#467 – Tim Sweeney: Fortnite, Unreal Engine, and the Future of Gaming

26:38And the sky was the limit. And I think this is the age we live in now. You don't have to be an industrialist, manufacturing, physical product, anybody who builds anything digitally. If it's good enough, you can reach the entire world and build the next Microsoft or matter or Apple or Google or Epic Games. It's such a cool origin story though. You start off building a text editor. So you're looking at this project, you're playing around with it, you're building up the tools, it's an inspiring moment because a lot of us start off building a project and allow yourself to see the potential pivots, the potential trajectories that can go is really nice to sit back and allow yourself to be bored.

27:26I'm like, ah, I'm going to go this way. I mean, that's like a crossroads. You came to a crossroads. I mean, you built, you know, compilers, you designed your programming language, you built compilers, databases, all these things you mentioned. And you started building a text editor and they here came to this crossroad. I'm gonna make this fun. And then from there, one of the most legendary gaming companies was created. It's kind of cool, like that. That's an aspiring thing for developers like be open to the possibility of creating something you didn't plan to create. It just go with it, right?

28:05That's cool. Yeah, and it was a bunch of learnings, Emerge, really quickly there. The neat thing I did with CZT was I didn't just release the game. I also released the editor with it. I built this tool so I could make these ZCT boards that people could play, but I also gave it to all the players themselves. And, you know, like 30 years later, I still run into people, you know, when I go to a gaming industry event, it was like, you know, I grew up playing ZCT. And, you know, here's an adult who grew up playing my game. And it was because it enabled anybody to become a creator too, had, you know, to sell board ed or, and it also had a little scripting language, So you could learn a little bit of programming in it too.

28:44It really set a formative principle of epic, which was that the company's mission is to make awesome entertainment, but also awesome tools, and to share those tools with everybody so they can build their own amazing things too. When we got into Unreal Engine a few years later, the interplay between us building a game and us building tools that were widely used by others was a critical part of that. And I think that's the sole reason that Epic has been massively successful. And actually the reason that we've survived all of this time is that by serving both creators and gamers, we've been able to weather the ups and downs of the game industry.

29:21It's a brutal place for companies. We've been able to survive very financial downturn and sometimes the engine's been funding the business because we didn't have a game and sometimes the games have been funding the business. and it really set a principle or culture that's persevered and is continually bought to their forefront. But on the editor front, there's such a fascinating philosophy that you always allow people to create their own worlds. You have an engine from which you simulate the world that the game is in. You have the actual game and you also have the freedom for creators to create various, you know, and Fortnite islands of their own.

30:04So it's like with everything you ship, that freedom to create is always there. That's really interesting. Yeah, and something we aim to do more and more fully over time. You know, in the course of building Fortnite, we've built a lot of other tools. They're useful for us too, because it's not just a game powered by Unreal Engine, but it's also a social ecosystem where people can make friends and voice chat and get together in parties. We've opened up all of those social features into Epic online services, and we give them way to all developers for free because we all benefit from growth and that user base.

30:37And, you know, our goal is ultimately to build the company's products and the same technology that we share with everybody else and to hope that foster a bigger and bigger ecosystem over time or everybody benefits. If we could just linger on the 90s. So you said both in boards. Maybe you can explain what that's like and also explain the birth of the internet. What that was like. What was the internet like in the 90s? So the internet is a funny thing. It started out as this defense department research project called the ARPANET, the Advanced Research Project Agency Network. It was kind of like this revered secret thing that became more and more open as they connected the universities.

31:19The university is connected to the internet in the mid -1980s. prestigious institution with access to computers, you could get on there, but we can simmer back then. We just had these modems. This thing you plug into your phone line and it dials up on phone number and then, you know, it sends Wild Sound effects over the over the telephone line to send digital signals back and forth. And these were really slow. Three, you know, the first modem I had was 300 watts. That means 30 characters per second of data. So you're like sitting there watching a sentence like slowly emerge character by characters.

31:53You're going online. But yeah, that's how we got online and we talked with each other. So you dial up to a local bulletin board. It'll be run by a person. Usually they have a computer or two sitting in their kitchen or something that's running the bulletin board and they have a small community of a few hundred users. All competing to connect to that one phone line. It was often busy and you couldn't get in and the more popular wooden boards were hardest to get to. Nice. We had all kinds of communities develop, you know, and you could see like there was the programming communities where people talk about programming.

32:21There was the news and events, you know, community. I was lived in the outskirts of Washington, DC, so that was like a big thing. But then there was like the pirate community where they're sharing pirated Apple games and you know, very different community ethos and mantras out there, but all, you know, all really nice and also very small. These things, the Spodenwords couldn't grow as the size of Facebook, because your phone line couldn't take that many calls. And you know, then later in the 1990s, the internet, which had been fostered in these colleges, started opening up for the public and anybody could connect to it.

32:56And suddenly the world took on a life at its own. It became much, much easier to reach a global audience faster. And you would start shipping games to the internet, which is a bit of a crazy thing to do, which is just supposed to have like a physical copy, but to post on the internet is pretty innovative. Even share -wise, pretty innovative. Yeah, it's been a funny transition for the game business. epic start out making share of games distributed digitally. But you know, it is the first 3D games took off like Wolfenstein and Doom from Id Software and then Unreal from us took off to reach a huge audience of millions of users.

33:34We had to go into retail stores. So we worked with a retail publisher and they made a box and put CD -ROMs in the box and then the world started transitioning back to digitally. Like and that transition didn't start well right? The initial transition of gaming to digital was all bit torrent, all piracy. And the other horror stories about games that would, you know, sell like a hundred thousand copies but have two million users because most people pirated it. And then, you know, Steam came along and introduced digital distribution and made digital distribution of legit games, so convenient, that most players moved away from piracy towards that.

34:13and their practices were then followed by others and the early digital industry took form. Yeah, it's fascinating. Pirates do lead the way for innovation. The same is the story of Spotify. Basically, I think most people, when they derive value from things like video games, want to pay for those video games, they just want it to be easy. And so that, the same thing with music with Spotify. fine. But maybe just staying on the 90s, there are going to be a lot of indie game developers who listen to us talking today. Can you go back to that mindset and try to derive some wisdom and advice to those folks when you were just a solo developer, maybe just a small group of people creating your early games that eventually became this huge gaming company, but in the early days, what were you going through, what were the ups and downs, what did it take to stay strong and persevering?

35:18Well, one of the critical things that Epic always worked hard to do was to make something different that nobody else was doing and to try to satisfy a small audience rather than competing globally with the game jugg or not. Back in the 1990s, Epic was new, but electronic arts and Activision and the other big publishers had been around for a decade and they were huge companies had giant retail distribution networks You know if I tried to make a game and then commence them to publish it I doubt I Could have had a chance and I doubt that if even if I made a successful game that I would have made much money from it though They might have and You know, so they're really unique angle to epic them with shareware and that was just the idea that if we distribute our game differently then we can reach a much larger audience than these bigger competitors by virtue of this first episode of the game being free.

36:10It was kind of the advent of what later became free to play. And the logic of that is just as true and now as it was then. If the thing is free and anybody can get into it, it's kind of spread from friend to friend. These people bring the, you know, their real world friends into into the games they're playing and that, you know, have the opportunity to build up a community around that. So the other lesson there was minimize the friction of people getting into your game. Make it easy to get into and make it fun. I think the other... Well, I was very fortunate. ZZT was a funny game. It was not like much like any other game.

36:45It was a... had much worse graphics because it was all just text characters, smiley faces, and you know other Greek letters and things participating in this game simulation. They were kind of iconic representations of characters rather than real ones and And this was decades into the age of real graphical games with interesting graphics. And so it wasn't even trying to compete in that area, but it was able to compete in a different area, which is that it wasn't just my, the three games I'd made and shipped as a trilogy that were a successful and drove this success of the product. It was the fact that I released a net or there's a whole community around it.

37:21And you see that trend has repeated itself. like there was, you know, ZZT was one of it. Before that, there was Bill Budge's pinball construction set. That was a 1980s Apple game that let users build their own pinball tables. And since then, you've had some of the world's most successful games, Fallout at Path, like Minecraft. You can build your own stuff, Roblox, Fortnite Creative and Unreal Editor for Fortnite. You know, games that become platforms for other people to build stuff was real opportunity. I think the big thing to realize as for indie developers right now is there's massive, massive competition in every major genre.

37:57It's very unlikely that unless you just happen to be the world's best at a particular thing that you're going to release a game and then existing highly competitive genre and when a much better chance of success is in releasing something that hasn't been done before, being really unique and reaching an audience even if big or medium size or small reaching an audience and becoming really popular with that, making some money from it and being able to reinvest and then expand towards your ultimate dream. I think the one shot go from idea to commercial success at massive scale is a lot less likely than the multi -step process of continually build better and better stuff over time until you get into a position of excellence and constantly try to do something that others aren't doing.

38:45Yeah, that's right. Because if you look at every market. There's a few markets where the current leader came late to this pace, usually because the prior leader failed to horribly. But most of the time, the company that's succeeding and winning in a market is the first or second entrant there. They've just continually buoyed their success. Great advice and fascinating. But on a human level, was it lonely? Was it scary? You sitting there as a developer. I'd say it was the opposite of lonely because the thing that spurred me to actually release this was seeing kids playing the game and my neighborhood and having fun.

39:26I mean, this is really good. Seeing them enjoying it and laughing and pointing at the screen and getting together and just wanting to play more. And the human element was always pervasive. Not only received orders, but people would actually write letters. We wrote letters back then in the 1990s. People would say, how much they're enjoying the game and how their kids were playing the game and so on and so on. So they felt very connected. I think businesses have to make scary decisions because you're spending potentially all of the money you have to take a shot at something that you're not sure will succeed.

40:03I was very fortunate starting a business like this because it didn't really need any capital. Well, the capital was, well, this several thousand dollars in computers I bought by Mowing Lons. And it wasn't much risk. If that hadn't succeeded, I guess I could have figured out how people get mechanical engineering jobs and pursued that. But once it took off and once the order started coming in and people started writing letters saying they're enjoying the game, I knew I was going to go all out and try to build a company there and succeed. And that was like going to be my big goal. So, I'm sure people know, but Epic Games was created in 1991 and went on to transform the gaming industry several times, one of which is Unreal Engine.

40:47So let's talk to the origin story of that. You said that one wolf and Stein and Doom came out. That changed everything. So take me to that moment. Yeah, that was a very interesting time. Epic, after my first couple of games that had recruited developers, usually college students, high school students who were just working on their own had real skills but didn't have an outlet for their work. Epic had been matchmaking the best artists and programmers together from all over the world. Jazz Jacker, it was Cliff Luzinski, high school kid in California who made a really cool adventure game together with Ariane Brucie, a demo coder from Holland who would make amazing graphical stuff and to build a 2D game engine.

41:30It connected them together in a musician Robert Allen and California and they were by telephone and modem and so on. We were building these little 2D games and having quite a lot of success. There are a bunch of people making thousands of dollars a month while they were still students and royalties from the games the epic was kind of producing and by coordinating people with people and publishing through shareware. And that was All going great. The company had a little office and we were copying Floppy disks and mailing them out. But when Wolfenstein came out, we realized the future of gaming is going to be 3D.

42:08There have been a lot of experiments in 3D before that hadn't been great. There were 3D renderings of Maze's that were not in real time and you were always looking north -salt east or west. And then there were vector graphics with a little wire frames moving around and things, but you know, Wolfenstein was the first game that was fast enough, you know, running at 30 frames per second. It really felt immersive. It felt like you were there. Like you were in this castle Wolfenstein fighting Nazis. And that was a really amazing and immersive experience. 3D graphics were pretty primitive. Then it's off -drafted, shockingly fast with Doom, which was much, much more capable 3D and Gen.

42:46which had stairs and though it was still what we call two and a half tea, it was environments that were very realistic textures that were very realistic. You know, a form of lighting that was approximate but incredibly realistic and it such great artistry and sound effects that it fueled completely visceral and real. You might look at it today from our point of view of a modern and you know, a game player with, you know, 20 tariff ops or computing power in your device and say, oh, that's not very impressive, but it was amazing at the time. I mean, for me, just decided to pause on that. I think Wolfenstein was one of the most amazing moments of my own life.

43:29Just being able to, like you said, in real time, move about a three dimensional world. I just remember just like, just moving around just in like, what is that feeling like? I mean, you feel transported into another world. You feel that you're there, yeah. Especially when you turn the lights down in your room and you turn this sound up on your speakers and it will scare you. And you'll feel like that fireball that's coming at you is gonna kill you. That was an amazing time because we hadn't experienced that before. There was nothing like that. You'd watch a movie, a scary movie, or whatever. It's just this thing that was happening.

44:13This was you, this was you in a 3D world. So how did that change epic? This realization that the future of gaming is going to be 3D. Well, at first I was really depressed. I think it's, yeah. The wizardry of Doom especially, it was so incredible that I gave up on programming for like six months. I was like, I don't know, to be able to compete with this. I have no idea what we're gonna do. We just keep making 3D, 2D games and hope that the business goes on. But that was the nature of CarMax Wizardry. He had done the things that were not just one innovation leap ahead, but a dozen simultaneously.

44:48Interplaying in a way that you couldn't pick them apart into their component pieces. But funny thing happened, Michael A. Brash, longtimeer in computer graphics, wrote a book the techniques for 3D graphics and texture mapping. He wrote some articles in a in a lot of the programming magazines of the day and explained it and showed assembly code to do texture mapping, drawing these cd graphics on the screen. And it was actually really simple stuff. I was like, oh, I can do that. And so a bunch of us at Epic independently went off and wrote our start writing around 3d graphics code to figure it out.

45:24And we found at one point we had a number of people dabling and listing different parts of it. And at that point we decided, okay, this is 3d graphics and 3d gaming is going to completely change the world we need to go all in on this. And so we took the best people from our best 2D game development teams and put them all together to make a 3D game. We didn't really know what we were doing at the time. None of us had ever shipped a 3D game and most of us were still learning, but everybody was like trying different disciplines to see what they were best at. And it was a combination of a bunch of people who came together to make Unreal.

45:56I initially volunteered to make the 3D editor for the thing and James Schmott made Epic pinball. Epic pinball. Now that was an crazy game. This was one of the 2D Sharrow games. He made it always in college and he was making like $30 ,000 a month from you know the royalties from this game because everybody had wanted an awesome pinball game. It's massively successful but it was he was a multi -led disciplinary person. He wrote the code for the game, the art for the game, and did basically everything and and the code was 30 ,000 lines of assembly language. And so he was initially going to write the 3D engine and was going to write the editor and sent me to his code so I could integrate into the editor and it was like just a pile of assembly code.

46:40Why did I just write this myself? And so James and Seth started going off and thought 3D model was in 3D animations using the tools at the time and so Cliff had done a lot of design work and built the levels on jazz jackrat went off and started learning basics of level design and so I was riding this ed or in Cliff Blisinski was customer number one for it. Starting to go off and build levels and James Schmotz was joining awesome creatures, sending them to me, I get them in employment and game, and we brought in an animator to bring them into life, and we brought in more and more people until at the peak of Unreal one development, we had about 20 people working out, which was a huge team for the time, and it was a really stretching epic signets, nearly to the breaking point.

47:20We barely survived and almost ran out of money a number of times, but somehow we always pulled through. It was a crazy project because it was three and a half years of development in the game that we always thought was six months from shipping. And it was like three and a half years of 70 or 80 hour weeks for most everybody working on the project. Not even knowing what problems we'd need to solve next because we were selling our rest in the current ones. were there moments when you were losing hope that this might take too long in the company will run out of money? We were always very financially stressed, so I was continually worried about that.

47:59I had total confidence that we'd work out all the technical and artistic problems because we knew the pieces and it was largely a matter of typing code and solving some problems. And kind of like we knew we could ship a version of it and the thing that was continually really interesting was the ongoing discovery of new techniques as we went, you know, because at the time Quake had shipped it had a little bit of dynamic lighting. Unreal really pushed dynamic lighting much higher than anybody else had done before. Vincolored dynamic lights with some shadow casting capability is statically or moving lights without shadows and figured out how to do volumetric fog.

48:42So you have foggy areas that were full of lights and you get the kind of glow of the lights standing out in the fog and affecting the appearance of the level. All of them. Amazing techniques came together to build a game that made a number of leaps ahead of the state of the art at the time. It was really crazy but I think most companies wouldn't have survived that, but the sheer talent of the people involved made it possible. Epic has often done things that most companies would have failed at, and we succeed, like not because of awesome management or awesome planning or awesome financing, but because of the sheer talent and willpower of the people involved to make it happen.

49:25What about the interdisciplinary aspect of it? Like you said, sort of artists, engineers, programmers, designers, all of them working together. What was that? The 20 people, what was the dynamic they're like working in St. Hours? What was it like to sort of make a team like that work together well as an orchestra to actually deliver the game? Yeah, that's one of the really unique things to existing gaming. Not in normal big tech companies, which are just engineering and business driven, but gaming really does require all the best people across all the creative disciplines working together. And Epic could grow organically by recruiting people with awesome talent.

50:13We always had a limited budget. We could never pay to bid up people with salaries and hire them way by paying them more. We just had to find awesome people who were at the beginning of their career and put them together. and everybody was very new to this and didn't have any assumptions about how companies worked. And so you put all these people together and it was really a constant interplay of talent as people were learning how to work together as a team. Nobody had management experience. Most people hadn't shipped a game before they were with Epic. And we were figuring out as we went. But it was a constant iterative cycle.

50:51We'd make several new versions of the game every day. We, a new compile, introduce a new feature or fix some bugs, get the artist, artist, improve their levels, continue building stuff, and then we see what they're doing in their levels like, ah, I see what you need now. We'd constantly be improving the tools and just the iterative process and the speed at which that improves products is the critical element to success in games. The slower the iteration cycle, if you make a build every week and you go through one iteration every week, you're going to be way, way, way worse by the end of your project in a game company that makes new stuff every day.

51:26And that was the magic that happened together. And there was really nothing but passion and everybody's individual dedication to it. It made it work. I heard you still program, but how much programming are you doing back then? You mentioned hours, probably insane hours. So it'd be almost fun to talk about your setup. What a day in the life of Tim Sweeney in the 90s when you're building up real look like. Well, we do all gravitate towards a schedule, a work schedule that maximized productivity. And that usually meant waking up late, I usually get to work around noon, I usually work till like 2 a .m.

52:07or so, 3 a .m. sometimes. And I didn't have anything else going on in my life. So there's always just work and sleep and occasional eating. and I found I always needed eight or nine hours of sleep a night. Without good sleep, I would just become a zombie and wouldn't be nearly at my best. I always needed to get sleep, but I didn't need anything else going on, so the programming itself was so energizing and throwing. So it was a three and a half years of that during the project. I mostly spent programming, I'd say probably 60 hours a week of programming five hours. We coordinate with other people and iterating and you know sitting down with them and looking at what's going on in screen and figuring out what they needed.

52:51Only five hours of business stuff. You know there's a good division at labor then. I think didn't have a big executive team but it was like basically myself running the technical and development part of the company and marketing running the business part of it. Doing deals and you know maxing out his credit card and going around the world doing, Bringing in sources around to keep the company funded what programming language are we talking about C Could you mention there's this pile of assembly? Did you what what was your decision in choosing the programming language that would That unreal engine would be written in I'd grown up learning with Pascal as my favorite language um in order to just Get maximum performance and get the latest operating system features.

53:35I had to move to C for my second game, Joel of the Jungle, the Nintendo style platformer. So when I started Unreal Engine, it was on 16 bit windows using the C programming language. And over the course of the first year, it moved to 30 to bit, you know, 30 to bit using these DOS extenders and then using Windows NT. And I moved to the C++ language. And just because it simplified the code so much, went from a really complicated pile of code to a much simpler one, making that transition. And so almost the entirety of Unreal Engine development, about two and a half years of it, was all on C++ 30 -tibet.

54:15Completely stay -of -the -art then. Like, 30 -tibet protected mode was kind of a magical thing, having come from the days when computers were much less reliable and crashed all the time. Yeah, and turned out to be a pretty good back to C++ out of all those languages, ended that being the dominant sort of performance oriented language that survives through this day. Yeah, yeah. It's because it solves all of the problems at scale, often through manual pain, but always solves them. And love other languages do better in love, like theoretical aspects and are better for some usage cases, but you can't do everything and that's very limiting.

54:56All right, so ridiculous questions, but like, did you have one monitor or two monitors? We pick you on the keyboard. Okay. We pick you on the chair. What are we talking about? Let's paint a picture. Okay, I went through a big transition there. So I started out being pretty lazy. I'd had a bunch of like, I bought used computers because you'd often get them at half the price of a new one. Maybe good enough. So I had this old 46 I was developing on. I guess it was a 15 inch miter at the time. It was all, it was a poor workstation setup, but it was very economical. And so as we started on Unreal, I realized that I had to write a ton of code.

55:37I had to write at absolute maximum productivity. So I had to rearrange my entire life around delivering maximum output. And so at that point, I realized like actually spending money on getting good equipment was a good investment. And we're not talking about millions of dollars here, or billions if you're building a GPU farm. We're just talking about buying some basic hardware. And so I bought the biggest CRT you could buy at the time, because this was CRT here. It was 24 inches. It weighed like 100 pounds. I had back pain for a week after I installed it, but it got me 1920 by 1200 view in 1996.

56:14In 1996, that was pretty cool. So I upgraded to a 90 -meggerhertz panium and Dillab programming on that. It was on the 90 -meggerhertz front. These were the main consumer computers at the time, and I'd optimized the Unreal Engine software render on that, which was, you know, the Pentium was the first super -scaler architecture in consumer computing. It could run up to two instructions at a time, and if you wrote your assembly code very carefully, you could get absolute maximum throughput. I decided it got in my texture mapping that that code down to six CPU cycles, comprising 11 instructions. And that was required for every pixel on the screen.

56:52That was just enough performance to deliver that. But it all came out with the, these new workstations and until I just launched the Pentium Pro, the first out -of -order processor. And so I basically bought the absolute maximum configuration that money can buy. It cost $7 ,000. I had a gigabyte of memory in 1996. And 200 megahertz CPU. So it tripled with the speed of compiles and just made me massively more productive. So that's why I was using throughout Unreal Engine development and Chipped With That. By the way, people in the 90s would have been blown away by this work. I love it. Yeah, yeah.

57:30Were you in writing? Were you considering the hardware much? Was there a sense like, so, you know, for people don't know Unreal Engine rendering, I guess, is all software. It doesn't use the hardware. But will you try to optimize it as I understand maybe you can correct me but like will you try to optimize to the hardware at all? Well At the time so we did most on Rewinge development before the first real GPUs came out and You know the 3D effects food who want the first GPU that actually delivered serious performance compared to software rendering The first GPU. That was really gainful Came in the end of the development and we support it really quickly, but it was not the target on And so development was focused on just building the two parts of the engine, right?

58:15There's all of the gameplay systems that manage the simulation and physics and so on. That's all written in very high level C++ code and maintainability is as much of a goal as performance. Because we had to build massive amounts of systems over time. But one thing that was really about on Aquas graphics, that the cost of rendering a single pixel was really high. And so you had to do everything you possibly could to optimize the rendering of pixels on screen. And so we were talking about how many CPU cycles, when you say your CPU runs at a gigahertz or whatever, it's a billion instructions per second.

58:54How many instructions do you need to run to get a pixel on screen? And so there was a constant challenge to optimize that down. And there was also a competition among all of the graphics programmers who'd often send emails like bragging to each other about what new technique they've discovered to try to get the cost down. Abrash's original articles took like 12 CPU cycles to render a pixel. And everybody else had figured out how to get it to down to six, or sometimes even four cycles. And that involved lots of different trade -offs of caching and memory hierarchy and so on. This is like a magical time where a human could actually understand exactly what the CPU was doing under the hood, and could write code exactly targeted that.

59:35And that's largely lost now. When we talk about optimization software, now it's largely about heuristics. And statistically, this memory access is likely to hit the cache. And this algorithm is faster than that algorithm. You can see PUS now have such advanced out -of -order execution that you really can't micromanage what's happening on an instruction -by -instruction basis. You can only manage the aggregate performance of code. And so there's kind of this law start. Some people mess it, some people don't, in which the programmer had absolute control over the machine and could work miracles. In special cases, if he tried.

1:00:14It seems like there's still value to that art when it comes to GPUs and ASICs. So basically trying to understand the nuances of the hardware and how to truly, truly optimize it, whether it's from machine learning applications or for ultra realistic real -time graphics applications. Is that true? Yeah, that's absolutely so. The optimization problems have just moved around. In a system like Nanite, the virtualized micro polygon geometry system that Brian Karris, a brilliant engineer with Hapik built, was just one of those multi -year optimization efforts that required understanding, him understanding everything from the highest levels to the lowest levels of the hardware to figure out how to make this breakthrough technique work in a way that was actually maximum performance on TPS.

1:01:09And so Nanai is the system will jump around in time. That takes us to today with Unreal Engine 5, this system that is the geometry. Yeah, so rendering the world sort of geometrical. There's many layers to this, we'll probably talk sneak up to each of those, but one, you have to actually create the geometry of the world around you and do that in real time and really efficiently. There's a bunch of different ways to optimize that. Can you just speak to it? Yeah, you know, with the advanced art tools we have today, it's really easy to create a scene with billions of polygons. The hard part is how to render it efficiently because you can't render billions of polygons in a frame.

1:01:47Basically, you want to render an image that's indistinguishable from the four detailed geometry if you rendered it at ridiculous cost. And so the challenge is how to simplify every component of the rendering, the geometry, the lighting, and so on down to real -time techniques, they're efficient, they capture realistic view of what's around you. And so when an object is up close to you, you want to render it with a lot more polygons than when it's far away. But one of the cool principles of mathematics is the Nyquist sampling theorem It says, if you're trying to reconstruct a signal, there's a limit to the amount of data you need to bother capturing.

1:02:25If you want to render a texture at a certain resolution, then you never need more than twice the pixels, then in the texture that you have on the screen. And that's called the Nyquist limit. And so one of the challenges of computer graphics is given the need to render objects at extreme close -up distances and extreme fire -weight distances. You always want to be able to generate the right amount of geometry so that you have enough to be indistinguishable from reality, but not any more than necessary. And with geometry, the idea is that if you render two triangles per pixel, you should get an image that is indistinguishable from thousands of triangles per pixel.

1:03:03But if you render less than two triangles per pixel, you're going to start to see visible artifacts of the loss. And GPUs have this amazing hardware in a lot of different pipelines, but it's all very fixed function. There's pixel shader hardware, there's geometry processing hardware, and then there's triangle rasterization hardware. One of the limits of GPUs is that the triangle rasterizers are built for pretty large triangles. If you're building a triangle or rendering a triangle with 10 pixels, that's pretty efficient, but if you're building a triangle with one pixel, it's very inefficient. So one of the breakthroughs Brian made was to design an entire pipeline for avoiding the rasterization hardware in the GPU and just going straight to pixels and calculating what should be done with that pixel as a result of some ray tracing and geometry intersection calculations done in a pixel shader.

1:03:52So instead of using the triangle pipeline, we're just using pixel pipeline and getting a better result. Because of the limitations of the triangle rasterizer in the GPUs, that's fascinating. Because as you describe, you need the tiny triangles for the detail, for the stuff that's up close. I mean, this might seem obvious to people, but it's not just stuff up close. It's like, it depends on where you're looking, like the human eye and the human focus and human attention mechanism defines how much detail you want to show because the thing that the human is likely to be giving attention to, you want that to be super high resolution.

1:04:36And everything else, including due to distance, can have less geometry, less texture, less information in it. Yeah, yeah, that's right. But there's a lot of challenges like that. It turns It turns out it's a lot easier to render one frame that looks perfect than it is to render a series of frames in motion that look perfect. A lot of the problems with earlier algorithms that inspired to do this sort of things was popping. You know, you'd be rendering some number of triangles for a while and then you'd switch to a different number of triangles and you'd see a visible transition and a screen would look like it got shaken up.

1:05:09You know, it's a disturbing artifact that distracts you from the game. So one of the magical trade -offs of the Danite was how to avoid all the visible transitions And get them down to a point where Though they exist statistically, they're not really perceptible to a person looking at it You look at something like not night. I mean, there's a nice blog post There's nice descriptions about the details, but you can tell even under the details There's just incredible engineering that goes on. It's so cool. It's so cool how underneath this the actual experience of beautiful, detailed scenery. There's just incredible engineering.

1:05:46To bring to you simulation, ultra realistic simulation of reality in real time, like lights changing everything. And then it just takes you back to that feeling I had with Wolfstein, but like more. And you can completely lose yourself in that world didn't you would forget that this real world exists. What is the real world anyway? You know, so it's it's that coupling of great engineering and great storytelling in terms of just feeling is super cool. It's great to know it's great to know that these these teams behind it and it's cool that you're also releasing a bunch of details around it at least for folks like me.

1:06:28It's, it's inspiring to see. So Unreal Engine is this fascinating creation. It's a big, bold, crazy bet that you've made. Maybe it's good to actually explain what Unreal Engine is for people outside this world. I would say, hey, transformed the gaming industry, but that was a big bet in 1995 that most of the effort would be on creating the gaming engine, not the game. Yeah, Unreal Engine is a big bundle of code and tools. A huge software package that provides all the functions you need to build any sort of a 3D graphics application. Game to all app reviews, it's to make games, and that's the predominant use.

1:07:14But it's also used in Hollywood Film and Television production to create 3D scenery in real time for production sets to do pre -visualization. It's used by car makers to visualize their cars before they're constructed or manufactured. It's used by architects to preview buildings before they're made and industrial designers of all sorts. And it provides all of the 3D simulation features you need both for creating highly realistic 3D graphics but also physics and interactions between objects and making things happen like you might see in the real world and supports a huge variety of styles from Pixar stylized movies to socializing, to photorealism.

1:08:00And we use for anything that needs a real -time 3D graphics, including humans that populate those three dimensional worlds. And we'll probably talk a bunch of the details involved in the process of creating ultra -realistic the humans, because we humans care about how other humans look and how they convey emotion and express how they speak, all that kind of stuff. So yes, it's the 3D objects that are static, the 3D objects that are dynamic, and on the dynamic front, including humans that are ultra dynamic. So all of that, you have to create this engine that simulates that world. world, the world is beautiful world that we know and love.

1:08:50So that, but you know, you're early, so here you see doom and you're trying to create this world and trying to create an engine that would not just power on real the video game, but future video games. So how do you go about it? What are you thinking? And that, that should sort of linger on that. That is a crazy bet that we're going to build an engine as a company. Yeah, well, you know, the philosophy began with ZZT and continued onward. We're not just building a game for players to play. We're also building tools that could be used for building that game or any other game and catering to all of the artists and designers who had used the tool.

1:09:32And so that philosophy started with a very early arts of Unreal development. I was building the tools for, you know, level designers like Cliff Fuzinski and artists like James Schmotz. And, you know, as we began marketing the game, thinking it was six months away, or we were constantly releasing screenshots and things like that. Other companies started calling us and saying they wanted to build 3D games too, but they didn't have the expertise for that and they wanted to license our 3D engine. And this was one of the coolest pivots and epic tastery that MicroPros called up Markrain, or Vice President and longtime business guy, and said they wanted to license our engine.

1:10:14Markrain was like, oh, what? You want to license what? What an engine? What's the, what engine? And they explained to them what they wanted to license. He's like, oh, that engine. Yeah, yeah, that's very expensive. But this was one of the critical things that kept going through that three and a half years. We were starting to license our engine out to other developers. MicroPros took two licenses and we got in half a million dollars from that and company GT Interactive Licensed our engine to build Another game and we got paid for that and so we had this revenue stream funding the development of Unreal Engine from other games That were being built by other developers and because they were the lifeline for the company We we took the engine and it's very seriously from the start We set up mailing lists so that our partners could ask us questions and all the developers and artists working on our games We're participating in helping customers Everybody took that very seriously because it was our funding source and Yeah, that's kind of set this dual spirit of epic of Building technology and supporting game developers simultaneous with building games and supporting gamers It's continued onward and just grown over time.

1:11:23Can you just go back to that you programming? What are some interesting technical challenges yet to overcome? You mentioned dynamic lighting like create, you know, create this three -dimensional world and try to figure out the puzzle of how you actually do that at a time when nobody should car -back in you doing this kind of thing. It's a totally open, wild west. So what are some interesting technical challenges yet to try to solve? There's a lot. Some of them are visible on screen and some are behind the scenes still require a lot of innovation. All of the graphical techniques were really interesting challenges.

1:12:05And on Unreal Engine, in those early days, went a lot further than the Quake Engine and building environments using constructive solid geometry with a real -time editor. And that was a really interesting technical challenge. You know, the idea is, building is extremely tedious if you are only adding objects to the world. If you wanna build a door, then you need to add like a dozen different pieces of door frames and add a bunch of different walls together to fit together in the right shape. But sure would be easier if you could just start with a wall and subtract the door out. And so we had this way of adding geometry to the world and subtracting geometry and the engine would perform all the calculations on that.

1:12:46And this is something that I'd been anticipating was possible for a long time, but when I finally got around to it, it took this 30 -hour coding session to figure out all of the special cases of the code that needed to be implemented to make that work. But in the course of 30 hours, I got constructive job, solid geometry up and running. I started doing, like, handed it to James Schwarz the next time we were together and it's like, okay, I think you're here. So you create a giant Taurus and then add another giant Taurus, interlocked with it, and then subtracted a cylinder from it, and created this really advanced composite object with just three operations.

1:13:24He was like, whoa, I can't believe this. It's like, yeah, we figured it out. And that was cool to see you for the first time. It was probably the first time somebody had done constructive solid geometry in real time. But it was also really useful, I was told that all the I just appreciate it immediately began making use of. Can you actually speak to that the 30 hour session? I mean, this is not, from everything I know about competition geometry, doing this kind of thing from your perspective, is not, that's not easy. That's, what is it? The uncertainty, the open questions involved the, like, I mean, even just on the algorithm them front how to do that efficiently.

1:14:05And then plus the usual programming thing of debugging, like suffering through the trickiness of it. And we don't have really at that time, you don't have the tooling to really visualize everything that's going on really well. And you probably like using some crappy editor, I mean, there's just a lot of like friction here. So the the 30 -hour session is one that's probably rough. It's a rough one. Your brain works in different ways, and depending on your state, right? There are some things that require really working on a problem -fresh, where you've put together a bunch of logical pieces, and now you just need to write a whole lot of code to make it all work together, and you know, plumb a whole lot of data between a whole lot of different algorithms.

1:14:52But I think our brains have asked a more horsepower than we're able to directly access by thinking of what code to type next. And after you've been working for a very long time, you can get into a sleep deprived state where you have much, much more direct access to that low level knowledge. That's great. Because there are sometimes there well studied of sleep deprivation. One of them is short -term memory loss. And so you're working without like the easy recall of the code you just typed But your brain is then freed to think about other problems and And you I'd bought up this intuition over a very long period of time You know, so the foundation for the subject is the binary space partitioning tree the status structure invaded by a computer Science the graphics researcher Bruce Neller Carmack had picked up on that and had used the technique and and doom to really great effect And I picked up on that and the owner was using this technique for all of its graphics and rendering, but it was just additive geometry everywhere and it had a lot of overlapping polygons and was pretty inefficient.

1:16:00So I had the idea that if we had a BSP tree, there was a really efficient way to do constructive solid geometry. And to do that, you had to break down the ways the different pieces of geometry can fit together. I'd broke it down into like 14 different cases. And most of them are pretty simple, crank them out. Anyways, I got towards the end. There were some pretty complicated things. Like, what, how do you do with co -planar polygons? They're in the same plane. Yeah. And pointing in the same direction versus the other direction. And what cases should you keep them? And what cases should you eliminate them?

1:16:30And so on and so on to create really efficient geometry output. but, and, you know, just plowing through it, eventually through mostly deduction, but some trial and error too, like sometimes you just have to try the possibilities and see what works. You know, I cranked it out and it worked. And the next day I came in like kind of weary and I was like, oh wow, this actually did work. It wasn't just a dream. So you're considering the edge cases also. I mean, that's the problem with geometry is like, there's probably just gonna be all kinds of weird polygons that you have to, so you're like thinking through, you're imagining the edge cases and trying to see how do I not create inefficiencies in this algorithm while still considering the edge cases, allowing for the edge cases.

1:17:11Yeah, you know, it's pretty easy to write software that's like 99 % correct. It's the 1 % that's the really hard part and where the devil lies in the details. What about like lighting? Is there other interesting stuff? Well, the funny answer is like, we know the laws of physics. So it's actually really easy to do everything in computer graphics, The direct solution of the laws of physics is immensely so. And so what we're finding are approximations rather than complete solutions. Cause you need something that's a million times faster than the brute force answer. We should say that the physics of the seed is you just take a bunch of photons, bounce them around, that's how light works.

1:17:53That's going to be very inefficient because there's a lot of bouncing and a lot of photons. Yeah, yeah, photon tracing is the subject matter that does brute force calculation of pixels on a screen from all of the light in the scene and it. It works and it's cracked and it just is an implementation of laws of it. It's an it's millions or billions of times slower than what we do. But Carmack had to figure out how to do really cool lighting algorithms including real time lighting with objects moving around. And I hadn't taken it very far. So with Unreal Engine, I realized we don't have nearly enough computing performance on our CPU to compute the light of every pixel on the screen from all of the light sources that affect it.

1:18:38We were at a six -cycle texture mapper and we couldn't afford 30 more cycles for lighting. And so the answer had to be some approximation. And the one that Carmack had picked up on in the quake engine was light mapping. If we instead of calculating all the lighting on every pixel, what if we made a big texture that we placed over all the walls in the scene that was like wallpaper, and what if we say every foot we're going to compute a lighting value for just that one one foot grid on the object rather than computing it everywhere, and then if we, what if we just linear and interpolate that over the course of it, you know, you get a lighting and solution that actually works pretty well and is fast enough to work.

1:19:17And so a lot of Unreal Engine's lighting techniques were based on light mapping. We introduced colored lighting. You see, you could have colored light sources, then we realized, oh, since we're doing this and we're doing it on light maps, we can actually do some pretty expensive calculations, hundreds of cycles, since we're only calculating it for every one foot of world space, rather than every pixel. And so we introduced a whole bunch of elaborate lighting effects, like torch flickering, and the caustic effects of water bouncing off of the surface, and so on, and like pulsing lights and blinking lights and everything else in creative system, I created a system for compositing them together.

1:19:53So if you had an arbitrary number of light sources, they could all do that. And then I implanted shadowing algorithm. If you cast a ray from a point on a light, from a light to a point on a surface and see if whether it intersects in the other geometry, if it doesn't intersect in the light hits object and if it does intersect and the light hits something else first and that picks on the object should be dark. So I built a real time version of this and it ran at about a half a frame a second. So I was running around at half a frame a second like shooting out light projectiles and looking at dynamic lighting.

1:20:28It was like, some day computers will be fast enough for this, but not today. So I made a non -real time version of the pre -calculates all the lighting and realized, oh wait, if you pre -calculated the shadowing on an object, you can still apply the lighting dynamically as long as the lights not moving. So you could do torch flickering with shadows. And you know, I figured out all of the cases of dynamic and static lighting that were actually practical on a computer at the time and expose them to artists. And this was the wonder of it. I was just typing in these little features, exposing them to artists.

1:20:58And every day they'd find like a drop down with some more lighting options. They all wanted them and they'd start using them and they'd do things that I never thought possible. And this was always the coolest thing. As a programmer building an engine, you might think you know the implications of the feature you're building, but artists are so clever that you always find that you've built the capability of doing vastly more than you ever anticipated as they start to use combinations of features together in concert to do ever more amazing things. That's the genius of artists. Is there given constraints and within those constraints they create something you could have never possibly imagined given the constraints?

1:21:32That's such a beautiful coupling between engineering and artistry and art. That's right. And it's timeless. You know, what would the Renaissance painters do with paints and what do the early game artists do with early engines? You know, everybody's figuring out, it's a KFOA's at their medium and you're seeing a revolution. This is blowing my mind. This is so fun. What about fog? You mentioned fog. That I don't even know. How do you even do fog? So you mentioned Unreal, so the first version had fog. Yeah, it was a funny thing. So this graphics hardware company had just started up in Finland, and they released a screenshot of what their GPU was doing, and they showed a scene filled with volumetric fog.

1:22:15So you had a foggy room with some light sources in it. And when that happens in the real world, what you see are glows around the lights, as the light brightens the fog around it. But the brightening of the fog diminishes every time because the fog absorbed some lighting. And so the further you get away from the light, the more the more fall off there is. And you know, you have a bunch of colored lights overlapping together in a space like that. The effect is just absolutely magical. You know, like being out on a foggy light with street lamps above. It's something that's surreal and just beautiful.

1:22:45So I was like, oh my god, they figured out how to do real time -value magic fog. I have to figure it out myself. And so that was another like 30 hour coding session. Um, nice. But like at the core, I realized, okay, What's happening here is we have this lighting function, saying that light at a particular point in space is like, you know, falling off with the inverse square of the light, the distance from the light source, right? The inverse square is all from Isaac Newton, which applies to lighting. I had to realize the way the fog interacted with the light was that you calculate the view from your eyes position to a point on a surface in the world.

1:23:20It's going through fog and you're accumulating more and more light as a function of the amount of light limiting the fog at that point in time. And so, well, you know, I'd studied that in mechanical engineering without even knowing it. That's the line integral. You know, you have an integral over a line of some function. Well, this is exactly what it's for. It's for accumulating values of a function over a continuous space and time. And, you know, I did a bunch of math and realized that, oh, wow, the integral, and I looked in a reference book of all of the integrals, and, you know, thankfully, people have solved them all.

1:23:52And you guys, the integral of, you know, this transformed one over r squared, is turns out to be solved by the arc tangent of r. And so, you know, if you calculate the, some parameters based on the position of the i and the position of the surface, point your act watchmanly seeing, then you calculate exactly how much fog you can accumulate from that. Well, of course, you can't do that per pixel because that's hundreds of cycles on CPU time. And so what we had to do is calculate volumetric fog on something equivalent to a light map, but calculating fog every square meter in the world. And so we had enough performance for that, built a volumetric lighting and gave it to the artist and they started building magically detailed levels with volumetric fog and real time.

1:24:37And then decades later I was talking to one of the engineers who'd worked on that hardware and asked about their volumetric fog and told him how it inspired me to figure out how to do it in real time myself. He was like, oh no, we cheated. Did we just rendered it out of 3D Studio Max? That's awesome. That is so awesome. That is so inspiring on so many levels. Yeah, that you saw that maybe it's possible, even if it was kind of smoke of mirrors, and then you actually made it happen. It's so inspiring to hear these kind of stories when there's so much uncertainty and you figure out, and so many constraints and you figure out how to bring it to life in real time and create this world that I'm real dead.

1:25:18Maybe if we could just pause since you mentioned John Carmack a few times as a fellow pioneer in the game industry at that time, what do you admire about John? John! Singurally has this intense dedication to getting the best result from his code and having absolutely no attachment to past code. And some of the legendary things he did, the end result was an absolute breakthrough in real -time computer graphics. weren't his first try. They were like his seventh or eighth try after he'd done something time and time again. tried it, found a better approach, thrown out the old one, built it again, and continually re -out its code until he found the absolute best solution to a problem.

1:26:05And I think that that stands as a lesson for every programmer to pick up on when something is really, really important. It's performance is absolutely critical to the product or its quality or its capabilities. Just iterate on it and tell you that you have perfection and don't settle for the first or second solution is good enough. And it's, you know, the result of that, both you and him sort of define the future of gaming of gaming worlds. It's so beautiful to see. It's like, it's just fascinating. It's inspiring because under so much uncertainty, under so many constraints, you figure out, you figure out a way.

1:26:45And that actually continues to this day because yes, the hardware is improved incredibly, but in order to create an ultra realistic, highly dynamic real time rendering of the world around us, it's still really, really difficult. And there's all these kinds of optimization, like you mentioned, maybe you can speak to that Unreal Engine 1 journey from 1 to 5 .5 or 0 .6 now. What for 30 years you've been creating virtual worlds? What's it like evolving a game engine for those 30 years when they're on the hardware under you is improving exponentially? What are some things that changed and what are some universal truths that have not changed?

1:27:36It's been an astonishing experience. Nobody 30 years ago, it anticipated that we'd see the performance gains and hardware that we've actually seen that time frame. It's something like 100 ,000 times higher CPU performance between multiple cores and higher clock rates and more parallelism. Like, you know, if we had an aviation then we'd be like taking a trip to neighboring stars. Alpha Centauri, yeah. Exactly. And in graphics, it's been even more so. It's something like literally 10 million times more net usable GPU performance than we had back running on a Pentium ID CPU all in 30 years. And it's really made me appreciate that over the generations, some areas of our engine development have absolutely kept up with technology.

1:28:24And you know, the rendering team that works on Unreal Engine are the real miracle workers there. Just about every generation of Unreal, we've replaced most of the rendering code and the different leaders and different points and times and the different luminaries have built systems that were absolutely rethought and optimized for the latest generation of hardware. You know, Unreal Engine 1 was built for software rendering and then the Voodoo 1 came along late in the cycle and we had the support for it but wasn't fully fully capable and utilized. Under Engine 2 was about bringing all of the latest GPU hardware acceleration features to the engine and you know keeping forward and going some new features like vehicles and a few other capabilities.

1:29:11This was in the early GPU era before GPUs had really broken out of you know everybody's expectations of Moore's Law. But that break out occurred with DirectX 9 and the capabilities of programmable shaders. Once you had control of writing code running on the GPU, that could color every pixel on the screen. And that GPU code was literally a factor of 100 times faster than the equivalent code I wrote a few years earlier on the Pentium 90. And so that DirectX 9 generation was a godsend and Andrew Scheiderker, a long time Epic Luminary wrote the core of the Unreal Engine 3 render around your time pixel shading, your time lighting, being able to do dynamic shadows using several different techniques.

1:30:00And multi -threader render to support bits of the early dual core CPUs that we're starting to show up at the time. And it was a massive, massive graphical upgrade. Underwengen 4 made a number of improvements and just continued to add features to make more and more options for lighting and for geometry that created realism. But then I think probably our biggest single level of leap came with Underwengen 5 with Nanite, Micropylegan geometry solution and with global illumination lighting solution, which I think really bridged the gap from game -ish computer graphics to a total observable photo realism for artists who wanted to create that.

1:30:52And so that's the evolution. And the progress in the graphics side is absolutely astonishing. As it is on the audio side in a number of other areas, but parts of the engine also haven't changed all that much since the version I wrote and shipped in 1998. The file management system has been optimized a number of times but hasn't been completely rethought. And the networking system, the ways that clients and servers talk together and negotiate game state, is still an evolution of the thing I wrote. And it's feeling kind of dated now. You still see networking bugs in Fortnite where for some reason when you're specitating you're not seeing some parameters update.

1:31:32Well, that's because of the loss of the lossful nature of that networking model. And, you know, and the biggest limitation that's built up over time is the single threaded nature of game simulation and Unreal Engine. We run a single threaded simulation. Yeah, if you have a 16 core CPU, we're using one core for game simulation and writing this the complicated game logic because single thread programming is orders of magnitude easier than multi thread programming. And we want to burden either ourselves or partners or the community with the complications of multi -threading. And, you know, over time, that becomes increasing limitation.

1:32:09You know, so we're really thinking about and working on the next generation of technology and that, you know, being on your own in six. And that's the generation where we're actually going to go and address a number of the really core limitations that have been with us over the history of on your own. and get those on a better foundation that in the modern world deserves, given everything that's been learned and the field of computing in that time frame. That's a terrifyingly challenging engineering problem. And it seems like every version of Unreal Engine, the amazing teams behind it are willing to just throw away most of the code.

1:32:47Or maybe I'm being a little bit too dramatic, but basically throw away the old approaches, as I can mention with Carmac. And start again, like with that night and Lumen, just keep optimizing to the current hardware, but even like rethinking how it's all done. But going from single threaded to multi threaded, oh boy, that's terrifying. And that's in part, we'll talk about it, why maybe you have to rethink the, even the programming language that's being used, to rethink a lot of things, that's fascinating. Can we just stick on Unreal Engine 5? So I watched a bunch of stuff, but the state of Unreal in GDC 2024.

1:33:31Thank you. I was just giggling with excitement watching some of this stuff. So just if you can talk about different things here, just to nerd out a little bit. So people should go watch this video. They talked about the dirt. just the ultra realistic and this is for Marvel 1943 which is kind of putting the Marvel universe into Nazi occupied France in the winter. So there's snow and you know that that's a moment in history that's a very intense moment in history and it really creates a feeling and puts you there. There's so much to that including the snow, but just looking at the dirt is a really nice way to show like how do you add a lot of details to the scene in real time that like gives this experience like infinite detail like this is real this is super real and then I think in the talk they describe like what it what's entailed in the generation of the geometry, what's entailed in the lighting, all that kind of stuff.

1:34:51Maybe can you speak about dirt? What are the components for people who might not know in creating this ultra -realistic the texture, the lighting, the geometry, all of that? Like how Nanai, how Lumin all come together in this beautiful orchestra to paint in real time the dirt in Nazi -occupied France. in 1943. Yeah, there's a lot happening here on screen and you know the real hero of this image isn't epic it's the artists and technical artists who worked together to build this environment because it and the reason we showed it at GDC was it went way way beyond what we realized the system was capable of doing you know largely because of their reliance and this is the magic of computer graphics there's not one feature that makes this cool there's a dozen technical features that each enter play.

1:35:43And because of the ways that they interplay with each other, you really don't, it's hard to actually identify the individual components of it. One thing that's happening here that's really critical, oh yeah, now we're seeing it being turned off, is the lighting happening. The Lumin lighting system that's powering the scene is doing different kinds of lighting calculations at different scales. This was the work of Daniel Wright following a decade of moving the state of the art of lighting forward. But his theory, which was rather controversial at the time, was that if you have enough levels of lighting, calculation, then you can get everything, global illumination working everywhere from the highest levels of a scene, you know, that buildings are casting crack shadows all the way down to details like you see on the dirt here, all working in concert and without distinguishable boundaries.

1:36:38So there is a good decade of foundational work there to make the lighting work. In particular, when you see that very detailed shadows interplaying between the ice and the dirt there, that's screen space sighting. There's actually shadow calculation going on, not based on the world, but on the pixels on the screen, because that is the only way that we could possibly do this calculations fast, running them on a pixel shader. Yeah, watch this. Watch the, when you add the objects, when you add the textures, the different layering, all the shadows that have to be computed. Yeah, boy. That shadowing is an amazing thing, but you know, the reason that works is counter -intuitive.

1:37:24When somebody first explained it to me, I was like, that's really clever. I don't think that will work. But it does work, because if you observe the positions of incoming lights and you know the Z coordinates of the different pixels on the screen, you can figure out how your geometry there is likely to occlude other geometry. And even though it's only an approximation, it's not perfect, it looks perfectly good to the human eye and gives you the subtle shadowing that you see in a scene like this that makes it look highly realistic. And the shadowing influences other things. There's also some really interesting things happening with the color here.

1:38:01And I'm not even sure what's causing, you know, it looks like color is bleeding from some parts of the snow onto other parts of the snow. It looks like there's some subsurface scattering going on. I'm not even sure if that's being used in the scene. And then there's a material layering system for laying down, you know, layers of material, dirt and snow and other things, all making that work. And then there's the light bouncing off of the geometry, which is another system for lighting on top of the global elimination system. What about reflections to is that is that count as the light bounce? There's a light bouncing off of stuff to light it up in different interesting ways, but then there's also actually little reflections in like we're looking at a puddle in the dirt.

1:38:48Yeah, yeah, that's right. Well, the engine supports a number of different reflection techniques. One is calculating basically textures that reflect the capture all the lighting in the scene and then bouncing that off of Texture maps so you can see different lights bouncing off of different pixels in different ways and then there's individual lighting casting Reflections off of things too and a lot of this is under the control of designers and You know one of the things that's yet yet to do problem for the future is that You don't just like press a few buttons in this kind of scene magically appears This is a lot of work from highly skilled people not only building out this particular scene, but in setting up the material layers so that you get the dirt with the ice layered on top and all the reflections working.

1:39:30They ended up making a number of technical art decisions to make this work. If a novice who hadn't worked very hard, the kind of scene like this, it wouldn't look nearly as good. One of the challenges we have is to make building this quality level even easier and more seamless and automatic. You'd like to just build a scene and say, use this material here and have this appearance come out of it. Yeah, and I mean, once you create the scene, you could do things where they said, like, can you turn off the headlights? I forget. You could control the lighting. I mean, all of this we should say, like, this is dynamic.

1:40:07So you could change the position of the light. You could turn on the lights and off the lights. That's incredible. So this is all real time. Did geometry, the lighting, the textures, all of it real time? This is the power of awesome technical art, three decades of feature development. And you have to create it also to the 20 teraphops of graphics performance in videos delivering things in video. 90 megahertz to this. 90 megahertz is 90 mega -flops. This is 20 teraphops. That's a big change. That's a lot. So one of the other things that they talk about in the presentation is about snow. So if you're talking about 1943 in Nazi Germany in the winter, there's a...

1:40:58You have to create a feeling one of which is the season, the winter, the cold. And you can control the... You have to cover everything in snow. and here shown is the ability to control how much snow covers the objects. So this, that, you know, the ability to do that for the artist is incredible. Like just to control how much snow is in the scene dynamically like that. That's cool. Yeah, yeah. That's really cool. Because a cool system for material layering and a dozen pieces coming together here. You also notice, you know, there's a foggyness and there's some hot objects emanating fog. And artists did that that didn't just arise automatically.

1:41:41So that's called material layering. So an artist creates a different materials than are able to like layer the scene with it. Yeah, layer materials on top of each other and say how much of each material should be protruding in different places with the engine handling, transitions and things like that. And that's on top of the sort of geometry that creates the creates the structure of the scene. And all the occlusions that have to be computed. Okay, I gotta go to the other one that was just blowing my mind, which is smoke. Let me see that. Look at that. Yeah. Oh. There's a fire in a trash can with the smoke and the shadows, the lighting and the shadows interplaying on the smoke.

1:42:32This is real time. Yeah, that's all real time. What the hell? How do you do that? Was that how do you do the smoke? Well, there's a really powerful particle system underneath. It's providing the technological foundations for this sort of thing. But there's our awesome artistry on top of that. And an awesome physics engine powering it. It's hard to tell exactly which piece is doing what. But you have several different particle systems there. There's one for the fire and then there's another one for the smoke coming out of it They're really interesting thing happening with a smoke here is that it's a clueding light You know, there's Calculation of how the light should diminish as it travels through smoke and so you're seeing the lighting on the smoke being They're really interesting thing And there have been a lot of attempts, but this is this was the first demo where I felt like this kind of smoke had really No longer looked like a video game It looked like just a burning trash can, billowing out dark smoke.

1:43:34And it's the artist's sophistication. It's a very, very, very large part of it. So yeah, again, it's the interplay between the tooling and the artists. But yeah, like that, I could watch that for a long time. I mean, there's something magical sitting around a fire in real life and just watching the fire and the smoke. I mean, humans have been doing that for, I don't know, hundreds of thousands of years maybe. And then that same, I was just staring at that. And I wish the people would just stop talking and I could just watch the fire. Infinitely. And that, I mean, that's immersion. That's like, I want to be in there.

1:44:16I want to sit around that trash can with a fire and the smoke and watch. And maybe you warm my, because I was also feeling cold because of the snow, you're like, you really get immersed into the thing. I mean, this is so beautiful. It's true art. It's true art is just really wonderfully done. But okay, so I got to ask you about the humans. We talked about what's it like to create the scenes, but creating realistic humans is really tough. Can you speak to that how to create ultra realistic humans? So you have an actor behind this to convey emotion, show the nuances and the details of the faces.

1:44:55And maybe this is a good opportunity to also mention metahuman creator that's part of Unreal Engine. Yeah, that's right. Humans are by far the hardest part of computer graphics, because millions of years of evolution have given us dedicated brain systems to detect patterns and faces and infer emotions and intent, because cavemen had to, when they see a stranger determine whether they were likely friendly or they might be trying to kill them. And so humans, we people in the world have extraordinarily detailed expectations of a face and we can notice imperfections, especially imperfections arising from computer graphics limitations.

1:45:34But it becomes by far the hardest problem. So the matter of humans' effort is part of decades -long initiative that Vlad Mustelovich, the most talented digital humans, visionary in the world has been working on for generations and generations of games, serving individual clients around the game industry for a while and in joining Epic as part of the three lateral team. And leading now a worldwide effort to build all of the technologies required to make digital humans realistic. Okay, one part is capturing humans. And so it felt really advanced, dedicated hardware that puts a human in a capture sphere with dozens of cameras in them taking high resolution, high frame rate video of them as they go through a range of motions and then capturing the human face is complicated because it demands detail of our faces and how all the muscles and sinews and fat work together to give us different expressions.

1:46:28So it's not only about the shape of a person's face but it's also about the entire range of motion that they might go through. Capturing one human requires a few hours of capture work in a delicate environment like that then thousands of hours of processing work to to capture a precise and real -time, real -time, replicable version of that human in the environment. So one of the things that's done is just capturing an actor or actress in the real world and then using them in a video game. But the much more interesting thing going on is capturing thousands of humans to form a data set who's always to encompass the entire range of faces and all of humanity.

1:47:04So going around every culture, every continent, every age, and every face of variety and capturing representative people. So the entire range of faces is represented. And then being able to combine and merge those together to enable recreating an arbitrary face that the systems never seen before. So you know what the idea is is capture giant amounts of this high precision data and the user to reconstruct a face at a consumer level. Like maybe you know taking an iPhone photo of somebody's face and then capture a very accurate depiction of that not by synthesizing it then and there on that device, but by combining all the known details of human faces to accurately capture the most accurate representation of that.

1:47:49So that's the data problem. There's a lot of other problems of computer graphics. There's technology for rendering hair, which is really hard because you can't render every, again, we know the laws of physics. It would be easy to just render every hair. It would just be a billion times too slow. So you need approximations that capture the net effect of hair on rendering and on pixels without calculating every single interaction of every light with every strand of hair. That's one part of it. There's detailed features for different parts of faces. There's subsurface scattering because we think of humans as a pig, but really our skin is light travels through it.

1:48:23It's not completely opaque, and the way in which light travels through skin has a huge impact on our appearance. There's no way you can paint a mannequin to look realistic for a human. And yeah, it's just a solid surface. And we'll never have the sort of detail. You see, we wish I'd actually just linger on that, that kind of blew my mind like thinking through that. I think I heard that sort of the oiliness of the skin creates very specific nuance, complex reflections. And then some light is absorbed and travels through the skin. And that creates what it'd be fair to say, like microchaddles or something, it creates like textures that are humanized, able to perceive and it creates the thing that we consider human, whatever that is.

1:49:10And so you have to compute both that, the reflection, how light interacts with the oiliness of the skin and how it is also absorbed in and all of that while considering all the muscles involved in making the new osse expression, just the subtle squinting of the eyes or the subtle formation of a smile. It's a stupid annoying subtlety of human faces. You have to capture like the difference You know real small and a fake smile. I love human faces. I love humans in general But the way to show like beginning of a formation of a smile that actually reveals a deep sadness All of that like when I watch a human face I can like read that I could see that Again, this is the engineering and the artist.

1:49:56You have to have the tools that in real time can render something like that. That's incredibly difficult. Anyway, so there's a lot of this kind of complexity in even just the lighting of a face. That's right. Getting faces right requires interplay of literally dozens of different systems and aspects of computer graphics. If anyone of them is wrong, your eye is completely drawn to that. and you find it on the wrong side of uncanny valley. So the level of perfection needed in this area is vastly, vastly higher than you know, world rendering or grass or any of these other things. You know, the shadows on a work of architecture slightly wrong, you're pretty privy with it actually.

1:50:41Your brain doesn't really care that much, but if anything wrong with the human it's It's totally jarring. Can you speak more to the creation of digital humans with matter human, both on the editor's side and bringing it to life side? It seems like because I've watched so much of videos, so much of individual developers doing it. It's not too difficult to bring a human to life using the tooling that Unreal Engine editor provides. There are two main tools, compared to the old days where every face was created by hand, by an artist from scratch. One is the MetaHuman Creator tool for creating faces, where you have a huge number of parameters you can adjust to create a unique human by adjusting all the different capabilities of them.

1:51:29You can then get that out of MetaHuman Creator into Unreal Engine, and then you can add all kinds of computer graphics features in the engine. You could add clothing using the cloth simulation system and you can adjust the hair and all these other parameters on the thing And then there's met a human animator tool for animating a human based on a facial capture which can be done on a device as simple as like an iPhone And transfers the captured animation to the human you want which is not straightforward if the actor has one face shape and the character on screen has another face shape The translation that needs to be done from the actors to the faces is actually really sophisticated and non -obvious.

1:52:08If you just applied it literally, then it would be completely wrong from your point of view. So those are the main tools that people are using now. And then when it went in the Unreal Engine, then you have a face and you can do absolutely anything you want to it. And you could also, if you decide to go outside of the metahuman geometry pipeline, you could build your own face, like any creature of any sort, and then use the animation tools to animate it. But yeah, this is 30 years into a project that's probably like 50 years in total to get to absolute photorealism and controllability for absolutely everything.

1:52:40So there's vast amounts of work still to do and we don't feel like we've solved the problem at all. We've just given artists a big productivity multiplier and a quality multiplier, but this is not in a state that we would say is done. But nevertheless, I've seen people use it really effectively. I saw almost like plugins, maybe external services where you can get the faces to approximate the mouth movements required to speak a thing. So that's a really useful feature. Yeah, that's right. When you have an artist or actor in your studio and you're recording a specific performance, you can just capture their facial motion and apply it.

1:53:18But if all you have is a voice recording or you're generating a voice recording or it's parametric or procedure or AI generated, then you need the system to translate that speech, not only to movement of the mouth and lips, but also to facial expressions and the whole intent. When we're speaking, it's our whole face is active and emoting in different ways and not just a mechanical motion of the pieces. So we spoke a bit about the magic behind the virtualized geometry system, but can you speak takes to dynamically light in all the complicated ways, the faces, the scenes that we discuss, like what are some interesting things to you that made the magic of it happen?

1:54:02Lumen is a system for global illumination. Being it's a post to calculate the interaction of light with the entire scene in a way that mimics reality. The first generation of engines that did lighting just said, well, the light cast light and the surfaces that hits our lit and the surfaces that doesn't directly hit our dark and that's just all the techniques we have. It's either an area that wasn't hit by any light being completely black. But in reality light bounces around the entire scene dynamically. When a light hits a red wall, then most of the blue and green light is absorbed, but the red light reflects off and now is hitting other things.

1:54:41And so if you're a red wall with a white floor, light is bouncing off of the red wall into the floor and now the floor is being turned red. And so the entire bouncing of light around the scene through multiple bounces is the critical challenge to solve here And again, lots of physics are known and so the complete solution to this it was written down in the 1950s, I think The real magic here in Lumin is this system that Daniel Wright developed over of course of many years Based on ideas formed over a longer period of time to calculate the way lighting bounces around at different scales ranging from the scale of miles or kilometers down to the scale of pixels and millimeters, and to calculate at each level, but integrate it seamlessly at each level to give the appearance of completely seamless and accurate lighting.

1:55:34And previous techniques were highly specialized, and RS had to make a decision for each light about exactly what it did. The goal, you know, and I'll have the practice with it now, is you're able to see in your play sites and it just works to make it that much easier. Yeah, I mean, we're watching says I recommend people go to this blog post. Like look at that. So dynamically, I mean, we should say that so there's the indoors and the outdoors and to be able to dynamically compute the impact of outdoor light. Just look at that. Look at how gorgeous that is. Yeah. Just the lighting. Like look, we're looking now at an image of a cave.

1:56:10So external light lighting the the intricate complexity of a inside of a cave. Yeah, light in the real world goes through a lot of bounces and the effects of it are very very subtle, but when they're not there you miss them Often a person can't point out why I see you as wrong, but they know it looks wrong And it's the lack of the subtle lighting cues that we're seeing here and you know for great because we mentioned for great video games but also for great films, lighting can make a film. And we're just looking at sort of a very dramatic lighting of a scene. They can imagine stepping into the scene at the year.

1:56:45It's exciting, it's terrifying, and all of that has to do with light. The interplay between light and darkness. It's incredible. It's really, truly, incredible. Like light is everything. And then to put the power of the tooling in the hands of an artist, that is really special. Yeah, the industry's gone through massive evolution and there's so many supporting systems to make this awesome and always arous. We're looking at reflections on smooth surfaces. Oh boy. Oh boy, look how gorgeous that is. Yeah, that's right. Wow. And you have to appreciate the algorithms that are doing quite a lot here.

1:57:27You can have a scene with a huge number of not just lights but also bright objects who reflect light off of them. Every one of those has to be captured in the reflections and or for it to be realistic. And you can't calculate every photon in the scene. And so you need really detailed approximations. And that's the field of computer graphics. It's about increasingly effective approximations of the laws of physics, which are just totally intractable. But the result of that graphics is a feeling as an experience by the viewer. And it's just to me, there's a fan of, well, let's say beauty in the world.

1:58:00It's exciting that we can create that synthetically artificially Vigographics and that just it blows wide open the possibilities of storytelling So outside of video games a lot of people using Unreal Engine for movies for films and Big congrats. I saw wars over short film That was made with Unreal Engine one in Oscar so So, you can add that to the resume. So that's huge. An Oscar -winning film made with Unreal Engine. So what do you see is the future of the use of Unreal Engine and creating stories in the film industry? Increasing capabilities and productivity, the limiting factor in every one of these businesses is cost.

1:58:52And the more the engine can make their jobs easier, the more power they can make. that brings them. One of the big revolutions we've seen Hollywood is moving away from doing computer graphics integration into a human scene with green screens, to moving to these large LED wall panels with their displaying real -time computer graphics powered by the Unreal Engine. And that's a massive improvement in quality. You can recognize the old green screen movies because the lighting on the characters is just wrong. And as much as they try to fix it up, it never really works. When you're filming in front of the LED panel with LED light emitteres in front of you as well, the actor not only picks up all of the lighting from the actual natural scene that they're supposed to be in in the movie, but they also can look around and see it and they're aware of exactly what set they're acting in.

1:59:39And just overall in result is that much higher. It's as much because the actors are able to do their jobs better, seeing the scene they're in, because the technology is enabling a better lighting calculation and a better interplayer, virtual light and real world light to make the end result awesome. So there's a lot of excitement around generative AI. What do you think is the future of the interplay between what a human artist creates and what an AI system can create on real engine? I think a lot of people in the industry are overly optimistic about the rate of progress of AI for video and other things like that.

2:00:17The real problem is consistency. Like spurting out an image is really high quality, but with video over the course of scene, you know, all the AI approaches have consistency issues going from one place to another. And I don't think that there's always a remedy easily. I fundamentally, AI just doesn't have anything resembling an understanding of the entire scene there and the entire arc of the movie or plot there and the entirety of the world around them and how it might affect the scene. Whereas Game Engine's have that, where they need to be. So I think what we're going to see in the space of world -class high -quality productions isn't just everybody moves to AI and a large part of the human creatives contributing to that are obsolete.

2:01:04I think what we're going to see is AI becoming a multiplying force on the power of human creatives, making them able to create better stuff more quickly. And with higher quality end results. I think unlike the fields of generative 2D art and generative text, I think the future of AI is much more complex and nuanced. And I think your interview with Mark Zuckerberg, Conduct in the VR, was a really good first example of this. So you did this VR discussion. It was capturing your faces and then rendering a completely 3D computer graphics model of your faces. and then the end result was patched up by an AI image enhancer.

2:01:44It was able to add an awful lot of the missing subtleties that are lost by normal computer graphics rendering. And that's the first step. You can imagine the output of Unreal Engine being enhanced by an AI pixel shading post processor is one thing. You can imagine creation of objects being enhanced, especially mashing up high quality objects that have already been created. like Epic's quick soul team went around the world and scanned tens of thousands of real -world objects extremely high levels of quality, they have everything from rocks to trees to archaeological finds and so on all captured there and we have an awesome library of them on the fab content site what's missing is the ability to create arbitrary amounts of new content and I think using data like that and AI to create completely new trees that meet your specification from all of the knowledge is build up of high quality scantries, it's going to be a really valuable thing.

2:02:41But I don't see this reducing the need for people or the role of people, rather I think it actually is probably an enhancer on that. I can't help but think when I go on Amazon and Netflix to watch a movie, there's a lot of linear content and most of them that isn't very good because of the limitations of the media and the budgets and other things. If we can use AI as an enhancer on that then everybody is going to have even more opportunity than they have now. Every single technological revolution has changed the way that people work, but it's ultimately created more opportunity for people. They're pondering that this might be the last one.

2:03:21I think just the opposite. I'm an optimist on this and an optimist that's going to create an opportunity for everyone. Do you think it will be possible to generate, so use generative AI to create dynamic objects that you mentioned trees in the Unreal Engine world, so create meshes and textures and empower the creator to create faster, use meta knobs, like hyperparameters versus very nuanced, where where you can control much faster, the look of a face, the look of a tree, all that kind of stuff. Yeah, I think that's the central challenge of the next decade of Game engines and AI for content creation of all sorts.

2:04:05Because you have two very different models of the world that are emerging. There's the scene graph. The technical term we use to describe the set of all of the objects in the world and the 3D world maintained by Unreal Engine or another engine. So in the videos you saw, it's the rocks and the trees in the snow, in the bridge, and the people, and all of these things. Each one has enormous amounts of data attached to it, like texture maps, some are sound files, some are animation files, and enormous amounts of detail. All stored there in that procedure. In this computer, precise computer graphics representation that enables rendering it from any perspective with any settings and so on.

2:04:44It's a completely general system that has complete context about the state of the world at any point. And so you can always precisely reproduce it. If you play the same scene 10 times in a row, it's always the same. It's never randomly changing. You're like, oh, no, why did it? That this character's face changed mid -stream. But it's also rather limited because you have to do build everything manually. And it's costly and it's time consuming it requires expertise. And then you have this other model of the world, which is what AI sees or thinks, you know, if we could peer into what's really happening in its parameters.

2:05:14There's something like the mushy connections of neurons in a brain. I mean, it has a vast amount of knowledge about the world and about graphics and about images and about people and about everything else. I'm at stored in a human incomprehensible form, but it can be extracted through queries, like asking it to produce an image from a prompt or video from a prompt or whatever. The huge problem with that is it's very mushy data. We don't know how to give it a command that will give us a precise result. effort produces one image one time and we change our prompt slightly it might produce something completely different and we are unable to art -direct it.

2:05:54And so it's this completely untamed tool. I think when we figure out more and more ways to merge these and connect these two together you can imagine AI enhancing the process of content creation and a traditional scene representation. You can imagine the scene representation being cared with the AI so the AI not only sees a prompt with also, here's the list of all of the objects in the world and the characteristics and so on. It can learn more about how those objects should move and interact. So if you get a constant feedback cycle going back and forth between an engine and AI, then I think you can get the best of both worlds, stable scenes, but also the higher productivity of being able to get content out.

2:06:33And the ability to select specific parts of it and artwork those, and to have those art direction stick and be recognized as part of this permanent scene representation. Yeah, I can't wait until AI can operate non -inspace pixels but in the space of scene graphs. Creating objects in the scene graph, whether it's like you mentioned audio or any of the things that you mentioned about that empower the creator. Yeah, that's a super exciting future. I wonder if you could speak to a fear that people have on this topic of artists, engineers, fear losing their jobs, being replaced by AI, are there awards of hope that you could offer them?

2:07:19This is certainly the most extreme example of it because AI is so far ahead of prior technologies, but similar fears we're having in every other industry. There is a fear that digital music synthesis would absolute musicians. And there is a very brief period of time in which songs with digital music instruments, like there are any early mini -mugs and Yamaha synthesizers weren't allowed to when certain music industry awards because they weren't considered real music. And then over time the people were educated and realized, oh these are just instruments people are playing and they were controlling them the say way they did before.

2:07:55There are similar questions about is, you know, computer art built in Photoshop really art? Or is it just, you know, goofy computer stuff? And, you know, I think nowadays digital artists have gained respect. And I think, you know, if you look at just the tools of existing Photoshop, so I don't know, we're pretty sophisticated. And nowadays they are AI features. But I think AI is ultimately going to be another tool and the artist's tool set. And, you know, I think it's going to become a more powerful, for a directable and human serving tool in the future. And I think a lot of the alienation comes from the prompt either being immensely powerful or giving you an entire creation, but then being completely unwilling to let you control the nuance is, that feels alienating.

2:08:37You give it an image, but you're like, you know, replace the image of, replace this part of it with this thing or make that object green and it just, like, you can't do it. Often it can't be convinced within the number of words in the prompt. And that makes it feel like the computer is taking control away from us, you know, humans and artists and is refusing to do what we want and has its own opinions, right? It feels like a competitor. I think when we have much, much, much more nuanced control of it and artists can join and just, you know, like, yeah, let's enhance the subject to this, do that, do that.

2:09:08I'll feel it's, you know, like some of the tools exist in Photoshop, which are in some ways compared to a paintbrush or superpowers already. AI will come to feel like that, too. one increasingly serve creators creating and enhancing a work in a way that feels just a natural extension of their own, you know, their own bodies and minds. And of course there is a real human pain to layoffs and there is a hyper on AI and then companies might try to implement AI systems and so doing layoff a bunch of folks and that the pain that those folks feel is real. I think There's always going to be pain with these kinds of transformation that's happening and it's a terrible pain.

2:09:50Pain in general and the human experience is terrible. But I think I'm personally excited by the human -a -at collaboration as you described in this whole process. So I think if you just keep being open to using the tools constantly trying the cutting -edge tools how they can make you more productive, how can they empower you as a creator, as an artist, or as an engineer, I think you're going to just keep winning. Yeah, there's a lot of complicated trends underway. It can be hard to break them down and distinguish them. I think a lot of people, like the theories that get the biggest traction on social media, often don't capture the real underlying motive forces at play there.

2:10:35I think AI involved in code production will probably create an that benefit for the need for humanity to be involved in coding. I mean, it may change parts of jobs. I don't think it's going to obsolete anybody who's willing to learn new ways of doing things. And it's always been this way, and I think that there's also a lot of overhyping AI. AI is really great at spewing out code. It does something that a million GitHub repositories already do, because it's kind of learned to underlying pattern. It's notoriously hard to get to do something new. It hasn't been done before, especially when it's a complex task.

2:11:08And, you know, the bigger amount of code you ask AI for, the more it leaves you with just a massive code that sort of works, right? And that's the problem with code. It's like 99 % works, but the 1%, it might be harder to get to 100 % with AI than with handcoding. And everybody who's looking at this topic should actually try using the coding assistance on hard problems and see how they do there. Yeah, I think it for me personally, it makes it more fun and faster to generate boilerplate code. So I can focus on the harder decisions, harder big picture decisions and harder innovative decisions and all that kind of stuff.

2:11:43And just makes programming more fun for me because I feel less lonely. Yeah, I have, like even when it gives the wrong code, I can like, oh, okay, well, that's a way to do it. That's interesting. And then you could talk to it. Maybe that shows something about the programming experience that it is in part sometimes a bit lonely. The topic of boilerplate code is an interesting one because the mere existence of boilerplate code is a failure of programming language and of the idea of creating software modules. You ask AI to create a sorting function. Great. Now you have another sorting function that might buggy alongside the million others that different people have written.

2:12:26It would be better to have a sorting function that's been written and tested and optimized and everybody relies on it. And more modular software, I think, will actually reduce the opportunity of AI because people doing programming will largely be solving unique problems. They're actually hard problems in themselves and not just connecting other widgets. Yeah, I think as in many cases AI will just help improve the human systems by shining a mirror to ourselves. I have to apologize for the pot head question ahead of time, but you've been, let's talk about the metaverse broadly. You've been a big proponent of the idea of the metaverse.

2:13:03We'll talk more specifically what that means today, but we've been talking about simulating reality better and better and better. So the pot head question is, what does it take to simulate reality to the level we see around us today. How far away from that are we dissimulate this ultra realistic immersive fun reality that Earth is? What does it take? We're going to get trackingly close over the coming years. Certainly less than 20 years. If you look at the progress, what areas where we have achieved total photo realism and what areas where we fall short, we're getting very close in all non -human interactions you see in the world walking through a jungle or a city or the lighting.

2:13:51It's very close and that might be just a few years away but then all the problems involve humans, human dialogue and intent have a much much much higher bar that they need to meet to satisfy our brains and convince us that they're realistic and or real. And yeah I think that's going to be the primary challenge of graphics development and simulation development over the coming decade. So the realistic humans, that's going to be the bottom line. Yeah, so and visual and behavior too. So everything. Yeah, I was asked about this about 10 years ago and I said that even if you gave us an infinite amount of computing power, we couldn't simulate realistic humans because we simply don't have the algorithms.

2:14:32We have no idea how to simulate human intelligence and that was absolutely the case then, but it's not really true anymore. You know, what we're seeing with Generative Text AI is not only at a level that you could say that it's actually doing a pretty good job of simulating a human, at least at humans at the text level, not at the emotional level yet, but at least at the level of words spoken and find more and more ways of training on more and more scenarios that you know, you might have a very, very compelling human simulation going on in the next five years even. I'm not saying that's a good idea, but I think the archive of the technology is inextricably heading in that way and it's heading a shocking, shocking rate.

2:15:14You know, we don't say this enough, but the current state of our limbs, I mean, if you put Alan Turing in conversation with Chad G .P .T. I mean, it really passes the Turing test. Like, almost definitively passes the Turing test. Of course, we like keep raising the bar. Well, the Turing test is not real. that is not useful to us, whatever. We just keep raising the bar for AI words, it's always going to be less or than. But yeah, you have increasingly ultra realistic faces and bodies combined with increasingly moving and powerful full of emotion speech text. I work with this amazing company called Level Maps.

2:15:58It does text speech well. There's companies that specialize in bringing text to life. Right that that's going to increase different companies do that very well And so you and then all of a sudden you have this synthetically created Scene where human is speaking and you're moved to the point of tears Because of the scene beautifully lit face in the full darkness the emotion the drama of the scene Yeah, I think you're saying five ten years maybe twenty yeah Yeah, absolutely. We'll definitely see it in our lifetimes. Increasing the level of pot sadness in my question, do you think we might live in a simulation?

2:16:40And if we do or don't, how hard would it be to build such a simulation where we're fully convinced we're in it? Well, I don't think that these questions are necessarily unanswered. Well, I'd like to see more actual effort to ascertain, like what is the underlying mechanism of the universe. And I don't think we're here for no reason at all. I think the world's a pretty cool place and the fact that we can exist and you know the laws of physics and especially a standard model of physics and all the parameters that lead to you know these atoms and life evolving in the presence of thermodynamic gradients.

2:17:17That's really cool. And I think it's a worthy field to study more about that holistically. I don't know the question of are we living in a simulation ourselfs always boils down to a well. If we are living in simulation, what are they living in? Because at some point there has to be some base reality. Or one of the philosophical theories that was put forth seriously was that there is no physical reality. If you have a system of equations, you know, such as the laws of physics, then all possible evolutions of the dynamical systems under those equations kind of have the physical reality. So we just kind of a manifestation of laws of math rather than needing an actual universe around us.

2:17:58I like to have a lot of that philosophy. As we get C .A .I. becoming smarter and smarter, and we get closer and closer to really capturing the full laws of physics, these questions become quite a lot more compelling. You know, you start to think if we're not living in a simulation, what are the things about this reality that are not simulatable? So, what are the big mysteries around us? It feels like the physics is simulatable. It feels like a lot of the incredible stuff that we talked about while super nice seems simulatable. But then there's the flame of consciousness, the feeling of it, whatever that is that lights up in our eyes as humans.

2:18:38Maybe that's not simulatable. Maybe that is the thing. Maybe that's a thread that connects to the explanation of the mechanism, as you said, of the universe, that's really important to understand and we're completely clueless about that mechanism. I mean, a lot of the religious texts sneak up on what that mechanism is, but we're still mostly clueless. We only have these like leaps of faith and believe in what that mechanism might be. So, you know, the whole idea of nested simulations, perhaps, given sufficiently advanced technology is kind of mooted, such that if you wanted to simulate another reality, you're kind of just actually creating the reality.

2:19:16You're doing quantum mechanical operations that would produce the same result anyway and you're running them at full performance. So it's not really a nested simulation. It's just another thing that's happening in the universe. So that would be interesting. But I think it's ultimately a theological question. And because it's no longer cool to deal with theology as part of science. There's not been much work on that. You can't publish results on those topics in a respected physics journal. So I think it's kind of been set aside. But it's interesting to note that the laws of quantum mechanics themselves have a place for, you know, God or souls or whatever external source of input you might want to attach to such a thing.

2:19:58And that, you know, that there's this idea of quantum ways, function, collapse, that when we, you know, look at a quantum system evolving in perfect superposition of any possibilities and you go to observe it, you actually just see a specific possibility. In a multi -esit experiment, the light ultimately ends up being observed going through one slit or the other. And that's a place where there's this random number being injected into everything around us. You know, the trillions of trillions of trillions of times per second and everything we're observing. And if you want to attach some external input, well, there's a place.

2:20:32Yeah, it could be seriously accessible to the rigors of science, but we just know so little there. Yeah, it's funny. In that area, we know nothing more than cavemen, no whatsoever. There are lots of quantum mechanics and we have computers that maybe are soon more advanced than we are. But we just don't have any answers to the fundamental questions about life, the universe, and everything. Do you think more practically? Do you think we'll create video games, video game worlds, or the metaverse variety in which humans will want to stay? So, to me, this kind of discussion of a simulated reality, the real test of immersion is like, not wanting to go back to the real world.

2:21:24As a perfectly healthy, excited, normal human being, choosing to stay in that world. How hard is that, do you think? Well, I think the technology is coming and then there's a human question of should we go that far? Should we? Yeah. Certainly as a game developer ourselves, Epic doesn't aspire to that. We make fun games. And the ultimate manifestation that we found is fun games that people play together to have fun in between, you know, work and the other things in their real lives. But as simulations get more and more realistic and the capabilities become more and more real, I think we have to ask ourselves some hard questions about how should humanity operate in that space?

2:22:06Where are the limits that we should go to and what are the limits we should set? Yeah, I think there's, uh, there's going to be some hard questions. And I think maybe I'm just being a human centric here, But there should probably be some legal bounds on two things. Sort of not creating a reality in which humans would want to stay too long. Sort of yeah, focusing more on the game side. And more importantly, not creating simulations of humans that could suffer. to me, you know, as we talked about creating ultra realistic humans, eventually that means creating humans that can suffer, that can fall in love and experience heartbreak and loss, that can fear death.

2:22:59And the more you simulate that to the full reality of the human condition, the more you get to this place, we have a simulated humans that is able to suffer. I think legally speaking, I think you have to get to a place where that's not allowed. Like there is a lawn, you can't cross. And that's a hard thing for humans to deal with. That's going to be some interesting Supreme Court cases. Once you create a human, sufficiently realistic to where they can suffer means that human could be tortured. and do terrible things to that human. That's artificial, quote unquote, boy, that's still feels wrong.

2:23:48I don't know what that is, but you feel wrong to torture a simulated human. Now when you play a video game and it's a shooter and everybody's having fun, that doesn't feel wrong. But there's a line and that's going to be a fascinating line for the Supreme Court to explore. Oh man, what an exciting future we're living in, huh? Yeah, you know, I think the thing to appreciate is like game developers have just generally been on the good spirited side of things. And if you look at the worst things that people do in popular video games today, it's like what you're out of bank and GTA. But it's It's clearly fictional and all -en -fun and not serious and over the top.

2:24:34You know, as things get more realistic, especially simulation of humans, yeah, there are some hard questions that will have to be answered there. But I think the thing that all games all pros need to remember is we're here to make people's lives better by entertaining them, providing them with fun and a diversion from other things and being a part of their lives and not trying to be too big or being too much and not trying to provide an alternate to reality but to just provide a fun source of entertainment. Like there are many other things that people do for fun. So you spoke in like I mentioned about the metaverse for many years.

2:25:12Let's step back. What is the metaverse? And speaking of fun, Fortnite, just conjures a millions of people, just enjoying themselves in this huge scale social game. You could call it a metaverse. Maybe you can describe the different flavors, the layers of how you see what the metaverse is. You know, the metaverse is an idea whose stock price goes up and down depending on who who says what on what day and some have an ability to drive it way down by opening their mouths. What ultimately this is about multiplayer, social gaming experiences, you and your friends getting together in a 3D world and having fun together in any way you want.

2:26:03If you're playing Fortnite Battle Royale, I can mind you that is capturing the essence of the metaverse and it's especially in Fortnite when we got Sony on board so that all players on all platforms in Fortnite could play together, could voice chat together, and could be part of a single game experience. It really took on a new nature, which was not just like a multiplayer game and, you know, with Heritage from Doom, but also a true social experience between you and your friends. And, you know, Fortnite Battle Royale was just one manifestation of that. Another one is like, Rec Room VR, where you're standing around in VR with friends playing billiards and or shooting hoops and or doing other, like, light entertainment things.

2:26:40I think every game that has a huge number of players who play together socially as part of their, you know, entertainment lives I think is is really getting at the core essence of the, you know, aspiration for the metaverse and you know We're still in the very early days of it. You know, I was on the internet and like 1992 or so and you know, it was a pretty bare -bones thing I think when we look back at the state of gaming, the A -Wall was realized that there's a lot further to go to get to the ultimate version of it. But I think it's all on track. And I think it was the time we released Fortnite Battle or that when started playing together all of the people at Epic and Squads and experiencing that world that we realized that this trend was a foot and that we needed to do everything we could to bring in other creators so that anybody could pile onto the work we were doing by creating their own worlds through Fortnite Creative and UEFN and creating more games and more genres that people could play and ever expanding the repertoire or fun.

2:27:44Yeah, I would love to sort of talk about different aspects of that a little bit more because, you know, Epic has created a lot of amazing games on real tournament, Gears of War, but the game that I think is fair to say that transformed the gaming industry was Fortnite.

2:28:02Fortnite Battle Well, Fortnite has humble beginnings. In 2011, we've just been in the final days of finishing one of the gears of four games. And we wanted to explore ideas for new games. And we had a general idea that we would like to build some smaller games, online games, or to learn more about that space. And not just have one single massive game and production at all times and only one. And so everybody in the company was given a week to form a team and work with whichever co -workers they wanted and build a game. You know, using Unreal Engine. So you can actually build something pretty interesting in a week.

2:28:44And one of the teams built the very first version of what became Fortnite. The very first version of it had a different art style, but it had the idea at the core that you were going to build Fortes by day using this building system. then night would come and you'd defend the forts against zombies. Nice. And, you know, the longer you could go, the more elaborate forts you could build, and the more survival, you know, waves you could withstand, and it would get cooler and cooler at the time. Nice. And, you know, that game was in development for a very long time. We always saw the potential, just the building aspect of it was incredibly fun.

2:29:17But we've made different pivots at different times. At one point, we moved to the current Fortnite art style away from kind of more of a realistic style. So, I made it more in the Pixar vein of cool stylized characters. What was that decision like? As we should mention, Gears of Wars is this incredible, shows off the graphics to the fullest, different than the artistic style of Fortnite. It's amazing that the same company would make this fun, silly, graphic style of Fortnite. People come to Appet because they want to work with the best people in the world. and they artist bring a lot of different personal art aspirations and style capabilities in many of them are very multi -talented.

2:29:57It can bridge photo -real content or highly stylized content. And a lot of the best artists on Fortnite were a lot of the best artists and years of war to change styles but continue doing awesome work. We'd realize that Fortnite could be really mainstream and it could be a game people play for a long time. And so having a more visually pleasing art style that's not as stressful as a Call of Duty game where you're constantly like pixel hunting, you know, a dark scene for, you know, somebody's rifle scope. That was the goal. So, you know, a few of the artists got through and defined new arts, try only move to it.

2:30:29And at different points, it evolved towards being kind of like a light MMO, like Destiny, with rather complex RPG and stat systems. And that evolved into a, you know, kind of an MMO -like tower defense game, MMO -only, and that persistence of items and stats, which became Fortnight saved the world mode. Which we launched in early 2017 and it was a moderate success. It paid with its budget and we'd come out ahead. And then at the same time, the Battle Royale genre was booming. PUBG had just come out. Tons of people out there playing that. They were like, oh, this would be so cool if it had Fortnite building.

2:31:05And so we assembled a team in a war room, like 30 people in one big room. And they worked insanely hard for four weeks to build Battle Royale. So nice thing is all the content for Fortnite had been built over the previous seven years. They had a huge library of content, but no gameplay of the type they wanted. They had to build it all in that four weeks and chip it. And that put Epic on an exponential growth curve where we went from 300 employees to you know, two thousands of employees and went from about a hundred million dollars in revenue to billions of dollars in revenue and you know, kind of became the center of the gaming world at the time.

2:31:40Can you actually speak to the technical challenge of going from most in not online, large scale, gaming platform to being able to support with Battle Royale, a huge number of people playing with each other at the same exact time? Like was the technical in the four weeks, was the technical challenges there that had to be overcome? Since 2012, we've been building online back -end system to support player accounts and log -in And all of the different systems there needed to make a multiplayer game. And we'd been building them to be scalable. And by some miracle, we built them stable enough that they were able to scale up.

2:32:20And so the online team was responsible for patching that code, spent a year of intense work getting it to scale from like 40 ,000 concurrent users to 15 million concurrent users. Yeah, I mean, they're scaling, they're scaling. That's a lot. Yeah, it's immense. but they'd done such an awesome job of building the foundations that it was tractable, it was doable. If they hadn't done that then the company would have died. You know, Fortnite just wouldn't have been playable and the whole thing would have failed. I mean there's just so much detail there that makes all the difference because I mean that's what Spotify has talked about that like the latency.

2:33:02It's like how quickly you can deliver the song changes the product from being this shady thing that I'd rather pirate the songs to like this is good enough to where I really enjoy the experience I want to use it. So like yeah, that's really important to create an experience for 15 good current users to where they're not where it's not lagging or actually works. Right? Is there something you could say to the server like how difficult that is to pull off? You know, the trend nowadays for building online services is microservices. There's not one big server that handles all of the interactions with Fortnite.

2:33:45There's game servers running 100 player game instances for each battery out session and then there's an account server and many instances of it all talking to a shared database and there's hundreds of different microservices talking to each other. And so scaling as a matter of identifying what are the bottlenecks in that system and making sure that each one can scale and has enough redundancy to be able to handle the load. Well, thank God for Amazon Web Services and Cloud testing because Epic went to 15 million concurrent users without buying any server hardware. We were able to just call up Amazon and say, we need more.

2:34:24And there was a period of time there where Fortnite was undergoing this exponential growth and we'd find like one week we ran out of servers in Brazil during a heavy weekend of play and next week we had an even heavier weekend of play and there were servers to handle it. Like somebody at Amazon had dropped shipped you know millions of dollars of server hardware into Brazil and turned it on just in time for Fortnite to need it and you know there are a lot of unsung heroes in that story many of than we have never heard of. Yeah, I mean, behind AWS, many unsung heroes. It's like so much of those folks who run the modern internet.

2:35:02All the incredible services, the games, the services that we take for granted are currently being run on AWS or were originally, and Google Cloud and so on. Yeah, can you speak to how much money Fortnite made? So this is one of the greatest successes in the history of video games also. Fortnite makes billions of dollars a year. And that's the majority of Epic's revenue. Do we have a robust business around Unreal Engine licensing, Rocket League and Fall Guys, and some other tools like the Fab Content Marketplace. But the majority of it is Fortnite because we've chosen to reinvest heavily in building what we think is the future of technology.

2:35:44We're spending more every year than we're making. And for a bit of time, we were spending over $1 billion a year more than we were making, and we found that to be unsustainable, and we want to do some painful layoffs at that time. And then we stabilized, and now we're spending several hundred million dollars a year more than we're making, which we can very well afford to do, because we have billions of dollars in the bank. Thanks to a combination of the profits we made, when we were a very small company with a very big game and because of the investment we've raised. We're not an oil well pumping oil out of the ground where we discovered oil.

2:36:18We are growing to be a future technology powerhouse and we think the 3D space and the future of real -time 3D simulations is going to be one of the major facets of technology for humanity and we're all investing in that. Yeah, it's exciting to see that you're investing in a long -term future sort of taking the risk of doing the research and defining the next chapter of Epic. So using the successes of the day to invest into the successes of tomorrow might look very different, like completely different. And part of that is investing in the developments, the research and the innovation in the Unreal Engine.

2:36:54That's right. We're a company that can start working on a project knowing that we won't reach foration or make any money from it all for three years, four years, five years. We're totally okay with that. And that's the cycle that's fueled our growth over time. It's constantly investing in the future and being a serious company that's doing serious R &D, that side by side with shipping and maintaining products and earning money from them. So can you speak to, I mean, there's several directions here. So one of them, sort of the future evolution of this idea of the metaverse. So potentially creating communities.

2:37:34So Fortnite is this incredible, huge community of humans interacting. But your vision is to go outside of just one game. So what is the, the kinds of standards that you're thinking about, uh, building such that people can sort of have an identity almost traveled between games and that kind of thing. Let me start with the present of gaming and why it sucks. That's a good start. Sure. Fortnite is an awesome thing. You go into Fortnite, there's, you know, a hundred million monthly active users. There, a huge number of your own friends are there. You can play with them. Go from experience to experience seamlessly without leaving the app.

2:38:15There are a hundred thousand different islands you can play on and sound them really awesome. and they're constantly ones coming out and constant things to do. If you wanna play Roblox, all right, you quit out of the Fortnite app, you launch the Roblox app, different program, different friend system, different account names, your username and Fortnite, and your username and Roblox, are different names and they're not connected to each other. So you have to remake all of your friends and then find different things to play. And now the controls are different. So you have to relearn how the joystick mouse keyboard, controller works in that experience.

2:38:48And you have to go from place to place. and you buy some stuff in Fortnite and it's really cool and you can use it anywhere in Fortnite and then you go in Roblox and you don't have that stuff. You have to buy different stuff. And that stuff only works in Roblox and same with Call of Duty. It's another isolated place. And same with World of Warcraft and same with League of Legends. And every other, every place you go is its own unique place, different friends, different account names, different people. And there's no social cohesion between them at all. And long time ago, consoles set out to solve this problem by creating their console wide friend system in account.

2:39:18So your friend on PlayStation in one game is your friends on PlayStation in another game But only on PlayStation if you're on Xbox you can't see PlayStation friends And so you have two basically orthogonal and cross -cutting divisions of the world into fiefdoms you know Which were not created with bad intentions but arous and are you know Separated isolated islands one is the platforms and their social services Xbox PlayStation Nintendo its team Epic if you had it to the list and the other is these different games people play and you know because of this Weird historical artifact. We're we're left in the world where people can't seamlessly move from games to games bringing their friends and their stuff So the solution to this is to Federate and connect all of the systems together all the players on all the different platforms can be recognized by their name and put the at sign in it so your Xbox names and your Fortnite or Epic names and your Steam names can all live together and interact together in single space.

2:40:19So unifying the social ecosystem is one thing that needs to happen. The next and bigger challenge is to unify the economies too. No, I'm not talking about like a sword you have in World of Warcraft should work in Fortnite. Every game every game is gonna have its own gameplay rules and a lot of games are gonna have stuff that only works in them. But you know, there's a huge set of games that have in common the idea of a cosmetic system that does not affect gameplay outcomes, but is purely cool looks and cool appearances. Most of the major multiplayer games have them. And you know, if you look at games, you could probably bundle together about 70 % of them and say they're similar enough that they could actually underoperate.

2:41:05You could own an outfit and Fortnite, and not fit in roblox and the same outfit and maybe Call of Duty and maybe you know 100 or 200 other games and actually expect they would work together. And you find other kinds of items are probably under offerable too. Like Fortnite has car outfits so you can you know buy different appearances of a car and when you find a physical car in the world of Fortnite if you're the first person to get into it in that session boom it takes on your you know your chosen car if cosmetic. And now you have a cool car that's identifiable as yours. You know, we realized early on with Fortnite that the key to making Fortnite work as a creator of a colony was to open up the revenue from the item shop to all of those sources of engagement, right?

2:41:50There are two big things happening in Fortnite that make it work as a product and as a business. One is the game modes, Fortnite, Battle Royale and all of the user modes and everything else, our sources of engagement. People play there because it's super fun. And because they're playing there, they're wanting to buy cool stuff to make their character look cooler. And so you have all these sources of engagement, but the sources of engagement don't make money directly. You can't spend money in Fortnite Battle Royale to buy a game item. Like, everything's, you know, the gameplay is not paid to win, and it's all just a game.

2:42:23So we make money from the item shop. And the item shop only adjusts because of the sources of engagement. If you weren't playing Battle Royale, trust me, and W would want to buy a Fortnite outfit. If you weren't playing any Fortnite games, why would you buy Fortnite outfits? And so you have all the revenue in this item shop economy and all of the engagement in this engagement economy and the thing that magically makes a Fortnite creator economy works is revenue sharing. Item shop spending, according to sources of engagement, buy engagement. If you buy an item and you've played, you know, 40 % of your time in Battle Royale and 60 % of your time in these user modes, the amount you spent, And the portion of that that's profit can be separated out and paid out to all the different creators who participate in that economy.

2:43:05And that's why Fortnite scaled up to a $400 million creator economy, SFR, and it's growing. It's amazing. One of the really critical things we aim to do in designing that is ensure it's a creator economy that could scale to other companies, other ECU systems. And say, right now we have many industry standards bodies. one standardized game ratings, age ratings of games, another standardized file formats for the web, another standardizing file formats for 3D, like chronoscrups in the metaverse standards form. If we had a standards body, standardize what are portable outfits in games. Game outfits you could buy in one game that work in another, what are their dimensions and what are their capabilities and what can you do and what can't you do and so on.

2:43:52Then you could have an item economy where every game agrees to respect each other's item purchases of that sort and Revenue is shared between ecosystems as well. That would be incredible. That would be so amazing. Is there first of all just it seems silly Maybe for people who don't play video games, but an outfit is an important If an outfit could be persistent across video games I mean, I don't know. What's the purpose of life? Why do we wear clothing? Clothing is a part of our identity. It's how we present ourselves to the world. It's, you know, I wear this stupid suit and tie. It feels good.

2:44:31It feels good when I put it on. And even like the other outfit, I have to outfit this. And then a black T -shirt and jeans. And it feels good to wear that. It feels like me when I look in the mirror. Okay. I know that guy. and to be able to have that outfit go from game to game to game maybe across the years that would be wonderful. I wonder if you could just even comment could there also be another standardization about the value. So for more complicated items so you know take a sword from Diablo and transfer to a gun in Fortnite But based on the value, some generic concept of money. So the value of a thing in one game versus the value of a thing in another game, where you're almost operating in the space of value versus the actual items, or is that already getting to general?

2:45:32I think this can be done. We did a lot of analysis of the Fortnite economy and found that some Fortnite experiences lead to correlate with higher spending than others. Battle or Elle is relatively strong in that area because you see your character from behind and see all of your other characters from the front. and you have lots of opportunities to really see who you are until you're in direct with other players. And a lot of games have that characteristic. One funny anomaly stood out. There's this game that was one of the big breakthroughs in Fortnite only up. It's a game where you're just climbing up in the up by following pads of stacks of objects and things.

2:46:19It was just stupid fun. Everybody loved. We found people weren't spending a lot of money on outfits when they were playing only up. It's kind of intuitive actually like you're not seeing other players like if you see anything like you're you're seeing They're but as you're like trying to catch up to them jumping from object to object and they're above you Um, and so you know it wasn't a mode that showed off outfit very much But you could you know you can determine the economic correlation between a game mode and spending that's so fascinating I mean for tonight is gigantic economy where you could do those kinds of studies you can understand markets The digital markets as they emerge amongst humans and what they value and from that value you can probably have a very stable kind of money that emerges Yeah, I think so you don't need like an alternate currency system You know unfortunately a bunch of ideas have been completed because people are trying to hype up different things But you know this idea of large scale multiplayer or social gaming You know that notion of the matter verse.

2:47:18Yeah, there's There's 600 to 800 million people playing that kind of game every month. So like you know that's real and that's happening and it's very much underway. VR has a much smaller audience. I don't think you need VR to have anything like this. VR is hardware that may or may not enhance the experience for some usage cases. For some it will probably be better and for some it will probably be worse. But certainly there's not any set of battle royale players flocking to VR. to VR. The other thing is NFT is trying to equate digital or cryptocurrency to the matterverse. It's just a way of denoting money or value exchange.

2:48:02You can do that with money or you can do it with NFTs or whatever. But there's nothing about this future digital economy that fundamentally requires cryptocurrency or whatever. What you need is interoperability. Interoperability can happen through a blockchain. It can happen through a database. It can happen to your standards bodies, what's defining standards and protocols and we've been doing it for hundreds of years since the railroads were standardized and you know it's not something that totally requires a novel technological solution. Yeah, I mean even on the topic of cryptocurrency, it's very frustrating you know blockchain and crypto is a really powerful technology that I think can enable a lot of the things we're talking about.

2:48:47But so many people use it to try to make money to create these bubbles and the hype and the meme coins and the song and so forth that becomes much less about that drifts far away and rapidly from things that are actually of value, which is the experience of playing Fortnite and how you look when you play Battle Royale. That's, I mean, it's all ridiculous to say, but it's true. That's valuable. That's, that's like, you know, you have like gold in the physical space. We know that holds value. How, how your outfit looks like in Fortnite, that as, as you're saying, pro -rubbly holds value. So you want to connect like a standard definition of money value to that and not let it become this hype thing which NFTs that you mentioned are just become that.

2:49:44It quickly drifts away into the land of when people trying to buy and sell and try to make money versus like staying close to the thing that people actually value. Forget the money, it's more about exchanging valuable experiences or things of value so you can play Fortnite and then go to another video game and continue the valuable experience and then come back to Fortnite and do that kind of thing. So you're saying there might be a way to do that and to basically create standards. The way the web has different standards for displaying websites and all this kind of stuff or the communication that's required on the networking side.

2:50:30So all the different standards that make the web work, there need to be those kinds of standard. Like what would those those standards look like to enable the metaverse? We need a lot of different things. Um, the one area where the standards by so been very successful in creating working standards implemented by all the major engines today is in low level file formats for data interchange. Mm hmm. Yeah, the web has PNG files for 2D images, um, and in P3 files for audio. And 3D has the Pixar USD file format, the universal scene description, which is a description of the scene graph. The entire set of objects in the scene and all of their parameters so that any engine that supports those features could import that and then render the same scene as the engine they came from.

2:51:15You know, large parts of this work across Unreal Engine and Yandy and Blender and all of these 3D package of different sorts. And there's the GOTF texture format, which stores textures and geometry and other low -level data for 3D objects. When you see a Fortnite character, that file format together with the image file formats can store their static appearance, the shape of their body, even their animations, and their different poses, and the appearance of them, the different standard file formats could store all of the sounds they make and their emotes, but we're still missing a bunch of pieces.

2:51:50The biggest missing piece is the programming language that's at the center of standardizing the matter of verse. Now if you look at the web, the web is a combination of a bunch of different technologies. The two biggest ones are HTML, which describes the 2D scene graph or the 2D layout of controls and objects on the web page. But that's just static data. It's just a non -moving, non -animating web page. and then you have the JavaScript programming language, which is used to manipulate that, to display things to the user and to implement anything you could implement and could. So it's a little programming language that runs in your web browser.

2:52:27And the metaverse needs something that performs that similar role. But the metaverse and 3D gaming in general needs something that's rather more powerful, more safe, more scalable, and more capable than JavaScript. because the metaverse is actually more difficult technical problem than a web page. A web page like an app is just a single bundle of code and content that somebody accompany has prepared and they release it and it stays exactly what it is until they release an inversion and it's upgraded from version to version as it goes. But the metaverse needs to be a composite of code and content built by millions of different people that could potentially form a seamless world together.

2:53:11Yes, fully distributed collaborative. First of all, also the amount of data, it doesn't have to be that way, but websites show very little information. The metaverse, even when it looks like something like Fortnite, just the amount of information that's conveyed in the scene graph, as the individual players are collaborating is a huge, huge, huge amount. Yeah, the highest detail of Fortnite updates amount to about 60 gigabytes of data. And, you know, that's just a small part of what exists in the Fortnite Creative Economy. And if you look at what this might be in a decade as standards emerge, you might have exabytes of data out there.

2:53:59Fortnite Better Oreo is, I don't think the ultimate manifestation of gameplay that will, you know, ever be invented. What we've seen time and time again is that as we gain more technical capabilities, graphics gets more capable, CPUs become more performant, web services become ever more scalable. We've seen new genres of games that emerged that weren't possible before. And you know, doing a mushroom in the era of Deathmatch, the first time 3D multiplayer game was even possible at all. You know, the early Battle Royale games starting about 10 years or 15 years ago, only became possible back then.

2:54:36You couldn't have built one 20 years ago because you just couldn't have rendered an environment that's as large as a VR game with that many players, with that level of interaction and performance. It was just not possible to run it. So you guys, certain level technical capabilities in the genre came out that proved to be by far the best shooter genre ever invented. But I think they're numerous, numerous, more genres, some of which are better than any of the existing ones that will be invented as we get more and more capabilities. You know, some of the capabilities we're lacking now are the ability to build environments and game simulations that span more than it worked in a single company can possibly create.

2:55:14And you know, you see the kind of the birth of that idea in Fortnite and Roblox where there are tens of thousands of creators each building content, users are playing meaningful amounts of it all. And so there's an ecosystem that's scaled larger than company, but it's still very much you go into one island and you play that creator's work. The other direction of its scalability is putting more and more of people's work together in a seamless, continuous play space for games where that makes sense. You know, you can imagine a game taking place in an environment is the size of a continent or Earth, in which you can go from place to place and see different areas which are maintained by different people.

2:55:51So you go into different spaces, the game rules are customized according to that and you can go from experience to experience and instead of having just one company's authorship ever present wherever you are, you know, you'd see you be driving a car built by one person carrying weapons built by 20 other people and you know taking place in a simulation and an environment that's built by thousands of other people, you know, and working for separate companies or their own entrepreneurs or India's or enthusiasts all working together simultaneously. We totally lacked the programming foundations for that.

2:56:27The kinds of code you would need to right now to make that happen are just not practical. So we're investing massively in building new programming language technology around verse. And we propose standards for future metaverse programming that we hope will solve those kinds of problems and make that kind of world possible. So first of all, that's a super exciting future where you know it's not hundreds or thousands, it's millions of creators that can just create different small or big elements of a world as big as earth. Just if you sit or close your eyes and imagine that world, that's really exciting where it's not a centralized company controlling the release of a particular island or so on.

2:57:15It's people constantly dynamically modifying all the islands of reality in this digital world. So if you could speak to some of the technology that can enable that, you mentioned the verse programming language. Verse all, also, how legit is it for you? CEO of Epic Games. To be a co -author, the programming language theorists are losing their mind. So co -author on a paper that's describing some of the sort of new details of our programming language. So maybe you could speak to this programming language called verse. It's a functional logic language. What is it? What are some cool features of verse?

2:57:59Versus the programming language that we're building for large scale simulation programming. It's designed to make it easy to write code that can scale up to not only you building a Fortnite island, but you building modules or components that can be used by millions of other programmers and coexist in a huge environment. And also can scale up to a huge scale simulation. Some games will be small. Badoirel might find that, you know, that 100 players is actually optimal. It might be the 1000 player version of Badoirel would be But I bet there are thousand million and tens of million player experiences.

2:58:40They're even better than that that will yet to be discovered. And so, wait a minute, tens of millions of players together. Sure, we've had a fortnight events that have attracted 15 million concurrent users. But the fact that they're all divided up into servers with 100 players each for those events isn't really a positive. of it's just a limitation of the technology. Tracing back to Unreal Engine 1 and its single threading decisions. If we could build a concert where all the concert participants, potentially tens of millions of them, could participate together simultaneously and see that there's that massive a crowd.

2:59:18And they could all do interesting things and interact with each other. That will be way cooler. Just sorry. I'm just loading it in. Just imagining together in one scene graph, 10 million people. interacting. What a cool world that is. Sure. Well, you know, 10 million people, you have less than 10 million pixels on your screen. So it was the Nyquist sampling theorem say it says that you don't need full overhead for every player. You need to render the players you're around you in some approximation of everything else. Yes, Tim, but there's also a networking component. Like, yeah, you're speaking to the rendering, but like, oh boy.

2:59:55There's a lot of work that has to happen there, but you know, this is what we do for living. We solve hard problems. I understand. Because if they're easy, then other people could have solved them already. That's really cool. Just sort of the possibility, the vision of that is really cool. Even just, you know, even 100 ,000 people are like 10 ,000 together just to, I mean, there's a reason in the physical world when you go to a concert and you have all those people around you that energy or you go to a football game, that energy, as long as anything else, and if you can and bring that energy to the digital world.

3:00:28That's amazing. But anyway, so sorry. So what on the technology side of bringing that to life and the programming language side, can you continue as I really interrupt you talking about verse? Versus a functional logic language, because we think that's the way to make the most simple and powerful language simultaneously. Back in the 1970s, the programming language designer who built Pascal. One of the early programming languages, Mike Lossworth or Nicholas Worth, as Americans might call him, stated the sprint's bold, their programming language should achieve a high degree of power, not by having a lot of features, but by having a small number of features that work together and can be composed together arbitrarily.

3:01:18So that you have to learn a relatively small set of things, and And then the real knowledge comes as you learn ways to combine them to achieve bigger and bigger programs. And so there's long history to the field of programming languages, but in the 1950s, the first programming language designers got together in the first standardized language called algal. And there was this meeting in 1956. Very few people even know that, but it's where all the major foundations of modern programming languages were decided on, that the C family of languages inherited. And so we're very much living in a world that was defined by them.

3:01:53And thankfully they got a whole lot of things right. They defined how functions should work, how variables should work, and how recursion should work, and thank God they got those things right. But they got a few things wrong. And versus trying to fix those, and that's the functional logic part of it. The interesting thing about functional logic language is that in an old school language, an expression produces a value. In a functional logic language, expression can produce 0, 1, or multiple values. If it produces 0 values, we might say it fails. And if it produces 1 value, we say it succeeds.

3:02:26And if it produces multiple values, it's kind of providing a set of values you could iterate over. And so there are a bunch of features in today's programming languages that are defined in an ad hoc way without really thinking this through this. 0, 1, or many values way. And that's the problem that functional logic language is addressed. And the most basic example is an if statement in a programming language. If some condition holds, then do this thing? Otherwise do that thing. And in a language today, this is done with variables of type Boolean or expressions that produce Booleans. We have Boolean variables that are either true or false.

3:03:03We have expressions that evaluate to Booleans. And so you can express the condition as a bunch of these features together. but you've lost any computation you've done in doing that Boolean expression evaluation. So in a functional logic language your condition wouldn't do that. It would either succeed and produce a value or it would fail. If it succeeds it goes to the then branch. Your operation succeeded. Now you're running this one batch of code and if your expression failed then you go to the else branch. But the exciting thing about that is your expression that succeeds or fails can and produce values and bind variables that are then accessed by the branch.

3:03:42So you can write a conditional where you can only get to the inside of the condition to then if a bunch of variables have successfully been bound to variables. So it lets you a test of some conditions hold and then use the results of those tests. And that gives you a much higher level of reliability. And then a for loop, in a traditional language, it's just a bunch of imperative code that's 12 and together to produce a bunch of values iteratively. It's rather awkward to do complicated things in four loops and see often that with the ever more complicated constructs built to work around that like iterators and other things.

3:04:15The idea of functional logic language is your four loop can just produce multiple values. And if it produces zero values, you go through zero iterations and it produces a bunch of values, you go through all of those as your iterations. Rather than having a bunch of nested loops, you can write arbitrary things that look like SQL queries in a condition or in a for loop that bind a bunch of variables, do a bunch of tests, produce a bunch of a series of results, and in some order that you're iterating over, and then you can handle all of them and produce a result. So you kind of gain the power of SQL queries, large complex queries of data structures, in a language that is much simpler in which your code is just performing simple iterative operations.

3:04:58And so it kind of gives you the best of databases and of regular programming in a much more uniform way. And the power of this is now users can write functions that not only produce a value, you can write functions that might fail. And so you can write a function that answers the question. The answer can be either yes and my value is this or no. And you can combine these together into arbitrary queries. And if you like, the funny thing is that this is not how C++ works. And so when we have Epic programmers moving over from C++ and writing their first verse code, they try to write C++ code in verse style and it actually ends up being convoluted code that's worse than good C++ or good verse.

3:05:40But after a few months, they get up to speed and they're writing really awesome code that's tighter and more compact than before. And with users who've never programmed before, but are learning programming for the first time in the context of Fortnite, it's really fascinating. You see, these users are learning this kind of as it becomes their intuition. They just assume programming works this way. And they write, they're writing way more advanced and interesting for loops and conditions. Then we're often writing internally because they've kind of grabbed the core concept. Yeah, I mean, you said a lot of really interesting stuff.

3:06:11First of all, it's very interesting that there's a bunch of people, a lot of people learning programming for the first time with verse, which is a very different way to look at programming. And some deep sense, as you're saying, a very intuitive way to learn programming. But there's a lot of properties about this being a logical language, one of which maybe speak also about confluence, but but also correctness. So being able to prove the correctness of a code is basically easier to write bug -free code. Can you just speak to that and the importance of that when you're building the metaverse? Yeah, right.

3:07:00So the challenge with the metaverse is, first of all, that it's a huge base of code that's evolving over time and written by many authors. So you might see every second a new module is updated somewhere and you expect in this live ever running simulation that never shuts down for everything to upgrade live in place and so one critical component that is the ability to release an update to something you've already published and be sure that it's backwards compatible with the one that you've already released And that's essentially a type checking problem checking that your new interface is backwards compatible with your old one.

3:07:35And that comes down to the type system of the language. There's been a lot of very interesting research on type systems over the years. Most of which hasn't ever made it into the C++ programming language, unfortunately. But you see several branches of that whole field. One of the really interesting things that Java and C sharp did in the early days, and then later abandoned and didn't bother update, was defining a very rigorous set of rules for it. If you publish a module with one set of types today, then what changes can you make that module for your future updates to it that don't break backwards compatibility?

3:08:10And that's the problem for type checking. You know, like say you have a function that promises to return some integer, when the future you could say that returns some natural number because every natural number is an integer. So that's a backwards compatible change, but you can't say it returns a rational number because some rational numbers are not integers. So the system ought to reject that kind of change. But the much, much, much more interesting thing about type checking was the realization. It was actually made in the 1930s. If you design a programming language type system in a very particular way, then it becomes not only useful for expressing types of variables.

3:08:47The traditional thing every type system does is say like variable x is of type integer. But if you design a type system in a certain way, then your types can express theorems, like mathematical theorems. You know, the pathagorean theorem is a cool one. But when theorem you might set up an program in a program is like the theorem that this function takes an array of integers and returns an array of the same integers, but the result is sorted. If you express that as a theorem and you follow this system of type theory, then you can actually require that anybody who writes that sorting function to prove that it has actually sorted its result.

3:09:25And so you have types or theorems and values constructed a certain way can be proofs of those theorems. And nowadays in mathematical nature, you see more and more theorems are being proven mechanically. Mathematicians are proving theorems in a way that is verified by computer to be a correct proof. In the whole days of math people would write down like language. If you look at all of Euclid's theorems, it was just language. It was just writing in 18th Greek to say the steps of the proof to convince the reader that the thing is true. Starting in the 1930s, mathematicians moved towards rigorous formal proofs in which there's a series of steps that can be mechanically verified or proving things.

3:10:04And when mathematicians say they've done a computer proof of it here and what they really mean is they've written the program in a proof language like Lean as a Theorem Proover, COQ as a Theorem Proover and there are several others. It means they've written a mechanical proof in that language that a computer is checked so that it's impossible to lie. If you say that you've proven a thing and the computer verifies it, then it's definitely true. And this is a feature of mathematical proof languages, but it's also a way that I think an idea that's making its way into programming programming language, which is gradually over time.

3:10:40And our aim for versus to be the first mainstream programming language that fully adopts that approach and that technique. And not only adopts it, but it adopts it in a way that's really user -friendly, so you don't have to do that. And the idea of this is that you want gradually more information to be incorporated in the types of variables. The property you want of a programming language is that if your compiler accepts your program and doesn't beep until you there is an error, then your program should work. Now, there are all kinds of ways humans can make mistakes there, so that will never achieve that ideal.

3:11:13We can get closer and closer to it by having more and more language features that enable the compiler to catch more human coding errors until the user what went wrong. And that becomes extremely important in the matter of the cost of fixing a bug that's made it through to runtime and is in user's hands. The cost of fixing a bug in a shipping program is hundreds of times higher than fixing a bug that you've just observed as you're running your code yourself. You just, once running on your computer, you just fix a line of code in your bugs fixed. When you have to fix it live, you have to release a patch.

3:11:48You have to release patch notes. You have to test the patch. You have to check for all the other bugs that my have been introduced. And everything becomes vastly, vastly more expensive. So, you know, the real aim of the first program and approach is to catch all of these errors is it compile time and make the metaverse a very reliable place? Do you see a world where like as compile time you could prove that the program is correct in some sense of correctness? Proving things becomes commentaryally harder as they get larger, right? And so the really important thing about this whole field is that you should be able to adopt these capabilities gradually and apply it where you really need it.

3:12:24Like if you're writing something like a cryptography algorithm, that's a good place to prove stuff. If you're writing a data, the compressor that's going to be used by an entire ecosystem, proving that that doesn't overrun memory is actually really important. And a lot of the reason that security vulnerabilities happen today is because in a different language, a compiler could have caught, we're not caught and see because it just doesn't have this feature. But we shouldn't see this as scary. Everybody working in a typed language like C or C -sharp or Java is proving theorems all the time, if you have a variable of type integer and you assign some value to it, you've proven to compile or compiler that that value was an integer because otherwise it would have rejected it.

3:13:07And so, as we add more and more advanced proofs, we'll get compositional properties flying out of our systems that they're easy to use and people prefer to use. If we might think in the future where we have AI helping us write certain kinds of code, the big problem with AI is you ask it to do something and ask you to write a fragment of code that does something, it might give you a perfectly valid fragment of code that compiles, but does the wrong thing. And if we had languages where you could say, write a function that sorts this array and proved it did that, it could actually write the proof.

3:13:43And if the compiler didn't beep with it, you could trust that it was actually sorting the array. And otherwise, you could go back to the AI and say, well, that didn't work. But getting to the point where we know that our programs do what we say they're going to do, or think they're going to do, is a very important thing. And by the way, I should mention that you sent me a note about Curry Howard correspondence, which I went down a rabbit hole in that that's a whole fascinating field, which shows the mathematical relationship between program and proofs. That's right. This is a result from the 1930s.

3:14:13It's one of the most important results of computer science. There's almost nobody knows about. But they did this rigorous breakdown of type systems and the 1930s formulation of programming and established that everything you can prove in mathematical logic, you can prove within a type system if it has certain features. And you know if you break down what is a proof? Well proof the integers exist is some integer like five is a proof the integers exist. So when you have something like var x and and you say x equals five, well you're proving to the compiler that five is an integer. You know that comes as a second hand nature, but you can prove more advanced things.

3:14:55If you want to prove that a pair of things are true, like theorem A is true and theorem B is true, then you need to provide a pair of values. One that proves theorem A and one that proves that theorem B. And that's the conjunctive law of proofs. And there's a disjunctive law too. And then there's an implication law for proofs. And it turns out that that's really satisfied by functions. When you write a function in programming language, you're saying, if you give me a dis thing, I will give you that thing. If you give me a parameter of type, something, then I'll give you a result of some other type.

3:15:27And if you write that by writing that function, you're proving that given one of these things, you can produce another thing, and that's a proof of an implication. With only like seven laws, you can construct all of mathematical logic in a type system. And one of the important things for programming languages that hasn't been given a potential is some aspects of programming languages are just subjective. They're just machinations of the programming language designer. you know, Nguido Van Rassam decided that Python should support indentation a certain way. And, you know, as long as you're doing what things like human notation and naming of things, there's always going to be that subjective layer.

3:16:04But there are other parts of programming languages. There are not subjective, but should be fundamental. And when you look at type systems, there is a way to do type systems that gives you mathematical proofs. And every other way of type systems that doesn't give you mathematical proofs is just worse. and should ultimately be rejected. And so I think one of the jobs of computing is to identify what hopefully actually done right in the past and what hopefully done wrong. And for everything we've done wrong, actually going back and fixing it. Otherwise, we just keep accumulating so much craft that our systems eventually are crushed under their own complexity.

3:16:41And there have been massive announcements of horrible vulnerabilities and software and services over the past year. It turns out, some nation -state backdoored a bunch of telecos, surveillance systems for wiretaps, huge problem there. But ultimately when you break it down, it's probably because of some buffer overrun and some C -program. These decisions about programming languages have long -term implications. It's really fascinating that in building these systems that hundreds of millions of people use, you're rethinking about how do you actually build it from first principles. So as you mentioned that versus primary design goals, it should be simple enough to learn as a first -time programmer, general enough for writing any kind of code and data, productive in the context of building iterating and shipping a project in a team setting, statically verified to catch as many categories of runtime problems as possible.

3:17:34It can compile time as we were talking about performance for real -time open -world multiplayer games. We didn't really quite talk about performance, maybe I could ask you about that in a second. complete so that every feature of the language supports program or abstraction over that feature, timeless built for the needs of today and for foreseeable future needs. Yeah. And then there's some design goals that we talked about that is strongly typed, multi -paradont to use the best of function programming, object oriented programming and imperative programming. So it's as deterministic as possible.

3:18:08If you run it over and over, it runs in the exact same way. Failable expressions, as you talk about super fascinating. There's so many cool features in this speculative execution concurrency. Maybe can you talk about concurrency? What is it about verse that allows for concurrency at the scale that you need? This is the one biggest technical problem that we're working to solve in this generation. and that is taming concurrency so that any ordinary programmer can achieve it by just writing ordinary code. It's hard. You know, yeah. Programming on a single threaded computer is hard enough, but it is completely predictable.

3:18:50If you have a language that's deterministic and you run the same code over and over, it's always going to do exactly the same thing and there's no unpredictability about what might happen, right? You're reading and writing variables in some order and you're always going to see it behave the same. The problem is when you enter this multiple threads or multiple nodes in a data center, all working together on a single problem, is that they each want to read and write different pieces of data and change the state of the world as they go. And still almost all concurrency and real world programs today is achieved manually.

3:19:25Programmers are writing this code that might run and Mothwaltreds very, very carefully so that they are negotiating among each thread to get access to data in a way that's going to give them predictable results. And it's incredibly hard. It's so hard that we've in five generations of Unreal Engine, every single generation decided we're not going to try to scale up all of our gameplay code to Mothwaltreds manually. It's just much much much too likely to go wrong not only for ourselves But for every partner company who licenses Unreal Engine and tries to use it for building a game. It's just a massive foot gun There's a variety of solutions to concurrency that are all rather sub -optimal One attempted solution was like just don't try to solve this problem at all Let's break our program down into microservices and almost all online websites of massive scale like Amazon's work with the hundreds of microservices where different servers negotiate with each other by sending messages to each other.

3:20:26By programmers writing those things very carefully, they eventually get to being able to take your orders and not make a mess of them reliably. But this is totally not scalable to the metaverse where you have millions of programmers who are mostly not going to be computer scientists. They're mostly going to be hobbyists and enthusiasts and first -time programmers, doing stuff for fun. That's never going to work for them because they'll never be able to and vision all the different dependencies between different computations that are running in parallel. But it turns out that there was an amazing foundational work done in the 1980s that was made very real by paper on Haskell concurrency, composable memory transactions is the name of the paper.

3:21:05And it describes the system for transactional updates to programs. And the idea of a transaction is a transaction is a block of code that does a bunch of operations on memory. Might read, might write. It might process an order. It might accept an order or reject an order. It might transfer money between one bank account and another. It might make conditional decisions. Like, oh, you asked to transfer $100 from your account to this guy's account. We're going to see if you have $100. If you don't, we're going to reject it. And if you have $100, we're going to take $100 out of your account and add to this other guy's account.

3:21:42Without transactions, if everybody's randomly And then, at least adding them to subtracting each other's bank balances, then you might have somebody read a bank balance, subtract 100 and write it out. But in the meantime, somebody has written something else in the meantime. And so you might get inconsistent bank balances arising if you don't have a wave ensuring that these all run in a specific order. So the idea of transactions is it's a way of dividing an entire program into updates, you know, self -contained updates that do an arbitrary amount of computation, but must run in a single threaded manner.

3:22:15And in the case of a game engine, that's a gameplay object update. When you're playing Fortnite, you see gameplay object. Every other player is a gameplay object. Every enemy is in the gameplay object. Every rocket in a projectile and car, and thing you see moving around and interacting. It's not just a fixed static part of the world. That's a separate game object. And each of those objects is updated at, you know, a rate of one update per frame, at 60 frames per second. And so then in the course of Fortnite Battle Royale gameplay, you have tens of thousands of object updates happening every frame with 100 players.

3:22:46And simulation with billions of players, you'd have a whole lot more than that. So right now, there's done single threaded. Yeah, that's done single threadedly in each game session. This is why Fortnite is 100 players limitation. If you absolutely maxed out a server, maybe today, you could get up to 140 or something. But it's not going to thousands or millions or billions. And so what we need is a technique for magically, automatically scaling our code to that. and transactions of the idea. And the idea is a transaction is a granule of code that runs its entirety. And so the idea of this transactional memory concept is that we're gonna have programmers write completely ordinary code, reads and writes variables in the completely ordinary way, and they're not gonna have to worry about concurrency at all.

3:23:29And then the system, like today, a computer just runs your program. There's no amount of speculation going on at the programming language level. The idea of transactions is, since we have a bunch of operations, we need to know, we apply, we apply a large set of the concurrently, but instead of each one reading and writing from global memory shared by all, in which case they might be reading and writing and contending with each other for the same data and might be doing contradictory things to it, we're going to track all of our rights locally. We're not going to write data, we're not going to write changes out to global memory.

3:24:04We're going to keep track of it in a buffer that's just for that one transaction. So we're going to be, it's going to look to that code exactly as if it's running on the global system and affecting global game state. But it's going to be isolated to just set one transaction. And it's going to be set aside and buffered up for consideration later. We're going to run 100 times or hundreds of thousands of the updates concurrently. We're going to see which ones had read write conflicts. Because if two transactions don't read and write any of the same data, then you could have run them in either order or simultaneously and it wouldn't have changed the end result.

3:24:38Yeah, the order doesn't matter. This is so fascinating. To imagine this kind of system and arbitrarily concurrent running millions of updates and parallel of gameplay objects, that's that's the thing that enables the thing that we're talking about, which is, you know, tons of millions of people together in one scene. Yeah, exactly. And the key is that you're running these updates speculatively and you're not committing their changes to memory until you're sure that they're free of conflicts. So you might update 10 ,000 objects. You might find 9 ,000 of them were conflict free. So you apply those 9 ,000 objects updates to memory.

3:25:17And they could have run in any order and it wouldn't have changed their result. Now, there's a thousand objects left over. Now you have to run those again, try them, maybe interleave a different way to get them to eventually commit to memory. And in the meantime, you just throw all their computations away and redo them later. And by doing this, like, we're moving this from being a programming problem for the programmer to DOS, to being a language problem for us, language designers to DOS. And we're moving a vast amount of pain that would be imposed on a million people instead to a vast amount of pain and a small number of people have to actually make this work.

3:25:53That's amazing. That's really incredible. So what's the state of things with verse? And I guess what you're outlining is if and hopefully it is successful, this will be a big part of Unreal Engine 6. So what's the timeline? Where do we stand today? Well, there's a lot going on in parallel. The key thing with verse is that we have been specifying what we think is the ultimate version of the language with all the features we want. And whereas we've been shipping more modest versions of language over time, and we've released dozens of updates to it over the past year and a half, and the idea is that the shipping version that gains more and more features over time, but each maintaining backwards compatibility with old versions and each continuing to improve and approach the ultimate version of it as we go.

3:26:42And we've been doing this experiment entirely within the world of Unreal Editor for Fortnite for now. We want to test this and iterate with Fortnite creators in just the metaverse usage case before we make it available to all of our partners using Unreal Engine for all of their projects. And the idea is to iteratively improve it and build it out because right now, UEFN has relatively few features for programming. It needs a lot more and everything we add makes the world a much better place for Fortnite creators and we're adding major, major new APIs every few months throughout the course of this year.

3:27:14Whereas Unreal Engine licensee is who are building standalone games, already have access to the full engine through C++. They have massive, massive expectations of an API. And so we can't release this to them until we've built up all of the essential features that they'll need for building their game plan in the future. And so, you know, we have these two different tendrils of progress. There's Unreal Engine 5 for game developers, and there's Unreal Engine 5 targeting the Fortnite community. And there's different bits of development that are only in one area of it. They aren't applied to birth.

3:27:46Not all of the Unreal Engine 5 features are actually available on Fortnite because some of them we haven't figured out. We haven't gotten to the point where we can deploy them to all seven platforms in a platform independent way. And so the place where all of these different threads of development come together is Unreal Engine 6. And it's a few years away. We don't have an exact time frame, but we could be seeing preview versions of it, perhaps two to three years from now and we're making continuous progress towards it. So that's really nice. So there's this ultimate version of a language that you're constantly working on and thinking through.

3:28:19Then there's the shipped version of the language that's used by a large number of people, but still in the constrained environments of the Unreal Editor for Fortnite. night. So for the Fortnite game. And then there awaits the more general unreal editor, unreal engine for the lessons learned in the Fortnite context to be integrated in the more general context of creating simulated worlds for all kinds of games, including Fortnite. It's a really nice setup because you're both, it's a testing ground of the language in Fortnite and you're keeping an eye on what the ultimate thing will look like also necessary to deliver all the features that we mentioned brilliant.

3:29:05You know the aim for UE6 is to bring the best of both worlds together. Much easier gameplay programming for the Fortnite community and for licensees. More scalability to large scale simulations of all sorts. Greater ease of use, meaning it will be easier to hire programmers who are familiar with and experienced with a thing. But also ensure that every game developer has the full deployment capabilities so that it can build a game once and then ship it anywhere. Like the alternate version of this enables a game developer to build a game of any sort. Either or simultaneously, both ship it into Fortnite as a Fortnite Ion that players can go into, bring their Fortnite items and cosmetics and interoperate properly, or ship as a standalone game or both.

3:29:51If they ship as a standalone game, they shouldn't be messing out on the open economy either. Because in this timeframe, we'll have opened up the Fortnite item economy to third party developers of all sort. Hopefully there is a standard body, but there might be multiple phases of it. So that if you choose to ship a standalone game, you can still choose to have Fortnite items work in your game and have your game items work in Fortnite and have your item economy integrated with the overall metaverse economy. And make, and told the really core problem that of the game industry that Matthew Ball has been documenting over the past few years.

3:30:26Yeah, by the way, Matthew Ball has been really helpful. He wrote a really great book that I recommend people check out. There's an updated version. Let me just ask for it because again, there's a bunch of indie developers listening to this. I saw that a lot of solo developers out there. They're using Unreal Engine that basically creating video games solo. I saw can highly recommend is great. Choo -choo Charles. It's a great video game. Gavin Eisenbyes, he's a great guy. He's solo created this game. That's I think quite popular. I believe he says he didn't even use C++. He's visual scripting, he's blueprints to create it.

3:31:09Okay, so I mean all that to say, people should go check it out, support indie developer, support Gavin, support everybody like that. I think it's important to say because there's so much genius and artistry out there that we want to support the crazy dreamers out there. Anyway, all that to say, what are the ways you think Epic can support indie developers like that, people like Gavin, like give them superpowers to create games from which they can make at the very least enough money that they can keep doing their art. Yeah, well, that's really about productivity because to be successful with a game, you have to have a great game.

3:31:50If you're targeting, if you're building a type of game that nobody has ever built before, you might be able to build a smaller, simpler game than if you're competing in a massive genre that has huge expectations. But it's all about enabling somebody to do that in a reasonable amount of time that they can spend and to be able to finish it and chip it and maintain it successfully. The tools are a big part of that, having the tools be as productive as possible. But there are a lot of other facets as well, like having a content marketplace is a big thing. You know, just off the shelf, piles of content, some free, some paid, built by other creators, can enable a small indie team to build a big game and just be able to focus on the unique content of the game, being able to write their gameplay and lay out their environments the way they want, but not have to build every tree in rock.

3:32:36Because somebody has already built one, and there's probably perfectly suitable for your game. And over time, there'll be more and more. There's also a lot of indie developers living as content creators. They'll be releasing content on Fab marketplace or the Unity asset store and earn living for that. But specialization of labor is a really, really valuable thing. And the early days pretty much, one person would build one game. That's how a lot of the games were built in the 1980s. over time you had a separation where artists became specialized and then programmers and then gameplay programmers and engine programmers now you have technical Iris and you have you know dozens of different specialties contributing to a trip way 3d game now and the more we can modularize Those bits of content up to you could get something off the shelf rather than having to build it Or have to you know engine synthesize it for you the more We can enable creators to create stuff fast and successfully So we should talk about the fact that amongst many other things you've been

3:33:41philosophically and spiritually battling monopolies in general. So one of which is the Apple marketplace that charges 30 % from developers. Can you speak about this idea that you believe that Apple and other companies Valve should not be charging that kind of revenue cut. Sure, well, let's start from a very basic principle of computing. The first computer I owned was an Apple 2 Plus. You know, designed by Steve Woznack and marketed by Apple and then an IBM PC. And in those days, anybody could write code. Your computer literally turned on with a programming language prompting from you. you had to actually do work to not write a program and to instead run somebody else's program.

3:34:34That was incredibly empowering. And anybody could write a program. Anybody could put on floppy disk. Anybody could share it with their friends. Anybody could make copies of that, put it in a store. They could sell it. They could build a business around it. And they were completely able to, without seeking any big tech corporations permission, do whatever they want. Even from IBM, remember, IBM was the dominant computer company on earth at the time that they released IBM PC as an open platform. And, you know, so it's really been firmly implanted in my mind that this was magical and wonderful time of unmatched economic progress for technology in the entire world.

3:35:15And, you know, over time, the big companies have realized that they could shut down and just block software makers from releasing software on their own and block software makers from doing business with customers directly. And I've always viewed this practice as terribly abusive because when you buy a computer, you spend or a phone. You spend good money on it. It's your money you spent on that phone and now you own that phone. And there's absolutely no reason that Apple should block you from installing apps from other developers directly, if you want, going to their webpage or writing your own apps without their permission and running them yourself without having to get an adult account, without having to go through their bureaucracy.

3:36:03And there's no reason that any consumer who gets an app shouldn't be able to do business directly with the developer of the consumer. You already bought that phone. Well, why should Apple be adding a 30 % junk fee to all commerce you do? And why did they selectively apply it to some things and not others. I've always viewed this as deeply abusive and that it shuts down the competitive engine that once fueled the app and software economy. It's still a vibrant competitive engine on Windows and on the internet, but it's no longer with mobile apps because these stores have popped up and they don't provide any useful value to the user.

3:36:42Yes, there are search function defined software, but there's no reason other companies couldn't build a better one. And I bet if you had Steam or if you had Valve build Steam for iPhone I bet Steam for iPhone would be a much better app store than the iOS app store and a lot of people would use it and that Apple would be forced to build a better app store in competition and that everybody would improve their products as a result But you know Apple and Google shutting down the competitive engine that drives the software economy has massive implications for everything and And one of them is reshaping the nature of mobile apps to be really offensive to game or sensibilities.

3:37:19If you call in console, the best console games you see listed on the storefronts, the best console games that you see reviewed are awesome games that really have a lot of creative merit. The ones that sell the best are really enormous values for their money and are their product of an immense amount of work. You don't see that on iPhone. The top apps on iPhone, the top games on iPhone, at almost all times, are these ridiculously greedy, high monetizing, you know, whale games, which are pervaded with Pay -to -N and lootbox practices. You know, they have a sort of illegalized form of gambling, and you know, these games are not driven by fun.

3:37:59They're driven by manipulation of the players to greedy ends. And you know, it's very hard for the fund -based games to actually succeed there. And the cost of operating these online games now are enormously high. So you have a game that's based on fun. It's not loot box heavy. You have to pay 30 % of your revenue to Apple in order to just get access to the platform. And 30 % is way, way, way more than most going companies make in profits right now. And so if that fee is more than the profit from a natural company, then they can only stay in business by raising prices. So these 30 % fees are raising prices of all digital goods.

3:38:37It's just inflationary as a force in the economy. That's just the first drag tax, but then to reach users, when a user searches for, like when it, before Apple blocked Fortnite on iOS, when a user searched for Fortnite, the first result was always some competing game. Like that's utterly anti -user. Like you search for a Steam for a game, and if that game's on Steam, it's the first result always, because Steam's not getting insidified with advertising, Apple is, And, you know, they do that so they can make even more than 30%. So if you want to be the first search result for your game, you're probably paying more, like, 45%.

3:39:13If you want to reach users on social media, you're paying another 20%. So literally something like 70 % of the revenue for your game is just going into junk fees to acquire users and get them in your game. And the money that's left over is only enough to fund these, you know, games with rather abusive practices that do not look to normal gamers like games for the most part. Now, there are some exceptions. There are some great games on iOS and there are some games with good practices. But, you know, the engine has been really corrupted in a way that competition would fix. If you unleash lots of competing stores on iOS, then you'd have lots of awesome options.

3:39:48And you'd have much better deals and much better prices. I had a quick chat with Matthew. He asked me to ask you this question of, why don't more companies fight Apple in the way openly and totally as Epic has been. What makes you, what makes Epic so unique in this regard? And I should say, I think everything you said I agree with fully. I think what Apple is doing is just wrong. I think Apple in many dimensions is an incredible company. They have brought so much good for the world. In this regard, I just think it's straight up wrong what they're doing. They're not providing the value of 30%. And even if they were the monopolization, the centralized control without competition is wrong.

3:40:37Anyway, why are you fearlessly fighting Apple on this and other companies don't seem to want to step up? All companies are terrified of Apple because Apple can destroy their business. Epic was in a unique position with Fortnite first of all having the biggest game in the world. what at the time we started the fight with Apple. And second of all, having the majority of our users playing on PC and console meant that if we lost access to iOS during the fight, then we would still be able to survive that set up at a part. Spotify, Facebook, you name the top 10 mobile apps. I think none of them would be able to survive without Apple.

3:41:22Like literally their business would be destroyed if Apple blocked access to them. And Apple is incredibly clear with developers that they're willing to deprive all users of access to any app if they get in a fight. And if you look at how they dealt with Epic, they were not just legally maneuvering with the intent of winning the court case against us. They were also sending a message to all developers in the world. We will destroy your business or we will try our best if you fight us. And a very small number of local developers have been willing to speak up. And Apple was actually refrained from crushing their businesses when they weren't violating any Apple policies.

3:42:05And that took a bit of discipline, which I think is also an amount of calculation by Apple that they couldn't survive being seen as the company killer. If you criticize this, we'll crush your company. But the other thing Apple has that they can and will readily deploy against every developer software is soft power. When they take 30 % and advertising is so expensive, soft power by Apple, like approving your updates faster, or slowing down all of your updates by a couple of weeks can also have a dramatic effect on your ability to compete successfully. Apple, it's a very long history of playing cat and mouse games with developers.

3:42:42It's like what a developer isn't in Apple's good graces, such as so now on the updates. So they've and slowing down updates for several major tech companies sometimes for weeks, sometimes for months, without all going under the radar because everybody's afraid to challenge them publicly. And so Apple is wielding a soft power can change a company's economics for the worse, enough to deter almost any public company. And Epic is in the fight because I firmly believe that something like the Metaverse will only arise. It's something like a billion plus user, real -time 3D social ecosystem system that grows to encompass potentially all or most major games by all major developers tied together into an open economy where they all participate as peers and they all compete to give users the best deals and they grow and do business with their customers directly.

3:43:34That thing can only exist if the Apple and Google gatekeeping monopolies are lifted. And it's not just the 30 % fees. 30 % fees are economically runes, but they impose other levels to control. Apple prevents all web browsers on iOS from implementing web standards better than Apple does. Apple has really limited data storage capabilities and 3D graphics capabilities on iOS web APIs. So APIs you can access from web apps running within a web browser. And that's to encourage you to cripple those apps to ensure they can't possibly compete with native apps. By depriving web apps of those features, they prevent web apps from being competing with native apps.

3:44:19Well, if they treat the metaverse the way they treat the web, they'll say you can only use Apple's metaverse engine. Unreal Engine is disallowed. And then they can impose all of their own limitations on the metaverse to force all commerce through Apple or force it to be so uncompetitive and lousy that it can't compete. And they have this giant array of these anti -competitive techniques they use to disadmire each other app developers. Saying only Apple can build certain kinds of apps or only Apple can integrate certain features in Europe even where the DMA Law requires Apple to allow competing stores.

3:44:53They say, a store can only be a store. You can't build a store into Facebook. You can't build a social network into a store. A store must only be a store, because a store that's more than a store might be able to compete with us more effectively. It's just a giant. Yeah, to use the Soviet term, it's a defense and depth strategy where they've constructed a massive series of barriers. Each are fatal to any attempt to compete, so that even if one barriers overcome, the others remain in place and shut down the whole scheme. And that's playing out in Europe where Apple was enabled us to launch the Epic Games Store, but has made it so difficult and uncompetitive both for epic and for clients who we want to do business with that You know it has no chance of the success until the European Union and starts to really enforce the DMA law and impose Hirish and serious penalties on Apple to force compliance.

3:45:42I think it should be said. Once again, I think it's wrong What they're doing there and I hope there's public pressure and government pressure for them to open up the platform I believe as a person who loves Apple, I believe this is also good for Apple. There's the natural thing in companies to want to close and control and crush competition, but like Apple is full of brilliant engineers, opening it up and win. It's going to create the right kind of competitive incentive to make the Apple store better, to make, you know, to, to, because they're great at creating great interfaces, but competition will sharpen the sword.

3:46:29I mean, it's just going to make everything, everything much better. So I do hope there's a lot of public pressure, and I deeply appreciate that you're speaking out in this way, sort of putting that pressure and letting people know, like it's okay to say that this is wrong. Thanks. Competition makes everybody better. You have a monopoly that's forced to compete. Suddenly, the monopolies products get much better. The offerings to consumers get much better. You see some in the areas where Apple could be the best. But what they have is just really, really lousy, and it's this old guard of leadership who is clinging to these old policies, turning themselves into the enemy of every developer, every regulator.

3:47:08And I think it's ultimately massively to their detriment, and I can't for a new generation to come in and paint a bright past the future. Epic was an awesome partnership Apple for more than a decade of demos and partnership and technology usage together and we did amazing things together. Love nothing more than to have that Apple bringing back Steve Wozniak's original views. The Apple too was such an amazing thing. It's a completely open platform. the manual to the Apple to included a listing for all the ROMs, the source code to the ROMs, you could understand exactly what was happening there and you could learn from it, included a hardware schematic of the entire computer.

3:47:50So you could learn how to make a peripheral and plug it in, and an open ecosystem. And that's the awesome Apple. That company would be the best company in the world again. I think the current one is just on the wrong side of history and needs to change? Well, I hope Epic and Apple find a path forward together and flourishing together and Apple embraces competition better. One of the things I admire about this conversation that you mentioned steam a bunch with kind words supportive and basically never mentioned Epic Game Store. I love that. So I really love that. It really embodies the fact that you want variety, you want freedom for people to choose the best thing and and and and in so doing create this large network of humans interacting freely with each other.

3:48:41Okay. That said, one of the competitive pressures that Epic has created a few years ago was by launching the Epic Games Store and instead of Steam's 30 % revenue cut, you went with 12 % revenue cut, creating the competitive of pressure saying, you know, listen, this shouldn't be that high of a cut. And which I thought was like, amazing. This is a brilliant idea. And I think it still is a brilliant idea. It's wonderful. Now, in preparing for this conversation, I looked on the internet and I saw there's a lot of criticism of EGS at the game store. First of all, I should say, the internet is full of drama and criticism.

3:49:30Like there's just not enough celebrating of awesome shit that let's get if I can ask the internet as a blob one request can we just celebrate awesome shit and also criticize but just like there's not enough celebration. Anyway, the two directions of criticism is just straight up to launch your interfaces clunky and lacks a lot of the features of Steam. And then the second set of criticism is the exclusive contracts which were made with some of the games that are on Epic Games Store. So first, huge props on the 12 % maybe you could speak to the vision of that. And second, can you comment on those two to systems.

3:50:18Sure, yeah. I think one of the reasons that people characterize the Epic Games Launcher as clunky is because like the Epic Games Launcher is clunky. And we need to improve this. There's a lot of work going on there. And I wish we'd gotten better at addressing quality of life features and prioritize them above all of the other features. Because The Steam has 15 years of built up work by many of the best programmers in the whole industry working on that. A much larger team, working on Steam, and a lot more time working on it. And so we've had to make a lot of prioritization decisions about what do we support with the Epic Game Store and when.

3:51:01I'll have the time it's been supporting commercial features like merchandising, offering multiple versions of a game for sale and offering upgrades from the regular addition, the deluxe addition and other things that partners work. And, you know, other priorities have been quality of life and launch your load times and other things. And we've not put enough emphasis on the quality of life features. We've recognized this very clearly. Motu all times, and we've gone through motu or refactorings. But, you know, that's definitely been a disappointment to us and to a lot of users. And I think one thing we had to took us a while to realize was it's not uniform.

3:51:36Depending on your proximity to a CDN and the size of your game collection, It can be either awesome or really clunky. And the users for whom it's really clunky are the people, like I think they're at large part of the complaints. They're gonna speak up. And I should also say that the steam launcher for a long time for my memory, but also just looking online was also very clunky in the beginning. Yeah, and one of the criticisms of Epic Game Store from the beginning was you don't have all of the features of steam, but we very much don't wanna have all of this feature of Steam, like Steam has forums to kid to your game.

3:52:13And like we decide we don't want to create forums, and our partners, when we talk to them, generally didn't want us to create Epic Game Store forums for their games, because there's already, you know, channels that they prefer to them. There's social media and a number of platforms, and there's Reddit, and there's lots of places for gamers to discuss their game, and they prefer those discussions to be there. And so it's very much not our goal to mimic everything of Steam. But we do want to have all of the convenience features that makes it easy and fun to use as steam. So there's a long journey ahead But you know we continue to reinvest and you know we're working to build a multi -billion -dollar business there and think we'll succeed already at the Epic Games Store Yeah, supports an immense amount of Epic Games commerce and fortnight on PC now on Android and iOS and the European Union too So it's a forever facet of the industry and we are never losing heart in it.

3:53:07And when you think at some point, you know, I really feel that the benefits of the Epic Games approach are going to outweigh the benefits of this team approach, especially as gaming becomes multi -platform. One of the things that really sucks for all gamers is that, you know, you have a lot of friends in the real world. Somehow, everyone has different platforms. Your team friends aren't connected to your Xbox friends, and they're not connected to your PlayStation friends, to your Nintendo friends. And so you're very much bottling up PC gaming into kind of your hard crew group of PC -only folks and making all the other aspects of it difficult.

3:53:41You know, a lot of games have flocked towards Discord, which is a mess in itself. Canal, your Steam name is not your Discord name, and that's not your PlayStation name. And so now you have two people in a game and they have four different identities. And that sucks. You know, our aim for that is, you know, with Epic Online Services and the social systems that we built for Fortnite opened up to all developers to have cross -cat platform social features be super easy and free for all developers. This is not something we're trying to keep, we're rents -heak on, or lock people into. It's just a way that we're making social gaming easier for everybody.

3:54:16As more and more games follow the Fortnite approach of being multi -platform, especially multiplayer games, you know, Metcalf's Law is a very real phenomena in the industry. It's the thing that's upending some games and causing growth in other games. It is the number one trend for preventing the world of gaming today. It says that your game is quadratically more valuable, the more percentage of a user's real world friends they can connect to. Your game vastly benefits by connecting all of its players together and not segregating them off into different online platform populations and so on. And so, you know, I think the future trend is in that direction.

3:54:55I wish Valve had opened up Steamworks to just work on all platforms. They could have easily done it. We did it. But, you know, they seem to be using it as a lever to keep people locked into this TMPC game store. And, you know, there's... That's going to be a long -running battle, because there's always a very toxic group of Steam users who, like, they even created an entire subreddit dedicated to criticizing Epic on our store. And they create, you know, basically her assesment campaigns at times against developers who use Epic online services. You know, developers do that so they can connect their players across platforms and have friends across platform and voice through the cross platform.

3:55:34So, you know, suddenly that's trying to be turned into a negative. It's clear that Epic wants developers to win. once gamers to win and once steam to do awesome also and in the competition between steam and Epic Games Store like create awesome stuff together. I mean, it's obvious to me if you don't read this stuff online but online it's like there is this just negativity that I don't think it's constructive in general. And I should give a big sort of positive thank you and props for the push to multi -platform that was always there for Fortnite, perhaps before the pressure that Epic created on breaking the barriers of Xbox and PlayStation and PC and being multi -platform.

3:56:35Like I got a chance to play with Fortnite a little bit with you. and all the people in the group, by the way, awesome interface, audio chat, really fun. But you could see like a couple of PC folks, a PlayStation person, Xbox person, all together. We can't really tell what they're using except for a little icon, and it's nice. It's like all those barriers that were created with these platforms are gone. And you creating the pressure with Epic Games Store and just everything you're doing with this with Fortnite platform. It's really nice. There's no reason to create these silos because ultimately you should put the game of first and let everybody interact with actual real -life friends and make new friends across the entire network of humans.

3:57:21So anyway, thank you for that. Thank you for creating that pressure. Thanks. That was an interesting time. Sony had a long -running policy preventing cross -platform play. And we had a long series of conversations which got pretty harsh towards the end. But Sony ultimately came around and they opened up PlayStation and through a series of private conversations they did the right thing. Not only that, our partnership with Sony has increased since that argument back in 2018 and we've gotten closer and closer and done ever more things with Sony brand IP like to capture some God of War and other games coming into Fortnite and all kinds of crossevers, massive Unreal Engine, adoption, and Sony for making games, for making movies, at Sony Pictures, music partnerships with Sony Music.

3:58:11That's been an absolutely wonderful relationship, I think. That stands as an awesome example of a company that because of historic reasons got stuck with the policy that no longer made sense for the future. and following a serious discussion with a close partner, who write it and did an awesome thing, and now Sony is much better off, and that picks better off, and all game developers are better off, and the coal -constein industry, I think it's a lot stronger now than it would have been if these silos had continued to be playing out. And despite that kind of potential concerned at maybe blocking platform play with Xbox, gave Sony an advantage, Sony's actually grown in market share relative to Xbox since that time.

3:58:54And so you can't say anything but goodness came of that time. I think a better version of Apple would have received the email I sent to senior Apple management. And good night. Huh, there's an issue here. We should have a discussion. We should reconsider this. We should listen. And you know, they didn't. And that's why we're in the midst of a five -year battle with Apple. And you know, hopefully, still the early days of a 15 -plus -year partnership with Tony. Come on, Apple. We love you, Apple. Do a little bit better. The second line of criticism that I mentioned, the exclusive contracts with some of the games.

3:59:34Can you just speak to that because in so much of the journey of Epic, you've been sort of against exclusivity? Let's back up and talk about the principle, was it work here? Applient, Apple forcing other companies to use their payment service is a cursive decision by Apple. But if Apple convinced other developers to use their payment service by offering benefits or a better deal or funding or any other positive incentive, then that would be perfectly fine. One is preventing competition and the other is actual competition. Epic has never forced any developer into any sort of exclusivity relationship.

4:00:18Rather, we've offered developers payment or incentives or marketing or any number of things of value to them in exchange for coming to our store exclusively. And it's their game. So it's entirely rightfully up to them to decide how to distribute it and to make the decisions about their business, it's their game. If they want to distribute it through Steam, they can, if they want to distribute it through Epic, it's exclusively they can, if they want to distribute it through both, then they could do that as well. If we pay them money or other things of value and it's changed for them coming exclusively to the Epic Games Store, I think that's their right.

4:00:56This is an example of Epic, an underdog with a tiny fraction of Steam's market share working to proactively compete with Steam by offering a better supply of games. And some consumers who prefer Steam might prefer that the game be on Steam, but the doll per in each case has decided that they believe they would benefit more by doing this exclusive deal and exchange for benefits than by being on Steam. And you know, like one of the key exhibits in the Dead's Epic Google trial was its opening is a bit which was a trying to point out to the jury in the trial the benefits of its closures like imagine a new store popping up the store has a big sign outside of it we're the new store we have everything that the other store has and it's at the same price are you gonna go to the new store no you know nobody's gonna switch from steam if steam has all the same games as the competing store and everything's priced to then just the same and so we looked it initially two ways of competing with Steam strongly.

4:01:59We wanted to sell games at a better price than Steam. By agreeing on the amount of money, we paid game developer, you know, if the game's going to sell for $50 and we take 12%, we'd actually lower the price and potentially even lose some money to offer a better deal. Well, you know, we tried to pursue this, but very quickly, Every developer told us that they wouldn't agree to better pricing because if they did then steam would stop giving them Marketing featuring and benefits and the console makers would be mad and all their relationships would be would be harmed You know, so there's there's an undercurrent of powerful platforms and echo systems encouraging developers not to compete on price So not being able to compete on price we decided to compete on supply by doing exclusive deals and we signed a lot of them paid developers lots and lots of money.

4:02:53I think we distributed over a billion dollars and that had spend it cheers to developers beyond the money. The revenue we actually made from games in order to get a whole lot of exclusive games. Some are successful, some weren't borderlands did awesomely on the epic games tour and we and Gearbox felt that it did just as well through epic as it would have done in steam because you know the players who wanted borderlands wanted borderlands and it came and got it. Whereas a lot of other games, some smaller games, especially that didn't have a dedicated audience that was absolutely going to play the game.

4:03:25Typically benefited from exposure on Steam, they were reaching an audience that wouldn't have reached an organically. And so some of them in the end, we and they concluded that they did worse by being on the Epic Games tour exclusively in terms of reaching fewer customers. And so we had this limited time at Sclusives. When they ran out, they put their games on Steam and lots of data was gathered to understand what worked. And so this worked well for some games, didn't work for other games, but um, you know, companies seeking to compete, especially underdogs seeking to meet have to offer some unique value, have to offer something that's not Available through the competitors And I get that steam users who just prefer using steam and buying games and steam while I have the library in one place Don't like this, but you're never gonna have competition for better deals if you don't support the competitive mechanisms that allow competitors to come about.

4:04:17I think if Valve were forced through Epic Games Store's success to compete with Epic Games Store, then developers would be getting a better deal. Consumers would be getting a better deal, and these 30 % fees would be driven down quite a lot towards the actual costs that are required to support the stores. Yeah, I mean, there's a lot to be said there. You know, I've gotten to watch Spotify try to do this with podcasts. interests, you know, enters the underdog into the space and try to attract, you know, they made exclusive deals with, for example, Joe Rogan, where the podcast would only be published on Spotify.

4:04:55I personally think long term, what I would love to see for EGS, for Epic Games Store, is to not do any exclusivity. Similar to what Spotify is doing now, even with Joe Rogan, let go. It's open, wide open, and instead compete on the space of just the non -clunkiness of the interface. Because the foundation of what Epic Games Store represent with 12%, it's just philosophically. So you're also competing on the sort of spiritual realm of what it stands for ethically. That's also a really powerful way to win. So now that there's enough number of people using at the game store, like to drift away, to move away from exclusivity, it's understandable that it's needed for the competition for the underdog to enter the scene, but it goes against the sort of the freedom, the free spirit of choice that I think you represent a lot of the decisions you've made, which is making the games cross platform and just, yeah, giving freedom to the developers, giving freedom to the gamers to choose.

4:06:13So in that way, I think exclusivity a little bit goes against that. Well, here's the conundrum. The exercise of soft power by all of the competing stores has made it intractable for almost any developer to offer a better price through the Epic Games store than through Steam. You can imagine that if the effective Epic revenue sharing, 12 % to developers was that games just cost 22 % less on Epic Games. Sorry, 18 % less on Epic Games store, that that would actually start to reshape consumer behavior significantly. People would start coming here for the better deals. Yeah. But if you like Steam, giving developers nasty phone calls and so on, when they propose to do that, prevents developers from passing on savings to consumer, Then what's the mechanism that drives users away from the incumbent store to the store that offers a better deal?

4:07:10If basically developers are fearful of competing on price to a store, what can possibly be done to get a dominant store with something like 90 % of revenue share from among multi -publisher stores, you know, inline, so that a much, much smaller store can compete. I think some answers required there. A better UI is great. Like Steam is super polished. Epic Games Store and, you know, time will hopefully be as polished. How does that overcome the fact that your entire library over the past 15 years is there? If developers have been afraid to exercise their own economic interest. Because as an developer is interested to sell an epic and get 18 % more of the revenue, I think there's a real power to incumbents.

4:08:05It's very hard to overcome through just being there and being as good. Ultimately, where I hope it converges to is less exclusivity and where the competition can be the kind I love the most which is on the UI, on the experience, and then on the Steam side, on the 12%. So you can go from 30 % and start to support the developer by lowering it from 30 % closer to 12%. So anyway, I'm a big supporter and I don't like the criticism of Epic Games Store, but I also had to say that I don't love the exclusivity, but I understand. I understand the reality of the world is that you have to have some mechanism to get people to switch or not to switch, but to at least get some of their games to try out, to experience, to allocate some of their library to the underdog.

4:09:12So totally understand. and hope that UI keeps improving. Thanks. One more bit on that exclusivity point is that when we told Google that we are going to launch Fortnite outside of Google Play and go into competition with them, they viewed exclusivity as such a powerful competitive force. They went around to the top 30 publishers and paid out hundreds of millions of dollars to them in order to agree not to do exclusive deals with competitors. And that was called Project Tug, HUG, Hold Developers Close. And that was one of the major pieces of evidence on which the jury found their practices to be illegal and anti -competitive.

4:10:03And the one more data point on that, we talk about 30%, and there's always a lot of people defending Steam will of course say have more costs because they have more features than Epic. We have data on that that's very detailed. The all -in cost of operating the Google Play Store, stocking it, maintaining it, the software, the entire ecosystem, is around 6 % of revenue. So, you know, in a competitive market, what a company whose cost is 6%, people would charge 30%, Absolutely not. An Apple's cost or similar, Apple runs an even more efficient and lean operation than Google. So their costs are also like lean the range of 6 % all in.

4:10:44They market up from 6 % to 30%. Like, only an monopoly can do that. Look at competitive businesses. They have a margin of a few percentage. The numbers there are strikingly supportive of just outright anti -competitive market distortions Okay, what do you think is the future of the gaming industry? So we've said to me a bunch of exciting stuff about indie developers. So, you know, do what are called AAA video game companies? So do these big gaming companies? Do they have a future? What is their role? How do you see like in the next 5, 10, 20 years, the evolution of these big companies and indie developers?

4:11:28Yeah, there's one constant in gaming. I think the industry manages to lose sight of from time to time astonishingly and and that's fun People play games for fun. Yes our whole job is to deliver fun and When you look a lot of the games that failed recently They just didn't deliver fun or they didn't deliver fun in a manner that was nearly compared of what the other Sources of fun the just in people's lives and so you know At a basic level we don't need a terribly complicated theory to explain a lot of that malaise and the game industry. There's been a degradation of the capabilities of a lot of publishers, partly because of competition for talent.

4:12:08Companies like really vibrant game businesses like Epic or Riot or others are hiring the best of allpers and accumulating and big tech companies are hiring the best game developers because there's super talent there. And so in some cases their companies aren't competing or robust. You're getting worse. They're making games that are less fun and you know I think everything else that's happened is kind of a side -shot to that you know there's always political drama and so I think they just the core is of failure to deliver fun and you know the nature of fun is changing it turns out that playing a game together with your friends and it really socially engaging way with voice chat is just way more fun than playing a solitary game for the most part and there are exceptions to that but I think we're You sing much, much more play time shifting towards games you're playing together with your friends and not just random internet strangers who happen to play that game too, but people actually know in the real world.

4:13:02And that certainly has been the case with me and with almost everybody I know who's playing Fortnite or similar games. And that has really significant effects in reshaping the whole game business because like a single player game, if you have 20 people with 20 different opinions of which game to play, each one might buy a different single player game. But in a multiplayer game, if there are 20 games out and each one might have their own completely individual preference in each one or independently choosing which game to play each one might buy a different game. But if you know, but they're all realizing that they want to play together and so what players are doing increasingly is playing a game they like and accept together with their friends, even if it's not the game that every one of them might be preferring to play them.

4:13:47themselves. And that's certainly the case in different Fortnite groups I play with from time to time. It's like, you know, one player might have been preferring to play Cod, one might have been preferring League of Legends, somebody else, something completely you're in, but it's just so fun to play together. We're doing that. And that means that there's really strong Metcass law effect in which games which are able to attract a large percentage of your friends are more able to attract you. And not only a track would also retain. And so I think Matthew Ball's analysis of this over the years has really documented the trend towards, you know, you can call it the matter of it or you can call it large scale multiplayer social gaming.

4:14:28He's really documented this trend and over the past year or so it's taken a really, really strong turn towards increasing rate of change, increasing numbers of players coming to Fortnite. You know, we hit an all time high of 110 million monthly active users a year ago. And another close to peak this time, Roblox is bigger than ever. And this trend is players consolidating into multiplayer experiences that they've played together. And we're seeing another trend overlaid with that, which is like an awesome single -player game that comes out or small and multiplayer game comes out. People often will treat it as a vacation, they'll go off and play that game for a while, then come back.

4:15:06And I think Lukong was an awesome example of that wonderful game from a brilliant team. And China, they made a game that's like, no Western players had really seen that type of thing done before and it was awesome and it did well, but my players played it for a while and moved back on. And that can be lucrative, but a business that's pulling that kind of game is it's going to have to build a new one every few years and build a business around that while the other games continue to create users. But you know, when you have a large number of gamers migrating to a small number of games, the effect of that is increasing revenue for those games, increasing reinvestment.

4:15:44And, you know, there are things that Epic can do with the team of thousands of people building Fortnite internally. And tens of thousands contributing to Fortnite as independent creators. You know, there are just things that can happen with that level of investment that can't happen in a smaller game. And so there is some of what of an increasing winner take -all dynamic, where the biggest games reinvest more to make their games more fun, One big game fun had a faster rate than other games and the industry is changing around that. And I think the lesson for the game industry now is that there are really two big opportunities being pursued.

4:16:18There's big games or games that have the potential to be really big multiplayer experiences that keep players around indefinitely for very long periods of time. And then there are just really good single player and small scale games that people are taking the break from their big games for. And, you know, the trend there is going to be towards efficiently developing those games. You can't build one of those games with a $300 million budget, but if you can do it with a $40 million budget, you can make a lot of money. So I think that's the main reshaping going on. And I think that it creates a rather bleak outlook for a lot of the category of like single player games that don't have a huge audience to reach.

4:16:56And you know, but this is just why they really trends are restructuring the business around And the technology on changes of the day. Okay, this is going to be a ridiculous question. But aside from the games you've created, what are some of the greatest video games ever created to you? What video games have been like either impactful to you in your life or maybe you've seen created and you're like, ah, that's a beautiful piece. Like it could be in a totally different realm. Like obviously for me, I returned to often to the single player domain of role -playing games of the other scroll series Skyrim that was like a world that they created a recent game ball just gate three That was really incredible piece of work and art and doing a lot of innovative stuff again in the single player domain Is there games like that outside the ones you've created?

4:17:53most impressed with the games that have but created what appears to be a whole living, breathing world. Games that give you the sense that you're just a part of it and there's a lot more happening and there's always more and it gives you the sense that you go anywhere and do anything. Even though these games really do have finite limitations in their places, you can't go. Really creating that sense of wonder is just a magical thing. like soda breath of the wild. Oh yeah. Yes, Skyrim. Red Dead Redemption. Red Dead is great. Yeah. There's an entire ecology simulator in there. Have a high school class made it, got into studying river ecology.

4:18:36And he was commenting on like this. This is one of the very few games that's hydrologically sound. Yeah. The way, like they actually went to the effort of shaping the rivers to follow like erosion dynamics and so on. It's the attention to detail. And there's something there that's big. And it's been funnier during through the industry. Like I last designed a game in 1992. I'm not a game designer. We have a very open -minded, like the best game genre that will ever exist has not yet been invented. And as we get more technological capabilities and creative people use that to, and hopefully unpowered by higher productivity tools and so on, that we'll see more and more cool things emerge that we'd never dreamed possible.

4:19:24And the idea of a world simulator is actually really interesting there. It's been tried a lot. It's usually extremely slow and expensive to create, but over time, maybe we'll get better at that and that will be a thing too. You said so many interesting things there. You said city builders. Yeah. Civilization, that's just mind boggling. They were build a game with that depth that can evolve. So dependent on your actions to do that, that scale of world, but to where you can step into it and be in it. You know, I think Red Dead is a great example, but to do Red Dead Redemption in a way where you can walk around with friends at a large scale.

4:20:08And I guess what you have given so many years to screen the tools that enable the artists to give that attention to detail that Red Dead does on all, on several of the things. And once you do, there's something magical about that. But once you give that attention to detail, like, I don't know what, what it is, but the love of the artist comes through somehow, and you could feel the care that they put into it. That's right. The best games have a soul. You can really sense it. Yeah, like Call of Duty has a very different soul than Fortnite. And it just kind of exudes not only on what you see in the game, but also in how players interact with it and interact with each other online.

4:20:51That's a really fascinating thing. I wish would be studied more. I think we talked about the soul in several fronts, right? I wish we would be studied more. Yeah. Yeah. He's all game design decisions the designers make. Of a profound impact on what players think of the game and see in the game. Fortnite, Battle Royale always had a sense of mystery to it. You're on a silent, but you're not sure exactly what's happening here. There are all these houses, there are band and why. And, you know, I'm not the secret holder. I'm, you know, I'm not on the design team. I experience Fortnite as a player, but it really is, you'll have that.

4:21:28And a good spiritiveness as well. Because even when you're a limidate in Fortnite, you know, there's not like blood spurts and there's not good jubs. You're just, you know, teleported out of the simulation and often, you know, you end up losing the game in a way that's hilarious enough to, like, you're actually laughing at it or you're like respect to that player who just won because that was clever. And yeah, it creates a very different dynamic than these other games where players tend to be very positive towards each other. One of the things I like to do in Fortnite just to kind of gauge how the game is going is I play Phil Squad so you match made with the other three other random players and play a game together.

4:22:05Sometimes they have voice chat, sometimes they don't and you know back when our matchmaking regions were bigger. I learned a little bit of like battlefield field Spanish so I could speak with the people who are down as far south as you know Mexico City and you know the the positivity of the interactions there among every kind of person you might ever meet online were really quite impressive and completely unlike what you would see in a game like Call of Duty where it's always you know yeah everybody's got to be an edge lord I love online gaming culture I have to ask you because it's kind of like one of the The legendary games is Grand Theft Auto.

4:22:44Speaking of the worlds that are just like, I mean, that's a whole, that's its own thing, right? That's that world, the characters, the style, the edginess, all of that. But the interesting thing about Grand Theft Auto 6, to me that I want to ask you about is they took forever. It's the six month thing that you mentioned before. You know, there's some games like that just take years to bring to the conclusion. What can you say about that process that you eventually were able to take unreal to completion? If you were to look from the outside, why does it take Grant F. Dotto that long or other companies to take the games to the conclusion?

4:23:33And what, I mean, just insight into what that process is like? making games is very hard and especially when you're pushing the boundaries of something you know with Grand Theft Auto it's just the realism and feeling that you're in this huge city and anything can happen and it's all living and breathing and you're just a part of it. The level with which Rockstar is brought quality to that genre is astonishing and when you're building something at a level of quality and detail it's never been achieved before you can't predict how long it will take. Whatever problems you're solving today to get to, you know, the next iteration of quality on it, you don't know what new problems that one luck and often, you fix one thing and make it super realistic and that just highlights the unrealism of other things that you need to fix.

4:24:23I think the thing that always comes to mind is that shipping and game is easy if you don't have a high quality standard. We also won't have much success. We've seen from Rockstar as they take a long time, but they ship amazing games and it's worth it in the end, right? A bad game is bad forever. The late good game eventually is released and it's good. Do you ever feel like Rockstar is a good example of that, the pressure of delivering quality? You know, Epic has not missed recently that I'm aware of in terms of delivering quality. You feel the pressure of that, that you're not allowed to miss this.

4:25:06We certainly do. We, uh, everybody's often working very much the last minute to make something excellent. And, um, it's really hard with these fast delivery time frames because you really have to get a lot of stuff up and running before you can judge it like a new Fortnite season holistically. You know, it's not until like the last month or so that you really know what you're you've built and you really understand it. And if any late baking problems emerge in like balance or anything else, it's is usually towards the end and that usually leads to a rapid push to to fix it. And then other lessons you can only learn live.

4:25:42And you know, from experience and that means accepting a game that like it's a live experience and it's also an experiment and it's and I can continually be improving at any time. There's some things that some people don't like and you learn from it and you improve it and you move on. Let me ask you a big philosophical question. So you've created these gigantic worlds that bring so much fun to humanity. Now, but you also get to learn about humanity. What gives you hope about us humans, about the future of humans, about the future of humanity? You know, I see two contrasting worlds that have been brought about in the digital age.

4:26:26One is the world of social networks and people typing at each other and just massive negativity and politics and a huxerism and engagement, curation by engagement often promoting negativity and toxicity. That's a harsh world. I think is a step backwards in many ways. I think the foundation of the world is actually a little bit shaky because of just the social dynamic that those platforms have brought on. But I compare that with the good -spiritedness of what's happening online when you're connected to real people. Like actually playing Fortnite, playing Fortnite Phil Squad with people you've never met before, never talked to, and just judging what human connections do up there and whether they're positive, I've found this to be really, really excellent in endearing.

4:27:15I think the lesson from all of that is that humans talking to humans and being together in a world, the real world or virtual world is a naturally empathetic medium at which naturally leads to bonding and that conflicts sometimes occur. It's just generally so much more promoting of our social norms and good interactions between people and positivity promoting, whereas kind of the typing angry message is staying at each other as a self -reinforcing negative dynamic that's negative in that. I think you look at social media and you look at gaming that is increasingly social and I couldn't see a bigger divide between any two medium as I see there in terms of the actual social dynamics.

4:28:01One super positive, one super toxic at times. Yeah, that's actually really the text -based medium. Now that could even be around gaming. You can look at discourse, it can be a real toxic in text, but you place humans together in the real world here in the room. I literally have never, like, very rarely see humans not get along in the physical space. And the degree to which you can create a digital space, like a metaverse type of space, where it's sufficiently immersive where you feel the other person, the empathy comes out. And then the joy that's derived from the empathy comes out. And it's just a reminder that humans, like, I don't know, the humans are good and they want to see the good and others.

4:28:51They want to share the goodness. And then, you know, like, when they get in that group together, there's love there. Now they might talk shit about some other group. This is the dark side of humans. But together in terms of the dynamics of that group is joyful. So yeah, that gives me hope as well. And the more degree which we can create those worlds online, they make it super easy for us to connect in that empathic way, the better. And I am grateful that you are pushing the boundaries of what's possible in creating such worlds. And I'm grateful that you would talk with me today too. This was amazing.

4:29:31It's an honor to talk to you. Oh, thank you very much. It's been fun. Thanks for listening to this conversation with Tim Sweeney to support this podcast. Please check out our sponsor in the description. And now let me leave you some words from Benjamin Franklin. We do not stop playing because we grow old. We grow old because we stop playing. Thank you for listening. I hope to see you next time.