Social games are concentrating playtime and investment

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 4:06:14

   Okay. What do you think is the future of the gaming industry? So we've said, to me, a bunch of exciting stuff about indie developers. So, you know, do what are called AAA video game companies, so these big gaming companies, do they have a future? What is their role? How do you see in the next 5, 10, 20 years the evolution of these big companies and indie developers? Yeah, there's one constant in gaming that I think the industry manages to lose sight of from time to time, astonishingly, and that's fun.

2. 4:06:48

   People play games for fun. Our whole job is to deliver fun. And when you look at a lot of the games that failed recently, they just didn't deliver fun. Or they didn't deliver fun in a manner that was nearly competitive with the other sources of fun that exist in people's lives. And so, you know, at a basic level, we don't need a terribly complicated theory to explain a lot of that. malaise in the game industry there's been a degradation of the capabilities of a lot of publishers partly because of competition for talent you know companies like with really vibrant game businesses like epic or riot or others are hiring the best developers and accumulating them and big tech companies are hiring the best game developers because there's super talent there and so in some cases the companies aren't competing robustly or getting

3. 4:07:35

   worse they're making games that are less fun and you know i think everything else that's happened is kind of a sideshow to that. There's always political drama and so on, but I think the core is a failure to deliver fun. And the nature of fun is changing. It turns out that playing a game together with your friends in a really socially engaging way with voice chat is just way more fun than playing a solitary game for the most part.

4. 4:08:00

   And there are exceptions to that, but I think we're seeing much, much more playtime shifting towards games you're playing together with your friends, and not just random internet strangers who happen to play that game too, but do people actually know in the real world? And that's certainly been the case with me and with almost everybody I know who's playing Fortnite or similar games. And that has really significant effects in reshaping the whole game business because like a single-player game, if you have 20 people with 20 different opinions of which game to play, each one might buy a different single-player game.

5. 4:08:32

   But in a multiplayer game, if there are 20 games out and each one might have their own completely individual preference And each one, we're independently choosing which game to play. Each one might buy a different game. But they're all realizing that they want to play together. And so what players are doing increasingly is playing a game they like and accept together with their friends, even if it's not the game that every one of them might be preferring to play themselves.

6. 4:09:02

   That's certainly the case in different Fortnite groups I play with from time to time. It's like, you know, one player might have been preferring to play COD, one might have been preferring League of Legends, somebody else swimming completely random, but it's just so fun to play together that we're doing that. And that means that there's really strong Metcalfe's Law effect in which games which are able to attract a large percentage of your friends are more able to attract you, and not only attract, but also retain.

7. 4:09:29

   and so you know i think matthew ball's analysis of this over the years has really documented the trend towards you know you can call it the metaverse or you can call it large-scale multiplayer social gaming he's really documented this trend and you know over the past year or so it's taken a really really strong turn towards increasing rate of change increasing numbers of players coming to fortnight you know we hit an all-time high of 110 million monthly active users uh a year ago um and another like close to peak this time roblox is bigger than ever and you know this trend is players consolidating into multiplayer experiences they play together and we're seeing another trend overlaid with that which is like an awesome single player game that comes out or a smaller multiplayer game comes out people often will like treat it as a vacation they'll go off

8. 4:10:15

   and play that game for a while then come back i think wukong was an awesome example of that a wonderful game from a brilliant team in china they made a game that's like no western players had really seen that that type of thing done before and it was awesome and it did well but most players play it for a while and uh and move back on and that can be lucrative but a business that's building that kind of games it's gonna have to build a new one every few years and and build a business around that while the other games continue to create users but you know when you have a large number of gamers migrating to a small number of games, the effect of that is increasing revenue for those games, increasing reinvestment. And, you know, there are things that Epic can do with a team of thousands of people building Fortnite internally, and tens

9. 4:11:03

   of thousands contributing to Fortnite as independent creators. You know, there are just things that can happen with that level of investment that can't happen in a smaller game. And so there's somewhat of an increasing win-or-take-all dynamic where the biggest games reinvest more to make their games more fun, to gain fun at a faster rate than other games, and the industry is changing around that. And so I think the lesson for the game industry now is that there are really two big opportunities being pursued.

10. 4:11:30

    There's big games, or games that have the potential to be really big multiplayer experiences that keep players around indefinitely for very long periods of time. and then they're just really good single player and small scale games that people are taking a break from their big games for and you know the trend there is going to be towards efficiently developing those games you can't build one of those games with a 300 million dollar budget but if you can do it with a 40 million dollar budget you can make a lot of money so i think that's the main reshaping going on and i think that it creates a rather bleak outlook for a lot of the category of like single player games that don't have a huge audience to reach um and you know but this is just one of the really trends of restructuring the business around the technology

11. 4:12:14

    and changes of the day okay this is going to be a ridiculous question but um aside from the games