WEBVTT - Delphi Interactive’s Leadership on Challenging Gaming’s ‘Publisher Industrial Complex’ 0:00:07.320 --> 0:00:11.240 Welcome to another episode of Strictly Business, Variety's weekly podcasts 0:00:11.280 --> 0:00:14.720 for conversations focusing on the business side of media and entertainment. 0:00:15.040 --> 0:00:18.880 I'm Corey Erickson, media analyst for a variety intelligence platform. 0:00:19.160 --> 0:00:21.919 Delphi Interactive is a new company licensing some of the 0:00:21.960 --> 0:00:25.600 biggest franchises in entertainment and partnering them with independent gaming 0:00:25.640 --> 0:00:28.200 studios to bring those properties to life as new Triple 0:00:28.240 --> 0:00:32.160 A Video Games CEO Casper Dugarde and president Andy Kleinman 0:00:32.320 --> 0:00:34.760 joined me to discuss what they refer to as the 0:00:34.800 --> 0:00:38.560 publishing industrial complex and their plans to circumvent gaming's biggest 0:00:38.680 --> 0:00:42.199 entities to deliver new experiences for the unpredictable console and 0:00:42.280 --> 0:00:46.040 PC gaming market. Having hired former Nordis Game CEO Michael 0:00:46.080 --> 0:00:49.280 Wider as Delphi's managing partner in Europe, who joins a 0:00:49.280 --> 0:00:52.120 small staff of talent from leading publishers like Rockstar, EA 0:00:52.200 --> 0:00:55.520 and Activision, Douguarde and Climate discuss their current issues with 0:00:55.560 --> 0:00:57.800 Triple A Gaming and how they aim to follow Io 0:00:57.880 --> 0:01:01.280 Interactive's Project Double seven with more games based on some 0:01:01.360 --> 0:01:17.240 of traditional media's biggest franchises. Welcome back to Strictly Business. 0:01:17.440 --> 0:01:21.319 I'm Corey Erickson, media analyst with Wariety Intelligence Platform, and 0:01:21.360 --> 0:01:24.360 I'm joined today by the founder and CEO of Delphi 0:01:24.400 --> 0:01:27.920 Interactive and its president. Why don't you to introduce yourselves. 0:01:28.319 --> 0:01:31.080 Thanks for having his own Corey. My name is Casper 0:01:31.160 --> 0:01:34.640 Dougard and I'm the founder and CEO of Delphi. 0:01:34.680 --> 0:01:37.160 And I'm Andy Kleinman, President of Delphi. 0:01:37.560 --> 0:01:40.840 So how did Delphi get launched and how did the 0:01:40.880 --> 0:01:41.759 two of you come together? 0:01:41.959 --> 0:01:47.160 I think the impetus for forming Delphi was when I 0:01:47.319 --> 0:01:49.960 was working in Los Angeles in the film and TV 0:01:50.080 --> 0:01:56.600 space with underutilized intellectual properties training, you know, into film 0:01:56.600 --> 0:01:59.800 and TV projects, and one of the types of IP 0:02:00.120 --> 0:02:03.640 that I was most interested in was gaming IP. I'd 0:02:03.640 --> 0:02:06.840 always been a big gamer myself, and so I had 0:02:06.880 --> 0:02:10.400 a chance to meet with a lot of Triple A 0:02:10.480 --> 0:02:15.000 gaming studios and talk to them about adapting their games 0:02:15.040 --> 0:02:18.920 and their IP into film or TV projects. But I 0:02:18.960 --> 0:02:22.960 also learned a lot about the business of Triple A Games, 0:02:23.120 --> 0:02:25.799 which is sort of this mysterious business that was huge 0:02:25.840 --> 0:02:28.720 but also sort of hiding in plain sight, and I 0:02:28.720 --> 0:02:31.920 didn't know much about it, and based on everything I learned, 0:02:32.320 --> 0:02:35.680 I developed this sort of secret thesis about Triple A 0:02:35.760 --> 0:02:41.120 games that became the genesis of Delphi. And the thesis 0:02:41.240 --> 0:02:44.280 is that most people believe that if you want to 0:02:44.280 --> 0:02:46.920 make a big Triple A game, you can only do 0:02:47.000 --> 0:02:51.240 it if you involve one of the big traditional global 0:02:51.760 --> 0:02:55.440 gaming publishers like EA or Ubisoft, one of these huge corporations. 0:02:56.080 --> 0:02:59.120 But the truth is that nowadays, in the era of 0:02:59.200 --> 0:03:02.440 digital game just tribution, we believe that if you have 0:03:02.520 --> 0:03:06.840 access to a beloved global intellectual property, and you have 0:03:06.880 --> 0:03:10.799 access to capital to develop and market a game, and 0:03:10.880 --> 0:03:15.400 you have access to the best independent development talent, you 0:03:15.440 --> 0:03:18.440 can actually make a successful triple A game outside of 0:03:18.480 --> 0:03:22.280 what we now lovingly refer to as the publisher industrial 0:03:22.320 --> 0:03:27.720 complex that sort of traditionally oligopolized the Triple A space. 0:03:28.520 --> 0:03:33.120 So instead of turning games into film and TV, I 0:03:33.160 --> 0:03:35.680 had this epiphany that I wanted to do the opposite 0:03:35.920 --> 0:03:39.920 in reverse and turn the best film and TV into 0:03:39.960 --> 0:03:44.280 games and use this new thesis. So long story short, 0:03:44.600 --> 0:03:47.280 one of the studios that I met with was in 0:03:47.320 --> 0:03:53.520 my hometown of Copenhagen, where I met Io Interactive. I 0:03:53.600 --> 0:03:56.680 owe the creators of Hitman, which is one of the 0:03:56.720 --> 0:04:01.400 most beloved stealth and espionage franchises and I'd been a 0:04:01.440 --> 0:04:03.480 huge fan of Io since I was a teenager, and 0:04:03.800 --> 0:04:08.120 they had recently done this really fearless management buyout to 0:04:08.160 --> 0:04:10.880 become an independent Triple A studio, and we just really 0:04:10.960 --> 0:04:14.440 hit it off and we were philosophically aligned and that 0:04:14.520 --> 0:04:17.680 we wanted to work on something together. And so long 0:04:17.720 --> 0:04:22.000 story boring. In twenty twenty, Delphi intered into an agreement 0:04:22.040 --> 0:04:26.680 to license the rights from Dan Jack and MGM to 0:04:26.800 --> 0:04:31.640 do a Triple A PC console James Bond Double seven game, 0:04:32.240 --> 0:04:35.720 to be developed and published by Iro Interactive in association 0:04:35.800 --> 0:04:38.480 with Delphi. And that's about all we can say right 0:04:38.520 --> 0:04:41.520 now about Project Double oh seven other than what you 0:04:41.560 --> 0:04:44.040 can read in the news. It's a stealthy project. 0:04:44.360 --> 0:04:47.360 And to answer the question about how we met, Corey 0:04:48.040 --> 0:04:50.640 Casper and I met years ago in la and we 0:04:50.720 --> 0:04:54.000 became friends and we were interested in a lot of 0:04:54.000 --> 0:04:57.839 the same things, especially around entertainment and the evolution of 0:04:58.320 --> 0:05:01.640 games and entertainment, and when he started putting the Chains 0:05:01.680 --> 0:05:05.640 Bond project together, I became an advisor to the company. 0:05:06.360 --> 0:05:10.480 I've been working with license ip and games over the years, 0:05:10.600 --> 0:05:15.120 particularly at places like Scope, Lee, Disney, and Zinga, and 0:05:15.200 --> 0:05:18.839 so as Project Double seven came together. We saw a 0:05:18.960 --> 0:05:22.520 very clear opportunity to replicate the model with more games, 0:05:22.720 --> 0:05:27.080 expand the Delphi team, and that's when I became fully 0:05:27.839 --> 0:05:29.680 involved in the company. 0:05:29.720 --> 0:05:32.560 In terms of expanding the team. Who else of note 0:05:32.680 --> 0:05:34.760 has been drawn into Delphi's orbit. 0:05:35.279 --> 0:05:40.360 Well, we're you know, we've been as we've been refining 0:05:40.400 --> 0:05:43.520 and now also replicating the thesis that we developed for 0:05:43.800 --> 0:05:48.000 Project Double seven. We've you know, we've we've encountered some 0:05:48.120 --> 0:05:51.040 really great minds in the Triple A industry who've become 0:05:51.080 --> 0:05:53.680 interested in what it is that we're doing. And we're 0:05:53.680 --> 0:05:59.520 actually pretty excited to announce that Michael Weider has joined Delphi. 0:06:00.640 --> 0:06:04.720 Mikael was the founder and CEO of Nordist Games, which 0:06:04.760 --> 0:06:09.120 is one of the biggest gaming companies in Scandinavia. He 0:06:09.640 --> 0:06:12.880 essentially blit scaled Nordis Games from one employee to thirteen 0:06:13.000 --> 0:06:16.160 hundred in just a few years, and he acquired several 0:06:16.200 --> 0:06:20.599 Triple A studios, including Avalanche in Sweden and Supermassive in 0:06:20.640 --> 0:06:23.479 the UK. And he did all of that outside of 0:06:23.480 --> 0:06:25.400 the traditional publisher system. 0:06:26.040 --> 0:06:29.800 Our team is about we're about a dozen people. We 0:06:29.880 --> 0:06:33.880 believe in this idea of being very lean and hired 0:06:34.000 --> 0:06:37.080 the best people for sort of the central Delphi team, 0:06:37.760 --> 0:06:40.279 and then we worked with all these external partners. So 0:06:40.279 --> 0:06:43.920 there's about two hundred and fifty people working on Delphi 0:06:44.000 --> 0:06:49.680 games across our partners. And it's interesting, like when we 0:06:50.720 --> 0:06:53.600 started talking to people and just getting validation on the 0:06:53.600 --> 0:06:55.719 thesis and thinking about how do we scale this model, 0:06:55.960 --> 0:06:58.600 we were talking to some of the most accomplished people, 0:06:59.080 --> 0:07:01.520 talented people that we need you in Triple A games 0:07:01.560 --> 0:07:04.080 just to get their opinions, just to get advice, and 0:07:04.120 --> 0:07:08.080 we were quickly learning that those people were excited or 0:07:08.120 --> 0:07:09.880 were doing to the point that they wanted to join. 0:07:10.520 --> 0:07:13.080 And what we realized was that if you're an accomplished 0:07:13.120 --> 0:07:15.120 person in triple A games like you don't have that 0:07:15.160 --> 0:07:19.040 many options to do what you love. You either have 0:07:19.120 --> 0:07:22.880 to have a long career inside one of these big publishers, 0:07:23.480 --> 0:07:25.120 but if you want to be an entrepreneur, there's not 0:07:25.160 --> 0:07:29.640 that many options. And so Delphi became the sort of 0:07:29.640 --> 0:07:34.560 clear alternative to doing this independently. And so we've attracted 0:07:34.600 --> 0:07:37.120 some great people into this core team. You know, people 0:07:37.200 --> 0:07:40.160 that we were big fans of that came from Rockstar games, 0:07:40.200 --> 0:07:43.400 from electronic cards, from Activision, who are now part of Delphi. 0:07:44.200 --> 0:07:49.360 Let's talk more about what you consider this publishing industrial complex. 0:07:50.520 --> 0:07:55.440 What is it about triple A games that Delphi loves 0:07:55.560 --> 0:07:59.320 and where are the major publishers in gaming going wrong 0:07:59.360 --> 0:08:00.960 when it comes to triple A games today. 0:08:02.000 --> 0:08:05.360 Well, first we have to take a little bit of 0:08:05.440 --> 0:08:08.760 step back to the past twenty or thirty years of 0:08:08.760 --> 0:08:13.800 triple A gaming because they're really used to be significant 0:08:13.920 --> 0:08:16.920 barriers to entry to make a triple A game, and 0:08:16.960 --> 0:08:20.800 one of the biggest ones was physical distribution, which is 0:08:20.840 --> 0:08:23.240 the primary mode of how to get your game out 0:08:23.280 --> 0:08:27.120 to distribute to consumers. As if you wanted to make 0:08:27.160 --> 0:08:29.760 a triple A game, you needed to have this complex 0:08:29.840 --> 0:08:34.400 infrastructure to print the games on physical discs and create 0:08:34.480 --> 0:08:37.880 manuals that to be translated into different languages and localized, 0:08:37.960 --> 0:08:40.959 and had to drive the games around on trucks in 0:08:41.040 --> 0:08:45.560 different countries and employ huge sales forces, and so it 0:08:45.600 --> 0:08:49.640 required very complex and expensive infrastructure and economies of scale 0:08:50.400 --> 0:08:54.440 that only this sort of oligopoly of large corporations like 0:08:54.520 --> 0:08:59.720 EA could handle. So nowadays physical copies of games are 0:08:59.760 --> 0:09:03.640 still thing. They're important for gift giving and collectors, editions 0:09:03.679 --> 0:09:07.000 and stuff, but the vast majority of game sales are 0:09:07.040 --> 0:09:10.880 now digital. So if you've developed a game and you're 0:09:10.880 --> 0:09:12.719 ready to put it in the hands of consumers, you 0:09:12.800 --> 0:09:16.880 essentially press upload to one of the platforms where people 0:09:16.880 --> 0:09:19.439 can buy and download your game, and so that has 0:09:19.480 --> 0:09:23.320 democratized the process somewhat. That's a very important thing that's 0:09:23.400 --> 0:09:27.439 changed that's enabled a company like Delfi to come into existence. 0:09:27.960 --> 0:09:31.679 But the other super important thing about our thesis on 0:09:31.720 --> 0:09:36.319 the publisher industrial complex is that they've of course adapted 0:09:36.400 --> 0:09:41.600 to this digital era and they're operating at an unprecedented 0:09:41.920 --> 0:09:45.280 profitability and scale. But at the same time, something else 0:09:45.320 --> 0:09:48.920 has happened. And then we believe that on average, the 0:09:49.000 --> 0:09:55.200 legacy publishers have become fundamentally misaligned with the owners of 0:09:55.240 --> 0:09:59.079 the world's biggest IP, and they've also become fundamentally misaligned 0:09:59.120 --> 0:10:02.200 more and more with dependent Triple A developers. And that's 0:10:02.200 --> 0:10:06.840 where Delphi saw an opportunity, a significant opportunity to step 0:10:06.880 --> 0:10:11.320 in and offer an sort of very attractive alternative two 0:10:12.120 --> 0:10:17.120 owners of IP and to Triple A developers. Very sort 0:10:17.160 --> 0:10:22.280 of rationally, we believe the large gaming publishers have prioritized 0:10:22.320 --> 0:10:26.760 their own internal fully owned IPS over third party ipis, 0:10:27.360 --> 0:10:30.520 and some of them who even publicly acknowledged that by now, 0:10:31.120 --> 0:10:33.800 and that means that they're no longer ideal partners for 0:10:34.160 --> 0:10:37.160 the owners of the most iconic licensed I piece, and 0:10:37.240 --> 0:10:39.600 everyone is slowly starting to realize that. 0:10:40.040 --> 0:10:43.720 Do you think some folks in the gaming community might 0:10:43.800 --> 0:10:49.800 sometimes prefer that IP that's local to gaming be prioritized 0:10:49.920 --> 0:10:53.280 over major third party IP from Hollywood or elsewhere. 0:10:53.960 --> 0:10:58.280 Well, we actually have given quite a bit of thought 0:10:58.360 --> 0:11:01.560 to that as well. They this idea of licensed IP 0:11:02.720 --> 0:11:05.920 means a lot of things. You know, it can be 0:11:06.040 --> 0:11:07.760 from the world of Hollywood, it can be from the 0:11:07.760 --> 0:11:11.840 world of sports, which is huge, but it also exists 0:11:12.080 --> 0:11:17.520 across a spectrum of sort of different license experiences. One is, 0:11:18.240 --> 0:11:21.359 you know, you have integrations of licensed IP and platforms 0:11:21.400 --> 0:11:25.960 like Roadblocks or Fortnite, where the teenage mutant Ninja Turtles 0:11:25.960 --> 0:11:30.280 show up in Fortnite and things go fucking crazy. And 0:11:30.320 --> 0:11:34.160 then you have these licensed games that are sort of 0:11:34.160 --> 0:11:38.040 like merchandising tie in experiences where if you have a 0:11:39.200 --> 0:11:43.760 Star Wars or Harry Potter movie coming out, then there's 0:11:43.800 --> 0:11:47.480 also this game that's made to coincide with the release 0:11:47.520 --> 0:11:49.680 and the same thing that happens in the movie happens 0:11:49.679 --> 0:11:51.840 in the game if it's a little different. And those 0:11:52.240 --> 0:11:55.240 are not always critical hits, but historically have been sort 0:11:55.240 --> 0:12:00.800 of very commercially successful. But then there's also a third 0:12:00.880 --> 0:12:06.160 category of licensed game and that's the one that really 0:12:06.200 --> 0:12:10.840 inspires us here at Delphi, and that's a rarer type 0:12:11.320 --> 0:12:13.120 and we haven't really found a perfect term for it, 0:12:13.160 --> 0:12:18.439 but we call them asynchronous licensed franchises. And some examples 0:12:18.440 --> 0:12:22.439 of that are Knights of the Old Republic that byowhere 0:12:22.480 --> 0:12:26.199 are made, or the Batman Arkham series from rock Steady, 0:12:27.280 --> 0:12:31.360 or Marvel Spider Man from Insomniac and more recently Boulder 0:12:31.400 --> 0:12:35.760 Skate three from Larian. These weren't based on any particular 0:12:35.880 --> 0:12:39.319 movie actor, or movie or novel or anything. They were 0:12:39.360 --> 0:12:45.240 they were carefully crafted, very patiently developed franchises that were 0:12:45.360 --> 0:12:48.839 completely their own thing, and so we call those asynchronous franchises, 0:12:48.840 --> 0:12:53.320 and those are the ones that the Delphi want to 0:12:53.360 --> 0:12:56.679 make more of. And so it's also interesting to note 0:12:56.720 --> 0:13:00.200 that all of the examples I mentioned were created by 0:13:00.200 --> 0:13:02.960 Triple A studios that were at least of the time 0:13:03.760 --> 0:13:07.880 completely independent. Triple A studios like I are interactive and 0:13:07.920 --> 0:13:10.800 so as you can read in the news, project Double 0:13:10.840 --> 0:13:13.840 O seven fits this model. It's the first ever Triple 0:13:13.840 --> 0:13:17.360 A origin story of the James Bond character. It's a 0:13:17.360 --> 0:13:20.360 completely original story, and it's not based on any particular 0:13:20.440 --> 0:13:24.160 Bond film or actor. And we think fans will always 0:13:24.840 --> 0:13:26.520 love those types of experiences. 0:13:27.080 --> 0:13:31.800 Speaking to this notion of you know, high quality Triple 0:13:31.840 --> 0:13:36.920 A games license from third party ip that really resonate 0:13:37.000 --> 0:13:40.920 with the market, it wasn't just Balder's Gage three in 0:13:41.080 --> 0:13:43.240 twenty twenty three that fit those terms. It was also 0:13:43.320 --> 0:13:48.880 Howkwarts Legacy coming from Warner Brothers in their own internal studio. However, 0:13:49.080 --> 0:13:52.800 a year later, Suicide Squad Killed the Justice League comes 0:13:52.800 --> 0:13:56.600 out and sort of has the opposite outcome with you know, 0:13:56.679 --> 0:14:01.360 fans and critics alike than Hawkwarts Legacy did. And more recently, 0:14:01.679 --> 0:14:05.600 we saw Ubisoft own up to Star Wars Outlaws, missing 0:14:05.640 --> 0:14:11.199 their expectations, and now Tencent is reportedly circling Ubisoft as 0:14:11.200 --> 0:14:16.160 an acquisition target. What do you think is defining such 0:14:16.240 --> 0:14:20.320 missteps this year after we've seen other projects be it 0:14:20.440 --> 0:14:24.600 Sony Spider Man or Howkwarts Legacy or Bouder's Gate three 0:14:24.720 --> 0:14:25.720 really hit their marks. 0:14:26.280 --> 0:14:29.160 I'm very interested in two of the companies you mentioned 0:14:29.280 --> 0:14:33.680 just there. You know, everybody's talking about Ubisoft and Rumors, 0:14:33.760 --> 0:14:38.040 and you know what, I think that company maybe has 0:14:38.080 --> 0:14:43.280 some specific problems to That company employs a lot of people, 0:14:44.000 --> 0:14:48.240 The most successful IP franchises they have are starting to 0:14:48.280 --> 0:14:51.840 show their age, and there may be some other endemic 0:14:51.880 --> 0:14:54.480 problems that they're dealing with with their stock price and 0:14:54.720 --> 0:14:59.160 ownership that we just simply don't know about. So I'm 0:14:59.520 --> 0:15:05.000 cautious to derive specific conclusions about the industry based on Ubisoft. 0:15:05.920 --> 0:15:09.440 Warner Brothers super interesting. They are one of the I 0:15:09.440 --> 0:15:15.520 think only two traditional Hollywood Industrial complex members that have 0:15:15.640 --> 0:15:20.320 their own internal gaming businesses. The other Hollywood studios that 0:15:20.360 --> 0:15:24.480 had that have shut those down and transitioned to essentially 0:15:24.560 --> 0:15:29.120 risk free and very lucrative licensing businesses. So Disney licenses 0:15:29.160 --> 0:15:33.840 out there valuable IP to games developers and publishers instead 0:15:33.840 --> 0:15:36.520 of making their own. Warner Brothers is different. They have 0:15:36.560 --> 0:15:41.120 Warner Brothers Interactive Entertainment, and as you said, there is 0:15:41.760 --> 0:15:47.040 a long cadence between the games they release, and you 0:15:47.080 --> 0:15:52.920 can have a billion dollar success asynchronous success like Parkwards Legacy, 0:15:53.640 --> 0:15:57.400 and then you can have something like Suicide Squad that 0:15:58.000 --> 0:16:01.280 leads to a reported to our million or even dow 0:16:01.400 --> 0:16:05.960 right off. And I think on a reason Earnings call 0:16:06.520 --> 0:16:10.640 David Saslav, he said very wisely that given that Warner 0:16:10.680 --> 0:16:14.280 Brothers own such shockun al Ip and you know, only 0:16:14.320 --> 0:16:17.440 has as much bandwidth as they do inside of their 0:16:17.480 --> 0:16:21.240 own game studio, and given that it takes four to 0:16:21.320 --> 0:16:23.760 five years to make a triple A game, or nine 0:16:23.840 --> 0:16:26.200 years in the case of Suicide Squad, it makes so 0:16:26.280 --> 0:16:29.520 much sense for Warner Brothers Discovery to balance out that 0:16:29.640 --> 0:16:35.320 cadence and risk profile by complementing their portfolio of games 0:16:36.200 --> 0:16:40.080 with some licensed titles as well to external partners, where 0:16:40.240 --> 0:16:44.240 Warner Brothers Discovery doesn't take the financial execution risk as much, 0:16:45.560 --> 0:16:47.560 and that can solve a problem like the fact that 0:16:47.560 --> 0:16:53.080 there literally hasn't been a triple A PC console Batman 0:16:53.160 --> 0:16:58.040 game since twenty fifteen. It's almost ten years ago, and 0:16:58.120 --> 0:17:01.480 that's not right. And I think brother Discoveries is discovering 0:17:01.480 --> 0:17:02.320 the solution to that. 0:17:02.880 --> 0:17:06.120 And I think similarly to how they think about movies. Right, 0:17:06.160 --> 0:17:09.879 we've been inspired a lot by companies like Legendary Entertainment, 0:17:10.040 --> 0:17:14.080 which started back in the day producing Warner Brothers Movies 0:17:14.119 --> 0:17:18.000 and Warner Brothers ip into blockbuster films and their whole 0:17:18.000 --> 0:17:20.400 thesis was that they could you know, come in initially 0:17:20.400 --> 0:17:23.440 with financing, but their plan was to try to make 0:17:23.440 --> 0:17:27.080 these big blockbuster films outside of the legacy Hollywood studios. 0:17:27.280 --> 0:17:28.840 They were one of the first to do. Its Guidance 0:17:28.920 --> 0:17:31.680 came later and build a similar thesis which has now 0:17:32.640 --> 0:17:35.800 become really big, and another taking over a legacy studio 0:17:35.600 --> 0:17:39.280 to try to modernize it with their way of doing things. 0:17:39.320 --> 0:17:42.600 But that doesn't exist in gaming, and especially in Triple 0:17:42.640 --> 0:17:47.360 A gaming. And so that model of financing this big 0:17:47.400 --> 0:17:51.199 blockbuster Triple A games outside of the system and creating 0:17:51.200 --> 0:17:55.000 a Triple A slate of games work based on the 0:17:55.040 --> 0:17:58.720 biggest brands in the world, it's something that doesn't exist 0:17:58.720 --> 0:18:02.600 and that del Via is firing to create and be 0:18:02.720 --> 0:18:04.879 inspired by legendary and Skidance. 0:18:05.440 --> 0:18:08.920 I want to expand a bit on how you make 0:18:09.000 --> 0:18:12.280 that pitch to you know, a legacy Hollywood studio. As 0:18:12.320 --> 0:18:17.560 we know, Skydance is trying to complete an acquisition of Paramount. 0:18:17.600 --> 0:18:22.080 If that goes through, that's a third legacy major Hollywood 0:18:22.080 --> 0:18:26.000 studio that is going to have you know, a full 0:18:26.040 --> 0:18:31.040 fledged gaming division at its disposable if that completes, how 0:18:31.080 --> 0:18:34.080 do you make the pitch to an entity like Paramount 0:18:34.200 --> 0:18:36.240 or you know, the new iteration of sky Dance and 0:18:36.320 --> 0:18:39.800 Paramount that they should be you know, licensing some of 0:18:39.840 --> 0:18:43.399 the IP out as well, alongside whatever they're working on 0:18:43.480 --> 0:18:46.280 with sky Dance Interactive or Skydance New Media. 0:18:46.880 --> 0:18:51.000 Yeah, I love talking about that stuff. It's I think, 0:18:51.080 --> 0:18:54.240 first of all, bandwidth is always an issue, as we 0:18:54.280 --> 0:18:56.439 see from Warner Brothers. They have a huge studio with 0:18:56.480 --> 0:18:59.240 twenty two hundred employees, and there's still hasn't been a 0:18:59.240 --> 0:19:01.800 Batman game, and at least not for PC and console 0:19:02.200 --> 0:19:07.080 in Triple A for for nearly a decade. The other 0:19:07.160 --> 0:19:09.800 thing way we look at that problem you're describing there 0:19:10.160 --> 0:19:14.880 is that, you know, I think it's about having a proposition, 0:19:15.040 --> 0:19:19.600 an opportunity for a licensed project that's just so good 0:19:20.240 --> 0:19:23.200 that it doesn't matter what else the license or which 0:19:23.200 --> 0:19:26.480 is what we call the Hollywood studio or sports franchise 0:19:26.560 --> 0:19:29.040 or that that's giving you the license, no matter what 0:19:29.080 --> 0:19:31.800 else they're working on with the IP. And I'm not 0:19:31.840 --> 0:19:34.080 joking about that. When when Project Double O seven was 0:19:34.160 --> 0:19:38.280 unveiled a few years ago, pc Gamer described it as 0:19:38.320 --> 0:19:43.440 a match made in heaven between an IP and development talent, 0:19:44.240 --> 0:19:46.159 and so we were obviously very proud of that reaction, 0:19:46.400 --> 0:19:49.919 and since then we've tried to codify what it means 0:19:50.000 --> 0:19:53.760 and why people would say that. And so one of 0:19:53.800 --> 0:19:57.119 the Triple A developers were working with on one of 0:19:57.119 --> 0:20:00.359 our upcoming projects that has not been announced yet, he 0:20:00.440 --> 0:20:04.280 taught us this fascinating idea that if you're working on 0:20:05.080 --> 0:20:08.640 adapting and established IP, you have. 0:20:08.600 --> 0:20:10.800 To be able to. 0:20:09.960 --> 0:20:14.959 Deconstruct the sort of wishful film and fantasy of that 0:20:15.000 --> 0:20:19.600 particular IP, whether it's whether a film series or a 0:20:19.640 --> 0:20:22.080 novel or a comic book, you have to sort of 0:20:22.080 --> 0:20:25.159 deconstruct the wishful film and fantasy into its constituent parts, 0:20:25.800 --> 0:20:28.080 and then you have to be skilled enough to organically 0:20:28.800 --> 0:20:34.040 reassemble those elements in a different way, completely different way 0:20:35.000 --> 0:20:37.879 that's suitable for the Triple A interactive medium, and of 0:20:37.880 --> 0:20:40.200 course ideally in a sort of shock and all fashion 0:20:40.280 --> 0:20:44.080 that will delight the fans. This is really no easy feat. 0:20:44.240 --> 0:20:46.600 There is a real art to that kind of adaptation 0:20:47.200 --> 0:20:52.119 and it requires patients and resources and the luxury of time. 0:20:53.160 --> 0:20:55.639 And from what we've seen, when you have something like 0:20:55.680 --> 0:20:59.720 that the license source or eager to do business. 0:21:00.400 --> 0:21:02.879 So this is maybe a little bit of a tough 0:21:02.920 --> 0:21:07.880 but necessary question. Along those lines, we have live services 0:21:07.960 --> 0:21:12.399 at play that you know, at sort of the top level, 0:21:12.440 --> 0:21:16.520 whether it's Roadblocks, Fortnite, Minecraft, and then Grand Theft, Auto 0:21:16.560 --> 0:21:20.760 and Call of Duty appealing to you know, more adult gamers. 0:21:21.359 --> 0:21:24.880 Hollywood is very very friendly with a lot of these 0:21:24.920 --> 0:21:28.040 live services, Fortnite and Roadblocks in particular. As we know, 0:21:28.920 --> 0:21:34.440 Disney invested one point five billion into Epic Games, specifically 0:21:34.520 --> 0:21:40.000 for many different IP partnerships spread throughout Fortnite. Let's say 0:21:40.080 --> 0:21:44.480 Delphi knows a studio that can pull off a really 0:21:44.560 --> 0:21:48.359 high quality Alien game that's IP you would have to 0:21:48.400 --> 0:21:52.000 get from Disney. How do you convince an entity like 0:21:52.119 --> 0:21:55.040 that that a game that could theoretically take four or 0:21:55.080 --> 0:21:58.560 five years even more, if this, you know, wish fulfillment 0:21:58.640 --> 0:22:03.040 deconstruction process takes a while, how do you sell Disney 0:22:03.600 --> 0:22:07.040 on betting on the high quality Triple A game instead 0:22:07.080 --> 0:22:08.240 of a Fortnite experience. 0:22:08.800 --> 0:22:11.679 We believe that the ips that we're going after, right 0:22:11.760 --> 0:22:13.600 are some of the biggest brands in the world, right, 0:22:13.640 --> 0:22:16.920 and so when Disney or orner Brothers or any of 0:22:16.960 --> 0:22:19.040 these studios are thinking about the strategy for some of 0:22:19.080 --> 0:22:22.680 the biggest IPS. It's not just one thing that they do, right, 0:22:22.720 --> 0:22:26.800 They explore different ways to attract the different types of 0:22:26.840 --> 0:22:29.919 fans that are engaged with that IP and who love 0:22:29.960 --> 0:22:33.280 the IP. And so some of those fans are the 0:22:33.320 --> 0:22:36.400 audiences that are within roadblocks on Fortnite and who want 0:22:36.440 --> 0:22:39.400 to have those games. They're they engage with those games 0:22:39.440 --> 0:22:41.399 and they love already the experience that they have and 0:22:41.440 --> 0:22:44.480 the characters within Fortnite, and so integrating those IPS makes 0:22:44.480 --> 0:22:48.000 a lot of sense, and those are huge businesses on 0:22:48.040 --> 0:22:51.400 their own. There's also a lot of people, a lot 0:22:51.400 --> 0:22:56.040 of those fans that want single player experiences, and you know, 0:22:56.160 --> 0:22:59.880 many gamers, like us, they get overwhelmed, you know, when 0:23:00.119 --> 0:23:02.879 when they have to go into an existing game to 0:23:02.960 --> 0:23:06.520 play mode whe their favorite IP, or when a new 0:23:06.560 --> 0:23:09.000 game is coming out and it's a you know, eighty 0:23:09.040 --> 0:23:13.200 tow one hundred hour game that you know, feels intimidating. 0:23:13.880 --> 0:23:18.240 And so we think both things can coexist, not perhaps 0:23:18.240 --> 0:23:21.840 for every AP, but definitely for the things that are 0:23:21.960 --> 0:23:23.919 you know, some of the biggest brands that have a 0:23:24.040 --> 0:23:27.760 huge global fan base and that are sort of evergreen 0:23:27.840 --> 0:23:31.600 franchises that you know, they're constantly thinking about what comes next, right, 0:23:31.600 --> 0:23:35.640 and so our our philosophy in those cases is to 0:23:35.680 --> 0:23:38.399 do something different. They may already be working with Fortnite, 0:23:38.440 --> 0:23:41.679 or they may be working with other existing platforms, but 0:23:42.040 --> 0:23:47.040 we think about the single player story driven experience, and 0:23:47.160 --> 0:23:49.359 usually it starts with something that you know can be 0:23:49.440 --> 0:23:53.000 played in twelve to sixteen hours as opposed to eighty 0:23:53.040 --> 0:23:56.440 two hundred hours, and you feel a great sense of 0:23:56.480 --> 0:23:58.879 accomplishment and satisfaction when you're playing it. It's almost like 0:23:58.920 --> 0:24:01.760 you're bench watching your face or a new TV series 0:24:01.920 --> 0:24:04.760 or movie franchise that you love, or you know, the 0:24:04.800 --> 0:24:07.040 Lord of the Rings trilogy, and it has a beginning 0:24:07.040 --> 0:24:10.679 in an it's very fulfilling and and they're highly replayable, 0:24:10.760 --> 0:24:13.080 and then you know, you can have DLC content, and 0:24:13.160 --> 0:24:16.760 you can have you know, new iterations and sequels that 0:24:16.800 --> 0:24:18.800 come out after that continue that story. 0:24:19.160 --> 0:24:22.919 And so yeah, and and Corey, I think also that 0:24:23.040 --> 0:24:26.639 there is a very interesting general debate happening at the 0:24:26.680 --> 0:24:30.359 moment about live services games, which you mentioned. You know, 0:24:30.400 --> 0:24:34.639 it's it's natural that everybody wants a fortnight. There is 0:24:35.000 --> 0:24:38.520 there's an eleven or maybe even twelve figure upside to 0:24:38.600 --> 0:24:41.120 that if you can pull that out as a company, 0:24:41.800 --> 0:24:46.879 But it's also a very volatile proposition with a massive 0:24:46.920 --> 0:24:51.000 downside and massive risk. You know, as we've seen, even 0:24:51.680 --> 0:24:54.600 high quality life services games that are based on beloved 0:24:54.600 --> 0:24:58.760 ip which you believe so much in, like Avengers or 0:24:58.800 --> 0:25:02.720 Suicide Squad which we talk about earlier, can can be 0:25:02.760 --> 0:25:07.480 born as live services experiences, but can really struggle to 0:25:07.560 --> 0:25:11.600 pull away habitual users from the sort of the big 0:25:11.640 --> 0:25:14.880 five titans that you have there and the network effects 0:25:14.920 --> 0:25:18.919 they have. You know, you mentioned Roadblocks and Fortnite or 0:25:19.000 --> 0:25:23.879 Minecraft or GTA Online or or or even FIFA, and 0:25:23.960 --> 0:25:28.280 it's a it's very hard to take consumption time away 0:25:28.320 --> 0:25:32.920 from those grain franchises and and and uh and inject 0:25:32.920 --> 0:25:36.879