Mar 16, 2020 · 45m · a16z
How Gaming is Changing the Media Landscape
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this a16z Summit fireside chat, Unity Technologies CEO John Riccitiello and Andreessen Horowitz General Partner Andrew Chen explore how real-time 3D technology, multi-platform connectivity, and free-to-play business models are expanding gaming beyond traditional media and into non-gaming industries.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 4.2 Guest teaching 5.9 Guest disagreement 1.7 The host pushing back 1.4
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:00 Rejection of Traditional Sports Analogy
John explicitly calls the comparison between esports leagues and traditional sports leagues a 'tortured' metaphor, pointing out that single corporations own 100% of video game IP.
Hardest push from the host ▶ 29:30 Challenging Storefront Guarantee SustainabilityAndrew directly challenges John on storefront wars, asking whether massive nine-figure minimum guarantees like Epic's Borderlands deal are sustainable long-term or just temporary bootstrapping.
Biggest teaching moment ▶ 33:45 Technical Realities of Game Streaming vs NetflixJohn breaks down why cloud gaming cannot rely on standard streaming codecs, explaining the hard 30-millisecond latency threshold required for real-time interactivity.
The host holds their own ▶ 27:35 Identifying PUBG Developer BlueholeAndrew demonstrates sharp venture domain knowledge by jumping in with 'Bluehole' when John mentions PUBG's creator, earning complimenting recognition from John.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Event Title and Legal Disclosures | 4 | 6 | 2 | 1 | Andrew opens by citing specific industry revenue numbers ($148B) and player counts. John gently corrects Andrew's player figure from 2.4 billion to over 3 billion by pointing out excluded Asian markets. | |
| Understanding Unity Engine & Development Platform | 2 | 5 | 1 | 1 | Andrew prompts John to define Unity's engine architecture. John educates the audience on how game engines eliminate redundant engine coding and provide cross-platform editor tools. | |
| Unity Real-Time Showcase Reel | 3 | 5 | 1 | 1 | Andrew mentions pre-show discussions about photorealism, leading John to recount how Car and Driver readers could not distinguish a Unity-rendered BMW from a real photograph. | |
| The Shift to Cross-Platform & Cloud Gaming | 4 | 6 | 2 | 1 | Andrew notes cross-platform pitch trends at a16z. John corrects Andrew's reference to Call of Duty by specifying it applies to the mobile version, before explaining cross-play technical constraints. | |
| Games as a Service and Media Evolution | 4 | 5 | 1 | 1 | Andrew discusses the shift to Games as a Service, citing long-running titles like League of Legends. John reframes this transition by drawing parallels to physical music vinyl and serialized TV. | |
| Multiplayer Social Networks & Esports Economics | 5 | 7 | 3 | 2 | John rejects the popular sports league analogy for esports as a 'tortured' comparison, detailing how game publishers retain 100% IP control. Andrew contributes relevant context regarding streaming deals like Ninja's Mixer contract. | |
| Global Gaming Markets and Asian Innovation | 6 | 6 | 1 | 1 | Andrew demonstrates strong domain expertise by instantly identifying Bluehole when John references PUBG's developer. John provides a detailed history of how piracy forced Asian markets into early digital innovation. | |
| Digital Storefront Wars and Distribution | 6 | 6 | 2 | 3 | Andrew presses John on whether Epic's $100M exclusive store guarantees are a permanent structural shift or a temporary blip. John reframes storefront distribution dynamics against cross-platform play. | |
| Cloud Gaming, Technical Realities, and Digital Lives | 5 | 8 | 3 | 2 | John schools the audience on network latency physics, contrasting pre-buffered video codecs like Netflix with interactive gaming's 30-millisecond latency limit. | |
| Unity Beyond Games: Industrial Applications & AI | 3 | 5 | 1 | 1 | Andrew asks about non-gaming uses of Unity, prompting John to explain real-time industrial applications like AR construction inspections with Unity Reflect and AI asset generation. |
Statements from this episode (25)
Chen: Gaming generates $148 billion annually, surpassing music and box office
“As David mentioned, it generates a hundred and forty eight billion dollars of revenue every year. It's bigger than music. It's bigger than the box office.”
John Riccitiello: Global video game players easily exceed three billion
“It's actually a lot larger that some of that excludes a big chunk of China and India and a couple of the markets. Easily north of three billion.”
John Riccitiello: Global gamers outnumber regular TV watchers and music listeners
“There are more players in the world than there are TV watchers or music, music listeners on a regular basis.”
John Riccitiello: Gaming revenue now exceeds TV and music combined
“At least when I got in the industry, it was much smaller than either music or TV, and now it's larger than the combination of the two.”
John Riccitiello: Real-time gaming tech is the future of film production
“It's the future for how films are going to be made. It's the future for so many other industries.”
Riccitiello: Car and Driver couldn't distinguish Unity-rendered BMWs from real cars
“BMW sent that on to Car and Driver and asked their writers and their readers to try to figure out which was the real car and which was the drawn car, the animated car, the one created in Unity, and they couldn't tell. By the way, no one can.”
Riccitiello: Real-time CGI will seamlessly blend synthetic actors and real elements
“And so we're reaching a new place in the world today where, you know, we're going to Conjure up actors from 50 years ago, or ones that never existed, or anything that is real or non-real and mix it together in ways that defy imagination.”
Riccitiello: Unity-built software reaches over 3 billion monthly downloads
“And today, twenty million is just about three to 3.1 billion every, you know, downloads per month in content building Unity.”
Riccitiello: Call of Duty, Pokémon GO, and Honor of Kings use Unity
“At any given point in time, using mobile as an example, it's not just the top 100 we've cracked, but, you know, the fastest growing game in the world today, Call of Duty, or products like you know, Mario Kart Tour, Pokemon Go, Honor of Kings, the biggest game …”
Riccitiello: Unity powers over half of games and two-thirds of AR/VR
“Five years ago, 80% plus of the games that were built were built using tools created by the publisher. That's not true any longer. Unity by itself has got over half of all games, two-thirds of all AR, VR is built in Unity and so the self-made tools from the pu…”
Riccitiello: Mobile gaming reaches over 2B users vs. millions on console
“At best, there's only a couple hundred million people in the world that will touch a console on a given generation. But mobile is well north of two billion.”
Riccitiello: Cross-platform gaming connects high spenders with massive scale
“And when you combine those audiences, you get the people that pay the most to participate together with the largest possible audience.”
Riccitiello: Gaming industry is near the total end of physical media
“In the game industry we're not quite at the point where we've left behind all physical media, but we're close. And I can't talk about, you know, hardware launches that are coming next year that we are preparing in engineering and coming the year after that, bu…”
Riccitiello: Gaming content is YouTube's single largest category
“I believe the single largest category on YouTube is watching people play video games.”
Riccitiello: Video game streaming will rival television in audience size
“It is a massive medium and it's a medium that Is an in and of itself in time will rival television, which is completely crazy from any historical perspective.”
Riccitiello: Esports economics differ from traditional sports because publishers own the IP
“Ultimately the economics of e-sports is different because it's not an aggregation of teams that make the league. It's the league that owns the teams. Completely different. And in this case, the league is Activision, Electronic Arts, Riot, Take Two, Bethesda, a…”
Riccitiello: Nexon leads gaming industry in managing player lifetime value
“Nexon, the company you mentioned, probably does the best job of husbanding the value of players looking at the long-term lifetime value of an individual player. They're probably the premier company at managing that particular aspect.”
Riccitiello: Tencent's gaming and social network hybrid is the West's future
“Tencent created, I think, some weird admixture of If Netflix was a gaming platform and you were to marry it to a social network, then that's what you have in China. And that may be the future in some significant way in the West.”
Riccitiello: Game distribution will move away from captive stores like Steam
“The app store model where you pay to download something runs directly into conflict with the notion we talked about earlier, which is those multi-platform games. So the, You know, the idea that a game would be everywhere as opposed to captive on an individual …”
Riccitiello: Gaming cannot rely exclusively on streaming due to latency constraints
“The gaming industry can't do Streaming exclusively as easily as they can in the movie industry or the music industry because you can't compress it to the same degree and because latency is a controlling factor.”
Chen: Cloud gaming success will unlock entirely new game genres in 10 years
“I think we will sit back, you know, 10 years from now, and if the whole cloud gaming thing works, it'll be sort of this, Whole new genres that are unlocked.”
Riccitiello: Steven Spielberg's Ready Player One used Unity for pre-visualization
“Things like Ready Player One, the film, I can talk about if it's a long discussion, it was produced in Unity, the film by Steven Spielberg, or at least PreViz was done in Unity.”
Riccitiello: Unity tracks 2.0 to 2.5 billion monthly users
“So, I mean, just in Unity alone, we track about two to two and a half billion users per month.”