Riccitiello Resigns / Diablo IV On Steam / FC 24 Scores

[Music] welcome to the Novi gaming podcast where it is our mission to explore the business and future of video games we bring together the industry's brightest Builders investors and thinkers to keep a pulse on current events dissect emerging Trends and games share Lessons Learned and have a great time this podcast is also part of novic growing ecosystem which ranges from free and premium research to Consulting and advice ADV services for more information visit [Music] www.nic.edu management and more than 500 Investments across the US Europe and Asia with its dedicated gaming practice light speed gaming the firm is investing from over $7 billion in early and growth stage

Capital making it by far the largest fund focused on gaming and interactive technology Light speed's Team combines deep expertise in gaming with a global multi-stage investment platform and a culture that truly puts Founders first selected Investments include epic games snap and stability AI as well as game designers and producers who led the creation of titles like fortnite Call of Duty League of Legends valerant Starcraft 2 and many more for more information simply go to gaming. lsvp Doc or check out the details in the show notes and with that let's jump into the episode hello everyone welcome to another novic round table I'm your host Dev Becker and with me I have excellent guests as always we got Matt Tammy and Dave here today how you guys doing doing great doing well do pretty yeah doing pretty good heading into the the last chunk of the year right we're deep in h Q4 now yeah definitely and I imagine we we will see some you know business

results of that of course uh as people trying to cram stuff into the end of the year at least the uh calendar year but uh we also have some great topics today uh a lot of stuff updating and uh just stuff we've been trying to you know talk about for a while hopefully resolving biggest one of course being Unity now losing everyone's favorite CEO some stuff on the stock market Acquisitions that should be interesting Diablo maybe coming to the uh the old hate train on Steam and uh EA managing to do I believe quite well with their FIFA switch up and then uh the unfortunate topic of layoffs but it's got to be said at this point so why don't we just jump right in to the unity topic sure uh thanks Devin so just a quick update here thought it'd be worth um raising this news item uh given the ongoing saga at Unity so the the latest is that uh John rello is out as CEO of unity um I he is stepping down as

I understand it um who knows whether he was forced out whether he's ready to retire or not we can speculate on that in a little bit but in short he is leaving the CEO role he's being replaced on an interim basis by a former IBM executive named James Whitehurst um and unity is saying they'll initiate a comprehensive search process find a new permanent CEO and they are reiterating their previous third quarter guidance um so I mean I I don't think this is a huge surprise uh he was certainly taking a lot of heat and he had been pretty quiet in terms of the public response uh to the backlash that was going on it seemed to all sort of fall to like Mark Whiten and some of the other folks um obviously not like a a beloved CEO generally he was the CEO of EA EA when they were named worst company in America two years in a row something like that um so I guess the the speculation next is like

what happens next with with unity who replaces him uh and also like what happens to the company does someone try to acquire them um you know do we see them make any further changes it sounds like they've already kind of made their backtrack uh they're not going to change the pricing structure too much anymore but what happens with unity um any thoughts on this ongoing saga or just no surprises no no surprises but I do think that there's uh there's been already some speculation that I've seen around uh about uh is Apple going to try to bid for Unity again um of course that would raise probably like FTC uh you know eyebrows there especially with iron Source under Unity so some something there would have to get worked out but um it'll be it'll be interesting to see where where Unity goes from here uh definitely you know a lot of of turmoil the last few weeks

over there yeah I don't I don't really see any significant uh bids for Unity right now uh a couple headwinds I think one money's not cheap right now uh was certainly a much uh better situation monetarily for Acquisitions back when app Len first was interested in in joining up with unity um two I think the second part is this has really highlighted what a challenge it is running a platform business and and where you can actually see significant revenue from um especially given you know you're now seeing even the Epic uh now adding fees for uh seat fees uh for non-game usage um for the uh for the Unreal Engine um yeah certainly not a surprise about John coming out you know the level of backlash is certainly uh warranted some sort of level of response over on

the unity side I think the question is what type of person are they going to you are they going to bring in to to replace John are they going to bring someone who is more developer friendly uh you know back to the days of you know when they when they first started up they really were a developer first company and and really had that image are they going to go back to something like that or are they going to try and and maintain sort of the we need to figure out how we're going to make Revenue uh out of what we have and and try to bring somebody else in that's a little bit more um you know Revenue focused and damn the responses from from the developers definitely seems like um at least uh for for the purposes of trying to keep the uh stock from pluming too much it might be a good idea to just bring in uh someone that you know developers like but that will still do what the board wants like you know if I'm the board I just be like well let's bring in someone we know we'll do what we what we want still so we're still basically running the company but someone that will make the developers H

happy because trust is the major issue now right at this point so think hey just bring in someone they like uh and then just you have them like mostly just say what what you know people want to hear but then do what we want to do I mean that's sounds like American politics as well but you know we'll we'll see I mean uh the obviously the stock is the big concern right now for the board right like they I got to imagine they're going to want to replace someone soon or at least just wait till this quiet's down and then just spend some more time searching if it's not continuing to affect the stock but speaking in stocks there was H quite a few different things as well as some acquisition news want to dig into uh yeah so that was a great transition and um you know every every week there's some little quick beats on whether it's Acquisitions or um St stock market reacting to uh you know a bunch of the game game companies that are public so I did want to go through some quick beads from the last week just to keep everyone up to date because we we

tend to cover a lot of these companies on a uh regular basis so um some news from uh actually two of the the Swedish companies that are aggregating and and acquiring uh game game companies the first one uh embracer we've talked quite a bit about embracer um and their rucky year continues last week um they actually got dropped from several S&P lists um in just for context like what what this actually means is you know it doesn't really it hasn't really impacted they're stuck um it took a a big hit at the end of September uh there doesn't seem to be a a significant drop um that came with getting dropped from the S&P list but it does mean that it's no longer part of kind of that um that aggregation or or you know list of uh companies that are being endorsed at good Investments so really this is going

to make embracers pass to recover from you know their lowest point right now in terms of their their stock price even harder like they're 65% of um they've seen a 65% drop so it's just going to make it very very challenging and I think it highlights just in general you know it it it brings up questions about this strategy of aggregating companies um in which is what what embracer was betting on all along and was very aggressive about um there's also you know questions about you know the how the the market perceives uh this strategy and um just kind of games um liveops in in in in general I think is you know it is hard it's a gate it's a it's a industry that has tight margins these days and uh that is certainly something that uh public companies don't

like to have so it's a little bit of a a tough spot to be um on the other hand um another aggregator MTD also Swedish they uh they kind of started around same time as embracer to do this kind of strategy of Acquisitions uh but they've been very cautious about it they haven't been Fast and Furious in the way that um Embraer was so um you know they they their portfolio is much smaller and they just announced their latest acquisition uh taking a majority uh of 70% on of uh snow print Studios um they're the makers of War Warhammer tacticus which uh launched last year and has been doing really really well um they've been out for a year they got bunch of awards um they've generated $24 million dollar in Revenue in their first year um and they join as I said kind of

a smaller portfolio with uh Ino games their main game being Forge of Empires congr Hutch games that makes um top drives in F1 clash Ninja Kiwi with the balloons TD franchise um and a team out of India play Simple uh that focuses on war games um so that's that's the latest there on on uh our Swedish friends uh and one that came out to Dave from the rumor mill uh and I'm going to caveat all of this totally Rumor Mill uh but Disney reportedly is looking to acquire a major publisher and they they threw out their very non-committal um maybe something like EA so we'll we'll have to see if that turns into into anything I mean Disney has uh the ability to acquire just like Giants and we've seen it in uh in you know

franchises movie franchises just brand franchises um so if they want to make it happen they'll probably will but um you know it's uh it's left to be seen if they actually go and and try to you know acquire someone like EA or someone else um it could be someone like like take two maybe um I don't know so what uh any any other additional thoughts to add to that uh kind of list of quick small Beats from the week I have a couple quick hitters um first on on the EA bit I think personally I'm going to just throw some water on that like this is like the news that comes up every couple of quarters that EA and Disney are going to get together or some compan is going to acquire EA um I was looking at this yesterday and there was like a game developer article that had the headline like Disney considers buying EA something like that and then that linked to a Bloomberg art article and the original Bloomberg article said

something like Bob iger's advisors recommend something like EA something like so it did just didn't seem very strong in terms of like sources to me uh maybe I'm wrong I don't know but um as I said this sort of Disney EA stuff comes up all the time but I am an EA shareholder so I hope someone acquires them um on the the MTG side I thought that was kind of interesting I was reading I think it was invest game so shout out to them um they had mentioned something about MTG was still kind of Riding High from their uh sale of ESL like they still had a bunch of cash left over from selling ESL to the Saudis which I thought was interesting um so maybe they will be doing a little bit more bargain hunting in this um sort of down Market period I thought that was interesting yeah I think the um in terms of the the purchase of snow prints there uh I I do think it's MTG strategy seems a little bit slower a little slower Pace

than embracer not just in terms of number of Acquisitions but also getting to know their Partners a little bit more before making those Acquisitions um And in regards to EA yeah it's let's see what we've had Apple acquiring EA NBC Universal acquiring eaon Amazon Disney how many times um like one point Microsoft was supposed to acquire the W yeah I think that I think that for me would would really is like it's probably like Disney's getting pushed to like you know through like their advisor more like Disney is getting pushed to like hey you should look at game companies um because you need to like you know add that to like for real like they' they've kind of like dabbled in in games and try to like license and have some small Studios but they've never really gotone big into games and I think that that for me like that's really kind of like the takeaway is

there might be a little bit more push there um for Disney to consider seriously going after someone big uh you know yeah EA probably not but who knows but someone big well I think I mean they certainly are looking at what is their overall media structure um you know right now iger's certainly getting pushed to devest the television stations and you know what is the replacement for those inside the you know the media ecosystem that they've put together right and as they're looking at IP that allows them to uh take advantage of you know all the ways they're able to utilize IP be it from film and television through to theme parks through to merchandise through to you know all the different ways that they uh take advantage of their property and and bring it across across all sorts

of media um you know there is a source for that in in video games and you know we're certainly starting to see that more and more inside um you know things being brought to television series you know such as the last of us and seeing the success of those these days is compared to some of the challenges that bringing video game IP had to uh to other media um you know much earlier um so I mean I can certainly see why people would again link Disney with EA it's just you know but at this point yeah I 100% agree this is just smoking rumors I think the the the whole conversation Around Da Disney acquiring any game company is an interesting one because obviously they've you know they've had games made uh around their IP and you know some of them have done well some of them have not but they've generally been a company that makes their money off of kind of Licensing out that IP right they build up the IP through movies and TV shows and things like that and then they license it out and that's you know part of how they make obviously they maintain some

control over it so I mean it would be interesting but I think their own like doing a lot of that sort of content creation themselves like through Disney Plus for example hasn't worked out great for them uh but at the same time like that's part of the problem right is Disney is not doing well in the theaters because theaters like Disney was already having to Hardball them as much as possible just to get like more profit than anyone else because they were driving most of the ticket sales through the all the properties they own and then that's kind of died off for the most part they've had a whole bunch of bombs in a row for the most part both in theaters as well as in Disney plus which seems to be like a big problem for Disney is just that streaming service altogether so at this point it's like what do you do obviously if if your TV channel isn't working if your uh movies in the theaters aren't really working uh the theme parks are down like where do they go from there and in staying in the entertainment business it does make some sense to consider whether or not video games are good fit the the question is obviously like they're not just going to make if they were to do so right they wouldn't just make a bunch of just Disney IP games right or Marvel or Star

Wars I mean obviously those would have get made and those there's tons of those already right like they uh they already like inhabit every platform but the question is then you know what kind of company with what reputation would they go for like they in movie studios for example they they had kind of a few different movie studios that would do different kinds of things that didn't necessarily fit with uh their sort of family-friendly Fair like mirror Max and things like that which that obviously turned out very anti- Disney friendly but uh you know there's that's what I wonder is like if they were to go to acquire a company obviously acquiring company uh with a with a both good and bad reputation like EA could be interesting but that that seems like the big question to me is if they're considering that which they probably should be just in terms of uh where else they can go from here it would be who actually makes the fit there but I mean in terms of people like moving their stuff to other platforms and stuff like that uh we did have some interesting news uh related to this in terms of Diablo moving over to steam uh along with eventually you know many other uh Activision Blizzard titles following up

from OverWatch thank you Devin and as Devon just gave away half of my story uh Diablo is headed off to steam uh so Diablo will be showing up uh on Steam uh as of October 17th uh the page is already live on Steam um and really is a followup of Activision trying to diversify a little bit where they're offering their titles OverWatch had made move previously um and of course uh you know now with the Activision Microsoft deal closing um you know we'll start seeing uh Diablo and other titles starting to show up on another platform uh namely the game pass so uh recently what the feedback has been is that look you know the soon as the the deal closes which people are expecting will close uh somewhere probably late this week early next week um that you know we're going

to start seeing a whole flood of Activision titles on a Game Pass probably not immediately uh we may see some fairly soon but by the sounds of it uh the companies are are are prepping people for 202s for when titles will start showing up on Game Pass um so you know we can probably expect to see Diablo 4 and Call of Duty Mo Modern Warfare 3 showing up on Game Pass uh hopefully early 2020 4 or somewhere between there and mid 2024 I'm sure um and for me one of the interesting things you know now that the the overall um transaction looks like it's going to close and we're going to start seeing all the Activision Blizzard King titles uh as part of the the uh overall Microsoft ecosphere the one one question I have for the group here is um once that has happened Microsoft's able to then start putting in their Xbox Live uh

login across all of their titles so um you know already exists with all of the the current Microsoft titles but now this can go into blizzard titles Activision titles uh King titles and in effect they will actually have the largest or widest breadth view of players habits where they're logging what games they're logging into you know if people play Candy Crush well what other games do they play do they play on Console do they play on uh do they play on PC um so I really am curious to see what the um you know what Microsoft does with that information are they going to start seeing some um you know suggestions of hey you like playing Candy Crush well you should try flight Sim on PC or you know you really like playing um such and such RPG you should go check out this other game um but I'm really curious to see what Microsoft does with that information and I'm I

wanted to open it up to the panel and kind of get your your alls take in terms of um you know once once Microsoft has that sort of information what are the things they could do with it uh I think the first thing for me that comes to mind um is that they they actually have an ad Network that they could plug everything into and get better insights like when you uh open up like your start your Windows menu or your uh like the little sidebar on Windows there's a bunch of ads they're starting to put ads and all their experiences um that's that's a potential Revenue stream for them I think they can certainly learn a lot with all that data I guess my hesitation is that like something that large will take a long time I think to really uh bear fruit in practice this is a massive organization uh with many different sort of um parts that need to be sort of integrated uh from a data standpoint and then you know cleaned up and organized and made accessible to everyone and um I think they'll get

there but I think that that's like a pretty large undertaking um at least based on my experience working in large organizations but uh I think you're totally right that that's like a huge opportunity for them uh and what they do with it will be really interesting they could do all sorts of segmentation and targeted offers and recommendations um yeah could be quite interesting like they already have that infrastructure in place because you you know right now you can download Microsoft collections on mobile and it does have Xbox live in integrated into that so they do have the infrastructure the ability to have all of those pieces already tied together it's now just adding in the the titles themselves in order to fill out that information yeah I think that um I'm I'm a little bit more skeptical about it uh just because so there's there's two pieces um that I mean it would be incredibly powerful if they do anything smart like even like basically like

aggregating and and smart about it um but I do I do agree that it's going to be um potentially like they need to have a vision for what that is first to be able to go to each individual team and each individual Studio because you are like separate Studios that are running all all these different games that are you know across the board um and get them integrated into that system and that tends to as as Matt was saying I agree that it just super hard to get that Traction in a large organization coming from kind of like the Mandate almost of like Xbox Microsoft into each individual you know team and game that they own or at least the ones that they care to to get that information from so I'm I'm a little bit skeptical about um their ability to execute it I I think that they need to have a super strong Vision on how they use this basically

footprint that you're calling out which is I totally agree it's incredible like just footprint across almost the whole the whole industry if not the whole like every single distribution platform um but if they don't have kind of like this cohesive vision of how to do it and what to do with it it's going to be either just thrown in like hey an additional login that you can do and then you know they don't do anything with that information or even like to get to that place where teams even integrate that additional login it just gets pushed into like the nth priority in the road map and not really tackled the reason why I think there is an internal push to do it or there could be an internal push to do it uh is if you look at Microsoft's push for as a services company uh with Game Pass you know games is a service uh in terms of the distribution side of things um you know

those those platforms work really well when you have a lot of content with a variety of types of content that makes people go yeah this is something I'm interested in paying you know nine you know nine bucks a month $15 a month 20 bucks a month um and so if they've got that that integration and have got all of the titles as part of that then it just makes a much more compelling offer um and yeah we're seeing the Game Pass is something that they are wanting to to keep moving forward um and for me that certainly two different minds of that you know from on one side uh as a parent I love the fact that game pass means that I can say hey you've got a whole hundreds of games to go play I don't need to go buy a bunch of individual games for my kids um but you know as a game developer uh you know the business model of of making games for a game passer Subscription Service certainly isn't as

enticing as uh more of an open market type game I have a couple thoughts related to that be curious to get your guys' feedback on related to this whole transition both over to steam and over to Microsoft uh somewhat related so uh the first thing is that uh OverWatch moving over to steam might have made some sense because it was like a free-to-play game and they obviously we're not doing super great uh and with a free-to-play game you're trying to get the biggest audience possible so it makes sense to go to the biggest PC platform uh you're like okay well I mean despite the huge amount of negative reviews you know it potentially exposes itself people go well I at least try it for free whereas moving over a premium game like Diablo that requires an upfront purchase is a is a pretty big deal because uh when it comes upfront purchas purchases you're dissuaded by negative reviews or at least I certainly am when I see like a you know mostly negative or even mixed I'm you know unwilling to make a purchase more often than not and there there's no doubt it's going to be review bomb to death like uh whether people like actually dislike the game or just dis dislike a lot of the

monetization things like that it seems like it's not going to be a great thing for da I mean they may get some additional sales maybe during steam sales but this doesn't seem like something that's really doing much to expand Dao's audience especially this late in the game when they tend to not be able to expand super great uh and it's time to start when season two starts what I mean the upside is that's when they've addressed the whole bunch of supposed issues like quality of life kinds of things and so that maybe this is a hope that people will give it a new chance but on the other hand I do wonder if this is part of a transition to move away from battle.net uh the whole launcher and everything like that as part of the maybe maybe towards the Microsoft transition where they start to move towards you guys are talking about merging IDs and things like that uh you know bethesa games yeah bethesa has their own launcher but look at the games kind of moving into the Xbox app and the Windows like uh you know Xbox uh games for PC and things like that so that seems like where this could be headed in my opinion and like that this steam transition is kind of a way to uh start to transition away from dependency on Battle.net uh you know prior to being

able to move into the other obviously you know Call of Duty as well is in Steam for example so it's not the first uh activation Blizzard game just one of the you know the second Blizzard game specifically the other thing is um that you mentioned the Game Pass stuff and it seems like it'll be an interesting mix for blizzard especially because they have not been good at sort of free-to-play live service models when it comes to making money they've been much better at least traditionally at the sort of big highly quality polished you know models where they they put out a game it's somewhat worth buying at launch or at least shortly after launch and and then you hopefully get your money's worth out of time uh and maybe buy some things but in general like the the inet purchase thing seems to work better for something like Call of Duty and while Activision has had a lot of influence over blizzard it hasn't really gone well with Blizzard's audience so I'd be really curious especially how that might be affected by Game Pass uh with these games being on there like so for example like I I I suspect that Starfield didn't get hugely impacted in

sales by Game Pass but as this goes forward especially people skeptical about future games coming out of Blizzard uh may consider just trying them out on gay pass so for example I'm very guilty of I bought payday 3 uh you know prior to launch so I could pre-load it and all that uh saw the horrible reviews and thought you know what I have Game Pass I'm just gonna get a refund on Steam because they're very gous about the refunds like sight unseen and then just play it on Game Pass before I decide if I want to buy back again so the those kinds of issues will will creep up I imagine as there's more like kind of competition between those uh and then I guess just lastly as a side note uh the merging of the IDS will be uh I think interesting if anyone remembers uh or I still dealing with the repercussions of the the Mojang merge from Minecraft over to Microsoft IDs I still don't think I've completed that successfully after many years of trying uh to merge those two so I do hope it's nothing like that and there's the chance we could see Battle.net IDs uh completely subsumed by that that service what thoughts yeah I it won't be

clean we'll just say that right now it's going to be a h hot mess for a while as they sort that through um but yeah I mean and certainly they're not Ian EA's had challenges in terms of switching stuff over from various systems even internal systems uh you know as you said Microsoft and uh Mojang had problems with Minecraft yeah it's going to be a it'll be a hot mess for a while it's an interesting point about battl net I hadn't really thought about that um I also didn't didn't know before you mentioned it Devon that Bethesda had their own launcher too did they did they do away with that completely now or or they still have it like I I'm trying to remember if like last time I went to try an update Fallout 76 uh which I don't really play much but it was like yeah try it out uh I I think it kind of directed me over to um the other installer where I installed it from but I don't quite Rec but I do imagine that that it's you know it's not the greatest launcher uh there's not

really a solid reason to keep it so I mean might as well move away from it especially with uh there's like there's no reason Xbox like Microsoft wouldn't want to promote their XBox app over that any day so it seems like some of these launchers uh from these companies acquiring them should probably just be phased out yeah uh maybe I mean I think like there's something to say for like um uh brand Affinity right like people might feel more strongly about blizzard than they do about Microsoft or you know they don't really follow the day-to-day of the acquisition talks or whatever like I'm only interested in my blizzard games I'm going to go to battle on that maybe there's a reason to keep it but uh to your point maybe it's also like a you know to use a a buzzword a synergies thing uh with the acquisition where they can just kind of like combine forces and you know have it all under one sort of Central Tech Team um you think they'd want to you think they want when you're going into those games to see the other games they have on offer and the value of the game pass and stuff like that it seems like it's a it's kind of an upsell

moment for Microsoft true true yeah you can always keep The Branding side of things all same Tech underneath just once's branded battle net one's branded maybe they have a battl net tray in the Xbox game Pass App or something like that um I mean I I know it's not uh necessarily a part of Microsoft but another sort of example Riot still has their launcher and all of their games are in Game Pass too and it's like sort of a separate update flow um granted not part of the Microsoft Mothership but another example I'm thinking about it from like the Game Dev side of it from like the consumer side it's like it's great to be able to you know access everywhere anywhere and uh just like that ease from from the developer side from the game de side man that just like is it it just adds so much effort um across the board like the more the more launders you have the more like places where you're like Distributing the game uh it's in many in many ways it's

worth it right if you're like reaching those players but it's uh it definitely doesn't come come for free of course big games big teams have the the central teams to help them with all that distribution as well um but it just makes it harder for the smaller teams to even break break through yeah I mean for those of you who've tried playing uh Ubisoft games or even some of the EA Gam through Steam you know kind of the pain of having the two launcher problem where basically like one launcher just launches the other which launches the game and then there's weird there's weird sometimes problems that come from that um like for example I happen to have uh bought you know Rainbow Six on Ubisoft which apparently was the minority everyone seems to have bought it on Steam but I actually have like a lot less problems launching the game because I'm just launching it from the Native launcher instead of having to launch two separate things and you know that seems like that could create problems with updating and then so for example ea uh went from their sort of older launcher that that sort of origin one over to like the newer one and that

caused its own weird issues with having to like update install even if you were just playing the games through Steam so it does seem like it cleans up some of that mess by just eventually transitioning people away from that older launcher especially like EA you know demonstrates when they could just kind of gave up on you know forcing everyone to their own thing so I guess we'll see like whether or not that's a priority I think it's probably an inevitability at some point uh unless they really really want to keep that brand Affinity but I think at this point blizzards unfortunately destroyed a lot of their own brand Affinity uh through many of their releases as of late uh we'll see if they can recover that but speaking of ea uh they uh made some interesting plays here with the FIFA license uh yeah so EA finally reached the the the day where they dropped the FIFA license and rebranded to um EA fc24 with the launch of their new game um kind of this year's uh not FIFA a game um and you know this this has been talked about for many years there were

Rumors in uh you know many many cycles there was preparation earlier this year um EA explained a little bit more of their thinking and of course there's a big piece around it um from the monetary perspective where you know the the FIFA license uh first of all the last time they negotiated 10 years ago they had very heavy restrictions on what they could and couldn't do with it um and what they could build with it plus a very Hefty price tag um you know there's reports that's go as high as like 1 billion uh dollars in a four-year cycle uh I I didn't get a chance to like actually dig deeper into like is that is that true or not but regardless I can see you know FIFA being extremely expensive um and only giving kind of like a bump potentially like every four

years with with the World Cup um so EA kind of aside from that they also mentioned that they wanted to build more of a platform where they can really speak to fans within specific markets so be able to you know speak more directly to like UK fans with like premier league and um Spain with La Liga and just like different um you know licenses and just uh you know more Affinity to what what the day-to-day uh football world looks like and um the other piece that was very interesting is that they also mentioned that they're looking to build um experiences where players can create uh you know more custom modes Maps kind of more of this movement of uh gam set plat as platforms as opposed to just you know kind of these static games that are controlled by the game developer only um so that's the Contex that they gave um

and you know the day was here uh they they launched the game uh they pushed really hard on the on the rebranding and um from the from the game specific from 23 FIFA uh to eafc 24 the game's not significantly different so the main you know the biggest thing is is the Rebrand that they're push with this one iteration uh but they did uh kind of take a victory lab coming out their biggest launch period uh after week one where they saw um over 11 million players uh you know get the game compared to 10 uh from FIFA 23 last year uh in their uh EA Sports FC mobile also saw um pretty you know impressive numbers and like I think it was like 11 million downloads in the first 10 days of release so all of that is to say it

it sounds like they didn't take any hit with you know moving away from the brand that they did a good uh launch um but one of the questions that you know I I have a few questions here for for the group but one is you know can EA actually sustain this success um and you know execute on that strategy of attracting new lers and do they actually have the DNA to build you know more of a platform um where they've even reference like fortnite Creator features uh or is you know EA not equipped or or we don't see it feasible that they will actually like you know go after that more ambitious um vision of of what you know EA I was going to say FIFA but it's no longer FIFA FC the FC EC brand can can turn into can

I just ask a clarifying question and maybe you don't know the answer but like what what do they mean when they say expand into a platform because like when I think of platforms I think of fortnite Roblox something like that and these are games that don't ship every year um like Call of Duty is isn't a platform um at least I wouldn't call it that but I don't know maybe you you have some more insight into so when they talk about it as a platform they definitely reference fortnite which is what piqued my interest and that was one of the the questions you know in my mind was are they actually going to move from these yearly incremental new releases to a live operated platform game right that those two are very different um so that's part of like my big question mark on on this strategy and them like touting it is they just look completely different like it sounds like they're positioning themselves to be able to do it

but they're just like completely different muscles they need to develop and and you know way of thinking and operating the the franchise yeah 100% agree with you Tammy those are much much different looking teams than uh what they've had to date where you know they very much are the all right we got nine months to build the next game and let's get it out um and you know maybe that's the reason why this year was uh you know much more about switching branding than about feature set if they've got a you know a different team that they're spinning up to to try and Tackle this platform type of approach but um I I don't know the the the FIFA machine that has existed for so long uh you know certainly uh it's a big big ship to try and turn turn into a different direction um I personally think they're going to

have challenges because that's as you point out it's a vastly different mindset guess the question here is whether the audience is fine with just like mostly buying uh roster change kind of upgrades uh I mean there's an interesting point to be made in terms of like uh the whole retail space uh versus uh you know the for the seasonal stuff like if GameStop is maybe just not for example relevant anymore um the whole idea if you're just buying digitally anyways of selling back your previous year and getting essentially the new year at a discount if that's you know weakening there might be less drive to pay full price for a brand new retail game and that's already become kind of like difficult to manage anyways if you look at like you know what's happened with Diablo 4 in terms of trying to manage sort of that in between live Ops uh making profit and The Upfront price has just become such a a sticking point and then there was also kind of the thing that we had uh joked about when we first were discussing this topic uh way back which was the idea that you know come Christmas time does does Grandma buy the kids the wrong game or not be

able to find it right and if you're in a situation where it's not retail anymore and you're just upgrading the game essentially yearly first off it's a lot easier to deliver a lot hopefully smaller files to be able to deliver quickly uh and then potentially they maybe could peac mail it out as you guys said maybe they don't have the experience for it uh and that might be something they have to deal with maybe even hire some people for or you know bringing some expertise but it does seem like there's the possibility that seasonal games might make more sense to transition towards more of a digital thing and and I'm even curious if if that's something that uh we're also seeing from say something like Call of Duty that you mentioned and uh at least the war zone right so one of the things that I thought was interesting was uh when I went to make some purchases recently in uh uh war zone two now war zone 2 is a sequel obviously it's a different game from war zone one and there was issues with transitioning stuff over from there and with the Modern Warfare 3 coming out I was like concerned like is my stuff gonna work am I immediately gonna lose this like a month from now and they made sure to call out on the actual store page once I found it uh no it'll transition over but

this that makes me think is there they no war zone 3 then uh are they you know shifting at least that game to being upgrade and upgrade and upgrade instead of uh you know a full new game and maybe this we're just seeing kind of the tip of the spear for a lot of these games that were annual looking at ways to make it a little smoother transition and focus on less around building huge feature sets out I mean we know all the money in FC or FIFA is in ultimate team anyways not in that upfront retail price like that's not really way they make the money they would rather just people like not hesitate on upgrading for the next year and get them to just buy the the Ultimate Team stuff again anyways I I I think there's probably more profit in that than than risking them not doing more Ultimate Team because they didn't upgrade the game I mean that's just my take on it I mean if you guys have any thoughts but I think those are two slightly different things in terms of Revenue approach versus um how the how how the game is actually distributed and and the team composition

because you can get a lot of what you're talking about from a revenue approach even with a more traditional team structure um but that you know transitioning I think to the team structure is a little bit more of a challenge I think you're you're right Devon that uh such a huge chunk of the revenues is from Ultimate Team uh and that does lend itself to you know an easy transition to more more of a live operation style uh of game production but um you know is the is the team ready to move to that that level and and and really make that large of a bet with that large of a a revenue generating title as as FIFA is for for EA and one of the things I saw uh with Rainbow 6 uh was Ubisoft really struggling to make that shift specifically because they were typically a company that was built around let's build and ship and then maybe support with a small team with an expansion uh

and that was about it they didn't really have like live op experience for the most part or at least a strong uh set of teams around it and even the whole organizational structure with all the different Studios still just wasn't equipped I mean they have some studios that had some experience uh like Singapore had done gustery gun Phantoms for example but it was a huge huge difficult thing for them to do because a lot of the mindset around even the development pipeline over time how much Staffing to keep on a particular game uh was huge issues because uh they didn't have necessarily that same like they were used to just let's take a our people and ship them over to another game to work on something else uh this was over at Ubisoft Montreal and so like they had problems with like oh we need those people back to support this and uh so so things like that yeah absolutely not easy I I totally agree that making that kind of shift uh would require the people with hopefully that some experience in that even if it's from another company uh to help make that transition because there's just so many pieces especially a Matt pointed to earlier a large company like that uh that making those kind of transitions is

not easy even at the the team level you're still dealing with a lot of times executive high level uh interference and a lot of that a lot of those decisions especially as we go into an environment uh where belts are starting to tighten quite a bit and uh I mean speaking of Ubisoft as well in belt sighning uh just quickly wanted to throw out as well that also they speaking of live Ops in this regard uh exify their their next game that's sort of live Ops kind of experience in sort that I guess related franchise because it used to be Tom Clancy uh and they took that off uh which you know purposely to give them a little bit more freedom uh around their IP usage and I think just some of the restrictions of the the license from the Tom Clancy estate was like maybe a little restricting on what they could do uh unfortunately was indefinitely delayed uh so that is not a great situation as that adds to the pile of long delayed games hopefully this doesn't become a skull and bones kind of situation where it seems to be delayed for ever uh but the the reason they gave was was kind of interesting and that they specifically said that there was

just like the I'm trying to remember the phrasing now but around uh like the expectations not being me met or like uh something what they seem to be alluding to possibly was some game design or balance issues that they were unable to reconcile uh quickly enough to push for a release as they were they already hit gold basically and pushed it to consoles got kicked back for bugs and things like that we're working on that fixing those and and then did a public test and decided it just like wasn't in the right shape that they wanted to be in which seems like a a big deal for a game that first off is live service therefore it should be able to ideally balance a lot of it on the Fly uh but it might just be more fundamental either monetization related issues or balance issues and I have to say as someone who played like pretty much all the betas for that game except for literally that last one uh it definitely did have some balance issues so I could definitely see that being a uh an issue but I don't know it definitely just a a side note there not not a story we want to get heavily into um actually sorry just to go back

to FC for second I did have a question for Tammy um so one of the things that that really drove uh back M was FIFA uh FIFA was um for a while the competition with kamami and winning 11 and those two different game styles and that really pushed I think both games to try and find their their version of what they thought football should be for players um and you know right now the EA doesn't really have that same level of competition so my question for Tammy is do you think that there is the potential for someone to push EA into um into a particular direction or without that competition do you think they're more likely to be a bit more stagnant outside of branding that that's a that's a great question um because I did have in my notes kind of like an open question about um whether detaching from FIFA makes them more

vulnerable to having a competitor swoop in and you know basically either either try to Dethrone them or you know kind of get them back on kind of this high alert of like man we we need to push the the envelope here um it sounds like they're trying to stay uh a little bit ahead of it just with rethinking their strategy with the franchise so I you know based on the numbers that they're seeing I think that they've just given themselves some breeding room on um you know competition nuts swooping in and like dethroning them very very easily or very quickly the next uh World Cup cycle is not for a few years um so if you know FIFA goes and licenses the the game the brand to another developer um you know EA if they're if they're staying on top of it they can pretty much prevent getting getting

pushed uh in a in a specific Direction and them kind of forging continue Forge their own their own path and their own future um I do think that uh I don't you know it's hard to see someone that can overtake them or push them at that level of competition right now um but you know I I do would want to see them I do want to see them reinvent the the Cadence how they thinking about um the franchise in general I think that if they don't then you know they're going to leave a door open there I think they have a real competitive Mo with licenses you know I think any any competitor would really struggle to go through that Patchwork of negotiations and agreements with players associations and clubs around the world and leagues like that's that's a huge competitive Advantage so I I'm not going to say it's impossible but if I were trying to compete in that

space I would I would take a different angle like I would go for less of a straight football simulation and do more like a a casual soccer game or like an arcade style game or I don't know a different a football manager type game like um something different um because that's I imagine I've never worked in that space But I imagine it's very difficult to overcome that um negotiating and like agreement Advantage they do have they do have signed like 30 30 leagues uh independently like they did a whole lot of work to get you know 30 leagues I think it's like 100 plus stadiums like 700 plus teams no you need a you're right mat like you need a Machinery to get any sort of license at that at that level that's why my brain went to like oh they licens FIFA and like some other team licenses FIFA and like that's how they shortcut it um but you have to time it with the World Cup um and then what comes next right like

they they need to like whatever team would do that they need to keep you know re like what do they do next like the the World Cup only comes every every four years um and speaking of like a more casual approach there's actually like a little game that came out I think last week on mobile AFK football from uh Wildlife Studios uh and the it's a um idle RPG like a a a football manager Idol RPG I was like playing around with it a little bit uh it's funny how you mentioned it man and then like they they took like a pretty creative approach where they you know they're doing lookalikes of famous uh players to just not have to license license stuff yeah I guess there's also the always the the opportunity to make a football game that just uses your own IP like as Dave

mentioned Mario Strikers there used to be mega b soccer I mean there's also the you know the ones that are trying to be that sort of MOA soccer hybrid like Omega Strikers which unfortunately isn't doing great but I mean as you as you said Matt there are alternatives to just trying to just straight up compete I mean obviously the Madden games were popular but NFL Blitz did fight on its own NBA Jam was a thing for a while I don't know if those have like super long lifespans but for for one-offs they see to do okay if they if they can get people's attention so there's opportunity I I wouldn't necessarily be out there trying to get the the FIFA license hoping I could compete with them I think given the uh the way that uh FIFA's shown their negotiation tactics to go uh I think I would I would be pretty hard pressed to try and make a deal with them uh unless they started getting desperate uh which you know wouldn't be soon after this deal you'd be waiting a bit I would think we'll see uh definitely like a lot of potential for things to shift over time but in the mean time EA seems to be doing fine and Christmas season hasn't even hit yet so we'll see if Grandma can find the game

on the shelves for that as uh Black Friday you know hits next month but in the meantime uh we we just wanted to kind of quickly go over some of the broader topic and recent events around layoffs which uh you know we've kind of not touched on too much but it's it's becoming a very uh popular I guess thing at the moment yeah sadly um in many ways this is like one of the new stories of the year for our industry and and um given uh some of the recent uh I guess updates to this story I thought it would be worth sort of bringing to the group and um seeing if we can make sense of it a little bit so um you know if you're in the industry and you've been on LinkedIn recently it's like almost every day every other day someone's posting about their Studio shutdown uh their company's going through layoffs reduction and force um and there was an article from venturebeat uh that references a site called video game layoffs.com that tracks this um and by their count last

month September saw 17 gaming companies issue Lay layoffs which was the highest monthly total for 2023 thus far there have already been five in October um and they by their count over 6,100 gaming jobs have been cut in 2023 uh and even um videogame layoffs.com uh states that this number is likely under reported I would agree with that assessment uh it's probably much more than 6,100 um and just a couple of uh highlights low lights the companies that have laid off the most people here at the top uh Unity then not far behind them was epic games uh Amazon embracer has gone through a number of uh reductions in force EA as well um Sega Game Loft CD project and then Microsoft um so obviously these are all big companies you have to be big to begin

with to have layoffs of that size um but there's also you know countless uh smaller Studios startups that have struggled and gone through through layoffs so um you know I there's there's no one specific story here but I wanted to kind of open it up to the group and just ask a couple of questions around like where do we see this going because obviously like it's a tough economy outside of gaming too and layoffs are occurring in uh Tech more broadly but for our industry specifically uh maybe just to start the discussion do you all see this as like a like a right sizing like these companies over hired and now we're getting back to you know quote unquote the right size for these organizations or is this just going to be kind of like a shuffling of the decks where people go from big companies to small companies or they go from one company to another uh where they're they find a more long-term fit uh or maybe it's something else entirely let's just start there what do you all think is

this right sizing um I think we are in a situation the game industry has gone through Cycles where they've had you know larger layoff periods smaller layoff periods there's cycles that happen during the course of every year uh I unfortunately don't think that this is really the end of it there are a lot of companies that have shipped you know are in process of shipping their uh big Christmas title with that unfortunately tends to come a reduction size of the teams that worked on that um so unfortunately I do see it as as continuing there are a number of other things that are a little bit unique though to this particular period where you've got the combination of coming off a very large uptake in gaming through uh period of coid which is now cooling off um and even though if you look at it from a growth perspective and kind of leveled out the co period we're still on an overall as an industry we're continuing to grow um it is a reduction

from that Co period so people were hiring for that time you know for that time uh hiring for you know hey this is maybe The New Normal um item number two this contributing everything uh money is no longer cheap it's no longer easy to um fund Development Fund people uh item number three inflation you know it's not just more expensive for people it's more expensive for companies so uh you know inflation is certainly taking a hit on on everything right now so I think it's really a combination of factors that is really attributing itself to to where we are today with the number of layoffs there are a number of openings inside the games industry so I do think that there will be some shift um but you know also based on what I've seen in other Cycles we will see some people decide that they're going to leave the industry that you know the the video

game industry certainly has its Highs but it's also got its lows and you know some people are going to look for a little bit more consistent um you know type of employment I've seen people that you know left really exciting video game jobs to go work you know making programs for insurance companies and that were it's very much I'm working 9 to5 and that's it um so yeah so yeah my thoughts are you know it's it's a little bit of unprecedented time in terms of the number of factors that are taking um taking into account for for all these layoffs and uh unfortunately it's not quite done yet yeah and I think to to to add a little bit to what you were saying Dave in terms of um you know the the is there reshuffle happening I think part of uh what's very new in in this you know instance of you know layoffs and and boosts and and and bursts of of bubbles if if we were to call it like a bubble of of uh post during coid where

where we had a High um is what you were saying about money is no longer cheap to to find basically like uh you know with all of the the broader economic factors it's harder and harder for you know small companies right now to pop up because and like startups to to get going because funding is is much tighter um with the exception of and this has even slowed down but with the exception of teams that are taking on some AI angle and money is is Flowing freely with that AI angle the difference is that part of that pitch is we're going to stay small and lean and leverage AI so that we don't have to hire you know we hire half the people we we are like a much smaller leaner team and find these efficiencies through through AI um so you know although we are going to see more I think more jobs open with kind of

this influx of startups that are getting funded um you know for for AI Endeavors I think it's going to be much slower to ramp up and and have a a a cap there because it comes with this Assumption of um headcount deficiencies seems like that it might be a good idea if you're just kind of laid off for a while to then learn that AI skill set so you could say well you know hire me because I could do double the work uh you know if they're looking for those efficiencies if they can't find those people to like in the remaining people in the company to fill that just a thought I I definitely would encourage anyone to learn the AI tools uh if you have the bandwidth whether or not you've been laid off but um so okay I think a lot of great points raised um one uh maybe just to rephrase the question a little bit I heard inflation I heard um you know funding is is drying up up um you know uh difficult environment um but outside of maybe like the coid boom for

gaming uh I wonder if this if these factors are unique to games or if we're gaming is just experiencing the same thing that every other industry is experiencing like many other Industries are being disrupted by AI many other Industries are facing uh difficult funding environments inflationary um you know economy like is there anything specific to gaming that we're um seeing the Fallout of um I don't know I think the last time we kind of had that same sort of thought you know games are Recession Proof um there was different types of entertainment available right like back then it was you didn't have your Netflix you didn't have free-to-play games you didn't have options that um you know allowed you to uh get a hold of a lot of content for very very inexpensive or for free or you know for 15 bucks a month um so I I do

think that there certainly is a bit of a a change there um you know if your your options were am I going to spend 15 bucks for two hours of entertainment or am I going to spend 50 bucks for 60 hours of entertainment you know a lot of people would say well I'll pay the 60 I'm entertained for quite a while um you know th those that decision point is is certainly changed this time around so I'm not sure if we're going to see that same level of um you know willingness to spend when they've got different options uh that are certainly a lot cheaper for people to to undertake I think that there's there's also one piece that is is going to be a factor here and it's a little bit of a longer term but you know we have kind of this this aging generation of Gamers right that that uh you know grew up with games uh and we have kind of like the new generation of Gamers coming coming

to age starting to get uh you know a little bit more disposable income um you know with with J years and and the Next Generation as well I think one of the big differences like they're much more heavily Gamers like I I was looking at some surveys and like you know it's like the majority of you know the generation plays games in some way or form um but there's also a piece there where we have these platforms these games as platforms with Minecraft with Roblox that are uh encouraging them in teaching them to build their own games and a lot of them are like much smaller like you know now you have developers that are like 20 years old and have been developing games for Roblox for 10 years or some something like that uh and I think that that's just it's just going to change the industry in in some way and it's going to change you know the how we think about you know just jobs and teams

in uh the size of teams it's going to take a little bit longer for that to you know shuffle out and and see where we land but I think it is it's definitely going to uh have a have an impact yeah it definitely seems like the impression I I always get in situations like this where a lot of this stuff's kind of converging is that might be time for some business model shift like obviously business models don't necessarily completely go away but there starts to become an opportunity just when the conditions are right for some new ideas or some adapted ideas to come in potentially you know just kind of that Evolution adaptation and so like you know Dave talking about uh the sort of streaming services being this sort of like I can get a whole bunch of stuff for cheap which is I'm definitely guilty of that having that mentality many times where I'm just like I got have 100 games for 10 bucks or I could you know spend 100 games on one or 100 bucks on one game you know like it's it's an interesting uh dilemma for people that start to lose their discretionary spending uh and start to have to pull back or like dedicate to Hobbies or something like that and so it makes me

think that you know maybe there needs to be some more adaptation around business models for game development for streaming games but the other thing that you know I think that maybe Tammy brought up was just this idea also around ugc monetization and platforms as well in the sense that uh you know part of the cost of game development is the content uh you know we talk about AI to kind of help with that but also ugc is another potential path for uh kind of offloading some of that work about the content uh to sort of make it like easier and then you creates a business model around that and it calls back to what uh one of the the Nexon people was saying at the Korea blockchain about maple story adapting the blockchain uh stuff for the business model to where it was also like he was saying like you know the these people are creating content much faster than us and more efficiently than us so let's create some economy monetization around that maybe that's uh part of this shift we could see is both those things where it's you know maybe some streaming services or other ways to sort of like handle the fact that you might not get money up front and that free to play is very competitive to acquire customers instead

you you know partner up with streaming service and then you find ways to to use that as a platform then to get people staying in your content uh and then creating for it and then finding ways to like capitalize that you know me on transaction fees stuff like that obviously we've got better tax or at Tech now for for taxing transactions and you know taking royalties things like that so it seems like there's a lot of opportunities here but uh Food For Thought definitely a lot of stuff and hopefully uh those of you out there affected by the layoffs are able to find quick work or you know find insurance company you want to work for that you're excited about uh there is opportunities out there I mean could be an office bace moment maybe you just want to fish and do construction but uh either way hopefully everyone finds a good home or at least something really cool to do in the meantime because unfortunately I don't think this is uh changing all that soon uh but also you know spend some time learning the AI stuff in the meantime though uh we thank you for everyone coming in today great topics as always great discussions you know feel like we're always almost limited by the clock if anything else because I'm sure there's plenty more we could crack into and we probably will in the next episode

of the one after that so thanks again for everyone listening as well and uh wish you all a happy weekend and we'll see you next week if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a five-star review and if you want to reach out or provide feedback shoot us a note at podcast nov. or find us on Twitter and Linkedin plus if you want to learn more about what navic has to offer make sure to check out our website www.nic.edu and advisory Services again that is www.nic.edu [Music]