Why EVE Online’s studio bought itself back for $120m - and partnered with Google DeepMind

by open-sourcing our uh kind of carbon engine and all the tech platform, we are in a way inviting people to just impact the universe uh in a greater way. Now, you can literally reprogram the universe uh by contributing to that.
Hello everyone and welcome back to In the Hot Seat. Now, my next guest has spent 26 years in the same seat running the same universe through an acquisition, a buyback, a rebrand, and now a bet on AI research and blockchain infrastructure. Hilmar, welcome to In the Hot Seat. So good to have you today.
Yeah, very happy to be here.
We have much to talk about, but before we kick off our conversation, Hilmar, do you mind for those who don't know in our audience giving a little bit of an introduction as to who you are and what your role actually looks like at EVE?
So, um yeah, my name is Hilmar Hilmar Veigar Pétursson. I'm Icelandic. Um obviously lived most of my life in Iceland, actually. For the past 10

years, I've lived in London. So, um uh moved to London to set up our office over there. Um I mean uh I mean, I've had many seats at CCP CCP Games and there is Um we were even called Crowd Key at some point. So, um Mm. I mean, right now, when it comes to EVE Online, I am probably in some uh the elders of the village um council uh relating to that. Obviously, uh the majority of my work at CCP then Fenders was involved in EVE Online in the early part. I spent quite a bit of time uh typing in a lot of code as we did back in the day uh before EVE got released, and then a lot of time figuring out what EVE Online really really is Um after it came out and I still

figuring that out. I think we're all kind of figuring it that out. It's a it's a marvel that keeps on surprising. Right now we are I'm maybe more involved in the overall portfolio. Uh we're making a sequel to Vanguard and a and a new sort of space survival bordering on horror game called Frontier. And then most recently uh we're in uh a lot of AI exploration with Google DeepMind.
Really cool. So you mentioned you've been CEO of CCP now for Nifty Creations since 2004, CTO before that.
Mhm.
That's over 26 years in an industry where most studios don't even survive a decade. And when I look at that number, I immediately think about where you guys are based. Now that's Iceland as you mentioned, but what's changed the most in Iceland's ability to support a community like yours? Is it the local talent pipeline? Is it the funding environment? Or is it something else entirely?
So I think what has probably helped us

uh have this kind of tenure in gaming. Even if we have ways to go, I mean Nintendo is over 200 years old. So I mean there are examples of uh of companies having staying power. So when we begin uh nobody had made the game in Iceland and most of the the people that made Eve Online had never made the game. Well, I think all of them all of us had never made the game. We had made adjacent things. A lot of us came from another company called Oz Interactive where we were making literally the metaverse using VRML. So uh when it came to like 3D on the internet and and simulations and those kind of things we had experience. But uh but maybe we didn't have a lot of like sort of management kind of senior management experience. Now, that vendors has been here uh next year um we will celebrate the 30th

30-year birthday of what is now called vendors. We have over that period uh nurtured quite a bit of talent that either moved to Iceland has stayed here, Icelandic people that have grown up through the company, Icelandic people that have maybe gone on their first step at vendors, moved somewhere else, come back, not come back. So, um I think if you look at footprint in those 30 years going from zero to I think we can count 1,000 people uh that um are Icelandic and working in games all across the world. Um I I think that has probably helped us the most and in some way, I mean, we have obviously contributed to that both literally because people have worked here and also kind of like uh just as a precedent of just like oh, if these kids can do it, I can probably do it. It's a It's a very Icelandic attitude.
Yeah, I love it. So, I've caught you at

the best time, Hilmar, because so much has happened since Jan of this year. Uh you've just bought your own company back from Paradox for $120 million if I'm not wrong. Less than half of what they paid in 2018. Now, this is pretty unusual. Deals with founders buying their company back below acquisition price aren't commonplace. What do you think and what's your advice to all the studio founders sort of stuck inside the larger parent companies? What advice should they take from how this one played out?
Well, I actually think like this year, this is quite a bit of a trend. Um I mean, either because um larger companies are winding down and spinning out companies or we're seeing situations where um like ours. So, I I think we are in a uh tumultuous situation in our industry and there is all sorts of reconfiguration um that that is going on. And

the industry had been consolidating for quite a while. Like there was a lot of kind of consolidation going on sort of leading into a post-pandemic. I think we're in some de-consolidation phase right now. Um and I think it is an industry thus reconfiguring for something new. Um I think we're all still figuring out what the new thing is and and thus um it is um it is a dis- little bit if you look at the industry in a in a larger sense, I mean it feels very discombobulated of just um it um it it is not a very organized disassembly. Um but but it is happening and I think this rapid unplanned disassembly of the gaming industry is uh is an expression of something um that we will better understand in hindsight.

But I think as we were talking with uh with Pearl Abyss about doing this, I I think we both agreed uh we are probably better off going our own way and separate ways because we're interested in different things and I mean we had great plans of doing things together, but they became extremely busy with their amazing games, Crimson Desert in particular, of which I've played over 200 hours. So, I mean I am I am all for them focusing on that. Um and we have our own um crazy portfolio and and kind of tech-forward attitude um to contend with. And um, and I think in this, um, reconfiguration of the industry, we will just see more of this and and I think we're frankly seeing a lot of it.
Mhm, definitely. Now, going back to Íslandshótel, you sat on the board of Icelandic game industry association, and now you actually advise the government for science and innovation council.

What's the one policy lever the Icelandic state pulled that actually mattered for a game studio like yours?
So, it's a actually we take part in, um, founding the, or I mean, take part, we we frankly created the gaming association here in Iceland, IGI. And that was following the economic collapse of Iceland. And which was obviously spurred on by the 2008 2007 and 8 bubble, and the end of 8, the collapse happened all around the world. Iceland, um, set a world record in collapsing. Um, and so in 2009, we founded this as there there was another dispopulation of of
That seems to be the trend here, yeah.
Yes, I mean, this is this is just how life is. It, um,
Yeah.
it it it rarely goes the way you think. Anyway, so, we found that there was a lot of talent becoming loose in Iceland because we had a built up a massive banking sector that kind of rapidly

shrunk. So, there was a a lot of talent available. I think what Iceland has actually done the most to help innovation and and all those kind of things is the is the extremely, um, decisive rebound that Iceland did coming from that. I think in the in the world of running kind of startup and innovation companies, uh, how quickly Iceland rebounded is is rather impressive. I mean, obviously Iceland is small and you could argue it's a bit of a startup of a country. I mean, we fairly recently got the the the rights to be independent, Um Uh when we kind of said goodbye to Denmark while they were occupied by Germany uh during the Second World War. And uh and the fact that Iceland took on this massive challenge of rebounding post uh banking collapse here in the country. It's a is an extremely inspiring story about uh

resilience and rebounding, reconfiguring, figuring out things when the things rapidly changed. And now we see it here in Iceland where we are enjoying prosperity in all measurable ways. I think actually right now we rank number one on some index by the UN about like the most prosperity is not just GDP. It's a some broad spectrum.
Yeah.
Yes. So uh I I think that frankly has been the the the biggest help. Just the inspiration of uh never giving up.
Right, I love that. Now, let's talk about the rebrand of CCP. Now, as I was doing a little bit of research for our chat today, Hilmar, it was partly because the CCP name was causing some real friction. I mean, people were getting you confused with the Chinese Communist Party if I'm not wrong, right? At airports and borders and whatnot. Um how much of running a modern studio, in your opinion, Hilmar, is actually about managing brand risk and has nothing to do with your product? How much of your day actually is dedicated to that to that or your week or your year, whatever it might be?

I mean, generally we've always taken the approach of pushing our games rather than our company brand.
Mhm.
So uh I mean, we we spent a lot more time thinking about the EVE Online brand, Vanguard, Frontier, etc. But uh over the the past I think decade, maybe maybe over the past 5 years even, the um the referring to the um government of China as the English acronym CCP um which is very interestingly not what they refer to themselves when they think of themselves and when Chinese people think of their um uh their political party, they think of it as first and foremost a Chinese name. But at some point this uh this way of calling them CCP became a very dominant thing and you can if you look at Google Trends you you you can see the rise of that becoming the signifier which they refer

to and um and um and often in um in uh when running companies you quoting Steve Jobs, you skate where the puck is going and if I just draw out the line of the of the brand relevance of CCP uh referring to the Chinese Communist Party and the CCP referring to Crowd Control Productions especially when you add AI on top of it then um uh when we did uh the buyback uh I thought either we do this now or we never do it um and uh and we better just rip off the band-aid the band-aid uh interestingly the company actually uh tested being called Fenris way early on. Our first product which actually is a family board game has a Fenris logo on it.
Mhm.
Um company at the time was called Loki Multimedia. So uh the company actually has had many names and Fenris was one of them.

And then uh we thought about it a bit deeper and and we saw how the how the kind of uh the idea of Fenris uh which is the wolf that eats the sun to bring about Ragnarok um deeply connects to the sort of core essentials of human life and how we think about games. There's a lot to do with the cycle of creation and destruction and how that sustains economies and effort etc. So, calling the company Fender's Creations, I have hypothesized this like a second law of law of thermodynamics relating to entropy. And really, that was what the Vikings were talking about thousands a thousand years ago when they came up with this. They were really talking about this renewal because after Ragnarok, according to the Eddas, then a much better world is born. Actually, a much greener world. So, it's again the cycle of cycle of creation.
Yeah,
[clears throat]
that's really cool. What a law. I did

not know that. Um so, let's talk a little bit about how the how you guys open-source Carbon and Trinity. This is so interesting. So, the engine and renderer that EVE has run on since 1999, if I'm not wrong. Why did you guys choose to give away an engine you developed over a course of 26 years instead of licensing it? I mean, you guys could have essentially, as a lot of big companies do, charge people to use Carbon. Why open-source it?
So, um I think there are a few factors. Uh one is we think of EVE forever. So, uh we are now um well into the third decade of EVE Online, and in a few years, we'll be making plans for the fourth decade of EVE Online. And when it comes to if you think about it of as forever software, I think that has been royally demonstrated that open-source is the way to go. Most proprietary software ends up sort of withering away inside companies eventually. Whereas, we've seen extreme open-source

successes where they where the where the reverse is true. Many of the major tech companies in the in the world more and more open-source their software. Um I mean, Google has done a lot of it. Microsoft contributes massively. Apple, like Meta, take your pick, Nvidia. This this is definitely uh a phenomenon many people have caught on to. If you want to build something that lasts forever, open source is really good way to do it. Obviously not the only way. So that's one component. Then uh EVE Online attracts a fairly sort of technical engineering savvy audience. Uh we see this in a vast amount of ecosystem built by third-party developers using our application sort of API called the ESI. Um and uh uh and a lot of playing EVE Online often involves using the software created by

somebody else. So we see this as a way of like increasing the size of the sandbox. Like we we think of ourselves as uh building sandbox games. And what part of the box is malleable? What can you change? What is rigid? And by open sourcing our uh kind of carbon engine and all the tech platform, we are in a way inviting people to just impact the universe uh in a greater way. Now you can literally reprogram the universe uh by contributing to that. And we have actually seen some amazing contributions so far. So it's definitely we are we are living the the benefits of of having done this.
It's such an interesting thing that and my questions to come will be more based on this, but there's a real trust for your players and vice versa. It's fantastic to see because when you open sourcing these things, like you said, you're actually inviting people to study, challenge, contribute to that to that sort of world to build upon. So it's fantastic to see. Um

Now, let's talk about the other thing that happened this year, which is that Google took a minority stake in Fenris and DeepMind is now using an offline version of EVE to study long horizon planning and memory in AI. What do you think [clears throat] that EVE EVE has that makes it a better research substrate than a purpose-built simulation. What do you think? I mean, it's sufficiently complicated to to train on essentially, but what are your thoughts on that, Hilmar?
People have built sort of all sorts of artificial environments um to train agents. And I mean, DeepMind in particular has actually used quite a bit of existing games. They did um a lot of Atari games in the beginning. Then of course, famously did AlphaGo and AlphaZero. Working on AlphaStar using StarCraft. And me and Dami's actually were talking early 2017, uh which is pretty crazy when you think about it in hindsight of making something like Alpha EVE as a as a kind of a moniker of like

uh obviously EVE is in many ways not like the other games we list uh listed out. But the crazy part is really having thought about it in '17. It was kind of like far away from being a um um a doable thing. But but right now as the agents and LLMs harnesses, all these things have grown in capability, made greater and greater challenges. And uh and while uh I mean, obviously now we're working on a private playground which is hard hard enough for AI to master. Um and we have no like direct plans to bring it over to EVE Online. But um I mean, I'm sure as we just frankly gain more understanding of EVE Online through the private playground, and also we're working um quite a bit on this sort of similarly on EVE Frontier, um then we will discover ways that this

can absolutely perhaps improve the experience even if it's not the focus right now. Now we're just having the agents being able to play the arguably most complicated game in the world. But why I think people gravitate towards proven environments because it is very hard to make an experience that is an MMO. I think we we can count uh successful MMOs with any longevity I mean um on the on the on the fingers of our hands. I doubt they're really more than than 10 MMOs. If you were to make up a club and put even it I I mean, we're obviously not alone, but uh but it's not a big list. So, so it is quite a feat to to make something that keeps humans engaged. And I think that is a very non-trivial thing. I'm not really sure after my almost 30 years of building virtual worlds, I could give somebody a recipe on how to make it. The the uh it's a

mixture of serendipity and and uh timing and and organic growth and emergence and all that. And I think these uh these environments are fascinating, but they're quite rare. Um but I think they are quite powerful to uh to take something that you could argue is probably extremely human because people have been living in EVE Online for well over two decades and frankly thriving in there. Um we have a lot of data about like the number of new friendships created, skills, and confidence that people have gained from playing EVE Online that they're better their life as a consequence, etc. We've done big research into it. You can actually go to Google Scholar, and if you search EVE Online, I think the results are like 5,200 like scientific papers that have been written about like studies on EVE Online.
Mhm.
And I and I and I think this is quite rare and uh and uh and thus like creating something

you will you will have an artificial construct that might be an eval for some aspects of of AI, but but to um well, next to just letting them run run loose in reality which to some extent is is unfortunately happening, then constraining them within um artificial environments which are provably human environments, I think it's a it's a it's a good step along that way.
You mentioned that you mentioned many MMOs, but you guys are extremely unique in the fact that there's you guys economically grounded human behavior which involves like deception, politics, coalition building. So, I can see from Google's perspective, these things are extremely hard to sort of simulate synthetically. Um it's a really unique perspective and uh place to be in. Um so, let's talk about blockchain. So, EVE Frontier is going deeper into blockchain with Sui as a chosen chain right at the moment where a lot of the

industry has cooled on Web3 gaming. What do you know about your players that makes you confident that this bet is different? I mean, correct me if I'm wrong, but you guys migrated from Ethereum-based testnet to Sui network. Um what what are your thoughts on that?
So, I I I think there is a few things uh that uh put us along this path of exploring uh blockchain as a solution to a few things that uh that we didn't really deeply think about when we made the um number one is the fact that real money trading um involves all MMOs, whether you like it or not. Like, when we release EVE Online, same day, people are offering ISK for sale on eBay and spaceships, etc. So, the sort of the second-hand market for currency and items in MMO is an extremely vibrant one. I mean, it's maybe not exactly the same as the second-hand market for games when they

it to be in boxes, but I mean the the it's it's not like miles apart. Um and obviously we didn't build EVE Online with that in mind and we chase it down and and we ban it and we regulate that whole activity and we will never change that. That's kind of the premise of EVE Online. Uh when I think about it deeply and referring our earlier conversation about Iceland, is that Iceland for um 100 years now has run its own currency system. Um and actually the Icelandic krona has the currency symbol ISK, the same as the ISK in EVE Online. It's the same currency symbol. It was like a little sort of juvenile joke on our behalf of like we we call it Interstellar Credits with a K as in the Icelandic krona. Uh anyway, um uh about like 20 years ago Iceland starts to um remove currency controls, currency and capital controls of the Icelandic economy and the

Icelandic currency system. And um so when I am growing up, if my parents were going to Denmark on vacation with us as kids, they had to go to to a bank, show their plane tickets, then they got a permission to buy a certain amount of Danish krones for the Icelandic krones. Then we went to Denmark and we could spend the Danish krones and then we came back, we had to return the Danish krones to the bank. The leftover currency was actually illegal to hoard it, uh return it and get that. So, this is about that grow up in strict capital and currency controls. Then Iceland starts to open up its economy such that you don't have to do that. You can just use your credit card in Denmark if you want to um and the banks figure it out um and uh and this was a big boon for Iceland. Obviously it was such a big boon that in the economic class, the Icelandic economy had extremely rapidly inflated.

That kind of was a major chiropractic of the economy of of of doing that. But again, Iceland responded quickly. And I think a lot of that has to do with openness, being being an open economy, being able to freely trade with others, etc. And of course, running one of the smallest currency systems in the world is challenge. But still, it was a major boom. So, I've always thought, okay, is there a way to create a virtual world economy that operates like that? Um And what's a good way to do that? I mean, blockchains are an interesting technology, but actually more importantly, a legal premise. Because the the the legal definition of what is digital property has been written into the law of most countries. Uh in Europe, we have Mika. In America, we have Genies Act. And now,

probably what is called the market structure bill. Um and these are all ways to to legally uh define what digital property means in the context of countries. This creates a premise where you can create an open economy as a virtual world. Um and I was very excited about like deeply exploring exploding that. I think many people had the intuition. And as you said, most people have tried and failed so far. It's very hard to build an open economy, as Iceland found out the hard way. Rapidly ascended, collapsed, and then kind of figured it out. It's not an easy thing to do. I don't think it's an easy thing to do for us, either, at all. We've run EVE Online as a closed economy, and will continue to do so for decades to come. Um but uh we are excited about the challenge. Then there are many other things why we we chose to do this. Um

botting is a part of it. Uh the fact that uh you can add smart contracts and we really have created like a modding platform. So there's a litany of other things, but I think the primary driver was this. Can you create a virtual world as an open economy? And and and and what's a good construct to do so?
Mhm. How much of that out of curiosity am I seeing as objects and tricks sort of architecture? Um is that Did you guys choose to go down that path because it matches Eve's sort of item ship ownership model? This was news to me. When I found that out, I thought that was so interesting and it made total sense as to why you'd switch over to that.
Yeah, it it was interesting as we uh under the uh as we're doing kind of due diligence, once we it was shocking the analog is of how Sui is architected and how Eve is architected. Obviously, Sui benefits a lot from computer science in the interim and uh has a lot of smart people and uh uh and they definitely thought they were going to scale differently, etc. etc.

But uh it was often uh uh reassuring to see both that we weren't completely off the reservation when we did this back in early 2000s and that the pattern is coming back again and here we have a premise where we we we kind of it seems very familiar. I mean, it's different, but we could absolutely see the kind of the mentality that creates it.
Makes total sense. Now, Hilmar, you've said that Eve's power creep sort of escalating conflict design is core to why it actually survives. Um and that's the answer to what's next is, you know, building something more hardcore. Isn't that the opposite instinct to what every retention playbook in gaming, even mobile, um is saying and doing right now, which optimizes for lower friction and we don't want to annoy players. What are your thoughts on that?
So, my my thoughts on that is maybe maybe a little philosophical. Um I think our brains are created to solve problems.

Like we we have a brain to solve problems. And uh and of course you have to you have to have a certain learning curve of like the problems you present people with in a game. And uh and this way I've struggled with massively in EVE Online. There are many mean pictures about the learning curve of EVE Online and uh and all that. But I am a big believer in in not underestimating the the human condition, especially when people are organizing around the big problem. So, encoding a deep problem statement into the world uh I think it has a lot of power. Of course, you have to ease people into that over time and I think we have done some mitigations on this rebuilding a broken world, which is the premise of EVE

Frontier. When you join EVE Online, you are in a way joining a kind of a space opera scaled civilization that is bustling and there's a lot to do over there, but we're asking a lot of the of the player base of EVE Frontier. That everything is ruined and you have to eke out survival, build tribes, and maybe rebuild this broken world that has been torn apart by a trinary trinary black hole dance macabre in the sector that has ripped apart the fabric of space. And not only that, you also have to program it through smart assemblies and open-source code and it's like sounds batshit crazy. Um but that presents a problem statement that should take decades to solve. Um, I I think a part of why Eve has been um enjoying its prosperity over the decades is a little a little bit like it's a conflict generation resolution machine.

Largely the problem statement is made by the people inside the world which are as they are conniving, have their own agenda, and and um and and and all the wonderful stories we hear from Eve Online. But uh but uh but the Bit and Frontier, we wanted to deeply encode this problem statement of this universe that for some reason cannot stay alive, but through the effort of all the players that will band together to rebuild this broken world. That is the premise of Frontier. Uh that excited us. Whether this master or not, or whether some other people do it differently, and that I mean, we'll see. I mean, the I I I think we're all struggling to know exactly what games take traction, etc. So so I I I think it's just as well throwing the playbook out and try something wildly different rather than just do

uh what everyone else is doing, which I think is largely funding no one as an audience these days.
Mhm. I almost feel like it would be the antithesis for you guys to take that to take that. But you guys have an audience that is used to permadeath, all stakes, high skill floors, escalating conflict, rather than just smoothing them away. So it really makes sense why you guys would would stay on this track.
Makes sense is maybe not the word that would use, but I'm glad you do use it.
I think so.
I I It's [laughter] maybe consistent. Maybe maybe it's that.
Yeah, 20 years of consistency, yeah. Um so Hilmar, wrapping it up, you've just rewritten the country company's ownership, you've given it a new name, you open source the tech stack, you've had to deal with Google, and this AI strategy as well. What is next for you guys? What does the next few years look like for Finnish Creations? What's in the plan?
I mean, I mean, right now we are in the thick of getting two games to market,

EVE: Vanguard, with Lex Song to EVE games, and adds value to their sort of perpetual machine that is EVE Online in a very unique way. Um, and and it's a shooter, extremely competitive. Like, getting that off the ground, even getting extremely competent shooters off the ground is, as people have seen in recent times, extremely hard. So, that is no small feat. Um, and then on the other side, rewriting the the fabric of reality when it comes to virtual worlds, um, uh, and then like, see if, uh, all these kind of newfangled machine brains that are being created, uh, live in front of us, can play a part in in, uh, spurring us on to become better at the at the craft of making virtual worlds. I mean, that that that remains the same. Maybe we've just escalated it a bit, like, through all the promotion of this

year, but, uh, I think everyone here at Finnish thinks our best work is ahead of us.
That's so exciting, and we can't wait to see what comes next. Thank you so much for taking the time today.
Yeah, thank you.