Epic CEO says AI disclosures are bad, Sony Says Disks are Dead, and other Shenanigans | Design Club

[music] [music] Good time zone, internet. Hello and welcome to Design Club, the only game design show on the internet that spends an egregious amount of its pre-show arguing over the etmology of the word poare and whether or not it is appropriate to use it for today's grabag shenanigans episode. I am your humble host, Will, joined as always by my pal Jeff. Say hi to the people, Jeff.
Hi to the people, Jeff. Hey everybody, I'm Jeffrey Zack in the studio director of Extra Credits and longtime game designer joined as always by my friend and co-host of Will Voice the People.
Hello.
And today,
yeah,
normally I'd say today we're going to talk about topic, but we're going to do one of our favorite again, which is we're going to talk about topics.
Yeah. with that S being important because things have happened in the game industry in the past four to six weeks since we last kind of did an update the

previously titled corporate shenanigans and this is what was this one game industry shenanigans.
Yeah, game industry shenanigans cuz it's it's all kinds of stuff going on
and we're not even getting to the one that happened yesterday. Um
yeah, that we need time on that one cuz we planned this episode
dating this. Yeah,
it's July 7th, 2026. So, sorry. Go ahead, Will. Um,
yeah. So, uh, some some behind the scenes in order to tell people at breakfast on Friday what design club is going to be next week on Tuesday. We're planning it a little further in advance. So, we didn't get a chance to include yesterday's Xbox news, um, which is
which briefly was a lot of layoffs. a lot of layoffs and a lot of studio either redistributions or closures or sales or and there's just a lot of stuff. Um, and it's messy and it's bad. Uh, but we

haven't really had a chance to digest or talk about it yet. So, that won't be on the poker list. Um,
yeah, but
sorry. Well, didn't mean to distract you on that one, but
No, no, it's quite all right. We do have a list of five stories for you today. Uh four reasonably major ones and one sort of like little one like little like little update one. Um so uh and and we should also clarify some of these overlap broadly with the topics that Matt and I talked about on breakfast,
but
some do not.
Some some do not. And the goal here is a little different than it is on breakfast. on breakfast. It's me and Matt and we're riffing and it's like it's it's very consumer sided takes. I want to pick Jeff's brain about the industry impact of some of these in a way that maybe we won't we weren't thinking about when we were doing breakfast, right? Because that's not Breakfast's goal. So, we're going to be even if we're talking about say how

Sony is going discless, we're going to have a a different content to the conversation and a different bend towards where we're talking about it cuz it's it's like full-on frozen. [clears throat] It's it's
it's full on what?
It's full-on frozen. I'm getting like seconds of of playback and then it freezes again on YouTube. It's it's real bad, actually. Um, I'm just wondering if we want to do this today or wait for YouTube to figure their stuff out and do it another day when we can get the VA up.
I am good either way. Let's Let's turn off YouTube for now and we'll we'll keep going on Twitch and if we want to rehash some of these on YouTube, we will. But I will still have the recording on hand if we want to chop it up later for stuff.

I think that's the plan.
Oh, hold on. Let's see. People saying it just got unstuck.
Did it just get un All right, cool. Hold on. Let me Can I Can I go live? Yeah. Okay. Yeah. Okay. That's so weird. All right. Well,
if you just went through a bit of an error.
Yeah. If you're watching this in the VOD, this is one of the downsides of doing this as a live stream. So, sorry. All right, let's Yeah, let's let's keep
Wasn't us was YouTube. All of our chat is happily saying, um,
yeah, you you YouTube h is having a normal one. Oh, I got to put this behind that. Uh, yeah. Okay. Um,
yeah, we're we're live.
Okay.
All right.
Hey, everybody. Welcome back if you're doing it. So, hitting this up again. Topic number one for today. As of July 1st on the official PlayStation blog announcement, we have physical disc production ending in January of 2028 for

all new games releasing on PlayStation consoles.
Yes.
Um, the all new games is an interesting thing, Will, that I want to come back to at some point.
Yeah.
But, um, this has a whole bunch of implications. Yeah, it does. So, uh, and we'll talk some about what those are. Um, I'll tell you, I'll give you I'll give you the brief and then, right, so this released on July 6th,
and the internet has spent the last six days collectively dunking.
July 1st.
Yeah, July 1st, excuse me. Um, uh, the internet has spent the last six days collectively dunking on Sony. Um, it got so bad that Sony uh went completely silent on all social media platforms for 24 hours when they realized that it was absolutely impossible for them to say anything. Which means that they have taken Will's formerly patented now open sourced class on sometimes the best move is to shut the hell up. Um, because there was no way this was going to go well, right? And I think they knew that,

right? So, lots of
I don't think they expected it to be such a backlash. I I think they didn't expect it to be such a backlash, but I don't think they I think
I think they thought there would be push back. There's push back and there's hey, let's keep pushing until someone falls off a cliff. Push back. Yes.
And it feels like it's headed towards that.
Yes. Yeah. Yeah. I agree. So, uh let's talk about those uh those implications for the industry. Jeff, what what when when you hear this as someone who's worked in the game industry for as long as you have, um what's your first thought?
So first thought is
it's been a long time coming. Yeah.
So actually let's lay some let's talk about some things that just at some point will were always going to be true.
Yeah. I back as far back as 2005 when I was running my game research studio, I began tracking because that was the beginning of the third generation of

consoles, the PlayStation 3, the Xbox 360, and the Wii. The first generation of consoles that all had hard drives and all had built-in internet connections.
Yeah. Gen seven. So that you said three.
Gen seven, right? You said three,
not gen three.
Oh, gen the PlayStation 3, Xbox 360, and Wii. Yeah, our gen 7. Yeah, keep going.
So that is actually 20 years ago.
Yeah.
And back when I would do my talks at the game developers conference every year with data, I would show the percent of sales that happened physical and the percent of sales that happened digitally.
Yeah.
Because it was the first time digital was an a viable thing because everybody had hard drives. Everybody had a connection for this. You could sell a game digitally on a console.
Yeah. And initially the numbers were like bar graph bar graph and you'd see them year by year as the physical slowly shrunk and the digital slowly went

y
up and I believe the last time I did it in around 2016 cuz that's when we sold the company and I didn't have access to the data anymore to go do my talks that it had I don't think it had quite reached parody but it was close that was a decade ago
and now uh I believe there was a recent Capcom report. So, one publisher, and granted Capcom has a whole bunch of different like it's Capcom suite of games, so do keep that in mind. This isn't fully representative, but it is a data point. Capcom said it was about 937 to digital.
Yeah. And one of the things skewing that number is the enormous backlog of games that publishers can keep selling now that they weren't used to.
Yeah. Capcom before. So, how retail works, if you go to a Walmart, a Target, a GameStop, any of the places that stock physical, they don't have unlimited shelf space,
right?
They have a limited amount of footprint

of how much the games they put in. And they want to put in the the things that they will sell the most. Yes.
In the shortest amount of time so that they can then replace those and sell more of them.
Right.
Same actually if you go to Costco, any of the places that has physical. So it is not in their interest to keep obscu copies of obscure games that they might sell one copy of every two years,
right?
And so because of this, it takes a specialty shop to hold that kind of physical media. So if we were talking about Capcom, you couldn't go buy at a game store, a normal store that sells games, uh, a 8-year-old version of Street Fighter,
right?
Or any of, you know, the whole realm of Capcom stuff. Once we had these digital marketplaces, Capcom could keep their entire back catalog up and selling. So like that 93 to 7% or whatever you'd said is disproportionately also skewed by the fact that Capcom is still selling their whole back catalog of games but only digitally,

right?
Because physical stores won't carry that.
There are more SKs for digital than there are for physical, right? Because of all the limitations of physical goods.
Yeah. And just because we've had a thriving game industry now for you know over 40 well over 30 years for thriving possibly longer depending upon how you measure it
right
and that means that all of those titles some people are still interested right
like look at our Steam back catalog our Steam libraries and all of these other things so that number is a little bit suspect on its initial thing when you think about it in context
purely because of that back catalog. Sure,
but also everybody's looking at that and you know Sony has now been selling these back catalog titles for 20 years digitally and it's great. They don't have to print discs or excuse me for stores. Let me also talk about when in the olden days when you finished a game

you got something called the gold master.
Yep.
This was a disc or a set of discs depending upon how big your game was.
Uhhuh. And this was the thing you sent off to basically the printer for them to go manufacture tens, hundreds, or tens of thousands, hundreds of thousands, or even millions of copies of that one disc, the Gold Master. We did a lot of testing because you can't patch a disc like once you got a hard drive, you could start doing this. So you could have your day one patches which are pretty much ubiquitous now to the point where in some cases some games only give you an installer on that disc and then everything else downloads down. But physical media requires the gold master. They get shipped off to special places that can make PlayStation or Xbox or you know these kinds of things and they print a lot of them. for the publishers. Every disc that's printed, you pay Sony

or Microsoft or Nintendo money for it. It's not every disc sold, it's every disc printed. Those then get shipped, which so printing costs money. The royalty costs money,
shipping out to all of the warehouses,
store the games costs money,
which then gets shipped to the individual Walmart, Target, GameStop, etc. And since then they have the limited space and you have to keep restocking them. You have to deal with from a publishers perspective, you have to deal with returns which GameStop then wants to sell instead of Capcom getting to sell a new disc. So there's a whole bunch of things around physical media that most people making games aren't actually they don't really like. Like those are all big extra costs. Digital is easy. You upload the latest version up into a place in the cloud that stores it. You can update it with a new patch so the consumer always gets the latest thing.

Y
and down it comes.
Right.
From a consumer perspective, however, we like our discs. We can hold them. I can see Will and lent him my copy of whatever game it was. I know nobody's going to turn We'll get to ownership in a second. I know nobody's going to turn off the digital thing. I have a physical copy of my game,
right? This is great. And also from on a console standpoint, it costs money to put in a DVD, Blu-ray, whatever player
drive
in there. It is not an insubstantial amount of money. Um, from a console perspective, so this was always going to happen at some point.
There is no world in which at some point the consoles were like, why do we need physical media anymore?
Right? It's like when you buy a computer nowadays and you're like, "Wait, my last two computers haven't had a CD drive."
I literally cannot remember the last PC that I built that had a disc drive.
Yeah. Which used to be the thing. You might even have two in your computer.

So, you could be like copying or referencing two things at once or like this was a thing. So, this was always going to happen, but it's happening now and that's the story. So like from an a back industry perspective, nobody really likes the physical part of the media that much except strangely enough maybe Sony
because Sony got that royalty per disc printed,
right? Um, so that also tells you how much of an incentive they must have had from somewhere else to get rid of that system because that was guaranteed money and if you printed too many that was guaranteed money for Sony still or Microsoft or Nintendo,
right?
So something went over the tipping point for that. But game storage is a thing we should or like preservation we can talk to. But like this is just from a news perspective. This was always going to happen at some point,
but it's happening now.
Yeah. It like I think I think it's

I think it's likely that their usage statistics for the PlayStation 5 and the um number of secondary market or the number of add-on disc drives sold for the PlayStation 5 have given them significant data into how many people are actually playing games physically versus digitally. I think that that piece of data is something that only Sony would have access to. And I think they're seeing that the cost of developing in the disc drive and selling because Sony has to sell the disc drive first, right? And Sony's not selling the disc drives for the install base. No one's going to print the discs, which means Sony's not making the money on the discs.
So Sony has to upfront the cost of making the console play discs now, right? when they're perfectly happy selling the disclos PS5 Pro, right? Um, and I think that may be part of it.
I actually wonder, will

they never said though, at least in this short press release, I think, that future PlayStations wouldn't have disc drives.
And that's an interesting question. I am of the opinion that this heavily implies that,
but you are correct that they do not say it. Because one of the other things to consider is Sony and Microsoft since the seventh generation of consoles in 2005 and six have both had a war to what they say is control the living room. Both of them want to be the central thing sitting next to your TV that you play your games on, but also you play your movies, your DVD players if you still have CDs. And nowadays with the digital that you know hooks up and you can stream your movies through it, you can watch your YouTube like they want to be the thing an have or have wanted to be the thing anchoring your living room because that lets them continue to sell like it sometimes it's hard for people to say oh I'm spending this much money just on a game machine but if it's a game machine that also like I remember

buying a PlayStation 3 because it was a cheap Blu-ray or it was a blue Blu-ray player. Yeah,
that was Blu-ray players cost the same as a PlayStation 3. And I also got a gaming console.
Yeah. Why wouldn't you get a PlayStation 3?
Yeah. Why wouldn't you get a PlayStation 3? And so there's kind of that aspect too that if they're going discless, it feels like that they think everything's moved entirely digital. And that may be true that there are no longer enough CD, Blu-ray, other sales for them to justify that component of their strategy. And again, I like I don't have the exact numbers. I don't know. But it feels like that also must be a cultural shift.
Yeah.
For them to say that that they think that isn't a value added enough anymore to convince people to buy.
Yeah. 100%. So, I I also have um I I want to like I don't want to spend too long on any one of these topics because

we've got many of [clears throat] them, but I do just want to uh and let's talk about a a weird place where we're going to be able to see the difference maybe.
What is the PlayStation section of a Target or a Walmart going to look like after this? Right. Like
that's a really good question,
right? cuz they they will probably still sell the hardware,
right?
There's a chance that it all turns into gift cards.
Okay.
Because one of the things we I also happen to know from running a game research studio for a while is that a lot of games are still gifted. Yes,
games are expensive enough that especially for kids, teens, or even adult friends, um they are often given as gifts, they are a nice gift to give. It's really hard to give a gift to give something digitally. If you're say grandma, you probably don't know your

son's Nintendo account
or your, you know, son-in-law's or daughter-in-law's Xbox, you know, player name enough to hook up and buy something digitally on the store to get it sent over. But if you're cruising through a Target in the game section and you see Call of Duty and you know Junior plays it, you can pick that up and walk with it to the cash register. So my guess is even if digital is huge or delivery is huge, we will still see a physical presence and it may shift all to gift card size or stay as boxes. But I could see a world where you go in and the stores especially would love it if instead of a box being yay, they trunk to like the yay gift cards.
Yeah. because they could probably fit, you know, 40% more or actually probably actually double actually thinking of both dimensions, double the inventory in there and they're not going to run out.
Yeah.
In the same way,
I I would imagine you can stack three

gift card envelopes in the same depth
as a box. Not to speak of how many more rows you can fit, but yeah, it's it's wild to me, right? because and I think we're more likely to see something that's like the switch size case, right? Perhaps um but this also means and this has been true for a while, but I think it's worth getting on the table.
This means box art's different,
right? This means that like
you'll still need key art.
You'll still need key art. You'll still need a place to put the ESRB information if that's a thing that [clears throat] matters to people, right? because you'll need a place to put the rating and why it's that rating. So those are key components of components of physical packaging from anformational perspective, right? Um and so we might see something more along the lines of the Switch cases, which are much narrower. They're not thinner, but they are narrower. So something like that may may happen. Um but game booklets totally

gone. They were mostly gone. Let's be really honest. The booklet was gone a long time ago. You remember it fondly. I remember it fondly. I remember to take ibuprofen this morning. Did you remember to take ibuprofen this morning? Great. Okay, cool. We're all getting old. Um, but the booklets are totally gone. And and this is this is what we're left with, right? And it's a very interesting notion to me to put forward that this is a that like there have been many changes in the landscape of gaming, but the places where we buy them have looked pretty similar all things considered. since I can remember there were shelves of games in shrink wrap that you you know behind the glass in a lot of cases where you had to go get the person, right? And maybe you remember the controller that was always too low for the television that was always too high and you hurt your neck playing in Walmart while you were waiting for your mom to get the thing, right? Or whatever, right? But I do think that

that is going to be the place where we like
Yeah, I think it is still too valuable at this point for things to have a physical presence based on the amount of things that are gifted and impulse purchases.
Yes, I agree.
It's Yeah,
both of those are valuable. And I'm going to be curious to see what the revenue split becomes like. Do does Walmart still, you know, mark it up? you know, they they demand that you give it to them for 30 and they sell it for 60 kind of thing. like I'm curious because also yeah for there there's lots of questions that this may evoke or will evoke at some point down the line but it's not surprising news but I think the backlash is even though people have been getting games on Steam digitally for a long time they feel a console kind of part of the value of a console is it's the thing sitting there that you can buy your

games in different places and play it. Yeah.
And taking away one of the ways of owning the game, especially when digital ownership is weird in some cases, like if you own digitally through the Sony store, does that mean it will play on the next generation
of hardware?
If not, are like, do you keep your old one?
Does your old PlayStation 4 still run 10 years from now? If not, does that mean you've lost access to those games forever? Like,
yeah. And it gets even weirder, right? Because Sony the very same time uh removed
three days before.
Yeah. Like three days before removed access to 551 movies from the Sony catalog because there was a contract negotiation failure between them and a movie publisher,
right?
Movie rights is more accurate. So and

and those
the weirdest here actually will do we know for sure did they remove access for buying it? Did it stay in your catalog or if you had it in your catalog it poofed as well?
Poofed.
So the thing that I purchased digitally went away because Sony's contract lapsed and there was something hidden in the fine print that said if this happens sorry. Yeah, that is my understanding of the way that occurred. And I may be wrong on that, but that is that is the way that I uh interpreted it when I prepped that story for breakfast last week.
Yes.
And it's interesting. I have a less extreme version. Like every once in a while, I buy a decent amount of Audible books. I like listening to books.
Yeah. I have bought a couple that where they've decided they needed a new edition or new recording of it where the one I bought is suddenly like I will see a title I own listed again as a store on the store listed as unbought and I'm like wait I have that guy Gabriel K version of Tagana and I look and actually this is a new recording I can't

see my old one anymore unless I go just to my catalog it still lives where I can listen to it but it feel like I can't see that anywhere else and
and and this is part of the problem, right? As as Chad is um correctly uh pointing out, right? The thing that I purchased digitally is for most services a license,
right? It's not it's not a it's not the same kind of ownership that people assume holding a physical disc grants them. Mhm.
But the fine prints has said for a while that the physical object is also a kind of license, but it's impossible to prevent people from transferring that license unless you do like activate once DLC and uh Mass Effect tried that. It went over like a lead balloon. So that was not a great plan. Um but it is true that right that it is a different we don't need to worry too much about

like what all of the exact technicalities are but there are two kinds of I paid money once to access this thing for a long period of time
right digital and physical and the differences between them are pretty big when it comes to preservation transferability all those questions that Jeff asked about like legacy consoles and the next console. Those are all really big questions that are just kind of like hanging there.
It's actually not just that. It's also the game. Like, well, if you own say Diablo I
physical, you can play that forever. But if Blizzard ever shuts down Battleet, all of your online play version for that game goes away,
right?
Like, so you own different components. You know, if if you've invested $900 in skins on League of Legends and Riot shuts down the game,
or say if you own $900 skins in

Overwatch and somebody sh shuts down the game so you can have Overwatch 2, like these are it we are in a weird world of ownership and rights and digital rights in production.
Yeah. And this is one of the the I guess the wish lists, right? is that if Sony's going to do this, and it makes sense why they're doing it. We may not like it, but I think Jeff's 100% correct that the data has been pointing in this direction for a very long time, right? It makes a kind of sense. We don't like it, but I can definitely see the line of reasoning behind it is no longer cost effective to do this for a decreasing portion of the population. And I'm sure they chose January 2028 for a reason, right? Um, but uh
notice by the way it's January. Like they pushed it out like look it's a whole another year. You know this makes it feel like it's actually further away than it was. Like this isn't you know

November 2028.
Yeah. No, it's Yeah, it's it's the beginning of the year. So it's it it's like a year and change away. It's not like two years away and change. Yeah.
Oh, wait. No, it's gone. I had a thought. It was a good sailing thought. All gone. Nope. All gone. Okay, that's fine. That happens sometimes, especially when we have a stream with tech problems, because then I get anxious for the rest of the stream.
Are they Are they popping back up?
No, I'm just checking to make sure they don't pop up. Uh, and that takes brain power. Um, uh, yeah. And and this is this is a very good Yeah, probably do a last holiday sale to get rid of old stock. Yes. Mhm.
Absolutely.
Oh,
yeah. And in some cases, these are going to become collector's items. But the other one to think about, too, is Sony or somebody will probably sell plug-in hard drive or excuse me, plug-in disc drives like we used to have those. Just because it doesn't ship with one

doesn't mean it won't be an accessory. Like there I my guess is this isn't as harsh as it sounds off the press release. But also, I think this also shows how much people like having something like a PlayStation in their living room that they can slot discs into and movies, you know, DVDs, CDs, Blu-rays, all of the stuff.
Yeah.
And that they're not ready for that to go away yet.
Yeah. I also think I remember what it was. I think they could have headed off the backlash if they had announced that they were going to come up with a robust, honest to goodness, digital ownership model
to go along with this. um that would have answered because okay so objections to pure digital have several forms right one of them is um archival right that's a reasonable one historical we've lost plenty of games industry stuff one of them is um [snorts]

uh and and one of them is like the legality of ownership right the I don't trust corporations and they're gonna pull the stuff out of my library Right. And then there's [clears throat] also the rights package that comes with ownership which so like there's archival, there's like personal retention and then there's uh rights, right? The right to resell, the right to trade, borrow, buy, you know, whatever. Um, and I think if they if they had a robust digital ownership model that tackled the second two, people might be more okay with it. But they haven't shown any interest in doing that because I do think that that is possible. I just don't know if they care enough to spend the money doing it un until people make a big enough stink.
Okay. And this may actually like if I was Sony and really thinking about this actually I would tr honestly I would trust Microsoft to do what I'm about to say better than Sony.
Sure. But, you know, if Microsoft is, and they, believe me, they've had their

console issues, too. But part of what they're aiming for is Xbox is a concept like Steam. Like, I have much more confidence that the games I bought on the Xbox digitally will remain playable for the indefinite future the same way they do on Steam. Because once you kind of have that virtual thing driving and running the game, your hardware in some cases becomes short of like overclocking and some other things where we've seen people tie frame rates to clocks and things like
those are always wild to play on new computers. [laughter]
Yeah. But I have more confidence in Microsoft because of their base and everything to if I go buy Fable on there to be able to play the old Fable, the you know Fable from 10 years ago and the new Fable all 10 years from now. And I think if Sony had announced that they were really going for some sort of system to let you continue to play your entire catalog of digital games on all

PlayStations moving forward or even say, you know, we may we pledge to support games for 20 years after they come out and probably longer. But, you know, we're throwing the asterric on there because who knows how things change that people would be a lot less up in arms.
Yeah. But
Sony doesn't have a huge track record of a big digital library.
Yeah.
They're not a software for studio like Microsoft.
Yeah.
And they just delisted a whole bunch of movies,
right?
Like right before this, showing people what could happen,
right? I also want to address this. Uh Christopher correctly points out that GOG does digital ownership.
Yes. Asterisk.
Yes.
Yes. you can download the installers and all the media to have a full way to do installs of games that you purchase on GOG. I don't know if it's all games, but I know it's the vast majority of games on GG and that it is a major selling point. And GOG is,

while I love what it's doing, isn't really in the conversation, right? Like yes, people could emulate it, but GOG isn't built to take on the responsibility of being the model for one of the big three doing digital ownership. Like they could, yes, but what we need is one of the big three or Valve, big four, one of the big four to take it on and do the um and do the work of creating their own digital ownership schema. Because while GOG's works, a doesn't work for consoles and b they aren't big enough to be wellnown enough to like I I'm willing to bet that if you asked most people on the street which of the following they'd heard of, you would get yes for Sony and Nintendo and Microsoft and maybe for Valve and no one would know what GOG was.
I would bet if you walked into the game

section of a Target, Walmart, etc., you would still have that super high ratio.
Correct. And we have we have um above average exposure to that, right? Because we're nerds on the internet talking about the games industry.
Right.
Right.
As one does.
Yeah.
Um quick um throw up this one. I I don't think this is actually them chasing anything with AI. Like I think they're very happy to have to continue to have and monetize their back catalog. Like this is a thing that basically takes them no extra work or excuse me minimal extra work and they get to keep selling. Like back cataloges are great.
Yep.
So this this is one of the few not few things. This is a thing I would not blame on AI. I I would blame it on cost cutting and just how people are interacting with things currently.
Yep. I agree.
Doesn't mean AI is not the source of other problems.
Yeah, absolutely. But yeah, so like this was a big announcement. I'm curious to

see in another couple weeks as we do an update because we come some do updates here if there will be an update from Sony.
Yeah, it it'll be very interesting. Okay, speaking of updates, let's talk about our next story real quick. The Craftton lawsuit. Jeff,
hi.
It's over. Finally, it's finally over and it looks like Unknown Worlds has won everything they wanted. Um, well, most everything.
Actually, I'm a little surprised, but I am happily surprised. And, um,
yeah. So,
so quick over, excuse me, quick overview of story.
Yeah.
Crafting developers of Subnotica.
Unknown worlds developers of Subnotica. Craftton publishers.
Sorry. Say that the right way, Will.
The developers of Unknown World, the developers of Subnautica 2, Unknown Worlds, had a deal with their publisher, Craftton, for a giant bonus that was to

be paid out upon success of Subnotica 2,
or release of Subnautica 2 by a certain time date, hitting certain milestones, and then paid out on its success.
Yes,
the this did not happen. and the developers
actually no shortly before release
correct uh
Craftton did a rug pull said oh it's not good enough um we're kicking out the current management putting in our no new people oh and because of this that huge amount of money that we owe both the owners and the employees you don't get excuse me the owners who had said they were going to give it to the employees
correct
um just just to make that clear they um there was a funnel through act.
Yes.
But uh we don't think it's good enough despite all of these other things. We're going to try paying you a huge huge amount of money because we're able to pull this shenanigan.
Correct. So the CEOs

sued the CEOs of Unknown World sued
the original ones. the original,
correct?
Um, and this went to court and then some stuff started happening when Discovery happened. So, if if you've never seen Discovery before, Discovery is where
both sides go, "All right, so we allege this, so we need you to give us all of this evidence
that does or doesn't point to that may or may not uh corroborate what we say you did." And this can include things like internal company emails, text messages, documents,
Slack,
things that you would not normally want to turn over. It still is required for discovery.
Yeah. Yeah. So, as part of Discovery, some Teams messages got released that showed the Craftton CEO talking about how he had been consulting

with Chad GPT ways to not pay this giant bonus to the Crew of Unknown Worlds. And also the messages where he ran it by his legal department and his legal department said, "This is stupid. Don't do this." and he went, "Nah, I'mma do it anyway." So, that was a fun part of discovery. And now we've gotten to the find out phase of the trial. Um, which is where we're not going to have a trial. They're going to settle. Uh, and generally what this means is Craftton knew that they were going to lose. They were going to lose a lot of money based on the amount of money they're paying Unknown Worlds right now.
Um,
plus legal fees and possibly having to pay the other side's legal fees as well. Yeah. So rather than the all of that, they opted for let's just pay now.
And there's probably some extra things they got out of that like the ability to say, "Oh, no, you know, we didn't actually make a mistake. It was just a

misunderstanding, but here's a large pile of money anyway."
Yeah,
there there's a lot of We don't have to admit fault.
Yeah.
That gets written into these things. But
yeah,
we'd have to see the final thing. But the good part of this, Craftton has agreed to pay bonuses to the entire staff of Unknown World. So, it's no longer funneling through the CEOs. It sounds like um the interim CEO that Craftton put in is out. And um the quote here, the bonuses will be paid in three annual installments with developers of Subnotica 2 to be compensated significantly more than originally agreed, including those who joined the studio recently. So, hey, by the way, Brian, if you happen to be watching, congratulations. I have a friend who's on the dev team who I've known for a while.
Yeah, this this is this is a massive win for the devs of Subnotica 2. is, hey, it turns out you were right. They were

trying to screw you over and now you're getting more money. And also the bubble effect that this had on Subnotica 2's release of lots of people who were upset at Craftton and who wanted to prove that the game was good and that, you know, they wanted to play it was huge. Subnotica 2 got a giant boon out of this and the developers made more money. So, if you're a dev of Subnotica 2, this is maybe not the best ending, but a pretty dang good ending to this story.
It's a good ending, though, to the amount of pain they went through because
I've actually done development on a title where the people holding the purse string started arguing when it was multiple companies and all of the
I I'm just going to say all of the that rolls downhill from that.
Yeah.
Makes development, which is already hard.
Yes.
So much harder.
Yes. the amount of extra things you can do, you can't do that you're underfunded for the decisions that get changed like
Yep.
It takes an already hard thing and it

exponentially multiplies the difficulty.
Yep.
So, they're getting a good payout, but they also probably went through a couple years of really bad just development and corporate stuff as well as their families. Yeah.
Because this probably ended up requiring lots of overtime. Yes.
And lots of other things. And probably some people left the company just because they couldn't deal with it. I mean, there there's going to be a whole range of stuff.
Yep.
So, I feel very good the developers are getting this and that Craftton is getting the slap and that maybe this also shows some other groups don't f around. Like, just
hey,
pay the thing you contractually said you were going to pay.
Also, just here's a freebie. Here's like a freebie on top of that one.
Don't plan your legal strategy with Chad GPT. YES.
WILD. WHAT A WILD IDEA. YOU HAVE A WHOLE SUITE. You have a whole department full of highly trained, highly paid lawyer

sharks. They're hybrid lawyer sharks. It's Craftton. This is not a teeny tiny group. This is Craftton. They have lawyer sharks. And they were like, "No, I'm not going to listen to the lawyer sharks. Full speed ahead, idiot." Like, I don't Anyway. Anyway,
yeah. [sighs]
And if you're gonna do it like use an incognito browser or like a
Don't talk about it on Teams or like
Yeah.
Yeah. Yeah. Okay. Anyway, let's talk about more CEOs saying more things about AI. So Tim Sweeney has gone on the record on a matter that has become more and more relevant recently, particularly in the wake of the last Steam NextFest about disclosures for use of generative AI tools on Steam. So, if you haven't shopped on Steam recently or haven't noticed these on

Steam, Steam requires that if you use Generative AI during the development process of a game that you add a disclaimer that normally lives at the bottom of your uh Steam page, lives all the way down at the bottom next to um uh technical requirements that says
keep going. So, I'll be right back.
That that says that you use generative AI and in what ways you use generative AI. This is very unobtrusive by default. Uh there are however browser add-ons like the one that I have when we're browsing games for stream that bring it up nice big and center and say, "Hey, this is the disclosure for this game." Um, this uh reached a great deal of prominence when during Steam NextFest, people started seeing that a significant portion of the games uh that were being demoed at this summer's NextFest all had AI disclosures. A far greater proportion than those that had had previously. Um,

so that's that's why this is uh super relevant. Um but uh and and yes uh Dogbert is correct. Those disclosures have led to a reduction in the number of reviews on those games um which we are using and which this study uh that dog is mentioning uh is used as a standin for total number of sales because sales are a hidden statistic and reviews are not. So they are taking it to be that a game that has fewer overall reviews has fewer sales believing that a similar
strong correlation
there's a strong correlation between number of sales and number of Okay, great. Excellent. Awesome. So that's what steam disclosures are and that's why they're much important right now.
And then Tim Sweeney has has has long um been a proponent of AI and gaming. He's one of the forces behind Unreal Engine's Next Edition having full AI integration.

Uh, and the Epic Game Store does not require this uh disclosure in much the same way that well, they require disclosure for NFT games, but they've been okay with crypto games and Valve banned them outright a very long time ago. Uh, several years, many years, I think, in fact. But they're still hanging on on Epic. So, um, Sweeny's quote, uh, is that, uh, the disclosure is really irresponsible. And I'll I'll read, uh, I'll read further. It's unfortunate we're in this situation. It's unfortunate that so many developers now are put into this position. If you want to launch a game and get it as widely published as possible, you've got to put it on Steam so people can wishlist it. And if you want to play it on Steam, then you have to get this scarlet letter of AI attached to your product. Now there's a hater community trying to kill the game. I think it's really irresponsible of Valve. They shouldn't do it because it makes it much much much harder for a game developer to have a chance of success. You have to choose from either

not using tools that can make you way more productive and probably failing due to competition that does.
And he's approaching it from a different way than I think a lot of other people are.
Sure.
And I have really mixed feelings on this.
Sure. Because a I've made a lot of games. I like making games.
Yeah.
But, and let me say this before people judge.
Yeah.
Game developers use tools.
Yeah.
My first commercial game, EverQuest, we were working in a game engine that was being built as we did it.
Sure.
Our set of tools. Nowadays, we could use Unreal or Gau or Unity or Lumberyard. like there there's a good amount those are tools. I remember editing photos by hand or graphics. I remember starting to use Photoshop. I remember all of the stuff that photo or the stuff Photoshop does now that I used to do by hand.

Sure.
Drop shadows, strokes, background removals. I mean, there are things that used to take hours that I can now do in the touch of a button with a set of tools,
right?
The same for Illustrator. I remember using a typewriter. I remember my first word processor. I remember the difference between not having to go block out like erase letters on a physical typing. Like our set of tech tools
have progress steadily over the years.
Yes,
certain parts of AI are awful and sloppy and their sourcing is bad. There are other uses of AI tools that speed up parts of development. Code review can be really good. some uh data collection, aggregation, looking at your internal stats, um honestly bug hunting, bug hunting with AI tools and things that used to take us weeks might now take 2 minutes, right?
Like there are some really significant tools and because there is no

differentiation right now on used AI or didn't. There isn't this granularity. If I published a game today, I might have to market because I used Photoshop has a AI built in. Google Docs has AI built in. I mean, so part of what he's also talking about is there is no granularity.
Yes,
there is I used it or I didn't and it's AI is getting put into every tool we use.
Correct. And I think this is an ex exactly one of my feelings on this. One of the main problems is the dilution of the term AI. And I think that Jeff, your point is I'm 100% with you on this point because there are some really great machine learning tools which
many people would colloquially call AI that are not susceptible to the same problems as large learning models, right? You can build an analytical model that is very narrow, very specific, very

energyefficient and very not made on data that was taken, not made on information that was taken from people without copyright holders consent and use that tool to accomplish really powerful things, right? Um and and that's been true for much longer than LLMs have been around or AI has been a buzzword.
Yeah. And the game industry always has been a tech bleeding edge tech is what drives some of the game industry. Yeah.
The fact that you could have five person teams now putting out some of these amazing games is because they have good tools.
Yes.
And so we don't want tools to go away. What we want is responsible use of tools. And part of the problem Tim Sweeney is also addressing but not saying is if Rockstar decides that they're going to use AI for Grand Theft Auto and if Activision does for Call of Duty, people are still going to buy those games.
Yeah.
Like people love them too much and those things and you're going to get this situation where large groups can empower

themselves even more and smaller groups face the backlash. And you're also going to get this weird broadening like this is a very this is a surprisingly nuanced issue
right and and what makes it harder right is uh Christopher is correct disclosure is specifically about AI generated content not tool use
and yet
that's not always how it's being used and you can argue that it's being used improperly but that is still how it's being used like people are needing to overdisclose right? Rather than underdisclose because if you underdislose, Steam has shown that they can and will pull Black Ops from sale and refund anyone who asks, right, because they did not disclose, right? So, underdisclosing is a risk, right?
A large one,
a very large one. And the other problem

is that um the consumer both con the consumer base and the people making the disclosures sometimes do not understand this granularity either right because it's not a thing that they're sitting with and and um and and trying to puzzle through and talking about this granularity right there is a big rubber stamp that gets applied to a lot of things that says anything with the term AI is bad despite the fact that we've had enemy AI since we were kids and we just referred to it as something differently, right? The term has has morphed into this specific thing. Muted and part of this is the tool use. Thank you. If you go play an endless runner, we've had endless runners that equivalently go on forever since before AI was a thing. Yeah,
if you now have a tool that does that exact same process like it's there's

some weird overlap and even on the AI generated content does that mean for example if I use a Photoshop and AI to help me remove a background from a texture that I then put on something like where's the line on AI like is that AI generated content?
Yeah. you know, if I ask it to help fix some of the when I rig a model and if I have a couple of points like sticking through the geometry and it can scan through and go, "Oh, here's the two things that need to be fixed. Let me move those in on your, you know, 300,000 polygon model for that." Like again, it's just the term. We're in such the wild west right now that it's hard to know where to apply it with a huge penalty for not disclosing and a huge penalty for disclosing
and and the
this doesn't mean we should do exactly what Tim says.
Correct. Yeah.
It's an interesting issue.
Right. There there is a world of difference between acknowledging that

Tim is correct that there is a problem that is ongoing and agreeing with his solution to the problem. Um and um the uh so someone was someone was asking um what you would suggest a fix and how granular you'd suggest. I think part of the problem is understanding and people don't want to understand broadly speaking. There's a very large the the the there's a very large group of people who don't really particularly want to understand the granularity and they just want the problem and I think it's a real problem right the the rise of AI um data centers the rise of AI um uh tool usage in everything has caused the rapid inshitification of many parts of many industries and has caused uh hardware

component prices to absolutely go all the way through the entire roof
to the moon
to the moon. Right. Um and I think
lots of layoffs actually and then rehirings there's this isn't this is a sea change in a lot of places.
Yes. And one of the problems with trying to say how would we fix it is if you'd asked me six months ago, 6 months before that or 6 months before that, I might have given a different answer because the tools were at different stages.
Yeah.
At that point,
yeah,
it was like trying to write regulations for the internet when people were still figuring out what is the internet and every six months for a while there was a whole new part of the internet that had not existed.
Yeah.
Six months before that had somebody figured out a new thing,
right? A and I think part of the problem here is is something that Salvastra brings up, right? What defines AI generated content? If I use an AI tool to review my code, does my code count as AI generated?
I think some people would say yes and

some people would say no. And some people would say it's a percentage, right? And then [clears throat] and then the other problem is of course, and this is like really difficult, you can't actually tell. I'm so tired of all the people who are like, "This was written by AI. It has an M dash in it." No,
I I did an art the episode that I wrote for extra credits was coming up in a week or two.
Yeah.
Matt when he was looking through he's like, "Did you use AI for this? I see a lot of M dashes." I'm like, "No, that's just how I've been writing for
Yeah.
my entire professional life." Because that's how I was trained. AI has read my stuff and used it as part, you know, me and millions of other people as part of how you write,
right? And then and then we have all kinds of other things. Did the AI tell you where the issue was or just or did it write the corrections for you? Right? So again, this requires
and should we care about that difference if it's like here's the thing?
Here's the thing. Let me fix,
right? Like so so and and here's the

really big question. In what way is that substantially different from a coding perspective than spellch check in a word document?
Yeah.
Right. Because spellcheck's gotten pretty good. Spellcheck had gotten pretty good even before AI. Belche could do grammar or weird idiomatic phrasing or um different like uh punctuation problems. It could do a lot of things even before that. How is that is that different substantially? Right? They're both linguistic models that are designed to convey intent to a specific audience and have certain structures and rules. Is it that different? Maybe. But we still have to solve that problem, right? And it's very difficult for uh any of that. And and this this is the like the weird small slice that I agree with Tim on. It is very difficult for any of that to come through in an AI disclosure, right? Because the present most many people won't read it.
Many people won't read the disclosure at all. They'll just see that it exists and check out,
right?
I actually think I have it will.

Yeah.
Here's the wording I want to see. Um make significant use of AI. So for games with the selling point, hey unlimited, you know, NPCs will talk to you forever using so and so like it's a rough thing, but that way nobody has to check. It was like, wait, did my contractor use something to touch up a thing? You know, did I do code review? You know, basically small little things on tools that get built into what everybody uses don't qualify. you know, using something to fix a couple of rigging points on a couple hundred thousand polygon model. Nobody cares. You know, it's I think what people are most care about is the significant use,
right?
You know, did somebody hit a button and have half their game generated,
right?
Are there huge amounts of AI getting procedurally used in these places?
Yeah.
Is I think my guess is what a majority of people don't like. And I think a lot

of people also really uh have particular issue with it in artistic elements like what they would call artistic elements versus coding elements, right? Like a a um uh a um uh if all of the music is AI generated, people will care about that because that is that is a different kind of generation, right? Or and I think I I think my line is uh a difference between generative AI and analytical AI. And I think it is the problem here is that we have been sold a bunk bill of of ideas by many of the companies like OpenAI. Um that those two things are the same thing and they are not. I assure you they are not. Um one of those is a mathematical analytical tool and the other one uh is a terrible pile of mistakes known as chat GPT. Uh and those are not the same thing. And so I would really like to see

a division right in that.
And part of like I the one let me put it again. Um this is what also makes it so hard. Was a tool made using stolen content. It's hard to tell. Like for example Adobe for Photoshop owns the Adobe store. Basically you can go license images from them. They have millions and millions of uploaded images that they have paid people for. They own them. I believe their contract is for anything. So Adobe's AI for images is trained off of an million plus catalog of stuff that they own and have paid for. Like
right,
they are probably one of the single most ethically sourced AI groups out there. Even though like there's always argument, but because they they have a specific thing to train it against that they own,
right? However,
even then people are still arguing against it. So when you say like did they steal the

data when my Gmail you know edits an email that I'm writing or gives a suggestion I don't know where Google trained it can I do I stop using Gmail do I stop using Microsoft Word do I stop using Adobe do I stop using my Chrome browser because they've built in an Ask Gemini like AI at this point is getting put in everything there is no longer I believe the ability to not use things because it may have AI in it that was sourced ethically or unethically because a people still can't agree on the difference between those and b because it's literally getting put in everything we have. My iPhone now has AI put into it. Apple's put it in. Like
it's become impossible to not use
which kind of sucks. Like it's hard to choose to not use AI because of how it's getting built in.
Yes. Yeah. I agree with that. And I think that
it has become a ubiquitous part of almost if you're working digitally, it has become a ubiquitous part of every

digital tool you use.
Yeah. And I think that that is that is very true. So I think uh I'm going to keep us moving. Uh I am keeping an eye on the time. I think the the big problem is that
it feels like I'm going to be really honest here. It feels like Tim forgot about his a about his media training. This feels like CEO says thing without thinking about media training. Every CEO gets media training. Every CEO gets trained on how to give an interview. And this was not a good one. Um and I think it's uh the I think the big problem is that there there is a point buried in all of this. Unfortunately, it's being lost by the sourcing and the big top level takeaways from it. right? Which is him pointing a finger at Valve and saying Valve bad, right? That's the top level takeaway. Instead of saying, "Hey, I think there's like this nuance issue that's happening

in the industry and I think that this is a way to approach it. It's Tim Sweeney and Tim Sweeney said Valve bad and everyone love Valve and everyone love Valve for consumer transparency, therefore eat Tim Sweeney, right?" Like that's the problem.
I'm curious actually if he went into later that isn't quoted into the talk and basically was talking about the nuance.
Yeah. like it's it's hard to know on these things.
Yep. Absolutely. All right. Our next topic is kind of an interesting one. We're not going to spend I think too much time on this one um because it's a little speculative, but I wanted Jeff's thoughts as a studio head on this idea that got brought forward last week.
So, I'm going to sum up a whole bunch of complicated ideas very quickly.
Okay. Oh, actually, hold on. Before this, by the way, quick note on Tim Sweeney.
Yeah.
Like, I've actually met him in passing. Yeah. Tim Sweeney does more charity and conservation work than any other gaming CEO I've ever met.

100%.
And seems to be a genuinely nice person.
Yeah.
Like, and this is also part of the nuance. Like, it's easy to look at a thing and say Tim Sweeney bad, but
Yeah.
If we had more CEOs like Tim Sweeney, the game industry would honestly be a much better place.
Yeah. Oh, absolutely. 100%. But also, right, like
but people are people. We're not going to agree with everything a person says. If we did, we'd all be clothes.
And people also forget like one of the biggest um axiomatic statements of like existing in this space where we talk about the industry and we talk about news and we talk about hard stuff is that two things can be true
at the exact same time just like in Hamilton. And [clears throat] it's very difficult for people to keep in mind that two things can be true, right? That that you can disagree fundamentally with someone on one thing and agree with them completely on something else and often times it gets hammered flat into person bad or person good when neither of those is really the case, right? So just like

reinject nuance into the conversation, right?
Okay.
Okay. What do we got? So, um, a long long time ago in a galaxy far, far away. No, that's not right. Let's move forward a little bit from that. Um, the there has been a big push in many legal jurisdictions around the world for the stop killing games movement for um to require publishers to uh leave games playable to the greatest extent possible when the game closes. M
this is difficult, borderline impossible for many games that have already started, right? There's a whole bunch of complicated stuff that goes into games that have already been released or already done a significant portion of their development and we're not going to deal with any of that today.
Mhm.
But one of
and quick note often beyond their control.
Yes. Yes. 100%. However,

there is a place where you can embrace the idea that a game should not go away when development of it or support of it stops. And that's before you begin anything. If you begin with that as a foundational first principle, it's not easy, but it is easier and more possible to do that thing before you begin making the game. If you start with that as a first principle of the game, just like accessibility, if you start with accessibility as a first principle of your game and say, "We're going to have rebindable controls and colorblind filters and robust captioning settings and all of these and and like ways to do dark bangs instead of flashbangs and ways to do um uh you know, screen shake on or off and flashing lights and we're going to build that in robustly from the beginning. It's a lot easier than to paste it on at the end, right? Same idea. starting with it as a first principle. So, this uh is Oh god, I'm gonna make sure I get his name right because I'm gonna mess it up. This is

Robert Bowling and in a LinkedIn post, so it's a LinkedIn post worth what you paid for it. Um he suggests that his next project will be one which is designed to fail in the open state. That is to say that he's he's building a set of legal documents and procedures where if the game doesn't come to fruition or if support gets unexpectedly canled or if the game goes south and the company bankrupts or whatever, everything that exists for the project up until that point is freely released into the public domain as open source. Weird. That's like first off first off top level concept. What a weird idea, right? Love it. Love it. Is a weird idea. Jeff, your first hottest take on the idea of designing a game or game studio to fail open rather than fail closed.

So during gamedev we already back up everything like we'll use GitHub or like we have repositories like
storing your code and working on it is always a thing. Nobody does it on site anymore like it's always backed up. So in some cases, a legal switch you could flip that says people who can access this set of stuff is, you know, here's the group of people that can access this and now here's the group of people that can access this.
Not terribly weird. Like
we've reached the tech standpoint.
Sure.
Where that could happen. and kind of like putting something into Creative Commons like I could see this reminds me somehow of like Creative Commons meshed up with access to a GitHub um or to a code repository.
Sure.
So from a tech standpoint, we've actually reached the point where I could

see this and you know I could see somebody like maybe him helping to engineer a here's a thing that you could do. Um, if so, I think it'd be a really fun opt-in thing. Hey, we've set up the framework. Here's how you do it. Anybody who wants to, this can be a selling point for your game,
right? Like I don't think this is ever a thing most studios will want to do because say for example, hey Will, say for example I was running a studio and we went out and we made an early VR game that got a Dungeons and Dragons license.
Sure.
And say we did animate battle chest but with Dn D.
Yeah. Totally.
Beholders and dragons and it was in VR. You could pick up the pieces and put them down and they'd go fight and all sorts of other fun stuff. Great. It's a D&D license. My D&D license for my hypothetical, non-hypothetical studio expires in 5 years.

I can't do this open thing because I'm using a beholder. A beholder or the dragon design are trademarked things from Wizards of the Coast. So, I can't fail open on that because parts of what I own. Um, thinking through as well, say we were using Photon multiplayer, we need a license to use that. We bought, you know, and you buy parts for things in the Unity game engine. Well, let's see. We've done enough. We now need pro licenses in Unity to hook into the So, the concept is interesting. What I'm worried about is or you know maybe we've licensed some fonts to be able to use during this like there's a lot that might go into a thing which are not 100% created by our studio because everybody buys and licenses pieces to then go build the thing that they need to
right

so for if I went and handcoded an engine and made an my own game this could be 100% free and And maybe there's carveouts for these kinds of things, but it is a way more complex issue the more I think about it.
Yeah.
Or maybe this game came out on the PlayStation and so I have some Sony code and hooks in there that are required by by Sony for me to put in my game
trophies
to use to be able to hook into a PlayStation account. like there's a whole bunch in there that um I think about and this would require a whole new ecosystem of people who do licenses to adjust their licensing to allow it to fail open. So like this is a thing that could be done but it's more complex than just the studio saying we're going to do it.
Yes.
Because there's all of the surrounding industry and tools that we use to make

games.
Yeah. And then there's there's uh I I think that that's 100%
that that isn't that this shouldn't be done. I'm just my logistical brain is thinking of all the things even for small games I've worked on, let alone big ones.
Correct. And so yes, it becomes it becomes very difficult and it it's entirely possible to say these are the parts that are going to get released and these parts won't. Right? you can differentiate those and say that this big gap in the code is where you plug the thing in and we can't show you the thing but you know what thing goes here if you can get a hold of the thing right and that's [clears throat] that's been legit for a really long time by the way um one of the most interesting examples is um randomizers randomizer creation websites don't host the game because that would be copyright violation you have to provide your own copy of the game and game for you and provide you

with a download as an example, right? So that style of I can produce some of the code but not the license part of the code even if they those two interact and publish it on the internet has been a thing for a while. So that stands out. Um I I do think that this is it's much harder than it sounds, right? Because you're like, "Okay, cool. That sounds great." like we'll just wait a second and then we start getting to the logistics of it. And I do think that the further you think about it, the more complicated the logistics get and that doesn't mean it shouldn't be done. On the contrary, it is all the more reason that we should start as soon as possible and begin figuring out these problems.
But man, are there a lot of problems?
Can anybody then own a part of that after it? Also, like I was just thinking of a weird dystopian thing where hey Will, Sony pays my studio a million dollars to go hire 10 people for a year to go build the thing. Oh no, we're out

of business. This fails open. So when he takes all the stuff in the license we paid for which is now open grabs all those doesn't have to pay the people who had the licenses that went in because it failed open and now builds a thing on top like
right
there's some weirdness that you would have to figure out to keep corporate lawyer shenanigans.
Yes.
From screwing out people who make the things that they license to avoid paying it.
Correct. or or why should I buy the game as a consumer? Why should I buy the game? If the game fails, if if everything shuts down, then the game will fail open. And I, as a consumer, who is in this theoretical circumstance quite unethical about this, believe that it's totally fine to let that company fail so that I can just play the game for free. I don't need to buy it. Right? And so there there are a

bunch of issues with it. Again, I want to be very clear. None of this means that this shouldn't be done or shouldn't be attempted. It just means that there is a lot of things about this to think about and a lot of things to protect against in the legal framework and in the way that this is done. Right.
Yeah. There's also in some cases I wondered if it would hurt small studios. Say you're a small studio that's made a couple of games and you're not doing well and a big publisher might be like, "Well,
all right, go." Now, you were hiccoping for a second.
Oh,
nope. Still.
I was just thinking like, "Oh,
why? Why? Why? Why? Why
do I need to do a ninja refresh?"
Yeah. Did you?
Yeah, it's you.
Let's see. How do I do that again? Try now.
Oh, Ninja, where have you put the things this time?

Well, what do I click on? Oh, I right click on the picture. Let's see.
Right click on the picture and then it's stats and then it's send key frame.
Jeff is an AI now. Yeah, that's right. That's totally it. Jeff Jeff has Jeff has uh revealed his thing. Now, in this case, we can blame no one but ourselves. We're using an open source peer-to-peer tool for this. So, YouTube is also having issues again. Amazing.
There might just be an internet day.
Yeah, I love that. Love every part of that. It's not having terribly many issues for me on YouTube at least. So, that's nice.
The show stats no longer has the refresh key frame that I'm seeing.
Okay. Yeah. Uh, refresh the page. Just refresh the whole page and I'll get you back in.

Okay. The only issue is Jeff issue. Okay, that's great. Thank you. Sorry, chat. This is this is one that is plagued with technical issues. Um, but I I would like to hear your thoughts. Like I I think everyone's on board with the idea that this is an admirable goal, right? This this is this is an admirable.
Hello. Hello. Hello.
Yeah, better. Um, this is an admirable goal to shoot for, right? Even if it's difficult, even if it's got a lot of problems. I think we're all on board with it. It is a thing that should be shot for. I think it's just difficult with um I think it's it's difficult to understand all of the complexities and we should absolutely keep an eye on this and cross our fingers that everything goes according to plan, but we should also be realistic about the number of problems that are that come with this, right?
Yeah. If it was easy, people would have been doing it already.
Yeah.
It's a fairly radical idea. I I am very

curious to see where it goes.
Yeah. Yeah. Uh, and I think that this is this is a great if if someone makes if if they get votes of consumer confidence that says I would be more likely to purchase fail open games if it's in my genre,
right?
That is a big vote of consumer confidence that makes companies more likely to do this, right? So make sure that like if
actually just bringing it up front, this will make it harder.
Yeah.
So companies need a reason to do to make it harder.
Yes.
Otherwise, especially small studios.
Mhm. 100%. 100%. All right, on to our last our last conversation of the day, which is
Oh, if we have time, will I actually have one extra tiny one?
Okay,
so let's see what we get here. All right. So, the ESA said quite possibly the dumbest thing I've heard in a hearing.

So, they were in a hearing advocating against the
actually they're in the California State Senate. Okay. Just looking and the Protect Our Games Act, a stop killing games bill.
Yeah. So, um they are um the ESA is opposed to this And and the question was around it looks like assemblyman Chris Ward was questioned by the committee about how feasible it would be to keep games running on private servers if official support concluded.
Right.
And Ward noted both Minecraft and Call of Duty utilize community servers. Mean it's an ex it's a solution that already exists.
Correct. And those are by the way just two of many many good examples of community servers. Many games use community server browsers. The ESA is the entertainment software organization or association and is one of the big lobbying groups for the video game industry as a whole to basically try and make sure that legislation coming down doesn't do stupid things because there's

a lot of people who fairly or unfairly blame the woes of society on video games.
Right.
And it takes some lobbying effort to make sure that
knee-jerk reactions aren't put in place.
Yes. that curtail our ability to make, distribute, or have video games.
That is at all.
That is a very good way of putting that, Jeff. Yeah. And I agree. And in that respect, we need a group like the ESA.
Mhm.
However,
y
when they say things like uh with regards to community servers, they're illegal. They're not in any way affiliated with Microsoft. Microsoft for Minecraft has gotten a lot of criticism because of those community servers not employing the same safety standards that Microsoft does on their Minecraft servers. Uh the ESA executive went on to state they even consider these servers as quote piracy and have lawsuits pending against private servers right now. Yes,

said Gibbons. In fact, we consider it piracy. We have lawsuits, two pending lawsuits against private servers right now. on the United States Trade Representative and their notorious market reports on counterfeiting and piracy has named some of the big private servers as a notorious market. Okay, so first off, first off, I'm so much more likely to sign up for your private server if you label yourself a notorious market. Like just straight out, like there's part of me that's like, yes, absolutely. And on the second part, what you with your whole chest in an open session said what? Like
yeah, like and later in the article we're reading from IGN, I'm going to quote the article, not the the lady uh not Jennifer. Um you and to be clear, in the case of Microsoft, this isn't true. Microsoft has multiple pages on its website where it encourages players to set up their own servers and brow third

party servers. These are servers are also verified and improved by Minecraft's team to ensure they follow standards and guidelines.
Okay. So, I'll also say
that it is built in to the UI of Minecraft. It's not built into the command line. If you open up single player Minecraft, there is an option that says open to LAN, and that's how you make it a multiplayer server if you want to. There are other more complicated ways to do it, but for the functionality that we're talking about right here, open to LAN is is a server. That's it. It's built into the game, right? So, I feel like this is first off, someone needs to take Will's recently open source class on Shut Up. And second off, how and why did a vice president of the

ESA get this so wrong? And that's kind of the angle I was hoping that I could get some insight from Jeff on is how in the world do you screw up this badly if your job is to lobby for video games? Like they're supposed to be experts. How do you mess this up this badly? Unless like I'm I'm I don't want to jump to malice as the first. So, it could be a confound conflating confounding issue where she's saying that, you know, there are probably lots and lots of pirate versions of things that get stood up and she's just lumping them all together. So, there is that possibility and there could be pending legislation against those and we've seen groups put up basically quick follow or copies of other games.
Yeah. and try and pirate and get money from them or even pretend they are the original thing.
Yes,
this isn't just video games. We've seen

this on a variety of things and the ESA absolutely does and should attempt to crack down on people pirating video games in that way and put like trying to scam consumers. Like that's part of what they're that's part of the good part of their job for the industry is trying to keep the industry healthy and that going on. So there's the potential that she was lumping it all together but using a high-profile example which was the top of mind thing like sometimes in a committee setting when you're getting questioned by lawmakers and other things your brain does funny little skip things.
Sure.
Like so there is that as a possibility.
Yep. There's also the full other end where she was basically going in to scare people,
right?
And say, "We need these things. You know, the thing you mentioned is actually illegal, so let's not even consider, you know, that's not an issue cuz it's illegal. Let's just keep moving forward." Cuz it sounds like that she

was return um replying to an objection to one of the things that her group wanted to do. And her reply was, "Well, you shouldn't worry about that. that's illegal anyway. We have a lawsuit pending because if so, if that's true, it's a good way of shutting down an argument. Your concern isn't valid because that thing is illegal.
So,
so like there there like I'm just kind of thinking of the spectrum,
right?
And my guess is it's actually probably somewhere in the middle.
Yeah. It's some it's some part poorly made rhetorical argument, some part confusion, and some part trying to do her job at the best she can in an environment
on the fly in the middle of a
Yeah.
situation.
Yeah. But the ESA has had both good and bad points in the history of the ESA on what they advocate for.
And and just like any other thing, just like we were saying earlier, two things can be true. We need groups like the ESA to help lobby for the freedom of artistic expression that video games

deserve because all video games are art,
right? And also sometimes the ESA does stupid things like this, right? And so those two things are both simultaneously true without annihilating each other. Yeah. Right.
If this if that had been a prepared statement, I'd be much much harder on her. Yeah. than something said live during a committee while getting, you know, questioned and going and back and forths.
Yeah, I think that that's a that's a very fair um observation, right? is that this is a off-the-cuff statement that probably shouldn't have been made like this um and probably should have been done with more research or a different example, but right like there would have been far more ground to um to sort of wiggle around on. By the way, if they'd brought up um the current position of Rockstar and Grand Theft Auto 5, Grand Theft Auto 5 is having a very weird relationship with modded servers and uh clusters of

hosted servers that are not in compliance with Rockstar's terms and conditions. And there there is a huge amount of crackdown going on in that community. Right. I think in part this was if she hadn't said Minecraft, like specifically Minecraft. If she hadn't specifically said Minecraft, the statement would be a lot more workable.
But Minecraft,
that's why I'm wondering if like in the middle of this she picked the wrong example.
Yeah.
I said if this had been a written prepared statement, I'd be like, "Wow, that's really crap."
Yeah. if she's pulling examples off the top of her head, you know, as Thunder said, you know, maybe this was two hours into the meeting like
Yeah.
So,
absolutely.
I I am attributing this more to a mistake than to malice.
Sure.
But
it's just And unfortunately,
it is a good example though of like how this is a hard thing to do. And um

somebody also pulled up um where' that go? Yeah, the ESA is a game industry protection, not a consumer protection agency.
Yeah.
Their job is to try and keep the game industry as healthy as possible. That often aligns with making good things for the consumers.
Yeah.
But it is first and foremost their job is to protect the companies that make and publish games.
Yeah. And those are Yeah, that's a very good reminder as well.
Okay. So, thank you for all of those uh relevant topics on the things I prepared. Jeff, what's your what's your short bite-sized one? Uh we've had a lot of tech problems. So,
I've seen that if we actually one of the best versions of a monetized free-to-play game recently.
Uhhuh.
I've seen. So, as some of you may or may not know, this last weekend, um, so Fourth of July

weekend was Niantic's 10year anniversary for Pokemon Go.
Uh-huh.
10 years. And um, one of the ways Niantic, excuse me, one of the ways Poke and sorry, Pokemon Go, I believe, was somewhat recently bought by Scopi. Um
or uh Pokémon Go got spun off and sold elsewhere. Yes.
Yeah. Um sometimes the companies that do this try and um maximize their revenue from players in good ways and sometimes they do it in bad ways. Scopely did one of the more interesting things I've ever seen a company for this do for the 10th anniversary which was hey a time to celebrate. So, they've been running a ton of events. This last weekend, uh, for example, well, do you remember when you catch a Pokemon, you get XP and Stardust?
Yeah.
They're like, screw it. Whole weekend, four times that for both. Every Pokemon

you get is four times as much XP. You can level up fast. Four times as much stardust.
For this, we're going to spawn heavily Bulbasaurs, Charmanders, and Squirtles. And if you evolve them through their fur form during this event, we'll give them the rare extra overpowered move.
Yeah.
So, go catch stuff. Go get XP. It's all free. Pokemon Go sells but monthly battle passes.
Um, if you want they they give you a free track and a paid track. They always offer great stuff in the paid track, but the free one is lots of free stuff all the time. like they've kept that tradition alive and they've been putting out legendaries. They usually they put out a legendary and a raid like every week or two and there's a lot of legendaries in Pokemon at this point. So like even if they did one a week that would mean you might go a year and a half between seeing it show up again in a set of the weekly raids.

Yesterday for one day only they said, "You know what? From I think 9 in the morning till 8 at night, every single Pokemon legendary we've ever released in our 10ear span is going to start showing up in gyms for the entire day. We're going to give you extra raid passes. We're removing the limit on remotes. Go have fun for a day collecting everything you want. And for this whole week, they're doing a series of drops of their biggest things ever leading up to the Pokémon Go Fest this weekend.
Mhm.
It's all free. They're also selling an extra battle pass to help you catch all of these,
right?
And raid passes you can buy for in-game coins, which you earn, or for real currency. But I have bumped into multiple players who are happily spending hundreds of dollars to round out their Pokemon collection for things they've missed over a decade that they know they may not see again for
years to come. and they're all doing it as one huge celebratory thing on top of here's free stuff, here's free stuff,

here's free stuff. And it's kind of mind-blowing how much they're both giving and like and they're not overcharging like right
but it's just it is fun to see what basically a new company coming in that's like oh
let's raise some revenue but do it in the way that all the players are going to have fun with.
Yeah, it is it is very interesting. I think it is very easy for some companies to forget that one of the best ways to raise the amount of revenue that your free-to-play game makes is to, and I know this is radical, y'all, make the game more fun to play. Because the more people play the game, the more likely they are to tell your friends about the game. And the more people who are playing the game,
the more money you're going to raise in aggregate. and like just make the game more fun.
Yep. And I said I it literally like I actually have watched a couple of Pokemon Go streamers um are doing

YouTube shorts and other things who do comments on, hey, here's the they'll do like news skips. Here's the raid this week. Here's the so and so. Here's the community hour. Like they'll lay it out. Every single one of them just had this unhinged look on their faces. They were like reading and saying this where you could see they're just like
Yeah.
What do they like? But it's been fun to like It's been a fun week.
Yeah.
Um it's just I I've never seen a company just so blatantly say screw it. You want it? All of it. Condensed fire hose. Let's go.
Yeah. I think I think and that's the that's the good bar I think for like a ramp up in um monetization, right? Because there is a ramp up in monetization. They want people to buy battle passes to um or they want people to buy raid passes. Yeah. To to do stuff. But if there's enough free stuff that people are having fun without spending any money,
great.
Right. Then then that's then that that

feels like the the right bar to me to like
I said it's just it's an interesting one to actually be going through since I play with my young child.
Yeah.
And um actually will it was so good. Young child actually got to stop using mommy and daddy's phones. We put it on his tablet. He got his own account because we were like he's going to catch all this for us.
Yeah. Yeah.
And as he gets So he Young Child has more legendaries at four days into his play than I think my wife and I did in our first year.
Yeah, of course.
I've been taking him out every day and we went to Raider last evening and
Yeah,
we caught stuff.
That's awesome.
Tonight we're going to go catch a mega um Tyranitor because there's a mega tyrannower and why wouldn't you want to your own little Kaiju mega kaiju stomping around?
Yeah, I love it. I love it. All right.
Anyway, so like on the good news report, hey,
I'm not always a fan of Scopely. Scopely seems to have done a pretty good job here. Well,

personal opinion.
Go them. Good job.
And I do like when we get to offer um some of some of our our personal experiences with how uh we've been interacting gaming and having a good time because I feel like that's that's a good part too, right? We're not always behind this virtual desk reading virtual news about how the industry is doing weird shenanigans. Sometimes we actually play games too. Uh so friends, thank you so much for joining us for this shenanigans poperie. Uh we will return on Friday with a uh games for breakfast which the listing will be up for that right after this. I was going to do it this morning and then had tech problems and tech problems has been the theme of the day. Um so that'll be up uh immediately after this. That will be on Friday. Topics will be uh determined Thursday. If you have topics you'd like for me to cover um with Matt on Friday, let me know by Thursday. Either uh in the comments of this video or in Discord or on Blue Sky. And before you ask, yes, Xbox's absolute jobs bloodbath will be on the

topic list because holy crap, how could it not be? Um so, uh that is that's it I think. Is there anything else that
Great episode. Thanks for watching. This will be up on both YouTube and Nebula for the VODs.
Yeah.
Um Twitch doesn't seem to do VODs anymore, so it
they don't um and
won't be up there. Um
yeah, we will be seeing you next week. Oh, we'll have next week we have a fun topic. We're going to have some fun guests coming in.
Yep.
So, I look forward to being able to share that with you. And the thumbnail for that will go up in a couple days so you can see what we'll be talking about.
Yep. All right. I think all that's left is say bye to the people, Jeff. Bye to the people, Jeff. Thanks everybody. Have a great week. [music]