WEBVTT - Tech News: Ubisoft Moving Toward Free to Play 0:00:04.400 --> 0:00:07.800 Welcome to Tech Stuff, a production from I Heart Radio. 0:00:12.119 --> 0:00:15.240 Hey there, and welcome to tech Stuff. I'm your host, 0:00:15.480 --> 0:00:19.439 Jonathan Strickland. I'm an executive producer with I Heart Radio 0:00:19.520 --> 0:00:23.239 and I love all things tech and today would normally 0:00:23.280 --> 0:00:29.000 be a tech news day for Thursday twenty one, but 0:00:29.200 --> 0:00:32.680 I thought I'd do something a little different. This episode 0:00:32.720 --> 0:00:36.320 will be shorter than a normal tech Stuff episode, but 0:00:36.440 --> 0:00:38.600 it does tie into something that was in the news 0:00:38.680 --> 0:00:42.280 this week, and so it's more like a commentary and 0:00:42.640 --> 0:00:46.240 point of view on the news. And earlier this week, 0:00:46.280 --> 0:00:50.440 the head of finance at game developer and publisher Ubisoft 0:00:51.200 --> 0:00:55.120 said on a call with investors that producing three to 0:00:55.280 --> 0:00:59.280 four premium triple A game titles per year is quote 0:00:59.760 --> 0:01:04.280 no longer a proper indication of our value creation dynamics. 0:01:04.280 --> 0:01:09.319 In the quote, Um, that's not easy to parse language, 0:01:09.680 --> 0:01:13.280 ain't it. I mean, it's got all sorts of corporate 0:01:13.360 --> 0:01:15.720 speak in there. But what's actually being said here is 0:01:15.720 --> 0:01:20.959 that the old classic model where a company produces a 0:01:21.000 --> 0:01:27.160 premium title and then relies exclusively on sales of that title, 0:01:27.880 --> 0:01:30.119 is more or less a thing of the past, and 0:01:30.240 --> 0:01:33.240 it's important we walk through this now. I did some 0:01:33.319 --> 0:01:38.320 episodes about the history of Ubisoft last year, I think, 0:01:38.920 --> 0:01:41.000 and this is kind of an addendum to that in 0:01:41.000 --> 0:01:43.440 a way, because it's a a look at how the 0:01:43.480 --> 0:01:47.280 company is viewing its future. I should also point out 0:01:47.360 --> 0:01:50.480 that a lot of folks have actually covered this story 0:01:50.520 --> 0:01:53.760 pretty thoroughly, a lot of Pierce, who works at Sony 0:01:53.880 --> 0:01:58.760 Santa Monica, did a fantastic breakdown explanation of what's going 0:01:58.800 --> 0:02:02.720 on from an industry for Inspective. I highly recommend you 0:02:02.800 --> 0:02:06.000 go to YouTube and check out her video. It's titled 0:02:06.120 --> 0:02:10.800 Let's talk about Ubisoft Going free Play. I'm gonna be 0:02:10.840 --> 0:02:13.680 going over some of the same ground that she does, 0:02:14.080 --> 0:02:16.640 but she's super good at this, and if you're not 0:02:16.720 --> 0:02:19.000 familiar with her work, you should check it out. She 0:02:19.080 --> 0:02:22.680 does all sorts of stuff um with her channel, mostly 0:02:22.720 --> 0:02:27.320 to kind of relate to the video games industry, not exclusively, 0:02:27.520 --> 0:02:31.040 but frequently, and she's got some really good insight on 0:02:31.080 --> 0:02:35.239 this um having worked both as a games journalist and 0:02:35.480 --> 0:02:39.760 now working to write video games. So let's consider for 0:02:39.880 --> 0:02:43.120 a moment the business of making video and computer games, 0:02:43.160 --> 0:02:47.120 because it has changed dramatically, and keep in mind this 0:02:47.240 --> 0:02:52.640 is still a relatively young industry, so forty years ago. Okay, 0:02:52.680 --> 0:02:56.840 maybe not that young man, I'm old. Anyway, forty years ago, 0:02:57.320 --> 0:03:00.640 it wasn't unusual for a single person to make a game. 0:03:00.919 --> 0:03:04.240 That person would program the game from start to finish, 0:03:04.320 --> 0:03:08.960 they design everything. But then getting that game out so 0:03:09.000 --> 0:03:12.399 that people can you know, buy a copy was still 0:03:12.440 --> 0:03:15.440 a big hurdle. There was no Internet that the average 0:03:15.440 --> 0:03:20.760 person could access back in those days. So some early programmers, 0:03:21.080 --> 0:03:23.760 like say Richard Garriott, who was the creator of The 0:03:23.840 --> 0:03:28.200 Ultimate series, they got their start making games and copying 0:03:28.280 --> 0:03:31.200 their code to diske kets, you know, like five and 0:03:31.240 --> 0:03:34.360 a quarter inch discs, and then packaging those up in 0:03:34.480 --> 0:03:38.320 ziplock bags with maybe a page of instructions, and they 0:03:38.320 --> 0:03:41.920 would then go to their local hobby stores, which would 0:03:42.240 --> 0:03:45.520 sell them for you know, X amount of money per copy. 0:03:45.640 --> 0:03:48.839 You would even find bulletin boards where these bags would 0:03:48.880 --> 0:03:52.520 just be hanging from a thumbtack and you could take 0:03:52.560 --> 0:03:55.000 one down and go up to the cash register and 0:03:55.320 --> 0:03:59.440 purchase a computer game this way. But obviously that approach 0:03:59.720 --> 0:04:02.280 net you have a very limited number of customers. It's 0:04:02.320 --> 0:04:06.600 not scalable. It's not like you could do this nationwide. 0:04:06.760 --> 0:04:09.560 You could maybe do three or four hobby stores in 0:04:09.600 --> 0:04:13.920 your general area. Then you're kind of done. But then 0:04:14.120 --> 0:04:17.800 you've got your video game publishers. These are companies that, 0:04:17.920 --> 0:04:21.120 at least in the old days, would form relationships with 0:04:21.240 --> 0:04:25.599 various retailers and the publishers would pay developers for a 0:04:25.640 --> 0:04:28.359 game title. Uh, sometimes you would have a developer and 0:04:28.360 --> 0:04:30.400 a publisher be the same entity, but a lot of 0:04:30.400 --> 0:04:32.680 times you're talking about, you know, one group is developing 0:04:32.720 --> 0:04:35.520 the games and then the publishers are taking it from there. 0:04:36.080 --> 0:04:39.960 Then the publishers would distribute that game title to various 0:04:40.000 --> 0:04:44.720 retail establishments, So the publishers would get money from retailers 0:04:45.160 --> 0:04:47.760 who turned around and then sold copies of the game 0:04:47.839 --> 0:04:51.240 for a profit. So everyone along this chain got paid. 0:04:51.720 --> 0:04:54.560 The retail stores were getting paid by the customers, the 0:04:54.600 --> 0:04:57.440 publisher was being paid by the retail stores, and the 0:04:57.640 --> 0:05:01.200 developer was being paid by the publisher. So you had 0:05:01.200 --> 0:05:04.720 to cover your costs obviously every step of this chain, right, 0:05:04.760 --> 0:05:08.000 The developer needed to make enough money to cover the 0:05:08.000 --> 0:05:11.320 time and effort that went into creating the game. The 0:05:11.360 --> 0:05:14.680 publisher needed to make the money back that was sent 0:05:14.760 --> 0:05:17.320 to the developer, and the retailer needed to make up 0:05:17.400 --> 0:05:21.080 the money that was spent on getting inventory. These relationships 0:05:21.120 --> 0:05:25.000 came in a variety of forms and agreements. Uh sometimes 0:05:25.240 --> 0:05:27.880 there were royalties involved, which was great news for the 0:05:27.920 --> 0:05:32.279 developer with royalties, if the title sold really well, the 0:05:32.360 --> 0:05:36.280 developer would benefit from that with royalty payments, but this 0:05:36.360 --> 0:05:41.120 wasn't a guarantee, especially in the old days of game design. 0:05:41.920 --> 0:05:45.240 One thing that was pretty darn firm, however, was that 0:05:45.320 --> 0:05:48.760 the purchase of a game was the end of the transaction. 0:05:49.120 --> 0:05:51.400 So if I walked into a computer store and I 0:05:51.440 --> 0:05:55.599 purchased a copy of Ultima, well that was one unit 0:05:55.720 --> 0:05:59.200 sold and the transaction pretty much marked the end of that. Right, 0:05:59.839 --> 0:06:03.480 I bought my copy, I handed over my cash. Done, 0:06:03.960 --> 0:06:06.760 so you generate revenue at the point of sale, and 0:06:06.839 --> 0:06:10.279 that's it. Flashboard a few years, and then you get 0:06:10.320 --> 0:06:13.120 some new models that start to pop up. One was 0:06:13.279 --> 0:06:18.640 expansion packs, so companies would create expansions to previous titles 0:06:18.680 --> 0:06:22.400 that already had an established fan base. So if someone 0:06:22.480 --> 0:06:25.919 makes a game and it sells really well, often that 0:06:26.000 --> 0:06:28.960 means that the players are really eager to get more 0:06:29.120 --> 0:06:32.320 of whatever it was that they liked, so you can 0:06:32.360 --> 0:06:37.279 create additional material, and expansion packs frequently leaned heavily on 0:06:37.400 --> 0:06:41.080 using the assets that already existed for the original title, 0:06:41.600 --> 0:06:44.480 which meant that the developers didn't have to reinvent everything, 0:06:44.480 --> 0:06:47.160 they didn't have to build a game from the ground up. 0:06:47.200 --> 0:06:52.120 They could repurpose assets for this new content. That streamlined 0:06:52.160 --> 0:06:56.320 the development cycle, and it brought development costs down, and 0:06:56.360 --> 0:06:59.719 now companies could continue to make money off of US 0:07:00.000 --> 0:07:03.120 Civic title. Though this approach does require that the developer 0:07:03.240 --> 0:07:07.159 put some resources into making the expansion, and you know, 0:07:07.200 --> 0:07:09.920 it's not as simple as just making more money off 0:07:09.920 --> 0:07:12.200 the same thing you sold. You have to convince people, hey, 0:07:12.320 --> 0:07:14.320 this expansion back is going to give you more of 0:07:14.360 --> 0:07:17.240 whatever it was you enjoyed of the original game. A 0:07:17.240 --> 0:07:21.480 little bit later, you also saw an approach called sharewear, 0:07:21.840 --> 0:07:26.480 which was incredibly clever. Now, typically a shareware title would 0:07:26.480 --> 0:07:29.840 give players access to a part of a game, but 0:07:29.960 --> 0:07:33.559 not the full title. So, for example, in a first 0:07:33.600 --> 0:07:37.080 person shooter game, it might include the first third of 0:07:37.120 --> 0:07:39.480 the game for free, and you could get a copy 0:07:39.560 --> 0:07:41.880 of this. Back in the old days, it was still 0:07:41.880 --> 0:07:44.440 on diskette and you could install the game on your 0:07:44.480 --> 0:07:47.240 computer and play right up to the point where the 0:07:47.840 --> 0:07:51.720 you know that sharewear part ends and upon reaching the 0:07:51.840 --> 0:07:54.880 end of the free section, you would encounter a message 0:07:54.920 --> 0:07:57.320 that would encourage you to purchase the full game, you know, 0:07:57.320 --> 0:08:00.760 maybe through mail order or whatever, and then developer would 0:08:00.760 --> 0:08:03.800 send you the full game on disc and you could 0:08:03.800 --> 0:08:06.520 play it. And a lot of games were distributed this way, 0:08:06.560 --> 0:08:11.120 like Wolfenstein three D. Brilliant approach, because what Wolfenstein three 0:08:11.240 --> 0:08:15.840 D did was it encouraged people to make copies of 0:08:15.880 --> 0:08:19.280 that shareware version and to give those copies out to 0:08:19.320 --> 0:08:22.600 their friends. You you, you know, you had players doing 0:08:22.600 --> 0:08:27.320 the marketing for the company. They were distributing this shareware 0:08:27.520 --> 0:08:31.679 version of the game, and every single shareware version ended 0:08:32.040 --> 0:08:34.640 with that message saying, hey, I hope you enjoyed this. 0:08:34.720 --> 0:08:37.120 If you want the full game, you know, here's how 0:08:37.160 --> 0:08:41.480 you can buy it. And so players were effectively doing 0:08:41.480 --> 0:08:44.240 a lot of the marketing and distributing for the company 0:08:44.360 --> 0:08:47.560 at the ground level. It was an effective way to 0:08:47.600 --> 0:08:52.040 get a game awareness out there, and several titles found 0:08:52.040 --> 0:08:55.360 success through that method. By this time, games were getting 0:08:55.400 --> 0:08:59.360 more sophisticated, and now you usually had teams working on 0:08:59.400 --> 0:09:03.680 a title with people, you know, specializing in particular skills 0:09:03.800 --> 0:09:07.960 like art or music or programming, and the costs of 0:09:08.000 --> 0:09:10.839 developing a game. We're going up because you had more 0:09:10.880 --> 0:09:15.800 folks spending more time putting together each title, but generally speaking, 0:09:16.240 --> 0:09:19.080 you still had that same revenue model where someone would 0:09:19.080 --> 0:09:21.520 purchase a title that was that that was the end 0:09:21.520 --> 0:09:24.320 of the transaction. Then we get up to the era 0:09:24.520 --> 0:09:28.640 of downloadable content or d l C. Games that have 0:09:28.800 --> 0:09:33.439 DLC allow you to augment an existing title by downloading 0:09:33.480 --> 0:09:37.480 additional content, and DLC can come in lots of different forms, 0:09:38.080 --> 0:09:42.320 some of which provide at least arguably more value than others. 0:09:42.400 --> 0:09:46.800 So you might offer up additional levels or experiences within 0:09:46.840 --> 0:09:50.440 a game as DLC, or you might give players the 0:09:50.520 --> 0:09:54.080 chance to use special items in a game, like weapons 0:09:54.200 --> 0:09:57.360 or vehicles, but only if you get the DLC. There's 0:09:57.360 --> 0:10:00.920 no way to get them through regular game same play. 0:10:01.040 --> 0:10:03.720 Or you might allow players to play through the same 0:10:03.760 --> 0:10:06.240 game but as a totally different character. So in some 0:10:06.280 --> 0:10:08.880 cases it might just be as simple as subbing one 0:10:09.000 --> 0:10:12.000 character model out for another, but in others it might 0:10:12.080 --> 0:10:16.640 involve shifting the entire storyline so it actually reflects the 0:10:16.720 --> 0:10:19.800 perspective of this other character, and it creates an all 0:10:19.880 --> 0:10:25.080 new game using the same basic mechanics. Some DLC was 0:10:25.200 --> 0:10:27.920 purely cosmetic, and it gives players a chance to make 0:10:27.960 --> 0:10:32.120 a game look different in some way, either they're player 0:10:32.240 --> 0:10:35.720 character or level design, or whatever it might be. DLC 0:10:36.080 --> 0:10:40.360 comes in all shapes, sizes, flavors, and price points. You've 0:10:40.400 --> 0:10:44.440 got some DLC that ends up being practically as expensive 0:10:44.480 --> 0:10:48.679 as a full game. You have other DLC that it's 0:10:48.720 --> 0:10:51.280 a micro transaction. You're just paying a small amount of 0:10:51.280 --> 0:10:55.360 money for some tiny element of that game. And there 0:10:55.360 --> 0:10:59.040 have been some pretty incredible examples. Occasionally you get DLC 0:10:59.280 --> 0:11:03.320 that eclipse is the popularity of the original title. But 0:11:03.440 --> 0:11:08.760 there are also examples of really really bad DLC, and 0:11:08.800 --> 0:11:11.720 they're hard to frame as anything other than a cash 0:11:11.800 --> 0:11:15.480 grab and a waste of money for the player. DLC 0:11:15.720 --> 0:11:18.840 really opened up a new revenue stream for video game 0:11:18.840 --> 0:11:23.119 developers and publishers. Now companies could continue to offer additional 0:11:23.160 --> 0:11:27.840 content and features to an existing game and charge players 0:11:27.880 --> 0:11:30.680 to access it. They could keep making money off of 0:11:30.720 --> 0:11:33.800 a title after they sold it. So rather than having 0:11:33.800 --> 0:11:36.840 a person just plunged down their fifty or sixty or 0:11:36.880 --> 0:11:40.200 today seventy bucks to purchase the title and then walk 0:11:40.240 --> 0:11:43.400 away forever, they could see that that person plunged down 0:11:43.400 --> 0:11:46.560 the cash to purchase the title, and then occasionally offer 0:11:46.640 --> 0:11:48.800 up some more cash when they saw some DLC they 0:11:48.840 --> 0:11:52.480 wanted to own, or a micro transaction that they didn't 0:11:52.520 --> 0:11:56.600 mind paying for. And that's when we get to loot crates. 0:11:57.880 --> 0:12:00.280 Loot crates. Now, if you're not familiar with loot rates 0:12:00.280 --> 0:12:04.479 and games, these are things that typically players can earn 0:12:04.520 --> 0:12:07.920 through in game activities, but it can take a lot 0:12:08.000 --> 0:12:11.600 of time for them to earn them that way, or 0:12:11.840 --> 0:12:14.839 they can earn them very quickly by purchasing them with 0:12:15.000 --> 0:12:17.840 real world money, and again this tends to be in 0:12:17.880 --> 0:12:22.360 the micro transaction range. The loot crate represents the potential 0:12:22.679 --> 0:12:26.920 to unlock something interesting in the game. It might be 0:12:27.040 --> 0:12:30.400 an outfit or some other cosmetic effect. Those are the 0:12:30.400 --> 0:12:33.360 types of loot crates that, in my experience, are generally 0:12:33.440 --> 0:12:37.360 viewed as being the least offensive, because if you don't 0:12:37.440 --> 0:12:41.600 care about aesthetics, then you don't feel pressured to engage 0:12:41.600 --> 0:12:44.880 in it. But for other players who just really like 0:12:45.559 --> 0:12:49.679 making the look of their character unique or at least unusual, 0:12:50.360 --> 0:12:54.600 then it's really appealing. Some games, however, will include items 0:12:54.600 --> 0:12:57.600 and loot crates that have an actual in game effect, 0:12:57.679 --> 0:13:01.679 like better weapons or other types of items, and that 0:13:01.760 --> 0:13:04.640 tends to rub players the wrong way. It gets into 0:13:04.679 --> 0:13:09.280 a pay to win kind of classification. Now, there's no 0:13:09.360 --> 0:13:12.760 guarantee with a loot crate that you're gonna get anything 0:13:12.840 --> 0:13:15.520 you want when you open it. It might be something 0:13:15.559 --> 0:13:17.800 that you don't want, it might be a copy of 0:13:17.840 --> 0:13:22.160 something you already have. The distribution of items is at 0:13:22.240 --> 0:13:27.120 least in theory, randomized, with rarer items having a lower 0:13:27.160 --> 0:13:30.840 percentage chance of spawning when you open the loot crate. 0:13:31.400 --> 0:13:34.080 Um Though you don't necessarily have a guarantee that this 0:13:34.160 --> 0:13:38.959 is all random anyway, but in theory it's randomized, and 0:13:39.280 --> 0:13:42.720 it is the The chances of you getting any particular 0:13:42.760 --> 0:13:46.719 item are based upon some percentage of that reflects how 0:13:46.840 --> 0:13:50.280 rare or common that item is within the game. Um. 0:13:50.320 --> 0:13:54.320 Some real world regions have classified the loot crate system 0:13:54.480 --> 0:13:57.880 as being akin to gambling, because again, you don't know 0:13:57.920 --> 0:14:00.440 what you're gonna get. There's a chance you'll get something 0:14:00.840 --> 0:14:03.280 really rare in the game, there's a chance you'll get 0:14:03.360 --> 0:14:07.080 something incredibly common, and thus these regions have kind of 0:14:07.080 --> 0:14:10.040 cracked down on the practice of loot crates. And there's 0:14:10.080 --> 0:14:13.880 definitely something to be said for that psychological payoff that 0:14:13.960 --> 0:14:15.720 you get when you open a loot crate and you 0:14:15.760 --> 0:14:19.360 get something neat inside it that does tend to encourage 0:14:19.400 --> 0:14:22.880 people to make more purchases, and that obviously can get 0:14:22.920 --> 0:14:26.320 really harmful if left unchecked. It can feed into sort 0:14:26.360 --> 0:14:31.240 of an addictive cycle. Then we get to the free 0:14:31.280 --> 0:14:34.600 to play model. With free to play games, players get 0:14:34.640 --> 0:14:37.680 access to the base game for free, as the name implies, 0:14:38.240 --> 0:14:40.880 but then the game typically offers lots of ways that 0:14:40.960 --> 0:14:46.560 players can enhance their experience through making purchases somewhere inside 0:14:46.600 --> 0:14:50.760 the game that can include unlocking new content. So maybe 0:14:50.760 --> 0:14:53.480 there's certain parts of the game that are inaccessible unless 0:14:53.560 --> 0:14:56.600 you pay for them. Uh. It might remove level caps 0:14:56.760 --> 0:14:59.800 so that you know you no longer are stuck at 0:15:00.240 --> 0:15:03.600 maxing out at a lower level. Uh. It might give 0:15:03.640 --> 0:15:08.120 you access to special equipment or cosmetic items. And there 0:15:08.120 --> 0:15:11.480 are games that do this really well, like games like Fortnite. 0:15:11.800 --> 0:15:15.640 The Battle Royal mode, which is arguably more famous than 0:15:15.680 --> 0:15:19.120 the original version of Fortnite, is free to play, and 0:15:19.240 --> 0:15:23.920 players can purchase stuff like character skins and emotes and 0:15:24.040 --> 0:15:27.080 dances and that kind of stuff. So all those viral 0:15:27.280 --> 0:15:30.680 memes you see of like Fortnite dances, Well, those represent 0:15:30.800 --> 0:15:34.360 streams of revenue, because if you're playing the game and 0:15:34.440 --> 0:15:36.360 you want to feel like you're part of the cool club, 0:15:36.680 --> 0:15:38.840 you're gonna need to shell out some cash so that 0:15:38.880 --> 0:15:41.920 you're not just stuck with the default options that come 0:15:42.160 --> 0:15:45.880 standard with the game. All Right, we've laid up the basics. 0:15:46.560 --> 0:15:49.120 I'm gonna go into more detail, but before I do that, 0:15:49.320 --> 0:15:59.960 let's take a quick break. Okay, So free to play 0:16:00.080 --> 0:16:03.600 games are free to play, as the name implies. Sure, 0:16:04.280 --> 0:16:07.240 but unlike a Triple A title that's a one and 0:16:07.320 --> 0:16:10.840 done from a transaction point of view, these games typically 0:16:11.040 --> 0:16:14.320 have hundreds of different ways that people might spend money 0:16:14.320 --> 0:16:17.240 on it over time, and they tend to be titles 0:16:17.280 --> 0:16:21.800 that get long term support. They encourage players to stick 0:16:22.080 --> 0:16:26.400 with playing that game indefinitely. So with the traditional Triple 0:16:26.440 --> 0:16:28.840 A title, you would make a purchase, you would play 0:16:28.840 --> 0:16:31.120 through the game, maybe you'd play through it a couple 0:16:31.160 --> 0:16:33.640 of times, but then you would move on. You wouldn't 0:16:33.680 --> 0:16:36.880 just keep playing that same game over and over because 0:16:36.880 --> 0:16:40.200 there's a limited amount of content and entertainment value there 0:16:40.800 --> 0:16:44.800 and eventually you would exhaust it. Um. For a lot 0:16:44.840 --> 0:16:47.560 of the traditional Triple a titles. I mean, now, a 0:16:47.600 --> 0:16:49.920 lot of these free to play titles aim to keep 0:16:49.960 --> 0:16:55.200 players active on them for years if possible. So what 0:16:55.400 --> 0:16:57.840 stuff like DLC and Luke Crates and free to play 0:16:57.880 --> 0:17:01.760 really did in the industry is start to shift the 0:17:01.960 --> 0:17:06.880 thinking and the perception around what games mean from the 0:17:07.000 --> 0:17:10.880 industry side. From the business side. Producers began to look 0:17:10.880 --> 0:17:14.240 at video games in terms of how much entertainment players 0:17:14.240 --> 0:17:18.399 were getting per dollar spent, like what's the what's the 0:17:18.520 --> 0:17:21.960 value of entertainment of a game? And then they compared 0:17:22.000 --> 0:17:26.680 that to other forms of entertainment like movies, and that 0:17:26.760 --> 0:17:30.560 I think is kind of apples to oranges. It's not 0:17:30.640 --> 0:17:33.760 a real fair comparison, but it is something that's happened. 0:17:33.880 --> 0:17:37.560 Alana appears in her video that I mentioned earlier, the 0:17:37.600 --> 0:17:41.800 one about let's talk about Ubisoft going to free play. 0:17:42.080 --> 0:17:48.120 She points out a piece that was done at Activision 0:17:48.480 --> 0:17:53.720 that really shed light on this line of thinking. Let's 0:17:53.720 --> 0:17:57.280 take a movie as an example. So if we go 0:17:57.359 --> 0:18:00.480 by Statista, the average price for a movie ticket in 0:18:00.480 --> 0:18:03.720 the United States is nine dollars and sixteen cents, or 0:18:03.720 --> 0:18:06.520 at least that's what it was in which is news 0:18:06.520 --> 0:18:09.840 to me because here in Atlanta, it's much higher than that. 0:18:09.920 --> 0:18:13.080 The average price seems to be closer to around fifteen dollars. 0:18:13.880 --> 0:18:16.400 In fact, I actually did a quick check before this 0:18:16.440 --> 0:18:20.240 podcast and found a ticket to Mortal Kombat, which would 0:18:20.280 --> 0:18:23.399 set me back fourteen dollars thirty four cents plus it 0:18:23.440 --> 0:18:26.439 would steal a hundred ten minutes of my life away 0:18:26.840 --> 0:18:31.240 and I would never get those back. Mm hmm. I've 0:18:31.240 --> 0:18:33.600 seen Mortal Kombat. It wouldn't have been worth the fourteen 0:18:33.600 --> 0:18:37.240 dollars and thirty four cents. So one minutes, that's a 0:18:37.280 --> 0:18:41.119 smidge under two hours. So you're looking at roughly seven 0:18:41.160 --> 0:18:44.439 dollars per hour of entertainment value if you're taking that 0:18:44.480 --> 0:18:49.359 perspective that you're paying seven bucks per hour for your entertainment. 0:18:49.720 --> 0:18:51.960 But now let's take a look at a triple A 0:18:52.080 --> 0:18:55.280 title video game, and since Ubisoft is the company that 0:18:55.280 --> 0:18:57.840 got us talking about this in the first place, let's 0:18:57.920 --> 0:19:00.359 use one of their recent titles with a ses sence, 0:19:00.359 --> 0:19:05.680 Creed Valhalla. That game cost fifty nine cents or sixty 0:19:05.680 --> 0:19:09.440 bucks when it first came out. According to PC Games 0:19:09.480 --> 0:19:13.840 to the nth Power, the expected play through time for 0:19:14.080 --> 0:19:17.760 Assassin's Creed Valhalla is somewhere in the neighborhood of sixty 0:19:18.000 --> 0:19:22.159 to nine hours. So when you average that out, it 0:19:22.200 --> 0:19:25.320 comes down to somewhere between sixty seven cents to a 0:19:25.440 --> 0:19:30.120 dollar per hour of entertainment. So, if you're looking at 0:19:30.160 --> 0:19:34.560 this as a quantity of entertainment per unit of currency perspective, 0:19:35.280 --> 0:19:38.879 movies are way more expensive per hour than triple A 0:19:39.000 --> 0:19:44.040 title games for the consumer. On the flip side, movies 0:19:44.520 --> 0:19:49.600 net studios way more money per hour of entertainment than 0:19:49.840 --> 0:19:52.600 video games. So if you're looking at it as a 0:19:52.640 --> 0:19:56.920 company that makes video games, you're left with the question of, well, 0:19:56.960 --> 0:20:00.000 how can we get more money per hour of entertainment. 0:20:00.119 --> 0:20:04.160 We're giving away hours of entertainment here. We should really 0:20:04.200 --> 0:20:07.719 rethink how we're going about generating revenue for games. We 0:20:07.800 --> 0:20:10.320 can't leave money on the table. We need to figure 0:20:10.320 --> 0:20:15.959 out a way to optimize the monetization of entertainment. Well, 0:20:16.280 --> 0:20:19.520 the free to play represents a way to get more 0:20:19.600 --> 0:20:23.160 money per player over the long run. Now, some players 0:20:23.240 --> 0:20:26.280 might never spend a dime on our free to play game, 0:20:26.640 --> 0:20:30.160 but others will end up spending way more money than 0:20:30.200 --> 0:20:32.399 they would if they were just purchasing a triple A 0:20:32.480 --> 0:20:36.840 title outright. Someone who might have balked it dropping seventy 0:20:36.840 --> 0:20:40.240 bucks on a game all at once, could, over the 0:20:40.280 --> 0:20:42.920 course of their time playing a free to play game, 0:20:43.400 --> 0:20:46.320 spend twice as much as that or more. Once it's 0:20:46.359 --> 0:20:49.400 all said and done. It's just all of these transactions 0:20:49.400 --> 0:20:53.240 are on a much smaller scale, and then they add up. Plus, 0:20:53.280 --> 0:20:56.520 this approach can bring development costs way down. I mean, 0:20:56.520 --> 0:20:59.119 you still have to develop the base game. That is 0:20:59.160 --> 0:21:04.080 still a big commitment, but once that's done, any additional 0:21:04.119 --> 0:21:07.760 development can be done on top of that existing framework. Now, 0:21:07.800 --> 0:21:11.040 it might require some tweaks. So for example, if you 0:21:11.080 --> 0:21:15.160 introduce new weapons or characters in a multiplayer shooter game 0:21:15.240 --> 0:21:18.800 like Overwatch, you might have to rebalance the game if 0:21:18.800 --> 0:21:21.439 the new character proves to be too powerful or not 0:21:21.520 --> 0:21:23.919 powerful enough to go toe to toe with the characters 0:21:23.960 --> 0:21:26.840 who are already part of the roster. Now this marks 0:21:26.960 --> 0:21:30.359 a shift of games as being you know, distinct units 0:21:30.400 --> 0:21:34.720 of entertainment for purchase into becoming more of a service. 0:21:35.560 --> 0:21:39.320 There are many manifestations of games as a service. There 0:21:39.359 --> 0:21:43.440 are subscription plans. There's like the Xbox Game Pass, which 0:21:43.480 --> 0:21:46.320 for a monthly fee, gives you access to a selection 0:21:46.359 --> 0:21:49.560 of games that you can play. You know, you could 0:21:49.600 --> 0:21:52.239 argue you can play them for free, though you're not 0:21:52.280 --> 0:21:55.600 really playing for free because you've got the subscription fee. 0:21:56.280 --> 0:22:00.240 Then you have persistent online worlds like World of Warcraft AFT, 0:22:00.680 --> 0:22:04.359 which you know traditionally had a subscription associated to it 0:22:04.880 --> 0:22:08.240 or with it rather or g t a online which 0:22:08.280 --> 0:22:12.040 has lots of different versions of micro transactions to get 0:22:12.080 --> 0:22:15.159 access to various types of content in the online world. 0:22:15.840 --> 0:22:18.640 And there are free to play games that have additional 0:22:18.680 --> 0:22:21.119 content available for purchase, and all of these are different 0:22:21.200 --> 0:22:24.480 variations of the same basic idea creating a game that 0:22:24.560 --> 0:22:28.440 allows publishers to continue to make money on an ongoing basis, 0:22:29.040 --> 0:22:32.119 rather than have a game launch and then sell x 0:22:32.240 --> 0:22:34.680 number of units of that game and then that game 0:22:34.760 --> 0:22:36.920 fades from consciousness, so you have to do it all 0:22:36.920 --> 0:22:40.439 over again with a new title. And this coincides with 0:22:40.480 --> 0:22:44.760 more players purchasing fewer titles but spending more time in 0:22:44.880 --> 0:22:49.520 individual games. So it's not that people aren't playing games 0:22:49.560 --> 0:22:51.840 as much as they used to, it's rather that they're 0:22:51.880 --> 0:22:55.760 spending way more time playing specific games. So in some 0:22:55.840 --> 0:23:00.200 cases this goes along with branding. So for example, there 0:23:00.200 --> 0:23:03.399 are twitch streamers that I watch who are best known 0:23:03.720 --> 0:23:07.399 for playing one or two specific titles. Uh Meg Turney 0:23:07.600 --> 0:23:11.040 is a dead by daylight fiend and she scares me 0:23:11.960 --> 0:23:15.639 in some is a phasma phobia expert who can practically 0:23:15.720 --> 0:23:17.919 run through the toughest levels of that game with his 0:23:18.040 --> 0:23:21.600 eyes closed and still win. Joe Woudle is best known 0:23:21.680 --> 0:23:25.320 for his content around Seven Days to Die and Sure 0:23:25.600 --> 0:23:29.480 for streamers, their brand often gets tied to specific titles, 0:23:29.640 --> 0:23:34.119 and that's a little different. But apparently even for non streamers, 0:23:34.119 --> 0:23:36.919 the trend is that folks are buying fewer titles but 0:23:37.040 --> 0:23:42.600 spending more time playing each title. Anecdotally, I can say 0:23:42.640 --> 0:23:45.639 that that is true for me, but anecdotal evidence isn't 0:23:45.720 --> 0:23:48.600 really evidence. But here's my version. I've been playing a 0:23:48.600 --> 0:23:51.879 few games, an awful lot, you know. I've been playing 0:23:51.880 --> 0:23:53.720 a lot of Star Doo Valley because I got to 0:23:53.760 --> 0:23:57.760 get that completionist achievement and it's I didn't go about 0:23:57.760 --> 0:24:00.560 setting up my farm super efficient at least, so it's 0:24:00.600 --> 0:24:03.639 taken me way more time than it should. I also 0:24:04.000 --> 0:24:06.560 spent a lot of time playing hit Man three, which 0:24:06.880 --> 0:24:10.879 continues to release more specific content for that game and 0:24:10.920 --> 0:24:14.960 continues to be really interesting to play. I spent a 0:24:15.000 --> 0:24:17.320 lot of time playing the game Hades, which is a 0:24:17.400 --> 0:24:24.000 roguelike game that is really exceptionally well done and infuriating, 0:24:24.200 --> 0:24:26.720 but I love it. And we see a long running 0:24:26.800 --> 0:24:31.960 trend in Triple A titles of sprawl and epic epic 0:24:32.040 --> 0:24:36.320 nous so games like the Elder Scrolls series. They have 0:24:36.440 --> 0:24:39.800 so much content in these games that it might take 0:24:39.840 --> 0:24:42.480