TWIG #374 GDC 2025: The Honest Debrief

Just can pronounce it properly. He He switches back and forth into saying it correctly.
It's my Greek.
[laughter] [music]
Hello and welcome to Deconstructor of Fun, this week in games episode 374 from GDC and we have a big crew. We have all six of us here in an awesome studio. So hi everyone, I'm Jen Donahoe. I fill the marketing and publishing role on the podcast. Today we have, starting over here, Hello, Laura Sorrentino, puzzle product queen. Phil Sanderson, monetization czar. Misha Lyalin, still whispering to founders and investors. Eric Strategy investing. I'm Adam Telfer, product, just product. Happy to be here between two ferns.
[laughter]
That's actually true. Right at the beginning of this episode

we could play like the between two ferns.
Yeah, Dom, focus up. All right, so everyone, we are at the very end of GDC. We are a little bit punchy, so we're going to see how this goes. So we're going to skip banter. However, we do have a correction, Misha.
We are not skipping banter. The whole episode is banter.
Well, the whole That's why we're skipping banter.
Oh, got it. Got it. So we're correction. So one correction, of course, from the last episode, as we always do. Chris said, "Playtika is losing money, business not working, marketing too high." The correction from an unnamed source that may or may not be affiliated with the company, uh let us know that in the public documents, Playtika EBITDA is actually $750 million. There's no change from 2024 and actually grew top line thanks to their Superplay acquisition. The quote loss is not related to performance, it's related to earn out payments to Superplay, which kind of means that they're hitting their targets. Superplay grew 67% year over

year, was mentioned on earnings call, and they generated $573 million in revenue. And if you are looking this on the powerful Sensor Tower, you will not be seeing all the numbers because the D2C revenue, the web shop revenue, is significant. So this is my correction. Chris, will you accept this correction? I will accept it, but I will say scoreboard, your stock is at $2.77. So there you go. All right. Okay, so here is how we are going to run this episode. It's going to be fun. I've got a list of questions that Misha put together, so we'll ask a question, we'll kind of go through and hopefully keep six people from talking over each other. But before that, the one thing we did want to talk about was There was a bunch of news from Google Play. Uh the rate change came out. So we have decided collectively we're going to hold on going through it. If you want any the

details, Neil Long from mobilegamer.biz has done a really great recap. We're still diving into a lot of the details to get into it. So just tune in next week and we're going to really go much deeper on that one.
to providers, we're talking to companies to adopt or not to adopt whatever Google is offering, so The other thing too is in the US, nothing is set in stone until the judge make a
[clears throat]
makes a ruling on April 9th anyway. So right now for US, it's still up in the air. However, what their rate announcement does apply to some of the other countries, but those roll out a little bit later. So I think we're doing a little bit of investigative journalism. Well, not at all. We're just talking to I would say like word on the street is like there's the rate cut and everything. I'm not going to go to the details again, but the big companies, talked to several of them, they are not going to take up on the other Google offer of reduced cost.
For Oh, we said we weren't going to talk about this and now you go and you talk [laughter] about it. We're going to talk

more about but that's the initial take. Well, nobody knows yet, but that was a at least the first impression. Poor level play. Poor level Okay, oh jeez. Okay, deal.
let's just go banter. All [laughter] right. Eiffel Tower, iconic. Tower of London, historic. The two towers, simply epic. But none of them tell you anything about mobile app intelligence, downloads, revenue, active users, and my personal favorite, weekly cohort and retention. Get the real story, get the real data, get Sensor Tower today. Guessing where your users come from? That's so 2010. AppsFlyer is like having a cheat code for mobile marketing. Pinpoint attribution, real-time insights, and analytics that actually make sense. Stop flying blind and start flying smart. AppsFlyer, because your data is your best co-op partner.
[music]
All right, we're going to go to question one. We're going to skip that whole thing. Okay. What's the one word you use to describe the mood of GDC this year

and why? I think Adam has two words. Oh yeah, Adam has two words.
Because I couldn't figure out what the one word would be. I think it's just less relevant is the real feeling that I felt. Is that GDC used to be the conference that would dominate and say that's the one you got to go to every single year. GDC was significantly lighter this year. Fewer people in lobbies, fewer people at the conference in terms of where talent is at in this world, a lot of that talent could not make it to this GDC. It's unfortunate. I don't know what other conference there is though. Yeah, that is a problem. That is a problem. Yeah, it's it's not the same level. Yeah. I would say in the immortal words of Kyle from Epic, we're cooked. We're cooked. So then he got two. Let's go Are we going to Let's just stick
All right, it's two words, everybody. Two words.
We're cooked. All right, Jen.
[laughter]
I was triple booked. And my two words, like but it was all side of maybe it's side events. So a lot of what we did, we did

with our sponsors, we did offsite, and I found our side events to be extremely relevant, great attendees, very senior people. I think at those side events. But to your point, Adam, I think I don't I I didn't really get into GDC much at all. It did feel like a smaller, more contained, US-focused crew. Um I know a lot of people from other places in world couldn't even get here. A lot of my meetings were canceled because folks who couldn't get here with the war going on. When I thought about this question, I was thinking about more GDC holistically. That includes side events, that includes pre and post, like like everything that goes into it. Taking all of that into account, I would say it was cautious. There was a lot of performative optimism that you could see happening. I feel like there's so much negative talk that has been during the years that people are trying to be optimistic about things. Uh but yeah, I wouldn't say cooked. I think that's wrong. I totally understand why there's less people. There's wars raging around the world. People

literally couldn't travel. The industry is not doing as well, so there's less people paying these very expensive tickets, but I would not use the the cooked because even when we're talking about the the side events, like there have been side events where like 80% of all global company leaders were in in one event. I don't know how that makes it less relevant. Like there are way more decision-makers here than let's say Gamescom. So maybe GDC floor, but like when we talk about the decision-makers, they were all here. I agree with that. I was at Night to Unite on Tuesday, which is I'd like to call the dinosaur convention of AAA companies, but all of, you know, the senior folks were in attendance. It was absolutely packed. In fact, Chris, one of the things that was to be auctioned off at Night to Unite was a sit-down dinner with the CEO of Ubisoft, and so many people came up to me and told me that they were going to bid on it and then donate it to you. I got like three texts. Oh yeah. We're buying this for

you, Eric. Everyone came up to me and they're like, "We're going to do this for Chris." No one did it, thank god, because it was already awkward. And he was there. And I was like, "Please, [clears throat] nobody introduce me to him. I don't want to have to" He probably doesn't know who we are anyway, but it but that was pretty fun to go through. Okay, Phil, one word to describe GDC. I'm kind of with Adam. I would say resigned. People are just like resigned to certain positions, resigned to AI, resigned to China, just resigned to like this is the way it's going to be. Not negative, just kind of like I All right, this is it.
This is our new world.
This is it. I can dig it. Wasn't the level of enthusiasm I would have expected out of people. There wasn't new ideas. Eric and I were talking about this. Haven't seen a billion-dollar AI game
[laughter]
yet. Don't know where they're hiding. It's more again they're resigned to like, "Oh yep, make loading screens, you know, I do some faster arts and prototyping, like little cool tricks, but that's not what's going to move in GDP numbers. We're resigned.

Turks, too? They're not resigned on anything. I mean, I didn't see a ton of Turks here, so I can't comment on that. I mean, I Maybe it's the Americans who are Yeah, I would say Americans might be the resigned.
the British by default.
[laughter]
By association? Laura? So I would say not hectic. In the past couple years GDC I felt like triple booked, running from meeting to meeting, and it the overall feeling was it was a little bit emptier than previous years. I'm curious when they come out with, you know, post events, they'll post, you know, they'll they'll broadcast how many people attended, and my money's on it's going to be a much lower attendance than previous years. And we see it in the we can actually find a seat in some of the hotel lobbies now. The Ubers were only 7 minutes per order versus 20. I did not want to leave this week like a zombie, just exhausted. So the conversations I had were very select and they were good, but they were definitely fewer of them than previous years. It didn't feel like festival of gaming. There was no festival. I left my glow sticks at home anyway, so

[laughter]
how could GDC be better next year? More festival. More festival, more glow sticks.
More musicians on the on
We saw that one guy yesterday.
Oh, yes.
[laughter]
He reached out to me on LinkedIn. Sorry, we were walking back from the from the event and a Canadian came through. Of course. Of course. And he was like, "Guys, where's DNA Lounge?" I was like, "Like DNA [laughter] like like Dina? Like the gaming company?" He was like, "No, no, no, you got a GDC pass." I was like, "No, the nightclub." And he was like, "What?" And he was like and then he was just like, "I'm Canadian. I'm game developer, but I'm also a model." And you were like,
[laughter]
And then one thing led to another and then he was like and then he knew the instructor of fun and me.
like, "Oh, he was like, let's connect on LinkedIn. I've got ideas pitching ideas."
blazing me afterwards like even that night already. Oh, and he of course as a Canadian, his battery had run out so he needed our help to guide him towards this nightclub.
a mile away, no phone, dead phone. And I think oh, the best part was he was like, "Let's connect. I've got you know, I've got this Oh, then he started pitching mid San Francisco. I'm like, "This is

the most San Francisco moment." That was
was and they were already connected on LinkedIn.
Yeah. That was the best part. Yeah, we're pre-seed, we're this, we're actually doing XYZ. It was This is the fun part about GDC.
what we need to take away from this is when we're walking on the street, we accept pitches for all kinds of meetings when we're wearing our jacket and
From drunken Canadians specifically.
it. Okay. Who are also models. So let's go to the next one. What is the one thing you heard this week that you genuinely did not expect? So something unexpected. This is an absolute hypothesis and sort of a like people talking about what could happen, but I heard it several times and that is what happens with Xbox next. There's a lot of talk about divestments and how that's going like that's all normal. And you know, people hypothesize of course that Savvy is going to acquire because they acquire everything. That's That's we've heard that many times. But the interesting part that I never heard before, the acquirer for that the divestment from from Xbox would be Netflix because Netflix is

trying to own the home screen or own the the living room. What what's their sort of vision?
Own yeah, own the living room.
Own the living room and they're like the way to own it next is just get the gaming platform especially since the WB acquisition didn't go through. They got some stacks. So they're ready
they care so much about Remember they valued Warner Brothers gaming at zero. So I mean, they're they're they're not interested.
Call of Duty movie, transmedia. Hello. Completely different thing.
Maybe new World of Warcraft movie, why not? Let's give it a go. Perfect on Netflix. What do you think, Chris? I think there's obviously generally some synergies with actually having a set-top box that has gaming. And there could be synergies actually with Microsoft Azure, right? Like if they do a deal with like it's a spin-out that they have a partial stake so they do some kind of Azure deal with So there is something there there and the way I heard it at the event that I was at, there was a lot of conviction around it.

So it's like it it felt like this is definitely being discussed as opposed to actually which is a bit surprising. I have to admit you're right. That is probably the biggest surprise I heard this this It was like surprising but then you think about it like that actually makes sense.
Yeah. But it goes off of what you guys were talking about last time when we talked about this that they should divest and that Asha is probably going to be out there trying to find a buyer for it because it doesn't feel like well, what was it called? Project Helix? Doesn't feel like there's been a a lot of movement to save it instead finding a home for it. So does this play into that rumor of trying to find a home for it? Yeah, and I think one of the things I kept getting feedback on the post on LinkedIn as well as what I said on the podcast is like the nature of doing a spin-out of Xbox is not like finding someone that's actually going to write a check for 120 million billion or whatever it is. There's lots of different ways of structuring that. I don't know if I mentioned this on the podcast or not to be honest so I'm just repeating myself maybe, but so yeah, there could be all

kinds of ways of structuring this and everyone I talked to basically suggested that there are many interested parties that would come to the table if if that was an option if Microsoft wants to get rid of it. So yes, this kind of like everything I heard about also off about Sharma this show was not positive in the sense of her wanting to be someone that wants to build the business. So it all kind of lends itself to the idea that she is probably ultimately going to decide that that makes the most sense. But then other people were basically completely contradicting that and disagree with me. So
Yeah. Yeah, so we'll see, but if Netflix makes sense. I'm going to ask you regarding that. So most likely there's going to be you know, sold in pieces. There are some pieces that people don't need. Just hypothesis. What's the value of King? Thank you.
[laughter]
Well, I mean what do they do? 2 billion in revenue? Something like that.
So maybe Haven't shipped a I have them at four to five. I don't Four to five,

they were bought with six. Four to I don't know. What what EBITDA multiplier would you put on them? Oh, yeah, I think four to five. I think that's right. So they've gone down in value. Oh, yeah, the market is down in value when they got compared to when they were acquired. But it is a very profitable business It's a little cash cow. Cash King.
I think I think you could really cut down the head count. No. Dude, there's there's what? 2, 3,000 [clears throat] people?
That's that's sacrilege. Uh what do you mean it's sacrilege? Do we need Rebel Riders? Is that they they would call the team?
Maybe maybe Dreams PE backers get them.
[laughter]
Europeans don't fire people, do they? Yeah, that's why it becomes Turkish. That would be the ultimate Turkish puzzle conquest if they would acquire King. That would seal the deal. Anything else unexpected from the show, Mr. King? Chinese. The Chinese, very interesting. I leave of two minds. One is that I'm not afraid of the Chinese anymore. I look at their expansion westward more out of desperation of their home market drying up in terms of growth and

realizing that like we're the piggy bank. Like you think about 4X, like we are the consumer base 4X. They're making games for us now. Yeah. They're making games for us. They got to appeal to the western
why I'm worried about China. So I would say that made me worried, but I would say the other thing that I found interesting is some Chinese teams are perhaps smaller than I would have imagined. It's not all just a content factory and we haven't respected them as game makers in particular just like people who are good at like making products and shipping them. I still would like to see something original out of them. Like I think Blacksmith Wukong was super interesting, but when I look at like Gossip Harbor and I look about like a lot of their 4X games, they're winning, but I don't see the Lilith innovation. I don't see like the cool advancement of the genre and the gameplay mechanics in the way that I would expect from true innovators and I'd love to see a little bit more from them on that side. The interesting part that I heard from the Chinese themselves is that they're more worried on the success that they're having in the

western markets and that it's going to tip to be so large that there will be action against the Chinese developers. Like they from their perspective they're welcoming the competition and should be much more even, but they have been gaining the market share almost not too easily. They work extremely hard and they get rewarded for the work they put in, but as that gets to higher and higher percentages, it could happen the same thing that happens to them in Korea for example. If they start doing too well, somebody calls their buddy Lee or Kim in the government and says, "Hey, this game by this one, block them." Boom, blocked. Everything is fine again. And so it's a matter of time if they get too big that they get TikTok'd. We didn't cover it on the podcast, but I think a week or two ago there was like a rumor in game developer newsletter about the government potentially wanting Tencent to divest from
Yeah. some of the companies. It was Trump one was the same thing and Trump two is you know, same ideas. It's amazing we haven't been subjected to

this. Like if you think about the anti-kernel cheat that is in Genshin Impact that you're installing on your machine or the right anti-cheat. I'll just say a lot of access coming through that that I'm surprised hasn't been the subject Like it's always We haven't been very salient and we've avoided a lot of like regulatory action and I I hope it stays that way. Like we're not been in the TikTok conversation. I mean, I'd be more worried about like what Genshin Impact is installing rather than what a TikTok is doing on my phone for what it's worth. All right, what topic came up over and over that you didn't think would dominate the conversation? Ooh, well, I can talk about the topic that came up over and over was AI. AI in games, AI tooling, AI integration into pipelines. What processes are we using? What Is it ChatGPT? No, Claude. They What agents did you build for everything? How do we get adoption in from our studios? How do we get people that are scared of AI using AI cuz it's exponentially growing and it's only it's basically becoming more more and more

relevant every day very fast. So I can't say I was not expecting that. I was half expecting that. I didn't think it would dominate so much of the conversation. I thought we'd be talking a little bit more about new ideas, new games and that was a bit more devoid than I was hoping for. Oh my god, I got one. I think I was four or five times people mentioned to me HTML5 games. Oh, really? I wanted [laughter] to scream. I mean, I How many [ __ ] times are we going to go through this conversation about HTML5 games? Please stop. Please stop. 2015 called. Why why don't you think it's worked though? Ask Adam. He had an HTML5 startup.
work. Did you know
[laughter]
No, really? You think?
No, it didn't work. Where does the thesis break apart? Large TAM. Everyone's got one. Basically because web access The retention is zero, right? install apps on your phone and you have a little icon that you go back to constantly remind you to go back. HTML 5 people tell me you can do this. You can set your little app icon when you favorite a

bookmark. That's that was that's circle. But it still doesn't work. Like still like any of those webs like HTML 5 apps you look at the the retention especially long-term retention it's just not there. They they have this fever dream about what's successful in China is going to come right back out here but people don't get use the content use the device the way that they do there so. But I will say like back to Laura's point cuz I think that's the one that like actually dominated conversation was anytime that there was really conversation with anyone we would initially talk about the state of the market which I think you're right of like that that resigned like this is the market we're in let's just pick up our boots and figure this out right and then as soon as you start talking about AI it would be like the energy would just shift in the room it would just like flip a switch and everyone was like we got to talk about AI. I've been doing this really cool thing and you'd be like you'd be talking to like the CEO of this company that like probably isn't doing all of this work but they'd be like oh on the plane I built this thing that did this thing in this whole completely different energetic tone. So yeah that like to be honest that was the part that was a bit more surprising of like how

pervasive it is and also just like how many people have gone over that hump of agentic building and like code building like cloud code because I just finally get someone's over that line they've just light bulb on their head. I kind of think like all the dorks are just having nerdgasms constantly
[laughter]
and they just talk about it like it's their girlfriend cuz they're finally getting laid or something it's just it's nuts It's nuts. Phil and I geeked out as soon as Phil came to visit and we were [laughter] geeking out about our agents and then Adam comes in and completely like one ups us with his four agents in a virtual private server and Phil and I were like oh I guess uh One of these guys. Yeah and it's all like like 1001000 hahaha [laughter] you know like I'm they're talking their own language. You might not be you might be
[laughter]
invite it would be a little less RELEVANT RIGHT NOW. TRY TRYING TO SAY THAT IN THE MOST polite Canadian way possible.

Lean in Eric lean into the ones and zeros there's a reason why everyone's being excited here. I will do I will gladly have a one-on-one with you where we go through it and I get you excited about it. But you guys are you guys are having your moment like you're having your nerd moment and I I appreciate that and so enjoy it while you have it you know cuz everyone else is going to catch up eventually. Yeah exactly eventually maybe next year we'll see Eric. The reason why I'm engaged in this so much is I don't want to be a dinosaur. I don't want to be left behind and I want the the kids that I'm yodaing that work with me to make sure that they have a job because if you're not on the forefront of using this technology no one's hiring young kids anymore. Like they're not even to get jobs and so if they can go in and say well I built an open cloud agent and here's what I'm doing with it I would hire that person because then they can teach me to be better. And what's crazy about this stuff is like there's a lot of public data out there that you now have access to with AI right like when I find like AI becomes

powerful is when all of a sudden it gives you access to things that you didn't have access to before which then creates these types of insights so like there's just a ton of these APIs out there that if you can connect an AI or an AI agent to build with those so you now have access to data that most don't and you can be significantly more insightful. I picture Chris with like his encyclopedias.
[laughter]
Old Britannica. You don't need them anymore. I'm piggybacking on there cuz you talked about like the jobs in the macro level again from my perspective coming in from the the old continent
[laughter]
Hello from Greece how expensive things are here like that came up all the time when I was talking to anybody who's not American but even Americans when you'd raise that that created a lot of conversation. It's not only this city like people would talk about how expensive US in general is and that's not a good thing like with all the prices going up all the time the tip is weird as well like you order a coffee then they turn the screen around and

it's like the minimum is 18 now. But you don't have to give them 18. I understand but it's just like it's weird that it's in every scenario even if you go to a grocery store there's no tipping. You don't have to tip the grocery store. I [laughter] feel it's my I feel it's my 78 cents when you're buying a coffee I'm like do I have 78 cents for you like yeah sure. No make eye contact say no tip and sign it away. It's a bad UX pattern it's basically creating this thing.
It's hard it's hard for you folk from the third world to afford [laughter] things in the first world. You know I get that I'm sorry.
We're coming here to subsidizing the empire here.
[laughter]
But yeah that like very very expensive again I'm not comparing it like I am of course comparing it to Greece but I shouldn't compare it to Greece I'll compare it to London for example and this city is more expensive than London but it is lot smaller than London. Nice shirt nice shirt you got on here.
[laughter]
Nice shoes and fans. Welcome welcome to America welcome to America. Business booming.
[laughter]
We're going to keep going and speaking of talking about things

what are people talking about publicly that they might actually be saying something a little bit different privately. So I think there are things that you've been hearing especially couple of you have been having a lot of good backchannel conversations. So what what is it that you have been hearing that you might be able to reveal for us? I mean I think that's the AI conversation as well. Like publicly it's AI saves everything. We just have to invest we have to do this we have to do that and it's almost seen as the path. And then privately super worried about like AI adoption is not what tools you choose to use what what enterprise subscription you choose to make it's how do you run change management across your organization to have the adoption level high enough where people are actually capable of using those things it doesn't make any sense buying subscription when they can't even prompt properly. Yeah like that worry of can we actually do that and what happens if we can't and then the second part of that's from the management side but the second part is

from from the employee side or more like operational side is like if we do this do we lose our jobs? Or do the people on my team lose their job like that's the quiet part that is not not said out loud but on the front side is like we have to do it and it will be the salvation if we get it right. Yeah was talking to folks a little bit about UA and that a lot of the bigger games are facing some saturation time and CPIs are increasing a lot and they're worried CPIs CPI I was like I was TPI now I don't know something. CPIs are are increasing and so they're starting to be a little bit of of folks worried about you know we're hitting some saturation points and how else are we going you know downloads are down I think we had the sensor tower event on Monday that we all went to and by the way my panel kicked ass just just saying against you boys. And what Chirag had said was I think that downloads in the US were down 10%

was it was down everywhere but I think in the US it was down a lot. So how are we going to go about marketing and so I think people are worried about the future of performance marketing. I think people were actually talking about going back to brand marketing. Holla. And I I look over at Chris who shakes his head for those things. Would you recommend that? I would not recommend going to like old school TV right away. What I I always pitch brand performance. So I think influencer I think creator I think there are things in the middle that you can try before you go right to TV or CTV. I do think sports marketing for certain games is live TV is still working. You know I learned a lot about some really cool Tik Tok activations I told Adam I wanted to connect him with Tik Tok to learn about a lot about there some of their creator programs that have organic tied to paid kind of flywheel. This was the topic on one of our panels that was really really interesting. So I think that's where I would be looking if I were looking for solutions outside of

just traditional performance marketing.
I'll give an example how crazy not crazy how open-minded the heads of growth are now they were talking about investing into the building their IP so much that they would be um essentially making YouTube videos and YouTube series about it so basically building out a multimedia arm to build out their game IPs to connect with the audience specifically through YouTube not Netflixes and so forth so it's a pretty big of an investment. Like YouTube shows entire YouTube shows. It's so funny I feel like like everything comes back around again didn't didn't like a lot of Supercell games do that in the past? Clash-A-Rama yes
Yeah. Yeah how many hundred million views that does probably billions of views. Would that be an interesting place where we would see AI be utilized? Did anyone have an interesting AI implementation story that they would like to tell? No virtually none that's the problem. That's the problem.

You're giving me loading screen art. I mean we can't even get the West to sign up for making cosmetics like it's not even on the table. I keep hearing about these extremely long pipelines for cosmetics. AI comes up just not even not even a subject of conversation just completely off the table. Like we've we've just completely catered to the artists. I've heard I've heard some. I heard I heard a CEO try not to mention and and give any references but just saying like again with that with the executive level conversations there's that where they were putting a lot of AI efforts that we benefits according to the person is in offsetting the nonsense of the company so not core company not building of the products but more everything that typically sits under COO organization so from accounting to to all all the sort of a mandatory things, find efficiency, reduce headcount, and um and improve the performance. Again, trying to be like as vague as possible, but saying like the AI investments were not in product

building, but more in operational side of the company. No. I'm just saying [laughter] I'm just saying that that's what that's what was was the Of course, they were talking about the operational
Chatbot, HR. I'm not going to buy that.
Anyway, I I think we said this earlier already, but like I did not see one AI gaming concept.
Yeah. Not one that No, I saw them. I saw them. I just wasn't excited about them.
No, I I mean me, too.
that were actually looking at them and and do publishing for living, and they're like, "No, I've seen nothing of substance that But but that's the thing is like you you you look at these pitches, and they tend to be built as tech demos first. And they're not a real game. The problem is I'm not I I don't want to keep going back to the same piece over and over again, but if it's not unique and new and interesting, it doesn't matter. We don't need more content out there Let me let me talk about the effect of that. Actually, now that you brought it. So, again, yes, saw the demos and and like this is built in 6 weeks, and look at it, it's like this game and so forth. So, look, you know, impressive, not new. Okay, got it. But the effect that it had

was the effect on the studios that were funded, let's say, 2 3 years ago, have been building a product, and are now like 60 70% in, maybe looking to find a publisher, maybe looking to find a little more funding, and they're being compared one to one to like, "Okay, so you've spent like, let's say, 4 5 million dollars, and this is what you have. You spent 6 weeks on this, and they're, you know, kind of the same from the investor's perspective. What I think is happening is that these AI developed titles, they like the early versions, are making the cohort of post-2022 look really, really bad in terms of how slow how slow they are, really. How ineffective. Like they're dead in the dead in the water because they can't adopt AI fast enough to to do anything cuz they've already spent 3 years. Development is far more complicated than just throwing out like a vertical Yeah, well, they were showing vertical Both were showing vertical slices. The

only one But what Yeah, what you have Yeah. What I heard What I saw was a lot of excitement around like the way that I structured is kind of like productivity pipelines and then experiences built as a pyramid where in companies when you get that first AI adoption comes from that productivity layer where people start to use it and actually start to feel it. That then brings it to the pipelines, which then you can start to talk to companies and say like this art pipeline, this narrative pipeline, etc. is all like fully driven by AI. And when we get to those points, you get to this really, really fast iteration loop, and that's when I get people really excited when they say, "Hey, it used to be that we would have this big team that would iterate on this thing, and it would take weeks in order for us to align on an output versus now you have a operator or like a product manager that drives the strategy and iterates significantly faster, and that's when I see real excitement at that layer." That experience layer is really where I'm like I I haven't seen great versions of this. Like it's still the the Darth

Vader in Fortnite types of thing, right? Like and it's still tech demos. It's not real games. When like I think there's still plenty of potential there, and I don't want to be so doom and gloom that it will never happen, but I think I still have yet to see someone really do it because I also think that it's been a lot of AI first companies are sort of like Web3. X of Web3. Yeah, X Web3.
of AI first. Which again, like I I I don't want to like disparage that whole group, but at the same time like it's it's got to be a great game team first that understands how difficult it is to create fun, and then using the LLM to really augment and and magnify that fun. I think the problem is even worse. Like I don't see indie developers adopting AI. Like I don't see the small guys doing something interesting, and I thought it would start there. Like when you have nothing else, and your back is against the wall, like you think you would use these tools, right? What do you mean like indie premium or like smaller scale mobile?
Anything. Show me the cool [ __ ] the indies are doing with these tools. Nice try. Like all of the No, cuz I cuz I saw them at I felt like I've I've seen very little

from them, and I would at least like to see that cuz it it trickles. Yeah, but like I I guess I I saw it from small mobile teams. I saw it from Chinese teams, absolutely. I saw it from Korean team. Like Like there
Can you Can you speak to a specific example?
I cannot. Maybe Maybe Phil needs to start putting in angel checks, and then they will come to you and show [laughter] them. Now you're just sitting on your money in Cyprus, [clears throat] and then nobody shows you anything.
Maybe Maybe I should. Well, it kind of goes to my next question, which is around, you know, we often talk about investors, and and Chris's favorite topic is you know, VC investing in gaming, or what publishers are doing. Is there any vibe change lately from the investor side or the publisher side on state of the industry or things that they're seeing? I mean, we had a few meetings with some different investors. It was at some of the events we were at where there were actually folks still investing in games. But I think it's it's it's in pocket. So, overall, you walk around those conferences, and you talk to people that

have been really looking for funding, and that mood is still there that was there last year. It was like it is incredibly hard to raise funding, right? But then you look in pockets, and you're like, Turkey. Yeah.
It is not difficult to get funding, right? If your area code is Istanbul, send wire it in.
[laughter]
But yes, the and like not just in Istanbul, but there's other pockets where there is significant investment, but
Cyprus. Yeah, maybe not Cyprus. Where Where else Where else do you think besides Tel Aviv.
We talked about this last year, right? But like it's still very much like Istanbul, Tel Aviv, Vietnam, and China. I think we're also going to see, and there are a few that are not really announced yet, so I'm not going to really out them at this point, but start to see more publishers come on board. You know, with the VC money gone, then people can raise money to be a actual publisher. And as I've complained many, many times about all the different venture capital firms that are A16Z and Lightspeed
A16Z. It's one of the best fund out

there.
I mean, they're acting as publishers, but they're not publishers cuz they don't know how to publish, right? So, if you actually pull a team together that actually knows how to publish, they have resources to actually spend to build games, and they can cherry-pick the ones that make the most sense for the market because they have that experience. You know, that might be a recipe of making some money and and getting people more games in the system that are actually good that can generate revenue for the industry. And I think that's a very viable strategy in absence of the VC money these days. I mean, it's it's clear. Big VCs have divested from a lot of it. Have stopped investing in games. As Chris would say, full stop. It is over.
It's full stop.
over.
There are still VCs who are focused on gaming. They're of of a smaller size. And then those who are of mid-size, who have hundreds of millions in on assets under management, maybe tens of investments, as Adam said, are focusing much more on specific growth markets, have full stopped certain geographies

and certain types, and have rehashed their thesis. Some of the things that, for example, like when previously you could raise money pretty easily if you were, quote unquote, veteran of the industry. You have 10, 15 years, 20 years. That's the type of founders they were looking for. Now they're looking for young, ambitious, somebody who's coming in from a different perspective, using AI, sort of a who's who's very open-minded, less on the other sort of a well-marbled cohort because they haven't seen a lot of uh results from that. And then another thing that you would hear from VCs is they've expanded their thesis. So, of course, picks and shovels is the first one that comes in. Everybody has to have their D2C. Everybody has to have their, you know, their back end. Everybody has to have those those those type of a tech tool companies. But now more and more they're looking at what else do we have access and expertise on? Well, we know the people who made games, then now they're making apps. So, now a lot of founders who used to be game founders are actually app founders or AI founders, etc. So, that is expanding,

and it's almost like these what we call gaming VCs are becoming like they're still gaming focused, but gaming adjacent investors. So, next year it should be called gaming adjacent VC
[laughter]
Or games plus. Yeah, it's like game support. It feels It It's the founders usually tend to be of the gaming industry in those funds. So, they have that DNA, if you will. It's game DNA found
Festival of apps and games. Yeah, but A16Z, as you mentioned, or Lightspeed, or other ones are just out. Like it doesn't make for fund that is multiple billions to continue investing is because the the outcomes are not there, apart again from Turkish ones.
course, I've been saying this for the last three or four years.
corrected.
Yes.
Yes, that this is was a dumb dumb dumb
And now it's full stop, as you said. And PC By the way, PC games, don't even come at VC with that.

PC ain't VC. Like that's a
[laughter]
That's a It doesn't make PC games bad, but that's a publishing model.
But that felt like there were there was some talk of that last year. That's dead now. There There's the outcomes are not there. And the repeatable like it's not there, and then we've had that on Sensor Tower panel. It's basically not a VC case. Doesn't make it a bad bad business. Doesn't make PC look anything bad. It just has to be a VC case, but those are not. The multiples are not there, and the growth is not there. Essentially, you need a publisher for a PC, so Doesn't durability scale?
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you from this week. Did anyone have like a conversation, something they are going to like kind of take away, think about a little bit more? Did anything leave an impression on you? This might trigger Chris, but like It might. Let's go. So I've just been digging deeper into Roblox. So I have a number of sort of like very memorable conversations with digging into that to really understand the market. I like I'm still of the same opinion that we had you know, a few weeks ago around Roblox and the durability of those games, but having more active conversations there and like I'm trying to challenge my perspective cuz
There are games that are years, like six, seven years in in Roblox that are doing well. Yeah, so that was actually really really nice at the the the Play Ventures party, like being able to talk to a few of those developers. But in what context? Like what does it mean for a big publisher? I I didn't get a good answer on that yet, but I'm still very curious and I want to dig in. I did hear something crazy from some IP holders where they're talking about using Roblox

as a means to build marketing, like a brand marketing campaign Yeah. and then shoving people out to Yeah. their mobile experience. Absolutely. That's what it is. All right. That's what everyone's talking about.
Wait, on like a game publisher? Yeah. Like a mobile game publisher basically says, I want to I want to support my game with some chachki [ __ ] in Roblox to push all these 13, 12, 10-year-olds into my game on
It's a marketing channel. Yeah. Using as a marketing channel. I'm sure Roblox would love to be that.
Yeah, let's just keep the name chachki though. Yeah, chachki. I I haven't heard I've I've actually seen you know, the deals come through. So there's both the IP, the brand deals, that's pretty typical. That was the first flow of Roblox games, but now what I've been seeing is established, renowned publishers are working with Roblox studios to create Roblox native experiences of their franchises because they understand that that is Give me a name. Give me one. I can't I can't name these things, but I

again, I a lot of these are under NDAs, but they are Uh never like we're using this as a channel to move the players. It's more like we're introducing our IPs, which we know these young kids are not playing, and they're getting a Roblox native experience of our IP. As a fertile ground to send people to your app? I mean, what are like a low-level view of the platform? This is where that market is though. If you want to reach Gen Alpha, Right. that's how you reach them and if you view it in that way, it makes sense. It's so one of the things on this topic though, um so I was at I to Unite on Tuesday. The same night there was a Roblox party of a lot of folks and and we were kind of texting back and forth of like, well, what was yours like? And mine was like, you know, everyone's dressed up in these wonderful dresses and the average age is like 55 plus and the Roblox people were like, oh my god, it's like a party. It's a bunch of young and I think that is something

to be said about our industry is where is the energy kind of coming from? Where is that next idea coming from? And I'm not saying it's just Roblox. That's just the dichotomy that I'm seeing in the in the energy and in the innovation of where the industry
game makers are going. They're going to Roblox. They're starting their careers with Roblox and that might not be a gateway. It's not Roblox and then something else. It might be just Roblox. You just can't pronounce it properly. He he switches back and forth into saying it correctly. It's my Greek.
[laughter]
I will say like to Eric's point, the issue now is still like as a larger-scale publisher, how do you look at Roblox and say like now we're going to build that strategy? The the strategy cannot be we're going to throw together a bunch of 16-year-olds to throw stuff on Roblox even if it's a marketing ploy. Adam, they're not any more 16. They're

now 30. On Roblox? They're not 30. Developers? No. No, Jen says Are we talking about developers? I'm being hyperbolic, but like at the same time like Are we talking about players or developers? Developers. Yeah, they're 30. Their studios of 100 people. By the way, we have to redefine the word hyperbolic because you're not being hyperbolic. Oh, sorry. Like I can't [laughter] Tell for like Like slightly above facts. Yeah,
[clears throat]
hyperbolic. You're going crazy. Can you see this? I'm going crazy. [laughter] In Canada that gets reactions. But this is like Canadian also Canadian that's [ __ ] tired. Like real tired. Yeah. Yes. You did the size twice before you said that. real low energy. Yeah. So why can't you sign the kids? I want to know. I want to know why cuz I cuz I know someone who's doing that literally right now.
Me, too. Giving an IP to a bunch of kids and go do something. Yes. Yeah, I heard that, too. And then it just becomes like skunkworks innovation lab and innovators dilemma within a large organization.
seen these large organization work with multiple different Roblox studios at

once to see who fits their development model and who's executing at the highest level with their IP and without shipping those games and choosing then one or two of those developers to further work on their IP and release games according to their standards on that platform, but with the experience of being a Roblox native developer. Biggest IPs in the world. GTA 6 can't wait. GTA 6. It's the GTA 12 is coming on Roblox. Let's get to our last question since poor Adam's going to fade over there. What's the thing that the industry needs to hear right now that nobody is saying out loud? I'll kick this one off cuz Laura teed me off. So um I I I have a client that's a the game is a Gen A darling and there was a great article that came out around friend slop. And so I was going around asking folks, hey, do you know what the genre of friend slop is? And Chris was like, I don't know what you're talking about, Jen.

And I'm like, oh, obviously you don't know anything about Gen A or Gen Z. If you work with any game or any developer that knows Gen A or Gen Z. So Laura's like, of absolutely. Laura's on Minecraft and she's like, oh, I know what friend slop is. And so if you're not paying attention to the genre of friend slop, which is basically these social games that are primarily PC-oriented that on Friday night you and your friends go in, it's generally lower price point, lower fidelity looking experiences, highly social that you come in. There's sometimes a little bit of jump scare or horror to it, but there's usually co-op play. These are the type of experiences that Gen A are expecting now for gaming. And I think as developers, as we work with developers around the world, we just need to pay more attention to what Gen A is really looking for in a game experience. They actually have said if it's higher fidelity, it looks like it might be more difficult to get into. I might not want to spend my time on that. I was actually thinking about it, but I was more in one

sentence, what the industry needs to hear or the developers, like your playbook is outdated.
Yeah. Yes.
That is really the case and and it's really important to kind of take that not as an insult. Like you have an incredible background. You have whether you're PC developer, a console, or mobile, all those learnings are valid, but you have to update your playbook. It's not only just adopt AI. It's not it's understanding the the audience and understanding the experience, understanding the platforms. And and it feels like the harder it gets, the more certain developers are kind of going back back to the basics. We're just going to make a really good game. It's like, "No. No, no. That that is given." But, the playbook that you're using is outdated. Well, also make a good game for who? And so, we The number one thing as a marketer I always try to tell game teams is you have to make the right game for the right audience. If you are the audience and you want to make a game for you for you, great. But, what you think is a

good game is not necessarily a good game for Gen Alpha anymore. The key The key one with Friends Loop like it's not just Gen A, right? Like I I play a ton of Friends Loop game. Gen A and Adam. Oh yeah. Oh yeah, for sure. It's like specifically for me. No, but like actually I really recommend most people go and play these games cuz it's actually one of the best experiences I've ever had is like me and my friends jumping online and giggling the entire evening about the craziness that happens in these games. But, but it but it is like it's not just Gen A. It's It's really like all these people that have grown up with Roblox for all these years, right? Like Roblox has been out for a long long time now. These are those developers moving over to Steam and recreating them in a Steam environment instead of Roblox. Poor Chris is like, "This is my personal hell." Oh yeah, I'm really You should You should play Schedule One with me. Or Schedule I, whatever it is. Yeah, sure. It'll be great. I did hear a lot lot of talk about retro games like bringing back remaking old games. I kept hearing that

over and over again. It's not Remakes is just a good business. Everybody No, I know, but it was like more like bringing back old MMOs and like seeing you know seeing if they could find new audiences. Like back how long is this still? Yeah, but like that seems to be catering to more people like myself who you know want to reminisce about you know playing these old school games, but So, what's the game for you? I'm trying to actually think about like what What would I get into? Oh, I know what I would [laughter] do. Do you need to do World of Warcraft again? Or is it Bring it back the grind. Square Enix, if you're listening, do Chrono Trigger. It's time.
[laughter]
I'm trying to bring that one back. Bring that. Command and Conquer. To jump on your point. Had enough times. When you were describing these two parties with the kind of the What was it? The night to night dinosaurs and then the the young the Roblox party. I feel like that kind of paints a very accurate picture of how people are thinking of game development now. There's games that we make that are triple A high fidelity that they cater to a specific audience and they're now a

little bit exclusive of this younger generation that just wants the social aspect. They don't care so much about having the perfect narrative or the graphics where you see you know the waves the bits of hair that are perfectly aligned in these this amazing kind of curated polished experience. But, you say that but like Resident Evil Requiem is killing it with their hair strands right now. It's not It's yes and. It's yes and. But, then there's also this group that's emerging that's very involved very interested in in in playing these games that don't need that. And I feel like even with if you like think about mobile, if you think back to when Royal Kingdom and Royal Match & Life, it was this polished polished experience because that's what that demographic wanted and it resonated really well. And it's almost like questioning how much room do we have? Do we just need to focus on social? Are we creating more of a social space that doesn't necessarily need as much of a game? I don't know. I think it's a great question to explore if we want the younger generations to move to if we want to keep them in the loop keep them involved, what changes do we have to make? The reason why I bring this up is

because Chris talks about this all the time. If we don't have new distribution, new audiences, new games for new audiences, there's no way for the the market to grow. And I feel like this market and this audience is underserved. And that's why I'm calling it out is Friends Loop does not exist on mobile today. How do we take what is known about what Friends Loop is and how do we create that to be a genre that then opens itself up on mobile? To me, that was like my kind of insight of the week that I think is at least somewhat of an untapped opportunity cuz we're always trying to find that. And I actually see Chris contemplating this in a way that is positive and so on the look on his face. So, I The challenge I would still have here is like we're we're bucketing people into these generations as if they're like binary statement. Like Resident Evil Requiem is doing very well with Gen A and Gen Z right now. Right? Like and and that's still relatively the old playbook. But, if you look at how

Resident Evil actually reinvented itself speaking to your your new playbook thing, they added the jump scare elements from Res 4 or sorry Res 7 Res Res 8 then brought back a little bit of that shooting element and Res 9 is this game is like, "Hey, we're going to have Poppy Playtime for half of the game and we're going to have Resident Evil 4 for the other half and you're now going to be able to get like all of these generations all playing." So, I'm just saying like we keep bucketing these things as if they're like binary things. I think things are a lot more nuanced than that. That's fair. Well, that's That's fair. I mean, I I think Oh, sorry. I'm so sorry. I was expecting more salt. Don't go crazy.
[laughter]
I think that was the most animated I that I've seen him. And so, I think he's very positive. He did apologize at the end. Canadians. Well, that took us through all the questions. Is there anything else I may have missed? Request for GDC I think that I heard the most that makes sense as development request is like now that they have a little bit more space at GDC due to the a little small attendance, it

would be great if they would come up like a of a BD ticket where they would build a space for all the BD people not to sit be at Saint Regis or Marriott or all these lobbies, but they could actually buy a ticket so they can be at some kind of a catered BD area where you could have your meetings. That would be fantastic because it shouldn't be overlooked how many people are coming to GDC to do BD that are not you know monetized or catered to by the GDC itself. Didn't I just change that? Like they they removed the expo pass which was that like lower cost just come to go into the But, people still chose not to buy that ticket. There is no specific area. That's what I meant. Like they haven't built a lounge if you will a big lounge area where that would be catered where you could have small meeting rooms. They do that on the media side. Like you can have media interviews. We have the media passes, but similar but even better lounge experience would be catering to what GDC also is. It is also a place for business and I would like

this to continue as a place for business. Okay. All right. Any other final thoughts? Wow, Chris without final thoughts? I think So, I had something I had something to say, but what has happened is that everybody has gotten feedback from real people and I think Chris has had real So, he's digesting his feedback.
[laughter]
I had things to say, but they're actually I don't want to leave off with a negative vibe. No, no. End it with something positive. Let's hear it. I want to give a shoutout to Mike Doom. This We went on a bike ride this morning. I got a flat tire halfway through the ride. And he was like the He's like MacGyver dude with that stuff. Tried to fix it, couldn't fix it. We walked back and he was just super cool about it super mellow about it. He is one of a kind. So, thanks Mike Doom for helping out and hanging out this morning even though it was kind of not what we hoped to be. Fine. I'll give a shoutout to Matthew Ball. I you've been attacking him on the podcast. I met him in real life and what a wonderful

Canadian. How dare you?
[laughter]
Now that I've not attacked him, but now I shall defend Matthew Ball.
[laughter]
Mr. Me here. I do have to say that it is a wonderful experience walking around GDC. I was stopped on the street. I'm stopped everywhere I go. People ask me how I'm doing and I'm doing great. 99 90 to 95% better. It's so heartwarming to have people come up to you smiling and say that you know the podcast that we do together helps them understand the industry. Helps them understand what's going on. They just really appreciate what we do and so I would say I love Most. Not everybody.
[laughter]
Not not Chris's fans. No, I'm just kidding. Just kidding. Just teasing him. The ones who aren't as spicy I get Well, I got a No, but seriously I do think that they What we bring to the table is everyone has a different perspective and they love that we have the opportunity to

respectfully like disagree and have those conversations. And people have learned from it. So, I love doing this with you guys. I love seeing you in person. Or actually if you're watching this, we're all sitting on couches like it's professional which is also like pretty interesting. We're not on a Zoom call. We're doing the photo shoot later. We're announcing that we're all moving to San Francisco and recording this on site. No, no one's moving to Canada, dude. Ivory Tower Toronto. Let's go, boys.
[laughter]
To the six. All right. With that, we're going to close it out and say thanks everyone and we will see you next week. Thank you, GDC. Woo. You did it. You made it to the end of the episode. As a fan of the show, it would help us out if you'd subscribe and leave us a review on the podcast service of your [music] choice. Those stars and likes while a small action on your part mean a lot to us and help to grow the show. More importantly, are [music] you a member of the Deconstructor of Fun Slack group? If you have five years or more of games industry experience, [music] go to

deconstructoroffun.com/slack and apply to join. Join the games [music] industry's best professional community filled with peers always willing to lend a hand. Or subscribe to our newsletter to get all the latest insights
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from the Deconstructor of Fun content creators. Thanks for listening.