Fortnite, GTA VI, and the fate of AAA games

28:32So, well done. Yeah, again, it is difficult to determine whether something is successful or not strictly on the total copies sold. but I do agree that like for the best selling list, 100%, it's all franchises you've always heard of. Okay. Hypothetical future number two is what I call the prestige TV future. And this is, I think, closer to what we've been describing, right? Which is basically, we're gonna get a whole industry shifting away from there being kind of one big giant move, which is like make big movies, put them in theaters and try to make a lot of money and towards something a little broader, a little different.

29:13The business model changes a little bit, but it lets you do all kinds of different stuff. You can start to take A-list actors and make limited series and sell them that way. You can start to make longer running TV shows. You can make documentaries, have a comeback. This idea that by upending the way the business works and essentially taking it out of a couple of companies' hands, you give people many more ways to make things at many different scales that make money, Which I think to some extent, like signals a big part of the end of like these unbelievably expensive AAA games, because that no longer is the only move is to spend an outrageous amount of money to try to make an outrageous amount of money and means this whole other class of stuff can start to come up.

29:53And just based on what we've been talking about, it sounds like maybe that's a little closer to what you guys have been seeing already. It's so tough because, so I feel like we talked about this and I can't remember which episode on, but like each platform or each store is going for different things. So Nintendo is making great toys. They also make it easy to like ship indie games on their thing, right? But you're getting the Nintendo product when you go to Nintendo. I think what you're talking about doesn't quite align with like what I think of with Sony, which is Sony is we are a showcase of hardware in your living room, And we're going to continue to make these$70 to$80 video games that are very, very fancy and blockbuster, right?

30:34And that's our brand. What you are describing makes a lot of sense to me for Xbox, especially as it pushes on to Game Pass, where there becomes much more value in novelty and just pure raw output, the number of things that you are shipping. and less on, hey, here is the one game that you're going to play for the next five years. Xbox, I think, would be much happier for you to play 10 games a month than one game a month because you're playing, ultimately, the product is Game Pass. The games are just a piece of that, right? So I can see what you're talking about. I think it also leans itself into Steam.

31:14game but at the end of the day the thing that i i'm curious what both you and fresh think about is still the financial risk just making games remains very expensive it's much cheaper than it ever was before in terms of distribution and you know engines but it is really risky and i don't know how what you're describing mitigates that risk i mean the risk of making a 60 hour giant open world game is unquestionably enormous. It's probably the riskiest thing you can do. The risk of making a four hour narrative adventure that Microsoft wants because it's a good advertisement for Game Pass is a lot lower.

31:57Like It Takes Two is like kind of a great example of something that is like not that risk. I mean, it has some risk. Obviously it's a weird divorce game, but it's not that risky from an overall scale of the project standpoint. and I think, you know, Microsoft has the deep pockets that can pay for things, and if one of those fails, it doesn't mean Game Pass fails. You look at Redfall. That's a good example. Redfall was an enormous project that really had a disastrous launch, came out on Game Pass, was supposed to be like a big push for Game Pass, and the fact that it didn't sync Game Pass long-term is telling it how divested Microsoft is on this service with all the other releases that were coming out.

32:38I will say two different things about risk there in relation to that. You kind of hit the nail on the head with the Game Pass of it all. Yes, if Microsoft has given you a contract before you start making this thing, yeah, there's definitely not that much risk there. You know, you have a great thing going for you. But most developers are not going to have that. They might not even know if they should be on Game Pass or not. and whether you're making a giant game or a small game it's all relative to you making money at the end of the day right i i think the other thing that i that i'm just kind of bashing up against with this theory in terms of like the business and where the people who the investors the board members go is we're going to have grand theft auto six come out next year or the year after that and every board member is going to say that's what i want i want to continue getting that that absurd number and i'm not going to get that because somebody released a cooperative divorce game i'm going to get it because again they keep chasing this thing and so long as these big companies are tied to those boards i don't know how the big companies get away from it and maybe that's maybe that's it maybe they're like doomed like maybe you know that they are weirdly their shareholders are this albatross with where the direction that the industry is going in i don't now.

33:57Yeah. One of the most sort of fascinating threads of this entire like reporting and research project was talking to people who like care about games at like an emotional sort of I play games level. And those people cannot fathom why all of these companies have stopped caring about making games that are fun to play. Because if you make games that are fun to play, people will play them and you'll sell more of them and everybody wins. Right. And then I talked to people on the business side who are essentially like making games fun to play is like not the point like we're a business we're here to make money and if we can make more money while making the game slightly less fun to play but people still buy the game like that becomes a harder choice than i think you would like it to be and like people tell the story of halo all the time right i feel like it's like sort of the canonical version of this right like you have bungie which makes great games because it wants to make great games and then it gets so big that it kind of gets crushed by its own bigness and it switches developers and the culture is different it becomes about making money and then halo just kind of like falls in on itself like a dying star over time but i think you're right and that that tension is super real but it also gets to a point where eventually that's going to turn on somebody in a really big like earth shaking the huge way that's going to make everybody afraid i mean it it has i mean halo is a great example of that like this is the biggest one of the biggest franchises ever in the history of video games.

35:20And because of, it wasn't just monetization decisions, that was part of it. They made some like pretty scummy monetization decisions, but also like design issues and technical issues and like all that stuff, you know, resulted in a major calamity for this franchise that will need to be rebooted again. And that is like a total cautionary tale for all of these companies that is like, okay, well, there's a limit to what you can do you know battlefront 2 was another example of that and you know even cyberpunk was another example that were like you know they've righted the ship but it took them several years to get there and that was an enormous risk and and uh i do think you will start to hear within these giant companies some pushback because someone will say hey we need to push this out in fall of 2024 or whatever it is and someone else is going to say yeah but remember what happened to cyberpunk was that good for our bottom line maybe we should wait six months and i think starfielders representation of that like they delayed that game basically a full year it was done and dusted for a full year and they spent that all on polish i'm not saying that's a great game but like clearly it's one of the cleanest games that bethesda's ever released so i do think there is a slight sea change going on yeah i maybe a comparison is not just the the prestige tv but the end of the studio era in filmmaking which is like the 20s to the 50s where it's like these like just a handful of studios have total control even the the talent there is like they're good for tabloids but they are they are they do not have much of a say no they like signed contracts with the studio and then did whatever the studio told them to do yeah exactly and the studios themselves had a lot more say in distribution and that yeah maybe we are coming out of that for games.

37:14And we will see something similar to what we saw for film in the 60s and 70s. So this is Phil Spencer's big theory, right? Is that he wrote that email that came out in the Xbox leaks over the summer, basically saying that now that the handful of big publishers don't have like that retail store shelves distribution monopoly, everything is suddenly open and those companies have been slow to figure it out. Like that's, I think there's something to that theory. I think we're probably just at the beginning of that because there's more to just store shelves than in changing the way people find to buy games.

37:47But I do think I think you're onto something. And at the end of that road is something like Game Pass, right, which changes the way we think about discovery, because you don't have to buy a game before you can play it, you can just show up and play it. It changes the way that games get made, because they're going to end up in a lot of cases getting paid for how people play, not just by getting you to buy the game with by calling it Hogwarts all of that feels like it's it's in the middle of like being turned on its head right now yeah I do want to be careful though because when we say oh this might be the end of like the studio era we're still in a circumstance where like a very very small number of companies are in control of the vast majority of the generation of wealth within the games industry microsoft just merged with with activision uh that is a huge percentage of the game space look at how much uh valve controls the pc gaming market and that's what are they getting 30 on each sale for that i mean effectively that's a studio deal in a lot of ways so you know i don't think it's that divested among so i mean a lot of people are making money in games don't get me wrong but But mostly it's these eight companies that are doing very well.

38:57And I think it'll only increase to combat what you were just talking about. Because the way to solve that problem of not having the store shelves is acquisition. You know, Microsoft going out, buying Bethesda, buying Activision. You know, Sony needs to make the same sort of moves to ensure that they have these franchises that can rise above. And again, all that does is just make it fewer and fewer companies. Yeah, I found one study that said the public gaming companies like Nintendo and EA and a few others right now have more than$45 billion between them just in cash sitting around. And obviously, that's not going to buy you an Activision, but there's only one Activision and Microsoft already did that.

39:36And so the theory coming out of that was we might be in for a huge phase of consolidations and acquisition. And we're going to go from this sort of interesting splintering of people who can make big, good, cool, exciting games. And that might all start to get compressed again, because it's going to get bought by the same handful of companies that have been doing this for a really long time. I think that's very possible. And I think would be kind of bad news. i maybe the only hesitation i have with that is like we've seen embracer group try to do that right like a large company be like i'm gonna buy up 30 different things and try to run them all and it doesn't work well i think there's a reason that even again going back to film studios they let a lot of independent creators and studios and groups make something and they go and acquire that product and then they like they one they avoid the risk of like the early days of development but two they're not managing so many things i wouldn't be surprised if people made the bad decision to like over consolidate and try to get as many studios under your banner as possible but i at the same time i'm impressed by disney who keeps i feel like every other week you hear disney needs to go out and buy a video game studio that's the best thing for disney And it's like, no, you know, it's great for Disney having control of all this different IP that everybody wants to work for having no overhead cost and being able to set how much money you want from each project.

41:06yeah well and that like to just to pull it back to the like the tv streaming era that's very much how we got peak tv right you have all these different players looking for content you get into this place where like being someone who makes good things becomes an incredible advantage because you're gonna you have all this competition for your work and everybody's looking for new things and so the like you get this phase of frankly too much spending on the like distributor's side but it's a huge win for the people who like make and consume content so like it all turns into a giant mess which is what we're living through in the tv world right now but there is a phase where like if if that comes true like you're describing chris we might get a hell of a lot of really good games really fast which could be very exciting i'm so curious what number three is going to be here okay do you want to hear number three yes oh shit i have two more and i can't decide which to do first all right we'll just do number three right now number three is what i call the iphone future which is that everybody starts to complain that the big thing is boring now everybody gets mad and oh would you look at that it just keeps winning and the part of me that thinks this might be the truth is the part of me that has talked to folks who say some of these franchises we have are just completely unkillable that there is nothing you can do to assassin's creed there's no version of assassin's creed you can make that is so bad that people will stop playing it or that people will stop making it.

42:31Same for Call of Duty, same for Madden. Everybody's going to keep making Star Wars games because it's Star Wars. Everybody's going to keep making Harry Potter games because it's Harry Potter. And that world is now so big and so successful that breaking it up or even breaking into it is going to be much harder than anybody reckons for. And there might be a bunch of cool folks on the outside competing for scraps, but like the winners are going to stay the winners, no matter what they do. It is funny that you mentioned Assassin's Creed at the top there, because Assassin's Creed historically was an annual franchise.

43:03It just started, you know, Ubisoft was pumping them out at an insane rate. And then just recently, like, you know, they released Valhalla when the Xbox Series X and PlayStation 5 launched and then had like a gap of three or four years between that and Mirage, which just came out, to like kind of tepid reviews. I think that's a representation of like Ubisoft realizing, hey, there's a lot of burnout here and we can't keep up with it. It is not necessarily the bankable franchise that it once was. So while I agree with you, like, Assassin's Creed's not going to, like, go away forever, I don't think it's the, like, lock-solid guarantee that it once was.

43:41Yeah, and I think you already named Halo. Yeah. And before that, we talked about Tony Hawk and Guitar Hero. Nothing's unkillable. To be fair, nobody killed Tony Hawk. Tony Hawk remains Tony Hawk. He's doing great. That depends on which conspiracy theories you believe. I could see that in the sense that, like, yes, certain IP that transcend games like Hogwarts or whatever, yeah, of course, they're just going to keep making them. And once they, you know, burn through one developer, they'll go to a different one. I could maybe, I think the exception to the rule here is, yes, something like Call of Duty, where it will extend long beyond its life cycle.

44:23But, you know, Call of Duty Modern Warfare 3 might have been, you know, laughed off the face of Metacritic. Warzone's still making plenty of money, you know? Like, so they've done the thing that I think Ubisoft wanted to do with Assassin's Creed, which was, hey, we need to get away from these annual games. We need to get a, like, living game version of this out. and we're still waiting for that with Assassin's Creed where so far Call of Duty has done a pretty good job of adjusting and they have a history of doing this. They had mobile Call of Duty games that were available and I believe in China, South Korea, Japan years ago before they were even here.

45:06They, I believe, had a partnership with Tencent. This is things you'll need to fact check, but they're aware that they have to evolve with the times And then, yes, the core product can just kind of keep being there. It's funny talking about all the Marvel stuff in the superhero era because it's not so unlike what Marvel has done with comics, right? Yeah. Comics themselves go up and down. But they're always trying to get into film or TV or audiobooks or who knows what else. And even if the original comics are not the top sellers, they never fully go away. Yeah, I think that's right. And I think one of the things for me that has been the most interesting in trying to figure out this particular future is it feels like I do think some of these franchises are, if not too big to die, like damn hard to kill.

45:55But then there's also this thing, like you talk about the live services game, and it also feels like we now have this dominant generation of a handful of those games. You have, you know, Roblox and Fortnite and I don't know, Apex Legends kind of and Warzone. And like there probably aren't more than five of these games that essentially dominate that space. And it also feels like those are now so entrenched that it might be hard for someone else to come in and do it. So maybe I don't know, maybe maybe that old version was like the iPod era. And now the live services games are the iPhone like poised to do the next 15 years.

46:31and maybe that's just the cycle we're in now we were talking about risk and i was saying how a 60 hour open world rpg is a huge amount of risk these days doing a free-to-play high budget game in the live services space is enormously risky yeah it is so hard because those games in particular more so than like the star fields of the world free-to-play live service games are designed to maintain the player base there's no winning those games you're always constantly given stuff to unlock or buy or whatever it is, Fortnite changes every other week. They are constantly trying to hold on. So you would literally have to steal players away from the other game that they're playing to have your game be successful to the point where Remedy, who just put out Alan Wake 2 to critical acclaim, announced very recently that they were working on a multiplayer free-to-play live service game that is no longer free-to-play and more narrative focused and more driven by what they're good at.

47:29So I think companies are realizing how disastrous it can be trying to jump into a space that is already pretty well dominated by a handful of players. Yeah, the network effects of it are just so big to me. That's the thing I keep thinking about. It's like, you not only have to get me to think a game is cool, you have to get a bunch of people I like and then many tens of millions of strangers to also think it's cool before I can actually do anything in it. But the flip side of that is the reward seems to be higher than ever, right? Like the sense is we can build this game essentially once and make money from it forever.

48:07And that seems to be what everybody wants now. Fortnite's revenue is astronomical. You know, some of the leaks came out as part of the Epic lawsuit and like it is staggering how much money they're making. But you have to keep in mind, even though it seems like you're right, you could just make one game and you know maintain it or whatever it is and and people just stick around that is very much not the case the only way you can get people to stick around is by constantly changing it adding new maps adding new modes skins whatever it is forever like there's no ending to that yeah so you really are committing to this forever tale to maintain that player base so that you know it's it is not as easy as you have your smash hit and then it's it's good to go but that also shows you how hard it is to jump into the space because people are committing to not a three-year project, but a 20-year project.

48:58Chris, what do you make of all that? Are these live services just going to take everything over for this next phase? Definitely won't take everything over. Everything exists at the same time. You know, it helps to think of video games like channels on a TV. They can all be doing a different thing. You know, you can go to CNN and have 24-hour news and you can have a 24-hour thing. And you go to another channel and it's like the weather channel and they do the same thing every five minutes, right? But you know why that's a fun example is because a handful of those channels pay for all the rest of them.

49:31Yeah. And most people only use three or four of those channels. And yet you would say like, hey, do you like TV? And they're like, yes. But I don't think anybody means the weather channel when they say they like TV. No, they mean the weather channel. I mean, have you seen the CG on the weather channel lately? They're doing wild stuff. Listen, the weather channel is sick. The thing they do with the storm surges, like I'm all about it. They have no respect for human dignity. No, I think it's easy to think of video games and video game business as this monolithic force. But it really is. It's a sports industry.

50:03It's a lifestyle industry. It is a children's entertainment industry. It is a grown-up single-player thing. It is a means of communication. It is all these different things. And, I mean, I think that is probably the reality of everything that we're talking about, is all of the futures that you're talking about are going to be true in some capacity and they're going to overlap and often conflict with each other. It'll just depend on like, what are the type of games that you see as the video game industry? When you go to the Game Developers Conference in San Francisco every year, they have these summits that are broken up like the VR summit, the free-to-play summit, right?

50:42And the business people that that attracts are just completely different human beings. Their strategies, the type of games they're making, everything about it is so distinct that you could go to one of them and think, wow, this is everything. And then you walk into a room across the hall and you're like, I'm hearing the exact opposite of everything I just heard an hour ago. And neither of them are necessarily wrong. Well, VR and Bitcoin, they were probably both wrong. But other than that, it was great. No, I think you're right. And I think one of the actually most encouraging things I found doing all this research was that we're in kind of a weird time in the entertainment business in general.

51:20PwC, the accounting and consulting firm, they do a really interesting state of the entertainment business thing every year. And the basic takeaway for, I think this year's was 23 through 27. So sort of the next five years was kind of the outlook. And basically the overarching theory is like the entertainment business is weird and messy and growth is going down in a lot of ways, except for gaming, which just against all odds continues to grow along basically every axis you can think of like more people are coming into gaming they had this fun stat that like people over 45 are one of the fastest growing groups of gamers right now so are women so are young girls like it's a it's a every faction of people you can think of are increasingly gaming and what that means is probably that like a handful of big things get even bigger over time like a lot of these people are going to show up and play call of Duty.

52:11That's fine. But it also does mean just the pie gets so much bigger that it's just going to allow for a lot more things. But all of that being said, I think it is still going to be true for a long time that a handful of companies and properties run this business in a pretty real way. Like Call of Duty is going to continue to be a bellwether for a lot of things in a way that most things are not. Yes, I think that's right. I think we can know for a fact that Grand Theft Auto will make a lot of money and it will be absolutely humongous and Take-Two will be okay because of it. We can know for a fact that FIFA, now EA Football Club or whatever they call it.

52:52EA Sports FC, the worst named video game of all time. Yeah, it's going to keep EA just afloat enough for them to continue to try to figure out how to make Mass Effect sell again. What is confusing is like, will EA be as big as it once was? I don't know. Will Ubisoft be as big as it once was? I don't know. Will new players rise in their place like Epic with Fortnite and, you know, publishing Remedy? Probably. So I think you're right. The big difference is that just who those people are might change in the same way that, you know, Capcom, if you had asked me about this 10 years ago or sega i would be like what are you talking about sure and if you asked me about capcom and sega today i'd be like they do no wrong they they continue to make well capcom has a really good streak right now it depends it can go back and forth or if you told me that konami would not have put out games really for a while and that bandai namco would be uh huge now none of these things were the things i could have predicted and yet now arguing against elden ring as anything but one of the biggest games in the world.

54:00Sounds silly. Yeah. And I think that applies to the game franchise as well. You know, people didn't have much understanding of what Minecraft was going to be when Minecraft launched. And the fact that it is now a worldwide property that was originally made by a very, very, very small team tells you that it is possible. That is like the jackpot of jackpots. There's really no scenario where anyone would ever bet the likelihood of that happening. But it is possible for new franchises to get in there. It's just very, very rare. It's like a once every five years kind of thing, if that. So, yeah, I mean, you will see movement.

54:37But again, I, you know, so long as you're not super hyper focused on the large business side of it. And if you're just sitting at home and you want to play cool games, it's never been better for that. Like it is literally so diverse and you have so many options. and from a like inexpensive nature, like playing games and being into games, pretty damn cheap for what you're getting out of it. Like the ROI is incredible. So I think it is kind of a great time, as you said, for the audience to really grow and become bigger and more welcoming. Can I just tell you the unfair thing about video game culture?

55:14The one thing. Just, this is actually the only one, the only issue I have. I've never actually had any concerns and that's well documented. That fresh mentioned Minecraft and I can say something like, I played the original build of Minecraft when it was in a forum. And I say that out loud and I sound like the biggest asshole and nobody thinks it's cool. You also sound like you're 200 years old. I do. But if I said something like, I saw those lovely boys in Liverpool at a little bar down the street and then they went on to become the Beatles, people would be like, holy moly, that's incredible. and I don't know what that is.

55:52There's something, there's maybe it's just game history that that was still of a dork era that people are like, yeah, that just means that you're around in a dork at that time. You know, pipsqueak gonna give you a swirly. Chris, I just want you to know I think you're impressive. Thank you. Honestly, I just wanted praise and I got it. I'm so proud of you. I could not, I couldn't even begin to tell you. You might think that it doesn't work, but it does. I do feel better. I am. Listen, I'm proud of you. You were early. You were early. What are you going to do? You were the first one. You get to be a Minecraft hipster.

56:21Congratulations. I'm going to cut this recording out and then just listen to it every morning when I wake up. There we go. All right. We need to take one more quick break. And then I have one more theory that we've kind of already talked about. And then I have some questions for you. And then we're going to get out of here. We'll be right back.

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57:58All right, we're back. My last theory we've basically already talked about, but I'm just going to like put a couple of pieces together very quickly for you. And this is what I call the music industry theory, which is basically that instead of a radical change in content, the first thing we're going to get is a new kind of consumer product that is actually then going to back into changing all of the content. And I think the two versions of that, both of which we've talked about a little bit, are Game Pass and things like it. This idea that you pay one price for lots of games instead of buying games individually and live services games, which is just a completely different way of monetizing a game that functionally changes, like you were talking about, Russ, what those games are and how they're made and maintained over time.

58:38So I think in this case game pass is probably the more relevant one to like us right now at this moment because what we haven't seen is what that will mean for how games get made whereas i feel like the live services answer is just obvious right like if microtransactions changed how games got made like that that just exists in the world now i don't think that's arguable anymore but i do think the question of like is the way that we buy and pay for games going to change the games themselves is still kind of in the middle of being sorted out i actually think that game pass is already determining how some games get made really okay it's i think it's already happening i think there are three hour narrative games that would not exist if a pitch wasn't greenlit by microsoft and said okay oh this is great we love what you're doing and here's this like cute little uh walkthrough of it and we're into it it's going to come to game pass but ordinarily that three hour narrative game would really struggle on steam or another platform and game pass is the solve and the way that it kind of reaches all the people.

59:40Chris, you were pointing during that. I'm assuming you like this theory. I was waiting for Fresh to save my game of the year from last year, Pentiment. It was made within the Xbox family. This is an indie game. But what happened is Obsidian, who has made very, very large role-playing games, decided, let's make a book about the 16th century. And when I say a book, I meant video game, but that was a hell of a 480 and slip because it was really just a game that you read a lot about you are uh an illuminator so like the person who made like you know texts look beautiful uh way way back in the day and then there is kind of like a murder mystery that happens it is a slow game it is a deeply thoughtful game it is a religious and spiritual game it would have never ever been made within the xbox system without Game Pass.

1:00:37And Xbox made a lot of indie games, but there is a huge difference between Limbo and Pentiment. And I think Xbox proving that is showing like, hey, this is something that we're looking to do inside. I think that they are doing it. I think there's a lot of reasons for them to do that. I think that is a great way to retain talent because how often in the past would it be like, well, this person made all their money and now they're going to leave and go make Pentiment because they can. And being able to say, hey, you know what? Stay here. We'll keep you paid. We'll take care of your health insurance and you can just make it here.

1:01:09I think that's encouraging. I think it also is a great way for them to test out ideas. Playing a game like Pentiment, you can feel a lot of the groundwork for probably much larger games that this studio will do in the future. So it creates, I think, a healthier ecosystem at these very large companies. Frosh mentioned really earlier in this Dave the Diver at Nexon being mistaken for an indie game. But I think it's telling that Nexon would want to try to create something like that and have that as part of their portfolio. It feels crass when you have to say like as part of a portfolio. But again, at the end of the day, these are businesses and they are balancing these needs.

1:01:49I am more curious what this means for studios that are not owned by a major publisher though and how will they start designing games towards Game Pass, especially if they don't have a contract before they, you know, start work. Yeah, it's worth noting. I don't think there's a scenario, especially in those external cases, where they don't kind of start with a representation of what the project's going to be and pitch to Microsoft and say, hey, here's what the game is. So no one's starting from 0-0 to get on Game Pass. But I do agree. I think those pitches are altered by Game Pass simply existing.

1:02:26Yeah, it's like the... It just always makes me think about the thing on Netflix where like every Netflix miniseries is like two episodes too long because they're very interested in the idea of getting you to watch as long as possible because that's what success looks like. And so every movie is 30 minutes too long and every miniseries is two episodes too long. And part of that is just a function of what the system is, right? It's the incentives. It's how people experience these things. It's what gets you in the door. And I think in games, that will do some really interesting stuff, just in the same way that like the app stores is another recent example of this, right?

1:02:59Like the app store changed the way that people thought about paying for games because it pretty quickly, everybody decided that you can't put a$70 game in the app store, whether that was a good decision historically or let us down a bunch of really horrible roads we can debate. But then that changed a bunch of games. And that's where a lot of the free to play stuff started to come from. And like loot boxes started to become the thing. And it changed Apple services business. And like you spiral all of that out of this, like one, how it monetizes decision in really messy ways. It also led to a lot of awful, awful crap on the app store that is just designed to con you into paying for stuff you don't actually want.

1:03:35And my fear for something like Game Pass would be that like, if not properly curated, it will turn into something like that, too. like I think all the time about Spotify's thing where there are all these white noise podcasts on Spotify making a ton of money because the way that they make money is by getting you to play stuff for a long period of time and if you play a 12-hour noise podcast for eight hours that's going to make the podcast some money even though it's just white noise and so that's just like it's a little way of breaking the incentive structure that I think there are going to be ways to do that in games that are going to be ugly and it's going to be interesting to see Microsoft and others try to not let that happen.

1:04:13What is good is that because you have to pay for Game Pass, Microsoft really can't put free to play games on Game Pass because those are free. So at least you can avoid that. There are games on there that have monetization elements where you can buy skins or whatever it is, even though it is on Game Pass. Broadly speaking, that's not the case. Most of the games that are on there are like pretty full games to begin with. But I do think having that small barrier to entry of payment actually makes a huge difference. Apple Arcade is the other representation of that, where none of those games have monetization built in because they're already getting the money up front.

1:04:48And both of them are also retailers. So it's the difference between like Netflix and Amazon, Amazon Prime, right? Where Netflix doesn't also sell the movies. So they just try to get as much as possible within Netflix. But I feel like in both the Game Pass and the Apple Arcade case, you can have chaos. You can have thousands of options. Go buy them. But when part of the sell of joining these services is the curation, you're only going to get the quote best to the best. No, I think that's right. And I think if that holds, it can lead to some very cool things. And again, is another kind of thing that can open up lots of discovery and different avenues for doing different kinds of stuff because you don't just have to bet on the stuff that you know works because you have other ways to put it in front of people.

1:05:33I think that's very cool. All right. It sounds like all my theories are true. I feel great about this. I crushed this research project. You did so well. I'm really proud of you. I have three questions for the two of you that I have not successfully answered in any way, shape or form by talking to people and that you guys have brought up and I want to talk about it and then we're going to get out of here the first question is is the 70 price tag for a game gonna last can that hold i see people who are furious about it i see people who are like actually that's an undersell for what some of these games are worth like is that is that sustainable in the gaming industry certainly not going to go down like it's it's at 70 now for you know quote next gen games obviously smaller games can be cheaper than that but yeah that i think that will stay um but i also think some games if you're going to spend hell elden ring perfect example i played elden ring for 150 hours easily worth i think it was try 60 when it came out easily worth that 60 i'd pay 100 and be happy so yeah i i think uh it is sustainable insofar as it's not going to come down from that i also think we're seeing more variety of pricing across the landscape you know assassin's creed mirage didn't cost 70 dollars yeah and yet it's the ubisoft's big game there's i think it's never great to have to pay more money for things but also the pricing of video games has been a disaster for two decades and how that has been addressed has been everything from horse armor you know to other dlc and and the studios are always trying to figure out like how are we going to make this work the industry is a bit more financially perilous than i think sometimes people give it credit for that's not to say that there aren't ceos taking just absurd paydays and that there is better ways to run these businesses but even with that the sheer cost to make a game is just getting higher and higher and the risk associated with it is getting higher with that what i would also add is go back and find copies of like the toys r us magazine from when the super nintendo launched and you will see the prices were like pretty much in line with the prices we see today sometimes even over back then so really game prices have not kept up with inflation in the way that other industries like movie tickets have though we have verge listeners so we will recognize that is because it is cartridges with chips inside and it costs more to actually make them in discs.

1:08:05We recognize all of it. I'm just saying I could feel people tensing their hands around their steering wheel being like, am I gonna just drive right off the edge? Companies will charge exactly what they think they can charge and still make money. And I will say there is really no historical precedent for that number going down. I think you're right. Okay, I'm gonna combine my last two questions into one question, which is, what the hell is the deal with GTA 6? I have talked to so many people and done so much research on this. And there is this thing that is happening where the news of a possible forthcoming trailer for GTA 6 was like nationwide news.

1:08:44GTA 5 is like a good game. It's very old. It's very popular. Grand Theft Auto is not like by an order of magnitude, the biggest game on planet earth. But there is something about this game coming, we think next year, right? 2024 that is different. Like what is the deal with this game? I mean, I would look to when Grand Theft Auto V came out that year, it was a guaranteed lock solid, no question about it, biggest game of the year by a mile. And it's continued to make a ton of money over the course of the last decade because of monetization, GTA Online stuff. So maybe I'm underrating how big GTA really is.

1:09:21Oh, yeah, big time. There are very few games, and this applies to like Call of Duty as well, very few games in the world that you know for sure are going to totally dominate the sales of a given year. And GTA is one of them. What if it sucks? Like, is there any remote possibility that this just like isn't a good game? It's been a long time. Oh, sure. Yeah, they've had some turnover with staff. It's certainly possible. I mean, we've seen, you know, Cyberpunk. Everyone was so sure that that game was going to come out and be incredible because Witcher was amazing and that studio does amazing work, broadly speaking.

1:09:57And it came out and obviously wasn't. So it's always possible. I do think, and I brought this up earlier, I do think because of the cyberpunks of the world, if there was a chance that it was going to come out and be a total disaster, they would hold it. They would not put it out because the amount that they've already sunk into it would not allow them to eat the amount of shit that they would have to eat if it came out was a disaster. That's fair. Chris, I remember in one of our first conversations about this series, one of the questions you floated was, what if GTA six is the last triple A game?

1:10:30I think it won't be, but I think there is something about this moment and this game that feels, I don't know, inflective. Is that a thing? Like at an inflection point? Can you be whatever? It feels like a moment in the broader gaming world, too. It is because it always is bigger. Every GTA game is bigger than what we thought possible. I remember when I played GTA V for the first time on the Xbox 360 and it felt like the dark arts. It felt like it should not be running on that hardware. And it was just so grand in scope and ambition. Whether or not it's even good, it's just big. It's funny since we talked about that.

1:11:09I actually dug up an old story. And it's telling me I can't remember if it was during GTA 4's launch or GTA 5's launch, which was by somebody who was saying just that. This is the end of AAA games. It can't get any bigger than this. It's not sustainable. We'll never see anything like this ever. and like obviously that was not the case that said we are in a different point in the industry than we were when gta 5 and even gta 4 came out everything we just discussed before this there is more variety and more choice there are not just the single player games it's people might forget the gta 5 with online online came later and broken and it took a while to like get get itself up and running.

1:11:53And now either online is an entirely separate game or it works at the beginning. It's going to be one or the other, but we're not going to see that happen again. So yeah, I don't think it's the last AAA game, but I do think it will feel different than anything that we've seen before it. And I also think the wait for GTA 7 might be even longer because they've realized how much money they can make building a really sustainable online system with monetization built in, that this feels like the launch of a live service game as much as it is a single-player campaign where you, you know, commit crimes.

1:12:32So, yeah, it's going to be a big deal, and it's going to be a game that we're going to be all living with for easily a decade, if not 15, who knows, 20 years. Can I tell you my ridiculous GTA 7 theory? Yes. GTA 7 is going to be the return to New York, and they're obviously they've already spoken a lot about their interest in ai and generative tech and i don't think they do gta 7 unless you can go in buildings in new york which would be just an absolute absurd idea but i i don't know i'm curious like what the big turn is as they as we look you know 15 years out from now what are they thinking about hey hey chris plant we've played it guess what we've played that game you're talking about it's called starfield it's got thousands of planets and you want to go in none of them well no no no you see what you forgot though is that game was called load screen yeah i'm talking about a game where you actually get to do the thing that you're uh promised man starfield really walked into the room at the wrong time i'm sorry game i'm very interested in i mean maybe this is a series that we do next that distant future of video games is where I'm really curious about what things are going to get, because on top of all these other inflection points, we are hitting a technological moment that I think is going to really change what video games look like and feel like.

1:13:54I think that's right. I've heard a surprising amount of people saying generative AI is going to completely change everything about how we make and experience video games. And everybody says that about generative AI and everything. So I'm like, I kind of do a lot of like patting people on the head when they say that stuff. But I think fast forward a while and you're probably not wrong. I would just kind of say with generative AI, I understand that people hear that and they might think like, oh, generative AI is like creating a game that I hit the make me a good game button. I'm not talking about that.

1:14:20Like, if you go to any of these major studios, they are farming out so much work to people who just make apples and fake Blu-rays and tables that they put in their game. Just stuff. Assets. that is a thing that I think will be filling that right like there are again whether or not that's good or evil or whatever is a whole different thing but it is going to allow for scale in a way that I think is going to be kind of disorienting at first all right well in 2038 the three of us are going to do like a hologram revisit of this series and we're going to see what we got right and what we got wrong but for now we got to go thank you both for doing this this series has been so much fun we're gonna have to like invent a reason to do this again i have very much enjoyed doing this with you guys hey can we plug our show please if you have enjoyed listening to russ freshtick and myself we have a podcast called the besties that we do every week with justin and griffin mcclellan of the adventure zone and my brother and my brother and me that's kind of how you say it um and we also have a every other week uh spin-off on the same feed called the Rusty's where it's just Fresh and I kind of getting into the nitty gritty of things.

1:15:34So if you enjoy that, you can get that. And if you enjoyed us being here, you can reach David at Nilay Patel at CompuServe.com, I think is his email address. And we'll take care of it from there. I'll leave his phone number in the show notes. 1-800-COOL-GY. Perfect. Awesome. Thank Thank you both. We will do this again someday when GTA 7 comes out. It's going to be epic.

1:16:04All right, that's it for the Vergecast. Thanks to Chris and Russ for being here. This was super fun. I will miss you terribly. And thanks to all of you, as always, for listening. As always, if you have thoughts, questions, feelings, or other big games you want to talk about, you can always email us at vergecastattheverge.com or keep calling the hotline 866-VERGE11. We have some fun hotline stuff planned between now and the end of the year. So keep calling in with all of your questions, thoughts, and ideas. This show is produced by Andrew Marino and Liam James. The Verge Cast is a Verge production and part of the Vox Media Podcast Network.

1:16:35We're off for the rest of this week for the Thanksgiving holiday, but we'll be back next week because there is more news. We got some fun end of the year stuff coming, all kinds of good stuff. We'll see you then. Rock and roll.

1:16:53Thank you.