How Game Devs Use AI Today

Welcome to the Navit 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 Navik's growing ecosystem which ranges from free and premium research to consulting and advisory services. For more information, visit www.navic.co. This episode is brought to you by metal.tv. Built by gamers for gamers and used by over 15 million gamers per month. Metal is the fastest way to clip, save, and share gameplay on PC. Millions of clips get shared every week, turning your game's moments into word of mouth at internet scale. With Discovery being one of the biggest challenges in the games

industry today, Metal is building a platform where publishers, studios, marketers, or anyone looking to reach gamers can find the right players across multiple genres and geographies. For more information, head to metal.tv or check out the link in the show notes. Now, let's jump into the episode. Hello everyone. I'm your host Devin Becker and today I'm delighted once again to be joined by Aaron Bush, managing partner and co-founder here at Navic. And today we're going to discuss some of the more concrete ways the game industry is actually using AI currently based off some of the things they've said publicly and some of the things we kind of have an idea are happening behind the scenes. But uh first things first, let's talk about what's going on at Navic.
Yeah. Well, what's up Deon? Always happy to to be on here. I mean, with Navic is business as usual in a lot of ways, but one thing that we're we're gearing up to change is expanding our content ecosystem. And so, right now, we obviously have this this podcast. We also have one newsletter, Navic Digest. Uh, but one thing that we've learned

over the years that we're, you know, finally going to take some action on, is that even though it's one industry, the Glorious Games industry, different people in different parts of the industry just care about fundamentally very different things. And so we're we're working on um expanding our content line to better serve more specific people and more specific verticals. But actually where we're where we're kicking things off and this will publish next week is we're launching an AI and gaming newsletter. And the purpose of the newsletter is to just figure out what the heck is going on, learn best practices, and just stay help everyone stay on top of what's new in the industry. Um, in some ways we're writing this for ourselves because we work with all sorts of clients that have all sorts of different needs. Obviously through our content, we're always trying to stay on top of what's happening, but um, really we've we always just find that learning in public is a great way to to stay on top of things ourselves, but also a way to to kind of give back

and and learn with everybody else. And so, uh, this AI and gaming newsletter, uh, will be very exciting. More to come soon. uh if you just follow along with Navic Digest right now um you'll you'll be able to see uh when when we get started on that. But uh otherwise just uh excited to be here today. And also like you know I'm not the game maker at the company and so a little bit of me feels a little bit of imposttor syndrome being here talking about AI and games but even so we still keep our pulse on everything. And I think what we just want to get across today and maybe you'll have more thoughts on this Devon is just to share some of the like new interesting things companies are up to and we can talk about it a little bit from a game makers lens. And Devon, you're more the the the hands-on game maker of the two of us than I am. And so I'm sure you'll have a lot to add. But even just talking about it uh from a business perspective and from a trends perspective and uh just calling out some BS perspective, I'm looking forward to doing um today, too. So, let's let's

dive in.
Putting the perspective into perspective here.
That's right.
Cool. Well, I I I mean, there's a lot going on in AI uh across the board. games are definitely being touched by and I think some of that is obviously going to happen regardless of whether people quote unquote want it or not because well the the the fundamentals of making games are getting pretty tough these days to say the least uh in this funding environment so it's kind of essential but just kind of taking a highlevel view of where things are now in this super fast I'd say uh river of of progress here uh where are we kind of at where do what do you think of the sort of landscape in general
yeah well obviously We're still in the the first inning of AI taking hold in the industry and we're at a point where it is being used and treated and viewed very differently in different places. And so as we'll dig into some examples in mobile for example a lot of mobile teams are being very aggressive hands-on across the production pipeline across

the ad creation pipeline across everything to figure out how to use um you know not just AI for uh simple procedural efficiency gains but actual generative AI to help with uh with asset production. Whereas, if you look in the the console PC space, that's very much voodoo right now. And uh if you even have an accidental uh slip up where in your giant game, there's one piece of art on the wall that you forgot to switch over that was generated by AI. You're going to have, you know, incessant headlines about your game and how unethical you are. And it's ridiculous. And we could talk more about about the ridiculousness of it all. Um but obviously you know those studios because it's viewed very differently um by gamers have to tread more carefully and there's also a difference in how people different parts of the world um view AI. There's a pretty big split between east and west that is is very

interesting. And so there's all this nuance uh that I think is worth unpacking. And then of course like I think we're still more in the part of the cycle where people are viewing AI more for production efficiency gains which is super powerful and at and at a time as we've talked about much in the past where AAA budgets are out of whack and unsustainable. Uh AI coming in actually is a pretty big deal and maybe helping right sizing what some of those difficulties have been. Um, but we're not quite at the point of the cycle where there's a ton of new interesting things where AI is unlocking entirely new kinds of games, novel mechanics. There's some of that, uh, but it's not at the point where it's, you know, truly found a wedge yet and is taking meaningful market share. And I think that is to come, maybe on some platforms more than others. So it's interesting uh where we are right now but it feels it

feels good to have like innovation in the industry and even though people are uh you know often talking more about the downsides of of what we see here there actually is a lot of upside too which is exciting. Yeah, it's I mean disruptive I think is is the key word here. Like it's going to be good and bad, but extremely disruptive to the industry. But at a time when I think many industries are already being disrupted just by the economy, just by the the sort of inflation of things, the costs, the budgets being out of control, the sort of scattering of the way people play games, the generational shifts. kind of timing wise it seems like all this was going to kind of be inevitable anyways in in the sense of a big disruption but this may offer some solutions as well as some you know potential downsides and I think that's why we want to discuss today a little bit some of the ways it's actually being used you know publicly so that we can talk you know real details in terms of uh actual usages as opposed to sort of the theoretical

fear-mongering or hype like it could do everything kind of thing and the nice thing of course is the AI is gaining capability every today it seems uh where like I remember maybe just a year ago you couldn't trust anything it said. Now it's getting to the point where it's like well I just I have to fact check a few things but otherwise it's it's pretty good. And then as far as actually doing stuff uh I remember we were talking last year about you know like oh Agentic AI is going to be amazing and like everyone's like a that's hype and then it's it's doing stuff. It's absolutely doing stuff. I mean, not always well, but I mean, we're getting pretty close. And I think uh games are kind of an interesting space because they're uh all kind of about smoke and mirrors to an extent, right? It's like this virtual world, lots of everything's kind of fake in some way. And so, this idea that like AI is involved, I think just putting it in the right place. So, we're going to talk about a bunch of different places it's kind of being used based off of uh what different companies have said with some actual examples. We may even have some links in the show notes if it's if it's appropriate to some of these articles uh just kind of give people something to look at to follow up uh as well. But just starting

off with like the earliest part of game development.
Yeah. Well, honestly, honestly, even before like getting to that, just like a couple like big picture thoughts to like set the scene, like I hinted at this, but like I actually do think it's worth talking about a little bit, which is just gamer sentiment towards AI being so anti- AI is ridiculous at this point. Um, and it pains me to see every company bend the knee essentially to what gamers are demanding. You can go on Reddit and um, you know, even solo developers are asking questions like, is it ethical for me to use this AI tool in my game development? And to read the comments, it's just like, oh my god. Like people actually are like applying morality to to just like tools. Like, you know, this is just technology. It's not inherently good or bad. Um, and we've seen this before, too, where I don't I don't know

if it's always been this way in the gaming community or when it like hit a tipping point of this mob mentality. Um, but we saw this, you know, with web 3, too, where the whole gaming community was anti- blockchain. And while it's fair to be to to be skeptical of something adding value to the games that you want to play, and of course like gamers can play whatever they want, but
yeah,
to like start clinging to to reasons like we hate blockchain gaming because it's bad for the environment. It's like
it's just like it's uninformed. It's stupid. And I think we're seeing like the echoes of that again and uh AI now for games and now you like the the mob mentality has you know shifted its focus to to this new boogeyman. And I really want to see like on one hand I understand why companies are bending the need to some degree because if you you know piss off all of these gamers like

they're not going to buy your games or you they'll speak negatively and you'll get reviewbombed or whatever it might be. So, it's understandable to take this slow approach and like be very methodical to not do anything that, you know, upsets the community, but at the same time, the reasons why they're getting upset are just like fundamentally factually wrong. It makes zero sense. And I really want to see the industry figure out how to spin narratives to make it better. And we're starting to see some of this where, you know, like we're not going to It's not going to lay off people. It's all about empowering people. Everything is going to be uh still human created in the end, but we're just going to use it for prototyping. And you see like these like stepping small stepping stones towards towards getting there. But where are the western companies especially that are going to take a stand and change the narrative? And the reason this is important is that you can bend the knee

now to save your business, but if you bend the knee and shoot yourself in the foot for not learning how to like truly innovate and take on these next generation capabilities, you're not going to be competitive in the long run. you're not going to be competitive against the companies in other parts of the world that are being way more aggressive than you, working way harder than you to to implement and use new technology. And
I don't see this ending well, which is why I bring it up. And so, like, there has to there must be some kind of industry change. Maybe it's about like creating something new and stupid that that the mob that you can get the mob mentality to go obsess over something something new and distract them from caring about AI so much. Or maybe it's something else, but it's ridiculous and it needs to end.
Yeah. I mean, I guess if you look at uh game development as a marathon, bending the knee tends to put you pretty far behind. So it's it's definitely like

it's it's tricky especially the bigger the company and the bigger the risk and things like that which is funny because the bigger companies tend to also like not care as much sometimes you know like they they just do what they want to do but then they have like all the damage control and everything else and it's I think ultimately comes down to usually two things one is quality meaning like quote unquote slop uh where I think that's quickly that gap's being closed pretty quick in terms of like it's getting to the point where quality can get sometimes better than people u or you have people just kind of touch it up after make slight changes and then the other one of course is replacing people and I think the big one on that is art side of things not so much like coding I don't think I think most people like see the the replacement of coding is like okay cool which is funny because like those are the more highly paid people that are then getting put out of work potentially but that's the one that I feel like gamers are just like all right that's fine like if an entire like huge AAA game came out it was coded by AI unless it was buggy as hell no one would

even accuse it of being AI code. No one would notice. No one would care. So that one's just under the rug by default. Uh whereas like it seems like the art side of things is where all the debate really ends up being and like the quality side of that should be quickly shored up. So then it just becomes down to how do we make sure we're not like at a time when people are being laid off like crazy just throwing gas on the fire. And I think get past that and it's and you know we can we can just move on and do cool stuff and make fun games again. Either or like you said if you if you want to get people to brace it I guess just go like the brain rot direction right where it's just like no one cares about the quality or any or people being replaced or any of that those sort of genres.
Yeah. And a lot of it is up to the platforms too to kind of set the tone. Like obviously Steam having AI labeled games or not, you know, just adds fuel to the to the fire unnecessarily of of calling things out when it really isn't important to be called out. Um, and yeah, I wish they would change their policies. I don't know if they will, but I mean, we can talk about Roblox later,

too, but they, you know, like, do gamers on Roblox care at all about AI being in their games? No. Like, they're so well positioned. Um, and so it really is just this console PC cohort. But
yeah, I I still think the narrative does must be forced to change somehow or else it's just going to put Western game development in an even harder spot. Um, and yeah, you're right that if you bend the knee now, maybe you it sets you back for the marathon, but I even like, uh, it's like you're just like shooting your your capabilities long term and figuring that out seems really important. But anyways, we could dive into the the details. It's just it's just crazy to me and I feel like it needs to be talked about more.
Absolutely. And I think it's, you know, just kind of like taking a little bit of a of a realistic stand, but uh, you know, it's one of those things where it's just, uh, it's going to have to trend over time and and it's not going to be instant. I mean, unlike the the blockchain side of things, I think

concrete uses are well spread out and actually like for sure there and not just like in these cases it it's cool and neat and interesting uh, like blockchain was whereas this is like no, this is happening now. This has been happening. This is will happen more. this is kind of inevitable outside of like of course you know uh technology risks and things like that but like I mean just starting at the very beginning we have like companies
using AI publicly to the like to the point where it's pre-production pre pre-production even uh with with companies like Capcom talking about using it for ideiation uh where you have this possibility to use AI to sort of develop ideas come up with them to brainstorm to try and scattershot things whether that comes from like just uh you know coming up with brainstorming ideas all the way to like you know developing prototypes and things like that. we have this ideation sort of pre-production pipeline which is which is great because that's an area where people probably don't spend enough time partially because it feels like you're maybe you're burning money because you're not

making anything outside of maybe prototypes at that point but this is an area where like Capcom's admitted hey like we're using this to help us come up with better ideas to like I mean you can help it have it do bits of market research for example where you're pulling in some data that might help you in the ideation phase or uh help kind of try different ideas out where you don't have people to pull into a brainstorming meeting 24/7, you have someone that's available as an AI that could maybe have some of your institutional knowledge in there. So, any thoughts on uh on at least what Capcom has said about how they plan to use it in sort of that phase?
Not too many thoughts other than it just seems really obvious to to do that. Um, and I can't imagine there honestly are that many high talent teams that aren't using AI in some way right now for idea generation. Um, I'm sure there are some holdouts, but um, yeah, I mean it just seems like a very obvious um, thing to

do. like it's not really part of like production pipelines not super embedded into like the actual making of the game if it's a lot of this pre-work um and just kind of giving ideas to discuss with the team and narrow in more what you want to do. It just feels like a very easy obvious place to start. Um so yeah, I mean go go Capcom. I feel like it's sort of like the the least you can do honestly to benefit from from AI here. But even so, it's a good place to start. Yeah, it's funny coming from them because now they're kind of like starting to rely on their franchises that they've built up, but so it's like maybe maybe that's why they need help on figuring out new ideas outside of those franchises.
Yeah, maybe. Um I don't know if AI will do that for them where it's just like, "Hey, Chad GPT, give me more video game ideas to make, but I mean if it can help them, you know, narrow in on like designs or enemy concepts or whatever just as a part of brainstorming." Yeah,
sure. Like it can only be helpful.

I know people like get concerned with that. Uh, you know, it's it's derivative ideas or it's just kind of rehashing stuff that already exists, which to an extent it does cuz that's literally what it's doing. But I think that's
entertainment.
That's human creativity in general to an extent.
We're all standing on everyone's shoulders. That's just the way the way it works.
I have found in using it myself for that process. uh when it comes to like just kind you know brainstorming uh throwing things at the wall the the one thing I'll say for that that like people kind of tend to forget is um you you are still the director you're still the editor when it comes to ideas and I found more often than not I'll throw away half of what it says but it inspires other ideas and I think that's like like an underutilized thing is sort of like a sounding board when you have someone you could just spit out ideas to you to make you think of stuff as you're saying it or when they say something back is inspires other ideas. So, even if all of it's doing is just being like, "That's a great idea," and reaffirming what you said, uh, which can lead to its own bad decisions, but it it can uh

really lead to like making you more creative by sort of pulling you out of the corner you're stuck in and your brain. So, I would say like it's one of those things where we won't necessarily see it impact uh on games unless they just become more derivative, I suppose. But, uh they've already gotten to the point where they're very derivative as it is. I don't think that's going to make it more of an echo chamber, but it it could potentially lead to some more creative ideas that we won't even know were AI inspired unless people come out and say so. So, I think that's just one of those things where it's like, how do we just come up with a ton of ideas in bulk at scale and start to vet them or compare them or group them, categorize them? Like, there's definitely some things there. Uh, but it is it is a little bit of like a sort of obvious thing to do, but I think doesn't get talked about all that often. And so, like you said, good good gone Capcom discussed. And of course, they like also saying like we're going to use it for production efficiency, which is kind of the more vague thing, but we'll see what they end up doing with it. Uh, as you said though, like earlier, the other thing we we tend to see is like people

uh when it comes to seeing like things that are in there later from that early phase, uh, placeholder assets have become kind of a big discussion point. So, like Crimson Desert just is the latest victim of of leaving stuff in. And you always wonder like there is that sort of like did they uh plan to to see if they could get away with it or was it like they actually genuinely left it. And I think more often than not it's actually just left in there by accident and maybe they need AI managing its own pulling it stuff out so it doesn't forget. But
I don't know why anyone cares. It's it's crazy to me why we care so much about this. We got to move on.
Yeah. We got to move beyond the point of like so many headlines talking about, oh, they accidentally left one tiny AI thing in this enormous game is ridiculous. Yeah, it's it's one of those things where it's the scale of the games, and I think people It's kind of funny because people want the scale there, but they don't always want uh to feel like that's mass-produced. And I think that's the that's the problem is like they feel like oh no now it's some

mass-produced thing because like somehow there's like this cheap quality like it's uh like it's fake on the other side like a stage set or something. uh like, oh no, this thing's not real now because uh a human didn't make it. Which of course, if anyone knows anything about game production, like that early process where it's just gray boxes and stuff anyways, like yeah, technically a human made that gray box, but it's like it's a lot easier to get get an idea and iterate on the game early on when you can have placeholder assets that aren't just gray boxes or or quote unquote programmer art.
Yeah.
So, I think, you know, it just speeds up and improves game production. So yeah, especially since you like often can't uh do heavy revisions later in in the process, it's very expensive the further you get into production. And so like the earlier you can identify where problems are to or get a feel for the game or play test it, I think it all the better. And if people do get distracted when play testing by bad art and stuff like that. So, if you can have high quality AI art in there when you're testing early, I think it's one of those things where it's I don't think the general public will really kind of understand

the benefit of that until they see the games come out like hopefully with better like better tuning on the play. But I I feel a little bit for Crimson Desert on that like just because obviously they put a lot of work into that game and I seriously doubt it's some AI slot fest. But it's like well we had to like develop on as fast as we could because uh the costs just escalate the longer you produce the game because of labor especially these days. And that that that also leads into another one who you know tends to get accused of leaving stuff in it is actually going through the process of replacing it which is uh Arc Raiders. Um, they actually have supposedly gone through the process of replacing some of the voice stuff that they've used uh with with they've gone back and re-recorded or actually recorded for the first time some stuff with voice actors. You have this interesting thing where it's like they're replacing in public something that got backlash, but the backlash wasn't like bad enough to like tank the game or anything, but it was still like they were publicly admitting, yeah, we're using it like this because we're a small company and we need to

keep our cost low and you need to understand that like we brought this game to you that's beyond like punching above where we should have been able to do and some of that is due to AI and like now that we're making money, we can afford to like replace that some of that stuff now. So yeah, it's an interesting take.
Yeah, I read that story and I couldn't tell how much of it was spin on behalf of Embark to just try to make people feel better about what they're doing or to like backtrack in what their their plans actually are because part of me like I doubt they want to like go and use real voice actors if they can still do a very good job um with text to voice and it serve their needs perfectly well. And basically what they were saying to to build off of what you were laying out was that
as a smaller team they had less budget, right? And so in terms of the corners that they picked to cut, uh, voice actors was one of them because they could do something good enough with AI.

But now that their budget is changing because they've been successful, they're now fully under Nexon. They got all this cash flow flowing. um they want to do whatever the best outcome for the game is. And it happens that with this voice uh chat, the best outcome isn't AI. It still is real people. And that may be true. Um I don't know how true it really is for them, but that's basically what they're getting across. And so, you know, if it's true, I think you that's valiant. It makes sense. It's like ultimately build the best game and if you have the resources to do it and it is economically viable and makes sense for you, do it. Um, and if it doesn't, then you know, you got to pick where and how you're going to invest your resources. Um, so again, if it's true, great. I just couldn't honestly tell if like it still felt a little like span to me that you know they you know they're

at the tip of the spear in terms of these like uh console PC companies innovating with AI but are also now sensing more backlash towards AI than when they first started working on it and thinking about it and so are adjusting to the moment now that they are successful and you know have less at risk there. Um but yeah, it's it's uh it's interesting and even with um I guess Nexon more broadly, it's uh I know that Patrick Soderland, who was, you know, the founder and head of Embark, he was recently pulled in as chairman of Nexon. It'll be interesting to see how a lot of these learnings uh will kind of trickle through Nexon and I don't I don't necessarily foresee the AI of everything taking place but what we are seeing and what he has laid out is

more concentrated bets uh and so like you know really working through the portfolio and just doubling down where it makes the most sense to and cutting back where it doesn't and not all of that is AI driven But where they do double down, it will be interesting to see how they do so differently than maybe Nexon did in the past and to what extent they take on the embark playbook about uh you know just leverage leveraging technology in new and interesting ways. Some of which has a lot to do with AI, some of it doesn't. And I am and I think maybe I've said this before, but Nexon will be a really good and important case study and how a large publisher adapts to the world of AI because they have, you know, a leader in that space that has the real opportunity to help kind of resteer the culture, especially now that that Patrick is chairman of Nexon. And if

they can't do it, then that makes me a little worried for everyone else. But if they can, I think it's a positive signal and hopefully it provides some best practices of what a lot of other companies can learn from.
Yeah, I think Nexon uh broadly and Embark of course are definitely worth watching in this because the approach that that they've taken is they were able to succeed uh at doing the finals and arc raiders to the quality level they were because they completely rethought everything. Like they they're not always specific on exactly what that is, right? There's only so many examples he's given around like say for example photography for textures things like that or you know the the AI for the sort of voice call outs where you know it didn't make economical sense to record those but like there's just a lot of every every aspect of production process they're willing to question and I think that's exactly the kind of company that brings this stuff forward where they go we're not questioning it for shareholder value we're not questioning it for just budget we're questioning it for does this make sense for modern game development to do this process that is

something sort of that brings and these are all veteran game developers. This is not like a company of new people coming in like some Silicon Valley startup that's like oh let's just YC comedy disrupt this sort of thing. It's more like do we have to do it the way we kept doing it because we see the writing on the wall that that is not going to work anymore at the budgets we're talking about and we still want to keep up that quality level. It's not about shortcutting quality. It's about like does this production process still make sense now that we have new technology. It's like, you know, we talk about like all these modern game engines and all the cool stuff you could do now that you used to have to do by hand. And it's like, well, that's something to leverage, right? And they're looking at all these things. What else is out there that we leverage? And AI is clearly something that could be leveraged. And I think it's it's interesting to see some of the approaches they're trying to take where it's not just stuff that might be public facing like the AI uh voice stuff, but also like internal processes. So they they didn't really like get into super detail on this, but it was interesting. was talking about like almost basically taking all their all their data and sort of compiling it into this this monol thing of like uh
best practices. It wasn't like super

clear on exactly how that would work, but it sounded like they were almost taking like what what are all the the things that we've learned and put it in almost in this like expert system uh on like these best practices especially I think around the live op stuff which was interesting because uh Arc Raiders was benefiting from Embark didn't have the live service experience as much. They learned a bit on the finals, but they were actually relying quite a bit from what I from what he'd said on Nexon's help on their live service experience to help teach them a bit as well, whereas they teach Nexon then some of the things they learned from their production process. And now they're trying to combine that into this sort of like, you know, genius AI that that is an internal system that they can tap sort of to spread best practices across the company, which is a really interesting idea of like can we now have this expert that is available? Like imagine you're working in this company and you could pull this guy into any meeting you want and he'll help be like, "Oh, I've been working here forever. I know everything about games, but I actually have it from real data, not just my opinion, and I'll I'll help guide your game for you." It was almost like this this mentor for every possible game. uh which again I'm

I I'm going off of what he said which is a bit vague but it's a really interesting idea of sort of this internal thing that's not something public facing not going to make someone mad in the public but it's clearly looking to upgrade quality without it being like a production pipeline thing necessarily and I think that's that's some really innovative approaches to AI use that I don't think we're seeing as much and that goes kind of to that sort of ideation thing Capcom was talking about let's say that's also involved in that process like hey what kinds of how how should we approach coming up with new games, what is the best ways to do that? Um, these sorts of things will be really interesting to see when there's these sort of data modes because he was talking about that is a bit of a moat for Nexon as well, like if they're basing it off of real world data. Now, keep in mind, of course, real world data does change, right? So, like trends change over time. You can't just go like, well, this worked 10 years ago. I'm going to do it now. But at the same time, like they can correct that, right? They can be like, hey, uh, that's not current anymore, AI. Uh, you need to update your stuff. But it's a really interesting idea.
Yeah. This Mono Lake thing, I agree, is

pretty interesting. Just to read a quote, and this is from gamedeveloper.com. It says, "Mondo Lake is built as an end-to-end intelligence platform capable of weighing in on every single production decision. Nexon said the technology has been trained on billions of player sessions and decades of live game data, including engagement patterns, retention, and monetization habits, and live telemetry." So, it's not a generative AI tool, right? like it's it's a black box to understand from the outside. Um, but it makes so much sense to build these internal models based on companies own data because for any of us that use any of these these public facing LLMs, they have so many blind spots when it comes to gaming, right? Like they can't play the games. They don't see the games. Maybe you're not and especially like, you know, they're not always up to date on what is going on right now. uh you know they can try to stitch it together from from articles from the

past but uh they're just blind to so much of what is going on. But being able to reduce the blindness internally with your own tools makes a lot of sense and is the kind of thing that these larger companies um should have pretty strong competitive advantages for. Obviously how it's executed and made truly helpful. There's a pretty big like last mile gap there that I think is fair to question and may take some time to like truly be helpful across several several domains of of game creation. But even so, it does seem like a worthy tool to try to figure out how to to make that just puts your own company's context inside of a of a model to kind of reduce that that blindness factor. So, I'm really curious to see I mean for Nexon itself, but also just how some of these other companies will go about similar types of of tools to solve that blindness problem specifically.
Yeah. And I think I think uh Embark did

prove a little bit that they could do sort of these innovative things with with AI and machine learning uh based off what they did for the um the AI itself in the game in terms of training it through machine learning. I think that's a good proof that they like can actually potentially walk the walk. uh or have their robots walk the walk case that like what they did with there was was not just like oh this is theoretical and it'll be cool but then it turned out some buggy mess when the game comes out it's actually really interesting thing that actually works and so like obviously we probably won't see like this this sort of thing publicly like what how it works unless it's like a GDC talk or something showing how it works but it's still you know these sorts of internal things I think are something that are going to continue to happen and you'll kind of find out about them in bits and pieces but as far as like the public stuff we They're interesting ones that are like more public facing uh for players. They're interesting in obviously one big one that I think a lot of people are excited about potentially uh shifting the industry a bit but obviously being maybe a little early is like AI for characters in games is a big

one obviously and that's an expensive thing to do unless you have like a lot of local processing but like Craftton for example is is trying to push big into
experimenting in that area with like co-playable characters not just like NPCs but actually like characters that play along with you. We have like a lot of ones trying to train off of like actual player data so they could play alongside you. Uh and we we see that a lot. You know, they're talking about that with PUBG, you know, having like teammates that are actually act like people as opposed to really dumb bots.
Yeah, I think it's super interesting. And also note, we've talked about Capcom and Nexon and Craftton. These are all the Asian companies. We haven't even talked about the Chinese companies yet, which probably like the most aggressive. But who have we not talked about? Pretty much like any any leading western company so far. Where are you? Uh stop bending the knee uh to the
get into some European ones at best here.
Yeah, I guess. Um and you know, mobile's a little little different, which I think is, you know, where a lot of the the European action has been. But yeah, I mean, Craftton is um is cool. Well, I

mean, they've hired like a chief AI officer, which I guess we'll see like how that kind of role finds its way into the games industry or what that really will look like in time. And to to Craft in credit, too, I mean, it's still a founderrun business. And I think you're going to see more founder businesses be the ones that are, you know, still in building mode, still, you know, have like a chip on their shoulder or like don't want to, they're not just managing the business. They're looking to like create iconic companies, right? And Craftton is still of that mold. And when it comes to their AI efforts, they basically have outlined three main strategies. One is to elevate gameplay like the better NPCs and more reactive environments like you were talking about. The second is supporting development teams and these are the AI tools that help streamline repetitive or technical tasks. You know, pretty obvious stuff that that makes sense. But the third one where it gets kind of

funky is the exploring long-term research opportunities and um they're basically talking about how they are doing research into physical AI and robotics through a new entity they established called Ludo Robotics. Um and they're operating out of Korea and the US. Uh and this sound I mean it sounds like a world models type of company similar to general intuition or other companies in that space where they're leveraging the data that you get from games to inform
you like how robotics makes decisions in these uh you know in these like fluid worlds where actions lead to cause and effect outcomes. You have to predict and understand and be able to to work with. And I I honestly I don't know what to make of it from like a crafting point of view. Like can they be competitive here? Does it make sense, you know? Like on one hand I kind of get it because Korea

I don't know if you saw this but there was a report that came out that that was showing that Korea has adopted robotics in the workplace more than every other country in the world. For every for every 10,000 employees u there are 1,02 robots working in Korea. And if you think about it, it makes sense uh because they're facing population decline and to like which will only accelerate and to you know they need more workers and to get more work done they will need robotics uh and maybe they can still grow the economy and and such with fewer people and more robots. And so I don't know to what extent what Craftton is doing feeds into that, but in general like it's it's interesting how you can still leverage data for video games as an input even if the output is for something else. And with Crafts and also more just like more generally, we've seen signs that they

care to expand beyond just gaming. This is still ultimately a PUBG driven business. And of of course they've like moved into publishing and um you know are looking to publish all sorts of games. They've been prolific investors across the the games industry in recent years. But their latest big acquisition was of uh I think it was called ADK which is a big Japanese ad agency and anime producer which you know at the time signaled that Craftton wants to become a bigger broader entertainment company but now with these like doubling down on investments in AI it just shows that they're just trying to leverage what they have into these like concentric circle domains and maybe some will be more successful than others. It wouldn't surprise me, you know, like when you take these shots and you pioneer, not everything will work out. But I like seeing the spirit that Craftton has and just trying to innovate

and embracing it and pushing it forward and they will do cool do interesting things even if it doesn't all work out. Um, and we'll be like an interesting company in the process versus just, you know, taking a backseat and just watching everyone else do it and hope to not get disrupted too hard in the process. So, um, so yeah, I mean, just in general, I kind of like what they're doing. I don't know what to make of it all, but the the mindset looks to be on track.
Yeah. And it's I mean, hopefully like enough of the learnings become public. Obviously, we we often have to rely on postmortems and things of things that failed or just barely succeeded. A lot of times it tends to be the topic of postmortems because those are the more interesting ones to read. Uh but are we good at these the sort of if they're taking so many shots that that sort of filters out to others to learn from just because it's expensive bets to make? Uh obviously we're in a situation where you kind of have to make some expensive bets or you fall behind. So, it's nice when that sort of thing spreads across so that like as an industry we can evolve faster and not stumble as much because I

think as much as people love, you know, their doom scrolling and and watching videos and stuff on people failing, it would be a little bit better for this industry if we could fail upward a little faster. Uh, and and not so much stumble around like we kind of are right now as an industry. Uh, and so like, you know, hey, if Craftton's going to be part of that, cool. Like, they've obviously taken that PUBG success and are leveraging it in lots of different ways. And it sounds like pretty broad ways be beyond just the the game itself or just like expanding the brand. They did actually like seem to tighten things up a little bit recently too that they they shut down that PUBG blind spot that they were doing that the sort of like overhead uh tactical shooter game. So they I guess they backed off away from that one. So like you know hopefully we get a postmortem on that and other ones where we're like okay what what are they learning? as you said, the the Asian developers tend to be the ones taking all these shots and uh and being really interested in that. And the the economic side of replacing the workers from the physical standpoint is a really interesting point. Like I've heard of Japan doing the same thing where they're like starting to be more embracing of foreigners for example just to help

replace workers in different areas. And then of course like then well then we're talking about oh no AI is going to come take jobs but it sounds like maybe it's more like if those jobs are just sitting there waiting maybe we're like well maybe we need those to fill gaps and maybe the narrative sort of flips around where it's like let's say we didn't have a lot of experienced people to to be able to scale up in different and maybe maybe other territories become uh you know where we talk about westerns uh developers like maybe we're behind because we're like oh we have a zillion artists you know we don't need AI to help us there and so like we're maybe you know a little stubborn there but other areas might be like we don't have enough talented artists here we could use that stuff like uh you know I think of like like India right where they might have a lot of people but they need to build up some level of experience and things like that in certain places they can benefit from also mastering AI u to help scale up their workforce so stuff like that it's it's really interesting to see um where these bigger companies are spending that money
yeah we get caught in our own echo chambers all the time of uh like groups

and the headlines saying like what we should be doing because it's the right thing to do. And it turns out if you zoom out and look in different places around the world is just different realities and what you think is the morally right thing to do for you know your group is just not even realistic for for others. Um, and so, you know, AI, I think, is and robotics, you know, probably just like one more domino on a long chain of dominoes that, you know, it's it's good to be humble and to not get caught up in your own beliefs too hardcore all the time.
Yeah. Well, so speaking of um you know replacing people or like you know shoring up uh labor issues, there's an interesting one um looking at the mobile side which is definitely going to embrace like AI a lot more and I've said this a few times that it's just like people don't care as much there. Uh the gamers don't care, the game developers are also a lot more numbers focused, I

suppose. Um despite, you know, still wanting to be creative and make cool things. Um the subject being innov uh they were going to have to sunset Sunrise Village. Uh and and instead of doing so, they actually found that uh from the live ops perspective, they could actually implement a lot of AI while still having quality control, while still having editorial control and uh and ways to improve it so that they could keep the game going with basically a skeleton crew. They went I think from was like like 25 to two people or something something crazy like that where they scaled way back in terms of the number of people required to keep that game going and it wasn't so they could fire people so they could work on other games the way Embark's like hey we're we're using this to help us also work on many different games take more shots things like that something that's very difficult to do especially when it comes to like how expensive it is to develop a game prior to getting any revenue right it's not like a the movies these days where they where they make them in six months uh and then and then just shoot them out the next six games take years to make. And so you're in the

situation where it's like, well, we've got to keep this game going and we've got to make new games and it's we're not going to be making revenue from this new game for years and we've got to spend money to keep this other game going and hopefully make some money off that. So, I think it's a really interesting very public perspective of of how to do it where they're it wasn't just like, oh, let's just ask AI to do it real quick. they had to build out a whole pipeline and stuff. But it's really interesting that it's like full-on uh generating uh sort of some of the the thematic ideas, generating the art, uh and then that could be touched up by the the artists, generating the levels, populating the levels, I think even potentially doing some of the QA on the content. Um all the stuff that they were normally doing, they're having AI at least do maybe 75 to 80% of and then they're finishing up or making sure that it's doing it correctly. And of course, I'm sure tuning the pipeline as they do that. But having built that out now suddenly now this game is around for players to play as long as you know as long as they can keep that running and it sounds like that's economically feasible as long as it's making money. I mean how many games

have been shut down because there was less than the economically viable number of players yet there was still tons of people that it's like why can't this stay around? And it makes me think of like it really think about like say uh MMOs that all get shut down but then all have like emulated versions now where it's like fan run and it's like well that you know obviously it wasn't the server costs if people are able to sort of keep those around uh and keep playing those sort of emulated maybe there's the possibility for games to be preserved even longer with not just the live ops side but just even keeping a game running on the server side and stuff. So it's it's really interesting to see that the mobile being willing to and they're not being shy about it. It's like, hey, we're keeping the game going. We're still in charge of all of it. We're still touching all of it. It's not like completely hands off. We're just looking the other way, but we're able to keep content coming for you as a player without having to spend all of our all our money on doing so. And that means just longer play for players. Yeah, I don't have too much more to add about innoving

economics and just makes new types of behaviors possible. And you're you're basically outlining how that's working on the kind of the tail end of the game life cycle here, but I mean it seems like especially with mobile, it's just going to affect every stage of the life cycle pretty intensely both from prototyping to launching. Um like we've even seen on uh recently we're going to write about this in Navic Digest soon but there's been basically a spike in the number of apps published on app stores but also like games published on app stores like over the past few months uh because of tools like Replet and and such and uh you know we've starting to see stories about like all right this person literally prototyped like a thousand games and published all of them And you know, he's going to double down on the two that show like the most uh like natural organic

uh retention like the best retention and traction and and such. Uh and yeah, it makes a lot of sense on the earliest stages to the middle stages of if you are on this live ops treadmill and it becomes super expensive to maintain for a lot of teams um especially for bigger games or for teams that are located in certain parts of the world. like, yeah, this is going to change the way you work. It's going to change dramatically how uh advertising and user acquisition works with testing all sorts of different prototypes and pushing things forward and learning about, you know, like more intelligently of like why certain uh ads may be performing better than others and continuing to iterate. Yeah, just like literally every part of the mobile stack of game making I think is going to be um tested even on like game engines too which people don't question too much. like we're starting to see like companies like Bezi uh I think it's pronounced come along which

are building more like Unity supported uh like development capabilities because Unity and Unreal you know they're not very AI native for for game development and pose a lot of a lot of issues that it's just going to take time to unwind to help accelerate game development in a true AI native way. Um, and yeah, seeing more tools, more ways of working. Yeah, it's it's happening. This isn't even a future a future prediction. This is just literally what's happening right now. And, you know, I'm sure we can get more people on the podcast to talk into much into the specifics of like what they're actually doing and what they're seeing. Um, which should be super interesting. But yeah, it's just even from a distance, it's like very clear that everything is changing very fast here.
Yeah. And it's definitely something where um once we start seeing it at the engine level too that just will like proliferate it across so many different games that weren't necessarily even exploring AI yet. And it's one of those things where it's like that's leverage

across you know the whole game industry as opposed to just individual games. And I think that's something we'll see obviously over time here is productizing some of this where it's like there are a lot of startups coming out of it and stuff like that. Whereas right now it's very roll your own for what you're doing. What are your internal processes? how you how can you implement this in different ways? Everyone kind of figuring it out, but as people figure it out, you might even see game companies spin off their own thing. So like, you know, everyone loves to talk about how Unity was originally making a game and then they decided to make an engine instead. I think we'll see that sort of same thing where some of these people developing some of these internal tools uh may eventually go, you know what, like I'm going to go spin off a company from that like internal tool into a product that now everyone can use. And I think we've seen that a lot in the game industry where a lot of products were developed first for a game and then like hey what we're doing is great. I mean Unreal Engine as well like I mean that's literally from the game Unreal where they were developing uh that. And so I think that sort of thing where right now it's very you know patchwork sort of what can we do as people figure that out

that starts to spread because it becomes a product then that starts to spread around to different games and then it's suddenly like everywhere all at once. And I and I don't think that's that far off. But I think that's when we start to see it really take off. Obviously like there is like the issue though of course of the more you rely on other people's technology and that is one concern I have with some of this stuff is a lot of it's relying on uh these cloud services and other other sort of things where they're burning money right now. But that being said I think the concern about that sometimes is a little bit hedged by how often the open source models are usable and other things where it doesn't have to be perfect. it just has to be usable in production. And I think you start to see more of these things where it's like, hey, like I'm just going to run my own open source like little server here inside the company. And now I don't have to rely on those external tools, stuff like that. So I think we're already hedging bets on this stuff, which is great because like the future like is is getting prepaved a bit. I think with a lot of this stuff, even though it's hard grunt work right now where they're in there pulling out

weeds and paving dirt trails, like those are getting like turned into streets faster than I think we would anticipate with with a lot of other gaming streets because like you said, people are straight up just able to shotgun out games now at this point. And obviously like that the quality is going to be hit and miss with that, but like way more shots on gold to the point where it's going to get pretty overwhelming. And now we're going to have to flip to using AI for discovery just to sift through this stuff. So you guys can help help to help solve some of the problems it's creating.
Yeah.
Ultimately,
uh, speaking of which though, like uh I think another interesting area um that we've talked about here on the podcast a couple times before as well, but we see like companies like King using it is on the QA side. Uh, and not just QA in terms of looking for bugs, but QA in terms of like game quality. Uh, so like they have it for Candy Crush Saga where they're actually having it test levels and not just test it for bugs. They're testing it for like difficulty moves that people can do like uh overall balance. It's really interesting to see like QA beyond just bugs, but actual

quality assurance. Uh and I think that's an area that's like maybe underutilized. Uh and it's something that we're going to see I think a little bit more is uh humans can only test so much and we want to keep these games in such a big scale like we were talking about earlier. How do you make sure that that that works in all these tons of iterations? Not to mention also testing in tons of hardware configurations. We have so many problems with PC optimization, for example, that now potentially AI could be a help in that. I I think there's there's a lot of opportunity here to sort of help fix one of game industry's biggest problems right now, which is a lot of games coming out halfbaked and maybe AI could speed up that sort of baking like the microwave oven here for for sort of baking that last bit.
Yeah. Uh we've talked about QA benefiting from AI in this podcast a few times before um through interviews and such too. And even one of our um partners, Model AI, is doing like super interesting stuff here. Some teams will build their own capabilities like King and and Candy Crush. You know, what they need is very specific to them. But um

for other other companies that maybe are smaller working on more diverse kinds of games, working with a a model AI type of business makes a lot of sense. Um yeah, it seems that there will just be like pretty obvious efficiency unlocks here. One of many domains that will see those kinds of unlocks, but is a pretty pretty clear one.
Yeah. And as we talked about like when I when I talked to Model AI as well, like it's one of those things where you're like worried, oh, you know, is this going to replace QA people? It's like there's not enough QA people. Uh
QA needs to be done. Yeah,
we need help. Like it's clearly like it replacing people isn't the problem in that space right now. I think it's more just can we get the coverage that we need? Uh and it's more like helping the QA people at that point. So, I mean, I'm excited about that because as as unglamorous as it is, games coming out more polished, I think, is really important at this time because they're not. And it's a big problem because it's really expensive to do that last 20% polish. And the longer you spend in

that, you know, it's like it's just it's dragging game budgets through the mud and then making these releases premature because they have to get start getting revenue. As I said, you know, that it takes so long. If we can speed up a quality release, I think that will help. Um, and there's there's a bunch of areas as well that like um we haven't really gone into as much that are ones that are not tons of uh you know, public examples, but are definitely happening. So, like I know for sure a lot of people using like AI for rapid prototyping where it's like like I mentioned earlier really being able to actually test stuff out earlier and not just like pre-production on the game, but actually on a live ops game. I there's there's companies I've talked to that are straight up using it like hey let's try a new mode and like they can just throw it together in a weekend or like a quick hackathon day like a lunch break practically sometimes to just try a mode out when you've got like the level of integration where you can actually try stuff. It's amazing what you can do when it's not like I've got to spend three weeks talking in meetings and writing up documents about this. Instead, I'll just spend a lunch break trying it out. And

it just it just reminds me of like some of the the older days of game development when it was just a few people and they were just hacking away at the game and they would just try cool stuff out. And I think getting back to that phase where we're not like constantly looking at spreadsheet budgets and can just go what would be cool and fun and just try it. I think that's one of those things where like you're not going to like you're not always going to see it talked about but it absolutely I think will impact the fun level of games uh in a very positive way and it's you know not just for like indies but even like big companies where it's hard to move things in there without proving it first. I think the ability to prove it before you plan it rather than plan it for six months and then try and prove it I think will be a huge sort of flip on that script. uh especially when it's like the coding stuff was a lot of times the hangup, not really the art. And so now the coding side is what's being solved the fastest anyways. So I think that'll be that'll be really cool like especially when you know we talk about the engines where um you know they're trying to integrate potentially AI stuff into the engines. I I'm looking forward to the day when like

uh the AI has the knowledge about all the different ways to build an engine and it just builds you a custom engine
based off of like hey like here's all the pieces all the parts of what would go in an engine. here's what I might need my game to do. Grab all those pieces, stick them together, make a nice engine, and now you have customized engines for every game as opposed to having to take an offtheshelf one. It could be really interesting to see that that sort of uh prototyping level where ideas to execution actually expands out the things that we make instead of just uh how can I make what I'm already making faster.
Yeah, I'm curious if it will come to that. I part of me thinks that these engine companies will adapt and become, you know, just much more create much more compelling AI workflows in time. Um, and with add-ons and such to to help assist that flow. Um, but yeah, I think you're you're not wrong. We already kind of see that with vibe coding right now where you can vibe code a game. It doesn't use Unity. it'll just stitch

together some type of JS framework to to get done what needs to get done. You know, that's like a very miniature version of creating your own engine, but building more complex versions of something like that is interesting to to think about for sure.
Yeah, it's definitely impacting open source engines I've noticed. So like um GDAU is actually it's benefited a lot from the fact that it's fully open source to have the AI be able to actually comprehend in theory uh the the engine and actually be able to make modifications and things like that. Um and uh other ones like Cocoos and stuff like that these these other engines I think could benefit and maybe that's maybe that's a moment where Unity and and Unreal get a bit more competition from the leveraging that. But at the same time, I could see like if if Epic's able to say put it it put a AI in place to where now you can create blueprints very easily. So then game designers and other people that generally work at the blueprint level have access to whatever they need. Uh to where it's like okay, you know, the engine people doing the engine stuff, but then that gets exposed

to blueprints very easily and quickly because of AI. Now there's all of a sudden this like accessibility for other people within the company to be able to do things with the game that don't require looping in the programmers all the time so that they could focus on like the optimizations, the putting in the technology that they need and things like that. That would be really interesting. And on the other side as well, something that I I always like to talk about because I don't hear it talked about a lot, but I think is really cool on the roll your own side is tooling. um one of those areas where like game development benefits a lot from building customized tools inside where like hey this is something we have to do all the time. It's laborious to do but it's part of our game and no one else is necessarily doing it so they don't have a tool for it. it's off the shelf, but if I can spend, you know, 10 minutes asking Claude to whip together a custom tool that will do this for me, like the most common example is like a level editor, right? Especially back in the day where you're like, I need a level editor. Here's how my data is structured for the game because of the way I've coded it. I just need a level editor. And you have to spend maybe weeks building a level editor. Well, now

you can spend, you know, an hour building it because you can give it the exact specs that you want and the sort of uni user interface that you want and now you have a level editor. And I think those kinds of things will speed up production a ton by again enabling people that don't always have the access they need or the ability to do it within a time crunch to be able to suddenly do things uh in in within the game development. And I don't mean go fully rogue, but I just mean like this idea that you're empowering so many people within the company to be able to do so many things and like take ownership of different parts of the game without having it be this super complicated orchestration of things. Like imagine you're making a movie and you know you have all the people that have to build the sets and the props and all that stuff. But imagine you still have those people but you also have these 3D printers accessible where I could go like hey I need a I need a prop real quick. Like uh Fallout show was a good example of that where they did a lot of 3D printing right for props. So they could go hey I'll take the 3D models from the game. I just need a prop for that real quick. you're not necessarily cutting out all the people to build all the sets and do all the like set design and production design, but you're making it so now people that aren't in that

department can suddenly output pieces that are then useful or at least can be used for blocking and testing or whatever. Um, and so I think that's that's a huge lift that won't be glamorous and it will be kind of company to company, but it's absolutely already happening for sure. So I wanted to ask like you know from the business level, what companies do you think are best positioned to benefit from AI and games? I think Roblox is number one. Um, we talk about Roblox a lot um, across the podcast, but just to give an analogous example um, outside of gaming, Spotify and music is very well positioned in an AIdriven world because before AI, it was already the platform that helped people um, navigate more music than they would ever listen to in their lives. And so when AI comes and changes the creation side and you know it'll bombard Spotify with more AI created music, Spotify is there to just do what it always did and it can even

leverage AI tools internally um to help people better navigate for themselves what they would be interested in. And it operates in a business model that is already fit to to this era which is um subscription or premium. Um, and so I think a lot of those parallels apply to to Roblox where before AI, Roblox was already the place where gamers of a generation uh will figure out, you know, what they're interested in playing and they're never going to be able to play everything they can't. Um, and so when AI comes into the fold, it's just going to be a continuation of what already exists. But more games are going to get made, better games are going to get made, and Discovery is going to get even better. And that's only going to turbocharge the network effects that already exist and have already been doing extremely well. And so I kind of view this as, you know, it's just pouring gas on the fire of

like a company that's already doing extremely well, but is on track to become a titan of industry. And Roblox is already investing super heavily in its own models to make world creation much easier, etc. Um, and yeah, it too has a business model that just fits perfectly. Uh, where like this open free-to-play platform with additional transactions um um added in is going to just fit like what's going to work in an AI world very well. And so, you know, we can talk about all these other types of games and all these other platforms, but, you know, at the end of the day, Roblox still small in the big scheme of things, I think, is to me is the most obvious winner. And I I would give an honorary mention to someone like Tencent. um where I think it's hard to understate the value that comes from being a uh like a a gaming business inside a bigger

tech company in the sense that if you that tech company is p like driven in large part by games like it's going to be innovating in a way that is beneficial to game creation. And so, you know, we talked about all these examples of these teams building their own models, building their own internal tooling and such. A business like Tencent should be able to do that the best out of basically everyone. And it operates in a culture that is fully embracing AI and, you know, there isn't any any like societal worries of the same sense to to concern themselves with. Um, and so, uh, yeah, I'd be very curious to kind of learn more about what they're doing, but even just from what I've seen more surface level, it is super interesting and it seems like the kind of thing where the advantages can compound over time. Um, so, so yeah, I mean those are kind of the two, but you know, of course there'll be a whole bunch of of startups as well that just

build new cool interesting things. And you know, even though it might not be like a company that's the biggest winner, it's still just the the democratization of game making is a winner and solo devs and small teams are going to be massive winners of this wave.
Well, on that on that topic, then what do you think of the secondary ripple effects that we should expect from these changes? Yeah, I think I mean first of all the bar for funding games is going to continue to rise uh because if less capital is needed to get started because people can you know just more easily I don't want to say vibe code but you know like just be way more efficient in prototyping then investors will increasingly want to see evidence of progress and traction and we've in the past talked about how the investment landscape is already dramatically changing with with VC shrinking down, seeing more project financing, seeing more UA financing, etc. But this is yet

another catalyst for change that may also require new types of investors. Like maybe it's not traditional VCs that are best positioned here. It might not even be traditional publishers. it may need to be a different kind of capital providing entity that's involved in different ways at different stages and I think that's um very interesting to see how that will go but money is less of a of an issue you know than than maybe it was in the past and especially compared to 5 years ago where any most anybody especially if you're a big name could get giant checks um uh it's not needed you know in the same way anymore just because the way of working has has changed. Um, another thing I would I would say is that like for years the games industry was the tip of the spear of technological innovation. And you would often see like what happens in the games industry first is what will

trickle out to to the rest of the industry. whether it's like people being together online or what virtual like interactive entertainment online looks like or you know what have you that's not the case anymore especially in the west like the games industry is no longer pioneering um technology for the world and I think that's a big change and instead you know it's the big tech companies it is like this new wave of AI giants that are like pushing this like broader innovation and their progress will impact our industry's direction more so than it did in the past in my opinion. And of course there always was like you know big technology companies playing a role like with Microsoft creating an Xbox for example or you know Apple you know paving the way for you know what app stores are. And so, you know, that's not to like discount the effect that these companies have had in the past, but for where, you

know, the like true progress is made in what is possible um online and interactive entertainment, I think it's just going to come from different places. And because it comes from different places, I think the way it's going to play out will be a little different from from the past. Um where maybe those companies aren't going to be making games because, you know, that requires taste and capability that's fundamentally different. But even so, like is it going to lead to new types of distribution or new types of discovery or um just like new ways to create that are that are different than what we've seen? I would guess so. Um and that's exciting, but it's also probably just going to lead to a lot of change that I feel like is under discussed in the games industry because the games industry tends to look inwardly on itself instead of looking outwardly on everything else going on. And so I think that probably needs to to change in the years to to come.
Well, you touched on it earlier and I

think it's worth mentioning again is how much game development actually pushes other industries and like we wouldn't have AI where it is now without games because who do you think the GPUs were made for that are just snapped up like crazy. Nvidia is where it is because of gamers, not because of AI. But they're certainly going to leverage it for both. So it's it's it's really interesting to see that how that game industry has sort of pushed tech has pushed entertainment has pushed all these things. Obviously some areas are falling a bit behind and you might have to play some catchup but it's there's there's this very symbiotic relationship between tech and innovation and games maybe just because it's a voluntary pastime that that really is important to people um and and one of the newer industries compared to a lot of the other ones. So it's really interesting to see.
Yeah. And it's not to say that that innovation won't happen at all. Like we talked about world models and like the games being a source of data to fuel robotics is super interesting and probably like very important. But uh but yeah, I have a feeling the innovations

will be largely flowing the other way in the next few years and we need to plan accordingly.
Cool. Well, I'm sure there's there's lots more that potentially cover here. We'll link some of the stuff. There's a lot happening and uh and I think we'll hopefully be capturing some of that in that uh future AI newsletter uh with details forthcoming there. But I definitely someplace to look there to keep on top of these things because
my god, it is uh very difficult to keep on top. I I'm not joking when I read like six newsletters a day on this stuff because it's just so much to stay on top of. Um so definitely look forward to that. But thanks for for stopping by today, Aaron. A lot of cool stuff happening. a lot of the business side of things I think also needing to be discussed from a from a nice uh realistic perspective I think as opposed to uh hyper doom. So appreciate that perspective and thanks everyone for uh for sticking around. Hopefully you enjoyed some of the discussion here. Make sure to check out some of the stuff going on and the future newsletter. If you're not already subscribed, make sure you're in the digest and uh and catching the podcasts. Um, one one last thing I I

want to say before we wrap up is that um, if you have any questions or thinking through how to better apply AI to your company, um, come talk to us and maybe we can help in in some ways and you know, maybe we won't lead to the transformation of your business, but at Navic, we just naturally know a lot of the companies that are, you know, building tools and building like new interesting capabilities. And so if you're looking for specific jobs to be done for your business, let us know and we can probably provide you a referral that should lead to good outcomes. So if there's any way that we can be helpful here, um just just send us a note, find us on LinkedIn or on our website and we'd be happy to help.
Absolutely. I mean, you can always at the very least uh ask if you're not sure and chances are the answer will be yeah, we could definitely help with that. U just based off of
we can point you in the right direction.
Exactly. That's what I mean is it's it's been a very varied and and um super helpful business to a lot of people. So

definitely take advantage of that. But yeah, cool. Thanks everyone for tuning in. If you enjoyed today's episode, whether on YouTube or your favorite podcast app, make sure to like, subscribe, comment, or give a fivestar review. And if you want to reach out or provide feedback, shoot us a note at podcastnavic.co co or find us on Twitter and LinkedIn. Plus, if you want to learn more about what Navic has to offer, make sure to check out our website, www.navic.co. There you can sign up for the number one games industry newsletter, Navic Digest, or contact us to learn about our wide-ranging consulting and advisory services. Again, that is www.navic.co. Thanks for listening and we'll catch you in the next episode.