Building the Next Game-as-a-Platform

[Music] welcome to the novic gaming podcast where it is our mission to explore the business and future of video games we bring together the industry's brightest Builders investors and thinkers to keep a pulse on current events dissect emerging Trends and games share Lessons Learned and have a great time this podcast is also part of novic growing ecosystem which ranges from free and premium research to Consulting and AD advisory services for more information visit [Music] www.nic.edu are nikama the open source backend game server hero the game development framework for all your live service game features including the complexity of managing offline mode Satori the

worldclass live Ops product for maximizing monetization and retention and lastly the heroic Cloud to provide massive scalability after nearly 10 years of operation thousands of Studios trust heroic labs to help them focus on their games and not worry about game Tech or scaling for success to learn more and reach out make sure to visit heroic labs.com or check out the link in the show notes now let's jump into the episode welcome to the novic gaming podcast I'm your host David Taylor and today we're exploring what it takes to build the next big video game franchise powered by user generated games one of the things we know going into the conversation is that funding a thriving ugc ecosystem is expensive epic games for example paid roughly $320 million to creators in the last year to incentivize them to build experiences on their platform that's enough money to fund a new AAA franchise every year it's a

daunting task but that hasn't discouraged startup Studios like Builder rocket boy and Omni Creator products and their investors from diving in head first into the space Builder rocket boy closed $110 million series D round and ocp a 16.25 million series a today I'm joined by leaders from each of these companies who also happen to be epic games alumni Sergey galanin the senior vice president of publishing at Bild the rocket boy and Mike adamus co-founder and CEO of omni Creator products welcome to the show guys thanks for having us thank you so first let's jump into just how you got here today I think the audience would love to know a bit about your background and maybe we start with Mike um yeah sure so I guess I got gaming with my mother's milk my mom used to hold me in her lap as a child trying to beat my dad's top score in cubert so I guess I was destined to end up in gaming I started my career as a lawyer U and doing Wall Street uh law at at a big

firm um I gu the way I wound up to Epic and gaming most directly when I got admitted to law school I reached out to epics General Council he was the solo lawyer there at the time and I said hey I love epic I love all your games I just got admitted to law school will you have lunch with me and just tell me about being a lawyer and he said yes and the first thing he told me when we sat down at lunch is don't go to law school you still have time do anything else um I ignored his advice and then uh six or seven years after that he hired me as the second lawyer at Epic uh and then I was in the game industry eventually moved away from the legal side to the business side and then in March of 21 I quit along with my co-founder and brother to start her own company that's amazing so reflecting on that uh that decision was it a good decision to go to law school or or uh how do you feel about it now I mean I would still play it out the exact same way but I've given the same advice to every aspiring lawyer who was asked me for advice on going to

law school none of none of them have listened to me either all right well it's uh I guess I'm a little confused as to what the right decision is maybe there is no right decision it's it's go and then complain about it for the rest of your life yeah yeah yeah that's yeah I think that's what that's what the takeaway is awesome how about you Sergey uh I mean if we're going back as when I started playing video games uh it was funny my godmother used to work for like a uh restricted access Soviet era uh computer center where you have to have like permissions and clearance to enter but I was a kid so she would take me on uh you know into that stuff that processed probably some I don't know like super secure information and I would just play video games there they had some cool stuff they didn't have Tetris yet because Tetris was not developed but they had I think Lo Runner and they had Kingdom Euphoria which was my favorite it was one of the first strategy game I played which was purely text and you essentially assigned how much gra you spend on on different

things and I I I get got hoped and I want to make video games which was funny at the moment because back then all programmers for women and all Engineers were men and I was like I want to be a programmer and everybody like okay good you know every Bo wants to be a programmer it's going to be cute but that quickly has changed and uh I joined epic I uh worked for wargaming for a while I also created steam spy and epic was some people at Epic use team spy a lot and they talked about it to me and at some point they invited me to talk to team and I liked what epic was doing I was excited about fortnite so I joined the team and worked epic until recently and I left epic in September 23 and I joined rocket that's awesome you uh might have received a question from me like a couple weeks ago as I was perusing steam spy and trying to get some data for my for my own work uh and I'm just realizing now that the same

Sergey as the one on Steam I did not if I did not answer sorry about that I was on vacation I just came back yesterday I was in Japan for two weeks well on behalf of all business people in most Studios thank you for creating that resource for us it makes uh projecting Revenue a lot easier um so I guess maybe we can start off by diving right into the meat of the conversation you know you guys both worked at Epic um did you both work on fortnite yeah we're we're both on the fortnite credits awesome uh so yeah so these two know each other already that is another thing that I learned uh today so uh I'm I've already learned so much but um so I'm curious you know having had that experience you know what led to you coming out of that experience and saying oh we should build a ugc game um you know was it is there a market opportunity you're seeing is there something that you think that um they

could do better that you think there's an opportunity to to to pursue I'm just curious to hear your each of your thought process on it no I mean you left earlier but I think we both were unhappy with uh the way uh epic handled certain things you know when regards to ugc and fortnite and uh I think Mike realized uh them sooner so he left before I did so when I just think about my own Journey as a kid playing games um I think one of the games that had the biggest impact me on me was Starcraft and Starcraft came with a level editor and a lot of the Starcraft Campaign was built in that level editor and I found myself I had this moment of realization that I'm spending more time in the level editor than in Starcraft itself uh and I didn't have to go read tutorials I didn't have to ask someone for help it was such a natural extension of play that I started creating as if I was playing and when I've spoken to a lot of people they've had the exact same EXP experience and

there's a a bunch of Open Source games around the time I got addicted to net hack net Haack uh is obviously open source I started changing the code mostly because I suck at net hack and I wanted to make it easier and I realized that the way I had enjoyed most games and the way most of the games we that are generational games like Skyrim civilization they're really heavily modded and the mods make them better and it was that act of modding of taking something that is already built that you understand and reconfiguring it that felt super powerful and when I just looked at the market there weren't that many people that were saying this is the workflow that we want to enable this uh sort of fanfiction for games where you have a product that you know and you love and you have a a way to modify it to take it as a starting point and maybe change a little bit or maybe change it so much that it turns into you know League of Legends from Starcraft there wasn't anyone doing that what people were trying to accomplish was a very

different type of ugc which is hey we have these professional general purpose editors and we're going to make simpler versions of those general purpose editors for people who aren't sophisticated enough to use the full-fledged unreal or Unity or or gdau as a very different type of creation that really inspired me and inspired a lot of people that I talked to about how to make games and that's what we wanted to enable uh you know epic was working on ufn which is an amazing tool but it's directly competing with Roblox not the sort of creation that we were really passionate about that inspired us as kids and we saw an interesting Gap in the market to do something we had always loved got it so um really focusing on The Mod aspect of building into a building into the existing experience versus having a separate experience that is sort of leveraging pre pre- provided tools yeah I think if you if you just think about how people naturally Express

creativity if they're not a professional a professional wants aank slate because they want as little intermediation between their creative ideas and the finished product because they're professional they've done this many many times you think about a kid a kid wants to do fanfiction right how many kids have read Harry Potter and then said I'm going to write my own fantasy novel about Wizards in my own world very few but almost every kid that's read That's read Harry Potter has done some form of Harry Potter fanfiction they've you know wrote a short story about characters or they've done some interesting painting of characters in Harry Potter in a new way that's how you create naturally you take something you know you love and you start tweaking it and it can be a minor tweak that you just do for the love of creation or it can turn it to something that is its own Standalone product right like 50 Shades of Gray started as Twilight fanfiction right and over time it turned into its own Standalone Standalone product in many ways Star Wars was fanfiction for you know CA films and Western right

so it's just this very access natural way of creation uh that I think is fundamental to how we ex enjoy entertainment and express that joy as humans and it was just remarkable to me that no one in the market was saying wait there's this natural process that you could do in every other media except for games super interesting Sergey anything to add in terms of you know the opportunity that you saw I it's interesting because uh the way I approach things is also U uh colored by my experience but my experience was slightly different than mik's so I started programming uh I mean it was like uh program calculators and stuff like that but actual real experience programming I got was from uh computer called the Spectrum and the Spectrum came with basic built in so it load into basic essentially U development environment uh and even before you could play games you had ability to code games in that I actually

have uh one as expect from here uh and I the ease of coding the ability to just start making stuff was What attracted me to uh game development and what allowed me to actually make games because back then magazines would publish you know you know uh listings of uh programs that you could just type in on your other spectrum and you would make them run and you know you type it in it runs and then you start TW stuff and it felt natural and you could improve you could take a simple you know program that you took from a magazine that was like maybe 200 lines long and you you could develop into something more complex and it could be like even a commercial product at some point right and I think what we don't have right now is we're missing that ease of starting part uh for a lot of people game development seems to seems too intimidating like you're starting up and like one approach is like as Mike said is to start Ming existing games I think it's absolutely valid approach in a lot of style like that I I did mod games myself I I

created levels for lazy Las squad for example uh but another approach is just to start making stuff in an accessible environment that does require you to watch you know hundred of tutorial videos and like I'm game developer I have games that I coded right and I look at Unity or new engine tutorials and they are really intimidating for somebody like me and I can't imagine how hard it is for somebody who's had no experience whatsoever just trying to to start as just trying to develop and I think one big part that our ecosystems are missing is is ability to take other people's stuff and reuse it I think the big foundational piece for me when I started recording was I had all those tutorials and I had all those uh programs that were ready to use and I could just modify them and learn from TW just tweaking stuff around what what happens if I change the number here what what happens if I rearrange uh you know lines here what does it do and that part you cannot do right now in in in in

existing environments right I mean you could still buy assets on the marketplace but you have to be sophisticated enough to even know that there's an uned Marketplace to begin with right yeah same for Unity and I think that's why people naturally lean to Ming because Ming is is kind of like that you could easy learn easier from other people by going morning but it's it it shouldn't be the only way for people to Lear to code and uh to make video games yeah I feel like there's a interesting philosophical question here which is the sort of um you know having ownership over what you make and this is something that you see come up over and over again with Roblox and fortnite is you know people basically seeing what's successful and recreating it and uh and then making something slightly different and you know and um you know benefiting from the knowledge of like I know there's demand for this um I think what that clearly shows is yes there is demand for people to sort of work off of

what's already been successful and and incrementally improve it um but I do think that and maybe we can come back to this when we talk talk more about the Creator ecosystem part is you know how do you protect ownership how do you incentivize people to be Innovative um without depriving them of of of the ownership when when you know someone else comes and copies what they're what they're doing uh and and builds on top of that so I think maybe we come back to that in a second the other thing that I think is interesting is that uh fortnite was a very accessible Creator experience initially right it was you could you could build Maps using your Xbox controller your your PlayStation controller um and so I'm curious do you guys have a perspective on the direction that it's taken which has become much more you know it's become more technical in nature in order to to be able to make uh the experiences that we're seeing today uh so I was a big fan of fortnite creative obviously um and I'm now only

looking as an outsider because I left epic before ufn is released but to me ufn is a better Roblox right it's directly targeting the same sort of creators that would go on Roblox and giving them better tools higher Fidelity um which is a there's a big class of people who want that uh who aren't quite ready to use unreal who aren't quite ready to use Unity who want something in between and it can it can serve their needs it's a very different class of creators that that we want to Target I think our approach is closer to saying what if you built fortnite creative built fortnite within it and then when someone went to go develop they could actually just see all of fortnite in fortnite creative and manipulate it using those same accessible tools and of course your fortnite creative layer would have to be a little bit more powerful because it needs to be powerful enough to build all of fortnite that's essentially the the

approach we're taking so I think in terms of their competition with Roblox I think there's they're set up to win in the long term it's fundamentally a better product with higher Fidelity that you know it looks better the games play better but it's a very different approach than I think the Gap in the market for creators who don't want to work in a system like Roblox they want a different way to express creativity yeah I I agre Mike I think uh epic fortnite's ufn kind of suffers from a case of where they have two identities on one hand ufn is clearly targeted at uh people that are more experienced developers so part of it is Roblox audience part of it I think is existing on asent audience so to be successful in um uh ufn ecosystem you essentially forc to be a game developer like a full-time game developer you have to start a studio and do like all the grownup stuff right um on the other hand the business business model is not exactly great for that it's

not it's not what uh studios are usually used to it's uh the business model is more tailored towards entrylevel um creators right people that are are in there for fun so I think that is a bit of an issue and I'm like because I was on the mization side of things uh at Epic and now at build roet boy I'm not a huge fan of uh engagement based payouts of fortnite I I'm I think they are detrimental to the success of the ecosystem but I think the tool set euan is is powerful and I I think again once they figure out what the target audience is for that tool I think it's going to be great and I was just to double down that I think you're seeing a lot of um you're seeing people behave in ways that are similar to what a professional studio would so I'm seeing lots of people on Twitter say hey I'm open for commissions if you need this done in ufn and you're not sophis get enough reach out to me so they are

building that ecosystem of these sort of like Pro subers the sort of people who would have the fancy DSLR cameras but weren't professional photographers they're building out that ecosystem and those people are going to make really interesting games in in the long term and if I had to bet on them versus Roblox I think longterm ufn will probably dominate over Roblox but it's a very separate audience of creators that they're trying to serve than I think what Bill der Rock boy and we are trying to hit yeah so it sounds like you guys are sort of targeting more casual audience uh a more fan driven audience perhaps folks who are less invested in making a living out of this and really more interested in having fun and being part of a community I I I would Nuance that a little bit um I think the the distinction is the way we want them the way we're asking them to express creativity so I think if when you're working in in something like Roblox you are asked to express your creativity the

way a professional does it's not a question of technical skill it's a question of the creative process the sort of people who want to be who work in Roblox they want to build an entire world from scratch they want to make everything bespoke by them right that's not what most people do right the most natural creative behaviors you're playing tag with friends in the schoolyard and you have a custom set of tag rules where you have house rules for your Dungeons and Dragons games right you are taking an existing set of things that is well understood and you're recombining it in very unexpected ways and by the way this is how Innovation and gaming happens I mean look at Battle Royale Battle Royale is you take a shooter you add a ring of death look at how mobas happened mobas is basically an RTS where you restrict movement down lanes and you change the economy those sort of tweaks are what drives gaming Innovation but they happen through a very very different creative process so you know

people who are technically sophisticated will do quite well in our creator tool set we have a scripting layer you can open it up you can change the code for the main game if you want it's all accessible to the players the thing is we don't force you to build everything from scratch we say just take the world as is take as much of it as you want or as little as you want and then express your creativity on top of that start remixing that I think is the key fundamental difference yeah I agree with Mike I think or at everywhere in b roet boy we're taking it one step further so I absolutely agree that most people do not make stuff from scratch and do not expect to make stuff from scratch like if you're shooting a movie you you recreate some sets right and you you create recreate some things but you're not expected to make every car uh you know from from scratch you're not supposed to create set up your own uh outfit production for all the dresses for everybody to wear and all of that like even if it's a sci-fi movie obviously a lot of stuff you have to do SC but not everything and you often

reuse things from other uh movie sets you reuse stuff from other movies you reuse stuff that been developed for other purposes and I think the power of our tool set in particular is we allow people to share and reuse other people's Creations we call the system stamps uh and what it does is is in essence is that anything you make it could be an a game item it could be a character it could be a game mechanic for example so you created a really cool weapon selection system or you created a really cool uh character uh fighter system where you could have a fighting thing and you could stamp it uh which essentially place it on a into a library and anyone can access it well you can decide you could say well it's only for friends you decide it's public but we want people to make as much stuff public as possible and if you make it public anyone can access it and anyone can use it so it means that when you're creating something cool and you you you you want to do your own tag game you don't have to start from scratch say like I I want

to create a tag game I don't care about the level much I will just go on into the library that is shared and I will look at all the levels that could be used for tag that were created by other people and I might find a tag level that was made by Mike and Mike make it made this level for a shooting game but I'm just going to take his level and maybe rearrange some stuff in his level and and make it a part of my game and then I want a tag mechanic and maybe somebody already made a tag mechanic that is similar to what I want but not exactly what I want I will grab that tag mechanic as a stamp I will place it at my level I will tweak it a little bit to make it fit my needs and now I have a combin things that were made by other people that I combined in a new way and it's what it's what people do anyway in other ecosystems like most games reuse mechanics from other games most games reuse ideas from other games it's just they have to be recreated from from scratch and that takes a lot of time and if you have Engineers making yet another version of Battle Royale from SC you

have a lot of man hours being put into creating the same thing essentially uh just from scratch in our case because I can reuse other stuff we believe the speed of iteration could be much faster you because you don't have to recreate all the stuff and also you remove an issue of People pering clones and derivative games as people stealing stuffff I me you've you've you've heard this a lot of around fortnite specifically lately because there have been people dmca other and I'm not not a lawyer un likee Mike so I don't know you know how legal what was that that thing that was going on with fortnite but in our case it's built into the system so if I take Mike's level and use it in my creation Mike is getting credited as a co-creator on my thing so it's going to be well it's a game made by Sergey with contributions from Mike and if I ever decide to make money from my game Mike will get a a portion of revenue from the things I I'm going to make so I think it would allow people to collaborate with each

other without necessarily going through the motions of setting up a true collaboration like example M gave you when somebody uh is open for commissions at Epic uh in Epic ecosystem in fortnite or somebody open a commission robx you have to manage those people you have to find the best person to uh do the work you have to talk to that person which is fine it's part of the job if you're a professional game developer but if you're just a hobbyist you don't want to manage people you don't want to look for the best contractor and then uh manage them and then give them feedback feedback and all of that you just want to go and grab stuff that maybe was made by somebody and if you have somebody who's great at making characters they would be just making characters and uh placing them as stamps and hoping that other people will reuse them and then they would if they are in for the money they would earn por enough revenue from all the other games that reuse the characters if they in there just for fun that's fine as well they get the likes they get social recognition they you know they get their profile elevated because they created so many things that been used used by other people and played by many other people and I think

it's it's a natural extension of how people cooperate we just try to remove what is essentially a nonf fun part of it is just the part where you have to recreate things and the part where you have to manage things instead of just building stuff right we want people to focus on building new stuff instead of rebuilding all the old stuff that was done by something else so actually that's a it's a very interesting it's a very interesting approach and it's very philosophically similar to to what we're doing so we've we don't have a concept of stamps we call them myths and for us every piece of content is placed in a myth and each myth is atomic and dynamic and so they're Atomic because they're like apps on your phone you can load an arbitrary combination of them and they'll technically work together the resulting gameplay could be stupid right there's no way to protect from that it could be really fun it could be really stupid that's for the person combining them to to decide and myth can hold an arbitrary set of information character

definitions it have quests scripts map map definitions and they're Dynamic meaning you can load them in and out um while the server is running and while you're playing and we've stuck to that data structure for our own first- party game so everything we make is in one of these myths everything your creator makes is in one of these myths and it means that if you're a Creator you can say hey I want to take this this and this from the main game combine it with this this and this that I made and know I'm collaborating with Bob I'm going to grab one of his myths and you've just slapped them together and it'll work it'll work out of the box with no additional technical assistance what we think is really cool about that is going to open up new ways to create so if you're not maybe you just don't want to go and make your own stuff maybe you're essentially a really good DJ you're really good at picking out pieces that other people made and assembling them in a way that is really amazing you can do that with no technical skill you're just making a playlist essentially so it

opens up new ways for people to collaborate new ways for people to create I think it's it's really exciting super interesting um I I want to make sure that we have time to go through you know all of the things we're going to cover today so you know just to to you know level set on where we're at I think what we're going to cover is the sort of three different components that go into uh or four different components that go into you know a ugc ecosystem obviously there's the players there's the creators there's the tooling and then there's the monetization aspect um you know I think there's a lot of questions that emerge when you're thinking about the the role uh uh or sort of the the the economics of deciding whether or not to use stamps or myths like you guys are talking about um I'm I we'll get more into that in a sec um just but just to start like players are the you know the engine of

every uh ugc ecosystem without players there's no reason for creators to come and and make things so I'm curious like you know how what's your strategy for attracting that initial audience um how do you see being able to pull players away in this hyperco competitive market of of gaming I think the only way to do it if you're launching a new ugc ecosystem is to go game first uh I don't think people will come just for slightly better tools uh in the end slightly better tools will win but you won't attract that initial initial audience so you know for us you cannot separate creation from play you if you're playing the game you necessarily have access to the Creator toolkit which we call Creator lab and you switch over to it with one button right so the initial the critical initial audience comes from the game and we were we were very thoughtful

and hopefully we were correct our early data says we are of picking a genre that is hot now it's in the Zeitgeist it'll attract a critical mass of players that'll engage and retain with the game and then we'll both turn into early creators and uh the customers for our first generation of creators this might be a good time to sort of take us through the full player experience tell us like what is the genre you know what are what are the themes what are they playing um and how they convert to a yeah so for the main game that we're building we're the code name is Project Frontier um it's a light Survival action RPG uh it's multiplan session based right you can think of it as hell divers meets valheim right um and you come in you play with your friends if you enjoy it and you realize hey you know I did this Quest I think I could do a better I think I have a better spin on it and you

just hit the creater La button you go in and you can start manipulating that Quest change around what you want you play it with your friends and you say oh this was fun let's try changing this other Quest we can turn into a story line and before you know it you now have your own game built out of it that could turn into a wholly independent genre uh or you just stay making fun modes to play with with your friends uh that I think is going to be the journey for for for most people they come in for the game realize that hey this is basically a Lego castle that's been pre-built for me but I have access to the Lego blocks I can change what I want I can change the drawbridge I can change these towers or let me just smash the whole thing and I'll turn it into an elephant we think that's going to be the fundamental journey and once that flywheel gets going you'll have people who come in specifically to create because they see the power of the tools they see there's an audience that they can create for and they just dive in for that awesome about you Sergey um well I agree that it's

it's going to difficult to attract people just by the but tools we've seen it happen actually we've seen it with robblox uh but it's it's it's a slow process and it's long only took 20 years yeah yeah I think you should still focus on that you you should still focus on attracting uh creators because like uh players are who's going to play and who's going to spend money but creators are who's going to create stuff for players to to come to so I think that part is should should not be discarded yes the main game is important we're working on uh a triaa main game it's uh it's not what you'd expect from uh uh a game like ours and it's a separate product but You' be able to access uh parts of it and you'll be able to modify parts of it inside of everywhere um we're not announcing it yet I mean the name is out it's called M ey but we're not talking about it much so I don't want to just spoil the announcement so okay that's fine but maybe maybe tell

share us more about the player experience if you're able to of how you see players coming in for the main game and then trickling into uh the Creator side of things well I don't for us it's going to be slightly different uh because I think people will be coming into everywhere to play with uh to play the stuff and engage stuff that was created by creators based on that other main game or based on the original uh Creations that they just made in everywhere specifically uh and I think um it's going to be more similar to Roblox than is similar to fortnite so in fortnite you see uh the creative community and um the games sko towards fortnite practice mode essentially so you have the box Wars you have the last Circle modes and if you remove all of them for Creative is doesn't have much else to offer because it's so much it's so screed by the main game and byy what they offer I think Roblox is a much

more balanced and and thriving experience because Roblox offers a lot more things for a lot more players even though it took them obviously 20 years to get there so I think and my hope is that everybody is going to be more like that so even though you will come in and you'll play versions of minai and and game modes based on on minai I hope that players will come and find more things uh to enjoy than just essentially modifications of the main game we do have some some um modes developed by by our team that are completely separate and we do have some uh top ugc creators making uh stuff for everywhere as well so even even right now if you go to join Builders beta which is not designed for for players at all like it's it's purely for Builders uh but we do have some like 20 something game modes in everywhere already that you could access it right now they're mostly for Builders to learn from they're not for players to play um so I think uh for an ecosystem like that it's for

us it's it's important to have a diversity of experiences obviously you will have some experi that are more popular than others like it happens with Roblox it happens with SP gra happens with steam but you can't say people are coming to steam just to just for Counter Strike or for do right same for Roblox people are not coming to Roblox specifically to play uh uh you know like a Sonic Recreation or those Toilet Wars or bedw something like that people are coming to roox because Roblox has a bit of everything and I I think for us it's important that an ecosystem can offer a lot of things to a lot of people that's why it's called everywhere yeah so it sounds like it's it's uh it's independent from the AAA game that that you guys are building even though it's connected yeah yeah do you so I guess going back to the original question though like how do you plan on getting that initial player base into the game um what's the sort of from a go to

market strategy perspective how are you how are you getting players in we are focusing on Builders first right now so we're trying to get the tool set that is uh good enough for Builders to be able to quickly iterate uh and uh quickly develop in the ecosystem and uh we are focusing on Builders from under communi so it's not just us trying to grab people from um fortnite and Roblox ecosystem because uh as you mentioned people building for Robux and making and making money we are focusing a lot on on people from Minecraft Community from the seims from uh other similar creative uh places and we are building ENT we're not trying to go out with a big bang we're not trying to get um you know 100 million players into the game immediately we're trying to slow bur it to get smaller audiences in first focus on uh certain game modes and uh audiences first and then expand from there so if we can build really cool

experiences for people that let's say play The Sims for the uh live simulation experience we can build experiences for for that audience first and we can expand from there I think we can succeed we are unlike AAA games as a live service product we are not under pressure to immediately deliver huge numbers because if you're coming out as a AAA game the Box product that's $60 $70 you have to sell a lot of copies in the first months and you have to deliver a full experience in the first month I think for us it's more important to have an experience that retains fles at the stage than the experience that track players necessarily right we want to make sure that whoever joins everywhere right now is having a fun time and is likely to retain before actually going out and spending uh marketing money on acquiring more users makes sense so make sure that you have content within everywhere through working with existing creators um and then then spend you know marketing

dollars once you have that critical mass of content once we have critical mass of content and more importantly once we have retention numbers that you know last thing we want is to have you know 100 million people join the game play one game more that is fun and leave immediately after that because it's just Wast a lot of good marketing money and it's much harder to reacquire users to an existing ecosystem then to acquire them and keep them in the game in the first place yeah makes sense so you hinted at this a little bit but you know one of the scarcest resources in ugc is creative Talent um and so Sergey you sort of you know you sort of said it already like you're looking at Minecraft and and Sims creators uh so watch out Microsoft and EA um I'm curious those game my my point was about Minecraft and The Sims is that we are not exclusively targeting Roblox and and fortnite we are looking at the broad ecosystem so everyone needs to watch

making modes for other games yeah makes sense um so Mike would you agree with thato like that perspective that you know they or my perspective and sounds like sergey's perspective of like there is a fixed number of creators out in the world that platforms are competing over you essentially need to win creators to come to your to your Aid or do you believe that you can sort of grow the total pie of creators I don't think creators are as scarce as as common wisdom suggests U I think the sort of creators who can work in existing workflows and tool sets that's scarce that's a that's a fixed resource and it's very much a a red ocean fighting there I there's a large number of creators that are not served by existing tool sets it just it doesn't work for them and I think just opening it up to them will opening up a tool set that can work the way these people want

to express creativity will expand the pool of creators they won't be they will not be your first creators just because you have to grow that that audience but that's the blue ocean where most of the interesting creativity will will come from so I think in the in the beginning to attract creators you need to go after the scarce uh Creator resource the existing Creator community that knows that hey I'm a Creator I make stuff in gaming and the only way to do that is to solve real problems for them um just you know we basically as soon as we could we had real creators from existing ecosystems working alongside Us in the products and we' constantly ask them are we solving day-to-day paint points that you have in another ecosystem uh what are your biggest pain points what are we not solving yet and are are trying to hit that but if you're just fighting over those those resources it's going to be a over that scarce

group of creators that we have today it's a very difficult thing to win there's just not that many people that can take a tool that's similar to a Unity or an Unreal Engine and make something interesting in it so you have to expand the pool of creators and that's longterm our goal I I want to say I agree abely with Mike I think you could never have you could never expect 100% conversion from uh consumers to create is just because some consumers want to consume you know not always you want to write a story even though you everybody everybody can write and read no not everyone is a writer right but everybody tweets or writes emails or does some you know like cre creative work um at a time and that can be used and I think the accessibility of tools is super important remember the rock music explosion like in the 60s and it happened to a combination of technological factors you know we learned how to make instruments cheap cheaper so ritar was suddenly more accessible to you know a middle class

person and they could be a gift for a kid instead of like an investment like a music instrument used to before and then we had multitrack recording so we could actually record that music and and spread it out and and mix it uh and it allowed you know rock music to become a thing and like music to become a thing that is democratic and not just limited to uh composers that are funded by you know uh people with money right so it eiz the music and I think game development is already quite Democratic but I think it could be we could could be more done to make it more accessible to everyone and again you don't have to create a full game and like I think that's a uh common thing between uh what Mike is saying and I uh saying you don't have to create a full game you can express your creativity in in game design by just taking other people's stuff and remixing existing modules and and and nothing could be fun like you don't have as a as a game developer you have to create a 20

to 30 hours experience that is highly polished because you want to sell it for 60 $60 because you want to you know be able to make a living as a video game creator as somebody who's making just stuff for fun you don't have to do that it's a difference between Tik Tok and movie making right if you want to make a movie that's going to be in a movie cies it has to be two hours it has to have a high budget it has to have stars attached to it because otherwise people will not pay $10 and the movie CS will not show you movie but as a Tik Tok Creator you can make something that is like 10 seconds and it's going to be fun a lot of people will watch it right yeah and I I think uh everywhere compared to G classic game developers it's kind of like Tik Tok to YouTube to movies yeah I mean I guess if I was going to play Devil's Advocate it's that Tik Tok you just press a button and put the camera in front of your face whereas at the end of the day game development whether it's as a Creator or as a professional is still complex you need to think about game mechanics and

placing objects in an environment so there's still a degree of friction I feel like we see that to some degree in the number of uh cre you know experiences that were created on fortnite I think last time I checked there were you know uh like uh 25,000 creators um for a player base of you know we saw 100 million Maus uh when you know at its peak it's probably dropped considerably since then but you know Roblox is 1% of of of players are creators um so there is a there is definitely a um it's it's not as frictionless I'll say no matter matter and even with Tik Tok it's not as frictional as well but like going back to Tik Tok example if you're a good dencer and you want to you know show your dense moves to the world before Tik Tok you had no chance of doing that right with Tik Tok you just set up a camera and you still have to have the skills to be able to dance or to be able

to sing or to be able to talk about stuff but all the other stuff is is done for you so you have the distribution covered you have the filming covered where the modern mobile phones or modern uh cameras you don't have to do any of that stuff because it's all streamlined and easy so you can you you still have to have you still have to be creative you still have to have something to say or show to the world but all the other parts can it more streamlined and I think for gaming I think it could be said as well like you might have great game design ideas but because you don't have a team to implement those ideas or you don't you don't know how to code or you don't know how to create new characters you can't express it and in an ecosystem that allows you to mode you could come to Skyrim and you could express some of your game design ideas but you still have to uh know how to use Skyrim mode tools and they're not that easy if you come to everywhere our hope is that you could express your game design ideas uh by interacting our tools and I hope with that You' be able to express your character design ideas or

level design ideas as well easier we are not solving all of that at the same time but we are taking you know one step at a time until you know as we as an industry not just as bar as an industry we solve that and we make create creation more accessible I think steam was a really important step because steams made steam made distribution accessible to everyone right before before that there was no chance for an indie company to be to ever be successful because you had to go and sign and deal with uh Best Buys and Walmarts of the world to be able for people to be able to access your game right so steam streamlined that significantly then you had unre engine and unity that made the processes of uh creating uh good-looking games much easier but not we can we can do better that's that's what I'm saying yeah yeah I think I think the key point is what is the minimum Quantum of interesting creation the real innovation of Tik Tok and YouTube wasn't that they magically simplified

the process of hey I've I'm now making a sitcom they just said no a 30second video is a totally valid form of video creation a three minute video is a totally valid form video creation you still have to know how to work a camera you still have to have a lighting setup you still have to do your audio but when you're doing that for 30 seconds it's orders of magnitude easier than doing it for 30 minutes with a bunch of actors in a Studio environment and the same thing can happen in games it's already happening in some things if you look at mod iio for example you look at the number of mods for totally accurate battle simulator there's an enormous number of mods because they've they've very clearly defined this is what the minimum Quantum of creation is you can pull this lever this lever and this lever go to town and it's suddenly super accessible to everyone right so that's a big you know big Focus for us was really shrinking down what is the smallest Quantum of creation you can do that is Meaningful that you can share with other people because that's ultimately what

makes creation really easy you change just the thing you care about take the rest for granted and go yeah yeah and I I agree with Mike I think there's a lot to be said about having a system built for you where you just tweak stuff like what imagine if you had a Mario game but you play as a Goomba right it's it's probably not not a good idea to have a $60 game based on that but it could be a fun certain second one minute experience you know that somebody could build if they had access to the source code and all the models from the Mario from a Mario game imagine a dune game and there's like a bunch of them coming out but you play as a sand War again probably not worse uh a full $60 game but it could be fun for five minutes and it's something you can actually this part you can actually build in everywh right now we have a somebody made a sand warm like creature and if you you just attach a player controller to it and have a s war game that's it yeah so it sounds so so

we're talking about sort of the uh change in form factor in terms of what constitutes like a consum a consumable piece of content in games and this sort of brings up the question of of Discovery so I'm curious you know could you guys describe from a player perspective like what is the Discovery experience how do I engage with a more cons like a smaller consumable piece of content um as a player in each of your games you know I think there have been attempts to make Tik Tok for games where you have a uh a stream and you just swipe up and down but games just aren't cons I think highpipe does that games just aren't consumed in that format games are consumed within a larger context so I think it's hard to make something meaningful when you're swiping up and down like I think the problem space is relatively relatively constrainted uh and you basically have two options and we're trying to do both the first is if people make Standalone experiences they need um a Netflix like Discovery cue

where you can search something or you get recommendations but these are Standalone experiences I think the AL the alternative and the thing that gets you the closest to having a Tik Tock style feed in gaming is because because everything is assembled in the form of myths and the myths are can be arbitrarily composed with each other if you made a cool Quest there's nothing stopping us from saying okay next week's battle pass weekly challenge is you have to do David's Quest it's a single tick boox on our on our back end it loads in it's great for us because we get fresh content that we didn't have to build ourselves but it's also great for you because you get the best Discovery you can you can possibly get you're now in in front of every single player who plays the main game and if they interact with your thing on the match and Screen we could tell him hey you played David's game if you enjoyed it check out his other Creations it's the best Discovery you can do and if you think about you know an ideal

ecosystem is going to combine the sort of breth of games you see on Roblox with the sort of things you're seeing in ufn because all of those practice modes they're actually fun they're a lot of fun what they suffer from is they're isolated practice modes they exist outside of a context if someone could build a cool little challenge that could then go into the fortnite main game that would be amazing right so ultimately for Discovery you have have to do both you have to allow people to pump content into your main product that is going to see the most foot traffic and you have to allow them to put Standalone experiences into something like a Netflix q but just sorry s just to play Devil's Advocate on this like if you had 100,000 creators right who are all making pieces of content you you can't possibly put a 100,000 creators worth of content into your main game like you know at best you could probably put like 50 pieces of content uh and so I'm

just wondering like you know for the you know 800 89,000 or whatever I'm terrible at math uh other creators who are not in in the game like what's their what how do they get there's gon to be a there's GNA be a large portion of of creators that already have their own following and they don't need or want Discovery assistance and or they're building purely Standalone experiences so so not every Creator will will want it there'll be a smaller group that uh that does build something at the Quality Bar that it can go into a man experience that will Jive well with the main experience it will be a much smaller group but you're thinking about it with the kind of platform restrictions we have today where there's more work to do to include it than just a person reviewing it to make sure yes this meets relevant standards let's put it in the queue the way we've architected the

system it's a single tick boox to include a piece of content into the experience they don't have to be there for a week they don't have to be there for a month they could be here's today's daily or today we've got five dailies that'll randomly come in you know one will be from David one will be from Sergey you know the other three are from Rand and they can get shuffled very very quickly and uh so it turns into a review and uh turns into to a manual review problem which we can down the road automate and you know use some fancy machine learning to help to help speed it up but there's absolutely no problem in pumping a ton of content in there's no reason we can't have five in one game if you have a 3 kilometer by 3 kilometer map and you had five people who built really cool Villages there's no reason you can't put all five in the map is it going to be all so is it all first party games that are you're plugging content into or is it going to be similar to what fortnite and Roblox are well more like fortnite of like you know

100,000 different iterations of the of the primary game each that can have uh you know custom pieces of content so the the architecture supports supports both right so we can arbitrarily pull stuff into our game creators can arbitrarily remix things if they choose right so all of the you know we're building everything in in our own tool set so everything we have access creators will have access to right so if you become a very big sophisticated Creator you can set up your own battle pass you can pull in other creators content the same way we pull it in uh it's accessible to to you as well so every every single piece that we have access to every Creator and player has access to as well so we're hoping what we're hoping the long run the steady state is is we have our first party game which is going to be large and will be a good Discovery platform we have a bunch of long tale of Creator

content which you has usage but it's not blowing up and then you'll have several big games that replicate the sort of behavior that we show where they serve as Discovery springboards for for other creators and they're they're kind of like the League of Legends that never left Warcraft 3 Sergey anything to add well our approach is slightly different I think there's multiple mes for people to discover games and we just need to cover everything it's obviously menu based Discovery what Mike mentioned is Netflix type of Discovery where you have stuff that is popular and you have stuff that recommended basic just to you based on the stuff you play is also social discovery things that your friends have played or playing right now that you know you you don't necessarily want to play a g this game you want to play a game with mic not necessarily it doesn't really matter what you going to play you just want to play with your friends this is important part that needs to be covered as well we also have uh called an emic Discovery uh because you can set up portals anywhere into any game from

any game uh we hope that first of all we have our own spaces in everywhere uh social spaces and uh our game spaces where we we could we will use to um promote content from creators but also creators can promote and can place portals into uh experiences from into the other experience or experiences from from the friends or the Creator they respect we actually develop an system that allow people to link the um games that would allow them to share some variables and resources between them so you could you could have a game that is developed by multiple people and expanded by multiple people even though everyone is responsible for their own piece of uh of the game and I think that would be helpful to the in Discovery as well and imagine if you had and we we've seen this with indie game developers on on Steam with the uh share characters but imagine they could share progression imagine they could share some some other cool things between games I think they would help um them a lot and it's also um external discovery which I think is

underappreciated uh and I think it's a big driver so the um ability to easily link out into experience from uh from the game that anyone from outside the ecosystem could just just just jump in it's called deink right I think is is really important and it's been a big part of roox Discovery success the fact that you could just send a link to a roox game to your friend and friend could just jump jump in by clicking the link I think is important and that's system that we hope to have it's fortunite doesn't have it uh but that's a platform thing they they had to be compliant with Xbox or Playstation yeah and they essentially hamstrung the uh mobile and PC versions to have the same experience we don't have to do that I think it's absolutely fine if some platforms do not support some features that absolutely fine but I think if you're on PC or you're on mobile and you see a link to an everywhere game you should be able to click it and just champing it's funny Ser cuz I remember you and I complaining about this to each

other uh back back in the day and so one of the one of the first things we did was also solve the same deep blinking problem yep yep it's just it's just such a natural thing right you know to to have de link and it's so annoying that sometimes exper games do not have it yeah that makes sense um and so sounds like you're both sort of looking from a player player perspective the discovery experience in game is you know this sort of Netflix Turn Style experience um you know easier said than done I would say you know when we look at epic's uh you know ability to to highlight uh targeted targeted experiences to players based off of their their gameplay Behavior it's appears to be quite constrained I'm curious like do you guys have a perspective on what the difficulties are um I yeah look in any sort of Discovery like that it operates under a power law right and so

you will have a few that that eat everything that's not the primary Discovery experience we want we want the primary Discovery experience to be what I described you come in and you play and you interact with something in the main game that is made by ugc Creator and you just get told hey this thing that you did that you had fun with was made by David go check out his other work that's the way to actually expose things this is why to Discovery is so powerful right they give you things they think will be relevant to you in a way that is very natural for you to engage with you don't go searching stuff on Tik Tok you just go and enjoy that's what we're trying to to replicate as the first class citizen I think you have to provide that menu based Netflix style Discovery because you'll hear word of mouth oh go play this game and you need to be able to search it up but that's not a good way to find games that you'll enjoy yeah I I I think endic Discovery where you essentially discover stuff while you

play the game is more important than me based Discovery but you have to have Minas Discovery minase Discovery in in games is limited because essentially all you have you know Netflix has the algorithm they had it open source you can look it up but essentially it's a variation of cun's clustering pretty much and cun's clustering is limited by uh number of by the data that you have and by the cluster that you belong to wait can you say that again I I clustering what does that mean it means that you div you divide people into groups clusters uh based on their affinity and they uh closes to each other so if you have people playing strategy games and you have people playing mobile playing say RPG games they belong to different clusters but you will have people that play boss strategy games and RPG games and they will have their own cluster and then you have somebody who's playing strategy games and RPG games but also plays Barby games for example and they're going to be in their own cluster but it's going to be so tiny that once they get into this class they kind of get logged in and there's not much content that can can be recommended to them there also

amount of content that people consume in video games is smaller compared to what they consume in the movies because you watch multiple movies because movies are only like two hours long or you know an episode of the show is maybe 30 minutes to 45 minutes an average game is 50 hours long so there's only so many games you're going to play so there's difficulty in that uh especially that is more apparent on Steam and steam is is much better than it used to be but it's still it's still a bit an issue and so that's why you can't just rely on on recommendation engine uh because recommendation engine is is going to be based on information you have about the consumer and that information is is limited by the amount of restriction they have in in your ecosystem so you have to make it emic and you have to make it social and by social I means playing with your friends but also somebody on Twitter you you like shared a a link to experience that you could play and you just jump in and play because not necessarily because you like that experience but because you know you trust that person's opinion so if you could you know if every time somebody

recommend your a video game on Steam you could just just um jump in and play that'd be awesome right but steam is not a fre free to-play Marketplace steam is a paid Marketplace which you know that's reasonable decision that's a choice but I think having the power of just being able to try experiences which would be extremely powerful and that I think what powers Roblox a lot yeah the fact that you could just try anything in Roblox by clicking link playing it immediately and then decide if you want to spend money in it I think is the other important Nuance here is it takes you much longer to decide whether you'll like a game than whether you'll like a video I mean I think as as important as the Netflix recommendation algorithm is in the menu the videos start playing and so you can just see in 10 seconds am I going to like this movie or not and you can just click click go you can't really do that with games you need at least 30 minutes to figure out am I going to like this game long term and so you just can't get that in a menu based discovery mode I'd

say on Roblox it's a little bit shorter I mean I've seen some of these Decay curves of of players it's like 10% drop out in the first 30 seconds niney olds you know they have short attention SP generation it's easier to get in but it's also easier to get out which is the point right so that's not necessarily bad if you have an ecosystem where people jump from experience to experience until they find what they like it's absolutely it's like switching the channels you don't you know if you uh surfing the channels before you find something you you want to watch all the stuff that you just click through doesn't count like yes you click through one channel to the second Channel until you find what you want to watch it doesn't mean that you disengage with those channels that you s through right yeah um so we're we're running a little long so I want to skip over to to monetization a bit and just sort of understand what is what is the business model that you guys uh have and and how does that sort of connect to the uh

Creator ecosystem so I'll I'll reserve the the right to change my mind at a later Point uh because we haven't publicly stated what our monetization is so I'll do it for the first time here our our long-term monetization plans as the experiences the free-to-play experience um once we get out of Early Access we'll transition to to freeo play we will control the platform-wide Cosmetic economy so if you want a particular outfit that works everywhere it only comes from from us and we'll have a battle pass and monetization for the first party game and the creators get everything else right so they can essentially do the Roblox Style economy uh they get paid in the same virtual currency that players pay with which they can then cash out to Fiat and because we have the first party game and our own cosmetic economy we're hoping to be able to take a much lower cut than Roblox does and leave a lot more for the creators that's the that's our long-term model nice sort of a hybrid approach of

both fortnite and Roblox so we aren't talking about iation much right now we too early in in the journey uh well your series D and Mike is series a and he was willing to it's the benefit of being CEO who's gonna yell at me exactly all right there you go no it's not somebody's somebody's going to yell at me just uh I want to approach it slowly um thing is We Trust uh creators to make informed decisions about how the best uh to monetize their experiences so we don't want to have any any kind of Engagement based uh payouts want people to be able to decide well this those are the things I want to charge for in my experience and that's how I'm going to make money and uh we also want to like us an a check system just uh splits the money into into buckets one is a bucket for the Creator and another one is a bucket for the platform uh we want to split into three buckets so it's going to be a bucket for the original Creator

bucket for the platform and a bucket for all the creators that contributed to that particular experience so if you're uh making a experience a video game inside of everywhere and you use a bunch of stamps it's going to be a bucket that is fixed as as a portion of Revenue that's going to go to everyone else the idea is that you don't have to worry about using ever ever using about other stamps or about a budget for using other people Creations take as many as you want it's always a budget allocated for that you don't have to worry about that you don't have to worry about anything you just just make the best experience you can and we will uh apportion the revenue to everybody who contributed to your experience I think Sergey brought up a very important point which is creators know how to monetize stuff and they're much more experimental with it than we can be uh you know we did some monetization experiments and we were surprised by what we saw so what people were the most excited to monetize about was hey make me a custom character in

your game or hey this portion of the level can you redesign it for the obstacle course to be like this I will pay you for it that did incredibly well right so as much as possible we want to leave it to the creators to figure out what and how they want to charge for it we just view our responsibility as providing the payment rails and making sure you know there's no money laundering and scams that's important we have to compli for example so in our case we would not allow random base mization because gacha boxes are regulated in multiple countries but other than compliance I think creators should be able to do what they feel is right for the games that would be a big departure from Roblox there's uh many many random uh randomized rewards in in Roblox well don't don't tell The Regulators they're going to go after a bunch of 13y olds soon um cool so you know just wrapping up

like what are the key Milestones that you guys are looking at in the next year um what or or longer like what sort of on the horizon that you're really working towards we just we wrapped up uh a big play test in June uh we were kind of testing out the core pillars of our flywheel um we're very happy we saw all the data we wanted across both play creation and the ability for creators to monetize so now that we've kind of we've confirmed our approach we've confirmed that it works and that the core pillars are are in place it's about adding in more game content polishing it and then polishing up the tools so that they can be broadly exposed we're hoping to hit Early Access at the end of next year or the first half of 26 so it'll be heads down grinding until then we just launched a Builders beta about a month ago where we gave access to our tool set to select Builders you have to sign up on the weight list to to be able to

access it we will stay in Builders bet for a foreseeable future until we are confident that Builders creators can create uh competing um experiences in everywhere and once we are confident that it's a case we will slowly and gradually open it up to uh the players in stages we don't think that we would go with one single launch and it with a big bang like I said we want to slowburn we want to gradually grow the ecosystem because there's a big risk in my opinion and attracting too many players into a free play game and just Bing through that because you can't uh you can't retain that I think it's more important than that people are having fun and retaining than it is to have multi you know many people in the game any predictions for when the public will be able to First access everywhere I mean if you're smart you know like sneaky enough you could probably you know get in right now which just pretending to be a builder uh but

uh no I don't I don't want to give any any any timel it's really is all depends on on uh where we feel the builders beta in the stage where we can open up open up to the audience cool and then uh just in terms of being able to track your guys' progress over time what's the best way for people to follow you um probably the easiest is to follow me on Twitter I'm trying to be better about posting updates about what we're doing so it's very easy it's at Mike adamus yeah uh we have uh Tik Tok and Twitter and Instagram accounts so everywhere game is some all all there and we have a really good like if you're Builder we have a really good Discord if you go to everywhere. game um just going to be link to uh right now it's primarily for Builders again it's it's mostly for people that uh just trying to build stuff um so if you're a builder just you know feel free to join Discord and feel

free to join the Builder beta if you're not a builder just follow us on social and uh you know we'll tell you when we're ready for you yeah and don't email Sergey directly because he will not respond I know from firsthand experience sorry about that just pulling your leg uh thanks so much guys for joining the call this super interesting conversation um and uh I'll I'll Beach following you guys all along the way excited to see how you do thanks for having us if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a five-star review and if you want to reach out or provide feedback shoot us a note at podcast nov. or find us on Twitter and Linkedin plus if you want to learn more about what novic has to offer make sure to check out our website www.nic.edu you can sign up for the number one games industry newsletter navic digest or contact us to learn

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