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Unity CEO: “The cost of building a game is coming down markedly” · The Game Business Show

• 0:00
  SPEAKER_01: Although there's all this disruption in the market,
• 0:02
  SPEAKER_01: the cost of building a game is coming down markedly.
• 0:08
  SPEAKER_01: It used to be that like half the amount of resource you had to pour
• 0:12
  SPEAKER_01: into something was the single biggest driver Whether or not you could be successful,
• 0:16
  SPEAKER_01: not that there weren't lots of very high-profile flame-off,
• 0:18
  SPEAKER_01: but that barrier was, well, can I have 200, 300 people together to do something?
• 0:24
  SPEAKER_01: Can I pay for that for five years?
• 0:26
  SPEAKER_01: That world is on the verge of changing radically.
• 0:30
  SPEAKER_01: If I had a dollar for every time I went on X and somebody said, look at this.
• 0:34
  SPEAKER_01: I one-shotted this with 3GS and look, The Game Business is over.
• 0:39
  SPEAKER_01: People love to do that.
• 0:41
  SPEAKER_01: There's nothing in the world I find more aggravating than that.
• 0:45
  SPEAKER_01: The individual human spark of creativity is the most important thing in this environment.
• 0:52
  SPEAKER_00: Hello there and welcome to The Game Business Show.
• 0:55
  SPEAKER_00: This week's edition is sponsored by Keyword Studios.
• 0:58
  SPEAKER_00: They're very much the video game industry's end-to-end partner.
• 1:01
  SPEAKER_00: They've got 13,000 people across 26 countries all helping studios to make games,
• 1:07
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• 1:09
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• 1:38
  SPEAKER_00: or check out the newsletter attached with this show.
• 1:41
  SPEAKER_00: Speaking of which, let's get back to it.
• 1:44
  SPEAKER_00: Hello and welcome to The Game Business Show.
• 1:46
  SPEAKER_00: This week we welcome Unity.
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  SPEAKER_00: The tech giant just had its best ever quarter as a public company.
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  SPEAKER_00: It showcased Unity 7 to the world and is doing all sorts of interesting things with ads and AI.
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  SPEAKER_00: But more than that,
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  SPEAKER_00: it's a company at the heart of this business and I'm sure has lots of thoughts on
• 2:00
  SPEAKER_00: where it's all heading.
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  SPEAKER_00: And who better to chat through them with me than Unity CEO Matthew Bromberg.
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  SPEAKER_00: And he's here with me now.
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  SPEAKER_00: Hello, Matthew.
• 2:07
  SPEAKER_00: Welcome to the show.
• 2:08
  SPEAKER_00: Hello.
• 2:08
  SPEAKER_00: Thank you so much for having me.
• 2:10
  SPEAKER_00: It's a privilege for you to come on.
• 2:14
  SPEAKER_00: It is.
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  SPEAKER_01: I feel privileged.
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  SPEAKER_00: I've never let that down.
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  SPEAKER_00: You've just delivered some really,
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  SPEAKER_00: as I said at the start, you've delivered some really great results.
• 2:26
  SPEAKER_00: And I think back to how Unity looked even three years ago,
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  SPEAKER_00: both financially and the trust and the view of the industry.
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  SPEAKER_00: It seems to be quite a turnaround.
• 2:36
  SPEAKER_00: This is quite a nice opening question.
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  SPEAKER_00: What's gone right?
• 2:39
  SPEAKER_00: Yeah, thank you.
• 2:41
  SPEAKER_01: And people rarely ask me that, so I'm pleased to answer.
• 2:45
  SPEAKER_01: I think what you said at the top, the word you used around trust is critical.
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  SPEAKER_01: For all the other issues we had as a company, and we had a relatively long list of issues.
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  SPEAKER_01: The most important one was that the downstream impact of our inability
• 3:03
  SPEAKER_01: to deliver what we needed to deliver was that folks stopped trusting us.
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  SPEAKER_01: And trust is critical in any relationship either between people or between people
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  SPEAKER_01: and customers in a company.
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  SPEAKER_01: But it's particularly critical when you operate a platform as we do on top of
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  SPEAKER_01: which Folks have their livelihoods and for our professional customers and for
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  SPEAKER_01: the broader community where people really invest their kind of dreams
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  SPEAKER_01: and creative aspirations.
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  SPEAKER_01: And so it's a very emotional thing when you break that trust for people and it's
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  SPEAKER_01: a very serious thing from a business perspective and it's not good.
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  SPEAKER_01: But the thing is,
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  SPEAKER_01: in order for people to be able to trust you,
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  SPEAKER_01: you have to have A control over the quality and timing of what you're delivering
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  SPEAKER_01: and around the nature of what that is.
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  SPEAKER_01: So if you don't have control over it,
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  SPEAKER_01: I can promise you something, but I can't be sure I can deliver it.
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  SPEAKER_01: So gaining back trust is really a two-part thing, right?
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  SPEAKER_01: First was originally when I first arrived two years ago,
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  SPEAKER_01: a lot of the trust issues were related to the runtime thing.
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  SPEAKER_01: But had, in fairness, predated that.
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  SPEAKER_01: So that wasn't really that big a deal.
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  SPEAKER_01: Obviously, it was gonna revert that, and that was, it was not working.
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  SPEAKER_01: But that was more a precondition than methane, right?
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  SPEAKER_01: Then it was like, okay,
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  SPEAKER_01: if we can levels that,
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  SPEAKER_01: let's try to rebuild that relationship and that trust by being as clear
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  SPEAKER_01: as we possibly can about what we're trying to do,
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  SPEAKER_01: about what we're trying to deliver, and to deliver those things.
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  SPEAKER_01: And if I start doing that, you probably still don't trust me the first time.
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  SPEAKER_01: I come back the second time.
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  SPEAKER_01: I said, Hey, remember I said this and we gave you that.
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  SPEAKER_01: And if those decisions are clear headed and they're actually reflective
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  SPEAKER_01: of what people want and you start giving it to them,
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  SPEAKER_01: that's the process of rebuilding trust in anything.
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  SPEAKER_01: And so that piece was critical.
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  SPEAKER_01: And then we had to get back to delivering Software that worked,
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  SPEAKER_01: that was stable, that reflected the needs of our customers.
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  SPEAKER_01: And that was a lot of the work in turning around the company.
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  SPEAKER_01: What's super exciting now is that that sort of remediation period Largely feels like it's over.
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  SPEAKER_01: And as we begin to launch products now,
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  SPEAKER_01: they're not sort of products designed to make right the mistakes of the past as much
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  SPEAKER_01: as they are to help capture forward-looking opportunities.
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  SPEAKER_01: So that journey over the last couple of years has been really exciting and fulfilling.
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  SPEAKER_00: You've got a reputation,
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  SPEAKER_00: I think,
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  SPEAKER_00: historically of Sort of turning things around for companies like EA and Zynga
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  SPEAKER_00: and places like that.
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  SPEAKER_00: Is the secret then clarity?
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  SPEAKER_00: Is it always about trust?
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  SPEAKER_00: What's the secret?
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  SPEAKER_01: The most important thing is to be honest and fearless about what's going wrong.
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  SPEAKER_01: What it is that people are unhappy about.
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  SPEAKER_01: And to authentically connect and try to fix the problem.
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  SPEAKER_01: No matter how difficult,
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  SPEAKER_01: no matter how painful,
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  SPEAKER_01: no matter how much change you have to make,
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  SPEAKER_01: no matter what you have to do,
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  SPEAKER_01: no matter how much risk you need to take on, you have to commit to making it better.
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  SPEAKER_01: And I think the issues that folks run into in these things is, the first one is fear.
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  SPEAKER_01: So they think, well, if I make all these changes, I might make it worse.
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  SPEAKER_01: Like, what if I hurt the business?
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  SPEAKER_01: And the key to this whole thing is prioritization.
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  SPEAKER_01: We decided,
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  SPEAKER_01: we think we understand what people need,
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  SPEAKER_01: we're going to deliver those things,
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  SPEAKER_01: but that means we're not going to deliver a whole host of other things.
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  SPEAKER_01: Well, what's those things that I don't deliver create a problem?
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  SPEAKER_01: Or like...
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  SPEAKER_01: Gosh, if I'm going to make everything different,
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  SPEAKER_01: I'm probably going to have to change a lot of the people we're working with, right?
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  SPEAKER_01: And a lot of the ways we're working because it hasn't produced the results we need.
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  SPEAKER_01: There's going to be a tremendous amount of confrontation and awkwardness and pain
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  SPEAKER_01: in reformulating teams and changing executives and changing partners.
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  SPEAKER_01: All this stuff is painful.
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  SPEAKER_01: You have to...
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  SPEAKER_01: Care more about the end result than you do about the daily pain and the fear.
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  SPEAKER_01: And that's what's really hard about it.
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  SPEAKER_01: I think in my experience of doing this for a lot of years,
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  SPEAKER_01: usually folks know what the issues are to one degree or another,
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  SPEAKER_01: but they're afraid to confront them because of what they imagine they're going
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  SPEAKER_01: to have to do.
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  SPEAKER_01: If that perception is correct.
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  SPEAKER_01: And they think about all the things that are going to have to happen, how hard it's going to be.
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  SPEAKER_01: And so they pull back from understanding, like almost subconsciously.
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  SPEAKER_00: And I think that's a lot of the key.
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  SPEAKER_00: I imagine lots of companies are going through these sort of questions and challenges.
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  SPEAKER_01: Well, certainly the environment is one in which the velocity of change is accelerating
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  SPEAKER_01: and there's dislocation of Business models and approaches,
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  SPEAKER_01: and it's a really good environment to not be afraid in.
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  SPEAKER_00: I like that.
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  SPEAKER_00: If that's possible.
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  SPEAKER_00: Well, I listened to your opening speech at Unite in Seoul,
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  SPEAKER_00: and it was very positive, which we love to hear.
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  SPEAKER_00: I love to hear, certainly, at The Game Business.
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  SPEAKER_00: But is this hope?
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  SPEAKER_00: Is this just in your heart, you know?
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  SPEAKER_00: Is things all right?
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  SPEAKER_00: Or is there evidence that you've seen that means that you think we're
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  SPEAKER_00: a positive inflection point in this industry?
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  SPEAKER_01: Yeah, listen,
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  SPEAKER_01: there's no question there's been a tremendous amount of dislocation in our business
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  SPEAKER_01: and a lot of studios are kind of retrenching and there's been some job loss.
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  SPEAKER_01: I mean, there's just no question about that, right?
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  SPEAKER_01: I think it's important to recognize that.
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  SPEAKER_01: So we're clearly in this moment of transition that is causing some pain.
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  SPEAKER_01: But the next question,
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  SPEAKER_01: which is, well,
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  SPEAKER_01: am I optimistic about the future of I am absolutely 100% optimistic for
• 9:18
  SPEAKER_01: a few reasons.
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  SPEAKER_01: The first one is having been doing this for some time.
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  SPEAKER_01: What I can tell you is I've never spent a year in this business
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  SPEAKER_01: where people aren't prone to sort of doom and gloom.
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  SPEAKER_01: There's something about video game developers that,
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  SPEAKER_01: and I don't know what it is, but there's always a lot of noise.
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  SPEAKER_01: And the one that I can tell you is that the demand is not going anywhere.
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  SPEAKER_01: The place to start fundamentally is
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  SPEAKER_01: that human beings love interactive entertainment,
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  SPEAKER_01: and they love playing, and they love playing with other people, with their friends.
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  SPEAKER_01: And there is no evidence that I've seen at all that there is some degradation in
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  SPEAKER_01: the desire to do those things.
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  SPEAKER_01: The other thing is that Although there's all this disruption in the market,
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  SPEAKER_01: the cost of building a game is coming down markedly.
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  SPEAKER_01: And that will continue.
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  SPEAKER_01: I think part of what we're seeing is some studios are getting smaller,
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  SPEAKER_01: so there's some pain associated with that.
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  SPEAKER_01: But there's also some real opportunity.
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  SPEAKER_01: In many ways,
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  SPEAKER_01: in my mind,
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  SPEAKER_01: there has never been a better time for independents to get together to have
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  SPEAKER_01: the capability To make something extraordinary.
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  SPEAKER_01: And I said that in Seoul.
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  SPEAKER_01: And I really believe it because we're entering a phase of our industry where it used
• 10:50
  SPEAKER_01: to be that the amount of resource you had to pour into something was
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  SPEAKER_01: the single biggest driver, whether or not you could be successful.
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  SPEAKER_01: Not that there weren't lots of very high profile flame-off,
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  SPEAKER_01: but that barrier was, well, can I have 200, 300 people together to do something?
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  SPEAKER_01: Can I pay for that for five years?
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  SPEAKER_01: That world is...
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  SPEAKER_01: On the verge of changing radically and as a consequence for those who are able
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  SPEAKER_01: to use the tools to take the power back in a way that creates opportunity
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  SPEAKER_01: for themselves and creates great art and entertainment for others.
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  SPEAKER_01: Those folks are in a really great spot.
• 11:31
  SPEAKER_01: And by the way,
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  SPEAKER_01: I think it's fair to say that,
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  SPEAKER_01: for example, in PC, like this is maybe like the golden age of indie PC.
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  SPEAKER_01: And what have we seen?
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  SPEAKER_01: We've seen a lot of amazing games come out.
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  SPEAKER_01: That's the other thing.
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  SPEAKER_01: Like, don't forget, it's not that great games aren't coming out.
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  SPEAKER_01: They are.
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  SPEAKER_01: New platforms are appearing.
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  SPEAKER_01: We just didn't deal with Netflix.
• 11:58
  SPEAKER_01: To help support that new platform.
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  SPEAKER_01: But the Switch was very successful.
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  SPEAKER_01: Switch 2 was very successful.
• 12:05
  SPEAKER_01: The platform economics are getting better.
• 12:08
  SPEAKER_01: So you've got this sort of opening of the app stores.
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  SPEAKER_01: And ultimately, great creators will innovate and create great games.
• 12:19
  SPEAKER_01: And we happen to this a little bit of,
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  SPEAKER_01: I think as an industry, the last few years was a period of optimization.
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  SPEAKER_01: Around known models and gameplay modalities.
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  SPEAKER_01: And that created a kind of sameness and a kind of sequelization both literally
• 12:40
  SPEAKER_01: and metaphorically.
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  SPEAKER_01: And it led ultimately to a disconnect between like a lot of the major games projects
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  SPEAKER_01: that came out and how consumers and players received those.
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  SPEAKER_01: And so there was a lot of failure in that connection.
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  SPEAKER_01: But it's hard to make hit games.
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  SPEAKER_01: It always has been, it always will be.
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  SPEAKER_01: We will make great games in this industry,
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  SPEAKER_01: and we'll make them on new platforms,
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  SPEAKER_01: and more people will make them than made them before, and everything will be fine.
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  SPEAKER_00: Well, I agree with you.
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  SPEAKER_00: One of the things I look at our sister industry,
• 13:18
  SPEAKER_00: Hollywood,
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  SPEAKER_00: and they're banging on our door because we're creating IP and they're not.
• 13:24
  SPEAKER_00: And I ran through some of the hits we've had this year and a lot of them are indie games.
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  SPEAKER_00: But also,
• 13:28
  SPEAKER_00: there are AAA games that are hits,
• 13:30
  SPEAKER_00: and there are AAA new IP, like Pragmaton, Crimson Desert, that are hits.
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  SPEAKER_00: Great examples.
• 13:35
  SPEAKER_00: People say to me, what's working in video games?
• 13:37
  SPEAKER_00: Well, look, it's all hard, right?
• 13:38
  SPEAKER_00: It's all competitive.
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  SPEAKER_00: There's all too much stuff, and there's not enough time.
• 13:41
  SPEAKER_00: I said, but actually, it all is kind of working.
• 13:44
  SPEAKER_00: It's just our audience is not just one or two people.
• 13:46
  SPEAKER_00: It's everybody, and they all want different things.
• 13:48
  SPEAKER_00: Yes.
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  SPEAKER_01: I experienced that as a dislocation between what people are making
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  SPEAKER_01: and what people want, and that happened.
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  SPEAKER_01: There was a disconnect.
• 13:59
  SPEAKER_01: But that doesn't mean that video games are not going to thrive in the future.
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  SPEAKER_01: I don't leave it again because it goes back to it is a fundamental human need
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  SPEAKER_00: that is not going anywhere.
• 14:13
  SPEAKER_00: One of the things you mentioned on stage,
• 14:14
  SPEAKER_00: you say that the video game industry is appearing to sort of shift east.
• 14:18
  SPEAKER_00: And I know potentially the stage you were on was sort of instigating that conversation.
• 14:22
  SPEAKER_01: Yeah.
• 14:23
  SPEAKER_00: But it stems a little bit from an interview with Sumo last week,
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  SPEAKER_00: where they talked about how they laid off some staff in the UK,
• 14:29
  SPEAKER_00: but they didn't lay up any staff in India.
• 14:31
  SPEAKER_00: Should the West be worried?
• 14:32
  SPEAKER_00: At a very fundamental level,
• 14:35
  SPEAKER_01: the barriers that used to sort of protect the West, if you will, right?
• 14:40
  SPEAKER_01: Distribution, discovery, capital, access to technology, access, all those things.
• 14:46
  SPEAKER_01: We're in a world in which anybody can access the capital of the tools of the distribution.
• 14:53
  SPEAKER_01: And so you can kind of reach anyone from anywhere.
• 14:57
  SPEAKER_01: And what has happened over time is particular in Korea and China,
• 15:01
  SPEAKER_01: mobile game developers learned in free to play,
• 15:05
  SPEAKER_01: great gameplay,
• 15:06
  SPEAKER_01: hybrid monetization,
• 15:08
  SPEAKER_01: great live Operations discipline,
• 15:11
  SPEAKER_01: ability to deliver consistent, compelling updates, great social systems.
• 15:18
  SPEAKER_01: And they learned over time starting in free-to-play mobile,
• 15:22
  SPEAKER_01: and then they brought that to other platforms.
• 15:25
  SPEAKER_01: And you're right, we are seeing a massive growth in Asia.
• 15:29
  SPEAKER_01: And when I was on stage in Seoul,
• 15:31
  SPEAKER_01: you're right,
• 15:31
  SPEAKER_01: we certainly were showcasing all the great games that were made
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  SPEAKER_01: by Korean developers, but it wasn't hard to find them, right?
• 15:38
  SPEAKER_01: It wasn't like we were pandering.
• 15:40
  SPEAKER_01: It's pretty extraordinary.
• 15:42
  SPEAKER_01: You know,
• 15:42
  SPEAKER_01: I think what Western studios really need to get back to is,
• 15:46
  SPEAKER_01: and I think where Western studios got into more trouble is the development cycles
• 15:52
  SPEAKER_01: as they got elongated,
• 15:54
  SPEAKER_01: that potential for dislocation with the player that we're talking about,
• 15:59
  SPEAKER_01: that grows with each advancing day.
• 16:02
  SPEAKER_01: So I'll give you a perfect example.
• 16:04
  SPEAKER_01: When I first got to EA,
• 16:05
  SPEAKER_01: as you referenced before,
• 16:07
  SPEAKER_01: I came in to run Star Wars The Old Republic,
• 16:10
  SPEAKER_01: which was an MMO which had gone very badly awry, and we were trying to fix it.
• 16:15
  SPEAKER_01: And the reason it got awry is that there was like a six year development cycle.
• 16:19
  SPEAKER_01: And when that game began six years prior,
• 16:22
  SPEAKER_01: Then under six years unfolded,
• 16:24
  SPEAKER_01: lots of things changed in the world,
• 16:27
  SPEAKER_01: including subscription LMOs where it no longer desired.
• 16:32
  SPEAKER_01: It was free to play at that time.
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  SPEAKER_01: And so you had to reimagine everything fundamentally.
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  SPEAKER_01: That's an obvious example,
• 16:39
  SPEAKER_01: but there are others where the longer it takes and the longer it takes for you
• 16:43
  SPEAKER_01: to have contact with customers, with players, the worse that dislocation gets.
• 16:49
  SPEAKER_01: And what all game teams need to do is compress the element cycles as much
• 16:54
  SPEAKER_01: as possible,
• 16:55
  SPEAKER_01: connect to players as early in the process as possible,
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  SPEAKER_01: And build in conjunction with that player,
• 17:03
  SPEAKER_01: with that player understanding as quickly as he can and do that in an organic way so
• 17:07
  SPEAKER_01: that when it releases,
• 17:08
  SPEAKER_01: it feels organically connected to that community and in fact was built as
• 17:12
  SPEAKER_01: a reflection of their passions and desires.
• 17:15
  SPEAKER_01: The counterfactual,
• 17:16
  SPEAKER_01: which is I go into a room for five years,
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  SPEAKER_01: I build this thing,
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  SPEAKER_01: And then, you know, ta-da, I make a cinematic and I expect to make a hit.
• 17:26
  SPEAKER_01: That is over.
• 17:28
  SPEAKER_01: It's just not going to happen anymore,
• 17:30
  SPEAKER_01: except for maybe a very tiny number of very highly anticipated titles.
• 17:34
  SPEAKER_01: So I do think that there needs to be a little bit of a rethink.
• 17:37
  SPEAKER_01: I think it's happening in our industry in the West in particular.
• 17:41
  SPEAKER_00: It's interesting,
• 17:41
  SPEAKER_00: you talked about,
• 17:42
  SPEAKER_00: well you said it earlier,
• 17:43
  SPEAKER_00: the games are getting cheaper, as in they're costing less to make.
• 17:46
  SPEAKER_00: Sumo, they said it when we spoke to them as well,
• 17:48
  SPEAKER_00: they said that they used to make $50 million games, they now make $15 million games.
• 17:51
  SPEAKER_00: And of course for them it's a lot of keeping the teams as small as you can for
• 17:55
  SPEAKER_00: as long as you can, and then maybe scaling up, but maybe internally, but maybe not.
• 18:00
  SPEAKER_00: Is that what you're seeing amongst people
• 18:01
  SPEAKER_01: that you're working with?
• 18:03
  SPEAKER_01: There is no question that there are more games being built and that the trend is
• 18:09
  SPEAKER_01: for them to be able to build more quickly.
• 18:12
  SPEAKER_00: Now, we're still relatively early,
• 18:14
  SPEAKER_01: and again,
• 18:14
  SPEAKER_01: building great games is hard,
• 18:17
  SPEAKER_01: but there's no question of mine that we're seeing smaller teams make bigger impacts.
• 18:23
  SPEAKER_01: And that will be the direction of travel.
• 18:27
  SPEAKER_01: And we're seeing more games on our platform.
• 18:29
  SPEAKER_01: We're seeing more games being distributed on our platform.
• 18:31
  SPEAKER_01: And you can just see,
• 18:32
  SPEAKER_01: I think the wait to get a game approved on the app store now is like seven months
• 18:36
  SPEAKER_01: or something.
• 18:36
  SPEAKER_01: There's been an actual explosion of mobile games just in particular being created.
• 18:41
  SPEAKER_01: Now, you could argue about the quality of those and we could talk about that.
• 18:46
  SPEAKER_01: There's no question that it is possible to do things more quickly
• 18:50
  SPEAKER_01: and more efficiently and with smaller teams because the nature of the tools
• 18:54
  SPEAKER_01: that we have at our disposal are changing.
• 18:56
  SPEAKER_01: And by the way,
• 18:57
  SPEAKER_01: anxiety about AI that exists in our community is largely,
• 19:02
  SPEAKER_01: if not entirely, focused on the generative side.
• 19:05
  SPEAKER_01: So with respect to assets and how those assets are created and who owns them.
• 19:10
  SPEAKER_01: So put that aside for a second.
• 19:12
  SPEAKER_01: Coding agents are a different thing.
• 19:14
  SPEAKER_01: Our industry,
• 19:15
  SPEAKER_01: developers are adopting coding agents massively and
• 19:18
  SPEAKER_01: with very little cognitive distance because it would be insane not to.
• 19:22
  SPEAKER_01: It's helpful, just as it is in any other kind of coding.
• 19:27
  SPEAKER_01: But in our world, that's just one slice of the development, but it's a meaningful slice.
• 19:33
  SPEAKER_01: So I do see that very clearly, our customers, and I do think it will continue.
• 19:40
  SPEAKER_01: But I do think we want to be careful to say
• 19:44
  SPEAKER_01: that great games Are still extraordinarily difficult to make.
• 19:51
  SPEAKER_01: So this obsession around one-shotting games,
• 19:53
  SPEAKER_01: you know,
• 19:54
  SPEAKER_01: if I had a dollar for every time I went on X and somebody said,
• 19:57
  SPEAKER_01: look at this, I one-shotted this with 3GS and look, The Game Business is over.
• 20:04
  SPEAKER_01: You know, people love to do that.
• 20:05
  SPEAKER_01: And there's nothing in the world I find more aggravating than that.
• 20:08
  SPEAKER_01: Because it denigrates,
• 20:10
  SPEAKER_01: and these are people who probably play lots of great video games,
• 20:13
  SPEAKER_01: who know that it's much more than that.
• 20:15
  SPEAKER_00: Yeah.
• 20:15
  SPEAKER_01: And so I would just distinguish those two things.
• 20:18
  SPEAKER_01: Tools make it possible to be more efficient, and as a consequence, there's more being made.
• 20:23
  SPEAKER_01: But that doesn't mean that each of
• 20:25
  SPEAKER_00: them is wonderful.
• 20:26
  SPEAKER_00: Well, my industry's different.
• 20:27
  SPEAKER_00: So the world I work in,
• 20:28
  SPEAKER_00: I don't make games,
• 20:29
  SPEAKER_00: I make And there are AI tools that allow me to,
• 20:34
  SPEAKER_00: not to do my writing for me, but to transcribe this interview.
• 20:38
  SPEAKER_00: Or, hey, it went through our video and decided these are good clips.
• 20:42
  SPEAKER_00: And none of it's better than if I did it myself.
• 20:44
  SPEAKER_00: Right.
• 20:45
  SPEAKER_00: The clips will be,
• 20:47
  SPEAKER_00: it's a rubbish version of what I would do,
• 20:48
  SPEAKER_00: but then I go in and fix it, and then it becomes a good version.
• 20:51
  SPEAKER_00: So none of it's better,
• 20:52
  SPEAKER_00: but is it quicker for me to have a rubbish version that I can fix than it is for me
• 20:55
  SPEAKER_00: to start from scratch?
• 20:56
  SPEAKER_00: It is quicker, and substantially so in some cases.
• 20:59
  SPEAKER_00: So I, and that's how I sort of Yes.
• 21:01
  SPEAKER_00: And then it comes down to what do you use it for?
• 21:03
  SPEAKER_00: Do you use it for so you can test more and do more iterations?
• 21:06
  SPEAKER_00: Or do you use it to get your stuff out quicker?
• 21:08
  SPEAKER_00: I think that depends on your game and your business.
• 21:10
  SPEAKER_01: I think that's fair.
• 21:11
  SPEAKER_01: I think that's right.
• 21:11
  SPEAKER_01: And one of the things you will have heard us do in launching UD7
• 21:16
  SPEAKER_01: in Sol was this decision to open up Unity to the command line interface
• 21:21
  SPEAKER_01: and open up our APIs and to give developers the optionality of controlling Unity
• 21:28
  SPEAKER_01: in partnership with a coding agent if that's what they would like to do.
• 21:34
  SPEAKER_01: And they can make that choice.
• 21:37
  SPEAKER_01: And part of the reason that we feel very uncomplicated about that is, one,
• 21:41
  SPEAKER_01: because we want to reflect what the state of the art is and how people are using
• 21:45
  SPEAKER_01: the product and want to use the product,
• 21:47
  SPEAKER_01: but also because there's so much more to making a game
• 21:51
  SPEAKER_01: than accelerating some code development.
• 21:54
  SPEAKER_01: And ultimately you're going to find yourself back on the platform because
• 21:57
  SPEAKER_01: to your point,
• 21:58
  SPEAKER_01: there's a combination of writing code and then there is very bespoke,
• 22:02
  SPEAKER_01: there's times where you need to touch the gameplay,
• 22:05
  SPEAKER_01: you need to touch the pixel and you need very fine control.
• 22:08
  SPEAKER_01: And that balance is a big part of creating great interactive entertainment.
• 22:14
  SPEAKER_01: And so for us, what's most important is to provide an authoring platform.
• 22:19
  SPEAKER_01: And then open it up to as many people as want it,
• 22:22
  SPEAKER_01: however they want to come in and kind of open that funnel up to the top and
• 22:25
  SPEAKER_01: then just try to provide all the services,
• 22:28
  SPEAKER_01: all the platform related services to help you create and build and distribute
• 22:35
  SPEAKER_01: and ultimately monetize those experiences.
• 22:38
  SPEAKER_01: That's sort of how we perceive what
• 22:40
  SPEAKER_00: we're trying to do.
• 22:41
  SPEAKER_00: You mentioned those social media videos of,
• 22:43
  SPEAKER_00: look, we've made a game, we put in a prompt, and we've created GTA.
• 22:46
  SPEAKER_00: That obviously brings back to the start of the year when Project Genie and Google
• 22:51
  SPEAKER_00: and how the markets reacted to it.
• 22:53
  SPEAKER_00: Were you surprised how the markets reacted to that reveal?
• 22:55
  SPEAKER_00: I was.
• 22:56
  SPEAKER_01: I was surprised, but...
• 22:59
  SPEAKER_01: I think it's important to understand how the markets function now.
• 23:02
  SPEAKER_01: Folks respond to means in our world.
• 23:05
  SPEAKER_01: And I think that quarter on our call,
• 23:08
  SPEAKER_01: our conference call with investors,
• 23:09
  SPEAKER_01: I literally said to one of the investors, like,
• 23:11
  SPEAKER_01: my advice to you would be to not buy and sell shares of stock based
• 23:15
  SPEAKER_01: on LinkedIn posts that you read.
• 23:17
  SPEAKER_01: But of course, nobody cares what I think.
• 23:19
  SPEAKER_01: They're going to keep doing that.
• 23:20
  SPEAKER_01: That's the world we live in, right?
• 23:22
  SPEAKER_01: And I think in fairness...
• 23:26
  SPEAKER_01: Creating a video game is a reasonably complex thing and there aren't a ton of people
• 23:31
  SPEAKER_01: in the world who understand what that process is like and what it requires
• 23:35
  SPEAKER_01: and how extraordinarily difficult it is to combine both the art and the science
• 23:42
  SPEAKER_01: to marry the technology and the artistry and the understanding of the player and
• 23:47
  SPEAKER_01: then all the infrastructure and software that has to surround it in order
• 23:51
  SPEAKER_01: to make it work seamlessly.
• 23:53
  SPEAKER_01: Almost nobody understands that.
• 23:55
  SPEAKER_01: And so the fact that folks would react at some level didn't surprise me.
• 23:59
  SPEAKER_01: But honestly, it's okay.
• 24:01
  SPEAKER_01: Because over time, you just build.
• 24:06
  SPEAKER_01: You don't pay attention.
• 24:09
  SPEAKER_01: Up or down.
• 24:10
  SPEAKER_01: When I started at the company,
• 24:13
  SPEAKER_01: the first talk I gave for all the folks when I first arrived,
• 24:16
  SPEAKER_01: I sent them You will have had the experience of doing the wrong thing and having
• 24:23
  SPEAKER_01: the stock go up in the past.
• 24:25
  SPEAKER_01: Because I could see that from the outside.
• 24:27
  SPEAKER_01: And you may have the experience now of doing the right thing and having the stock go down.
• 24:35
  SPEAKER_01: And that's fine.
• 24:37
  SPEAKER_01: What you have to do is ground yourself in doing the right thing.
• 24:41
  SPEAKER_01: And all the rest of it takes care of itself over some period of time.
• 24:47
  SPEAKER_01: Because the other stuff is noise.
• 24:49
  SPEAKER_01: And if you focus on delivering high quality product and listening and working
• 24:55
  SPEAKER_01: as hard as you absolutely can to deliver,
• 24:59
  SPEAKER_01: then the rest of it is a fad and it goes past.
• 25:02
  SPEAKER_01: And we've been doing this for a very long time and we expect to be doing it for
• 25:06
  SPEAKER_01: a very long
• 25:06
  SPEAKER_00: time from now.
• 25:08
  SPEAKER_00: I'll ask a couple more sort of AI questions because I'm interested because,
• 25:11
  SPEAKER_00: you know, you're working with developers in the coalface.
• 25:13
  SPEAKER_00: Is anything surprising about what they're asking for when it comes to those sort
• 25:16
  SPEAKER_00: of tools or what tools they're using?
• 25:18
  SPEAKER_01: The biggest discovery that I,
• 25:20
  SPEAKER_01: and maybe I shouldn't have anticipated it,
• 25:22
  SPEAKER_01: but I didn't fully,
• 25:24
  SPEAKER_01: although I think a lot of folks on our team did,
• 25:26
  SPEAKER_01: was that what happened is we opened up, we kind of made Unity headless, right?
• 25:32
  SPEAKER_01: We let folks
• 25:35
  SPEAKER_01: What
• 25:41
  SPEAKER_01: we realized is that that piece of the process could move so quickly
• 25:45
  SPEAKER_01: that we were the bottleneck in many cases.
• 25:47
  SPEAKER_01: It's like when you speed up one part of a process,
• 25:52
  SPEAKER_01: the other parts have to hit the same velocity, otherwise you get bottlenecks.
• 25:56
  SPEAKER_01: And what we realized is there are parts of unity.
• 25:59
  SPEAKER_01: That we're now being exposed as hopelessly slow and painful.
• 26:03
  SPEAKER_01: And so a lot of the work in UNI 7 around releasing core CLR,
• 26:10
  SPEAKER_01: around releasing a series of enhancements that would let you make changes
• 26:17
  SPEAKER_01: and see them live in real time in the game, in the runtime.
• 26:21
  SPEAKER_01: Those things were driven by this surprise of realizing,
• 26:25
  SPEAKER_01: wow, we have to do that because we have to move at the speed that AI moves.
• 26:31
  SPEAKER_01: Even though people are using swarm, you can never be the bottleneck.
• 26:36
  SPEAKER_00: It was kind of a fascinating lesson for us.
• 26:37
  SPEAKER_00: One of the things I'm picking up is that obviously AI leads to more.
• 26:41
  SPEAKER_00: Is more good?
• 26:43
  SPEAKER_00: I understand Unity might want more, but is it good for everyone?
• 26:47
  SPEAKER_01: Well, yes, so let's distinguish.
• 26:49
  SPEAKER_01: I think to your point,
• 26:50
  SPEAKER_01: you know,
• 26:50
  SPEAKER_01: more people making more games is probably,
• 26:53
  SPEAKER_01: you know, there's a dynamic here, which I'm not in control of the dynamic.
• 26:57
  SPEAKER_01: I just observe it, right?
• 26:58
  SPEAKER_01: Which is that one of the things that happens in our world is there's more of everything.
• 27:04
  SPEAKER_01: And when there's more of everything,
• 27:06
  SPEAKER_01: it becomes harder and harder to distinguish between the things that you like
• 27:12
  SPEAKER_01: and you want and the things that you don't want because just the noise gets heavier
• 27:16
  SPEAKER_01: in all directions.
• 27:17
  SPEAKER_01: To the extent that our business is about Without trying to help predict what
• 27:21
  SPEAKER_01: a player might want to play next,
• 27:23
  SPEAKER_01: which is effectively what our vector or AI prioritizing model does, more is good.
• 27:28
  SPEAKER_01: It is good for that business because we're helping people discover things and
• 27:32
  SPEAKER_01: the harder it is to discover it, the more useful that is.
• 27:35
  SPEAKER_01: And the more games that are on our platform,
• 27:37
  SPEAKER_01: the more people are using our platform is,
• 27:38
  SPEAKER_01: yeah, it's probably good for our platform.
• 27:40
  SPEAKER_01: But put that to one side because that's not the question you're asking.
• 27:43
  SPEAKER_01: And by the way, if it's good for us but bad for the industry, we're not interested in it.
• 27:48
  SPEAKER_01: Because this is what we do.
• 27:50
  SPEAKER_01: You know, we're game makers.
• 27:52
  SPEAKER_01: We want the industry to be happy and healthy.
• 27:54
  SPEAKER_01: We want players to be... Over the long term, it's important for us.
• 27:59
  SPEAKER_01: So what I'd say is, this happens in... Ilya, you made the point about in your world, in video.
• 28:05
  SPEAKER_01: So we used to only go to the multiplex to see a movie.
• 28:09
  SPEAKER_01: Now there is an almost limitless amount of short-form video in the world,
• 28:15
  SPEAKER_01: and medium-form video and long-form video,
• 28:17
  SPEAKER_01: and there's unlimited points of distribution,
• 28:20
  SPEAKER_01: and there are hundreds and hundreds of millions of people creating
• 28:25
  SPEAKER_01: that could never create before.
• 28:28
  SPEAKER_01: Their voices could not be heard,
• 28:30
  SPEAKER_01: the gatekeepers would not let them in,
• 28:31
  SPEAKER_01: they did not have access to the tools,
• 28:33
  SPEAKER_01: they did not have access to the means of distribution, they couldn't.
• 28:38
  SPEAKER_01: And so do we feel better about that now than we did?
• 28:43
  SPEAKER_01: You tell me.
• 28:43
  SPEAKER_01: I think the answer is it's come with some positives and some negatives.
• 28:48
  SPEAKER_01: But overall, democratizing creation is not bad.
• 28:55
  SPEAKER_01: But it can have some negative attributes.
• 28:59
  SPEAKER_01: And that's sort of where I think we're gonna end up in games.
• 29:02
  SPEAKER_00: It's one thing to note.
• 29:03
  SPEAKER_00: On the business journey,
• 29:04
  SPEAKER_00: talking about from a business point of view, is it harder for companies?
• 29:07
  SPEAKER_00: Does that mean they have to compete harder?
• 29:09
  SPEAKER_00: Yes.
• 29:09
  SPEAKER_00: Is that always a bad thing?
• 29:10
  SPEAKER_00: No.
• 29:11
  SPEAKER_00: I think from an artistic point of view, is it great that more people can create interactive art?
• 29:16
  SPEAKER_00: You can't say it's back, can you?
• 29:17
  SPEAKER_01: I feel really, honestly, I feel very uncomplicated about that.
• 29:21
  SPEAKER_01: And part of the reason why I feel complicated about it is,
• 29:24
  SPEAKER_01: as we said before,
• 29:25
  SPEAKER_01: is the level of difficulty and the extraordinary human creative
• 29:31
  SPEAKER_01: and scientific endeavor that is required to make a great piece
• 29:36
  SPEAKER_01: of interactive entertainment.
• 29:38
  SPEAKER_01: That bar is so high that bringing more people to the starting line
• 29:43
  SPEAKER_01: And letting them get into that is great.
• 29:45
  SPEAKER_01: And some of those people are going to make it through and many of them won't.
• 29:49
  SPEAKER_01: There'll be new forms of entertainment.
• 29:50
  SPEAKER_01: There'll be shorter form.
• 29:51
  SPEAKER_01: They'll be able to create,
• 29:53
  SPEAKER_01: just as we're able to create linear video now,
• 29:56
  SPEAKER_01: everyone who creates linear video is going to be creating some form
• 30:00
  SPEAKER_01: of more interactive entertainment as the tools get easier and easier to use.
• 30:04
  SPEAKER_01: That doesn't mean they're going to become professional game developers.
• 30:08
  SPEAKER_01: And those two These things are different.
• 30:10
  SPEAKER_00: Creating games might be easier, but creating hits, I don't necessarily think.
• 30:13
  SPEAKER_01: I don't think it's going to get, I don't think it's going to get.
• 30:15
  SPEAKER_01: And by the way,
• 30:15
  SPEAKER_01: it's because the models are trained on the average
• 30:19
  SPEAKER_01: of everything else that's been created already.
• 30:22
  SPEAKER_01: Yeah.
• 30:23
  SPEAKER_01: That is not how you create great art.
• 30:25
  SPEAKER_01: And that's why we've not seen hits.
• 30:29
  SPEAKER_01: Oh yes.
• 30:29
  SPEAKER_01: It's just not a thing.
• 30:31
  SPEAKER_01: Like the individual human spark of creativity is the most important thing in this environment.
• 30:36
  SPEAKER_00: And there's an element,
• 30:36
  SPEAKER_00: as Sean Layden used to say,
• 30:37
  SPEAKER_00: that AI looks backwards and you sort of need to look forward to it.
• 30:40
  SPEAKER_00: It does.
• 30:41
  SPEAKER_00: I think that's very right.
• 30:42
  SPEAKER_00: Let's talk about platforms for a moment because one of the topics of
• 30:45
  SPEAKER_00: the summer has been the console market.
• 30:47
  SPEAKER_00: It certainly seems challenged right now with the component crisis and the cost of everything.
• 30:51
  SPEAKER_00: As a technology provider, or just as an industry person, how are you feeling about it all?
• 30:56
  SPEAKER_00: Are you concerned?
• 30:58
  SPEAKER_01: You know, I would separate out console hardware From console playing in a way.
• 31:06
  SPEAKER_01: So what I mean is I think it's been a difficult time for console hardware,
• 31:10
  SPEAKER_01: which is under genuine cost pressure.
• 31:13
  SPEAKER_01: And we've seen Sony and Microsoft and Nintendo and everyone's raising prices
• 31:18
  SPEAKER_01: because memory is getting more expensive and that's just kind
• 31:20
  SPEAKER_01: of this downstream impact of the explosion of AI and it's unprecedented.
• 31:25
  SPEAKER_01: And it's wacky,
• 31:26
  SPEAKER_01: like the idea that things get more expensive in that way is kind of the upside down
• 31:29
  SPEAKER_01: and how it usually works.
• 31:31
  SPEAKER_01: And so you got, I mean, that's a genuine thing that's happening.
• 31:36
  SPEAKER_01: I do think that doesn't mean that great console entertainment isn't going
• 31:40
  SPEAKER_01: to be consumed in massive quantities.
• 31:43
  SPEAKER_01: And I think we'll see that with GTA.
• 31:45
  SPEAKER_01: And so I think about the difficulties in the console market,
• 31:50
  SPEAKER_01: the cost pressures that are exacerbating as being temporary.
• 31:56
  SPEAKER_01: And I do think there is clearly from a demographic perspective,
• 32:02
  SPEAKER_01: The console business is a little bit challenged as the core consumer ages.
• 32:09
  SPEAKER_01: And I'm not sure that the industry,
• 32:11
  SPEAKER_01: maybe cost is part of that and the price of the entry level is part of that,
• 32:14
  SPEAKER_01: but I'm not sure that the console business is replacing older players with
• 32:19
  SPEAKER_01: as many younger players as it used to.
• 32:21
  SPEAKER_01: Yeah.
• 32:24
  SPEAKER_01: Again, I see a lot of this as being a downstream impact of making hit entertainment.
• 32:30
  SPEAKER_01: It was not very long ago that every teenager was playing Fortnite on consoles,
• 32:37
  SPEAKER_01: many of them, so much so that it was thought to be like a A problem, you know?
• 32:44
  SPEAKER_01: So the platform is there and is vibrant.
• 32:47
  SPEAKER_01: I think we will get more hit entertainment for that platform.
• 32:51
  SPEAKER_01: Ultimately,
• 32:52
  SPEAKER_01: I think costs will come down and the industry will make games
• 32:55
  SPEAKER_01: that will Draw younger
• 32:57
  SPEAKER_00: consumers over time.
• 32:58
  SPEAKER_00: Also, I think the important thing that we can't predict is it all comes down to innovation.
• 33:01
  SPEAKER_00: And you talk about the fact, are we upgrading as many kids from Roblox to consoles?
• 33:06
  SPEAKER_00: Maybe not, but then that's an opportunity from a console perspective.
• 33:10
  SPEAKER_00: And equally, you talk about losing older players.
• 33:13
  SPEAKER_00: Why is that a thing?
• 33:14
  SPEAKER_00: Why do we accept that as something that happens?
• 33:16
  SPEAKER_00: Oh, when you get older, you stop playing games.
• 33:18
  SPEAKER_00: I know it's hard.
• 33:19
  SPEAKER_00: I'm 40.
• 33:19
  SPEAKER_00: I've got two young kids.
• 33:20
  SPEAKER_00: I know.
• 33:21
  SPEAKER_00: Yeah.
• 33:21
  SPEAKER_00: And then Nintendo created a form factor that made it easy for me to play.
• 33:24
  SPEAKER_00: And it's like there is opportunity as well as those challenges.
• 33:28
  SPEAKER_00: Yes.
• 33:29
  SPEAKER_01: I completely agree with that.
• 33:30
  SPEAKER_01: Look, the Switch 2 didn't launch that long ago.
• 33:32
  SPEAKER_01: It was the best launch of a game platform in history, I think.
• 33:36
  SPEAKER_00: Yeah, it was.
• 33:36
  SPEAKER_00: Yeah.
• 33:37
  SPEAKER_01: When was that?
• 33:38
  SPEAKER_00: A year ago, yeah.
• 33:38
  SPEAKER_01: Yeah, it was a year ago.
• 33:40
  SPEAKER_01: And suddenly it's like, oh, my God.
• 33:42
  SPEAKER_01: Platforms are dead.
• 33:43
  SPEAKER_01: Really?
• 33:44
  SPEAKER_01: Yeah.
• 33:44
  SPEAKER_01: So it's like, let's take a breath for a second.
• 33:47
  SPEAKER_01: The great games draw players to platforms.
• 33:53
  SPEAKER_01: It has always been thus.
• 33:55
  SPEAKER_01: The platform is not interesting without hit entertainment on the platform.
• 33:59
  SPEAKER_01: As we build hit entertainment, it will draw folks back to the platform.
• 34:04
  SPEAKER_01: It's what this is all about.
• 34:06
  SPEAKER_01: It just comes down to making great games.
• 34:09
  SPEAKER_01: And because I have this conversation a lot, great games are going to be built.
• 34:13
  SPEAKER_01: By the way,
• 34:14
  SPEAKER_01: For our industry,
• 34:15
  SPEAKER_01: there will be better,
• 34:17
  SPEAKER_01: more engaging games built over the next 10 years than were ever built over
• 34:21
  SPEAKER_01: the prior 10 years.
• 34:22
  SPEAKER_01: The tools that we have,
• 34:24
  SPEAKER_01: we're just beginning to scratch the surface and the intensity of Engage
• 34:29
  SPEAKER_01: that we're going to be able to achieve.
• 34:31
  SPEAKER_01: I think it's crazy to think that the best years of this business are not in front of it.
• 34:36
  SPEAKER_00: I'm loving this conversation.
• 34:37
  SPEAKER_00: I'm conscious of the time.
• 34:39
  SPEAKER_00: I've got a bunch of other things I want to talk about.
• 34:41
  SPEAKER_00: Let's talk about Netflix, because obviously you've got this new partnership with Netflix.
• 34:45
  SPEAKER_00: I've spoken to them quite a bit.
• 34:46
  SPEAKER_00: Things change there all the time.
• 34:48
  SPEAKER_00: They do.
• 34:48
  SPEAKER_00: There's a lot going on.
• 34:49
  SPEAKER_00: It's a curated platform rather than How did the partnership come about to begin with?
• 34:54
  SPEAKER_00: And then what do you think of the opportunity?
• 34:56
  SPEAKER_01: Yeah, so we have been a partner of Netflix for some time.
• 35:01
  SPEAKER_01: So I would say it was kind of an extension of that.
• 35:04
  SPEAKER_01: I mean, a good chunk of the top games that they have on Netflix,
• 35:08
  SPEAKER_01: Squid Game Unleashed, Black Mirror, Thronglet, Unhinged, they're all Unity games.
• 35:13
  SPEAKER_01: But what's exciting about that for us goes back to
• 35:16
  SPEAKER_01: the conversation you were just having about platforms.
• 35:19
  SPEAKER_01: There will be platforms that emerge that we maybe don't currently think of as platforms.
• 35:24
  SPEAKER_01: That's the other thing that happens around innovation.
• 35:26
  SPEAKER_01: It's why we're so excited to be partnering with that because
• 35:29
  SPEAKER_01: if we can help create another math market platform that requires no registration
• 35:36
  SPEAKER_01: and there's no friction and you're sitting in your living room already
• 35:39
  SPEAKER_01: and there's already hundreds of millions of people on it and we can bring gaming to
• 35:42
  SPEAKER_01: that platform, that's great for our industry.
• 35:45
  SPEAKER_01: And so I think about Netflix as a perfect example of the novelty and innovation
• 35:51
  SPEAKER_01: that can be brought in ways that you might not necessarily think of at first.
• 35:57
  SPEAKER_01: And they're going to get it right.
• 35:58
  SPEAKER_01: And there'll be other new platforms.
• 35:59
  SPEAKER_01: And our whole reason for being is just to propagate platforms with
• 36:06
  SPEAKER_01: as much great entertainment as we can and trying to provide as many places
• 36:10
  SPEAKER_01: as possible for you developers to reach players.
• 36:14
  SPEAKER_01: And that's principally what we spend most of our time thinking about,
• 36:17
  SPEAKER_01: is like, how can we maximize opportunities for this community?
• 36:20
  SPEAKER_01: And so any new platform for us is a good thing.
• 36:23
  SPEAKER_00: I don't know if I'm optimistic is the right word,
• 36:25
  SPEAKER_00: but I'm certainly like the fact that Netflix is trying to bring games
• 36:28
  SPEAKER_00: to different people.
• 36:28
  SPEAKER_00: I agree.
• 36:29
  SPEAKER_00: That's the thing, right?
• 36:30
  SPEAKER_00: It's not just trying to compete with what's in the business already.
• 36:32
  SPEAKER_00: It's trying to expand it.
• 36:34
  SPEAKER_00: It's trying to help us reach new people.
• 36:36
  SPEAKER_00: You know, Unhinged is a great example of that.
• 36:38
  SPEAKER_01: I totally agree.
• 36:39
  SPEAKER_01: And we saw that, remember, with casual gaming.
• 36:41
  SPEAKER_01: It brought in a whole, you know, a female audience that hadn't previously existed.
• 36:46
  SPEAKER_01: And so these new devices,
• 36:48
  SPEAKER_01: new form factors,
• 36:49
  SPEAKER_01: new kinds of entertainment,
• 36:50
  SPEAKER_01: new platforms, new games, there are so many vectors for exciting
• 36:56
  SPEAKER_00: new experiences.
• 36:57
  SPEAKER_00: The other one is,
• 36:58
  SPEAKER_00: this is,
• 36:58
  SPEAKER_00: I have to say,
• 36:59
  SPEAKER_00: I felt a war is over moment when you were on stage with Tim with the Epic
• 37:03
  SPEAKER_00: and Unity partnership.
• 37:05
  SPEAKER_00: It was fun.
• 37:06
  SPEAKER_01: I enjoyed it, honestly.
• 37:08
  SPEAKER_01: I really enjoyed it.
• 37:09
  SPEAKER_00: Fortnite's another platform, right?
• 37:11
  SPEAKER_00: And I guess that's part of that wider thing.
• 37:13
  SPEAKER_00: But it felt like a moment to me.
• 37:15
  SPEAKER_00: I love it when I see companies come together for the greater good, so to speak.
• 37:20
  SPEAKER_01: Yeah, it was a neat experience.
• 37:21
  SPEAKER_01: And I have to say,
• 37:23
  SPEAKER_01: there aren't a lot of people in the world for whom I have more respect than
• 37:28
  SPEAKER_01: for Tim Sweeney.
• 37:29
  SPEAKER_01: Honestly,
• 37:30
  SPEAKER_01: when I first met him,
• 37:31
  SPEAKER_01: it wasn't that long ago, I really, you know, I felt a little overawed about it.
• 37:37
  SPEAKER_01: I really did.
• 37:39
  SPEAKER_01: You know, I think he's a unique genius and I love the way he thinks.
• 37:42
  SPEAKER_00: I don't always agree with all his conclusions.
• 37:44
  SPEAKER_00: None of us did.
• 37:45
  SPEAKER_01: I wouldn't necessarily make all the same choices.
• 37:46
  SPEAKER_01: But the kind of clarity and purity of his thinking is just very impressive.
• 37:50
  SPEAKER_01: And I never felt that we were in competition with them.
• 37:54
  SPEAKER_01: And it's funny when you think about it.
• 37:57
  SPEAKER_01: Over the years before I got to Unity,
• 37:59
  SPEAKER_01: There was this obsession with competing with Epic and I didn't understand it.
• 38:06
  SPEAKER_01: Ultimately we're trying to achieve something which is
• 38:08
  SPEAKER_01: to bring extraordinarily high fidelity experiences as many places as possible.
• 38:12
  SPEAKER_01: We're just up to a different And they're building this platform, to your point.
• 38:16
  SPEAKER_01: And if Unity developers can get their games into that platform, then I'm good with it.
• 38:21
  SPEAKER_01: And by the way, that was literally a half hour phone call between Tim and I on the weekend.
• 38:27
  SPEAKER_01: There was no contractors, none of that.
• 38:29
  SPEAKER_01: So I was like, we should do this.
• 38:29
  SPEAKER_01: Yeah, we absolutely should.
• 38:30
  SPEAKER_01: Great.
• 38:31
  SPEAKER_01: And I was like, hey, we have a big event in Barcelona.
• 38:33
  SPEAKER_01: Could you come?
• 38:33
  SPEAKER_01: And he looks at his calendar.
• 38:35
  SPEAKER_01: He's like, yeah, I think I can make it.
• 38:36
  SPEAKER_01: So it was like that.
• 38:41
  SPEAKER_01: I love that.
• 38:42
  SPEAKER_01: I loved it as much as you did.
• 38:43
  SPEAKER_01: I mean, it was exciting.
• 38:45
  SPEAKER_01: It was exciting for us.
• 38:47
  SPEAKER_00: I'm really wary of the time,
• 38:48
  SPEAKER_00: and I haven't touched upon your ad side of things,
• 38:50
  SPEAKER_00: but I'm interested because,
• 38:51
  SPEAKER_00: you know, it seems to be a lot of your focus is on the ad side of things.
• 38:54
  SPEAKER_00: Is that fair?
• 38:55
  SPEAKER_00: Am I right?
• 38:57
  SPEAKER_00: Um, I would say this.
• 39:00
  SPEAKER_01: What we focus on is the author and platform.
• 39:03
  SPEAKER_01: And at the business level, the strategy is build the best possible platform we can.
• 39:10
  SPEAKER_01: Show the largest number of creators we can onto that platform,
• 39:15
  SPEAKER_01: and then provide them opportunities to find an audience and make money
• 39:20
  SPEAKER_01: with their creations.
• 39:22
  SPEAKER_01: And advertising is a primary way that folks can find new audiences.
• 39:29
  SPEAKER_01: And so that's a big part of the platform.
• 39:31
  SPEAKER_01: But there are lots of other parts of the platform.
• 39:33
  SPEAKER_01: You know, we build commerce solutions natively into Unity 7.
• 39:37
  SPEAKER_01: And we have a whole host of live operations,
• 39:41
  SPEAKER_01: tools and features built directly into Unity to help folks create new games.
• 39:45
  SPEAKER_01: And so we don't think about the business.
• 39:50
  SPEAKER_01: I know we, as a company, we report, we've got these two revenue streams, the software.
• 39:54
  SPEAKER_01: And it's not how we conceptualize what we're doing.
• 39:58
  SPEAKER_01: We conceptualize what we're doing as a platform.
• 40:00
  SPEAKER_01: And then think about monetization of the platform.
• 40:02
  SPEAKER_01: Monetization comes in many forms.
• 40:04
  SPEAKER_01: And it's important.
• 40:06
  SPEAKER_01: Because we're not building an ad network.
• 40:11
  SPEAKER_01: We're not ad network people.
• 40:13
  SPEAKER_01: We're games people.
• 40:14
  SPEAKER_01: And so what we want to try to do is take the fact that our platform is being used
• 40:19
  SPEAKER_01: to create the game and is connected to the player through our runtime.
• 40:23
  SPEAKER_01: Three billion people a month are playing and made with Unity game every month.
• 40:28
  SPEAKER_01: Can we use what we understand about those players to help creators build better entertainment?
• 40:35
  SPEAKER_01: More engaging, more personalized entertainment.
• 40:38
  SPEAKER_01: And can we help them find audiences?
• 40:40
  SPEAKER_00: If we can do those things, we feel like we've helped.
• 40:44
  SPEAKER_00: And so that's kind of how we think about it.
• 40:46
  SPEAKER_00: Obviously, in-game advertising, it's very much around mobile.
• 40:49
  SPEAKER_00: There's a lot of talk now about PC and console.
• 40:51
  SPEAKER_00: Matthew Ball's talked about it.
• 40:52
  SPEAKER_00: EA's pushing into it again.
• 40:54
  SPEAKER_00: Yeah.
• 40:54
  SPEAKER_00: Do you see it as a... something that...
• 40:57
  SPEAKER_00: I mean, I know I'm talking to someone that might benefit if it does,
• 40:59
  SPEAKER_00: but do you see it as a... Yeah, well, yeah.
• 41:01
  SPEAKER_01: So here's what I'd say.
• 41:03
  SPEAKER_01: I think that...
• 41:05
  SPEAKER_01: This is a brilliant statement of the obvious.
• 41:07
  SPEAKER_01: Gaming aggregates enormous audiences of consumers.
• 41:12
  SPEAKER_01: And the way real-time aggregation of lots of folks doing one thing in one place,
• 41:19
  SPEAKER_01: in one time,
• 41:20
  SPEAKER_01: in one way,
• 41:21
  SPEAKER_01: typically,
• 41:22
  SPEAKER_01: the way you build a business around that,
• 41:24
  SPEAKER_01: historically, the most effective way is by showing them advertisements.
• 41:27
  SPEAKER_01: You know, the internet, television.
• 41:31
  SPEAKER_01: So the intuition about that doesn't surprise me at all, to your point.
• 41:36
  SPEAKER_01: And we're in the advertising business, so I'm very supportive of that intuition.
• 41:40
  SPEAKER_01: Of course,
• 41:41
  SPEAKER_01: it has to be done the right way so as not to cheapen or disturb the experience to
• 41:46
  SPEAKER_01: the extent possible, but it doesn't surprise me.
• 41:49
  SPEAKER_01: I also think there is maybe a less discussed point,
• 41:53
  SPEAKER_01: which is critical,
• 41:53
  SPEAKER_01: which is that it's less about putting ads inside a PC game,
• 41:58
  SPEAKER_01: you know, In a way that breaks the fiction or other things.
• 42:01
  SPEAKER_01: It's more about audience of gamers and can you reach them?
• 42:09
  SPEAKER_01: You come to know them in the game, but can you help advertisers reach them elsewhere?
• 42:16
  SPEAKER_01: Connected television, mobile phones, other things like that.
• 42:21
  SPEAKER_01: It doesn't have to be directly through the channel of games.
• 42:27
  SPEAKER_01: And that's where the way we conceptualize this market, again,
• 42:30
  SPEAKER_01: so you've got three billion people playing maybe with the new games,
• 42:33
  SPEAKER_01: some of them are on PCs and some of them are on consoles and many of them are
• 42:36
  SPEAKER_01: in mobile phones,
• 42:38
  SPEAKER_01: most of them, and they're all over the world, they're in different places.
• 42:41
  SPEAKER_01: Okay, how can you package that audience for advertisers who can reach them,
• 42:48
  SPEAKER_01: who are interested in reaching them,
• 42:50
  SPEAKER_01: and you've derived a meaningful understanding of who they are based on their
• 42:56
  SPEAKER_01: Existing inside your interactive entertainment.
• 42:59
  SPEAKER_01: That is also a really viable way of thinking about this,
• 43:04
  SPEAKER_01: in addition to, well,
• 43:05
  SPEAKER_01: maybe I can find some interesting places to put advertising in those games,
• 43:10
  SPEAKER_00: if that makes sense.
• 43:12
  SPEAKER_00: It does.
• 43:13
  SPEAKER_00: I would ask a follow-up, but we're running out of time.
• 43:14
  SPEAKER_00: And I'll end on my final question, which is this.
• 43:17
  SPEAKER_00: Where would you like to see Unity in five years?
• 43:21
  SPEAKER_00: You know...
• 43:23
  SPEAKER_01: As I said, we have a really simple goal.
• 43:27
  SPEAKER_01: We just want to be the place where as many people as possible come
• 43:33
  SPEAKER_01: to build interactive entertainment.
• 43:35
  SPEAKER_01: We love this.
• 43:36
  SPEAKER_01: We love doing what we're doing.
• 43:38
  SPEAKER_01: It's not just like another thing.
• 43:40
  SPEAKER_01: It's just not another piece of technology to us.
• 43:42
  SPEAKER_01: We're passionate about games and interactive entertainment.
• 43:46
  SPEAKER_01: I want, in five years from now,
• 43:48
  SPEAKER_01: I would like everybody who's creating interactive entertainment to be
• 43:51
  SPEAKER_01: on our platform where we can help them make great things.
• 43:54
  SPEAKER_01: And that's kind of our symbol goal.
• 43:57
  SPEAKER_01: Thank you, Matthew.
• 43:58
  SPEAKER_01: It's a pleasure to have you on.
• 43:59
  SPEAKER_00: It's my pleasure.
• 44:00
  SPEAKER_00: Thank you so much for having me.
• 44:02
  SPEAKER_00: That's all we have time for today.
• 44:03
  SPEAKER_00: We'll be back,
• 44:04
  SPEAKER_00: of course,
• 44:04
  SPEAKER_00: with more news analysis, interviews and insight in the days and weeks ahead.
• 44:08
  SPEAKER_00: To make sure you don't miss an episode,
• 44:09
  SPEAKER_00: head to thegamebusiness.com,
• 44:10
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• 44:14
  SPEAKER_00: But that's it from us today.
• 44:15
  SPEAKER_00: Until next time, thank you for tuning in.