The Snowball Changing the Games We Develop - The Metacast by Naavik

[Music] and i think with the extinction level event going on right now with play to earn games that this little rodent on the evolutionary tree might like grow to be the future mammalian empire while all the dinosaurs die [Music] off hi friends welcome to the metacast roundtable by navik and today is an exciting day because we have well one face that you already recognize and a new face to join us so today we're joined by kumar um co-founder of navic the beloved lars dusse co-founder of level uplaz and industry analyst you already know him from crypto corner and past episodes and also tim manville cpo at hutch welcome tim hi

hi um could you do a 30 second intro do the bit do the bit right do the best well you know i listen back so some of you might know me as the person maria mentioned last week who had a terrible time in apex legends mobile where i was in the first real match and then i had to sort the cat out and i came back and then it was just a complete disaster and then at the end it declared my team the winners and i was like that was i was not winning that was all for anyway it could have told me i was about to get into an 18 minute match it could have maybe i shouldn't have anyway you got the xp at the end of it so no problem like i got something yeah but uh outside of uh having cats and being terrible at apex engine mobile yeah i'm cpr h i sort of joined them eight years ago as the only analyst and then i've gone through the whole journey there i didn't i wasn't working on any games companies before that so that's been my whole experience working on 10 different games there and outside of that i'm interested in games of all kinds

board games party games weird art experience games anything involving people interacting according to some rules i'm always fascinated by and what's your favorite what made you oh yeah sorry what's your wrestling name tim what i've been told i should be called manville the anvil that's a cool name i don't know if i had the build for it but you know definitely definitely sorry manny what were you saying what uh what what what made you uh make the jump into the games industry uh right well because i was always interested in games of all kinds right that was always there in the background and i didn't i did a whole faq for hutch games uh smash cops heat like everything about it how to beat all the levels and then they had this opportunity where they're like we actually need a real analyst and i've been working in marketing and then web analytics and like a friend of mine connected me to sean ceo there and it was like oh yeah this is perfect

definitely this is what i should do and it's the longest i've been at any company but it because it all makes sense nice that's awesome and lars well what what analysis are you working on now what an else has been working on now so i'm working on two things right now i'm finishing up some um updates to a paper on axey infinity kind of a postmortem on what's happened in the last six months with that project uh for novik and then i'm um helping my co-founder anthony work on a piece about dark forest which is one of the most interesting blockchain games i've ever seen um it's it's kind of an interesting academic project it's fully on chain which i didn't used to believe was possible but now i've seen it with my own eyes so um those are two things that i'm currently analyzing um and there's a lot of interesting things in both of those those papers which will both be published by novik yeah we'll speak about dark force a

little bit in the topic so we can dive into it then and just before we move on any favorite games announced at summerfest or the xbox and bethesda showcase time i i have a a kind of hype shield rice because it's been burned so often there's something is announced i'm like well let's just wait and see you know i'm a huge star wars fan when a new star wars game gets now people like are you excited i'm like nope not yet just wait wait for the reality that's it cold well that was not a hype fest um i i guess uh i mean i i just kind of like went through the through the games that were announced and uh the one that i didn't even know about and therefore it was a surprise was this one called cocoon which is uh which was made by uh the designer of limbo and inside you know two of uh yeah two of my favorite games and

and i was expecting like cocoon to kind of also have that same you know um thematic feel of yeah exactly aesthetic and thematic feel of inside and limbo but he's he's just taken like a much fresher uh approach to it now and it kind of had like uh in some of the levels it just looked it had like these journey feels to it um at least like you know just like the environments and such um but but yeah i'm pretty excited about that i think that comes out in 2023 and i think i'll definitely be purchasing that one last but not least lars i mean i've you had my head tucked down so i don't notice as many things as other people but um you know i i saw some of this stuff coming out of steam next fest um and one of the ones that was interesting to me is that i saw there was a beer brewing simulator which was interesting to me and then um there's also um a game called curse to

golf which looks interesting to me because i remember really liking golf story on the nintendo switch and um so those are some things that immediately stood out to me um just just on steam next fast wait that's cursed to golf as in a curse means you have to play golf yeah i believe so which seems like an appropriate curse that's a good hook i'm interested yeah yeah yeah wow i'm going to be so basic in my hype after all these answers um i'm really looking forward to forza horizon the hot wheels dlc well that sounds cool why not my son would do that exactly oh thanks everyone thank you oh and before we last thing before we jump into the topics um the research is that lars mentioned you have a promo code in the show notes to sign up to navic pro so sign up using that to access them and all right so topics today we have game pass announcements we're going to be talking about savvy

gaming group um doing an investment with an embracer group uh we'll be talking about the dark force on chain game that laura's mentioned and apple telling ad tech fingerprinting is never allowed okay apple uh we'll we'll dive into that so i got the first topic which is the game pass announcements so there were 36 pc games showcased the majority of them were coming to game pass and the thing i really wanted to focus on is that riots games so league of legends wild riff legends of rotera team fight tactics and valorent are coming onto the the game pass around winter 22 or early next year and so a lot of people were asking why are free to play games going on to game pass and they already have this example with other games such as destiny 2 and so these games will have some paid content unlocked like the heroes and you can gain xp to level up faster

the games won't be available on all platforms for example xbox they're not available there and i think this is a great thing for riot because it gives a platform to an audience that has all of the heroes unlocked and so they can experiment a wider a wider breadth of of the games to to gain more loyal customers and potentially invest in more transactions into the cosmetics so um manu i was thinking because the playstation the new playstation plus tiers are meant to be released this month in june what do you think do you think that the game pass showcase has now shadowed the ps plus and now people will be excited again for the game pass i mean yeah it's not just like any games that came onto the game pass it's riots games that came out of the game fast you know and that in itself like league of legends and their entire portfolio i mean we can name all of them but um there is no reason to not be ex more

excited about what game pass is offering um in the broader context of you know what game pass is even like trying to uh achieve uh with with this all-in-one uh subscription design um but yeah i mean you're absolutely right like the most interesting part is you know why you know riot decided to make this decision and um and how like the monetization of uh this whole thing will uh actually work like why like from a business angle like why would riot do this and at least for me like it probably just comes down to you know um yeah riot would have basically evaluated that can they say with all this new audience that they will get by like getting onto the game pass can they essentially uh achieve a higher ltv for that expanded audience through this deal and [Music] and a portion of that ltv is probably associated with some kind of a minimum

guarantee you know that microsoft is uh giving um i wouldn't be i wouldn't want to be like on the other side of that forecasting excel sheet that would do this um but yeah through some kind of you know a minimum guarantee that is based on like you know portfolio ltv per player um that would be one aspect to it and i think you also like brought up a pretty good point but you know um how the monetization long tail is not not driven by the heroes but the cosmetics so in terms of like a immediate monetization hit it's probably like giving a little less for a much like thicker long tail with all these new players that would be coming in plus also like you know existing players that would then convert into the game pass and um basically or yeah hopefully get a cheaper deal but long term i guess they'll actually end up paying more uh to riot specifically um but yeah yeah i was speaking with a

friend who plays a lot of league of legends and uh he was saying that well he hasn't spent this much but he knows people who have spent thousands of dollars on the game and it was all cosmetics they just unlock the heroes through gameplay so it sounds it sounds like a really smart move by by riot to go onto game pass we'll we'll see yeah and like kudos to you know xbox and phil spencer to actually like you know make this happen i mean being able to get like riots games on the game pass is just it's huge it's absolutely huge and i was also like kind of researching how much time it actually would take for a player to get like all these heroes uh especially in league of legends and uh there are some people who have done like online analysis of this and on a on a in a very high engagement setting like you know 10 games a day it would take you like a year to unlock all those 160 heroes i think it is uh but if it's like one game a day it could actually take you nine years to do that

oh wow and uh but instead if you actually end up paying for everything it's about like thousand five hundred usd if you actually pay for every hero and and yeah now with the game pass you can basically pay you know 10 to 15 bucks a month um you get everything unlocked but then you know the cosmetic long tail is still still available for purchasing uh later so it makes a lot of sense um one question i have is you mentioned a really important detail so like xbox game pass is now this like multi-platform service right and you're saying this was not available on xbox but was available on all the other platforms was that correct oh yeah pc and mobile they'll announce further towards the end of the year specifics yeah yeah that's really interesting to me and i think it like kind of like shows just xbox's kind of forward thinking and moving beyond this one hardware platform to make a deal like this happen that couldn't have happened otherwise yeah i would say like xbox game passes are

also available um on pc i guess you can also like play through your uh through your pc so you know again being able to like carry around your league of legends experience uh device to device is also pretty great something that is uncertain at the moment is how or if players can continue their progress because if you're not on game pass you have your riot account um people are wondering am i going to be able to link them continue my progress or game pass also announced that if you're you'll be able to get bonus rewards so it sounded something like amazon prime gaming but between the riot and the game pass account connection well yeah we'll have to see but at least right now what's been communicated is that what players unlock through progression will be retained in case their game pass subscription ends so if you unlock if you formally unlock a hero you'll you'll be able to keep it and it

won't go away right this was this was my question because i mean many of you like hinted at this like somebody somewhere must have done a calculation on what's this going to do to everything and the whole part about unlocking heroes i'm not familiar with the game right i've only played these kinds of games a little bit but it's like that can be a key part of what keeps you engaged and wanting to play and interested like oh i'll just get this guy now and the flip side of that as well which i just experienced i was just talking about it on t3 arena i've been playing it for three weeks i've unlocked 12 characters i'm overwhelmed i'm like oh man i've only just got the hang of two this is madness imagining starting this game with 160 i'd like i just like i don't know where to go yeah and uh just completely kneecapping like you know progression uh mechanics uh in a way uh but yeah um yeah there's gonna be like ghost progression right it sounds like you you it's like well you've done the thing you would have done to unlock this guy so if you stop you'll have that guy

i i feel as a player i'd be guided by that i'd go oh i've unlocked this one i'll guess i'll try them yeah actually i think like we should still caveat that you know even though they have made the announcement a lot of details are still kind of missing from it like how this whole thing will actually work i i think i'll even like correct myself a little bit when i said um that you can carry the experience from device to device i actually don't know if they have confirmed that the league of legends game will also be like playable on the console with this because no i think it's just pc and mobile for now they they still have to confirm all the details but the research that i did did specify that who's on xbox will probably not have access right yeah because like i mean if it's then coming to console that in itself is going to be an entirely new you know uh product design endeavor for riot uh given the way you know they thought about wild rift for mobile so yeah we have a lot of exciting topics so we'll um move on to the next one before we do i was reading

an article on the guardian written by keith stewart and the articles named why every big game looks the same and this was off the back of the showcases and the summer fests because if you watch them all it's like dark sci-fi in space much um and the quote is rather than look to the future video games are now being designed as instant cultural artifacts because nostalgia has become indivisible from the present and i thought this was such a good description to how i feel about big blockbuster titles that are coming our way and maybe we're starting to see the consequences of potentially remote working affecting um distributed r d and creativity and not being together in a space to ideate maybe we're seeing the consequences of consolidation or the high costs of a aaa title being developed nowadays where games go for the known shots on goal

that have been proven in the past so yeah hopefully we'll see exciting games coming from the indie scene really looking forward to that innovation case so it reminds me of um there's all the sort of genre films that netflix end up producing they're just like here's a sci-fi thing this whole thing and just like just somehow looks so generic and it's like are they just risk-averse and you're not going to come out with something totally crazy like i don't know triangle or you know the a24 films they're like no no it's just generic key sci-fi this it looks familiar to you you will enjoy it for two hours and then forget you ever saw it and carry on subscribing same kind of risk aversion i don't know one thing that's interesting on that aspect this is just a tiny microcosm of the issue but like does everyone remember how when warcraft 3 and world of warcraft came out that art style was like so distinct and then every game after it looked exactly like it what's interesting about that is i think it was more than just the standard explanations like

you know people are not creative anymore like they were back in my day or you know um just like risk aversion i think there's also like some pipeline issues too especially with like outsourced art companies i'm not saying like there's not talented people who work at outsourced art companies they're uncreative i'm saying like there's like some kind of like weird market demand structural issues going on because like a lot of companies that like use a lot of outsourced art or whatever like there's kind of becomes this expectation of like stand like in order to consistently get clients you need to deliver like standard issue good-looking but yet generic art because that's the kind that's going to get picked apart the least by the client you know what i mean it's the nobody got fired for making ibm style of art and with like budgets kind of exploding it's like okay i could make something weird and distinct or i could put like some colorful dish racks on the pauldrons of

my rogue you know and be like oh that looks like world of warcraft great you know and i mean that's just one genre of art there's others where this has like the classic like everything's brown everything's dark you know but i think there's kind of i mean i haven't fully plumbed the depths of it to like know like what my smart conclusion is but i think there's something like kind of structural going on there where it's like the way we work with people and the way we set expectations sometimes you know no one is not necessarily like making this decision consciously but there's forces that cause it to happen and i'm kind of interested in studying that yeah i think like i think like this whole cycle of you know okay when like a huge game comes out with the distinct art style then of course it like just you know um takes over the zeitgeist when it comes from like a art direction direction site guys uh but at least like the when i was working in zinger the way i saw it work was uh even though there would be like multiple art outsourcing studios there would still be like this art director who's still kind of you know still defining like the direction and

the uniqueness level of things and making sure like these guys are still delivering on quality so some balance is still maintained there and uh you know uniqueness is maintained um but yeah i mean when a big game comes out and you know or a successful game happens it even happened with archero i think to some extent on mobile where that art style also started to get copied pretty uh significantly apart from just like cloning that happens but uh yeah yeah that's a really good point lars i haven't thought about that okay we'll go to my newest topic uh i don't know if you if you all know this but manny went to the alps and returned unscathed and explore so i'm happy that you're back with us yeah that that uh those uh alps trips uh yeah maybe just like a quick anecdote but uh it's like an annual thing that uh you know i do with my wife's family and

my wife's dad um he is an absolute monster on the alps like he's doubled my age and walks like twice as fast as me on that on those mountains so you know i always dread going there but once i'm at the top of the mountain you know it's all worth it so uh but yeah happy to be back and you know breathing at a normal pace um yeah uh so yeah so the topic uh i brought to the table today is basically triggered by this news item of you know um savvy gaming group um saudi arabian based investing 1 billion in embracer group and the reason it's not really about like they investing one billion embracer but it was just my curiosity about who the hell savvy gaming group is uh now i also know that uh maria and tim you guys uh working at hutch and there's the mtg connect and um so yeah feel free to like

you know step out of this discussion for what it's worth but this is uh i guess most of my um explanation over here is really just gonna be um well actually question to large large do you know like who this happy gaming group is or like i don't know who the savvy gaming group is i know i know a bit about embracer group because i've been following them because of my interest in board games and um i know that embracer has acquired azmoday recently and now has basically cornered the entire global market on board games and then they own a bunch of video game properties because square enix sold off a bunch of ips to embrace her recently and i think they also own gearbox and a bunch of other studios so i feels like one of those conglomerates that's soon gonna own the world but i don't know who savvy is okay cool so this this is just gonna be like a uh walkthrough of a lot through a lot of information about who savvy gaming group is specifically for lars and the listeners so uh to understand

say hi bear with me i'll try to make it entertaining but yeah to understand who's savvy gaming group is uh i basically went down like a south uh saudi arabian rabbit hole today uh but we basically need to understand you know uh vision 2030 of saudi arabia so there is um at the moment you know saudi arabia has has about like 70 of his exports uh in oil and about 50 of the gdp is driven by oil now in like slowly inching towards the future the need for uh renewable sources of energy or the want for a renewable source of energy is of course increasing uh therefore saudi arabia i mean in a nutshell you know wants to diversify their economy longer term so they've come up with the vision 2030 and part of this vision is the three key aspects to it basically one so one is like to make saudi arabia an ambitious

nation to enable a thriving economy and three uh create a very vibrant society now each of these things has like you know some other smaller points to it but we'll just focus on like the thriving economy part of it uh to achieve this vision there are 11 different programs in it and one of those 11 programs is called the public investment fund program which is a 500 billion dollar fund to invest that you know this pif uh has to basically invest in the local economy and the international economy 500 billion dollars just to give a perspective of scale is basically equal to uh 14 to 15 a16zs so now they're going to take about like 30 percent of this uh 500 billion so 150 billion is going to be reinvested into the local economy uh and basically you know create more jobs you know enable more startups et cetera et cetera

and 70 is going to be uh uh invested into the international economy all of those investments are happening in 13 sectors and one of those sectors is entertainment leisure and sports and within that there is gaming and in in that gaming chunk is where savvy gaming group basically uh comes into play um so savvy gaming group uh exists um uh or basically it was formed very similarly to how embracer or a still front uh was formed where there were just like a bunch of multiple companies coming together to basically form one holding company um and savvy gaming group is essentially a group of these five companies um there's one which is the ecosystem company two

game studios three is the infrastructure company four is the esl and face it esports um company uh and five is the savvy games fund and i believe again i wasn't able to confirm this with information but i believe it is a savvy games through the savvy games one is where they are making all these other investments into you know companies like like owning five percent stake in nintendo five percent stakes in capcom nexon uh take two ea activision they're like you know top three shareholders in all these three companies right now um and also eventually uh embrace her so that's um that's kind of like all the context for okay who savvy gaming group or like why savvy gaming group exists um and uh what like what this structure is the ceo is uh named brian uh ward who is x activision uh microsoft game studios and ea

very experienced person and he's basically the head of all these different five companies and each of these five companies also have like their own uh ceos mainly coming from the games industry um also oh why why embrace her did you manage to find that did you manage to find why why embrace a group yeah so so that that's kind of like the next thing um so yeah just to kind of uh before i answer that one step back um that 500 billion dollar fund um you know if they're kind of investing it in 13 different sectors if you can't just take like an equal split it would mean about like 35 to 40 billion that's going into the entertainment sector and within that there'll be games so maybe it's even smaller over there i would assume it's equal to a little bit less than the capital that or the you know a um of one a16z which they have to kind of put toward um but still

so yeah so to answer the question like why embrace a group um i basically looked at like what are their current holdings and try to like bucket it right um that would kind of give us a feel of okay why they're actually going ahead with embracer group so at the moment yeah i mean everyone knows the esl and face it acquisition happen they have like five percent in nintendo capcom and nexon uh take two ea and activision is five to seven percent each um snk um king what is it king of fighters i think that's the game from them full ownership uh they also have a stake in c limited which i did not know uh which is awesome and then there's embracer and if you actually try to like bucket these three things i the buckets i found was like there's one which is long-term holdings which is basically like you know invest investments that savvy games fund is making into companies that will basically be like great long-term investments um

two is more arbitrage bets um so yeah sorry so long-term holdings examples of that would be like you know ea activision uh take two then there's two which is like arbitrage bets um i think examples of that would be even nintendo capcom and nexon because the japanese yen is like pretty weak against the dollar at the moment and um i think it was probably a good time to like jump in for them and then the third is national synergies is what i call this bucket and i think embracer fits in that because um investing in invasive wasn't just like a capital injection from savvy gaming group but embracer is has also agreed to um carry out like further m a operations in the saudi arabian region and the mena region through this relationship and like i think probably also like set up studios help like the game development ecosystem

grow over there and basically create like new entertainment industry you know job opportunities and kind of just get that whole environment kick started um but yeah that's that was my rationale to it but but i have actually a little can i share my screen real quick here am i allowed to do that does that work can you guys see this so this is from the slide deck of um embracer group's acquisition of asthma days this is a little out of date this is as of september 2021 but this shows a bunch of the other companies that they own so you can see that at the time of the acquisition they othq nordic coffee stain these are people who make goat simulator gearbox software saber interactive then some of these others deep silver etc and then acquiring asthma day um is these guys own basically any board game publisher you know almost certainly asmodeu owns them so azmoday is like the

vast vast majority of the board game market certainly the european uh board game market so um this whole presentation here has just like all this interesting information about you know the rationale um from that that's before all this stuff manu is just talking about and this is before asthma day i mean not asthma day but embracer acquired um square enix's ips so that that's just embracer not not this savvy group that i don't know about yeah but um but yeah i mean just to kind of like you know wrap it up um but yeah basically this um public um what's it called the public investment fund exists to you know uh increase wealth of saudi arabia and two it exists to diverse enable like rapid diversification of the economy so that it's not just like a oil-based economy going forward and

savvy gaming group is playing the role of making saudi arabia essentially enter into the games industry in a very very big way but again it's like pretty it's very early this whole setup of these five companies the ecosystem company game studios infrastructure company then there's the esports thing and the games fun like you know puppeteering these five companies uh to create like something of great value longer term it's definitely going to be like a long road ahead and you know if yeah we'll have to see if brian ward is you know uh up to up to the task um but yeah it has like the potential to be something pretty huge and um and yeah the big elephant in the room of course is well all of this is actually headed up by the crown prince and he has a reputation of his own so you know um how um how all of that is going to like

play an impact uh with actually strike like for savvy gaming group and it's games fun to strike deals and you know uh start relationships on a great foot in in the international market yeah my feeling is there will be like it will be like turbulent waters and there'll be a lot of convincing that needs to be done even after like the invasive group announcement got made the ceo uh i think his name is also lars yes it is he he actually he wrote like a big letter you know justifying like why he took the investment um and he gets into like we have some pretty good details so i would recommend like reading that but i think that's already you know showcasing yeah like how the market is like perceiving some of these like this move specifically coming from savvy gaming group and the whole saudi arabia connect and crown prince connect and things yeah um so i just want what i'm going to say is

more generally about about the industry and the consolidation june is pride month so i want to share some love to of our lgbtq plus listeners and allies and coming from a perspective of consolidation um [Music] looking at who's making investments into these conglomerates that owns so much of the creativity and ips and game development i think my only deep concern is will consolidation actually affect diversity within games potentially if you know the more different views you have about what's what's the world's and what the right world is could it happen the most optimistic interpretation being right that video games and creativity and risk-taking it's crazy like you could lose everything it could just completely fail or it could be amazing if you are on your own doing that that's really scary what if you're part of a big group and a failure is okay oh maybe you can take more risks maybe you can do

more diverse things than ever that seems wildly optimistic probably there will be risk of this and not when you do that but maybe right maybe it will be great i'm gonna go on a limb and say that consolidation is bad um my perspective is my perspective is that basically um massive consolidation of inevitably leads to rent seeking um because you are no longer you're shielded from competition um because you just acquired your old competitors and i feel like any sufficiently large company eventually takes on the structure of a central planner and takes on the inefficiencies and the failure modes of central planning but is enabled but because of the power it holds in the market is able to basically command monopoly rents and i think those are categorically bad um some people might disagree with me but um i'm generally nervous about say um you know you know i i don't think my values are necessarily aligned with crown prince

mbs um but we'll yeah we'll we'll see what happens um it's interesting that these oil-rich nations are seeking to diversify you know i'm a norwegian citizen and norway is also big on oil and there's been this like huge discussion and nori's like what are we gonna do when the oil runs out guys like what's the plan yo and so they're likewise diversifying away and trying to like come up with things so like it's a completely logical move for the saudi kingdom to do this um the question is just like it is kind of interesting to me like my cynical perspective is it's like they're going from one kind of um natural monopoly and oil to to capturing another which is which is the global ip market um is kind of my cynical take on the subject if we already have a bunch of consolidators out there is it slightly better that there's another consolidator rather than fewer is there is there anything between them competing with each other

yeah it's just all the same problem that's the competition of the consolidators but uh but yeah i mean i think uh just to just to kind of call it out again but but yeah that whole public investment fund uh is still like investing in like 13 different sectors right they also have and where they have like a five percent stake in uber for example um so yeah they're investing in like aerospace infrastructure like all these different things and gaming is like one small part of it um but yeah i mean i think what lars said uh is will basically also be like what they would like to do basic you know essentially be that be the big pin in like all those 13 i guess in the best way that they can uh with games it will be like ip and you know embracer has like 120 different studios now acquired was it that wow uh it was um it was yeah it was

108 as of september 2021 it's got to be bigger now and they had 560 plus ips as of september 20. like some 2003 plus games in production and whatnot i mean yeah it's an absolute factory but um yeah yeah yeah they'll break their high score [Laughter] so i'm just looking at the at the time and at lars i'm really sorry you have maybe five minutes so for a little sneak peek into dark forest and your thoughts on chain games let's do it yeah let's do it real quick okay so um i wrote an article a while back called the degraded blockchain problem thought it was being original turns out it's just a restatement of the oracle problem and it's basically like okay there's all this blockchain stuff but nothing is actually like on the blockchain they'll like store some nfts and then your whole game runs on a centralized server and all your data's in a centralized database so what's the point of the blockchain and i predicted it's like i'll be impressed if someone can stuff an entire game on the blockchain and

justify that it actually does something and most people couldn't do it and i continue to be not impressed and then dark forest actually did it and i'm like gosh darn it i have to grudgingly somebody has a point before yeah so dark forest is really really actually interesting there's an old flash game some of you might be familiar with called galcon i'm not sure if it was a flash game but it was just like you have planets in the solar system 2d really simple you got like the number 100 on your planet there's a number 50 over here send ships from your planet to theirs then you can capture it it starts generating planets like go click take over the world that's dark forest but it's fully on chain which is ridiculous um and the way they do it is it's based off of this crazy technology called zk snarks which stands for zero knowledge uh succinct non-interactive argument of knowledge which what does that mean it's crazy math but it means basically it's like in a card game where i play my move face down and you play

your move face down you know i played a move you know it's legal but you don't know what it is and through the magic of math that i don't understand they've achieved this on chain because the problem with like try to play rock paper scissors on chain hey blockchain for the entire world i committed scissors okay well he's gonna play rock right you know so this is like i guaranteed you i played a legal move and you played a legal new move and now let's reveal what they are um and it enables fog of war in this game and what's crazy about it is that they have this whole notion of digital physics where they created these very basic rules for the game and then other people just just one one question a lot so you're saying like that whole uh the zk snart technique they're actually it's um i mean it's basically like a transaction settlement technique i guess but they're using it as a game mechanic is what you're saying yes it's a way to basically prove you made a legal move without telling people what it was and allowing it to be revealed in like a

comprehensive way so like let me give you a quick metaphor imagine and here's the possibilities of it imagine i make a maze game and i put it on chain right okay it's just a stupid maze game great um but now someone else can overlay on that they can add their own smart contracts that interact with it they're like i put treasures in the maze right and then someone else can be like okay i put a minotaur in the maze that chases you and eats the treasures if you don't get to them first and that's basically what zarc forest has kind of achieved now the big limitation is only 3000 players can play and it's got major scalability issues because of the iron triangle vitilix iron triangle of decentralization security and scalability it's pick decentralization and security so it's not very scalable but it's genuinely interesting i'm not sure if it will change the world but they've achieved the minimum like standard that i i previously thought was impossible i played earn games that this little rodent on the evolutionary tree might like grow to be the future

mammalian empire while all the dinosaurs die off so we'll see what happens that little rodent it still sounds like theoretically you could do it without a blockchain though if you trusted you could there are some you you could make something that's like it you couldn't make something quite like this there's a couple of nuanced things about it that are genuine that even a skeptic like me has to genuinely admit are new i'm not sure if they're valuable or if anyone will care in the grand scheme but they are genuinely new things like you can't shut down the game that no one really owns the game and that other people can ship code that affects everyone currently playing the game on a non-opt-in level now some people would say that's bad but um but um if they're very eve online inspired and think anything that is possible should be legal so it's kind of a weird wild west experience the paper goes into all the details but there are some genuinely new things

you can't do on an off-chain game the question is whether they're sufficiently interesting for anyone to care right that feels like i'm reminded of a mathematical proof where it's almost like literally there's nothing you could do on blockchain that you could do better elsewhere like what there's no point there's absolutely no point okay no there is there's one point there's a small thing well if there's one small thing maybe you could expand on that maybe you could discover more things maybe there's more actually rather than zero i've been genuinely excited by it because i was generally excited by the promises of blockchain and just been disappointed for the entire rest of my life um these these folks who made this are like super mit nerds the money is not interested in this game any money that's been offered to them they've turned down they're super just in it for the tech and the math which um so they're real purists and that's that's really caught my attention so it's generally interesting it's the most exciting like deconstruction we've worked on so far besides the axi stuff and it's the polar opposite of axi so will anyone care will it ever be able to scale who knows but they proved

like some basic stuff that was supposed to be impossible so i'm i'm genuinely intrigued i don't know if you you can have 3000 players okay but you could have another 3000 players over here separately right can you yeah yeah you would have to you would have to start an entirely new blockchain network yeah to do that okay um but you could yeah and then the question is like how how expensive is that to scale up and whatever is it just a math problem or is it like a like fundamental law of the universe problem and well they're from mit they'll tell us soon enough [Laughter] that's really exciting your addiction ours is amazing a lot of information in five minutes in a concise eloquent way that was very impressive well i appreciate it i like the format it's it's nice challenge speed running a speech yeah we should have a five minute lar segment all right

well my brain is a little bit scrambled uh thinking about these starks but yeah tim the floor is yours for the attack all right so this is i kind of want to have the bigger conversation here and this was already had years ago when apple first said hell hey guys stop doing that we're going to bring in this whole scarehead network thing uh which is like what does this do to the whole environment that we operate in on mobile and the products that we can produce people have that discussion but we've had some years since then right what we've learned since then is no apple is really really serious about this it's not like a thing they try and they go oh great we can wave a privacy flag around now and uh but meanwhile everything carries on as usual because say everybody's just doing fingerprinting now they're like no no we're really serious no fingerprinting we really mean it they're like okay and you know they've got the threat of the hammer right they can say look we can see it on your website you said you're doing this thing you're calling it this but it's fingerprinting we know what

your sdk is if the app comes out with that sdk in it we're not going to allow it so sort it out they okay it's it's a weird one like you're how can you even rule on that well they can they can so they will okay fine we know they're serious about it and then the other thing i feel like the thing that made me afraid of it a little bit and maybe i'm just too optimistic about systems that produce fun games but it felt like there was a chance i guess maybe it just always erodes but hutch was founded on making a little paid game called smash cops and they just submitted it to the app store and then went home and it was literally just picked up by apple out of just the apps that are being submitted and they go oh this is good and they featured it on the store and it did well and then the guys who found a touch said oh maybe we should keep doing this let's get into free to play and that was a whole other journey but so maybe that that's the insane ideal end where you just literally get plucked for greatness for being good you can't do that now there's far too many games coming up okay but but if you make a good game you can market

it right like build it and they will come that is a lie it's not even an accurate quote from the film but people want it to be true so that's what they remember uh but it's not true it's not true you build an amazing thing among us is my favorite example of this it was out there for years they didn't come they didn't come it was there that game you nobody came nobody came and then it got picked up in this sort of stream of feedback loop and everybody loved it so okay marketing is your answer like okay you make a good game you can get there with marketing now this rules come out like making it harder and harder they're really laying it on you what can you do you you can go two ways really you go massive launch ip right like the things this is what i think in the last few years what have we seen like gentian impact uh apex obviously call of duty you know cooney like absolutely colossal games come on to the store just from their sheer size you know you know like movie blockbusters just because they're big they get everybody's attention kind of thing and it's just like okay you're

gonna get the world's attention if the game's good you've got a chance you're like okay but what about everybody else well okay you can go super casual so you don't need any particularly good targeting you can just advertise it and almost everybody will click on it and play it for a day and then that's you know the whole hyper casual thing played out and i'm like what about the middle ground which is a lot of warehouses currently like where it's kind of niche there are hundreds of these games which are really really really cool for maybe 10 000 100 000 players in the world just just those guys it's the best thing ever and they're going to play it for years so is this the end of those games because you can't find those guys with marketing anymore and you've got to go to one of those other ends right it almost sounds apocalyptic it's just but it's like because apple are getting more and more serious about it and we're seeing more of these enormous games come out and like hmm trying to change the strategy a bit yeah i probably have like two comments on that i think so first command there's also a third way i feel um

uh i'll get to that uh but the other comment is um so also like apple the good thing about apple even though they have been like this you know uh the parent you know slapping us on the wrist for fingerprinting uh they have been listening and i think like uh with the new ski ad network updates that came out it's actually a little bit um i think they're trying to like find some kind of a middle ground you know because oh yeah it's something it's not all one way yeah yeah um so that that's one but i feel like the third way uh is and probably for these you know middle lane products that you were talking about basically what has happened is all the targeting that could be all the optimization in terms of finding the right user that could be done before these people get into the game has basically been annihilated but there's still an opportunity to get these people into the game with whatever

s cat network abilities exist but once they are in the game then there is an optimization opportunity for the ltv so therefore like uh when by that what i mean is you know like personalization like personalization systems have just not been um it's always been like a thing uh in games but like no one has like really uh invested in it i think at least at zynga there was a little bit of investment in these personalization systems but i'm just imagining a world where you know where you basically have like you know five different players coming in to the game at the same time with whatever like reduced marketing firepower and techniques you know we have access to right now but once they're actually in the game and given like their early signals or given or you know because the product is trying to like find a way to figure out like which path these people should actually go into so that their eventual ltv is like fully optimized uh that could be like that kind of a personalization

system i feel like if the scales could actually tilt in that direction which would be like a third way for probably these middle lane games to potentially go um i think um yeah yeah so i don't know if that like makes sense but uh yeah king king recently it was this week acquired uh an ai company with the goal of building out ai capabilities to improve game design i assume qa most likely for these personalization systems and well i suppose king has the money to acquire a company that is specialized in this it sounds like personalization would be very expensive for a small company to take on uh when they're trying the way they're still trying to get their their studio growing yeah that's a little bit what i was going to say with these scanned additional options like there's this

whole gradation of how many players you acquire is how much you're allowed to know it's this really fascinatingly informational theoretic design thing around privacy oh i can see how academically that makes sense but it creates a structural advantage for the bigger player right if you can't buy that many players at once you can't find anything if you can't invest in ai and make super personalization okay yeah but also i feel like the the like the gradations of uh personalization could there could be gradations that exist right you could you could have like just simple simplified like personalization techniques that basically does like you know 70 of the job i would say uh but then you know then you have like the kings and whatnot that are even going for like acquiring these companies to even go for that 30 i would like if my my overall point is that the third way is just it's just rest resting on this fact that now we don't have the information before they enter the game but we have a lot of information once they're in the game and therefore it can be the ltv can then be optimized

to kind of you know like still make that ltv greater than cpi equation work um and yeah i don't know if personalization actually like if this third way like becomes uh more prevalent then there'll be you know providers i guess that will come out with techniques for this uh or like solutions for this and that's probably where like the smaller medium-sized companies will go to but there is an article there's an article today in pocketgamer.biz saying that according to a research from at thai company bango 31 of game developers believe that their businesses will cease to exist with the new ad regulations and private privacy changes coming into effect and then you're saying that's including what google are alluding to as well right because there's going to be something there too yeah yeah although google haven't fully explained what it's going to be but they seem keen to try to criticize apple indirectly saying that they're going to do it better

so we'll we'll have to see what what that means and it also another percentage that was about 69 of game devs they interviewed are struggling to get new pain users i'm just here to bring facts yeah well i have another point on this but uh what lars did you you wanna jump on this yet yeah i mean i used to you know i used to do some consulting for valve and i you know did a bunch of analysis of the pc gaming space i'm most familiar with mobile gaming though my co-founder specializes in free to play and mobile but i mean user acquisition has always been this horrible problem and it you know it's just gotten more says it it's become easier than ever to make a game which means more people make games which means like discovery is this like very thorny problem that everyone has because frankly the kind of games people are making now are just of higher quality than ever before like i mean if super mario brothers came out

10 years later nobody would have cared right but now it's an eternal classic i mean it's still like very very well designed and timeless but like right like let's be real you know and um these platforms who really own the discovery like i've always said like steam is the least worst because like they don't own the entire like pc even if they have this like very powerful platform like apple owns the whole hardware train top to bottom and so like they make all the rules it's like i really like i like that they're a little more privacy focused than google but at the same time it's like they do it in a very cynical way they're like it's like it's not like we're looking out for your privacy and we're also looking out for your best interest as a customer and a producer right it's it's like maybe only the first one like the latter two is it's like it's also really convenient that we control the distribution and we will never ever ever give that up right until the courts drag our bloody corpse you know through the streets um and the same and the same is true for google it's like they really do all this stuff has come out of the

trials of all the anti-competitive practices they go into to just control that one chain because they love that they're in control and picking winners and losers they're never going to give that up and um i just think that especially in the case of apple what kind of makes it sad is that apple fundamentally in its dna doesn't really care about games on the same level that certain other companies do like microsoft i don't trust microsoft more than i can throw it but microsoft at least gives a figure about games right that's in their dna they understand to what degree gaming has driven a lot of their success and so like they at least speak the language but apple always treats gaming as this like kind of foreign thing that's like maybe useful for them but like they treat it much more like cattle in my opinion as just undifferentiated masses of objects for them to manipulate for profit rather than something whose success they actively want to share and sorry i got a little editorializing there but that's just kind of that's the other point i wanted to make right

which is i appreciate there's a thing right if the tool you have as a hammer every problem looks like a nail if you think of things in systems then every ruling looks like a systems plate and so in my head i'm like ah apple have done this because they don't like this kind of game like they're they're going we're gonna make beautiful devices and people will have beautiful apps those games okay they will have beautiful games great and then uh you know years past and they go how are we doing well we've made billions from these internet purchases oh wow what are they buying they're buying a one percent chance to get a anime cat girl that's cooler than this other one an apple like oh that's not really what i wanted to be happening and so they're like okay how can we tamp that down a bit and then of course there's apple arcade right which is their answer they're like gaming look just ones that we like yes this is what people want i don't think they've got that quite right but it shows to me like there's an interest there in like we want gaming to be the shape we want it to be we don't really like this thing so much oh this might stop it a little bit last

week two two executives of our apple arcade left to go pursue other other opportunities um mark bozon who was the creative director of games on apple arcade and cathy astrumoff who was executive producer i don't know if it's related but i mean i think that's an interest i think that's an interesting signal right it's like you see this a lot like you saw with google stadiums they brought in all this talent to like run this game studio and then like those people just kind of bounced off because it's like you bring all these people in presumably for their expertise and then you get a sense that like they weren't really listened to you know and i can imagine being very frustrated in that scenario yeah i'd love to know what went on there because in my head well i guess this even ties into the game past thing actually there's a whole games can take any shape get right games can take you five minutes or a lifetime

involve any number of mechanics or no mechanics absolutely they can be anything and then it's like well what's the exact right game for a mobile subscription then right like what is that what is that is it is it a game that takes two hours and it's very cinematic and you just have loads of those and you're actually leaning in a netflix direction you know or what is it but it doesn't feel like they've engaged with that question at all they're like oh this looks good let's put that on and my experience i assume i'm not alone on that blockade is you spend a lot of time looking for anything that is good and then you play that and you're like wait i've just been playing this one game for two months why am i subscribing to this service uh i'm out i just played like that squad game i remember from appalachia what the golf is it for me i want to go you made such a good point with netflix games because i'm now more bullish on netflix after seeing their their showcase their geek week or something like that i i've been thinking about how can i convince my mom and my sister to abandon my netflix subscription so i

can cancel it um because i'm not very happy with the content and no i'm not multi-accounting netflix please don't cancel me and after seeing their showcase of the games i'm keeping my subscription because so many of them are fun and they just have this well the quote i gave earlier about the nostalgia is now happens in a much shorter time span seeing all those ips that i loved and all of these games all come for free within my ever more expensive subscription in netflix it just made me feel okay maybe it's worth holding out and also gaining access to these games yeah i think one thing just a rule of game design that's always underappreciated every generation is that the business model changes the kind of games you make and um what i think is interesting is like a lot of people will just try to like keep doing the same old same old um we saw that in blockchain is just people take standard game designs and staple a blockchain to them and it doesn't work but like right off of maria's point is what's really interesting is when

companies take that lesson even further to its limit is it's like my company was built up for x and now that i'm moving to this like games as subscription as part of my value-add i'm willing to move beyond the contours of my safe business xbox game pass moving with like xcod to be like what if you could play xbox games not on an xbox it's like that was a move that they were willing to make before any of the other publishers and like so it's like i i don't know too much about netflix's opera idea but i'm imagining i don't play my netflix games on my roku box right i imagine i i play them somewhere else but i get them with my netflix subscription right that's that's that's the way it works yeah you just installed them on your phone yeah yeah yeah well great right and so it's like now i have a reason to be subscribed to netflix even if it's not like on the netflix app and i think that that that takes a little bit of a leap that some companies aren't willing to make and um and i think that's a good sign i think xbox the story of xbox and steam has always

been that steam eight microsoft's lunch for breakfast and xbox should have dominated windows gaming they just gave it away because of all kinds of institutional blinders and they're only now making up for lost time and it's interesting to kind of see netflix making some steps here that don't don't seem completely mistaken so that that's really interesting to me i i do have like one last question for them before we wrap up um yeah tim like the way you kind of explain just to kind of bring it back to like you know the whole free-to-play part of things but um while you're explaining like there's these two parts right essentially um uh i'm sure like you have also kind of like thought about okay is there like a third part and i was curious like what what ideas you had over there or what what thoughts you kind of had there but put that ball in my court like that there's a really really obvious third one which is the smaller version of the absolute giant play you just you partner

with an ip right you can get that going they bring all of that attention for you for free we have this game f1 clash it definitely objectively does well because f1 is a real world thing uh that people are interested in and that gets their searching on the app store just for f1 and then they find it by accident even uh it gets them invested in the game because they already care about the drivers and you know that whole uh structure race and everything it's it's giving us a lot it's like well yeah you can keep doing that yeah yeah that makes sense or hot wheels yeah that was huge i'm very sad that we had to shut that down but that just we we had a hellcrimy style game 3d hilldash it was pretty good and then we made a hot wheels version millions millions pouring in every month for years just they want to play this game was the first actually good hot wheels game on mobile i don't know if it's too

complicated to say that but uh it was huge now the monetization is not so great because they're mostly children all right that's fine and we decided that wasn't necessarily a business we wanted to particularly exploit so we kind of let it go but it's a great example of ip can give you a lot yeah that makes sense we're reaching the well we've reached the one hour mark so unfortunately we have to end the episode lots of interesting discussions thank you so much for joining this is great tim thanks for having us thanks for joining yeah yeah first time like two new people on the round table so that's uh that's the first it's good um yeah hopefully you'll want to join more episodes and if you want to join the conversation you can find us on the navic discord you can sign up to the free navic newsletter called livedigest and we will see you next week [Music]

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