The Next Era of Modding

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accessible content crossplatform support and incentive models that accelerate how great and premium mods can be in order to pull this off it takes hard work from multiple people across the gaming value chain so today I'm bringing together three Business Leaders to discuss how their teams are working together to Pioneer the next steps in this movement but first some quick context to start uh as you already may know overwolf through its product curse Forge has already supported hundred of thousands of mods and mod authors and become a go-to leader and partner in this space one of the most popular games leveraging curse Forge today is Arc survival ascended by Studio wildcard the super fun dinosaur infused nextg survival crafting game this game launched in October 2023 and also launched with crossplatform mods enabled on day one but super interestingly and as we'll dig into the modding strategy is to also support premium DLC

made by professional Studios one of which is look northw world with its Enclave survival Skyward expansion so to discuss what all is going on here and what it means for the future I'm delighted to welcome iie marchan founder and CEO of overwolf Jeremy stiglet co-founder of Studio wildcard and Patrick Moran founder and COO of lookn North world so thank you guys all for being here and URI let me let me start uh with you to the scene on all of this um first of all like what exactly does curse Forge enable here and from over Wolf's perspective why is now the time to accelerate support for premium mods so four Studios that want to integrate Creator communities within their game and make it in a way that is safe and um profitable and easy we're providing a One-Stop shop solution to kind of do all

that uh we built the tools and services in place to make it really really easy for folks like Studio wild card to kind of integrate that into the game make sure that it's crossplatform make sure that it's safe and that it meets their guidelines make sure that we work hand inand with them to understand how they're thinking about the game of the future of the game of the future of the content for the game and kind of facilitate this whole thing so I think this is sort of um what we do and what brings us here and and I think we're kind of the reason that it's very relevant and interesting these days is that um if modding started 40 years ago and back then it was basically reverse engineering games and then 20 years later we started having map editors and those kind of things we're now in the evolution of kind of the third phase where in game creators people creating mod can actually do that and make a living and we can see that on platforms like Roblox like Minecraft obviously and

also a bunch of the creative platforms that we power like GTA 5 or creators around League of Legends and now AR so this is kind of why in my opinion now is the time for ingame creation and UTC platforms this transition from being kind of on the sidelines but with a lot of adoption to being front and center with a clear business model and with continuous adoption from both Studios and basically all the other uh sides to the echosystem that's really exciting and and Jeremy maybe to set some context from Studio wild card's um perspective could you just quickly tell us uh about your company for those who might not be familiar uh unpack ark's history so far with modding and then just kind of tell us big picture uh what's going on in your premium DLC strategy yeah so uh wild car was founded in uh 2014 uh we came up with Arc survival evolved the precursor game to this in 201

15 and uh from very early on it supported modding in the traditional sense in the kind of Prior generation of modding uh with a kind of hacky Standalone map better it was specifically limited to steam using Steam Workshop but but that was a very popular feature of the game it was clear on PC that that greatly extended the lifespan of the game it generated a lot of end user creativity and player engagement with the title and just led to a lot of great content created by users but there was always the this very significant limitation that it was limited to PC not only even just to PC but PC Steam and that was clear pretty clearly never going to change uh as far as we could tell with valve but beyond that the the way in which we viewed modding the time was kind of a sideshow to the main game you know some of the the tools upload and distribution process was very hacky uh some of the processes were very esoteric and limited and it was just more

experimental in many ways and on top of that obviously for everybody doing it it was a wonderful hobby but there was no way to to make a living out of it um at least not one that we supported um so with the new game we said how can we make this kind of less of a sideshow feature of the game and more of a main pillar of the game um and uh we thought about it from many different angles technology and business but uh uh overall when we did the research was the company kind of at the Nexus of solving each of those problems because there are there are challenges on the technical side and on the business side even just in terms of well how do you compensate the users how do they choose how to be compensated what does that look like in terms of payment processing on each of the platforms which is very different depending on the platform and navigating all those Waters so uh uh thankfully we were able to part up with over very early in the uh kind of conceptual development process of arcv sended to figure out how to pull that off and and

the real kind of key I would say leap of faith is not just doing it on PC which is challenging enough but actually getting that kind of full ugc pipeline including the payment processing and premium aspect of it onto the the two major consoles last far our Xbox uh and Playstation so been an exciting road to to see that happen awesome well yeah as an arc fan myself I'm excited to see where this all goes but Patrick to set some context on your end I know look North world is a pretty new business just a year old or so um but maybe you could tell us what has been your focus so far and why does building premium mods in general and on Arc specifically fit into that strategic Vision yeah thank you for asking um well we're both a publisher and a developer and last year when we started we're a bunch of Industry vets so we've been at it I've been in it for 24 years our CEO Alex uh famously founded Bungie has been at it

for over three decades and I think we all recognize that video games had gotten too expensive to make from start to finish took to take too long they the the risk profile is massive and really if we were signing up to make a big triaa game we'd have one or two left in our career and I think that ay we saw some movement with um fortnite and ufn and a real desire to turn fortnite into a whole ecosystem but we recognized a larger opportunity um because they were not the first you know you obviously have roblocks and we also looked across the industry and thought it it only makes sense that when you can operate in these like tens of thousands or hundreds of thousands of dollars in terms of budgets and you can release something every month or two and you can move quickly and take greater risks and you can have strategic Partners in doing this this felt like a growth Vector especially last year when we were seeing massive layoffs and massive pullback and VC pulling back from investing in in traditional games um and arc when it up I was very excited

because I actually was on the Amazon new world team a game that was deeply inspired by the incredible work done at at Studio wild card as well as it its predecessors in the genre and that was an eight-year project from start to finish and cost upwards of $400 million and that is not within reach for any startup and not most game Publishers um and you compare that to releasing Enclave the the premium mod we just released in Arc uh which is 1,000th less than 1,000th of the cost and was made in nine months with four five people and that and you can take a concept from start to finish prove it out within a community that likes that kind of game gain some validation or not and reinvest or or move on and I think like that in terms of um a game making proposition there's nothing like it right now today and if you can do that we now have um 13 things in development at once and to be able to have that many things have that

release Cadence it's really unheard of for traditional game Publishers or developers so we're really excited about the future and I think overwolf it has really tapped into something here because there's lots of games with M really engaged audiences that would really benefit from maybe offloading a lot of the the the the the need for un unsatiable appetite for content to offload that to a community who love that game and give them the tools to do it and give them a financial incentive um it it gets me up in the morning it's it's what makes games really interesting again for me ER if you have a moment I want to follow up on a point Patrick made that I think is really really important to where video games are right now with service type games with service type games which is most online games at this point have trended in that direction over the last couple years there is this insatiable appetite for Content among players and it's it's totally understandable I'm not blaming players I mean so they're gaming dollars and they want to have you know endless fun with their game but it's very very very difficult for most midsize

developers to keep up with that if not impossible I mean even epic games has difficulty keeping up with that and ugc high quality ugc is a real kind of safety valve relief me release mechanism in a way for there to be fresh content in the game almost indefinitely and you know without the developer having to make all that themselves or at least the the core game developer I mean you is far more than that but but among many other things it is a way to keep the game continually fresh leveraging the creativity both of professional developers and of end users and I I think for these kinds of games uh it is it is a great Advantage the ones that that really leverage that um versus the ones that don't and players run through content and they are they're done and I'm going to give you a specific example of one and I'm I mean look I'm not knocking their success but uh but world you know went from 2.2

million concurrent users down to 25,000 concurrent users in the span of two months and I would argue that a large part of that is because they they they have not at least today they will fully Leverage The creativity potentially of of a community that could they ran out of content basically you read most the reviews like it was fun and I played it and after a couple weeks there was something else to do so I think games that really find a way to to build out an endless content cycle with uh with the creativity of the users are are going to find a uh less pressure uh to uh feed that that content uh that content treadmill that otherwise is necessary and um that that kind of was one of the things patri fly over there yeah and um Let me let me double click into that a little bit too and just try to understand like how this came together and like how are you guys

actually managing building um uh premium DLCs we can use ARC as an example um Can anyone build a premium DLC does it take deeper collaboration between teams far ahead of time to plan out like are there unique quirks you know on the relationship and planning side that are new here to to work through um Jeremy maybe I'll throw this back to to you and maybe you can just kind of talk about some of the realities and actually bringing premium DLCs from other Studios to life yeah so I think really firstly comes down to what scope of Premium DLC do you want to make you can make something that's almost like a standalone game very Advanced like the stuff look North world is doing and it has a higher Value Point higher price point if you're going to sell it or you can make something that's like a dollar or two and it's much more simple and maybe more in reach of you know know a standalone individual in a short period

of time something that is like that might be more along the lines of a cosmetic addition or a little utility Edition that kind of does one thing that might be amusing or useful to the player um whereas the things that look North world has thus far been working on are more like almost Stalone games they kind of take Arc as a starting point but then they add tons of new gameplay new game ideas and they they they kind of sit as a unique self-contained experience and that's that the higher and within that there's kind of a spectrum you know they're kind of moving up the value chain from hey a small little utility or cosmetic Edition there's um mods that just add like a new dinosaur to the game it's not a whole new Standalone experience like L&W stuff per se but it's not just as simple as a little utility thing it's like a new significant gameplay Edition the existing game and one of the unique things about the way modding has been structured in Arc is that um for many mods not all them some of the mods are constructed as Standalone experiences uh

like Enclave but uh many mods are actually what you might call stackable and meaning PE players can pick and choose to enable an arbitrary number of mods and uh kind of customize create their own custom game experience along the way based on which ones they enable um obviously one of the downsides of that is they guarantee those mods will be balanced well together or even in some cases interoperate properly together so it's a bit of a bit of an unknown depending on how many you enable but it does put a lot of power in the hands of the player to kind of find their own custom experience and if they play on a server the server operator can decide which mods they want to enable to customize uh that experience in in that way yeah um but uh but I think for teams it does provide kind of a spectrum of options in terms of just how hardcore they want to go with resource allocation and time allocation and the actual process uh thus far of creating a premium mod uh and how that you kind of

apply to do that I think uh Yuri can can better speak to the business side of that sure so first I think that we have examples of single creators creating these premium mods so to your question you know definitely doable um we have one creator for example that created a mod that brings a new sort of prehistoric creature to Arc which you can then uh tame and play around with and I think that was um if I remember correctly a five mod um so they can definitely create the mod but then in terms of scope and depth I think would be determine things like uh that would impact things like pricing um in terms of I think how we go about doing that um we're in this kind of environment right now where we feel like we want to both work with uh folks like look North world or industry veterans um they IGN their business and uh

they're excited about the opportunity so that would be on one end of the spectrum and on the other end of the spectrum is going to be a single Creator who's excited about developing an unreal and has you know an idea for something that we feel like is of high quality and it's going to entertain a lot of people and for that single Creator it may take um you know uh maybe even two years to produce something that is worthy but in their Journey it's you know that thing that makes sense for them and you know we have seen great game successes for Games built by single developers and I think definitely we would see those things with mods particularly with the tools that both Studio wildcard and us uh provide for modders so I think this covers your question from both kind of can a single developer do that and sort of how we're approaching uh content I kind of share both end of the spectrum but it could be anything in between yeah and and uh Patrick from from your side

looking at this obviously look North world is still a pretty small team and I can imagine how working across different platforms and games can pose challenges just as it may require like using different Dev tools or skill sets you know for different projects I'm curious what you learned operationally um about taking the leap to build on someone else's game and any Lessons Learned um that you took that you just have as takeaways in the the process of doing so um well one is is to spend time with the community you know um so actually play the games and that seems obvious but a lot of Premium developers might skip that step and come with a better idea how to quote fix the game or make a better game so I think you kind of have to as an industry vet you have to reset and actually just go play alongside this community and get to know them we we found a couple our communities that run their own servers chaos gaming and South

Division and and brought them on board we brought some streamers from Arc small streamers like 20 25 people we had them play the game and get feedback before it was released so finding validation paths before you come out is is a key one um yeah the the tech and tools are challenging so we we have a pretty distributed model where we can look for we produce everything we direct everything and we're pretty Hands-On we have Tech director I mean we're fully functional game development studio with a couple teams um but we will look for expertise we had so we're always looking to fill gaps you know so we were able to find a couple devs that had worked on the original Arc survival evolved survival evolved who knew the tools um and that was a really good compliment to hit the ground running with Arc um and we even like one question we get a lot is industry vets say aren't you just going to get beat by the solo Dev working in who's been in this community for a long time they know it better and that the

answer is yeah probably and they're a resource so we've actually at the beginning of this year we started a Creator label like a record label but for creators um so like an artist friendly record label we we give them a advanced guaranteed marketing budget um and we also do anr so they they embed with our team and they can shoot us questions like Hey how do I implement this or can you do a little art here we jump in and we help like Elevate their skill and their craft uh we have two signings so far so I I think like there's a lot of room for business model disruption when you have thousands of creators of varying skill levels and there's a real opportunity um if you can build trust with them and credibility to partner with these folks um as a resource so that now you can operate both at the Creator level and the and the professional studio level so um that's operationally kind of I mean that's not just a publishing deal if you're doing anr artist repertoire it's like a record industry term and you're actually developing skill sets and leveling up these creators that's that's a whole new

way of doing business in the industry we think so um yeah so I think there's a lot of operational bits and Bobs also we don't specialize it's hard to we all wear a lot of hats um you know we jump in and help each other out um I'm I'm the business person or the operations person at the studio and yet I'm I'll do audio or I'll do a Crea a pitch or Draw from my background wherever I can to help pitch in so there's not a lot lot of um I only do this at the studio we all do a lot of things yeah for a moment to something really interesting which is I think that that that the kind of crazy thing about ugc right now is it is feeling overall I think a real Gap in the industry because there is this kind of nether realm between pure like hobbyist dabbler who's just kind of trying to if maybe even video games is something

they want to do as a career can do as a career to make a living and like the you know professional veteran who has you know made a career out of it and is you know actually been doing that for years or whatever and and now um that's that's that's what they are they are a game developer and then there is this there's this kind of Middle Ground of like hobbyist who's maybe you know capable but isn't quite sure or doesn't even have a job per se typical job in the industry how do they make a living right you ugc is actually the answer to that I mean it is the only answer to that and what's interesting is prior to very recently last couple years there was no like actual way technically or otherwise to do that and you know Roblox really I think was probably the first to really at scale them demonstrate there's an economy here that can work for those

kinds of creators and then and then fortnite more recently has taken that you know to a I think much in a different way and and I kind of want to actually do a quick compartive analysis if you don't mind of roblocks ufn and Arc in terms of what they're bringing to the table because I think this is very important and I've thought a lot about this sure uh so Roblox does let creators sell their content of course um but in my opinion and I'm speaking purely for myself here I think their tools are a very significant limiting factor for profession for people who really want to create professional quality content maybe the tools are getting better but ingame tools are always going to be very limited no matter how good those in-game tools are because what's interesting about Arc and also ufn is when you make content using Unreal in that way you're actually using the final tools of gameel like there's

no there's no soft coding that there's it's not like abstracted out you're actually learning as you make this content how you make a game of any degree of complexity and any degree of professionalism that's just simply not the case with with Roblox so I think it's a great stepping stone but I think it's somebody who maybe wants to move from that into making a full end to-end game you can't really at some point you would outgrow that or you become very frustrated with the limitations of that know people are very clever and they work around as limitations but they are limitations let's be clear and so I think for me that is kind of where Roblox ends is where like well okay we want to make the leap from that to doing something even more complex ufn is a little different in that regard you are using the full tools of unreal when you make content for fortnite in that way but there are two downsides and again getting pretty granular here um epic has deliberately hobbled the engine in certain ways now going to short coat that uh they disable aspects of the

engine that they consider too risky uh for um the stability of fortnite uh one of those things but not the only one is they don't allow access to the lower level uh virtual machine that operates most of unreal logic called blueprint and they try and Abstract it out to a higher level text scripting language called verse which lets them sandbox uh performance and functionality for stability and presentational purposes I get why they do that but I think you know for developers who are looking to make something of epic's own quality that's not in the near-term cards maybe eventually but I'm going to tell you from a technical standpoint verse has like a 50x performance differential relative to blueprint so it's like not even you in Blueprint itself has like a 10 or 15x performance differential relative to Native C++ code so it's like just like you're like dealing with layers and layers and layers of just performance degradation and limited function it I know would say well it doesn't matter you know most the the

hard systems that need that level performance we've written for you you'll be fine uhhuh you know when they one of the things they said they're going to rewrite fortnite on verse to kind of demonstrate how powerful verse is going to be going for it sure fortnite a relatively simple game I mean I mean simple in terms of its mechanics when someone writes a total an uh Warhammer Total War Style game inverse then call me because like games that need a lot of performance with respect to their logic operations to be like trying to wrate write a really complicated game in JavaScript and have to perform so anyway verse I think is I understand why big has done it but I do think it kind of it puts a very strict sandbox on what you can do with unreal and the second thing is epic's business model which again they can change at any time and again I speaking personally for myself here in in regards to analysis of this but right now they don't let uh creators directly sell their content they have compensation mechanism that is VI based and engagement based and I would argue

that's like trying to sell that's like trying to make it on Tik Tok it's like maybe you do maybe maybe you do but like 0.1% of people are going to make a really good living that way and everybody else is goingon to make no money because there there very hard to appeal to a niche audience and make money that way like with with direct sale you can have a thousand users that really love your stuff or 5,000 years doesn't really love your stuff and you're catering to them but if it's View and engagement based 5,000 users going to put you into the the top 10,000 you know uh in terms of the content ranking so there's almost no point in making Niche content with that kind of model um and um Le at least you're try to make a living so I think they could change that right now I think that is uh a business model that will lead to certain kinds of things and not the other kinds of things and so we with with Arc at least we wanted to go with a more traditional model of look you set the price you want to sell something at and you know there's people willing to pay that then

great if there's an audience for that no matter how small that can support what you need to keep making stuff and that's your call as a Creator we're not going to make that decision for you but also outside of the business aspect the technical aspects when you make content with uh the arc development kit and distribute it with um with curse Forge and overwolf uh you're actually like basically using the full gain development tools the same tools that we use to make Arc itself with pretty much nothing held back the only thing we can't let you do is only you change the C++ code behind the game but outside of that you can change anything inside the game remake anything inside the game make even a whole new game we made a platformer demonstration just to show like it doesn't even have to look or play anything like Arc it can be completely different than Arc and and I think access to those tools does something else for Crater it lets them find out if they really like making games as a developer using tool tools of a developer not some kind of abstracted

water down in-game tool set and not some kind of limited version of unreal and they can use ultimately a business model that's much more similar to say selling a game on Steam and I think it the key here for us to think about it is how can we fill that gap of somebody who maybe wants to dip their toe into the realm of making a career out of this without necessarily you know having to go and form a studio and raise capital and all that so it can work for that scale too and I think I think Beyond even Arc this is this is an area where there's obviously so many talented people out there just go on YouTube and look at the infinite number of great game demos but how many of those developers well really those individuals because that's what they are how many of them are ready to you know raise $100,000 get an office form an incorporated company get development hardware for console you know and and and and and support a

software life cycle by the way you know if you release a stone application you're now like kind of responsible for like technical support on that stone application and all kinds of just technical Ira that I think are not really what a hobbyist wants to be dealing with and so I think this this is a ugc and essentially creating content within an existing game framework is um a real solution to for for for a lot of these creators to see what they want to do with their careers yeah so much of that was uh really well said um Jeremy and there's there's a lot of places we could go from that but one observation um I have looking at this and you know Roblox ufn like they're all great there's room for multiple winners of multiple types multiple types of platforms multiple types of business models but um one like really compelling aspect of um this premium mod modding in general realm is that it really is just

unleashing more collaboration in really interesting ways and so even just looking at you know who all is here on this this call right now um like URI at overwolf you guys are enabling all sorts of Publishers in studios uh more like at an infrastructural level to uh enable them to partner um in all sorts of uh of ways and build these capabilities uh you have you know large Studios like Studio wildcard with these large successful games that can enable a very large range of creators and now other Studios to build on top of their games and and now we're seeing you know you know teams like look northw World um that are building on top of these games now also Patrick as you were saying finding ways to work with like individual Standalone creators and so it's like this interconnected branching of of like all of the layers of creativity um in the

gaming industry like being brought together in one spot maybe for the first time I don't know uh but either way um that seems like a a really big idea um that that is getting Unleashed right now that will probably have very large ramifications um over time um one aspect I I do want to um double down on um for the moment is just um understanding the economic side because for years uh sort of the ethos around modding has been pretty like anti- monetization and um due to you know the tools being built today the tide seems to be turning um but um Patrick I I kind of want to ask this question to you because you're putting you know your team is still pretty small you're putting limited time limited resources into building uh a premium DLC on another Studios game um whereas you could be putting those that time and resources into building on ufn

instead or on Roblox instead and I know you you do some of that um but could you maybe just kind of like talk about like the economic tradeoffs um here that make building on um yeah make building these like premium DLCs possible I I don't know how specific you guys are comfortable getting with like the actual Revenue splits so I think that would be interesting to our audience who who will be thinking about these things for themselves but uh maybe whatever you can share just kind of walk through well yeah maybe maybe we'll let Yuri touch on any Revenue splits want to share that's on my that's not my my my prerogative but I will say that um like I shared those numbers earlier like 400 million to launch a premium game that sold for what 40 bucks and less than a thousand of that less than 1,000th of that to build something inside Arc that sells for 10 bucks you know that's that's a quarter but it's not it's not less than 1,000th of 40 bucks so those economics you know

it it returns to what health looks like in the industry where uh you can get disproportionate rewards for Success um and not just trying to scrape out a 15 20% eida margin that we see uh as success now in traditional game publishing and I like we're I know a lot of Studios maybe listening this are are in the uh survived to 25 bandwagon I am not I think there's a fundamental business model shift that has to happen in the industry and it is happening and it is ugc and we're just at the tip of the iceberg and we're going to see nine or yeah nine to 10 figure Revenue growth year-over-year probably this next year in ugc and I expect that to continue for a while I don't see it supplanting or maybe it will you know I don't know how long it'll take to supplant console or PC Revenue but it it's very compelling and the economics and the the ROI ratios and the hit ratio

like a successful d DLC for us will have a 90 to 95% eBid a margin it you know the scale is so good um so economically the upside is what drives us to keep building new things keep trying new things because we can make 20 30 things and have one hit and and make good money um and I suspect that anyone that's funding a a ugc economy within a game or a number of games is still looking at a portfolio mix as well um and collecting lessons and data along the way that help them you know maximize that outcome I'm gonna pause there because I Yuri is the one who should be talking about business model here yeah have Havey take um that from here I think I'd start off with saying we're the guild for in-game creators so if you go to our homepage uh you see hey we're the guild for iname creators and here are the different Creator categories that we empower and the the reason it's Guild is because

we do believe that in-game creation should be a profession and you touched Aaron on the fact that in the past modding was like this thing that is supposed to be created voluntarily for free and for the community and that's true and that is always going to continue but the third generation this period that we live in right now is a period in which for those that choose to and that have the talents and that can create something entertaining and at high quality we want to give them the opportunity to also make a living and I think you know there's obviously the Roblox business model and the U fan business model and uh the Minecraft Marketplace and you know GTA 5 roleplay the 5m ecosystem which was recently acquired through Rockstar so there are existing business models out there with predefined terms I would say that specifically um with Studio wcard we've been public on our approach which is it's going to be ref share and it's always a REV share this is why our services are a REV share as well because

we want to make sure that at any given point our interests are aligned with both the studio and the creators of the content and specifically with Arc it's 50% for the creator after for example first party fees if we're talking about Xbox and Playstation um I think moving forward uh the way we looked at our business from how we're supporting different Studios we feel like because we're the guild because our northst star as a company is how much we've helped creators earn you know every company should have a North star this is ours so that every person that's working with us in overwolf understand how their role and whether that's QA or marketing or development is eventually contributing to a Creator's ability to basically generate Revenue um so long story short this is how it is with uh Studio wildcard but for different games it could be different like we could work with a studio that would say heyy for me

this doesn't make sense I want a different number and we would just go with what they want because they feel like the studios the IP owner has the sort of the veto right for these terms I would just encourage them to make sure that it's you know continuously based on rep share that makes sense and continuously incentivizes the Creator to not create you know imbalances or situations where creators aren't really incentivized to keep on building content or even come in the first place gotcha and and Jeremy from your um side of this you know typically traditionally you know studios are building their own DLCs and such but you guys are you know pioneering the approach of letting other teams build DLCs and you know so instead of getting the full Revenue yourself from making it yourself there's some type of Revenue split going on here um like oh what is the logic on your end like how you think through the tradeoffs here that kind of LED you to the conclusion that this made sense that

other other Studios out there that haven't made this type of jump uh would would find interesting yeah well three things we still do make dlc's just uh gives us a little bit more time to make them I suppose and that really leads the other point which is that uh uh it's it's a massive release on relief on um the the content treadmill like it it's a way to ensure or help ensure anyway way that uh there is fun new stuff to play the game because people are making it and users and other Crews and teams are making it and uh it's it's it kind of isn't all on our internal team then to add fresh content to the game on a regular basis but ultimately it it really uh is interesting because the year had in the past and I think maybe still was you alluded to earlier a bit of a tab moo around craters selling

their content uh as mods premium mods and games it's been kind of a taboo within the PC industry for a while um but I think as mods got more and more and more ambitious and as mods became higher and higher and higher quality that it's really really really ridiculous to expect all of those crators who have that t have that capability and want to you know devote all their time and energy to this say oh yeah but you always have to do it for free I mean what are you asking to do then just Dy a fire basically I mean if they want to do that okay go ahead but I think it's not reasonable you know is is the quality became higher and some people really want to devote all their time to it to have an option to say you know what this thing's good enough that I actually want to sell it and um what's interesting is is they can dabble in making a free version and if they see

there's enough promise in the free version they can make a more ambitious paid version subsequently so it's not like an either or Prospect either uh for a Creator and uh and I I think I mean again we weren't the ones to I I would say break that taboo I think Roblox and fortnite kind of and other games had Minecraft as well of course had kind of Knocked at that taboo over the last three or four years um but I think it's just a just about the last wall there has fallen and I think it's the benefit of of the mass Talent that's that's out there um and uh want to give a little credit to the console platforms for gradually loosening their kind of way in which they view content on their platforms previously it was no if we haven't seen everything ourselves Microsoft and Sony will never let it be released and then it was well okay you know only if it's an official DLC and then it was well okay as long as certain checks and

processes are followed we'll allow end end user content to be on these platforms and finally we'll even allow that content to be monetized and so I think H they have shifted over time those those console platforms how they view content on those devices and users creating content and uh and you know more specifically modding as relates to those platforms and that that has enabled uh this as well over the last several years yeah well I want to talk about that a bit more because the crossplatform element of modding here um seems like a a very big deal and URI I'll I'll ask you about this because you're you see it across multiple games um across the the Spectrum um what has been the impact of enabling mods to be crossplatform like what is the impact that you've seen be on engagement on creativity or anything else that's interesting here um so you know I would share a very interesting stat um

statistics specifically about art and that is that um we had you know something that a lot of folks probably would not expect um more than 65% of our downloads actually came from PlayStation Xbox um so you know you would think that the PC is a traditional very kind of mod significant Market would be accountable for most of the downloads because I don't know maybe the players over there are more uh receptive towards third party content but the fact is that no um we with Studio wcard made it so easy to discover mods on a console that people end up discovering a lot of content consuming a lot of content and we expect that to also then as we go ahead and monetize and launch our monetization features um impact Revenue significantly you know also because of the purchase flow that is really really easy just a matter of a few clicks and you know you have the mod that you can play um so I

think having mods be crossplatform supported I mean is absolutely critical for the future growth of UTC in general specifically with Arc nice I also want to speak to it a little bit as a developer uh I actually started as a modder before I became a professional developer I I honestly wish something like this that existed I was just starting out my career because it was extremely difficult to make that lead I mean it involved life savings from multiple family members basically to to make the job from from hobbyist to professional and because there was no there was no middle ground basically there was no way to say you know what let me try and make a living on this before I just like fund a development Studio because for example just buying uh console development Hardware specifically the specialized development Hardware sold by the first parties is very expensive and they do not sell it to you unless you have significant capitalization and what overwolf technology has enabled craters to do is

actually um develop on the PC using the PC Tools but run their content on the retail units like the regular Xbox the regular PlayStation and test it out using the regular console Hardware that you can just you know pick up at um at any store and uh that is really really awesome because as a developer it allows you to like get used to what it means to like see your content can I console learn a little bit more about the console performance characteristics some of the quirks of the just running properly and looking correct on each individual console and kind of get used to the flow of being a multi-platform developer without having needing to have six figures or more in your funding bank account you could have zero dollars in your funding bank account all you need is a is an Xbox or PlayStation that you got it Best Buy and a TV and a and and a PC of some sort so it it really uh I think levels out the playing field and

and acts as an equalizer for people who especially for consoles which has traditionally been like I would say the final frontier of crators you know who want to make cool stuff and and getting it out to that kind of an audience and so that that is a real Revolution uh which which is starting to take place in terms of how ugc uh where where it's going versus where it's been gotcha well URI maybe you can play this out for me how big could this premium mod movement um really become for for the industry and maybe even just bigger picture more philosophical like what are the ramifications on the industry if this really takes off and takes hold um so I think starting with numbers um I think if you look at ufn um 2023 numbers um we were talking about half a billion dollars created um in fortnite created ufn half

of it probably for first party content so either you know ufn or uh fortnite creative experience is created by epic themselves and have created by uh third parties um and if you compare that to over walth uh we were at just a little bit over $200 million for uh creators and this is where we are right now where I think in terms of adoption we're just uh at we're just scratching the surface like if you look at which big titles out there supports creative communities to the level that Arc does it um you know I would argue that nearly none um but as this becomes more and more a phenomena that is more popular that is sort of becomes the standard I think it's going to become a big game changer and if we kind of look at the example of uh video consumption right the transition from linear to VOD to now ugc and you know

probably most of the consumed content out there is on YouTube Instagram as well as Tik Tok you know compared to Netflix and definitely compared to lar TV and I think something similar is about to happen in games just because the barriers are much greater and the cycle a lot longer it's going to take a lot more time so it's definitely going to be a while and we're not talking about like an overnight Revolution that oh we got to be really really you know fast to operate because we're goingon to lose the trend if we don't operate by next year no definitely not I think this is just going to be this evolutionary process versus a revolution that is going to continue kind of to gain mass and you know we already see communities in which this is kind of what people do like if you look at the Minecraft Community this is pretty much what people do you know particularly J but also on Bedrock um and and again I I don't have numbers but in GTA 5 if you could twitch content roleplay is huge versus the more sort of vanilla gameplay

and if you look at gameplay I'm sure it's huge as well and so I think you know with time it's going to capture more and more value kind of from the games industry and you know I definitely think that unlike maybe some other sort of trends that um you know may come and go in games and people like being really hyped about specific domains but a little bit disappoint cough what's that uh nft is cough yeah sure um so I mean unlike that this this is not really you know an invention from the last couple years this is something that existed for 40 year we was just like gradually evolving it into something a lot more magnificent and so I think it's only going to grow and I think it's only going to become more and more mainstream and I think a lot of developers are actually going to start their careers they they already do that right now but it's going to be more

common to actually start your career I mean how amazing is it to be able to download your favorite game download a creation kit with all of the assets get the same tools that if you were working with Studio wcard in the studio you'd be getting the same tools and now you can play around with them you know this could be a great job interiew but it could also be a great you know independent initiative that allows you to continue doing your thing from your own house and you know make a living building that content um it's difficult to say numbers but I think this is where we are right now and I think we're just going to grow uh with time and uh become more and more like a significant business model for the industry yeah well maybe you could remind us of your big hairy audacious goal and maybe how like where you are on your journey to that and how this fits into that yeah so our our goal is billion dollars for creators by 2030 um you know we're uh at about 20% the way right now but we're making pretty good I

would say stronger than linear progress in kind of how we're pacing towards that goal you know I don't know if we're going to get there in 2030 or 2035 or 2040 or um you know in four years I really don't know I know that this is sort of the trend and I'm very confident that we would be able to meet that at some point I I had a couple uh well I agree with Yuri on it being a long-term thing look North has Tak a long-term approach on it as well we believe this is going to grow to a significant chunk of the industry we're in it for the long haul and we're excited to you know find new ways to be part of it and add value and also just Champion it and uh and help the industry invest more into creators into players of these communities um a couple notes on the numbers though I I hear the numbers quoted around fortnite a lot and think I feel like they're understated um you know roblocks reported 700 million last year in 2023 but that includes their 71% cut because they have a double taxation

you get you get dinged on every transaction and then you get dinged when you fee it out when you take when you convert robu to Dollars and you end up paying 71% tax now it works people are still making money it's growing um and they reinvest heavily into user acquisition and the economy so it it over time you know is is net positive fortnite reported 320 million in its first year however that does not include epic's participation in the Creator pool and epic's own participations is is roughly 60% and so if you were to compare apples to apples Roblox to to fortnite ufn uh did over $800 million in its total economy but it but epic collected about 60% of that just as its share of Engagement um and that's more than the first year of the iPhone or the App Store and that's that's adding nearly a billion dollar year-over-year to the whole economy and that's one

game and so as more games come in Arc has a massive audience and you add another game like GTA and you add another game like Sims and and you're adding billion by billion dollar economy potentially I don't know if arcs ugc will get to a billion but you're adding big chunks because it's the audience is already there they're not going acquiring players the players are already there so it's a switch not a dial it turns right on the moment you start making content um we're going to see these like very staggered jumps up it's inevitable it's going to happen and um and then you think about kids who in ufn Creative 1.0 is not a a game designer tool set you are just in first person playing fortnite and you hold a tool and you place things down that was fortnite 1.0 and that accessibility of playing within a first-person experience and making maps and mods and like that that is an initial onboard for a kid who wants to make games um that's conditioning a whole generation 250 million players a month to making ugc and as soon as

you're conditioned to making it you become conditioned to well this is a lot of work maybe I should pay for it and then they go play new things that have premium content in them and then Game Pass allows the game to be free and so I haven't paid anything and I've gotten so much out of this game I'm going to go buy this DLC so like the the business model is going to evolve quickly the play the number of creators is going to ramp up very steeply the tools are getting better and better at all levels of skill and people can Ascend up that ladder um and so you know it is going to take a while the video game industry is massive so it's going to take a while to become significant but when I look at EA's financials where what two-thirds of its revenue is live service content on their sports games um can you imagine and so much of our industry revenue is live service can you imagine like I think that's the instate I don't know how long that is but the instate probably is the majority of ongoing revenue recuring revenue in the industry being ugc and that's interesting that's

significant yeah that's that's a really big deal um and one thing that was really interesting to me from just GDC this past year is it seemed like maybe the the biggest thing everyone was talking about was you know whether they're like a mobile team or some other type of team that's you know seeing stagnation or just difficulty and wherever their traditional business has been um thinking about like oh how do we start building on Roblox how should we start thinking about building on ufn and there there wasn't really from from what I saw like that much talk yet about oh how could we start building on other people's games what what do what do you guys think the over under is for that being the next big conversation Topic at GDC we talking like two years five years what do you think uh we're already seen it happen but behind the scenes yeah like I mean came back from a conference

that happened after um jdc in London um it's a it's a conference called lvp Summit something that London Venture Partners sort of hosts and uh had a nice panel with Alex uh from luk North world and um I think ugc was kind of one of the common themes and when the audience was asked hey what should we talk about next year when we're doing our next lvp yeah I mean ugc was quite there uh very very prominent um so so I think it is very interesting for a lot of folks even right now um you know I don't know when it could be kind of the sort of the big theme behind GDC but I think it's kind of gradually getting there yeah and and and to the point about you know whether it would ultimately just condense down to a handful of titles I think It ultimately just comes down to where where the paying users are meaning you know again

if there's if there's a critical mass of players playing something and they want more content in that game and they're willing to pay for it then I I would assume that will be of interest to enterprising developers assuming that you know the game supports UTC and premium UTC so uh I think AR is in that position but I'm I'm sure other games will be as well uh as as this kind of idea gets more established as as a real way for a game to be uh bigger and better and for players to become a little bit more content fed within the title so but but it's really important to remember it's just this this for for business and Technical reasons was not even possible you know short of a year or two ago like this is literally last two years style viability thanks to thanks to overol and C Forge and and and uh and epic and the and the console platforms themselves yeah it's be deal well we've had a great hour talking about premium mods um as we wrap up uh I just want to

give you guys a chance to shout out anything else that's interesting going on in your your businesses that our our audience uh you know could find um you know interesting or or or want to to learn from I I want to mention something uh that that L&W is working on something else really cool that we're not going to be able to reveal here uh but uh keep an eye out in the coming weeks and there's something that's really exciting uh a ugc specifically that they're creating that is yet to be revealed that uh I know they've had a lot of fun with and I think it's going to be very uh very popular uh for a lot of people when it's revealed uh it kind of spreads well beyond what Arc has traditionally been known for so that'll be revealed soon but I want to take any Thunder I'm just as a fan very very happy that they they've made this thing well I'm excited to see what that is Patrick anything else um in your your business that you want to give a shout out for um well we have a lot going on we have 13 approaching 15 things happening at

once um we're we're always open to conversations but I I'd say that in general like the indust the games industry right now is is very challenging for a lot of people um and this is a space where there's a lot of positivity a lot of forward momentum um I know a lot of Studios might who are in dire streets might be thinking up pivoting to ugc um and I both encourage it but also say like you know don't wait too long is the you know the trains are running out of the station and and I would encourage everyone to jump in um and and also don't be afraid of it it's not an existential threat to Standalone triaa doua games it's additive and if anything it gives you a monetizable path to to prospecting for new ideas and validation along the way and uh I just think it's in so net positive for the Stu for the whole industry uh I think the work that overwolf is doing is GNA be so my cat's joining the podcast sorry and um uh I I think that is very net positive to be be able to get paths to these these uh these audiences and these teams

to have a life service component um and I really appreciate wild card for the courage to take this on I know there's a lot on their plate holy cow it's a big game they got a lot of things going on and it's been a big Endeavor for them and the support that we receive you know on a daily basis from that team and from overwolf the the uh I don't know it's just been a it's been a really good opportunity and um it it's been a real source of Joy during otherwise challenging times in the industry so thank you to both both people on the panel for that and also for the chance to spread the the word that there are good things happening uh in the industry oh cheers Patrick absolutely you want to wrap it up Yuri yeah um I I I want to Echo I guess what both of you said um and and say that you know with this upcoming announcement apologies for being a little bit cryptic about it but we're just adding another really important element that I think is going to be contributing to the success of ugc and

um you know you could probably guess but it's you know something pretty critical that has been a core pillar in making game franchises uh succeed so I'm very excited about that um you know we really enjoy working with you both uh look North world and Studio wild card I think Studio wild card you guys are such Visionaries of the space and it's been amazing to go through this journey and look North world you know the team could not stress enough on how convenient and fun and uh effective it is to work with you um I know uh um there was some feature creep recently with some of our projects and you guys were very positive with that um and in it for the mission so we really really appreciate that because some things you know we couldn't really anticipate um so yeah I just I guess wanted to say thank you to both uh you know Patrick and Jeremy awesome thank you Aaron for this

wonderful podcast and the great questions yeah absolutely yeah this has been this has been a bunch of fun we'll go ahead and wrap it up here guys but thank you all so much for joining me today and to all of our amazing listeners thank you as always for tuning in we'll see you next time if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a festar 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] and we'll catch you in the next episode