transcript

Speaker 1:
[00:14] Hello and welcome to the Gamecraft Podcast. I'm your host, Mitch Lasky.

Speaker 2:
[00:18] I'm Blake Robbins.

Speaker 1:
[00:19] And this is our podcast about the modern history of the video game business. This is episode three, season four, The Attention Drain.

Speaker 2:
[00:30] Ooh, drain.

Speaker 1:
[00:31] Drain.

Speaker 2:
[00:32] We were talking about it before. It's a good word for this one.

Speaker 1:
[00:35] So in this episode, we're gonna talk about this thesis that's currently fashionable in critiques of the video game business, that there's a market for interactive entertainment, and that in the last decade, the video game business has basically lost its monopoly on interactive entertainment to a variety of non-game interactive experiences. So I think Matthew Ball in his deck this year provided a pretty good summary of this thesis when he wrote, Video games post pandemic problem isn't that players choose to watch TikTok instead of buy a AAA game, or subscribe to OnlyFans instead of buying a PlayStation. It's that on a Friday evening, players are placing a growing share of their time and spend elsewhere.

Speaker 2:
[01:19] Yep.

Speaker 1:
[01:20] What do you think about that?

Speaker 2:
[01:22] I think that it's well said, and it's likely been something that's shifted over the past decade, maybe more slowly than even just a full rapid change. But I think it's important to just think back to the 90s when I was a kid. And it's like all of this was actually very contained. There was only really gaming. Maybe there was go and watch cartoons on Saturday, or you can go watch TV, but that was really the only competition for this interactive entertainment that we're referring to.

Speaker 1:
[01:54] Yeah, maybe casino gambling for people over the age of 21 who lived in or near Las Vegas or Atlantic City or like, I mean, there were very, very, very tight restrictions around where you could find interactive experiences other than through conventional gaming.

Speaker 2:
[02:11] Yeah, exactly. And so it's like a more recent phenomenon that this is even a possibility, because for the longest time, it was truly just games.

Speaker 1:
[02:22] Yeah, I think that's right. And I think it's interesting to think about what games learned during that extended period of exclusivity, if you will, when they were primarily just competing with each other. And I think the most important lesson that they learned was how to commoditize fun. So if you think about, like, in the form of engagement and retention, this idea that providing ongoing dopamine hits from challenges, achievements and completion was really a lesson that the video game business originally learned back in the sort of package goods days and then exploded in the mobile gaming days, where these ideas that you could basically design these patterns to optimize fun that were feedback loops, rewards, retention hooks, progression systems, leaderboards, competition mechanics. They all got really, really good at this, the video game business, to the tune of a $200 billion business globally in the last decade.

Speaker 2:
[03:25] Yeah, it's fun to think about it even in the context of just games getting more and more competitive within it. I think about a game I would play in the 90s, I don't know, let's just say like Mario 64 or something, and you compare that to a modern mobile game. And if you could go back in time and put those two together, they would not even compete. No one would ever even play Mario 64 if they could go play Archero or one of these hyper casual games, because the mechanics for getting you either retention and monetization is just so much more fine tuned.

Speaker 1:
[04:01] So much more fine tuned. So I think it's fair to say that that is something, that was a deep learning of the video game business during this period. And in addition, I think it's important to think about the fact that that exclusivity created this weird internal inward-looking competitive dynamic, where we weren't really thinking in the video game business of threats at the frontier, where we were like, okay, what things are coming? I mean, okay, yeah, mobile came. But and that was looked at very threateningly by the video game business, at least initially. I remember being ridiculed by my peers when I went into mobile gaming in the early 2000s, pre-iPhone, when people thought it was insane, that anyone would think that anyone would want to play games on these devices. And so there had been minor threats at the frontiers, but they were threats from companies that were making games, right? We were very much making games. They were low click activity, low interactivity experiences by and large, the games that we were making, but they were still games, and they were marketed as games. And I think what we started to see with the rise of first social media services like Snapchat, which really was kind of a pioneer in this regard, and then later TikTok, these non-game companies began adopting some of these patterns of interactivity that had been optimized in the game context and deploying them to create a different kind of fun, a different kind of retention and engagement, using a very different kind of media, in most cases, in these early cases, linear media.

Speaker 2:
[05:35] Yeah, I mean, the truth is that anyone who was paying attention to games in the 90s and 2000s could clearly see that games understood monetization and retention better than almost any other form of software. And so it was natural that at some point, software companies would take learnings from it, and to Snapchat's credit with streaks and some of these other mechanics, they were early to that, and that clearly helped. I have friends that still keep their streets alive on Snapchat, which is sort of insane to think about. And obviously TikTok maybe takes this to the further extreme, but Meta has also been the master of this too.

Speaker 1:
[06:12] So I want to unpack that a little bit, because I think that, yes, there are things like YouTube or Netflix or whatever, where you sort of fire and forget. You turn on a video and you lean back and watch it. But something like TikTok requires almost constant input from the user in order to keep the fun going, right? If you just leave it on, it cycles the same video over and over, right? I mean, it's like, but it asks you to really interact with it in order to express effectively your taste and your desires. Like, this video is not interesting, this video is interesting. And in so doing, it builds a profile of you and feeds its algorithm and continues to offer you more and more compelling entertainment to view. And in that regard, there is a bit of a progression mechanic, even in a very, very light sense, right? And frankly, look back in, I mean, having come from the pre-iPhone days of mobile, I've played many mobile games that have less compelling, and sort of, you know, less clicks per minute than TikTok does in the sense of requiring user input, that is that level of interactivity in order to make it, make it fun.

Speaker 2:
[07:23] Yeah, I mean, look, TikTok made the intentional product decision to not have it autoscroll to the next video. Like that is clearly a deliberate decision to not have it just go to the next thing right after. And that's because of, you know, for the longest time, the magic of TikTok, maybe Instagram Reels has caught up on this, is the algorithm, which was like guessing what the next video is you're going to like. And that's all tunes based off of the way that you interact with that feed. Do you send it to someone else? Do you open the comments? Do you interact with the comments? You know, all of those things were inputs into this algorithm. And like the product design there was clearly built for that.

Speaker 1:
[08:00] Yes.

Speaker 2:
[08:01] And then I think the other part, what you mentioned is like, okay, yes, that has actually way more progression than some of the mobile games that even I played even to this day. I play some random idle games. I'm just quite literally opening a screen and just watching a number go up. Like that is basically the same thing. And I'm like, oh, OK, like I can now buy a little house or whatever in this game. Like that is not any different. And so like I think it's important that anyone listening to this does not discount TikTok as a game.

Speaker 1:
[08:32] Not an interactive experience. Yeah, I think they're clearly interactive experiences, right? I think in the last decade, we've seen this level of interactivity sort of leak out into all kinds of adjacencies that would have been really hard to have imagined in earlier times. Like for example, you started to see interactive elements in an engagement loops and progression systems appearing in things like Strava in the fitness category or Duolingo in the linguistic education market. And a lot of people describe Duolingo in many ways as not just gamified, but as a game.

Speaker 2:
[09:08] Yes.

Speaker 1:
[09:09] Which is really interesting when you hear people talk like that.

Speaker 2:
[09:12] There's a great interview with Louis from the CEO of Duolingo, what the Verge did a couple of years ago. And the reporter tries to do a gotcha with him of like, oh, how do you think about gamification versus education and attention? The CEO is like, well, it's pretty obvious. You solve it with always leaning into the engagement and gamification over the education. They're like, why would you do that? And he's like, well, you can't teach someone who's not there. And it was just like such an obvious gaming lens of like, yeah, we need to get them there. We need to keep them retained. We need to get them engaged. Whereas I think historically people would look at an education app and be like, this should be the most educational thing ever. It's like, no, it's actually more important that they try and use the app every single day to better themselves.

Speaker 1:
[10:04] That's so interesting. I think after the pandemic, we really saw this explode as well, right? Things like the sports bedding explosion post-pandemic, where we went from what was a very highly regulated industry that was only really available in a handful of states and in very constrained forms, all of a sudden became like a mobile app on par with a mobile game. Things like Fan Duel and the other kinds of sports books that were available online, where you could do all kinds of crazy bedding and parlays and other kinds of things were highly interactive. And they became a really important adjunct to the lean back experience of watching sports on television, where suddenly you could add an interactive element to what had historically been a pretty passive experience. And then those apps, which had grown massively in that intervening period, themselves saw this crazy challenge in the last couple of years from the prediction markets, like Cal-Shee and Polymarket.

Speaker 2:
[11:05] Yeah, it's funny because it's like, I don't know, let's say sports beddings or sports books sort of evolved from like the single bet on a game to then they like invented new mechanics with like prop bedding and parlays, and you're like daily fantasy sports, whatever version you wanted to go with. And then let's just say the final boss of that, or the logical end state has become prediction markets, which is bet on quite literally everything.

Speaker 1:
[11:30] And then finally, the dating apps themselves started to move in this direction. I mean, Tinder with the kind of swipe left, swipe right mechanic was definitely an innovator in this regard. And it's funny to think about because, up until quite recently, about a year ago, Bernard Kim, who was an executive, worked with me at EA Mobile, went on to work with Frank Chabot at Zynga, and then through the Zynga merger with Take Two, and very recently was the CEO of match.com, right? Which Match, if you don't know, owns Tinder, Hinge, OKCupid, Plenty of Fish. It's probably 50% of the dating market, if not more. I don't know what the exact number is.

Speaker 2:
[12:11] Yeah, it's a total conglomerate, like in borderline monopoly.

Speaker 1:
[12:14] And that company was, at least for a part of its recent history, run by a gaming executive. And in my conversations with him, was quite explicit about how these things functioned as interactive entertainment to a lot of their user base. And then finally, I think in the most recent example, we've seen adult entertainment in the form of companies like OnlyFans in particular, right? Which have added this layer of interactivity to what has historically been a pretty, I don't want to do if I describe it as a lean-back experience, but of definitely a more passive experience of adult entertainment where they've added all kinds of innovations on top of that. And that's grown to become, at least by my estimate, somewhere around a $7 billion a year business.

Speaker 2:
[13:05] Yeah, I mean, it is OnlyFans. And specifically, I think the thing that we're talking about here is actually like almost a chat and like a parasocial on some level of lean into and talk to. You know, the other one here that we've talked about before is character AI, which is maybe the most like forward of all of this and maybe hints to like the next decade.

Speaker 1:
[13:26] Yeah, I want to come back to, I want to save the AI stuff and come back to it because I do think, I know Matthew Ball includes interacting with AI chat as a form of interactive entertainment that is eating into video games. I kind of disagree with that characterization. In the case of the character AI, I completely agree with you. But I think more broadly, like, no, using a search engine, using an AI chat as a search engine doesn't to me seem very much akin to the kinds of experiences that we're talking about here. But I do think that there are aspects of interacting with artificial intelligences that will potentially encroach on some of these interactive markets broadly.

Speaker 2:
[14:07] We'll get into it, I'm sure, at some point. But just as an aside, I do think Characterized is a little bit of leaning into this OnlyFans element.

Speaker 1:
[14:19] So I guess let's explore a couple of questions before we get into the meat of it and look at some of the numbers. And that is, do you actually think that there is such a thing as a marginal hour for interactivity, that these apps are taking share from games, right? Is there really competition and is there substitution? What's your opinion about that?

Speaker 2:
[14:42] I mean, I think for sure, in that there's, at least for me, I feel like increasingly I have less hours in the day. And I think this is sort of a natural graduation thing for any human is like the older they get, the less time they have for any amount of free time or casual time. And then naturally, as their disposable income maybe increases, they have actually allocated that to very specific types of things. And so my view is like, there's competition for my attention in a million different ways that typically actually goes more towards social media for me than even games these days, actually most commonly TikTok. And then there's like a little bit of, am I actually competing with my call of duty time? Maybe, but it's a little bit more unclear of like how that goes into my like budget, I guess if you want to refer to it.

Speaker 1:
[15:36] I mean, I think like, yeah, that's where I kind of disagree with some of the formulations of this, where they're basically like, somebody who's watched, just watched half an hour of TikTok videos is unlikely to then want to go play half an hour of call of duty. I think that's kind of nonsense on a certain level, but I do believe that, you know, your formulation about share of day, right? Where there's only so much time in the day for entertainment, right? And that that is increasingly under pressure from all of these other categories. I mean, to the extent that Americans now spend 122 million more hours per day on social media than they did 10 years, or even five years ago. The TikTok alone accounts for 39 million of those additional daily hours, right? Those hours came from somewhere.

Speaker 2:
[16:26] Yeah. And I think it's the reality. The most common anecdote I can share is, I'm like, oh, I'm going to go play Call of Duty, or I'm going to go play League of Legends tonight, or whatever. And I like sit down, I finally have a second to breathe, and I just open my phone and I end up on TikTok, and I was like 20 minutes have passed. I'm like, okay, like I really only had an hour to go do something, and now I'm going to go play that. And so that's the most common way that I actually feel that ripple into my daily life.

Speaker 1:
[16:51] So I think we can, I think we could be pretty clear about answering that first question, is there a marginal hour for interactivity in a kind of soft yes, right? That there actually kind of probably is, and there is some level of substitution going on, right? Where some people are actually allocating some of that time that they might otherwise spend maybe not on Call of Duty, but maybe on a mobile game.

Speaker 2:
[17:16] Yes.

Speaker 1:
[17:17] That would be providing that same level of distraction. We used to describe when we were taking Jam Dad Public back in the first decade of the 20th century, we would say, look, there's a lot of crevices in your day that you didn't used to think were potentially avenues for gaming, were opportunities for gaming, standing in lines, waiting for your food in a restaurant, et cetera, et cetera, that you could now actually fill with a light interactive experience. And I think that that in particular is under a great amount of pressure from these sorts of activities where I agree with like opening up Instagram reels or opening up YouTube shorts or whatever, and you find yourself looking up half an hour later going, what the hell did I just do?

Speaker 2:
[17:59] Yes, yes. And it's fun because before this we were talking, you're like, mobile games literally were built on this opportunity. And to bring it back to the beginning of this conversation, it's just like the games were competing with each other for this marginal hour because it was up for grabs. And it was just like waiting in line in a coffee shop or you're on the subway or whatever it was. And mobile games basically went in like eight, the traditional gaming industry. And now it's like, oh wait, there's all these other things coming for that exact moment. Again, taking on the lessons learned around this monetization and retention.

Speaker 1:
[18:36] Oh yeah, using the weapons of interactivity against the game companies in many ways, right? And a lot of times, very much the exact same mechanics deployed against them.

Speaker 2:
[18:47] Yes.

Speaker 1:
[18:48] So, I think the more nuanced argument is whether or not games are actually losing dollar share, right? And I think that that is a place where digging into the data that Matthew Ball and others have provided is interesting, because while revenues are still at an all-time high in the industry, and even though they're down from a population, a gamer population perspective, below pre-pandemic levels even, right? You have to kind of thin slice it a little bit, because it's the place where share is being lost. Like, core gamer markets, the PC console revenue, which is sort of a proxy for the core gamer market, were down 8% post-pandemic year over year. I mean, it's a loss of approximately $4 billion a year in revenue. Now, some of that is going to casual games, but some of that is going elsewhere, right? And, you know, you could make the analogy to cable TV, which hit its revenue peaks and subscribership peaks literally on the eve of its death. And I don't want to go there entirely, but like it is worth remembering that revenue and subscribership can often be a trailing indicator of a phenomenon.

Speaker 2:
[20:05] Yeah, I think, you know, when we were starting a prep for this episode, I just kept thinking about the piece that you and I bring up often, which is the Netflix CEO, Reed Hastings, talking about his fear of cutting into Fortnite, or like he was losing...

Speaker 1:
[20:23] Losing share of day to Fortnite. He literally has said that to me personally.

Speaker 2:
[20:26] Yeah, and that, it's sort of remarkable that he is aware of that. I don't think most people in gaming, I think if you went and pulled the top 50 CEOs of gaming companies, I don't know if they're aware and telling you they're scared of losing you to TikTok.

Speaker 1:
[20:43] I think they're ambiently aware of it in the sense of like, oh yeah, there's this distraction thing going on out there. But I don't think they're aware of it in the same way that Reed Hastings expressed it.

Speaker 2:
[20:53] Yeah, like are they expressing that on an earnings call in the future?

Speaker 1:
[20:56] Reed Hastings literally was saying, like Disney Plus is not my competition, but Fortnite is. And I think if, I would love to hear video game executives expressing that sentiment about some of the threats that we're gonna talk about in this next section. So let's talk about some of those threats, right? Like if these games are losing share, we've mentioned some of them before in passing, but let's sort of dig into some of these numbers so that we can really explain where the video game business is under threat. And I think the first one that we should really talk about is sports betting. Because sports betting is going after an audience that has historically been like the vanguard for the video game business, right? 18 to 34 year old men. And as we said before, sports betting had been highly, highly regulated and concentrated up until right around pre-pandemic times around 2018, when a significant law, the Passport Law, was repealed. And suddenly you went from legality in some very tiny jurisdictions where sports books were highly regulated and like meat space in-person experiences to legality in basically 80% of American states and accessible through what are functionally mobile games.

Speaker 2:
[22:18] Yes, yes. I mean, look, we went from, you had candy crushed in your pocket to you have a full-on casino in your pocket.

Speaker 1:
[22:26] Yes.

Speaker 2:
[22:27] And that is a real competition. And especially for the 18 to 34 year old who maybe is going to a bar and they're watching a game, it is like proven and that is like backed up by mounds of data that it makes it more engaging and a lean in experience when you are going and betting on a game.

Speaker 1:
[22:46] Yeah, literally skin in the game that we use as a colloquialism to describe like having some kind of personal emotional involvement in an experience comes from sports betting.

Speaker 2:
[22:59] Yes.

Speaker 1:
[23:00] Right. I mean, it's a sports betting term. So in 2025, the sports betting market generated $167 billion in handle, right? Or essentially in throughput, betting throughput and skimmed basically $17 billion in revenue off of that number.

Speaker 2:
[23:20] Right.

Speaker 1:
[23:21] Which is a lot of money, right? I mean, we're talking here about 10 percent of the video game business in terms of revenue and almost the entirety of the video game business in terms of float.

Speaker 2:
[23:34] Yes. Yes. Well, it just highlights how much money is going into the scene, but also these are some of the most aggressive advertisers in the world, right? Like they sponsor everything. I'm from a state where it is legal now to gamble, which is Michigan, and you can't turn on the radio, you can't turn on the TV without it just being fully sportsbook advertisements. Yeah. That's just another way of the ripple effect of this attention piece of like, I don't see mobile game advertisements, I don't see any, I don't see game advertisements at all. I get like, go and download this and we're actually going to pay you, we're going to give you a $250 bonus to go and sign up for this. It's just another way that this trickles in.

Speaker 1:
[24:20] The sports teams themselves are incentivized, right? I mean, there's a lot of the valuation increases in a lot of American, and frankly, a lot of foreign markets where sports betting is even more aggressive, if you could believe it, than it is here and even more legitimized. The valuations of sports teams are being influenced by the opportunities around access to betting, etc. It's keeping a whole industry afloat in a lot of ways. I think this is very significant, and again, I really feel like a lot of these dollars are potential gaming dollars that have gone elsewhere.

Speaker 2:
[24:59] Yeah, I mean, anecdotal, but my college friends all just do parlays almost every night just because of a like, oh, let's make watching the games more interesting tonight. And they weren't doing that when it wasn't legal. And so now that it's legal, they're like, okay, let's throw $10, $20 in and let's see what happens. And let's be clear, they're for sure losing money every night. But it's still like hope and dream, which is very different in a like tangible sense than going and playing a game of League of Legends.

Speaker 1:
[25:31] Fair enough. And now we have prediction markets that have come into the form of these unregulated, because even Fan Duel and the others are subject to regulation and actually can only operate in states where sports betting has been legalized. And so for example, we don't have access to it in California, which is amazing when you think about the population and wealth of the state of California. That said, these other companies like Cal Shee and Polymarket have routed around that law by claiming that they're not actually betting markets, that they're just information markets with a monetary component. I'm not entirely sure how that argument flies, but it seems to. And those things are absolutely exploding.

Speaker 2:
[26:18] Yeah, I mean, they basically went after this federal loopholes, maybe not the right word, but they went after it.

Speaker 1:
[26:24] No, it's the right word. It's exactly the right word.

Speaker 2:
[26:27] They went after a federal argument that they were building a futures trading platform. And so I think it's CFTC, I think, is technically what they operate as, which is this like Commodity Futures Trading Commission. And what that ultimately means is they're saying like, hey, we're essentially like a stock market rather than a betting platform. But it gave them federal approval. And so they're legal in every stage. Well, I mean, I think each state will argue that at the state level. But the federal side is cleared. But there's like two very interesting pieces of that. One is like, it's everywhere. It's legal everywhere, technically. But the other is actually 18 plus instead of 21 plus. And you look at the volume, again, most of this data is actually just completely like public, because it's sort of crypto reels, which is sort of hilarious that it's come full circle to crypto. But it's mainly sports betting, which I don't think should surprise you or I, but that is largely where this is going.

Speaker 1:
[27:29] Yeah. I mean, look, we're talking about, it was $44 billion in total volume in 2025. And it looks like it's going to grow significantly in 2026 based on run rate. And that is just a monstrous number.

Speaker 2:
[27:46] I mean, and talk about aggressive advertisers. They are really going for it in this current moment.

Speaker 1:
[27:53] They are totally going for it. And I met the Polymarket CEO at the Sloan Sports Conference, where he was on stage with Nate Silver and some guys from Susquehanna and some others who are involved in this market. And he was a maverick. I mean, he was really out there and had a really interesting perspective on it. I don't think one that would withstand a ton of legal scrutiny, but it was, like from a business perspective, it's like his level of aggression and innovation was really remarkable.

Speaker 2:
[28:24] Yeah, I mean, I think it's why we don't have to get too deep into the Polymarket and Kalshi philosophy, but they largely argue that you would only bet on things that you think you have edge on, which is sort of this information market on some level.

Speaker 1:
[28:37] Yeah, I mean, it sort of reverses what we've consistently considered insider trading in a way, right? Where the markets are typically allergic to and regulated against insider trading in order to protect others from being preyed upon by people who possess material non-public information that would be meaningful to an investor in making a decision. Here, these are dominated in many ways by insider trading, and it's that very insider trading that gives them this weird information component that somehow they are better predictions because they are open to insider information, right? It's very bizarre how that works. This idea that it's gamified news consumption in some way, right? It's like very strange.

Speaker 2:
[29:30] Yeah. And we'll see what the next decade has in store for these, but certainly is riding a wave and growing like crazy, but in this regulated and messy world of gambling.

Speaker 1:
[29:44] And again, just to tie this up before we talk about it in composite, which I think is the most important way to think about this. We talked about the OnlyFans number. I know we actually had looked at it as a potential investment. And they thought about taking venture capital. I can't remember one of our partners. Maybe it was Fenton, went down to Miami and met with the guy who's now dead, actually, the founder.

Speaker 2:
[30:06] Yes, yes.

Speaker 1:
[30:06] And yeah, the estimates that this is doing 7, 8 billion in revenue annually seem very plausible under the circumstances. And the amount of wealth that's being passed on to creators in their creator economy is extraordinary.

Speaker 2:
[30:25] Yeah, I mean, you have some of these creators that are, that are, they post, they'll say, because people are like, why would you be an OnlyFans creator? And they're like, I made $100 million last year. What do you mean?

Speaker 1:
[30:35] No, it's ridiculous. I've seen somebody recently, I saw it on, reposted on Twitter or whatever. Their last 18 months where they were generating like, 10 grand and then 100 grand and then like a million dollars a month in revenue. It was just remarkable.

Speaker 2:
[30:53] Yeah, it's, I mean, it's, I think OnlyFans just says, as a like example of this, I think there is like the adult industry as a whole. I would argue a lot of OnlyFans was largely like, they're going to do the marketing themselves, the creators, they're going to get their share. But a lot of it leans into this like, individual conversations.

Speaker 1:
[31:15] Oh, absolutely.

Speaker 2:
[31:16] And that's like, I think a lot of people look at it and they're like, oh, it's just gated content, you know, pay for a picture or video or whatever.

Speaker 1:
[31:22] Yeah, it is not traditional pornography.

Speaker 2:
[31:24] Yes. No, no, no.

Speaker 1:
[31:25] Yeah.

Speaker 2:
[31:25] It's like, go have a conversation with this person one-on-one. Again, it's likely not even that person, but who cares? Like, that's not for us to highlight. That's far more of their manager maybe doing it. But that is-

Speaker 1:
[31:38] No, it's their manager. I've seen some of these, like I saw some documentary where the top creators have like call centers.

Speaker 2:
[31:44] Yeah, I was going to say, they're like full on call centers and teams handling this stuff. But to that person, it's again parasocial. It rhymes with a lot of the- There was another big venture backs company called Cameo back in the day. It turns out that this might just be a much better fit for that type of experience.

Speaker 1:
[32:08] Certainly sticky, no pun intended. So I think it's also worth thinking about the pandemic cohort in the context of this discussion, right? Because when we're going to talk about the fact that all of this stuff, sports betting, interactive gaming, gaming in the sense of casino gaming, betting, and OnlyFans, and the adult interactive entertainment is part of this. And you sort of mash this all together. And you're talking about during a period of maybe seven years, right, from 2019, late pandemic until the present, this stuff went from a billion dollars in aggregated revenue to $33 billion in aggregated revenue.

Speaker 2:
[32:57] Oh my gosh.

Speaker 1:
[32:58] So that's a $32 billion increase over this period of time. And you compare that to the video game business, the traditional video game business, what we think of as mobile, PC, console, et cetera, grew about $13 billion during the same period. So we've talked about share of day, but now we're talking about share of wallet. And share of wallet is absolutely indisputably under threat.

Speaker 2:
[33:28] Yeah, and look, in a time where distribution is choked, which continues to be a theme of this podcast, every incremental dollar that someone can get, because for most of these gaming companies, it's going back into advertising for this attention, for getting the user, it actually really impacts this industry.

Speaker 1:
[33:48] It certainly does. And I think it's interesting also in the Gamecraft context to think about the fact that these are all really distribution innovations on a particular level, right? All of them, a lot of them are pure platforms.

Speaker 2:
[34:02] Yes, yes.

Speaker 1:
[34:03] And they're attacking from this direction that the industry wasn't really even paying attention to, and yet it's attacking exactly the demographic power base of gaming.

Speaker 2:
[34:14] Yeah, I think I texted you of like, I've long had this thought that Robinhood is actually like a platform based publisher.

Speaker 1:
[34:21] Talk about that, yeah, it's way that way, because I agree with you, I mean, I think you're right.

Speaker 2:
[34:25] Of like, I think of Robinhood almost as a purely a distribution innovation, of like, the pattern of buying stocks was already a thing. That's not, they didn't innovate on that at all. And instead, the thing they went to market with was, we're going to not charge commission. Whereas, you know, E-Trade and JP Morgan, whoever was charging you like, I don't know the exact rates, but they were real. Per trade commissions, for sure. And Robinhood basically took this idea of like, we'll just eat it because it's more important to get to scale. And now, they are like the on-ramp for anyone who's under the age of 30 to buy stocks. I don't like, all of my friends, the first stock they ever bought was for sure to Robinhood, not another platform. And look, now they have 10 products that are doing over $100 million a year in revenue. And so, it's just a perfect example of like aggregated all the demand. And then they built off all of these offshoots for it. So, but I think of almost purely as a distribution innovation.

Speaker 1:
[35:23] Yeah, I think so. So, I think they're interesting to think about in that regard as we turn to this next topic that I want to talk about, which is, in some ways, how can we fight back, right? How can the games business take some of the learnings from this threat and potentially deploy them in the service of better retention, better monetization, really, to sort of win some of these users back to the extent that they've leaked out of the video game business into these adjacencies. And in thinking about this, it occurred to me that the place to start is to think about what happened during the pandemic. Because I think what happened during the pandemic is really important for people in the games business to think about from a broader perspective than people were stuck in their homes and didn't have anything to do, so they played a lot of games. I want to argue that there was a cohort of people, and I have really direct anecdotal experience of this, because I actually had a teenager in this precise demo during the pandemic. And so I saw the way that she behaved, and I think I can validate from my own experience to certain degree that this was taking place. So here's a group of pre-teens and teenagers who were during the pandemic isolated from their friend groups and who didn't have the normal patterns of socialization that kids in their teens and even into their early 20s had available to them in previous generations going back decades, centuries even. And so during these formative years, they had gaming as a potential replacement for socialization that was cut off for them. Gaming was one of the few places that they could have group activities with friends that were fun, that were engaging and that were social, that weren't just like a video call or a group chat or something else, right? These were things that you could do together and that were distractions, but that again had this deep level of socialization. And so this cohort effectively started to view games as things that you did to hang out with your friends, rather than things that you did to progress and complete, which was the whole paradigm of pre-pandemic gaming, right? They were all around, get to level 65, finish the game, right? Like, win the competition, get to the top of the leaderboard. Suddenly, that wasn't the vibe. Instead, you were hanging out with friends. And okay, yes, some of them, like Fortnite and League of Legends, that exploded during this period, did have traditional mechanics, as well as social mechanics. But a lot of them didn't, and just really functioned as hangouts. I mean, you think about a lot of the Roblox games, right? The Bloxburgs and the Brookhavens. It's like, I've watched my kid play Bloxburg, and I'm like, what are you even doing? And they're like talking to boys, right? And it's like, it doesn't have anything to do, like, yeah, okay, they're flipping burgers or whatever in the background, or they're doing something. But it was very lightly connected to the main reason that they were there. And we saw this also in some of the kinds of games that exploded out of the pandemic, the non- AAA games like Among Us or Fall Guys, right? That were really very clearly just like hangouts, right? They were like parlor games. And you can see these new social play patterns actually continuing to be expressed to this day in the video game business. In the friend slop stuff you talked about in episode one, where these sort of light co-op games that are meant to be effectively playable and then discardable. You're not expected to stick around and play them through 60 hours to completion.

Speaker 2:
[39:17] Like the modern day movie ticket type of thing, of like go and go and pay for a night or two of fun with your friends.

Speaker 1:
[39:24] And again, we've seen this coming into the AAA world in the form of co-op in Arc Raiders and altruistic play and co-op play in other games. And I think it's really, really important to think about the fact that this cohort, who now has aged over the last seven years from being early 20s and preteens to being like squarely in the 18 to 34 demographic. I mean, they've aged into that demographic and they've carried a lot of these patterns of behavior with them into that demographic so that they may not actually behave and may not be behaving as we speak like previous game cohorts that look to games for that certain pleasure that may be their parents look to games for in my case, in particular. They're looking for something different.

Speaker 2:
[40:15] There's also a little bit of like, my assumption is that generation also is the generation that grew up with Minecraft and Roblox to begin with. And so they almost like never left until like their first game might have been Minecraft where they were like playing with a friend on a private server or something like that, or they played on Roblox with their friends. And like the pandemic just supercharges those experiences.

Speaker 1:
[40:35] But I do think that it is a behavioral change that is worth really thinking deeply about for those of us in the games business. Because I think it's produced some of the results that we talk about in this podcast.

Speaker 2:
[40:50] Yeah.

Speaker 1:
[40:51] So you think about where we can see this phenomenon potentially expressing itself. Like the like one, one area is like what we've sort of referred to in previous episodes, this live services graveyard where 50% of new live services games lose 90% of their users within the first couple of weeks. And when we said in episode one, when we were talking about how much time it takes to form habits around free to play, most of these games that have failed have relied on old school mechanics where they thought they had more time with the user and they haven't innovated. Like we've had these conversations. We've had this conversation with some of the TikTok founders early on when we were talking to them when they were still musically. And they were like, we need about 30 seconds to figure out how to start feeding the algorithm with your preferences and to start feeding you engaging content. Like they don't waste any time. They don't assume that you're there leisurely to hang out for a few hours. They're like, we got 20 seconds and if we can't grab you in that first 20 seconds, we may lose you. And I think that's a way of thinking about the engagement patterns and the retention patterns in gaming that are quite alien to the way anyone outside of the mobile games business is thinking about gaming.

Speaker 2:
[42:10] Yeah, and look, this might be an argument for like, mobile gaming is the only thing that's going to make it through. And that mobile gaming, I think, is still several years ahead of at least, let's say, the normal software companies trying to do these game elements or interactivity. But mobile gaming is probably a decade ahead of PC games in this context.

Speaker 1:
[42:33] So, very true. And I think it's getting, you know, you also see these levels of concentration. People are lamenting reading the various data repositories that have been published and analytics that have been published in the last couple of months, the sort of year ends from Sensor Tower and from Ball and from others. And they're like, you know, it's like people are just playing the same games. The top decile is playing more, the median is playing less. We're just serving a powered user. There's super high concentration of users on hits. And part of that is, I think, a product of the fact that games are being viewed by this new cohort, this really intensely game-friendly cohort of current 18 to 25 to 30 year olds as socialization environments, rather than as completion or progression environments.

Speaker 2:
[43:33] Yeah, to go back to this live services piece and maybe a little bit of the friends lab side, it is the like maybe primary reason why you see these games being produced as the $10 indie or something like that, because they're viewing it more of this like single two-hour experience or maybe closer to the old school way that you and I would think of games, of like go and play the game through to completion and then move on, but do it primarily through friends.

Speaker 1:
[44:04] Yeah, it's interesting. I mean, you mentioned off mic that when we were talking about this, you talked about how you thought that the phenomenon of one-time purchase over free-to-play was related to this in a way. And it's interesting to think, because it's somewhat counterintuitive, because you would think that if you're really looking to cast a broad net where everyone could come to the table to socialize, you'd want to do that in a free-to-play context as opposed to a paid context. But like you said, it may be more like we're going to the cinema and everybody's going to have to pay 15 bucks for a ticket.

Speaker 2:
[44:37] Yeah, I think Roblox is the purest form of solving the free-to-play version of this, which is obviously covered in the prior episodes. But I think if you're an indie developer, it's really hard to take on the risk to run the live service developments here. Even if you're building for friends and socialization, it's a little bit scary because you need to get to scale to make that money back, which we're talking about here.

Speaker 1:
[45:02] Yeah, you don't want to play the movie in an empty theater.

Speaker 2:
[45:04] Yeah, exactly.

Speaker 1:
[45:06] So are there winners, right? Are there games companies that have gotten this right coming out of the pandemic that have learned from their non-game interactive peers and have essentially figured out competitive advantages in this modern context that we find ourselves in? I would argue that there are. In looking at the few obvious ones and some non-obvious ones, I think that the winners generally treated, and I'll use a 25-cent word here, sociality, right? Which means...

Speaker 2:
[45:43] I didn't even know that was a word when I was looking at this.

Speaker 1:
[45:45] I know. That's what you get from the Gamecraft podcast. A little vocabulary lesson from time to time.

Speaker 2:
[45:49] Oh, it's good. It's good.

Speaker 1:
[45:51] Sociality is basically this phenomenon that suggests that humans like to form groups, right? That humans will naturally form groups. And that this idea has come into gaming in a number of ways. And I think that the winners generally treated this idea of sociality as the product and the game as the container, rather than treating the game as the product and sociality as a feature.

Speaker 2:
[46:22] Yes. Yes. It rhymes a lot with, you'll know maybe the person who coined this phrase, but the third place framing, if you've ever heard that, which is like, there's the home and the workplace, or the first and second place. And then there's always, historically, that's like your church or your bar or local club. And I would argue a lot of these winners look closer to your digital third places.

Speaker 1:
[46:47] I agree with that, but I do think it is really important that they treat that sociality as the product, right? Not as the, as many of the previous iterations of interactivity in the video game business treated sociality as a feature.

Speaker 2:
[47:04] Yes, yes, yes, that's an important distinction.

Speaker 1:
[47:07] It's a really important distinction. And I think when you look at, okay, like, okay, we talked about it in the last episode at length, but Roblox, the games, as you point that out in that episode, are really often just shells in which you do something while you're hanging out with your friends or you're making new friends.

Speaker 2:
[47:25] Yeah, I think the interesting thing to think about here is like what threads maybe you pull if you are Roblox, which we can assume that they are obviously paying attention to the algorithm, what's being recommended. And all signs point towards they're clearly trying to curate towards more of these sociality type experiences, right? We're going to reward the games and recommend the games that encourage you to bring your friends in. Grow a Garden is quite literally a single-player experience. You are only building in your own garden. You just happen to have six of your friends around you.

Speaker 1:
[47:59] Yeah, but it's a community experience, right? Maybe it's a different kind of social experience, right?

Speaker 2:
[48:05] Well, it's like if a normal game developer was building that, they would just look at it as this is Farmville. But because of the way that Roblox is built and the best practices that have come through, it is quite literally a community of like you get bonuses. They reward you for having your friends in the same lobby as you.

Speaker 1:
[48:24] Well, and it's got its own rituals and its own holidays. It's like its own calendar. It's like very much things that communities have, right? So I think it's really interesting. I think it's so obvious that Roblox was even in the way that they've constructed their homepage, right? That it even looks like a social media experience when you interact with it.

Speaker 2:
[48:50] Yeah, I just think it's worth calling out in the context of we're talking about TikTok in this way, and I think it's very clear that Roblox is also leaning into and trying to reward this exact behavior that you and I are talking about.

Speaker 1:
[49:02] And then I think the other winner, and you talked about it in episode one, is this friendslop co-op phenomenon that we're seeing.

Speaker 2:
[49:08] Yes, yes.

Speaker 1:
[49:09] You want to talk about that a little bit?

Speaker 2:
[49:10] Yeah, I mean, in the past year alone, you had schedule one and repo and peak, and then in the past you had Lethal Company and a few of these others are among us. And all of these are these short bursts indie games that is really just designed, it turns out they're perfect streamer games because they're like party games, but they're really like three to six friends, go and have fun, it's really casual, often very funny, like it's usually like an icebreaker game on some level. And these are absolutely competing for the like Friday night or Saturday night experience with your friends.

Speaker 1:
[49:47] Yeah, that was that ball was pointing out in that first quote that we talked about, like, you know, what are like, it is, it really is directly battling back for that audience.

Speaker 2:
[49:56] Yeah, and look, in the tough part here, like the great part for a friends lab game, but tough part for the industry is like, these games require three to six people, or you know, it's maybe eight people. And so you're going and getting your friends. And because the price point is, I will say sub $10, I do think they view it closer to the movie ticket that you and I would take of as a kid of like, okay, let's spend the $8 and we're going to get at least, you know, five hours of fun, I don't know, and certainly some memories from it.

Speaker 1:
[50:27] So I would say Minecraft fits still into that bucket, although Microsoft is doing its best to sort of let it bleed out. But it's still one of the top three most played games globally. It has many of these mechanics and dynamics, right? A lot of it is very lightly interactive. I mean, sure, there's like a, you know, there are modes that are a little bit more PVP, or at least, you know, where you're under threat, right? Where it's not just a passive environment. But a lot of the fun of it for kids, as I've experienced it over the years, comes from that kind of building together and, you know, the interactivity, the storytelling that comes from that experience of just the hangout. And it really, like in the playground and stage sense from our first season, it continues to function very much as both a playground and a stage. And I think that's kept it relatively fresh with the modern demographic that has come out of the pandemic looking to games for a new kind of pleasure.

Speaker 2:
[51:32] Yeah, I would argue it has an insanely rich modern community and third party sort of support, obviously, because it's just one of the biggest games. The real miss has just been bringing that in and like cultivating that at some level. You can compare that with Valve or someone else who brings in the best modders, which we've talked about at length. You don't really see any of that on the Minecraft side. And so instead, it's like, I have to go and look and find a Bedwars server. I have to go and find what these other things are. When it should just like, Minecraft should build a much better version of all that.

Speaker 1:
[52:05] Minecraft should look a lot more like Roblox in that regard, right? And really make the mods and the private server, not private servers, but sort of the accessible servers into first-class citizens in the world, as opposed to these weird appurtenances that you have to go and find out in the world and go to other places to discover. I mean, look, to your point, yes, Minecraft has a lot of really interesting stuff going on. It's just not stuff that's going on by its own doing. It's stuff that's being built by its community and not really registering like in the way that it should be registering with the executives who are running the platform. I think it's an enormous lost opportunity, and I'm hoping that they could get somebody in there to kind of turn it around, because in the right hands, it could be an incredible asset.

Speaker 2:
[52:56] I couldn't agree more.

Speaker 1:
[52:58] I'm going to throw Steam into this list of winners. It's a little bit controversial, because obviously most of the stuff that's on Steam looks like losers, but maybe the idea is that the aggregate of all of this, right, is producing a win for them, like that their exposure to gaming broadly, in the sense that they're now kind of a weird proxy for the games business at large, the non-mobile games business at large, gives them basically an opportunity to cherry pick the winners and promote the winners in a way that is not available to other distribution players in the game. You think about, okay, yeah, it's insanely concentrated. The number I saw, I don't know if this is accurate, but it feels accurate to me that only 5,800 games crossed 100 grand in revenue out of the 20,000 that were released.

Speaker 2:
[53:51] That seems very plausible.

Speaker 1:
[53:52] Seems very plausible. And I think we've seen other statistics that it's super concentrated at the top, that it's multiple levels of Pareto optimality as you get closer to the number one chart position. And I think in a lot of ways, I think that they have benefitted from the trend.

Speaker 2:
[54:11] Yeah, I mean, they're the winner of Friendslap for what it's worth, right? Like, they get to capture all of that element that we just talked about. They're taking a tax on all of that.

Speaker 1:
[54:20] I guess that's my point broadly, which is sort of as innovation occurs and they become a logical repository for distribution for that innovation, they will be in a better position than a traditional publisher who's only got exposure to their own innovation, which may be a lagging indicator.

Speaker 2:
[54:39] Yeah, I mean, look, I think Valve also, depending on how far we want to get into it, Valve also gets to benefit greatly from their own versions of gambling. I would say from a first party side, Counter-Strike skins look the closest to the interactivity and gambling stuff that we were talking about prior to earlier in this episode, where you have full-on economies and marketplaces and true speculation on knives and gloves and they do a phenomenal job of cultivating that economy. And I think a lot of broadly the world is not paying attention, but there is material dollars flowing through that ecosystem.

Speaker 1:
[55:20] I throw Discord in there as another potential winner out of this phenomenon, this sort of migration to other interactive experiences, forcing this cohort into a different kind of gaming. I mean, they didn't even bother with the play experience, although they have launched a few experimental games here and there in the platform over the years, but they went after the infrastructure for being together while you play and before you play and after you play. And it's one of the only bits of gaming adjacent infrastructure that grew its relative position during that attention drain era, right? During the recent attention drain era. Because it's the piece that glues hangouts together when the game itself becomes interchangeable, right? If what we're experiencing in the Friendslop games or in other kinds of games, the Roblox like games is a lot of churn of experience on a larger platform or within a larger context, then what becomes constant is that friend graph that connects people together to go and take on those experiences. And I think it's become essential in that regard. And you think about closing in on 100 million DAU, 200 million MAU, it's forever game sized at this point, right? It's like it's now got to kind of platform levels. And we have a CEO, obviously, I'm self-interested because I'm still on the board and an investor, one of the first investor. But we now have a CEO in there in the form of Hu Maum, who comes from King and who really understands a lot of these mechanics and in a fundamental way. And I would not be surprised to see Discord starting to adopt some of these mechanics in the social context, kind of like these companies that we've been talking about have done in other contexts, in social media or betting or other, other areas. And so, essentially, bringing some of that gamification back into the fold in a context where it's adjacent to gaming rather than about gaming itself.

Speaker 2:
[57:26] Yeah, we talked about the second screen sort of movement when it came to sports betting to sports. And I think Discord is that to games. If you're sort of weirdly, Valve left this opportunity completely open with Steam. But, when you're bouncing between these games, you need to have a unified messaging happen in voice chat. And it's funny because I think a lot of people look at Discord, especially if you're not in gaming, and you think of it more as a Slack competitor. When in reality, so much of the magic is going into that voice chat with your friends. And hearing the magic of, oh, someone joined, who's in the room with you? And that is really where this continues to come from them, especially from this attention element of like, I forget if it was leaked or if it came from Discord, but during COVID, when Among Us was blowing up, I remember seeing this chart of like, Discord basically growing directly with Among Us as a like chart of like, of course, like of course that's gonna happen. I was like, where else are you gonna do your voice chat with your friends? And again, you probably wanna hang out after you're done gaming anyways, or when you're sitting in the lobby, so.

Speaker 1:
[58:39] It's very interesting. And then you know that I will take any opportunity to express my admiration for AppLevin. But I do think that AppLevin is a weirdly unlikely winner of this attention dispersing across all of these interactive categories, right? It's like when you see this atomization of attention where suddenly it's not about this, you know, concentration around cable television or broadcast television or whatever, you knew that if you ran an advertisement during NBC's Thursday night primetime block, it would be seen by X amount of people like, you know, there was real predictability in terms of advertising reach in those days. And now, over the intervening decades, advertising opportunities have gotten atomized and you know, Facebook did its best to kind of provide aggregation and for a lot for a while, you know, for a decade, probably, Facebook really kind of was the champion of like, it took over the mantle from broadcast TV and cable TV that you could advertise on Facebook and get that kind of reach. But now, with all of the various things that are going on with the, with the platforms that Facebook itself is dependent upon and beholden to, they don't have that same ability to get the information that they need. That's so vital to advertisers and that information now has dispersed throughout all of the social media in a way. And what App11's thesis has been is, let's re-aggregate those a level up. Right? And essentially, it's the routing between all of these platforms from an advertising basis that they've solved. And I mean, the proof is in the fucking pudding. I mean, that company is just a banger. It's crazy, right?

Speaker 2:
[60:26] I mean, well, I mean, I think it's even more telling that they sold their, their games business off.

Speaker 1:
[60:31] Yes, you're absolutely right about that. Talk more about that.

Speaker 2:
[60:34] Yeah, I mean, look, it's like a lot of people have realized, but when Apple 11 went public, it was like 50% of the revenue was from their first party games that they bought. You know, they had aggregated a bunch of these mobile games. And the lot of what they were telling the street was like, no, no, no, we're not a mobile gaming company. Like, don't get it twisted. That was just like to get training data and build our lookalikes and make sure our ad platform works properly and do testing. And at some point, they realized like, what are we doing with this mobile gaming thing? We've got what we need out of it. And instead, like, let's go and service the entire industry. And that has completely sold off. I actually think Triple Dot acquired it. And it's go all in on the attention and distribution side.

Speaker 1:
[61:20] So cool. Anyway, I love this company. And I do think oddly you could position them and suggest that they learned the lesson from the last seven or eight years that the games business failed to learn.

Speaker 2:
[61:32] Yes, yes. Well, it's... We've talked so much about this current moment, these interactive platforms, whether it's social media or these gambling apps, which is, it's all trying to improve retention and monetization. But the reality is the gambling apps and the social platforms have better monetization by default. And their whales look fundamentally different than your standard mobile game or box good. And if that continues to be true, they're just going to continue to eat into this world. Like, we know that if Meta gets a net new user on Reels, they're going to make, I don't know, $200 a year on that user because they have such a fine-tuned way to do their advertising business. And this is, again, AppLoving gets to do the same. They don't care about the net new game that's being made here. They're going to go get incremental dollars.

Speaker 1:
[62:25] Yeah, the dating apps are the same way. It's like, you know, if people are really on there to find, you know, whether a life mate or a short-term partner, that incentive and the incentive to spend against that is extraordinarily high. And there are antecedents that people have spent on, you know, dating in the form of, you know, like buying gifts, buying flowers, buying dinners, buying experiences that they can siphon a certain amount of that kind of already pre-booked spend, if you will, in the mind of the user, right? And obviously adult entertainment serves a similar kind of purpose in the sense that, you know, there's a high willingness to pay for that particular kind of experience. And again, it has its own historical antecedents in less palatable and a little bit more, you know, fringe activities. But nevertheless, it's there. And I think all of that stuff, as you say, is a real threat because it is not only long established human patterns of behavior around places that you're willing to spend money. I mean, gambling, as you pointed out, is a very important one. Like that thrill and that like idea that you could potentially beat the house and win money, as much of a fantasy as that is and as unrealistic as that fantasy may be, it still exists and then and there's a and again, it goes back millennia in terms of the human experience of gambling. So you're fighting against really intractable patterns that have now found these incredibly high dopamine fast reaction expressions in some of these applications that are now on the market. It's like we've taken and distilled a millennia of activity in human activity down into these 15 second burst kind of acti... That you could get now with a mobile platform that's in your pocket. And that is a threat we should be very, very aware of.

Speaker 2:
[64:34] Yeah, it's funny. Like it's almost gaming needs to learn monetization from those guys. It's actually, it's just these guys are all learning the retention tricks. And if they get even a percentage point better at retention, then it's going to have meaningful impact across the entire industry.

Speaker 1:
[64:51] So I guess we'll finish this episode since we're now past our hour by, I'll ask you the following question. Do you think this is structural? Like, is, is, is this, uh, is this audience temporarily off on a Frolick and detour and will they come back or, or is this structural?

Speaker 2:
[65:12] Uh, I mean, you certainly can't just hope and pray that they're going to come back one day. Uh, and that, that, that is for sure. Like I, you know, I, I think it's going to require some radical change in first principles thinking. And, you know, it's in the same way that you have prediction markets or something that new come into the market. My assumption is games will solve it. Uh, games have been resilient. And the thing that I'm conflicted on, and I don't want to go too off the rails here, is how interactive these experiences actually will be in the future. Right. Um, in, in that we are going to say TikTok is interactive, but is a game of the future that is the best performing game. Is that going to look closer to an idle game? Is it like, is it going to look closer to Grow a Garden? Or is it going to look closer to what historically we would think of as Mario? And I would put almost all of my eggs in the basket of looking closer to the former than the latter.

Speaker 1:
[66:04] Interesting. I agree with the fact that it is structural. And I think that it is something that we really need to pay attention to, because this attention drain, this idea that we do have marginal hours out there, and that we're spending less time in games, is something that I actually feel as a consumer of games, right? I mean, I think it comports well with my experience, which is, like we talked about it in the first episode, where like how much less interesting a lot of the offerings that are coming from games companies feel in the current environment, and how they seem very throwbacky, and they seem very non-innovative, and not fresh, and they're really going back to the well, trying to draw water from these very same users who they've gone to again and again and again. And I think in that regard, that threat becomes more acute, because when you're not innovating, and these companies at the margins that have the ability to tap into these deep wells of human emotion and behavior that you don't have available to you all the time, it puts even more intense pressure on the need to innovate from these games companies. And the companies that we've seen that have innovated, the Robloxs, the Discords, these Indies who are doing the Friendslop content, Arc Raiders, et cetera, are being rewarded for it. And I think it's worth paying attention to why they're being rewarded for it.

Speaker 2:
[67:37] Yep, couldn't agree more.

Speaker 1:
[67:40] All right, and with that, let us close this episode. Thank you all for listening through to the end, if you've made it this far. And we'll be back next week with a new episode on the Turkish puzzle and match three market, which is one of the most interesting and dynamic new gaming markets arisen in the last few years, and one that I have some personal experience with. It'll be really fun to tell those stories, and we'll be back at you. Thank you so much.