The Exchanges

Q mean, it's a chat app. How the heck did they become successful in being, you know, the Tencent we know today, the most powerful video game distribution on the planet? Whereas you look at, like, Facebook has made 11 different runs at gaming, And is not Steam, is not Tencent. Why does sometimes a company have the right to leverage that relationship to be a publisher and other times not?

A I would rephrase it, right? Which is, my opinion is, is that why QQ was successful was that they didn't just decide that they're going to be a platform-based publisher. They embraced being a platform-based publisher. They went out and did deals. They own 49% of Epic. They owned 51% of Riot, now a hundred percent of Riot. They were one of the financiers of resort in the, in the games business for AAA titles. They aggregated products. They did, they aggregated third-party product from as a pathway into China because you needed a local partner because of government regulation in order to publish in China, and they just ran with that, right? They just embraced that, and instead of Facebook or some of these other American platforms that have treated games as kind of a bad smell over in the corner that they weren't too crazy about. Like, you know, okay, yeah, the Zynga thing they flirted with briefly, but ultimately that didn't go that well, and they decided now we're just going to become, you know, a customer acquisition vehicle for the games industry, and frankly, it's been a very lucrative piece of their business. But they really embraced it, Tencent, and, and invested deeply in it. And I think that's the difference, right? It's like they were credible as a platform-based publisher where Facebook never was.

AI assessment note: “why QQ was successful was that they didn't just decide that they're going to be”

Q It certainly seems from the, you know, mostly outside that a problem in the games industry right now is The amount of resources and capital required to make a great game. Would you agree with that? Uh, that it stifles innovation.

A I mean, again, as a former studio boss, I would say yes and no, right? In one sense, yes, because it doesn't fully democratize the ability to make games, right? And we're getting there. It's better than it used to be. It used to be you had to write your own engine in order to make a game work, right? And so you had, so you couldn't make games unless you were John Carmack or unless you were Tim Sweeney. That's no longer the case, right? Now you can go and license Tim Sweeney's engine, the Unreal Engine, and you can build a game on top of that. That's already somewhat democratized it, right? It's like we didn't, in the old days, we used to create bitmaps by hand to like, you know, try and wrap around three D characters. It's like now you've got, you know, incredible tech tools and technology Maya and advanced Photoshop tools and all of these other things that are just capable of sort of accelerating that process. They're a little bit expensive, but they're, but they're accessible to individuals in a way that, that you used to. When I started in the business, you needed literally a silicon graphics workstation. In fact, When I started, companies were being valued on the basis, on the number of silicon graphics workstations that they had available to them.

AI assessment note: “I mean, again, as a former studio boss, I would say yes and no”

Q things that have lots of usage, but don't have, have not attracted a lot of capital or attention or care. Perhaps we could talk about, uh, the opposite of that with Web Three and crypto over the past few years, and specifically Web Three and crypto gaming. You end Gamecraft, to my mind, kind of on a hopeful note about that. Would you agree? How are you feeling about it?

A I do, and I have been incredibly skeptical, right? Um, and I'm primarily skeptical because it's a character flaw of mine that I am part of the original tribe, right? I'm part of that OG gaming tribe, right? Like maybe a slightly younger than the real OGs like Bing and Tripp, but kind of still part of that generation, and so I still am very protective of the video game business because It was this kind of nerd's paradise, like back in that day, and I'm, I'm always resistant to tourism, right? I'm always resistant to people kind of coming in from outside and kind of claiming it as their own, and it's a character flaw because I should be big tent, and I'm just not.

AI assessment note: “I do, and I have been incredibly skeptical, right?”

Q And so for our audience who's not been paying attention to Web three gaming, how is it mechanically different than traditional game business models? Or even let's just say that the current most popular free to play business model of gaming. Uh, what new things does blockchain unlock?

A The good news is not that much, right? No, I honestly believe this, right? I think the best of them adhere very closely to the conventional models, and they use the crypto component really almost to maybe improve or enhance an elder game. So for example, if you've been playing for a while and you're kind of bored with just grinding on the underlying free-to-play progression mechanic, There's another sphere where you could play, right? Where you could, you could take your character and mint it as an NFT. It gives you certain benefits in the, in the underlying game, but it's kind of gives you status that you, in the status competition that you and the other, like very advanced players are engaged in. Because at some point, you know, if you've been playing Warcraft for World of Warcraft for 15 years, you're not running around killing chickens for gold, right? Like you're, you're playing a very different kind of game and you're playing kind of a social game. Right?

AI assessment note: “they use the crypto component really almost to maybe improve or enhance an elder game”

Q Did you have a PDP one or how did you get access to Space War?

A Well, there was a difference. It was the console successor to it, right? It was like they made, they took that idea and they made a box out of it basically. Only a few of them, but somehow one of them ended up In, ah, in, it was not the PDP version that you guys talk about in your episode, but it was a, a, like, cabinet. Yeah, like a cabinet version of it that, that, that, that was propagated in somehow this Woolworths in, or Walgreens, I can't remember what, in, in Fort Lauderdale in a mall had one of them outside of it, and that was literally the first video game I ever played, and then it was, you know, Robotron, and those kinds of games were sort of my jam growing up.

AI assessment note: “Woolworths in, or Walgreens, I can't remember what, in, in Fort Lauderdale”

Q but there's two different and very distinct reasons why there's more durability now. One is this concept of forever games. The other is the concept of, Mitch, I think you coined this term of, ah, platform based publishers. Can you talk a little bit about each of those and, and how they sort of fuel each other and how they're different, but how they both provide durability in the industry?

A Sure. I think the forever games Are part of a continuum. I mean, there was durability in the early video game business. It was just not the games themselves that were durable, right? Either the franchises were durable. I mean, you look at FIFA. And, I mean, I started playing FIFA on Trip Hawkins' Three Dio back in 1993, and I'd been playing every year continuously for the last 30 years. And so, if you really, if you think about it, that's a 30 year persistent play pattern very much Kind of congruent with what we've described in the forever games episode with some of these long duration play patterns. It's just that they packaged it very differently. Like you were playing the same game, but you just had to go buy it again and again and again and again and again. And you look at the Nintendo portfolio, which you guys have done a really good job of exploring. And, um, you know, you look at the continuity of their brands where they've been able to bring the same characters and the same kinds of play patterns back again and again as they shift from You know, NES to SNES to Cube to Dreamcast to whatever, and like, and all, and that is a sense, that is in a sense durability.

AI assessment note: “I think the forever games Are part of a continuum.”