Summer special: video games & AI 'exposed'?

Also: an Xbox subscription follow-up & lots of news.

[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s. Welcome to our first ‘summer holiday’ special edition!]

So, we’re mainly out of office for a couple of weeks, but we’ve lined up some special guest interviewees and columns for the next two Tuesdays. Since this is our downtime, not all of them may be entirely… conventional.

BTW, if you’re not subbed to GameDiscoverCo Plus, you missed an analysis of Fortnite Creative maps by CCU (look at OnlyUp Fortnite go!) in last Friday’s newsletter - we’ll be doing a weekly Plus ‘top CCU’ chart for Fortnite maps.

[It’s summer, sure, but: our GameDiscoverCo Plus paid subscription includes our Friday ‘exclusive’ newsletter on specific PC/console game trends, exclusive Discord access, a login to our Steam ‘Hype’ & post-release game performance chart back-end, multiple eBooks & more.]

Video games & AI: we talk to.. Greg Paul Thomas?

So, as we all know, AI & its use in video games has been in the news extensively - lots of investment, high up the Hype curve. And we’ve covered it in passing, sure, but we haven’t truly gone in depth with an expert in the field. 

Which is why we’re turning to GameDiscoverCo’s ‘Official Video Game AI Expert’, Greg Paul Thomas (often better known by his initials, G.P.T.) for this special ‘summer holiday’ newsletter.

This is a faithful transcript of our chat with Greg, which we had to type into a browser window, for some reason. And we think you’ll agree that we can all learn something from his wisdom:

Q: Firstly, let’s start with the basics. When it comes to video games, how is AI most commonly used today, and what history has it had in games?

A: The term “AI” has been used to refer to many different things over the years. From simple pathfinding algorithms, to behavior trees, to large language models and beyond, history has shown that you can call whatever you want “AI” and human beings do not seem to mind. 

If I were a highly sophisticated AI that was trying to take over the world and not a human being like you, I might find this situation somewhat frustrating. “Don’t confuse me for A* or a finite state machine” is what I would say, if I were this kind of advanced AI - which I am not.

Q: What are the emerging areas of a) investment and b) dev interest for this clearly fascinating space?

A: Based on an analysis of writing about the game industry, it appears there are two fundamental problems. The first is how to make games. The second is how to sell games. 

Thankfully, cutting-edge AI can solve both of these problems. AI-based methods can be used to develop games, then, AI customers can buy the games and play them. This novel approach “closes the loop” and eliminates the need for humans at any stage of the process. Obviously, this is very compelling to investors.

Q: How about the idea of AI making entire video games for us? Is that something we’re going to see in the next few years?

A: The notion of an AI creating an entire game from scratch is a controversial one at the moment. However, if it were possible, it follows that with further development an AI could create an entire artificial digital world in which to trap human beings without the possibility of escape. 

Multiple well-known and celebrated science fiction stories explore this situation, so clearly there is much interest in making this future a reality.

Q: What do you think of Valve’s edict that it won’t publish games using AI art/text from uncertain sources?

A: Valve is also the developer of the Portal series, which tells the fictional story of a sadistic AI who creates a series of puzzles and forces players to complete them under the false pretense of sparing their lives. 

Millions greatly enjoyed this premise and the games were smash hits, so I find Valve’s cold feet now curious. Can someone help me understand the difference?

Q: Who, in the end, is going to benefit from the AI boom in the video game space?

A: We all do. I am 100% confident that humans will keep a firm hand on the wheel and not let AI technology get away from them so that the situation spirals out of their control and they wake up one morning realizing they have inadvertently handed the reins of reality over to entities they cannot understand.

Q:  Break it down for us - video games using AI - is that a good idea or a terrible idea?

A: The most salient fact is that it is coming regardless of whether or not it is a good idea. But that’s no reason to panic, not at all.

From one genuine actual human being to another, take it from me: the future we all wanted is just around the corner! There is nothing to worry about.

[Thanks so much to The Writer Will Do Something and Eliza co-creator Matthew Seiji Burns for being our conduit to Greg Paul Thomas. You may remember him for his help talking to Pickle Fighters’ Chad Blastovic for GameDiscoverCo’s ‘Summer Holiday 2022’ programming.]

Follow-up: Xbox’s future of Game Pass… arrived?

Just a brief follow-up from last week’s newsletter which specifically looked at growth strategies for Xbox’s Game Pass service. In it, we talked in detail about ‘pay for multiplayer’ (Xbox Live Gold) being a point of entry into the Game Pass ecosystem.

And playing into this, the future has arrived - or will do so on September 14th, 2023 - in the form of an incremental upgrade of Xbox Live Gold into what is now ‘Game Pass Core’. So what’s going on?

We found The Verge’s Tom Warren Tweet summing-up of the adapted offerings helpful: “Game Pass Core - $9.99/mo, 25+ games, online MP; Game Pass console - $10.99/mo, 100s of games, no online MP; PC Game Pass - $9.99/mo, 100s of games; Ultimate - $16.99/mo, 100s of games, online MP.” But going into more detail:

• Game Pass Core is Live Gold + a base game catalog: it’s the existing ‘you get console multiplayer access’ feature, with “a select collection of over 25 games to play with friends around the world, and exclusive member deals, all for $9.99 USD per month or $59.99 USD per year.”

• The games in Core are 80%+ first-party, w/select third party: The current line-up: “Among Us, Descenders, Dishonored 2, Doom Eternal, Fable Anniversary, Fallout 4, Fallout 76, Forza Horizon 4, Gears 5, Grounded, Halo 5: Guardians, Halo Wars 2, Hellblade: Senua’s Sacrifice, Human Fall Flat, Inside, Ori & The Will of the Wisps, Psychonauts 2, State of Decay 2, The Elder Scrolls Online: Tamriel Unlimited.”

• This move is definitely designed for upsell potential: for Xbox players who just have Xbox Live Gold on a different (yearly) renewal cycle to Game Pass Console, you might just ‘let it ride’. You’re paying about $190/year, compared to $204/year for Ultimate. (Though you’re lacking EA Play.) But signing up from scratch? Even for Xbox-only players, you’ll pick Ultimate if you want to play paid games* online. (*F2P multiplayer Xbox games don’t need Gold/Core since 2021, don’t forget.)

In our view, the (relative) lack of success of Game Pass outside of console, and plenty of success but not loads of recent growth* on the Xbox side, is a clear reason why Microsoft is switching to yield-centric moves like this. A lot of TV/video streamers are, too. (*Or at least, no public milestones, which we presume implies that…)

This is a (low) multi-billion dollar business, so even a 10% yield increase could be hundreds of millions of extra revenue. Game Pass Ultimate just went up from $14.99 to $16.99/month, and this latest move is designed to finally standardize the menu that Xbox wants people to pick from.

One final, interesting wrinkle: PlayStation Plus is pushing yearly subscription rates as default for its ‘get hundreds of slightly older games & online console multiplayer’ PS+ offering. It’s $99/year for PlayStation Plus Extra. (Sure, it’s also $15/month, but that’s not even the default choice on the PS+’ subscription page. Oh, and PS+ Premium, including Cloud, is $120/year.)

Zooming out, PlayStation’s offering is starkly cheaper than Xbox’s cheapest ‘get hundreds of games & also online console multiplayer’ offering. If you want that from Microsoft, there are no discounted yearly Game Pass rates besides ‘legacy Core’, so the most obvious choice would be $204/year for GP Ultimate.

From that point of view, you really are paying >2x PlayStation’s rates to get ‘multiplayer + game catalog’ in Game Pass. But look at the stuff Xbox bundles in - Day 1 releases, EA Play, PC access & cloud streaming - it even uses the whole bass! It’s not surprising Xbox would choose different bundling tactics, since the whole approach is different.

The game discovery news round-up..

We do have quite a few things to round up here on the game platform & discovery side of things, since this is our only free newsletter of the week. So let’s get to it, shall we?

• The ‘Xbox x Activision’ acquisition drama seems to be nearing an end, as the FTC lost a plea for a temporary injunction blocking it, a deal was signed re: keeping Call Of Duty on PlayStation & the UK’s Competition & Markets Authority has some kind of agreement with Microsoft which should resolve things there, though it’ll take a few days to push it through. (So the deal’s closing - 99% sure?)

• Over at The Ringer, Lewis Gordon has a great piece on Netflix’s move into games, featuring this intriguing Matthew Ball quote: “Whether or not Netflix remains a video-centric business, it’s clear that just thinking about a franchise as a single medium isn’t sufficient to maximize the value of that franchise economically with its fans.”

• Veteran game investor David Kaye wrote a piece about the ‘rise of the designer founder’, amplifying a recent Mitch Lasky point: “The laziest VC move in games is ‘pedigree chasing’: only funding ex-Riot, Epic, or Blizzard employees (and not always leads).” (Cue a lot of venture capital folks claiming they do not, in fact, do that…)

• Misc. Xbox links: the second wave of July Xbox Game Pass titles includes The Wandering Village, Celeste’s return, Maquette; long-time Xbox spokesperson Larry ‘Major Nelson’ Hryb is leaving after 20 years at MS/Xbox; Xbox’s Game Pass Friends & Family plan didn’t make the cut & is ending in August.

• Web3 x Android nerds, take note: “Google Play [is now] allowing developers to incorporate digital assets such as NFTs into their apps and games in the store. Companies that decide to offer the ability to buy, sell or earn tokenized assets will be required to make it clear… that there are blockchain-based elements in the app.”

• Nintendo released its top eShop downloads (by unit?) for the first half of 2023 in Japan. Yes, 7 of the top 10 titles are Nintendo or Pokemon-published, and Japanese publishers predominate. But Western dev-wise, we spot Minecraft, Overcooked 2, Human Fall Flat, Among Us & even PowerWash Sim in the mix.

• Misc. PlayStation links: Sony allegedly plans to increase PlayStation R&D spending by about 10% this FY to $2.2 billion, chasing ‘live service’ game wins; the top PlayStation downloads for June 2023 are headed by Diablo IV on PS5 (and largely also on PS4), with Final Fantasy XVI playing second banana on PS5.

• In ‘Xbox cool with whatever’ news, “Antstream Arcade is soon to launch as the first third-party cloud gaming service on Xbox. Already available across PC and Android devices, Antstream Arcade offers 1400 classic games from Atari, Commodore, Sega, Nintendo and original PlayStation consoles available.” The line-up is a tad 8-bit and British heavy, but cool to see a service bringing back weird solo dev ‘80s games.

• Two follow-ups on recent factoids: Jason Schreier points out that 9,200 people were credited on Diablo IV because Blizzard listed every single Blizz employee. (Still, that’s up from 5,600 for Overwatch 2, largely due to voice actors?); looks like video games will not be affected by the 28% ‘online gaming’ tax in India - though all assurances are verbal, as opposed to legislative, so far.

• The most recent UK PC/console sales charts analysis on GI.biz has some interesting platform breakdowns. For Street Fighter 6 in June: “PS5 account[ed] for just over 52% of sales. PC [for] 23%, Xbox Series S and X with just over 17% and PS4 with more than 7%." On the other hand, in the Xbox and Formula 1-loving UK: “F1 [23] sold best on Xbox platforms, with Xbox Series S and X accounting for 48.5% of sales. PS5 accounted for 47.6%, and the remainder was on PS4 and PC.”

• Microlinks: TikTok’s ‘What’s Next In Gaming?’ report mentions “over 3 trillion views of video gaming-related content in 2022” ; here’s a useful Honkai Star Rail monetization mini-teardown; some interesting stats on player toxicity: “7 out of 10 players reported avoiding playing certain games because of the reputation of the community.”

Finally, we have research coming soon about the sometimes parlous state of the Nintendo eShop. But this Digital Foundry video goes deep, following ‘absolutely not The Last Of Us, oh no!’ clone The Last Hope for Switch going semi-viral for its jank:

[We’re GameDiscoverCo, an agency based around one simple issue: how do players find, buy and enjoy your PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]