Fortnite, GTA VI, and the fate of AAA games

In episode three of our video game miniseries, The Verge's David Pierce and Polygon's Russ Frushtick and Chris Plante discuss the state of the industry's blockbuster games like Grand Theft Auto, Call of Duty, Overwatch, Fortnite, and others — and what they signal for the future of gaming. Email us at [email protected] or call us at 866-VERGE11, we love hearing from you. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest, or rush the field the fastest. Winner gets an ultra. Because it's not just a superior-like beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 0:32David Pierce?

  Welcome to The Vergecast, the flagship podcast of DLCs. I'm your friend David Pierce, and this is the third and final episode in our mini-series about the future of gaming. We've talked about handheld gaming, and why consoles like the Switch and the Steam Deck might just be the future of everything. We've talked about how to emulate and preserve old games, and why that matters in a really important way. And today, we're going to talk about big games, the biggest games. Games like Fortnite, and Call of Duty, and Roblox, and Madden, and Assassin's Creed. The kinds of games that even people who don't care about games know about. These games are so culturally important and economically outrageous, that it often feels like, as those games go, so goes the whole gaming industry.

• 1:17David Pierce?

  But those games are changing. The way that they get made is changing, the way that they get sold is changing. Everything about them is changing. So we're going to try to figure out today, what happens to the biggest games, and what it means for all the rest of the games, and for us who play them. My colleagues from Polygon, Chris Plant and Russ Frushtick are back with me. The way this is going to work is, we're going to talk it out a little bit, and then I'm going to go do some research, talk to some people, and then present them with what I've discovered, and see if I've learned anything at all. Also, before we get into it, I just want to say, we've had this crazy run of mini-series over the last few months. I know it's been a lot of Vergecast, and I'm so grateful to all of you who have listened to all these episodes, and gone with me and us on these weird adventures into AI, and connectivity, and gaming.

• 2:01David Pierce?

  We've had a ton of fun making these episodes. I know it's been a lot. The Vergecast feed is going to go mostly back to normal now. But seriously, thank you to everyone who has sent nice emails, who has called in with thoughts on the hotline. We're very grateful. It's been incredibly fun. With that, let's just get into it. Russ and Chris are here. Here we go.

• 2:21David Pierce?

  Chris Plant, welcome back. Hey, thank you. Russ Frushtick, welcome back.

• 2:24Speaker 02

  Thank you, thank you.

• 2:25David Pierce?

  This is the third of our three episodes. It's been very fun so far. I have learned an enormous amount about the gaming world that I did not know already. And for this episode, we've kind of noodled around like the edges of what is coming for gaming in the last two episodes. But this time, we're going to talk about like the biggest games and game makers on planet Earth. Because we've gone through this huge transition in so much of entertainment, whether it's the way that we consume music, or the way that we consume TV, and how Netflix changed the whole business of how television and movies get made and all this stuff. And what you guys have told me sort of in the planning process for this is that gaming is in the middle, or at the beginning of a similar transition.

• 3:09David Pierce?

  That the way we think about what games are, and how we buy them, and the biggest names of all of them is set to shift and shift fairly quickly. Russ, you're nodding. Is that a fair way of thinking about it?

• 3:20Speaker 02

  Yeah, absolutely. We're already seeing it. The rise of the subscription model for game quote ownership with the rise of something like Game Pass means that you can pay your $15 a month, whatever it is, for a ton of games, and you don't actually end up buying any physical games. You end up just like kind of renting them in a way through these services. And this has already been a huge priority for companies like Microsoft, and you're going to see it continue to increase over time.

• 3:52David Pierce?

  I'm just sort of trying to think this through. I think one of the things that's happened in Hollywood is basically the whole middle fell out, right? You can either make a giant, like Avengers-style blockbuster, or you can make a relatively small-budget thing, or you can make a TV show, right? Like, we figured out how to do sort of prestige TV, but if you are in the business of making like event movies, which I would say is probably the closest thing to a AAA game in that space.

• 4:16Speaker 02

  Yeah, sure, like a Marvel, big Marvel movie.

• 4:19David Pierce?

  Yeah, it's not a perfect analogy, but it's close enough. There is nothing in the middle anymore. You either have to spend very little and hope, or spend a gigantic amount of money on super safe IP, and that's all that's left. Is that where we're headed in video games, too?

• 4:32Speaker 03

  Kind of, though, with maybe an adjustment to like the framing of the middle. There's a lot of middle now. We just don't watch it. There's like so much middle. There's, you know, Netflix has a gajillion middle productions, and they come out every week and they don't even market them. And they, they're not particularly good. And it used to be that you like would go to a movie theater and people had to put effort into the middle. And now the middle is just like filler.

• 5:00David Pierce?

  You could like make a cultural moment out of the middle in the past, and I think that is long gone in Hollywood.

• 5:06Speaker 03

  Yes.

• 5:06Speaker 02

  On the gaming side, the middle used to be the like 10 to 20 million dollar game that took, let's say, three years to make and came out and did pretty well. And Activision would put out a bunch of those. EA would put out a bunch of those. And what you're seeing is these big studios, because of the rising expenses of game making at that level, yeah, they are unwilling to do those smaller investments because they're really sinking hundreds of millions of dollars into the big franchises, the Diablo's of the world, the GTA's of the world. And they just can't afford to focus on those small potential wins because the losses can be huge even for those like mid-range titles. So what you're seeing is, yeah, the triple A,

• 5:49Speaker 02

  and that's paired with the like indie world, which can obviously be very low budget, up to, let's say, two and three million dollar games, which honestly, these days is small in the way that like an indie movie at two and three million dollars is small.

• 6:03David Pierce?

  But then, at the same time, it also seems like some of these companies that make these huge triple A games are making fewer of them. Like, I feel like, and I can't prove this, maybe you guys would definitely know better than I would, but I feel like the, the number of like big name games that I've never heard of goes down every year. That it's, it's all games that I've been hearing about forever. It's all Assassin's Creed. Like EA just keeps running back the same six sports games it does every year. There's like a, there's a something three and a something four and a something 11 that comes out every year, but I don't feel like there are that many truly new things coming out of these giant studios anymore. Is that true?

• 6:41Speaker 03

  Yeah, I, I think that this, and to connect us to the middle, this happened actually before streaming and this is the, what the Call of Duty Mass Effect Madden era did to AAA is, you know, when Fresh and I were starting in covering video games, it wasn't unusual for Ubisoft to try a few different random things. You know, they had, there was a time where you had a new driver game and it played like Google Maps meets racing or a new Shaun White skateboarding game where you could create rails out of like green goo. And they're just like, yeah, let's, let's put a mid-budget game and try it and see where it goes, along

• 7:22Speaker 03

  with all the licensed games. When Call of Duty blew up, Activision, it felt like, had to basically shift all of its resources behind this big bet. And they had that with Guitar Hero and they had that with Tony Hawk all around kind of the same time. And as a result, everything else just, there just weren't enough warm bodies to make the other stuff. That's at least how it felt, you know, if they wanted to get annual releases. So they kind of created their bed and now they're having to sleep in it? Is that, is that the metaphor? Is that the phrase?

• 7:54David Pierce?

  I think so, yeah.

• 7:55Speaker 03

  They are now having to stick to these things because they're making enough money that they can't stop doing it. But not so much that they can like go and focus elsewhere. The other pickle that they have is now with streaming and with some of these indie developers becoming indie publishers and being able to like create more of these mid-budget games is the general quality of video games right now is just very high. So their fear is, we have two games out of the year, we really need them to hit because they're going to be competing against hundreds and once they do hit, we need to lock people in. And that has just created this like bad bet after bad bet. They're, they're making things harder and harder and harder for themselves.

• 8:39Speaker 03

  Other than looking at the industry and saying, hey, why don't we just do the thing that we're running from? We actually are quite powerful. Why are we not putting out 20 or 30 games a year? Why Devolver, the indie publisher, is out there and just wasn't acquired at any point? Is confusing, to say the least.

• 8:57David Pierce?

  Interesting. Okay. Is there a new generation of these like upstart companies trying to do that? Like normally, the way you would think it would work, right? Is these these big companies get settled into their sort of small handful of franchises like you're describing? And then out of that comes a bunch of new companies saying, we have new ideas. We can build games faster. We have new ways of doing it. We don't have all this tech debt. We don't have massive companies we have to support. We can build the next thing. Is that happening?

• 9:23Speaker 02

  Yeah, I think it's happening. You know, Plant mentioned Devolver, which is one of the biggest indie studios, publishing studios in there. And I think all of that work that they have is really talent acquisition. They go out, they see, oh, here's this small indie developer that's basically been doing it solo or with a team of three people or whatever. We're going to give them that $2 and $3 million budget and we like what they're doing. So we're going to elevate that and it becomes a decent sized hit. Like a Death Store, for example, was an indie game that came out last year and did pretty well. So they are kind of curating that stuff. But because of the nature of the expense of larger game publishers having to make these big games,

• 10:08Speaker 02

  they can't do that. Like EA can't be doing that. So they are focused instead on the battlefields of the world and their big franchises. So there is this this divide in terms of creating new ideas. And almost all of them are coming from the indie side.

• 10:22Speaker 03

  You also mentioned the tech debt of it all. In the past, being a big publisher benefited from the fact that you had an internal engine. Like EA had the Crossbite engine, or I think Ubisoft had Anvil was one they used for a while, I believe. Or I don't know. One, those engines just are often more frustrating than Unreal or Unity or any of the indie engines. So you have that, like so much for it being, you know, like losing tech debt. You're actually frustrated, you know, you're bringing in people who have to learn your new thing. And then two, you're competing with people who have access to. Unreal and are perfectly fine using it. And when they go out and hire people to work on it, people already know how to use those engines.

• 11:06Speaker 03

  So it's all kind of inverted. It's actually just easier for these, these smaller to mid-sized developers to work because they're not married to all these kind of massive corporate decisions that sound like they're money savers on paper, but are not actually beneficial to the people making the games.

• 11:25David Pierce?

  Okay. Yeah. Later in this episode, we're going to do a bunch of 2024 predictions about kind of where all this is going because it does seem like there are a bunch of things in other industries you can look at to see how this might change. But also gaming, we've learned is different in a lot of ways. And I think we're, we're going to talk to some smart people, but also just spend some time, the three of us, trying to figure out where all this is going. But before I run off and chase down some smart people about where we're going, Chris, I want you to tell me why you wrote GTA 6 in our Google Doc in large letters.

• 11:55Speaker 03

  Yes. So this is the big question. This is the, the huge question I have for you. Is GTA 6 going to be the last mega game? And I'm not talking about even AAA. I'm talking about quadruple A. I, I, we get, you know, one of these a year, maybe sort of games. And yet the big publishers can't help themselves from continuing to chase these dreams. And I wonder if GTA 6, we will see a change after that. If we've raised the cost of making games so high and the risk so high that people have learned their lesson, or if the opposite will happen, which is despite all of the

• 12:37Speaker 03

  trouble we're seeing in the video game industry financially, if GTA 6 will come out, it will be a hit and then everybody will go, it could be me. I, I could be that.

• 12:49David Pierce?

  Well, so, okay, wait, explain this to me really fast because GTA V has been out for, good lord, like 65 years at this point.

• 12:55Speaker 03

  Yeah.

• 12:55David Pierce?

  But GTA 6 is like a, a sequel on top of sequels on top of sequels. Like, why is Grand Theft Auto VI different from, say, the new Call of Duty, which I assume will come out at, at once a year, every year until like the Heath, Heath death of the universe?

• 13:08Speaker 03

  Yeah. I mean, you kind of said it. They don't put them out all the time. They work on them until they are, in their opinion, just right. And they seem to know quite well, even if I don't always love every bit of their games, they sell extravagantly. It's hard to say with GTA 6, because we haven't seen much of it, other than some leaked gameplay footage. That was very, very early. But there's also questions around that game on its own. There's different management in charge of this game than there has been in the past. I would say the first real shakeup of editorial direction for this game in the entire series's lifetime. So again, we have this game that just embodies the mega-budget game, and it has its own

• 13:52Speaker 03

  question marks around it. And I think a lot of where we're at right now is based off of GTA V's success, and people hoping that they can be that.

• 14:01Speaker 02

  Yeah, just to give a data point to that, GTA V cost around $260 million to produce. There have been recent leaks, like GTA 6 leaked about a year ago. And as part of that leak, there was some speculation that the game's development costs have overcome $1 billion at this point.

• 14:20David Pierce?

  Whoa. You know what this makes me think of is, right before the second Avatar movie came out, James Cameron did an interview and said something to the effect of, like, "This movie is gonna have to be the third biggest movie of all time, just to break even." And it's like, at some point, that's a totally insane thing to say, unless you're James Cameron, you've made the other two biggest movies of all time. And like, I guess GTA 6 is kind of in the same position. It's like, if you're anyone other than the people who make Grand Theft Auto, you might be out of your mind. But if anybody has a chance to make that worthwhile, it's probably Rockstar.

• 14:52Speaker 03

  I guess like a thought to leave the listeners on who maybe don't follow games closely, because this might sound deranged. How could we see the end of AAA? And I'm not saying that there's a guarantee that that will happen at all. But think about the Marvel era, and the superhero era that is coming to an end. It is at the very top of pop culture until these increasingly big bets start to like flop, right? And you get three or four of these in a row, and suddenly they're not making money, and suddenly it's a bad bet. And the market signals that they're looking at other things. We have Oppenheimer and Barbie this, you know, summer, really popping off in a lot of other movies. And that's when things start to shift. And that is the sort of shift that I am curious

• 15:37Speaker 03

  what it will look like in the video game industry, because it feels like we're heading towards some sort of change. It's just hard to see what it is.

• 15:43Speaker 02

  I mean, you can look at it from a couple of years ago at Cyberpunk's launch. Cyberpunk launched, it was a total disaster. That game was enormously expensive to produce. They've since brought it back from the edge with updates and DLC and all sorts of stuff. The game is great now, but that was a representation of what can happen. Even if you throw hundreds of millions of dollars at a game, you are not necessarily guaranteed to get that back if the game launches and it's a disaster.

• 16:10David Pierce?

  Yeah, that's, that's a good one. And yeah, I like the idea of like, are we still in the Marvel can do no wrong era? Or are we in the everybody's kind of bored of Marvel era? And it turns out, like you're saying, Russ, you don't have to get it wrong that many times for it to fall apart pretty fast.

• 16:25Speaker 02

  That's right.

• 16:26David Pierce?

  All right. I am going to go see if I can figure out what the Barbenheimer video game era is going to look like. And then we're going to come back, we're going to talk about that. We're going to do some big hot takey 2024 predictions that are going to make everybody really angry. Thank you both. As always, we'll be right back.

• 17:19David Pierce?

  All right, we're back. As always, it's been a few weeks through the magic of time travel and podcast editing. We're back. You guys look different, I have to say. You've changed since we were here last.

• 17:29Speaker 02

  I've seen some things.

• 17:30David Pierce?

  Especially you, Chris.

• 17:32Speaker 02

  Oh, yeah. Well, Plant has seen a lot of things.

• 17:35David Pierce?

  So, the thing we're here to talk about is big games. And this one was actually the most fun for me of all of the episodes that we've done, because this is a topic I know essentially nothing about. So essentially, what we're gonna do is I did a bunch of research, I talked to a bunch of people, and I tried to like, speed run my way through learning about the very big business of very big video games. And I have come with some, some ideas and theories about where all of this is headed. And I want you guys to like, check what I have come up with, and sort of bring it back to reality for me. How does that sound? It sounds good.

• 18:06Speaker 02

  It sounds great.

• 18:07David Pierce?

  Okay, so, the way that I framed this, because I have, I have found myself unnecessarily structuring all of these things as I have gone through it, just to help it make sense, is, like, if the big question is kind of where do AAA games go, I have four possible futures. I don't know which one of them I think is right, but there's kind of an analog somewhere else in the world that could be how this goes. And I'm just gonna walk you through all of them, and we're gonna talk them out. But first, I have to say, you guys screwed me over really badly, because neither of you prepared me for the idea that absolutely no one agrees on what AAA means, or what indie means, or any of these terms. And so, for every single person I talked to, I was like, "Let's talk about AAA games." And they're like, "Well, what do you mean when you talk about AAA?" And I was just like, "I don't know, you're supposed to know the answer to that."

• 18:51Speaker 02

  If it makes you feel any better, the Game Awards just announced that Dave the Diver was nominated for Best Indie of the Year, one of five or six that were nominated for Best Indie of the Year. Dave the Diver was produced by a studio of 18 people within NEXON, which is an enormous, enormous company. And even NEXON has said, "Yeah, it's not really an indie studio, but it kind of looks indie. It's got like, pixel graphics and stuff." So yeah, no one knows for sure what the difference is.

• 19:20David Pierce?

  Yeah, no, it was, it was actually very funny, prepping for this in the process of that happening, because there were a bunch of people really mad about that. And then the flip Side was Baldur's Gate was nominated for like game of the year. And there were a bunch of people saying, well, that's an indie. It should have also been nominated as an indie. And that's worked this whole thing about what is a triple A game and was an indie. And what I've learned is that it mostly doesn't matter, like in real terms, it doesn't matter. So, but for my purposes, just for today, we're going to define triple A games as like the kind of two handfuls of very big, very expensive games. That everybody has heard of, like people who don't play games have heard of these games, right? That's kind of, it's not a perfect definition, but that's what we're going to do. And then indie is like the opposite of that.

• 20:02David Pierce?

  And I'm not going to try to define it further because I will just run into trouble and I don't need that in my life. So that's what we're going to do. Future number one, I've named all of these. I'm very excited about the names I have for them. Future number one is what I would call the Avengers future. And basically what that would be is that we've spent the last decade or so, but really sort of phase of video games. With a handful of gigantic properties that everybody loved that just came to like completely dominate the landscape. Like I went through the, the most popular games of the last 10 years. And I bet the two of you sitting here now could name most of them off the top of your head, right? Like Call of Duty appears 17 times on the list of 10 years. Madden is there 10 times in 10 years. GTA V, one game is there for five years.

• 20:47David Pierce?

  Like, most of these things will not be surprising to people. So we're in this place now where there's this gigantic, sort of earth shatteringly huge property that owns the world. Like, it's not the perfect analogy because it's a bunch of games instead of just like the cinematic universe. They've been big for a really long time, but now there is this feeling that these things are so big. And so frankly, bad now, they've gotten so risk averse because they're so big and they're so expensive and they're so complicated. That they're starting to crack and that eventually the Avengers can't be good forever. And eventually that stops being good and then there is time for something else.

• 21:25David Pierce?

  And I think one case you could make is that we're like right at the end of this massive dominance of a handful of properties. And the next thing is starting to appear like. Duty Modern Warfare 3 just came out. By all accounts, just a garbage fire of a game. Everybody seems to hate it. It's still selling a lot because it's Call of Duty, but at least so far, it doesn't seem to be the success that the others were. And it's like, okay, is this what started happening to Marvel a couple of years ago? Where it's like, the shine is off a little bit. People won't just do it because it's there. Maybe this stuff is gonna start to fall off and the next phase is gonna be full of new things. What do you guys think of that?

• 22:04Speaker 02

  I think you're right that I think we're starting to see the franchises that were forever easily bankable. We're starting to see them struggle in these environments. And franchises like Call of Duty have sustained themselves, not on the, oh, man, there's a huge campaign and there's multiplayer, whatever. Just on their, the fact that they have a free to play mode that's very popular in Warzone. And that is monetized out the butt. So that's where they're making all their money. So I think that's what you're gonna start to see with those bigger franchises. I think the other struggle that these big franchises come up against, which is actually a good thing, is because there is so much week in, week out competition from smaller games that are doing cool things, they pull time and resources and money away from people saying,

• 22:49Speaker 02

  oh, the $60 that I spend only goes to Call of Duty or only goes to Madden or whatever it is. Instead, they're gonna say, I'm gonna buy three games for $20 each and I'm gonna play those for 30 hours, 40 hours, whatever it is. So I actually think this is not necessarily a bad thing, what you're describing.

• 23:07David Pierce?

  Yeah, to be clear, I don't necessarily think any of these are actually bad futures. Like, one of the things I wrote under the Avengers future bullet in my notes was, it's just the end of an era, everything changes, don't be afraid, right? Like, this does not mean it's the end of good video games. I just think it's possible. I would not say it's likely, but it's possible that it is, it is the end of a certain set of video games.

• 23:31Speaker 03

  I am going to get really pedantic here, but I don't think it is the end of an era at all. I think it is just a continuation of an era because, let me know if this sounds familiar. So there's this company called Activision, and it has the biggest game in the world, and it stops making all of its other games, and it puts all of its resources into that game, and actually has multiple teams working on different versions of that game so they can get it out every year, right? I'm obviously talking about Tony Hawk's Pro Skater. Sorry, actually, no, I'm talking about Guitar Hero. Oh, wait, no, I'm talking about Call of Duty. Overwatch, you know, is now at the end of its lifecycle with esports, or they're closing the esports. There are

• 24:11Speaker 03

  ebbs and flows to these things, and yes, those are down, but then Fortnite is up, right? Minecraft is still dominant. And those things, yes, like, fresh mention, they're not updating every year, but they are updating constantly. They're finding new ways to bring in cash. It's just a slightly different cadence and presentation.

• 24:32Speaker 02

  But you would agree, Plant, that there are way fewer AAA big releases every year, like, these years than they are five years ago?

• 24:40Speaker 03

  For sure, but if we're going off the, I guess specifically the Marvel comparison, I think, doesn't work here because the Marvel games, the big games continue to exist, and the big games get only bigger. They're getting larger and larger. But it's weird, because on one hand, I want to agree with that, there are fewer big games, but I don't even know if that's true anymore. There are fewer big games made by Ubisoft and EA and Activision, but now other teams are making big games. We're getting pretty large-sized games from Sega and Atlus. We're getting large games from Remedy. We're getting even indie, quote, indie, former indie studios that have a ton of money that are now making their own very

• 25:22Speaker 03

  large-scale projects. So it's like a blend. We're watching all these different ways of engaging with games kind of blend together, where, yeah, and maybe in the past it felt like, no, there are kind of two things. There was the, you play games that came out from EA, Ubisoft and Activision, or you played, like, downloadable indie games. And now, yes, all of that is kind of like blurring together. And the big companies are making some downloadable games, and the, you know, small indie companies are actually quite big now, and they're making big games, and it's just getting more messy.

• 25:53David Pierce?

  You're gonna really like Hypothetical Future Number Two.

• 25:56Speaker 02

  Yeah.

• 25:57David Pierce?

  Chris, but I'm gonna get that, I'm gonna get to that in one second. Because I think, I think what you just described is a perfectly plausible version of this. The one thing I will say for the Avengers future that we live in is just from a pure like greatest hits of gaming thing, you look through and basically if you're not sort of A plus IP like Harry Potter or Star Wars, if you're not a sequel, that's it. It's just those two things. That's how you succeed in video games right now. If you want to be like one of the 10 or 20 biggest games, those are your only two moves right now. And we've been on that path for a long time. You either, you either make the annual sports game, you make a game based on, you know,

• 26:38David Pierce?

  Star Wars or Harry Potter or some other like extremely old IP. I almost said James Bond because I'm like desperate for more James Bond games, but alas. Or you make a sequel. We have, you know, Diablo four and Resident Evil four and Dead Island two and Final Fantasy 658. Like this is kind of what it takes to really have a huge hit now. And I'm leaving out the live services stuff because we're gonna get to that. But I think that is a different corner of the future of video games. But I'm just saying for these like giant titles that people pay money for, that's still kind of the world we're in.

• 27:09Speaker 02

  Yeah, I mean, again, success being like most amount of profit, right? Obviously, people are seeing success not only creatively, but also making a ton of money relative to what they're putting in for smaller projects. You know, if your game costs $10 million to make versus $100 million to make and you end up making 50 million on it, like that's a really good return. So well done. Yeah, you know, again, it is difficult to determine whether something is successful or not strictly on the like total copies sold. But I do agree that like for the best selling list, 100%, it's all franchises you've always heard of.

• 27:47David Pierce?

  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 going to 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, the 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. Like, this idea that by upending the way the business works and essentially taking

• 28:29David Pierce?

  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. And 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.

• 28:58Speaker 03

  It's so tough, because, so, I feel like we talked about this, and I can't remember which episode on, but like, that 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? And that's our brand. What you are describing makes a lot of sense to me for Xbox, and especially as it pushes

• 29:40Speaker 03

  onto 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. But at the end of the day, the thing that I, I'm curious what both you and Frush think

• 30:20Speaker 03

  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.

• 30:38Speaker 02

  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. Like, It Takes Two is like, kind of a great example of something that is like, not that risky. 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

• 31:21Speaker 02

  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 like, didn't sync Game Pass long-term is telling it how divested Microsoft is on this surface with all the other releases that were coming out.

• 31:38Speaker 03

  I 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 think the other thing 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 gonna have Grand Theft Auto VI come out next year or the year after that,

• 32:23Speaker 03

  and every board member is gonna say, that's what I want. I want to continue getting that, that absurd number, and I'm not gonna get that because somebody released a cooperative divorce game. I'm gonna 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 it. Maybe they're doomed. Like, maybe, you know, that weirdly their shareholders are this albatross with where the direction that the industry is going in. I don't know.

• 32:57David Pierce?

  Yeah, 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 were 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?

• 33:40David Pierce?

  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 tension is super real. But it also gets to a point where eventually that's gonna turn on somebody in a really big, like, earth-shakingly huge way that's gonna make everybody afraid.

• 34:13Speaker 02

  I mean, it has. I mean, Halo is a great example of that.

• 34:16David Pierce?

  Yeah.

• 34:16Speaker 02

  Like, this is the biggest, one of the biggest franchises ever in the history of video games. And 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.

• 34:39David Pierce?

  Yeah.

• 34:40Speaker 02

  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 of that. Where 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 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 gonna say, yeah, but remember what happened to Cyberpunk? Was that good for our bottom line? Maybe we should wait six months. And I think Starfield is a representation of that.

• 35:23Speaker 02

  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.

• 35:40Speaker 03

  Yeah, maybe a comparison is not just the, the prestige TV, but the end of the studio era in filmmaking, which was like, the 20s to the 50s. Where it's like, these like, just a handful of studios have total control. Even the talent there is like, they're good for tabloids, but they are, they are, they do not have much of a say.

• 36:01David Pierce?

  No, they like, signed contracts with the studio and then did whatever the studio told them to do. Yeah.

• 36:06Speaker 03

  Exactly. And the studios themselves had a lot more, say, in distribution. And, yeah, maybe we are coming out of that for games. And we will see something similar to what we saw for film in the 60s and 70s.

• 36:18David Pierce?

  So this is Phil Spencer's big theory, right? Is that he, 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 in changing the way people find and buy games. But I do think I think you're on to 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. You know, a lot of cases getting paid for how people play, not just by getting you to buy the game with,

• 37:04David Pierce?

  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.

• 37:10Speaker 02

  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 Activision. That is a huge percentage of the game space. Look at how much 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 like mostly it's these like

• 37:55Speaker 02

  eight companies that are like doing very well. And 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 like rise above. And again, all that does is just make it fewer and fewer companies.

• 38:20David Pierce?

  Yeah, I found one study that said the 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. And so the 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.

• 39:02Speaker 03

  I maybe the 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 going to buy 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.

• 39:44Speaker 03

  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 what's great for Disney? Having control of all those different IP that everybody wants to work for, having no overhead costs, and being able to set how much money you want from each project.

• 40:05David Pierce?

  Yeah. 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.

• 40:49Speaker 03

  I'm so curious what number three is gonna be here.

• 40:53David Pierce?

  Okay. Do you want to hear number three?

• 40:54Speaker 03

  Yes.

• 40:55David Pierce?

  Ah shit, I have two more and I can't decide which to do first. Alright, we'll just do number three right now. Number three is what I call the iPhone future.

• 41:01Speaker 03

  Okay.

• 41:02David Pierce?

  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. Same for Call of Duty, same for Madden. Everybody's gonna keep making Star Wars games because it's Star Wars. Everybody's gonna keep making Harry Potter games because it's Harry Potter.

• 41:38David Pierce?

  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 gonna stay the winners, no matter what they do.

• 41:56Speaker 02

  It is funny that you mentioned Assassin's Creed at the top there because Assassin's Creed historically was an annual franchise. 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 I, while I agree with you, like Assassin's Creed's not gonna like go away forever. I don't think it's the like lock solid guarantee that it once was.

• 42:41Speaker 03

  Yeah, and, and I think you already named Halo.

• 42:44Speaker 02

  Yeah.

• 42:44Speaker 03

  And before that, we talked about Tony Hawk and Guitar Hero. Nothing's unkillable.

• 42:48David Pierce?

  To be fair, nobody killed Tony Hawk. Tony Hawk remains.

• 42:52Speaker 03

  He's doing great. That depends on which conspiracy theories you believe. I could see that in the, in the sense that like, yes, certain IP that transcend games like Hogwarts or whatever, yeah, of course, they're just gonna 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. But, 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're, they've done the thing

• 43:34Speaker 03

  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, and they have a history of doing this. You know, they had mobile Call of Duty games that were available, and I believe in China, South Korea, Japan, years, years ago, before they were even here, they, I believe, had a partnership with Tencent. This is things that 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.

• 44:17Speaker 03

  It's funny talking about all the Marvel stuff and the superhero era, because it's not so unlike what Marvel has done with comics, right?

• 44:25David Pierce?

  Yeah.

• 44:26Speaker 03

  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're, they never fully go away.

• 44:40David Pierce?

  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. But 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, 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.

• 45:21David Pierce?

  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. And maybe that's just the cycle we're in now.

• 45:33Speaker 02

  We were talking about risk and I was saying how a 60 hour open world RPG has a huge amount of risk. These days, doing a free to play, high budget game in the live services space is enormously risky.

• 45:45David Pierce?

  Yeah.

• 45:46Speaker 02

  It is so hard because those games in particular, more so than like the Starfields 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.

• 46:28Speaker 02

  So 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.

• 46:38David Pierce?

  Yeah, the, the network effects of it are just so big to me. That's the thing I keep, 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 a many tens of millions of strangers to also think it's cool before I can actually like do anything in it. But the flip side of that is the reward seems to be higher than ever, right? Like the, the sense is we can build this game essentially once and make money from it forever. And that seems to be what everybody wants now.

• 47:08Speaker 02

  Fortnite's revenue is astronomical. I, you know, some of the leaks came out. 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 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.

• 47:38David Pierce?

  Yeah.

• 47:38Speaker 02

  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.

• 47:58David Pierce?

  Chris, what do you make of all that? Are, is live services just gonna take everything over for this next phase?

• 48:03Speaker 03

  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 could, you could go to CNN and have 24-hour news and you can have a 24-hour thing. You go to another channel and it's like the weather channel and they do the same thing every five minutes. Right?

• 48:25David Pierce?

  But you know why that's a fun example is because a handful of those channels pay for all the rest of them.

• 48:30Speaker 03

  Yeah, 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.

• 48:37David Pierce?

  But I don't think anybody means the weather channel when they say they like TV.

• 48:40Speaker 03

  No, they mean the weather channel. I mean, have you seen the CG on the weather channel lately? They're doing wild stuff.

• 48:46David Pierce?

  Listen, the weather channel's sick. The thing they do with the storm surges, like, I'm all about it.

• 48:50Speaker 03

  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. It'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,

• 49:35Speaker 03

  they have these summits that are broken up like the VR summit, the free to play summit, right? And the business people that that attracts are just completely different human beings. They, 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, the R and Bitcoin, they were probably both wrong. But other than that, it was great.

• 50:11David Pierce?

  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. PWC, the like accounting and consulting firm, they do a really interesting like 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.

• 50:56David Pierce?

  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. That'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.

• 51:31Speaker 02

  A bellwether for a lot of things in a way that most things are not.

• 51:35Speaker 03

  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.

• 51:52Speaker 02

  EA Sports FC, the worst named video game of all time.

• 51:54Speaker 03

  Yeah, it's gonna 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?

• 52:33Speaker 02

  Sure.

• 52:33Speaker 03

  And if you asked me about Capcom and Sega today, I'd be like, they do no wrong. They continue to make, well, Capcom has a really good streak right now. Sega, it depends, it can go back and forth. Or if you had told me that Konami would not have put out games really for a while and that Bandai Namco would be 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 sounds silly.

• 53:00Speaker 02

  Yeah, and I think that applies to the game franchises as well. You know, people didn't have much understanding of what Minecraft was gonna 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, but again, I- You know, so long as you're not super, hyper focused on the

• 53:42Speaker 02

  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.

• 54:11Speaker 03

  Can I just tell you the unfair thing about video game culture?

• 54:13Speaker 02

  The one thing?

• 54:14Speaker 03

  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 mention 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.

• 54:35Speaker 02

  You also sound like you're 200 years old.

• 54:37Speaker 03

  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. There'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, and I'll give you a swirly."

• 55:03Speaker 02

  Chris, I just want you to know, I think you're impressive.

• 55:05Speaker 03

  Thank you. Honestly, I just wanted praise, and I got it.

• 55:08Speaker 02

  I'm so proud of you. I could not, I couldn't even begin to tell you.

• 55:11Speaker 03

  You might think that it doesn't work, but it does. I do feel better.

• 55:14Speaker 02

  I am, listen, I'm proud of you. You were early, you were, you were early. What are you gonna do? You were the first one. You get to be a Minecraft hipster. Congratulations.

• 55:22Speaker 03

  I'm gonna cut this recording out and then just listen to it every morning when I wake up.

• 55:25Speaker 02

  There you go. Alright, 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 gonna get out of here. We're right back.

• 55:39Speaker 00

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends. Like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior like beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 56:10David Pierce?

  All 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. So I think in this case, Game Pass is probably the more relevant one to like us right now

• 56:55David Pierce?

  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, 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.

• 57:17Speaker 02

  I actually think that Game Pass is already determining how some games get made.

• 57:23David Pierce?

  Really? Okay.

• 57:24Speaker 02

  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 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.

• 57:51David Pierce?

  Chris, you were pointing during that. I'm assuming you like this theory.

• 57:54Speaker 03

  I was waiting for Fresh to say my game of the year from last year, Pentament. 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." When I say "a book," I meant video game, but that was a hell of a Freudian slip because it was really just a game that you read a lot about. You are an illuminator, so like the person who made like, you know, texts look beautiful 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.

• 58:39Speaker 03

  It is a religious and spiritual game. It would have never, ever been made within the Xbox system without Game Pass. And Xbox made a lot of indie games, but there is a huge difference between Limbo and Pentament. 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 gonna leave and go make Pentament 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." I think that's encouraging.

• 59:22Speaker 03

  I think it also is a great way for them to test out ideas. Playing a game like Pentament, 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. Fresh 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. I am more curious what this means for studios that are not owned by a major publisher, though.

• 1:00:07Speaker 03

  And how will they start designing games towards Game Pass? Especially if they don't have a contract before they, you know, start work.

• 1:00:16Speaker 02

  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 00 to get on Game Pass. But I do agree, I think those pitches are altered by Game Pass simply existing.

• 1:00:37David Pierce?

  Yeah, it's like the, it just always makes me think about the thing on Netflix where like every Netflix mini-series 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 mini-series 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 Store is another recent example of this, right? Like, 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

• 1:01:21David Pierce?

  or led 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's 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. And 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.

• 1:02:05David Pierce?

  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.

• 1:02:24Speaker 02

  What 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. Yeah. 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 upfront.

• 1:02:59Speaker 03

  And 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 new services is the curation, you know, you're only going to get the quote best to the best.

• 1:03:30David Pierce?

  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. I 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.

• 1:03:49Speaker 02

  You did so well.

• 1:03:51Speaker 03

  I'm really proud of you.

• 1:03:52David Pierce?

  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?

• 1:04:17Speaker 02

  Certainly not going to go down. 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. But I also think some games, if you're gonna spend, hell, Elden Ring, perfect example. I played Elden Ring for 150 hours, easily worth, I think it was $60 when it came out. Easily worth that $60, I'd pay $100 and be happy. So yeah, I think it is sustainable insofar as it's not gonna come down from that.

• 1:04:51Speaker 03

  I also think we're seeing more variety of pricing across the landscape. You know, Assassin's Creed: Mirage didn't cost $70, and yet it's 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 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's

• 1:05:36Speaker 03

  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.

• 1:05:47Speaker 02

  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.

• 1:06:07Speaker 03

  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 than discs. We recognize all of it. I'm just saying, I could, I could feel, I could feel people tensing their hands around their steering wheel, being like, "Am I gonna just drive right off the edge?"

• 1:06:26Speaker 02

  Companies will charge exactly what they think they can charge and still make money.

• 1:06:31David Pierce?

  And I will say it's, there is really no historical precedent for that number going down. I think you're right. Okay, I'm going to 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. GTA V 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?

• 1:07:12Speaker 02

  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.

• 1:07:30David Pierce?

  So maybe I'm underrating how big GTA really is.

• 1:07:32Speaker 02

  Oh, 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.

• 1:07:47David Pierce?

  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.

• 1:07:54Speaker 02

  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, and 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 Cyberpunk's 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 and was a disaster.

• 1:08:31David Pierce?

  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 6 is the last AAA game? I 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, I don't, whatever. It feels like a moment in the broader gaming world, too.

• 1:08:57Speaker 03

  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 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, I actually dug up an old story. And it's telling that I can't even remember if it was during GTA IV's launch or GTA V'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.

• 1:09:41Speaker 03

  That said, we are in a different point in the industry than we were when GTA V and even GTA IV came out. Everything we just discussed before this. There is more variety and more choice. There are not just the single player games. People might forget that GTA V with online, online came later and broken. And it took a while to like get, get itself up and running. And 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, that happen again. So yeah, I, 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.

• 1:10:24Speaker 02

  And I also think the wait for GTA VII 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. So 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.

• 1:10:53Speaker 03

  Can I tell you my ridiculous GTA VII theory?

• 1:10:55Speaker 02

  Yes.

• 1:10:56Speaker 03

  GTA VII is going to be the return to New York. And they're, 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?

• 1:11:25David Pierce?

  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.

• 1:11:33Speaker 03

  Well, no, no, no. You see, what you forgot though is that game was called load screen.

• 1:11:37David Pierce?

  Yeah.

• 1:11:38Speaker 03

  I'm talking about a game where you actually get to do the thing that you're promised. Man, Starfield really walked into the room at the wrong time. I'm sorry, Starfield, not that bad of a 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.

• 1:12:06David Pierce?

  I 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.

• 1:12:22Speaker 03

  I was just gonna 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. Like 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, just stuff, assets. That is a thing that I, I think will be filling that, right? Like there are, and 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.

• 1:13:05David Pierce?

  All right. Well, in 2038, the three of us are gonna do like a hologram revisit of this series and we're gonna see what we got right and what we got wrong. But for now, we gotta 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.

• 1:13:20Speaker 03

  Hey, can we plug our show?

• 1:13:22David Pierce?

  Please.

• 1:13:23Speaker 03

  If you have enjoyed listening to Russ, Frushtick and myself, we have a podcast called The Besties that we do every week with Justin and Griffin McRoy of The Adventure Zone and my brother in my brother in me. That's kind of how you say it. And we also have a every other week spinoff on the same feed called The Rusties where it's just Fresh and I kind of getting into the nitty gritty of things. So if you enjoy that, you can get that. And if you enjoyed us being here, you can reach David at [email protected], I think is his email address.

• 1:13:59David Pierce?

  Yep, that's right.

• 1:14:00Speaker 03

  And we'll take care of it from there.

• 1:14:02David Pierce?

  I'll leave his phone number in the show notes.

• 1:14:03Speaker 03

  1-800-COOL-GUY.

• 1:14:05David Pierce?

  Perfect. Awesome. Thank you both. We will, we will do this again someday when GTA 7 comes out. It's gonna be epic.

• 1:14:16David Pierce?

  All 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 [email protected] 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 Moreno and Liam James. The Vergecast is a Verge production and part of the Vox Media Podcast Network. We'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.

• 1:15:06Speaker 04

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