER_01: Nintendo continues to perform incredibly strongly.
• 6:52
  SPEAKER_01: There's even signs of life at Square Enix.
• 6:54
  SPEAKER_01: Not really a huge amount of layoffs.
• 6:57
  SPEAKER_01: In fact, a lot of players seem to be hiring.
• 6:59
  SPEAKER_02: Is that a fair assessment?
• 7:01
  SPEAKER_02: Is it all rosy?
• 7:02
  SPEAKER_02: Yeah, pretty much.
• 7:03
  SPEAKER_02: Yeah, I think that,
• 7:04
  SPEAKER_02: you know,
• 7:05
  SPEAKER_02: if you look at the top eight,
• 7:06
  SPEAKER_02: you know,
• 7:06
  SPEAKER_02: the top two game platform providers,
• 7:10
  SPEAKER_02: Sony and Nintendo, and then, you know, the six big ones on the software side.
• 7:17
  SPEAKER_02: Apart from Square Enix and Sega,
• 7:19
  SPEAKER_02: if you just look at the stock market as an indicator of the stock at the market cap
• 7:24
  SPEAKER_02: of these companies,
• 7:25
  SPEAKER_02: 6 out of the 10 were either near the all-time highs or actually are at the It's
• 7:33
  SPEAKER_02: at very, very near the all-time highs right now as we speak right now.
• 7:38
  SPEAKER_02: So the Japanese console game industry,
• 7:42
  SPEAKER_02: not so much the mobile gaming industry,
• 7:43
  SPEAKER_02: but the console gaming industry is doing exceptionally well at the moment.
• 7:48
  SPEAKER_01: I thought mobile was doing well as well, isn't it?
• 7:50
  SPEAKER_01: Are you saying 70 in every 100 yen is spent on smartphone games?
• 7:54
  SPEAKER_02: Yeah.
• 7:54
  SPEAKER_02: So if you look at the Japanese market,
• 7:56
  SPEAKER_02: you know,
• 7:57
  SPEAKER_02: a lot of people think about Sega,
• 8:00
  SPEAKER_02: Nintendo, Sony,
• 8:01
  SPEAKER_02: you know, the big console players and the big franchises that we have here in Japan.
• 8:07
  SPEAKER_02: But actually the mobile gaming market is So Japan is a $17 billion market.
• 8:14
  SPEAKER_02: At the moment, the yen is very weak, so the dollar size sounds a little bit small.
• 8:22
  SPEAKER_02: And of that,
• 8:24
  SPEAKER_02: at the moment,
• 8:24
  SPEAKER_02: it's around $3.5 billion roundabout are console, and over $12 billion are mobile.
• 8:31
  SPEAKER_02: So in Japan, smartphone is absolutely king.
• 8:34
  SPEAKER_01: But is it Japanese smartphone games that are doing the business?
• 8:36
  SPEAKER_01: Because I think you said something like,
• 8:37
  SPEAKER_01: you know, Chinese made games are starting to really outmaneuver locally made stuff.
• 8:43
  SPEAKER_02: Yeah, it has become really one of these stereotypical red ocean markets for
• 8:47
  SPEAKER_02: the local game makers that we have on mobile.
• 8:51
  SPEAKER_02: So the market,
• 8:53
  SPEAKER_02: the addressable market is not really growing that quickly anymore as it used
• 8:58
  SPEAKER_02: And now,
• 9:01
  SPEAKER_02: on top of that,
• 9:02
  SPEAKER_02: the Japanese mobile gaming providers that we have here,
• 9:05
  SPEAKER_02: and we have a couple of them that are large cap companies,
• 9:08
  SPEAKER_02: they are increasingly threatened, or,
• 9:10
  SPEAKER_02: you know,
• 9:11
  SPEAKER_02: you can even say now over They're taken,
• 9:13
  SPEAKER_02: especially by Chinese smartphone game studios that come here,
• 9:18
  SPEAKER_02: you know,
• 9:18
  SPEAKER_02: guns blazing,
• 9:19
  SPEAKER_02: they take no prisoners,
• 9:21
  SPEAKER_02: and they not only generate downloads,
• 9:23
  SPEAKER_02: but they also capture a lot of the market share in terms of revenue and profits.
• 9:29
  SPEAKER_01: Did you say Japan's number one grossing game over the last 12 months was from China?
• 9:35
  SPEAKER_02: Yes, correct.
• 9:36
  SPEAKER_02: It's a so-called like 4X game,
• 9:38
  SPEAKER_02: like base building,
• 9:39
  SPEAKER_02: a little bit action, a little bit strategy called Last War Survival.
• 9:46
  SPEAKER_01: Shiba's big everywhere.
• 9:48
  SPEAKER_01: Correct.
• 9:48
  SPEAKER_01: Correct.
• 9:49
  SPEAKER_01: It's interesting because the China thing is quite interesting
• 9:51
  SPEAKER_01: because obviously Tokyo Game Show,
• 9:52
  SPEAKER_01: they don't seem to be present in the same way they were last year.
• 9:56
  SPEAKER_01: I'm told there's political reasons because of the timings and that kind of stuff,
• 9:59
  SPEAKER_01: but I don't know anything more to that.
• 10:02
  SPEAKER_02: Yeah, since since last year,
• 10:04
  SPEAKER_02: there's been a little bit like of geopolitical tension between the two nations.
• 10:09
  SPEAKER_02: But I think that it does pay a factor.
• 10:11
  SPEAKER_02: But I think the bigger factor is that
• 10:15
  SPEAKER_02: the Tokyo Game Show is really very much focused on console and PC gaming.
• 10:19
  SPEAKER_02: And of course,
• 10:20
  SPEAKER_02: Chinese game companies are increasingly getting into these two platforms,
• 10:25
  SPEAKER_02: also in Japan.
• 10:27
  SPEAKER_02: But I would say,
• 10:28
  SPEAKER_02: though, their biggest impact so far is definitely on the smartphone gaming side.
• 10:35
  SPEAKER_02: And that side is not really represented at Tokyo Game Show.
• 10:38
  SPEAKER_02: I think that's probably the bigger reason.
• 10:40
  SPEAKER_01: Ah.
• 10:41
  SPEAKER_01: The topic on the show quite a bit has been Chinese games made for PC and console and
• 10:46
  SPEAKER_01: the shift that's happening there and the impact it's having on a global market.
• 10:49
  SPEAKER_01: And I actually assumed,
• 10:50
  SPEAKER_01: because a lot of the games are anime style games,
• 10:53
  SPEAKER_01: that they would be having a more outsized impact on the Japanese sector.
• 10:58
  SPEAKER_01: Is that what's happening?
• 10:58
  SPEAKER_01: Is something like that happening?
• 10:59
  SPEAKER_01: Or is that more of just a threat on the horizon?
• 11:03
  SPEAKER_02: Yeah, it is happening.
• 11:04
  SPEAKER_02: It is happening.
• 11:04
  SPEAKER_02: I mean, you know,
• 11:05
  SPEAKER_02: on the smartphone game side,
• 11:07
  SPEAKER_02: it already happened, I think, a few years ago, and it's still ongoing.
• 11:10
  SPEAKER_02: I think that more and more Chinese game studios,
• 11:15
  SPEAKER_02: they look at their limited market that they have in China, shoot.
• 11:18
  SPEAKER_02: But ultimately, even the Chinese market is limited.
• 11:20
  SPEAKER_02: And they look at other markets.
• 11:22
  SPEAKER_02: And one of the biggest ones in the world is the neighboring one, Japan.
• 11:28
  SPEAKER_02: So that, I think, was the first wave.
• 11:30
  SPEAKER_02: But I think that now you see also So more and more console and PC game makers
• 11:36
  SPEAKER_02: from China taking Japan very, very seriously.
• 11:39
  SPEAKER_02: I would say until now,
• 11:40
  SPEAKER_02: probably also in Japan,
• 11:42
  SPEAKER_02: the biggest hit,
• 11:43
  SPEAKER_02: multi-platform hit,
• 11:45
  SPEAKER_02: you have to say,
• 11:45
  SPEAKER_02: is still probably, I think, Genshin Impact, you know, at this point in time.
• 11:51
  SPEAKER_02: But there are others too that are getting increasingly popular.
• 11:55
  SPEAKER_01: Well, I think as China was investing in,
• 11:56
  SPEAKER_01: particularly Tencent and Netis,
• 11:58
  SPEAKER_01: were investing quite a lot in setting up new Japanese teams with established talent.
• 12:02
  SPEAKER_01: And it seems they've changed their minds.
• 12:04
  SPEAKER_01: And maybe, I mean,
• 12:05
  SPEAKER_01: I know that they might be getting incentivized to support their local industry
• 12:08
  SPEAKER_01: a bit more.
• 12:09
  SPEAKER_02: But does that create any destabilization?
• 12:11
  SPEAKER_01: Because it seemed to happen quite quickly.
• 12:13
  SPEAKER_01: There seemed to be a lot of investment and suddenly it disappeared.
• 12:16
  SPEAKER_02: Yeah, it's China speed.
• 12:18
  SPEAKER_02: It's not only when they go in, it's also when they get out.
• 12:22
  SPEAKER_02: And, you know,
• 12:24
  SPEAKER_02: you might have seen the news how they fired the Marvel rivals team in the US once
• 12:29
  SPEAKER_02: the game was up and running.
• 12:31
  SPEAKER_02: And they said, hey, we don't need you anymore.
• 12:33
  SPEAKER_02: And they just fired them.
• 12:35
  SPEAKER_02: So it's not only limited to Japan, I would say.
• 12:37
  SPEAKER_02: But yeah, in Japan, there was a little bit of a kind of, how can I say this?
• 12:41
  SPEAKER_02: Like a blood trail of game companies that have been exited by Chinese companies.
• 12:47
  SPEAKER_02: And they make very, very fast decisions.
• 12:50
  SPEAKER_02: And what is new now is a little bit of this kind of like cluster phenomenon, right?
• 12:55
  SPEAKER_02: So it's a lot of studios in a very, very limited amount of time.
• 12:59
  SPEAKER_02: And yeah,
• 13:00
  SPEAKER_02: so I think that it's very,
• 13:02
  SPEAKER_02: very clear that NetEase and Tencent are not as interested in the Japanese market
• 13:07
  SPEAKER_02: as they used to three or four years ago.
• 13:10
  SPEAKER_02: What's caused that?
• 13:11
  SPEAKER_01: Is it the,
• 13:12
  SPEAKER_01: because it's,
• 13:13
  SPEAKER_01: you know,
• 13:13
  SPEAKER_01: I understand it's quite hard to sort of fire people in Japan and sort of,
• 13:18
  SPEAKER_01: you know, it's,
• 13:18
  SPEAKER_01: you know, you can't necessarily move fast in Japan like you can in other markets.
• 13:22
  SPEAKER_01: Is that what it is?
• 13:23
  SPEAKER_01: What's giving them cold feet?
• 13:24
  SPEAKER_02: Yeah, so I think that it's ultimately the commercial performance of these games
• 13:29
  SPEAKER_02: that really didn't convince the higher-ups at Tencent and NetEase.
• 13:33
  SPEAKER_02: I think they didn't manage their expectations.
• 13:36
  SPEAKER_02: And it was a lot of, I would say, pedigree chasing involved.
• 13:39
  SPEAKER_02: You know,
• 13:40
  SPEAKER_02: don't get me wrong,
• 13:41
  SPEAKER_02: you know, the people who got poached, they are like incredible game makers.
• 13:44
  SPEAKER_02: Nagoshi, for example, from Sega, right?
• 13:47
  SPEAKER_02: I mean, these guys know how to make games, how to ship games, et cetera, et cetera.
• 13:51
  SPEAKER_02: But I think the expectations were too high.
• 13:54
  SPEAKER_02: I think that the China speed that they are ultimately expecting kind of at least
• 13:59
  SPEAKER_02: from their Asian counterparts is not really there.
• 14:04
  SPEAKER_02: This led,
• 14:07
  SPEAKER_02: I think,
• 14:08
  SPEAKER_02: NetEase and Tencent to the conclusion that they better,
• 14:11
  SPEAKER_02: you know, get out of the market quickly instead of like burning more money.
• 14:18
  SPEAKER_02: The games didn't perform.
• 14:19
  SPEAKER_02: That's the ultimate reason.
• 14:20
  SPEAKER_01: I think caused a bit of damage though,
• 14:21
  SPEAKER_01: because these people were probably,
• 14:23
  SPEAKER_01: you know, to see,
• 14:24
  SPEAKER_01: we've seen people from established,
• 14:26
  SPEAKER_01: who've been part of companies for decades,
• 14:29
  SPEAKER_01: suddenly get enticed away by maybe some Chinese money or whatever,
• 14:33
  SPEAKER_01: and then suddenly find themselves,
• 14:34
  SPEAKER_01: and some of the talent they probably brought with them,
• 14:37
  SPEAKER_01: out on their ear, and I don't know.
• 14:40
  SPEAKER_01: When you feel about a country like Japan and the market like Japan
• 14:44
  SPEAKER_01: where everything's,
• 14:44
  SPEAKER_01: you know,
• 14:45
  SPEAKER_01: people get job for life and all that kind of stuff and then you find people,
• 14:49
  SPEAKER_01: I don't know, has it caused any damage in that regard?
• 14:51
  SPEAKER_02: It's a little bit of a trend, you know, that these big names, Harada-san is now working for SNK.
• 14:57
  SPEAKER_01: Yeah, that's a big one.
• 14:59
  SPEAKER_02: Which is controlled by Saudi Arabia.
• 15:01
  SPEAKER_02: So it's not only China.
• 15:04
  SPEAKER_02: Yeah, I mean,
• 15:06
  SPEAKER_02: I think that now,
• 15:06
  SPEAKER_02: you know,
• 15:08
  SPEAKER_02: People got a little bit sour,
• 15:10
  SPEAKER_02: I think,
• 15:10
  SPEAKER_02: when they think about quick Chinese money or easy Chinese money,
• 15:14
  SPEAKER_02: so-called easy Chinese money or, you know, things of that nature.
• 15:19
  SPEAKER_02: But I don't think that it ultimately shook the Japanese gaming industry.
• 15:26
  SPEAKER_02: A lot of people are saying, well, we told you so.
• 15:30
  SPEAKER_02: These companies are foreigners.
• 15:31
  SPEAKER_02: They don't really understand the Japanese process of game making
• 15:35
  SPEAKER_02: and what really drives the creators here, etc, etc.
• 15:39
  SPEAKER_02: But again, I think that the overall effect is probably pretty limited.
• 15:46
  SPEAKER_01: Yeah, well, I wasn't going to ask quite so much about China.
• 15:48
  SPEAKER_01: It's just become a bit of a topic lately.
• 15:50
  SPEAKER_01: Didn't you say to me, is PC starting to grow as well in Japan?
• 15:54
  SPEAKER_02: Yeah, so if you look at the overall market,
• 15:55
  SPEAKER_02: the PC has now captured, as of last year, about 12%, 12.5% of the entire market.
• 16:01
  SPEAKER_02: And in 2019, that number was 5%.
• 16:02
  SPEAKER_02: Oh, wow.
• 16:09
  SPEAKER_02: Unbelievably exploding, like,
• 16:11
  SPEAKER_02: you know,
• 16:11
  SPEAKER_02: the smartphone game industry exploded in the 2010s,
• 16:15
  SPEAKER_02: but it's pretty sizable right now.
• 16:17
  SPEAKER_02: And what I should also add is that the PC is now finally a respected game platform in Japan.
• 16:25
  SPEAKER_02: Whereas before,
• 16:26
  SPEAKER_02: even the big companies like Capcom,
• 16:28
  SPEAKER_02: Sega, etc., etc., looked at the PC as a little bit of a kind of like a stepson.
• 16:35
  SPEAKER_02: As a little bit of like this kind of like gaijin gamer platform
• 16:38
  SPEAKER_02: that is not really popular or not really even relevant in Japan.
• 16:42
  SPEAKER_02: But that tide has turned.
• 16:46
  SPEAKER_01: Has anything particularly triggered
• 16:48
  SPEAKER_02: that or is it just time?
• 16:50
  SPEAKER_02: I think one big trigger was the corona pandemic.
• 16:57
  SPEAKER_02: The second one was very strongly associated with that,
• 17:01
  SPEAKER_02: the non-availability of the PlayStation 5 during that time.
• 17:05
  SPEAKER_02: So if people People were to play high-fidelity games.
• 17:09
  SPEAKER_02: They either would have to reactivate or continue to use their PlayStation 4,
• 17:13
  SPEAKER_02: the PlayStation 4 Pro, and a lot of them started using gaming PCs instead.
• 17:21
  SPEAKER_02: Third reason is PUBG became really,
• 17:22
  SPEAKER_02: really big several years ago in Japan,
• 17:26
  SPEAKER_02: and the PC was the first platform that particular game was available on.
• 17:31
  SPEAKER_02: And as another reason,
• 17:32
  SPEAKER_02: a lot of the Japanese game companies in recent years,
• 17:36
  SPEAKER_02: Capcom will probably be being the first among the biggest ones,
• 17:41
  SPEAKER_02: started seeing the potential of the PC platform as a game's sales channel
• 17:48
  SPEAKER_02: and distribution channel.
• 17:50
  SPEAKER_02: And now you have a lot more Japanese games on the PC,
• 17:52
  SPEAKER_02: which wasn't the case in 2017, 2018 and before.
• 17:57
  SPEAKER_02: And that,
• 17:57
  SPEAKER_02: of course,
• 17:57
  SPEAKER_02: motivated local users to say, hey,
• 18:00
  SPEAKER_02: you know,
• 18:01
  SPEAKER_02: before I buy a PlayStation 5,
• 18:03
  SPEAKER_02: or chase a PlayStation 5 during Corona,
• 18:06
  SPEAKER_02: why don't I just go and buy a gaming PC that's readily available?
• 18:09
  SPEAKER_02: And that's what a lot of people did.
• 18:11
  SPEAKER_01: That's interesting.
• 18:12
  SPEAKER_01: So sort of Japanese companies trying to reach Western audiences via PC has
• 18:16
  SPEAKER_01: in turn Had an impact upon player behaviors in Japan as well.
• 18:20
  SPEAKER_01: That's interesting.
• 18:22
  SPEAKER_01: Okay, let's talk about console.
• 18:23
  SPEAKER_01: It just seems to be every time I get the Famitsu charts come in, it's just Nintendo.
• 18:29
  SPEAKER_01: Can anyone challenge that?
• 18:31
  SPEAKER_02: Not at the moment.
• 18:32
  SPEAKER_02: I think it's very, very difficult.
• 18:33
  SPEAKER_02: So Nintendo has an iron grip on the Japanese console market since 2017,
• 18:40
  SPEAKER_02: when the Switch 1 came out.
• 18:42
  SPEAKER_02: And I would actually, you know, phrase it a little bit differently.
• 18:46
  SPEAKER_02: I would say that if Nintendo produced another flop like the Wii U,
• 18:51
  SPEAKER_02: and if the Switch wasn't the super hit it turned out to be,
• 18:55
  SPEAKER_02: I think the Japanese console game market would have been completely eliminated.
• 19:01
  SPEAKER_02: Oh, really?
• 19:02
  SPEAKER_02: As kind of like a segment of the market.
• 19:04
  SPEAKER_02: I think that even more people would have turned to smartphones and maybe even the PC.
• 19:08
  SPEAKER_02: And in that sense,
• 19:09
  SPEAKER_02: I think Nintendo not only completely dominates the console gaming segment here
• 19:14
  SPEAKER_02: in Japan with 70%,
• 19:16
  SPEAKER_02: I think,
• 19:16
  SPEAKER_02: is the market share for all gaming content,
• 19:19
  SPEAKER_02: but they also saved it back around 10 years ago now.
• 19:23
  SPEAKER_01: Nintendo fans get very cross with me,
• 19:24
  SPEAKER_01: even though I am Quite abundant, but obviously a Nintendo fan.
• 19:29
  SPEAKER_01: But they often,
• 19:30
  SPEAKER_01: because I always look at the lineup for the Switch too,
• 19:32
  SPEAKER_01: and I think it's missing certain Western appealing games.
• 19:36
  SPEAKER_01: Nintendo's biggest Western IP is not here.
• 19:38
  SPEAKER_01: When I look at it,
• 19:39
  SPEAKER_01: if I try and take it from a Japan point of view,
• 19:42
  SPEAKER_01: and I look at games like Splatoon and Kirby and some of
• 19:46
  SPEAKER_01: the big brands they've been pushing, And it actually feels like the opposite.
• 19:49
  SPEAKER_01: It feels like actually the lineup for Switch 2 from
• 19:52
  SPEAKER_01: a Japanese fan's perspective potentially is actually pretty, very strong.
• 19:56
  SPEAKER_02: Yeah, they know the Japanese market very well.
• 19:59
  SPEAKER_02: They know the American market very well.
• 20:01
  SPEAKER_02: Nintendo of America is a very, very old company.
• 20:03
  SPEAKER_02: And here in Japan,
• 20:04
  SPEAKER_02: I would say that Nintendo has really found the taste of especially families,
• 20:11
  SPEAKER_02: younger people, et cetera, et cetera.
• 20:12
  SPEAKER_02: I mean, apart from the franchises that you mentioned, Pikmin is really big here.
• 20:16
  SPEAKER_02: Much, much bigger than in the West.
• 20:18
  SPEAKER_02: Rhythm Heaven was a big, big hit in Japan.
• 20:21
  SPEAKER_02: You know,
• 20:21
  SPEAKER_02: people don't really take these games so seriously,
• 20:24
  SPEAKER_02: especially in the West, but these are really big sellers in Japan.
• 20:27
  SPEAKER_02: They actually move units too.
• 20:30
  SPEAKER_02: Another one is Komodachi Life.
• 20:31
  SPEAKER_02: I know it's also popular outside.
• 20:33
  SPEAKER_02: But here in Japan, it's particularly popular.
• 20:36
  SPEAKER_02: And I think that Nintendo really knows very well,
• 20:40
  SPEAKER_02: especially during this generation and the Switch 1 generation,
• 20:44
  SPEAKER_02: what the average mainstream Japanese console user wants.
• 20:48
  SPEAKER_01: But isn't it all going to change now that Hideo Kojima is making two games for Xbox?
• 20:55
  SPEAKER_01: So talk about that, because that's been one of the stories of the last week.
• 21:00
  SPEAKER_01: I don't know if it's going to be an Xbox exclusive games or not.
• 21:03
  SPEAKER_01: It's hard to tell of anything with Microsoft at the moment.
• 21:05
  SPEAKER_01: But do you think it'd help Xbox in Japan at all?
• 21:09
  SPEAKER_02: They tried so many things in the last 20 years.
• 21:14
  SPEAKER_02: I think it's now over 20 years.
• 21:16
  SPEAKER_02: I think that one Hideo Kojima game will probably not sway Japanese consumers.
• 21:24
  SPEAKER_02: Don't get me wrong.
• 21:24
  SPEAKER_02: So I love him.
• 21:25
  SPEAKER_02: So I know a lot of people, you know, look at him in a certain way, but I love his games.
• 21:30
  SPEAKER_02: I love, absolutely,
• 21:32
  SPEAKER_02: I'm a big Hideo Kojima fan,
• 21:34
  SPEAKER_02: but I don't think that the average,
• 21:37
  SPEAKER_02: even the high fidelity,
• 21:39
  SPEAKER_02: hardcore gamer will probably be swayed when a Hideo Kojima game is exclusive to
• 21:44
  SPEAKER_02: the Xbox.
• 21:45
  SPEAKER_02: It will help, but you will probably need a lot more than that.
• 21:49
  SPEAKER_01: Yeah, I can't imagine the goal is specifically to win over Japanese players,
• 21:53
  SPEAKER_01: because Kojima's a global Well, I say big.
• 21:56
  SPEAKER_01: I mean, Death Stranding didn't do especially well.
• 21:58
  SPEAKER_01: But then I think Death Stranding was quite a niche thing.
• 22:01
  SPEAKER_01: It's a weird game.
• 22:02
  SPEAKER_01: Yeah.
• 22:04
  SPEAKER_01: And I think Fizz and OD, I think, are probably a little bit more.
• 22:10
  SPEAKER_01: That's the stuff that people,
• 22:11
  SPEAKER_01: when he was coming out, Konami,
• 22:12
  SPEAKER_01: when he was making a Silent Hill game in Metal Gear Solid,
• 22:15
  SPEAKER_01: it feels more like that's the stuff that,
• 22:17
  SPEAKER_01: you know,
• 22:17
  SPEAKER_01: fans have wanted from him from the moment he, well, from that point onwards, really.
• 22:22
  SPEAKER_01: So the fact that both of them They're sort of tied with Xbox.
• 22:25
  SPEAKER_01: But brand-wise,
• 22:27
  SPEAKER_01: when I think about the consoles,
• 22:28
  SPEAKER_01: I think about Nintendo as being very much the family brand.
• 22:31
  SPEAKER_01: Like dads love it, mums love it, kids love it.
• 22:33
  SPEAKER_01: It's very family-friendly.
• 22:35
  SPEAKER_01: And you think about Xbox,
• 22:36
  SPEAKER_01: I always think very neon green and very online shooters and I think gamer brand.
• 22:40
  SPEAKER_01: It's a very gamer brand.
• 22:41
  SPEAKER_01: And PlayStation's always been sort of like a lifestyle brand, like a cool brand.
• 22:45
  SPEAKER_01: And Kojima, for me,
• 22:48
  SPEAKER_01: if I think about it from a branding perspective, fits very well with PlayStation.
• 22:52
  SPEAKER_01: He's a cool guy, right?
• 22:53
  SPEAKER_01: He makes cool games.
• 22:54
  SPEAKER_01: He does that kind of thing.
• 22:56
  SPEAKER_01: So, yeah, I find there's an audience disconnect maybe with Xbox.
• 23:00
  SPEAKER_01: So I'm more interested in whether or not it can attract some of the cool kids over
• 23:04
  SPEAKER_01: to Microsoft or if, rather than, let's say, the Japanese audience.
• 23:09
  SPEAKER_02: Yeah, it will take a few years, but we will see.
• 23:12
  SPEAKER_01: Yeah.
• 23:13
  SPEAKER_01: I've actually gone through and rattled through my points I was going to hit
• 23:17
  SPEAKER_01: in our conversation.
• 23:18
  SPEAKER_01: Is there anything about that?
• 23:20
  SPEAKER_01: I mean, obviously,
• 23:20
  SPEAKER_01: whenever we talk about Japan at the moment,
• 23:22
  SPEAKER_01: we tend a lot to talk about Nintendo and Capcom,
• 23:24
  SPEAKER_01: obviously,
• 23:24
  SPEAKER_01: who have sort of become the sort of poster child on how to do AAA video games
• 23:29
  SPEAKER_01: in 2026.
• 23:30
  SPEAKER_01: But is there anything else about the Japanese market that you think is noteworthy
• 23:33
  SPEAKER_01: and something that's happening at the moment?
• 23:36
  SPEAKER_02: There's a ton of things,
• 23:39
  SPEAKER_02: but I would say
• 23:40
  SPEAKER_02: that maybe one interesting point is how gamer culture is different here in Japan
• 23:44
  SPEAKER_02: from everywhere else.
• 23:46
  SPEAKER_02: You know, for instance, you know, the big waves that we had in the online...
• 23:52
  SPEAKER_02: Gamer culture over the last couple of years, like,
• 23:55
  SPEAKER_02: you know,
• 23:56
  SPEAKER_02: Gamergate,
• 23:57
  SPEAKER_02: woke gaming, anti-AI, you know, Sony removing physical discs from their offerings.
• 24:06
  SPEAKER_02: Of course,
• 24:06
  SPEAKER_02: you know,
• 24:06
  SPEAKER_02: these things also do play a role in the Japanese gaming culture,
• 24:14
  SPEAKER_02: but it's much, much smaller than in the West.
• 24:17
  SPEAKER_02: So what I'm trying to say is that the average Japanese gamer is really...
• 24:23
  SPEAKER_02: Pretty much disconnected from what their Western counterparts think about,
• 24:30
  SPEAKER_02: worry about,
• 24:31
  SPEAKER_02: or what they look forward to in terms of games or anything that is associated
• 24:36
  SPEAKER_02: with games.
• 24:37
  SPEAKER_02: So if you are a game developer that is looking at the Japanese market,
• 24:41
  SPEAKER_02: I think it's really absolutely critical to understand that
• 24:47
  SPEAKER_02: And Japanese mobile gamer,
• 24:49
  SPEAKER_02: console gamer,
• 24:50
  SPEAKER_02: PC gamer thinks about the world differently than the audience that you're serving in
• 24:57
  SPEAKER_02: the US and in Europe, for instance.
• 25:00
  SPEAKER_01: It quite sounds like a game of culture I can get on board with, to
• 25:03
  SPEAKER_02: be honest.
• 25:06
  SPEAKER_01: Is that a media thing?
• 25:07
  SPEAKER_01: Because I always find it quite interesting how whenever I interview somebody
• 25:11
  SPEAKER_01: from Japan,
• 25:12
  SPEAKER_01: there seems to be a level of expectation around me sharing what I'm going
• 25:16
  SPEAKER_01: to be printing and what I'm going to be including,
• 25:17
  SPEAKER_01: which I think is quite common practice in certain Japan media and not so much in
• 25:22
  SPEAKER_01: the Western media.
• 25:23
  SPEAKER_01: Is it a media thing?
• 25:24
  SPEAKER_02: Yeah, I mean, don't get me wrong, they're like angry gamers in Japan too, right?
• 25:28
  SPEAKER_02: I mean, you know, they take to X especially, so X is gigantic in Japan.
• 25:32
  SPEAKER_02: It's by far the biggest social network.
• 25:35
  SPEAKER_02: They are angry people that are venting on games.
• 25:39
  SPEAKER_02: On X and other platforms.
• 25:41
  SPEAKER_02: But I think that the media does play a role.
• 25:44
  SPEAKER_02: And the gaming media in Japan,
• 25:47
  SPEAKER_02: you know,
• 25:47
  SPEAKER_02: when they write a review,
• 25:49
  SPEAKER_02: for example, they are kind of like more sharing their view also.
• 25:54
  SPEAKER_02: And they're not really rating the individual elements of the game, if that makes any sense.
• 26:01
  SPEAKER_02: Of course,
• 26:02
  SPEAKER_02: game magazines like Famitsu,
• 26:04
  SPEAKER_02: they give away scores at the end, so they do give a judgment.
• 26:10
  SPEAKER_02: It's much less analytical.
• 26:12
  SPEAKER_02: I think it's a little bit more emotional.
• 26:14
  SPEAKER_02: And again, it really gets into the personal opinion of the author.
• 26:20
  SPEAKER_02: And they're trying to not be,
• 26:22
  SPEAKER_02: generally speaking, not be too critical unless the game is really, really bad.
• 26:27
  SPEAKER_02: And so this kind of like very critical in-depth analysis when it comes
• 26:35
  SPEAKER_02: to reviewing games is not really there in Japan.
• 26:38
  SPEAKER_02: I think it's a lot more consensus driven than in the West.
• 26:43
  SPEAKER_02: It's really, really a different culture also in terms of game media.
• 26:47
  SPEAKER_02: And that's also the phenomenon of paid articles.
• 26:51
  SPEAKER_02: So you can start sponsoring certain game media under a certain financial arrangement.
• 26:59
  SPEAKER_02: And they will cover your games.
• 27:01
  SPEAKER_02: They will write strategy guides for you.
• 27:04
  SPEAKER_02: And they will make a whole PR and marketing and press package for you if you want.
• 27:12
  SPEAKER_01: Oh, wow.
• 27:12
  SPEAKER_01: I did not know that.
• 27:14
  SPEAKER_01: Well, I'm out of time.
• 27:16
  SPEAKER_01: Thank you, Circan.
• 27:17
  SPEAKER_01: And yeah, I'll see you out there.
• 27:19
  SPEAKER_01: Anytime.
• 27:19
  SPEAKER_01: Cheers.
• 27:20
  SPEAKER_01: Thank you, Dr. Circan Toto.
• 27:22
  SPEAKER_01: Now, before I move on to our next segment, we have a new story for you to share.
• 27:25
  SPEAKER_01: It's just broken.
• 27:27
  SPEAKER_01: Next Playground, we're featuring on the show a couple of times.
• 27:29
  SPEAKER_01: They've just secured $150 million in its latest Series E investment round.
• 27:34
  SPEAKER_01: The funding is designed to bolster its global expansion.
• 27:36
  SPEAKER_01: So the camera-based console is currently only available in the US, Canada, UK and Ireland.
• 27:41
  SPEAKER_01: There's a German release coming later this year and a Japan and Korean release plan for 2027.
• 27:46
  SPEAKER_01: So this investment they're getting is going to help them market the console,
• 27:49
  SPEAKER_01: is going to help them sort out the supply chain around launch as well.
• 27:54
  SPEAKER_01: In addition to that, former Niantic CFO Jeff Shoga is joining Next in the same role.
• 27:59
  SPEAKER_01: Shoga is also joining the Next board alongside games industry veteran Bing Gordon.
• 28:04
  SPEAKER_01: Now next,
• 28:05
  SPEAKER_01: they say they've got nearly 1 million subscribers to its game service,
• 28:07
  SPEAKER_01: so next games you have to subscribe to the service to get hold of them,
• 28:10
  SPEAKER_01: and they've got nearly a million subscribers,
• 28:12
  SPEAKER_01: and they've signed some big games,
• 28:13
  SPEAKER_01: they've recently added a Pac-Man title from Bandai Namco,
• 28:15
  SPEAKER_01: they've added a Sonic game from Sega,
• 28:17
  SPEAKER_01: it already features IP like Bluey and Teenage Mutant Ninja Turtles and Peppa Pig
• 28:21
  SPEAKER_01: and Sesame Street.
• 28:22
  SPEAKER_01: And the series of funding is co-led by Bale,
• 28:24
  SPEAKER_01: Gifford and BAI Capital with participation of MBA Investments,
• 28:28
  SPEAKER_01: Logitech,
• 28:28
  SPEAKER_01: The Rain Group and Medici Capital in addition to a new credit facility
• 28:32
  SPEAKER_01: with JP Morgan.
• 28:34
  SPEAKER_01: Now I actually had a very very brief back and forth.
• 28:37
  SPEAKER_01: We went forth with Nex Playground about this deal and I was interested
• 28:40
  SPEAKER_01: a little bit more on how they're going to localize these consoles for these markets.
• 28:45
  SPEAKER_01: And David Littier,
• 28:45
  SPEAKER_01: who's in charge of Nex,
• 28:47
  SPEAKER_01: he said, we enter every international market with love and respect.
• 28:50
  SPEAKER_01: That means investing in localization, local IP, local music, local developers and local teams.
• 28:55
  SPEAKER_01: Most importantly,
• 28:55
  SPEAKER_01: it means listening closely to local customers so we can keep making
• 28:58
  SPEAKER_01: the product better at serving the needs of their families.
• 29:03
  SPEAKER_01: That's the next playground there just got a big bit of funding as it looks to try
• 29:06
  SPEAKER_01: and make a name for itself this christmas right now let's move on
• 29:11
  SPEAKER_01: to our second interview of the show what a treat you've got loads of stuff
• 29:14
  SPEAKER_01: in this episode um lyrical games you may have heard of them you may not have heard
• 29:17
  SPEAKER_01: of them they're the publisher behind the upcoming Valor Mortis which is
• 29:20
  SPEAKER_01: the first person souls-like game it's generating a bit of interest at
• 29:24
  SPEAKER_01: the moment Now,
• 29:26
  SPEAKER_01: Lyrical Games was founded by Blake Rochkind,
• 29:29
  SPEAKER_01: the former head of business development at Private Division,
• 29:32
  SPEAKER_01: with the intention,
• 29:33
  SPEAKER_01: you know,
• 29:33
  SPEAKER_01: the studio,
• 29:34
  SPEAKER_01: this publisher is all about funding mid-tier,
• 29:36
  SPEAKER_01: double A, or they like to use the term triple I, video games.
• 29:39
  SPEAKER_01: Now, Valor Mortis was due for release on September 24th,
• 29:42
  SPEAKER_01: but the firm delayed it due to the number of major titles that are coming out
• 29:46
  SPEAKER_01: that day, including Control Resonant and Silent Hill Downfall.
• 29:50
  SPEAKER_01: The game is now due October 13th and The Game Business can exclusively reveal
• 29:54
  SPEAKER_01: the game will be priced at $40.
• 29:56
  SPEAKER_01: Now I had the chance to chat with Blake about this price point and trying to find
• 30:01
  SPEAKER_01: a place for an ambitious double A new IP in a hyper competitive moment for
• 30:05
  SPEAKER_01: the video game business,
• 30:06
  SPEAKER_01: particularly with GTA 6 casting a long shadow over the release calendar.
• 30:10
  SPEAKER_01: We also had a chat about the potential of those mid-tier video games in general too.
• 30:14
  SPEAKER_01: It's a good chat and here it comes.
• 30:17
  SPEAKER_01: Hello, Blake.
• 30:17
  SPEAKER_01: Welcome to the show.
• 30:18
  SPEAKER_01: Hey, thanks for having me.
• 30:19
  SPEAKER_01: Big fan.
• 30:20
  SPEAKER_01: Oh, thank you.
• 30:22
  SPEAKER_01: Is it a year since Lyrical Games has sort of officially formed?
• 30:26
  SPEAKER_00: We announced ourselves in August of last year,
• 30:28
  SPEAKER_00: right ahead of Valor Martis's reveal, which was obviously quite intentional.
• 30:33
  SPEAKER_00: We officially started in March of last year.
• 30:36
  SPEAKER_00: In fact, our first day was GDC of last year.
• 30:39
  SPEAKER_01: That's when I started.
• 30:40
  SPEAKER_01: There you go.
• 30:41
  SPEAKER_01: There we are.
• 30:43
  SPEAKER_01: You said at the time you felt there was a new cycle emerging.
• 30:48
  SPEAKER_01: I've read some of your pieces.
• 30:49
  SPEAKER_01: You rejected the idea of the lost middle and how you're seeking a real opportunity with AA.
• 30:54
  SPEAKER_01: So, sort of gets over a year now.
• 30:57
  SPEAKER_01: Has those theories held for you?
• 30:59
  SPEAKER_00: Yeah.
• 30:59
  SPEAKER_00: We have two proof points, right?
• 31:00
  SPEAKER_00: We've announced two games.
• 31:02
  SPEAKER_00: One is Valor Mortis.
• 31:03
  SPEAKER_00: The other is Erosion.
• 31:06
  SPEAKER_00: I would say Valor Mortis is much more of a game in the quote-unquote middle.
• 31:12
  SPEAKER_00: You know, we've had pretty much a dream run since we've announced the game.
• 31:15
  SPEAKER_00: It was one of the biggest announcements at last year's opening night live.
• 31:18
  SPEAKER_00: It remains one of the most wishlisted games on Steam,
• 31:21
  SPEAKER_00: and we're gearing up to launch it in about a month from now.
• 31:23
  SPEAKER_01: So you're not doubting,
• 31:24
  SPEAKER_01: you're not going to actually, maybe the middle is more challenging than I thought?
• 31:28
  SPEAKER_00: No, certainly not.
• 31:28
  If anything,
• 31:29
  I think our experience with Valor Mortis has been validating of the thesis for sure.
• 31:33
  SPEAKER_01: Yeah.
• 31:34
  SPEAKER_01: One thing I'm worried about is when everyone saw Clare Obscure and they went, hang on.
• 31:37
  SPEAKER_01: Look at this.
• 31:38
  SPEAKER_01: You can spend less than $50 million making a game and it could do really well.
• 31:41
  SPEAKER_01: Is there a risk for suddenly going to get an avalanche of these?
• 31:45
  SPEAKER_00: I would say no,
• 31:46
  SPEAKER_00: and not to be argumentative,
• 31:48
  SPEAKER_00: but certainly this was not a Claire Obscure did well,
• 31:51
  SPEAKER_00: and therefore that's going to be part of our strategy.
• 31:53
  SPEAKER_00: And I would say,
• 31:54
  SPEAKER_00: of course,
• 31:54
  SPEAKER_00: Claire Obscure is,
• 31:56
  SPEAKER_00: I think,
• 31:56
  SPEAKER_00: one of the better games ever made,
• 31:58
  SPEAKER_00: one of the more successful independent games ever made.
• 32:00
  SPEAKER_00: But there's a bunch of games that are sort of in this, what we consider to be the middle.
• 32:03
  SPEAKER_00: I think that's the other thing to think about is like when people talk about
• 32:06
  SPEAKER_00: the middle, there's like upper middle class and lower middle class, right?
• 32:09
  SPEAKER_00: And so I think for us,
• 32:10
  SPEAKER_00: relatively speaking,
• 32:12
  SPEAKER_00: when we talk about the middle,
• 32:12
  SPEAKER_00: I guess it's that lower middle class, which is Roughly $10 million budget games.
• 32:19
  SPEAKER_00: I think the clear-obscure folks have been pretty open about what their budget was,
• 32:21
  SPEAKER_00: so I don't want to talk about anything sort of private,
• 32:24
  SPEAKER_00: but I think they've been fairly open about that.
• 32:27
  SPEAKER_00: But there's other games like Stray,
• 32:29
  SPEAKER_00: Pacific Drive,
• 32:30
  SPEAKER_00: Hard Space Shipbreaker, these games that are sort of in that $40 to $50 price point.
• 32:35
  SPEAKER_00: Maybe they don't do as well as clear-obscure,
• 32:37
  SPEAKER_00: which I think,
• 32:37
  SPEAKER_00: you know, is,
• 32:38
  SPEAKER_00: like I said,
• 32:39
  SPEAKER_00: is probably on track to sell over 10 million units,
• 32:42
  SPEAKER_00: but sell a million, two million, three million units.
• 32:45
  SPEAKER_00: Make a very nice ROI on that investment.
• 32:48
  SPEAKER_00: And I think that's one of the most vibrant places of the industry.
• 32:51
  SPEAKER_00: I think it has been for the last six or so years.
• 32:54
  SPEAKER_00: But frankly,
• 32:54
  SPEAKER_00: and one of the reasons why Lyrical Games is in that space is money is hard to come
• 32:58
  SPEAKER_00: by in this industry.
• 32:59
  SPEAKER_00: And we're fortunate to have substantial backing from a larger media company
• 33:03
  SPEAKER_00: that allows us to play that space.
• 33:04
  SPEAKER_00: But I'm not that worried about like people all of a sudden,
• 33:06
  SPEAKER_00: like tons of competition being in that area.
• 33:08
  SPEAKER_01: No.
• 33:09
  SPEAKER_01: Sabre obviously sort of play in that area and they keep their budgets low
• 33:13
  SPEAKER_01: and you've got, Or Dispatch is one of my favorites.
• 33:16
  SPEAKER_00: I don't know where that fits.
• 33:17
  SPEAKER_00: I think Dispatch would be a perfect example of the type of game that we would love
• 33:20
  SPEAKER_00: to be a part of.
• 33:20
  SPEAKER_00: And I know the guys in AdHoc well.
• 33:22
  SPEAKER_00: Yeah.
• 33:23
  SPEAKER_01: Yeah.
• 33:23
  SPEAKER_01: Well, and they're working with Sony on Until Dawn 2.
• 33:26
  SPEAKER_01: But when you're looking for games in that area,
• 33:28
  SPEAKER_01: I guess these games have to take more risks than perhaps...
• 33:32
  SPEAKER_01: Is that what you look for?
• 33:32
  SPEAKER_01: Are you looking for games that are quite striking and original
• 33:35
  SPEAKER_01: or perhaps things we haven't seen for a while?
• 33:37
  SPEAKER_00: Well, yeah, without a doubt.
• 33:38
  SPEAKER_00: I mean, I think for us, uh,
• 33:40
  SPEAKER_00: it's almost a cliche,
• 33:41
  SPEAKER_00: but we're looking for, I,
• 33:42
  SPEAKER_00: I used to be an agent, uh,
• 33:44
  SPEAKER_00: who represented game developers and I used to have a client who would, uh,
• 33:48
  SPEAKER_00: get frustrated with publishers who would say they want like proven innovation,
• 33:51
  SPEAKER_00: which is of course like a bit of an oxymoron.
• 33:53
  SPEAKER_00: So I want to be careful to not, to not say that we want proven innovation.
• 33:56
  SPEAKER_00: Uh, but I would say what we are looking for are, are
• 34:02
  SPEAKER_00: Innovative twists on tried and true genres, right?
• 34:06
  SPEAKER_00: So we're not chasing trends here.
• 34:08
  SPEAKER_00: I don't think we're ever going to do,
• 34:10
  SPEAKER_00: you know,
• 34:10
  SPEAKER_00: I don't think we're going to be in the friend slap business or anything like that.
• 34:13
  SPEAKER_00: But there are, just like in movies or anything else, right?
• 34:16
  SPEAKER_00: There are genres in this business that are evergreen.
• 34:18
  SPEAKER_00: They're,
• 34:19
  SPEAKER_00: you know,
• 34:19
  SPEAKER_00: just to continue with the movie analogy,
• 34:20
  SPEAKER_00: there are always going to be science fiction movies.
• 34:22
  SPEAKER_00: There are always going to be drama movies.
• 34:23
  SPEAKER_00: There are always going to be Uh, you know, there are always gonna be horror movies.
• 34:28
  SPEAKER_00: And I think, same thing in games, right?
• 34:30
  SPEAKER_00: There's always going to be, and sometimes new genres form, right?
• 34:33
  SPEAKER_00: So Souls-like is a relatively new genre in the grand scheme of things for the games business.
• 34:37
  SPEAKER_00: But I would say, like, it's not a trend.
• 34:39
  SPEAKER_00: There are always going to be Souls-like.
• 34:40
  SPEAKER_00: So, at this point.
• 34:42
  SPEAKER_00: And so, when we see a game like Valor Mortis,
• 34:44
  SPEAKER_00: which is, Yes, it's a Souls-like, but it is a risk, like you said, right?
• 34:49
  SPEAKER_00: I would also argue where the risk is is also where the innovation is,
• 34:52
  SPEAKER_00: which is it's a first-person Souls-like,
• 34:54
  SPEAKER_00: which from the second we announced it, that was the big bet we were making, right?
• 34:57
  SPEAKER_00: It's not just another Souls-like, it's this innovative twist on the genre.
• 35:01
  SPEAKER_00: I would say a very bold twist on the genre that helped it break through the noise
• 35:05
  SPEAKER_00: from the second we announced it.
• 35:06
  SPEAKER_00: Of course, also being from the developers of a game like Ghostrunner, Uh, helped a lot.
• 35:11
  SPEAKER_00: And I think we very intentionally started our trailer for,
• 35:15
  SPEAKER_00: uh, Valor Mortis, our opening trailer with, from the creators of Ghostrunner.
• 35:18
  SPEAKER_00: I think that's something we think about a lot when we look at games and
• 35:20
  SPEAKER_00: who we're partnering with.
• 35:22
  SPEAKER_00: How can we make people in a world where tons of games are coming out?
• 35:25
  SPEAKER_00: I don't need to tell you that, you know, I don't know.
• 35:27
  SPEAKER_00: I think the latest number is like 7,000 steam games here or something like that.
• 35:30
  SPEAKER_00: In, in that environment,
• 35:32
  SPEAKER_00: uh, you know, you got to play the cards you've been dealt in that environment.
• 35:34
  SPEAKER_00: How can we have something where people immediately snap and take notice?
• 35:39
  SPEAKER_00: So for instance, From the creators of Ghostrunner.
• 35:42
  SPEAKER_00: Ghostrunner is not a household name, it's not Call of Duty, but it's still a few million units.
• 35:46
  SPEAKER_00: It's probably been played by even more people than that on Game Pass, PlayStation Plus, etc.
• 35:50
  SPEAKER_00: And so ultimately for us,
• 35:53
  SPEAKER_00: that sort of combination of developer that sort of makes you take notice,
• 35:58
  SPEAKER_00: genre that you know,
• 36:00
  SPEAKER_00: twist that excites you,
• 36:02
  SPEAKER_00: and then of course,
• 36:03
  SPEAKER_00: one thing that actually has surprised me quite a bit with Valor Mortis,
• 36:06
  SPEAKER_00: has sort of been this like Napoleonic theme, and how much people...
• 36:10
  SPEAKER_00: I thought that that was something cool,
• 36:11
  SPEAKER_00: but I've been surprised by how much that has been like a pillar of what has made
• 36:14
  SPEAKER_00: the game exciting to people.
• 36:15
  SPEAKER_01: It's interesting.
• 36:16
  SPEAKER_01: My next question was going to be,
• 36:17
  SPEAKER_01: tell us about Valor Mortis, but you've just basically done it there.
• 36:19
  SPEAKER_00: I basically just did, yes.
• 36:21
  SPEAKER_01: And that holionic first-person soulslike
• 36:24
  SPEAKER_00: is there.
• 36:25
  SPEAKER_00: Put that on the box, Chris.
• 36:26
  SPEAKER_00: Thank you.
• 36:27
  SPEAKER_01: Yeah.
• 36:27
  SPEAKER_01: And then I was going to ask, are you concerned about soulslike fatigue?
• 36:31
  SPEAKER_01: And you've also answered that question.
• 36:32
  SPEAKER_01: You've just smashed for my next day questions.
• 36:34
  SPEAKER_00: Yeah, I mean, I would say it is still a concern.
• 36:37
  SPEAKER_00: I mean, it is.
• 36:38
  SPEAKER_00: I think that that's one of the reasons to not just do another soulslike.
• 36:41
  SPEAKER_00: And I think Immortal Shell 2 just had a lot of success.
• 36:45
  SPEAKER_01: Of course.
• 36:45
  SPEAKER_00: But they have innovation, right, with the shell system.
• 36:49
  SPEAKER_00: And so I think the worst thing we can do is be safe.
• 36:52
  SPEAKER_00: That is by far the worst thing any publisher or developer could do.
• 36:55
  SPEAKER_00: And candidly, the vast majority of the pitches we see are fairly safe.
• 37:00
  SPEAKER_00: And I think we're looking for that combination of talent,
• 37:03
  SPEAKER_00: but also risk, excitement, innovation, et cetera, when we sign a game.
• 37:07
  SPEAKER_00: Easier said than done.
• 37:09
  SPEAKER_00: You know,
• 37:09
  SPEAKER_00: what keeps me up the most at night is not finding enough games that we believe
• 37:12
  SPEAKER_00: in can break through the noise.
• 37:14
  SPEAKER_01: Well, one of the things I guess helps break through the noise,
• 37:16
  SPEAKER_01: let's talk about this price point,
• 37:17
  SPEAKER_01: because you're going in at $40, is that right, with Valor Mortis?
• 37:19
  SPEAKER_00: Yes, we are.
• 37:20
  SPEAKER_00: That was, uh, that's one of the reasons why we're talking today.
• 37:23
  SPEAKER_00: Uh, I would say as a publisher,
• 37:25
  SPEAKER_00: you don't have that much decision-making that's a hundred percent,
• 37:29
  SPEAKER_00: you know, in your control.
• 37:31
  SPEAKER_00: Pricing is one of those things, you know, timing is by virtue of, uh, the development schedule.
• 37:36
  SPEAKER_00: And of course you could hypothetically hold a game, uh, and not release it when it's ready.
• 37:40
  SPEAKER_00: But generally speaking, you want to release games when they're done.
• 37:44
  SPEAKER_00: Um, But pricing is 100% in your control.
• 37:47
  SPEAKER_00: And this is something we've really agonized over.
• 37:49
  SPEAKER_00: I personally agonized over it greatly.
• 37:51
  SPEAKER_00: And my biggest concern was that it would send the wrong message about the game.
• 37:55
  SPEAKER_00: So we wanted to make sure that whether it's this interview with you or
• 37:59
  SPEAKER_00: whether we're going to be putting out a post on our social feed kind
• 38:02
  SPEAKER_00: of explaining why this game is $40, we wanted to make sure that we sort of
• 38:09
  SPEAKER_00: Send the right message to the consumer about why this is,
• 38:12
  SPEAKER_00: and hopefully help them understand that this is a decision we're making out
• 38:16
  SPEAKER_00: of confidence for the game.
• 38:17
  SPEAKER_00: We find ourselves in a situation where we are one of the only new IPs launching
• 38:21
  SPEAKER_00: in what is, I think, objectively the craziest fall in the history of this business.
• 38:26
  SPEAKER_00: Not only do you have GTA,
• 38:28
  SPEAKER_00: Loon and Large in November,
• 38:30
  SPEAKER_00: now you have the Zelda remake, which I'm very excited for.
• 38:33
  SPEAKER_00: You've got Control Resonant coming out in a couple of weeks.
• 38:36
  SPEAKER_00: You've got Silent Hill Homecoming, you've got Phantom Blade Zero, Gears of War.
• 38:43
  SPEAKER_00: We are, you know, again, by virtue of the development schedule, it just is what it is.
• 38:48
  SPEAKER_00: The cards we've been dealt is we are one of the only new IPs launching this fall.
• 38:52
  SPEAKER_00: We are pretty confident in Valor Mortis.
• 38:55
  SPEAKER_00: It is a great game.
• 38:56
  SPEAKER_00: I'm very, very excited for people to play it.
• 38:59
  SPEAKER_00: But ultimately,
• 38:59
  SPEAKER_00: I think the worst thing we could do is Not push our chips in and say,
• 39:05
  SPEAKER_00: we want this to be a game that you can pick up alongside these other great games.
• 39:08
  SPEAKER_00: The idea that people are going to pick Valor Mortis over some of the other games,
• 39:12
  SPEAKER_00: I'm sure some gamers will, I hope they will, of course.
• 39:16
  SPEAKER_00: But there was a developer we spoke to recently who had a lot of success with their game.
• 39:19
  SPEAKER_00: At the time, it was a $30 game.
• 39:21
  SPEAKER_00: I think if it had launched in today's world, it would be a $40 game.
• 39:24
  SPEAKER_00: And one of the things they said that really stuck with me and kind
• 39:26
  SPEAKER_00: of helped me wrap my head around this is we never regretted being an and game.
• 39:30
  SPEAKER_00: We never regretted pricing our game as something that you can pick up
• 39:33
  SPEAKER_00: when you're picking up other games.
• 39:35
  SPEAKER_00: And I think when we're launching in the fall that we're launching in,
• 39:38
  SPEAKER_00: going with this price point will help us be an and game.
• 39:41
  SPEAKER_01: I think a lot of people are like that.
• 39:42
  SPEAKER_01: And you know what?
• 39:43
  SPEAKER_01: We've just had two new IPs come out,
• 39:44
  SPEAKER_01: War Dogs and Blood of the Dawnwalker that both sold a million copies in
• 39:47
  SPEAKER_00: like a day,
• 39:48
  SPEAKER_00: in two days.
• 39:49
  SPEAKER_00: Yeah, but I'm playing Blood of the Dawnwalker now.
• 39:51
  SPEAKER_00: It's a great game.
• 39:52
  SPEAKER_00: Oh, good.
• 39:53
  SPEAKER_01: It's interesting about the $40 thing because I always assume it's a good thing.
• 39:57
  SPEAKER_01: Fans will like it.
• 39:58
  SPEAKER_01: It's a lot more reasonable.
• 39:59
  SPEAKER_01: But I remember somebody from Capcom years and years ago
• 40:02
  SPEAKER_01: when everyone raised their price to $70 and Capcom didn't immediately.
• 40:05
  SPEAKER_01: I think they stuck at $60 for their Resident Evil.
• 40:08
  SPEAKER_01: And the guy I was talking to was worried that fans would think it's a lesser game
• 40:11
  SPEAKER_01: because it was 60 or everyone else was 70.
• 40:13
  SPEAKER_01: And I always don't ever think that's the concern, but that is the concern.
• 40:18
  SPEAKER_00: I think it is certainly the concern for the publisher.
• 40:20
  SPEAKER_00: If I'm being honest with you, I think gamers, like, it's brackets, right?
• 40:26
  SPEAKER_00: So I think 40 and 50 are its own bracket in today's world, right?
• 40:30
  SPEAKER_00: And the difference between 40 and 50 is relatively small.
• 40:32
  SPEAKER_00: And so you may ask, well, Blake, you just said that one and you charge 50 for Val Morris.
• 40:36
  SPEAKER_00: I think it goes to this sort of idea of, like, it's this fall specifically.
• 40:40
  SPEAKER_00: It's crazy.
• 40:41
  SPEAKER_01: Yes.
• 40:42
  SPEAKER_01: You've got a lot of competition.
• 40:43
  SPEAKER_00: Yes.
• 40:43
  SPEAKER_00: I think 60 and 70 is its own band.
• 40:46
  SPEAKER_00: I mean, obviously, Dawnwalker is a new IP.
• 40:48
  SPEAKER_00: They launched at $70.
• 40:49
  SPEAKER_00: Credit to them.
• 40:50
  SPEAKER_00: They're crushing it.
• 40:52
  SPEAKER_00: But I think 70 is reserved for, you know, the titans of this business, primarily.
• 40:56
  SPEAKER_00: Well, Dawnwalker is the Witcher, folks, isn't it?
• 40:59
  SPEAKER_00: Yes.
• 40:59
  SPEAKER_01: I guess there's got a bit of clout there.
• 41:01
  SPEAKER_01: But yeah, carry on.
• 41:02
  SPEAKER_00: So I think it is a concern that I think publishers have.
• 41:04
  SPEAKER_00: I don't know if gamers see it the same way.
• 41:06
  SPEAKER_00: Now, I do think what they do see that,
• 41:08
  SPEAKER_00: and this is ripple effects and this is something we think about,
• 41:10
  SPEAKER_00: is like, it impacts Steam reviews, right?
• 41:13
  SPEAKER_00: It impacts how they talk about the game.
• 41:14
  SPEAKER_00: And so that's something we think about a lot,
• 41:17
  SPEAKER_00: is we want, you want as positive a sentiment about your game as possible.
• 41:21
  SPEAKER_00: And there's a relation between sentiment of their game and how much people spent on the game.
• 41:25
  SPEAKER_01: I think they got good value.
• 41:26
  SPEAKER_01: I mean, what do you think?
• 41:27
  SPEAKER_01: What do fans expect at $40?
• 41:30
  SPEAKER_00: I think $40 is when, I mean,
• 41:33
  SPEAKER_00: if I had the perfect answer to all these questions,
• 41:34
  SPEAKER_00: it wouldn't have been a decision that we agonized over as much as we did.
• 41:37
  SPEAKER_00: So I think my hope is that at $40,
• 41:40
  SPEAKER_00: they see Valor Mortis as an incredible value,
• 41:45
  SPEAKER_00: as a quote-unquote full game that just happens to be $40, because it is.
• 41:49
  SPEAKER_00: This is a 20-hour known voice cast.
• 41:53
  SPEAKER_00: We've announced Vincent Cassell as the voice of Napoleon.
• 41:55
  SPEAKER_00: We have some more announcements coming soon about who's in the voice cast
• 41:58
  SPEAKER_00: that we're very excited to share.
• 42:00
  SPEAKER_00: It's from a, I would say, a marquee independent studio in this business in One More Level.
• 42:05
  SPEAKER_00: It's beautiful graphics.
• 42:06
  SPEAKER_00: There's really nothing about it that's like, quote unquote, budget.
• 42:09
  SPEAKER_00: And I think that's always a place that we want to avoid at Lyrical Games.
• 42:11
  SPEAKER_00: I think we want to be careful.
• 42:12
  SPEAKER_00: There's like triple I and there's double A.
• 42:15
  SPEAKER_00: And I think the line between triple I and double A is very, very small.
• 42:18
  SPEAKER_00: The way I think about it is double A is like a lesser than triple A, right?
• 42:22
  SPEAKER_00: So it's a...
• 42:25
  SPEAKER_00: Game in a genre that typically has a lot of budget behind it,
• 42:28
  SPEAKER_00: but they didn't have the budget for whatever reason and they're sort of,
• 42:31
  SPEAKER_00: um, you can kind of feel it.
• 42:33
  SPEAKER_00: And I think for us,
• 42:34
  SPEAKER_00: we want to be in the IIII business, which is like, holy crap, this game's amazing.
• 42:37
  SPEAKER_00: I can't believe I got this for 40 bucks.
• 42:38
  SPEAKER_00: I can't believe that an independent developer made this game.
• 42:42
  SPEAKER_00: That's sort of the space we want to be in.
• 42:43
  SPEAKER_00: And so I hope that at $40, people will pick it up this fall and that's how they'll feel.
• 42:47
  SPEAKER_01: I find it fascinating how people Work in their brains what double A
• 42:51
  SPEAKER_01: and some people don't see triple A and double A as anything different either.
• 42:55
  SPEAKER_01: Correct.
• 42:55
  SPEAKER_01: I actually have a very specific view on it in that I use double A,
• 42:58
  SPEAKER_01: triple A and indie to sort of describe budgets,
• 43:01
  SPEAKER_01: brackets,
• 43:01
  SPEAKER_01: very broad budget brackets because,
• 43:03
  SPEAKER_01: and I've honestly,
• 43:04
  SPEAKER_01: people who have listened to this show loads have heard me say this a lot,
• 43:07
  SPEAKER_01: but I often see, for me,
• 43:10
  SPEAKER_01: a good double A game is a game that's not actually double A,
• 43:13
  SPEAKER_01: it's triple A at what it does.
• 43:15
  SPEAKER_01: It's just like it's very focused.
• 43:17
  SPEAKER_01: When I think about Clear Obscures and I think about Dispatch,
• 43:19
  SPEAKER_01: Dispatch is the best at what it does.
• 43:21
  SPEAKER_01: There's nothing out there.
• 43:22
  SPEAKER_01: For that kind of game, it's AAA.
• 43:24
  SPEAKER_01: But obviously that game's smaller in scope and ambition.
• 43:28
  SPEAKER_01: To you, is that AAA or is that AAA?
• 43:30
  SPEAKER_01: For me, it's a term I don't use.
• 43:32
  SPEAKER_01: It's the same.
• 43:33
  SPEAKER_01: But in my head, I say it's just a focused AAA game.
• 43:36
  SPEAKER_01: It just does a thing.
• 43:38
  SPEAKER_00: I think for me, to me, that's the...
• 43:40
  SPEAKER_00: We think about it very similarly.
• 43:41
  SPEAKER_00: I label that as triple I.
• 43:42
  SPEAKER_00: To me, that's exactly the space we want to be is like,
• 43:45
  SPEAKER_00: this is the best for, I mean,
• 43:46
  SPEAKER_00: that happens to be basically the only first person still is like,
• 43:48
  SPEAKER_00: but I want people to feel like this is the best first person still is like
• 43:51
  SPEAKER_00: that exists.
• 43:52
  SPEAKER_00: And therefore it's triple I.
• 43:53
  SPEAKER_00: Whereas I think double A,
• 43:54
  SPEAKER_00: you feel oftentimes people are striving for something that really maybe,
• 43:59
  SPEAKER_00: I don't want to say they shouldn't be because that's the wrong way of phrasing it,
• 44:01
  SPEAKER_00: but that they don't really have the budget to support.
• 44:03
  SPEAKER_01: Yeah, I think the terms are,
• 44:05
  SPEAKER_01: I think as we're discovering this conversation, sort of meaningless.
• 44:09
  SPEAKER_01: I think in terms of articulating what it is you're looking forward to.
• 44:12
  SPEAKER_00: And there are meaningless,
• 44:13
  SPEAKER_00: and I bet you there are many, many gamers who don't even know what triple I is.
• 44:17
  SPEAKER_00: It's an industry phrase, yeah.
• 44:19
  SPEAKER_01: It's day and day in Game Pass, isn't it, Valor Mortis?
• 44:21
  SPEAKER_01: Is that right?
• 44:21
  SPEAKER_00: It is, yes.
• 44:22
  SPEAKER_01: Does that influence the pricing decision at all?
• 44:27
  SPEAKER_00: Um, no, not significantly, no.
• 44:30
  SPEAKER_00: Um, I would say on the list of things that went into the decision, it was very low on the list.
• 44:36
  SPEAKER_00: I think we are, I want to be careful because Game Pass is Microsoft's business.
• 44:41
  SPEAKER_01: Oh, yeah.
• 44:42
  SPEAKER_00: We have a great partnership with Microsoft.
• 44:44
  SPEAKER_00: I want to, I want to not say anything about their business.
• 44:47
  SPEAKER_00: I would say my perception is that Game Pass has reached your maturity point
• 44:51
  SPEAKER_00: in this business where there are Game Pass gamers and there are people
• 44:55
  SPEAKER_00: who play games on Game Pass and they're very excited about Game Pass.
• 44:57
  SPEAKER_00: And we were unlikely to sell to those customers at least day and date anyway.
• 45:05
  SPEAKER_00: And so we're happy to be in Game Pass.
• 45:07
  SPEAKER_00: That's interesting.
• 45:08
  SPEAKER_00: But I'm not really that concerned about cannibalization.
• 45:11
  SPEAKER_00: There's been a lot of discourse about Game Pass over the past few years.
• 45:13
  SPEAKER_00: I think for every game that is,
• 45:16
  SPEAKER_00: quote unquote,
• 45:16
  SPEAKER_00: cannibalized from Game Pass,
• 45:18
  SPEAKER_00: there's another game that got amazing word of mouth partially because it was
• 45:22
  SPEAKER_00: in Game Pass.
• 45:23
  SPEAKER_00: Yeah.
• 45:23
  SPEAKER_00: I mean, Cleric Square launched into Game Pass, and we've talked about that a bunch already.
• 45:26
  SPEAKER_01: And it found its audience.
• 45:27
  SPEAKER_01: It's interesting.
• 45:28
  SPEAKER_01: I know that we had Alex Hutchinson on talking about Revenge of the Savage Planet,
• 45:32
  SPEAKER_01: and he talked about how loads of people discovered the game because of Game Pass.
• 45:36
  SPEAKER_01: But what he found is Game Pass customers don't necessarily spend money.
• 45:40
  SPEAKER_01: So he was hoping for DLCs and add-ons and stuff to be sold in it.
• 45:43
  SPEAKER_01: And that isn't actually what happened.
• 45:45
  SPEAKER_01: People who bought the DLC and add-ons are the people that bought the game in
• 45:47
  SPEAKER_01: the first place and wasn't necessarily the subscription.
• 45:49
  SPEAKER_01: But I find it really interesting.
• 45:50
  SPEAKER_01: It's like a different psychology of audience, I guess.
• 45:55
  SPEAKER_01: On Contra, we've really rattled through some topics I thought we'd spend a lot more time on.
• 46:01
  SPEAKER_01: But you've announced two games.
• 46:02
  SPEAKER_01: How many games can you handle Lyrical in terms of how many are you looking for?
• 46:07
  SPEAKER_00: Yeah, it's a great question.
• 46:08
  SPEAKER_01: You said you were keeping you up at night trying to find them.
• 46:11
  SPEAKER_00: Yeah, I think that's a really important part of our philosophy.
• 46:13
  SPEAKER_00: I worked at Private Division before I ran business development there,
• 46:17
  SPEAKER_00: and I don't want to talk too much about the Private Division business,
• 46:19
  SPEAKER_00: but I would just say,
• 46:20
  SPEAKER_00: generally speaking,
• 46:21
  SPEAKER_00: when you're at a large company,
• 46:23
  SPEAKER_00: You can sometimes feel like you're signing games to support your headcount as
• 46:26
  SPEAKER_00: a publisher.
• 46:28
  SPEAKER_00: And nobody ever says it so explicitly,
• 46:29
  SPEAKER_00: to be clear, but it's something that I personally felt pressure on.
• 46:32
  SPEAKER_00: Like, oh, what are we doing?
• 46:35
  SPEAKER_00: Q3, 2028, when we have all these people around.
• 46:37
  SPEAKER_00: And I think for us at Lyrical,
• 46:40
  SPEAKER_00: and for me personally,
• 46:41
  SPEAKER_00: I always want to be feeling like we are building the team here
• 46:44
  SPEAKER_00: to support games we believe in.
• 46:45
  SPEAKER_00: So we don't have, right now we're only seven employees at Lyrical Games.
• 46:49
  SPEAKER_00: We can grow.
• 46:51
  SPEAKER_00: I think we probably will inevitably grow.
• 46:53
  SPEAKER_00: I'm sure we'll learn a lot in the next few months about how Valor's launch went.
• 46:57
  SPEAKER_00: And I have no doubt there will be some things where we're like,
• 46:59
  SPEAKER_00: oh, it would have been nice if we had somebody here.
• 47:01
  SPEAKER_00: It would have been nice if we had somebody there.
• 47:03
  SPEAKER_00: We'll figure that stuff out.
• 47:06
  SPEAKER_00: We've signed six games so far.
• 47:07
  SPEAKER_00: We've announced two.
• 47:08
  SPEAKER_00: We can't talk about the other four,
• 47:10
  SPEAKER_00: except for I can say,
• 47:11
  SPEAKER_00: because we have announced that we have a partnership with Blackbird Interactive.
• 47:14
  SPEAKER_00: We have another partnership with the Chinese Room.
• 47:17
  SPEAKER_00: These are two developers that are fairly storied in the independent business,
• 47:20
  SPEAKER_00: and that's absolutely part of our strategy here.
• 47:25
  SPEAKER_00: And the other two, very excited to unveil.
• 47:27
  SPEAKER_00: One's from a new team, one's from an established team a little lesser known.
• 47:35
  SPEAKER_00: But for us, the thing we say internally is it's not a hell yeah to know.
• 47:40
  SPEAKER_00: And finding the hell yeahs is really hard.
• 47:41
  SPEAKER_00: I mean, if I'm being honest with you, we've probably seen over 500.
• 47:46
  SPEAKER_00: We don't count.
• 47:47
  SPEAKER_00: I would guess we've seen somewhere between 500 and 1,000 games
• 47:49
  SPEAKER_00: since we started League of Legends games.
• 47:51
  SPEAKER_00: And I'm including The pictures that come to our inbox that we ignore, of course.
• 47:55
  SPEAKER_00: But I would say in that time,
• 47:56
  SPEAKER_00: we've probably seen eight or nine or ten that we really believe in and
• 48:00
  SPEAKER_00: that were held against us, and then we signed six of those.
• 48:03
  SPEAKER_00: So, yeah, I mean, I'm happy to talk about sort of like what the types of games that we look for.
• 48:09
  SPEAKER_01: Yeah, tell us, well, let's end on that.
• 48:11
  SPEAKER_01: You mentioned storage studios, people at the Chinese room.
• 48:13
  SPEAKER_00: I think for us, the number one thing with a bullet is to partner with developers who get it.
• 48:20
  SPEAKER_00: We like to say internally who have the sauce.
• 48:22
  SPEAKER_00: For us, the sauce is developers who are that perfect mix of art and commerce.
• 48:29
  SPEAKER_00: They understand why they're making the game they're making,
• 48:32
  SPEAKER_00: who it's for,
• 48:33
  SPEAKER_00: how the game can break through the noise and have baked the breaking through
• 48:38
  SPEAKER_00: the noise dynamic that is so fundamental to today's business.
• 48:42
  SPEAKER_00: They've baked that sort of into the pitch and into the game design itself, right?
• 48:47
  SPEAKER_00: Again, just use Valermartis as a prime example.
• 48:50
  SPEAKER_00: It's from the creators of Ghostrunner, and it's a first-person sales like.
• 48:53
  SPEAKER_00: Those are two pillars that we've used throughout the marketing, and it's been very successful.
• 48:57
  SPEAKER_00: Those are hard to find, of course.
• 48:58
  SPEAKER_00: So that's number one with the bullet,
• 48:59
  SPEAKER_00: is sort of a strong developer who is sort of a business unto themselves.
• 49:04
  SPEAKER_00: And that business employs artists, but is not art for the sake of art type of developer.
• 49:10
  SPEAKER_00: The other thing that we look for is sort of, and that's sort of pressing our advantage.
• 49:13
  SPEAKER_00: I spoke about earlier being part of a larger media company.
• 49:15
  SPEAKER_00: We do have a good amount of resources behind us as a label.
• 49:19
  SPEAKER_00: We are looking to back games that are of a certain budget type because we think
• 49:23
  SPEAKER_00: that does help us break through the noise by virtue of fidelity,
• 49:27
  SPEAKER_00: by virtue of ambition.
• 49:28
  SPEAKER_00: You know,
• 49:29
  SPEAKER_00: even Erosion,
• 49:30
  SPEAKER_00: the other game that we've announced besides Valor Mortis,
• 49:33
  SPEAKER_00: it's a roguelike, but it's voxel-based.
• 49:36
  SPEAKER_00: It's open world, semi-open world, depending on how you want to look at it.
• 49:39
  SPEAKER_00: It is a very ambitious roguelike.
• 49:40
  SPEAKER_00: It is not,
• 49:40
  SPEAKER_00: if you look at some of the stuff we put out,
• 49:42
  SPEAKER_00: this is not like a standard bog indie roguelike.
• 49:46
  SPEAKER_00: And the budget...
• 49:48
  SPEAKER_00: For the genre is on the higher side.
• 49:51
  SPEAKER_00: And I think generally speaking,
• 49:54
  SPEAKER_00: something we talk about is like,
• 49:55
  SPEAKER_00: we want the games that we back to be games that you would be quite surprised.
• 50:00
  SPEAKER_00: I don't want to say it's impossible,
• 50:01
  SPEAKER_00: but you'd be quite surprised if they were self-published and also to be games
• 50:04
  SPEAKER_00: that we can go to a Microsoft, a Sony, a Nintendo, a Jeff Keighley.
• 50:09
  SPEAKER_00: Triple I Initiative, some of these great showcases.
• 50:12
  SPEAKER_00: And with a straight face say, these should be alongside, you know, the other big reveals.
• 50:16
  SPEAKER_00: It doesn't feel like these games that we back would be in sort of like
• 50:20
  SPEAKER_00: the indie section of those things, right?
• 50:21
  SPEAKER_00: Sometimes,
• 50:22
  SPEAKER_00: you know,
• 50:22
  SPEAKER_00: there's like a part of the Keeley stuff where all of a sudden there's like a really,
• 50:26
  SPEAKER_00: really indie game.
• 50:27
  SPEAKER_00: And some of those are great.
• 50:27
  SPEAKER_00: I'm not casting aspersions.
• 50:29
  SPEAKER_00: But we want it to be like, oh, yeah,
• 50:30
  SPEAKER_00: like Valor Mortis looks totally fine being the trailer after Gears of War,
• 50:33
  SPEAKER_00: for instance.
• 50:34
  SPEAKER_00: And...
• 50:37
  SPEAKER_00: Yeah, I would say genre, we don't have genres that we are looking to play in, right?
• 50:44
  SPEAKER_00: I think you're increasingly seeing specialist publishers.
• 50:48
  SPEAKER_00: For us,
• 50:48
  SPEAKER_00: it's probably easier to say the genres that we would not work in versus the ones
• 50:52
  SPEAKER_00: that we would.
• 50:54
  SPEAKER_00: That's sort of the combination.
• 50:57
  SPEAKER_00: It's a little bit of alchemy.
• 50:59
  SPEAKER_00: I would say, like, we as a team, we kind of are usually always on the same page.
• 51:02
  SPEAKER_00: Like, we see a pitch,
• 51:03
  SPEAKER_00: and the ones that we've decided to go for,
• 51:05
  SPEAKER_00: we're all kind of nodding to, like,
• 51:07
  SPEAKER_00: you know,
• 51:07
  SPEAKER_00: you kind of see the eyes around the room kind of nodding,
• 51:09
  SPEAKER_00: like, you know, this is it.
• 51:10
  SPEAKER_01: It does seem to be an interesting space to play,
• 51:12
  SPEAKER_01: and it's where a lot of the more fast,
• 51:13
  SPEAKER_01: big games are coming from at the moment, or a lot of the more interesting ones.
• 51:17
  SPEAKER_01: And I think, you know, those things can become AAA games in time.
• 51:20
  SPEAKER_01: I'm sure if Valor Mortis is a hit, Valor Mortis 2 will probably have a bigger budget.
• 51:23
  SPEAKER_00: Almost certainly, yes.
• 51:24
  SPEAKER_01: Yeah.
• 51:25
  SPEAKER_01: Blake, thank you so much for your time.
• 51:26
  SPEAKER_01: Yeah, thank you.
• 51:27
  SPEAKER_01: Good luck with the launch of the game.
• 51:28
  SPEAKER_01: I know it's a busy time, but I do think it stands out.
• 51:30
  SPEAKER_01: So hopefully it'll do very well for you.
• 51:31
  SPEAKER_01: And yeah, thank you for your time.
• 51:32
  SPEAKER_00: Yeah, really appreciate it.
• 51:33
  SPEAKER_00: Thank you, Chris.
• 51:34
  SPEAKER_01: Thank you to Blake there.
• 51:36
  SPEAKER_01: I actually learned quite a lot from that interview.
• 51:38
  SPEAKER_01: All that's left for us to do is to wrap up the news from the last week.
• 51:42
  SPEAKER_01: And let's begin with Sega.
• 51:43
  SPEAKER_01: I've just come from the Sega Party and Sega has signed a deal with Netflix for movie
• 51:48
  SPEAKER_01: and TV series based on crazy Crazy Taxi,
• 51:50
  SPEAKER_01: Stranger Than Heaven and Sonic the Hedgehog.
• 51:52
  SPEAKER_01: The first project will be based on Crazy Taxi with Dan Gregor and Doug Mand.
• 51:56
  SPEAKER_01: They're the people behind the 2025 Naked Gun reboot.
• 51:59
  SPEAKER_01: On scripting, they're on scripting duties.
• 52:01
  SPEAKER_01: Sonic producers Neil H. Moritz and Toby Asher and Teru Nakahara will produce it.
• 52:07
  SPEAKER_01: Blizzard had a big event last week,
• 52:08
  SPEAKER_01: Blizzcon was on and they, loads of stuff was announced there.
• 52:11
  SPEAKER_01: They announced that Diablo 5 is coming out in 2029 as
• 52:14
  SPEAKER_01: an open world StarCraft shooter coming out in 2030, quite far away those games.
• 52:18
  SPEAKER_01: Got a little bit closer,
• 52:19
  SPEAKER_01: there's a new World of Warcraft variant called World of Warcraft Forever
• 52:21
  SPEAKER_01: which will run alongside the Classic and the Vanilla game.
• 52:24
  SPEAKER_01: That's June November 4th,
• 52:25
  SPEAKER_01: the firm also announced it is also partnering with Netflix on
• 52:29
  SPEAKER_01: a Diablo animated series.
• 52:33
  SPEAKER_01: Let's move over to Team17.
• 52:34
  SPEAKER_01: They've had a good week with the game they published, War Dogs, doing so well.
• 52:38
  SPEAKER_01: They actually reported half-year revenue being down 8% to £66.9 million.
• 52:43
  SPEAKER_01: This is for the six months ending June 30th.
• 52:45
  SPEAKER_01: Profit is down 29% to £23.9 million.
• 52:48
  SPEAKER_01: However,
• 52:49
  SPEAKER_01: Team17 pair in Everplay expects strong four-year results due to the success of,
• 52:54
  SPEAKER_01: yeah, Bulkhead's War Dogs and Expression Games' Hell Let Loose Vietnam.
• 52:59
  SPEAKER_01: Everplay says it actually increased its stake in Bulkhead.
• 53:01
  SPEAKER_01: It proves it had a 20% stake.
• 53:02
  SPEAKER_01: I don't know how big their stake is now,
• 53:04
  SPEAKER_01: but they've increased their stake from the launch of War Dogs.
• 53:06
  SPEAKER_01: War Dogs has, of course, sold 2 million copies.
• 53:08
  SPEAKER_01: You can watch our interview with the War Dogs CEO,
• 53:12
  SPEAKER_01: the Bulkhead CEO, who made War Dogs, now on thegamebusiness.com.
• 53:16
  SPEAKER_01: Elsewhere, Valve has opened a waiting list for its new VR system, Steamframe.
• 53:19
  SPEAKER_01: There are two versions with a cheaper 250GB model on sale for just over a grand,
• 53:25
  SPEAKER_01: $1,000,
• 53:26
  SPEAKER_01: and the 1TB model coming in at $1,299,
• 53:28
  SPEAKER_01: so pretty pricey, as you would expect with the current component challenges.
• 53:33
  SPEAKER_01: Roblox creators will be able to publish their games on mobile,
• 53:36
  SPEAKER_01: PC, and console through the Roblox Everywhere initiative.
• 53:38
  SPEAKER_01: Specifically,
• 53:40
  SPEAKER_01: Roblox creators can make their games available as standalone apps
• 53:42
  SPEAKER_01: on multiple platforms.
• 53:44
  SPEAKER_01: There's a lot,
• 53:44
  SPEAKER_01: so I don't quite know how that's going to work,
• 53:46
  SPEAKER_01: and I'll be talking to Roblox soon to hopefully get a little bit more of
• 53:49
  SPEAKER_01: an understanding around that.
• 53:51
  SPEAKER_01: Moss developer, Polyarch Games, will close down after 12 years.
• 53:55
  SPEAKER_01: The Seattle-based company,
• 53:56
  SPEAKER_01: which also worked in VR,
• 53:57
  SPEAKER_01: done a lot of stuff in VR,
• 53:58
  SPEAKER_01: announced on LinkedIn it will be winding down active development.
• 54:00
  SPEAKER_01: It's a shame, Moss is a great game.
• 54:02
  SPEAKER_01: A couple of final stories,
• 54:03
  SPEAKER_01: GTA 6 Extended Look on Netflix generated over 100,000 signups to the service in
• 54:07
  SPEAKER_01: the US, that's according to Ampere analysis.
• 54:09
  SPEAKER_01: And finally,
• 54:10
  SPEAKER_01: Nintendo Life and Push Square publisher Hookshot has launched Steam Hype,
• 54:13
  SPEAKER_01: which is a new PC-focused media outlet.
• 54:15
  SPEAKER_01: The UK-based company also operates Pure Xbox and Time Extension.
• 54:19
  SPEAKER_01: Time Extension is a retro games brand that I love very, very much.
• 54:22
  SPEAKER_01: Wow, big addition this week.
• 54:24
  SPEAKER_01: Thank you all for tuning in.
• 54:25
  SPEAKER_01: We will be back next week for all sorts of interviews and analysis,
• 54:27
  SPEAKER_01: including one with Ubisoft's Rainbow 16.
• 54:31
  SPEAKER_01: I'm now going to enjoy the sights of Tokyo, but until next time, thank you for tuning in.