The current reality of a disrupted industry - Henrique Olifiers DevGAMM Interview

Audio transcription

"Alright, I'm here in Gdańsk with Henrique catching up, this is DevGAMM day 2 and you know last time we met was in Barcelona for Gamelab, I think it was 2018 if I'm correct Yes, 2018 And back in the day we were talking about user-generated content, MMOs, Worlds Adrift and all the things, but in all that time the industry has changed a lot, it's been transformed as we speak And that was the main topic of your panel, you know the new disruption we're going to witness within the games industry, so couldn't attend, sorry about that, which would be like the main takeaway that you shared with the audience?
It was an extensive discussion, but I think that the biggest topic is that there is this sense right now that 2023 was very hard, 24 was very hard, but if you survive 24, 25 is going to be better, now you're talking if you survive 25, 26 is going to be better, that is nonsense The industry is going through definitive transformations that there's no idea of going back to what it was before The games industry in two years time will be completely different from the games industry of two years ago, and you have to adapt to that new reality And also understand that the reason why this is happening, like people are saying that oh it has to do with the pandemic, that everybody was super excited that it was over-investment, now there's no investment That's not the reason, it has nothing to do with it, the reason why we are experiencing this transformation right now has to do with everything the publishers who are one of the main channels of funding to the games industry are being profoundly transformed And how that transformation is taking place, and while it's taking place they are not making bets, and therefore there is no money coming to the developers for production, production is drying up, budgets are sub 1 million, games are very small, they're making very few bets, they want vertical slices, no concepts, no demos, they want fully fledged game mechanics Which has to be funded as well, somehow So there is a host of dynamics and elements that are affecting game publishers deeply, that will force them to transform into a different thing, and while that is happening we are suffering this turmoil That is resulting in layoffs, is resulting in projects being cancelled, budgets being reduced, requirements for signing going up, and things taking longer to do It has to do with the industry going through a transformation that's going to be definitive, and at the end of it, it will look very different from what it is today Ok, so from what I understand, this all has to do with publishing ways, publishing methods, because I've seen some new ideas in the publishing field, so do you think we are going to see more and more publishers or studio helpers that will try and approach the market in a different way for this to be sustainable?
Yeah, I think that the trend is that publishers will become more funding of the games, rather than co-developing the game with the developers, because publishers traditionally have a lot of roles to play They do help with QA, localization, price selling, they do business development with the platform holders, they secure exposure, marketing, PR, a host of things All these things are going back to the developers, and the publishers are going to break down and become smaller in terms of teams, and more like investors, in-game ideas, in-game teams, rather than a partner that from day one builds something together with the developers Because of that, they will want to come much later in the progress of a game, when a game is already showing promise, traction, so you have to set up a page on Steam, so you have these wish lists that you show to the publisher, you have to have vertical slices, you have to have followers, you have momentum for the publishers to come and amplify it, rather than build that appeal from scratch with you But then, I guess, we will see the appearance, the growth of liaisons that can act as those roles that publishers are no longer going to fill Yes, some of it will go into the developers, some of it will be taken over by AI, some of it will go into agencies A good example of agencies right now is PR agencies They are much more accessible in terms of cost, they are much more professional than you had in the past So it's in the interest of the developer to engage with one of them that will tell you the story of the company and of the game at the same time Whereas in the past, the publisher would do that only on behalf of the game itself So this is an example Another example is translation localization This is much more heavily handled now by AI And it's only going to get better I mean, AIs are going to be more capable of doing this to the point that I'm pretty sure there will be no man-in-the-loop localizing things anymore Right now, there is You can do it with AI, but you have a final pass adjustment, etc In the end, it's going to be all automated It has to be, because that's where it's trending It's very hard for you to resist that There are too many forces going in that direction But overall, all of that falls under the responsibility of the developer now, going forward When the developer has to come to the publisher with a game already with wish lists It means that it has done a lot in terms of marketing, testing, and reaching out, and so on Where do those capabilities come from?
Either from inside the developer itself, or from agencies and people that they hire, the developers hire Yeah Not the publisher Yeah It's a very different power dynamic in the industry, a very different kind of pieces on the board Okay, interesting to see how it pans out in the future Let's talk past When we met, we were talking about Worlds Adrift Oh, that was a big one, yes Yeah, and then you were telling me how user-generated content would be a big thing So it was, of course, true And it was part of your MMO back then, right?
How do you feel looking back at that experience, and what you learned from user-generated content And what it's become in the past few years?
Well, it's undeniable that user-generated content is huge It's always been, but not everybody realized For instance, Counter-Strike was a mod of Half-Life That's user-generated content, right?
Dota was a mod of Warcraft 3 That's user-generated content that became a product What didn't happen back then is that the people creating user-generated content They didn't have a road to market Counter-Strike had to become a product in its own right League of Legends, which ran for Dota Had to become a project, both of them, in their own right DayZ had to become a project in their own right They could not monetize as mods Fast forward today, you have UEFN People generating millions in revenue with mods inside of Fortnite You have Roblox, one of the biggest forces in the industry right now Minecraft as well But in Roblox, you monetize And you have exceptional companies like Overwolf Who are enabling mods to be monetized, etc."

"With all sorts of games So this is here to stay The creator economy is here to stay in that regard And I'm very thankful that it is so Okay, and if we go farther down the line Farther into the past We can talk about journalism Oh yes! This is something I appreciate when, you know When an interview is bringing it up When we're talking about layoffs and how the industry is Enduring this tough transformation With lots of layoffs Some of them would say We're also worried about media, about you guys So you started, same as me Like doing journalism Doing paper magazines back in the day So how do you feel about that now?
Because of course, you know Trends, service, live service apps Social media There are many things trying to catch our eye And it's more All the more and more difficult to create traditional stories And for people to even read them So being a journalist yourself, back in the day How do you feel about that?
Well, the numbers today are the numbers today 5% of the players resort to what we call traditional media Or legacy, right?
Legacy And by legacy I mean printed But also websites and portals Specializing in games The format The format So around 5% of the players are resorting to them To find out what is it they're going to play next Where in the past it was almost 100% Yes, yes Right There's also a problem with the business model of these outlets In general, no matter what they talk about Yes There's an advertisement that is going down There is a compression from influencers taking over Right?
The influencer today in the games industry Is the major driver of discoverability Particularly because the platforms are being overwhelmed By the amount of content And they haven't yet figured out how to surface this content In a very one-to-one way Some people are doing great strides like Steam Some people are lagging behind like the consoles Right?
It doesn't matter There's a lot of forces in the media Like they are understaffed They are underpaid They are driven by analytics rather than editorial content So it's a perfect storm for them to go through a lot of pain You kind of cope that with the fact that Studios are going through rough times Layoffs and project cancellation Etc There is a lot of friction going on there And I am the one that's caught in the middle as well Pointing out this shouldn't be happening Why don't we do it like that?
And there's a lot of animosity around it as well So I don't see a way out on this spiral I do see what's going to happen with games Is that it's going to fragment There's going to be smaller teams Smaller projects A lot more content coming up And the media The only way the media can serve that Is by being more fragmented More influencer driven More people talking about Niches Niches and so on So this monolithic thing that reveals Talks about 20 games a month perhaps Focus on the niche and try to Yeah that is a very hard proposition For the future ahead of us I think I hope I'm wrong I hope you're wrong too But as well I think it's also bad for Games culture in general You know as in back in the day You would be interested in learning How things are done What developers have to say But you see less and less media Going to events Even to big events Gamescom or whatever They really are not interested Because it doesn't drive traffic back to them Yeah I have a personal opinion on that Let's take for instance a quick Random example Let's focus about two hypothetical magazines Okay One that is covered A film Say Indiana Jones Okay How it was built How it was made What's the story What's the set The scenery etc The other one covers The life of Harrison Ford Who he's dating Where he's going out to eat Right Of these two magazines This is the one that's going to sell the most It's the most popular It has the most popular appeal Everybody wants to gossip And learn what is the Hollywood style It's more ephemeral Yes If you are advertising Services like a camera ARRI Camera for cinema Right Or a sound engineer Which one of the two Are you going to advertise on For the pro people They are small But they know They're readers Yes In the games industry These people They are going on Patreon They have a lot of niches there They talk about how games are made They make videos etc It's super niche Small communities But it's driven by one or two people Who can make a living out of that And actually thrive These ones who are chasing analytics And clicks And mass media etc In short term as well Yeah They find themselves on problems Because there is no conversion Yeah When you advertise On those websites etc Nobody buys games there They might have the traffic But they don't drive conversion Yeah So this is again Kind of And it's not a guilt of the media Right It's a problem of us It's like we chase the shiny thing And all of a sudden We make a mistake and so on We ourselves read less And see a lot of headlines And scroll down Yes So it's all kind of Quite a hellscape Yeah We'll see about that It's interesting Okay We've talked future We've talked past Now let's talk present Right So Bossa Games Yes And TinyBuild Yes So Bossa Games What are you guys doing?
What can you tell me You're into right now?
Yeah Well We have a big game On Steam Next Fest actually Okay And we are launching In a while It is a co-op survival Multiplayer game Alright The whole world is made Everything before is launched So it's all UGC based And it's doing super well It's on the top 10 On Steam Next Fest So we hope We're going to have A good launch The name is?
Lost Skies Okay Lost Skies You check it out Thank you Alright And the other thing Is TinyBuild I talked with Alex Oh yes Back in the In the DevGam In Lisbon In November And I learned much more About TinyBuild I knew that you guys Were successful But I didn't know What is your position As a chairman What can you tell me About TinyBuild Oh And what's sort of The purpose The sort of The mindset Well TinyBuild is a force To be reckoned with Right Some of the biggest IPs in games Like Hello Neighbor And Streets of Rogue Etc Were kind of Cushioned And flourished Inside TinyBuild And I hope that The company carries On doing that It has some Exceptional games In development That have Massive Number of eyeballs Like Kingmakers Streets of Rogue 2 Is coming up Yep There's a lot of other games In the making Like Sand And so on So It is a very different thing From Bossa Who focus on One or two games At a time Yeah Right We have like Two dozen games In production And it's Very kind of Big mass Of moving parts And how you Make sure that they Are all well oiled And have the best Even us Right We are immersed In this market There's a lot of games To be played Yes Not that much time Saturation Exactly So we have to find New ways to connect With audiences To put the games Out there And that's One of the main Things that TinyBuild Do is that They try to understand The dynamics of these Platforms We are changing All the time Things that worked Last year Don't work this year So you have to be Super attuned To find the right way For them to have The best chances of success And then Hope it happens A lot of prediction Goes into that Alright Very interesting We Sort of Went through the Whole timeline Okay That was fun So thank you so much For your time Enrique My pleasure Yeah It's not Six years Or more Until we meet again Yeah Sounds like a good wish Thank you Thank you"