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Navigating the Future of Gaming: Insights from GDC with Erik Ashby image

Navigating the Future of Gaming: Insights from GDC with Erik Ashby

S2 E12 ยท Player: Engage
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In this episode of the Player Engage podcast, host Greg Posner and guest Erik Ashby, Senior Director and Head of Product Research at Helpshift, delve into the evolving landscape of gaming technology and player experiences. They kick off the discussion with the buzz around GDC, sharing their excitement for the event and the latest trends in the gaming industry. Erik, with his extensive background at Microsoft and Helpshift, brings a wealth of knowledge to the table, particularly in the realm of AI and its integration into customer service, as highlighted by the recent developments at Klarna.

The conversation then shifts to the future of gaming, exploring the dynamics of games as a service, the impact of subscription models, and the potential shift in gaming experiences with the rise of personal screens within homes. They also tackle the contentious issue of walled gardens in the tech industry, focusing on the Epic vs. Apple lawsuit and its implications for app marketplaces and consumer choice.

Key takeaways from this episode include:

  • The transformative role of AI in customer service and its potential to redefine the industry.
  • The shifting trends in gaming consumption, from big screens to personal devices.
  • The ongoing battle between open ecosystems and walled gardens, with a spotlight on the Epic vs. Apple case.

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Transcript

Introduction and Guest Introduction

00:00:00
Speaker
Welcome to the player engage podcast where we dive into the biggest challenges, technologies, trends, and best practices for creating unforgettable player experiences. Player engage is brought to you as a collaboration between keyword studios and help shift. Here is your host, Greg Posner. Hey everybody.
00:00:16
Speaker
Welcome to the Player Engage podcast, Greg here. I am very excited about today's episode. If you are listening to it today, which would be March 19th, this is kind of the official first day slash second day of GDC. And I am going to be talking with Eric Ashby, who will be joining me as well at GDC. This is Eric's second time on the show. So first of all, welcome back, Eric. Just a little information about Eric. He is the Senior Director and Head of Product Research at Helpshift. He's been here for I think
00:00:44
Speaker
Well over, you can correct me, about seven, almost eight years. Yeah. Seven going on eight years. Yeah. Yeah. And before that, he was at a little company called Microsoft for almost 20 years. So there is a lot of brand loyalty there, Eric. That's awesome. So first off, welcome back to the podcast. I'm excited to be at GDC with you next week.

Gaming Experiences and GDC Excitement

00:01:02
Speaker
Oh, what's going on with you?
00:01:03
Speaker
Well, first off, super excited to be here. You know, you and I had been chatting about, you know, how soon can I come on? I just I just think it's so much fun. And it's it's perfect timing because, you know, GDC is next week. Super excited about about going. I know this is coming out on the 19th while we're at GDC. But but today is is a couple of days before GDC. So so I'm actually super excited about, you know, about going there, meeting with you, of course, and with everybody. So super excited to be on the podcast.
00:01:31
Speaker
Yeah, and Eric and I will hopefully be wandering the GDC floor for a little bit. So if you could find us, come say hi. We'll be recording some stuff and we'll see what's up. But today's episode is a little different than our normal episode. Kind of in lieu of GDC coming up, we would just want to kind of touch the big major topics going on in technology over the past couple of weeks, see what's going on and how GDC is going to impact those. So before we get started with the major podcast itself here, Eric,
00:01:58
Speaker
Let's talk about what games you're playing today, because I know you are a gamer. Oh, shoot. I just I'll tell you the one I played Dungeons of Eternity. Just display. That's a that's a VR game. And I'm not like like it's a it's you know, you're in a dungeon and you're fighting people and things like that. And I typically just because this will show my age, I get a little bit seasick motion sickness when I when I play these games. It was a good game. It was an actually really good game. I enjoyed it. And I played a lot of
00:02:28
Speaker
Like wizards and things like that. But no, I played that a couple days ago with my with my son and his birthday He said yeah tab. We got to try this out and and it was great and and to be clear my son's like 26 27 Okay, so so it was but yeah, I think that was the that's kind of the game I'm into right now is dungeons of eternity Of course monopoly go is always the go-to when I'm sitting there sitting around You know not
00:02:54
Speaker
you know that just I need to kill a couple minutes but uh but that's those are kind of the games I'm into right now so the VR AR game that we're going to have a video hopefully from Eric with him and a couple of his family members yeah the future of gaming is going to look like oh my gosh my yeah so we're right we're at this place um
00:03:14
Speaker
My son actually owns a gaming store, which is kind of fun. But so we had the party at his place because it just has room. And we're like, hey, let's play some, you know, some VR together. It's a multiplayer game. You get to shoot skeletons and stuff. And and so we got into it where I'll play in whatever my wife's sitting there looking at. She's like, what a dork, what a dork. And so she videotaped us and she said it to me afterwards. And I was like, oh, man, this is
00:03:40
Speaker
But it was actually a lot of fun to play with the kids and stuff. And I call them kids. These are now my adult children that we still play together. That's awesome. That's something to look forward to as I get older. Be gaming with my son and hopefully have all those hobbies as well. But that's awesome. I'm excited to see the video and poke fun of you. But that's awesome. That's a fun experience to be able to do with everyone. On a similar note, GDC. Are you looking forward to anything specific at GDC?
00:04:07
Speaker
Okay, so first off, I've been to GDC for quite some time. Obviously, the sessions are always fun to go to. But honestly, the thing I love the most about GDC is walking the floor. I just love to go walk the floor, go corner to corner. Last year, it was a funny thing, I picked up something called, I can't remember, but it was some AR goggles where you put down
00:04:37
Speaker
It's on a table. You just put down a mat on the table and then the game rises off the table, which was which was a lot of fun. So I like walking around and kind of seeing all of the new technology. Obviously, there's going to be some things that we're looking for, like the AR VR is going to be really get big. And you know, you and I should probably chat about this a little bit about what's what's going on with that.
00:04:57
Speaker
obviously interested in to see all the places where people have done AI. I love to see all the new upcoming students, like there's this whole section about students that are there and I love to just go talk to them about their games that they're making. And then probably for me, you know, we have the community clubhouse, which, you know, I don't know if we would have done that because I think that's on Tuesday, just being there with customers that are using some of our technology and hearing
00:05:25
Speaker
There the discussions this one on one for me is just

AI in Customer Service: Opportunities and Implementation

00:05:28
Speaker
invaluable. I just I just love spending the time time doing that So those are the things I'm looking forward to You know at GDC to me, it's always a it's always a lot of fun And my daughter's also she's in college right now getting into an industry. She came up to me about two weeks ago She's like dad. Have you ever heard of GDC and I'm like, oh, yeah, I'm going to it She's like what you're going to GDC. Yeah, I'll be there. So anyways, I There's just a lot a lot to cover there
00:05:55
Speaker
you
00:05:56
Speaker
It's fun that your kids can now start to understand what you do for a living and get a lot of interest in your industry. Like, Oh my God, you've been doing this your whole life. That's awesome. Yeah. And they still don't think I, they still think I don't know anything though. That's typical. Um, yeah, I'm excited to walk the floor as well. I mean, I'm just as a fan of gaming, seeing how they're implementing AI into all these new games coming out. And I know you and I will touch on AR, VR. And I think we have slightly different outlooks, but I know some of the videos you shared with me recently, which we could talk about are phenomenal and exciting. So we can talk about that.
00:06:25
Speaker
But let's talk about what's going on in the industry. And let's just talk about some news, because I think there's a lot going on to unpack it. And let's also simplify some of these things. So maybe people who don't know what's going on can understand it. So let's start with the first one, which I think hits hardest to home to the company we work for, which is Helpshift. And the company we're going to be talking about is Klarna. Klarna is a buy now, pay later type of company.
00:06:50
Speaker
And last bit of news they released is that they are laying off 700 people and having AI perform the jobs of those customer service agents. And that is a huge news in the industry. There are some stats that I'm just going to kick off to begin with. And then I'd love to hear what you have to think about that, Eric, which is, um,
00:07:09
Speaker
So far, they've had 2.3 million conversations after one month of being live and 66, which totals about 66% of Clarnas total customer service. The workload is normally required for 700 full-time support agents. The AI chat bot CSAT scores are on par with their human agents.
00:07:30
Speaker
There's been an 81% drop in resolution time from eight minutes to two minutes, and that led to a drop in 25% of repeat inquiries. I think, first of all, I think to Eric and I, because we've been in this industry for quite a bit of time, none of those numbers are truly surprising. I think making a jump like this to full-time is crazy, but clearly, Klarna is seeing success, and clearly, they're going to get some slack because of this news.
00:08:01
Speaker
Let's hear it from you, Eric. What do you think? What are your thoughts? Actually, when I read through it, I was like, it's interesting because it wasn't the first time I've seen numbers like this. I was like, okay, that's interesting.
00:08:16
Speaker
What I think took the industry a little bit by storm was that just kind of the name recognition, people are like, oh yeah, it's real. When I think about AI, how it's progressed over the years, AI has been around for a long time.
00:08:34
Speaker
make no mistake, it's been around for quite some time. First we had humans that were doing their work and then AI started to sneak in in the background, not really in the foreground, it was in the background. So it was simple things, I could do spell checker, I would do
00:08:50
Speaker
you know, maybe some language AI might help you write your thing better. Then recently, we've had these language AI translation services that can help translate as you've been going. But again, it's always been in the background. And we've attempted to put it in the foreground. You know, people are always like, oh, let's put this chatbot off, but out there. But as it came out, it was like,
00:09:12
Speaker
If you were kind of to grade the AI by the human age, you would be like, kind of felt like a two-year-old or a three-year-old and it would get off. Well, to be honest, the AI is getting to a point where it's around like a teenager or a young adult where it can handle these frontline communications.
00:09:32
Speaker
And people are now realizing, yes, we've moved from where AI is in the background to where AI can be in the front. And so the workforce is no longer humans being assisted by AI. Now it's side by side. You have AI that is handling the front end of the conversation and humans handling the back end if it gets difficult. And what Klarna showed is like, yeah, guess what? It's real.
00:09:58
Speaker
we've talked about it, it's real, we can do it. We've been, you know, when I look at kind of like, what did they do? I played, I went through and I, in fact, I, this would be a really good place to show up, show some screenshots, which I have for that. But
00:10:14
Speaker
But they're using language AI to detect the intent. From the intent, they're matching that intent with an answer, and then the language AI is giving out the answer. And then they're personalizing it because they're in context. Now, all of this technology exists.
00:10:31
Speaker
But it takes someone going in and optimizing that technology for that. And that's what we've been doing for quite some time. We've do, in fact, I read some numbers that were significantly more. We have brands that are around 70% of their system is automated. And of course, when you, all through this AI, when you do that, of course, your time to resolve is gonna come down because it's all instant. But yeah, I think the reality is we're here.
00:11:01
Speaker
We're at a place where now AI can do the front end. And so there's going to be a transformation. Brands are going to start recognizing how to do it. And they're going to recognize how to do it in a safe way. And that's the other thing that I think Klarna has done is that they've done it in a way that's safe. You've seen people have just thrown AI out there in an unsafe way. And there's a story where some
00:11:23
Speaker
Uh, what was it? Oh, it was, it was a car dealership. They threw an AI out there and the AI was, you know, it's supposed to help people out. And some guy figured out, he's like, Oh, it's AI. I'm going to talk to it. And he got the AI to confirm that they could buy a car for a dollar, you know, because it still is a kid. Like, let's, let's be honest. And so, so it, it, Clara did really good at taking the AI, protecting it, um, configuring it, optimizing it, and they're seeing the outcome because of it. And it's something that other brands can do. I mean, the technology is there, uh, for other brands to do it.
00:11:53
Speaker
I love your explanation of it in years of age range, which makes a lot of sense. In my mind, I go back to January 1st of last year. That's when I feel like OpenAI really hit the market with chat GPT, and then we're now about 15 months later. In the first 12 months, we're probably saying we're not there yet. We're not there yet to allow
00:12:17
Speaker
agents to control the conversation. But but now it seems like Klarna kind of solved that and saying, Hey, let's work side by side. And no doubt within a couple months, it's not gonna be side by side anymore, right? It's gonna be humans backing up the AI. And I guess in your mind, you're saying that Klarna is doing it better. But what do you think they did different?
00:12:37
Speaker
Well, if you compare to, say, the example that I gave with the bot that was at the car dealership, there's a right way and a wrong way to do it. And again, think of it like you're hiring a kid that graduated from high school. You take that kid and you're like, hey,
00:12:59
Speaker
Here, I want you to go sell our cars. Go out in front and just start selling cars, right? That's not the right way to do it, okay? The right way to do it is to take them, bring them in, train them, have them understand the policies, test them out, run some examples, you know, how would you do with this? And then, and you really optimize him for, or him or her, you know, you optimize them for the tasks that they're going to do.
00:13:25
Speaker
And so, you know, Klarna came out a while ago and said, hey, we're working on this, but they didn't just throw it out there. And that's what I saw last year is I saw people take, oh, you know, GBD is here. Let's just throw it out there.
00:13:39
Speaker
And that's not the way to do it. What you do is you take the technology, use AI to help you with that, understand what are the most common problems that you're gonna see. Have AI, you know, so be like, okay, here's the most common

Future Roles of Human Agents with AI Advancement

00:13:52
Speaker
problems you're gonna have. Then, okay, then let's make sure that our AI isn't just a generic model, but it's also trained on the specifics of our app.
00:14:01
Speaker
Let's train on the specific problems. Let's make sure it's really good at these specific problems. And let's make sure that if it doesn't understand that it knows how to hand off to a human very quickly. And so that's what they've done. And like I said, it's what we do when we go in and we talk to a customer. We go in and we first like, what are your top 20? In fact, we look at the top 20, 30, 30 call volume drivers and it counts for like 85%.
00:14:27
Speaker
And so we just hone in on those and immediately we have automations and AI trained on 85% of their call volume, or their ticket volume, that we can then handle through that. Then you give it rules, you give it automations, you give it workflows that it can work through, you give it then some personalization data, you plug it into your CRM. Then you have something that's very powerful. Again, it's just like a human. You give the human all these tools and resources, training and things like that.
00:14:54
Speaker
it's going to be a lot better. And that's what they did. They took the time to get that part right. And that's what's different than, oh, we just stood up a chatbot. Which is interesting because then it gets into what's the role of humans. Because we should not be letting chatbots run amok. We need to be managing them.
00:15:16
Speaker
I think, you know, as the sales engineer in me, right, it tells such a great story that I feel like we've been saying for a number of years now, right? Let's talk about some of the things that Kalarna could do. And I don't want to compare it to Helpshift, right? It's not necessarily a comparison, but all these tools and features have been available on our platform. It's just who's going to be that first one to take a risk and go almost fully automated with the option of going to an H&P. They can help them
00:15:41
Speaker
The Clarinobot can help customers with any questions about their account, recent payments, anything like that, meaning it has access to a CRM. Meaning if you're a company today wondering how we can make our tools more intelligent, connect your chatbot to a CRM to pull that player data or pass that player data through your platform that's completely available, that's completely available today. Have access to customer profiles and recent transactions, again, still through the CRM.
00:16:04
Speaker
just makes it a personalized experience, which is great coming from a bot. It knows 35 different languages, and it's available 24 seven. And I think one of the most important aspects is it does still give you the option to speak to a human, right? So if you are the type of person that wants to have that out, that out is available. It's really a cool tool. They're clearly didn't rebuild the wheel, the wheel has been in existence for a while of all the tools I can
00:16:30
Speaker
pull these data, provide this data, but they put it together in a package and they took that chance. It's kind of that first movers advantage of moving forward. And to your point, we can't let it run them up, but there's going to be a certain point where that band-aid gets pulled and it's going to be like, who's going to be the first one to fully replace agents? And it's not really a great way to look at it, but what is the role of the agent in the future? And I think that's a conversation worth having at some point.
00:16:53
Speaker
Yeah. And I think the agent part is actually super, super important. When you think about it, of course, what you as a consumer see is you see the AI and you're like, wow, it's this thing. But in order for that to happen, there was a technology platform
00:17:11
Speaker
that technology had to be in place, which is what we have or what's out there. There is the expertise to train the bot to set up the technologies, to all of do that. And then it has to be backed by the human agents that are always there ready to pick it up when needed.
00:17:32
Speaker
And so when I think about, oh, how are we going to implement AI? I'm like, look, if you're going to implement AI, it has to be done in combination of AI and humans and technology. You have to bundle those together, and that creates a solution. If you're just like, oh, we're going to implement AI, that's not going to be successful. It's got to be that triad together. And when you do that,
00:17:55
Speaker
That's when you see these results is in

Games as a Service and Industry Trends

00:17:59
Speaker
that. And to me, that's that's the future. You know, that's the future of where it's going. It is going to be a combination of all of these. It's not either or. Cool. So we've learned about Klarna. What's going on with Klarna? Let's move on unless you have any final words on that one. This next topic is a pretty hefty topic. And I want to talk about games as a service. Things like X Cloud, things like GeForce now, things like PlayStation now.
00:18:24
Speaker
Lots of things out there today. And I know you're a gamer. We talk about games all the time. We spoke about games earlier today. Myself, I'm an Xbox player. I love to sit on my couch and play my Xbox. I have my computer, but it's next to where my kids sleep, so I don't really PC game anymore. And I have my Switch. And when I'm sitting on my couch, I love to just be able to play my Switch, or if I'm traveling, I play my Switch. Yeah. Yeah. It's interesting. I've got the Switch Lite right here that is always sitting here. We'll talk about.
00:18:53
Speaker
Yes, but to help me, what is your normal gaming experience like? Because I think that is changing as time goes on. Well, it is. It is really interesting. I want to get into the market a little bit, but let's hold off on that because I want to talk about hardware also because there's something interesting. But if you look at the market right now,
00:19:17
Speaker
You know, this market's been flat. It kind of grew when there was COVID, right? And so we're like, everyone is sitting at home. So we all decided to play games. And so it grew. And then there's been a correction from that. It's picking up, but it's not at a rocket-setting pace. What's interesting, though, is if I compared PC to mobile,
00:19:38
Speaker
PC is actually growing right now faster than mobile. So in the market space, you've got this one thing where PC is growing. And so that's interesting, which will be kind of counter to this concept of these gaming services, because you've got a really high-powered PC that's got this $40, $90 in it or whatever. But there's another trend that's going on, which is what I call the big screen trend.
00:20:08
Speaker
And, you know, we, you know, we all grew up on this, you know, I grew up in the 80s, right. And it was all about
00:20:17
Speaker
how big of a screen could you get? Now back then it was these ginormous, you know, three foot, four foot deep things, you know, and it was, you know, and even in the 90s and 2000s, like, wow, you got a 55, no, I got a 65, oh, I got a 75, you know, and now you can go to Costco and there's like, like 95, there's rows and rows of that. But it's, here's what's interesting is the screen time is changing
00:20:44
Speaker
to these, even for entertainment. We've always had entertainment mobile on the go and things like that. But in the home, is there a switch to the screens preferred that are these personal screens? The PlayStation portal device came out. It's actually doing better than they expected it. They had to readjust because people are
00:21:10
Speaker
spending more and it's designed to be in the house. It's not a remote gaming tool. It's designed to be in the house. I don't know. It's a really interesting thing that the market is going in a couple of ways. One, you've got the rise of PCs again. Second, you've got the rise of these personal in-home devices. I watch my kids all the time sitting in the front room with a big screen
00:21:34
Speaker
turned off as they all have their switches up going. It's just because it creates that personal experience. Like I literally did this last night. I was like, I sat on my couch watching, you know, watching, I think it was Ted Lasso on my tablet.
00:21:51
Speaker
right there in front of the big screen. And so there is this going on. I don't have any data behind it, but I think it's interesting about the emergence of these middle screens. And it will then impact the gaming. What feeds those? Is it going to be your in-house console, or is it going to be the service that's going to feed those experiences?
00:22:14
Speaker
So I don't know, to me, it's a little bit of an open question right now, which is going to win out if it's going to be in, like I said, in-home CPU or cloud CPU. Cloud CPU still has a ways to come, obviously, but it's getting there for sure.
00:22:30
Speaker
Yeah, I mean, I've been looking at the progress of xCloud and now PS, I think it's PlayStation now is out. And the fact that, I mean, first of all, xCloud has a huge lead built on Azure, so it's got a big infrastructure. But I mean, it seems like PlayStation came out ready to play and it seems like it's doing better in a number of the tests because xCloud has updated in years. And with what you mentioned about the PlayStation portal, it's this fascinating device, which when announced, everyone was like,
00:22:57
Speaker
what is the point of this? There's no use case. And then, I mean, my house, we have two TVs and my kids take them up and I'm just realizing I am the use case to this. I want to play my PlayStation. I don't have a PlayStation, but I want to play it, right? And I don't have a screen available. And all of a sudden just clicked like, wow, this really is a good idea. But at the same time, why not just
00:23:16
Speaker
connected to my phone. And I know it's not completely possible yet. And I think we live in this cool era now, right? We do have these choices. I think it's going to slow, for me at least, I am a couch gamer. I will say that I do think that's going to start to change. I think, you know, I just bought some stuff. So when we go to San Francisco, I can kind of play on the go. And I'm excited from either a Bluetooth controller for my Xbox hooked up to my my phone or or bringing the switch or something else. I think we're at a great
00:23:46
Speaker
age for convenience for ourselves. And I think it's going to be interesting to see what people at GDC are playing because I think we'll see a lot of people gaming there and wondering how they are gaming. Yeah. I will tell you one thing about my big screen. When my big screen comes on, it's only on for one thing, which is Smash Brothers.
00:24:07
Speaker
Okay, like, you know, have a party. Everyone's over. It's Smash Brothers time, the screen comes on, you know, or, you know, watching a movie together, you know, or whatever. And so the big screen is really the, you know, it still has that social aspect to it. But other than that, there's this there's this transition, which may be good, good. I don't know. It's but I'm just seeing a lot more of these personal screens even in the house.
00:24:34
Speaker
being the primary entertainment tool. So it'll be interesting. I think it'll be interesting. But there's another aspect about it though, which is the economics, which I said I wanted to get to. The gaming industry right now, like I said, it's growing but not at this 2x, 3x pace or whatever.

Economic Factors and Adaptation in Gaming

00:24:58
Speaker
And so out of that, what's happening is brands are having to be very conservative in what they do.
00:25:05
Speaker
Okay, so when it's growing, everyone's like, hey, let's take risks, let's do this, let's do that right now. But now what you're seeing is you're seeing, okay, we're not growing, so where do we generate revenue from?
00:25:18
Speaker
You know, do we, you know, how do we invite new people into the playing experience or how do we become more efficient at what we do with what we have? And so those are two very conservative plays that we have. And so that's what I'm when I think about these gaming services and stuff like that.
00:25:36
Speaker
It really is like, okay, is this a way to either get to more screens? In fact, Microsoft this last couple of weeks ago announced that they're going out to, they're going to start to release PlayStation titles. They didn't say which games.
00:25:52
Speaker
But they're going to be releasing PlayStation titles. As I was saying is that when you look at this shift, there's some economics that are behind it. We're in a market right now where the market isn't growing. And so what that tends to be is that tends to make companies more conservative.
00:26:08
Speaker
And so that means they're investing in the same games, but they're saying, OK, what are new innovative ways that we can take these games out and either deliver them in a new way where people pay? So cloud services, subscription services, things like that. Or how can we deliver these games in a way to other people that haven't been playing before? How do we acquire different people playing?
00:26:31
Speaker
And so if you don't have the cost of, oh, I have to go out and buy a console to get into it, then maybe I can acquire some new players that way. So there's some economics behind what's driving this, as these brands are really looking for it. And you see at Microsoft about three or four weeks ago announced that they're releasing PlayStation 5 games.
00:26:52
Speaker
I don't know what they are. They didn't announce it. But I'll tell you, if I am playing Halo on a PlayStation 5 game, then I know the world has changed. That was my first land game was Halo back in the day. But that brings us to another really interesting discussion about marketplaces. Well, before we jump to that, I do want to ask a question about that.
00:27:19
Speaker
You know, mobile games, and this is a general number I'm looking at, brought in about $92 billion in 2023, where console games brought in about $52 billion. So there's a big gap there. Clearly, free-to-play games have found a way to monetize against players. And you're starting to see this from console as well, right? I mean, you have Suicide Squad that just came out. That's an always online game. And it seems like these companies are trying to force always online games
00:27:47
Speaker
with updated content causing DLC. But it seems like for at least console, and I'd say PC as well, right, that players don't want that. And I think you've seen negative reactions to games like this. So while mobile is making a lot of money, and they're doing that, you can see that
00:28:05
Speaker
We'll call it Consulate and PC gamers because they are not rebelling, but they're against it. Do you see that as being part of the reason why this industry is kind of in not the greatest place right now? Yeah, I do find that that's interesting because it used to be, if you wanted a game, what'd you do?
00:28:25
Speaker
stayed up to midnight, you went out to GameStop, and you and your kids just waited for it to come out and it came out. Now it's just all released over the wire. But console and even PC, there's still this concept of like, I own this game versus well. I have to keep on paying for the rights to play it. And so I understand that. But I also think that to kind of counter that,
00:28:55
Speaker
is the multi-play, sorry, the multi-platform gaming that is just becoming more and more. Where it's just like, look, I know I play this game, you know, Pow World is coming out and it's on everything and it's everywhere and it's just a, it's a great, you know, it's a great, great way to be able to play it. Obviously Fortnite is kind of the leader in that. And so I really see
00:29:18
Speaker
those brands investing more and more on those, you'll still have traditional ones. But one of the things that also like even on a traditional game, one of the things that we're seeing is we're seeing a rise in the kind of the subscription, the common subscriptions like the Xbox Play or the whatever.

Epic vs. Apple Lawsuit and Market Dynamics

00:29:39
Speaker
And so if I'm a gaming company, especially if I'm a small, I'm starting up, I might actually just be like, look, this is what I'm going to do is I'm going to do Xbox Play because it allows me to get
00:29:48
Speaker
You know a portion of that on coin gaming revenue, so it'll correct itself You know and I think
00:29:56
Speaker
I think it'll land in the way of the market, which is, I mean, we'll have to be paying subscriptions and things like that. Or it'll come as part of the Xbox Play or things like that. It'll be good. Well, let's share some data. I have some data in a screenshot that we'll have that shows that the growth of the Xbox Play and these other subscription services. I think that's what it'll balance out. Then obviously, the final thing on this is it comes down to experience.
00:30:26
Speaker
You create an amazing game that's fun for people to play, that's engaging, consumers will reward you for that. Up to a point. And I think that's, there's the other problem is that consumers are getting a little bit saturated. You know, it's like, yeah, I've already spent $50. I remember when Battlefront came out, you know, when I went, I was like super excited. I paid 50 bucks. I got it. And I put it plugged in. I'm like,
00:30:51
Speaker
I can't do anything, you know, unless I then pay more. That's when that's what gets frustrating is when it sounds like that happens. So let's just if I think of it, I'll jump back to it. But let's let's talk about the app store dilemma, because I think that kind of leads, you know, there's this whole concept of walled gardens that's coming up a lot.
00:31:09
Speaker
And it's brought up a lot for Apple and Meta and Facebook and Meta is Facebook. And people ask about Microsoft and stuff like that. So let's talk about Epic versus Apple and the lawsuit and what's going on here because this is continuous news. It's been going on for God knows how long. So.
00:31:28
Speaker
Kind of a whole story of what a walled garden is. If you don't know, if you're old enough like me, you'll remember AOL and you log into AOL and you're in AOL's world. You can't leave it. If you're an iPhone user, you have access to the iOS app store and you're kind of stuck in that world. You can't load apps from everywhere else. So a walled garden is good for privacy. It's good for protection of young people. It's good to make sure we verify what type of apps are coming out because you have to go through Apple. You have to go through the walled garden provider. The problem is,
00:31:55
Speaker
if you're the owner of the walled yard and you can choose who sees what and how things happen. So come, Epic decides to sue Apple over Fortnite because Apple is taking 30% of all sales that go through the Apple App Store and you are stuck using the Apple App Store. So again, Epic sues Apple. Apple owns the market, but, or sorry, Apple owns the market, but Epic wins. The EU says,
00:32:20
Speaker
You now have to link to outside payment providers, meaning that you don't have to buy things through the iOS app store. You can go externally and purchase something and redeem it in there. It basically links you off the app itself.
00:32:36
Speaker
Apple doesn't really love that. It says it's a kind of a breach of privacy and it all actually came down to a Spotify lawsuit because Apple wasn't providing clear ways on how you can save money by purchasing a Spotify subscription from inside the app. So Apple gets mad and decides what it's going to do is it's going to ban Epic Games developer account.
00:32:59
Speaker
which they have all rights to because it was technically a breach of contract. But at this point you have Tim Sweeney from Epic Games and Tim Cook. It's kind of like a battle of the two Tims and who's right and who's not right. The EU decided to fine Apple $1.84 billion or pounds. I should have looked that up. I don't know.
00:33:17
Speaker
I'm reaching their antitrust saying again, they call the anti steering the restricts the ability to tell people where to go. It's a fascinating subject that's still going back and forth. Apple eventually did unban Epic's developer account. And I think it's a fascinating story because you know, Android doesn't have this issue as much. It does allow for linking to outside payments.
00:33:37
Speaker
I just said a lot. Do you have any stance or any thoughts on kind of where this lawsuit is, what it's about? Yeah, I mean, it is interesting. Apple has always been this way.
00:33:49
Speaker
You know, it's always been, look, we want to control and not just the ecosystem, but the experience and everything. Obviously it's a business decision for them to do it that way, but the result is, you know, whether it's even their iPad or their iPhone or their whatever, it's always been, we have control over it.
00:34:17
Speaker
And they argue it's better for the consumer, it's a better experience and things like that. On the other hand, Android, Google have always been open. Like you could go reface your Android phone, you can do whatever you want with it, but then also, you know, you have no idea what you're going to get. And so, you know, it is an interesting argument. I think given the
00:34:37
Speaker
kind of political nature of it. I think that eventually openness will win, you know, in the long run, just because governments don't like, you know, they come after big guys that have lots of money and if they can say monopoly, then they'll do that. So I think that
00:34:55
Speaker
Apple will be forced a little bit to open up they're gonna go kicking and screaming so they'll still do whatever protections they have it's then going to be a you know a benefit for android and android devices which you know here in the us it's all apple apple apple apple but when you look at the global market
00:35:14
Speaker
It's not Apple, Apple, Apple, Apple, especially when it comes down to mobile phones. And so I think, you know, Android is going to be like, OK, great, you know, we love this. I think Microsoft is expected to come out with their store on Android. You know, I don't have the.
00:35:27
Speaker
Don't quote me on it, but there is talk about that Apple's going to come out. I mean, not Apple, sorry. Did I say Apple? Yeah, Microsoft will come out. I think that's where it's going to go more towards Epic, more towards open, being able to do open purchasing and things like that. But it's not going to be 100%. Apple will still control what it wants, everything that it can. I cannot see Apple.
00:35:53
Speaker
fundamentally changing who they are. They will always try to protect their space. But I do think it's interesting. And by the way, you can also see this in the kind of in the new devices coming out. Like as you mentioned that their approach around the AR, VR is definitely different.
00:36:11
Speaker
Well, I think it's interesting because I am not an Apple user. I am team Android, but I understand where Apple is coming from, right? I mean, you preach protection of your users. You preach making things safe for kids, for adults. And by controlling this garden, yeah.
00:36:29
Speaker
you kind of control the pricing of things and where things go. But at the same time, I'm protecting that user's experience, something you've mentioned already about more so the player, it's the user's experience. But I don't know, it's this fascinating conversation for me, because I am not pro Apple, I see where they're coming from. And I think by opening it up to more marketplaces,
00:36:48
Speaker
You're going to cause a lot of confusion in people. I think, you know, if you're going to go to purchase something in Fortnite and you're bounced out of the game, going to another marketplace in a web browser, you might second guess what you're looking at. And maybe that grows with time and people just learn to respect it and appreciate it. But oh, for sure. Yeah, for sure. Especially if you like you imagine you bounce out and and then you're like, why am I putting in my credit card again?
00:37:14
Speaker
Who is this person who's asking for that? I was team Android till about three years ago, and I finally converted to team Apple. But I love Apple Pay for just that. If I can just click, click, point at my face, I know it's coming through Apple Pay.
00:37:32
Speaker
Every time I get non-Apple Pay, I'm like, where is it? Who is this person behind it? And things like that. So yeah, it is Apple. I think, like I said, they're gonna fight for this to control as much as they can. I don't think they're gonna, I think they're gonna have to give up some ground.

Future of AR/VR and Apple's Impact

00:37:53
Speaker
I think that's what's gonna happen.
00:37:55
Speaker
Let's move on. And from this walled garden that we talked about from Apple, let's talk about the next logical step of the Apple vision. Apple vision pro and the future of AR VR. Cause I was, I'm not anti AR VR cause I do have a quest and I enjoy my quest, but I always figured that if it didn't pop off during
00:38:20
Speaker
COVID when we were locked up in our houses and we couldn't leave. And the truth is, the Quest was never too expensive of a product for someone that's looking for it anyway. What would be the point of it? And then you have the Apple Vision Pro that gets announced and has made of metal or titanium, which people love until they put it on and they realize, hey, this is heavy for a long term. And you have the battery on the side of you.
00:38:44
Speaker
Nothing in typical, in my own personal opinion, in typical Apple way, they didn't reinvent anything better than it's existing, but they package it nicer and they have a hell of a marketing team that they can paint a better picture. But, but I am not.
00:39:01
Speaker
I'm not a fan of the future of AR-VR. I am, but I'm not a true believer yet. I don't see people wanting to put on these masks or the helmets or the goggles, sorry, the goggles, to continue doing things. I think that's kind of in the age of Wally and people getting...
00:39:18
Speaker
kind of sucked into screen time. And then you shared some videos with me and kind of changed some of what I was thinking. So what are you thinking? Well, let's definitely put some of these videos up. I'll share those with you. If we can cut them in, I think that would be really interesting to do that. But here's my take on this. If you look at
00:39:39
Speaker
computing over the years. There's been these shifts in whether it's been experienced. So we had these mainframes, and then all of a sudden there's PCs, and we're like, whoa. And it was a shift in how we interacted with the technology. Then we had these PCs, and then there was the internet. And again, the internet, even though it was a different technology, I mean, you were still on the same device, it was a shift in how you interacted with the technology.
00:40:07
Speaker
Then we went on for a while and then the smartphones came out. What was interesting about smartphones is there's mobile phones for a long time. But when smartphones came out, it was a shift in how we interacted with the technology. It was a huge shift. It wasn't just like, we're going to do it a little bit differently or it's a companion to your PC, which Microsoft was saying for a long time. It was a complete shift. We haven't done that for a while.
00:40:34
Speaker
we haven't had that shift. We've had, oh, the phones are faster, they're cleaner, the screens are bigger. We have tablets or the kind of like laptops and like there hasn't been that shift. And so the AR VR represents a possible, a possible shift in,
00:40:55
Speaker
in how we interact with this technology. And that is what I think is, everyone who's getting excited about the Vision Pro, that's what they're seeing. Because prior to the Vision Pro, you'd put on this device and it was a gaming device. And you would be like, okay, great, I can see the game, you take it off and you're out of the world. Vision Pro is good enough
00:41:16
Speaker
that it's tricking your brain, it takes a little bit, but it tricks your brain to accept this reality that you're in. And then once that brain has been tricked, they're like, oh, wait a second, this is a different reality. This is a reality where I can portal myself to someplace else, or I can bring people into it, or I can have different things up, and it is a different new,
00:41:43
Speaker
reality that I have these different experiences that change the way how I interact. Now, the drawback is I have this stupid thing in front of my face that is like that. Apple Vision Pro is a vision. They even say it. It's a vision. It is not the thing that's going to change it. I guarantee my wife's not going to be driving her car going, oh, it's not there. But it is a vision of how this technology can change.
00:42:14
Speaker
where we're at. And so, I mean, how we interact with the technology or how we interact with the world.
00:42:22
Speaker
We need to get there. That's the thing. We need to get there. And Meta's trying, Apple's trying, Microsoft is trying. There's gonna be a ton of these, like you'll see them next week when we're at GDC. There's gonna be all these glasses that are, they look like sunglasses, but they have the technology there. Of course it doesn't have all of the input devices that the Apple Vision Pro is stuck on front of it. So the technology is not there yet.
00:42:48
Speaker
but it has potential and I think that's what everyone is excited about is like, is this potential. Now there's all the negative, like you said, are we gonna end up like Ready Player 1 where we're all sitting around with these classes just completely devoid of humanity or are we gonna leverage it so that we can bring ourselves closer? That was one of the points that was brought up is like, we are now in a world where we are very distributed
00:43:17
Speaker
We've done that. We grow up, we move away, and whatever. And to have devices that allows us to get closer may be very powerful, even if virtually. The jury's still out on this one, but it's an interesting vision. I highly recommend that you get one and just play around with it. Not about the games, but to see if your mind makes that
00:43:42
Speaker
that switch into this is the reality. And so I think Apple is making a good swing at it. It's gonna sell 200,000 devices this year, which is nothing. But when the iPod came out, the original iPod, not the iPhone, but I had the same thing. I'm like, what's this thing? It's an MP3 player. It wasn't an MP3 player. It was their vision for mobile computing.
00:44:13
Speaker
According to Eric, if you've got a casual $3,500 lying around, go pick up a Vision Pro. Everything makes sense to me. There's been no major leaps in the PC or way we experience computers for God knows how long since the mobile phone probably, like you mentioned. I'm starting to see the Vision just can't get past the form factor that it's currently in. I think it's a cool idea.
00:44:43
Speaker
Yeah, and I don't know if people want to be surrounded by technology that much. And, you know, younger me would have said, Yeah, I want to do this. I always want to be connected. I remember going in Atlanta, I was like one of the first people test out the Google, whatever their goggles were. Yeah.
00:44:59
Speaker
The Google Glass, yeah. You know, it was interesting because I thought the Google Glass, there's a brand that has taken the Google Glass and they've made, they actually made it for vision impaired. And what it does is it scans the world and it then uses AI to translate what's going on in the world and then speaks it out to it. And I was like, wow, what an amazing way to take that technology.
00:45:27
Speaker
The jury's out on this one. There's a lot of people who are like, do we really want to be a society with technology? The next thing is just direct retinal implants. That's what's coming up next. And if you look at the technology that they're doing in the sunglasses, it is very close to that. They're essentially just projecting right onto your retinas now at this point, which is how they're doing it.
00:45:56
Speaker
But yeah, I think that's a question as society we have to answer whenever any new technology comes out.

AR/VR Versus AI: Personal Preferences

00:46:04
Speaker
But if you look at the past, typically the technology
00:46:08
Speaker
balances itself and we move forward. I can imagine farmers going, why would I ever need to go more than 15 miles an hour? I'd never need a train. Those trains, men were not meant to go that fast. Men were not meant to have these experiences. But we'll see. We'll see. As a fan of the industry, just in gaming in general, what excites you more, AR, VR, or AI?
00:46:34
Speaker
I think AR-VR excites me more. And the only reason why it does, I'm going to go back to the beginning of this podcast. I was at my son's birthday, enjoying time spent in AR-VR with my family. AI, I spent time with the machine. And so if I had to choose, I would do to choose AR-VR because it brings me back to my family. It's an experience. It's an experience for you.
00:47:04
Speaker
Yeah, yeah. AI will always be there to help. And we need to manage it like that. But AR, VR is an experience that I can enjoy with my family. They're probably going hand in hand, right? It's not against each other. AI will help build an experience VR, AR will experience the experience.

Closing Remarks and GDC Invitation

00:47:21
Speaker
Yeah, yeah.
00:47:23
Speaker
Learned a lot. Anything else? Yeah, it's been fun, Eric. Yeah, it's been fun, Greg. Thank you for hosting me this time. No, I'm pumped. I'm excited. I'm excited to be at GDC with you next week, and hopefully we can walk around and film some stuff and have some kind of off the cuff conversations with people there. Oh, yes, yes, yes.
00:47:40
Speaker
Any final words before we wrap up today? No, let's go have fun at GDC. Yeah, come visit the keywords booth at GDC. Eric and I will both be there. I don't know the booth number, but it will be a big booth, and if you look up, you'll see keywords and it will be there. Now, Tuesday, March 19th, we are also hosting an event called Community Clubhouse. It's in the Moscone Center, so come check it out. Lots of good stuff coming on.
00:48:05
Speaker
And I appreciate this conversation with you, Eric, that I think it was enlightening. I think we get to share some stuff with people and thank you for your time. All right. Thank you. Take it easy.