US consumers are planning to cut back on buying video games

Hello and welcome to the game business show. Last week we delved into the UK games industry, whereas this week we're taking a closer look at the economic realities in the US games market. Plus, 11bit studios and the alters is in hot water with fans over AI generated text and we look at the performance of Death Stranding 2. But before we get to that, I'd like to welcome our guest host for the show. She's an award-winning news reporter and investigative journalist currently working over at IGN. It's Rebecca Valentine. Welcome, Rebecca. Hi, Chris. Nice to talk to you again. Yes. Rebecca and I worked at games industry.biz for what, three years? Longer than three years. A little over three. Yeah. Glory days. Good times. Taught me everything I know. Uh, wow. I think that was probably everyone else. Um, the um I caught up with your uh I I read the story last night um that you posted. It's over a month old now about the creation of the Pokémon logo, which is I absolutely love these stories. I love it when you do stories like this cuz um there's it's

really a wonderful human story about this designer that was brought in at the last minute to create something that would go on to become an icon basically. Where do these come from, Rebecca? Do you just do you just hear about them on the forums? How do you even discover little gems like this? Well, this one was sort of odd. I I do joke because most of my reporting is serious and often often kind of grim and and depressing, but unfortunately I joke that, you know, every like five or six stories or so they have to throw me a silly one to keep me happy. and you know, somebody usually does. But yeah, I mean, normally normally stories like this come from just being embedded in video game communities and seeing interesting things that people are doing or running into interesting people. This one fell into my lap. I got an email out of nowhere from this fellow Chris Maple. I was very skeptical of it at first because I get I you might listen to this and think this is funny, but I I get emails like this kind of all the time of people saying because he's he's sort of promoting his own work, which is fine. He's a graphic designer, does really really wonderful work. Uh and he was he was talking about this story that you know is now geez what 20 almost 25 years

old. He was telling that this happened and was very very much trying to get a story in a publication somewhere. And I'm always skeptical of that because I get emails all the time of people trying to promote their books or whatever. And also I looked him up online and the only information I could find that attached his name to this logo was his own website that you know he he's had for years but he had only recently updated to have all his Pokémon stuff on it. I sat down and talked to him and he had so many very specific details in it that it seemed it seemed like it had to be true, but I had to do quite a bit of leg work to poke around and and confirm that he was indeed who he says he was. And and he was people who worked there at Nintendo of America at the time. U multiple people confirmed to me that yeah, that that's the guy. I just love it when it because it's not just about here's how I made a logo. And yes, at the end he's pitching for to work effectively, but it's about, you know, sitting in the lobby and um and being given the pitch and having the and and

and all of that, you know, the picture of him with his son on on the computer. Yeah. And I love the hunt for the crystal horse head that you had to go on. Right. The reason why that became a detail I focused in on is because I was trying to prove that he was who he said he was. and he gave that detail in the interview and it's just such a specific he he talks about sitting in the lobby of Nintendo of America waiting to go uh hear this pitch to make this logo for them and he remembers seeing this this crystal horse head decoration in the lobby and he g he just explained this with such detail and fascination and I thought well no one who would was making this up would would come up with that weird detail and so I ended up I was having trouble at first finding somebody who could confirm that they knew him. I did eventually do that, but when I was having that trouble, I thought, well, maybe as a backup, I can find someone who remembers the crystal horse head because if somebody else independently calls that out, then it it's much more likely and maybe not 100% provable, but but significantly more likely that he is really who he says he is. And then as I

went down that rabbit hole, it just got sillier and sillier until I ended up talking to Lance Bar. Yeah. Well, it's not been found, but love it was in the Game Over book, which I think most most read at some point. Somebody emailed me. Just some some person who read the article emailed me and said, "Hey, I read this book and I'm pretty sure it mentions the horse head." And how do you remember that one detail from that book? I know. It's what sent I wouldn't have remembered that. Um I just love those stories. I've done a few of little things in the past. I did um the making of the first FIFA game, which wasn't the plan. The plan was to do a very factual story about the history of the FIFA franchise, and I found a very human story about how that first game was sort of pitched and made and came to be. And it's just know and I love that story. It should people should read it. That's what I'm saying. It's a nice story. It's a happy story. It's a nostalgic story. Um and um it's not at all depressing than what compared to what our first topic is today on the show. There are other stories that are breaking at the moment in the video games industry that we're not able to talk about because um at the time of recording they hadn't gone live. Um you will know what they

are because we would have certainly covered it on the game business um before you listen to this. But our big story this week on this show is looking at the tough economic situation in the US uh video game market um and just the US economy generally. At the game business live last month, our live event that we did in Los Angeles, we had Sakana director Matt Biscatella uh join us on stage to share with us some data around how consumers are thinking and feeling about the economy. There is one positive. He had a he had a big list. He we're going to put the video up by the way on uh on YouTube so you can watch the video. I watch it because he does have slides and one of the slides is he had um a positive thing that's happening to the US consumer which is that inflation is starting to cool which is positive. Then he had this big long list of of negatives. So you know um in higher prices, declining consumer sentiment, increased household debt, tariff uncertainty and that's not even all of them. It sort of set the tone really for what was a slightly unhappy uh uh presentation. Matt shared some data that was from civic science who

have been surveying consumer sentiment around the economy. They do it several times a year, more than once a month. And in his last report, consumer sentiment around the economy is at its lowest point since July 2022, and that's been consistently going down all year. Um, in now, in the first quarter of this year, there was a GDP contraction in the US, but even so, retail spending was up 4.6% compared to the year prior. So, despite all of those headwinds, higher prices, lower confidence, etc., consumers were still spending. Um, this is Q1 data, so it's up to March, but and Rebecca, I'm sure you're about to point this out, what they were spending that money on was food and drink. So, food and drink spending was up 3%. The money spent on non-edible things, that's things you can buy from grocery stores,armacies, and stuff that isn't you can't eat, um, that was up 2%, but general merchandise, which is everything basically that isn't essential items, is games is in there, tech's in there, power is in there, that was down 2%. But these increases are to do with spend. It's not to do with number of things sold. Food and drink prices have gone up

and up and up. And actually, when you look at what the amount of units of things being sold, food and drink is flat. Non-edible products is down 1%. Um um so there the spending increase is entirely driven by the fact that food and drink costs more to um to to spend. All that data and there was a lot of it is just showing that consumers are being forced to pull back on spending because they're getting tapped out on higher prices. Again, I'm not going to do the whole presentation, but um Sakana said that car insurance prices are up 6.4%, utilities up 15.7%, shelter up 4%. All of that's putting pressure on the consumer. Uh 55% of US consumers are looking for sales deals more often as a result of rising prices. 44% are cutting back on non-essentials. Um 80% of consumers are concerned about a potential recession in the coming months, um which is also impacting their decision. Um, I will cut to a clip from Matt Rebecca, but uh that that doesn't I mean this isn't this is everywhere, right? This isn't particularly US problem at the moment. We're going to talk about um tariffs in a moment, which

is which is more perhaps concentrated on the US, but um it this is not a great market to be selling stuff in that isn't essential. No, it it doesn't feel great. I did I I was curious what what the numbers were going to shake out to there because I and I'm going off memory here, but I remember listening to an NPR report about this same topic uh that was talking about there was an increase in spending or at least flat spending in Q1 because people were stocking up because they were hearing about these tariffs and so a lot of people were spending more trying to make sure that they had whatever it was they needed to sort of brace for things suddenly disappearing and and things haven't vanished off store store shelves or anything. I mean, maybe maybe certain things have, but for the for the most part, things are available, but you feel it every single day here. It's just everything is wildly expensive. And when you take all that in aggregate, I don't know. I I understand why people are complaining about $80 games. Yeah, there's confusion a little bit. You talk about stocking up there. Product availability is a concern, but um basically tariff sentiment is fluctuating quite widely. Rather than

continue to read it out, here is Matt Biscatella himself to share more details on tariffs and what the games industry can potentially do about this situation. We've seen dramatic swings every time we've talked to consumers so far about where they stand on tariffs. About 35% of people we talked to in January probably didn't know what a tariff was. They started to learn a little bit. They started hearing those news reports by March and the opposition to tariffs strongly increased. So in January we had a net 9% support of tariffs that was across the board. Democrat voters, Republican voters, um Harris won states, Trump, it doesn't matter. There was a 9% pro uh support margin for tariffs. By March that had fallen to down 6%. In April, following the all the various announcements around it, it actually came back up a little bit to a net

negative 1.1%. So consumers are still figuring this out. And that group of people in the middle, that 30% of consumers that still don't know where they stand on tariffs, they're waiting to see the impact. They've heard about the impact, but they haven't seen it uh fully quite yet. Now, two other kind of wacky charts. I'll get you through this. Regardless if people support or oppose tariffs, they both believe that it will lead to increased prices. That red line you see on the left, that's the folks that will believe that believe that tariffs will increase pricing in the US. It's gone to now 69%. Uh and again on the right hand side of that whether again people support or oppose the idea of tariffs increasing pricing is increasing with both groups. The key differentiator is the expected impact on wages and jobs.

So on that right side there you can see those wacky lines going everywhere. This is the amount of people who believe that tariffs will lead to a positive impact on wages and jobs, a negative impact on wages and jobs, or those that aren't sure. We're seeing strong bouncing around in this measure. But the differentiator, and you can see it on the right, those people who support tariffs believe it will have a positive impact on wages and jobs. The people who oppose tariffs believe it'll have a negative impact. That's the key differentiator. whether people support or oppose the tariff situation in the US at the moment. All right. So, what does this mean? Well, about 40% of consumers are expecting the higher prices driven by potential tariffs to lead to a reduction in their spending. And where they're looking to cut back, all those areas and they're right there

in the middle are those categories that impact gaming. about 30% of those folks who say they're going to cut back on spending are going to try to cut back in areas of entertainment subscriptions and video games. Now, this isn't everybody, of course, but this is a portion of the market that will or are intending to pull back a little bit driven by these higher prices we may be seeing. All right, so last bit, hopefully you've gotten something out of this at 9, whatever time it is in the morning. Um, but our outlook for the games industry spending in the US this year has also swung pretty wildly. Coming into this year, we had a 4.3% growth forecast. Of course, it helped that GTA 6 was still in the year, and it sure helped that we didn't have the tariff situation and some of these other situations we're seeing right now. As of the moment, though, we're looking at about a down 4.7% uh outlook really impacting all areas of

spend. Mobile's struggling a little bit this year. The console world of course has been struggling going into the launch of the Switch 2. We'll see how uh powerful and sustained that launch is, but generally we have a consumer who's a little bit concerned. They're holding back a little bit uh and they really need to be pushed with the concept of value for their uh gaming dollar. So, what to watch going forward? Number one, people still love video games. I mean, we've seen it the last couple of days. We've seen it in the response to Switch, too. People are still very very excited. Of course, they are. Uh, it's a wonderful category um that continues to to do some amazing things, but they're looking for certain things. Number one, they're looking for value. And I know we've been doing a lot of $80 games and subscriptions and freetoplay and all these other things happening. No matter what, the consumer has to believe they're getting a good value uh for their dollar. Number two, the ease of

accessibility is a huge factor. And really, what I'm talking about here is the Fortnite factor. We have the $80 games, and that will work for some games and some consumers, but for younger consumers in particular, any the biggest competitor at any new game is going to be Fortnite because it's so easy to access. they can play it wherever they are uh whenever they want to. So the more easily accessible games are, the better it's going to be in this particular market environment. Subscription boost may continue. We saw a subscription market boom in the pandemic window and then it flattened was flat for a couple of years. It had a little bit of an uptick when Call of Duty made it to Game Pass, but after that, we saw an uptick again in February and in March and in April. Now, that could be content related, but it also could be consumers saying, "Hey, I want

to have better value for my dollar, so I'm going to, you know, lean into those categories that could deliver that." So, just keep that in mind. Uh, keep an eye on that. I'll I'll keep talking about that in the future. And finally, one of the things that may impact, and it hasn't quite impacted us yet in all categories, although it has in some higher prices and and potential uh supply shortages in the US could certainly exacerbate the challenges we're facing. So big crazy market, but the key takeaways are we are seeing some shifting in dollars away from general merchandise categories to things like food. the consumer is hyperfixated on value and the um consumer response to things like tariffs continues to be in flux. There's the Matt there extended bit from his talk at uh the game business live and he sort of ends on a bit of a positive note. He's talking there about how um games that offer value subscription services, mobile freetoplay might be an opportunity, but I think he

was stretching there to find those positives. Um the um uh it's interesting because I think this is particularly severe for consoles. We had um Sega on the show earlier in the week who talked about the fact that it's tough out there for consoles. Consoles having to raise their prices um as a result of these tariffs, but also just generally that because um generally having to to to do that. Everyone's raising the price of games in order to manage the fact that spending is falling, which in many ways exacerbates the the audience problem. Um it's a short-term solution. Rebecca, it's a really difficult thing because he talks about value and trying to make that value case for the video games industry, but I I think it's just um and I do but it's really struggling to do that. I saw that with the Switch 2 for for instance, you could buy Mario Kart and a Switch 2 in a bundle and if you had Nintendo Switch online and some Zelda games, you know, I I you could get what might look like a good value deal, but that wasn't the message that was getting through to consumers. It was very much this is expensive. The games are expensive. The accessories are expensive. Um, the headlines in the mainstream media was about the price of

this device. It wasn't about, you know, how good Mario Kart was or how great Donkey Kong looks. I guess the question I'm trying to work out, I think the old industry working out is how can we get that value message across to the players cuz people people still buy expensive things. I I went to Lincoln Park gig at the weekend. It cost me like £300. I would never have pegged you as a Lincoln Park fan. That's incredible. Fun fun fact, I turns out Jeff Keelley was also at the same gig and I didn't know. Amazing. Well, I did eventually right now. Um, but um, uh, yes, but people going to gigs on, you know, they're selling out faster than ever, particularly the big gigs. People spending loads of money on merchandise and things. So, people do spend money on these things if they feel like they're getting some value out of it. It's tough, right? Like I I and I think video game companies are still sort of testing the water and figuring that out because I I think about the the Switch 2 uh announcements and and what you're describing with the with the headlines around price and I remember thinking when all that was going on they they had that Nintendo Direct where they sort of showed off everything that they had and

this was before they had I believe it was before they had announced the price and I remember leaving walking away from that direct thinking wow that was incredible. this is this is going to be phenomenal. And then after that there was just this slow roll out of announcements about price and and they were Nintendo was I think in some ways kind of screwed over a little bit by the fact that all that tariff news was hitting at the exact same time. So people had like this constant turnurning worry in the back of their head of oh no everything else is going to get more expensive too but they announced the price of the console and then there was this whole confusion around how much there there was a lot of confusion online about how much Mario Kart was going to cost. Was it going to be $80? Was it going to be $70? Was it going to be different? Was some people were there were headlines going around saying it was going to be $90 at one point and this is only USD, but there was confusion as to what the actual price was going to be, but it seemed higher than everyone was prepared to pay. There wasn't a lot of clarity at immediately as to how much Don Tong Bonanza was going to be and if like all the games were going to be $80. Uh there was all this confusion about the digital cards and and game cards and and all these

things like that. And then we started seeing the accessory costs and then they had to raise the accessory costs. And so it felt like just one hit after another. And in some ways, I think Nintendo lost control of the news cycle there a little bit. And that that's less a we priced this wrong issue and more a we did not message this correctly and also got hit by this other factor that we were not expecting. Nintendo are terrified of sharing prices. Okay. And it's driven by an EU ruling when they were accused of price fixing. Ever since then, they've been like retailers set the price, we don't set the price. It's been their their mantra. And as a result of that, um, they don't announce the price for their things. In this case, it's it caused a vacuum of of of people trying to work out, you know, the $90 thing came from the fact that the physical version of Mario Kart was more expensive in the UK than the digital version. They knew what the digital version cost in the US. So they the conclusion was therefore the physical version was probably going to cost this. It wasn't the case at all in the end. But then you might have this number off hand. I don't I don't have off the top of my head. Was it like 80% of people

who bought a Switch bought the Mario Kart bundle? Yeah. And if you did that, the Mario Kart the game was technically only $50 like compared to the the full price. Yeah. It was £30 in the UK. People felt like they were getting a good value. Yeah. It's it's because there was also those headlines and to be fair certain corners of the media very much jumped on it like um there was that articles that I read about the Zelda um Breath of the Wild and Tears of the Kingdom would cost you Breath of the Wild I think was going to cost you $90 on Switch 2. That's if you didn't have Breath of the Wild. That's if you bought the DLC. And that's if you didn't have Nintendo Switch online. Um, that's that it would cost you $90. You wouldn't know anybody in the room who happened to write one of those articles, would you? Yeah. Yeah. Was that you? I I think I may have contributed to that discourse in some fashion. Obviously, technically that's true, but actually for most people who were bought who would have bought Switch at launch would have been Nintendo fans that already had Breath of the Wild and probably were subscribers to Nintendo Switch online as well. So actually the way I looked at it as a consumer rather than as a business journalist is I bought my Switch 2 in the UK it was £450. I got the console. I

got Mario Kart World bundled with it and both of my Zelda games that I love so much were update graded for not actually free. So I was had to subscribe to the Nintendo Switch online but free at the point of the purchase effectively. And I actually thought that's not I mean don't get me wrong it's still a lot of money if you're if you're worrying about um food bills but it it's like that wasn't too terrible a deal but that alternative messaging wasn't wasn't getting out there either. Well I think I'll say in in our defense at least that we wrote about it because consumers were talking about it. We you know we're consumerf facing website and so what we're doing is we're going to the community after a big news story like this and seeing okay well what are people talking about? What are they interested in? And overwhelmingly it was, wow, this is taken taken it's always taken an aggregate. This is so expensive. And I think I think that's why Nintendo has been sort of on the receiving end of a lot of this criticism specifically is because they're the ones I mean they they took the first hit, right? Like they're the ones who released a new console in the middle of this economic environment right as all these tariffs were happening. Yeah. Yeah. And they're releasing a bunch of things at once and

you forget how expensive it is like this the the startup cost effectively of a new console. Like I'm not buying a new Switch Pro controller every month on a regular basis, but when you when you first buy a new console, you're probably getting an extra controller for it or two. You're probably getting a game or two, and that gets really expensive. And when everything else is just beating down on you, I don't know. People really feel it. So, I'm I'm hoping I That was That was a really great presentation from Matt. I want to go watch the whole thing now. No, no one else is doing a big console launch for the immediate foreseeable future. So, I'm I'm hoping that no no one there's not quite as much fear around video game spending as it feels like there might be right now. Yeah. And also, it's worth noting Nintendo is the biggest um as well, but it's it's very much, you know, affects a lot more people. The concern is that prices don't seem to be going down even as the generations go on. Um when have they ever Yeah, a lot of the concerns going forward is around tariffs, um with potential for more tariffs to come. I actually caught up with the ESA president and CEO Stanley Pier Louise

just be just last week and we talked about many things wasn't just about tariffs but I did get a comment from him about tariffs because the ultimate the ESA is on the front line of this with government to try and um curb uh tariffs around video game hardware. This is a shorter clip that here is here's Stanley talking about what they're doing around tariffs. The most important thing for us is making sure that we are able to get games and gameplay devices uh to the public and do it at a reasonable cost. And obviously tariffs can have a very difficult impact depending on where they land, you know. So as an industry what we've done is spoken to the administration to explain the value propositions that games bring. Of course, we agree with a goal of promoting and expanding American industries. And in many ways, the US is a top exporter of games, if not the top exporter of games to the rest of the world. But we also have to make sure to

maintain that lead. You've got to be able to develop those games. That means allowing uh game companies to create fantastic games with the best talent that they can here in the US, but also getting devices into the hands of consumers in an affordable way. And we've raised those concerns with the administration and we continue to work with them on understanding why what we bring to bear is critically important. You know, if you think about the 59 billion or so dollars that the video game industry generated this past year, just under five billion of it is based on the consoles and the overwhelming rest of it is on game content. And so in many ways, consoles are the gateway to unlocking this enormous value proposition for consumers and also for the American economy. And we've tried to make that case to establish the fact that, you know, games are made everywhere and you want to be able to play them on consoles that people can afford here in the US. So that's been an important conversation point uh for us with the administration. Yes, the tariff

situation is going to come around again imminently and I guess all the games industry can do is just focus on the value argument. The US administration right now is unpredictable. I know there's a lot of concerns around what might happen if they perhaps spend a bit more too much extra attention on the video games industry. We'll have to hope that uh there's not going to be too much more impact upon from Tariffs on the video game side of things and that the ESA message gets through. Yeah, he does bring up I I think a a good point as well talking about companies needing to be able to make games in the United States. This is very anecdotal. I'm I'm sure somebody has done some sort of data-driven study on this, but I I have been hearing increasing I mean we we always hear about, you know, companies opening new studios or whatever. In my conversations with people in in the industry, I'm hearing increasingly when people are opening new studios or new branches of whatever it is they're doing, they're not doing it in the US. And I I'm hearing a lot about places that are prioritizing closing things in the United States or moving various different points of their operations overseas just because it's so much more expensive to do things in the United

States. The startup cost is more expensive. Uh it's more expensive to to move people out to where because we're so geographically large. There's, you know, a handful if you want to have people in an office. There's really only a handful of cities that you probably want to do that in and it's expensive to move people out there. Cost of living is ridiculously high. Real estate is really high. at everything is just expensive and it's just easier to not do it here. And if if we are growing tariffs on top of that, you know, whatever those tariffs happen to be on is probably going to affect being able to run a business even if it's making video games in some fashion. The US is one of the biggest exporters of video game software in the world and it's already under pressure because of those business costs he mentioned. And then the impact, you know, this will impact globally, but the impact of a smaller US games industry has an impact upon their software industry in exchange for I guess getting hardware in your manufacturing. I guess that that's the message the ESA is trying to get across. Well, you know, I'm going to I'm going to leave the conversation the quite miserable conversation around consumers and tariffs and the state of the business at the moment. Ultimately, you know, games

are still selling very well. We we've seen a lot of big sales numbers in June. We talked about that last week. There are still big video games out there. It's a lot of competition, but people are still buying games. hobby people like video games can be good value entertainment um as well. I think there is better value out there now that we free to it's simultaneously one of the most expensive hobbies to have but also if you're savvy one of the cheapest hobbies you can have there are so many games that you can pick up and play with the stuff that you have currently for free. Uh it may not necessarily be the exact games your friends are playing or the hottest game of the moment but there are games there for you. Yes. And let's talk about um one of the other stories of the week. This is about 11 bit studios. They have admitted to using AI generated text accidentally in an area of its game, the Altars. I say accidentally. Uh the AI text was meant to be work in progress material that made its way into the final product. It also use AI to handle some lastminute translations for in-game licensed movies. It stirred quite the reaction online. Um people are very much on the lookout for anything that might appear to AI at the moment. Uh which I guess might be a good thing. Might be. Yeah, I think so. Yeah, I was very interested in

the reaction to this. Personally, I'm probably about as anti-generative AI as they as they come. But I I was surprised by the reaction to this because they, you know, their their explanation of this uh was that they had they had it there was one one section of text that they had used they were using uh generative AI as a placeholder during development and they had just happened to miss going back through and removing this and putting in actual real text later on. And that that was that explanation. And then the translation thing, they said that there was some very very last minute stuff that they needed translated very quickly and they uh did it through generative AI and they were planning on on hiring somebody. That one I understand why people are quite up in arms about that. the the the bit about the placeholder thing though. I'm I'm surprised that people are angry about that and I because the the argument though is that why are you like it had to be put through a prompter to try to get something that looked very similar to an actual asset when in reality people use all sorts of things for placeholders in game development.

Uh, you know, you can just put we're in journalism, we use TKTK like like there are so many other other avenues. I guess I I didn't expect the general community at large to sort of share my uh I eyebrow raise at that. I used to work in games testing and one of the bugs you could and particularly I work for a localization company and so one of the bugs that was a very popular bug to the point it was in the top down menu. You didn't have to type it in. It was one you could select was placeholder text, which meant that uh you've not put the text in here, but you put in you put in the Mory whatever uh D uh text in or you've put in just X's or whatever. You put in a load of symbols. This is placeholder text. Yeah, this is placeholder text. Big capital letters. Often that's done because they plan to put it in later or they've got a deadline to hit and they've gone, well, I just need to put put some text in so I can get this over to testers or do get this over to whoever they need to get it over to. Right. I get it. And I used to work in magazines and it was quite common that oh I can't come up a headline right now. I need to get it over to the designer to get it designed.

So you know and you would do that. And I there's a story this there's a James Bachelor story. Rebecca you might like this. Um um many many years ago um uh James um wrote a headline in um in a in a in a box out um called uh it was a it was a box out in a magazine around the marketing for a video game. Instead of James putting in X's or whatever it is to make it obvious that this was um placeholder text, he put the words in marketing bollocks. That's what he put in. Um and um and he cuz he knew he oh it's the marketing. He was he was being flippant but because he put in actual text and we were very rushed on deadline. I didn't see it. He forgot he put it in and it was the thankfully the designer caught it. But there's been cases where the designer hasn't. This is such a believable story. Oh my gosh. And if you put in placeholder text that is actual text, there is a chance you will miss it because the testers won't know that it's not supposed to be that it's not supposed to be like that necessarily, right? Depending on who

you're talking to. So that's what I mean. Like if you're going to put placeholder images or placeholder text into things, make it an obviously placeholder text and placeholder image like cuz a you're more likely to spot it. Your testers are more likely to catch it and and also okay it's a bit embarrassing when consumers go um like that but you're not going to get a backlash in the sense of it's just a bit humiliating either patching really critically if you're doing something like that. But if you're putting in placeholder, the idea is you don't have time to write anything for real. And so you're you're just sort of slapping something in and and sending it off so you can get back to it later. The the the reason why people found out this was generative AI is because the text starts with I I don't have it in front of me, but it's something like, okay, here's a version of what you just asked for that has this, this, and this. So it was somebody putting prompts into a prompter and then revising them and like like actually spending time on it. probably I mean certainly not as much time as it would have taken to actually write something organic but but spending time on it which is not the point of

placeholder text and that I I guess I was just I I was again I you know where my sentiments lie on this but like I was I was somewhat pleasantly surprised that people were like really picking up on this and digging into it because I I I don't know I'm maybe I'm turning cynical or something but I just sort of I don't know I'm sort of afraid that generative AI is going to consume us all and and and I yeah there is there is I accused. I got accused of a tweet that I wrote was being generative AI. Sometimes it does go the other way when everyone's anything that could be generative. There's a big story at the moment around a band that's been accused of being an AI band because none of the members exist apparently. And now they've set up a Twitter account to argue they're not AI, that they're real. Oh my gosh. And it's like and it's it is I think oh I don't want to I don't want to type to look it up because I don't want you have to listen to my mechanical keyboard on a podcast but there was a I can't remember uh where it was but there was a really good article like a week or two ago that was interviewing uh developers who had been accused of using generative AI in their games who didn't uh because everybody thinks that they're very savvy

at catching this guy especially with images people think that they're very savvy at catch catching generative AI because there's a certain like sort of shiny quality that the Gen AI tends to spit out a lot. And so if you have this very specific art style in in your game, uh people might think it's gener like like multiple like sort of in progress like here is how we made this step by step. It's not generative AI. Uh and I think I think people mostly backed off those accusations, but it could be really damaging. Yeah. individually. There's an artist I saw on Twitter, was it might have been Blue Sky um one of the social media platforms um where um probably was Blue Sky um where somebody had called out an artist AI imagery and actually was like trying to work out how they could sue them and everything and because the hands that they drawn looked a bit off and um and it was like a sevenline tweet and there was a lot of people getting angry and saying you've been hurt, you've been harmed and then the artist had to reply and actually

show the actual video making the art to prove they made the art. We at that stage we have to film ourselves to prove that we wrote it. Um, and it's and it but but I guess that that's the downside of this scrutiny from consumers that are looking for this um looking for this um stuff and but you know I think it's because we can't like I mean we clearly can't because there's disclaimers on Steam but uh 11 bit didn't do didn't use those and so it there's we can't trust right like there's no trust that people aren't just going to use generative AI and then lie to us about it. That article by the way is in the Guardian and it's by Nicole Carpenter. I wanted to attribute that. Yes. Yes. Yeah. And you're right. It's about trust, but then also studios need to trust their own teams and you know, they've got to catch it as well, right? It's it's individual behaviors that can that can lead to this situation. But it's an ongoing um conversation. Finally, our last session, as I say, there is another big news story that you will have all heard of by now um that uh I didn't know the full

details of in recording this podcast, which so that's why this our last session isn't about that. Um we're it's it's what do the numbers mean as we used to call it on the GI microcast. This week we're diving into the new PlayStation relief, Death Stranding 2. Now Hide Khajima said he changed things in Death Stranding 2 to ensure it was less mainstream. And the initial results that I reported on um suggested that he it worked. Well done. It's not mainstream. Um in terms of physical sales across Europe, Death Stranding 2 sold about 2/3 less at launch than Death Stranding one. Um now Death Stranding one was a pre- pandemic release. So this is a far more physical friendly time. Death Stranding 2 also had an early access promotion on digital so you could get the game a couple of days early. Um so as a result we would have got a lot lot more sales of digital because of this I didn't want to talk about it in a way it's like I don't want to sit there and say the game did well did badly without digital without digital data. So I asked Ampair. Now Ampair tracks player numbers and that kind of stuff. Early player numbers only tell it's very early days for that game really. But I wanted

Ampair to Aair might give me a little bit of an indicator. And their estimate is that the game has sold 1.4 million units in June. Um it's an estimate stress that it's not actual data from GSD or or Sakan or anyone like that but I think that's all right. Right. Um and but I I but there were other analysts I've spoken to since receiving that data who don't um it's it's a very niche game at Death Stranding. The first one was polarizing. So even though the game did like 5 million units I think in two years I don't think all those 5 million people liked it. It was weird right like people didn't know what to make of it and also I think I think the first Death Stranding had been promoted like you said it had been promoted much more heavily. It was like Kojima's debut game after escaping Konami effectively. And it people wanted to see what what the deal is, what what it's all about. And yeah, I I think you're right. I think not everybody enjoyed it. And this look, if if Death Stranding 2 had just been advert, it was Death Stranding one and

we saw the exact same advertisements in in a vacuum, not knowing what Death Stranding was, I think maybe it would have captured roughly as much interest just because it's weird and and standout. But I think knowing what Death Stranding is, you kind of already know where you sit on it. Yeah. And this one, this one's reviewed a lot better. I think it's been it's more palatable to people. Um and and I think that means it has a good ch good shot of reaching audiences. This is a different games market now where you know the game does come out, it doesn't do great. But I don't think what in today's we saw Concord did like 25,000 units at the bottom. Um um and um and you know we celebrated June Awakening last week doing a million units and this is done more than so it's a PlayStation 5 only game. It'll come out on on on the c the sort of world tour they're going on at the moment still going on. It was in London this week. Um so I don't think that's a terrible figure if it's right. Um I I think that that's it's okay. It's obviously not Ghost of Yoai God of War and Spider-Man level PlayStation

performance but I don't think anyone was expecting it. I actually saw quite a lot of Death Stranding 2 ads. I think it was because of that quite striking imagery of um of Norma Med and the baby. I think it's quite a um um striking advert. Um but it is it is obviously, you know, he's he's our David Lynch, I guess. Kajjima, right? As I suppose he is. Yeah, David Lynch isn't very successful either. But he was very well but he was in terms of, you know, Yeah. acclaim and and and fans base. Well, I I do wonder. You say that nobody nobody's expecting it to do wild numbers. I I I don't know. Well, I wasn't expecting it to do well. No, but you point to several releases over the last couple years that have done pretty pretty well. Uh but didn't did not meet expectations in big scare quotes as to whoever was was expecting their numbers. And and that's the thing, right? I feel like there's there's certain certain companies and and certain folks that sort of control whether studios get to make more games or not that uh have very very high expectations for things. And Kajjima

being the David Lynch or whoever of video games, no one's going to shut him and his studio down at this stage in his career. So, I'm not really worried that we're never going to get another game like that. But I I do wonder like what do those numbers mean for like Sony and PlayStation and what what do they think when they look at it? That's a good question, right? Because I it's possible that 1.4 mill however many millions it does in the end doesn't actually make back the investment that PlayStation has put in the studio. Possibly, right? But platform holders have a different metric on these things. you you it's the same reason why Nintendo invested in Bayonetta, right? People who love Kajjima and there are massive, you know, Metal Gus, there are dedicated devoted fans. It's a they they will buy a platform to play a Kajjima game, right? So, they've got Death Stranding. You've got Death Stranding one and two exclusive on your console. You're going to get those fans on your console and they're going to play your console and they might subscribe to your subscription service or they might buy a different game and they might, you know, it brings them into an ecosystem. So the actual value of a game like Death Stranding, which is a very um people, you know, it has a very high spending

audience potentially um is higher than the sheer just pure numbers of how many games it sold. It's same with games like Bayonet. Bayonetta didn't make sense commercially to Sega, but it did to Nintendo is because Bayonetta fans bought Nintendo platforms and then maybe bought Zelda 2 and and and Nintendo Switch Online and and so there is a there is a um there is a different um equation being played there that when they make a game like that, but that's why you get platform holders. Why I'm slightly concerned about Xbox's future direction, right? Xbox currently make a load of games like Clockwork Revolution and and Hellblade even and South of Midnight, which what happened to High Rush? Well, High Five Rush is a great example actually because it's it's a um it's a game that actually that should be bringing, you know, that will bring in a potentially need maybe didn't do well enough for Well, I don't know what the metrics were. I I think that was a shame. I think that game should have should have continued. I think that needed a second game. But investing in those smaller IPs and I use the word smaller IPs in the sense that compared to Call of Duty and Minecraft then

everything's smaller but but investing in those sort of double A um smaller brands um on a platform platform holders will do that um but a publisher doesn't necessarily cuz they need to see bigger returns and margins. They've also got you know 30% store fees to pay for and all that kind of thing. So, um um yeah. So, it it's it's I I I'm not concerned about Kajjima either. Um because, you know, he's always going to have a poll with a large I think if you've got a million people who will come out to buy your game in a week, then you're probably fine. Well, you would think I my my argument is not that Kjima is ever going to be in any trouble again uh regarding being able to make more games. it it's more that he he takes up a certain position in the industry where he does have that luxury to just sort of do kind of whatever he wants and get that support. But I there are plenty of other games that would see pull similar numbers and not see a next game just because of

whatever factor whatever expectations someone had for them not being met. It's a weird weird weird space right now. Yeah, it certainly is. And um and yeah um but uh and it may still do better yet. It has reviewed very well. Oh, it will. It will. Um, uh, and obviously it will come out on PC. Um, yes. But that's sort of We're out of time, Rebecca. Um, that's it for today's episode of the Game Business Show. Um, Rebecca, thank you for joining us. It was lovely to have you on. Love to have you back if you can if you if you're allowed to return to to talk. Not a problem. Love to do it. Next week on the show, we speak to Franko of Zinga as part of our feature show. That's the one that comes out on Tuesday. And we'll be recording our news analysis show at Develop Brighton next week featuring a chap called James Bachelor. You may have heard of him. Um um so please join us back for that. Until then, thank you for tuning in.