Mario Movie / Dream Games / Phillip La / Scopely acquisition / Sony’s Cloud / AI

foreign [Music] 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 full sun current events dissect emerging Trends and games share Lessons Learned and have a great time this podcast is also part of novik's growing ecosystem which ranges from free and premium research to Consulting and advisory services for more information visit www.navic.com now let's jump into the episode welcome to another novik round table we've got a good set of panelists here we've got Aaron from co-founder of novik who you've seen many times at this point Anil as well familiar face co-ceo first light games and Tammy Levy Chief games officer great title of a captain.tv how you guys doing today

doing great feeling it really we are we are ready we're ready to go we are got some coffee at least I got some coffee some water and ready to dive in well cool we've got some good topics today we're going to start off a little a little easy with uh some updates around the Mario movie some cool stuff around uh dream games their new game uh some stuff about Philip law leaving Sky Mavis which should be interesting and then some good deep Dives on scopely uh getting acquired by Savvy games uh Sony with some interesting stuff trying to do their maybe Cloud stuff and then some cool stuff around AI the Evergreen topic these days so once you kick things off Aaron yeah lots of stuff um so yeah we'll start with the the Mario movie uh which is officially out I know Anil you you and I are the ones here who have seen it maybe before I dive in Anil you want to give your your quick movie review for the audience

let's go uh it's amazing I think it's super great if you've uh like Mario in any way shape or form you've got to see it it will surprise and Delight you I think it's great then if you've ever seen the old one that came out in the 90s which is horrific with Bob Hoskins in it this is not that movie um yeah just because you see it it's great yeah I saw on I mean I also thought it was a fun movie I saw that on on Rotten Tomatoes it has a 57 critic score but a 96 audience score and that sounds about right like it's a fun not super deep movie but you know if you're a fan of the franchise you'll see lots of like interesting Throwbacks to the games and you know just have have a good time with all all the references um and such but you know more importantly than our our Delight the the movie is also breaking records the it's opening weekend amassed 377 million dollars and box office receipts which

broke the record for largest video game adaption opening surpassing World of Warcraft from a few years ago and it also broke the record for the largest animated movie opening surpassing Frozen two now I think uh inflation might skew that second one a little bit especially since inflation's been pretty high over the past year or two uh but even so it's a pretty massive success and great accomplishment and the movie is almost definitely going to tip over a billion dollars at the box office when when all is said and done so um quick context the movie was made in coordination with illumination which also made Despicable Me The Secret Life of pets some other animated franchises and I don't think that they have shared their joint terms publicly on how Nintendo and illumination or funding and profiting off of this movie but uh so I'm not positive what Nintendo will really walk away uh from this but

however you slice it it's going to bring in significant super high margin Revenue for Nintendo this year and give them some extra cash to to hoard away and probably give out as a dividend because that's about all Nintendo does with their cash but um but they'll have more of it um and um you know the interesting question then becomes what's next like will we see more movies in the Mario Universe well we see Nintendo push for other franchises like Zelda or Kirby or or who knows um to to kind of bring to life on the screen in some ways we we all know the power of Nintendo's IP I think this this launch with the Mario movie only kind of solidifies that further um but you know whatever we see it's going to take a few years yeah so you can't really View and it's it's also it's also coming off the the heels of their um opening of the of the theme park in

Los Angeles right so it's like it's a big big year for Nintendo um diversifying in in how they're leveraging their IP yeah so all of these plans they've been you know if they've been in the works for several years and so they all they all are now finally you know coming to fruition it seems like in really successful ways on on both sides but you know of course from the what's next lens if they want to expand it from here do more stuff it's just going to take even even more years so maybe it's worth the wait if they can figure out some new formula or strategy to um you know boost their their franchise revenues in a way that Nintendo is happy with and normally historically they've always been super conservative on the things that we do so it'll be interesting to see but I guess I'll just I'll just pause there on that it's been a great success but I'm curious if any of you have thoughts on what this will lead to for Nintendo do you think we'll see Super Mario Brothers the movie the game no or is that just too much

they did it with Street Fighter there was a Street Fighter the movie the game so um yeah no I don't think we see I I'm all on board the Mario Cinematic Universe though yeah they still got new characters to show too like Yoshi didn't make it in um you know they got the spoilers spoilers well it's not the same way I'm very excited I'm very excited that it's doing well right because it it opens that opportunity um for more movies in the in the universe and just leveraging the IPS like it uh if it if it wasn't breaking records then we would have a Nintendo that is like probably more hesitant of on going further into that direction but if it's doing well it's it's it means that just like more power to hey let's let's keep doing this yeah the the last thing I'm waiting for

that cap to den okay yeah the last thing I'll say about this update is that like obviously it's early but there's a chance that the largest movie of the year is Super Mario Bros and the largest show of the year is The Last of Us um and that feels like a really important milestone for the games industry and games industry adaptations um and you know I think we've we've said a few times before about like yeah like we're entering the the Golden Age of video game adaptations like I think we can firmly say we're in it now um but I I think I'd like to almost like tweak my prediction or play it for it even just a little bit more from like you know we're like in and entering the Golden Age too because of these enormous successes I think we're just gonna see the floodgates open and Hollywood's gonna start going crazy trying to get rights to video game IPS some are going to be great some are going to be really bad some are going to be in the middle and

um yeah it's just gonna be a wave for better or or worse over the next few years that probably will you know go through its own hype cycle of sorts but um yeah these early successes are still a great indicator of what's possible uh to come in the future when we think about all the other great franchises and IPS that we love yeah for for better for worse both uh the movie the the Super Mario movie and The Last of Us set a very high bar on what we want it's adaptations yes so I am I am also ready to be disappointed with the floodgates of things that come after well at least to this point we've already rid ourselves of Ube bowl from that last video game sort of a phase that we went through so hopefully we've moved on to better directors and better things uh so I anticipate a mix obviously but I'm excited about it but speaking of uh some goofy cartoonish

royalty uh we've got a new game from dream games coming out uh yes that's a that's a great transition into dream game so uh they recently uh uh soft launch in the this last week uh a new game Royal Kingdom it's very much in their same IP of uh their current game uh their their only game and first game Royal match uh and this is uh also coming kind of right behind some other announcements that dream games has been making so they they raised money last year uh from there they announced a new office in London so expansion into Europe um just as a reminder they're based out of turkey they're they're pretty much uh one of the big players in the turkey scene right now uh and they also announced some uh key leadership hires from you know X King in in uh the likes so the the game as I mentioned is Royal

Kingdom um it actually it's it's interesting because it it follows this uh what I feel it's like an old school Playbook of match three games and just mobile games in general but we see it a lot with match three games where uh in that space uh where it's the same engine it's the same mechanics it has very much this this it feels like this Zinga e formula of like do the same like a huge percentage of the game is the same there's this sliver of improve and there's like this tiny Slice of New so for um Royal Kingdom is the same Mastery engine uh it seems like they're trying to improve on the building metagame so instead of having kind of like a more flat uh progression and just you know very there's no real like meta game in in um Royal match we're just like you pick

one thing and just pay the build this thing that's it right um so they're going to like a little bit more like a map uh type um presentation uh for them the metagame it feels a little bit closer to like Garden or homescapes uh and then the the new piece is that they are introducing Attack Mode which seems to be like a light take on PVP uh from what I could tell it's it's very light it's not very meaningful I don't know if they're effectively like testing in and see if if they can do something more out of it uh all that being said uh as as I mentioned like we see this with a lot of magistrate in like this type of games like um tap two or match two which was like their the peak games ones uh so play rigs has gardenscapes homescapes uh they've launched a bunch more after that that have flopped like wild escapes and

farmscapes and who knows what escapes um Peak the games which a lot of the dream games folks come from uh so they're like post uh single acquisition of peak games pretty much follow the same Playbook they did two toy blasts then a couple years later they did toon blast it was with that same formula uh downloads you know they got a much higher traction on the second game on downloads uh they did see some Dau cannibalization from their second game taking off their first game but not as much revenue um and they positioned themselves to have a much stronger um arpu uh for for the second game my my question and my hesitation is that uh can can this strategy work in today's world like the world has changed very like the the mobile landscape has changed very much

from you know 2018 2019 to today so I mean the game looks great if the the match 3 core demographic still behaves in the way that they've behaved in the past of you know they don't necessarily like the core core players don't necessarily quit but they just like okay I'm now deep into that game oh it's cool that there's a new game out uh and they're basically like cycling between the two because their levels are getting much harder on on the older games so they have kind of well the refrigerator energy on the game where they're deeper they go and start a new game um so that's that's generally like conventional wisdom around How match three players behave uh but I'm I'm skeptical that uh it can it can work uh in today's world it would be great to see that they can find a second big hit

uh out of out of this strategy but I don't know um what your guys's thoughts are on on this what feels like a old school strategy and playbook in today's world um I'll go I I think well they are so good at execution right you pointed out already toon blast and toy blast so that's why they I heard they raised their their round on like the back of a napkin they just sort of said oh we're the guys that did this and we're gonna make another casual you know puzzle game and they were like yeah take my money and you know look how well they did they were the fastest ever unicorn uh in startup land for games so an amazing success story there you're quite right to say though can they make it happen again with you know the UA nightmare that we live in right now they're still very active though at the moment they're one of the companies that still do a ton of user acquisition across all platforms so for them it's either working well enough that they can still sustain it or they're confident in what they can learn I do know that when they left Peak that the the CMO from Peak is also part of the dream game story and so with three

sort of top 10 hits now you've got to back them that they would know what they're doing or you know I guess they'll find out during soft launch if the game can or can't work to me it looked like the PVP element was very much based on sort of coin Master it felt a little bit like that to me maybe not as deep but I think they maybe will have taken some cues from that but I do sort of agree with you in the sense of like what I don't see from them so far is anything to sort of make it go viral or kind of break use acquisition in any meaningful way so does that mean they're just going for quality and execution they feel that that's the way to get there Perhaps it is I mean if you've played Royal match I mean it's the quality is absolutely unbelievable for that type of genre I don't think you can um underestimate how difficult it is to make something that feels that good the whole time it's where the retention numbers I'm sure are super strong they're both set in the same universe too so we're gonna get a Royal match a Cinematic Universe and I think I'm I'm leaning too much into the Super Mario um

um I guess I'm just kind of rambling I think we'll have to wait and see I don't see anything inspired in terms of how they will break the UA angle but maybe it's still enough to work if you have Best in Class numbers that you can still be profitable and players will eventually want new games anyway even if you've played the same game after 10 years you kind of want to change they only have two titles right now that's a lot better than some like you mentioned playwricks and King where I do know that I've heard rumors that some of those guys have had problems where if the same player has like five of the same game they don't spend in any because they just cycle through the games whereas if there's just two maybe it's less of a problem we'll see that's my take on them I didn't realize the peak connection I think that's that's interesting um I I mean you both probably understand the ins and outs of the the mobile app Dynamics for me but I still can't sort of shake the potential cannibalism uh here um and part of me wonders uh this might be a dumb idea I'm just curious to get

your quick take if any part of this soft launch whether it works or not is there any chance that they could just take what works uh that's new in this new game and then apply it to Royal match the original game as an alternative strategy so they can still get the benefits but not have to deal with the um the cannibalistic potential tendencies that emerge you could definitely do that I I would be surprised if they did that though because that's not the Playbook that they did with Toon Blossom and toy blast they kind of just let them go their own separate ways and you get some cannibalization but at the same time it's like if you like the same thing you might still do it twice I guess it's like if you like uh a burger joint and then you go to another Burger Joint you might still spend in both Wendy's and Five Guys right because you you're like even though they're slightly different and Devin's not a fan of that he's like that would definitely not work but for everyone else you know if you like the core product and Tammy's you know again

hit the nail on the header like you could be very deep in one game but you play this new game it's a fresh Journey for you and you know you tend to be more excited and invigorated in the game in the early patch too and usually in that type of genre as well people don't really spend like an absolute truckload of money right it could be like a couple of hundred or something even if you're considered like a super fan and in the long skirt run of things that's really not that much for the amount of entertainment that's given you so people will double dip so I don't think any of these will be issues but all the things that you mentioned they could definitely take it across I don't think they'll do that but they could and I don't think it will categorize too much but it comes down to can they really get the scale the big thing is is that the targeting is so much worse these days than it was before that you either have to have really good ltvs on your game or really cheap marketing um I right now don't see yet what they have in either game that really makes it special but if you're just super good execution maybe it's enough and the the execution is there for sure like when you see like the game it's like they

from from what I could tell is like they made it even more polished and more feel good right if that's even possible so they're clearly like iterating on their execution with every single game one thing I wonder is like so I saw an ad for what I guess was Royal match like two days ago right on on iPad and now I'm sitting here thinking like which one was it for like because you know there's the you know the goofy King and like oh he does something dumb and then he loses stuff but I'm like at the end of the day I don't know which one that was for and I I start to wonder like is there sometimes problems with differentiation when there's like you know there's certain you've got that that Burger King looking King they got going there with the the ads and you know if you're a player of the the current the original game and you see the the ad for the new game are you gonna know it's a different game like other than recognizing the names different or maybe seeing like a mode that's slightly different like the PVP stuff are you just gonna think oh is there an update to Royal match should I go back and check for an update like is that do you guys think that's a problem

to differentiate the games like that when it comes to advertising and user acquisition I do I do think that you bring a good point there Devin because I think this is the closest I've seen any of these like sequels like quote-unquote sequels for these types of casual games to be like they're like identical um and they're like the same universe it's like oh the the I think that the the stories like it's the brother of the king or some something that upright but it's like they're identical effectively um and a lot of times the one of the big reasons to go to the second game like to go and release the second game is to you know your cpis like your acquisition costs are rising because you are like saturating your own market and Etc in the market um so by you know refreshing a part of the game including like some of how you're presenting the game it kind of resets a little bit your your acquisition costs even if it starts a little bit of higher base like it does

give you a little bit of a reset button and acquisition cost so I do wonder what um you know going so close in terms of uh Universe look and feel just everything like name will do to their um cpis because that that is like a pretty pretty bold take of like hey let's just like do double down on this Kingdom thing but on top of that as well the thing is is that because you don't have idfa anymore you can't do the targeting that you could do in the past and say hey I know that Devon has already played Royal match so I'm not going to show him an advert for this game or I do know he's played it so I'm going to Target a more specific advert towards it that's literally the point of the idfa changes right you can't do that it has to go more towards brand side so actually that's super interesting that you've mentioned that and come to think about it you're right I was scrolling like read it on my phone the other day and how would you know I just assumed it was

for Royal match but maybe it's not because actually dream games tend to soft launch their games in the UK quite frequently it could actually have been the new game and I'd be like oh well I've already played that game there's no need for me to play this game in which case that's quite a backfire so um I think you're onto something there well at least the Brand's recognizable enough right where maybe you don't know which game is for but you're like I know what I know this is a Royal match game right I mean we'll we'll see how that how that goes we're definitely going to be paying attention to that in the future to see uh when I see those ads like which which one is this for uh but yeah some good points there and speaking of uh old games moving on uh we've got someone moving on from Sky Mavis that was kind of a big deal when he when he joined yeah I'll take this I have to say Devin the transitions are so slick when you're on a podcast absolutely incredible so we're talking about Philip Love Philip La was uh his really famous guy in the industry he used to be at Niantic he was a director of product I believe on Pokemon go which was kind of a big deal if you remember that a few years ago and

then yeah a few years ago a big uh sort of news story was that he moved to Sky Mavis to take over axi infinity and this was just after the sort of Boom period and that blew up and they were going to concentrate on making the game you know diversifying the ecosystem making it all about gameplay and less just about you know this kind of a play to earn mechanic well he announced on Twitter recently that he says he's with Bittersweet emotions that I'd like to show I'll be leaving the Sky News HQ this week and and that's kind of interesting because if you look at what sky Mavis have been up to they did like a big raise during the kind of last you know bull market and you know web 3 hype sphere uh they now have three games whereas there's the Original axi Classic he was responsible for axing the origins which is kind of the rebooted version of that and there is another game called Homeland which is kind of like a farming game that's kind of like in beta and kind of out but not really out and they're kind of still iterating on that recently there was also some news that now thanks to their Ronin Network there's more people going to be building on the sky made this ecosystem unless

they're on the games and I'm wondering if this perhaps could be something to do with here because what I would say is that it kind of feels like for the ax CIP especially it doesn't really feel that mission accomplished to me in the sense of like it hasn't really reclaimed its form of Glory there isn't yet this kind of like really big new game that takes what was learned in the original one and takes it to another level so is that something that he's happy with or not I don't know I mean at the same time it's a very experienced guy super talented he could well have just gone on and want to do his own start hard for he doesn't like you know to have Sky Neighbors come bureaucratic I don't know I don't want to be too speculative especially as someone who I have a ton of respect for in a professional capacity but I think it is quite big news it to me it does signal maybe I ever strategic change there or something that's going to happen so I'm curious as to what the panel thinks about this and what you think could be next fulfilling I don't really want to speculate I I don't think we really know about him specifically but it is interesting that it comes a week after um Skye Mavis announces the new games are being built on on Ronin uh we

discussed that last week so if you didn't listen to that combo check that out we also Nico interviewed Kathleen Osgood who runs BD and she had some interesting things to say about how Sky Mavis is thinking about all of this and I think they still do care about the axiip and I think they probably would agree with you and Ill that there's more that they want to do before they consider it mission accomplished um I'm not really sure how Philip plays into that long-term strategy or not or if he felt handicapped or there was you know he wanted to do his own thing I don't think we we know but yeah the kind of the the chain of events is interesting in it and it does signal at least a new chapter for Sky Mavis um and in some way which is good to see I think um and I'm yeah curious to see where not just Philip goes but where this whole team takes the company NeXT how about you Devin is someone who's very you know into the web 3 ecosystem in sphere what

do you make of this I you know I don't I don't want to like be speculative but I kind of do at the same time I I think um I because he's like not exiting to another game position to me this doesn't look like the kind of thing that was voluntary on felt part but I don't know like I don't I've spoken to Philip but I don't know him personally well enough to say like he would or wouldn't do this right but going from Niantic to this position was a big position he was like a public figurehead uh to some extent right like he was he was very vocal as soon as he went over there and like that was a big deal like he was trying to help change the image of axi and I think that was like a positive thing right like oh let's shift away from the play to earn let's shift towards these things and like he was important as sort of like uh you know press relations in some ways right and I I don't know if that died down because I wasn't completely like following everything he was doing but maybe it just was like diverging but they also like to have this happen at the same time that they're that they're pushing things that aren't heavy axi does make me think that maybe they're

thinking hey maybe this axi IP we still want to do it but we can't bet everything on it right like one of those like four or five games that's coming is gonna have like axiip like the rest don't and that that says to me like they they know that they can't bet everything on it and maybe they were just like you know what maybe Philip sorry we just don't have like a place for you here they obviously didn't announce anyone to replace them yet either right uh so I I am kind of curious where that sort of position ends up there are other public well-known figures you know around around the game of Geo and stuff like that so it's not like that completely goes away but I do Wonder like do they start to shift their their public sort of image I mean they have like a million things around axi but at the same time that isn't exactly growing Sky Mavis as a company like the way they would like to right it's more Contracting things than Ronin itself you know is was kind of languishing without uh new games coming to it like you know the The Defenders illumination land wasn't going to save Ronin on its own as much as it's fun to have those Builders uh games so

it's I I hope for good things from Phil though like he always made a really good impression and I think he's a smart guy so I hope it's something that leads to like someone snapping them up and and I mean I doubt he goes back to Niantic but uh you never know like good always good possibilities for smart people and I see a lot of people constantly transitioning in the web 3 space like between companies uh you know like you just you just never know so hopefully it'll be a good thing in the end for everyone speaking of uh of people moving on and and things transitioning uh we've got uh an interesting acquisition of scopely so uh yes yeah we can dive into the the scopely acquisition and I'll set a little bit of the the overview and what the deal entails who who is acquiring scopely and then we can jump into uh discussion around uh you know this pros and cons of this uh deal but just quick overview uh Savvy games group acquired

scopely or announced um last week that will be acquiring scopely for uh the whooping amount of 4.9 billion dollars with a b um so that's pretty steep price tag uh who is Savvy games which is context it's effectively it's a holding company we've seen a lot of these uh prop up in the the last few years they're owned by the Saudi Arabia government effectively it's called the Saudi Arabia public investment fund uh where they have kind of like this this broader goal of become the next love for the video game industry diversifies saudi's Arabia economy away from oil they've already made some significant investments in the gaming space uh the the more notorious ones have been on the Esports front the they acquired ESL out of uh MTG and other holding companies Swedish one uh and uh they've also

invested in uh Nintendo or an embracer of their shareholders of Nintendo and embracer both at about eight percent um some notes on the specific deal so the valuation is actually really good for scopely it's somewhere in between their last two evaluations uh one in 2020 when they raised their last fund uh their valuation was the 3.3 billion uh and then they did another valuation in 2021 at uh came out around 5.4 so 4.9 it's an incredible like really good solid valuation for them based on on where they've been uh generally speaking I think that it's um a positive outcome for for a scopely just from like a purely like Financial perspective so they've had uh I think it's like somewhere uh north of eight rounds of funding so you know they've

raised you know close to a billion dollars in uh VC money uh it's a 12 year old company you know the exit strategy here are like very like narrow is you know IPO and I think that a lot of us could have bet that they were positioning themselves for an IPO uh this year based on where the market's at uh I think it's it's a wise thing to not IPO so at that point the the only other acquisition um sorry exit strategy is acquisition and there's not a lot of buyers at this size so I think I get really Narrows down their their options and and what they could really uh you know get out of a like get a good deal big enough um strategic investor so all in I think it's excellent outcome for employees uh investors the XX at scobley uh but I do

think that it's gonna come in with with some challenges which is uh part of sort of what I want to jump into um I don't think it honestly answers the the objective or like really you know using a word I don't love but like does it have Synergy with like the the whole strategy of setting like a like building operations Talent uh like geographically in in the region so you know yes they're gonna have like a huge uh company but um I don't think it quite works out uh for exactly like for for their goals uh and the other piece is uh scobley has also run into uh you know the headwinds of the post idfa Doomsday happenings of of the mobile landscape so

they had seen pretty rapid decline year over year from like 2020 um they've had kind of the second wind after or whatever number of wind uh after the acquisition of stumble guys where they you know went back and like got you know huge uh growth this last year but um you know they they do have to you know transition their strategy as well so uh it's not a slam dunk in terms of like a business that it's growing is more like a business that's in this period where it needs to figure out how to transition to the new world that we live in in terms of of mobile games do they have to go into uh you know I've heard some people suggest you know they have to go into like PC and console um some people suggesting they have to like double down on like their IP strategy so there's there's a lot of options there for scrubbly but uh only and I think it's

Financial slam dunk um potentially for the investors uh but it's it's gonna be not a slam dunk for uh Savvy games so uh I was wondering what do your guys's take is in terms of you know what is an expert skogly under this this new ownership um are they going to be able to grow their business uh you know given that they're gonna need investment and Savvy already is paying a pretty uh high price tag and then can you know Savvy games can actually take advantage of this acquisition well I think you're you're right that this is probably like roughly a best case outcome financially for scopely just given the The Limited options of ipoing would be tough and just there aren't many buyers when you're when you're this large and how they how they're exiting I think it is lower than their last valuation but as you said larger than

last time they raised money so all investors should be made made whole and feel um pretty good uh about the outcome given the circumstances as for what's next I I almost think it's important to also just provide more contacts for like Savvy and just like how much money they have at their disposal and what they could continue to throw at things and so um they just big picture with gaming they've dedicated 38 billion dollars to investing in the games industry and I think they said that it was 13 billion um I think I'm remembering that right yeah 13 billion set aside to acquire a leading games publisher and so obviously here here they are finally doing that or at least part of that um you know we've kind of said before that Savvy is like a sleeping giant in the industry we just have no idea what they're going to look like when they wake up and they're starting to to wake up a bit you know through through these various not just Investments but Acquisitions too and so even to put into

context scopely is their largest investment to date at 4.9 billion dollars but they've made six other one billion dollar plus Investments so Nintendo Activision EA Nexon take to ESL ESL being the the other one there that is fully fully acquired but even so out of the 13 billion that they have dedicated to like uh publisher Acquisitions this was still less than half of of their their budget basically which is just interesting thing to put into context because I do think that Savvy will have pretty high Ambitions with scopely once it is more fully integrated and I do think that a lot of that ambition is going to stem Beyond mobile it will be figuring out how they can build the console PC lag here and I think that is probably high risk High

reward we don't have any information about what that will look like how they'll like acquire Talent or build new Studios whether they're just going to use more of their budget to make more Acquisitions and then make scopely the vessel to kind of oversee the publishing operations that's sort of like I kind of think that might be a likely outcome just kind of given how they're throwing out the console PC Ambitions here too um but again we don't really know what that's going to look like but there's I have a feeling that they're just going to continue to invest and put more money um in in that direction so it'll be really into interesting to see see where where that that goes the other big like Risk here for me is just I think that Savvy is going to have to figure out how to maintain the leadership team at least in large part A lot of times when big Acquisitions happen leadership finds a way to get out pretty soon after and with the extra quirks of this one there's they're running autonomously

still you know theoretically so that should help but even so you know it's a change of Lifestyle to kind of run independently in California so then being owned by Saudi Arabia and the potential the potential changes that that happened there like do you need to be in Saudi Arabia like how do you have to cater to this whole other region in a way you didn't have to think about before that could put some pressures that you know maybe the leadership team who just became really rich with this exit um they don't want to think about so I'm curious to to see where where where that goes but yeah those are my my high level thoughts on a couple like really uh interesting pieces one is like the the leadership uh retaining the the leadership team they are structured to you know as you said remain autonomous in in their positions at the same time they a lot of them have been there for like nine plus years so

when you when you start looking at like nine plus years big payday uh new overlords uh there's there's just like a lot of factors there that end up like you know you start seeing attrition from you know at all levels but also at the at the leadership level of of the company um but yeah the the other interesting piece that you touched on is like just the big uh fund that that Savvy games has right it's like we don't see that like deep Deep Pockets I think like they're they're one of the players right now in this phase that are trying to get in the space with such Deep Pockets um so we don't we don't know where where they're gonna leverage that money and where they're gonna go next um so I think that that is you know even even some of the problems that might come with the acquisition not being quite the perfect answer they have money to throw at the problem

as a panel do we really think that that price is is good for scopely that I'm kind of curious uh given Zinger went for so much more last year I appreciate totally different market and Dynamics but I remember we touched upon spokly quite a few times in the the metacast and yeah it was always the question is like how do they get an exit because getting a billion in funding you know if you're a VC would you be happy with the return you made in I suppose it's like a three and a half X Forex multiple but I I I actually feel it's a pretty good deal for Savvy in my opinion given what you've said that they don't really have a vehicle to kind of launch everything con you're going to have like a world-class analytics stack really good you know understanding someone who's used to doing this kind of stuff price wise I think they got a good deal compared to the Zinger price I don't really know enough about this to really make an opinion but I I would like to pose that question to the panel it's

interesting I guess my take is that um uh and I guess the caveat is we don't really know the financials to like really be able to ground comparisons and real numbers so it is a bit speculative but if the Zynga acquisition were to get done today it probably would be done at half the price um which puts it much more in line with with this deal size I think um Zynga if anything was super fortunate and what they were able to to get away with there and take two I mean their stock price is still down like 40 or something 30 40 since that deal was made largely because of of Zynga kind of being an anchor this year for them so yeah I don't think it's the best return for VCS but I think when you look at the the cards that you've been dealt and you look at you know the playing field it probably was the best best way to play the hand is my my assumption now maybe they could have waited it out a couple years and reassessed an IPO environment and you

know maybe maybe there could have been Alternatives that would have been okay but um in terms of thinking about the now and if that opportunity for a massive you know payday comes your way I think they had to take it seriously and that's what they decided to to run with do you guys think there's any opportunities then for some synergies between scopely and some of the other companies that savvy's acquired like that that this could benefit scopely for example um outside of just the money like in terms of like hey maybe you can help solve you know some of the problems we've been running into stuff like that just like by being under one umbrella my my hot take is that uh scobley is coming in as the experts from from the group so they're they're effectively if anything coming in to solve an answer like help them answer questions solve problems that they just don't have experience with yeah and most of the other Investments so far it's partial ownership and

there's there actually hasn't been that much yet that's fully owned by a Savvy games group I mean I guess the Esports side of thing is probably like the biggest set we've seen so far but like between like ESL and scopely there's I don't think you can really justify any synergies there I think it's probably it is more Forward Thinking of all right we're getting our giant wedge of foot in the door and then we'll see what we can build on with this team well cool hopefully it works out for everyone at scopely there at least uh if they got their exit they can move on to other things but uh moving further east had some interesting stuff going on with Sony trying to trying to keep things interesting in the cloud yeah plus a few other things so very interesting stuff from Sony so they have um just announced as there's 22 uh job openings for for cloud gaming including specifically someone who'll be the director of product management for cloud gaming which is defining like the Strategic vision and how that's all going to come together so it looks like they're really about to make another big

kind of push into cloud gaming and if this sounds somewhat familiar it's because it is because if you sort of turn back time um Sony at one point bought a company called uh gay kite with David Perry who is their CEO and they bought them for a lot of money it was 380 million in 2012 so they've tried to do the whole kind of cloud gaming Spiel before they've had sort of some numbers and people using it on their own platforms and I find this pretty interesting that they would try to do it right now given that it has kind of been discussed at that on this podcast but um you know the Google stadium and the lack of you know it being you know really missing the barrier on every single angle that they feel that this is the sort of right time to come in and try that so I'm very interested to see what do that of course I guess the elephant in the room here is that Microsoft is really leaning to it hard with you know games pass and really starting to do very effective things there they've got the biggest Fanboy and Aaron bush with that product too who wants it to emerge on Netflix and then become this all-encompassing

super thing that's a great product I would say in terms of what it says so um and you know how serious are they with that there's also news that like some of the patents that they fire would have Mark cherny himself who's the guy who led PS4 and PS5 development from the ground up after the kind of debacle that was PS3 so it seems to suggest that it's it's a big part of what they're going to do for the future now there's a few other things I want to add to this later but I'll kind of take that as kind of part two and three so I guess just sort of starting off with sort of the the the re-4a into cloud gaming what you think that benefits Sony is it a good move for them to make yeah um I I think that it's it's different from Microsoft right Microsoft strategy is like you can play anything anywhere um on through whatever means and the cloud is just one way to facilitate that I think with Sony it still is much more of the Hub and spokes strategy where the PlayStation console is always going to be at the core of the experience then all the things that they do around it

whether it's VR or or this um I think that it's it's more for that existing audience and more providing them more ways to play and boost engagement and you know more more in that zone I think maybe like what's more interesting to me here than even just like the quote-unquote like Cloud strategy as like or like the delivery mechanism strategy is more like the angle that Sony might be rethinking their handheld strategy um and from what I've seen um the rumored cost of like the new handheld floating around is about 200 which is actually pretty reasonable um and if the specs are good and it's Sleek I think it could have a much higher attach rate than something like the psvr which is obviously tethered very expensive and VR games come at an additional cost but if the handheld enables players to be more flexible and playing their

PlayStation games that they already have or that they're already subscribed to through the subscription Services um I think that you know just like the switch now the steam deck I think that that ability could be really appreciated by that player base and it wouldn't surprise me that in the long run we actually see all of the the big three console companies um have some type of solo handheld strategy just as a means of uh you know expanding their their player base and boosting engagement in some way with Nintendo it's going to be built into the console with with Xbox it's going to be the play Anywhere strategy you don't need the console and then with Sony I think it'll be you know you'll have the console but you can play Anywhere is more the direction that I I seeing that strategy go but I think that there is a big opportunity to kind of revive the handheld Market in some way whether it's Standalone device or more like accessories for smartphones

and I'm excited to see where that goes but he was such a tease because that was going to be part two of what I was going to mention which is that they have this idea of something called the q lights which is their new handheld and you know that's not new ground for Sony they started with the PSP if you remember the uh was it the UMD drive that they had and then they had the PS Vita as well very nice pieces of equipment they never really kind of caught fire in the same way that Nintendo managed to achieve with their handhelds so this is their new one and yes what's interesting is that that is a very reasonable price I would say that's actually a lot cheaper than the PS Vita which seems to suggest that it's not going to be a dedicated piece of Hardware that can run a PS5 Game On The Go which they could have done right because I know you're another steam deck bro I believe I know that I'm one of those and I have to say being able to play Resident Evil 4 remake cross being on the toilet makes that experience a lot more terrifying than it already is in a good way so it's kind of a shame that we won't be able to get that kind of experience although maybe you can because if you're in your flat or your apartment your house whenever you can stream it and you can play it

that way so that's pretty interesting and how do these kind of things tie in together um so what do we make of that as a panel in terms of like how this as you mentioned it feels to me always that Sony have lots of different fingers and lots of different pies you mentioned VR there as well remember that they bought Savage game studios not so long ago to get into Mobile too um there's a lot there going on there in that in that Sony household I mean yeah I'll jump in is there more to that part too then yeah yeah I didn't mean to step on your toes there uh Adele but I guess I mean my I mean like my quick thought is that like I think that if they do this it's going to have a much higher attach rate than the psvr and we won't really view it necessarily as like a separate business line like the veto was in the past but if it helps um PlayStation players play more often it boosts engagement so they don't have to be you know stuck to their TV I think that's a win and that makes a lot of sense for a long-term direction of of a company like this I mean if this

um you know if this is true and it launches like I'll I'll buy it for 200 it's not it's you know less expensive than a steam deck or even other more dedicated um Hardware um and as long as this the cloud streaming works pretty well um I think it could be a pretty compelling products and a pretty great experience yeah I also wonder if maybe some of their mobile games will work on it in a kind of slightly up resveratware version I mean Savage was working on the shooter game themselves that would seem like a good fit some kind of steam depth like handheld that was not as powerful as a PS5 but may have some sort of native ability that isn't quite comparable just sort of thinking and spitboarding around um yeah but the rest of the panel what do you make of this news I think it's it's to me it's like it's an interesting positioning for Sony in general just because it all things considered as you both were saying like it makes sense um on the other hand I do think that

their they don't have as like broad of a catalog as you know switch uh you know Microsoft it's like play they have like whole other strategy that Aaron was saying in very deep catalog and like you know they're chasing that as well having like a deeper catalog and uh steam has you know can't even talk about like the steam catalog so we're where I'm kind of my where my head gravitates from you know this whole strategy is like how are they going to leverage some of the the cloud gaming push to also expand potentially their catalog um and part of that like you know leverage that catalog as part of like the handheld strategy so yeah we're my brain goes in terms of you know potential challenges is is more of that you know the the

they might have the hardware the price point do they have the games yeah it's supposed to like use the home station as the base right so is that something people really want because like haven't they had some of that stuff with like the PSP and the Vita and stuff in the past and like we've had stuff like being able to stream steam from your PC to your phone to this to the actual like uh steam link so this whole like idea of tethered like from your home base station do you guys even think that's something that can catch on because it's not new and I I don't get the impression that that's the the way people actually really want to do gaming on the go yeah this is kind of where I find the whole thing quite interesting because I I don't buy it either I sort of see different ways that you could win in this market and they seem to be doing none of those things so it's like you either go for this kind of cheap but underpowered handheld that's really popular amongst younger demographics which is the Nintendo route proven you

go for this sort of you know you can play high quality stuff on the move that you couldn't do normally and it seamlessly fits in when you get back to your your PC which is kind of steam deck Microsoft play anything anytime anywhere that kind of makes sense this is like you can sort of play it but only and it's a very specific instance and would you really want to do that I don't know the thing that's always puzzled me about Sony and their handheld strategy in general and even the cloud gaming is that I associate Sony with this kind of Premium quality super high you know almost luxury type of gaming that that you can play so when you play it on either handheld or cloud gaming the one thing you're not getting is that like Google stadia is like you can play this kind of down rest version with high latency version of this game that you probably already own in your own household that you could play otherwise or on PSP or PS Vita it was like yeah you can play this version of Uncharted of God of War that's pretty cool but isn't as good as the version that you

would play on your home console that you must never possibly own because you know what Sony and gaming is about so I am always confused around this but what I will say is it does seem kind of cohesive that all these things tie in together like the the mobile Studio purchase they're getting the the kind of cloud platform um I've always put a tidbit here in our mode that they bought Jade Raymond Studio recently and they were already working on the stadia game before they moved to Sony or all of a sudden that makes a lot more sense I remember that was something that came up in a previous metacast as to what they would be doing for Sony so there does seem to be some cohesive Vision here I would say on the surface I personally don't think it will be too great but let's see what the execution is maybe I'm wrong and you know when Sony knocks it out at the park it's always great to see well speaking of pushing new tech forward some cool stuff on AI if you want to take that away Aaron yeah so this will be a fun way to end today's episode I think so this past

week a new research paper from Cornell I think um started making the rounds it was titled generative agents interactive Psy molokra of human behavior and what the researchers did was create a sims-like Sandbox environment populated with generated agents that run based on some llm a learning language model they simulate quote-unquote normal human behavior so these agents they wake up they make breakfast they go to work or they have different jobs but what the llm enables is for these agents to observe each other to strike up conversations to form opinions and the software enables them over time to synthesize memories into higher level Reflections sort of like you know humans do which they then are influenced by and and their behavior and what's most interesting though about all of this why the paper is Making Waves is because this simulation is seeing interesting

emergent behaviors so for instance the example that they give in the abstract is that when one agent is prompted to throw a Valentine's Day party it creates Ripple effects um in in the stimulation the agents begin to autonomous autonomously spread invitations meet new agents ask them out as dates to the party and then they all coordinate somehow to show up at the right time and it's sort of a mundane example but one prompt causing an entire chain of events that count that compounds on itself and really realistic ways I think is super fascinating and the implications for this go far beyond games but at this point I don't see how we're not going to see long-term revolutionary changes driven by AI NPCs and the impact that they have on making video game worlds more realistic and and

Lively and unpredictable for better for better or worse and our our fellow host Nico two three weeks ago he published an interview with um Kion Gibbs who who's um the co-founder of inworld AI and I highly recommend checking that out but I do think that the part that still is under discussed is not just that NPCs will have more complex personalities or that they'll remember things and therefore make player interactions more meaningful it's the emergent properties between between players but also between themselves that can evolve these characters and game worlds in ways that simply cannot be planned by by anyone um and that's a really powerful notion that I think we're just starting to scratch the surface of and we're going to have to have a lot of difficult interesting complex conversations over time to figure out what to do with this and what not to do with with this so I am curious

um first of all what you make of all of this what do you make of the paper and how like do you think that you know the AI NPCs for games in the long run will be truly transformative in some way how big of a deal really is this I do Wonder like you just so as game designers right like you're trying to shape an experience like an interactive one you're setting parameters you're building a little bit of a design sandbox and you're saying like Okay like you could do these things but we're gonna try and push your behavior in certain directions we're gonna try and get you to do certain things to have this experience right like you know it's multifaceted but we like you know as designers you kind of want to shape that to an extent right like you have to give up some element of authorship because it's not a movie or a book whatever but when you start saying the NPCs can just emerge and do whatever it starts to get like a little unpredictable and like that's that's fun but I I can't see that applying to like every game right you can't just have every game where it's like stuff will happen we don't know like there's NPCs we gave

them stuff to do you'll run into them like I I feel like you even started to kind of see dipping in this Direction with that last Watchdog Watchdogs game where they tried to like make everyone matter kind of where you could play as anyone and they kind of had their own routines and things that they did kind of similar to this sort of way less complicated but it was also like that ended up like sucking up so much of the project that like they they had trouble like making a game on top of that sometimes because like they were just building all that instead and it's like this is really cool but can you plop it into a game is is the big question I think well but now surely they can I I think it will be transformative I think it only works in certain types of games it will work in open world games but imagine a Grand Theft Auto a cyberpunk a watchdog says he say where all of a sudden these side missions that you have can really be deep and fleshed that one that Italian mafia boss now the AI can make it have full drama and his brother Valentino that if you double crossed him earlier in the game now at least an entirely new different decision line and

then the game playing a lot of these open World Games isn't particularly revolutionary it's just fetch Quest really with a little bit of combat and Gunplay and driving yet super you know Grand Theft Auto is the most successful game of all time GTA 5. so I think it will still take time to really get it working right but I actually think that it it will be huge for this type of game um yeah you should be able to really make you know really compelling type of games that you have infinite replay value that every time you start the character personalities are slightly different each time and it really makes your own world I mean maybe it leads to different problems which is that if you're a game maker and a game is kind of infinite in this regards you know then does the player need to buy any more games uh you know can't they just play your one true game forever subscription model well maybe maybe you need that in order to keep the service going because that those AI costs are not cheap to keep generating that stuff but I think it really would work for that because yeah when it comes to like game production and design to make games like that it's a huge challenge to be

able to generate all of that content and to make it kind of cohesive and you would be surprised how kind of good enough still makes the immersion of the game incredible so I think with enough kind of um iteration on it and trying this stuff over and over I I think you could definitely make great games that fully utilize this technology and that is the dream right if you could play an MMO where every single thing is fully interactive and maybe the AI can even make you realistic buildings of inside interiors and things like this is like another challenge right where it's really difficult to get this going um yeah I don't see how you couldn't knowing the sort of speed that GTA's come out I would say this of GTA 7 or 8 would be my prediction for using this Tech and being world class at it and but I better be a good game for utilizing it yeah and I think you're touching on a point from like the Game Dev side that is like it's a constant challenge the amount of content that it requires to make like a lot of these games like

really immersive experiences and just games in general like the amount of content that you require from like from uh you know the NPC design World design are just like started touching on like all the different pieces of content like that's where you you know you it gets very complex very quickly to build like certain types of games uh but just games in general and you know a lot of I think that a lot of what Ai and like papers like this are bringing into a conversation is um how can we how can we use it as a tool and how can we use it as like you know help us shape games in a in a new interesting way I think like that is going to be a uh Advantage for teams that figure that out uh sooner rather than later I think like there is a competitive advantage on figuring out how to leverage AI versus like it's not

about shying away from it yet but it's like how to and not about like replacing certain roles but it's like how how can you know AI prop you up in a way where you know you can create a richer experience richer World um and this definitely hits that that note of like a richer experience in richer world just through you know you you can probably or potentially like set the the parameters of like how far the the NPCs can go in terms of you know defining their own emergent behaviors um enough like and once you figure that out then then you can create like this this world that you can still mold as a as a game designer but it also you don't have to like Define every single detail that is like so time consuming yeah I think um when I think about what's going on now I I think back to what I've heard about

Ultima Online when it launched and how at that time it was a pretty important moment for the industry in terms of for really the first time um the game couldn't control players in a sense in terms of like knowing what they would do and them trying to break the game and them the players turning the world into something that um was more in partnership with the game developer instead of just um everything fully determined by the game developer and this feels like the next wave of that where the cat's out of the bag and um we're gonna maybe not everywhere but in a lot of places have these AI NPCs that can make decisions that can't be fully controlled and as we do we see elsewhere with um you know Sydney and Bing and you know other places like you can try to set parameters but people are still going to try to find ways to to break them or to push the limits or you know even if you

make these NPCs have access to each other they can create emergent properties that you don't expect and so I I think it's going to be really interesting to see how moderation Works in this way like what do you allow to happen where do you don't but what can you even control and in some instances down the line um I know we're kind of running a bit over but the last time I want to the last thing I want to hit on here before we um wrap up is that you know on alongside these innovations that we're seeing that are super interesting that are brand new that you know take us sometimes to like really wrap our heads around the implications at the same time there are also criticisms that are rising up to um we see that there are um fears around AIS replacing jobs in the games industry and in other Industries there are uncertainties around copyright issues we've even

started seeing some like Nations like Italy like shut down chat GPT um and you know it's becoming more of like a a political um lens um these days um then of course you know there's the safety concerns around you know runaway AIS and all and all of that side of thing too but there's a lot of fear and uncertainty around everything that's going on here so maybe before we wrap up I'm just curious to hear your thoughts on should anything be done about slowing down um assessing managing these concerns in the games industry or should everyone just move Full Speed Ahead or does the conversation not even matter because someone's gonna go Full Speed Ahead anyways your last thought to be honest I I do I wish that above did kind of sit back and kind of really understand this because there is a lot of danger the danger being that if you create like a new worldwide financial crisis because

300 million people don't have a job anymore that's like some serious stuff that will take a long time to solve but unfortunately with the way that the world is it's kind of doggy dog and the people that will do it are going to do it and they're going to get ahead and therefore we've already unwittingly started this arms race so unfortunately I think it doesn't matter and you've got to embrace it I think we've seen things like this already on for sure on a much smaller scale but it's like you know when someone starts giving their products away for free and you monetize later what are you insane you know we're used to having forty dollars spent in in game what are you talking about you're giving your products away for free and and things like this it's just a way more extreme version of that and and I think you have to get on board because if you don't you're going to get left behind and that is unfortunate for a lot of things like I'm surely I know a lot of people in my own team have expressed concerns that am I going to get replaced by AI um and you know what I say to them is I

I know but I think it's extremely important that you start doing some research and learning how you can use it to maybe harness it going forwards because you know if not with us if that's the way that the world is going you've got to add your own skill set to understand how to use it cool well some great topics great conversation today I want to thank all of you of course for those great topics of great conversation and of course if you found any of these topics interesting make sure to stop by the Discord start some conversation there as well but otherwise we will see you guys next week for more great topics and more great conversations if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a five star review and if you want to reach out or provide feedback shoot us a note at podcast navic dot Co or find us on Twitter and Linkedin plus if you want to learn more about what novik has to offer make sure to check out our website www.navic.com there you can sign up for the number one games industry newsletter

navic digest level up your insights with our premium research platform novik Pro or contact us to learn about our wide-ranging Consulting and advisory Services again that is www.navic.com thanks for listening and we'll catch you in the next episode