Pod Insights a16z Podcast The Social Serendipity of Cloud Gaming About this episode with @ibjade @Tocelot @laurenmurrow
True cloud-native games—those exclusive to and solely playable within the cloud—are poised to revolutionize gameplay and unlock new avenues of hyper-personalized storytelling and socializing. In this episode, Jade Raymond, VP of Stadia Games and Entertainment, and a16z partner Jonathan Lai, formerly of Riot Games and Tencent, talk about the challenges in building cloud-native games, their potential to upend prevailing business models and pricing, and most importantly, the spontaneous, social, super-shareable experiences that true cloud streaming will reveal. Through the rise of user-generated content, AI, and the cloud, they believe we're inching ever closer to the Metaverse. This episode is part of Social Strikes Back, a new series exploring the next generation of social networks and how they’re shaping the future of consumer tech. See more at a16z.com/social-strikes-back.
Transcript 0:00 Speaker 00 Hi and welcome to the A16Z Podcast. I'm Lauren Murrow. True cloud-native games, those exclusive to and solely playable within the cloud, are poised to revolutionize gameplay and unlock new avenues of hyper-personalized storytelling and socializing. It's a vision that, though steadily advancing, is still in its early stages. Just one year ago this week, Google launched its cloud gaming service, Stadia, which shares the space with competitors including Microsoft's X-Cloud, PlayStation Now, and Nvidia's GeForce. In this episode, Jade Raymond, VP of Stadia Games and Entertainment, formerly of Ubisoft, and A16Z partner Jonathan Lai, formerly of Riot Games and Tencent, talk about the challenges behind building cloud-native games, the potential to upend
0:44 Speaker 00 prevailing business models and pricing, and most importantly, the spontaneous, social, super-shareable experiences that cloud gaming will reveal. This vision goes far beyond massive battle royales or hyper-realistic graphics. Through the rise of user-generated content, AI in the cloud, they believe we're inching ever closer to the metaverse. The first voice we hear is Jade, as she explains how she became obsessed with games at a young age. None of the following should be taken as investment advice. See a16z.com/disclosures for more information.
1:14 Speaker 01 So I always knew I wanted to make games. I figured it out when I was about 12 years old. I was visiting my uncle, who lived in San Francisco at the time, and I made it my mission to beat him at all of his games before I left for the visit. And it was during that time that it dawned on me that someone gets to make games. And I thought, that's awesome, why not me? I had already been into robotics and done a little bit of programming, but that's when I really decided to focus on that as a career and started working on game projects in my spare time.
1:44 Speaker 00 So how does building for cloud differ from what you've done before?
1:49 Speaker 01 I've always been attracted by the bleeding edge of games. Games are constantly reinvented. If you look at what a video game was 10 years ago, it was totally different. 20 years ago, what drew me to, for example, working on the Assassin's Creed franchise and building that up, was that next-gen consoles were coming, and that was a big opportunity to go. Okay, what can we do with 8X, the processing power? And so a lot of those questions that have pushed me towards my career decisions all along is what attracted me to Google this time, which is, you know, okay, it's not 8X. It's the whole data center is your processing power. Okay, it's the whole model for how we think about client server or multiplayer games needing to work is totally upended and changed.
2:34 Speaker 02 Some of the largest games today, Fortnite, Clash of Clans, they run most of their network on the cloud. So, John, what distinguishes what we have now from true cloud streaming? Or what you call cloud native gaming?
2:47 Speaker 03 There, the first wave, which is what we're seeing right now. It looks like it's actually mostly been points of existing PC and console titles. And so there's a title that's already under development for PlayStation 4, the Xbox One, and it was initially being made in the cloud. These games were fundamentally developed as a different hardware platform. And so we're most excited about this second wave of games that might be coming around the corner. We call them cloud needed games, but what they really are, any game that's built from the ground up for the cloud, that's only playable within the cloud infrastructure as opposed to something that was supported.
3:22 Speaker 01 We are currently in the first wave of cloud gaming. And really what we're seeing is the convenience of cloud gaming. What we're seeing is, okay, it's all the games that we can play in other places, but we get rid of the download time, we can play more instantly, we don't have to worry about updates, we can play on different screens. Those are great benefits, but I think the really exciting thing, and I think that's what's going to be kind of the equivalent of what TV was to radio, is when we unlock what the second wave of cloud gaming is. One of the things is obviously the whole client server model. Right now, you're limited to the interactions and simulations that can run locally on people's machines. No matter what, even if you're running, in your example,
4:06 Speaker 01 Fortnite is running on the cloud and a lot of other games are as well in the backend. They're still designed with the idea that they have to run on a local PC or a local console or a local mobile device in some cases. And Really what's going to unlock it is not only the processing power and what we call elastic compute of the data center, but also the idea that essentially any game can be designed like one big LAN party. So you don't have to worry about network ping times. You can at least know exactly what those are and design for them and measure them in a consistent way. And also that hits up against the limit of how big of a shared experience you can have.
4:46 Speaker 02 Are there new game mechanics or even game genres that you find uniquely enabled through the cloud? John, you've written about how it might help solve games' cold start problem. But what are some of the other mechanics that you see enabled by cloud gaming?
5:02 Speaker 01 When you think about the magic of cloud gaming, you're being sent a stream that from the pipes and stuff, it looks exactly like a stream of video data. When you think about this new paradigm, there can be a one to sort of infinite and very strange connection of what inputs impact that stream. So if you think about it, someone typing in the side of a YouTube chat can have an input into my environment. They type tomato, tomatoes start falling from the sky in my game. Thousands of people connected to my game could be there playing the role of, let's say, a zombie horde that's attacking. Those all could be
5:45 Speaker 01 real players, right? And their input could just be on a mobile phone on a very simple interface for doing that because to be a zombie, you don't need so many controls. I think a lot of the really exciting things is that disassociation of the direct relationship between number of people connected to a client, either one or, you know, X eight or whatever, a hundred is typically the biggest we've seen, and this way that tons of inputs can impact the simulation live.
6:12 Speaker 03 I love that idea. I feel like there's always been something magical with the combination of live video and games. We have this Twitch Plays series where someone will play a game on Twitch, except the people playing it is actually the Twitch audience. And so it started off with Pokemon, and it's gone through several games, but it's essentially crowdsourced gameplay. And then recently you've had things like Netflix Bandai's Snatch, where people have experimented at making interactive choose your adventure stories that the whole family can play and debate over, like, what do you go left or right? The protagonist should like kiss the girl or not. So I think there's something magical about that kind of combination of live video and games. And I would love to figure out what does a next generation American idol look like?
6:54 Speaker 03 Where you have millions of people all watching the same stream that are voting or typing or doing something to affect the show. Except I feel like there's something there that we haven't seen yet that's could be pretty compelling. And then even things like Among Us, which is so, so popular right now, I've often wondered, is there a way for that to be more interactive between the people that are watching? Because it's a big live streaming phenomenon. So for example, imagine in a Among Us game where the audience actually voted on who the imposter was. And then it becomes a player's job to try to act and convince a live streaming audience they're not the imposter and this other person is. It becomes like 50% B and D and 25% game and 25% reality TV show.
7:37 Speaker 02 On that note, what are some new business models that you'd expect cloud gaming to enable? One area I'm interested in in particular is how it might set the new stage for even new forms of marketing.
7:48 Speaker 01 I'm sort of obsessed with the idea of bringing back arcades or the arcade experience now that cloud gaming is there because really you don't have to pay for a whole game anymore. So even with this first wave, there's an opportunity to say, well, maybe I buy a bunch of coins like I did in the arcade and I play 10 minutes of this and then I hop to the next and my coins go to the next experience. And I think there's a whole bunch of interesting ways to think about that opening up games as well to all kinds of communities that maybe can't afford the $70 or didn't get to play AAA games, right? And then you could also create business models that could either be those coins you buy them or they're ad subsidized. So I feel there's a ton of opportunities, not only in business
8:31 Speaker 01 models, but also how you think about recommendation systems. Like imagine we're in a crew and we wanted to get a high impact bunch of combat, like we wanted some melee combat kind of action. You could imagine making a playlist of 100 different games with the highlights of all the best melee boss battle parts. And as a little group, we could sort of teleport from game experience to game experience. So there's a whole lot we can do in terms of delivery, recommendation and business models.
9:03 Speaker 02 Do you think game companies, developers will also have to figure out new pricing models with this paradigm shift?
9:10 Speaker 01 We're seeing a big shift towards subscription. There's been an ongoing shift towards free to play in games. And then I think, you know, there are the new crazy ideas that I had for more traditional box products of like, can we bring back the arcade? Can we bring back micropayments? Can we bring back ad revenue? I think also, though, if we're talking about the metaverse vision, then what's the marketplace? Is there a global marketplace for all of these experiences that people can tap into? Is there a kind of eBay for virtual stuff? And can that virtual stuff move back and forth between the different experiences? Is there an API or a standard so that stuff can move around between these experiences?
9:54 Speaker 03 The interesting thing is all these pricing models, there are historical precedents for them. What keeps me up at night is trying to figure out, are there new pricing models that we haven't seen yet that are possible within a cloud gaming ecosystem, which actually make more sense than any of those models? Because subscriptions made sense in our legacy world. Free to play made sense in mobile, for example. These were all things that worked in other platforms. But if there was something that leverages the blockchain, for example, but if there was a marketplace of goods that people are trading and every good is uniquely identifiable and there's a limited supply of them, then you essentially create virtual economies potentially inside of these games and these worlds. And so then the pricing models become actually
10:35 Speaker 03 More like real life, people might have jobs inside these games, they might be trading their time. Time becomes a new currency. It feels like we're still scratching the surface. When we think of just subscriptions and free to play and our current, because that's what worked in the old world. It might not be the thing that takes off in the next wave of cloud native games.
10:53 Speaker 01 Yeah, when I look around, it does seem like everyone, and Stadia included, is currently focused on being the Netflix of gaming with a model of some form of subscription and a number of content. And I think that's great. But I think the real killer app for gaming and the cloud gaming in particular is becoming the YouTube of gaming. I think if you look at what I believe the history of the internet is, we had the internet of text. Now there's the internet of video and obviously TikTok, one of the latest examples. Kids go to YouTube to search now rather than other search engines. They rather watch a 10 minute video than read a two minute text. That's the way people process now. And I think the future is the internet of experiences.
11:37 Speaker 01 And I do think the cloud native gaming and something like the vision of the YouTube of gaming is going to enable that internet of experiences.
11:46 Speaker 03 Do you think that in this environment where people can just click to play, do you feel that fundamentally these changes, the types of games that we'll have, like the design playbook, might also change to accommodate people being able to come in and out of games much more easily?
12:01 Speaker 01 Absolutely. What we've started to see in game development vocabulary is time to fun becoming an important thing. It used to be fine to have, you know, these really long intros and cutscenes and then make people go through all of this character customization before they even knew what they were customizing their character for. And I think the new best practice, and it's not so new because we've been talking about this now probably for the last five to 10 years, is how do we shorten that time to fun? And with this instant play and with the click to play, that's going to become more and more important.
12:35 Speaker 03 And instant games, it also seems to be on the verge of having to come back. You know, the concept of each TMR5 browser games, there were a bunch of I O games that recently reached hundreds of billions of people playing. This has been around for quite some time, right? You have things like Slitter.io, like that snake game where you're trying to eat other snakes in a browser. But it feels like today, there's so many social channels that are just virally propagating these links. So you have people sharing on Discord, you have people sharing on YouTube. Things are going viral over like Twitter and Reddit. And so instant game seems to be something which is adjacent to cloud gaming and maybe they merge in some way.
13:12 Speaker 01 I've thought about the same thing, and I think that's evidence of the appeal of cloud gaming and the instant access because that time to fund metric is so important. And so how do we now deliver that for the HD experience, really thinking about different entry points and scaling those for different people?
13:30 Speaker 02 Well, you mentioned that you're experimenting with click to play. The space, of course, is growing increasingly competitive. You've got PlayStation Now, you've got GeForce, Microsoft X-Cloud. What is it that makes Google Stadia particularly equipped to be out in front of the cloud gaming trend?
13:48 Speaker 01 When you think about the Google Assistant, I don't know if you've had this experience, but it was quite an experience for me. I was with my mom hanging out in LA. I looked up on Google, place to go have sushi, and I just hit what I thought was the reservation interface. And when we got to the restaurant, the person there said, oh, where's your father? It was just me and my mom. And I was like, what are you talking about? Oh, the really nice man who made the reservation. And then I realized that it was a Google Assistant made the reservation for us. And it was such a natural and friendly conversation that the person who took the reservation didn't realize it. And that kind of power inside a game character just unlocks a whole new level of immersion and storytelling that's
14:33 Speaker 01 really exciting. I mean, I love MMOs. Obviously, a lot of my work has been in action adventure games where story is a big part of it. And so to unlock that storytelling capacity and realistic, believable characters is just super exciting for game developers.
14:51 Speaker 02 Talk to me about how that unlocks this next level storytelling. How does it differ from the current crop of world building games?
14:58 Speaker 01 Typically, when you go talk to, they're called NPCs in games, non-player characters, there's a certain set of canned answers or things that that character will be able to say, and that's limited by how many options that a writer can write in terms of believable script, and then how many lines you can record with an actor, and all of those things have limits. So the experience that you have as a gamer coming in this is the characters that you encounter, well, they'll often repeat the same thing to you multiple times if you go back. There's no adjustment to those things. And so with these kind of AI models that we have, we could put some basic objectives and behaviors inside the AI models, and then they can
15:42 Speaker 01 respond to things that you've done in a game in a realistic way.
15:46 Speaker 03 As you were saying, that I was thinking of Assassin's Creed, and you know, how in Assassin's Creed world, you have so many NPCs just milling around, and the concept of having each of those NPCs be controlled by an AI that remembers what the last thing you did was, the last time you've spoken with them, maybe they've heard from their neighbors, or things that you've done in far-off cities, and then they react dynamically. That just feels really mind-blowing in terms of the next evolution of these virtual worlds, or just these open world games. Kind of makes complete sense in terms of making these experiences more lifelike. If you robbed a store last week, and then you come back inside that store today, well, people should react differently to you, right? Like, maybe they're scared of you.
16:25 Speaker 01 Absolutely. And even better, a wanted poster of you should be on the wall.
16:30 Speaker 03 Right. That really, like, the world feels dynamic. It's reacting to things that you do. It's not that dissimilar from the West world, for example, that HBO show, where you come in and everything adapts to the choices that you make as a character.
16:42 Speaker 01 I think that's one of the ultimate dreams is creating that kind of experience. And we're on the verge of being able to do that kind of thing. We certainly are there in terms of graphics fidelity. And those are the types of things that Wave 2 of Cloud Gaming unlocks is you can have distributed physics across the cloud. So there's no more limitations now on how that behaves, which creates a ton of emergent gameplay. But also just the dynamic weather and the persistence in a world and having that kind of recognition. I don't know if you remember the Nemesis system that was introduced a few years ago and was hugely popular. We can imagine what's the next gen version of a Nemesis system where there is memory from all kinds of characters.
17:26 Speaker 01 And we take the limits off of that as well.
17:29 Speaker 02 I want to talk about using AI not only as a creation tool, but also in terms of identity. How does AI also enable you to more fully express yourself within these game worlds?
17:43 Speaker 01 We're in the age of self-expression. Whether we're talking about a game as a social platform or traditional social platforms are all about sharing something about ourselves. We all want to share who we are with the world and get recognition for that. Even if you think about the trends in fashion, people want to go to Nike to design their own shoes. Everyone wants to put their stamp on things. And so I really think the more that we can create these tools that help people express themselves and share something about themselves, the stronger and more sticky and more enriching, really, that interaction is going to be. And I think there were the beginnings of this when you think about Left 4 Dead and
18:24 Speaker 01 the AI director pacing the game and understanding what makes a game fun and the ups and downs. Well, what can we do in terms of AI directors on a global scale to create that fun and also to personalize that as well? So maybe my version of a great game is action, action, action all the time. And Jonathan prefers to grow some vegetables or whatever and go collect some ore and craft. I don't know what kind of player you are, but the AI director could personalize that as well.
18:55 Speaker 03 To your point, if you've watched the movie Iron Man. I've always thought that what was the best part of Iron Man, like the most valuable asset is not the Iron Man suit. It's actually Jarvis, the AI which helps Tony Stark create that suit. Because in that movie, Tony just tells Jarvis the design that he wants, right? It's like, hey, I want a suit that's made of titanium and put the flex capacitors in the wrist. And Jarvis figures out how to actually make it. He goes and gets the materials and he 3D prunes it. And so having Jarvis in our world, some sort of AI assistant or a set of creative tools where someone can just focus on what they want.
19:33 Speaker 03 It would be game changing in terms of enabling storytellers to spend more time being creative, thinking on design versus the minutia of implementation. Which is still very important, but it's where the bulk of time and money goes right now in game development. I suppose sort of that early brainstorm and design conception phase.
19:50 Speaker 01 And then how do we use AI to amplify the talents that players have? So maybe I'm not great at drawing or painting or I don't know how to 3D model or program. But I can through natural language processing, describe what I want. We can use machine learning to create the 3D rendition of that and amplify what I set. Which I think would be incredibly fulfilling experience and a way for people to share who they are beyond just avatars. But really could create a whole environment that represents them that they can share with people.
20:26 Speaker 03 I think it's the ultimate form, it's the democratization of content creation. The idea that anyone can become a creator, not to help us with AI or a suite of AI assistance tools. And I think it also, it might be a requirement for building something like the YouTube for gaming. Because in order to have enough of a content library that you can have something like YouTube. You need more creators out there than just the number of full time professional developers that are making these games inside big companies.
20:53 Speaker 02 Yeah, talking about some of the challenges of building cloud-native games, it takes a really long time and it's really expensive to build out some of these content libraries, right? So is the answer to that then the concurrent rise of user-generated content and AI?
21:09 Speaker 01 I do think so. Ultimately, I think that's how we're going to get the best content as well.
21:16 Speaker 03 Maybe that's actually the path to the metaverse that people talk about, but it happens seamlessly with everyone creating content as opposed to any one single company professionally creating this huge virtual world that people go in. It's actually the entire world working together with an AI to create that metaverse.
21:32 Speaker 01 And I do think when we were talking about the killer feature of cloud-native, the fact that we're landing on UGC as being a big part of it is really, I think, key here, not only because people want to express themselves and share an identity, but also that's from a technical standpoint, something that really hasn't been possible before. Because how do you constantly update a world? How do you keep things updated? I've created my part, and then how is that reflected in your game if I want to share it? So all of this happening on the cloud obviously makes those things that were impossible before, especially on mobile, to be shared experiences and shared worlds.
22:10 Speaker 02 So what are some of those social capabilities that the cloud enables that maybe we haven't seen yet? What does that look like?
22:17 Speaker 03 It feels like when people think about social and cloud gaming, I think the first thing that they gravitate toward is the removal of concurrency caps on player accounts within multiplayer games. And so just using Fortnite as an example, Fortnite is a cutting-edge piece of software, but it's still limited to just 100 players in an instance. A lot of apps is limited by what your client-side processing is capable of keeping track of and rendering. And so a lot of folks are excited about cloud gaming because they think, oh, well. What if you had a 1,000-person Battle Royale or 1 million-person Battle Royale that took place over days, if not weeks? And so it feels like the first iteration of what folks think of when they think of next-gen social and cloud gaming.
22:58 Speaker 02 Yeah, should it be that big? Should we be having 1,000-person Battle Royales?
23:03 Speaker 01 I'm not convinced that 1,000-person Battle Royales are going to be the best thing. I think an MMO could be a place where the more people, the better. So I'm going to get into a bit of theory here about network design, because this is where I really see the best answer to your question. If you think about a network where people are the nodes and the connections or the links between a network are the interactions, typically, networks with a lot of weak links in network theory grow much bigger. So for example, that's why you'll have more people following you on a Twitter than a Facebook.
23:46 Speaker 01 Those are much lighter ways to interact. And so when we think about cloud gaming and designing the IPs of the future, I think it's leveraging all of those different types of interactions. So we talked about a lot of very deep links of interaction, right? That's me creating maybe my own world where other people come join me. That's a very involved thing. And if you think, let's say, we're making a shooter game, actually being the person who has a controller or is playing on mouse and keyboard, that's also a pretty deep connection. On the other end of it, you have the watchers who are now, for the most part, even with live streaming, disconnected. Sometimes there's chatting and impacting it. But that's a light connection that we're starting to see,
24:31 Speaker 01 but only through text, the impact bleeding through. And I think the really exciting thing about when you think about what cloud gaming Wave 2 opens up is that full spectrum of interaction, which means that you can really grow an IP or a platform or a social network to be a much more powerful network, because you can enable those light ways of interaction.
24:54 Speaker 02 So what is the benefit of that lighter touch?
24:57 Speaker 01 It's accessibility, it's accommodating different ways of play for different moods as well. Probably when I've carved out two hours to be in front of my TV and I really want to be immersed. I'm looking for one experience when I'm on my phone, standing in line somewhere. I want a different type of experience. So it's both to address mood, but also accessibility. I think a good example of this is when you think about the Star Wars franchise. It's a great model of an IP that's an entertainment network. Because I can just get a little Yoda sticker and I'm somehow involved. But that's a very lightweight way to be involved, right? All the way to be, I could be creating fanfiction within the franchise.
25:41 Speaker 01 Ultimately, the benefit of that for players is that I can feel included. No matter what my device is, my skill level, my time availability, I can participate. I don't have to feel like I'm left out from my friends who are gaming or left out of the experience. And I think from the point of view of creators, you can reach a lot more people and create much more rich experiences.
26:04 Speaker 03 Regardless of what device you're on, what mood you're in, your gameplay experience should be able to adapt to your personal setting and your desires and moods and device. And I think that that's only made possible with something like a cloud needed game that lives in the internet, that has access to all of the data on you, where you are, what device you're on. If you combine that with something like the AI director, it ensures that everyone has their own personal journey when they're entering a world or a game, and that it's a good experience as well.
26:35 Speaker 01 I also read your article talking about people coming back to play D and D. You know, there aren't very many great DMs in the world. And maybe that limits the amount of people who can enjoy that kind of story. So that's something that an AI director could be taught to do and learn. And actually, we could probably through ML, create the best DMs on the planet, right? Could learn what's most entertaining, what makes a great story and how to react on the fly to people's reactions.
27:03 Speaker 03 I think that that could be crowdsourced somehow. I think it opens up the audience potentially way, way, way more massively than it is now, right? We actually have to find someone physically to come over into the DM again.
27:14 Speaker 01 Yeah, and what you're talking about really is also the magic that makes that experience personal and worth sharing, right? And worth sharing is a term that we use a lot as a Guiding direction with our game dev team, either sharing in the moment with multiple people, or it's so personal and so unique that it's worth sharing, even if it's a single-player experience. Because if my version of the experience is exactly yours, then there's no point in me sharing it with you. You're going to say, yeah, I got through that level. Maybe it was slightly different, but it's more or less the same. The more we can enable these experiences, the more personal they are to you, therefore more meaningful and more engaging. But the more also they're worth sharing.
27:55 Speaker 03 One of the unique things about video games as well is that it's one of the only forms of entertainment that dynamically generates video as it's consumed. Like, if you listen to music, that's not the case. If you read a book, that's not the case. If you're just consuming it. But in video games, the act of playing generates clips that can be shared virally over Reddit and Twitch and YouTube and so on. And so this is really leaning into just the unique strengths of the medium as our video generator as well, which, to your point, is immensely shareable.
28:25 Speaker 01 And then all kinds of things can have different effects as well on that video generation, which means that my particular experience is not only me and personalized, but then the moment in time and how everyone else interacted with it then, too.
28:38 Speaker 02 Do you feel that that unlocks more interactivity between players who haven't interacted before? Does it open up the experience to more spontaneous interactions among strangers as it becomes bigger and as it becomes more open?
28:52 Speaker 03 If you think about how we actually socialize in the real world, pre-pandemic, it's common for you to just say to a friend, hey, let's meet up at a bar or at a shopping mall. And then you meet up with them. And you don't necessarily have this agenda that's planned out, right? It's more like we're going to meet up at the mall and then we're just going to hang out and wander around. Maybe we'll meet some people and then we'll go home and have dinner. What is the digital equivalent of that? People point to video games, but then the reality is that most video games, they are very purposeful. It's like, I will. Call you up in Discord and say, hey, like, let's go play Baldur's Gate 3. And we'll meet up and then we'll play Baldur's Gate 3 for two hours and then we'll adjourn.
29:33 Speaker 03 In a cloud-native gaming world, is it possible to have the dominant social modality actually shift closer to what it's like in the real world? Where I'm just saying to Jade, let's go to XYZ place, you know, the E T games, for example. And then we'll just wander, but it's not planned out, it's not purposeful.
29:53 Speaker 01 I think that's the vision of the metaverse that many of us have been wanting to see coming for years. I actually was at a startup in 2000 that was trying to make the metaverse back in the first dot com boom. It is one of those things that finally you can see happening now with cloud gaming. You don't have to worry about the downloads, you don't have to worry about the load times, you don't have to worry about the simulation or the processing power of the device that you're on. And you could have that experience of either it's just hanging out and wandering with a really smart personalized playlist for you and your friend, or you could maybe input your mood at the time and the playlist could be adapted.
30:33 Speaker 01 Oh, the other time they were in the mood for that, this is kind of the type of thing that they liked experiencing. That's the holy grail of where we get to at some point.
30:42 Speaker 02 Jade, you mentioned you were at a startup trying to build this vision back in 2000. A question for both of you is, why is that concept of cloud-native gaming so daunting? What are some of the challenges developers face today when building cloud-native games?
30:59 Speaker 03 My guess is that the first attempts at making cloud-native games, you don't actually know what's going to work. You're sort of experimenting in this giant gray box. And so talking to folks early on, like last year when Stadia first launched, I think a lot of developers are very excited about bigger, better, let's make 1,000-person battle royals. And they were very excited about possibility of making ultra-realistic graphics. Okay, we're going to make characters that are so realistic, you can see like every hair on their face powered by racks of supercomputers. And the fallacy of all this is that there's taking What worked at the last paradigm, which is the console generations where you have more and more powerful hardware and that enables better graphics and enables more people to play together. And they're just applying that to the cloud.
31:43 Speaker 03 But what they're not getting is that the stuff that's actually going to be unique to the cloud is actually a complete reimagination of these paradigms of gaming. But it's taken a while to figure that out.
31:53 Speaker 02 That's something that has kind of run through this whole conversation is we talk about how we're in phase one of cloud native gaming. We're reaching for phase two. John, I remember in your post, you said you thought we'd see the first cloud native games hit the market in, I think, two or three years. That was a year ago. How far out are we from that vision?
32:13 Speaker 03 It feels like we're still early. People are experimenting and I'm excited to see the first games hit the market, hopefully the next year or two.
32:21 Speaker 01 Yeah, I don't think of it as being like bam, we're going to be in wave two and we're all going to be like, whoa. I think we're going to slowly see the cloud native features be introduced and realize we're kind of going to have these different little moments of epiphany like, oh, okay, I get it. That's cool. That really changes things. I think we're starting to see some of those things now. Some of the features that we've integrated with YouTube in terms of crowd play and crowd choice. You can be queuing to play or comment on and impact the creator or streamer's game. That's starting to do some cloud interaction and bleeding into the wave one. We're going to start to see the games with procedural generation or physics simulation or number of players that are going to be
33:04 Speaker 01 ten Xing what's possible in local hardware, probably in the two or so year range. I think if someone is going to say, we're going after the Westworld vision, that's probably a six year vision to deliver. I'd say, and you know, with a lot of resources.
33:21 Speaker 02 I mean, that's actually a little scary. Six years to Westworld, that's.
33:27 Speaker 01 Well, it would maybe be a janky US.
33:29 Speaker 03 I can't wait. 5G is being deployed globally right now. I think that's also extremely exciting for the potential impact on mobile gaming. Because you can essentially now stream 1080p HD quality video to your phone as you're commuting, as you're jogging, as you're waiting in line for your sandwich. I think that opens up a whole new world.
33:49 Speaker 02 Following on to your point Jade, so what is your vision for the gaming landscape then? In five years, how do we see this evolving? And what trends are emerging that we anticipate becoming more influential in the space?
34:02 Speaker 01 It really is games as the new social platform. That's number one. More and more, we're seeing the needs of players as a game as my place to hang out. Right? It's not just my entertainment. It's my loved pastime. It's my subculture. It's the identity of my community. With those needs, how do we deliver something that wasn't possible before? I've never worked at Nintendo, but I do feel that looking at their approach to creating new hardware from an outside observer's opinion, it seems like they take a really user-first needs approach.
34:42 Speaker 01 Okay, you know, we recognize a need for the family to have a pastime to do together. Families have fun when they get to move, right? And that's when the Wii gets designed and a whole suite of games that sold really well and outdid the conventional thinking of we just want more processing power or whatever. And I think the proof point is something we talked about earlier, which is Among Us being the big hit. Fall Guys being a big hit. Like now we're in this really exciting year where all of these big hits are coming from these small indie developers. You know, three people or new teams. And it shows that people on the pulse of what the new generation of gamers want
35:27 Speaker 01 are really going to be able to make the things that are most meaningful.
35:32 Speaker 03 But also a few was like in games has been in the acceleration of new hits. Fortnite was a hit back in 2018 and then. Before Fortnite, I think the last big hit that reached a similar level of scale was probably Pokemon Go. And that was like 2015 or 16. So it was like two or three years between those hits. But if you look at what's happened over the last year, we've had three, four major hits that have had tens of millions of people playing. Fall Guys, Among Us, there was Apex Legends, and the whole idle chess phenomenon that came out last year.
36:04 Speaker 01 Yeah, it's part of games really being part of pop culture now. I think that's a fundamental shift that's happened as well, whereas that was always the case with music, for example, right? Like, if you want to be cool with your group of friends, like you had to know about the latest rap track, the latest K-pop band. And games are so widely played by everyone now, especially in the younger generations, that you also need this as social currency. If you're a creator, obviously, you needed a social currency to stay on the edge of being in the know. But even as a player, you need to talk about that.
36:40 Speaker 01 And so it's really an interesting phenomenon shift when a medium goes from being for core to being something that everyone cares about.
36:50 Speaker 03 I think what struck me the most about Among Us was just the diversity of people playing it and also tweeting about it on social media. You have older folks that you would nearly identify as gamers. You know, my wife is a big fan of Among Us, and she plays it bi-weekly with a circle of moms for the event about their kids while playing Among Us, for example.
37:10 Speaker 03 A huge diversity of these people that are now gamers. I think it's an inflection point for the industry. It's no longer just little kids playing in their abasements, governments gaming.
37:19 Speaker 01 Yeah, and that's exciting to me because I do have stereotypical core gamer tastes. I do like good action game and stuff personally, but I'm very excited about being able to make games for different audiences and also amplifying the voices of new creators with different perspectives. And so hopefully, there will be a game made especially for moms who want to vent about their kids at school, playing in the background, right? Cool, like, why not?
37:45 Speaker 03 And let's not forget that we also have concerts and birthday parties and Fortnite and Roblox. It's at the beginning of a new wave of virtual events where there are actually events that are better held in the virtual world than in real life. What are the other events? That might spawn from a similar concept. And there's a political fundraisers. Is it schools?
38:06 Speaker 01 Absolutely. I think the whole area of events and performance and what that means virtually, live, real time performance is really, really exciting. I also think there are certain ways that virtual can unlock things in a better way. I mean, we always think about the downsides, but there's also a lot of benefits to doing things virtually. And I think as we think of the new constraints or some of the constraints that we have in the world and spending more of our time on screens or in virtual social environments, there are ways to think, okay, maybe a virtual concert or a virtual performance or a virtual class can be even more fulfilling.
38:43 Speaker 02 To be determined. Well, thank you both so much for joining us on the A16Z podcast. It's been such a pleasure.
38:51 Speaker 01 Thank you, Lauren. It's been great.
38:53 Speaker 03 Thank you.
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